SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement [ ] Confidential, for Use of Commission Only
[ ] Definitive Additional Materials [as permitted by Rule 14a-6(e) (2)]
[ ] Definitive Proxy Statement
[ ] Soliciting Materal Under Rule 14a-12
IDEX MUTUAL FUNDS
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(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i) and 0-11.
1) Title of each class of securities to which transaction applies:
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pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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IDEX MUTUAL FUNDS
IDEX C.A.S.E. GROWTH
NOTICE TO SHAREHOLDERS DATED SEPTEMBER 25, 2000
Please retain this supplement for reference.
At a meeting of the Board of Trustees (the "Board") of IDEX Mutual Funds on
September 11, 2000, the Board was notified that C.A.S.E. Management, Inc.
(C.A.S.E.), sub-adviser of IDEX C.A.S.E. Growth (the "Fund"), will no longer
serve as sub-adviser to the Fund effective December 1, 2000. As a result,
effective December 1, 2000, C.A.S.E. will terminate the Investment Counsel
(Sub-Advisory) Agreement dated , as amended, between Idex Management, Inc. and
C.A.S.E. and C.A.S.E. will no longer provide investment management services to
the Fund.
The Board has selected Jennison & Associates, LLC ("Jennison") to replace
C.A.S.E. as sub-adviser to the Fund effective December 1, 2000, subject to
approval by the Fund's shareholders. The Board also approved September 12, 2000
as the record date and November 29, 2000 as the date for the meeting of
shareholders of the Fund to consider the transfer of the C.A.S.E. investment
management responsibilities to Jennison with no change in the overall investment
management fees paid by the Fund (the "Proposal"). There is no assurance that
the Fund's shareholders will approve the Proposal.
If the Proposal is approved by shareholders, effective December 1, 2000 the
investment objective of the Fund will also be changed to "seeks long-term growth
of capital." Also effective December 1, 2000 and subject to approval of the
Proposal by shareholders, the Fund will be named IDEX Jennison All Cap Value.
The Board does not anticipate that the changes, individually or in the
aggregate, will result at this time in a material change in the level of
investment risk associated with investment in the Fund.
As a shareholder, if you deem the revised investment objective to be different
from what you deemed appropriate at the time of investment, within 30 days of
the date of this Proxy Statement, you may redeem or exchange your shares without
incurring a redemption or exchange fee. However, should you decide to redeem
fund shares because of the change in objective, you may realize a taxable gain
or loss.
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IDEX MUTUAL FUNDS
570 CARILLON PARKWAY
ST. PETERSBURG, FLORIDA 33716
(TOLL-FREE) 1-888-233-4339
NOTICE OF A SPECIAL MEETING OF SHAREHOLDERS
NOVEMBER 29, 2000
To the shareholders of IDEX C.A.S.E. Growth fund of IDEX Mutual Funds:
Notice is hereby given that a special meeting of the shareholders of the IDEX
C.A.S.E. Growth fund (the "Fund") of IDEX Mutual Funds ("IDEX") will be held at
570 Carillon Parkway, St. Petersburg, Florida 33716, on the 29th day of
November, 2000 at 11:00 a.m., local time, or any adjournment(s) thereof, for the
following purposes:
1. To approve a new Sub-Advisory Agreement between IMI and Jennison
Associates, LLC ("Jennison") with respect to the Fund;
2. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Trustees of IDEX (the "Board") has fixed the close of business on
September 12, 2000 as the record date for the determination of shareholders of
the Fund that are entitled to notice of, and to vote at, the meeting. You are
entitled to vote at the meeting and any adjournment(s) thereof if you owned
shares of the Fund at the close of business on September 12, 2000. If you attend
the meeting, you may vote your shares in person. If you do not expect to attend
the meeting, please complete, date, sign and return the enclosed proxy card in
the enclosed postage paid envelope. If your shares are held in the name of your
brokerage firm (a street name account), please complete your proxy card and
return it to your broker. Your vote is still important. If you mail your vote by
proxy ballot and then decide to attend the meeting, you may change your vote in
person at the meeting.
Each proposal set forth above has been unanimously approved by the Board with
respect to the Fund. The Board recommends that you vote shares that you are
entitled to vote "FOR" each proposal. Subject to shareholder approval of
Proposals No. 1, effective December 1, 2000 the Fund will be named IDEX Jennison
All Cap Value.
We look forward to your participation, and we thank you for your continued
confidence in IDEX.
By Order of the Board of Trustees,
John K. Carter, Secretary
IDEX Mutual Funds
St. Petersburg, Florida
September 25, 2000
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YOUR VOTE IS IMPORTANT
NO MATTER HOW MANY SHARES YOU OWN
Please indicate your voting instructions on the enclosed proxy card, date and
sign the card, and return it in the envelope provided. If you sign, date and
return the proxy card but give no voting instructions, your shares will be voted
"FOR" each proposal presented above.
IDEX WILL FURNISH, WITHOUT CHARGE, A COPY OF ITS MOST RECENT ANNUAL REPORT TO
SHAREHOLDERS UPON REQUEST. ANY SUCH REQUEST SHOULD BE DIRECTED TO IDEX BY
CALLING (888) 233-4339 OR BY WRITING TO IDEX AT P.O. BOX 9015, CLEARWATER, FL
33758-9015.
SHAREHOLDERS OF THE FUND ARE INVITED TO ATTEND THE MEETING IN PERSON. IF YOU DO
NOT EXPECT TO ATTEND THE MEETING, PLEASE INDICATE YOUR VOTING INSTRUCTIONS ON
THE ENCLOSED PROXY CARD, DATE AND SIGN THE PROXY CARD, AND RETURN IT IN THE
ENVELOPE PROVIDED, WHICH IS ADDRESSED FOR YOUR CONVENIENCE AND NEEDS NO POSTAGE
IF MAILED IN THE UNITED STATES.
IN ORDER TO AVOID THE ADDITIONAL EXPENSE AND DELAY OF FURTHER SOLICITATION, WE
ASK THAT YOU MAIL YOUR PROXY PROMPTLY.
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PROXY STATEMENT DATED SEPTEMBER 25, 2000
IDEX MUTUAL FUNDS
570 CARILLON PARKWAY
ST. PETERSBURG, FLORIDA 33716
(TOLL FREE) 1-888-233-4339
This is a proxy statement for the IDEX C.A.S.E. Growth fund (the "Fund") of IDEX
Mutual Funds ("IDEX"), a series mutual fund consisting of several separate
investment funds. This proxy statement is being furnished in connection with the
solicitation of proxies by the Board of Trustees of IDEX (the "Board") to be
used at the IDEX special meeting of shareholders of the Fund or any
adjournment(s) thereof (the "Meeting"). The Meeting will be held on November 29,
2000 at 11:00 a.m., local time, at 570 Carillon Parkway, St. Petersburg, Florida
33716.
The primary purpose of the Meeting is: to permit shareholders of the Fund to
consider a proposed Sub-Advisory Agreement between IMI and Jennison Associates,
LLC ("Jennison") with respect to the Fund (the "Proposed Sub-Advisory
Agreement"), to take effect upon the later to occur of, December 1, 2000 or
obtaining shareholder approval.
The principal solicitation of proxies will be by the mailing of this Proxy
Statement on or about September 25, 2000, but proxies may also be solicited by
telephone and/or in person by representatives of IDEX and regular employees of
Idex Investor Services, Inc., the transfer agent of IDEX, or its affiliate(s),
or an independent proxy solicitation service retained for the Meeting.
Arrangements will be made with brokerage houses and other custodians, nominees,
and fiduciaries to forward proxies and proxy materials to their principals. The
costs of the Meeting, including the preparation and mailing of the notice, Proxy
Statement and proxy, and the solicitation of proxies, including reimbursement to
broker-dealers and others who forward proxy materials to their clients, will be
borne by the shareholders of the Fund.
INTRODUCTION
Currently, IMI acts as investment adviser to the Fund pursuant to an investment
advisory agreement dated November 15, 1995, as amended March 1, 1999 (the
"Current Advisory Agreement"). (Prior to March 1, 1999, InterSecurities, Inc.
("ISI") served as investment adviser to the Fund.) IMI and ISI are affiliates
and under common control. On December 7, 1998, the Board approved having IMI
succeed ISI as investment adviser effective March 1, 1999. Under the Current
Advisory Agreement, IMI is responsible for providing investment management and
supervision services to the Fund. With respect to the Fund, C.A.S.E. Management,
Inc. ("C.A.S.E.") serves as a sub-adviser pursuant to an Investment Counsel
Agreement dated November 15, 1995 (the "Current Sub-Advisory Agreement").
C.A.S.E. has notified IDEX that it is terminating its sub-advisory services to
the Fund. This will result in termination of the Current Sub-Advisory Agreement
effective December 1, 2000. Thereafter, C.A.S.E. will no longer provide
investment management services to the Fund and will not earn any additional
compensation from the Fund. Consequently, beginning December 1, 2000, Jennison
has agreed to serve as the sub-adviser for the Fund, with no change in the
Fund's overall investment management fee schedule, pending shareholder
consideration and approval of the Proposed Sub-Advisory Agreement (see Proposal
No. 1 below). IMI will continue to serve as investment adviser to the Fund.
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Section 15(a) of the Investment Company Act of 1940, as amended (the "1940 Act")
generally provides that no person may serve as an investment adviser to a
registered investment company, such as the Fund, except pursuant to a written
contract that, among other requirements, has been approved by the vote of a
majority of the investment company's outstanding voting securities. As a result,
the Proposed Sub-Advisory Agreement is a new advisory agreement under the 1940
Act that requires shareholder approval. The Board recommends that shareholders
of the Fund VOTE FOR the Proposed Sub-Advisory Agreement.
VOTING INFORMATION
Shareholders of record of the Fund who own shares of beneficial interest at the
close of business on September 12, 2000 (the "Record Date") will be entitled to
vote at the Meeting, including any adjournment(s) thereof, with respect to the
Proposed Sub-Advisory Agreement. With respect to the proposal presented herein,
shareholders are entitled to one vote for each share held and fractional votes
for fractional shares held with no share having cumulative voting rights. With
respect to the Fund, a majority of the shares of beneficial interest outstanding
on the Record Date, represented in person or by proxy, will constitute a quorum
for the Meeting, and therefore must be present for the transaction of business
at the Meeting. Only proxies that are voted, abstentions and "broker non-votes"
(as defined below) will be counted towards establishing a quorum. In the event
that a quorum is not present at the Meeting, or a quorum is present but
sufficient votes to approve the proposals are not received, the persons named as
proxies may propose one or more adjournments of the Meeting to permit further
solicitation of proxies. Any such adjournment will require the affirmative vote
of a majority of the Fund shares represented at the Meeting in person or by
proxy (excluding abstentions and "broker non-votes," as defined below).
The person named as proxies will vote those proxies that they are entitled to
vote FOR the proposal in favor of an adjournment of the Meeting, and will vote
those proxies required to be voted AGAINST any proposal for the Fund against
such adjournment. A shareholder vote may be taken on any proposal prior to any
such adjournment if sufficient votes have been received and it is otherwise
appropriate.
The individuals named as proxies on the enclosed proxy card will vote in
accordance with your directions, if your proxy is received properly executed. If
we receive your proxy, and it is executed properly, but you give no voting
instructions with respect to any proposal, your shares will be voted FOR each
proposal. The duly appointed proxies may, in their discretion, vote upon such
other matters as may properly come before the Meeting.
Abstentions and "broker non-votes" (as defined below) are counted as shares
eligible to vote at the Meeting in determining whether a quorum is present, but
do not represent votes cast with respect to the proposals. "Broker non-votes"
are shares held by a broker or nominee as to which instructions have not been
received from the beneficial owners or persons entitled to vote and the broker
or nominee does not have discretionary voting power.
You may revoke your proxy: (a) at any time prior to its exercise by written
notice of its revocation to the Secretary of IDEX at the above address prior to
the Meeting; (b) by the subsequent execution and return of another proxy prior
to the Meeting; or (c) by being present and voting in person at the Meeting and
giving oral notice of revocation to the Chairman of the Meeting.
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As of the Record Date, the Fund had ____________ outstanding shares of
beneficial interest.
The principal solicitation of proxies will be by the mailing of this Proxy
Statement on or about September 25, 2000, but proxies may also be solicited by
telephone and/or in person by representatives of IDEX and regular employees of
Idex Investor Services, Inc., the transfer agent of IDEX or its affiliate(s),
certain broker-dealers (who may be specifically compensated for such services),
and representatives of any independent proxy solicitation service retained for
the Meeting. Arrangements will be made with brokerage houses and other
custodians, nominees, and fiduciaries to forward proxies and proxy materials to
their principals. The costs of the Meeting, including the preparation and
mailing of the notice, Proxy Statement and proxy, and the solicitation of
proxies, including reimbursement to broker-dealers and others who forward proxy
materials to their clients, will be borne by the shareholders of the Fund.
As the date of the Meeting approaches, certain shareholders of the Fund may
receive a call from a representative of IDEX if IDEX has not yet received their
votes. Authorization to permit the IDEX representative to execute proxies may be
obtained from shareholders by telephonic instructions. Proxies that are obtained
telephonically in the solicitation process will be recorded in accordance with
the procedures set forth below.
If a telephonic proxy is solicited by a representative of IDEX, the
representative is required to ask the shareholder for such shareholder's full
name, address, social security or employer identification number, title (if the
person giving the proxy is authorized to act on behalf of an entity, such as a
corporation), the number of shares owned, and to confirm that the shareholder
has received the Proxy Statement in the mail. If the information solicited
agrees with the information provided to the representative of IDEX, then the
IDEX representative has the responsibility to explain the process, read the
proposal listed on the proxy card, and ask for the shareholder's instructions on
such proposal. Although the IDEX representative is permitted to answer questions
about the solicitation process, he or she is not permitted to recommend to the
shareholder how to vote, other than to read the recommendation set forth in the
Proxy Statement. The IDEX representative will record the shareholder's
instructions on the card. Within 72 hours, IDEX, or its representative
independent firm, will send the shareholder a letter or mailgram to confirm the
shareholder's vote and ask the shareholder to call immediately if the
shareholder's instructions are not correct in the confirmation.
If a shareholder wishes to participate in the Meeting, such shareholder may
still submit the proxy card originally sent with the Proxy Statement or attend
the Meeting in person. Any proxy given by a shareholder, whether in writing or
by telephone, is revocable. A shareholder may revoke the accompanying proxy at
any time prior to its use by filing with IDEX a written revocation or a duly
executed proxy bearing a later date. In addition, any shareholder who attends
the Meeting in person may vote by ballot at the Meeting, thereby canceling any
proxy previously given.
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PROPOSAL NO. 1:
TO APPROVE THE PROPOSED SUB-ADVISORY AGREEMENT
BETWEEN IMI AND JENNISON
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IMI, on behalf of the Fund, has entered into the Current Sub-Advisory Agreement
with C.A.S.E. pursuant to which C.A.S.E. provides investment management services
with respect to assets of the Fund. The shareholders of the Fund are being asked
to approve the Proposed Sub-Advisory Agreement between IMI and Jennison with
respect to the Fund that will take effect upon the later to occur of (a)
obtaining shareholder approval or (b) December 1, 2000. Under the Proposed
Sub-Advisory Agreement, Jennison would become the investment sub-adviser with
respect to the assets of the Fund. The terms and conditions of the Proposed
Sub-Advisory Agreement are substantially identical to the terms and conditions
of the Current Sub-Advisory Agreement. The Proposed Sub-Advisory Agreement
appears as Exhibit B to this Proxy Statement.
JENNISON ASSOCIATES, LLC
Jennison is located at 466 Lexington Avenue, New York, New York 10017. Jennison
Associates, LLC was established as an investment adviser in 1969, and is a
wholly-owned subsidiary of The Prudential Insurance Company of America.
Jennison's current capabilities encompass growth equity, international equity,
opportunistic equity, balanced and fixed income management.
Jennison's investment advisers provide investment management and related
services to other mutual fund portfolios and individual, corporate, and
retirement accounts. The following registered investment company portfolio
advised by Jennison has an investment objective similar to that of the IDEX
C.A.S.E. Growth fund; the table identifies and sets forth the size of such
portfolio as of June 30, 2000, along with the management fee expressed as a
percentage of average net assets for the portfolio. Jennison receives the fees
in exchange for providing investment services, which are comprised of investment
advisory services or administrative services, or both.
<TABLE>
<CAPTION>
------------------------------------------ ----------------------------------- ----------------------------
NAME OF ITS PORTFOLIO/FUND WITH NET ASSETS AS OF ANNUAL MANAGEMENT FEE RATE
SIMILAR INVESTMENT OBJECTIVE JUNE 30, 2000
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<S> <C> <C>
$ ____%
------------------------------------------ ----------------------------------- ----------------------------
</TABLE>
DIRECTORS AND OFFICERS OF JENNISON. The following table sets forth certain
information concerning the principal executive officer and trustees of
Jennison. The address of each of the following persons is
_______________________.
NAME PRINCIPAL OCCUPATION/POSITION WITH JENNISON
--------------------------- ---------------------------------------------------
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No officer or director of IDEX is an officer, employee, director or shareholder
of Jennison. No officer or director of IDEX owns securities or has any other
material direct or indirect interest in Jennison or is a person controlling,
controlled by or under common control with Jennison.
CURRENT SUB-ADVISORY AGREEMENT
C.A.S.E. has served as sub-adviser of the Fund since November 15, 1995. Pursuant
to the Current Sub-Advisory Agreement, IMI contracts with C.A.S.E. for
investment sub-advisory services for the Fund.
Under the terms of the Current Sub-Advisory Agreement, C.A.S.E. provides
investment advisory assistance and portfolio management advice to IMI. Subject
to the review and supervision of IMI and the Board, C.A.S.E. is responsible for
the actual management of the Fund and for making decisions to buy, sell or hold
any particular security, and C.A.S.E. places orders to buy or sell securities on
behalf of the Fund. C.A.S.E. bears all of its expenses in connection with the
performance of its services, such as compensating and furnishing office space
for its officers and employees connected with investment and economic research,
trading and investment management of the Fund.
The Current Sub-Advisory Agreement also stipulates that C.A.S.E. may place
orders with broker-dealers for the purchase or sale of the Fund's portfolio
securities and it is required to obtain quality execution at favorable security
prices. C.A.S.E. may, in its discretion, agree to pay a broker-dealer that
furnishes brokerage or research services a higher commission than that which
might have been charged by another broker-dealer for effecting the same
transactions, if C.A.S.E. determines in good faith that such commission is
reasonable in relation to the brokerage or research services provided.
For its services, C.A.S.E. receives monthly compensation from IMI in the amount
of 50% of the investment management fees received by IMI with respect to the
Fund, less 50% of any amount reimbursed pursuant to the Fund's expense
limitation as set forth in the Fund's prospectus.
During the most recent fiscal year of the Fund, C.A.S.E. received sub-advisory
fees of approximately $______________ for its services under the Current
Sub-Advisory Agreement.
The Current Sub-Advisory Agreement for the Fund was most recently approved by
the Board on March 20, 2000, and was for shareholder approval on November 15,
1995, the date of its initial approval. The Current Sub-Advisory Agreement will
continue in effect from year to year so long as such continuance is specifically
approved annually by the vote of a majority of the Disinterested Trustees of
IDEX, cast in person at a meeting called for the purpose of voting on the
approval of the terms of such renewal, and by either the Board, or the
affirmative vote of a majority of the outstanding voting securities of the Fund
(as that phrase is defined in the 1940 Act). The Current Sub-Advisory Agreement
may be terminated with respect to the Fund at any time, without penalty, by
C.A.S.E., the Board, or by shareholders of the Fund acting by vote of at least a
majority of its outstanding voting
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securities on 60 days' written notice to C.A.S.E. or by C.A.S.E. on 60 days'
written notice to IMI and IDEX. In addition, the Current Sub-Advisory Agreement
terminates automatically upon its assignment. The Current Sub-Advisory Agreement
may be amended with respect to the Fund only with the approval of the
affirmative vote of a majority of the outstanding voting securities of the Fund
and the approval by the vote of a majority of the Disinterested Trustees of
IDEX, cast in person at a meeting called for the purpose of voting on the
approval of such amendment.
JENNISON'S INVESTMENT STRATEGY
Subject to shareholder approval of the Proposal, the investment objective of
IDEX Jennison All Cap Value will be revised to be "seeks long-term growth of
capital." In seeking its investment objective, Jennison will invest at least 65%
of the Fund's total assets in common stocks of established companies, that, in
Jennison's opinion, are under-valued in the market. Jennison attempts to
identify stocks that have good fundamental prospects but are selling at, what it
believes is, a depressed valuation level relative to those prospects. Jennison
will seek to moderate equity risk from time to time by holding cash reserves and
engaging in short sales "against the box." Although Jennison will focus on the
domestic market, it may also invest in stocks of foreign companies. While
Jennison will invest primarily in equity securities, they may also invest in
equity-related securities such as nonconvertible preferred stocks and
convertible securities, and in fixed income securities. Jennison may also use
derivative securities in implementing its strategy.
Jennison describes its investment strategy as an "opportunistic" approach in
making investment decisions. When deciding which stocks to buy, Jennison
emphasizes both projected earning growth and, in its opinion, attractive
valuations. This means characteristics of the stocks they purchase (growth or
value, and mid cap or larger cap) can change depending on where Jennison
believes the best trade-off between earnings growth and attractive valuation may
be at any given time.
As a shareholder, if you deem the revised investment objective to be different
from what you deemed appropriate at the time of investment, within 30 days of
the date of this Proxy Statement, you may redeem or exchange your shares without
incurring a redemption or exchange fee. However, should you decide to redeem
fund shares because of the change in objective, you may realize a taxable gain
or loss.
PROPOSED SUB-ADVISORY AGREEMENT
AND RECOMMENDATION OF THE BOARD OF TRUSTEES
The following description of the Proposed Sub-Advisory Agreement is qualified by
reference to Exhibit A, which consists of the Proposed Sub-Advisory Agreement.
THE PROPOSED SUB-ADVISORY AGREEMENT IS SUBSTANTIALLY IDENTICAL TO THE CURRENT
C.A.S.E. SUB-ADVISORY AGREEMENT EXCEPT THAT: (I) THE EFFECTIVE DATE WILL BE THE
LATER TO OCCUR OF (A) OBTAINING SHAREHOLDER APPROVAL OR (B) DECEMBER 1, 2000;
(II) THE INITIAL TERM WILL END APRIL 30, 2002; (III) JENNISON WILL SERVE AS THE
SUB-ADVISER FOR THE FUND; (IV) JENNISON WILL NOT SHARE IN EXPENSE
REIMBURSEMENTS; AND (V) THE AGREEMENT REFLECTS NON-MATERIAL STYLISTIC AND
CLARIFYING CHANGES. THE PROPOSED SUB-ADVISORY AGREEMENT DOES NOT CONTEMPLATE ANY
CHANGES IN THE NATURE OF SERVICES PREVIOUSLY PROVIDED BY, OR COMPENSATION PAID
TO, C.A.S.E. ASSUMING THAT THE PROPOSED SUB-ADVISORY AGREEMENT IS APPROVED BY
SHAREHOLDERS, JENNISON WILL SERVE AS THE INVESTMENT SUB-ADVISER TO THE FUND
PURSUANT TO THE TERMS OF THE PROPOSED SUB-ADVISORY AGREEMENT UNTIL SUCH TIME AS
THE AGREEMENT IS AMENDED OR TERMINATED IN ACCORDANCE WITH ITS TERMS. IF
JENNISION HAD SERVED AS SUB-ADVISER TO THE FUND UNDER THE TERMS OF THE PROPOSED
SUB-ADVISORY AGREEMENT DURING THE MOST RECENT FISCAL YEAR END FOR THE FUND, THEY
WOULD HAVE RECEIVED $_______ FOR THEIR SUB-ADVISORY SERVICES.
EVALUATION BY THE BOARD
Prior to and at a meeting of the Board on September 11, 2000, the Board,
including the Disinterested Trustees, reviewed information regarding the
Proposed Sub-Advisory Agreement.
In evaluating the Proposed Sub-Advisory Agreement, the Board took into account
that the Current Sub-Advisory Agreement, including the terms relating to the
services to be provided thereunder and the expenses payable by the Fund, is
substantially identical to the Proposed Sub-Advisory Agreement, except for the
dates of execution, effectiveness and termination, Jennison will not share in
the expense reimbursements to the Fund, and that Jennison will serve as the
sub-adviser for the Fund.
The Board also considered the reputation, expertise and resources of Jennison
and its affiliates in the domestic financial market. The Board determined that
the nature and quality of the services required to be performed by the
Sub-Adviser to the Fund requires an entity with more experience in managing such
a fund. They further determined that the change in investment strategy was in
the best interest of the shareholders and may result in better performance for
the Fund.
The Board does not anticipate that the changes, individually or in the
aggregate, will result at this time in a material change in the level of
investment risk associated with investment in the Fund.
After consideration of the factors discussed in the Proposal, and such other
factors and information that the Board deemed relevant, the Board, including the
Disinterested Trustees, unanimously approved the Proposed Sub-Advisory Agreement
and voted to recommend approval of the agreement to the shareholders of the
Fund.
To become effective, the proposed Sub-Advisory Agreement must be approved by a
"vote of the majority of the outstanding securities" of the Fund, as defined in
the 1940 Act. The "vote of a majority of the outstanding voting securities"
means the lesser of the vote of (i) 67% or more of the shares of the Fund
entitled to vote thereon present at the meeting if the holders of more than 50%
of
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such outstanding shares are present in person or represented by proxy; or (ii)
more than 50% of such outstanding shares of the Fund entitled to vote thereon.
In the event that the Proposed Sub-Advisory Agreement is not approved by the
shareholders of the Fund, the Board will consider such alternative measures as
the Board deems prudent and in the best interest of the Fund and its
shareholders.
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THE BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE "FOR" PROPOSAL NO. 1
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SHAREHOLDER PROPOSALS
As a general matter, IDEX does not hold annual meetings of shareholders.
Shareholders wishing to submit proposals to be considered at an upcoming meeting
or for inclusion in a proxy statement for a subsequent shareholders' meeting
should send their written proposals to the Secretary of IDEX Mutual Funds, 570
Carillon Parkway, St. Petersburg, Florida 33716.
ANNUAL REPORTS
IDEX will furnish, without charge, a copy of its most recent annual report to
shareholders upon request. Any such request should be directed to IDEX by
calling (888) 233-4339 or by writing to IDEX at P.O. Box 9015, Clearwater, FL
33758-9015.
ADDITIONAL INFORMATION
The Fund's investment adviser, Idex Management, Inc., its transfer agent, Idex
Investor Services, Inc., and its principal underwriter/distributor,
InterSecurities, Inc., are located at 570 Carillon Parkway, St. Petersburg,
Florida 33716.
OTHER BUSINESS
Management knows of no business to be presented to the Meeting other than the
matters set forth in this Proxy Statement, but should any other matter requiring
a vote of shareholders arise, the proxies will vote thereon according to their
best judgment in the interests of IDEX and its shareholders.
By Order of the Board of Trustees,
John K. Carter, Esq., Secretary
IDEX Mutual Funds
St. Petersburg, Florida
Exhibit A - Proposed Sub-Advisory Agreement
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EXHIBIT A
FORM OF SUB-ADVISORY AGREEMENT
BETWEEN
IDEX MANAGEMENT, INC.
AND
JENNISON ASSOCIATES, LLC
SUB-ADVISORY AGREEMENT, made as of the 1st day of December, 2000,
between IDEX Management, Inc. ("Investment Adviser"), a corporation organized
and existing under the laws of the State of Delaware and Jennison Associates,
LLC, a subsidiary of The Prudential Insurance Company of America
("Sub-Adviser"), an LLC organized and existing under the laws of the State of
__________.
WHEREAS, the Investment Adviser acts as an investment adviser to the
Fund described below pursuant to an investment advisory agreement dated November
15, 1995, as amended March 1, 1999 and December 1, 2000 (the "Advisory
Agreement") with IDEX Mutual Funds ("IDEX"), a Massachusetts business trust
which is engaged in business as an open-end management investment company
registered under the Investment Company Act of 1940 as amended ("1940 Act"); and
WHEREAS, IDEX is authorized to issue shares of IDEX Jennison All Cap
Value (a "Fund"), a separate series of IDEX;
WHEREAS, the Sub-Adviser is engaged principally in the business of
rendering investment advisory services and is registered as an investment
adviser under the Investment Advisers Act of 1940, as amended ("Advisers Act");
and
WHEREAS, the Investment Adviser desires to retain the Sub-Adviser as
sub-adviser to furnish certain investment advisory services to the Investment
Adviser with respect to the Fund and the Sub-Adviser is willing to furnish such
services.
NOW, THEREFORE, in consideration of the premises and mutual promises
herein set forth, the parties hereto agree as follows:
1. APPOINTMENT.
Investment Adviser hereby appoints the Sub-Adviser as its investment
sub-adviser with respect to the Fund for the period and on the terms set forth
in this Agreement. The Sub-Adviser accepts such appointment and agrees to render
the services herein set forth, for the compensation herein provided.
2. DUTIES OF THE SUB-ADVISER.
A. INVESTMENT SUB-ADVISORY SERVICES. Subject to the
supervision of the IDEX Board of Trustees ("Board") and the Investment Adviser,
the Sub-Adviser shall act as the investment sub-adviser and shall supervise and
direct the investments of the Fund in accordance with the Fund's investment
objective, policies, and restrictions as provided in the IDEX Prospectus and
Statement of Additional Information, as currently in effect and as amended or
supplemented from time to time (hereinafter referred to as the "Prospectus"),
and such other limitations as directed by the appropriate officers of the
Investment Adviser or IDEX by notice in writing to the Sub-Adviser. The
Sub-Adviser shall obtain and evaluate such information relating to the economy,
industries, businesses, securities markets, and securities as it may deem
necessary or useful in the discharge of its obligations hereunder and shall
formulate and implement a continuing program for the management of the assets
and resources of the Fund in a manner consistent with the Fund's investment
objective, policies, and restrictions. In furtherance of this duty, the
Sub-Adviser, on behalf of the Fund, is authorized, in its discretion and without
prior consultation with the Fund or the Investment Adviser, to:
(1) buy, sell, exchange, convert, lend, and otherwise trade in
any stocks, bonds and other securities or assets; and
<PAGE>
(2) place orders and negotiate the commissions (if any) for the
execution of transactions in securities or other assets with or
through such brokers, dealers, underwriters or issuers as the
Sub-Adviser may select.
B. ADDITIONAL DUTIES OF SUB-ADVISER. In addition to the above,
Sub-Adviser shall:
(1) furnish continuous investment information, advice and
recommendations to IDEX as to the acquisition, holding or
disposition of any or all of the securities or other assets which
the Fund may own or contemplate acquiring from time to time;
(2) cause its officers to attend meetings of IDEX and furnish
oral or written reports, as IDEX may reasonably require, in order
to keep IDEX and its officers and Board fully informed as to the
condition of the investment securities of the Fund, the
investment recommendations of the Sub-Adviser, and the investment
considerations which have given rise to those recommendations;
and
(3) furnish such statistical and analytical information and
reports as may reasonably be required by IDEX from time to time.
C. FURTHER DUTIES OF SUB-ADVISER. In all matters relating to
the performance of this Agreement, the Sub-Adviser shall act in conformity with
the IDEX Restatement of Declaration of Trust and By-Laws, as each may be amended
or supplemented, and currently effective Registration Statement (as defined
below) and with the written instructions and directions of the Board and the
Investment Adviser, and shall comply with the requirements of the 1940 Act, the
Advisers Act, the rules thereunder, and all other applicable federal and state
laws and regulations.
3. COMPENSATION.
For the services provided and the expenses assumed by the Sub-Adviser
pursuant to this Agreement, the Sub-Adviser shall receive monthly, an investment
management fee as specified in Schedule A of this Agreement. If this Agreement
becomes effective or terminates before the end of any month, the investment
management fee for the period from the effective date to the end of such month
or from the beginning of such month to the date of termination, as the case may
be, shall be pro-rated according to the pro-ration which such period bears to
the full month in which such effectiveness or termination occurs.
4. DUTIES OF THE INVESTMENT ADVISER.
A. The Investment Adviser shall continue to have
responsibility for all services to be provided to the Fund pursuant to the
Advisory Agreement and shall oversee and review the Sub-Adviser's performance of
its duties under this Agreement.
B. The Investment Adviser has furnished the Sub-Adviser with
copies of each of the following documents and will furnish to the Sub-Adviser at
its principal office all future amendments and supplements to such documents, if
any, as soon as practicable after such documents become available:
(1) The IDEX Restatement of Declaration of Trust, as filed
with the State of Massachusetts, as in effect on the date
hereof and as amended from time to time ("Trust");
(2) The By-Laws of IDEX as in effect on the date hereof and as
amended from time to time ("By-Laws");
(3) Certified resolutions of the Board of IDEX authorizing the
appointment of the Investment Adviser and the Sub-Adviser and
approving the form of the Advisory Agreement and this
Agreement;
(4) The IDEX Registration Statement under the 1940 Act and the
Securities Act of 1933, as
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<PAGE>
amended, on Form N-1A, as filed with the Securities and
Exchange Commission ("SEC") relating to the Fund and its
shares and all amendments thereto ("Registration Statement");
(5) The Notification of Registration of IDEX under the 1940
Act on Form N-8A as filed with the SEC and any amendments
thereto;
(6) The IDEX Prospectus (as defined above); and
(7) A certified copy of any publicly available financial
statement or report prepared for IDEX by certified or
independent public accountants, and copies of any financial
statements or reports made by the Fund to its shareholders or
to any governmental body or securities exchange.
The Investment Adviser shall furnish the Sub-Adviser with any further
documents, materials or information that the Sub-Adviser may reasonably request
to enable it to perform its duties pursuant to this Agreement.
C. During the term of this Agreement, the Investment Adviser
shall furnish to the Sub-Adviser at its principal office all prospectuses, proxy
statements, reports to shareholders, sales literature, or other material
prepared for distribution to shareholders of the Fund or the public, which refer
to the Sub-Adviser or investment companies or other advisory accounts advised or
sponsored by the Sub-Adviser or investment companies or other advisory accounts
advised or sponsored by the Sub-Adviser in any way, prior to the use thereof,
and the Investment Adviser shall not use any such materials if the Sub-Adviser
reasonably objects in writing fifteen business days (or such other time as may
be mutually agreed) after receipt thereof.
5. BROKERAGE.
A. The Sub-Adviser agrees that, in placing orders with
broker-dealers for the purchase or sale of portfolio securities, it shall
attempt to obtain quality execution at favorable security prices (best price and
execution); provided that, on behalf of a Fund, the Sub-Adviser may, in its
discretion, agree to pay a broker-dealer that furnishes brokerage or research
services as such services are defined under Section 28(e) of the Securities
Exchange Act of 1934, as amended ("1934 Act"), a higher commission than that
which might have been charged by another broker-dealer for effecting the same
transactions, if the Sub-Adviser determines in good faith that such commission
is reasonable in relation to the brokerage and research services provided by the
broker-dealer, viewed in terms of either that particular transaction or the
overall responsibilities of the Sub-Adviser with respect to the accounts as to
which it exercises investment discretion (as such term is defined under Section
3(a)(35) of the 1934 Act). In no instance will portfolio securities be purchased
from or sold to the Sub-Adviser, or any affiliated person thereof, except in
accordance with the federal securities laws and the rule and regulations
thereunder.
B. On occasions when the Sub-Adviser deems the purchase or
sale of a security to be in the best interest of the Fund, as well as other
clients of the Sub-Adviser, the Sub-Adviser, to the extent permitted by
applicable laws and regulations, may, but shall be under no obligation to,
aggregate the securities to be purchased or sold to attempt to obtain a more
favorable price or lower brokerage commissions and efficient execution. In such
event, allocation of the securities so purchased or sold, as well as the
expenses incurred in the transaction, will be made by the Sub-Adviser in the
manner the Sub-Adviser considers to be the most equitable and consistent with
its fiduciary obligations to IDEX and to its other clients.
C. In addition to the foregoing, the Sub-Adviser agrees that
orders with broker-dealers for the purchase or sale of portfolio securities by
the Fund shall be placed in accordance with the standards set forth in the
Advisory Agreement.
6. OWNERSHIP OF RECORDS.
The Sub-Adviser shall maintain all books and records required to be
maintained by the Sub-Adviser pursuant to the 1940 Act and the rules and
regulations promulgated thereunder with respect to transactions on behalf of
IDEX. In compliance with the requirements of Rule 31a-3 under the 1940 Act, the
Sub-Adviser hereby agrees: (i) that all
A-3
<PAGE>
records that it maintains for IDEX are the property of IDEX, (ii) to preserve
for the periods prescribed by Rule 31a-2 under the 1940 Act any records that it
maintains for IDEX and that are required to be maintained by Rule 31a-1 under
the 1940 Act and (iii) agrees to surrender promptly to IDEX any records that it
maintains for IDEX upon request by IDEX; provided, however, the Sub-Adviser may
retain copies of such records.
7. REPORTS.
The Sub-Adviser shall furnish to the Board or the Investment Adviser,
or both, as appropriate, such information, reports, evaluations, analyses and
opinions as the Sub-Adviser and the Board or the Investment Adviser, as
appropriate, may mutually agree upon from time to time.
8. SERVICES TO OTHERS CLIENTS.
Nothing contained in this Agreement shall limit or restrict (i) the
freedom of the Sub-Adviser, or any affiliated person thereof, to render
investment management and corporate administrative services to other investment
companies, to act as investment manager or investment counselor to other
persons, firms, or corporations, or to engage in any other business activities,
or (ii) the right of any director, officer, or employee of the Sub-Adviser, who
may also be a director, officer, or employee of IDEX, to engage in any other
business or to devote his or her time and attention in part to the management or
other aspects of any other business, whether of a similar nature or a dissimilar
nature.
9. SUB-ADVISER'S USE OF THE SERVICES OF OTHERS.
The Sub-Adviser may (at its cost except as contemplated by Paragraph 5
of this Agreement) employ, retain, or otherwise avail itself of the services or
facilities of other persons or organizations for the purpose of obtaining such
statistical and other factual information, such advice regarding economic
factors and trends, such advice as to occasional transactions in specific
securities, or such other information, advice, or assistance as the Sub-Adviser
may deem necessary, appropriate, or convenient for the discharge of its
obligations hereunder or otherwise helpful to the Sub-Adviser, as appropriate,
or in the discharge of Sub-Adviser's overall responsibilities with respect to
the other accounts that it serves as investment manager or counselor, provided
that the Sub-Adviser shall at all times retain responsibility for making
investment recommendations with respect to the Fund.
10. INDEMNIFICATION.
The Sub-Adviser shall exercise its best judgment in rendering the
services in accordance with the terms of this Agreement. The Sub-Adviser shall
not be liable for any error of judgment or mistake of law or for any act or
omission or any loss suffered by the Fund in connection with the matters to
which this Agreement relates, provided that nothing herein shall be deemed to
protect or purport to protect the Sub-Adviser against any liability to the Fund
or its shareholders, or the Adviser, to which the Sub-Adviser would otherwise be
subject by reason of willful misfeasance, bad faith or gross negligence on its
part in the performance of its duties or from reckless disregard by it of its
obligations and duties under this Agreement ("disabling conduct"). The Adviser
will indemnify the Sub-Adviser against, and hold harmless from, any and all
losses, claims, damages, liabilities or expenses (including reasonable counsel
fees and expenses), including any amount paid in satisfaction of judgments, in
compromise or as fines or penalties, not resulting from disabling conduct by the
Sub-Adviser. The Sub-Adviser shall be entitled to advances from the Adviser for
payment of reasonable expenses incurred in connection with the matter as to
which it is seeking indemnification in the manner and to the fullest extent
permissible under law.
11. REPRESENTATIONS OF SUB-ADVISER.
The Sub-Adviser represents, warrants, and agrees as follows:
A. The Sub-Adviser: (i) is registered as an investment adviser
under the Advisers Act and will continue to be so registered for so long as this
Agreement remains in effect; (ii) is not prohibited by the 1940 Act or the
Advisers Act from performing the services contemplated by this Agreement; (iii)
has met, and will continue to meet for
A-4
<PAGE>
so long as this Agreement remains in effect, any applicable federal or state
requirements, or the applicable requirements of any regulatory or industry
self-regulatory agency, necessary to be met in order to perform the services
contemplated by this Agreement; (iv) has the authority to enter into and perform
the services contemplated by this Agreement; and (v) will immediately notify the
Investment Adviser of the occurrence of any event that would disqualify the
Sub-Adviser from serving as an investment adviser of an investment company
pursuant to Section 9 (a) of the 1940 Act or otherwise.
B. The Sub-Adviser has adopted a written code of ethics
complying with the requirements of Rule 17j-1 under the 1940 Act and, if it has
not already done so, will provide the Investment Adviser and IDEX with a copy of
such code of ethics, together with evidence of its adoption.
C. The Sub-Adviser has provided the Investment Adviser and
IDEX with a copy of its Form ADV as most recently filed with the SEC and will,
promptly after filing any amendment to its Form ADV with the SEC, furnish a copy
of such amendment to the Investment Adviser.
12. TERM OF AGREEMENT.
This Agreement shall become effective upon the date first above
written, provided that this Agreement shall not take effect unless it has first
been approved (i) by a vote of a majority of those Directors of IDEX who are not
parties to this Agreement or interested persons of any such party, cast in
person at a meeting called for the purpose of voting on such approval, and (ii)
by vote of a majority of the Fund's outstanding voting securities. Unless sooner
terminated as provided herein, this Agreement shall continue in effect for an
initial term ending April 30, 2002. Thereafter, this Agreement shall continue in
effect from year to year, with respect to the Fund, subject to the termination
provisions and all other terms and conditions hereof, so long as such
continuation shall be specifically approved at least annually (a) by either the
Board, or by vote of a majority of the outstanding voting securities of the
Fund; and (b) in either event, by the vote, cast in person at a meeting called
for the purpose of voting on such approval, of a majority of the Trustees of
IDEX who are not parties to this Agreement or interested persons of any such
party. The Sub-Adviser shall furnish to IDEX, promptly upon its request such
information as may reasonably be necessary to evaluate the terms of this
Agreement or any extension, renewal, or amendment hereof.
13. TERMINATION OF AGREEMENT.
Notwithstanding the foregoing, this Agreement may be terminated at any
time, without the payment of any penalty, by vote of the Board or by a vote of a
majority of the outstanding voting securities of the Fund on at least 60 days'
prior written notice to the Sub-Adviser. This Agreement may also be terminated
by the Investment Adviser: (i) on at least 60 days' prior written notice to the
Sub-Adviser, without the payment of any penalty; or (ii) if the Sub-Adviser
becomes unable to discharge its duties and obligations under this Agreement. The
Sub-Adviser may terminate this Agreement at any time, or preclude its renewal
without the payment of any penalty, on at least 60 days' prior notice to the
Investment Adviser. This Agreement shall terminate automatically in the event of
its assignment or upon termination of the Advisory Agreement.
A-5
<PAGE>
14. AMENDMENT OF AGREEMENT.
No provision of this Agreement may be changed, waived, discharged, or
terminated orally, but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge, or termination is
sought, and no amendment of this Agreement shall be effective until approved by
vote of a majority of the Fund's outstanding voting securities and a vote of a
majority of those Trustees of IDEX who are not parties to this Agreement or
interested persons of any such party, cast in person at a meeting called for the
purpose of voting on such amendment, unless otherwise permitted in accordance
with the 1940 Act.
15. MISCELLANEOUS.
A. GOVERNING LAW. This Agreement shall be construed in
accordance with the laws of the State of Massachusetts without giving effect to
the conflicts of laws principles thereof, and the 1940 Act. To the extent that
the applicable laws of the State of Massachusetts conflict with the applicable
provisions of the 1940 Act, the latter shall control.
B. CAPTIONS. The captions contained in this Agreement are
included for convenience of reference only and in no way define or delimit any
of the provisions hereof or otherwise affect their construction or effect.
C. ENTIRE AGREEMENT. This Agreement represents the entire
agreement and understanding of the parties hereto and shall supersede any prior
agreements between the parties relating to the subject matter hereof, and all
such prior agreements shall be deemed terminated upon the effectiveness of this
Agreement.
D. INTERPRETATION. Nothing herein contained shall be deemed to
require IDEX to take any action contrary to its Trust or By-Laws, or any
applicable statutory or regulatory requirement to which it is subject or by
which it is bound, or to relieve or deprive the Board of its responsibility for
and control of the conduct of the affairs of IDEX.
E. DEFINITIONS. Any question of interpretation of any term or
provision of this Agreement having a counterpart in or otherwise derived from a
term or provision of the 1940 Act shall be resolved by reference to such term or
provision of the 1940 Act and to interpretations thereof, if any, by the United
States courts or, in the absence of any controlling decision of any such court,
by rules, regulations, or orders of the SEC validly issued pursuant to the 1940
Act. As used in this Agreement, the terms "majority of the outstanding voting
securities," "affiliated person," "interested person," "assignment," "broker,"
"investment adviser," "net assets," "sale," "sell," and "security" shall have
the same meaning as such terms have in the 1940 Act, subject to such exemption
as may be granted by the SEC by any rule, regulation, or order. Where the effect
of a requirement of the federal securities laws reflected in any provision of
this Agreement is made less restrictive by a rule, regulation, or order of the
SEC, whether of special or general application, such provision shall be deemed
to incorporate the effect of such rule, regulation, or order, unless the
Investment Adviser and the Sub-Adviser agree to the contrary.
A-6
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their duly authorized signatories as of the date and year first
above written.
Attest: IDEX MANAGEMENT, INC.
______________________________ By: _______________________________
John K. Carter Name: Thomas R. Moriarty
Vice President, Counsel, Title: Director, President
Compliance Officer and Chief Executive Officer
And Assistant Secretary
Attest: Jennison Associates, LLC
______________________________ By: _______________________________
Name:
Title:
A-7
<PAGE>
Schedule A
<TABLE>
<CAPTION>
------------------------------------------ --------------------------------------- --------------------------
ANNUAL PERCENTAGE OF
FUND MONTHLY AVERAGE DAILY TERMINATION
NET ASSETS DATE
------------------------------------------ --------------------------------------- --------------------------
<S> <C> <C>
.40% of the first $500 million of the
Fund's average daily net assets; 0.35%
IDEX JENNISON ALL CAP VALUE of the Fund's average daily net assets April 30, 2002
over $500 million
------------------------------------------ --------------------------------------- --------------------------
</TABLE>
A-8
<PAGE>
FORM OF PROXY CARD
IDEX MUTUAL FUNDS
570 Carillon Parkway
St. Petersburg, Florida 33716
The undersigned hereby appoints Thomas R. Moriarty and John K. Carter,
or any of them, as proxies each with the power to appoint his substitute, and
hereby authorizes them to represent and to vote, as designated below, all shares
of the IDEX C.A.S.E. Growth fund (the "fund") of IDEX Mutual Funds ("IDEX"),
that the undersigned is entitled to vote at the Special Meeting of Shareholders
to be held Wednesday, November 29, 2000 at 11:00 a.m. Eastern Standard Time, at
570 Carillon Parkway, St. Petersburg, Florida 33716, and at any and all
adjournments thereof, with respect to the matters set forth below and described
in the Notice of Meeting and Proxy Statement dated September 25, 2000, receipt
of which is hereby acknowledged:
(1) To approve a Proposed Sub-Advisory Agreement between Idex
Management, Inc. and Jennison & Associates, LLC with respect
to the IDEX C.A.S.E. Growth fund.
____ For ____ Against ____ Abstain
(2) In the discretion of IDEX, transact such other business as may
properly come before the meeting or any adjournments thereof.
THIS PROXY IS SUBMITTED ON BEHALF OF
THE BOARD OF TRUSTEES OF IDEX MUTUAL FUNDS
I hereby revoke any and all proxies with respect to such shares, if
any, previously given by me. I acknowledge receipt of the Proxy Statement dated
September 25, 2000. This instruction will be voted as specified. If no
specification is made, this instruction will be voted "FOR" each proposal.
______________________________ _____________
Authorized signature Date
