<PAGE> 1
As filed with the Securities and Exchange Commission on April 15, 1997
1933 Act Registration No. 33-87244
1940 Act Registration No. 811-8894
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. [ ]
------
Post-Effective Amendment No. 10 [X]
------
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 11 [X]
------
JNL SERIES TRUST
(Exact Name of Registrant as Specified in Charter)
5901 Executive Drive, Lansing, Michigan 48911
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (517) 394-3400
Thomas J. Meyer, Esq. with a copy to:
JNL Series Trust
Vice President & Counsel Blazzard, Grodd & Hasenauer P.C.
5901 Executive Drive P.O. Box 5108
Lansing, Michigan 48911 Westport, Connecticut 06881
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box)
immediately upon filing pursuant to paragraph (b)
- --------
X on May 1, 1997 pursuant to paragraph (b)
- --------
60 days after filing pursuant to paragraph (a)(1)
- --------
on (date) pursuant to paragraph (a)(1)
- --------
75 days after filing pursuant to paragraph (a)(2)
- --------
on (date) pursuant to paragraph (a)(2) of Rule 485.
- --------
This post-effective amendment designates a new effective date for a
- -------- previously filed post-effective amendment.
Declaration Pursuant to Rule 24f-2
The Registrant has registered an indefinite number of securities in accordance
with Rule 24f-2 under the Investment Company Act of 1940. Registrant's Rule
24f-2 notice for its fiscal year ended December 31, 1996, was filed on or about
February 28, 1997.
<PAGE> 2
JNL SERIES TRUST
CROSS-REFERENCE SHEET
(as required by Rule 495)
<TABLE>
<CAPTION>
Caption in Prospectus or Statement of
N-1A Item No. Additional Information relating to each Series
- ------------- ----------------------------------------------
Part A Prospectus
- --------- ------------
<S> <C> <C>
Item 1. Cover Page Front Cover Page
Item 2. Synopsis Trust Expenses
Item 3. Financial Highlights Financial Highlights; Performance Advertising
for the Series
Item 4. General Description of
Registrant Front Cover Page; Investment Objectives and
Policies; Common Types of Securities and
Management Practices
Item 5. Management of the Fund Management of the Trust
Item 5A Management's Discussion
of Fund Performance Not Applicable
Item 6. Capital Stock and Other Additional Information;
Securities Performance Advertising for the Series
Item 7. Purchase of Securities Investment in Trust Shares;
Being Offered Share Redemption
Item 8. Redemption or Repurchase Share Redemption
Item 9. Pending Legal Proceedings Not Applicable
Part B Statement of Additional Information
- --------- ------------------------------------
Item 10. Cover Page Front Cover Page
Item 11. Table of Contents Table of Contents
Item 12. General Information and
History General Information and History
Item 13. Investment Objectives Investment Restrictions Applicable to All
and Policies Series; Common Types of Securities
Item 14. Management of the Fund Trustees and Officers of the Trust
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C>
Item 15. Control Persons and
Principal Holders of
Securities Trustees and Officers of the Trust
Item 16. Investment Advisory and
Other Services Investment Adviser and Other Services
Item 17. Brokerage Allocation and
Other Practices Investment Adviser and Other Services
Item 18. Capital Stock and Other
Securities Additional Information
Item 19. Purchase, Redemption and
Pricing of Securities
Being Offered Purchases, Redemptions and Pricing of Shares
Item 20. Tax Status Tax Status
Item 21. Underwriters Not Applicable
Item 22. Calculation of Performance
Data Performance
Item 23. Financial Statements Financial Statements
</TABLE>
Part C
Information required to be included in Part C is set forth under the
appropriate item, so numbered, in Part C of this Amendment to Registration
Statement.
<PAGE> 4
JNL(R) SERIES TRUST
MAY 1, 1997
<PAGE> 5
PROSPECTUS
May 1, 1997
JNL(R) SERIES TRUST
- --------------------------------------------------------------------------------
5901 Executive Drive - Lansing, Michigan 48911
JNL Series Trust ("Trust") is an open-end management investment company
organized under the laws of Massachusetts, by a Declaration of Trust, dated June
1, 1994. The Trust currently offers shares in separate Series, each with its own
investment objective. The shares of the Trust are sold to life insurance company
separate accounts to fund the benefits of variable annuity policies.
JNL AGGRESSIVE GROWTH SERIES is a non-diversified Series that seeks as its
investment objective long-term growth of capital by investing primarily in
common stocks of issuers of any size, including larger, well-established
companies and smaller, emerging growth companies.
JNL CAPITAL GROWTH SERIES is a non-diversified Series that seeks as its
investment objective long-term growth of capital by emphasizing investments in
common stocks of medium-sized companies. Although the Series expects to
emphasize such securities, it may also invest in smaller or larger companies.
JNL GLOBAL EQUITIES SERIES seeks as its investment objective long-term
growth of capital by investing primarily in common stocks of foreign and
domestic issuers of any size. This Series normally invests in issuers from at
least five different countries including the United States.
JNL/ALGER GROWTH SERIES seeks as its investment objective long-term capital
appreciation by investing in a diversified, actively managed portfolio of equity
securities, primarily of companies with total market capitalization of $1
billion or greater.
JNL/EAGLE CORE EQUITY SERIES seeks as its investment objective long-term
capital appreciation and, secondarily, current income by investing primarily in
a diversified portfolio of common stocks which the sub-adviser believes offers
above-average potential for long-term capital appreciation.
JNL/EAGLE SMALLCAP EQUITY SERIES seeks as its investment objective
long-term capital appreciation by investing primarily in equity securities of
smaller companies which the sub-adviser believes offer potential for rapid
growth.
JNL/PUTNAM GROWTH SERIES seeks as its investment objective long-term growth
of capital. Since income is not an objective, any income generated by the
investment of this Series' assets will be incidental to its objective. It is
intended that this Series will invest primarily in the common stocks of
companies believed by the sub-adviser to have opportunity for capital growth.
JNL/PUTNAM VALUE EQUITY SERIES seeks as its investment objective capital
growth, with income as a secondary objective by investing primarily in common
stocks which the sub-adviser believes to be undervalued relative to underlying
asset value or earnings potential at the time of purchase.
PPM AMERICA/JNL BALANCED SERIES seeks as its investment objective
reasonable income, long-term capital growth and preservation of capital. It is
intended that this Series will invest in common stocks and fixed income
securities, with emphasis on income-producing securities which appear to have
some potential for capital enhancement.
PPM AMERICA/JNL HIGH YIELD BOND SERIES seeks as its investment objective a
high level of current income; its secondary investment objective is capital
appreciation by investing in fixed income securities, with emphasis on higher-
yielding, higher-risk, lower-rated or unrated corporate bonds.
PPM AMERICA/JNL MONEY MARKET SERIES seeks as its investment objective as
high a level of current income as is consistent with the preservation of capital
and maintenance of liquidity by investing in high-quality, short-term money
market instruments.
1
<PAGE> 6
SALOMON BROTHERS/JNL GLOBAL BOND SERIES seeks as its investment objective a
high level of current income. As a secondary objective, the Series will seek
capital appreciation. The Series seeks to achieve its objectives by investing in
a globally diverse portfolio of fixed income investments and by giving the
sub-adviser broad discretion to deploy the Series' assets among certain segments
of the fixed income market that the sub-adviser believes will best contribute to
achievement of the Series' investment objectives. In pursuing its investment
objectives, the Series reserves the right to invest predominantly in securities
rated in medium or lower rating categories or as determined by the sub-adviser
to be of comparable quality. Although the Series has the ability to invest up to
100% of the Series' assets in lower-rated securities, the Series' sub-adviser
does not anticipate investing in excess of 75% of the Series' assets in such
securities.
SALOMON BROTHERS/JNL U.S. GOVERNMENT & QUALITY BOND SERIES seeks as its
investment objective a high level of current income, by investing primarily in
debt obligations and mortgage-backed securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities including collateralized mortgage
obligations backed by such securities. The Series may also invest a portion of
its assets in investment-grade bonds.
T. ROWE PRICE/JNL ESTABLISHED GROWTH SERIES seeks as its investment
objective long-term growth of capital and increasing dividend income through
investment primarily in common stocks of well-established growth companies.
T. ROWE PRICE/JNL INTERNATIONAL EQUITY INVESTMENT SERIES seeks as its
investment objective long-term growth of capital through investments primarily
in common stocks of established, non-U.S. companies.
T. ROWE PRICE/JNL MID-CAP GROWTH SERIES seeks as its investment objective
long-term growth of capital by investing primarily in the common stock of
companies with medium-sized market capitalizations ("mid-cap") and the potential
for above average growth.
As a result of the market risk inherent in any investment, there is no
assurance that the investment objective of any of the Series will be realized.
Investments in a Series are neither insured nor guaranteed by the U.S.
Government or any other entity or person, and there can be no assurance that the
PPM America/JNL Money Market Series will be able to maintain a stable net asset
value of $1.00 per share.
THE PPM AMERICA/JNL HIGH YIELD BOND SERIES INVESTS PREDOMINANTLY IN, AND
THE JNL AGGRESSIVE GROWTH SERIES, JNL CAPITAL GROWTH SERIES, JNL GLOBAL EQUITIES
SERIES, JNL/EAGLE CORE EQUITY SERIES, JNL/EAGLE SMALLCAP EQUITY SERIES, PPM
AMERICA/JNL BALANCED SERIES AND SALOMON BROTHERS/JNL GLOBAL BOND SERIES MAY
INVEST IN HIGH YIELD, HIGH RISK BONDS. BONDS OF THIS TYPE ARE TYPICALLY SUBJECT
TO GREATER MARKET FLUCTUATIONS AND RISK OF LOSS OF INCOME AND PRINCIPAL DUE TO
DEFAULT BY THE ISSUER THAN ARE INVESTMENTS IN LOWER YIELDING, HIGHER RATED
BONDS. (SEE "INVESTMENT RISKS".)
Prior to May 1, 1997, the PPM America/JNL Balanced Series was the
JNL/Phoenix Investment Counsel Balanced Series, the JNL/Putnam Growth Series was
the JNL/Phoenix Investment Counsel Growth Series and the JNL/Putnam Value Equity
Series was the PPM America/JNL Value Equity Series.
This Prospectus provides you with the basic information you should know
before investing in the Series. You should read it and keep it for future
reference. A Statement of Additional Information, dated May 1, 1997, has been
filed with the Securities and Exchange Commission. You can obtain a copy without
charge by calling (800) 322-8257, or writing the JNL Series Trust Service
Center, P.O. Box 25127, Lansing, MI 48909. The Securities and Exchange
Commission maintains a Web site (http://www.sec.gov) that contains the Statement
of Additional Information, material incorporated by reference, and other
information regarding registrants that file electronically with the Commission.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
------------------------
THE STATEMENT OF ADDITIONAL INFORMATION, DATED MAY 1, 1997, IS INCORPORATED
HEREIN BY REFERENCE.
2
<PAGE> 7
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOPIC PAGE
----- ----
<S> <C>
TRUST EXPENSES.............................................. 4
FINANCIAL HIGHLIGHTS........................................ 6
INVESTMENT OBJECTIVES AND POLICIES.......................... 10
COMMON TYPES OF SECURITIES AND MANAGEMENT PRACTICES......... 23
MANAGEMENT OF THE TRUST..................................... 32
INVESTMENT IN TRUST SHARES.................................. 38
SHARE REDEMPTION............................................ 36
ADDITIONAL INFORMATION...................................... 38
PERFORMANCE ADVERTISING FOR THE SERIES...................... 37
TAX STATUS.................................................. 40
</TABLE>
3
<PAGE> 8
- --------------------------------------------------------------------------------
TRUST EXPENSES
- --------------------------------------------------------------------------------
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<S> <C>
MAXIMUM SALES LOAD IMPOSED ON PURCHASES NONE
MAXIMUM SALES LOAD IMPOSED ON REINVESTED DIVIDENDS NONE
DEFERRED SALES LOAD NONE
REDEMPTION FEES NONE
EXCHANGE FEE NONE
</TABLE>
ANNUAL SERIES OPERATING EXPENSES
(As a percentage of average net assets.)
<TABLE>
<CAPTION>
OTHER
MANAGEMENT EXPENSES(AFTER TOTAL SERIES
FEE REIMBURSEMENT) OPERATING EXPENSES
---------- -------------- ------------------
<S> <C> <C> <C>
JNL Aggressive Growth Series................................ .95% .15% 1.10%
JNL Capital Growth Series................................... .95% .15% 1.10%
JNL Global Equities Series.................................. 1.00% .15% 1.15%
JNL/Alger Growth Series..................................... .975% .15% 1.125%
JNL/Eagle Core Equity Series................................ .90% .15%* 1.05%
JNL/Eagle SmallCap Equity Series............................ .95% .15%* 1.10%
JNL/Putnam Growth Series**.................................. .90% .15% 1.05%
JNL/Putnam Value Equity Series**............................ .90% .15% 1.05%
PPM America/JNL Balanced Series**........................... .75% .15% .90%
PPM America/JNL High Yield Bond Series...................... .75% .15% .90%
PPM America/JNL Money Market Series......................... .60% .15% .75%
Salomon Brothers/JNL Global Bond Series..................... .85% .15% 1.00%
Salomon Brothers/JNL U.S. Government & Quality Bond
Series.................................................... .70% .15% .85%
T. Rowe Price/JNL Established Growth Series................. .85% .15% 1.00%
T. Rowe Price/JNL International Equity Investment Series.... 1.10% .15% 1.25%
T. Rowe Price/JNL Mid-Cap Growth Series..................... .95% .15% 1.10%
</TABLE>
*The JNL/Eagle Core Equity Series and the JNL/Eagle Small/Cap Equity
Series commenced operations on September 16, 1996. These are estimated expenses
for the first fiscal year of operation. Actual expenses may be greater or lesser
than those shown.
**The management fees for the JNL/Putnam Growth Series, JNL/Putnam Value
Equity Series and the PPM America/JNL Balanced Series were changed effective May
1, 1997. See "Management of the Trust." The changes represent an increase in
management fees for the JNL/Putnam Growth Series when net assets exceed $50
million, an increase in management fees for the JNL/Putnam Value Equity Series
at all net asset levels and a decrease in management fees for the PPM
America/JNL Balanced Series at all net asset levels.
Currently, Jackson National Financial Services, Inc. will reimburse each of
the Series for annual expenses (excluding Management Fees) in excess of .15% of
average daily net assets. Voluntary reimbursements to these Series may be
modified or discontinued at any time. Prior to reimbursement, Total Series
Operating Expenses as a percentage of net assets for the period ended December
31, 1996, were: JNL Aggressive Growth Series -- 1.40%; JNL Capital Growth Series
- -- 1.27%; JNL Global Equities Series -- 1.63%; JNL/Alger Growth Series -- 1.19%;
JNL/Putnam Growth Series -- 1.27%; JNL/Putnam Value Equity Series -- 1.53%; PPM
America/JNL Balanced Series -- 1.22%; PPM America/JNL High Yield Bond Series --
1.21%; PPM America/JNL Money Market Series -- .85%; Salomon Brothers/JNL Global
Bond Series -- 1.44%; Salomon Brothers/JNL U.S. Government & Quality Bond Series
- -- 1.37%; T. Rowe Price/JNL Established Growth Series -- 1.11%; T. Rowe
Price/JNL International Equity Investment Series -- 1.29%; and T. Rowe Price/JNL
Mid-Cap Growth Series -- 1.14%; and are expected to be: JNL/Eagle Core Equity
Series -- 4.57% and JNL/Eagle SmallCap Equity Series -- 4.77%.
4
<PAGE> 9
EXAMPLE -
The following example illustrates the expenses you would incur on a $1,000
investment, assuming (1) 5% annual return and (2) redemption at the end of each
time period:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
JNL Aggressive Growth Series................................ $11 $35 $61 $134
JNL Capital Growth Series................................... $11 $35 $61 $134
JNL Global Equities Series.................................. $12 $37 $63 $140
JNL/Alger Growth Series..................................... $11 $36 $62 $137
JNL/Eagle Core Equity Series................................ $11 $33 N/A N/A
JNL/Eagle SmallCap Equity Series............................ $11 $35 N/A N/A
JNL/Putnam Growth Series.................................... $11 $33 $58 $128
JNL/Putnam Value Equity Series.............................. $11 $33 $58 $128
PPM America/JNL Balanced Series............................. $ 9 $29 $50 $111
PPM America/JNL High Yield Bond Series...................... $ 9 $29 $50 $111
PPM America/JNL Money Market Series......................... $ 8 $24 $42 $ 93
Salomon Brothers/JNL Global Bond Series..................... $10 $32 $55 $122
Salomon Brothers/JNL U.S. Government & Quality Bond
Series.................................................... $ 9 $27 $47 $105
T. Rowe Price/JNL Established Growth Series................. $10 $32 $55 $122
T. Rowe Price/JNL International Equity Investment Series.... $13 $40 $69 $151
T. Rowe Price/JNL Mid-Cap Growth Series..................... $11 $35 $61 $134
</TABLE>
The purpose of this table is to assist you in understanding the various
costs and expenses that you will bear directly or indirectly. The example
assumes a 5% annual rate of return pursuant to the requirements of the
Securities and Exchange Commission. This hypothetical rate of return is not
intended to be representative of past or future performance of the Series.
5
<PAGE> 10
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The following table provides selected per share data for one share of each
Series. The information does not reflect any charges imposed by a separate
account investing in shares of the Series. You should refer to the appropriate
separate account prospectus for additional information regarding such charges.
The information has been audited by Price Waterhouse LLP, independent
accountants, and should be read in conjunction with the financial statements and
notes thereto, together with the report of Price Waterhouse LLP included in the
Statement of Additional Information.
JNL SERIES TRUST
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
JNL AGGRESSIVE JNL CAPITAL JNL GLOBAL
GROWTH SERIES GROWTH SERIES EQUITIES SERIES
---------------------------- ---------------------------- ----------------------------
PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM
APRIL 1, MAY 15, APRIL 1, MAY 15, APRIL 1, MAY 15,
1996 TO 1995* 1996 TO 1995* 1996 TO 1995*
DECEMBER 31, TO MARCH 31, DECEMBER 31, TO MARCH 31, DECEMBER 31, TO MARCH 31,
1996 1996 1996 1996 1996 1996
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER SHARE DATA
NET ASSET VALUE, BEGINNING OF
PERIOD............................. $13.13 $10.00 $13.86 $10.00 $13.75 $10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)......... 0.05 0.01 0.06 -- 0.03 0.10
Net realized and unrealized gains on
investments and foreign currency
related items...................... 1.10 3.53 0.70 4.70 2.72 4.02
------- ------ ------- ------ ------- -------
Total income from investment
operations......................... 1.15 3.54 0.76 4.70 2.75 4.12
------- ------ ------- ------ ------- -------
LESS DISTRIBUTIONS:
From net investment income........... (0.05) -- -- -- (0.08) --
From net realized gains on investment
transactions....................... (0.71) (0.41) (0.16) (0.84) (0.90) (0.37)
Return of capital.................... (0.14) -- -- -- (0.32) --
------- ------ ------- ------ ------- -------
Total distributions.................. (0.90) (0.41) (0.16) (0.84) (1.30) (0.37)
------- ------ ------- ------ ------- -------
Net increase......................... 0.25 3.13 0.60 3.86 1.45 3.75
------- ------ ------- ------ ------- -------
NET ASSET VALUE, END OF PERIOD....... $13.38 $13.13 $14.46 $13.86 $15.20 $13.75
======= ====== ======= ====== ======= =======
TOTAL RETURN(A)...................... 8.72% 35.78% 5.45% 47.94% 19.99% 41.51%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in
thousands)......................... $29,555 $8,527 $36,946 $9,578 $48,638 $16,141
Ratio of net expenses to average net
assets(b)(c)....................... 1.09% 1.09% 1.09% 1.09% 1.14% 1.15%
Ratio of net investment income to
average net assets(b)(c)........... 0.77% 0.27% 0.91% (0.49)% 0.37% 0.39%
Portfolio turnover rate.............. 85.22% 163.84% 115.88% 128.56% 52.02% 142.36%
Average commission rate paid(d)...... $0.0242 n/a $0.0196 n/a $0.0162 n/a
RATIO INFORMATION ASSUMING NO EXPENSE
REIMBURSEMENT OR FEES PAID
INDIRECTLY
Ratio of expenses to average net
assets(b).......................... 1.40% 2.77% 1.27% 2.08% 1.63% 2.25%
Ratio of net investment income to
average net assets(b).............. 0.46% (1.41)% 0.73% (1.48)% (0.12)% (0.71)%
</TABLE>
- -------------------------
* Commencement of operations.
(a) Assumes investment at net asset value at the beginning of the period,
reinvestment of all distributions, and a complete redemption of the
investment at the net asset value at the end of the period. Total return is
not annualized.
(b) Annualized.
(c) Computed after giving effect to the Advisor's expense reimbursement and fees
paid indirectly.
(d) Disclosure required for fiscal years beginning after September 1, 1995.
See notes to the financial statements.
6
<PAGE> 11
<TABLE>
<CAPTION>
JNL/PHOENIX INVESTMENT JNL/PHOENIX INVESTMENT PPM AMERICA/JNL HIGH YIELD
JNL/ALGER GROWTH SERIES COUNSEL BALANCED SERIES COUNSEL GROWTH SERIES BOND SERIES
-------------------------- -------------------------- -------------------------- --------------------------
PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM
APRIL 1, OCTOBER 16, APRIL 1, MAY 15, APRIL 1, MAY 15, APRIL 1, MAY 15,
1996 TO 1995* TO 1996 TO 1995* TO 1996 TO 1995* TO 1996 TO 1995* TO
DECEMBER 31, MARCH 31, DECEMBER 31, MARCH 31, DECEMBER 31, MARCH 31, DECEMBER 31, MARCH 31,
1996 1996 1996 1996 1996 1996 1996 1996
------------ ----------- ------------ ----------- ------------ ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$10.38 $10.00 $11.17 $10.00 $12.50 $10.00 $10.23 $10.00
-- -- 0.10 0.25 0.04 0.01 0.51 0.73
0.78 0.38 0.98 1.40 2.12 3.66 0.64 0.04
------- ------ ------- ------ ------- ------ ------- ------
0.78 0.38 1.08 1.65 2.16 3.67 1.15 0.77
------- ------ ------- ------ ------- ------ ------- ------
-- -- (0.15) (0.19) (0.05) -- (0.69) (0.54)
-- -- (0.18) (0.29) (0.40) (1.17) (0.02) --
-- -- -- -- -- -- -- --
------- ------ ------- ------ ------- ------ ------- ------
-- -- (0.33) (0.48) (0.45) (1.17) (0.71) (0.54)
------- ------ ------- ------ ------- ------ ------- ------
0.78 0.38 0.75 1.17 1.71 2.50 0.44 0.23
------- ------ ------- ------ ------- ------ ------- ------
$11.16 $10.38 $11.92 $11.17 $14.21 $12.50 $10.67 $10.23
======= ====== ======= ====== ======= ====== ======= ======
7.51% 3.80% 9.72% 16.60% 17.28% 37.69% 11.24% 7.82%
$38,252 $8,649 $24,419 $4,761 $22,804 $2,518 $13,396 $6,156
1.07% 1.03% 1.04% 1.01% 1.04% 0.95% 0.88% 0.88%
(0.02)% (0.17)% 2.39% 2.99% 0.94% 0.28% 8.64% 8.34%
59.92% 50.85% 158.15% 115.84% 184.33% 255.03% 113.08% 186.21%
$0.0441 n/a $0.0494 n/a $0.0175 n/a n/a n/a
1.19% 1.89% 1.22% 3.71% 1.27% 5.38% 1.21% 1.50%
(0.14)% (1.03)% 2.21% 0.29% 0.71% (4.15)% 8.31% 7.72%
</TABLE>
7
<PAGE> 12
JNL SERIES TRUST
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
PPM AMERICA/JNL PPM AMERICA/JNL SALOMON BROTHERS/JNL
MONEY MARKET SERIES VALUE EQUITY SERIES GLOBAL BOND SERIES
--------------------------- --------------------------- ---------------------------
PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM
APRIL 1, MAY 15, APRIL 1, MAY 15, APRIL 1, MAY 15,
1996 TO 1995* 1996 TO 1995* 1996 TO 1995*
DECEMBER 31, TO MARCH 31, DECEMBER 31, TO MARCH 31, DECEMBER 31, TO MARCH 31,
1996 1996 1996 1996 1996 1996
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER SHARE DATA
NET ASSET VALUE, BEGINNING OF PERIOD.... $1.00 $1.00 $12.77 $10.00 $10.46 $10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)............ 0.04 0.04 0.10 0.23 0.42 0.81
Net realized and unrealized gains on
investments and foreign currency
related items......................... -- -- 1.97 2.86 0.70 0.24
------- ------ ------- ------ ------- ------
Total income from investment
operations............................ 0.04 0.04 2.07 3.09 1.12 1.05
------- ------ ------- ------ ------- ------
LESS DISTRIBUTIONS:
From net investment income.............. (0.04) (0.04) (0.15) (0.17) (0.69) (0.56)
From net realized gains on investment
transactions.......................... -- -- (0.19) (0.15) (0.26) (0.03)
Return of capital....................... -- -- -- -- -- --
------- ------ ------- ------ ------- ------
Total distributions..................... (0.04) (0.04) (0.34) (0.32) (0.95) (0.59)
------- ------ ------- ------ ------- ------
Net increase............................ -- -- 1.73 2.77 0.17 0.46
------- ------ ------- ------ ------- ------
NET ASSET VALUE, END OF PERIOD.......... $1.00 $1.00 $14.50 $12.77 $10.63 $10.46
======= ====== ======= ====== ======= ======
TOTAL RETURN(A)......................... 3.61% 4.59% 16.25% 31.14% 10.68% 10.74%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in
thousands)............................ $23,752 $6,816 $17,761 $3,365 $12,483 $6,380
Ratio of net expenses to average net
assets(b)(c).......................... 0.75% 0.75% 0.85% 0.87% 0.99% 1.00%
Ratio of net investment income to
average net assets(b)(c).............. 4.75% 5.06% 2.29% 2.33% 7.52% 9.01%
Portfolio turnover rate................. -- -- 13.71% 30.12% 109.85% 152.89%
Average commission rate paid(d)......... n/a n/a $0.0259 n/a n/a n/a
RATIO INFORMATION ASSUMING NO EXPENSE
REIMBURSEMENT OR FEES PAID INDIRECTLY
Ratio of expenses to average net
assets(b)............................. 0.85% 1.30% 1.53% 2.28% 1.44% 2.14%
Ratio of net investment income to
average net assets(b)................. 4.65% 4.51% 1.61% 0.91% 7.07% 7.87%
</TABLE>
- -------------------------
* Commencement of operations.
(a) Assumes investment at net asset value at the beginning of the period,
reinvestment of all dividends and distributions, and a complete redemption
of the investment at the net asset value at the end of the period. Total
return is not annualized.
(b) Annualized.
(c) Computed after giving effect to the Advisor's expense reimbursement and fees
paid indirectly.
(d) Disclosure required for fiscal years beginning after September 1, 1995.
See notes to the financial statements.
8
<PAGE> 13
<TABLE>
<CAPTION>
SALOMON BROTHERS/JNL U.S. T. ROWE PRICE/
GOVERNMENT & QUALITY T. ROWE PRICE/JNL JNL INTERNATIONAL T. ROWE PRICE/JNL
BOND SERIES ESTABLISHED GROWTH SERIES EQUITY INVESTMENT SERIES MID-CAP GROWTH SERIES
--------------------------- --------------------------- --------------------------- ---------------------------
PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM
APRIL 1, MAY 15, APRIL 1, MAY 15, APRIL 1, MAY 15, APRIL 1, MAY 15,
1996 TO 1995* 1996 TO 1995* 1996 TO 1995* 1996 TO 1995*
DECEMBER 31, TO MARCH 31, DECEMBER 31, TO MARCH 31, DECEMBER 31, TO MARCH 31, DECEMBER 31, TO MARCH 31,
1996 1996 1996 1996 1996 1996 1996 1996
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$10.09 $10.00 $11.36 $10.00 $11.25 $10.00 $13.43 $10.00
0.24 0.45 0.03 0.07 0.06 0.04 (0.05) 0.06
0.24 0.02 1.81 2.68 0.90 1.21 1.92 3.90
------- ------ ------- ------ ------- ------- ------- -------
0.48 0.47 1.84 2.75 0.96 1.25 1.87 3.96
------- ------ ------- ------ ------- ------- ------- -------
(0.34) (0.34) (0.04) (0.06) (0.12) -- (0.05) --
(0.03) (0.04) (0.09) (1.33) (0.01) -- (0.36) (0.53)
-- -- (0.51) -- -- -- -- --
------- ------ ------- ------ ------- ------- ------- -------
(0.37) (0.38) (0.64) (1.39) (0.13) -- (0.41) (0.53)
------- ------ ------- ------ ------- ------- ------- -------
0.11 0.09 1.20 1.36 0.83 1.25 1.46 3.43
------- ------ ------- ------ ------- ------- ------- -------
$10.20 $10.09 $12.56 $11.36 $12.08 $11.25 $14.89 $13.43
======= ====== ======= ====== ======= ======= ======= =======
4.82% 4.65% 16.12% 28.23% 8.54% 12.50% 13.91% 40.06%
$9,832 $3,007 $32,291 $8,772 $48,204 $24,211 $47,104 $10,545
0.84% 0.84% 1.00% 1.00% 1.25% 1.25% 1.10% 1.10%
5.72% 5.41% 0.59% 0.75% 1.09% 0.78% (0.18)% 0.82%
218.50% 253.37% 36.41% 101.13% 5.93% 16.45% 25.05% 66.04%
n/a n/a $0.0288 n/a $0.0257 n/a $0.0326 n/a
1.37% 2.53% 1.11% 2.09% 1.29% 2.14% 1.14% 2.10%
5.19% 3.72% 0.48% (0.34)% 1.05% (0.11)% (0.22)% (0.18)%
</TABLE>
Each Series' recent performance and holdings will be detailed twice a year
in the Trust's annual and semi-annual reports, which are sent to all
shareholders.
9
<PAGE> 14
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVES AND POLICIES
- --------------------------------------------------------------------------------
Investments in each Series are made in many different securities which
provide diversification to minimize risk. While there is careful selection of
portfolio securities and constant supervision by a team of professional
investment managers, there can be no guarantee that the Series' objectives will
be achieved. Because of differences in investment objectives and policies, as
well as acceptable degrees of risk, the performance of a Series may differ even
though more than one Series may utilize the same securities selection.
Unless otherwise stated, the investment objectives and policies set forth
in this Prospectus are not fundamental and may be changed by the Trustees
without shareholder approval. Each Series is subject to additional investment
policies and restrictions described in the Statement of Additional Information,
some of which are fundamental and may not be changed without shareholder
approval.
Currently, shares of the Trust are sold to life insurance company separate
accounts ("Accounts") to fund the benefits of variable annuity policies
("Policies") issued by life insurance companies. The Accounts purchase shares of
the Trust in accordance with variable account allocation instructions received
from owners of the Policies. The Trust then uses the proceeds to buy securities
for its Series. The investment adviser manages the Series from day to day to
accomplish the Trust's investment objectives. The kinds of investments and the
way they are managed depends on what is happening in the economy and the
financial marketplaces. Each of the Accounts, as a shareholder, has an ownership
in the Trust's investments. The Trust also offers to buy back (redeem) shares of
the Trust from the Accounts at any time at net asset value.
Jackson National Financial Services, Inc. ("JNFSI"), a wholly owned
subsidiary of Jackson National Life Insurance Company, serves as investment
adviser for all the Series of the Trust. Janus Capital Corporation serves as
sub-adviser for the JNL Capital Growth, JNL Aggressive Growth and JNL Global
Equities Series; Fred Alger Management, Inc. serves as sub-adviser for the
JNL/Alger Growth Series; Eagle Asset Management, Inc. serves as sub-adviser for
the JNL/Eagle Core Equity Series and JNL/Eagle SmallCap Equity Series; Putnam
Investment Management, Inc. serves as sub-adviser for the JNL/Putnam Growth and
JNL/Putnam Value Equity Series; PPM America, Inc. serves as sub-adviser for the
PPM America/JNL Balanced, PPM America/JNL High Yield Bond and PPM America/JNL
Money Market Series; Salomon Brothers Asset Management Inc serves as sub-adviser
for the Salomon Brothers/JNL U.S. Government & Quality Bond and Salomon
Brothers/JNL Global Bond Series; T. Rowe Price Associates, Inc. serves as
sub-adviser for the T. Rowe Price/JNL Established Growth and T. Rowe Price/JNL
Mid-Cap Growth Series; and Rowe Price-Fleming International, Inc. serves as
sub-adviser for the T. Rowe Price/JNL International Equity Investment Series.
Reference is made herein to ratings assigned to certain types of securities
by Standard & Poor's Ratings Group ("S&P"), Moody's Investors Service, Inc.
("Moody's"), Fitch Investors Service, Inc. ("Fitch"), Duff & Phelps, Inc. ("Duff
& Phelps") and Thomson BankWatch, Inc., recognized independent securities
ratings institutions. A description of the ratings categories assigned by S&P
and Moody's is contained in Appendix A.
DIVERSIFICATION
Each of the Series except the JNL Capital Growth and JNL Aggressive Growth
Series qualifies as a diversified investment company under the Investment
Company Act of 1940 (the "1940 Act"). As a fundamental policy, a diversified
fund will not purchase a security of any issuer (except cash items and U.S.
Government securities) if a) it would cause the Series to own more than 10% of
the outstanding voting securities of that issuer or b) it would cause the
Series' holdings of that issuer to amount to more than 5% of the Series' total
assets (as applied in each case to 75% of the Series' total assets). As a
fundamental policy, the JNL Capital Growth and JNL Aggressive Growth Series also
will not purchase more than 10% of the outstanding voting securities of any
issuer; however, only 50% of total assets are subject to the 5% test. The JNL
Capital Growth and JNL Aggressive Growth Series may invest up to 50% of total
assets in the securities of as few as two issuers (not to exceed 25% in any one
issuer) while the other Series may invest up to 25% of their total assets in the
securities of one issuer. Neither the JNL Capital Growth nor the JNL Aggressive
Growth Series anticipates concentrating its holdings in so few issuers unless
its sub-adviser believes a security has the potential for substantial capital
appreciation consistent with a Series' investment policies and goals. To the
extent that any Series invests more than 5% of its assets in a particular
issuer, its exposure to credit risks and/or market risks associated with that
issuer increases. As an additional fundamental policy, no Series will invest
more than 25% of its total
10
<PAGE> 15
assets in any particular industry (other than U.S. Government securities),
except that the PPM America/JNL Money Market Series may invest a greater percent
of its assets in the domestic banking industry.
INTERNAL REVENUE SERVICE (IRS) LIMITATIONS
In addition to the diversification requirements stated above, each Series
intends to comply with the diversification requirements currently imposed by the
IRS on separate accounts of insurance companies as a condition of maintaining
the tax-deferred status of variable contracts. More specific information may be
contained in the participating insurance company's separate account prospectus.
- --------------------------------------------------------------------------------
JNL AGGRESSIVE GROWTH SERIES
- --------------------------------------------------------------------------------
The investment objective of the JNL Aggressive Growth Series is long-term
growth of capital. It is a non-diversified Series that pursues its investment
objective by investing primarily in common stocks of issuers of any size,
including larger, well-established companies and smaller, emerging growth
companies. The smaller or newer a company is, the more likely it may be to
suffer more significant losses as well as realize more substantial growth than
larger or more established issuers.
- --------------------------------------------------------------------------------
JNL CAPITAL GROWTH SERIES
- --------------------------------------------------------------------------------
The investment objective of the JNL Capital Growth Series is long-term
growth of capital in a manner consistent with the preservation of capital. It is
a non-diversified Series that pursues its investment objective by normally
investing at least 50% of its equity assets in securities issued by medium-sized
companies. Medium-sized companies are those whose market capitalizations fall
within the range of companies in the S&P MidCap 400 Index (the "MidCap Index").
Companies whose capitalization falls outside this range after the Series'
initial purchase continue to be considered medium-sized companies for the
purpose of this policy. As of December 30, 1996, the MidCap Index included
companies with capitalizations between approximately $192 million and $6.5
billion. The range of the MidCap Index is expected to change on a regular basis.
Subject to the above policy, the Series may also invest in smaller or larger
issuers.
- --------------------------------------------------------------------------------
JNL GLOBAL EQUITIES SERIES
- --------------------------------------------------------------------------------
The investment objective of the JNL Global Equities Series is long-term
growth of capital in a manner consistent with the preservation of capital. It is
a diversified Series that pursues its investment objective primarily through
investments in common stocks of foreign and domestic issuers. The Series is
permitted to invest on a worldwide basis in companies and other organizations of
any size, regardless of country of organization or place of principal business
activity, as well as domestic and foreign governments, government agencies and
other governmental entities. The Series normally invests in securities of
issuers from at least five different countries, including the United States,
although the Series may at times invest all of its assets in fewer than five
countries. The JNL Global Equities Series may not be suitable for investors that
are not able to bear the additional risks associated with the Series' more
extensive holdings of foreign securities.
11
<PAGE> 16
- --------------------------------------------------------------------------------
JNL AGGRESSIVE GROWTH SERIES, JNL CAPITAL GROWTH SERIES,
JNL GLOBAL EQUITIES SERIES
- --------------------------------------------------------------------------------
Each of the JNL Aggressive Growth, JNL Capital Growth, and JNL Global
Equities Series invests substantially all of its assets in common stocks when
its sub-adviser believes that the relevant market environment favors profitable
investing in those securities. Common stock investments are selected in
industries and companies that the sub-adviser believes are experiencing
favorable demand for their products and services, and which operate in a
favorable competitive environment and regulatory climate. The sub-adviser's
analysis and selection process focuses on stocks with earnings growth potential
that may not be recognized by the market. Such securities are selected primarily
for their capital growth potential; investment income is not a consideration.
These selection criteria apply equally to stocks of foreign issuers. In
addition, factors such as expected levels of inflation, government policies
influencing business conditions, the outlook for currency relationships, and
prospects for relative economic growth among countries, regions or geographic
areas may warrant greater consideration in selecting foreign stocks.
Each of the JNL Aggressive Growth, JNL Capital Growth and JNL Global
Equities Series invests primarily in common stocks of foreign and domestic
companies. Each Series may invest to a lesser degree in other types of
securities, including preferred stock, warrants, convertible securities and debt
securities. Debt securities that the Series may purchase include corporate bonds
and debentures (not to exceed 35% of net assets in high-yield/high-risk bonds)
(See "Investment Risks -- High Yield/High Risk Bonds"); government securities;
mortgage- and asset-backed securities (not to exceed 25% of assets); zero coupon
bonds (not to exceed 10% of assets); indexed/structured notes; high-grade
commercial paper; certificates of deposit; and repurchase agreements. Such
securities may offer growth potential because of anticipated changes in interest
rates, credit standing, currency relationships or other factors. Each of these
Series may also invest in short-term debt securities as a means of receiving a
return on idle cash.
When the Series' sub-adviser believes that market conditions are not
favorable for profitable investing or when the sub-adviser is otherwise unable
to locate favorable investment opportunities, the Series' investments may be
hedged to a greater degree and/or its cash or similar investments may increase.
In other words, the Series do not always stay fully invested in stocks and
bonds. Cash or similar investments are residual -- they represent the assets
that remain after the sub-adviser has committed available assets to desirable
investment opportunities. When a Series' cash position increases, it may not
participate in stock market advances or declines to the extent that it would if
it remained more fully invested in common stocks.
Although JNL Global Equities Series is committed to foreign investing, each
of these Series may invest without limit in equity and debt securities of
foreign issuers. The Series may invest directly in foreign securities
denominated in a foreign currency and not publicly traded in the United States.
Other ways of investing in foreign securities include depositary receipts or
shares, and passive foreign investment companies. Each of these Series may use
futures, options and other derivatives for hedging purposes or as a means of
enhancing return. Some securities that these Series may purchase may be issued
on a when-issued, delayed delivery or forward commitment basis.
Each of JNL Aggressive Growth, JNL Capital Growth and JNL Global Equities
Series may invest in "special situations" from time to time. A special situation
arises when, in the opinion of the sub-adviser, the securities of a particular
issuer will be recognized and appreciate in value due to a specific development
with respect to that issuer. Developments creating special situations might
include, among others, a new product or process, a technological breakthrough, a
management change or other extraordinary corporate event, or differences in
market supply of and demand for the security. Investment in special situations
may carry an additional risk of loss in the event that the anticipated
development does not occur or does not attract the expected attention. The
impact of this strategy on a Series will depend on the Series' size and the
extent of its holdings of special situation issuers relative to total net
assets.
12
<PAGE> 17
- --------------------------------------------------------------------------------
JNL/ALGER GROWTH SERIES
- --------------------------------------------------------------------------------
The investment objective of the JNL/Alger Growth Series is long-term
capital appreciation. It is a diversified Series that seeks to achieve its
objective by investing in equity securities, such as common or preferred stocks
that are listed on a national securities exchange, or securities convertible
into or exchangeable for equity securities, including warrants and rights.
Except during temporary defensive periods, the Series invests at least 85
percent of its net assets in equity securities and at least 65 percent of its
total assets in equity securities of companies that, at the time of purchase of
the securities, have total market capitalization of $1 billion or greater.
It is anticipated that the Series will invest primarily in companies whose
securities are traded on domestic stock exchanges or in the over-the-counter
market. These companies may still be in the developmental stage, may be older
companies that appear to be entering a new stage of growth progress owing to
factors such as management changes or development of new technology, products or
markets or may be companies providing products or services with a high unit
volume growth rate. The Series may invest up to 35 percent of its total assets
in equity securities of companies that, at the time of purchase, have total
market capitalization of less than $1 billion. In order to afford the Series the
flexibility to take advantage of new opportunities for investments in accordance
with its investment objective, the Series may hold up to 15 percent of its net
assets in money market instruments and repurchase agreements. During temporary
defensive periods, the Series may invest up to 100% of its assets in debt
securities, money market instruments and/or repurchase agreements. The Portfolio
may also purchase restricted securities (subject to a limit on all illiquid
securities of 10 percent of net assets), lend its securities and enter into
"short sales against the box." (See "Common Types of Securities and Management
Practices").
- --------------------------------------------------------------------------------
JNL/EAGLE CORE EQUITY SERIES
- --------------------------------------------------------------------------------
The investment objective of the JNL/Eagle Core Equity Series is long-term
capital appreciation and, secondarily, current income. It is a diversified
Series that seeks to achieve its objective by investing in common stocks that
the sub-adviser believes meet the criteria for one of three individual equity
strategies. The investment strategies which the sub-adviser utilizes to pursue
the Series' objective are the growth equity strategy, the value equity strategy
and the equity income strategy. In pursuing the growth equity strategy, the
sub-adviser will invest in securities which it believes have sufficient growth
potential to offer above-average long-term capital appreciation. Securities
which meet the criteria for the growth equity strategy will have at least one of
the following characteristics:
- expected earnings-per-share growth greater than the average of the S&P
500 Composite Stock Price Index ("S&P 500"); or
- return on equity greater than the average of the S&P 500.
In pursuing the value equity strategy, the sub-adviser will invest in
securities which it believes indicate above-average financial soundness and high
intrinsic value relative to price. Securities which meet the criteria for the
value equity strategy will have at least one of the following characteristics at
the time of purchase:
- price-to-earnings ratio or price-to-book value ratio of less than or
approximately equal to 75% of that of the broader equity market (as
measured by the S&P 500); or
- yield that approximates at least 50% of the prevailing average yield to
maturity of the long-term U.S. Government bond, as measured by the Lehman
Brothers Long Treasury Bond Index (or other similar index if this index
is not available); or
- per share going concern value (as estimated by the sub-adviser) that
exceeds book value and market value; or
- long-term debt below, or approximately equivalent to, tangible net worth.
In pursuing the equity income strategy, the sub-adviser will invest in
income-producing securities.
Under normal market conditions, at least 65% of the Series' total assets
will be invested in U.S. common stocks. With respect to the other 35% of its
total assets, the Series may invest in income-producing securities that the sub-
adviser believes are consistent with the Series' investment objective, common
stocks of foreign issuers, American Depositary Receipts ("ADRs"), foreign
currency transactions with respect to underlying common stock, preferred
13
<PAGE> 18
stock, convertible securities, corporate debt obligations, obligations of the
U.S. Government, its agencies and instrumentalities, repurchase agreements,
money market instruments, real estate investment trusts, futures contracts,
options, rights or warrants to subscribe for or purchase common stocks, and
securities that track the performance of a broad-based securities index, such as
S&P Depository Receipts. The Series may also loan its portfolio securities and
engage in short sales "against the box."
The Series will emphasize investments in securities rated investment grade
and unrated securities deemed by the sub-adviser to be of comparable quality,
but may invest up to 35% of its assets in securities rated below investment
grade and unrated securities deemed by the sub-adviser to be of comparable
quality. The Series, at the discretion of the sub-adviser, may retain a security
that has been downgraded below the initial investment criteria. (See "Investment
Risks -- High Yield/High Risk Bonds"). The Series may invest up to 25% of its
total assets in securities of foreign issuers, including ADRs. (See "Investment
Risks -- Foreign Securities").
For temporary defensive purposes during anticipated periods of general
market decline, the Series may invest up to 100% of its assets in money market
instruments, including securities issued or guaranteed by the U.S. Government,
its agencies or instrumentalities and repurchase agreements secured thereby,
bank certificates of deposit and banker's acceptances issued by banks having net
assets of at least $1 billion as of the end of their most recent fiscal year,
high grade commercial paper, and other long- and short-term debt instruments
that are rated A or higher by Moody's or S&P. It is impossible to predict when,
or for how long, such alternative strategies may be utilized.
In selecting common stocks to pursue the growth equity strategy, the
sub-adviser makes selections in part based on its opinion regarding the
sustainability of the company's competitive advantage in the marketplace as well
as the sub-adviser's opinion of the company's management team. The sub-adviser
will invest in companies that, in its opinion, will have long-term returns
greater than the average for the S&P 500. The sub-adviser normally will
reevaluate a security if it underperforms the S&P 500 by 15% or more during a
three-month period. At that time, a decision will be made to sell or hold the
security. If a particular stock appreciates to over 5% of the total assets of
the portfolio, the sub-adviser generally will reduce the position to less than
5%. If the stock price appreciates to a level that is not sustainable in the
opinion of the sub-adviser, the position generally will be sold to realize the
existing profits and avoid a potential price correction. If the sub-adviser
identifies a security that it considers to be a better investment than a current
holding, the sub-adviser generally will consider selling the current holding to
add the new security.
In selecting common stocks to pursue the value equity strategy, the
sub-adviser screens a universe of over 2500 companies. From this universe, the
sub-adviser anticipates that only a few hundred companies will meet one or more
of these investment criteria. Each of the companies is analyzed individually in
terms of its past and present competitive position within its perspective
industry. The sub-adviser makes selections based on its projections of the
companies' growth in earnings and dividends, earnings momentum, and
undervaluation based on a dividend discount model. The sub-adviser develops
target prices and value ranges from this analysis and makes portfolio selection
from among the top-rated securities. The sub-adviser periodically monitors the
Series' holdings of securities meeting these criteria to assure that they
continue to meet the selection criteria. A security normally will be sold once
it reaches its target price, when negative changes occur with respect to the
company or its industry, or when there is a significant change in the security
with respect to one or more of the four selection criteria listed above. The
Series may at times continue to hold equity securities that no longer meet the
criteria but that the sub-adviser deems suitable investments in view of the
Series' investment objective.
- --------------------------------------------------------------------------------
JNL/EAGLE SMALLCAP EQUITY SERIES
- --------------------------------------------------------------------------------
The investment objective of the JNL/Eagle SmallCap Equity Series is
long-term capital appreciation. It is a diversified Series that seeks to achieve
its objective by investing primarily in the equity securities of companies, most
of which have a total market capitalization of less than $1 billion ("small
capitalization companies"). Market capitalization is the total value of a
company's outstanding common stock. The Series will invest in securities of
companies that appear to the sub-adviser to be undervalued in relation to their
long-term earning power or the asset value of their issuers and that have
significant future growth potential. Securities may be undervalued because of
many factors, including market decline, poor economic conditions, tax-loss
selling or actual or anticipated unfavorable developments affecting the issuer
of the security. Any or all of these factors may provide buying opportunities
14
<PAGE> 19
at attractive prices relative to the long-term prospects for the companies in
question.
The Series invests primarily in common stocks, but also may invest in
preferred stocks, investment grade securities convertible into common stocks,
and warrants. The Series may purchase securities traded on recognized securities
exchanges and in the over-the-counter market. The Series normally invests at
least 65% of its total assets in the equity securities of companies each of
which, at the time of purchase, has a total market capitalization of less than
$1 billion. The Series may invest its remaining assets in ADRs, U.S. Government
securities, repurchase agreements or other short-term money market instruments.
The Series will emphasize investments in securities rated investment grade
and unrated securities deemed by the sub-adviser to be of comparable quality,
but may invest up to 5% of its assets in securities rated below investment grade
and unrated securities deemed by the sub-adviser to be of comparable quality.
The Series, at the discretion of the sub-adviser, may retain a security that has
been downgraded below the initial investment criteria. (See "Investment Risks --
High Yield/High Risk Bonds").
The sub-adviser currently believes that investments in small capitalization
companies may offer greater opportunities for growth of capital than investments
in larger, more established companies. Investing in smaller, newer issuers
generally involves greater risks than investing in larger, more established
issuers. Companies in which the Series is likely to invest may have limited
product lines, markets or financial resources and may be subject to more abrupt
or erratic market movements than securities of larger, more established
companies or the market averages in general. In addition, many small
capitalization companies may be in the early stages of development. Accordingly,
an investment in the Series may not be appropriate for all investors.
For temporary defensive purposes during anticipated periods of general
market decline, the Series may invest up to 100% of its assets in money market
instruments, including securities issued or guaranteed by the U.S. Government,
its agencies or instrumentalities and repurchase agreements secured thereby, as
well as bank certificates of deposit and banker's acceptances issued by banks
having net assets of at least $1 billion as of the end of their most recent
fiscal year, high-grade commercial paper, and other long- and short-term debt
instruments that are rated A or higher by Moody's or S&P. It is impossible to
predict when, or for how long, such alternative strategies may be utilized.
- --------------------------------------------------------------------------------
JNL/PUTNAM GROWTH SERIES
- --------------------------------------------------------------------------------
The investment objective of the JNL/Putnam Growth Series is to seek
long-term capital growth. It is a diversified Series that pursues its investment
objective by retaining maximum flexibility in the management of the Series
consisting mainly of common stocks. Since income is not an objective, any income
generated by the investment of the Series' assets will be incidental to its
objective.
The Series intends to invest primarily in the common stocks of companies
believed by the sub-adviser to have opportunities for capital growth. However,
since no one class or type of security at all times necessarily affords the
greatest promise for capital appreciation, the Series may invest any amount or
proportion of its assets in any class or type of security believed by the
sub-adviser to offer potential for capital appreciation over both the
intermediate and long term. Normally, of course, its investment will consist
largely of common stocks selected for the promise they offer of appreciation of
capital. However, the Series may also invest in preferred stocks, bonds,
convertible preferred stocks and convertible debentures if, in the judgment of
the sub-adviser, the investment would further its investment objectives. The
Series may invest up to 20% of its net assets in foreign securities. The Series
may also engage in certain options transactions and enter into financial futures
contracts and related options. Each security held will be monitored to determine
whether it is contributing to the basic objective of long-term growth of
capital.
The sub-adviser believes that a portfolio of such securities provides the
most effective way to obtain capital appreciation, but when, for temporary
defensive purposes (as when market conditions for growth stocks are adverse),
other types of investments appear advantageous on the basis of combined
considerations of risk and the protection of capital values, investments may be
made in fixed income securities with or without warrants or conversion features.
In addition, for such temporary defensive purposes, the Series may pursue a
policy of retaining cash or investing part or all of its assets in cash
equivalents.
To the extent that the Series holds bonds, it may be negatively affected by
adverse interest rate movements and credit quality. Generally, when interest
rates rise it may be expected that the value of bonds may decrease.
15
<PAGE> 20
- --------------------------------------------------------------------------------
JNL/PUTNAM VALUE EQUITY SERIES
- --------------------------------------------------------------------------------
The investment objective of the JNL/Putnam Value Equity Series is capital
growth, with income as a secondary objective by investing primarily in common
stocks which the sub-adviser believes to be undervalued relative to underlying
asset value or earnings potential at the time of purchase. It is a diversified
Series that seeks superior market cycle total returns. The Series invests
primarily in the common stocks of large capitalization companies mainly
domiciled in the United States. Common stocks for this purpose include common
stocks and equivalents, such as securities convertible into common stocks and
securities having common stock characteristics, such as rights and warrants to
purchase common stocks. Under normal circumstances, the Series will invest at
least 65% of the value of its total assets in equity securities.
Companies considered attractive generally will have the following
characteristics: 1) stocks typically will have distinctly above average dividend
yields, and 2) the market prices of the stocks will be undervalued relative to
the normal earning power of the company. The thrust of this approach is to seek
investments where current investor enthusiasm is low, as reflected in their
valuations. Exposure is reduced when the investment community's perceptions
improve and the company approaches fair valuation.
The sub-adviser takes a long-term investment approach by placing a strong
emphasis on its ability to determine attractive values and does not try to
determine short-term changes in the general market level. It is anticipated that
the annual turnover rate of the Series will not exceed 100% in normal
circumstances. The Series may invest up to 25% of its total assets in the common
stocks of foreign issuers, including ADRs.
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PPM AMERICA/JNL BALANCED SERIES
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The investment objective of the PPM America/JNL Balanced Series is to seek
reasonable income, long-term capital growth and preservation of capital. It is a
diversified Series that intends to invest based on combined consideration of
risk, income, capital enhancement, and protection of capital value. The Series
may invest in any type or class of security. Normally, the Series will invest in
common stocks and fixed income securities; however, it may also invest in
securities convertible into common stocks. At least 25% of the value of its
assets will be invested in fixed income senior securities.
The Series may also engage in certain options transactions and enter into
financial futures contracts and related options for hedging purposes and may
invest in deferred or zero coupon debt obligations. In implementing the
investment objectives of this Series, the sub-adviser will select securities
believed to have potential for the production of current income, with emphasis
on securities that also have potential for capital enhancement. For temporary
defensive purposes when the sub-adviser believes that adverse market conditions
warrant, the Series may actively pursue a policy of retaining cash or investing
part or all of its assets in cash equivalents, such as government securities and
high grade commercial paper.
The Series will emphasize investments in investment grade fixed income
securities which are rated within the four highest categories by recognized
rating agencies, e.g., S&P and Moody's. However, the Series may take a modest
position in lower or non-rated fixed income securities, but the Series will not
invest more than 35% of its net assets, determined at the time of investment, in
high yield, high risk fixed income securities. The Series may invest in bonds
rated as low as Ca by Moody's or CC by S&P. A fixed income securities issue may
have its ratings reduced below the minimum permitted for purchase by the Series.
In that event the sub-adviser will determine whether the Series should continue
to hold such issue in its portfolio. If, in the sub-adviser's opinion, market
conditions warrant, the Series may increase its position in lower or non-rated
securities from time to time. The lower rated and non-rated convertible
securities are predominantly speculative with respect to the issuer's capacity
to repay principal and pay interest. Investment in lower rated and non-rated
convertible fixed income securities normally involves a greater degree of market
and credit risk than does investment in securities having higher ratings. The
price of these fixed income securities will generally move in inverse proportion
to interest rates. In addition, non-rated securities are often less marketable
than rated securities. To the
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extent that the Series holds any lower rated or non-rated securities, it may be
negatively affected by adverse economic developments, increased volatility and
lack of liquidity. (See "Investment Risks -- High Yield/High Risk Bonds").
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PPM AMERICA/JNL HIGH YIELD BOND SERIES
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The primary investment objective of the PPM America/JNL High Yield Bond
Series is a high level of current income; its secondary investment objective is
capital appreciation by investing in fixed income securities, with emphasis on
higher-yielding, higher-risk, lower-rated or unrated corporate bonds. It is a
diversified Series.
Under normal market conditions, the Series will be invested substantially
in long-term (over 10 years to maturity) and intermediate-term (3 to 10 years to
maturity) fixed income securities, with emphasis on higher-yielding,
higher-risk, lower-rated or unrated corporate bonds. These high risk, high yield
bonds typically are subject to greater market fluctuations and risk of loss of
income and principal due to default by the issuer than are investments in
lower-yielding, higher-rated bonds. (See "Investment Risks -- High Yield/High
Risk Bonds").
High risk, high yield bonds generally include any bonds that are rated Ba
or below by Moody's or BB or below by S&P or that are unrated but considered by
the sub-adviser to be of equivalent credit quality. Bonds rated Ba or BB or
below are considered speculative. The Series may invest without limitation in
bonds rated as low as Ca by Moody's or C by S&P (or unrated but considered by
the sub-adviser to be of equivalent quality). In addition, the Series may invest
up to 10% of its total assets in bonds rated C by Moody's or D by S&P (or
unrated but considered by the sub-adviser to be of equivalent quality).
High-yield bonds are riskier than lower-yielding, higher-rated bonds.
In pursuing its secondary investment objective of capital appreciation, the
Series may purchase high yield bonds that are expected by the sub-adviser to
increase in value due to improvements in their credit quality or ratings or
anticipated declines in interest rates. In addition, the Series may invest for
this purpose up to 25% of its assets in equity securities, such as common
stocks, or other securities having common stock characteristics. Securities
designated as having common stock characteristics include, but are not limited
to, securities convertible into or exchangeable for common stock.
Treating high current income as its primary investment objective means that
the Series may forego opportunities that would result in capital gains and may
accept prudent risks to capital value, in each case to take advantage of
opportunities for higher current income.
Up to 25% of the Series' assets may be invested in securities of foreign
issuers, which are generally denominated in currencies other than the U.S.
dollar. The Series also has the ability to hold a portion of its assets in
foreign currencies and to enter into forward foreign currency exchange
contracts, currency options, currency and financial futures contracts, and
options on such futures contracts. The Series may enter into repurchase
agreements and firm commitment agreements and may purchase securities on a
when-issued basis. Investment in foreign securities also involves special risks.
Under normal market conditions, the Series will invest at least 65% of its
total assets in high risk, high yield bonds as described above. Subject to this
requirement, the Series may maintain assets in cash or cash equivalents,
including commercial bank obligations (certificates of deposit, which are
interest-bearing time deposits; bankers' acceptances, which are time drafts on a
commercial bank for which the bank accepts an irrevocable obligation to pay at
maturity; and demand or time deposits), commercial paper (short-term notes
issued by corporations or governmental bodies) and obligations issued or
guaranteed by the U.S. Government. The Series may adopt temporary defensive
position investment policies during adverse market, economic or other
circumstances that require immediate action to avoid losses. During periods when
and to the extent that the Series has assumed a temporary defensive position,
the Series may not be pursuing its investment objective.
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PPM AMERICA/JNL MONEY MARKET SERIES
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The investment objective of the PPM America/JNL Money Market Series is to
achieve as high a level of current income as is consistent with the preservation
of capital and maintenance of liquidity by investing in high quality, short-term
money market instruments. It is a diversified Series that pursues its investment
objective by investing mainly in debt, but the Series shall retain maximum
flexibility in the management of its portfolio.
The Series invests in high quality money market instruments. These
instruments are considered to be among the safest investments available because
of their short maturities, liquidity and high quality ratings.
This Series will invest exclusively in the following types of high quality,
U.S. dollar denominated money market instruments that mature in 397 days or
less:
- Obligations issued or guaranteed as to principal and interest by the U.S.
Government, its agencies and instrumentalities.
- Obligations, such as time deposits, certificates of deposit and bankers
acceptances, issued by U.S. banks and savings banks that are members of
the Federal Deposit Insurance Corporation, including their foreign
branches and foreign subsidiaries, and issued by domestic and foreign
branches of foreign banks.
- Corporate obligations, including commercial paper, of domestic and
foreign issuers.
- Obligations issued or guaranteed by one or more foreign governments or
any of their political subdivisions, agencies or instrumentalities,
including obligations of supranational entities.
- Repurchase agreements on obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities.
Investments are managed to meet the quality and diversification
requirements of the 1940 Act. Under Rule 2a-7 under the 1940 Act, the Series
must maintain a dollar-weighted average portfolio maturity of 90 days or less
and may only purchase U.S. dollar denominated instruments that are determined to
present minimal credit risks and that at the time of acquisition are rated in
the top two rating categories by the required number of nationally recognized
statistical rating organizations (at least two or, if only one rating agency has
rated the security, that one agency) or, if unrated, are deemed comparable in
quality. Determination of credit risks and quality will be made by the
sub-adviser in accordance with procedures adopted by the Trust's Board of
Trustees. The diversification requirements of Rule 2a-7 provide generally that
the Series may not at the time of acquisition invest more than 5% of its assets
in securities of any one issuer or invest more than 5% of its assets in
securities that have not been rated in the highest category by the required
number of rating agencies or, if unrated, have not been deemed comparable,
except U.S. Government securities and repurchase agreements on such securities.
A more complete description of the rating categories is set forth under Appendix
A.
The Series may invest more than 25% of its total assets in the domestic
banking industry, which would cause the Series to be more exposed to the risks
of such industry. Bank obligations held by the Series do not benefit materially
from insurance from the Federal Deposit Insurance Corporation. The 25%
limitation does not apply to U.S. Government securities, including obligations
issued or guaranteed by its agencies or instrumentalities.
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SALOMON BROTHERS/JNL GLOBAL BOND SERIES
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The primary investment objective of the Salomon Brothers/JNL Global Bond
Series is to seek a high level of current income. As a secondary objective, the
Series will seek capital appreciation. It is a diversified Series. The Series
seeks to achieve its objectives by investing in a globally diverse portfolio of
fixed income investments and by giving the sub-adviser broad discretion to
deploy the assets among certain segments of the fixed income market that the
sub-adviser believes will best contribute to the achievement of the Series'
objectives. At any point in time, the sub-adviser will deploy the Series' assets
based on its analysis of current economic and market conditions and the relative
risks and opportunities present in the following market segments: U.S.
Government obligations, investment
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<PAGE> 23
grade domestic corporate debt, high yield domestic corporate debt securities,
mortgage-backed securities and investment grade and high yield foreign
corporate and sovereign debt securities. The sub-adviser has entered into an
agreement with its London-based affiliate, Salomon Brothers Asset Management
Limited ("SBAM Limited") pursuant to which SBAM Limited will provide certain
advisory services to the sub-adviser relating to currency transactions and
investments in non-dollar denominated debt securities for the benefit of the
Series.
The sub-adviser will determine the amount of assets to be allocated to each
type of security in which it invests based on its assessment of the maximum
level of income and capital appreciation that can be achieved from a portfolio
which is invested in these securities. In making this determination, the
sub-adviser will rely in part on quantitative analytical techniques that measure
relative risks and opportunities of each type of security based on current and
historical economic, market, political and technical data for each type of
security, as well as on its own assessment of economic and market conditions
both on a global and local (country) basis. In performing quantitative analysis,
the sub-adviser will employ prepayment analysis and option adjusted spread
technology to evaluate mortgage securities, mean variance optimization models to
evaluate foreign debt securities, and total rate of return analysis to measure
relative risks and opportunities in other fixed income markets. Economic factors
considered will include current and projected levels of growth and inflation,
balance of payments, status and monetary policy. The allocation of assets to
foreign debt securities will further be influenced by current and expected
currency relationships and political and sovereign factors. The sub-adviser will
continuously review this allocation of assets and make such adjustments as it
deems appropriate. The Series does not plan to establish a minimum or a maximum
percentage of the assets which it will invest in any particular type of fixed
income security.
In addition, the sub-adviser will have discretion to select the range of
maturities of the various fixed income securities in which the Series invests.
The sub-adviser anticipates that under current market conditions the Series'
portfolio securities will have a weighted average life of 6 to 10 years.
However, the weighted average life of the portfolio securities may vary
substantially from time to time depending on economic and market conditions. The
Series may adopt temporary defensive position investment policies during adverse
market, economic or other circumstances that require immediate action to avoid
losses. During periods when and to the extent that the Series has assumed a
temporary defensive position, the Series may not be pursuing its investment
objective.
The investment grade corporate debt securities and the investment grade
foreign debt securities to be purchased by the Series are domestic and foreign
debt securities rated within the four highest bond ratings of either Moody's or
S&P, or, if unrated, deemed to be of equivalent quality in the sub-adviser's
judgment. While debt securities carrying the fourth highest quality rating (Baa
by Moody's or BBB by S&P) are considered investment grade and are viewed to have
adequate capacity for payment of principal and interest, investments in such
securities involve a higher degree of risk than that associated with investments
in debt securities in the higher rating categories and such debt securities lack
outstanding investment characteristics and in fact have speculative
characteristics as well. For example, changes in economic conditions or other
circumstances are more likely to lead to a weakened capacity to make principal
and interest payments than is the case with higher grade debt securities.
The types and characteristics of the U.S. Government obligations and
mortgage-backed securities to be purchased by the Series are set forth below in
the discussion of investment objectives and policies for the Salomon
Brothers/JNL U.S. Government & Quality Bond Series. In addition, the Series may
purchase privately issued mortgage securities which are not guaranteed by the
U.S. Government or its agencies or instrumentalities and may purchase stripped
mortgage securities, including interest-only and principal-only securities.
Additional information with respect to securities to be purchased by the Series
is set forth below under the sections entitled "Common Types of Securities and
Management Practices" and "Investment Risks."
The Series may invest in debt obligations issued or guaranteed by a foreign
sovereign government or one of its agencies or political subdivisions and debt
obligations issued or guaranteed by supranational organizations. Supranational
entities include international organizations designated or supported by
governmental entities to promote economic reconstruction or development and
international banking institutions and related government agencies. Examples
include the International Bank for Reconstruction and Development (the "World
Bank"), the European Coal and Steel Community, the Asian Development Bank and
the Inter-American Development Bank. Such supranational issued instruments may
be denominated in multi-national currency units.
In pursuing the Series' investment objectives, the Series reserves the
right to invest predominantly in medium or lower-rated securities. Although the
Series has the ability to invest up to 100% of its assets in lower-rated
securities, the Series' sub-adviser does not anticipate investing in excess of
75% of the Series' assets in such securities. Investments of this type involve
significantly greater risks, including price volatility and risk of default in
the payment of interest and
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<PAGE> 24
principal, than higher-quality securities. The sub-adviser anticipates that
under current market conditions, a significant portion of the Series assets will
be invested in such high risk, high yield securities. By investing a portion of
the Series' assets in securities rated below investment grade as well as through
investments in mortgage securities and foreign debt securities, the sub-adviser
expects to provide investors with a higher yield than a high-quality domestic
corporate bond fund. Certain of the debt securities in which the Series may
invest may be rated as low as C by Moody's or D by S&P or may be considered
comparable to securities having such ratings. Medium and lower-rated securities
are considered to be predominantly speculative with respect to the issuer's
capacity to pay interest and repay principal.
In light of the risks associated with high yield corporate and sovereign
debt securities, the sub-adviser will take various factors into consideration in
evaluating the creditworthiness of an issuer. For corporate debt securities,
these will typically include the issuer's financial resources, its sensitivity
to economic conditions and trends, the operating history of the issuer, and the
experience and track record of the issuer's management. For sovereign debt
instruments, these will typically include the economic and political conditions
within the issuer's country, the issuer's overall and external debt levels and
debt service ratios, the issuer's access to capital markets and other sources of
funding, and the issuer's debt service payment history. The sub-adviser will
also review the ratings, if any, assigned to the security by any recognized
rating agencies, although the sub-adviser's judgment as to the quality of a debt
security may differ from that suggested by the rating published by a rating
service. The Series' ability to achieve its investment objective may be more
dependent on the sub-adviser's credit analysis than would be the case if it
invested in higher quality debt securities.
The high yield sovereign debt securities in which the Series may invest are
U.S. dollar-denominated debt securities, including Brady Bonds, and non-dollar
denominated debt securities that are issued or guaranteed by governments or
governmental entities of developing and emerging countries. The sub-adviser
expects that these countries will consist primarily of those which have issued
or have announced plans to issue Brady Bonds, but the portfolio is not limited
to investing in the debt of such countries. Brady Bonds are debt securities
issued under the framework of the Brady Plan, an initiative announced by former
U.S. Treasury Secretary Nicholas F. Brady in 1989 as a mechanism for debtor
nations to restructure their outstanding external indebtedness. (See "Investment
Risks -- High Yield/ High Risk Bonds"). The sub-adviser anticipates that the
Series' initial investments in sovereign debt will be concentrated in Latin
American countries, including Mexico and Central and South American and
Caribbean countries. The sub-adviser expects to take advantage of additional
opportunities for investment in the debt of North African countries, such as
Nigeria and Morocco, Eastern European countries, such as Poland and Hungary, and
Southeast Asian countries, such as the Philippines. Sovereign governments may
include national, provincial, state, municipal or other foreign governments with
taxing authority. Governmental entities may include the agencies and
instrumentalities of such governments, as well as state-owned enterprises. (For
a more detailed discussion of high yield sovereign debt securities, see
"Investment Risks -- High Yield/ High Risk Bonds").
The Series will be subject to special risks as a result of its ability to
invest up to 100% of its assets in foreign securities (including emerging market
securities). Such securities may be non-U.S. dollar denominated and there is no
limit on the percentage of the Series' assets that can be invested in non-dollar
denominated securities. The sub-adviser anticipates that, under current market
conditions, a significant portion of the Series' assets will be invested in
foreign securities. (See "Investment Risks"). The ability to spread its
investments among the fixed income markets in a number of different countries
may, however, reduce the overall level or market risk to the extent it may
reduce the Series' exposure to a single market.
The Series may invest in zero coupon securities and pay-in-kind bonds. (See
"Common Types of Securities and Management Practices"). In addition, the Series
may invest in fixed and floating rate loans ("Loans") arranged through private
negotiations between a corporate borrower or a foreign sovereign entity and one
or more financial institutions ("Lenders"). The Series may invest in such Loans
in the form of participations in Loans ("Participations") and assignments of all
or a portion of Loans from third parties ("Assignments"). The Series considers
these investments to be investments in debt securities for purposes of this
Prospectus. Participations typically will result in the Series having a
contractual relationship only with the Lender, not with the borrower. The Series
will have the right to receive payments of principal, interest and any fees to
which it is entitled only from the Lender selling the Participation and only
upon receipt by the Lender of the payments from the borrower. In connection with
purchasing Participations, the Series generally will have no right to enforce
compliance by the borrower with the terms of the loan agreement relating to the
Loan, nor any rights of set-off against the borrower, and the Series may not
benefit directly from any collateral supporting the Loan in which it has
purchased the Participation. As a result, the Series will assume the credit risk
of both the borrower and the Lender that is selling the Participation. In the
event of the insolvency of the Lender selling a Participation, the Series may be
treated as a general creditor of the Lender and
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may not benefit from any set-off between the Lender and the borrower. The Series
will acquire Participations only if the Lender interpositioned between the
Series and the borrower is determined by the sub-adviser to be creditworthy.
When the Series purchases Assignments from Lenders, the Series will acquire
direct rights against the borrower on the Loan, except that under certain
circumstances such rights may be more limited than those held by the assigning
Lender.
The Series may have difficulty disposing of Assignments and Participations.
Because the market for such instruments is not highly liquid, the Series
anticipates that such instruments could be sold only to a limited number of
institutional investors. The lack of a highly liquid secondary market may have
an adverse impact on the value of such instruments and will have an adverse
impact on the Series' ability to dispose of particular Assignments or
Participations in response to a specific economic event, such as deterioration
in the creditworthiness of the borrower. The Series currently treats investments
in Participations and Assignments as illiquid for purposes of its limitation on
investment in illiquid securities. However, the Trustees may in the future adopt
policies and procedures for the purpose of determining whether Assignments and
Loan Participations are liquid or illiquid. Pursuant to such policies and
procedures, the Trustees would delegate to the sub-adviser the determination as
to whether a particular Loan Participation or Assignment is liquid or illiquid,
requiring that consideration be given to, among other things, the frequency of
quotes, the number of dealers willing to sell and the number of potential
purchasers, the nature of the Loan Participation or Assignment and the time
needed to dispose of it and the contractual provisions of the relevant
documentation. The Trustees would periodically review purchases and sales of
Assignments and Loan Participations. To the extent that liquid Assignments and
Loan Participations that the Series held became illiquid, due to the lack of
sufficient buyers or market or other conditions, the percentage of the Series'
assets invested in illiquid assets would increase.
The Series may invest up to 20% of its assets in common stock, convertible
securities, warrants, preferred stock or other equity securities when consistent
with the Series' objectives. The Series will generally hold such equity
investments as a result of purchases of unit offerings of fixed income
securities which include such securities or in connection with an actual or
proposed conversion or exchange of fixed income securities, but may also
purchase equity securities not associated with fixed income securities when, in
the opinion of the sub-adviser, such purchase is appropriate.
The Series currently intends to invest substantially all of its assets in
fixed income securities. In order to maintain liquidity, however, the Series may
invest up to 20% of its assets in high-quality short-term money market
instruments. If at some future date, in the opinion of the sub-adviser, adverse
conditions prevail in the market for fixed income securities, the Series for
temporary defensive purposes may invest its assets without limit in high-quality
short-term money market instruments. The types and characteristics of the money
market securities to be purchased by the Series are set forth in the discussion
of investment objectives and policies of the PPM America/JNL Money Market
Series.
The Series may enter into repurchase and reverse repurchase agreements,
purchase securities on a firm commitment basis, including when-issued
securities, enter into mortgage "dollar rolls" and lend portfolio securities.
The Series will not make loans of portfolio securities with a value in excess of
25% of the Series' total assets. The Series may also enter into options, futures
and currency transactions, although with the exception of currency transactions,
it is not presently anticipated that any of these strategies will be utilized to
a significant degree by the Series. (See "Common Types of Securities and
Management Practices" and "Investment Risks"). The Series' ability to pursue
certain of these strategies may be limited by applicable regulations of the
Securities and Exchange Commission ("SEC"), the Commodity Futures Trading
Commission ("CFTC") and the federal income tax requirements applicable to
regulated investment companies.
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SALOMON BROTHERS/JNL U.S. GOVERNMENT & QUALITY BOND SERIES
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The investment objective of the Salomon Brothers/JNL U.S. Government &
Quality Bond Series is to obtain a high level of current income. It is a
diversified Series that seeks to attain its objective by investing primarily in
debt obligations and mortgage-backed securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities including collateralized mortgage
obligations backed by such securities. The Series may also invest a portion of
its assets in investment grade bonds.
At least 65% of the total assets of the Series will be invested in:
(1) U.S. Treasury obligations;
(2) obligations issued or guaranteed by agencies or instrumentalities of
the U.S. Government which are backed by their own credit and may not be
backed by the full faith and credit of the U.S. Government;
(3) mortgage-backed securities guaranteed by the Government National
Mortgage Association that are supported by the full faith and credit of
the U.S. Government. Such securities entitle the holder to receive all
interest and principal payments due whether or not payments are
actually made on the underlying mortgages;
(4) mortgage-backed securities guaranteed by agencies or instrumentalities
of the U.S. Government which are supported by their own credit but not
the full faith and credit of the U.S. Government, such as the Federal
Home Loan Mortgage Corporation and the Federal National Mortgage
Association; and
(5) collateralized mortgage obligations issued by private issuers for which
the underlying mortgage-backed securities serving as collateral are
backed (i) by the credit alone of the U.S. Government agency or
instrumentality which issues or guarantees the mortgage-backed
securities, or (ii) by the full faith and credit of the U.S.
Government.
Any guarantee of the securities in which the Series invests runs only to
the principal and interest payments on the securities and not to the market
value of such securities or to the principal and interest payments on the
underlying mortgages. In addition, the guarantee only runs to the portfolio
securities held by the Series and not the purchase of shares of the Series.
The Series may invest in securities of any maturity or effective duration
and, accordingly, the composition and weighted average maturity of the Series'
portfolio will vary from time to time, based upon the sub-adviser's
determination of how best to achieve the Series' investment objective. With
respect to mortgage-backed securities in which the Series invests, average
maturity and duration are determined by using mathematical models that
incorporate prepayment assumptions and other factors that involve estimates of
future economic parameters. These estimates may vary from actual results,
particularly during periods of extreme market volatility. In addition, the
average maturity and duration of mortgage-backed derivative securities may not
accurately reflect the price volatility of such securities under certain market
conditions.
A significant portion of the Series' assets may from time to time be
invested in mortgage-backed securities. The mortgage-backed securities in which
the Series invests represent participating interests in pools of fixed rate and
adjustable rate residential mortgage loans issued or guaranteed by agencies or
instrumentalities of the U.S. Government. Mortgage-backed securities are issued
by lenders such as mortgage bankers, commercial banks, and savings and loan
associations. Mortgage-backed securities generally provide monthly payments
which are, in effect, a "pass-through" of the monthly interest and principal
payments (including any prepayments) made by the individual borrowers on the
pooled mortgage loans. Principal prepayments result from the sale of the
underlying property or the refinancing or foreclosure of underlying mortgages.
The yield of mortgage-backed securities is based upon the prepayment rates
experienced over the life of the security. Prepayments tend to increase during
periods of falling interest rates, while during periods of rising interest rates
prepayments will most likely decline. Reinvestment by the Series of scheduled
principal payments and unscheduled prepayments may occur at higher or lower
rates than the original investment, thus affecting the yield of the Series.
Monthly interest payments received by the Series have a compounding effect which
will increase the yield to shareholders as compared to debt obligations that pay
interest semi-annually. Because of the reinvestment of prepayments of principal
at current rates, mortgage-backed securities may be less effective than Treasury
bonds of similar maturity at maintaining yields during periods of declining
interest rates. Also, although the value of debt securities may increase as
interest rates decline, the value of these pass-through type of securities may
not increase as much due to the prepayment feature.
While the Series seeks a high level of current income, it cannot invest in
instruments such as lower grade
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corporate obligations which offer higher yields but are subject to greater
credit risks. The Series will not knowingly invest in a high risk "mortgage
security," generally defined as any mortgage security that exhibits
significantly greater price volatility than a benchmark security, the Federal
National Mortgage Association current coupon 30-year mortgage-backed pass
through security. Shares of the Series are neither insured nor guaranteed by the
U.S. Government, its agencies or instrumentalities. Neither the issuance by nor
the guarantee of a U.S. Government agency for a security constitutes assurance
that the security will not significantly fluctuate in value or that the Series
will receive the originally anticipated yield on the security.
The Series may also invest up to 35% of its assets in U.S.
dollar-denominated securities rated AAA, AA, A or BBB by S&P or Aaa, Aa, A or
Baa by Moody's, or if unrated, determined to be of comparable quality to
securities in those ratings categories by the sub-adviser. The Series may not
invest more than 10% of total assets in obligations of foreign issuers.
Investments in foreign securities will subject the Series to special
considerations related to political, economic and legal conditions outside of
the U.S. (See "Investment Risks"). These considerations include the possibility
of expropriation, nationalization, withholding taxes on income and difficulties
in enforcing judgments. Foreign securities may be less liquid and more volatile
than comparable U.S. securities.
The Series may enter into repurchase and reverse repurchase agreements,
purchase securities on a firm commitment basis, including when-issued
securities, and lend portfolio securities. The Series will not make loans of
portfolio securities with a value in excess of 25% of the value of its total
assets. The Series may also enter into mortgage "dollar rolls." (For a
description of these investment practices and the risks associated with them,
see "Common Types of Securities and Management Practices" and "Investment
Risks").
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T. ROWE PRICE/JNL ESTABLISHED GROWTH SERIES
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The investment objective of the T. Rowe Price/JNL Established Growth Series
is to seek long-term growth of capital and increasing dividend income through
investment primarily in common stocks of well-established growth companies. A
growth company is defined as one which: (1) has demonstrated historical growth
of earnings faster than the growth of inflation and the economy in general; and
(2) has indications of being able to continue this growth pattern in the future.
Total return will consist primarily of capital appreciation or depreciation and
secondarily of dividend income.
It is a diversified Series that will invest primarily in the common stock
of a diversified group of well-established growth companies. While current
dividend income is not a prerequisite in the selection of a growth company, the
companies in which the Series will invest normally have a record of paying
dividends and are generally expected to increase the amounts of such dividends
in future years as earnings increase. Although the Series will invest primarily
in U.S. common stocks, it may also purchase other types of securities, for
example, convertible securities, warrants, hybrid instruments, restricted
securities, futures and options, when considered consistent with the Series'
investment objective and program. The Series may invest up to 30% of its total
assets (excluding reserves) in foreign securities, including ADRs.
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T. ROWE PRICE/JNL INTERNATIONAL EQUITY INVESTMENT SERIES
- --------------------------------------------------------------------------------
The investment objective of the T. Rowe Price/JNL International Equity
Investment Series is to seek long-term growth of capital through investments
primarily in common stocks of established, non-U.S. companies. Total return
consists of capital appreciation or depreciation, dividend income, and currency
gains or losses.
Over the last 30 years, many foreign economies have grown faster than the
United States' economy, and the return from equity investments in these
countries has often exceeded the return on similar investments in the United
States. Moreover, there has normally been a wide and largely unrelated variation
in performance between international equity markets over this period. Although
there can be no assurance that these conditions will continue, the Series'
sub-adviser, within the framework of diversification, seeks to identify and
invest in companies participating in the faster growing foreign economies and
markets. The sub-adviser believes that investment in foreign securities offers
significant potential for long-term capital appreciation and an opportunity to
achieve investment diversification. The Series may also purchase other
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types of securities, for example, common and preferred stocks, convertible
securities, fixed income securities, hybrid instruments, restricted securities,
foreign currency transactions, futures and options.
In analyzing companies for investment, the sub-adviser ordinarily looks for
one or more of the following characteristics: an above-average earnings growth
per share; high return on invested capital; healthy balance sheet; sound
financial and accounting policies and overall financial strength; strong
competitive advantages; effective research and product development and
marketing; efficient service; pricing flexibility; strength of management; and
general operating characteristics which will enable the companies to compete
successfully in their market place. While current dividend income is not a
prerequisite in the selection of portfolio companies, the companies in which the
Series invests, normally will have a record of paying dividends, and will
generally be expected to increase the amounts of such dividends in future years
as earnings increase.
It is a diversified Series that intends to diversify investments broadly
among countries and to normally have at least three different countries
represented in the Series. The Series may invest in countries of the Far East
and Europe, as well as South Africa, Australia, Canada and other areas
(including developing countries). Under unusual circumstances, however, the
Series may invest substantially all of its assets in one or two countries.
- --------------------------------------------------------------------------------
T. ROWE PRICE/JNL MID-CAP GROWTH SERIES
- --------------------------------------------------------------------------------
The investment objective of the T. Rowe Price/JNL Mid-Cap Growth Series is
to provide long-term growth of capital by investing primarily in the common
stock of companies with medium-sized market capitalizations ("mid-cap") and the
potential for above-average growth.
It is a diversified Series that will invest at least 65% of its total
assets in a diversified portfolio of mid-cap common stocks with above-average
growth potential. A mid-cap company is defined as one whose market
capitalization falls within the capitalization range of companies included in
the S&P MidCap 400 Index. Mid-cap growth companies are often still in the early,
more dynamic phase of a company's life cycle, but have enough corporate history
that they are no longer considered new or emerging. By focusing their
activities, mid-cap companies may be more responsive and better able to adapt to
the changing needs of their markets. They are usually mature enough to have
established organizational structures and the depth of management needed to
expand their operations. In addition, these companies generally have sufficient
financial resources and access to capital to finance their growth.
While investing in mid-cap growth companies generally entails greater risk
and volatility than investing in large, well-established companies, mid-cap
companies are expected to offer the potential for more rapid growth. They may
also offer greater potential for capital appreciation because of their higher
growth rates. In addition, the stocks of such companies are less actively
followed by securities analysts and may, therefore, be undervalued by investors.
The sub-adviser will rely on its proprietary research to identify mid-cap
companies with attractive growth prospects. The Series will seek to invest
primarily in companies which: 1) offer proven products or services, 2) have a
historical record of earnings growth that is above average, 3) demonstrate the
potential to sustain earnings growth, 4) operate in industries experiencing
increasing demand, and/or 5) are believed to be reasonably valued in the
marketplace. There is, of course, no guarantee the Series will be able to
identify such companies or that its investment in them will be successful.
Although the Series will invest primarily in U.S. common stocks, it may
also purchase other types of securities, for example, convertible securities,
restricted securities, hybrid instruments, warrants, futures and options, when
considered consistent with the Series' investment objective and program. The
Series may invest up to 25% of its assets (excluding reserves) in foreign
securities, including ADRs.
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COMMON TYPES OF SECURITIES AND MANAGEMENT PRACTICES
- --------------------------------------------------------------------------------
SECURITIES AND MANAGEMENT PRACTICES
This section describes some of the types of securities a Series may hold in
its portfolio and the various kinds of investment practices that may be used in
day-to-day portfolio management. A Series may invest in the following securities
or engage in the following practices to the extent that such securities and
practices are consistent with the Series' investment objective(s) and policies
described herein. Each Series' investment program is subject to further
restrictions described in the Statement of Additional Information.
BORROWING AND LENDING. A Series may borrow money from banks for temporary
or emergency purposes in amounts up to 25% of its total assets. To secure
borrowings a Series may mortgage or pledge securities in amounts up to 15% of
its net assets. As a fundamental policy, a Series will not lend securities or
other assets if, as a result, more than 25% of its total assets would be lent to
other parties.
CASH POSITION. A Series may hold a certain portion of its assets in
repurchase agreements and money market securities rated in one of the two
highest rating categories by a nationally recognized statistical rating
organization, maturing in one year or less. For temporary, defensive purposes, a
Series may invest without limitation in such securities. This reserve position
provides flexibility in meeting redemptions, expenses, and the timing of new
investments, and serves as a short-term defense during periods of unusual market
volatility.
COMMON AND PREFERRED STOCKS. Stocks represent shares of ownership in a
company. Generally, preferred stock has a specified dividend and ranks after
bonds and before common stocks in its claim on income for dividend payments and
on assets should the company be liquidated. After other claims are satisfied,
common stockholders participate in company profits on a pro rata basis; profits
may be paid out in dividends or reinvested in the company to help it grow.
Increases and decreases in earnings are usually reflected in a company's stock
price, so common stocks generally have the greatest appreciation and
depreciation potential of all corporate securities. While most preferred stocks
pay a dividend, a Series may purchase preferred stock where the issuer has
omitted, or is in danger of omitting, payment of its dividend. Such investments
would be made primarily for their capital appreciation potential. Although
common and preferred stocks have a history of long-term growth in value, their
prices tend to fluctuate in the short term, particularly those of smaller
companies.
CONVERTIBLE SECURITIES AND WARRANTS. A Series may invest in debt or
preferred equity securities convertible into or exchangeable for equity
securities. Traditionally, convertible securities have paid dividends or
interest at rates higher than common stocks but lower than non-convertible
securities. They generally participate in the appreciation or depreciation of
the underlying stock into which they are convertible, but to a lesser degree. In
recent years, convertibles have been developed which combine higher or lower
current income with options and other features. Warrants are options to buy a
stated number of shares of common stock at a specified price any time during the
life of the warrants (generally, two or more years).
FIXED INCOME SECURITIES. A Series may invest in fixed income securities of
companies which meet the investment criteria for the Series. The price of fixed
income securities fluctuates with changes in interest rates, generally rising
when interest rates fall and falling when interest rates rise. Prices of
longer-term securities generally increase or decrease more sharply than those of
shorter-term securities in response to interest rate changes.
FOREIGN CURRENCY TRANSACTIONS. A Series will normally conduct its foreign
currency exchange transactions either on a spot (i.e., cash), basis at the spot
rate prevailing in the foreign currency exchange market, or through entering
into forward contracts to purchase or sell foreign currencies. A Series will
generally not enter into a forward contract with a term of greater than one
year.
There are certain markets where it is not possible to engage in effective
foreign currency hedging. This may be true, for example, for the currencies of
various countries where the foreign exchange markets are not sufficiently
developed to permit hedging activity to take place.
FOREIGN SECURITIES. A Series may invest in foreign securities. These
include non-dollar denominated securities traded principally outside the U.S.
and dollar denominated securities traded in the U.S. (such as ADRs). Such
investments increase a Series' diversification and may enhance return, but they
also involve some special risks such as exposure to potentially adverse local
political and economic developments; nationalization and exchange controls;
potentially lower liquidity and higher volatility; possible problems arising
from accounting, disclosure, settlement, and regulatory practices that differ
from U.S. standards; and the chance that fluctuations in foreign exchange rates
will decrease the investment's value (favorable changes can increase its value).
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FUTURES AND OPTIONS. Futures are often used to manage risk, because they
enable the investor to buy or sell an asset in the future at an agreed upon
price. Options give the investor the right, but not the obligation, to buy or
sell an asset at a predetermined price in the future. A Series may buy and sell
futures contracts (and options on such contracts) to manage its exposure to
changes in securities prices and foreign currencies and as an efficient means of
adjusting overall exposure to certain markets. Subject to certain limits
described in the Statement of Additional Information, a Series may purchase or
sell call and put options on securities, financial indices, and foreign
currencies, and may invest in futures contracts on foreign currencies and
financial indices, including interest rates or an index of U.S. Government
securities, foreign government securities or equity or fixed income securities.
Futures contracts and options may not always be successful hedges; their
prices can be highly volatile; using them could lower a Series' total return;
and the potential loss from the use of futures can exceed the Series' initial
investment in such contracts. These instruments may also be used for non-hedging
purposes such as increasing a Series' income.
The Series' use of commodity futures and commodity options trading should
not be viewed as providing a vehicle for shareholder participation in a
commodity pool. Rather, in accordance with regulations adopted by the CFTC, a
Series will employ such techniques only for (1) hedging purposes, or (2)
otherwise, to the extent that aggregate initial margin and required premiums do
not exceed 5 percent of the Series' net assets.
ILLIQUID SECURITIES. Each Series may invest up to 15% of its net assets
(10% in the case of the JNL/Alger Growth Series and the PPM America/JNL Money
Market Series) in securities that are considered illiquid. Illiquid investments
include repurchase agreements not terminable within seven days, securities for
which market quotations are not readily available and certain restricted
securities. Illiquid investments may be difficult to sell promptly at an
acceptable price. Difficulty in selling securities may result in a loss or may
be costly to a Series. Certain restricted securities may be determined to be
liquid in accordance with guidelines adopted by the Trust's Board of Trustees.
HIGH YIELD BONDS. A Series may invest its assets in fixed income securities
offering high current income that are in the lower rating categories of
recognized rating agencies or are non-rated. These lower-rated fixed income
securities are considered on balance, as predominantly speculative with respect
to capacity to pay interest and repay principal in accordance with the terms of
the obligation and generally will involve more credit risk than securities in
the higher rating categories.
DEBT HOLDINGS BY RATINGS. During the period ended December 31, 1996, the
percentage of the assets of the following Series invested in debt securities in
each of the rating categories of S&P and the debt securities not rated by an
established rating service, determined on a dollar weighted average, were:
<TABLE>
<CAPTION>
PERCENTAGE OF NET ASSETS
----------------------------------
PPM AMERICA/ SALOMON BROTHERS/
JNL HIGH YIELD JNL GLOBAL
S&P RATING BOND SERIES BOND SERIES
---------- -------------- -----------------
<S> <C> <C>
AAA.................. 0% 28.05%
AA................... 0% 1.78%
A.................... 0% 0.45%
BBB.................. 2.05% 4.09%
BB................... 28.43% 6.83%
B.................... 66.23% 29.51%
CCC.................. 0.81% 2.84%
CC................... 0% 0%
C.................... 0% 0%
D.................... 0% 0%
Not Rated............ 2.48% 26.45%
</TABLE>
HYBRID INSTRUMENTS. These instruments can combine the characteristics of
securities, futures and options. For example, the principal amount, redemption
or conversion terms of a security could be related to the market price of some
commodity, currency or securities index. Such securities may bear interest or
pay dividends at below market (or even relatively nominal) rates. Under certain
conditions, the redemption value of such an investment could be zero. Hybrids
can have volatile prices and limited liquidity and their use by a Series may not
be successful.
MORTGAGE- AND ASSET-BACKED SECURITIES. A Series may invest in mortgage- and
asset-backed securities. These securities are subject to prepayment risk, that
is, the possibility that prepayments on the underlying mortgages or other loans
will cause the principal and interest on the mortgage- and asset-backed
securities to be paid prior to their stated maturities. A sub-adviser will
consider estimated prepayment rates in calculating the average weighted
maturities of the Series. Unscheduled prepayments are more likely to accelerate
during periods of declining long-term interest rates. In the event of a
prepayment during a period of declining interest rates, a Series may be required
to invest the unanticipated proceeds at a lower interest rate. Prepayments
during such periods will also limit a Series' ability to participate in as large
a market gain as may be experienced with a comparable security not subject to
prepayment.
The Salomon Brothers/JNL Global Bond Series may purchase stripped
mortgage-backed securities, which may be considered derivative mortgage-backed
securities, which may be issued by agencies or instrumentalities of the U.S.
Government or by private entities. Stripped
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mortgage-backed securities have greater volatility than other types of
mortgage-backed securities. Stripped mortgage-backed securities are structured
with two or more classes that receive different proportions of the interest and
principal distributions on a pool of mortgage assets. In the most extreme case,
one class will receive all of the interest, while the other class will receive
all of the principal. The yield to maturity of such mortgage backed securities
that are purchased at a substantial discount or premium are extremely sensitive
to changes in interest rates as well as to the rate of principal payments
(including prepayments) on the related underlying mortgage assets.
MORTGAGE DOLLAR ROLLS. Certain Series may enter into mortgage "dollar
rolls" in which a Series sells mortgage-backed securities for delivery in the
current month and simultaneously contracts to repurchase substantially similar
(same type, coupon and maturity) securities on a specified future date. During
the roll period, a Series foregoes principal and interest paid on the
mortgage-backed securities. A Series is compensated by the interest earned on
the cash proceeds of the initial sale and from negotiated fees paid by brokers
offered as an inducement to the Series to "roll over" its purchase commitments.
A Series may only enter into covered rolls. A "covered roll" is a specific type
of dollar roll for which there is an offsetting cash position which matures on
or before the forward settlement date of the dollar roll transaction. At the
time a Series enters into a mortgage "dollar roll", it will establish a
segregated account with its custodian bank in which it will maintain cash, U.S.
Government securities or other liquid high grade debt obligations equal in value
to its obligations in respect of dollar rolls, and accordingly, such dollar
rolls will not be considered borrowings. Mortgage dollar rolls involve the risk
that the market value of the securities the Series is obligated to repurchase
under the agreement may decline below the repurchase price. In the event the
buyer of securities under a mortgage dollar roll files for bankruptcy or becomes
insolvent, the Series' use of proceeds of the dollar roll may be restricted
pending a determination by the other party, or its trustee or receiver, whether
to enforce the Series' obligation to repurchase the securities.
COLLATERALIZED MORTGAGE OBLIGATIONS (CMOS). A Series may invest in CMOs.
CMOs are bonds that are collateralized by whole loan mortgages or mortgage pass-
through securities. In recent years, new types of CMO structures have evolved.
These include floating rate CMOs, planned amortization classes, accrual bonds,
and CMO residuals. Under certain of these new structures, given classes of CMOs
have priority over others with respect to the receipt of prepayments on the
mortgages. Therefore, depending on the type of CMOs in which the Series invests,
the investment may be subject to a greater or lesser risk of prepayment than
other types of mortgage-related securities.
The primary risk of any mortgage security is the uncertainty of the timing
of cash flows. For CMOs, the primary risk results from the rate of prepayments
on the underlying mortgages serving as collateral. An increase or decrease in
prepayment rates (resulting primarily from a decrease or increase in mortgage
interest rates) will affect the yield, average life, and price of CMOs. The
prices of certain CMOs, depending on their structure and the rate of
prepayments, can be volatile. Some CMOs may also not be as liquid as other
securities.
REAL ESTATE INVESTMENT TRUSTS ("REITS"). The REITs in which a Series may
invest include equity REITs, which own real estate properties, and mortgage
REITs, which make construction, development and long-term mortgage loans. The
value of an equity REIT may be affected by changes in the value of the
underlying property, while a mortgage REIT may be affected by the quality of the
credit extended. The performance of both types of REITs depends upon conditions
in the real estate industry, management skills and the amount of cash flow. The
risks associated with REITs include defaults by borrowers, self-liquidation,
failure to qualify as a "pass-through" entity under the Federal tax law, failure
to qualify as an exempt entity under the 1940 Act, and the fact that REITs are
not diversified.
PORTFOLIO TURNOVER. To a limited extent, a Series may engage in short-term
transactions if such transactions further its investment objective. A Series may
sell one security and simultaneously purchase another of comparable quality or
simultaneously purchase and sell the same security to take advantage of
short-term differentials in bond yields or otherwise purchase individual
securities in anticipation of relatively short-term price gains. The rate of
portfolio turnover will not be a determining factor in the purchase and sale of
such securities. However, certain tax rules may restrict the Series' ability to
sell securities in some circumstances when the security has been held for less
than three months. Increased portfolio turnover necessarily results in
correspondingly higher costs including brokerage commissions, dealer mark-ups
and other transaction costs on the sale of securities and reinvestment in other
securities, and may result in the acceleration of taxable gains.
REPURCHASE AGREEMENTS AND REVERSE REPURCHASE AGREEMENTS. A Series may
invest in repurchase or reverse repurchase agreements. A repurchase agreement
involves the purchase of a security by a Series and a simultaneous agreement
(generally by a bank or dealer) to repurchase that security from the Series at a
specified price and date or upon demand. This technique offers a method of
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<PAGE> 32
earning income on idle cash. The repurchase agreement is effectively secured by
the value of the underlying security. A risk associated with repurchase
agreements is the failure of the seller to repurchase the securities as agreed,
which may cause a Series to suffer a loss if the market value of such securities
declines before they can be liquidated on the open market. In the event of
bankruptcy or insolvency of the seller, a Series may encounter delays and incur
costs in liquidating the underlying security.
When a Series invests in a reverse repurchase agreement, it sells a
portfolio security to another party, such as a bank or a broker-dealer, in
return for cash, and agrees to buy the security back at a future date and price.
Reverse repurchase agreements may be used to provide cash to satisfy unusually
heavy redemption requests or for other temporary or emergency purposes without
the necessity of selling portfolio securities or to earn additional income on
portfolio securities, such as Treasury bills and notes.
SHORT SALES. Each Series may sell securities "short against the box." While
a short sale is the sale of a security the Series does not own, it is "against
the box" if at all times when the short position is open the Series owns an
equal amount of the securities or securities convertible into, or exchangeable
without further consideration for, securities of the same issue as the
securities sold short.
U.S. GOVERNMENT SECURITIES AND CUSTODIAL RECEIPTS. Obligations issued or
guaranteed as to principal and interest by the U.S. Government, its agencies or
instrumentalities include Treasury bills, notes and bonds and Government
National Mortgage Association ("GNMA") certificates which are supported by the
full faith and credit of the United States; others, such as those of the Federal
Home Loan Banks, are supported by the right of the issuer to borrow from the
Treasury; others, such as those of the Federal National Mortgage Association
("FNMA"), are supported by the discretionary authority of the U.S. Government to
purchase the agency's obligations; and still others, such as those of the
Student Loan Marketing Association, are supported only by the credit of the
instrumentality. No assurance can be given that the U.S. Government will provide
financial support to U.S. Government agencies or instrumentalities in the
future, other than as set forth above, since it is not obligated to do so by
law.
WHEN-ISSUED SECURITIES. A Series may purchase securities on a when-issued,
delayed delivery or forward commitment basis. Actual payment for and delivery of
such securities does not take place until some time in the future -- i.e.,
beyond normal settlement. The Series does not earn interest on such securities
until settlement and bears the risk of market value fluctuations during the
period between the purchase and settlement dates. The series segregate and
maintain at all times cash, cash equivalents, or other high quality liquid debt
securities in an amount at least equal to the amount of outstanding commitments
for when-issued securities.
ZERO COUPON AND PAY-IN-KIND BONDS. A Series may invest up to 10% of its
assets in zero coupon bonds or strips. Zero coupon bonds do not make regular
interest payments; rather, they are sold at a discount from face value.
Principal and accreted discount (representing interest accrued but not paid) are
paid at maturity. Strips are debt securities that are stripped of their interest
after the securities are issued, but otherwise are comparable to zero coupon
bonds. The market value of strips and zero coupon bonds generally fluctuates in
response to changes in interest rates to a greater degree than interest-paying
securities of comparable term and quality. A Series may also purchase
pay-in-kind bonds. Pay-in-kind bonds pay all or a portion of their interest in
the form of debt or equity securities.
Zero coupon and pay-in-kind bonds tend to be subject to greater price
fluctuations in response to changes in interest rates than are ordinary
interest-paying debt securities with similar maturities. The value of zero
coupon securities appreciates more during periods of declining interest rates
and depreciates more during periods of rising interest rates than ordinary
interest-paying debt securities with similar maturities. Zero coupon securities
and pay-in-kind bonds may be issued by a wide variety of corporate and
governmental issuers.
Current federal income tax law requires the holder of a zero coupon
security, certain pay-in-kind bonds and certain other securities acquired at a
discount (such as Brady Bonds) to accrue income with respect to these securities
prior to the receipt of cash payments. Accordingly, to avoid liability for
federal income and excise taxes, a Series may be required to distribute income
accrued with respect to these securities and may have to dispose of portfolio
securities under disadvantageous circumstances in order to generate cash to
satisfy these distribution requirements.
INVESTMENT RISKS
FOREIGN SECURITIES
Investments in foreign securities, including those of foreign governments,
involve risks that are different in some respects from investments in securities
of U.S. issuers, such as the risk of fluctuations in the value of the currencies
in which they are denominated, a heightened risk of adverse political and
economic developments and, with respect to certain countries, the possibility of
expropriation, nationalization or confiscatory taxation or limitations on the
removal of funds or other assets of a Series. Securities of some foreign issuers
in many cases are less
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<PAGE> 33
liquid and more volatile than securities of comparable domestic issuers. There
also may be less publicly available information about foreign issuers than
domestic issuers, and foreign issuers generally are not subject to the uniform
accounting, auditing and financial reporting standards, practices and
requirements applicable to domestic issuers. Certain markets may require payment
for securities before delivery. A Series may have limited legal recourse against
the issuer in the event of a default on a debt instrument. Delays may be
encountered in settling securities transactions in certain foreign markets and a
Series will incur costs in converting foreign currencies into U.S. dollars. Bank
custody charges are generally higher for foreign securities. The JNL Global
Equities, Salomon Brothers/JNL Global Bond, and T. Rowe Price/JNL International
Equity Investment Series are particularly susceptible to such risks. ADRs do not
involve the same direct currency and liquidity risks as foreign securities.
The considerations noted above may be intensified in the case of
investments in developing countries or countries with limited or developing
capital markets. In particular, developing countries may have relatively
unstable governments, economies based on only a few industries, and securities
markets that trade a small number of securities. Securities of issuers located
in developing countries may have limited marketability and may be subject to
more abrupt or erratic price fluctuations.
At times, securities held by a Series may be listed on foreign exchanges or
traded in foreign markets which are open on days (such as Saturday) when a
Series does not compute its price or accept orders for the purchase, redemption
or exchange of its shares. As a result, the net asset value of a Series may be
significantly affected by trading on days when shareholders cannot make
transactions.
The share price of a Series that invests in foreign securities will reflect
the movements of both the prices of the portfolio securities and the currencies
in which such securities are denominated. A Series' foreign investments may
cause changes in a Series' share price that have a low correlation with movement
in the U.S. markets. Because most of the foreign securities in which a Series
invests will be denominated in foreign currencies, or otherwise will have values
that depend on the performance of foreign currencies relative to the U.S.
dollar, the relative strength of the U.S. dollar may be an important factor in
the performance of a Series, depending on the extent of the Series' foreign
investments.
A Series may employ certain strategies in order to manage exchange rate
risks. For example, a Series may hedge some or all of its investments
denominated in or exposed to a foreign currency against a decline in the value
of that currency. A Series may enter into contracts to sell that foreign
currency for U. S. dollars (not exceeding the value of a Series' assets
denominated in or exposed to that currency) or by participating in options or
futures contracts with respect to such currency ("position hedge"). A Series
could also hedge that position by selling a second currency, which is expected
to perform similarly to the currency in which portfolio investments are
denominated, for U.S. dollars ("proxy hedge"). A Series may also enter into a
forward contract to sell the currency in which the security is denominated for a
second currency that is expected to perform better relative to the U.S. dollar
if the sub-adviser believes there is a reasonable degree of correlation between
movements in the two currencies ("cross hedge"). In addition, when a Series
anticipates purchasing securities denominated in or exposed to a particular
currency, the Series may enter into a forward contract to purchase or sell such
currency in exchange for the dollar or another currency ("anticipatory hedge").
These strategies minimize the effect of currency appreciation as well as
depreciation, but do not protect against a decline in the underlying value of
the hedged security. In addition, such strategies may reduce or eliminate the
opportunity to profit from increases in the value of the original currency and
may adversely impact a Series' performance if the sub-adviser's projection of
future exchange rates is inaccurate.
FUTURES, OPTIONS AND OTHER DERIVATIVE INSTRUMENTS
The use of futures, options, forward contracts, and swaps ("derivative
instruments") exposes a Series to additional investment risks and transaction
costs. If a sub-adviser seeks to protect a Series against potential adverse
movements in the securities, foreign currency or interest rate markets using
these instruments, and such markets do not move in a direction adverse to the
Series, that Series could be left in a less favorable position than if such
strategies had not been used. Risks inherent in the use of futures, options,
forward contracts and swaps include (1) the risk that interest rates, securities
prices and currency markets will not move in the directions anticipated; (2)
imperfect correlation between the price of derivative instruments and movements
in the prices of the securities, interest rates or currencies being hedged; (3)
the fact that skills needed to use these strategies are different from those
needed to select portfolio securities; (4) the possible absence of a liquid
secondary market for any particular instrument at any time; and (5) the possible
need to defer closing out certain hedged positions to avoid adverse tax
consequences.
HIGH YIELD/HIGH RISK BONDS
Lower rated bonds involve a higher degree of credit risk, which is the risk
that the issuer will not make interest
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<PAGE> 34
or principal payments when due. In the event of an unanticipated default, a
Series would experience a reduction in its income, a decline in the market value
of the securities so affected and a decline in the value of its shares. More
careful analysis of the financial condition of issuers of lower rated securities
is therefore necessary. During an economic downturn or substantial period of
rising interest rates, highly leveraged issuers may experience financial stress
which could adversely affect their ability to service principal and interest
payment obligations, to meet projected business goals and to obtain additional
financing.
The market prices of lower rated securities are generally less sensitive to
interest rate changes than higher rated investments, but more sensitive to
adverse economic or political changes, or individual developments specific to
the issuer. Periods of economic or political uncertainty and change can be
expected to result in volatility of prices of these securities. Since the last
major economic recession, there has been a substantial increase in the use of
high-yield debt securities to fund highly leveraged corporate acquisitions and
restructurings, so past experience with high-yield securities in a prolonged
economic downturn may not provide an accurate indication of future performance
during such periods. Lower rated securities also may have less liquid markets
than higher rated securities, and their liquidity as well as their value may be
more severely affected by adverse economic conditions. Many high-yield bonds do
not trade frequently. When they do trade, their price may be substantially
higher or lower than had been expected. A lack of liquidity also means that
judgment may play a bigger role in valuing the securities. Adverse publicity and
investor perceptions as well as new or proposed laws may also have a greater
negative impact on the market for lower rated bonds.
A Series may also invest in unrated debt securities of foreign and domestic
issuers. Unrated debt, while not necessarily of lower quality than rated
securities, may not have as broad a market. Sovereign debt of foreign
governments is generally rated by country, because these ratings do not take
into account individual factors relevant to each issue and may not be updated
regularly. Because of the size and perceived demand of the issue, among other
factors, certain municipalities may not incur the costs of obtaining a rating.
The sub-adviser will analyze the credit-worthiness of the issuer, as well as any
financial institution or other party responsible for payments on the security,
in determining whether to purchase unrated municipal bonds. (See Appendix A for
a description of bond rating categories).
HIGH YIELD FOREIGN SOVEREIGN DEBT SECURITIES
Investing in fixed and floating rate high yield foreign sovereign debt
securities will expose the Series investing in such securities to the direct or
indirect consequences of political, social or economic changes in the countries
that issue the securities. (See "Foreign Securities"). The ability and
willingness of sovereign obligors in developing and emerging market countries or
the governmental authorities that control repayment of their external debt to
pay principal and interest on such debt when due may depend on general economic
and political conditions within the relevant country. Countries such as those in
which a Series may invest have historically experienced, and may continue to
experience, high rates of inflation, high interest rates, exchange rate trade
difficulties and extreme poverty and unemployment. Many of these countries are
also characterized by political uncertainty or instability. Additional factors
which may influence the ability or willingness to service debt include, but are
not limited to, a country's cash flow situation, the availability of sufficient
foreign exchange on the date a payment is due, the relative size of its debt
service burden to the economy as a whole, and its government's policy towards
the International Monetary Fund, the World Bank and other international
agencies.
HYBRID INSTRUMENTS
The risks of investing in hybrid instruments reflect a combination of the
risks of investing in securities, options, futures and currencies, including
volatility and lack of liquidity. Reference is made to the discussion of
futures, options, and forward contracts herein for a discussion of these risks.
Further, the prices of the hybrid instrument and the related commodity or
currency may not move in the same direction or at the same time. Hybrid
instruments may bear interest or pay preferred dividends at below market (or
even relatively nominal) rates. Alternatively, hybrid instruments may bear
interest at above market rates but bear an increased risk of principal loss. In
addition, because the purchase and sale of hybrid instruments could take place
in an over-the-counter or in a private transaction between the Series and the
seller of the hybrid instrument, the creditworthiness of the counter-party to
the transaction would be a risk factor which the Series would have to consider.
Hybrid instruments also may not be subject to regulation of the CFTC, which
generally regulates the trading of commodity futures by U.S. persons, the SEC,
which regulates the offer and sale of securities by and to U.S. persons, or any
other governmental regulatory authority.
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<PAGE> 35
MUNICIPAL OBLIGATIONS
In addition to the usual risks associated with income investing, the value
of municipal obligations can be affected by changes in the actual or perceived
credit quality of municipal obligations held by a Series. The credit quality of
a municipal obligation can be affected by, among other factors, the financial
condition of the issuer or guarantor, the issuer's future borrowing plans and
sources of revenue, the economic feasibility of the revenue bond project or
general borrowing purpose, political or economic developments in the region
where the security is issued, and the liquidity of the security. Because
municipal obligations are generally traded over-the-counter, the liquidity of a
particular issue often depends on the willingness of dealers to make a market in
the security. The liquidity of some municipal issues may be enhanced by demand
features, which enable a Series to demand payment on short notice from the
issuer or a financial intermediary.
WHEN-ISSUED SECURITIES
The price of such securities, which may be expressed in yield terms, is
fixed at the time the commitment to purchase is made, but delivery and payment
take place at a later date. Normally, the settlement date occurs within 90 days
of the purchase for when-issued securities, but may be substantially longer for
forward commitments. During the period between purchase and settlement, no
payment is made by the Series to the issuer and no interest accrues to the
Series. The purchase of these securities will result in a loss if their value
declines prior to the settlement date. This could occur, for example, if
interest rates increase prior to settlement. The longer the period between
purchase and settlement, the greater the risks. At the time the Series makes the
commitment to purchase these securities, it will record the transaction and
reflect the value of the security in determining its net asset value. The Series
will segregate for these securities by maintaining cash and/or liquid debt
securities with its custodian bank equal in value to commitments for them during
the time between the purchase and the settlement. Therefore, the longer this
period, the longer the period during which alternative investment options are
not available to the Series (to the extent of the securities used for cover).
Such securities either will mature or, if necessary, be sold on or before the
settlement date.
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<PAGE> 36
- --------------------------------------------------------------------------------
MANAGEMENT OF THE TRUST
- --------------------------------------------------------------------------------
INVESTMENT ADVISER
Under Massachusetts law and the Trust's Declaration of Trust and By-Laws,
the management of the business and affairs of the Trust is the responsibility of
the Trustees.
JNFSI, 5901 Executive Drive, Lansing, Michigan 48911, is the investment
adviser of each Series and provides each Series with professional investment
supervision and management. JNFSI is a wholly owned subsidiary of Jackson
National Life Insurance Company, which is in turn wholly owned by Prudential
Corporation plc, the largest life insurance company in the United Kingdom. JNFSI
has been providing investment advisory services to management investment
companies since 1992 and as of December 31, 1996, had approximately $1 billion
under management.
JNFSI provides preparation of financial statements, tax services, and
regulatory reports to the Trust. JNFSI also selects, contracts with and
compensates sub-advisers to manage the investment and reinvestment of the
assets of the Series of the Trust. JNFSI monitors the compliance of such
sub-advisers with the investment objectives and related policies of each Series
and reviews the performance of such sub-advisers and reports periodically on
such performance to the Trustees of the Trust.
As compensation for its services, JNFSI receives a fee from the Trust
computed separately for each Series. The fee for each Series is stated as an
annual percentage of the current value of the net assets of the Series. The
fees, which are accrued daily and payable monthly, are calculated on the basis
of the average of all valuations of net assets of each Series made at the close
of business on each business day of the Trust during the period for which such
fees are paid through the date of calculation. Once the average net assets of a
Series exceed specified amounts, the fee is reduced with respect to such excess.
The following is a schedule of the fees each Series currently is obligated to
pay JNFSI.
<TABLE>
<CAPTION>
$0 TO $50 TO $150 TO $300 TO OVER
(*M -- MILLION) $50 M $150 M $300 M $500 M $500 M
--------------- ----- ------ ------- ------- ------
<S> <C> <C> <C> <C> <C>
JNL Aggressive Growth Series................................ .95% .95% .90% .85% .85%
JNL Capital Growth Series................................... .95% .95% .90% .85% .85%
JNL Global Equities Series.................................. 1.00% 1.00% .95% .90% .90%
JNL/Alger Growth Series..................................... .975% .975% .975% .95% .90%
JNL/Eagle Core Equity Series................................ .90% .85% .85% .75% .75%
JNL/Eagle SmallCap Equity Series............................ .95% .95% .90% .90% .85%
JNL/Putnam Growth Series*................................... .90% .90% .85% .80% .80%
JNL/Putnam Value Equity Series**............................ .90% .90% .85% .80% .80%
PPM America/JNL Balanced Series***.......................... .75% .70% .675% .65% .625%
PPM America/JNL High Yield Bond Series...................... .75% .70% .675% .65% .625%
PPM America/JNL Money Market Series......................... .60% .60% .575% .55% .525%
Salomon Brothers/JNL Global Bond Series..................... .85% .85% .80% .80% .75%
Salomon Brothers/JNL U.S. Government & Quality Bond
Series.................................................... .70% .70% .65% .60% .55%
T. Rowe Price/JNL Established Growth Series................. .85% .85% .80% .80% .80%
T. Rowe Price/JNL International Equity Investment Series.... 1.10% 1.05% 1.00% .95% .90%
T. Rowe Price/JNL Mid-Cap Growth Series..................... .95% .95% .90% .90% .90%
</TABLE>
- -------------------------
* Prior to May 1, 1997, the fee for the JNL/Putnam Growth Series was .90%,
.85%, .80%, .75%, and .70%, respectively.
** Prior to May 1, 1997, the fee for the JNL/Putnam Value Equity Series was
.75%, .70%, .675%, .65% and .625%, respectively.
*** Prior to May 1, 1997, the fee for the PPM America/JNL Balanced Series was
.90%, .80%, .75%, .70% and .65%, respectively.
INVESTMENT SUB-ADVISERS
The organizations described below act as sub-advisers to the Trust and
certain of its Series pursuant to Sub-Advisory Agreements with JNFSI. Under the
Sub-Advisory Agreements, the sub-advisers manage the investment and reinvestment
of the assets of the respective Series for
32
<PAGE> 37
which they are responsible. Each of the sub-advisers discharges its
responsibilities subject to the policies of the Trustees and the oversight and
supervision of JNFSI, which pays the sub-advisers' fees.
Fred Alger Management, Inc., ("Alger Management") which is located at 75
Maiden Lane, New York,
New York 10038, serves as sub-adviser to the JNL/Alger Growth Series. Alger
Management is generally engaged in the business of rendering investment advisory
services to institutions and, to a lesser extent, individuals. Alger Management
has been engaged in the business of rendering investment advisory services since
1964 and, as of December 31, 1996, had approximately $7.1 billion under
management, $5.2 billion in mutual fund accounts and $1.9 billion in other
advisory accounts. Alger Management is a wholly owned subsidiary of Fred Alger &
Company, Inc. which in turn is a wholly owned subsidiary of Alger Associates,
Inc., a financial services holding company. Fred M. Alger III and his brother,
David D. Alger are majority shareholders of Alger Associates, Inc. and may be
deemed to control that company and its subsidiaries.
Eagle Asset Management, Inc. ("Eagle"), 880 Carillion Parkway, St.
Petersburg, Florida 33716, serves as sub-adviser to the JNL/Eagle Core Equity
Series and the JNL/Eagle SmallCap Equity Series. Eagle is a wholly-owned
subsidiary of Raymond James Financial, Inc., which, together with its
subsidiaries, provides a wide range of financial services to retail and
institutional clients. Eagle manages client accounts with net assets totaling
approximately $2.7 billion as of December 31, 1996.
Janus Capital Corporation ("Janus Capital"), a Colorado corporation with
principal offices at 100 Fillmore Street, Denver, Colorado 80206, serves as
sub-adviser to the JNL Capital Growth Series, the JNL Aggressive Growth Series
and the JNL Global Equities Series. Janus Capital is an investment adviser with
approximately $50 billion in assets under management. Kansas City Southern
Industries, Inc. ("KCSI") owns approximately 83% of the outstanding voting stock
of Janus Capital, most of which it acquired in 1984. KCSI is a publicly-traded
holding company whose primary subsidiaries are engaged in transportation and
financial services. Thomas H. Bailey, President and Chairman of the Board of
Janus Capital, owns approximately 12% of its voting stock and, by agreement with
KCSI, selects a majority of Janus Capital's Board.
PPM America, Inc. ("PPM"), which is located at 225 West Wacker Drive,
Chicago, Illinois 60606, serves as sub-adviser to the PPM America/JNL Balanced
Series*, the PPM America/JNL High Yield Bond Series and the PPM America/JNL
Money Market Series. PPM, an affiliate of JNFSI, is a wholly owned subsidiary of
Prudential Portfolio Managers Ltd., ("PPM Ltd.") an investment management
company engaged in global money management, which is in turn wholly owned by
Prudential Corporation plc. PPM Ltd. and its subsidiaries manage over $120
billion in various currencies and markets. PPM currently manages over $26
billion of Jackson National Life Insurance Company assets. Additionally, PPM
manages assets of over $5.7 billion for other affiliated companies and over $878
million for non-affiliated entities.
Putnam Investment Management, Inc. ("Putnam"), located at One Post Office
Square, Boston, Massachusetts 02109, serves as sub-adviser to the JNL/Putnam
Growth Series* and the JNL/Putnam Value Equity Series*. Putnam has been managing
mutual funds since 1937. Putnam and its affiliates had approximately $173
billion in assets under management as of December 31, 1996. Putnam is a
subsidiary of Putnam Investment, Inc., which is wholly owned by Marsh & McLennan
Companies, Inc., a publicly-owned holding company whose principal businesses are
international insurance and reinsurance brokerage, employee benefit consulting
and investment management.
Rowe Price-Fleming International, Inc. ("Price-Fleming"), located at 100
East Pratt Street, Baltimore, Maryland 21202, serves as sub-adviser to the T.
Rowe Price/JNL International Equity Investment Series. Price-Fleming was founded
in 1979 as a joint venture between T. Rowe Price Associates, Inc. and Robert
Fleming Holdings Limited. Price-Fleming is one of America's largest
international mutual fund asset managers with approximately $18 billion under
management in its offices in Baltimore, London, Tokyo, Hong Kong and Singapore.
Salomon Brothers Asset Management Inc ("SBAM") serves as sub-adviser to the
Salomon Brothers/JNL Global Bond Series and the Salomon Brothers/JNL U.S.
Government & Quality Bond Series. SBAM is an indirect, wholly owned subsidiary
of Salomon Brothers Holding Company Inc. which is, in turn, wholly owned by
Salomon Inc. ("SI"). SBAM was incorporated in 1987, and, together with
affiliates in London, Frankfurt, Tokyo and Hong Kong, SBAM provides a broad
range of fixed income and equity investment advisory services to various
individual and institutional clients located throughout the world and serves as
sub-advisor to various investment companies. In providing such investment
advisory services, SBAM has access to SI's more than 400 economists, mortgage
bond, sovereign and equity analysts. As of
- ---------------
*Prior to May 1, 1997, Phoenix Investment Counsel, Inc. served as
sub-adviser to the PPM America/JNL Balanced Series and the JNL/Putnam Growth
Series, and PPM served as sub-adviser to the JNL/Putnam Value Equity Series.
33
<PAGE> 38
December 31, 1996, SBAM and its worldwide investment affiliates managed
approximately $17.8 billion. SBAM's business offices are located at 7 World
Trade Center, New York, New York 10048.
In connection with SBAM's service as sub-adviser to the Salomon
Brothers/JNL Global Bond Series, SBAM Limited, whose business address is
Victoria Plaza, 111 Buckingham Palace Road, London SW1W OSB, England, provides
certain sub-advisory services to SBAM relating to currency transactions and
investments in non-dollar denominated debt securities for the benefit of the
Series. SBAM Limited is compensated by SBAM at no additional expense to the
Trust. Like SBAM, SBAM Limited is an indirect, wholly-owned subsidiary of
Salomon Brothers Holding Company Inc. SBAM Limited is a member of the Investment
Management Regulatory Organization Limited in the United Kingdom and is
registered as an investment adviser in the United States pursuant to the
Investment Advisers Act of 1940, as amended.
T. Rowe Price Associates, Inc. ("T. Rowe"), located at 100 East Pratt
Street, Baltimore, Maryland 21202, serves as sub-adviser to the T. Rowe
Price/JNL Established Growth Series and the T. Rowe Price/JNL Mid-Cap Growth
Series. T. Rowe was founded in 1937 by the late Thomas Rowe Price, Jr. T. Rowe
and its affiliates manage over $95 billion for approximately 4.5 million
individual and institutional investor accounts, including limited and real
estate partnerships and other mutual funds.
PORTFOLIO MANAGEMENT
The following individuals are primarily responsible for the day-to-day
management of the particular Series as indicated below.
JNL GLOBAL EQUITIES SERIES
Helen Young Hayes is responsible for the day-to-day management of the JNL
Global Equities Series. Ms. Hayes joined Janus Capital in 1987. She holds a
Bachelor of Arts in Economics from Yale University and is a Chartered Financial
Analyst.
JNL CAPITAL GROWTH SERIES
James P. Goff is responsible for the day-to-day management of the JNL
Capital Growth Series. Mr. Goff joined Janus Capital in 1988. He holds a
Bachelor of Arts in Economics from Yale University and is a Chartered Financial
Analyst.
JNL AGGRESSIVE GROWTH SERIES
Warren B. Lammert is responsible for the day-to-day management of the JNL
Aggressive Growth Series. Mr. Lammert joined Janus Capital in 1987. He holds a
Bachelor of Arts in Economics from Yale University and a Master of Science in
Economic History from the London School of Economics. He is a Chartered
Financial Analyst.
JNL/ALGER GROWTH SERIES
David D. Alger, President and Chief Investment Officer of Alger
Management, is primarily responsible for the day-to-day management of the
JNL/Alger Growth Series. He has been employed by Alger Management as Executive
Vice President and Director of Research since 1971 and he serves as portfolio
manager for other mutual funds and investment accounts managed by Alger
Management. Also participating in the management of the Series are Ronald
Tartaro and Seilai Khoo. Mr. Tartaro has been employed by Alger Management
since 1990 and he serves as a senior research analyst. Prior to 1990, he was a
member of the technical staff at AT&T Bell Laboratories. Ms. Khoo has been
employed by Alger Management since 1989 and she serves as a senior research
analyst.
JNL/EAGLE CORE EQUITY SERIES
In its capacity as sub-adviser, Eagle supervises and manages the investment
portfolio of the JNL/Eagle Core Equity Series. Eagle utilizes a team of senior
portfolio managers acting together to manage the assets of the Series. The team
meets regularly to review portfolio holdings and to discuss purchase and sale
activity. The team adjusts holdings in the portfolio as it deems appropriate in
the pursuit of the Series' investment objective.
JNL/EAGLE SMALLCAP EQUITY SERIES
Bert L. Boksen, Senior Vice President and Portfolio Manager of Eagle, is
responsible for the day-to-day management of the JNL/Eagle SmallCap Equity
Series. Mr. Boksen joined Eagle in April 1995 and has portfolio management
responsibilities for its small cap equity accounts. Prior to joining Eagle, Mr.
Boksen was employed for 16 years by Raymond James & Associates, Inc. in its
institutional research and sales department. While employed by Raymond James &
Associates, Inc., Mr. Boksen served as co-head of Research, Chief Investment
Officer and Chairman of the Raymond James & Associates, Inc. Focus List
Committee.
JNL/PUTNAM GROWTH SERIES
Carol C. McMullen has responsibility for the day-to-day management of the
JNL/Putnam Growth Series. Ms. McMullen has been a Managing Director of Putnam
since 1995. Prior to joining Putnam, Ms. McMullen was
34
<PAGE> 39
Senior Vice President of Baring Asset Management. Ms. McMullen has had
responsibility for the day-to-day management of the JNL/Putnam Growth Series
since May 1, 1997.
JNL/PUTNAM VALUE EQUITY SERIES
Anthony I. Kreisel a Managing Director of Putnam, has responsibility for
the day-to-day management of the JNL/Putnam Value Equity Series. Mr. Kreisel has
been an investment professional at Putnam since 1986. Mr. Kreisel has had
responsibility for the day-to-day management of the JNL/Putnam Value Equity
Series since May 1, 1997.
PPM AMERICA/JNL BALANCED SERIES
PPM AMERICA/JNL HIGH YIELD BOND SERIES
PPM AMERICA/JNL MONEY MARKET SERIES
In its capacity as sub-adviser, PPM supervises and manages the investment
portfolios of the PPM America/ JNL Balanced Series, the PPM America/JNL High
Yield Bond Series and the PPM America/JNL Money Market Series and directs the
purchase and sale of each Series' investment securities. PPM utilizes teams of
investment professionals acting together to manage the assets of the Series. The
teams meet regularly to review portfolio holdings and to discuss purchase and
sale activity. The teams adjust holdings in the portfolios as they deem
appropriate in the pursuit of the Series' investment objectives. PPM has
supervised and managed the investment portfolio of the PPM America/JNL Balanced
Series since May 1, 1997, and has supervised and managed the investment
portfolios of the PPM America/JNL High Yield Bond Series and the PPM America/JNL
Money Market Series since the commencement of operations of each Series.
SALOMON BROTHERS/JNL GLOBAL BOND SERIES
SALOMON BROTHERS/JNL U.S. GOVERNMENT & QUALITY BOND SERIES
Steven Guterman is primarily responsible for the day-to-day management of
the Salomon Brothers/JNL U.S. Government & Quality Bond Series and the mortgage-
backed securities and U.S. Government securities portions of the Salomon
Brothers/JNL Global Bond Series. Mr. Guterman co-manages the Salomon
Brothers/JNL U.S. Government & Quality Bond Series with Roger Lavan.
Mr. Guterman, who joined SBAM in 1990, is a Managing Director of Salomon
Brothers Inc and a Managing Director and Senior Portfolio Manager of SBAM,
responsible for SBAM's investment company and institutional portfolios which
invest primarily in mortgage-backed securities and U.S. Government issues. Mr.
Guterman also serves as portfolio manager for two offshore mortgage funds and a
number of institutional clients. Mr. Guterman joined Salomon Brothers Inc in
1983, working initially in the mortgage research group where he became a
Research Director and later traded derivative mortgage-backed securities.
Mr. Lavan joined SBAM in 1990 and is a Portfolio Manager and Quantitative
Fixed Income Analyst, responsible for working for senior portfolio managers to
monitor and analyze market relationships and identify and implement relative
value transactions in SBAM's investment company and institutional portfolios
which invest in mortgage-backed securities and U.S. Government securities. Prior
to joining SBAM, Mr. Lavan spent four years analyzing portfolios for Salomon
Brothers Inc's Fixed Income Sales Group and Product Support Divisions.
Peter J. Wilby is primarily responsible for the day-to-day management of
the high yield and emerging market debt securities portions of the Salomon
Brothers/JNL Global Bond Series. Beth Semmel assists Mr. Wilby in the day-to-day
management of the Salomon Brothers/JNL Global Bond Series. Mr. Wilby, who joined
SBAM in 1989, is a Managing Director of Salomon Brothers Inc and SBAM and Senior
Portfolio Manager of SBAM, responsible for investment company and institutional
portfolios which invest in high yield non-U.S. and U.S. corporate debt
securities and high yield foreign sovereign debt securities. From 1984 to 1989,
Mr. Wilby was employed by Prudential Capital Management Group ("Prudential")
where he served as Director of Prudential's credit research unit and as a
corporate and sovereign credit analyst with Prudential. Mr. Wilby also managed
high yield bonds and leveraged equities in the mutual funds and institutional
portfolios at Prudential. Ms. Semmel is a Director and Portfolio Manager of SBAM
and a Director of Salomon Brothers Inc. Ms. Semmel joined SBAM in May of 1993,
where she manages high yield portfolios. Prior to joining SBAM, Ms. Semmel spent
four years as a high yield bond analyst at Morgan Stanley Asset Management.
David J. Scott is primarily responsible for currency transactions and
investments in non-dollar denominated debt securities for the Salomon
Brothers/JNL Global Bond Series. Prior to joining SBAM Limited in April 1994,
Mr. Scott worked for four years at JP Morgan Investment Management ("JP Morgan")
where he was responsible for global and non-dollar portfolios for clients
including departments of various governments, pension funds and insurance
companies. Before joining JP Morgan, Mr. Scott worked for three years at Mercury
Asset
35
<PAGE> 40
Management where he was responsible for captive insurance portfolios and
products.
T. ROWE PRICE/JNL ESTABLISHED GROWTH SERIES
Robert W. Smith is responsible for the day-to-day management of the T. Rowe
Price/JNL Established Growth Series. Mr. Smith is a Vice President and Equity
Portfolio Manager for T. Rowe and Price-Fleming. He is also responsible for the
North American component of other investment company and institutional client
portfolios. Prior to joining T. Rowe in 1992, Mr. Smith was employed as an
Investment Analyst for Massachusetts Financial Services. He earned a BS (finance
and economics) from the University of Delaware and an MBA (finance) from the
Darden Graduate School of Business Administration, University of Virginia. Mr.
Smith has had responsibility for the day-to-day management of the T. Rowe
Price/JNL Established Growth Series since February 21, 1997.
T. ROWE PRICE/JNL INTERNATIONAL EQUITY INVESTMENT SERIES
The T. Rowe Price/JNL International Equity Investment Series has an
investment advisory group that has day-to-day responsibility for managing the
Series and developing and executing the Series' investment program. The Series'
advisory group is composed of the following members: Martin G. Wade, Christopher
D. Alderson, Peter B. Askew, Mark J.T. Edward, John R. Ford, James B.M. Seddon,
Benedict R.F. Thomas, and David J.J. Warren.
Martin Wade joined Price-Fleming in 1979 and has 26 years of experience
with the Fleming Group in research, client service, and investment management.
(Fleming Group includes Robert Fleming and/or Jardine Fleming Group Limited).
Christopher Alderson joined Price-Fleming in 1988 and has nine years of
experience with the Fleming Group in research and portfolio management. Peter
Askew joined Price-Fleming in 1988 and has 20 years of experience managing
multi-currency fixed income portfolios. Mark Edwards joined Price-Fleming in
1986 and has 14 years of experience in financial analysis. John Ford joined
Price-Fleming in 1982 and has 15 years of experience with the Fleming Group in
research and portfolio management. James Seddon joined Price-Fleming in 1987 and
has eight years of experience in investment management. Benedict Thomas joined
Price-Fleming in 1988 and has six years of portfolio management experience.
David Warren joined Price-Fleming in 1984 and has 15 years of experience in
equity research, fixed income research and portfolio management.
T. ROWE PRICE/JNL MID-CAP GROWTH SERIES
The T. Rowe Price/JNL Mid-Cap Growth Series has an Investment Advisory
Committee composed of the following members: Brian W. Berghuis, Chairman, James
A.C. Kennedy, and John F. Wakeman. The Committee Chairman has day to day
responsibility for managing the Series and works with the Committee in
developing and executing the Series' investment program. Mr. Berghuis has been
managing investments since joining T. Rowe in 1985.
SUB-ADVISORY ARRANGEMENTS
Under the terms of each of the Sub-Advisory Agreements, the sub-adviser
manages the investment and reinvestment of the assets of the assigned Series,
subject to the supervision of the Trustees of the Trust. The sub-adviser
formulates a continuous investment program for each such Series consistent with
its investment objectives and policies outlined in this Prospectus. Each
sub-adviser implements such programs by purchases and sales of securities and
regularly reports to JNFSI and the Trustees of the Trust with respect to the
implementation of such programs.
As compensation for their services, the sub-advisers receive fees from
JNFSI computed separately for each Series. The fee for each Series is stated as
an annual percentage of the current value of the net assets of such Series. The
fees are calculated on the basis of the average of all valuations of net assets
of each Series made at the close of business on each business day of the Trust
during the period for which such fees are paid through the date of calculation.
Once the average net assets of a Series exceed specified amounts, the fee is
reduced with respect to such excess. The following is a schedule of the
management fees JNFSI currently is obligated to pay the sub-advisers
36
<PAGE> 41
out of the advisory fee it receives from each Series as specified above:
<TABLE>
<CAPTION>
$0 TO $50 TO $100 TO $150 TO $300 TO OVER
(*M - MILLION) $50 M $100 M $150 M $300 M $500 M $500 M
-------------- ----- ------ ------- ------- ------- ------
<S> <C> <C> <C> <C> <C> <C>
JNL Aggressive Growth Series*.......................... .55% .55% .50% .50% .50% .45%
JNL Capital Growth Series*............................. .55% .55% .50% .50% .50% .45%
JNL Global Equities Series*............................ .55% .55% .50% .50% .50% .45%
JNL/Alger Growth Series................................ .55% .55% .55% .55% .50% .45%
JNL/Eagle Core Equity Series........................... .45% .40% .40% .40% .30% .30%
JNL/Eagle SmallCap Equity Series....................... .50% .50% .50% .45% .45% .40%
JNL/Putnam Growth Series**............................. .50% .50% .50% .45% .35% .35%
JNL/Putnam Value Equity Series***...................... .50% .50% .50% .45% .35% .35%
PPM America/JNL Balanced Series**...................... .25% .20% .20% .175% .15% .125%
PPM America/JNL High Yield Bond Series................. .25% .20% .20% .175% .15% .125%
PPM America/JNL Money Market Series.................... .20% .15% .15% .125% .10% .075%
Salomon Brothers/JNL Global Bond Series................ .375% .35% .35% .30% .30% .25%
Salomon Brothers/JNL U.S. Government & Quality Bond
Series............................................... .225% .225% .225% .175% .15% .10%
</TABLE>
<TABLE>
<CAPTION>
$0 TO $20 TO $50 TO
$20 M $50 M $200 M $200 M+
----- ------ ------ -------
<S> <C> <C> <C> <C>
T. Rowe Price/JNL Established Growth Series................. .45% .40% .40%**** .40%
T. Rowe Price/JNL International Equity Investment Series.... .75% .60% .50% .50%****
T. Rowe Price/JNL Mid-Cap Growth Series..................... .60% .50% .50%**** .50%
</TABLE>
* Prior to September 16, 1996, the sub-advisory fees payable to Janus for
these Series were: $0 to $50 million -- .60%; $50 to $150 million -- .55%;
$150 to $300 million -- .45%; $300 to $500 million -- .40%; over $500
million -- .40%.
** Prior to May 1, 1997, the sub-advisory fees for these Series were payable
to Phoenix Investment Counsel, Inc. and were: $0 to $50 million -- .50%;
$50 to $150 million -- .40%; $150 to $300 million -- .30%; $300 to $500
million -- .25%; over $500 million -- .20%.
*** Prior to May 1, 1997, the sub-advisory fee for this Series was payable to
PPM and was: $0 to $50 million -- .25%; $50 to $150 million -- .20%; $150
to $300 million -- .175%; $300 to $500 million -- .15%; over $500 million
-- .125%.
**** When average assets exceed this amount, the sub-advisory fee asterisked is
applicable to all amounts in this Series.
With respect to the Salomon Brothers/JNL Global Bond Series and in
connection with the advisory consulting agreement between Salomon Brothers and
SBAM Limited, Salomon Brothers will pay SBAM Limited, as full compensation for
all services provided under the advisory consulting agreement, a portion of its
investment management fee. The amount payable to SBAM Limited will be equal to
the fee payable under Salomon Brothers' sub-advisory agreement multiplied by the
portion of the assets of the Series that SBAM Limited has been delegated to
manage divided by the current value of the net assets of the Series.
OTHER TRUST EXPENSES
In addition to the investment advisory fee, the Trust incurs expenses,
including legal, auditing and accounting expenses, Trustees' fees and expenses,
insurance premiums, brokers' commissions, taxes and governmental fees, expenses
of issue or redemption of shares, expenses of registering or qualifying shares
for sale, reports and notices to shareholders, and fees and disbursements of
custodians, transfer agents, registrars, shareholder servicing agents and
dividend disbursing agents, and certain expenses with respect to membership fees
of industry associations.
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<PAGE> 42
- --------------------------------------------------------------------------------
INVESTMENT IN TRUST SHARES
- --------------------------------------------------------------------------------
An insurance company purchases the shares of the Series at their net asset
value using premiums received on Policies issued by Accounts. These Accounts are
funded by shares of the Trust. There is no sales charge. All shares are sold at
net asset value.
The net asset value per share of each Series is determined at the close of
regular trading on the New York Stock Exchange (normally 4:00 p.m., Eastern
time) each day that the New York Stock Exchange is open. The net asset value per
share is calculated by adding the value of all securities and other assets of a
Series, deducting its liabilities, and dividing by the number of shares
outstanding.
Shares of the Trust are currently sold primarily to separate accounts of
Jackson National Life Insurance Company, 5901 Executive Drive, Lansing, Michigan
48911 to fund the benefits under variable insurance or annuity Policies.
Further, it is anticipated that shares of the Trust will be sold to certain
qualified retirement plans.
All investments in the Trust are credited to the shareholder's account in
the form of full and fractional shares of the designated Series (rounded to the
nearest 1/1000 of a share). The Trust does not issue share certificates.
- --------------------------------------------------------------------------------
SHARE REDEMPTION
- --------------------------------------------------------------------------------
An insurance company separate account redeems shares to make benefit or
surrender payments under the terms of its Policies. Redemptions are processed on
any day on which the Trust is open for business and are effected at net asset
value next determined after the redemption order, in proper form, is received by
the Trust's transfer agent.
The Trust may suspend the right of redemption only under the following
unusual circumstances:
- when the New York Stock Exchange is closed (other than weekends and
holidays) or trading is restricted;
- when an emergency exists, making disposal of portfolio securities or the
valuation of net assets not reasonably practicable; or
- during any period when the SEC has by order permitted a suspension of
redemption for the protection of shareholders.
- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
DESCRIPTION OF SHARES -- The Declaration of Trust permits the Trustees to
issue an unlimited number of full and fractional shares of beneficial interest
of each Series and to divide or combine such shares into a greater or lesser
number of shares without thereby changing the proportionate beneficial interests
in the Trust. Each share of a Series represents an equal proportional interest
in that Series with each other share. The Trust reserves the right to create a
number of different Series. In that case, the shares of each Series would
participate equally in the earnings, dividends, and assets of the particular
Series. Upon liquidation of a Series, its shareholders are entitled to share pro
rata in the net assets of such Series available for distribution to
shareholders.
As of April 7, 1997, Jackson National Life Insurance Company owned 5.2% of
the outstanding shares of the Trust.
SERIES TRANSACTIONS -- The Trust's portfolio transactions are executed
through brokers who are considered by the appropriate sub-adviser as able to
provide execution at the most favorable prices and in the most effective manner.
Portfolio security transactions may be executed through brokers who are
affiliated with the Trust, JNFSI or a sub-adviser. In addition, brokers may be
selected taking into account such brokers' assistance in the purchase of
variable annuity contracts funded by the Trust (although such assistance or
absence thereof is neither a qualifying nor a disqualifying factor in such
selection). See the Statement of Additional Information for more detailed
information.
VOTING RIGHTS -- Except for matters affecting a particular Series, as
described below, all shares of the Trust have equal voting rights and may be
voted in the election of Trustees and on other matters submitted to the vote of
the shareholders. Shareholders' meetings ordinarily
38
<PAGE> 43
will not be held unless required by the 1940 Act. As permitted by Massachusetts
law, there normally will be no shareholders' meetings for the purpose of
electing Trustees unless and until such time as fewer than a majority of the
Trustees holding office have been elected by shareholders. At that time, the
Trustees then in office will call a shareholders' meeting for the election of
Trustees. The Trustees must call a meeting of shareholders for the purpose of
voting upon the removal of any Trustee when requested to do so by the record
holders of 10% of the outstanding shares of the Trust. A Trustee may be removed
after the holders of record of not less than two-thirds of the outstanding
shares have declared that the Trustee be removed either by declaration in
writing or by votes cast in person or by proxy. Except as set forth above, the
Trustees shall continue to hold office and may appoint successor Trustees,
provided that immediately after the appointment of any successor Trustee, at
least two-thirds of the Trustees have been elected by the shareholders. Shares
do not have cumulative voting rights. Thus, holders of a majority of the shares
voting for the election of Trustees can elect all the Trustees. No amendment may
be made to the Declaration of Trust without the affirmative vote of a majority
of the outstanding shares of the Trust, except that amendments to conform the
Declaration to the requirements of applicable federal laws or regulations or the
regulated investment company provisions of the Code may be made by the Trustees
without the vote or consent of shareholders. If not terminated by the vote or
written consent of a majority of its outstanding shares, the Trust will continue
indefinitely.
In matters affecting only a particular Series, the matter shall have been
effectively acted upon by a majority vote of that Series even though: (1) the
matter has not been approved by a majority vote of any other Series; or (2) the
matter has not been approved by a majority vote of the Trust.
Shareholders of a Massachusetts business trust may, under certain
circumstances, be held personally liable as partners for the obligations of the
Trust. The risk of a shareholder incurring any financial loss on account of
shareholder liability is limited to circumstances in which the Trust itself
would be unable to meet its obligations. The Declaration of Trust contains an
express disclaimer of shareholder liability for acts or obligations of the Trust
and provides that notice of the disclaimer must be given in each agreement,
obligation or instrument entered into or executed by the Trust or Trustees. The
Declaration of Trust provides for indemnification of any shareholder held
personally liable for the obligations of the Trust and also provides for the
Trust to reimburse the shareholder for all legal and other expenses reasonably
incurred in connection with any such claim or liability.
- --------------------------------------------------------------------------------
PERFORMANCE ADVERTISING FOR THE SERIES
- --------------------------------------------------------------------------------
The Trust may from time to time advertise several types of historical
performance for the Series. The performance advertised will be based on
historical results and is not intended to indicate future performance. The
performance figures advertised for a Series may or may not reflect the effect of
any charges that are imposed under a variable annuity or variable life contract
that is funded by the Trust. Such charges, described in the variable annuity or
variable life prospectus, will have the effect of reducing the performance
described below.
Each Series may advertise standardized average annual total return,
calculated in a manner prescribed by the Securities and Exchange Commission, and
non-standardized total return. Standardized average annual total return will
show the percentage rate of return of a hypothetical initial investment of
$1,000 for the most recent one, five and ten year periods, or for a period
covering the time the Series has been in existence if the Series has not been in
existence for one of the prescribed periods. Because average annual total
returns tend to smooth out variations in the Series' returns, you should
recognize that they are not the same as actual year-by-year results. Non-
standardized total return may be for periods other than those required to be
presented or may otherwise differ from standardized average annual total return.
Each Series may also advertise yield, and the PPM America/JNL Money Market
Series may also advertise effective yield. Yield, as calculated by each Series
other than the PPM America/JNL Money Market Series, refers to the annualized
income generated by an investment in the Series over a specified thirty-day
period. The yield is calculated by assuming that the income generated by the
investment during that thirty-day period is generated each thirty-day period
over a twelve-month period and is shown as a percentage of the investment.
Yield, as calculated by the PPM America/JNL Money Market Series, is a measure of
the net dividend and interest income earned over a specific seven-day period
expressed as a percentage of the offering price of the Series. The yield is an
annualized figure, which means that it is assumed that the Series generates the
same level of net income over a 52-week period. Effective yield is calculated
under rules prescribed by the Securities and Exchange Commission and assumes a
weekly reinvestment of income earned. The effective
39
<PAGE> 44
yield will be slightly higher than the yield due to this compounding effect.
Because yield accounting methods differ from the methods used for financial
reporting and tax accounting purposes, a Series' yield may not equal its
distribution rate, the income paid to a shareholder's account, or the income
reported in the Series' financial statements.
The performance of the Series may be compared to the performance of other
mutual funds or mutual fund indices with similar objectives and policies as
reported by Lipper Analytical Services, Inc. ("Lipper"), CDA Investment
Technologies, Inc. ("CDA") or Donoghue's Money Fund Report. Lipper and CDA
performance calculations are based upon changes in net asset value with all
dividends reinvested and do not include the effect of any sales charges. The
Series' performance may also be compared to that of the Consumer Price Index or
various unmanaged stock and bond indices including, but not limited to, Salomon
Brothers Broad Investment Grade Index, Lehman Brothers High Yield Index, Lehman
Brothers Aggregate Bond Index, Salomon Brothers Treasury Index, S&P MidCap 400
Index, Morgan Stanley Capital International World Index, Morgan Stanley Europe
and Australasia, Far East Equity Index, Russell 2000 Index, and S&P 500 Index.
From time to time, a Series also may quote information from publications
including, but not limited to, the following: Morningstar, Inc., The Wall Street
Journal, Money Magazine, Forbes, Barron's, The New York Times, USA Today,
Institutional Investor and Registered Representative. Also, investors may want
to compare the historical returns of various investments, performance indices of
those investments or economic indicators, including but not limited to stocks,
bonds, certificates of deposit and other bank products, money market funds and
U.S. Treasury obligations. Certain of these alternative investments may offer
fixed rates of return and guaranteed principal, and may be insured. Economic
indicators may include, without limitation, indicators of market rate trends and
cost of funds, such as Federal Home Loan Bank Board 11th District Cost of Funds
Index (COFI).
Each Series' shares are sold at net asset value. Each Series' returns will
fluctuate. Shares of a Series are redeemable by an investor at the then current
net asset value, which may be more or less than original cost. Additional
information concerning each Series' performance appears in the Statement of
Additional Information, and in the Trust's Annual Report to Shareholders which
may be obtained, without charge, by writing or calling the Trust.
SHAREHOLDER INQUIRIES -- All inquiries regarding the Trust should be
directed to the Trust at the telephone number or address shown on the cover page
of this Prospectus.
- --------------------------------------------------------------------------------
TAX STATUS
- --------------------------------------------------------------------------------
The Trust's policy is to meet the requirements of Subchapter M of the
Internal Revenue Code. Each Series intends to distribute all its taxable net
investment income and capital gains to shareholders, and therefore, will not be
required to pay any federal income taxes.
Each Series of the Trust is treated as a separate entity for purposes of
the regulated investment company provisions of the Internal Revenue Code, and,
therefore, the assets, income, and distributions of each Series are considered
separately for purposes of determining whether or not the Series qualifies as a
regulated investment company.
40
<PAGE> 45
CUSTODIAN AND TRANSFER AGENT
State Street Bank and Trust Company
1776 Heritage Drive
North Quincy, Massachusetts 02171
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
100 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
LEGAL COUNSEL
Blazzard, Grodd & Hasenauer, P.C.
943 Post Road East
Westport, CT 06881
INVESTMENT ADVISER
Jackson National Financial Services, Inc.
5901 Executive Drive
Lansing, Michigan 48911
41
<PAGE> 46
- --------------------------------------------------------------------------------
APPENDIX A -- RATINGS OF INVESTMENTS
- --------------------------------------------------------------------------------
COMMERCIAL PAPER RATINGS
A-1, A-2 AND PRIME-1, PRIME-2 COMMERCIAL PAPER RATINGS
Commercial paper rated by Standard & Poor's Ratings Group has the following
characteristics: Liquidity ratios are adequate to meet cash requirements.
Long-term senior debt is rated "A" or better. The issuer has access to at least
two additional channels of borrowing. Basic earnings and cash flow have an
upward trend with allowance made for unusual circumstances. Typically, the
issuer's industry is well established and the issuer has a strong position
within the industry. The reliability and quality of management are unquestioned.
Relative strength or weakness of the above factors determine whether the
issuer's commercial paper is rated A-1 or A-2.
The ratings Prime-1 and Prime-2 are the two highest commercial paper
ratings assigned by Moody's Investors Service, Inc. Among the factors considered
by it in assigning ratings are the following: (1) evaluation of the management
of the issuer; (2) economic evaluation of the issuer's industry or industries
and an appraisal of speculative-type risks which may be inherent in certain
areas; (3) evaluation of the issuer's products in relation to competition and
customer-acceptance; (4) liquidity; (5) amount and quality of long-term debt;
(6) trend of earnings over a period of ten years; (7) financial strength of a
parent company and the relationships which exist with the issuer; and (8)
recognition by the management of obligations which may be present or may arise
as a result of public interest questions and preparations to meet such
obligations. Relative strength or weakness of the above factors determines
whether the issuer's commercial paper is rated Prime-1 or 2.
CORPORATE BONDS
STANDARD & POOR'S RATINGS GROUP BOND RATINGS
AAA. Debt rated AAA has the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong.
AA. Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the higher rated issued only in small degree.
A. Debt rated A has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.
BBB. Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher rated categories.
BB, B, CCC, CC, C. Debt rated BB, B, CCC, CC, and C is regarded, on
balance, as predominantly speculative with respect to capacity to pay interest
and repay principal in accordance with the terms of the obligation. BB indicates
the lowest degree of speculation and C the highest degree of speculation. While
such debt will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposures to adverse
conditions.
CI. The rating CI is reserved for income bonds on which no interest is
being paid.
D. Debt rated D is in default, and payment of interest and/or repayment of
principal is in arrears.
MOODY'S INVESTORS SERVICE, INC. BOND RATINGS
AAA. Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt-edge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
AA. Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group, they comprise what are generally known
as high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat larger than in Aaa securities.
A. Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper medium grade obligations. Factors giving security
to principal and interest are considered adequate but elements may be present
which suggest a susceptibility to impairment sometime in the future.
A-1
<PAGE> 47
BAA. Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time.
Such bonds lack outstanding investment characteristics and, in fact, have
speculative characteristics as well.
BA. Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B. Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
CAA. Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal and
interest.
CA. Bonds which are rated Ca represent obligations which are speculative in
a high degree. Such issues are often in default or have other marked
shortcomings.
C. Bonds which are rated C are the lowest rated class of bonds and issues
so rated can be regarded as having extremely poor prospects of ever attaining
any real investment standing.
MUNICIPAL BONDS
STANDARD & POOR'S RATINGS GROUP MUNICIPAL BOND RATINGS
AAA. Bonds rated AAA have the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong.
AA. Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from the higher rated issues only in small degree.
A. Bonds which are rated A have a strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than debt in higher rated
categories.
BBB. Bonds which are rated BBB are regarded as having an adequate capacity
to pay interest and repay principal. Whereas they normally exhibit adequate
protection parameters, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity to pay interest and repay principal
for bonds in this category than for bonds in higher rated categories.
Plus (+) or Minus (-): The ratings from "AA" to "B" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
MOODY'S INVESTORS SERVICE, INC. MUNICIPAL BOND RATINGS
AAA. Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt-edge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
AA. Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group, they comprise what are generally known
as high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat larger than in Aaa securities.
A. Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper medium grade obligations. Factors giving security
to principal and interest are considered adequate but elements may be present
which suggest a susceptibility to impairment sometime in the future.
BAA. Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and, in
fact, have speculative characteristics as well.
NOTE: Moody's applies numerical modifiers, 1, 2 AND 3 in each generic
rating classification from "AA" through "B" in its corporate bond rating system.
The modifier 1 indicates that the security ranks in the higher end of its
generic rating category; the modifier 2 indicates a mid-range ranking; and the
modifier indicates that the issue ranks in the lower end of its generic rating
category.
A-2
<PAGE> 48
STATEMENT OF ADDITIONAL INFORMATION
MAY 1, 1997
JNL SERIES TRUST
JNL Aggressive Growth Series
JNL Capital Growth Series
JNL Global Equities Series
JNL/Alger Growth Series
JNL/Eagle Core Equity Series
JNL/Eagle SmallCap Equity Series
JNL/Putnam Growth Series
JNL/Putnam Value Equity Series
PPM America/JNL Balanced Series
PPM America/JNL High Yield Bond Series
PPM America/JNL Money Market Series
Salomon Brothers/JNL Global Bond Series
Salomon Brothers/JNL U.S. Government & Quality Bond Series
T. Rowe Price/JNL Established Growth Series
T. Rowe Price/JNL International Equity Investment Series
T. Rowe Price/JNL Mid-Cap Growth Series
This Statement of Additional Information is not a prospectus. It contains
information in addition to and more detailed than set forth in the Prospectus
and should be read in conjunction with the JNL Series Trust Prospectus, dated
May 1, 1997. Not all Series described in the Statement of Additional
Information may be available for investment. The Prospectus may be obtained by
calling (800) 322-8257, or writing P.O. Box 25127, Lansing, Michigan 48909.
TABLE OF CONTENTS
General Information and History 2
Investment Restrictions Applicable to all Series 2
Common Types of Securities 4
Trustees and Officers of the Trust 10
Performance 11
Investment Adviser and Other Services 15
Purchases, Redemptions and Pricing of Shares 19
Additional Information 21
Tax Status 22
Financial Statements 23
1
<PAGE> 49
GENERAL INFORMATION AND HISTORY
The JNL Series Trust ("Trust") is an open-end management investment
company organized under the laws of Massachusetts, by a Declaration of Trust,
dated June 1, 1994. The Trust offers shares in 16 separate Series, each with
its own investment objective.
INVESTMENT RESTRICTIONS APPLICABLE TO ALL SERIES
As indicated in the Prospectus, each Series is subject to certain
fundamental policies and restrictions that may not be changed without
shareholder approval. Shareholder approval means approval by the lesser of (i)
more than 50% of the outstanding voting securities of the Trust (or a
particular Series if a matter affects just that Series), or (ii) 67% or more of
the voting securities present at a meeting if the holders of more than 50% of
the outstanding voting securities of the Trust (or a particular Series) are
present or represented by proxy. Unless otherwise indicated, all restrictions
apply at the time of investment. As fundamental policies, no Series may:
(1) Own more than 10% of the outstanding voting securities of any one
issuer and, as to fifty percent (50%) of the value of the total assets for JNL
Capital Growth and JNL Aggressive Growth Series, and as to seventy-five percent
(75%) of the value of the total assets of the other Series, purchase the
securities of any one issuer (except cash items and "government securities" as
defined under the Investment Company Act of 1940, as amended (the "1940 Act")),
if immediately after and as a result of such purchase, the value of the
holdings of a Series in the securities of such issuer exceeds 5% of the value
of such Series' total assets. With respect to the other 50% of the value of
its total assets, JNL Capital Growth and JNL Aggressive Growth Series may
invest in the securities of as few as two issuers (not to exceed 25% in any one
issuer).
(2) Invest more than 25% of the value of their respective assets in any
particular industry (other than U.S. Government securities); except the PPM
America/JNL Money Market Series.
(3) Invest directly in real estate or interests in real estate; however,
the Series may own debt or equity securities issued by companies engaged in
those businesses.
(4) Purchase or sell physical commodities other than foreign currencies
unless acquired as a result of ownership of securities (but this limitation
shall not prevent the Series from purchasing or selling options, futures, swaps
and forward contracts or from investing in securities or other instruments
backed by physical commodities).
(5) Lend any security or make any other loan if, as a result, more than
25% of a Series' total assets would be lent to other parties (but this
limitation does not apply to purchases of commercial paper, debt securities or
repurchase agreements).
2
<PAGE> 50
(6) Act as an underwriter of securities issued by others, except to the
extent that a Series may be deemed an underwriter in connection with the
disposition of portfolio securities of such Series.
(7) Invest more than 15% of a Series' net assets (10% in the case of the
PPM America/JNL Money Market Series and the JNL/Alger Growth Series) in
securities that are restricted as to disposition under federal securities law,
or securities with other legal or contractual restrictions on resale. This
limitation does not apply to securities eligible for resale pursuant to Rule
144A of the Securities Act of 1933 or Commercial Paper issued in reliance upon
the exemption from registration contained in Section 4(2) of that Act, which
have been determined to be liquid in accordance with guidelines established by
the Board of Trustees.
(8) Purchase or retain the securities of any issuer if any of the
officers, trustees or directors of all Series or the investment adviser or
sub-adviser owns beneficially more than 1/2 of 1% of the securities of such
issuer and together they own more than 5% of the securities of such issuer.
(9) The Series will not issue senior securities except that they may
borrow money for temporary or emergency purposes (not for leveraging or
investment) in an amount not exceeding 25% of the value of their respective
total assets (including the amount borrowed) less liabilities (other than
borrowings). If borrowings exceed 25% of the value of a Series' total assets
by reason of a decline in net assets, the Series will reduce its borrowings
within three business days to the extent necessary to comply with the 25%
limitation. This policy shall not prohibit reverse repurchase agreements,
deposits of assets to margin or guarantee positions in futures, options, swaps
and forward contracts, or the segregation of assets in connection with such
contracts.
The Trustees have adopted additional investment restrictions for the
Series. These restrictions are operating policies of the Series and may be
changed by the Trustees without shareholder approval. The additional
investment restrictions adopted by the Trustees to date include the following:
(a) Each Series' investments in warrants, valued at the lower of cost or
market, may not exceed 5% of the value of its net assets. Included within that
amount, but not to exceed 2% of the value of a Series' net assets, may be
warrants that are not listed on the New York or American Stock Exchanges.
Warrants acquired by a Series in units or attached to securities shall be
deemed to be without value for the purpose of monitoring this policy.
(b) The Series do not currently intend to sell securities short, unless
they own or have the right to obtain securities equivalent in kind and amount
to the securities sold short without the payment of any additional
consideration therefor, and provided that transactions in futures, options,
swaps and forward contracts are not deemed to constitute selling securities
short.
(c) The Series do not currently intend to purchase securities on margin,
except that the Series may obtain such short-term credits as are necessary for
the clearance of transactions, and
3
<PAGE> 51
provided that margin payments and other deposits in connection with
transactions in futures, options, swaps and forward contracts shall not be
deemed to constitute purchasing securities on margin.
(d) The Series do not currently intend to (i) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (ii) purchase or retain
securities issued by other open-end investment companies. Limitations (i) and
(ii) do not apply to money market funds or to securities received as dividends,
through offers of exchange, or as a result of a reorganization, consolidation,
or merger.
(e) The Series do not currently intend to invest directly in oil, gas, or
other mineral development or exploration programs or leases; however, the
Series may own debt or equity securities of companies engaged in those
businesses.
(f) The Series intend to comply with the Commodity Futures Trading
Commission ("CFTC") regulations limiting a Series' investments in futures and
options for non-hedging purposes.
INSURANCE LAW RESTRICTIONS. In connection with the Trust's agreement to sell
shares to the separate accounts, Jackson National Financial Services, Inc.
("JNFSI") and the insurance companies may enter into agreements, required by
certain state insurance departments, under which JNFSI may agree to use its
best efforts to assure and to permit insurance companies to monitor that each
Series of the Trust complies with the investment restrictions and limitations
prescribed by state insurance laws and regulations applicable to the investment
of separate account assets in shares of mutual funds. If a Series failed to
comply with such restrictions or limitations, the insurance company would take
appropriate action which might include ceasing to make investments in the
Series or withdrawing from the state imposing the limitation. Such
restrictions and limitations are not expected to have a significant impact on
the Trust's operations.
COMMON TYPES OF SECURITIES
ASSET-BACKED SECURITIES. The credit quality of most asset-backed securities
depends primarily on the credit quality of the assets underlying such
securities, how well the entity issuing the security is insulated from the
credit risk of the originator or any other affiliated entities, and the amount
and quality of any credit support provided to the securities. The rate of
principal payment on asset-backed securities generally depends on the rate of
principal payments received on the underlying assets which in turn may be
affected by a variety of economic and other factors. As a result, the yield on
any asset-backed security is difficult to predict with precision and actual
yield to maturity may be more or less than the anticipated yield to maturity.
Asset-backed securities may be classified as pass-through certificates or
collateralized obligations.
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<PAGE> 52
Pass-through certificates are asset-backed securities which represent an
undivided fractional ownership interest in an underlying pool of assets.
Pass-through certificates usually provide for payments of principal and
interest received to be passed through to their holders, usually after
deduction for certain costs and expenses incurred in administering the pool.
Because pass-through certificates represent an ownership interest in the
underlying assets, the holders thereof bear directly the risk of any defaults
by the obligors on the underlying assets not covered by any credit support.
Asset-backed securities issued in the form of debt instruments, also known
as collateralized obligations, are generally issued as the debt of a special
purpose entity organized solely for the purpose of owning such assets and
issuing such debt. Such assets are most often trade, credit card
or automobile receivables. The assets collateralizing such asset-backed
securities are pledged to a trustee or custodian for the benefit of the holders
hereof. Such issuers generally hold no assets other than those underlying the
asset-backed securities and any credit support provided. As a result, although
payments on such asset-backed securities are obligations of the issuers, in the
event of defaults on the underlying assets not covered by any credit support,
the issuing entities are unlikely to have sufficient assets to satisfy their
obligations on the related asset-backed securities.
BANK OBLIGATIONS. Bank obligations include certificates of deposit, bankers'
acceptances, and other short-term debt obligations. Certificates of deposit
are short-term obligations of commercial banks. A bankers' acceptance is a
time draft drawn on a commercial bank by a borrower, usually in connection with
international commercial transactions. Certificates of deposit may have fixed
or variable rates. The Series may invest in U.S. banks, foreign branches of
U.S. banks, U.S. branches of foreign banks, and foreign branches of foreign
banks.
COLLATERALIZED MORTGAGE OBLIGATIONS (CMOS). CMOs are bonds that are
collateralized by whole loan mortgages or mortgage pass-through securities.
The bonds issued in a CMO transaction are divided into groups, and each group
of bonds is referred to as a "tranche." Under the traditional CMO structure,
the cash flows generated by the mortgages or mortgage pass-through securities
in the collateral pool are used to first pay interest and then pay principal to
the CMO bondholders. The bonds issued under a CMO structure are retired
sequentially as opposed to the pro rata return of principal found in
traditional pass-through obligations. Subject to the various provisions of
individual CMO issues, the cash flow generated by the underlying collateral (to
the extent it exceeds the amount required to pay the stated interest) is used
to retire the bonds. Under the CMO structure, the repayment of principal among
the different tranches is prioritized in accordance with the terms of the
particular CMO issuance. The "fastest-pay" tranche of bonds, as specified in
the prospectus for the issue, would initially receive all principal payments.
When that tranche of bonds is retired, the next tranche, or tranches, in the
sequence, as specified in the prospectus, receive all of the principal payments
until they are retired. The sequential retirement of bonds groups continues
until the last tranche, or group of bonds, is retired. Accordingly, the CMO
structure allows the issuer to use cash flows of long maturity, monthly-pay
collateral to formulate securities with short, intermediate and long final
maturities and expected average lives.
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<PAGE> 53
COMMERCIAL PAPER. Commercial paper are short-term promissory notes issued by
corporations primarily to finance short-term credit needs. Certain notes may
have floating or variable rates.
FOREIGN GOVERNMENT SECURITIES. Foreign government securities are issued or
guaranteed by a foreign government, province, instrumentality, political
subdivision or similar unit thereof.
HIGH YIELD BONDS. High Yield Bonds are fixed income securities offering high
current income that are in the lower rated categories of recognized rating
agencies or not rated. These lower-rated fixed income securities are
considered, on balance, as predominantly speculative with respect to capacity
to pay interest and repay principal in accordance with the terms of the
obligation and generally will involve more credit risk than securities in the
higher rated categories.
High yield securities frequently are issued by corporations in the growth
stage of their development. They may also be issued in connection with a
corporate reorganization or a corporate takeover. Companies that issue such
high yielding securities often are highly leveraged and may not have available
to them more traditional methods of financing. Therefore, the risk associated
with acquiring the securities of such issuers generally is greater than is the
case with higher rated securities. For example, during an economic downturn or
recession, highly leveraged issuers of high yield securities may experience
financial stress. During such periods, such issuers may not have sufficient
revenues to meet their interest payment obligations. The issuer's ability to
service its debt obligations may also be adversely affected by specific
corporate developments, or the issuer's inability to meet specific projected
business forecasts, or the unavailability of additional financing. Adverse
publicity and investor perceptions regarding lower rated bonds, whether or not
based upon fundamental analysis, may also depress the price for such
securities. The risk of loss from default by the issuer is significantly
greater for the holders of high yield securities because such securities are
generally unsecured and are often subordinated to other creditors of the
issuer.
HYBRID INSTRUMENTS. Hybrid instruments have recently been developed and
combine the elements of futures contracts or options with those of debt,
preferred equity or a depository instrument. Often these hybrid instruments
are indexed to the price of commodity, a particular currency, or a domestic or
foreign debt or equity securities index. Hybrid instruments may take a variety
of forms, including, but not limited to, debt instruments with interest or
principal payments or redemption terms determined by reference to the value of
a currency or commodity or securities index at a future point in time,
preferred stock with dividend rates determined by reference to the value of a
currency, or convertible securities with the conversion terms related to a
particular commodity.
MORTGAGE-BACKED SECURITIES. Mortgage-backed securities are securities
representing an interest in a pool of mortgages. The mortgages may be of a
variety of types, including adjustable rate, conventional 30-year fixed rate,
graduated payment, and 15-year. Principal and interest payments made on the
mortgages in the underlying mortgage pool are passed through to the
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<PAGE> 54
Series. This is in contrast to traditional bonds where principal is normally
paid back at maturity in a lump sum. Unscheduled prepayments of principal
shorten the securities' weighted average life and may lower their total return.
(When a mortgage in the underlying mortgage pool is prepaid, an unscheduled
principal prepayment is passed through to the Series. This principal is
returned to the Series at par. As a result, if a mortgage security were
trading at a discount, its total return would be increased by prepayments).
The value of these securities also may change because of changes in the
market's perception of the creditworthiness of the federal agency that issued
them. In addition, the mortgage securities market in general may be adversely
affected by changes in governmental regulation or tax policies.
MUNICIPAL OBLIGATIONS. Municipal Obligations include debt obligations issued
to obtain funds for various public purposes, including the construction of a
wide range of public facilities such as bridges, highways, housing, hospitals,
mass transportation, schools, streets and water and sewer works. Other public
purposes for which Municipal Obligations may be issued include refunding
outstanding obligations, obtaining funds for general operating expenses, and
obtaining funds to loan to other public institutions and facilities. In
addition, certain types of industrial development bonds are issued by or on
behalf of public authorities to obtain funds to provide privately-operated
housing facilities, sports facilities, convention or trade show facilities,
airport, mass transit, port or parking facilities, air or water pollution
control facilities for water supply, gas, electricity or sewage or solid waste
disposal. Such obligations are included with the term Municipal Obligations if
the interest paid thereon qualifies as exempt from federal income tax.
Other types of industrial development bonds, the proceeds of which are
used for the construction, equipment, repair or improvement of privately
operated industrial or commercial facilities, may constitute Municipal
Obligations, although the current federal tax laws place substantial
limitations on the size of such issues.
REPURCHASE AGREEMENTS. A Repurchase Agreement may be considered a loan
collateralized by securities. The Series must take physical possession of the
security or receive written confirmation of the purchase and a custodial or
safekeeping receipt from a third party or be recorded as the owner of the
security through the Federal Reserve Book Entry System. The Series may invest
in open repurchase agreements which vary from the typical agreement in the
following respects: (1) the agreement has no set maturity, but instead matures
upon 24 hours' notice to the seller; and (2) the repurchase price is not
determined at the time the agreement is entered into, but is instead based on a
variable interest rate and the duration of the agreement.
SAVINGS AND LOAN OBLIGATIONS. Savings and loan obligations include negotiable
certificates of deposit and other short-term debt obligations of savings and
loan associations.
SHORT-TERM CORPORATE DEBT SECURITIES. Short-term corporate debt securities are
outstanding non-convertible corporate debt securities (e.g., bonds and
debentures) which have one year or less remaining to maturity. Corporate notes
may have fixed, variable, or floating rates.
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<PAGE> 55
STRIPPED AGENCY MORTGAGE-BACKED SECURITIES. Stripped Agency Mortgage-Backed
Securities represent interests in a pool of mortgages, the cash flow of
which has been separated into its interest and principal components. "IOs"
(interest only securities) receive the interest portion of the cash flow
while "POs" (principal only securities) receive the principal portion.
Stripped Agency Mortgage-Backed Securities may be issued by U.S. Government
agencies or by private issuers similar to those described with respect to CMOs
and privately-issued mortgage-backed certificates. As interest rates rise
and fall, the value of IOs tends to move in the same direction as interest
rates. The value of the other mortgage-backed securities described herein,
like other debt instruments, will tend to move in the opposite direction
compared to interest rates. Under the Internal Revenue Code of 1986, as
amended (the "Code"), POs may generate taxable income from the current accrual
of original issue discount, without a corresponding distribution of cash to
the Series.
The cash flows and yields on IO and PO classes are extremely sensitive
to the rate of principal payments (including prepayments) on the related
underlying mortgage assets. For example, a rapid or slow rate of principal
payments may have a material adverse effect on the prices of IOs or POs,
respectively. If the underlying mortgage assets experience greater than
anticipated prepayments of principal, an investor may fail to recoup fully its
initial investment in an IO class of a stripped mortgage-backed security, even
if the IO class is rated AAA or Aaa or is derived from a full faith and credit
obligation. Conversely, if the underlying mortgage assets experience slower
than anticipated prepayments of principal, the price on a PO class will be
affected more severely than would be the case with a traditional
mortgage-backed security.
SUPRANATIONAL AGENCY SECURITIES. Supranational Agency Securities are
securities issued or guaranteed by certain supranational entities, such as the
International Development Bank.
U.S. GOVERNMENT AGENCY SECURITIES. U.S. Government Agency Securities are
issued or guaranteed by U.S. Government sponsored enterprises and federal
agencies. These include securities issued by the Federal National Mortgage
Association, Government National Mortgage Association, Federal Home Loan Bank,
Federal Land Banks, Farmers Home Administration, Banks for Cooperatives,
Federal Intermediate Credit Banks, Federal Financing Bank, Farm Credit Banks,
the Small Business Association, Student Loan Marketing Association, and the
Tennessee Valley Authority. Some of these securities are supported by the
full faith and credit of the U.S. Treasury; the remainder are supported only by
the credit of the instrumentality, which may or may not include the right of
the issuer to borrow from the Treasury.
U.S. GOVERNMENT OBLIGATIONS. U.S. Government Obligations include bills, notes,
bonds, and other debt securities issued by the U.S. Treasury. These are direct
obligations of the U.S. Government and differ mainly in the length of their
maturities.
VARIABLE RATE SECURITIES. Variable Rate Securities provide for a periodic
adjustment in the interest rate paid on the obligations. The terms of such
obligations must provide that interest rates are adjusted periodically based
upon some appropriate interest rate adjustment index as provided in the
respective obligations. The adjustment intervals may be regular and range from
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<PAGE> 56
daily up to annually, or may be event based, such as on a change in the prime
rate. Variable Rate Securities that cannot be disposed of promptly within
seven days and in the usual course of business without taking a reduced price
will be treated as illiquid and subject to the limitation on investments in
illiquid securities.
WARRANTS. The Series may invest in warrants. Warrants have no voting rights,
pay no dividends and have no rights with respect to the assets of the
corporation issuing them. Warrants basically are options to purchase equity
securities at a specific price valid for a specific period of time. They do
not represent ownership of the securities, but only the right to buy them.
Warrants differ from call options in that warrants are issued by the issuer of
the security which may be purchased on their exercise, whereas call options may
be written or issued by anyone. The prices of warrants do not necessarily move
parallel to the prices of the underlying securities.
WHEN-ISSUED SECURITIES AND FORWARD COMMITMENT CONTRACTS. The Series may
purchase securities on a when-issued or delayed delivery basis ("When-Issueds")
and may purchase securities on a forward commitment basis ("Forwards"). Any or
all of the Series' investments in debt securities may be in the form of
When-Issueds and Forwards. The price of such securities, which may be
expressed in yield terms, is fixed at the time the commitment to purchase is
made, but delivery and payment take place at a later date. Normally, the
settlement date occurs within 90 days of the purchase for When-Issueds, but may
be substantially longer for Forwards. During the period between purchase and
settlement, no payment is made by the Series to the issuer and no interest
accrues to the Series. The purchase of these securities will result in a loss
if their value declines prior to the settlement date. This could occur, for
example, if interest rates increase prior to settlement. The longer the period
between purchase and settlement, the greater the risks. At the time the Series
makes the commitment to purchase these securities, it will record the
transaction and reflect the value of the security in determining its net asset
value. The Series will segregate for these securities by maintaining cash
and/or liquid debt securities with its custodian bank equal in value to
commitments for them during the time between the purchase and the settlement.
Therefore, the longer this period, the longer the period during which
alternative investment options are not available to the Series (to the extent
of the securities used for cover). Such securities either will mature or, if
necessary, be sold on or before the settlement date.
ZERO COUPON BONDS. A Series may invest up to 10% of its assets in zero coupon
bonds or strips. Zero coupon bonds do not make regular interest payments;
rather, they are sold at a discount from face value. Principal and accreted
discount (representing interest accrued but not paid) are paid at maturity.
Strips are debt securities that are stripped of their interest after the
securities are issued, but otherwise are comparable to zero coupon bonds. The
market value of strips and zero coupon bonds generally fluctuates in response
to changes in interest rates to a greater degree than interest-paying
securities of comparable term and quality.
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<PAGE> 57
TRUSTEES AND OFFICERS OF THE TRUST
The officers of the Trust manage its day to day operations and are
responsible to the Trust's Board of Trustees. The trustees set broad policies
for each Series and choose the Trust's officers. The following is a list of
the trustees and officers of the Trust and a statement of their present
positions and principal occupations during the past five years. The mailing
address of the officers and trustees, unless otherwise noted, is 5901 Executive
Drive, Lansing, Michigan 48911.
JOHN A. KNUTSON* (Age 57), Trustee, Chairman of the Board, President and Chief
Executive Officer, June 1994 to present; President, August 1993 to present,
Chief Financial Officer, February 1992 to present, Director, November 1991 to
present, Jackson National Financial Services, Inc.; President, June 1993 to
February 1994, Senior Vice President, September 1987 to June 1993 and February
1994 to present, Chief Financial Officer, September 1987 to June 1994, Chief
Operating Officer, September 1992 to present, Jackson National Life Insurance
Company.
JOSEPH FRAUENHEIM (Age 62), 1405 Cambridge, Lansing, MI 48911, Trustee,
December 1994 to present; Consultant, 1991 to present; President & CEO,
Manufacturers Bank of Lansing.
ANDREW B. HOPPING* (Age 38), Trustee, Vice President, Treasurer & Chief
Financial Officer, August 1996 to present; Senior Vice President, June 1994 to
present, Jackson National Life Insurance Company; Executive Vice President,
1991 to June 1994, Countrywide Credit.
THOMAS J. MEYER (Age 50), Vice President, Counsel and Secretary, December 1994
to present; Secretary and Chief Legal Officer, November 1991 to present,
Director, June 1995 to present, Jackson National Financial Services, Inc.;
Secretary, September 1994 to present, Vice President, and General Counsel,
March 1985 to present, Jackson National Life Insurance Company.
LARRY C. JORDAN (Age 53), Vice President, December 1994 to present, Assistant
Secretary, February 1996 to present, Assistant Treasurer, December 1994 to
February 1996; Treasurer and Assistant Secretary, November 1991 to present,
Chief Operating Officer, September 1992 to present, Director June 1993 to
present, Jackson National Financial Services, Inc.; Treasurer, October 1980 to
September 1994, Vice President, October 1980 to present, Jackson National Life
Insurance Company.
RICHARD MCLELLAN (Age 54), 1191 Carriageway North, East Lansing, MI 48823,
Trustee, December 1994 to present; Attorney, Dykema Gossett PLLC.
PETER MCPHERSON (Age 56), 1 Abbott Road, East Lansing, MI 48824, Trustee,
December 1994 to present; President, October 1993 to present, Michigan State
University; Group Executive Vice President, November 1990 to October 1993, Bank
of America.
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<PAGE> 58
ROBERT A. FRITTS (Age 48), Vice President, December 1994 to present, Assistant
Treasurer, February 1996 to present, Assistant Secretary, December 1994 to
February 1996; Assistant Treasurer, Vice President, Jackson National Life
Insurance Company.
*Trustees who are interested persons as defined in the Investment Company Act
of 1940.
On April 7, 1997, the officers and trustees of the Trust, as a group,
owned less than 1% of the then outstanding shares of the Trust. As of that
date, Jackson National Life Insurance Company, a Michigan corporation, through
its initial investment of capital into each Series, owned 5.2% of the
outstanding shares of the Trust. To the extent required by applicable law,
Jackson National Life Insurance Company will solicit voting instructions from
owners of variable insurance or variable annuity contracts. All shares of each
Series of the Trust will be voted by Jackson National Life Insurance Company in
accordance with voting instructions received from such variable contract
owners. Jackson National Life Insurance Company will vote all of the shares
which it is entitled to vote in the same proportion as the voting instructions
given by variable contract owners, on the issues presented, including shares
which are attributable to Jackson National Life Insurance Company's interest in
the Trust.
The trustees who are "interested persons" and officers as designated above
receive no compensation from the Trust. Disinterested Trustees will be paid
$2,500 for each meeting they attend. For the year ended December 31, 1996,
the Disinterested Trustees received the following fees for service as Trustee:
<TABLE>
<CAPTION>
PENSION OR
AGGREGATE RETIREMENT BENEFITS TOTAL COMPENSATION
COMPENSATION FROM ACCRUED AS PART OF FROM TRUST AND FUND
TRUSTEE TRUST TRUST EXPENSES COMPLEX
<S> <C> <C> <C>
Joseph Frauenheim $10,000 0 $10,000
Richard McLellan 10,000 0 10,000
Peter McPherson 7,500 0 7,500
</TABLE>
PERFORMANCE
As described in the Prospectus, a Series' historical performance may be
shown in the form of total return and yield. These performance measures are
described below. Performance advertised for a Series may or may not reflect the
effect of any charges that are imposed under a variable annuity or variable
life contract that is funded by the Trust. Such charges, described in the
variable annuity or variable life prospectus, will have the effect of reducing
a Series' performance.
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<PAGE> 59
Standardized average annual total return and non-standardized total return
measure both the net investment income generated by, and the effect of any
realized and unrealized appreciation or depreciation of, the underlying
investments of a Series. Yield is a measure of the net investment income per
share earned over a specific one month or 30-day period (seven-day period for
the PPM America/JNL Money Market Series) expressed as a percentage of the net
asset value.
A Series' standardized average annual total return quotation is computed
in accordance with a standardized method prescribed by rules of the Securities
and Exchange Commission. The standardized average annual total return for a
Series for a specific period is found by first taking a hypothetical $1,000
investment ("initial investment") in the Series' shares on the first day of the
period, adjusting to deduct the applicable charges, if any, and computing the
"redeemable value" of that investment at the end of the period. The redeemable
value is then divided by the initial investment, and this quotient is taken to
the Nth root (N representing the number of years in the period) and 1 is
subtracted from the result, which is then expressed as a percentage. The
calculation assumes that all income and capital gains dividends paid by the
Series have been reinvested at net asset value on the reinvestment dates during
the period.
The standardized total return for each Series (except the PPM America/JNL
Money Market Series)for the periods indicated was as follows:
<TABLE>
<CAPTION>
Commencement
of Operations
One Year Period Ended to
December 31, 1996 December 31, 1996
<S> <C> <C>
JNL Aggressive Growth Series* 18.95% 26.88%
JNL Capital Growth Series* 16.83% 31.24%
JNL Global Equities Series* 31.36% 38.22%
JNL/Alger Growth Series** 13.41% 9.46%
JNL/Eagle Core Equity Series*** N/A% 6.47%****
JNL/Eagle SmallCap Equity Series*** N/A% 15.40%****
JNL/Putnam Growth Series* 26.81% 34.04%
JNL/Putnam Value Equity Series* 24.33% 29.41%
PPM America/JNL Balanced Series* 10.81% 16.25%
PPM America/JNL High Yield Bond Series* 12.90% 11.76%
Salomon Brothers/JNL Global Bond Series* 14.39% 13.25%
Salomon Brothers/JNL U.S. Government and
Quality Bond Series* 2.58% 5.82%
T. Rowe Price/JNL Established Growth Series* 22.59% 27.56%
T. Rowe Price/JNL International Equity
Investment Series* 13.91% 12.99%
</TABLE>
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<PAGE> 60
T. Rowe Price/JNL Mid-Cap Growth Series* 23.47% 33.06%
* Commenced operations on May 15, 1995.
**Commenced operations on October 16, 1995.
***Commenced operations on September 16, 1996.
****Not annualized.
Prior to May 1, 1997, the PPM America/JNL Balanced Series was the JNL/Phoenix
Investment Counsel Balanced Series and was sub-advised by Phoenix Investment
Counsel Inc., the JNL/Putnam Growth Series was the JNL/Phoenix Investment
Counsel Growth Series and was sub-advised by Phoenix Investment Counsel, Inc.,
and the JNL/Putnam Value Equity Series was the PPM America/JNL Value Equity
Series and was sub-advised by PPM America, Inc.
The standardized average annual total return quotations will be current to
the last day of the calendar quarter preceding the date on which an
advertisement is submitted for publication. The standardized average annual
total return will be based on rolling calendar quarters and will cover at least
periods of one, five and ten years, or a period covering the time the Series
has been in existence, if it has not been in existence for one of the
prescribed periods.
Non-standardized total return may also be advertised. Non-standardized
total return may be for periods other than those required to be presented or
may otherwise differ from standardized average annual total return.
Non-standardized total return for a specific period is calculated by first
taking an investment ("initial investment") in the Series' shares on the first
day of the period and computing the "end value" of that investment at the end
of the period. The total return percentage is then determined by subtracting
the initial investment from the ending value and dividing the remainder by the
initial investment and expressing the result as a percentage. The calculation
assumes that all income and capital gains dividends paid by the Series have
been reinvested at net asset value on the reinvestment dates during the period.
Non-standardized total return may also be shown as the increased dollar value
of the hypothetical investment over the period.
Quotations of standardized average annual total return and
non-standardized total return are based upon historical earnings and will
fluctuate. Any quotation of performance, therefore, should not be considered a
guarantee of future performance. Factors affecting the performance of a Series
include general market conditions, operating expenses and investment
management.
The yield for a Series other than the PPM America/JNL Money Market Series
is computed in accordance with a standardized method prescribed by the rules of
the SEC. Under that method, yield is computed by dividing the net investment
income per share earned during the specified one month or 30-day period by the
offering price per share on the last day of the period, according to the
following formula:
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<PAGE> 61
YIELD= 2 [(a-b) )6
-----+1-1
[(cd )
Where:
a = dividends and interest earned during the period.
b = expenses accrued for the period (net of reimbursements).
c = the average daily number of shares outstanding during the
period that were entitled to receive dividends
d = the offering price (net asset value) per share on the last day of the
period.
The yield for the 30-day period ended December 31, 1996, for each of the
referenced Series was as follows:
PPM America/JNL Balanced Series 1.90%
PPM America/JNL High Yield Bond Series 8.95%
Salomon Brothers/JNL U.S. Government and Quality 6.06%
Bond Series
Prior to May 1, 1997, the PPM America/JNL Balanced Series was the JNL/Phoenix
Investment Counsel Balanced Series and was sub-advised by Phoenix Investment
Counsel, Inc.
In computing the foregoing yield, the Series follow certain standardized
accounting practices specified by SEC rules. These practices are not
necessarily consistent with those that the Series use to prepare annual and
interim financial statements in accordance with generally accepted accounting
principles.
The PPM America/JNL Money Market Series' yield is also computed in
accordance with a standardized method prescribed by rules of the SEC. Under
that method, the current yield quotation is based on a seven-day period and is
computed as follows. The first calculation is net investment income per share;
which is accrued interest on portfolio securities, plus or minus amortized
discount or premium, less accrued expenses. This number is then divided by the
price per share (expected to remain constant at $1.00) at the beginning of the
period ("base period return"). The result is then divided by 7 and multiplied
by 365 and the resulting yield figure is carried to the nearest one-hundredth of
one percent. Realized capital gains or losses and unrealized appreciation or
depreciation of investments are not included in the calculation. The PPM
America/JNL Money Market Series' yield for the seven-day period ended December
31, 1996 was 4.77%.
The PPM America/JNL Money Market Series' effective yield is determined by
taking the base period return (computed as described above) and calculating the
effect of assumed compounding. The formula for the effective yield is: (base
period return + 1)(365/7) - 1. The
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<PAGE> 62
PPM America/JNL Money Market Series'effective yield for the seven-day period
ended December 31, 1996 was 4.89%.
A Series' performance quotations are based upon historical results and are
not necessarily representative of future performance. The Series' shares are
sold at net asset value. Returns and net asset value will fluctuate, except
that the PPM America/JNL Money Market Series seeks to maintain a $1.00 net
asset value per share. Factors affecting a Series' performance include general
market conditions, operating expenses and investment management. Shares of a
Series are redeemable at the then current net asset value, which may be more or
less than original cost.
The performance of the Series may be compared to various other selected
recognized market indicators. There are differences and similarities between
the investments which a Series may purchase and the investments measured by the
market indicators. Each Series may compare its performance to one or more of
the Consumer Price Index, the Standard & Poor's 500 Index, the Standard &
Poor's MidCap 400 Index, the Morgan Stanley Capital International World Index,
the Lehman Brothers Aggregate Bond Index, the Lehman Brothers High Yield Index,
the Salomon Brothers Broad Investment Grade Index, the Salomon Brothers
Treasury Index, the Russell 2000 Index, or the Morgan Stanley Europe and
Australasia, Far East Equity Index The foregoing bond indexes are unmanaged.
The market prices and yields of corporate and government bonds will fluctuate.
Lipper and CDA are widely recognized independent mutual fund reporting
services. Lipper and CDA indexes are weighted performance averages of other
mutual funds with similar investment objectives. The net asset values and
returns of the Series will also fluctuate. No adjustments are made for taxes
payable on dividends.
A Series may periodically advertise tax-deferred compounding charts and
other hypothetical illustrations.
INVESTMENT ADVISER AND OTHER SERVICES
JNFSI, 5901 Executive Drive, Lansing, Michigan 48911, is the investment
adviser of each Series and provides each Series with professional investment
supervision and management. JNFSI is a wholly-owned subsidiary of Jackson
National Life Insurance Company, which is in turn wholly-owned by Prudential
Corporation plc, the largest life insurance company in the United Kingdom.
JNFSI provides, preparation of financial statements, tax services and
regulatory reports.
Pursuant to an Amended Investment Advisory and Management Agreement, JNFSI
acts as the Trust's investment adviser, administers its business affairs,
furnishes office facilities and equipment, provides clerical, bookkeeping and
administrative services, and permits any of its officers or employees to serve
without compensation as trustees or officers of the Trust if elected to such
positions. The Amended Investment Advisory and Management Agreement continues
in effect for each Series from year to year after its initial two-year term so
long as its continuation is approved at least annually by (i) a majority of the
Trustees who are not parties to such agreement or interested persons of any
such party except in their capacity as Trustees of the
15
<PAGE> 63
Trust, and (ii) the shareholders of each Series or the Board of Trustees.
It may be terminated at any time upon 60 days notice by either party, or by a
majority vote of the outstanding shares of a Series with respect to that Series,
and will terminate automatically upon assignment. Additional Series may be
subject to a different agreement. The Amended Investment Advisory and
Management Agreement provides that JNFSI shall not be liable for any error of
judgment, or for any loss suffered by the Series in connection with the matters
to which the agreement relates, except a loss resulting from willful
misfeasance, bad faith or gross negligence on the part of JNFSI in the
performance of its obligations and duties, or by reason of its reckless
disregard of its obligations and duties under the agreement. As compensation
for its services, the Trust pays JNFSI a fee as described in the Prospectus.
The fees paid by the Trust to JNFSI pursuant to the Amended Investment Advisory
and Management Agreement from the commencement of operations to March 31, 1996
were $701,004 and from April 1, 1996 to December 31, 1996 were $1,884,328.
In addition to providing the services described above JNFSI selects,
contracts with and compensates sub-advisers to manage the investment and
reinvestment of the assets of the Series of the Trust. JNFSI monitors the
compliance of such sub-advisers with the investment objectives and related
policies of each Series and reviews the performance of such sub-advisers and
reports periodically on such performance to the Trustees of the Trust.
Janus Capital Corporation ("Janus Capital") serves as sub-adviser for the
JNL Capital Growth, JNL Aggressive Growth and JNL Global Equities Series; Fred
Alger Management, Inc. ("Alger Management") serves as sub-adviser for the
JNL/Alger Growth Series; Eagle Asset Management, Inc. ("Eagle") serves as
sub-adviser to the JNL/Eagle Core Equity Series and the JNL/Eagle SmallCap
Equity Series; PPM America, Inc. ("PPM") serves as sub-adviser for the PPM
America/JNL Balanced, PPM America/JNL High Yield Bond, and PPM America/JNL
Money Market Series; Putnam Investment Management, Inc. serves as sub-adviser
to the JNL/Putnam Growth and JNL/Putnam Value Equity Series; Salomon Brothers
Asset Management Inc ("SBAM") serves as sub-adviser for the Salomon
Brothers/JNL U.S. Government & Quality Bond and Salomon Brothers/JNL Global
Bond Series; T. Rowe Price Associates, Inc. ("T. Rowe") serves as sub-adviser
for the T. Rowe Price/JNL Established Growth and T. Rowe Price/JNL Mid-Cap
Growth Series; and Rowe Price-Fleming International, Inc. ("Price-Fleming")
serves as sub-adviser for the T. Rowe Price/JNL International Equity Investment
Series. Prior to May 1, 1997, the PPM America/JNL Balanced Series was the
JNL/Phoenix Investment Counsel Balanced Series and was sub-advised by Phoenix
Investment Counsel Inc., the JNL/Putnam Growth Series was the JNL/Phoenix
Investment Counsel Growth Series and was sub-advised by Phoenix Investment
Counsel, Inc., and the JNL/Putnam Value Equity Series was the PPM America/JNL
Value Equity Series and was sub-advised by PPM.
Subject to the supervision of JNFSI and the Trustees pursuant to
investment sub-advisory agreements entered into between JNFSI and each of the
sub-advisers, respectively, the sub-advisers invest and reinvest the Series'
assets consistent with the Series' respective investment objectives and
policies. The investment sub-advisory agreement continues in effect for each
Series from year to year after its initial two-year term so long as its
continuation is approved at least annually by a majority of the Trustees who
are not parties to such agreement or interested
16
<PAGE> 64
persons of any such party except in their capacity as Trustees of the
Series and by the shareholders of each Series or the Board of Trustees. It may
be terminated at any time upon 60 days notice by either party, or by a majority
vote of the outstanding shares of a Series with respect to that Series, and will
terminate automatically upon assignment or upon the termination of the
investment management agreement between JNFSI and the Series. Additional Series
may be subject to a different agreement. The sub-advisers are responsible for
compliance with or have agreed to use their best efforts to manage the Series to
comply with the provisions of Section 817(h) of the Internal Revenue Code of
1986, as amended, applicable to each Series (relating to the diversification
requirements applicable to investments in underlying variable annuity
contracts).
The Trust pays the compensation of the Trustees who are not affiliated
with JNFSI and all expenses (other than those assumed by JNFSI), including
governmental fees, interest charges, taxes, membership dues in certain industry
associations allocable to the Trust, fees and expenses of independent certified
public accountants, legal counsel, and any transfer agent, registrar, and
dividend disbursing agent of the Trust, expenses of preparing, printing, and
mailing shareholders' reports, notices, proxy statements, and reports to
governmental offices and commissions, expenses connected with the execution,
recording, and settlement of portfolio security transactions, insurance
premiums, fees and expenses of the custodian for all services to the Trust and
expenses of calculating the net asset value of shares of the Trust, and
expenses relating to the issuance, registration, and qualification of shares of
the Trust.
CUSTODIAN AND TRANSFER AGENT
State Street Bank and Trust Company ("State Street"), 1776 Heritage Drive,
North Quincy, Massachusetts 02171, acts as custodian for each Series of the
Trust. The custodian has custody of all securities and cash of the Trust
maintained in the United States and attends to the collection of principal and
income and payment for and collection of proceeds of securities bought and sold
by the Trust.
State Street is the transfer agent and dividend-paying agent for each
Series of the Trust.
INDEPENDENT ACCOUNTANTS
The Series' independent accountants, Price Waterhouse LLP, 100 East
Wisconsin Avenue, Milwaukee, Wisconsin 53202, audit and report on the Series'
annual financial statements, prepare the Series' federal income and excise tax
returns, and perform other professional accounting, auditing and advisory
services when engaged to do so by the Series.
SERIES TRANSACTIONS AND BROKERAGE
The primary consideration in portfolio security trans execution," i.e.,
execution at the most favorable prices a effective manner possible. JNFSI and
the sub-advisers always achieve best execution and have complete freedom as to
the
17
<PAGE> 65
markets in and the broker/dealers through which they seek this result.
Subject to the requirement of seeking best execution, securities may be bought
from or sold to broker/dealers who have furnished statistical, research, and
other information or services to JNFSI or the sub-advisers. In placing orders
with such broker/dealers, JNFSI and the sub-advisers will, where possible, take
into account the comparative usefulness of such information. Such information
is useful to JNFSI and the sub-advisers even though its dollar value may be
indeterminable and its receipt or availability generally does not reduce JNFSI's
or the sub-advisers' normal research activities or expenses.
Trust portfolio transactions may be effected with broker/dealers who have
assisted investors in the purchase of policies. However, neither such
assistance nor sale of other investment company shares is a qualifying or
disqualifying factor in a broker/dealer's selection, nor is the selection of
any broker/dealer based on the volume of shares sold.
There may be occasions when portfolio transactions for the Trust are
executed as part of concurrent authorizations to purchase or sell the same
security for trusts or other accounts served by affiliated companies of JNFSI
or the sub-advisers. Although such concurrent authorizations potentially could
be either advantageous or disadvantageous to the Trust, they are effected only
when JNFSI and the sub-advisers believe that to do so is in the interest of the
Trust. When such concurrent authorizations occur the executions will be
allocated in an equitable manner.
During the periods indicated, the Series paid the following amounts in
brokerage commissions:
<TABLE>
<CAPTION>
April 1, 1996 to Commencement of
December 31, 1996* Operations to
March 31, 1996
<S> <C> <C>
JNL Aggressive Growth Series** $16,981 $19,654
JNL Capital Growth Series** 34,515 16,905
JNL Global Equities Series** 47,800 72,359
JNL/Alger Growth Series*** 22,155 9,414
JNL/Eagle Core Equity Series**** 1,785 N/A
JNL/Eagle SmallCap Equity Series**** 4,389 N/A
JNL/Putnam Growth Series** 33,185 8,008
JNL/Putnam Value Equity Series** 3,587 2,888
PPM America/JNL Balanced Series** 17,054 5,077
PPM America/JNL High Yield Bond Series** 500 0
PPM America/JNL Money Market Series** 0 0
Salomon Brothers/JNL Global Bond Series** 0 1,399
Salomon Brothers/JNL U.S. Government and Quality Bond
Series** 0 0
T. Rowe Price/JNL Established Growth Series** 5,706 20,293
</TABLE>
18
<PAGE> 66
<TABLE>
<CAPTION>
<S> <C> <C>
T. Rowe Price/JNL International Equity Investment Series** 17,105 63,341
T. Rowe Price/JNL Mid-Cap Growth Series** 19,868 25,663
</TABLE>
*The JNL Series Trust changed its fiscal year end from March 31 to December 31.
**Commenced operations on May 15, 1995.
***Commenced operations on October 16, 1995.
****Commenced operations on September 16, 1996.
Prior to May 1, 1997, the PPM America/JNL Balanced Series was the JNL/Phoenix
Investment Counsel Balanced Series and was sub-advised by Phoenix Investment
Counsel Inc., the JNL/Putnam Growth Series was the JNL/Phoenix Investment
Counsel Growth Series and was sub-advised by Phoenix Investment Counsel, Inc.,
and the JNL/Putnam Value Equity Series was the PPM America/JNL Value Equity
Series and was sub-advised by PPM.
As of December 31, 1996, the following Series owned securities of, one of
the Trust's regular broker/dealers:
<TABLE>
<CAPTION>
Amount of Securities
Series Broker/Dealer Owned
- ------------------------------- --------------------- ------------------------
<S> <C> <C>
JNL Aggressive Growth Series Chase Manhattan Corp. $301,219
JNL/Alger Growth Series Chase Manhattan Corp. $803,250
JNL/Eagle Core Equity Series Chase Manhattan Corp. $ 35,700
JNL/Putnam Growth Series Chase Manhattan Corp. $321,300
JNL/Putnam Value Equity Series Chase Manhattan Corp. $339,150
PPM America/JNL Balanced Series Chase Manhattan Corp. $116,025
</TABLE>
PURCHASES, REDEMPTIONS AND PRICING OF SHARES
An insurance company or certain tax qualified retirement plans may
purchase shares of the Series at their net asset value. For an insurance
company, shares are purchased using premiums received on policies issued by
separate accounts. These separate accounts are funded by shares of the Trust.
19
<PAGE> 67
All investments in the Trust are credited to the shareholder's account in
the form of full and fractional shares of the designated Series (rounded to the
nearest 1/1000 of a share). The Trust does not issue share certificates.
As stated in the Prospectus, the net asset value ("NAV") of Series shares
is determined once each day on which the New York Stock Exchange (the "NYSE")
is open ("Business Day") at the close of the regular trading session of the
Exchange (normally 4:00 p.m., Eastern Time, Monday through Friday). The NAV of
Series shares is not determined on the days the NYSE is closed, which days
generally are New Year's Day, President's Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving and Christmas. The per share NAV of
a Series is determined by dividing the total value of the securities and other
assets, less liabilities, by the total number of shares outstanding. In
determining NAV, securities listed on the national securities exchanges, the
NASDAQ National Market and foreign markets are valued at the closing prices on
such markets, or if such price is lacking for the trading period immediately
preceding the time of determination, such securities are valued at their
current bid price. Securities that are traded on the over-the-counter market
are valued at their closing bid prices. Foreign securities and currencies are
converted to U.S. dollars using exchange rates in effect at the time of
valuation. A Series will determine the market value of individual securities
held by it, by using prices provided by one or more professional pricing
services which may provide market prices to other funds, or, as needed, by
obtaining market quotations from independent broker-dealers. Short-term money
market securities maturing within 60 days are valued on the amortized cost
basis. Securities for which quotations are not readily available, and other
assets, are valued at fair values determined in good faith under procedures
established by and under the supervision of the Trustees.
Trading in securities on European and Far Eastern securities exchanges and
over-the-counter markets is normally completed well before the close of
business on each Business Day. In addition, European and Far Eastern securities
trading generally or in a particular country or countries may not take place on
all Business Days. Furthermore, trading takes place in Japanese markets on
certain Saturdays and in various foreign markets on days which are not Business
Days and on which a Series' net asset value is not calculated. A Series
calculates net asset value per share, and therefore effects sales, redemptions
and repurchases of its shares, as of the close of the NYSE once on each day on
which the NYSE is open. Such calculation does not take place contemporaneously
with the determination of the prices of the majority of the foreign portfolio
securities used in such calculation.
For the PPM America/JNL Money Market Series, securities are valued at
amortized cost, which approximates market value, in accordance with Rule 2a-7
under the Investment Company Act of 1940. The net income of the PPM
America/JNL Money Market Series is determined once each day, on which the NYSE
is open, at the close of the regular trading session of the NYSE (normally 4:00
p.m., Eastern time, Monday through Friday). All the net income of the Series,
so determined, is declared in shares as a dividend to shareholders of record at
the time of such determination. Shares purchased become entitled to dividends
declared as of the first day following the date of investment. Dividends are
distributed in the form of additional shares of
20
<PAGE> 68
the Series on the last business day of each month at the rate of one share (and
fraction thereof) of the Series for each one dollar (and fraction thereof) of
dividend income.
For this purpose, the net income of the PPM America/JNL Money Market
Series (from the time of the immediately preceding determination thereof) shall
consist of: (a) all interest income accrued on the portfolio assets of the
Series, (b) less all actual and accrued expenses, and (c) plus or minus net
realized gains and losses on the assets of the Series determined in accordance
with generally accepted accounting principles. Interest income shall include
discount earned (including both original issue and market discount) on discount
paper accrued ratably to the date of maturity. Securities are valued at market
or amortized cost which approximates market, which the Trustees have determined
in good faith constitutes fair value for the purposes of complying with the
Investment Company Act of 1940.
Because the net income of the PPM America/JNL Money Market Series is
declared as a dividend each time the net income is determined, the net asset
value per share (i.e., the value of the net assets of the Series divided by the
number of shares outstanding) remains at one dollar per share immediately after
each such determination and dividend declaration. Any increase in the value of
a shareholder's investment in the Series, representing the reinvestment of
dividend income, is reflected by an increase in the number of shares of the
Series in its account. Pursuant to its objective of maintaining a fixed one
dollar share price, the Series will not purchase securities with a remaining
maturity of more than 397 days and will maintain a dollar weighted average
portfolio maturity of 90 days or less.
The Trust may suspend the right of redemption for any Series only under
the following unusual circumstances: (a) when the New York Stock Exchange is
closed (other than weekends and holidays) or trading is restricted; (b) when an
emergency exists, making disposal of portfolio
securities or the valuation of net assets not reasonably practicable; or (c)
during any period when the Securities and Exchange Commission has by order
permitted a suspension of redemption for the protection of shareholders.
ADDITIONAL INFORMATION
DESCRIPTION OF SHARES - The Declaration of Trust permits the Trustees to
issue an unlimited number of full and fractional shares of beneficial interest
of each Series and to divide or combine such shares into a greater or lesser
number of shares without thereby changing the proportionate beneficial
interests in the Trust. Each share of a Series represents an equal
proportionate interest in that Series with each other share. The Trust
reserves the right to create and issue a number of Series of shares. In that
case, the shares of each Series would participate equally in the earnings,
dividends, and assets of the particular Series. Upon liquidation of a Series,
shareholders are entitled to share pro rata in the net assets of such Series
available for distribution to shareholders.
VOTING RIGHTS - Shareholders are entitled to one vote for each share held.
Shareholders may vote in the election of Trustees and on other matters
submitted to meetings of shareholders.
21
<PAGE> 69
No amendment may be made to the Declaration of Trust without the affirmative
vote of a majority of the outstanding shares of the Trust. The Trustees may,
however, amend the Declaration of Trust without the vote or consent of
shareholders to:
- designate Series of the Trust; or
- change the name of the Trust; or
- supply any omission, cure, correct, or supplement any ambiguous,
defective, or inconsistent provision to conform the Declaration of
Trust to the requirements of applicable federal or state regulations
if they deem it necessary.
Shares have no pre-emptive or conversion rights. Shares are fully paid
and non-assessable, except as set forth in the prospectus. In regard to
termination, sale of assets, or change of investment restrictions, the right to
vote is limited to the holders of shares of the particular Series affected by
the proposal. When a majority is required, it means the lesser of 67% or more
of the shares present at a meeting when the holders of more than 50% of the
outstanding shares are present or represented by proxy, or more than 50% of the
outstanding shares.
SHAREHOLDER INQUIRIES - All inquiries regarding the Trust should be
directed to the Trust at the telephone number or address shown on the cover
page of the Prospectus.
TAX STATUS
The Trust's policy is to meet the requirements of Subchapter M of the
Internal Revenue Code. Each Series intends to distribute taxable net
investment income and capital gains to shareholders in amounts that will avoid
federal income or excise tax. In addition, each Series intends to comply with
the diversification requirements of Code Section 817(h) related to the
tax-deferred status of insurance company separate accounts.
All income, dividends, and capital gains distributions, if any, on Series
shares are reinvested automatically in additional shares of the Series at the
NAV determined on the first Business Day following the record date, unless
otherwise requested by a shareholder.
Each Series of the Trust is treated as a separate entity for purpose of
the regulated investment company provisions of the Internal Revenue Code and,
therefore, the assets, income, and distributions of each Series are considered
separately for purposes of determining whether or not the Series qualifies as a
regulated investment company.
22
<PAGE> 70
JNL SERIES TRUST
FINANCIAL STATEMENTS
23
<PAGE> 71
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders and Board of Trustees of
JNL Series Trust
In our opinion, the accompanying statements of assets and liabilities,
including the schedules of investments, and the related statements of operations
and of changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of the JNL Aggressive Growth Series,
JNL Capital Growth Series, JNL Global Equities Series, JNL/Alger Growth Series,
JNL/Eagle Core Equity Series, JNL/Eagle SmallCap Equity Series, JNL/Phoenix
Investment Counsel Balanced Series, JNL/Phoenix Investment Counsel Growth
Series, PPM America/JNL High Yield Bond Series, PPM America/JNL Money Market
Series, PPM America/JNL Value Equity Series, Salomon Brothers/JNL Global Bond
Series, Salomon Brothers/JNL U.S. Government & Quality Bond Series, T. Rowe
Price/JNL Established Growth Series, T. Rowe Price/JNL International Equity
Investment Series and T. Rowe Price/JNL Mid-Cap Growth Series (constituting JNL
Series Trust, hereafter referred to as the "Trust") at December 31, 1996, and
the results of each of their operations, changes in each of their net assets and
the financial highlights for the periods indicated, in conformity with generally
accepted accounting principles. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Trust's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at December 31, 1996 by
correspondence with the custodians and brokers and the application of
alternative auditing procedures where confirmations from brokers were not
received, provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
Milwaukee, Wisconsin
February 14, 1997
17
<PAGE> 72
JNL SERIES TRUST
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1996
<TABLE>
<CAPTION>
JNL/PHOENIX
JNL JNL/EAGLE JNL/EAGLE INVESTMENT
AGGRESSIVE JNL CAPITAL JNL GLOBAL JNL/ALGER CORE SMALLCAP COUNSEL
GROWTH GROWTH EQUITIES GROWTH EQUITY EQUITY BALANCED
SERIES SERIES SERIES SERIES SERIES SERIES SERIES
----------- ----------- ----------- ----------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments in securities, at
cost............................ $28,034,841 $34,996,580 $42,282,196 $34,475,613 $1,716,644 $1,603,053 $23,665,613
=========== =========== =========== =========== ========== ========== ===========
Investments in securities, at
value........................... $29,870,628 $37,622,915 $48,919,581 $38,140,297 $1,796,373 $1,816,762 $24,279,702
Cash.............................. 52,939 85,390 29,133 -- 200,612 288,068 --
Foreign currency.................. -- 167,261 103,663 -- -- -- --
Receivables:
Dividends and interest.......... 5,869 964 37,956 30,860 2,342 455 94,610
Forward foreign currency
exchange contracts............ 1,310,318 1,577,985 7,119,501 -- -- -- --
Foreign taxes recoverable....... 1,100 2,522 15,309 -- -- -- --
Fund shares sold................ 277,666 273,586 300,349 167,463 -- -- 104,931
Investment securities sold...... 76,634 983,969 272,901 424,266 1,042 -- --
Reimbursements from Advisor..... -- -- 29,212 -- 4,995 4,381 --
Prepaid expenses.................. -- -- -- -- -- -- --
----------- ----------- ----------- ----------- ---------- ---------- -----------
TOTAL ASSETS...................... 31,595,154 40,714,592 56,827,605 38,762,886 2,005,364 2,109,666 24,479,243
----------- ----------- ----------- ----------- ---------- ---------- -----------
LIABILITIES
Payables:
Advisor......................... 30,608 33,921 41,135 42,247 1,401 1,374 20,342
Custodian foreign currency
overdraft..................... 16,829 -- -- -- -- -- --
Custodian overdraft............. -- -- -- -- -- -- 3,563
Forward foreign currency
exchange contracts............ 1,314,817 1,655,680 6,981,532 -- -- -- --
Dividends to shareholders....... 117,769 16,204 603,988 -- 2,707 -- 13,449
Fund shares redeemed............ 357,911 3,665 360,582 2,127 34 30 1,099
Investment securities
purchased..................... 181,141 2,041,254 159,458 449,595 35,152 154,312 3,630
Options written, at value
(premiums received $1,043)...... -- -- -- -- 1,500 -- --
Accrued expenses and other
liabilities..................... 21,434 17,717 42,436 16,826 10,373 9,861 18,583
----------- ----------- ----------- ----------- ---------- ---------- -----------
TOTAL LIABILITIES................. 2,040,509 3,768,441 8,189,131 510,795 51,167 165,577 60,666
----------- ----------- ----------- ----------- ---------- ---------- -----------
NET ASSETS........................ $29,554,645 $36,946,151 $48,638,474 $38,252,091 $1,954,197 $1,944,089 $24,418,577
=========== =========== =========== =========== ========== ========== ===========
NET ASSETS CONSIST OF:
Paid-in capital................. $27,767,559 $34,446,324 $42,036,466 $35,287,986 $1,879,352 $1,739,717 $23,173,657
Undistributed net investment
income........................ 7,694 133,876 (149,359) -- -- -- 2,086
Accumulated net realized gain
(loss) on investments and
foreign currency related
items......................... (52,362) (188,152) (27,229) (700,579) (4,427) (9,337) 628,745
Net unrealized appreciation
(depreciation) on:
Investments................... 1,835,787 2,626,335 6,637,385 3,664,684 79,729 213,709 614,089
Foreign currency related
items....................... (4,033) (72,232) 141,211 -- -- -- --
Options written............... -- -- -- -- (457) -- --
----------- ----------- ----------- ----------- ---------- ---------- -----------
NET ASSETS........................ $29,554,645 $36,946,151 $48,638,474 $38,252,091 $1,954,197 $1,944,089 $24,418,577
=========== =========== =========== =========== ========== ========== ===========
TOTAL SHARES OUTSTANDING (NO PAR
VALUE), UNLIMITED SHARES
AUTHORIZED...................... 2,208,950 2,555,038 3,199,648 3,428,898 184,058 168,506 2,049,217
=========== =========== =========== =========== ========== ========== ===========
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE...... $13.38 $14.46 $15.20 $11.16 $10.62 $11.54 $11.92
=========== =========== =========== =========== ========== ========== ===========
</TABLE>
See notes to the financial statements.
18
<PAGE> 73
<TABLE>
<CAPTION>
SALOMON T. ROWE
JNL/PHOENIX PPM PPM PPM SALOMON BROTHERS/JNL T. ROWE PRICE/JNL
INVESTMENT AMERICA/JNL AMERICA/JNL AMERICA/JNL BROTHERS/JNL U.S. PRICE/JNL INTERNATIONAL
COUNSEL HIGH YIELD MONEY VALUE GLOBAL GOVERNMENT ESTABLISHED EQUITY
GROWTH BOND MARKET EQUITY BOND & QUALITY BOND GROWTH INVESTMENT
SERIES SERIES SERIES SERIES SERIES SERIES SERIES SERIES
----------- ----------- ----------- ----------- ------------ -------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$23,800,643 $13,109,087 $23,003,245 $16,392,155 $13,370,742 $11,866,620 $28,994,231 $42,636,723
============ ============== ============ ============ ============ ============== ============ ============
$24,090,991 $13,523,037 $23,003,245 $18,343,250 $13,574,106 $11,916,401 $32,988,888 $47,770,591
10,359 -- -- -- -- -- -- --
-- -- -- -- -- -- 532 548,170
18,717 292,496 31 36,625 240,675 115,022 30,238 87,212
-- -- -- -- 5,599,964 -- -- --
272 -- -- -- -- -- 464 36,889
256,232 253,885 783,413 110,290 58,862 26,556 212,122 170,174
1,206,353 1,300 -- -- -- -- -- 11,116
3,965 -- -- 11,144 15 -- 5,058 --
-- 813 227 -- -- -- 3,747 --
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
25,586,889 14,071,531 23,786,916 18,501,309 19,473,622 12,057,979 33,241,049 48,624,152
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
16,199 8,431 11,965 10,663 9,100 5,537 22,257 45,096
-- -- -- -- 2,416 -- -- --
-- -- -- -- -- -- -- --
-- -- -- -- 5,615,570 -- -- --
17,634 31,405 8,194 11,867 164,436 18,716 48,622 261,424
912 1,691 843 39,394 73,501 3,845 28,431 4,756
2,731,642 615,535 -- 661,506 1,102,544 2,184,744 833,185 72,609
16,987 18,073 13,727 17,201 23,112 13,397 17,613 35,938
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
2,783,374 675,135 34,729 740,631 6,990,679 2,226,239 950,108 419,823
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
$22,803,515 $13,396,396 $23,752,187 $17,760,678 $12,482,943 $ 9,831,740 $32,290,941 $48,204,329
============ ============== ============ ============ ============ ============== ============ ============
$21,854,859 $12,806,840 $23,752,187 $15,672,149 $12,212,887 $ 9,772,004 $28,335,681 $42,985,389
-- 6,041 -- 5,272 24,906 -- (3,896) 65,539
658,308 169,565 -- 132,162 57,447 9,955 (35,557) 16,473
290,348 413,950 -- 1,951,095 203,364 49,781 3,994,657 5,133,868
-- -- -- -- (15,661) -- 56 3,060
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
$22,803,515 $13,396,396 $23,752,187 $17,760,678 $12,482,943 $ 9,831,740 $32,290,941 $48,204,329
============ ============== ============ ============ ============ ============== ============ ============
1,604,348 1,255,147 23,752,187 1,225,273 1,174,127 963,480 2,571,210 3,989,593
============ ============== ============ ============ ============ ============== ============ ============
$14.21 $10.67 $1.00 $14.50 $10.63 $10.20 $12.56 $12.08
============ ============== ============ ============ ============ ============== ============ ============
<CAPTION>
T. ROWE
PRICE/JNL
MID-CAP
GROWTH
SERIES
---------
<S> <C>
$42,772,841
===========
$47,883,620
==
12,339
--
314
280,259
115,264
806
--
-----------
48,292,602
-----------
35,547
==
--
53,574
2,647
1,075,875
20,470
-----------
1,188,113
-----------
$47,104,489
===========
$42,010,676
(301)
(16,665)
5,110,779
--
-----------
$47,104,489
===========
===========
===========
</TABLE>
19
<PAGE> 74
JNL SERIES TRUST
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED DECEMBER 31, 1996*
<TABLE>
<CAPTION>
JNL/PHOENIX
JNL JNL JNL JNL/ JNL/EAGLE INVESTMENT
AGGRESSIVE CAPITAL GLOBAL JNL/ALGER EAGLE CORE SMALLCAP COUNSEL
GROWTH GROWTH EQUITIES GROWTH EQUITY EQUITY BALANCED
SERIES SERIES SERIES SERIES SERIES* SERIES* SERIES
---------- ------- -------- --------- ---------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends............................ $ 68,842 $ 276,523 $ 270,951 $ 121,872 $ 8,749 $ 2,525 $ 65,313
Interest............................. 221,102 83,548 128,161 99,498 328 753 335,923
Foreign tax withholding.............. (2,804) (2,253) (23,275) -- (4) -- (274)
-------- ---------- ---------- ---------- -------- -------- ----------
TOTAL INVESTMENT INCOME................ 287,140 357,818 375,837 221,370 9,073 3,278 400,962
-------- ---------- ---------- ---------- -------- -------- ----------
EXPENSES
Investment advisory fees............. 145,930 169,538 247,941 195,472 3,785 3,709 104,754
Custodian fees....................... 38,301 25,104 117,996 11,344 1,040 537 9,088
Transfer agent fees.................. 1,266 1,266 1,266 1,066 -- -- 1,066
Portfolio accounting fees............ 3,438 3,516 3,749 2,866 -- -- 2,479
Registration fees.................... 58 118 88 99 322 322 50
Professional fees.................... 18,559 18,558 24,358 19,258 12,862 12,862 19,258
Trustee fees......................... 1,357 1,362 1,357 1,357 440 440 1,356
Other................................ 7,023 7,594 8,003 8,079 851 851 4,916
-------- ---------- ---------- ---------- -------- -------- ----------
TOTAL EXPENSES......................... 215,932 227,056 404,758 239,541 19,300 18,721 142,967
Less:
Reimbursement from Advisor........... (45,898) (29,898) (118,829) (4,467) (14,884) (14,426) (20,493)
Fees paid indirectly................. (2,234) (2,641) (2,093) (10,114) -- -- (839)
-------- ---------- ---------- ---------- -------- -------- ----------
NET EXPENSES........................... 167,800 194,517 283,836 224,960 4,416 4,295 121,635
-------- ---------- ---------- ---------- -------- -------- ----------
NET INVESTMENT INCOME (LOSS)........... 119,340 163,301 92,001 (3,590) 4,657 (1,017) 279,327
-------- ---------- ---------- ---------- -------- -------- ----------
REALIZED AND UNREALIZED GAINS (LOSSES)
Net realized gain (loss) on:
Investments.......................... 602,416 (221,942) 1,196,113 (523,886) (4,427) (9,337) 933,110
Foreign currency related items....... 9,765 28,945 (2,943) -- -- -- --
Net change in unrealized appreciation
(depreciation) on:
Investments........................ 999,505 872,041 4,236,085 3,281,071 79,272 213,709 476,858
Foreign currency related items..... (4,062) (71,967) 128,253 -- -- -- --
-------- ---------- ---------- ---------- -------- -------- ----------
NET REALIZED AND UNREALIZED GAIN
(LOSS)............................... 1,607,624 607,077 5,557,508 2,757,185 74,845 204,372 1,409,968
-------- ---------- ---------- ---------- -------- -------- ----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS...................... $1,726,964 $ 770,378 $5,649,509 $2,753,595 $ 79,502 $203,355 $1,689,295
======== ========== ========== ========== ======== ======== ==========
</TABLE>
- -------------------------
* For period beginning September 16, 1996, commencement of operations, for
JNL/Eagle Core Equity Series and JNL/Eagle SmallCap Equity Series.
See notes to the financial statements.
20
<PAGE> 75
<TABLE>
<CAPTION>
T. ROWE
JNL/PHOENIX PPM SALOMON T. ROWE PRICE/JNL
INVESTMENT PPM AMERICA/JNL PPM SALOMON BROTHERS/JNL PRICE/JNL INTERNATIONAL
COUNSEL AMERICA/JNL MONEY AMERICA/JNL BROTHERS/JNL U.S. GOVERNMENT ESTABLISHED EQUITY
GROWTH HIGH YIELD MARKET VALUE EQUITY GLOBAL BOND & QUALITY BOND GROWTH INVESTMENT
SERIES BOND SERIES SERIES SERIES SERIES SERIES SERIES SERIES
----------- ----------- ----------- ------------ ------------ --------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 72,873 $ 4,681 $ -- $ 235,569 $ -- $ -- $ 196,524 $ 568,552
96,978 758,156 711,067 3,240 651,374 330,690 60,800 111,792
(640) (502) -- -- (878) -- (6,107) (46,836)
-------- ---------- ---------- ---------- -------- -------- ----------
169,211 762,335 711,067 238,809 650,496 330,690 251,217 633,508
-------- ---------- ---------- ---------- -------- -------- ----------
76,618 59,890 77,345 56,818 64,789 35,080 133,940 297,941
4,983 7,083 8,291 31,960 11,067 7,581 10,126 15,444
1,066 1,066 1,065 1,066 1,166 1,266 1,266 1,266
1,080 2,458 2,457 2,479 3,196 2,747 3,443 3,883
50 99 75 24 77 37 195 77
18,358 21,457 17,058 18,358 24,858 18,159 18,957 24,858
1,356 1,356 1,356 1,356 1,357 1,357 1,357 1,357
5,164 3,443 2,722 4,245 3,491 2,683 6,426 6,200
-------- ---------- ---------- ---------- -------- -------- ----------
108,675 96,852 110,369 116,306 110,001 68,910 175,710 351,026
(19,190) (24,657) (13,678) (46,993) (33,688) (26,313) (18,006) (12,467)
(562) (1,626) (115) (4,967) (515) (221) (266) --
-------- ---------- ---------- ---------- -------- -------- ----------
88,923 70,569 96,576 64,346 75,798 42,376 157,438 338,559
-------- ---------- ---------- ---------- -------- -------- ----------
80,288 691,766 614,491 174,463 574,698 288,314 93,779 294,949
-------- ---------- ---------- ---------- -------- -------- ----------
1,130,393 217,828 -- 299,700 275,846 29,022 93,499 203,836
-- -- -- -- 57,170 -- (12,360) 25,484
152,651 383,145 -- 1,455,960 178,039 82,805 3,384,049 2,679,873
-- -- -- -- (21,421) -- 44 2,709
-------- ---------- ---------- ---------- -------- -------- ----------
1,283,044 600,973 -- 1,755,660 489,634 111,827 3,465,232 2,911,902
-------- ---------- ---------- ---------- -------- -------- ----------
$1,363,332 $1,292,739 $614,491 $1,930,123 $1,064,332 $400,141 $3,559,011 $3,206,851
======== ========== ========== ========== ======== ======== ==========
<CAPTION>
T. ROWE
PRICE/JNL
MID-CAP
GROWTH
SERIES
---------
<S> <C>
$ 72,375
132,476
(234)
204,617
210,778
10,199
1,066
3,376
99
19,258
1,356
8,667
254,799
(10,714)
(123)
243,962
(39,345)
750,795
(3)
3,708,604
--
4,459,396
$4,420,051
</TABLE>
21
<PAGE> 76
JNL SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
JNL AGGRESSIVE JNL CAPITAL JNL GLOBAL
GROWTH SERIES GROWTH SERIES EQUITIES SERIES
--------------------------- --------------------------- ---------------------------
PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM
APRIL 1, MAY 15, APRIL 1, MAY 15, APRIL 1, MAY 15,
1996 TO 1995* 1996 TO 1995* 1996 TO 1995*
DECEMBER 31, TO MARCH 31, DECEMBER 31, TO MARCH 31, DECEMBER 31, TO MARCH 31,
1996 1996 1996 1996 1996 1996
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................... $ 119,340 $ 14,650 $ 163,301 $ (27,120) $ 92,001 $ 41,731
Net realized gain (loss)
on:
Investments.............. 602,416 1,017,633 (221,942) 822,061 1,196,113 1,904,209
Foreign currency related
items.................. 9,765 (27,706) 28,945 (6,783) (2,943) (114,384)
Net change in unrealized
appreciation
(depreciation) on:
Investments.............. 999,505 836,282 872,041 1,754,294 4,236,085 2,401,300
Foreign currency related
items.................. (4,062) 29 (71,967) (265) 128,253 12,958
----------- ---------- ----------- ---------- ----------- -----------
Net increase in net assets
from operations.......... 1,726,964 1,840,888 770,378 2,542,187 5,649,509 4,245,814
----------- ---------- ----------- ---------- ----------- -----------
DISTRIBUTIONS TO
SHAREHOLDERS:
Net investment income...... (104,404) -- (3) -- (238,326) (2,088)
Net realized gain on
investment
transactions............. (1,470,576) (205,786) (390,495) (422,240) (2,687,572) (365,329)
Return of capital.......... (289,382) -- -- -- (955,663) --
----------- ---------- ----------- ---------- ----------- -----------
Total distributions to
shareholders............. (1,864,362) (205,786) (390,498) (422,240) (3,881,561) (367,417)
----------- ---------- ----------- ---------- ----------- -----------
SHARE TRANSACTIONS:
Proceeds from the sale of
shares................... 26,877,906 6,815,571 34,276,844 7,274,705 38,726,566 11,922,082
Reinvestment of
distributions............ 1,746,593 205,786 374,294 422,240 3,277,573 367,417
Cost of shares redeemed.... (7,459,511) (129,404) (7,662,400) (239,359) (11,274,162) (27,347)
----------- ---------- ----------- ---------- ----------- -----------
Net increase in net assets
from share
transactions............. 21,164,988 6,891,953 26,988,738 7,457,586 30,729,977 12,262,152
----------- ---------- ----------- ---------- ----------- -----------
Net increase in net
assets................... 21,027,590 8,527,055 27,368,618 9,577,533 32,497,925 16,140,549
Net assets beginning of
period................... 8,527,055 -- 9,577,533 -- 16,140,549 --
----------- ---------- ----------- ---------- ----------- -----------
NET ASSETS END OF PERIOD... $29,554,645 $8,527,055 $36,946,151 $9,577,533 $48,638,474 $16,140,549
=========== ========== =========== ========== =========== ===========
UNDISTRIBUTED NET
INVESTMENT INCOME........ $ 7,694 $ 7,691 $ 133,876 $ -- $ (149,359) $ 2,538
=========== ========== =========== ========== =========== ===========
<CAPTION>
JNL/ALGER
GROWTH SERIES
---------------------------
PERIOD FROM PERIOD FROM
APRIL 1, OCTOBER 16,
1996 TO 1995*
DECEMBER 31, TO MARCH 31,
1996 1996
------------ ------------
<S> <C> <C>
OPERATIONS:
Net investment income
(loss)................... $ (3,590) $ (4,334)
Net realized gain (loss)
on:
Investments.............. (523,886) (176,693)
Foreign currency related
items.................. -- --
Net change in unrealized
appreciation
(depreciation) on:
Investments.............. 3,281,071 383,613
Foreign currency related
items.................. -- --
----------- ----------
Net increase in net assets
from operations.......... 2,753,595 202,586
----------- ----------
DISTRIBUTIONS TO
SHAREHOLDERS:
Net investment income...... -- --
Net realized gain on
investment
transactions............. -- --
Return of capital.......... -- --
----------- ----------
Total distributions to
shareholders............. -- --
----------- ----------
SHARE TRANSACTIONS:
Proceeds from the sale of
shares................... 34,332,656 8,603,764
Reinvestment of
distributions............ -- --
Cost of shares redeemed.... (7,483,397) (157,113)
----------- ----------
Net increase in net assets
from share
transactions............. 26,849,259 8,446,651
----------- ----------
Net increase in net
assets................... 29,602,854 8,649,237
Net assets beginning of
period................... 8,649,237 --
----------- ----------
NET ASSETS END OF PERIOD... $38,252,091 $8,649,237
=========== ==========
UNDISTRIBUTED NET
INVESTMENT INCOME........ $ -- $ --
=========== ==========
</TABLE>
- -------------------------
* Commencement of operations.
See notes to the financial statements.
22
<PAGE> 77
<TABLE>
<CAPTION>
JNL/ JNL/EAGLE
EAGLE CORE SMALLCAP JNL/PHOENIX INVESTMENT JNL/PHOENIX INVESTMENT PPM AMERICA/JNL
EQUITY SERIES EQUITY SERIES COUNSEL BALANCED SERIES COUNSEL GROWTH SERIES HIGH YIELD BOND SERIES
------------- ------------- --------------------------- --------------------------- ---------------------------
PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM
SEPTEMBER 16, SEPTEMBER 16, APRIL 1, MAY 15, APRIL 1, MAY 15, APRIL 1, MAY 15,
1996* TO 1996* TO 1996 TO 1995* 1996 TO 1995* 1996 TO 1995*
DECEMBER 31, DECEMBER 31, DECEMBER 31, TO MARCH 31, DECEMBER 31, TO MARCH 31, DECEMBER 31, TO MARCH 31,
1996 1996 1996 1996 1996 1996 1996 1996
------------- ------------- ------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 4,657 $ (1,017) $ 279,327 $ 64,994 $ 80,288 $ 3,173 $ 691,766 $ 384,605
(4,427) (9,337) 933,110 121,825 1,130,393 254,010 217,828 (24,875)
-- -- -- -- -- -- -- --
79,272 213,709 476,858 137,231 152,651 137,697 383,145 30,805
-- -- -- -- -- -- -- --
---------- ---------- ----------- ---------- ----------- ---------- ----------- ----------
79,502 203,355 1,689,295 324,050 1,363,332 394,880 1,292,739 390,535
---------- ---------- ----------- ---------- ----------- ---------- ----------- ----------
(4,657) -- (301,815) (40,871) (83,226) (235) (798,203) (272,127)
-- -- (364,079) (61,660) (608,389) (117,706) (23,388) --
(320) -- -- -- -- -- -- --
---------- ---------- ----------- ---------- ----------- ---------- ----------- ----------
(4,977) -- (665,894) (102,531) (691,615) (117,941) (821,591) (272,127)
---------- ---------- ----------- ---------- ----------- ---------- ----------- ----------
2,027,399 1,760,997 21,937,839 4,496,694 21,124,451 2,128,041 12,401,767 5,775,829
2,270 -- 652,446 102,531 673,981 117,941 790,186 272,127
(149,997) (20,263) (3,955,738) (60,115) (2,184,704) (4,851) (6,422,234) (10,835)
---------- ---------- ----------- ---------- ----------- ---------- ----------- ----------
1,879,672 1,740,734 18,634,547 4,539,110 19,613,728 2,241,131 6,769,719 6,037,121
---------- ---------- ----------- ---------- ----------- ---------- ----------- ----------
1,954,197 1,944,089 19,657,948 4,760,629 20,285,445 2,518,070 7,240,867 6,155,529
-- -- 4,760,629 -- 2,518,070 -- 6,155,529 --
---------- ---------- ----------- ---------- ----------- ---------- ----------- ----------
$1,954,197 $1,944,089 $24,418,577 $4,760,629 $22,803,515 $2,518,070 $13,396,396 $6,155,529
========== ========== =========== ========== =========== ========== =========== ==========
$ -- $ -- $ 2,086 $ 24,386 $ -- $ 2,938 $ 6,041 $ 112,478
========== ========== =========== ========== =========== ========== =========== ==========
</TABLE>
23
<PAGE> 78
JNL SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
PPM AMERICA/JNL PPM AMERICA/JNL SALOMON BROTHERS/JNL
MONEY MARKET SERIES VALUE EQUITY SERIES GLOBAL BOND SERIES
---------------------------- ---------------------------- ----------------------------
PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM
APRIL 1, MAY 15, APRIL 1, MAY 15, APRIL 1, MAY 15,
1996 TO 1995* 1996 TO 1995* 1996 TO 1995*
DECEMBER 31, TO MARCH 31, DECEMBER 31, TO MARCH 31, DECEMBER 31, TO MARCH 31,
1996 1996 1996 1996 1996 1996
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss)....... $ 614,491 $ 234,137 $ 174,463 $ 48,909 $ 574,698 $ 417,787
Net realized gain (loss) on:
Investments...................... -- -- 299,700 90,665 275,846 76,520
Foreign currency related items... -- -- -- -- 57,170 14,461
Net change in unrealized
appreciation (depreciation) on:
Investments...................... -- -- 1,455,960 495,135 178,039 25,325
Foreign currency related items... -- -- -- -- (21,421) 5,760
----------- ---------- ----------- ---------- ----------- ----------
Net increase in net assets from
operations....................... 614,491 234,137 1,930,123 634,709 1,064,332 539,853
----------- ---------- ----------- ---------- ----------- ----------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income.............. (614,491) (234,137) (183,956) (34,144) (754,598) (284,881)
Net realized gain on investment
transactions..................... -- -- (226,911) (31,292) (280,691) (13,959)
Return of capital.................. -- -- -- -- -- --
----------- ---------- ----------- ---------- ----------- ----------
Total distribution to
shareholders..................... (614,491) (234,137) (410,867) (65,436) (1,035,289) (298,840)
----------- ---------- ----------- ---------- ----------- ----------
SHARE TRANSACTIONS:
Proceeds from the sale of shares... 43,176,521 7,080,475 15,648,559 2,744,940 9,953,802 5,906,032
Reinvestment of distributions...... 606,298 234,137 398,998 65,436 870,854 298,840
Cost of shares redeemed............ (26,846,271) (498,973) (3,171,440) (14,344) (4,750,819) (65,822)
----------- ---------- ----------- ---------- ----------- ----------
Net increase in net assets from
share transactions............... 16,936,548 6,815,639 12,876,117 2,796,032 6,073,837 6,139,050
----------- ---------- ----------- ---------- ----------- ----------
Net increase in net assets......... 16,936,548 6,815,639 14,395,373 3,365,305 6,102,880 6,380,063
Net assets beginning of period..... 6,815,639 -- 3,365,305 -- 6,380,063 --
----------- ---------- ----------- ---------- ----------- ----------
NET ASSETS END OF PERIOD........... $ 23,752,187 $6,815,639 $17,760,678 $3,365,305 $12,482,943 $6,380,063
=========== ========== =========== ========== =========== ==========
UNDISTRIBUTED NET INVESTMENT
INCOME........................... $ -- $ -- $ 5,272 $ 14,765 $ 24,906 $ 154,263
=========== ========== =========== ========== =========== ==========
</TABLE>
- ------------------------
* Commencement of operations.
See notes to the financial statements.
24
<PAGE> 79
<TABLE>
<CAPTION>
SALOMON BROTHERS/JNL T. ROWE PRICE/JNL
U.S. GOVERNMENT & T. ROWE PRICE/JNL INTERNATIONAL T. ROWE PRICE/JNL
QUALITY BOND SERIES ESTABLISHED GROWTH SERIES EQUITY INVESTMENT SERIES MID-CAP GROWTH SERIES
---------------------------- ---------------------------- ---------------------------- ----------------------------
PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM
APRIL 1, MAY 15, APRIL 1, MAY 15, APRIL 1, MAY 15, APRIL 1, MAY 15,
1996 TO 1995* 1996 TO 1995* 1996 TO 1995* 1996 TO 1995*
DECEMBER 31, TO MARCH 31, DECEMBER 31, TO MARCH 31, DECEMBER 31, TO MARCH 31, DECEMBER 31, TO MARCH 31,
1996 1996 1996 1996 1996 1996 1996 1996
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 288,314 $ 101,972 $ 93,779 $ 39,667 $ 294,949 $ 144,763 $ (39,345) $ 45,840
29,022 16,922 93,499 755,376 203,836 28,284 750,795 646,003
-- -- (12,360) (688) 25,484 (98,371) (3) (638)
82,805 (33,024) 3,384,049 610,608 2,679,873 2,453,995 3,708,604 1,402,175
-- -- 44 12 2,709 351 -- --
----------- ---------- ----------- ---------- ----------- ----------- ----------- -----------
400,141 85,870 3,559,011 1,404,975 3,206,851 2,529,022 4,420,051 2,093,380
----------- ---------- ----------- ---------- ----------- ----------- ----------- -----------
(318,115) (69,090) (91,356) (32,938) (465,733) -- (144,094) (1,703)
(30,967) (8,103) (212,086) (672,346) (51,200) -- (1,107,685) (266,093)
-- -- (1,234,953) -- -- -- -- --
----------- ---------- ----------- ---------- ----------- ----------- ----------- -----------
(349,082) (77,193) (1,538,395) (705,284) (516,933) -- (1,251,779) (267,796)
----------- ---------- ----------- ---------- ----------- ----------- ----------- -----------
8,748,229 2,948,026 27,757,264 7,552,012 22,581,023 21,710,034 41,147,930 8,712,257
330,365 77,193 1,489,773 705,284 255,509 -- 1,198,205 267,796
(2,304,702) (27,107) (7,748,754) (184,945) (1,533,092) (28,085) (8,955,066) (260,489)
----------- ---------- ----------- ---------- ----------- ----------- ----------- -----------
6,773,892 2,998,112 21,498,283 8,072,351 21,303,440 21,681,949 33,391,069 8,719,564
----------- ---------- ----------- ---------- ----------- ----------- ----------- -----------
6,824,951 3,006,789 23,518,899 8,772,042 23,993,358 24,210,971 36,559,341 10,545,148
3,006,789 -- 8,772,042 -- 24,210,971 -- 10,545,148 --
----------- ---------- ----------- ---------- ----------- ----------- ----------- -----------
$ 9,831,740 $3,006,789 $32,290,941 $8,772,042 $48,204,329 $24,210,971 $47,104,489 $10,545,148
=========== ========== =========== ========== =========== =========== =========== ===========
$ -- $ 31,823 $ (3,896) $ 6,828 $ 65,539 $ 80,214 $ (301) $ 44,137
=========== ========== =========== ========== =========== =========== =========== ===========
</TABLE>
25
<PAGE> 80
JNL SERIES TRUST
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
JNL AGGRESSIVE JNL CAPITAL JNL GLOBAL
GROWTH SERIES GROWTH SERIES EQUITIES SERIES
---------------------------- ---------------------------- ----------------------------
PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM
APRIL 1, MAY 15, APRIL 1, MAY 15, APRIL 1, MAY 15,
1996 TO 1995* 1996 TO 1995* 1996 TO 1995*
DECEMBER 31, TO MARCH 31, DECEMBER 31, TO MARCH 31, DECEMBER 31, TO MARCH 31,
1996 1996 1996 1996 1996 1996
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER SHARE DATA
NET ASSET VALUE, BEGINNING OF
PERIOD............................. $ 13.13 $10.00 $ 13.86 $10.00 $ 13.75 $10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)......... 0.05 0.01 0.06 -- 0.03 0.10
Net realized and unrealized gains on
investments and foreign currency
related items...................... 1.10 3.53 0.70 4.70 2.72 4.02
------- ------- ------- ------ ------- ------
Total income from investment
operations......................... 1.15 3.54 0.76 4.70 2.75 4.12
------- ------- ------- ------ ------- ------
LESS DISTRIBUTIONS:
From net investment income........... (0.05) -- -- -- (0.08) --
From net realized gains on investment
transactions....................... (0.71) (0.41) (0.16) (0.84) (0.90) (0.37)
Return of capital.................... (0.14) -- -- -- (0.32) --
------- ------- ------- ------ ------- ------
Total distributions.................. (0.90) (0.41) (0.16) (0.84) (1.30) (0.37)
------- ------- ------- ------ ------- ------
Net increase......................... 0.25 3.13 0.60 3.86 1.45 3.75
------- -------- ------- ------ ------- -------
NET ASSET VALUE, END OF PERIOD....... $ 13.38 $ 13.13 $ 14.46 $13.86 $ 15.20 $ 13.75
======= ======== ======= ====== ======= =======
TOTAL RETURN(A)...................... 8.72% 35.78% 5.45% 47.94% 19.99% 41.51%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in
thousands)......................... $29,555 $ 8,527 $36,946 $9,578 $48,638 $16,141
Ratio of net expenses to average net
assets(b)(c)....................... 1.09% 1.09% 1.09% 1.09% 1.14% 1.15%
Ratio of net investment income to
average net assets(b)(c)........... 0.77% 0.27% 0.91% (0.49)% 0.37% 0.39%
Portfolio turnover rate.............. 85.22% 163.84% 115.88% 128.56% 52.02% 142.36%
Average commission rate paid(d)...... $0.0242 n/a $0.0196 n/a $0.0162 n/a
RATIO INFORMATION ASSUMING NO EXPENSE
REIMBURSEMENT OR FEES PAID
INDIRECTLY
Ratio of expenses to average net
assets(b).......................... 1.40% 2.77% 1.27% 2.08% 1.63% 2.25%
Ratio of net investment income to
average net assets(b).............. 0.46% (1.41)% 0.73% (1.48)% (0.12)% (0.71)%
</TABLE>
- -------------------------
* Commencement of operations.
(a) Assumes investment at net asset value at the beginning of the period,
reinvestment of all distributions, and a complete redemption of the
investment at the net asset value at the end of the period. Total return is
not annualized.
(b) Annualized.
(c) Computed after giving effect to the Advisor's expense reimbursement and fees
paid indirectly.
(d) Disclosure required for fiscal years beginning after September 1, 1995.
See notes to the financial statements.
26
<PAGE> 81
<TABLE>
<CAPTION>
JNL/EAGLE JNL/EAGLE
CORE EQUITY SMALLCAP JNL/PHOENIX INVESTMENT JNL/PHOENIX INVESTMENT
JNL/ALGER GROWTH SERIES SERIES EQUITY SERIES COUNSEL BALANCED SERIES COUNSEL GROWTH SERIES
-------------------------- ------------- ------------- -------------------------- --------------------------
PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM
APRIL 1, OCTOBER 16, SEPTEMBER 16, SEPTEMBER 16, APRIL 1, MAY 15, APRIL 1, MAY 15,
1996 TO 1995* TO 1996* TO 1996* TO 1996 TO 1995* TO 1996 TO 1995* TO
DECEMBER 31, MARCH 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, MARCH 31, DECEMBER 31, MARCH 31,
1996 1996 1996 1996 1996 1996 1996 1996
------------ ----------- ------------- ------------- ------------ ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
$10.38 $10.00 $10.00 $10.00 $11.17 $10.00 $12.50 $10.00
-- -- 0.03 (0.01) 0.10 0.25 0.04 0.01
0.78 0.38 0.62 1.55 0.98 1.40 2.12 3.66
------- ------ ------ ------ ------- ------ ------- ------
0.78 0.38 0.65 1.54 1.08 1.65 2.16 3.67
------- ------ ------ ------ ------- ------ ------- ------
-- -- (0.03) -- (0.15) (0.19) (0.05) --
-- -- -- -- (0.18) (0.29) (0.40) (1.17)
-- -- -- -- -- -- -- --
------- ------ ------ ------ ------- ------ ------- ------
-- -- (0.03) -- (0.33) (0.48) (0.45) (1.17)
------- ------ ------ ------ ------- ------ ------- ------
0.78 0.38 0.62 1.54 0.75 1.17 1.71 2.50
------- ------ ------ ------ ------- ------ ------- ------
$11.16 $10.38 $10.62 $11.54 $11.92 $11.17 $14.21 $12.50
======= ====== ====== ====== ======= ====== ======= ======
7.51% 3.80% 6.47% 15.40% 9.72% 16.60% 17.28% 37.69%
$38,252 $8,649 $ 1,954 $ 1,944 $24,419 $4,761 $22,804 $2,518
1.07% 1.03% 1.05% 1.10% 1.04% 1.01% 1.04% 0.95%
(0.02)% (0.17)% 1.10% (0.26)% 2.39% 2.99% 0.94% 0.28%
59.92% 50.85% 1.36% 28.01% 158.15% 115.84% 184.33% 255.03%
$0.0441 n/a $0.0452 $0.0264 $0.0494 n/a $0.0175 n/a
1.19% 1.89% 4.57% 4.77% 1.22% 3.71% 1.27% 5.38%
(0.14)% (1.03)% (2.42)% (3.93)% 2.21% 0.29% 0.71% (4.15)%
<CAPTION>
PPM AMERICA/JNL HIGH
YIELD BOND SERIES
--------------------------
PERIOD FROM PERIOD FROM
APRIL 1, MAY 15,
1996 TO 1995* TO
DECEMBER 31, MARCH 31,
1996 1996
------------ -----------
<S> <C>
$10.23 $10.00
0.51 0.73
0.64 0.04
------- ------
1.15 0.77
------- ------
(0.69) (0.54)
(0.02) --
-- --
------- ------
(0.71) (0.54)
------- ------
0.44 0.32
------- ------
$10.67 $10.23
======= ======
11.24% 7.82%
$13,396 $6,156
0.88% 0.88%
8.64% 8.34%
113.08% 186.21%
n/a n/a
1.21% 1.50%
8.31% 7.72%
</TABLE>
27
<PAGE> 82
JNL SERIES TRUST
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
PPM AMERICA/JNL PPM AMERICA/JNL SALOMON BROTHERS/JNL
MONEY MARKET SERIES VALUE EQUITY SERIES GLOBAL BOND SERIES
--------------------------- --------------------------- ---------------------------
PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM
APRIL 1, MAY 15, APRIL 1, MAY 15, APRIL 1, MAY 15,
1996 TO 1995* 1996 TO 1995* 1996 TO 1995*
DECEMBER 31, TO MARCH 31, DECEMBER 31, TO MARCH 31, DECEMBER 31, TO MARCH 31,
1996 1996 1996 1996 1996 1996
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER SHARE DATA
NET ASSET VALUE, BEGINNING OF PERIOD.... $ 1.00 $1.00 $ 12.77 $10.00 $ 10.46 $10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)............ 0.04 0.04 0.10 0.23 0.42 0.81
Net realized and unrealized gains on
investments and foreign currency
related items......................... -- -- 1.97 2.86 0.70 0.24
------- ----- ------- ------ ------- ------
Total income from investment
operations............................ 0.04 0.04 2.07 3.09 1.12 1.05
------- ------ ------- ------ ------- ------
LESS DISTRIBUTIONS:
From net investment income.............. (0.04) (0.04) (0.15) (0.17) (0.69) (0.56)
From net realized gains on investment
transactions.......................... -- -- (0.19) (0.15) (0.26) (0.03)
Return of capital....................... -- -- -- -- -- --
------- ------ ------- ------ ------- ------
Total distributions..................... (0.04) (0.04) (0.34) (0.32) (0.95) (0.59)
------- ------ ------- ------ ------- ------
Net increase............................ -- -- 1.73 2.77 0.17 0.46
------- ------ ------- ------ ------- ------
NET ASSET VALUE, END OF PERIOD.......... $ 1.00 $ 1.00 $ 14.50 $12.77 $ 10.63 $10.46
======= ====== ======= ====== ======= ======
TOTAL RETURN(A)......................... 3.61% 4.59% 16.25% 31.14% 10.68% 10.74%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in
thousands)............................ $23,752 $6,816 $17,761 $3,365 $12,483 $6,380
Ratio of net expenses to average net
assets(b)(c).......................... 0.75% 0.75% 0.85% 0.87% 0.99% 1.00%
Ratio of net investment income to
average net assets(b)(c).............. 4.75% 5.06% 2.29% 2.33% 7.52% 9.01%
Portfolio turnover rate................. -- -- 13.71% 30.12% 109.85% 152.89%
Average commission rate paid(d)......... n/a n/a $0.0259 n/a n/a n/a
RATIO INFORMATION ASSUMING NO EXPENSE
REIMBURSEMENT OR FEES PAID INDIRECTLY
Ratio of expenses to average net
assets(b)............................. 0.85% 1.30% 1.53% 2.28% 1.44% 2.14%
Ratio of net investment income to
average net assets(b)................. 4.65% 4.51% 1.61% 0.91% 7.07% 7.87%
</TABLE>
- -------------------------
* Commencement of operations.
(a) Assumes investment at net asset value at the beginning of the period,
reinvestment of all dividends and distributions, and a complete redemption
of the investment at the net asset value at the end of the period. Total
return is not annualized.
(b) Annualized.
(c) Computed after giving effect to the Advisor's expense reimbursement and fees
paid indirectly.
(d) Disclosure required for fiscal years beginning after September 1, 1995.
See notes to the financial statements.
28
<PAGE> 83
<TABLE>
<CAPTION>
SALOMON BROTHERS/JNL U.S. T. ROWE PRICE/
GOVERNMENT & QUALITY T. ROWE PRICE/JNL JNL INTERNATIONAL T. ROWE PRICE/JNL
BOND SERIES ESTABLISHED GROWTH SERIES EQUITY INVESTMENT SERIES MID-CAP GROWTH SERIES
--------------------------- --------------------------- --------------------------- ---------------------------
PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM
APRIL 1, MAY 15, APRIL 1, MAY 15, APRIL 1, MAY 15, APRIL 1, MAY 15,
1996 TO 1995* 1996 TO 1995* 1996 TO 1995* 1996 TO 1995*
DECEMBER 31, TO MARCH 31, DECEMBER 31, TO MARCH 31, DECEMBER 31, TO MARCH 31, DECEMBER 31, TO MARCH 31,
1996 1996 1996 1996 1996 1996 1996 1996
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 10.09 $ 10.00 $ 11.36 $ 10.00 $ 11.25 $ 10.00 $ 13.43 $ 10.00
0.24 0.45 0.03 0.07 0.06 0.04 (0.05) 0.06
0.24 0.02 1.81 2.68 0.90 1.21 1.92 3.90
-------- -------- -------- -------- -------- ------- -------- --------
0.48 0.47 1.84 2.75 0.96 1.25 1.87 3.96
-------- -------- -------- -------- -------- ------- -------- --------
(0.34) (0.34) (0.04) (0.06) (0.12) -- (0.05) --
(0.03) (0.04) (0.09) (1.33) (0.01) -- (0.36) (0.53)
-- -- (0.51) -- -- -- -- --
-------- -------- -------- -------- -------- ------- -------- --------
(0.37) (0.38) (0.64) (1.39) (0.13) -- (0.41) (0.53)
-------- -------- -------- -------- -------- ------- -------- --------
0.11 0.09 1.20 1.36 0.83 1.25 1.46 3.43
-------- -------- -------- -------- -------- ------- -------- --------
$ 10.20 $ 10.09 $ 12.56 $ 11.36 $ 12.08 $ 11.25 $ 14.89 $ 13.43
======== ======== ======== ======== ======== ======== ======== ========
4.82% 4.65% 16.12% 28.23% 8.54% 12.50% 13.91% 40.06%
$ 9,832 $ 3,007 $ 32,291 $ 8,772 $ 48,204 $24,211 $ 47,104 $ 10,545
0.84% 0.84% 1.00% 1.00% 1.25% 1.25% 1.10% 1.10%
5.72% 5.41% 0.59% 0.75% 1.09% 0.78% (0.18)% 0.82%
218.50% 253.37% 36.41% 101.13% 5.93% 16.45% 25.05% 66.04%
n/a n/a $ 0.0288 n/a $ 0.0257 n/a $ 0.0326 n/a
1.37% 2.53% 1.11% 2.09% 1.29% 2.14% 1.14% 2.10%
5.19% 3.72% 0.48% (0.34)% 1.05% (0.11)% (0.22)% (0.18)%
</TABLE>
29
<PAGE> 84
- --------------------------------------------------------------------------------
JNL SERIES TRUST
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
NOTE 1. ORGANIZATION
JNL Series Trust ("Trust") is an open-end management investment company
organized under the laws of Massachusetts, by a Declaration of Trust, dated June
1, 1994. The Trust is registered with the Securities and Exchange Commission
under the Investment Company Act of 1940. The Trust currently offers shares in
sixteen (16) separate Series, each with its own investment objective. The shares
of the Trust are sold primarily to life insurance company separate accounts to
fund the benefits of variable annuity policies.
The Trust is composed of the following Series: JNL Aggressive Growth, JNL
Capital Growth and JNL Global Equities for which Janus Capital Corporation
serves as the sub-advisor; JNL/Alger Growth for which Fred Alger Management,
Inc. serves as the sub-advisor; JNL/Eagle Core Equity and JNL/Eagle SmallCap
Equity for which Eagle Asset Management, Inc. serves as sub-advisor; JNL/Phoenix
Investment Counsel Balanced and JNL/Phoenix Investment Counsel Growth for which
Phoenix Investment Counsel, Inc. serves as the sub-advisor; PPM America/JNL High
Yield Bond, PPM America/JNL Money Market and PPM America/JNL Value Equity for
which PPM America, Inc. serves as the sub-advisor; Salomon Brothers/JNL Global
Bond and Salomon Brothers/JNL U.S. Government & Quality Bond for which Salomon
Brothers Asset Management Inc serves as the sub-advisor; T. Rowe Price/JNL
Established Growth and T. Rowe Price/JNL Mid-Cap Growth for which T. Rowe Price
Associates, Inc. serves as the sub-advisor; and T. Rowe Price/JNL International
Equity Investment for which Rowe Price-Fleming International, Inc. serves as the
sub-advisor. Salomon Brothers Asset Management Inc has entered into a
sub-advisory consulting agreement with its London based affiliate, Salomon
Brothers Asset Management Limited pursuant to which it will provide certain
sub-advisory services to Salomon Brothers Asset Management Inc relating to
currency transactions and investments in non-dollar denominated debt securities
for the benefit of the Series. Jackson National Financial Services, Inc.
("JNFSI"), a wholly-owned subsidiary of Jackson National Life Insurance Company
("Jackson National"), serves as investment advisor ("Advisor") for all the
Series of the Trust. PPM America, Inc. is an affiliate of the Advisor. Shares
are presently offered only to Jackson National and its separate account. As of
December 31, 1996, Jackson National's investment in the Trust totaled
$45,710,487.
The costs associated with the organization of the Trust and certain other
initial period costs have been borne by Jackson National.
Effective December 31, 1996, the Trust changed its fiscal year end to
December 31.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by
the Trust in the preparation of its financial statements.
USE OF ESTIMATES -- 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 income and expenses during
the reported period. Actual results could differ from those estimates.
SECURITY VALUATION -- Bonds are valued on the basis of prices furnished by
a service which determines prices for normal institutional size trading units of
bonds, without regard to exchange or over-the-counter prices. When quotations
are not readily available, bonds are valued at fair market value determined by
procedures approved by the Board of Trustees. Stocks listed on a national or
foreign stock exchange are valued at the final sale price, or final bid price in
absence of a sale. Stocks not listed on a national or foreign stock exchange are
valued at the closing bid price on the over-the-counter market. Short-term
securities maturing within 60 days of purchase, and all securities in the PPM
America/JNL Money Market Series, are valued at amortized cost, which
approximates market value. American Depository Receipts ("ADRs"), which are
certificates representing shares of foreign securities deposited in domestic and
foreign banks, are traded and valued in U.S. dollars.
30
<PAGE> 85
- --------------------------------------------------------------------------------
JNL SERIES TRUST
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
SECURITY TRANSACTIONS AND INVESTMENT INCOME -- Security transactions are
accounted for on a trade date basis. Dividend income is recorded on the
ex-dividend date. Interest income, including level-yield amortization of
discounts and premiums, is accrued daily. Realized gains and losses are
determined on the specific identification basis, which is the same basis used
for federal income tax purposes.
FOREIGN CURRENCY TRANSLATIONS -- The accounting records of the Trust are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S. dollars
using exchange rates in effect at the close of the New York Stock Exchange.
Purchases and sales of investment securities, income receipts, and expense
payments are translated into U.S. dollars at the exchange rates prevailing on
the respective dates of such transactions.
Realized gains and losses arising from selling foreign currencies and
certain non-dollar denominated fixed income securities, entering into forward
foreign currency exchange contracts, and accruing income or settling portfolio
purchases and sales denominated in a foreign currency paid or received at a
later date are recorded as net realized foreign currency related gains (losses)
and are considered ordinary income for tax purposes. Realized and unrealized
gains and losses on investments which result from changes in foreign currency
exchange rates are primarily included in net realized gains (losses) on
investments and net unrealized appreciation (depreciation) on investments,
respectively.
FOREIGN CURRENCY CONTRACTS -- Some of the Series may enter into foreign
currency contracts ("contracts"), generally to hedge foreign currency exposure
between trade date and settlement date on security purchases and sales ("spot
hedges") or to minimize foreign currency risk on portfolio securities
denominated in foreign currencies ("position hedges"). All contracts are valued
at the forward currency exchange rate and are marked-to-market daily. When the
contract is open, the change in market value is recorded as net unrealized
appreciation (depreciation) on foreign currency related items. When the contract
is closed, the difference between the value of the contract at the time it was
opened and the value at the time it was closed is recorded as net realized gain
(loss) on foreign currency related items.
The use of forward foreign currency exchange contracts does not eliminate
fluctuations in the underlying prices of the Series' portfolio securities, but
it does establish a rate of exchange that can be achieved in the future.
Although contracts limit the risk of loss due to a decline in the value of the
hedged currency, they also limit any potential gain that might result should the
value of the currency increase. Additionally, the Series could be exposed to the
risk of a previously hedged position becoming unhedged if the counterparties to
the contracts are unable to meet the terms of the contracts. See Note 7 for a
listing of open forward foreign currency exchange contracts as of December 31,
1996.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS -- The Series may purchase
securities on a when-issued or delayed delivery basis. On the trade date, the
Series record purchases of when-issued securities and reflects the values of
such securities in determining net asset value in the same manner as other
portfolio securities. Income is not accrued until settlement date.
UNREGISTERED SECURITIES -- Some of the Series own certain investment
securities which are unregistered and thus restricted to resale. These
securities are valued by the Series after giving due consideration to pertinent
factors including recent private sales, market conditions and the issuer's
financial performance. Where future dispositions of the securities require
registration under the Securities Act of 1933, the Series have the right to
include their securities in such registration generally without cost to the
Series. The Series have no right to require registration of unregistered
securities. Unregistered and other illiquid securities are limited to 15% (10%
in the case of PPM America/JNL Money Market Series and the JNL/Alger Growth
Series) of the net assets of a Series.
OPTIONS TRANSACTIONS -- Some of the Series may write covered call options
on portfolio securities. The risk in writing a call option is that the Series
gives up the opportunity of profit if the market price of the security
increases. Option contracts are valued at the closing prices on their exchanges
and the Series will realize a gain or loss upon expiration or closing of the
option transaction. When an option is exercised, the proceeds on sales for a
written call option are adjusted by the amount of premium received.
DOLLAR ROLL TRANSACTIONS -- The Salomon Brothers/ JNL Global Bond Series
and the Salomon Brothers/JNL
31
<PAGE> 86
- --------------------------------------------------------------------------------
JNL SERIES TRUST
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
U.S. Government & Quality Bond Series entered into dollar roll transactions with
respect to mortgage securities in which the Series sells mortgage securities and
simultaneously agrees to repurchase similar (same type, coupon and maturity)
securities at a later date at an agreed upon price. During the period between
the sale and repurchase, the Series forgoes principal and interest paid on the
mortgage securities sold. The Series is compensated by the interest earned on
the cash proceeds of the initial sale and from negotiated fees paid by brokers
offered as an inducement to the Series to "roll over" its purchase commitments.
REPURCHASE AGREEMENTS -- Certain Series in the Trust may invest in
repurchase agreements. A repurchase agreement involves the purchase of a
security by a Series and a simultaneous agreement (generally by a bank or
broker-dealer) to repurchase that security back from the Series at a specified
price and date or upon demand. Securities pledged as collateral for repurchase
agreements are held by the Series custodian bank until the maturity of the
repurchase agreement. Procedures for all repurchase agreements have been
designed to assure that the daily market value of the collateral is in excess of
the repurchase agreement in the event of default.
DISTRIBUTIONS TO SHAREHOLDERS -- The PPM America/JNL Money Market Series
declares dividends daily and pays dividends monthly. For all other Series,
dividends from net investment income are declared and paid annually, but may be
done more frequently to avoid excise tax. Distributions of net realized capital
gains, if any, will be distributed annually. All income, dividends, and capital
gains distributions, if any, on Series shares are reinvested automatically in
additional shares of the Series at the net asset value determined on the first
business day following the record date, unless otherwise requested by the
shareholder.
FEDERAL INCOME TAXES -- The Trust's policy is to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute income in amounts that will avoid federal income or
excise taxes for each Series. The Trust may periodically make reclassifications
among certain of its capital accounts as a result of the recognition and
characterization of certain income and capital gain distributions determined
annually in accordance with federal tax regulations which may differ from
generally accepted accounting principles.
For federal income tax purposes, JNL Capital Growth Series, JNL/Alger
Growth Series and JNL/Eagle SmallCap Equity Series have capital loss carryovers
totalling $168,603, $696,137 and $5,034, respectively, expiring in 2004 which
can be used to offset future realized capital gains.
NOTE 3. INVESTMENT MANAGEMENT FEES AND TRANSACTIONS WITH AFFILIATES
JNFSI is the investment advisor of each Series and provides each Series
with professional investment supervision and management. JNFSI provides
accounting services, preparation of financial statements, tax services and
regulatory reports to the Trust. In addition to providing the services described
above, JNFSI selects, contracts with, and compensates sub-advisors to manage the
investment and reinvestment of the assets of the Trust.
As compensation for its services, JNFSI receives a fee from each Series.
The fees, which are accrued daily and payable monthly, are calculated on the
basis of the average daily net assets of each Series. Once the average net
assets of a Series exceed specified amounts, the fee is reduced with respect to
such excess. The following is a schedule of the fees each Series is currently
obligated to pay JNFSI.
<TABLE>
<CAPTION>
$0 TO $50 TO $150 TO $300 TO OVER
(M - MILLIONS) $50 M $150 M $300 M $500 M $500 M
- -------------- ----- ------ ------- ------- ------
<S> <C> <C> <C> <C> <C>
JNL Aggressive Growth Series................................ .95% .95% .90% .85% .85%
JNL Capital Growth Series................................... .95% .95% .90% .85% .85%
JNL Global Equities Series.................................. 1.00% 1.00% .95% .90% .90%
JNL/Alger Growth Series..................................... .975% .975% .975% .95% .90%
</TABLE>
32
<PAGE> 87
- --------------------------------------------------------------------------------
JNL SERIES TRUST
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
$0 TO $50 TO $150 TO $300 TO OVER
(M - MILLIONS) $50 M $150 M $300 M $500 M $500 M
- -------------- ----- ------ ------- ------- ------
<S> <C> <C> <C> <C> <C>
JNL/Eagle Core Equity Series................................ .90% .85% .85% .75% .75%
JNL/Eagle SmallCap Equity Series............................ .95% .95% .90% .90% .85%
JNL/Phoenix Investment Counsel Balanced Series.............. .90% .80% .75% .70% .65%
JNL/Phoenix Investment Counsel Growth Series................ .90% .85% .80% .75% .70%
PPM America/JNL High Yield Bond Series...................... .75% .70% .675% .65% .625%
PPM America/JNL Money Market Series......................... .60% .60% .575% .55% .525%
PPM America/JNL Value Equity Series......................... .75% .70% .675% .65% .625%
Salomon Brothers/JNL Global Bond Series..................... .85% .85% .80% .80% .75%
Salomon Brothers/JNL U.S. Government & Quality Bond
Series.................................................... .70% .70% .65% .60% .55%
T. Rowe Price/JNL Established Growth Series................. .85% .85% .80% .80% .80%
T. Rowe Price/JNL International Equity Investment Series.... 1.10% 1.05% 1.00% .95% .90%
T. Rowe Price/JNL Mid-Cap Growth Series..................... .95% .95% .90% .90% .90%
</TABLE>
As compensation for their services, the sub-advisors receive fees from
JNFSI computed separately for each Series. The fee for each Series is stated as
an annual percentage of the net assets of such Series. The following is a
schedule of the management fees JNFSI currently is obligated to pay the
sub-advisors out of the advisory fee it receives from each Series as specified
above.
<TABLE>
<CAPTION>
$0 TO $50 TO $100 TO $150 TO $300 TO OVER
(M - MILLIONS) $50 M $100 M $150 M $300 M $500 M $500 M-
- -------------- ----- ------ ------- ------- ------- ------
<S> <C> <C> <C> <C> <C> <C>
JNL Aggressive Growth Series*.......................... .55% .55% .50% .50% .50% .45%
JNL Capital Growth Series*............................. .55% .55% .50% .50% .50% .45%
JNL Global Equities Series*............................ .55% .55% .50% .50% .50% .45%
JNL/Alger Growth Series................................ .55% .55% .55% .55% .50% .45%
JNL/Eagle Core Equity Series........................... .45% .40% .40% .40% .30% .30%
JNL/Eagle SmallCap Equity Series....................... .50% .50% .50% .45% .45% .40%
JNL/Phoenix Investment Counsel Balanced Series......... .50% .40% .40% .30% .25% .20%
JNL/Phoenix Investment Counsel Growth Series........... .50% .40% .40% .30% .25% .20%
PPM America/JNL High Yield Bond Series................. .25% .20% .20% .175% .15% .125%
PPM America/JNL Money Market Series.................... .20% .15% .15% .125% .10% .075%
PPM America/JNL Value Equity Series.................... .25% .20% .20% .175% .15% .125%
Salomon Brothers/JNL Global Bond Series................ .375% .35% .35% .30% .30% .25%
Salomon Brothers/JNL U.S. Government & Quality Bond
Series............................................... .225% .225% .225% .175% .15% .10%
</TABLE>
<TABLE>
<CAPTION>
$0 TO $20 TO $50 TO $200
$20 M $50 M $200 M M+
----- ------ ------ ----
<S> <C> <C> <C> <C>
T. Rowe Price/JNL Established Growth Series................. .45% .40% .40%** .40%
T. Rowe Price/JNL International Equity Investment Series.... .75% .60% .50% .50%**
T. Rowe Price/JNL Mid-Cap Growth Series..................... .60% .50% .50%** .50%
</TABLE>
* Prior to September 16, 1996, the sub-advisory fees payable to Janus for these
Series were: $0 to $50 million -- .60%; $50 to $150 million -- .55%; $150 to
$300 million -- .45%; $300 to $500 million -- .40%; over $500 million -- .40%.
** When average net assets exceed this amount, the sub-advisory fee asterisked
is applicable to all amounts in this Series.
Trustees not affiliated with Jackson National receive a fee of $2,500 for
each meeting of the Board of Trustees attended as well as certain out of pocket
expenses. No remuneration has been paid by the Trust to any of the officers or
affiliated Trustees. The Trust paid fees of $20,000 to non-affiliated Trustees
for the period ended December 31, 1996.
Each Series is charged for those expenses that are directly attributable to
it, such as advisory, custodian, accounting services and certain shareholder
service fees, while other expenses that cannot be directly attributable to a
Series are allocated in equal proportion to each Series.
33
<PAGE> 88
- --------------------------------------------------------------------------------
JNL SERIES TRUST
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
Currently, the Advisor reimburses each of the Series for annual expenses
(excluding the investment advisory fee) prior to fees paid indirectly in excess
of .15 % of average daily net assets. These voluntary reimbursements may be
modified or discontinued by the Advisor at any time.
During the period ended December 31, 1996, the Series earned credits on
uninvested cash balances held by certain Series at the custodian. These credits
were used to reduce custodian expenses. Of the credits for the JNL/Alger Growth
Series, $10,114 was used to reduce expenses and the remaining $58,958 in credits
are included in interest income.
NOTE 4. SECURITY TRANSACTIONS
During the period ended December 31, 1996, cost of purchases and proceeds
from sales and maturities of securities, other than short-term investments, were
as follows (in thousands):
<TABLE>
<CAPTION>
COST OF PROCEEDS FROM SALES
PURCHASES AND MATURITIES
--------- -------------------
<S> <C> <C>
JNL Aggressive Growth Series................................ $29,706 $12,904
JNL Capital Growth Series................................... 49,090 25,376
JNL Global Equities Series.................................. 42,931 16,034
JNL/Alger Growth Series..................................... 39,382 13,988
JNL/Eagle Core Equity Series................................ 1,739 18
JNL/Eagle SmallCap Equity Series............................ 1,967 355
JNL/Phoenix Investment Counsel Balanced Series.............. 37,329 20,960
JNL/Phoenix Investment Counsel Growth Series................ 36,290 17,825
PPM America/JNL High Yield Bond Series...................... 17,786 11,343
PPM America/JNL Value Equity Series......................... 14,173 1,628
Salomon Brothers/JNL Global Bond Series..................... 18,882 12,774
Salomon Brothers/JNL U.S. Government & Quality Bond
Series.................................................... 21,718 15,072
T. Rowe Price/JNL Established Growth Series................. 26,615 7,325
T. Rowe Price/JNL International Equity Investment Series.... 22,137 2,036
T. Rowe Price/JNL Mid-Cap Growth Series..................... 35,253 6,673
</TABLE>
Included in these transactions were purchases and sales of U.S. Government
obligations of $13,728,073 and $6,229,697 in the JNL/Phoenix Investment Counsel
Balanced Series; $3,608,199 and $1,501,046 in the Salomon Brothers/JNL Global
Bond Series; $11,928,476 and $4,375,100 in the Salomon Brothers/JNL U.S.
Government & Quality Bond Series, respectively.
The federal income tax cost basis and gross unrealized appreciation and
depreciation on investments as of December 31, 1996, were as follows (in
thousands):
<TABLE>
<CAPTION>
TAX GROSS GROSS
COST UNREALIZED UNREALIZED NET UNREALIZED
BASIS APPRECIATION DEPRECIATION APPRECIATION
----- ------------ ------------ --------------
<S> <C> <C> <C> <C>
JNL Aggressive Growth Series............................. $28,099 $2,522 $ (750) $1,772
JNL Capital Growth Series................................ 34,938 4,094 (1,409) 2,685
JNL Global Equities Series............................... 42,410 7,450 (940) 6,510
JNL/Alger Growth Series.................................. 34,480 4,738 (1,078) 3,660
JNL/Eagle Core Equity Series............................. 1,717 103 (24) 79
JNL/Eagle SmallCap Equity Series......................... 1,603 264 (50) 214
JNL/Phoenix Investment Counsel Balanced Series........... 23,695 876 (291) 585
JNL/Phoenix Investment Counsel Growth Series............. 23,812 689 (410) 279
PPM America/JNL High Yield Bond Series................... 13,109 435 (21) 414
PPM America/JNL Value Equity Series...................... 16,392 1,997 (46) 1,951
Salomon Brothers/JNL Global Bond Series.................. 13,367 412 (205) 207
</TABLE>
34
<PAGE> 89
- --------------------------------------------------------------------------------
JNL SERIES TRUST
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TAX GROSS GROSS
COST UNREALIZED UNREALIZED NET UNREALIZED
BASIS APPRECIATION DEPRECIATION APPRECIATION
----- ------------ ------------ --------------
<S> <C> <C> <C> <C>
Salomon Brothers/JNL U.S. Government & Quality
Bond Series............................................ $11,871 $ 66 $ (21) $ 45
T. Rowe Price/JNL Established Growth Series.............. 29,030 4,544 (585) 3,959
T. Rowe Price/JNL International Equity Investment
Series................................................. 42,818 6,723 (1,770) 4,953
T. Rowe Price/JNL Mid-Cap Growth Series.................. 42,790 6,400 (1,306) 5,094
</TABLE>
NOTE 5. TRUST TRANSACTIONS
Transactions of trust shares for the period ending December 31, 1996 were
as follows:
<TABLE>
<CAPTION>
SHARES DISTRIBUTIONS SHARES NET
PURCHASED REINVESTED REDEEMED INCREASE
--------- ------------- -------- --------
<S> <C> <C> <C> <C>
JNL Aggressive Growth Series........................... 1,957,943 130,538 (528,956) 1,559,525
JNL Capital Growth Series.............................. 2,355,859 25,885 (517,730) 1,864,014
JNL Global Equities Series............................. 2,508,660 215,630 (698,526) 2,025,764
JNL/Alger Growth Series................................ 3,282,099 -- (686,090) 2,596,009
JNL/Eagle Core Equity Series........................... 198,190 214 (14,346) 184,058
JNL/Eagle SmallCap Equity Series....................... 170,418 -- (1,912) 168,506
JNL/Phoenix Investment Counsel Balanced Series......... 1,895,883 54,735 (327,417) 1,623,201
JNL/Phoenix Investment Counsel Growth Series........... 1,507,501 47,430 (151,986) 1,402,945
PPM America/JNL High Yield Bond Series................. 1,157,121 74,057 (577,564) 653,614
PPM America/JNL Money Market Series.................... 43,176,521 606,298 (26,846,271) 16,936,548
PPM America/JNL Value Equity Series.................... 1,153,246 27,517 (219,113) 961,650
Salomon Brothers/JNL Global Bond Series................ 898,823 81,924 (416,558) 564,189
Salomon Brothers/JNL U.S. Government & Quality Bond
Series............................................... 852,084 32,389 (218,886) 665,587
T. Rowe Price/JNL Established Growth Series............ 2,278,033 118,612 (597,638) 1,799,007
T. Rowe Price/JNL International Equity Investment
Series............................................... 1,947,418 21,151 (131,846) 1,836,723
T. Rowe Price/JNL Mid-Cap Growth Series................ 2,905,453 80,471 (608,146) 2,377,778
</TABLE>
Transactions of trust shares for the period ending March 31, 1996 were as
follows:
<TABLE>
<CAPTION>
SHARES DISTRIBUTIONS SHARES NET
PURCHASED REINVESTED REDEEMED INCREASE
--------- ------------- -------- --------
<S> <C> <C> <C> <C>
JNL Aggressive Growth Series........................... 642,443 17,149 (10,167) 649,425
JNL Capital Growth Series.............................. 675,761 33,752 (18,489) 691,024
JNL Global Equities Series............................. 1,146,694 29,253 (2,063) 1,173,884
JNL/Alger Growth Series................................ 848,221 -- (15,332) 832,889
JNL/Phoenix Investment Counsel Balanced Series......... 422,105 9,270 (5,359) 426,016
JNL/Phoenix Investment Counsel Growth Series........... 191,590 10,203 (390) 201,403
PPM America/JNL High Yield Bond Series................. 575,596 26,997 (1,060) 601,533
PPM America/JNL Money Market Series.................... 7,080,475 234,137 (498,973) 6,815,639
PPM America/JNL Value Equity Series.................... 259,328 5,480 (1,185) 263,623
Salomon Brothers/JNL Global Bond Series................ 586,655 29,530 (6,247) 609,938
Salomon Brothers/JNL U.S. Government & Quality Bond
Series............................................... 293,083 7,487 (2,677) 297,893
T. Rowe Price/JNL Established Growth Series............ 723,123 65,547 (16,467) 772,203
T. Rowe Price/JNL International Equity Investment
Series............................................... 2,155,419 -- (2,549) 2,152,870
T. Rowe Price/JNL Mid-Cap Growth Series................ 783,616 21,614 (19,833) 785,397
</TABLE>
35
<PAGE> 90
- --------------------------------------------------------------------------------
JNL SERIES TRUST
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
NOTE 6. FOREIGN SECURITIES
Investing in securities of foreign companies and foreign governments
involves special risks and considerations not typically associated with
investing in U.S. companies and the U.S. Government. These risks include
revaluation of currencies and future adverse political and economic
developments. Moreover, securities of many foreign companies and foreign
governments and their markets may be less liquid and their prices more volatile
than those of securities of comparable U.S. companies and the U.S. Government.
NOTE 7. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
At December 31, 1996, the following Series had entered into "position
hedge" forward foreign currency exchange contracts that obligate the Series to
deliver and receive currencies at specified future dates. The unrealized
appreciation (depreciation) of $(4,194), $(71,007), $139,453, and $(15,606) in
the JNL Aggressive Growth Series, JNL Capital Growth Series, JNL Global Equities
Series, and Salomon Brothers/JNL Global Bond Series, respectively, is included
in net unrealized appreciation on foreign currency related items in the
accompanying financial statements. The terms of the open contracts are as
follows:
JNL AGGRESSIVE GROWTH SERIES
<TABLE>
<CAPTION>
SETTLEMENT U.S. $ VALUE U.S. $ VALUE
DATE CURRENCY TO BE DELIVERED AT 12/31/96 CURRENCY TO BE RECEIVED AT 12/31/96
- ---------- ------------------------ ------------ ----------------------- ------------
<C> <S> <C> <C> <C>
4/22/97 99,832 US $ $ 99,832 150,000 Deutsche Mark $ 98,200
4/22/97 150,000 Deutsche Mark 98,200 98,457 US $ 98,457
1/27/97 10,000 Finnish Marka 2,178 2,234 US $ 2,234
4/22/97 15,000 Finnish Marka 3,285 3,292 US $ 3,292
5/27/97 1,000,000 Finnish Marka 219,527 223,140 US $ 223,140
6/4/97 130,000 Finnish Marka 28,554 28,341 US $ 28,341
1/16/97 35,000 British Sterling Pound 59,943 54,600 US $ 54,600
4/22/97 4,000 British Sterling Pound 6,833 6,340 US $ 6,340
5/27/97 120,000 British Sterling Pound 204,783 201,576 US $ 201,576
6/04/97 47,000 British Sterling Pound 80,188 78,729 US $ 78,729
1/27/97 35,786 US $ 35,786 55,000,000 Italian Lire 36,203
1/27/97 70,000,000 Italian Lire 46,076 45,625 US $ 45,625
2/10/97 30,000,000 Italian Lire 19,734 19,526 US $ 19,526
5/12/97 50,000,000 Italian Lire 32,790 32,731 US $ 32,731
5/27/97 35,765 US $ 35,765 55,000,000 Italian Lire 36,056
5/27/97 110,000,000 Italian Lire 72,111 72,746 US $ 72,746
1/27/97 80,000 Swedish Kronor 11,744 12,164 US $ 12,164
3/11/97 235,000 Swedish Kronor 34,565 34,417 US $ 34,417
4/22/97 29,228 US $ 29,228 200,000 Swedish Kronor 29,474
4/22/97 400,000 Swedish Kronor 58,948 60,441 US $ 60,441
5/27/97 190,000 Swedish Kronor 28,046 28,847 US $ 28,847
6/04/97 577,000 Swedish Kronor 85,202 85,985 US $ 85,985
---------- ----------
$1,293,318 $1,289,124
========== ==========
</TABLE>
36
<PAGE> 91
- --------------------------------------------------------------------------------
JNL SERIES TRUST
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
JNL CAPITAL GROWTH SERIES
<TABLE>
<CAPTION>
SETTLEMENT U.S. $ VALUE U.S. $ VALUE
DATE CURRENCY TO BE DELIVERED AT 12/31/96 CURRENCY TO BE RECEIVED AT 12/31/96
- ---------- ------------------------ ------------ ----------------------- ------------
<C> <S> <C> <C> <C> <C>
1/16/97 115,000 British Sterling Pound $ 196,955 179,400 US $ $ 179,400
1/24/97 300,000 British Sterling Pound 513,711 465,090 US $ 465,090
5/27/97 125,000 British Sterling Pound 213,315 209,975 US $ 209,975
6/04/97 48,000 British Sterling Pound 81,894 80,403 US $ 80,403
-------- --------
$1,005,875 $ 934,868
======== ========
</TABLE>
JNL GLOBAL EQUITIES SERIES
<TABLE>
<CAPTION>
SETTLEMENT U.S. $ VALUE U.S. $ VALUE
DATE CURRENCY TO BE DELIVERED AT 12/31/96 CURRENCY TO BE RECEIVED AT 12/31/96
- ---------- ------------------------ ------------ ----------------------- ------------
<C> <S> <C> <C> <C> <C>
1/16/97 600,000 Swiss Franc $ 448,999 484,539 US $ $ 484,539
1/17/97 150,000 Swiss Franc 112,377 125,408 US $ 125,408
3/04/97 1,400,000 Swiss Franc 1,052,746 1,058,809 US $ 1,058,809
5/12/97 122,000 Swiss Franc 92,398 98,125 US $ 98,125
1/16/97 30,000 Deutsche Mark 19,516 19,840 US $ 19,840
1/17/97 275,000 Deutsche Mark 178,909 183,541 US $ 183,541
1/27/97 400,000 Deutsche Mark 260,402 272,067 US $ 272,067
3/04/97 1,400,000 Deutsche Mark 913,560 900,354 US $ 900,354
1/16/97 750,000 Finnish Marka 163,222 165,213 US $ 165,213
5/12/97 93,000 Finnish Marka 20,395 20,701 US $ 20,701
1/16/97 500,000 French Franc 96,458 97,656 US $ 97,656
1/16/97 164,211 US $ 164,211 100,000 British Sterling Pound 171,265
1/16/97 100,000 British Sterling Pound 171,265 156,000 US $ 156,000
1/17/97 345,213 US $ 345,213 210,000 British Sterling Pound 359,649
1/17/97 210,000 British Sterling Pound 359,649 324,971 US $ 324,971
1/16/97 115,250,000 Japanese Yen 997,420 1,057,276 US $ 1,057,276
3/11/97 9,000,000 Japanese Yen 78,489 80,413 US $ 80,413
6/17/97 21,000,000 Japanese Yen 185,716 189,309 US $ 189,309
1/17/97 6,400,000 Swedish Kronor 939,106 970,727 US $ 970,727
1/27/97 700,000 Swedish Kronor 102,758 106,727 US $ 106,727
11/03/97 118,000 South African Rand 22,925 22,597 US $ 22,597
---------- ----------
$6,725,734 $6,865,187
========== ==========
</TABLE>
37
<PAGE> 92
- --------------------------------------------------------------------------------
JNL SERIES TRUST
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
SALOMON BROTHERS/JNL GLOBAL BOND SERIES
<TABLE>
<CAPTION>
SETTLEMENT U.S. $ VALUE U.S. $ VALUE
DATE CURRENCY TO BE DELIVERED AT 12/31/96 CURRENCY TO BE RECEIVED AT 12/31/96
- ---------- ------------------------ ------------ ----------------------- ------------
<C> <S> <C> <C> <C>
1/22/97 19,327 Australian $ $ 15,357 15,268 US $ $ 15,268
1/22/97 645,849 Canadian $ 472,117 482,318 US $ 482,318
1/22/97 1,309,879 US $ 1,309,879 1,971,084 Deutsche Mark 1,282,766
1/22/97 2,030,669 Deutsche Mark 1,321,543 1,333,702 US $ 1,333,702
1/22/97 29,973 US $ 29,973 178,341 Danish Kroner 30,310
1/22/97 698,859 Danish Kroner 118,774 120,141 US $ 120,141
1/22/97 654,334 US $ 654,334 396,126 Irish Punts 671,193
1/22/97 508,142 Irish Punts 860,992 830,025 US $ 830,025
1/22/97 415,507 US $ 415,507 590,796 New Zealand $ 417,095
1/22/97 590,796 New Zealand $ 417,094 417,146 US $ 417,146
-------- --------
$5,615,570 $5,599,964
========== ==========
</TABLE>
NOTE 8. RECLASSIFICATION OF PERMANENT BOOK-TO-TAX DIFFERENCES
As a result of permanent book-to-tax differences, the following
reclassifications were made to the statement of assets and liabilities. For the
period ended December 31, 1996, accumulated net realized gain (loss) on
investments and foreign currency related items was increased (decreased) by
$14,933, $29,422, $5,572, ($188), ($50,543), $2,022, $13,147, ($156,109) and
($39,044), respectively, for the JNL Aggressive Growth Series, JNL Capital
Growth Series, JNL Global Equities Series, JNL/Phoenix Investment Counsel
Balanced Series, Salomon Brothers/JNL Global Bond Series, Salomon Brothers/JNL
U.S. Government & Quality Bond Series, T. Rowe Price/JNL Established Growth
Series, T. Rowe Price/JNL International Equity Investment Series and T. Rowe
Price/JNL Mid-Cap Growth Series; undistributed net investment income was
increased (decreased) by ($14,933), ($29,422), ($5,572), $3,590, $1,017, $188,
$50,543, ($2,022), ($13,147), $156,109 and $139,001, respectively, for JNL
Aggressive Growth Series, JNL Capital Growth Series, JNL Global Equities Series,
JNL/Alger Growth Series, JNL/Eagle SmallCap Equity Series, JNL/Phoenix
Investment Counsel Balanced Series, Salomon Brothers/JNL Global Bond Series,
Salomon Brothers/JNL U.S. Government & Quality Bond Series, T. Rowe Price/JNL
Established Growth Series, T. Rowe Price/JNL International Equity Investment
Series and T. Rowe Price/JNL Mid-Cap Growth Series; and net increases
(decreases) of ($3,590), ($1,017) and ($99,957), respectively, for the JNL/Alger
Growth Series, JNL/Eagle SmallCap Equity Series and T. Rowe Price/JNL Mid-Cap
Growth Series, were reclassified in the Series' paid-in capital.
38
<PAGE> 93
JNL AGGRESSIVE GROWTH SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1996
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<S> <C> <C>
COMMON STOCKS -- 83.26%
- -----------------------------------------
FINLAND -- 0.81%
- -----------------------------------------
DURABLE GOODS -- 0.81%
Metra Oy, B Shares..................... 4,307 $ 241,567
FRANCE -- 0.31%
- -----------------------------------------
COMPUTER SERVICES -- 0.31%
Axime (a).............................. 806 93,206
ITALY -- 0.43%
- -----------------------------------------
BANKS -- 0.06%
Banca Popolare Di Bergamo.............. 1,047 17,254
TELECOMMUNICATIONS -- 0.37%
Telecom Italia Mobile (a).............. 43,732 110,555
-----------
Total Italy.......................... 127,809
MEXICO -- 0.05%
- -----------------------------------------
BROKERAGE -- 0.05%
Grupo Financiero Inbursa, S.A. de
C.V. .................................. 4,300 14,694
SWEDEN -- 0.66%
- -----------------------------------------
HOLDING COMPANY -- 0.28%
Kinnevik AB, B Shares.................. 3,018 83,195
SECURITY SYSTEMS -- 0.22%
Securitas AB, B Shares................. 2,307 67,148
TELECOMMUNICATIONS -- 0.16%
Netcom Systems AB (a).................. 2,940 47,636
-----------
Total Sweden......................... 197,979
UNITED KINGDOM -- 1.74%
- -----------------------------------------
BUSINESS SERVICES -- 1.24%
Rentokil Group......................... 49,326 371,825
DRUGS -- 0.06%
Glaxo Wellcome......................... 1,128 18,359
FINANCIAL -- 0.44%
Barclays............................... 7,653 131,177
-----------
Total United Kingdom................. 521,361
UNITED STATES -- 79.26%
- -----------------------------------------
AEROSPACE & AIRCRAFT -- 0.66%
U.S. Robotics Corp. (a) ............... 2,725 196,200
APPAREL -- 3.86%
Abercrombie & Fitch Co. (a)............ 15,225 251,212
Nike, Inc., Class B.................... 6,975 416,756
Nordstrom, Inc. ....................... 1,150 40,753
Gucci Group N.V.-N.Y................... 6,650 424,769
Tommy Hilfiger Corp. (a)............... 400 19,200
-----------
1,152,690
BANKS -- 7.50%
Chase Manhattan Corp. ................. 3,375 301,219
Wells Fargo & Co. ..................... 7,191 1,939,772
-----------
2,240,991
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
- -----------------------------------------
UNITED STATES (CONTINUED)
- -----------------------------------------
BUSINESS SERVICES -- 1.51%
Intelliquest Information Group, Inc.
(a).................................... 6,750 $ 153,563
Lamar Advertising Co. (a).............. 5,475 132,769
Outdoor Systems Inc. (a)............... 5,175 145,547
Quintiles Transnational Corp. (a)...... 75 4,969
West Teleservices Corp. (a)............ 625 14,219
-----------
451,067
CHEMICALS -- 3.70%
Lilly Eli & Co. ....................... 7,475 545,675
Monsanto Co. .......................... 8,950 347,931
Praxair, Inc. ......................... 1,300 59,963
SmithKline Beecham PLC -- ADR.......... 2,225 151,300
-----------
1,104,869
COMPUTERS & TECHNOLOGY -- 23.73%
Baan Co NVF (a)........................ 425 14,769
Black Box Corp. (a).................... 825 34,031
Cisco Systems, Inc. (a)................ 16,025 1,019,591
Documentum, Inc. (a)................... 950 32,062
Ecsoft Group, PLC (a).................. 4,800 46,200
First Data Corp. ...................... 16,100 587,650
HBO & Co. ............................. 16,525 981,172
HNC Software, Inc. (a)................. 6,600 206,250
Indus Group, Inc. (a).................. 3,775 97,206
Intel Corp. ........................... 3,150 412,453
Intelligroup, Inc. (a)................. 20,000 220,000
International Business Machines
Corp. ............................... 3,250 490,750
JDA Software, Inc. (a)................. 6,200 176,700
Keane, Inc. (a)........................ 10,000 317,500
Meta Group, Inc. (a)................... 9,150 247,050
Microsoft Corp. (a).................... 1,500 123,938
Netscape Communications Corp. (a)...... 5,600 318,500
Oracle Systems Corp. (a)............... 1,650 68,887
Parametric Technology Corp. (a)........ 9,875 507,328
Peoplesoft, Inc. (a)................... 11,550 553,678
Sapient Corp. (a)...................... 800 33,700
Sun Microsystems, Inc. (a)............. 9,750 250,453
Verifone, Inc. (a)..................... 3,000 88,500
Xylan Corp. (a)........................ 9,150 258,488
-----------
7,086,856
CONSTRUCTION -- 0.12%
Fastenal Co. .......................... 825 37,744
DRUGS -- 2.31%
Centocor, Inc (a)...................... 14,700 525,525
Glaxo Wellcome -- ADR.................. 1,175 37,306
Pharmaceutical Product Development,
Inc. (a)............................. 5,050 127,513
-----------
690,344
</TABLE>
See notes to the financial statements.
39
<PAGE> 94
JNL AGGRESSIVE GROWTH SERIES
SCHEDULE OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
- -----------------------------------------
UNITED STATES (CONTINUED)
- -----------------------------------------
ELECTRONICS -- 2.79%
Advanced Micro Devices, Inc. (a)....... 950 $ 24,462
Analog Devices, Inc. (a)............... 8,425 285,397
Cambridge Technology Partners, Inc.
(a).................................. 425 14,264
Etec Systems, Inc. (a)................. 750 28,688
Pittway Corp., Class A (a)............. 8,975 480,163
-----------
832,974
FINANCIAL SERVICES -- 5.05%
Associates First Capital Corp. ........ 7,025 309,978
Concord EFS, Inc. (a).................. 2,775 78,394
First USA Paymentech, Inc. (a)......... 29,725 1,006,935
National Processing, Inc. (a).......... 5,575 89,200
Schwab, Charles Corp. ................. 750 24,000
-----------
1,508,507
FOOD SERVICE & RESTAURANT -- 0.05%
Papa John's International, Inc. (a).... 412 13,905
GAMES & TOYS -- 0.15%
Galoob Toys, Inc. (a).................. 3,125 43,750
HEALTH PRODUCTS -- 3.62%
Bristol-Myers Squibb Co. .............. 2,375 258,281
Fresenius Medical Care -- ADR (a)...... 8,225 231,328
Omnicare, Inc. ........................ 12,275 394,334
Warner Lambert Co. .................... 2,650 198,750
-----------
1,082,693
HOTEL & MOTEL -- 2.83%
Doubletree Corp. (a)................... 5,725 257,625
Extended Stay America, Inc. (a)........ 950 19,119
Hospitality Franchise System, Inc.
(a).................................. 9,500 567,625
-----------
844,369
INSURANCE -- 1.62%
Compdent Corp. (a)..................... 5,300 186,825
SunAmerica, Inc. ...................... 1,700 75,438
UNUM Corp. ............................ 3,075 222,169
-----------
484,432
MACHINERY -- 1.00%
Rofin-Sinar Technologies, Inc. (a)..... 25,450 299,037
MEDICAL SERVICES & SUPPLIES -- 0.99%
Target Therapeutics, Inc. (a).......... 7,025 295,050
MINING -- 1.00%
Potash Corp. of Saskatchewan, Inc. .... 3,520 299,200
OFFICE EQUIPMENT & SUPPLIES -- 0.16%
Danka Business Systems PLC............. 1,400 49,525
OIL & GAS -- 1.26%
Triton Energy Corp. (a)................ 7,750 375,875
REAL ESTATE -- 0.26%
Redwood Trust, Inc. ................... 2,050 76,363
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
- -----------------------------------------
UNITED STATES (CONTINUED)
- -----------------------------------------
RECREATION -- 0.07%
Universal Outdoor Holdings, Inc. (a)... 900 $ 21,150
RESTAURANTS -- 0.15%
Planet Hollywood International, Inc.
(a).................................... 2,325 45,919
RETAIL -- 0.20%
Linen N Things, Inc. (a)............... 3,050 59,856
TELECOMMUNICATIONS -- 13.62%
Ascend Communications, Inc. (a)........ 6,100 378,962
Cincinnati Bell, Inc. ................. 12,250 754,906
Comnet Cellular, Inc. (a).............. 1,750 48,781
Lucent Technologies, Inc. ............. 4,000 185,000
MFS Communications Co., Inc. (a)....... 19,747 1,076,212
Millicom International Cellular S.A.
(a).................................. 1,050 33,731
Nokia Corp. ........................... 4,775 275,159
Paging Network, Inc. (a)............... 5,900 89,975
Palmer Wireless, Inc. (a).............. 5,800 60,900
Premiere Technologies, Inc. (a)........ 1,225 30,625
Pricellular Corp., Class A (a)......... 6,375 73,312
Telecomunicacoes Brasileiras SA........ 1,475 112,837
Teletech Holdings, Inc. (a)............ 12,600 327,600
WorldCom, Inc. (a)..................... 23,800 620,287
-----------
4,068,287
TRANSPORTATION -- 0.26%
Wisconsin Central Transportation Corp.
(a).................................... 1,950 77,269
WHOLESALE -- 0.79%
Alco Standard Corp. (a)................ 4,575 236,184
-----------
Total United States.................. 23,675,106
-----------
Total Common Stocks
(cost $23,035,935)............... 24,871,722
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
---------
<S> <C> <C>
SHORT TERM INVESTMENTS -- 16.74%
- --------------------------------------
U.S. TREASURY BILLS -- 0.67%
5.11%, 01/09/1997................... $ 200,000 199,773
COMMERCIAL PAPER -- 16.07%
Federal Home Discount Note
6.50%, 01/02/1997................. 4,800,000 4,799,133
----------
Total Short Term Investments
(cost $4,998,906)............. 4,998,906
----------
TOTAL INVESTMENTS -- 100%
- --------------------------------------
(cost $28,034,841).................. $29,870,628
==========
</TABLE>
- -------------------------
(a) Non-income producing.
See notes to the financial statements.
40
<PAGE> 95
JNL CAPITAL GROWTH SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1996
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<S> <C> <C>
COMMON STOCKS -- 89.31%
- ----------------------------------------
FRANCE -- 0.47%
- ----------------------------------------
CONSUMER PRODUCTS -- 0.47%
Grand Optical Photoservice............ 1,086 $ 176,029
UNITED KINGDOM -- 12.61%
- ----------------------------------------
BUSINESS SERVICES -- 2.89%
Rentokil Group........................ 144,216 1,087,117
CONFECTIONS & BEVERAGES -- 4.01%
PizzaExpress PLC...................... 166,850 1,507,853
FOOD SERVICE/RESTAURANT -- 5.71%
J.D. Wetherspoon PLC.................. 108,196 2,150,203
-----------
Total United Kingdom................ 4,745,173
UNITED STATES -- 76.23%
- ----------------------------------------
AUTOMOBILES & PARTS -- 0.69%
O'Reilly Automotive, Inc.(a).......... 8,125 260,000
BANKS -- 0.51%
Fifth Third Bancorp................... 2,700 169,594
First Empire State Corp. ............. 75 21,600
-----------
191,194
BROADCASTING & COMMUNICATIONS -- 0.80%
Univision Communications, Inc. (a).... 8,100 299,700
BUILDING MATERIALS -- 1.50%
Barnett, Inc.(a)...................... 7,675 209,144
Boston Scientific Corp.(a)............ 5,950 357,000
-----------
566,144
BUSINESS SERVICES -- 4.76%
CUC International, Inc.(a)............ 39,388 935,465
Paychex, Inc. ........................ 4,075 209,608
Pet Food Warehouse, Inc.(a)........... 80,800 338,350
Profit Recovery Group International,
Inc.(a)............................. 11,525 184,400
Robert Half International, Inc.(a).... 3,575 122,891
-----------
1,790,714
COMPUTERS & SOFTWARE -- 0.75%
Sanchez Computer Associates,
Inc.(a)............................... 425 3,347
Safeguard Scientifics, Inc.(a)........ 8,800 279,400
-----------
282,747
CONSUMER PRODUCTS -- 4.13%
CoinMachine Laundry Corp.(a).......... 48,150 866,700
Culligan Water Technologies,
Inc.(a)............................. 16,925 685,462
-----------
1,552,162
CONTAINERS -- 1.93%
Sealed Air Corp.(a)................... 17,475 727,399
DRUGS -- 0.98%
Depotech Corp.(a)..................... 11,425 187,084
Teva Pharmaceutical Industries --
ADR................................. 3,600 180,900
-----------
367,984
ELECTRONICS -- 0.49%
Littlefuse, Inc.(a)................... 3,825 185,513
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
- ----------------------------------------
UNITED STATES (CONTINUED)
- ----------------------------------------
FINANCIAL SERVICES -- 6.90%
APS Holding Corp.(a).................. 7,950 $ 123,225
Associates First Capital Corp. ....... 8,425 371,753
Concord EFS, Inc.(a).................. 4,475 126,419
First USA Paymentech, Inc.(a)......... 8,725 295,559
Insignia Financial Group, Inc.(a)..... 57,525 1,294,312
Schwab, Charles Corp. ................ 12,050 385,600
-----------
2,596,868
FOOD SERVICE -- 4.18%
JP Foodservice, Inc.(a)............... 14,750 411,156
Papa John's International, Inc.(a).... 34,387 1,160,561
-----------
1,571,717
HEALTH PRODUCTS & CARE -- 0.25%
Forest Labs, Inc.(a).................. 2,825 92,519
HOTEL & MOTEL -- 6.59%
Choice Hotels Holdings, Inc.(a)....... 22,550 397,444
Doubletree Corp.(a)................... 8,000 360,000
Hospitality Franchise Systems,
Inc.(a)............................. 28,825 1,722,294
-----------
2,479,738
HOUSING -- 1.24%
Karrington Health, Inc.(a)............ 12,775 159,688
Omnicare, Inc. ....................... 9,575 307,597
-----------
467,285
INSURANCE -- 2.22%
Protective Life Corp. ................ 11,775 469,528
UICI(a)............................... 11,250 365,625
-----------
835,153
MACHINERY -- 0.67%
MSC Industrial Direct Co., Inc.(a).... 6,850 253,450
MEDICAL SERVICES & SUPPLIES -- 0.73%
Fresenius Medical Care -- ADR (a)..... 9,750 274,219
MINING -- 1.38%
Minerals Technologies, Inc. .......... 12,700 520,700
OFFICE EQUIPMENT & SUPPLIES -- 2.82%
Viking Office Products, Inc. (a)...... 39,725 1,060,161
RECREATION -- 2.10%
Family Golf Centers, Inc.(a).......... 26,200 789,275
RESTAURANTS -- 0.46%
Planet Hollywood International,
Inc.(a)............................... 8,800 173,800
RETAIL -- 13.37%
Fastenal Co. ......................... 55,375 2,533,406
Global DirectMail Corp.(a)............ 40,025 1,746,091
Petco Animal Supplies(a).............. 36,100 749,075
-----------
5,028,572
TELECOMMUNICATIONS -- 11.22%
Cincinnati Bell, Inc. ................ 2,900 178,713
Comnet Cellular, Inc.(a).............. 9,950 277,356
</TABLE>
See notes to the financial statements.
41
<PAGE> 96
JNL CAPITAL GROWTH SERIES
SCHEDULE OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
- ----------------------------------------
UNITED STATES (CONTINUED)
- ----------------------------------------
TELECOMMUNICATIONS (CONTINUED)
- ----------------------------------------
Millicom International Cellular
SA(a)............................... 11,250 $ 361,403
Omnipoint Corp.(a).................... 27,650 532,263
Paging Network, Inc.(a)............... 115,625 1,763,281
Pricellular Corp. -- Class A(a)....... 34,207 393,381
Teletech Holdings, Inc.(a)............ 27,450 713,700
-----------
4,220,097
TRANSPORTATION -- 3.45%
Wisconsin Central Transportation
Corp.(a).............................. 32,725 1,296,727
UTILITIES -- 2.11%
Trigen Energy Corp. .................. 27,675 795,656
-----------
Total United States................. 28,679,494
-----------
Total Common Stocks
(cost $30,999,299).............. 33,600,696
-----------
OPTIONS -- 0.19%
- ----------------------------------------
WARRANTS -- 0.19%
Littlefuse, Inc. (a) (Expire
12/27/2001)
(cost $48,137)...................... 1,850 73,075
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
--------- ------
<S> <C> <C>
SHORT-TERM INVESTMENTS -- 10.50%
- -------------------------------------
U.S. TREASURY BILL -- 0.40%
5.11%, 01/09/1997.................. $ 150,000 $ 149,830
COMMERCIAL PAPER -- 10.10%
Federal Home Discount Note
6.50%, 01/02/1997................ 3,800,000 3,799,314
----------
Total Short-Term Investments
(cost $3,949,144)............ 3,949,144
----------
TOTAL INVESTMENTS -- 100%
- -------------------------------------
(cost $34,996,580)................. $37,622,915
==========
</TABLE>
- -------------------------
(a) Non-income producing.
See notes to the financial statements.
42
<PAGE> 97
JNL GLOBAL EQUITIES SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1996
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<S> <C> <C>
COMMON STOCKS -- 98.51%
- --------------------------------------
AUSTRALIA -- 1.75%
- --------------------------------------
HOTELS -- 1.07%
Crown Ltd.(a)....................... 250,726 $ 524,131
LEISURE -- 0.68%
Aristocrat Leisure Ltd.............. 127,384 331,091
----------
Total Australia................... 855,222
BELGIUM -- 0.50%
- --------------------------------------
BANKS -- 0.18%
Credit Communal Holding Dexia(a).... 962 87,778
TELECOMMUNICATIONS -- 0.32%
Telinfo SA(a)....................... 3,799 154,941
----------
Total Belgium..................... 242,719
BRAZIL -- 0.26%
- --------------------------------------
TOBACCO -- 0.26%
Souza Cruz SA....................... 19,000 124,704
FINLAND -- 3.45%
- --------------------------------------
COMPUTERS & SOFTWARE -- 0.69%
Tietotehdas Oy, Class B............. 3,978 336,314
CONSUMER PRODUCTS -- 0.67%
Amer Group Ltd...................... 6,327 130,666
Metra AB............................ 3,566 200,006
----------
330,672
FOOD SERVICE -- 2.09%
Huhtamaki Oy........................ 14,290 664,796
Raision Tehtaat Oy.................. 5,678 357,961
----------
1,022,757
----------
Total Finland..................... 1,689,743
FRANCE -- 2.39%
- --------------------------------------
BUSINESS SERVICES -- 1.18%
Cap Gemini.......................... 6,284 303,875
Sligos.............................. 2,081 272,734
----------
576,609
COMPUTER SERVICES -- 0.77%
Axime(a)............................ 3,290 380,457
CONSUMER GOODS -- 0.41%
Grand Optical-Photoservice.......... 1,223 198,235
FURNITURE -- 0.02%
Moulinex(a)......................... 263 6,057
RECREATION -- 0.01%
Club Mediterranee................... 86 5,582
----------
Total France...................... 1,166,940
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
- --------------------------------------
GERMANY -- 5.00%
- --------------------------------------
APPAREL -- 0.90%
Eurobike AG (a)..................... 2,408 $ 73,548
Wolford AG.......................... 3,016 364,867
----------
438,415
CHEMICALS -- 2.95%
BASF AG............................. 14,047 541,140
SGL Carbon AG....................... 1,338 168,685
Hoechst AG.......................... 15,500 732,291
----------
1,442,116
RETAIL -- 1.15%
Adidas AG........................... 6,531 564,481
----------
Total Germany..................... 2,445,012
HONG KONG -- 0.28%
- --------------------------------------
BUILDING EQUIPMENT -- 0.02%
New World Infrastructure Ltd.(a).... 3,400 9,935
HOLDING COMPANY -- 0.26%
First Pacific Company Ltd.(a)....... 35,000 45,478
JCG Holdings Limited................ 86,000 83,949
----------
129,427
----------
Total Hong Kong................... 139,362
INDONESIA -- 0.21%
- --------------------------------------
CONFECTIONS & BEVERAGES -- 0.21%
HM Sampoerna........................ 19,000 101,355
ITALY -- 1.91%
- --------------------------------------
AGRICULTURAL MACHINERY -- 0.59%
Parmalat Finanziaria SPA............ 188,469 288,232
FINANCIAL SERVICES -- 0.34%
BCA Pop Di Milano................... 33,268 168,862
MANUFACTURING -- 0.41%
Pagnossin SPA....................... 54,000 200,053
TELECOMMUNICATIONS -- 0.57%
Telecom Italia Mobile(a)............ 56,638 143,182
Telecom Italia SPA.................. 52,359 135,988
----------
279,170
----------
Total Italy....................... 936,317
JAPAN -- 4.90%
- --------------------------------------
AUTOMOBILE & PARTS -- 0.65%
Honda Motor Co...................... 8,000 228,650
Isuzu Motors Limited................ 14,000 62,257
Yamaha Motor Co..................... 3,000 26,941
----------
317,848
</TABLE>
See notes to the financial statements.
43
<PAGE> 98
JNL GLOBAL EQUITIES SERIES
SCHEDULE OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
- --------------------------------------
JAPAN -- (CONTINUED)
- --------------------------------------
BUILDING EQUIPMENT -- 0.21%
Kawasaki Heavy Industries........... 25,000 $ 103,402
COMPUTERS & SOFTWARE -- 1.02%
NTT Data Communications Systems
Company(a)........................ 17 497,625
DRUGS -- 0.66%
Eisai Limited....................... 11,000 216,562
Takeda Chemical Industries.......... 5,000 104,913
----------
321,475
ELECTRONICS -- 0.19%
Sony Corp........................... 1,400 91,754
HOUSEHOLD FURNITURE & APPLIANCES --
0.07%
Amway Japan Limited................. 1,100 35,334
REAL ESTATE -- 0.36%
Mitsubishi Estate Co. Ltd........... 12,000 123,305
Mitsui Fudosan Co................... 6,000 60,098
----------
183,403
RETAIL -- 0.79%
Credit Saison Co.................... 9,900 221,406
Hankyu Department Stores............ 6,000 59,580
Isetan.............................. 8,000 103,618
----------
384,604
TELECOMMUNICATIONS -- 0.95%
Nippon Telegraph & Telephone
Corp.............................. 61 462,464
----------
Total Japan....................... 2,397,909
NETHERLANDS -- 4.92%
- --------------------------------------
BUILDING & CONSTRUCTION -- 0.33%
Hunter Douglas N.V.................. 2,433 164,173
COMPUTERS & SOFTWARE -- 1.16%
Getronics N.V....................... 20,865 566,793
CONSUMER PRODUCTS -- 0.91%
Nutricia Verenigde Bedrijven........ 2,929 445,330
ELECTRONICS -- 0.88%
Philips Electronics................. 10,617 430,460
ENTERTAINMENT -- 0.25%
Endomol Entertainment (a)........... 3,686 122,760
OFFICE EQUIPMENT & SUPPLIES -- 0.47%
Oce Grinten......................... 2,105 228,727
PRINTING & PUBLISHING -- 0.92%
Wolters Kluwer N.V.................. 3,374 448,499
----------
Total Netherlands................. 2,406,742
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
- --------------------------------------
NORWAY -- 0.79%
- --------------------------------------
ENVIRONMENTAL SERVICES -- 0.31%
Tomra System AS..................... 9,800 $ 151,340
TELECOMMUNICATIONS -- 0.48%
Tandberg AS (a)..................... 7,635 235,813
----------
Total Norway...................... 387,153
PHILIPPINES -- 0.35%
- --------------------------------------
BUILDING & CONSTRUCTION -- 0.35%
Hi-Cement Corp.(a).................. 521,500 172,511
PORTUGAL -- 0.34%
- --------------------------------------
BUILDING & CONSTRUCTION -- 0.34%
Cimpor-Cimentos de Portugal -- SA... 7,656 164,822
SINGAPORE -- 1.28%
- --------------------------------------
TELECOMMUNICATIONS -- 1.28%
Datacraft Asia Ltd.................. 376,000 627,920
SOUTH AFRICA -- 0.10%
- --------------------------------------
METALS & MINING -- 0.10%
De Beers Centenary Link AG.......... 1,727 49,464
SOUTH KOREA -- 0.01%
- --------------------------------------
BANKS -- 0.01%
Kookmin Bank........................ 324 5,945
SPAIN -- 0.30%
- --------------------------------------
COMMERCIAL SERVICES -- 0.30%
Prosegur CIA de Seguridad SA(a)..... 15,975 147,660
SWEDEN -- 10.35%
- --------------------------------------
BANKS -- 0.55%
Bure Investment AB.................. 9,821 116,644
Nordbanken AB....................... 3,110 94,168
Sparbanken Sverige AB............... 3,416 58,604
----------
269,416
BUILDING & CONSTRUCTION -- 0.19%
Incentive AB........................ 1,278 92,759
COMMERCIAL SERVICES -- 1.60%
Securitas AB, Class B............... 26,891 782,689
COMPUTERS & SOFTWARE -- 1.76%
Enator AB(a)........................ 4,965 127,039
Enator AB(a)........................ 993 25,044
Frontec AB, Class B(a).............. 9,481 164,043
WM - Data AB........................ 6,301 545,109
----------
861,235
ELECTRONICS -- 1.96%
Assa Abloy AB(a).................... 52,840 960,741
</TABLE>
See notes to the financial statements.
44
<PAGE> 99
JNL GLOBAL EQUITIES SERIES
SCHEDULE OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
- --------------------------------------
SWEDEN -- (CONTINUED)
- --------------------------------------
HEALTH PRODUCTS & CARE -- 2.49%
Althin Medical AB, Class B.......... 3,964 $ 86,024
Nobel Bio-Care AB................... 17,824 313,623
Medical Invest Svenska AB -- Ser. A
(a)............................... 3,711 97,946
Medical Invest Svenska AB -- Ser. B
(a)............................... 27,118 719,711
----------
1,217,304
HOLDING COMPANY -- 0.43%
Kinnevik AB......................... 7,623 210,139
INDUSTRIAL MACHINERY -- 0.05%
Atlas Copco AB...................... 949 22,960
NON-FERROUS METALS -- 0.10%
Sandvik AB.......................... 1,847 49,832
REAL ESTATE -- 0.96%
Tornet Fastighets AB(a)............. 30,814 469,898
TELECOMMUNICATIONS -- 0.26%
Ericsson (LM) Tel................... 4,046 125,179
----------
Total Sweden...................... 5,062,152
SWITZERLAND -- 6.75%
- --------------------------------------
BANKS -- 1.03%
Credit Suisse Group................. 4,894 502,746
BUILDING & CONSTRUCTION -- 0.37%
Sulzer AG........................... 313 180,761
BUSINESS SERVICES -- 0.29%
Fotolabo S.A........................ 84 32,634
SGS Holding......................... 44 108,151
----------
140,785
DRUGS -- 4.55%
Novartis AG (a)..................... 1,029 1,178,758
Roche Holding AG.................... 135 1,050,448
----------
2,229,206
INSURANCE -- 0.21%
SCHW Ruckversicher.................. 98 104,626
TRANSPORTATION -- 0.30%
SwissAir............................ 180 145,641
----------
Total Switzerland................. 3,303,765
THAILAND -- 0.14%
- --------------------------------------
BANKS -- 0.14%
Bangkok Bank Public Co. Ltd......... 7,200 69,625
UNITED KINGDOM -- 23.09%
- --------------------------------------
AUTOMOBILES -- 0.09%
Mahindra & Mahindra Ltd............. 3,807 42,829
BUSINESS SERVICES -- 8.59%
- --------------------------------------
CMG, (a)............................ 35,955 520,634
Freepages Group PLC (a)............. 123,635 91,079
Hays PLC............................ 132,309 1,273,902
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
- --------------------------------------
UNITED KINGDOM -- (CONTINUED)
- --------------------------------------
BUSINESS SERVICES -- (CONTINUED)
- --------------------------------------
Page, Michael Group................. 8,729 $ 62,062
Rentokil Group...................... 299,007 2,253,950
----------
4,201,627
CHEMICALS -- 0.16%
Victrex............................. 17,447 80,704
COMPUTERS & SOFTWARE -- 2.12%
BTG................................. 58,900 459,131
Misys PLC........................... 26,216 498,989
Sema Group Systems AG............... 4,350 81,232
----------
1,039,352
CONSUMER PRODUCTS -- 0.37%
Compass Group PLC................... 7,436 78,984
London International Group.......... 36,736 103,845
----------
182,829
DRUGS -- 0.89%
Glaxo Wellcome PLC.................. 10,168 165,489
SmithKline Beecham -- ADR........... 19,464 269,435
----------
434,924
ELECTRONICS -- 1.07%
Electrocomponents................... 66,131 522,296
ENTERTAINMENT -- 0.77%
London Clubs International PLC...... 72,264 376,362
FINANCIAL -- 1.68%
Barclays............................ 19,057 326,649
JBA Holdings PLC.................... 25,709 235,640
Lloyd's TSB Group................... 35,000 258,438
----------
820,727
FOOD SERVICE -- 0.75%
Harvey Nichols PLC.................. 49,582 295,606
Wetherspoon PLC..................... 3,662 72,776
----------
368,382
MANUFACTURING -- 0.88%
Lucas Varity PLC, (a)............... 112,800 430,947
METALS & MINING -- 1.46%
Powerscreen International, PLC...... 73,539 711,830
PRINTING & PUBLISHING -- 2.15%
Dorling Kindersley.................. 7,795 54,720
EMAP................................ 2,114 26,674
Lagardere S.C.A..................... 25,512 700,185
Pearson PLC......................... 5,614 71,654
WPP Group........................... 45,864 198,794
----------
1,052,027
RETAIL -- 1.23%
ASDA Group.......................... 228,750 482,033
Thorn PLC........................... 27,165 117,744
----------
599,777
</TABLE>
See notes to the financial statements.
45
<PAGE> 100
JNL GLOBAL EQUITIES SERIES
SCHEDULE OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
- --------------------------------------
UNITED KINGDOM -- (CONTINUED)
- --------------------------------------
TRANSPORTATION -- 0.88%
Stagecoach Holdings................. 35,805 $ 429,390
----------
Total United Kingdom.............. 11,294,003
UNITED STATES -- 29.44%
- --------------------------------------
AGRICULTURAL EQUIPMENT -- 0.58%
New Holland NV (a).................. 13,500 281,812
APPAREL -- 0.24%
Nike, Inc. Class B.................. 1,925 115,019
AUTOMOBILE & PARTS -- 0.33%
Lucas Varity PLC -- ADR (a)......... 425 16,150
Tata Engineering.................... 8,025 75,490
Tata Engineering & Locomotive Co.
Limited (144a).................... 700 6,585
Tata Engineering & Locomotive Co.
Limited (144a).................... 5,968 63,410
----------
161,635
BANKS -- 2.69%
Banco Frances Del Rio La Plata --
ADR............................... 7,791 214,259
Citicorp............................ 1,200 123,600
Wells Fargo & Co.................... 3,633 980,002
----------
1,317,861
BROADCAST & COMMUNICATIONS -- 0.93%
Canwest Global Communications
Corp.............................. 6,150 63,037
Grupo Televisa SA................... 9,825 251,766
TV Filme, Inc.(a)................... 10,825 138,019
----------
452,822
BUSINESS SERVICES -- 1.04%
Select Appointments Holdings PLC --
ADR (a)........................... 44,300 509,450
COMPUTERS & TECHNOLOGY -- 3.19%
Cisco Systems, Inc. (a)............. 3,175 202,009
Dassault Systemes SA(a)............. 1,975 91,344
First Data Corp..................... 7,200 262,800
International Business Machines
Corp.............................. 3,475 524,725
Parametric Technology Corp. (a)..... 9,050 464,944
SunGuard Data Systems, Inc.(a)...... 400 15,800
----------
1,561,622
CONFECTIONS & BEVERAGES -- 0.45%
Pepsico, Inc........................ 7,500 219,375
DRUGS -- 0.63%
Elan Corp.(a)....................... 9,325 310,056
ELECTRICAL -- 0.80%
Raychem Corp........................ 2,900 232,363
UCar International, Inc.(a)......... 4,175 157,084
----------
389,447
ELECTRONICS -- 1.58%
Philips Electronics................. 19,324 772,960
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
- --------------------------------------
UNITED STATES -- (CONTINUED)
- --------------------------------------
ENERGY -- 0.18%
Gazprom -- ADR (144a) (a)........... 2,750 $ 48,813
Mosenergo -- ADR (144a) (a)......... 1,325 40,148
----------
88,961
FINANCIAL SERVICES -- 0.15%
Associates First Capital Corp....... 1,650 72,806
FOOD SERVICE/RESTAURANT -- 0.13%
Disco SA(a)......................... 2,300 64,975
HEALTH PRODUCTS & CARE -- 2.75%
Grupo Casa Autrey -- ADR............ 11,950 233,025
Pfizer Inc.......................... 4,100 339,788
Physio -- Control International
Corp. (a)......................... 12,925 290,813
SmithKline Beecham -- ADR........... 4,150 282,200
Vivra, Inc. (a)..................... 7,175 198,209
----------
1,344,035
HOTEL & MOTEL -- 0.48%
Hospitality Franchise Systems,
Inc.(a)........................... 1,100 65,725
Indian Hotels Co.(a)................ 5,161 102,067
Mandarin Oriental International
Ltd............................... 47,200 66,552
----------
234,344
MACHINERY -- 2.15%
Pfeiffer Vacuum Technology AG(a).... 18,825 338,850
Rofin-Sinar Technologies, Inc.(a)... 60,675 712,931
----------
1,051,781
MEDICAL-HOSPITAL SERVICES -- 1.70%
Fresenius Medical Care -- ADR(a).... 29,625 833,203
OFFICE EQUIPMENT & SUPPLIES -- 0.80%
Danka Business Systems PLC.......... 11,100 392,663
OIL -- 0.92%
Bouygues Offshore SA, (a)........... 21,225 273,272
Oil Co Lukoil (a)................... 1,075 48,295
Tatneft -- ADR (a).................. 2,750 126,500
----------
448,067
RETAIL -- 0.93%
Santa Isabel SA..................... 2,900 65,612
Gucci Group N.V.-N.Y................ 6,100 389,637
----------
455,249
TELECOMMUNICATIONS -- 5.74%
Airtouch Communications, Inc.(a).... 1,375 34,719
Ericsson LM Tel Co.................. 12,100 365,269
Korean Mobile Telecommunications,
Inc. (144a)(a).................... 13,442 173,059
Lucent Technologies, Inc............ 10,050 464,813
MFS Communications, Inc.(a)......... 5,300 288,850
Millicom International Cellular
SA(a)............................. 7,100 228,088
Nokia Corp. -- ADR.................. 6,825 393,291
Paging Network, Inc.(a)............. 75 1,144
Portugal Telecom SA -- ADR.......... 3,600 101,700
</TABLE>
See notes to the financial statements.
46
<PAGE> 101
JNL GLOBAL EQUITIES SERIES
SCHEDULE OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
- --------------------------------------
UNITED STATES -- (CONTINUED)
- --------------------------------------
TELECOMMUNICATIONS -- (CONTINUED)
- --------------------------------------
Telecom Argentina Stet France -- ADR
Class B........................... 75 $ 3,028
Telefonos De Argentina -- ADR....... 4,325 111,909
Telecomunicacoes Brasileiras SA..... 6,250 478,125
Telefonica Del Peru SA.............. 8,625 162,797
----------
2,806,792
TRANSPORTATION -- 0.01%
Tranz Rail Holdings -- ADR(a)....... 300 5,306
WHOLESALE -- 1.04%
Alco Standard Corp. (a)............. 9,875 509,797
----------
Total United States............... 14,400,038
----------
Total Common Stocks
(cost $41,619,865).............. 48,191,083
----------
PREFERRED STOCKS -- 1.49%
- --------------------------------------
BRAZIL -- 0.14%
- --------------------------------------
BEVERAGES -- 0.03%
Brahma.............................. 21,000 11,479
ENERGY -- 0.11%
Cemig CIA Energetica Minas.......... 1,611,000 54,883
----------
Total Brazil...................... 66,362
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<S> <C> <C>
PREFERRED STOCKS -- (CONTINUED)
- --------------------------------------
FINLAND -- 0.20%
- --------------------------------------
COMMUNICATIONS -- 0.20%
Nokia Oy AB......................... 1,703 $ 98,774
GERMANY -- 1.01%
- --------------------------------------
AUTOMOBILES -- 0.12%
Porsche AG.......................... 64 56,564
HEALTH PRODUCTS & CARE -- 0.89%
Fresenius AG........................ 1,700 351,313
Fresenius Medical Care AG........... 1,058 85,222
----------
436,535
----------
Total Germany..................... 493,099
UNITED STATES -- 0.14%
- --------------------------------------
FOOD & BEVERAGES -- 0.14%
Quilmes Industrial Quinsa -- ADR.... 7,700 70,263
----------
Total Preferred Stocks
(cost $662,331)................. 728,498
----------
TOTAL INVESTMENTS -- 100%
- --------------------------------------
(cost $42,282,196).................. $48,919,581
==========
</TABLE>
- -------------------------
(a) Non-income producing.
See notes to the financial statements.
47
<PAGE> 102
JNL/ALGER GROWTH SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1996
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<S> <C> <C>
COMMON STOCKS -- 94.49%
- --------------------------------------
AEROSPACE & DEFENSE -- 3.77%
Boeing Co. ......................... 6,500 $ 691,437
Gulfstream Aerospace Corp.(a)....... 7,100 172,175
Ingram Micro, Inc.(a)............... 17,000 391,000
United Technologies Corp. .......... 2,800 184,800
-----------
1,439,412
APPAREL -- 0.57%
Tommy Hilfiger Corp.(a)............. 4,500 216,000
BANKS -- 4.43%
Chase Manhattan Corp. .............. 9,000 803,250
Citicorp............................ 8,600 885,800
-----------
1,689,050
BROADCASTING -- 0.44%
Univision Communications, Inc.(a)... 4,500 166,500
BUILDING & CONSTRUCTION -- 0.41%
Case Corp. ......................... 2,900 158,050
CHEMICALS -- 2.06%
Monsanto Co. ....................... 20,200 785,275
COMPUTERS & TECHNOLOGY -- 19.81%
Cisco Systems, Inc.(a).............. 19,000 1,208,875
Computer Associates International,
Inc. ............................. 2,900 144,275
Compuware Corp.(a).................. 8,000 401,000
First Data Corp. ................... 26,056 951,044
Hewlett Packard Co. ................ 5,500 276,375
Informix Corp.(a)................... 22,000 448,250
Intel Corp. ........................ 9,700 1,270,094
Linear Technology Corp. ............ 5,200 228,150
Microsoft Corp.(a).................. 9,000 743,625
Parametric Technology Corp.(a)...... 6,900 354,487
Sabre Group Holdings, Inc.(a)....... 5,400 150,525
Sun Microsystems, Inc.(a)........... 16,000 411,000
Sundstrand Corp. ................... 9,500 403,750
3Com Corp.(a)....................... 7,700 564,987
-----------
7,556,437
CONSUMER PRODUCTS -- 0.93%
CUC International, Inc.(a).......... 15,000 356,250
DRUGS -- 6.23%
Eli Lilly & Co. .................... 11,400 832,200
Merck & Company, Inc. .............. 13,000 1,030,250
Pfizer, Inc. ....................... 6,200 513,825
-----------
2,376,275
ELECTRICAL EQUIPMENT -- 2.52%
Boston Scientific Corp.(a).......... 4,500 270,000
General Electric Co. ............... 7,000 692,125
-----------
962,125
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
- --------------------------------------
ELECTRONICS -- 7.64%
Adaptec, Inc(a)..................... 23,200 $ 928,000
Altera Corp.(a)..................... 10,300 748,681
Maxim Integrated Products(a)........ 3,900 168,675
Picturetel Corp.(a)................. 12,400 322,400
Tellabs, Inc.(a).................... 10,000 376,250
Xilinx, Inc.(a)..................... 10,000 368,125
-----------
2,912,131
ENERGY SERVICES -- 2.03%
Halliburton Co. .................... 8,900 536,225
Tidewater, Inc. .................... 5,300 239,825
-----------
776,050
FINANCE COMPANIES -- 4.11%
Green Tree Financial Corp. ......... 8,000 309,000
MBNA Corp. ......................... 4,550 188,825
MGIC Investment Corp. .............. 4,700 357,200
Money Store (The), Inc. ............ 12,000 331,500
Schwab Charles Corp. ............... 11,900 380,800
-----------
1,567,325
GAMING -- 0.73%
Mirage Resorts, Inc.(a)............. 12,800 276,800
HEALTH CARE & PRODUCTS -- 7.45%
Biochemical Pharmaceuticals,
Inc.(a)........................... 7,100 356,775
Bristol Myers Squibb Co. ........... 3,500 380,625
Columbia HCA/Healthcare Corp. ...... 15,500 631,625
Medtronic, Inc. .................... 10,100 686,800
Warner Lambert Co. ................. 10,500 787,500
-----------
2,843,325
HOSPITALITY -- 2.60%
Boston Chicken, Inc.(a)............. 10,900 391,038
Lone Star Steakhouse & Saloon(a).... 12,800 342,400
Outback Steakhouse, Inc.(a)......... 2,500 66,875
Safeway, Inc.(a).................... 4,500 192,375
-----------
992,688
INDUSTRIAL MACHINERY -- 0.56%
Tyco International, Ltd. ........... 4,000 211,500
INSURANCE -- 3.84%
American International Group,
Inc. ............................. 10,000 1,082,500
Equifax, Inc. ...................... 12,500 382,813
-----------
1,465,313
LEISURE TIME & RECREATION -- 1.36%
International Game Technology....... 28,500 520,125
MERCHANDISING -- 2.82%
Nike, Inc. Class B.................. 12,500 746,875
9 West Group, Inc.(a)............... 3,000 139,125
TJX Companies, Inc. ................ 4,000 189,500
-----------
1,075,500
</TABLE>
See notes to the financial statements.
48
<PAGE> 103
JNL/ALGER GROWTH SERIES
SCHEDULE OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
- --------------------------------------
OIL -- 2.29%
BJ Services Co.(a).................. 3,800 $ 193,800
Schlumberger Ltd. .................. 5,000 499,375
Smith International, Inc.(a)........ 4,000 179,500
-----------
872,675
RETAIL -- 5.66%
Dollar General Corp. ............... 7,000 224,000
Gucci Group N V..................... 7,600 485,450
Home Depot, Inc. ................... 19,500 977,438
Office Max, Inc.(a)................. 25,800 274,125
Rite Aid Corp. ..................... 5,000 198,750
-----------
2,159,763
SERVICE INDUSTRIES -- 3.49%
Loewen Group, Inc. ................. 13,200 516,450
Service Corp. International......... 29,000 812,000
-----------
1,328,450
TELECOMMUNICATIONS -- 5.51%
Ascend Communications, Inc.(a)...... 6,100 378,962
Cascade Communications Co.(a)....... 4,400 242,550
LCI International, Inc.(a).......... 4,700 101,050
Nokia Corp.......................... 4,100 236,263
Pairgain Technologies, Inc. (a)..... 4,400 133,925
Qualcomm, Inc. (a).................. 5,000 199,375
Telecomunicacoes Brasileiras SA --
ADR............................... 6,400 489,600
WorldCom, Inc.(a)................... 12,300 320,569
-----------
2,102,294
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
- --------------------------------------
TEXTILES -- 0.97%
Cintas Corp. ....................... 6,300 $ 370,125
WASTE DISPOSAL -- 2.26%
United Waste Systems, Inc.(a)....... 8,800 302,500
USA Waste Services, Inc.(a)......... 17,500 557,812
-----------
860,312
-----------
Total Common Stocks
(cost $32,375,066).............. 36,039,750
-----------
PRINCIPAL
AMOUNT
----------
SHORT-TERM INVESTMENTS -- 5.51%
- --------------------------------------
MONEY MARKET FUNDS -- 4.47%
State Street Global Advisor Fund,
5.38%(b).......................... $1,703,214 1,703,214
U.S. TREASURY BILLS -- 1.04%
4.80%, 02/20/1997................... 400,000 397,333
-----------
Total Short-Term Investments
(cost $2,100,547)............... 2,100,547
-----------
TOTAL INVESTMENTS -- 100%
- --------------------------------------
(cost $34,475,613).................. $38,140,297
===========
</TABLE>
- -------------------------
(a) Non-income producing.
(b) Dividend yields change daily to reflect current market conditions. Rate
stated is the quoted yield as of December 31, 1996.
See notes to the financial statements.
49
<PAGE> 104
JNL/EAGLE CORE EQUITY SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1996
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<S> <C> <C>
COMMON STOCKS -- 96.42%
- ---------------------------------------
APPAREL & TEXTILES -- 0.57%
Intimate Brands, Inc. ............... 600 $ 10,200
AUTOMOBILES -- 0.53%
Ford Motor Co. ...................... 300 9,562
BANKS -- 2.79%
BankAmerica Corp. ................... 200 19,950
Mellon Bank Corp. ................... 150 10,650
NationsBank Corp. ................... 200 19,550
----------
50,150
BUILDING CONSTRUCTION -- 0.38%
Harsco Corp. ........................ 100 6,850
BUSINESS SERVICES -- 4.18%
CUC International Inc.(a)............ 850 20,187
First Data Corp. .................... 500 18,250
Omnicom Group........................ 800 36,600
----------
75,037
COMPUTERS AND BUSINESS EQUIPMENT -- 3.02%
Cisco Systems, Inc.(a)............... 300 19,088
Hewlett Packard Co. ................. 700 35,175
----------
54,263
DOMESTIC OIL -- 1.95%
Ashland, Inc. ....................... 800 35,100
DRUGS & HEALTH CARE -- 6.44%
Abbott Laboratories.................. 200 10,150
Johnson & Johnson.................... 500 24,875
Lilly Eli & Co....................... 300 21,900
Merck & Co., Inc. ................... 300 23,775
Pfizer, Inc. ........................ 300 24,862
SmithKline Beecham PLC............... 150 10,200
----------
115,762
ELECTRIC UTILITIES -- 4.76%
FPL Group, Inc. ..................... 250 11,500
Nipsco Industries, Inc. ............. 300 11,888
Pacificorp........................... 1,500 30,750
Teco Energy, Inc. ................... 1,300 31,363
----------
85,501
ELECTRICAL EQUIPMENT -- 8.15%
Atmel Corp.(a)....................... 1,000 33,125
General Electric Co. ................ 400 39,550
Philips Electronics NV............... 1,000 40,000
Westinghouse Electric Corp. ......... 1,700 33,787
----------
146,462
ELECTRONICS -- 4.20%
Ericsson L M Tel Co. ................ 700 21,131
General Motors Corp. Series E........ 500 28,125
Intel Corp. ......................... 200 26,188
----------
75,444
FINANCIAL SERVICES -- 7.09%
American Express Corp................ 300 16,950
Chase Manhattan Corp................. 400 35,700
Federal Home Loan Mortgage Corp. .... 200 22,025
Federal National Mortgage
Association........................ 600 22,350
Travelers Group, Inc. ............... 666 30,220
----------
127,245
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
- ---------------------------------------
FOOD & BEVERAGES -- 1.57%
Heinz H J Co. ....................... 300 $ 10,725
Pepsico, Inc. ....................... 600 17,550
----------
28,275
GAS AND PIPELINE UTILITIES -- 2.69%
American Water Works, Inc............ 600 12,375
UGI Corp. ........................... 500 11,188
Wicor, Inc. ......................... 300 10,763
Williams Cos., Inc. ................. 375 14,063
----------
48,389
GAS EXPLORATION -- 1.80%
Enron Corp. ......................... 750 32,344
HOTELS AND RESTAURANTS -- 1.54%
Marriott International, Inc. ........ 500 27,625
HOUSEHOLD APPLIANCES & FURNISHINGS --
1.72%
Sunbeam Corp. ....................... 1,200 30,900
HOUSEHOLD PRODUCTS -- 5.37%
Black & Decker Corp.................. 1,100 33,137
Gillette Co. ........................ 400 31,100
Procter & Gamble Co. ................ 300 32,250
----------
96,487
INDUSTRIAL MACHINERY -- 1.84%
Thermo Electron Corp(a).............. 800 33,000
INSURANCE -- 3.68%
Allstate Corp........................ 400 23,150
American International Group,
Inc. .............................. 300 32,475
Marsh & McLennan Companies, Inc. .... 100 10,400
----------
66,025
INTERNATIONAL OIL -- 4.77%
Exxon Corp........................... 100 9,800
Mobil Corp. ......................... 100 12,225
Royal Dutch Petroleum Co. ........... 200 34,150
Texaco, Inc. ........................ 300 29,437
----------
85,612
OFFICE FURNISHINGS AND SUPPLIES --
0.58%
Wallace Computer Services, Inc. ..... 300 10,350
PLASTICS -- 1.33%
Illinois Tool Works, Inc. ........... 300 23,962
PUBLISHING -- 0.64%
McGraw Hill Companies, Inc. ......... 250 11,531
REAL ESTATE -- 3.45%
Cali Realty Corp. ................... 300 9,263
Duke Realty Investments, Inc. ....... 200 7,700
Haagen Alexander Properties, Inc. ... 450 6,638
Nationwide Health Properties,
Inc. .............................. 300 7,275
Rouse Co. ........................... 450 14,288
Storage Trust Realty................. 300 8,100
Sun Communities, Inc. ............... 250 8,625
----------
61,889
RETAIL TRADE -- 3.83%
Home Depot, Inc. .................... 500 25,062
Kohls Corp. (a)...................... 500 19,625
Walgreen Co. ........................ 600 24,000
----------
68,687
</TABLE>
See notes to the financial statements.
50
<PAGE> 105
JNL/EAGLE CORE EQUITY SERIES
SCHEDULE OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
- ---------------------------------------
SOFTWARE -- 2.08%
Microsoft Corp.(a)................... 200 $ 16,525
Oracle Systems Corp.(a).............. 500 20,875
----------
37,400
TELECOMMUNICATIONS -- 7.53%
AT&T................................. 900 39,150
Alltel Corp. ........................ 350 10,981
Bell Atlantic Corp. ................. 500 32,375
Frontier Corp. ...................... 400 9,050
GTE Corp. ........................... 200 9,100
Telefonica de Espana SA.............. 500 34,625
----------
135,281
TELECOMMUNICATION SERVICES -- 1.70%
Telecomunicacoes Brasileiras......... 400 30,600
TOBACCO -- 6.24%
American Brands, Inc. ............... 700 34,737
Philip Morris Companies Inc. ........ 400 45,050
UST, Inc. ........................... 1,000 32,375
----------
112,162
----------
Total Common Stocks
(cost $1,651,495)................ 1,732,095
----------
PREFERRED STOCKS -- 3.58%
- ---------------------------------------
FINANCIAL SERVICES -- 0.65%
Sci Finances LLC..................... 125 11,766
HOUSEHOLD PRODUCTS -- 0.71%
Corning Delaware LP.................. 200 12,725
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<S> <C> <C>
PREFERRED STOCKS (CONTINUED)
- ---------------------------------------
INSURANCE -- 0.51%
Jefferson Pilot Corp. ............... 100 $ 9,100
LEISURE TIME -- 0.45%
AMC Entertainment, Inc. ............. 300 8,100
RESTAURANT -- 0.58%
Wendy's.............................. 200 10,400
RETAIL TRADE -- 0.68%
Kmart................................ 250 12,187
----------
Total Preferred Stocks
(cost $65,149)................... 64,278
----------
TOTAL INVESTMENTS -- 100%
- ---------------------------------------
(cost $1,716,644).................... $1,796,373
==========
CALL OPTIONS WRITTEN
- ---------------------------------------
<CAPTION>
COMMON STOCK/EXPIRATION MARKET
DATE/EXERCISE PRICE CONTRACTS VALUE
- --------------------------------------- ----- ----------
<S> <C> <C>
General Motors Corp./January 17,
1997/$55(b).......................... 5 $ (1,500)
</TABLE>
- -------------------------
(a) Non-income producing.
(b) Security represents the only call option written in reporting period.
See notes to the financial statements.
51
<PAGE> 106
JNL/EAGLE SMALLCAP EQUITY SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1996
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<S> <C> <C>
COMMON STOCKS -- 100%
- ------------------------------------------
APPAREL & TEXTILES -- 3.63%
Barry R G Corp(a)....................... 6,000 $ 66,000
BUSINESS SERVICES -- 2.60%
Wackenhut Corp.......................... 3,100 47,275
CHEMICALS -- 2.64%
Tetra Technologies, Inc.(a)............. 1,900 47,975
COMMERCIAL SERVICES -- 4.39%
NCO Group Inc.(a)....................... 500 8,437
Superior Services, Inc(a)............... 3,500 71,313
----------
79,750
COMMUNICATIONS EQUIPMENT -- 4.59%
Ampex Corp.(a).......................... 7,000 65,625
RMH Teleservices Inc.(a)................ 2,300 17,825
----------
83,450
CONSTRUCTION -- 8.50%
Hughes Supply Inc....................... 2,000 86,250
Lennar Corp............................. 2,500 68,125
----------
154,375
DRUGS & HEALTH CARE -- 2.89%
Angeion Corp.(a)........................ 15,000 52,500
ELECTRONICS -- 5.02%
Computational Systems, Inc.(a).......... 2,000 38,500
Computer Products Inc.(a)............... 2,700 52,650
----------
91,150
ENVIRONMENTAL -- 7.12%
Envirosource, Inc.(a)................... 13,300 35,744
IMCO Recycling, Inc..................... 6,400 93,600
----------
129,344
FINANCIAL SERVICES -- 4.24%
Legg Mason, Inc......................... 2,000 77,000
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
- ------------------------------------------
HOTELS AND RESTAURANTS -- 10.05%
Apple South, Inc........................ 3,000 $ 40,500
Bristol Hotel Co.(a).................... 2,000 63,500
Capstar Hotel Co.(a).................... 4,000 78,500
----------
182,500
MAINTENANCE -- 3.73%
American Residential Services,
Inc.(a)............................... 2,500 67,812
PETROLEUM SERVICES -- 13.57%
Camco International, Inc................ 1,100 50,737
Marine Drilling Companies, Inc.(a)...... 4,100 80,719
Precision Drilling Corp(a).............. 1,100 38,225
Trico Marine Services, Inc.(a).......... 1,600 76,800
----------
246,481
PUBLISHING -- 11.12%
Houghton Mifflin Co..................... 1,200 67,950
National Education Corp(a).............. 5,000 76,250
World Color Press, Inc.(a).............. 3,000 57,750
----------
201,950
RACETRACKS -- 3.39%
International Speedway Corp(a).......... 3,000 61,500
REAL ESTATE -- 5.78%
Mid-America Apartment Communities,
Inc................................... 1,600 46,200
Public Storage, Inc..................... 1,900 58,900
----------
105,100
RETAIL -- 6.74%
Cash America International, Inc......... 8,000 68,000
Ugly Duckling Corp.(a).................. 2,800 54,600
----------
122,600
----------
TOTAL INVESTMENTS -- 100%
- ------------------------------------------
(cost $1,603,053)....................... $1,816,762
- ------------------------- ==========
(a) Non-income producing.
</TABLE>
See notes to the financial statements.
52
<PAGE> 107
JNL/PHOENIX INVESTMENT COUNSEL BALANCED SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1996
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<S> <C> <C>
COMMON STOCKS -- 51.05%
- --------------------------------------
AEROSPACE & AIRCRAFT -- 1.21%
AlliedSignal, Inc. ................. 1,700 $ 113,900
Boeing Co. ......................... 1,700 180,838
----------
294,738
APPAREL -- 0.71%
Nike, Inc., Class B................. 2,900 173,275
AUTOMOBILES -- 0.18%
Chrysler Corp. ..................... 1,300 42,900
BROADCASTING -- 0.44%
Westinghouse Electric Corp. ........ 5,400 107,325
BANKS -- 3.01%
BankAmerica Corp. .................. 1,300 129,675
Chase Manhattan Corp. .............. 1,300 116,025
Citicorp............................ 1,500 154,500
First USA, Inc. .................... 5,300 183,513
Mellon Bank Corp. .................. 1,250 88,750
NationsBank Corp. .................. 600 58,650
----------
731,113
BUSINESS SERVICES -- 1.52%
Cognizant Corp. .................... 4,000 132,000
First Data Corp. ................... 3,800 138,700
New York Times Co. ................. 1,500 57,000
Service Corp. International......... 1,500 42,000
----------
369,700
CHEMICALS -- 1.43%
DuPont EI & Co. De Neumours......... 1,700 160,437
Monsanto Co. ....................... 4,800 186,600
----------
347,037
COMPUTERS & TECHNOLOGY -- 7.27%
Computer Associates International,
Inc. ............................. 3,250 161,688
Cisco Systems, Inc.(a).............. 6,600 419,925
GT Interactive Software Corp.(a) ... 3,000 21,375
International Business Machines
Corp. ............................ 2,000 302,000
Microsoft Corp.(a).................. 1,500 123,938
Oracle Systems Corp.(a)............. 5,000 208,750
Sun Microsystems, Inc.(a)........... 8,000 205,500
3Com Corp.(a)....................... 3,100 227,463
Xerox Corp. ........................ 1,800 94,725
----------
1,765,364
CONGLOMERATES -- 1.46%
General Electric Co. ............... 3,000 296,625
Tyco International, Ltd. ........... 1,100 58,163
----------
354,788
CONSUMER PRODUCTS -- 2.36%
Colgate Palmolive Co. .............. 800 73,800
Gillette Co. ....................... 2,100 163,275
Minnesota Mining & Manufacturing
Co. .............................. 1,200 99,450
Proctor & Gamble Co. ............... 2,200 236,500
----------
573,025
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
- --------------------------------------
DRUGS -- 0.94%
Bristol Myers Squibb Co. ........... 1,700 $ 184,875
Lilly Eli & Co. .................... 600 43,800
----------
228,675
ELECTRONICS -- 3.58%
Boston Scientific Corp.(a) ......... 2,000 120,000
Emerson Electric Co. ............... 300 29,025
Honeywell, Inc. .................... 2,000 131,500
Intel Corp. ........................ 2,700 353,531
Micron Technology, Inc. ............ 1,800 52,425
Perkin-Elmer Corp. ................. 1,900 111,862
Texas Instruments, Inc. ............ 1,100 70,125
----------
868,468
ENTERTAINMENT -- 0.43%
Disney, Walt Co. ................... 1,500 104,437
FINANCIAL SERVICES -- 2.33%
Conseco, Inc. ...................... 2,800 178,500
MBNA Corp. ......................... 2,000 83,000
T. Rowe Price & Assoc., Inc. ....... 3,150 137,025
Travelers Group, Inc. .............. 3,666 166,345
----------
564,870
FOOD & BEVERAGES -- 2.06%
Campbell Soup Co. .................. 1,300 104,325
Coca-Cola Co. ...................... 2,300 121,038
Pepsico, Inc. ...................... 8,600 251,550
Seagram Ltd. ....................... 600 23,250
----------
500,163
HEALTH PRODUCTS & CARE -- 4.40%
Abbott Laboratories................. 1,200 60,900
American Home Products Corp. ....... 2,600 152,425
Amgen, Inc.(a)...................... 1,600 87,000
Columbia/HCA Healthcare Corp. ...... 6,000 244,500
Johnson & Johnson................... 2,000 99,500
Merck & Co., Inc. .................. 2,800 221,900
Pfizer, Inc. ....................... 1,900 157,462
Warner Lambert Co. ................. 600 45,000
----------
1,068,687
HOTEL -- 1.42%
Hospitality Franchise Systems,
Inc.(a)........................... 2,500 149,375
Hilton Hotels Corp. ................ 3,500 91,438
Marriott International, Inc. ....... 1,900 104,975
----------
345,788
</TABLE>
See notes to the financial statements.
53
<PAGE> 108
JNL/PHOENIX INVESTMENT COUNSEL BALANCED SERIES
SCHEDULE OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
- --------------------------------------
INSURANCE -- 2.90%
Allstate Corp. ..................... 4,200 $ 243,075
American International Group,
Inc. ............................. 1,400 151,550
Chubb Corp. ........................ 900 48,375
ITT Hartford Group, Inc. ........... 500 33,750
Marsh & McLennan Cos., Inc. ........ 1,000 104,000
TIG Holdings, Inc. ................. 3,600 121,950
----------
702,700
MACHINERY -- 0.98%
Deere & Co. ........................ 2,700 109,687
Dover Corp. ........................ 1,400 70,350
Thermo Electron Corp.(a)............ 1,400 57,750
----------
237,787
OIL & GAS -- 7.01%
Anadarko Petroleum Corp. ........... 1,500 97,125
Apache Corp. ....................... 2,700 95,513
Baker Hughes, Inc. ................. 3,300 113,850
Chevron Corp. ...................... 2,800 182,000
Columbia Gas Systems, Inc. ......... 1,500 95,437
Consolidated Natural Gas Co. ....... 2,000 110,500
Enron Oil & Gas Co. ................ 3,200 80,800
Ensco International, Inc.(a)........ 2,000 97,000
Exxon Corp. ........................ 1,500 147,000
Halliburton Co. .................... 2,000 120,500
Mobil Corp. ........................ 200 24,450
Noble Affiliates, Inc. ............. 3,500 167,562
Royal Dutch Petroleum Co. .......... 700 119,525
Schlumberger Ltd. .................. 1,500 149,813
Transocean Offshore, Inc. .......... 1,600 100,200
----------
1,701,275
REAL ESTATE -- 0.21%
Redwood Trust, Inc. ................ 1,400 52,150
RETAIL -- 3.32%
CVS Corp. .......................... 1,400 57,925
Home Depot, Inc. ................... 3,500 175,437
Lowe's Companies, Inc. ............. 3,000 106,500
Office Depot, Inc.(a)............... 500 8,875
Petsmart, Inc.(a)................... 4,500 98,437
Safeway Stores, Inc.(a)............. 5,200 222,300
Staples, Inc.(a).................... 7,500 135,469
----------
804,943
TELECOMMUNICATIONS -- 0.61%
Ameritech Corp. .................... 1,000 60,625
Bell Atlantic Corp. ................ 1,000 64,750
Lucent Technologies, Inc. .......... 500 23,125
----------
148,500
TRANSPORTATION -- 0.39%
Tidewater, Inc. .................... 2,100 95,025
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
- --------------------------------------
WASTE DISPOSAL -- 0.88%
Philip Environmental, Inc.(a)....... 3,500 50,750
Republic Industries, Inc.(a)........ 1,500 46,781
USA Waste Services, Inc.(a)......... 3,600 114,750
----------
212,281
----------
Total Common Stocks
(cost $11,738,209).............. 12,395,014
----------
<CAPTION>
PRINCIPAL
CORPORATE BONDS -- 0.11% AMOUNT
- -------------------------------------- ----------
<S> <C> <C>
FINANCIAL -- 0.04%
Astra (144a)
8.750%, 08/07/2003................ $ 10,000 10,150
INDUSTRIAL -- 0.07%
Buckeye Cellulos
9.250%, 09/15/2008................ 15,000 15,600
----------
Total Corporate Bonds
(cost $24,875).................. 25,750
----------
MUNICIPAL BONDS -- 0.17%
- --------------------------------------
CALIFORNIA -- 0.06%
Long Beach Pension Obligation -- FSA
Insured, 6.87%, 09/01/2006........ 5,000 4,961
San Bernardino County Authority
Pension -- MBIA Insured, 6.94%,
08/01/2009........................ 5,000 4,962
Ventura County Municipal Bond -- FSA
Insured, 6.58%, 11/01/2006........ 5,000 4,902
----------
14,825
FLORIDA -- 0.11%
Miami Beach Pension Project -- AMBAC
Insured, 8.60%, 09/01/2021........ 10,000 10,698
University of Miami -- MBIA Insured
Adjustable Rate, 7.65%,
04/01/2020........................ 15,000 15,132
----------
25,830
----------
Total Municipal Bonds
(cost $40,970).................. 40,655
----------
U.S. GOVERNMENT SECURITIES -- 36.57%
- --------------------------------------
U.S. TREASURY NOTES -- 20.20%
6.875%, 07/31/1999.................. 200,000 204,062
6.250%, 10/31/2001.................. 500,000 500,470
5.875%, 11/30/2001.................. 1,000,000 985,470
5.875%, 11/15/2005.................. 300,000 289,266
6.500%, 10/15/2006.................. 2,900,000 2,915,863
6.000%, 02/15/2026.................. 10,000 9,102
----------
4,904,233
U.S. GOVERNMENTAL AGENCIES -- 16.37%
Resolution Trust Corporation Strip
Interest, 6.80%, 05/25/2027....... 95,896 94,901
See notes to the financial statements.
</TABLE>
54
<PAGE> 109
JNL/PHOENIX INVESTMENT COUNSEL BALANCED SERIES
SCHEDULE OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
--------- ------
<S> <C> <C>
U.S. GOVERNMENT SECURITIES (CONTINUED)
- --------------------------------------
U.S. GOVERNMENTAL AGENCIES (CONTINUED)
- --------------------------------------
Government National Mortgage
Association
6.50%, 12/15/2023................. $ 270,829 $ 259,912
6.50%, 04/15/2026................. 3,795,555 3,620,010
----------
3,879,922
----------
Total U.S. Government Securities
(cost $8,920,638)............... 8,879,056
----------
MORTGAGE BACKED SECURITIES -- 1.26%
- --------------------------------------
Countrywide Mortgage Backed
Securities, Inc., 8.00%,
12/25/2026........................ 95,806 97,213
DLJ Mortgage Acceptance Corp. 1996-
CF1 A1B, (144a), 7.58%,
03/13/2028........................ 50,000 51,688
Green Tree 1996-4 A6, 7.40%,
06/15/2027........................ 15,000 15,126
Residential Funding Mortgage
Security I
6.75%, 03/25/2011................. 97,126 95,062
TLFC Equipment Lease Trust
5.98%, 11/20/2002................. 48,244 48,123
----------
Total Mortgage Backed Securities
(cost $308,906)................. 307,212
----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
--------- ------
<S> <C> <C>
SHORT-TERM INVESTMENTS -- 10.84%
- --------------------------------------
COMMERCIAL PAPER -- 10.84%
Albertsons, Inc.
5.38%, 01/28/1997................. $ 265,000 $ 263,931
Amoco Co.
5.25%, 01/06/1997................. 315,000 314,770
Gannett, Inc.
5.35%, 01/10/1997................. 550,000 549,264
General Electric Capital Corp.
5.37%, 01/13/1997................. 300,000 299,463
Proctor & Gamble
5.33%, 01/07/1997................. 330,000 329,707
Receivables Capital Corp.
5.55%, 02/14/1997................. 525,000 521,439
Schering Corp.
5.45%, 01/30/1997................. 355,000 353,441
----------
Total Short-Term Investments
(cost $2,632,015)............... 2,632,015
----------
TOTAL INVESTMENTS -- 100%
- --------------------------------------
(cost $23,665,613).................. $24,279,702
==========
</TABLE>
- -------------------------
(a) Non-income producing.
See notes to the financial statements.
55
<PAGE> 110
JNL/PHOENIX INVESTMENT COUNSEL GROWTH SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1996
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<S> <C> <C>
COMMON STOCKS -- 90.56%
- ---------------------------------------
AEROSPACE & AIRCRAFT -- 2.64%
AlliedSignal, Inc. .................. 3,200 $ 214,400
Boeing Co. .......................... 2,100 223,387
United Technologies Corp. ........... 3,000 198,000
-----------
635,787
BANKS -- 6.33%
Ahmanson H F & Co. .................. 6,700 217,750
BankAmerica Corp. ................... 2,200 219,450
Citicorp............................. 3,100 319,300
MBNA Corp. .......................... 5,600 232,400
NationsBank Corp. ................... 1,100 107,525
Republic NY Corp..................... 2,600 212,225
Wells Fargo & Co. ................... 800 215,800
-----------
1,524,450
BUSINESS SERVICES -- 2.67%
ADT Ltd. ............................ 9,500 217,312
Cognizant Corp. ..................... 6,700 221,100
First Data Corp...................... 5,600 204,400
-----------
642,812
CHEMICALS -- 2.74%
Du Pont E I De Nemours & Co. ........ 2,300 217,063
IMC Global, Inc. .................... 5,700 223,013
Potash Corp. ........................ 2,600 221,000
-----------
661,076
COMPUTERS & SOFTWARE -- 11.07%
Cisco Systems, Inc.(a)............... 10,600 674,425
Compaq Computer Corp(a).............. 4,400 326,700
Computer Associates International,
Inc. .............................. 5,800 288,550
Hewlett Packard Co. ................. 2,100 105,525
International Business Machines
Corp............................... 3,000 453,000
Microsoft Corp.(a)................... 5,300 437,912
3Com Corp(a)......................... 5,200 381,550
-----------
2,667,662
CONFECTIONS & BEVERAGES -- 2.59%
Coca-Cola Co. ....................... 9,000 473,625
Pepsico, Inc. ....................... 5,100 149,175
-----------
622,800
CONSUMER PRODUCTS -- 8.85%
Colgate Palmolive Co. ............... 2,400 221,400
Crown Cork & Seal, Inc. ............. 4,300 233,813
Eastman Kodak Co. ................... 1,300 104,325
Gillette Co. ........................ 3,100 241,025
Philip Morris Cos, Inc. ............. 6,000 675,750
Procter & Gamble Co. ................ 2,000 215,000
Seagram Co. Ltd. .................... 5,500 213,125
Unilever NV.......................... 1,300 227,825
-----------
2,132,263
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
- ---------------------------------------
DIVERSIFIED -- 0.90%
Tyco International, Ltd. ............ 4,100 $ 216,787
ELECTRONICS -- 9.93%
Adaptec, Inc.(a)..................... 5,100 204,000
Atmel Corp.(a)....................... 3,100 102,687
Boston Scientific Corp.(a)........... 3,600 216,000
Checkpoint Systems, Inc.(a).......... 3,100 76,725
General Electric Corp. .............. 4,600 454,825
Intel Corp. ......................... 5,300 693,969
Perkin Elmer Corp. .................. 3,900 229,612
Raychem Corp. ....................... 4,000 320,500
S3, Inc.(a).......................... 5,700 92,625
-----------
2,390,943
FINANCIAL SERVICES -- 5.99%
Allstate Corp. ...................... 3,700 214,137
American Express Co. ................ 4,000 226,000
Chase Manhattan Corp................. 3,600 321,300
Federal National Mortgage
Association........................ 6,200 230,950
First USA Inc. ...................... 6,600 228,525
Travelers Group, Inc. ............... 4,900 222,337
-----------
1,443,249
HEALTH PRODUCTS & CARE -- 1.79%
Columbia/HCA Healthcare Corp. ....... 5,300 215,975
Mallinckrodt, Inc. .................. 4,900 216,213
-----------
432,188
INSURANCE -- 2.03%
Conseco, Inc. ....................... 3,400 216,750
Equifax, Inc. ....................... 5,100 156,187
SunAmerica, Inc. .................... 2,600 115,375
-----------
488,312
MEDICAL SERVICES & SUPPLIES -- 10.02%
American Home Products Corp. ........ 3,700 216,913
Amgen, Inc.(a)....................... 3,800 206,625
Centocor(a).......................... 3,100 110,825
Johnson & Johnson.................... 4,300 213,925
Medtronic, Inc. ..................... 3,200 217,600
Merck & Co. ......................... 8,400 665,700
Pharmacia & Upjohn, Inc. ............ 5,600 221,900
Pfizer, Inc. ........................ 5,500 455,813
Warner Lambert, Co. ................. 1,400 105,000
-----------
2,414,301
</TABLE>
See notes to the financial statements.
56
<PAGE> 111
JNL/PHOENIX INVESTMENT COUNSEL GROWTH SERIES
SCHEDULE OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
- ---------------------------------------
OIL & GAS -- 11.28%
Anadarko Petroleum Corp. ............ 3,200 $ 207,200
BJ Services Co.(a)................... 6,500 331,500
Burlington Resources, Inc. .......... 2,100 105,788
Diamond Offshore Drilling(a)......... 5,900 336,300
Dresser Industries, Inc. ............ 4,100 127,100
Elf Aquitaine Sponsored -- ADR....... 5,500 248,875
Ensco International, Inc.(a)......... 5,300 257,050
Halliburton Co. ..................... 5,300 319,325
Louisiana Land & Exploration Co. .... 3,900 209,138
Rowan Cos, Inc.(a)................... 4,500 101,813
Schlumberger, Ltd. .................. 2,100 209,737
Tidewater, Inc. ..................... 5,800 262,450
-----------
2,716,276
RETAIL -- 7.51%
American Stores, Co. ................ 5,300 216,638
CVS Corp. ........................... 5,400 223,425
Federated Department Stores,
Inc.(a)............................ 6,500 221,813
Home Depot, Inc. .................... 9,000 451,125
Price/Costco, Inc.(a)................ 13,600 341,700
TJX Cos, Inc. ....................... 7,500 355,312
-----------
1,810,013
TELECOMMUNICATIONS -- 2.86%
Ameritech Corp. ..................... 3,800 230,375
GTE Corp............................. 5,100 232,050
SBC Communications, Inc. ............ 4,400 227,700
-----------
690,125
TRANSPORTATION -- 1.36%
Burlington Northern Sante Fe......... 3,800 328,225
-----------
Total Common Stocks
(cost $21,526,921)............... 21,817,269
-----------
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
------ ------
<S> <C> <C>
SHORT-TERM INVESTMENTS -- 9.44%
- ---------------------------------------
U.S. GOVERNMENT AGENCIES -- 0.40%
Federal Home Loan Mortgage,
5.23%, 01/16/1997.................. $ 97,000 $ 96,789
COMMERCIAL PAPER -- 9.04%
Amoco
5.25%, 01/06/1997.................. 485,000 484,646
Ciesco L P
5.38%, 01/09/1997.................. 300,000 299,642
5.38%, 01/13/1997.................. 255,000 254,543
Gannett, Inc.
5.35%, 01/10/1997.................. 55,000 54,926
General Electric Co.
5.28%, 01/08/1997.................. 420,000 419,569
General Electric Cap Corp.
5.37%, 01/14/1997.................. 430,000 429,166
International Lease Finance Corp.
5.35%, 01/17/1997.................. 235,000 234,441
-----------
2,176,933
-----------
Total Short-Term Investments
(cost $2,273,722)................ 2,273,722
-----------
TOTAL INVESTMENTS -- 100%
- ---------------------------------------
(cost $23,800,643)................... $24,090,991
===========
</TABLE>
- -------------------------
(a) Non-income producing.
See notes to the financial statements.
57
<PAGE> 112
PPM AMERICA/JNL HIGH YIELD BOND SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1996
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
--------- ------
<S> <C> <C>
CORPORATE BONDS -- 92.93%
- -----------------------------------------------------------------
AGRICULTURAL MACHINERY -- 0.76%
AGCO Corp. (144a), 8.50%,
03/15/2006....................... $100,000 $ 102,625
AUTOMOTIVE & ACCESSORIES -- 5.74%
Exide Corp., (Step-Up), 12.25%,
12/15/2004(a).................... 200,000 184,000
Hayes Wheels International, Inc.,
11.00%, 07/15/2006............... 100,000 109,125
Lear Seating Corp., 9.50%,
07/15/2006....................... 200,000 216,000
Speedy Muffler King, Inc., 10.875%,
10/01/2006....................... 250,000 266,562
-----------
775,687
BANKS -- 2.40%
First Nationwide Bank, (144a),
10.625%, 10/01/2003.............. 300,000 324,000
BUILDING PRODUCTS -- 2.23%
Toll Corp., 8.75%, 11/15/2006...... 300,000 301,500
CHEMICALS -- 2.41%
Laroche Industries, Inc., 13.00%,
08/15/2004....................... 300,000 325,500
COMMUNICATIONS -- 9.80%
Bell & Howell Co. Ser. B (Step-Up),
11.50%, 03/01/2005............... 300,000 217,500
Centennial Cellular Corp., 8.875%,
11/01/2001....................... 300,000 289,500
Gray Communications, 10.625%,
10/01/2006....................... 200,000 212,000
K-III Communications, 8.50%,
02/01/2006....................... 200,000 196,500
Paging Network, Inc., 10.125%,
08/01/2007....................... 300,000 306,000
Rogers Communications, Inc.,
10.875%, 04/15/2004.............. 100,000 105,000
-----------
1,326,500
CONSUMER PRODUCTS -- 6.32%
Coty, Inc., 10.25%, 05/01/2005..... 400,000 434,000
Celestica International, Inc.,
10.50%, 12/31/2006............... 400,000 420,000
-----------
854,000
DEFENSE -- 0.83%
Alliant Techsystems, Inc., 11.75%,
03/01/2003....................... 100,000 112,250
FABRICATED METAL PRODUCTS -- 3.28%
Ryerson Tull, Inc., 8.50%,
07/15/2001....................... 200,000 205,000
UCAR Global Enterprises, Inc.,
12.00%, 01/15/2005............... 207,000 238,568
-----------
443,568
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
--------- ------
<S> <C> <C>
CORPORATE BONDS (CONTINUED)
- -------------------------------------
FINANCIAL -- 2.47%
Schuller International Group, Inc.,
10.875%, 12/15/2004.............. $300,000 $ 333,750
FOOD & BEVERAGES -- 6.33%
Americold Corp., 11.50%,
03/01/2005....................... 100,000 105,000
Dominick's Finer Foods, 10.875%,
05/01/2005....................... 300,000 332,250
International Home Foods, Inc.,
10.375%, 11/01/2006.............. 300,000 309,750
Keebler Corp., (144a), 10.75%,
07/01/2006....................... 100,000 109,000
-----------
856,000
GAMING -- 5.92%
Argosy Gaming Co., (144a) 13.25%,
06/01/2004....................... 200,000 186,500
Aztar Corp.
11.00%, 10/01/2002............... 100,000 96,750
13.75%, 10/01/2004............... 100,000 106,500
Harvey's Casino Resorts, 10.625%,
06/01/2006....................... 200,000 210,000
Station Casinos, Inc., 10.125%,
03/15/2006....................... 200,000 201,000
-----------
800,750
INDUSTRIAL -- 9.44%
Clark-Schwebel, Inc., 10.50%,
04/15/2006....................... 100,000 106,000
Freedom Chemical Co., 10.625%,
10/15/2006....................... 300,000 315,000
Norcal Waste System, Inc.,
(Step-Up) 12.75%,
11/15/2005(a).................... 300,000 331,500
U.S. Can Corp., 10.125%,
10/15/2006....................... 300,000 315,375
Veritas DGC, Inc., 9.75%,
10/15/2003....................... 200,000 208,000
-----------
1,275,875
MACHINERY -- 0.80%
Terex Corp., (144a), 13.25%,
05/15/2002....................... 100,000 107,750
MEDIA CABLE -- 7.69%
Century Communications
9.75%, 02/15/2002................ 100,000 103,000
9.50%, 03/01/2005................ 100,000 102,500
Frontiervision, 11.00%,
10/15/2006....................... 200,000 202,937
Jones Intercable, Inc., 9.625%,
03/15/2002....................... 200,000 210,000
Marcus Cable Co., 11.875%,
10/01/2005....................... 200,000 211,750
Rogers Cablesystems Limited
9.625%, 08/01/2002............... 100,000 104,250
10.00%, 03/15/2005............... 100,000 106,500
-----------
1,040,937
</TABLE>
See notes to the financial statements.
58
<PAGE> 113
PPM AMERICA/JNL HIGH YIELD BOND SERIES
SCHEDULE OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
--------- ------
<S> <C> <C>
CORPORATE BONDS (CONTINUED)
- -------------------------------------
MERCHANDISING -- 3.87%
E&S Holdings Corp., (144a),
10.375%, 10/01/2006.............. $400,000 $ 419,000
Simmons Co., 10.75%, 04/15/2006.... 100,000 105,250
-----------
524,250
OIL & GAS -- 5.09%
Cliffs Drilling Co., 10.25%,
05/15/2003....................... 300,000 319,125
Parker Drilling Co., 9.75%,
11/15/2006....................... 350,000 369,250
-----------
688,375
PAPER -- 3.29%
Doman Industries Ltd., 8.75%,
03/15/2004....................... 200,000 187,000
Quno Corp., 9.125%, 05/15/2005..... 250,000 258,125
-----------
445,125
PETROLEUM -- 1.58%
Nuevo Energy Co., 9.50%,
04/15/2006....................... 100,000 106,250
Plains Resources, Inc., 10.25%,
03/15/2006....................... 100,000 107,000
-----------
213,250
PRINTING & PUBLISHING -- 3.28%
Big Flower Press, Inc., 10.75%
08/01/2003....................... 125,000 131,250
Printpack Inc., (144a), 10.625%,
08/15/2006....................... 300,000 312,000
-----------
443,250
RETAIL -- 1.63%
Smith's Food & Drug, 11.25%,
05/15/2007....................... 200,000 221,000
STEEL -- 1.51%
Bar Technologies, Inc., 13.50%,
04/01/2001....................... 100,000 101,500
NS Group, Inc., 13.50%,
07/15/2003....................... 100,000 102,250
-----------
203,750
TEXTILES -- 2.41%
Day International Group, 11.125%,
06/01/2005....................... 100,000 105,000
Synthetic Industries, Inc., 12.75%,
12/01/2002....................... 200,000 220,500
-----------
325,500
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
--------- ------
<S> <C> <C>
CORPORATE BONDS (CONTINUED)
- -------------------------------------
TOBACCO -- 2.30%
Dimon, Inc., 8.875%, 06/01/2006.... $300,000 $ 311,250
TRANSPORTATION -- 1.55%
Viking Star Shipping, Inc., 9.625%,
07/15/2003....................... 200,000 209,250
-----------
Total Corporate Bonds
(cost $12,152,861)........... 12,565,692
-----------
WARRANTS & RIGHTS -- 0.01%
- -------------------------------------
STEEL -- 0.00%
Bar Technologies, Inc.............. 100 550
MISCELLANEOUS -- 0.01%
Terex Corp......................... 400 1,400
-----------
Total Warrants & Rights
(cost $831).................... 1,950
-----------
SHORT TERM INVESTMENTS -- 7.06%
- -------------------------------------
COMMERCIAL PAPER -- 6.69%
- -------------------------------------
American Express Corp.,
5.90%, 01/02/1997................ 250,000 249,959
Disney Walt Co., 5.47%,
01/02/1997....................... 250,000 249,962
Ford Motor Credit Co., 6.00%,
01/02/1997....................... 225,000 224,962
General Motors Acceptance Corp.,
5.78%, 01/06/97.................. 180,000 179,856
-----------
904,739
MONEY MARKET FUNDS -- 0.37%
- -------------------------------------
State Street Global Advisor Fund,
5.38%(b)......................... 50,656 50,656
-----------
Total Short Term Investments
(cost $955,395).............. 955,395
-----------
TOTAL INVESTMENTS -- 100%
- -------------------------------------
(cost $13,109,087)................. $13,523,037
==========
</TABLE>
- -------------------------
(a) Denotes deferred interest security that receives no coupon payments until a
predetermined date at which time the stated coupon rate becomes effective.
(b) Dividend yields change daily to reflect current market conditions. Rate
stated is the quoted yield as of December 31, 1996.
See notes to the financial statements.
59
<PAGE> 114
PPM AMERICA/JNL MONEY MARKET SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1996
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
--------- ------
<S> <C> <C>
COMMERCIAL PAPER -- 99.99%
- --------------------------------------
CAPTIVE FINANCE -- 25.09%
American Express Credit Corp.
5.32%, 01/08/1997................. $ 250,000 $ 249,741
5.30%, 01/21/1997................. 130,000 129,617
5.31%, 01/27/1997................. 125,000 124,521
5.30%, 03/17/1997................. 160,000 158,233
5.31%, 03/17/1997................. 300,000 296,681
5.27%, 03/28/1997................. 170,000 167,860
Chrysler Financial Corp.
5.31%, 01/08/1997................. 109,000 108,887
5.33%, 01/09/1997................. 274,000 273,675
5.33%, 01/28/1997................. 250,000 249,001
5.41%, 01/30/1997................. 260,000 258,867
Ford Motor Credit Co.
5.31%, 01/15/1997................. 100,000 99,794
5.33%, 01/23/1997................. 225,000 224,267
5.34%, 01/23/1997................. 145,000 144,527
5.31%, 01/24/1997................. 215,000 214,271
5.32%, 03/17/1997................. 105,000 103,836
5.33%, 04/01/1997................. 200,000 197,335
General Motors Acceptance Corp.
5.45%, 01/06/1997................. 110,000 109,917
5.31%, 01/13/1997................. 110,000 109,805
5.46%, 01/27/1997................. 110,000 109,566
5.32%, 02/03/1997................. 100,000 99,512
5.48%, 02/24/1997................. 100,000 99,178
5.38%, 04/22/1997................. 100,000 98,341
J C Penney Corp.
5.30%, 02/20/1997................. 300,000 297,792
5.31%, 02/28/1997................. 191,000 189,366
5.33%, 03/07/1997................. 190,000 188,172
John Deere Capital Corp.
5.42%, 02/24/1997................. 325,000 322,358
5.40%, 02/28/1997................. 175,000 173,478
Sears Roebuck Acceptance Corp.
5.32%, 01/13/1997................. 125,000 124,778
5.45%, 01/13/1997................. 200,000 199,637
5.40%, 01/17/1997................. 100,000 99,760
5.32%, 01/23/1997................. 400,000 398,700
5.35%, 01/31/1997................. 150,000 149,331
-----------
5,770,804
COMPUTERS -- 4.08%
International Business Machines
Credit Corp.
5.40%, 01/08/1997................. 310,000 309,675
5.31%, 01/14/1997................. 450,000 449,137
5.29%, 01/31/1997................. 180,000 179,207
-----------
938,019
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
--------- ------
<S> <C> <C>
COMMERCIAL PAPER (CONTINUED)
- --------------------------------------
CONSUMER FINANCE -- 20.83%
American General Financial Corp.
5.45%, 01/14/1997................. $ 250,000 $ 249,508
5.50%, 01/17/1997................. 195,000 194,523
5.29%, 01/29/1997................. 165,000 164,321
5.50%, 01/30/1997................. 200,000 199,114
Beneficial Corp.
5.33%, 01/06/1997................. 165,000 164,878
5.30%, 01/10/1997................. 195,000 194,742
5.30%, 01/28/1997................. 150,000 149,405
5.29%, 02/07/1997................. 250,000 248,638
5.32%, 02/10/1997................. 150,000 149,113
Heller Financial, Inc.
5.47%, 01/09/1997................. 200,000 199,757
5.45%, 01/31/1997................. 105,000 104,523
5.36%, 02/21/1997................. 410,000 406,887
5.33%, 04/25/1997................. 190,000 186,793
Household Financial Corp.
5.32%, 01/08/1997................. 130,000 129,866
5.29%, 01/17/1997................. 320,000 319,248
5.30%, 01/17/1997................. 130,000 129,694
5.53%, 01/21/1997................. 300,000 299,078
5.29%, 01/30/1997................. 150,000 149,361
Norwest Financial, Inc.
5.30%, 01/06/1997................. 200,000 199,853
5.41%, 01/07/1997................. 250,000 249,775
5.31%, 01/15/1997................. 105,000 104,783
5.30%, 01/17/1997................. 100,000 99,764
5.39%, 01/24/1997................. 225,000 224,225
5.30%, 02/07/1997................. 150,000 149,183
5.29%, 02/10/1997................. 125,000 124,265
-----------
4,791,297
CONSUMER PRODUCTS -- 9.67%
Coca-Cola Co., 5.95%, 01/10/1997.... 200,000 199,703
Conagra, Inc.
5.45%, 01/24/1997................. 100,000 99,652
5.49%, 02/18/1997................. 150,000 148,900
5.49%, 02/21/1997................. 270,000 267,900
Heinz H J Co.
5.28%, 01/03/1997................. 480,000 479,859
5.28%, 01/07/1997................. 200,000 199,824
5.40%, 01/24/1997................. 255,000 254,120
Proctor & Gamble Co.
5.60%, 01/14/1997................. 200,000 199,596
5.27%, 01/21/1997................. 220,000 219,356
Tyson Foods, Inc., 5.55%,
01/08/1997........................ 155,000 154,833
-----------
2,223,743
</TABLE>
See notes to the financial statements.
60
<PAGE> 115
PPM AMERICA/JNL MONEY MARKET SERIES
SCHEDULE OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
--------- ------
<S> <C> <C>
COMMERCIAL PAPER (CONTINUED)
- --------------------------------------
HEALTH CARE -- 6.56%
American Home Products Corp., 5.33%,
01/28/1997........................ $ 650,000 $ 647,402
Schering Corp.
5.30%, 01/29/1997................. 220,000 219,093
5.32%, 01/29/1997................. 185,000 184,235
5.35%, 02/11/1997................. 65,000 64,604
5.30%, 04/22/1997................. 400,000 393,463
-----------
1,508,797
INDEPENDENT FINANCE -- 5.99%
Associates Corp. -- North America
5.31%, 01/14/1997................. 110,000 109,789
5.38%, 01/23/1997................. 300,000 299,014
General Electric Capital Corp.
5.56%, 01/07/1997................. 200,000 199,815
5.55%, 01/29/1997................. 350,000 348,530
5.41%, 01/30/1997................. 105,000 104,541
5.30%, 02/28/1997................. 200,000 198,291
5.34%, 06/16/1997................. 120,000 117,045
-----------
1,377,025
INSURANCE -- 3.89%
USAA Capital Corp.
5.35%, 01/16/1997................. 250,000 249,443
5.29%, 02/06/1997................. 400,000 397,884
5.32%, 02/25/1997................. 250,000 247,968
-----------
895,295
MORTGAGE BANKING -- 4.88%
Countrywide Corp.
5.36%, 01/15/1997................. 150,000 149,687
5.35%, 01/16/1997................. 750,000 748,328
5.36%, 01/22/1997................. 225,000 224,297
-----------
1,122,312
OIL & GAS -- 6.45%
Chevron UK Investment PLC, 5.30%,
01/27/1997........................ 1,000,000 996,172
Consolidated Natural Gas Co.
5.60%, 01/16/1997................. 220,000 219,487
5.62%, 01/22/1997................. 270,000 269,115
-----------
1,484,774
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
--------- ------
<S> <C> <C>
COMMERCIAL PAPER (CONTINUED)
- --------------------------------------
PACKAGING -- 1.86%
Crown, Cork & Seal, Inc.
5.78%, 01/15/1997................. $ 140,000 $ 139,684
5.70%, 01/28/1997................. 290,000 288,760
-----------
428,444
TELECOMMUNICATIONS -- 9.21%
American Telephone & Telegraph Co.,
5.40%, 04/07/1997................. 185,000 182,335
Ameritech Corp.
5.27%, 01/10/1997................. 140,000 139,816
5.33%, 07/11/1997................. 732,000 711,300
Bell South Telecommunications Corp.,
5.50%, 02/13/1997................. 150,000 149,015
GTE Corp.
6.17%, 01/02/1997................. 270,000 269,954
5.47%, 01/14/1997................. 165,000 164,674
5.55%, 01/31/1997................. 360,000 358,335
5.55%, 02/19/1997................. 145,000 143,905
-----------
2,119,334
UTILITIES -- 1.48%
Florida Power Corp., 5.58%,
01/08/1997........................ 342,000 341,629
-----------
TOTAL COMMERCIAL PAPER
- --------------------------------------
(cost $23,001,473).................. 23,001,473
-----------
MONEY MARKET FUNDS -- 0.01%
- --------------------------------------
State Street Global Advisor Fund,
5.38%,(a) (cost $1,772)........... 1,772 1,772
-----------
TOTAL INVESTMENTS -- 100%
- --------------------------------------
(cost $23,003,245).................. $23,003,245
===========
</TABLE>
- -------------------------
(a) Dividend yields change daily to reflect current market conditions. Rate
shown is the quoted yield as of December 31, 1996.
See notes to the financial statements.
61
<PAGE> 116
PPM AMERICA/JNL VALUE EQUITY SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1996
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<S> <C> <C>
COMMON STOCKS -- 96.17%
- ---------------------------------------
AEROSPACE -- 5.69%
Lockheed Martin Corp. ............... 1,900 $ 173,850
Rockwell International Corp.......... 4,400 267,850
TRW, Inc. ........................... 7,100 351,450
United Technologies Corp. ........... 3,800 250,800
-----------
1,043,950
AUTOMOTIVE -- 3.78%
Ford Motor Co. ...................... 11,100 353,812
General Motors Corp. ................ 6,100 340,075
-----------
693,887
BANKS -- 6.46%
BankAmerica Corp. ................... 2,700 269,325
Charter One Financial, Inc. ......... 5,500 231,000
KeyCorp.............................. 6,800 343,400
Mellon Bank Corp. ................... 4,800 340,800
-----------
1,184,525
CHEMICALS -- 4.38%
Grace (W.R.) & Co. .................. 3,500 181,125
PPG Industries, Inc. ................ 6,300 353,587
Rohm & Haas Co. ..................... 3,300 269,363
-----------
804,075
COMPUTERS AND BUSINESS MACHINES --
4.49%
International Business Machines
Corp. ............................. 2,800 422,800
Xerox Corp. ......................... 7,600 399,950
-----------
822,750
DOMESTIC OIL -- 1.39%
Ashland, Inc. ....................... 5,800 254,475
DRUGS & HEALTH CARE -- 6.21%
Baxter International, Inc. .......... 4,400 180,400
Bristol Myers Squibb Co. ............ 2,300 250,125
Columbia/HCA Healthcare Corp. ....... 6,900 281,175
Pharmacia & Upjohn Co. .............. 4,200 166,425
Wellpoint Health Networks, Inc.(a)... 7,600 261,250
-----------
1,139,375
ELECTRIC UTILITIES -- 7.68%
Edison International................. 17,900 355,763
General Public Utilities Corp. ...... 10,300 346,338
Ohio Edison Co. ..................... 15,500 352,625
PECO Energy Co. ..................... 14,000 353,500
-----------
1,408,226
ELECTRICAL EQUIPMENT -- 1.95%
Cooper Industries, Inc. ............. 8,500 358,062
ELECTRONICS & INSTRUMENTATION -- 2.02%
Harris Corp. ........................ 5,400 370,575
FINANCIAL SERVICES -- 3.75%
Beneficial Corp. .................... 5,500 348,562
Chase Manhattan Corp New............. 3,800 339,150
-----------
687,712
FOOD, BEVERAGE, AND TOBACCO -- 7.45%
American Brands, Inc. ............... 7,900 392,037
Anheuser-Busch Cos., Inc. ........... 5,900 236,000
Philip Morris Co., Inc. ............. 3,300 371,663
RJR Nabisco Holdings Corp. .......... 10,800 367,200
-----------
1,366,900
GAS EXPLORATION -- 1.91%
Occidental Petroleum Corp. .......... 15,000 350,625
<CAPTION>
MARKET
SHARES VALUE
------ ------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
- ---------------------------------------
INDUSTRIAL MACHINERY -- 1.94%
Parker Hannifin Corp................. 9,200 $ 356,500
INSURANCE -- 10.67%
Aetna, Inc. ......................... 4,700 376,000
American General Corp. .............. 6,500 265,687
CIGNA Corp. ......................... 2,600 355,225
ITT Hartford Group, Inc. ............ 5,100 344,250
Providian Corp. ..................... 6,900 354,488
TransAmerica Corp. .................. 3,300 260,700
-----------
1,956,350
INTERNATIONAL OIL -- 3.84%
Chevron Corp. ....................... 5,400 351,000
Exxon Corp. ......................... 3,600 352,800
-----------
703,800
LEISURE & ENTERTAINMENT -- 1.76%
Hasbro, Inc. ........................ 8,300 322,663
MERCHANDISING -- 3.64%
Federated Department Stores,
Inc.(a)............................ 9,400 320,775
Penney (J.C.) Co., Inc. ............. 7,100 346,125
-----------
666,900
MINING -- 1.91%
Phelps Dodge Corp. .................. 5,200 351,000
PAPER -- 1.93%
Mead Corp. .......................... 6,100 354,562
PHOTOGRAPHY -- 1.66%
Polaroid Corp. ...................... 7,000 304,500
RAILROADS -- 3.06%
Burlington Northern Sante Fe,
Inc. .............................. 2,400 207,300
CSX Corp. ........................... 8,400 354,900
-----------
562,200
TELECOMMUNICATIONS -- 6.69%
AT&T................................. 9,200 400,200
Sprint Corp. ........................ 10,200 406,725
US West, Inc. ....................... 13,000 419,250
-----------
1,226,175
TEXTILES -- 1.91%
VF Corporation....................... 5,200 351,000
-----------
TOTAL COMMON STOCKS
- ---------------------------------------
(cost $15,689,692)................... 17,640,787
-----------
PRINCIPAL
AMOUNT
--------
SHORT-TERM INVESTMENTS -- 3.83%
- ---------------------------------------
MONEY MARKET FUNDS -- 3.83%
State Street Global Advisor Fund,
5.38%,(b) (cost $702,463).......... $702,463 702,463
-----------
TOTAL INVESTMENTS -- 100%
- ---------------------------------------
(cost $16,392,155)................... $18,343,250
===========
</TABLE>
- -------------------------
(a) Non-income producing.
(b) Dividend yield change daily to reflect current market conditions. Rate
stated is the quoted yield as of December 31, 1996.
See notes to the financial statements.
62
<PAGE> 117
SALOMON BROTHERS/JNL GLOBAL BOND SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1996
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
--------- ------
<S> <C> <C>
CORPORATE BONDS -- 40.37%
- --------------------------------------
UNITED STATES -- 40.37%
- --------------------------------------
AEROSPACE INDUSTRIES -- 1.14%
Talley Industries, 10.75%,
10/15/2003........................ $ 150,000 $ 154,875
CAPITAL GOODS -- 1.15%
Alvey Systems, 11.375%,
01/31/2003........................ 150,000 156,375
FINANCIAL -- 5.69%
Foamex LP/ Foamex Capital Corp.,
11.875%, 10/01/2004............... 250,000 266,250
Mellon Financial, 9.75%,
06/15/2001........................ 50,000 55,584
Paine Webber Group, Inc., 7.00%,
03/01/2000........................ 300,000 302,061
Trump Atlantic City Associates,
11.25%, 05/01/2006................ 150,000 148,500
-----------
772,395
INDUSTRIAL -- 23.59%
Clark-Schwebel, 10.50%,
04/15/2006........................ 250,000 266,250
Cliffs Drilling, 10.25%,
05/15/2003........................ 150,000 159,563
Dole Foods, Inc., 6.75%,
07/15/2000........................ 100,000 99,848
Freedom Chemical Co., 10.625%,
10/15/2006 (144a)................. 150,000 157,500
Iron Mountain, Inc., 10.125%,
10/01/2006........................ 150,000 159,000
Jordan Industries, Inc.,
10.375%, 08/01/2003............... 250,000 246,250
NL Industries, (Step-Up), 13.00%,
10/15/2005(a)..................... 150,000 129,000
National Energy Group, Inc., 10.75%,
11/01/2006 (144a)................. 150,000 158,250
Norcal Waste System,
13.00%, (Step-Up), 11/15/2005..... 150,000 165,750
Parker Drilling Co.,
9.75%, 11/15/2006................. 150,000 158,250
Penn Traffic Co., 9.625%,
04/15/2005........................ 250,000 140,000
Printpack, Inc., 10.625%, 08/15/2006
(144a)............................ 100,000 104,000
Rayovac Corp., 10.25%, 11/01/2006... 150,000 153,750
Remington Product Co., 11.00%,
05/15/2006 (144a)................. 150,000 128,250
Renco Metals, Inc.,
11.50%, 07/01/2003................ 150,000 156,750
Selmer Co., Inc., (144a), 11.00%,
05/15/2005........................ 250,000 270,000
Southdown, Inc. Ser. B, 10.00%,
03/01/2006........................ 125,000 131,875
Stroh Brewery Co., 11.10%,
07/01/2006........................ 150,000 156,375
Twin Labs, Inc., (144a), 10.25%,
05/15/2006........................ 150,000 154,500
Wyndham Hotel Corp., 10.50%,
05/15/2006........................ 100,000 106,500
-----------
3,201,661
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
--------- ------
<S> <C> <C>
CORPORATE BONDS (CONTINUED)
- --------------------------------------
UNITED STATES (CONTINUED)
- ----------------------------------------------------------------
PUBLISHING -- 1.98%
American Media Operations,
11.625%, 11/15/2004............... $ 250,000 $ 268,750
TELECOMMUNICATION -- 5.03%
Adelphia Communications,
12.50%, 05/15/2002................ 150,000 153,750
Diamond Cable Communications, Inc.,
11.75%, 12/15/2005................ 225,000 162,000
People's Choice (Step-Up), 13.125%,
06/01/2004(a)..................... 200,000 84,000
Telex Communications, Inc., 12.00%,
07/15/2004........................ 200,000 222,000
Winstar Communications, Inc., (Step-
Up), 14.00%, 10/15/2005(a)........ 100,000 61,000
-----------
682,750
TRANSPORTATION -- 1.02%
Airplanes Pass-through Trust,
10.875%, 03/15/2019............... 125,000 137,664
UTILITIES -- 0.77%
Arkla, Inc., 8.875%, 07/15/1999..... 100,000 105,044
-----------
Total Corporate Bonds
(Cost $5,455,638)............... 5,479,514
-----------
GOVERNMENT BONDS -- 51.37%
- --------------------------------------
ARGENTINA -- 4.40%
- --------------------------------------
Argentina Floating Rate Bond,
6.625%, 03/31/2005(b)............. 686,000 596,820
AUSTRALIA -- 0.11%
- --------------------------------------
Australia Government Bond, 6.75%,
11/15/2006........................ 20,000 15,223
BRAZIL -- 3.16%
- --------------------------------------
Brazil IDU Trust -- Merrill,
6.6875%, 01/01/2001(b)............ 227,500 220,106
Brazil C Bond (payment-in-kind
bond), 8.00%, 04/15/2014(c)....... 275,343 208,990
-----------
429,096
CANADA -- 3.41%
- --------------------------------------
Canadian Government Bond, 6.50%,
08/01/1999........................ 330,000 251,851
7.50%, 09/01/2000................. 150,000 118,028
7.00%, 09/01/2001................. 120,000 93,069
-----------
Total Canada...................... 462,948
DENMARK -- 0.67%
- --------------------------------------
Denmark Government Bond, 8.00%,
11/15/2001........................ 480,000 90,446
ECUADOR -- 0.86%
- --------------------------------------
Ecuador Pars (Step-Up), 3.25%,
02/28/2025(d)..................... 250,000 116,250
</TABLE>
See notes to the financial statements.
63
<PAGE> 118
SALOMON BROTHERS/JNL GLOBAL BOND SERIES
SCHEDULE OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
--------- ------
<S> <C> <C>
GOVERNMENT BONDS (CONTINUED)
- --------------------------------------
GERMANY -- 0.86%
- --------------------------------------
Germany (Federal Republic),
8.25%, 09/20/2001................. $ 40,000 $ 29,761
7.50%, 11/11/2004................. 120,000 87,177
-----------
Total Germany..................... 116,938
IRELAND -- 1.39%
- --------------------------------------
Ireland Government Bond,
6.25%, 04/01/1999................. 50,000 85,197
6.50%, 10/18/2001................. 60,000 103,355
-----------
Total Ireland..................... 188,552
MEXICO -- 1.93%
- --------------------------------------
Mexico Global Bond, 11.50%,
05/15/2026........................ 250,000 262,500
MOROCCO -- 2.72%
- --------------------------------------
Morocco Loan Participation, 6.4375%,
01/01/2009(b)..................... 450,000 369,563
PANAMA -- 1.02%
- --------------------------------------
Panama Government Bond, 3.50%,
07/17/2014........................ 200,000 139,000
PHILIPPINES -- 1.79%
- --------------------------------------
Philippines Debt Conversion Bond,
6.375%, 12/01/2009(b)............. 250,000 243,125
SOUTH KOREA -- 1.62%
- --------------------------------------
Korea Development Bank, 9.60%,
12/01/2000........................ 200,000 220,222
UNITED STATES -- 26.02%
- --------------------------------------
U.S. GOVERNMENT AGENCIES -- 7.50%
Federal Home Loan Mortgage Company
10.00%, 05/15/2020................ 49,212 52,796
6.50%, 10/01/2026(e).............. 300,000 286,779
Federal National Mortgage
Association
13.00%, 11/01/2015................ 12,339 14,571
10.40%, 04/25/2019................ 80,186 86,501
7.00%, 03/01/2026(e).............. 300,000 293,343
6.50%, 02/01/2026................. 297,604 283,839
-----------
1,017,829
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
--------- ------
<S> <C> <C>
GOVERNMENT BONDS (CONTINUED)
- --------------------------------------
UNITED STATES (CONTINUED)
- ----------------------------------------------------------------
U.S. TREASURY NOTES -- 18.52%
U.S. Treasury Note
5.00%, 01/31/1998................. $ 300,000 $ 297,890
5.625%, 02/28/2001................ 650,000 637,104
6.25%, 04/30/2001................. 300,000 300,657
6.50%, 08/31/2001................. 150,000 151,641
5.875%, 11/15/2005................ 275,000 265,161
6.875%, 05/15/2006................ 190,000 195,789
7.00%, 07/15/2006................. 50,000 51,946
6.75%, 08/15/2026................. 60,000 60,450
6.50%, 10/15/2026................. 550,000 553,008
-----------
2,513,646
-----------
Total United States............. 3,531,475
-----------
VENEZUELA -- 1.41%
- --------------------------------------
Republic of Venezuela-Par, 6.75%,
03/31/2020........................ 250,000 190,938
-----------
Total Government Bonds
(Cost $6,793,608)............. 6,973,096
-----------
WARRANTS -- 0.00%
- --------------------------------------
VENEZUELA -- 0.00%
Republic of Venezuela Warrants (cost
$0)............................... 1,250 --
-----------
SHORT TERM INVESTMENTS -- 8.26%
- --------------------------------------
MONEY MARKET FUNDS -- 0.00%
State Street Global Advisor Fund,
5.38%(f).......................... 496 496
REPURCHASE AGREEMENTS -- 8.26%
Repurchase Agreement with J P
Morgan, 6.60% (Collateralized by
$933,000 U.S. Treasury Bond 8.50%
due 02/15/20, market value --
$1,179,661), acquired on 12/31/96,
due 01/02/97...................... 1,121,000 1,121,000
-----------
Total Short Term Investments
(Cost $1,121,496)............. 1,121,496
-----------
TOTAL INVESTMENTS -- 100%
- --------------------------------------
(Cost $13,370,742).................. $13,574,106
===========
</TABLE>
- -------------------------
(a) Denotes deferred interest security that receives no coupon payments until a
predetermined date at which time the stated coupon rate becomes effective.
(b) Coupon is indexed to 6 Month Libor. Rate stated is rate in effect on
December 31, 1996.
(c) Currently a portion of this security's coupon payment is received in
additional principal.
(d) Coupon payment periodically increases over the life of the security. Rate
stated is in effect as of December 31, 1996.
(e) Investment purchased on a when-issued basis.
(f) Dividend yields change daily to reflect current market conditions. Rate
stated is the quoted yield as of December 31, 1996.
See notes to the financial statements.
64
<PAGE> 119
SALOMON BROTHERS/JNL
U.S. GOVERNMENT & QUALITY BOND SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1996
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
--------- ------
<S> <C> <C>
U.S. GOVERNMENT SECURITIES -- 73.58%
- --------------------------------------
U.S. TREASURY NOTES -- 35.22%
U.S. Treasury Note
5.75%, 12/31/1998................. $1,000,000 $ 998,203
5.625%, 02/28/2001................ 500,000 490,080
6.50%, 05/31/2001................. 100,000 101,094
6.625%, 07/31/2001................ 300,000 304,782
6.50%, 08/31/2001................. 500,000 505,470
6.50%, 08/15/2005................. 80,000 80,513
5.875%, 11/15/2005................ 185,000 178,381
6.875%, 05/15/2006................ 250,000 257,616
7.00%, 07/15/2006................. 725,000 753,210
6.50%, 10/15/2006................. 525,000 527,872
-----------
4,197,221
U.S. TREASURY BONDS -- 5.80%
8.125%, 08/15/2019................ 140,000 161,941
6.75%, 08/15/2026................. 525,000 528,937
-----------
690,878
U.S. GOVERNMENT AGENCY & AGENCY BACKED
ISSUES -- 32.56%
Federal Home Loan Mortgage Corp.
5.94%, 06/13/2000................. 300,000 297,141
6.00%, 09/01/2010................. 4,465 4,333
11.75%, 01/01/2011................ 5,802 6,396
7.00%, 07/01/2011................. 127,812 127,732
8.25%, 04/01/2017................. 496,983 513,950
Federal National Mortgage
Association
14.50%, 11/01/2014................ 11,225 13,845
12.50%, 08/01/2015................ 7,833 9,201
12.50%, 09/01/2015................ 28,513 33,494
13.00%, 11/15/2015................ 26,078 30,797
12.00%, 01/01/2016................ 26,999 31,209
11.50%, 04/01/2019................ 8,665 9,880
11.50%, 02/01/2020................ 39,814 45,401
10.50%, 08/01/2020................ 160,644 176,709
7.00%, 08/01/2025(a).............. 100,000 97,781
6.50%, 03/01/2026................. 440,611 420,783
7.00%, 05/01/2026................. 342,833 335,225
7.00%, 10/01/2026(a).............. 800,000 782,248
Government National Mortgage
Association
13.50%, 07/15/2010................ 196,013 235,996
7.00%, 12/25/2025(a).............. 300,000 293,436
Student Loan Marketing Association
7.50%, 03/08/2000................. 400,000 414,436
-----------
3,879,993
-----------
Total U.S. Government Securities
(cost $8,708,609)............. 8,768,092
</TABLE> -----------
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
--------- ------
<S> <C> <C>
CORPORATE BONDS -- 2.00%
- --------------------------------------
FINANCIAL -- 2.00%
Associate Corp.
5.60%, 01/15/2001................. $ 100,000 $ 96,399
Ford Motor Credit Co.
6.25%, 12/08/2005................. 150,000 142,122
-----------
Total Corporate Bonds
(cost $248,223)............... 238,521
-----------
SHORT TERM INVESTMENTS -- 24.42%
- --------------------------------------
MONEY MARKET FUNDS -- 0.01%
State Street Global Advisor Fund,
5.38%,(b)......................... 788 788
REPURCHASE AGREEMENTS -- 24.41%
Repurchase agreement with J.P.
Morgan, 6.60% (Collateralized by
$2,787,000 U.S. Treasury Bond
7.125% due 02/15/23, market value
-- $2,931,419), acquired on
12/31/1996, due 01/02/1997........ 2,909,000 2,909,000
-----------
Total Short Term Investments
(cost $2,909,788)............. 2,909,788
-----------
TOTAL INVESTMENTS -- 100%
- --------------------------------------
(cost $11,866,620).................. $11,916,401
</TABLE> ===========
- -------------------------
(a) Investment purchased on a when-issued basis.
(b) Dividend yields change daily to reflect current market conditions. Rate
stated is the quoted yield as of December 31, 1996.
See notes to the financial statements.
65
<PAGE> 120
T. ROWE PRICE/JNL ESTABLISHED GROWTH SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1996
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<S> <C> <C>
COMMON STOCKS -- 93.81%
- --------------------------------------
FRANCE -- 0.53%
- --------------------------------------
CONFECTIONS & BEVERAGES -- 0.53%
LVMH (Louis Vuitton
Moet-Hennessy)...................... 630 $ 175,941
HONG KONG -- 0.88%
- --------------------------------------
FINANCE COMPANIES -- 0.88%
Hutchinson Whampoa Ltd.............. 37,000 290,613
ITALY -- 0.87%
- --------------------------------------
FINANCE COMPANIES -- 0.51%
Banca Fideuram SPA.................. 77,200 169,718
TELECOMMUNICATIONS -- 0.36%
Telecom Italia SPA.................. 18,600 36,293
Telecom Italia Mobile (a)........... 32,000 80,897
-----------
117,190
-----------
Total Italy....................... 286,908
MALAYSIA -- 0.90%
- --------------------------------------
BUILDING & CONSTRUCTION -- 0.90%
United Engineers (Malaysia) Ltd. ... 32,900 297,018
MEXICO -- 0.61%
- --------------------------------------
CONSUMER PRODUCTS -- 0.61%
Kimberly-Clark De Mexico, SA de
CV.................................. 10,200 201,486
NETHERLANDS -- 2.39%
- --------------------------------------
CONSUMER PRODUCTS -- 1.65%
Elsevier NV......................... 12,700 214,793
Hagemeyer NV........................ 1,650 131,981
Ver Ned Uitgevers................... 9,400 196,548
-----------
543,322
COMPUTERS & TECHNOLOGY -- 0.74%
Getronic NV......................... 9,000 244,483
-----------
Total Netherlands................. 787,805
PORTUGAL -- 1.16%
- --------------------------------------
TELECOMMUNICATIONS -- 1.16%
Telecel -- Communicacoes Pessoais,
SA, (a)........................... 6,000 383,102
SOUTH AFRICA -- 0.38%
- --------------------------------------
METALS & MINING -- 0.38%
Rustenburg Platinum Holdings........ 9,100 124,484
SWEDEN -- 3.18%
- --------------------------------------
DRUGS -- 2.25%
Astra AB -- Class B................. 4,700 226,734
Novartis AG (a)..................... 450 515,390
-----------
742,124
FINANCE COMPANIES -- 0.43%
Kinnevik AB -- Class B.............. 5,100 140,589
RETAIL -- 0.50%
Hennes & Mauritz -- Class B......... 1,200 166,102
-----------
Total Sweden...................... 1,048,815
SWITZERLAND -- 0.35%
- --------------------------------------
INDUSTRIAL MACHINERY -- 0.35%
Sig Schweizerische Industrie........ 45 113,970
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
- --------------------------------------
UNITED KINGDOM -- 3.34%
- --------------------------------------
BUSINESS SERVICES -- 1.21%
Rentokil Group PLC.................. 52,700 $ 397,259
FINANCIAL SERVICES -- 1.63%
Tomkins PLC......................... 116,300 537,965
TELECOMMUNICATIONS -- 0.50%
Vodafone Group PLC.................. 39,000 165,033
-----------
Total United Kingdom.............. 1,100,257
UNITED STATES -- 79.22%
- --------------------------------------
AUTOMOBILE & PARTS -- 0.59%
Exide Corp. ........................ 8,500 195,500
BROADCAST & COMMUNICATIONS -- 1.52%
Walt Disney Co. .................... 7,200 501,300
BUSINESS SERVICES -- 2.00%
CUC International (a)............... 8,600 204,250
Gaylord Entertainment Co. .......... 15,035 343,926
Sabre Group Holdings, Inc., (a)..... 4,000 111,500
-----------
659,676
CHEMICALS -- 0.45%
Great Lakes Chemical Corp. ......... 3,200 149,600
COMPUTERS & SOFTWARE -- 7.53%
Automatic Data Processing, Inc...... 8,600 368,725
Cisco Systems, Inc. (a)............. 8,600 547,175
Ceridian Corp. (a).................. 3,200 129,600
First Data Corp. ................... 9,502 346,823
Microsoft Corp. (a)................. 4,200 347,025
Oracle Systems Corp. (a)............ 7,150 298,513
3Com Corp. (a)...................... 6,100 447,588
-----------
2,485,449
CONFECTIONS & BEVERAGES -- 5.26%
Anheuser-Busch Cos., Inc. .......... 6,800 272,000
Coca-Cola Co. ...................... 18,200 957,775
Pepsico, Inc. ...................... 17,300 506,025
-----------
1,735,800
CONSUMER PRODUCTS -- 4.65%
Crown Cork & Seal, Inc. ............ 4,900 266,437
Nike, Inc. Class B.................. 3,500 209,125
Philip Morris Cos., Inc. ........... 2,500 281,562
Pioneer HI Bred International,
Inc. ............................. 5,400 378,000
Proctor & Gamble Co. ............... 3,700 397,750
-----------
1,532,874
DIVERSIFIED -- 1.14%
Tyco International, Ltd. ........... 7,100 375,412
DRUGS -- 4.52%
Amgen, Inc. (a)..................... 7,300 396,937
Biogen, Inc. (a).................... 6,800 263,500
Cardinal Health, Inc. .............. 6,900 401,925
Merck & Co., Inc. .................. 5,400 427,950
-----------
1,490,312
</TABLE>
See notes to the financial statements.
66
<PAGE> 121
T. ROWE PRICE/JNL ESTABLISHED GROWTH SERIES
SCHEDULE OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
- --------------------------------------
UNITED STATES (CONTINUED)
- --------------------------------------
ELECTRONICS -- 8.38%
Electronic Data Systems Corp. ...... 6,800 $ 294,100
General Electric Co. ............... 10,800 1,067,850
Hewlett Packard Co. ................ 6,300 316,575
Intel Corp. ........................ 6,300 824,907
Maxim Integrated Products, Inc.
(a)............................... 2,900 125,425
Xilinx, Inc. (a).................... 3,700 136,206
-----------
2,765,063
FINANCIAL SERVICES -- 6.98%
Federal Home Loan Mortgage Corp. ... 9,900 1,090,238
Federal National Mortgage
Association....................... 25,400 946,150
Green Tree Financial Corp. ......... 6,900 266,513
-----------
2,302,901
FOOD SERVICE -- 0.75%
McDonald's Corp. ................... 5,500 248,875
HEALTH PRODUCTS & CARE -- 5.49%
Johnson & Johnson................... 12,500 621,875
Pfizer, Inc. ....................... 6,200 513,825
Warner-Lambert Co. ................. 9,000 675,000
-----------
1,810,700
INSURANCE -- 6.77%
Ace Limited......................... 5,400 324,675
Fairfax Financial Holding........... 850 180,019
Partner Re Holdings Limited......... 13,700 465,800
Traveler's/Aetna Property Casualty
Corp. ............................ 19,400 686,275
UNUM Corp. ......................... 8,000 578,000
-----------
2,234,769
MEDICAL SERVICES & SUPPLIES -- 5.69%
Boston Scientific Corp. (a)......... 2,600 156,000
Columbia / HCA Health Corp. ........ 9,200 374,900
Genentech, Inc. (a)................. 8,900 477,262
Medtronic, Inc. .................... 3,500 238,000
Tag Heuer International, SA (a)..... 39,100 630,488
-----------
1,876,650
MERCHANDISING -- 1.01%
Tupperware Corp. ................... 6,200 332,475
METALS & MINING -- 1.09%
Barrick Gold Corp................... 9,100 261,625
Pohang Iron & Steel Co. -- ADR...... 800 16,200
Rustenburg Platinum Holdings........ 6,008 82,204
-----------
360,029
OIL & GAS -- 2.00%
Royal Dutch Petroleum Co. -- ADR.... 1,700 290,275
Western Atlas, Inc. (a)............. 5,200 368,550
-----------
658,825
PACKAGED FOOD -- 0.95%
Heinz H J Co. ...................... 8,800 314,600
PRINTING & PUBLISHING -- 0.93%
Reuters Holdings PLC -- ADR......... 4,000 306,000
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
- --------------------------------------
UNITED STATES (CONTINUED)
- --------------------------------------
RETAIL -- 6.66%
American Stores Co.................. 5,000 $ 204,375
Circuit City Stores, Inc. .......... 11,000 331,375
Gucci Group N V..................... 1,700 108,587
Hasbro, Inc. ....................... 6,900 268,238
Home Depot, Inc. ................... 6,400 320,800
Revco D.S., Inc. (a)................ 17,800 658,600
Walmart Stores, Inc. ............... 13,300 304,237
-----------
2,196,212
TELECOMMUNICATIONS -- 3.15%
Compania Anon Nacional Telecom De
Venezuela -- ADR (a).............. 7,100 199,688
Grupo Iusacell S.A. -- ADR (a)...... 1,900 14,488
Grupo Iusacell S.A. DE CV (a)....... 36,300 208,725
Telecomunicacoes Brasileiras
Telebras SA -- ADR................ 3,400 260,100
Vodafone Group PLC -- ADR........... 8,600 355,825
-----------
1,038,826
TRANSPORTATION -- 0.86%
Tranz Rail Holdings -- ADR (a)...... 16,100 284,769
WHOLESALE -- 0.85%
Alco Standard Corp. (a)............. 5,400 278,775
-----------
Total United States............... 26,135,392
-----------
Total Common Stock
(cost $26,952,849)............ 30,945,791
-----------
<CAPTION>
PRINCIPAL
AMOUNT
----------
<S> <C> <C>
CORPORATE BONDS -- 0.19%
- --------------------------------------
INDUSTRIAL -- 0.19%
Reliance Industries Ltd. Convertible
B, 3.50%, 11/03/1999, convertible
until 10/03/1999.................... $ 60,000 63,381
----------
Total Corporate Bonds
(cost $61,666).................. 63,381
----------
SHORT-TERM INVESTMENTS -- 6.00%
- --------------------------------------
COMMERCIAL PAPER -- 5.22%
Abbott Laboratories
6.15%, 01/03/1997................. 1,260,000 1,259,569
Ciesco L P
5.45%, 02/06/1997................. 100,000 99,455
Dillard Investment Company
5.52%, 01/10/1997................. 181,000 180,750
Kellogg Company
5.38%, 02/07/1997................. 185,000 183,977
-----------
1,723,751
FEDERAL HOME LOAN MORTGAGE NOTES -- 0.60%
5.50%, 01/09/1997................... 197,000 196,759
</TABLE>
See notes to the financial statements.
67
<PAGE> 122
T. ROWE PRICE/JNL ESTABLISHED GROWTH SERIES
SCHEDULE OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
--------- ------
<S> <C> <C>
SHORT-TERM INVESTMENTS (CONTINUED)
- --------------------------------------
UNITED STATES (CONTINUED)
- --------------------------------------
MONEY MARKET FUNDS -- 0.00%
State Street Global Advisor Fund
5.38% (b)......................... $ 386 $ 386
U.S. TREASURY BILLS -- 0.18%
4.98%, 01/23/1997................. 59,000 58,820
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
--------- ------
<S> <C> <C>
SHORT-TERM INVESTMENTS (CONTINUED)
- --------------------------------------
UNITED STATES (CONTINUED)
- --------------------------------------
Total Short Term Investments
(cost $1,979,716)................. $ 1,979,716
-----------
TOTAL INVESTMENTS -- 100%
- --------------------------------------
(cost $28,994,231).................. $32,988,888
===========
</TABLE>
- -------------------------
(a) Non-income producing.
(b) Dividend yields change daily to reflect current market conditions. Rate
stated is the quoted as of December 31, 1996.
See notes to the financial statements.
68
<PAGE> 123
T. ROWE PRICE/JNL INTERNATIONAL EQUITY INVESTMENT SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1996
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<S> <C> <C>
COMMON STOCKS -- 93.73%
- ---------------------------------------
ARGENTINA -- 0.23%
- ----------------
ENERGY -- 0.21%
Naviera Perez Compano -- Class B..... 13,430 $ 94,432
Sociedad Comercial Del Plata......... 2,790 7,144
-----------
101,576
TELECOMMUNICATIONS -- 0.02%
Telecom Argentina STET............... 1,630 6,717
-----------
Total Argentina.................... 108,293
AUSTRALIA -- 1.64%
- ---------------------------------------
BASIC INDUSTRY -- 0.59%
Broken Hill Properties Co............ 8,043 114,562
Lend Lease Corp...................... 2,365 45,868
Smith (Howard) Ltd................... 3,113 25,610
Tab Corp. Holdings Ltd............... 12,000 57,229
Western Mining Corp. Holdings Ltd.... 6,000 37,819
-----------
281,088
CONSUMER PRODUCTS -- 0.27%
Coca-Cola Amatil..................... 971 10,381
News Corp............................ 16,330 86,186
Publishing & Broadcasting Ltd........ 7,000 34,051
-----------
130,618
FINANCIAL COMPANIES -- 0.41%
Australia & New Zealand Bank Group
Ltd................................ 7,000 44,122
Commonwealth Installment Receipts.... 7,300 45,433
National Australia Bank.............. 3,113 36,621
Westpac Banking Corp................. 12,000 68,293
-----------
194,469
ENERGY -- 0.32%
Australia Gas Light Co............... 14,237 81,024
Woodside Petroleum Ltd............... 10,000 73,047
-----------
154,071
INSURANCE -- 0.05%
National Mutual Holdings............. 15,000 22,415
-----------
Total Australia.................... 782,661
AUSTRIA -- 0.04%
- ---------------------------------------
ENERGY -- 0.02%
EVN-Energie Versorgung Niedr......... 60 9,032
TRANSPORTATION & STORAGE -- 0.02%
Flughafen Wien AG.................... 190 9,686
-----------
Total Austria...................... 18,718
BELGIUM -- 0.99%
- ---------------------------------------
BASIC INDUSTRY -- 0.18%
UCB.................................. 33 86,017
FINANCIAL COMPANIES -- 0.81%
Credit Communal Holding Dexia(a)..... 241 21,990
Generale Banque...................... 356 127,634
Kredietbank.......................... 730 239,288
-----------
388,912
-----------
Total Belgium...................... 474,929
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ --------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
- -----------------------------------------------------------------
BRAZIL -- 0.47%
- ---------------------------------------
BASIC INDUSTRY -- 0.08%
Sider Nacional....................... 706,000 $ 20,043
White Martins SA..................... 11,320,000 16,341
-----------
36,384
ENERGY -- 0.23%
Electrobras.......................... 42,330 15,154
Gruma SA De CV(a).................... 11,531 70,311
Gruma SA De CV -- ADR (144a)......... 1,047 25,180
-----------
110,645
TELECOMMUNICATIONS -- 0.16%
Telebras............................. 755,750 54,185
Companhia Brasileira De Dist......... 1,390 24,747
-----------
78,932
-----------
Total Brazil....................... 225,961
CANADA -- 0.29%
- ---------------------------------------
BASIC INDUSTRY -- 0.21%
Alcan Aluminium...................... 3,040 103,235
FINANCIAL COMPANIES -- 0.08%
Royal Bank of Canada................. 570 20,023
Royal Bank of Canada................. 740 16,397
-----------
36,420
-----------
Total Canada....................... 139,655
CZECH REPUBLIC -- 0.03%
- ---------------------------------------
TELECOMMUNICATIONS -- 0.03%
SPT Telecommunications AS............ 130 16,185
DENMARK -- 0.23%
- ---------------------------------------
FINANCIAL COMPANIES -- 0.21%
Den Danske Bank AB................... 800 64,507
Unidanmark........................... 670 34,690
-----------
99,197
TELECOMMUNICATIONS -- 0.02%
Teledanmark -- Class B............... 200 11,034
-----------
Total Denmark...................... 110,231
FINLAND -- 0.21%
- ---------------------------------------
CAPITAL GOODS -- 0.21%
Nokia (AB) OY........................ 1,770 102,660
FRANCE -- 8.53%
- ---------------------------------------
BASIC INDUSTRY -- 0.67%
Cie De Saint Gobain.................. 1,350 190,980
GTM Entrepose........................ 410 18,965
Lapeyre.............................. 880 50,543
Pathe(a)............................. 250 60,229
-----------
320,717
CAPITAL GOODS -- 0.49%
Chargeurs............................ 250 12,383
Legrand.............................. 359 61,165
Rexel................................ 220 66,782
Schneider............................ 1,980 91,549
-----------
231,879
</TABLE>
See notes to the financial statements.
69
<PAGE> 124
T. ROWE PRICE/JNL INTERNATIONAL EQUITY INVESTMENT SERIES
SCHEDULE OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
---------- -----------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
- -----------------------------------------------------------------
FRANCE (CONTINUED)
- -----------------------------------------------------------------
CONSUMER PRODUCTS -- 4.44%
Accor................................ 435 $ 55,082
Canal Plus........................... 420 92,767
Carrefour Super Marche............... 705 458,722
Castorama Dubois Investissment....... 212 36,488
Guilbert SA.......................... 598 116,984
Havas................................ 400 28,062
L'Oreal.............................. 162 61,010
LVMH Louis Vuitton Moet-Hennessy..... 1,240 346,297
Pinault Printemps Redoute............ 893 354,205
Sanofi............................... 1,467 145,894
Sodexho.............................. 480 267,361
Television Francais.................. 1,660 158,689
-----------
2,121,561
ENERGY -- 1.15%
Elf Aquitaine........................ 1,790 162,941
Primagaz (Cie Des Gaz Petrole)....... 755 88,909
Total SA -- Class B.................. 3,667 298,251
-----------
550,101
FINANCIAL COMPANIES -- 0.11%
CLF Dexia............................ 160 13,939
Credit Local De France............... 244 21,256
Societe Generale..................... 180 19,462
-----------
54,657
INSURANCE -- 0.18%
AXA.................................. 815 51,836
Assurances Generales................. 1,086 35,059
-----------
86,895
TELECOMMUNICATIONS -- 0.19%
Alcatel Alsthom...................... 1,110 89,168
UTILITIES -- 1.30%
Eaux (Cie Generale Des).............. 4,990 618,400
-----------
Total France....................... 4,073,378
GERMANY -- 3.55%
- ---------------------------------------
BASIC INDUSTRY -- 1.62%
Bayer AG............................. 9,116 372,033
Bilfinger & Berger Bauag............. 1,100 40,389
Hoechst AG........................... 1,110 52,442
Schering AG.......................... 434 36,637
Veba AG.............................. 4,685 270,968
-----------
772,469
CAPITAL GOODS -- 0.30%
Buderus AG........................... 78 38,524
Mannesmann AG........................ 238 103,162
-----------
141,686
CONSUMER PRODUCTS -- 0.91%
Altana AG............................ 31 24,134
Gehe AG.............................. 5,604 358,717
Hornbach Baumarkt AG................. 200 6,343
Praktiker Bau-und Heimwerkemaekte.... 629 12,590
Volkswagen AG........................ 80 33,273
-----------
435,057
<CAPTION>
MARKET
SHARES VALUE
---------- -----------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
- -----------------------------------------------------------------
GERMANY (CONTINUED)
- -----------------------------------------------------------------
COMPUTERS & SOFTWARE -- 0.08%
Sap AG............................... 280 $ 38,121
FINANCIAL COMPANIES -- 0.45%
Allianz AG Holdings.................. 94 171,042
Deutsche Bank AG..................... 923 43,127
-----------
214,169
MEDICAL SERVICES & SUPPLIES -- 0.19%
Rhon-Klinikum AG..................... 900 94,164
-----------
Total Germany...................... 1,695,666
HONG KONG -- 3.58%
- ---------------------------------------
BASIC INDUSTRY -- 0.15%
Cathay Pacific Air................... 47,000 74,135
CHEMICALS -- 0.19%
Shanghai Petrochemical Co. Ltd....... 180,000 54,690
Yizheng Chemical Fiber Co. Ltd....... 144,000 35,002
-----------
89,692
FINANCE COMPANIES -- 3.24%
Dao Heng Bank Group Ltd.............. 23,000 110,324
Guangdong Investments Ltd............ 94,000 90,542
Guangzhou Investments................ 194,000 92,805
Hopewell Holdings.................... 251,000 162,260
Hutchison Whampoa Ltd................ 36,000 282,759
New World International.............. 50,205 339,157
Swire Pacific Co..................... 21,000 200,239
Wharf Holdings....................... 54,000 269,494
-----------
1,547,580
-----------
Total Hong Kong.................... 1,711,407
ITALY -- 1.70%
- ---------------------------------------
BASIC INDUSTRY -- 0.28%
Ente Nazionale Idrocarburi Spa
(ENI).............................. 24,000 123,164
Finanziaria Autogrill Spa(a)......... 3,031 2,937
Unicem (Union-Cem-March Emil)........ 1,400 9,136
-----------
135,237
CONSUMER PRODUCTS -- 0.04%
Rinascente (La)...................... 3,000 17,403
FINANCIAL COMPANIES -- 0.32%
Banca Fideuram....................... 21,040 46,255
IMI Spa.............................. 7,040 60,330
Istituto National Assicurazioni...... 8,000 10,421
Mediolanum(a)........................ 3,950 37,391
-----------
154,397
UTILITIES -- 0.09%
Italgas (Societa Italiana II Gas)
Spa................................ 10,000 41,760
TELECOMMUNICATIONS -- 0.97%
STET................................. 38,000 172,841
STET Di Risp......................... 13,000 43,919
Telecom Italia Di Risp............... 26,979 70,071
Telecom Italia Mobile(a)............. 63,601 160,784
Telecom Italia Spa................... 10,797 15,409
-----------
463,024
-----------
Total Italy........................ 811,821
</TABLE>
See notes to the financial statements.
70
<PAGE> 125
T. ROWE PRICE/JNL INTERNATIONAL EQUITY INVESTMENT SERIES
SCHEDULE OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
---------- -----------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
- -----------------------------------------------------------------
JAPAN -- 20.85%
- ---------------------------------------
BASIC INDUSTRY -- 5.12%
Daiwa House Industry Co.............. 16,000 $ 205,854
Denso Corp........................... 17,000 409,550
Inax................................. 5,000 37,043
Ishihara Sangyo Kaisha............... 6,000 14,507
Kawada Industries.................... 1,000 6,131
Kumagai Gumi......................... 10,000 24,782
Kuraray Co. Ltd...................... 16,000 147,828
Mitsubishi Paper Mills Ltd........... 8,000 31,293
National House Industry.............. 3,000 39,893
Nippon Hodo.......................... 3,000 34,712
Nippon Steel Corp.................... 74,000 218,530
Sangetsu Co. Ltd..................... 1,000 20,896
Sekisui Chemical Co. Ltd............. 19,000 191,952
Sekisui House........................ 14,000 142,647
Shinetsu Chemical Co. Ltd............ 11,000 200,414
Sumitomo Electric Industries Ltd..... 26,000 363,699
Sumitomo Forestry Co. Ltd............ 7,000 85,226
Teijin............................... 36,000 157,292
Tokyo Steel Manufacturing............ 6,000 85,485
Yurtec Corp.......................... 2,100 28,469
-----------
2,446,203
CAPITAL GOODS -- 7.55%
Advantest............................ 1,100 51,576
Alps Electric Co..................... 6,000 65,279
Amada Co. Ltd........................ 12,000 93,256
Canon, Inc........................... 19,000 419,998
Citizen Watch Co..................... 7,000 50,168
DDI Corp............................. 19 125,671
Dai Nippon Screen Manufacturing...... 11,000 81,211
Daifuku Co. Ltd...................... 2,000 25,214
Fanuc Co. Ltd........................ 3,000 96,106
Hitachi Ltd.......................... 21,000 195,838
Hitachi Zosen Corp................... 18,000 69,942
Kokuyo Co............................ 7,000 172,869
Komatsu Ltd.......................... 18,000 147,656
Komori Corp.......................... 5,000 106,208
Kyocera Corp......................... 6,000 374,061
Makita Corp.......................... 10,000 139,884
Mitsubishi Heavy Industries Ltd...... 54,000 428,978
Murata Manufacturing Co. Ltd......... 7,000 232,709
NEC Corp............................. 36,000 435,196
Nippon Telephone & Telegraph Corp.... 18 136,465
SEGA Enterprises..................... 2,000 67,352
Tokyo Electron Ltd................... 3,000 91,961
-----------
3,607,598
CONSUMER PRODUCTS -- 6.44%
Daiichi Pharmaceutical............... 13,000 208,790
Honda Motor Co....................... 2,000 57,163
Ito-Yokado Co........................ 5,000 217,598
Kao Corp............................. 6,000 69,942
Marui Co. Ltd........................ 12,000 216,562
Matsushita Electric Industrial Co.... 18,000 293,757
Mitsubishi Corp...................... 8,000 82,894
Pioneer Electronic Corp.............. 9,000 171,747
Sankyo............................... 12,000 339,867
<CAPTION>
MARKET
SHARES VALUE
---------- -----------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
- -----------------------------------------------------------------
JAPAN (CONTINUED)
- -----------------------------------------------------------------
CONSUMER PRODUCTS (CONTINUED)
- -----------------------------------------------------------------
Seven Eleven Japan Co. Ltd........... 2,000 $ 117,088
Sharp Corp........................... 15,000 213,712
Shiseido Co.......................... 4,000 46,283
Sony Corp............................ 4,500 294,923
Sumitomo Corp........................ 24,000 189,206
TDK Corp............................. 4,000 260,772
Toppan Printing...................... 12,000 150,246
UNY Co............................... 8,000 146,447
-----------
3,076,997
ENERGY -- 0.05%
Mitsui Petrochemical Industries...... 5,000 25,904
FINANCIAL COMPANIES -- 1.29%
Mitsui Fudosan....................... 29,000 290,476
Nomura Securities Co. Ltd............ 18,000 270,443
Tokio Marine & Fire Insurance Co..... 6,000 56,472
-----------
617,391
TRANSPORTATION & STORAGE -- 0.40%
East Japan Railway................... 41 184,449
-----------
Total Japan........................ 9,958,542
MALAYSIA -- 3.24%
- ---------------------------------------
BASIC INDUSTRY -- 1.25%
Berjaya Sports Toto Berhad........... 34,000 169,630
Technology Resources Industries(a)... 29,000 57,185
Time Engineering..................... 23,000 42,621
United Engineers Berhad.............. 36,000 325,005
-----------
594,441
ENTERTAINMENT -- 0.47%
Resorts World Berhad................. 16,000 72,857
Tanjong.............................. 38,000 151,970
-----------
224,827
CAPITAL GOODS -- 0.36%
Renong Berhad........................ 97,000 172,069
FINANCIAL COMPANIES -- 1.16%
Affin Holdings Berhad................ 71,000 195,387
Commerce Asset Holdings.............. 13,000 97,802
MBF Capital Berhad................... 59,000 95,783
Multi-Purpose Holding................ 86,000 166,858
-----------
555,830
-----------
Total Malaysia..................... 1,547,167
MEXICO -- 0.43%
- ---------------------------------------
BASIC INDUSTRY -- 0.13%
Cemex SA............................. 12,063 43,443
Cemex SA -- Class B.................. 4,950 19,493
-----------
62,936
CONSUMER PRODUCTS -- 0.23%
Fomento Ecomomico Ser B.............. 4,629 15,877
Grupo Industrial Maseca SA De Cv --
Class B............................ 28,800 36,512
Grupo Modelo SA -- Class C........... 4,844 28,121
Kimberly-Clark Mexicano -- Class A... 1,532 30,262
-----------
110,772
</TABLE>
See notes to the financial statements.
71
<PAGE> 126
T. ROWE PRICE/JNL INTERNATIONAL EQUITY INVESTMENT SERIES
SCHEDULE OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
---------- -----------
COMMON STOCKS (CONTINUED)
- -----------------------------------------------------------------
<S> <C> <C>
MEXICO (CONTINUED)
- -----------------------------------------------------------------
CONSUMER PRODUCTS (CONTINUED)
- -----------------------------------------------------------------
FINANCIAL COMPANIES -- 0.07%
Grupo Financiero Banamex -- Class
A.................................. 14,288 $ 30,166
Grupo Financiero Banamex -- Class
L.................................. 465 916
-----------
31,082
-----------
Total Mexico....................... 204,790
NETHERLANDS -- 10.20%
- ---------------------------------------
BASIC INDUSTRY -- 0.21%
Akzo Nobel NV........................ 238 32,533
Kon Pitt Nederland................... 1,407 53,705
Otra NV.............................. 670 11,526
-----------
97,764
CONSUMER PRODUCTS -- 6.27%
Ahold (Kon) NV....................... 3,249 203,239
CSM NV............................... 3,666 203,844
Elsevier NV.......................... 55,704 942,112
Hagemeyer NV......................... 780 62,391
Nutricia (Verenigde Bedrijven)....... 550 83,623
Polygram NV.......................... 5,187 264,382
Unilever NV.......................... 1,510 267,278
Wolters Kluwer NV.................... 7,290 969,044
-----------
2,995,913
ENERGY -- 2.10%
Royal Dutch Petroleum Co............. 5,710 1,001,772
FINANCIAL COMPANIES -- 1.62%
ABN AMRO Holdings NV................. 3,528 229,683
Fortis AMEV NV....................... 3,835 134,386
Internationale Nederlanden Groep
NV................................. 11,400 410,704
-----------
774,773
-----------
Total Netherlands.................. 4,870,222
NEW ZEALAND -- 0.61%
- ---------------------------------------
BASIC INDUSTRY -- 0.30%
Carter Holt Harvey................... 13,000 29,502
Fernz Corp........................... 5,000 17,144
Fletcher Challenge Building(a)....... 9,750 29,984
Fletcher Challenge Energy............ 1,750 5,072
Fletcher Challenge Forest Division... 32,993 55,280
Fletcher Challenge Paper(a).......... 3,500 7,200
-----------
144,182
TELECOMMUNICATIONS -- 0.26%
New Zealand Telecom.................. 24,000 122,503
TRANSPORTATION & STORAGE -- 0.05%
Air New Zealand -- Class B........... 8,909 24,186
-----------
Total New Zealand.................. 290,871
NORWAY -- 1.53%
- ---------------------------------------
CAPITAL GOODS -- 0.69%
Orkla AS............................. 4,780 330,136
ENERGY -- 0.81%
Norsk Hydro.......................... 6,890 368,930
Saga Petroleum -- Class B............ 1,190 18,469
-----------
387,399
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
---------- -----------
COMMON STOCKS (CONTINUED)
- -----------------------------------------------------------------
<S> <C> <C>
NORWAY (CONTINUED)
- -----------------------------------------------------------------
CONSUMER PRODUCTS (CONTINUED)
- -----------------------------------------------------------------
TRANSPORTATION & STORAGE -- 0.03%
Bergesen D-Y AS...................... 650 $ 15,738
-----------
Total Norway....................... 733,273
PHILLIPPINES -- 0.17%
- ---------------------------------------
FINANCIAL -- 0.17%
Phillippine National Bank............ 6,900 81,987
PORTUGAL -- 0.43%
- ---------------------------------------
CONSUMER PRODUCTS -- 0.43%
Jeronimo Martins SGPS................ 2,000 103,154
Jeronimo Martins..................... 2,000 33,705
Jeronimo Martins..................... 1,333 68,752
-----------
Total Portugal..................... 205,611
SINGAPORE -- 2.21%
- ---------------------------------------
CAPITAL GOODS -- 0.13%
City Developments.................... 4,000 36,018
Far East-Levingston Shipbuilding..... 5,000 26,084
-----------
62,102
CONSUMER PRODUCTS -- 0.55%
Fraser & Neave Ltd................... 7,400 76,152
Singapore Press Holdings............. 9,400 185,407
-----------
261,559
FINANCIAL COMPANIES -- 1.43%
DBS Land............................. 15,000 55,206
Development Bank of Singapore........ 6,000 81,041
Overseas Union Bank.................. 26,000 200,672
Singapore Land....................... 21,000 116,308
United Industrial Corp............... 22,000 18,552
United Overseas Bank................. 19,000 211,820
-----------
683,599
TRANSPORTATION & STORAGE -- 0.10%
Keppel Corp.......................... 5,000 38,948
Singapore Airlines Ltd............... 1,000 9,076
-----------
48,024
-----------
Total Singapore.................... 1,055,284
SOUTH KOREA -- 0.67%
- ---------------------------------------
BASIC INDUSTRY -- 0.20%
Pohang Iron & Steel.................. 700 30,237
Samsung Electronics.................. 1,000 53,846
Yukong Ltd........................... 688 13,027
-----------
97,110
FINANCIAL COMPANIES -- 0.31%
Cho Hung Bank........................ 4,800 37,491
Hanil Bank........................... 2,900 19,905
Hanil Securities..................... 2,200 15,986
Kook Min Bank........................ 2,000 27,692
Samsung Fire & Marine Insurance...... 10 3,669
Seoul Bank........................... 1,100 5,533
Shin Han Bank........................ 2,840 38,651
-----------
148,927
</TABLE>
See notes to the financial statements.
72
<PAGE> 127
T. ROWE PRICE/JNL INTERNATIONAL EQUITY INVESTMENT SERIES
SCHEDULE OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
---------- -----------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
- -----------------------------------------------------------------
SOUTH KOREA (CONTINUED)
- -----------------------------------------------------------------
CONSUMER PRODUCTS (CONTINUED)
- -----------------------------------------------------------------
UTILITIES -- 0.16%
Korea Electric Power Corp............ 2,600 $ 75,692
-----------
Total South Korea.................. 321,729
SPAIN -- 2.58%
- ---------------------------------------
BASIC INDUSTRY -- 0.03%
Fomento de Construcciones y Contratas
SA................................. 144 13,421
CONSUMER PRODUCTS -- 0.09%
Centros Comerciales Pryca............ 1,524 32,282
Centros Commercial................... 610 12,498
-----------
44,780
ENERGY -- 0.40%
Repsol SA............................ 5,022 192,641
FINANCIAL COMPANIES -- 0.67%
Argentaria Corp...................... 1,205 53,927
Banco De Santander SA................ 2,024 129,555
Banco Popular Espanol................ 684 134,350
-----------
317,832
UTILITIES -- 1.39%
Aguas De Barcelona................... 408 16,971
Empresa Nacional De Elec (Endesa).... 3,785 269,389
Gas Natural Sdg SA................... 778 180,979
Iberdrola I SA....................... 10,268 145,528
Telefonica De Espana................. 2,160 50,163
-----------
663,030
-----------
Total Spain........................ 1,231,704
SWEDEN -- 2.66%
- ---------------------------------------
BASIC INDUSTRY -- 0.07%
Stora Kopparbergs Bergsl AB.......... 2,500 34,091
CAPITAL GOODS -- 0.54%
Atlas Copco AB -- Class B............ 4,770 116,104
Sandvik AB -- Class A................ 560 15,109
Sandvik AB -- Class B................ 4,290 116,373
Scribona AB.......................... 750 8,413
-----------
255,999
CONSUMER PRODUCTS -- 1.86%
Astra AB............................. 10,800 521,005
Electrolux Co. AB -- Class B......... 3,000 174,195
Esselte -- Class B................... 560 12,399
Hennes & Mauritz AB -- Class B....... 1,310 181,328
-----------
888,927
ELECTRICAL EQUIPMENT -- 0.19%
ABB AB............................... 830 93,711
-----------
Total Sweden....................... 1,272,728
SWITZERLAND -- 4.34%
- ---------------------------------------
BASIC INDUSTRY -- 0.72%
ABB AG............................... 277 344,569
BUSINESS SERVICES -- 0.38%
Adecco SA(a)......................... 723 181,493
<CAPTION>
MARKET
SHARES VALUE
---------- -----------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
- -----------------------------------------------------------------
SWITZERLAND (CONTINUED)
- -----------------------------------------------------------------
CONSUMER PRODUCTS (CONTINUED)
- -----------------------------------------------------------------
CONSUMER PRODUCTS -- 2.82%
Nestle SA............................ 360 $ 386,492
Novartis AG(a)....................... 433 495,139
Roche Holdings AG.................... 60 466,866
-----------
1,348,497
FINANCIAL COMPANIES -- 0.42%
Credit Suisse Group.................. 610 62,663
Schweizerischer Bankverein........... 720 136,900
-----------
199,563
-----------
Total Switzerland.................. 2,074,122
THAILAND -- 0.39%
- ---------------------------------------
BASIC INDUSTRY -- 0.02%
Siam Cement Public Co................ 300 9,405
CAPITAL GOODS -- 0.04%
Advanced Information Service PLC..... 2,540 21,195
FINANCIAL COMPANIES -- 0.30%
Bangkok Bank......................... 8,700 84,130
Siam Commercial Bank Public Co....... 4,080 29,591
Thai Farmers Bank Public............. 4,200 26,203
-----------
139,924
TELECOMMUNICATIONS -- 0.03%
Total Access Communications.......... 2,000 13,800
-----------
Total Thailand..................... 184,324
UNITED KINGDOM -- 16.61%
- ---------------------------------------
BASIC INDUSTRY -- 1.21%
Caradon PLC.......................... 42,000 172,691
Electrocomponents PLC................ 15,000 118,468
Heywood Williams Grp................. 3,000 12,232
Laing (John)......................... 7,000 33,339
RTZ Corp............................. 15,000 241,048
-----------
577,778
CAPITAL GOODS -- 0.65%
Rolls-Royce.......................... 7,000 30,821
Tomkins.............................. 61,000 282,166
-----------
312,987
CONSUMER GOODS -- 9.63%
ASDA Group........................... 84,000 177,009
Argos................................ 18,200 239,154
Cadbury Schweppes.................... 23,000 194,261
Coats Viyella........................ 12,000 27,548
Compass Group........................ 14,000 148,707
GKN PLC.............................. 2,000 34,298
Glaxo Wellcome....................... 24,000 390,612
Grand Metropolitan................... 38,000 298,167
Guiness.............................. 30,000 235,909
Hillsdown Holdings................... 11,000 37,691
Kingfisher........................... 33,000 356,176
Ladbroke Group....................... 16,000 63,594
Rank Group........................... 4,000 30,015
Rank Organisation.................... 21,000 157,581
Reed International................... 31,000 583,142
Safeway.............................. 31,000 214,031
</TABLE>
See notes to the financial statements.
73
<PAGE> 128
T. ROWE PRICE/JNL INTERNATIONAL EQUITY INVESTMENT SERIES
SCHEDULE OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
---------- -----------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
- -----------------------------------------------------------------
UNITED KINGDOM (CONTINUED)
- -----------------------------------------------------------------
CONSUMER PRODUCTS (CONTINUED)
- -----------------------------------------------------------------
Sears Holdings....................... 8,000 $ 12,883
Smith (David S)...................... 19,000 101,558
SmithKline Beecham................... 56,000 775,193
T&N PLC.............................. 21,000 62,601
Tesco PLC............................ 23,000 139,489
United Newspapers & Media............ 27,000 322,409
-----------
4,602,028
ENERGY -- 1.55%
British Gas.......................... 14,000 53,726
British Petroleum.................... 16,000 191,879
Shell Transport and Trading Co....... 28,500 494,124
-----------
739,729
FINANCIAL COMPANIES -- 2.59%
Abbey National....................... 36,000 471,201
National Westminster Bank............ 65,000 763,920
-----------
1,235,121
UTILITIES -- 0.98%
Cable & Wireless..................... 31,000 259,173
East Midland Electricity............. 5,000 56,707
London Electricity................... 12,857 149,892
-----------
465,772
-----------
Total United Kingdom............... 7,933,415
UNITED STATES -- 5.32%
- ---------------------------------------
BANKS -- 0.21%
Banco De Galicia Buenos Aires --
ADR................................ 1,581 38,339
Banco Frances Del Rio De La Plata --
ADR................................ 1,327 36,495
Banco Latinoamericano De
Exportaciones SA................... 477 24,208
-----------
99,042
BUILDING & CONSTRUCTION -- 0.20%
Cemex SA -- ADR...................... 13,410 96,248
CONFECTIONS & BEVERAGES -- 0.26%
Compania Cervecerias Unidas -- ADR... 530 8,546
Panamerican Beverages, Inc........... 2,420 113,437
-----------
121,983
DURABLE GOODS -- 0.39%
First Pacific Co..................... 111,315 144,640
Industrie Natuzzi -- ADR............. 1,810 41,630
-----------
186,270
ELECTRIC UTILITIES -- 0.73%
Cemig Cia Energetica Minas Gerais --
ADR................................ 2,595 88,405
Centrais Electricas Brasileiras --
ADR................................ 3,000 53,701
Cesp Cia Energetica De Sao Paolo --
ADR................................ 1,050 12,075
Chilgener SA -- ADR.................. 604 12,608
Empresa National Electric -- ADR..... 1,860 28,830
Enersis SA -- ADR.................... 1,180 32,745
Huaneng Power International, Inc. --
ADR(a)............................. 5,400 121,500
-----------
349,864
<CAPTION>
MARKET
SHARES VALUE
---------- -----------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
- -----------------------------------------------------------------
UNITED STATES (CONTINUED)
- -----------------------------------------------------------------
CONSUMER PRODUCTS (CONTINUED)
- -----------------------------------------------------------------
ELECTRONICS -- 0.17%
Grupo Televisa GDR................... 531 13,607
Samsung Electronics Ltd.(144a)....... 1,650 68,269
-----------
81,876
FINANCIAL SERVICES -- 0.62%
AFP Provida -- ADR................... 178 $ 3,338
Brazil Fund, Inc..................... 870 19,358
Chile Fund, Inc...................... 1,320 27,555
Cifra SA De CV -- ADR................ 53,603 65,503
Guoco Group(a)....................... 32,000 179,145
Korea Fund, Inc...................... 213 3,195
-----------
298,094
METALS & MINING -- 0.26%
USINAS -- ADR........................ 12,080 123,229
OIL & GAS -- 0.22%
Enron Global Power & Pipeline
Partnership........................ 260 7,020
Chilectra SA -- ADR.................. 560 28,901
Repsol SA -- ADR..................... 130 4,956
Sociedad Comercial Del Plata(144a)... 500 12,802
Transportadora De Gas Del Sur --
ADR................................ 600 7,350
YPF Sociedad Anonima -- ADR.......... 1,696 42,824
-----------
103,853
REAL ESTATE -- 0.64%
Hong Kong Land Holdings.............. 109,908 305,544
RETAIL -- 0.04%
Gucci Group NV....................... 328 20,951
TELECOMMUNICATIONS -- 1.58%
Compania Anon Nacional Telefonos De
Vez -- ADR......................... 960 27,000
Compania De Telecomunicaciones Chile
-- ADR............................. 320 32,360
Telecom Argentina STET -- ADR........ 180 7,268
Telecomunicacoes Brasileiras Telebras
SA -- ADR.......................... 5,422 417,443
Telefonica De Argentina -- ADR....... 2,790 72,191
Telefonica De Mexico -- ADR.......... 5,615 185,295
Telefonica Del Peru -- ADR........... 591 11,155
-----------
752,712
-----------
Total United States.............. 2,539,666
-----------
Total Common Stock
(cost $39,621,098)............. 44,777,000
-----------
RIGHTS & WARRANTS -- 0.06%
- ---------------------------------------
BELGIUM -- 0.00%
- ---------------------------------------
BANK -- 0.00%
Generale De Banque(a)................ 26 15
FRANCE -- 0.00%
- ---------------------------------------
ENERGY -- 0.00%
Primagaz (Cie Des Gaz Petrole)
Warrants(a)........................ 15 373
</TABLE>
See notes to the financial statements.
74
<PAGE> 129
T. ROWE PRICE/JNL INTERNATIONAL EQUITY INVESTMENT SERIES
SCHEDULE OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
---------- -----------
<S> <C> <C>
RIGHTS & WARRANTS (CONTINUED)
- -----------------------------------------------------------------
CONSUMER PRODUCTS (CONTINUED)
- -----------------------------------------------------------------
ITALY -- 0.00%
- ---------------------------------------
BANKS -- 0.00%
Rinascente SPA Warrants(a)........... 150 $ 66
MALAYSIA -- 0.01%
- ---------------------------------------
FINANCIAL -- 0.01%
Multi Purpose Holdings Rights(a)..... 86,000 $ --
Renong Berhad Warrants(a)............ 5,125 2,516
-----------
2,516
PORTUGAL -- 0.03%
- ---------------------------------------
CONSUMER PRODUCTS -- 0.03%
Jeronimo Martins Bond Warrants(a).... 333 17,175
SINGAPORE -- 0.02%
- ---------------------------------------
FINANCIAL -- 0.02%
United Overseas Bank Warrants(a)..... 3,000 10,591
SPAIN -- 0.00%
- ---------------------------------------
UTILITIES -- 0.00%
Aguas De Barcelona(a)................ 5 208
THAILAND -- 0.00%
- ---------------------------------------
FINANCIAL -- 0.00%
Thai Farmers Bank Warrants(a)........ 525 415
-----------
Total Rights & Warrants
(cost $34,956)................... 31,359
-----------
PREFERRED STOCKS -- 1.80%
- ---------------------------------------
AUSTRALIA -- 0.06%
- ---------------------------------------
Sydney Harbour Casino................ 18,000 27,756
BRAZIL -- 1.43%
- ---------------------------------------
Banco Bradesco SA.................... 10,648,890 77,169
Banco Itau SA........................ 46,000 19,921
Brahma............................... 127,043 69,445
Brasmotor SA......................... 82,150 22,808
Cemig CIA Energy..................... 1,321,597 45,024
CIM Port Itau CIA.................... 73,000 25,640
Coteminas-CIA Tec.................... 55,000 17,552
Lojas Americanas..................... 815,665 10,754
Petrol Brasileiros................... 355,745 56,660
Telecomunicacoes Brasileiras SA...... 1,078,910 83,065
<CAPTION>
MARKET
SHARES VALUE
---------- -----------
<S> <C> <C>
PREFERRED STOCKS (CONTINUED)
- -----------------------------------------------------------------
BRAZIL (CONTINUED)
- -----------------------------------------------------------------
CONSUMER PRODUCTS (CONTINUED)
- -----------------------------------------------------------------
Telecommunicacoes de Rio de Janiero
SA................................. 148,000 $ 18,728
Telecommunicacoes De Minas Gerais --
Telemig............................ 158,000 19,539
Telesp -- Tel Sao Pau Pref........... 482,405 104,457
Unibanco Uniiao Banco................ 2,036,333 66,434
Usinas............................... 44,146,000 45,034
-----------
Total Brazil....................... 682,230
GERMANY -- 0.22%
- ---------------------------------------
Fielmann AG.......................... 336 10,481
Hornbach Holdings AG................. 510 36,457
Krones AG............................ 70 25,383
Sap AG............................... 257 35,908
-----------
Total Germany...................... 108,229
UNITED STATES -- 0.09%
- ---------------------------------------
Uniao Sid Minas -- ADS............... 4,150 41,915
-----------
Total Preferred Stocks
(cost $878,721).................. 860,130
-----------
PRINCIPAL
AMOUNT
----------
BONDS -- 0.01%
- ---------------------------------------
CAPITAL GOODS -- 0.01%
Renong Berhad...................... $ 8,200 3,442
-----------
Total Bonds
(cost $3,288).................... 3,442
-----------
SHORT TERM INVESTMENTS -- 4.40%
- ---------------------------------------
MONEY MARKET FUNDS -- 4.40%
State Street Global Advisor Fund,
5.38%,(b) (cost $2,098,660)...... 2,098,660 2,098,660
-----------
TOTAL INVESTMENTS -- 100%
- ---------------------------------------
(cost $42,636,723)................. $47,770,591
===========
</TABLE>
- -------------------------
(a) Non-income producing.
(b) Dividend yields change daily to reflect current market conditions. Rate
stated is the quoted yield as of December 31, 1996.
See notes to the financial statements.
75
<PAGE> 130
T. ROWE PRICE/JNL MID-CAP GROWTH SERIES
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1996
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ ------
<S> <C> <C>
COMMON STOCKS -- 89.36%
- -----------------------------------------
SOUTH AFRICA -- 0.14%
- -----------------------------------------
MINING -- 0.14%
Rustenburg Platinum Holdings........... 5,029 $ 68,795
UNITED STATES -- 89.22%
- -----------------------------------------
AEROSPACE & AIRCRAFT -- 2.82%
BE Aerospace, Inc., (a)................ 18,500 501,813
OEA, Inc. ............................. 18,500 846,375
-----------
1,348,188
APPAREL -- 2.40%
Tommy Hilfiger Corp.(a)................ 4,500 216,000
Warnaco Group, Inc. ................... 31,500 933,188
-----------
1,149,188
BROADCAST & COMMUNICATIONS -- 3.62%
Aerial Communications, Inc., (a)....... 34,700 281,937
Catalina Marketing Corp.(a)............ 7,000 385,875
Comcast Corp. ......................... 30,000 534,375
Cox Communications -- Class A(a)....... 23,000 531,875
-----------
1,734,062
BUSINESS SERVICES -- 4.40%
ADVO, Inc. ............................ 10,000 140,000
CUC International, Inc................. 16,000 380,000
Gymboree Corp., (a).................... 23,000 526,125
Interim Services, Inc., (a)............ 20,100 713,550
National Data Corp. ................... 8,000 348,000
-----------
2,107,675
CHEMICALS -- 1.13%
Airgas, Inc. (a)....................... 5,900 129,800
Great Lakes Chemical Corp. ............ 7,000 327,250
Petrolite Corp. ....................... 1,800 86,400
-----------
543,450
COMPUTERS & SOFTWARE -- 8.84%
Adobe Systems, Inc. ................... 5,800 216,775
BDM International, Inc. ............... 7,000 379,750
BMC Software, Inc. (a)................. 11,000 455,125
Ceridian Corp. ........................ 6,000 243,000
Checkfree Corp., (a)................... 14,000 239,750
DST Systems, Inc., (a)................. 5,400 169,425
Fore Systems, Inc., (a)................ 7,000 230,125
Intuit, Inc. (a)....................... 9,000 283,500
Network General Group, (a)............. 12,000 363,000
Platinum Technology, Inc. (a).......... 21,000 286,125
Shiva Corp.(a)......................... 8,000 279,000
Sterling Communications, Inc. ......... 7,000 246,750
SunGuard Data Systems.................. 13,000 513,500
Synopsys, Inc.(a)...................... 7,000 323,750
-----------
4,229,575
CONSUMER PRODUCTS -- 1.93%
American Pad & Paper Co.(a)............ 31,000 701,375
Polymer Group, Inc., (a)............... 16,000 222,000
-----------
923,375
<CAPTION>
MARKET
SHARES VALUE
------ ------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
- -----------------------------------------------------------------
UNITED STATES (CONTINUED)
- -----------------------------------------
DRUGS -- 2.59%
Biogen, Inc. .......................... 14,000 $ 542,500
Cardinal Health, Inc. ................. 12,000 699,000
-----------
1,241,500
DURABLE GOODS -- 3.80%
Alco Standard Corp. ................... 19,000 980,875
Danaher Corp. ......................... 18,000 839,250
-----------
1,820,125
ELECTRONICS -- 5.72%
ADT, Ltd............................... 38,000 869,250
Analog Devices, Inc., (a).............. 12,000 406,500
Dentsply International, Inc. .......... 2,100 99,750
Maxim Integrated Products, Inc. (a).... 12,000 519,000
Teleflex, Inc. ........................ 9,500 495,187
Xilinx, Inc.(a)........................ 9,500 349,719
-----------
2,739,406
ENVIRONMENT -- 1.36%
Philip Environmental, Inc. (a)......... 45,000 652,500
FINANCE COMPANIES -- 5.61%
Corporate Express, Inc., (a)........... 28,000 824,250
Franklin Resources, Inc. .............. 8,000 547,000
Mercury Finance Co..................... 62,000 759,500
Money Store, Inc. ..................... 20,100 555,262
-----------
2,686,012
HEALTH PRODUCTS & CARE -- 7.16%
Apria Healthcare Group, Inc. (a)....... 21,500 403,125
General Nutrition Cos., Inc., (a)...... 41,000 691,875
Gilead Sciences, Inc., (a)............. 12,000 300,000
Pacificare Health Systems, Inc. --
Class B(a)........................... 6,000 511,500
Quorum Health Group, Inc. (a).......... 30,000 892,500
Sybron International Corp.(a).......... 19,000 627,000
-----------
3,426,000
HOTEL & MOTEL -- 2.52%
Hospitality Franchise Systems, Inc. ... 9,000 537,750
La Quinta Inns, Inc. .................. 35,000 669,375
-----------
1,207,125
INSURANCE -- 4.86%
Ace Limited............................ 16,000 962,000
Partner Re Limited..................... 19,000 646,000
PMI Group, Inc. ....................... 13,000 719,875
-----------
2,327,875
MERCHANDISING -- 1.34%
Tupperware Corp. ...................... 12,000 643,500
MINING -- 3.28%
Cambior, Inc. ......................... 30,000 438,750
Oxford Res Corp -- Class A, (a)........ 21,000 648,375
TVX Gold, Inc. (a)..................... 62,300 482,825
-----------
1,569,950
</TABLE>
See notes to the financial statements.
76
<PAGE> 131
T. ROWE PRICE/JNL MID-CAP GROWTH SERIES
SCHEDULE OF INVESTMENTS -- (CONTINUED)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
--------- -----------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
- -----------------------------------------------------------------
UNITED STATES (CONTINUED)
- -----------------------------------------
OIL & GAS -- 6.08%
Camco International, Inc............... 17,000 $ 784,125
Cooper Cameron Corp.................... 9,000 688,500
Smith International, Inc.(a)........... 18,000 807,750
Weatherford Enterra, Inc............... 21,000 630,000
-----------
2,910,375
RESTAURANTS -- 4.30%
Boston Chicken, Inc.(a)................ 17,000 609,875
JP Foodservice, Inc.(a)................ 30,000 836,250
Outback Steakhouse, Inc.(a)............ 23,000 615,250
-----------
2,061,375
RETAIL -- 7.21%
Circuit City Stores, Inc. ............. 19,000 572,375
Eckerd Corp., (a)...................... 3,555 113,760
Kohls Corp.(a)......................... 13,000 510,250
MSC Industrial Direct, Inc............. 12,000 444,000
Price/Costco, Inc.(a).................. 29,000 728,625
Revco DS, Inc.(a)...................... 18,400 680,800
Scholastic Corp., (a).................. 6,000 403,500
-----------
3,453,310
STEEL -- 1.55%
Trimas Corp.(a)........................ 31,000 740,125
TELECOMMUNICATIONS -- 3.04%
Palmer Wireless, Inc. Class A(a)....... 21,800 228,900
Telephone & Data Systems, Inc. ........ 6,900 250,125
360 Communications Co. ................ 20,900 483,312
US Cellular Corp.(a)................... 7,000 195,125
Vanguard Cellular Systems -- Class
A(a)................................. 19,000 299,250
-----------
1,456,712
TOBACCO -- 1.15%
Consolidated Cigar Holdings, Inc.(a)... 22,200 549,450
WASTE DISPOSAL -- 2.51%
Republic Industries, Inc., (a)......... 14,000 436,625
USA Waste Services, Inc.(a)............ 24,000 765,000
-----------
1,201,625
-----------
Total United States.................. 42,722,478
-----------
Total Common Stock
(cost $37,680,609)............... 42,791,273
-----------
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
--------- -----------
<S> <C> <C>
SHORT TERM INVESTMENTS -- 10.64%
- -----------------------------------------
U.S. TREASURY BILLS -- 9.75%
U.S. Treasury Bill
4.85%, 01/02/1997.................... $221,000 $ 220,970
5.00%, 01/09/1997.................... 488,000 487,458
4.98%, 01/23/1997.................... 133,000 132,595
5.01%, 01/30/1997.................... 375,000 373,486
4.84%, 02/06/1997.................... 331,000 329,398
5.015%, 02/06/1997................... 465,000 462,668
5.06%, 02/06/1997.................... 293,000 291,517
5.02%, 02/13/1997.................... 165,000 164,011
5.045%, 02/13/1997................... 185,000 183,885
4.82%, 03/06/1997.................... 240,000 237,922
4.835%, 03/06/1997................... 56,000 55,515
4.90%, 03/06/1997.................... 365,000 361,820
4.91%, 03/06/1997.................... 255,000 252,792
4.885%, 03/13/1997................... 327,000 323,850
4.86%, 03/20/1997.................... 448,000 443,381
5.02%, 05/01/1997.................... 351,000 345,152
-----------
4,666,420
U.S. GOVERNMENTAL AGENCIES -- 0.89%
Federal Home Loan Mortgage Notes
5.50%, 01/09/1997.................... 185,000 184,774
5.51%, 01/14/1997.................... 241,000 240,520
-----------
425,294
MONEY MARKET FUNDS -- 0.00%
State Street Global Advisor Fund,
5.38%,(b)............................ 633 633
-----------
Total Short Term Investments
(cost $5,092,232)................ 5,092,347
-----------
TOTAL INVESTMENTS -- 100%
- -----------------------------------------
(cost $42,772,841)..................... $47,883,620
===========
</TABLE>
- -------------------------
(a) Non-income producing.
(b) Dividend yields change daily to reflect current market conditions. Rate
stated is the quoted yield as of December 31, 1996.
See notes to the financial statements.
77
<PAGE> 132
JNL SERIES TRUST
PART C
OTHER INFORMATION
Note: Items 24-32 have been answered with respect to all sixteen investment
portfolios (Series) of the Registrant.
Item 24. Financial Statements and Exhibits.
(a) Financial Statements
(i) Financial statements included in Part A of the
Registration Statement: Financial Highlights
(ii) Financial statements included in Part B of the
Registration Statement:
Report of Independent Accountants
Statements of Assets and Liabilities at
December 31, 1996
Statements of Operations for Nine Months Ended
December 31, 1996
Statements of Changes in Net Assets for the
Periods May 15, 1995 through March 31, 1996 and
April 1, 1996 to December 31, 1996
Financial Highlights for the Periods May 15,
1995 through March 31, 1996 and April 1, 1996 to
December 31, 1996
Notes to Financial Statements
Schedules of Investments at December 31, 1996
(b) Exhibits
Exhibit
Number Description
- ------- -----------
1. Agreement and Declaration of Trust of Registrant dated June 1, 1994,
incorporated by reference to Registrant's Post-Effective Amendment No. 5 filed
with the Securities and Exchange Commission on June 28, 1996.
2. Amended and Restated By-laws of Registrant, incorporated by reference to
Registrant's Post-Effective Amendment No. 7 filed with the Securities and
Exchange Commission on September 13, 1996.
3. Not Applicable
<PAGE> 133
4. Not Applicable
5. (a) Amended Investment Advisory and Management Agreement between
Registrant and Jackson National Financial Services, Inc. dated August
17, 1995, incorporated by reference to Registrant's Post-Effective
Amendment No. 5 filed with the Securities and Exchange Commission on
June 28, 1996.
(b) Investment Sub-Advisory Agreement between Jackson National
Financial Services, Inc. and Fred Alger Management, Inc. dated
August 16, 1995, incorporated by reference to Registrant's
Post-Effective Amendment No. 5 filed with the Securities and
Exchange Commission on June 28, 1996.
(c) Investment Sub-Advisory Agreement between Jackson National
Financial Services, Inc. and Janus Capital Corporation dated
February 28, 1995, incorporated by reference to Registrant's
Post-Effective Amendment No. 5 filed with the Securities and
Exchange Commission on June 28, 1996.
(d) Investment Sub-Advisory Agreement between Jackson National
Financial Services, Inc. and PPM America, Inc. dated February 17,
1995, incorporated by reference to Registrant's Post-Effective
Amendment No. 5 filed with the Securities and Exchange Commission on
June 28, 1996.
(e) Investment Sub-Advisory Agreement between Jackson National
Financial Services, Inc. and Rowe Price-Fleming International, Inc.
dated February 20, 1995, incorporated by reference to Registrant's
Post-Effective Amendment No. 5 filed with the Securities and
Exchange Commission on June 28, 1996.
(f) Investment Sub-Advisory Agreement between Jackson National
Financial Services, Inc. and Salomon Brothers Asset Management Inc
dated February 8, 1995, incorporated by reference to Registrant's
Post-Effective Amendment No. 5 filed with the Securities and
Exchange Commission on June 28, 1996.
(g) Investment Sub-Advisory Agreement between Jackson National
Financial Services, Inc. and T. Rowe Price Associates, Inc. dated
February 20, 1995, incorporated by reference to Registrant's
Post-Effective Amendment No. 5 filed with the Securities and
Exchange Commission on June 28, 1996.
(h) Investment Sub-Advisory Agreement between Jackson National
Financial Services, Inc. and Salomon Brothers Asset Management
Limited, incorporated by reference to Registrant's Post-Effective
Amendment No. 5 filed with the Securities and Exchange Commission on
June 28, 1996.
(i) Amendment dated August 7, 1996 to Amended Investment Advisory
and Management Agreement between Registrant and Jackson National
<PAGE> 134
Financial Services, Inc. dated August 17, 1995, incorporated by
reference to Registrant's Post-Effective Amendment No. 7 filed with
the Securities and Exchange Commission on September 13, 1996.
(j) Investment Sub-Advisory Agreement between Jackson National
Financial Services, Inc. and Eagle Asset Management, Inc. dated
August 9, 1996, incorporated by reference to Registrant's
Post-Effective Amendment No. 7 filed with the Securities and
Exchange Commission on September 13, 1996.
(k) Amendment dated August 21, 1996 to Investment Sub-Advisory
Agreement between Jackson National Financial Services, Inc. and
Janus Capital Corporation dated February 28, 1995, incorporated by
reference to Registrant's Post-Effective Amendment No. 7 filed with
the Securities and Exchange Commission on September 13, 1996.
(l) Form of Amendment to Amended Investment Advisory and
Management Agreement between JNL Series Trust and Jackson National
Financial Services, Inc., attached hereto.
(m) Form of Amendment to Investment Sub-Advisory Agreement
between Jackson National Financial Services, Inc. and PPM America,
Inc., attached hereto.
(n) Form of Sub-Advisory Agreement between Jackson National
Financial Services, Inc. and Putnam Investment Management, Inc.,
attached hereto.
6. (a) Amended Fund Participation Agreement between Registrant and Jackson
National Life Insurance Company dated September 19, 1995,
incorporated by reference to Registrant's Post-Effective Amendment
No. 5 filed with the Securities and Exchange Commission on June 28,
1996.
(b) Amendment dated August 7, 1996 to Amended Fund Participation
Agreement between JNL Series Trust, Jackson National Life Insurance
Company and Jackson National Separate Account I dated September 19,
1995, incorporated by reference to Registrant's Post-Effective
Amendment No. 7 filed with the Securities and Exchange Commission on
September 13, 1996.
(c) Amendment to Amended Fund Participation Agreement between JNL
Series Trust, Jackson National Life Insurance Company and Jackson
National Separate Account I dated September 19, 1995, attached
hereto.
7. Not Applicable
8. Custodian Contract between Registrant and State Street Bank and Trust
Company dated September 16, 1996, attached hereto.
<PAGE> 135
9. Transfer Agency and Service Agreement between Registrant State Street Bank
and Trust Company dated September 16, 1996, attached hereto.
10. Opinion of Blazzard, Grodd & Hasenauer, PC, attached hereto.
11. Consent of Price Waterhouse LLP, attached hereto.
12. Not Applicable
13. Not Applicable
14. Not Applicable
15. Not Applicable
16. Computation of Performance Quotations, incorporated by reference to
Registrant's Post-Effective Amendment No. 5 filed with the Securities and
Exchange Commission on June 28, 1996.
17. Financial Data Schedule, attached hereto.
18. Not Applicable
Item 25. Persons controlled by or under Common Control with Registrant.
As of April 7, 1997, Jackson National Life Insurance Company, a
Michigan corporation, through its initial investment of capital
into each Series, owns 5.2% of the outstanding shares of the Trust.
Item 26. Number of Holders of Securities.
NUMBER OF
HOLDERS AS OF
SERIES APRIL 7, 1997
------- -------------
JNL Aggressive Growth Series 3
JNL Capital Growth Series 3
JNL Global Equities Series 3
JNL/Alger Growth Series 3
JNL/Eagle Core Equity Series 2
JNL/Eagle Small Cap Series 2
JNL/Phoenix Investment Counsel Balanced Series 2
JNL/Phoenix Investment Counsel Growth Series 2
PPM America/JNL High Yield Bond Series 3
PPM America/JNL Money Market Series 3
PPM America/JNL Value Equity Series 2
Salomon Brothers/JNL Global Bond Series 3
Salomon Brothers/JNL U.S. Government & Quality Bond Series 3
T. Rowe Price/JNL Established Growth Series 3
T. Rowe Price/JNL International Equity Investment Series 3
T. Rowe Price/JNL Mid-Cap Growth Series 3
Item 27. Indemnification.
<PAGE> 136
Article VIII of the Registrant's Agreement and Declaration of Trust
provides that each of its Trustees and Officers (including persons
who serve at the Registrant's request as directors, officers or
trustees of another organization in which the Registrant has any
interest as a shareholder, creditor or otherwise) (each, a "Covered
Person") shall be indemnified by the Registrant against all
liabilities and expenses that may be incurred by reason of being or
having been such a Covered Person, except that no Covered Person
shall be indemnified against any liability to the Registrant or its
shareholders to which such Covered Person would otherwise be
subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the
conduct of such Covered Person's office.
The foregoing indemnification arrangements are subject to the
provisions of Section 17(h) of the Investment Company Act of 1940.
Insofar as indemnification by the Registrant for liabilities
arising under the Securities Act of 1933 may be permitted to
directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is
asserted against the Registrant by such director, officer or
controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
In addition to the above indemnification, Jackson National Life
Insurance Company extends its indemnification of its own officers,
directors and employees to cover such persons' activities as
officers, trustees or employees of the Registrant, and by separate
agreement Jackson National Life Insurance Company has agreed to
indemnify trustees of the Registrant who are not interested persons
of the Registrant or its investment adviser.
Item 28. Business and Other Connections of Investment Adviser.
Incorporated herein by reference from the Prospectus and Statement
of Additional Information relating to the Trust are the following:
the description of the business of Jackson National Financial
Services, Inc. ("JNFSI") contained in the sections entitled
"Management of the Trust" and "Investment Adviser and Other
<PAGE> 137
Services" and the biographical information pertaining to Messrs.
Jordan, Hopping, Knutson, Meyer and Fritts, contained in the
section entitled "Trustees and Officers of the Trust" of the
Statement of Additional Information.
Eagle Asset Management, Inc., Fred Alger Management, Inc., Janus
Capital Corporation, Phoenix Investment Counsel, PPM America, Inc.,
Putnam Investment Management, Inc., Salomon Brothers Asset
Management Inc., Salomon Brothers Asset Management Limited, T. Rowe
Price Associates, Inc., and Rowe Price-Fleming International, Inc.,
the sub-advisers of certain series of the Trust, are primarily
engaged in the business of rendering investment advisory services.
Reference is made to the most recent Form ADV and schedules thereto
on file with the Commission for a description of the names and
employment of the directors and officers of the sub-advisers and
other required information:
File No.
---------
Eagle Asset Management, Inc. 801-21343
Fred Alger Management, Inc. 801-06709
Janus Capital Corporation 801-13991
Phoenix Investment Counsel, Inc. 801-5995
PPM America, Inc. 801-40783
Putnam Investment Management, Inc. 801-7974
Salomon Brothers Asset Management Inc. 801-32046
T. Rowe Price Associates, Inc. 801-856
Rowe Price-Fleming International, Inc. 801-14713
Salomon Brothers Asset Management Limited 801-43335
Item 29. Principal Underwriters.
Not Applicable.
Item 30. Location of Accounts and Records
Accounts, books and other documents required to be maintained
pursuant to Rule 31a-1(b)(4), (5), (6), (7), (9), (10), and (11)
are in the physical possession of the Registrant at 5901 Executive
Drive, Lansing, Michigan 48911; all other books, accounts and
other documents required to be maintained under Section 31(a) of
the Investment Company Act of 1940 and the Rules promulgated
thereunder are in the physical possession of State Street Bank and
Trust Company, 1776 Heritage Drive, North Quincy, Massachusetts
02171.
Item 31. Management Services.
Not Applicable.
Item 32. Undertakings.
(a) Not Applicable
<PAGE> 138
(b) Not Applicable
(c) Registrant hereby undertakes to furnish each
person to whom a prospectus is delivered with a copy of the
Registrant's latest annual report to shareholders upon request
and without charge.
<PAGE> 139
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940 the Registrant certifies that it meets all of the
requirements for effectiveness of this Post-Effective Amendment pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this Post-Effective
Amendment to be signed on its behalf by the undersigned, thereto duly
authorized, in the City of Lansing and the State of Michigan on the 14th day of
April, 1997.
JNL SERIES TRUST
By: /s/ John A. Knutson
by Thomas J. Meyer
John A. Knutson
President, CEO and
Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment has been signed below by the following persons in the
capacities and on the date indicated.
/s/ John A. Knutson President, CEO and April 14, 1997
by Thomas J. Meyer Chairman of the Board
John A. Knutson
/s/ Andrew B. Hopping Vice President, April 14, 1997
by Thomas J. Meyer Treasurer, CFO
Andrew B. Hopping and Trustee
/s/ Joseph Frauenheim Trustee April 14, 1997
by Thomas J. Meyer
Joseph Frauenheim
Trustee
----------------------- ----------------
Richard McLellan
/s/ Peter McPherson Trustee April 14, 1997
by Thomas J. Meyer
Peter McPherson
<PAGE> 140
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned as directors of
JNL SERIES TRUST, a Massachusetts business trust, which has filed or will file
with the Securities and Exchange Commission under the provisions of the
Securities Act of 1933 and Investment Company Act of 1940, as amended, various
Registration Statements and amendments thereto for the registration under said
Acts of the sale of shares of beneficial interest of JNL Series Trust, hereby
constitute and appoint John A. Knutson, Thomas J. Meyer and Robert P. Saltzman,
his attorney, with full power of substitution and resubstitution, for and in
his name, place and stead, in any and all capacities to approve and sign such
Registration Statements and any and all amendments thereto and to file the
same, with all exhibits thereto and other documents, granting unto said
attorneys, each of them, full power and authority to do and perform all and
every act and thing requisite to all intents and purposes as he might or could
do in person, hereby ratifying and confirming that which said attorneys, or any
of them, may lawfully do or cause to be done by virtue hereof. This instrument
may be executed in one or more counterparts.
IN WITNESS WHEREOF, the undersigned have herewith set their names as of the
dates set forth below.
/s/ John A. Knutson February 20, 1997
- ---------------------- -----------------
John A. Knutson Date
/s/ Andrew B. Hopping February 20, 1997
- ---------------------- -----------------
Andrew B. Hopping Date
/s/ Joseph Frauenheim February 20, 1997
- ---------------------- -----------------
Joseph Frauenheim Date
February 20, 1997
- ---------------------- -----------------
Richard McLellan Date
/s/ Peter McPherson February 20, 1997
- ---------------------- -----------------
Peter McPherson Date
<PAGE> 141
EXHIBIT LIST
Exhibit
Number Description
- ------- -----------
5.(l) Form of Amendment to Amended Investment Advisory and Management Agreement
between JNL Series Trust and Jackson National Financial Services, Inc.,
attached hereto as EX-99.B5-497aaim
5.(m) Form of Amendment to Investment Sub-Advisory Agreement between Jackson
National Financial Services, Inc. and PPM America, Inc., attached hereto as
EX-99.B5-ppmasaa
5.(n) Form of Sub-Advisory Agreement between Jackson National Financial
Services, Inc. and Putnam Investment Management, Inc., attached hereto as
EX-99.B5-putnam
6.(c) Amendment to Amended Fund Participation Agreement between JNL Series
Trust, Jackson National Life Insurance Company and Jackson National Separate
Account I dated September 19, 1995, attached hereto as EX-99.B6-497aafp
8. Custodian Contract between Registrant and State Street Bank and Trust
Company dated September 16, 1996, attached hereto as EX-99.B8-custody
9. Transfer Agency and Service Agreement between Registrant and State Street
Bank and Trust Company dated September 16, 1996, attached hereto as EX-99.B9-ta
10. Opinion of Blazzard, Grodd & Hasenauer, PC, attached hereto as
EX-99.B10-bgh
11. Consent of Price Waterhouse LLP, attached hereto as EX-99.B11-pw
17. Financial Data Schedule, attached hereto as EX-27
<PAGE> 1
EX-99.B5-497aaim
AMENDMENT
TO
AMENDED INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
BETWEEN
JNL SERIES TRUST
AND
JACKSON NATIONAL FINANCIAL SERVICES, INC.
This AMENDMENT is by and between JNL Series Trust, a Massachusetts
business trust (the "Trust") and Jackson National Financial Services, Inc., a
Delaware corporation (the "Adviser").
WHEREAS, the Trust and the Adviser entered into an Amended Investment
Advisory and Management Agreement dated August 17, 1995 (the "Agreement"),
whereby the Trust retained the Adviser to perform investment advisory and
management services for the Series of the Trust enumerated in the Agreement;
and
WHEREAS, the names of three existing Series of the Trust will be changed
effective May 1, 1997, and the Trust desires the Adviser to continue performing
investment advisory and management services for these Series of the Trust; and
WHEREAS, the Adviser agrees to continue serving as the investment adviser
and business manager for the above-referenced Series of the Trust on the terms
and conditions set forth in the Agreement.
NOW THEREFORE, in consideration of the mutual covenants contained herein
and for other good and valuable consideration, the Trust and the Adviser agree
as follows:
1. Effective May 1, 1997, the Adviser shall continue serving as the
investment adviser and business manager for the JNL/Phoenix Investment Counsel
Balanced Series, JNL/Phoenix Investment Counsel Growth Series and PPM
America/JNL Value Equity Series at which date the names of these Series shall
be changed to the PPM America/JNL Balanced Series, JNL/Putnam Growth Series and
JNL/Putnam Value Equity Series, respectively.
2. As compensation for services performed and the facilities and
personnel provided by the Adviser under the Agreement, the Trust will pay to
the Adviser, promptly after the end of each month for the services rendered by
the Adviser during the preceding month, the sum of the following amounts:
1
<PAGE> 2
<TABLE>
<CAPTION>
$0 to $50 to $150 to $300 to Over
(*M - Million) $50 M $150 M $300 M $500 M $500 M
----- ------ ------- ------- ------
<S> <C> <C> <C> <C> <C>
JNL/Putnam Growth Series .90% .90% .85% .80% .80%
JNL/Putnam Value Equity Series .90% .90% .85% .80% .80%
PPM America/JNL Balanced
Series .75% .70% .675% .65% .625%
</TABLE>
3. The Trust and the Adviser agree to abide and be bound by all of the
terms and conditions set forth in the Agreement.
IN WITNESS WHEREOF, the Trust and the Adviser have caused this Agreement
to be executed by their duly authorized officers as of the day of
, 1997.
JNL SERIES TRUST
By:
-----------------------------------------
Name: John A. Knutson
--------------------------------------
Title: President
--------------------------------------
JACKSON NATIONAL FINANCIAL
SERVICES, INC.
By:
-----------------------------------------
Name: Larry C. Jordan
--------------------------------------
Title: Chief Operating Officer and Treasurer
--------------------------------------
2
<PAGE> 1
EX-99.B5-ppmasaa
AMENDMENT
TO
INVESTMENT SUB-ADVISORY AGREEMENT
BETWEEN
JACKSON NATIONAL FINANCIAL SERVICES, INC.
AND
PPM AMERICA, INC.
AMENDMENT effective as of May 1, 1997, by and between JACKSON NATIONAL
FINANCIAL SERVICES, INC., a Delaware corporation and registered investment
adviser ("Adviser"), and PPM AMERICA, INC., a Delaware corporation and
registered investment adviser ("Sub-Adviser").
WHEREAS, Adviser and Sub-Adviser entered into an Investment Sub-Advisory
Agreement executed as of February 17, 1995 ("Agreement"), whereby Adviser
appointed Sub-Adviser to provide certain sub-investment advisory services to
the investment portfolios of the JNL Series Trust; and
WHEREAS, the Agreement provides that the Adviser will pay the Sub-Adviser
for the services provided and the expenses assumed pursuant to the Agreement a
sub-advisory fee as set forth on Schedule B to the Agreement and the
Sub-Adviser agrees to accept such sub-advisory fee as full compensation for
such services and expenses; and
WHEREAS, effective May 1, 1997, the Adviser desires to appoint Sub-Adviser
to provide and Sub-Adviser agrees to provide sub-investment advisory services
to an additional investment portfolio of the JNL Series Trust and to terminate
the Sub-Adviser's services with respect to an existing investment portfolio of
the JNL Series Trust.
NOW THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereby agree to amend the Agreement as follows:
1. Schedule A to the Agreement shall be amended and replaced with
Schedule A dated May 1, 1997, attached hereto.
2. Schedule B to the Agreement shall be amended and replaced with
Schedule B dated May 1, 1997, attached hereto.
<PAGE> 2
IN WITNESS WHEREOF, the Adviser and the Sub-Adviser have caused this
Amendment to be executed as of this day of , 1997.
JACKSON NATIONAL FINANCIAL PPM AMERICA, INC.
SERVICES, INC.
By: By:
--------------------------- -------------------------
Name: John A. Knutson Name:
------------------------ -----------------------
Title: President Title:
----------------------- ----------------------
<PAGE> 3
SCHEDULE A
DATED MAY 1, 1997
TO
INVESTMENT SUB-ADVISORY AGREEMENT
BETWEEN
JACKSON NATIONAL FINANCIAL SERVICES, INC.
AND
PPM AMERICA, INC.
PPM America/JNL Balanced Series
PPM America/JNL High Yield Bond Series
PPM America/JNL Money Market Series
<PAGE> 4
SCHEDULE B
DATED MAY 1, 1997
TO
INVESTMENT SUB-ADVISORY AGREEMENT
BETWEEN
JACKSON NATIONAL FINANCIAL SERVICES, INC.
AND
PPM AMERICA, INC.
PPM America/JNL Balanced Series
<TABLE>
<CAPTION>
Average Daily Net Assets Annual Rate
---------------------------- -------------
<S> <C>
$0 to $50 Million .25%
$50 Million to $150 Million .20%
$150 Million to $300 Million .175%
$300 Million to $500 Million .15%
Amounts over $500 Million .125%
</TABLE>
PPM America/JNL High Yield Bond Series
<TABLE>
<CAPTION>
Average Daily Net Assets Annual Rate
---------------------------- -------------
<S> <C>
$0 to $50 Million .25%
$50 Million to $150 Million .20%
$150 Million to $300 Million .175%
$300 Million to $500 Million .15%
Amounts over $500 Million .125%
</TABLE>
PPM America/JNL Money Market Series
<TABLE>
<CAPTION>
Average Daily Net Assets Annual Rate
---------------------------- -------------
<S> <C>
$0 to $50 Million .20%
$50 Million to $150 Million .15%
$150 Million to $300 Million .125%
$300 Million to $500 Million .10%
Amounts over $500 Million .075%
</TABLE>
<PAGE> 1
EX-99.B5-putnam
SUB-ADVISORY AGREEMENT
JNL SERIES TRUST
[DATE]
Jackson National Financial Services, Inc. (the "Adviser") confirms its
agreement with Putnam Investment Management, Inc. (the "Sub-Adviser") with
respect to the JNL/Putnam Growth Series and JNL/Putnam Value Equity Series
(each a "Portfolio") of the JNL Series Trust (the "Fund") as follows:
1. INVESTMENT DESCRIPTION; APPOINTMENT
The Fund employs the Adviser as the manager of the Portfolios pursuant to
an Amended Investment Advisory and Management Agreement dated August 17, 1995,
as amended (the "Management Agreement"), and the Fund and the Adviser desire to
employ and hereby appoint the Sub-Adviser to act as the sub-investment adviser
to the Portfolios. The investment objective(s), policies and limitations
governing each Portfolio are specified in the prospectus (the "Prospectus") and
the statement of additional information (the "Statement") of the Fund filed
with the Securities and Exchange Commission as part of the Fund's Registration
Statement on Form N-1A, as amended or supplemented from time to time, and in
the manner and to the extent as may from time to time be approved by the Board
of Trustees of the Fund (the "Board"). Copies of the Prospectus and the
Statement have been or will be submitted to the Sub-Adviser. The Adviser
agrees promptly to provide copies of all amendments and supplements to the
current Prospectus and the Statement to the Sub-Adviser on an on-going basis.
Until the Adviser delivers any such amendment or supplement to the
Sub-Adviser, the Sub-Adviser shall be fully protected in relying on the
Prospectus and Statement of Additional Information as previously furnished to
the Sub-Adviser. The Sub-Adviser accepts the appointment and agrees to furnish
the services for the compensation, as set forth below.
2. SERVICES AS SUB-ADVISER
(a) Subject to the supervision, direction and approval of the Board and
the Adviser, the Sub-Adviser shall conduct a continual program of investment,
evaluation and, if appropriate in the view of the Sub-Adviser, sale and
reinvestment of each Portfolio's assets. The Sub-Adviser is authorized, in its
sole discretion and without prior consultation with the Adviser, to: (i)
manage each Portfolio's assets in accordance with the Portfolio's investment
objective(s) and policies as stated in the Prospectus and the Statement; (ii)
make investment decisions for each Portfolio; (iii) place purchase and sale
orders for portfolio transactions on behalf of each Portfolio; and (iv) employ
professional portfolio managers and securities analysts who provide research
services to each Portfolio. The Sub-Adviser shall not be responsible for the
administrative affairs of the Fund, including, but not limited to, accounting
for and pricing of the Portfolios. The Sub-Adviser will use its best efforts
to manage each Portfolio so that it complies with the provisions of Section
817(h) of the Internal Revenue Code of 1986, as amended, as
<PAGE> 2
applicable to the Fund. The Adviser acknowledges and agrees that the
Sub-Adviser's compliance with its obligations in the immediately preceding
sentence will be based on information supplied by the Adviser including, but
not limited to, portfolio lot allocation information. The Adviser agrees to
supply all such information on a timely basis.
In addition, the Sub-Adviser shall furnish the Adviser daily information
concerning portfolio transactions and monthly, quarterly and annual reports
concerning transactions and performance of each Portfolio in such form as may
be mutually agreed upon, and the Sub-Adviser agrees to review each Portfolio
and discuss the management of it from time to time with the Adviser and the
Board.
(b) Unless the Adviser gives the Sub-Adviser written instructions to the
contrary, the Sub-Adviser shall use its good faith judgment in a manner which
it reasonably believes best serves the interests of the Portfolio shareholders
to vote or abstain from voting all proxies solicited by or with respect to the
issuers of securities in which assets of a Portfolio may be invested.
(c) The Sub-Adviser shall maintain and preserve such records related to
each Portfolio's transactions as are required of a Sub-Adviser under the
Investment Advisers Act of 1940, as amended. The Sub-Adviser shall timely
furnish to the Adviser all information relating to the Sub-Adviser's services
hereunder reasonably requested by the Adviser to keep and preserve the books
and records of each Portfolio. The Sub-Adviser will promptly supply to the
Adviser copies of any of such records upon request.
3. BROKERAGE
In selecting brokers or dealers to execute transactions on behalf of a
Portfolio, the Sub-Adviser will seek the best overall terms available. In
assessing the best overall terms available for any transaction, the Sub-Adviser
will consider factors it deems relevant, including, but not limited to, the
breadth of the market in the security, the price of the security, the financial
condition and execution capability of the broker or dealer and the
reasonableness of the commission, if any, for the specific transaction and on a
continuing basis. In selecting brokers or dealers to execute a particular
transaction, and in evaluating the best overall terms available, the
Sub-Adviser is authorized to consider the brokerage and research services (as
those terms are defined in Section 28(e) of the Securities Exchange Act of
1934, as amended) provided to a Portfolio and/or other accounts over which the
Sub-Adviser or its affiliates exercise investment discretion. Nothing in this
paragraph shall be deemed to prohibit the Sub-Adviser from paying an amount of
commission for effecting a securities transaction in excess of the amount of
commission another member of an exchange, broker, or dealer would have charged
for effecting that transaction, if the Sub-Adviser determined in good faith
that such amount of commission was reasonable in relation to the value of the
brokerage and research services provided by such member, broker, or dealer,
viewed in terms of either that particular transaction or its overall
responsibilities with respect to the relevant Portfolio and/or other accounts
over which the Sub-Adviser or its affiliates exercise investment discretion.
4. COMPENSATION
2
<PAGE> 3
In consideration of the services rendered pursuant to this Agreement, the
Adviser will pay the Sub-Adviser an annual fee calculated at the rates set
forth in Exhibit A hereto of each Portfolio's average daily net assets; the fee
is calculated daily and paid monthly. The fee for the period from the
Effective Date (defined below) of the Agreement for a Portfolio to the end of
the month during which the Effective Date occurs shall be prorated according to
the proportion that such period bears to the full monthly period. Upon any
termination of this Agreement with respect to a Portfolio before the end of a
month, the fee for such part of that month for that Portfolio shall be prorated
according to the proportion that such period bears to the full monthly period
and shall be payable upon the date of termination of this Agreement. For the
purpose of determining fees payable to the Sub-Adviser, the value of a
Portfolio's net assets shall be computed at the times and in the manner
specified in the Prospectus and/or the Statement.
5. EXPENSES
The Sub-Adviser shall bear all expenses (excluding brokerage costs,
custodian fees, auditors fees or other expenses to be borne by the Portfolios)
in connection with the performance of its services under this Agreement. The
Fund will bear certain other expenses to be incurred in its operation,
including, but not limited to, investment advisory fees, sub-advisory fees
(other than sub-advisory fees paid pursuant to this Agreement) and
administration fees, fees for necessary professional and brokerage services,
costs relating to local administration of securities, fees for any pricing
service, the costs of regulatory compliance, and costs associated with
maintaining the Fund's legal existence and shareholder relations. The
Sub-Adviser shall only bear the expenses it has expressly agreed to assume
under this Agreement.
6. STANDARD OF CARE AND INDEMNIFICATION
In the performance of its duties, the Sub-Adviser will comply with the
stated investment objectives, policies and restrictions of the Portfolios as
set forth in the Prospectus and Statement and will in all material in
accordance with any applicable regulations of any governmental authority
pertaining to its activities hereunder.
The Sub-Adviser shall exercise its best judgment and shall act in good
faith in rendering the services listed in paragraphs 2 and 3 above. The
Sub-Adviser shall not be liable for any error of judgment or mistake of law or
for any loss suffered by the Portfolio or the Adviser in connection with the
matters to which this Agreement relates, provided that nothing in this
Agreement shall be deemed to protect or purport to protect the Sub-Adviser
against any liability to the Adviser, the Fund or to the shareholders of the
Portfolio to which the Sub-Adviser would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or by reason of the Sub-Adviser's reckless disregard
of its obligations and duties under this Agreement ("Disabling Conduct").
Except for Disabling Conduct, the Adviser shall indemnify and hold the
Sub-Adviser (and its officers, directors, employees, controlling persons,
shareholders and affiliates) harmless from any liability arising from the
Sub-Adviser's conduct under this Agreement.
Notwithstanding the foregoing, the Sub-Adviser shall indemnify and hold
the Adviser against any and all losses, claims, damages, liabilities, or
litigation (including legal and other expenses) to which an Adviser Indemnified
Person may become subject under the 1933 Act,
3
<PAGE> 4
1940 Act, the Advisers Act, the Internal Revenue Code, under any other statute,
at common law or otherwise, arising out of the Sub-Adviser's responsibilities
as Sub-Adviser to the Fund which (1) result from the Disabling Conduct by the
Sub-Adviser, any of its employees or representatives, or any affiliate of the
Sub-Adviser, (2) result from a failure to comply with Section 2 of this
Agreement, or (3) result from any untrue statement of a material fact contained
in the Prospectus or Statement covering the shares of the Fund or a Portfolio,
or any amendment or supplement thereto, or the omission to state therein a
material fact known to the Sub-Adviser and was required to be stated therein or
necessary to make the statements therein not misleading, if such a statement or
omission was made in reliance upon information furnished to the Adviser, the
Fund, or any affiliated person of the Adviser or Fund by the Sub-Adviser or any
affiliated person of the Sub-Adviser for use in the Prospectus or Statement;
provided, however, that in no case shall the indemnify in favor of an Adviser
Indemnified Person be deemed to protect such person against any liability to
which any such person would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence in the performance of its duties, or
by reason of its reckless disregard of its obligations and duties under this
Agreement.
Sub-Adviser will treat confidentially and as proprietary information of
Fund all records and other information relative to the Fund maintained by the
Sub-Adviser, and will not use such records and information for any purpose
other than performance of its responsibilities and duties hereunder, except (1)
after prior notification to and approval in writing by the Fund, which approval
shall not be unreasonably withheld, (2) where required by law or required by a
regulatory authority, or (3) for use in a performance composite where the Fund
is not named.
7. TERM OF AGREEMENT
This Agreement shall become effective on May 1, 1997 (the "Effective
Date") and shall continue for an initial two-year term and shall continue
thereafter so long as such continuance is specifically approved at least
annually as required by the Investment Company Act of 1940 (the "1940 Act").
This Agreement is terminable, with respect to a Portfolio without penalty, on
60 days' written notice, by the Adviser, the Board or by vote of holders of a
majority (as defined in the 1940 Act and the rules hereunder) of the
outstanding voting securities of such Portfolio, or upon 60 days' written
notice, by the Sub-Adviser. This Agreement will also terminate automatically
in the event of its assignment (as defined in the 1940 Act and the rules
thereunder).
8. SERVICES TO OTHER COMPANIES OR ACCOUNTS
The Adviser understands that the Sub-Adviser now acts, will continue to
act and may act in the future as investment manager or adviser to fiduciary and
other managed accounts, and as investment manager or adviser to other
investment companies, including any offshore entitled, or accounts, and the
Adviser has no objection to the Sub-Adviser's so acting, provided that whenever
a Portfolio and one or more other investment companies or accounts managed or
advised by the Sub-Adviser have available funds for investment, investments
suitable and appropriate for each will be allocated in accordance with a
formula believed to equitable to each company and account. The Adviser
recognizes that in some cases this procedure may adversely affect the size of
the position obtainable for a Portfolio. In addition, the Adviser understands
that the persons employed by the Sub-Adviser to assist in the performance of
the Sub-Adviser's duties under this Agreement will not devote their full time
to such service and nothing contained
4
<PAGE> 5
in this Agreement shall be deemed to limit or restrict the right of the
Sub-Adviser or any affiliate of the Sub-Adviser to engage in and devote time
and attention to other businesses or to render services of whatever kind or
nature.
9. REPRESENTATIONS
Each of the parties hereto represents that the Agreement has been duly
authorized, executed and delivered by all required corporate action and that
this Agreement does not violate any existing agreements or relationships
between such party and any other party.
The Adviser represents that, to the best of its knowledge, the
post-effective amendment to the Registration Statement for the Fund filed with
the Securities and Exchange Commission contains, as of the date hereof, no
untrue material fact and does not omit any statement of a material fact which
was required to be stated therein or necessary to make the statements contained
therein not misleading.
The Sub-Adviser represents that it has reviewed the post-effective
amendment to the Registration Statement for the Fund filed with the Securities
and Exchange Commission that contains disclosure about the Sub-Adviser, and
represents and warrants that, with respect to the disclosure about the
Sub-Adviser, such Registration Statement contains, as of the date hereof, no
untrue statement of any material fact and does not omit any statement of a
material fact which was required to be stated therein or necessary to make the
statements contained therein not misleading. The Sub-Adviser further
represents and warrants that it is a duly registered investment adviser under
the Advisers Act and a duly registered investment adviser in all states in
which the Sub-Adviser is required to be registered.
10. USE OF NAME
(a) The Adviser may use (and shall cause any of its affiliates including
the Fund to use) the name "Putnam Investment Management, Inc.", "Putnam
Investment Management", "Putnam Management" or "Putnam" only for so long as
this Agreement or any extension, renewal, or amendment hereof remains in
effect. At such times as this agreement shall no longer be in effect, the
Adviser shall cease (and shall cause its affiliates to cease using) to use
such a name or any other name indicating that it is advised by or otherwise
connected with the Sub-Adviser and shall promptly change its name accordingly.
The Adviser acknowledges that the Fund has included the term "Putnam" in the
names of the Portfolios through permission of the Sub-Adviser, and agrees that
the Sub-Adviser reserves to itself and any successor to its business the right
to grant the non-exclusive right to use the aforementioned names or any similar
names to any other corporation or entity, including but not limited to any
investment company of which the Sub-Adviser or any subsidiary or affiliate
thereof or any successor to the business of any thereof shall be the investment
adviser.
(b) The Adviser will not, and will cause its affiliates to not, refer to
the Sub-Adviser or any affiliate in any prospectus, proxy statement or sales
literature except with the written permission of the Sub-Adviser.
5
<PAGE> 6
(c) The Adviser will permit the Portfolio to be used as a funding vehicle
only for Policies issued by Jackson National Life Insurance Company or any of
its affiliates.
(d) The Adviser will not (and will cause its affiliates to not) engage in
marketing programs (written or otherwise) directed toward the Putnam Capital
Managers contract ("PCM") which explicitly solicit transfers from PCM to the
Adviser's products or those of its affiliates. The Adviser will not (and will
cause its affiliates to not) create or use marketing materials which provide
direct comparisons between PCM and the Adviser's products or those of any of
its affiliates. The Adviser will not (and will cause its affiliates to not)
reimburse voluntarily, or enter into any contract or policy after the date
hereof providing for the reimbursement of any deferred sales charges to
encourage the transfer of assets from PCM to the Adviser's products or those of
any affiliate. For the purposes of this Section 10(d), the term affiliate
shall not include independent agents who are not employees of the Adviser or
its corporate affiliates.
11. MISCELLANEOUS
The name "JNL Series Trust" and "Trustees of JNL Series Trust" refer
respectively to the Trust created by, and the Trustees, as trustees but not
individually or personally, acting from time to time under, the Declaration of
Trust, to which reference is hereby made and a copy of which is on file at the
office of the Secretary of State of the Commonwealth of Massachusetts and
elsewhere as required by law, and to any and all amendments thereto so filed or
hereafter filed. The obligations of the "JNL Series Trust" entered in the name
or on behalf thereof by any of the Trustees, representatives or agents are made
not individually but only in such capacities and are not binding upon any of
the Trustees, Shareholders or representatives of Trust personally, but bind
only the assets of Trust, and persons dealing with the Fund must look solely to
the assets of Trust belonging to such Fund for the enforcement of any claims
against the Trust.
In the event the Fund designates one or more series other than the
Portfolio with respect to which the Fund and the Adviser wish to retain the
Sub-Adviser to render investment advisory services hereunder, they shall notify
the Sub-Adviser in writing. If the Sub-Adviser is willing to render such
services, it shall notify the Trust and the Adviser in writing, whereupon such
series shall become a Portfolio hereunder, and be subject to this Agreement.
If the foregoing is in accordance with your understanding, kindly indicate
your acceptance of this Agreement by signing and returning the enclosed copy of
this Agreement.
Very truly yours,
JACKSON NATIONAL FINANCIAL SERVICES, INC.
By: ____________________________________
Accepted:
6
<PAGE> 7
PUTNAM INVESTMENT MANAGEMENT, INC.
By:_______________________________
7
<PAGE> 8
EXHIBIT A
SUB-ADVISORY FEES
<TABLE>
<CAPTION>
Portfolio Annual Rate
------------------------------ -----------
<S> <C> <C>
JNL/Putnam Growth Series 1st $150m 0.50%
next $150m 0.45%
over $300m 0.35%
JNL/Putnam Value Equity Series 1st $150m 0.50%
next $150m 0.45%
over $300m 0.35%
</TABLE>
8
<PAGE> 1
EX-99.B6-497aafp
AMENDMENT TO
AMENDED FUND PARTICIPATION AGREEMENT
BETWEEN
JNL SERIES TRUST,
JACKSON NATIONAL LIFE INSURANCE COMPANY AND
JACKSON NATIONAL SEPARATE ACCOUNT I
This AMENDMENT, effective the 1st day of May, 1997, is by and between JNL
Series Trust (the "Trust"), Jackson National Life Insurance Company (the
"Company") and Jackson National Separate Account I (the "Separate Account").
WHEREAS, the Trust, the Company and the Separate Account entered into an
Amended Fund Participation Agreement dated September 19, 1995 (the
"Agreement"), whereby the Trust agreed to make its shares available to serve as
underlying investment media for the various portfolios of the Separate Account
of the Company; and
WHEREAS, the Trust has changed the names of three existing Series and
desires to make such Series available to serve as underlying investment media
for portfolios of the Separate Account of the Company in accordance with the
terms of the Agreement; and
WHEREAS, the Separate Account desires to purchase shares of such Series of
the Trust in accordance with the terms of the Agreement.
NOW THEREFORE, in consideration of the mutual covenants contained herein
and for other good and valuable consideration, the Trust, the Separate Account
and the Company agree to amend the Agreement as follows:
1. The Trust agrees to continue to make available its shares of the
JNL/Phoenix Investment Counsel Balanced Series, JNL/Phoenix Investment Counsel
Growth Series and PPM America/JNL Value Equity Series, the names of which
Series shall be changed to the PPM America/JNL Balanced Series, JNL/Putnam
Growth Series and JNL/Putnam Value Equity Series, respectively, to serve as
underlying investment media for the corresponding portfolios of the Separate
Account in accordance with the terms of the Agreement.
2. Exhibit A of the Agreement shall be replaced in its entirety with
Exhibit A dated May 1, 1997, attached hereto.
3. The Trust, the Company and the Separate Account agree to abide and be
bound by all of the terms and conditions set forth in the Agreement.
1
<PAGE> 2
IN WITNESS WHEREOF, the Trust, the Company and the Separate Account have
caused this Amendment to be executed by their duly authorized officers as of
the ____ day of _____________________, 1997.
Attest: JNL SERIES TRUST
____________________ By: ___________________________________
Larry C. Jordan
Vice President & Asst. Secretary
JACKSON NATIONAL LIFE
Attest: INSURANCE COMPANY
____________________ By: ___________________________________
John A. Knutson
Chief Operating Officer
JACKSON NATIONAL
SEPARATE ACCOUNT I
JACKSON NATIONAL LIFE
Attest: INSURANCE COMPANY
____________________ By: ___________________________________
John A. Knutson
Chief Operating Officer
2
<PAGE> 3
EXHIBIT A
DATED MAY 1, 1997
JNL SERIES TRUST
JNL Aggressive Growth Series
JNL Capital Growth Series
JNL Global Equities Series
JNL/Alger Growth Series
JNL/Eagle Core Equity Series
JNL/Eagle SmallCap Equity Series
JNL/Putnam Growth Series
JNL/Putnam Value Equity Series
PPM America/JNL Balanced Series
PPM America/JNL High Yield Bond Series
PPM America/JNL Money Market Series
Salomon Brothers/JNL Global Bond Series
Salomon Brothers/JNL U.S. Government & Quality Bond Series
T. Rowe Price/JNL Established Growth Series
T. Rowe Price/JNL International Equity Investment Series
T. Rowe Price/JNL Mid-Cap Growth Series
3
<PAGE> 1
EX-99.B8-custody
CUSTODIAN CONTRACT
Between
JNL SERIES TRUST
and
STATE STREET BANK AND TRUST COMPANY
1
<PAGE> 2
TABLE OF CONTENTS
Page
----
1. Employment of Custodian and Property to be Held By
It 1
2. Duties of the Custodian with Respect to Property
of the Fund Held by the Custodian in the United States 2
2.1 Holding Securities 2
2.2 Delivery of Securities 2
2.3 Registration of Securities 4
2.4 Bank Accounts 4
2.5 Availability of Federal Funds 5
2.6 Collection of Income 5
2.7 Payment of Fund Monies 5
2.8 Liability for Payment in Advance of Receipt of
Securities Purchased 6
2.9 Appointment of Agents 6
2.10 Deposit of Fund Assets in U.S. Securities System 7
2.11 Fund Assets Held in the Custodian's Direct
Paper System 8
2.12 Segregated Account 8
2.13 Ownership Certificates for Tax Purposes 9
2.14 Proxies 9
2.15 Communications Relating to Portfolio
Securities 9
2.16 Uninvested Cash 10
3. Duties of the Custodian with Respect to Property of
the Fund Held Outside of the United States 10
3.1 Appointment of Foreign Sub-Custodians 10
3.2 Assets to be Held 10
3.3 Foreign Securities Systems 10
3.4 Holding Securities 10
3.5 Agreements with Foreign Banking Institutions 11
3.6 Access of Independent Public Accountants of the Fund 11
3.7 Reports by Custodian 11
3.8 Transactions in Foreign Custody Account 11
3.9 Liability of Foreign Sub-Custodians 12
3.10 Liability of Custodian 12
3.11 Reimbursement for Advances 12
3.12 Monitoring Responsibilities 12
3.13 Branches of U.S. Banks 13
3.14 Tax Law 13
2
<PAGE> 3
4. Payments for Sales or Repurchases or Redemptions
of Shares of the Fund 13
5. Proper Instructions 14
6. Actions Permitted Without Express Authority 14
7. Evidence of Authority 15
8. Duties of Custodian With Respect to the Books of Account
and Calculation of Net Asset Value and Net Income 15
9. Records 15
10. Opinion of Fund's Independent Public Accountants 15
11. Reports to Fund by Independent Public Accountants 16
12. Compensation of Custodian 16
13. Responsibility of Custodian 16
14. Effective Period, Termination and Amendment 17
15. Successor Custodian 18
16. Interpretive and Additional Provisions 19
17. Additional Funds 19
18. Massachusetts Law to Apply 19
19. Prior Contracts 19
20. Shareholder Communications Election 19
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CUSTODIAN CONTRACT
This Contract between JNL Series Trust, a business trust organized and
existing under the laws of Massachusetts with its principal place of business
at 5901 Executive Drive, Lansing, Michigan 48911, hereinafter called the
"Fund", and State Street Bank and Trust Company, a Massachusetts trust company
with its principal place of business at 225 Franklin Street, Boston,
Massachusetts 02110, hereinafter called the "Custodian",
WITNESSETH:
WHEREAS, the Fund is authorized to issue shares in separate series, with
each such series representing interests in a separate portfolio of securities
and other assets; and
WHEREAS, the Fund intends to initially offer shares the sixteen (16)
series set forth on Attachment A hereto (such series together with all other
series subsequently established by the Fund and made subject to this Contract
in accordance with paragraph 17, being herein referred to as the
"Portfolio(s)");
NOW THEREFORE, in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
1. Employment of Custodian and Property to be Held by It
The Fund hereby employs the Custodian as the custodian of the assets of
the Portfolios of the Fund, including securities which the Fund, on behalf of
the applicable Portfolio desires to be held in places within the United States
("domestic securities") and securities it desires to be held outside the
United States ("foreign securities") pursuant to the provisions of the
Declaration of Trust. The Fund on behalf of the Portfolio(s) agrees to deliver
to the Custodian all securities and cash of the Portfolios, and all payments of
income, payments of principal or capital distributions received by it with
respect to all securities owned by the Portfolio(s) from time to time, and the
cash consideration received by it for such new or treasury shares of beneficial
interest of the Fund representing interests in the Portfolios, ("Shares") as
may be issued or sold from time to time. The Custodian shall not be responsible
for any property of a Portfolio held or received by the Portfolio and not
delivered to the Custodian.
Upon receipt of "Proper Instructions" (within the meaning of Article 5),
the Custodian shall on behalf of the applicable Portfolio(s) from time to time
employ one or more sub-custodians, located in the United States but only in
accordance with an applicable vote by the Board of Trustees of the Fund on
behalf of the applicable Portfolio(s), and provided that the Custodian shall
have no more or less responsibility or liability to the Fund on account of any
actions or omissions of any sub-custodian so employed than any such
sub-custodian has to the Custodian. The Custodian may employ as sub-custodian
for the Fund's foreign securities on behalf of the applicable Portfolio(s) the
<PAGE> 5
foreign banking institutions and foreign securities depositories designated in
Schedule A hereto but only in accordance with the provisions of Article 3.
2. Duties of the Custodian with Respect to Property of the Fund Held By the
Custodian in the United States
2.1 Holding Securities. The Custodian shall hold and physically segregate
for the account of each Portfolio all non-cash property, to be held by it
in the United States including all domestic securities owned by such
Portfolio, other than (a) securities which are maintained pursuant to
Section 2.10 in a clearing agency which acts as a securities depository or
in a book-entry system authorized by the U.S. Department of the Treasury
and certain federal agencies (each, a "U.S. Securities System") and (b)
commercial paper of an issuer for which State Street Bank and Trust
Company acts as issuing and paying agent ("Direct Paper") which is
deposited and/or maintained in the Direct Paper System of the Custodian
(the "Direct Paper System") pursuant to Section 2.11.
2.2 Delivery of Securities. The Custodian shall release and deliver domestic
securities owned by a Portfolio held by the Custodian or in a U.S.
Securities System account of the Custodian or in the Custodian's Direct
Paper book entry system account ("Direct Paper System Account") only upon
receipt of Proper Instructions from the Fund on behalf of the applicable
Portfolio, which may be continuing instructions when deemed appropriate by
the parties, and only in the following cases:
1) Upon sale of such securities for the account of the Portfolio
and receipt of payment therefor;
2) Upon the receipt of payment in connection with any repurchase
agreement related to such securities entered into by the Portfolio;
3) In the case of a sale effected through a U.S. Securities
System, in accordance with the provisions of Section 2.10 hereof;
4) To the depository agent in connection with tender or other
similar offers for securities of the Portfolio;
5) To the issuer thereof or its agent when such securities are
called, redeemed, retired or otherwise become payable; provided
that, in any such case, the cash or other consideration is to be
delivered to the Custodian;
6) To the issuer thereof, or its agent, for transfer into the
name of the Portfolio or into the name of any nominee or nominees of
the Custodian or into the name or nominee name of any agent
appointed pursuant to Section 2.9 or into the name or nominee name
of any sub-custodian appointed pursuant to Article 1; or for
exchange for a different number of bonds, certificates or other
evidence representing the same
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<PAGE> 6
aggregate face amount or number of units; provided that, in any
such case, the new securities are to be delivered to the Custodian;
7) Upon the sale of such securities for the account of the
Portfolio, to the broker or its clearing agent, against a receipt,
for examination in accordance with "street delivery" custom;
provided that in any such case, the Custodian shall have no
responsibility or liability for any loss arising from the delivery
of such securities prior to receiving payment for such securities
except as may arise from the Custodian's own negligence or willful
misconduct;
8) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment of
the securities of the issuer of such securities, or pursuant to
provisions for conversion contained in such securities, or pursuant
to any deposit agreement; provided that, in any such case, the new
securities and cash, if any, are to be delivered to the Custodian;
9) In the case of warrants, rights or similar securities, the
surrender thereof in the exercise of such warrants, rights or
similar securities or the surrender of interim receipts or temporary
securities for definitive securities; provided that, in any such
case, the new securities and cash, if any, are to be delivered to
the Custodian;
10) For delivery in connection with any loans of securities made
by the Portfolio, but only against receipt of adequate collateral as
agreed upon from time to time by the Custodian and the Fund on
behalf of the Portfolio, which may be in the form of cash or
obligations issued by the United States government, its agencies or
instrumentalities, except that in connection with any loans for
which collateral is to be credited to the Custodian's account in the
book-entry system authorized by the U.S. Department of the Treasury,
the Custodian will not be held liable or responsible for the
delivery of securities owned by the Portfolio prior to the receipt
of such collateral;
11) For delivery as security in connection with any borrowings by
the Fund on behalf of the Portfolio requiring a pledge of assets by
the Fund on behalf of the Portfolio, but only against receipt of
amounts borrowed;
12) For delivery in accordance with the provisions of any
agreement among the Fund on behalf of the Portfolio, the Custodian
and a broker-dealer registered under the Securities Exchange Act of
1934 (the "Exchange Act") and a member of The National Association
of Securities Dealers, Inc. ("NASD"), relating to compliance with
the rules of The Options Clearing Corporation and of any registered
national securities exchange, or of any similar organization or
organizations, regarding escrow or other arrangements in connection
with transactions by the Portfolio of the Fund;
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<PAGE> 7
13) For delivery in accordance with the provisions of any
agreement among the Fund on behalf of the Portfolio, the Custodian,
and a Futures Commission Merchant registered under the Commodity
Exchange Act, relating to compliance with the rules of the Commodity
Futures Trading Commission and/or any Contract Market, or any
similar organization or organizations, regarding account deposits in
connection with transactions by the Portfolio of the Fund;
14) Upon receipt of instructions from the transfer agent
("Transfer Agent") for the Fund, for delivery to such Transfer Agent
or to the holders of shares in connection with distributions in
kind, as may be described from time to time in the currently
effective prospectus and statement of additional information of the
Fund, related to the Portfolio ("Prospectus"), in satisfaction of
requests by holders of Shares for repurchase or redemption; and
15) For any other proper corporate purpose, but only upon receipt
of, in addition to Proper Instructions from the Fund on behalf of
the applicable Portfolio, a certified copy of a resolution of the
Board of Trustees or of the Executive Committee signed by an officer
of the Fund and certified by the Secretary or an Assistant
Secretary, specifying the securities of the Portfolio to be
delivered, setting forth the purpose for which such delivery is to
be made, declaring such purpose to be a proper corporate purpose,
and naming the person or persons to whom delivery of such securities
shall be made.
2.3 Registration of Securities. Domestic securities held by the Custodian
(other than bearer securities) shall be registered in the name of the
Portfolio or in the name of any nominee of the Fund on behalf of the
Portfolio or of any nominee of the Custodian which nominee shall be
assigned exclusively to the Portfolio, unless the Fund has authorized in
writing the appointment of a nominee to be used in common with other
registered investment companies having the same investment adviser as the
Portfolio, or in the name or nominee name of any agent appointed pursuant
to Section 2.9 or in the name or nominee name of any sub-custodian
appointed pursuant to Article 1. All securities accepted by the Custodian
on behalf of the Portfolio under the terms of this Contract shall be in
"street name" or other good delivery form. If, however, the Fund directs
the Custodian to maintain securities in "street name", the Custodian shall
utilize its best efforts only to timely collect income due the Fund on
such securities and to notify the Fund on a best efforts basis only of
relevant corporate actions including, without limitation, pendency of
calls, maturities, tender or exchange offers.
2.4 Bank Accounts. The Custodian shall open and maintain a separate bank
account or accounts in the United States in the name of each Portfolio of
the Fund, subject only to draft or order by the Custodian acting pursuant
to the terms of this Contract, and shall hold in such account or accounts,
subject to the provisions hereof, all cash received by it from or for the
account of the Portfolio, other than cash maintained by the Portfolio in a
bank account established and used in accordance with Rule 17f-3 under the
Investment Company Act of
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<PAGE> 8
1940. Funds held by the Custodian for a Portfolio may be deposited by it
to its credit as Custodian in the Banking Department of the Custodian or in
such other banks or trust companies as it may in its discretion deem
necessary or desirable; provided, however, that every such bank or trust
company shall be qualified to act as a custodian under the Investment
Company Act of 1940 and that each such bank or trust company and the funds
to be deposited with each such bank or trust company shall on behalf of
each applicable Portfolio be approved by vote of a majority of the Board of
Trustees of the Fund. Such funds shall be deposited by the Custodian in
its capacity as Custodian and shall be withdrawable by the Custodian only
in that capacity.
2.5 Availability of Federal Funds. Upon mutual agreement between the Fund on
behalf of each applicable Portfolio and the Custodian, the Custodian
shall, upon the receipt of Proper Instructions from the Fund on behalf of
a Portfolio, make federal funds available to such Portfolio as of
specified times agreed upon from time to time by the Fund and the
Custodian in the amount of checks received in payment for Shares of such
Portfolio which are deposited into the Portfolio's account.
2.6 Collection of Income. Subject to the provisions of Section 2.3, the
Custodian shall collect on a timely basis all income and other payments
with respect to registered domestic securities held hereunder to which
each Portfolio shall be entitled either by law or pursuant to custom in
the securities business, and shall collect on a timely basis all income
and other payments with respect to bearer domestic securities if, on the
date of payment by the issuer, such securities are held by the Custodian
or its agent thereof and shall credit such income, as collected, to such
Portfolio's custodian account. Without limiting the generality of the
foregoing, the Custodian shall detach and present for payment all coupons
and other income items requiring presentation as and when they become due
and shall collect interest when due on securities held hereunder. Income
due each Portfolio on securities loaned pursuant to the provisions of
Section 2.2 (10) shall be the responsibility of the Fund. The Custodian
will have no duty or responsibility in connection therewith, other than to
provide the Fund with such information or data as may be necessary to
assist the Fund in arranging for the timely delivery to the Custodian of
the income to which the Portfolio is properly entitled.
2.7 Payment of Fund Monies. Upon receipt of Proper Instructions from the
Fund on behalf of the applicable Portfolio, which may be continuing
instructions when deemed appropriate by the parties, the Custodian shall
pay out monies of a Portfolio in the following cases only:
1) Upon the purchase of domestic securities, options, futures
contracts or options on futures contracts for the account of the
Portfolio but only (a) against the delivery of such securities or
evidence of title to such options, futures contracts or options on
futures contracts to the Custodian (or any bank, banking firm or
trust company doing business in the United States or abroad which is
qualified under the Investment Company Act of 1940, as amended, to
act as a custodian and has been designated by the Custodian as its
agent for this purpose) registered in the name of the Portfolio or
in the name of a nominee of the Custodian referred to in Section 2.3
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<PAGE> 9
hereof or in proper form for transfer; (b) in the case of a purchase
effected through a U.S. Securities System, in accordance with the
conditions set forth in Section 2.10 hereof; (c) in the case of a
purchase involving the Direct Paper System, in accordance with the
conditions set forth in Section 2.11; (d) in the case of repurchase
agreements entered into between the Fund on behalf of the Portfolio
and the Custodian, or another bank, or a broker-dealer which is a
member of NASD, (i) against delivery of the securities either in
certificate form or through an entry crediting the Custodian's
account at the Federal Reserve Bank with such securities or (ii)
against delivery of the receipt evidencing purchase by the Portfolio
of securities owned by the Custodian along with written evidence of
the agreement by the Custodian to repurchase such securities from the
Portfolio or (e) for transfer to a time deposit account of the Fund
in any bank, whether domestic or foreign; such transfer may be
effected prior to receipt of a confirmation from a broker and/or the
applicable bank pursuant to Proper Instructions from the Fund as
defined in Article 5;
2) In connection with conversion, exchange or surrender of
securities owned by the Portfolio as set forth in Section 2.2
hereof;
3) For the redemption or repurchase of Shares issued by the
Portfolio as set forth in Article 4 hereof;
4) For the payment of any expense or liability incurred by the
Portfolio, including but not limited to the following payments for
the account of the Portfolio: interest, taxes, management,
accounting, transfer agent and legal fees, and operating expenses of
the Fund whether or not such expenses are to be in whole or part
capitalized or treated as deferred expenses;
5) For the payment of any dividends on Shares of the Portfolio
declared pursuant to the governing documents of the Fund;
6) For payment of the amount of dividends received in respect of
securities sold short;
7) For any other proper purpose, but only upon receipt of, in
addition to Proper Instructions from the Fund on behalf of the
Portfolio, a certified copy of a resolution of the Board of Trustees
or of the Executive Committee of the Fund signed by an officer of
the Fund and certified by its Secretary or an Assistant Secretary,
specifying the amount of such payment, setting forth the purpose for
which such payment is to be made, declaring such purpose to be a
proper purpose, and naming the person or persons to whom such
payment is to be made.
2.8 Liability for Payment in Advance of Receipt of Securities Purchased.
Except as specifically stated otherwise in this Contract, in any and every
case where payment for purchase of domestic securities for the account of
a Portfolio is made by the Custodian in advance of
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<PAGE> 10
receipt of the securities purchased in the absence of specific written
instructions from the Fund on behalf of such Portfolio to so pay in
advance, the Custodian shall be absolutely liable to the Fund for such
securities to the same extent as if the securities had been received by
the Custodian.
2.9 Appointment of Agents. The Custodian may at any time or times in its
discretion appoint (and may at any time remove) any other bank or trust
company which is itself qualified under the Investment Company Act of
1940, as amended, to act as a custodian, as its agent to carry out such of
the provisions of this Article 2 as the Custodian may from time to time
direct; provided, however, that the appointment of any agent shall not
relieve the Custodian of its responsibilities or liabilities hereunder.
2.10 Deposit of Fund Assets in U.S. Securities Systems. The Custodian may
deposit and/or maintain securities owned by a Portfolio in a clearing
agency registered with the Securities and Exchange Commission under
Section 17A of the Securities Exchange Act of 1934, which acts as a
securities depository, or in the book-entry system authorized by the U.S.
Department of the Treasury and certain federal agencies, collectively
referred to herein as "U.S. Securities System" in accordance with
applicable Federal Reserve Board and Securities and Exchange Commission
rules and regulations, if any, and subject to the following provisions:
1) The Custodian may keep securities of the Portfolio in a U.S.
Securities System provided that such securities are represented in
an account ("Account") of the Custodian in the U.S. Securities
System which shall not include any assets of the Custodian other
than assets held as a fiduciary, custodian or otherwise for
customers;
2) The records of the Custodian with respect to securities of
the Portfolio which are maintained in a U.S. Securities System shall
identify by book-entry those securities belonging to the Portfolio;
3) The Custodian shall pay for securities purchased for the
account of the Portfolio upon (i) receipt of advice from the U.S.
Securities System that such securities have been transferred to the
Account, and (ii) the making of an entry on the records of the
Custodian to reflect such payment and transfer for the account of
the Portfolio. The Custodian shall transfer securities sold for the
account of the Portfolio upon (i) receipt of advice from the U.S.
Securities System that payment for such securities has been
transferred to the Account, and (ii) the making of an entry on the
records of the Custodian to reflect such transfer and payment for
the account of the Portfolio. Copies of all advices from the U.S.
Securities System of transfers of securities for the account of the
Portfolio shall identify the Portfolio, be maintained for the
Portfolio by the Custodian and be provided to the Fund at its
request. Upon request, the Custodian shall furnish the Fund on
behalf of the Portfolio confirmation of each transfer to or from the
account of the Portfolio in the form of a written advice or
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<PAGE> 11
notice and shall furnish to the Fund on behalf of the Portfolio
copies of daily transaction sheets reflecting each day's transactions
in the U.S. Securities System for the account of the Portfolio;
4) The Custodian shall provide the Fund for the Portfolio with
any report obtained by the Custodian on the U.S. Securities System's
accounting system, internal accounting control and procedures for
safeguarding securities deposited in the U.S. Securities System;
5) The Custodian shall have received from the Fund on behalf of
the Portfolio the initial or annual certificate, as the case may be,
required by Article 14 hereof;
6) Anything to the contrary in this Contract notwithstanding,
the Custodian shall be liable to the Fund for the benefit of the
Portfolio for any loss or damage to the Portfolio resulting from use
of the U.S. Securities System by reason of any negligence,
misfeasance or misconduct of the Custodian or any of its agents or
of any of its or their employees or from failure of the Custodian or
any such agent to enforce effectively such rights as it may have
against the U.S. Securities System; at the election of the Fund, it
shall be entitled to be subrogated to the rights of the Custodian
with respect to any claim against the U.S. Securities System or any
other person which the Custodian may have as a consequence of any
such loss or damage if and to the extent that the Portfolio has not
been made whole for any such loss or damage.
2.11 Fund Assets Held in the Custodian's Direct Paper System. The Custodian
may deposit and/or maintain securities owned by a Portfolio in the Direct
Paper System of the Custodian subject to the following provisions:
1) No transaction relating to securities in the Direct Paper
System will be effected in the absence of Proper Instructions from
the Fund on behalf of the Portfolio;
2) The Custodian may keep securities of the Portfolio in the
Direct Paper System only if such securities are represented in an
account ("Account") of the Custodian in the Direct Paper System
which shall not include any assets of the Custodian other than
assets held as a fiduciary, custodian or otherwise for customers;
3) The records of the Custodian with respect to securities of
the Portfolio which are maintained in the Direct Paper System shall
identify by book-entry those securities belonging to the Portfolio;
4) The Custodian shall pay for securities purchased for the
account of the Portfolio upon the making of an entry on the records
of the Custodian to reflect such payment and transfer of securities
to the account of the Portfolio. The Custodian shall transfer
securities sold for the account of the Portfolio upon the making of
an entry
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on the records of the Custodian to reflect such transfer
and receipt of payment for the account of the Portfolio;
5) The Custodian shall furnish the Fund on behalf of the
Portfolio confirmation of each transfer to or from the account of
the Portfolio, in the form of a written advice or notice, of Direct
Paper on the next business day following such transfer and shall
furnish to the Fund on behalf of the Portfolio copies of daily
transaction sheets reflecting each day's transaction in the U.S.
Securities System for the account of the Portfolio;
6) The Custodian shall provide the Fund on behalf of the
Portfolio with any report on its system of internal accounting
control as the Fund may reasonably request from time to time.
2.12 Segregated Account. The Custodian shall upon receipt of Proper
Instructions from the Fund on behalf of each applicable Portfolio
establish and maintain a segregated account or accounts for and on behalf
of each such Portfolio, into which account or accounts may be transferred
cash and/or securities, including securities maintained in an account by
the Custodian pursuant to Section 2.10 hereof, (i) in accordance with the
provisions of any agreement among the Fund on behalf of the Portfolio, the
Custodian and a broker-dealer registered under the Exchange Act and a
member of the NASD (or any futures commission merchant registered under
the Commodity Exchange Act), relating to compliance with the rules of The
Options Clearing Corporation and of any registered national securities
exchange (or the Commodity Futures Trading Commission or any registered
contract market), or of any similar organization or organizations,
regarding escrow or other arrangements in connection with transactions by
the Portfolio, (ii) for purposes of segregating cash or government
securities in connection with options purchased, sold or written by the
Portfolio or commodity futures contracts or options thereon purchased or
sold by the Portfolio, (iii) for the purposes of compliance by the
Portfolio with the procedures required by Investment Company Act Release
No. 10666, or any subsequent release or releases of the Securities and
Exchange Commission relating to the maintenance of segregated accounts by
registered investment companies and (iv) for other proper corporate
purposes, but only, in the case of clause (iv), upon receipt of Proper
Instructions on behalf of the applicable Portfolio from a person
authorized to give same setting forth the purpose or purposes of such
segregated account and declaring such purposes to be proper corporate
purposes.
2.13 Ownership Certificates for Tax Purposes. The Custodian shall execute
ownership and other certificates and affidavits for all federal and state
tax purposes in connection with receipt of income or other payments with
respect to domestic securities of each Portfolio held by it and in
connection with transfers of securities.
2.14 Proxies. The Custodian shall, with respect to the domestic securities
held hereunder, cause to be promptly executed by the registered holder of
such securities, if the securities are
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<PAGE> 13
registered otherwise than in the name of the Portfolio or a nominee
of the Portfolio, all proxies, without indication of the manner in which
such proxies are to be voted, and shall promptly deliver to the Portfolio
such proxies, all proxy soliciting materials and all notices relating to
such securities.
2.15 Communications Relating to Portfolio Securities. Subject to the
provisions of Section 2.3, the Custodian shall transmit promptly to the
Fund for each Portfolio all written information (including, without
limitation, pendency of calls and maturities of domestic securities and
expirations of rights in connection therewith and notices of exercise of
call and put options written by the Fund on behalf of the Portfolio and
the maturity of futures contracts purchased or sold by the Portfolio)
received by the Custodian from issuers of the securities being held for
the Portfolio. With respect to tender or exchange offers, the Custodian
shall transmit promptly to the Portfolio all written information received
by the Custodian from issuers of the securities whose tender or exchange
is sought and from the party (or his agents) making the tender or exchange
offer. If the Portfolio desires to take action with respect to any tender
offer, exchange offer or any other similar transaction, the Portfolio
shall notify the Custodian at least three business days prior to the date
on which the Custodian is to take such action.
2.16 Uninvested Cash.
Upon receipt of "Proper Instructions " (within the meaning of Article 5)
from the Fund with respect to a Portfolio (which may be continuing
instructions when deemed appropriate by the parties), the Custodian shall
sweep the available cash held by the Custodian for the account of such
Portfolio in accordance with such Proper Instructions. The Fund
acknowledges that the Custodian, acting pursuant to such Proper
Instructions, is not acting as an investment advisor with respect to such
Portfolio.
3. Duties of the Custodian with Respect to Property of the Fund Held Outside
of the United States
3.1 Appointment of Foreign Sub-Custodians. The Fund hereby authorizes and
instructs the Custodian to employ as sub-custodians for the Portfolio's
securities and other assets maintained outside the United States the
foreign banking institutions and foreign securities depositories
designated on Schedule A hereto ("foreign sub-custodians"). Upon receipt
of "Proper Instructions", as defined in Section 5 of this Contract,
together with a certified resolution of the Fund's Board of Trustees, the
Custodian and the Fund may agree to amend Schedule A hereto from time to
time to designate additional foreign banking institutions and foreign
securities depositories to act as sub-custodian. Upon receipt of Proper
Instructions, the Fund may instruct the Custodian to cease the employment
of any one or more such sub-custodians for maintaining custody of the
Portfolio's assets.
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3.2 Assets to be Held. The Custodian shall limit the securities and other
assets maintained in the custody of the foreign sub-custodians to: (a)
"foreign securities", as defined in paragraph (c)(1) of Rule 17f-5 under
the Investment Company Act of 1940, and (b) cash and cash equivalents in
such amounts as the Custodian or the Fund may determine to be reasonably
necessary to effect the Portfolio's foreign securities transactions. The
Custodian shall identify on its books as belonging to the Fund, the
foreign securities of the Fund held by each foreign sub-custodian.
3.3 Foreign Securities Systems. Except as may otherwise be agreed upon in
writing by the Custodian and the Fund, assets of the Portfolios shall be
maintained in a clearing agency which acts as a securities depository or
in a book-entry system for the central handling of securities located
outside the United States (each a "Foreign Securities System") only
through arrangements implemented by the foreign banking institutions
serving as sub-custodians pursuant to the terms hereof (Foreign Securities
Systems and U.S. Securities Systems are collectively referred to herein as
the "Securities Systems"). Where possible, such arrangements shall
include entry into agreements containing the provisions set forth in
Section 3.5 hereof.
3.4 Holding Securities. The Custodian may hold securities and other non-cash
property for all of its customers, including the Fund, with a foreign
sub-custodian in a single account that is identified as belonging to the
Custodian for the benefit of its customers, provided however, that (i) the
records of the Custodian with respect to securities and other non-cash
property of the Fund which are maintained in such account shall identify
by book-entry those securities and other non-cash property belonging to
the Fund and (ii) the Custodian shall require that securities and other
non-cash property so held by the foreign sub-custodian be held separately
from any assets of the foreign sub-custodian or of others.
3.5 Agreements with Foreign Banking Institutions. Each agreement with a
foreign banking institution shall provide that: (a) the assets of each
Portfolio will not be subject to any right, charge, security interest,
lien or claim of any kind in favor of the foreign banking institution or
its creditors or agent, except a claim of payment for their safe custody
or administration; (b) beneficial ownership for the assets of each
Portfolio will be freely transferable without the payment of money or
value other than for custody or administration; (c) adequate records will
be maintained identifying the assets as belonging to each applicable
Portfolio; (d) officers of or auditors employed by, or other
representatives of the Custodian, including to the extent permitted under
applicable law the independent public accountants for the Fund, will be
given access to the books and records of the foreign banking institution
relating to its actions under its agreement with the Custodian; and (e)
assets of the Portfolios held by the foreign sub-custodian will be subject
only to the instructions of the Custodian or its agents.
3.6 Access of Independent Public Accountants of the Fund. Upon request of
the Fund, the Custodian will use its best efforts to arrange for the
independent public accountants of the Fund to be afforded access to the
books and records of any foreign banking institution
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<PAGE> 15
employed as a foreign sub-custodian insofar as such books and records
relate to the performance of such foreign banking institution under its
agreement with the Custodian.
3.7 Reports by Custodian. The Custodian will supply to the Fund from time to
time, as mutually agreed upon, statements in respect of the securities and
other assets of the Portfolio(s) held by foreign sub-custodians, including
but not limited to an identification of entities having possession of
the Portfolio(s) securities and other assets and advices or notifications
of any transfers of securities to or from each custodial account
maintained by a foreign banking institution for the Custodian on behalf of
each applicable Portfolio indicating, as to securities acquired for a
Portfolio, the identity of the entity having physical possession of such
securities.
3.8 Transactions in Foreign Custody Account. (a) Except as otherwise
provided in paragraph (b) of this Section 3.8, the provision of Sections
2.2 and 2.7 of this Contract shall apply, mutatis mutandis to the foreign
securities of the Fund held outside the United States by foreign
sub-custodians.
(b) Notwithstanding any provision of this Contract to the contrary,
settlement and payment for securities received for the account of each
applicable Portfolio and delivery of securities maintained for the account
of each applicable Portfolio may be effected in accordance with the
customary established securities trading or securities processing practices
and procedures in the jurisdiction or market in which the transaction
occurs, including, without limitation, delivering securities to the
purchaser thereof or to a dealer therefor (or an agent for such purchaser
or dealer) against a receipt with the expectation of receiving later
payment for such securities from such purchaser or dealer. (c) Securities
maintained in the custody of a foreign sub-custodian may be maintained in
the name of such entity's nominee to the same extent as set forth in
Section 2.3 of this Contract, and the Fund agrees to hold any such nominee
harmless from any liability as a holder of record of such securities.
3.9 Liability of Foreign Sub-Custodians. Each agreement pursuant to which
the Custodian employs a foreign banking institution as a foreign
sub-custodian shall require the institution to exercise reasonable care in
the performance of its duties and to indemnify, and hold harmless, the
Custodian and the Fund from and against any loss, damage, cost, expense,
liability or claim arising out of or in connection with the institution's
performance of such obligations. At the election of the Fund, it shall be
entitled to be subrogated to the rights of the Custodian with respect to
any claims against a foreign banking institution as a consequence of any
such loss, damage, cost, expense, liability or claim if and to the extent
that the Fund has not been made whole for any such loss, damage, cost,
expense, liability or claim.
3.10 Liability of Custodian. The Custodian shall be liable for the acts or
omissions of a foreign banking institution to the same extent as set forth
with respect to sub-custodians generally in this Contract and, regardless
of whether assets are maintained in the custody of a foreign
12
<PAGE> 16
banking institution, a foreign securities depository or a branch of a U.S.
bank as contemplated by paragraph 3.13 hereof, the Custodian shall not
be liable for any loss, damage, cost, expense, liability or claim resulting
from nationalization, expropriation, currency restrictions, or acts of war
or terrorism or any loss where the sub-custodian has otherwise exercised
reasonable care. Notwithstanding the foregoing provisions of this
paragraph 3.10, in delegating custody duties to State Street London Ltd.,
the Custodian shall not be relieved of any responsibility to the Fund for
any loss due to such delegation, except such loss as may result from (a)
political risk (including, but not limited to, exchange control
restrictions, confiscation, expropriation, nationalization, insurrection,
civil strife or armed hostilities) or (b) other losses (excluding a
bankruptcy or insolvency of State Street London Ltd. not caused by
political risk) due to Acts of God, nuclear incident or other losses under
circumstances where the Custodian and State Street London Ltd. have
exercised reasonable care.
3.11 Reimbursement for Advances. If the Fund requires the Custodian to
advance cash or securities for any purpose for the benefit of a Portfolio
including the purchase or sale of foreign exchange or of contracts for
foreign exchange, or in the event that the Custodian or its nominee shall
incur or be assessed any taxes, charges, expenses, assessments, claims or
liabilities in connection with the performance of this Contract, except
such as may arise from its or its nominee's own negligent action,
negligent failure to act or willful misconduct, any property at any time
held for the account of the applicable Portfolio shall be security
therefor and should the Fund fail to repay the Custodian promptly, the
Custodian shall be entitled to utilize available cash and to dispose of
such Portfolio's assets to the extent necessary to obtain reimbursement.
3.12 Monitoring Responsibilities. The Custodian shall furnish annually to the
Fund, during the month of June, information concerning the foreign
sub-custodians employed by the Custodian. Such information shall be
similar in kind and scope to that furnished to the Fund in connection with
the initial approval of this Contract. In addition, the Custodian will
promptly inform the Fund in the event that the Custodian learns of a
material adverse change in the financial condition of a foreign
sub-custodian or any material loss of the assets of the Fund or in the
case of any foreign sub-custodian not the subject of an exemptive order
from the Securities and Exchange Commission is notified by such foreign
sub-custodian that there appears to be a substantial likelihood that its
shareholders' equity will decline below $200 million (U.S. dollars or the
equivalent thereof) or that its shareholders' equity has declined below
$200 million (in each case computed in accordance with generally accepted
U.S. accounting principles).
3.13 Branches of U.S. Banks. (a) Except as otherwise set forth in this
Contract, the provisions hereof shall not apply where the custody of the
Portfolios assets are maintained in a foreign branch of a banking
institution which is a "bank" as defined by Section 2(a)(5) of the
Investment Company Act of 1940 meeting the qualification set forth in
Section 26(a) of said Act. The appointment of any such branch as a
sub-custodian shall be governed by paragraph 1 of this Contract.
13
<PAGE> 17
(b) Cash held for each Portfolio of the Fund in the United Kingdom shall
be maintained in an interest bearing account established for the Fund with
the Custodian's London branch, which account shall be subject to the
direction of the Custodian, State Street London Ltd. or both.
3.14 Tax Law. The Custodian shall have no responsibility or liability for any
obligations now or hereafter imposed on the Fund or the Custodian as
custodian of the Fund by the tax law of the United States of America or any
state or political subdivision thereof. It shall be the responsibility
of the Fund to notify the Custodian of the obligations imposed on the Fund
or the Custodian as custodian of the Fund by the tax law of jurisdictions
other than those mentioned in the above sentence, including responsibility
for withholding and other taxes, assessments or other governmental charges,
certifications and governmental reporting. The sole responsibility of the
Custodian with regard to such tax law shall be to use reasonable efforts to
assist the Fund with respect to any claim for exemption or refund under the
tax law of jurisdictions for which the Fund has provided such information.
4. Payments for Sales or Repurchases or Redemptions of Shares of the Fund
The Custodian shall receive from the distributor for the Shares or from
the Transfer Agent of the Fund and deposit into the account of the appropriate
Portfolio such payments as are received for Shares of that Portfolio issued or
sold from time to time by the Fund. The Custodian will provide timely
notification to the Fund on behalf of each such Portfolio and the Transfer
Agent of any receipt by it of payments for Shares of such Portfolio.
From such funds as may be available for the purpose but subject to the
limitations of the Declaration of Trust and any applicable votes of the Board
of Trustees of the Fund pursuant thereto, the Custodian shall, upon receipt of
instructions from the Transfer Agent, make funds available for payment to
holders of Shares who have delivered to the Transfer Agent a request for
redemption or repurchase of their Shares. In connection with the redemption or
repurchase of Shares of a Portfolio, the Custodian is authorized upon receipt
of instructions from the Transfer Agent to wire funds to or through a
commercial bank designated by the redeeming shareholders. In connection with
the redemption or repurchase of Shares of the Fund, the Custodian shall honor
checks drawn on the Custodian by a holder of Shares, which checks have been
furnished by the Fund to the holder of Shares, when presented to the Custodian
in accordance with such procedures and controls as are mutually agreed upon
from time to time between the Fund and the Custodian.
14
<PAGE> 18
5. Proper Instructions
Proper Instructions as used throughout this Contract means a writing
signed or initialed by one or more person or persons as the Board of Trustees
shall have from time to time authorized. Each such writing shall set forth the
specific transaction or type of transaction involved, including a specific
statement of the purpose for which such action is requested. Oral instructions
will be considered Proper Instructions if the Custodian reasonably believes
them to have been given by a person authorized to give such instructions with
respect to the transaction involved. The Fund shall cause all oral
instructions to be confirmed in writing. Upon receipt of a certificate of the
Secretary or an Assistant Secretary as to the authorization by the Board of
Trustees of the Fund accompanied by a detailed description of procedures
approved by the Board of Trustees, Proper Instructions may include
communications effected directly between electro-mechanical or electronic
devices provided that the Board of Trustees and the Custodian are satisfied
that such procedures afford adequate safeguards for the Portfolios' assets.
For purposes of this Section, Proper Instructions shall include instructions
received by the Custodian pursuant to any three - party agreement which
requires a segregated asset account in accordance with Section 2.12.
6. Actions Permitted without Express Authority
The Custodian may in its discretion, without express authority from the
Fund on behalf of each applicable Portfolio:
1) make payments to itself or others for minor expenses of
handling securities or other similar items relating to its duties
under this Contract, provided that all such payments shall be
accounted for to the Fund on behalf of the Portfolio;
2) surrender securities in temporary form for securities in
definitive form;
3) endorse for collection, in the name of the Portfolio, checks,
drafts and other negotiable instruments; and
4) in general, attend to all non-discretionary details in
connection with the sale, exchange, substitution, purchase, transfer
and other dealings with the securities and property of the Portfolio
except as otherwise directed by the Board of Trustees of the Fund.
7. Evidence of Authority
The Custodian shall be protected in acting upon any instructions, notice,
request, consent, certificate or other instrument or paper believed by it to be
genuine and to have been properly executed by or on behalf of the Fund. The
Custodian may receive and accept a certified copy of a vote of the Board of
Trustees of the Fund as conclusive evidence (a) of the authority of any person
15
<PAGE> 19
to act in accordance with such vote or (b) of any determination or of any action
by the Board of Trustees pursuant to the Declaration of Trust as described in
such vote, and such vote may be considered as in full force and effect until
receipt by the Custodian of written notice to the contrary.
8. Duties of Custodian with Respect to the Books of Account and Calculation
of Net Asset Value and Net Income
The Custodian shall cooperate with and supply necessary information to the
entity or entities appointed by the Board of Trustees of the Fund to keep the
books of account of each Portfolio and/or compute the net asset value per share
of the outstanding shares of each Portfolio or, if directed in writing to do so
by the Fund on behalf of the Portfolio, shall itself keep such books of account
and/or compute such net asset value per share. If so directed, the Custodian
shall also calculate daily the net income of the Portfolio as described in the
Fund's currently effective prospectus related to such Portfolio and shall
advise the Fund and the Transfer Agent daily of the total amounts of such net
income and, if instructed in writing by an officer of the Fund to do so, shall
advise the Transfer Agent periodically of the division of such net income among
its various components. The calculations of the net asset value per share and
the daily income of each Portfolio shall be made at the time or times described
from time to time in the Fund's currently effective prospectus related to such
Portfolio.
9. Records
The Custodian shall with respect to each Portfolio create and maintain all
records relating to its activities and obligations under this Contract in such
manner as will meet the obligations of the Fund under the Investment Company
Act of 1940, with particular attention to Section 31 thereof and Rules 31a-1
and 31a-2 thereunder. All such records shall be the property of the Fund and
shall at all times during the regular business hours of the Custodian be open
for inspection by duly authorized officers, employees or agents of the Fund and
employees and agents of the Securities and Exchange Commission. The Custodian
shall, at the Fund's request, supply the Fund with a tabulation of securities
owned by each Portfolio and held by the Custodian and shall, when requested to
do so by the Fund and for such compensation as shall be agreed upon between the
Fund and the Custodian, include certificate numbers in such tabulations.
10. Opinion of Fund's Independent Public Accountants
The Custodian shall take all reasonable action, as the Fund on behalf of
each applicable Portfolio may from time to time request, to obtain from year to
year favorable opinions from the Fund's independent accountants with respect to
its activities hereunder in connection with the preparation of the Fund's Form
N-1A, and Form N-SAR or other annual reports to the Securities and Exchange
Commission and with respect to any other requirements of such Commission.
16
<PAGE> 20
11. Reports to Fund by Independent Public Accountants
The Custodian shall provide the Fund, on behalf of each of the Portfolios
at such times as the Fund may reasonably require, with reports by independent
public accountants on the accounting system, internal accounting control and
procedures for safeguarding securities, futures contracts and options on
futures contracts, including securities deposited and/or maintained in a
Securities System, relating to the services provided by the Custodian under
this Contract; such reports, shall be of sufficient scope and in sufficient
detail, as may reasonably be required by the Fund to provide reasonable
assurance that any material inadequacies would be disclosed by such
examination, and, if there are no such inadequacies, the reports shall so
state.
12. Compensation of Custodian
The Custodian shall be entitled to reasonable compensation for its
services and expenses as Custodian, as agreed upon in writing from time to time
between the Fund on behalf of each applicable Portfolio and the Custodian.
13. Responsibility of Custodian
So long as and to the extent that it is in the exercise of reasonable
care, the Custodian shall not be responsible for the title, validity or
genuineness of any property or evidence of title thereto received by it or
delivered by it pursuant to this Contract and shall be held harmless in acting
upon any notice, request, consent, certificate or other instrument reasonably
believed by it to be genuine and to be signed by the proper party or parties,
including any futures commission merchant acting pursuant to the terms of a
three-party futures or options agreement. The Custodian shall be held to the
exercise of reasonable care in carrying out the provisions of this Contract,
but shall be kept indemnified by and shall be without liability to the Fund for
any action taken or omitted by it in good faith without negligence. It shall
be entitled to rely on and may act upon advice of counsel (who may be counsel
for the Fund) on all matters, and shall be without liability for any action
reasonably taken or omitted pursuant to such advice.
Except as may arise from the Custodian's own negligence or willful
misconduct or the negligence or willful misconduct of a sub-custodian or agent,
the Custodian shall be without liability to the Fund for any loss, liability,
claim or expense resulting from or caused by; (i) events or circumstances
beyond the reasonable control of the Custodian or any sub-custodian or
Securities System or any agent or nominee of any of the foregoing, including,
without limitation, nationalization or expropriation, imposition of currency
controls or restrictions, the interruption, suspension or restriction of
trading on or the closure of any securities market, power or other mechanical
or technological failures or interruptions, computer viruses or communications
disruptions, acts of war or terrorism, riots, revolutions, work stoppages,
natural disasters or other similar events or acts; (ii) errors by the Fund or
the Investment Advisor in their instructions to the
17
<PAGE> 21
Custodian provided such instructions have been in accordance with this Contract;
(iii) the insolvency of or acts or omissions by a Securities System; (iv)
any delay or failure of any broker, agent or intermediary, central bank or other
commercially prevalent payment or clearing system to deliver to the Custodian's
sub-custodian or agent securities purchased or in the remittance or payment made
in connection with securities sold; (v) any delay or failure of any company,
corporation, or other body in charge of registering or transferring securities
in the name of the Custodian, the Fund, the Custodian's sub-custodians, nominees
or agents or any consequential losses arising out of such delay or failure to
transfer such securities including non-receipt of bonus, dividends and rights
and other accretions or benefits; (vi) delays or inability to perform its duties
due to any disorder in market infrastructure with respect to any particular
security or Securities System; and (vii) any provision of any present or future
law or regulation or order of the United States of America, or any state
thereof, or any other country, or political subdivision thereof or of any court
of competent jurisdiction.
The Custodian shall be liable for the acts or omissions of a foreign
banking institution to the same extent as set forth with respect to
sub-custodians generally in this Contract.
If the Fund on behalf of the Portfolio requires the Custodian to take any
action with respect to securities, which action involves the payment of money
or which action may, in the opinion of the Custodian, result in the Custodian
or its nominee assigned to the Fund or the Portfolio being liable for the
payment of money or incurring liability of some other form, the Fund on behalf
of the Portfolio, as a prerequisite to requiring the Custodian to take such
action, shall provide indemnity to the Custodian in an amount and form
satisfactory to it.
If the Fund requires the Custodian, its affiliates, subsidiaries or
agents, to advance cash or securities for any purpose (including but not
limited to securities settlements, foreign exchange contracts and assumed
settlement) or in the event that the Custodian or its nominee shall incur or be
assessed any taxes, charges, expenses, assessments, claims or liabilities in
connection with the performance of this Contract, except such as may arise from
its or its nominee's own negligent action, negligent failure to act or willful
misconduct, any property at any time held for the account of the applicable
Portfolio shall be security therefor and should the Fund fail to repay the
Custodian promptly, the Custodian shall be entitled to utilize available cash
and to dispose of such Portfolio's assets to the extent necessary to obtain
reimbursement.
In no event shall the Custodian be liable for indirect, special or
consequential damages.
14. Effective Period, Termination and Amendment
This Contract shall become effective as of its execution, shall continue
in full force and effect until terminated as hereinafter provided, may be
amended at any time by mutual agreement of the parties hereto and may be
terminated by either party by an instrument in writing delivered or mailed,
postage prepaid to the other party, such termination to take effect not sooner
than sixty (60) days after the date of such delivery or mailing; provided,
however that the Custodian shall not with
18
<PAGE> 22
respect to a Portfolio act under Section 2.10 hereof in the absence of receipt
of an initial certificate of the Secretary or an Assistant Secretary that the
Board of Trustees of the Fund has approved the initial use of a particular
Securities System by such Portfolio, as required by Rule 17f-4 under the
Investment Company Act of 1940, as amended and that the Custodian shall not with
respect to a Portfolio act under Section 2.11 hereof in the absence of receipt
of an initial certificate of the Secretary or an Assistant Secretary that the
Board of Trustees has approved the initial use of the Direct Paper System by
such Portfolio ; provided further, however, that the Fund shall not amend or
terminate this Contract in contravention of any applicable federal or state
regulations, or any provision of the Declaration of Trust, and further provided,
that the Fund on behalf of one or more of the Portfolios may at any time by
action of its Board of Trustees (i) substitute another bank or trust company for
the Custodian by giving notice as described above to the Custodian, or (ii)
immediately terminate this Contract in the event of the appointment of a
conservator or receiver for the Custodian by the Comptroller of the Currency or
upon the happening of a like event at the direction of an appropriate regulatory
agency or court of competent jurisdiction.
Upon termination of the Contract, the Fund on behalf of each applicable
Portfolio shall pay to the Custodian such compensation as may be due as of the
date of such termination and shall likewise reimburse the Custodian for its
costs, expenses and disbursements.
15. Successor Custodian
If a successor custodian for the Fund, of one or more of the Portfolios
shall be appointed by the Board of Trustees of the Fund, the Custodian shall,
upon termination, deliver to such successor custodian at the office of the
Custodian, duly endorsed and in the form for transfer, all securities of each
applicable Portfolio then held by it hereunder and shall transfer to an account
of the successor custodian all of the securities of each such Portfolio held in
a Securities System.
If no such successor custodian shall be appointed, the Custodian shall, in
like manner, upon receipt of a certified copy of a vote of the Board of
Trustees of the Fund, deliver at the office of the Custodian and transfer such
securities, funds and other properties in accordance with such vote.
In the event that no written order designating a successor custodian or
certified copy of a vote of the Board of Trustees shall have been delivered to
the Custodian on or before the date when such termination shall become
effective, then the Custodian shall have the right to deliver to a bank or
trust company, which is a "bank" as defined in the Investment Company Act of
1940, doing business in Boston, Massachusetts, of its own selection, having an
aggregate capital, surplus, and undivided profits, as shown by its last
published report, of not less than $25,000,000, all securities, funds and other
properties held by the Custodian on behalf of each applicable Portfolio and all
instruments held by the Custodian relative thereto and all other property held
by it under this Contract on behalf of each applicable Portfolio and to
transfer to an account of such successor custodian all of the securities of
each such Portfolio held in any Securities System. Thereafter, such bank or
trust company shall be the successor of the Custodian under this Contract.
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<PAGE> 23
In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of termination hereof owing to
failure of the Fund to procure the certified copy of the vote referred to or of
the Board of Trustees to appoint a successor custodian, the Custodian shall
be entitled to fair compensation for its services during such period as the
Custodian retains possession of such securities, funds and other properties and
the provisions of this Contract relating to the duties and obligations of the
Custodian shall remain in full force and effect.
16. Interpretive and Additional Provisions
In connection with the operation of this Contract, the Custodian and the
Fund on behalf of each of the Portfolios, may from time to time agree on such
provisions interpretive of or in addition to the provisions of this Contract as
may in their joint opinion be consistent with the general tenor of this
Contract. Any such interpretive or additional provisions shall be in a
writing signed by both parties and shall be annexed hereto, provided that no
such interpretive or additional provisions shall contravene any applicable
federal or state regulations or any provision of the Declaration of Trust of
the Fund. No interpretive or additional provisions made as provided in the
preceding sentence shall be deemed to be an amendment of this Contract.
17. Additional Portfolios
In the event that the Fund establishes one or more series of Shares in
addition to the Portfolios set forth on Attachment A hereto with respect to
which it desires to have the Custodian render services as custodian under the
terms hereof, it shall so notify the Custodian in writing, and if the Custodian
agrees in writing to provide such services, such series of Shares shall become
a Portfolio hereunder.
18. Massachusetts Law to Apply
This Contract shall be construed and the provisions thereof interpreted
under and in accordance with laws of The Commonwealth of Massachusetts.
19. Prior Contracts
This Contract supersedes and terminates, as of the date hereof, all prior
contracts between the Fund on behalf of each of the Portfolios and the
Custodian relating to the custody of the Fund's assets.
20. Shareholder Communications Election
20
<PAGE> 24
Securities and Exchange Commission Rule 14b-2 requires banks which hold
securities for the account of customers to respond to requests by issuers of
securities for the names, addresses and holdings of beneficial owners of
securities of that issuer held by the bank unless the beneficial owner has
expressly objected to disclosure of this information. In order to comply with
the rule, the Custodian needs the Fund to indicate whether it authorizes the
Custodian to provide the Fund's name, address, and share position to
requesting companies whose securities the Fund owns. If the Fund tells the
Custodian "no", the Custodian will not provide this information to requesting
companies. If the Fund tells the Custodian "yes" or does not check either "yes"
or "no" below, the Custodian is required by the rule to treat the Fund as
consenting to disclosure of this information for all securities owned by the
Fund or any funds or accounts established by the Fund. For the Fund's
protection, the Rule prohibits the requesting company from using the Fund's name
and address for any purpose other than corporate communications. Please
indicate below whether the Fund consents or objects by checking one of the
alternatives below.
YES [X] The Custodian is authorized to release the Fund's name, address, and
share positions.
NO [ ] The Custodian is not authorized to release the Fund's name, address,
and share positions.
THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK
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<PAGE> 25
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed as of September 16, 1996.
JNL SERIES TRUST
By: /s/ John A. Knutson
President
STATE STREET BANK AND TRUST COMPANY
By: /s/
Executive Vice President
<PAGE> 26
ATTACHMENT A
PORTFOLIOS OF JNL SERIES TRUST
JNL Aggressive Growth Series
JNL Capital Growth Series
JNL Global Equities Series
JNL/Alger Growth Series
JNL/Eagle Core Equity Series
JNL/Eagle SmallCap Equity Series
JNL/Phoenix Investment Counsel Balanced Series
JNL/Phoenix Investment Counsel Growth Series
PPM America/JNL High Yield Bond Series
PPM America/JNL Money Market Series
PPM America/JNL Value Equity Series
Salomon Brothers/JNL Global Bond Series
Salomon Brothers/JNL U.S. Government & Quality Bond Series
T. Rowe Price/JNL Established Growth Series
T. Rowe Price/JNL International Equity Investment Series
T. Rowe Price/JNL Mid-Cap Growth Series
<PAGE> 27
FEE SCHEDULE FOR
CUSTODIAN CONTRACT
BETWEEN STATE STREET BANK & TRUST COMPANY
AND JNL SERIES TRUST
The following Fee Schedule shall be effective as of September 16, 1996, with
respect to the JNL/Eagle Core Equity Series and the JNL/Eagle SmallCap Equity
Series, and shall be effective as of October 1, 1996, for the remaining
Portfolios of the Fund.
I. CUSTODY SERVICES
DOMESTIC
- Provide custody for $US assets.
- Settle trades, collect income, monitor corporate actions, money
movements.
- Provide electronic access to account information through GlobalQuest.
- Provide daily reporting of holdings, investable cash,
transaction activity, and marketing pricing.
GLOBAL
- Maintain custody of Fund assets.
- Settle Portfolio purchases and sales.
- Report buy and sell fails.
- Determine and collect Portfolio income.
- Make cash disbursements and report cash transactions in local and
base currency.
- Withhold foreign taxes.
- File foreign tax reclaims.
- Monitor corporate actions.
- Report Portfolio positions.
The fee shown below is an annual charge, billed and payable monthly,
based on average monthly net assets.
<PAGE> 28
ANNUAL FEE PER PORTFOLIO
A. ASSET-BASED ACCOUNT MAINTENANCE CHARGE
Domestic Securities
0 - $100 Million 1 bps
$100 - $200 Million .75 bps
Over $200 Million .5 bps
Monthly minimum charge per Portfolio: $1,000
Global Securities Holding Charges in Basis Points (Annual Fee)
Country Grouping
Group A Group B Group C Group D Group E
USA Australia Austria Botswana Argentina
Canada Belgium Brazil Bangladesh
Euroclear Denmark China Bolivia**
France Finland Czech Republic Chile
Germany Hong Kong Ecuador** Colombia
Japan Indonesia Egypt Cyprus
New Zealand Ireland Ghana Greece
South Africa Italy Israel Hungary
Switzerland Malaysia Kenya India
U.K. Mexico Luxembourg Jamaica**
Netherlands Morocco Jordan
Norway Sri Lanka Mauritius
Philippines Taiwan Namibia
Portugal Trinidad and Pakistan
Tobago**
Singapore Turkey Peru
Spain Zambia Poland
Sweden Zimbabwe Slovakia**
Thailand South Korea
Tunisia**
Uruguay
Venezuela
<PAGE> 29
**Not 17f-5 eligible at this time.
Group A Group B Group C Group D Group E
See Domestic Custody
Fee Schedule 3.5 7.5 20.0 35.0
Asset charge is based upon net asset value of total Portfolio on a monthly
basis.
B. TRANSACTION FEE - (by settlement location)
For all Purchases, Sales, and Maturities
Domestic Transaction Charges
Book Entry Trades (FBE,DTC,PTC) $6.50/transaction
Physical Trades $20.00/transaction
Maturities $10.00/transaction
Euroclear $25.00/transaction
All Other Trades $25.00/transaction
Global Transaction Charges
Group A Group B Group C Group D Group E
See Domestic Group $25 $50 $100 $125
Fee Schedule All Trades All Trades All Trades All Trades
II. FUTURES, OPTIONS AND FOREIGN EXCHANGE
Option charge for each option written or
closing, contract, per issue, per broker $25.00
Option expiration or exercised charge, per issue, per broker $15.00
Futures transactions -- no security movement $ 8.00
Interest rate and index futures -- no security movement $10.00
Foreign Exchange at State Street No Charge
Foreign Exchange with third party $50/transaction
<PAGE> 30
III. ACCOUNTING SERVICES
PORTFOLIO AND FUND ACCOUNTING
-----------------------------
- Maintain investment ledgers, provide selected Portfolio
transactions, position and income reports.
- Maintain general ledger and capital stock accounts.
- Prepare daily trial balance.
- Calculate net asset value daily.
- Provide selected general ledger reports.
- Securities yield or market value quotations will be provided to
Fund via State Street's Automated Pricing System.
Monthly Charge Per Portfolio*
Domestic Funds $2,000
Global Funds $3,500
* .5 basis points for assets over $100 million per Portfolio
IV. SYSTEMS
A. GLOBALQUEST
Custodian will deliver, install, and train users on the GlobalQuest
electronic information system.
Administrative Charge $200/month
<PAGE> 31
V. OUT-OF-POCKET
A billing for the recovery of applicable out-of-pocket expenses will be
made as of the end of each month. Out-of-pocket expenses include, but
are not limited to the following:
- Telephone - Transfer Fees
- Wire Charges ($5.25 in and $5 out) - Sub-custodian Charges
- Postage and Insurance - Price Waterhouse Audit Letter
- Courier Service - Federal Reserve Fee for Return
- Duplicating Check items over $2,500
- Legal Fees ($4.25 each)
- Supplies Related to Fund Records - GNMA Transfer ($15 each)
- Rush Transfer ($8 each) - PTC Deposit/Withdrawal for
- Items held in Street name over same day turnaround ($50 each)
record date at the request of traders
($50 each)
VI. WAIVERS
Custodian waives the following fees for the periods indicated:
- monthly minimum charge per Portfolio for Custody Services and
monthly charge per Portfolio for Accounting Services for calendar
year 1996; and
- monthly minimum charges per Portfolio for Custody Services
for calendar year 1997. This waiver is contingent on Custodian
acquiring business, that will generate future revenue in excess of
the Custodian acquiring further business, that will generate future
revenue in excess of the concession amount, from Jackson National
Life Insurance Company, its subsidiaries or affiliates, prior to
December 31, 1997. If the Custodian does not receive further
business by December 31, 1997, the monthly minimum charge per
Portfolio for Custody Services for calendar year 1997 will apply and
will be billed in 1998.
VII. TERM OF THE CONTRACT
The parties agree that the Fee Schedule shall remain in effect while a
Custodian Contract between the parties is in effect for three full years
from October 1, 1996 and from year to year thereafter until it is revised
by written agreement signed by both parties as a result of
<PAGE> 32
negotiations initiated by either party. In the event that the Fund
terminates the Custodian Contract prior to the end of the initial three
year term of this Fee Schedule, any amounts waived during the calendar
year 1996 become payable to the Custodian.
VIII. PAYMENT
The above fees will be charged against the Fund's custodian checking
account five (5) days after the invoice is mailed to the Fund's offices.
JNL SERIES TRUST STATE STREET BANK &
TRUST COMPANY
By /s/ John A. Knutson By /s/
--------------------------- ----------------------------------
Title President Title Executive Vice President
------------------------ -------------------------------
Date 09/12/96 Date 09/13/96
------------------------ -------------------------------
<PAGE> 1
EX-99.B9-ta
TRANSFER AGENCY AND SERVICE AGREEMENT
between
JNL SERIES TRUST
and
STATE STREET BANK AND TRUST COMPANY
<PAGE> 2
TABLE OF CONTENTS
Page
1. Terms of Appointment; Duties of the Bank 1
2. Fees and Expenses 3
3. Representations and Warranties of the Bank 4
4. Representations and Warranties of the Fund 4
5. Data Access and Proprietary Information 5
6. Indemnification 6
7. Standard of Care 8
8. Covenants of the Fund and the Bank 8
9. Termination of Agreement 9
10. Additional Funds 9
11. Assignment 9
12. Amendment 9
13. Massachusetts Law to Apply 10
14. Force Majeure 10
15. Consequential Damages 10
16. Merger of Agreement 10
17. Limitations of Liability of the Trustees
or Shareholders 10
18. Counterparts 10
<PAGE> 3
TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made as of September 16, 1996, by and between JNL SERIES TRUST,
a Massachusetts business trust with its principal office and place of business
at 5901 Executive Drive, Lansing, Michigan 48911 (the "Fund"), and STATE
STREET BANK AND TRUST COMPANY, a Massachusetts trust company with its principal
office and place of business at 225 Franklin Street, Boston, Massachusetts
02110 (the "Bank").
WHEREAS, the Fund is authorized to issue shares in separate series, with
each such series representing interests in a separate portfolio of securities
and other assets; and
WHEREAS, the Fund intends to initially offer shares the sixteen (16)
series set forth on Attachment A hereto (each such series, together with all
other series subsequently established by the Fund and made subject to this
Contract in accordance with Article 10, being herein referred to as a
"Portfolio, and collectively as the "Portfolios");
WHEREAS, the Fund on behalf of the Portfolios desires to appoint the Bank
as its transfer agent, dividend disbursing agent and agent in connection with
certain other activities, and the Bank desires to accept such appointment;
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
1. Terms of Appointment; Duties of the Bank
1.1 Subject to the terms and conditions set forth in this Agreement, the
Fund, on behalf of the Portfolios, hereby employs and appoints the Bank to
act as, and the Bank agrees to act as its transfer agent for the Fund's
authorized and issued shares of its common stock ("Shares"), dividend
disbursing agent and agent in connection with any accumulation,
open-account or similar plans provided to the shareholders of each of the
respective Portfolios of the Fund ("Shareholders") and set out in the
currently effective prospectus and statement of additional information
("prospectus") of the Fund on behalf of the applicable Portfolio,
including without limitation any periodic investment plan or periodic
withdrawal program.
1.2 The Bank agrees that it will perform the following services:
(a) In accordance with procedures established from time to time
by agreement between the Fund on behalf of each of the Portfolios,
as applicable and the Bank, the Bank shall:
(i) Receive for acceptance, orders for the purchase
of Shares, and promptly deliver payment and appropriate
documentation thereof to the Custodian of
<PAGE> 4
the Fund authorized pursuant to the Declaration of Trust of
the Fund (the "Custodian");
(ii) Pursuant to purchase orders, issue the
appropriate number of Shares and hold such Shares in the
appropriate Shareholder account;
(iii) Receive for acceptance redemption requests and
redemption directions and deliver the appropriate
documentation thereof to the Custodian;
(iv) In respect to the transactions in items (i),
(ii) and (iii) above, the Bank shall execute transactions
directly with broker-dealers authorized by the Fund who
shall thereby be deemed to be acting on behalf of the Fund;
(v) At the appropriate time as and when it receives
monies paid to it by the Custodian with respect to any
redemption, pay over or cause to be paid over in the
appropriate manner such monies as instructed by the
redeeming Shareholders;
(vi) Effect transfers of Shares by the registered
owners thereof upon receipt of appropriate instructions;
(vii) Prepare and transmit payments for dividends
and distributions declared by the Fund on behalf of the
applicable Portfolio;
(viii) Issue replacement certificates for those certificates
alleged to have been lost, stolen or destroyed upon receipt
by the Bank of indemnification satisfactory to the Bank and
protecting the Bank and the Fund, and the Bank at its
option, may issue replacement certificates in place of
mutilated stock certificates upon presentation thereof and
without such indemnity;
(ix) Maintain records of account for and advise the
Fund and its Shareholders as to the foregoing; and
(x) Record the issuance of shares of the Fund and
maintain pursuant to SEC Rule 17Ad-10(e) a record of the
total number of shares of the Fund which are authorized,
based upon data provided to it by the Fund, and issued and
outstanding. The Bank shall also provide the Fund on a
regular basis with the total number of shares which are
authorized and issued and outstanding and shall have no
obligation, when recording the issuance of shares, to
monitor the issuance of such shares or to take cognizance
of any laws relating to the issue or sale of such Shares,
which functions shall be the sole responsibility of the
Fund.
2
<PAGE> 5
(b) In addition to and neither in lieu nor in contravention of
the services set forth in the above paragraph (a), the Bank shall:
(i) perform the customary services of a transfer agent, dividend
disbursing agent and, as relevant, agent in connection with
accumulation, open-account or similar plans (including without
limitation any periodic investment plan or periodic withdrawal
program), including but not limited to: maintaining all
Shareholder accounts, preparing Shareholder meeting lists, mailing
proxies, mailing Shareholder reports and prospectuses to current
Shareholders, withholding taxes on U.S. resident and non-resident
alien accounts, preparing and filing U.S. Treasury Department Forms
1099 and other appropriate forms required with respect to dividends
and distributions by federal authorities for all Shareholders,
preparing and mailing confirmation forms and statements of account
to Shareholders for all purchases and redemptions of Shares and
other confirmable transactions in Shareholder accounts, preparing
and mailing activity statements for Shareholders, and providing
Shareholder account information and (ii) provide a system which
will enable the Fund to monitor the total number of Shares sold in
each State.
(c) In addition, the Fund shall (i) identify to the Bank in
writing those transactions and assets to be treated as exempt from
blue sky reporting for each State and (ii) verify the
establishment of transactions for each State on the system prior to
activation and thereafter monitor the daily activity for each
State. The responsibility of the Bank for the Fund's blue sky
State registration status is solely limited to the initial
establishment of transactions subject to blue sky compliance by the
Fund and the reporting of such transactions to the Fund as provided
above.
(d) Procedures as to who shall provide certain of these
services in Section 1 may be established from time to time by
agreement between the Fund on behalf of each Portfolio and the Bank
per the attached service responsibility schedule. The Bank may at
times perform only a portion of these services and the Fund or its
agent may perform these services on the Fund's behalf.
(e) The Bank shall provide additional services on behalf of the
Fund (i.e., escheatment services) which may be agreed upon in
writing between the Fund and the Bank.
2. Fees and Expenses
2.1 For the performance by the Bank pursuant to this Agreement, the Fund
agrees on behalf of each of the Portfolios to pay the Bank an annual
maintenance fee for each Shareholder account as set out in the initial
fee schedule attached hereto. Such fees and out-of-pocket expenses
and advances identified under Section 2.2 below may be changed from time
to time subject to mutual written agreement between the Fund and the
Bank.
3
<PAGE> 6
2.2 In addition to the fee paid under Section 2.1 above, the Fund agrees on
behalf of each of the Portfolios to reimburse the Bank for reasonable
out-of-pocket expenses, including but not limited to confirmation
production, postage, forms, telephone, microfilm, microfiche, tabulating
proxies, records storage, or advances incurred by the Bank for the items
set out in the fee schedule attached hereto. In addition, any other
expenses incurred by the Bank at the request or with the consent of the
Fund, will be reimbursed by the Fund on behalf of the applicable
Portfolio.
2.3 The Fund agrees on behalf of each of the Portfolios to pay all fees and
reimbursable expenses within five days following the receipt of the
respective billing notice. Postage for mailing of dividends, proxies,
Fund reports and other mailings to all shareholder accounts shall be
advanced to the Bank by the Fund at least seven (7) days prior to the
mailing date of such materials.
3. Representations and Warranties of the Bank
The Bank represents and warrants to the Fund that:
3.1 It is a trust company duly organized and existing and in good standing
under the laws of The Commonwealth of Massachusetts.
3.2 It is duly qualified to carry on its business in the Commonwealth of
Massachusetts.
3.3 It is empowered under applicable laws and by its Charter and By-Laws to
enter into and perform this Agreement.
3.4 All requisite corporate proceedings have been taken to authorize it to
enter into and perform this Agreement.
3.5 It has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under this
Agreement.
4. Representations and Warranties of the Fund
The Fund represents and warrants to the Bank that:
4.1 It is a business trust duly organized and existing and in good standing
under the laws of The Commonwealth of Massachusetts.
4.2 It is empowered under applicable laws and by its Declaration of Trust and
By-Laws to enter into and perform this Agreement.
4
<PAGE> 7
4.3 All corporate proceedings required by said Declaration of Trust and
By-Laws have been taken to authorize it to enter into and perform this
Agreement.
4.4 It is an open-end diversified management investment company registered
under the Investment Company Act of 1940, as amended.
4.5 A registration statement under the Securities Act of 1933, as amended, on
behalf of each of the Portfolios is pending effectiveness or currently
effective and will remain effective with respect to all Shares of the Fund
being offered for sale.
5. Data Access and Proprietary Information
5.1 The Fund acknowledges that the data bases, computer programs, screen
formats, report formats, interactive design techniques, and documentation
manuals furnished to the Fund by the Bank as part of the Fund's ability to
access certain Fund-related data ("Customer Data") maintained by the Bank
on data bases under the control and ownership of the Bank or other third
party ("Data Access Services") constitute copyrighted, trade secret, or
other proprietary information (collectively, "Proprietary Information") of
the Bank or other third party. In no event shall Proprietary Information
be deemed Customer Data. Proprietary Information shall not be deemed to
include knowledge, information, documents or materials which (i) have
entered the public domain, (ii) become known to the Fund prior to
disclosure of same by the Bank, (iii) the Bank, in writing, permits to be
disclosed by the Fund, (iv) become known to the Fund from a source other
than the Bank, provided that such source is not, by making such
disclosure, in breach of a confidentiality agreement with respect thereto,
(v) are disclosed by the Bank to a third party without restriction, or
(vi) are independently developed by the Fund without breach of this
Agreement. The Fund agrees to treat all Proprietary Information as
proprietary to the Bank and further agrees that it shall not divulge any
Proprietary Information to any person or organization except as may be
provided hereunder. Without limiting the foregoing, the Fund agrees for
itself and its employees and agents:
(a) to access Customer Data solely from locations as may be
designated in writing by the Bank and solely in accordance with the
Bank's applicable user documentation;
(b) to refrain from copying or duplicating in any way the
Proprietary Information;
(c) to refrain from obtaining unauthorized access to any
portion of the Proprietary Information, and if such access is
inadvertently obtained, to inform in a timely manner of such fact
and dispose of such information in accordance with the Bank's
instructions;
5
<PAGE> 8
(d) to refrain from causing or allowing the data acquired
hereunder from being retransmitted to any other computer facility
or other location, except with the prior written consent of the
Bank;
(e) that the Fund shall have access only to those authorized
transactions agreed upon by the parties;
(f) to honor all reasonable written requests made by the Bank
to protect at the Bank's expense the rights of the Bank in
Proprietary Information at common law, under federal copyright law
and under other federal or state law.
Each party shall take reasonable efforts to advise its employees of their
obligations pursuant to this Section 5. The obligations of this Section shall
survive any earlier termination of this Agreement.
5.2 If the Fund notifies the Bank that any of the Data Access Services do not
operate in material compliance with the most recently issued user
documentation for such services, the Bank shall endeavor in a timely
manner to correct such failure. Organizations from which the Bank may
obtain certain data included in the Data Access Services are solely
responsible for the contents of such data and the Fund agrees to make no
claim against the Bank arising out of the contents of such third-party
data, including, but not limited to, the accuracy thereof. DATA ACCESS
SERVICES AND ALL COMPUTER PROGRAMS AND SOFTWARE SPECIFICATIONS USED IN
CONNECTION THEREWITH ARE PROVIDED ON AN AS IS, AS AVAILABLE BASIS. THE
BANK EXPRESSLY DISCLAIMS ALL WARRANTIES EXCEPT THOSE EXPRESSLY STATED
HEREIN INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
5.3 If the transactions available to the Fund include the ability to
originate electronic instructions to the Bank in order to (i) effect the
transfer or movement of cash or Shares or (ii) transmit Shareholder
information or other information, then in such event the Bank shall be
entitled to rely on the validity and authenticity of such instruction
without undertaking any further inquiry as long as such instruction is
undertaken in conformity with security procedures established by the Bank
from time to time.
6. Indemnification
6.1 The Bank shall not be responsible for, and the Fund shall on behalf of
the applicable Portfolio indemnify and hold the Bank harmless from and
against, any and all losses, damages, costs, charges, counsel fees,
payments, expenses and liability arising out of or attributable to:
6
<PAGE> 9
(a) All actions of the Bank or its agents or subcontractors
required to be taken pursuant to this Agreement, provided that such
actions are taken in good faith and without negligence or willful
misconduct.
(b) The Fund's lack of good faith, negligence or willful
misconduct which arise out of the breach of any representation or
warranty of the Fund hereunder.
(c) The reasonable reliance on or use by the Bank or its agents
or subcontractors of information, records, documents or services
which (i) are received by the Bank or its agents or subcontractors,
and (ii) have been prepared, maintained or performed by the Fund or
any other person or firm on behalf of the Fund including but not
limited to any previous transfer agent or registrar.
(d) The reliance on, or the carrying out by the Bank or its
agents or subcontractors of any instructions or requests of the
Fund on behalf of the applicable Portfolio.
(e) The offer or sale of Shares in violation of any requirement
under the federal securities laws or regulations or the securities
laws or regulations of any state that such Shares be registered in
such state or in violation of any stop order or other determination
or ruling by any federal agency or any state with respect to the
offer or sale of such Shares in such state.
(f) The negotiation and processing by the Bank of checks not
made payable to the order of the Bank, the Fund, the Fund's
management company, transfer agent or distributor or the retirement
account custodian or trustee for a plan account investing in
Shares, which checks are tendered to the Bank for the purchase of
Shares (i.e., checks made payable to prospective or existing
Shareholders, such checks are commonly known as "third party
checks").
6.2 At any time the Bank may apply to any officer of the Fund for
instructions, and may consult with reputable legal counsel with respect to
any matter arising in connection with the services to be performed by the
Bank under this Agreement, and the Bank and its agents or subcontractors
shall not be liable and shall be indemnified by the Fund on behalf of the
applicable Portfolio for any action taken or omitted by it in reliance
upon such instructions or upon the opinion of such counsel. The Bank, its
agents and subcontractors shall be protected and indemnified in acting
upon any paper or document furnished by or on behalf of the Fund,
reasonably believed to be genuine and to have been signed by the proper
person or persons, or upon any instruction, information, data, records or
documents provided the Bank or its agents or subcontractors by machine
readable input, telex, CRT data entry or other similar means authorized by
the Fund, and shall not be held to have notice of any change of authority
of any person, until receipt of written notice thereof from the Fund. The
Bank, its agents and subcontractors shall also be protected and
indemnified in recognizing stock certificates which are reasonably
believed to bear the proper manual
7
<PAGE> 10
or facsimile signatures of the officers of the Fund, and the proper
countersignature of any former transfer agent or former registrar, or of
a co-transfer agent or co-registrar.
6.3 In order that the indemnification provisions contained in this Section 6
shall apply, upon the assertion of a claim for which the Fund may be
required to indemnify the Bank, the Bank shall promptly notify the Fund of
such assertion, and shall keep the Fund advised with respect to all
developments concerning such claim. The Fund shall have the option to
participate with the Bank in the defense of such claim or to defend
against said claim in its own name or in the name of the Bank. The Bank
shall in no case confess any claim or make any compromise in any case in
which the Fund may be required to indemnify the Bank except with the
Fund's prior written consent.
7. Standard of Care
The Bank shall at all times act in good faith and agrees to use its best
efforts within reasonable limits to insure the accuracy of all services
performed under this Agreement, but assumes no responsibility and shall
not be liable for loss or damage due to errors unless said errors are
caused by its negligence, bad faith, or willful misconduct or that of its
employees.
8. Covenants of the Fund and the Bank
8.1 The Fund shall on behalf of each of the Portfolios promptly furnish to
the Bank the following:
(a) A certified copy of the resolution of the Board of Trustees
of the Fund authorizing the appointment of the Bank and the
execution and delivery of this Agreement.
(b) A copy of the Declaration of Trust and By-Laws of the Fund
and all amendments thereto.
8.2 The Bank hereby agrees to establish and maintain facilities and
procedures reasonably acceptable to the Fund for safekeeping of stock
certificates, check forms and facsimile signature imprinting devices, if
any; and for the preparation or use, and for keeping account of, such
certificates, forms and devices.
8.3 The Bank shall keep records relating to the services to be performed
hereunder, in the form and manner as it may deem advisable. To the extent
required by Section 31 of the Investment Company Act of 1940, as amended,
and the Rules thereunder, the Bank agrees that all such records prepared
or maintained by the Bank relating to the services to be performed by the
Bank hereunder are the property of the Fund and will be preserved,
8
<PAGE> 11
maintained and made available in accordance with such Section and Rules,
and will be surrendered promptly to the Fund on and in accordance with its
request.
8.4 The Bank and the Fund agree that all books, records, information and data
pertaining to the business of the other party which are exchanged or
received pursuant to the negotiation or the carrying out of this Agreement
shall remain confidential, and shall not be voluntarily disclosed to any
other person, except as may be required by law.
8.5 In case of any requests or demands for the inspection of the Shareholder
records of the Fund, the Bank will endeavor to notify the Fund and to
secure instructions from an authorized officer of the Fund as to such
inspection. The Bank reserves the right, however, to exhibit the
Shareholder records to any person whenever it is advised by its counsel
that it may be held liable for the failure to exhibit the Shareholder
records to such person.
9. Termination of Agreement
9.1 This Agreement may be terminated by either party upon sixty (60) days
written notice to the other.
9.2 Should the Fund exercise its right to terminate, all out-of-pocket
expenses associated with the movement of records and material will be
borne by the Fund on behalf of the applicable Portfolio(s). Additionally,
the Bank reserves the right to charge for any other reasonable expenses
associated with such termination.
10. Additional Funds
In the event that the Fund establishes one or more series of Shares in
addition to the Portfolios set forth on Attachment A hereto with respect
to which it desires to have the Bank render services as transfer agent
under the terms hereof, it shall so notify the Bank in writing, and if the
Bank agrees in writing to provide such services, such series of Shares
shall become a Portfolio hereunder.
11. Assignment
11.1 Except as provided in Section 11.3 below, neither this Agreement nor any
rights or obligations hereunder may be assigned by either party without
the written consent of the other party.
9
<PAGE> 12
11.2 This Agreement shall inure to the benefit of and be binding upon the
parties and their respective permitted successors and assigns.
11.3 The Bank may, without further consent on the part of the Fund,
subcontract for the performance hereof with (i) Boston Financial Data
Services, Inc., a Massachusetts corporation ("BFDS") which is duly
registered as a transfer agent pursuant to Section 17A(c)(2) of the
Securities Exchange Act of 1934, as amended ("Section 17A(c)(2)"), (ii) a
BFDS subsidiary duly registered as a transfer agent pursuant to Section
17A(c)(2) or (iii) a BFDS affiliate; provided, however, that the Bank
shall be as fully responsible to the Fund for the acts and omissions of
any subcontractor as it is for its own acts and omissions.
12. Amendment
This Agreement may be amended or modified by a written agreement
executed by both parties and authorized or approved by a resolution of the
Board of Trustees of the Fund.
13. Massachusetts Law to Apply
This Agreement shall be construed and the provisions thereof interpreted
under and in accordance with the laws of the Commonwealth of
Massachusetts.
14. Force Majeure
In the event either party is unable to perform its obligations under the
terms of this Agreement because of acts of God, strikes, equipment or
transmission failure or damage reasonably beyond its control, or other
causes reasonably beyond its control, such party shall not be liable for
damages to the other for any damages resulting from such failure to
perform or otherwise from such causes.
15. Consequential Damages
Neither party to this Agreement shall be liable to the other party for
consequential damages under any provision of this Agreement or for any
consequential damages arising out of any act or failure to act hereunder.
16. Merger of Agreement
10
<PAGE> 13
This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement with respect to the subject
matter hereof whether oral or written.
17. Limitations of Liability of the Trustees and Shareholders
A copy of the Declaration of Trust of the Trust is on file with the
Secretary of the Commonwealth of Massachusetts, and notice is hereby given
that this instrument is executed on behalf of the Trustees of the Trust as
Trustees and not individually and that the obligations of this instrument
are not binding upon any of the Trustees or Shareholders individually but
are binding only upon the assets and property of the Fund.
18. Counterparts
This Agreement may be executed by the parties hereto on any number of
counterparts, and all of said counterparts taken together shall be deemed
to constitute one and the same instrument.
11
<PAGE> 14
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf by and through their duly
authorized officers, as of the day and year first above written.
JNL SERIES TRUST
By: /s/ John A. Knuston
President
STATE STREET BANK AND TRUST COMPANY
By: /s/
Executive Vice President
<PAGE> 15
ATTACHMENT A
PORTFOLIOS OF JNL SERIES TRUST
JNL Aggressive Growth Series
JNL Capital Growth Series
JNL Global Equities Series
JNL/Alger Growth Series
JNL/Eagle Core Equity Series
JNL/Eagle SmallCap Equity Series
JNL/Phoenix Investment Counsel Balanced Series
JNL/Phoenix Investment Counsel Growth Series
PPM America/JNL High Yield Bond Series
PPM America/JNL Money Market Series
PPM America/JNL Value Equity Series
Salomon Brothers/JNL Global Bond Series
Salomon Brothers/JNL U.S. Government & Quality Bond Series
T. Rowe Price/JNL Established Growth Series
T. Rowe Price/JNL International Equity Investment Series
T. Rowe Price/JNL Mid-Cap Growth Series
<PAGE> 16
STATE STREET BANK & TRUST COMPANY
FUND SERVICE RESPONSIBILITIES*
Service Performed Responsibility
Bank Fund
1. Receives orders for the purchase X
of Shares.
2. Issue Shares and hold Shares in
Shareholders accounts. X
3. Receive redemption requests. X
4. Effect transactions 1-3 above
directly with broker-dealers. X
5. Pay over monies to redeeming
Shareholders. X
6. Effect transfers of Shares. X
7. Prepare and transmit dividends
and distributions. X
8. Issue Replacement Certificates. X
9. Reporting of abandoned property.
10. Maintain records of account. X
11. Maintain and keep a current and
accurate control book for each
issue of securities. X
12. Mail proxies. X
13. Mail Shareholder reports. X
14. Mail prospectuses to current
Shareholders. X
15. Withhold taxes on U.S. resident
and non-resident alien accounts. X
<PAGE> 17
Service Performed Responsibility
Bank Fund
16. Prepare and file U.S. Treasury
Department forms. X
17. Prepare and mail account and
confirmation statements for
Shareholders. X
18. Provide Shareholder account
information. X
19. Blue sky reporting. X
* Such services are more fully described in Section 1.2 (a), (b) and (c)
of the Agreement.
JNL SERIES TRUST
By: /s/ John A. Knuston
President
STATE STREET BANK AND TRUST COMPANY
By: /s/
Executive Vice President
<PAGE> 18
FEE SCHEDULE FOR
TRANSFER AGENCY AND SERVICE AGREEMENT
BETWEEN STATE STREET BANK AND TRUST COMPANY
AND JNL SERIES TRUST
This Fee Schedule dated September 12, 1996, shall be effective as of September
16, 1996, with respect to the JNL/Eagle Core Equity Series and the JNL/Eagle
SmallCap Equity Series and shall be effective as of October 1, 1996, with
respect to the remaining Series of the JNL Series Trust.
I. ACCOUNT SERVICE FEE
Monthly Maintenance Fee per Complex
0 - 20 Funds $2,500
20+ Funds $5,000
II. ACTIVITY BASED FEES
A. Trade processing (per trade)
All transactions including purchases, redemptions, exchanges, transfers and
dividends
Manual $4.80
Automated $2.00
B. Wires (per wire)
Incoming $6.25
Outgoing $6.00
III. OUT-OF-POCKET EXPENSES
Out-of-pocket expenses include, but are not limited to: custom
systems enhancements, telephone, mailing costs, and expenses
incurred at the specific direction of the Fund.
JNL SERIES TRUST STATE STREET BANK & TRUST COMPANY
By: ____________________________ By: _________________________
Title: ____________________________ Title: _________________________
Date: ____________________________ Date: _________________________
<PAGE> 1
EX-99.B10-bgh
BLAZZARD, GRODD & HASENAUER, P.C.
943 POST ROAD EAST
WESTPORT, CONNECTICUT 06881-5108
April 14, 1997
Board of Trustees
JNL Series Trust
5901 Executive Drive
Lansing, MI 48911
RE: Opinion of Counsel - JNL Series Trust
Gentlemen:
You have requested our Opinion of Counsel in connection with the filing
with the Securities and Exchange Commission of a Post-Effective Amendment No.
10 to the Registration Statement on Form N-1A with respect to the JNL Series
Trust.
We have made such examination of the law and have examined such records
and documents as in our judgment are necessary or appropriate to enable us to
render the opinions expressed below.
We are of the following opinions:
1. JNL Series Trust ("Trust") is a valid and existing
unincorporated voluntary association, commonly known as a business
trust.
2. The Trust is a business Trust created and validly existing
pursuant to the Massachusetts Laws.
3. All of the prescribed Trust procedures for the issuance of
the shares have been followed, and, when such shares are issued in
accordance with the Prospectus contained in the Registration
Statement for such shares, all state requirements relating to such
Trust shares will have been complied with.
<PAGE> 2
Board of Trustees
JNL Series Trust
April 14, 1997
Page 2
4. Upon the acceptance of purchase payments made by shareholders
in accordance with the Prospectus contained in the Registration
Statement and upon compliance with applicable law, such shareholders
will have legally-issued, fully paid, non-assessable shares of the
Trust.
You may use this opinion letter, or a copy thereof, as an exhibit to the
Registration.
We consent to the reference to our Firm contained in the Prospectus which
forms a part of the Registration Statement.
Sincerely,
BLAZZARD, GRODD & HASENAUER, P.C.
By: /s/ Raymond A. O'Hara III
------------------------------
Raymond A. O'Hara III
<PAGE> 1
EXHIBIT-99.B11-pw
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Statement of Additional Information
constituting part of this Post-Effective Amendment No. 10 to the registration
statement on Form N-1A (the "Registration Statement") of our report dated
February 14, 1997, relating to the financial statements and financial highlights
of JNL Series Trust, which appears in such Statement of Additional Information,
and to the incorporation by reference of our report into the Prospectus which
constitutes part of this Registration statement. We also consent to the
reference to us under the heading "Independent Accountants" in such Statement
of Additional Information and to the references to us under the headings
"Financial Highlights" and "Independent Accountants" in such Prospectus.
/s/ Price Waterhouse LLP
PRICE WATERHOUSE LLP
Milwaukee, Wisconsin
April 14, 1997
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<NAME> JNL AGGRESSIVE GROWTH SERIES
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<ARTICLE> 6
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<NAME> JNL CAPITAL GROWTH SERIES
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<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 34996580
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 3
<NAME> JNL GLOBAL EQUITIES SERIES
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 42282196
<INVESTMENTS-AT-VALUE> 48919581
<RECEIVABLES> 7775228
<ASSETS-OTHER> 132796
<OTHER-ITEMS-ASSETS> 0
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<PAYABLE-FOR-SECURITIES> 7140990
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<ACCUMULATED-NII-CURRENT> 0
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<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 27229
<ACCUM-APPREC-OR-DEPREC> 6778596
<NET-ASSETS> 48638474
<DIVIDEND-INCOME> 247676
<INTEREST-INCOME> 128161
<OTHER-INCOME> 0
<EXPENSES-NET> 283836
<NET-INVESTMENT-INCOME> 92001
<REALIZED-GAINS-CURRENT> 1193170
<APPREC-INCREASE-CURRENT> 4364338
<NET-CHANGE-FROM-OPS> 5649509
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 238326
<DISTRIBUTIONS-OF-GAINS> 2687572
<DISTRIBUTIONS-OTHER> 955663
<NUMBER-OF-SHARES-SOLD> 2508660
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<SHARES-REINVESTED> 215630
<NET-CHANGE-IN-ASSETS> 32497925
<ACCUMULATED-NII-PRIOR> 2538
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<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 247941
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<GROSS-EXPENSE> 404758
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<PER-SHARE-NAV-BEGIN> 13.75
<PER-SHARE-NII> .03
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<PER-SHARE-NAV-END> 15.20
<EXPENSE-RATIO> 1.14
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 4
<NAME> JNL/PHOENIX INVESTMENT COUNSEL BALANCED SERIES
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 23665613
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<RECEIVABLES> 199541
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<NET-ASSETS> 24418577
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<PER-SHARE-NAV-BEGIN> 11.17
<PER-SHARE-NII> .10
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<PER-SHARE-NAV-END> 11.92
<EXPENSE-RATIO> 1.04
<AVG-DEBT-OUTSTANDING> 0
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 5
<NAME> JNL/PHOENIX INVESTMENT COUNSEL GROWTH SERIES
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
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<TOTAL-ASSETS> 25586889
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<PER-SHARE-NAV-BEGIN> 12.5
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<PER-SHARE-NAV-END> 14.21
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<AVG-DEBT-OUTSTANDING> 0
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 6
<NAME> PPM AMERICA/JNL HIGH YIELD BOND SERIES
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 13109087
<INVESTMENTS-AT-VALUE> 13523037
<RECEIVABLES> 547681
<ASSETS-OTHER> 813
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 14071531
<PAYABLE-FOR-SECURITIES> 615535
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 59600
<TOTAL-LIABILITIES> 675135
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 12806840
<SHARES-COMMON-STOCK> 1255147
<SHARES-COMMON-PRIOR> 601533
<ACCUMULATED-NII-CURRENT> 6041
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 169565
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 413950
<NET-ASSETS> 13396396
<DIVIDEND-INCOME> 4179
<INTEREST-INCOME> 758156
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<EXPENSES-NET> 70569
<NET-INVESTMENT-INCOME> 691766
<REALIZED-GAINS-CURRENT> 217828
<APPREC-INCREASE-CURRENT> 383145
<NET-CHANGE-FROM-OPS> 1292739
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 798203
<DISTRIBUTIONS-OF-GAINS> 23388
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<NUMBER-OF-SHARES-SOLD> 1157121
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<SHARES-REINVESTED> 74057
<NET-CHANGE-IN-ASSETS> 7240867
<ACCUMULATED-NII-PRIOR> 112478
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 24875
<GROSS-ADVISORY-FEES> 59890
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 96852
<AVERAGE-NET-ASSETS> 10651922
<PER-SHARE-NAV-BEGIN> 10.23
<PER-SHARE-NII> .51
<PER-SHARE-GAIN-APPREC> .64
<PER-SHARE-DIVIDEND> .69
<PER-SHARE-DISTRIBUTIONS> .02
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.67
<EXPENSE-RATIO> .88
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 7
<NAME> PPM AMERICA/JNL MONEY MARKET SERIES
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 23003245
<INVESTMENTS-AT-VALUE> 23003245
<RECEIVABLES> 783444
<ASSETS-OTHER> 227
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 23786916
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<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 34729
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<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 23752187
<SHARES-COMMON-STOCK> 23752187
<SHARES-COMMON-PRIOR> 6815639
<ACCUMULATED-NII-CURRENT> 0
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<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 23752187
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 711067
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<EXPENSES-NET> 96576
<NET-INVESTMENT-INCOME> 614491
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<ACCUMULATED-NII-PRIOR> 0
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<GROSS-EXPENSE> 110369
<AVERAGE-NET-ASSETS> 17218326
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .04
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> .04
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .75
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 8
<NAME> PPM AMERICA/JNL VALUE EQUITY SERIES
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 16392155
<INVESTMENTS-AT-VALUE> 18343250
<RECEIVABLES> 158059
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 18501309
<PAYABLE-FOR-SECURITIES> 661506
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 79125
<TOTAL-LIABILITIES> 740631
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 15672149
<SHARES-COMMON-STOCK> 1225273
<SHARES-COMMON-PRIOR> 263623
<ACCUMULATED-NII-CURRENT> 5272
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 132162
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1951095
<NET-ASSETS> 17760678
<DIVIDEND-INCOME> 235569
<INTEREST-INCOME> 3240
<OTHER-INCOME> 0
<EXPENSES-NET> 64346
<NET-INVESTMENT-INCOME> 174463
<REALIZED-GAINS-CURRENT> 299700
<APPREC-INCREASE-CURRENT> 1455960
<NET-CHANGE-FROM-OPS> 1930123
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 183956
<DISTRIBUTIONS-OF-GAINS> 226911
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<NUMBER-OF-SHARES-SOLD> 1153246
<NUMBER-OF-SHARES-REDEEMED> 219113
<SHARES-REINVESTED> 27517
<NET-CHANGE-IN-ASSETS> 14395373
<ACCUMULATED-NII-PRIOR> 14765
<ACCUMULATED-GAINS-PRIOR> 59373
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 56818
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 116306
<AVERAGE-NET-ASSETS> 10119937
<PER-SHARE-NAV-BEGIN> 12.77
<PER-SHARE-NII> .1
<PER-SHARE-GAIN-APPREC> 1.97
<PER-SHARE-DIVIDEND> .15
<PER-SHARE-DISTRIBUTIONS> .19
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 14.5
<EXPENSE-RATIO> .85
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 9
<NAME> SALOMON BROTHERS/JNL GLOBAL BOND SERIES
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 13370742
<INVESTMENTS-AT-VALUE> 13574106
<RECEIVABLES> 5899516
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 19473622
<PAYABLE-FOR-SECURITIES> 6718114
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 272565
<TOTAL-LIABILITIES> 6990679
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 12212887
<SHARES-COMMON-STOCK> 1174127
<SHARES-COMMON-PRIOR> 609938
<ACCUMULATED-NII-CURRENT> 24906
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</TABLE>
<TABLE> <S> <C>
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<SERIES>
<NUMBER> 10
<NAME> SALOMON BROTHERS/JNL U.S. GOVERNMENT & QUALITY BOND SERIES
<S> <C>
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
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<NAME> T. ROWE PRICE/JNL ESTABLISHED GROWTH SERIES
<S> <C>
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</TABLE>
<TABLE> <S> <C>
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<SERIES>
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<NAME> T. ROWE PRICE/JNL INTERNATIONAL EQUITY INVESTMENT SERIES
<S> <C>
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
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<NAME> T. ROWE PRICE/JNL MID-CAP GROWTH SERIES
<S> <C>
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
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<NAME> JNL/ALGER GROWTH SERIES
<S> <C>
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 15
<NAME> JNL/EAGLE CORE EQUITY SERIES
<S> <C>
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 16
<NAME> JNL/EAGLE SMALLCAP EQUITY SERIES
<S> <C>
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