<PAGE> 1
IDEX FUND 3
SEMIANNUAL REPORT
April 30, 1995
[LOGO]
IDEX MUTUAL FUNDS
<PAGE> 2
Fellow Shareholders:
What a difference a year makes! It's been a pleasant change, these first
months of 1995. In fact, the financial markets have seemingly gone through a
complete transformation from what was an often uncomfortable 1994. Investors
somehow have cast aside the continued instability in Mexico, the collapse of
Barings Securities, a free-falling dollar, and congressional failure to pass
a balanced budget amendment, focusing instead on a healthy domestic economy.
More importantly, most liked what they saw. It seems, at least for the moment,
the Federal Reserve is on target in its efforts to engineer the fabled "soft
landing." Indeed, the Fed's tightening spree seems to be slowing the
too-vigorous pace of U.S. economic expansion at last. Moreover, inflation has
apparently remained in check while corporate earnings have continued to grow
robustly. This view, along with falling intermediate and long-term interest
rates, has helped propel the stock market to record heights, with the Dow
Industrial Average rumbling past one century mark after another. Away from
home, however, things were not as sweet. Even as U.S. stock funds surged to
their strongest quarterly gain in two years, financial markets abroad stumbled
and fell, sometimes badly. Disillusioned by political upheaval and economic
gridlock across the globe, investors turned their backs on markets they once
embraced. And, unfortunately, far too many are probably
questioning--wrongfully so--the wisdom of international diversification of
their portfolios. The rapid moves of the first quarter have come, to say the
least, faster and sooner than most anticipated. Money managers and their
particular investing styles have fared quite differently in this market. On the
following pages, Tom Marsico, the IDEX Fund 3 portfolio manager, discusses how
he has responded to this period's dramatic changes, where he's invested
[PHOTO]
JOHN R. KENNEY
Chairman of the Board
[PHOTO]
G. JOHN HURLEY
President and
Chief Executive Officer
[LOGO]
Where Time Is
On Your Side.
<PAGE> 3
the Fund's assets, and why. We encourage you to review these comments
to help you better understand your investment and its performance. Here, too,
you will find the pertinent data for the period, including new graphics on the
major equity positions and industry weightings of the Fund. Together, the Top
Five Equity Holdings graphic and the industry pie chart will give you further
insight into some of the most important factors that are driving your
investment's performance. You will also see that our industry classifications
have changed to a more standardized industry listing: The Dow Jones World
Industry Groups. Major financial publications like The Wall Street Journal use
these same classifications when discussing particular industry performance.
With all that's gone on in the markets recently, this may be a good time to
review your goals and holdings to ensure your investments reflect your current
financial picture, especially with an eye towards prevailing market conditions.
And it's important to remember that no matter how gratifying the results of
this first quarter may have been, they are only short-term. There will almost
surely come other periods that will be less satisfying. But the splendid
turnaround of the first quarter of 1995 reminds us once again that the greatest
risk in investing is quite simply not to be invested.
Just as we reminded you a year ago when the financial markets were so
decidedly negative, IDEX Fund 3 is intended for long-term investments and is
managed with long-term results in mind. Our commitment remains to provide you
with solid, well-managed investment products; our goal continues to be to
provide you with superior service. We respect your personal task of financial
planning and greatly appreciate the opportunity to help.
Sincerely yours,
John R. Kenney
G. John Hurley
[GRAPHIC]
<PAGE> 4
The U.S. markets enjoyed a powerful rally in the first quarter of 1995,
as the U.S. economy began to show signs of slowing from the robust pace it set
in 1994. Long and intermediate interest rates softened, and soon stocks
followed bonds by moving higher.
For the six-month period ended April 30, 1995, IDEX Fund 3 shares had a
total return of 3.55%, while the Standard & Poor's 500 Index for the same period
advanced 10.50%. While many of IDEX Fund 3 holdings put in very good
performances, we missed the rally in major integrated oil stocks, which are a
significant segment of the S&P 500. Our lack of participation in this group was
the primary reason IDEX Fund 3 underper-formed its benchmark. I believe the
long-term prospects for the oil industry remain very weak, however, because the
industry is at a competitive disadvantage with countries that have lower
finding costs. I consider the current strength in that group to be
unsustainable.
Although we have already enjoyed an excellent rally this year, I believe
that the environment for stocks is still very positive, especially for large
growth stocks. The economy is moderating to more sustainable levels, while
inflation remains benign. Most price increases at the raw materials and
feedstock end of the production pipeline have not been passed through to
finished goods at the retail end. One reason is that manufacturing and
administrative operations are now much more efficient in many industries, and
costs have been dramatically reduced. A second cause is fierce international
competition, which has not only held down the price of domestic goods, but has
also kept import prices in check despite a historic decline in the dollar.
In fact, many of IDEX Fund 3's large multinational holdings are benefiting
from the weak dollar, which has made their products less expensive and more
competitive abroad. I expect that Pfizer, a major pharmaceutical developer and
manufacturer, will take much of the dollar's weakness directly to the bottom
line, as will Coca-Cola and Microsoft. All three stocks posted substantial
gains during the quarter, as investors realized how these companies' strong
competitive positions would be enhanced by the dollar's decline. Other stocks
that gained included Merrill Lynch and Hewlett Packard, which dominates the
desk-top printer market and is rapidly expanding its position in the personal
computer market. A number of the financial stocks in the Fund, such as Federal
National Mortgage Association and
[GRAPHIC]
<PAGE> 5
Federal Home Loan Mortgage Corporation, were helped by declining
interest rates. And finally, Intel, a computer chip manufacturer, and Texas
Instruments, a designer and manufacturer of electronic circuits and
semi-conductors, appreciated along with a strong technology group. Technology
continued to lead the market during the first quarter of this year just as it
did through much of 1994.
Several positions were sold at a profit during the period. Among these
stocks were Compaq Computer and Chrysler. Lone Star Steakhouse was cut but
continued to rise after IDEX Fund 3's position had been eliminated.
IDEX Fund 3's technology exposure has been increased, although I have
been careful not to become overly concentrated in this area. Disney, whose
latest hit, "The Lion King", is selling far above expectations, was also added
to IDEX Fund 3's investments. Disney has a number of other exciting films in
the pipeline and has improved the ride offerings at its Florida and California
theme parks. Paper stock Georgia Pacific was also added to IDEX Fund 3's
holdings. The long-term demand for paper is well ahead of supply, and the
current earnings cycles of these companies should be much longer and more
enduring than previous cycles.
This quarter saw the first significant move by investors away from
cyclical stocks into traditional growth companies. I believe this trend has
much further to go as economic growth moderates and the weak dollar makes many
growth companies more competitive overseas. If the dollar declines too much, of
course, it will harm our trading partners and may lead to price increases in
imported goods, but at present that threat seems to be muted. The turmoil in
Latin America, which we were able to avoid, is also cautionary. I do not see an
early resolution to the current uncertainty in that region.
Overall, however, I am very optimistic, and expect stocks to continue
their strong performance against a backdrop of economic moderation and interest
rate stability.
/s/ Thomas F. Marsico
Thomas F. Marsico
IDEX Fund 3 Manager
<PAGE> 6
[GRAPH]
IDEX Fund 3
Average Annual Total Return**
1 Year Ended
4/30/95........................ (3.02)%
5 Years Ended
4/30/95........................ 9.95%
Life of the Fund
04/20/87 to 4/30/95............ 11.10%
IDEX Fund 3
Total Return**
Life of the Fund
04/20/87 to 4/30/95............134.29%
Standard & Poor's
500 Stock Index
Average Annual Total Return*
1 Year Ended
4/30/95........................ 17.40%
5 Years Ended
4/30/95........................ 10.50%
Life of IDEX Fund 3
04/20/87 to 4/30/95............ 11.10%
* The Standard & Poor's 500 Stock Index is an unmanaged index used as a general
measure of market performance. Calculations assume dividends and capital gains
are reinvested and do not include any managerial expenses.
** IDEX Fund 3's performance reflect the maximum sales charge of 8.5%, with
dividends and capital gains paid in additional shares. Investment return and
principal value will fluctuate; shares when redeemed may be worth more or less
than their original cost. Past performance does not guarantee future results.
This material must be preceded or accompanied by the Fund's current prospectus
which includes information about the sales commissions, objectives, policies,
and other facts about the Fund.
<PAGE> 7
[GRAPH]
<TABLE>
<S> <C>
Basic Materials . . . . . . . . . . 2.5%
Consumer Cyclical . . . . . . . . . 7.9%
Consumer Non-Cyclical . . . . . . . 11.5%
Financial . . . . . . . . . . . . . 14.3%
Industrial . . . . . . . . . . . . 1.0%
Technology . . . . . . . . . . . . 45.9%
Long Term U.S. Gov't Securities . . 0.7%
Short-term Securities . . . . . . . 15.2%
Other . . . . . . . . . . . . . . . 1.0%
</TABLE>
Top Five Equity Holdings
April 30, 1995
MICROSOFT CORPORATION
- - - Microsoft Corp., founded in 1975, is the worldwide leader in software
personal computers.
- - - Microsoft currently is serving as a corporate supporter for the White
House Conference on Small Business. Small businesses generally produce
twice as many innovations per employee as large firms. Microsoft
believes that technology is key to that innovation.
SAP AG VORZUG PFD.
- - - SAP AG Vorzug, a German-based business software company, has experienced
a profit increase of 92% in 1994 after two years of moderate growth
in 1992 and 1993.
- - - SAP AG Vorzug attributes its recent growth to its great emphasis on R&D.
Forty of the fifty largest U.S. companies in chemicals-pharmaceuticals
use SAP software.
- - - SAP AG Vorzug foreign sales exceeded German sales in 1994 for the first
time in corporate history, due largely to an increase in sales of 151% in
the U.S. market. Some notable customers include IBM, Apple, Intel,
Compaq and Hewlett Packard.
FIRST DATA CORPORATION
- - - First Data Corporation provides high-quality, high-volume information
processing and related services, including bankcard processing services,
payment instrument transactions processing and information management and
data processing for the cable industry.
- - - First Data recently signed an agreement to handle all credit card software
systems and backoffice operations, including account-level and
transaction-level processing for PNC Bank, one of the largest banking
organizations in the U.S.
- - - First Data and CellTel Data recently signed an agreement to market a new
service which allows credit and debit transactions using cellular rather
than traditional telephone line transmission.
INTEL CORPORATION
- - - Intel Corporation designs, develops, produces and markets advanced
microcomputer components and related products.
- - - On March 27, 1995, Intel introduced a new higher performance version of
its Pentium processor which uses a 0.35 micron process technology (a
micron is approximately 1/100th the diameter of a human hair). This new
technology translates into higher performance, higher reliability and
lower cost products for computer users.
HEWLETT-PACKARD COMPANY
- - - Hewlett-Packard Company makes computer systems, peripheral products,
analysis instruments and computation instruments.
- - - Hewlett-Packard Company said it cut prices by up to 16% on its Omnibook
personal computers, by up to 11% on Vectra desktop personal computers and
as much as 13% on its Netserver server lines. The company credits its
increasingly efficient manufacturing and broader distribution channels have
enabled it to pass on significant savings to customers.
<PAGE> 8
APRIL 30, 1995
- - --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (UNAUDITED)
- - --------------------------------------------------------------------------------
IDEX FUND 3
<TABLE>
<CAPTION>
- - --------------------------------------------------------------- --------------------------------------------------------------
SHARES DESCRIPTION VALUE SHARES DESCRIPTION VALUE
- - --------------------------------------------------------------- --------------------------------------------------------------
<S> <C> <C>
COMMON STOCK (78.9%) TECHNOLOGY (41.3%)
BASIC MATERIALS (2.5%) Aerospace/Defense (0.3%)
FOREST PRODUCTS 8,200 Lockheed Martin Corp. $ 473,550
43,175 Georgia Pacific Corp. $ 3,427,016 -------------
---------------
BIOTECHNOLOGY (2.2%)
CONSUMER CYCLICAL (8.0%) 42,500 Amgen, Inc. * 3,089,219
-------------
AUTO MANUFACTURERS (1.1%)
34,250 General Motors Corp. Class E 1,481,313 COMMUNICATIONS (13.5%)
---------------
35,650 America Online, Inc. * 1,653,269
BROADCASTING (0.7%) 16,025 Ascend Communications, Inc. * 1,233,925
23,780 Infinity Broadcasting Corp. Class A * 1,013,623 18,575 Cascade Communications Corp. * 1,337,400
---------------
49,000 Cisco Systems, Inc. * 1,953,875
ENTERTAINMENT (2.6%) 42,050 DSC Communications Corp. * 1,555,850
25,550 Circus Circus Enterprises, Inc. * 846,344 42,750 L.M. Ericsson Telephone Company Class B # 2,866,922
28,675 Eastman Kodak Company 1,648,812 41,710 General Instrument Corp. * 1,423,354
21,225 Walt Disney Company 1,175,334 15,550 Motorola, Inc. 884,406
---------------
3,670,490 24,690 Northern Telecom, Ltd. 898,099
---------------
RETAILERS-SPECIALTY (3.6%) 18,975 PictureTel Corp. * 808,809
170,190 Lowe's Companies, Inc. 4,914,236 50,825 U.S. Robotics Corp. 4,027,881
--------------- -------------
18,643,790
-------------
CONSUMER NON-CYCLICAL (11.6%) COMPUTERS (6.9%)
BEVERAGES (4.1%) 40,900 Digital Equipment Corp. * 1,886,512
73,075 Coca-Cola Company 4,247,484 85,050 Hewlett-Packard Company 5,623,931
35,250 PepsiCo, Inc. 1,467,281 56,450 StrataCom, Inc. * 2,060,425
--------------- -------------
5,714,765 9,570,868
--------------- -------------
HEALTH CARE (2.5%) DIVERSIFIED (5.6%)
11,575 Genzyme Corp. * 491,938 88,500 Philips Electronics nv # 3,407,250
67,325 Oxford Healthcare Plans, Inc. * 2,802,403 40,860 Texas Instruments, Inc. 4,331,160
-------------
6,100 United Healthcare Corp. 221,125 7,738,410
--------------- -------------
3,515,466 INDUSTRIAL (0.2%)
---------------
HOUSEHOLD PRODUCTS (1.3%) 9,050 Spectrian Corp. * 263,581
-------------
9,525 Black and Decker Corp. 285,750
32,925 Duracell International, Inc. 1,448,700 SEMICONDUCTORS (4.8%)
---------------
1,734,450 49,500 Intel Corp. 5,067,563
---------------
PHARMACEUTICALS (3.7%) 23,675 LSI Logic Corp. * 1,577,347
-------------
35,298 Astra AB A-Free + 1,027,232 6,644,910
-------------
47,375 Pfizer, Inc. 4,103,859 SOFTWARE (7.8%)
---------------
5,131,091 13,075 Autodesk, Inc. 445,367
---------------
FINANCIAL (14.3%) 16,200 Ceridan Corp. * 558,900
BANKS (2.9%) 31,575 Informix Corp. * 1,243,266
43,550 Citicorp 2,019,631 30,800 LEGENT Corp. * 839,300
26,525 First Interstate Bancorp 2,039,109 83,450 Microsoft Corp. * 6,822,038
---------------
4,058,740 29,450 Oracle Systems Corp. * 898,225
--------------- -------------
DIVERSIFIED (8.5%) 10,807,096
-------------
206,025 Grupo Financiero Inbursa SA Class C + 393,085 TOTAL COMMON STOCK (COST $87,924,083) 109,263,356
-------------
49,675 Federal Home Loan Mortgage Corp. 3,241,294
24,035 Federal National Mortgage Association 2,121,089 CONVERTIBLE PREFERRED STOCK (2.1%)
106,550 First Data Corp. 5,993,437 TECHNOLOGY
---------------
11,748,905 DIVERSIFIED
---------------
SECURITIES BROKERS (2.9%) 53,500 Nokia AB OY # 2,193,500
87,550 Merrill Lynch and Company, Inc. 3,983,525 15,748 Nokia AB OY Cumulative + 641,496
--------------- -------------
2,834,996
-------------
INDUSTRIAL (1.2%) NON-CONVERTIBLE PREFERRED STOCK (4.5%)
CONTAINERS AND PACKAGING (1.0%) TECHNOLOGY
37,255 Liqui-Box Corp. 1,322,553 SOFTWARE
---------------
6,400 SAP AG Vorzug + 6,269,313
-------------
ELECTRONIC COMPONENTS AND EQUIPMENT (0.2%) TOTAL PREFERRED STOCK (COST $6,318,660) 9,104,309
8,175 Honeywell, Inc. 315,759 -------------
---------------
</TABLE>
See Notes to Schedule of Investments at page 2.
-1-
<PAGE> 9
APRIL 30, 1995
- - --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (UNAUDITED)
- - --------------------------------------------------------------------------------
IDEX FUND 3
<TABLE>
<CAPTION>
- - --------------------------------------------------------------- ------------------------------------------------------------------
PRINCIPAL DESCRIPTION VALUE NOTES TO SCHEDULE OF INVESTMENTS
- - --------------------------------------------------------------- ------------------------------------------------------------------
<S> <C>
COMMERCIAL PAPER (13.0%) * Presently non-income producing.
5,000,000 Federal National Mortgage
Association, 5.860%, 5-22-95 $ 4,982,908 + Foreign security. Principal amount of forward foreign currency
7,000,000 General Electric Capital Corp., contracts denominated in indicated currency: D-German
5.850%, 5-1-95 7,000,000 Deutschemark; K-Swedish Krona.
6,000,000 Household Finance Corp., 5.920%,
5-15-95 5,986,187 # American Depository Receipts.
------------
TOTAL COMMERCIAL PAPER (COST $17,969,095) 17,969,095
------------
See Note 1 to financial statements for security valuation and
TOTAL INVESTMENTS (98.5%) (COST $112,211,838) 136,336,760 other significant accounting policies.
------------
See Note 4 to financial statements for cost and unrealized
UNREALIZED LOSS ON FORWARD appreciation and depreciation of investments for Federal
FOREIGN CURRENCY CONTRACTS (-0.0%) income tax purposes.
D 3,800,000 German Deutschemark 7-24-95 Sell (3,871)
K 5,618,877 Swedish Krona 7-18-95 Sell (9,935)
TOTAL FORWARD FOREIGN CURRENCY CONTRACTS (13,806)
------------
OTHER ASSETS IN EXCESS OF LIABILITIES (1.5%) 2,123,564
------------
NET ASSETS (100.0%) $138,446,518
============
</TABLE>
-2-
<PAGE> 10
APRIL 30, 1995 IDEX FUND 3
- - --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES (unaudited)
- - --------------------------------------------------------------------------------
All amounts (except per share amounts) in thousands
<TABLE>
<CAPTION>
ASSETS:
<S> <C>
Investment securities, at market value
(identified cost $112,212) $ 136,337
Cash 1,497
Receivables:
Investment securities sold 4,350
Dividends 43
Other 4
----------
Total assets 142,231
----------
LIABILITIES:
Accounts payable:
Investment securities purchased 3,719
Shares of beneficial interest redeemed 8
Accrued liabilities: (Note 2)
Management and advisory fees 17
Forward foreign currency contracts (Note 2) 14
Transfer agent fees and expenses 8
Other 18
----------
Total liabilities 3,784
----------
NET ASSETS $ 138,447
==========
NET ASSETS:
Shares of beneficial interest, unlimited shares authorized;
8,974 shares outstanding $ 103,718
Undistributed net investment income (Note 1) 177
Undistributed net realized gain on investments and foreign currency transactions (Note 1) 10,441
Net unrealized appreciation of investments and on translation of assets and liabilites in
foreign currencies 24,111
----------
Total net assets $ 138,447
==========
Net asset value per share (net assets divided by shares outstanding) $ 15.43
Add maximum selling commission (8.50% of offering price)* 1.43
----------
Offering price per share $ 16.86
==========
</TABLE>
* Includes the maximum selling commission (represented as a percentage of
offering price) which is reduced on sales of $25,000 or more as set forth
in the prospectus.
The notes to financial statements are an integral part of these statements.
-3-
<PAGE> 11
- - --------------------------------------------------------------------------------
FOR THE SIX MONTHS ENDED APRIL 30, 1995 IDEX FUND 3
- - --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS (unaudited)
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
All amounts in thousands
INVESTMENT INCOME:
Dividends (net of foreign withholding taxes of $5) $ 517
Interest 548
-----------------
1,065
EXPENSES (NOTE 2): -----------------
Management and advisory fees 686
Transfer agent fees and expenses 122
Custody fees and expenses 23
Trustees fees and expenses 9
Other 46
-----------------
Total expenses 886
-----------------
Net investment income 179
-----------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY (NOTE 1):
Net realized gain on investments 11,772
Net realized gain from foreign currency transactions (1,284)
-----------------
Net realized gain 10,488
-----------------
Net unrealized depreciation during the period on:
Investments (6,656)
Translation of assets and liabilities in foreign currencies (14)
-----------------
Net unrealized depreciation during the period (6,670)
-----------------
Net loss on investments and foreign currency 3,818
-----------------
Net decrease in net assets resulting from operations $ 3,997
=================
</TABLE>
- - --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
All amounts in thousands FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED
APRIL 30, OCTOBER 31,
----------------- -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS: 1995 (1) 1994
OPERATIONS: ----------------- -----------------
Net investment income $ 179 $ 482
Net realized gain on investments and foreign currency transactions 10,488 1,621
Net unrealized depreciation during the period (6,670) (7,023)
----------------- -----------------
Net increase (decrease) in net assets resulting from operations 3,997 (4,920)
----------------- -----------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (379) (385)
From net realized gain on investments and foreign currency transactions (1,426) (21,699)
----------------- -----------------
(1,805) (22,084)
----------------- -----------------
SHARES OF BENEFICIAL INTEREST TRANSACTIONS:
Proceeds from sale of shares 2,131 6,384
Shares issued on reinvestment of distributions 1,773 21,779
Cost of shares repurchased (21,325) (48,964)
----------------- -----------------
Net decrease from shares of beneficial interest transactions (17,421) (20,801)
----------------- -----------------
Net decrease in net assets (15,229) (47,805)
NET ASSETS:
Beginning of period 153,676 201,481
----------------- -----------------
End of period (includes undistributed net investment
income of $177 and $377, respectively) $ 138,447 $ 153,676
================= =================
SHARES OF BENEFICIAL INTEREST:
Sold 147 421
Issued on reinvestment of distributions 128 1,427
Redeemed (1,473) (3,221)
----------------- -----------------
Net decrease in shares outstanding (1,198) (1,373)
Outstanding at beginning of period 10,172 11,545
----------------- -----------------
Outstanding at end of period 8,974 10,172
================= =================
</TABLE>
(1) Unaudited.
The notes to financial statements are an integral part of these statements.
-4-
<PAGE> 12
IDEX FUND 3
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
For a share of beneficial interest outstanding Six months
throughout each period ended
April 30,
---------- --------------------
1995(1) 1994 1993
---------- --------------------
<S> <C> <C> <C>
Net asset value at beginning of period $ 15.11 $ 17.45 $ 17.32
Net investment income 0.01 0.06 0.09
Net realized and unrealized gain (loss) on investments and foreign currency 0.50 (0.44) 2.54
-------- -------- --------
Total income (loss) from investment operations 0.51 (0.38) 2.63
-------- -------- --------
Dividends from net investment income (0.04) (0.04) (0.09)
Distributions from net realized capital gains and foreign currency (0.15) (1.92) (2.41)
-------- -------- --------
Total distributions (0.19) (1.96) (2.50)
-------- -------- --------
Net asset value at end of period $ 15.43 $ 15.11 $ 17.45
======== ======== ========
Total return (2) 3.55% (3.36)% 16.39%
Net assets at end of period (000's) $138,447 $153,676 $201,481
Shares outstanding at end of period (000's) 8,974 10,172 11,545
Ratio of expenses to average net assets 1.29% 1.25% 1.24%
Ratio of net investment income to average net assets 0.26% 0.28% 0.52%
Portfolio turnover rate (3) 113.53% 80.92% 123.58%
</TABLE>
<TABLE>
<CAPTION>
For a share of beneficial interest outstanding
throughout each period
For the years ended October 31,
--------------------------------
1992 1991 1990
-------- -------- --------
<S> <C> <C> <C>
Net asset value at beginning of period $ 18.74 $ 12.53 $ 14.37
-------- -------- --------
Net investment income 0.09 0.13 0.17
Net realized and unrealized gain (loss) on investments and foreign currency 0.34 6.87 (1.51)
-------- -------- --------
Total income (loss) from investment operations 0.43 7.00 (1.34)
-------- -------- --------
Dividends from net investment income (0.08) (0.20) (0.08)
Distributions from net realized capital gains and foreign currency (1.77) (0.59) (0.42)
-------- -------- --------
Total distributions (1.85) (0.79) (0.50)
-------- -------- --------
Net asset value at end of period $ 17.32 $ 18.74 $ 12.53
======== ======== ========
Total return (2) 2.62% 58.58% (9.73)%
Net assets at end of period (000's) $196,495 $197,498 $130,900
Shares outstanding at end of period (000's) 11,346 10,536 10,448
Ratio of expenses to average net assets 1.22% 1.28% 1.37%
Ratio of net investment income to average net assets 0.50% 0.84% 1.18%
Portfolio turnover rate (3) 86.46% 104.97% 186.79%
</TABLE>
(1) Unaudited.
(2) Total return has been calculated without deduction of any sales load on an
initial purchase. Short periods (where applicable) are not annualized.
(3) This rate is calculated by dividing the average value of the Fund's
long-term purchases or sales during the period into the lesser of its
respective long-term purchases or sales during the period. Short periods
(where applicable) are annualized.
IDEX FUND 3
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
APRIL 30, 1995
NOTE 1. Organization and Significant Accounting Policies:
IDEX Fund 3 (the "Fund") is organized as a Massachusetts business trust and
is registered under the Investment Company Act of 1940, as amended, as a
diversified, open-end management investment company. The Fund is organized
as a series fund but currently offers only one series of shares. The
following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
policies are in conformity with generally accepted accounting principles.
A. Security valuations: Investments of the Fund traded on a national securities
exchange and the NASDAQ National Market System are stated at the last
reported sales price on the day of valuation; securities traded in the over-
the-counter market and listed securities for which no sale was reported on
that date are valued at the last quoted bid price. Foreign securities are
converted to U.S. dollars using exchange rates at the close of the New York
Stock Exchange. Long-term debt securities are valued by a major independent
provider of pricing services. Short-term debt securities are valued at
amortized cost, which approximates market. Other securities for which
quotations are not readily available are valued at fair value, determined
in such manner as the sub-adviser, under the supervision of the Board of
Trustees, decides in good faith.
-5-
<PAGE> 13
IDEX FUND 3
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
APRIL 30, 1995
NOTE 1. Organization and Significant Accounting Policies (continued):
B. Security transactions and related investment income: Security transactions
are accounted for on the trade date (date the order to buy or sell is
executed). Securities gains and losses are calculated on the specific
identification basis and dividend income is recorded on the ex-dividend date
for both financial and Federal tax reporting purposes; interest income is
recorded on the accrual basis, including amortization of premium and
discount. Original issue discount (as defined in the Internal Revenue Code)
and market premium and discount are amortized for both financial and Federal
tax reporting purposes over the remaining life of the related bonds.
C. Foreign currency translation: Securities and other assets and liabilities
denominated in foreign currencies are translated into U.S. dollars at the
closing exchange rate each day. The cost of foreign securities is translated
at the exchange rate in effect when the investment was acquired. Effective
November 1, 1993, the Fund adopted "Statement of Position 93-4: Foreign
Currency Accounting and Financial Statement Presentation for Investment
Companies." The Fund combines fluctuations from currency exchange rates and
fluctuations in market value when computing net realized and unrealized gain
or loss from investments. Transaction gains or losses resulting from changes
in exchange rates during the reporting period or upon settlement of the
foreign currency transactions are reported in the Statement of Operations
for the current period. Foreign denominated assets and the use of forward
contracts may involve risks not typically associated with domestic
transactions, including unanticipated movements in exchange rates, the degree
of government supervision and regulation of security markets, and the
possibility of political or economic instability.
D. Federal taxes: It is the Fund's policy to distribute all of its taxable
income and net capital gains to its shareholders and otherwise qualify as a
regulated investment company under the Internal Revenue Code. In addition,
the Fund intends to pay distributions as required to avoid excise taxes.
Accordingly, no provision has been made for Federal taxes.
E. Distributions to shareholders: Dividends and distributions are recorded by
the Fund on the ex-dividend date. Income and capital gains distributions are
determined in accordance with Federal income tax regulations which may differ
from generally accepted accounting principles. Accordingly, permanent book
and tax basis differences relating to Fund earnings and shareholder
distributions are reclassified as necessary among components of net assets
at each fiscal year-end.
NOTE 2. Investment Advisory and Other Payments to/from Affiliates:
Idex Management, Inc. ("IMI") is the Fund's investment adviser: Idex Investor
Services, Inc. ("IIS") is the Fund's transfer agent; InterSecurities, Inc.
("ISI") is the Fund's principal underwriter, Janus Capital Corporation ("JCC")
is the Fund's sub-adviser; and Investors Fiduciary Trust Company ("IFTC") is
the Fund's custodian. IMI is owned equally by AUSA Holding Company ("AUSA")
and JCC. ISI and IIS are 100% owned by AUSA. AUSA is a wholly-owned indirect
subsidiary of AEGON nv, a Netherlands corporation.
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<PAGE> 14
IDEX FUND 3
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
APRIL 30, 1995
NOTE 2. Investment Advisory and Other Payments to/from Affiliates (continued):
Under the terms of the Management and Investment Advisory Agreement, the
Fund pays management fees to IMI at the annual rate of 1.00% on the first
$750 million of average daily net assets. Also, the Fund will be reimbursed
by IMI to the extent that certain operating expenses exceed the lesser of
1.50% of average daily net assets or any limitation imposed by the most
restrictive state law. No such reimbursements were required for the period.
The Fund pays IIS a monthly per open account fee of $1.16667 plus $2.43 for
each new account opened. Custody fees and expenses reflect reductions of
$24,774 for earnings credits received through IFTC during the six months
ended April 30, 1995.
For the six months ended April 30, 1995:
<TABLE>
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Underwriting commissions received by ISI (not a Fund Expense) $113,033
Underwriting commissions retained by ISI 19,970
</TABLE>
NOTE 3. Investment Transactions:
The cost of securities purchased and proceeds from securities sold (excluding
non-U.S. Government short-term securities) for the six months ended April 30,
1995 were as follows:
Non-U.S. Government Purchases $ 69,099,748
Non-U.S. Government Sales 106,634,233
U.S. Government Purchases 29,930,713
U.S. Government Sales 30,000,000
NOTE 4. Information for Federal Income Tax Purposes:
For the year ended October 31, 1994, the Fund realized net capital gains of
$1,426,441. These gains were distributed to shareholders in December 1994.
At April 30, 1995, the cost of investment securities was $112,211,838 and net
unrealized appreciation of investments aggregated $24,124,922, of which
$24,823,183 related to appreciated securities and $698,261 related to
depreciated securities.
-7-
<PAGE> 15
IDEX FUND 3
<TABLE>
<CAPTION>
TRUSTEES TRANSFER AGENT CUSTOMER SERVICE
<S> <C> <C>
PETER R. BROWN IDEX INVESTOR SERVICES, INC. (800) 851-9777
Largo, Florida P.O. Box 9015 Hours: 8 a.m. to 7 p.m. Eastern time
Chairman of the Board, Clearwater, Florida 34618-9015
Peter Brown Construction Company
OFFICERS IDEX Assist Line
JAMES L. CHURCHILL
Hilton Head, South Carolina JOHN R. KENNEY (800) 421-IDEX (4339)
Retired; former President of the Avionics Chairman of the Board 24-hour automated account information
Group of Rockwell International Corporation
G. JOHN HURLEY INVESTMENT ADVISER
CHARLES C. HARRIS President and Chief IDEX MANAGEMENT, INC.
Belleair, Florida Executive Officer 201 Highland Avenue
Retired; former Senior Vice President Western Largo, Florida 34640
Reserve Life Assurance Co. of Ohio THOMAS R. MORIARTY
Senior Vice President SUB-ADVISER
G. JOHN HURLEY
Largo, Florida WILLIAM H. GEIGER JANUS CAPITAL CORPORATION
President and Chief Executive Officer Vice President and 100 Fillmore Street, Suite 300
of the Fund; Assistant Secretary Denver, Colorado 80206
President and Chief Executive Officer
of InterSecurities, Inc. LESLIE E. MARTIN III PRINCIPAL
Vice President - Marketing UNDERWRITER
JOHN R. KENNEY
Largo, Florida BECKY A. FERRELL INTERSECURITIES, INC.
Chairman of the Board of the Fund; Assistant Vice President, Counsel 201 Highland Avenue
Chairman of the Board of InterSecurities, Inc. and Secretary Largo, Florida 34640
WILLIAM W. SHORT, JR. CHRISTOPHER G. ROETZER CUSTODIAN
Largo, Florida Assistant Vice President and
Chairman, Southern Apparel Corporation Principal Accounting Officer INVESTORS FIDUCIARY TRUST COMPANY
and S.A.C. Distributors Kansas City, Missouri 64105
RICHARD B. FRANZ II Send all correspondence to the Transfer
TRUMAN H. SIMS Treasurer Agent
Clearwater, Florida
President, Truman Sims, Inc. INDEPENDENT
ACCOUNTANTS
JACK E. ZIMMERMAN Our corporate offices
Dayton, Ohio are located at: PRICE WATERHOUSE LLP
Retired; former Director, Regional Marketing, 1055 Broadway
Martin Marietta Corporation 201 Highland Avenue Kansas City, Missouri 64105
Largo, Florida 34640
</TABLE>
If you receive duplicate mailings because you have more than one account in
IDEX fund 3 or in the IDEX family, at the same household, you may wish to save
your fund money by consolidating your accounts by address. please call IDEX
customer service at (800) 851-9777.
<PAGE> 16
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<Cation>
<S> <C> <C>
Where Time Is On Your Side. BULK RATE
[GRAPHIC] U.S. POSTAGE
IDEX PAID
MUTUAL FUNDS PERMIT NO. 39
P.O. Box 9015 ATLANTA, GA
Clearwater, FL 34618-9015
- - -------------------------
Principal Underwriter:
InterSecurities, Inc.
1995 InterSecurities Inc.
000055-06/95
IDEX FUND 3
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