SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Registration No. 33-2659
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Pre-Effective Amendment No.
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Post-Effective Amendment No. 32
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and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
1940 Act File No. 811-4556
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Amendment No. 34
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(Check appropriate box or boxes.)
IDEX MUTUAL FUNDS
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(Exact Name of Registrant as Specified in Charter)
570 CARILLON PARKWAY, ST. PETERSBURG, FLORIDA 33716
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (727) 299-1800
JOHN HURLEY, P.O. BOX 5068, CLEARWATER, FLORIDA 33758-5068
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(Name and Address of Agent for Service)
Approximate date of proposed public offering:
It is proposed that this filing will become effective:
[ ] 60 days after filing pursuant to paragraph (a) (1) of Rule 485.
[ ] 75 days after filing pursuant to paragraph (a) (2) of Rule 485.
[ ] On (date) pursuant to paragraph (a) (1) of Rule 485.
[ ] On (date) pursuant to paragraph (a) (2) of Rule 485.
[ ] Immediately upon filing pursuant to paragraph (b) of Rule 485.
[X] On November 1, 1999 pursuant to paragraph (b) of Rule 485.
If appropriate, check the following box:
[ ] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
<PAGE>
PROSPECTUS NOVEMBER 1, 1999
[IDEX LOGO] Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved these securities
or passed upon the adequacy or accuracy of this prospectus. Any
representation to the contrary is a criminal offense.
IDEX MUTUAL FUNDS
<PAGE>
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IDEX MUTUAL FUNDS
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TABLE OF CONTENTS
All About the IDEX Funds
[ ] Janus Capital Corporation (Sub-Adviser)
IDEX JCC Growth ..........................................................2
IDEX JCC Global ..........................................................4
IDEX JCC Balanced ........................................................6
IDEX JCC Capital Appreciation ............................................8
IDEX JCC Flexible Income ................................................10
[ ] T. Rowe Price Associates, Inc. (Sub-Adviser)
IDEX T. Rowe Price Dividend Growth ......................................12
IDEX T. Rowe Price Small Cap ............................................14
[ ] Goldman Sachs Asset Management (Sub-Adviser)
IDEX Goldman Sachs Growth ...............................................16
[ ] Salomon Brothers Asset Management Inc (Sub-Adviser)
IDEX Salomon All Cap ....................................................18
[ ] Fred Alger Management, Inc. (Sub-Adviser)
IDEX Alger Aggressive Growth ............................................20
[ ] Pilgrim Baxter & Associates, Ltd. (Sub-Adviser)
IDEX Pilgrim Baxter Mid Cap Growth ......................................22
[ ] AEGON USA Investment Management, Inc. (Sub-Adviser)
IDEX AEGON Income Plus ..................................................24
IDEX AEGON Tax Exempt ...................................................26
[ ] GE Investment Management Incorporated & Scottish Equitable
Investment Management Limited (Sub-Advisers)
IDEX GE/Scottish Equitable International Equity .........................28
[ ] Dean Investment Associates (Sub-Adviser)
IDEX Dean Asset Allocation ..............................................30
[ ] Luther King Capital Management Corporation (Sub-Adviser)
IDEX LKCM Strategic Total Return ........................................32
[ ] NWQ Investment Management Company, Inc. (Sub-Adviser)
IDEX NWQ Value Equity ...................................................34
[ ] C.A.S.E. Management, Inc. (Sub-Adviser)
IDEX C.A.S.E. Growth ....................................................36
Explanation of Strategies and Risks .......................................38-40
How the IDEX Funds are Managed and Organized ..............................41-43
Shareholder Information ...................................................44-49
[ ] How to Buy Shares .......................................................44
[ ] How to Sell Shares .....................................................44
[ ] How to Exchange Shares ..................................................44
[ ] Other Account Information ............................................45-47
Distribution Arrangements ....................................................50
Financial Highlights ......................................................54-62
Appendix A ..................................................................A-1
IDEX Mutual Funds (Fund) consists of 18 individual funds. Each fund invests in a
range of securities, such as stocks and/or bonds. Please read this prospectus
carefully before you invest or send money. It has been written to provide
information and assist you in making an informed decision.
If you would like additional information, please request a copy of the Statement
of Additional Information (SAI) (see back cover).
In addition, we suggest you contact your financial professional or an IDEX
customer service representative, who will assist you.
TO HELP YOU UNDERSTAND...
In this prospectus, you'll see symbols like the ones below. These are "icons,"
graphic road signs that let you know at a glance the subject of the nearby
paragraphs. The icons serve as tools for your convenience as you read this
prospectus.
/target/ The target directs you to a fund's goals or objective.
/chess piece/ The chess piece indicates discussion about a fund's strategies.
/warning sign/ The warning sign indicates the risks of investing in a fund.
/graph/ The graph indicates investment performance.
/dollar sign/ The dollar sign indicates fees and expenses of a fund.
/questionmark/ The question mark indicates fund information or it will direct
you on how to obtain further information.
AN INVESTMENT IN THE FUND IS NOT A DEPOSIT OF A BANK AND IS NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT
AGENCY.
<PAGE>
IDEX JCC GROWTH
(FORMERLY GROWTH PORTFOLIO)
SUMMARY OF RISKS AND RETURNS
/target/ OBJECTIVE
The objective of IDEX JCC Growth is growth of capital.
This fund may be appropriate for investors who want capital growth in a broadly
diversified stock portfolio, and who can tolerate significant fluctuations in
the value of their investment.
PRINCIPAL STRATEGIES AND POLICIES
The fund's sub-adviser, Janus Capital Corporation (JCC), seeks to achieve this
objective by investing principally in:
[ ] common stocks listed on national exchanges or on NASDAQ which JCC believes
have a good potential for capital growth, some of which may be of foreign
issuers
The fund's main strategy is to invest almost all of its assets in common
stocks at times when JCC believes the market environment favors such investing.
JCC builds the fund one company at a time, emphasizing growth of capital by
investing in companies JCC believes to have the greatest earnings growth
potential.
While investments are focused on earnings growth, JCC also searches for
companies that it believes are trading at reasonable prices relative to their
future earnings growth. To locate these opportunities, JCC subjects each company
to rigorous "bottom up" fundamental analysis, carefully researching each
potential investment before and after it is incorporated into the fund.
Although themes may emerge in the fund, securities are generally selected
without regard to any defined industry sector or other similarly defined
selection procedure. Realization of income is not a significant investment
consideration for the fund and any income realized on the fund's investments is
incidental to its objective.
JCC may sell stocks when its expectations regarding earnings growth change,
there is an earnings surprise, or the earnings change.
While the fund invests principally in common stocks, JCC may also invest in
futures and foreign securities, or other securities and investment strategies in
pursuit of its investment objective, which are explained beginning on page 38
and in the SAI.
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WHAT IS A "BOTTOM UP" ANALYSIS?
When a sub-adviser uses a "bottom up" approach, it looks primarily at individual
companies against the context of broader market factors. It seeks to identify
individual companies with earnings growth potential that may not be recognized
by the market at large.
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/warning sign/ PRINCIPAL RISKS
The fund is subject to the following principal investment risks:
[ ] STOCKS
While stocks have historically outperformed other investments over the long
term, they tend to go up and down more dramatically over the shorter term. These
price movements may result from factors affecting individual companies,
industries or the securities markets as a whole.
Because the stocks the fund holds fluctuate in price, the value of your
investment in the fund will go up and down.
[ ] FOREIGN STOCKS
Investments in foreign securities (including ADRs, GDRs and EDRs) involve risks
relating to political, social and economic developments abroad, as well as risks
resulting from the differences between the regulations to which U.S. and foreign
issuer markets are subject. These risks include:
[ ] changes in currency values
[ ] currency speculation
[ ] currency trading costs
[ ] different accounting and reporting practices
[ ] less information available to the public
[ ] less (or different) regulation of securities markets
[ ] more complex business negotiations
[ ] less liquidity
[ ] more fluctuations in prices
[ ] delays in settling foreign securities transactions
[ ] higher costs for holding shares (custodial fees)
[ ] higher transaction costs
[ ] vulnerability to seizure and taxes
[ ] political instability and small markets
[ ] different market trading days
[ ] forward foreign currency contracts for hedging
You may lose money if you invest in this fund.
These and other risks are fully described in the section entitled "Explanation
of Strategies and Risks," beginning on page 38.
2
<PAGE>
/graph/ PAST PERFORMANCE
The bar chart and the table below show the fund's annual returns and its
long-term performance. The bar chart and table indicate the risks of investing
in the fund by showing you how the fund's performance has varied from year to
year. The bar chart does not reflect the impact of sales charges, which lower
the fund's return. The table compares how the fund's average annual returns for
different calendar periods compare to the returns of the S&P 500 Composite Stock
Price Index (S&P 500), a widely recognized unmanaged index of stock performance.
The bar chart and table assume reinvestment of dividends and capital gains
distributions. As with all mutual funds, past performance is not a prediction of
future results.
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Year-by-year total return as of 12/31 each year (%) (1)
CLASS A SHARES
--------------
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
44.54% (0.49)% 58.62% 1.17% 3.81% (8.47)% 47.12% 17.06% 16.52% 63.98%
(1) AS OF SEPTEMBER 30, 1999, THE END OF THE MOST RECENT CALENDAR QUARTER, THE
FUND'S YEAR-TO-DATE RETURN FOR CLASS A SHARES WAS 20.26%.
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Class A Shares: QUARTER ENDED RETURN
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Best Quarter: 12/31/98 27.95%
Worst Quarter: 12/31/97 (22.05)%
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Average annual total returns as of 12/31/98
SINCE
ONE YEAR 5 YEARS 10 YEARS INCEPTION
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A Shares 54.96% 23.33% 21.20% 19.08%
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B Shares 58.76% N/A N/A 29.40%
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M Shares* 61.15% 24.13% N/A 22.71%
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T Shares 50.15% 22.96% 21.16% 19.26%
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S&P 500** 28.58% 24.00% 19.16% 17.17%
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*ALL SHARES DESIGNATED AS CLASS C SHARES PRIOR TO MARCH 1, 1999 WERE RENAMED AS
CLASS M SHARES ON THAT DATE. EFFECTIVE NOVEMBER 1, 1999 THE FUND BEGAN OFFERING
A NEW CLASS C SHARE THAT HAS DIFFERENT FEES AND EXPENSES THAN THE PREVIOUS CLASS
C SHARE.
**SINCE INCEPTION OF CLASS A SHARES (5/08/86). SINCE INCEPTION OF CLASS
B SHARES (10/01/95) IS 28.04%; CLASS M SHARES (10/01/93) IS 23.28%; AND CLASS T
SHARES (6/04/85) IS 18.15%.
/dollar sign/ FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund.
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SHAREHOLDER FEES (fees paid directly from your investment)
Class of Shares
A B C T* M
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Maximum sales charge (load)
imposed on purchases
(AS A % OF OFFERING PRICE) 5.50% None None 8.50% 1.00%
Maximum deferred sales charge (load) None(a) 5.00% None None(a) 1.00%(b)
(AS A PERCENTAGE OF PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LOWER)
================================================================================
ANNUAL FUND OPERATING EXPENSES (c) (expenses that are deducted from fund assets)
% OF AVERAGE DAILY NET ASSETS Class of Shares
A B C M T*
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Management fees 0.93% 0.93% 0.93% 0.93% 0.93%
Distribution and service (12b-1) fees 0.35% 1.00% 1.00% 0.90% 0.00%
Other expenses 0.23% 0.23% 0.23% 0.23% 0.23%
-----------------------------------
TOTAL ANNUAL FUND OPERATING EXPENSES 1.51% 2.16% 2.16% 2.06% 1.16%
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(a) Certain purchases of Class A or Class T shares in amounts greater than
$1 million are subject to a 1% contingent deferred sales charge for 24
months after purchase.
(b) Purchases of Class M shares are subject to a 1% contingent deferred sales
charge if redeemed within 18 months of purchase.
(c) Annual fund operating expenses are estimated based on the fund's expenses
for the fiscal year ended 10/31/98.
A $10 fee will be charged twice a year for an account opened for more than 2
years with a balance below the share class minimum because of redemptions.
*Not available to new investors.
================================================================================
EXAMPLE
This example is here to help you compare the cost of investing in this fund with
that of other mutual funds. It shows the cumulative expenses you'd pay if you
invested $10,000 and held your shares for various time periods, with a 5% annual
return and fund operating expenses remaining the same. This return is for
illustration purposes and is not guaranteed. Actual costs may be higher or
lower.
If the shares are redeemed at the end of each period:
Share Class 1 year 3 years 5 years 10 years
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A $695 $1,001 $1,328 $2,252
B* $719 $ 976 $1,259 $2,326
C $219 $ 676 $1,159 $2,493
M $406 $ 739 $1,197 $2,466
T $958 $1,187 $1,434 $2,139
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If the shares are not redeemed:
Share Class 1 year 3 years 5 years 10 years
- --------------------------------------------------------------------------------
A $695 $1,001 $1,328 $2,252
B* $219 $ 676 $1,159 $2,326
C $219 $ 676 $1,159 $2,493
M $307 $ 739 $1,197 $2,466
T $958 $1,187 $1,434 $2,139
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*EXAMPLES FOR CLASS B SHARES ASSUME THEY WILL CONVERT TO CLASS A SHARES EIGHT
YEARS AFTER YOU PURCHASE THEM.
3
<PAGE>
IDEX JCC GLOBAL (FORMERLY GLOBAL PORTFOLIO)
SUMMARY OF RISKS AND RETURNS
/target/ OBJECTIVE
The objective of IDEX JCC Global is long-term growth of capital in a manner
consistent with preservation of capital.
The fund may be appropriate for investors who want capital growth without being
limited to investments in U.S. securities, and who can stand the risks
associated with foreign investing.
/chess piece/ PRINCIPAL STRATEGIES AND POLICIES
The sub-adviser, Janus Capital Corporation (JCC), seeks to achieve this
objective by investing principally in:
[ ] common stocks of foreign and domestic issuers
[ ] depository receipts including ADRs, GDRs and EDRs
The fund may invest on a worldwide basis in companies and securities issued by
foreign or domestic governments, government agencies or other government
entities of any size, regardless of country of organization or place of
principal business activity.
JCC's main strategy is to use a "bottom up" approach to build the fund's
portfolio. Foreign stocks are generally selected on a stock-by-stock basis
without regard to defined allocation among countries or geographic regions.
When evaluating foreign investments, JCC (in addition to looking at individual
companies) considers such factors as:
[ ] expected levels of inflation in various countries
[ ] government policies that might affect business conditions
[ ] the outlook for currency relationships
[ ] prospects for economic growth among countries, regions or geographic areas
JCC sells the fund's securities when its expectations regarding growth potential
change.
While the fund invests principally in common stocks of foreign and domestic
issuers and depository receipts, JCC may also invest in forward foreign currency
contracts and futures for hedging, or other securities and investment strategies
in pursuit of the fund's investment objective, which are explained beginning on
page 38 and in the SAI.
- --------------------------------------------------------------------------------
WHAT IS A "BOTTOM UP" ANALYSIS?
When a sub-adviser uses a "bottom up" approach, it looks primarily at individual
companies against the context of broader market factors. It seeks to identify
individual companies with earnings growth potential that may not be recognized
by the market at large.
- --------------------------------------------------------------------------------
/warning sign/ PRINCIPAL RISKS
The fund is subject to the following principal investment risks:
[ ] STOCKS
While stocks have historically outperformed other investments over the long
term, they tend to go up and down more dramatically over the shorter term. These
price movements may result from factors affecting individual companies,
industries or the securities market as a whole.
Because the stocks the fund holds fluctuate in price, the value of your
investment in the fund will go up and down.
[ ] FOREIGN STOCKS
Investments in foreign securities (including ADRs, GDRs and EDRs) involve risks
relating to political, social and economic developments abroad, as well as risks
resulting from the differences between the regulations to which U.S. and foreign
issuer markets are subject. These risks include:
[ ] changes in currency values
[ ] currency speculation
[ ] currency trading costs
[ ] different accounting and reporting practices
[ ] less information available to the public
[ ] less (or different) regulation of securities markets
[ ] more complex business negotiations
[ ] less liquidity
[ ] more fluctuations in prices
[ ] delays in settling foreign securities transactions
[ ] higher costs for holding shares (custodial fees)
[ ] higher transaction costs
[ ] vulnerability to seizure and taxes
[ ] political instability and small markets
[ ] different market trading days
[ ] forward foreign currency contracts for hedging
YOU MAY LOSE MONEY IF YOU INVEST IN THIS FUND. These and other risks are fully
described in the section entitled "Explanation of Strategies and Risks,"
beginning on page 38.
4
<PAGE>
/graph/ PAST PERFORMANCE
The bar chart and the table below show the fund's annual returns and its
long-term performance. The bar chart and table indicate the risks of investing
in the fund by showing you how the fund's performance has varied from year to
year. The bar chart does not reflect the impact of sales charges, which lower
the fund's return. The table compares how the fund's average annual returns for
different calendar periods compare to the returns of the Morgan Stanley Capital
International World Index (MSCIW), a widely recognized unmanaged index of market
performance. The bar chart and table assume reinvestment of dividends and
capital gains distributions. As with all mutual funds, past performance is not a
prediction of future results.
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Year-by-year total return as of 12/31 each year (%) (1)
CLASS A SHARES
--------------
1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ----
31.28% 0.62% 20.03% 26.76% 20.44% 24.86%
(1) AS OF SEPTEMBER 30, 1999, THE END OF THE MOST RECENT CALENDAR QUARTER, THE
FUND'S YEAR-TO-DATE RETURN FOR CLASS A SHARES WAS 13.97%.
- --------------------------------------------------------------------------------
Class A Shares: QUARTER ENDED RETURN
------------- ------
Best Quarter: 12/31/98 18.50%
Worst Quarter: 9/30/98 (16.02)%
- --------------------------------------------------------------------------------
Average annual total returns as of 12/31/98
SINCE
ONE YEAR 5 YEARS INCEPTION
- --------------------------------------------------------------------------------
A Shares 17.98% 16.82% 21.59%
- --------------------------------------------------------------------------------
B Shares 19.42% N/A 22.09%
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M Shares* 22.34% 17.51% 20.07%
- --------------------------------------------------------------------------------
MSCIW** 24.80% 16.19% 16.55%
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*ALL SHARES DESIGNATED AS CLASS C SHARES PRIOR TO MARCH 1, 1999 WERE RENAMED AS
CLASS M SHARES ON THAT DATE. EFFECTIVE NOVEMBER 1, 1999 THE FUND BEGAN OFFERING
A NEW CLASS C SHARE THAT HAS DIFFERENT FEES AND EXPENSES THAN THE PREVIOUS CLASS
C SHARE.
**SINCE INCEPTION OF CLASS A SHARES (10/01/92). SINCE INCEPTION OF CLASS B
SHARES (10/01/95) IS 18.46% AND CLASS M SHARES (10/01/93) IS 15.74%.
/dollar sign/ FEES AND EXPENSES
The following table describes the fees and expenses that you may pay if
you buy and hold shares of the fund.
================================================================================
SHAREHOLDER FEES (fees paid directly from your investment)
Class of Shares
A B C M
- --------------------------------------------------------------------------------
Maximum sales charge (load)
imposed on purchases
(AS A % OF OFFERING PRICE) 5.50% None None 1.00%
Maximum deferred sales charge (load) None(a) 5.00% None 1.00%(b)
(AS A PERCENTAGE OF PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LOWER)
================================================================================
ANNUAL FUND OPERATING EXPENSES (c)(expenses that are deducted from fund assets)
% OF AVERAGE DAILY NET ASSETS Class of Shares
A B C M
- --------------------------------------------------------------------------------
Management fees 1.00% 1.00% 1.00% 1.00%
Distribution and service (12b-1) fees 0.35% 1.00% 1.00% 0.90%
Other expenses 0.47% 0.47% 0.47% 0.47%
-------------------------------
TOTAL ANNUAL FUND OPERATING EXPENSES 1.82% 2.47% 2.47% 2.37%
- --------------------------------------------------------------------------------
(a) Certain purchases of Class A shares in amounts greater than $1 million are
subject to a 1% contingent deferred sales charge for 24 months after
purchase.
(b) Purchases of Class M shares are subject to a 1% contingent deferred sales
charge if redeemed within 18 months of purchase.
(c) Annual fund operating expenses are estimated based on the fund's expenses
for the fiscal year ended 10/31/98.
A $10 fee will be charged twice a year for an account opened for more than 2
years with a balance below the share class minimum because of redemptions.
================================================================================
EXAMPLE
This example is here to help you compare the cost of investing in this fund with
that of other mutual funds. It shows the cumulative expenses you'd pay if you
invested $10,000 and held your shares for various time periods, with a 5% annual
return and fund operating expenses remaining the same. This return is for
illustration purposes and is not guaranteed. Actual costs may be higher or
lower.
If the shares are redeemed at the end of each period:
Share Class 1 year 3 years 5 years 10 years
- --------------------------------------------------------------------------------
A $725 $1,091 $1,481 $2,570
B* $750 $1,070 $1,416 $2,643
C $250 $ 770 $1,316 $2,806
M $437 $ 832 $1,353 $2,779
If the shares are not redeemed:
Share Class 1 year 3 years 5 years 10 years
- --------------------------------------------------------------------------------
A $725 $1,091 $1,481 $2,570
B* $250 $ 770 $1,316 $2,643
C $250 $ 770 $1,316 $2,806
M $338 $ 832 $1,353 $2,779
*EXAMPLES FOR CLASS B SHARES ASSUME THEY WILL CONVERT TO CLASS A SHARES EIGHT
YEARS AFTER YOU PURCHASE THEM.
5
<PAGE>
IDEX JCC BALANCED (FORMERLY BALANCED PORTFOLIO)
SUMMARY OF RISKS AND RETURNS
/target/ OBJECTIVE
The objective of IDEX JCC Balanced is long-term capital growth, consistent with
preservation of capital and balanced by current income.
This fund may be appropriate for investors who seek capital growth and income
from the same investment, but who also want an investment that sustains value by
maintaining a balance between equity and debt (stocks and bonds). The fund is
not for investors who desire a consistent level of income.
/chess piece/ PRINCIPAL STRATEGIES AND POLICIES
The fund's sub-adviser, Janus Capital Corporation (JCC), seeks to achieve the
fund's objective by investing principally in:
[ ] 40% to 60% in securities selected primarily for growth potential - such as
common stocks
[ ] 40% to 60% in securities selected primarily for income potential - both
equity and debt
The basic strategy of the fund is to maintain a growth component and an income
component. Normally, 40% to 60% of the fund's securities are chosen primarily
for their GROWTH potential, and the remaining 40% to 60% are chosen primarily
for their INCOME potential. These securities may include some of foreign
issuers.
The growth component is expected to consist mainly of common stocks in companies
and industries that JCC believes are experiencing favorable demand for their
products and services, and that are operating in a favorable competitive and
regulatory climate. In its analysis, JCC looks for companies with earnings
growth potential that may not be recognized by the market.
The income component will consist of securities that JCC believes have income
potential. Such securities may include equity securities, convertible securities
and all types of debt securities.
At least 25% of the fund's assets will normally be invested in fixed-income
securities, including bonds and preferred stock.
The sub-adviser uses a "bottom up" approach to select stocks. In other words,
JCC looks mostly for income producing securities that meet its investment
criteria one at a time. If JCC is unable to find such investments, the fund's
assets may be in cash or similar investments. Securities are selected without
regard to any industry sector or other similarly defined selection procedure.
Up to 35% of the fund's assets may be invested in high-yield/high-risk bonds
(commonly known as "junk bonds").
These bonds are rated below investment grade by the primary rating agencies.
The fund may shift assets between the growth and income portions of its
portfolio, based on JCC's analysis of the market and conditions in the economy.
If JCC believes that at a particular time growth investments will provide better
returns than the yields from income-producing investments, the fund may put a
greater emphasis on growth. The reverse may also take place.
JCC may sell the fund's securities when its expectations regarding earnings
growth potential change.
The fund may also invest in futures and foreign securities, or other securities
and investment strategies in pursuit of the fund's investment objectives, which
are explained beginning on page 38 and in the SAI.
- --------------------------------------------------------------------------------
WHAT IS A "BOTTOM UP" ANALYSIS?
When a sub-adviser uses a "bottom up" approach, it looks primarily at individual
companies against the context of broader market factors. It seeks to identify
individual companies with earnings growth potential that may not be recognized
by the market at large.
- --------------------------------------------------------------------------------
/warning sign/ PRINCIPAL RISKS
The fund is subject to the following principal investment risks:
[ ] STOCKS
While stocks have historically outperformed other investments over the long
term, they tend to go up and down more dramatically over the shorter term. These
price movements may result from factors affecting individual companies,
industries, or the securities market as a whole.
Because the stocks the fund holds fluctuate in price, the value of your
investment in the fund will go up and down.
[ ] FIXED-INCOME SECURITIES
The value of these securities may change daily based on changes in the interest
rates, and other market conditions and factors. The risks include:
[ ] changes in interest rates
[ ] length of time to maturity
[ ] issuers defaulting on their obligations to pay interest or return
principal
[ ] HIGH-YIELD/HIGH-RISK SECURITIES
[ ] Credit risk
[ ] Greater sensitivity to interest rate movements
[ ] Greater vulnerability to economic changes
[ ] Decline in market value in event of default
[ ] Less liquidity
YOU MAY LOSE MONEY IF YOU INVEST IN THIS FUND.
These and other risks are fully described in the section entitled "Explanation
of Strategies and Risks," beginning on page 38.
6
<PAGE>
/graph/ PAST PERFORMANCE
The bar chart and table below show the fund's annual returns and its long-term
performance. The bar chart and table indicate the risks of showing you how the
fund's performance has varied from year to year. The bar chart does not reflect
the impact of sales charges, which lower the fund's return. The table compares
how the fund's average annual return for different calendar periods compare to
the returns of the S&P 500 Composite Stock Price Index (S&P 500) and the
Lehman Brothers Government/Corporate Bond Index (LBGCB), widely recognized
unmanaged indexes of market performance. The bar chart and table assume
reinvestment of dividends and capital gains distributions. As with all mutual
funds, past performance is not a prediction of future results.
- --------------------------------------------------------------------------------
Year-by-year total return as of 12/31 each year (%) (1)
CLASS A SHARES
--------------
1995 1996 1997 1998
---- ---- ---- ----
25.20% 16.60% 21.17% 30.78%
(1) AS OF SEPTEMBER 30, 1999, THE END OF THE MOST RECENT CALENDAR QUARTER, THE
FUND'S YEAR-TO-DATE RETURN FOR CLASS A SHARES WAS 7.57%.
- --------------------------------------------------------------------------------
Class A Shares: QUARTER ENDED RETURN
------------- ------
Best Quarter: 12/31/98 18.31%
Worst Quarter: 9/30/98 (3.63)%
- --------------------------------------------------------------------------------
Average annual total returns as of 12/31/98
SINCE
ONE YEAR INCEPTION
- --------------------------------------------------------------------------------
A Shares 23.58% 21.07%
- --------------------------------------------------------------------------------
B Shares 24.96% 22.68%
- --------------------------------------------------------------------------------
M Shares* 27.79% 21.81%
- --------------------------------------------------------------------------------
S&P 500** 28.58% 30.20%
- --------------------------------------------------------------------------------
LBGCB** 9.49% 10.15%
- --------------------------------------------------------------------------------
*ALL SHARES DESIGNATED AS CLASS C SHARES PRIOR TO MARCH 1, 1999 WERE RENAMED AS
CLASS M SHARES ON THAT DATE. EFFECTIVE NOVEMBER 1, 1999 THE FUND BEGAN OFFERING
A NEW CLASS C SHARE THAT HAS DIFFERENT FEES AND EXPENSES THAN THE PREVIOUS CLASS
C SHARE.
**SINCE INCEPTION OF CLASS A SHARES AND CLASS M SHARES (12/02/94). SINCE
INCEPTION OF CLASS B SHARES (10/01/95) IS 8.26%. (LBGCB) AND 28.04% (S&P 500)6.
/dollar sign/ FEES AND EXPENSES
The following table describes the fees and expenses that you may pay if you buy
and hold shares of the fund.
================================================================================
SHAREHOLDER FEES (fees paid directly from your investment)
Class of Shares
A B C M
- --------------------------------------------------------------------------------
Maximum sales charge (load)
imposed on purchases
(AS A % OF OFFERING PRICE) 5.50% None None 1.00%
Maximum deferred sales charge (load) None(a) 5.00% None 1.00%(b)
(AS A PERCENTAGE OF PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LOWER)
================================================================================
ANNUAL FUND OPERATING EXPENSES (d) (expenses that are deducted from fund assets)
% OF AVERAGE DAILY NET ASSETS Class of Shares
A B C M
- --------------------------------------------------------------------------------
Management fees 1.00% 1.00% 1.00% 1.00%
Distribution and service (12b-1) fees 0.35% 1.00% 1.00% 0.90%
Other expenses 0.69% 0.69% 0.69% 0.69%
-------------------------------
Total annual fund operating expenses 2.04% 2.69% 2.69% 2.59%
Expense reduction (c) 0.19% 0.19% 0.19% 0.19%
-------------------------------
Net operating expenses 1.85% 2.50% 2.50% 2.40%
- --------------------------------------------------------------------------------
(a) Certain purchases of Class A shares in amounts greater than $1 million are
subject to a 1% contingent deferred sales charge for 24 months after
purchase.
(b) Purchases of Class M shares are subject to a 1% contingent deferred sales
charge if redeemed within 18 months of purchase.
(c) Contractual arrangement with Idex Management, Inc. through 11/1/2000.
(d) Annual fund operating expenses are estimated based on the fund's expenses
for the fiscal year ended 10/31/98.
A $10 fee will be charged twice a year for an account opened for more than 2
years with a balance below the share class minimum because of redemptions.
================================================================================
EXAMPLE
This example is here to help you compare the cost of investing in this fund with
that of other mutual funds. It shows the cumulative expenses you'd pay if you
invested $10,000 and held your shares for various time periods, with a 5% annual
return and fund operating expenses remaining the same. This return is for
illustration purposes and is not guaranteed. Actual costs may be higher or
lower.
If the shares are redeemed at the end of each period:
Share Class 1 year 3 years 5 years 10 years
- --------------------------------------------------------------------------------
A $728 $1,137 $1,571 $2,774
B* $753 $1,117 $1,508 $2,848
C $253 $ 817 $1,408 $3,008
M $440 $ 880 $1,445 $2,981
- --------------------------------------------------------------------------------
If the shares are not redeemed:
Share Class 1 year 3 years 5 years 10 years
- --------------------------------------------------------------------------------
A $728 $1,137 $1,571 $2,774
B* $253 $ 817 $1,408 $2,848
C $253 $ 817 $1,408 $3,008
M $341 $ 880 $1,445 $2,981
- --------------------------------------------------------------------------------
*EXAMPLES FOR CLASS B SHARES ASSUME THEY WILL CONVERT TO CLASS A SHARES EIGHT
YEARS AFTER YOU PURCHASE THEM.
7
<PAGE>
IDEX JCC CAPITAL APPRECIATION (FORMERLY CAPITAL APPRECIATION PORTFOLIO)
SUMMARY OF RISKS AND RETURNS
/target/ OBJECTIVE
The objective of IDEX JCC Capital Appreciation is long-term growth of capital.
This fund may be appropriate for investors who want capital growth and who can
stand the risks associated with common stock investments.
/chess piece/ PRINCIPAL STRATEGIES AND POLICIES
The fund's sub-adviser, Janus Capital Corporation (JCC), seeks to achieve the
fund's objective by principally:
[ ] investing the fund's assets in common stocks of medium-sized companies
Medium-sized companies are those whose market capitalizations, at the time of
purchase, fall within the range of the S&P Mid Cap 400 Index. As of September
30, 1999, this range was $240 million to $13 billion.
This fund invests in industries and stocks of companies that JCC believes are
experiencing favorable demand for their products and services, and are operating
in favorable competitive and regulatory environments.
JCC uses a "bottom up" approach when choosing securities for the fund's
portfolio. JCC makes this assessment by looking at companies one at a time,
regardless of size, country of organization, place of principal business
activity, or other similar selection criteria.
Although themes may emerge in the fund, stocks are usually selected without
regard to any defined industry sector or other similarly defined selection
procedure. Though income is not an objective of the fund, some holdings might
produce incidental income.
JCC may sell the fund's securities when its expectations regarding growth
potential change.
While the fund invests principally in common stocks of medium-sized companies,
JCC may also invest in stocks of smaller to larger companies, including some
foreign companies, or other securities and investment strategies in pursuit of
the fund's investment objective, which are explained beginning on page 38 and in
the SAI.
- --------------------------------------------------------------------------------
WHAT IS A "BOTTOM UP" ANALYSIS?
When a sub-adviser uses a "bottom up" approach, it looks primarily at individual
companies against the context of broader market factors. It seeks to identify
individual companies with earnings growth potential that may not be recognized
by the market at large.
- --------------------------------------------------------------------------------
/warning sign/ PRINCIPAL RISKS
The fund is subject to the following principal investment risks:
[ ] STOCKS
While stocks have historically outperformed other investments over the long
term, they tend to go up and down more dramatically over the shorter term. These
price movements may result from factors affecting individual companies,
industries or the securities market as a whole.
Because the stocks the fund holds fluctuate in price, the value of your
investment in the fund will go up and down.
[ ] MEDIUM-SIZED COMPANIES
These companies present additional risks because their earnings are less
predictable, their share prices more volatile, and their securities less liquid
than larger, more established companies.
This fund is non-diversified.
YOU MAY LOSE MONEY IF YOU INVEST IN THIS FUND.
These and other risks are fully described in the section entitled "Explanation
of Strategies and Risks," beginning on page 38.
- --------------------------------------------------------------------------------
WHAT IS A NON-DIVERSIFIED FUND?
A "non-diversified" fund has the ability to take larger positions in a smaller
number of issuers. To the extent a fund invests a greater portion of its assets
in the securities of a smaller number of issuers, it may be more susceptible to
any single economic, political or regulatory occurrence than a diversified fund
and may be subject to greater loss with respect to its portfolio securities.
However, to meet federal tax requirements, at the close of each quarter the fund
may not have more than 25% of its total assets invested in any one issuer, and,
with respect to 50% of its total assets, not more than 5% of its total assets
invested in any one issuer.
- --------------------------------------------------------------------------------
8
<PAGE>
/graph/ PAST PERFORMANCE
The bar chart and the table below show the fund's annual returns and its
long-term performance. The bar chart and table indicate the risks of investing
in the fund by showing you how the fund's performance has varied from year to
year. The bar chart does not reflect the impact of sales charges, which lower
the fund's return. The table compares how the fund's average annual returns for
different calendar periods compare to the returns of the S&P MidCap 400 Index
(S&P 400), a widely recognized unmanaged index of stock performance. The bar
chart and table assume reinvestment of dividends and capital gains
distributions. As with all mutual funds, past performance is not a prediction of
future results.
- --------------------------------------------------------------------------------
Year-by-year total return as of 12/31 each year (%) (1)
CLASS A SHARES
--------------
1995 1996 1997 1998
---- ---- ---- ----
36.62% 13.00% 12.18% 31.32%
(1) AS OF SEPTEMBER 30, 1999, THE END OF THE MOST RECENT CALENDAR QUARTER, THE
FUND'S YEAR-TO-DATE RETURN FOR CLASS A SHARES WAS 39.68%.
- --------------------------------------------------------------------------------
Class A Shares: QUARTER ENDED RETURN
------------- ------
Best Quarter: 12/31/98 34.17%
Worst Quarter: 9/30/98 (15.64)%
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS AS OF 12/31/98
SINCE
ONE YEAR INCEPTION
- --------------------------------------------------------------------------------
A Shares 24.09% 21.97%
- --------------------------------------------------------------------------------
B Shares 25.87% 18.00%
- --------------------------------------------------------------------------------
M Shares* 28.63% 22.89%
- --------------------------------------------------------------------------------
S&P 400** 18.98% 24.82%
- --------------------------------------------------------------------------------
*ALL SHARES DESIGNATED AS CLASS C SHARES PRIOR TO MARCH 1, 1999 WERE RENAMED AS
CLASS M SHARES ON THAT DATE. EFFECTIVE NOVEMBER 1, 1999 THE FUND BEGAN OFFERING
A NEW CLASS C SHARE THAT HAS DIFFERENT FEES AND EXPENSES THAN THE PREVIOUS CLASS
C SHARE.
**SINCE INCEPTION OF CLASS A SHARES AND CLASS M SHARES (12/02/94).
SINCE INCEPTION OF CLASS B SHARES (10/01/95) IS 21.80%.
/dollar sign/ FEES AND EXPENSES
The following table describes the fees and expenses that you may pay if you buy
and hold shares of the fund.
================================================================================
SHAREHOLDER FEES (fees paid directly from your investment)
Class of Shares
A B C M
- --------------------------------------------------------------------------------
Maximum sales charge (load)
imposed on purchases
(AS A % OF OFFERING PRICE) 5.50% None None 1.00%
Maximum deferred sales charge (load) None(a) 5.00% None 1.00%(b)
(AS A PERCENTAGE OF PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LOWER)
================================================================================
ANNUAL FUND OPERATING EXPENSES (d)(expenses that are deducted from fund assets)
% OF AVERAGE DAILY NET ASSETS Class of Shares
A B C M
- --------------------------------------------------------------------------------
Management fees 1.00% 1.00% 1.00% 1.00%
Distribution and service (12b-1) fees 0.35% 1.00% 1.00% 0.90%
Other expenses 0.89% 0.89% 0.89% 0.89%
-------------------------------
TOTAL ANNUAL FUND OPERATING EXPENSES 2.24% 2.89% 2.89% 2.79%
EXPENSE REDUCTION (c) 0.39% 0.39% 0.39% 0.39%
-------------------------------
NET OPERATING EXPENSES 1.85% 2.50% 2.50% 2.40%
- --------------------------------------------------------------------------------
(a) Certain purchases of Class A shares in amounts greater than $1 million are
subject to a 1% contingent deferred sales charge for 24 months after
purchase.
(b) Purchases of Class M shares are subject to a 1% contingent deferred sales
charge if redeemed within 18 months of purchase.
(c) Contractual arrangement with Idex Management, Inc. through 11/1/2000.
(d) Annual fund operating expenses are estimated based on the fund's expenses
for the fiscal year ended 10/31/98.
A $10 fee will be charged twice a year for an account opened for more than 2
years with a balance below the share class minimum because of redemptions.
================================================================================
EXAMPLE
This example is here to help you compare the cost of investing in this fund with
that of other mutual funds. It shows the cumulative expenses you'd pay if you
invested $10,000 and held your shares for various time periods, with a 5% annual
return and fund operating expenses remaining the same. This return is for
illustration purposes and is not guaranteed. Actual costs may be higher or
lower.
Share Class 1 year 3 years 5 years 10 years
- --------------------------------------------------------------------------------
A $728 $1,176 $1,650 $2,955
B* $753 $1,158 $1,589 $3,029
C $253 $ 858 $1,489 $3,186
M $440 $ 920 $1,525 $3,160
- --------------------------------------------------------------------------------
If the shares are not redeemed:
Share Class 1 year 3 years 5 years 10 years
- --------------------------------------------------------------------------------
A $728 $1,176 $1,650 $2,955
B* $253 $ 858 $1,489 $3,029
C $253 $ 858 $1,489 $3,186
M $341 $ 920 $1,525 $3,160
*EXAMPLES FOR CLASS B SHARES ASSUME THEY WILL CONVERT TO CLASS A SHARES EIGHT
YEARS AFTER YOU PURCHASE THEM.
9
<PAGE>
IDEX JCC FLEXIBLE INCOME (FORMERLY FLEXIBLE INCOME PORTFOLIO)
SUMMARY OF RISKS AND RETURNS
/target/ OBJECTIVE
The objective of IDEX JCC Flexible Income is maximum total return for
shareholders, consistent with preservation of capital, by actively managing a
portfolio of income-producing securities.
This fund may be appropriate for investors who want current income enhanced by
the potential for capital growth, and who are willing to tolerate fluctuation in
principal value caused by changes in interest rates as well as the risks
associated with substantial investments in high-yield/high-risk bonds (commonly
known as "junk bonds"), or unrated bonds of domestic or foreign issuers.
/chess piece/ PRINCIPAL STRATEGIES AND POLICIES
The fund normally invests at least 80% of its total assets in income-producing
securities of both foreign and domestic companies. The fund's sub-adviser, Janus
Capital Corporation (JCC), seeks to achieve the fund's objective by investing
principally in:
[ ] corporate debt securities
The fund seeks maximum current income by investing principally in corporate
bonds that offer higher yields, but more risk than higher rated bonds.
While the fund may buy bonds of any maturity, the fund's average maturity may
vary substantially, depending upon JCC's analysis of market, economic and
financial conditions at the time. To increase the potential of higher returns,
the fund has no pre-established standards for the quality of the debt
instruments it buys.
The fund may buy unrated debt securities of both domestic and foreign issuers,
and may at times have substantial holdings of such high-yield/high-risk bonds.
Please see Appendix A for a description of ratings.
- --------------------------------------------------------------------------------
WHAT IS A "BOTTOM UP" ANALYSIS?
When a sub-adviser uses a "bottom up" approach, it looks primarily at individual
companies against the context of broader market factors. It seeks to identify
individual companies with earnings growth potential that may not be recognized
by the market at large.
- --------------------------------------------------------------------------------
In addition to considering economic factors such as the affect of interest rates
on the fund's investments, JCC applies a "bottom up" approach in choosing
investments. If JCC is unable to find such investments, a fund's assets may be
in cash or other similar investments.
In determining the creditworthiness of bond issuers, JCC uses, but doesn't rely
solely on, credit ratings.
JCC seeks to diversify the fund's investments across many securities, sectors
and countries. Currency risk is generally avoided through hedging and other
means.
JCC may sell the fund's securities when its expectations regarding market
interest rates change or the quality or return changes on investment.
While the fund invests principally in corporate debt securities, JCC may also
invest in lower-rated securities, including bonds considered less than
investment grade of both foreign and domestic issuers, mortgage- and other
asset-backed securities, convertible securities, preferred stock,
income-producing common stock, futures for hedging, or other securities and
investment strategies in pursuit of its investment objective, which are
explained beginning on page 38 and in the SAI.
/warning sign/ PRINCIPAL RISKS
The fund is subject to the following principal investment risks:
[ ] FIXED-INCOME SECURITIES
The value of these securities may change daily based on changes in interest
rates, and other market conditions and factors. Risks include:
[ ] changes in interest rates
[ ] length of time to maturity
[ ] issuers defaulting on their obligations to pay interest or return
principal
[ ] STOCKS
While stocks have historically outperformed other investments over the long
term, they tend to go up and down more dramatically over the shorter term. These
price movements may result from factors affecting individual companies,
industries, or the securities market as a whole.
Because the stocks the fund holds fluctuate in price, the value of your
investment in the fund will go up and down.
[ ] High-Yield/High Risk Securities
[ ] Credit Risk
[ ] Greater sensitivity to interest rate movements
[ ] Greater vulnerability to economic changes
[ ] Decline in market value in event of default
[ ] Less liquidity
YOU MAY LOSE MONEY IF YOU INVEST IN THIS FUND.
These and other risks are fully described in the section entitled "Explanation
of Strategies and Risks," beginning on page 38.
10
<PAGE>
/graph/ PAST PERFORMANCE
The bar chart and the table below show the fund's annual returns and its
long-term performance. The bar chart and the table indicate the risks of
investing in the fund by showing you how the fund's performance has varied from
year to year. The bar chart does not reflect the impact of sales charges, which
lower the fund's return. The table compares how the fund's average annual
returns for different calendar periods compare to the returns of the Lehman
Brothers Government/Corporate Bond Index (LBGCB), a widely recognized unmanaged
index of market performance. The bar chart and table assume reinvestment of
dividends and capital gains distributions. As with all mutual funds, past
performance is not a prediction of future results.
- --------------------------------------------------------------------------------
Year-by-year total return as of 12/31 each year (%) (1)
CLASS A SHARES
--------------
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
3.67% (5.11)% 25.01% 11.00% 13.90% (4.29)% 18.89% 5.44% 11.57%
(1) AS OF SEPTEMBER 30, 1999, THE END OF THE MOST RECENT CALENDAR QUARTER, THE
FUND'S YEAR-TO-DATE RETURN FOR CLASS A SHARES WAS (0.87)%.
- --------------------------------------------------------------------------------
Class A Shares: QUARTER ENDED RETURN
------------- ------
Best Quarter: 3/31/91 7.92%
Worst Quarter: 3/31/90 (8.59)%
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS AS OF 12/31/98
SINCE
ONE YEAR 5 YEARS 10 YEARS INCEPTION
- --------------------------------------------------------------------------------
A Shares 2.76% 6.59% 7.90% 8.06%
B Shares 2.18% N/A N/A 7.99%
M Shares* 5.21% 6.82% N/A 6.68%
LBGCB** 9.49% 7.31% 9.34% 9.02%
- --------------------------------------------------------------------------------
*ALL SHARES DESIGNATED AS CLASS C SHARES PRIOR TO MARCH 1, 1999 WERE RENAMED AS
CLASS M SHARES ON THAT DATE. EFFECTIVE NOVEMBER 1, 1999 THE FUND BEGAN OFFERING
A NEW CLASS C SHARE THAT HAS DIFFERENT FEES AND EXPENSES THAN THE PREVIOUS CLASS
C SHARE.
**SINCE INCEPTION OF CLASS A SHARES (6/29/87). SINCE INCEPTION OF CLASS B SHARES
(10/01/95) IS 8.26% AND CLASS M SHARES (10/01/93) IS 6.89%.
/dollar sign/ FEES AND EXPENSES
The following table describes the fees and expenses that you may pay if you buy
and hold shares of the fund.
================================================================================
SHAREHOLDER FEES (fees paid directly from your investment)
Class of Shares
A B C M
- --------------------------------------------------------------------------------
Maximum sales charge (load)
imposed on purchases
(AS A % OF OFFERING PRICE) 4.75% None None 1.00%
Maximum deferred sales charge (load) None(a) 5.00% None 1.00%(b)
(AS A PERCENTAGE OF PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LOWER)
================================================================================
ANNUAL FUND OPERATING EXPENSES (d) (expenses that are deducted from fund assets)
% OF AVERAGE DAILY NET ASSETS Class of Shares
A B C M
- --------------------------------------------------------------------------------
Management fees 0.90% 0.90% 0.90% 0.90%
Distribution and service 0.35% 1.00% 1.00% 0.90%
(12b-1) fees
Other expenses 0.73% 0.73% 0.73% 0.73%
-------------------------------
TOTAL ANNUAL FUND OPERATING EXPENSES 1.98% 2.63% 2.63% 2.53%
EXPENSE REDUCTION (c) 0.13% 0.13% 0.13% 0.13%
-------------------------------
NET OPERATING EXPENSES 1.85% 2.50% 2.50% 2.40%
- --------------------------------------------------------------------------------
(a) Certain purchases of Class A shares in amounts greater than $1 million are
subject to a 1% contingent deferred sales charge for 24 months after
purchase.
(b) Purchases of Class M shares are subject to a 1% contingent deferred sales
charge if redeemed within 18 months of purchase.
(c) Contractual arrangement with Idex Management, Inc., through 11/1/2000.
(d) Annual fund operating expenses are estimated based on the fund's expenses
for the fiscal year ended 10/31/98.
A $10 fee will be charged twice a year for an account opened for more than 2
years with a balance below the share class minimum because of redemptions.
================================================================================
EXAMPLE
This example is here to help you compare the cost of investing in this fund with
that of other mutual funds. It shows the cumulative expenses you'd pay if you
invested $10,000 and held your shares for various time periods, with a 5% annual
return and fund operating expenses remaining the same. This return is for
illustration purposes and is not guaranteed. Actual costs may be higher or
lower.
If the shares are redeemed at the end of each period:
Share Class 1 year 3 years 5 years 10 years
- --------------------------------------------------------------------------------
A $654 $1,055 $1,480 $2,662
B* $753 $1,105 $1,484 $2,793
C $253 $ 805 $1,384 $2,954
M $440 $ 867 $1,421 $2,927
- --------------------------------------------------------------------------------
If the shares are not redeemed:
Share Class 1 year 3 years 5 years 10 years
- --------------------------------------------------------------------------------
A $654 $1,055 $1,480 $2,662
B* $253 $ 805 $1,384 $2,793
C $253 $ 805 $1,384 $2,954
M $341 $ 867 $1,421 $2,927
- --------------------------------------------------------------------------------
*EXAMPLES FOR CLASS B SHARES ASSUME THEY WILL CONVERT TO CLASS A SHARES EIGHT
YEARS AFTER YOU PURCHASE THEM.
11
<PAGE>
IDEX T. ROWE PRICE DIVIDEND GROWTH
SUMMARY OF RISKS AND RETURNS
/target/ OBJECTIVE
The investment objective of IDEX T. Rowe Price Dividend Growth is to provide an
increasing level of dividend income, long-term capital appreciation, and
reasonable current income through investments primarily in dividend-paying
stocks.
This fund may be appropriate for investors who want a reasonable level of
current income from equity investments that have the potential to rise faster
than inflation, and who can tolerate significant fluctuations in the value of
their investments.
/chess piece/ PRINCIPAL STRATEGIES AND POLICIES
The fund's sub-adviser, T. Rowe Price Associates, Inc. (T. Rowe Price), seeks to
achieve this objective by investing principally in:
[ ] dividend-paying common stocks with favorable prospects for increasing
dividends and long-term appreciation
T. Rowe Price typically invests at least 65% of total assets in common stocks of
dividend-paying companies when it expects these companies to increase their
dividends over time and also provide long-term appreciation.
T. Rowe Price believes that a track record of dividend increases is an excellent
indicator of financial health and growth prospects, and over the long-term,
income can contribute significantly to total return. Dividends can also help
reduce the fund's volatility during periods of market turbulence and help offset
losses when stock prices are falling.
T. Rowe Price looks for stocks with sustainable, above-average growth in
earnings and dividends, and attempts to buy them when they are temporarily out
of favor or undervalued by the market. In selecting investments, T. Rowe Price
favors companies with one or more of the following:
[ ] either a track record of, or the potential for, above-average earnings and
dividend growth
[ ] a competitive current dividend yield
[ ] a sound balance sheet and solid cash flow to support future dividend
increases
[ ] a sustainable competitive advantage and leading market position
[ ] attractive valuations such as a relatively high dividend yield
The fund may sell securities for a variety of reasons such as to secure gains,
limit losses or redeploy assets into more promising opportunities.
While the fund invests principally in common stocks, T. Rowe Price may also
purchase other securities such as foreign securities, convertible securities,
warrants, preferred stocks, and corporate and government debt in pursuit of the
fund's objective. Futures and options may be used for any number of reasons,
including: to manage the fund's exposure to securities prices and foreign
currencies; to enhance income; to manage cash flows efficiently; or to protect
the value of portfolio securities. These are explained beginning on page 38 and
in the SAI.
/warning sign/ PRINCIPAL RISKS
The fund is subject to the following principal investment risks:
[ ] STOCKS
While stocks have historically outperformed other investments over the long
term, they tend to go up and down more dramatically over the shorter term. These
price movements may result from factors affecting individual companies,
industries or the securities market as a whole.
Because the stocks the fund may hold fluctuate in price, the value of your
investment in the fund will go up and down.
YOU MAY LOSE MONEY IF YOU INVEST IN THIS FUND.
These and other risks are fully described in the section entitled "Explanation
of Strategies and Risks," beginning on page 38.
12
<PAGE>
/graph/ PAST PERFORMANCE
Because the fund commenced operations in 1999, it has no historical performance
information to present to you. Performance history will be available for the
fund after it has been in operation for one calendar year.
- --------------------------------------------------------------------------------
/dollar sign/ FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund.
================================================================================
SHAREHOLDER FEES (fees paid directly from your investment)
Class of Shares
A B C M
- --------------------------------------------------------------------------------
Maximum sales charge (load)
imposed on purchases
(AS A % OF OFFERING PRICE) 5.50% None None 1.00%
Maximum deferred sales charge (load) None(a) 5.00% None 1.00%(b)
(AS A PERCENTAGE OF PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LOWER)
================================================================================
ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from fund assets)
% OF AVERAGE DAILY NET ASSETS Class of Shares
A B C M
- --------------------------------------------------------------------------------
Management fees 0.80% 0.80% 0.80% 0.80%
Distribution and service (12b-1) fees 0.35% 1.00% 1.00% 0.90%
Other expenses (c) 2.70% 2.70% 2.70% 2.70%
-------------------------------
TOTAL ANNUAL FUND OPERATING EXPENSES 3.85% 4.50% 4.50% 4.40%
EXPENSE REDUCTION (d) 2.30% 2.30% 2.30% 2.30%
-------------------------------
NET OPERATING EXPENSES 1.55% 2.20% 2.20% 2.10%
- --------------------------------------------------------------------------------
(a) Certain purchases of Class A shares in amounts greater than $1 million are
subject to a 1% contingent deferred sales charge for 24 months after
purchase.
(b) Purchases of Class M shares are subject to a 1% contingent deferred sales
charge if redeemed within 18 months of purchase.
(c) Because the fund commenced operations in 1999, the "Other expenses" are
estimates.
(d) Contractual arrangement with Idex Management, Inc. through 11/1/2000.
A $10 fee will be charged twice a year for an account opened more than 2 years
with a balance below the share class minimum because of redemptions.
================================================================================
EXAMPLE
This example is here to help you compare the cost of investing in this fund with
that of other mutual funds. It shows the cumulative expenses you'd pay if you
invested $10,000 and held your shares for various time periods, with a 5% annual
return and fund operating expenses remaining the same. This return is for
illustration purposes and is not guaranteed. Actual costs may be higher or
lower.
If the shares are redeemed at the end of each period:
Share Class 1 year 3 years
- --------------------------------------------------------------------------------
A $699 $1,460
B $723 $1,453
C $223 $1,153
M $410 $1,213
- --------------------------------------------------------------------------------
If the shares are not redeemed:
Share Class 1 year 3 years
- --------------------------------------------------------------------------------
A $699 $1,460
B $223 $1,153
C $223 $1,153
M $311 $1,213
- --------------------------------------------------------------------------------
13
<PAGE>
IDEX T. ROWE PRICE SMALL CAP
SUMMARY OF RISKS AND RETURNS
/target/ OBJECTIVE
THE INVESTMENT OBJECTIVE OF IDEX T. ROWE PRICE SMALL CAP IS TO SEEK LONG-TERM
GROWTH OF CAPITAL BY INVESTING PRIMARILY IN COMMON STOCKS OF SMALL GROWTH
COMPANIES.
This fund may be appropriate for investors who want an aggressive, long-term
approach to building capital and who can tolerate significant fluctuations
inherent in small-cap stock investing.
/chess piece/ PRINCIPAL STRATEGIES AND POLICIES
The fund's sub-adviser, T. Rowe Price Associates, Inc. (T. Rowe Price), seeks to
achieve the fund's objective by investing fund assets principally in:
[ ] common stocks of small-cap growth companies
This fund will invest at least 65% of its total assets in small-cap growth
companies. These companies are defined as companies whose market capitalization
is smaller than 80% of those in the Standard & Poor's 500 Stock Index (S&P 500)
which was approximately $2.8 billion as of December 31, 1998, but the upper size
limit will vary with market fluctuations. The S&P 500 measures the performance
of the common stocks of 500 large U.S. companies in the manufacturing,
utilities, transportation, and financial industries. (A company's market "cap"
is found by multiplying its shares outstanding by its stock price.) Companies
whose capitalization increases above this range after the fund's initial
purchase continue to be considered small companies for purposes of this policy.
To help manage cash flows efficiently, T. Rowe Price may also buy and sell stock
index futures. The fund intends to be invested in a large number of holdings. T.
Rowe Price believes this diversification should minimize the effects of
individual security selection on fund performance.
T. Rowe Price uses a number of quantitative models that are designed to identify
key characteristics of small-cap growth stocks. Based on these models, stocks
are selected in a "top-down" manner so that the fund's portfolio as a whole
reflects characteristics T. Rowe Price considers important, such as valuations
(price/earnings or price/book value ratios, for example) and projected earnings
growth.
The fund may sell securities for a variety of reasons, such as to secure gains,
limit losses, or redeploy assets into more promising opportunities.
- --------------------------------------------------------------------------------
WHAT IS A QUANTITATIVE MODEL?
A quantitative model is fashioned by a fund's sub-adviser to assist the
sub-adviser in evaluating a potential security. The sub-adviser creates a model
that is designed using characteristics that the sub-adviser deems advantageous
in a security. The sub-adviser then compares a potential security's
characteristics aganist those of the model, and makes a determination of whether
or not to purchase the security based on the results of that comparison.
- --------------------------------------------------------------------------------
The fund may take a temporary defensive position when the securities trading
markets or the economy are experiencing excessive volatility or a prolonged
general decline, or other adverse conditions exist. Under these circumstances,
the fund will be unable to achieve its investment objective.
- --------------------------------------------------------------------------------
What is a Top-Down Approach?
When using a "top-down" approach, the fund manager looks first at broad market
factors, and on the basis of those market factors, chooses certain sectors, or
industries within the overall market. The manager then looks at individual
companies within those sectors or industries.
- --------------------------------------------------------------------------------
While the fund invests principally in small-cap common stocks, T. Rowe Price may
also invest in stock index futures, or other securities and investment
strategies in pursuit of its investment objective, which are explained beginning
on page 38 and in the SAI.
/warning sign/ PRINCIPAL RISKS
The fund is subject to the following principal investment risks:
[ ] STOCKS
While stocks have historically outperformed other investments over the long
term, they tend to go up and down more dramatically over the shorter term. These
price movements may result from factors affecting individual companies,
industries or the securities market as a whole.
Because the stocks the fund holds fluctuate in price, the value of your
investment in the fund will go up and down.
[ ] SMALL-CAP COMPANIES
Investing in small companies involves greater risk than is customarily
associated with more established companies. Stocks of small companies may be
subject to more abrupt or erratic price movements than larger company
securities. Small companies often have limited product lines, markets, or
financial resources, and their management may lack depth and experience.
Also, growth stocks can experience steep price declines if the company's
earnings disappoint investors. Since the fund will typically be fully invested
in this market sector, investors are fully exposed to its volatility.
[ ] QUANTITATIVE MODELS
Stocks selected using quantitative models may not be effective and may cause
overall returns to be lower than if other methods are used.
YOU MAY LOSE MONEY IF YOU INVEST IN THIS FUND.
These and other risks are fully described in the section entitled "Explanation
of Strategies and Risks," beginning on page 38.
14
<PAGE>
/graph/ PAST PERFORMANCE
Because the fund commenced operations in 1999, it has no historical performance
information to present to you. Performance history will be available for the
fund after it has been in operation for one calendar year.
- --------------------------------------------------------------------------------
/dollar sign/ FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund.
================================================================================
SHAREHOLDER FEES (fees paid directly from your investment)
Class of Shares
A B C M
- --------------------------------------------------------------------------------
Maximum sales charge (load)
imposed on purchases
(AS A % OF OFFERING PRICE) 5.50% None None 1.00%
Maximum deferred sales charge (load) None(a) 5.00% None 1.00%(b)
(AS A PERCENTAGE OF PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LOWER)
================================================================================
ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from fund assets)
% OF AVERAGE DAILY NET ASSETS Class of Shares
(expenses that are deducted from fund assets) A B C M
- --------------------------------------------------------------------------------
Management fees 0.80% 0.80% 0.80% 0.80%
Distribution and service (12b-1) fees 0.35% 1.00% 1.00% 0.90%
Other expenses (c) 2.70% 2.70% 2.70% 2.70%
-------------------------------
TOTAL ANNUAL FUND OPERATING EXPENSES 3.85% 4.50% 4.50% 4.40%
EXPENSE REDUCTION (d) 2.30% 2.30% 2.30% 2.30%
-------------------------------
NET OPERATING EXPENSES 1.55% 2.20% 2.20% 2.10%
- --------------------------------------------------------------------------------
(a) Certain purchases of Class A shares in amounts greater than $1 million are
subject to a 1% contingent deferred sales charge for 24 months after
purchase.
(b) Purchases of Class M shares are subject to a 1% contingent deferred sales
charge if redeemed within 18 months of purchase.
(c) Because the fund commenced operations in 1999, the "Other expenses" are
estimates.
(d) Contractual arrangement with Idex Management, Inc. through 11/1/2000.
A $10 fee will be charged twice a year for an account opened for more than 2
years with a balance below the share class minimum because of redemptions.
================================================================================
EXAMPLE
This example is here to help you compare the cost of investing in this fund with
that of other mutual funds. It shows the cumulative expenses you'd pay if you
invested $10,000 and held your shares for various time periods, with a 5% annual
return and fund operating expenses remaining the same. This return is for
illustration purposes and is not guaranteed. Actual costs may be higher or
lower.
If the shares are redeemed at the end of each period:
Share Class 1 year 3 years
- --------------------------------------------------------------------------------
A $699 $1,460
B $723 $1,453
C $223 $1,153
M $410 $1,213
- --------------------------------------------------------------------------------
If the shares are not redeemed:
Share Class 1 year 3 years
- --------------------------------------------------------------------------------
A $699 $1,460
B $223 $1,153
C $223 $1,153
M $311 $1,213
- --------------------------------------------------------------------------------
15
<PAGE>
IDEX GOLDMAN SACHS GROWTH
SUMMARY OF RISKS AND RETURNS
/target/ OBJECTIVE
THE INVESTMENT OBJECTIVE OF IDEX GOLDMAN SACHS GROWTH IS TO SEEK LONG-TERM
GROWTH OF CAPITAL.
This fund may be appropriate for investors who seek long-term growth of capital
and who can tolerate fluctuations inherent in stock investing.
/chess piece/ PRINCIPAL STRATEGIES AND POLICIES
The fund's sub-adviser, Goldman Sachs Asset Management (GSAM), seeks to achieve
this objective by investing principally in:
[ ] stocks
This fund will invest at least 90% of total assets in a diversified portfolio of
common stocks that are considered by GSAM to have long-term capital appreciation
potential.
Stocks for this fund are selected based on their prospects for above average
growth. GSAM will select securities of growth companies trading, in GSAM's
opinion, at a reasonable price relative to other industries, competitors and
historical price/earnings multiples.
In order to determine whether a security has favorable growth prospects, GSAM
ordinarily looks for one or more of the following characteristics in relation to
the security's prevailing price:
[ ] prospects for above average sales and earnings growth per share
[ ] high return on invested capital
[ ] free cash flow generation
[ ] sound balance sheet, financial and accounting policies, and overall
financial strength
[ ] strong competitive advantages
[ ] effective research, product development, and marketing
[ ] pricing flexibility
[ ] strength of management
[ ] general operating characteristics that will enable the company to compete
successfully in its marketplace
The fund generally will invest in companies whose earnings are believed to be in
a relatively strong growth trend, or, to a lesser extent, in companies in which
significant further growth is not anticipated but whose market value per share
is thought to be undervalued.
GSAM may sell fund securities when its expectations regarding growth change.
GSAM may take a temporary defensive position when the securities trading markets
or the economy are experiencing excessive volatility or a prolonged general
decline, or other adverse conditions exist. Under these circumstances, the fund
will be unable to achieve its investment objective.
While the fund invests principally in stocks, GSAM may also invest up to 10% in
the aggregate in foreign equity securities (including securities of issuers in
emerging countries and securities quoted in foreign currencies), or other
securities and investment strategies in pursuit of its investment objective,
which are explained beginning on page 38 and in the SAI.
/warning sign/ PRINCIPAL RISKS
The fund is subject to the following principal investment risks:
[ ] STOCKS
While stocks have historically outperformed other investments over the long
term, they tend to go up and down more dramatically over the shorter term. These
price movements may result from factors affecting individual companies,
industries or the securities market as a whole.
Because the stocks the fund holds fluctuate in price, the value of your
investment in the fund will go up and down.
YOU MAY LOSE MONEY IF YOU INVEST IN THIS FUND.
These and other risks are fully described in the section entitled "Explanation
of Strategies and Risks," beginning on page 38.
16
<PAGE>
/graph/ PAST PERFORMANCE
Because the fund commenced operations in 1999, it has no historical performance
information to present to you. Performance history will be available for the
fund after it has been in operation for one calendar year.
- --------------------------------------------------------------------------------
/dollar sign/ FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund.
================================================================================
SHAREHOLDER FEES (fees paid directly from your investment)
Class of Shares
A B C M
- --------------------------------------------------------------------------------
Maximum sales charge (load)
imposed on purchases
(as a % of offering price) 5.50% None None 1.00%
Maximum deferred sales charge (load) None(a) 5.00% None 1.00%(b)
(AS A PERCENTAGE OF PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LOWER)
================================================================================
ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from fund assets)
% OF AVERAGE DAILY NET ASSETS Class of Shares
A B C M
- --------------------------------------------------------------------------------
Management fees 0.80% 0.80% 0.80% 0.80%
Distribution and service (12b-1) fees 0.35% 1.00% 1.00% 0.90%
Other expenses (c) 2.70% 2.70% 2.70% 2.70%
-------------------------------
TOTAL ANNUAL FUND OPERATING EXPENSES 3.85% 4.50% 4.50% 4.40%
EXPENSE REDUCTION (d) 2.30% 2.30% 2.30% 2.30%
-------------------------------
NET OPERATING EXPENSES 1.55% 2.20% 2.20% 2.10%
- --------------------------------------------------------------------------------
(a) Certain purchases of Class A shares in amounts greater than $1 million are
subject to a 1% contingent deferred sales charge for 24 months after
purchase.
(b) Purchases of Class M shares are subject to a 1% contingent deferred sales
charge if redeemed within 18 months of purchase.
(c) Because the fund commenced operations in 1999, the "Other expenses" are
estimates.
(d) Contractual arrangement with Idex Management, Inc. through 11/1/2000.
A $10 fee will be charged twice a year for an account opened for more than 2
years with a balance below the share class minimum because of redemptions.
================================================================================
EXAMPLE
This example is here to help you compare the cost of investing in this fund with
that of other mutual funds. It shows the cumulative expenses you'd pay if you
invested $10,000 and held your shares for various time periods, with a 5% annual
return and fund operating expenses remaining the same. This return is for
illustration purposes and is not guaranteed. Actual costs may be higher or
lower.
If the shares are redeemed at the end of each period:
Share Class 1 year 3 years
- --------------------------------------------------------------------------------
A $699 $1,460
B $723 $1,453
C $223 $1,153
M $410 $1,213
- --------------------------------------------------------------------------------
If the shares are not redeemed:
Share Class 1 year 3 years
- --------------------------------------------------------------------------------
A $699 $1,460
B $223 $1,153
C $223 $1,153
M $311 $1,213
- --------------------------------------------------------------------------------
17
<PAGE>
IDEX SALOMON ALL CAP
SUMMARY OF RISKS AND RETURNS
/target/ OBJECTIVE
The investment objective of IDEX Salomon All Cap is to seek capital
appreciation.
This fund may be appropriate for investors who want long-term growth of capital
and who can tolerate fluctuations in their investments.
/chess piece/ PRINCIPAL STRATEGIES AND POLICIES
The fund's sub-adviser, Salomon Brothers Asset Management Inc (SBAM), seeks to
achieve this objective by investing fund assets principally in:
[ ] common stocks
In seeking capital appreciation, the fund may purchase securities of: seasoned
issuers; small companies; newer companies; and new issues.
SBAM anticipates that the fund's investments generally will be in securities of
companies which it considers to reflect the following characteristics:
[ ] undervalued share prices
[ ] special situations such as existing or possible changes in management or
management policies, corporate structure or control, capitalization,
regulatory environment, or other circumstances which could be expected to
favor earnings or market price of such company's shares
[ ] growth potential due to technological advances, new methods in marketing or
production, new or unique products or services, changes in demands for
products or services or other significant new developments
SBAM uses a "bottom up" fundamental research process to select the fund's
securities.
SBAM may sell the fund's securities when stocks become overvalued and its
expectations regarding earnings growth change.
SBAM may take a temporary defensive position when the securities trading markets
or the economy are experiencing excessive volatility or a prolonged general
decline, or other adverse conditions exist. Under these circumstances, the fund
will be unable to pursue its investment objective.
While the fund invests principally in common stocks, SBAM may also invest in
cash equivalents, convertible securities or other securities and investment
strategies in pursuit of its investment objective, which are explained beginning
on page 38 and in the SAI.
- --------------------------------------------------------------------------------
WHAT IS A "BOTTOM UP" ANALYSIS?
When a sub-adviser uses a "bottom up" approach, it looks primarily at individual
companies against the context of broader market factors. It seeks to identify
individual companies with earnings growth potential that may not be recognized
by the market at large.
- --------------------------------------------------------------------------------
/warning sign/ PRINCIPAL RISKS
The fund is subject to the following principal investment risks:
[ ] STOCKS
While stocks have historically outperformed other investments over the long
term, they tend to go up and down more dramatically over the shorter term. These
price movements may result from factors affecting individual companies,
industries or the securities market as a whole.
Because the fund's holdings may fluctuate in price, the value of your investment
in the fund will go up and down.
[ ] SMALL SIZED OR NEW COMPANIES
These companies present additional risks because their earnings are less
predictable, their share price more volatile, and their securities less liquid
than larger or more established companies.
This fund is non-diversified.
You may lose money if you invest in this fund.
These and other risks are fully described in the section entitled "Explanation
of Strategies and Risks," beginning on page 38.
- --------------------------------------------------------------------------------
WHAT IS A NON-DIVERSIFIED FUND?
A "non-diversified" fund has the ability to take larger positions in a smaller
number of issuers. To the extent a fund invests a greater portion of its assets
in the securities of a smaller number of issuers, it may be more susceptible to
any single economic, political or regulatory occurrence than a diversified fund
and may be subject to greater loss with respect to its portfolio securities.
However, to meet federal tax requirements, at the close of each quarter the fund
may not have more than 25% of its total assets invested in any one issuer, and,
with respect to 50% of its total assets, not more than 5% of its total assets
invested in any one issuer.
- --------------------------------------------------------------------------------
18
<PAGE>
/graph/ PAST PERFORMANCE
Because the fund commenced operations in 1999, it has no historical performance
information to present to you. Performance history will be available for the
fund after it has been in operation for one calendar year.
- --------------------------------------------------------------------------------
/dollar sign/ FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund.
================================================================================
SHAREHOLDER FEES (fees paid directly from your investment)
Class of Shares
A B C M
- --------------------------------------------------------------------------------
Maximum sales charge (load)
imposed on purchases
(AS A % OF OFFERING PRICE) 5.50% None None 1.00%
Maximum deferred sales charge (load) None(a) 5.00% None 1.00%(b)
(AS A PERCENTAGE OF PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LOWER)
================================================================================
ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from fund assets)
% OF AVERAGE DAILY NET ASSETS Class of Shares
A B C M
- --------------------------------------------------------------------------------
Management fees 0.80% 0.80% 0.80% 0.80%
Distribution and service (12b-1) fees 0.35% 1.00% 1.00% 0.90%
Other expenses (c) 2.70% 2.70% 2.70% 2.70%
-------------------------------
TOTAL ANNUAL FUND OPERATING EXPENSE 3.85% 4.50% 4.50% 4.40%
EXPENSE REDUCTION (d) 2.30% 2.30% 2.30% 2.30%
-------------------------------
NET OPERATING EXPENSES 1.55% 2.20% 2.20% 2.10%
- --------------------------------------------------------------------------------
(a) Certain purchases of Class A shares in amounts greater than $1 million are
subject to a 1% contingent deferred sales charge for 24 months after
purchase.
(b) Purchases of Class M shares are subject to a 1% contingent deferred sales
charge if redeemed within 18 months of purchase.
(c) Because the fund commenced operations in 1999, the "Other expenses" are
estimates.
(d) Contractual arrangement with Idex Management, Inc. through 11/1/2000.
A $10 fee will be charged twice a year for an account opened for more than 2
years with a balance below the share class minimum because of redemptions.
================================================================================
EXAMPLE
This example is here to help you compare the cost of investing in this fund with
that of other mutual funds. It shows the cumulative expenses you'd pay if you
invested $10,000 and held your shares for various time periods, with a 5% annual
return and fund operating expenses remaining the same. This return is for
illustration purposes and is not guaranteed. Actual costs may be higher or
lower.
If the shares are redeemed at the end of each period:
Share Class 1 year 3 years
- --------------------------------------------------------------------------------
A $699 $1,460
B $723 $1,453
C $223 $1,153
M $410 $1,213
- --------------------------------------------------------------------------------
If the shares are not redeemed:
Share Class 1 year 3 years
- --------------------------------------------------------------------------------
A $699 $1,460
B $223 $1,153
C $223 $1,153
M $311 $1,213
19
<PAGE>
IDEX ALGER AGGRESSIVE GROWTH (FORMERLY AGGRESSIVE GROWTH PORTFOLIO)
SUMMARY OF RISKS AND RETURNS
/target/ OBJECTIVE
The objective of IDEX Alger Aggressive Growth is long-term capital appreciation.
This fund may be appropriate for investors who seek capital growth aggressively,
and who can tolerate wide swings in the value of their investment.
/chess piece/ PRINCIPAL STRATEGIES AND POLICIES
The fund's sub-adviser, Fred Alger Management, Inc. (Alger), seeks to achieve
the fund's objective by investing fund assets principally in:
[ ] equity securities such as common or preferred stocks
[ ] convertible securities (convertible securities can be exchanged for or
converted into common stock of such companies)
Under normal market conditions, the fund invests at least 85% of its assets in
common stocks, which may include stocks of developing companies, of older
companies that are entering a new stage of growth, and of companies whose
products or services have a high unit volume growth rate. Alger may also invest
in rights, warrants, options and futures.
When selecting stocks for the fund, Alger considers the following factors:
[ ] insiders' activity
[ ] market style leadership
[ ] institutional activity
[ ] relative strength price change
[ ] price-to-declining U.S. dollar
[ ] earnings to projected change
[ ] quarterly earnings per-share growth rate
Alger selects convertible securities for the fund that can be converted, or
exchanged, for stock of the issuer. Convertible securities are often rated below
investment grade, or not rated because they fall below debt obligations and just
above common stock in order of preference or priority on the issuer's balance
sheet. Alger does not limit convertible securities by rating and there is no
minimal acceptance rating for a convertible security to be purchased or held by
the fund.
The fund may also use leveraging, a technique that involves borrowing money to
invest in an effort to enhance shareholder returns.
Alger may take a temporary defensive position when the securities trading
markets or the economy are experiencing excessive volatility or a prolonged
general decline, or other adverse conditions exist. During this time, the fund
may invest up to 100% of its assets in money market instruments and cash
equivalents. Under these circumstances, the fund will be unable to pursue its
investment objective.
Alger may sell fund securities when its expectations regarding growth change.
While the fund invests principally in equity and convertible securities, Alger
may also invest in American Depository Receipts (ADRs), money market
instruments, repurchase agreements, or other securities and investment
strategies in pursuit of its investment objective, which are explained beginning
on page 38 and in the SAI.
/danger sign/ PRINCIPAL RISKS
The fund is subject to the following principal investment risks:
[ ] STOCKS
While stocks have historically outperformed other investments over the long
term, they tend to go up and down more dramatically over the shorter term. These
price movements may result from factors affecting individual companies,
industries or the securities market as a whole.
Because the stocks the fund holds fluctuate in price, the value of your
investment in the fund will go up and down.
[ ] INVESTING AGGRESSIVELY
[ ] The value of developing-company stocks may be very volatile, and can
drop significantly in a short period of time.
[ ] Rights, options and futures contracts may not be exercised and may
expire worthless.
[ ] Warrants and rights may be less liquid than stocks.
[ ] Leveraging practices may make the fund more volatile:
[ ] leveraging may exaggerate the effect on net asset value of any
increase or decrease in the market value of the fund's securities
[ ] money borrowed for leveraging is subject to interest costs
[ ] minimum average balances may need to be maintained or a line of
credit with connection to borrowing may be necessary resulting in an
increased cost of borrowing
[ ] CONVERTIBLE SECURITIES
Convertible securities may include corporate notes or preferred stock, but
ordinarily are a long-term debt obligation of the issuer convertible at a stated
exchange rate into common stock of the issuer. As with all debt securities, the
market value of convertible securities tends to decline as interest rates
increase and, conversely, to increase as interest rate decline. Convertible
securities generally offer lower interest or dividend yields than
non-convertible securities of similar quality.
YOU MAY LOSE MONEY IF YOU INVEST IN THIS FUND.
These and other risks are fully described in the section entitled "Explanation
of Strategies and Risks," beginning on page 38.
20
<PAGE>
/graph/ PAST PERFORMANCE
The bar chart and the table below show the fund's annual returns and its
long-term performance. The bar chart and table indicate the risks of investing
in the fund by showing you how the fund's performance has varied from year to
year. The bar chart does not reflect the impact of sales charges, which lower
the fund's return. The table compares how the fund's average annual returns for
different calendar periods compare to the returns of the S&P 500 Composite Stock
Price Index (S&P 500), a widely recognized unmanaged index of stock performance.
The bar chart and table assume reinvestment of dividends and capital gains
distributions. As with all mutual funds, past performance is not a prediction of
future results.
- --------------------------------------------------------------------------------
Year-by-year total return as of 12/31 each year (%) (1)
CLASS A SHARES
--------------
1995 1996 1997 1998
---- ---- ---- ----
56.00% 5.99% 23.27% 48.92%
(1) AS OF SEPTEMBER 30, 1999, THE END OF THE MOST RECENT CALENDAR QUARTER, THE
FUND'S YEAR-TO-DATE RETURN FOR CLASS A SHARES WAS 17.97%.
- --------------------------------------------------------------------------------
Class A Shares: QUARTER ENDED RETURN
------------- ------
Best Quarter: 12/31/98 28.99%
Worst Quarter: 9/30/98 (9.47)%
- --------------------------------------------------------------------------------
Average annual total returns as of 12/31/98
SINCE
ONE YEAR INCEPTION
- --------------------------------------------------------------------------------
A Shares 40.73% 30.55%
- --------------------------------------------------------------------------------
B Shares 43.50% 18.57%
- --------------------------------------------------------------------------------
M Shares* 46.08% 31.70%
- --------------------------------------------------------------------------------
S&P 500** 28.58% 30.20%
- --------------------------------------------------------------------------------
*ALL SHARES DESIGNATED AS CLASS C SHARES PRIOR TO MARCH 1, 1999 WERE RENAMED AS
CLASS M SHARES ON THAT DATE. EFFECTIVE NOVEMBER 1, 1999, THE FUND BEGAN OFFERING
A NEW CLASS C SHARE THAT HAS DIFFERENT FEES AND EXPENSES THAN THE PREVIOUS CLASS
C SHARE.
**SINCE INCEPTION OF CLASS A SHARES AND CLASS M SHARES (12/02/94). SINCE
INCEPTION OF CLASS B SHARES (10/01/95) IS 28.04%.
/dollar sign/ FEES AND EXPENSES
The following table describes the fees and expenses that you may pay if you buy
and hold shares of the fund.
================================================================================
SHAREHOLDER FEES (fees paid directly from your investment)
Class of Shares
A B C M
- --------------------------------------------------------------------------------
Maximum sales charge (load)
imposed on purchases
(AS A % OF OFFERING PRICE) 5.50% None None 1.00%
Maximum deferred sales charge (load) None(a) 5.00% None 1.00%(b)
(AS A PERCENTAGE OF PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LOWER)
================================================================================
ANNUAL FUND OPERATING EXPENSES (d) (expenses that are deducted from fund assets)
% OF AVERAGE DAILY NET ASSETS Class of Shares
A B C M
- --------------------------------------------------------------------------------
Management fees (e) 0.80% 0.80% 0.80% 0.80%
Distribution and service (12b-1) fees 0.35% 1.00% 1.00% 0.90%
Other expenses 0.83% 0.83% 0.83% 0.83%
-------------------------------
TOTAL ANNUAL FUND OPERATING EXPENSES 1.98% 2.63% 2.63% 2.53%
EXPENSE REDUCTION (c) 0.43% 0.43% 0.43% 0.43%
-------------------------------
NET OPERATING EXPENSES 1.55% 2.20% 2.20% 2.10%
- --------------------------------------------------------------------------------
(a) Certain purchases of Class A shares in amounts greater than $1 million are
subject to a 1% contingent deferred sales charge for 24 months after
purchase.
(b) Purchases of Class M shares are subject to a 1% contingent deferred sales
charge if redeemed within 18 months of purchase.
(c) Contractual arrangement with Idex Management, Inc. through 11/1/2000.
(d) Annual fund operating expenses are estimated based on the fund's expenses
for the fiscal year ended 10/31/98.
(e) Effective March 1, 1999, management fees were reduced from 1.00% to 0.80%.
A $10 fee will be charged twice a year for an account opened for more than 2
years with a balance below the share class minimum because of redemptions.
================================================================================
EXAMPLE
This example is here to help you compare the cost of investing in this fund with
that of other mutual funds. It shows the cumulative expenses you'd pay if you
invested $10,000 and held your shares for various time periods, with a 5% annual
return and fund operating expenses remaining the same. This return is for
illustration purposes and is not guaranteed. Actual costs may be higher or
lower.
If the shares are redeemed at the end of each period:
Share Class 1 year 3 years 5 years 10 years
- --------------------------------------------------------------------------------
A $699 $1,098 $1,521 $2,697
B* $723 $1,077 $1,457 $2,771
C $223 $ 777 $1,357 $2,932
M $410 $ 839 $1,394 $2,905
If the shares are not redeemed:
Share Class 1 year 3 years 5 years 10 years
- --------------------------------------------------------------------------------
A $699 $1,098 $1,521 $2,697
B* $223 $ 777 $1,357 $2,771
C $223 $ 777 $1,357 $2,932
M $311 $ 839 $1,394 $2,905
- --------------------------------------------------------------------------------
*EXAMPLES FOR CLASS B SHARES ASSUME THEY WILL CONVERT TO CLASS A SHARES EIGHT
YEARS AFTER YOU PURCHASE THEM.
21
<PAGE>
IDEX PILGRIM BAXTER MID CAP GROWTH
SUMMARY OF RISKS AND RETURNS
/target/ OBJECTIVE
The investment objective of IDEX Pilgrim Baxter Mid Cap Growth is to seek
capital appreciation.
This fund may be appropriate for investors who want long-term growth of capital
and who can tolerate fluctuations inherent in stock investing.
/chess piece/ PRINCIPAL STRATEGIES AND POLICIES
The fund's sub-adviser, Pilgrim Baxter & Associates, Ltd. (Pilgrim Baxter),
seeks to achieve the fund's objective by investing fund assets principally in:
[ ] common stocks of medium capitalization companies
In seeking capital appreciation, Pilgrim Baxter normally invests at least 65% of
the fund's total assets in common stocks, issued by companies with market
capitalizations or average revenues between $500 million and $10 billion. The
fund invests primarily in companies that Pilgrim Baxter believes have strong
earnings growth and capital appreciation potential.
Purchase ideas may be suggested by Pilgrim Baxter's quantitative models or
analysts, but the fund's manager initiates all final decisions to purchase a
security only after extensive fundamental research. In all cases, the motivation
for the purchase concept is the same: to identify as early as possible stocks
with strong and improving trends in growth and profitability.
Pilgrim Baxter's primary sell discipline is to sell stocks that fail to maintain
fundamental momentum, as defined either by quantitative or subjective criteria.
A secondary discipline is to reduce or eliminate positions in stocks where
valuation exceeds levels that even strong momentum can sustain.
Pilgrim Baxter may take a temporary defensive position when the securities
trading markets or the economy are experiencing excessive volatility or a
prolonged general decline, or other adverse conditions exist. Under these
circumstances, the fund will be unable to achieve its investment objective.
While the fund invests principally in common stocks of medium-sized companies,
Pilgrim Baxter may elect to invest in foreign securities, warrants and rights,
or other securities and investment strategies in pursuit of its investment
objective, which are explained beginning on page 38 and in the SAI.
- --------------------------------------------------------------------------------
WHAT IS A QUANTITATIVE MODEL?
A quantitative model is fashioned by a fund's sub-adviser to assist the
sub-adviser in evaluating a potential security. The sub-adviser creates a model
that is designed using characteristics that the sub-adviser deems advantageous
in a security. The sub-adviser then compares a potential security's
characteristics aganist those of the model, and makes a determination of whether
or not to purchase the security based on the results of that comparison.
- --------------------------------------------------------------------------------
/warning sign/ PRINCIPAL RISKS
The fund is subject to the following principal investment risks:
[ ] STOCKS
While stocks have historically outperformed other investments over the long
term, they tend to go up and down more dramatically over the shorter term. These
price movements may result from factors affecting individual companies,
industries or the securities market as a whole.
Because the stocks the fund may hold fluctuate in price, the value of your
investment in the fund will go up and down.
[ ] MEDIUM-SIZED COMPANIES
These companies present additional risks because their earnings are less
predictable, their share price more volatile, and their securities less liquid
than larger, more established companies.
YOU MAY LOSE MONEY IF YOU INVEST IN THIS FUND.
These and other risks are fully described in the section entitled "Explanation
of Strategies and Risks," beginning on page 38.
22
<PAGE>
/graph/ PAST PERFORMANCE
Because the fund commenced operations in 1999, it has no historical performance
information to present to you. Performance history will be presented for the
fund after it has been in operation for one calendar year.
/dollar sign/ FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund.
================================================================================
SHAREHOLDER FEES (fees paid directly from your investment)
Class of Shares
A B C M
- --------------------------------------------------------------------------------
Maximum sales charge (load)
imposed on purchases
(AS A % OF OFFERING PRICE) 5.50% None None 1.00%
Maximum deferred sales charge (load) None(a) 5.00% None 1.00%(b)
(AS A PERCENTAGE OF PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LOWER)
================================================================================
ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from fund assets)
% OF AVERAGE DAILY NET ASSETS Class of Shares
A B C M
- --------------------------------------------------------------------------------
Management fees 0.80% 0.80% 0.80% 0.80%
Distribution and service (12b-1) fees 0.35% 1.00% 1.00% 0.90%
Other expenses (c) 2.70% 2.70% 2.70% 2.70%
-------------------------------
TOTAL ANNUAL FUND OPERATING EXPENSE 3.85% 4.50% 4.50% 4.40%
EXPENSE REDUCTION (d) 2.30% 2.30% 2.30% 2.30%
-------------------------------
NET OPERATING EXPENSES 1.55% 2.20% 2.20% 2.10%
- --------------------------------------------------------------------------------
(a) Certain purchases of Class A shares in amounts greater than $1 million are
subject to a 1% contingent deferred sales charge for 24 months after
purchase.
(b) Purchases of Class M shares are subject to a 1% contingent deferred sales
charge if redeemed within 18 months of purchase.
(c) Because the fund commenced operations in 1999, the "Other expenses" are
estimates.
(d) Contractual arrangement with Idex Management, Inc. through 11/1/2000.
A $10 fee will be charged twice a year for an account opened for more than 2
years with a balance below the share class minimum because of redemptions.
================================================================================
EXAMPLE
This example is here to help you compare the cost of investing in this fund with
that of other mutual funds. It shows the cumulative expenses you'd pay if you
invested $10,000 and held your shares for various time periods, with a 5% annual
return and fund operating expenses remaining the same. This return is for
illustration purposes and is not guaranteed. Actual costs may be higher or
lower.
If the shares are redeemed at the end of each period:
Share Class 1 year 3 years
- --------------------------------------------------------------------------------
A $699 $1,460
B $723 $1,453
C $223 $1,153
M $410 $1,213
- --------------------------------------------------------------------------------
If the shares are not redeemed:
Share Class 1 year 3 years
- --------------------------------------------------------------------------------
A $699 $1,460
B $223 $1,153
C $223 $1,153
M $311 $1,213
- --------------------------------------------------------------------------------
23
<PAGE>
IDEX AEGON INCOME PLUS (FORMERLY INCOME PLUS PORTFOLIO)
SUMMARY OF RISKS AND RETURNS
/target/ OBJECTIVE
The objective of IDEX AEGON Income Plus is to seek as high a level of current
income as is consistent with the avoidance of excessive risk.
This fund may be appropriate for investors who seek high current income and are
willing to tolerate the fluctuation in principal value associated with changes
in interest rates.
/chess piece/ PRINCIPAL STRATEGIES AND POLICIES
The fund's sub-adviser, AEGON USA Investment Management, Inc. (AIMI), seeks to
achieve this objective by principally investing fund assets in a diversified
portfolio of:
[ ] fixed-income securities including investment grade bonds and
high-yield/high-risk bonds (commonly known as "junk bonds")
When investing in rated securities, the fund buys those rated B or better by
Moody's or S&P. When investing in rated commercial paper, the fund buys those
rated Prime-2 or better by Moody's or A-2 or better by S&P. The fund may invest
in unrated securities which, in AIMI's judgment, are of equivalent quality. If
the rated securities held by the fund are downgraded, AIMI will consider whether
to keep these securities.
The fund may not invest in rated corporate securities that are rated below
investment grade, if such holdings are more than 50% of its total holdings of
securities (other than commercial paper).
Please see Appendix A for a description of ratings.
AIMI's strategy is to achieve yields as high as possible while managing risk.
AIMI uses a "top down/bottom up" approach in managing the fund's assets. The
"top down" approach is to adjust the risk profile of the fund. AIMI analyzes
four factors that affect the movement of fixed-income bond prices which include:
economic indicators; technical indicators that are specific to the high-yield
market; investor sentiment and valuation. Analysis of these factors assists AIMI
in its decisions regarding the fund's portfolio allocations.
AIMI has developed a proprietary credit model that is the foundation of its
"bottom up" analysis. The model tracks historical cash flow numbers and
calculates credit financial ratios. Because high-yield companies are of higher
financial risk, AIMI does a thorough credit analysis of all companies in the
fund's portfolio, as well as all potential acquisitions.
Each potential buy and sell candidate is analyzed by AIMI from both the "top
down" and "bottom up" strategies. An industry may look attractive in one area,
but not the other. They can then review the results of their analysis and decide
whether or not to proceed with a transaction.
For temporary defensive purposes, the fund may invest some or all of its assets
in short-term U.S. Government, obligations (Treasury Bills). Under these
circumstances, the fund will be unable to achieve its investment objective.
AIMI may sell fund securities when it determines there are changes in economic
indicators, technical indicators or valuation.
- --------------------------------------------------------------------------------
WHAT IS A "BOTTOM UP" ANALYSIS?
When a sub-adviser uses a "bottom up" approach, it looks primarily at individual
companies against the context of broader market factors. It seeks to identify
individual companies with earnings growth potential that may not be recognized
by the market at large.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WHAT IS A TOP-DOWN APPROACH?
When using a "top-down" approach, the fund manager looks first at broad market
factors, and on the basis of those market factors, chooses certain sectors, or
industries within the overall market. The manager then looks at individual
companies within those sectors or industries.
- --------------------------------------------------------------------------------
/warning sign/ PRINCIPAL RISKS
The fund is subject to the following principal investment risks:
[ ] FIXED-INCOME SECURITIES
The value of these securities may change daily based on changes in the interest
rates, and other market conditions and factors. Risks include:
[ ] changes in interest rates
[ ] length of time to maturity
[ ] issuers defaulting on their obligations to pay interest or return
principal
[ ] HIGH-YIELD/HIGH-RISK SECURITIES
[ ] Credit risk
[ ] Greater sensitivity to interest rate movements
[ ] Greater vulnerability to economic changes
[ ] Decline in market value in event of default
[ ] Less liquidity
[ ] PROPRIETARY RESEARCH
AIMI's proprietary forms of research may not be effective and may cause overall
returns to be lower than if other forms of research are used.
YOU MAY LOSE MONEY IF YOU INVEST IN THIS FUND.
These and other risks are fully described in the section entitled "Full
Explanation of Strategies and Risks," beginning on page 38.
24
<PAGE>
/graph/ PAST PERFORMANCE
The bar chart and the table below show the fund's annual returns and its
long-term performance. The bar chart and table indicate the risks of investing
in the fund by showing you how the fund's performance has varied from year to
year. The bar chart does not reflect the impact of sales charges, which lower
the fund's return. The table compares how the fund's average annual returns for
different calendar periods compare to the returns of the Merrill Lynch High
Yield Master Index (MLHYM), a widely recognized unmanaged index of market
performance. The bar chart and table assume reinvestment of dividends and
capital gains distributions. As with all mutual funds, past performance is not a
prediction of future results.
- --------------------------------------------------------------------------------
Year-by-year total return as of 12/31 each year (%) (1)
CLASS A SHARES
--------------
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
12.28% 2.85% 22.28% 12.63% 13.35% (4.02)% 18.43% 9.45% 11.53% 4.33%
(1) AS OF SEPTEMBER 30, 1999, THE END OF THE MOST RECENT CALENDAR QUARTER, THE
FUND'S YEAR-TO-DATE RETURN FOR CLASS A SHARES WAS (0.78)%.
- --------------------------------------------------------------------------------
Class A Shares: QUARTER ENDED RETURN
------------- ------
Best Quarter: 6/30/95 6.74%
Worst Quarter: 3/31/94 (2.82)%
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS AS OF 12/31/98
SINCE
ONE YEAR 5 YEARS 10 YEARS INCEPTION
- --------------------------------------------------------------------------------
A Shares (0.63)% 6.64% 9.53% 9.83%
- --------------------------------------------------------------------------------
B Shares (1.42)% N/A N/A 7.32%
- --------------------------------------------------------------------------------
M Shares* 1.66% 6.75% N/A 6.61%
- --------------------------------------------------------------------------------
MLHYM** 3.65% 9.36% 11.26% 11.61%
- --------------------------------------------------------------------------------
*ALL SHARES DESIGNATED AS CLASS C SHARES PRIOR TO MARCH 1, 1999 WERE RENAMED AS
CLASS M SHARES ON THAT DATE. EFFECTIVE NOVEMBER 1, 1999 THE FUND BEGAN OFFERING
A NEW CLASS C SHARE THAT HAS DIFFERENT FEES AND EXPENSES THAN THE PREVIOUS CLASS
C SHARE.
**SINCE INCEPTION OF CLASS A SHARES (6/14/85). SINCE INCEPTION OF CLASS B SHARES
(10/01/95) IS 8.61% AND CLASS M SHARES (10/01/93) IS 8.04%.
/dollar sign/ FEES AND EXPENSES
The following table describes the fees and expenses that you may pay if you buy
and hold shares of the fund.
================================================================================
SHAREHOLDER FEES (fees paid directly from your investment)
Class of Shares
A B C M
- --------------------------------------------------------------------------------
Maximum sales charge (load)
imposed on purchases
(AS A % OF OFFERING PRICE) 4.75% None None 1.00%
Maximum deferred sales charge (load) None(a) 5.00% None 1.00%(b)
(AS A PERCENTAGE OF PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LOWER)
- --------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES (c) (expenses that are deducted from fund assets)
% OF AVERAGE DAILY NET ASSETS Class of Shares
A B C M
- --------------------------------------------------------------------------------
Management fees 0.60% 0.60% 0.60% 0.60%
Distribution and service (12b-1) fees 0.35% 1.00% 1.00% 0.90%
Other expenses 0.29% 0.29% 0.29% 0.29%
-------------------------------
TOTAL ANNUAL FUND OPERATING EXPENSES 1.24% 1.89% 1.89% 1.79%
- --------------------------------------------------------------------------------
(a) Certain purchases of Class A shares in amounts greater than $1 million are
subject to a 1% contingent deferred sales charge for 24 months after
purchase.
(b) Purchases of Class M shares are subject to a 1% contingent deferred sales
charge if redeemed within 18 months of purchase.
(c) Annual fund operating expenses are estimated based on the fund's expenses
for the fiscal year ended 10/31/98.
A $10 fee will be charged twice a year for an account opened for more than 2
years with a balance below the share class minimum because of redemptions.
(Before the fee is assessed, you will be given 60 days notice to have the
opportunity to increase your balance.)
================================================================================
EXAMPLE
This example is here to help you compare the cost of investing in this fund with
that of other mutual funds. It shows the cumulative expenses you'd pay if you
invested $10,000 and held your shares for various time periods, with a 5% annual
return and fund operating expenses remaining the same. This return is for
illustration purposes and is not guaranteed. Actual costs may be higher or
lower.
If the shares are redeemed at the end of each period:
Share Class 1 year 3 years 5 years 10 years
- --------------------------------------------------------------------------------
A $595 $850 $1,124 $1,904
B* $692 $894 $1,121 $2,040
C $192 $594 $1,021 $2,212
M $379 $658 $1,060 $2,184
- --------------------------------------------------------------------------------
If the shares are not redeemed:
Share Class 1 year 3 years 5 years 10 years
- --------------------------------------------------------------------------------
A $595 $850 $1,124 $1,904
B* $192 $594 $1,021 $2,040
C $192 $594 $1,021 $2,212
M $280 $658 $1,060 $2,184
- --------------------------------------------------------------------------------
*EXAMPLES FOR CLASS B SHARES ASSUME THEY WILL CONVERT TO CLASS A SHARES EIGHT
YEARS AFTER YOU PURCHASE THEM.
25
<PAGE>
IDEX AEGON TAX EXEMPT (FORMERLY TAX-EXEMPT PORTFOLIO)
SUMMARY OF RISKS AND RETURNS
/target/ OBJECTIVE
The objective of IDEX AEGON Tax Exempt is maximum current interest income exempt
from federal income tax, consistent with preservation of capital.
This fund may be appropriate for investors who seek high current federal
tax-free income and are willing to tolerate the fluctuation in principal value
associated with changes in interest rates. Yields on municipal obligations are
typically lower than on similar taxable securities. Such investors will
generally have higher taxable incomes.
The fund is not for tax-exempt retirement programs because they would receive no
benefit from the tax-exempt nature of most of the fund's income.
/chess piece/ PRINCIPAL STRATEGIES AND POLICIES
Its sub-adviser, AEGON USA Investment Management, Inc. (AIMI), seeks to achieve
this objective by investing at least 80% of the fund's net assets in:
[ ] municipal obligations rated in the three highest grades of Moody's or S&P
These securities must be tax-exempt and not subject to alternative minimum tax.
Please see Appendix A for a description of ratings.
These obligations are issued by states, territories or possessions of the U.S.,
the District of Columbia and their political subdivisions, agencies, etc., and
the fund will invest in them only if the interest they pay is based on the
opinion of bond counsel, exempt from federal income tax.
The average maturity of securities in the fund may vary based on AIMI's analysis
of interest rate trends and municipal market factors.
AIMI takes an approach it believes to be conservative, striving to participate
in the market's advances while preserving capital on the downside, in an attempt
to provide solid risk-adjusted returns for the shareholders of the fund. The
fund is managed by assessing key factors for the tax-exempt environment. The
duration and maturity structure of the fund's portfolio generally reflects the
interest rate outlook of AIMI's Fixed Income Strategy Committee.
Yields on municipal obligations depend upon:
[ ] type or classification of the issuer
[ ] maturity
[ ] size and structure of the deal
[ ] creditworthiness
Continuous changes in these areas are monitored by AIMI to evaluate when the
rewards are appropriate for the degree of risk taken. The fund's portfolio is
broadly diversified among all municipal obligations.
AIMI may take a temporary defensive position by investing up to 20% of its
assets in lower-yielding and taxable instruments when the securities trading
markets or the economy are experiencing excessive volatility or a prolonged
general decline, or other adverse conditions exist. Under these circumstances,
the fund will be unable to achieve its investment objective.
/warning sign/ PRINCIPAL RISKS
The fund is subject to the following principal investment risks:
[ ] MUNICIPAL OBLIGATIONS
[ ] Their yields are usually lower than on similar, but taxable securities
[ ] The income may be subject to state and local taxes
[ ] The income may be a preference item for determining the federal
alternative minimum tax
[ ] Unrated municipal securities may be less liquid than rated securities
[ ] Congress occasionally considers restricting or eliminating the federal
tax exemption
[ ] Obligations could ultimately be federally taxable
[ ] FIXED-INCOME SECURITIES
The value of these securities may change daily based on changes in the interest
rates, and other market conditions and factors. These risks include:
[ ] fluctuations in market value
[ ] changes in interest rates
[ ] length of time to maturity
[ ] issuers defaulting on their obligations to pay interest or return
principal
YOU MAY LOSE MONEY IF YOU INVEST IN THIS FUND.
These and other risks are fully described in the section entitled "Explanation
of Strategies and Risks," beginning on page 38.
26
<PAGE>
/graph/ PAST PERFORMANCE
The bar chart and the table below show the fund's annual returns and its
long-term performance. The bar chart and table indicate the risks of investing
in the fund by showing you how the fund's performance has varied from year to
year. The bar chart does not reflect the impact of sales charges, which lower
the fund's return. The table compares how the fund's average annual returns for
different calendar periods compare to the returns of the Lehman Brothers General
Municipal Bond Index (LBGMB), a widely recognized unmanaged index of market
performance. The bar chart and table assume reinvestment of dividends and
capital gains distributions. As with all mutual funds, past performance is not a
prediction of future results.
- --------------------------------------------------------------------------------
Year-by-year total return as of 12/31 each year (%) (1)
CLASS A SHARES
--------------
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
10.57% 5.57% 10.24% 6.60% 8.66% (2.25)% 12.86% 3.89% 10.12% 4.58%
(1) AS OF SEPTEMBER 30, 1999, THE END OF THE MOST RECENT CALENDAR QUARTER, THE
FUND'S YEAR-TO-DATE RETURN FOR CLASS A SHARES WAS (4.31)%.
- --------------------------------------------------------------------------------
Class A Shares: QUARTER ENDED RETURN
------------- ------
Best Quarter: 6/30/89 5.83%
Worst Quarter: 3/31/96 (3.02)%
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS AS OF 12/31/98
SINCE
ONE YEAR 5 YEARS 10 YEARS INCEPTION
- --------------------------------------------------------------------------------
A Shares (0.39)% 4.68% 6.48% 7.66%
- --------------------------------------------------------------------------------
B Shares (1.17)% N/A N/A 5.66%
- --------------------------------------------------------------------------------
M Shares* 2.19% 5.21% N/A 5.14%
- --------------------------------------------------------------------------------
LBGMB** 6.54% 6.24% 8.22% 9.29%
- --------------------------------------------------------------------------------
*ALL SHARES DESIGNATED AS CLASS C SHARES PRIOR TO MARCH 1, 1999 WERE RENAMED AS
CLASS M SHARES ON THAT DATE. EFFECTIVE NOVEMBER 1, 1999 THE FUND BEGAN OFFERING
A NEW CLASS C SHARE THAT HAS DIFFERENT FEES AND EXPENSES THAN THE PREVIOUS CLASS
C SHARE.
**SINCE INCEPTION OF CLASS A SHARES (4/01/85). SINCE INCEPTION OF CLASS B SHARES
(10/01/95) IS 7.48% AND CLASS M (10/01/93) IS 6.20%.
/dollar sign/ FEES AND EXPENSES
The following table describes the fees and expenses that you may pay if you buy
and hold shares of the fund.
================================================================================
SHAREHOLDER FEES (fees paid directly from your investment)
Class of Shares
A B C M
- --------------------------------------------------------------------------------
Maximum sales charge (load)
imposed on purchases
(AS A % OF OFFERING PRICE) 4.75% None None 1.00%
Maximum deferred sales charge (load) None(a) 5.00% None 1.00%(b)
(AS A PERCENTAGE OF PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LOWER)
- --------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES (d) (expenses that are deducted from fund assets)
% OF AVERAGE DAILY NET ASSETS Class of Shares
A B C M
- --------------------------------------------------------------------------------
Management fees 0.60% 0.60% 0.60% 0.60%
Distribution and service
(12b-1) fees 0.35% 1.00% 1.00% 0.60%
Other expenses 0.53% 0.53% 0.53% 0.53%
-------------------------------
TOTAL ANNUAL FUND OPERATING EXPENSES 1.48% 2.13% 2.13% 1.73%
EXPENSE REDUCTION (c) 0.13% 0.13% 0.13% 0.13%
-------------------------------
NET OPERATING EXPENSES 1.35% 2.00% 2.00% 1.60%
- --------------------------------------------------------------------------------
(a) Certain purchases of Class A shares in amounts greater than $1 million are
subject to a 1% contingent deferred sales charge for 24 months after
purchase.
(b) Purchases of Class M shares are subject to a 1% contingent deferred sales
charge if redeemed within 18 months of purchase.
(c) Contractual arrangement with Idex Management, Inc. through 11/1/2000.
(d) Annual fund operating expenses are estimated based on the fund's expenses
for the fiscal year ended 10/31/98.
A $10 fee will be charged twice a year for an account opened for more than 2
years with a balance below the share class minimum because of redemptions.
================================================================================
EXAMPLE
This example is here to help you compare the cost of investing in this fund with
that of other mutual funds. It shows the cumulative expenses you'd pay if you
invested $10,000 and held your shares for various time periods, with a 5% annual
return and fund operating expenses remaining the same. This return is for
illustration purposes and is not guaranteed. Actual costs may be higher or
lower.
If the shares are redeemed at the end of each period:
Share Class 1 year 3 years 5 years 10 years
- --------------------------------------------------------------------------------
A $606 $909 $1,233 $2,149
B* $703 $954 $1,232 $2,284
C $203 $654 $1,132 $2,452
M $360 $627 $1,017 $2,110
- --------------------------------------------------------------------------------
If the shares are not redeemed:
Share Class 1 year 3 years 5 years 10 years
- --------------------------------------------------------------------------------
A $606 $909 $1,233 $2,149
B* $203 $654 $1,132 $2,284
C $203 $654 $1,132 $2,452
M $261 $627 $1,017 $2,110
- --------------------------------------------------------------------------------
*EXAMPLES FOR CLASS B SHARES ASSUME THEY WILL CONVERT TO CLASS A SHARES EIGHT
YEARS AFTER YOU PURCHASE THEM.
27
<PAGE>
IDEX GE/SCOTTISH EQUITABLE INTERNATIONAL EQUITY
(FORMERLY INTERNATIONAL EQUITY PORTFOLIO)
SUMMARY OF RISKS AND RETURNS
/target/ OBJECTIVE
The objective of IDEX GE/Scottish Equitable International Equity is long-term
growth of capital.
This fund may be appropriate for investors who seek long-term capital growth
through foreign investments, and who are able to tolerate the significant risks
in such investments.
/chess piece/ PRINCIPAL STRATEGIES AND POLICIES
The fund's sub-advisers, Scottish Equitable Investment Management Limited (SEIM)
and GE Investment Management Incorporated (GEIM), seek to achieve this objective
by investing principally in:
[ ] common stocks and other equity securities of companies located in developed
and developing countries other than the U.S. Equity securities are defined
to include common stocks, preferred stocks, convertible preferred stocks and
convertible bonds, depository receipts, and warrants and rights.
Each day, the cash that flows into the fund for investment is divided equally by
SEIM and GEIM, and they manage each portion separately from then on.
Normally, 65% of the fund's assets are invested in at least 50 equity securities
of companies located in 15 to 25 different countries. Under certain
circumstances, the fund may invest in securities of companies located in the
U.S. Under normal circumstances, the fund intends to invest in companies located
in at least 12 countries other than the U.S.
The fund managers consider the following factors in determining where an issuer
is located: country of organization, primary securities trading market, location
of at least 50% of assets, or where the issuer derives at least half of its
revenues and profits.
The fund invests, not only in the larger markets of Europe and Japan, but may
also invest in the smaller markets of Asia, emerging Europe, Latin
America, and other emerging markets.
Overseas economies usually don't move in the same direction and operate
differently. This creates situations the fund aims to take advantage of through
asset allocation among international markets.
SEIM looks for countries where economic growth conditions are favorable and
where stock market valuations don't reflect that potential. It then looks for
companies in those countries whose earnings potential is not reflected in the
share price.
GEIM looks for companies expected to grow faster than relevant markets, and
whose security prices in those countries doesn't fully reflect that. Attributes
of such companies are low prices relative to their long-term cash earnings
potential, potential for significant improvement in the company's business,
financial strength and sufficient liquidity. Stock selection is key to the
performance of the fund. SEIM and GEIM may sell the fund's stocks if they have
lost their strong fundamentals.
The fund may also invest in debt securities or other securities and investment
strategies in pursuit of its investment objective which are explained beginning
on page 38 and in the SAI.
NOTE: SEIM has notified the Fund that effective March 1, 2000 it will be
discontinuing its U.S. operations and will no longer serve as sub-adviser to
the fund. Effective that date, GEIM will serve as the sole sub-adviser of the
fund, subject to shareholder approval at a Shareholder's Meeting to be held
February 8, 2000.
/warning sign/ PRINCIPAL RISKS
The fund is subject to the following principal investment risks:
[ ] STOCKS
While stocks have historically outperformed other investments over the long
term, they tend to go up and down more dramatically over the shorter term. These
price movements may result from factors affecting individual companies,
industries or the securities market as a whole.
Because the stocks the fund holds fluctuate in price, the value of your
investment in the fund will go up and down.
[ ] FOREIGN SECURITIES
Investments in foreign securities involve risks relating to political, social
and economic developments abroad, as well as risks resulting from differences
between the regulations to which U.S. and foreign issuers and markets are
subject. These risks include: changes in currency values; currency speculation;
currency trading costs; different accounting and reporting practices; less
information available to the public; less (or different) regulation of
securities' markets; more complex business negotiations; less liquidity; more
fluctuations in market prices; delays in settling foreign securities
transactions; higher transaction costs; higher costs for holding foreign
securities (custodial fees); vulnerability to seizure and taxes; political
instability and small markets; and different market trading days.
[ ] CONVERTIBLE SECURITIES
Convertible securities may include corporate notes or preferred stock, but
ordinarily are a long-term debt obligation of the issuer convertible at a stated
exchange rate into common stock of the issuer. As with all debt securities, the
market value of convertible securities tends to decline as interest rates
increase and, conversely, to increase as interest rates decline. Convertible
securities generally offer lower interest or dividend yields than
non-convertible securities of similar quality.
YOU MAY LOSE MONEY IF YOU INVEST IN THIS FUND.
These and other risks are fully described in the section entitled "Explanation
of Strategies and Risks," beginning on page 38.
28
<PAGE>
/graph/ PAST PERFORMANCE
The bar chart and the table below show the fund's annual returns and its
long-term performance. The bar chart and table shows you the fund's performance
for 1998. The bar chart does not reflect the impact of sales charges, which
lower the fund's return. The table compares how the fund's performance compares
to the returns of the Morgan Stanley Capital International-Europe, Asia and Far
East Index (MSCI-EAFE), a widely recognized unmanaged index of market
performance. The bar chart and table assume reinvestment of dividends and
capital gains distributions. As with all mutual funds, past performance is not a
prediction of future results.
- --------------------------------------------------------------------------------
Year-by-year total return as of 12/31 each year (%) (1)
CLASS A SHARES
--------------
1998
----
11.21%
(1) AS OF SEPTEMBER 30, 1999, THE END OF THE MOST RECENT CALENDAR QUARTER, THE
FUND'S YEAR-TO-DATE RETURN FOR CLASS A SHARES WAS 5.51%.
- --------------------------------------------------------------------------------
Class A Shares: QUARTER ENDED RETURN
------------- ------
Best Quarter: 12/31/98 15.39%
Worst Quarter: 9/30/98 (16.94)%
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS AS OF 12/31/98
SINCE
ONE YEAR INCEPTION
- --------------------------------------------------------------------------------
A Shares 5.09% 6.01%
- --------------------------------------------------------------------------------
B Shares 5.50% 6.54%
- --------------------------------------------------------------------------------
M Shares* 8.50% 8.04%
- --------------------------------------------------------------------------------
MSCI-EAFE** 20.33% 13.39%
- --------------------------------------------------------------------------------
*ALL SHARES DESIGNATED AS CLASS C SHARES PRIOR TO MARCH 1, 1999 WERE RENAMED AS
CLASS M SHARES ON THAT DATE. EFFECTIVE NOVEMBER 1, 1999 THE FUND BEGAN OFFERING
A NEW CLASS C SHARE THAT HAS DIFFERENT FEES AND EXPENSES THAN THE PREVIOUS CLASS
C SHARE.
**SINCE INCEPTION (2/01/97).
/dollar sign/ FEES AND EXPENSES
The following table describes the fees and expenses that you may pay if you buy
and hold shares of the fund.
================================================================================
SHAREHOLDER FEES (fees paid directly from your investment)
Class of Shares
A B C M
- --------------------------------------------------------------------------------
Maximum sales charge (load)
imposed on purchases
(AS A % OF OFFERING PRICE) 5.50% None None 1.00%
Maximum deferred
sales charge (load) None(a) 5.00% None 1.00%(b)
(AS A PERCENTAGE OF PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LOWER)
================================================================================
ANNUAL FUND OPERATING EXPENSES (d) (expenses that are deducted from fund assets)
% OF AVERAGE DAILY NET ASSETS Class of Shares
A B C M
- --------------------------------------------------------------------------------
Management fees (e) 0.80% 0.80% 0.80% 0.80%
Distribution and service
(12b-1) fees 0.35% 1.00% 1.00% 0.90%
Other expenses 2.87% 2.87% 2.87% 2.87%
-------------------------------
TOTAL ANNUAL FUND OPERATING EXPENSES 4.02% 4.67% 4.67% 4.57%
EXPENSE REDUCTION (c) 2.22% 2.22% 2.22% 2.22%
-------------------------------
NET OPERATING EXPENSES 1.80% 2.45% 2.45% 2.35%
- --------------------------------------------------------------------------------
(a) Certain purchases of Class A shares in amounts greater than $1 million are
subject to a 1% contingent deferred sales charge for 24 months after
purchase.
(b) Purchases of Class M shares are subject to a 1% contingent deferred sales
charge if redeemed within 18 months of purchase.
(c) Contractual arrangement with Idex Management, Inc. through 11/1/2000.
(d) Annual fund operating expenses are estimated based on the fund's expenses
for the fiscal year ended 10/31/98.
(e) Effective March 1, 1999, management fees were reduced from 1.00% to 0.80%.
A $10 fee will be charged twice a year for an account opened for more than 2
years with a balance below the share class minimum because of redemptions.
================================================================================
EXAMPLE
This example is here to help you compare the cost of investing in this fund with
that of other mutual funds. It shows the cumulative expenses you'd pay if you
invested $10,000 and held your shares for various time periods, with a 5% annual
return and fund operating expenses remaining the same. This return is for
illustration purposes and is not guaranteed. Actual costs may be higher or
lower.
If the shares are redeemed at the end of each period:
Share Class 1 year 3 years 5 years 10 years
- --------------------------------------------------------------------------------
A $723 $1,515 $2,322 $4,411
B* $748 $1,509 $2,276 $4,486
C $248 $1,209 $2,176 $4,623
M $435 $1,269 $2,209 $4,597
- --------------------------------------------------------------------------------
If the shares are not redeemed:
Share Class 1 year 3 years 5 years 10 years
- --------------------------------------------------------------------------------
A $723 $1,515 $2,322 $4,411
B* $248 $1,209 $2,176 $4,486
C $248 $1,209 $2,176 $4,623
M $336 $1,269 $2,209 $4,597
- --------------------------------------------------------------------------------
*Examples for Class B shares assume they will convert to Class A shares eight
years after you purchase them.
29
<PAGE>
IDEX DEAN ASSET ALLOCATION (FORMERLY TACTICAL ASSET ALLOCATION PORTFOLIO)
SUMMARY OF RISKS AND RETURNS
/target/ OBJECTIVE
The objective of IDEX Dean Asset Allocation is preservation of capital and
competitive investment returns.
This fund may be appropriate for investors who want a combination of capital
growth and income, and who can tolerate the risks associated with an
actively-traded portfolio which shifts assets between equity and debt.
/chess piece/ PRINCIPAL STRATEGIES AND POLICIES
The fund's sub-adviser, Dean Investment Associates (Dean), seeks to achieve the
fund's objective by investing fund assets principally in:
[ ] income-producing common and preferred stocks
[ ] debt obligations of U.S. issuers, some of which will be convertible into
common stocks
[ ] U.S. Treasury bonds, notes and bills
[ ] money market funds
In selecting stocks, Dean focuses on quality, liquid, large capitalization
stocks, using a "bottom up" screening process to identify stocks that are
statistically undervalued. Dean's ultimate goal is to choose stocks whose price
has been driven down by a market that has "over-reacted" to perceived risks.
With this approach, the fund seeks to achieve a dividend income yield higher
than that of the Russell 1000 Index, a widely recognized unmanaged index of
market performance which measures the performance of the 1,000 largest companies
in the Russell 3000 Index, which represents approximately 89% of the total
market capitalization of the Russell 3000 Index. As of the latest
reconstitution, the average market capitalization was approximately $9.9
billion; the medium market capitalization was approximately $3.7 billion. The
smallest company in the Index had an approximate market capitalization of
$1,404.7 million.
Dean employs an investment technique called "asset allocation," which shifts
assets from one class of investment to another (such as from equity to debt)
when Dean anticipates changes in market direction.
Dean will seek to enhance returns in rising stock markets by increasing its
allocation to equity, then protect itself in falling stock markets by reducing
equity exposure and shifting into fixed-income investments, as well as into
money market funds (up to 10% of total assets).
Dean has developed forecasting models to predict movements in the stock market
for both short (12 to 18-month) and long (3 to 5-year) time periods. These
models help compare the risks and rewards Dean anticipates in holding stocks
versus debt instruments and money market funds. Such techniques may result in
increased fund expenses such as brokerage fees.
Thus, the models determine when Dean is to "tactically" adjust the fund's asset
allocation among stocks, bonds, U.S. debt obligations and money market funds.
Dean increases equity holdings in rising stock markets, then reduces equity in
falling stock markets and increases fixed-income and money market holdings. Dean
switches from equity to debt securities when it anticipates changes in the
market direction. Dean also sells stocks when they become overvalued.
- --------------------------------------------------------------------------------
WHAT IS A "BOTTOM UP" ANALYSIS?
When a sub-adviser uses a "bottom up" approach, it looks primarily at individual
companies against the context of broader market factors. It seeks to identify
individual companies with earnings growth potential that may not be recognized
by the market at large.
- --------------------------------------------------------------------------------
/warning sign/ PRINCIPAL RISKS
The fund is subject to the following principal investment risks:
[ ] STOCKS
While stocks have historically outperformed other investments over the long
term, they tend to go up and down more dramatically over the shorter term. These
price movements may result from factors affecting individual companies,
industries, or the securities market as a whole.
Because the stocks the fund holds fluctuate in price, the value of your
investment in the fund will go up and down.
[ ] CONVERTIBLE SECURITIES
Convertible securities may include corporate notes or preferred stock, but
ordinarily are a long-term debt obiligation of the issuer convertible at a
stated exchange rate into common stock of the issuer. As with all debt
securities, the market value of convertible securities tends to decline as
interest rates increase and, conversely, to increase as interest rates decline.
Convertible securities generally offer lower interest or dividend yields than
non-convertible securities of similar quality.
[ ] FIXED-INCOME SECURITIES
The value of these securities may change daily based on changes in the interest
rates, and other market conditions and factors. The risks include:
[ ] changes in interest rates
[ ] length of time to maturity
[ ] issuers defaulting on their obligations to pay interest or return
principal
[ ] STATISTICAL MODELS
Securities selected using statistical models may result in incorrect asset
allocations causing overall returns to be lower than if other methods of
selection were used.
YOU MAY LOSE MONEY IF YOU INVEST IN THIS FUND.
These and other risks are fully described in the section entitled "Explanation
of Strategies and Risks," beginning on page 38.
30
<PAGE>
/graph/ PAST PERFORMANCE
The bar chart and the table below show the fund's annual returns and its
long-term performance. The bar chart and table indicate the risks of investing
in the fund by showing you how the fund's performance has varied from year to
year. The bar chart does not reflect the impact of sales charges, which lower
the fund's return. The table compares how the fund's average annual returns for
different calendar periods compare to the returns of the Lehman Brothers
Intermediate Government Corporate Bond Index (LBIGCB)(primary benchmark), and
the Russell 1000 Index (Russell 1000), widely recognized unmanaged indexes of
market performance. The bar chart and table assume reinvestment of dividends and
capital gains distributions. As with all mutual funds, past performance is not a
prediction of future results.
- --------------------------------------------------------------------------------
Year-by-year total return as of 12/31 each year (%) (1)
CLASS A SHARES
--------------
1996 1997 1998
---- ---- ----
13.16% 17.06% 6.87%
(1) AS OF SEPTEMBER 30, 1999, THE END OF THE MOST RECENT CALENDAR QUARTER, THE
FUND'S YEAR-TO-DATE RETURN FOR CLASS A SHARES WAS (7.27)%.
- --------------------------------------------------------------------------------
Class A Shares: QUARTER ENDED RETURN
------------- ------
Best Quarter: 6/30/97 8.95%
Worst Quarter: 9/30/98 (6.21)%
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS AS OF 12/31/98
SINCE
ONE YEAR INCEPTION
- --------------------------------------------------------------------------------
A Shares 0.99% 10.66%
- --------------------------------------------------------------------------------
B Shares 1.17% 11.40%
- --------------------------------------------------------------------------------
M Shares* 4.21% 11.65%
- --------------------------------------------------------------------------------
LBIGCB** 8.43% 7.36%
- --------------------------------------------------------------------------------
Russel 1000 15.63% 22.42%
- --------------------------------------------------------------------------------
*ALL SHARES DESIGNATED AS CLASS C SHARES PRIOR TO MARCH 1, 1999 WERE RENAMED AS
CLASS M SHARES ON THAT DATE. EFFECTIVE NOVEMBER 1, 1999 THE FUND BEGAN OFFERING
A NEW CLASS C SHARE THAT HAS DIFFERENT FEES AND EXPENSES THAN THE PREVIOUS CLASS
C SHARE.
**SINCE INCEPTION (10/01/95).
/dollar sign/ FEES AND EXPENSES
The following table describes the fees and expenses that you may pay if you buy
and hold shares of the fund.
================================================================================
SHAREHOLDER FEES (fees paid directly from your investment)
Class of Shares
A B C M
- --------------------------------------------------------------------------------
Maximum sales charge (load)
imposed on purchases
(AS A % OF OFFERING PRICE) 5.50% None None 1.00%
Maximum deferred sales charge (load) None(a) 5.00% None 1.00%(b)
(AS A PERCENTAGE OF PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LOWER)
- --------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES (d) (expenses that are deducted from fund assets)
% OF AVERAGE DAILY NET ASSETS Class of Shares
A B C M
- --------------------------------------------------------------------------------
Management fees (e) 0.80% 0.80% 0.80% 0.80%
Distribution and service (12b-1) fees 0.35% 1.00% 1.00% 0.90%
Other expenses 0.52% 0.52% 0.52% 0.52%
-------------------------------
TOTAL ANNUAL FUND OPERATING EXPENSES 1.67% 2.32% 2.32% 2.22%
EXPENSE REDUCTION (c) 0.12% 0.12% 0.12% 0.12%
-------------------------------
NET OPERATING EXPENSES 1.55% 2.20% 2.20% 2.10%
- --------------------------------------------------------------------------------
(a) Certain purchases of Class A shares in amounts greater than $1 million are
subject to a 1% contingent deferred sales charge for 24 months after
purchase.
(b) Purchases of Class M shares are subject to a 1% contingent deferred sales
charge if redeemed within 18 months of purchase.
(c) Contractual arrangement with Idex Management, Inc. through 11/1/2000.
(d) Annual fund operating expenses are estimated based on the fund's expenses
for the fiscal year ended 10/31/98.
(e) Effective March 1, 1999, management fees were reduced from 1.00% to 0.80%.
A $10 fee will be charged twice a year for an account opened for more than 2
years with a balance below the share class minimum because of redemptions.
================================================================================
EXAMPLE
This example is here to help you compare the cost of investing in this fund with
that of other mutual funds. It shows the cumulative expenses you'd pay if you
invested $10,000 and held your shares for various time periods, with a 5% annual
return and fund operating expenses remaining the same. This return is for
illustration purposes and is not guaranteed. Actual costs may be higher or
lower.
If the shares are redeemed at the end of each period
Share Class 1 year 3 years 5 years 10 years
- --------------------------------------------------------------------------------
A $699 $1,036 $1,397 $2,408
B* $723 $1,013 $1,329 $2,482
C $223 $ 713 $1,229 $2,647
M $410 $ 776 $1,267 $2,620
- --------------------------------------------------------------------------------
If the shares are not redeemed:
Share Class 1 year 3 years 5 years 10 years
- --------------------------------------------------------------------------------
A $699 $1,036 $1,397 $2,408
B* $223 $ 713 $1,229 $2,482
C $223 $ 713 $1,229 $2,647
M $311 $ 776 $1,267 $2,620
- --------------------------------------------------------------------------------
*EXAMPLES FOR CLASS B SHARES ASSUME THEY WILL CONVERT TO CLASS A SHARES EIGHT
YEARS AFTER YOU PURCHASE THEM.
31
<PAGE>
IDEX LKCM STRATEGIC TOTAL RETURN (FORMERLY STRATEGIC TOTAL RETURN PORTFOLIO)
SUMMARY OF RISKS AND RETURNS
/target/ OBJECTIVE
The objective of IDEX LKCM Strategic Total Return is current income, long-term
growth of income, and capital appreciation. This fund may be appropriate for
investors who seek capital appreciation and income growth through a strategic
blend of stocks and bonds, and who desire a fundamentally-oriented investment
approach, emphasizing risk management.
/chess piece/ PRINCIPAL STRATEGIES AND POLICIES
Its sub-adviser, Luther King Capital Management Corporation (Luther King), seeks
to achieve this objective by principally investing fund assets in both equity
and fixed-income securities which include:
[ ] common stocks
[ ] corporate bonds
[ ] government bonds
The fund seeks to invest in both equity and fixed-income securities to achieve a
balance of capital appreciation and investment income while limiting volatility
to a lesser extent. In choosing such securities, Luther King looks for companies
with strong fundamental characteristics. It considers factors such as:
[ ] balance sheet quality
[ ] cash flow generation
[ ] earnings and dividend growth record and outlook
[ ] profitability levels
In some cases, Luther King bases its selections on other factors. For example,
some securities may be bought at an apparent discount to their appropriate
value, with the anticipation that they'll increase in value over time.
The fund seeks to achieve an income yield greater than the average yield of the
stocks in the S&P 500.
The fund invests mainly in the stocks and bonds of companies with established
operating histories and strong fundamental characteristics. The majority of the
stocks the fund buys will be listed on a national exchange or traded on NASDAQ
or domestic over-the-counter markets.
Luther King closely analyzes a company's financial status and a security's
valuation in a effort to control risk at the individual level. In addition, the
growth elements of the fund's equity investments drive capital appreciation.
As part of its income-oriented strategy, Luther King expects to invest about 25%
of the fund's assets in fixed-income securities, some of which will be
convertible into common stocks, and no more than 20% of its assets in stocks
that don't pay a dividend. Corporate debt securities in which the fund invests
will generally have a rating within the four highest grades as determined by
Moody's or S&P. (See Appendix A for a description of the ratings).
Luther King may sell fund securities when its stocks become overvalued or when
the stocks lose their strong fundamentals.
While the fund invests principally in common stocks and corporate and government
bonds, Luther King may also invest in convertible preferred stocks, corporate
convertible bonds, or other securities and investment strategies in pursuit of
its investment objective, which are explained beginning on page 38 and in the
SAI.
/warning sign/ PRINCIPAL RISKS
The fund is subject to the following principal investment risks:
[ ] STOCKS
While stocks have historically outperformed other investments over the long
term, they tend to go up and down more dramatically over the short term. These
price movements may result from factors affecting individual companies,
industries or the securities market as a whole.
Because the stocks the fund holds fluctuate in price, the value of your
investment in the fund will go up and down.
[ ] FIXED-INCOME SECURITIES
The value of these securities may change daily based on changes in the interest
rates, and other market conditions and factors. The risks include:
[ ] changes in interest rates
[ ] length of time to maturity
[ ] issuers defaulting on their obligations to pay interest or return
principal
YOU MAY LOSE MONEY IF YOU INVEST IN THIS FUND.
These and other risks are fully described in the section entitled "Explanation
of Strategies and Risks," beginning on page 38.
32
<PAGE>
/graph/ PAST PERFORMANCE
The bar chart and the table below show the fund's annual returns and its
long-term performance. The bar chart and table indicate the risks of investing
in the fund by showing you how the fund's performance has varied from year to
year. The bar chart does not reflect the impact of sales charges, which lower
the fund's returns. The table compares how the fund's average annual returns for
different calendar periods compare to the returns of the S&P 500 (primary
benchmark), and the Lehman Brothers Intermediate Government Corporate Bond
(LBIGCB) Index, widely recognized unmanaged indexes of stock performance. The
bar chart and table assume reinvestment of dividends and capital gains
distributions. As with all mutual funds, past performance is not a prediction of
future results.
- --------------------------------------------------------------------------------
Year-by-year total return as of 12/31 each year (%) (1)
CLASS A SHARES
--------------
1995 1996 1997 1998
---- ---- ---- ----
22.81% 16.42% 21.99% 10.07%
(1) AS OF SEPTEMBER 30, 1999, THE END OF THE MOST RECENT CALENDAR QUARTER, THE
FUND'S YEAR-TO-DATE RETURN FOR CLASS A SHARES WAS (0.25)%.
- --------------------------------------------------------------------------------
Class A Shares: QUARTER ENDED RETURN
------------- ------
Best Quarter: 6/30/97 12.74%
Worst Quarter: 9/30/98 (7.39)%
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS AS OF 12/31/98
SINCE
ONE YEAR INCEPTION
- --------------------------------------------------------------------------------
A Shares 4.02% 16.22%
- --------------------------------------------------------------------------------
B Shares 4.36% 15.51%
- --------------------------------------------------------------------------------
M Shares* 7.37% 16.93%
- --------------------------------------------------------------------------------
S&P 500** 28.58% 30.20%
- --------------------------------------------------------------------------------
LBIGCB 8.43% 8.75%
- --------------------------------------------------------------------------------
*All shares designated as Class C shares prior to March 1, 1999 were renamed as
Class M shares on that date. Effective November 1, 1999 the fund began offering
a new Class C share that has different fees and expenses than the previous Class
C share.
**Since inception of Class A shares and Class M shares (12/02/94). Since
inception of Class B shares (10/01/95) is 28.04% for the S&P 500, and 7.30% for
LBIGC.
/dollar sign/ FEES AND EXPENSES
The following table describes the fees and expenses that you may pay if you buy
and hold shares of the fund.
================================================================================
SHAREHOLDER FEES (fees paid directly from your investment)
Class of Shares
A B C M
- --------------------------------------------------------------------------------
Maximum sales charge (load)
imposed on purchases
(AS A % OF OFFERING PRICE) 5.50% None None 1.00%
Maximum deferred sales charge (load) None(a) 5.00% None 1.00%(b)
(AS A PERCENTAGE OF PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LOWER)
================================================================================
ANNUAL FUND OPERATING EXPENSES (d) (expenses that are deducted from fund assets)
% OF AVERAGE DAILY NET ASSETS Class of Shares
A B C M
- --------------------------------------------------------------------------------
Management fees (e) 0.80% 0.80% 0.80% 0.80%
Distribution and service (12b-1) fees 0.35% 1.00% 1.00% 0.90%
Other expenses 0.57% 0.57% 0.57% 0.57%
-------------------------------
TOTAL ANNUAL FUND OPERATING EXPENSES 1.72% 2.37% 2.37% 2.27%
EXPENSE REDUCTION (c) 0.17% 0.17% 0.17% 0.17%
-------------------------------
NET OPERATING EXPENSES 1.55% 2.20% 2.20% 2.10%
- --------------------------------------------------------------------------------
(a) Certain purchases of Class A shares in amounts greater than $1 million are
subject to a 1% contingent deferred sales charge for 24 months after
purchase.
(b) Purchases of Class M shares are subject to a 1% contingent deferred sales
charge if redeemed within 18 months of purchase.
(c) Contractual arrangement with Idex Management, Inc. through 11/1/2000.
(d) Annual fund operating expenses are estimated based on the fund's expenses
for the fiscal year ended 10/31/98.
(e) Effective March 1, 1999, management fees were reduced from 1.00% to 0.80%.
A $10 fee will be charged twice a year for an account opened for more than 2
years with a balance below the share class minimum because of redemptions.
================================================================================
EXAMPLE
This example is here to help you compare the cost of investing in this fund with
that of other mutual funds. It shows the cumulative expenses you'd pay if you
invested $10,000 and held your shares for various time periods, with a 5% annual
return and fund operating expenses remaining the same. This return is for
illustration purposes and is not guaranteed. Actual costs may be higher or
lower.
If the shares are redeemed at the end of each period:
Share Class 1 year 3 years 5 years 10 years
- --------------------------------------------------------------------------------
A $699 $1,046 $1,417 $2,455
B* $723 $1,023 $1,350 $2,529
C $223 $ 723 $1,250 $2,693
M $410 $ 786 $1,288 $2,666
- --------------------------------------------------------------------------------
If the shares are not redeemed:
Share Class 1 year 3 years 5 years 10 years
- --------------------------------------------------------------------------------
A $699 $1,046 $1,417 $2,455
B* $223 $ 723 $1,250 $2,529
C $223 $ 723 $1,250 $2,693
M $311 $ 786 $1,288 $2,666
- --------------------------------------------------------------------------------
*EXAMPLES FOR CLASS B SHARES ASSUME THEY WILL CONVERT TO CLASS A SHARES EIGHT
YEARS AFTER YOU PURCHASE THEM.
33
<PAGE>
IDEX NWQ VALUE EQUITY
(FORMERLY VALUE EQUITY PORTFOLIO)
SUMMARY OF RISKS AND RETURNS
/target/ OBJECTIVE
THE OBJECTIVE OF IDEX NWQ VALUE EQUITY IS MAXIMUM CONSISTENT TOTAL RETURN WITH
MINIMUM RISK TO PRINCIPAL.
This fund may be appropriate for investors who seek both capital preservation
and long-term capital appreciation.
/chess piece/ PRINCIPAL STRATEGIES AND POLICIES
The fund's sub-adviser, NWQ Investment Management Company, Inc. (NWQ), employs a
value-oriented approach to investing.
The fund seeks to achieve its objective by investing principally in:
[ ] common stocks
Value investing involves buying stocks that are out of favor and/or undervalued
in comparison to their peers and/or their prospects for growth. Generally, value
stock valuation levels are lower than growth stocks.
NWQ will use statistical measures to look for above-average stock valuations,
screening for below-average price-to-earnings and price-to-book ratios,
above-average dividend yields and strong financial stability.
NWQ also identifies those market sectors believed to benefit from long-term
positive fundamentals, and focuses on the companies within these sectors which
represent above-average statistical value and are undervalued when purchased.
Under normal market conditions, 65% of the fund's assets will be invested in
equity securities.
The fund consists primarily of mid-capitalization to large capitalization
companies. When making a security selection NWQ:
[ ] uses earnings averaged over both strong and weak periods in evaluating
cyclical companies
[ ] focuses on quality of earnings
[ ] invests in relative value
[ ] focuses in industries and sectors that have strong long-term fundamentals
NWQ may sell the fund's securities when the stocks become overvalued or the
stocks lose their strong fundamentals.
While the fund invests principally in common stocks, NWQ may also invest in
money market and short term instruments (Treasury bills), or other securities
and investment strategies in pursuit of its investment objective, which are
explained beginning on page 38 and in the SAI.
/warning sign/ PRINCIPAL RISKS
The fund is subject to the following principal investment risks:
[ ] STOCKS
While stocks have historically outperformed other investments over the long
term, they tend to go up and down more dramatically over the shorter term. These
price movements may result from factors affecting individual companies,
industries, or the securities market as a whole.
Because the stocks the fund holds fluctuate in price, the value of your
investment in the fund will go up and down.
[ ] MEDIUM-SIZED COMPANIES
These companies present additional risks because their earnings are less
predictable, their share price more volatile, and their securities less liquid
than larger more established companies.
Undervalued stocks may not realize their perceived value for extended periods of
time. Value stocks may respond differently to market and other developments than
other types of stocks. Value-oriented funds will typically underperform when
growth investing is in favor.
YOU MAY LOSE MONEY IF YOU INVEST IN THIS FUND.
These and other risks are fully described in the section entitled "Explanation
of Strategies and Risks," beginning on page 38.
34
<PAGE>
/graph/ PAST PERFORMANCE
The bar chart and the table below show the fund's annual returns and its
long-term performance. The bar chart and table shows you the fund's performance
for 1998. The bar chart does not reflect the impact of sales charges, which
lower the fund's return. The table compares how the fund's performance compares
to the returns of the S&P 500, a widely recognized unmanaged index of stock
performance. Both the bar chart and table assume reinvestment of dividends and
capital gains distributions. As with all mutual funds, past performance is not a
prediction of future results.
- --------------------------------------------------------------------------------
Year-by-year total return as of 12/31 each year (%) (1)
CLASS A SHARES
--------------
1998
----
(7.24)%
(1) AS OF SEPTEMBER 30, 1999, THE END OF THE MOST RECENT CALENDAR QUARTER, THE
FUND'S YEAR-TO-DATE RETURN FOR CLASS A SHARES WAS 2.89%.
- --------------------------------------------------------------------------------
Class A Shares: QUARTER ENDED RETURN
------------- ------
Best Quarter: 3/31/98 9.96%
Worst Quarter: 9/30/98 (18.47)%
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS AS OF 12/31/98
SINCE
ONE YEAR INCEPTION
- --------------------------------------------------------------------------------
A Shares (12.34)% 2.43%
- --------------------------------------------------------------------------------
B Shares (12.46)% 2.85%
- --------------------------------------------------------------------------------
M Shares* (9.59)% 4.42%
- --------------------------------------------------------------------------------
S&P 500** 28.58% 28.37%
- --------------------------------------------------------------------------------
*ALL SHARES DESIGNATED AS CLASS C SHARES PRIOR TO MARCH 1, 1999 WERE RENAMED AS
CLASS M SHARES ON THAT DATE. EFFECTIVE NOVEMBER 1, 1999 THE FUND BEGAN OFFERING
A NEW CLASS C SHARE THAT HAS DIFFERENT FEES AND EXPENSES THAN THE PREVIOUS CLASS
C SHARE.
**SINCE INCEPTION (2/01/97).
/dollar sign/ FEES AND EXPENSES
The following table describes the fees and expenses that you may pay if you buy
and hold shares of the fund.
================================================================================
SHAREHOLDER FEES (fees paid directly from your investment)
Class of Shares
A B C M
- --------------------------------------------------------------------------------
Maximum sales charge (load)
imposed on purchases
(AS A % OF OFFERING PRICE) 5.50% None None 1.00%
Maximum deferred sales charge (load) None(a) 5.00% None 1.00%(b)
(AS A PERCENTAGE OF PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LOWER)
================================================================================
ANNUAL FUND OPERATING EXPENSES (d) (expenses that are deducted from fund assets)
% OF AVERAGE DAILY NET ASSETS Class of Shares
A B C M
- --------------------------------------------------------------------------------
Management fees (e) 0.80% 0.80% 0.80% 0.80%
Distribution and service (12b-1) fees 0.35% 1.00% 1.00% 0.90%
Other expenses 1.16% 1.16% 1.16% 1.16%
-------------------------------
TOTAL ANNUAL FUND OPERATING EXPENSES 2.31% 2.96% 2.96% 2.86%
EXPENSE REDUCTION (c) 0.76% 0.76% 0.76% 0.76%
-------------------------------
NET OPERATING EXPENSES 1.55% 2.20% 2.20% 2.10%
- --------------------------------------------------------------------------------
(a) Certain purchases of Class A shares in amounts greater than $1 million are
subject to a 1% contingent deferred sales charge for 24 months after
purchase.
(b) Purchases of Class M shares are subject to a 1% contingent deferred sales
charge if redeemed within 18 months of purchase.
(c) Contractual arrangement with Idex Management, Inc. through 11/1/2000.
(d) Annual fund operating expenses are estimated based on the fund's expenses
for the fiscal year ended 10/31/98.
(e) Effective March 1, 1999, management fees were reduced from 1.00% to 0.80%.
A $10 fee will be charged twice a year for an account opened for more than 2
years with a balance below the share class minimum because of redemptions.
================================================================================
EXAMPLE
This example is here to help you compare the cost of investing in this fund with
that of other mutual funds. It shows the cumulative expenses you'd pay if you
invested $10,000 and held your shares for various time periods, with a 5% annual
return and fund operating expenses remaining the same. This return is for
illustration purposes and is not guaranteed. Actual costs may be higher or
lower.
If the shares are redeemed at the end of each period:
Share Class 1 year 3 years 5 years 10 years
- --------------------------------------------------------------------------------
A $699 $1,163 $1,652 $2,995
B* $723 $1,144 $1,591 $3,069
C $223 $ 844 $1,491 $3,226
M $410 $ 906 $1,527 $3,200
- --------------------------------------------------------------------------------
If the shares are not redeemed:
Share Class 1 year 3 years 5 years 10 years
- --------------------------------------------------------------------------------
A $699 $1,163 $1,652 $2,995
B* $223 $ 844 $1,491 $3,069
C $223 $ 844 $1,491 $3,226
M $311 $ 906 $1,527 $3,200
- --------------------------------------------------------------------------------
*EXAMPLES FOR CLASS B SHARES ASSUME THEY WILL CONVERT TO CLASS A SHARES EIGHT
YEARS AFTER YOU PURCHASE THEM.
35
<PAGE>
IDEX C.A.S.E. GROWTH
(FORMERLY C.A.S.E. PORTFOLIO)
SUMMARY OF RISKS AND RETURNS
/target/ OBJECTIVE
The objective of IDEX C.A.S.E. Growth is annual growth of capital through
investment in companies whose management, financial resources and fundamentals
appear attractive on a scale measured against each company's present value.
This fund may be appropriate for investors who seek long-term growth with a
diversified portfolio of stocks having both above-market growth characteristics
and below-market risk characteristics. Investors should be comfortable with the
price fluctuations of such a stock portfolio.
/chess piece/ PRINCIPAL STRATEGIES AND POLICIES
The fund's sub-adviser, C.A.S.E. Management, Inc. (C.A.S.E.), intends to achieve
this objective by primarily investing fund assets in:
[ ] common stocks
[ ] preferred stocks
[ ] convertible stocks
The fund's assets are invested in companies whose stocks are traded on national
exchanges or over-the-counter markets. C.A.S.E. focuses on companies that are
fundamentally strong compared to other companies in the same industry, the same
sector and the broad market. C.A.S.E. evaluates the fund's growth of capital on
a year-to-year basis.
Using proprietary forms of research, C.A.S.E. selects companies after evaluating
the current economic cycle, and identifying potentially attractive sectors,
industries and company-specific circumstances.
C.A.S.E. invests in common, preferred and convertible stocks of companies that
C.A.S.E. believes show below-market risk, supported by below-market multiples,
along with above-average fundamentals. These fundamentals include return on
equity, price-to-earnings ratio and other balance sheet factors that contribute
to long-term capital growth.
C.A.S.E. applies its proprietary forms of research to companies that exhibit
superior products and above-average growth rates along with sound management and
financials. Each company selected for the fund is monitored against more than
two dozen measures of financial strength, including:
[ ] insiders' activity
[ ] market style leadership
[ ] earnings surprise
[ ] analysts' change in earnings projections
[ ] return on equity
[ ] 5-year earnings-per-share growth rate
[ ] price-earnings ratio
[ ] price-to-book ratio
[ ] price-to-cash flow
[ ] institutional activity and holdings
[ ] relative strength price change
[ ] price-to-200-day moving average
[ ] price-to-historical rising inflation
[ ] price-to-declining U.S. dollar
[ ] earnings projected change
[ ] quarterly earnings per-share growth rate
C.A.S.E. sells stocks when they view the stock to be overvalued, or when
C.A.S.E. feels the stocks have lost their strong fundamentals.
In seeking to achieve the investment objective of this fund, C.A.S.E. will make
investment decisions without giving consideration to the turnover rate of the
fund. As a result, the turnover rate of the fund's portfolio may be higher than
other comparable funds. Consequently, the fund may incur higher transaction
related expenses than funds that do not engage in frequent trading.
/warning sign/ PRINCIPAL RISKS
The fund is subject to the following principal investment risks:
[ ] STOCKS
While stocks have historically outperformed other investments over the long
term, they tend to go up and down more dramatically over the shorter term. These
price movements may result from factors affecting individual companies,
industries, or the securities market as a whole.
Because the stocks the fund holds fluctuate in price, the value of your
investment in the fund will go up and down.
[ ] PROPRIETARY RESEARCH
C.A.S.E.'s proprietary forms of research may not be effective and may cause
overall returns to be lower than if other forms of research are used.
[ ] CONVERTIBLE SECURITIES
Convertible securities may include corporate notes or preferred stock, but
ordinarily are a long-term debt obligation of the issuer convertible at a stated
exchange rate into common stock of the issuer. As with all debt securities, the
market value of convertible securities tends to decline as interest rates
increase and, conversely, to increase as interest rates decline. Convertible
securities generally offer lower interest or dividend yields than
non-convertible securities of similar quality.
YOU MAY LOSE MONEY IF YOU INVEST IN THIS FUND.
These and other risks are fully described in the section entitled "Explanation
of Strategies and Risks," beginning on page 38.
36
<PAGE>
/graph/ PAST PERFORMANCE
The bar chart and the table below show the fund's annual returns and its
long-term performance. The bar chart and table indicate the risks of investing
in the fund by showing you how the fund's performance has varied from year to
year. The bar chart does not reflect the impact of sales charges, which lower
the fund's return. The table compares how the fund's average annual returns for
different calendar periods compare to the returns of the S&P 500, a widely
recognized unmanaged index of stock performance. The bar chart and table assume
reinvestment of dividends and capital gains distributions. As with all mutual
funds, past performance is not a prediction of future results.
- --------------------------------------------------------------------------------
Year-by-year total return as of 12/31 each year (%) (1)
CLASS A SHARES
--------------
1997 1998
---- ----
21.11% (5.34)%
(1) AS OF SEPTEMBER 30, 1999, THE END OF THE MOST RECENT CALENDAR QUARTER, THE
FUND'S YEAR-TO-DATE RETURN FOR CLASS A SHARES WAS 11.34%.
- --------------------------------------------------------------------------------
Class A Shares: QUARTER ENDED RETURN
------------- ------
Best Quarter: 12/31/98 24.98%
Worst Quarter: 9/30/98 (24.42)%
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS AS OF 12/31/98
SINCE
ONE YEAR INCEPTION
- --------------------------------------------------------------------------------
A Shares (10.55)% 6.17%
B Shares (10.62)% 6.72%
M Shares* (7.70)% 7.34%
S&P 500** 28.58% 27.61%
- --------------------------------------------------------------------------------
*ALL SHARES DESIGNATED AS CLASS C SHARES PRIOR TO MARCH 1, 1999 WERE RENAMED AS
CLASS M SHARES ON THAT DATE. EFFECTIVE NOVEMBER 1, 1999 THE FUND BEGAN OFFERING
A NEW CLASS C SHARE THAT HAS DIFFERENT FEES AND EXPENSES THAN THE PREVIOUS CLASS
C SHARE.
**SINCE INCEPTION (2/01/96).
/dollar sign/ FEES AND EXPENSES
The following table describes the fees and expenses that you may pay if you buy
and hold shares of the fund.
================================================================================
SHAREHOLDER FEES (fees paid directly from your investment)
Class of Shares
A B C M
- --------------------------------------------------------------------------------
Maximum sales charge (load)
imposed on purchases
(AS A % OF OFFERING PRICE) 5.50% None None 1.00%
Maximum deferred sales charge (load) None(a) 5.00% None 1.00%(b)
(AS A PERCENTAGE OF PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LOWER)
================================================================================
ANNUAL FUND OPERATING EXPENSES (d) (expenses that are deducted from fund assets)
% OF AVERAGE DAILY NET ASSETS Class of Shares
A B C M
- --------------------------------------------------------------------------------
Management fees (e) 0.80% 0.80% 0.80% 0.80%
Distribution and service (12b-1) fees 0.35% 1.00% 1.00% 0.90%
Other expenses 1.09% 1.09% 1.09% 1.09%
-------------------------------
TOTAL ANNUAL FUND OPERATING EXPENSES 2.24% 2.89% 2.89% 2.79%
EXPENSE REDUCTION (c) 0.69% 0.69% 0.69% 0.69%
-------------------------------
NET OPERATING EXPENSES 1.55% 2.20% 2.20% 2.10%
- --------------------------------------------------------------------------------
(a) Certain purchases of Class A shares in amounts greater than $1 million are
subject to a 1% contingent deferred sales charge for 24 months after
purchase.
(b) Purchases of Class M shares are subject to a 1% contingent deferred sales
charge if redeemed within 18 months of purchase.
(c) Contractual arrangement with Idex Management, Inc. through 11/1/2000.
(d) Annual fund operating expenses are estimated based on the fund's expenses
for the fiscal year ended 10/31/98. (e) Effective March 1, 1999, management
fees were reduced from 1.00% to 0.80%.
A $10 fee will be charged twice a year for an account opened for more than 2
years with a balance below the share class minimum because of redemptions.
================================================================================
EXAMPLE
This example is here to help you compare the cost of investing in this fund with
that of other mutual funds. It shows the cumulative expenses you'd pay if you
invested $10,000 and held your shares for various time periods, with a 5% annual
return and operating expenses remaining the same. This return is for
illustration purposes and is not guaranteed. Actual costs may be higher or
lower.
If the shares are redeemed at the end of each period:
Share Class 1 year 3 years 5 years 10 years
- --------------------------------------------------------------------------------
A $699 $1,149 $1,624 $2,932
B* $723 $1,130 $1,563 $3,007
C $223 $ 830 $1,463 $3,165
M $410 $ 892 $1,499 $3,138
- --------------------------------------------------------------------------------
If the shares are not redeemed:
Share Class 1 year 3 years 5 years 10 years
- --------------------------------------------------------------------------------
A $699 $1,149 $1,624 $2,932
B* $223 $ 830 $1,463 $3,007
C $223 $ 830 $1,463 $3,165
M $311 $ 892 $1,499 $3,138
- --------------------------------------------------------------------------------
*EXAMPLES FOR CLASS B SHARES ASSUME THEY WILL CONVERT TO CLASS A SHARES EIGHT
YEARS AFTER YOU PURCHASE THEM.
37
<PAGE>
EXPLANATION OF STRATEGIES AND RISKS
HOW TO USE THIS SECTION
In the discussions of the individual funds on pages 2 through 37, you found
descriptions of the principal strategies and risks associated with each. In
those pages, you were referred to this section for a more complete description
of the risks of both principal and non-principal investments. For best
understanding, first read the description of the fund you are interested in.
Then refer to this section and read about the risks particular to that fund. For
even more discussions of strategies and risks, see the SAI, which is available
upon request. See the back cover of this prospectus for information on how to
order the SAI.
/chess piece/ DIVERSIFICATION.
The 1940 Act classifies investment companies as either diversified or
non-diversified.
Diversification is the practice of spreading a fund's assets over a number of
issuers to reduce risk. A non-diversified fund has the ability to take larger
positions in fewer issuers. Because the appreciation or depreciation of a single
security may have a greater impact on the net asset value of a non-diversified
fund, its share price can be expected to fluctuate more than a diversified fund.
All of the funds (except IDEX Salomon All Cap and IDEX JCC Capital Appreciation)
qualify as diversified funds under the 1940 Act. The diversified funds are
subject to the following diversification requirements (which are set forth in
full in the SAI):
[ ] As a fundamental policy, with respect to 75% of the total assets of a fund,
the fund may not own more than 10% of the outstanding voting shares of any
issuer (other than U.S. government securities) as defined in the 1940 Act
and, with respect to some funds, in other types of cash items.
[ ] As a fundamental policy with respect to 75% of the total assets of a fund,
the fund will not purchase a security of any issuer if such would cause the
portfolio's holdings of that issuer to amount to more than 5% of the fund's
total assets.
IDEX Salomon All Cap and IDEX JCC Capital Appreciation each reserves the right
to become a diversified investment company (as defined by the 1940 Act).
/chess piece/ CONCENTRATION.
As a fundamental policy governing concentration, no fund will invest more than
25% of its total assets in any one particular industry, other than U.S.
government securities. As an operating policy, no fund will invest 25% of its
total assets in any one particular industry, other than U.S. government
securities.
/warning sign/ INVESTING IN COMMON STOCKS. Many factors cause common stocks to
go up and down in price. A major one is the financial performance of the company
that issues the stock. Other factors include the overall economy, conditions in
a particular industry, and monetary factors like interest rates. When your fund
holds stocks, there's a risk that some or all of them may be down in price when
you choose to sell fund shares, causing you to lose money. This is called MARKET
RISK.
/warning sign/ INVESTING IN PREFERRED STOCKS. Because these stocks come with a
promise to pay a stated dividend, their price depends more on the size of the
dividend than on the company's performance. But if a company fails to pay the
dividend, its preferred stock is likely to drop in price. Changes in interest
rates can also affect their price. (See "Investing in Bonds," below.)
/warning sign/ INVESTING IN "CONVERTIBLES," PREFERRED STOCKS, AND BONDS. Since
preferred stocks and corporate bonds pay a stated return, their prices usually
do not depend on the price of the company's common stock. But some companies
issue preferred stocks and bonds that are convertible into their common stocks.
Linked to the common stock in this way, convertible securities go up and down in
price as the common stock does, adding to their market risk.
/warning sign/ VOLATILITY. The more an investment goes up and down in price, the
more volatile it is said to be. Volatility increases the market risk because
even though your fund may go up more than the market in good times, it may also
go down more than the market in bad times. If you decide to sell when a volatile
fund is down, you could lose more.
/warning sign/ INVESTING IN BONDS. Like common stocks, bonds fluctuate in value,
though the factors causing this are different, including:
[ ] CHANGES IN INTEREST RATES. Bond prices tend to move the opposite of
interest rates. Why? Because when interest rates on new bond issues go up,
rates on existing bonds stay the same and they become less desirable. When
rates go down, the reverse happens. This is also true for most preferred
stocks and some convertibles.
[ ] LENGTH OF TIME TO MATURITY. When a bond matures, the issuer must pay the
owner its face value. If the maturity date is a long way off, many things
can affect its value, so a bond is more volatile the farther it is from
maturity. As that date approaches, fluctuations usually become smaller and
the price gets closer to face value.
[ ] DEFAULTS. All bond issuers make at least two promises: (1) to pay interest
during the bond's term and (2) to return principal when it matures. If an
issuer fails to keep one or both of these promises, the bond will probably
drop in price dramatically, and may even become worthless.
[ ] DECLINES IN RATINGS. At the time of issue, most bonds are rated by
professional rating services, such as Moody's and S&P. The stronger the
financial backing behind the bond, the higher the rating. If this backing
is weakened or lost, the rating service may downgrade the bond's rating.
This is virtually certain to cause the bond to drop in price.
[ ] LOW RATING. High-yield/high-risk securities (commonly known as "junk
bonds") have greater credit risk, are more sensitive to interest rate
movements, are considered more speculative, have a greater vulnerability to
economic changes and are less liquid.
38
<PAGE>
[ ] LACK OF RATING. Some bonds are considered speculative, or for other reasons
are not rated. Such bonds must pay a higher interest rate in order to
attract investors. They're considered riskier because of the higher
possibility of default or loss of liquidity.
[ ] LOSS OF LIQUIDITY. If a bond is downgraded, or for other reasons drops in
price, the market demand for it may "dry up." In that case, the bond may be
hard to sell or "liquidate" (convert to cash).
Please see Appendix A for a description of ratings.
/warning sign/ INVESTING IN FOREIGN SECURITIES. Foreign securities are
investments offered by non-U.S. companies, governments and government agencies.
They involve risks not usually associated with U.S. securities, including:
[ ] CHANGES IN CURRENCY VALUES. Foreign securities are sold in currencies other
than U.S. dollars. If a currency's value drops, the value of your fund
shares could drop too, even if the securities are strong. Dividend and
interest payments may be lower. Factors affecting exchange rates are:
differing interest rates among countries; balances of trade; amount of a
country's overseas investments; and any currency manipulation by banks.
[ ] CURRENCY SPECULATION. The foreign currency market is largely unregulated
and subject to speculation.
[ ] CURRENCY TRADING COSTS. Some funds also invest in American Depository
Receipts (ADRs) and American Depository Shares (ADSs). They represent
securities of foreign companies traded on U.S. exchanges, and their values
are expressed in U.S. dollars. Changes in the value of the underlying
foreign currency will change the value of the ADR or ADS. The fund incurs
costs when it converts other currencies into dollars, and vice-versa.
[ ] EURO CONVERSION. On January 1, 1999, certain participating countries in the
European Economic Monetary Union adopted the "Euro" as their official
currency. Other EU member countries may convert to the Euro at a later
date. As of January 1, 1999, governments in participating countries are
issuing debt and redenominate existing debt in Euros; corporations may
choose to issue stocks or bonds in Euros or national currency. The new
European Central Bank, (the "ECB") will assume responsibility for a uniform
monetary policy in participating countries. Euro conversion risks that
could affect a fund's foreign investments include: (1) the readiness of
Euro payment, clearing, and other operational systems; (2) the legal
treatment of debt instruments and financial contracts in existing national
currencies rather than the Euro; (3) exchange-rate fluctuations between the
Euro and non-Euro currencies during the transition period of January 1,
1999 through December 31, 2001 and beyond; (4) potential U.S. tax issues
with respect to fund securities; and (5) the ECB's ability to manage
monetary policies among the participating countries.
[ ] DIFFERING ACCOUNTING AND REPORTING PRACTICES. Foreign tax laws are
different, as are laws, practices and standards for accounting, auditing
and reporting data to investors.
[ ] LESS INFORMATION AVAILABLE TO THE PUBLIC. Foreign companies usually make
far less information available to the public.
[ ] LESS REGULATION. Securities regulations in many foreign countries are more
lax than in the U.S.
[ ] More complex negotiations. Because of differing business and legal
procedures, a fund might find it hard to enforce obligations or negotiate
favorable brokerage commission rates.
[ ] LESS LIQUIDITY/MORE VOLATILITY. Some foreign securities are harder to
convert to cash than U.S. securities, and their prices may fluctuate more
dramatically.
[ ] SETTLEMENT DELAYS. "Settlement" is the process of completing payment and
delivery of a securities transaction. In many countries, this process takes
longer than it does in the U.S.
[ ] HIGHER CUSTODIAL CHARGES. Fees charged by the fund's custodian for holding
shares are higher for foreign securities than those of domestic securities.
[ ] VULNERABILITY TO SEIZURE AND TAXES. Some governments can seize assets. They
may also limit movement of assets from the country. Fund interest,
dividends and capital gains may be subject to foreign withholding taxes.
[ ] POLITICAL INSTABILITY AND SMALL MARKETS. Developing countries can be
politically unstable. Economies can be dominated by a few industries, and
markets may trade a small number of securities. Regulation of banks and
capital markets can be weak.
[ ] DIFFERENT MARKET TRADING DAYS. Foreign markets may not be open for trading
the same days as U.S. markets are open and asset values can change before
your transaction occurs.
[ ] HEDGING. A fund may enter into forward currency contracts to hedge against
declines in the value of securities denominated in, or whose value is tied
to, a currency other than the U.S. dollar or to reduce the impact of
currency fluctuation on purchases and sales of such securities.
39
<PAGE>
[ ] EMERGING MARKET RISK. Investing in the securities of issuers located in or
principally doing business in emerging markets bear foreign exposure risks
as discussed above. In addition, the risks associated with investing in
emerging markets are often greater than investing in developed foreign
markets. Specifically, the economic structures in emerging market countries
are less diverse and mature than those in developed countries, and their
political systems are less stable. Investments in emerging market countries
may be affected by national policies that restrict foreign investments.
Emerging market countries may have less developed legal structures, and the
small size of their securities markets and low trading volumes can make
investments illiquid and more volatile than investments in developed
countries. As a result, a fund investing in emerging market countries may
be required to establish special custody or other arrangements before
investing.
/warning sign/ INVESTING IN FUTURES, OPTIONS AND DERIVATIVES. Besides
conventional securities, your fund may seek to increase returns by investing in
financial contracts related to its primary investments. Such contracts involve
additional risks and costs. Risks include:
[ ] INACCURATE MARKET PREDICTIONS. If the sub-adviser is wrong in its
expectation, for example, with respect to interest rates, securities prices
or currency markets, the contracts could produce losses instead of gains.
[ ] PRICES MAY NOT MATCH. Movements in the price of the financial contracts
may be used to offset movements in the price of other securities you own.
If those prices don't correlate or match closely, the benefits of the
transaction might be diminished.
[ ] ILLIQUID MARKETS. If there is no market for the contracts, the fund may not
be able to control losses.
[ ] TAX CONSEQUENCES. Sometimes the possibility of incurring high taxes on a
transaction may delay closing out a position and limit the gains it would
have produced.
[ ] FORWARD FOREIGN CURRENCY CONTRACTS
/warning sign/ INVESTING IN FORWARD FOREIGN CURRENCY CONTRACTS. A forward
foreign currency contract is an agreement between contracting parties to
exchange an amount of currency at some future time at an agreed upon rate. These
contracts are used as a hedge against fluctuations in foreign exchange rates.
Hedging against a decline in the value of a currency does not eliminate
fluctuations in the prices of securities, or prevent losses if the prices of the
fund's securities of decline.
Such hedging transactions preclude the opportunity for gain if the value of the
hedging currency should rise. Forward contracts may, from time to time, be
considered illiquid, in which case they would be subject to the fund's
limitations on investing in illiquid securities.
/warning sign/ STOCK INDEX FUTURES. Futures involve additional investment risks
and transactional costs, and draw upon skills and experience which are different
than those needed to pick other securities. Special risks include:
[ ] inaccurate market predictions
[ ] imperfect correlation
[ ] illiquidity
[ ] tax considerations
/warning sign/ INVESTING IN TAX-EXEMPT SECURITIES. Some municipal obligations
pay interest that, while tax-exempt, may be considered a "preference item" for
determining the federal alternative minimum tax. This may result in your paying
more tax than you would have otherwise. Also, Congress periodically threatens to
limit or do away with the tax exemption on municipal obligations. If that
happened, it could substantially reduce the value of your fund's assets
/warning sign/ INVESTING IN SPECIAL SITUATIONS. Each fund may invest in "special
situations" from time to time. Special situations arise when, in the opinion of
a fund manager, a company's securities may be undervalued, then increase
considerably in price, due to:
[ ] A NEW PRODUCT OR PROCESS
[ ] A MANAGEMENT CHANGE
[ ] A TECHNOLOGICAL BREAKTHROUGH
[ ] AN EXTRAORDINARY CORPORATE EVENT
[ ] A TEMPORARY IMBALANCE IN THE SUPPLY OF, AND DEMAND FOR, THE SECURITIES OF
AN ISSUER
Investing in a special situation carries an additional risk of loss if the
expected development does not happen or does not attract the expected attention.
The impact of special situation investing to a fund will depend on the size of
the fund's investment in a situation.
/warning sign/ PORTFOLIO TURNOVER. A fund may engage in a significant number of
short-term transactions, which may lower fund performance. High turnover rate
will not limit a manager's ability to buy or sell securities for these funds,
although certain tax rules may restrict a fund's ability to sell securities when
the security has been held for less than three months. Increased turnover (100%
or more) results in higher brokerage costs or mark-up charges for a fund. The
funds ultimately pass these charges on to shareholders. Short-term trading may
also result in short-term capital gains, which are taxed as ordinary income to
shareholders. IDEX Alger Aggressive Growth, IDEX JCC Capital Appreciation and
IDEX C.A.S.E. Growth had turnover rates greater than 100% for the fiscal year
ended October 31, 1998.
/warning sign/ INVESTMENT STRATEGIES. A fund is permitted to use other
securities and investment strategies in pursuit of its investment objective,
subject to limits established by the Fund's Board of Trustees. No fund is under
any obligation to use any of the techniques or strategies at any given time or
under any particular economic condition. Certain instruments and investment
strategies may expose the funds to other risks and considerations, which are
discussed in the Fund's SAI.
/chess piece/ GEI SHORT-TERM INVESTMENT FUND. The IDEX GE/Scottish Equitable
International Equity fund may invest in money market instruments directly or
indirectly through investment in the GEI Short-Term Investment Fund (Investment
Fund). The Investment Fund is advised by GEIM; GEIM charges no advisory fee to
the Investment Fund.
40
<PAGE>
/question mark/ HOW THE IDEX FUNDS ARE MANAGED AND ORGANIZED
IDEX Mutual Funds is run by a Board of Trustees.
The assets of each fund are managed by an investment adviser, who in turn
selects sub-advisers, who have hired fund managers. All such advisers to the
funds are supervised by the Board of Trustees. You can find information about
the Trustees and officers of the Fund in the SAI.
IDEX MANAGEMENT, INC. (IMI), located at 570 Carillon Parkway, St. Petersburg,
Florida 33716, serves as investment adviser to the Fund. Prior to March 1, 1999
InterSecurities, Inc. (ISI) served as INVESTMENT ADVISER to IDEX Alger
Aggressive Growth, IDEX AEGON Income Plus, IDEX AEGON Tax Exempt, IDEX AEGON
GE/Scottish Equitable International Equity, IDEX Dean Asset Allocation, IDEX
LKCM Strategic Total Return, IDEX NWQ Value Equity and IDEX C.A.S.E. Growth
funds.
The investment adviser hires sub-advisers to furnish investment advice and
recommendations and has entered into sub-advisory agreements with each
sub-adviser. The investment adviser also monitors the sub-advisers' buying and
selling of securities and administration of the funds. For these services, it is
paid an advisory fee. This fee is based on the average daily net assets of each
fund, and is paid at the rates shown in the table below.
IMI is a wholly-owned direct subsidiary of AUSA Holding Company ("AUSA"). AUSA
is a holding company which is wholly-owned by AEGON USA, Inc. ("AEGON USA"), a
financial services holding company whose primary emphasis is on life and health
insurance, and annuity and investment products. AEGON USA is a wholly-owned
indirect subsidiary of AEGON N.V., a Netherlands corporation and publicly traded
international insurance group.
HERE IS A LISTING OF THE SUB-ADVISERS AND THE FUNDS THEY MANAGE:
- ----------------------------------------------------------------
SUB-ADVISER FUND NAME
JCC IDEX JCC Growth
IDEX JCC Global
IDEX JCC Balanced
IDEX JCC Capital Appreciation
IDEX JCC Flexible Income
T. Rowe Price IDEX T. Rowe Price Dividend Growth
IDEX T. Rowe Price Small Cap
GSAM IDEX Goldman Sachs Growth
SBAM IDEX Salomon All Cap
Alger IDEX Alger Aggressive Growth
Pilgrim Baxter IDEX Pilgrim Baxter Mid Cap Growth
AIMI IDEX AEGON Income Plus
IDEX AEGON Tax Exempt
SEIM IDEX GE/Scottish Equitable International Equity
GEIM IDEX GE/Scottish Equitable International Equity
Dean IDEX Dean Asset Allocation
Luther King IDEX LKCM Strategic Total Return
NWQ IDEX NWQ Value Equity
C.A.S.E. IDEX C.A.S.E. Growth
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ADVISORY FEE SCHEDULE-ANNUAL RATES
- -------------------------------------------------------------------------------------------------------------------------
JCC* JCC JCC* JCC* JCC** AEGON AEGON
AVERAGE DAILY NET ASSETS CAPITAL APPRECIATION GLOBAL GROWTH BALANCED FLEXIBLE INCOME INCOME PLUS TAX EXEMPT
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
First $750 million 1.00% 1.00% 1.00% 1.00% N/A 0.60% 0.60%
- -------------------------------------------------------------------------------------------------------------------------
the next $250 million 0.90% 0.90% 0.90% 0.90% N/A 0.60% 0.60%
- -------------------------------------------------------------------------------------------------------------------------
over $1 billion 0.85% 0.85% 0.85% 0.85% N/A 0.60% 0.60%
- -------------------------------------------------------------------------------------------------------------------------
First $100 million 0.90%
- -------------------------------------------------------------------------------------------------------------------------
the next $150 million 0.80%
- -------------------------------------------------------------------------------------------------------------------------
over $250 million 0.70%
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
*IMI has agreed to waive a portion of its advisory fee through 6/30/2000 for
this fund as follows: 0.0250% of average daily net assets from $100 - $500
million (net 0.9750%); 0.0750% of assets from $500 - $750 million (net 0.9250%);
0.0250% of assets from $750 million - $1 billion (net 0.8750%); and 0.0250% of
assets above $1 billion (net 0.8250%).
**For IDEX JCC Flexible Income, IMI has agreed to waive a portion of its
advisory fee through 6/30/2000 as follows: 0.0250% of the first $100 million of
average daily net assets (net 0.8750%); 0.0250% of assets from $100 - $250
million (net 0.7750%); and 0.0250% of assets above $250 million (net 0.6750%).
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
T. ROWE PRICE GOLDMAN PILGRIM BAXTER ALGER
AVERAGE DAILY DIVIDEND T. ROWE PRICE SALOMON SACHS MID CAP AGGRESSIVE
NET ASSETS GROWTH SMALL CAP ALL CAP GROWTH GROWTH GROWTH
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
First $500 million 0.80% 0.80% 0.80% 0.80% 0.80% 0.80%
- -------------------------------------------------------------------------------------------------------------
over $500 million 0.70% 0.70% 0.70% 0.70% 0.70% 0.70%
- -------------------------------------------------------------------------------------------------------------
<CAPTION>
- ----------------------------------------------------------------------------------------------
GE/SCOTTISH
EQUITABLE NWQ LKCM
AVERAGE DAILY INTERNATIONAL C.A.S.E. VALUE STRATEGIC DEAN
NET ASSETS EQUITY GROWTH EQUITY TOTAL RETURN ASSET ALLOCATION
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
First $500 million 0.80% 0.80% 0.80% 0.80% 0.80%
- ----------------------------------------------------------------------------------------------
over $500 million 0.70% 0.70% 0.70% 0.70% 0.70%
- ----------------------------------------------------------------------------------------------
</TABLE>
41
<PAGE>
Day-to-day management of the investments in each fund is the responsibility of
the fund manager. The fund managers for IDEX Mutual Funds are:
IDEX T. ROWE PRICE SMALL CAP
RICHARD T. WHITNEY, CFA, has managed this fund since inception and heads the
Investment Team for this fund. He joined T. Rowe Price in 1985.
IDEX JCC CAPITAL APPRECIATION
JAMES P. GOFF has managed this fund since its inception. He joined JCC in 1988.
IDEX PILGRIM BAXTER MID CAP GROWTH
JEFFREY A. WRONA, CFA, has managed this fund since inception. Prior to joining
Pilgrim Baxter in 1997, he was a senior portfolio manager at Munder Capital
Management.
IDEX ALGER AGGRESSIVE GROWTH
DAVID D. ALGER has been employed by Alger since 1971 and has served as president
since 1995. He has managed this fund since inception.
DAVID HYUN has served as co-manager of this fund since February 1998. He has
been employed by Alger as a senior research analyst since 1991 and a portfolio
manager since 1997.
IDEX GE/SCOTTISH EQUITABLE INTERNATIONAL EQUITY
At SEIM, investment strategy is formulated by the Investment Strategy Group.
RUSSELL HOGAN leads the investment strategy team. Mr. Hogan is the Investment
Director of Scottish Equitable plc, parent company of SEIM. He oversees all
aspects of asset management. He has been with SEIM for 14 years and has been the
team leader since the fund's inception.
At GEIM, RALPH R. LAYMAN is a director and executive vice president and leads a
team of fund managers. Mr. Layman has served in this capacity since the fund's
inception. Mr. Layman joined GEIM in 1991 as executive vice president for
international investments.
IDEX JCC GLOBAL
HELEN YOUNG HAYES has been employed by JCC since 1987 and has managed this fund
since its inception.
IDEX SALOMON ALL CAP
ROSS S. MARGOLIES, has managed this fund since inception. Mr. Margolies joined
SBAM in 1992.
ROBERT M. DONAHUE, JR. assists in the day-to-day management of the fund. Prior
to joining SBAM in 1997, Mr. Donahue worked as an equity analyst at Gabelli &
Company.
IDEX JCC GROWTH
SCOTT W. SCHOELZEL and EDWARD KEELY serve as co-managers of this fund. Mr.
Schoelzel has managed this fund since January 1996. Before that, he was
co-manager of this fund since 1995. He has been employed by JCC since 1994. From
1991 to 1993, Mr. Schoelzel was a portfolio manager with Founders Asset
Management, Denver, CO.
Mr. Keely has managed this fund since January, 1999. He has been employed by JCC
since 1998. Prior to joining JCC, he was a senior vice president of investments
at Founders.
IDEX GOLDMAN SACHS GROWTH
HERBERT E. EHLERS, has served as head of a six person investment team that has
managed this fund since inception. Prior to joining GSAM in 1997, he was chief
investment officer at Liberty Investment Management, Inc. from 1994-1997.
IDEX C.A.S.E. GROWTH
This fund is managed by a team of professionals, called the Portfolio Management
Committee. WILLIAM E. LANGE is the head manager on this committee. He has been
president of C.A.S.E. since 1984.
IDEX NWQ VALUE EQUITY
EDWARD C. FRIEDEL, CFA, has been the senior manager of this fund since
inception. He has been a managing director and investment strategist with NWQ
since 1983.
IDEX T. ROWE PRICE DIVIDEND GROWTH
WILLIAM J. STROMBERG, CFA, has managed this fund since inception and heads the
Investment Team for this fund. He joined T. Rowe Price in 1986.
IDEX DEAN ASSET ALLOCATION
JOHN C. RIAZZI, CFA, has been senior manager of this fund since inception. He
joined Dean in 1989.
IDEX LKCM STRATEGIC TOTAL RETURN
LUTHER KING, JR. , CFA, and SCOT C. HOLLMANN, CFA, have co-managed this fund
since its inception. Mr. King has been the president of Luther King since 1979.
Mr. Hollmann has been a vice president since 1983.
IDEX JCC BALANCED
BLAINE P. ROLLINS assisted in the management of this fund from its inception
until February 1996, when he was named fund manager. He has been with JCC since
1990.
IDEX JCC FLEXIBLE INCOME
RONALD V. SPEAKER has managed this fund since October 1993. He has been with JCC
since 1986. On January 13, 1997, Mr. Speaker settled an SEC administrative
action involving two personal trades that he made in January 1993. Without
admitting or denying the allegations, he agreed to civil monetary penalty,
disgorgement and interest payments totaling $37,199 and a 90-day suspension
starting January 29, 1997.
42
<PAGE>
IDEX AEGON INCOME PLUS
DAVID R. HALFPAP, CFA, has served as manager of this fund since its inception.
He has been employed by AIMI since 1975 and currently is a senior vice
president.
BRADLEY J. BEMAN, CFA, became a co-manager of this fund in August 1998. He
joined AIMI in 1988 after working in various capacities with AEGON USA, Inc. and
Life Investors Insurance Company of America.
CRAIG M. ENRIGHT became a co-manager of this fund in August 1998. He joined AIMI
in 1996. His prior work experience includes ten years with the Chicago Board of
Trade, two years with the Securities Corporation of Iowa and five years at
Northern Trust Company.
IDEX AEGON TAX EXEMPT
Jarrell D. Frey, CFA, is a senior securities analyst and has managed this fund
since August 1998. Mr Frey joined AIMI in June 1994. Prior to joining AIMI, Mr.
Frey was employed for five years by Woodmen Accident and Life Company in
Lincoln, NE.
43
<PAGE>
SHAREHOLDER INFORMATION
- --------------------------------------------------------------------------------
/question mark/ OPENING AN ACCOUNT
If you are opening a fund through a registered representative, he or she can
assist you with all phases of your investment.
If you are investing through an authorized dealer, the dealer is responsible for
opening your account and providing your taxpayer ID number. If you already have
an IDEX account, you do not need additional documentation.
The Fund or its agents may reject a request for purchase of shares at any time,
including any purchase under the exchange privilege.
NEW ACCOUNT APPLICATION
Fill out the New Account Application form which is included in this prospectus.
IRAs and other retirement accounts require a different application, which you
can request by calling 1-888-233-IDEX (4339) or writing IDEX Customer Service.
You can avoid future inconvenience by signing up for any services you think you
may later use.
Note: On your application, be sure to include your social security number or
taxpayer identification number. If you don't, your account may be subject to
backup withholding, or be closed.
There are many ways that you can pay for your shares. The minimum initial
purchase is $500 for Class A, B and T shares, and $1,000 for Class C and Class M
shares and shares purchased through authorized dealers. There is a $50 minimum
on additional purchases. Purchases through regular investment plans, like the
Automatic Investment Plan, have no minimum to open an account, but you must
invest at least $50 monthly per account.
/question mark/ SHARE TRANSACTIONS
Depending on privileges established on your account, you may buy, sell or
exchange shares in several ways. You may do so in writing, by phone request or
you may access your account through the internet. You may make payments, or
receive payment for your redemptions, via an electronic funds transfer or by
check.
/question mark/ HOW TO SELL SHARES
Your request to sell your shares and receive payment may be affected by:
[ ] the privileges or features established on your account
[ ] the type of account you have, and if there is more than one owner
[ ] the dollar amount you are requesting
[ ] if there have been recent changes made to your account (such as an
address change) or other circumstances that may require a written
request or signature guarantees
There are several ways to request redemption of your shares:
[ ] in writing (by mail or fax)
[ ] by internet access to your account(s) at www.idexfunds.com
[ ] by telephone request using our touch-tone automated system, IDEX
InTouch(SM), or by a person-to-person verbal request
The proceeds of your redemption may be paid by check, or by direct deposit to
your bank account subject to any restrictions that may be applicable. All
purchases must be held at IDEX for 15 calendar days before they are eligible for
redemption.
/question mark/ HOW TO EXCHANGE SHARES
You can exchange $500 or more of one fund for shares in the same class of
another fund. As explained below, you may be able to exchange your shares into
any one of the three portfolios of the Cash Equivalent Fund (CEF) without a
sales charge. Any CDSC will be calculated from the date you bought your original
shares. This means your new shares will be the same age as your old shares, so
your sales charge will not increase because of the exchange. The minimum
exchange to a new account is $500 unless an automatic investment plan is
established on the new account.
Prior to making exchanges into a fund that you do not own, read this prospectus
carefully. You can request share exchanges over the telephone unless you have
declined the privilege on your application. You can also exchange shares of the
same class automatically at regular intervals, from one fund to another.
MONEY MARKET EXCHANGE PRIVILEGE
You can exchange Class A, C and T shares for any of the three CEF portfolios.
You may exchange Class B and M shares only into the CEF's Money Market
Portfolio.
SPECIAL RULES FOR CLASS B OR M SHARES IN MONEY MARKET FUND EXCHANGES
When exchanging Class B or M shares for shares of the CEF Money Market
Portfolio, you will not be charged a CDSC. If you later sell the Class B or M
shares of the CEF, you will be charged the sales charge, but the time that you
held those Class B or M shares of the CEF will not count toward calculating the
sales charge.
The Fund may restrict the number of times that you may exchange your shares.
Please see the section below titled "Excessive Trading."
SPECIAL SITUATIONS FOR EXCHANGING SHARES
[ ] Class T shares may be exchanged for only Class A shares of any IDEX fund,
other than IDEX JCC Growth. Class A shares of all IDEX funds are subject to
distribution and service (12b-1) fees.
[ ] You may not exchange other classes of shares of the IDEX funds for Class T
shares.
44
<PAGE>
[ ] The Fund reserves the right to modify or terminate the exchange privilege
at any time.
EXCESSIVE TRADING
The Fund does not permit excessive trading (market-timing). Excessive purchases,
redemptions or exchanges of fund shares can disrupt portfolio management and
drive fund expenses higher. If you make more than four exchanges in a calendar
quarter, you are considered to be trading excessively and the Fund or its agents
may limit or terminate your exchange privileges, and/or not accept future
investments from you. Frequent purchases and redemptions of shares having
similar effects as exchanges may be considered excessive trading.
/question mark/ OTHER ACCOUNT INFORMATION
MINIMUM PURCHASES
[ ] $500 for Class A, B and T shares; $1,000 for Class C and M shares;
additional purchases are a minimum of $50.
If your check, draft or electronic transfer is returned unpaid by your bank, the
Fund may charge a $15 fee.
PRICING OF SHARES
Price is calculated on each day the New York Stock Exchange (NYSE) is open for
business. The share price of each class is calculated by dividing its net assets
less liabilities by the number of its shares outstanding.
If the Fund receives your order by closing time of the NYSE (usually 4 p.m.
EST), you will pay or receive that day's NAV plus any applicable sales charges.
If later, it will be priced based on the next day's NAV. Share prices may change
when a fund holds shares in companies traded on foreign exchanges that are open
on days the NYSE is closed.
In determining NAV, each fund's portfolio investments are valued at market
value. Investments for which quotations are not readily available are valued at
fair value determined in good faith under the supervision of the Board of
Trustees.
MINIMUM ACCOUNT BALANCE
The Fund will provide a 60-day notification to you prior to assessing a minimum
account fee, or closing, any account. The following describes the fees assessed
to accounts with low balances:
No fees will be charged on:
[ ] accounts opened within the preceding 24 months
[ ] accounts with an active monthly Automatic Investment Plan ($50 minimum per
account)
[ ] accounts owned by individuals which, combined, have a balance of $10,000 or
more
- --------------------------------------------------------------------------------
ACCOUNT BALANCE
- --------------------------------------------------------------------------------
If your balance is below $500 due to redemptions (Class A, B & T shares) ($1,000
for Class C & M shares)
If your balance is below $250, due to redemptions
- --------------------------------------------------------------------------------
FEE ASSESSMENT
- --------------------------------------------------------------------------------
$10 fee assessed every 6 months, until balance reaches $500 for Class A, B & T
and $1,000 for Class C & M shares
Your account will be charged a fee and be liquidated; any applicable CDSC will
be deducted, and a check will be mailed
45
<PAGE>
TELEPHONE TRANSACTIONS
The Fund, InterSecurities, Inc. (ISI) and Idex Investor Services, Inc. (IIS) are
not liable for complying with telephone instructions which are deemed by them to
be genuine. The Fund, ISI and IIS will employ reasonable procedures to make sure
telephone instructions are genuine. In situations where the Fund, ISI or IIS
reasonably believe they were acting on genuine telephone instructions, you bear
the risk of loss. These procedures may include requiring personal
identification, providing written confirmation of transactions, and tape
recording conversations. The Fund has the right to modify the telephone
redemption privilege at any time.
Telephone redemption with payment by check is not allowed within 10 days of a
change of registration/address. Call IDEX Customer Service (1-888-233-IDEX
(4339)) or see the SAI for details. You may redeem up to $50,000 worth of shares
by phone and get your money by direct deposit to a pre- authorized bank account.
No fee is charged.
WIRE TRANSACTIONS
In most cases, the Fund can send your redemption money via a federal funds bank
wire. The Fund charges a $10 fee for this service, in addition to any fee your
bank may charge. For more details, call IDEX Customer Service (1-888-233-IDEX
(4339)) or see the SAI.
REINVESTMENT PRIVILEGE
Within a 90 day period after you sell your shares, you have the right to
"reinvest" your money in any fund of the same class. You will not incur a new
sales charge if you use this privilege within the allotted time frame. Any CDSC
you paid on your shares will be credited to your account. You may reinvest the
proceeds of a Class B share sale (less the CDSC) in Class A shares without
paying the up-front sales charge. Send your written request to the Fund along
with your check for your reinvestment privileges.
STATEMENTS AND REPORTS
The Fund will send you a confirmation statement after every transaction that
affects your account balance or registration. If you are enrolled in the
Automatic Investment Plan and invest on a monthly basis, you will receive a
quarterly confirmation. Information about the tax status of income dividends and
capital gains distributions will be mailed to shareholders early each year.
Financial reports for the funds, which include a list of the holdings, will be
mailed twice a year to all shareholders.
A Historical Statement may be ordered for transactions of prior years.
SHARE CERTIFICATES
The majority of shareholders prefer their shares to be recorded on the Fund's
books and no certificates issued.
If you would like certificates representing your shares, call or write IDEX
Customer Service (1-888-233-IDEX (4339)) to request them. You may return share
certificates to the Fund for re-deposit at any time. If your share certificates
are lost or stolen, notify IDEX Customer Service immediately. There may be a
charge for canceling and replacing lost or stolen share certificates. Remember,
if you ask for a certificate for your shares, you will not be able to redeem or
exchange your shares by telephone. You will have to send your share certificates
to the Fund in order to redeem or exchange your shares. Share certificates can
be issued with the following limitations:
[ ] no certificates issued for fractional shares
[ ] no certificates issued for less than 30 shares
[ ] no certificates issued for retirement plan accounts with Investors
Fiduciary Trust as custodian
[ ] certificates are issued to the owner of the account on file
PERSONAL SECURITIES TRADING
The Fund permits "Access Persons" as defined by Rule 17j-1 under the 1940 Act to
engage in personal securities transactions, subject to the terms of the Code of
Ethics and Insider Trading Policy that has been adopted by the Board of Trustees
of the Fund. Access Persons must use the guidelines established by this Policy
for all personal securities transactions and are subject to certain prohibitions
on personal trading. The Fund's sub-advisers, pursuant to Rule 17j-1 and other
applicable laws, and pursuant to the terms of the Policy, must adopt and enforce
their own Code of Ethics and Insider Trading Policies appropriate to their
particular business needs. Each sub-adviser must report to the Board of Trustees
on a quarterly basis with respect to the administration and enforcement of such
Policy, including any violations thereof which may potentially affect the Fund.
/question mark/ DISTRIBUTIONS AND TAXES
Each of our funds intends to elect and qualify as a regulated investment company
under the Internal Revenue Code. As a regulated investment company, a fund will
not be subject to federal income tax on ordinary income and capital gains, if
any, that it distributes to its shareholders.
TAXES ON DISTRIBUTIONS FROM THE FUNDS
- -------------------------------------
The following summary does not apply to:
[ ] qualified retirement accounts
[ ] tax-exempt investors; or
46
<PAGE>
[ ] exempt-interest distributions from IDEX AEGON Tax Exempt
Fund distributions are taxable to you as ordinary income to the extent they are
attributable to a fund's net investment income, certain net realized foreign
exchange gains, and net short-term capital gains. They are taxable to you as
long-term capital gain (at the federal rate of 20%) to the extent they are
attributable to the fund's excess of net long-term capital gains over net
short-term capital losses. The tax status of any distribution is the same
regardless of how long you have been a shareholder of the fund and whether you
elect to reinvest distributions or receive cash. Certain distributions paid by a
fund in January may be taxable to shareholders as if they were received on the
prior December 31. The tax status of dividends and distributions for each
calendar year will be detailed in your annual tax statement or tax forms from
the Fund.
DISTRIBUTIONS FROM IDEX AEGON TAX EXEMPT
- ----------------------------------------
IDEX AEGON Tax Exempt expects to distribute primarily exempt-interest dividends.
These dividends will be exempt income for federal income tax purposes, whether
reinvested or received in cash. However, dividends from the fund may not be
entirely tax-exempt and any distributions by the fund of net long-term capital
gains will generally be taxable to you as long-term capital gains. Distributions
from the fund may be subject to state and local taxes.
Your annual statements will provide you with information about the
exempt-interest dividends you have received. You must disclose this information
on your federal tax return. The statement will also report the amount that
relates to private activity bonds which could be subject to the alternative
minimum tax (AMT). If you are subject to the AMT, please consult your tax
advisor regarding the implications of holding shares in IDEX AEGON Tax Exempt.
If you receive Social Security or railroad retirement benefits, please consult
your tax advisor and be aware that exempt-interest dividends will be considered
for the purpose of determining to what extent your benefits will be taxed.
Interest on indebtedness incurred by you to purchase or carry shares of IDEX
AEGON Tax Exempt generally will not be deductible for federal income tax
purposes.
TAXES ON THE SALE OF SHARES
- ---------------------------
Any sale or exchange or redemption of Fund shares may generate tax liability
(unless you are a tax-exempt investor or your investment is in a qualified
retirement or other tax- advantaged account). You will generally recognize
taxable gain or loss on a sale, exchange or redemption of your shares based upon
the difference between your cost (basis) in the shares and the amount you
receive for them. Any loss recognized on shares held for six months or less will
be treated as long-term capital loss to the extent of any capital gains
dividends that were received with respect to the shares.
If you receive an exempt-interest dividend on shares that are held by you for
six months or less, any loss on the sale or exchange of the shares will be
disallowed to the extent of such dividend amount.
WITHHOLDING TAXES
- -----------------
The Fund will be required to withhold 31% of any reportable income payments made
to a shareholder (which may include dividends, capital gains distributions, and
share redemption proceeds) if the shareholder has not provided an accurate
taxpayer identification number to the Fund in the manner required by IRS
regulations.
47
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
HOW TO BUY SHARES TO OPEN A NEW ACCOUNT (FIRST-TIME IDEX INVESTORS)
- --------------------------------------------------------------------------------------------
<S> <C>
BY MAIL Send your completed application and check payable to:
[GRAPHIC OMITTED] Idex Investor Services, Inc. P.O. Box 9015 Clearwater,
Florida 33758-9015; For Overnight Delivery: 570 Carillon
Parkway, St. Petersburg, Florida 33716
- --------------------------------------------------------------------------------------------
THROUGH AN AUTHORIZED DEALER The dealer is responsible for opening your account and
[GRAPHIC OMITTED] providing IDEX with your Taxpayer ID Number. The minimum
order from an authorized dealer is $1,000.
- --------------------------------------------------------------------------------------------
BY AUTOMATIC INVESTMENT PLAN Send your completed application, along with a check for
[GRAPHIC OMITTED] your initial investment, payable to Idex Investor
Services, Inc. P.O. Box 9015, Clearwater, Florida
33758-9015.
- --------------------------------------------------------------------------------------------
TO ADD TO YOUR EXISTING ACCOUNT
- --------------------------------------------------------------------------------------------
BY CHECK Make your check payable to Idex Investor Services Inc.
[GRAPHIC OMITTED] and mail it to:
P.O. Box 9015 Clearwater, FL 33758-9015; or, for
overnight delivery: 570 Carillon Parkway, St. Petersburg,
FL 33716. Third party checks, or checks endorsed to IDEX,
will not be accepted. All checks must be made payable to
Idex Investors Services, Inc.
- --------------------------------------------------------------------------------------------
BY AUTOMATIC INVESTMENT PLAN With an Automatic Investment Plan (AIP), a level dollar
[GRAPHIC OMITTED] amount is invested monthly and payment is deducted
electronically from your bank account. Call or write
IDEX Customer Service to establish an AIP.
- --------------------------------------------------------------------------------------------
BY TELEPHONE The electronic funds transfer privilege must be
[GRAPHIC OMITTED] established in advance, when you open your account, or by
adding this feature to your existing account. Select
"Electronic Bank Link" on the Application or write to the
Fund. Funds can then be transferred electronically from
your bank to the Fund. Call IDEX Customer Service to
invest by phone, either through our automated IDEX
InTouch(SM) system (1-888-233-IDEX (4339) ), or by
speaking directly with your representative. Shares will be
purchased via electronic funds when the money is received
by IDEX, usually 2-4 business days after the request.
- --------------------------------------------------------------------------------------------
THROUGH AUTHORIZED DEALERS If your dealer has already established your account for
[GRAPHIC OMITTED] you, no additional documentation is needed. Call your
dealer to place your order. The dealer's bank may charge
you for a wire transfer. (The Fund currently does not
charge for this service.) The Fund must receive your
payment within three business days after your order is
accepted.
- --------------------------------------------------------------------------------------------
BY THE INTERNET You may request a transfer of funds from your bank account
[GRAPHIC OMITTED] to the Fund. Visit our website at www.idexfunds.com.
Payment will be transferred from your bank account
electronically. Shares will be purchased via electronic
funds when the money is received by IDEX, usually 2-4
business days after the request.
- --------------------------------------------------------------------------------------------
BY PAYROLL DEDUCTION You may have money transferred regularly from your
[GRAPHIC OMITTED] payroll to your IDEX account. Please instruct your
employer's payroll department to do so. Call IDEX
Customer Service (1-888-233-IDEX (4339)) to establish
this deduction.
- --------------------------------------------------------------------------------------------
BY WIRE TRANSFER Request that your bank wire funds to the Fund. You must
have an existing account to make a payment by wire
transfer. Ask your bank to send your payment to:
NationsBank, NA, Tampa, FL, ABA# 063100277,
Credit: Idex Investors Services
Acct #: 3601194554, Ref: Shareholder name, IDEX fund
and account numbers.
- --------------------------------------------------------------------------------------------
</TABLE>
48
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
TO RECEIVE PAYMENT BY HOW TO REQUEST YOUR REDEMPTION
- --------------------------------------------------------------------------------------------
<S> <C>
DIRECT DEPOSIT - ACH Call IDEX Customer Service (1-888-233-IDEX (4339)) to
(ONLY FOR ACCOUNTS THAT ARE NOT verify that this feature is in place on your account.
QUALIFIED RETIREMENT PLANS) Maximum amount per day is the lesser of your balance or
[GRAPHIC OMITTED] $50,000. Request an "ACH redemption" in writing, by phone
(automated IDEX InTouch(SM) (1-888-233-IDEX (4339)) or
person-to-person), or by internet access to your account.
Payment should usually be received by your bank account
3-5 banking days after your request. The Fund does not
charge for this payment option. Certain IRAs and Qualified
Plans may not be eligible for ACH redemptions.
- --------------------------------------------------------------------------------------------
DIRECT DEPOSIT Call IDEX Customer Service (1-888-233-IDEX (4339) to be
(ELECTRONIC FUNDS TRANSFER- sure this feature is in place on your account. Maximum
FEDERAL FUNDS BANK WIRE) amount per day is the lesser of your available balance or
[GRAPHIC OMITTED] $50,000 (with a minimum of $1,000). Request an "Expedited
Wire Redemption" in writing, or by phone (person-to-person
request). Payment should be received by your bank account
the next banking day after your request. The Fund charges
$10 for this service. Your bank may charge a fee as well.
- --------------------------------------------------------------------------------------------
CHECK TO THE ADDRESS OF RECORD WRITTEN REQUEST:
[GRAPHIC OMITTED] Send a letter requesting a withdrawal to the Fund and
include any share certificates you may have. Specify the
fund, account number, and dollar amount or number of
shares you wish to redeem. Mail to: Idex Investor
Services, P.O. Box 9015, Clearwater, FL 33758-9015.
Attention: Redemptions. Be sure to include all account
owners' signatures and any additional documents, as well
as a signature guarantee(s) if required (see "How To
Sell Shares").
TELEPHONE OR INTERNET REQUEST:
If your request is not required to be in writing (see
"How To Sell Shares"), you may call IDEX Customer Service
(1-888-233-IDEX (4339)) and make your request using the
automated IDEX InTouch(SM) system (1-888-233-IDEX (4339)),
by person-to-person, or by accessing your account on the
internet. Maximum amount per day is the lesser of your
available balance or $50,000.
If an address change was made in the last 10 days, the
check will not be mailed until after the 10 day period
following the address change. To avoid this IDEX requires
a redemption request in writing signed and signature
guaranteed by all shareholders.
- --------------------------------------------------------------------------------------------
CHECK TO ANOTHER PARTY/ADDRESS This request must be in writing, regardless of amount,
[GRAPHIC OMITTED] with all account owners' signatures guaranteed.
Mail to: Idex Investor Services, P.O. Box 9015,
Clearwater, FL 33758-9015. Attention: Redemptions.
- --------------------------------------------------------------------------------------------
PERIODIC AUTOMATIC PAYMENT You can establish a Systematic Withdrawal Plan (SWP)
(BY DIRECT DEPOSIT-ACH OR CHECK) either at the time you open your account or at a later
date. Call IDEX Customer Service (1-888-233-IDEX (4339))
for assistance. You must have a minimum balance of $10,000
in your account.
- --------------------------------------------------------------------------------------------
BY EXCHANGE You may request an exchange in writing, by phone
[GRAPHIC OMITTED] (automated IDEX InTouch(SM) (1-888-233-IDEX (4339)) system
or person-to-person), or by accessing your account through
the internet.
- --------------------------------------------------------------------------------------------
THROUGH AN AUTHORIZED DEALER You may redeem your shares through an authorized dealer.
[GRAPHIC OMITTED] (They may impose a service charge.) Contact your
Registered Representative or call IDEX Customer Service
(1-888-233-IDEX (4339)) for assistance.
- --------------------------------------------------------------------------------------------
</TABLE>
NOTE: ALL PURCHASES MUST BE HELD AT IDEX FOR 15 CALENDAR DAYS
BEFORE THEY ARE ELIGIBLE FOR REDEMPTION.
49
<PAGE>
- --------------------------------------------------------------------------------
DISTRIBUTION ARRANGEMENTS
- --------------------------------------------------------------------------------
/chess piece/ CHOOSING A SHARE CLASS
The Fund offers four share classes, each with its own sales charge and expense
structure. (An additional class, Class T, is offered through IDEX JCC Growth,
but Class T shares are not available to new investors.) Also, effective March 1,
1999, shares that were designated as Class C shares became Class M shares. They
have an initial sales charge of 1.00% and a contingent deferred sales charge
(CDSC) of 1.00% if you sell within 18 months of purchase. The sales charge and
CDSC only apply to shares purchased after February 28, 1999.
The Fund began offering a new Class C share on November 1, 1999. This new Class
C share has no initial or deferred sales charges. All shares that were
designated as Class C shares prior to March 1, 1999, which then converted to
Class M shares on that date, will continue as Class M shares.
The amount of your investment and the amount of time that you plan to hold your
shares will determine which class of shares you should choose. You should make
this decision carefully because all of your future investments in your account
will be in the same share class that you designate when you open your account.
Your financial professional can help you choose the share class that makes the
best sense for you.
If you are investing a large amount and plan to hold your shares for a long
period, Class A or Class M shares may make the most sense for you. If you are
investing a lesser amount, you may want to consider Class B shares (if you plan
to invest for a period of at least 5 years) or Class C shares (if you plan to
invest for a period of less than 5 years).
The Fund may, at any time and in its sole discretion, add, delete, or change the
sales charges for any share class.
CLASS A SHARES -- FRONT LOAD
With Class A shares, you pay an initial sales charge only when you buy shares.
(The offering price includes the sales charge.)
If you are investing $1 million or more (either as a lump sum or through any of
the methods described above), you can purchase Class A shares without any sales
charge. However, if you redeem any of those shares within the first 24 months
after buying them, you will pay a 1.00% CDSC, unless they were purchased through
a qualified retirement plan.
Also, the Fund will treat Class A share purchases in an amount of less than $1
million by defined contribution plans, other than 403(b) plans, that are
sponsored by employers with 100 or more eligible employees as if such purchases
were equal to an amount more than $1 million.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
CLASS A SHARES - CLASS B SHARES - CLASS C SHARES - CLASS M SHARES - CLASS T SHARES
(CLOSED TO NEW
FRONT LOAD BACK LOAD LEVEL LOAD LEVEL LOAD INVESTORS)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
[ ] Initial sales [ ] No up-front sales [ ] No up-front sales [ ] Initial sales [ ] Initial sales
charge of 5.50% charge charge charge of 1.00% charge of 8.50%
or less (see Class or less
A Share Quantity [ ] Deferred sales [ ] No deferred sales [ ] 12b-1 distribution
Discounts Table). charge of 5.00% or charge and service 12b-1 [ ] No 12b-1
less on shares you fees of 0.90% per distribution
[ ] Discounts of sales sell within 6 years [ ] 12b-1 distribution year (except for and service fees
charge for larger (see deferred sales and service fees the IDEX AEGON
investments charge table of 1.00% Tax Exempt, whose [ ] Sales charge
below) 12b-1 distribution percentage can be
[ ] 12b-1 distribution [ ] No conversion to and service fee is reduced in the
and service fees [ ] 12b-1 distribution Class A shares 0.60%) same four ways as
of 0.35% and service fees feature, so annual Class A shares
of 1.00% expenses do not [ ] Deferred sales (see Class A Share
[ ] Lower annual decrease charge of 1.00% if Quantity
expenses [ ] Automatic you sell within 18 Discounts Table)
than Class B, C conversion to months of
or M shares due Class A shares purchase
to lower 12b-1 after 8 years,
distribution reducing future [ ] Automatic
and service fees annual expenses conversion to
Class A shares
after 10 years,
reducing future
annual expenses
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
50
<PAGE>
CLASS B SHARES -- BACK LOAD
Class B shares are sold in amounts up to $250,000.
With Class B shares, you pay no initial sales charge when you invest, but you
are charged a CDSC when you sell shares you have held for six years or less, as
described in the table below. Class B shares automatically convert to Class A
shares after 8 years, lowering annual expenses from that time on.
- --------------------------------------------------------------------------------
CONTINGENT DEFERRED SALES CHARGE- CLASS B SHARES
AS A % OF DOLLAR AMOUNT
YEAR AFTER PURCHASING (SUBJECT TO CHANGE)
- --------------------------------------------------------------------------------
First 5%
Second 4%
Third 3%
Fourth 2%
Fifth and Sixth 1%
Seventh and Later 0%
- --------------------------------------------------------------------------------
CLASS C SHARES -- LEVEL LOAD
With Class C shares, you pay no initial sales charge or CDSC. There are 12b-1
distribution and service fees of up to 1.00% per year.
CLASS M SHARES -- LEVEL LOAD
Class M shares are sold in amounts up to $1 million. With Class M shares, you
pay an initial sales charge of 1.00% based on offering price. (The offering
price includes the sales charge.) There are distribution and service fees of
0.90% per year. If you redeem within 18 months from the date of purchase, you
may incur a CDSC of 1.00%.
Class M shares automatically convert to Class A shares after 10 years, lowering
annual expenses from that time on.
CLASS T SHARES (IDEX JCC GROWTH ONLY)
(Closed to new investors)
When you buy Class T shares of IDEX JCC Growth, you pay an up-front sales
charge. You can reduce the sales charge percentage in the same four ways that
are described under Class A shares. Class T shares are not subject to annual
distribution and service fees.
You pay no sales charge when you redeem Class T shares. As with Class A shares,
if you pay no up-front sales charge because you are purchasing $1 million or
more of Class T shares, you will pay a deferred sales charge of 1.00% if you
redeem any of those shares within the first 24 months after buying them, unless
they were purchased through a qualified retirement plan.
The charge is assessed on an amount equal to the lesser of the then current
market value or the original cost of the shares being redeemed. No sales charge
is imposed on net asset value above the initial purchase.
Waivers of the sale charges are granted under certain conditions. Persons
eligible to buy Class T shares at NAV may not impose a sales charge when they
re-sell those shares.
CONTINGENT DEFERRED SALES CHARGE
Your shares may be subject to a CDSC. Dividends and capital gains are not
subject to the sales charge. There is no charge on any increase in the value of
your shares. To ensure that you pay the lowest CDSC possible, the Fund will
always use the shares with the lowest CDSC to fill your redemption requests. If
your shares are worth less than when you bought them, the charge will be
assessed on their current, lower value. In some cases, the sales charge may be
waived.
51
<PAGE>
CLASS A SALES CHARGE REDUCTIONS
You can lower the sales charge percentage in four ways:
[ ] Substantial investments receive lower sales charge rates. Please see the
SAI for details on these reductions.
[ ] The "right of accumulation" allows you to include your existing Class A
Shares (or Class T shares of IDEX JCC Growth) as part of your current
investments for sales charge purposes.
[ ] A "letter of intent" allows you to count all Class A share investments in
an IDEX fund over the next 13 months, as if you were making them all at
once, to qualify for reduced sales charges.
[ ] By investing as part of a qualified group.
- --------------------------------------------------------------------------------
CLASS A SHARE QUANTITY DISCOUNTS
(ALL FUNDS EXCEPT IDEX JCC FLEXIBLE INCOME, IDEX AEGON
INCOME PLUS AND IDEX AEGON TAX EXEMPT)
SALES CHARGE AS % SALES CHARGE AS %
AMOUNT OF PURCHASE OF OFFERING PRICE OF AMOUNT INVESTED
- --------------------------------------------------------------------------------
Under $50,000 5.50% 5.82%
$50,000 to under $100,000 4.75% 4.99%
$100,000 to under $250,000 3.50% 3.63%
$250,000 to under $500,000 2.75% 2.83%
$500,000 to under $1,000,000 2.00% 2.04%
$1,000,000 and over 0.00% 0.00%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CLASS A SHARE QUANTITY DISCOUNTS
(IDEX JCC FLEXIBLE INCOME, IDEX AEGON INCOME PLUS
& IDEX AEGON TAX EXEMPT)
SALES CHARGE AS % SALES CHARGE AS %
AMOUNT OF PURCHASE OF OFFERING PRICE OF AMOUNT INVESTED
- --------------------------------------------------------------------------------
Under $50,000 4.75% 4.99%
$50,000 to under $100,000 4.00% 4.17%
$100,000 to under $250,000 3.50% 3.63%
$250,000 to under $500,000 2.25% 2.30%
$500,000 to under $1,000,000 1.25% 1.27%
$1,000,000 and over 0.00% 0.00%
- --------------------------------------------------------------------------------
WAIVERS OF SALES CHARGES *
WAIVER OF CLASS A AND T SALES CHARGES
Class A and Class T shares may be purchased without a sales charge by:
/bullet/ current or former trustees, directors, officers, full-time employees
or sales representatives of the Fund, IMI, ISI, any of the sub-
advisers or any of their affiliates.
/bullet/ directors, officers, full-time employees and sales representatives of
dealers having a sales agreement with ISI.
/bullet/ any trust, pension, profit-sharing or other benefit plan for any of
the foregoing persons.
/bullet/ "wrap" accounts for the benefit of clients of certain broker-dealers,
financial institutions or financial planners, who have entered into
arrangements with the Fund or ISI.
Person eligible to buy Class A and Class T shares at NAV may not impose a sales
charge when they re-sell those shares.
WAIVER OF CLASS A, CLASS B, CLASS M AND CLASS T REDEMPTION CHARGES
You will not be assessed a sales charge for Class B shares if you sell in the
following situations:
/bullet/ Following the death of the shareholder.
/bullet/ Following the total disability of the shareholder (as determined by
the Social Security Administration-applies only to shares held at the
time the disability is determined).
/bullet/ On redemptions made under the Fund's systematic withdrawal plan (may
not exceed 12% of the account value on the day the systematic
withdrawal plan was established).
NOTE: The amount redeemed under this waiver does not need to be under a
systematic withdrawal plan. If it is not under a systematic withdrawal plan, it
is limited to one redemption per year up to 12% of your account balance at the
time of redemption.
/bullet/ If you redeem your Class B or Class M shares and reinvest the proceeds
in the same class of any fund within 90 days of redeeming, the sales
charge on the first redemption is waived.
/bullet/ On withdrawals from IRS qualified and nonqualified retirement plans,
individual retirement accounts, tax-sheltered accounts, and deferred
compensation plans, where such withdrawals are permitted under the
terms of the plan or account.
(This waiver does not include transfer of asset redemptions, broker
directed accounts or omnibus accounts).
52
<PAGE>
/question mark/ /dollar sign/ UNDERWRITING AGREEMENT
The Fund has an Underwriting Agreement with ISI, a registered broker/dealer.
Under this agreement, ISI underwrites and distributes all classes of fund shares
and bears the expenses of offering these shares to the public. The funds pay ISI
fees for its services.
Of the distribution and service fees it receives for Class A and B shares, ISI
reallows, or pays, to brokers or dealers who sold them, 0.25% of the average
daily net assets of those shares. In the case of Class C or M shares, ISI
reallows its entire fee to those sellers.
/dollar sign/ DISTRIBUTION PLANS
Distribution of Class A Shares. ISI receives the sales fees or loads imposed on
these shares (up to 5.50% of the offering price, which includes the sales load)
and reallows a portion of those fees to the sellers of the shares. ISI also
receives fees under a Rule 12b-1 Plan of Distribution. Under its Plan for Class
A shares, the funds may pay ISI a distribution fee of up to 0.35% annually which
includes a service fee of 0.25%. Fees are based on the average daily net assets
of Class A shares. However, if the service fees rise, the distribution fee is
lowered so that the total fees payable don't exceed 0.35% annually.
Distribution of Class B Shares. For these shares, the funds may pay ISI an
annual distribution fee of up to 1.00% which includes an annual service fee of
0.25%.
Distribution of Class C Shares. For these shares, the funds may pay ISI an
annual distribution fee of up to 1.00% which includes an annual service fee of
0.25%.
Distribution of Class M Shares. The fees paid to ISI for these shares may go as
high as the Class B and C shares fees, but the total annual fee may not exceed
0.90% of the average daily net assets of the funds.
Class T Shares (IDEX JCC Growth only). This class of shares does not have a
12b-1 Plan of Distribution, and is closed to new shareholders.
The effect of Rule 12b-1. Because the funds have a 12b-1 Plan, even though Class
B and C shares don't carry an up-front sales load, the higher distribution and
service fees payable by those shares may, over time, be higher than the total
fees paid by owners of Class A and M shares. For a complete description of the
funds' 12b-1 Plans, see the SAI.
53
<PAGE>
FINANCIAL HIGHLIGHTS
THE FINANCIAL HIGHLIGHTS TABLE IS INTENDED TO HELP YOU TO UNDERSTAND EACH FUND'S
PERFORMANCE FOR AS LONG AS IT HAS BEEN OPERATING, OR FOR FIVE YEARS, WHICHEVER
IS SHORTER. CERTAIN INFORMATION REFLECTS FINANCIAL RESULTS FOR A SINGLE FUND
SHARE. THE TOTAL RETURNS IN THE TABLE REPRESENT THE RATE AN INVESTOR WOULD HAVE
EARNED (OR LOST) ON AN INVESTMENT IN THE FUND FOR THE PERIOD SHOWN, ASSUMING
REINVESTMENT OF ALL DIVIDENDS AND DISTRIBUTIONS. THIS INFORMATION THROUGH
OCTOBER 31, 1998 HAS BEEN AUDITED BY PRICEWATERHOUSECOOPERS LLP, WHOSE REPORT,
ALONG WITH THE FUND'S FINANCIAL STATEMENTS, IS INCLUDED IN THE 1998 ANNUAL
REPORT, WHICH IS AVAILABLE TO YOU UPON REQUEST.
<TABLE>
<CAPTION>
INVESTMENT OPERATIONS
------------------------------------------
YEAR OR NET ASSET VALUE NET NET REALIZED
PERIOD BEGINNING INVESTMENT & UNREALIZED TOTAL
ENDED OF PERIOD INCOME (LOSS) GAIN (LOSS) OPERATIONS
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
IDEX ALGER Class A 4/30/99 $22.24 $(0.07) $8.83 $8.76
AGGRESSIVE GROWTH 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(3) 15.75 (0.01) (0.04) (0.05)
9/30/96(4) 17.68 (0.15) (0.76) (0.91)
9/30/95(5) 10.00 (0.14) 7.82 7.68
-------------------------------------------------------------------------------------------
Class B 4/30/99 21.93 (0.24) 8.83 8.59
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(3) 15.63 (0.01) (0.04) (0.05)
9/30/96(4) 17.64 (0.23) (0.76) (0.99)
-------------------------------------------------------------------------------------------
Class M 4/30/99(2) 21.98 (0.22) 8.83 8.61
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(3) 15.65 (0.01) (0.04) (0.05)
9/30/96(4) 17.64 (0.21) (0.76) (0.97)
9/30/95(5) 10.00 (0.18) 7.82 7.64
- --------------------------------------------------------------------------------------------------------------------
IDEX GE/SCOTTISH Class A 4/30/99 10.77 (0.03) 1.57 1.54
EQUITABLE INTERNATIONAL 10/31/98(4) 10.57 0.07 0.20 0.27
EQUITY 10/31/97(6) 10.00 0.07 0.50 0.57
-------------------------------------------------------------------------------------------
Class B 4/30/99 10.71 (0.08) 1.57 1.49
10/31/98(4) 10.52 0.00 0.20 0.20
10/31/97(6) 10.00 0.02 0.50 0.52
-------------------------------------------------------------------------------------------
Class M(11) 4/30/99(2) 10.72 (0.07) 1.57 1.50
10/31/98(4) 10.53 0.01 0.20 0.21
10/31/97(6) 10.00 0.03 0.50 0.53
- --------------------------------------------------------------------------------------------------------------------
IDEX JCC Class A 4/30/99 16.97 (0.10) 9.27 9.17
CAPITAL APPRECIATION 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(3) 15.75 (0.02) (0.24) (0.26)
9/30/96(4) 13.54 (0.02) 3.12 3.10
9/30/95(5) 10.00 (0.03) 3.57 3.54
-------------------------------------------------------------------------------------------
Class B 4/30/99 16.72 (0.27) 9.27 9.00
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(3) 15.69 (0.03) (0.24) (0.27)
9/30/96 13.49 (0.10) 3.12 3.02
-------------------------------------------------------------------------------------------
Class M 4/30/99(2) 16.76 (0.24) 9.27 9.03
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(3) 15.70 (0.03) (0.24) (0.27)
9/30/96(4) 13.49 (0.08) 3.12 3.04
9/30/95(5) 10.00 (0.08) 3.57 3.49
- --------------------------------------------------------------------------------------------------------------------
IDEX JCC GLOBAL Class A 4/30/99 24.09 0.00 5.60 5.60
10/31/98(4) 23.74 0.08 2.34 2.42
10/31/97 21.39 0.07 4.38 4.45
10/31/96(3) 21.40 (0.02) 0.01 (0.01)
9/30/96 17.73 (0.09) 4.38 4.29
9/30/95 15.93 (0.06) 2.42 2.36
-------------------------------------------------------------------------------------------
Class B 4/30/99 23.62 (0.19) 5.60 5.41
10/31/98(4) 23.38 (0.03) 2.34 2.31
10/31/97 21.13 (0.03) 4.38 4.35
10/31/96(3) 21.14 (0.02) 0.01 (0.01)
9/30/96 17.57 (0.19) 4.38 4.19
-------------------------------------------------------------------------------------------
Class M 4/30/99(2) 23.56 (0.19) 5.60 5.41
10/31/98(4) 23.30 (0.01) 2.34 2.33
10/31/97 21.03 (0.01) 4.38 4.37
10/31/96(3) 21.04 (0.02) 0.01 (0.01)
9/30/96 17.46 (0.18) 4.38 4.20
9/30/95 15.74 (0.14) 2.42 2.28
<CAPTION>
DISTRIBUTIONS
----------------------------------------------
YEAR OR FROM NET FROM NET
PERIOD INVESTMENT REALIZED TOTAL
ENDED INCOME CAPITAL GAINS DISTRIBUTIONS
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
IDEX ALGER Class A 4/30/99 $0.00 $(1.18) $(1.18)
AGGRESSIVE GROWTH 10/31/98 0.00 (0.58) (0.58)
10/31/97 0.00 (0.67) (0.67)
10/31/96(3) 0.00 0.00 0.00
9/30/96(4) 0.00 (1.02) (1.02)
9/30/95(5) 0.00 0.00 0.00
------------------------------------------------------------------------------
Class B 4/30/99 0.00 (1.18) (1.18)
10/31/98 0.00 (0.58) (0.58)
10/31/97 0.00 (0.67) (0.67)
10/31/96(3) 0.00 0.00 0.00
9/30/96(4) 0.00 (1.02) (1.02)
------------------------------------------------------------------------------
Class M 4/30/99(2) 0.00 (1.18) (1.18)
10/31/98 0.00 (0.58) (0.58)
10/31/97 0.00 (0.67) (0.67)
10/31/96(3) 0.00 0.00 0.00
9/30/96(4) 0.00 (1.02) (1.02)
9/30/95(5) 0.00 0.00 0.00
- -------------------------------------------------------------------------------------------------------
IDEX GE/SCOTTISH Class A 4/30/99 0.00 0.00 0.00
EQUITABLE INTERNATIONAL 10/31/98(4) (0.07) 0.00 (0.07)
EQUITY 10/31/97(6) 0.00 0.00 0.00
------------------------------------------------------------------------------
Class B 4/30/99 0.00 0.00 0.00
10/31/98(4) (0.01) 0.00 (0.01)
10/31/97(6) 0.00 0.00 0.00
------------------------------------------------------------------------------
Class M(11) 4/30/99(2) 0.00 0.00 0.00
10/31/98(4) (0.02) 0.00 (0.02)
10/31/97(6) 0.00 0.00 0.00
- -------------------------------------------------------------------------------------------------------
IDEX JCC Class A 4/30/99 0.00 (1.81) (1.81)
CAPITAL APPRECIATION 10/31/98 0.00 (0.45) (0.45)
10/31/97 0.00 (0.21) (0.21)
10/31/96(3) 0.00 0.00 0.00
9/30/96(4) (0.07) (0.82) (0.89)
9/30/95(5) 0.00 0.00 0.00
------------------------------------------------------------------------------
Class B 4/30/99 0.00 (1.81) (1.81)
10/31/98 0.00 (0.45) (0.45)
10/31/97 0.00 (0.21) (0.21)
10/31/96(3) 0.00 0.00 0.00
9/30/96 0.00 (0.82) (0.82)
------------------------------------------------------------------------------
Class M 4/30/99(2) 0.00 (1.81) (1.81)
10/31/98 0.00 (0.45) (0.45)
10/31/97 0.00 (0.21) (0.21)
10/31/96(3) 0.00 0.00 0.00
9/30/96(4) (0.01) (0.82) (0.83)
9/30/95(5) 0.00 0.00 0.00
- -------------------------------------------------------------------------------------------------------
IDEX JCC GLOBAL Class A 4/30/99 0.00 0.00 0.00
10/31/98(4) 0.00 (2.07) (2.07)
10/31/97 0.00 (2.10) (2.10)
10/31/96(3) 0.00 0.00 0.00
9/30/96 0.00 (0.62) (0.62)
9/30/95 0.00 (0.56) (0.56)
------------------------------------------------------------------------------
Class B 4/30/99 0.00 0.00 0.00
10/31/98(4) 0.00 (2.07) (2.07)
10/31/97 0.00 (2.10) (2.10)
10/31/96(3) 0.00 0.00 0.00
9/30/96 0.00 (0.62) (0.62)
------------------------------------------------------------------------------
Class M 4/30/99(2) 0.00 0.00 0.00
10/31/98(4) 0.00 (2.07) (2.07)
10/31/97 0.00 (2.10) (2.10)
10/31/96(3) 0.00 0.00 0.00
9/30/96 0.00 (0.62) (0.62)
9/30/95 0.00 (0.56) (0.56)
- -------------------------------------------------------------------------------------------------------
</TABLE>
*PLEASE SEE NOTES TO FINANCIAL HIGHLIGHTS ON PAGE 62
54
<PAGE>
<TABLE>
<CAPTION>
YEAR OR NET ASSET NET ASSETS
PERIOD VALUE AT END TOTAL AT END OF
ENDED OF PERIOD RETURN(9) PERIOD (000'S)
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
IDEX ALGER Class A 4/30/99 $29.82 40.29% $75,340
AGGRESSIVE GROWTH 10/31/98 22.24 22.48 46,413
10/31/97 18.77 24.71 31,260
10/31/96(3) 15.70 (0.32) 21,938
9/30/96(4) 15.75 (4.91) 22,078
9/30/95(5) 17.68 76.80 16,747
-----------------------------------------------------------------------------
Class B 4/30/99 29.34 40.07 26,116
10/31/98 21.93 22.04 10,564
10/31/97 18.58 24.47 4,880
10/31/96(3) 15.58 (0.32) 1,992
9/30/96(4) 15.63 (5.33) 1,800
-----------------------------------------------------------------------------
Class M 4/30/99(2) 29.41 40.11 11,408
10/31/98 21.98 22.11 5,573
10/31/97 18.61 24.50 3,468
10/31/96(3) 15.60 (0.32) 2,129
9/30/96(4) 15.65 (5.22) 2,250
9/30/95(5) 17.64 76.40 1,736
- ------------------------------------------------------------------------------------------------------
IDEX GE/SCOTTISH Class A 4/30/99 12.31 14.07 5,598
EQUITABLE INTERNATIONAL 10/31/98(4) 10.77 2.58 4,981
EQUITY 10/31/97(6) 10.57 5.70 3,076
-----------------------------------------------------------------------------
Class B 4/30/99 12.20 13.75 1,338
10/31/98(4) 10.71 1.89 1,198
10/31/97(6) 10.52 5.20 589
-----------------------------------------------------------------------------
Class M(11) 4/30/99(2) 12.22 13.80 397
10/31/98(4) 10.72 1.99 397
10/31/97(6) 10.53 5.30 399
- ------------------------------------------------------------------------------------------------------
IDEX JCC Class A 4/30/99 24.33 58.21 41,447
CAPITAL APPRECIATION 10/31/98 16.97 9.87 23,798
10/31/97 15.90 4.09 20,605
10/31/96(3) 15.49 (1.59) 19,350
9/30/96(4) 15.75 24.35 18,713
9/30/95(5) 13.54 35.40 6,241
-----------------------------------------------------------------------------
Class B 4/30/99 23.91 58.10 8,605
10/31/98 16.72 9.35 3,734
10/31/97 15.74 3.56 2,866
10/31/96(3) 15.42 (1.66) 2,132
9/30/96 15.69 23.63 2,022
-----------------------------------------------------------------------------
Class M 4/30/99(2) 23.98 58.11 2,887
10/31/98 16.76 9.43 1,382
10/31/97 15.77 3.64 1,751
10/31/96(3) 15.43 (1.66) 2,243
9/30/96(4) 15.70 23.81 2,369
9/30/95(5) 13.49 34.90 2,565
- ------------------------------------------------------------------------------------------------------
IDEX JCC GLOBAL Class A 4/30/99 29.69 23.21 402,849
10/31/98(4) 24.09 11.30 296,450
10/31/97 23.74 22.72 218,681
10/31/96(3) 21.39 (0.05) 135,837
9/30/96 21.40 25.04 131,347
9/30/95 17.73 15.47 89,397
-----------------------------------------------------------------------------
Class B 4/30/99 29.03 22.91 198,321
10/31/98(4) 23.62 10.93 110,630
10/31/97 23.38 22.53 43,951
10/31/96(3) 21.13 (0.05) 5,966
9/30/96 21.14 24.70 5,000
-----------------------------------------------------------------------------
Class M 4/30/99(2) 28.97 22.96 109,721
10/31/98(4) 23.56 11.08 63,552
10/31/97 23.30 22.72 27,210
10/31/96(3) 21.03 (0.05) 8,624
9/30/96 21.04 24.91 8,081
9/30/95 17.46 15.14 3,567
- ------------------------------------------------------------------------------------------------------
<CAPTION>
RATIO OF EXPENSES TO AVERAGE NET ASSETS(10)(11) NET INVESTMENT
YEAR OR --------------------------------------------- INCOME (LOSS) PORTFOLIO
PERIOD EXCLUDING INCLUDING TO AVERAGE TURNOVER
ENDED CREDITS GROSS CREDITS NET ASSETS(11) RATE(12)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
IDEX ALGER Class A 4/30/99 1.72% 1.90% 1.72% (1.19)% 58.30
AGGRESSIVE GROWTH 10/31/98 1.85 2.18 1.85 (1.11) 142.08
10/31/97 1.85 2.44 1.85 (1.07) 120.96
10/31/96(3) 1.85 2.62 1.85 (1.06) 9.40
9/30/96(4) 1.85 2.60 1.85 (1.15) 127.49
9/30/95(5) 2.85 3.35 2.85 (2.39) 88.28
-----------------------------------------------------------------------------------------------------------
Class B 4/30/99 2.37 2.55 2.37 (1.84) 58.30
10/31/98 2.50 2.83 2.50 (1.76) 142.08
10/31/97 2.50 3.09 2.50 (1.71) 120.96
10/31/96(3) 2.50 3.27 2.50 (1.71) 9.40
9/30/96(4) 2.50 3.25 2.50 (1.80) 127.49
-----------------------------------------------------------------------------------------------------------
Class M 4/30/99(2) 2.27 2.45 2.27 (1.74) 58.30
10/31/98 2.40 2.73 2.40 (1.66) 142.08
10/31/97 2.40 2.99 2.40 (1.62) 120.96
10/31/96(3) 2.40 3.17 2.40 (1.62) 9.40
9/30/96(4) 2.40 3.15 2.40 (1.70) 127.49
9/30/95(5) 3.40 3.91 3.40 (2.94) 88.28
- ------------------------------------------------------------------------------------------------------------------------------------
IDEX GE/SCOTTISH Class A 4/30/99 2.00 3.69 2.00 (0.70) 31.80
EQUITABLE INTERNATIONAL 10/31/98(4) 2.03 4.22 2.03 (0.21) 50.01
EQUITY 10/31/97(6) 1.70 8.93 1.70 0.19 21.85
-----------------------------------------------------------------------------------------------------------
Class B 4/30/99 2.65 4.34 2.65 (1.35) 31.80
10/31/98(4) 2.68 4.87 2.68 (0.86) 50.01
10/31/97(6) 2.35 9.58 2.35 (0.45) 21.85
-----------------------------------------------------------------------------------------------------------
Class M(11) 4/30/99(2) 2.55 4.24 2.55 (1.25) 31.80
10/31/98(4) 2.58 4.77 2.58 (0.76) 50.01
10/31/97(6) 2.25 9.48 2.25 (0.35) 21.85
- ------------------------------------------------------------------------------------------------------------------------------------
IDEX JCC Class A 4/30/99 1.85 2.10 1.85 (1.60) 74.69
CAPITAL APPRECIATION 10/31/98 1.85 2.24 1.85 (1.37) 136.59
10/31/97 1.85 2.66 1.85 (1.27) 130.48
10/31/96(3) 1.85 2.48 1.85 (1.41) 10.11
9/30/96(4) 1.85 2.72 1.85 (0.35) 160.72
9/30/95(5) 2.90 4.17 2.85 0.75 262.97
-----------------------------------------------------------------------------------------------------------
Class B 4/30/99 2.50 2.75 2.50 (2.25) 74.69
10/31/98 2.50 2.89 2.50 (2.02) 136.59
10/31/97 2.50 3.31 2.50 (1.92) 130.48
10/31/96(3) 2.50 3.13 2.50 (2.06) 10.11
9/30/96 2.50 3.37 2.50 (1.00) 160.72
-----------------------------------------------------------------------------------------------------------
Class M 4/30/99(2) 2.40 2.65 2.40 (2.15) 74.69
10/31/98 2.40 2.79 2.40 (1.92) 136.59
10/31/97 2.40 3.21 2.40 (1.82) 130.48
10/31/96(3) 2.40 3.03 2.40 (1.96) 10.11
9/30/96(4) 2.40 3.27 2.40 (0.90) 160.72
9/30/95(5) 3.45 4.72 3.40 0.20 262.97
- ------------------------------------------------------------------------------------------------------------------------------------
IDEX JCC GLOBAL Class A 4/30/99 1.72 0.00 1.72 (0.71) 28.81
10/31/98(4) 1.82 0.00 1.82 (0.45) 87.68
10/31/97 1.91 0.00 1.91 (0.50) 91.02
10/31/96(3) 2.08 0.00 2.07 (1.15) 2.59
9/30/96 2.09 0.00 2.06 (0.67) 97.94
9/30/95 2.10 0.00 1.97 (0.43) 161.48
-----------------------------------------------------------------------------------------------------------
Class B 4/30/99 2.37 0.00 2.37 (1.36) 28.81
10/31/98(4) 2.47 0.00 2.47 (1.10) 87.68
10/31/97 2.56 0.00 2.56 (1.15) 91.02
10/31/96(3) 2.73 0.00 2.72 (1.80) 2.59
9/30/96 2.74 0.00 2.71 (1.32) 97.94
-----------------------------------------------------------------------------------------------------------
Class M 4/30/99(2) 2.27 0.00 2.27 (1.26) 28.81
10/31/98(4) 2.37 0.00 2.37 (1.00) 87.68
10/31/97 2.46 0.00 2.46 (1.05) 91.02
10/31/96(3) 2.63 0.00 2.62 (1.70) 2.59
9/30/96 2.64 0.00 2.61 (1.22) 97.94
9/30/95 2.65 0.00 2.52 (0.98) 161.48
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* PLEASE SEE NOTES TO FINANCIAL HIGHLIGHTS ON PAGE 62
55
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
INVESTMENT OPERATIONS
------------------------------------------
YEAR OR NET ASSET VALUE NET NET REALIZED
PERIOD BEGINNING INVESTMENT & UNREALIZED TOTAL
ENDED OF PERIOD INCOME (LOSS) GAIN (LOSS) OPERATIONS
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
IDEX JCC GROWTH Class A 4/30/99 $29.35 $(0.11) $13.18 $13.07
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(3) 22.21 0.00 (0.24) (0.24)
9/30/96 22.84 (0.11) 4.66 4.55
9/30/95 16.78 (0.05) 6.18 6.13
-------------------------------------------------------------------------------------------
Class B 4/30/99 28.63 (0.50) 13.18 12.68
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(3) 21.85 (0.01) (0.24) (0.25)
9/30/96 22.64 (0.27) 4.66 4.39
-------------------------------------------------------------------------------------------
Class M 4/30/99(2) 28.74 (0.44) 13.18 12.74
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(3) 21.91 (0.02) (0.24) (0.26)
9/30/96 22.64 (0.21) 4.66 4.45
9/30/95 16.68 (0.15) 6.18 6.03
-------------------------------------------------------------------------------------------
Class T 4/30/99 29.74 0.11 13.18 13.29
10/31/98(4) 25.31 0.13 7.64 7.77
10/31/97 22.17 0.05 3.56 3.61
10/31/96(3) 22.41 0.00 (0.24) (0.24)
9/30/96(7) 22.23 0.00 0.18 0.18
- --------------------------------------------------------------------------------------------------------------------
IDEX C.A.S.E. Class A 4/30/99 10.14 (0.05) 2.71 2.66
GROWTH 10/31/98 12.90 0.03 (1.84) (1.81)
10/31/97(4) 10.56 (0.01) 2.86 2.85
10/31/96(3) 10.46 (0.07) 0.17 0.10
9/30/96(8) 10.00 0.61 (0.15) 0.46
-------------------------------------------------------------------------------------------
Class B 4/30/99 10.02 (0.11) 2.71 2.60
10/31/98 12.85 (0.04) (1.84) (1.88)
10/31/97(4) 10.51 (0.07) 2.86 2.79
10/31/96(3) 10.41 (0.07) 0.17 0.10
9/30/96(8) 10.00 0.56 (0.15) 0.41
-------------------------------------------------------------------------------------------
Class M 4/30/99(2) 10.04 (0.10) 2.71 2.61
10/31/98 12.86 (0.03) (1.84) (1.87)
10/31/97(4) 10.52 (0.06) 2.86 2.80
10/31/96(3) 10.42 (0.07) 0.17 0.10
9/30/96(8) 10.00 0.57 (0.15) 0.42
- --------------------------------------------------------------------------------------------------------------------
IDEX NWQ Class A 4/30/99 11.09 0.02 1.51 1.53
VALUE EQUITY 10/31/98 11.71 0.03 (0.61) (0.58)
10/31/97(6) 10.00 0.02 1.69 1.71
-------------------------------------------------------------------------------------------
Class B 4/30/99 10.98 (0.03) 1.51 1.48
10/31/98 11.67 (0.04) (0.61) (0.65)
10/31/97(6) 10.00 (0.02) 1.69 1.67
-------------------------------------------------------------------------------------------
Class M 4/30/99(2) 11.00 (0.03) 1.51 1.48
10/31/98 11.67 (0.02) (0.61) (0.63)
10/31/97(6) 10.00 (0.02) 1.69 1.67
- --------------------------------------------------------------------------------------------------------------------
IDEX LKCM Class A 4/30/99 16.18 0.11 1.54 1.65
STRATEGIC TOTAL RETURN 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(3) 13.27 0.01 0.15 0.16
9/30/96 11.74 0.20 1.65 1.85
9/30/95(5) 10.00 0.09 1.75 1.84
-------------------------------------------------------------------------------------------
Class B 4/30/99 16.17 0.05 1.54 1.59
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(3) 13.27 0.00 0.15 0.15
9/30/96 11.73 0.13 1.65 1.78
-------------------------------------------------------------------------------------------
Class M 4/30/99(2) 16.17 0.05 1.54 1.59
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(3) 13.27 0.00 0.15 0.15
9/30/96 11.73 0.15 1.65 1.80
9/30/95(5) 10.00 0.03 1.75 1.78
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
DISTRIBUTIONS
----------------------------------------------
YEAR OR FROM NET FROM NET
PERIOD INVESTMENT REALIZED TOTAL
ENDED INCOME CAPITAL GAINS DISTRIBUTIONS
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
IDEX JCC GROWTH Class A 4/30/99 $0.00 $(0.39) $(0.39)
10/31/98 0.00 (3.31) (3.31)
10/31/97 0.00 (0.47) (0.47)
10/31/96(3) 0.00 0.00 0.00
9/30/96 0.00 (5.18) (5.18)
9/30/95 0.00 (0.07) (0.07)
------------------------------------------------------------------------------
Class B 4/30/99 0.00 (0.39) (0.39)
10/31/98 0.00 (3.31) (3.31)
10/31/97 0.00 (0.47) (0.47)
10/31/96(3) 0.00 0.00 0.00
9/30/96 0.00 (5.18) (5.18)
------------------------------------------------------------------------------
Class M 4/30/99(2) 0.00 (0.39) (0.39)
10/31/98 0.00 (3.31) (3.31)
10/31/97 0.00 (0.47) (0.47)
10/31/96(3) 0.00 0.00 0.00
9/30/96 0.00 (5.18) (5.18)
9/30/95 0.00 (0.07) (0.07)
------------------------------------------------------------------------------
Class T 4/30/99 0.00 (0.39) (0.39)
10/31/98(4) (0.03) (3.31) (3.34)
10/31/97 0.00 (0.47) (0.47)
10/31/96(3) 0.00 0.00 0.00
9/30/96(7) 0.00 0.00 0.00
- -------------------------------------------------------------------------------------------------------
IDEX C.A.S.E. Class A 4/30/99 0.00 (0.84) (0.84)
GROWTH 10/31/98 0.00 (0.95) (0.95)
10/31/97(4) (0.51) 0.00 (0.51)
10/31/96(3) 0.00 0.00 0.00
9/30/96(8) 0.00 0.00 0.00
------------------------------------------------------------------------------
Class B 4/30/99 0.00 (0.84) (0.84)
10/31/98 0.00 (0.95) (0.95)
10/31/97(4) (0.46) 0.00 (0.46)
10/31/96(3) 0.00 0.00 0.00
9/30/96(8) 0.00 0.00 0.00
------------------------------------------------------------------------------
Class M 4/30/99(2) 0.00 (0.84) (0.84)
10/31/98 0.00 (0.95) (0.95)
10/31/97(4) (0.46) 0.00 (0.46)
10/31/96(3) 0.00 0.00 0.00
9/30/96(8) 0.00 0.00 0.00
- -------------------------------------------------------------------------------------------------------
IDEX NWQ Class A 4/30/99 0.00 (0.27) (0.27)
VALUE EQUITY 10/31/98 0.00 (0.04) (0.04)
10/31/97(6) 0.00 0.00 0.00
------------------------------------------------------------------------------
Class B 4/30/99 0.00 (0.27) (0.27)
10/31/98 0.00 (0.04) (0.04)
10/31/97(6) 0.00 0.00 0.00
------------------------------------------------------------------------------
Class M 4/30/99(2) 0.00 (0.27) (0.27)
10/31/98 0.00 (0.04) (0.04)
10/31/97(6) 0.00 0.00 0.00
- -------------------------------------------------------------------------------------------------------
IDEX LKCM Class A 4/30/99 (0.10) (0.21) (0.31)
STRATEGIC TOTAL RETURN 10/31/98 (0.21) (0.67) (0.88)
10/31/97 (0.19) (0.32) (0.51)
10/31/96(3) 0.00 0.00 0.00
9/30/96 (0.17) (0.15) (0.32)
9/30/95(5) (0.10) 0.00 (0.10)
------------------------------------------------------------------------------
Class B 4/30/99 (0.05) (0.21) (0.26)
10/31/98 (0.10) (0.67) (0.77)
10/31/97 (0.10) (0.32) (0.42)
10/31/96(3) 0.00 0.00 0.00
9/30/96 (0.09) (0.15) (0.24)
------------------------------------------------------------------------------
Class M 4/30/99(2) (0.05) (0.21) (0.26)
10/31/98 (0.12) (0.67) (0.79)
10/31/97 (0.11) (0.32) (0.43)
10/31/96(3) 0.00 0.00 0.00
9/30/96 (0.11) (0.15) (0.26)
9/30/95(5) (0.05) 0.00 (0.05)
- -------------------------------------------------------------------------------------------------------
</TABLE>
*Please see notes to Financial Highlights on page 62
56
<PAGE>
<TABLE>
<CAPTION>
NET ASSET YEAR OR NET ASSET NET ASSETS
VALUE AT END PERIOD VALUE AT END TOTAL AT END OF
OF PERIOD ENDED OF PERIOD RETURN(9) PERIOD(000'S)
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
IDEX JCC GROWTH CLASS A 4/30/99 $42.03 44.84% $1,246,488
10/31/98 29.35 35.21 817,749
10/31/97 25.04 16.40 614,544
10/31/96(3) 21.97 (1.09) 565.032
9/30/96 22.21 22.41 567,564
9/30/95 27.84 36.70 485,935
---------------------------------------------------------------------
CLASS B 4/30/99 40.92 44.60 168,414
10/31/98 28.63 34.96 40,809
10/31/97 24.55 16.11 13,046
10/31/96(3) 21.60 (1.14) 5,242
9/30/96 21.85 21.87 4,536
---------------------------------------------------------------------
CLASS M 4/30/99(2) 41.09 44.63 83,435
10/31/98 28.74 35.00 58,265
10/31/97 24.62 16.19 14,295
10/31/96(3) 21.65 (1.19) 11,016
9/30/96 21.91 22.15 11,167
9/30/95 22.64 36.32 5,593
---------------------------------------------------------------------
CLASS T 4/30/99 42.64 44.97 1,087,778
10/31/98(4) 29.74 35.53 755,770
10/31/97 25.31 16.54 603,129
10/31/96(3) 22.17 (1.03) 573,884
9/30/96(7) 22.41 0.81 585,505
- -------------------------------------------------------------------------------------------------
IDEX C.A.S.E. CLASS A 4/30/99 11.96 28.12 4,058
GROWTH 10/31/98 10.14 (14.83) 4,284
10/31/97(4) 12.90 28.31 3,920
10/31/96(3) 10.56 0.96 1,675
9/30/96(8) 10.46 4.60 1,455
---------------------------------------------------------------------
CLASS B 4/30/99 11.78 27.85 3,007
10/31/98 10.02 (15.40) 2,460
10/31/97(4) 12.85 27.62 2,436
10/31/96(3) 10.51 0.96 1,159
9/30/96(8) 10.41 4.10 1,100
---------------------------------------------------------------------
CLASS M 4/30/99(2) 11.81 27.89 964
10/31/98 10.04 (15.31) 879
10/31/97(4) 12.86 27.73 2,028
10/31/96(3) 10.52 0.96 687
9/30/96(8) 10.42 4.20 613
- -------------------------------------------------------------------------------------------------
IDEX NWQ CLASS A 4/30/99 12.35 14.22 8,750
VALUE EQUITY 10/31/98 11.09 (4.96) 8,035
10/31/97(6) 11.71 17.14 5,305
---------------------------------------------------------------------
CLASS B 4/30/99 12.19 13.88 5,471
10/31/98 10.98 (5.55) 5,020
10/31/97(6) 11.67 16.65 2,850
---------------------------------------------------------------------
CLASS M 4/30/99(2) 12.21 13.93 1,747
10/31/98 11.00 (5.46) 2,013
10/31/97(6) 11.67 16.73 1,607
- -------------------------------------------------------------------------------------------------
IDEX LKCM CLASS A 4/30/99 17.52 10.28 36,062
STRATEGIC TOTAL RETURN 10/31/98 16.18 7.43 32,055
10/31/97 15.91 22.80 21,629
10/31/96(3) 13.43 1.20 11,744
9/30/96 13.27 16.00 11,314
9/30/95(5) 11.74 18.43 5,167
---------------------------------------------------------------------
CLASS B 4/30/99 17.50 9.93 12,653
10/31/98 16.17 6.74 9,789
10/31/97 15.89 22.03 4,698
10/31/96(3) 13.42 1.13 1,684
9/30/96 13.27 15.38 1,537
---------------------------------------------------------------------
CLASS M 4/30/99(2) 17.50 9.98 7,978
10/31/98 16.17 6.85 6,977
10/31/97 15.90 22.15 4,332
10/31/96(3) 13.42 1.13 1,792
9/30/96 13.27 15.49 1,728
9/30/95(5) 11.73 17.95 281
</TABLE>
<TABLE>
<CAPTION>
RATIO OF EXPENSES TO AVERAGE NET ASSETS (10)(11) NET INVESTMENT
YEAR OR --------------------------------------------- INCOME (LOSS PORTFOLIO
PERIOD EXCLUDING INCLUDING TO AVERAGE TURNOVER
ENDED CREDITS GROSS CREDITS NET ASSETS(11) RATE(12)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
IDEX JCC GROWTH CLASS A 4/30/99 1.40% 0.00% 1.40% (0.59)% 35.87%
10/31/98 1.51 0.00 1.51 (0.55) 27.19
10/31/97 1.61 0.00 1.61 (0.10) 91.52
10/31/96(3) 1.68 0.00 1.68 (0.13) 9.40
9/30/96 1.83 0.00 1.82 (0.22) 57.80
9/30/95 1.86 0.00 1.84 (0.26) 123.26
--------------------------------------------------------------------------------------------------------
CLASS B 4/30/99 2.05 0.00 2.05 (1.24) 35.87
10/31/98 2.16 0.00 2.16 (1.20) 27.19
10/31/97 2.26 0.00 2.26 (0.75) 91.52
10/31/96(3) 2.32 0.00 2.32 (0.78) 9.40
9/30/96 2.46 0.00 2.45 (0.86) 57.80
--------------------------------------------------------------------------------------------------------
CLASS M 4/30/99(2) 1.95 0.00 1.95 (1.14) 35.87
10/31/98 2.06 0.00 2.06 (1.10) 27.19
10/31/97 2.16 0.00 2.16 (0.65) 91.52
10/31/96(3) 2.23 0.00 2.23 (0.68) 9.40
9/30/96 2.34 0.00 2.33 (0.77) 57.80
9/30/95 2.41 0.00 2.38 (0.81) 123.26
--------------------------------------------------------------------------------------------------------
CLASS T 4/30/99 1.05 0.00 1.05 (0.24) 35.87
10/31/98(4) 1.16 0.00 1.16 (0.20) 27.19
10/31/97 1.26 0.00 1.26 0.25 91.52
10/31/96(3) 1.33 0.00 1.33 (0.20) 9.40
9/30/96(7) 1.18 0.00 1.1 0.36 57.80
--------------------------------------------------------------------------------------------------------
IDEX C.A.S.E. CLASS A 4/30/99 1.75 3.04 1.75 (1.16) 71.55
GROWTH 10/31/98 1.85 2.44 1.85 (0.73) 147.01
10/31/97(4) 1.85 4.62 1.85 (0.34) 183.06
10/31/96(3) 1.85 6.79 1.84 0.27 20.69
9/30/96(8) 2.85 5.89 2.85 10.00 654.49
--------------------------------------------------------------------------------------------------------
CLASS B 4/30/99 2.40 3.69 2.40 (1.81) 71.55
10/31/98 2.50 3.09 2.50 (1.38) 147.01
10/31/97(4) 2.50 5.27 2.50 (0.99) 183.06
10/31/96(3) 2.50 7.44 2.49 0.38 20.69
9/30/96(8) 3.50 6.54 3.50 9.35 654.49
--------------------------------------------------------------------------------------------------------
CLASS M 4/30/99(2) 2.30 3.59 2.30 (1.71) 71.55
10/31/98 2.40 2.99 2.40 (1.28) 147.01
10/31/97(4) 2.40 5.17 2.40 (0.89) 183.06
10/31/96(3) 2.40 7.34 2.39 0.28 20.69
9/30/96(8) 3.40 6.44 3.40 9.45 654.49
--------------------------------------------------------------------------------------------------------
IDEX NWQ CLASS A 4/30/99 1.75 2.51 1.75 0.22 15.92
VALUE EQUITY 10/31/98 1.85 2.51 1.85 0.00 30.43
10/31/97(6) 1.50 4.05 1.50 0.38 6.40
--------------------------------------------------------------------------------------------------------
CLASS B 4/30/99 2.40 3.16 2.40 (0.43) 15.92
10/31/98 2.50 3.16 2.50 (0.65) 30.43
10/31/97(6) 2.15 4.70 2.15 (0.28) 6.40
--------------------------------------------------------------------------------------------------------
CLASS M 4/30/99(2) 2.30 3.06 2.30 (0.33) 15.92
10/31/98 2.40 3.06 2.40 (0.55) 30.43
10/31/97(6) 2.05 4.60 2.05 (0.18) 6.40
--------------------------------------------------------------------------------------------------------
IDEX LKCM CLASS A 4/30/99 1.74 1.86 1.74 1.10 35.01
STRATEGIC TOTAL RETURN 10/31/98 1.85 1.92 1.85 1.30 32.12
10/31/97 1.85 2.28 1.85 1.41 51.44
10/31/96(3) 1.85 2.76 1.82 1.47 5.50
9/30/96 1.85 2.79 1.79 1.67 40.58
9/30/95(5) 2.99 4.57 2.85 0.85 34.67
--------------------------------------------------------------------------------------------------------
CLASS B 4/30/99 2.39 2.51 2.39 0.45 35.01
10/31/98 2.50 2.57 2.50 0.65 32.12
10/31/97 2.50 2.93 2.50 0.76 51.44
10/31/96(3) 2.50 3.40 2.47 0.82 5.50
9/30/96 2.50 3.44 2.44 1.02 40.58
--------------------------------------------------------------------------------------------------------
CLASS M 4/30/99(2) 2.29 2.41 2.29 0.55 35.01
10/31/98 2.40 2.47 2.40 0.75 32.12
10/31/97 2.40 2.83 2.40 0.86 51.44
10/31/96(3) 2.40 3.30 2.37 0.92 5.50
9/30/96 2.40 3.34 2.64 1.12 40.58
9/30/95(5) 3.54 5.12 3.40 0.30 34.67
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*Please see notes to Financial Highlights on page 62
57
<PAGE>
<TABLE>
<CAPTION>
INVESTMENT OPERATIONS
------------------------------------------
YEAR OR NET ASSET VALUE NET NET REALIZED
PERIOD BEGINNING INVESTMENT & UNREALIZED TOTAL
ENDED OF PERIOD INCOME (LOSS) GAIN (LOSS) OPERATIONS
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
IDEX DEAN Class A 4/30/99 $13.14 $0.28 $0.11 $0.39
ASSET ALLOCATION 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(3) 11.03 0.02 0.14 0.16
9/30/96 10.00 0.08 1.03 1.11
-------------------------------------------------------------------------------------------
Class B 4/30/99 13.13 0.24 0.11 0.35
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(3) 11.02 0.02 0.14 0.16
-------------------------------------------------------------------------------------------
Class M 4/30/99(2) 13.13 0.24 0.11 0.35
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(3) 11.03 0.01 0.14 0.15
9/30/96 10.00 0.02 1.03 1.05
- --------------------------------------------------------------------------------------------------------------------
IDEX JCC Class A 4/30/99 14.75 0.07 3.96 4.03
BALANCED 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(3) 13.47 0.01 0.10 0.11
9/30/96 11.47 0.24 2.25 2.49
9/30/95(5) 10.00 0.05 1.47 1.52
-------------------------------------------------------------------------------------------
Class B 4/30/99 14.74 0.01 3.96 3.97
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(3) 13.46 0.00 0.10 0.10
9/30/96 11.47 0.15 2.25 2.40
-------------------------------------------------------------------------------------------
Class M 4/30/99(2) 14.74 0.03 3.96 3.99
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(3) 13.46 0.01 0.10 0.11
9/30/96 11.47 0.16 2.25 2.41
9/30/95(5) 10.00 0.01 1.47 1.48
- --------------------------------------------------------------------------------------------------------------------
IDEX JCC Class A 4/30/99 9.84 0.28 (0.01) 0.27
FLEXIBLE INCOME 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(3) 9.19 0.05 0.14 0.19
9/30/96 9.17 0.60 0.00 0.60
9/30/95 8.83 0.61 0.37 0.98
-------------------------------------------------------------------------------------------
Class B 4/30/99 9.83 0.25 (0.01) 0.24
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(3) 9.18 0.05 0.14 0.19
9/30/96 9.17 0.53 0.00 0.53
-------------------------------------------------------------------------------------------
Class M 4/30/99(2) 9.84 0.25 (0.01) 0.24
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(3) 9.18 0.05 0.14 0.19
9/30/96 9.17 0.54 0.00 0.54
9/30/95 8.83 0.56 0.37 0.93
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
DISTRIBUTIONS
----------------------------------------------
YEAR OR FROM NET FROM NET
PERIOD INVESTMENT REALIZED TOTAL
ENDED INCOME CAPITAL GAINS DISTRIBUTIONS
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
IDEX DEAN Class A 4/30/99 $(0.11) $(0.65) $(0.76)
ASSET ALLOCATION 10/31/98 (0.21) (0.73) (0.94)
10/31/97 (0.17) (0.04) (0.21)
10/31/96(3) 0.00 0.00 0.00
9/30/96 (0.08) 0.00 (0.08)
------------------------------------------------------------------------------
Class B 4/30/99 (0.07) (0.65) (0.72)
10/31/98 (0.13) (0.73) (0.86)
10/31/97 (0.09) (0.04) (0.13)
10/31/96(3) 0.00 0.00 0.00
------------------------------------------------------------------------------
Class M 4/30/99(2) (0.07) (0.65) (0.72)
10/31/98 (0.14) (0.73) (0.87)
10/31/97 (0.10) (0.04) (0.14)
10/31/96(3) 0.00 0.00 0.00
9/30/96 (0.02) 0.00 0.02
- -------------------------------------------------------------------------------------------------------
IDEX JCC Class A 4/30/99 (0.04) (0.08) (0.12)
BALANCED 10/31/98 (0.15) (1.35) (1.50)
10/31/97 (0.20) (1.75) (1.95)
10/31/96(3) 0.00 0.00 0.00
9/30/96 (0.21) (0.28) (0.49)
9/30/95(5) (0.05) 0.00 (0.05)
------------------------------------------------------------------------------
Class B 4/30/99 (0.01) (0.08) (0.09)
10/31/98 (0.06) (1.35) (1.41)
10/31/97 (0.12) (1.75) (1.87)
10/31/96(3) 0.00 0.00 0.00
9/30/96 (0.13) (0.28) (0.41)
------------------------------------------------------------------------------
Class M 4/30/99(2) (0.02) (0.08) (0.10)
10/31/98 (0.07) (1.35) (1.42)
10/31/97 (0.13) (1.75) (1.88)
10/31/96(3) 0.00 0.00 0.00
9/30/96 (0.14) (0.28) (0.42)
9/30/95(5) (0.01) 0.00 (0.01)
- -------------------------------------------------------------------------------------------------------
IDEX JCC Class A 4/30/99 (0.28) 0.00 (0.28)
FLEXIBLE INCOME 10/31/98 (0.62) 0.00 (0.62)
10/31/97 (0.61) 0.00 (0.61)
10/31/96(3) (0.05) 0.00 (0.05)
9/30/96 (0.58) 0.00 (0.58)
9/30/95 (0.64) 0.00 (0.64)
------------------------------------------------------------------------------
Class B 4/30/99 (0.24) 0.00 (0.24)
10/31/98 (0.56) 0.00 (0.56)
10/31/97 (0.55) 0.00 (0.55)
10/31/96(3) (0.05) 0.00 (0.05)
9/30/96 (0.52) 0.00 (0.52)
------------------------------------------------------------------------------
Class M 4/30/99(2) (0.25) 0.00 (0.25)
10/31/98 (0.57) 0.00 (0.57)
10/31/97 (0.56) 0.00 (0.56)
10/31/96(3) (0.05) 0.00 (0.05)
9/30/96 (0.53) 0.00 (0.53)
9/30/95 (0.59) 0.00 (0.59)
- -------------------------------------------------------------------------------------------------------
</TABLE>
*Please see notes to Financial Highlights on page 62
58
<PAGE>
<TABLE>
<CAPTION>
NET ASSET YEAR OR NET ASSET NET ASSETS
VALUE AT END PERIOD VALUE AT END TOTAL AT END OF
OF PERIOD ENDED OF PERIOD RETURN(9) PERIOD(000'S)
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
IDEX DEAN
ASSET ALLOCATION CLASS A 4/30/99 $12.77 3.13% $14,636
10/31/98 13.14 7.25 15,747
10/31/97 13.19 19.84 12,291
10/31/96(3) 11.19 1.45 8,396
9/30/96 11.03 11.07 7,401
--------------------------------------------------------------------------
CLASS B 4/30/99 12.76 2.79 14,938
10/31/98 13.13 6.56 14,679
10/31/97 13.18 19.08 9,747
10/31/96(3) 11.18 1.45 5,013
--------------------------------------------------------------------------
CLASS M 4/30/99(2) 12.76 2.84 6,490
10/31/98 13.13 6.67 7,342
10/31/97 13.18 19.20 5,088
10/31/96(3) 11.18 1.36 4,758
9/30/96 11.03 10.50 4,641
- ----------------------------------------------------------------------------------------------
IDEX JCC CLASS A 4/30/99 18.66 27.42 44,992
BALANCED 10/31/98 14.75 14.69 22,995
10/31/97 14.34 22.96 13,414
10/31/96(3) 13.58 0.81 8,402
9/30/96 13.47 22.12 8,056
9/30/95(5) 11.47 15.27 3,670
--------------------------------------------------------------------------
CLASS B 4/30/99 18.62 27.03 46,156
10/31/98 14.74 13.97 11,916
10/31/97 14.33 22.19 2,583
10/31/96(3) 13.56 0.74 878
9/30/96 13.46 21.38 687
--------------------------------------------------------------------------
CLASS M 4/30/99(2) 18.63 27.10 17,650
10/31/98 14.74 14.08 4,897
10/31/97 14.33 22.31 1,561
10/31/96(3) 13.57 0.81 967
9/30/96 13.46 21.49 943
9/30/95(5) 11.47 14.77 3,365
- -----------------------------------------------------------------------------------------------
IDEX JCC CLASS A 4/30/99 9.83 2.59 15,480
FLEXIBLE INCOME 10/31/98 9.84 7.43 14,970
10/31/97 9.75 11.53 15,532
10/31/96(3) 9.33 2.08 17,001
9/30/96 9.19 6.73 17,065
9/30/95 9.17 11.57 19,786
--------------------------------------------------------------------------
CLASS B 4/30/99 9.83 2.26 6,257
10/31/98 9.83 6.74 2,387
10/31/97 9.75 10.79 746
10/31/96(3) 9.32 2.04 522
9/30/96 9.18 5.94 494
--------------------------------------------------------------------------
CLASS M 4/30/99(2) 9.83 2.31 3,458
10/31/98 9.84 6.84 2,207
10/31/97 9.75 10.91 928
10/31/96(3) 9.32 2.04 846
9/30/96 9.18 6.03 883
9/30/95 9.17 10.95 558
- -----------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
RATIO OF EXPENSES TO AVERAGE NET ASSETS(10)(11) NET INVESTMENT
YEAR OR ---------------------------------------------- INCOME (LOSS PORTFOLIO
PERIOD EXCLUDING INCLUDING TO AVERAGE TURNOVER
ENDED CREDITS GROSS CREDITS NET ASSETS(11) RATE(12)
<S> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
IDEX DEAN
ASSET ALLOCATION CLASS A 4/30/99 1.75% 1.88% 1.75% 1.91% 25.89%
10/31/98 1.85 1.87 1.85 1.82 55.45
10/31/97 1.85 2.30 1.85 1.57 71.63
10/31/96(3) 1.85 2.65 1.85 1.26 2.38
9/30/96 2.85 3.20 2.85 0.72 56.22
---------------------------------------------------------------------------------------------------------------
CLASS B 4/30/99 2.40 2.53 2.40 1.26 25.89
10/31/98 2.50 2.52 2.50 1.17 55.45
10/31/97 2.50 2.95 2.50 0.92 71.63
10/31/96(3) 2.50 3.30 2.50 0.61 2.38
---------------------------------------------------------------------------------------------------------------
CLASS M 4/30/99(2) 2.30 2.43 2.30 1.36 25.89
10/31/98 2.40 2.42 2.40 1.27 55.45
10/31/97 2.40 2.85 2.40 1.02 71.63
10/31/96(3) 2.40 3.20 2.40 0.71 2.38
9/30/96 3.40 3.75 3.40 0.17 56.22
- ------------------------------------------------------------------------------------------------------------------------------------
IDEX JCC CLASS A 4/30/99 1.80 0.00 1.80 0.95 20.11
BALANCED 10/31/98 1.85 2.04 1.85 1.12 61.50
10/31/97 1.85 2.88 1.85 1.29 127.08
10/31/96(3) 1.85 3.44 1.85 1.84 9.08
9/30/96 1.85 3.11 1.85 1.87 175.78
9/30/95(5) 2.92 4.48 2.85 0.56 82.48
---------------------------------------------------------------------------------------------------------------
CLASS B 4/30/99 2.45 0.00 2.45 0.30 20.11
10/31/98 2.50 2.69 2.50 0.47 61.50
10/31/97 2.50 3.53 2.50 0.64 127.08
10/31/96(3) 2.50 4.09 2.50 1.18 9.08
9/30/96 2.50 3.76 2.50 1.22 175.78
---------------------------------------------------------------------------------------------------------------
CLASS M 4/30/99(2) 2.35 0.00 2.35 0.40 20.11
10/31/98 2.40 2.59 2.40 0.57 61.50
10/31/97 2.40 3.43 2.40 0.74 127.08
10/31/96(3) 2.40 3.99 2.40 1.28 9.08
9/30/96 2.40 3.66 2.40 1.32 175.78
9/30/95(5) 3.47 5.03 3.40 0.01 82.48
- ------------------------------------------------------------------------------------------------------------------------------------
IDEX JCC CLASS A 4/30/99 1.85 1.95 1.85 5.41 34.26
FLEXIBLE INCOME 10/31/98 1.83 0.00 1.83 6.22 90.63
10/31/97 1.85 2.40 1.85 6.41 135.53
10/31/96(3) 1.85 2.98 1.85 6.15 16.16
9/30/96 1.85 2.07 1.85 6.46 135.38
9/30/95 1.87 1.94 1.85 7.03 149.58
---------------------------------------------------------------------------------------------------------------
CLASS B 4/30/99 2.50 2.60 2.50 4.76 34.26
10/31/98 2.48 0.00 2.48 5.57 90.63
10/31/97 2.50 3.05 2.50 5.76 135.53
10/31/96(3) 2.50 3.63 2.50 5.50 16.16
9/30/96 2.50 2.72 2.50 5.81 135.38
---------------------------------------------------------------------------------------------------------------
CLASS M 4/30/99(2) 2.40 2.50 2.40 4.86 34.26
10/31/98 2.38 0.00 2.38 5.67 90.63
10/31/97 2.40 2.95 2.40 5.86 135.53
10/31/96(3) 2.40 3.53 2.40 5.60 16.16
9/30/96 2.40 2.62 2.40 5.91 135.38
9/30/95 2.42 2.49 2.40 6.48 149.58
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*Please see notes to Financial Highlights on page 62
59
<PAGE>
<TABLE>
<CAPTION>
INVESTMENT OPERATIONS
------------------------------------------
YEAR OR NET ASSET VALUE NET NET REALIZED
PERIOD BEGINNING INVESTMENT & UNREALIZED TOTAL
ENDED OF PERIOD INCOME (LOSS) GAIN (LOSS) OPERATIONS
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
IDEX AEGON Class A 4/30/99 $10.43 $0.33 $(0.01) $0.32
INCOME PLUS 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(3) 10.41 0.04 0.22 0.26
9/30/96 10.36 0.72 0.04 0.76
9/30/95 9.75 0.75 0.71 1.46
-------------------------------------------------------------------------------------------
Class B 4/30/99 10.42 0.29 (0.01) 0.28
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(3) 10.40 0.05 0.22 0.27
9/30/96 10.35 0.65 0.04 0.69
-------------------------------------------------------------------------------------------
Class M11 4/30/99(2) 10.42 0.29 (0.01) 0.28
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(3) 10.40 0.05 0.22 0.27
9/30/96 10.35 0.66 0.04 0.70
9/30/95 9.74 0.69 0.71 1.40
- --------------------------------------------------------------------------------------------------------------------
IDEX AEGON Class A 4/30/99 11.94 0.22 (0.14) 0.08
TAX EXEMPT 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(3) 11.36 0.05 0.04 0.09
9/30/96 11.34 0.55 0.10 0.65
9/30/95 11.10 0.55 0.29 0.84
-------------------------------------------------------------------------------------------
Class B 4/30/99 11.94 0.17 (0.14) 0.03
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(3) 11.36 0.04 0.04 0.08
9/30/96 11.34 0.48 0.10 0.58
-------------------------------------------------------------------------------------------
Class M 4/30/99(2) 11.94 0.19 (0.14) 0.05
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(3) 11.36 0.04 0.04 0.08
9/30/96 11.34 0.52 0.10 0.62
9/30/95 11.10 0.52 0.29 0.81
- --------------------------------------------------------------------------------------------------------------------
IDEX AEGON Class A 4/30/99(1) 10.00 (0.01) 0.92 0.91
GOLDMAN SACHS -------------------------------------------------------------------------------------------
GROWTH Class B 4/30/99(2) 10.00 (0.02) 0.92 0.90
-------------------------------------------------------------------------------------------
Class M 4/30/99(1)(2) 10.00 (0.01) 0.92 0.91
- --------------------------------------------------------------------------------------------------------------------
IDEX AEGON Class A 4/30/99(1) 10.00 (0.01) 0.17 0.16
T. ROWE PRICE -------------------------------------------------------------------------------------------
SMALL CAP Class B 4/30/99(1) 10.00 (0.03) 0.17 0.14
-------------------------------------------------------------------------------------------
Class M 4/30/99(1)(2) 10.00 (0.02) 0.17 0.15
- --------------------------------------------------------------------------------------------------------------------
IDEX AEGON Class A 4/30/99(1) 10.00 (0.01) 1.80 1.79
PILGRIM BAXTER -------------------------------------------------------------------------------------------
MID CAP GROWTH Class B 4/30/99(1) 10.00 (0.02) 1.80 1.78
-------------------------------------------------------------------------------------------
Class M 4/30/99(1)(2) 10.00 (0.02) 1.80 1.78
- --------------------------------------------------------------------------------------------------------------------
IDEX AEGON Class A 4/30/99(1) 10.00 0.00 1.15 1.15
SALOMON ALL CAP -------------------------------------------------------------------------------------------
Class B 4/30/99(1) 10.00 (0.01) 1.15 1.14
--------------------------------------------------------------------------------------------
Class M 4/30/99(1)(2) 10.00 (0.01) 1.15 1.14
- --------------------------------------------------------------------------------------------------------------------
IDEX AEGON Class A 4/30/99(1) 10.00 0.02 0.70 0.72
T. ROWE PRICE -------------------------------------------------------------------------------------------
DIVIDEND GROWTH Class B 4/30/99(1) 10.00 0.01 0.70 0.71
-------------------------------------------------------------------------------------------
Class M 4/30/99(1)(2) 10.00 0.01 0.70 0.71
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
DISTRIBUTIONS
-------------------------------------------------
YEAR OR FROM NET FROM NET
PERIOD INVESTMENT REALIZED TOTAL
ENDED INCOME CAPITAL GAINS DISTRIBUTIONS
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
IDEX AEGON Class A 4/30/99 $(0.33) $(0.20) $(0.53)
INCOME PLUS 10/31/98 (0.70) (0.22) (0.92)
10/31/97 (0.75) (0.10) (0.85)
10/31/96(3) (0.06) 0.00 (0.06)
9/30/96 (0.71) 0.00 (0.71)
9/30/95 (0.75) (0.10) (0.85)
-----------------------------------------------------------------------
Class B 4/30/99 (0.29) (0.20) (0.49)
10/31/98 (0.63) (0.22) (0.85)
10/31/97 (0.68) (0.10) (0.78)
10/31/96(3) (0.06) 0.00 (0.06)
9/30/96 (0.64) 0.00 (0.64)
-----------------------------------------------------------------------
Class M(11) 4/30/99(2) (0.29) (0.20) (0.49)
10/31/98 (0.64) (0.22) (0.86)
10/31/97 (0.69) (0.10) (0.79)
10/31/96(3) (0.06) 0.00 (0.06)
9/30/96 (0.65) 0.00 (0.65)
9/30/95 (0.69) (0.10) (0.79)
- ------------------------------------------------------------------------------------------------
IDEX AEGON Class A 4/30/99 (0.23) (0.20) (0.43)
TAX EXEMPT 10/31/98 (0.48) (0.15) (0.63)
10/31/97 (0.53) (0.08) (0.61)
10/31/96(3) (0.05) 0.00 (0.05)
9/30/96 (0.56) (0.07) (0.63)
9/30/95 (0.56) (0.04) (0.60)
-----------------------------------------------------------------------
Class B 4/30/99 (0.18) (0.20) (0.38)
10/31/98 (0.40) (0.15) (0.55)
10/31/97 (0.45) (0.08) (0.53)
10/31/96(3) (0.04) 0.00 (0.04)
9/30/96 (0.49) (0.07) (0.56)
-----------------------------------------------------------------------
Class M 4/30/99(2) (0.20) (0.20) (0.40)
10/31/98 (0.45) (0.15) (0.60)
10/31/97 (0.50) (0.08) (0.58)
10/31/96(3) (0.04) 0.00 (0.04)
9/30/96 (0.53) (0.07) (0.60)
9/30/95 (0.53) (0.04) (0.57)
- ------------------------------------------------------------------------------------------------
IDEX AEGON Class A 4/30/99(1) 0.00 0.00 0.00
GOLDMAN SACHS -----------------------------------------------------------------------
GROWTH Class B 4/30/99(2) 0.00 0.00 0.00
-----------------------------------------------------------------------
Class M 4/30/99(1)(2) 0.00 0.00 0.00
- ------------------------------------------------------------------------------------------------
IDEX AEGON Class A 4/30/99(1) 0.00 0.00 0.00
T. ROWE PRICE -----------------------------------------------------------------------
SMALL CAP Class B 4/30/99(2) 0.00 0.00 0.00
-----------------------------------------------------------------------
Class M 4/30/99(1)(2) 0.00 0.00 0.00
- ------------------------------------------------------------------------------------------------
IDEX AEGON Class A 4/30/99(1) 0.00 0.00 0.00
PILGRIM BAXTER -----------------------------------------------------------------------
MID CAP GROWTH Class B 4/30/99(1) 0.00 0.00 0.00
-----------------------------------------------------------------------
Class M 4/30/99(1)(2) 0.00 0.00 0.00
- ------------------------------------------------------------------------------------------------
IDEX AEGON Class A 4/30/99(1) 0.00 0.00 0.00
SALOMON ALL CAP -----------------------------------------------------------------------
Class B 4/30/99(1) 0.00 0.00 0.00
-----------------------------------------------------------------------
Class M 4/30/99(1)(2) 0.00 0.00 0.00
- ------------------------------------------------------------------------------------------------
IDEX AEGON Class A 4/30/99(1) 0.00 0.00 0.00
T. ROWE PRICE -----------------------------------------------------------------------
DIVIDEND GROWTH Class B 4/30/99(1) 0.00 0.00 0.00
-----------------------------------------------------------------------
Class M 4/30/99(1)(2) 0.00 0.00 0.00
- ------------------------------------------------------------------------------------------------
</TABLE>
*Please see notes to Financial Highlights on page 62
60
<PAGE>
<TABLE>
YEAR OR NET ASSET NET ASSETS
PERIOD VALUE AT END TOTAL AT END OF
ENDED OF PERIOD RETURN(9) PERIOD (000'S)
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
IDEX AEGON Class A 4/30/99 $10.22 3.05% $66,876
INCOME PLUS 10/31/98 10.43 3.54 63,494
10/31/97 10.96 11.86 65,612
10/31/96(3) 10.61 2.53 66,285
9/30/96 10.41 7.64 65,252
9/30/95 10.36 15.85 68,746
----------------------------------------------------------------------
Class B 4/30/99 10.21 2.66 9,905
10/31/98 10.42 2.87 5,041
10/31/97 10.96 11.10 1,761
10/31/96(3) 10.61 2.59 804
9/30/96 10.40 6.95 774
----------------------------------------------------------------------
Class M(11) 4/30/99(2) 10.21 2.72 8,846
10/31/98 10.42 2.97 4,073
10/31/97 10.96 11.22 3,480
10/31/96(3) 10.61 2.59 2,781
9/30/96 10.40 7.05 2,684
9/30/95 10.35 15.08 1,980
- -----------------------------------------------------------------------------------------------
IDEX AEGON Class A 4/30/99 11.59 0.67 21,548
TAX EXEMPT 10/31/98 11.94 7.19 22,313
10/31/97 11.75 8.68 23,320
10/31/96(3) 11.40 0.76 24,439
9/30/96 11.36 5.89 24,708
9/30/95 11.34 7.75 27,401
----------------------------------------------------------------------
Class B 4/30/99 11.59 0.29 1,082
10/31/98 11.94 6.50 654
10/31/97 11.74 7.93 377
10/31/96(3) 11.40 0.71 198
9/30/96 11.36 5.21 189
----------------------------------------------------------------------
Class M 4/30/99(2) 11.59 0.45 2,404
10/31/98 11.94 6.92 1,607
10/31/97 11.75 8.39 921
10/31/96(3) 11.40 0.74 939
9/30/96 11.36 5.63 907
9/30/95 11.34 7.48 454
----------------------------------------------------------------------
IDEX AEGON Class A 4/30/99(1) 10.91 9.15 281
GOLDMAN SACHS ----------------------------------------------------------------------
GROWTH Class B 4/30/99(1) 10.90 9.04 285
----------------------------------------------------------------------
Class M 4/30/99(1)(2) 10.91 9.06 254
- -----------------------------------------------------------------------------------------------
IDEX AEGON Class A 4/30/99(1) 10.16 1.55 503
T. ROWE PRICE ----------------------------------------------------------------------
SMALL CAP Class B 4/30/99(1) 10.14 1.45 400
----------------------------------------------------------------------
Class M 4/30/99(1)(2) 10.15 1.46 349
- -----------------------------------------------------------------------------------------------
IDEX AEGON Class A 4/30/99(1) 11.79 17.91 291
PILGRIM BAXTER ----------------------------------------------------------------------
MID CAP GROWTH Class B 4/30/99(1) 11.78 17.80 235
----------------------------------------------------------------------
Class M 4/30/99(1)(2) 11.78 17.81 239
- -----------------------------------------------------------------------------------------------
IDEX AEGON Class A 4/30/99(1) 11.15 11.53 199
SALOMON ALL CAP ----------------------------------------------------------------------
Class B 4/30/99(2) 11.14 11.42 200
----------------------------------------------------------------------
Class M 4/30/99(1)(2) 11.14 11.44 187
- -----------------------------------------------------------------------------------------------
IDEX AEGON Class A 4/30/99(1) 10.72 7.18 285
T. ROWE PRICE ----------------------------------------------------------------------
DIVIDEND GROWTH Class B 4/30/99(2) 10.71 7.07 315
----------------------------------------------------------------------
Class M 4/30/99(1)(2) 10.71 7.09 284
- -----------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
RATIO OF EXPENSES TO AVERAGE NET ASSETS(10)(11)NET INVESTMENT
YEAR OR --------------------------------------------- INCOME (LOSS) PORTFOLIO
PERIOD EXCLUDING INCLUDING TO AVERAGE TURNOVER
ENDED CREDITS GROSS CREDITS NET ASSETS(11) RATE(12)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
IDEX AEGON Class A 4/30/99 1.27% 0.00 1.26% 6.35% 10.33%
INCOME PLUS 10/31/98 1.24 0.00 1.24 6.38 53.09
10/31/97 1.27 0.00 1.27 7.14 62.28
10/31/96(3) 1.33 0.00 1.32 5.60 1.58
9/30/96 1.33 0.00 1.31 6.89 65.96
9/30/95 1.29 0.00 1.26 7.53 25.07
---------------------------------------------------------------------------------------------------------
Class B 4/30/99 1.92 0.00 1.91 5.70 10.33
10/31/98 1.89 0.00 1.89 5.73 53.09
10/31/97 1.92 0.00 1.92 6.49 62.28
10/31/96(3) 1.98 0.00 1.97 4.95 1.58
9/30/96 1.98 0.00 1.96 6.24 65.96
---------------------------------------------------------------------------------------------------------
Class M(11) 4/30/99(2) 1.82 0.00 1.81 5.80 10.33
10/31/98 1.79 0.00 1.79 5.83 53.09
10/31/97 1.82 0.00 1.82 6.59 62.28
10/31/96(3) 1.88 0.00 1.87 5.05 1.58
9/30/96 1.88 0.00 1.86 6.34 65.96
9/30/95 1.84 0.00 1.81 6.98 25.07
---------------------------------------------------------------------------------------------------------
IDEX AEGON Class A 4/30/99 1.38 1.49 1.35 3.74 21.91
TAX EXEMPT 10/31/98 1.23 1.27 1.23 4.08 42.42
10/31/97 1.00 1.63 1.00 4.60 71.29
10/31/96(3) 1.00 1.89 1.00 4.60 3.79
9/30/96 1.00 1.46 1.00 4.88 71.05
9/30/95 1.02 1.35 1.00 4.83 126.48
---------------------------------------------------------------------------------------------------------
Class B 4/30/99 2.03 2.14 2.00 3.09 21.91
10/31/98 1.88 1.92 1.88 3.43 42.42
10/31/97 1.65 2.28 1.65 3.95 71.29
10/31/96(3) 1.65 2.54 1.65 3.94 3.79
9/30/96 1.65 2.11 1.65 4.23 71.05
---------------------------------------------------------------------------------------------------------
Class M 4/30/99(2) 1.63 1.74 1.60 3.49 21.91
10/31/98 1.48 1.52 1.48 3.83 42.42
10/31/97 1.25 1.88 1.25 4.35 71.29
10/31/96(3) 1.25 2.14 1.25 4.34 3.79
9/30/96 1.25 1.71 1.25 4.63 71.05
9/30/95 1.27 1.60 1.25 4.58 126.48
- ----------------------------------------------------------------------------------------------------------------------------------
IDEX AEGON Class A 4/30/99(1) 1.55 13.10 1.55 (0.45) 4.86
GOLDMAN SACHS ---------------------------------------------------------------------------------------------------------
GROWTH Class B 4/30/99(1) 2.20 13.75 2.20 (1.10) 4.86
---------------------------------------------------------------------------------------------------------
Class M 4/30/99(1)(2) 2.10 13.65 2.10 (1.00) 4.86
---------------------------------------------------------------------------------------------------------
IDEX AEGON Class A 4/30/99(1) 1.55 8.66 1.55 (0.98) 6.13
T. ROWE PRICE ---------------------------------------------------------------------------------------------------------
SMALL CAP Class B 4/30/99(1) 2.20 9.31 2.20 (1.63) 6.13
---------------------------------------------------------------------------------------------------------
Class M 4/30/99(1)(2) 2.10 9.21 2.10 (1.53) 6.13
---------------------------------------------------------------------------------------------------------
IDEX AEGON Class A 4/30/99(1) 1.55 14.22 1.55 (0.85) 76.67
PILGRIM BAXTER ---------------------------------------------------------------------------------------------------------
MID CAP GROWTH Class B 4/30/99(1) 2.20 14.87 2.20 (1.50) 76.67
---------------------------------------------------------------------------------------------------------
Class M 4/30/99(1)(2) 2.10 14.77 2.10 (1.40) 76.67
---------------------------------------------------------------------------------------------------------
IDEX AEGON Class A 4/30/99(1) 1.55 15.54 1.55 0.52 29.71
SALOMON ALL CAP ---------------------------------------------------------------------------------------------------------
Class B 4/30/99(2) 2.20 16.19 2.20 (0.13) 29.71
---------------------------------------------------------------------------------------------------------
Class M 4/30/99(1)(2) 2.10 16.09 2.10 (0.03) 29.71
---------------------------------------------------------------------------------------------------------
IDEX AEGON Class A 4/30/99(1) 1.55 13.83 1.55 1.19 11.00
T. ROWE PRICE ---------------------------------------------------------------------------------------------------------
DIVIDEND GROWTH Class B 4/30/99(2) 2.20 14.48 2.20 0.54 11.00
---------------------------------------------------------------------------------------------------------
Class M 4/30/99(1)(2) 2.10 14.38 2.10 0.64 11.00
- ---------------------------------------------------------------------------------------------------------------------------------
*Please see notes to Financial Highlights on page 62
61
</TABLE>
<PAGE>
NOTES TO FINANCIAL HIGHLIGHTS
(1) From commencement of investment operations, March 1, 1999.
(2) On March 1, 1999, the Fund changed the organizational structure of
C Shares and renamed them M Shares.
(3) For the month ended October 31, 1996. On October 1, 1996, each Fund
changed its fiscal year end from September 30 to October 31.
(4) Distributions from net realized capital gains include distributions in
excess of current net realized capital gains for IDEX Alger Aggressive
Growth Classes A, B and M, for the period ended 9/30/96, in the amount
of $1.02 and for IDEX JCC Global Classes A, B and M, for the period
ended 10/31/98 in the amount of $0.17. Dividends from net investment
income include distributions in excess of current net investment income
for IDEX GE/Scottish Equitable International Equity Classes A, B and M,
for the period ended 10/31/98 in the amount of $0.06, $0.01 and $0.02,
respectively and for IDEX JCC Capital Appreciation Classes A and M, for
the period ended 9/30/96 in the amount of $.01 nd for IDEX JCC Growth
Class T for the period ended 10/31/98 in the amount of $0.03 and for
IDEX C.A.S.E. Growth Classes A, B and M, for the period ended 10/31/97
in the amount of $.08.
(5) From commencement of investment operations, December 2, 1994.
(6) From commencement of investment operations, February 1, 1997.
(7) From commencement of investment operations, September 20, 1996.
(8) From commencement of investment operations, February 1, 1996.
(9) 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.
(10) 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).
(11) 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.
(12) Periods of less than one year are not annualized.
62
<PAGE>
APPENDIX A
BRIEF EXPLANATION OF RATING CATEGORIES
<TABLE>
<CAPTION>
BOND RATING EXPLANATION
------------- --------------------------------------------------------------------------------
<S> <C> <C>
STANDARD & POOR'S CORPORATION AAA Highest rating; extremely strong capacity to pay principal and interest.
AA High quality; very strong capacity to pay principal and interest.
A Strong capacity to pay principal and interest; somewhat more susceptible to
the adverse effects of changing circumstances and economic conditions.
BBB Adequate capacity to pay principal and interest; normally exhibit adequate
protection parameters, but adverse economic conditions or changing circumstances
more likely to lead to a weakened capacity to pay principal and interest than
for higher rated bonds.
BB,B, and Predominantly speculative with respect to the issuer's capacity to meet
CC,CC,C required interest and principal payments. BB - lowest degree of speculation;
C - the highest degree of speculation. Quality and protective characteristics
outweighed by large uncertainties or major risk exposure to adverse conditions.
D In default.
</TABLE>
PLUS (+) OR MINUS (-) - The ratings from "AA" to "BBB" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
UNRATED - Indicates that no public rating has been requested, that there is
insufficient information on which to base a rating, or that S&P does not rate a
particular type of obligation as a matter of policy.
<TABLE>
<CAPTION>
<S> <C> <C>
MOODY'S INVESTORS SERVICE, INC. Aaa Highest quality, smallest degree of investment risk.
Aa High quality; together with Aaa
bonds, they compose the
high-grade bond group.
A Upper-medium grade obligations; many favorable investment attributes.
Baa Medium-grade obligations; neither highly protected nor poorly secured. Interest
and principal appear adequate for the present but certain protective elements may
be lacking or may be unreliable over any great length of time.
Ba More uncertain, with speculative elements. Protection of interest and principal
payments not well safeguarded during good and bad times.
B Lack characteristics of desirable investment; potentially low assurance of timely
interest and principal payments or maintenance of other contract terms over time.
Caa Poor standing, may be in default; elements of danger with respect to principal or
interest payments.
Ca Speculative in a high degree; could be in default or have other marked short-
comings.
C Lowest-rated; extremely poor prospects of ever attaining investment standing.
</TABLE>
UNRATED - Where no rating has been assigned or where a rating has been suspended
or withdrawn, it may be for reasons unrelated to the quality of the issue.
Should no rating be assigned, the reason may be one of the following:
1. An application for rating was not received or accepted.
2. The issue or issuer belongs to a group of securities or companies that
are not rated as a matter of policy.
3. There is a lack of essential data pertaining to the issue or issuer.
4. The issue was privately placed, in which case the rating is not
published in Moody's publications.
Suspension or withdrawal may occur if new and material circumstances arise, the
effects of which preclude satisfactory analysis; if there is no longer available
reasonable up-to-date data to permit a judgment to be formed; if a bond is
called for redemption; or for other reasons.
A-1
<PAGE>
NEW ACCOUNT APPLICATION [IDEX LOGO]
- --------------------------------------------------------------------------------
TO ESTABLISH A NEW ACCOUNT, COMPLETE THIS APPLICATION, SIGN IT AND ENCLOSE YOUR
INVESTMENT CHECK. FOR ASSISTANCE CALL US AT 1-888-233-4339. TO ESTABLISH AN IRA,
YOU MUST USE AN IRA APPLICATION, NOT THIS FORM. MAIL TO: IDEX INVESTOR SERVICES,
INC., P.O. BOX 9015, CLEARWATER, FL 33758-9015
SECTION 1. ACCOUNT INFORMATION
- --------------------------------------------------------------------------------
[ ] Individual [ ] Joint * [ ] Gift/Transfer to Minor under UGMA/UTMA
[ ] Corporation [ ] Trust [ ] Other
*Joint Tenants with Right of Survivorship, unless you specify otherwise. For
Louisiana residents only, Tenants in Common, unless you specify otherwise.
- --------------------------------------------------------------------------------
/ /
- --------------------------------------------------------------------------------
Owner, Custodian or Name and Date of Trust Agreement Birthdate
- --------------------------------------------------------------------------------
/ /
- --------------------------------------------------------------------------------
Co-Owner/Minor or Trustee Birthdate
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Address City State ZIP
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Phone Social Security Number of Owner/Minor if UGMA/UTMA
- --------------------------------------------------------------------------------
Country of Citizenship (if other than the United States)
SECTION 2. INVESTMENT SELECTION
- --------------------------------------------------------------------------------
CHECK APPLICABLE BOX(ES) FOR SHARE CLASS ($500 MINIMUM FOR CLASS A & B [$1,000
MINIMUM FOR CLASS C & M] PER FUND)
<TABLE>
<S> <C> <C> <C> <C> <C>
IDEX AGGRESSIVE EQUITY FUNDS CLASS A CLASS B CLASS C CLASS M AMOUNT
IDEX T. Rowe Price Small Cap [ ] 257 [ ] 258 [ ] 564 [ ] 259 $_______
IDEX JCC Capital Appreciation [ ] 206 [ ] 231 [ ] 554 [ ] 216 $_______
IDEX Pilgrim Baxter Mid Cap Growth [ ] 265 [ ] 266 [ ] 563 [ ] 267 $_______
IDEX Alger Aggressive Growth [ ] 208 [ ] 233 [ ] 550 [ ] 218 $_______
IDEX FOREIGN EQUITY FUNDS
IDEX GE/Scottish Equitable Int'l Equity [ ] 240 [ ] 241 [ ] 562 [ ] 242 $_______
IDEX JCC Global [ ] 209 [ ] 234 [ ] 558 [ ] 219 $_______
IDEX GROWTH EQUITY FUNDS
IDEX Salomon All Cap [ ] 260 [ ] 261 [ ] 551 [ ] 262 $_______
IDEX JCC Growth [ ] 202 [ ] 227 [ ] 560 [ ] 212 $_______
IDEX Goldman Sachs Growth [ ] 250 [ ] 251 [ ] 559 [ ] 252 $_______
IDEX C.A.S.E. Growth [ ] 239 [ ] 264 [ ] 555 [ ] 249 $_______
IDEX NWQ Value Equity [ ] 243 [ ] 244 [ ] 567 [ ] 246 $_______
IDEX T. Rowe Price Dividend Growth [ ] 254 [ ] 255 [ ] 556 [ ] 256 $_______
IDEX BALANCED FUNDS CLASS A CLASS B CLASS C CLASS M AMOUNT
IDEX Dean Asset Allocation [ ] 228 [ ] 253 [ ] 552 [ ] 238 $_______
IDEX LKCM Strategic Total Return [ ] 222 [ ] 247 [ ] 565 [ ] 232 $_______
IDEX JCC Balanced [ ] 205 [ ] 230 [ ] 553 [ ] 215 $_______
IDEX FIXED-INCOME FUNDS
IDEX JCC Flexible Income [ ] 204 [ ] 229 [ ] 557 [ ] 214 $_______
IDEX AEGON Income Plus [ ] 211 [ ] 236 [ ] 561 [ ] 221 $_______
IDEX AEGON Tax Exempt [ ] 210 [ ] 235 [ ] 566 [ ] 220 $_______
CASH EQUIVALENT FUNDS ($1,000 minimum per fund)
Money Market [ ] 217 [ ] 237 $_______
Government Securities [ ] 223 $_______
Tax-Exempt [ ] 245 $_______
Other $_______
MAKE CHECK PAYABLE TO IDEX INVESTOR SERVICES, INC. (IN U.S. FUNDS) TOTAL $ ____________________
</TABLE>
[ ] Check box if this is a new account application for a confirmed purchase
order already placed by telephone or through Fund/SERV. Order #
[ ] If no class of shares is selected, Class A shares will be purchased. No
money need accompany this application if an Automatic Investment Plan is
selected, see section 4.
SECTION 3. TRANSFER ON DEATH OPTION
- --------------------------------------------------------------------------------
Transfer on Death account registration is optional and available only for
Individual, Joint Tenants with Right of Survivorship, and UTMA registrations. It
is not available for Tenants in Common,Tenants By the Entireties, or Community
Property registrations. Only the custodian of the account may be designated as
benefi-ciary on UTMA accounts.
PB= Primary Beneficiary
CB= Contingent Beneficiary (Primary will be assumed if neither are chosen.)
Percentages will be split equally if not specified.
(ATTACH A SEPARATE SHEET TO MAKE ADDITIONAL PRIMARY OR CONTINGENT BENEFICIARY
DESIGNATIONS)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Beneficiary Name Social Security Number
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Birthdate PB/CB Percentage
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Custodian Name (required if the beneficiary is a minor)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Social Security Number (required if the beneficiary is a minor)
- --------------------------------------------------------------------------------
SECTION 4. AUTOMATIC INVESTMENT/Withdrawal OPTIONS (attatch a voided check)
- --------------------------------------------------------------------------------
AUTOMATIC INVESTMENT PLAN (AIP) ($50 minimum per month per account)
[ ] Check this box to invest from your bank account. Investments from your bank
may be made between the 3rd and the 28th only, and will occur on the 15th if
no selection is made. By establishing an AIP from your bank, your account
will automatically receive the Electronic Bank Link option.
[ ] Check this box to invest through payroll deduction. (Once this account is
established, we will mail payroll deduction forms to you.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Beginning Day/Month Fund Amount
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Beginning Day/Month Fund Amount
- --------------------------------------------------------------------------------
PLEASE ALLOW 10 DAYS PRIOR TO FIRST PURCHASE
WHEN ESTABLISHING NEW BANK INFORMATION.
- --------------------------------------------------------------------------------
IIS00102-10/99 IDEX Mutual Funds | P.O. Box 9015 | Clearwater, FL 33758-9015 |
1-888-233-4339 |Distributor: InterSecurities, Inc.
<PAGE>
[IDEX LOGO]
SYSTEMATIC WITHDRAWAL PLAN (SWP) (A minimum balance of $10,000 is required)
[ ] I wish to automatically withdraw funds from this account (select one)
ALLOW 15 DAYS PRIOR TO THE FIRST WITHDRAWAL
[ ] Monthly [ ] Quarterly [ ] Semi-Annually [ ] Annually
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Beginning Day/Month Fund Amount
ELECTRONIC BANK LINK
[ ] I authorize money to be transferred upon request between my bank and IDEX.
Please use the enclosed investment check for Electronic Bank Link information.
If you wish to establish such privileges on an account different from your
investment check, attach the appropriate deposit slip or voided check here. If
you have selected an AIP or an SWP, you will automatically receive electronic
bank link.
SECTION 5. MONEY MARKET CHECKWRITING
[ ] You will receive checks for each of the Cash Equivalent Funds indicated on
the reverse side. Accounts established for Class B and M share exchanges do
not offer checkwriting privileges and are subject to certain limitations.
[ ] Only one signature required (Signatures of all account owners will be
required on checks unless this box is checked.)
SECTION 6. REDUCED SALES CHARGE (CLASS A ONLY)
- --------------------------------------------------------------------------------
[ ] NET ASSET VALUE. Eligible to purchase shares at Net Asset Value as described
in the prospectus. Reason _______________________________________________
[ ] RIGHTS OF ACCUMULATION. My spouse, minor children and/or I own shares in
other IDEX Mutual Funds listed below which may entitle this purchase to have
a reduced sales charge under the rights of accumulation provisions described
in the prospectus.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Existing Account Name / Registration Fund Account Number
[ ] LETTER OF INTENTION. It is my intention to invest over a 13-month period an
aggregate amount of at least:
[ ] $50,000 [ ] $100,000 [ ] $250,000 [ ] $500,000
The following account also qualifies under an existing letter of intention
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Existing Account Name / Registration Fund Account Number
SECTION 7. SIGNATURE
- --------------------------------------------------------------------------------
I HEREBY AUTHORIZE EACH FUND, ITS DISTRIBUTOR AND TRANSFER AGENT TO ACCEPT
INSTRUCTIONS FROM ME (SUCH AS PURCHASE, EXCHANGE AND REDEMPTION ORDERS) MADE
THROUGH THE REGISTERED REPRESENTATIVE OF RECORD CONCERNING MY ACCOUNT.
By signing this form I certify that: I have read the IDEX Mutual Funds
prospectus and application for the fund(s) in which I am investing and agree to
be bound by their terms. I have full authority and legal capacity to purchase
Fund shares and authorize the instructions in this registration form. I am aware
that telephone exchange, redemption and purchase privileges exist and that these
privileges are automatic unless affirmatively declined. Under penalty of
perjury, I also certify that:
(a) The number shown on this form is my correct Social Security or
Taxpayer Identification Number.
(b) I am not subject to backup withholding.
[ ] I AM SUBJECT TO BACKUP WITHHOLDING.
(c) The authorizations and directions contained herein will continue until
Idex Investor Services, Inc. receives written notice of any change
with a signature guarantee, if required.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Signature (Owner, Custodian, Trustee, etc.) Date
- --------------------------------------------------------------------------------
Signature (Owner, Custodian, Trustee, etc.) Date
CASH EQUIVALENT FUND
If I am purchasing Cash Equivalent Fund shares, I agree to be bound by the terms
of the CEF Prospectus. I will examine my account statements and cancelled checks
(for checkwriting accounts) and notify Idex Investor Services, Inc. (IIS) of any
errors within 30 days after mailing to me. Failure to do so shall preclude any
claim against IIS, the Fund or its agents by reason of any unauthorized or
missing signature or endorsement, alteration, error or forgery of any kind.
SECTION 8. DEALER INFORMATION
- --------------------------------------------------------------------------------
We authorize Idex Investor Services, Inc. (IIS) to act as our agent for this
account in accordance with the Dealer's Sales Agreement and the terms of the
appropriate Fund's Prospectus and Statement of Additional Information. UNLESS
THIS SECTION IS COMPLETED AND SIGNED, THE INVESTMENT DEALER FOR THIS ACCOUNT(S)
WILL BE INTERSECURITIES, INC.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Dealer Name IDEX Dealer Number
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Registered Rep's Name (exactly as it appears on firm's registration) Rep #
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Home Office Address
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Rep's Branch Office Address Branch #
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Home Office City State Zip Code
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Branch Office City State Zip Code
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Authorized Signature of dealer (required by most dealers)
- --------------------------------------------------------------------------------
Registered Rep's Phone Number Fax Number
- --------------------------------------------------------------------------------
IIS00102-10/99 IDEX Mutual Funds | P.O. Box 9015 | Clearwater, FL 33758-9015 |
1-888-233-4339 | Distributor: InterSecurities, Inc.
- --------------------------------------------------------------------------------
<PAGE>
ADDITIONAL INFORMATION about these funds is contained in the Statement of
Additional Information, dated November 1, 1999, and in the Fund's annual and
semi-annual reports to shareholders, which is incorporated by reference into
this prospectus. Other information about these funds has been filed with and is
available from the U.S. Securities and Exchange Commission. Information about
the Funds (including the Statement of Additional Information) can be reviewed
and copied at the Securities and Exchange Commission's Public Reference Room in
Washington, D.C. Information on the operation of the public reference room may
be obtained by calling the Commission at 1-800-SEC-0330. Copies of this
information may be obtained, upon payment of a duplicating fee, by writing the
Public Reference Section of the Commission, Washington, D.C. 20549-6009. Reports
and other information about the funds are also available on the Commission's
Internet site at http://www.sec.gov. To obtain a copy of the Statement of
Additional Information or the Annual and Semi-Annual Reports, without charge, or
to make other inquiries about these funds, call or write to IDEX Mutual Funds at
the phone number or address at the bottom of this page. In the Fund's annual
report, you will find a discussion of the market conditions and investment
strategies that significantly affected the Fund's performance during the last
fiscal year.
Visit our website at www.idexfunds.com
IDEX Mutual Funds o P. O. Box 9015 o Clearwater, FL o 33758-9015
Customer Service 1-888-233-4339 o Investment Professionals 1-800-624-4339
Distributor: InterSecurities, Inc.
ID00827-11/99 (C)1999 InterSecurities, Inc.
[IDEX MUTUAL FUNDS LOGO]
<PAGE>
IDEX MUTUAL FUNDS
IDEX JCC GROWTH
IDEX JCC GLOBAL
IDEX JCC BALANCED
IDEX JCC CAPITAL APPRECIATION
IDEX JCC FLEXIBLE INCOME
IDEX T. ROWE PRICE DIVIDEND GROWTH
IDEX T. ROWE PRICE SMALL CAP
IDEX GOLDMAN SACHS GROWTH
IDEX SALOMON ALL CAP
IDEX ALGER AGGRESSIVE GROWTH
IDEX PILGRIM BAXTER MID CAP GROWTH
IDEX AEGON INCOME PLUS
IDEX AEGON TAX EXEMPT
IDEX GE/SCOTTISH EQUITABLE INTERNATIONAL EQUITY
IDEX DEAN ASSET ALLOCATION
IDEX LKCM STRATEGIC TOTAL RETURN
IDEX NWQ VALUE EQUITY
IDEX C.A.S.E. GROWTH
STATEMENT OF ADDITIONAL INFORMATION
NOVEMBER 1, 1999
IDEX MUTUAL FUNDS
570 Carillon Parkway
St. Petersburg, Florida 33716
Customer Service (888) 233-4339 (toll free)
The funds listed above are series of IDEX Mutual Funds (the "Fund"), an open-end
management investment company that offers a selection of investment funds. The
Fund is registered under the Investment Company Act of 1940, as amended (the
"1940 Act"). All funds, other than the IDEX JCC Capital Appreciation and IDEX
Salomon All Cap, are diversified.
This Statement of Additional Information is not a prospectus, and should be read
in conjunction with the Fund's prospectus dated November 1, 1999 which may be
obtained free of charge by writing or calling the Fund at the above address or
telephone number. This Statement of Additional Information ("SAI") contains
additional and more detailed information about the Fund's operations and
activities than that set forth in the prospectus. The Fund's annual report and
semi-annual report to shareholders are incorporated by reference into this SAI.
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TABLE OF CONTENTS
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INVESTMENT OBJECTIVES ............................................................... 1
Investment Restrictions, Policies and Practices ..................................... 1
Investment Restrictions of IDEX JCC Growth and IDEX JCC Flexible Income ............ 1
Investment Restrictions of IDEX JCC Global ......................................... 2
Investment Restrictions of IDEX JCC Capital Appreciation and IDEX JCC Balanced ..... 3
Investment Restrictions of IDEX T. Rowe Price Small Cap and IDEX T. Rowe Price
Dividend Growth .................................................................. 5
Investment Restrictions of IDEX Goldman Sachs Growth ............................... 6
Investment Restrictions of IDEX Salomon All Cap .................................... 7
Investment Restrictions of IDEX Alger Aggressive Growth ............................ 7
Investment Restrictions of IDEX Pilgrim Baxter Mid Cap Growth ...................... 8
Investment Restrictions of IDEX AEGON Income Plus .................................. 9
Investment Restrictions of IDEX AEGON Tax Exempt ................................... 10
Investment Restrictions of IDEX GE/Scottish Equitable International Equity ......... 12
Investment Restrictions of IDEX Dean Asset Allocation .............................. 13
Investment Restrictions of IDEX LKCM Strategic Total Return ........................ 14
Investment Restrictions of IDEX NWQ Value Equity ................................... 15
Investment Restrictions of IDEX C.A.S.E. Growth .................................... 16
OTHER POLICIES AND PRACTICES OF THE FUND ............................................ 18
Futures, Options and Other Derivative Instruments .................................. 18
Futures Contracts ................................................................. 18
Options on Futures Contracts ...................................................... 20
Options on Securities ............................................................. 21
Options on Foreign Currencies ..................................................... 24
Forward Contracts ................................................................. 25
Swaps and Swap-Related Products ................................................... 26
Index Options ..................................................................... 27
WEBS and Other Index-Related Securities ........................................... 28
Euro Instruments .................................................................. 28
Special Investment Considerations and Risks ....................................... 28
Additional Risks of Options on Foreign Currencies,
Forward Contracts and Foreign Instruments ....................................... 29
Other Investment Companies ......................................................... 29
When-Issued, Delayed Settlement and Forward Delivery Securities .................... 30
Zero Coupon, Pay-In-Kind and Step Coupon Securities ................................ 30
Income Producing Securities ........................................................ 31
Lending of Fund Securities ......................................................... 31
Joint Trading Accounts ............................................................. 32
Illiquid Securities ................................................................ 32
Repurchase and Reverse Repurchase Agreements ....................................... 32
Pass-Through Securities ............................................................ 33
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High-Yield/High-Risk Bonds ............................................... 34
Warrants and Rights ...................................................... 34
U.S. Government Securities ............................................... 34
Money Market Reserves (IDEX T. Rowe Price Small Cap and IDEX T. Rowe Price
Dividend Growth) ....................................................... 35
Turnover Rate ............................................................ 35
Investment Advisory and Other Services ................................... 36
DISTRIBUTOR ............................................................... 41
ADMINISTRATIVE SERVICES ................................................... 42
CUSTODIAN, TRANSFER AGENT AND OTHER AFFILIATES ............................ 42
FUND TRANSACTIONS AND BROKERAGE ........................................... 43
TRUSTEES AND OFFICERS ..................................................... 45
PURCHASE OF SHARES ........................................................ 48
DEALER REALLOWANCES ....................................................... 48
DISTRIBUTION PLANS ........................................................ 50
DISTRIBUTION FEES ......................................................... 51
NET ASSET VALUE DETERMINATION ............................................. 53
DIVIDENDS AND OTHER DISTRIBUTIONS ......................................... 54
SHAREHOLDER ACCOUNTS ...................................................... 54
RETIREMENT PLANS .......................................................... 55
REDEMPTION OF SHARES ...................................................... 55
TAXES ..................................................................... 56
PRINCIPAL SHAREHOLDERS .................................................... 58
MISCELLANEOUS ............................................................. 59
Organization ............................................................. 59
Shares of Beneficial Interest ............................................ 59
Legal Counsel and Auditors ............................................... 60
Registration Statement ................................................... 60
PERFORMANCE INFORMATION ................................................... 60
FINANCIAL STATEMENTS ...................................................... 65
APPENDIX A-CERTAIN SECURITIES IN WHICH THE FUNDS MAY INVEST ............... A-1
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INVESTMENT OBJECTIVES
The prospectus discusses the investment objective of each fund of the IDEX
Mutual Funds, the principal types of securities in which each fund will invest,
and the policies and practices of each fund. The following discussion of
Investment Restrictions, Policies and Practices supplements that set forth in
the prospectus.
There can be no assurance that a fund will, in fact, achieve its objective. A
fund's investment objective may be changed by the Board of Trustees without
shareholder approval. A change in the investment objective of a fund may result
in the fund having an investment objective different from that which the
shareholder deemed appropriate at the time of investment. A fund will not change
its objective without 30 days prior notice to its shareholders, nor will it
charge shareholders an exchange fee or redemption fee after such notice and
prior to the expiration of such 30-day notice period. However, should a
shareholder decide to redeem fund shares because of a change in the objective,
the shareholder may realize a taxable gain or loss.
INVESTMENT RESTRICTIONS, POLICIES AND PRACTICES
As indicated in the prospectus, each fund is subject to certain fundamental
policies and restrictions which as such may not be changed without shareholder
approval. Shareholder approval would be the approval by the lesser of (i) more
than 50% of the outstanding voting securities of a fund, or (ii) 67% or more of
the voting securities present at a meeting if the holders of more than 50% of
the outstanding voting securities of a fund are present or represented by proxy.
INVESTMENT RESTRICTIONS OF IDEX JCC GROWTH AND IDEX JCC FLEXIBLE INCOME
(FORMERLY GROWTH PORTFOLIO AND FLEXIBLE INCOME PORTFOLIO)
IDEX JCC Growth and IDEX JCC Flexible Income each may not, as a matter of
fundamental policy:
1. With respect to 75% of the fund's total assets, purchase the securities
of any one issuer (other than cash items and "government securities" as defined
under the 1940 Act), if immediately after and as a result of such purchase (a)
the value of the holdings of the fund in the securities of such issuer exceeds
5% of the value of the fund's total assets, or (b) the fund owns more than 10%
of the outstanding voting securities of such issuer;
2. Invest more than 25% of the value of its assets in any particular
industry (other than government securities);
3. Purchase or sell physical commodities other than foreign currencies
unless acquired as a result of ownership of securities (but this restriction
shall not prevent the fund from purchasing or selling options, futures
contracts, caps, floors and other derivative instruments, engaging in swap
transactions or investing in securities or other instruments backed by physical
commodities);
4. Invest directly in real estate or interests in real estate, including
limited partnership interests; however, the fund may own debt or equity
securities issued by companies engaged in those businesses;
5. Act as underwriter of securities issued by others, except to the extent
that it may be deemed an underwriter in connection with the disposition of
portfolio securities of the fund;
6. Lend any security or make any other loan if, as a result, more than 25%
of its total assets would be lent to other parties (but this limitation does not
apply to purchases of commercial paper, debt securities or to repurchase
agreements);
7. The fund may borrow money only for temporary or emergency purposes (not
for leveraging or investment) in an amount not exceeding 25% of the value of the
fund's total assets (including the amount borrowed) less liabilities (other than
borrowings). Any borrowings that exceed 25% of the value of the fund's total
assets by reason of a decline in net assets will be reduced within three
business days to the extent necessary to comply with the 25% limitation. This
policy shall not prohibit reverse repurchase agreements or deposits of assets to
provide margin or guarantee positions in connection with transactions in
options, futures contracts, swaps, forward contracts, and other derivative
instruments or the segregation of assets in connection with such transactions;
and
8. Issue senior securities, except as permitted by the 1940 Act.
As a fundamental policy governing concentration, the fund will not invest 25% or
more of its total assets in any one particular industry, other than U.S.
government securities.
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Furthermore, each fund has adopted the following non-fundamental investment
restrictions which may be changed by the Board of Trustees without shareholder
approval:
(A) A fund may not: (i) enter into any futures contracts or options on
futures contracts for purposes other than bona fide hedging transactions within
the meaning of Commodity Futures Trading Commission regulations if the aggregate
initial margin deposits and premiums required to establish positions in futures
contracts and related options that do not fall within the definition of bona
fide hedging transactions would exceed 5% of the fair market value of the fund's
net assets, after taking into account unrealized profits and losses on such
contracts it has entered into; and (ii) enter into any futures contracts or
options on futures contracts if the aggregate amount of the fund's commitments
under outstanding futures contracts positions and options on futures contracts
would exceed the market value of its total assets;
(B) A fund may not mortgage or pledge any securities owned or held by the
fund in amounts that exceed, in the aggregate, 15% of the fund's net assets,
provided that this limitation does not apply to reverse repurchase agreements or
in the case of assets deposited to provide margin or guarantee positions in
options, futures contracts, swaps, forward contracts or other derivative
instruments or the segregation of assets in connection with such transactions;
(C) A fund may not sell securities short, unless it owns or has the right
to obtain securities equivalent in kind and amount to the securities sold short,
and provided that transactions in options, futures contracts, swaps, forward
contracts, and other derivative instruments are not deemed to constitute selling
securities short;
(D) A fund may not purchase securities on margin, except that each fund
may obtain such short-term credits as are necessary for the clearance of
transactions, and provided that margin payments and other deposits made in
connection with transactions in options, futures contracts, swaps, forward
contracts, and other derivative instruments shall not be deemed to constitute
purchasing securities on margin;
(E) A fund may not invest more than 15% of its net assets in illiquid
securities. This does not include securities eligible for resale pursuant to
Rule 144A under the Securities Act of 1933 (the "1933 Act"), or any successor to
such Rule, Section 4(2) commercial paper or any securities which the Board of
Trustees or the investment sub-adviser, as appropriate, has made a determination
of liquidity, as permitted under the 1940 Act;
(F) A fund may not invest in companies for the purpose of exercising
control or management;
(G) A fund may not (i) purchase securities of other investment companies,
except in the open market where no commission except the ordinary broker's
commission is paid, or (ii) purchase or retain securities issued by other
open-end investment companies. Limitations (i) and (ii) do not apply to money
market funds or to securities received as dividends, through offers of exchange,
or as a result of consolidation, merger or other reorganization; and
(H) A fund may not invest directly in oil, gas or other mineral
development or exploration programs or leases; however, the funds may own debt
or equity securities of companies engaged in those businesses. In making all
investments for IDEX JCC Flexible Income, the sub-adviser will emphasize
economic or financial factors or circumstances of the issuer, rather than
opportunities for short-term arbitrage.
INVESTMENT RESTRICTIONS OF IDEX JCC GLOBAL
(FORMERLY GLOBAL PORTFOLIO)
IDEX JCC Global may not, as a matter of fundamental policy:
1. Own more than 10% of the outstanding voting securities of any one
issuer and, as to seventy-five percent (75%) of the value of its total assets,
purchase the securities of any one issuer (except cash items and "government
securities" as defined under the 1940 Act), if immediately after and as a result
of such purchase, the value of the holdings of the fund in the securities of
such issuer exceeds 5% of the value of the fund's total assets;
2. Invest more than 25% of the value of its assets in any particular
industry (other than government securities);
3. Invest directly in real estate or interests in real estate; however,
the fund may own debt or equity securities issued by companies engaged in those
businesses;
4. Purchase or sell physical commodities other than foreign currencies
unless acquired as a result of ownership of securities (but this shall not
prevent the fund from purchasing or selling options, futures, swaps and forward
contracts or from investing in securities or other instruments backed by
physical commodities);
5. Lend any security or make any other loan if, as a result, more than 25%
of its total assets would be lent to
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other parties (but this limitation does not apply to purchases of commercial
paper, debt securities or to repurchase agreements);
6. Act as an underwriter of securities issued by others, except to the
extent that it may be deemed an underwriter in connection with the disposition
of its portfolio securities;
7. The fund may borrow money only for temporary or emergency purposes (not
for leveraging or investment) in an amount not exceeding 25% of the value of the
fund's total assets (including the amount borrowed) less liabilities (other than
borrowings). Any borrowings that exceed 25% of the value of the fund's total
assets by reason of a decline in net assets will be reduced within three
business days to the extent necessary to comply with the 25% limitation. This
policy shall not prohibit reverse repurchase agreements or deposits of assets to
margin or guarantee positions in futures, options, swaps or forward contracts,
or the segregation of assets in connection with such contracts; and
8. Issue senior securities, except as permitted by the 1940 Act.
Furthermore, the fund has adopted the following non-fundamental investment
restrictions which may be changed by the Board of Trustees without shareholder
approval:
(A) The fund may not (i) enter into any futures contracts or options on
futures contracts for purposes other than bona fide hedging transactions within
the meaning of Commodity Futures Trading Commission regulations if the aggregate
initial margin deposits and premiums required to establish positions in futures
contracts and related options that do not fall within the definition of bona
fide hedging transactions would exceed 5% of the fair market value of the fund's
net assets, after taking into account unrealized profits and losses on such
contracts it has entered into; and (ii) enter into any futures contracts or
options on futures contracts if the aggregate amount of the fund's commitments
under outstanding futures contracts positions and options on futures contracts
would exceed the market value of its total assets;
(B) The fund may not sell securities short, unless it owns or has the
right, without the payment of any additional compensation, to obtain securities
equivalent in kind and amount to the securities sold short, and provided that
transactions in options, swaps and forward futures contracts are not deemed to
constitute selling securities short;
(C) The fund may not purchase securities on margin, except that the fund
may obtain such short-term credits as are necessary for the clearance of
transactions, and provided that margin payments and other deposits in connection
with transactions in options, futures, swaps and forward contracts shall not be
deemed to constitute purchasing securities on margin;
(D) The fund may not (i) purchase securities of other investment
companies, except in the open market where no commission except the ordinary
broker's commission is paid, or (ii) purchase or retain securities issued by
other open-end investment companies. Limitations (i) and (ii) do not apply to
money market funds or to securities received as dividends, through offers of
exchange, or as a result of a consolidation, merger or other reorganization;
(E) The fund may not mortgage or pledge any securities owned or held by
the fund in amounts that exceed, in the aggregate, 15% of the fund's net assets,
provided that this limitation does not apply to reverse repurchase agreements or
in the case of assets deposited to provide margin or guarantee positions in
options, futures contracts, swaps, forward contracts or other derivative
instruments or the segregation of assets in connection with such transactions;
(F) The fund may not invest directly in oil, gas or other mineral
development or exploration programs or leases; however, the fund may own debt or
equity securities of companies engaged in those businesses;
(G) The fund may not invest more than 15% of its net assets in illiquid
securities. This does not include securities eligible for resale pursuant to
Rule 144A under the 1933 Act, or any successor to such Rule, Section 4(2)
commercial paper or any other securities as to which the Board of Trustees have
made a determination as to liquidity, as permitted under the 1940 Act; and
(H) The fund may not invest in companies for the purpose of exercising
control or management.
INVESTMENT RESTRICITONS OF IDEX JCC CAPITAL APPRECIATION AND IDEX JCC BALANCED
(FORMERLY CAPITAL APPRECIATION PORTFOLIO AND BALANCED PORTFOLIO)
IDEX JCC Capital Appreciation and IDEX JCC Balanced each may not, as a matter of
fundamental policy:
1. With respect to 75% of its total assets in the case of IDEX JCC
Balanced, and 50% of its total assets in the case of IDEX JCC Capital
Appreciation, purchase the securities of any one issuer (except cash items and
"government securities" as defined under the 1940 Act,
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if immediately after and as a result of such purchase the value of the holdings
of the fund in the securities of such issuer exceeds 5% of the value of such
fund's total assets or the fund owns more than 10% of the outstanding voting
securities of such issuer. With respect to the remaining 50% of the value of its
total assets, IDEX JCC Capital Appreciation may invest in the securities of as
few as two issuers;
2. Invest more than 25% of the value of its assets in any particular
industry (other than U.S. government securities);
3. Invest directly in real estate or interests in real estate; however, a
fund may own debt or equity securities issued by companies engaged in those
businesses;
4. Purchase or sell physical commodities other than foreign currencies
unless acquired as a result of ownership of securities (but this limitation
shall not prevent a fund from purchasing or selling options, futures, swaps and
forward contracts or from investing in securities or other instruments backed by
physical commodities);
5. Lend any security or make any other loan if, as a result, more than 25%
of its total assets would be lent to other parties (but this limitation does not
apply to purchases of commercial paper, debt securities or repurchase
agreements);
6. Act as underwriter of securities issued by others, except to the extent
that a fund may be deemed an underwriter in connection with the disposition of
portfolio securities of that fund;
7. The fund may borrow money for temporary or emergency purposes (not for
leveraging or investment) in an amount not exceeding 25% of the value of the
fund's total assets (including the amount borrowed) less liabilities (other than
borrowings). If borrowings exceed 25% of the value of the fund's total assets by
reason of a decline in net assets, the fund will reduce its borrowings within
three business days to the extent necessary to comply with the 25% limitation.
This policy shall not prohibit reverse repurchase agreements, or deposits of
assets to margin or guarantee positions in futures, options, swaps or forward
contracts, and the segregation of assets in connection with such contracts; and
8. Issue senior securities, except as permitted by the 1940 Act.
Furthermore, the funds have adopted the following non-fundamental investment
restrictions which may be changed by the Board of Trustees without shareholder
approval:
(A) A fund may not: (i) enter into any futures contracts and related
options for purposes other than bona fide hedging transactions within the
meaning of Commodity Futures Trading Commission regulations if the aggregate
initial margin and premiums required to establish positions in futures contracts
and related options that do not fall within the definition of bona fide hedging
transactions will exceed 5% of the fair market value of a fund's net assets,
after taking into account unrealized profits and unrealized losses on any such
contracts it has entered into; and (ii) enter into any futures contracts if the
aggregate amount of such fund's commitments under outstanding futures contracts
positions of that fund's would exceed the market value of its total assets;
(B) A fund may not sell securities short, unless it owns or has the right
to obtain securities equivalent in kind and amount to the securities sold short
without the payment of any additional consideration therefore, and provided that
transactions in futures, options, swaps and forward contracts are not deemed to
constitute selling securities short;
(C) A fund may not purchase securities on margin, except that a fund may
obtain such short-term credits as are necessary for the clearance of
transactions, and provided that margin payments and other deposits in connection
with transactions in futures, options, contracts, swaps, and forward contracts,
shall not be deemed to constitute purchasing securities on margin;
(D) A fund may not (i) purchase securities of other investment companies,
except in the open market where no commission except the ordinary broker's
commission is paid, or (ii) purchase or retain securities issued by other
open-end investment companies. Limitations (i) and (ii) do not apply to money
market funds or to securities received as dividends, through offers of exchange,
or as a result of consolidation, merger or other reorganization;
(E) A fund may not mortgage or pledge any securities owned or held by a
fund in amounts that exceed, in the aggregate, 15% of that fund's net asset
value, provided that this limitation does not apply to reverse repurchase
agreements, deposits of assets to margin, guarantee positions in futures,
options, swaps or forward contracts or segregation of assets in connection with
such contracts;
(F) A fund may not invest directly in oil, gas or other mineral
development or exploration programs or leases; however, the fund may own debt or
equity securities of companies engaged in those businesses;
(G) A fund may not purchase any security or enter into a repurchase
agreement, if as a result, more than
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15% of its net assets would be invested in repurchase agreements not entitling
the holder to payment of principal and interest within seven days and in
securities that are illiquid by virtue of legal or contractual restrictions on
resale or the absence of a readily available market. The Trustees, or the fund's
investment adviser or sub-adviser acting pursuant to authority delegated by the
Trustees, may determine that a readily available market exists for securities
eligible for resale pursuant to Rule 144A under the 1933 Act, or any successor
to such Rule, Section 4(2) commercial paper and municipal lease obligations.
Accordingly, such securities may not be subject to the foregoing limitation;
(H) A fund may not invest in companies for the purpose of exercising
control or management; and
(I) With respect to IDEX JCC Balanced only, at least 25% of the total
assets of that fund will normally be invested in fixed-income senior securities,
which include corporate debt securities and preferred stock.
INVESTMENT RESTRICTIONS OF IDEX T. ROWE PRICE SMALL CAP AND IDEX T. ROWE PRICE
DIVIDEND GROWTH
IDEX T. Rowe Price Small Cap and IDEX T. Rowe Price Dividend Growth each may
not, as a matter of fundamental policy:
1. With respect to 75% of the fund's total assets, purchase the securities
of any one issuer (other than government securities as defined in the 1940 Act)
if immediately after and as a result of such purchase (a) the value of the
holdings of the fund in the securities of such issuer exceeds 5% of the value of
the fund's total assets, or (b) the fund owns more than 10% of the outstanding
voting securities of any one class of securities of such issuer;
2. Borrow money except for temporary or emergency purposes (not for
leveraging or investment) in an amount exceeding 33 1/3 of the value of the
fund's total assets (including amount borrowed) less liabilities (other than
borrowings). Any borrowings that exceed 33 1/3 of the value of the fund's total
assets by reason of a decline in net assets will be reduced within three
business days to the extent necessary to comply with the 33 1/3 limitation. This
policy shall not prohibit reverse repurchase agreements or deposits of assets to
margin or guarantee positions in futures, options, swaps or forward contracts,
or the segregation of assets in connection with such contracts;
3. Purchase or sell physical commodities (but this shall not prevent the
fund from entering into future contracts and options thereon);
4. Invest more than 25% of the fund's total assets in the securities of
issuers primarily engaged in the same industry. Utilities will be divided
according to their services; for example, gas, gas transmission, electric and
telephone, and each will be considered a separate industry for purposes of this
restriction, provided that there shall be no limitation on the purchase of
obligations issued or guaranteed by the U.S. government or its agencies or
instrumentalities, or of certificates of deposit;
5. Make loans, although the funds may lend fund securities provided that
the aggregate of such loans do not exceed 33 1/3 of the value of the fund's
total assets. The fund may purchase money market securities, enter into
repurchase agreements and acquire publicly distributed or privately placed debt
securities, and purchase debt;
6. Purchase or sell real estate (but this shall not prevent the fund from
investing in securities or other instruments backed by real estate, including
mortgage-backed securities, or securities of companies engaged in the real
estate business);
7. Issue senior securities, except as permitted by the 1940 Act; and
8. Underwrite securities issued by other persons, except to the extent
that the fund may be deemed to be an underwriter within the meaning of the 1933
Act in connection with the purchase and sale of its fund securities in the
ordinary course of pursuing its investment objective.
Furthermore, the funds have adopted the following non-fundamental restrictions
which may be changed by the Board of Trustees of the funds without shareholder
approval:
(A) A fund may not purchase additional securities when money borrowed
exceeds 5% of its total assets. This restriction shall not apply to temporary
borrowings until the fund's net assets exceed $40,000,000;
(B) A fund may not purchase a futures contract or an option thereon, if,
with respect to positions in futures or options on futures which do not
represent bona fide hedging, the aggregate initial margin and premiums on such
options would exceed 5% of the fund's net asset value;
(C) A fund may not invest more than 15% of its net assets in illiquid
securities. This does not include securities eligible for resale pursuant to
Rule 144A under the 1933 Act or any other securities as to which a determination
as to liquidity has been made pursuant to guidelines adopted by the Board of
Trustees, as permitted under the 1940 Act;
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(D) A fund may not invest in companies for the purpose of exercising
control or management;
(E) A fund may not purchase securities of open-end or closed-end
investment companies except (i) in compliance with the 1940 Act; or (ii)
securities of the T. Rowe Price Reserve Investment or Government Reserve
Investment Funds;
(F) A fund may not purchase securities on margin, except (i) for use of
short-term credit necessary for clearance of purchases of fund securities; and
(ii) it may make margin deposits in connection with futures contracts or other
permissible investments;
(G) A fund may not mortgage, pledge, hypothecate or, in any manner,
transfer any security owned by the fund as security for indebtedness except as
may be necessary in connection with permissible borrowings or investments and
then such mortgaging, pledging or hypothecating may not exceed 33 1/3 of the
fund's total assets at the time of borrowing or investment; and
(H) A fund may not sell securities short, except short sales "against the
box."
INVESTMENT RESTRICTIONS OF IDEX GOLDMAN SACHS GROWTH
IDEX Goldman Sachs Growth may not, as a matter of fundamental policy:
1. With respect to 75% of the fund's total assets, purchase the securities
of any one issuer (other than government securities as defined in the 1940 Act)
if immediately after and as a result of such purchase (a) the value of the
holdings of the fund in the securities of such issuer exceeds 5% of the value of
the fund's total assets, or (b) the fund owns more than 10% of the outstanding
voting securities of any one class of securities of such issuer;
2. Borrow money except (a) the fund may borrow from banks (as defined in
the 1940 Act) or through reverse repurchase agreements in amounts up to 33 1/3
of its total assets (including the amount borrowed), (b) the fund may, to the
extent permitted by applicable law, borrow up to an additional 5% of its total
assets for temporary purposes, (c) the fund may obtain such short-term credits
as may be necessary for the clearance of purchases and sales of fund securities,
(d) the fund may purchase securities on margin to the extent permitted by
applicable law and (e) the fund may engage in mortgage dollar rolls which are
accounted for as financings;
3. Purchase or sell physical commodities (but this shall not prevent the
fund from investing in currency and financial instruments and contracts that
are commodities or commodity contracts);
4. Invest more than 25% of the fund's assets in the securities of issuers
primarily engaged in the same industry. Utilities will be divided according to
their services; for example, gas, gas transmission, electric and telephone, and
each will be considered a separate industry for purposes of this restriction,
provided that there shall be no limitation on the purchase of obligations issued
or guaranteed by the U.S. government or its agencies or instrumentalities, or of
certificates of deposit and bankers' acceptances;
5. Make loans, except through (a) the purchase of debt obligations in
accordance with the fund's investment objective and policies, (b) repurchase
agreements with banks, brokers, dealers and other financial institutions, and
(c) loans of securities as permitted by applicable law;
6. Purchase or sell real estate (but this shall not prevent the fund from
investing in securities or other instruments backed by real estate, including
mortgage-backed securities, or securities of companies engaged in the real
estate business);
7. Issue senior securities, except as permitted by the 1940 Act; and
8. Underwrite securities issued by other persons, except to the extent
that the fund may be deemed to be an underwriter within the meaning of the 1933
Act in connection with the purchase and sale of its fund securities in the
ordinary course of pursuing its investment objective.
Furthermore, the fund has adopted the following non-fundamental
restrictions which may be changed by the Board of Trustees without shareholder
approval:
(A) The fund may not invest in companies for the purpose of exercising
control or management;
(B) The fund may not invest more than 15% of its net assets in illiquid
securities. This does not include securities eligible for resale pursuant to
Rule 144A under the 1933 Act or any other securities as to which a
determination as to liquidity has been made pursuant to guidelines adopted by
the Board of Trustees, as permitted under the 1940 Act;
(C) The fund may not purchase additional securities when money borrowed
exceeds 5% of its total assets. This restriction shall not apply to temporary
borrowings until the fund's assets exceed $40,000,000; and
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<PAGE>
(D) The fund may not make short sales of securities, except short sales
"against the box."
INVESTMENT RESTRICTIONS OF
IDEX SALOMON ALL CAP
IDEX Salomon All Cap may not, as a matter of fundamental policy:
1. Purchase or sell real estate, real estate mortgages, commodities or
commodity contracts; however, the fund may: (a) purchase interests in real
estate investment trusts or companies which invest in or own real estate if the
securities of such trusts or companies are registered under the 1933 Act and are
readily marketable or holding or selling real estate received in connection with
securities it holds; and (b) may enter into futures contracts, including futures
contracts on interest rates, stock indices and currencies, and options thereon,
and may engage in forward currency contracts and buy, sell and write options on
currencies. This policy shall not prohibit reverse repurchase agreements or
deposits of assets to margin or guarantee positions in futures, options, swaps
or forward contracts, or the segregation of assets in connection with such
contracts;
2. Invest more than 25% of the fund's assets in the securities of issuers
primarily engaged in the same industry. Utilities will be divided according to
their services; for example, gas, gas transmission, electric and telephone, and
each will be considered a separate industry for purposes of this restriction. In
addition, there shall be no limitation on the purchase of obligations issued or
guaranteed by the U.S. government or its agencies or instrumentalities, or of
certificates of deposit and bankers' acceptances;
3. Borrow money, except that the fund may borrow from banks for investment
purposes up to an aggregate of 15% of the value of its total assets taken at the
time of borrowing. The fund may borrow for temporary or emergency purposes an
aggregate amount not to exceed 5% of the value of its total assets at the time
of borrowing;
4. Issue senior securities, except as permitted by the 1940 Act;
5. Underwrite securities issued by other persons, except to the extent
that the fund may be deemed to be an underwriter within the meaning of the 1933
Act in connection with the purchase and sale of its fund securities in the
ordinary course of pursuing its investment objective; and
6. Make loans, except that the fund may purchase debt obligations in which
the fund may invest consistent with its investment objectives and policies or
enter into, and make loans of, its portfolio securities, as permitted under the
1940 Act.
Furthermore, the fund has adopted the following non-fundamental restrictions
that may be changed by the Board of Trustees without shareholder approval:
(A) The fund may not invest more than 15% of its net assets in illiquid
securities. This does not include securities eligible for resale pursuant to
Rule 144A under the 1933 Act or any other securities as to which a determination
as to liquidity has been made pursuant to guidelines adopted by the Board of
Trustees, as permitted under the 1940 Act;
(B) The fund may not invest in companies for the purpose of exercising
control or management; and
(C) The fund may not sell securities short except shart sales "against
the box".
INVESTMENT RESTRICTIONS OF IDEX ALGER AGGRESSIVE GROWTH
(FORMERLY AGGRESSIVE GROWTH PORTFOLIO)
IDEX Alger Aggressive Growth may not, as a matter of fundamental policy:
1. With respect to 75% of the fund's total assets, purchase the
securities of any one issuer (other than government securities as defined in
the 1940 Act), if immediately after and as a result of such purchase (a) the
value of the holdings of the fund in the securities of such issuer exceeds 5%
of the value of the fund's total assets, or (b) the fund owns more than 10% of
the outstanding voting securities of any one class of securities of such
issuer;
2. Purchase any securities that would cause more than 25% of the value of
the fund's total assets to be invested in the securities of issuers conducting
their principal business activities in the same industry; provided that there
shall be no limit on the purchase of U.S. government securities;
3. Purchase or sell real estate or real estate limited partnerships,
except that the fund may purchase and sell securities secured by real estate,
mortgages or interests therein and securities that are issued by companies that
invest or deal in real estate;
4. Invest in commodities, except that the fund may purchase or sell stock
index futures contracts and related options thereon if thereafter no more than
5% of its total assets are invested in aggregate initial margin and premiums;
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<PAGE>
5. Make loans to others, except through purchasing qualified debt
obligations, lending fund securities or entering into repurchase agreements;
6. Act as an underwriter of securities issued by others, except to the
extent that it may be deemed an underwriter in connection with the disposition
of its fund securities;
7. Borrow money, except that the fund may borrow from banks for
investment purposes as set forth in the prospectus and may also engage in
reverse repurchase agreements. Immediately after any borrowing, including
reverse repurchase agreements, the fund will maintain asset coverage of not
less than 300% with respect to all borrowings; and
8. Issue senior securities, except that the fund may borrow from banks
for investment purposes so long as the fund maintains the required coverage.
Furthermore, the fund has adopted the following non-fundamental investment
restrictions which may be changed by the Board of Trustees of the funds without
shareholder approval:
(A) The fund may not sell securities short or purchase securities on
margin, except that the fund may obtain any short-term credit necessary for the
clearance of purchases and sales of securities. These restrictions shall not
apply to transactions involving selling securities "short against the box";
(B) The fund may not pledge, hypothecate, mortgage or otherwise encumber
more than 15% of the value of the fund's total assets except in connection with
borrowings described in number 7 above. These restrictions shall not apply to
transactions involving reverse repurchase agreements or the purchase of
securities subject to firm commitment agreements or on a when-issued basis;
(C) The fund may not invest directly in oil, gas, or other mineral
development or exploration programs or leases; however, the fund may own debt
or equity securities of companies engaged in those businesses;
(D) The fund may not (i) purchase securities of other investment
companies, except in the open market where no commission except the ordinary
broker's commission is paid, or (ii) purchase or retain securities issued by
other open-end investment companies. Limitations (i) and (ii) do not apply to
money market funds or to securities received as dividends, through offers of
exchange, or as a result of consolidation, merger or other reorganization;
(E) The fund may not invest in companies for the purpose of exercising
control or management; and
(F) The fund may not invest more than 15% of its net assets in illiquid
securities. This does not include securities eligible for resale pursuant to
Rule 144A under the 1933 Act, or any successor to such Rule, Section 4(2)
commercial paper or any other securities as to which the Board of Trustees has
made a determination as to liquidity, as permitted under the 1940 Act.
INVESTMENT RESTRICTIONS OF IDEX PILGRIM BAXTER MID CAP GROWTH
IDEX Pilgrim Baxter Mid Cap Growth may not, as a matter of fundamental policy:
1. With respect to 75% of the fund's total assets, purchase the securities
of any one issuer (other than government securities as defined in the 1940 Act)
if immediately after and as a result of such purchase (a) the value of the
holdings of the fund in the securities of such issuer exceeds 5% of the value of
the fund's total assets, or (b) the fund owns more than 10% of the outstanding
voting securities of any one class of securities of such issuer;
2. Borrow money except for temporary or emergency purposes (not for
leveraging or investment) in an amount exceeding 10% of the value of the fund's
total assets. This borrowing provision is included solely to facilitate the
orderly sale of fund securities to accommodate substantial redemption requests
if they should occur and is not for investment purposes. All borrowings in
excess of 5% of the fund's total assets will be repaid before making
investments;
3. Make loans, except that the fund, in accordance with its investment
objectives and policies, may purchase or hold debt securities, and enter into
repurchase agreements as described in the fund's prospectus and this SAI;
4. Purchase or sell real estate, real estate limited partnership
interests, futures contracts, commodities or commodity contracts, except that
this shall not prevent the fund from (i) investing in readily marketable
securities of issuers which can invest in real estate or commodities,
institutions that issue mortgages, or real estate investment trusts which deal
in real estate or interests therein, pursuant to the fund's investment objective
and policies, and (ii) entering into futures contracts and options thereon that
are listed on a national securities or commodities exchange where, as a result
thereof, no more than 5% of the fund's total assets (taken at market value at
the time of entering into the futures contracts)
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<PAGE>
would be committed to margin deposits on such futures contracts and premiums
paid for unexpired options on such futures contracts; provided that, in the case
of an option that is "in-the-money" at the time of purchase, the "in-the-money"
amount, as defined under the Commodities Futures Trading Commission regulations,
may be excluded in computing the 5% limit. The fund (as a matter of operating
policy) will utilize only listed futures contracts and options thereon;
5. Act as an underwriter of securities of other issuers except as it may
be deemed an underwriter in selling a fund security;
6. Issue senior securities, except as permitted by the 1940 Act; and
7. Invest more than 25% of the fund's assets in the securities of issuers
primarily engaged in the same industry. Utilities will be divided according to
their services, for example, gas, gas transmission, electric and telephone, and
each will be considered a separate industry for purposes of this restriction. In
addition, there shall be no limitation on the purchase of obligations issued or
guaranteed by the U.S. government or its agencies or instrumentalities, or of
certificates of deposit and bankers' acceptances.
Furthermore, the fund has adopted the following non-fundamental restrictions
which may be changed by the Board of Trustees without shareholder approval:
(A) The fund may not invest in companies for the purpose of exercising
control;
(B) The fund may not pledge, mortgage or hypothecate assets, except (i) to
secure temporary borrowings as permitted by the fund's limitation on permitted
borrowings, or (ii) in connection with permitted transactions regarding options
and futures contracts;
(C) The fund may not invest more than 15% of its net assets in illiquid
securities. This does not include securities eligible for resale pursuant to
Rule 144A under the 1933 Act, or any successor to such Rule, Section 4(2)
commercial paper or any other securities as to which the Board of Trustees has
made a determination as to liquidity, as permitted under the 1940 Act; and
(D) The fund may not purchase securities of other investment companies
except as permitted by the 1940 Act and the rules and regulations thereunder.
INVESTMENT RESTRICITONS OF IDEX AEGON INCOME PLUS
(FORMERLY INCOME PLUS PORTFOLIO)
IDEX AEGON Income Plus may not, as a matter of fundamental policy:
1. Borrow money, except from a bank for temporary or emergency purposes
(not for leveraging or investment) in an amount not to exceed one-third of the
current value of the fund's total assets (including the amount borrowed) less
liabilities (not including the amount borrowed) at the time the borrowing is
made. If at any time the fund's borrowings exceed this limitation due to a
decline in net assets, such borrowings will be reduced within 3 business days
to the extent necessary to comply with the limitation. The fund will borrow
only to facilitate redemptions requested by shareholders which might otherwise
require untimely disposition of portfolio securities and will not purchase
securities while borrowings are outstanding;
2. Pledge assets, except that the fund may pledge not more than one-third
of its total assets (taken at current value) to secure borrowings made in
accordance with paragraph 1 above. Initial margin deposits under interest rate
futures contracts, which are made to guarantee the fund's performance under such
contracts, shall not be deemed a pledging of fund assets for the purpose of this
investment restriction. As a matter of non-fundamental operating policy, in
order to permit the sale of shares of the fund under certain state laws, the
fund will not pledge its assets in excess of an amount equal to 10% of its net
assets unless such state restrictions are changed;
3. Invest more than 25% of its assets, measured at the time of investment,
in a single industry (which term shall not include governments or their
political subdivisions), outside the industries of the fund's public utilities
portfolio concentration, except that the fund may, for temporary defensive
purposes, invest more than 25% of its total assets in the obligations of banks;
4. Purchase the securities (other than government securities) of any
issuer if, as a result, more than 5% of the fund's total assets would be
invested in the securities of such issuer, provided that up to 25% of the fund's
total net assets may be invested without regard to this 5% limitation and in the
case of certificates of deposit, time deposits and bankers' acceptances, up to
25% of total fund assets may be invested without regard to such 5% limitation,
but shall instead be subject to a 10% limitation;
5. Invest in mineral leases;
6. Invest in bank time deposits with maturities of over 7 calendar days,
or invest more than 10% of the fund's total assets in bank time deposits with
maturities of from 2 business days through 7 calendar days;
9
<PAGE>
7. Issue senior securities, except to the extent that senior securities
may be deemed to arise from bank borrowings and purchases of government
securities on a "when-issued" or "delayed delivery" basis, as described in the
prospectus;
8. Underwrite any issue of securities, except to the extent the fund may
be deemed to be an underwriter in connection with the sale of its portfolio
securities, although the fund may purchase securities directly from the issuers
thereof for investment in accordance with the fund's investment objective and
policies;
9. Purchase or sell commodities or commodity contracts, except that the
fund may purchase and sell interest rate futures contracts for hedging purposes
as set forth in the prospectus;
10. Purchase securities on margin or sell "short," but the fund may
obtain such short-term credits as may be necessary for the clearance of
purchases and sales of securities. (Initial and maintenance margin deposits and
payment with respect to interest rate futures contracts are not considered the
purchase of securities on margin);
11. Purchase or retain the securities of any issuer, if, to the fund's
knowledge, those officers and directors of the manager and sub-adviser who
individually own beneficially more than 0.5% of the outstanding securities of
such issuer together own beneficially more than 5% of such outstanding
securities;
12. Invest in securities of other investment companies, except in the
event of merger or reorganization with another investment company;
13. Make loans, except to the extent the purchase of notes, bonds,
bankers' acceptances or other evidence of indebtedness or the entry into
repurchase agreements or deposits (including time deposits and certificates of
deposit) with banks may be considered loans;
14. Invest in companies for the purpose of exercising management control;
15. Invest in oil, gas or other mineral exploration or development
programs;
16. Purchase or hold any real estate or mortgage loans thereon, except
that the fund may invest in securities secured by real estate or interests
therein or issued by persons (such as real estate investment trusts) which deal
in real estate or interests therein; and
17. Purchase the securities (other than government securities) of any
issuer if, as a result, the fund would hold more than 10% of any class of
securities (including any class of voting securities) of such issuer; for this
purpose, all debt obligations of an issuer, and all shares of stock of an
issuer other than common stock, are treated as a single class of securities.
Furthermore, the fund has adopted the following non-fundamental investment
restrictions which may be changed by the Board of Trustees without shareholder
approval:
(A) Write or purchase put, call, straddle or spread options, or
combinations thereof;
(B) Invest more than 10% of its net assets in illiquid securities;
(C) Invest in real estate limited partnerships;
(D) Invest more than 25% of its net assets at the time of purchase in the
securities of foreign issuers and obligors; and
(E) Purchase or sell interest rate futures contracts (a) involving
aggregate delivery or purchase obligations in excess of 30% of the fund's net
assets, or aggregate margin deposits made by the fund in excess of 5% of the
fund's net assets, (b) which are not for hedging purposes only, or (c) which are
executed under custodial, reserve and other arrangements inconsistent with
regulations and policies adopted or positions taken (i) by the Securities and
Exchange Commission for exemption from enforcement proceedings under Section
17(f) or 18(f) of the 1940 Act, (ii) by the Commodity Futures Trading Commission
("CFTC") for exemption of investment companies registered under the 1940 Act
from registration as "commodity pool operators" and from certain provisions of
Subpart B of Part 4 of the CFTC's regulations, or (iii) by state securities
commissioners or administrators in the states in which the fund's shares have
been qualified for public offering.
INVESTMENT RESTRICTIONS OF IDEX AEGON TAX EXEMPT
(FORMERLY TAX-EXEMPT PORTFOLIO)
IDEX AEGON Tax Exempt may not, as a matter of fundamental policy:
1. Underwrite any issue of securities, except to the extent the fund may
be deemed to be an underwriter in connection with the sale of its portfolio
securities, although the fund may purchase Municipal Obligations directly from
the issuers thereof for investment in accordance with the fund's investment
objective and policies;
2. Purchase the securities (other than government securities) of any
issuer if, as a result, more than 5% of
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<PAGE>
the fund's total assets would be invested in the securities of such issuer,
provided that up to 25% of the fund's total net assets may be invested without
regard to this 5% limitation;
3. Invest in any direct interest in an oil, gas or other mineral
exploration or development program;
4. Purchase securities on margin or sell "short," but the fund may obtain
such short-term credits as may be necessary for the clearance of purchases and
sales of securities;
5. Purchase or hold any real estate or mortgage loans thereon, except that
the fund may invest in securities secured by real estate or interests therein or
issued by persons (such as real estate investment trusts) which deal in real
estate or interests therein;
6. Purchase or retain the securities of any issuer, if, to the fund's
knowledge, those officers and directors of the manager or sub-adviser who
individually own beneficially more than 0.5% of the outstanding securities of
such issuer together own beneficially more than 5% of such outstanding
securities;
7. Invest in securities of other investment companies, except in the event
of merger or reorganization with another investment company;
8. Make loans, except to the extent the purchase of notes, bonds, or other
evidences of indebtedness or the entry into repurchase agreements or deposits
with banks may be considered loans;
9. Invest in companies for the purpose of exercising management or
control;
10. Write, purchase or sell put, call, straddle or spread options, except
for hedging purposes only, in accordance with such non-fundamental policies that
the Board of Trustees may from time to time adopt;
11. Purchase or sell commodities or commodity contracts; and
12. The fund may borrow money only for temporary or emergency purposes
(not for leveraging or investment) in an amount not exceeding one-third of the
current value of the fund's total assets (including the amount borrowed) less
liabilities (not including the amount borrowed at the time the borrowing is
made). For purposes of this limitation, reverse repurchase agreements would not
constitute borrowings.
As a fundamental policy governing concentration, the fund will not invest 25% or
more of its total assets in any one particular industry, other than U.S.
government securities.
Furthermore, the fund has adopted the following non-fundamental restrictions
which may be changed by the Board of Trustees without shareholder approval:
(A) The fund may not invest more than 10% of its net assets in illiquid
securities;
(B) The fund may not invest in oil, gas or mineral leases;
(C) The fund may not invest in real estate limited partnerships; and
(D) For hedging purposes only, the fund may adopt policies permitting:
(1) the purchase and sale of interest rate futures contracts, the
purchase of put and call options thereon, and the writing of
covered call or secured put options thereon, not involving
delivery or purchase obligations in excess of 30% of the fund's
net assets, and
(2) the purchase of put and call options related to portfolio
securities and securities to be purchased for the fund, the
writing of secured put and covered call options, and the entering
into of closing purchase transactions with respect to such
options, where such transactions will not involve futures
contract margin deposits and premiums on option purchases which,
in the aggregate, exceed 5% of the fund's net assets, in the
judgment of the sub-adviser are economically appropriate to the
reduction of risks inherent in the ongoing management of the
fund, and are executed under custodial, reserve and other
arrangements consistent with regulations and policies adopted or
positions taken (i) by the Securities and Exchange Commission
("SEC") for exemption from enforcement proceedings under Section
17(f) or 18(f) of the 1940 Act, (ii) by the Commodity Futures
Trading Commission (the "CFTC") for exemption of investment
companies registered under the 1940 Act from registration as
"commodity pool operators" and from certain provisions of Subpart
B of Part 4 of the CFTC's regulations, and (iii) by state
securities commissioners or administrators in the states in which
the fund's shares have been qualified for public offering.
The fund does not intend in the foreseeable future to adopt the foregoing
investment policies to permit trading
11
<PAGE>
in interest rate futures contracts, options thereon, and options on portfolio
securities.
As a matter of fundamental policy, the fund will invest 80% of its assets in tax
exempt securities that are not subject to alternate minimum tax. Except with
respect to borrowing money, if a percentage limitation set forth above is
complied with at the time of the investment, a subsequent change in the
percentage resulting from any change in value of the net assets of any of the
funds will not result in a violation of such restriction. Additional limitations
on borrowing that are imposed by state law and regulations may apply.
INVESTMENT RESTRICITONS OF
IDEX GE/SCOTTISH EQUITABLE
INTERNATIONAL EQUITY
(FORMERLY INTERNATIONAL EQUITY PORTFOLIO)
IDEX GE/Scottish Equitable International Equity may not, as a matter of
fundamental policy:
1. With respect to 75% of the fund's total assets, purchase the securities
of any one issuer (other than government securities as defined in the 1940 Act)
if immediately after and as a result of such purchase (a) the value of the
holdings of the fund in the securities of such issuer exceeds 5% of the value of
the fund's total assets, or (b) the fund owns more than 10% of the outstanding
voting securities of any one class of securities of such issuer. All securities
of a foreign government and its agencies will be treated as a single issuer for
purposes of this restriction;
2. Invest 25% or more of the value of the fund's total assets in any
particular industry (other than U.S. government securities). For purposes of
this restriction, the term industry shall include (a) the government of any one
country other than the U.S., but not the U.S. government and (b) all
supranational organizations;
3. Purchase or sell physical commodities other than foreign currencies
unless acquired as a result of ownership of securities (but this restriction
shall not prevent the fund from purchasing or selling options, futures
contracts, caps, floors and other derivative instruments, engaging in swap
transactions or investing in securities or other instruments backed by physical
commodities);
4. Invest directly in real estate or interests in real estate, including
limited partnership interests; however, the fund may own securities or other
instruments backed by real estate, including mortgage-backed securities, or debt
or equity securities issued by companies engaged in those businesses;
5. Act as an underwriter of securities issued by others, except to the
extent that it may be deemed an underwriter in connection with the disposition
of portfolio securities of the fund;
6. Lend any security or make any other loan if, as a result, more than 30%
of its total assets would be lent to other parties (but this limitation does not
apply to purchases of commercial paper, debt securities or to repurchase
agreements);
7. The fund may borrow money only for temporary or emergency purposes (not
for leveraging or investment) in an amount not exceeding 33 1/3 of the value of
the fund's total assets (including the amount borrowed) less liabilities (other
than borrowings). Any borrowings that exceed 33 1/3 of the value of the fund's
total assets by reason of a decline in net assets will be reduced within three
business days to the extent necessary to comply with the 33 1/3 limitation. This
policy shall not prohibit reverse repurchase agreements or deposits of assets to
provide margin or guarantee positions in connection with transactions in
options, futures contracts, swaps, forward contracts, or other derivative
instruments or the segregation of assets in connection with such transactions;
and
8. Issue senior securities, except as permitted by the 1940 Act.
Furthermore, the fund has adopted the following non-fundamental investment
restrictions which may be changed by the Board of Trustees without shareholder
approval:
(A) The fund may not, as a matter of non-fundamental policy (i) enter into
any futures contracts or options on futures contracts for purposes other than
bona fide hedging transactions within the meaning of Commodity Futures Trading
Commission regulations if the aggregate initial margin deposits and premiums
required to establish positions in futures contracts and related options that do
not fall within the definition of bona fide hedging transactions would exceed 5%
of the fair market value of the fund's net assets, after taking into account
unrealized profits and losses on such contracts it has entered into and (ii)
enter into any futures contracts or options on futures contracts if the
aggregate amount of the fund's commitments under outstanding futures contracts
positions and options on futures contracts would exceed the market value of its
total assets;
(B) The fund may not mortgage or pledge any securities owned or held by
the fund in amounts that exceed, in the aggregate, 15% of the fund's net assets,
provided that this limitation does not apply to reverse repurchase agreements or
in the case of assets deposited to provide margin or guarantee positions in
options,
12
<PAGE>
futures contracts, swaps, forward contracts or other derivative instruments or
the segregation of assets in connection with such transactions;
(C) The fund may not sell securities short, unless it owns or has the
right to obtain securities equivalent in kind and amount to the securities sold
short, and provided that transactions in options, futures contracts, swaps,
forward contracts and other derivative instruments are not deemed to constitute
selling securities short;
(D) The fund may not purchase securities on margin, except that the fund
may obtain such short-term credits as are necessary for the clearance of
transactions, and provided that margin payments and other deposits made in
connection with transactions in options, futures contracts, swaps, forward
contracts, and other derivative instruments shall not be deemed to constitute
purchasing securities on margin;
(E) The fund may not invest more than 15% of its net assets in illiquid
securities. This does not include securities eligible for resale pursuant to
Rule 144A under the 1933 Act, or any successor to such Rule, Section 4(2)
commercial paper or other securities for which the Board of Trustees has made a
determination of liquidity, as permitted under the 1940 Act;
(F) The fund may not (i) purchase securities of other investment
companies, except in the open market where no commission except the ordinary
broker's commission is paid, or (ii) purchase or retain securities issued by
other open-end investment companies. Limitations (i) and (ii) do not apply to
money market funds or to securities received as dividends, through offers of
exchange, or as a result of consolidation, merger or other reorganization. The
fund may also invest in the GEI Short-Term Investment Fund, an investment fund
advised by GE Investment Management Incorporated ("GEIM"), created specifically
to serve as a vehicle for the collective investment of cash balances of the fund
and other accounts advised by GEIM or General Electric Investment Corporation.
Investments in GEI Short-Term Investment Fund are not considered investments in
another investment company for the purposes of this restriction;
(G) The fund may not invest directly in oil, gas or other mineral
development or exploration programs or leases; however, the fund may own debt or
equity securities of companies engaged in those businesses; and
(H) The fund may not invest in companies for the purpose of exercising
control or management.
With respect to investment restriction No. 2 above, the fund may use the
industry classifications reflected by the S&P 500 Composite Stock Index, if
applicable at the time of determination. For all other fund holdings the fund
may use the Directory of Companies Required to File Annual Reports with the SEC
and Bloomberg, Inc. In addition, the fund may select its own industry
classifications, provided such classifications are reasonable.
INVESTMENT RESTRICTIONS OF IDEX DEAN ASSET ALLOCATION
(FORMERLY TACTICAL ASSET ALLOCATION PORTFOLIO)
IDEX Dean Asset Allocation may not, as a matter of fundamental policy:
1. With respect to 75% of the fund's total assets, purchase the securities
of any one issuer (other than government securities as defined in the 1940 Act)
if immediately after and as a result of such purchase (a) the value of the
holdings of the fund in the securities of such issuer exceeds 5% of the value of
the fund's total assets, or (b) the fund owns more than 10% of the outstanding
voting securities of such issuer;
2. Invest more than 25% of the fund's assets in the securities of issuers
primarily engaged in the same industry. Utilities will be divided according to
their services, for example, gas, gas transmission, electric and telephone, and
each will be considered a separate industry for purposes of this restriction. In
addition, there shall be no limitation on the purchase of obligations issued or
guaranteed by the U.S. government or its agencies or instrumentalities, or of
certificates of deposit and bankers' acceptances;
3. Purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this limitation shall not
prevent the fund from investing in securities or other instruments backed by
physical commodities);
4. Purchase or sell real estate (but this shall not prevent the fund from
investing in securities or other instruments backed by real estate, including
mortgage-backed securities, or securities of companies engaged in the real
estate business);
5. Lend any security or make any other loan if, as a result, more than 25%
of its total assets would be lent to other parties (but this limitation does not
apply to purchases of commercial paper or debt securities);
6. Act as an underwriter of securities issued by others, except to the
extent that it may be deemed an underwriter in connection with the disposition
of its portfolio securities;
7. The fund may borrow money only for temporary or emergency purposes (not
for leveraging or investment) in an amount not exceeding 25% of the value of
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the fund's total assets (including the amount borrowed) less liabilities (other
than borrowings). Any borrowings that exceed 25% of the value of the fund's
total assets by reason of a decline in net assets will be reduced within three
business days to the extent necessary to comply with the 25% limitation; and
8. Issue senior securities, except as permitted by the 1940 Act.
Furthermore, the fund has adopted the following non-fundamental investment
restrictions which may be changed by the Board of Trustees without shareholder
approval:
(A) The fund may not sell securities short, unless it owns or has the
right to obtain securities equivalent in kind and amount to the securities sold
short, and provided that margin payments and other deposits in connection with
transactions in options, swaps and forward and futures contracts are not deemed
to constitute selling securities short;
(B) The fund may not purchase securities on margin, except that the fund
may obtain such short-term credits as are necessary for the clearance of
transactions, and provided that margin payments and other deposits in connection
with transactions in options, futures, swaps and forward contracts shall not be
deemed to constitute purchasing securities on margin;
(C) The fund may not (i) purchase securities of other investment
companies, except in the open market where no commission except the ordinary
broker's commission is paid, or (ii) purchase or retain securities issued by
other open-end investment companies. Limitations (i) and (ii) do not apply to
money market funds or to securities received as dividends, through offers of
exchange, or as a result of a consolidation, merger or other reorganization;
(D) The fund may not mortgage or pledge any securities owned or held by
the fund in amounts that exceed, in the aggregate, 15% of the fund's net assets,
provided that this limitation does not apply to reverse repurchase agreements,
deposits of assets to margin, guarantee positions in futures, options, swaps or
forward contracts or segregation of assets in connection with such contracts;
(E) The fund may not invest directly in oil, gas, or other mineral
development or exploration programs or leases; however, the fund may own debt or
equity securities of companies engaged in those businesses;
(F) The fund may not invest in companies for the purpose of exercising
control or management; and
(G) The fund may not invest more than 15% of its net assets in illiquid
securities. This does not include securities eligible for resale pursuant to
Rule 144A under the 1933 Act, or any successor to such Rule, Section 4(2)
commercial paper or any other securities as to which the Board of Trustees has
made a determination as to liquidity, as permitted under the 1940 Act.
INVESTMENT RESTRICTIONS OF IDEX LKCM STRATEGIC TOTAL RETURN
(FORMERLY STRATEGIC TOTAL RETURN PORTFOLIO)
IDEX LKCM Strategic Total Return may not, as a matter of fundamental policy:
1. With respect to 75% of the fund's total assets, purchase the securities
of any one issuer (other than government securities as defined in the 1940 Act)
if immediately after and as a result of such purchase (a) the value of the
holdings of the fund in the securities of such issuer exceeds 5% of the value of
the fund's total assets, or (b) the fund owns more than 10% of the outstanding
voting securities of such issuer;
2. Invest more than 25% of the fund's assets in the securities of issuers
primarily engaged in the same industry. Utilities will be divided according to
their services; for example: gas, gas transmission, electric and telephone, and
each will be considered a separate industry for purposes of this restriction. In
addition, there shall be no limitation on the purchase of obligations issued or
guaranteed by the U.S. government or its agencies or instrumentalities, or of
certificates of deposit and bankers' acceptances;
3. Purchase or sell real estate (but this shall not prevent the fund from
investing in securities or other instruments backed by real estate, including
mortgage-backed securities, or securities of companies engaged in the real
estate business);
4. Purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent the
fund from investing in securities or other instruments backed by physical
commodities);
5. Lend any security or make any other loan if, as a result, more than 25%
of its total assets would be lent to other parties (but this limitation does not
apply to purchases of commercial paper or debt securities);
6. Act as an underwriter of securities issued by others, except to the
extent that it may be deemed an underwriter in connection with the disposition
of its portfolio securities;
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7. The fund may borrow money only for temporary or emergency purposes (not
for leveraging or investment) in an amount not exceeding 25% of the value of the
fund's total assets (including the amount borrowed) less liabilities (other than
borrowings). Any borrowings that exceed 25% of the value of the fund's total
assets by reason of a decline in net assets will be reduced within three
business days to the extent necessary to comply with the 25% limitation; and
8. Issue senior securities, except as permitted by the 1940 Act.
Furthermore, the fund has adopted the following non-fundamental investment
restrictions which may be changed by the Board of Trustees without shareholder
approval:
(A) The fund may not mortgage or pledge any securities owned or held by
the fund in amounts that exceed, in the aggregate, 15% of the fund's net assets,
provided that this limitation does not apply in the case of assets deposited to
margin or guarantee positions in options, futures contracts and options on
futures contracts or placed in a segregated account in connection with such
contracts;
(B) The fund may not sell securities short, unless it owns or has the
right to obtain securities equivalent in kind and amount to the securities sold
short, and provided that margin payments and other deposits in connection with
transactions in options, swaps and forward futures contracts are not deemed to
constitute selling securities short;
(C) The fund may not purchase securities on margin, except that the fund
may obtain such short-term credits as are necessary for the clearance of
transactions, and provided that margin payments and other deposits in connection
with transactions in options, futures, swaps and forward contracts shall not be
deemed to constitute purchasing securities on margin;
(D) The fund may not (i) purchase securities of other investment
companies, except in the open market where no commission except the ordinary
broker's commission is paid, or (ii) purchase or retain securities issued by
other open-end investment companies. Limitations (i) and (ii) do not apply to
money market funds or to securities received as dividends, through offers of
exchange, or as a result of a consolidation, merger or other reorganization;
(E) The fund may not invest directly in oil, gas, or other mineral
development or exploration programs or leases; however, the fund may own debt or
equity securities of companies engaged in those businesses;
(F) The fund may not invest more than 15% of its net assets in illiquid
securities. This does not include securities eligible for resale pursuant to
Rule 144A under the 1933 Act, or any successor to such Rule, Section 4(2)
commercial paper or any other securities as to which the Board of Trustees has
made a determination as to liquidity, as permitted under the 1940 Act;
(G) The fund may not invest in companies for the purpose of exercising
control or management; and
(H) The fund may not invest in securities of foreign issuers denominated
in foreign currency and not publicly traded in the United States if at the time
of acquisition more than 10% of the fund's total assets would be invested in
such securities.
INVESTMENT RESTRICTIONS OF IDEX NWQ VALUE EQUITY
(FORMERLY VALUE EQUITY PORTFOLIO)
IDEX NWQ Value Equity may not, as a matter of fundamental policy:
1. With respect to 75% of the fund's total assets, purchase the securities
of any one issuer (other than government securities as defined in the 1940 Act)
if immediately after and as a result of such purchase (a) the value of the
holdings of the fund in the securities of such issuer exceeds 5% of the value of
the fund's total assets, or (b) the fund owns more than 10% of the outstanding
voting securities of any one class of securities of such issuer;
2. Invest 25% or more of the value of the fund's total assets in any
particular industry (other than U.S. government securities);
3. Purchase or sell physical commodities other than foreign currencies
unless acquired as a result of ownership of securities (but this restriction
shall not prevent the fund from purchasing or selling options, futures
contracts, caps, floors and other derivative instruments, engaging in swap
transactions or investing in securities or other instruments backed by physical
commodities);
4. Invest directly in real estate or interests in real estate, including
limited partnership interests; however, the fund may own debt or equity
securities issued by companies engaged in those businesses;
5. Act as an underwriter of securities issued by others, except to the
extent that it may be deemed an underwriter in connection with the disposition
of portfolio securities of the fund;
6. Lend any security or make any other loan if, as a result, more than
25% of its total assets would be lent to
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other parties (but this limitation does not apply to purchases of commercial
paper, debt securities or to repurchase agreements);
7. The fund may borrow money only for temporary or emergency purposes (not
for leveraging or investment) in an amount not exceeding 10% of the value of the
fund's total assets (including the amount borrowed) less liabilities (other than
borrowings). Any borrowings that exceed 10% of the value of the fund's total
assets by reason of a decline in net assets will be reduced within three
business days to the extent necessary to comply with the 10% limitation. The
fund may not purchase additional securities when borrowings exceed 5% of total
assets. This policy shall not prohibit reverse repurchase agreements or deposits
of assets to provide margin or guarantee positions in connection with
transactions in options, futures contracts, swaps, forward contracts, or other
derivative instruments or the segregation of assets in connection with such
transactions; and
8. Issue senior securities, except as permitted by the 1940 Act.
Furthermore, the fund has adopted the following non-fundamental investment
restrictions which may be changed by the Board of Trustees without shareholder
approval:
(A) The fund may not, as a matter of non-fundamental policy (i) enter into
any futures contracts or options on futures contracts for purposes other than
bona fide hedging transactions within the meaning of Commodity Futures Trading
Commission regulations if the aggregate initial margin deposits and premiums
required to establish positions in futures contracts and related options that do
not fall within the definition of bona fide hedging transactions would exceed 5%
of the fair market value of the fund's net assets, after taking into account
unrealized profits and losses on such contracts it has entered into and (ii)
enter into any futures contracts or options on futures contracts if the
aggregate amount of the fund's commitments under outstanding futures contracts
positions and options on futures contracts would exceed the market value of its
total assets;
(B) The fund may not mortgage or pledge any securities owned or held by
the fund in amounts that exceed, in the aggregate, 15% of the fund's net assets,
provided that this limitation does not apply to reverse repurchase agreements or
in the case of assets deposited to provide margin or guarantee positions in
options, futures contracts, swaps, forward contracts or other derivative
instruments or the segregation of assets in connection with such transactions;
(C) The fund may not sell securities short, unless it owns or has the
right to obtain securities equivalent in kind and amount to the securities sold
short, and provided that transactions in options, futures contracts, swaps,
forward contracts and other derivative instruments are not deemed to constitute
selling securities short;
(D) The fund may not purchase securities on margin, except that the fund
may obtain such short-term credits as are necessary for the clearance of
transactions, and provided that margin payments and other deposits made in
connection with transactions in options, futures contracts, swaps, forward
contracts, and other derivative instruments shall not be deemed to constitute
purchasing securities on margin;
(E) The fund may not invest more than 15% of its net assets in illiquid
securities. This does not include securities eligible for resale pursuant to
Rule 144A under the 1933 Act, or any successor to such Rule, Section 4(2)
commercial paper or other securities for which the Board of Trustees has made a
determination of liquidity, as permitted under the 1940 Act;
(F) The fund may not (i) purchase securities of other investment
companies, except in the open market where no commission except the ordinary
broker's commission is paid, or (ii) purchase or retain securities issued by
other open-end investment companies. Limitations (i) and (ii) do not apply to
money market funds or to securities received as dividends, through offers of
exchange, or as a result of consolidation, merger or other reorganization;
(G) The fund may not invest directly in oil, gas or other mineral
development or exploration programs or leases; however, the fund may own debt or
equity securities of companies engaged in those businesses;
(H) The fund may not invest more than 25% of its net assets at the time of
purchase in the securities of foreign issuers and obligors; and
(I) The fund may not invest in companies for the purpose of exercising
control or management.
INVESTMENT RESTRICTIONS OF IDEX C.A.S.E. GROWTH
(FORMERLY C.A.S.E. PORTFOLIO)
IDEX C.A.S.E. Growth may not, as a matter of fundamental policy:
1. With respect to 75% of the fund's total assets, purchase the securities
of any one issuer (other than
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cash items and "government securities" as defined in the 1940 Act) if
immediately after and as a result of such purchase (a) the value of the holdings
of the fund in the securities of such issuer exceeds 5% of the value of the
fund's total assets, or (b) the fund owns more than 10% of the outstanding
voting securities of any one class of securities of such issuer;
2. Invest 25% or more of the value of the fund's assets in any particular
industry (other than government securities);
3. Purchase or sell physical commodities other than foreign currencies
unless acquired as a result of ownership of securities (but this restriction
shall not prevent the fund from purchasing or selling options, futures
contracts, caps, floors and other derivative instruments, engaging in swap
transactions or investing in securities or other instruments backed by physical
commodities);
4. Invest directly in real estate or interests in real estate, including
limited partnership interests; however, the fund may own debt or equity
securities issued by companies engaged in those businesses;
5. Act as an underwriter of securities issued by others, except to the
extent that it may be deemed an underwriter in connection with the disposition
of portfolio securities of the fund;
6. Lend any security or make any other loan if, as a result, more than 25%
of its total assets would be lent to other parties (but this limitation does not
apply to purchases of commercial paper, debt securities or to repurchase
agreements);
7. The fund may borrow money only for temporary or emergency purposes (not
for leveraging or investment) in an amount not exceeding 25% of the value of the
fund's total assets (including the amount borrowed) less liabilities (other than
borrowings). Any borrowings that exceed 25% of the value of the fund's total
assets by reason of a decline in net assets will be reduced within three
business days to the extent necessary to comply with the 25% limitation. This
policy shall not prohibit reverse repurchase agreements or deposits of assets to
provide margin or guarantee positions in connection with transactions in
options, futures contracts, swaps, forward contracts, or other derivative
instruments or the segregation of assets in connection with such transactions;
and
8. Issue senior securities, except as permitted by the 1940 Act.
Furthermore, the fund has adopted the following non-fundamental investment
restrictions which may be changed by the Board of Trustees without shareholder
approval:
(A) The fund may not, as a matter of non-fundamental policy (i) enter into
any futures contracts or options on futures contracts for purposes other than
bona fide hedging transactions within the meaning of Commodity Futures Trading
Commission regulations if the aggregate initial margin deposits and premiums
required to establish positions in futures contracts and related options that do
not fall within the definition of bona fide hedging transactions would exceed 5%
of the fair market value of the fund's net assets, after taking into account
unrealized profits and losses on such contracts it has entered into and (ii)
enter into any futures contracts or options on futures contracts if the
aggregate amount of the fund's commitments under outstanding futures contracts
positions and options on futures contracts would exceed the market value of its
total assets;
(B) The fund may not mortgage or pledge any securities owned or held by
the fund in amounts that exceed, in the aggregate, 15% of the fund's net assets,
provided that this limitation does not apply to reverse repurchase agreements or
in the case of assets deposited to provide margin or guarantee positions in
options, futures contracts, swaps, forward contracts or other derivative
instruments or the segregation of assets in connection with such transactions;
(C) The fund may not sell securities short, unless it owns or has the
right to obtain securities equivalent in kind and amount to the securities sold
short, and provided that transactions in options, futures contracts, swaps,
forward contracts and other derivative instruments are not deemed to constitute
selling securities short;
(D) The fund may not purchase securities on margin, except that the fund
may obtain such short-term credits as are necessary for the clearance of
transactions, and provided that margin payments and other deposits made in
connection with transactions in options, futures contracts, swaps, forward
contracts, and other derivative instruments shall not be deemed to constitute
purchasing securities on margin;
(E) The fund may not invest more than 15% of its net assets in illiquid
securities. This does not include securities eligible for resale pursuant to
Rule 144A under the 1933 Act, or any successor to such Rule, Section 4(2)
commercial paper or other securities for which the Board of Trustees has made a
determination of liquidity, as permitted under the 1940 Act;
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<PAGE>
(F) The fund may not (i) purchase securities of other investment
companies, except in the open market where no commission except the ordinary
broker's commission is paid, or (ii) purchase or retain securities issued by
other open-end investment companies. Limitations (i) and (ii) do not apply to
money market funds or to securities received as dividends, through offers of
exchange, or as a result of consolidation, merger or other reorganization;
(G) The fund may not invest directly in oil, gas or other mineral
development or exploration programs or leases; however, the fund may own debt or
equity securities of companies engaged in those businesses;
(H) The fund may not invest more than 25% of its net assets at the time of
purchase in the securities of foreign issuers and obligors; and
(I) The fund may not invest in companies for the purpose of exercising
control or management.
In addition to the above, as a fundamental policy, each of the funds, other than
IDEX AEGON Tax Exempt and IDEX AEGON Income Plus, may, notwithstanding any other
investment policy or limitation (whether or not fundamental), invest all of its
assets in the securities of a single open-end management investment company with
substantially the same fundamental investment objectives, policies and
limitations as such fund.
OTHER POLICIES AND PRACTICES OF THE FUNDS
FUTURES, OPTIONS AND OTHER DERIVATIVE INSTRUMENTS
The following investments are subject to limitations as set forth in each fund's
investment restrictions and policies.
FUTURES CONTRACTS. A fund may enter into futures contracts. Futures contracts
are for the purchase or sale, for future delivery, of equity or fixed-income
securities, foreign currencies or contracts based on financial indices,
including indices of U.S. government securities, foreign government securities
and equity or fixed-income securities. The IDEX AEGON Income Plus may enter into
interest rate futures contracts. These contracts are for the purchase or sale of
fixed-income securities. U.S. futures contracts are traded on exchanges which
have been designated "contract markets" by the Commodity Futures Trading
Commission ("CFTC") and must be executed through a Futures Trading Commission
merchant ("FTCM"), or brokerage firm, which is a member of the relevant contract
market. Through their clearing corporations, the exchanges guarantee performance
of the contracts as between the clearing members of the exchange.
When a fund buys or sells a futures contract, it must receive or deliver the
underlying instrument (or a cash payment based on the difference between the
underlying instrument's closing price and the price at which the contract was
entered into) at a specified price on a specified date. Transactions in futures
contracts may be made to attempt to hedge against potential changes in interest
or currency exchange rates, or the price of a security or a securities index
which might correlate with, or otherwise adversely affect, either the value of
the fund's securities or the prices of securities which the fund is considering
buying at a later date.
The buyer or seller of a futures contract is not required to deliver or pay for
the underlying instrument unless the contract is held until the delivery date.
However, both the buyer and seller are required to deposit "initial margin" for
the benefit of the FTCM when the contract is entered into. Initial margin
deposits are equal to a percentage of the contract's value, as set by the
exchange on which the contract is traded, and may be maintained in cash or
liquid assets by the fund's custodian for the benefit of the FTCM. Initial
margin payments are similar to good faith deposits or performance bonds.
Unlike margin extended by a securities broker, initial margin payments do not
constitute purchasing securities on margin for purposes of a fund's investment
limitations. If the value of either party's position declines, that party will
be required to make additional "variation margin" payments with the FTCM to
settle the change in value on a daily basis. The party that has a gain may be
entitled to receive all or a portion of this amount. In the event of the
bankruptcy of the FTCM that holds margin on behalf of a fund, that fund may be
entitled to return of the margin owed to such fund only in proportion to the
amount received by the FTCM's other customers. The fund's sub-adviser will
attempt to minimize the risk by careful monitoring of the creditworthiness of
the FTCMs
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with which a fund does business and by segregating margin payments with the
custodian.
Although a fund would segregate with the custodian cash and liquid assets in an
amount sufficient to cover its open futures obligations, the segregated assets
would be available to that fund immediately upon closing out the futures
position, while settlement of securities transactions could take several days.
However, because a fund's cash that may otherwise be invested would be held
uninvested or invested in liquid assets so long as the futures position remains
open, such fund's return could be diminished due to the opportunity losses of
foregoing other potential investments.
The acquisition or sale of a futures contract may occur, for example, when a
fund holds or is considering purchasing equity or debt securities and seeks to
protect itself from fluctuations in prices or interest rates without buying or
selling those securities. For example, if stock or debt prices were expected to
decrease, a fund might sell equity index futures contracts, thereby hoping to
offset a potential decline in the value of equity securities in the fund by a
corresponding increase in the value of the futures contract position held by
that fund and thereby preventing the fund's net asset value from declining as
much as it otherwise would have.
Similarly, if interest rates were expected to rise, a fund might sell bond index
futures contracts, thereby hoping to offset a potential decline in the value of
debt securities in the fund by a corresponding increase in the value of the
futures contract position held by the fund. A fund also could seek to protect
against potential price declines by selling fund securities and investing in
money market instruments. However, since the futures market is more liquid than
the cash market, the use of futures contracts as an investment technique allows
a fund to maintain a defensive position without having to sell fund securities.
Likewise, when prices of equity securities are expected to increase, or interest
rates are expected to fall, futures contracts may be bought to attempt to hedge
against the possibility of having to buy equity securities at higher prices.
This technique is sometimes known as an anticipatory hedge. Since the
fluctuations in the value of futures contracts should be similar to those of
equity securities, a fund could take advantage of the potential rise in the
value of equity or debt securities without buying them until the market has
stabilized. At that time, the futures contracts could be liquidated and such
fund could buy equity or debt securities on the cash market. To the extent a
fund enters into futures contracts for this purpose, the segregated assets
maintained to cover such fund's obligations (with respect to futures contracts)
will consist of liquid assets from its portfolio in an amount equal to the
difference between the contract price and the aggregate value of the initial and
variation margin payments made by that fund.
The ordinary spreads between prices in the cash and futures markets, due to
differences in the nature of those markets, are subject to distortions.
First, all participants in the futures market are subject to initial margin and
variation margin requirements. Rather than meeting additional variation margin
requirements, investors may close out futures contracts through offsetting
transactions which could distort the normal price relationship between the cash
and futures markets.
Second, the liquidity of the futures market depends on participants entering
into offsetting transactions rather than making or taking delivery. To the
extent participants decide to make or take delivery, liquidity in the futures
market could be reduced and prices in the futures market distorted.
Third, from the point of view of speculators, the margin deposit requirements in
the futures market are less onerous than margin requirements in the securities
market. Therefore, increased participation by speculators in the futures market
may cause temporary price distortions.
Due to the possibility of the foregoing distortions, a correct forecast of
general price trends by the fund manager still may not result in a successful
use of futures contracts.
Futures contracts entail risks. Although each of the funds that invests in such
contracts believes that their use will benefit the fund, if the fund
sub-adviser's investment judgment proves incorrect, the fund's overall
performance could be worse than if the fund had not entered into futures
contracts.
For example, if a fund has hedged against the effects of a possible decrease in
prices of securities held in its fund and prices increase instead, that fund may
lose part or all of the benefit of the increased value of the securities because
of offsetting losses in the fund's futures positions. In addition, if a fund has
insufficient cash, it may have to sell securities from its fund to meet daily
variation margin requirements. Those sales may, but will not necessarily, be at
increased prices which reflect the rising market and may occur at a time when
the sales are disadvantageous to the fund.
The prices of futures contracts depend primarily on the value of their
underlying instruments. Because there are
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a limited number of types of futures contracts, it is possible that the
standardized futures contracts available to a fund will not exactly match that
fund's current or potential investments. A fund may buy and sell futures
contracts based on underlying instruments with different characteristics from
the securities in which it typically invests. For example, by hedging
investments in fund securities with a futures contract based on a broad index of
securities may involve a risk that the futures position will not correlate
precisely with such performance of the fund's investments.
Futures prices can also diverge from the prices of their underlying instruments,
even if the underlying instruments correlate with a fund's investments. Futures
prices are affected by factors such as: current and anticipated short-term
interest rates; changes in volatility of the underlying instruments; and the
time remaining until expiration of the contract. Those factors may affect
securities prices differently from futures prices.
Imperfect correlations between a fund's investments and its futures positions
may also result from: differing levels of demand in the futures markets and the
securities markets; from structural differences in how futures and securities
are traded; and from imposition of daily price fluctuation limits for futures
contracts.
A fund may buy or sell futures contracts with a greater or lesser value than the
securities it wishes to hedge or is considering purchasing in order to attempt
to compensate for differences in historical volatility between the futures
contract and the securities. This may not be successful in all cases. If price
changes in a fund's futures positions are poorly correlated with its other
investments, its futures positions may fail to produce desired gains or may
result in losses that are not offset by the gains in that fund's other
investments.
Because futures contracts are generally settled within a day from the date they
are closed out, compared with a settlement period of seven days for some types
of securities, the futures markets can provide superior liquidity to the
securities markets. Nevertheless, there is no assurance a liquid secondary
market will exist for any particular futures contract at any particular time.
In addition, futures exchanges may establish daily price fluctuation limits for
futures contracts and may halt trading if a contract's price moves upward or
downward more than the limit in a given day. On volatile trading days when the
price fluctuation limit is reached, it may be impossible for a fund to enter
into new positions or close out existing positions. If the secondary market for
a futures contract is not liquid because of price fluctuation limits or
otherwise, the fund may not be able to promptly liquidate unfavorable futures
positions and potentially could be required to continue to hold a futures
position until the delivery date, regardless of changes in its value. As a
result, such fund's access to other assets held to cover its futures positions
also could be impaired.
Although futures contracts by their terms call for the delivery or acquisition
of the underlying commodities, or a cash payment based on the value of the
underlying commodities, in most cases the contractual obligation is offset
before the delivery date of the contract. This is accomplished by buying, in the
case of a contractual obligation to sell, or selling, in the case of a
contractual obligation to buy, an identical futures contract on a commodities
exchange. Such a transaction cancels the obligation to make or take delivery of
the commodities.
If applicable, each fund intends to comply with guidelines of eligibility for
exclusion from the definition of the term "commodity pool operator" with the
CFTC and the National Futures Association, which regulate trading in the futures
markets. The funds will use futures contracts and related options primarily for
bona fide hedging purposes within the meaning of CFTC regulations. In addition,
the funds may hold positions in futures contracts and related options that do
not fall within the definition of bona fide hedging transactions, provided that
the aggregate initial margin and premiums required to establish such positions
will not exceed 5% of the fair market value of a fund's net assets, after taking
into account unrealized profits and unrealized losses on any such contracts it
has entered into.
IDEX Alger Aggressive Growth may not enter into a futures contract or related
option (except for closing transactions) if, immediately thereafter, the sum of
the amount of its initial margin and premiums on open futures contracts and
options thereon would exceed 5% of IDEX Alger Aggressive Growth's total assets
(taken at current value); however, in the case of an option that is
"in-the-money" at the time of the purchase, the "in-the-money" amount may be
excluded in calculating the 5% limitation.
OPTIONS ON FUTURES CONTRACTS. A fund may buy and write put and call options on
futures contracts. An option on a futures contract gives a fund the right (but
not the obligation) to buy or sell the contract at a specified price on or
before a specified date. Transactions in options on futures contracts may be
made to attempt to hedge against potential changes in interest rates or currency
exchange rates, or the price of a security or a securities index which might
correlate with, or otherwise adversely affect, either the value of the fund's
securities or the
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<PAGE>
prices of securities which the fund is considering buying at a later date.
Transactions in options on future contracts will not be made for speculation.
The purchase of a call option on a futures contract is similar in some respects
to the purchase of a call option on an individual security. Depending on the
pricing of the option compared to either the price of the futures contract upon
which it is based or the price of the underlying instrument, ownership of the
option may or may not be less risky than ownership of the futures contract or
the underlying instrument. As with the purchase of futures contracts, when a
fund is not fully invested it may buy a call option on a futures contract to
hedge against a market advance.
The writing of a call option on a futures contract constitutes a partial hedge
against declining prices of the security or foreign currency which is
deliverable under, or of the index comprising, the futures contract. If the
futures price at the expiration of the option is below the exercise price, a
fund will retain the full amount of the option premium which provides a partial
hedge against any decline that may have occurred in such fund's holdings.
The writing of a put option on a futures contract constitutes a partial hedge
against increasing prices of the security or foreign currency which is
deliverable under, or of the index comprising, the futures contract. If the
futures price at expiration of the option is higher than the exercise price, a
fund will retain the full amount of the option premium which provides a partial
hedge against any increase in the price of securities which that fund is
considering buying.
If a call or put option a fund has written is exercised, such fund will incur a
loss which will be reduced by the amount of the premium it received. Depending
on the degree of correlation between the change in the value of its fund
securities and changes in the value of the futures positions, that fund's losses
from existing options on futures may to some extent be reduced or increased by
changes in the value of fund securities.
The purchase of a put option on a futures contract is similar in some respects
to the purchase of protective put options on fund securities. For example, a
fund may buy a put option on a futures contract to hedge its fund securities
against the risk of falling prices or rising interest rates.
The amount of risk a fund assumes when it buys an option on a futures contract
is the premium paid for the option plus related transaction costs. In addition
to the correlation risks discussed above, the purchase of an option also entails
the risk that changes in the value of the underlying futures contract will not
be fully reflected in the value of the options bought.
OPTIONS ON SECURITIES. In an effort to increase current income and to reduce
fluctuations in net asset value, each of the funds, other than IDEX AEGON Tax
Exempt and IDEX AEGON Income Plus, may write covered put and call options and
buy put and call options on securities that are traded on United States and
foreign securities exchanges, and over-the-counter. A fund also may write call
options that are not covered for cross-hedging purposes. A fund may write and
buy options on the same types of securities that the fund may purchase directly.
There are no specific limitations on a fund's writing and buying of options on
securities.
A put option gives the holder the right, upon payment of a premium, to deliver a
specified amount of a security to the writer of the option on or before a fixed
date at a predetermined price. A call option gives the holder the right, upon
payment of a premium, to call upon the writer to deliver a specified amount of a
security on or before a fixed date at a predetermined price.
A put option written by a fund is "covered" if the fund: (i) segregates cash not
available for investment or other liquid assets with a value equal to the
exercise price with its custodian; or (ii) continues to own an equivalent number
of puts of the same "series" (that is, puts on the same underlying securities
having the same exercise prices and expiration dates as those written by the
fund), or an equivalent number of puts of the same "class" (that is, puts on the
same underlying securities) with exercise prices greater than those it has
written (or if the exercise prices of the puts it holds are less than the
exercise prices of those it has written, the difference is segregated with the
custodian).
The premium paid by the buyer of an option will reflect, among other things, the
relationship of the exercise price to the market price and the volatility of the
underlying security, the remaining term of the option, supply and demand and
interest rates.
A call option written by a fund is "covered" if the fund owns the underlying
security covered by the call or has an absolute and immediate right to acquire
that security without additional cash consideration (or has segregated
additional cash with its custodian) upon conversion or exchange of other
securities held in its fund. A call option written by a fund is also deemed to
be covered: (i) if that fund holds a call at the same exercise price for the
same exercise period and on the same securities as the call
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written; (ii) in the case of a call on a stock index, if the fund owns a fund of
securities substantially replicating the movement of the index underlying the
call option; or (iii) if at the time the call is written an amount of cash, U.S.
government securities or other liquid assets equal to the fluctuating market
value of the optioned securities is segregated with the custodian.
A fund may also write call options that are not covered for cross-hedging
purposes. A fund collateralizes its obligation under a written call option for
cross-hedging purposes by segregating cash or other liquid assets in an amount
not less than the market value of the underlying security, marked-to-market
daily. A fund would write a call option for cross-hedging purposes, instead of
writing a covered call option, when the premium to be received from the
cross-hedge transaction would exceed that which would be received from writing a
covered call option and the fund manager believes that writing the option would
achieve the desired hedge.
If a put or call option written by a fund were exercised, the fund would be
obligated to buy or sell the underlying security at the exercise price. Writing
a put option involves the risk of a decrease in the market value of the
underlying security, in which case the option could be exercised and the
underlying security would then be sold by the option holder to the fund at a
higher price than its current market value. Writing a call option involves the
risk of an increase in the market value of the underlying security, in which
case the option could be exercised and the underlying security would then be
sold by the fund to the option holder at a lower price than its current market
value. Those risks could be reduced by entering into an offsetting transaction.
A fund retains the premium received from writing a put or call option whether or
not the option is exercised.
The writer of an option may have no control when the underlying security must be
sold, in the case of a call option, or bought, in the case of a put option,
since with regard to certain options, the writer may be assigned an exercise
notice at any time prior to the termination of the obligation. Whether or not an
option expires unexercised, the writer retains the amount of the premium.
This amount, of course, may, in the case of a covered call option, be offset by
a decline in the market value of the underlying security during the option
period. If a call option is exercised, the writer experiences a profit or loss
from the sale of the underlying security. If a put option is exercised, the
writer must fulfill the obligation to buy the underlying security at the
exercise price, which will usually exceed the then market value of the
underlying security.
The writer of an option that wishes to terminate its obligation may effect a
"closing purchase transaction." This is accomplished by buying an option of the
same series as the option previously written. The effect of the purchase is that
the writer's position will be canceled by the clearing corporation. However, a
writer may not effect a closing purchase transaction after being notified of the
exercise of an option. Likewise, an investor who is the holder of an option may
liquidate its position by effecting a "closing sale transaction." This is
accomplished by selling an option of the same series as the option previously
bought. There is no guarantee that either a closing purchase or a closing sale
transaction can be effected.
In the case of a written call option, effecting a closing transaction will
permit a fund to write another call option on the underlying security with
either a different exercise price or expiration date or both. In the case of a
written put option, such transaction will permit the fund to write another put
option to the extent that the exercise price thereof is secured by other
deposited liquid assets. Effecting a closing transaction also will permit the
cash or proceeds from the concurrent sale of any securities subject to the
option to be used for other fund investments. If a fund desires to sell a
particular security on which the fund has written a call option, such fund will
effect a closing transaction prior to or concurrent with the sale of the
security.
A fund will realize a profit from a closing transaction if the price of a
purchase transaction is less than the premium received from writing the option
or the price received from a sale transaction is more than the premium paid to
buy the option. The fund will realize a loss from a closing transaction if the
price of the purchase transaction is more than the premium received from writing
the option or the price received from a sale transaction is less than the
premium paid to buy the option. Because increases in the market price of a call
option will generally reflect increases in the market price of the underlying
security, any loss resulting from the repurchase of a call option is likely to
be offset in whole or in part by appreciation of the underlying security owned
by the fund.
An option position may be closed out only where a secondary market for an option
of the same series exists. If a secondary market does not exist, a fund may not
be able to effect closing transactions in particular options and that fund would
have to exercise the options in order
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to realize any profit. If a fund is unable to effect a closing purchase
transaction in a secondary market, it will not be able to sell the underlying
security until the option expires or it delivers the underlying security upon
exercise. Reasons for the absence of a liquid secondary market may include the
following: (i) there may be insufficient trading interest in certain options;
(ii) restrictions may be imposed by a national securities exchange on which the
option is traded ("Exchange") on opening or closing transactions or both; (iii)
trading halts, suspensions or other restrictions may be imposed with respect to
particular classes or series of options or underlying securities; (iv) unusual
or unforeseen circumstances may interrupt normal operations on an Exchange; (v)
the facilities of an Exchange or the Options Clearing Corporation ("OCC") may
not at all times be adequate to handle current trading volume; or (vi) one or
more Exchanges could, for economic or other reasons, decide or be compelled at
some future date to discontinue the trading of options (or a particular class or
series of options). In that case, the secondary market on that Exchange (or in
that class or series of options) would cease to exist, although outstanding
options on that Exchange that had been issued by the OCC as a result of trades
on that Exchange would continue to be exercisable in accordance with their
terms.
A fund may, subject to its investment restrictions, write options in connection
with buy-and-write transactions. In other words, the fund may buy a security and
then write a call option against that security. The exercise price of such call
will depend upon the expected price movement of the underlying security. The
exercise price of a call option may be below ("in-the-money"), equal to
("at-the-money"), or above ("out-of-the-money") the current value of the
underlying security at the time the option is written.
Buy-and-write transactions using "in-the-money" call options may be used when it
is expected that the price of the underlying security will remain flat or
decline moderately during the option period. Buy-and-write transactions using
"at-the-money" call options may be used when it is expected that the price of
the underlying security will remain fixed or advance moderately during the
option period. Buy-and-write transactions using "out-of-the-money" call options
may be used when it is expected that the premiums received from writing the call
option plus the appreciation in the market price of the underlying security up
to the exercise price will be greater than the appreciation in the price of the
underlying security alone.
If the call options are exercised in such transactions, the fund's maximum gain
will be the premium received by it for writing the option, adjusted upwards or
downwards by the difference between that fund's purchase price of the security
and the exercise price. If the options are not exercised and the price of the
underlying security declines, the amount of such decline will be offset by the
amount of premium received.
The writing of covered put options is similar in terms of risk and return
characteristics to buy-and-write transactions. If the market price of the
underlying security rises or otherwise is above the exercise price, the put
option will expire worthless and a fund's gain will be limited to the premium
received. If the market price of the underlying security declines or otherwise
is below the exercise price, a fund may elect to close the position or take
delivery of the security at the exercise price and that fund's return will be
the premium received from the put options minus the amount by which the market
price of the security is below the exercise price.
A fund may buy put options to hedge against a decline in the value of its fund.
By using put options in this way, a fund will reduce any profit it might
otherwise have realized in the underlying security by the amount of the premium
paid for the put option and by transaction costs.
A fund may buy call options to hedge against an increase in the price of
securities that it may buy in the future. The premium paid for the call option
plus any transaction costs will reduce the benefit, if any, realized by such
fund upon exercise of the option, and, unless the price of the underlying
security rises sufficiently, the option may expire worthless to that fund.
In purchasing an option, a fund would be in a position to realize a gain if,
during the option period, the price of the underlying security increased (in the
case of a call) or decreased (in the case of a put) by an amount in excess of
the premium paid. The fund would realize a loss if the price of the underlying
security did not increase (in the case of a call) or decrease (in the case of a
put) during the period by more than the amount of the premium. If a put or call
option purchased by a fund were permitted to expire without being sold or
exercised, the fund would lose the amount of the premium.
Although they entitle the holder to buy equity securities, warrants on and
options to purchase equity securities do not entitle the holder to dividends or
voting rights with
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respect to the underlying securities, nor do they represent any rights in the
assets of the issuer of those securities.
In addition to options on securities, a fund may also purchase and sell call and
put options on securities indexes. A stock index reflects in a single number the
market value of many different stocks. Relative values are assigned to the
stocks included in an index and the index fluctuates with changes in the market
values of the stocks. The options give the holder the right to receive a cash
settlement during the term of the option based on the difference between the
exercise price and the value of the index. By writing a put or call option on a
securities index, a fund is obligated, in return for the premium received, to
make delivery of this amount. A fund may offset its position in stock index
options prior to expiration by entering into a closing transaction on an
exchange or it may let the option expire unexercised.
Use of options on securities indexes entails the risk that trading in the
options may be interrupted if trading in certain securities included in the
index is interrupted. A fund will not purchase these options unless a fund's
sub-adviser is satisfied with the development, depth and liquidity of the market
and believes the options can be closed out.
Price movements in a fund's securities may not correlate precisely with
movements in the level of an index and, therefore, the use of options on indexes
cannot serve as a complete hedge and will depend, in part, on the ability of its
sub-adviser to predict correctly movements in the direction of the stock market
generally or of a particular industry. Because options on securities indexes
require settlement in cash, a fund's sub-adviser may be forced to liquidate fund
securities to meet settlement obligations.
The amount of risk a fund assumes when it buys an option on a futures contract
is the premium paid for the option plus related transaction costs. In addition
to the correlation risks discussed above, the purchase of an option also entails
the risk that changes in the value of the underlying futures contract will not
be fully reflected in the value of the options bought.
OPTIONS ON FOREIGN CURRENCIES. Subject to any investment restrictions, a fund
may buy and write options on foreign currencies in a manner similar to that in
which futures contracts or forward contracts on foreign currencies will be
utilized. For example, a decline in the U.S. dollar value of a foreign currency
in which fund securities are denominated will reduce the U.S. dollar value of
such securities, even if their value in the foreign currency remains constant.
In order to protect against such diminutions in the value of fund securities, a
fund may buy put options on the foreign currency. If the value of the currency
declines, such fund will have the right to sell such currency for a fixed amount
in U.S. dollars and will offset, in whole or in part, the adverse effect on its
portfolio.
Conversely, when a rise in the U.S. dollar value of a currency in which
securities to be acquired are denominated is projected, thereby increasing the
cost of such securities, a fund may buy call options thereon. The purchase of
such options could offset, at least partially, the effects of the adverse
movements in exchange rates. As in the case of other types of options, however,
the benefit to a fund from purchases of foreign currency options will be reduced
by the amount of the premium and related transaction costs. In addition, if
currency exchange rates do not move in the direction or to the extent desired, a
fund could sustain losses on transactions in foreign currency options that would
require such fund to forego a portion or all of the benefits of advantageous
changes in those rates. In addition, in the case of other types of options, the
benefit to the fund from purchases of foreign currency options will be reduced
by the amount of the premium and related transaction costs.
A fund may also write options on foreign currencies. For example, in attempting
to hedge against a potential decline in the U.S. dollar value of foreign
currency denominated securities due to adverse fluctuations in exchange rates, a
fund could, instead of purchasing a put option, write a call option on the
relevant currency. If the expected decline occurs, the option will most likely
not be exercised and the diminution in value of fund securities will be offset
by the amount of the premium received.
Similarly, instead of purchasing a call option to attempt to hedge against a
potential increase in the U.S. dollar cost of securities to be acquired, a fund
could write a put option on the relevant currency which, if rates move in the
manner projected, will expire unexercised and allow that fund to hedge the
increased cost up to the amount of premium. As in the case of other types of
options, however, the writing of a foreign currency option will constitute only
a partial hedge up to the amount of the premium. If exchange rates do not move
in the expected direction, the option may be exercised and a fund would be
required to buy or sell the underlying currency at a loss which may not be
offset by the amount of the premium. Through the writing of options on foreign
currencies, a fund also may lose all or a portion of the benefits
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which might otherwise have been obtained from favorable movements in exchange
rates.
A fund may write covered call options on foreign currencies. A call option
written on a foreign currency by a fund is "covered" if that fund owns the
underlying foreign currency covered by the call or has an absolute and immediate
right to acquire that foreign currency without additional cash consideration (or
for additional cash consideration that is segregated by its custodian) upon
conversion or exchange of other foreign currency held in its fund. A call option
is also covered if: (i) the fund holds a call at the same exercise price for the
same exercise period and on the same currency as the call written; or (ii) at
the time the call is written, an amount of cash, U.S. government securities or
other liquid assets equal to the fluctuating market value of the optioned
currency is segregated with the custodian.
A fund may write call options on foreign currencies for cross-hedging purposes
that would not be deemed to be covered. A call option on a foreign currency is
for cross-hedging purposes if it is not covered but is designed to provide a
hedge against a decline due to an adverse change in the exchange rate in the
U.S. dollar value of a security which the fund owns or has the right to acquire
and which is denominated in the currency underlying the option. In such
circumstances, a fund collateralizes the option by segregating cash or other
liquid assets in an amount not less than the value of the underlying foreign
currency in U.S. dollars marked-to-market daily.
FORWARD CONTRACTS. A forward contract is an agreement between two parties in
which one party is obligated to deliver a stated amount of a stated asset at a
specified time in the future, and the other party is obligated to pay a
specified invoice amount for the assets at the time of delivery. A fund may
enter into forward contracts to purchase and sell government securities, foreign
currencies or other financial instruments. Forward contracts generally are
traded in an interbank market conducted directly between traders (usually large
commercial banks) and their customers. Unlike futures contracts, which are
standardized contracts, forward contracts can be specifically drawn to meet the
needs of the parties that enter into them. The parties to a forward contract may
agree to offset or terminate the contract before its maturity, or may hold the
contract to maturity and complete the contemplated exchange.
The following discussion summarizes a fund's principal uses of forward foreign
currency exchange contracts ("forward currency contracts").
A fund may enter into forward currency contracts with stated contract values of
up to the value of that fund's assets. A forward currency contract is an
obligation to buy or sell an amount of a specified currency for an agreed upon
price (which may be in U.S. dollars or another currency). A fund will exchange
foreign currencies for U.S. dollars and for other foreign currencies in the
normal course of business.
They may buy and sell currencies through forward currency contracts in order to
fix a price for securities it has agreed to buy or sell ("transaction hedge"). A
fund also may hedge some or all of its investments denominated in foreign
currency, or exposed to foreign currency fluctuations against a decline in the
value of that currency relative to the U.S. dollar. This is accomplished by
entering into forward currency contracts to sell an amount of that currency (or
a proxy currency whose performance is expected to replicate or exceed the
performance of that currency relative to the U.S. dollar) approximating the
value of some or all of its fund securities denominated in that currency
("position hedge"), or by participating in options or futures contracts with
respect to the currency.
A fund also may enter into a forward currency contract with respect to a
currency where such fund is considering the purchase or sale of investments
denominated in that currency but has not yet selected the specific investments
("anticipatory hedge"). In any of these circumstances a fund may, alternatively,
enter into a forward currency contract to purchase or sell one foreign currency
for a second currency that is expected to perform more favorably relative to the
U.S. dollar if the fund's sub-adviser believes there is a reasonable degree of
correlation between movements in the two currencies ("cross-hedge").
These types of hedging seek to minimize the effect of currency appreciation as
well as depreciation, but do not eliminate fluctuations in the underlying U.S.
dollar equivalent value of the proceeds of, or rates of return on, a fund's
foreign currency denominated fund securities.
The matching of the increase in value of a forward currency contract and the
decline in the U.S. dollar equivalent value of the foreign currency denominated
asset that is the subject of the hedge generally will not be precise. Shifting a
fund's currency exposure from one foreign currency to another removes that
fund's opportunity to profit from increases in the value of the original
currency and involves a risk of increased losses to such fund if the fund's
sub-adviser's position projection of future exchange rates is inaccurate. Proxy
hedges and cross-hedges may result in losses if the currency used
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to hedge does not perform similarly to the currency in which hedged securities
are denominated. Unforeseen changes in currency prices may result in poorer
overall performance for a fund than if it had not entered into such contracts.
A fund will cover outstanding forward currency contracts by maintaining liquid
fund securities denominated in the currency underlying the forward contract or
the currency being hedged. To the extent that a fund is not able to cover its
forward currency positions with underlying fund securities, its custodian will
segregate cash or other liquid assets having a value equal to the aggregate
amount of such fund's commitments under forward contracts entered into with
respect to position hedges, cross-hedges and anticipatory hedges. If the value
of the securities used to cover a position or the value of segregated assets
declines, the fund will find alternative cover or segregate additional cash or
other liquid assets on a daily basis so that the value of the covered and
segregated assets will be equal to the amount of a fund's commitments with
respect to such contracts.
As an alternative to segregating assets, a fund may buy call options permitting
the fund to buy the amount of foreign currency being hedged by a forward sale
contract, or a fund may buy put options permitting it to sell the amount of
foreign currency subject to a forward buy contract.
While forward currency contracts are not currently regulated by the CFTC, the
CFTC may in the future assert authority to regulate forward currency contracts.
In such event, a fund's ability to utilize forward currency contracts may be
restricted. In addition, a fund may not always be able to enter into forward
currency contracts at attractive prices and may be limited in its ability to
use these contracts to hedge its assets.
SWAPS AND SWAP-RELATED PRODUCTS. In order to attempt to protect the value of its
investments from interest rate or currency exchange rate fluctuations, a fund
may, subject to its investment restrictions, enter into interest rate and
currency exchange rate swaps, and may buy or sell interest rate and currency
exchange rate caps and floors. A fund's sub-adviser may enter into these
transactions primarily to attempt to preserve a return or spread on a particular
investment or portion of its portfolio. A fund also may enter into these
transactions to attempt to protect against any increase in the price of
securities the fund may consider buying at a later date.
The funds do not intend to use these transactions as a speculative investment.
Interest rate swaps involve the exchange by a fund with another party of their
respective commitments to pay or receive interest, e.g., an exchange of
floating rate payments for fixed rate payments. The exchange commitments can
involve payments to be made in the same currency or in different currencies.
The purchase of an interest rate cap entitles the purchaser, to the extent that
a specified index exceeds a predetermined interest rate, to receive payments of
interest on a contractually based principal amount from the party selling the
interest rate cap. The purchase of an interest rate floor entitles the
purchaser, to the extent that a specified index falls below a predetermined
interest rate, to receive payments of interest on a contractually based
principal amount from the party selling the interest rate floor.
A fund, subject to its investment restrictions, enters into interest rate swaps,
caps and floors on either an asset-based or liability-based basis, depending
upon whether it is hedging its assets or its liabilities, and will usually enter
into interest rate swaps on a net basis (I.E., the two payment streams are
netted out, with a fund receiving or paying, as the case may be, only the net
amount of the two payments). The net amount of the excess, if any, of a fund's
obligations over its entitlements with respect to each interest rate swap, will
be calculated on a daily basis. An amount of cash or other liquid assets having
an aggregate net asset at least equal to the accrued excess will be segregated
by its custodian.
If a fund enters into an interest rate swap on other than a net basis, it will
maintain a segregated account in the full amount accrued on a daily basis of its
obligations with respect to the swap. A fund will not enter into any interest
rate swap, cap or floor transaction unless the unsecured senior debt or the
claims-paying ability of the other party thereto is rated in one of the three
highest rating categories of at least one nationally recognized statistical
rating organization at the time of entering into such transaction. A fund's
sub-adviser will monitor the creditworthiness of all counterparties on an
ongoing basis. If there is a default by the other party to such a transaction,
the fund will have contractual remedies pursuant to the agreements related to
the transaction.
The swap market has grown substantially in recent years with a large number of
banks and investment banking firms acting both as principals and as agents
utilizing standardized swap documentation. The sub-advisers have determined
that, as a result, the swap market has become relatively liquid. Caps and floors
are more recent innovations for which standardized documentation has not yet
been developed and, accordingly, they are less liquid than swaps. To the extent
a fund
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sells (I.E., writes) caps and floors, it will segregate cash or other liquid
assets having an aggregate net asset value at least equal to the full amount,
accrued on a daily basis, of its obligations with respect to any caps or floors.
There is no limit on the amount of interest rate swap transactions that may be
entered into by a fund, unless so stated in its investment objectives, although
none of the funds presently intends to engage in such transactions in excess of
5% of its total assets. These transactions may in some instances involve the
delivery of securities or other underlying assets by a fund or its counterparty
to collateralize obligations under the swap.
Under the documentation currently used in those markets, the risk of loss with
respect to interest rate swaps is limited to the net amount of the interest
payments that a fund is contractually obligated to make. If the other party to
an interest rate swap that is not collateralized defaults, a fund would risk
the loss of the net amount of the payments that it contractually is entitled to
receive. A fund may buy and sell (I.E., write) caps and floors without
limitation, subject to the segregation requirement described above.
In addition to the instruments, strategies and risks described in this SAI and
in the prospectus, there may be additional opportunities in connection with
options, futures contracts, forward currency contracts and other hedging
techniques that become available as a fund's sub-adviser develops new
techniques, as regulatory authorities broaden the range of permitted
transactions, and as new instruments are developed. The funds' sub-advisers may
use these opportunities to the extent they are consistent with each fund's
investment objective and as are permitted by a fund's investment limitations and
applicable regulatory requirements.
INDEX OPTIONS. In seeking to hedge all or a portion of its investments, a fund
may purchase and write put and call options on securities indices listed on U.S.
or foreign securities exchanges or traded in the over-the-counter market, which
indices include securities held in the funds. The funds with such option writing
authority may write only covered options. A fund may also use securities index
options as a means of participating in a securities market without making direct
purchases of securities.
A securities index measures the movement of a certain group of securities by
assigning relative values to the securities included in the index. Options on
securities indices are generally similar to options on specific securities.
Unlike options on securities, however, options on securities indices do not
involve the delivery on an underlying security; the option in the case of an
option on a securities index represents the holder's right to obtain from the
writer in cash a fixed multiple of the amount by which the exercise price
exceeds (in the case of a call) or is less than (in the case of a put) the
closing value of the underlying securities index on the exercise date. A fund
may purchase and write put and call options on securities indices or securities
index futures contracts that are traded on a U.S. exchange or board of trade or
a foreign exchange, to the extent permitted under rules and interpretations of
the CFTC, as a hedge against changes in market conditions and interest rates,
and for duration management, and may enter into closing transactions with
respect to those options to terminate existing positions. A securities index
fluctuates with changes in the market values of the securities included in the
index. Securities index options may be based on a broad or narrow market index
or on an industry or market segment.
The delivery requirements of options on securities indices differ from options
on securities. Unlike a securities option, which contemplates the right to take
or make delivery of securities at a specified price, an option on a securities
index gives the holder the right to receive a cash "exercise settlement amount"
equal to (i) the amount, if any, by which the fixed exercise price of the option
exceeds (in the case of a put) or is less than (in the case of a call) the
closing value of the underlying index on the date of exercise, multiplied by
(ii) a fixed "index multiplier." Receipt of this cash amount will depend upon
the closing level of the securities index upon which the option is based being
greater than, in the case of a call, or less than, in the case of a put, the
exercise price of the option. The amount of cash received will be equal to the
difference between the closing price of the index and the exercise price of the
option expressed in dollars times a specified multiple. The writer of the option
is obligated, in return for the premium received, to make delivery of this
amount. The writer may offset its position in securities index options prior to
expiration by entering into a closing transaction on an exchange or it may allow
the option to expire unexercised.
The effectiveness of purchasing or writing securities index options as a hedging
technique will depend upon the extent to which price movements in the portion of
a securities portfolio being hedged correlate with price movements of the
securities index selected. Because the value of an index option depends upon
movements in the level of the index rather than the price of a particular
security, whether a fund realizes a gain or loss from
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the purchase of writing of options on an index depends upon movements in the
level of prices in the market generally or, in the case of certain indices, in
an industry or market segment, rather than movements in the price of a
particular security. As a result, successful use by a fund of options on
securities indices is subject to the sub-adviser's ability to predict correctly
movements in the direction of the market generally or of a particular industry.
This ability contemplates different skills and techniques from those used in
predicting changes in the price of individual securities.
Securities index options are subject to position and exercise limits and other
regulations imposed by the exchange on which they are traded. The ability of a
fund to engage in closing purchase transactions with respect to securities index
options depends on the existence of a liquid secondary market. Although a fund
will generally purchase or write securities index options only if a liquid
secondary market for the options purchased or sold appears to exist, no such
secondary market may exist, or the market may cease to exist at some future
date, for some options. No assurance can be given that a closing purchase
transaction can be effected when the sub-adviser desires that a fund engage in
such a transaction.
WEBS AND OTHER INDEX-RELATED SECURITIES. A fund may invest in shares of an
investment company whose shares are known as "World Equity Benchmark Shares" or
"WEBS." WEBS have been listed for trading on the American Stock Exchange, Inc.
The funds also may invest in the CountryBaskets Index Fund, Inc., or another
fund the shares of which are the substantial equivalent of WEBS. A fund may
invest in S&P Depositary Receipts, or "SPDRs." SPDRs are securities that
represent ownership in a long-term unit investment trust that holds a portfolio
of common stocks designed to track the performance of the S&P 500 Index. A fund
investing in a SPDR would be entitled to the dividends that accrue to the S&P
500 stocks in the underlying portfolio, less trust expenses.
EURO INSTRUMENTS. The funds may each make investments in Euro instruments. Euro
instruments are U.S. dollar-denominated futures contracts, or options thereon,
which are linked to the London Interbank Offered Rate (the "LIBOR"), although
foreign currency-denominated instruments are available from time to time. Euro
futures contracts enable purchasers to obtain a fixed rate for the lending of
funds, and sellers to obtain a fixed rate for borrowings. A fund might use Euro
futures contracts and options thereon to hedge against changes in LIBOR, which
may be linked to many interest rate swaps and fixed income instruments.
SPECIAL INVESTMENT CONSIDERATIONS AND RISKS. The successful use of the
investment practices described above with respect to futures contracts, options
on futures contracts, forward contracts, options on securities, options on
foreign currencies and swaps and swap-related products draws upon skills and
experience which are different from those needed to select the other instruments
in which a fund may invest. Should interest or exchange rates, or the prices of
securities or financial indices move in an unexpected manner, a fund may not
achieve the desired benefits of the foregoing instruments or may realize losses
and thus be in a worse position than if such strategies had not been used.
Unlike many exchange-traded futures contracts and options on futures contracts,
there are no daily price fluctuation limits with respect to options on
currencies, forward contracts and other negotiated or over-the-counter
instruments, and adverse market movements could therefore continue to an
unlimited extent over a period of time. In addition, the correlation between
movements in the price of the securities and currencies hedged or used for cover
will not be perfect and could produce unanticipated losses.
A fund's ability to dispose of its positions in the foregoing instruments will
depend on the availability of liquid markets in the instruments. Markets in a
number of the instruments are relatively new and still developing, and it is
impossible to predict the amount of trading interest that may exist in those
instruments in the future.
Particular risks exist with respect to the use of each of the foregoing
instruments and could result in such adverse consequences to a fund as: the
possible loss of the entire premium paid for an option bought by a fund; the
inability of the fund, as the writer of a covered call option, to benefit from
the appreciation of the underlying securities above the exercise price of the
option; and the possible need to defer closing out positions in certain
instruments to avoid adverse tax consequences. As a result, no assurance can be
given that a fund will be able to use those instruments effectively for their
intended purposes.
In connection with certain of its hedging transactions, a fund must segregate
assets with the fund's custodian bank to ensure that such fund will be able to
meet its obligations pursuant to these instruments. Segregated assets generally
may not be disposed of for so long as a fund maintains the positions giving rise
to the segregation requirement. Segregation of a large percentage of a fund's
assets could impede implementation of that fund's investment policies or its
ability to meet redemption requests or other current obligations.
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ADDITIONAL RISKS OF OPTIONS ON FOREIGN CURRENCIES, FORWARD CONTRACTS AND FOREIGN
INSTRUMENTS. Unlike transactions entered into by a fund in futures contracts,
options on foreign currencies and forward contracts are not traded on contract
markets regulated by the CFTC or (with the exception of certain foreign currency
options) by the SEC. To the contrary, such instruments are traded through
financial institutions acting as market-makers, although foreign currency
options are also traded on certain national securities exchanges, such as the
Philadelphia Stock Exchange and the Chicago Board Options Exchange, subject to
SEC regulation.
Options on currencies may be traded over-the-counter. In an over-the-counter
trading environment, many of the protections afforded to exchange participants
will not be available. For example, there are no daily price fluctuation
limits, and adverse market movements could therefore continue to an unlimited
extent over a period of time. Although the buyer of an option cannot lose more
than the amount of the premium plus related transaction costs, this entire
amount could be lost. Moreover, an option writer and a buyer or seller of
futures or forward contracts could lose amounts substantially in excess of any
premium received or initial margin or collateral posted due to the potential
additional margin and collateral requirements associated with such positions.
Options on foreign currencies traded on national securities exchanges are within
the jurisdiction of the SEC, as are other securities traded on such exchanges.
As a result, many of the protections provided to traders on organized exchanges
will be available with respect to such transactions. In particular, all foreign
currency option positions entered into on a national securities exchange are
cleared and guaranteed by the OCC, thereby reducing the risk of counterparty
default. Further, a liquid secondary market in options traded on a national
securities exchange may be more readily available than in the over-the-counter
market, potentially permitting a fund to liquidate open positions at a profit
prior to exercise or expiration, or to limit losses in the event of adverse
market movements.
The purchase and sale of exchange-traded foreign currency options, however, is
subject to the risks of the availability of a liquid secondary market described
above, as well as the risks regarding adverse market movements, margining of
options written, the nature of the foreign currency market, possible
intervention by governmental authorities and the effects of other political and
economic events.
In addition, exchange-traded options on foreign currencies involve certain risks
not presented by the over-the-counter market. For example, exercise and
settlement of such options must be made exclusively through the OCC, which has
established banking relationships in applicable foreign countries for this
purpose. As a result, the OCC may, if it determines that foreign government
restrictions or taxes would prevent the orderly settlement of foreign currency
option exercises, or would result in undue burdens on the OCC or its clearing
member, impose special procedures on exercise and settlement. These include such
things as technical changes in the mechanics of delivery of currency, the fixing
of dollar settlement prices or prohibitions on exercise.
In addition, options on U.S. government securities, futures contracts, options
on futures contracts, forward contracts and options on foreign currencies may be
traded on foreign exchanges and over-the-counter in foreign countries. Such
transactions are subject to the risk of governmental actions affecting trading
in or the prices of foreign currencies or securities. The value of such
positions also could be adversely affected by: (i) other complex foreign
political and economic factors; (ii) less availability than that available in
the United States of data on which to make trading decisions; (iii) delays in a
fund's ability to act upon economic events occurring in foreign markets during
non-business hours in the United States; (iv) the imposition of different
exercise and settlement terms and procedures and margin requirements than in the
United States; and (v) low trading volume.
OTHER INVESTMENT COMPANIES
Subject to its investment restrictions, a fund may invest in securities issued
by other investment companies as permitted. A fund may indirectly bear a portion
of any investment advisory fees and expenses paid by funds in which it invests,
in addition to the advisory fees and expenses paid by the fund.
GEI SHORT-TERM INVESTMENT FUND
The IDEX GE/Scottish Equitable Internation Equity fund may invest in the GEI
Short-Term Investment Fund (the "Investment Fund"), an investment fund created
specifically to serve as a vehicle for the collective investment of cash
balances of accounts advised by GEIM or its affiliate, General Electric
Investment Corporation. The Investment Fund invests exclusively in certain money
market instruments. More particularly, the Investment Fund may invest in: (i)
securities issued or guaranteed by the U.S. government or one of its agencies or
instrumentalities, (ii) debt obligations of banks, savings and loan
institutions, insurance companies and mortgage bankers, (iii) commercial paper
and notes, including those with variable and floating rates of interest, (iv)
debt
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obligations of foreign branches of foreign banks, (v) debt obligations issued or
guaranteed by one or more foreign governments or any of their political
subdivisions, agencies or instrumentalities, including obligations of
supranational entities, (vi) debt securities issued by foreign issuers and (vii)
repurchase agreements. The Investment Fund is advised by GEIM. No advisory fee
is charged by GEIM to the Investment Fund, nor will the IDEX GE/Scottish
Equitable International Equity fund incur any sales charge, redemption fee,
distribution fee or service fee in connection with its investments in the
Investment Fund.
WHEN-ISSUED, DELAYED SETTLEMENT AND
FORWARD DELIVERY SECURITIES
Securities may be purchased and sold on a "when-issued," "delayed settlement,"
or "forward (delayed) delivery" basis.
"When-issued" or "forward delivery" refers to securities whose terms are
available, and for which a market exists, but which are not available for
immediate delivery. When-issued or forward delivery transactions may be expected
to occur a month or more before delivery is due.
A fund may engage in when-issued transactions to obtain what is considered to
be an advantageous price and yield at the time of the transaction. When a fund
engages in when-issued or forward delivery transactions, it will do so for the
purpose of acquiring securities consistent with its investment objective and
policies and not for the purpose of investment leverage.
"Delayed settlement" is a term used to describe settlement of a securities
transaction in the secondary market which will occur sometime in the future. No
payment or delivery is made by a fund until it receives payment or delivery from
the other party for any of the above transactions.
The fund will segregate with its custodian cash, U.S. government securities or
other liquid assets at least equal to the value or purchase commitments until
payment is made. The segregated securities will either mature or, if necessary,
be sold on or before the settlement date. Typically, no income accrues on
securities purchased on a delayed delivery basis prior to the time delivery of
the securities is made, although a fund may earn income on securites it has
segregated to collateralize its delayed delivery purchases.
New issues of stocks and bonds, private placements and U.S. government
securities may be sold in this manner.
RISK FACTORS
At the time of settlement, the market value of the security may be more or less
than the purchase price. A fund bears the risk of such market value
fluctuations. These transactions also involve the risk that the other party to
the transaction may default on its obligation to make payment or delivery. As a
result, the fund may be delayed or prevented from completing the transaction and
may incur additional costs as a consequence of the delay.
ZERO COUPON, PAY-IN-KIND AND STEP COUPON SECURITIES
Subject to its investment restrictions, a fund may invest in zero coupon,
pay-in-kind and step-coupon securities. Zero-coupon bonds are issued and traded
at a discount from their face value. They do not entitle the holder to any
periodic payment of interest prior to maturity. Step coupon bonds trade at a
discount from their face value and pay coupon interest. The coupon rate is low
for an initial period and then increases to a higher coupon rate thereafter. The
discount from the face amount or par value depends on the time remaining until
cash payments begin, prevailing interest rates, liquidity of the security and
the perceived credit quality of the issuer. Pay-in-kind bonds give the issuer an
option to pay cash at a coupon payment date or give the holder of the security a
similar bond with the same coupon rate and a face value equal to the amount of
the coupon payment that would have been made. The IDEX JCC Flexible Income may
also invest in "strips," which are debt securities that are stripped of their
interest after the securities are issued, but otherwise are comparable to zero
coupon bonds.
Current federal income tax law requires holders of zero-coupon securities and
step-coupon securities to report the portion of the original issue discount on
such securities that accrues that year as interest income, even though the
holders receive no cash payments of interest during the year. In order to
qualify as a "regulated investment company" under the Internal Revenue Code of
1986 ("Code"), a fund must distribute its investment company taxable income,
including the original issue discount accrued on zero-coupon or step-coupon
bonds. Because it will not receive cash payments on a current basis in respect
of accrued original-issue discount on zero-coupon bonds or step-coupon bonds
during the period before interest payments begin, in some years a fund may have
to distribute cash obtained from other sources in order to satisfy the
distribution requirements under the Code. A fund might obtain such cash from
selling other portfolio holdings. These actions may
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reduce the assets to which fund expenses could be allocated and may reduce the
rate of return for such fund. In some circumstances, such sales might be
necessary in order to satisfy cash distribution requirements even though
investment considerations might otherwise make it undesirable for a fund to sell
the securities at the time.
Generally, the market prices of zero-coupon bonds and strip securities are more
volatile than the prices of securities that pay interest periodically in cash
and they are likely to respond to changes in interest rates to a greater degree
than other types of debt securities having similar maturities and credit
quality.
INCOME PRODUCING SECURITIES
IDEX JCC Flexible Income focuses its investments in income-producing
securities.
IDEX JCC Flexible Income will purchase defaulted securities only when the
sub-adviser believes, based upon analysis of the financial condition, results
of operations and economic outlook of an issuer, that there is potential for
resumption of income payments and that the securities offer an unusual
opportunity for capital appreciation. Notwithstanding the sub-adviser's belief
as to the resumption of income payments, however, the purchase of any security
on which payment of interest or dividends is suspended involves a high degree
of risk. Such risk includes, among other things, the following:
FINANCIAL AND MARKET RISKs. Investments in securities that are in default
involve a high degree of financial and market risks that can result in
substantial, or at times even total, losses. Issuers of defaulted
securities may have substantial capital needs and may become involved in
bankruptcy or reorganization proceedings. Among the problems involved in
investments in such issuers is the fact that it may be difficult to obtain
information about the condition of such issuers. The market prices of such
securities also are subject to abrupt and erratic movements and above
average price volatility, and the spread between the bid and asked prices
of such securities may be greater than normally expected.
DISPOSITION OF FUND SECURITIEs. IDEX JCC Flexible Income generally intends
to purchase securities for which its sub-adviser expects an active market
to be maintained, defaulted securities may be less actively traded than
other securities making it more difficult to dispose of substantial
holdings of such securities at prevailing market prices. IDEX JCC Flexible
Income will limit its holdings of any such securities to amounts that the
sub-adviser believes could be readily sold, and its holdings of such
securities would, in any event, be limited so as not to limit IDEX JCC
Flexible Income's ability to readily dispose of its securities to meet
redemptions.
OTHER. Defaulted securities require active monitoring and may, at times,
require participation in bankruptcy or receivership proceedings on behalf
of the IDEX JCC Flexible Income.
Other types of income producing securities that the funds may purchase include,
but are not limited to, the following:
VARIABLE AND FLOATING RATE OBLIGATIONS. These types of securities are
relatively long-term instruments that often carry demand features
permitting the holder to demand payment of principal at any time or at
specified intervals prior to maturity.
STANDBY COMMITMENTS. These instruments, which are similar to a put, give a
fund the option to obligate a broker, dealer or bank to repurchase a
security held by a fund at a specified price.
TENDER OPTION BONDS. Tender option bonds are relatively long-term bonds
that are coupled with the agreement of a third party (such as a broker,
dealer or bank) to grant the holders of such securities the option to
tender the securities to the institution at periodic intervals.
INVERSE FLOATERs. Inverse floaters are instruments whose interest bears an
inverse relationship to the interest rate on another security. The funds
will not invest more than 5% of their respective assets in inverse
floaters.
The funds will purchase instruments with demand features, standby commitments
and tender option bonds primarily for the purpose of increasing the liquidity of
their portfolios.
LENDING OF FUND SECURITIES
Subject to any applicable investment restriction relating to lending, a fund may
lend securities from its portfolio. Under applicable regulatory requirements
(which are subject to change), the following conditions apply to securities
loans: a) the loan must be continuously secured by liquid assets maintained on a
current basis in an amount at least equal to the market value of the securities
loaned; b) a fund must receive any dividends or interest paid by the issuer on
such securities; c) a fund must have the right to call the loan and obtain the
securities loaned at any time upon notice of not more
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than five business days, including the right to call the loan to permit voting
of the securities; and d) a fund must receive either interest from the
investment of collateral or a fixed fee from the borrower. Securities loaned by
a fund remain subject to fluctuations in market value. A fund may pay reasonable
finders, custodian and administrative fees in connection with a loan. Securities
lending, as with other extensions of credit, involves the risk that the borrower
may default. Although securities loans will be fully collateralized at all
times, a fund may experience delays in, or be prevented from, recovering the
collateral. During a period that a fund seeks to enforce its rights against the
borrower, the collateral and the securities loaned remain subject to
fluctuations in market value. A fund may also incur expenses in enforcing its
rights. If a fund has sold the loaned security, it may not be able to settle the
sale of the security and may incur potential liability to the buyer of the
security on loan for its costs to cover the purchase. A fund will not lend
securities to any adviser or sub-adviser to the funds or their affiliates. By
lending its securities, a fund can increase its income by continuing to receive
interest or dividends on the loaned securities as well as by either investing
the cash collateral in short-term securities or by earning income in the form of
interest paid by the borrower when U.S. government securities are used as
collateral.
JOINT TRADING ACCOUNTS
IDEX JCC Growth, IDEX JCC Global, IDEX JCC Flexible Income, IDEX JCC Balanced
and IDEX JCC Capital Appreciation, and other clients of Janus and its
affiliates, may place assets in joint trading accounts for the purpose of making
short-term investments in money market instruments. The Board of Trustees must
approve the participation of each of these funds in these joint trading accounts
and procedures pursuant to which the joint accounts will operate. The joint
trading accounts are to be operated pursuant to an exemptive order issued to
Janus and certain of its affiliates by the SEC. All joint account participants,
including these funds, will bear the expenses of the joint trading accounts in
proportion to their investments. Financial difficulties of other participants in
the joint accounts could cause delays or other difficulties for the funds in
withdrawing their assets from joint trading accounts.
ILLIQUID SECURITIES
Subject to its investment restrictions, a fund may invest its assets in illiquid
securities (I.E., securities that are not readily marketable). The Board of
Trustees has authorized the sub-advisers to make liquidity determinations with
respect to its securities, including Rule 144A securities, commercial paper and
municipal lease obligations in accordance with the guidelines established by the
Board of Trustees. Under the guidelines, the sub- adviser will consider the
following factors in determining whether a Rule 144A security or a municipal
lease obligation is liquid: 1) the frequency of trades and quoted prices for the
security; 2) the number of dealers willing to purchase or sell the security and
the number of other potential purchasers; 3) the willingness of dealers to
undertake to make a market in the security; and 4) the nature of the marketplace
trades, including the time needed to dispose of the security, the method of
soliciting offers and the mechanics of the transfer. With respect to municipal
lease obligations, the sub-adviser of IDEX AEGON Tax Exempt and IDEX JCC
Flexible Income will also consider factors unique to municipal lease obligations
including the general creditworthiness of the municipality, the importance of
the property covered by the lease obligation and the likelihood that the
marketability of the obligation will be maintained throughout the time the
obligation is held by the fund. The sale of illiquid securities often requires
more time and results in higher brokerage charges or dealer discounts and other
selling expenses than does the sale of securities eligible for trading on
national securities exchanges or in the over-the-counter markets. A fund may be
restricted in its ability to sell such securities at a time when the sub-adviser
deems it advisable to do so. In addition, in order to meet redemption requests,
a fund may have to sell other assets, rather than such illiquid securities, at a
time which is not advantageous.
REPURCHASE AND REVERSE REPURCHASE AGREEMENTS
Subject to its investment restrictions, a fund may enter into repurchase and
reverse repurchase agreements. In a repurchase agreement, a fund purchases a
security and simultaneously commits to resell that security to the seller at an
agreed upon price on an agreed upon date within a number of days (usually not
more than seven) from the date of purchase. The resale price reflects the
purchase price plus an agreed upon incremental amount which is unrelated to the
coupon rate or maturity of the purchased security. A repurchase agreement
involves the obligation of the seller to pay the agreed upon price, which
obligation is in effect secured by the value (at least equal to the amount of
the agreed upon resale price and marked-to-market daily) of the underlying
security or collateral. A fund may engage in a repurchase agreement with respect
to any security in which it is authorized to invest. While it does not presently
appear possible to eliminate all risks from these transactions (particularly the
possibility of a decline in the market value of the underlying securities, as
well as delays
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and costs to a fund in connection with bankruptcy proceedings), it is the policy
of each fund to limit repurchase agreements to those parties whose
creditworthiness has been reviewed and found satisfactory by the sub-adviser for
that fund and approved by the Board of Trustees. In addition, the funds
currently intend to invest primarily in repurchase agreements collateralized by
cash, U.S. government securities, or money market instruments whose value equals
at least 100% of the repurchase price, marked-to-market daily.
In a reverse repurchase agreement, a fund sells a portfolio instrument to
another party, such as a bank or broker-dealer, in return for cash and agrees
to repurchase the instrument at a particular price and time. While a reverse
repurchase agreement is outstanding, a fund will segregate with its custodian
cash and appropriate liquid assets with the funds' custodian to cover its
obligation under the agreement. The funds will enter into reverse repurchase
agreements only with parties the investment sub-adviser for each fund deems
creditworthy and that have been reviewed by the Board of Trustees.
The IDEX Goldman Sachs Growth may, together with other registered investment
companies managed by GSAM or its affiliates, transfer uninvested cash balances
into a single joint account, the daily aggregate balance of which will be
invested in one or more repurchase agreements.
PASS-THROUGH SECURITIES
Each of the funds may, in varying degrees, invest in various types of
pass-through securities, such as mortgage-backed securities, asset-backed
securities and participation interests. A pass-through security is a share or
certificate of interest in a pool of debt obligations that has been repackaged
by an intermediary, such as a bank or broker-dealer. The purchaser receives an
undivided interest in the underlying pool of securities. The issuers of the
underlying securities make interest and principal payments to the intermediary
which are passed through to purchasers, such as the funds.
The most common type of pass-through securities are mortgage-backed securities.
Government National Mortgage Association ("GNMA") Certificates are mortgage-
backed securities that evidence an undivided interest in a pool of mortgage
loans. GNMA Certificates differ from traditional bonds in that principal is paid
back monthly by the borrowers over the term of the loan rather than returned in
a lump sum at maturity. A fund will generally purchase "modified pass-through"
GNMA Certificates, which entitle the holder to receive a share of all interest
and principal payments paid and owned on the mortgage pool, net of fees paid to
the "issuer" and GNMA, regardless of whether or not the mortgagor actually makes
the payment. GNMA Certificates are backed as to the timely payment of principal
and interest by the full faith and credit of the U.S. government.
The Federal Home Loan Mortgage Corporation ("FHLMC") issues two types of
mortgage pass-through securities: mortgage participation certificates ("PCs")
and guaranteed mortgage certificates ("GMCs"). PCs resemble GNMA Certificates in
that each PC represents a pro rata share of all interest and principal payments
made and owned on the underlying pool. FHLMC guarantees timely payments of
interest on PCs and the full return of principal. GMCs also represent a pro rata
interest in a pool of mortgages. However, these instruments pay interest
semi-annually and return principal once a year in guaranteed minimum payments.
This type of security is guaranteed by FHLMC as to timely payment of principal
and interest, but is not backed by the full faith and credit of the U.S.
government.
The Federal National Mortgage Association ("FNMA") issues guaranteed mortgage
pass-through certificates ("FNMA Certificates"). FNMA Certificates resemble GNMA
Certificates in that each FNMA Certificate represents a pro rata share of all
interest and principal payments made and owned on the underlying pool. This type
of security is guaranteed by FNMA as to timely payment of principal and
interest, but it is not backed by the full faith and credit of the U.S.
government.
Each of the mortgage-backed securities described above is characterized by
monthly payments to the holder, reflecting the monthly payments made by the
borrowers who received the underlying mortgage loans. The payments to the
security holders (such as a fund), like the payments on the underlying loans,
represent both principal and interest. Although the underlying mortgage loans
are for specified periods of time, such as 20 or 30 years, the borrowers can,
and typically do, pay them off sooner. Thus, the security holders frequently
receive prepayments of principal in addition to the principal that is part of
the regular monthly payments. A borrower is more likely to prepay a mortgage
that bears a relatively high rate of interest. This means that in times of
declining interest rates, some of a fund's higher yielding mortgage-backed
securities may be converted to cash. That fund will then be forced to accept
lower interest rates when that cash is used to purchase additional securities
in the mortgage-backed securities sector or in other investment sectors.
Mortgage and asset-backed securities may have periodic income payments or may
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pay interest at maturity (as is the case with Treasury bills or zero-coupon
bonds).
Asset-backed securities represent interests in pools of consumer loans and are
backed by paper or accounts receivables originated by banks, credit card
companies or other providers of credit. Generally, the originating bank or
credit provider is neither the obligor or guarantor of the security and interest
and principal payments ultimately depend upon payment of the underlying loans by
individuals. Tax-exempt asset-backed securities include units of beneficial
interests in pools of purchase contracts, financing leases, and sales agreements
that may be created when a municipality enters into an installment purchase
contract or lease with a vendor. Such securities may be secured by the assets
purchased or leased by the municipality; however, if the municipality stops
making payments, there generally will be no recourse against the vendor. The
market for tax-exempt asset-backed securities is still relatively new. These
obligations are likely to involve unscheduled prepayments of principal.
HIGH YIELD/HIGH-RISK BONDS
High-yield/high-risk bonds, below investment grade securities (commonly known as
"junk bonds") involve significant credit and liquidity concerns and fluctuating
yields, and are not suitable for short-term investing. Higher yields are
ordinarily available on fixed-income securities which are unrated or are rated
in the lower rating categories of recognized rating services such as Moody's and
Standard & Poor's.
Lower rated bonds also involve the risk that the issuer will not make interest
or principal payments when due. In the event of an unanticipated default, a fund
owning such bonds would experience a reduction in its income, and could expect a
decline in the market value of the securities so affected. Such funds,
furthermore, may incur additional costs in seeking the recovery of the defaulted
securities. More careful analysis of the financial condition of each issuer of
lower rated securities is therefore necessary. During an economic downturn or
substantial period of rising interest rates, highly leveraged issuers may
experience financial stress which would adversely affect their ability to
service their principal and interest payments obligations, to meet projected
business goals and to obtain additional financing.
The market prices of lower grade securities are generally less sensitive to
interest rate changes than higher rated investments, but more sensitive to
adverse economic or political changes or individual developments specific to the
issuer. Periods of economic or political uncertainty and change can be expected
to result in volatility of prices of these securities. Since the last major
economic recession, there has been a substantial increase in the use of
high-yield debt securities to fund highly leveraged corporate acquisitions and
restructurings, so past experience with high-yield securities in a prolonged
economic downturn may not provide an accurate indication of future performance
during such periods. Lower rated securities also may have less liquid markets
than higher rated securities, and their liquidity as well as their value may be
more severely affected by adverse economic conditions. Adverse publicity and
investor perceptions as well as new or proposed laws may also have a greater
negative impact on the market for lower rated bonds.
Unrated securities are not necessarily of lower quality than rated securities,
but the markets for lower rated and nonrated securities are more limited than
those in which higher rated securities are traded. In addition, an economic
downturn or increase in interest rates is likely to have a greater negative
effect on: (i) the market for lower rated and nonrated securities; (ii) the
value of high yield debt securities held by a fund; (iii) the new asset value of
a fund holding such securities; and (iv) the ability of the bonds' issuers to
repay principal and interest, meet projected business goals and obtain
additional financing than on higher rated securities.
WARRANTS AND RIGHTS
Subject to its investment restrictions, a fund may invest in warrants and
rights. A warrant is a type of security that entitles the holder to buy a
proportionate amount of common stock at a specified price, usually higher than
the market price at the time of issuance, for a period of years or to
perpetuity. In contrast, rights, which also represent the right to buy common
shares, normally have a subscription price lower than the current market value
of the common stock and a life of two to four weeks.
U.S. GOVERNMENT SECURITIES
Examples of the types of U.S. government securities that a fund may hold
include, in addition to those described in the prospectus and direct obligations
of the U.S. Treasury, the obligations of the Federal Housing Administration,
Farmers Home Administration, Small Business Administration, General Services
Administration, Central Bank for Cooperatives, Federal Farm Credit Banks,
Federal Home Loan Bank, Federal Intermediate Credit Banks, Federal Land Banks
and Maritime Administration. U.S. government securities may be supported by the
full faith and credit of the U.S. government (such as securities of the Small
Business Administration); by
34
<PAGE>
the right of the issuer to borrow from the Treasury (such as securities of the
Federal Home Loan Bank); by the discretionary authority of the U.S. government
to purchase the agency's obligations (such as securities of the Federal National
Mortgage Association); or only by the credit of the issuing agency.
MONEY MARKET RESERVES
(IDEX T. ROWE PRICE SMALL CAP AND IDEX T. ROWE PRICE DIVIDEND GROWTH)
It is expected that these funds will invest their cash reserves primarily in a
money market fund established for the exclusive use of the T. Rowe Price family
of mutual funds and other clients of T. Rowe Price and Price-Fleming. The
Reserve Investment Fund ("RIF") is a series of Reserve Investment Funds, Inc.
Additional series may be created in the future. The RIF was created and is
operated pursuant to an Exemptive Order issued by the SEC (Investment Company
Act Release No. IC-22770, July 29, 1997).
The RIF must comply with the requirements of Rule 2a-7 under the 1940 Act
governing money market funds. To that end, the RIF invests at least 95% of its
total assets in prime money market instruments receiving the highest credit
rating from at least one Nationally Recognized Statistical Rating Organization.
The RIF provides a very efficient means of managing the cash reserves of the
funds. While the RIF does not pay an advisory fee to the investment manager, it
will incur other expenses. However, the RIF is expected by T. Rowe Price to
operate at a very low expense ratio. The funds will only invest in the RIF to
the extent it is consistent with their objectives and programs and the terms of
the Exemptive Order issued by the SEC.
The RIF is not insured or guaranteed by the U.S. government, and there is no
assurance it will maintain a stable net asset value of $1.00 per share.
TURNOVER RATE
<TABLE>
<CAPTION>
FUND* OCTOBER 31,1998 OCTOBER 31, 1997
- ------------------------------------------------- ----------------- -----------------
<S> <C> <C>
IDEX Alger Aggressive Growth 142.08% 120.96%
IDEX GE/Scottish Equitable International Equity 50.01% 21.85%
IDEX JCC Capital Appreciation 136.59% 130.48%
IDEX JCC Global 87.68% 91.02%
IDEX JCC Growth 27.19% 91.52%
IDEX C.A.S.E. Growth 147.01% 183.06%
IDEX NWQ Value Equity 30.43% 6.40%
IDEX LKCM Strategic Total Return 32.12% 51.44%
IDEX Dean Asset Allocation 55.45% 71.63%
IDEX JCC Balanced 61.50% 127.08%
IDEX JCC Flexible Income 90.63% 135.53%
IDEX AEGON Income Plus 53.09% 62.28%
IDEX AEGON Tax Exempt 42.42% 71.29%
</TABLE>
- ------------------------------
* No information is included for IDEX Goldman Sachs Growth, IDEX T. Rowe Price
Dividend Growth, IDEX Salomon All Cap, IDEX Pilgrim Baxter Mid Cap Growth or
IDEX T. Rowe Price Small Cap as these funds commenced operations on March 1,
1999.
As stated in the prospectus, each of the funds generally intends to purchase and
sell securities as deemed appropriate by the fund's sub-adviser to further a
fund's stated investment objective, and the rate of fund turnover is not
expected to be a limiting factor when changes are deemed to be appropriate. Fund
transactions for IDEX AEGON Tax Exempt and IDEX AEGON Income Plus are ordinarily
undertaken to achieve each fund's investment objective in light of anticipated
movements in the level of interest rates. The investment policies of IDEX AEGON
Tax Exempt and IDEX AEGON Income Plus may lead to frequent changes in
investments, particularly in periods of rapidly fluctuating interest rates.
These percentages are calculated by dividing the lesser of purchases or sales of
fund securities during the fiscal year by the monthly average of the value of
such securities (excluding from the computation all securities, including
options, with maturities at the time of acquisition of one year or less). For
example, a fund turnover rate of 100% would mean that all of a fund's securities
(except those excluded from the calculation) were replaced once in a period of
one year. A high rate of fund turnover generally involves correspondingly
greater brokerage commission expenses.
Turnover rates may vary greatly from year to year, as well as within a
particular year, and may also be affected
35
<PAGE>
by cash requirements for redemptions of a fund's shares and by requirements, the
satisfaction of which enable the fund to receive favorable tax treatment.
Because the rate of fund turnover is not a limiting factor, particular holdings
may be sold at any time if investment judgment or fund operations make a sale
advisable. As a result, the annual fund turnover rate in future years may exceed
the percentage shown above.
INVESTMENT ADVISORY AND OTHER SERVICES
IDEX Mutual Funds has entered into a Management and Investment Advisory
Agreement ("Advisory Agreement") on behalf of each fund with Idex Management,
Inc. ("IMI"), located at 570 Carillon Parkway, St. Petersburg, Florida 33716.
IMI supervises each respective fund's investments and conducts its investment
program.
The Advisory Agreement provides that IMI will perform the following services or
cause them to be performed by others: (i) furnish to the fund investment advice
and recommendations; (ii) supervise the purchase and sale of securities as
directed by appropriate fund officers, and (iii) be responsible for the
administration of each fund. For services to IDEX JCC Capital Appreciation, IDEX
JCC Global, IDEX JCC Growth and IDEX JCC Balanced, IMI receives an annual fee,
computed daily and paid monthly, equal to 1.00% of the first $750 million of
each fund's average daily net assets, 0.90% of the next $250 million of each
fund's average daily net assets, and 0.85% of the average daily net assets of
that fund in excess of $1 billion. For services to IDEX JCC Flexible Income, IMI
receives 0.90% of the first $100 million, 0.80% of the next $150 million and
0.70% of the fund's average daily net assets over $250 million; for IDEX AEGON
Income Plus and IDEX AEGON Tax Exempt, IMI receives 0.60% of each fund's average
daily net assets; and for IDEX Alger Aggressive Growth, IDEX GE/Scottish
Equitable International Equity, IDEX C.A.S.E. Growth, IDEX NWQ Value Equity,
IDEX LKCM Strategic Total Return, IDEX Dean Asset Allocation, IDEX Goldman Sachs
Growth, IDEX T. Rowe Price Dividend Growth, IDEX Salomon All Cap, IDEX Pilgrim
Baxter Mid Cap Growth, and IDEX T. Rowe Price Small Cap, IMI receives 0.80% of
the first $500 million of each fund's average daily net assets and 0.70% of each
fund's average daily net assets over $500 million.
The duties and responsibilities of the investment adviser are specified in the
Advisory Agreement. The Advisory Agreement was approved by the Board of Trustees
(including a majority of trustees who are not parties to the Advisory Agreement
or interested persons, as defined by the 1940 Act, of any such party). The
Advisory Agreement is not assignable and may be terminated without penalty upon
60 days' written notice at the option of either the Fund, IMI or by a vote of
shareholders of each fund. The Advisory Agreement provides that it can be
continued from year to year so long as such continuance is specifically approved
annually (a) by the Board of Trustees or by a majority of the outstanding shares
of each fund and (b) by a majority vote of the Trustees who are not parties to
the Advisory Agreement or interested persons of any such party cast in person at
a special meeting called for such purposes. Prior to March 1, 1999,
InterSecurities, Inc. served as investment adviser to IDEX AEGON Tax Exempt,
IDEX AEGON Income Plus, IDEX GE/Scottish Equitable International Equity, IDEX
C.A.S.E. Growth, IDEX NWQ Value Equity, IDEX LKCM Strategic Total Return, IDEX
Dean Asset Allocation and IDEX Alger Aggressive Growth.
The Advisory Agreement also provides that IMI shall not be liable to the funds
or to any shareholder for any error of judgment or mistake of law or for any
loss suffered by a fund or by any shareholder in connection with matters to
which the Advisory Agreement relates, except for a breach of fiduciary duty or a
loss resulting from willful misfeasance, bad faith, gross negligence, or
reckless disregard on the part of IMI in the performance of its duties
thereunder.
The Advisory Agreement became effective as follows: IDEX AEGON Tax Exempt -
April 22, 1991; IDEX AEGON Income Plus - April 22, 1992; IDEX Alger Aggressive
Growth and IDEX LKCM Strategic Total Return - September 30, 1994; IDEX Dean
Asset Allocation - June 1, 1995; IDEX C.A.S.E. Growth - November 15, 1995; IDEX
NWQ Value Equity - October 30, 1996; IDEX GE/Scottish Equitable International
Equity - February 1, 1997; IDEX JCC Capital Appreciation, IDEX JCC Global, IDEX
JCC Growth, IDEX JCC Balanced and IDEX JCC Flexible Income - June 25, 1998; IDEX
Pilgrim Baxter Mid Cap Growth, IDEX T. Rowe Price Small Cap, IDEX Goldman Sachs
Growth, IDEX T. Rowe Price Dividend Growth, and IDEX Salomon All Cap. - March 1,
1999.
Each fund pays its allocable share of the fees and expenses of a fund's
non-interested trustees, custodian and transfer agent fees, brokerage
commissions and all other expenses in connection with the execution of its
portfolio transactions, administrative, clerical, recordkeeping, bookkeeping,
legal, auditing and accounting expenses, interest and taxes, expenses of
preparing tax returns, expenses of shareholders' meetings and preparing,
printing and mailing proxy statements (unless otherwise agreed to by the funds
or IMI,
36
<PAGE>
expenses of preparing and typesetting periodic reports to shareholders (except
for those reports the funds permit to be used as sales literature), and the
costs, including filing fees, of renewing or maintaining registration of fund
shares under federal and state law. The investment adviser will reimburse a
fund, or waive fees, or both, whenever, in any fiscal year, the total cost to a
fund of normal operating expenses chargeable to its income account, including
the investment advisory fee but excluding brokerage commissions, interest,
taxes and 12b-1 fees, exceeds, in the case of the IDEX JCC Capital
Appreciation, IDEX JCC Growth, IDEX JCC Balanced and IDEX JCC Flexible Income,
1.50% of each fund's average daily net assets; in the case of IDEX GE/Scottish
Equitable International Equity 1.45% of average daily net assets; in the case
of IDEX AEGON Income Plus, 1.25% of average daily net assets; in the case of
the IDEX AEGON Tax Exempt, 1.00% of average daily net assets; and 1.20% of a
fund's average daily net assets for all other funds. The IDEX JCC Global does
not have an expense limitation.
<TABLE>
<CAPTION>
ADVISORY FEE AFTER REIMBURSEMENT
----------------------------------------------------------------------------
OCTOBER 31 SEPTEMBER 30
------------------------------------------------------- --------------------
FUND ADVISER 1998 1997 1996 1996
- ------------------------- --------- ------------- --------------- --------------- --------------------
<S> <C> <C> <C> <C> <C>
IDEX Alger Aggressive
Growth** IMI $ 344,018 $ 130,896 $ 5,163 $ 56,761
IDEX GE/Scottish
Equitable
International Equity** IMI $ (64,180) $ (110,543) N/A N/A
IDEX JCC Capital
Appreciation IMI $ 167,150 $ 45,071 $ 7,502 $ 19,350
IDEX JCC Global IMI $3,907,062 $ 2,224,062 $126,856 $1,130,757
IDEX JCC Growth IMI $1,352,188 $11,676,637 $952,996 $5,459,981
IDEX C.A.S.E.
Growth** IMI $ 36,124 $ (96,157) $(11,137) $ (36,998)
IDEX NWQ Value
Equity** IMI $ 46,140 $ (63,589) N/A N/A
IDEX LKCM Strategic
Total Return** IMI $ 380,273 $ 127,630 $ 1,140 $ 5,591
IDEX Dean Asset
Allocation** IMI $ 325,285 $ 120,873 $ 2,983 $ 53,542
IDEX JCC Balanced IMI $ 206,736 $ (4,940) $ (4,993) $ (21,773)
IDEX JCC Flexible
Income IMI $ 151,489 $ 60,744 $ (3,566) $ 133,035
IDEX AEGON Income
Plus** IMI $ 441,912 $ 416,928 $ 35,332 $ 414,023
IDEX AEGON Tax
Exempt** IMI $ 136,481 $ (7,330) $ (6,243) $ 35,970
<CAPTION>
ADVISORY FEE REIMBURSEMENTS
---------------------------------------------------------
OCTOBER 31 SEPTEMBER 30
-------------------------------------- ------------------
FUND 1998 1997 1996 1996
- ------------------------- ----------- ----------- -------------- ------------------
<S> <C> <C> <C> <C>
IDEX Alger Aggressive
Growth** $173,443 $192,695 $17,394 $169,995
IDEX GE/Scottish
Equitable
International Equity** $117,653 $128,291 N/A N/A
IDEX JCC Capital
Appreciation $107,861 $193,491 $12,709 $122,710
IDEX JCC Global 0 0 0 0
IDEX JCC Growth 0 0 0 0
IDEX C.A.S.E.
Growth** $ 51,462 $150,161 $13,949 $ 55,165
IDEX NWQ Value
Equity** $ 93,563 $104,638 N/A N/A
IDEX LKCM Strategic
Total Return** $ 30,860 $ 96,214 $11,492 $ 92,079
IDEX Dean Asset
Allocation** $ 8,119 $ 99,277 $11,829 $ 28,453
IDEX JCC Balanced $ 50,820 $139,247 $13,490 $106,223
IDEX JCC Flexible
Income $ 186 $ 95,242 $17,675 $ 41,410
IDEX AEGON Income
Plus** 0 0 0 0
IDEX AEGON Tax
Exempt** $ 10,071 $155,172 $19,367 $123,530
</TABLE>
- ------------------------------
* No information is included for the IDEX Goldman Sachs Growth, IDEX T. Rowe
Price Dividend Growth, IDEX Salomon All Cap, IDEX Pilgrim Baxter Mid Cap
Growth or IDEX T. Rowe Price Small Cap as they did not commence operations
until March 1, 1999.
** Prior to March 1, 1999, ISI served as investment adviser to these funds.
Janus Capital Corporation ("JCC"), 100 Fillmore Street, Denver, CO 80206,
serves as sub-adviser to the IDEX JCC Capital Appreciation, IDEX JCC Global,
IDEX JCC Growth, IDEX JCC Balanced and IDEX JCC Flexible Income pursuant to an
Investment Counsel Agreement dated June 25, 1998 with IMI.
Fred Alger Management, Inc. ("Alger"), 1 World Trade Center, Suite 9333, New
York, NY 10048, serves as sub-adviser to IDEX Alger Aggressive Growth pursuant
to an Investment Counsel Agreement dated September 30, 1994 with IMI.
Luther King Capital Management Corporation ("LKCM"), 301 Commerce Street, Suite
1600, Fort Worth, TX 76102, serves as sub-adviser to IDEX LKCM Strategic Total
Return pursuant to an Investment Counsel Agreement dated as of September 30,
1994.
Dean Investment Associates ("Dean"), a Division of C.H. Dean and Associates,
Inc., 2480 Kettering Tower, Dayton, Ohio 45423-2480 serves as sub-adviser to
IDEX Dean Asset Allocation pursuant to an Investment Counsel Agreement dated as
of June 30, 1995.
C.A.S.E. Management, Inc. ("C.A.S.E."), 5355 Town Center Road, Suite 701, Boca
Raton, FL 33486, serves as sub-adviser to IDEX C.A.S.E. Growth pursuant to an
Investment Counsel Agreement dated November 15, 1995.
37
<PAGE>
NWQ Investment Management Company, Inc. ("NWQ"), 2049 Century Park East, 4th
Floor,Los Angeles, CA 90067, serves as sub-adviser to IDEX NWQ Value Equity
pursuant to an Investment Counsel Agreement dated October 30, 1996.
Scottish Equitable Investment Management Limited ("SEIM"), Edinburgh Park,
Edinburgh EH12 9SE, Scotland, and GE Investment Management Inc. ("GEIM"), 3003
Summer Street, Stamford, CT 06905, serve as sub-advisers to the IDEX
GE/Scottish Equitable International Equity pursuant to respective Investment
Counsel Agreements dated February 1, 1997.
T. Rowe Price Associates, Inc. ("T. Rowe Price"), 100 E. Pratt Street,
Baltimore, MD 21202 serves as sub-adviser to the IDEX T. Rowe Price Dividend
Growth and IDEX T. Rowe Price Small Cap pursuant to an Investment Counsel
Agreement dated March 1, 1999.
Salomon Brothers Asset Management Inc. ("SBAM"), 7 World Trade Center, New
York, NY 10048 serves as sub-adviser to IDEX Salomon All Cap pursuant to an
Investment Counsel Agreement dated March 1, 1999.
Pilgrim Baxter & Associates, Ltd. ("Pilgrim Baxter") 825 Dupportrail, Wayne, PA
19087 serves as sub-adviser to IDEX Pilgrim Baxter Mid Cap Growth pursuant to
an Investment Counsel Agreement dated March 1, 1999.
Goldman Sachs Asset Management ("GSAM") One New York Plaza, New York, NY 10004
serves as sub-adviser to the IDEX Goldman Sachs Growth pursuant to an
Investment Counsel Agreement dated March 1, 1999.
AEGON USA Investment Management, Inc. ("AIMI"), 4333 Edgewood Road, N.E., Cedar
Rapids, Iowa 52499, serves as sub-adviser to IDEX AEGON Tax Exempt and IDEX
AEGON Income Plus pursuant to an Investment Counsel Agreement dated April 22,
1992.
The sub-advisers also serve as sub-advisers to certain portfolios of the WRL
Series Fund, Inc., a registered investment company. They may be referred to
herein collectively as the "sub-advisers" and individually as a "sub-adviser."
<TABLE>
<CAPTION>
FUND SUB-ADVISER SUB-ADVISORY FEE
- ------------------------------- -------------------------------- -------------------------------------------------
<S> <C> <C>
IDEX GE/Scottish Equitable GE Investment Management 50% of the fees received by IMI under the
International Equity Incorporated and Scottish Advisory Agreement, less 50% of any amount
Equitable Investment Manage- reimbursed pursuant to its expense limitation
ment Limited
IDEX JCC Global Janus Capital Corporation 0.50% of the first $750 million of average daily
net assets; 0.45% of the next $250 million in
assets; and 0.4250% of assets in excess of $1
billion
IDEX T. Rowe Price Small Cap T. Rowe Price Associates, Inc. 0.35% of average daily net assets
IDEX Pilgrim Baxter Mid Cap Pilgrim Baxter & Associates, 0.50% of the first $100 million of average daily
Ltd. net assets; 0.40% of assets in excess of $100
million (from first dollar)
IDEX JCC Capital Appreciation Janus Capital Corporation 0.50% of the first $750 million of average daily
net assets; 0.45% of the next $250 million in
assets; and 0.4250% of assets in excess of $1
billion, less 50% of any amount reimbursed
pursuant to the fund's expense limitation*
IDEX C.A.S.E. Growth C.A.S.E. Management, Inc. 50% of the fees received by IMI under the
Advisory Agreement, less 50% of any amount
reimbursed pursuant to its expense limitation
IDEX NWQ Value Equity NWQ Investment Management 50% of the fees received by IMI under the
Company, Inc. Advisory Agreement, less 50% of any amount
reimbursed pursuant to its expense limitation
</TABLE>
38
<PAGE>
<TABLE>
<CAPTION>
FUND SUB-ADVISER SUB-ADVISORY FEE
- ------------------------------ -------------------------------- --------------------------------------------------
<S> <C> <C>
IDEX Salomon All Cap Salomon Brothers Asset 0.30% of the first $20 million of average daily
Management Inc net assets; 0.50% of the next $20-$100 million
of average daily net assets; and 0.40% of
average daily net assets over $100 million
IDEX Alger Aggressive Growth Fred Alger Management, Inc. 50% of the fees received by IMI under the
Advisory Agreement, less 40% of any amount
reimbursed pursuant to its expense limitation
IDEX JCC Growth Janus Capital Corporation 0.50% of the first $750 million of average daily
net assets; 0.45% of the next $250 million; and
0.4250% of assets in excess of $1 billion, less
50% of any amount reimbursed pursuant to the
fund's expense limitation*
IDEX Goldman Sachs Growth Goldman Sachs Asset 0.50% of the first $50 million of average daily
Management net assets; 0.45% of the next $50-$100 million
in assets; and 0.40% of assets in excess of
$100 million
IDEX T. Rowe Price Dividend T. Rowe Price Associates, Inc. 0.50% of the first $100 million of average daily
Growth net assets and 0.40% of assets over $100
million (from first dollar)
IDEX Dean Asset Allocation Dean Investment Associates 50% of the fees received by IMI under the
Advisory Agreement, less 50% of any amount
reimbursed pursuant to its expense limitation
IDEX LKCM Strategic Total Luther King Capital 50% of the fees received by IMI under the
Return Management Corporation Advisory Agreement, less 50% of any amount
reimbursed pursuant to its expense limitation
IDEX JCC Balanced Janus Capital Corporation 0.50% of the first $750 million of average daily
net assets; 0.45 of next $250 million in assets;
and 0.4250% of assets in excess of $1 billion,
less 50% of any amount reimbursed pursuant
to the fund's expense limitation*
IDEX JCC Flexible Income Janus Capital Corporation 0.45% of the first $100 million of average daily
net assets; 0.40% of the next $150 million in
assets; and 0.35% of assets in excess of $250
million, less 50% of any amount reimbursed
pursuant to the fund's expense limitation*
IDEX AEGON Income Plus AEGON USA Investment 50% of the fees received by IMI under the
Management, Inc. Advisory Agreement, less 50% of any amount
reimbursed pursuant to its expense limitation
IDEX AEGON Tax Exempt AEGON USA Investment 50% of the fees received by IMI under the
Management, Inc. Advisory Agreement, less 50% of any amount
reimbursed pursuant to its expense limitation
</TABLE>
- --------------
* Janus has voluntarily agreed to reduce each sub-advisory fee as follows: IDEX
JCC Growth, IDEX JCC Balanced and IDEX JCC Capital Appreciation: first $100
million - none, next $400 million ($100 - $500 million) 0.0125%, next $250
million ($500 - $750 million) 0.0625%, next $250 million ($750 million - $1
billion) 0.0125%, above $1 billion 0.0125%; IDEX JCC Flexible Income:
0.0125% of sub-advisory fee based on average daily net assets.
39
<PAGE>
SUB-ADVISORY FEES PAID*
(NET OF FEES REIMBURSED)
<TABLE>
<CAPTION>
OCTOBER 31 SEPTEMBER 30
----------------------------------------- ------------
FUND 1998 1997 1996 1996
- ----------------------------------------- ---------- ---------- --------- ------------
<S> <C> <C> <C> <C>
IDEX Alger Aggressive Growth $ 137,607 $ 52,325 $ 2,065 $ 22,704
IDEX GE/Scottish Equitable International
Equity $ 0 0 N/A N/A
IDEX JCC Capital Appreciation $ 83,575 $ 22,536 $ 3,751 $ 9,675
IDEX JCC Global $1,953,531 $1,112,031 $ 63,428 $ 565,378
IDEX JCC Growth $6,769,684 $5,838,319 $476,498 $2,729,990
IDEX C.A.S.E. Growth $ 14,450 0 0 0
IDEX NWQ Value Equity $ 18,456 0 N/A N/A
IDEX LKCM Strategic Total Return $ 152,109 $ 50,944 $ 456 $ 2,236
IDEX Dean Asset Allocation $ 130,114 $ 48,349 $ 1,193 $ 21,417
IDEX JCC Balanced $ 103,368 0 0 0
IDEX JCC Flexible Income $ 75,745 $ 30,372 0 $ 66,517
IDEX AEGON Income Plus $ 220,956 $ 208,464 $ 17,666 $ 207,011
IDEX AEGON Tax Exempt $ 68,241 0 0 $ 17,985
</TABLE>
- ------------------------------
* No information is included for the IDEX Goldman Sachs Growth, IDEX T. Rowe
Price Dividend Growth, IDEX Salomon All Cap, IDEX Pilgrim Baxter Mid Cap
Growth and IDEX T. Rowe Price Small Cap as they did not commence operations
until March 1, 1999.
AUSA Holding Company ("AUSA") owns 100% of the outstanding stock of IMI. AUSA
also owns 100% of the outstanding shares of the Fund's distributor and transfer
agent. AUSA is wholly-owned by AEGON USA, Inc., a financial services holding
company located at 4333 Edgewood Road, N.E., Cedar Rapids, Iowa 52499. AEGON
USA, Inc. is a wholly-owned indirect subsidiary of AEGON N.V., a Netherlands
corporation and publicly traded international insurance group.
Janus Capital has agreed that it will, until June 25, 2000, provided that it
continues to serve as sub-adviser to the funds it currently sub-advises,
compensate ISI for its services in connection with promotion, marketing, and
distribution in an amount equal to 0.0375% of the average daily net assets of
each of IDEX JCC Capital Appreciation, IDEX JCC Growth, IDEX JCC Balanced and
IDEX JCC Flexible Income at certain levels.
Each of the sub-advisers also serves as investment adviser or sub-adviser to
other funds and/or private accounts which may have investment objectives
identical or similar to that of the funds. Securities frequently meet the
investment objectives of one or all of these funds, the other funds and the
private accounts. In such cases, a sub-adviser's decision to recommend a
purchase to one fund or account rather than another is based on a number of
factors. The determining factors in most cases are the amounts available for
investment by each fund or account, the amount of securities of the issuer then
outstanding, the value of those securities and the market for them. Another
factor considered in the investment recommendations is other investments which
each fund or account presently has in a particular industry.
It is possible that at times identical securities will be held by more than one
fund or account. However, positions in the same issue may vary and the length of
time that any fund or account may choose to hold its investment in the same
issue may likewise vary. To the extent that more than one of the funds or
private accounts served by a sub-adviser seeks to acquire or sell the same
security at about the same time, either the price obtained by the funds or the
amount of securities that may be purchased or sold by a fund at one time may be
adversely affected. On the other hand, if the same securities are bought or sold
at the same time by more than one fund or account, the resulting participation
in volume transactions could produce better executions for the funds. In the
event more than one fund or account purchases or sells the same security on a
given date, the purchase and sale transactions are allocated among the fund(s),
the other funds and the private accounts in a manner believed by the
sub-advisers to be equitable to each.
40
<PAGE>
DISTRIBUTOR
IDEX Mutual Funds has entered into an Underwriting Agreement with
InterSecurities, Inc. ("ISI"), located at 570 Carillon Parkway, St. Petersburg,
Florida 33716 to act as the principal underwriter of the shares of the funds.
The Underwriting Agreement will continue from year to year so long as its
continuance is approved at least annually in the same manner as the Investment
Advisory Agreements discussed above. A discussion of ISI's responsibilities and
charges as principal underwriter of fund shares is set forth in the prospectus.
UNDERWRITING COMMISSIONS*
<TABLE>
<CAPTION>
COMMISSIONS RECEIVED FOR THE PERIOD ENDED
-----------------------------------------------------
OCTOBER 31 SEPTEMBER 30
-------------------------------------- --------------
FUND 1998 1997 1996 1996
- ---------------------------------- ------------- ------------- ---------- --------------
<S> <C> <C> <C> <C>
IDEX Alger Aggressive Growth $ 449,078 $ 330,689 $ 25,967 $ 479,802
IDEX GE/Scottish Equitable
International Equity $ 64,324 $ 48,603 N/A N/A
IDEX JCC Capital Appreciation $ 164,358 $ 271,016 $ 47,565 $ 395,205
IDEX JCC Global $2,784,651 $2,336,372 $150,015 $ 938,340
IDEX JCC Growth $2,848,238 $2,541,907 $191,780 $2,033,743
IDEX C.A.S.E. Growth $ 70,063 $ 69,637 $ 4,356 $ 36,903
IDEX NWQ Value Equity $ 172,567 $ 105,441 N/A N/A
IDEX LKCM Strategic Total Return $ 419,778 $ 260,944 $ 19,972 $ 234,546
IDEX Dean Asset Allocation $ 186,182 $ 208,715 $ 22,282 $ 200,817
IDEX JCC Balanced $ 344,872 $ 174,256 $ 13,157 $ 128,544
IDEX JCC Flexible Income $ 40,463 $ 28,133 $ 2,509 $ 36,139
IDEX AEGON Income Plus $ 165,033 $ 99,411 $ 7,845 $ 167,267
IDEX AEGON Tax Exempt $ 30,201 $ 25,760 $ 2,189 $ 50,307
<CAPTION>
COMMISSIONS RETAINED FOR THE PERIOD ENDED
---------------------------------------------
OCTOBER 31 SEPTEMBER 30
------------------------------- -------------
FUND 1998 1997 1996 1996
- ---------------------------------- ---------- ---------- --------- -------------
<S> <C> <C> <C> <C>
IDEX Alger Aggressive Growth $ 64,099 $ 47,828 $ 3,677 $ 65,924
IDEX GE/Scottish Equitable
International Equity $ 9,250 $ 7,335 N/A N/A
IDEX JCC Capital Appreciation $ 26,358 $ 42,668 $ 8,052 $ 60,768
IDEX JCC Global $401,257 $353,015 $20,964 $139,197
IDEX JCC Growth $424,803 $396,160 $28,146 $296,565
IDEX C.A.S.E. Growth $ 9,325 $ 10,625 $ 642 $ 5,443
IDEX NWQ Value Equity $ 25,433 $ 15,512 $ N/A N/A
IDEX LKCM Strategic Total Return $ 67,470 $ 41,330 $ 3,617 $ 35,552
IDEX Dean Asset Allocation $ 28,499 $ 34,415 $ 2,742 $ 30,970
IDEX JCC Balanced $ 34,919 $ 27,931 $ 2,118 $ 20,474
IDEX JCC Flexible Income $ 1,530 $ 4,862 $ 444 $ 5,837
IDEX AEGON Income Plus $ 21,369 $ 17,322 $ 1,393 $ 29,744
IDEX AEGON Tax Exempt $ 5,356 $ 4,591 $ 410 $ 8,771
</TABLE>
For the Period Ended October 31, 1998:
<TABLE>
<CAPTION>
NET UNDERWRITING COMPENSATION ON
DISCOUNTS AND REDEMPTIONS AND BROKERAGE OTHER
FUND COMMISSIONS REPURCHASES COMMISSIONS COMPENSATION
- ---------------------------------- ------------------ ----------------- ------------- -------------
<S> <C> <C> <C> <C>
IDEX Alger Aggressive Growth $ 64,099 $12,460 -0- $ 173,265
IDEX GE/Scottish Equitable
International Equity 9,250 2,520 -0- 22,215
IDEX JCC Capital Appreciation 26,358 6,522 -0- 99,498
IDEX JCC Global 401,257 35,608 -0- 1,343,341
IDEX JCC Growth 424,803 29,057 -0- 1,766,004
IDEX C.A.S.E. Growth 9,325 7,348 -0- 38,334
IDEX NWQ Value Equity 25,433 5,644 -0- 71,951
IDEX LKCM Strategic Total Return 67,470 12,563 -0- 180,953
IDEX Dean Asset Allocation 28,499 22,720 -0- 197,410
IDEX JCC Balanced 34,919 5,585 -0- 104,253
IDEX JCC Flexible Income 1,530 4,657 -0- 52,529
IDEX AEGON Income Plus 21,369 4,122 -0- 214,585
IDEX AEGON Tax Exempt 5,356 1,679 -0- 61,155
</TABLE>
- --------------
* No information is included for the IDEX Goldman Sachs Growth, IDEX T. Rowe
Price Dividend Growth, IDEX Salomon All Cap, IDEX Pilgrim Baxter Mid Cap
Growth and IDEX T. Rowe Price Small Cap as they did not commence operations
until March 1, 1999.
41
<PAGE>
ADMINISTRATIVE SERVICES
IMI is responsible for the supervision all of the administrative functions,
providing office space, and paying its allocable portion of the salaries, fees
and expenses of all Fund officers and of those trustees who are affiliated with
IMI. The costs and expenses, including legal and accounting fees, filing fees
and printing costs in connection with the formation of a fund and the
preparation and filing of a fund's initial registration statements under the
1933 Act and 1940 Act are also paid by the adviser. IMI has entered into an
Administrative Services Agreement ("Administrative Agreement") with ISI
applicable to each fund. Under each Administrative Agreement, ISI carries out
and supervises all of the administrative functions of the funds and incurs IMI's
expenses related to such functions.
The administrative duties of ISI with respect to each fund include: providing
the fund with office space, telephones, office equipment and supplies; paying
the compensation of the Fund's officers for services rendered as such;
supervising and assisting in preparation of annual and semi-annual reports to
shareholders, notices of dividends, capital gain distributions and tax
information; supervising compliance by the Fund with the recordkeeping
requirements under the 1940 Act and regulations thereunder and with the state
regulatory requirements; maintaining books and records of the Fund (other than
those maintained by the Fund's custodian and transfer agent); preparing and
filing tax returns and reports; monitoring and supervising relationships with
the Fund's custodian and transfer agent; monitoring the qualifications of tax
deferred retirement plans providing for investment in shares of each fund;
authorizing expenditures and approving bills for payment on behalf of each fund;
and providing executive, clerical and secretarial help needed to carry out its
duties.
ADMINISTRATIVE FEES
ADMINISTRATIVE FEES FOR PERIOD ENDED
FUND OCTOBER 31, 1998
- ------------------------------- -------------------------------------
IDEX JCC Capital Appreciation $ 137,506
IDEX JCC Global $1,953,531
IDEX JCC Growth $6,812,504
IDEX JCC Balanced $ 128,778
IDEX JCC Flexible Income $ 75,838
CUSTODIAN, TRANSFER AGENT AND OTHER AFFILIATES
Investors Fiduciary Trust Company ("IFTC"), 801 Pennsylvania, Kansas City,
Missouri 64105-1307, is custodian for the fund. The custodian is not responsible
for any of the investment policies or decisions of a fund, but holds its assets
in safekeeping, and collects and remits the income thereon subject to the
instructions of the funds.
Idex Investor Services, Inc. ("IIS"), P. O. Box 9015, Clearwater, Florida
33758-9015, is the transfer agent for each fund, withholding agent and dividend
disbursing agent. IIS is a wholly-owned subsidiary of AUSA Holding Company and
thus is an affiliate of IMI and AIMI. Each fund pays the transfer agent an
annual per-account charge of $15.55 for each of its shareholder accounts in
existence, $2.71 for each new account opened and $1.62 for each closed account.
DST Systems Inc. ("DST"), provider of data processing and recordkeeping services
for the Fund's transfer agent, is a partially-owned subsidiary of Kansas City
Southern Industries ("KCSI") and, thus, is an affiliate of Janus Capital. Each
fund may use another affiliate of DST as introducing broker for certain
portfolio transactions as a means to reduce expenses through a credit against
transfer agency fees with regard to commissions earned by such affiliate. (See
"Fund Transactions and Brokerage.") There were no brokerage credits received for
the periods ended October 31, 1997 and 1998 and September 30, 1996.
42
<PAGE>
TRANSFER AGENCY FEES*
<TABLE>
<CAPTION>
FEES AND EXPENSES NET OF BROKERAGE CREDITS FOR THE PERIOD ENDED
---------------------------------------------------------------
OCTOBER 31 SEPTEMBER 30
FUND 1998 1997 1996 1996
- ----------------------------------- ---------- ---------- -------- ------------
<S> <C> <C> <C> C>
IDEX Alger Aggressive Growth $ 311,310 $ 217,941 $ 15,460 $ 141,668
IDEX GE/Scottish Equitable
International Equity $ 25,385 $ 11,583 $ N/A N/A
IDEX JCC Capital Appreciation $ 128,201 $ 133,515 $ 9,740 $ 61,086
IDEX JCC Global $1,032,225 $ 628,833 $ 46,880 $ 379,409
IDEX JCC Growth $2,628,305 $2,811,027 $273,000 $1,537,321
IDEX C.A.S.E. Growth $ 46,730 $ 32,500 $ 2,660 $ 8,930
IDEX NWQ Value Equity $ 71,985 $ 20,957 N/A N/A
IDEX LKCM Strategic Total Return $ 145,685 $ 89,918 $ 5,772 $ 40,189
IDEX Dean Asset Allocation $ 107,100 $ 71,335 $ 6,084 $ 25,499
IDEX JCC Balanced $ 81,805 $ 48,876 $ 3,500 $ 26,374
IDEX JCC Flexible Income $ 32,859 $ 48,615 $ 8,624 $ 51,078
IDEX AEGON Income Plus $ 119,036 $ 86,126 $ 10,000 $ 113,654
IDEX AEGON Tax Exempt $ 21,690 $ 34,786 $ 4,250 $ 40,367
</TABLE>
- ------------------------------
* No information is included for the IDEX Goldman Sachs Growth, IDEX T. Rowe
Price Dividend Growth, IDEX Salomon All Cap, IDEX Pilgrim Baxter Mid Cap
Growth and IDEX T. Rowe Price Small Cap as they did not commence operations
until March 1, 1999.
FUND TRANSACTIONS AND BROKERAGE
Decisions as to the assignment of fund business for each of the funds and
negotiation of commission rates are made by a fund's sub-adviser, whose policy
is to obtain the "best execution" (prompt and reliable execution at the most
favorable security price) of all fund transactions. The Advisory Agreement and
Investment Counsel Agreement for each fund specifically provide that in placing
portfolio transactions for a fund, the fund's sub-adviser may agree to pay
brokerage commissions for effecting a securities transaction in an amount higher
than another broker or dealer would have charged for effecting that transaction
as authorized, under certain circumstances, by the Securities Exchange Act of
1934.
In selecting brokers and dealers and in negotiating commissions, a fund's
sub-adviser considers a number of factors, including but not limited to:
The sub-adviser's knowledge of currently available negotiated commission
rates or prices of securities and other current transaction costs;
The nature of the security being traded;
The size and type of the transaction;
The nature and character of the markets for the security to be purchased
or sold;
The desired timing of the trade;
The activity existing and expected in the market for the particular
security;
The quality of the execution, clearance and settlement services;
Financial stability;
The existence of actual or apparent operational problems of any broker or
dealer; and
Research products and services provided.
In recognition of the value of the foregoing factors, the sub-adviser may place
portfolio transactions with a broker with whom it has negotiated a commission
that is in excess of the commission another broker would have charged for
effecting that transaction. This is done if the sub-adviser determines in good
faith that such amount of commission was reasonable in relation to the value of
the brokerage and research provided by such broker viewed in terms of either
that particular transaction or of the overall responsibilities of the
sub-adviser. Research provided may include:
Furnishing advice, either directly or through publications or writings,
as to the value of securities, the advisability of purchasing or selling
specific securities and the availability of securities or purchasers or
sellers of securities;
Furnishing seminars, information, analyses and reports concerning
issuers, industries, securities, trading markets and methods, legislative
developments, changes in accounting practices, economic factors and
trends and portfolio strategy;
Access to research analysts, corporate management personnel, industry
experts, economists and government officials; and
Comparative performance evaluation and technical measurement services and
quotation services, and other services (such as third party publications,
reports and analyses, and computer and electronic
43
<PAGE>
access, equipment, software, information and accessories that deliver
process or otherwise utilize information, including the research
described above) that assist the sub-adviser in carrying out its
responsibilities.
Most of the brokers and dealers used by the funds' sub-advisers provide research
and other services described above.
A sub-adviser may use research products and services in servicing other accounts
in addition to the funds. If a sub-adviser determines that any research product
or service has a mixed use, such that it also serves functions that do not
assist in the investment decision-making process, a sub-adviser may allocate the
costs of such service or product accordingly. The portion of the product or
service that a sub-adviser determines will assist it in the investment
decision-making process may be paid for in brokerage commission dollars. Such
allocation may be a conflict of interest for a sub-adviser.
When a fund purchases or sells a security in the over-the-counter market, the
transaction takes place directly with a principal market-maker without the use
of a broker, except in those circumstances where better prices and executions
will be achieved through the use of a broker.
A sub-adviser may also consider the sale or recommendation of a fund's shares by
a broker or dealer to its customers as a factor in the selection of brokers or
dealers to execute portfolio transactions. In placing portfolio business with
brokers or dealers, a sub-adviser will seek the best execution of each
transaction, and all such brokerage placement must be consistent with the Rules
of Fair Practice of the National Association of Securities Dealers, Inc.
A sub-adviser may place transactions for the purchase or sale of portfolio
securities with affiliates of IMI, ISI or the sub-adviser, including DST
Securities, Inc., or Fred Alger & Company, Incorporated. It is anticipated that
Fred Alger & Company, Incorporated, an affiliate of Alger, will serve as IDEX
Alger Aggressive Growth's broker in effecting substantially all of IDEX Alger
Aggressive Growth's transactions on securities exchanges and will retain
commissions in accordance with certain regulations of the SEC. A sub-adviser may
place transactions if it reasonably believes that the quality of the transaction
and the associated commission are fair and reasonable, and if overall the
associated transaction costs, net of any credits described above under
"Custodian, Transfer Agent and Other Affiliates," are lower than those that
would otherwise be incurred. Under rules adopted by the SEC, the Fund's Board of
Trustees will conduct periodic compliance reviews of such brokerage allocations
and review certain procedures adopted by the Board of Trustees to ensure
compliance with these rules and to determine their continued appropriateness.
For the fiscal year ended October 31, 1998, IDEX Alger Aggressive Growth paid
the following commissions to Fred Alger & Company, Incorporated:
COMMISSIONS PAID:
- -------------------------------------
Fiscal 1998 $154,866
Fiscal 1998 Percentages:
Commissions with affiliates to
total commissions 99%
Value of brokerage transactions
with affiliates to value of total
brokerage transactions 98%
As of October 31, 1998, IDEX JCC Balanced owned $1,001,510 and IDEX JCC Capital
Appreciation owned $380,959 of the common stock of Charles Schwab Corp. Charles
Schwab Corp. is one of the ten brokers or dealers that received the greatest
dollar amount of brokerage commissions from IDEX JCC Balanced and IDEX JCC
Capital Appreciation during the fiscal year ended October 31, 1998.
As of October 31, 1998, IDEX LKCM Strategic Total Return owned a total of
$291,500 of the common stock of Merrill Lynch and Company, Inc., which is one of
the ten brokers or dealers that received the greatest dollar amount of brokerage
commissions from IDEX LKCM Strategic Total Return during fiscal year ended
October 31, 1998.
44
<PAGE>
<TABLE>
<CAPTION>
BROKERAGE COMMISSIONS
IDEX ALGER IDEX GE/SCOTTISH IDEX JCC
BROKERAGE COMMISSIONS PAID AGGRESSIVE INTERNATIONAL CAPITAL
(INCLUDING AFFILIATED BROKERAGE) GROWTH EQUITY APPRECIATION
- -------------------------------- ---------- ---------------- -------------
<S> <C> <C> <C>
October 31, 1998 $155,668 $17,998 $ 89,687
October 31, 1997 $ 79,346 $ 6,337 $108,748
October 31, 1996 $ 5,156 N/A $ 14,114
September 30, 1996 $ 43,591 N/A $109,526
AFFILIATED BROKERAGE PAID
- --------------------------
October 31, 1998 $154,866 $ 0 $ 0
October 31, 1997 $ 78,761 0 0
October 31, 1996 $ 4,711 N/A 0
September 30, 1996 $ 42,819 N/A 0
<CAPTION>
IDEX NWQ
BROKERAGE COMMISSIONS PAID IDEX JCC IDEX JCC IDEX C.A.S.E. VALUE
(INCLUDING AFFILIATED BROKERAGE) GLOBAL GROWTH GROWTH EQUITY
- -------------------------------- --------- ---------- ------------- ---------
<S> <C> <C> <C> <C>
October 31, 1998 $954,707 $ 843,937 $38,910 $15,539
October 31, 1997 $119,665 $1,301,654 $34,840 $10,553
October 31, 1996 $ 9,638 $ 34,732 $ 3,469 N/A
September 30, 1996 $109,328 $ 314,230 $50,714 N/A
AFFILIATED BROKERAGE PAID
- -------------------------
October 31, 1998 $ 0 $ 0 $ 0 $ 0
October 31, 1997 0 0 0 0
October 31, 1996 0 0 0 N/A
September 30, 1996 0 0 0 N/A
</TABLE>
<TABLE>
<CAPTION>
IDEX LKCM IDEX DEAN IDEX JCC IDEX AEGON
BROKERAGE COMMISSIONS PAID STRATEGIC ASSET IDEX JCC FLEXIBLE INCOME IDEX AEGON
(INCLUDING AFFILIATED BROKERAGE) TOTAL RETURN ALLOCATION BALANCED INCOME PLUS TAX EXEMPT
- -------------------------------- ------------ ---------- -------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
October 31, 1998 $39,334 $43,487 $46,796 $ 23,653 $0 $0
October 31, 1997 $26,187 $48,786 $42,482 $101,213 0 0
October 31, 1996 $ 2,089 $ 2,800 $ 1,291 0 0 0
September 30, 1996 $16,340 $34,335 $37,881 $ 27,515 0 0
AFFILIATED BROKERAGE PAID
- -------------------------
October 31, 1998 $ 0 $ 0 $ 0 $ 0 $0 $0
October 31, 1997 0 0 0 0 0 0
October 31, 1996 0 0 0 0 0 0
September 30, 1996 0 0 0 0 0 0
</TABLE>
During the fiscal year ended October 31, 1998, IDEX JCC Growth, IDEX JCC Global,
IDEX JCC Balanced, IDEX JCC Capital Appreciation, IDEX LKCM Strategic Total
Return, IDEX Dean Asset Allocation, IDEX C.A.S.E. Growth, IDEX NWQ Value Equity
and IDEX GE/Scottish Equitable International Equity had transactions in the
amounts of $38,886,874, $21,547,796, $1,115,105, $898,856, $8,557,008,
$5,241,623.28, $26,946,774, $2,177,187.65 and $70,607.25, respectively, which
resulted in brokerage commission of $44,804, $36,315, $1,449, $760, $10,851,
$9,327, $14,537, $2,871 and $157, respectively, that were directed to brokers
for brokerage and research services provided.
TRUSTEES AND OFFICERS
The Fund is run by a Board of Trustees. Subject to the supervision of the Board
of Trustees, the assets of each fund are managed by an investment adviser and
sub-advisers, and by fund managers. The Board of Trustees is responsible for
managing the business and affairs of the Fund. It oversees the operation of the
Fund by its officers. It also reviews the management of the funds' assets by
the investment adviser and sub-advisers. Information about the Trustees and
officers of the Fund is as follows:
PETER R. BROWN (DOB 05/10/28), 1475 Belcher Road, South Largo, FL 33771. Trustee
of IDEX Mutual Funds; Director of WRL Series Fund, Inc. (investment
company); Chairman of the Board of Peter Brown Construction Co., Largo, FL
(construction, contractors and engineers); Rear Admiral (Retired), U.S. Navy
Reserve, Civil Engineer Corps.
DANIEL CALABRIA (DOB 03/05/36), 7068 S. Shore Drive S.,South Pasadena, FL
33707-4605.Trustee of IDEX Mutual Funds; Trustee (1993 - present) and
President (1993 - 1995) of The Florida Tax Free Funds (mutual funds);
currently retired; formerly President and Director (1995) of Sun
Chiropractic Clinics, Inc. (medical services); Executive Vice President
(1993 - 1995) of William R. Hough & Co. (investment adviser, municipal bond
and underwriting firm); President/CEO (1986 - 1992) of Templeton Funds
Management, Inc. (investment advisers); and Vice President (1986 - 1992) of
all U.S. Templeton Funds (mutual funds).
45
<PAGE>
JAMES L. CHURCHILL (DOB 05/07/30), 15 Hawthorne Road, Bluffington, SC
29910-4901. Trustee of IDEX Mutual Funds; currently retired 1990 to present.
THOMAS E. PIERPAN (1)((2)(DOB 10/18/43), Vice President, Associate General
Counsel and Secretary (December 1997 - present), of IDEX Mutual Funds; Vice
President, Associate General Counsel and Secretary (December 1997 -
present), Assistant Secretary (March 1995 - December 1997) of WRL Series
Fund, Inc. (investment company); Assistant Vice President, Counsel and
Assistant Secretary of InterSecurities, Inc. (November 1997 - present)
(broker-dealer); Vice President (November 1993 - present), Associate General
Counsel and Assistant Secretary (February 1995 - present), Assistant Vice
President (November 1992 - November 1993) Western Reserve Life Assurance Co.
of Ohio (life insurance).
CHARLES C. HARRIS (DOB) 07/15/30), 35 Winston Drive, Clearwater, FL 33756.
Trustee of IDEX Mutual Funds; Director (March 1994 - present) of WRL Series
Fund, Inc. (investment company); currently retired (1988 - present).
G. JOHN HURLEY(1)(2) (DOB 09/12/48), President and Chief Executive Officer
(September 1990 to present) and Trustee (June 1990 to present) of IDEX
Mutual Funds; Executive Vice President (June 1993 to present) and Director
(March 1994 to present) of WRL Series Fund, Inc. (investment company);
Chairman of the Board (July 1999 to present); President, Chief Executive
Officer and Director (May 1988 to July 1999) of InterSecurities, Inc.
(broker-dealer); President (September 1992 to present) of ISI Insurance
Agency, Inc.; Executive Vice President (April 1993 to present) of Western
Reserve Life Assurance Co. of Ohio (life insurance); President, Chief
Executive Officer and Director (September 1990 to present) and Executive
Vice President and Director (May 1988 to September 1990) of Idex Management,
Inc. (investment adviser); President and Director (May 1988 to present) of
Idex Investor Services, Inc. (transfer agent).
JOHN E. KENNEY(1)(2) (DOB 02/08/38), Trustee (1987 to present) and Chairman
(December 1989 to present), of IDEX Mutual Funds; Chairman of the Board
(1986 to present) of WRL Series Fund, Inc. (investment company); Director
(December 1990 to present) of Idex Management, Inc. (investment adviser);
Chairman (1988 to July 1999) and Director (1985 to July 1999) of
InterSecurities, Inc. (broker-dealer); Director (October 1992 to present) of
ISI Insurance Agency, Inc.; Chairman, President and Chief Executive Officer
(1992 to present) of Western Reserve Life Assurance Co. of Ohio (life
insurance); Senior Vice President (May 1992 to present) of AEGON USA, Inc.
(financial services holding company). Mr. Kenney is also the brother-in-law
of Jack Zimmerman, a Trustee of the Fund.
JULIAN A. LERNER (DOB 11/12/24), One Spurling Plaza, Suite 208, 12850 Spurling
Road, Dallas, TX 75230. Trustee of IDEX Mutual Funds; currently retired;
Trustee of American Skandia Trust; Director of American Skandia Advisory
Funds; Trustee of American Skandia Master Trust; formerly Investment
Consultant (1995 - 1996) and Sr. Vice President (1987 - 1995) of Aim Capital
Management (investment adviser).
THOMAS R. MORIARTY(1)(2) (DOB 05/03/51), Senior Vice President (March 1995 to
present), Treasurer and Principal Financial Officer (December 1996 to
present) and Vice President and Principal Accounting Officer (November 1990
to March 1995) of IDEX Mutual Funds; Director, Chief Executive Officer and
President (July 1999 to present) Senior Vice President (June 1991 to July
1999) of InterSecurities, Inc. (broker-dealer); Senior Vice President
(September 1992 to present) of ISI Insurance Agency, Inc.; President
(November 1990 to present) of PW Securities, Inc. (broker-dealer); Senior
Vice President (June 1991 to present) of Idex Investor Services, Inc.
(transfer agent); Vice President (November 1990 to present) of Idex
Management, Inc. (investment adviser); Vice President (June 1993 to present)
of Western Reserve Life Assurance Co. of Ohio (life insurance).
CHRISTOPHER G. ROETZER(1)(2) (DOB 01/11/63), Vice President, Assistant
Treasurer and Principal Accounting Officer (March 1997 to Present);
Principal Accounting Officer (March 1995 to March 1997) and Assistant Vice
President (November 1990 to March 1997) of IDEX Mutual Funds; Assistant
Vice President and Controller (May 1988 to present) of InterSecurities,
Inc. (broker-dealer); Assistant Vice President (September 1992 to present)
of ISI Insurance Agency, Inc.; Assistant Vice President and Controller (May
1988 to present) of Idex Investor Services, Inc. (transfer agent);
Assistant Vice President (November 1990 to present) of Idex Management,
Inc. (investment adviser).
WILLIAM W. SHORT, JR. (DOB 02/25/36), 12420 73rd Court, Largo, FL 33773.
Trustee of IDEX Mutual Funds; President and sole shareholder of Shorts,
Inc. (men's retail apparel); Chairman of Southern Apparel Corporation and
S.A.C. Apparel Corporation and S.A.C. Distributors (nationwide wholesale
apparel distributors), Largo, Florida; Member of Advisory Board of
46
<PAGE>
Barnett Banks of Pinellas County; Trustee of Morton Plant Hospital
Foundation; former Chairman of Advisory Board of First Florida Bank,
Pinellas County, Florida.
JACK E. ZIMMERMAN (DOB 02/03/28), 507 Saint Michel Circle, Kettering, OH 45429.
Trustee of IDEX Mutual Funds; Director (1987 to present), Western Reserve
Life Assurance Co. of Ohio (life insurance); currently retired; formerly,
Director, Regional Marketing (September 1986 to January 1993) Martin
Marietta Corporation, Dayton (aerospace industry).
- --------------
(1) The principal business address of each person listed, unless otherwise
indicated, is P.O. Box 9015, Clearwater, FL 33758-9015.
(2) Interested Person (as defined in the 1940 Act) of the Fund.
The Fund pays no salaries or compensation to any of its officers, all of whom
are officers or employees of either ISI, IMI or their affiliates. Disinterested
Trustees (I.E., Trustees who are not affiliated with ISI, IMI or any of the
sub-advisers) receive for each regular Board meeting: (a) a total annual
retainer fee of $13,000 from the funds, of which the funds pay a pro rata share
allocable to each fund based on the relative assets of the fund; plus (b) $2,250
and incidental expenses per meeting attended. Three of the Disinterested
Trustees have been elected to serve on the Fund's Audit Committee, which meets
twice annually. Each Audit Committee member receives a total of $250 per Audit
Committee meeting attended in addition to the regular meetings attended. In the
case of a Special Board Meeting, each of the Disinterested Trustees receives a
fee of $500 plus incidental expenses per special meeting attended, in addition
to the regular meetings attended. Any fees and expenses paid to Trustees who are
affiliates of IMI or ISI are paid by IMI and/or ISI and not by the funds.
Commencing on January 1, 1996, a non-qualified deferred compensation plan (the
"Plan") became available to Trustees who are not interested persons of the Fund.
Under the Plan, compensation may be deferred that would otherwise be payable by
the Fund and/or WRL Series Fund, Inc., to a Disinterested Trustee or Director on
a current basis for services rendered as Trustee or Director. Deferred
compensation amounts will accumulate based on the value of Class A shares of a
fund (without imposition of sales charge), as elected by the Trustee. It is not
anticipated that the Plan will have any impact on the funds.
The following table provides compensation amounts paid to Disinterested Trustees
of the Fund for the fiscal year ended October 31, 1998.
COMPENSATION TABLE
<TABLE>
<CAPTION>
AGGREGATE PENSION OR RETIREMENT TOTAL COMPENSATION PAID TO
COMPENSATION FROM BENEFITS ACCRUED AS PART OF TRUSTEES FROM FUND
NAME OF PERSON, POSITION IDEX MUTUAL FUNDS * FUND EXPENSES COMPLEX**
- -------------------------------- ------------------------- ----------------------------- ---------------------------
FOR YEAR ENDED 10/31/98 AS OF 10/31/98 10/31/98
<S> <C> <C> <C>
Peter R. Brown, Trustee $ 23,000 $23,000 $ 32,500
Daniel Calabria, Trustee $ 22,500 $ 5,625 $ 22,500
James L. Churchill, Trustee $ 22,500 $18,000 $ 22,500
Charles C. Harris, Trustee $ 23,000 $ -0- $ 32,500
Julian A. Lerner, Trustee $ 22,500 $ -0- $ 22,500
William W. Short, Jr., Trustee $ 23,000 $ -0- $ 23,000
Jack E. Zimmerman, Trustee $ 22,500 $22,500 $ 22,500
Total $159,000 $69,125 $178,000
</TABLE>
- --------------
* Of this aggregate compensation, the total amounts deferred (including
earnings) and accrued for the benefit of the participating Trustees for the
year ended October 31, 1998 were as follows: Peter R. Brown, $29,368; Daniel
Calabria, $6,682; James L. Churchill, $20,581; and Jack E. Zimmerman,
$27,112.
** The Fund Complex consists of IDEX Mutual Funds (including IDEX Fund and IDEX
Fund 3 prior to their reorganization into IDEX Mutual Funds on September 20,
1996) and WRL Series Fund, Inc.
47
<PAGE>
The Board of Trustees has adopted a policy whereby any Disinterested Trustee of
the Fund in office on September 1, 1990 who has served at least three years as a
trustee may, subject to certain limitations, elect upon his resignation to serve
as a trustee emeritus for a period of two years. A trustee emeritus has no
authority, power or responsibility with respect to any matter of the Fund. While
serving as such, a trustee emeritus is entitled to receive from the Fund an
annual fee equal to one-half the fee then payable per annum to Disinterested
Trustees of the Fund, plus reimbursement of expenses incurred for attendance at
Board meetings.
The Fund has an Executive Committee whose members currently are John R. Kenney,
G. John Hurley and Peter R. Brown. The executive committee may perform all of
the functions which may be performed by the Board of Trustees, except as set
forth in the Declaration of Trust and By-Laws of the Fund or as prohibited by
applicable law.
During the fiscal year ended October 31, 1998, the Fund paid $167,404 in
trustees fees and expenses, and no trustee emeritus fees or expenses. As of
January 30, 1999, the trustees and officers held in the aggregate less than 1%
of the outstanding shares of each of the funds.
PURCHASE OF SHARES
As stated in the prospectus, each fund offers investors a choice of four
classes of shares. (IDEX JCC Growth also includes a fifth class, Class T
shares, which are not available for new investors.) Class A, Class B, Class C
or Class M shares of a fund can be purchased through ISI or through
broker-dealers or other financial institutions that have sales agreements with
ISI. Shares of each fund are sold at the net asset value per share as
determined at the close of the regular session of business on the New York
Stock Exchange next occurring after a purchase order is received and accepted
by the fund. (The applicable sales charge is added in the case of Class A,
Class M and Class T shares.) The prospectus contains detailed information about
the purchase of fund shares.
DEALER REALLOWANCES
IDEX sells shares of its funds both directly and through authorized dealers.
When you buy shares, your fund receives the entire NAV of the shares you
purchase. ISI keeps the sales charge, then "reallows" a portion to the dealers
through which shares were purchased. This is how dealers are compensated.
From time to time, ISI will create special promotions in which dealers earn
larger reallowances in return for selling significant amounts of shares or for
certain training services. Sometimes, these dealers may earn virtually the
entire sales charge; at those times, they may be deemed underwriters as
described in the 1933 Act.
Promotions may also involve non-cash incentives such as prizes or merchandise.
Non-cash compensation may also be in the form of attendance at seminars
conducted by ISI, including lodging and travel expenses, in accordance with the
rules of the NASD.
Reallowances may also be given to financial institutions to compensate them for
their services in connection with Class A share sales and servicing of
shareholder accounts.
ISI may also pay dealers or financial institutions from its own funds or
administrative services for larger accounts.
48
<PAGE>
CLASS A SHARE DEALER REALLOWANCES
(all funds except IDEX JCC Flexible Income, IDEX AEGON Income Plus
and IDEX AEGON Tax Exempt)
REALLOWANCE TO DEALERS AS A %
AMOUNT OF PURCHASE OF OFFERING PRICE
- -------------------------------- ------------------------------
Under $50,000 4.75%
$50,000 to under $100,000 4.00%
$100,000 to under $250,000 2.75%
$250,000 to under $500,000 2.25%
$500,000 to under $1,000,000 1.75%
$1,000,000 to under $2,500,000 1.00%
$2,500,000 to under $4,000,000 0.75%
$4,000,000 to under $5,000,000 0.50%
$5,000,000 and over 0.25%
CLASS A SHARE DEALER REALLOWANCES
(IDEX JCC Flexible Income, IDEX AEGON Income Plus
and IDEX AEGON Tax Exempt)
REALLOWANCE TO DEALERS AS A %
AMOUNT OF PURCHASE OF OFFERING PRICE
- -------------------------------- ------------------------------
Under $50,000 4.00%
$50,000 to under $100,000 3.25%
$100,000 to under $250,000 2.75%
$250,000 to under $500,000 1.75%
$500,000 to under $1,000,000 1.00%
$1,000,000 to under $2,500,000 0.50%
$2,500,000 to under $4,000,000 0.35%
$4,000,000 to under $5,000,000 0.20%
$5,000,000 and over 0.15%
CLASS B SHARE DEALER REALLOWANCES
DEALER REALLOWANCES
---------------------
All purchases 5.00%
49
<PAGE>
CLASS T SHARE DEALER REALLOWANCES
(IDEX JCC Growth)
REALLOWANCE TO DEALERS AS A %
AMOUNT OF PURCHASE OF OFFERING PRICE
- --------------------- ------------------------------
$1,000,000 and over 1.00%
DISTRIBUTION PLANS
As stated in the prospectus under "Investment Advisory and Other Services," each
fund has adopted a separate Distribution Plan pursuant to Rule 12b-1 under the
1940 Act (individually, a "Plan" and collectively, the "Plans"), applicable to
Class A, Class B, Class C and Class M shares of the fund. CLASS T SHARES OF IDEX
JCC GROWTH ARE NOT SUBJECT TO ANNUAL DISTRIBUTION AND SERVICE FEES.
In determining whether to approve the Distribution Plan and the Distribution
Agreements, the Trustees considered the possible advantages afforded
shareholders from adopting the Distribution Plans and Distribution Agreements.
The Trustees were informed by representatives of ISI that reimbursements of
distribution-related expenses by the Fund under the Distribution Plans would
provide incentives to ISI to establish and maintain an enhanced distribution
system whereby new investors will be attracted to the funds. The Trustees
believe that improvements in distribution services should result in increased
sales of shares in the funds. In turn, increased sales are expected to lead to
an increase in a fund's net asset levels, which would enable the funds to
achieve economies of scale and lower their per-share operating expenses. In
addition, higher net asset levels could enhance the investment management of the
funds, for net inflows of cash from new sales may enable a fund's investment
adviser and sub-adviser to take advantage of attractive investment
opportunities. Finally, reduced redemptions could eliminate the potential need
to liquidate attractive securities positions in order to raise the capital
necessary to meet redemption requests.
Under the Plans for Class A shares (the "Class A Plans"), a fund may pay ISI an
annual distribution fee of up to 0.35% and an annual service fee of up to 0.25%
of the average daily net assets of a fund's Class A shares; however, to the
extent that a fund pays service fees, the amount which a fund may pay as a
distribution fee is reduced accordingly so that the total fees payable under the
Class A Plan may not exceed on an annualized basis 0.35% of the average daily
net assets of a fund's Class A shares.
Under the Plans for Class B shares (the "Class B Plans"), a fund may pay ISI an
annual distribution fee of up to 0.75% and an annual service fee of up to 0.25%
of the average daily net assets of the fund's Class B shares.
Under the Plans for Class C shares (the "Class C Plans"), a fund may pay ISI an
annual distribution fee of up to 0.75% and an annual service fee of up to 0.25%
of the average daily net assets of the fund's Class C shares.
Under the Plans for Class M shares (the "Class M Plans"), a fund may pay ISI an
annual distribution fee of up to 0.75% and an annual service fee of up to 0.25%
of the average daily net assets of the fund's Class M shares; however, the total
fee payable pursuant to the Class M Plan may not, on an annualized basis, exceed
0.90% of the average daily net assets of the fund's Class M shares.
ISI may use the fees payable under the Class A, Class B, Class C and Class M
Plans as it deems appropriate to pay for activities or expenses primarily
intended to result in the sale of the Class A, Class B, Class C or Class M
shares, respectively, or in personal service to and/or maintenance of these
shareholder accounts. For each class, these activities and expenses may include,
but are not limited to:
Compensation to employees of ISI;
Compensation to and expenses of ISI and other selected dealers who engage
in or otherwise support the distribution of shares or who service
shareholder accounts;
The costs of printing and distributing prospectuses, statements of
additional information and reports for other than existing shareholders;
and
The cost of preparing, printing and distributing sales literature and
advertising materials.
Under the Plans, as required by Rule 12b-1, the Board of Trustees will review,
at least quarterly, a written report
50
<PAGE>
provided by ISI of the amounts expended by ISI in distributing and servicing
Class A, Class B, Class C or Class M shares of the funds and the purpose for
which such expenditures were made. For so long as the Plans are in effect,
selection and nomination of the Trustees who are not interested persons of the
Fund shall be committed to the discretion of the Trustees who are not interested
persons of the Fund.
A Plan may be terminated as to a class of shares of a fund at any time by vote
of a majority of the Disinterested Trustees, or by vote of a majority of the
outstanding voting securities of the applicable class. A Plan may be amended by
vote of the Trustees, including a majority of the Disinterested Trustees of the
Fund and have no direct or indirect financial interest in the operation of the
Plan or any agreement relating thereto, cast in person at a meeting called for
that purpose. Any amendment of a Plan that would materially increase the costs
to a particular class of shares of a fund requires approval by the shareholders
of that class. A Plan will remain in effect for successive one year periods, so
long as such continuance is approved annually by vote of the Fund's Trustees,
including a majority of the Disinterested Trustees, cast in person at a meeting
called for the purpose of voting on such continuance.
DISTRIBUTION FEES
Distribution related expenses incurred by ISI for the fiscal year ended October
31, 1998 are listed in the table below. These expenses have been partially
reimbursed to ISI by a 12b-1 arrangement with the funds.
<TABLE>
<CAPTION>
IDEX ALGER IDEX GE/SCOTTISH EQUITABLE
AGGRESSIVE GROWTH INTERNATIONAL EQUITY
-------------------------------- ----------------------------
A B M* A B M*
SHARES SHARES SHARES SHARES SHARES SHARES
---------- ---------- ---------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Advertising $ 7,897 $ 2,634 $ 1,469 $ 1,075 $ 410 $ 139
Printing/mailing
prospectuses to
other than current
shareholders $ 29,161 $ 9,372 $ 6,281 $ 4,134 $1,466 $ 702
Compensation to
underwriters $ 48,327 $ 4,225 $ 5,769 $ 7,401 $ 233 $ 646
Compensation to dealers $ 49,265 $ 4,188 $ 5,466 $ 2,368 $ 165 $ 496
Compensation to sales
personnel $ 17,469 $ 5,923 $ 2,966 $ 2,366 $ 952 $ 296
Interest or other finance
charges $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Travel $ 3,473 $ 1,155 $ 613 $ 474 $ 193 $ 73
Office expenses $ 14,557 $ 4,708 $ 2,954 $ 2,011 $ 755 $ 330
Administrative processing
costs $ 5,884 $ 2,510 $ 2,010 $ 1,685 $1,534 $1,480
TOTAL $909,355 $34,715 $27,528 $21,514 $5,708 $4,162
<CAPTION>
IDEX JCC
CAPITAL APPRECIATION IDEX JCC GLOBAL
------------------------------ -----------------------------------
A B M* A B M*
SHARES SHARES SHARES SHARES SHARES SHARES
---------- ---------- -------- ------------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Advertising $ 3,204 $ 746 $ 220 $ 54,953 $ 40,053 $ 19,737
Printing/mailing
prospectuses to
other than current
shareholders $13,343 $ 2,664 $ 863 $ 197,285 $129,515 $ 76,772
Compensation to
underwriters $38,127 $ 2,359 $2,486 $ 295,263 $ 13,642 $ 32,628
Compensation to dealers $18,640 $ 2,723 $1,542 $ 369,223 $ 31,236 $ 79,303
Compensation to sales
personnel $ 6,792 $ 1,680 $ 478 $ 121,003 $ 91,326 $ 40,644
Interest or other finance
charges $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Travel $ 1,440 $ 330 $ 100 $ 22,844 $ 16,513 $ 7,587
Office expenses $ 6,469 $ 1,344 $ 432 $ 96,227 $ 65,071 $ 35,639
Administrative processing
costs $ 3,304 $ 1,905 $1,667 $ 15,335 $ 5,884 $ 4,198
TOTAL $91,319 $13,751 $7,788 $1,172,133 $393,240 $296,508
</TABLE>
- --------------
* All shares designated as Class C shares prior to March 1, 1999 were renamed
as Class M shares on that date. Effective November 1, 1999, each fund began
offering a new Class C share that has different fees and expenses than the
previous Class C share. Information is not included for the new Class C
share because the Fund began offering those shares on November 1, 1999.
<TABLE>
<CAPTION>
IDEX JCC GROWTH* IDEX C.A.S.E. GROWTH
----------------------------------- ------------------------------
A B M** A B M**
SHARES SHARES SHARES SHARES SHARES SHARES
------------- ---------- ---------- ---------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
Advertising $ 77,405 $ 11,673 $ 19,518 $ 1,400 $ 658 $ 320
Printing/mailing prospectuses to other
than current shareholders $ 280,860 $ 32,758 $ 41,586 $ 5,787 $ 2,940 $1,859
Compensation to underwriters $ 757,228 $ 11,998 $ 26,389 $ 5,961 $ 765 $1,149
Compensation to dealers $1,042,306 $ 10,067 $ 21,834 $ 5,260 $ 2,597 $3,309
Compensation to sales personnel $ 169,895 $ 27,606 $ 48,270 $ 3,202 $ 1,442 $ 605
Interest or other finance charges $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Travel $ 32,301 $ 4,779 $ 7,581 $ 753 $ 337 $ 157
Office expenses $ 136,860 $ 17,364 $ 24,079 $ 3,058 $ 1,457 $ 821
Administrative processing costs $ 36,001 $ 3,720 $ 3,307 $ 1,943 $ 1,691 $1,576
TOTAL $2,532,856 $119,965 $192,564 $27,364 $11,887 $9,796
<CAPTION>
IDEX NWQ VALUE EQUITY
-------------------------------
A B M**
SHARES SHARES SHARES
---------- ---------- ---------
<S> <C> <C> <C>
Advertising $ 2,032 $ 1,487 $ 611
Printing/mailing prospectuses to other
than current shareholders $ 9,573 $ 6,341 $ 3,314
Compensation to underwriters $12,245 $ 1,414 $ 3,864
Compensation to dealers $ 6,590 $ 1,103 $ 1,501
Compensation to sales personnel $ 3,986 $ 3,131 $ 1,221
Interest or other finance charges $ 0 $ 0 $ 0
Travel $ 899 $ 655 $ 320
Office expenses $ 4,483 $ 2,983 $ 1,553
Administrative processing costs $ 2,125 $ 1,826 $ 1,645
TOTAL $41,933 $18,940 $14,029
</TABLE>
51
<PAGE>
<TABLE>
<CAPTION>
IDEX LKCM STRATEGIC TOTAL RETURN IDEX DEAN ASSET ALLOCATION
-------------------------------- --------------------------------
A B M** A B M**
SHARES SHARES SHARES SHARES SHARES SHARES
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Advertising $ 6,160 $ 2,587 $ 1,783 $ 3,036 $ 3,274 $ 2,067
Printing/mailing prospectuses to other
than current shareholders $ 25,647 $10,979 $ 9,069 $12,382 $13,879 $ 9,786
Compensation to underwriters $ 48,644 $ 4,375 $ 8,564 $26,061 $10,044 $11,881
Compensation to dealers $ 18,621 $ 2,134 $ 3,600 $ 8,878 $ 6,582 $ 4,314
Compensation to sales personnel $ 12,640 $ 5,389 $ 3,350 $ 6,414 $ 6,755 $ 4,281
Interest or other finance charges $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Travel $ 2,556 $ 1,132 $ 759 $ 1,319 $ 1,370 $ 1,030
Office expenses $ 12,047 $ 5,223 $ 4,027 $ 5,951 $ 6,430 $ 4,775
Administrative processing costs $ 3,166 $ 2,082 $ 1,913 $ 2,357 $ 2,088 $ 1,847
TOTAL $128,481 $33,901 $33,065 $66,398 $50,422 $39,981
<CAPTION>
IDEX JCC BALANCED
-------------------------------
A B M**
SHARES SHARES SHARES
---------- ---------- ---------
<S> <C> <C> <C>
Advertising $ 4,556 $ 4,219 $ 1,509
Printing/mailing prospectuses to other
than current shareholders $17,283 $11,366 $ 5,778
Compensation to underwriters $32,505 $ 2,083 $ 2,917
Compensation to dealers $10,388 $ 1,745 $ 3,232
Compensation to sales personnel $ 9,677 $ 9,935 $ 3,100
Interest or other finance charges $ 0 $ 0 $ 0
Travel $ 1,806 $ 1,643 $ 525
Office expenses $ 8,090 $ 5,952 $ 2,508
Administrative processing costs $ 2,395 $ 1,772 $ 1,648
TOTAL $86,700 $38,715 $21,217
</TABLE>
<TABLE>
<CAPTION>
IDEX JCC FLEXIBLE INCOME IDEX AEGON INCOME PLUS
------------------------------ --------------------------------
A B M** A B M**
SHARES SHARES SHARES SHARES SHARES SHARES
---------- -------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Advertising $ 1,438 $ 864 $ 920 $ 6,829 $ 1,731 $ 1,324
Printing/mailing prospectuses to other
than current shareholders $ 5,415 $2,168 $ 2,758 $ 25,783 $ 5,070 $ 6,169
Compensation to underwriters $24,302 $ 545 $ 916 $104,696 $ 1,435 $ 4,879
Compensation to dealers $12,267 $ 697 $ 1,862 $ 60,733 $ 1,076 $ 6,383
Compensation to sales personnel $ 3,184 $2,041 $ 2,281 $ 15,071 $ 3,956 $ 2,576
Interest or other finance charges $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Travel $ 649 $ 321 $ 456 $ 3,051 $ 681 $ 564
Office expenses $ 2,721 $1,139 $ 1,583 $ 12,859 $ 2,631 $ 2,853
Administrative processing costs $ 2,108 $1,490 $ 1,518 $ 3,438 $ 1,584 $ 1,649
TOTAL $52,084 $9,265 $12,294 $232,460 $18,164 $26,397
<CAPTION>
IDEX AEGON TAX EXEMPT
-----------------------------
A B M**
SHARES SHARES SHARES
---------- -------- ---------
<S> <C> <C> <C>
Advertising $ 2,211 $ 204 $ 513
Printing/mailing prospectuses to other
than current shareholders $ 9,432 $ 491 $1,777
Compensation to underwriters $31,751 $ 260 $1,184
Compensation to dealers $25,800 $ 318 $1,331
Compensation to sales personnel $ 5,034 $ 500 $1,110
Interest or other finance charges $ 0 $ 0 $ 0
Travel $ 1,192 $ 86 $ 199
Office expenses $ 4,887 $ 288 $ 857
Administrative processing costs $ 1,962 $1,440 $1,481
TOTAL $82,269 $3,587 $8,452
</TABLE>
- ------------------------------
* Class T shares of IDEX JCC Growth are not subject to annual distribution and
service fees.
** All shares designated as Class C shares prior to March 1, 1999 were renamed
as Class M shares on that date. Effective November 1, 1999, each fund began
offering a new Class C share that has different fees and expenses than the
previous Class C share. Information is not included for the new Class C
share because the Fund began offering those shares on November 1, 1999.
No expenses are listed for IDEX Goldman Sachs Growth, IDEX T. Rowe Price
Dividend Growth, IDEX Salomon All Cap, IDEX Pilgrim Baxter Mid Cap Growth, or
IDEX T. Rowe Price Small Cap as these funds commenced operations March 1, 1999.
52
<PAGE>
NET ASSET VALUE DETERMINATION
Net asset value is determined separately for each class of shares of a fund on
each day as of the close of the regular session of business on the New York
Stock Exchange (the "Exchange"), currently 4:00 p.m. Eastern Time, Monday
through Friday, except on: (i) days on which changes in the value of portfolio
securities will not materially affect the net asset value of a particular class
of shares of the funds; (ii) days during which no shares of a fund are tendered
for redemption and no orders to purchase shares of that fund are received; or
(iii) customary national holidays on which the Exchange is closed. The per share
net asset value of each class of shares of a fund is determined by dividing the
total value of the fund's securities, receivables and other assets allocable to
that class by the total number of shares outstanding of that class. The public
offering price of a Class A, Class B, Class C, Class M or Class T share of a
fund is the net asset value per share plus, the applicable sales charge in the
case of Class A, Class M or Class T shares. Investment securities are valued at
the closing price for securities traded on a principal securities exchange (U.S.
or foreign), or on the NASDAQ National Market. Investment securities traded on
the over-the-counter market and listed securities for which no sales are
reported for the trading period immediately preceding the time of determination
are valued at the last bid price. Foreign currency denominated assets and
liabilities are converted into U.S. dollars at the closing exchange rate each
day. Other securities for which quotations are not readily available are valued
at fair values determined in such manner as a fund's sub-adviser, under the
supervision of the Board of Trustees, decides in good faith. (No information is
included in the chart below for IDEX Goldman Sachs Growth, IDEX T. Rowe Price
Dividend Growth, IDEX Salomon All Cap, IDEX Pilgrim Baxter Mid Cap Growth or
IDEX T. Rowe Price Small Cap as these funds commenced operations March 1, 1999.)
OFFERING PRICE PER SHARE CALCULATED AS FOLLOWS:
<TABLE>
<CAPTION>
NET ASSET VALUE PER SHARE ADD MAXIMUM AMOUNT OF SALES OFFERING PRICE
AS OF OCTOBER 31, 1998 (NET ASSETS/SHARES OUTSTANDING) SELLING COMMISSION CHARGE PER SHARE
- ------------------------------ --------------------------------- -------------------- ----------------- ---------------
<S> <C> <C> <C> <C>
IDEX Alger Aggressive Growth
Class A $22.24 5.50% $1.29 $23.53
Class B $21.93 0.00% $0.00 $21.93
Class M* $21.98 1.00% $0.22 $22.20
IDEX GE/Scottish Equitable
International Equity
Class A $10.77 5.50% $0.63 $11.40
Class B $10.71 0.00% $0.00 $10.71
Class M* $10.72 1.00% $0.11 $10.83
IDEX JCC Capital Appreciation
Class A $16.97 5.50% $0.99 $17.96
Class B $16.72 0.00% $0.00 $16.72
Class M* $16.76 1.00% $0.17 $16.93
IDEX JCC Global
Class A $24.09 5.50% $1.40 $25.49
Class B $23.62 0.00% $0.00 $23.62
Class M* $23.56 1.00% $0.24 $23.80
IDEX JCC Growth
Class A $29.35 5.50% $1.71 $31.06
Class B $28.63 0.00% $0.00 $28.63
Class M* $28.74 1.00% $0.29 $29.03
Class T $29.74 8.50% $2.76 $32.50
IDEX C.A.S.E. Growth
Class A $10.14 5.50% $0.59 $10.73
Class B $10.02 0.00% $0.00 $10.02
Class M* $10.04 1.00% $0.10 $10.14
IDEX NWQ Value Equity
Class A $11.09 5.50% $0.65 $11.74
Class B $10.98 0.00% $0.00 $10.98
Class M* $11.00 1.00% $0.11 $11.11
</TABLE>
53
<PAGE>
<TABLE>
<CAPTION>
NET ASSET VALUE PER SHARE ADD MAXIMUM AMOUNT OF SALES OFFERING PRICE
AS OF OCTOBER 31, 1998 (NET ASSETS/SHARES OUTSTANDING) SELLING COMMISSION CHARGE PER SHARE
- --------------------------------- --------------------------------- -------------------- ----------------- ----------------
<S> <C> <C> <C> <C>
IDEX LKCM Strategic Total Return
Class A $16.18 5.50% $0.94 $17.12
Class B $16.17 0.00% $0.00 $16.17
Class M* $16.17 1.00% $0.16 $16.33
IDEX Dean Asset Allocation
Class A $13.14 5.50% $0.76 $13.90
Class B $13.13 0.00% $0.00 $13.13
Class M* $13.13 1.00% $0.13 $13.26
IDEX JCC Balanced
Class A $14.75 5.50% $0.86 $15.61
Class B $14.74 0.00% $0.00 $14.74
Class M* $14.74 1.00% $0.15 $14.89
IDEX JCC Flexible Income
Class A $ 9.84 4.75% $0.49 $10.33
Class B $ 9.83 0.00% $0.00 $ 9.83
Class M* $ 9.84 1.00% $0.10 $ 9.94
IDEX AEGON Income Plus
Class A $10.43 4.75% $0.52 $10.95
Class B $10.42 0.00% $0.00 $10.42
Class M* $10.42 1.00% $0.11 $10.53
IDEX AEGON Tax Exempt
Class A $11.94 4.75% $0.60 $12.54
Class B $11.94 0.00% $0.00 $11.94
Class M* $11.94 1.00% $0.12 $12.06
</TABLE>
- --------------
* All shares designated as Class C shares prior to March 1, 1999 were renamed
as Class M shares on that date. Effective November 1, 1999, each fund began
offering a new Class C share that has different fees and expenses than the
previous Class C share. Information is not included for the NEW Class C
share because the Fund began offering those shares on November 1, 1999.
DIVIDENDS AND OTHER DISTRIBUTIONS
An investor may choose among several options with respect to dividends and
capital gains distributions payable to the investor. Dividends or other
distributions will be paid in full and fractional shares at the net asset value
determined as of the ex-dividend date unless the shareholder has elected another
distribution option as described in the prospectus. Transaction confirmations
and checks for payments designated to be made in cash generally will be mailed
on the payable date. The per share income dividends on Class B, Class C and
Class M shares of a fund are anticipated to be lower than the per share income
dividends on Class A shares of that fund (and Class T shares of IDEX JCC
Growth), as a result of higher distribution and service fees applicable to the
Class B, Class C and Class M shares.
SHAREHOLDER ACCOUNTS
Detailed information about general procedures for Shareholder Accounts and
specific types of accounts isset forth in the prospectus.
54
<PAGE>
RETIREMENT PLANS
The Fund offers several types of retirement plans that an investor may establish
to invest in shares of a fund with tax deductible dollars. Prototype retirement
plans for both corporations and self-employed individuals, and for Individual
Retirement Accounts, Code Section 401(k) Plans and Simplified Employee Pension
Plans are available by calling or writing IDEX Customer Service. These plans
require the completion of separate applications which are also available from
IDEX Customer Service. IFTC, Kansas City, Missouri, acts as the custodian or
trustee under these plans for which it charges an annual fee of up to $15.00 on
each such account with a maximum of $30.00 per tax identification number.
However, if your retirement plan is under custody of IFTC and your combined
retirement account balances per taxpayer identification number are more than
$50,000, there is generally no fee. Shares of a fund are also available for
investment by Code Section 403(b)(7) retirement plans for employees of
charities, schools, and other qualifying employers. IDEX AEGON Tax Exempt is not
well-suited as an investment vehicle for tax-deferred retirement plans which
cannot benefit from tax-exempt income and whose distributed earnings are taxable
to individual recipients as ordinary income. To receive additional information
or forms on these plans, please call IDEX Customer Service at 1-888-233-4339
(toll free) or write to Idex Investor Services, Inc. at P.O. Box 9015,
Clearwater, Florida 33758-9015. No contribution to a retirement plan can be made
until the appropriate forms to establish the plan have been completed. It is
advisable for an investor considering the funding of any retirement plan to
consult with an attorney, retirement plan consultant or financial or tax advisor
with respect to the requirements of such plans and the tax aspects thereof.
REDEMPTION OF SHARES
Shareholders may redeem their shares at any time at any price equal to the net
asset value per share next determined following receipt of a valid redemption
order by the transfer agent, in proper form. Payment will ordinarily be made
within three days of the receipt of a valid redemption order. The value of
shares on redemption may be more or less than the shareholder's cost, depending
upon the market value of the fund's net assets at the time of redemption. CLASS
B SHARE AND CLASS M SHARE AND CERTAIN CLASS A AND CLASS T SHARE PURCHASES ARE
ALSO SUBJECT TO A CONTINGENT DEFERRED SALES CHARGE UPON CERTAIN REDEMPTIONS. THE
PROSPECTUS DESCRIBES THE REQUIREMENTS AND PROCEDURES FOR THE REDEMPTION OF
SHARES.
Shares will normally be redeemed for cash, although each fund retains the right
to redeem its shares in kind under unusual circumstances in order to protect the
interests of the remaining shareholders by the delivery of securities selected
from its assets at its discretion. The Fund has, however, elected to be governed
by Rule 18f-1 under the 1940 Act pursuant to which a fund is obligated to redeem
shares solely in cash up to the lesser of $250,000 or 1% of the net asset value
of a fund during any 90-day period for any one shareholder. Should redemptions
by any shareholder exceed such limitation, the fund will have the option of
redeeming the excess in cash or in kind. If shares are redeemed in kind, the
redeeming shareholder might incur brokerage costs in converting the assets to
cash. The method of valuing securities used to make redemptions in kind will be
the same as the method of valuing portfolio securities described under "Net
Asset Value Determination," and such valuation will be made as of the same time
the redemption price is determined. Upon any distributions in kind, shareholders
may appeal the valuation of such securities by writing to the Fund.
Redemption of shares may be suspended, or the date of payment may be postponed,
whenever: (1) trading on the Exchange is restricted, as determined by the SEC,
or the Exchange is closed except for holidays and weekends; (2) the SEC permits
such suspension and so orders; or (3) an emergency exists as determined by the
SEC so that disposal of securities and determination of net asset value is not
reasonably practicable.
The CDSC is waived on redemptions of Class B and Class M shares in the
circumstances described below:
(a) REDEMPTION UPON TOTAL DISABILITY OR DEATH
A fund will waive the CDSC on redemptions following the death or total
disability (as evidenced by a determination of the Federal Social Security
Administration) of a Class B or M shareholder, but in the case of total
disability only as to shares owned at the time of the initial determination of
disability. The transfer agent or distributor will require satisfactory proof of
death or disability before it determines to waive the CDSC.
55
<PAGE>
(B) REDEMPTION PURSUANT TO A FUND'S SYSTEMATIC WITHDRAWAL PLAN
A shareholder may elect to participate in a systematic withdrawal plan ("SWP")
with respect to the shareholder's investment in a fund. Under the SWP, a dollar
amount of a participating shareholder's investment in the fund will be redeemed
systematically by the fund on a periodic basis, and the proceeds paid in
accordance with the shareholder's instructions. The amount to be redeemed and
frequency of the systematic withdrawals will be specified by the shareholder
upon his or her election to participate in the SWP. The CDSC will be waived on
redemptions made under the SWP subject to the limitations described below.
The amount of a shareholder's investment in a fund at the time election to
participate in the SWP is made with respect to the fund is hereinafter referred
to as the "Initial Account Balance." The amount to be systematically withdrawn
from a fund without the imposition of a CDSC may not exceed a maximum of 12%
annually of the shareholder's Initial Account Balance. The funds reserves the
right to change the terms and conditions of the SWP and the ability to offer
the SWP.
(C) REINVESTMENT PRIVILEGE
The CDSC is also waived on redemption of Class B or M shares as it relates to
the reinvestment of redemption proceeds in the same class of shares of another
fund within 90 days after redemption.
(D) CERTAIN RETIREMENT PLAN WITHDRAWALS
A fund will waive the CDSC on withdrawals from IRS qualified and nonqualified
retirement plans, individual retirement accounts, tax-sheltered accounts, and
deferred compensation plans, where such withdrawals are permitted under the
terms of the plan or account (e.g., attainment of age 59 1/2, separation from
service, death, disability, loans, hardships, withdrawals of excess
contributions pursuant to applicable IRS rules or withdrawals based on life
expectancy under applicable IRS rules). This waiver does not include transfer of
asset redemptions, broker directed accounts or omnibus accounts.
TAXES
Each fund has qualified (except IDEX Goldman Sachs Growth, IDEX T. Rowe Price
Dividend Growth, IDEX Salomon All Cap, IDEX Pilgrim Baxter Mid Cap Growth and
IDEX T. Rowe Price Small Cap which all intend to qualify), and expects to
continue to qualify, for treatment as a regulated investment company ("RIC")
under the Internal Revenue Code of 1986, as amended (the "Code"). In order to
qualify for that treatment, a fund must distribute to its shareholders for each
taxable year at least 90% of its investment company taxable income
("Distribution Requirement") and must meet several additional requirements.
With respect to each fund, these requirements include the following: (1) the
fund must derive at least 90% of its gross income each taxable year from
dividends, interest, payments with respect to securities loans, and gains from
the sale or other disposition of securities or foreign currencies, or other
income (including gains from options, futures or forward contracts) derived
with respect to its business of investing in securities or those currencies
("Income Requirement"); (2) at the close of each quarter of a fund's taxable
year, at least 50% of the value of its total assets must be represented by cash
and cash items, U.S. government securities, securities of other RICs and other
securities that, with respect to any one issuer, do not exceed 5% of the value
of the fund's total assets and that do not represent more than 10% of the
outstanding voting securities of the issuer; and (3) at the close of each
quarter of a fund's taxable year, not more than 25% of the value of its total
assets may be invested in securities (other than U.S. government securities or
the securities of other RICs) of any one issuer. If each fund qualifies as a
regulated investment company and distributes to its shareholders substantially
all of its net income and net capital gains, then each fund should have little
or no income taxable to it under the Code.
A fund will be subject to a nondeductible 4% excise tax to the extent it fails
to distribute by the end of any calendar year substantially all of its ordinary
income for that year and capital gains net income for the one-year period ending
on October 31 of that year, plus certain other amounts. Each fund intends to
distribute annually a sufficient amount of any taxable income and capital gains
so as to avoid liability for this excise tax.
If IDEX AEGON Tax Exempt invests in any instruments that generate taxable
income, distributions of the interest earned thereon will be taxable to that
fund's shareholders as ordinary income to the extent of its earnings and
profits. Moreover, if that fund realizes capital gains as a result of market
transactions, any distributions of that gain also will be taxable to its
shareholders.
Proposals may be introduced before Congress for the purpose of restricting or
eliminating the federal income tax exemption for interest on municipal
securities. If such a proposal were enacted, the availability of municipal
securities for investment by IDEX AEGON Tax Exempt
56
<PAGE>
and the value of its portfolio securities would be affected. In that event,
IDEX AEGON Tax Exempt will re-evaluate its investment objective and policies.
Dividends and interest received by a fund may be subject to income, withholding
or other taxes imposed by foreign countries and U.S. possessions that would
reduce the yield on its securities. Tax conventions between certain countries
and the United States may reduce or eliminate these foreign taxes, however, and
foreign countries generally do not impose taxes on capital gains in respect of
investments by foreign investors. If more than 50% of the value of IDEX JCC
Global's total assets at the close of its taxable year consists of securities of
foreign corporations, it will be eligible to, and may, file an election with the
IRS that will enable its shareholders, in effect, to receive the benefit of the
foreign tax credit with respect to any foreign and U.S. possessions income taxes
paid by it.
Pursuant to the election, a fund will treat those taxes as dividends paid to its
shareholders and each shareholder will be required to: (1) include in gross
income, and treat as paid by him, his proportionate share of those taxes; (2)
treat his share of those taxes and of any dividend paid by the fund that
represents income from foreign or U.S. possessions sources as his own income
from those sources; and (3) either deduct the taxes deemed paid by him in
computing his taxable income or, alternatively, use the foregoing information in
calculating the foreign tax credit against his federal income tax. IDEX JCC
Global will report to its shareholders shortly after each taxable year their
respective shares of the income from sources within, and taxes paid to, foreign
countries and U.S. possessions if it makes this election.
Each fund, except IDEX AEGON Tax Exempt, may invest in the stock of "passive
foreign investment companies" ("PFICs"). A PFIC is a foreign corporation that,
in general, meets either of the following tests: (1) at least 75% of its gross
income is passive; or (2) an average of at least 50% of its assets produce, or
are held for the production of, passive income. Under certain circumstances, a
fund will be subject to federal income tax on a portion of any "excess
distribution" received on the stock of a PFIC or of any gain on disposition of
that stock (collectively, "PFIC income"), plus interest thereon, even if the
fund distributes the PFIC income as a taxable dividend to its shareholders. The
balance of the PFIC income will be included in the fund's investment company
taxable income and, accordingly, will not be taxable to it to the extent that
income is distributed to its shareholders. If a fund invests in a PFIC and
elects to treat the PFIC as a "qualified electing fund," then in lieu of the
foregoing tax and interest obligation, the fund will be required to include in
income each year its pro rata share of the qualified electing fund's annual
ordinary earnings and net capital gain (the excess of net long-term capital gain
over net short-term capital loss). This will occur even if they are not
distributed to the fund and those amounts would be subject to the distribution
requirements described above. In most instances it will be very difficult, if
not impossible, to make this election because of certain requirements thereof.
A fund, however, may qualify for, and may make, an election permitted under
Section 853 of the Code so that shareholders may be eligible to claim a credit
or deduction on their federal income tax returns for, and will be required to
treat as part of the amounts distributed to them, their pro rata portion of
qualified taxes paid or incurred by the fund to foreign countries (which taxes
relate primarily to investment income). A fund may make an election under
Section 853 of the Code, provided that more than 50% of the value of the fund's
total assets at the close of the taxable year consists of securities in foreign
corporations, and the fund satisfies applicable distribution provisions of the
Code. The foreign tax credit available to shareholders is subject to certain
limitations imposed by the Code. In addition, another election is available that
would involve marking to market a fund's PFIC stock at the end of each taxable
year (and on certain other dates prescribed in the Code), with the result that
unrealized gains are treated as though they were realized although any such
gains recognized will be ordinary income rather than capital gain. If this
election were made, tax at the fund level under the PFIC rules would be
eliminated, but a fund could, in limited circumstances, incur nondeductible
interest charges. A fund's intention to qualify annually as a regulated
investment company may limit a fund's election with respect to PFIC stock.
The use of hedging strategies, such as writing (selling) and purchasing options
and futures contracts and entering into forward contracts, involves complex
rules that will determine for income tax purposes the character and timing of
recognition of the income received in connection therewith by a fund. Income
from foreign currencies (except certain gains therefrom that may be excluded by
future regulations), and income from transactions in options, futures and
forward contracts derived by a fund with respect to its business of investing in
securities or foreign currencies, will qualify as permissible income under the
Income Requirement.
If a fund satisfies certain requirements, any increase in value on a position
that is part of a "designated hedge" will be offset by any decrease in value
(whether realized or not) of the offsetting hedging position during the period
of the hedge for purposes of determining whether the fund satisfies the
Short-Short Limitation. Thus, only the net gain (if any) from the designated
hedge will be
57
<PAGE>
included in gross income for purposes of that limitation. Each fund intends
that, when it engages in hedging transactions, they will qualify for this
treatment, but at the present time it is not clear whether this treatment will
be available for all of the fund's hedging transactions. To the extent this
treatment is not available, a fund may be forced to defer the closing out of
certain options and futures contracts beyond the time when it otherwise would be
advantageous to do so, in order for the fund to continue to qualify as a RIC.
The treatment of income dividends and capital gains distributions by a fund to
shareholders under the various state income tax laws may not parallel that under
the federal law. Qualification as a regulated investment company does not
involve supervision of a fund's management or of its investment policies and
practices by any governmental authority.
Shareholders are urged to consult their own tax advisors with specific reference
to their own tax situations, including their state and local tax liabilities.
PRINCIPAL SHAREHOLDERS
To the knowledge of the Fund, as of October 19, 1999, no shareholders owned
beneficially or of record 5% or more of the outstanding shares of beneficial
interest of IDEX Alger Aggressive Growth, IDEX JCC Capital Appreciation, IDEX
JCC Global, IDEX LKCM Strategic Total Return, IDEX Dean Asset Allocation, IDEX
JCC Balanced or IDEX JCC Flexible Income. National Heritage Foundation for the
benefit of VORA, Falls Church, Virginia, owns approximately 8.9% of the
outstanding shares of beneficial interest of the IDEX GE/Scottish Equitable
International Equity-A; Donaldson, Lufkin & Jenrette Securities Corporation,
Jersey City, New Jersey, owns approximately 8.9% of the outstanding shares of
beneficial interest of the IDEX GE/Scottish Equitable International Equity-A,
and ISI owned beneficially or of record approximately 23.4% of the IDEX
GE/Scottish Equitable International Equity-A; Alan R. and Donna May Hostetler
JD, Williamsburg, VA own approximately 18.7% of outstanding shares of beneficial
ownership of IDEX GE/Scottish Equitable International Equity-M; Timothy and
Deborah O'Donnell, Orlando, FL own 21.1% of the outstanding shares of beneficial
ownership of IDEX GE/Scottish Equitable International Equity-M; and ISI owns
21.1% of GE/Scottish Equitable International Equity-M, and 13.0% of IDEX
C.A.S.E. Growth-A, 6.6% of IDEX NWQ Value Equity-A, 10.6% of IDEX Goldman Sachs
Growth-A, 8.6% of IDEX Goldman Sachs Growth-B, 27.9% of IDEX Goldman Sachs
Growth-M, 9.7% of IDEX T. Rowe Price Dividend Growth-A, 8.3% of IDEX T. Rowe
Price Dividend Growth-B, 16.3% of IDEX T. Rowe Price Dividend Growth-M, 29.1% of
IDEX T. Rowe Price Small Cap-A, 34.0% of IDEX T. Rowe Price Small Cap-B, 55.4%
of IDEX T. Rowe Price Small Cap-M, 11.8% of IDEX Salomon All Cap-A, 12.8% of
IDEX Salomon All Cap-B, 27.9% of IDEX Salomon All Cap-M, 10.6% of IDEX Pilgrim
Baxter Mid Cap Growth-A, 10.1% of IDEX Pilgrim Baxter Mid Cap Growth-B and 25.9%
of IDEX Pilgrim Baxter Mid Cap Growth-M; Bear Stearns Securities Corp.,
Brooklyn, NY owns approximately 5.8% of the outstanding shares of beneficial
interest of IDEX AEGON Tax Exempt-A; Donald Lufkin & Jenrette Securities
Corporation, Inc. owns approximately 20.5% of the outstanding shares of
beneficial interest of IDEX AEGON Tax Exempt-M; Stephen P. Elias owns
approximately 9.4% of the outstanding shares of beneficial interest of IDEX
AEGON Tax Exempt-M; Prudential Securities, Inc. owns approximately 7.4% of the
outstanding shares of beneficial interest of IDEX AEGON Income Plus-M on behalf
of Patricia Jennings Bober Trust, approximately 12.3% of IDEX AEGON Income
Plus-M on behalf of the Neal B.Schneider Family Trust, approximately 18.0% of
IDEX AEGON Income Plus-M on behalf of the James Schneider Family Trust,
approximately 5.3% of the IDEX JCC Flexible Income-B on behalf of R.C.
Gambatesa, and approximately 25.2% of IDEX Salomon All Cap-M; Neil & Walana N.
Ulrich, Clear Lake, WI own approximately 5.3% of the outstanding shares of
beneficial interest of IDEX AEGON Tax Exempt-B; Irby & Jessie Judice, Beaumont,
Texas own approximately 6.2% of the outstanding shares of beneficial interest of
IDEX AEGON Tax Exempt-B; Ernest Roodhouse, Greenville, IL owns approximately
7.5% of the outstanding shares of beneficial interest of IDEX AEGON Tax
Exempt-B; Margaret Wallace, Cedar Rapids, IA owns approximately 11.0% of the
outstanding shares of beneficial interest of IDEX AEGON Tax Exempt-B; A.G.
Edwards & Sons on behalf of Eleonora Karanauskas, New York, NY, owns
approximately 5.1% of the outstanding shares of beneficial ownership of IDEX
Goldman Sachs Growth-M; Donaldson Lufkin & Jenrette Securities Corporation, Inc.
owns approximately 12.3% of the outstanding shares of beneficial ownership of
IDEX T. Rowe Price Dividend Growth-M; First Clearing Corporation, Augusta, GA on
behalf of David Fitzgerald owns approximately 5.6% of the outstanding shares of
beneficial interest of T. Rowe Price Dividend Growth-M; Investors Fiduciary
Trust Co. on behalf of
58
<PAGE>
Christopher Mills owns approximately 17.9% of the outstanding shares of
beneficial ownership of IDEX T. Rowe Price Dividend Growth-M and approximately
5.4% of the outstanding shares of beneficial ownership of IDEX Salomon All Cap-B
on behalf of Margaret Freeman; Gordon Davis, Forest Hills, NY owns approximately
5.4% of the outstanding shares of beneficial interest in IDEX T. Rowe Price
Small Cap-M approximately 5.0% of the outstanding shares of beneficial interest
in IDEX Salomon All Cap-M; and Compania Financiera De Inversiones FHR S.A.,
Miami, FL owns approximately 5.0% of IDEX Pilgrim Baxter Mid Cap Growth-B; and
State Street Bank and Trust Company as Trustee for the ConAgra Retirement Income
Savings Plan, Boston, Massachusetts, owned approximately 23.7% of the
outstanding shares of beneficial interest of IDEX JCC Growth.
As of October 19, 1999 certain affiliates of AIMI were the record owners of
shares of beneficial interest of IDEX AEGON Income Plus: AUSA Life Insurance
Company owned beneficially or of record 10.2% of the outstanding shares and PFL
Life Insurance Company owned 6.0% of the outstanding shares.
As of October 19, 1999, G. John Hurley, as Trustee of the Lydia A. Bickerton
Charitable Trust ("Charitable Trust"), dated 1-18-84, Clearwater, Florida owned
7.8% of Class A outstanding shares of beneficial interest of the IDEX Goldman
Sachs Growth fund, and ISI, the Fund's principal underwriter, owned beneficially
or of record approximately 10.6% of Class A, 8.6% of Class B and 27.9% of Class
M outstanding shares of beneficial interest of the IDEX Goldman Sachs fund. Mr.
Hurley, as Chairman of the Board of ISI and as Trustee of the Charitable Trust,
may be deemed to have "control" of the IDEX Goldman Sachs Growth fund as defined
by the 1940 Act.
MISCELLANEOUS
ORGANIZATION
Each fund is a series of the IDEX Mutual Funds, a Massachusetts business trust
that was formed by a Declaration of Trust dated January 7, 1986. The Trust
currently is governed by a Restatement of Declaration of Trust ("Declaration of
Trust") dated as of August 30, 1991.
On October 1, 1993, in a tax-free reorganization, IDEX JCC Flexible Income
acquired all of the assets and assumed all of the liabilities of IDEX Total
Income Trust ("IDEX Total") in exchange for shares of IDEX JCC Flexible Income
which were then distributed to IDEX Total shareholders. All historical financial
and performance information set forth in this SAI relates to IDEX Total prior to
the date it was reorganized into the IDEX JCC Flexible Income.
On September 20, 1996 in a tax-free reorganization, IDEX JCC Growth (formerly
IDEX II Growth Fund) acquired all of the assets and assumed all of the
liabilities of IDEX Fund and IDEX Fund 3 in exchange for Class T shares of IDEX
JCC Growth which were then distributed on a pro rata basis to the respective
shareholders of IDEX Fund and IDEX Fund 3. Upon closing of the reorganization,
IDEX II Series Fund changed its name to IDEX Series Fund. IDEX Series Fund
became IDEX Mutual Funds effective March 1, 1999.
SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Fund to issue an unlimited number of shares
of beneficial interest. Shares of the Fund are fully paid and nonassessable when
issued. Shares of the Fund have no preemptive, cumulative voting, conversion or
subscription rights. Shares of the Fund are fully transferable but the Fund is
not bound to recognize any transfer until it is recorded on the books.
The shares of beneficial interest of each fund are divided into four classes,
Class A, Class B, Class C and Class M shares; IDEX JCC Growth includes a fifth
class, Class T shares. Each class represents interests in the same assets of the
fund and differ as follows: each class of shares has exclusive voting rights on
matters pertaining to its plan of distribution or any other matter appropriately
limited to that class; Class A shares are subject to an initial sales charge and
are subject to a CDSC on purchases of $1 million or more if redeemed within 24
months of purchase; Class B shares are subject to a CDSC, or back-end load, at a
declining rate; Class C shares are not subject to an initial sales charge or
CDSC; Class M shares are subject to an initial sales charge and are subject to a
CDSC if redeemed within 18 months of purchase; Class B, Class C and Class M
shares are subject to higher ongoing distribution and service fees; each class
may bear differing amounts of certain class-specific expenses; and each class
has a separate exchange privilege. Class T shares of the IDEX JCC Growth are
subject to an initial sales charge and are subject to a CDSC if redeemed with 24
months of purchase. Class T shares have no annual distribution and service fees.
Class T shares are NOT available to new investors; only existing Class T
shareholders (who were shareholders of IDEX Fund or IDEX Fund 3 on September 20,
1996) may purchase additional Class T
59
<PAGE>
shares. The Fund does not anticipate that there will be any conflicts between
the interests of holders of the different classes of shares of the same fund by
virtue of these classes. On an ongoing basis, the Board of Trustees will
consider whether any such conflict exists and, if so, take appropriate action.
On any matter submitted to a vote of shareholders of a series or class, each
full issued and outstanding share of that series or class has one vote.
The Declaration of Trust provides that each of the Trustees will continue in
office until the termination of the Trust or his earlier death, resignation,
bankruptcy or removal. A meeting will be called for the election of trustees
upon the written request of holders of 10% or more of the outstanding shares of
the Fund. Vacancies may be filled by a majority of the remaining trustees,
subject to certain limitations imposed by the 1940 Act. Therefore, it is not
anticipated that annual or regular meetings of shareholders normally will be
held, unless otherwise required by the Declaration of Trust or the 1940 Act.
Subject to the foregoing, shareholders have the power to vote for the election
and removal of trustees, to terminate or reorganize the Fund, to amend the
Declaration of Trust, on whether to bring certain derivative actions and on any
other matters on which a shareholder vote is required by the 1940 Act, the
Declaration of Trust, the Fund's bylaws or the Trustees.
LEGAL COUNSEL AND AUDITORS
Sutherland Asbill & Brennan LLP, 1275 Pennsylvania Avenue, N.W., Washington,
D.C. 20004, serves as counsel to the Fund and certain of its affiliates.
PricewaterhouseCoopers LLP, 160 Federal Street, Boston, MA 02110 serves as
independent accountants for the Fund.
REGISTRATION STATEMENT
This SAI and the prospectus for the Fund does not contain all the information
set forth in the registration statement and exhibits relating thereto, which the
Fund has filed with the SEC, Washington, D.C. under the 1933 Act and the 1940
Act, to which reference is hereby made.
PERFORMANCE INFORMATION
Quotations of average annual total return for a particular class of shares of a
fund will be expressed in terms of the average annual compounded rate of return
of a hypothetical investment in the fund over periods of 1, 5, and 10 years.
These are the average annual compounded rates of return that would equate the
initial amount invested to the ending redeemable value. These rates of return
are calculated pursuant to the following formula:
P(1 + T)n = ERV
(where P = a hypothetical initial investment of $1,000; T = the average annual
total return; N = the number of years; and ERV = the ending redeemable value of
a hypothetical $1,000 investment made at the beginning of the period). All
average annual total return figures reflect the deduction of a proportionate
share of each fund's expenses on an annual basis, and assume that the maximum
sales load (Class A, M and Class T shares) is deducted from the initial $1,000
investment and all dividends and distributions are paid in additional shares.
(No information is included for the new Class C shares as the Fund began
offering those shares on November 1, 1999.)
60
<PAGE>
AVERAGE ANNUAL TOTAL RETURN
<TABLE>
<CAPTION>
IDEX GE/SCOTTISH EQUITABLE
IDEX ALGER AGGRESSIVE GROWTH INTERNATIONAL EQUITY
AS OF OCTOBER 31, 1998 CLASS CLASS
- -------------------------------------- -------------------------------- --------------------------------
A B M*** A B M***
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Inception Date 12/02/94 10/01/95 12/02/94 02/01/97 02/01/97 02/01/97
Sales Charge 5.50% * 1.00% 5.50% * 1.00%
12b-1 Fee 0.35% 1.00% 0.90% 0.35% 1.00% 0.90%
Average Annual Total Return Including
Sales Charges:
1 year 15.74% 17.04% 20.89% (3.07)% (3.11)% 0.97%
5 years N/A N/A N/A N/A N/A N/A
10 years N/A N/A N/A N/A N/A N/A
Inception 25.31% 11.87% 26.45% 1.50 % 1.92 % 3.68%
Average Annual Total Return Without
Deduction of Sales Charge:
1 year 22.48% 22.04% 22.11% 2.58 % 1.89 % 1.99%
5 years N/A N/A N/A N/A N/A N/A
10 years N/A N/A N/A N/A N/A N/A
Inception 27.13% 12.37% 26.78% 4.85% 4.17% 4.28%
Cumulative Total Return Without
Deduction of Sales Charge:
1 year 22.48% 22.04% 22.11% 2.58 % 1.89 % 1.99%
5 years N/A N/A N/A N/A N/A N/A
10 years N/A N/A N/A N/A N/A N/A
Inception 156.14% 43.32% 153.33% 8.59 % 7.36 % 7.55%
<CAPTION>
IDEX JCC CAPITAL APPRECIATION
AS OF OCTOBER 31, 1998 CLASS
- -------------------------------------- -------------------------------
A B M***
---------- ---------- ---------
<S> <C> <C> <C>
Inception Date 12/02/94 10/01/95 12/02/94
Sales Charge 5.50% * 1.00%
12b-1 Fee 0.35% 1.00% 0.90%
Average Annual Total Return Including
Sales Charges:
1 year 3.83% 4.35% 8.34%
5 years N/A N/A N/A
10 years N/A N/A N/A
Inception 16.00% 10.37% 16.89%
Average Annual Total Return Without
Deduction of Sales Charge:
1 year 9.87% 9.35% 9.43%
5 years N/A N/A N/A
10 years N/A N/A N/A
Inception 17.69% 10.90% 17.19%
Cumulative Total Return Without
Deduction of Sales Charge:
1 year 9.87% 9.35% 9.43%
5 years N/A N/A N/A
10 years N/A N/A N/A
Inception 89.29% 37.59% 86.17%
</TABLE>
<TABLE>
<CAPTION>
IDEX JCC GLOBAL IDEX JCC GROWTH
AS OF OCTOBER 31, 1998 CLASS CLASS
- -------------------------------------- -------------------------------- -----------------------------------------
A B M*** A B M*** T**
---------- ---------- ---------- ---------- ---------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Inception Date 10/01/92 10/01/95 10/01/93 05/08/86 10/01/95 10/01/93 6/04/85
Sales Charge 5.50% * 1.00% 5.50% * 1.00% 8.50%
12b-1 Fee 0.35% 1.00% 0.90% 0.35% 1.00% 0.90% 0%
Average Annual Total Return Including
Sales Charges:
1 year 5.17% 5.93% 9.97% 27.77% 29.96% 32.65% 24.01%
5 years 15.66% N/A 16.33% 18.08% N/A 18.84% 17.81%
10 years --% N/A N/A 18.81% N/A N/A 18.77%
Inception 19.59% 18.18% 17.69% 17.35% 22.46% 18.50% 17.65%
Average Annual Total Return Without
Deduction of Sales Charge:
1 year 11.30% 10.93% 11.08% 35.21% 34.96% 35.00% 35.53%
5 years 16.98% N/A 16.33% 19.43% N/A 19.07% 19.92%
10 years --% N/A N/A 19.48% N/A N/A 19.83%
Inception 20.71% 18.64% 17.92% 17.89% 22.88% 18.74% 18.44%
Cumulative Total Return Without
Deduction of Sales Charge:
1 year 11.30% 10.93% 11.08% 35.21% 34.96% 35.00% 35.53%
5 years 119.02% N/A 115.20% 142.96% N/A 139.38% 147.99%
10 years N/A N/A N/A 493.06% N/A N/A 510.64%
Inception 213.98% 69.41% 131.08% 679.92% 88.79% 139.35% 866.59%
</TABLE>
61
<PAGE>
<TABLE>
<CAPTION>
IDEX C.A.S.E. GROWTH IDEX NWQ VALUE EQUITY
AS OF OCTOBER 31, 1998 CLASS CLASS
- ------------------------------------ -------------------------------- --------------------------------
A B M*** A B M***
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Inception Date 02/01/96 02/01/96 02/01/96 02/01/97 02/01/97 02/01/97
Sales Charge 5.50% * 1.00% 5.50% * 1.00%
12b-1 Fee 0.35% 1.00% 0.90% 0.35% 1.00% 0.90%
Average Annual Total Return
Including Sales Charges:
1 year (19.51)% (19.63)% (17.00)% (10.18)% (10.27)% (7.34)%
5 years N/A N/A N/A N/A N/A N/A
10 years N/A N/A N/A N/A N/A N/A
Inception 3.18% 3.67% 4.40% 2.96% 3.51% 5.22%
Average Annual Total Return Without
Deduction of Sales Charge:
1 year (14.83)% (15.40)% (15.31)% (4.96)% (5.55)% (5.46)%
5 years N/A N/A N/A N/A N/A N/A
10 years N/A N/A N/A N/A N/A N/A
Inception 5.33% 4.69% 4.79% 6.37% 5.74% 5.83%
Cumulative Total Return Without
Deduction of Sales Charge:
1 year (14.83)% (15.40)% (15.31)% (4.96)% (5.55)% (5.46)%
5 years N/A N/A N/A N/A N/A N/A
10 years N/A N/A N/A N/A N/A N/A
Inception 15.32% 13.41% 13.70% 11.33% 10.18% 10.36%
<CAPTION>
IDEX LKCM STRATEGIC TOTAL RETURN
AS OF OCTOBER 31, 1998 CLASS
- ------------------------------------ -------------------------------
A B M***
---------- ---------- ---------
<S> <C> <C> <C>
Inception Date 12/02/94 10/01/95 12/02/94
Sales Charge 5.50% * 1.00%
12b-1 Fee 0.35% 1.00% 0.90%
Average Annual Total Return
Including Sales Charges:
1 year 1.52% 1.74% 4.78%
5 years N/A N/A N/A
10 years N/A N/A N/A
Inception 15.07% 14.03% 15.83%
Average Annual Total Return Without
Deduction of Sales Charge:
1 year 7.43% 6.74% 6.85%
5 years N/A N/A N/A
10 years N/A N/A N/A
Inception 16.74% 14.52% 16.12%
Cumulative Total Return Without
Deduction of Sales Charge:
1 year 7.43% 6.74% 6.85%
5 years N/A N/A N/A
10 years N/A N/A N/A
Inception 83.40% 51.95% 79.61%
</TABLE>
<TABLE>
<CAPTION>
IDEX DEAN ASSET ALLOCATION IDEX JCC BALANCED
AS OF OCTOBER 31, 1998 CLASS CLASS
- -------------------------------------- -------------------------------- -------------------------------
A B M*** A B M***
---------- ---------- ---------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Inception Date 10/01/95 10/01/95 10/01/95 12/02/94 10/1/95 12/02/94
Sales Charge 5.50% * 1.00% 5.50% * 1.00%
12b-1 Fee 0.35% 1.00% 0.90% 0.35% 1.00% 0.90%
Average Annual Total Return Including
Sales Charge:
1 year 1.35% 1.56% 4.60% 8.38% 8.97% 11.94%
5 years N/A N/A N/A N/A N/A N/A
10 years N/A N/A N/A N/A N/A N/A
Inception 10.71% 11.52% 11.78% 17.68% 18.40% 18.45%
Average Annual Total Return Without
Deduction of Sales Charge:
1 year 7.25% 6.56% 6.67% 14.69% 13.97% 14.08%
5 years N/A N/A N/A N/A N/A N/A
10 years N/A N/A N/A N/A N/A N/A
Inception 12.75% 12.04% 12.15% 19.39% 18.85% 18.76%
Cumulative Total Return Without
Deduction of Sales Charge:
1 year 7.25% 6.56% 6.67% 14.69% 13.97% 14.08%
5 years N/A N/A N/A N/A N/A N/A
10 years N/A N/A N/A N/A N/A N/A
Inception 44.83% 42.01% 42.44% 100.23% 70.36% 96.12%
<CAPTION>
IDEX JCC FLEXIBLE INCOME
AS OF OCTOBER 31, 1998 CLASS
- -------------------------------------- -------------------------------
A B M***
---------- ---------- ---------
<S> <C> <C> <C>
Inception Date 06/29/87 10/01/95 10/01/93
Sales Charge 4.75% * 1.00%
12b-1 Fee 0.35% 1.00% 0.90%
Average Annual Total Return Including
Sales Charge:
1 year 2.32% 1.74% 4.77%
5 years 6.21% N/A 6.44%
10 years 7.74% N/A N/A
Inception 7.99% 7.75% 6.50%
Average Annual Total Return Without
Deduction of Sales Charge:
1 year 7.43% 6.74% 6.84%
5 years 7.25% N/A 6.65%
10 years 8.27% N/A N/A
Inception 8.45% 8.30% 6.71%
Cumulative Total Return Without
Deduction of Sales Charge:
1 year 7.43% 6.74% 6.84%
5 years 41.88% N/A 38.00%
10 years 121.34% N/A N/A
Inception 150.96% 27.89% 39.11%
</TABLE>
62
<PAGE>
<TABLE>
<CAPTION>
IDEX AEGON INCOME PLUS IDEX AEGON TAX EXEMPT
AS OF OCTOBER 31, 1998 CLASS CLASS
- ------------------------------------ ------------------------------------ -----------------------------------
A B M*** A B M***
---------- ---------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Inception Date 6/14/85 10/01/95 10/01/93 04/01/85 10/01/95 10/01/93
Sales Charge 4.75% * 1.00% 4.75% * 1.00%
12B-1 Fee 0.35% 1.00% 0.90% 0.35% 1.00% 0.60%
Average Annual Total Return
Including Sales Charges:
1 year (1.38)% (2.13)% 0.94% 2.10% 1.50% 4.85%
5 years 6.16 % N/A 6.28% 4.84% N/A 5.39%
10 years 9.31 % N/A N/A 6.51% N/A N/A
Inception 9.79 % 7.05 % 6.42% 7.77% 6.06% 5.36%
Average Annual Total Return Without
Deduction of Sales Charge:
1 year 3.54 % 2.87 % 2.97% 7.19% 6.50% 6.92%
5 years 7.19 % N/A 6.49% 5.87% N/A 5.60%
10 years 9.84 % N/A N/A 7.03% N/A N/A
Inception 10.19 % 7.62 % 6.63% 8.15% 6.63% 5.57%
Cumulative Total Return Without
Deduction of Sales Charge:
1 year 3.54 % 2.87 % 2.97% 7.19% 6.50% 6.92%
5 years 41.53 % N/A 36.97% 33.00% N/A 31.32%
10 years 155.67 % N/A N/A 97.29% N/A N/A
Inception 266.15 % 25.39 % 38.59% 189.91% 21.89% 31.69%
</TABLE>
- ------------------------------
* The contingent deferred sales charge on redemption of Class B shares is 5%
during the first year, 4% during the second year, 3% during the third year,
2% during the fourth year, 1% during the fifth and sixth years and 0% during
the seventh year and later. The Class A, M and T shares are subject to a 1%
contingent deferred sales charge.
** Performance of Class T Shares of IDEX JCC Growth is based on the historical
performance of IDEX Fund from its inception on June 4, 1985 until the
reorganization of IDEX Fund and IDEX Fund 3 into Class T Shares of IDEX
Series Fund Growth Portfolio on September 20, 1996; and the historical
performance of Class T Shares of IDEX JCC Growth thereafter.
*** Effective March 1, 1999, Class C shares became Class M shares.
No information is included for IDEX Goldman Sachs Growth, IDEX Pilgrim Baxter
Mid Cap Growth, IDEX T. Rowe Price Dividend Growth, IDEX T. Rowe Price Small Cap
and IDEX Salomon All Cap as they did not commence operations until March 1,
1999.
The current yield for a particular class of shares of each of IDEX JCC Flexible
Income, IDEX AEGON Tax Exempt, IDEX AEGON Income Plus, IDEX JCC Balanced, IDEX
AEGON Income Plus, IDEX Dean Asset Allocation or IDEX LKCM Strategic Total
Return is computed in accordance with a standardized method prescribed by rules
of the SEC. The yield is computed by dividing the fund's investment income per
share earned during a particular 30-day base period (including dividends, if any
and interest earned, minus expenses excluding reductions for affiliated
brokerage and custody earnings credits accrued during the period) by the maximum
offering price per share on the last day of the base period and then annualizing
the result.
63
<PAGE>
CURRENT YIELD
30 DAY PERIOD
ENDED 10/31/98
---------------
IDEX LKCM STRATEGIC TOTAL RETURN
Class A 1.06%
Class B 0.52%
Class M* 0.60%
IDEX JCC BALANCED
Class A 1.81%
Class B 1.31%
Class M* 1.41%
IDEX JCC FLEXIBLE INCOME
Class A 4.95%
Class B 4.55%
Class M* 4.66%
IDEX AEGON TAX EXEMPT
Class A 3.33%
Class B 2.85%
Class M* 3.25%
IDEX AEGON INCOME PLUS
Class A 5.57%
Class B 5.20%
Class M* 5.29%
IDEX DEAN ASSET ALLOCATION
Class A 1.31%
Class B 0.78%
Class M* 0.87%
- ------------------------------
* All shares designated as Class C shares prior to March 1, 1999 were renamed
as Class M shares on that date. Effective November 1, 1999, each fund began
offering a new Class C share that has different fees and expenses than the
previous Class C share. Information is not included for the new Class C
share because the Fund began offering those shares on November 1, 1999.
The tax equivalent yield of IDEX AEGON Tax Exempt is computed by dividing that
portion of the yield (as computed above) which is tax-exempt by one minus an
assumed tax rate of 28% and adding the product to that portion, if any, of the
fund's yield that is not tax-exempt. The tax equivalent yield of IDEX AEGON Tax
Exempt Class A, Class B and Class M shares based on a 30-day period ended
October 31, 1998 was 4.63%, 3.96% and 4.51%, respectively.
From time to time in advertisements or sales material, a fund may present and
discuss its performance rankings and/or ratings or other information as
published by recognized mutual fund statistical services or by publications of
general interest such as WALL STREET JOURNAL, BOSTON GLOBE, NEW YORK TIMES, LOS
ANGELES TIMES, CHRISTIAN SCIENCE MONITOR, USA TODAY, TAMPA TRIBUNE, ST.
PETERSBURG TIMES, FINANCIAL TIMES, HARTFORD CURRENT, INTERNATIONAL HERALD
TRIBUNE, INVESTOR'S BUSINESS DAILY, BOSTON HERALD, WASHINGTON POST, KIPLINGER'S
WASHINGTON LETTER, KIPLINGER'S TAX REPORT, KIPLINGER'S PERSONAL FINANCE
MAGAZINE, BARRON'S, BUSINESS WEEK, FINANCIAL SERVICES WEEK, NATIONAL
UNDERWRITER, TIME, NEWSWEEK, PENSIONS & INVESTMENTS, U.S. NEWS AND WORLD REPORT,
MORNINGSTAR MUTUAL FUND VALUES, ECONOMIST, BANK LETTER, BOSTON BUSINESS JOURNAL,
RESEARCH RECOMMENDATIONS, FACS OF THE WEKK, MONEY, MODERN MATURITY, FORBES,
FORTUNE, FINANCIAL PLANNER, AMERICAN BANKER, U.S. BANKER, ABA BANKING JOURNAL,
INSTITUTIONAL INVESTOR (U.S./EUROPE), REGISTERED REPRESENTATIVE, INDEPENDENT
AGENT, AMERICAN DEMOGRAPHICS, TRUSTS & ESTATES, CREDIT UNION MANAGEMENT,
PERSONAL INVESTOR, NEW ENGLAND BUSINESS, BUSINESS MONTH, GENTLEMEN'S QUARTERLY,
EMPLOYEE RESEARCH REPORT, EMPLOYEE BENEFIT PLAN REVIEW, ICI MUTUAL FUND NEWS,
SUCCEED, JOHNSON CHARTS, WEISENBERGER INVESTMENT COMPANIES SERVICE, MUTUAL FUND
QUARTERLY, FINANCIAL WORLD MAGAZINE, CONSUMER REPORTS, BABSON-UNITED MUTUAL FUND
SELECTOR AND MUTUAL FUND ENCYCLOPEDIA (DEARBORN FINANCIAL PUBLISHING). A fund
may also advertise non-standardized performance information which is for a
period in addition to those required to be presented, or which provides actual
year-by-year return, or any combination thereof, or both. For Class A, Class M
and Class T shares, non-standardized performance may also be that which does not
reflect deduction of the maximum sales charge applicable to Class A, Class M and
Class T shares or the
64
<PAGE>
contingent deferred sales charge applicable to Class B and under certain
circumstances Class A, Class M and Class T shares. In addition, a fund may, as
appropriate, compare its performance to that of other types of investments such
as certificates of deposit, savings accounts and U.S. Treasuries, or to certain
interest rate and inflation indices, such as the Consumer Price Index. A fund
may also advertise various methods of investing including, among others, dollar
cost averaging, and may use compounding illustrations to show the results of
such investment methods. The Fund or the Distributor may also from time to time
in advertisements or sales material present tables or other information
comparing tax-exempt yields to the equivalent taxable yields, whether with
specific reference to IDEX AEGON Tax Exempt or otherwise.
FINANCIAL STATEMENTS
Audited financial statements for IDEX Alger Aggressive Growth, IDEX GE/Scottish
Equitable International Equity, IDEX JCC Capital Appreciation, IDEX JCC Global,
IDEX JCC Growth, IDEX C.A.S.E. Growth, IDEX NWQ Value Equity, IDEX LKCM
Strategic Total Return, IDEX Dean Asset Allocation, IDEX JCC Balanced, IDEX JCC
Flexible Income, IDEX AEGON Income Plus and IDEX AEGON Tax Exempt for the fiscal
year ended October 31, 1998 are incorporated by reference from the Fund's Annual
Report dated October 31, 1998. Unaudited financial statements for the
semi-annual period ended April 30, 1999 are also incorporated by reference from
the Fund's Semi-Annual Report dated April 30, 1999.
65
<PAGE>
APPENDIX A
CERTAIN SECURITIES IN WHICH THE FUNDS MAY INVEST
I. MUNICIPAL OBLIGATIONS IN WHICH IDEX AEGON TAX EXEMPT MAY INVEST
A. MUNICIPAL BONDS
GENERAL INFORMATION. Municipal bonds are debt obligations issued to obtain
funds for various public purposes, including the construction of a wide range
of public facilities such as airports, highways, bridges, schools, hospitals,
housing, mass transportation, streets and water and sewer works, and that pay
interest that is exempt from federal income tax in the opinion of issuer's
counsel. Other public purposes for which municipal bonds may be issued include
the refunding of outstanding obligations, obtaining funds for general expenses
and obtaining funds to lend to other public institutions and facilities.
The two principal classifications of municipal bonds are "general obligation"
bonds and "revenue" or "special tax" bonds. General obligation bonds are secured
by the issuer's pledge of its full faith, credit and taxing power for the
payment of principal and interest. Revenue or special tax bonds are payable only
from the revenues derived from a particular facility or class of facilities or
project or, in some cases, from the proceeds of a special excise tax or other
specific revenue source, but are not supported by the issuer's power to levy
general taxes. Most industrial development bonds are in this category.
There are, of course, variations in the security of municipal bonds, both within
a particular classification and between classifications, depending on numerous
factors. The yields of municipal bonds depend, among other things, upon general
money market conditions, general conditions of the municipal bond market, size
of a particular offering, the maturity of the obligations and rating of the
issue.
INDUSTRIAL DEVELOPMENT BONDS AND PRIVATE ACTIVITY BONDS. Industrial development
bonds ("IDBs") and private activity bonds ("PABs") are issued by or on behalf of
public authorities to finance various privately operated facilities, such as
airports or pollution control facilities. PABs generally are such bonds issued
after August 15, 1986. These obligations are included within the term "municipal
bonds" if the interest paid thereon is exempt from federal income tax in the
option of the bond counsel. IDBs and PABs are in most cases revenue bonds and
thus are not payable from the unrestricted revenues of the issuer. The credit
quality of IDBs and PABs is usually directly related to the credit standing of
the user of the facilities being financed.
PURCHASES ON "WHEN-ISSUED" OR "DELAYED DELIVERY" BASIS. Sometimes the IDEX AEGON
Tax Exempt may buy municipal bonds on a "when-issued" or "delayed delivery"
basis. This means that when it agrees to buy, the terms of the bonds and the
price it will pay are fixed, but it does not purchase and take delivery of the
bonds until a later date (the "settlement date"), which is usually within one
month. The IDEX AEGON Tax Exempt pays no money and receives no interest before
the settlement date. The commitment to purchase securities on a when-issued or
delayed delivery basis involves the risk that the market value of such
securities may fall below cost prior to the settlement date. While the IDEX
AEGON Tax Exempt may sell the municipal bonds before the settlement date, it
will ordinarily do so only for investment management reasons. Ordinarily, the
IDEX AEGON Tax Exempt purchases municipal bonds that it has agreed to buy on a
when-issued or delayed delivery basis. Gains or losses on sales prior to the
settlement date are not tax-exempt.
A municipal bond purchased on a when-issued or delayed delivery basis is
recorded as an asset on the commitment date. The IDEX AEGON Tax Exempt will
direct the fund's custodian to segregate cash, U.S. government securities or
other appropriate debt obligations owned by the fund that are at least equal in
value to the amount the IDEX AEGON Tax Exempt will have to pay on the settlement
date. If necessary, additional assets will be placed in the account daily so
that the value of the account will at least equal the fund's purchase
commitment.
B. MUNICIPAL NOTES
The IDEX AEGON Tax Exempt may invest in the following types of municipal notes,
subject to the quality requirements described in the prospectus:
A-1
<PAGE>
PROJECT NOTES. Project notes ("PNs") are issued on behalf of local authorities
at auctions conducted by the United States Department of Housing and Urban
Development to raise funds for federally sponsored urban renewal, neighborhood
development and housing programs. PNs are backed by the full faith and credit of
the federal government through agreements with the local authority which provide
that, if required, the federal government will lend the issuer an amount equal
to the principal of and interest on the PNs. Ordinarily, PNs are repaid by
rolling over the notes or from the proceeds of new bonds or other securities
which are issued to provide permanent financing.
BOND ANTICIPATION NOTES. Bond anticipation notes ("BANs") are usually general
obligations of state and local governmental issuers which are sold to obtain
interim financing for projects that will eventually be funded through the sale
of long-term debt obligations or bonds. The ability of an issuer to meet its
obligations on its BANs is primarily dependent on the issuer's access to the
long-term municipal bond market and the likelihood that the proceeds of such
bond sales will be used to pay the principal and interest on the BANs.
TAX ANTICIPATION NOTES. Tax anticipation notes ("TANs") are issued by state and
local governments to finance their current operations. Repayment is generally to
be derived from specific future tax revenues. TANs are usually general
obligations of the issuer. A weakness in an issuer's capacity to raise taxes due
to, among other things, a decline in its tax base or a rise in delinquencies,
could adversely affect the issuer's ability to meet its obligations on
outstanding TANs.
REVENUE ANTICIPATION NOTES. Revenue anticipation notes ("RANs") are issued by
governments or governmental bodies with the expectation that future revenues
from a designated source will be used to repay the notes. In general, they also
constitute general obligations of the issuer. A decline in the receipt of
projected revenues, such as anticipated revenues from another level of
government, could adversely affect an issuer's ability to meet its obligations
on outstanding RANs. In addition, the possibility that the revenues would, when
received, be used to meet other obligations could affect the ability of the
issuer to pay the principal and interest on RANs.
CONSTRUCTION LOAN NOTES. Construction loan notes are issued to provide
construction financing for specific projects. Frequently, these notes are
redeemed with funds obtained from the Federal Housing Administration.
BANK NOTES. Bank notes are notes issued by local governmental bodies and
agencies as those described above to commercial banks as evidence of borrowings.
Banks on occasion sell such notes to purchasers such as the IDEX AEGON Tax
Exempt. The purposes for which the notes are issued vary, but bank notes are
frequently issued to meet short-term working-capital or capital-project needs.
These notes typically are redeemed with revenue from taxes or from long-term
financing proceeds, and may have risks similar to the risks associated with TANs
and RANs.
C. MUNICIPAL COMMERCIAL PAPER
Municipal commercial paper (also called "short-term discount notes") represents
short-term obligations of state and local governments and their agencies issued
typically to meet seasonal working capital or interim construction financing
requirements. Municipal commercial paper is often issued at a discount, with
shorter maturities than municipal notes. Such obligations are repayable from
general revenues of the issuer or refinanced with long-term debt. In most cases,
municipal commercial paper is backed by letters of credit, lending or note
repurchase agreements, or other credit facility agreements offered by banks or
other institutions.
While the various types of municipal notes and municipal commercial paper
described above as a group represent the major portion of the tax-exempt note
market, other types of notes are occasionally available in the marketplace and
the IDEX AEGON Tax Exempt may invest in such other types of notes to the extent
permitted under its investment objective and policies. Such short-term
obligations may be issued for different purposes and with different security
than those mentioned above.
D. FLOATING RATE AND VARIABLE RATE OBLIGATIONS
IDEX AEGON Tax Exempt may purchase floating rate and variable rate obligations,
including participation interests therein (see section E below). Investments in
floating or variable rate securities normally will include IDBs which provide
that the rate of interest is set as a specific percentage of a designated base
rate, such as the rate on Treasury bonds or bills or the prime rate at a major
commercial bank, and that the fund can demand payment of the obligation on short
notice at par value plus accrued interest. Variable rate securities provide for
a specified periodic adjustment in the interest
A-2
<PAGE>
rate, while floating rate securities have flexible rates that change whenever
there is a change in the designated base interest rate. Frequently, such
securities are secured by letters of credit or other credit support arrangements
provided by banks. The quality of the underlying creditor (I.E., the corporation
utilizing the IDBs financing) or the bank, as the case may be, must be
equivalent to the municipal obligation ratings required for purchases for the
IDEX AEGON Tax Exempt.
E. PARTICIPATION INTERESTS
IDEX AEGON Tax Exempt may invest in participation interests purchased from banks
in variable rate tax-exempt securities (such as IDBs) owned by the banks. A
participation interest gives the purchaser an undivided interest in the tax-
exempt security in the proportion that the fund's participation interest bears
to the total principal amount of the tax-exempt security, and permits demand
repurchase as described in section D above. Participations are frequently backed
by an irrevocable letter of credit or guarantee of the bank offering the
participation which the sub-adviser, under the supervision of the Board of
Trustees, has determined meets the prescribed quality standards for the IDEX
AEGON Tax Exempt. The fund has the right to sell the instrument back to the bank
and draw on the letter of credit on 7 days' notice for all or any part of the
fund's participation interest in the tax-exempt security, plus accrued interest.
The fund intends to exercise its demand rights under the letter of credit only
(1) upon a default under the terms of the tax-exempt security, (2) as needed to
provide liquidity in order to meet redemptions, or (3) upon a drop in the rating
or the sub-adviser's evaluation of the underlying security. Banks charge a
service and letter of credit fee and a fee for issuing repurchase commitments in
an amount equal to the excess of the interest paid on the tax-exempt securities
over the yield negotiated between the fund and the bank at which the instruments
were purchased by the IDEX AEGON Tax Exempt. The sub-adviser will monitor the
pricing, quality and liquidity of the variable rate demand instruments held by
the IDEX AEGON Tax Exempt, including the IDBs supported by bank letters of
credit or guarantee, on the basis of published financial information, reports or
rating agencies and other bank analytical services. Participation interests will
be purchased only if, in the opinion of counsel, interest income on such
interest will be tax-exempt when distributed as dividends to shareholders.
Obligations of issuers of municipal bonds, municipal notes and municipal
commercial paper are subject to the provisions of bankruptcy, insolvency and
other laws affecting the rights and remedies of creditors, such as the Federal
Bankruptcy Act, and laws, if any, which may be enacted by Congress or state
legislatures extending the time for payment of principal or interest, or
imposing other constraints upon enforcement of such obligations or upon
municipalities' power to levy taxes. There is also the possibility that
litigation or other conditions may materially affect the power or ability of an
issuer to pay, when due, the principal of and interest on its municipal
obligations.
II. OBLIGATIONS IN WHICH EACH FUND MAY INVEST
(UNLESS OTHERWISE NOTED)
The funds may invest in the following obligations for temporary defensive
purposes or as otherwise described in the prospectus.
A. U.S. GOVERNMENT OBLIGATIONS
As described in the prospectus, a fund may invest in some or all of the
following types of direct obligations of the federal government, issued by the
Department of the Treasury, and backed by the full faith and credit of the
federal government.
TREASURY BILLS. Treasury bills are issued with maturities of up to one year.
They are issued in bearer form, are sold on a discount basis and are payable at
par value at maturity.
TREASURY NOTES. Treasury notes are longer-term interest bearing obligations
with original maturities of one to seven years.
TREASURY BONDS. Treasury bonds are longer-term interest bearing obligations with
original maturities from 5 to 30 years.
B. OBLIGATIONS OF FEDERAL AGENCIES, INSTRUMENTALITIES AND AUTHORITIES
Certain federal agencies have been established as instrumentalities of the
United States government to supervise and finance certain types of activities.
These agencies include, but are not limited to, the Banks for Cooperatives,
Federal Land Banks, Federal Intermediate Credit Banks, Federal Home Loan Banks
("FHLB"), Federal National Mortgage Association ("FNMA"), Government National
Mortgage Association ("GNMA"), Export-Import Bank of the United States, and
A-3
<PAGE>
Tennessee Valley Authority ("TVA"). Issues of these agencies, while not direct
obligations of the United States government, are either backed by the full faith
and credit of the United States (e.g., GNMA Certificates or certain TVA bonds)
or are guaranteed by the Treasury (e.g., certain other TVA bonds) or supported
by the issuing agencies' right to borrow from the Treasury (e.g., FHLB and FNMA
bonds). There can be no assurance that the United States government itself will
pay interest and principal on securities as to which it is not legally obligated
to do so.
C. CERTIFICATES OF DEPOSIT AND TIME DEPOSITS
A time deposit is a non-negotiable interest-bearing deposit with a bank which
generally cannot be withdrawn prior to a specified maturity date without
substantial interest penalties. A certificate of deposit ("CD") is a negotiable
instrument issued by a bank against a time deposit. CDs normally can be traded
in the secondary market prior to maturity, and are thus more liquid than other
forms of time deposits. The funds will only invest in U.S. dollar denominated
time deposits and CDs representing deposits in U.S. banks with assets of $1
billion or more, whose deposits are insured by the Federal Deposit Insurance
Corporation.
D. COMMERCIAL PAPER
Commercial paper refers to short-term unsecured promissory notes issued by
commercial and industrial corporations to finance their current operations.
Commercial paper may be issued at a discount and redeemed at par, or issued at
par with interest added at maturity. The interest or discount rate depends on
general interest rates, the credit standing of the issuer, and the maturity of
the note, and generally moves in tandem with rates on large CDs and Treasury
bills. An established secondary market exists for commercial paper, particularly
that of stronger issuers which are rated by Moody's Investors Service, Inc. and
Standard and Poor's Ratings Group. Investments in commercial paper are subject
to the risks that general interest rates will rise, that the credit standing and
outside rating of the issuer will fall, or that the secondary market in the
issuer's notes will become too limited to permit their liquidation at a
reasonable price.
E. BANKERS' ACCEPTANCES
A bankers' acceptance is a negotiable short-term draft, generally arising from a
bank customer's commercial transaction with another party, with payment due for
the transaction on the maturity date of the customer's draft. The draft becomes
a bankers' acceptance when the bank, upon fulfillment of the obligations of the
third party, accepts the draft for later payment at maturity, thus adding the
bank's guarantee of payment to its customer's own obligation. In effect, a
bankers' acceptance is a post-dated certified check payable to its bearer at
maturity. Such acceptances are highly liquid, but are subject to the risk that
both the customer and the accepting bank will be unable to pay at maturity. A
fund may invest in U.S. dollar denominated bankers' acceptances issued by U.S.
banks, their foreign branches, and by U.S. branches of foreign banks.
F. REPURCHASE AGREEMENTS FOR U.S. GOVERNMENT SECURITIES
Subject to its investment restrictions, a fund may enter into repurchase
agreements with banks and dealers for securities of or guaranteed by the U.S.
government, under which the fund purchases securities and agrees to resell the
securities at an agreed upon time and at an agreed upon price. The difference
between the amount a fund pays for the securities and the amount it receives
upon resale is accrued as interest and reflected in the fund's net investment
income. When a fund enters into repurchase agreements, it relies on the seller
to repurchase the securities. Failure to do so may result in a loss for the fund
if the market value of the securities is less than the repurchase price. Under
the 1940 Act, repurchase agreements may be considered collateralized loans by a
fund.
At the time a fund enters into a repurchase agreement, the value of the
underlying security including accrued interest will be equal to or exceed the
value of the repurchase agreement and, for repurchase agreements that mature in
more than one day, the seller will agree that the value of the underlying
security including accrued interest will continue to be at least equal to the
value of the repurchase agreement.
Although repurchase agreements carry certain risks not associated with direct
investment in securities, a fund intends to enter into repurchase agreements
only with banks and dealers in transactions which the fund's sub-adviser
believes present minimal credit risks in accordance with guidelines adopted by
the Trustees. To the extent that proceeds from any sales of collateral upon a
default in the counterparty's obligation to repurchase were less than the
repurchase price, the
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fund would suffer a loss. If the counterpart's petitions for bankruptcy or
otherwise becomes subject to bankruptcy or liquidation proceedings, there might
be restrictions on a fund's ability to sell the collateral and the fund could
suffer a loss.
III. OTHER SECURITIES IN WHICH THE FUNDS MAY INVEST
A. CORPORATE DEBT SECURITIES
A fund may invest in corporate bonds, notes and debentures of long and short
maturities and of various grades, including unrated securities. Corporate debt
securities exist in great variety, differing from one another in quality,
maturity, and call or other provisions. Lower grade bonds, whether rated or
unrated, usually offer higher interest income, but also carry increased risk of
default. Corporate bonds may be secured or unsecured, senior to or subordinated
to other debt of the issuer, and, occasionally, may be guaranteed by another
entity. In addition, they may carry other features, such as those described
under "Convertible Securities" and "Variable or Floating Rate Securities," or
have special features such as the right of the holder to shorten or lengthen the
maturity of a given debt instrument, rights to purchase additional securities,
rights to elect from among two or more currencies in which to receive interest
or principal payments, or provisions permitting the holder to participate in
earnings of the issuer or to participate in the value of some specified
commodity, financial index, or other measure of value.
B. INTERNATIONAL AGENCY OBLIGATIONS
A fund may invest in bonds, notes or Eurobonds of international agencies.
Examples are securities issued by the Asian Development Bank, the European
Economic Community, and the European Investment Bank. The funds may also
purchase obligations of the International Bank for Reconstruction and
Development which, while technically not a U.S. government agency or
instrumentality, has the right to borrow from the participating countries,
including the United States.
C. BANK OBLIGATIONS OR SAVINGS AND LOAN OBLIGATIONS
Subject to its investment restrictions, a fund may purchase certificates of
deposit, bankers' acceptances and other debt obligations of commercial banks and
certificates of deposit and other debt obligations of savings and loan
associations ("S&L's"). Certificates of deposit are receipts from a bank or an
S&L for funds deposited for a specified period of time at a specified rate of
return. Bankers' acceptances are time drafts drawn on commercial banks by
borrowers, usually in connection with international commercial transactions.
These instruments may be issued by institutions of any size, may be of any
maturity, and may be insured or uninsured. The quality of bank or savings and
loan obligations may be affected by such factors as (a) location -- the strength
of the local economy will often affect financial institutions in the region, (b)
asset mix -- institutions with substantial loans in a troubled industry may be
weakened by those loans, and (c) amount of equity capital -- under-capitalized
financial institutions are more vulnerable when loan losses are suffered. The
sub-adviser will evaluate these and other factors affecting the quality of bank
and savings and loan obligations purchased by a fund, but the fund is not
restricted to obligations or institutions which satisfy specified quality
criteria.
D. VARIABLE OR FLOATING RATE SECURITIES
Subject to its investment restrictions, a fund may purchase variable rate
securities that provide for automatic establishment of a new interest rate at
fixed intervals (e.g., daily, monthly, semi-annually, etc.). Floating rate
securities provide for automatic adjustment of the interest rate whenever some
specified interest rate index changes. The interest rate on variable and
floating rate securities is ordinarily determined by reference to, or is a
percentage of, a bank's prime rate, the 90-day U.S. Treasury bill rate, the rate
of return on commercial paper or bank certificates of deposit, an index of
short-term interest rates, or some other objective measure.
E. PREFERRED STOCKS
Subject to a fund's investment restrictions, a fund may purchase preferred
stocks. Preferred stocks are securities which represent an ownership interest in
a corporation and which give the owner a prior claim over common stock on the
corporation's earnings and assets. Preferred stock generally pays quarterly
dividends. Preferred stocks may differ in many of their provisions. Among the
features that differentiate preferred stocks from one another are the dividend
rights, which may be cumulative or non-cumulative and participating or
non-participating, redemption provisions, and voting rights. Such features will
establish the income return and may affect the prospects for capital
appreciation or risks of capital loss.
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F. CONVERTIBLE SECURITIES
Subject to its investment restrictions, a fund may invest in debt securities
convertible into or exchangeable for equity securities, or debt securities that
carry with them the right to acquire equity securities, as evidenced by warrants
attached to such securities or acquired as part of units of the securities. Such
securities normally pay less current income than securities without conversion
features, but add the potential opportunity for appreciation from enhanced value
for the equity securities into which they are convertible, and the concomitant
risk of loss from declines in those values.
G. COMMON STOCKS
Subject to its investment restrictions, a fund may invest in common stocks. IDEX
JCC Flexible Income will consider investment in income-producing common stocks
if the yields of common stocks generally become competitive with the yields of
other income securities. Common stocks are junior to the debt obligations and
preferred stocks of an issuer. Hence, dividend payments on common stocks should
be regarded as less secure than income payments on corporate debt securities.
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<PAGE>
IDEX MUTUAL FUNDS
OTHER INFORMATION
PART C
ITEM 23. EXHIBITS
List all exhibits filed as part of the Registration Statement.
(a) Restatement of Declaration of Trust (1)
(b) Bylaws, as amended (1)
(c) Not Applicable
(d) (1) Management and Investment Advisory Agreement
(aa) IDEX Alger Aggressive Growth (1)
(bb) IDEX GE/Scottish Equitable International Equity (1)
(cc) Agreement for IDEX JCC Capital Appreciation,
Global, Growth, Balanced and Flexible Income (6)
(dd) IDEX C.A.S.E. Growth (3)
(ee) IDEX NWQ Value Equity (2)
(ff) IDEX LKCM Strategic Total Return (1)
(gg) IDEX Dean Asset Allocation (1)
(hh) IDEX AEGON Income Plus (1)
(ii) IDEX AEGON Tax Exempt (1)
(jj) Form of Agreement for IDEX Goldman Sachs Growth,
IDEX T. Rowe Price Dividend Growth, IDEX Salomon
All Cap, IDEX Pilgrim Baxter Mid Cap Growth, and
IDEX T. Rowe Price Small Cap. (6)
(2) Investment Counsel Agreement
(aa) IDEX Alger Aggressive Growth (1)
(bb) (i) IDEX GE/Scottish Equitable International
Equity (2)
(ii) IDEX GE/Scottish Equitable International
Equity (2)
(cc) Agreement for IDEX JCC Capital Appreciation,
Global, Growth, Balanced and Flexible Income (6)
(dd) IDEX C.A.S.E. Growth (3)
(ee) IDEX NWQ Value Equity (5)
(ff) IDEX LKCM Strategic Total Return (1)
(gg) IDEX Dean Asset Allocation (4)
(hh) IDEX AEGON Income Plus (1)
(ii) IDEX AEGON Tax Exempt (1)
(jj) Form of Agreement for IDEX Goldman Sachs Growth (6)
(kk) Form of Agreement for IDEX T. Rowe Price Dividend
Growth and Small Cap (6)
(ll) Form of Agreement for IDEX Salomon All Cap (6)
(mm) Form of Agreement for IDEX Pilgrim Baxter Mid Cap
Growth (6)
(e) Underwriting Agreement (5)
(1) Dealer's Sales Agreement (9)
(2) Service Agreement (9)
(3) Wholesaler's Agreement (3)
(f) Trustees/Directors Deferred Compensation Plan (2)
1
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(g) Custody Agreement (2)
(h) (1) Transfer Agency Agreement with Idex Investor
Services, Inc. (1)
(2) Administrative Services Agreement
(a) IDEX JCC Capital Appreciation (1)
(b) IDEX JCC Global (1)
(c) IDEX JCC Growth (1)
(d) IDEX JCC Balanced (1)
(e) IDEX JCC Flexible Income (1)
(f) Form of Agreement for IDEX Alger Aggressive
Growth, IDEX GE/Scottish Equitable
International Equity, IDEX C.A.S.E. Growth,
IDEX NWQ Value Equity, IDEX LKCM Strategic
Total Return, IDEX Dean Asset Allocation, IDEX
AEGON Income Plus and IDEX AEGON Tax
Exempt. (6)
(g) Form of Agreement for IDEX Goldman Sachs
Growth, IDEX T. Rowe Price Dividend Growth,
IDEX Salomon All Cap, IDEX Pilgrim Baxter Mid
Cap Growth, and IDEX T. Rowe Price Small
Cap. (6)
(i) Opinion of Counsel
(j) (1) Consent of PricewaterhouseCoopers LLP
(2) Consent of Sutherland Asbill & Brennan, LLP
(k) Not Applicable
(l) Investment Letter from Sole Shareholder (1)
(m) (1) Plan of Distribution under Rule 12b-1 - Class A Shares
(aa) IDEX Alger Aggressive Growth (1)
(bb) IDEX GE/Scottish Equitable International Equity (1)
(cc) IDEX JCC Capital Appreciation (1)
(dd) IDEX JCC Global (1)
(ee) IDEX JCC Growth (1)
(ff) IDEX C.A.S.E. Growth (3)
(gg) IDEX NWQ Value Equity (1)
(hh) IDEX LKCM Strategic Total Return (1)
(ii) IDEX Dean Asset Allocation (5)
(jj) IDEX JCC Balanced (1)
(kk) IDEX JCC Flexible Income (1)
(ll) IDEX AEGON Income Plus (1)
(mm) IDEX AEGON Tax Exempt (1)
(nn) Form of Plan for IDEX Goldman Sachs Growth (6)
(oo) Form of Plan for IDEX T. Rowe Price Dividend
Growth (6)
(pp) Form of Plan for IDEX Salomon All Cap (6)
(qq) Form of Plan for IDEX Pilgrim Baxter Mid Cap
Growth (6)
(rr) Form of Plan for IDEX T. Rowe Price Small Cap (6)
(2) Plan of Distribution under Rule 12b-1 - Class B Shares
(aa) IDEX Alger Aggressive Growth (1)
2
<PAGE>
(bb) IDEX GE/Scottish Equitable International Equity (1)
(cc) IDEX JCC Capital Appreciation (1)
(dd) IDEX JCC Global (1)
(ee) IDEX JCC Growth (1)
(ff) IDEX C.A.S.E. Growth (4)
(gg) IDEX NWQ Value Equity (1)
(hh) IDEX LKCM Strategic Total Return (1)
(ii) IDEX Dean Asset Allocation (5)
(jj) IDEX JCC Balanced (1)
(kk) IDEX JCC Flexible Income (1)
(ll) IDEX AEGON Income Plus (1)
(mm) IDEX AEGON Tax-Exempt (1)
(nn) Form of Plan for IDEX Goldman Sachs Growth (6)
(oo) Form of Plan for IDEX T. Rowe Price Dividend
Growth (6)
(pp) Form of Plan for IDEX Salomon All Cap (6)
(qq) Form of Plan for IDEX Pilgrim Baxter Mid Cap
Growth (6)
(rr) Form of Plan for IDEX T. Rowe Price Small Cap (6)
(3) Plan of Distribution under Rule 12b-1 - Class C Shares (9)
(aa) IDEX Alger Aggressive Growth (9)
(bb) IDEX GE/Scottish Equitable International Equity (9)
(cc) IDEX JCC Capital Appreciation (9)
(dd) IDEX JCC Global (9)
(ee) IDEX JCC Growth (9)
(ff) IDEX C.A.S.E. Growth (9)
(gg) IDEX NWQ Value Equity (9)
(hh) IDEX LKCM Strategic Total Return (9)
(ii) IDEX Dean Asset Allocation (9)
(jj) IDEX JCC Balanced (9)
(kk) IDEX JCC Flexible Income (9)
(ll) IDEX AEGON Income Plus (9)
(mm) IDEX AEGON Tax Exempt (9)
(nn) IDEX Goldman Sachs Growth (9)
(oo) IDEX T. Rowe Price Dividend Growth (9)
(pp) IDEX Salomon All Cap (9)
(qq) IDEX Pilgrim Baxter Mid Cap Growth (9)
(rr) IDEX T. Rowe Price Small Cap (9)
(4) Plan of Distribution under Rule 12b-1 - Class M Shares
(aa) IDEX Alger Aggressive Growth (1)
(bb) IDEX GE/Scottish Equitable International Equity (1)
(cc) IDEX JCC Capital Appreciation (1)
(dd) IDEX JCC Global (1)
(ee) IDEX JCC Growth (1)
(ff) IDEX C.A.S.E. Growth (4)
(gg) IDEX NWQ Value Equity (1)
(hh) IDEX LKCM Strategic Total Return (1)
(ii) IDEX Dean Asset Allocation (5)
(jj) IDEX JCC Balanced (1)
(kk) IDEX JCC Flexible Income (1)
(ll) IDEX AEGON Income Plus (1)
(mm) IDEX AEGON Tax Exempt (1)
(nn) Form of Plan for IDEX Goldman Sachs Growth (6)
(oo) Form of Plan for IDEX T. Rowe Price Dividend
Growth (6)
(pp) Form of Plan for IDEX Salomon All Cap (6)
(qq) Form of Plan for IDEX Pilgrim Baxter Mid Cap
Growth (6)
3
<PAGE>
(rr) Form of Plan for IDEX T. Rowe Price Small Cap (6)
(n) Financial Data Schedule (8)
(o) Multiple Class Shares (9)
- ------------------
(1) Filed previously with Post-Effective Amendment No. 24 to Registration
Statement filed on November 15, 1996 (File No. 33-2659).
(2) Filed previously with Post-Effective Amendment No. 25 to Registration
Statement filed on January 31, 1997 (File No. 33-2659)
(3) Filed previously with Post-Effective Amendment No. 20 to Registration
Statement filed on November 17, 1995 (File No. 33-2659).
(4) Filed previously with Post-Effective Amendment No. 18 to Registration
Statement filed on June 30, 1995 (File No. 33-2659).
(5) Filed previously with Post-Effective Amendment No. 26 to Registration
Statement filed on July 16, 1997 (File No. 33-2659).
(6) Filed previously with Post-Effective Amendment No. 29 to Registration
Statement filed on December 15, 1998 (File No. 33-2659).
(7) Filed previously by the registrant with the registration statement filed on
Form N-14 on June 3, 1996 (File No. 33-05113).
(8) Filed previously with Post-Effective Amendment No. 30 to Registration
Statement filed on March 1, 1999 (File No. 33-2659).
(9) Filed previously with Post-Effective Amendment No. 31 to Registration
Statement filed on September 2, 1999 (File No. 33-2659).
ITEM 24 PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
To the knowledge of the Registrant, IDEX GE/Scottish Equitable
International Equity, IDEX Alger Aggressive Growth, IDEX JCC Capital
Appreciation, IDEX JCC Global, IDEX JCC Growth, IDEX C.A.S.E. Growth, IDEX NWQ
Value Equity, IDEX LKCM Strategic Total Return, IDEX Dean Asset Allocation, IDEX
JCC Balanced, IDEX JCC Flexible Income, IDEX AEGON Income Plus and IDEX AEGON
Tax Exempt, IDEX Goldman Sachs Growth, IDEX T. Rowe Price Dividend Growth, IDEX
Salomon All Cap, IDEX Pilgrim Baxter Mid Cap Growth and IDEX T. Rowe Price Small
Cap are not controlled by or under common control with any other person. The
Registrant has no subsidiaries.
ITEM 25 INDEMNIFICATION
Provisions relating to indemnification of the Registrant's Trustees and
employees are included in Registrant's Restatement of Declaration of Trust and
Bylaws which are incorporated herein by reference.
Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to Trustees, officers and controlling persons, or
otherwise, Registrant has been advised that in the opinion of the Commission
such indemnification may be against public policy as expressed in the Act and
may be, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by Registrant of expenses
incurred or paid by a Trustee, officer or controlling person of Registrant in
the successful defense of any action, suit or proceeding) is asserted by such
Trustee, officer or controlling person in connection with the securities being
registered, Registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
ITEM 26 BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISERS
(a). IDEX JCC Capital Appreciation, IDEX JCC Global, IDEX JCC
Growth, IDEX JCC Balanced, IDEX JCC Flexible Income, IDEX
Alger Aggressive Growth, IDEX GE/Scottish Equitable
International Equity, IDEX CA.S.E. Growth, IDEX NWQ Value
Equity, IDEX LKCM Strategic Total Return, IDEX Dean Asset
Allocation, IDEX AEGON Income Plus, IDEX AEGON Tax Exempt,
IDEX
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<PAGE>
Goldman Sachs Growth, IDEX T. Rowe Price Dividend Growth, IDEX
Salomon All Cap, IDEX Pilgrim Baxter Mid Cap Growth and IDEX
T. Rowe Price Small Cap:
The only business of Idex Management, Inc. ("IMI") is to serve as the
investment adviser to each Fund of IDEX Mutual Funds.
* * *
Janus Capital Corporation also serves as sub-adviser to certain of the
mutual funds within the WRL Series Fund and as investment adviser or sub-adviser
to other mutual funds, and for private and retirement accounts. Thomas H.
Bailey, Trustee, Chairman and President of Janus Investment Fund and Janus Aspen
Series, Chairman, CEO, Director and President of the Sub-Adviser Director of
Janus Distributors, Inc., and Chairman and Director of Idex Management, Inc.,
has no business, profession, vocation or employment of a substantial nature
other than his positions with Idex Management, Inc. and Janus Capital
Corporation. James P. Craig, Executive Vice President and Trustee of Janus
Investment Fund and Janus Aspen Series, Director, Vice Chairman and Chief
Investment Officer of Janus Capital Corporation, has no substantial business,
profession, vocation or employment other than his positions with Janus Capital
Corporation. Michael N. Stolper, a Director of Janus Capital Corporation, is
President of Stolper & Company, 525 "B" Street, Suite 1080, San Diego, CA 92101,
an investment performance consultant. Michael E. Herman, a Director of Janus
Capital Corporation, is Chairman of the Finance Committee of Ewing Marion
Kauffman Foundation, 4900 Oak, Kansas City, MO 64112. Thomas A. McDonnell, a
Director of Janus Capital Corporation, is President, Director and CEO of DST
Systems, Inc., 333 West 11th Street, 5th Floor, Kansas City, MO 64105, a
provider of data processing and recordkeeping services for various mutual funds.
Landon H. Rowland, a Director of Janus Capital, President and Chief Executive
Officer of Kansas City Southern Industries, Inc. Steven R. Goodbarn is Vice
President and Chief Financial Officer of Janus Investment Fund and Janus Aspen
Series, Vice President of Finance, Treasurer and Chief Financial officer of
Janus Capital Corporation, Janus Service Corporation and Janus Distributors,
Inc., Director of Janus Distributors, Inc., Janus Service Corporation, and Idex
Management, Inc. and Vice President of Finance of Janus Capital International
Ltd., Margie G. Hurd, Vice President and Chief Operations Officer of Janus
Capital, Director and President of Janus Service Corporation. Mark B. Whiston,
Vice President and Chief Marketing Officer of Janus Capital, Director and
President of Janus Capital International, Ltd. Sandy R. Rufenacht, Executive
Vice President of Janus Investment Fund and Aspen Series, and Assistant Vice
President of Janus Capital. Helen Young Hayes, Scott W. Schoelzel, and Ronald V.
Speaker are each a Vice President of Janus Capital Corporation and an Executive
Vice President of Janus Investment Fund and Janus Aspen Series.
* * *
Fred Alger Management, Inc. ("Alger Management"), the Sub-Adviser to
IDEX Alger Aggressive Growth, is a wholly-owned subsidiary of Fred Alger &
Company, Incorporated ("Alger, Inc.") which in turn is a wholly-owned subsidiary
of Alger Associates, Inc., a financial services holding company. Alger
Management is generally engaged in rendering investment advisory services to
mutual funds, institutions and, to a lesser extent, individuals.
Fred M. Alger III, serves as Chairman of the Board, David D. Alger
serves as President and Director, Gregory S. Duch serves as Treasurer and Mary
Marsden-Cochran serves as Secretary of the following companies: Alger
Associates, Inc.; Alger Management; Alger, Inc.; Alger Properties, Inc., Alger
Shareholder Services, Inc.; Alger Life Insurance Agency, Inc.; and Castle
Convertible Fund, Inc. Fred M. Alger also serves as Chairman of the Board of
Analysts Resources, Inc. ("ARI") and Chairman of the Board and Trustee of The
Alger Fund, The Alger American Fund, Spectra Fund and The Alger Retirement Fund.
David D. Alger also serves as Executive Vice President and Director of ARI and
as President and Trustee of The Alger Fund, The Alger American Fund, Spectra
Fund and The Alger Retirement Fund. Gregory S. Duch also serves as Treasurer of
ARI, The Alger Fund, The Alger American Fund, Spectra Fund and The Alger
Retirement Fund. Mary Marsden-Cochran also serves as Secretary of ARI, The Alger
Fund, Spectra Fund, The Alger American Fund and The Alger Retirement Fund. The
principal business address of each of the companies listed above, other than
Alger, Inc., is 1 World Trade Center, Suite 9333, New York, NY 10048. The
principal business address of Alger, Inc. is 30 Montgomery Street, Jersey City,
NJ 07302.
* * *
Scottish Equitable Investment Management Limited ("Scottish Equitable")
serves as a Co-Sub-Adviser to IDEX GE/Scottish Equitable International Equity.
See "Management of the Fund - The Co-Sub-Advisers" in the Prospectus and
Statement of Additional Information regarding the business of Scottish
Equitable. Scottish Equitable is a wholly-owned subsidiary of Scottish Equitable
Asset Management plc.
5
<PAGE>
The Directors and Officers of Scottish Equitable are listed below.
Unless otherwise indicated, each Director and Officer has a principal business
address of Edinburgh Park, Edinburgh EH12 9SE: William W. Stewart, Chairman of
the Board and Executive Director, Strategy; Russell Hogan, Investment
Development Director; Roy Patrick, Director and Company Secretary; Paul N.
Ritchie, Director and Investment Administration Manager; Otto Thoresen,
Director, International Business.
None of these Directors or Officers has any substantial business,
profession, vocation or employment other than their positions with Scottish
Equitable, Scottish Equitable plc and other group companies.
GE Investment Management Incorporated ("GEIM") also serves as a
Co-Sub-Adviser for IDEX GE/Scottish Equitable International Equity. GEIM is a
wholly-owned subsidiary of General Electric Company ("GE"). GEIM's principal
officers and directors serve in similar capacities with respect to General
Electric Investment Corporation ("GEIC," and, together with GEIM, collectively
referred to as "GE Investments"), which like GEIM is a wholly-owned subsidiary
of GE. The directors and executive officers of GEIM are: John H. Myers,
President and Director, Michael J. Cosgrove, Executive Vice President and
Director, Alan M. Lewis, Executive Vice President, General Counsel, and
Director; Robert A. MacDougall, Executive Vice President; Eugene K. Bolton,
Executive Vice President and Director; Donald W. Torey, Executive Vice President
and Director, Ralph R. Layman, Executive Vice President and Director, Thomas J.
Szkutak, Executive Vice President, Chief Financial Officer and Director and
Geoffrey R. Norman, Executive Vice President and Director. All of these officers
and/or directors have no substantial business, profession, vocation or
employment other than their positions with GEIC and its affiliates.
* * *
C.A.S.E. Management, Inc. ("C.A.S.E".), sub-adviser to IDEX C.A.S.E.
Growth, is a registered investment advisory firm and a wholly-owned subsidiary
of C.A.S.E., Inc. C.A.S.E., Inc. is indirectly controlled by William Edward
Lange, President and Chief Executive Officer of C.A.S.E. C.A.S.E. provides
investment management services to financial institutions, high net worth
individuals, and other professional money managers.
William E. Lange is the President, Chief Executive Officer and Founder;
Robert G. Errigo, Executive Vice President; John Gordon, Senior Vice President;
and Bruce H. Jordan, Senior Vice President. Officers of C.A.S.E. have no other
business, professions, vocations or employments of a substantial nature. The
business address of each of the officers is 5355 Town Center Road, Suite 702,
Boca Raton, FL 33486.
* * *
NWQ Investment Management Company, Inc. ("NWQ") serves as Sub-Adviser
for IDEX NWQ Value Equity. NWQ is a Massachusetts corporation and is a
wholly-owned subsidiary of United Asset Management Corporation. NWQ provides
investment advice to individuals, pension funds, profit sharing funds,
charitable institutions, educational institutions, trust accounts, corporations,
insurance companies, municipalities and governmental agencies.
The directors and officers of NWQ are listed below. Unless otherwise
indicated, each director and officer has held the positions listed for at least
the past two years and is located at NWQ's principal business address of 2049
Century Park East, 4th Floor, Los Angeles, CA 90067: David A. Polak, President,
Chief Investment Officer; Edward C. Friedel, Jr., Managing Director; Jon D.
Bosse, Executive Managing Director (Feb. 1999)/Director Equity Research; James
H. Galbreath (Denver), Managing Director; Mary-Gene Slaven, Secretary/Treasurer
& Managing Director; James P. Owen, Managing Director; Michael C. Mendez
(Scottsdale, AZ), Executive Managing Director (Feb. 1999); Phyllis G. Thomas,
Managing Director; Louis T. Chambers (Atlanta), Vice President, Justin T.
Clifford, Managing Director; Jeffrey M. Cohen, Vice President; Ronald R.
Halverson (Minneapolis, MN), Vice President; Thomas J. Laird, Managing Director,
Karen S. McCue, Vice President; Martin Pollack, Vice President; Ronald R.
Sternal (Minneapolis, MN), Vice President and Michael Wood (San Fransisco), Vice
President.
* * *
Luther King Capital Management Corporation, the Sub-Adviser to the IDEX
LKCM Strategic Total Return, is a registered investment adviser providing
investment management services.
Luther King Capital Management Corporation also provides investment
management services to individual
6
<PAGE>
and institutional investors on a private basis. J. Luther King, Jr., President
of the Sub-Adviser, Paul W. Greenwell, Robert M. Holt, Jr., Scot C. Hollmann,
David L. Dowler, Joan M. Maynard, Vincent G. Melashenko, Steven R. Purvis,
Timothy E. Harris, and Barbara S. Garcia, officers of Luther King Capital
Management Corporation, have no substantial business, profession, vocation or
employment other than their positions with Luther King Capital Management
Corporation.
* * *
Dean Investment Associates ("Dean"), the Sub-Adviser to IDEX Dean Asset
Allocation, is a division of C.H. Dean and Associates, Inc. Dean is the money
management division of C.H. Dean and Associates, Inc. Dean became a registered
investment adviser in October, 1972 and will assume all of the investment
advisory functions. C.H. Dean and Associates is a Nevada corporation (6/30/95)
which was an Ohio corporation originally incorporated on March 28, 1975.
Chauncey H. Dean is the Chairman and Chief Executive Officer; Robert D.
Dean is President; Frank H. Scott is Senior Vice President; John C. Riazzi is
Vice President and Director of Consulting Services; Richard M. Luthman is Senior
Vice President. The business address of each of the Officers of the Sub-Adviser
is 2480 Kettering Tower, Dayton, Ohio 45423-2480.
* * *
AEGON USA Investment Management, Inc. ("AIMI"), the Sub-Adviser to IDEX
AEGON Income Plus and IDEX AEGON Tax Exempt, is an Iowa corporation which was
incorporated on April 12, 1989. AIMI became a registered investment adviser on
March 16, 1992 and has assumed all of the investment advisory functions of AEGON
USA Securities, Inc. ("AEGON Securities"). AIMI and AEGON Securities are
wholly-owned subsidiaries of First AUSA Holding Company which is a wholly-owned
subsidiary of AEGON USA, Inc.
AIMI also serves as sub-adviser to WRL Series Fund's WRL AEGON Balanced
and WRL AEGON Bond. Douglas C. Kolsrud is Director, Chairman of the Board and
President of AIMI; Director, Senior Vice President, Chief Investment Officer and
Corporate Actuary of Life Investors Insurance Company of America ("LIICA"),
Bankers United Life Assurance Company ("Bankers United"), PFL Life Insurance
Company ("PFL Life"); First AUSA Life Insurance Company ("First AUSA") and
Monumental Life Insurance Company ("Monumental Life"); Director, Chief
Investment Officer and Vice President of Monumental General Casualty Company
("Monumental General") and Commonwealth General Corporation; Senior Vice
President, Chief Investment Officer and Corporate Actuary of Western Reserve
Life Assurance Co. of Ohio ("Western Reserve"); Director and President of AIMI;
Executive Vice President of AEGON USA, Inc.; Chief Investment Officer of
Diversified Financial Products Inc., and Director of United Financial Services,
Inc., Realty Information Systems, Inc., AEGON USA Realty Advisors Inc.,
Southlife, Inc.and Quantra Corporation; Brenda K. Clancy, Director, Treasurer,
Vice President and Chief Financial Officer of LIICA and Monumental Life;
Treasurer, Vice President and Chief Financial Officer of Bankers United and PFL
Life; Director, Treasurer and Vice President of First AUSA and Investors
Warranty of America, Inc.; Director, Treasurer and Cashier of Massachusetts
Fidelity Trust Company; Director and Vice President of Peoples Benefit Life
Insurance Company, Academy Life Insurance Company and Pension Life Insurance
Company of America; Director and Vice President of Veterans Life Insurance
Company; Treasurer and Vice President of Money Services, Inc. and Commonwealth
General Corporation; Director and Treasurer of Zahorik Company, Inc.; Vice
President of Western Reserve, Commonwealth General Assignment Corporation;
Monumental Agency Group, Inc. and AEGON Assignment Corporation of Kentucky;
Director of AEGON USA Securities, Inc., AEGON USA Investment Management, Inc.
and AEGON USA Realty Advisors Inc.; Treasurer of AUSA Life and AUSA Holding
Company; Assistant Secretary of Benefit Plans, Inc.; Senior Vice President and
Treasurer of AEGON USA, Inc.; Assistant Treasurer of Diversified Financial
Products, Inc., Independence Automobile Association, Inc. and Independence
Automobile Club, Inc. and Senior Vice President, Treasurer and Controller of
Cadet Holding Corp.; Craig D. Vermie, Director of AIMI; Director, Secretary,
Vice President and General Counsel of LIICA, Bankers United, PFL Life, and First
AUSA; Director, Vice President, General Counsel and Assistant Secretary of
Monumental Life; Vice President, Corporate Counsel and Assistant Secretary of
Western Reserve; Director, Vice President and Assistant Secretary of Monumental
General Casualty Company and Zahorik Company, Inc.; Director, Secretary and Vice
President of Investors Warranty of America, Inc.; Secretary, Vice President and
General Counsel of AEGON USA, Inc.; Director, Counsel, Assistant Secretary of
Commonwealth General Corporation; Director and Vice President of The Whitestone
Corporation; Director and Secretary of Peoples Benefit Life Assurance Company,
Veterans Life Insurance Company, Massachusetts Fidelity Trust Company, AUSA
Holding Company, Cadet Holding Corp., AEGON Management Company and AEGON USA
Charitable Foundation, Inc.; Director and Assistant Secretary
7
<PAGE>
of Academy Life Insurance Company, Providian Auto & Home Insurance Company,
Providian Life Insurance Company, Providian Property & Casualty Insurance
Company, Monumental Agency Group, Inc., Creditor Resources, Inc., Great American
Insurance Agency, Inc. and Monumental General Mass Marketing, Inc.; Director,
Pension Life Insurance Company of America, Monumental General Insurance Group,
Inc, United Financial Services, Inc., AEGON Financial Services Group, Inc.,
AIMI, Southlife, Inc., Durco Agency, Inc., Executive Management & Consultant
Services, Inc., Monumental General Administrators, Inc., AUSA Financial Markets,
Inc., Short Hills Management Company, Corpa Reinsurance Company, AEGON Special
Markets Group and Monumental General Mass Marketing, Inc.; Secretary, AUSA Life
Insurance Company , Inc., Money Services, Inc., Supplemental Insurance Division,
Inc.; Assistant Secretary, Bankers Financial Life Insurance Company, ZCI, Inc.;
Clifford A. Sheets, Executive Vice President, Director of Securities of AIMI;
Vice President of Life Investors Insurance Company of America, Bankers United
Life Assurance Company, PFL Life Insurance Company, First AUSA Life Insurance
Company, Western Reserve Life Assurance Co. of Ohio, AUSA Life Insurance
Company, Inc., Monumental General Casualty Company and Monumental Life Insurance
Company; Second Vice President of Peoples Benefit Life Insurance Company,
Academy Life Insurance Company, Veterans Life Insurance Company Providian Auto &
Home Insurance Company, Providian Fire Insurance Company, Providian Property &
Casualty Insurance Company; Eric B. Goodman, Executive Vice President and Head
of Portfolio Management of AIMI, Vice President of Life Investors Insurance
Company of America, Bankers United Life Assurance Company, PFL Life Insurance
Company, Western Reserve Life Assurance Co. of Ohio, AUSA Life Insurance
Company, Inc. and Monumental Life Insurance Company; Second Vice President of
Peoples Benefit Life Insurance Company, Academy Life Insurance Company, Pension
Life Insurance Company of America, Veterans Life Insurance Company, Providian
Auto & Home Insurance Company, Providian Fire Insurance Company and Providian
Property & Casualty Insurance Company; William S. Cook, Executive Vice President
and Head of Portfolio Management of AIMI, Vice President of Life Investors
Insurance Company of America, Bankers United Life Assurance Company, PFL Life
Insurance Company, Western Reserve Life Assurance Co. of Ohio, AUSA Life
Insurance Company, Inc. and Monumental Life Insurance Company; Second Vice
President of Peoples Benefit Life Insurance Company, Academy Life Insurance
Company, Pension Life Insurance Company of America, Veterans Life Insurance
Company, Providian Auto & Home Insurance Company, Providian Fire Insurance
Company and Providian Property & Casualty Insurance Company; David R. Ludke,
Executive Vice President of AIMI Chief Actuary and Vice President of Diversified
Financial Products Inc., Second Vice President of Academy Life Insurance
Company, Pension Life Insurance Company of America, Veterans Life Insurance
Company, Providian Auto & Home Insurance Company, Providian Fire Insurance
Company and Providian Property & Casualty insurance Company; David M. Carney,
Senior Vice President and Chief Financial Officer of AIMI, Vice President of
Life Investors Insurance Company of America, Peoples Benefit Life Insurance
Company, Bankers United Life Assurance Company, Academy Life Insurance Company,
Pension Life Insurance Company of America, PFL Life Insurance Company, Western
Reserve Life Insurance Co. of Ohio, AUSA Life Insurance Company, Inc. Veterans
Life Insurance Company, Monumental General Insurance Group, Inc., Monumental
General Casualty Company, Monumental Life Insurance Company, Commonwealth
General Corporation and Investors Warranty of America, Inc.; Ralph M. O'Brian,
Senior Vice President of AIMI, Vice President of Life Investors Insurance
Company of America, Bankers United Life Assurance Company, PFL Life Insurance
Company, First AUSA Life Insurance Company, Western Reserve Life Assurance Co.
of Ohio, AUSA Life Insurance Company, Inc., Monumental General Casualty Company,
Monumental Life Insurance Company and AEGON USA Managed Portfolios, Inc.; Second
Vice President of Peoples Benefit Life Insurance Company, Academy Life Insurance
Company, Pension Life Insurance Company of America, Veterans Life Insurance
Company, Providian Auto & Home Insurance Company, Providian Fire Insurance
Company and Providian Property & Casualty Insurance Company; Trust Officer of
Massachusetts Fidelity Trust Company; David R. Halfpap, Senior Vice President of
AIMI, Vice President and Assistant Secretary of AEGON USA Managed Portfolios,
Inc.; Vice President of Life Investors Insurance Company of America, Bankers
United Life Assurance Company, PFL Life Insurance Company, First AUSA Life
Insurance Company, Western Reserve Life Assurance Co. of Ohio, AUSA Life
Insurance Company, Inc., Monumental General Casualty Company and Monumental Life
Insurance Company, Second Vice President of Peoples Benefit Life Insurance
Company, Academy Life Insurance Company, Pension Life Insurance Company of
America, Veterans Life Insurance Company, Providian Auto & Home Insurance
Company. Providian Fire Insurance Company and Providian Property & Casualty
Insurance Company; Steven P. Opp, Senior Vice President of AIMI; Kirk W. Buese,
Senior Vice President of AIMI; Vice President of Life Investors Insurance
Company of America, Bankers United Life Assurance Company, PFL Life Insurance
Company, Western Reserve Life Assurance Co. of Ohio, AUSA Life Insurance
Company, Inc., Monumental Life Insurance Company, PB Investment Advisors, Inc.;
Second Vice President of Peoples Benefit Life Insurance Company, Academy Life
Insurance Company of America, Veterans Life Insurance Company, Providian Auto &
Home Insurance Company, Providian Fire Insurance Company, Providian Property &
Casualty Insurance Company;
8
<PAGE>
Gregory W. Theobald, Vice President and Assistant Secretary of AIMI, Life
Investors Insurance Company of America, Bankers United Life Assurance Company,
PFL Life Insurance Company, First AUSA Insurance Company, Western Reserve Life
Assurance Co. of Ohio, AUSA Life Insurance Company, Inc., Monumental General
Casualty Company, Monumental Life Insurance Company, Vice President of Money
Services, Inc., Secretary of AEGON USA Managed Portfolios, Inc.; Lewis O.
Funkhouser, Vice President of AIMI; Jon D. Kettering, Vice President of AIMI,
Life Investors Insurance Company of America, Bankers United Life Assurance
Company, PFL Life Insurance Company, First AUSA Life Insurance Company, Western
Reserve Life Assurance Co. of Ohio, AUSA Life Insurance Company, Inc.,
Monumental General Casualty Company, Monumental Life Insurance Company; Second
Vice President of Peoples Benefit Life Insurance Company, Academy Life Insurance
Company, Pension Life Insurance Company of America, Veterans Life Insurance
Company, Providian Auto & Home Insurance Company, Providian Fire Insurance
Company and Providian Property & Casualty Insurance Company; Robert L. Hanson,
Vice President of AIMI, Life Investors Insurance Company of America, Bankers
United Life Assurance Company, PFL Life Insurance Company, First AUSA Life
Insurance Company, Western Reserve Life Assurance Co. of Ohio, AUSA Life
Insurance Company, Inc., Monumental General Casualty Company, Monumental Life
Insurance Company; Second Vice President of Peoples Benefit Life Insurance
Company, Academy Life Insurance Company, Pension Life Insurance Company of
America, Veterans Life Insurance Company, Providian Auto & Home Insurance
Company, Providian Fire Insurance Company and Providian Property & Casualty
Insurance Company; Bradley Beman, Vice President of AIMI, Michael B. Simpson,
Vice President of AIMI, Life Investors Insurance Company of America, Bankers
United Life Assurance Company, PFL Life Insurance Company, Western Reserve Life
Assurance Co. of Ohio, AUSA Life Insurance Company, Inc., Monumental Life
Insurance Company; Second Vice President of Peoples Benefit Life Insurance
Company, Academy Life Insurance Company, Pension Life Insurance Company of
America, Veterans Life Insurance Company, Providian Auto & Home Insurance
Company, Providian Fire Insurance Company and Providian Property & Casualty
Insurance Company; Douglas A. Dean, Vice President of AIMI; Stephanie M. Phelps,
Vice President of AIMI; Jon L. Skaags, Vice President of AIMI, Life Investors
Insurance Company of America, Bankers United Life Assurance Company, PFL Life
Insurance Company, First AUSA Life Insurance Company, Monumental Life Insurance
Company; Second Vice President of Peoples Benefit Life Insurance Company,
Academy Life Insurance Company, Pension Life Insurance Company of America,
Veterans Life Insurance Company, Providian Auto & Home Insurance Company,
Providian Fire Insurance Company, Providian Property & Casualty Insurance
Company; Daniel P. Fox, Vice President of AIMI; Robert S. Jett III, Secretary of
AIMI, Assistant Secretary of AUSA Life Insurance Company, Money Services, Inc.
and AUSA Financial Markets, Inc.; and Counsel and Vice President of Investors
Warranty of America, Inc. and Blaine E. Rolland, Treasurer of AIMI.
* * *
Goldman Sachs Asset Management ("GSAM"), located at One New York Plaza,
New York, NY 10004, serves as sub-adviser to the IDEX Goldman Sachs Growth.
David B. Ford serves as Co-Head of GSAM and as Managing Director of Goldman
Sachs, & Co.; John P. McNulty serves as Co-Head of GSAM and Managing Director of
Goldman, Sachs & Co.
* * *
Salomon Brothers Asset Management Inc ("SBAM"), 7 World Trade Center,
New York, NY, 10048 serves as sub-adviser to IDEX Salomon All Cap. Michael S.
Hyland, President and Managing Director, also serves as Managing Director of
Salomon Brothers Inc., New York, NY, Director and Chairman of Salomon Brothers
Asset Management Limited, London, England; Director of Salomon Brothers Asset
Management Japan Limited, Tokyo, Japan, and Chairman of Salomon Brothers Asset
Management (Ireland) Limited ; Vilas V. Gadkari, Managing Director, also serves
as Managing Director and Chief Investment Officer of Salomon Brothers Asset
Management Limited, London England, Managing Director of Salomon Brothers Inc.,
New York, NY, and Salomon Brothers International Limited, London, England ;
Zacharay Snow, Secretary also serves as Managing Director of Salomon Brothers
Inc, New York, NY; Alan M. Mandel, Vice President and Chief Operating Officer,
serves as Director of Salomon Brothers Inc., New York, NY; Mutual Funds; Mitchel
E. Schulman, Director and Chief Operating Officer - Mutual Funds also serves as
Director and Chief Operating Officer of Salomon Brothers Inc., New York, NY;
Marcus A. Peckman, Director, Vice President and Chief Financial Officer also
serves as Director of Salomon Brothers, Inc., New York, NY; Jeffrey S. Scott,
Chief Compliance Officer; Michael F. Rosenbaum, Chief Legal Officer, also serves
as Chief Legal Officer of Salomon Brothers Asset Management Limited, London,
England, Chief Legal officer of Salomon Brothers Asset Management Asia Pacific
Limited, Hong Kong, Corporate Secretary of The Travelers Investment Management
9
<PAGE>
Company, New York, NY, and General Counsel to Asset Management, Travelers Group
Inc., New York, NY and its predecessors; and Thomas W. Jasper, Treasurer, also
serves as Managing Director of Salomon Brothers Inc, New York, NY.
* * *
T. Rowe Price Associates, Inc., ("T. Rowe") 100 E. Pratt Street,
Baltimore, MD 21202, serves as sub-adviser to IDEX T. Rowe Price Dividend Growth
and IDEX T. Rowe Price Small Cap. James E. Halbkat, Jr., Director of T. Rowe.
Mr. Halbkat is President of U.S. Monitor Corporation, a provider of public
response systems. Mr. Halbkat's address is P.O. Box 23109, Hilton Head Island,
South Carolina 29925; Richard L. Menschel, Director of T. Rowe. Mr. Menschel is
a limited partner of The Goldman Sachs Group, L.P., an investment banking firm.
Mr. Menschel's address is 85 Broad Street, 2nd Floor, New York, New York 10004.
Robert L. Strickland, Director of T. Rowe. Mr. Strickland retired as Chairman of
Lowe's Companies, Inc., a retailer of specialty home supplies, as of January 31,
1998 and continues to serve as a Director. He is a Director of Hannaford Bros.,
Co., a food retailer. Mr. Stickland's address is: 2000 W. First Street, Suite
604, Winston-Salem, North Carolina 27104. Philip C. Walsh, Director of T. Rowe
is a retired mining industry executive. Mr. Walsh's address is Pleasant Valley,
Peapack, New Jersey 07977. Anne Marie Whittemore, Director of T. Rowe. Mrs.
Whittemore is a partner of the law firm of McGuire, Woods, Battle & Boothe
L.L.P. and a Director of Owens & Minor, Inc., Fort James Corporation; and
Albemarle Corporation. Mrs. Whittemore's address is: One James Center, Richmond,
Virginia 23219. Henry H. Hopkins Director and Managing Director of T. Rowe;
Director of T. Rowe Price Insurance Agency, Inc.; Vice President and Director of
T. Rowe Price (Canada), Inc., T. Rowe Price Investment Services, Inc., T. Rowe
Price Services, Inc., T. Rowe Price Threshold Fund Associates, Inc., T. Rowe
Price Trust Company, TRP Distribution, Inc., and TRPH Corporation; Director of
T. Rowe Price Insurance Agency, Inc.; Vice President of Price-Fleming, T. Rowe
Price Real Estate Group, Inc., T. Rowe Price Retirement Plan Services, Inc., T.
Rowe Price Stable Asset Management, Inc., and T. Rowe Price Strategic Partners
Associates, Inc.; James A.C. Kennedy III, Director and Managing Director of T.
Rowe, President and Director of T. Rowe Price Strategic Partners Associates,
Inc.; Director and Vice President of T. Rowe Price Threshold Fund Associates,
Inc.; John H. LaPorte, Jr., Director and Managing Director of T. Rowe; William
T. Reynolds, Director and Managing Director of T. Rowe; Chairman of the Board of
T. Rowe Price Stable Asset Management, Inc.; Director of TRP Finance, Inc.;
James S. Riepe, Vice-Chairman of the Board, Director, and Managing Director of
T. Rowe; Chairman of the Board and President of T. Rowe Price Trust Company;
Chairman of the Board of T. Rowe Price (Canada), Inc., T. Rowe Price Investment
Services, Inc., T. Rowe Price Investment Technologies, Inc. T. Rowe Price
Retirement Plan Services, Inc., and T. Rowe Price Services, Inc.; Director of
Price-Fleming, T. Rowe Price Insurance Agency, Inc., and TRPH Corporation;
Director and President of TRP Distribution, Inc., TRP Suburban Second, Inc., and
TRP Suburban, Inc.; and Director and Vice President of T. Rowe Price Stable
Asset Management, Inc.; George A. Roche, Chairman of the Board, President and
Managing Director of T. Rowe; Chairman of the Board of TRP Finance, Inc.,
Director of Price-Fleming, T. Rowe Price Retirement Plan Services, Inc., and T.
Rowe Price Strategic Partners, Inc.; and Director and Vice President of T. Rowe
Price Threshold Fund Associates, Inc., TRP Suburban Second, Inc., and TRP
Suburban, Inc.; Brian C. Rogers, Director and Managing Director of T. Rowe, Vice
President of T. Rowe Price Trust Company; M. David Testa, Vice-Chairman of the
Board, Chief Investment Officer, and Managing Director of T. Rowe; Chairman of
the Board of Price-Fleming; President and Director of T. Rowe Price (Canada),
Inc.; Director and Vice President of T. Rowe Price Trust Company; and Director
of TRPH Corporation; Edward C. Bernard, Managing Director of T. Rowe; Director
and President of T. Rowe Price Insurance Agency, Inc., and T. Rowe Price
Investment Services, Inc.; Director of T. Rowe Price Services, Inc.; Vice
President of TRP Distribution, Inc.; Michael A. Goff, Managing Director of T.
Rowe; Director and the President of T. Rowe Price Investment Technologies, Inc.;
Charles E. Vieth, Managing Director of T. Rowe; Director and President of T.
Rowe Price Retirement Plan Services, Inc.; Director and Vice President of T.
Rowe Price Investment Services, Inc. and T. Rowe Price Services, Inc.; Vice
President of T. Rowe Price (Canada), Inc., T. Rowe Price Trust Company, and TRP
Distribution, Inc.; Alvin M. Younger, Jr., Chief Financial Officer, Managing
Director, Secretary and Treasurer of T. Rowe; Director, Vice President,
Treasurer, and Secretary of TRP Suburban Second, Inc. and TRP Suburban, Inc.;
Director of TRP Finance, Inc.; Secretary and Treasurer for Price-Fleming, T.
Rowe Price (Canada), Inc., T. Rowe Price Insurance Agency, Inc., T. Rowe Price
Investment Services, Inc., T. Rowe Price Real Estate Group, Inc., T. Rowe Price
Retirement Plan Services, Inc., T. Rowe Price Services, Inc., T. Rowe Price
Stable Asset Management, Inc., T. Rowe Price Strategic Partners Associates,
Inc., T. Rowe Price Threshold Fund Associates, Inc., T. Rowe Price Trust
Company, TRP Distribution, Inc., and TRPH Corporation; Treasurer and Clerk of T.
Rowe Price Insurance Agency of Massachusetts, Inc.; Preston G. Athey, Managing
Director of T. Rowe; Brian W.H. Berghuis, Managing Director of T. Rowe; Stephen
W. Boesel, Managing Director of T. Rowe; Vice President
10
<PAGE>
of T. Rowe Price Trust Company; Gregory A. McCrickard, Managing Director of T.
Rowe; Vice President of T. Rowe Price Trust Company; Mary J. Miller, Managing
Director of T. Rowe; Charles A. Morris, Managing Director of T. Rowe; George A.
Murnaghan, Managing Director of T. Rowe; Executive Vice President of
Price-Fleming; Vice President of T. Rowe Price Investment Services, Inc., and T.
Rowe Price Trust Company; Edmund M. Notzon III, Managing Director of T. Rowe;
Vice President of T. Rowe Price Trust Company; Wayne D. O'Melia, Managing
Director of T. Rowe; Director and President of T. Rowe Price Services, Inc.;
Vice President of T. Rowe Price Trust Company; Larry J. Puglia, Managing
Director of T. Rowe; Vice President of T. Rowe Price (Canada), Inc.; John R.
Rockwell, Managing Director of T. Rowe; Director and Senior Vice President of T.
Rowe Price Retirement Plan Services, Inc.; Director and Vice President of T.
Rowe Price Stable Asset Management, Inc. and T. Rowe Price Trust Company; Vice
President of T. Rowe Price Investment Services, Inc.; R. Todd Ruppert, Managing
Director of T. Rowe; President and Director of TRPH Corporation; Vice President
of T. Rowe Price Retirement Pan Services, Inc., and T. Rowe Price Trust Company;
Robert W. Smith, Managing Director of T. Rowe; Vice President of Price-Fleming;
William J. Stromberg, Managing Director of T. Rowe; Richard T. Whitney, Managing
Director of T. Rowe; Vice President of Price-Fleming and T. Rowe Price Trust
Company.
* * *
Pilgrim Baxter & Associates, Ltd., ("Pilgrim") 825 Duportail Road,
Wayne, PA 19087, serves as sub-adviser to IDEX Pilgrim Baxter Mid Cap Growth.
Harold J. Baxter, Chairman, Chief Executive Officer and Director, also serves as
Trustee to PBHG Fund Distributors; Director, Chairman and Chief Executive
Officer of Pilgrim Baxter Value Investors, Inc., Director and Chairman of PBHG
Insurance Series Fund, Inc., Trustee of PBHG Fund Services, and Chairman and
Director of The PBGH Funds, Inc. and PBHG Advisor Funds, Inc.; Gary L. Pilgrim,
Chief Investment Officer, President and Director, Director and President of
Pilgrim Baxter Value Investors, Inc., Trustee of PBHG Fund Services, and
President of PBHG Advisor Funds, Inc., PBHG Insurance Series Fund, Inc., and The
PBHG Funds, Inc.; Eric C. Schnieder, Chief Financial Officer and Treasurer, is
Chief Financial Officer and Treasurer of Pilgrim Baxter Value Investors, Inc.,
and Chief Financial Officer of PBHG Fund Services and Trustee and Chief
Financial Officer of PBHG Fund Distributors; Amy S. Yuter, Chief Compliance
Officer, is Chief Compliance Officer of PBHG Fund Distributors, Pilgrim Baxter
Value Investors, Inc., and is Director of NSCP, an industry association; and
John M. Zerr, General Counsel and Secretary, also serves as General Counsel and
Secretary of Pilgrim Baxter Value Investors, Inc., PBHG Fund Distributors, PBHG
Fund Services, and as Vice President and Secretary of PBHG Advisor Funds, Inc.,
The PBHG Funds, Inc. and PBHG Insurance.
Each person and entity may be reached c/o Pilgrim Baxter & Associates,
Ltd., at the above address.
* * *
11
<PAGE>
ITEM 27 PRINCIPAL UNDERWRITER
InterSecurities, Inc.
(a) The Registrant has entered into an Underwriting Agreement with
InterSecurities, Inc. ("ISI"), whose address is P.O. Box 9053,
Clearwater, FL 33758-9053, to act as the principal underwriter
of Fund shares.
(b) Directors and Officers of Principal Underwriter
<TABLE>
<CAPTION>
NAME POSITIONS AND OFFICES WITH UNDERWRITER POSITIONS AND OFFICES WITH REGISTRANT
---- -------------------------------------- -------------------------------------
<S> <C> <C>
G. John Hurley Chairman and Director President, Chief Executive
Officer and Trustee
Larry G. Brown Vice President N/A
William H. Geiger Director and Secretary Vice President and Assistant
Secretary
Thomas R. Moriarty President and Chief Executive Officer Senior Vice President, Treasurer and
Principal Financial Officer
Cynthia L. Remley Vice President and Associate N/A
General Counsel
A. Kenneth Fine Vice President and Counsel N/A
Herbert Pontzer Vice President - Compliance N/A
William G. Cummings Vice President and Treasurer N/A
Gary Richardson Vice President N/A
Kimberly Scouller Vice President and Counsel N/A
Michael V. Williams Vice President N/A
Kristy L. Dowd Vice President N/A
Terry L. Garvin Vice President N/A
Christopher G. Roetzer Assistant Vice President Vice President, Assistant Treasurer
And Principal Accounting Officer
Nathan Anguiano Assistant Vice President N/A
Stephen Breininger Assistant Vice President N/A
Donna Craft Assistant Vice President N/A
Michael Lane Assistant Vice President N/A
Scott M. Lenhart Assistant Vice President N/A
12
<PAGE>
Teresa Rooney Assistant Vice President N/A
Scott Russell Assistant Vice President N/A
Frank Wollett Assistant Vice President N/A
Diane Rogers Assistant Vice President N/A
Russell W. Crooks Assistant Vice President N/A
Greg Limardi Assistant Vice President N/A
Christine M. Goodwin Assistant Vice President N/A
Stuart Walsky Assistant Vice President N/A
Duncan H. Cameron Assistant Vice President N/A
Tracey Creighton Assistant Secretary N/A
Meg Cullem-Fiore Assistant Secretary N/A
Jayne Flood Assistant Secretary N/A
Kristina Mackowiak Assistant Secretary N/A
Carol Ann MacLean Assistant Secretary N/A
Laura Hunt Assistant Secretary N/A
Carlene Endick Assistant Vice President N/A
</TABLE>
ITEM 28 LOCATION OF ACCOUNTS AND RECORDS
The accounts, books and other documents required to be maintained by
Section 31(a) of the 1940 Act and the rules promulgated thereunder are
maintained as follows:
(a) Shareholder records are maintained by the Registrant's transfer
agent, Idex Investor Services, Inc., P.O. Box 9015, Clearwater,
FL 33758-9015.
(b) All other accounting records of the Registrant are maintained
at the offices of the Registrant at 570 Carillon Parkway, St.
Petersburg, Florida 33716 and are in the physical possession of
the officers of the Fund, or at the offices of the Custodian,
Investors Fiduciary Trust Company, 801 Pennsylvania, Kansas
City, MO 64105-1307.
13
<PAGE>
ITEM 29 MANAGEMENT SERVICES
The Registrant has no management-related service contract that is not
discussed in Part I of this form. See the section of the Prospectus entitled
"Investment Advisory and Other Services" for a discussion of the management and
advisory services furnished by IMI, ISI, Alger Management, Scottish Equitable,
GEIM, Janus Capital, C.A.S.E., NWQ, Luther King, Dean Investment, AEGON
Management GSAM, T. Rowe Price, SBAM and Pilgrim pursuant to the Management and
Investment Advisory Agreements, the Investment Counsel Agreements, the
Administrative Services Agreements and the Underwriting Agreement.
ITEM 30 UNDERTAKINGS
Not applicable
14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, IDEX Mutual Funds, certifies
that it meets all of the requirements for effectiveness of this Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly
caused this Post-Effective Amendment No. 32 to its Registration Statement to be
signed on its behalf by the undersigned, thereunder duly authorized, in the City
of St. Petersburg, State of Florida, on this 26th day of October, 1999.
IDEX Mutual Funds
By: /s/ G. JOHN HURLEY
-----------------------------------------
G. John Hurley
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933 and
Investment Company Act of 1940, this Post-Effective Amendment No. 32 to its
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated:
<TABLE>
<S> <C> <C>
JOHN R. KENNEY Chairman and Trustee October 26, 1999
- ---------------------------------
John R. Kenney
G. JOHN HURLEY President and Trustee October 26, 1999
- --------------------------------- (Principal Executive Officer)
G. John Hurley
THOMAS R. MORIARTY Senior Vice President October 26, 1999
- --------------------------------- Treasurer and Principal
Thomas R. Moriarty Financial Officer
CHRISTOPHER G. ROETZER Vice President, Assistant October 26, 1999
- ---------------------------------- Treasurer and Principal
Christopher G. Roetzer Accounting Officer
/s/ G. JOHN HURLEY Trustee October 26, 1999
- ---------------------------------
Peter R. Brown *
/s/ G. JOHN HURLEY Trustee October 26, 1999
- ---------------------------------
Daniel Calabria *
/s/ G. JOHN HURLEY Trustee October 26, 1999
- ---------------------------------
James L. Churchill *
/s/ G. JOHN HURLEY Trustee October 26, 1999
- ---------------------------------
Charles C. Harris*
<PAGE>
/s/ G. JOHN HURLEY Trustee October 26, 1999
- ---------------------------------
Julian A. Lerner *
/s/ G. JOHN HURLEY Trustee October 26, 1999
- ---------------------------------
William W. Short, Jr. *
/s/ G. JOHN HURLEY Trustee October 26, 1999
- ---------------------------------
Jack E. Zimmerman *
/s/ G. JOHN HURLEY
- ---------------------------------
*Signed by G. John Hurley
Attorney in Fact
</TABLE>
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
EXHIBITS FILED WITH
POST-EFFECTIVE AMENDMENT NO. 32 TO
REGISTRATION STATEMENT ON
FORM N-1A
IDEX MUTUAL FUNDS
REGISTRATION NO. 33-2659
<PAGE>
EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT
- -------------- ----------------------
23(i) Opinion of Counsel
23(j)(1) Consent of PricewaterhouseCoopers
23(j)(2) Consent of Sutherland Asbill & Brennan
EXHIBIT 99.B10
EXHIBIT 23(i)
OPINION OF COUNSEL
<PAGE>
October 28, 1999
IDEX Mutual Funds
570 Carillon Parkway
St. Petersburg, FL 33716
RE: IDEX Mutual Funds
Offering of Shares of Beneficial Interest
Gentlemen:
In my capacity as Vice President, Secretary and Associate General
Counsel, I have acted as counsel for IDEX Mutual Funds (the "Fund") and have
reviewed the Registration Statement under the Securities Act of 1933 on Form
N-1A, and amendments thereto, with respect to the offer and sale of shares of
beneficial interest, no par value, of the above-referenced Fund, including the
"Rule 24f-2 Notice" for the period ended October 31, 1998, registering such
shares pursuant to such Registration Statement, as amended, in accordance with
Rule 24f-2 under the Investment Company Act of 1940.
I have examined the Fund's Declaration of Trust and Bylaws, as amended;
the proceedings of its Board of Trustees relating to the authorization,
issuance, and proposed sales of the shares; and such other records and documents
as I deemed relevant. Based upon such examination, it is my opinion that upon
the issuance and sale of the shares of beneficial interest of the Fund in the
manner contemplated by the aforesaid Registration Statement, as amended, such
shares were validly issued, fully paid and nonassessable outstanding shares of
beneficial interest of the Fund.
Very truly yours,
/s/ Thomas E. Pierpan
Thomas E. Pierpan
Vice President, Secretary and
Associate General Counsel
EXHIBIT 99.B11-1
EXHIBIT 23(j)(1)
CONSENT OF PRICEWATERHOUSECOOPERS LLP
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CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus and
Statement of Additional Information constituting parts of this Post-Effective
Amendment No. 32 to the registration statement on Form N-1A (the "Registration
Statement") of our report dated December 10, 1998, relating to the financial
statements and financial highlights appearing in the October 31, 1998 Annual
Report to Shareholders of the IDEX Series Fund, which is also incorporated by
reference into the Registration Statement. We also consent to the references to
us under the heading "Financial Highlights" in the Prospectus and under the
heading "Legal Counsel and Auditors" in the Statement of Additional Information.
PRICEWATERHOUSECOOPERS LLP
Kansas City, Missouri
October 29, 1999
EXHIBIT 99.B11-2
EXHIBIT 23(j)(2)
CONSENT OF SUTHERLAND ASBILL & BRENNAN, LLP
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[Sutherland Asbill & Brennan LLP Letterhead]
CONSENT OF SUTHERLAND ASBILL & BRENNAN LLP
We consent to the reference to our firm under the heading
"Legal Counsel and Auditors" in the statement of additional information included
in Post-Effective Amendment No. 32 to the Registration Statement on Form N-1A
for IDEX Mutual Funds (File No. 33-2659). In giving this consent, we do not
admit that we are in the category of persons whose consent is required under
Section 7 of the Securities Act of 1933.
SUTHERLAND ASBILL & BRENNAN LLP
By: /s/ KIMBERLY J. SMITH
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Kimberly J. Smith, Esq.
Washington, D.C.
October 29, 1999
