<PAGE> 1
[KEYNOTE SERIES ACCOUNT LOGO]
---------------------------------
MONY LIFE INSURANCE COMPANY
---------------------------------
SEMI-ANNUAL REPORT
JUNE 30, 1999
<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 Shareholders,
The big story for the financial markets in the second quarter was the
ongoing process of global recovery from last fall's crisis. The world is slowly
getting better, not in all areas and not all at the same pace, but things are
moving in the right direction. The major contributor to the healing process has
been accommodative monetary policies by central banks which lowered interest
rates. The U.S. continues as the locomotive of growth, but Southeast Asia and
Latin American are beginning to recover and should also help. Europe is showing
mixed results and Japan is just beginning to restructure, but both areas could
improve over the next year.
U.S. growth has been very strong led by the consumer, who has been
encouraged by the stronger stock market, bigger than expected tax refunds and
favorable employment trends in the first quarter. This growth, which has been
somewhat stronger than the Federal Reserve and the bond market feel comfortable
with, should moderate as the year goes on. Interest rates have risen, as have
energy and food prices, reducing discretionary income. Tax refunds and bonus
payouts were a first quarter one time event. The Fed, concerned about future
inflation, will be actively moving to slow the economy down by raising short
term interest rates, effectively rescinding last fall's crisis related easing.
This combination should help bring growth back to more acceptable levels.
As a result of better worldwide economic and financial conditions,
corporate profit growth will be stronger. The cyclical sectors in particular
should benefit from improvement abroad, even if U.S. growth moderates as
expected. This is important for the stock market because the rise in long-term
interest rates has materially worsened valuations, which were already rich by
historical standards. Although long rates are expected to ease as economic
growth moderates, stock valuation models need a healthy corporate profit gain to
keep valuations from becoming even more excessive. The stock market has been
laboring recently under the weight of economic, interest rate, and profit
cross-currents. A correction here is quite possible and would be healthy for the
longevity of the bull market. The bond market, on the other hand, has already
experienced a significant correction, and at current levels looks relatively
attractive. A major market decline in the financial markets is not expected,
unless the economy fails to slow, and the Federal Reserve becomes aggressively
restrictive both in words and actions.
Sincerely,
/s/ KENNETH M. LEVINE
Kenneth M. Levine
Chairman
1
<PAGE> 4
KEYNOTE SERIES ACCOUNT
STATEMENTS OF ASSETS AND LIABILITIES June 30, 1999 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
IVA SUBACCOUNT
---------------------------------------
NON-TAX VARIABLE
TAX QUALIFIED QUALIFIED PAYOUTS
------------- --------- --------
<S> <C> <C> <C>
ASSETS
Investments at cost (Note 4)............................ $12,043,960 $2,901,951 $79,678
=========== ========== =======
Investments in MONY Series Fund, Inc. at net asset
value (Note 2)................................... $14,842,342 $3,352,522 $75,047
Amount due from MONY............................... 0 0 2,234
Amount due from MONY Series Fund, Inc.............. 6,303 0 0
----------- ---------- -------
Total assets............................................ 14,848,645 3,352,522 77,281
----------- ---------- -------
LIABILITIES
Amount due to MONY...................................... 6,303 0 0
Amount due to MONY Series Fund, Inc..................... 0 0 2,234
----------- ---------- -------
Net assets.............................................. $14,842,342 $3,352,522 $75,047
=========== ========== =======
Net assets consist of:
Contractholders' net payments...................... $(2,622,773) $ (528,614) $39,565
Undistributed net investment income................ 9,324,204 2,059,455 24,625
Accumulated net realized gain on investments....... 5,342,529 1,371,110 15,488
Unrealized appreciation (depreciation) of
investments...................................... 2,798,382 450,571 (4,631)
----------- ---------- -------
Net assets.............................................. $14,842,342 $3,352,522 $75,047
=========== ========== =======
Number of units outstanding*............................ 97,711 23,612 504
----------- ---------- -------
Net asset value per unit outstanding*................... $ 151.90 $ 141.99 $149.00
=========== ========== =======
* Units outstanding have been rounded for presentation purposes.
</TABLE>
See notes to financial statements.
2
<PAGE> 5
KEYNOTE SERIES ACCOUNT
STATEMENTS OF OPERATIONS For the six months ended June 30, 1999 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
IVA SUBACCOUNT
--------------------------------------
NON-TAX VARIABLE
TAX-QUALIFIED QUALIFIED PAYOUTS
------------- --------- --------
<S> <C> <C> <C>
Dividend income.......................................... $ 2,484,126 $ 563,919 $10,024
Mortality and expense risk charges (Note 3).............. (72,163) (16,338) 0
----------- --------- -------
Net investment income.................................... 2,411,963 547,581 10,024
----------- --------- -------
Realized and unrealized gain (loss) on investments (Note
2):
Proceeds from sales.................................... 920,082 310,138 10,418
Cost of shares sold.................................... (448,315) (168,505) (9,126)
----------- --------- -------
Net realized gain on investments......................... 471,767 141,633 1,292
Net decrease in unrealized appreciation of investments... (1,209,279) (316,346) (6,887)
----------- --------- -------
Net realized and unrealized loss on investments.......... (737,512) (174,713) (5,595)
----------- --------- -------
Net increase in net assets resulting from operations..... $ 1,674,451 $ 372,868 $ 4,429
=========== ========= =======
</TABLE>
See notes to financial statements.
3
<PAGE> 6
KEYNOTE SERIES ACCOUNT
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
IVA SUBACCOUNT
----------------------------------------------------------------------------------------
TAX NON-TAX VARIABLE
QUALIFIED QUALIFIED PAYOUTS
---------------------------- --------------------------- ---------------------------
FOR THE SIX FOR THE FOR THE SIX FOR THE FOR THE SIX FOR THE
MONTHS ENDED YEAR ENDED MONTHS ENDED YEAR ENDED MONTHS ENDED YEAR ENDED
JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31,
1999 1998 1999 1998 1999 1998
------------- ------------ ------------ ------------ ------------ ------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment
income............... $ 2,411,963 $ 2,190,431 $ 547,581 $ 499,205 $ 10,024 $ 2,904
Net realized gain
(loss) on
investments.......... 471,767 1,139,997 141,633 554,084 1,292 (573)
Net increase (decrease)
in unrealized
appreciation of
investments.......... (1,209,279) (1,780,657) (316,346) (663,529) (6,887) 2,156
----------- ----------- ---------- ---------- -------- ---------
Net increase in net assets
resulting from
operations................ 1,674,451 1,549,771 372,868 389,760 4,429 4,487
----------- ----------- ---------- ---------- -------- ---------
FROM UNIT TRANSACTIONS:
Net proceeds from the
issuance of units.... 146,987 248,720 4,474 14,437 47,427 107,936
Net asset value of
units redeemed or
used to meet contract
obligations.......... (846,856) (2,342,032) (293,781) (688,766) (10,416) (117,218)
----------- ----------- ---------- ---------- -------- ---------
Net increase (decrease) from
unit transactions......... (699,869) (2,093,312) (289,307) (674,329) 37,011 (9,282)
----------- ----------- ---------- ---------- -------- ---------
Net increase (decrease) in
net assets................ 974,582 (543,541) 83,561 (284,569) 41,440 (4,795)
Net assets beginning of
period.................... 13,867,760 14,411,301 3,268,961 3,553,530 33,607 38,402
----------- ----------- ---------- ---------- -------- ---------
Net assets end of period*... $14,842,342 $13,867,760 $3,352,522 $3,268,961 $ 75,047 $ 33,607
=========== =========== ========== ========== ======== =========
Units outstanding beginning
of period................. 102,567 118,885 25,866 31,362 255 328
Units issued during the
period.................... 521 1,838 34 89 324 883
Units redeemed during the
period.................... (5,377) (18,156) (2,288) (5,585) (75) (956)
----------- ----------- ---------- ---------- -------- ---------
Units outstanding end of
period.................... 97,711 102,567 23,612 25,866 504 255
=========== =========== ========== ========== ======== =========
* Includes undistributed net
investment income of: $ 9,324,204 $ 6,912,241 $2,059,455 $1,511,874 $ 24,625 $ 14,601
</TABLE>
See notes to financial statements.
4
<PAGE> 7
KEYNOTE SERIES ACCOUNT
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. ORGANIZATION AND BUSINESS:
Keynote Series Account ("Keynote") is a separate investment account
established on December 16, 1987 by MONY Life Insurance Company ("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
owner of the assets in Keynote. This report contains information related to
Individual Plans only.
There is one separate account which consists of three subaccounts, two of
which are available to Individual Plans. They all invest soley in the Equity
Income Portfolio (the "Portfolio") of the MONY Series Fund, Inc. (the "Fund").
The Fund is registered under the 1940 Act as an open end, diversified,
management investment company.
The financial statements of the Portfolio, including the portfolio of
investments, are contained on pages hereinafter of this report and should be
read in conjunction with these financial statements.
2. SIGNIFICANT ACCOUNTING POLICIES
A. Investment Valuation:
The investment in shares of the Fund's Portfolio is stated at net asset
value. The Fund's Portfolio net asset value is based upon market valuations of
the securities held.
B. Taxes
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.
3. RELATED PARTY TRANSACTIONS
Because Keynote purchases shares of the Fund's Portfolio, the net assets of
Keynote reflect the Portfolio's 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% of the average daily net assets of
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 (UNAUDITED) (CONTINUED)
4. INVESTMENTS
Investments in the Equity Income Portfolio of the MONY Series Fund, Inc. at
cost, at June 30, 1999 consist of the following:
<TABLE>
<CAPTION>
IVA SUBACCOUNT
-----------------------------------------
TAX NON-TAX VARIABLE
QUALIFIED QUALIFIED PAYOUTS
----------- ---------- ------------
<S> <C> <C> <C>
Shares beginning of period:
Shares........................................... 534,403 125,970 1,295
Amount........................................... $ 9,860,099 $2,502,044 $31,351
----------- ---------- -------
Share acquired:
Shares........................................... 5,464 174 1,745
Amount........................................... $ 148,050 $ 4,493 $47,429
Shares received for reinvestment of dividends:
Shares........................................... 101,892 23,130 411
Amount........................................... $ 2,484,126 $ 563,919 $10,024
Shares redeemed:
Shares........................................... (35,207) (12,270) (384)
Amount........................................... $ (448,315) $ (168,505) $(9,126)
----------- ---------- -------
Net change:
Shares........................................... 72,149 11,034 1,772
Amount........................................... $ 2,183,861 $ 399,907 $48,327
----------- ---------- -------
Shares end of period:
Shares........................................... 606,552 137,004 3,067
Amount........................................... $12,043,960 $2,901,951 $79,678
=========== ========== =======
</TABLE>
6
<PAGE> 9
MONY SERIES FUND, INC.
EQUITY INCOME PORTFOLIO
When the financial crisis hit world markets last year, investors responded
by moving into the biggest and best companies. The expectation was that in a
hostile and uncertain world the safest place to be was in the most financially
secure, most broadly diversified and highest growth stocks. As money poured in,
these stocks rose at the expense of the rest of the market; and the popular
averages which were dominated by the big cap growth names, outperformed
everything else.
Now with the world on the mend, and the outlook for corporate profits
improving, the market has begun to broaden out. During the second quarter this
has resulted in increased investor interest in economy sensitive stocks and in
mid cap and some smaller cap names. Many of these stocks went through their own
bear market last year, declining while the popular averages rose. This year may
see the reverse of the past several years pattern -- the big cap dominated
averages underperform the average stock.
The Equity Income Fund has a substantial emphasis on the economy sensitive
sectors. Cyclicals -- basic materials, capital spending related and energy
stocks -- moved up during the quarter, but still represent value. They are
relatively underowned, went through bear market size declines last year and
should experience an improving earnings outlook. They suffered the most from the
crisis and should benefit the most from the ending of the crisis and the
beginning of economic and financial recovery.
7
<PAGE> 10
MONY SERIES FUND, INC.
EQUITY INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
DESCRIPTION SHARES (NOTE 2)
- -----------------------------------------------------------------
<S> <C> <C>
COMMON STOCK -- 98.5%
- -----------------------------------------------------------------
AEROSPACE/DEFENSE -- 2.3%
Northrop Grumman Corp. 3,000 $ 198,938
United Technologies Corp. 4,000 286,750
-----------
485,688
-----------
AUTOMOBILES -- 2.2%
Ford Motor Co. 4,500 253,969
General Motors Corp. 3,000 198,000
-----------
451,969
-----------
AUTOMOTIVE PARTS -- 2.2%
Dana Corp. 4,000 184,250
Delphi Automotive Systems Corp. 2,100 38,981
Eaton Corp. 2,500 230,000
-----------
453,231
-----------
BANKS/MAJOR -- 5.8%
Bank of New York, Inc. 6,000 220,125
BankAmerica Corp. 4,300 315,244
Chase Manhattan Corp. 3,700 320,512
Citigroup Inc. 7,200 342,000
-----------
1,197,881
-----------
BANKS/REGIONAL -- 3.8%
BankBoston Corp. 4,000 204,500
Fleet Financial Group, Inc. 3,600 159,750
Mellon Bank Corp. 6,000 218,250
Wells Fargo & Co. 5,000 213,750
-----------
796,250
-----------
CHEMICALS -- 3.3%
Dow Chemical Co. 2,200 279,125
DuPont (E.I.) de Nemours & Co. 3,500 239,094
Rohm & Haas Co. 4,000 171,500
-----------
689,719
-----------
CONGLOMERATES -- 5.1%
Honeywell Inc. 2,700 312,863
Minnesota Mining & Manufacturing Co. 2,200 191,262
Textron, Inc. 2,500 205,781
Tyco Int'l Ltd. 3,500 331,625
-----------
1,041,531
-----------
CONTAINERS AND PACKAGING -- 0.9%
Temple-Inland, Inc. 2,800 191,100
-----------
COSMETICS -- 1.9%
Avon Products, Inc. 7,000 388,500
-----------
DRUGS -- 7.7%
American Home Products Corp. 5,000 287,500
Baxter International, Inc. 4,000 242,500
Bristol-Myers Squibb Co. 4,400 309,925
Merck & Co., Inc. 2,500 185,000
Pharmacia & UpJohn, Inc. 4,000 227,250
SmithKline Beecham, PLC, ADR 4,000 264,250
Warner Lambert Co. 1,000 69,375
-----------
1,585,800
-----------
ELECTRICAL EQUIPMENT -- 4.2%
Emerson Electric Co. 4,000 251,500
General Electric Co. 5,500 621,500
-----------
873,000
-----------
ELECTRONICS -- 0.5%
Thomas & Betts Corp. 2,000 94,500
-----------
FINANCIAL SERVICES -- 1.4%
Morgan (JP) & Co. Inc. 2,000 281,000
-----------
FOREST PRODUCT -- 1.2%
Weyerhaeuser Co. 3,500 240,625
-----------
INSURANCE -- 4.3%
Chubb Corp. 2,500 173,750
CIGNA Corp. 4,500 400,500
Lincoln National Corp. 6,000 313,875
-----------
888,125
-----------
MACHINERY -- 2.2%
Caterpillar Inc. 4,300 258,000
Deere & Co. 5,000 198,125
-----------
456,125
-----------
METALS -- 1.7%
ALCOA Inc. 3,300 204,188
Phelps-Dodge Corp. 2,500 154,844
-----------
359,032
-----------
NATURAL GAS -- 4.1%
Consolidated Natural Gas Co. 4,500 273,375
El Paso Energy Corp. 6,800 239,275
Enron Corp. 4,000 327,000
-----------
839,650
-----------
OFFICE & BUSINESS EQUIPMENT -- 3.3%
Pitney-Bowes, Inc. 4,500 289,125
Xerox Corp. 6,500 383,906
-----------
673,031
-----------
OIL -- DOMESTIC -- 2.2%
BP Amoco, PLC Sponsored ADR 2,500 271,250
Atlantic Richfield Co. 2,200 183,838
-----------
455,088
-----------
OIL -- INTERNATIONAL -- 4.8%
Chevron Corp. 2,200 209,413
Exxon Corp. 4,000 308,500
Mobil Corp. 3,000 297,000
Texaco, Inc. 3,000 187,500
-----------
1,002,413
-----------
OIL -- SERVICES & DRILLING -- 5.9%
Baker Hughes Inc. 5,500 184,250
Diamond Offshore Drilling Inc. 5,500 156,063
Halliburton Holdings Co. 5,000 226,250
Schlumberger LTD 3,500 222,906
Williams (The) Companies, Inc. 10,000 425,625
-----------
1,215,094
-----------
PAPER & PAPER PRODUCTS -- 4.8%
Bowater, Inc. 4,000 189,000
Georgia-Pacific Group 7,000 331,625
International Paper Co. 9,500 479,750
-----------
1,000,375
-----------
PUBLISHING -- 1.4%
McGraw-Hill Companies, Inc. 5,500 296,656
-----------
</TABLE>
See notes to financial statements.
8
<PAGE> 11
MONY SERIES FUND, INC.
EQUITY INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
DESCRIPTION SHARES (NOTE 2)
- -----------------------------------------------------------------
<S> <C> <C>
REAL ESTATE INVESTMENT TRUSTS -- 2.6%
Avalon Bay Communities, Inc. 2,500 $ 92,500
Boston Properties Inc. 3,000 107,625
Crescent Real Estate Equities Trust 5,000 118,750
Equity Office Properties Trust 4,500 115,313
Equity Residential Properties Trust 2,500 112,656
-----------
546,844
-----------
SOAPS -- 0.9%
Colgate-Palmolive Co. 2,000 197,500
-----------
TOBACCO -- 0.6%
Philip Morris Companies, Inc. 3,000 120,563
-----------
U.S. GOVERNMENT AGENCIES -- 0.8%
Federal National Mortgage Assn. 2,500 170,938
-----------
UTILITIES -- ELECTRIC -- 3.8%
CMS Energy Corp. 3,000 125,625
Carolina Power & Light Co. 4,000 171,250
Duke Energy Corp. 4,000 217,500
Edison Int'l 6,000 160,500
FPL Group, Inc. 2,000 109,250
-----------
784,125
-----------
UTILITIES -- TELEPHONE -- 12.6%
AT&T Corp. 6,200 346,034
Ameritech Corp. 4,500 330,750
Bell Atlantic Corp. 4,500 294,188
Bellsouth Corp. 6,000 281,250
Frontier Corp. 4,500 265,500
GTE Corp. 4,000 303,000
SBC Communications, Inc. 5,800 336,400
Sprint Corp. "FON" 4,000 211,250
US West Inc. 4,000 235,000
-----------
2,603,372
-----------
TOTAL COMMON STOCKS
(COST $12,833,927) $20,379,725
- -----------------------------------------------------------------
PRINCIPAL
AMOUNT
--------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 1.2%
- -----------------------------------------------------------------
Federal Home Loan Mortgage Corp.,
4.98%, due 08/19/99 $100,000 $ 99,322
Federal National Mortgage Assn.,
4.90%, due 08/16/99 150,000 149,061
-----------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(COST $248,383) $ 248,383
- -----------------------------------------------------------------
TOTAL INVESTMENTS
(COST $13,082,310) -- 99.7% $20,628,108
OTHER ASSETS LESS LIABILITIES -- 0.3% 66,748
- -----------------------------------------------------------------
NET ASSETS -- 100.0% $20,694,856
=================================================================
</TABLE>
The aggregate cost of securities for Federal income tax purpose at June 30, 1999
is $13,069,083.
The following amounts are based on costs for Federal income tax purposes:
<TABLE>
<S> <C>
Aggregate gross unrealized appreciation $ 7,617,370
Aggregate gross unrealized depreciation (58,345)
-----------
Net unrealized appreciation $ 7,559,025
===========
</TABLE>
See notes to financial statements.
- --------------------------------------------------------------------------------
ADR = American Depository Receipt.
Percentages are based on net assets.
9
<PAGE> 12
MONY SERIES FUND, INC.
EQUITY INCOME PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Securities, at value (Note 2)*.............................. $20,628,108
Cash........................................................ 73,602
Dividends receivable........................................ 30,904
Receivable for fund shares sold............................. 2,271
-----------
Total assets...................................... 20,734,885
-----------
LIABILITIES
Payable for fund shares redeemed............................ 6,587
Accrued expenses:
Investment advisory fees............................... 9,320
Custodian fees......................................... 7,190
Accounting fees........................................ 2,607
Professional fees...................................... 13,556
Miscellaneous fees..................................... 769
-----------
Total liabilities................................. 40,029
-----------
NET ASSETS.................................................. $20,694,856
===========
Net assets consist of:
Capital stock-$.01 par value........................... $ 8,457
Additional paid-in capital............................. 11,756,573
Undistributed net investment income.................... 159,192
Undistributed net realized gain on investments......... 1,224,836
Net unrealized appreciation of investments............. 7,545,798
-----------
NET ASSETS.................................................. $20,694,856
===========
Shares of capital stock outstanding......................... 845,670
-----------
Net asset value per share of outstanding capital stock...... $ 24.47
===========
*Investments at cost........................................ $13,082,310
</TABLE>
See notes to financial statements.
10
<PAGE> 13
MONY SERIES FUND, INC.
EQUITY INCOME PORTFOLIO
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1999 (UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest............................................... $ 6,472
Dividends.............................................. 226,121
----------
Total investment income........................... 232,593
----------
EXPENSES:
Investment advisory fees (Note 3)...................... 49,879
Custodian fees......................................... 4,975
Accounting fees (Note 3)............................... 13,703
Professional fees...................................... 4,281
Directors fees......................................... 678
Miscellaneous fees..................................... 323
----------
Total expenses.................................... 73,839
Expenses reduced by a custodian fee arrangement... (439)
----------
Net expenses...................................... 73,400
----------
Net investment income....................................... 159,193
----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS (NOTE 2):
Realized gain from security transactions (excluding
short-term securities):
Proceeds from sales............................... 3,980,792
Less: Cost of securities sold..................... 2,769,184
----------
Net realized gain on investments............................ 1,211,608
Net increase in unrealized appreciation of investments...... 1,067,041
----------
Net realized and unrealized gain on investments............. 2,278,649
----------
Net increase in net assets resulting from operations........ $2,437,842
==========
</TABLE>
See notes to financial statements.
11
<PAGE> 14
MONY SERIES FUND, INC.
EQUITY INCOME PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE SIX FOR THE
MONTHS ENDED YEAR ENDED
JUNE 30, DECEMBER 31,
1999 1998
------------ ------------
(UNAUDITED)
<S> <C> <C>
FROM OPERATIONS:
Net investment income.................................. $ 159,193 $ 375,239
Net realized gain on investments (Note 2).............. 1,211,608 3,086,639
Net increase (decrease) in unrealized appreciation of
investments........................................... 1,067,041 (1,030,272)
----------- -----------
Net increase in net assets resulting from operations........ 2,437,842 2,431,606
----------- -----------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (Note 4)......................... (365,229) (632,565)
Net realized gain from investment transactions (Note
4).................................................... (3,095,880) (2,642,564)
----------- -----------
Total dividends and distributions to
shareholders...................................... (3,461,109) (3,275,129)
----------- -----------
FROM SHARE TRANSACTIONS:
Proceeds from the issuance of shares................... 417,265 796,187
Proceeds from dividends and distributions reinvested... 3,461,109 3,275,129
Net asset value of shares redeemed..................... (1,961,738) (4,147,192)
----------- -----------
Net increase (decrease) in net assets resulting from share
transactions.............................................. 1,916,636 (75,876)
----------- -----------
Net increase (decrease) in net assets....................... 893,369 (919,399)
Net assets beginning of period.............................. 19,801,487 20,720,886
----------- -----------
Net assets end of period*................................... $20,694,856 $19,801,487
=========== ===========
Shares issued and redeemed:
Issued................................................. 15,318 29,633
Issued in reinvestment of dividends and
distributions......................................... 141,965 126,845
Redeemed............................................... (74,580) (158,014)
----------- -----------
Net increase (decrease) in outstanding shares..... 82,703 (1,536)
=========== ===========
* Including undistributed net investment income of: $ 159,192 $ 365,228
</TABLE>
See notes to financial statements.
12
<PAGE> 15
MONY SERIES FUND, INC.
EQUITY INCOME PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. ORGANIZATION AND BUSINESS
The Equity Income Portfolio (the "Portfolio") is one of the portfolios
offered within the MONY Series Fund, Inc. (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.
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 Portfolio, including any restricted
securities, are valued at their fair value as determined in good faith by the
Board of Directors. As of June 30, 1999, there were no such securities.
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 of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and 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.
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MONY SERIES FUND, INC.
EQUITY INCOME PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
3. INVESTMENT ADVISORY FEES AND RELATED PARTY TANSACTIONS
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 MONY Life Insurance Company ("MONY"), the Investment
Adviser provides investment advice and related services for the Portfolio,
administers the overall day-to-day affairs of the Portfolio, bears all expenses
associated with organizing the Fund, the initial registration of its securities,
and the compensation of the directors, officers and employees of the Portfolio
who are affiliated with the Investment Adviser.
For these services, the Investment Adviser receives an investment advisory
fee. The fee is a daily charge equal to an annual rate of .50% of the first
$400,000,000 of the average daily net assets of the Portfolio; .35% of the next
$400,000,000 of the average daily net assets of the Portfolio; and .30% of the
average daily net assets of the Portfolio in excess of $800,000,000. Prior to
October 14, 1997, the fee for the first $400,000,000 was .40% of the aggregate
average daily net assets for all of the Fund's portfolios. For the six months
ended June 30, 1999, the fees incurred by the Equity Income Portfolio was
$49,879. On October 15, 1997, the Investment Adviser began assessing the Fund an
accounting fee. This fee is based on an allocation of expenses borne by the
Investment Adviser for personnel, facilities and services necessary to calculate
the portfolios' daily net asset values. The fee is allocated to the Portfolios
at $25,000 per portfolio, per annum, with the excess of the Investment Adviser's
expenses allocated to each portfolio daily based on each portfolio's net assets
in relation to the total net assets of the Fund.
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. MONY also provides transfer agent services to the Portolio.
The Investment Adviser pays MONY for these services.
Directors' fees incurred for non-affiliated Directors of the Fund for the
six months ended June 30, 1999, amounted to $678 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 net investment income and net realized capital gains, if
any, of the Equity Income Portfolio will normally be declared and reinvested
annually in additional full and fractional shares.
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.
At December 31, 1998, the Equity Income Portfolio increased undistributed
realized gains by $10,010, and decreased undistributed net investment income by
$10,010. These differences are primarily due to return of capital distribution
received on investments.
5. CAPITAL STOCK
A. Authorized Capital Stock:
The Equity Income Portfolio has 150 million authorized shares of capital
stock with a par value of $.01 per share.
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MONY SERIES FUND, INC.
EQUITY INCOME PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
5. CAPITAL STOCK (CONTINUED)
B. Purchases of Portfolio Shares:
Shares of the Portfolio are sold to MONY America and MONY for allocation to
MONY America Variable Account L and MONY Variable Account L to fund benefits
under Flexible Premium Variable Life 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 the Keynote Series Account ("Keynote")
to fund benefits under Individual Annuity 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,
1999, were $2,502,045 and $3,980,792, respectively.
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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, -------------------------------------------------------------------
1999 1998 1997 1996 1995 1994
------------ ----------- ----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period............................ $ 25.95 $ 27.10 $ 23.44 $ 19.61 $ 15.53 $ 16.43
----------- ----------- ----------- ----------- ----------- -----------
Income from investment operations
Net investment income............. 0.22 0.78 0.61 0.98 0.69 0.64
Net gains (losses) on investments
(both realized and
unrealized)..................... 3.11 2.62 5.96 2.89 4.45 (0.51)
----------- ----------- ----------- ----------- ----------- -----------
Total from investment
operations.................... 3.33 3.40 6.57 3.87 5.14 0.13
----------- ----------- ----------- ----------- ----------- -----------
Less distributions
Dividends (from net investment
income)......................... (0.51) (0.88) (1.00) (0.04) (0.65) (0.64)
Distributions (from realized
capital gains).................. (4.30) (3.67) (1.91) 0.00 (0.41) (0.39)
----------- ----------- ----------- ----------- ----------- -----------
Total distributions............. (4.81) (4.55) (2.91) (0.04) (1.06) (1.03)
----------- ----------- ----------- ----------- ----------- -----------
Net asset value, end of period...... $ 24.47 $ 25.95 $ 27.10 $ 23.44 $ 19.61 $ 15.53
=========== =========== =========== =========== =========== ===========
Total return.................... 12.89% 12.63% 31.26% 19.76% 33.12% 0.78%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period........... $20,694,856 $19,801,487 $20,720,886 $18,572,347 $18,091,035 $16,204,925
Ratio of net investment income to
average net assets................ 1.60%+ 1.88% 2.20% 2.79% 3.54% 3.53%
Ratio of expenses to average net
assets............................ 0.74%+ 0.76% 0.59% 0.55% 0.56% 0.48%
Portfolio turnover rate............. 12.71% 27.71% 29.32% 29.37% 26.80% 32.48%
</TABLE>
- ---------------
+ Annualized
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<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
Robert H. Kramer Vice President-Compliance
David V. Weigel Treasurer
John P. Keller Controller
Frederick C. Tedeschi Secretary
INVESTMENT ADVISER
MONY Life Insurance Company of America
1740 Broadway
New York, New York 10019
PRINCIPAL UNDERWRITER AND DISTRIBUTOR
MONY Securities Corporation
1740 Broadway
New York, New York 10019
CUSTODIAN
Chase Manhattan Bank
4 New York Plaza
New York, New York 10004
TRANSFER AGENT
MONY Life Insurance Company
1740 Broadway
New York, New York 10019
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036
</TABLE>
<PAGE> 20
[KEYSTONE SERIES ACCOUNT LOGO]
MONY LIFE INSURANCE COMPANY
One MONY Plaza
PO Box 48-30
Syracuse, New York 13221
MONY Life Insurance Company, New York, NY
