<PAGE> 1
LOGO
---------------------------------
MUTUAL OF NEW YORK
---------------------------------
SEMI-ANNUAL REPORT
JUNE 30, 1996
<PAGE> 2
THIS REPORT IS NOT TO BE CONSTRUED AS AN OFFERING FOR SALE OF ANY CONTRACTS
PARTICIPATING IN THE KEYNOTE SERIES ACCOUNT, OR AS A SOLICITATION AS AN OFFER TO
BUY ANY CONTRACTS UNLESS PRECEDED BY OR ACCOMPANIED BY A CURRENT PROSPECTUS
WHICH CONTAINS THE COMPLETE INFORMATION OF CHARGES AND EXPENSES.
<PAGE> 3
MONY SERIES FUND, INC.
Dear Shareholder,
After a strong first half, which followed a very strong 1995, the stock
market has recently experienced a sharp decline. Many investors felt that the
market was due for a correction or consolidation after such strong recent
performance, but as usual the timing and volatility of the decline came as a
surprise.
The financial markets had become more uncertain on the near term outlook at
the end of the second quarter. The bond market had been very concerned that
growth was too strong and that rising inflation was a threat. Each economic news
release produced an instant reaction in interest rates; strength drove rates up,
weakness drove them lower.
The stock market generally reacted along with bonds but ironically also
began to worry about corporate earnings. The market seemed to be concerned about
too strong and too weak at the same time. The concern actually was that the bond
market's negative reaction to good news could push interest rates high enough to
cause problems for economic growth and thus for corporate earnings.
In addition, speculation, especially in small technology stocks, had been
increasing and by the end of the second quarter had become excessive. Money
poured into emerging growth and small capitalization funds, initial public
offerings increased and anything to do with the Internet soared in price.
Enthusiasm outran reality, valuations got way ahead of fundamentals and the
market decline is tempering some of the speculative excesses.
This decline is thus far viewed as a correction rather than the beginning
of a major bear market. It could turn into a more serious decline, especially if
redemptions from mutual funds were to increase enough to force sales of stocks
to meet them. But as of now, the preconditions for a major decline are not
present in the strength usually seen at a market peak.
The economy and corporate profits are expected to moderate from the pace of
the first half, but not collapse. The Federal Reserve could move rates up a bit,
but is not expected to aggressively tighten credit. Inflation could become a
problem, but it is not a problem now and long term interest rates have eased
from their peak levels. Stock speculation has been extreme, this is the one
measure that has been at market peak intensity, but the recent selloff should
temper some of the excessive enthusiasm.
The decline has improved stock market valuations, but it is difficult to
see the market making a complete turn and moving to new highs. It should rally
from the lows, but then is likely to back and fill or consolidate to digest the
changed conditions in the economy and the market. The bond market, which had its
own correction earlier in the year, has become more attractive in the slower
growth environment anticipated in the second half.
Sincerely,
LOGO
Kenneth M. Levine
Chairman
1
<PAGE> 4
KEYNOTE SERIES ACCOUNT
STATEMENTS OF ASSETS AND LIABILITIES
JUNE 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
IVA SUBACCOUNT
-------------------------------------------
NON-TAX VARIABLE
TAX-QUALIFIED QUALIFIED PAYOUTS
SUBACCOUNT SUBACCOUNT SUBACCOUNT
------------- ---------- ----------
<S> <C> <C> <C>
ASSETS
Investments at cost (Note 4)........................... $ 8,911,805 $2,147,739 $ 45,087
=========== ========== =======
Investments in MONY Series Fund, Inc. at net asset
value (Note 2)....................................... $ 12,581,061 $3,022,046 $ 46,681
Amount due from MONY Series Fund, Inc. ................ 0 400 0
----------- ---------- -------
Total assets................................. 12,581,061 3,022,446 46,681
----------- ---------- -------
LIABILITIES
Amount due to MONY..................................... 0 400 0
----------- ---------- -------
Net assets............................................. $ 12,581,061 $3,022,046 $ 46,681
=========== ========== =======
Net assets consist of:
Contractholders' net payments..................... $ 3,336,740 $1,099,764 $ 28,808
Undistributed net investment income............... 3,343,437 687,644 9,333
Accumulated net realized gains on investments..... 2,231,628 360,331 6,946
Unrealized appreciation of investments............ 3,669,256 874,307 1,594
----------- ---------- -------
Net assets............................................. $ 12,581,061 $3,022,046 $ 46,681
=========== ========== =======
Number of units outstanding*........................... 149,641 38,455 583
----------- ---------- -------
Net asset value per unit outstanding................... $84.07 $78.59 $80.10
====== ====== ======
</TABLE>
- ---------------
* Units outstanding have been rounded for presentation purposes.
See notes to financial statements.
2
<PAGE> 5
KEYNOTE SERIES ACCOUNT
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
IVA SUBACCOUNT
-------------------------------------------
NON-TAX VARIABLE
TAX-QUALIFIED QUALIFIED PAYOUTS
SUBACCOUNT SUBACCOUNT SUBACCOUNT
------------- ---------- ----------
<S> <C> <C> <C>
Dividend income......................................... $ 24,232 $ 5,905 $ 108
Mortality and expense risk charges (Note 3)............. 64,106 15,379 0
---------- -------- -------
Net investment income (loss)............................ (39,874) (9,474) 108
---------- -------- -------
Realized and unrealized gains on investments (Note 2):
Proceeds from sales................................ 1,272,919 243,758 32,211
Cost of shares sold................................ 848,576 162,422 30,513
---------- -------- -------
Net realized gains on investments....................... 424,343 81,336 1,698
Net increase in unrealized appreciation of
investments........................................... 483,847 134,242 1,565
---------- -------- -------
Net realized and unrealized gains on investments........ 908,190 215,578 3,263
---------- -------- -------
Net increase in net assets resulting from operations.... $ 868,316 $206,104 $ 3,371
========== ======== =======
</TABLE>
See notes to financial statements.
3
<PAGE> 6
KEYNOTE SERIES ACCOUNT
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
IVA SUBACCOUNT
------------------------------------------------------------------------------------------
TAX-QUALIFIED SUBACCOUNT NON-TAX QUALIFIED SUBACCOUNT VARIABLE PAYOUTS SUBACCOUNT
---------------------------- ---------------------------- ----------------------------
FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE
SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED
ENDED DECEMBER 31, ENDED DECEMBER 31, ENDED DECEMBER 31,
JUNE 30, 1996 1995 JUNE 30, 1996 1995 JUNE 30, 1996 1995
------------- ------------ ------------- ------------ ------------- ------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
From operations:
Net investment income (loss)..... $ (39,874) $ 535,275 $ (9,474) $ 128,918 $ 108 $ 3,171
Net realized gains on
investments.................... 424,343 664,322 81,336 86,812 1,698 5,074
Net increase in unrealized
appreciation of investments.... 483,847 2,252,186 134,242 539,944 1,565 313
----------- ----------- ---------- ---------- ------- -------
Net increase in net assets resulting
from operations.................... 868,316 3,451,783 206,104 755,674 3,371 8,558
----------- ----------- ---------- ---------- ------- -------
From unit transactions:
Net proceeds from the issuance of
units.......................... 99,743 104,567 9,431 18,387 49,284 62,234
Net asset value of units redeemed
or used to meet contract
obligations.................... 1,208,739 2,595,434 228,267 224,105 32,211 63,801
----------- ----------- ---------- ---------- ------- -------
Net increase (decrease) from unit
transactions....................... (1,108,996) (2,490,867) (218,836) (205,718) 17,073 (1,567)
----------- ----------- ---------- ---------- ------- -------
Net increase (decrease) in net
assets............................. (240,680) 960,916 (12,732) 549,956 20,444 6,991
Net assets beginning of period....... 12,821,741 11,860,825 3,034,778 2,484,822 26,237 19,246
----------- ----------- ---------- ---------- ------- -------
Net assets end of period*............ $12,581,061 $12,821,741 $3,022,046 $3,034,778 $46,681 $26,237
=========== =========== ========== ========== ======= =======
Units outstanding beginning of
period............................. 163,054 198,896 41,289 44,577 352 344
Units issued during the period....... 1,227 1,545 124 294 640 952
Units redeemed during the period..... 14,640 37,387 2,958 3,582 409 944
----------- ----------- ---------- ---------- ------- -------
Units outstanding end of period...... 149,641 163,054 38,455 41,289 583 352
=========== =========== ========== ========== ======= =======
- ---------------
*Includes undistributed net
investment income of:.............. $ 3,343,437 $ 3,383,311 $ 687,644 $ 697,118 $ 9,333 $ 9,225
</TABLE>
See notes to financial statements.
4
<PAGE> 7
KEYNOTE SERIES ACCOUNT
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION AND BUSINESS:
Keynote Series Account ("Keynote") is a separate investment account
established on December 16, 1987 by The Mutual Life Insurance Company of New
York ("MONY"), under the laws of the State of New York.
Keynote operates as a unit investment trust under the Investment Company
Act of 1940 (the "1940 Act"). Keynote holds assets that are segregated from all
of MONY's other assets and, at present, is used as a funding vehicle for
retirement plans maintained by state educational organizations and certain other
organizations to purchase tax-deferred annuities for their employees ("Group
Plans") and as a funding vehicle for annuities purchased by individuals,
principally for retirement purposes ("Individual Plans"). MONY is the legal
holder of the assets in Keynote. This report contains information related to
Individual Plans only.
There are three sub-accounts which are available to Individual Plans, all
of which invest only in the Equity Income Portfolio (the "Portfolio") of the
MONY Series Fund, Inc. (the "Fund"). The Fund is registered under the 1940 Act
an open end, diversified, management investment company.
The financial statements of the Portfolio, including the portfolio of
investments, are contained on pages 7 through 16 of this report and should be
read in conjunction with these financial statements.
The operations of Keynote form a part of, and are taxed with, the
operations of MONY. MONY does not expect, based upon current tax law to incur
any income tax burden upon the earnings or realized capital gains attributed to
Keynote. Based upon this expectation, no charges are currently being deducted
from Keynote for federal income tax purposes.
2. SIGNIFICANT ACCOUNTING POLICIES
Investments:
The investment in shares of the Fund is stated at the net asset value of
the Equity Income Portfolio. The Fund's net asset value is based upon market
valuations of the securities held.
3. RELATED PARTY TRANSACTIONS
Because Keynote purchases shares of the Fund, the net assets of Keynote
reflect the investment management fee charged by MONY Life Insurance Company of
America (a wholly-owned subsidiary of MONY), the investment adviser, which
provides investment advice and related services for each of the Fund's
portfolios.
Daily charges against Keynote for mortality and expense risks assumed by
MONY are computed at an annual rate of 1.0% for the IVA Tax Qualified and
Non-Tax Qualified subaccounts and no charges are made against the IVA Variable
Payouts subaccount.
5
<PAGE> 8
KEYNOTE SERIES ACCOUNT
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
4. INVESTMENTS
Investments in the Equity Income Portfolio of MONY Series Fund, Inc. at
cost, at June 30, 1996 (unaudited) consist of the following:
<TABLE>
<CAPTION>
IVA SUBACCOUNT
--------------------------------------------
NON-TAX VARIABLE
TAX-QUALIFIED QUALIFIED PAYOUTS
SUBACCOUNT SUBACCOUNT SUBACCOUNTS
------------- ---------- -----------
<S> <C> <C> <C>
Shares beginning of period:
Shares.................................... 653,837 154,756 1,338
Amount.................................... $9,636,332 $2,294,713 $26,208
---------- ---------- -------
Share acquired:
Shares.................................... 4,912 465 2,434
Amount.................................... $ 99,817 $ 9,543 $49,284
Shares received for reinvestment of dividends:
Shares.................................... 1,164 284 5
Amount.................................... $ 24,232 $ 5,905 $ 108
Shares redeemed:
Shares.................................... 61,670 11,804 1,557
Amount.................................... $ 848,576 $ 162,422 $30,513
---------- ---------- -------
Net change:
Shares.................................... (55,594) (11,055) 882
Amount.................................... $ (724,527) $ (146,974) $18,879
---------- ---------- -------
Shares end of period:
Shares.................................... 598,243 143,701 2,220
Amount.................................... $8,911,805 $2,147,739 $45,087
========== ========== =======
</TABLE>
6
<PAGE> 9
MONY SERIES FUND, INC.
EQUITY INCOME PORTFOLIO
With the outlook indicating slower economic growth and with the trend of
corporate earnings becoming more uncertain, strategy has turned more defensive.
There appears to be little pricing power in most industries today. Many
companies report difficulty in raising prices. Companies that need some degree
of pricing power in order to prosper, primarily those in the basic materials
sector, have been cut back. Positions in papers, forest products, and metals
stocks have been reduced. Capital spending related stocks remain as an
overweight. Export demand and proprietary products should cushion the cyclical
influence in this sector.
The Portfolio is increasing holdings of stocks in more stable, assured
growth sectors such as drugs, cosmetics and household products. Interest rate
sensitive industries such as banks, savings and loans, and telephone and
electric utilities are also being emphasized. Finally, the energy stocks, a
defensive sector with some offensive characteristics, are being increased. Most
of these stocks have above average yields and relatively stable earnings. The
offensive element is in natural gas, prices are higher and supply--demand
conditions are favorable. Pipelines and gas utility stocks have been added to
the Portfolio, and oil service stocks have been increased.
7
<PAGE> 10
MONY SERIES FUND, INC.
EQUITY INCOME PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1996 (UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Securities, at value (cost $13,457,980) (Note 2)............................... $17,562,991
Cash........................................................................... 21,589
Dividends receivable........................................................... 32,946
Receivable for fund shares sold................................................ 330
Receivable for securities sold................................................. 262,005
Prepaid expense................................................................ 1,561
-----------
Total assets................................................................. 17,881,422
-----------
LIABILITIES
Payable for fund shares redeemed............................................... 582
Payable for securities purchased............................................... 38,076
Accrued expenses:
Investment advisory fees..................................................... 5,889
Custodian fees............................................................... 1,017
Professional fees............................................................ 15,665
Directors fees............................................................... 932
Miscellaneous fees........................................................... 1,403
-----------
Total liabilities......................................................... 63,564
-----------
Net assets..................................................................... $17,817,858
===========
Net assets consist of:
Capital stock -- authorized 150,000,000 shares of $.01 par value;
outstanding, 847,107 shares............................................... $ 8,471
Additional paid-in capital................................................... 12,190,315
Undistributed net investment income.......................................... 250,095
Accumulated undistributed net realized gain on investments................... 1,263,966
Net unrealized appreciation of investments................................... 4,105,011
-----------
Total net assets.......................................................... $17,817,858
===========
Net asset value per share of outstanding capital stock
($17,817,858/847,107 shares)................................................. $ 21.03
===========
</TABLE>
See notes to financial statements.
8
<PAGE> 11
MONY SERIES FUND, INC.
EQUITY INCOME PORTFOLIO
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1996 (UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends..................................................................... $ 288,328
Interest...................................................................... 16,585
----------
Total investment income.................................................... 304,913
----------
EXPENSES:
Investment advisory fees (Note 3)............................................. 36,380
Custodian fees................................................................ 5,419
Professional fees............................................................. 5,195
Director fees................................................................. 1,873
Miscellaneous fees............................................................ 1,238
----------
Total expenses............................................................. 50,105
Expense reduction.......................................................... (710)
----------
Net expenses............................................................... 49,395
----------
Net investment income........................................................... 255,518
----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS (NOTE 2):
Realized gain from security transactions:
Proceeds from sales........................................................ 4,026,306
Cost of securities sold.................................................... 2,761,816
----------
Net realized gain on investments................................................ 1,264,490
Net decrease in unrealized appreciation of investments.......................... (196,355)
----------
Net realized and unrealized gain on investments................................. 1,068,135
----------
Net increase in net assets resulting from operations............................ $1,323,653
==========
</TABLE>
See notes to financial statements.
9
<PAGE> 12
MONY SERIES FUND, INC.
EQUITY INCOME PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE SIX FOR THE
MONTHS ENDED YEAR ENDED
JUNE 30, 1996 DECEMBER 31, 1995
------------- -----------------
(UNAUDITED)
<S> <C> <C>
FROM OPERATIONS:
Net investment income......................................... $ 255,518 $ 608,220
Net realized gains on investments (Note 2).................... 1,264,490 365,016
Net increase (decrease) in unrealized appreciation of
investments................................................ (196,355) 3,968,525
----------- -----------
Net increase (decrease) in net assets resulting from
operations.................................................... 1,323,653 4,941,761
----------- -----------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income ($.04 and $.65 per share) (Note 4)...... (34,413) (567,903)
Net realized gain from investment transactions ($.0 and $.41
per share) (Note 4)........................................ 0 (365,016)
----------- ------------
Total dividends and distributions..................... (34,413) (932,919)
----------- -----------
FROM CAPITAL STOCK TRANSACTIONS:
Proceeds from issuance of shares (11,010 and 26,583 shares)
(Note 5)................................................... 224,882 489,847
Proceeds from dividends and distributions reinvested (1,654
and 47,574 shares) (Note 4)................................ 34,413 932,919
Net asset value of shares redeemed (88,314 and 195,103
shares).................................................... (1,821,712) (3,545,498)
----------- -----------
Net decrease in net assets resulting from capital stock
transactions.................................................. (1,562,417) (2,122,732)
----------- -----------
Net increase (decrease) in net assets........................... (273,177) 1,886,110
Net assets beginning of period.................................. 18,091,035 16,204,925
----------- -----------
Net assets end of year (including undistributed net investment
income of $250,095 and $28,990, respectively)................. $17,817,858 $18,091,035
=========== ===========
</TABLE>
See notes to financial statements.
10
<PAGE> 13
MONY SERIES FUND, INC.
EQUITY INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 1996 (UNAUDITED)
VALUE
DESCRIPTION SHARES (NOTE 2)
- -----------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
COMMON STOCKS -- 95.4%
- -----------------------------------------------------------------------------
AEROSPACE/DEFENSE -- 2.4%
Northrop Grumman Corp. 3,000 $ 204,375
TRW Inc. 500 44,938
United Technologies Corp. 1,500 172,500
----------
421,813
AUTOMOBILES -- 1.7%
Chrysler Corp. 1,500 93,000
Ford Motor, Co. 3,000 97,125
General Motors, Corp. 2,000 104,750
----------
294,875
AUTO PARTS -- 1.9%
Dana Corp. 8,000 248,000
Eaton Corp. 1,500 87,938
----------
335,938
BANKS -- 3.0%
Bank of New York Co., Inc. 2,000 102,500
Bankamerica Corp. 2,000 151,500
Bankers Trust New York Corp. 2,000 147,750
Chase Manhattan Corp. 2,000 141,250
----------
543,000
BANK/REGIONAL -- 3.4%
Banc One Corp. 4,000 136,000
First Union Corp. 3,000 182,625
Nationsbank Corp. 2,000 165,250
Wells Fargo & Co. 500 119,438
----------
603,313
CHEMICALS -- 4.7%
Dow Chemical Co. 2,000 152,000
duPont (E.I.) de Nemours & Co. 2,500 197,813
Monsanto Co. 7,500 243,750
Olin Corp. 1,500 133,875
Witco Corp. 3,000 103,125
----------
830,563
CONGLOMERATES -- 4.0%
Gatx Corp. 3,000 144,750
General Signal Corp. 3,500 132,563
Harsco Corp. 2,000 134,500
Ogden Corp. 8,000 145,000
Textron Inc. 2,000 159,750
----------
716,563
COSMETICS -- 1.3%
Avon Products, Inc. 5,000 225,625
DRUGS -- 8.3%
American Home Products Corp. 3,000 180,375
Baxter International, Inc. 3,000 141,750
Bristol Myers Squibb Co. 1,500 135,000
Merck and Co., Inc. 2,000 129,250
Pfizer Inc. 1,500 107,063
Pharmacia & Upjohn Inc. 5,000 221,875
Schering-Plough Corp. 2,000 125,500
Smithkline Beecham PLC 4,000 217,500
Warner Lambert Co. 4,000 220,000
----------
1,478,313
ELECTRICAL EQUIPMENT -- 3.5%
Emerson Electric Co. 3,000 271,125
General Electric, Co. 4,000 346,000
----------
617,125
ELECTRONICS -- 3.7%
AMP, Inc. 4,000 160,500
Harris Corp. 3,000 183,000
Honeywell Inc. 3,000 163,500
Thomas & Betts Corp. 4,000 150,000
----------
657,000
FOREST PRODUCTS -- 1.5%
Georgia Pacific Corp. 2,000 142,000
Weyerhaeuser Co. 3,000 127,500
----------
269,500
HOSPITAL MANAGEMENT -- 0.9%
U.S. Health Care Inc. 3,000 165,000
INSURANCE -- 3.0%
Aetna Life & Casualty Co. 2,000 143,000
Allstate Corp. 3,000 136,875
CIGNA Corp. 1,000 117,875
Lincoln National Corp. 3,000 138,750
----------
536,500
MACHINERY -- 3.3%
Cooper Industries, Inc. 3,000 124,500
Deere & Co. 5,000 200,000
Goulds Pumps, Inc. 4,000 102,500
Timken Co. 4,000 155,000
----------
582,000
METALS -- 3.5%
Carpenter Technology Corp. 4,000 128,000
Freeport McMoRan Copper and
Gold, Inc. 5,000 149,375
Phelps Dodge Corp. 2,000 124,750
Reynolds Metals Co. 2,000 104,250
USX-U.S. Steel 4,000 113,500
----------
619,875
MISCELLANEOUS -- 2.8%
Grace (W.R.) & Co. 2,500 177,188
Minnesota Mining &
Manufacturing Co. 2,500 172,500
Tenneco, Inc. 3,000 153,375
----------
503,063
MISCELLANEOUS FINANCE -- 1.8%
American Express Co. 4,000 178,500
Federal National Mortgage
Assn. 4,000 134,000
----------
312,500
NATURAL GAS -- 0.9%
Consolidated Natural Gas Co. 1,000 52,250
Noram Energy Corp. 500 5,313
Questar Corp. 1,500 51,000
Sonat Inc. 1,000 45,000
----------
153,563
OFFICE & BUSINESS
EQUIPMENT -- 2.6%
Pitney-Bowes, Inc. 3,000 143,250
Xerox Corp. 6,000 321,000
----------
464,250
OIL -- DOMESTIC -- 1.8%
Amoco Corp. 2,000 144,750
Atlantic Richfield Co. 1,500 177,750
----------
322,500
</TABLE>
11
<PAGE> 14
MONY SERIES FUND, INC.
EQUITY INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
JUNE 30, 1996 (UNAUDITED)
VALUE
DESCRIPTION SHARES (NOTE 2)
- -----------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
OIL -- INTERNATIONAL -- 6.9%
British Petroleum 1,517 $ 162,129
Chevron Corp. 4,000 236,000
Exxon Corp. 3,000 260,625
Mobil Corp. 1,500 168,188
Royal Dutch Petroleum Co. 1,500 230,625
Texaco, Inc. 2,000 167,750
----------
1,225,317
OIL-SERVICE & DRILLING -- 2.8%
Dresser Industries, Inc. 5,000 147,500
McDermott International, Inc. 5,000 104,375
Williams (The) Companies Inc. 5,000 247,500
----------
499,375
PAPER -- 1.7%
International Paper Co. 3,000 110,625
Stone Container Corp. 3,000 41,250
Union Camp Corp. 3,000 146,250
----------
298,125
PHOTOGRAPHY -- 1.3%
Eastman Kodak Co. 3,000 233,250
PUBLISHING -- 2.8%
Dun & Bradstreet Corp. 3,000 187,500
McGraw-Hill Companies Inc. 5,000 228,750
Readers Digest Assn. Inc. 2,000 85,000
----------
501,250
RAILROADS -- 1.7%
Conrail Inc. 2,000 132,750
Norfolk Southern Corp. 2,000 169,500
----------
302,250
REAL ESTATE -- 3.7%
Avalon Properties Inc. 2,000 43,500
Bay Apartment Community, Inc. 2,000 51,750
Developers Diversified Realty 2,000 63,750
Equity Residential Properties
Trust 2,000 65,750
Felcor Suite Hotels Inc. 3,200 97,600
Healthcare Property Investors,
Inc. 5,000 168,750
Healthcare Reality Trust 2,000 47,500
Irvine Apartment Communities,
Inc. 2,000 40,250
Meditrust 1,000 33,375
Redwood Trust Inc. 2,000 56,000
----------
668,225
RETAIL SALES -- 1.0%
Penney (J.C.) Co., Inc. 2,000 105,000
May Department Stores Co. 2,000 87,500
----------
192,500
SAVINGS & LOANS -- 1.6%
Ahmanson (H.F.) & Co. 5,000 135,000
Great Western Financial Corp. 6,000 143,250
----------
278,250
SOAPS -- 0.9%
Colgate Palmolive Co. 2,000 169,500
TOBACCO -- 2.2%
American Brands Inc. 3,000 136,125
Philip Morris Companies, Inc. 2,500 260,000
----------
396,125
UTILITIES -- ELECTRIC -- 2.8%
American Electric Power Co.,
Inc. 3,000 127,875
Carolina Power & Light Co. 4,000 152,000
FPL Group, Inc. 2,500 115,000
Southern Co. 4,000 98,500
----------
493,375
UTILITIES -- TELEPHONE -- 6.0%
Ameritech Corp. 2,000 118,750
Bell Atlantic Corp. 1,500 95,625
Bellsouth Corp. 3,000 127,125
GTE Corp. 2,500 111,875
NYNEX Corp. 2,000 95,000
Pacific Telesis Group 5,000 168,750
SBC Communications Inc. 2,000 98,500
Sprint Corp. 4,000 168,000
U.S. West Communications Inc. 3,000 95,621
----------
1,079,246
TOTAL COMMON STOCKS
(COST $12,885,087) $16,989,667
- -----------------------------------------------------------------------------
<CAPTION>
PRINCIPAL AMOUNT
-------------------
<S> <C> <C>
COMMERCIAL PAPER -- 1.0%
- -----------------------------------------------------------------------------
Prudential Life Insurance Co. of
America,
5.3%, due 08/05/96
(cost $174,097) $ 175,000 $ 174,528
- -----------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 2.2%
Freddie Mac Discount Notes,
5.28%, due 07/22/96 $ 100,000 $ 99,692
Freddie Mac Discount Notes,
5.25%, due 07/18/96 50,000 49,876
Freddie Mac Discount Notes,
5.30%, due 07/22/96 250,000 249,228
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(COST $398,796) $ 398,796
- -----------------------------------------------------------------------------
TOTAL INVESTMENTS
(COST $13,457,980) 98.6% $17,562,991
OTHER ASSETS LESS LIABILITIES -- 1.4% 254,867
- -----------------------------------------------------------------------------
NET ASSETS 100.0% $17,817,858
=============================================================================
The aggregate cost of securities for federal income tax purpose
at June 30, 1996 is $13,457,980.
The following amounts are based on costs for federal
income tax purposes:
Aggregate gross unrealized appreciation $ 4,299,978
Aggregate gross unrealized depreciation (194,967)
----------
Net unrealized appreciation $ 4,105,011
==========
</TABLE>
See notes to financial statements.
- --------------------------------------------------------------------------------
Percentages are based on net assets.
12
<PAGE> 15
MONY SERIES FUND, INC.
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION AND BUSINESS
The MONY Series Fund, Inc. (the "Fund"), a Maryland corporation organized
on December 14, 1984, is composed of seven different portfolios that are, in
effect, separate investment funds: the Equity Growth Portfolio, the Equity
Income Portfolio, the Intermediate Term Bond Portfolio, the Long Term Bond
Portfolio, the Government Securities Portfolio (formerly the Intermediate
Government Bond Portfolio), the Money Market Portfolio, and the Diversified
Portfolio. The Fund issues a separate class of capital stock for each portfolio.
Each share of capital stock issued with respect to a portfolio will have a pro-
rata interest in the assets of that portfolio and will have no interest in the
assets of any other portfolio. Each portfolio bears its own liabilities and also
its proportionate share of the general liabilities of the Fund. The Fund is
registered under the Investment Company Act of 1940 (the "1940 Act") as an open
end, diversified, management investment company. This registration does not
imply any supervision by the Securities and Exchange Commission over the Fund's
management. The Equity Income Portfolio is presented here since it is the only
portfolio available to the Individual Plans of the Keynote Series Account
("Keynote").
2. SIGNIFICANT ACCOUNTING POLICIES
A. PORTFOLIO VALUATIONS:
Short-term securities with 61 days or more to maturity at time of purchase
are valued at market through the 61st day prior to maturity, based on quotations
obtained from market makers or other appropriate sources; thereafter, any
unrealized appreciation or depreciation existing on the 61st day is amortized on
a straight-line basis over the remaining number of days to maturity. Short-term
securities with 60 days or less to maturity at time of purchase are valued at
amortized cost. The amortized cost of a security is determined by valuing it at
original cost and thereafter amortizing any discount or premium at a constant
rate until maturity. Securities in the Money Market Portfolio are valued at
amortized cost.
Common stocks traded on national securities exchanges are valued at the
last sales price as of the close of the New York Stock Exchange or at the last
bid price for over-the-counter securities.
All other securities, when held by the Fund, including any restricted
securities, are valued at their fair value as determined in good faith by the
Board of Directors.
B. FEDERAL INCOME TAXES:
Each portfolio of the Fund is a separate entity for federal income tax
purposes and intends to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
taxable income to its shareholders. Therefore, no federal income tax provision
is required.
C. SECURITY TRANSACTIONS AND INVESTMENT INCOME:
Security transactions are recorded as of the trade date.
Dividend income is recorded on the ex-dividend date, income from other
investments is accrued as earned.
Realized gains and losses from investments sold are determined on the basis
of identified cost for accounting and federal income tax purposes.
D. OTHER
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosure of liabilities at
the date of the financial statements and the reported amounts of expenses during
the reporting period. Actual results could differ from these estimates.
Earnings credits received from the custodian are shown as a reduction of
total expenses.
13
<PAGE> 16
MONY SERIES FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. INVESTMENT ADVISORY FEES AND RELATED PARTY TRANSACTIONS
Under an investment Advisory Agreement between the Fund and MONY Life
Insurance Company of America ("Investment Adviser" or "MONY America"), a
wholly-owned subsidiary of The Mutual Life Insurance Company of New York
("MONY"), the Investment Adviser provides investment advice and related services
for each of the Fund's portfolios, administers the overall day-to-day affairs of
the Fund, bears all expenses associated with calculating net asset values of the
portfolios and compensates the directors, officers and employees of the Fund who
are affiliated with the Investment Adviser.
For these services, the Investment Adviser receives an investment
management fee. The fee is a daily charge equal to an annual rate of .40% of the
first $400,000,000 of the aggregate average daily net assets of the portfolios,
.35% of the next $400,000,000 of the aggregated average daily net assets of the
portfolios and .30% of the aggregate average daily net assets of the portfolios
in excess of $800,000,000. Each daily charge is divided among the portfolios in
proportion to their net assets on that date. The Investment Adviser will
reimburse the portfolios for investment management fees charged to the extent
that any portfolio's aggregate ordinary operating expense (excluding interest,
taxes, brokerage fees and commissions, and extraordinary expenses) exceeds in
any fiscal year 2.5% of the first $30,000,000 of the average daily net assets of
such portfolio, 2.0% of the next $70,000,000 of the average daily net assets of
such portfolio, and 1.5% of the daily net assets of the portfolio in excess of
$100,000,000. For the six months ended June 30, 1996, the fee incurred by the
Equity Income Portfolio was $36,380.
The Investment Adviser has a service agreement with MONY to provide it with
personnel, services, facilities, supplies and equipment in order to carry out
its duties to provide investment management services under the Investment
Advisory Agreement. The Investment Adviser will pay MONY for its services.
Aggregate remuneration incurred to non-affiliated Directors of the Fund for
the six months ended June 30, 1996, amounted to $1,873 for the Equity Income
Portfolio.
4. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends and distributions to shareholders are recorded on the ex-dividend
date.
Dividends from investment income of the Equity Income Portfolio will
normally be declared and reinvested annually in additional full and fractional
shares.
The Fund will declare and distribute annually, before the close of its
fiscal year, dividends from net realized capital gains.
Dividends from net investment income and distributions from net realized
capital gains are determined in accordance with U.S. federal income tax
regulations which may differ from generally accepted accounting principles.
Distributions may differ from net investment income and net realized capital
gains recognized for financial reporting purposes due to timing differences,
primarily the deferral of wash sales, and post-October losses.
5. CAPITAL STOCK
A. AUTHORIZED CAPITAL STOCK:
The Fund has 2 billion authorized shares of capital stock with a par value
of $.01 per share. 1.15 million shares are reserved for issuance and divided
into seven classes as follows: Equity Growth Portfolio (150 million shares);
Equity Income Portfolio (150 million shares); Intermediate Term Bond Portfolio
(150 million shares); Long Term Bond Portfolio (150 million shares); Government
Securities Portfolio (150 million shares); Money Market Portfolio (250 million
shares); and Diversified Portfolio (150 million shares). The remaining shares
will be issued to any new or existing class upon approval of the Board of
Directors.
Each outstanding share of capital stock has a pro-rata interest in the
assets of the Portfolio to which the capital stock of that class relates and has
no interest in the assets of any other portfolio.
B. PURCHASES OF FUND SHARES:
Shares of the Fund are sold to MONY Life Insurance Company of America and
MONY for allocation to MONY America Variable Account L and MONY Variable Account
L to fund benefits under Flexible Premium Variable Life
14
<PAGE> 17
MONY SERIES FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
5. CAPITAL STOCK (CONTINUED)
B. PURCHASES OF FUND SHARES: (CONTINUED)
Insurance Contracts; to MONY America Variable Account S and MONY Variable
Account S to fund benefits under Variable Life Insurance with Additional Premium
Option Contracts; and to MONY America Variable Account A and MONY Variable
Account A, to fund benefits under Flexible Payment Variable Annuity Contracts
issued by those companies. Shares of the Fund are also sold to MONY for
allocation to Keynote to fund benefits under Individual Plans issued by MONY.
6. PURCHASES AND SALES OF INVESTMENTS
The aggregate cost of investments purchased and proceeds from sales or
maturities, other than short-term investments, for the six months ended June 30,
1996 were $3,253,194 and $4,373,805, respectively.
15
<PAGE> 18
MONY SERIES FUND, INC.
EQUITY INCOME PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD:
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED FOR THE YEARS ENDED DECEMBER 31,
JUNE 30, ---------------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990
------------ ------------ ------------ ------------ ------------ ------------ ------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period................. $ 19.61 $ 15.53 $ 16.43 $ 15.56 $ 14.64 $ 12.70 $ 14.26
----------- ----------- ----------- ------------ ------------ ------------ -----------
Income from investment
operations
Net investment income..... 0.30 0.69 0.64 0.52 0.59 0.64 0.54
Net gains (losses) on
investments (both
realized and
unrealized)............. 1.16 4.45 (0.51) 1.68 0.92 1.94 (1.50)
----------- ----------- ----------- ------------ ------------ ------------ -----------
Total from investment
operations............ 1.46 5.14 0.13 2.20 1.51 2.58 (0.96)
Less distributions
Dividends (from net
investment income)...... (0.04) (0.65) (0.64) (0.52) (0.59) (0.64) (0.60)
Distributions (from
realized capital
gains).................. 0.00 (0.41) (0.39) (0.81) 0.00* 0.00* 0.00
----------- ----------- ----------- ------------ ------------ ------------ -----------
Total distributions..... (0.04) (1.06) (1.03) (1.33) (0.59) (0.64) (0.60)
Net asset value, end of
period.................... $ 21.03 $ 19.61 $ 15.53 $ 16.43 $ 15.56 $ 14.64 $ 12.70
=========== =========== =========== ============ ============ ============ ===========
Total return............ 15.51%+ 33.12% 0.78% 14.14% 10.31% 20.31% (6.73%)
Ratios/Supplemental Data
Net assets, end of period... $17,817,858 $18,091,035 $16,204,925 $151,330,311 $121,540,392 $118,114,947 $99,878,151
Average commission rate..... $ 0.05 N/A N/A N/A N/A N/A N/A
Ratio of net investment
income to average net
assets.................... 1.41% 3.54% 3.53% 3.22% 3.68% 4.46% 5.39%
Ratio of expenses to average
net assets................ 0.28% 0.56% 0.48% 0.46% 0.46% 0.49% 0.52%
Portfolio turnover rate..... 18.58% 26.80% 32.48% 28.48% 35.62% 25.84% 8.89%
<CAPTION>
1989 1988 1987 1986
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net asset value, beginning
of period................. $ 12.67 $ 12.03 $ 13.03 $ 11.30
---------- ---------- ---------- ----------
Income from investment
operations
Net investment income..... 0.64 0.70 0.44 0.42
Net gains (losses) on
investments (both
realized and
unrealized)............. 2.20 1.64 0.54 1.74
---------- ---------- ---------- ----------
Total from investment
operations............ 2.84 2.34 0.98 2.16
Less distributions
Dividends (from net
investment income)...... (0.64) (0.66) (0.77) (0.43)
Distributions (from
realized capital
gains).................. (0.61) (1.04) (1.21) 0.00
---------- ---------- ---------- ----------
Total distributions..... (1.25) (1.70) (1.98) (0.43)
Net asset value, end of
period.................... $ 14.26 $ 12.67 $ 12.03 $ 13.03
========== ========== ========== ==========
Total return............ 22.42% 19.45% 7.52% 19.12%
Ratios/Supplemental Data
Net assets, end of period... $6,185,876 $5,054,514 $2,945,497 $2,776,312
Average commission rate..... N/A N/A N/A N/A
Ratio of net investment
income to average net
assets.................... 4.66% 5.24% 3.02% 3.30%
Ratio of expenses to average
net assets................ 0.88% 0.91% 1.50% 1.50%
Portfolio turnover rate..... 19.55% 22.70% 13.73% 25.70%
</TABLE>
- ---------------
* Less than $.01 per share.
+ Annualized
16
<PAGE> 19
MONY SERIES FUND, INC.
1740 BROADWAY
NEW YORK, NEW YORK 10019
<TABLE>
<S> <C>
DIRECTORS AND PRINCIPAL OFFICERS
Kenneth M. Levine Chairman, President and Director
Joel Davis Director
Michael J. Drabb Director
Alan J. Hartnick Director
Floyd L. Smith Director
Edward E. Hill Vice President-Compliance
David V. Weigel Treasurer
John P. Keller Controller
Frederick C. Tedeschi Secretary
INVESTMENT ADVISER
MONY Life Insurance Co. of America
1740 Broadway
New York, New York 10019
PRINCIPAL UNDERWRITER AND DISTRIBUTOR
MONY Securities Corp.
1740 Broadway
New York, New York 10019
CUSTODIAN
Chemical Bank
277 Park Avenue
New York, New York 10172
TRANSFER AGENT
The Mutual Life Insurance Co. of
New York
1740 Broadway
New York, New York 10019
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.
1301 Avenue of the Americas
New York, New York 10019
</TABLE>
<PAGE> 20
LOGO
MUTUAL OF NEW YORK
One MONY Plaza
PO Box 48-30
Syracuse, New York 13221
The Mutual Life Insurance Company of New York, New York, NY
