<PAGE> 1
[KEYNOTE SERIES ACCOUNT LOGO]
---------------------------------
MONY LIFE INSURANCE COMPANY
---------------------------------
SEMI-ANNUAL REPORT
JUNE 30, 2000
<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,
The economy finally began to show some signs of slower growth during the
second quarter. The combination of higher interest rates, particularly for
mortgages; rising energy costs, especially at the gas pump; and stock market
weakness; notably in popular technology names, all served to impact consumer
spending. Retail sales and auto sales were weaker, housing activity slowed and
permits declined. The economy is still strong and is a long way from recession,
but this slower growth is what the Federal Reserve ("Fed") had in mind when they
began to tighten.
The signs of deceleration are just beginning, and it is too early to tell
whether the monetary activity thus far has been sufficient to bring about the
desired soft landing. If the slowdown is not real, and stronger growth resumes,
then more tightening will occur until the transition to a slower growth path is
achieved. This is not just happening in the U.S. Central banks around the world
have been pursuing a tighter monetary policy to try to ward off inflation. This
is good news for the long-term sustainability of the economic and stock market
expansions, but will likely cause some problems for both in the short run.
The question of whether and when economic activity has slowed enough to
suit the Fed creates uncertainty for businesses and investors. Soft landings are
difficult to engineer and create the risk of a harder fall than desired. We
expect continued earnings growth in 2000, but at a lower level than in 1999.
These uncertainties: timing of further tightening, extent of deceleration and
impact on earnings create a difficult environment for stocks. Some of this has
already been discounted, as many individual stocks have already had twenty
percent plus declines. The popular averages have not yet experienced this degree
of weakness due to the rotational nature of the declines, and the continued
popularity of big cap growth stocks.
The outlook therefore is not great, but neither is it all negative. Stocks
will be supported by still growing earnings and improved valuations for most
companies, but will be constrained by concern about the Fed and still rich
valuations for the biggest growth names. The economic slowdown, worldwide
central bank concern about inflation and the growing Federal budget surplus
provide strong support for the bond market and some help for stocks.
All in all the best outcome, and the one that the Fed would like, would be
for most stocks to mark time for awhile, and for some of the most overvalued
names to sell off a bit. If the market surges upward, and investors move right
back into the same big cap technology names, the Fed would probably lean toward
a tighter policy.
Sincerely,
/s/ KENNETH M. LEVINE
Chairman
1
<PAGE> 4
KEYNOTE SERIES ACCOUNT
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
IVA SUBACCOUNT
---------------------------------------
NON-TAX VARIABLE
TAX QUALIFIED QUALIFIED PAYOUTS
------------- --------- --------
<S> <C> <C> <C>
ASSETS
Shares held in Equity Income Portfolio of MONY Series
Funds, Inc........................................... 625,160 147,450 428
=========== ========== ========
Investments at cost.................................... $12,784,995 $3,151,963 $ 8,062
=========== ========== ========
Investments at net asset value.................... $11,784,259 $2,779,426 $ 8,061
Amount due from MONY.............................. 0 0 10,000
Amount due from respective Funds.................. 963 0 2,872
----------- ---------- --------
Total assets........................................... 11,785,222 2,779,426 20,933
----------- ---------- --------
LIABILITIES
Amount due to MONY..................................... 5,543 1,080 2,872
Amount due to respective Funds......................... 0 0 10,000
----------- ---------- --------
Total liabilities...................................... 5,543 1,080 12,872
----------- ---------- --------
Net assets............................................. $11,779,679 $2,778,346 $ 8,061
=========== ========== ========
Net assets consist of:
Contractholders' net payments..................... $(4,417,259) $ (812,705) $(20,338)
Undistributed net investment income............... 11,169,817 2,485,126 32,803
Accumulated net realized gain (loss) on
investments..................................... 6,027,857 1,478,462 (4,403)
Net unrealized appreciation (depreciation) of
investments..................................... (1,000,736) (372,537) (1)
----------- ---------- --------
Net assets............................................. $11,779,679 $2,778,346 $ 8,061
=========== ========== ========
Number of units outstanding*........................... 85,070 21,466 59
----------- ---------- --------
Net asset value per unit outstanding*.................. $ 138.47 $ 129.43 $ 137.22
=========== ========== ========
* Units outstanding have been rounded for presentation purposes.
</TABLE>
See notes to financial statements.
2
<PAGE> 5
KEYNOTE SERIES ACCOUNT
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
IVA SUBACCOUNT
--------------------------------------
NON-TAX VARIABLE
TAX-QUALIFIED QUALIFIED PAYOUTS
------------- --------- --------
<S> <C> <C> <C>
Dividend income......................................... $ 213,705 $ 49,292 $ 885
Distributions from capital gains........................ 1,761,727 406,351 7,293
Mortality and expense risk charges...................... (60,347) (14,034) 0
----------- --------- --------
Net investment income................................... 1,915,085 441,609 8,178
----------- --------- --------
Realized and unrealized gain (loss) on investments:
Net realized gain (loss) on investments............... 268,256 37,948 (19,784)
Net change in unrealized appreciation (depreciation)
of investments..................................... (2,734,080) (609,179) 7,852
----------- --------- --------
Net realized and unrealized (loss) on investments....... (2,465,824) (571,231) (11,932)
----------- --------- --------
Net decrease in net assets resulting from operations.... $ (550,739) $(129,622) $ (3,754)
=========== ========= ========
</TABLE>
See notes to financial statements.
3
<PAGE> 6
KEYNOTE SERIES ACCOUNT
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
IVA SUBACCOUNT
---------------------------------------------------------------------------------------
NON-TAX VARIABLE
TAX-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,
2000 1999 2000 1999 2000 1999
------------ ------------ ------------ ------------ ------------ ------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income........ $ 1,915,085 $ 2,342,491 $ 441,609 $ 531,643 $ 8,178 $ 10,024
Net realized gain (loss) on
investments................ 268,256 888,839 37,948 211,037 (19,784) 1,185
Net change in unrealized
appreciation (depreciation)
of investments............. (2,734,080) (2,274,316) (609,179) (530,275) 7,852 (10,109)
----------- ----------- ---------- ---------- --------- --------
Net increase (decrease) in net
assets resulting from
operations..................... (550,739) 957,014 (129,622) 212,405 (3,754) 1,100
----------- ----------- ---------- ---------- --------- --------
FROM UNIT TRANSACTIONS:
Net proceeds from the
issuance of units.......... 25,348 156,282 6,951 9,255 10,766 103,818
Net asset value of units
redeemed or used to meet
contract obligations....... (862,117) (1,813,869) (124,858) (464,746) (121,824) (15,652)
----------- ----------- ---------- ---------- --------- --------
Net increase (decrease) from unit
transactions................... (836,769) (1,657,587) (117,907) (455,491) (111,058) 88,166
----------- ----------- ---------- ---------- --------- --------
Net increase (decrease) in net
assets......................... (1,387,508) (700,573) (247,529) (243,086) (114,812) 89,266
Net assets beginning of period... 13,167,187 13,867,760 3,025,875 3,268,961 122,873 33,607
----------- ----------- ---------- ---------- --------- --------
Net assets end of period*........ $11,779,679 $13,167,187 $2,778,346 $3,025,875 $ 8,061 $122,873
=========== =========== ========== ========== ========= ========
UNIT TRANSACTIONS:
Units outstanding beginning of
period......................... 91,045 102,567 22,384 25,866 862 255
Units issued during the period... 177 584 57 70 78 719
Units redeemed during the
period......................... (6,152) (12,106) (975) (3,552) (881) (112)
----------- ----------- ---------- ---------- --------- --------
Units outstanding end of
period......................... 85,070 91,045 21,466 22,384 59 862
=========== =========== ========== ========== ========= ========
* Includes undistributed net
investment income of: $11,169,817 $ 9,254,732 $2,485,126 $2,043,517 $ 32,803 $ 24,625
</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 solely 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 and is affiliated with MONY.
The financial statements and footnotes of the Portfolio are contained on
pages hereinafter of this report and should be read in conjunction with these
financial statements.
2. SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the financial
statements. Actual results could differ from those estimates.
Investments:
The investment in shares of the Portfolio is stated at value which is the
net asset value reported by the Portfolio. The Portfolio's net asset value is
based upon market or fair valuations of the securities held in the Portfolio.
Investment Transactions and Investment Income:
Investments in the Portfolio are recorded on the trade date. Realized gains
and losses include gains and losses on redemption of investments in the
Portfolio determined on the identified cost basis. Dividend income is recorded
on the ex-dividend date. Dividend income includes distributions of investment
income and capital gains from the Portfolio. Dividend income received is
reinvested in additional shares of the Portfolio.
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 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 to the Portfolio.
5
<PAGE> 8
KEYNOTE SERIES ACCOUNT
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
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.
4. INVESTMENT TRANSACTIONS:
Cost of shares acquired and proceeds from shares redeemed during the six
months ended June 30, 2000 were as follows:
<TABLE>
<CAPTION>
IVA SUBACCOUNTS COST OF SHARES ACQUIRED PROCEEDS FROM SHARES REDEEMED
--------------- ----------------------- -----------------------------
<S> <C> <C>
MONY Series Fund, Inc.-Equity Income Portfolio:
Tax Qualified................................... $25,366 $923,588
Non-tax Qualified............................... 7,415 139,593
Variable Payouts................................ 10,766 121,823
</TABLE>
6
<PAGE> 9
MONY SERIES FUND, INC.
EQUITY INCOME PORTFOLIO
During the second quarter the new economy stocks (technology, telecom,
Internet) sold off sharply while many of the old economy stocks (cyclical,
energy, financial) rallied. Some of the valuation disparity between these two
broad groups narrowed, but when technology rallied in June the gap widened
again. As a result the two markets phenomenon that has been in effect for the
past several years continues. At June 30, 2000 most stocks are now selling at
price earnings ratios that are not out of line historically, however the largest
one hundred names are still selling at very high multiples. The popular averages
which are heavily influenced by these big market cap stocks also reflect the
valuation disparity.
The major risk continues to lie in these high quality, well known growth
stocks and in the big averages. The new economy is for real, and these stocks
are great companies and have very attractive futures, but this is more than
reflected in their prices. This valuation disparity has created opportunity in
the rest of the market where many good companies are selling at more reasonable
prices. If there is another sell off in the growth sector the rest of the market
would not be immune, but the values and the fact that many of these stocks have
already suffered major declines should provide some cushion.
The slower economy and the uncertainties regarding the Federal Reserve
("Fed") indicate a more defensive strategy. This means less in economy-sensitive
sectors such as basic materials and more in healthcare and consumer staples. If
the Fed is nearing the end of its tightening then financial stocks, both banks
and insurance should do well. Finally, the energy sector remains as a major
overweight, including integrated oils, oil service and drilling and natural gas.
Demand remains strong, earnings estimates are being increased and dividend
yields are still attractive.
7
<PAGE> 10
MONY SERIES FUND, INC.
EQUITY INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 2000
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
COMMON STOCKS -- 95.26% PRINCIPAL AMOUNT VALUE
----------------------------------------------------------------------
<S> <C> <C>
AEROSPACE -- 3.65%
Honeywell International Inc. 4,000 $ 134,750
Northrop Grumman Corporation 3,000 198,750
United Technologies Corporation 4,500 264,937
-----------
598,437
AUTOMOTIVE -- 1.62%
Ford Motor Company 4,000 172,000
General Motors Corporation 1,500 87,094
Visteon Corporation 524 6,350
-----------
265,444
BANKING -- 4.89%
Bank of America Corporation 3,000 129,000
Bank of New York Company Inc. 4,000 186,000
Chase Manhattan Corporation 4,200 193,462
FleetBoston Financial Corporation 3,500 119,000
Wells Fargo & Company 4,500 174,375
-----------
801,837
CHEMICALS -- 1.54%
Dow Chemical Company 4,000 120,750
Du Pont (E. I.) de Nemours &
Company 3,000 131,250
-----------
252,000
COMPUTER HARDWARE -- 1.01%
Xerox Corporation 8,000 166,000
CONGLOMERATES -- 2.08%
Minnesota Mining & Manufacturing
Company 2,500 206,250
Textron Inc. 2,500 135,781
-----------
342,031
CONSUMER NON-DURABLES -- 1.90%
Avon Products Inc. 7,000 311,500
CONSUMER PRODUCTS -- 2.41%
Colgate-Palmolive Company 2,500 149,688
Kimberly-Clark Corporation 3,000 172,125
Procter & Gamble Company 1,300 74,425
-----------
396,238
CRUDE & PETROLEUM -- 9.13%
BP Amoco (ADR) 6,000 339,375
Burlington Resources Inc. 4,000 153,000
Chevron Corporation 2,500 212,031
Exxon Mobil Corporation 5,000 392,500
Royal Dutch Petroleum Company
(ADR) 3,500 215,469
Texaco Inc. 3,500 186,375
-----------
1,498,750
ELECTRICAL EQUIPMENT -- 5.36%
Emerson Electric Company 3,500 211,312
General Electric Company 12,600 667,800
-----------
879,112
ENERGY -- 6.69%
Duke Energy Corporation 4,000 225,500
El Paso Energy Corporation 5,500 280,156
Enron Corporation 4,000 258,000
Williams Companies Inc. 8,000 333,500
-----------
1,097,156
FOOD & BEVERAGES & TOBACCO -- 1.07%
Coca-Cola Company 1,500 86,156
PepsiCo Inc. 2,000 88,875
-----------
175,031
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----------
<S> <C> <C>
INSURANCE -- 1.02%
Cigna Corporation 1,800 $ 168,300
MACHINERY -- 2.76%
Caterpillar Inc. 4,300 145,663
Deere & Company 4,500 166,500
Pitney Bowes Inc. 3,500 140,000
-----------
452,163
MANUFACTURING -- 1.02%
Eaton Corporation 2,500 167,500
METALS & MINING -- 1.24%
Alcoa Inc. 7,000 203,000
MISC. FINANCIAL SERVICES -- 2.02%
Citigroup Inc. 5,500 331,375
MULTI-LINE INSURANCE -- 0.33%
Lincoln National Corporation 1,500 54,188
OIL SERVICES -- 8.90%
Baker Hughes Inc. 6,000 192,000
Diamond Offshore Drilling Inc. 5,000 175,625
Halliburton Company 4,000 188,750
Kerr-McGee Corporation 3,200 188,600
KeySpan Corporation 5,000 153,750
Phillips Petroleum Company 3,500 177,406
Schlumberger Ltd. 2,500 186,563
Tidewater Inc. 5,500 198,000
-----------
1,460,694
PAPER & FOREST PRODUCTS -- 2.48%
Bowater Inc. 3,000 132,375
Georgia-Pacific Group 4,000 105,000
International Paper Company 5,000 149,063
Temple-Inland Inc. 500 21,000
-----------
407,438
PHARMACEUTICALS -- 18.55%
Abbott Laboratories 5,000 222,813
American Home Products
Corporation 5,000 293,750
Baxter International Inc. 3,500 246,094
Bristol-Myers Squibb Company 4,500 262,125
Eli Lilly & Company 3,500 349,562
Johnson & Johnson 3,500 356,562
Merck & Company Inc. 4,000 306,500
Pfizer Inc. 6,600 316,800
Pharmacia Corporation 5,000 258,438
Schering-Plough Corporation 4,000 202,000
Smithkline Beecham (ADR) 3,500 228,156
-----------
3,042,800
PRINTING & PUBLISHING -- 0.82%
McGraw-Hill Companies Inc. 2,500 135,000
PROPERTY-CASUALTY INSURANCE -- 0.56%
Chubb Corporation 1,500 92,250
RAW MATERIALS -- 0.79%
Weyerhaeuser Company 3,000 129,000
REAL ESTATE -- 3.11%
Boston Properties Inc. 3,500 135,188
Crescent Real Estate Equities
Company 5,500 112,750
Equity Office Properties Trust 4,500 124,031
Equity Residential Properties
Trust 3,000 138,000
-----------
509,969
</TABLE>
8
<PAGE> 11
MONY SERIES FUND, INC.
EQUITY INCOME PORTFOLIO -- (CONTINUED)
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 2000
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----------
<S> <C> <C>
TELECOMMUNICATIONS -- 10.31%
AT&T Corporation 4,000 $ 126,500
Bell Atlantic Corporation 5,000 254,062
BellSouth Corporation 6,000 255,750
GTE Corporation 4,000 249,000
SBC Communications Inc. 6,000 259,500
Sprint Corporation 4,000 204,000
U.S. West Inc. 4,000 343,000
-----------
1,691,812
-----------
TOTAL COMMON STOCKS
(IDENTIFIED COST $11,856,685) 15,629,025
----------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES OR
PRINCIPAL AMOUNT VALUE
------------------- -----------
<S> <C> <C>
REPURCHASE AGREEMENT -- 4.57%
----------------------------------------------------------------------
State Street Bank & Trust
Repurchase Agreement,
5.50% due 07/03/00,
Maturity Value $749,343
Collateral: U.S. Treasury Note
$770,000 5.75% due 06/30/01,
Value $764,345 $749,000 $ 749,000
-----------
TOTAL REPURCHASE AGREEMENT
(IDENTIFIED COST $749,000) 749,000
----------------------------------------------------------------------
TOTAL INVESTMENTS
(IDENTIFIED COST $12,605,685) $16,378,025
OTHER ASSETS LESS LIABILITIES -- 0.17% 28,686
-----------
NET ASSETS -- 100% $16,406,711
======================================================================
</TABLE>
(ADR) American Depository Receipt.
See notes to financial statements.
9
<PAGE> 12
MONY SERIES FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
JUNE 30, 2000
<TABLE>
<CAPTION>
EQUITY INCOME
PORTFOLIO
-------------
<S> <C>
ASSETS:
Investments at value........................................ $16,378,025
Receivable for fund shares sold............................. 10,654
Receivable for investments sold............................. 65,238
Dividends and interest receivable........................... 22,287
Cash and other assets....................................... 1,440
-----------
Total assets...................................... 16,477,644
-----------
LIABILITIES:
Payable for fund shares redeemed............................ 5,322
Payable for investments purchased........................... 51,434
Investment advisory fees payable............................ 6,944
Administration fees payable................................. 633
Accrued expenses and other liabilities...................... 6,600
-----------
Total liabilities................................. 70,933
-----------
Net Assets.................................................. $16,406,711
===========
NET ASSETS:
Paid-in capital............................................. 11,821,116
Undistributed (accumulated) net investment income (loss).... 130,818
Undistributed (accumulated) net realized gain (loss) on
investments............................................... 682,437
Unrealized appreciation (depreciation) on investments....... 3,772,340
-----------
NET ASSETS.................................................. $16,406,711
===========
Fund shares outstanding..................................... 870,563
-----------
Net asset value per share................................... $ 18.85
===========
Investments at cost......................................... $12,605,685
===========
</TABLE>
See notes to financial statements.
10
<PAGE> 13
MONY SERIES FUND, INC.
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 2000
<TABLE>
<CAPTION>
EQUITY INCOME
PORTFOLIO
-------------
<S> <C>
INVESTMENT INCOME:
Interest............................................... $ 16,180
Dividends.............................................. 177,136(1)
-----------
Total investment income........................... 193,316
-----------
EXPENSES:
Investment advisory fees............................... 42,945
Transfer Agent Fees.................................... 1,749
Custodian and fund accounting fees..................... 8,180
Administration fees.................................... 5,097
Directors' fees and expenses........................... 747
Audit and legal fees................................... 3,351
Miscellaneous.......................................... 618
-----------
Total expenses............................... 62,687
-----------
Less: Expenses reduced by a custodian fee
arrangement....................................... (190)
-----------
Total expenses, net of expense reduction.......... 62,497
-----------
NET INVESTMENT INCOME (LOSS)................. 130,819
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET:
Net realized gain (loss) on security transactions...... 672,005
Net change in unrealized gain (loss) on investments.... (1,497,555)
-----------
Net realized and unrealized gain (loss) on
investments....................................... (825,550)
-----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS................................... $ (694,731)
===========
</TABLE>
See notes to financial statements.
--------------------------------------------------------------------------------
(1) Net of foreign taxes withheld of $970.
11
<PAGE> 14
MONY SERIES FUND, INC
STATEMENTS OF CHANGES IN NET ASSETS
JUNE 30, 2000
<TABLE>
<CAPTION>
EQUITY INCOME PORTFOLIO
-----------------------------
(UNAUDITED)
SIX MONTHS YEAR ENDED
ENDED DECEMBER 31,
JUNE 30, 2000 1999
------------- ------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss)........................... $ 130,819 $ 305,800
Net realized gain (loss) on investments................ 672,005 2,439,376
Net change in unrealized gain (loss) on investments.... (1,497,555) (1,208,862)
----------- -----------
Increase (decrease) in net assets resulting from
operations............................................ (694,731) 1,536,314
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income.................................. (297,279) (365,229)
Net realized gains on investments...................... (2,450,693) (3,095,880)
----------- -----------
Total distributions to shareholders............... (2,747,972) (3,461,109)
----------- -----------
FROM CAPITAL SHARE TRANSACTIONS:
Shares sold............................................ 61,153 517,508
Reinvestment of distributions.......................... 2,747,972 3,461,109
Shares redeemed........................................ (1,419,469) (3,395,551)
----------- -----------
Total increase (decrease) in net assets resulting
from capital share transactions................ 1,389,656 583,066
----------- -----------
Total increase (decrease) in net assets........... (2,053,047) (1,341,729)
NET ASSETS:
Beginning of period.................................... 18,459,758 19,801,487
----------- -----------
End of period.......................................... $16,406,711 $18,459,758
=========== ===========
SHARES ISSUES AND REDEEMED:
Issued................................................. 3,083 22,131
Issued in reinvestment of distributions................ 147,581 141,965
Redeemed............................................... (68,355) (138,809)
----------- -----------
Net increase (decrease)........................... 82,309 25,287
=========== ===========
</TABLE>
See notes to financial statements.
12
<PAGE> 15
MONY SERIES FUND, INC.
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
EQUITY INCOME PORTFOLIO
-----------------------------------------------------------------------
(UNAUDITED)
SIX MONTHS YEARS ENDED DECEMBER 31,
ENDED ---------------------------------------------------
JUNE 30, 2000 1999 1998 1997 1996 1995
------------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period............ $ 23.42 $ 25.95 $ 27.10 $ 23.44 $ 19.61 $ 15.53
------- ------- ------- ------- ------- -------
Income from investment operations:
Net investment income (loss).................. 0.16(c) 0.38(c) 0.78 0.61 0.98 0.69
Net realized and unrealized gain (loss) on
investments................................. (1.09) 1.90 2.62 5.96 2.89 4.45
------- ------- ------- ------- ------- -------
Total from investment operations............ (0.93) 2.28 3.40 6.57 3.87 5.14
------- ------- ------- ------- ------- -------
Dividends from net investment income.......... (0.39) (0.51) (0.88) (1.00) (0.04) (0.65)
Distributions from net capital gains.......... (3.25) (4.30) (3.67) (1.91) -- (0.41)
------- ------- ------- ------- ------- -------
Total distributions......................... (3.64) (4.81) (4.55) (2.91) (0.04) (1.06)
------- ------- ------- ------- ------- -------
Net asset value, end of period.................. $ 18.85 $ 23.42 $ 25.95 $ 27.10 $ 23.44 $ 19.61
======= ======= ======= ======= ======= =======
Total return................................ (3.78)%(b) 8.04% 12.63% 31.26% 19.76% 33.12%
Net assets, end of period (000)................. $16,407 $18,460 $19,801 $20,721 $18,572 $18,091
Ratio of expenses (excluding expense reduction)
to average net assets......................... 0.76%(a) 0.70% 0.76% 0.59% 0.55% 0.56%
Ratio of expenses to average net assets......... 0.75%(a) 0.70% 0.75% 0.58% 0.54% 0.55%
Ratio of net investment income (loss) (excluding
expense reduction) to average net assets...... 1.56%(a) 1.56% 1.86% 2.20% 2.78% 3.54%
Ratio of net investment income (loss) to average
net assets.................................... 1.56%(a) 1.57% 1.88% 2.20% 2.79% 3.54%
Portfolio turnover.............................. 12% 27% 28% 29% 29% 27%
</TABLE>
---------------
(a) Annualized.
(b) Not annualized.
(c) Based on average shares outstanding.
See notes to financial statements.
13
<PAGE> 16
MONY SERIES FUND, INC.
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2000 (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").
The Fund is currently offered only to separate accounts of certain
insurance companies as an investment medium for both variable annuity contracts
and variable life insurance policies. The following is a summary of significant
accounting policies consistently followed by the Fund in preparation of its
financial statements.
2. SIGNIFICANT ACCOUNTING POLICIES
A. Portfolio Valuations:
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. Bonds are valued at the last
available price provided by an independent pricing service for securities traded
on a national securities exchange. Bonds that are listed on a national
securities exchange but are not traded and bonds that are regularly traded in
the over-the-counter market are valued at the mean of the last available bid and
asked prices provided by an independent pricing service.
Short-term securities with 61 days or more to maturity at time of purchase
are valued at market value 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 to par 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, which approximates market. 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. 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. As of June 30, 2000, there were no such securities.
B. Federal Income Taxes:
No provision for Federal income or excise taxes is required because the
Fund intends to continue to qualify as a regulated investment company and
distribute all of its taxable income to shareholders.
C. Security Transactions and Investment Income:
Security transactions are accounted for on the trade date. Realized gains
and losses from security transactions are determined on the basis of identified
cost for both financial and tax purposes. Dividend income received and
distributions paid to shareholders are recognized on the ex-dividend date, and
interest income is recognized on the accrual basis. Premiums and discounts are
amortized daily for both financial and tax purposes.
D. Expenses:
Each portfolio bears expenses incurred specifically on its behalf, such as
advisory fees and custodian fees, as well as a portion of the common expenses of
the Fund, which are generally allocated based on average net assets.
14
<PAGE> 17
MONY SERIES FUND, INC.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
E. Dividends and Distributions:
Dividends from net investment income and net realized capital gains 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 accounting principles generally accepted in
the United States.
F. Use of Estimates in Preparation of Financial Statements:
Preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that may 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 those estimates.
3. INVESTMENT ADVISORY FEES AND TRANSACTIONS WITH AFFILIATES
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 MONY Life Insurance Company ("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 organizing the Fund, the initial registration
of its securities, and the compensation of the directors and officers of the
Fund who are affiliates of the Investment Adviser.
For these services, the Investment Adviser receives an investment advisory
fee. The investment advisory fee is payable monthly and is computed as a
percentage of the Portfolio's average daily net assets at an annual rate of
0.50% of the first $400,000,000 of the average daily net assets; 0.35% of the
next $400,000,000 of the average daily net assets; and 0.30% of the average
daily net assets in excess of $800,000,000.
Enterprise Capital Management ("ECM"), a wholly-owned subsidiary of MONY,
provides administrative services to the Fund. For its services ECM receives an
administrative fee, payable monthly and computed at an annual rate equal to
0.03% of the Portfolio's average daily net assets.
Aggregate directors fees incurred for non-affiliated Directors' of the Fund
for the six months ended June 30, 2000 amounted to $22,103.
4. CAPITAL STOCK
The Portfolio currently has 150 million authorized shares of capital stock
with a par value of $0.01 per share.
5. INVESTMENT TRANSACTIONS
For the six months ended June 30, 2000 purchases and sales proceeds of
investments, other than short-term investments were $2,017,653 and $3,724,007,
respectively.
15
<PAGE> 18
MONY SERIES FUND, INC.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
6. TAX BASIS UNREALIZED GAIN (LOSS) OF INVESTMENTS AND DISTRIBUTIONS
At June 30, 2000, the cost of securities for Federal income tax purposes,
the aggregate gross unrealized gain for all securities for which there was an
excess of value over tax cost and the aggregate gross unrealized loss for all
securities for which there was an excess of tax cost over value were as follows:
<TABLE>
<CAPTION>
UNREALIZED UNREALIZED NET UNREALIZED
TAX COST GAIN LOSS GAIN (LOSS)
-------- ---------- ---------- --------------
<S> <C> <C> <C>
12,605,685 4,404,163 (631,823) 3,772,340
</TABLE>
Income and capital gain distributions are determined in accordance with
federal income tax regulations which may differ from accounting principles
generally accepted in the United States. These differences are primarily due to
differing treatments for futures and options transactions, paydowns, market
discounts, and losses deferred due to wash sales.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid-in capital. Any taxable
gain remaining at fiscal year end is distributed in the following year.
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
Charles P. Leone Vice President-Compliance
David V. Weigel Treasurer
Phillip G. Goff 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 AND TRANSFER AGENT
State Street Bank and Trust Company
P. O. Box 1713
Boston, Massachusetts 02105
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
Two Commerce Square, Suite 1700
2001 Market Street
Philadelphia, Pennsylvania 19103
</TABLE>
This report is authorized for distribution only to shareholders and to others
who have received a copy of this Fund's prospectus.
<PAGE> 20
[KEYNOTE 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
