<PAGE>
NAVELLIER
SERIES FUND
------------------------------------------------------------------
ANNUAL REPORT
DECEMBER 31, 1996
<PAGE>
ANNUAL REPORT, December 31, 1996
NAVELLIER SERIES FUND
1 East Liberty, Third Floor
Reno, NV 89501
(800) 887-8671
- --------------------------------------------------------------------------------
February 1997
Dear Shareholder:
For the year 1996, the Navellier Aggressive Small Cap Equity Portfolio ("the
Fund") returned 15.44% (11.98% after the maximum load). This compares favorably
to 14.76% for the Russell 2000*, 14.51% for the Lipper Small Company Index** and
not so favorably to the Nasdaq Composite*** which returned 22.71% over the same
period. The Fund's annualized return since public offering (April 1, 1994) is
26.21% (24.81% after the maximum load). The annualized returns for the Russell
2000 and the Nasdaq Composite over the same period were 14.30% and 22.22%,
respectively. During the first six months of 1996, the Navellier Aggressive
Small Cap Equity Portfolio gained 27.64% (23.79% after the maximum load),
compared to a 12.63% gain for the Nasdaq Composite and a 9.70% gain for the
Russell 2000. During the second half of 1996 the Fund lost 9.56% (12.27% after
the maximum load), compared to a 8.95% positive return for the Nasdaq Composite
and a 4.61% positive return for the Russell 2000.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
NAVELLIER AGGRESSIVE SMALL CAP EQUITY PORTFOLIO
<S> <C> <C> <C>
DATE Small Cap Portfolio NASDAQ Composite Russell 2000
3/31/1994 $10,000 $10,000 $10,000
4/30/1994 $9,889 $9,871 $10,059
5/31/1994 $9,667 $9,889 $9,929
6/30/1994 $9,213 $9,496 $9,571
7/31/1994 $9,384 $9,714 $9,721
8/31/1994 $9,768 $10,298 $10,249
9/30/1994 $10,030 $10,280 $10,202
10/31/1994 $10,494 $10,458 $10,158
11/30/1994 $10,555 $10,092 $9,729
12/31/1994 $10,616 $10,114 $9,972
1/31/1995 $10,484 $10,158 $9,832
2/28/1995 $10,989 $10,676 $10,219
3/31/1995 $11,372 $10,992 $10,387
4/30/1995 $11,726 $11,352 $10,602
5/31/1995 $12,089 $11,629 $10,764
6/30/1995 $14,541 $12,555 $11,297
7/31/1995 $15,409 $13,467 $11,938
8/31/1995 $15,257 $13,721 $12,161
9/30/1995 $14,884 $14,036 $12,363
10/31/1995 $15,691 $13,936 $11,800
11/30/1995 $16,034 $14,247 $12,291
12/31/1995 $14,521 $14,152 $12,585
1/31/1996 $15,188 $14,255 $12,562
2/29/1996 $16,118 $14,796 $12,942
3/31/1996 $18,248 $14,815 $13,175
4/30/1996 $20,460 $16,013 $13,872
5/31/1996 $21,257 $16,725 $14,413
6/30/1996 $19,509 $15,939 $13,806
7/31/1996 $17,938 $14,535 $12,587
8/31/1996 $18,062 $15,354 $13,299
9/30/1996 $19,923 $16,503 $13,797
10/31/1996 $18,537 $16,430 $13,565
11/30/1996 $18,662 $17,386 $14,105
12/31/1996 $18,196 $17,365 $14,443
</TABLE>
The above chart indicates the return of $10,000 invested in the NAVELLIER
AGGRESSIVE SMALL CAP EQUITY PORTFOLIO on April 1, 1994. As the chart shows by
December 31, 1996, the value of the investment would have grown to $18,393, a
83.93% increase. For comparison purposes, look at how the NASDAQ Composite and
the Russell 2000 performed over the same period. An investment of $10,000 in the
NASDAQ Composite over the same period would have grown to $17,365, a 73.65%
increase. Similarly an investment of $10,000 in the Russell 2000 over the same
period would have grown to $14,443, a 44.43% increase.
The above charts and performance numbers assume reinvestment of all
distributions.
Please be aware that past performance is no indication of future performance.
The investment return and principal value of an investment will fluctuate so
that an investor's shares, when redeemed, may be worth more or less than their
original cost.
<PAGE>
The Fund generally lagged behind the overall stock market during the last six
months of 1996 since primarily large capitalization stocks performed well during
the second half of 1996. One of the startling statistics for 1996 was
highlighted in an article in the January 13, 1997 issue of FORTUNE, which stated
that the Nasdaq Composite, excluding the 100 largest stocks, was actually up
less than 3% in 1996. In other words, 1996 was predominantly a large
capitalization stock market rally, especially in the second half of the year.
Virtually none of the largest 100 Nasdaq stocks were in the Navellier Aggressive
Small Cap Equity Portfolio. Considering that the Nasdaq Composite was up less
than 3% in 1996 when the 100 largest stocks are excluded, we are quite satisfied
that the Fund had positive results in 1996.
The historical valuations of the stocks in the Navellier Aggressive Small Cap
Equity Portfolio remain very cheap relative to the Dow Industrials and S&P 500.
Wave after wave of money flowing into index funds has benefited the S&P 500 and
moved it into the high range of its historical price/earnings ratio. At over 21
times current earnings, the S&P 500 is very expensive, especially since the most
optimistic analysts call for only 14% to 15% earnings growth in fiscal 1997. The
median P/E for stocks in the Navellier Aggressive Small Cap Equity Portfolio is
17.5 and they literally have much more earnings growth than the S&P 500. Looking
forward, the average stock in the Fund should continue to have far greater
earnings growth than the S&P 500 despite similar price/earnings ratios. When the
current mania fueling index funds settles down and Wall Street starts rotating
into stocks that represent outstanding fundamental values, my favorite stocks in
the Fund should benefit tremendously. In my opinion, we are now on the verge of
a "stock picking" environment, where predominantly stocks with outstanding
fundamental characteristics, such as those in the Navellier Aggressive Small Cap
Equity Portfolio, will benefit.
On the large scale, economists are having a hard time predicting economic growth
because increasing productivity is hard to account for in their economic models.
Most economists are predicting 2% to 3% economic growth in 1997, which would be
a slowdown from the more than 4% growth experienced in the second half of 1996.
However, these economists are not factoring in continuing productivity gains
that have bolstered the U.S. economy, resulting in exceptionally high growth
without inflation. The implicit price deflator is an inflation indicator without
volatile food and energy prices. It is the most reliable indicator of inflation
and is now at its lowest point in decades. The recent 0.3% drop in wholesale
prices in January is further evidence that inflation is now deader than dead.
The bond market has celebrated this positive inflation news and as of this
writing, Treasury Bond yields are near the 6.5% level. The low inflation and low
interest rate environment sets a very positive tone for the stock market for the
next several months.
Long-term, the Navellier Aggressive Small Cap Equity Portfolio continues to
perform quite well relative to other small capitalization growth funds. We are
eagerly awaiting our three year Lipper and Morningstar Ratings and are confident
that we will receive an outstanding long-term rating. To ensure our high
performance standard, the Fund was closed to new investors on April 16, 1996.
Existing shareholders and fee-based financial advisors can continue to purchase
additional shares in the Fund. Existing shareholders will be receiving a proxy
to convert the Navellier Aggressive Small Cap Equity Portfolio to a pure no-load
fund. This conversion will allow us to cut management fees and save operating
expenses. After conversion, existing shareholders will be able to purchase new
shares with no load charged. We would appreciate it if you could mail back your
proxy votes as soon as possible.
2
<PAGE>
I want to personally thank all shareholders in the Navellier Aggressive Small
Cap Equity Portfolio for selecting us to manage some of your assets. We feel
very obligated to our shareholders and have already closed the Fund to ensure
our high performance standard. Always feel free to contact us if you have any
questions or we can help you in any way.
Sincerely,
[SIG]
LOUIS G. NAVELLIER
THIS MATERIAL HAS BEEN PRECEDED BY A NAVELLIER AGGRESSIVE SMALL CAP EQUITY
PORTFOLIO PROSPECTUS.
* THE RUSSELL 2000 INDEX IS AN UNMANAGED INDEX CONSISTING OF THE SMALLEST 2000
STOCKS IN THE RUSSELL 3000 INDEX. IT IS CONSIDERED REPRESENTATIVE OF THE
SMALL CAP MARKET IN GENERAL. IT IS NOT AN INVESTMENT PRODUCT AVAILABLE FOR
PURCHASE.
** THE LIPPER SMALL COMPANY INDEX IS AN UNMANAGED NET ASSET VALUE WEIGHTED
INDEX OF 30 MUTUAL FUNDS THAT INVEST PRIMARILY IN COMPANIES WITH SMALL
MARKET CAPITILIZATIONS.
*** THE NASDAQ COMPOSITE IS AN UNMANAGED INDEX CONSISTING OF APPROXIMATELY 5,500
STOCKS. IT IS CONSIDERED REPRESENTATIVE OF THE STOCK MARKET AS A WHOLE. IT
IS NOT AN INVESTMENT PRODUCT AVAILABLE FOR PURCHASE.
3
<PAGE>
DECEMBER 31, 1996 NAVELLIER AGGRESSIVE SMALL CAP EQUITY PORTFOLIO
- ------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
- -------------------------------------------------------
<C> <S> <C>
MARKET VALUE
SHARES (NOTE 1)
<CAPTION>
- -------------------------------------------------------
<C> <S> <C>
COMMON STOCKS
AEROSPACE AND DEFENSE -- 0.66%
40,000 Oregon Metallurgical Corp.* $ 1,290,000
--------------
AIRLINES -- 1.33%
174,200 Mesaba Holdings, Inc.* 2,591,225
--------------
ALUMINUM/METALS -- 1.62%
50,000 RMI Titanium Co.* 1,406,250
50,100 Reliance Steel and Aluminum
Co. 1,753,500
--------------
3,159,750
--------------
BANKS -- 1.68%
40,000 Andover Bancorp, Inc. 1,025,000
50,000 City National Corp. 1,081,250
40,000 RCSB Financial, Inc. 1,160,000
--------------
3,266,250
--------------
BASIC MATERIALS -- 0.76%
40,000 Lone Star Industries, Inc. 1,475,000
--------------
COMPUTER HARDWARE -- 4.92%
50,000 Centennial Technologies,
Inc.* 2,600,000
35,000 ENCAD, Inc.* 1,443,750
200,000 Iomega Corp.* 3,475,000
75,000 Tech Data Corp.* 2,053,125
--------------
9,571,875
--------------
COMPUTER SOFTWARE -- 8.14%
35,500 Acceler8 Tech Corp.* 694,469
140,000 Brooktrout Technology, Inc.* 3,920,000
50,000 Legato Systems, Inc.* 1,631,250
101,000 Rational Software Corp.* 3,995,813
47,000 Remedy Corp.* 2,526,250
65,000 Viasoft, Inc.* 3,071,250
--------------
15,839,032
--------------
DIVERSIFIED TECHNOLOGY -- 5.24%
60,000 Dyantech Corp.* 2,655,000
70,000 Engineered Support Systems,
Inc. 1,032,500
42,000 Lindsay Manfacturing Co. 1,963,500
125,200 Zoltek Companies, Inc.* 4,554,150
--------------
10,205,150
--------------
<CAPTION>
- -------------------------------------------------------
MARKET VALUE
SHARES (NOTE 1)
- -------------------------------------------------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
EDUCATION -- 3.42%
159,525 Apollo Group, Inc.* $ 5,334,117
100,000 Childrens Comprehensive
Services* 1,312,500
--------------
6,646,617
--------------
ELECTRONICS -- 1.73%
37,800 Kuhlman Corp. 732,375
248,000 Zytec* 2,635,000
--------------
3,367,375
--------------
ENERGY -- 0.55%
40,000 Holly Corp. 1,070,000
--------------
FOOD -- 1.74%
70,000 Fresh America Corp.* 1,155,000
70,000 Riser Foods, Inc. 2,222,500
--------------
3,377,500
--------------
HEALTHCARE -- 0.76%
50,000 SONUS Pharmaceuticals, Inc.* 1,487,500
--------------
HEAVY MACHINERY/CONSTRUCTION -- 1.07%
60,800 Gardner Denver Machinery* 2,082,400
--------------
HOME FURNISHINGS -- 1.45%
30,000 Ethan Allen Interiors, Inc. 1,155,000
58,900 Stanley Furniture Company,
Inc.* 1,170,637
50,000 Winsloew Furniture, Inc.* 487,500
--------------
2,813,137
--------------
HOME CONSTRUCTION -- 0.58%
40,000 Palm Harbor Homes, Inc.* 1,120,000
--------------
INSURANCE -- 0.63%
20,000 Orion Capital Corp. 1,222,500
--------------
INDUSTRIAL AND COMMERCIAL
SERVICES -- 3.61%
44,200 Amerco, Inc.* 1,547,000
40,000 DT Industries, Inc. 1,400,000
75,000 Mail Well, Inc.* 1,228,125
122,000 Shaw Group, Inc.* 2,851,750
--------------
7,026,875
--------------
</TABLE>
* NON-INCOME PRODUCING.
SEE NOTES TO FINANCIAL STATEMENTS.
4
<PAGE>
DECEMBER 31, 1996 NAVELLIER AGGRESSIVE SMALL CAP EQUITY PORTFOLIO
- ------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
- -------------------------------------------------------
MARKET VALUE
SHARES (NOTE 1)
- -------------------------------------------------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
MANUFACTURED HOUSING -- 1.46%
100,000 Coachmen Industries, Inc. $ 2,837,500
--------------
NATURAL GAS -- 1.16%
100,000 NUI Corp. 2,262,500
--------------
NONCLASSIFIABLE ESTABLISHMENT -- 1.17%
65,000 Oppenheimer Capital LP 2,275,000
--------------
OIL -- 4.10%
84,400 Cliffs Drilling Co.* 5,338,300
100,000 Comstock Resources, Inc.* 1,300,000
45,200 Swift Energy Co.* 1,350,350
--------------
7,988,650
--------------
OIL & GAS EXPLORATION -- 7.64%
50,000 American Oilfield Divers,
Inc.* 593,750
20,000 Cooper Cameron Corp.* 1,530,000
30,000 Flores & Rucks, Inc.* 1,597,500
135,000 Marine Drilling Companies,
Inc.* 2,657,812
100,000 Plains Resources, Inc.* 1,562,500
110,000 Seacor Holdings, Inc.* 6,930,000
--------------
14,871,562
--------------
PHARMACEUTICALS -- 7.23%
50,400 Cardinal Health, Inc. 2,935,800
100,000 Herbalife International,
Inc. 3,262,500
124,875 Jones Medical Industries,
Inc. 4,573,547
75,000 Medicis Pharmaceutical
Corp.* 3,300,000
--------------
14,071,847
--------------
REAL ESTATE -- 0.86%
68,000 Fairfield Communities, Inc.* 1,683,000
--------------
RETAILERS -- 13.24%
100,000 American Eagle Outfitters,
Inc.* 787,500
292,500 Claires Stores, Inc. 3,802,500
140,000 Eagle Hardware and Garden,
Inc.* 2,905,000
100,000 Equity Marketing, Inc.* 1,850,000
<CAPTION>
- -------------------------------------------------------
MARKET VALUE
SHARES (NOTE 1)
- -------------------------------------------------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
RETAILERS (CONTINUED)
100,000 Finish Line, Inc.* $ 2,112,500
100,000 Funco, Inc.* 837,500
60,000 Pacific Sunwear of
California* 1,545,000
164,500 Paul Harris Stores, Inc.* 2,919,875
93,000 Ross Stores, Inc. 4,650,000
104,000 Wet Seal, Inc.* 2,223,000
100,000 Tuesday Morning Corp.* 2,137,500
--------------
25,770,375
--------------
SAVINGS AND LOANS -- 3.37%
312,000 Imperial Credit Indusries,
Inc.* 6,552,000
--------------
SEMICONDUCTORS AND RELATED -- 1.56%
100,000 Chips and Technologies,
Inc.* 1,825,000
25,000 Radisys Corp.* 1,218,750
--------------
3,043,750
--------------
STEEL -- 1.12%
85,900 Olympic Steel, Inc.* 2,179,713
--------------
TECHNICAL SERVICES -- 0.52%
27,400 SBS Technologies, Inc.* 1,013,800
--------------
TELECOMMUNICATIONS -- 4.20%
120,600 ATC Communications, Inc.* 1,597,950
216,000 Pairgain Technologies, Inc.* 6,574,500
--------------
8,172,450
--------------
TEMPORARY STAFFING -- 4.56%
152,500 AccuStaff, Inc.* 3,221,562
276,000 Employee Solutions, Inc.* 5,658,000
--------------
8,879,562
--------------
VEHICLE PARTS AND EQUIPMENT -- 0.57%
44,500 Arvin Industries, Inc. 1,101,375
--------------
VITAMINS/HEALTH FOODS -- 1.40%
100,000 Rexall Sundown, Inc.* 2,718,750
--------------
TOTAL COMMON STOCKS -- 94.05%
(COST $146,155,936) 183,034,020
--------------
</TABLE>
* NON-INCOME PRODUCING.
SEE NOTES TO FINANCIAL STATEMENTS.
5
<PAGE>
DECEMBER 31, 1996 NAVELLIER AGGRESSIVE SMALL CAP EQUITY PORTFOLIO
- ------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
- -------------------------------------------------------
MARKET VALUE
SHARES (NOTE 1)
- -------------------------------------------------------
<C> <S> <C>
REPURCHASE AGREEMENTS -- 5.95%
With PaineWebber at 6.00%, dated
12/31/96, due 1/2/97, collateralized
by U.S. Treasury Bills, due 5/1/97
(Cost $11,578,000) $ 11,578,000
--------------
TOTAL INVESTMENTS -- 100.00%
(COST $157,733,936) $ 194,612,020
--------------
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE>
DECEMBER 31, 1996 NAVELLIER AGGRESSIVE SMALL CAP EQUITY PORTFOLIO
- ------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<S> <C>
ASSETS
Securities at Value (Note 1, see portfolio for cost information)...................... $194,612,020
Cash in Custodian Bank................................................................ 18,324
Receivable for Securities Sold........................................................ 748,475
Receivable for Shares Sold............................................................ 157,806
Dividends Receivable.................................................................. 26,370
Interest Receivable................................................................... 1,930
Unamortized Organizational Costs (Note 1)............................................. 18,118
------------
Total Assets........................................................................ 195,583,043
------------
LIABILITIES
Payable for Securities Purchased...................................................... 4,444,194
Payable for Shares Redeemed........................................................... 738,267
Investment Advisory Fee Payable (Note 2).............................................. 204,806
Other Payables and Accrued Expenses................................................... 82,115
Administrative Fee Payable (Note 2)................................................... 40,961
Commissions Payable................................................................... 20,069
Organizational Expenses Payable to Adviser (Note 1)................................... 18,118
------------
Total Liabilities................................................................... 5,548,530
------------
NET ASSETS.............................................................................. $190,034,513
------------
------------
SHARES OUTSTANDING...................................................................... 10,683,004
------------
------------
NET ASSET VALUE PER SHARE............................................................... $17.79
------
------
MAXIMUM OFFERING PRICE PER SHARE (100/97.00 of $17.79).................................. $18.34
------
------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
7
<PAGE>
FOR THE YEAR ENDED
DECEMBER 31, 1996 NAVELLIER AGGRESSIVE SMALL CAP EQUITY PORTFOLIO
- ------------------------------------------------------------------
STATEMENT OF OPERATIONS
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest (Note 1)...................................................................... $ 603,796
Dividends (Note 1)..................................................................... 171,544
-----------
Total Investment Income.............................................................. 775,340
-----------
EXPENSES
Investment Advisory Fee (Note 2)....................................................... 2,323,690
Administrative Fee (Note 2)............................................................ 464,738
Transfer Agent and Custodian Fee (Note 3).............................................. 330,390
Registration Fees...................................................................... 108,309
Shareholder Reports and Notices........................................................ 62,983
Legal Fees............................................................................. 60,915
Trustees' Fees and Expenses (Note 2)................................................... 51,381
Audit Fees............................................................................. 19,600
Organizational Expense (Note 1)........................................................ 8,053
Other Expenses......................................................................... 18,743
-----------
Total Expenses....................................................................... 3,448,802
Less Expenses Reimbursed by Investment Adviser (Note 2).............................. (195,636)
-----------
Net Expenses....................................................................... 3,253,166
-----------
NET INVESTMENT LOSS...................................................................... (2,477,826)
-----------
Net Realized Gain on Investment Transactions............................................. 463,797
Net Change in Unrealized Appreciation of Investments..................................... 18,466,247
-----------
NET GAIN ON INVESTMENTS.................................................................. 18,930,044
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS..................................... $16,452,218
-----------
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE>
NAVELLIER AGGRESSIVE SMALL CAP EQUITY PORTFOLIO
- ------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE YEAR ENDED
DECEMBER 31,
---------------------------
1996 1995
------------- ------------
FROM INVESTMENT ACTIVITIES
<S> <C> <C>
Net Investment Loss................................................... $ (2,477,826) $ (610,524)
Net Realized Gain on Investment Transactions.......................... 463,797 1,524,157
Net Change in Unrealized Appreciation of Investments.................. 18,466,247 15,989,475
------------- ------------
Net Increase in Net Assets Resulting from Operations................ 16,452,218 16,903,108
------------- ------------
DISTRIBUTIONS TO SHAREHOLDERS
From Net Investment Income............................................ -- --
From Net Realized Capital Gains....................................... -- (2,499,314)
------------- ------------
Total Distributions to Shareholders................................. -- (2,499,314)
------------- ------------
FROM SHARE TRANSACTIONS
Net Proceeds from Sales of Shares..................................... 286,125,562 130,265,618
Reinvestment of Distributions......................................... -- 2,355,336
Cost of Shares Redeemed............................................... (217,842,421) (59,949,289)
------------- ------------
Net Increase in Net Assets Resulting from Share Transactions........ 68,283,141 72,671,665
------------- ------------
TOTAL INCREASE IN NET ASSETS........................................ 84,735,359 87,075,459
NET ASSETS -- Beginning of Year......................................... 105,299,154 18,223,695
------------- ------------
NET ASSETS -- End of Year............................................... $ 190,034,513 $105,299,154
------------- ------------
------------- ------------
SHARES
Sold.................................................................. 16,325,181 9,128,613
Issued in Reinvestment of Distributions............................... -- 152,845
Redeemed.............................................................. (12,473,362) (4,110,315)
------------- ------------
Net Increase in Shares.............................................. 3,851,819 5,171,143
------------- ------------
------------- ------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE>
NAVELLIER AGGRESSIVE SMALL CAP EQUITY PORTFOLIO
- ------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FOR THE YEAR ENDED FOR THE
DECEMBER 31, PERIOD ENDED
-------------------- DECEMBER 31,
1996 1995 1994*
--------- --------- -------------
PER SHARE OPERATING PERFORMANCE:
<S> <C> <C> <C>
Net Asset Value -- Beginning of Year............................ $ 15.41 $ 10.98 $ 10.00
--------- --------- -------------
Income from Investment Operations:
Net Investment Loss........................................... (0.23) (0.16) (0.08)
Net Realized and Unrealized Gains on Securities............... 2.61 4.97 1.06
--------- --------- -------------
Total from Investment Operations............................ 2.38 4.81 0.98
--------- --------- -------------
Distributions to Shareholders:
From Net Investment Income.................................... -- -- --
From Net Realized Capital Gains............................... -- (0.38) --
--------- --------- -------------
Total Distributions to Shareholders......................... -- (0.38) --
--------- --------- -------------
Net Increase in Net Asset Value................................. 2.38 4.43 0.98
--------- --------- -------------
Net Asset Value -- End of Year.................................. $ 17.79 $ 15.41 $ 10.98
--------- --------- -------------
--------- --------- -------------
TOTAL INVESTMENT RETURN(A)...................................... 15.44% 43.80% 9.80%
RATIOS TO AVERAGE NET ASSETS:
Expenses After Reimbursement (Note 2)........................... 1.75% 1.75% 1.68%(B)
Expenses Before Reimbursement (Note 2).......................... 1.86% 2.10% 4.52%(B)
Net Investment Loss............................................. (1.33)% (1.15)% (0.81 )%(B)
SUPPLEMENTARY DATA:
Portfolio Turnover Rate......................................... 136.9% 169.6% 139.9%
Net Assets at End of Year (000's omitted)....................... $190,035 $105,299 $18,224
Number of Shares Outstanding at End of Year (000's omitted)..... 10,683 6,831 1,660
Average Commission Rate Paid(C)................................. $0.0424
- ----------------
</TABLE>
(A) Total returns do not include the maximum sales load. Total returns for
periods of less than one year are not annualized.
(B) Annualized.
(C) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for
security trades on which commissions are charged. This amount may vary
from period to period and fund to fund depending on the mix of trades
executed in various markets where trading practices and commission
rate structures may differ.
*FROM COMMENCEMENT OF OPERATIONS JANUARY 3, 1994.
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE>
DECEMBER 31, 1996 NAVELLIER AGGRESSIVE SMALL CAP EQUITY PORTFOLIO
- ------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies
Navellier Series Fund (the "Fund") is registered with the Securities and
Exchange Commission under the Investment Company Act of 1940 as a diversified,
open-end investment company. The Fund consists of one portfolio, Navellier
Aggressive Small Cap Equity Portfolio (the "Portfolio"). Shares of the Fund are
purchased at the public offering price which includes a maximum sales charge of
up to 3.00% depending on the size of the purchase. The Fund is authorized to
issue an unlimited number of shares of capital stock with no stated par value.
The financial statements have been prepared in conformity with generally
accepted accounting principles which permit management to make certain estimates
and assumptions at the date of the financial statements. The following is a
summary of significant accounting policies which the Fund follows:
(a) Listed securities are valued at the last sales price of the New York
Stock Exchange and other major exchanges. Over-the-Counter securities are
valued at the last sales price. If market quotations are not readily
available, the Board of Trustees will value the Portfolio's securities in good
faith. The Board of Trustees will periodically review this method of valuation
and recommend changes which may be necessary to assure that the Portfolio's
instruments are valued at fair value.
(b) Security transactions are recorded on the trade date (the date the
order to buy or sell is executed). Interest income is accrued on a daily
basis. Dividend income is recorded on the ex-dividend date. Realized gains and
losses from securities transactions are computed on an identified cost basis.
(c) Dividends from net investment income are declared and paid annually.
Dividends are reinvested in additional shares unless shareholders request
payment in cash. Net capital gains, if any, are distributed annually.
(d) The Fund complies with the provisions of the Internal Revenue Code
applicable to regulated investment companies and distributes all net
investment income to its shareholders. Therefore, no Federal income tax
provision is required.
(e) Organizational expenses of the Fund totaling $143,294 are being
deferred and amortized over 60 months beginning with the public offering of
shares. Any redemption by an initial investor during the amortization period
will be reduced by a prorata portion of any of the unamortized organization
expenses. Such proration is calculated by dividing the number of initial
shares redeemed by the number of initial shares outstanding at the date of
redemption. At December 31, 1996, unamortized organization costs were $18,118.
2. Investment Advisory Fees and Other Transactions with Affiliates
Investment advisory services are provided by Navellier Management, Inc.,
(the "Adviser"). Under an agreement with the Adviser, the Fund pays a fee at the
annual rate of 1.25% of the daily net assets for the Navellier Aggressive Small
Cap Equity Portfolio. The Adviser also receives a 0.25% annual fee in connection
with the rendering of services under the administrative services agreement and
is reimbursed by the Fund for operating expenses incurred on behalf of the Fund.
An officer and trustee of the Fund is also an officer and director of the
Adviser.
Under an agreement between the Fund and the Adviser related to payment of
operating expenses, the Adviser has reserved the right to seek reimbursement for
the past, present and future operating expenses of the Fund paid by the Adviser,
at any time upon notice to the Fund. At December 31, 1995, the Adviser
voluntarily agreed not to seek future reimbursement of all unreimbursed past
expenses incurred on behalf of the Fund. During the year ended December 31,
1996, the Adviser paid operating expenses of the Fund totaling $660,374. Under
the operating expense agreement, the Adviser requested, and the Fund reimbursed,
$464,738 of such expenses. The Adviser voluntarily agreed not to seek future
reimbursement of $195,636 of such 1996 expenses. Accordingly, at December 31,
1996, there were no prior expenses which could be reimbursed in the future under
the agreement.
11
<PAGE>
DECEMBER 31, 1996 NAVELLIER AGGRESSIVE SMALL CAP EQUITY PORTFOLIO
- ------------------------------------------------------------------
Navellier Securities Corp. (the "Distributor") acts as the Fund's
Distributor and is registered as a broker-dealer under the Securities and
Exchange Act of 1934. The Distributor, which is the principal underwriter of the
Funds shares, renders its services to the Fund pursuant to a distribution
agreement. An officer and trustee of the Fund is also an officer and director of
the Distributor.
For the year ended December 31, 1996, the Fund was advised that the
Distributor received $924,050 from sales loads earned on sales of the Fund's
capital stock.
The Fund pays each of its Trustees not affiliated with the Adviser a fee of
$10,000 annually plus specific amounts for attended board and committee
meetings. When the Fund exceeds $200,000,000 in total net assets, then the
Trustees' fee is raised to $20,000 annually. For the year ended December 31,
1996 Trustees' fees and expenses totaled $51,381.
3. Transfer Agent and Custodian
Rushmore Trust and Savings, FSB, ("Rushmore Trust"), provides transfer
agency, dividend disbursing and other shareholder services to the Fund. In
addition, Rushmore Trust serves as custodian of the Fund's assets. Fees paid to
Rushmore Trust are based upon a fee schedule approved by the Board of Trustees.
4. Securities Transactions
For the year ended December 31, 1996, purchases of securities were
$302,971,553 and sales of securities were $236,741,968. These totals exclude
short-term securities.
5. Net Unrealized Appreciation/Depreciation of Investments
As of December 31, 1996, net appreciation of investments for Federal income
tax purposes was $36,878,084 of which $44,036,260 related to appreciated
investments and $7,158,176 related to depreciated investments. At December 31,
1996, the cost of the Fund's securities for Federal income tax purposes was
$157,733,936.
6. Net Assets
At December 31, 1996, net assets consisted of the following:
<TABLE>
<S> <C>
Paid-in-Capital....................................................................... $155,066,631
Undistributed Net Investment Income................................................... --
Accumulated Net Realized Loss on Investments.......................................... (1,910,202)
Net Unrealized Appreciation on Investments............................................ 36,878,084
------------
NET ASSETS............................................................................ $190,034,513
------------
------------
</TABLE>
7. Federal Income Tax
No provision is made for Federal income taxes as it is the Fund's intention
to continue to qualify as a regulated investment company and to make requisite
distributions to the shareholders which will be sufficient to relieve it from
all or substantially all Federal income and excise taxes.
Permanent differences between tax and financial reporting of net investment
income and realized gains/(losses) are reclassified to paid-in-capital. As of
December 31, 1996, net investment losses of $2,477,826 were reclassified to
paid-in-capital.
At December 31, 1996, for Federal income tax purposes, the Fund had capital
loss carryovers which may be applied against future net taxable realized gains
of each succeeding year until the earlier of its utilization or its expiration
as follows:
<TABLE>
<CAPTION>
EXPIRES DECEMBER 31,
- -------------------------------------------------------------------------------------------------
<S> <C>
2004............................................................................................. $ 1,910,202
-------------
-------------
</TABLE>
12
<PAGE>
- ------------------------------------------------------------------
INDEPENDENT AUDITORS' REPORT
The Shareholders and Board of Trustees
of the Navellier Series Fund:
We have audited the statement of assets and liabilities, of the Navellier
Aggressive Small Cap Equity Portfolio of the Navellier Series Fund (the Fund) as
of December 31, 1996, the related statement of operations for the year then
ended and of changes in net assets for the years ended December 31, 1996 and
1995, and the financial highlights for each of the two years in the period ended
December 31, 1996 and the period ended December 31, 1994. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at December
31, 1996 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of the Navellier Small
Cap Equity Portfolio of the Navellier Series Fund at December 31, 1996, the
results of its operations, the changes in its net assets, and the financial
highlights for the presented periods in conformity with generally accepted
accounting principles.
DELOITTE & TOUCHE LLP
Washington, DC
January 31, 1997
13
<PAGE>
[LOGO]
NAVELLIER
Series Fund
ANNUAL REPORT
December 31, 1996
Navellier Offices:
One East Liberty Third Floor
Reno, Nevada 89501
800-887-8671 P.S.T.
Custodian & Transfer Agent:
Rushmore Trust and Savings, FSB
4922 Fairmont Avenue
Bethesda, MD 20814
800-622-1386 E.S.T.
