Fellow Shareholders:
After stellar gains in this year's first quarter, many investors
wondered if the markets could get any better. Well, they did.
Despite a few zigs and zags, the markets this period have continued to
seemingly move in just one direction: up. And why not? We're in the
midst of a great financial spectacle--restrained inflation, declining
interest rates, and moderate economic growth--all roughly converging at
this extraordinary point in history.
The current bull market is one of the strongest of this century. And
while it's been fun to watch, it's been particularly satisfying to have
participated...especially in light of such an uncomfortable 1994. Most
importantly, those investors who stuck with their investment strategies
in the face of last year's extreme volatility have reaped the
measurable rewards of long-term investing.
And just as the markets continue to move beyond their traditional
boundaries, so do we. Our commitment at IDEX Mutual Funds has always
been to provide solid, well-managed investment products, to bring you a
"Universe of Opportunity". Our unique strategy--to put our portfolios
in the hands of some of the best money managers in the world--led to
the introduction last December of four exciting new additions to IDEX
II Series Fund--the Aggressive Growth, Capital Appreciation, Equity
Income, and Balanced Portfolios. That continuing pursuit of excellence
has also brought us this period one of the industry's finest growth
stock managers. In June, Scott Schoelzel was officially designated as
CoPortfolio Manager, along with Tom Marsico, of IDEX Fund 3.
On the following page, Tom and Scott discuss where they've positioned
IDEX Fund 3's assets. We invite you to evaluate their report and
review the data, including major equity positions and industry
weightings. All of this information is intended to provide insight
into what has been one of the industry's finest performances.
And our universe is still expanding. October 1, 1995 marked the
introduction of our tenth portfolio of IDEX II Series -- the Tactical
Asset Allocation Portfolio, managed by Dean Investment Associates. We
are particularly delighted with the experience, perspective, and
professionalism Dean will bring to IDEX Mutual Funds. Make sure to
talk with your Representative about this outstanding new option.
Of course our "Universe of Opportunity" involves more than just
performance; it includes superior service as well. At IDEX, we are
constantly striving to provide the kind of service that meets or
exceeds expectations. We're proud to say that IDEX has been identified
as an "industry leader" in service quality by DALBAR, Inc., an
independent consulting firm to the financial services industry. In
fact, for 1995, we are ranked by DALBAR among the top 10 of mutual fund
complex participants in 11 out of 17 service categories.
In addition, we'll continue to offer you convenient, state-of-the-art
services like our "Electronic Bank Link" option. Electronic Bank Link
allows you to transfer money directly from your bank account to
purchase shares in your IDEX Mutual Fund, or for us to transfer funds
upon redemption directly to your bank account. In other words, no more
need to mail checks.
Yes, these six months and this year have been historic periods in the
financial markets. We're pleased with our outstanding performance. But
no matter how gratifying, we must remember that it is only short-term.
At the very least, given the extraordinary 1995 stock market rise, it's
possible we could see some turbulence soon. But the last two years have
been a powerful reminder that the greatest risk to the investor is
missing out on the wealth creation that comes from investing for the
long-term.
IDEX Mutual Funds are managed not only with long-term results in mind,
but long-term relationships as well. We respect your personal task of
financial planning and greatly appreciate the opportunity to help.
Sincerely yours,
/s/ John R. Kenney /s/ G. John Hurley
- ------------------ ------------------
John R. Kenney G. John Hurley
U.S. equities have continued to move higher. Market performance has been
supported by stable interest rates and low inflation against a background
of moderate economic growth. Within this excellent environment for growth
stocks, IDEX Fund 3 had a total return of 34.66% for the year ended October
31, 1995. By comparison, the Standard & Poor's 500 Index for the same
period advanced 26.30%.
Several key factors have produced these conditions. American industry has
become highly efficient and increased its competitive position visa-vis
foreign companies. U.S. corporations are generating excess cash and using
it more effectively. They are either repurchasing stock, which returns
value to shareholders, or focusing on their higher margin businesses,
either by spinning off non-core holdings, or merging intelligently to reach
critical mass. U.S. fiscal policy has also taken a turn for the better.
Both sides of the aisle in Congress are focused on deficit reduction. The
real question now is when, where and to what extent spending will be
reduced. All of these factors are coming together to create positive
synergies in the economy, in the financial markets, and in individual
companies.
The focus on efficiency is the major reason technology has led the rally in
stocks. Although technology stumbled in September, we're still comfortable
with the fundamentals of the sector. It appears we are beginning a new
upgrade cycle in the computer, telecommunications, and information
processing areas, which is being driven by Intel's Pentium chip and
Microsoft's Windows 95. We are also optimistic about health care and
financial services.
During the period, our technology and "tech"-related holdings continued to
make progress. Although we trimmed or sold some of these positions when
they hit fair valuations, we are still enthusiastic about Nokia, the
cellular telephone and equipment manufacturer located in Finland, modem
manufacturer US Robotics, and semi-conductor maker LSI Logic.
We had good performances from our financial stocks. Citicorp's stock
repurchase program and its dominant presence in emerging markets are
driving earnings and investor confidence. In the health care and medical
sector, Oxford Health Plans continues to gain market share and improve its
operating margins and earnings. Credit card processor First Data acquired
competitor First Financial Management. Post merger, the company is
combining the major credit card transaction processor for banks with the
major processor for merchants and create enormous synergies.
After the excellent performance we have seen this year, a certain amount of
volatility would not be unexpected. But the current environment of moderate
economic growth, low inflation, and stable interest rates provides one of
the best conditions investors can expect for growth stocks. IDEX Fund 3
continues to be positioned to take advantage of this environment.
Thomas F. Marsico
IDEX Fund 3 Portfolio Manager
Scott W. Schoelzel
IDEX Fund 3 Portfolio Manager
Performance
A hypothetical $10,000 invested at inception (04/20/87) was
worth $30,469 as of 10/31/95.
<TABLE>
<CAPTION>
Average Annual Total Return
S&P 500
IDEX Fund 3 Index***
<S> <C> <C> <C>
1 Year Ended
10/31/95 23.23%* 34.66%** 26.30%
5 Years Ended
10/31/95 17.89%* 20.00%** 17.20%
Life of the Fund
04/20/87 to 10/31/95 13.86%* 15.13%** 11.80%
</TABLE>
* IDEX Fund 3 performance reflects the maximum sales charge
of 8.5% and includes dividends and capital gains reinvested.
Investment return and principal value will fluctuate; shares
when redeemed may be worth more or less than their original
cost. Past performance does not guarantee future results.
** Performance does not reflect a sales charge.
***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.
<TABLE>
<CAPTION>
Investments By Major Industry as a percentage of Net Assets
October 31, 1995
10/31/95 4/30/95
<S> <C> <C>
Basic Material -- 2.5%
Consumer Cyclical 4.5% 8.0%
Consumer Non-Cyclical 13.4% 11.6%
Financial 14.9% 14.3%
Industrial 0.3% 1.2%
Technology 50.6% 47.9%
Short-term securities 16.5% 13.0%
</TABLE>
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.
Top Five Equity Holdings
October 31, 1995
Sun Microsystems, Inc.
Sun Microsystems is a supplier of high-performance workstations,
servers and networking software.
SunExpress, the aftermarketing company of Sun Microsystems, announced
that it will offer the NetscapeTM family of software products. Geared
for Internet users, the Netscape product line from Sunsoft supports
Solaris users as they publish or conduct secure commerce on the World
Wide Web.
First Data Corp.
First Data 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 received approval from the FTC and the SEC to
acquire First Financial Management Corp., owner of Western Union, the
dominant consumer money transfer company in the U.S.
SAP AG Vorzug
SAP is the world's leading provider of client-server business
applications. SAP is a pioneer in the development of integrated
software applications, collaborating with business and its executives
worldwide to develop software that meets the complex needs of today's
global business.
1995 half-year net profits were up 80% to $100 million, with sales for
the half-year rising to $824 million, or 67% over the comparable
period last year.
Microsoft Corp.
Microsoft, founded in 1975, is the worldwide leader in software for
personal computers.
With the recent release of Windows 95, a multi-tasking capable windows
operating system, the computer software consumer market went into a
frenzy that saw about one million copies sold in just four days.
Microsoft recently announced a partnership venture with Paramount
Television that will provide Microsoft exclusive original material to
show on the Microsoft Network Service.
US Robotics Corp.
US Robotics designs, manufactures, markets and supports high-
performance data communications products and systems targeted to
business and professional users worldwide.
US Robotics sells dial-up modems, network management systems, and data
communications software.
US Robotics recently acquired ISDN Systems Corp. in a $40 million tax
free exchange of stock.
October 31, 1995
SCHEDULE OF INVESTMENTS
<TABLE>
<CAPTION>
Shares Description Value
<S> <C>
COMMON STOCK (76.7%)
Consumer Cyclical (4.5%)
Broadcasting (0.6%)
32,520 Infinity Broadcasting Corp. Class A * $ 1,056,900
Clothing (0.5%)
20,000 Fila Holding SpA # 862,500
Consumer Electronics (0.2%)
2,010 Samsung Electronics Company, Ltd. 144A 236,557
Entertainment (1.9%)
54,875 Walt Disney Company 3,162,172
Footware (0.9%)
25,800 Nike, Inc. Class B 1,464,150
Retailers - Specialty (0.4%)
27,115 Lowe's Companies, Inc. 732,105
Consumer Non-Cyclical (13.4%)
Beverages (3.1%)
71,100 Coca-Cola Company 5,110,313
Food Retailers (0.2%)
8,475 Starbucks Corp. * 332,644
Health Care (3.6%)
10,400 Enterprise Systems, Inc. * 243,100
41,250 Oxford Health Plans, Inc. * 3,227,812
16,950 Pacificare Health Systems, Inc. Class B * 1,233,112
23,650 United Healthcare Corp. 1,256,406
5,960,430
Pharmaceuticals (6.5%)
35,298 Astra AB A-Free + 1,298,561
10,725 Eli Lilly and Company 1,036,303
11,825 Johnson & Johnson 963,737
77,500 Pfizer, Inc. 4,446,562
25,400 SEQUUS Pharmaceuticals, Inc. * 304,800
54,200 SmithKline Beecham PLC # 2,811,625
10,861,588
Financial (14.9%)
Banks (5.5%)
35,475 Chemical Banking Corp. 2,017,641
51,750 Citicorp 3,357,281
29,800 First Interstate Bancorp 3,844,200
9,219,122
Diversified (6.7%)
23,500 Federal Home Loan Mortgage Corp. 1,627,375
19,035 Federal National Mortgage Association 1,996,296
109,150 First Data Corp. 7,217,544
112,950 Grupo Financiero Inbursa S.A. Class C+ 308,554
11,149,769
Securities Brokers (2.7%)
80,225 Merrill Lynch and Company, Inc. 4,452,488
Industrial (0.3%)
Containers and Packaging
19,805 Liqui-Box Corp. 539,686
IDEX Fund 3
<CAPTION>
Shares Description Value
<S> <C>
Technology (43.6%)
Advanced Medical Devices (1.1%)
32,475 Medtronic, Inc. $ 1,875,431
Biotechnology (1.6%)
56,500 Amgen, Inc. * 2,712,000
Communications (13.5%)
19,875 America Online, Inc. * 1,590,000
73,625 Ascend Communications, Inc. * 4,785,625
48,425 Glenayre Technologies, Inc. * 3,111,306
195,125 L.M. Ericsson Telephone Company Class B # 4,167,753
49,325 PictureTel Corp. * 3,255,450
61,925 US Robotics Corp. 5,728,062
22,638,196
Computers (10.5%)
55,250 Cisco Systems, Inc. * 4,281,875
56,475 StrataCom, Inc. * 3,473,213
104,400 Sun Microsystems, Inc. * 8,143,200
33,700 3COM Corp. * 1,583,900
17,482,188
Diversified (2.9%)
70,695 Texas Instruments, Inc. 4,824,934
Semiconductors (2.5%)
34,375 Altera Corp. * 2,079,688
44,375 LSI Logic Corp. * 2,091,172
4,170,860
Software (11.5%)
33,775 Broderbund Software, Inc. * 2,343,141
35,200 HBO & Company 2,490,400
81,525 Informix Corp. * 2,374,416
26,400 Intuit, Inc. * 1,900,800
63,125 Microsoft Corp. * 6,312,500
23,775 Netscape Communications Corp. * 2,092,200
19,925 PeopleSoft, Inc. * 1,713,550
19,227,007
Total Common Stock (cost $90,067,642) $ 128,071,040
NON-CONVERTIBLE PREFERRED STOCK (7.0%)
Technology
Diversified (2.7%)
67,575 Nokia AB OY 144A # 3,767,306
12,769 Nokia AB OY + 730,852
4,498,158
Software (4.3%)
46,715 SAP AG Vorzug + 7,149,155
Total Preferred Stock (cost $6,076,401) 11,647,313
October 31, 1995
SCHEDULE OF INVESTMENTS (continued)
<CAPTION>
Principal Description Value
<S> <C>
COMMERCIAL PAPER (16.5%)
$5,000,000 Chevron Oil Finance Corp.
5.720%, 11-6-95 $ 4,996,028
5,000,000 Federal National Mortgage Association
5.640%, 11-14-95 4,989,817
5,000,000 Ford Motor Credit Company,
5.720%, 11-2-95 4,999,205
5,500,000 General Electric Capital Corp.,
5.830%, 11-1-95 5,500,000
7,000,000 Household Finance Corp.
5.710%, 11-3-95 6,997,779
Total Commercial Paper (cost $27,482,829) 27,482,829
Total Investments (100.2%) (cost $123,626,872) $ 167,201,182
UNREALIZED GAIN (LOSS) ON FORWARD
FOREIGN CURRENCY CONTRACTS (-0.1%) @
3,707,000 German Deutschemark 11-17-95 Sell (68,861)
3,500,000 German Deutschemark 04-11-96 Sell (31,768)
Total Unrealized Loss on Forward Foreign
Currency Contracts (100,629)
Liabilities in Excess of Other Assets (-0.1%) (114,647)
Net Assets (100.0%) $ 166,985,906
</TABLE>
IDEX Fund 3
Notes to Schedule of Investments
+ Foreign securities.
@ Notional amount of forward foreign currency contracts
denominated in indicated currency.
# American Depository Receipts or Global Depository Receipts.
* Presently non-income producing.
See Note 1 to financial statements for security valuation and
other significant accounting policies.
See Note 5 to financial statements for cost and unrealized
appreciation and depreciation of investments for Federal
income tax purposes.
October 31, 1995
IDEX Fund 3
STATEMENT OF ASSETS AND LIABILITIES
All numbers (except per share amounts) in thousands
<Tables>
[S] [C]
Assets:
Investment securities, at market value
(identified cost$123,627) $ 167,201
Cash 1,578
Receivables
Investment securities sold 931
Dividends 54
Shares of beneficial interest sold 12
Other 7
Total assets 169,783
Liabilities:
Accounts payable:
Investment securities purchased 2,356
Shares of beneficial interest redeemed 226
Accrued liabilities (Note 2):
Management and advisory fees 39
Transfer agent fees and expenses 17
Forward foreign currency contracts (Notes 4) 101
Other 58
Total liabilities 2,797
Net Assets $ 166,986
Net asset value per share
(net assets divided by shares outstanding): $ 20.03
Add maximum selling commission
(8.50% of offering price) (1) 1.86
Offering price per share: $ 21.89
For the year ended October 31, 1995
STATEMENT OF OPERATIONS
All numbers in thousands
Investment Income:
Dividends (net of foreign withholding taxes of $26) $ 1,139
Interest 965
2,104
Expenses (Note 2):
Management and advisory fees 1,472
Transfer agent fees and expenses 313
Custody fees and expenses 80
Trustees fees and expenses 25
Other 108
1,998
Custodian earnings credits (48)
Net expenses 1,950
Net investment income 154
Realized and unrealized gain (loss) on investments
and foreign currency (Note 1,4):
Net realized gain on investments 31,805
Net realized loss from foreign currency transactions (435)
Net realized gain 31,370
Net unrealized appreciation (depreciation) during
the period on:
Investments 12,793
Translation of assets and liabilities denominated
in foreign currency (101)
Net unrealized appreciation during the period 12,692
Net gain on investments and foreign currency 44,062
Net increase in net assets
resulting from operations $ 44,216
[/TABLE]
(1) On sales equal to or greater than $25,000 the selling commision
is reduced as set forth in the prospectus.
The notes to financial statements are an integral part of these
statements.
IDEX Fund 3
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
All numbers in thousands
For the year ended
October 31,
1995 1994
-------- -------
<S> <C> <C>
Increase (decrease) in net assets from:
Operations:
Net investment income $ 154 $ 482
Net realized gain on investments and foreign
currency transactions 31,370 1,621
Net unrealized appreciation (depreciation)
during period 12,692 (7,023)
Net increase (decrease) in net assets ------- --------
resulting from operations 44,216 (4,920)
------- --------
Distributions to shareholders:
From net investment income (606) (385)
From net realized gains on investments and
foreign currency transactions (1,463) 21,699)
-------- -------
(2,069) (22,084)
-------- -------
Shares of beneficial interest transactions:
Proceeds from sale of shares 3,892 6,384
Shares issued on reinvestment of distributions 2,033 21,779
Cost of shares repurchased (34,762) (48,964)
-------- --------
Net decrease from share transactions (28,837) (20,801)
-------- --------
Net increase (decrease) in net assets 13,310 (47,805)
Net Assets:
Beginning of period 153,676 201,481
-------- --------
End of period $166,986 $153,676
======== ========
Net Assets consist of (Note 1):
Shares of beneficial interest,
unlimited shares authorized 92,302 121,139
Undistributed net investment income - 377
Undistributed net realized gain from
investments and foreign currency transactions 31,211 1,379
Net unrealized appreciation of investments and
on translation of assets and liabilities in
foreign currencies 43,473 30,781
--------- --------
Total net assets $166,986 $153,676
========= ========
Shares of beneficial interest:
Shares sold 244 421
Shares issued on reinvestment of
distributions 144 1,427
Shares redeemed (2,224) (3,221)
-------- -------
Net decrease in shares outstanding (1,836) (1,373)
Shares outstanding at beginning
of period 10,172 11,545
------- --------
Shares outstanding at end of period 8,336 10,172
======= ========
</TABLE>
The notes to financial statements are an integral part of these
statements.
IDEX Fund 3
FINANCIAL HIGHLIGHTS
For a share of beneficial interest outstanding
throughout each period
<TABLE>
<CAPTION>
For the years ended October 31,
1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Net asset value at
beginning of period $15.11 $17.45 $17.32 $18.74 $12.53
Net investment income 0.02 0.06 0.09 0.09 0.13
Net realized and
unrealized gain (loss)
on investments and
foreign currency 5.12 (0.44) 2.54 0.34 6.87
Total income (loss)
from investment
operations 5.14 0.38 2.63 0.43 7.00
Dividends from net
investment income (0.07) (0.04) (0.09) (0.08) (0.20)
Distributions from net
realized capital gains
and foreign currency (0.15) (1.92) (2.41) (1.77) (0.59)
Total distributions (0.22) (1.96) (2.50) (1.85) (0.79)
Net asset value at
end of period $20.03 $15.11 $17.45 $17.32 $18.74
Total return (1) 34.66% (3.36)% 16.39% 2.62% 58.58%
Net assets at end of
period (000's) $166,986 $153,676 $201,481 $196,495 $197,498
Ratio of expenses to
average net assets (2) 1.36% 1.25% 1.24% 1.22% 1.28%
Ratio of net investment
income to average
net assets 0.10% 0.28% 0.52% 0.50% 0.84%
Portfolio turnover
rate (3) 122.95% 80.92% 123.58% 86.46% 104.97%
</TABLE>
(1) Total return has been calculated without deduction of any sales load
on an initial purchase.
(2) 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.
IDEX Fund 3
NOTES TO FINANCIAL STATEMENTS
October 31, 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.
IDEX Fund 3
NOTES TO FINANCIAL STATEMENTS (continued)
October 31, 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. 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 on other
assets and liabilities denominated in foreign currencies 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. A reclassification from undistributed realized capital gains to
undistributed net investment income of $75,335 has been made for the year ended
October 31, 1995.
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 N.V., a Netherlands corporation.
IDEX Fund 3
NOTES TO FINANCIAL STATEMENTS (continued)
October 31, 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% 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 fee of $1.185 per open account plus $2.48 for each
new account opened. Under an agreement with the Fund's custodian, Custody fees
and expenses are reduced by credits granted by the custodian from any
temporarily uninvested cash. The benefit of the
Custodian earnings credits of $47,622 is not reflected in Custody fees and
expenses per the Statement of Operations. The Fund was advised that ISI
received $205,149 and retained $35,819 in underwriter commissions for the year
ended October 31, 1995.
NOTE 3. Investment Transactions:
The cost of securities purchased and proceeds from securities sold (excluding
non-U.S. Government short-term securities) for the year ended October 31, 1995
were as follows:
<TABLE>
<S> <C>
Non-U.S. Government Purchases $160,485,313
Non-U.S. Government Sales 216,875,031
U.S. Government Purchases 36,922,750
U.S. Government Sales 37,000,000
</TABLE>
NOTE 4. Forward Currency Contracts:
Forward foreign currency contracts are contracts for delayed delivery of
financialinterests in which the seller agrees to make delivery at a specified
future date of aspecified financial instrument, at a specified price or yield.
Risks arise fromchanges inthe market value of the underlying instruments and
from the possible inability of counterparties to meet the terms of their
contracts.
Forward foreign currency contracts are valued at the forward rate, and are
marked to market daily. The change in market value is recorded by the Fund as
an unrealized gain or loss. When the contract is closed, the Fund records a
realized gain or loss equal to the difference between the value of the contract
at the time it was opened and the value at
the time it was closed.
NOTE 5. Information for Federal Income Tax Purposes:
For the year ended October 31, 1995, the Fund realized net capital gains of
$31,208,362. These gains will be distributed to shareholders in December 1995.
At October 31, 1995, the cost of investment securities was $123,679,870 and net
unrealized appreciation of investments aggregated $43,521,312, of which
$43,804,531 related to appreciated securities and $283,219 related to
depreciated securities.
IDEX Fund 3
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees and Shareholders of IDEX Fund 3:
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments, and the related statements of
operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of IDEX
Fund 3 (the "Fund") at October 31, 1995, the results of its operations
for the year then ended, the changes in its net assets for each of the
two years in the period then ended and the financial highlights for each
of the five years in the period then ended, in conformity with generally
accepted accounting principles. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express
an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with
generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that
our audits, which included confirmation of securities at October 31, 1995
by correspondence with the custodian and brokers and the application of
alternative auditing procedures where confirmations from brokers were not
received, provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
Kansas City, Missouri
December 13, 1995
IDEX FUND 3
SUPPLEMENTAL FEDERAL INCOME TAX INFORMATION
October 31, 1995
(unaudited)
The following per-share dividend information for the year ended October 31, 1995
is being provided according to notice requirements under Internal Revenue Code
section 852; however, use form 1099-DIV information to prepare income tax
returns. The tax status of dividends paid will be reported to recipients on
form 1099-DIV for non-qualifying dividends after the close of the applicable
calendar year. Shareholders are advised to consult their tax advisor
concernoing tax treatment of dividends and distributions paid by the Fund.
FOR INDIVIDUALS
<TABLE>
<CAPTION>
Record Ordinary Long-term
Date Total Income Capital Gain
<S> <C> <C> <C>
12-22-94 $0.1857 $0.0390 $0.1467
6-13-95 0.0300 0.0300 0.0000
------- ------ ------
$0.2157 $0.0690 $0.1467
======= ====== ======
</TABLE>
FOR CORPORATIONS
<TABLE>
<CAPTION>
Record Non- Long-term
Date Total Qualifying Qualifying Capital Gain
<S> <C> <C> <C> <C>
12-22-94 $0.1857 $0.0194 $0.0196 $0.1467
6-13-95 0.0300 0.0149 0.0151 0.0000
------ ------ ------ ------
$1.2941 $0.6471 $0.4748 $0.1467
======= ====== ====== ======
</TABLE>
Corporate Deductions: Under Federal tax law, the amounts reportable as
qualifying dividends are eligible for the dividends received deduction in the
year received as provided by Section 243 of the Internal Revenue Code.
IDEX Fund 3
TRUSTEES
Peter R. Brown
Largo, Florida
Chairman of the Board,
Peter Brown Construction Company
James L. Churchill
Hilton Head, South Carolina
Retired; former President of the Avionics Group of Rockwell
International Corporation
Charles C. Harris
Belleair, Florida
Retired; former Senior Vice President Western Reserve Life Assurance Co. of Ohio
G. John Hurley
Largo, Florida
President and Chief Executive Officer of the Fund;
President and Chief Executive Officer of InterSecurities, Inc.
John R. Kenney
Largo, Florida
Chairman of the Board of the Fund;
Chairman of the Board of InterSecurities, Inc.
William W. Short, Jr.
Largo, Florida
Chairman, Southern Apparel Corporation and S.A.C. Distributors
Jack E. Zimmerman
Dayton, Ohio
Retired; former Director, Regional Marketing, Martin Marietta Corporation
TRANSFER AGENT
Idex Investor Services, Inc.
P.O. Box 9015
Clearwater, Florida 34618-9015
OFFICERS
John R. Kenney
Chairman of the Board
G. John Hurley
President and Chief Executive Officer
Thomas R. Moriarty
Senior Vice President
William H. Geiger
Vice President and Assistant Secretary
Leslie E. Martin III
Vice President - Marketing
Becky A. Ferrell
Vice President, Counsel and Secretary
Christopher G. Roetzer
Assistant Vice President and Principal Accounting Officer
Richard B. Franz II
Treasurer
Our corporate offices
are located at:
201 Highland Avenue
Largo, Florida 34640
CUSTOMER SERVICE
(800) 851-9777
Hours: 8 a.m. to 7 p.m. Eastern time IDEX ASSIST LINE
(800) 421-IDEX (4339)
24-hour automated account information INVESTMENT ADVISER
Idex Management, Inc.
201 Highland Avenue
Largo, Florida 34640
SUB-ADVISER
Janus Capital Corporation
100 Fillmore Street, Suite 300
Denver, Colorado 80206
PRINCIPAL
UNDERWRITER
InterSecurities, Inc.
201 Highland Avenue
Largo, Florida 34640
CUSTODIAN
Investors Fiduciary Trust Company Kansas City, Missouri 64105
Send all correspondence to the Transfer Agent
INDEPENDENT
ACCOUNTANTS
Price Waterhouse LLP
1055 Broadway
Kansas City, Missouri 64105
If you receive duplicate mailings because you have more than one account
in IDEX Fund or in the IDEX II Series Fund, 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.
