As filed with the Securities and Exchange Commission on March 27, 1998
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. 13 [X]
------
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 14 [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 April 1, 1998 pursuant to paragraph (b)
[ ] 60 days after filingpursuant 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.
Title of Securities Being Registered: Shares of beneficial interest
<PAGE>
JNL SERIES TRUST
CROSS-REFERENCE SHEET
(as required by Rule 495)
Caption in Prospectus or Statement of
Additional Information relating to
N-1A Item No. each Series
- ------------- -------------------------------------
Part A Prospectus
- ------ ----------
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 Front Cover Page; Investment
Registrant 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
and Policies All Series; Common Types of Securities
Item 14. Management of the Fund Trustees and Officers of the Trust
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 Purchases, Redemptions and Pricing
Being Offered 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
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>
JNL(R) SERIES TRUST
APRIL 1, 1998
<PAGE>
PROSPECTUS
April 1, 1998
JNL(R) SERIES TRUST
5901 Executive Drive o Lansing, Michigan 48911
This Prospectus provides you with the basic information you should know
before investing in the JNL Series Trust ("Trust"). You should read it and keep
it for future reference. A Statement of Additional Information, dated April 1,
1998, 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.
The 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 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/ALLIANCE GROWTH SERIES seeks long-term growth of capital by investing
primarily in common stocks or securities with common stock characteristics which
demonstrate the potential for appreciation.
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/JPM INTERNATIONAL & EMERGING MARKETS SERIES seeks to provide high total
return by investing in a portfolio of equity securities of foreign companies in
developed and, to a lesser extent, developing markets.
JNL/PIMCO TOTAL RETURN BOND SERIES seeks to realize maximum total return,
consistent with preservation of capital and prudent investment management
through investment in a diversified portfolio of fixed income securities of
varying maturities. The average portfolio duration will normally vary within a
three- to six-year time frame based on the sub-adviser's forecast for interest
rates.
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.
JNL/S&P CONSERVATIVE GROWTH SERIES I is a non-diversified Series that seeks
capital growth and current income by investing in a diversified group of
underlying Series of the JNL Series Trust.
JNL/S&P MODERATE GROWTH SERIES I is a non-diversified Series that seeks
capital growth. Current income is a secondary objective. The Series seeks to
achieve its objectives by investing in a diversified group of underlying Series
of the JNL Series Trust.
JNL/S&P AGGRESSIVE GROWTH SERIES I is a non-diversified Series that seeks
capital growth by investing in a diversified group of underlying Series of the
JNL Series Trust.
JNL/S&P VERY AGGRESSIVE GROWTH SERIES I is a non-diversified Series that
seeks capital growth by investing in a diversified group of underlying Series of
the JNL Series Trust.
JNL/S&P EQUITY GROWTH SERIES I is a non-diversified Series that seeks
capital growth by investing in a diversified group of underlying Series of the
JNL Series Trust.
JNL/S&P EQUITY AGGRESSIVE GROWTH SERIES I is a non-diversified Series that
seeks capital growth by investing in a diversified group of underlying Series of
the JNL Series Trust.
JNL/S&P CONSERVATIVE GROWTH SERIES II is a non-diversified Series that seeks
capital growth and current income by investing in a diversified group of
underlying Series of the JNL Series Trust.
JNL/S&P MODERATE GROWTH SERIES II is a non-diversified Series that seeks
capital growth. Current income is a secondary objective. The Series seeks to
achieve its objectives by investing in a diversified group of underlying Series
of the JNL Series Trust.
JNL/S&P AGGRESSIVE GROWTH SERIES II is a non-diversified Series that seeks
capital growth by investing in a diversified group of underlying Series of the
JNL Series Trust.
JNL/S&P VERY AGGRESSIVE GROWTH SERIES II is a non-diversified Series that
seeks capital growth by investing in a diversified group of underlying Series of
the JNL Series Trust.
JNL/S&P EQUITY GROWTH SERIES II is a non-diversified Series that seeks
capital growth by investing in a diversified group of underlying Series of the
JNL Series Trust.
JNL/S&P EQUITY AGGRESSIVE GROWTH SERIES II is a non-diversified Series that
seeks capital growth by investing in a diversified group of underlying Series of
the JNL Series Trust.
GOLDMAN SACHS/JNL GROWTH & INCOME SERIES seeks long-term growth of capital
and growth of income through investments in equity securities that are
considered to have favorable prospects for capital appreciation and/or dividend
paying ability.
LAZARD/JNL SMALL CAP VALUE SERIES is a non-diversified Series that seeks
capital appreciation by investing primarily in equity securities of companies
with market capitalizations under $1 billion that are believed by the
sub-adviser to be inexpensively priced relative to the return on total capital
or equity.
LAZARD/JNL MID CAP VALUE SERIES is a non-diversified Series that seeks
capital appreciation by investing primarily in equity securities of companies
with market capitalizations in the range of companies represented in the Russell
Midcap Index that the sub-adviser considers inexpensively priced relative to the
return on total capital or equity.
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.
SALOMON BROTHERS/JNL BALANCED SERIES seeks to obtain above-average income
(compared to a portfolio entirely invested in equity securities). As a secondary
objective, the Series seeks to take advantage of opportunities for growth of
capital and income. The Series seeks to achieve its objectives primarily through
investments in a broad variety of securities, including equity securities,
fixed-income securities and short-term obligations.
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 HIGH YIELD BOND SERIES seeks to maximize current
income. As a secondary objective, the Series seeks capital appreciation. The
Series seeks to achieve its objectives by investing primarily in a diversified
portfolio of high yield fixed-income securities that offer a yield above that
generally available on debt securities in the four highest rating categories of
the recognized rating services.
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 AND SALOMON BROTHERS/JNL HIGH
YIELD BOND SERIES INVEST 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, JNL/PIMCO TOTAL RETURN BOND SERIES,
GOLDMAN SACHS/JNL GROWTH & INCOME SERIES, PPM AMERICA/JNL BALANCED SERIES,
SALOMON BROTHERS/ JNL BALANCED SERIES AND SALOMON BROTHERS/JNL GLOBAL BOND
SERIES MAY INVEST IN HIGH YIELD, HIGH RISK BONDS. THE JNL/S&P CONSERVATIVE
GROWTH SERIES I, JNL/S&P MODERATE GROWTH SERIES I, JNL/S&P AGGRESSIVE GROWTH
SERIES I, JNL/S&P VERY AGGRESSIVE GROWTH SERIES I, JNL/S&P EQUITY GROWTH SERIES
I, JNL/S&P EQUITY AGGRESSIVE GROWTH SERIES I, JNL/S&P CONSERVATIVE GROWTH SERIES
II, JNL/S&P MODERATE GROWTH SERIES II, JNL/S&P AGGRESSIVE GROWTH SERIES II,
JNL/S&P VERY AGGRESSIVE GROWTH SERIES II, JNL/S&P EQUITY GROWTH SERIES II, AND
JNL/S&P EQUITY AGGRESSIVE GROWTH SERIES II MAY INVEST IN UNDERLYING SERIES OF
THE JNL SERIES TRUST WHOSE ASSETS MAY CONSIST OF 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".)
S&P is a registered trademark of the McGraw-Hill Companies, Inc.
---------------
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 APRIL 1, 1998,
IS INCORPORATED HEREIN BY REFERENCE.
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
TOPIC PAGE
----------------------------------------------------------------- -----
TRUST EXPENSES................................................... 5
FINANCIAL HIGHLIGHTS............................................. 8
INVESTMENT OBJECTIVES AND POLICIES............................... 16
COMMON TYPES OF SECURITIES AND MANAGEMENT PRACTICES.............. 52
MANAGEMENT OF THE TRUST.......................................... 61
INVESTMENT IN TRUST SHARES....................................... 73
SHARE REDEMPTION................................................. 73
ADDITIONAL INFORMATION........................................... 73
PERFORMANCE ADVERTISING FOR THE SERIES........................... 74
TAX STATUS....................................................... 76
<PAGE>
TRUST EXPENSES
SHAREHOLDER TRANSACTION EXPENSES
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
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/Alliance Growth Series........................ .775% .15%** .925%
JNL/Eagle Core Equity Series...................... .90% .15% 1.05%
JNL/Eagle SmallCap Equity Series.................. .95% .15% 1.10%
JNL/JPM International & Emerging Markets Series... .975% .15%** 1.125%
JNL/PIMCO Total Return Bond Series................ .70% .15%** .85%
JNL/Putnam Growth Series.......................... .90% .15% 1.05%
JNL/Putnam Value Equity Series.................... .90% .15% 1.05%
JNL/S&P Conservative Growth Series I***........... .20% 0%** .20%
JNL/S&P Moderate Growth Series I***............... .20% 0%** .20%
JNL/S&P Aggressive Growth Series I***............. .20% 0%** .20%
JNL/S&P Very Aggressive Growth Series I***........ .20% 0%** .20%
JNL/S&P Equity Growth Series I***................. .20% 0%** .20%
JNL/S&P Equity Aggressive Growth Series I***...... .20% 0%** .20%
JNL/S&P Conservative Growth Series II***.......... .20% 0%** .20%
JNL/S&P Moderate Growth Series II***.............. .20% 0%** .20%
JNL/S&P Aggressive Growth Series II***............ .20% 0%** .20%
JNL/S&P Very Aggressive Growth Series II***....... .20% 0%** .20%
JNL/S&P Equity Growth Series II***................ .20% 0%** .20%
JNL/S&P Equity Aggressive Growth Series II***..... .20% 0%** .20%
Goldman Sachs/JNL Growth & Income Series.......... .925% .15%** 1.075%
Lazard/JNL Small Cap Value Series................. 1.05% .15%** 1.20%
Lazard/JNL Mid Cap Value Series................... .975% .15%** 1.125%
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 Balanced Series.............. .80% .15%** .95%
Salomon Brothers/JNL Global Bond Series........... .85% .15% 1.00%
Salomon Brothers/JNL High Yield Bond Series....... .80% .15%** .95%
Salomon Brothers/JNL U.S. Government & Quality
Bond .70% .15% .85%
Series..........................................
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>
Explanation of Annual Series Operating Expenses
* Reimbursement of Other Expenses
Currently, Jackson National Financial Services, Inc. voluntarily reimburses each
of the Series for certain annual expenses which exceed a reimbursement limit.
The reimbursement limits are described below. These reimbursements are voluntary
and may be modified or discontinued at any time. Jackson National Financial
Services, Inc. may be entitled to a refund of these reimbursements in certain
circumstances. Subject to approval by the Trust's Board of Trustees, in any year
during which Jackson National Financial Services, Inc. does not reimburse a
Series because that Series' annual expenses did not exceed the reimbursement
limit, Jackson National Financial Services, Inc. may be entitled to a refund of
reimbursements made during the previous two years. However, Jackson National
Financial Services, Inc. will only be entitled to a refund to the extent that
the Series' expenses are under the reimbursement limit for that year.
Jackson National Financial Services, Inc. currently voluntarily reimburses each
of the following Series for annual expenses (excluding management fees) in
excess of .15% of average daily net assets. Prior to reimbursement, these
Series' total annual expenses as a percentage of net assets for the period ended
December 31, 1997, were: JNL Aggressive Growth Series -- 1.17%; JNL Capital
Growth Series -- 1.11%; JNL Global Equities Series -- 1.37%; JNL/Alger Growth
Series -- 1.10%; JNL/Eagle Core Equity Series -- 1.54%; JNL/Small Cap Equity
Series -- 1/51%; JNL/Putnam Growth Series -- 1.05%; JNL/Putnam Value Equity
Series -- 1.09%; PPM America/JNL Balanced Series -- .94%; PPM America/JNL High
Yield Bond Series -- .90%; PPM America/JNL Money Market Series -- .76%; Salomon
Brothers/JNL Global Bond Series -- 1.07%; Salomon Brothers/JNL U.S. Government &
Quality Bond Series -- .96%; T. Rowe Price/JNL Established Growth Series --
.98%; T. Rowe Price/JNL International Equity Investment Series -- 1.32%; and T.
Rowe Price/JNL Mid-Cap Growth Series -- 1.06%; and are expected to be:
JNL/Alliance Growth Series -- 1.38%; JNL/JPM International & Emerging Markets
Series -- 1.92%; JNL/PIMCO Total Return Bond Series -- 1.33%; Goldman Sachs/JNL
Growth & Income Series -- 1.56%; Lazard/JNL Small Cap Value Series -- 1.65%;
Lazard/JNL Mid Cap Value Series -- 1.58%; Salomon Brothers/JNL Balanced Series
- -- 1.43%; and Salomon Brothers/JNL High Yield Bond Series -- 1.43%.
Jackson National Financial Services, Inc. currently voluntarily reimburses each
of the following Series for all annual expenses (excluding management fees).
Prior to reimbursement, these Series' total annual expenses as a percentage of
net assets are expected to be: JNL/S&P Conservative Growth Series I -- .32%,
JNL/S&P Moderate Growth Series I -- .32%, JNL/S&P Aggressive Growth Series I --
.32%, JNL/S&P Very Aggressive Growth Series I -- .32%, JNL/S&P Equity Growth
Series I -- .32%, JNL/S&P Equity Aggressive Growth Series I -- .32%; JNL/S&P
Conservative Growth Series II -- .32%, JNL/S&P Moderate Growth Series II --
.32%, JNL/S&P Aggressive Growth Series II -- .32%, JNL/S&P Very Aggressive
Growth Series II -- .32%, JNL/S&P Equity Growth Series II -- .32%, JNL/S&P
Equity Aggressive Growth Series II -- .32%. These Series invest in other Series
of the JNL Series Trust. Jackson National Financial Services, Inc. does not
reimburse these Series for their pro rata share of underlying Series expenses.
** Estimated Expenses
These Series have not yet been in operation for a full fiscal year, so estimated
expenses for the first fiscal year of operation are shown. Actual expenses may
be greater or lesser than those shown.
The JNL/Alliance Growth Series, JNL/JPM International & Emerging Markets Series,
JNL/PIMCO Total Return Bond Series, Goldman Sachs/JNL Growth & Income Series,
Lazard/JNL Small Cap Value Series, Lazard/JNL Mid Cap Value Series, Salomon
Brothers/JNL Balanced Series and Salomon Brothers/JNL High Yield Bond Series
commenced operations on March 2, 1998.
The JNL/S&P Conservative Growth Series I, JNL/S&P Moderate Growth Series I,
JNL/S&P Aggressive Growth Series I, JNL/S&P Very Aggressive Growth Series I,
JNL/S&P Equity Growth Series I, JNL/S&P Equity Aggressive Growth Series I,
JNL/S&P Conservative Growth Series II, JNL/S&P Moderate Growth Series II,
JNL/S&P Aggressive Growth Series II, JNL/S&P Very Aggressive Growth Series II,
JNL/S&P Equity Growth Series II, and JNL/S&P Equity Aggressive Growth Series II
commenced operations on April 1, 1998.
*** Underlying Series Expenses
The expenses shown above are the annual operating expenses for these Series.
Because these Series invest in other Series of the JNL Series Trust, these
Series will indirectly bear their pro rata share of fees and expenses of the
underlying Series in addition to the expenses shown.
The table below shows the pro rata share of expenses that these Series would
indirectly bear if they invested in a hypothetical mix of underlying Series.
(The underlying Series' expenses are after reimbursement.) The table below does
not include these Series' annual operating expenses which are shown above. The
actual expenses of each of these Series will be based on the actual mix of
underlying Series in which it invests. The actual expenses may be greater or
lesser than those shown.
JNL/S&P Conservative Growth Series I...................... 1.015%
JNL/S&P Moderate Growth Series I.......................... 1.053%
JNL/S&P Aggressive Growth Series I........................ 1.069%
JNL/S&P Very Aggressive Growth Series I................... 1.085%
JNL/S&P Equity Growth Series I............................ 1.063%
JNL/S&P Equity Aggressive Growth Series I................. 1.085%
JNL/S&P Conservative Growth Series II..................... 1.019%
JNL/S&P Moderate Growth Series II......................... 1.059%
JNL/S&P Aggressive Growth Series II....................... 1.086%
JNL/S&P Very Aggressive Growth Series II.................. 1.054%
JNL/S&P Equity Growth Series II........................... 1.081%
JNL/S&P Equity Aggressive Growth Series II................ 1.078%
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/Alliance Growth Series................................. $ 9 $ 29 N/A N/A
JNL/Eagle Core Equity Series............................... $ 11 $ 33 N/A N/A
JNL/Eagle SmallCap Equity Series........................... $ 11 $ 35 N/A N/A
JNL/JPM International & Emerging Markets Series............ $ 11 $ 36 N/A N/A
JNL/PIMCO Total Return Bond Series......................... $ 9 $ 27 N/A N/A
JNL/Putnam Growth Series................................... $ 11 $ 33 $58 $128
JNL/Putnam Value Equity Series............................. $ 11 $ 33 $58 $128
JNL/S&P Conservative Growth Series I*...................... $ 2 $ 6 N/A N/A
JNL/S&P Moderate Growth Series I*.......................... $ 2 $ 6 N/A N/A
JNL/S&P Aggressive Growth Series I*........................ $ 2 $ 6 N/A N/A
JNL/S&P Very Aggressive Growth Series I*................... $ 2 $ 6 N/A N/A
JNL/S&P Equity Growth Series I*............................ $ 2 $ 6 N/A N/A
JNL/S&P Equity Aggressive Growth Series I*................. $ 2 $ 6 N/A N/A
JNL/S&P Conservative Growth Series II*..................... $ 2 $ 6 N/A N/A
JNL/S&P Moderate Growth Series II*......................... $ 2 $ 6 N/A N/A
JNL/S&P Aggressive Growth Series II*....................... $ 2 $ 6 N/A N/A
JNL/S&P Very Aggressive Growth Series II*.................. $ 2 $ 6 N/A N/A
JNL/S&P Equity Growth Series II*........................... $ 2 $ 6 N/A N/A
JNL/S&P Equity Aggressive Growth Series II*................ $ 2 $ 6 N/A N/A
Goldman Sachs/JNL Growth & Income Series................... $ 11 $ 34 N/A N/A
Lazard/JNL Small Cap Value Series.......................... $ 12 $ 38 N/A N/A
Lazard/JNL Mid Cap Value Series............................ $ 11 $ 36 N/A N/A
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 Balanced Series....................... $ 10 $ 30 N/A N/A
Salomon Brothers/JNL Global Bond Series.................... $ 10 $ 32 $55 $122
Salomon Brothers/JNL High Yield Bond Series................ $ 10 $ 30 N/A N/A
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.
* This example does not include these Series' pro rata share of the expenses
of the underlying Series in which they invest.
<PAGE>
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 thereon, in the
Annual Report included in the Statement of Additional Information.
<PAGE>
JNL SERIES TRUST
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
JNL Aggressive JNL Capital
Growth Series Growth Series
---------------------------------------------------- -------------
April 1, May 15,
Year ended 1996 to 1995* Year ended
December 31, December 31, to March 31, December 31,
1997 1996 1996 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Selected Per Share Data
Net asset value, beginning of period $13.38 $13.13 $10.00 $14.46
Income from investment operations:
Net investment income (loss) 0.04 0.05 0.01 (0.06)
Net realized and unrealized gains on investments
and foreign currency related items 1.65 1.10 3.53 2.23
Total income from investment operations 1.69 1.15 3.54 2.17
Less distributions:
From net investment income - (0.05) - (0.02)
From net realized gains on investment
transactions (0.54) (0.71) (0.41) (0.04)
Return of capital - (0.14) - (0.07)
Total distributions (0.54) (0.90) (0.41) (0.13)
Net increase 1.15 0.25 3.13 2.04
Net asset value, end of period $14.53 $13.38 $13.13 $16.50
Total Return (a) 12.67% 8.72% 35.78% 15.01%
Ratios and Supplemental Data
Net assets, end of period (in thousands) $78,870 $29,555 $8,527 $73,749
Ratio of net operating expenses to average
net assets (b) (c) 1.10% 1.09% 1.09% 1.10%
Ratio of net investment income to average
net assets (b) (c) 0.39% 0.77% 0.27% (0.30)%
Ratio of interest expense and dividends on
short positions to average net assets - - - -
Portfolio turnover 137.26% 85.22% 163.84% 131.43%
Average commission rate paid (d) $0.0075 $0.0242 n/a $0.0292
Ratio information assuming no expense
reimbursement or fees paid indirectly
Ratio of expenses to average net assets (b) 1.17% 1.40% 2.77% 1.11%
Ratio of net investment income to average
net assets (b) 0.32% 0.46% (1.41)% (0.31)%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
JNL Capital
Growth Series JNL Global
(continued) Equities Series
-------------------------------- ---------------------------------
Period from Period from Period from
April 1, May 15, April 1,
1996 to 1995* Year ended 1996 to
December 31, to March 31, December 31, December 31,
1996 1996 1997 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Selected Per Share Data
Net asset value, beginning of period $13.86 $10.00 $15.20 $13.75
Income from investment operations:
Net investment income (loss) 0.06 - 0.07 0.03
Net realized and unrealized gains on investments
and foreign currency related items 0.70 4.70 2.84 2.72
Total income from investment operations 0.76 4.70 2.91 2.75
Less distributions:
From net investment income - - - (0.08)
From net realized gains on investment
transactions (0.16) (0.84) (0.63) (0.90)
Return of capital - - - (0.32)
Total distributions (0.16) (0.84) (0.63) (1.30)
Net increase 0.60 3.86 2.28 1.45
Net asset value, end of period $14.46 $13.86 $17.48 $15.20
Total Return (a) 5.45% 47.94% 19.12% 19.99%
Ratios and Supplemental Data
Net assets, end of period (in thousands) $36,946 $9,578 $151,050 $48,638
Ratio of net operating expenses to average
net assets (b) (c) 1.09% 1.09% 1.15% 1.14%
Ratio of net investment income to average
net assets (b) (c) 0.91% (0.49)% 0.33% 0.37%
Ratio of interest expense and dividends on
short positions to average net assets - - - -
Portfolio turnover 115.88% 128.56% 97.21% 52.02%
Average commission rate paid (d) $0.0196 n/a $0.0064 $0.0162
Ratio information assuming no expense
reimbursement or fees paid indirectly
Ratio of expenses to average net assets (b) 1.27% 2.08% 1.37% 1.63%
Ratio of net investment income to average
net assets (b) 0.73% (1.48)% 0.11% (0.12)%
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
JNL Global
Equities Series JNL/Alger
(continued) Growth Series
------------ ---------------------------------------------------
Period from Period from Period from
May 15, April 1, October 16,
1995* Year ended 1996 to 1995*
to March 31, December 31, December 31, to March 31,
1996 1997 1996 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Selected Per Share Data
Net asset value, beginning of period $10.00 $11.16 $10.38 $10.00
Income from investment operations:
Net investment income (loss) 0.10 (0.01) - -
Net realized and unrealized gains on investments
and foreign currency related items 4.02 2.93 0.78 0.38
Total income from investment operations 4.12 2.92 0.78 0.38
Less distributions:
From net investment income - - - -
From net realized gains on investment
transactions (0.37) (0.52) - -
Return of capital - - - -
Total distributions (0.37) (0.52) - -
Net increase 3.75 2.40 0.78 0.38
Net asset value, end of period $13.75 $13.56 $11.16 $10.38
Total Return (a) 41.51% 26.20% 7.51% 3.80%
Ratios and Supplemental Data
Net assets, end of period (in thousands) $16,141 $85,877 $38,252 $8,649
Ratio of net operating expenses to average
net assets (b) (c) 1.15% 1.10% 1.07% 1.03%
Ratio of net investment income to average
net assets (b) (c) 0.39% (0.07)% (0.02)% (0.17)%
Ratio of interest expense and dividends on
short positions to average net assets - - - -
Portfolio turnover 142.36% 125.44% 59.92% 50.85%
Average commission rate paid (d) n/a $0.0678 $0.0441 n/a
Ratio information assuming no expense
reimbursement or fees paid indirectly
Ratio of expenses to average net assets (b) 2.25% 1.10% 1.19% 1.89%
Ratio of net investment income to average
net assets (b) (0.71)% (0.07)% (0.14)% (1.03)%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
JNL/Eagle Core
Equity Series
-----------------------------------
Period from
September 16,
Year ended 1996* to
December 31, December 31,
1997 1996
------------ ------------
<S> <C> <C>
Selected Per Share Data
Net asset value, beginning of period $10.62 $10.00
Income from investment operations:
Net investment income (loss) 0.08 0.03
Net realized and unrealized gains on investments
and foreign currency related items 3.35 0.62
Total income from investment operations 3.43 0.65
Less distributions:
From net investment income (0.08) (0.03)
From net realized gains on investment
transactions (0.22) -
Return of capital - -
Total distributions (0.30) (0.03)
Net increase 3.13 0.62
Net asset value, end of period $13.75 $10.62
Total Return (a) 32.35% 6.47%
Ratios and Supplemental Data
Net assets, end of period (in thousands) $11,896 $1,954
Ratio of net operating expenses to average
net assets (b) (c) 1.05% 1.05%
Ratio of net investment income to average
net assets (b) (c) 1.00% 1.10%
Ratio of interest expense and dividends on
short positions to average net assets - -
Portfolio turnover 51.48% 1.36%
Average commission rate paid (d) $0.0572 $0.0452
Ratio information assuming no expense
reimbursement or fees paid indirectly
Ratio of expenses to average net assets (b) 1.54% 4.57%
Ratio of net investment income to average
net assets (b) 0.51% (2.42)%
</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 for the periods ended December 31, 1996 and March 31, 1996.
(b) Annualized for the periods ended December 31, 1996 and March 31, 1996.
(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.
<PAGE>
JNL SERIES TRUST
FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
JNL/Eagle
SmallCap JNL/Putnam
Equity Series Growth Series
----------------------------------- ------------------------------
Period from Period from
September 16, April 1,
Year ended 1996* to Year ended 1996 to
December 31, December 31, December 31, December 31,
1997 1996 1997 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Selected Per Share Data
Net asset value, beginning of period $11.54 $10.00 $14.21 $12.50
Income from investment operations:
Net investment income (loss) (0.07) (0.01) 0.04 0.04
Net realized and unrealized gains on investments
and foreign currency related items 3.26 1.55 3.07 2.12
Total income from investment operations 3.19 1.54 3.11 2.16
Less distributions:
From net investment income - - (0.02) (0.05)
From net realized gains on investment
transactions - - (0.31) (0.40)
Return of capital - - - -
Total distributions - - (0.33) (0.45)
Net increase 3.19 1.54 2.78 1.71
Net asset value, end of period $14.73 $11.54 $16.99 $14.21
Total Return (a) 27.64% 15.40% 21.88% 17.28%
Ratios and Supplemental Data
Net assets, end of period (in thousands) $13,493 $1,944 $83,612 $22,804
Ratio of net operating expenses to average
net assets (b) (c) 1.10% 1.10% 1.05% 1.04%
Ratio of net investment income to average
net assets (b) (c) (0.54)% (0.26)% 0.31% 0.94%
Ratio of interest expense and dividends on
short positions to average net assets - - 0.08% -
Portfolio turnover 60.78% 28.01% 194.81% 184.33%
Average commission rate paid (d) $0.0574 $0.0264 $0.0459 $0.0175
Ratio information assuming no expense
reimbursement or fees paid indirectly
Ratio of expenses to average net assets (b) 1.51% 4.77% 1.05% 1.27%
Ratio of net investment income to average
net assets (b) (0.95)% (3.93)% 0.31% 0.71%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
JNL/Putnam JNL/Putnam
Growth Series Value Equity
(continued) Series
------------ ---------------------------------------------------
Period from Period from Period from
May 15, April 1, May 15,
1995* Year ended 1996 to 1995*
to March 31, December 31, December 31, to March 31,
1996 1997 1996 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Selected Per Share Data
Net asset value, beginning of period $10.00 $14.50 $12.77 $10.00
Income from investment operations:
Net investment income (loss) 0.01 0.13 0.10 0.23
Net realized and unrealized gains on investments
and foreign currency related items 3.66 3.03 1.97 2.86
Total income from investment operations 3.67 3.16 2.07 3.09
Less distributions:
From net investment income - (0.13) (0.15) (0.17)
From net realized gains on investment
transactions (1.17) (0.71) (0.19) (0.15)
Return of capital - - - -
Total distributions (1.17) (0.84) (0.34) (0.32)
Net increase 2.50 2.32 1.73 2.77
Net asset value, end of period $12.50 $16.82 $14.50 $12.77
Total Return (a) 37.69% 21.82% 16.25% 31.14%
Ratios and Supplemental Data
Net assets, end of period (in thousands) $2,518 $108,565 $17,761 $3,365
Ratio of net operating expenses to average
net assets (b) (c) 0.95% 1.03% 0.85% 0.87%
Ratio of net investment income to average
net assets (b) (c) 0.28% 1.43% 2.29% 2.33%
Ratio of interest expense and dividends on
short positions to average net assets - - - -
Portfolio turnover 255.03% 112.54% 13.71% 30.12%
Average commission rate paid (d) n/a $0.0366 $0.0259 n/a
Ratio information assuming no expense
reimbursement or fees paid indirectly
Ratio of expenses to average net assets (b) 5.38% 1.09% 1.53% 2.28%
Ratio of net investment income to average
net assets (b) (4.15)% 1.37% 1.61% 0.91%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PPM
PPM America/JNL
America/JNL High Yield Bond
Balanced Series Series
---------------------------------------------------- --------------
Period from Period from
April 1, May 15,
Year ended 1996 to 1995* Year ended
December 31, December 31, to March 31, December 31,
1997 1996 1996 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Selected Per Share Data
Net asset value, beginning of period $11.92 $11.17 $10.00 $10.67
Income from investment operations:
Net investment income (loss) 0.36 0.10 0.25 0.59
Net realized and unrealized gains on investments
and foreign currency related items 1.83 0.98 1.40 1.02
Total income from investment operations 2.19 1.08 1.65 1.61
Less distributions:
From net investment income (0.36) (0.15) (0.19) (0.59)
From net realized gains on investment
transactions (0.69) (0.18) (0.29) (0.21)
Return of capital - - - -
Total distributions (1.05) (0.33) (0.48) (0.80)
Net increase 1.14 0.75 1.17 0.81
Net asset value, end of period $13.06 $11.92 $11.17 $11.48
Total Return (a) 18.43% 9.72% 16.60% 15.05%
Ratios and Supplemental Data
Net assets, end of period (in thousands) $59,694 $24,419 $4,761 $62,712
Ratio of net operating expenses to average
net assets (b) (c) 0.93% 1.04% 1.01% 0.90%
Ratio of net investment income to average
net assets (b) (c) 3.72% 2.39% 2.99% 8.15%
Ratio of interest expense and dividends on
short positions to average net assets - - - -
Portfolio turnover 160.88% 158.15% 115.84% 189.25%
Average commission rate paid (d) $0.0321 $0.0494 n/a n/a
Ratio information assuming no expense
reimbursement or fees paid indirectly
Ratio of expenses to average net assets (b) 0.94% 1.22% 3.71% 0.90%
Ratio of net investment income to average
net assets (b) 3.71% 2.21% 0.29% 8.15%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PPM
America/JNL
High Yield Bond
Series
(continued)
--------------------------------
Period from Period from
April 1, May 15,
1996 to 1995*
December 31, to March 31,
1996 1996
------------ ------------
<S> <C> <C>
Selected Per Share Data
Net asset value, beginning of period $10.23 $10.00
Income from investment operations:
Net investment income (loss) 0.51 0.73
Net realized and unrealized gains on investments
and foreign currency related items 0.64 0.04
Total income from investment operations 1.15 0.77
Less distributions:
From net investment income (0.69) (0.54)
From net realized gains on investment
transactions (0.02) -
Return of capital - -
Total distributions (0.71) (0.54)
Net increase 0.44 0.23
Net asset value, end of period $10.67 $10.23
Total Return (a) 11.24% 7.82%
Ratios and Supplemental Data
Net assets, end of period (in thousands) $13,396 $6,156
Ratio of net operating expenses to average
net assets (b) (c) 0.88% 0.88%
Ratio of net investment income to average
net assets (b) (c) 8.64% 8.34%
Ratio of interest expense and dividends on
short positions to average net assets - -
Portfolio turnover 113.08% 186.21%
Average commission rate paid (d) n/a n/a
Ratio information assuming no expense
reimbursement or fees paid indirectly
Ratio of expenses to average net assets (b) 1.21% 1.50%
Ratio of net investment income to average
net assets (b) 8.31% 7.72%
</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 for the periods ended December 31, 1996 and March 31, 1996.
(b) Annualized for the periods ended December 31, 1996 and March 31, 1996.
(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.
<PAGE>
JNL SERIES TRUST
FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
PPM Salomon
America/JNL Brothers/JNL
Money Market Global Bond
Series Series
-------------------------------------------------- --------------
Period from Period from
April 1, May 15,
Year ended 1996 to 1995* Year ended
December 31, December 31, to March 31, December 31,
1997 1996 1996 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Selected Per Share Data
Net asset value, beginning of period $1.00 $1.00 $1.00 $10.63
Income from investment operations:
Net investment income (loss) 0.05 0.04 0.04 0.54
Net realized and unrealized gains on investments
and foreign currency related items - - - 0.59
Total income from investment operations 0.05 0.04 0.04 1.13
Less distributions:
From net investment income (0.05) (0.04) (0.04) (0.58)
From net realized gains on investment
transactions - - - (0.05)
Return of capital - - - (0.01)
Total distributions (0.05) (0.04) (0.04) (0.64)
Net increase - - - 0.49
Net asset value, end of period $1.00 $1.00 $1.00 $11.12
Total Return (a) 5.01% 3.61% 4.59% 10.66%
Ratios and Supplemental Data
Net assets, end of period (in thousands) $41,808 $23,752 $6,816 $36,725
Ratio of net operating expenses to average
net assets (b) (c) 0.75% 0.75% 0.75% 1.00%
Ratio of net investment income to average
net assets (b) (c) 4.92% 4.75% 5.06% 6.83%
Ratio of interest expense and dividends on
short positions to average net assets - - - 0.01%
Portfolio turnover - - - 134.55%
Average commission rate paid (d) n/a n/a n/a n/a
Ratio information assuming no expense
reimbursement or fees paid indirectly
Ratio of expenses to average net assets (b) 0.76% 0.85% 1.30% 1.07%
Ratio of net investment income to average
net assets (b) 4.91% 4.65% 4.51% 6.76%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Salomon Salomon
Brothers/JNL Brothers/JNL
Global Bond U.S. Government
Series & Quality Bond
(continued) Series
--------------------------------- --------------------------------
Period from Period from Period from
April 1, May 15, April 1,
1996 to 1995* Year ended 1996 to
December 31, to March 31, December 31, December 31,
1996 1996 1997 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Selected Per Share Data
Net asset value, beginning of period $10.46 $10.00 $10.20 $10.09
Income from investment operations:
Net investment income (loss) 0.42 0.81 0.44 0.24
Net realized and unrealized gains on investments
and foreign currency related items 0.70 0.24 0.49 0.24
Total income from investment operations 1.12 1.05 0.93 0.48
Less distributions:
From net investment income (0.69) (0.56) (0.42) (0.34)
From net realized gains on investment
transactions (0.26) (0.03) (0.02) (0.03)
Return of capital - - - -
Total distributions (0.95) (0.59) (0.44) (0.37)
Net increase 0.17 0.46 0.49 0.11
Net asset value, end of period $10.63 $10.46 $10.69 $10.20
Total Return (a) 10.68% 10.74% 9.16% 4.82%
Ratios and Supplemental Data
Net assets, end of period (in thousands) $12,483 $6,380 $25,389 $9,832
Ratio of net operating expenses to average
net assets (b) (c) 0.99% 1.00% 0.85% 0.84%
Ratio of net investment income to average
net assets (b) (c) 7.52% 9.01% 5.99% 5.72%
Ratio of interest expense and dividends on
short positions to average net assets - - 0.09% -
Portfolio turnover 109.85% 152.89% 378.59% 218.50%
Average commission rate paid (d) n/a n/a n/a n/a
Ratio information assuming no expense
reimbursement or fees paid indirectly
Ratio of expenses to average net assets (b) 1.44% 2.14% 0.96% 1.37%
Ratio of net investment income to average
net assets (b) 7.07% 7.87% 5.88% 5.19%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Salomon
Brothers/JNL
U.S. Government T. Rowe
& Quality Bond Price/JNL
Series Established
(contiinued) Growth Series
--------------- ----------------------------------------------------
Period from Period from Period from
May 15, April 1, May 15,
1995* Year ended 1996 to 1995*
to March 31, December 31, December 31, to March 31,
1996 1997 1996 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Selected Per Share Data
Net asset value, beginning of period $10.00 $12.56 $11.36 $10.00
Income from investment operations:
Net investment income (loss) 0.45 0.06 0.03 0.07
Net realized and unrealized gains on investments
and foreign currency related items 0.02 3.64 1.81 2.68
Total income from investment operations 0.47 3.70 1.84 2.75
Less distributions:
From net investment income (0.34) (0.03) (0.04) (0.06)
From net realized gains on investment
transactions (0.04) (0.61) (0.09) (1.33)
Return of capital - - (0.51) -
Total distributions (0.38) (0.64) (0.64) (1.39)
Net increase 0.09 3.06 1.20 1.36
Net asset value, end of period $10.09 $15.62 $12.56 $11.36
Total Return (a) 4.65% 29.47% 16.12% 28.23%
Ratios and Supplemental Data
Net assets, end of period (in thousands) $3,007 $124,022 $32,291 $8,772
Ratio of net operating expenses to average
net assets (b) (c) 0.84% 0.98% 1.00% 1.00%
Ratio of net investment income to average
net assets (b) (c) 5.41% 0.43% 0.59% 0.75%
Ratio of interest expense and dividends on
short positions to average net assets - - - -
Portfolio turnover 253.37% 47.06% 36.41% 101.13%
Average commission rate paid (d) n/a $0.0309 $0.0288 n/a
Ratio information assuming no expense
reimbursement or fees paid indirectly
Ratio of expenses to average net assets (b) 2.53% 0.98% 1.11% 2.09%
Ratio of net investment income to average
net assets (b) 3.72% 0.43% 0.48% (0.34)%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
T. Rowe
Price/JNL
International
Equity
Investment
---------------------------------------------------
Series
Period from Period from
April 1, May 15,
Year ended 1996 to 1995*
December 31, December 31, to March 31,
1997 1996 1996
------------ ------------ ------------
<S> <C> <C> <C>
Selected Per Share Data
Net asset value, beginning of period $12.08 $11.25 $10.00
Income from investment operations:
Net investment income (loss) 0.09 0.06 0.04
Net realized and unrealized gains on investments
and foreign currency related items 0.23 0.90 1.21
Total income from investment operations 0.32 0.96 1.25
Less distributions:
From net investment income (0.08) (0.12) -
From net realized gains on investment
transactions (0.23) (0.01) -
Return of capital - - -
Total distributions (0.31) (0.13) -
Net increase 0.01 0.83 1.25
Net asset value, end of period $12.09 $12.08 $11.25
Total Return (a) 2.65% 8.54% 12.50%
Ratios and Supplemental Data
Net assets, end of period (in thousands) $78,685 $48,204 $24,211
Ratio of net operating expenses to average
net assets (b) (c) 1.24% 1.25% 1.25%
Ratio of net investment income to average
net assets (b) (c) 0.74% 1.09% 0.78%
Ratio of interest expense and dividends on
short positions to average net assets - - -
Portfolio turnover 18.81% 5.93% 16.45%
Average commission rate paid (d) $0.0023 $0.0257 n/a
Ratio information assuming no expense
reimbursement or fees paid indirectly
Ratio of expenses to average net assets (b) 1.32% 1.29% 2.14%
Ratio of net investment income to average
net assets (b) 0.66% 1.05% (0.11)%
</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 for the periods ended December 31, 1996 and March 31, 1996.
(b) Annualized for the periods ended December 31, 1996 and March 31, 1996.
(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.
<PAGE>
JNL SERIES TRUST
FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
T. Rowe
Price/JNL
Mid-Cap Growth
Series
---------------------------------------------------
Period from Period from
April 1, May 15,
Year ended 1996 to 1995*
December 31, December 31, to March 31,
1997 1996 1996
------------ ------------ ------------
<S> <C> <C> <C>
Selected Per Share Data
Net asset value, beginning of period $14.89 $13.43 $10.00
Income from investment operations:
Net investment income (loss) (0.03) (0.05) 0.06
Net realized and unrealized gains on investments
and foreign currency related items 2.74 1.92 3.90
Total income from investment operations 2.71 1.87 3.96
Less distributions:
From net investment income - (0.05) -
From net realized gains on investment
transactions (0.23) (0.36) (0.53)
Return of capital - - -
Total distributions (0.23) (0.41) (0.53)
Net increase 2.48 1.46 3.43
Net asset value, end of period $17.37 $14.89 $13.43
Total Return (a) 18.21% 13.91% 40.06%
Ratios and Supplemental Data
Net assets, end of period (in thousands) $127,052 $47,104 $10,545
Ratio of net operating expenses to average
net assets (b) (c) 1.06% 1.10% 1.10%
Ratio of net investment income to average
net assets (b) (c) (0.26)% (0.18)% 0.82%
Ratio of interest expense and dividends on
short positions to average net assets - - -
Portfolio turnover 41.43% 25.05% 66.04%
Average commission rate paid (d) $0.0467 $0.0326 n/a
Ratio information assuming no expense
reimbursement or fees paid indirectly
Ratio of expenses to average net assets (b) 1.06% 1.14% 2.10%
Ratio of net investment income to average
net assets (b) (0.26)% (0.22)% (0.18)%
</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 for the periods ended December 31, 1996 and March 31, 1996.
(b) Annualized for the periods ended December 31, 1996 and March 31, 1996.
(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.
<PAGE>
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; Alliance Capital Management L.P. serves as sub-adviser
for the JNL/Alliance Growth Series; Eagle Asset Management, Inc. serves as
sub-adviser for the JNL/Eagle Core Equity Series and JNL/Eagle SmallCap Equity
Series; J.P. Morgan Investment Management Inc. serves as sub-adviser for the
JNL/JPM International & Emerging Markets Series; Pacific Investment Management
Company serves as sub-adviser for the JNL/PIMCO Total Return Bond Series; Putnam
Investment Management, Inc. serves as sub-adviser for the JNL/Putnam Growth and
JNL/Putnam Value Equity Series; Standard & Poor's Investment Advisory Services,
Inc. serves as sub-adviser for the JNL/S&P Conservative Growth Series I, JNL/S&P
Moderate Growth Series I, JNL/S&P Aggressive Growth Series I, JNL/S&P Very
Aggressive Growth Series I, JNL/S&P Equity Growth Series I, JNL/S&P Equity
Aggressive Growth Series I, JNL/S&P Conservative Growth Series II, JNL/S&P
Moderate Growth Series II, JNL/S&P Aggressive Growth Series II, JNL/S&P Very
Aggressive Growth Series II, JNL/S&P Equity Growth Series II, and JNL/S&P Equity
Aggressive Growth Series II; Goldman Sachs Asset Management serves as
sub-adviser for the Goldman Sachs/JNL Growth & Income Series; Lazard Asset
Management serves as sub-adviser for the Lazard/JNL Small Cap Value and
Lazard/JNL Mid Cap Value 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 Balanced, Salomon Brothers/JNL Global Bond, Salomon
Brothers/JNL High Yield Bond and Salomon Brothers/JNL U.S. Government & Quality
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 JNL Aggressive Growth Series, JNL Global Equities Series,
JNL/Alger Growth Series, JNL/Alliance Growth Series, JNL/Eagle Core Equity
Series, JNL/Eagle SmallCap Equity Series, JNL/JPM International & Emerging
Markets Series, JNL/PIMCO Total Return Bond Series, JNL/Putnam Growth Series,
JNL/Putnam Value Equity Series, Goldman Sachs/JNL Growth & Income Series, PPM
America/JNL Balanced Series, PPM America/JNL High Yield Bond Series, PPM
America/JNL Money Market Series, Salomon Brothers/JNL Balanced Series, Salomon
Brothers/JNL Global Bond Series, Salomon Brothers/JNL High Yield 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 qualifies as a diversified
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act). As a fundamental policy, these Series 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). Each of the JNL Capital Growth, Lazard/JNL Small Cap
Value and Lazard/JNL Mid Cap Value Series is a non-diversified investment
company for purposes of the 1940 Act. As a fundamental policy, these 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, Lazard/JNL Small Cap Value and Lazard/JNL Mid Cap Value 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. The JNL Capital
Growth Series does not anticipate 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.
Each of the JNL/S&P Conservative Growth Series I, JNL/S&P Moderate Growth Series
I, JNL/S&P Aggressive Growth Series I, JNL/S&P Very Aggressive Growth Series I,
JNL/S&P Equity Growth Series I, JNL/S&P Equity Aggressive Growth Series I,
JNL/S&P Conservative Growth Series II, JNL/S&P Moderate Growth Series II,
JNL/S&P Aggressive Growth Series II, JNL/S&P Very Aggressive Growth Series II,
JNL/S&P Equity Growth Series II, and JNL/S&P Equity Aggressive Growth Series II
is a non-diversified investment company for purposes of the 1940 Act because it
invests in the securities of a limited number of mutual funds. 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 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.
INVESTING IN UNDERLYING SERIES
Each of the JNL/S&P Conservative Growth Series I, JNL/S&P Moderate Growth
Series I, JNL/S&P Aggressive Growth Series I, JNL/S&P Very Aggressive Growth
Series I, JNL/S&P Equity Growth Series I, JNL/S&P Equity Aggressive Growth
Series I, JNL/S&P Conservative Growth Series II, JNL/S&P Moderate Growth Series
II, JNL/S&P Aggressive Growth Series II, JNL/S&P Very Aggressive Growth Series
II, JNL/S&P Equity Growth Series II, and JNL/S&P Equity Aggressive Growth Series
II concentrates its investments in the shares of Underlying Series, so each
Series' investment performance is directly related to the investment performance
of the Underlying Series in which it is invested. The ability of each Series to
meet its investment objective is directly related to the ability of the
Underlying Series to meet their objectives as well as the allocation among those
Underlying Series. There can be no assurance that the investment objective of
any of the Series or the Underlying Series will be achieved.
As a shareholder of an Underlying Series, a Series will bear its pro rata
share of the Underlying Series expenses, which could result in duplication of
certain fees, including management and administrative fees. Although a Series
may invest in a number of Underlying Series, this investment strategy does not
eliminate investment risk. Investment decisions by the sub-advisers of the
Underlying Series are made independently of the investment decisions of Standard
& Poor's Investment Advisory Services, Inc.
JNL AGGRESSIVE GROWTH SERIES
The investment objective of the JNL Aggressive Growth Series is long-term
growth of capital. It 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 31, 1997, the MidCap Index included
companies with capitalizations between approximately $213 million and $13.7
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.
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.
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/ALLIANCE GROWTH SERIES
The investment objective of the JNL/Alliance Growth Series is to seek
long-term growth of capital. Whatever current income is generated by the Series
is incidental to the objective of capital growth. It is a diversified Series
that seeks to achieve its objective by investing primarily in common stocks or
securities with common stock characteristics. Securities designated as having
"common stock" characteristics include, but are not limited to, securities
convertible into or exchangeable for common stock. The potential for
appreciation of capital is the basis for investment decisions. The Series'
sub-adviser considers the factors that it believes affect potential for capital
appreciation, including an issuer's current and projected revenue, earnings,
cash flow and assets, as well as general market conditions.
When the outlook for common stocks is not considered promising, for
temporary defensive purposes, a substantial portion of the assets may be
invested in securities of the U.S. Government, its agencies and
instrumentalities, cash and cash equivalents (such as commercial bank and
savings association obligations, commercial paper and short-term corporate bonds
and notes) and repurchase agreements.
Because the securities purchased by this Series in pursuing its investment
objective are selected for growth potential rather than production of income,
the market values of such securities (and therefore, to a large extent, the net
asset value per share of the Series) will tend to be more volatile in response
to market changes than they would be if income-producing securities were sought
for investment by the Series. Up to 25% of the Series' total assets may be
invested in foreign securities. (See "Investment Risks -- Foreign Securities").
The Series may write covered call and put options on any securities in which
it may invest. The Series may also write call and put options on any securities
index composed of securities in which it may invest. The Series may purchase put
and call options on any securities in which it may invest or options on any
securities index composed of securities in which it may invest. The Series may
purchase and write covered options on the yield "spread," or yield differential
between two securities. Such transactions are referred to as "yield curve"
options. The Series may purchase and sell options that are traded (i) on U.S.
exchanges, (ii) on foreign exchanges and (iii) over-the-counter with
broker-dealers who make markets in these options. The Series may engage in
futures transactions and options thereon on securities, securities indices,
foreign currencies and other financial instruments and indices. The Series may
engage in futures transactions for hedging purposes or, subject to regulations
promulgated by the Commodity Futures Trading Commission, for non-hedging
purposes.
The Series may hold a portion of its assets in foreign currencies and enter
into forward foreign currency exchange contracts. The Series may also purchase
and sell exchange-traded futures contracts relating to foreign currency and
purchase and sell put and call options on currencies and futures contracts. A
significant portion of the Series' currency transactions will be
over-the-counter transactions. The Series may enter into forward foreign
currency exchange contracts to reduce the risks of fluctuations in exchange
rates. The Series may purchase and write put and call options on currencies for
the purpose of protecting against declines in the U.S. dollar value of foreign
portfolio securities and against increases in the U.S. dollar cost of foreign
securities to be acquired. The Series will not speculate in currency contracts
or options. The Series may use currency contracts and options to cross-hedge.
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:
o expected earnings-per-share growth greater than the average of the S&P 500
Composite Stock Price Index ("S&P 500"); or
o 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:
o 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
o 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
o per share going concern value (as estimated by the sub-adviser) that
exceeds book value and market value; or
o 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, foreign currency
transactions with respect to underlying common stock, preferred 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 American Depositary
Receipts. (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 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 American Depositary
Receipts, 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/JPM INTERNATIONAL & EMERGING MARKETS SERIES
The investment objective of the JNL/JPM International & Emerging Markets
Series is to provide high total return from a portfolio of equity securities of
foreign companies in developed and, to a lesser extent, developing markets.
Total return consists of realized and unrealized capital gains and losses plus
income. It is a diversified Series that seeks to achieve its investment
objective by investing primarily in common stocks and other equity securities of
non-U.S. companies in developed markets and, to a lesser extent, companies in
developing markets.
In normal circumstances, substantially all and at least 65% of the value of
the Series' total assets are invested in equity securities of foreign issuers.
Equity securities include common stocks, preferred stocks, warrants, rights,
convertible securities, trust certificates, limited partnership interests and
equity participations. The Series' assets are invested in securities of issuers
located in at least three foreign countries. The Series' equity investments may
or may not pay dividends or carry voting rights. The Series' primary equity
investments are common stocks of established companies based in developed
countries outside the United States. However, the Series will also invest in
equity securities of issuers located in developing countries or "emerging
markets." The Series invests in securities listed on foreign or domestic
securities exchanges and securities traded in foreign or domestic
over-the-counter markets, and may invest in certain restricted or unlisted
securities.
The sub-adviser considers "emerging markets" to be any country which is
generally considered to be an emerging or developing country by the World Bank,
the International Finance Corporation, the United Nations or its authorities.
The Series will focus its emerging market investments in those countries which
it believes have strongly developing economies and in which the markets are
becoming more sophisticated. An issuer in an emerging market is one that: (i)
has its principal securities trading market in an emerging market country; (ii)
is organized under the laws of an emerging market; (iii) derives 50% or more of
its total revenue from either goods produced, sales made or services performed
in emerging markets; or (iv) has at least 50% of its assets located in emerging
markets.
The Series' investments are primarily quoted in foreign currencies but it
may also invest in securities quoted in the U.S. dollar or multinational
currency units such as the ECU. Through the use of forward foreign currency
exchange contracts, the sub-adviser actively manages the Series' currency
exposure in developed countries.
The Series may also invest in money market instruments denominated in U.S.
dollars and other currencies, purchase securities on a when-issued or delayed
delivery basis, enter into repurchase and reverse repurchase agreements, loan
its portfolio securities and purchase certain privately placed securities.
The Series is permitted to invest in money market instruments denominated in
U.S. dollars and other currencies although it intends to stay invested in equity
securities to the extent practical in light of its objective. Under normal
circumstances, the Series will purchase money market instruments to invest
temporary cash balances or to maintain liquidity to meet redemptions. However,
the Series may also invest in money market instruments without limitation as a
temporary defensive measure taken in the sub-adviser's judgment during, or in
anticipation of, adverse market conditions.
The Series may purchase and sell exchange traded and over-the-counter put
and call options on securities and securities indexes, purchase and sell futures
contracts on securities and securities indexes and purchase and sell put and
call options on futures contracts on securities and securities indexes.
The Series may invest up to 10% of its total assets in shares of investment
companies and up to 5% of its total assets in any one investment company as long
as that investment does not represent more than 3% of the total voting stock of
the acquired investment company. Investments in the securities of other
investment companies may involve duplication of advisory fees and other
expenses. Certain emerging markets are closed to investment by foreigners. The
Series may be able to invest in issuers in certain emerging markets primarily
through specifically authorized investment funds.
The Series seeks to achieve its investment objective through a combination
of country allocation, stock selection and currency management. The sub-adviser
uses a disciplined portfolio construction process to seek to enhance returns and
reduce volatility in the market value of the Series. To allocate the Series
within developed and developing markets, the sub-adviser uses fundamental
research, quantitative valuation techniques and experienced judgment to identify
those countries whose equity prices appear most attractive relative to future
earnings prospects. Based on this analysis, the sub-adviser allocates the
Series' assets among countries, emphasizing those countries with the highest
expected returns consistent with overall portfolio liquidity. Under normal
circumstances, the sub-adviser expects that approximately 75% of the value of
the Series' equity investments will be in companies in developed markets and 25%
in companies in emerging markets. The sub-adviser may vary this allocation in a
manner consistent with the Series' investment objective and current market
conditions. (See "Investment Risks Foreign Securities" and "Investment Risks --
Emerging Markets").
Using a variety of quantitative valuation techniques and based on analysts'
industry expertise, issuers in each country are ranked within industrial sectors
according to their relative value. Based on this valuation, the sub-adviser
selects the issuers which appear the most attractive for the Series. The Series
will be diversified across industrial sectors in each country.
The sub-adviser manages the Series actively in pursuit of its investment
objective. The Series does not expect to trade in securities for short-term
profits; however, when circumstances warrant, securities may be sold without
regard to the length of time held. To the extent the Series engages in
short-term trading, it may incur increased transaction costs.
JNL/PIMCO TOTAL RETURN BOND SERIES
The investment objective of the JNL/PIMCO Total Return Bond Series is to
seek to realize maximum total return, consistent with preservation of capital
and prudent investment management. It is a diversified Series that seeks to
achieve its investment objective by investing under normal circumstances at
least 65% of its assets in a diversified portfolio of fixed income securities of
varying maturities. The average portfolio duration of this Series will normally
vary within a three- to six-year time frame based on the sub-adviser's forecast
for interest rates. The Series may invest up to 10% of its assets in fixed
income securities that are rated below investment grade but rated B or higher by
Moody's or S&P (or, if unrated, determined by the sub-adviser to be of
comparable quality). The Series may also invest up to 20% of its assets in
securities denominated in foreign currencies, and may invest beyond this limit
in U.S. dollar-denominated securities of foreign issuers. The Series will
concentrate its foreign investments in securities of issuers based in developed
countries, but may invest up to 10% of its assets in securities of issuers based
in emerging market countries. Portfolio holdings will be concentrated in areas
of the bond market (based on quality, sector, coupon or maturity) which the
sub-adviser believes to be relatively undervalued. (See "Investment Risks
Foreign Securities" and "Investment Risks -- Emerging Markets").
The Series may invest in convertible securities. It may invest in fixed- and
floating-rate loans arranged through private negotiations between an issuer of
debt instruments and one or more financial institutions. Generally, the Series'
investments in loans are expected to take the form of loan participations and
assignments of portions of loans from third parties. The Series may engage in
credit spread trades and invest in floating rate debt instruments. The Series
may also invest in inverse floating rate debt instruments. The Series will not
invest more than 5% of its net assets in any combination of inverse floater,
interest only, or principal only securities. The Series may invest all of its
assets in mortgage- or other asset-backed securities. The Series may invest in
repurchase agreements, reverse repurchase agreements, dollar rolls and may
purchase or sell securities on a when-issued, delayed delivery, or forward
commitment basis.
The Series may invest in Brady Bonds and may invest in sovereign debt (other
than Brady Bonds) issued by governments, their agencies or instrumentalities, or
other government-related entities located in emerging market countries. The
Series may buy and sell foreign currencies on a spot and forward basis to reduce
the risks of adverse changes in foreign exchange rates.
The Series may invest in options on foreign currencies and foreign currency
futures and options thereon. The Series also may invest in foreign currency
exchange-related securities, such as foreign currency warrants and other
instruments whose return is linked to foreign currency exchange rates. The
Series will use these techniques to hedge at least 75% of its exposure to
foreign currency.
The Series may purchase and write call and put options on securities,
securities indexes and foreign currencies, and enter into futures contracts and
use options on futures contracts. The Series also may enter into swap agreements
with respect to foreign currencies, interest rates, and securities indexes. The
Series may use these techniques to hedge against changes in interest rates,
foreign currency exchange rates or securities prices or as part of its overall
investment strategies. The Series may also purchase and sell options relating to
foreign currencies for purposes of increasing exposure to a foreign currency or
to shift exposure to foreign currency fluctuations from one country to another.
The Series will not enter into a swap agreement with any single party if the net
amount owed or to be received under existing contracts with that party would
exceed 5% of the Series' assets.
The Series does not expect to trade in securities for short-term profits;
however, when circumstances warrant, securities may be sold without regard to
the length of time held. To the extent the Series engages in short- term
trading, it may incur increased transaction costs.
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.
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.
JNL/S&P CONSERVATIVE GROWTH SERIES I
The investment objective of the JNL/S&P Conservative Growth Series I is to
seek capital growth and current income. In pursuit of this objective, the Series
invests in a diversified group of Series of the JNL Series Trust ("Underlying
Series"). The Underlying Series in which the JNL/S&P Conservative Growth Series
I may invest are 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/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, and T. Rowe Price/JNL Mid-Cap Growth Series.
Under normal circumstances, the Series allocates approximately 55% to 65% of
its assets to Underlying Series that invest primarily in equity securities, 30%
to 40% to Underlying Series that invest primarily in fixed- income securities
and 0% to 10% to Underlying Series that invest primarily in money market funds.
Within these three asset classes, the Series remains flexible with respect to
the percentage it will allocate among particular Underlying Series. When the
sub-adviser believes that a temporary defensive position is desirable, the
Series may invest up to 100% of its assets in cash or cash equivalents.
The Series seeks to achieve capital growth through its investments in
Underlying Series that invest primarily in equity securities. Such investments
may include Series that invest in stocks of large established companies as well
as those that invest in stocks of smaller companies with above-average growth
potential.
The Series seeks to achieve current income through its investment in
Underlying Series that invest primarily in fixed-income securities. Such
investments may include Underlying Series that invest in foreign bonds
denominated in currencies other than U.S. dollars as well as Underlying Series
that invest exclusively in bonds of U.S. issuers. The Series may invest in
Underlying Series that invest exclusively in investment-grade securities, as
well as Underlying Series that invest in high-yield bonds.
The allocation of assets in the Series is expected to result in less risk
than that incurred by JNL/S&P Moderate Growth Series I, JNL/S&P Aggressive
Growth Series I, JNL/S&P Very Aggressive Growth Series I, JNL/S&P Equity Growth
Series I or JNL/S&P Equity Aggressive Growth Series I.
JNL/S&P MODERATE GROWTH SERIES I
The investment objective of the JNL/S&P Moderate Growth Series I is to seek
capital growth. Current income is a secondary objective. In pursuit of these
objectives, the Series invests in a diversified group of Series of the JNL
Series Trust ("Underlying Series"). The Underlying Series in which the JNL/S&P
Moderate Growth Series I may invest are 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/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, and T. Rowe Price/JNL Mid-Cap
Growth Series.
Under normal circumstances, the Series allocates approximately 70% to 80% of
its assets to Underlying Series that invest primarily in equity securities and
20% to 30% to Underlying Series that invest primarily in fixed-income
securities. Within these asset classes, the Series remains flexible with respect
to the percentage it will allocate among particular Underlying Series. When the
sub-adviser believes that a temporary defensive position is desirable, the
Series may invest up to 100% of its assets in cash or cash equivalents.
The Series seeks to achieve capital growth through its investments in
Underlying Series that invest primarily in equity securities. Such investments
may include Underlying Series that invest in stocks of large established
companies as well as those that invest in stocks of smaller companies with
above-average growth potential.
The Series seeks to achieve current income through its investment in
Underlying Series that invest primarily in fixed-income securities. Such
investments may include Underlying Series that invest in foreign bonds
denominated in currencies other than U.S. dollars as well as Underlying Series
that invest exclusively in bonds of U.S. issuers. The Series may invest in
Underlying Series that invest exclusively in investment-grade securities, as
well as Underlying Series that invest in high-yield bonds.
The allocation of assets in the Series is expected to result in less risk
than that incurred by JNL/S&P Aggressive Growth Series I, JNL/S&P Very
Aggressive Growth Series I, JNL/S&P Equity Growth Series I or JNL/S&P Equity
Aggressive Growth Series I, but more risk than JNL/S&P Conservative Growth
Series I.
JNL/S&P AGGRESSIVE GROWTH SERIES I
The primary investment objective of the JNL/S&P Aggressive Growth Series I
is to seek capital growth. In pursuit of this objective, the Series invests in a
diversified group of Series of the JNL Series Trust ("Underlying Series"). The
Underlying Series in which the JNL/S&P Aggressive Growth Series I may invest are
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/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, and T. Rowe Price/JNL Mid-Cap Growth Series.
Under normal circumstances, the Series allocates approximately 85% to 95% of
its assets to Underlying Series that invest primarily in equity securities and
5% to 15% to Underlying Series that invest primarily in fixed-income securities.
Within these asset classes, the Series remains flexible with respect to the
percentage it will allocate among particular Underlying Series. When the
sub-adviser believes that a temporary defensive position is desirable, the
Series may invest up to 100% of its assets in cash or cash equivalents.
The Series seeks to achieve capital growth primarily through its investments
in Underlying Series that invest primarily in equity securities. Such
investments may include Underlying Series that invest in stocks of large
established companies as well as those that invest in stocks of smaller
companies with above-average growth potential.
The Series seeks to achieve capital growth secondarily through its
investment in Underlying Series that invest primarily in fixed-income
securities. Such investments may include Underlying Series that invest in
foreign bonds denominated in currencies other than U.S. dollars as well as
Underlying Series that invest exclusively in bonds of U.S. issuers. The Series
may invest in Underlying Series that invest exclusively in investment-grade
securities, as well as Underlying Series that invest in high-yield bonds.
The allocation of assets in the Series is expected to result in less risk
than that incurred by JNL/S&P Very Aggressive Growth Series I, JNL/S&P Equity
Growth Series I or JNL/S&P Equity Aggressive Growth Series I, but more risk than
JNL/S&P Conservative Growth Series I or JNL/S&P Moderate Growth Series I.
JNL/S&P VERY AGGRESSIVE GROWTH SERIES I
The investment objective of the JNL/S&P Very Aggressive Growth Series I is
to seek capital growth. In pursuit of this objective, the Series invests in a
diversified group of Series of the JNL Series Trust ("Underlying Series"). The
Underlying Series in which the JNL/S&P Very Aggressive Growth Series I may
invest are 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/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, and T. Rowe Price/JNL Mid-Cap Growth Series.
Under normal circumstances, the Series allocates up to 100% of its assets to
Underlying Series that invest primarily in equity securities. The Series remains
flexible with respect to the percentage it will allocate among particular
Underlying Series. When the sub-adviser believes that a temporary defensive
position is desirable, the Series may invest up to 100% of its assets in cash or
cash equivalents.
The Series seeks to achieve capital growth through its investments in
Underlying Series that invest primarily in equity securities. Such investments
may include Underlying Series that invest in stocks of large established
companies as well as those that invest in stocks of smaller companies with
above-average growth potential.
The allocation of assets in the Series is expected to result in more risk
than that incurred by JNL/S&P Conservative Growth Series I, JNL/S&P Moderate
Growth Series I, JNL/S&P Aggressive Growth Series I, JNL/S&P Equity Growth
Series I or JNL/ S&P Equity Aggressive Growth Series I.
JNL/S&P EQUITY GROWTH SERIES I
The investment objective of the JNL/S&P Equity Growth Series I is to seek
capital growth. In pursuit of this objective, the Series invests in a
diversified group of Series of the JNL Series Trust ("Underlying Series"). The
Underlying Series in which the JNL/S&P Equity Growth Series I may invest are 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/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, and T. Rowe Price/JNL Mid-Cap Growth Series.
Under normal circumstances, the Series allocates 100% of its assets to
Underlying Series that invest primarily in equity securities. The Series remains
flexible with respect to the percentage it will allocate among particular
Underlying Series. When the sub-adviser believes that a temporary defensive
position is desirable, the Series may invest up to 100% of its assets in cash or
cash equivalents.
The Series invests in Underlying Series that invest primarily in equity
securities. Such investments may include Underlying Series that invest in stocks
of large established companies as well as those that invest in stocks of smaller
companies with above-average growth potential.
The allocation of assets in the Series is expected to result in more risk
than that incurred by JNL/S&P Conservative Growth Series I, JNL/S&P Moderate
Growth Series I and JNL/S&P Aggressive Growth Series I, but less risk than
JNL/S&P Equity Aggressive Growth Series I or JNL/S&P Very Aggressive Growth
Series I.
JNL/S&P EQUITY AGGRESSIVE GROWTH SERIES I
The investment objective of the JNL/S&P Equity Aggressive Growth Series I is
to seek capital growth. In pursuit of this objective, the Series invests in a
diversified group of Series of the JNL Series Trust ("Underlying Series"). The
Underlying Series in which the JNL/S&P Equity Aggressive Growth Series I may
invest are 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/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, and T. Rowe Price/JNL Mid-Cap Growth Series.
Under normal circumstances, the Series allocates 100% of its assets to
Underlying Series that invest primarily in equity securities. The Series remains
flexible with respect to the percentage it will allocate among particular
Underlying Series. When the sub-adviser believes that a temporary defensive
position is desirable, the Series may invest up to 100% of its assets in cash or
cash equivalents.
The Series invests in Underlying Series that invest primarily in equity
securities. Such investments may include Underlying Series that invest in stocks
of large established companies as well as those that invest in stock of smaller
companies with above-average growth potential.
The allocation of assets in the Series is expected to result in more risk
than that incurred by JNL/S&P Conservative Growth Series I, JNL/S&P Moderate
Growth Series I, JNL/S&P Aggressive Growth Series I or JNL/S&P Equity Growth
Series I, but less risk than JNL/S&P Very Aggressive Growth Series I.
JNL/S&P CONSERVATIVE GROWTH SERIES II
The investment objective of the JNL/S&P Conservative Growth Series II is to
seek capital growth and current income. In pursuit of this objective, the Series
invests in a diversified group of Series of the JNL Series Trust ("Underlying
Series"). The Underlying Series in which the JNL/S&P Conservative Growth Series
II may invest are the JNL Aggressive Growth Series, JNL Global Equities Series,
JNL/Alliance Growth Series, JNL/JPM International & Emerging Markets Series,
JNL/PIMCO Total Return Bond Series, JNL/Putnam Growth Series, JNL/Putnam Value
Equity Series, Goldman Sachs/JNL Growth & Income Series, Lazard/ JNL Small Cap
Value Series, Lazard/JNL Mid Cap Value Series, PPM America/JNL Money Market
Series, Salomon Brothers/JNL Balanced Series, Salomon Brothers/JNL Global Bond
Series, Salomon Brothers/ JNL High Yield Bond Series, T. Rowe Price/JNL
International Equity Investment Series, and T. Rowe Price/JNL Mid-Cap Growth
Series.
Under normal circumstances, the Series allocates approximately 60% to 70% of
its assets to Underlying Series that invest primarily in equity securities and
30% to 40% to Underlying Series that invest primarily in fixed-income
securities. Within these asset classes, the Series remains flexible with respect
to the percentage it will allocate among particular Underlying Series. When the
sub-adviser believes that a temporary defensive position is desirable, the
Series may invest up to 100% of its assets in cash or cash equivalents.
The Series seeks to achieve capital growth through its investments in
Underlying Series that invest primarily in equity securities. Such investments
may include Underlying Series that invest in stocks of large established
companies as well as those that invest in stocks of smaller companies with
above-average growth potential.
The Series seeks to achieve current income through its investment in
Underlying Series that invest primarily in fixed-income securities. Such
investments may include Underlying Series that invest in foreign bonds
denominated in currencies other than U.S. dollars as well as Underlying Series
that invest exclusively in bonds of U.S. issuers. The Series may invest in
Underlying Series that invest exclusively in investment-grade securities, as
well as Underlying Series that invest in high-yield bonds.
The allocation of assets in the Series is expected to result in less risk
than that incurred by JNL/S&P Moderate Growth Series II, JNL/S&P Aggressive
Growth Series II, JNL/S&P Very Aggressive Growth Series II, JNL/S&P Equity
Growth Series II or JNL/S&P Equity Aggressive Growth Series II.
JNL/S&P MODERATE GROWTH SERIES II
The investment objective of the JNL/S&P Moderate Growth Series II is to seek
capital growth. Current income is a secondary objective. In pursuit of these
objectives, the Series invests in a diversified group of Series of the JNL
Series Trust ("Underlying Series"). The Underlying Series in which the JNL/S&P
Moderate Growth Series II may invest are the JNL Aggressive Growth Series, JNL
Global Equities Series, JNL/Alliance Growth Series, JNL/JPM International &
Emerging Markets Series, JNL/PIMCO Total Return Bond Series, JNL/Putnam Growth
Series, JNL/Putnam Value Equity Series, Goldman Sachs/ JNL Growth & Income
Series, Lazard/JNL Small Cap Value Series, Lazard/JNL Mid Cap Value Series, PPM
America/JNL Money Market Series, Salomon Brothers/JNL Balanced Series, Salomon
Brothers/ JNL Global Bond Series, Salomon Brothers/JNL High Yield Bond Series,
T. Rowe Price/JNL International Equity Investment Series, and T. Rowe Price/JNL
Mid-Cap Growth Series.
Under normal circumstances, the Series allocates approximately 70% to 80% of
its assets to Underlying Series that invest primarily in equity securities and
20% to 30% to Underlying Series that invest primarily in fixed-income
securities. Within these asset classes, the Series remains flexible with respect
to the percentage it will allocate among particular Underlying Series. When the
sub-adviser believes that a temporary defensive position is desirable, the
Series may invest up to 100% of its assets in cash or cash equivalents.
The Series seeks to achieve capital growth through its investments in
Underlying Series that invest primarily in equity securities. Such investments
may include Underlying Series that invest in stocks of large established
companies as well as those that invest in stocks of smaller companies with
above-average growth potential.
The Series seeks to achieve current income through its investment in
Underlying Series that invest primarily in fixed-income securities. Such
investments may include Underlying Series that invest in foreign bonds
denominated in currencies other than U.S. dollars as well as Underlying Series
that invest exclusively in bonds of U.S. issuers. The Series may invest in
Underlying Series that invest exclusively in investment-grade securities, as
well as Underlying Series that invest in high-yield bonds.
The allocation of assets in the Series is expected to result in less risk
than that incurred by JNL/S&P Aggressive Growth Series II, JNL/S&P Very
Aggressive Growth Series II, JNL/S&P Equity Growth Series II or JNL/S&P Equity
Aggressive Growth Series II, but more risk than JNL/S&P Conservative Growth
Series II.
JNL/S&P AGGRESSIVE GROWTH SERIES II
The primary investment objective of the JNL/S&P Aggressive Growth Series II
is to seek capital growth. In pursuit of this objective, the Series invests in a
diversified group of Series of the JNL Series Trust ("Underlying Series"). The
Underlying Series in which the JNL/S&P Aggressive Growth Series II may invest
are the JNL Aggressive Growth Series, JNL Global Equities Series, JNL/Alliance
Growth Series, JNL/JPM International & Emerging Markets Series, JNL/PIMCO Total
Return Bond Series, JNL/Putnam Growth Series, JNL/Putnam Value Equity Series,
Goldman Sachs/JNL Growth & Income Series, Lazard/ JNL Small Cap Value Series,
Lazard/JNL Mid Cap Value Series, PPM America/JNL Money Market Series, Salomon
Brothers/JNL Balanced Series, Salomon Brothers/JNL Global Bond Series, Salomon
Brothers/ JNL High Yield Bond Series, T. Rowe Price/JNL International Equity
Investment Series, and T. Rowe Price/ JNL Mid-Cap Growth Series.
Under normal circumstances, the Series allocates approximately 85% to 95% of
its assets to Underlying Series that invest primarily in equity securities and
5% to 15% to Underlying Series that invest primarily in fixed-income securities.
Within these asset classes, the Series remains flexible with respect to the
percentage it will allocate among particular Underlying Series. When the
sub-adviser believes that a temporary defensive position is desirable, the
Series may invest up to 100% of its assets in cash or cash equivalents.
The Series seeks to achieve capital growth primarily through its investments
in Underlying Series that invest primarily in equity securities. Such
investments may include Underlying Series that invest in stocks of large
established companies as well as those that invest in stocks of smaller
companies with above-average growth potential.
The Series seeks to achieve capital growth secondarily through its
investment in Underlying Series that invest primarily in fixed-income
securities. Such investments may include Underlying Series that invest in
foreign bonds denominated in currencies other than U.S. dollars as well as
Underlying Series that invest exclusively in bonds of U.S. issuers. The Series
may invest in Underlying Series that invest exclusively in investment-grade
securities, as well as Underlying Series that invest in high-yield bonds.
The allocation of assets in the Series is expected to result in less risk
than that incurred by JNL/S&P Very Aggressive Growth Series II, JNL/S&P Equity
Growth Series II or JNL/S&P Equity Aggressive Growth Series II, but more risk
than JNL/S&P Conservative Growth Series II or JNL/S&P Moderate Growth Series II.
JNL/S&P VERY AGGRESSIVE GROWTH SERIES II
The investment objective of the JNL/S&P Very Aggressive Growth Series II is
to seek capital growth. In pursuit of this objective, the Series invests in a
diversified group of Series of the JNL Series Trust ("Underlying Series"). The
Underlying Series in which the JNL/S&P Very Aggressive Growth Series II may
invest are the JNL Aggressive Growth Series, JNL Global Equities Series,
JNL/Alliance Growth Series, JNL/JPM International & Emerging Markets Series,
JNL/PIMCO Total Return Bond Series, JNL/Putnam Growth Series, JNL/Putnam Value
Equity Series, Goldman Sachs/JNL Growth & Income Series, Lazard/JNL Small Cap
Value Series, Lazard/JNL Mid Cap Value Series, PPM America/JNL Money Market
Series, Salomon Brothers/JNL Balanced Series, Salomon Brothers/JNL Global Bond
Series, Salomon Brothers/JNL High Yield Bond Series, T. Rowe Price/JNL
International Equity Investment Series, and T. Rowe Price/JNL Mid-Cap Growth
Series.
Under normal circumstances, the Series allocates up to 100% of its assets to
Underlying Series that invest primarily in equity securities. The Series remains
flexible with respect to the percentage it will allocate among particular
Underlying Series. When the sub-adviser believes that a temporary defensive
position is desirable, the Series may invest up to 100% of its assets in cash or
cash equivalents.
The Series seeks to achieve capital growth through its investments in
Underlying Series that invest primarily in equity securities. Such investments
may include Underlying Series that invest in stocks of large established
companies as well as those that invest in stocks of smaller companies with
above-average growth potential.
The allocation of assets in the Series is expected to result in more risk
than that incurred by JNL/S&P Conservative Growth Series II, JNL/S&P Moderate
Growth Series II, JNL/S&P Aggressive Growth Series II, JNL/S&P Equity Growth
Series II or JNL/S&P Equity Aggressive Growth Series II.
JNL/S&P EQUITY GROWTH SERIES II
The investment objective of the JNL/S&P Equity Growth Series II is to seek
capital growth. In pursuit of this objective, the Series invests in a
diversified group of Series of the JNL Series Trust ("Underlying Series"). The
Underlying Series in which the JNL/S&P Equity Growth Series II may invest are
the JNL Aggressive Growth Series, JNL Global Equities Series, JNL/Alliance
Growth Series, JNL/JPM International & Emerging Markets Series, JNL/PIMCO Total
Return Bond Series, JNL/Putnam Growth Series, JNL/Putnam Value Equity Series,
Goldman Sachs/JNL Growth & Income Series, Lazard/JNL Small Cap Value Series,
Lazard/JNL Mid Cap Value Series, PPM America/JNL Money Market Series, Salomon
Brothers/JNL Balanced Series, Salomon Brothers/JNL Global Bond Series, Salomon
Brothers/JNL High Yield Bond Series, T. Rowe Price/JNL International Equity
Investment Series, and T. Rowe Price/JNL Mid-Cap Growth Series.
Under normal circumstances, the Series allocates 100% of its assets to
Underlying Series that invest primarily in equity securities. The Series remains
flexible with respect to the percentage it will allocate among particular
Underlying Series. When the sub-adviser believes that a temporary defensive
position is desirable, the Series may invest up to 100% of its assets in cash or
cash equivalents.
The Series invests in Underlying Series that invest primarily in equity
securities. Such investments may include Underlying Series that invest in stocks
of large established companies as well as those that invest in stocks of smaller
companies with above-average growth potential.
The allocation of assets in the Series is expected to result in more risk
than that incurred by JNL/S&P Conservative Growth Series II, JNL/S&P Moderate
Growth Series II and JNL/S&P Aggressive Growth Series II, but less risk than
JNL/S&P Equity Aggressive Growth Series II or JNL/S&P Very Aggressive Growth
Series II.
JNL/S&P EQUITY AGGRESSIVE GROWTH SERIES II
The investment objective of the JNL/S&P Equity Aggressive Growth Series II
is to seek capital growth. In pursuit of this objective, the Series invests in a
diversified group of Series of the JNL Series Trust ("Underlying Series"). The
Underlying Series in which the JNL/S&P Equity Aggressive Growth Series II may
invest are the JNL Aggressive Growth Series, JNL Global Equities Series,
JNL/Alliance Growth Series, JNL/JPM International & Emerging Markets Series,
JNL/PIMCO Total Return Bond Series, JNL/Putnam Growth Series, JNL/Putnam Value
Equity Series, Goldman Sachs/JNL Growth & Income Series, Lazard/JNL Small Cap
Value Series, Lazard/ JNL Mid Cap Value Series, PPM America/JNL Money Market
Series, Salomon Brothers/JNL Balanced Series, Salomon Brothers/JNL Global Bond
Series, Salomon Brothers/JNL High Yield Bond Series, T. Rowe Price/JNL
International Equity Investment Series, and T. Rowe Price/JNL Mid-Cap Growth
Series.
Under normal circumstances, the Series allocates 100% of its assets to
Underlying Series that invest primarily in equity securities. The Series remains
flexible with respect to the percentage it will allocate among particular
Underlying Series. When the sub-adviser believes that a temporary defensive
position is desirable, the Series may invest up to 100% of its assets in cash or
cash equivalents.
The Series invests in Underlying Series that invest primarily in equity
securities. Such investments may include Underlying Series that invest in stocks
of large established companies as well as those that invest in stocks of smaller
companies with above-average growth potential.
The allocation of assets in the Series is expected to result in more risk
than that incurred by JNL/S&P Conservative Growth Series II, JNL/S&P Moderate
Growth Series I, JNL/S&P Aggressive Growth Series II or JNL/S&P Equity Growth
Series I, but less risk than JNL/S&P Very Aggressive Growth Series II.
GOLDMAN SACHS/JNL GROWTH & INCOME SERIES
The investment objectives of the Goldman Sachs/JNL Growth & Income Series
are to provide investors with long-term growth of capital and growth of income.
It is a diversified Series that invests, under normal circumstances, at least
65% of its total assets in equity securities that the sub-adviser considers to
have favorable prospects for capital appreciation and/or dividend-paying
ability.
The Series may invest up to 35% of its total assets in fixed income
securities that, in the opinion of the sub-adviser, offer the potential to
further the Series' investment objectives. In addition, although the Series will
invest primarily in publicly traded U.S. securities, it may invest up to 25% of
its total assets in foreign securities, including securities of issuers in
emerging markets and countries and securities quoted in foreign currencies. (See
"Investment Risks -- Foreign Securities" and "Investment Risks -- Emerging
Markets").
The Series is managed using a value oriented approach. The sub-adviser
evaluates securities using fundamental analysis and intends to purchase equity
securities that are, in its view, underpriced relative to a combination of such
companies' long-term earnings prospects, growth rate, free cash flow and/or
dividend-paying ability. Consideration will be given to the business quality of
the issuer. Factors positively affecting the sub-adviser's view of that quality
include the competitiveness and degree of regulation in the markets in which the
company operates, the existence of a management team with a record of success,
the position of the company in the markets in which it operates, the level of
the company's financial leverage and the sustainable return on capital invested
in the business. The Series may also purchase securities of companies that have
experienced difficulties and that, in the opinion of the sub-adviser, are
available at attractive prices.
In choosing the Series' securities, the sub-adviser utilizes first-hand
fundamental research, including visiting company facilities to assess operations
and to meet decision-makers. The sub-adviser may also use macro analysis of
numerous economic and valuation variables to anticipate changes in company
earnings and the overall investment climate. The sub-adviser is able to draw on
the research and market expertise of its affiliates as well as information
provided by other securities dealers. Equity securities in the Series' portfolio
will generally be sold when the sub-adviser believes that the market price fully
reflects or exceeds the securities' fundamental valuation or when other more
attractive investments are identified.
The Series may invest in common stocks, preferred stocks, U.S. Government
securities, convertible debt obligations, convertible preferred stocks,
mortgage- and asset-backed securities, corporate debt obligations, structured
securities, limited liability companies, equity interests in trusts,
partnerships, joint ventures and similar enterprises, interests in real estate
investment trusts, warrants and stock purchase rights. The Series may purchase
when-issued securities and may purchase securities on a forward commitment
basis.
The Series may invest in securities of foreign issuers, including sponsored
and unsponsored American Depositary Receipts, Global Depositary Receipts and
European Depositary Receipts or other similar instruments representing
securities of foreign issuers. The Series may, to the extent it invests in
foreign securities, purchase or sell forward foreign currency exchange contracts
for hedging purposes and to seek to protect against anticipated changes in
future foreign currency exchange rates. The Series may hold foreign currency
received in connection with investments in foreign securities when, in the
judgment of the sub-adviser, it would be beneficial to convert such currency
into U.S. dollars at a later date, based on anticipated changes in the relevant
exchange rate.
The Series may invest in debt securities rated at least investment grade at
the time of investment and may invest up to 10% of its total assets in debt
securities which are unrated or rated in the lowest rating categories by S&P or
Moody's, including securities rated D by S&P or Moody's. The lower-rated bonds
in which the Series may invest are commonly referred to as "junk bonds." (See
"Investment Risks -- High Yield/High Risk Bonds").
The Series may write (sell) covered call and put options and purchase call
and put options on any securities in which it may invest or on any securities
index composed of securities in which it may invest. The Series may, to the
extent it invests in foreign securities, purchase and sell call and put options
on foreign currencies for the purpose of protecting against declines in the U.S.
dollar value of foreign portfolio securities and anticipated dividends on such
securities and against increases in the U.S. dollar cost of foreign securities
to be acquired. The Series may purchase and sell various kinds of futures
contracts, and purchase and write call and put options on any of such futures
contracts to seek to increase total return or to hedge against changes in
interest rates, securities prices or currency exchange rates. The Series may
also enter into closing purchase and sale transactions with respect to any such
contracts and options. The futures contracts may be based on various securities,
foreign currencies, securities indices and other financial instruments and
indices.
The Series may, for temporary defensive purposes, invest up to 100% of its
total assets in U.S. Government securities, repurchase agreements collateralized
by U.S. Government securities, commercial paper rated at least A-2 by S&P or P-2
by Moody's, certificates of deposit, bankers' acceptances, repurchase
agreements, non-convertible preferred stocks, non-convertible corporate bonds
with a remaining maturity of less than one year or, subject to certain tax
restrictions, foreign currencies. When the Series' assets are invested in such
instruments, the Series may not be achieving its investment objective.
LAZARD/JNL SMALL CAP VALUE SERIES
The investment objective of the Lazard/JNL Small Cap Value Series is to seek
capital appreciation. It is a non-diversified Series that seeks to achieve its
investment objective through investing primarily in equity securities of United
States companies with market capitalizations under $1 billion that are believed
by the sub-adviser to be inexpensively priced relative to the return on total
capital or equity. The equity securities in which the Series may invest include
common stocks, preferred stocks, securities convertible into or exchangeable for
common stocks, rights and warrants listed on national or regional securities
exchanges or traded over-the-counter, real estate investment trusts and American
and Global Depositary Receipts. Investments are generally made in equity
securities of companies which in the sub-adviser's opinion have one or more of
the following characteristics: (i) are undervalued relative to their earnings
power, cash flow, and/or asset values; (ii) have an attractive price/value
relationship, i.e. have high returns on equity and/or assets with
correspondingly low price-to-book and/or price-to-asset value as compared to the
market generally or the companies' industry groups in particular, with
expectations that some catalyst will cause the perception of value to change
within a 24-month time horizon; (iii) have experienced significant relative
underperformance and are out of favor due to a set of circumstances which are
unlikely to harm a company's franchise or earnings power over the longer term;
(iv) have low projected price-to-earnings or price-to-cash-flow multiples
relative to their industry peer group and/or the market in general; (v) have the
prospect, or the industry in which the company operates has the prospect, to
allow it to become a larger factor in the business and receive a higher
valuation as such; (vi) have significant financial leverage but have high levels
of free cash flow used to reduce leverage and enhance shareholder value; and
(vii) have a relatively short corporate history with the expectation that the
business may grow to generate meaningful cash flow and earnings over a
reasonable investment horizon.
Under normal market conditions, the Series will invest at least 80% of the
value of its total assets in the small capitalization equity securities
described above.
The sub-adviser believes that the issuers of small capitalization stocks
often have sales and earnings growth rates which exceed those of larger
companies, and that such growth rates may in turn be reflected in more rapid
share price appreciation, however, investing in smaller capitalization stocks
can involve greater risk than is customarily associated with larger, more
established companies. For example, smaller capitalization companies often have
limited product lines, markets or financial resources. They may be dependent for
management on one or a few key persons, and can be more susceptible to losses
and risks of bankruptcy. Also, securities in the small capitalization sector may
be thinly traded (and therefore have to be sold at a discount from current
market prices or sold in small lots over an extended period of time), may be
followed by fewer investment research analysts and may be subject to wider price
swings and thus may create a greater chance of loss than investing in securities
of large capitalization companies.
The sub-adviser continually evaluates the securities owned by the Series,
and changes may be made whenever the sub-adviser determines such securities no
longer meet the Series' investment objective. Portfolio changes also may be made
to increase or decrease investments in anticipation of changes in securities
prices in general or to provide funds required for redemptions, distributions to
shareholders or other corporate purposes.
The Series may at any time invest funds awaiting investment or held as
reserves for the purposes of satisfying redemption requests, payment of
dividends or making other distributions, in cash and short-term money market
instruments; provided, however, that such investments will not ordinarily exceed
5% of the total assets of the Series. The Series may purchase floating and
variable rate obligations of the same quality as it otherwise is allowed to
purchase. The Series may purchase securities on a when-issued basis. The Series
may invest in securities of companies that have operated for less than three
years, including the operations of predecessors. It will not make investments
that will result in more than 10% of its total assets being invested in the
securities of unseasoned companies. The Series may invest in warrants.
In addition, the Series may engage in various investment techniques, such as
options and futures transactions, foreign currency transactions, leveraging,
short-selling and lending portfolio securities.
When, in the judgment of the sub-adviser, business or financial conditions
warrant, the Series may assume a temporary defensive position and invest without
limitation in large capitalization companies or short-term money market
instruments or hold its assets in cash.
LAZARD/JNL MID CAP VALUE SERIES
The investment objective of the Lazard/JNL Mid Cap Value Series is to seek
capital appreciation. It is a non-diversified Series that seeks to achieve its
investment objective by investing primarily in equity securities of United
States companies with market capitalizations in the range of companies
represented in the Russell Midcap Index that the sub-adviser considers
inexpensively priced relative to the return on total capital or equity. Market
capitalization of a company's stock is its market price per share times the
number of shares outstanding. The Russell Midcap Index is composed of the 800
smallest companies in the Russell 1000 Index. As of the latest reconstitution,
the Russell Midcap Index had a dollar-weighted average market capitalization of
approximately $4.8 billion and a median capitalization of approximately $2.7
billion. The equity securities in which the Series may invest include common
stocks, preferred stocks, securities convertible into or exchangeable for common
stocks, rights and warrants, real estate investment trusts and American and
Global Depositary Receipts.
Under normal market conditions, the Series will invest at least 80% of the
value of its total assets in the equity securities of undervalued medium
capitalization issuers. Assets not invested in such equity securities generally
will be invested in the equity securities of larger capitalization issuers or
debt securities, including cash equivalents. The Series also may invest up to
15% of its total assets in foreign equity or debt securities.
When, in the sub-adviser's judgment, business or financial conditions
warrant, the Series may assume a temporary defensive position and invest without
limitation in large capitalization companies or short-term money market
instruments.
In addition, the Series may engage in various investment techniques, such as
options and futures transactions, foreign currency transactions, leveraging,
short-selling and lending portfolio securities.
PPM AMERICA/JNL BALANCED SERIES
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 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").
PPM AMERICA/JNL HIGH YIELD BOND SERIES
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.
PPM AMERICA/JNL MONEY MARKET SERIES
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:
o Obligations issued or guaranteed as to principal and interest by the
U.S. Government, its agencies and instrumentalities.
o 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.
o Corporate obligations, including commercial paper, of domestic and
foreign issuers.
o Obligations issued or guaranteed by one or more foreign governments or
any of their political subdivisions, agencies or instrumentalities,
including obligations of supranational entities.
o 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.
SALOMON BROTHERS/JNL BALANCED SERIES
The investment objective of the Salomon Brothers/JNL Balanced Series is to
seek to obtain above-average income (compared to a portfolio entirely invested
in equity securities). The Series' secondary objective is to take advantage of
opportunities for growth of capital and income. It is a diversified Series that
seeks to achieve its investment objectives by investing in a broad variety of
securities, including equity securities, fixed-income securities and short-term
obligations. The Series may vary the percentage of assets invested in any one
type of security in accordance with the sub-adviser's view of existing and
anticipated economic and market conditions, fiscal and monetary policy and
underlying security values. Under normal market conditions, it is anticipated
that at least 40% of the Series' total assets will be invested in equity
securities.
Equity securities in which the Series may invest include common and
preferred stock (including convertible preferred stock), bonds, notes and
debentures convertible into common or preferred stock, stock purchase warrants
and rights, equity interests in trusts, partnerships, joint ventures or similar
enterprises and American, Global or other types of Depositary Receipts. Most of
the equity securities purchased by the Series are expected to be traded on a
stock exchange or in an over-the-counter market.
The sub-adviser will have discretion to invest in the full range of
maturities of fixed-income securities. Generally, most of the Series' long-term
debt investments will consist of "investment grade" securities; that is,
securities rated Baa or better by Moody's or BBB or better by S&P or Fitch or
determined by the sub-adviser to be of comparable quality to securities so
rated. Up to 20% of the Series' net assets may be invested in nonconvertible
fixed income securities that are rated Ba or lower by Moody's or BB or lower by
S&P or Fitch or determined by the sub-adviser to be of comparable quality. These
securities are commonly known as "junk bonds." There is no limit on the amount
of the Series' assets that can be invested in convertible securities rated below
investment grade. (See "Investment Risks -- High Yield/High Risk Bonds").
In addition to corporate debt securities, the Series may invest in U.S.
Government securities and mortgage-backed securities. The U.S. Government
securities in which the Series may invest include (i) U.S. Treasury obligations;
(ii) 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; (iii) mortgage-backed
securities guaranteed by the Government National Mortgage Association that are
supported by the full faith and credit of the U.S. Government; (iv)
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 (v)
collateralized mortgage obligations issued by private issuers for which the
underlying mortgage-backed securities serving as collateral are backed by the
credit alone of the U.S. Government agency or instrumentality which issues or
guarantees the mortgage-backed securities or by the full faith and credit of the
U.S. Government. The mortgage-backed securities in which the Series may invest
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. The Series may also purchase privately issued mortgage
securities which are not guaranteed by the U.S. Government or its agencies or
instrumentalities.
The Series may invest in corporate asset-backed securities that have
thirteen months or less remaining to maturity and are rated in the highest
rating category by at least two nationally recognized statistical rating
organizations ("NRSROs") or by one NRSRO if only one NRSRO has rated the
security or, if not rated, deemed by the sub-adviser to be of comparable
quality.
Other fixed income securities in which the Series may invest include zero
coupon bonds, deferred interest bonds and bonds on which the interest is payable
in kind. The Series may invest up to 20% (and generally expects to invest
between 10% and 20%) of its total assets in foreign securities (including
American Depositary Receipts). (See "Investment Risks -- Foreign Securities").
The Series may invest a portion of its assets in loan participations and
assignments. The Series may enter into repurchase agreements and reverse
repurchase agreements, may purchase securities on a firm commitment basis,
including when-issued securities, and may lend portfolio securities. The Series
will not invest more than 10% of its assets in repurchase agreements maturing in
more than seven days.
The Series may purchase securities for which there is a limited trading
market or which are subject to restrictions on resale to the public. The Series
will not invest more than 15% of the value of its total assets in illiquid
securities, such as "restricted securities" which are illiquid, and securities
that are not readily marketable.
The Series may use the following investment strategies to hedge market
risks, to manage the effective maturity or duration of debt instruments held by
the Series, or to seek to increase the Series' income or gains: purchase and
sell interest rate, stock or bond index futures contracts; purchase and sell
exchange listed and over-the-counter put and call options on securities, futures
contracts, indices and other financial instruments; and enter into interest rate
transactions, equity swaps and related transactions, invest in indexed debt
securities and other similar transactions which may be developed to the extent
the sub-adviser determines that they are consistent with the Series' investment
objective and policies and applicable regulatory requirements. The Series'
interest rate transactions may take the form of swaps, caps, floors and collars.
SALOMON BROTHERS/JNL GLOBAL BOND SERIES
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 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 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 arranged through private
negotiations between a corporate borrower or a foreign sovereign entity and one
or more financial institutions. The Series may invest in such loans in the form
of participations in loans and assignments of all or a portion of loans from
third parties. The Series considers these investments to be investments in debt
securities for purposes of this Prospectus.
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, the Commodity Futures Trading Commission and
the federal income tax requirements applicable to regulated investment
companies.
SALOMON BROTHERS/JNL HIGH YIELD BOND SERIES
The investment objective of the Salomon Brothers/JNL High Yield Bond Series
is to maximize current income. As a secondary objective, the Series will seek
capital appreciation. It is a diversified Series that seeks to achieve its
objectives by investing primarily in a diversified portfolio of high yield
fixed-income securities rated in medium or lower rating categories or determined
by the sub-adviser to be of comparable quality. The Series intends to invest,
under normal market conditions, at least 80% of its total assets in non-
investment grade fixed-income securities (e.g., bonds, debentures, notes,
equipment lease certificates, equipment trust certificates, conditional sales
contracts, commercial paper and other obligations and preferred stock).
The debt obligations in which the Series will invest generally will be
rated, at the time of investment, "Ba" or "B" or lower by Moody's or "BB" or "B"
or lower by S&P, or determined by the sub-adviser to be of comparable quality.
Debt securities rated by both Moody's and S&P need only satisfy the foregoing
ratings standards with respect to either the Moody's or the S&P rating. The
Series is not required to dispose of a debt security if its credit rating or
credit quality declines. Medium and low-rated and comparable unrated securities
offer yields that fluctuate over time, but generally are superior to the yields
offered by higher rated securities. However, such securities also involve
significantly greater risks, including price volatility and risk of default in
the payment of interest and principal, than higher rated securities. Certain of
the debt securities purchased by the Series may be rated as low as C by Moody's
or D by S&P or may be comparable to securities so rated. The lower-rated bonds
in which the Series may invest are commonly referred to as "junk bonds." An
investment in the Series should not be considered as a complete investment
program. (See "Investment Risks -- High Yield/High Risk Bonds").
In light of the risks associated with high yield 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 investment manager will also
review the ratings, if any, assigned to the security by any recognized rating
agencies, although the investment manager'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 objectives 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 sub-adviser will have discretion to select the range of maturities of
the fixed-income securities in which the Series may invest. The sub-adviser
anticipates that under current market conditions, the Series will have an
average portfolio maturity of 10 to 15 years. However, the average portfolio
maturity may vary substantially from time to time depending on economic and
market conditions.
The Series may invest up to 10% of its total assets in securities of foreign
issuers and up to 5% of its total assets in foreign governmental issuers in any
one country. The foreign securities in which the Series may invest, all or a
portion of which may be non-U.S. dollar denominated, include: (a) debt
obligations issued or guaranteed by foreign national, provincial, state,
municipal or other governments with taxing authority or by their agencies or
instrumentalities, including Brady Bonds; (b) debt obligations of supranational
entities; (c) debt obligations of the U.S. Government issued in non-dollar
securities; (d) debt obligations and other fixed-income securities of foreign
corporate issuers; and (e) U.S. corporate issuers. There is no minimum rating
criteria for the Series' investments in such securities.
The Series may also invest in zero coupon securities; pay-in-kind bonds and
deferred payment securities, which involve special risk considerations. The
Series may invest in fixed and floating rate loans arranged through private
negotiations between a corporate borrower or a foreign sovereign entity and one
or more financial institutions. The Series may invest in such loans in the form
of participations in loans and assignments of all or a portion of loans from
third parties. (See "Securities and Management Practices -- Participations and
Assignments").
The Series may invest up to 10% of its total assets in either (1) equipment
lease certificates, equipment trust certificates and conditional sales contracts
or (2) limited partnership interests. The Series may invest up to 10% of its
total assets in common stock, convertible securities, warrants or other equity
securities (other than preferred stock for which there is no limit) when
consistent with the Series' objective. 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.
In order to maintain liquidity, the Series may hold and/or invest up to 20%
of its total assets in cash and/or U.S. dollar denominated debt securities
including: (1) short-term (less than 12 months to maturity) and medium-term (not
greater than five years to maturity) obligations issued or guaranteed by (a) the
U.S. Government or the government of a developed country, their agencies or
instrumentalities or (b) international organizations designed or supported by
multiple foreign governmental entities to promote economic reconstruction or
development ("supranational entities"); (2) finance company obligations,
corporate commercial paper and other short-term commercial obligations, in each
case rated or issued by companies with similar securities outstanding that are
rated 'Prime-1" or "A" or better by Moody's or "A-1" or "A" or better by S&P or,
if unrated, of comparable quality as determined by the sub-adviser; (3)
obligations (including certificates of deposit, time deposits, demand deposits
and bankers' acceptances) of banks; and (4) repurchase agreements with respect
to securities in which the Series may invest. If at some future date, in the
opinion of the sub-adviser, adverse conditions prevail in the securities markets
which makes the Series' investment strategy inconsistent with the best interest
of the Series' shareholders, then for defensive purposes, the Series may
temporarily invest its assets without limit in such instruments.
If at some future date, in the sub-adviser's opinion, adverse conditions
prevail in the securities markets which makes the Series' investment strategy
inconsistent with the best interests of the Series' shareholders, the Series may
invest its assets without limit in high-quality short-term money market
instruments.
The Series may enter into repurchase agreements and reverse repurchase
agreements, may purchase securities on a firm commitment basis including when-
issued securities and may lend portfolio securities.
The Series may purchase securities for which there is a limited trading
market or which are subject to restrictions on resale to the public. The Series
will not invest more than 15% of the value of its total assets in illiquid
securities, such as "restricted securities" which are illiquid, and securities
that are not readily marketable.
The Series may use the following investment strategies to hedge market
risks, to manage the effective maturity or duration of debt instruments held by
the Series, or to seek to increase the Series' income or gains. The Series may
purchase and sell interest rate, currency or stock or bond index futures
contracts and enter into currency forward contracts and currency swaps; purchase
and sell exchange listed and over-the-counter put and call options on
securities, currencies, futures contracts, indices and other financial
instruments, and enter into interest rate transactions, equity swaps and related
transactions, invest in indexed debt securities and other similar transactions
which may be developed to the extent the sub-adviser determines that they are
consistent with the Series' investment objective and policies and applicable
regulatory requirements. The Series' interest rate transactions may take the
form of swaps, caps, floors and collars, and the Series' currency transactions
may take the form of currency forward contracts, currency futures contracts,
currency swaps and options on currencies.
SALOMON BROTHERS/JNL U.S. GOVERNMENT & QUALITY BOND SERIES
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 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").
T. ROWE PRICE/JNL ESTABLISHED GROWTH SERIES
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 American Depositary Receipts.
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 types of
securities, for example, 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 undervalued 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 American Depositary Receipts.
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 American Depositary
Receipts). 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).
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, 1997, 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:
PERCENTAGE OF NET ASSETS
PPM America/JNL Salomon
PPM America/JNL High Yield Bond Brothers/JNL
S&P RATING Balanced Series Series Global Bond Series
- --------------- ----------------- ------------------ ------------------
AAA............ 35.16% 0.00% 27.71%
AA............. 0.00% 0.00% 0.38%
A.............. 0.00% 0.00% 1.58%
BBB............ 0.00% 0.16% 2.83%
BB............. 3.39% 26.98% 3.40%
B.............. 6.72% 51.18% 23.35%
CCC............ 0.00% 0.00% 0.16%
CC............. 0.00% 0.00% 0.00%
C.............. 0.00% 0.00% 0.00%
D.............. 0.00% 0.00% 0.00%
Not Rated...... 3.59% 16.42% 26.93%
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.
A 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 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. A 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 assets 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. 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. (See "Series
Transactions and Brokerage").
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 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. A Series may sell securities short. 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. To the extent that a
Series engages in short sales that are not "against the box," it must maintain
asset coverage in the form of assets determined to be liquid by the sub-adviser
in accordance with procedures established by the Board of Trustees, in a
segregated account, or otherwise cover its position in a permissible manner.
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 liquid assets 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. The JNL/PIMCO Total Return Bond Series
and the Salomon Brothers/JNL High Yield Bond Series may invest in such
securities without limit. 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.
PASSIVE FOREIGN INVESTMENT COMPANIES. A Series may purchase the securities
of certain foreign investment funds or trusts called passive foreign investment
companies. Such trusts have been the only or primary way to invest in certain
countries. In addition to bearing their proportionate share of the trust's
expenses (management fees and operating expenses), shareholders will also
indirectly bear similar expenses of such trusts.
INFLATION INDEXED BONDS. A Series may purchase inflation-indexed bonds.
Inflation-indexed bonds are fixed income securities whose principal value is
periodically adjusted according to the rate of inflation. Such bonds generally
are issued at an interest rate lower than typical bonds, but are expected to
retain their principal value over time. The interest rate on these bonds is
fixed at issuance, but over the life of the bond the interest may be paid on an
increasing principal value, which has been adjusted for inflation. While these
securities are expected to be protected from long-term inflationary trends,
short-term increases in inflation may lead to a decline in value. If interest
rates rise due to reasons other than inflation (for example, due to changes in
currency exchange rates), investors in these securities may not be protected to
the extent that the increase is not reflected in the bond's inflation measure.
PARTICIPATIONS AND ASSIGNMENTS. A 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"). A 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"). Participations typically will result in a Series having
a contractual relationship only with the Lender, not with the borrower. A 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, a 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 a Series may not
benefit directly from any collateral supporting the Loan in which it has
purchased the Participation. As a result, a 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, a Series may be
treated as a general creditor of the Lender and may not benefit from any set-off
between the Lender and the borrower. A Series will acquire Participations only
if the Lender interpositioned between a Series and the borrower is determined by
the sub-adviser to be creditworthy. When a Series purchases Assignments from
Lenders, a 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.
A Series may have difficulty disposing of Assignments and Participations.
Because the market for such instruments is not highly liquid, a 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 a 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. A 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 a 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.
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 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, JNL/JPM
International & Emerging Markets, Salomon Brothers/JNL Global Bond, and T. Rowe
Price/JNL International Equity Investment Series are particularly susceptible to
such risks. American Depositary Receipts do not involve the same direct currency
and liquidity risks as foreign securities.
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"). A Series may also enter into a
forward contract to sell a currency in which portfolio securities are
denominated in exchange for a second currency in order to manage its currency
exposure to selected countries. 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.
EMERGING MARKETS. The considerations noted above under "Foreign Securities"
may be intensified in the case of investment in developing countries.
Investments in securities of issuers in emerging markets countries may involve a
high degree of risk and many may be considered speculative. These investments
carry all of the risks of investing in securities of foreign issuers to a
heightened degree. These heightened risks include (i) greater risks of
expropriation, confiscatory taxation, nationalization, and less social,
political and economic stability; (ii) limitations on daily price changes and
the small current size of the markets for securities of emerging markets issuers
and the currently low or nonexistent volume of trading, resulting in lack of
liquidity and in price volatility; (iii) certain national policies which may
restrict a Series' investment opportunities including limitations on aggregate
holdings by foreign investors and restrictions on investing in issuers or
industries deemed sensitive to relevant national interests; and (iv) the absence
of developed legal structures governing private or foreign investment and
private property.
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 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 Commodity
Futures Trading Commission, which generally regulates the trading of commodity
futures by U.S. persons, the Securities and Exchange Commission, which regulates
the offer and sale of securities by and to U.S. persons, or any other
governmental regulatory authority.
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 assets 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.
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, 1997, had approximately $1 billion
under management.
JNFSI provides preparation of financial statements, tax services, and
regulatory reports for 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 net assets of the Series. The fees, which are accrued
daily and payable monthly, are calculated on the basis of the average 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 currently is obligated to pay JNFSI. The Series
managed by Standard & Poor's Investment Advisory Services, Inc. will indirectly
bear their pro rata share of fees of the underlying Series in addition to the
fees shown for such Series.
<PAGE>
<TABLE>
<CAPTION>
(M-- MILLION) $ 0 TO $50 M TO $100 M TO $150 M TO $200 M TO $250 M TO $300 M TO $350 M TO OVER
$50 M $100 M $150 M $200 M $250 M $300 M $350 M $500 M $500 M
SERIES % % % % % % % % %
- ---------------------------- ------ ---------- ----------- ----------- ----------- ----------- ----------- ----------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
JNL Aggressive Growth....... .95 .95 .95 .90 .90 .90 .85 .85 .85
JNL Capital Growth.......... .95 .95 .95 .90 .90 .90 .85 .85 .85
JNL Global Equities......... 1.00 1.00 1.00 .95 .95 .95 .90 .90 .90
JNL/Alger Growth............ .975 .975 .975 .975 .975 .975 .95 .95 .90
JNL/Alliance Growth......... .775 .775 .775 .775 .775 .70 .70 .70 .70
JNL/Eagle Core Equity....... .90 .85 .85 .85 .85 .85 .75 .75 .75
JNL/Eagle SmallCap
Equity.................... .95 .95 .95 .90 .90 .90 .90 .90 .85
JNL/JPM International &
Emerging Markets.......... .975 .95 .95 .95 .90 .90 .90 .85 .85
JNL/PIMCO Total Return
Bond...................... .70 .70 .70 .70 .70 .70 .70 .70 .70
JNL/Putnam Growth........... .90 .90 .90 .85 .85 .85 .80 .80 .80
JNL/Putnam Value Equity..... .90 .90 .90 .85 .85 .85 .80 .80 .80
JNL/S&P Conservative Growth
I......................... .20 .20 .20 .20 .20 .20 .20 .20 .15
JNL/S&P Moderate
Growth I.................. .20 .20 .20 .20 .20 .20 .20 .20 .15
JNL/S&P Aggressive Growth
I......................... .20 .20 .20 .20 .20 .20 .20 .20 .15
JNL/S&P Very Aggressive
Growth I.................. .20 .20 .20 .20 .20 .20 .20 .20 .15
JNL/S&P Equity Growth I..... .20 .20 .20 .20 .20 .20 .20 .20 .15
JNL/S&P Equity Aggressive
Growth I.................. .20 .20 .20 .20 .20 .20 .20 .20 .15
JNL/S&P Conservative Growth
II........................ .20 .20 .20 .20 .20 .20 .20 .20 .15
JNL/S&P Moderate
Growth II................. .20 .20 .20 .20 .20 .20 .20 .20 .15
JNL/S&P Aggressive Growth
II........................ .20 .20 .20 .20 .20 .20 .20 .20 .15
JNL/S&P Very Aggressive
Growth II................. .20 .20 .20 .20 .20 .20 .20 .20 .15
JNL/S&P Equity Growth II.... .20 .20 .20 .20 .20 .20 .20 .20 .15
JNL/S&P Equity Aggressive
Growth II................. .20 .20 .20 .20 .20 .20 .20 .20 .15
Goldman Sachs/JNL Growth &
Income.................... .925 .90 .90 .90 .85 .85 .85 .80 .80
Lazard/JNL Small
Cap Value................. 1.05 1.00 1.00 .975 .975 .975 .925 .925 .925
Lazard/JNL Mid Cap Value.... .975 .975 .975 .925 .925 .925 .90 .90 .90
PPM America/JNL
Balanced.................. .75 .70 .70 .675 .675 .675 .65 .65 .625
PPM America/JNL High Yield
Bond...................... .75 .70 .70 .675 .675 .675 .65 .65 .625
PPM/America JNL Money
Market.................... .60 .60 .60 .575 .575 .575 .55 .55 .525
Salomon Brothers/JNL
Balanced.................. .80 .75 .70 .70 .70 .70 .70 .70 .70
Salomon Brothers/JNL Global
Bond...................... .85 .85 .85 .80 .80 .80 .80 .80 .75
Salomon Brothers/JNL High
Yield Bond................ .80 .75 .70 .70 .70 .70 .70 .70 .70
Salomon Brothers/JNL
U.S. Government &
Quality Bond.............. .70 .70 .70 .65 .65 .65 .60 .60 .55
T. Rowe Price/JNL
Established Growth........ .85 .85 .85 .80 .80 .80 .80 .80 .80
T. Rowe Price/JNL
International Equity 1.10 1.05 1.05 1.00 1.00 1.00 .95 .95 .90
Investment..................
T. Rowe Price/JNL Mid-Cap
Growth.................... .95 .95 .95 .90 .90 .90 .90 .90 .90
</TABLE>
<PAGE>
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 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.
Alliance Capital Management L.P. ("Alliance"), with principal offices at
1345 Avenue of the Americas, New York, New York 10105, serves as sub-adviser to
the JNL/Alliance Growth Series. Alliance is a major international investment
manager, supervising client accounts with assets totaling over $199 billion as
of September 30, 1997. Alliance serves its clients, who primarily are major
corporate employee benefit funds, investment companies, foundations, endowment
funds and public employee retirement systems, with a staff of more than 1,500
employees. Alliance has five U.S. offices and its subsidiaries have nine offices
outside the U.S. The 54 registered investment companies managed by Alliance,
comprising 116 separate investment portfolios, currently have over 1 million
shareholders. As of September 30, 1997, Alliance was retained as an investment
manager of employee benefit fund assets for 29 of the Fortune 100 companies.
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.
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 November 30, 1997, had
approximately $7.7 billion under management: $5.5 billion in mutual fund
accounts and $2.2 billion in other advisory accounts. Alger Management is a
wholly owned subsidiary of Fred Alger & Company, Incorporated 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.
Goldman Sachs Asset Management ("Goldman Sachs"), One New York Plaza, New
York, New York 10004, serves as sub-adviser to the Goldman Sachs/JNL Growth &
Income Series. Goldman Sachs is a separate operating division of Goldman, Sachs
& Co. Goldman Sachs provides a wide range of fully discretionary investment
advisory services including quantitatively driven and actively managed U.S. and
international equity portfolios, U.S. and global fixed income portfolios,
commodity and currency products, and money markets. Goldman Sachs is responsible
for more than $140 billion in assets as of January 1998.
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 $67 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.
J.P. Morgan Investment Management Inc. ("JPM"), with principal offices at
522 Fifth Avenue, New York, New York 10236, serves as sub-adviser to the JNL/JPM
International & Emerging Markets Series. JPM is a wholly-owned subsidiary of
J.P. Morgan & Co. Incorporated, a bank holding company that also owns Morgan
Guaranty Trust Company, J.P. Morgan Securities Inc. and J.P. Morgan Futures Inc.
JPM and its affiliates offer a wide range of services to governmental,
institutional, corporate and individual customers and act as investment advisor
to individual and institutional customers with combined assets under management
of $234 billion as of June 30, 1997.
Lazard Asset Management ("Lazard"), 30 Rockefeller Plaza, New York, New York
10112, serves as sub-adviser to the Lazard/JNL Small Cap Value Series and the
Lazard/JNL Mid Cap Value Series. Lazard is a division of Lazard Freres & Co.
("Lazard Freres"), a New York limited liability company, which is registered as
an investment adviser with the SEC and is a member of the New York, American and
Midwest Stock Exchanges. Lazard Freres provides its clients with a wide variety
of investment banking, brokerage and related services. Lazard provides
investment management services to client discretionary accounts with assets
totaling approximately $53 billion as of June 30, 1997. Its clients are both
individuals and institutions.
Pacific Investment Management Company ("PIMCO"), located at 840 Newport
Center Drive, Suite 360, Newport Beach, California 92660, serves as sub-adviser
to the JNL/PIMCO Total Return Bond Series. PIMCO is an investment counseling
firm founded in 1971, and had approximately $92 billion in assets under
management as of March 31, 1997. PIMCO is a subsidiary partnership of PIMCO
Advisors L.P. A majority interest in PIMCO Advisors L.P. is held by PIMCO
Partners, G.P., a general partnership between Pacific Investment Management
Company, a California corporation and indirect wholly owned subsidiary of
Pacific Mutual Life Insurance Company, and PIMCO Partners, LLC, a limited
liability company controlled by the PIMCO Managing Directors.
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 approximately
$190 billion in various currencies and markets. PPM currently manages over $32
billion of Jackson National Life Insurance Company assets. Additionally, PPM
manages assets of over $8 billion for other affiliated companies and over $1
billion 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 $235
billion in assets under management as of December 31, 1997. Putnam is a
subsidiary of Putnam Investment, Inc., which is 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.
- ---------------
*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.
<PAGE>
Salomon Brothers Asset Management Inc ("SBAM") serves as sub-adviser to the
Salomon Brothers/JNL Balanced Series, the Salomon Brothers/JNL Global Bond
Series, the Salomon Brothers/JNL High Yield Bond Series and the Salomon
Brothers/JNL U.S. Government & Quality Bond Series. SBAM is a wholly owned
subsidiary of Smith Barney Holdings Inc. which is, in turn, wholly owned by
Travelers Group Inc. 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. As of October 31, 1997, SBAM and
SBAM's investment affiliates managed approximately $26.6 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 a subsidiary of Salomon Smith Barney Holdings 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.
Standard & Poor's Investment Advisory Services, Inc. ("SPIAS"), located at
25 Broadway, New York, New York 10004, serves as sub-adviser to the JNL/S&P
Conservative Growth Series I, JNL/S&P Moderate Growth Series I, JNL/S&P
Aggressive Growth Series I, JNL/S&P Very Aggressive Growth Series I, JNL/S&P
Equity Growth Series I, JNL/S&P Equity Aggressive Growth Series I, JNL/S&P
Conservative Growth Series II, JNL/S&P Moderate Growth Series II, JNL/S&P
Aggressive Growth Series II, JNL/S&P Very Aggressive Growth Series II, JNL/S&P
Equity Growth Series II, and JNL/S&P Equity Aggressive Growth Series II. SPIAS
was established in 1995 to provide investment advice to the financial community.
SPIAS is a subsidiary of The McGraw Hill Companies, Inc. and is affiliated with
S&P. SPIAS operates independently of and has no access to ratings, analysis or
other information supplied by S&P in connection with its ratings business,
except to the extent such information is made available by S&P to the general
public.
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 $125 billion as of September 30, 1997 for
approximately 6 million individual and institutional investor accounts,
including limited and real estate partnerships and other mutual funds.
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 $33 billion under
management as of September 30, 1997 in its offices in Baltimore, London, Tokyo,
Hong Kong and Singapore.
T. Rowe provides certain administrative support to Price-Fleming for a fee
of .15% of the market value of all assets in equity accounts, .15% of the market
value of all assets in active fixed income accounts, and .035% of the market
value of all assets in passive fixed income accounts under Price-Fleming's
management. Additional investment research and administrative support for equity
investments in provided to Price-Fleming by Fleming Investment Management
Limited ("FIM") and Jardine Fleming International Holdings Limited ("JFIH"), for
which each receives from Price-Fleming a fee of .075% of the market value of all
assets in equity accounts under Price-Fleming's management. Fleming
International Asset Management Limited ("FIAM") and JFIH provide research and
administration support for fixed income accounts for which each receive a fee of
.075% of the market value of all assets in active fixed income accounts and
.0175% of such market value in passive fixed income accounts under
Price-Fleming's management. FIM and JFIH are wholly owned subsidiaries of
Flemings and Jardine Fleming, respectively, and FIAM is an indirect subsidiary
of Flemings.
PORTFOLIO MANAGEMENT
The following individuals are primarily responsible for the day-to-day
management of the particular Series as indicated below.
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 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 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/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 as President since 1995. 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 as a
senior research analyst since 1990 and as a Senior Vice President since 1995.
Ms. Khoo has been employed by Alger Management as a senior research analyst
since 1989 and as a Senior Vice President since 1995.
JNL/ALLIANCE GROWTH SERIES
James G. Reilly, Senior Vice President of Alliance, is responsible for the
day-to-day management of the JNL/Alliance Growth Series. Mr. Reilly joined
Alliance in 1984.
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/JPM INTERNATIONAL & EMERGING MARKETS SERIES
Paul A. Quinsee, Vice President of JPM, and Rudi Leuthold, Managing Director
of JPM, share the responsibility for the day-to-day management of the JNL/JPM
International & Emerging Markets Series. Mr. Quinsee has been employed by JPM
since February 1992 as a portfolio manager of international equity investments.
Mr. Leuthold has been employed by JPM since prior to 1992 as a portfolio manager
of international equity investments.
JNL/PIMCO TOTAL RETURN BOND SERIES
William H. Gross, Managing Director of PIMCO, is responsible for the
day-to-day management of the JNL/PIMCO Total Return Bond Series. A Fixed Income
Portfolio Manager, Mr. Gross is one of the founders of PIMCO.
JNL/PUTNAM GROWTH SERIES
C. Beth Cotner has responsibility for the day-to-day management of the
JNL/Putnam Growth Series. Ms. Cotner, Senior Vice President, has been employed
as a Senior Portfolio Manager by Putnam since September 1995. Prior to that, Ms.
Cotner was Executive Vice President of Kemper Financial Services. Ms. Cotner 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.
GOLDMAN SACHS/JNL GROWTH & INCOME SERIES
G. Lee Anderson, Vice President of Goldman Sachs, Eileen A. Aptman, Vice
President of Goldman Sachs, and Ronald E. Gutfleish, Managing Director of
Goldman Sachs, share the responsibility for the day-to-day management of the
Goldman Sachs/JNL Growth & Income Series. Mr. Anderson joined Goldman Sachs in
1992. Prior to 1992, he was a research analyst in the Investment Research
Department of Goldman, Sachs & Co. Ms. Aptman joined the Investment Adviser in
1993. Prior to 1993, she was an equity analyst at Delphi Management. Mr.
Gutfleish joined Goldman Sachs in 1993. Prior to 1993, he was a principal of
Sanford C. Bernstein & Co. in its Investment Management Research Department.
LAZARD/JNL SMALL CAP VALUE SERIES
Herbert W. Gullquist and Eileen Alexanderson share primary responsibility
for the day-to-day management of the Lazard/JNL Small Cap Value Series. Mr.
Gullquist has been with Lazard since 1982. He has been a Managing Director of
Lazard since January 1994; prior thereto, he was Vice President of Lazard. Ms.
Alexanderson has been with Lazard since 1979. She has been a Managing Director
since January 1997; prior thereto, Ms. Alexanderson was a Vice President of
Lazard.
LAZARD/JNL MID CAP VALUE SERIES
Herbert W. Gullquist and Eileen Alexanderson share primary responsibility
for the day to day management of the JNL/Lazard Mid Cap Value Series. Mr.
Gullquist has been with Lazard since 1982. He has been a Managing Director of
Lazard since January 1994; prior thereto, Mr. Gullquist was Vice President of
Lazard. Ms. Alexanderson has been with Lazard since 1979. She has been a
Managing Director since January 1997; prior thereto, Ms. Alexanderson was a Vice
President of Lazard.
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 BALANCED SERIES
SALOMON BROTHERS/JNL GLOBAL BOND SERIES
SALOMON BROTHERS/JNL HIGH YIELD BOND SERIES
SALOMON BROTHERS/JNL U.S. GOVERNMENT & QUALITY BOND SERIES
Richard E. Dahlberg is primarily responsible for the day-to-day management
of the Salomon Brothers/JNL Balanced Series. Prior to joining SBAM in July 1995,
Mr. Dahlberg was employed by Massachusetts Financial Services Company since
1968. Mr. Dahlberg had been primarily responsible for the day-to-day management
of the MFS Total Return Fund for ten years prior to joining SBAM.
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
Peter J. Wilby is primarily responsible for the day-to-day management of the
Salomon Brothers/JNL High Yield Bond Series and 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, is 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 Management where he was responsible for captive insurance portfolios and
products.
JNL/S&P CONSERVATIVE GROWTH SERIES I
JNL/S&P MODERATE GROWTH SERIES I
JNL/S&P AGGRESSIVE GROWTH SERIES I
JNL/S&P VERY AGGRESSIVE GROWTH SERIES I
JNL/S&P EQUITY GROWTH SERIES I
JNL/S&P EQUITY AGGRESSIVE GROWTH SERIES I
JNL/S&P CONSERVATIVE GROWTH SERIES II
JNL/S&P MODERATE GROWTH SERIES II
JNL/S&P AGGRESSIVE GROWTH SERIES II
JNL/S&P VERY AGGRESSIVE GROWTH SERIES II
JNL/S&P EQUITY GROWTH SERIES II
JNL/S&P EQUITY AGGRESSIVE GROWTH SERIES II
David M. Blitzer, Robert S. Natale and Elizabeth Koo share the
responsibility for the day to day management of the JNL/S&P Conservative Growth
Series I, the JNL/S&P Moderate Growth Series I, the JNL/S&P Aggressive Growth
Series I, the JNL/S&P Very Aggressive Growth Series I, the JNL/S&P Equity Growth
Series I, the JNL/S&P Equity Aggressive Growth Series I, the JNL/S&P
Conservative Growth Series II, the JNL/S&P Moderate Growth Series II, the
JNL/S&P Aggressive Growth Series II, the JNL/S&P Very Aggressive Growth Series
II, the JNL/S&P Equity Growth Series II, and the JNL/S&P Equity Aggressive
Growth Series II. Mr. Blitzer has been Vice President of SPIAS since 1995 and
has been an economist with Standard & Poor's Equity Services Group (which
operates independently of S&P Rating's Group) since 1982. Mr. Natale has been
President of SPIAS since 1995 and has been a securities analyst, editor and
research director with Standard & Poor's Equity Services Group since 1979. Ms.
Koo has been an investment officer in the Quantitative Services department of
Standard & Poor's Financial Information Services since 1996. Prior to 1996, Ms.
Koo was an international tax associate for Coopers & Lybrand.
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. Edwards, John R. Ford, James B.M. Seddon,
Benedict R.F. Thomas, and David J.L. 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
1987 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 net assets of such Series. The fees are calculated
based on the average 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 management fees JNFSI currently is obligated
to pay the sub-advisers out of the advisory fee it receives from each Series as
specified above:
<PAGE>
<TABLE>
<CAPTION>
(M-- MILLION) $0 TO $50 M TO $100 M TO $150 M TO $200 M TO $250 M TO $300 M TO $350 M TO OVER
$50 M $100 M $150 M $200 M $250 M $300 M $350 M $500 M $500 M
SERIES % % % % % % % % %
- ---------------------------- ------ ---------- ----------- ----------- ----------- ----------- ----------- ----------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
JNL Aggressive Growth....... .55 .55 .50 .50 .50 .50 .50 .50 .45
JNL Capital Growth.......... .55 .55 .50 .50 .50 .50 .50 .50 .45
JNL Global Equities......... .55 .55 .50 .50 .50 .50 .50 .50 .45
JNL/Alger Growth............ .55 .55 .55 .55 .55 .55 .50 .50 .45
JNL/Alliance Growth......... .35 .35 .35 .35 .35 .25 .25 .25 .25
JNL/Eagle Core Equity....... .45 .40 .40 .40 .40 .40 .30 .30 .30
JNL/Eagle SmallCap Equity... .50 .50 .50 .45 .45 .45 .45 .45 .40
JNL/JPM International &
Emerging Markets.......... .55 .50 .50 .50 .45 .45 .45 .40 .40
JNL/PIMCO Total Return
Bond...................... .25 .25 .25 .25 .25 .25 .25 .25 .25
JNL/Putnam Growth........... .50 .50 .50 .45 .45 .45 .35 .35 .35
JNL/Putnam Value Equity..... .50 .50 .50 .45 .45 .45 .35 .35 .35
JNL/S&P Conservative Growth
I......................... .10 .10 .10 .10 .10 .10 .10 .10 .075
JNL/S&P Moderate Growth I... .10 .10 .10 .10 .10 .10 .10 .10 .075
JNL/S&P Aggressive Growth
I......................... .10 .10 .10 .10 .10 .10 .10 .10 .075
JNL/S&P Very Aggressive
Growth I.................. .10 .10 .10 .10 .10 .10 .10 .10 .075
JNL/S&P Equity Growth I..... .10 .10 .10 .10 .10 .10 .10 .10 .075
JNL/S&P Equity Aggressive
Growth I.................. .10 .10 .10 .10 .10 .10 .10 .10 .075
JNL/S&P Conservative Growth
II........................ .10 .10 .10 .10 .10 .10 .10 .10 .075
JNL/S&P Moderate Growth II.. .10 .10 .10 .10 .10 .10 .10 .10 .075
JNL/S&P Aggressive Growth
II........................ .10 .10 .10 .10 .10 .10 .10 .10 .075
JNL/S&P Very Aggressive
Growth II................. .10 .10 .10 .10 .10 .10 .10 .10 .075
JNL/S&P Equity Growth II.... .10 .10 .10 .10 .10 .10 .10 .10 .075
JNL/S&P Equity Aggressive
Growth II................. .10 .10 .10 .10 .10 .10 .10 .10 .075
Goldman Sachs/JNL Growth &
Income.................... .50 .45 .45 .45 .40 .40 .40 .35 .35
Lazard/JNL Small Cap Value.. .625 .575 .575 .525 .525 .525 .475 .475 .475
Lazard/JNL Mid Cap Value.... .55 .525 .525 .475 .475 .475 .45 .45 .45
PPM America/JNL Balanced.... .25 .20 .20 .175 .175 .175 .15 .15 .125
PPM America/JNL High Yield
Bond...................... .25 .20 .20 .175 .175 .175 .15 .15 .125
PPM America/JNL Money
Market.................... .20 .15 .15 .125 .125 .125 .10 .10 .075
Salomon Brothers/JNL
Balanced.................. .35 .30 .25 .25 .25 .25 .25 .25 .25
Salomon Brothers/JNL Global
Bond...................... .375 .35 .35 .30 .30 .30 .30 .30 .25
Salomon Brothers/JNL High
Yield Bond................ .35 .30 .25 .25 .25 .25 .25 .25 .25
Salomon Brothers/JNL U.S.
Government & Quality
Bond...................... .225 .225 .225 .175 .175 .175 .15 .15 .10
</TABLE>
$0 TO $20 TO $50 TO
$20 M $50 M $200 M $200 M+
----------------- --------- --------
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%
* When average net assets exceed this amount, the sub-advisory fee asterisked is
applicable to all amounts in this Series.
<PAGE>
The sub-advisory fees payable to a sub-adviser may be reduced as agreed to
by the parties from time to time. 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.
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:
o when the New York Stock Exchange is closed (other than weekends and
holidays) or trading is restricted;
o when an emergency exists, making disposal of portfolio securities or
the valuation of net assets not reasonably practicable; or
o 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.
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 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. Any
charges that are imposed under a variable annuity or variable life contract that
is funded by the Trust will have the effect of reducing the performance
described below. Such charges will be described in the variable annuity or
variable life prospectus. If the Trust advertises performance that does not
reflect the effect of charges imposed under a variable annuity or variable life
contract, it will accompany the performance with the applicable performance
which does reflect the effect of such charges.
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 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, Russell Midcap
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.
<PAGE>
CUSTODIAN
State Street Bank and Trust Company
105 Rosemont Road
Westwood, Massachusetts 02090
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
200 East Randolph Drive
Chicago, Illinois 60601
LEGAL COUNSEL
Blazzard, Grodd & Hasenauer, P.C.
943 Post Road East
Westport, CT 06880
INVESTMENT ADVISER AND TRANSFER AGENT
Jackson National Financial Services, Inc.
5901 Executive Drive
Lansing, Michigan 48911
<PAGE>
A-33
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.
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 rankng; and the
modifier indicates that the issue ranks in the lower end of its generic rating
category.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
APRIL 1, 1998
JNL SERIES TRUST
JNL Aggressive Growth Series
JNL Capital Growth Series
JNL Global Equities Series
JNL/Alger Growth Series
JNL/Alliance Growth Series
JNL/Eagle Core Equity Series
JNL/Eagle SmallCap Equity Series
JNL/JPM International & Emerging Markets Series
JNL/PIMCO Total Return Bond Series
JNL/Putnam Growth Series
JNL/Putnam Value Equity Series
JNL/S&P Conservative Growth Series I
JNL/S&P Moderate Growth Series I
JNL/S&P Aggressive Growth Series I
JNL/S&P Very Aggressive Growth Series I
JNL/S&P Equity Growth Series I
JNL/S&P Equity Aggressive Growth Series I
JNL/S&P Conservative Growth Series II
JNL/S&P Moderate Growth Series II
JNL/S&P Aggressive Growth Series II
JNL/S&P Very Aggressive Growth Series II
JNL/S&P Equity Growth Series II
JNL/S&P Equity Aggressive Growth Series II
Goldman Sachs/JNL Growth & Income Series
Lazard/JNL Small Cap Value Series
Lazard/JNL Mid Cap Value Series
PPM America/JNL Balanced Series
PPM America/JNL High Yield Bond Series
PPM America/JNL Money Market Series
Salomon Brothers/JNL Balanced Series
Salomon Brothers/JNL Global Bond Series
Salomon Brothers/JNL High Yield 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 April 1, 1998. 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.
================================================================================
<PAGE>
TABLE OF CONTENTS
General Information and History
Investment Restrictions Applicable to all Series
Common Types of Securities
Trustees and Officers of the Trust
Performance
Investment Adviser and Other Services
Purchases, Redemptions and Pricing of Shares
Additional Information Tax Status
Financial Statements
<PAGE>
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 36 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:
(1) The JNL Aggressive Growth Series, JNL Capital Growth Series, JNL
Global Equities Series, JNL/Alger Growth Series, JNL/Alliance Growth Series,
JNL/Eagle Core Equity Series, JNL/Eagle SmallCap Equity Series, JNL/JPM
International & Emerging Markets Series, JNL/PIMCO Total Return Bond Series,
JNL/Putnam Growth Series, JNL/Putnam Value Equity Series, Goldman Sachs/JNL
Growth & Income Series, Lazard/JNL Small Cap Value Series, Lazard/JNL Mid Cap
Value Series, PPM America/JNL Balanced Series, PPM America/JNL High Yield Bond
Series, PPM America/JNL Money Market Series, Salomon Brothers/JNL Balanced
Series, Salomon Brothers/JNL Global Bond Series, Salomon Brothers/JNL High Yield
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 may not 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,
Lazard/JNL Small Cap Value and Lazard/JNL Mid Cap Value 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, Lazard/JNL Small Cap Value and
Lazard/JNL Mid Cap Value Series may invest in the securities of as few as two
issuers (not to exceed 25% in any one issuer).
(2) No Series may 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) No Series may 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) No Series may 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) No Series may 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).
(6) No Series may 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) No Series may 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) Except for the JNL/Alliance Growth Series, JNL/JPM International &
Emerging Markets Series, JNL/PIMCO Total Return Bond Series, JNL/S&P
Conservative Growth Series I, JNL/S&P Moderate Growth Series I, JNL/S&P
Aggressive Growth Series I, JNL/S&P Very Aggressive Growth Series I, JNL/S&P
Equity Growth Series I, JNL/S&P Equity Aggressive Growth Series I, JNL/S&P
Conservative Growth Series II, JNL/S&P Moderate Growth Series II, JNL/S&P
Aggressive Growth Series II, JNL/S&P Very Aggressive Growth Series II, JNL/S&P
Equity Growth Series II, and JNL/S&P Equity Aggressive Growth Series II, Goldman
Sachs/JNL Growth & Income Series, Lazard/JNL Small Cap Value Series, Lazard/JNL
Mid Cap Value Series, Salomon Brothers/JNL Balanced Series and Salomon
Brothers/JNL High Yield Bond Series, a Series will not 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) Except for the JNL/S&P Conservative Growth Series I, JNL/S&P
Moderate Growth Series I, JNL/S&P Aggressive Growth Series I, JNL/S&P Very
Aggressive Growth Series I, JNL/S&P Equity Growth Series I, JNL/S&P Equity
Aggressive Growth Series I, JNL/S&P Conservative Growth Series II, JNL/S&P
Moderate Growth Series II, JNL/S&P Aggressive Growth Series II, JNL/S&P Very
Aggressive Growth Series II, JNL/S&P Equity Growth Series II, and JNL/S&P Equity
Aggressive Growth Series II , 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.
(b) Except for the JNL/S&P Conservative Growth Series I, JNL/S&P
Moderate Growth Series I, JNL/S&P Aggressive Growth Series I, JNL/S&P Very
Aggressive Growth Series I, JNL/S&P Equity Growth Series I, JNL/S&P Equity
Aggressive Growth Series I, JNL/S&P Conservative Growth Series II, JNL/S&P
Moderate Growth Series II, JNL/S&P Aggressive Growth Series II, JNL/S&P Very
Aggressive Growth Series II, JNL/S&P Equity Growth Series II, and JNL/S&P Equity
Aggressive Growth Series II , 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 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.
(c) Except for the JNL/JPM International & Emerging Markets Series,
JNL/S&P Conservative Growth Series I, JNL/S&P Moderate Growth Series I, JNL/S&P
Aggressive Growth Series I, JNL/S&P Very Aggressive Growth Series I, JNL/S&P
Equity Growth Series I, JNL/S&P Equity Aggressive Growth Series I, JNL/S&P
Conservative Growth Series II, JNL/S&P Moderate Growth Series II, JNL/S&P
Aggressive Growth Series II, JNL/S&P Very Aggressive Growth Series II, JNL/S&P
Equity Growth Series II, and JNL/S&P Equity Aggressive Growth Series II, 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.
(d) 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.
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.
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.
Passive Foreign Investment Companies. Some foreign countries limit, or prohibit,
all direct foreign investment in the securities of their companies. However, the
governments of some countries have authorized the organization of investment
funds to permit indirect foreign investment in such securities. For tax purposes
these funds may be known as Passive Foreign Investment Companies.
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 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.
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. In addition, a Series,
together with other registered investment companies having management agreements
with an investment adviser or its affiliates may transfer uninvested cash
balances into a single joint account, the daily aggregate balance of which will
be invested in one or more repurchase agreements.
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.
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
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. A 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. A 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 assets 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.
Inflation Indexed Bonds. Inflation-indexed bonds are fixed income securities
whose principal value is periodically adjusted according to the rate of
inflation. Such bonds generally are issued at an interest rate lower than
typical bonds, but are expected to retain their principal value over time. The
interest rate on these bonds is fixed at issuance, but over the life of the bond
the interest may be paid on an increasing principal value, which has been
adjusted for inflation.
Inflation-indexed securities issued by the U.S. Treasury will initially
have maturities of ten years, although it is anticipated that securities with
other maturities will be issued in the future. The securities will pay interest
on a semi-annual basis, equal to a fixed percentage of the inflation-adjusted
principal amount. For example, if a Series purchased an inflation-indexed bond
with a par value of $1,000 and a 3% real rate of return coupon (payable 1.5%
semi-annually), and inflation over the first six months were 1%, the mid-year
par value of the bond would be $1,010 and the first annual interest payment
would be $15.15 ($1,010 times 1.5%). If inflation during the second half of the
year reached 3%, the end-of-year par value of the bond would be $1,030 and the
second semi-annual interest payment would be $15.45 ($1,030 times 1.5%).
If the periodic adjustment rate measuring inflation falls, the
principal value of inflation-indexed bonds will be adjusted downward, and
consequently the interest payable on these securities (calculated with respect
to a smaller principal amount) will be reduced. Repayment of the original bond
principal upon maturity (as adjusted for inflation) is guaranteed in the case of
U.S. Treasury inflation-indexed bonds, even during a period of deflation.
However, the current market value of the bonds is not guaranteed, and will
fluctuate. The Series may also invest in other inflation related bonds which may
or may not provide a similar guarantee. If a guarantee of principal is not
provided, the adjusted principal value of the bond repaid at maturity may be
less than the original principal.
The value of inflation-indexed bonds is expected to change in response
to changes in real interest rates. Real interest rates in turn are tied to the
relationship between nominal interest rates and the rate of inflation.
Therefore, if inflation were to rise at a faster rate than nominal interest
rates, real interest rates might decline, leading to an increase in value of
inflation-indexed bonds. In contract, if nominal interest rates increased at a
faster rate than inflation, real interest rates might rise, leading to a
decrease in value of inflation-indexed bonds.
The U.S. Treasury has only recently begun issuing inflation-indexed
bonds. As such, there is no trading history of these securities, and there can
be no assurance that a liquid market in these instruments will develop, although
one is expected. Lack of a liquid market may impose the risk of higher
transaction costs and the possibility that a Series may be forced to liquidate
positions when it would not be advantageous to do so. These also can be no
assurance that the U.S. Treasury will issue any particular amount of
inflation-indexed bonds. Certain foreign governments, such as the United
Kingdom, Canada and Australia, have a longer history of issuing
inflation-indexed bonds, and there may be a more liquid market in certain of
these countries for these securities.
The periodic adjustment of U.S. inflation-index bonds is tied to the
Consumer Price-Index for Urban Consumers ("CPI-U"), which is calculated monthly
by the U.S. Bureau of Labor Statistics. The CPI-U is a measurement of changes in
the cost of living, made up of components such as housing, food, transportation
and energy. Inflation-indexed bonds issued by a foreign government are generally
adjusted to reflect a comparable inflation index, calculated by that government.
There can be no assurance that the CPI-U or any foreign inflation index will
accurately measure the real rate of inflation in the prices of goods and
services. Moreover, there can be no assurance that the rate of inflation in a
foreign country will be correlated to the rate of inflation in the United
States.
Any increase in the principal amount of an inflation-indexed bond will
be considered taxable ordinary income, even though investors do not receive
their principal until maturity.
Standard & Poor's Depository Receipts
Standard & Poor's Depository Receipts ("SPDRs") are American Stock
Exchange-traded securities that represent ownership in the SPDR Trust, a trust
which has been established to accumulate and hold a portfolio of common stocks
that is intended to track the price performance and dividend yield of the S&P
500 Index. This trust is sponsored by a subsidiary of the American Stock
Exchange. SPDRs may be used for several reasons including but not limited to:
facilitating the handling of cash flows or trading, or reducing transaction
costs. The use of SPDRs would introduce additional risk to a Series as the price
movement of the instrument does not perfectly correlate with the price action of
the underlying index.
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.
ANDREW B. HOPPING* (Age 39), Trustee, President and Chief Executive Officer,
August 1997 to present, Vice President, Treasurer & Chief Financial Officer,
August 1996 to August 1997; Director, June 1997 to present, President and Chief
Executive Officer, July 1997 to present, Jackson National Financial Services,
Inc.; Senior Vice President, June 1994 to present, Jackson National Life
Insurance Company; Executive Vice President, 1991 to June 1994, Countrywide
Credit.
JOSEPH FRAUENHEIM (Age 63), 1405 Cambridge, Lansing, MI 48911, Trustee, December
1994 to present; Consultant, 1991 to present.
ROBERT A. FRITTS* (Age 49), Treasurer and Chief Financial Officer, August 1997
to present, Vice President, December 1994 to present, Assistant Treasurer,
February 1996 to August 1997, Assistant Secretary, December 1994 to February
1996; Vice President and Controller, Jackson National Life Insurance Company.
THOMAS J. MEYER (Age 51), Vice President, Counsel and Secretary, December 1994
to present; Secretary, September 1994 to present, Vice President, and General
Counsel, March 1985 to present, Jackson National Life Insurance Company.
RICHARD MCLELLAN (Age 55), 1191 Carriageway North, East Lansing, MI 48823,
Trustee, December 1994 to present; Attorney, Dykema Gossett PLLC.
PETER MCPHERSON (Age 57), 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.
MARK D. NERUD (Age 31), Vice President and Assistant Treasurer, August 1997 to
present; Chief Operating Officer and Treasurer, July 1997 to present, Jackson
National Financial Services, Inc.; Assistant Vice President - Mutual Fund
Operations, March 1997 to present, Assistant Controller, October 1996 to October
1997, Senior Manager Mutual Fund Operations, April 1996 to October 1996, Jackson
National Life Insurance Company; Manager - Mutual Fund Accounting, May 1993 to
April 1996, Voyageur Asset Management Company; Manager - Financial Services,
June 1988 to May 1993, KPMG Peat Marwick.
AMY D. EISENBEIS (Age 33), Vice President and Assistant Secretary, August 1997
to present; Vice President, Secretary and Chief Legal Officer, January 1998 to
present, Assistant Secretary, June 1997 to January 1998, Jackson National
Financial Services, Inc.; Associate General Counsel, July 1995 to present,
Jackson National Life Insurance Company; Staff Attorney, January 1994 to July
1995, Waddell & Reed, Inc.; Staff Attorney, October 1991 to January 1994,
Security Benefit Life Insurance Company.
- -----------
*Trustees who are interested persons as defined in the Investment Company Act of
1940.
<PAGE>
On March 16, 1998, the officers and trustees of the Trust, as a group,
owned less than 1% of the then 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 $4,000 for each meeting they attend. For the year ended December 31, 1997,
the disinterested Trustees received the following fees for service as Trustee:
<TABLE>
<CAPTION>
Pension or Retirement
Aggregate Compensation from Benefits Accrued As Part Total Compensation from
Trustee Trust of Trust Expenses Trust and Fund Complex
------- ----- ----------------- ----------------------
<S> <C> <C> <C>
Joseph Frauenheim $23,500 0 $23,500
Richard McLellan 10,500 0 10,500
Peter McPherson 23,500 0 23,500
</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.
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 average annual total return for each Series (except
the PPM America/JNL Money Market Series) for the periods indicated was as
follows:
<TABLE>
<CAPTION>
Commencement
One Year Period of Operations
Ended to
December 31, 1997 December 31, 1997
----------------- -----------------
<S> <C> <C>
JNL Aggressive Growth Series* 12.67% 21.29%
JNL Capital Growth Series* 15.01% 24.83%
JNL Global Equities Series* 19.12% 30.64%
JNL/Alger Growth Series** 26.20% 16.73%
JNL/Eagle Core Equity Series*** 32.35% 30.37%
JNL/Eagle SmallCap Equity Series*** 27.64% 34.92%
JNL/Putnam Growth Series* 21.88% 29.29%
JNL/Putnam Value Equity Series* 21.82% 26.47%
PPM America/JNL Balanced Series* 18.43% 17.07%
PPM America/JNL High Yield Bond Series* 15.05% 13.00%
Salomon Brothers/JNL Global Bond Series* 10.66% 12.26%
Salomon Brothers/JNL U.S. Government and Quality Bond Series* 9.16% 7.07%
T. Rowe Price/JNL Established Growth Series* 29.47% 28.28%
T. Rowe Price/JNL International Equity Investment Series* 2.65% 8.95%
T. Rowe Price/JNL Mid-Cap Growth Series* 18.21% 27.22%
</TABLE>
* 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 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:
a-b 6
YIELD = 2[(---+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, 1997, for each of
the referenced Series was as follows:
PPM America/JNL Balanced Series 2.83%
PPM America/JNL High Yield Bond Series 8.35%
Salomon Brothers/JNL Global Bond Series 6.56%
Salomon Brothers/JNL U.S. Government
and Quality Bond Series 5.94%
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, 1997, was 5.13%.
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 PPM America/JNL Money Market Series' effective
yield for the seven-day period ended December 31, 1997, was 5.26%.
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, the Russell Midcap 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 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, from April 1, 1996
to December 31, 1996 were $1,884,328, and for the fiscal year ended December 31,
1997 were $7,264,087.
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; Alliance Capital Management L.P. ("Alliance") serves as
sub-adviser for the JNL/Alliance 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; Goldman Sachs Asset Management ("Goldman
Sachs") serves as sub-adviser for the Goldman Sachs/JNL Growth & Income Series;
J.P. Morgan Investment Management Inc. ("JPM") serves as sub-adviser for the
JNL/JPM International & Emerging Markets Series; Pacific Investment Management
Company ("PIMCO") serves as sub-adviser for the JNL/PIMCO Total Return Bond
Series; Lazard Asset Management ("Lazard") serves as sub-adviser for the
Lazard/JNL Small Cap Value and Lazard/JNL Mid Cap Value 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. ("Putnam") 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 Balanced, Salomon
Brothers/JNL U.S. Government & Quality Bond, Salomon Brothers/JNL High Yield
Bond and Salomon Brothers/JNL Global Bond Series; Standard & Poor's Investment
Advisory Services, Inc. ("SPIAS") serves as sub-adviser for the JNL/S&P
Conservative Growth Series I, JNL/S&P Moderate Growth Series I, JNL/S&P
Aggressive Growth Series I, JNL/S&P Very Aggressive Growth Series I, JNL/S&P
Equity Growth Series I, JNL/S&P Equity Aggressive Growth Series I, JNL/S&P
Conservative Growth Series II, JNL/S&P Moderate Growth Series II, JNL/S&P
Aggressive Growth Series II, JNL/S&P Very Aggressive Growth Series II, JNL/S&P
Equity Growth Series II, and JNL/S&P Equity Aggressive Growth Series II; 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.
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 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
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 Bank and Trust Company ("State Street"), 105 Rosemont
Road, Westwood, Massachusetts 02090, acts as custodian for the JNL Aggressive
Growth Series, JNL Capital Growth Series, JNL Global Equities Series, JNL/Alger
Growth Series, JNL/Alliance Growth Series, JNL/Eagle Core Equity Series,
JNL/Eagle SmallCap Equity Series, JNL/JPM International & Emerging Markets
Series, JNL/PIMCO Total Return Bond Series, JNL/Putnam Growth Series, JNL/Putnam
Value Equity Series, Goldman Sachs/JNL Growth & Income Series, Lazard/JNL Small
Cap Value Series, Lazard/JNL Mid Cap Value Series, PPM America/JNL Balanced
Series, PPM America/JNL High Yield Bond Series, PPM America/JNL Money Market
Series, Salomon Brothers/JNL Balanced Series, Salomon Brothers/JNL Global Bond
Series, Salomon Brothers/JNL High Yield 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. The JNL/S&P Conservative Growth Series I, JNL/S&P
Moderate Growth Series I, JNL/S&P Aggressive Growth Series I, JNL/S&P Very
Aggressive Growth Series I, JNL/S&P Equity Growth Series I, JNL/S&P Equity
Aggressive Growth Series I, JNL/S&P Conservative Growth Series II, JNL/S&P
Moderate Growth Series II, JNL/S&P Aggressive Growth Series II, JNL/S&P Very
Aggressive Growth Series II, JNL/S&P Equity Growth Series II. and JNL/S&P Equity
Aggressive Growth Series II act as their own custodian.
JNFSI is the transfer agent and dividend-paying agent for each Series
of the Trust.
Independent Accountants
The Series' independent accountants, Price Waterhouse LLP, 200 East
Randolph Drive, Chicago, Illinois 60601, audit and report on the Series' annual
financial statements, 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 transactions is "best
execution," i.e., execution at the most favorable prices and in the most
effective manner possible. JNFSI and the sub-advisers always attempt to achieve
best execution and have complete freedom as to the 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>
Fiscal year April 1, 1996 Commencement of
ended December to December 31, Operations to
31, 1997 1996* March 31, 1996
-------- ----- --------------
<S> <C> <C> <C>
JNL Aggressive Growth Series** $162,153 $16,981 $19,654
JNL Capital Growth Series** 147,014 34,515 16,905
JNL Global Equities Series** 453,347 47,800 72,359
JNL/Alger Growth Series*** 183,075 22,155 9,414
JNL/Eagle Core Equity Series**** 17,298 1,785 N/A
JNL/Eagle SmallCap Equity Series**** 33,313 4,389 N/A
JNL/Putnam Growth Series** 181,765 33,185 8,008
JNL/Putnam Value Equity Series** 139,522 3,587 2,888
PPM America/JNL Balanced Series** 43,630 17,054 5,077
PPM America/JNL High Yield Bond Series** 0 500 0
PPM America/JNL Money Market Series** 0 0 0
Salomon Brothers/JNL Global Bond Series** 0 0 1,399
Salomon Brothers/JNL U.S. Government and Quality Bond
Series** 0 0 0
T. Rowe Price/JNL Established Growth Series** 114,988 5,706 20,293
T. Rowe Price/JNL International Equity Investment Series** 142,628 17,105 63,341
T. Rowe Price/JNL Mid-Cap Growth Series** 164,887 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, 1997, 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/Alger Growth Series Morgan Stanley, Dean Witter Discover & Co $1,795,922
JNL/Putnam Growth Series Morgan Stanley, Dean Witter Discover & Co 851,400
JNL/Putnam Value Equity Series J.P. Morgan & Co. 1,065,540
PPM America/JNL Money Market Series Merrill Lynch & Co. 2,407,664
</TABLE>
Code of Ethics
To mitigate the possibility that a Series will be adversely affected by
personal trading of employees, the Trust, the Adviser and the Sub-Advisers have
adopted Codes of Ethics under Rule 17j-1 of the 1940 Act. These Codes contain
policies restricting securities trading in personal accounts of the portfolio
managers and others who normally come into possession of information on
portfolio transactions. These Codes comply, in all material respects, with the
recommendations of the Investment Company Institute.
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.
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, Martin Luther King Jr. holiday, 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 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 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 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
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. 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 annuity and life insurance contracts issued by 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.
<PAGE>
JNL SERIES TRUST
Financial Statements
<PAGE>
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 each of the sixteen Series
comprising the JNL Series Trust (hereafter referred to as the "Trust") at
December 31, 1997, 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, 1997 by correspondence with the custodian 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.
Chicago, Illinois
February 6, 1998
<PAGE>
JNL SERIES TRUST
STATEMENTS OF ASSETS AND LIABILITIES
December 31, 1997
<TABLE>
<CAPTION>
JNL JNL JNL JNL/Eagle JNL/Eagle
Aggressive Capital Global JNL/Alger Core SmallCap
Growth Growth Equities Growth Equity Equity
Series Series Series Series Series Series
---------- ------- ------ --------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
Assets
Investments in securities, at cost ..... $ 75,870,116 $ 61,149,807 $133,760,561 $ 76,262,289 $ 10,563,803 $ 12,913,464
============ ============ ============ ============ ============ ============
Investments in securities, at value .... $ 81,703,080 $ 73,937,968 $150,681,907 $ 88,020,185 $ 12,065,928 $ 14,348,909
Cash ................................... 59,059 95,038 206,832 -- -- --
Foreign currency ....................... 89,557 67,392 1,835,596 -- -- --
Receivables:
Dividends and interest .............. 14,373 18,713 38,203 54,156 22,281 7,387
Forward foreign currency
exchange contracts ............... 158,994 116,139 1,021,803 -- -- --
Foreign taxes recoverable ........... 4,500 2,413 71,498 -- 94 --
Fund shares sold .................... 36,940 61,370 102,179 55,105 7,839 8,334
Investment securities sold .......... 1,258,072 1,456,301 448,313 2,357,713 200,611 --
Reimbursement from Adviser .......... 5,405 -- 99,547 -- -- 1,639
------------ ------------ ------------ ------------ ------------ ------------
Total assets ........................... 83,329,980 75,755,334 154,505,878 90,487,159 12,296,753 14,366,269
------------ ------------ ------------ ------------ ------------ ------------
Liabilities
Payables:
Investment advisory fees ............ 61,473 57,061 125,168 69,069 8,712 10,337
Forward foreign currency
exchange contracts ............... 170,192 131,856 1,079,888 -- -- --
Fund shares redeemed ................ 44,413 20,726 529,720 42,647 404 461
Investment securities purchased ..... 4,178,454 1,776,524 1,694,928 4,477,557 378,644 850,034
Reverse repurchase agreements .......... -- -- -- -- -- --
Call options written, at value
(Premiums received $1,038) .......... -- -- -- -- 581 --
Other liabilities ...................... 5,104 20,368 25,899 21,039 11,944 12,058
------------ ------------ ------------ ------------ ------------ ------------
Total liabilities ...................... 4,459,636 2,006,535 3,455,603 4,610,312 400,285 872,890
------------ ------------ ------------ ------------ ------------ ------------
Net assets ............................. $ 78,870,344 $ 73,748,799 $151,050,275 $ 85,876,847 $ 11,896,468 $ 13,493,379
============ ============ ============ ============ ============ ============
Net assets consist of:
Paid-in capital ........................ $ 72,393,224 $ 61,090,023 $135,778,668 $ 73,023,895 $ 10,355,280 $ 11,860,477
Undistributed net investment income .... 381,611 -17,785 633,816 -- 133 390
Accumulated net realized gain (loss)
on investments and foreign
currency related items .............. 271,967 -94,586 -2,217,633 1,095,056 38,471 197,067
Net unrealized appreciation
(depreciation) on:
Investments ......................... 5,832,964 12,788,161 16,921,346 11,757,896 1,502,125 1,435,445
Foreign currency related items ...... -9,422 -17,014 -65,922 -- 2 --
Options written ..................... -- -- -- -- 457 --
------------ ------------ ------------ ------------ ------------ ------------
Net assets ............................. $ 78,870,344 $ 73,748,799 $151,050,275 $ 85,876,847 $ 11,896,468 $ 13,493,379
============ ============ ============ ============ ============ ============
Total shares outstanding (no par
value), unlimited shares
authorized .......................... 5,426,451 4,469,585 8,642,845 6,333,265 865,023 916,112
============ ============ ============ ============ ============ ============
Net asset value, offering and
redemption price per share .......... $ 14.53 $ 16.50 $ 17.48 $ 13.56 $ 13.75 $ 14.73
============ ============ ============ ============ ============ ============
</TABLE>
See notes to the financial statements.
<PAGE>
JNL SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES (continued)
<TABLE>
<CAPTION>
PPM PPM
JNL/Putnam PPM America/JNL America/JNL
JNL/Putnam Value America/JNL High Yield Money
Growth Equity Balanced Bond Market
Series Series Series Series Series
---------- ---------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Assets
Investments in securities, at cost ..... $ 74,166,450 $103,480,721 $ 55,447,930 $ 59,533,930 $ 41,810,074
============ ============ ============ ============ ============
Investments in securities, at value .... $ 84,739,666 $109,198,012 $ 59,053,344 $ 61,303,164 $ 41,810,074
Cash ................................... -- -- -- -- --
Foreign currency ....................... -- -- -- -- --
Receivables:
Dividends and interest .............. 73,895 208,562 513,740 1,278,353 8
Forward foreign currency
exchange contracts ............... -- -- -- -- --
Foreign taxes recoverable ........... -- 2,122 -- -- --
Fund shares sold .................... 360,342 293,429 199,767 190,180 41,732
Investment securities sold .......... 249,901 2,521,449 -- -- --
Reimbursement from Adviser .......... -- 19,709 -- -- --
------------ ------------ ------------ ------------ ------------
Total assets ........................... 85,423,804 112,243,283 59,766,851 62,771,697 41,851,814
------------ ------------ ------------ ------------ ------------
Liabilities
Payables:
Investment advisory fees ............ 60,730 78,326 36,101 37,515 20,397
Forward foreign currency
exchange contracts ............... -- -- -- -- --
Fund shares redeemed ................ 7,744 12,106 19,480 7,756 9,949
Investment securities purchased ..... 1,728,693 3,573,732 -- -- --
Reverse repurchase agreements .......... -- -- -- -- --
Call options written, at value
(Premiums received $1,038) .......... -- -- -- -- --
Other liabilities ...................... 14,185 14,097 16,779 14,762 13,621
------------ ------------ ------------ ------------ ------------
Total liabilities ...................... 1,811,352 3,678,261 72,360 60,033 43,967
------------ ------------ ------------ ------------ ------------
Net assets ............................. $ 83,612,452 $108,565,022 $ 59,694,491 $ 62,711,664 $ 41,807,847
============ ============ ============ ============ ============
Net assets consist of:
Paid-in capital ........................ $ 72,727,429 $102,587,093 $ 55,882,345 $ 60,738,884 $ 41,807,847
Undistributed net investment income .... 85,266 7,901 11,253 4,258 --
Accumulated net realized gain (loss)
on investments and foreign
currency related items .............. 226,541 252,737 195,479 199,288 --
Net unrealized appreciation (depreciation) on:
Investments ......................... 10,573,216 5,717,291 3,605,414 1,769,234 --
Foreign currency related items ...... -- -- -- -- --
Options written ..................... -- -- -- -- --
------------ ------------ ------------ ------------ ------------
Net assets ............................. $ 83,612,452 $108,565,022 $ 59,694,491 $ 62,711,664 $ 41,807,847
============ ============ ============ ============ ============
Total shares outstanding (no par
value), unlimited shares
authorized .......................... 4,922,609 6,453,704 4,570,872 5,462,564 41,807,847
============ ============ ============ ============ ============
Net asset value, offering and
redemption price per share .......... $ 16.99 $ 16.82 $ 13.06 $ 11.48 $ 1.00
============ ============ ============ ============ ============
</TABLE>
See notes to the financial statements.
<PAGE>
JNL SERIES TRUST
STATEMENTS OF ASSETS AND LIABILITIES (continued)
<TABLE>
<CAPTION>
T. Rowe
Salomon Salomon T. Rowe Price/JNL T. Rowe
Brothers/JNL Brothers/JNL Price/JNL International Price/JNL
Global U.S. Government Established Equity Mid-Cap
Bond & Quality Bond Growth Investment Growth
Series Series Series Series Series
------------ ------------ --------- ------------- ---------
<S> <C> <C> <C> <C> <C>
Assets
Investments in securities, at cost ..... $ 39,448,629 $ 31,752,904 $106,678,983 $ 73,454,612 $107,647,880
============ ============ ============ ============ ============
Investments in securities, at value .... $ 40,329,980 $ 32,441,788 $124,278,380 $ 78,308,997 $127,413,759
Cash ................................... -- 13,800 -- 1,329 --
Foreign currency ....................... 2,554 -- 39,663 318,604 262
Receivables:
Dividends and interest .............. 574,455 229,508 123,061 72,767 31,566
Forward foreign currency
exchange contracts ............... 44,231 -- -- 4 --
Foreign taxes recoverable ........... 255 -- 7,038 67,255 314
Fund shares sold .................... 23,222 39,788 183,864 32,831 142,538
Investment securities sold .......... -- 1,049,239 452,165 8 688,164
Reimbursement from Adviser .......... -- -- -- -- --
------------ ------------ ------------ ------------ ------------
Total assets ........................... 40,974,697 33,774,123 125,084,171 78,801,795 128,276,603
------------ ------------ ------------ ------------ ------------
Payables:
Investment advisory fees ............ 25,793 14,412 85,195 72,103 97,412
Forward foreign currency
exchange contracts ............... 7,663 -- 52 -- --
Fund shares redeemed ................ 3,339 971 20,483 12,651 51,353
Investment securities purchased ..... 4,159,327 5,889,298 939,418 6 1,057,297
Reverse repurchase agreements .......... -- 2,467,500 -- -- --
Call options written, at value
(Premiums received $1,038) .......... -- -- -- -- --
Other liabilities ...................... 53,743 13,409 17,079 32,387 18,272
------------ ------------ ------------ ------------ ------------
Total liabilities ...................... 4,249,865 8,385,590 1,062,227 117,147 1,224,334
------------ ------------ ------------ ------------ ------------
Net assets ............................. $ 36,724,832 $ 25,388,533 $124,021,944 $ 78,684,648 $127,052,269
============ ============ ============ ============ ============
Net assets consist of:
Paid-in capital ........................ $ 35,827,391 $ 24,671,400 $105,652,218 $ 74,767,969 $105,943,206
Undistributed net investment income .... -15,879 5,716 57,546 -69,263 --
Accumulated net realized gain (loss)
on investments and foreign
currency related items .............. -3,325 22,533 723,591 -866,483 1,343,181
Net unrealized appreciation
(depreciation) on:
Investments ......................... 881,351 688,884 17,589,318 4,854,385 19,765,879
Foreign currency related items ...... 35,294 -- -729 -1,960 3
Options written ..................... -- -- -- -- --
------------ ------------ ------------ ------------ ------------
Net assets ............................. $ 36,724,832 $ 25,388,533 $124,021,944 $ 78,684,648 $127,052,269
============ ============ ============ ============ ============
Total shares outstanding (no par
value), unlimited shares
authorized .......................... 3,302,198 2,374,135 7,937,589 6,506,743 7,315,779
============ ============ ============ ============ ============
Net asset value, offering and
redemption price per share .......... $ 11.12 $ 10.69 $ 15.62 $ 12.09 $ 17.37
============ ============ ============ ============ ============
</TABLE>
See notes to the financial statements.
<PAGE>
JNL SERIES TRUST
STATEMENTS OF OPERATIONS
For the Year Ended December 31, 1997
<TABLE>
<CAPTION>
JNL JNL JNL JNL/Eagle JNL/Eagle
Aggressive Capital Global JNL/Alger Core SmallCap JNL/Putnam
Growth Growth Equities Growth Equity Equity Growth
Series Series Series Series Series Series Series
----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income
Dividends..................... $317,704 $190,645 $1,191,385 $412,080 $121,218 $17,870 $587,612
Interest...................... 561,415 275,125 504,175 241,637 19,111 23,809 205,211
Foreign tax withholding....... (11,071) (8,037) (132,482) (2,212) (874) (131) (5,344)
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total investment
income........................ 868,048 457,733 1,563,078 651,505 139,455 41,548 787,479
----------- ----------- ----------- ----------- ----------- ----------- -----------
Expenses
Investment advisory fees...... 555,594 545,552 1,054,206 616,473 61,251 70,893 491,147
Custodian fees................ 73,243 36,073 304,044 12,613 7,078 2,576 22,877
Portfolio accounting fees..... 22,011 22,011 38,503 24,279 24,090 24,090 24,279
Professional fees............. 21,124 21,043 34,660 24,080 9,455 10,855 23,260
Other......................... 11,464 12,911 14,155 18,735 3,201 3,901 10,354
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total operating expenses......... 683,436 637,590 1,445,568 696,180 105,075 112,315 571,917
Less:
Reimbursement from Adviser.... 40,117 5,898 232,508 - 33,615 30,228 -
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net operating expenses before
interest expense and dividends
on short positions............ 643,319 631,692 1,213,060 696,180 71,460 82,087 571,917
----------- ----------- ----------- ----------- ----------- ----------- -----------
Interest expense.............. - - - - - - 13,626
Dividends on short positions.. - - - - - - 32,300
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net expenses..................... 643,319 631,692 1,213,060 696,180 71,460 82,087 617,843
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net investment income (loss)..... 224,729 (173,959) 350,018 (44,675) 67,995 (40,539) 169,636
----------- ----------- ----------- ----------- ----------- ----------- -----------
Realized and unrealized gains
(losses)
Net realized gain (loss) on:
Investments................... 3,168,146 250,781 2,376,160 5,005,844 237,222 247,335 408,288
Foreign currency related items 149,464 (105,156) 1,151,326 - - (2) (4)
Options written............... - - - - (4,015) - -
Short transactions............ - - - - - - 651,873
Futures transactions.......... (10,119) - (47,529) - - - -
Net change in unrealized
appreciation(depreciation) on:
Investments................... 3,997,177 10,161,826 10,283,961 8,093,212 1,422,396 1,221,736 10,282,868
Foreign currency related items (5,389) 55,218 (207,133) - 2 - -
Optionswritten................ - - - - 914 - -
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net realized and unrealized gains 7,299,279 10,362,669 13,556,785 13,099,056 1,656,519 1,469,069 11,343,025
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net increase in net assets
resulting from operations..... $7,524,008 $10,188,710 $13,906,803 $13,054,381 $1,724,514 $1,428,530 $11,512,661
=========== =========== =========== =========== =========== =========== ===========
</TABLE>
See notes to the financial statements.
<PAGE>
<TABLE>
<CAPTION>
PPM PPM Salomon
JNL/Putnam PPM America/JNL America/JNL Salomon Brothers/JNL
Value America/JNL High Yield Money Brothers/JNL U.S. Government
Equity Balanced Bond Market Global Bond & Quality Bond
Series Series Series Series Series Series
----------- -------------- ------------- -------------- -------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Investment income
Dividends..................... $1,223,694 $459,157 $44,134 - - -
Interest...................... 150,694 1,468,519 3,295,272 1,958,419 1,966,487 1,171,785
Foreign tax withholding....... (8,094) (716) - - - -
Total investment ----------- -------------- ------------- -------------- -------------- -----------------
income........................ 1,366,294 1,926,960 3,339,406 1,958,419 1,966,487 1,171,785
----------- -------------- ------------- -------------- -------------- -----------------
Expenses
Investment advisory fees...... 487,619 324,299 276,133 207,184 213,262 118,459
Custodian fees................ 61,800 14,607 11,299 11,699 17,464 5,314
Portfolio accounting fees..... 24,279 24,468 24,279 24,468 20,128 22,578
Professional fees............. 21,790 15,053 14,128 11,742 11,419 10,446
Other......................... 8,803 8,998 7,623 7,093 5,992 5,315
----------- -------------- ------------- -------------- -------------- -----------------
Total operating expenses......... 604,291 387,425 333,462 262,186 268,265 162,112
Less:
Reimbursement from Adviser.... 33,369 1,041 1,995 3,206 17,369 18,269
----------- -------------- ------------- -------------- -------------- -----------------
Net operating expenses before
interest expense and dividends
on short positions............ 570,922 386,384 331,467 258,980 250,896 143,843
----------- -------------- ------------- -------------- -------------- -----------------
Interest expense.............. - - - - 2,869 14,647
Dividends on short positions.. - - - - - -
----------- -------------- ------------- -------------- -------------- -----------------
Net expenses..................... 570,922 386,384 331,467 258,980 253,765 158,490
----------- -------------- ------------- -------------- -------------- -----------------
Net investment income (loss)..... 795,372 1,540,576 3,007,939 1,699,439 1,712,722 1,013,295
----------- -------------- ------------- -------------- -------------- -----------------
Realized and unrealized gains
(losses)
Net realized gain (loss) on:
Investments................... 4,469,530 2,477,967 1,066,669 - 76,786 13,329
Foreign currency related items (3) - - - 74,761 -
Options written............... - - - - - -
Short transactions............ - - - - - -
Futures transactions.......... - - - - - -
Net change in unrealized
appreciation (depreciation) on:
Investments................... 3,766,196 2,991,325 1,355,284 - 677,987 639,103
Foreign currency related items - - - - - -
Options written............... - - - - - -
----------- -------------- ------------- -------------- -------------- -----------------
Net realized and unrealized gains 8,235,723 5,469,292 2,421,953 - 880,489 652,432
----------- -------------- ------------- -------------- -------------- -----------------
Net increase in net assets
resulting from operations..... $9,031,095 $7,009,868 $5,429,892 $1,699,439 $2,593,211 $1,665,727
=========== =============== ============ ============== ============== =================
</TABLE>
See notes to the financial statements.
<PAGE>
<TABLE>
<CAPTION>
T. Rowe
T. Rowe Price/JNL T. Rowe
Price/JNL International Price/JNL
Established Equity Mid-Cap
Growth Investment Growth
Series Series Series
------ ------ ------
<S> <C> <C> <C>
Investment income
Dividends ...................... $ 840,106 $1,305,682 $ 251,866
Interest ....................... 277,139 194,449 462,710
Foreign tax withholding ........ (25,079) (150,818) (1,014)
---------- ---------- ----------
Total investment income ........... 1,092,166 1,349,313 713,562
---------- ---------- ----------
Expenses ..........................
Investment advisory fees ....... 657,716 742,729 841,570
Custodian fees ................. 37,046 79,709 25,953
Portfolio accounting fees ...... 22,200 38,573 23,712
Professional fees .............. 27,781 25,067 32,914
Other .......................... 13,067 13,873 17,265
---------- ---------- ----------
Total operating expenses .......... 757,810 899,951 941,414
Less:
Reimbursement from Adviser ..... -- 53,287 --
---------- ---------- ----------
Net operating expenses before
interest expense and dividends .
on short positions ............. 757,810 846,664 941,414
Interest expense ............... --
Dividends on short positions ... -- -- --
---------- ---------- ----------
Net expenses ...................... 757,810 846,664 941,414
---------- ---------- ----------
Net investment income (loss) ...... 334,356 502,649 (227,852)
---------- ---------- ----------
Realized and unrealized gains
(losses)
Net realized gain (loss) on:
Investments .................... 5,371,177 513,591 3,012,259
Foreign currency related items (22,021) (43,913) (9,918)
Options written................. -- -- --
Short transactions.............. -- -- --
Futures transactions............ -- -- --
Net change in unrealized
appreciation (depreciation) on:
Investments .................... 13,594,661 (279,483) 14,655,100
Foreign currency related items (785) (5,020) 3
Options written................. -- -- --
---------- ---------- ----------
Net realized and unrealized gains.. 18,943,032 185,175 17,657,444
---------- ---------- ----------
Net increase in net assets
resulting from operations ...... $19,277,388 $687,824 $17,429,592
=========== ========== ===========
</TABLE>
See notes to the financial statements.
<PAGE>
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
April 1, April 1, April 1,
Year ended 1996 to Year ended 1996 to Year ended 1996 to
December 31, December 31, December 31, December 31, December 31, December 31,
1997 1996 1997 1996 1997 1996
------------ ------------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net investment income (loss) ........ $ 224,729 $ 119,340 $ 173,959) $ 163,301 $ 350,018 $ 92,001
Net realized gain (loss) on:
Investments ...................... 3,158,027 602,416 250,781 (221,942) 2,328,631 1,196,113
Foreign currency related
items ......................... 149,464 9,765 (105,156) 28,945 1,151,326 (2,943)
Net change in unrealized
appreciation (depreciation) on:
Investments ...................... 3,997,177 999,505 10,161,826 872,041 10,283,961 4,236,085
Foreign currency related
items ......................... (5,389) (4,062) 55,218 (71,967) (207,133) 128,253
------------ ------------ ------------ ------------ ------------ ------------
Net increase in net assets
from operations .................. 7,524,008 1,726,964 10,188,710 770,378 13,906,803 5,649,509
------------ ------------ ------------ ------------ ------------ ------------
Distributions to shareholders:
From net investment income .......... -- (104,404) (82,884) (3) -- (238,326)
From net realized gains on
investment transactions .......... (2,833,974) (1,470,576) (157,215) (390,495) (5,237,204) (2,687,572)
Return of capital ................... -- (289,382) (331,198) -- -- (955,663)
------------ ------------ ------------ ------------ ------------ ------------
Total distributions to
shareholders ..................... (2,833,974) (1,864,362) (571,297) (390,498) (5,237,204) (3,881,561)
------------ ------------ ------------ ------------ ------------ ------------
Share transactions:
Proceeds from the sale of
shares ........................... 54,409,351 26,877,906 40,823,421 34,276,844 109,725,346 38,726,566
Reinvestment of distributions ....... 2,776,615 1,746,593 557,860 374,294 5,176,815 3,277,573
Cost of shares redeemed ............. (12,560,301) (7,459,511) (14,196,046) (7,662,400) (21,159,959) (11,274,162)
Net increase in net assets
from share transactions .......... 44,625,665 21,164,988 27,185,235 26,988,738 93,742,202 30,729,977
------------ ------------ ------------ ------------ ------------ ------------
Net increase in net assets ............. 49,315,699 21,027,590 36,802,648 27,368,618 102,411,801 32,497,925
Net assets beginning of
period .............................. 29,554,645 8,527,055 36,946,151 9,577,533 48,638,474 16,140,549
------------ ------------ ------------ ------------ ------------ ------------
Net assets end of period ............... $ 78,870,344 $ 29,554,645 $ 73,748,799 $ 36,946,151 $151,050,275 $ 48,638,474
============ ============ ============ ============ ============ ============
Undistributed net
investment income (loss) ............ $ 381,611 $ 7,694 $ (17,785) $ 133,876 $ 633,816 $ (149,359)
============ ============ ============ ============ ============ ============
</TABLE>
- ----------
*Commencement of operations.
See notes to the financial statements.
<PAGE>
JNL SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS (continued)
<TABLE>
<CAPTION>
JNL/Eagle Core JNL/Eagle SmallCap
JNL/Alger Growth Series Equity Series Equity SerieS
---------------------------- -------------------------- ---------------------------
Period from Period from Period from
April 1, September 16, September 16,
Year ended 1996 to Year ended 1996* to Year ended 1996* to
December 31, December 31, December 31, December 31, December 31, December 31,
1997 1996 1997 1996 1997 1996
------------ ------------ ------------ ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net investment income (loss) ........ $ (44,675) $ (3,590) $ 67,995 $ 4,657 $ (40,539) $ (1,017)
Net realized gain (loss) on:
Investments ...................... 5,005,844 (523,886) 233,207 (4,427) 247,335 (9,337)
Foreign currency related
items ......................... -- -- -- -- (2) --
Net change in unrealized
appreciation (depreciation) on:
Investments ...................... 8,093,212 3,281,071 1,423,310 79,272 1,221,736 213,709
Foreign currency related
items ......................... -- -- 2 -- -- --
------------ ------------ ------------ ------------ ------------- ------------
Net increase in net assets
from operations .................. 13,054,381 2,753,595 1,724,514 79,502 1,428,530 203,355
------------ ------------ ------------ ------------ ------------- ------------
Distributions to shareholders:
From net investment income .......... -- -- (67,862) (4,657) -- --
From net realized gains on
investment transactions .......... (3,165,534) -- (190,309) -- -- --
Return of capital ................... -- -- -- (320) -- --
------------ ------------ ------------ ------------ ------------- ------------
Total distributions to
shareholders ..................... (3,165,534) -- (258,171) (4,977) -- --
------------ ------------ ------------ ------------ ------------- ------------
Share transactions:
Proceeds from the sale of
shares ........................... 45,948,085 34,332,656 8,561,855 2,027,399 12,054,510 1,760,997
Reinvestment of distributions ....... 3,096,106 -- 227,752 2,270 -- --
Cost of shares redeemed ............. (11,308,282) (7,483,397) (313,679) (149,997) (1,933,750) (20,263)
------------ ------------ ------------ ------------ ------------- ------------
Net increase in net assets
from share transactions .......... 37,735,909 26,849,259 8,475,928 1,879,672 10,120,760 1,740,734
------------ ------------ ------------ ------------ ------------- ------------
Net increase in net assets ............. 47,624,756 29,602,854 9,942,271 1,954,197 11,549,290 1,944,089
Net assets beginning of
period .............................. 38,252,091 8,649,237 1,954,197 -- 1,944,089 --
------------ ------------ ------------ ------------ ------------- ------------
Net assets end of period ............... $ 85,876,847 $ 38,252,091 $ 11,896,468 $ 1,954,197 $ 13,493,379 $ 1,944,089
============ ============ ============ ============ ============= ============
Undistributed net
investment income (loss) ............ $ -- $ -- $ 133 $ -- $ 390 $ --
============ ============ ============ ============ ============= ============
</TABLE>
- ----------
* Commencement of operations.
See notes to financial statements.
<PAGE>
JNL SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS (continued)
<TABLE>
<CAPTION>
JNL/Putnam JNL/Putnam Value PPM America/JNL
Growth Series Equity Series Balanced Series
--------------------------- ---------------------------- ----------------------------
Period from Period from Period from
April 1, April 1, April 1,
Year ended 1996 to Year ended 1996 to Year ended 1996 to
December 31, December 31, December 31, December 31, December 31, December 31,
1997 1996 1997 1996 1997 1996
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net investment income (loss) ........ $ 169,636 $ 80,288 $ 795,372 $ 174,463 $ 1,540,576 $ 279,327
Net realized gain (loss) on:
Investments ...................... 1,060,161 1,130,393 4,469,530 299,700 2,477,967 933,110
Foreign currency related
items ......................... (4) -- (3) -- -- --
Net change in unrealized
appreciation (depreciation) on:
Investments ...................... 10,282,868 152,651 3,766,196 1,455,960 2,991,325 476,858
Foreign currency related
items ......................... -- -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------
Net increase in net assets
from operations .................. 11,512,661 1,363,332 9,031,095 1,930,123 7,009,868 1,689,295
------------ ------------ ------------ ------------ ------------ ------------
Distributions to shareholders:
From net investment income .......... (84,366) (83,226) (792,740) (183,956) (1,524,222) (301,815)
From net realized gain on
investment transactions .......... (1,494,204) (608,389) (4,348,955) (226,911) (2,918,420) (364,079)
Return of capital ................... -- -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------
Total distributions to
shareholders ..................... (1,578,570) (691,615) (5,141,695) (410,867) (4,442,642) (665,894)
------------ ------------ ------------ ------------ ------------ ------------
Share transactions:
Proceeds from the sale of
shares ........................... 73,766,092 21,124,451 87,596,492 15,648,559 33,426,507 21,937,839
Reinvestment of distributions ....... 1,560,371 673,981 5,112,708 398,998 4,400,386 652,446
Cost of shares redeemed ............. (24,451,617) (2,184,704) (5,794,256) (3,171,440) (5,118,205) (3,955,738)
Net increase in net assets
from share transactions .......... 50,874,846 19,613,728 86,914,944 12,876,117 32,708,688 18,634,547
Net increase in net assets ............. 60,808,937 20,285,445 90,804,344 14,395,373 35,275,914 19,657,948
Net assets beginning of
period .............................. 22,803,515 2,518,070 17,760,678 3,365,305 24,418,577 4,760,629
Net assets end of period ............... $ 83,612,452 $ 22,803,515 $108,565,022 $ 17,760,678 $ 59,694,491 $ 24,418,577
============ ============ ============ ============ ============ ============
Undistributed net
investment income (loss) ............ $ 85,266 $ -- $ 7,901 $ 5,272 $ 11,253 $ 2,086
============ ============ ============ ============ ============ ============
</TABLE>
- ----------
* Commencement of operations.
See notes to the financial statements.
<PAGE>
JNL SERIES TRUST
STATEMENT OF CHANGES IN NET ASSETS (continued)
<TABLE>
<CAPTION>
PPM America/JNL PPM America/JNL Salomon Brothers/JNL
High Yield Bond Series Money Market Series Global Bond Series
------------------------------ ------------------------- ----------------------------
Period from Period from Period from
April 1, April 1, April 1,
Year ended 1996 to Year ended 1996 to Year ended 1996 to
December 31, December 31, December 31, December 31, December 31, December 31,
1997 1996 1997 1996 1997 1996
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net investment income (loss) ........ $ 3,007,939 $ 691,766 $ 1,699,439 $ 614,491 $ 1,712,722 $ 574,698
Net realized gain (loss) on:
Investments ...................... 1,066,669 217,828 -- -- 76,786 275,846
Foreign currency related
items ......................... -- -- -- -- 74,761 57,170
Net change in unrealized
appreciation (depreciation) on:
Investments ...................... 1,355,284 383,145 -- -- 677,987 178,039
Foreign currency related
items ......................... -- -- -- -- 50,955 (21,421)
Net increase in net assets
from operations .................. 5,429,892 1,292,739 1,699,439 614,491 2,593,211 1,064,332
Distributions to shareholders:
From net investment income .......... (3,009,722) (798,203) (1,699,439) (614,491) (1,801,495) (754,598)
From net realized gain on
investment transactions .......... (1,036,946) (23,388) -- -- (164,331) (280,691)
Return of capital ................... -- -- -- -- (33,012) --
------------ ------------ ------------ ------------ ------------ ------------
Total distributions to
shareholders ..................... (4,046,668) (821,591) (1,699,439) (614,491) (1,998,838) (1,035,289)
------------ ------------ ------------ ------------ ------------ ------------
Share transactions:
Proceeds from the sale of
shares ........................... 51,335,721 12,401,767 87,270,526 43,176,521 26,946,293 9,953,802
Reinvestment of distributions ....... 4,011,473 790,186 1,658,199 606,298 1,962,974 870,854
Cost of shares redeemed ............. (7,415,150) (6,422,234) (70,873,065) (26,846,271) (5,261,751) (4,750,819
------------ ------------ ------------ ------------ ------------ ------------)
Net increase in net assets
from share transactions .......... 47,932,044 6,769,719 18,055,660 16,936,548 23,647,516 6,073,837
------------ ------------ ------------ ------------ ------------ ------------
Net increase in net assets ............. 49,315,268 7,240,867 18,055,660 16,936,548 24,241,889 6,102,880
Net assets beginning of
period .............................. 13,396,396 6,155,529 23,752,187 6,815,639 12,482,943 6,380,063
------------ ------------ ------------ ------------ ------------ ------------
Net assets end of period ............... $ 62,711,664 $ 13,396,396 $ 41,807,847 $ 23,752,187 $ 36,724,832 $ 12,482,943
============ ============ ============ ============ ============ ============
Undistributed net
investment income (loss) ............ $ 4,258 $6,041 $ $ -- $ (15,879) $ 24,906
============ ============ ============ ============ ============ ============
</TABLE>
- ----------
* Commencement of operations.
See notes to financial statements.
<PAGE>
JNL SERIES TRUST
STATEMENT OF CHANGES IN NET ASSETS (continued)
<TABLE>
<CAPTION>
Salomon Brothers/JNL T. Rowe Price/JNL
U.S. Government T. Rowe Price/JNL International
& Quality Bond Series Established Growth Series Equity Investment Series
--------------------------- ---------------------------- ---------------------------
Period from Period from Period from
April 1, April 1, April 1,
Year ended 1996 to Year ended 1996 to Year ended 1996 to
December 31, December 31, December 31, December 31, December 31, December 31,
1997 1996 1997 1996 1997 1996
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net investment income (loss) ........ $ 1,013,295 $ 288,314 $ 334,356 $ 93,779 $ 502,649 $ 294,949
Net realized gain (loss) on:
Investments ...................... 13,329 29,022 5,371,177 93,499 513,591 203,836
Foreign currency related
items ......................... -- -- (22,021) (12,360) (43,913) 25,484
Net change in unrealized
appreciation (depreciation) on:
Investments ...................... 639,103 82,805 13,594,661 3,384,049 (279,483) 2,679,873
Foreign currency related
items ......................... -- -- (785) 44 (5,020) 2,709
------------ ------------ ------------ ------------ ------------ ------------
Net increase in net assets
from operations .................. 1,665,727 400,141 19,277,388 3,559,011 687,824 3,206,851
------------ ------------ ------------ ------------ ------------ ------------
Distributions to shareholders:
From net investment income .......... (965,070) (318,115) (250,893) (91,356) (531,066) (465,733)
From net realized gain on
investment transactions .......... (43,260) (30,967) (4,612,029) (212,086) (1,459,893) (51,200)
Return of capital ................... -- -- -- (1,234,953) -- --
------------ ------------ ------------ ------------ ------------ ------------
Total distributions to
shareholders ..................... (1,008,330) (349,082) (4,862,922) (1,538,395) (1,990,959) (516,933)
------------ ------------ ------------ ------------ ------------ ------------
Share transactions:
Proceeds from the sale of
shares ........................... 18,344,542 8,748,229 84,604,291 27,757,264 38,069,689 22,581,023
Reinvestment of distributions ....... 986,266 330,365 4,813,632 1,489,773 1,367,879 255,509
Cost of shares redeemed ............. (4,431,412) (2,304,702) (12,101,386) (7,748,754) (7,654,114) (1,533,092)
Net increase in net assets
from share transactions .......... 14,899,396 6,773,892 77,316,537 21,498,283 31,783,454 21,303,440
Net increase in net assets ............. 15,556,793 6,824,951 91,731,003 23,518,899 30,480,319 23,993,358
Net assets beginning of
period .............................. 9,831,740 3,006,789 32,290,941 8,772,042 48,204,329 24,210,971
------------ ------------ ------------ ------------ ------------ ------------
Net assets end of period ............... $ 25,388,533 $ 9,831,740 $124,021,944 $ 32,290,941 $ 78,684,648 $ 48,204,329
============ ============ ============ ============ ============ ============
Undistributed net
investment income (loss) ............ $5,716 $ -- $ 57,546 $ (3,896) $ (69,263) $ 65,539
============ ============ ============ ============ ============ ============
</TABLE>
- ----------
* Commencement of operations.
See notes to the financial statements.
<PAGE>
JNL SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS ( continued)
T. Rowe Price/JNL
Mid-Cap Growth Series
---------------------------
Period from
April 1,
Year ended 1996 to
December 31, December 31,
1997 1996
------------ ------------
Operations:
Net investment income (loss) ........ $ (227,852) $ (39,345)
Net realized gain (loss) on:
Investments ...................... 3,012,259 750,795
Foreign currency related
items ......................... (9,918) (3)
Net change in unrealized
appreciation (depreciation) on:
Investments ...................... 14,655,100 3,708,604
Foreign currency related
items ......................... 3 --
------------ ------------
Net increase in net assets
from operations .................. 17,429,592 4,420,051
------------ ------------
Distributions to shareholders:
From net investment income .......... -- (144,094)
From net realized gain on
investment transactions .......... (1,652,413) (1,107,685)
Return of capital ................... -- --
------------ ------------
Total distributions to
shareholders ..................... (1,652,413) (1,251,779)
------------ ------------
Share transactions:
Proceeds from the sale of
shares ........................... 76,676,391 41,147,930
Reinvestment of distributions ....... 1,622,324 1,198,205
Cost of shares redeemed ............. (14,128,114) (8,955,066)
------------ ------------
Net increase in net assets
from share transactions .......... 64,170,601 33,391,069
------------ ------------
Net increase in net assets ............. 79,947,780 36,559,341
Net assets beginning of
period .............................. 47,104,489 10,545,148
------------ ------------
Net assets end of period ............... $127,052,269 $ 47,104,489
============ ============
Undistributed net
investment income (loss) ............ $ -- $ (301)
============ ============
- ----------
* Commencement of operations.
See notes to the financial statements.
<PAGE>
JNL SERIES TRUST
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
JNL Aggressive JNL Capital
Growth Series Growth Series
---------------------------------------------------- -------------
April 1, May 15,
Year ended 1996 to 1995* Year ended
December 31, December 31, to March 31, December 31,
1997 1996 1996 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Selected Per Share Data
Net asset value, beginning of period $13.38 $13.13 $10.00 $14.46
Income from investment operations:
Net investment income (loss) 0.04 0.05 0.01 (0.06)
Net realized and unrealized gains on investments
and foreign currency related items 1.65 1.10 3.53 2.23
Total income from investment operations 1.69 1.15 3.54 2.17
Less distributions:
From net investment income - (0.05) - (0.02)
From net realized gains on investment
transactions (0.54) (0.71) (0.41) (0.04)
Return of capital - (0.14) - (0.07)
Total distributions (0.54) (0.90) (0.41) (0.13)
Net increase 1.15 0.25 3.13 2.04
Net asset value, end of period $14.53 $13.38 $13.13 $16.50
Total Return (a) 12.67% 8.72% 35.78% 15.01%
Ratios and Supplemental Data
Net assets, end of period (in thousands) $78,870 $29,555 $8,527 $73,749
Ratio of net operating expenses to average
net assets (b) (c) 1.10% 1.09% 1.09% 1.10%
Ratio of net investment income to average
net assets (b) (c) 0.39% 0.77% 0.27% (0.30)%
Ratio of interest expense and dividends on
short positions to average net assets - - - -
Portfolio turnover 137.26% 85.22% 163.84% 131.43%
Average commission rate paid (d) $0.0075 $0.0242 n/a $0.0292
Ratio information assuming no expense
reimbursement or fees paid indirectly
Ratio of expenses to average net assets (b) 1.17% 1.40% 2.77% 1.11%
Ratio of net investment income to average
net assets (b) 0.32% 0.46% (1.41)% (0.31)%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
JNL Capital
Growth Series JNL Global
(continued) Equities Series
-------------------------------- ---------------------------------
Period from Period from Period from
April 1, May 15, April 1,
1996 to 1995* Year ended 1996 to
December 31, to March 31, December 31, December 31,
1996 1996 1997 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Selected Per Share Data
Net asset value, beginning of period $13.86 $10.00 $15.20 $13.75
Income from investment operations:
Net investment income (loss) 0.06 - 0.07 0.03
Net realized and unrealized gains on investments
and foreign currency related items 0.70 4.70 2.84 2.72
Total income from investment operations 0.76 4.70 2.91 2.75
Less distributions:
From net investment income - - - (0.08)
From net realized gains on investment
transactions (0.16) (0.84) (0.63) (0.90)
Return of capital - - - (0.32)
Total distributions (0.16) (0.84) (0.63) (1.30)
Net increase 0.60 3.86 2.28 1.45
Net asset value, end of period $14.46 $13.86 $17.48 $15.20
Total Return (a) 5.45% 47.94% 19.12% 19.99%
Ratios and Supplemental Data
Net assets, end of period (in thousands) $36,946 $9,578 $151,050 $48,638
Ratio of net operating expenses to average
net assets (b) (c) 1.09% 1.09% 1.15% 1.14%
Ratio of net investment income to average
net assets (b) (c) 0.91% (0.49)% 0.33% 0.37%
Ratio of interest expense and dividends on
short positions to average net assets - - - -
Portfolio turnover 115.88% 128.56% 97.21% 52.02%
Average commission rate paid (d) $0.0196 n/a $0.0064 $0.0162
Ratio information assuming no expense
reimbursement or fees paid indirectly
Ratio of expenses to average net assets (b) 1.27% 2.08% 1.37% 1.63%
Ratio of net investment income to average
net assets (b) 0.73% (1.48)% 0.11% (0.12)%
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
JNL Global
Equities Series JNL/Alger
(continued) Growth Series
------------ ---------------------------------------------------
Period from Period from Period from
May 15, April 1, October 16,
1995* Year ended 1996 to 1995*
to March 31, December 31, December 31, to March 31,
1996 1997 1996 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Selected Per Share Data
Net asset value, beginning of period $10.00 $11.16 $10.38 $10.00
Income from investment operations:
Net investment income (loss) 0.10 (0.01) - -
Net realized and unrealized gains on investments
and foreign currency related items 4.02 2.93 0.78 0.38
Total income from investment operations 4.12 2.92 0.78 0.38
Less distributions:
From net investment income - - - -
From net realized gains on investment
transactions (0.37) (0.52) - -
Return of capital - - - -
Total distributions (0.37) (0.52) - -
Net increase 3.75 2.40 0.78 0.38
Net asset value, end of period $13.75 $13.56 $11.16 $10.38
Total Return (a) 41.51% 26.20% 7.51% 3.80%
Ratios and Supplemental Data
Net assets, end of period (in thousands) $16,141 $85,877 $38,252 $8,649
Ratio of net operating expenses to average
net assets (b) (c) 1.15% 1.10% 1.07% 1.03%
Ratio of net investment income to average
net assets (b) (c) 0.39% (0.07)% (0.02)% (0.17)%
Ratio of interest expense and dividends on
short positions to average net assets - - - -
Portfolio turnover 142.36% 125.44% 59.92% 50.85%
Average commission rate paid (d) n/a $0.0678 $0.0441 n/a
Ratio information assuming no expense
reimbursement or fees paid indirectly
Ratio of expenses to average net assets (b) 2.25% 1.10% 1.19% 1.89%
Ratio of net investment income to average
net assets (b) (0.71)% (0.07)% (0.14)% (1.03)%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
JNL/Eagle Core
Equity Series
-----------------------------------
Period from
September 16,
Year ended 1996* to
December 31, December 31,
1997 1996
------------ ------------
<S> <C> <C>
Selected Per Share Data
Net asset value, beginning of period $10.62 $10.00
Income from investment operations:
Net investment income (loss) 0.08 0.03
Net realized and unrealized gains on investments
and foreign currency related items 3.35 0.62
Total income from investment operations 3.43 0.65
Less distributions:
From net investment income (0.08) (0.03)
From net realized gains on investment
transactions (0.22) -
Return of capital - -
Total distributions (0.30) (0.03)
Net increase 3.13 0.62
Net asset value, end of period $13.75 $10.62
Total Return (a) 32.35% 6.47%
Ratios and Supplemental Data
Net assets, end of period (in thousands) $11,896 $1,954
Ratio of net operating expenses to average
net assets (b) (c) 1.05% 1.05%
Ratio of net investment income to average
net assets (b) (c) 1.00% 1.10%
Ratio of interest expense and dividends on
short positions to average net assets - -
Portfolio turnover 51.48% 1.36%
Average commission rate paid (d) $0.0572 $0.0452
Ratio information assuming no expense
reimbursement or fees paid indirectly
Ratio of expenses to average net assets (b) 1.54% 4.57%
Ratio of net investment income to average
net assets (b) 0.51% (2.42)%
</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 for the periods ended December 31, 1996 and March 31, 1996.
(b) Annualized for the periods ended December 31, 1996 and March 31, 1996.
(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.
<PAGE>
JNL SERIES TRUST
FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
JNL/Eagle
SmallCap JNL/Putnam
Equity Series Growth Series
----------------------------------- ------------------------------
Period from Period from
September 16, April 1,
Year ended 1996* to Year ended 1996 to
December 31, December 31, December 31, December 31,
1997 1996 1997 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Selected Per Share Data
Net asset value, beginning of period $11.54 $10.00 $14.21 $12.50
Income from investment operations:
Net investment income (loss) (0.07) (0.01) 0.04 0.04
Net realized and unrealized gains on investments
and foreign currency related items 3.26 1.55 3.07 2.12
Total income from investment operations 3.19 1.54 3.11 2.16
Less distributions:
From net investment income - - (0.02) (0.05)
From net realized gains on investment
transactions - - (0.31) (0.40)
Return of capital - - - -
Total distributions - - (0.33) (0.45)
Net increase 3.19 1.54 2.78 1.71
Net asset value, end of period $14.73 $11.54 $16.99 $14.21
Total Return (a) 27.64% 15.40% 21.88% 17.28%
Ratios and Supplemental Data
Net assets, end of period (in thousands) $13,493 $1,944 $83,612 $22,804
Ratio of net operating expenses to average
net assets (b) (c) 1.10% 1.10% 1.05% 1.04%
Ratio of net investment income to average
net assets (b) (c) (0.54)% (0.26)% 0.31% 0.94%
Ratio of interest expense and dividends on
short positions to average net assets - - 0.08% -
Portfolio turnover 60.78% 28.01% 194.81% 184.33%
Average commission rate paid (d) $0.0574 $0.0264 $0.0459 $0.0175
Ratio information assuming no expense
reimbursement or fees paid indirectly
Ratio of expenses to average net assets (b) 1.51% 4.77% 1.05% 1.27%
Ratio of net investment income to average
net assets (b) (0.95)% (3.93)% 0.31% 0.71%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
JNL/Putnam JNL/Putnam
Growth Series Value Equity
(continued) Series
------------ ---------------------------------------------------
Period from Period from Period from
May 15, April 1, May 15,
1995* Year ended 1996 to 1995*
to March 31, December 31, December 31, to March 31,
1996 1997 1996 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Selected Per Share Data
Net asset value, beginning of period $10.00 $14.50 $12.77 $10.00
Income from investment operations:
Net investment income (loss) 0.01 0.13 0.10 0.23
Net realized and unrealized gains on investments
and foreign currency related items 3.66 3.03 1.97 2.86
Total income from investment operations 3.67 3.16 2.07 3.09
Less distributions:
From net investment income - (0.13) (0.15) (0.17)
From net realized gains on investment
transactions (1.17) (0.71) (0.19) (0.15)
Return of capital - - - -
Total distributions (1.17) (0.84) (0.34) (0.32)
Net increase 2.50 2.32 1.73 2.77
Net asset value, end of period $12.50 $16.82 $14.50 $12.77
Total Return (a) 37.69% 21.82% 16.25% 31.14%
Ratios and Supplemental Data
Net assets, end of period (in thousands) $2,518 $108,565 $17,761 $3,365
Ratio of net operating expenses to average
net assets (b) (c) 0.95% 1.03% 0.85% 0.87%
Ratio of net investment income to average
net assets (b) (c) 0.28% 1.43% 2.29% 2.33%
Ratio of interest expense and dividends on
short positions to average net assets - - - -
Portfolio turnover 255.03% 112.54% 13.71% 30.12%
Average commission rate paid (d) n/a $0.0366 $0.0259 n/a
Ratio information assuming no expense
reimbursement or fees paid indirectly
Ratio of expenses to average net assets (b) 5.38% 1.09% 1.53% 2.28%
Ratio of net investment income to average
net assets (b) (4.15)% 1.37% 1.61% 0.91%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PPM
PPM America/JNL
America/JNL High Yield Bond
Balanced Series Series
---------------------------------------------------- --------------
Period from Period from
April 1, May 15,
Year ended 1996 to 1995* Year ended
December 31, December 31, to March 31, December 31,
1997 1996 1996 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Selected Per Share Data
Net asset value, beginning of period $11.92 $11.17 $10.00 $10.67
Income from investment operations:
Net investment income (loss) 0.36 0.10 0.25 0.59
Net realized and unrealized gains on investments
and foreign currency related items 1.83 0.98 1.40 1.02
Total income from investment operations 2.19 1.08 1.65 1.61
Less distributions:
From net investment income (0.36) (0.15) (0.19) (0.59)
From net realized gains on investment
transactions (0.69) (0.18) (0.29) (0.21)
Return of capital - - - -
Total distributions (1.05) (0.33) (0.48) (0.80)
Net increase 1.14 0.75 1.17 0.81
Net asset value, end of period $13.06 $11.92 $11.17 $11.48
Total Return (a) 18.43% 9.72% 16.60% 15.05%
Ratios and Supplemental Data
Net assets, end of period (in thousands) $59,694 $24,419 $4,761 $62,712
Ratio of net operating expenses to average
net assets (b) (c) 0.93% 1.04% 1.01% 0.90%
Ratio of net investment income to average
net assets (b) (c) 3.72% 2.39% 2.99% 8.15%
Ratio of interest expense and dividends on
short positions to average net assets - - - -
Portfolio turnover 160.88% 158.15% 115.84% 189.25%
Average commission rate paid (d) $0.0321 $0.0494 n/a n/a
Ratio information assuming no expense
reimbursement or fees paid indirectly
Ratio of expenses to average net assets (b) 0.94% 1.22% 3.71% 0.90%
Ratio of net investment income to average
net assets (b) 3.71% 2.21% 0.29% 8.15%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PPM
America/JNL
High Yield Bond
Series
(continued)
--------------------------------
Period from Period from
April 1, May 15,
1996 to 1995*
December 31, to March 31,
1996 1996
------------ ------------
<S> <C> <C>
Selected Per Share Data
Net asset value, beginning of period $10.23 $10.00
Income from investment operations:
Net investment income (loss) 0.51 0.73
Net realized and unrealized gains on investments
and foreign currency related items 0.64 0.04
Total income from investment operations 1.15 0.77
Less distributions:
From net investment income (0.69) (0.54)
From net realized gains on investment
transactions (0.02) -
Return of capital - -
Total distributions (0.71) (0.54)
Net increase 0.44 0.23
Net asset value, end of period $10.67 $10.23
Total Return (a) 11.24% 7.82%
Ratios and Supplemental Data
Net assets, end of period (in thousands) $13,396 $6,156
Ratio of net operating expenses to average
net assets (b) (c) 0.88% 0.88%
Ratio of net investment income to average
net assets (b) (c) 8.64% 8.34%
Ratio of interest expense and dividends on
short positions to average net assets - -
Portfolio turnover 113.08% 186.21%
Average commission rate paid (d) n/a n/a
Ratio information assuming no expense
reimbursement or fees paid indirectly
Ratio of expenses to average net assets (b) 1.21% 1.50%
Ratio of net investment income to average
net assets (b) 8.31% 7.72%
</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 for the periods ended December 31, 1996 and March 31, 1996.
(b) Annualized for the periods ended December 31, 1996 and March 31, 1996.
(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.
<PAGE>
JNL SERIES TRUST
FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
PPM Salomon
America/JNL Brothers/JNL
Money Market Global Bond
Series Series
-------------------------------------------------- --------------
Period from Period from
April 1, May 15,
Year ended 1996 to 1995* Year ended
December 31, December 31, to March 31, December 31,
1997 1996 1996 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Selected Per Share Data
Net asset value, beginning of period $1.00 $1.00 $1.00 $10.63
Income from investment operations:
Net investment income (loss) 0.05 0.04 0.04 0.54
Net realized and unrealized gains on investments
and foreign currency related items - - - 0.59
Total income from investment operations 0.05 0.04 0.04 1.13
Less distributions:
From net investment income (0.05) (0.04) (0.04) (0.58)
From net realized gains on investment
transactions - - - (0.05)
Return of capital - - - (0.01)
Total distributions (0.05) (0.04) (0.04) (0.64)
Net increase - - - 0.49
Net asset value, end of period $1.00 $1.00 $1.00 $11.12
Total Return (a) 5.01% 3.61% 4.59% 10.66%
Ratios and Supplemental Data
Net assets, end of period (in thousands) $41,808 $23,752 $6,816 $36,725
Ratio of net operating expenses to average
net assets (b) (c) 0.75% 0.75% 0.75% 1.00%
Ratio of net investment income to average
net assets (b) (c) 4.92% 4.75% 5.06% 6.83%
Ratio of interest expense and dividends on
short positions to average net assets - - - 0.01%
Portfolio turnover - - - 134.55%
Average commission rate paid (d) n/a n/a n/a n/a
Ratio information assuming no expense
reimbursement or fees paid indirectly
Ratio of expenses to average net assets (b) 0.76% 0.85% 1.30% 1.07%
Ratio of net investment income to average
net assets (b) 4.91% 4.65% 4.51% 6.76%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Salomon Salomon
Brothers/JNL Brothers/JNL
Global Bond U.S. Government
Series & Quality Bond
(continued) Series
--------------------------------- --------------------------------
Period from Period from Period from
April 1, May 15, April 1,
1996 to 1995* Year ended 1996 to
December 31, to March 31, December 31, December 31,
1996 1996 1997 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Selected Per Share Data
Net asset value, beginning of period $10.46 $10.00 $10.20 $10.09
Income from investment operations:
Net investment income (loss) 0.42 0.81 0.44 0.24
Net realized and unrealized gains on investments
and foreign currency related items 0.70 0.24 0.49 0.24
Total income from investment operations 1.12 1.05 0.93 0.48
Less distributions:
From net investment income (0.69) (0.56) (0.42) (0.34)
From net realized gains on investment
transactions (0.26) (0.03) (0.02) (0.03)
Return of capital - - - -
Total distributions (0.95) (0.59) (0.44) (0.37)
Net increase 0.17 0.46 0.49 0.11
Net asset value, end of period $10.63 $10.46 $10.69 $10.20
Total Return (a) 10.68% 10.74% 9.16% 4.82%
Ratios and Supplemental Data
Net assets, end of period (in thousands) $12,483 $6,380 $25,389 $9,832
Ratio of net operating expenses to average
net assets (b) (c) 0.99% 1.00% 0.85% 0.84%
Ratio of net investment income to average
net assets (b) (c) 7.52% 9.01% 5.99% 5.72%
Ratio of interest expense and dividends on
short positions to average net assets - - 0.09% -
Portfolio turnover 109.85% 152.89% 378.59% 218.50%
Average commission rate paid (d) n/a n/a n/a n/a
Ratio information assuming no expense
reimbursement or fees paid indirectly
Ratio of expenses to average net assets (b) 1.44% 2.14% 0.96% 1.37%
Ratio of net investment income to average
net assets (b) 7.07% 7.87% 5.88% 5.19%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Salomon
Brothers/JNL
U.S. Government T. Rowe
& Quality Bond Price/JNL
Series Established
(contiinued) Growth Series
--------------- ----------------------------------------------------
Period from Period from Period from
May 15, April 1, May 15,
1995* Year ended 1996 to 1995*
to March 31, December 31, December 31, to March 31,
1996 1997 1996 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Selected Per Share Data
Net asset value, beginning of period $10.00 $12.56 $11.36 $10.00
Income from investment operations:
Net investment income (loss) 0.45 0.06 0.03 0.07
Net realized and unrealized gains on investments
and foreign currency related items 0.02 3.64 1.81 2.68
Total income from investment operations 0.47 3.70 1.84 2.75
Less distributions:
From net investment income (0.34) (0.03) (0.04) (0.06)
From net realized gains on investment
transactions (0.04) (0.61) (0.09) (1.33)
Return of capital - - (0.51) -
Total distributions (0.38) (0.64) (0.64) (1.39)
Net increase 0.09 3.06 1.20 1.36
Net asset value, end of period $10.09 $15.62 $12.56 $11.36
Total Return (a) 4.65% 29.47% 16.12% 28.23%
Ratios and Supplemental Data
Net assets, end of period (in thousands) $3,007 $124,022 $32,291 $8,772
Ratio of net operating expenses to average
net assets (b) (c) 0.84% 0.98% 1.00% 1.00%
Ratio of net investment income to average
net assets (b) (c) 5.41% 0.43% 0.59% 0.75%
Ratio of interest expense and dividends on
short positions to average net assets - - - -
Portfolio turnover 253.37% 47.06% 36.41% 101.13%
Average commission rate paid (d) n/a $0.0309 $0.0288 n/a
Ratio information assuming no expense
reimbursement or fees paid indirectly
Ratio of expenses to average net assets (b) 2.53% 0.98% 1.11% 2.09%
Ratio of net investment income to average
net assets (b) 3.72% 0.43% 0.48% (0.34)%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
T. Rowe
Price/JNL
International
Equity
Investment
---------------------------------------------------
Series
Period from Period from
April 1, May 15,
Year ended 1996 to 1995*
December 31, December 31, to March 31,
1997 1996 1996
------------ ------------ ------------
<S> <C> <C> <C>
Selected Per Share Data
Net asset value, beginning of period $12.08 $11.25 $10.00
Income from investment operations:
Net investment income (loss) 0.09 0.06 0.04
Net realized and unrealized gains on investments
and foreign currency related items 0.23 0.90 1.21
Total income from investment operations 0.32 0.96 1.25
Less distributions:
From net investment income (0.08) (0.12) -
From net realized gains on investment
transactions (0.23) (0.01) -
Return of capital - - -
Total distributions (0.31) (0.13) -
Net increase 0.01 0.83 1.25
Net asset value, end of period $12.09 $12.08 $11.25
Total Return (a) 2.65% 8.54% 12.50%
Ratios and Supplemental Data
Net assets, end of period (in thousands) $78,685 $48,204 $24,211
Ratio of net operating expenses to average
net assets (b) (c) 1.24% 1.25% 1.25%
Ratio of net investment income to average
net assets (b) (c) 0.74% 1.09% 0.78%
Ratio of interest expense and dividends on
short positions to average net assets - - -
Portfolio turnover 18.81% 5.93% 16.45%
Average commission rate paid (d) $0.0023 $0.0257 n/a
Ratio information assuming no expense
reimbursement or fees paid indirectly
Ratio of expenses to average net assets (b) 1.32% 1.29% 2.14%
Ratio of net investment income to average
net assets (b) 0.66% 1.05% (0.11)%
</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 for the periods ended December 31, 1996 and March 31, 1996.
(b) Annualized for the periods ended December 31, 1996 and March 31, 1996.
(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.
<PAGE>
JNL SERIES TRUST
FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
T. Rowe
Price/JNL
Mid-Cap Growth
Series
---------------------------------------------------
Period from Period from
April 1, May 15,
Year ended 1996 to 1995*
December 31, December 31, to March 31,
1997 1996 1996
------------ ------------ ------------
<S> <C> <C> <C>
Selected Per Share Data
Net asset value, beginning of period $14.89 $13.43 $10.00
Income from investment operations:
Net investment income (loss) (0.03) (0.05) 0.06
Net realized and unrealized gains on investments
and foreign currency related items 2.74 1.92 3.90
Total income from investment operations 2.71 1.87 3.96
Less distributions:
From net investment income - (0.05) -
From net realized gains on investment
transactions (0.23) (0.36) (0.53)
Return of capital - - -
Total distributions (0.23) (0.41) (0.53)
Net increase 2.48 1.46 3.43
Net asset value, end of period $17.37 $14.89 $13.43
Total Return (a) 18.21% 13.91% 40.06%
Ratios and Supplemental Data
Net assets, end of period (in thousands) $127,052 $47,104 $10,545
Ratio of net operating expenses to average
net assets (b) (c) 1.06% 1.10% 1.10%
Ratio of net investment income to average
net assets (b) (c) (0.26)% (0.18)% 0.82%
Ratio of interest expense and dividends on
short positions to average net assets - - -
Portfolio turnover 41.43% 25.05% 66.04%
Average commission rate paid (d) $0.0467 $0.0326 n/a
Ratio information assuming no expense
reimbursement or fees paid indirectly
Ratio of expenses to average net assets (b) 1.06% 1.14% 2.10%
Ratio of net investment income to average
net assets (b) (0.26)% (0.22)% (0.18)%
</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 for the periods ended December 31, 1996 and March 31, 1996.
(b) Annualized for the periods ended December 31, 1996 and March 31, 1996.
(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.
<PAGE>
- --------------------------------------------------------------------------------
JNL SERIES TRUST
NOTES TO THE FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
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 comprised of the following Series: JNL Aggressive Growth, JNL
Capital Growth and JNL Global Equities for which Janus Capital Corporation
serves as the sub-adviser; JNL/Alger Growth for which Fred Alger Management,
Inc. serves as the sub-adviser; JNL/Eagle Core Equity and JNL/Eagle SmallCap
Equity for which Eagle Asset Management, Inc. serves as sub-adviser; JNL/Putnam
Growth and JNL/Putnam Value Equity for which Putnam Investment Management, Inc.
serves as the sub-adviser; PPM America/JNL Balanced, PPM America/JNL High Yield
Bond and PPM America/JNL Money Market for which PPM America, Inc. serves as the
sub-adviser; 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-adviser; 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-adviser; and T. Rowe Price/JNL International Equity Investment for which
Rowe Price-Fleming International, Inc. serves as the sub-adviser. 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. Effective May 1, 1997, the JNL/Phoenix Investment Counsel Balanced
Series became the PPM America/JNL Balanced Series and is managed by PPM America,
Inc., the JNL/Phoenix Investment Counsel Growth Series became the JNL/Putnam
Growth Series and is managed by Putnam Investment Management, Inc., and the PPM
America/JNL Value Equity Series became the JNL/Putnam Value Equity Series and is
managed by Putnam Investment Management, Inc. Jackson National Financial
Services, Inc. ("JNFSI"), a wholly-owned subsidiary of Jackson National Life
Insurance Company ("Jackson National"), serves as investment adviser ("Adviser")
for all the Series of the Trust. PPM America, Inc. is an affiliate of the
Adviser. Shares are presently offered only to Jackson National and its separate
accounts.
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 state-ments in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions. 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. 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. Amer-ican 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.
<PAGE>
- --------------------------------------------------------------------------------
JNL SERIES TRUST
NOTES TO THE FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
Security Transactions And Investment Income -- Security transactions are
recorded on the trade date. 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.
Foreign Currency Translations -- The accounting records of the Trust are
maintained in U.S. dollars. Investment securities and other assets and
liabilities de-nominated 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
pay-ments 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 in-come securities, entering into forward
foreign currency exchange contracts, and accruing income or settling port-folio
purchases and sales denominated in a foreign cur-rency 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 (deprecia-tion) on investments,
respectively.
Foreign Currency Contracts -- A 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 for-ward
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
(deprecia-tion) on foreign currency related items. When the con-tract 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. These
forward foreign currency contracts involve market risk in excess of the
unrealized appreciation (depreciation) of forward foreign currency contracts
reflected in the Statement of Assets and Liabilities. 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, 1997.
When-Issued and Delayed Delivery Transactions -- A 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 -- A Series may 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 -- A Series may write covered call options on
portfolio securities. Written options involve, to varying degrees, risk of loss
in excess of the option value reflected in the Statement of Assets and
Liabilities. The risk in writing a covered call option is that the Series may
forego the opportunity of profit if the market price of the underlying security
increases and the option is exercised. 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.
<PAGE>
- --------------------------------------------------------------------------------
JNL SERIES TRUST
NOTES TO THE FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
Futures Contracts -- A Series may utilize futures contracts to a limited
extent. The risks associated with the use of futures contracts includes the
possibility that the value may not correlate with the change in the value of the
hedged instruments. In addition, there is the risk that the Series may not be
able to enter into a closing transaction because of an illiquid market. Futures
contracts are valued based upon their quoted daily settlement prices. Changes in
initial settlement value are accounted for as unrealized appreciation
(depreciation) until the contracts are terminated at which time realized gains
and losses are recognized.
Short Positions -- A Series may sell securities short for hedging purposes.
For financial statement purposes, an amount equal to the settlement amount is
included in the Statement of Assets and Liabilities as an asset and equivalent
liability. The amount of the liability is subsequently marked-to-market to
reflect the current value of the short position. The Series is liable for any
dividends payable on securities while those securities are in a short position.
As collateral for its short positions, the Series is required under the 1940 Act
to maintain segregated assets consisting of cash, cash equivalents or liquid
securities. These segregated assets are required to be adjusted daily to reflect
changes in the value of the securities sold short.
Dollar Roll Transactions -- The Salomon Broth-ers/JNL Global Bond Series
and the Salomon Broth-ers/JNL U.S. Government & Quality Bond Series entered into
dollar roll transactions with respect to mortgage sec-urities 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 re-purchase, 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. Dollar roll transactions involve the risk
that the market value of the securities sold by the Series may decline below the
repurchase price of those similar securities which the Series is obligated to
purchase or that the return earned by the Series with the proceeds of a dollar
roll may not exceed transaction costs.
Repurchase Agreements -- A Series 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.
Reverse Repurchase Agreements -- A Series may engage in reverse repurchase
agreements to borrow short term funds. The value of the reverse repurchase
agreements that the Series have committed to sell are reflected in the Statement
of Assets and Liabilities. The Series will maintain securities in segregated
accounts with its custodian that at all times are in an amount equal to their
obligations under the reverse repurchase agreements. Reverse repurchase
agreements involve the risks that the market value of the securities sold by the
Series may decline below the repurchase price and, if the proceeds from the
reverse repurchase agreement are invested in securities, that the market value
of the securities bought may decline below the repurchase price of the
securities sold.
Distributions To Shareholders -- The PPM Amer-ica/JNL Money Market Series
declares dividends daily and pays dividends monthly. For all other Series,
div-idends 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 at least annually.
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
char-acterization of certain income and capital gain dist-ributions determined
annually in accordance with federal tax regulations which may differ from
generally accepted accounting principles.
NOTE 3. INVESTMENT MANAGEMENT FEES AND TRANSACTIONS WITH AFFILIATES
The Trust has an investment advisory agreement with JNFSI whereby JNFSI
provides investment management and transfer agency services. Each Series pays
JNFSI a fee, computed daily and payable monthly, based on a specified percentage
of the average daily net assets of each Series. The following is a schedule of
the fees each Series is currently obligated to pay JNFSI.
<PAGE>
- --------------------------------------------------------------------------------
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 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.
As compensation for their services, the sub-advisers receive fees from
JNFSI calculated on the basis of the average daily net assets of each Series.
The following is a schedule of the fees JNFSI currently is obligated to pay the
sub-advisers 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 $150M $300 M $500M $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 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 America, Inc. 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 net assets exceed this amount, the sub-advisory fee asterisked
is applicable to all assets in this Series.
<PAGE>
- --------------------------------------------------------------------------------
JNL SERIES TRUST
NOTES TO THE FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
JNFSI has voluntarily agreed to reimburse each of the Series for annual
expenses (excluding the management fee) in excess of .15% of average daily net
assets. These voluntary reimbursements may be modified or discontinued at any
time.
Trustees and officers of the Trust who are affiliated persons receive no
compensation from the Trust. Trustees who are not interested persons of the
Trust, as defined in the 1940 Act, collectively received compensation of $49,500
for the year ended December 31, 1997.
During the year ended December 31, 1997, JNL/Alger Growth Series, JNL/Eagle
Core Equity Series, JNL/Eagle SmallCap Equity Series, JNL/Putnam Growth Series,
PPM America/JNL Balanced Series, T. Rowe Price/JNL Established Growth Series and
T. Rowe Price/JNL International Equity Investment Series paid $182,361, $461,
$4,002, $120, $180, $2,111 and $32,587, respectively, to affiliates of the Trust
for brokerage fees on the execution of purchases and sales of portfolio
investments.
NOTE 4. SECURITY TRANSACTIONS
During the year ended December 31, 1997, the 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.................................................... $108,281 $66,412
JNL Capital Growth Series....................................................... 96,673 68,820
JNL Global Equities Series...................................................... 176,383 93,679
JNL/Alger Growth Series......................................................... 103,495 73,936
JNL/Eagle Core Equity Series.................................................... 11,355 3,315
JNL/Eagle SmallCap Equity Series................................................ 14,249 4,225
JNL/Putnam Growth Series........................................................ 144,642 96,921
JNL/Putnam Value Equity Series.................................................. 136,358 60,449
PPM America/JNL Balanced Series................................................. 94,863 62,397
PPM America/JNL High Yield Bond Series.......................................... 111,761 66,393
Salomon Brothers/JNL Global Bond Series......................................... 52,021 30,116
Salomon Brothers/JNL U.S. Government & Quality Bond Series...................... 52,323 38,977
T. Rowe Price/JNL Established Growth Series..................................... 101,320 34,148
T. Rowe Price/JNL International Equity Investment Series........................ 42,473 12,054
T. Rowe Price/JNL Mid-Cap Growth Series......................................... 89,480 33,162
</TABLE>
Included in these transactions were purchases and sales of U.S. Government
obligations of $30,108,611 and $19,449,841 in the PPM America/JNL Balanced
Series; $18,390,903 and $10,379,128 in the Salomon Brothers/JNL Global Bond
Series; $51,479,505 and $38,634,771 in the Salomon Brothers/JNL U.S. Government
& Quality Bond Series, respectively.
<PAGE>
- --------------------------------------------------------------------------------
JNL SERIES TRUST
NOTES TO THE FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
The federal income tax cost basis and gross unrealized appreciation and
depreciation on investments as of December 31, 1997 were as follows (in
thousands):
<TABLE>
<CAPTION>
Tax Gross Gross Net
Cost Unrealized Unrealized Unrealized
Basis Appreciation Depreciation Appreciation
----- ------------ ------------ ------------
<S> <C> <C> <C> <C>
JNL Aggressive Growth Series.................................. $ 75,971 $ 8,834 $ (3,102) $ 5,732
JNL Capital Growth Series..................................... 61,244 13,742 (1,048) 12,694
JNL Global Equities Series.................................... 133,943 21,500 (4,761) 16,739
JNL/Alger Growth Series....................................... 76,262 12,584 (826) 11,758
JNL/Eagle Core Equity Series.................................. 10,571 1,663 (168) 1,495
JNL/Eagle SmallCap Equity Series.............................. 12,913 2,121 (685) 1,436
JNL/Putnam Growth Series...................................... 74,203 10,933 (396) 10,537
JNL/Putnam Value Equity Series................................ 103,573 7,677 (2,052) 5,625
PPM America/JNL Balanced Series............................... 55,452 4,286 (685) 3,601
PPM America/JNL High Yield Bond Series........................ 59,534 1,928 (159) 1,769
Salomon Brothers/JNL Global Bond Series....................... 39,452 1,135 (257) 878
Salomon Brothers/JNL U.S. Government & Quality
Bond Series.............................................. 31,758 687 (3) 684
T. Rowe Price/JNL Established Growth Series................... 106,796 20,805 (3,323) 17,482
T. Rowe Price/JNL International Equity Investment Series...... 73,876 11,430 (6,997) 4,433
T. Rowe Price/JNL Mid-Cap Growth Series....................... 107,720 23,488 (3,794) 19,694
</TABLE>
NOTE 5. TRUST TRANSACTIONS
Transactions of trust shares for the year ended December 31, 1997 were as
follows:
<TABLE>
<CAPTION>
Shares Distributions Shares
Purchased Reinvested Redeemed Net Increase
--------- ---------- -------- ------------
<S> <C> <C> <C> <C>
JNL Aggressive Growth Series.............................. 3,894,346 191,755 (868,600) 3,217,501
JNL Capital Growth Series................................. 2,848,842 34,057 (968,352) 1,914,547
JNL Global Equities Series................................ 6,393,844 295,987 (1,246,634) 5,443,197
JNL/Alger Growth Series................................... 3,544,503 229,852 (869,988) 2,904,367
JNL/Eagle Core Equity Series.............................. 688,411 16,636 (24,082) 680,965
JNL/Eagle SmallCap Equity Series.......................... 886,938 - (139,332) 747,606
JNL/Putnam Growth Series *................................ 4,787,449 92,112 (1,561,300) 3,318,261
JNL/Putnam Value Equity Series *.......................... 5,270,627 304,872 (347,068) 5,228,431
PPM America/JNL Balanced Series *......................... 2,579,083 337,971 (395,399) 2,521,655
PPM America/JNL High Yield Bond Series.................... 4,500,240 349,736 (642,559) 4,207,417
PPM America/JNL Money Market Series....................... 87,270,526 1,658,199 (70,873,065) 18,055,660
Salomon Brothers/JNL Global Bond Series................... 2,422,646 177,324 (471,899) 2,128,071
Salomon Brothers/JNL U.S. Government & Quality Bond
Series............................................... 1,740,847 92,434 (422,626) 1,410,655
T. Rowe Price/JNL Established Growth Series............... 5,871,440 308,764 (813,825) 5,366,379
T. Rowe Price/JNL International Equity Investment
Series............................................... 3,010,793 112,676 (606,319) 2,517,150
T. Rowe Price/JNL Mid-Cap Growth Series................... 4,951,347 94,266 (893,009) 4,152,604
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
JNL SERIES TRUST
NOTES TO THE FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
Transactions of trust shares for the period ending December 31, 1996 were
as follows:
<TABLE>
<CAPTION>
Shares Distributions Shares
Purchased Reinvested Redeemed Net 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 Growth Series.............. 1,507,501 47,430 (151,986) 1,402,945
JNL/Phoenix Investment Counsel Balanced Series............ 1,895,883 54,735 (327,417) 1,623,201
PPM America/JNL Value Equity Series....................... 1,153,246 27,517 (219,113) 961,650
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
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>
* Effective May 1, 1997, the JNL/Phoenix Investment Counsel Balanced Series
became the PPM America/JNL Balanced Series, the JNL/Phoenix Investment
Counsel Growth Series became the JNL/Putnam Growth Series, and the PPM
America/JNL Value Equity Series became the JNL/Putnam Value Equity Series.
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, 1997 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 ($6,408), ($15,722), ($55,680) and $36,569, 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 12/31/97 Currency to be received at 12/31/97
---- ------------------------ ----------- ----------------------- -----------
<S> <C> <C> <C> <C>
2/18/98 1,270,000 Deutsche Mark $ 707,994 688,135 US $ $ 688,135
2/18/98 736,561 US $ 736,561 1,270,000 Deutsche Mark 707,994
1/9/98 930,000 Finnish Markka 170,711 172,628 US $ 172,628
1/9/98 93,738 US $ 93,738 500,000 Finnish Markka 91,780
1/15/98 150,000 Finnish Markka 27,545 28,963 US $ 28,963
2/2/98 10,000 Finnish Markka 1,838 1,916 US $ 1,916
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
JNL SERIES TRUST
NOTES TO THE FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
JNL Aggressive Growth Series (continued)
<TABLE>
<CAPTION>
Settlement U.S. $ value U.S. $ value
Date Currency to be delivered at 12/31/97 Currency to be received at 12/31/97
---- ------------------------ ----------- ----------------------- -----------
<S> <C> <C> <C> <C>
3/26/98 3,915,000 Finnish Markka $ 721,950 753,196 US $ $753,196
3/26/98 350,126 US $ 350,126 1,800,000 Finnish Markka 331,931
3/31/98 6,100,000 Finnish Markka 1,125,191 1,169,189 US $ 1,169,189
5/28/98 1,000,000 Finnish Markka 185,009 191,205 US $ 191,205
2/11/98 110,000 British Sterling 180,306 182,787 US $ 182,787
Pound
2/11/98 33,361 US $ 33,361 20,000 British Sterling 32,783
Pound
2/18/98 90,000 British Sterling 147,473 145,998 US $ 145,998
Pound
2/18/98 149,981 US $ 149,981 90,000 British Sterling 147,473
Pound
2/19/98 100,000 British Sterling 163,851 167,500 US $ 167,500
Pound
2/19/98 57,813 US $ 57,813 35,000 British Sterling 57,348
Pound
3/4/98 17,000 British Sterling 27,837 28,455 US $ 28,455
Pound
3/4/98 27,276 US $ 27,276 16,500 British Sterling 27,018
Pound
3/11/98 50,000 British Sterling 81,843 82,450 US $ 82,450
Pound
5/11/98 34,000 British Sterling 55,491 56,950 US $ 56,950
Pound
5/11/98 55,674 US $ 55,674 34,000 British Sterling 55,491
Pound
3/11/98 1,700,000,000 Italian Lira 960,661 957,585 US $ 957,585
3/11/98 163,429 US $ 163,429 280,000,000 Italian Lira 158,227
1/9/98 1,200,000 Netherlands Guilder 592,153 585,966 US $ 585,966
1/9/98 333,736 US $ 333,736 650,000 Netherlands Guilder 320,750
2/25/98 4,050,000 Netherlands Guilder 2,004,336 2,017,080 US $ 2,017,080
2/25/98 743,740 US $ 743,740 1,450,000 Netherlands Guilder 717,602
3/31/98 1,750,000 Netherlands Guilder 867,851 882,909 US $ 882,909
1/15/98 2,950,000 Swedish Krona 371,699 381,505 US $ 381,505
1/15/98 177,022 US $ 177,022 1,378,000 Swedish Krona 173,627
2/11/98 297,000 Swedish Krona 37,450 38,126 US $ 38,126
2/11/98 38,247 US $ 38,247 297,000 Swedish Krona 37,450
3/4/98 800,000 Swedish Krona 100,935 100,237 US $ 100,237
3/4/98 106,177 US $ 106,177 800,000 Swedish Krona 100,935
3/11/98 1,000,000 Swedish Krona 126,189 132,205 US $ 132,205
3/11/98 132,797 US $ 132,79 1,000,000 Swedish Krona 126,189
----------- -----------
$11,857,991 $11,851,583
=========== ===========
</TABLE>
JNL Capital Growth Series
<TABLE>
Settlement U.S. $ value U.S. $ value
Date Currency to be delivered at 12/31/97 Currency to be received at 12/31/97
---- ------------------------ ----------- ----------------------- -----------
<S> <C> <C> <C> <C>
1/20/98 115,000 British Sterling $ 188,704 193,430 US $ $193,430
Pound
2/11/98 210,000 British Sterling 344,221 348,957 US $ 348,957
Pound
2/11/98 180,937 US $ 180,937 107,000 British Sterling 175,389
Pound
2/19/98 825,000 British Sterling 1,351,770 1,358,925 US $ 1,358,925
Pound
2/25/98 950,000 British Sterling 1,556,130 1,497,761 US $ 1,497,761
Pound
2/26/98 900,000 British Sterling 1,474,156 1,500,300 US $ 1,500,300
Pound
2/26/98 1,289,611 US $ 1,289,611 765,000 British Sterling 1,253,032
Pound
3/4/98 400,000 British Sterling 654,980 638,800 US $ 638,800
Pound
3/11/98 5,000 British Sterling 8,184 8,371 US $ 8,371
Pound
5/6/98 1,400,000 British Sterling 2,285,434 2,338,075 US $ 2,338,075
Pound
5/11/98 125,000 British Sterling 204,010 209,375 US $ 209,375
Pound
----------- -----------
$9,538,137 $ 9,522,415
=========== ===========
</TABLE>
JNL Global Equities Series
<TABLE>
<CAPTION>
Settlement U.S. $ value U.S. $ value
Date Currency to be delivered at 12/31/97 Currency to be received at 12/31/97
---- ------------------------ ----------- ----------------------- -----------
<S> <C> <C> <C> <C>
1/20/98 600,000 Swiss Franc $ 418,994 US $ $
411,625 418,994
2/2/98 150,000 Swiss Franc 103,068 103,914 US $ 103,914
2/18/98 1,500,000 Swiss Franc 1,032,558 1,018,883 US $ 1,018,883
2/18/98 1,083,408 US $ 1,083,408 1,500,000 Swiss Franc 1,032,558
2/19/98 600,000 Swiss Franc 413,071 413,223 US $ 413,223
2/26/98 122,000 Swiss Franc 84,058 87,644 US $ 87,644
1/15/98 305,000 Deutsche Mark 169,693 174,447 US $ 174,447
1/15/98 17,461 US $ 17,461 30,000 Deutsche Mark 16,691
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
JNL SERIES TRUST
NOTES TO THE FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
JNL Global Equities Series (continued)
<TABLE>
<CAPTION>
Settlement U.S. $ value U.S. $ value
Date Currency to be delivered at 12/31/97 Currency to be received at 12/31/97
---- ------------------------ ----------- ----------------------- -----------
<S> <C> <C> <C> <C>
2/2/98 50,000 Deutsche Mark $ 27,848 28,258 US $ $28,258
2/3/98 2,850,000 Deutsche Mark 1,587,431 1,588,248 US $ 1,588,248
2/3/98 1,427,540 US $ 1,427,540 2,500,000 Deutsche Mark 1,392,483
2/18/98 75,000 Deutsche Mark 41,811 40,473 US $ 40,473
2/19/98 2,200,000 Deutsche Mark 1,226,517 1,220,189 US $ 1,220,189
2/19/98 1,235,677 US $ 1,235,677 2,200,000 Deutsche Mark 1,226,517
2/26/98 3,750,000 Deutsche Mark 2,091,499 2,079,867 US $ 2,079,867
2/26/98 1,784,450 US $ 1,784,450 3,070,000 Deutsche Mark 1,712,241
1/20/98 750,000 Finnish Markka 137,768 144,788 US $ 144,788
1/20/98 143,234 US $ 143,234 750,000 Finnish Markka 137,768
1/9/98 11,000,000 French Franc 1,828,651 1,828,777 US $ 1,828,777
1/9/98 1,886,635 US $ 1,886,635 11,000,000 French Franc 1,828,651
1/20/98 500,000 French Franc 83,173 84,574 US $ 84,574
2/3/98 11,000,000 French Franc 1,831,312 1,814,681 US $ 1,814,681
2/3/98 1,921,186 US $ 1,921,186 11,000,000 French Franc 1,831,312
2/18/98 5,000,000 French Franc 833,161 809,532 US $ 809,532
2/18/98 573,460 US $ 573,460 3,000,000 French Franc 499,897
3/18/98 6,000,000 French Franc 1,001,352 1,031,637 US $ 1,031,637
2/11/98 5,200,000 British Sterling 8,523,570 8,441,520 US $ 8,441,520
Pound
2/11/98 7,420,035 US $ 7,420,035 4,500,000 British Sterling 7,376,166
Pound
2/18/98 3,000,000 British Sterling 4,915,768 4,866,615 US $ 4,866,615
Pound
2/19/98 600,000 British Sterling 983,105 1,001,400 US $ 1,001,400
Pound
1/20/98 115,250,000 Japanese Yen 885,227 1,038,288 US $ 1,038,288
2/18/98 166,750,000 Japanese Yen 1,286,307 1,407,577 US $ 1,407,577
3/18/98 594,440,000 Japanese Yen 4,604,843 5,145,108 US $ 5,145,108
3/18/98 2,725,454 US $ 2,725,454 325,000,000 Japanese Yen 2,517,620
3/25/98 30,000,000 Japanese Yen 232,641 240,015 US $ 240,015
4/22/98 165,000,000 Japanese Yen 1,284,884 1,294,179 US $ 1,294,179
1/9/98 1,000,000 Netherlands Guilder 493,461 501,379 US $ 501,379
2/3/98 3,500,000 Netherlands Guilder 1,729,822 1,728,395 US $ 1,728,395
2/3/98 1,809,147 US $ 1,809,147 3,500,000 Netherlands Guilder 1,729,822
2/18/98 200,000 Netherlands Guilder 98,937 95,721 US $ 95,721
2/19/98 6,300,000 Netherlands Guilder 3,116,717 3,100,394 US $ 3,100,394
2/19/98 2,229,955 US $ 2,229,955 4,400,000 Netherlands Guilder 2,176,754
1/15/98 6,400,000 Swedish Krona 806,397 832,077 US $ 832,077
2/2/98 700,000 Swedish Krona 88,245 90,696 US $ 90,696
10/2/98 1,200,000 South African Rand 232,076 237,765 US $ 237,765
10/2/98 231,256 US $ 231,256 1,200,000 South African Rand 232,076
----------- -----------
$66,675,494 $66,619,814
=========== ===========
</TABLE>
Salomon Brothers/JNL Global Bond Series
<TABLE>
<CAPTION>
Settlement U.S. $ value U.S. $ value
Date Currency to be delivered at 12/31/97 Currency to be received at 12/31/97
---- ------------------------ ----------- ----------------------- -----------
<S> <C> <C> <C> <C> <C>
2/11/98 16,965 Australian $ $ 11,067 11,191 US $ $11,191
2/11/98 713,098 Canadian $ 499,711 502,182 US $ 502,182
2/11/98 2,645,016 Deutsche Mark 1,473,937 1,507,733 US $ 1,507,733
2/11/98 457,276 US $ 457,276 806,841 Deutsche Mark 449,613
2/11/98 566,847,218 Italian Lira 320,332 328,173 US $ 328,173
---------- ----------
$2,762,323 $2,798,892
========== ==========
</TABLE>
<PAGE>
JNL AGGRESSIVE GROWTH SERIES
SCHEDULE OF INVESTMENTS
December 31, 1997
Market
Shares Value
------ ------
Common Stocks -- 90.45%
- -----------------------
Brazil -- 0.58%
- ---------------
Telecommunications - 0.58%
Ericsson Telecommunicacoes SA (a)14,709,000 ......... $471,827
Finland -- 1.71%
- ----------------
Conglomerates -- 1.71%
Metra Oy, Class B ................................... 18,630 437,472
Raisio Group PLC (a) ................................ 8,053 955,850
---------
Total Finland .................................... 1,393,322
France -- 0.10%
- ---------------
Oil -- 0.10%
Elf Aquitaine ....................................... 709 82,462
Italy -- 1.58%
- --------------
Banks -- 0.73%
Banca Commerciale Italiana .......................... 172,358 599,210
Telecommunications -- 0.85%
Telecom Italia SPA .................................. 107,961 689,632
---------
Total Italy ....................................... 1,288,842
Netherlands-- 0.09%
- -------------------
Household Appliances &
Furnishings -- 0.09%
Philips Electronics NV .............................. 1,217 72,985
Norway -- 1.35%
- ---------------
Oil -- 1.09%
Ocean Rig ASA (a) ................................... 490,511 518,019
Smedvig ASA ......................................... 17,687 371,183
---------
889,202
Recycling -- 0.26%
Tomra Systems ASA ................................... 9,665 215,918
---------
Total Norway ...................................... 1,105,120
Sweden -- 0.66%
- ---------------
Household Appliances &
Furnishings -- 0.66%
Electrolux (a) ...................................... 7,817 542,471
United Kingdom -- 1.44%
- -----------------------
Conglomerates -- 0.80%
Siebe PLC ........................................... 33,114 649,957
Drugs & Health Care -- 0.64%
SmithKline Beecham PLC .............................. 51,314 528,877
---------
Total United Kingdom .............................. 1,178,834
Market
Shares Value
------ ------
Common Stocks (continued)
- -------------------------
United States -- 82.94%
- -----------------------
Banks -- 4.64%
Ambanc Holding Co., Inc. ........................ 1,950 $ 36,562
Bank of New York Co. , Inc. ..................... 13,150 760,234
BankAmerica Corp. ............................... 19,775 1,443,575
Citicorp ........................................ 2,625 331,898
Klamath First Bancorp, Inc. ..................... 1,950 41,925
Prime Bancshares, Inc. .......................... 12,500 260,938
Provident Financial Holdings, Inc. (a)........... 1,400 30,625
Roslyn Bancorp, Inc. ............................ 5,075 117,994
Star Banc Corp. ................................. 7,950 456,131
US Bancorp ...................................... 2,775 310,627
---------
3,790,509
Broadcasting -- 3.65%
Comcast Corp. ................................... 58,275 1,839,305
Time Warner, Inc. ............................... 18,375 1,139,250
---------
2,978,555
Business Services -- 4.39%
Corporate Family Solutions, Inc. (a)............. 31,750 682,625
Lamar Advertising Co. Class A (a)................ 5,850 232,537
Nokia Corp. ADR (a) ............................. 32,600 2,282,000
Outdoor Systems, Inc. (a) ....................... 5,400 207,225
Technology Solutions Co. (a) .................... 7,037 185,601
---------
3,589,988
Chemicals -- 5.64%
Monsanto Co. .................................... 87,600 3,679,200
Solutia, Inc. ................................... 34,980 933,529
---------
4,612,729
Computers & Business
Equipment -- 6.88%
Ceridian Corp. (a) .............................. 9,700 444,381
Cisco Systems, Inc. (a) ......................... 27,413 1,528,247
Compaq Computer Corp. ........................... 21,887 1,235,248
Dell Computer Corp. (a) ......................... 13,025 1,094,100
EMC Corp. (a) ................................... 29,325 804,605
Sapient Corp. (a) ............................... 8,400 514,500
---------
5,621,081
Conglomerates -- 1.44%
CBS Corp. ....................................... 39,850 1,173,084
Drugs & Health Care -- 10.90%
Cardinal Health, Inc. ........................... 6,300 473,287
Centocor, Inc. (a) .............................. 11,100 369,075
Eli Lilly & Co. ................................. 22,275 1,550,897
Omnicare, Inc. .................................. 32,775 1,016,025
Pfizer, Inc. .................................... 11,550 861,197
Sofamor Danek Group, Inc. (a) ................... 9,450 614,841
Warner Lambert Co. .............................. 32,450 4,023,800
---------
8,909,122
See notes to the financial statements.
<PAGE>
JNL AGGRESSIVE GROWTH SERIES
SCHEDULE OF INVESTMENTS (continued)
Market
Shares Value
------ ------
Common Stocks (continued)
- -------------------------
United States (continued)
- -------------------------
Electrical Equipment -- 1.19%
ASM Lithography Holdings NV (a) ............. 14,350 $968,625
Electronics -- 9.86%
Analog Devices, Inc. (a) .................... 41,608 1,152,022
Intel Corp. ................................. 19,950 1,401,488
Maxim Integrated Products, Inc. (a).......... 9,150 315,675
Philips Electronics NV ...................... 43,573 2,636,166
Pittway Corp., Class A ...................... 26,150 1,820,694
Texas Instruments, Inc. ..................... 16,275 732,375
---------
8,058,420
Financial Services -- 3.40%
Associates First Capital Corp. .............. 17,975 1,278,472
Class A
Astoria Financial Corp. ..................... 1,375 76,656
Catskill Financial Corp. .................... 1,075 20,291
Charles Schwab Corp. ........................ 19,062 799,413
Peekskill Financial Corp. ................... 1,025 17,169
SLM Holding Corp. ........................... 3,850 535,631
TF Financial Corp. .......................... 1,700 51,000
---------
2,778,632
Insurance -- 3.86%
Reliance Group Holdings, Inc. ............... 4,675 66,034
SunAmerica, Inc. ............................ 9,075 387,956
UNUM Corp. .................................. 49,704 2,702,655
---------
3,156,645
Packaging -- 1.72%
Sealed Air Corp. (a) ........................ 22,825 1,409,444
Petroleum Services -- 7.97%
Diamond Offshore Drilling, Inc. (a).......... 18,900 909,562
Noble Drilling Corp. (a) .................... 29,700 909,562
Santa Fe International Corp. ................ 40,700 1,655,981
Schlumberger Ltd. ........................... 20,700 1,666,350
Transocean Offshore, Inc. ................... 28,425 1,369,730
---------
6,511,185
Real Estate -- 0.97%
Equity Office Properties, Inc. .............. 25,000 789,063
Retail -- 2.60%
CompUSA, Inc. (a) ........................... 15,425 478,175
Costco Cos., Inc. (a) ....................... 18,050 805,481
Linens & Things, Inc. (a) ................... 10,250 447,156
Sara Lee Corp. .............................. 7,025 395,595
---------
2,126,407
Market
Shares Value
------ ------
Common Stocks (continued)
- -------------------------
United States (continued)
- -------------------------
Savings & Loan -- 0.39%
Dime Bancorp, Inc. ............................ 3,275 $ 99,069
FSF Financial Corp. ........................... 200 4,125
First Defiance Financial Corp. ................ 1,725 27,600
First Savings Bancorp ......................... 325 8,288
FirstSpartan Financial Corp. .................. 1,425 57,356
GSB Financial Corp. (a) ....................... 975 17,611
North Central Bancshares, Inc. ................ 1,050 20,869
Queens County Bancorp, Inc. ................... 2,025 82,013
-----------
316,931
Software -- 10.56%
America Online, Inc. (a) ...................... 2,300 205,131
Aspen Technology, Inc. (a) .................... 30,725 1,052,332
Cadence Design Systems, Inc. (a) ............. 30,425 745,412
HBO & Co. ..................................... 16,250 780,000
Microsoft Corp. (a) ........................... 14,475 1,870,894
Parametric Technology Corp. (a) ............... 68,000 3,221,500
Peoplesoft, Inc. (a) .......................... 6,500 253,500
Wind River Systems, Inc. (a) .................. 12,575 499,070
-----------
8,627,839
Telecommunications -- 2.88%
Tele Communications, Inc. (a) ................. 84,128 2,350,326
-----------
Total United States ......................... 67,768,585
-----------
Total Common Stocks
(cost $68,071,484) ...................... 73,904,448
-----------
Principal
Amount
---------
Short Term Investments -- 9.55%
- -------------------------------
Commercial Paper -- 4.29%
General Electric Capital Corp. ................
6.70%, 01/02/1998..........$ ............ 3,499,349 3,500,000
U.S. Government Agencies -- 5.26%
Federal National Mortgage
Association Discount Note
6.00%, 01/02/1998 ....................... 4,300,000 4,299,283
-----------
Total Short Term Investments
(cost $7,798,632)........................ 7,798,632
-----------
Total Investments -- 100%
- -------------------------
(cost $75,870,116) ............................ $81,703,080
===========
See notes to the financial statements.
- --------------------------------------------------------------------------------
(a) Non-income producing security.
<PAGE>
JNL CAPITAL GROWTH SERIES
SCHEDULE OF INVESTMENTS
December 31, 1997
Market
Shares Value
------ ------
Common Stocks -- 97.19%
- -----------------------
United Kingdom -- 12.78%
- ------------------------
Business Services -- 1.53%
Capita Group PLC ............................ 185,778 $1,132,071
Financial Services -- 1.31%
Amvescap PLC ................................ 113,532 971,113
Food & Beverages -- 9.94%
Pizza Express PLC ........................... 285,117 3,493,553
JD Wetherspoon PLC .......................... 704,770 3,854,757
---------
7,348,310
---------
Total United Kingdom ...................... 9,451,494
United States -- 84.41%
- -----------------------
Airlines -- 0.85%
Ryanair Holdings PLC ADR (a) ................ 25,100 630,638
Automobile -- 1.10%
OEA, Inc. ................................... 16,125 466,617
O'Reilly Automotive, Inc. (a) ............... 13,325 349,781
---------
816,398
Banks -- 1.89%
First Empire State Corp. .................... 1,125 523,125
Northern Trust Corp. ........................ 6,500 453,375
Star Banc Corp. ............................. 7,375 423,141
---------
1,399,641
Broadcasting & Media -- 8.31%
Chancellor Media Group ...................... 20,750 1,548,469
Clear Channel Communications, Inc. (a)....... 36,350 2,887,553
Heftel Broadcasting Corp. (a) ............... 36,575 1,709,881
---------
6,145,903
Building & Construction -- 4.29%
Fastenal Co. ................................ 72,725 2,781,731
Rental Services Corp. (a) ................... 15,825 388,702
---------
3,170,433
Business Services -- 12.44%
Apollo Group, Inc. (a) ...................... 60,700 2,868,075
Coinmachine Laundry Corp. (a) ............... 16,925 414,662
Outdoor Systems, Inc. (a) ................... 23,550 903,730
Paychex, Inc. ............................... 82,200 4,161,375
Profit Recovery Group
International, Inc. (a) .................. 20,100 356,775
Robert Half International, Inc. (a).......... 5,825 233,000
Snyder Communications, Inc. (a) ............. 7,225 263,712
---------
9,201,329
Drugs & Health Care -- 9.68%
Ameripath, Inc. (a) ......................... 21,700 368,900
Healthcare Financial Partners, Inc. (a)...... 17,650 626,575
Omnicare, Inc. .............................. 135,225 4,191,975
Market
Shares Value
------ ------
Common Stocks (continued)
- -------------------------
United States (continued)
- -------------------------
Drugs & Health Care (continued)
Pediatrix Medical Group, Inc. (a) ........... 24,525 $1,048,444
Sofamor Danek Group, Inc. (a) ............... 14,150 920,634
---------
7,156,528
Electrical Equipment -- 3.24%
Barnett, Inc. (a) ........................... 52,375 1,152,250
Littelfuse, Inc. (a) ........................ 49,875 1,240,641
---------
2,392,891
Electronics -- 5.68%
Berg Electronics Corp. (a) .................. 41,425 942,419
Maxim Integrated Products, Inc. (a).......... 41,550 1,433,475
Sanmina Corp. (a) ........................... 4,475 303,181
Sipex Corp. (a) ............................. 37,450 1,132,863
Vitesse Semiconductor Corp. (a) ............. 10,225 385,994
---------
4,197,932
Financial Services -- 7.31%
American Capital Strategies, Ltd. ........... 18,825 341,203
Capital Trust (a) ........................... 26,300 295,875
Charles Schwab Corp. ........................ 41,287 1,731,474
Federal Agricultural Mortgage
Corp., Class C (a) ....................... 5,300 323,300
Insignia Financial Group, Inc. (a)........... 69,500 1,598,500
Medallion Financial Corp. ................... 30,725 675,950
Regions Financial Corp. ..................... 10,375 437,695
---------
5,403,997
Food & Beverages -- 1.20%
JP Foodservice, Inc. (a) .................... 24,125 891,117
Gas Exploration -- 0.75%
Trigen Energy Corp. ......................... 27,675 551,770
Hotels & Restaurants -- 2.28%
Papa John's International, Inc. (a) ......... 48,337 1,685,753
Insurance -- 2.98%
Progressive Corp. ........................... 10,150 1,216,731
Protective Life Corp. ....................... 8,000 478,000
UICI (a) .................................... 14,625 510,047
---------
2,204,778
Leisure Time -- 4.21%
Family Golf Centers, Inc. (a) ............... 16,650 522,394
Premier Parks, Inc. (a) ..................... 15,725 636,863
Regal Cinemas, Inc. (a) ..................... 16,200 451,575
Royal Caribbean Cruises, Ltd. ............... 28,150 1,500,747
---------
3,111,579
Petroleum Services -- 0.36%
Hanover Compressor Co. (a) .................. 12,975 265,177
See notes to the financial statements.
<PAGE>
JNL CAPITAL GROWTH SERIES
SCHEDULE OF INVESTMENTS (continued)
Market
Shares Value
------ ------
Common Stocks (continued)
- -------------------------
United States (continued)
- -------------------------
Plastics -- 1.47%
Sealed Air Corp. (a) ........................ 17,575 $1,085,256
Pollution Control -- 0.20%
Culligan Water Technologies, Inc. (a)........ 2,950 148,238
Real Estate -- 1.61%
Security Capital Group, Inc. (a) ........... 22,100 718,250
Vornado Realty Trust ........................ 10,025 470,548
---------
1,188,798
Retail -- 4.72%
CompUSA, Inc. (a) ........................... 19,700 610,700
Fred Meyer, Inc. (a) ........................ 9,000 327,375
MSC Industrial Direct Co. Inc. (a) .......... 8,625 365,484
Petco Animal Supplies Inc. (a) .............. 81,690 1,960,560
Quality Food Centers, Inc. (a) .............. 3,350 224,450
---------
3,488,569
Schools -- 0.18%
Devry, Inc. (a) ............................. 4,125 131,484
Software -- 3.47%
America Online, Inc. (a) .................... 8,350 744,715
Cadence Design Systems, Inc. (a) ........... 74,175 1,817,288
---------
2,562,003
Telecommunications -- 3.04%
Pricellular Corp. Class A (a) ............... 116,057 1,211,345
Univision Communications, Inc. ..............
Class A (a) .............................. 14,825 1,034,970
---------
2,246,315
Market
Shares Value
------ ------
Common Stocks (continued)
- -------------------------
United States (continued)
- -------------------------
Utilities -- 3.15%
AES Corp.(a) ................................ 49,950 $2,328,919
Total United ............................. 62,405,446
States
Total Common Stocks
(cost $59,102,042) ...................... 71,856,940
-----------
Warrants -- 0.11%
Electrical Equipment -- 0.11%
Littelfuse, Inc.
Expires 12/27/2001, (cost $48,137)........... 3,700 81,400
-----------
Principal
Amount
---------
Short Term Investments -- 2.70%
Commercial Paper -- 2.70%
General Electric Capital Corp.
6.70%, 01/02/1998..............$ ............ 1,999,628 2,000,000
-----------
Total Short Term Investments
(cost $1,999,628) ......................... 1,999,628
-----------
Total Investments -- 100%
(cost $61,149,807) ............................ $73,937,968
===========
See notes to the financial statements.
- --------------------------------------------------------------------------------
(a) Non-income producing security.
<PAGE>
JNL GLOBAL EQUITIES SERIES
SCHEDULE OF INVESTMENTS
December 31, 1997
Market
Shares Value
------ ------
Common Stocks -- 94.87%
- -----------------------
Austria -- 0.61%
- ----------------
Banks -- 0.61%
Erste Bank Der Oesterreichischen
Sparkassen (a) ........................... 18,582 $926,048
Belgium -- 0.09%
Financial Services -- 0.09%
Credit Communal Holding Dexia ............... 962 129,172
Denmark -- 1.02%
Banks -- 0.83%
BG Bank A/S ................................. 14,420 970,186
Unidanmark Series A, A/S .................... 3,854 282,923
---------
1,253,109
Transportation -- 0.19%
SAS Danmark A/S ............................. 19,404 283,192
---------
Total Denmark ............................. 1,536,301
Finland -- 2.23%
- ----------------
Banks -- 0.15%
Merita PLC .................................. 43,143 235,860
Computers & Software -- 0.36%
Tietotehdas Oy, Class B (a) ................. 4,775 536,984
Conglomerates -- 0.26%
Amer Group Ltd. Series B (a) ................ 14,802 283,769
Metra Oy, Class B ........................... 4,690 110,131
---------
393,900
Food & Beverages -- 0.59%
Raisio Group PLC ............................ 7,449 884,158
Insurance -- 0.87%
Pohjola Insurance Group ..................... 21,619 801,152
Sampo Insurance Ltd. ........................ 15,671 508,859
---------
1,310,011
---------
Total Finland ............................. 3,360,913
France -- 9.41%
- ---------------
Automobiles & Parts --0.85%
Renault SA (a) .............................. 45,348 1,275,636
Banks -- 1.13%
Banque Nationale de Paris ................... 8,239 437,926
Credit Commercial de France ................. 6,558 449,477
Dexia France ................................ 5,932 686,982
Societe Generale ............................ 961 130,933
---------
1,705,318
Building & Construction -- 0.98%
Suez Lyonnaise des Eaux ..................... 10,099 1,117,543
Technip ..................................... 3,332 351,553
---------
1,469,096
Market
Shares Value
------ ------
Common Stocks (continued)
- -------------------------
France (continued)
- ------------------
Business Services -- 0.56%
Cap Gemini SA ............................. 10,315 $845,801
Chemicals -- 0.51%
Rhone Poulenc ............................. 17,279 774,017
Computer Services -- 0.54%
Axime (a) ................................. 6,284 810,232
Electrical Equipment -- 0.24%
Alcatel Alsthom ........................... 2,804 356,411
Food & Beverages -- 0.33%
Danone .................................... 2,736 488,693
Gas Exploration -- 1.85%
Elf Aquitaine SA .......................... 23,974 2,788,369
Insurance -- 0.16%
Assurances Generales de France ............ 4,113 217,934
Union des Assurances Federales ............ 204 26,777
----------
244,711
Oil -- 0.43%
Total ..................................... 5,973 650,048
Publishing -- 0.61%
Lagardere S.C.A ........................... 27,926 923,365
Retail -- 0.52%
GrandVision S.A ........................... 19,160 788,239
Tires & Rubber -- 0.70%
Compagnie Generale des
Etablissements Michelin ................ 20,920 1,053,213
----------
Total France .......................... 14,173,149
Germany -- 4.31%
- ----------------
Apparel & Textiles -- 0.37%
Adidas AG ................................. 4,290 564,226
Banks -- 2.15%
Bankgesellschaft Berlin AG ................ 4,949 108,942
Bayerische Verinsbank AG .................. 5,403 353,502
Deutsche Bank AG .......................... 23,529 1,661,071
Deutsche Phandbreif-und
Hypothekenbank ......................... 18,866 1,117,939
----------
3,241,454
Insurance -- 0.98%
Aachner & Muenchener
Beteiligungs AG ........................ 7,088 768,315
Allianz AG (a) ............................ 1,528 395,813
Muenchener Rueckversicherungs -
Gesellschaft AG ........................ 835 314,700
----------
1,478,828
See notes to the financial statements.
<PAGE>
JNL GLOBAL EQUITIES SERIES
SCHEDULE OF INVESTMENTS (continued)
Market
Shares Value
------ ------
Common Stocks (continued)
- -------------------------
Germany (continued)
- -------------------
Manufacturing -- 0.14%
Siemens AG .................................. 3,465 $205,132
Transportation -- 0.67%
Lufthansa AG ................................ 52,450 1,005,878
---------
Total Germany ............................. 6,495,518
Hong Kong -- 0.68%
- ------------------
Conglomerates -- 0.35%
Citic Pacific Ltd. .......................... 22,000 87,444
Hutchison Whampoa Ltd. ...................... 35,000 219,512
Swire Pacific Ltd. .......................... 41,000 224,868
---------
531,824
Financial Services -- 0.21%
First Pacific Co. Ltd. ...................... 641,540 310,463
Telecommunications -- 0.12%
China Telecom (a) ........................... 106,000 181,933
---------
Total Hong Kong ........................... 1,024,220
Italy -- 2.15%
- --------------
Banks -- 0.82%
Banca Commerciale Italiana .................. 270,103 939,024
Credito Italiano ............................ 94,601 291,718
---------
1,230,742
Insurance -- 0.45%
Assicurazioni Generali ...................... 27,193 667,912
Telecommunications -- 0.41%
Telecom Italia SPA .......................... 97,392 622,120
Transportation -- 0.47%
Aeroporti di Roma SPA (a) ................... 68,599 711,584
---------
Total Italy ............................... 3,232,358
Japan -- 7.73%
- --------------
Automobiles & Parts -- 0.18%
Denso Corp. ................................. 15,000 269,970
Building & Construction -- 0.07%
Matsushita Electric Works, Ltd. ............. 12,000 103,852
Computers & Business
Equipment -- 1.44%
Fujitsu Ltd. ................................ 22,000 235,889
NTT Data Corp. .............................. 36 1,938,271
---------
2,174,160
Market
Shares Value
------ ------
Common Stocks (continued)
- -------------------------
Japan (continued)
- -----------------
Drugs & Health Care -- 0.62%
Takeda Chemical Industries ................ 33,000 $940,185
Electrical Equipment -- 0.21%
Hitachi Ltd. .............................. 45,000 320,517
Food & Beverages -- 0.20%
Kita Kyushu Coca-Cola Bottling ............ 15,400 292,502
Household Furniture &
Appliances -- 1.85%
Sony Corp. ................................ 31,400 2,789,615
Real Estate -- 0.46%
Mitsubishi Estate Co. Ltd. ................ 64,000 696,025
Retail -- 0.12%
Mitsui & Co. .............................. 18,000 173,700
Rubber & Tires -- 0.29%
Bridgestone Corp. ......................... 20,230 438,469
Telecommunications -- 2.29%
Nippon Telegraph & Telephone .............. 402 3,448,265
Corp ......................................
----------
Total Japan ............................. 11,647,260
Mexico -- 0.72%
- ---------------
Conglomerates -- 0.07%
Grupo Carso SA de CV ...................... 15,000 100,366
Food & Beverages -- 0.38%
Fomento Economico Mexicano
SA de CV, Class A ...................... 72,700 581,024
Paper & Paper Products -- 0.19%
Kimberly Clark de Mexico SA de CV ......... 58,200 284,852
Retail -- 0.08%
Cifra SA De CV ............................ 46,471 114,011
----------
Total Mexico ............................ 1,080,253
Netherlands -- 8.40%
- --------------------
Airlines -- 0.39%
KLM Royal Dutch Airlines NV ............... 15,930 589,229
Business Services -- 0.08%
Vedior .................................... 6,542 117,763
Chemicals -- 2.57%
Akzo Nobel NV ............................. 22,426 3,866,609
See notes to the financial statements.
<PAGE>
JNL GLOBAL EQUITIES SERIES
SCHEDULE OF INVESTMENTS (continued)
Market
Shares Value
------ ------
Common Stocks (continued)
- -------------------------
Netherlands (continued)
- -----------------------
Computers & Business
Equipment -- 0.56%
Getronics NV ............................... 26,284 $837,396
Electronics -- 0.46%
Simac Techniek NV .......................... 6,000 698,345
Food & Beverages -- 0.27%
Nutricia Verenigde Bedrijuen NV ............ 13,685 415,075
Household Furniture &
Appliances -- 1.58
Philips Electronics NV ..................... 39,656 2,378,206
Publishing -- 2.49%
Elsevier NV ................................ 79,051 1,278,758
Wolters Kluwer NV (a) ...................... 19,198 2,479,696
----------
3,758,454
----------
Total Netherlands ........................ 12,661,077
Norway -- 0.44%
- ---------------
Computers & Business
Equipment -- 0.13%
Merkantildata ASA .......................... 5,594 192,379
Industrial Machinery -- 0.14%
Tomra Systems ASA .......................... 9,800 218,934
Transportation -- 0.17%
SAS Norge ASA B shares ..................... 18,334 255,680
----------
Total Norway ............................. 666,993
South Africa -- 0.00%
- ---------------------
Computers & Business
Equipment -- 0.00%
Dimension Data Holdings, Ltd. (a) .......... 93 401
Spain -- 0.60%
- --------------
Commercial Services -- 0.01%
Prosegur, Companhia de Seguridad SA ........ 882 8,857
Food & Beverages -- 0.59%
Telepizza SA (a) ........................... 11,090 895,353
----------
Total Spain .............................. 904,210
Sweden -- 6.50%
- ---------------
Banks -- 0.40%
Skandinaviska Enskilda Banken .............. 48,065 608,387
Market
Shares Value
------ ------
Common Stocks (continued)
- -------------------------
Sweden (continued)
- ------------------
Broadcasting -- 0.02%
Modern Times Group (a) ...................... 4,423 $26,460
Business Services -- 0.95%
Securitas AB, Class B ....................... 30,493 921,714
WM-Data AB B Shares ......................... 28,290 511,293
---------
1,433,007
Conglomerates -- 0.07%
Kinnevik Investment Series B ................ 6,410 106,162
Drugs & Health Care -- 0.68%
Ortivus AB Series B (a) ..................... 30,829 1,028,941
Electronics -- 0.10%
Pricer AB Series B (a) ...................... 8,283 153,352
Financial Services -- 0.37%
Investor AB ................................. 11,344 552,920
Household Furniture &
Appliances -- 1.56%
Electrolux AB Series B ...................... 33,822 2,347,123
Insurance -- 0.34%
Skandia Forsakrings AB ...................... 10,685 503,978
Non-Ferrous Metals -- 1.02%
Assa Abloy AB Series B ...................... 58,124 1,537,304
Telecommunications -- 0.76%
Ericcson LM Tel Series B .................... 30,573 1,149,390
Transportation -- 0.23%
SAS Sverige AB .............................. 23,950 346,887
---------
Total Sweden .............................. 9,793,911
Switzerland -- 7.53%
- --------------------
Banks -- 1.36%
Credit Suisse Group AG ...................... 4,356 673,731
Union Bank of Switzerland AG (a) ........... 955 1,380,345
---------
2,054,076
Business Services -- 0.28%
Kuoni Reisen AG ............................. 112 419,655
Drugs & Health Care -- 2.16%
Ares Serono SA .............................. 198 326,567
Novartis AG ................................. 973 1,578,162
Roche Holding AG ............................ 136 1,350,041
---------
3,254,770
See notes to the financial statements.
<PAGE>
JNL GLOBAL EQUITIES SERIES
SCHEDULE OF INVESTMENTS (continued)
Market
Shares Value
------ ------
Common Stocks (continued)
- -------------------------
Switzerland (continued)
- -----------------------
Insurance -- 3.61%
Baloise Holdings Ltd. (a) ................. 268 $495,760
Swiss Life ................................ 4,860 3,814,960
Zurich Versicherungs-Gesellschaft ......... 2,367 1,127,451
----------
5,438,171
Transportation -- 0.12%
Sairgroup (a) ............................. 134 183,411
----------
Total Switzerland ....................... 11,350,083
United Kingdom -- 16.54%
- ------------------------
Banks -- 2.36%
Barclays PLC .............................. 21,070 560,914
Lloyds TSB Group PLC ...................... 209,071 2,719,927
National Westminster Bank PLC ............. 16,478 273,899
----------
3,554,740
Building & Construction -- 0.49%
Powerscreen International PLC ............. 74,340 745,996
Business Services -- 1.49%
BTG PLC ................................... 59,268 666,832
Logica PLC ................................ 82,890 1,583,388
----------
2,250,220
Chemicals -- 0.33%
Imperial Chemical Industries PLC .......... 29,432 459,733
Victrex PLC ............................... 11,785 45,489
----------
505,222
Conglomerates -- 6.96%
Hays PLC .................................. 116,697 1,553,582
Misys PLC ................................. 29,138 880,609
Rentokil Initial PLC ...................... 746,851 3,305,104
Siebe PLC ................................. 168,999 3,317,091
Ti Group PLC .............................. 36,421 279,965
Tomkins PLC ............................... 101,196 478,698
Williams PLC .............................. 122,408 679,566
----------
10,494,615
Drugs & Health Care -- 0.27%
SmithKline Beecham PLC .................... 38,928 401,219
Electronics -- 0.70%
Electrocomponents PLC ..................... 95,469 710,339
Premier Farnell PLC ....................... 48,338 347,751
----------
1,058,090
Financial Services -- 0.44%
Amvescap PLC .............................. 14,136 120,914
JBA Holdings PLC .......................... 31,557 536,465
----------
657,379
Market
Shares Value
------ ------
Common Stocks (continued)
- -------------------------
United Kingdom (continued)
- --------------------------
Food & Beverages -- 0.07%
J D Wetherspoon PLC ....................... 18,310 $100,147
Insurance -- 0.61%
Royal & Sun Alliance Insurance ............ 91,459 920,857
Group
Leisure & Entertainment -- 0.60%
Compass Group PLC ......................... 72,955 897,516
Oil -- 0.31%
British Petroleum Co. PLC ................. 35,097 464,282
Publishing -- 1.05%
Newsquest PLC (a) ......................... 364,524 1,589,630
Software -- 0.07%
Sema Group PLC ............................ 4,350 105,744
Telecommunications -- 0.46%
Energis PLC (a) ........................... 103,321 432,747
Freepages Group PLC (a) ................... 492,475 258,845
----------
691,592
Transportation -- 0.33%
Stagecoach Holdings PLC ................... 35,805 491,061
----------
Total United Kingdom .................... 24,928,310
United States -- 25.91%
- -----------------------
Automobile & Parts -- 0.02%
Tata Engineering & Locomotive
Co. Ltd. (144a) ........................ 3,718 28,092
Banks -- 0.56%
Banco Rio de la Plata SA (a) .............. 6,175 86,450
BankAmerica Corp. ......................... 2,850 208,050
Uniao de Bancos Brasileiros SA ............ 5,925 190,711
Wells Fargo & Co. ......................... 1,075 364,895
----------
850,106
Broadcast & Communications -- 0.52%
Grupo Televisa SA de CV ADR (a) ........... 20,225 782,455
Business Services -- 0.10%
Manpower, Inc. ............................ 4,250 149,813
Chemicals -- 2.76%
Du Pont E I De Nemours & Co. .............. 15,450 927,966
Monsanto Co. .............................. 52,675 2,212,350
Solutia, Inc. ............................. 38,325 1,022,798
----------
4,163,114
See notes to the financial statements.
<PAGE>
JNL GLOBAL EQUITIES SERIES
SCHEDULE OF INVESTMENTS (continued)
Market
Shares Value
------ ------
Common Stocks (continued)
- -------------------------
United States (continued)
- -------------------------
Computers & Business
Equipment -- 0.40%
Compaq Computer Corp. ....................... 9,050 $510,759
Dassault Systemes SA ADR .................... 3,000 92,625
---------
603,384
Conglomerates -- 1.26%
CBS Corp. ................................... 50,350 1,482,178
General Electric Co. ........................ 2,150 157,756
Minnesota Mining &
Manufacturing Co. ........................ 3,200 262,600
---------
1,902,534
Drugs & Health Care -- 2.92%
Cardinal Health, Inc. ....................... 2,900 217,863
Elan Corp. PLC ADR (a) ...................... 6,025 308,404
Grupo Casa Autrey SA de CV ADR .............. 11,950 244,228
Eli Lilly & Co. ............................. 8,950 623,144
Pfizer, Inc. ................................ 12,725 948,808
Schering Plough Corp. ....................... 1,875 116,484
SmithKline Beecham PLC ADR .................. 8,700 447,506
Warner Lambert Co. .......................... 12,050 1,494,200
---------
4,400,637
Electronics -- 3.54%
Analog Devices, Inc. (a) .................... 2,000 55,375
Intel Corp. ................................. 2,650 186,162
Philips Electronics ......................... 48,469 2,932,375
Texas Instruments, Inc. ..................... 48,075 2,163,375
---------
5,337,287
Energy -- 0.13%
AO Mosenergo ................................ 1,325 48,893
Companhia Energetica de Minas Gerais ADR..... 1,050 45,621
Unified Energy Systems - Russia (a).......... 3,133 95,557
---------
190,071
Financial Services -- 0.87%
Romania Investment Fund ..................... 204 195,222
SLM Holding Corp. ........................... 8,025 1,116,478
---------
1,311,700
Industrial Machinery -- 0.34%
Asm Lithography Holdings NV (a) ............. 3,100 209,250
Pfeiffer Vacuum Technology
AG ADR (a) ............................... 10,675 298,900
---------
508,150
Oil -- 1.97%
Halliburton Co. ............................. 2,825 146,723
Oil Co Lu Koil Holding ADR .................. 2,650 243,336
Petroleum Geo-Services (a) .................. 12,025 778,619
Market
Shares Value
------ ------
Common Stocks (continued)
- -------------------------
United States (continued)
- -------------------------
Oil (continued)
Schlumberger Ltd. ......................... 14,425 $1,161,212
Transocean Offshore, Inc. ................. 5,300 255,394
YPF Sociedad Anonima ADR .................. 11,100 379,481
-----------
2,964,765
Retail -- 0.07%
Disco SA ADR (a) .......................... 2,300 102,350
Software -- 5.35%
Cisco Systems, Inc. (a) ................... 55,788 3,110,153
Microsoft Corp. (a) ....................... 25,550 3,302,337
Parametric Technology Corp. (a) ........... 34,725 1,645,097
-----------
8,057,587
Telecommunications -- 4.89%
Comcast Corp. ............................. 26,950 850,609
Ericsson L M Tel Co. ...................... 15,656 584,165
Millicom International Cellular SA (a).... 5,500 206,938
Nokia Corp. ADR ........................... 9,275 649,250
Nortel Inversora SA ADR Series B .......... 36,400 928,200
Northern Telecom Ltd. ..................... 7,625 678,625
Quinenco SA ADR (a) ....................... 22,425 257,888
Tele Communications, Inc. (a) ............. 84,050 2,348,147
Telecom Argentina Stet-
France Telecom ADR Class B ............. 3,750 134,062
Telefonica de Argentina SA ADR (a)......... 4,325 161,106
Telefonica del Peru SA ADR ................ 24,725 576,401
-----------
7,375,391
Transportation -- 0.21%
Ryanair Holdings PLC ADR (a) .............. 12,700 319,088
-----------
Total United States ..................... 39,046,524
-----------
Total Common Stocks
(cost $125,674,377) ................. 142,956,701
-----------
Preferred Stocks -- 0.88%
- -------------------------
Brazil -- 0.48%
- ---------------
Electric Utilities -- 0.14%
Companhia Energetica de Minas
Gerais
Gerais (a) ............................... 4,391,000 190,780
Companhia Paranaense de
Energia - Copel (a) ..................... 1,000,000 13,575
---------
204,355
Food & Beverages -- 0.01%
Companhia Cervejaria Brahma (a) ............. 20,000 13,440
Oil -- 0.08%
Petrobras Brasileiro SA ..................... 495,500 115,878
See notes to the financial statements.
<PAGE>
JNL GLOBAL EQUITIES SERIES
SCHEDULE OF INVESTMENTS (continued)
Market
Shares Value
------ ------
Preferred Stocks (continued)
- ----------------------------
Brazil (continued)
- ------------------
Telecommunications -- 0.25%
Ericsson Telecom SA (a) ....................... $11,970,000 383,967
------------
Total Brazil ................................ 717,640
Finland -- 0.36%
Telecommunications -- 0.36%
Nokia Oy AB Series A .......................... 7,686 545,682
United States -- 0.04%
Drugs & Health Care -- 0.04%
Fresenius Medical Care AG (a) ................. 2,900 63,075
------------
Total Preferred Stocks
(cost $1,687,375) ....................... 1,326,397
------------
Principal Market
Amount Value
--------- ------
Short Term Investments -- 4.25%
- -------------------------------
Commercial Paper -- 4.25%
General Electric Capital Corp.,
6.70%, 01/02/1998............................ $ 6,400,000 $6,398,809
------------
Total Short Term Investments
(cost $6,398,809) ................... 6,398,809
------------
Total Investments -- 100%
- -------------------------
(cost $133,760,561) .......................... $150,681,907
============
- --------------------------------------------------------------------------------
(a) Non-income producing security.
See notes to the financial statements
<PAGE>
JNL/ALGER GROWTH SERIES
SCHEDULE OF INVESTMENTS
December 31, 1997
Market
Shares Value
------ ------
Common Stocks -- 89.41%
- -----------------------
Aerospace & Defense -- 0.40%
Gulfstream Aerospace Corp. (a) .................. 12,100 $353,925
Airlines -- 2.53%
AMR Corp. (a) ................................... 17,300 2,223,050
Banks -- 7.31%
Banc One Corp. .................................. 15,878 862,374
BankAmerica Corp. ............................... 23,000 1,679,000
Bank of New York Co., Inc. ...................... 44,600 2,578,438
Corestates Financial Corp. ...................... 6,200 496,388
First Union Corp. ............................... 16,000 820,000
----------
6,436,200
Building & Construction -- 1.02%
Masco Corp. ..................................... 17,600 895,400
Business Services -- 4.88%
Cendant Corp. (a) ............................... 87,000 2,990,625
Cognizant Corp. ................................. 29,200 1,301,225
----------
4,291,850
Computers & Technology -- 4.23%
Bay Networks, Inc. (a) .......................... 35,300 902,356
Cisco Systems, Inc. (a) ......................... 28,050 1,563,787
HBO & Co. ....................................... 26,100 1,252,800
----------
3,718,943
Conglomerates -- 3.30%
CBS Corp. ....................................... 85,500 2,516,906
Fortune Brands, Inc. ............................ 10,500 389,156
----------
2,906,062
Drugs & Health Care -- 15.13%
AmeriSource Health Corp. (a) .................... 14,900 867,925
Bergen Brunswig Corp. ........................... 10,000 421,250
Bristol Myers Squibb Co. ........................ 22,000 2,081,750
Cardinal Health, Inc. ........................... 12,100 909,012
Eli Lilly & Co. ................................. 19,600 1,364,650
Guidant Corp. ................................... 33,500 2,085,375
McKesson Corp. .................................. 3,700 400,294
Pfizer, Inc. .................................... 7,800 581,588
Schering Plough, Corp. .......................... 37,600 2,335,900
Warner Lambert Co. .............................. 18,300 2,269,200
----------
13,316,944
Electronics -- 3.40%
Altera Corp. (a) ................................ 26,000 861,250
Linear Technology Corp. ......................... 15,000 864,375
Tellabs, Inc. (a) ............................... 24,000 1,269,000
----------
2,994,625
Financial Services -- 5.65%
Charles Schwab Corp. ............................ 17,850 748,584
Federal Home Loan Mortgage Corp. ................ 22,300 935,206
Market
Shares Value
------ ------
Common Stocks (continued)
- -------------------------
Financial Services (continued)
Household International, Inc. ............... 5,300 $676,081
Morgan Stanley, Dean Witter,
Discover & Co. ........................... 30,375 1,795,922
PaineWebber Group, Inc. ..................... 23,700 819,131
---------
4,974,924
Food & Beverages -- 0.65%
PepsiCo, Inc. ............................... 15,600 568,425
Hotels & Restaurants -- 1.04%
Mirage Resorts, Inc. (a) .................... 8,500 193,375
Starwood Lodging Trust Co. .................. 12,500 723,438
---------
916,813
Household Appliances &
Furnishings -- 2.39%
Sunbeam Corp. ............................... 50,000 2,106,250
Industrial Machinery -- 2.74%
Tyco International, Ltd. .................... 53,440 2,408,140
Insurance -- 5.59%
American International Group,Inc ............ 19,900 2,164,125
MGIC Investment Corp. ....................... 9,400 625,100
Travelers Group, Inc. ....................... 39,600 2,133,450
---------
4,922,675
Leisure Time -- 4.45%
Carnival Corp. .............................. 32,900 1,821,837
International Game Technology, Inc .......... 83,000 2,095,750
---------
3,917,587
Petroleum Services -- 1.22%
Diamond Offshore Drilling, Inc. (a).......... 13,200 635,250
Halliburton Co. ............................. 8,600 446,663
---------
1,081,913
Pollution Control -- 2.00%
USA Waste Services, Inc. (a) ................ 44,760 1,756,830
Retail -- 10.42%
CVS Corp. ................................... 11,300 723,906
General Nutrition Companies, ................ 29,700 1,009,800
Inc. (a)
Home Depot, Inc. ............................ 44,250 2,605,219
Rite Aid Corp. .............................. 5,000 293,438
Safeway, Inc. (a) ........................... 20,600 1,302,950
Staples, Inc. (a) ........................... 30,200 838,050
Wal-Mart Stores, Inc. ....................... 61,000 2,405,688
---------
9,179,051
Software -- 3.69%
America Online, Inc. (a) .................... 19,000 1,694,562
Microsoft Corp. (a) ......................... 12,000 1,551,000
---------
3,245,562
See notes to the financial statements.
<PAGE>
JNL/ALGER GROWTH SERIES
SCHEDULE OF INVESTMENTS (continued)
Market
Shares Value
------ ------
Common Stocks (continued)
Telecommunications -- 3.66%
AT&T Corp. .................................... 14,200 $869,750
Ciena Corp. (a) ............................... 22,600 1,381,425
Worldcom, Inc. (a) ............................ 32,000 968,000
-----------
3,219,175
Toys -- 1.83%
Mattel, Inc. .................................. 43,200 1,609,200
Transportation -- 1.88%
Burlington Northern Santa Fe .............. 17,800 1,654,287
Corp. ............................................
-----------
Total Common Stocks
(cost $66,939,935) ............... 78,697,831
-----------
Principal Market
Amount Value
------ ------
Short Term Investments -- 10.59%
- --------------------------------
Commercial Paper -- 9.08%
Dow Chemical Co.,
5.80%, 01/05/1998........................... $2,000,000 $1,998,711
Four Winds Funding Corp.,
6.06%, 01/05/1998 .......................... 3,000,000 2,997,980
Holland Limited
Securitization,
6.30%, 01/07/1998 .......................... 2,000,000 1,997,900
Merrill Lynch & Co., Inc. .....................
6.05%, 01/06/1998 .......................... 1,000,000 998,656
-----------
7,993,247
Money Market Funds -- 1.51%
State Street Global Advisor
Fund, 5.42% (b) ............................ 1,329,107 1,329,107
-----------
Total Short Term Investments
(cost $9,322,354) ........................ 9,322,354
-----------
Total Investments -- 100%
- -------------------------
(cost $76,262,289) ............................... $88,020,185
===========
- --------------------------------------------------------------------------------
(a) Non-income producing security.
(b) Dividend yields change daily to reflect current market conditions. Rate
stated is the quoted yield as of December 31, 1997.
See notes to the financial statements
<PAGE>
JNL/EAGLE CORE EQUITY SERIES
SCHEDULE OF INVESTMENTS
December 31, 1997
Market
Shares Value
------ ------
Common Stocks -- 92.28%
- -----------------------
Apparel & Textiles -- 0.42%
Intimate Brands, Inc. ............................... 2,100 $50,531
Automobiles & Parts -- 0.32%
Ford Motor Company .................................. 800 38,950
Banks -- 4.17%
BankAmerica Corp. ................................... 2,000 146,000
Chase Manhattan Corp. ............................... 800 87,600
First Union Corp. ................................... 1,100 56,375
Mellon Bank Corp. ................................... 1,000 60,625
NationsBank Corp. ................................... 2,500 152,031
---------
502,631
Building & Construction -- 0.14%
Harsco Corp. ........................................ 400 17,250
Business Services -- 2.53%
Omnicom Group, Inc. ................................. 6,200 262,725
Unisource Worldwide, Inc. ........................... 3,000 42,750
---------
305,475
Chemicals -- 2.13%
Crompton & Knowles Corp. ............................ 2,000 53,000
Du Pont EI De NeMours & Co. ......................... 2,100 126,131
Imperial Chemical Industries PLC ADR ................ 1,200 77,925
---------
257,056
Computers & Business
Equipment -- 4.47%
Cisco Systems, Inc. (a) ............................. 3,000 167,250
Dell Computer Corp. (a) ............................. 1,000 84,000
HBO & Co. ........................................... 3,500 168,000
Hewlett Packard Co. ................................. 1,300 81,250
Wallace Computer Services, Inc. ..................... 1,000 38,875
---------
539,375
Conglomerates -- 0.55%
Fortune Brands, Inc. ................................ 1,800 66,712
Containers & Glass -- 0.91%
Crown Cork & Seal, Co. Inc. ......................... 2,200 110,275
Drugs & Health Care -- 10.56%
Bausch & Lomb, Inc. ................................. 1,800 71,325
Columbia/HCA Healthcare Corp. ....................... 5,000 148,125
Eli Lilly & Co. ..................................... 3,000 208,875
Guidant Corp. ....................................... 2,500 155,625
Humana, Inc. (a) .................................... 1,200 24,900
Oxford Health Plans, Inc. (a) ....................... 9,000 140,062
Pharmacia & Upjohn, Inc. ............................ 1,400 51,275
Pfizer, Inc. ........................................ 2,500 186,406
SmithKline Beecham PLC ADR .......................... 1,000 51,438
Warner Lambert Co. .................................. 1,900 235,600
---------
1,273,631
Market
Shares Value
------ ------
Common Stocks (continued)
- -------------------------
Electric Utilities -- 1.95%
Central & Southwest Corp. ........................... 1,400 $37,887
FPL Group, Inc. ..................................... 900 53,269
Nipsco Industries, Inc. ............................. 1,100 54,381
Teco Energy, Inc. ................................... 3,200 90,000
---------
235,537
Electrical Equipment -- 5.08%
Essex International, Inc. (a) ....................... 3,000 89,250
Fisher Scientific International, .................... 1,600 76,400
Inc .................................................
General Electric Co. ................................ 2,800 205,450
Philips Electronics NV .............................. 4,000 242,000
---------
613,100
Electronics -- 4.94%
Intel Corp. ......................................... 1,000 70,250
General Signal Corp. ................................ 3,000 126,562
Lexmark International Group,
Inc. Class A (a) ................................. 2,400 91,200
Raytheon Co. (a) .................................... 1,800 90,900
Tellabs, Inc. (a) ................................... 2,000 105,750
Thermo Electron Corp. (a) ........................... 2,500 111,250
---------
595,912
Financial Services -- 7.71%
American Express Corp. .............................. 1,500 133,875
Charles Schwab Corp. ................................ 3,500 146,781
Federal Home Loan Mortgage Corp. .................... 3,500 146,781
Federal National Mortgage Association ............... 3,000 171,187
SLM Holdings Corp. .................................. 900 125,213
Travelers Group, Inc. ............................... 3,849 207,365
---------
931,202
Food & Beverages -- 1.51%
Coca-Cola Co. ....................................... 1,000 66,625
Heinz H J Co. ....................................... 1,100 55,894
Sysco Corp. ......................................... 1,300 59,231
---------
181,750
Gas & Pipeline Utilities -- 2.15%
American WaterWorks Company, Inc .................... 2,000 54,625
Houston Industries, Inc. ............................ 1,000 57,063
UGI Corp. ........................................... 1,700 49,831
Wicor, Inc. ......................................... 1,000 46,438
Williams Cos., Inc. ................................. 1,800 51,075
---------
259,032
Gas Exploration -- 0.79%
Enron Corp. ......................................... 2,300 95,594
Hotels & Restaurants -- 0.86%
Marriott International, Inc. ........................ 1,500 103,875
See notes to the financial statements.
<PAGE>
JNL/EAGLE CORE EQUITY SERIES
SCHEDULE OF INVESTMENTS (continued)
Market
Shares Value
------ ------
Common Stocks (continued)
- -------------------------
Household Products -- 5.17%
Black & Decker Corp. ................................ 3,600 $140,625
Gillette Co. ........................................ 1,500 150,656
Sunbeam Corp. ....................................... 5,100 214,838
Tupperware Corp. .................................... 4,200 117,075
---------
623,194
Industrial Machinery -- 1.43%
American Standard Cos., Inc. (a) ................... 4,500 172,406
Insurance -- 3.30%
Allstate Corp. ...................................... 2,000 181,750
American International Group, Inc ................... 1,500 163,125
Safeco Corp. ........................................ 1,100 53,625
---------
398,500
Metals -- 0.54%
Allegheny Teledyne, Inc. ............................ 2,500 64,688
Mutual Funds -- 4.14%
Midcap SPDR Trust ................................... 2,500 160,547
SPDR Trust .......................................... 3,500 339,281
---------
499,828
Oil -- 4.73%
Ashland, Inc. ....................................... 2,400 128,850
Atlantic Richfield Co. .............................. 500 40,063
British Petroleum Co. PLC ADR ....................... 900 71,719
Diamond Offshore Drilling, Inc. ..................... 2,000 96,250
Exxon Corp. ......................................... 600 36,712
Mobil Corp. ......................................... 1,600 115,500
Royal Dutch Petroleum Co. ........................... 1,500 81,281
---------
570,375
Petroleum Services -- 2.63%
Baker Hughes, Inc. .................................. 2,000 87,250
Halliburton Co. ..................................... 700 36,356
Schlumberger Ltd. ................................... 2,400 193,200
---------
316,806
Plastics -- 1.00%
Illinois Tool Works, Inc. ........................... 2,000 120,250
Publishing -- 0.49%
McGraw Hill Cos., Inc. .............................. 800 59,200
Real Estate -- 3.31%
Alexander Haagen Properties, Inc .................... 1,400 24,413
Grove Real Estate Asset Trust (a).................... 2,000 21,750
Koger Equity, Inc. .................................. 1,000 21,938
Mack California Realty Corp. ........................ 800 32,800
Nationwide Health Properties, Inc ................... 1,300 33,150
Market
Shares Value
------ ------
Common Stocks (continued)
- -------------------------
Real Estate (continued)
Parkway Properties, Inc. ............................ 500 $17,156
Public Storage, Inc. (a) ............................ 1,000 29,375
Rouse Co. ........................................... 1,300 42,575
Security Capital Group, Inc. (a) .................... 2,700 87,750
SL Green Realty Corp. ............................... 1,000 25,938
Spieker Properties, Inc. ............................ 800 34,300
Sun Communities, Inc. ............................... 800 28,750
---------
399,895
Retail -- 4.36%
Federated Department Stores, Inc. (a) ............... 1,600 68,900
Home Depot, Inc. .................................... 3,000 176,625
Kohl's Corp. (a) .................................... 2,000 136,250
Toys R Us, Inc. (a) ................................. 1,600 50,300
Walgreen Co. ........................................ 3,000 94,125
---------
526,200
Software -- 2.15%
Microsoft Corp. (a) ................................. 800 103,400
Peoplesoft, Inc. (a) ................................ 4,000 156,000
---------
259,400
Telecommunications -- 4.09%
AT&T Corp. .......................................... 2,000 122,500
Alltel Corp. ........................................ 1,300 53,381
Bell Atlantic Corp. ................................. 1,000 91,000
Bellsouth Corp. ..................................... 1,500 84,469
GTE Corp. ........................................... 1,200 62,700
Lucent Technologies, Inc. ........................... 1,000 79,875
---------
493,925
Tobacco -- 3.75%
Philip Morris Cos., Inc. ............................ 3,800 172,188
RJR Nabisco Holdings Corp. .......................... 4,700 176,250
UST, Inc. ........................................... 2,800 103,425
---------
451,863
---------
Total Common Stocks
(cost $9,651,216) ............................... 11,134,418
----------
Preferred Stocks -- 2.31%
- -------------------------
Gas & Pipeline Utilities -- 0.41%
MCN Energy Group, Inc. .............................. 800 50,000
Hotels & Restaurants -- 0.50%
Wendy's Financing, Inc. ............................. 1,100 60,500
Insurance -- 0.44%
Jefferson Pilot Corp. ............................... 500 53,500
Oil -- 0.16%
Lomak Financial Trust ............................... 400 18,800
Market
Shares Value
------ ------
Preferred Stocks (continued)
- ----------------------------
Publishing -- 0.35%
Golden Books Financial Trust ........................ 800 $41,700
Retail -- 0.45%
Kmart Financing I ................................... 1,050 54,206
---------
Total Preferred Stocks
(cost $266,796) ................................. 278,706
---------
Principal
Amount
---------
Convertible Bonds -- 0.68%
- --------------------------
Hotels & Restaurants -- 0.41%
Capstar Hotel Co. ...................................
4.75%,10/15/2000................................ $50,000 49,812
Retail -- 0.27%
Home Depot, Inc. ....................................
3.25%, 10/15/2004................................ 25,000 32,844
---------
Total Convertible Bonds
(cost $ 75,643)................................ 82,656
---------
Principal Market
Amount Value
--------- ------
Short Term Investments -- 4.73%
- -------------------------------
Money Market Funds -- 4.73%
State Street Global Advisor
Fund,
5.42%, (b ........................................ $285,074 $285,074
State Street Global Advisor
Government
Fund, 5.30%, (b) ................................. 285,074 285,074
-----------
Total Short Term Investments
(cost $570,148)............................ 570,148
-----------
Total Investments -- 100%
(cost $10,563,803) .................................. $12,065,928
===========
- --------------------------------------------------------------------------------
(a) Non-income producing security.
(b) Dividend yields change daily to reflect current market conditions. Rate
stated is the quoted yield as of December 31, 1997.
See notes to the financial statements.
<PAGE>
JNL/EAGLE CORE EQUITY SERIES
SCHEDULE OF CALL OPTIONS WRITTEN
December 31, 1997
Contracts
(100 shares Market
per contract) Value
- ------------- ------
3 Atlantic Richfield Co.
Expiration January 1998, Exercise Price $80.00.. $(581)
---------
Total Call Options Written
(Premiums received $1,038)............ $(581)
=========
See notes to the financial statements.
<PAGE>
JNL/EAGLE SMALLCAP EQUITY SERIES
SCHEDULE OF INVESTMENTS
December 31, 1997
Market
Shares Value
------ -----
Common Stocks -- 92.76%
- -----------------------
Apparel & Textiles -- 3.78%
Barry R.G. Corp. (a) ................................ 17,000 $197,625
Genesco, Inc. (a) ................................... 27,000 344,250
----------
541,875
Building & Construction -- 1.05%
Lennar Corp. ........................................ 7,000 150,938
Business Services -- 13.42%
CDI Corp. (a) ....................................... 10,000 457,500
Interim Services, Inc. (a) .......................... 20,000 517,500
MPW Industrial Services Group, ...................... 35,000 315,000
Inc. (a)
RCM Technologies, Inc. (a) .......................... 20,000 340,000
Wackenhut Corp. Class B ............................. 14,000 295,750
----------
1,925,750
Commercial Services -- 2.91%
Steiner Leisure Ltd. (a) ............................ 13,500 416,813
Computers & Business
Equipment -- 5.49%
Inspire Insurance Solutions, ........................ 20,000 417,500
Inc. (a)
Sykes Enterprises, Inc. (a) ......................... 19,000 370,500
----------
788,000
Distribution-Wholesale -- 2.46%
VWR Scientific Products Corp. (a) ................... 12,500 353,125
Drugs & Health Care -- 8.81%
Alternative Living Services, ........................ 10,000 295,625
Inc. (a)
Angeion Corp. (a) ................................... 16,000 44,000
Horizon Health Corp. (a) ............................ 15,000 348,750
Pharmerica, Inc. (a) ................................ 40,000 415,000
Protein Design Labs, Inc. (a) ....................... 4,000 160,000
----------
1,263,375
Education -- 2.24%
Strayer Education, Inc. ............................. 9,750 321,750
Electrical Equipment -- 4.87%
Coherent, Inc. (a) .................................. 11,000 386,375
Pioneer Standard Electronics, ....................... 9,000 137,250
Inc .................................................
SymmetriCom, Inc. (a) ............................... 15,000 174,375
----------
698,000
Electronics -- 11.35%
Computer Products, Inc. (a) ......................... 20,000 452,500
Gentex Corp. (a) .................................... 11,000 295,625
Oyo Geospace Corp. (a) .............................. 23,000 434,125
Sawtek, Inc. (a) .................................... 12,000 316,500
Trident International, Inc. (a) ..................... 10,000 130,000
----------
1,628,750
Market
Shares Value
------ ------
Common Stocks (continued)
- -------------------------
Financial Services -- 6.42%
Advest Group, Inc. .................................. 9,000 $222,187
Ampex Corp. Class A (a) ............................. 190,000 475,000
Legg Mason, Inc. .................................... 4,000 223,750
----------
920,937
Gas Exploration -- 1.48%
Chieftain International, Inc. (a) ................... 10,000 212,500
Hotels & Restaurants -- 4.25%
Capstar Hotel Co. (a) ............................... 5,000 171,563
Servico, Inc. (a) ................................... 26,000 438,750
----------
610,313
Household, Appliances &
Furnishings -- 1.43%
Furniture Brands International, ..................... 10,000 205,000
Inc. (a)
Leisure Time -- 1.64%
International Speedway Corp. ........................ 10,000 235,625
Class B
Non-Ferrous Metals -- 1.90%
Imco Recycling, Inc. ................................ 17,000 273,062
Petroleum Services -- 5.55%
Gulf Island Fabrication, Inc. (a) ................... 12,000 240,000
Marine Drilling Companies, Inc. ..................... 4,100 85,075
(a)
Precision Drilling Corp. (a) ........................ 10,000 243,750
Pride International, Inc. (a) ....................... 9,000 227,250
----------
796,075
Pollution Control -- 1.41%
Superior Services, Inc. (a) ......................... 7,000 202,125
Publishing -- 3.95%
Houghton Mifflin Co. ................................ 4,400 168,850
World Color Press, Inc. (a) ......................... 15,000 398,438
----------
567,288
Real Estate -- 3.29%
LNR Property Corp. .................................. 20,000 472,500
Retail -- 1.35%
Cash America International, Inc. .................... 15,000 194,062
Steel -- 0.28%
Envirosource, Inc. (a) .............................. 13,300 39,900
Telecommunications -- 3.43%
Allen Telecom, Inc. (a) ............................. 20,000 368,750
Wireless Telecom Group, Inc. ........................ 20,000 123,750
----------
492,500
----------
Total Common Stocks
(cost $11,874,817) ............................ 13,310,263
----------
See notes to the financial statements.
<PAGE>
JNL/EAGLE SMALLCAP EQUITY SERIES
SCHEDULE OF INVESTMENTS (continued)
Principal Market
Amount Value
--------- ------
Short Term Investments -- 7.24%
- -------------------------------
Money Market Funds -- 7.24%
State Street Global Advisor
Fund, 5.42% (b).................................. $519,323 $519,323
State Street Global Advisor
Government Fund, 5.30% (b)....................... 519,323 519,323
----------
Total Short Term Investments
(cost $1,038,646)............................ 1,038,646
----------
Total Investments -- 100%
(cost $12,913,464) .................................. $14,348,909
==========
- --------------------------------------------------------------------------------
(a) Non-income producing security.
(b) Dividend yields change daily to reflect current market conditions. Rate
stated is the quoted yield as of December 31, 1997.
See notes to the financial statements.
<PAGE>
JNL/PUTNAM GROWTH SERIES
SCHEDULE OF INVESTMENTS
December 31, 1997
Market
Shares Value
------ ------
Common Stocks -- 95.45%
- -----------------------
Apparel & Textiles -- 1.05%
Liz Claiborne, Inc. ........................... 12,700 $531,019
Jones Apparel Group, Inc. (a) ................. 8,400 361,200
----------
892,219
Banks -- 6.64%
BankAmerica Corp. ............................. 27,100 1,978,300
Comerica, Inc. ................................ 9,100 821,275
Fifth Third Bancorp ........................... 3,100 253,425
First Chicago NBD Corp. ....................... 14,600 1,219,100
MBNA Corp. .................................... 44,500 1,215,406
Southtrust Corp. .............................. 200 12,688
SunTrust Banks, Inc. .......................... 1,800 128,475
----------
5,628,669
Building & Construction -- 0.89%
Masco Corp. ................................... 14,900 758,038
Business Services -- 2.89%
Cendant Corp. (a) ............................. 25,100 862,813
Interpublic Group Companies, Inc. ............. 15,100 752,169
Pitney Bowes, Inc. ............................ 5,000 449,688
Quintiles Transnational Corp. (a) ............. 10,000 382,500
----------
2,447,170
Computers & Business
Equipment--3.06%
Cisco Systems, Inc. (a) ....................... 4,350 242,512
Compaq Computer Corp. ......................... 16,100 908,644
Dell Computer Corp. (a) ....................... 7,600 638,400
EMC Corp. (a) ................................. 29,200 801,175
----------
2,590,731
Conglomerates -- 2.53%
CBS Corp. ..................................... 36,800 1,083,300
Textron, Inc. ................................. 16,900 1,056,250
----------
2,139,550
Consumer Products -- 2.54%
Estee Lauder Companies, Inc. .................. 7,300 375,494
Proctor & Gamble Co. .......................... 22,300 1,779,819
----------
2,155,313
Drugs & Health Care --12.54%
Bristol Myers Squibb Co. ...................... 19,600 1,854,650
Cardinal Health, Inc. ......................... 8,500 638,563
Eli Lilly & Co. ............................... 12,700 884,238
Healthsouth Corp. (a) ......................... 35,600 987,900
Merck & Co., Inc. ............................. 13,200 1,402,500
Pfizer, Inc. .................................. 24,500 1,826,781
Schering Plough Corp. ......................... 20,700 1,285,988
Warner Lambert Co. ............................ 14,100 1,748,400
----------
10,629,020
Market
Shares Value
------ ------
Common Stocks (continued)
- -------------------------
Electronics -- 4.16%
General Electric Co. .......................... 37,900 $
2,780,912
Texas Instruments, Inc. ....................... 16,600 747,000
----------
3,527,912
Financial Services -- 6.76%
American Express Co. .......................... 22,000 1,963,500
Associates First Capital Corp. ................ 3,700 263,162
Franklin Resources, Inc. ...................... 8,400 730,275
Morgan Stanley, Dean Witter,
Discover & Co. ............................. 14,400 851,400
Travelers Group, Inc. ......................... 35,650 1,920,644
----------
5,728,981
Food & Beverages -- 3.57%
Campbell Soup Co. ............................. 11,300 656,812
Coca-Cola Co. ................................. 30,500 1,084,656
ConAgra, Inc. ................................. 17,500 574,219
Sara Lee Corp. ................................ 12,600 709,537
----------
3,025,224
Hotels & Restaurants -- 1.80%
Marriott International, Inc. .................. 16,700 1,156,475
Starwood Lodging Trust ........................ 6,300 364,613
----------
1,521,088
Household Products -- 2.59%
Clorox Co. .................................... 13,800 1,091,062
Colgate Palmolive Co. ......................... 15,000 1,102,500
----------
2,193,562
Industrial Machinery -- 3.05%
Ingersoll Rand Co. ............................ 18,700 757,350
Tyco International, Ltd. ...................... 40,600 1,829,537
----------
2,586,887
Insurance -- 2.62%
American International Group, ................. 11,600 1,261,500
Inc ...........................................
Conseco, Inc. ................................. 21,100 958,731
----------
2,220,231
Leisure Time -- 1.07%
Carnival Corp. ................................ 16,300 902,611
Newspapers -- 2.33%
Gannett Co. , Inc. ............................ 31,900 1,971,819
Oil -- 2.36%
Exxon Corp. ................................... 22,400 1,370,600
Mobil Corp. ................................... 8,700 628,031
----------
1,998,631
See notes to the financial statements.
<PAGE>
JNL/PUTNAM GROWTH SERIES
SCHEDULE OF INVESTMENTS (continued)
Market
Shares Value
------ ------
Common Stocks (continued)
- -------------------------
Petroleum Services -- 3.60%
Halliburton Co. ............................... 28,800 $1,495,800
Schlumberger Ltd. ............................. 19,300 1,553,650
----------
3,049,450
Retail -- 11.92%
CompUSA, Inc. (a) ............................. 15,300 474,300
Consolidated Stores Corp. (a) ................. 17,900 786,481
Costco Cos., Inc. (a) ......................... 26,500 1,182,563
CVS Corp. ..................................... 30,500 1,953,906
Dayton Hudson Corp. ........................... 15,000 1,012,500
Home Depot, Inc. .............................. 10,300 606,412
Safeway, Inc. (a) ............................. 8,900 562,925
TJX Cos., Inc. ................................ 27,200 935,000
Walgreen Co. .................................. 28,500 894,188
Wal-Mart Stores, Inc. ......................... 43,000 1,695,813
----------
10,104,088
Savings & Loan -- 1.60%
Washington Mutual, Inc. ....................... 21,200 1,352,825
Software -- 9.04%
BMC Software, Inc. (a) ........................ 15,200 997,500
Computer Associates International, Inc......... 22,500 1,189,687
Compuware Corp. (a) ........................... 17,400 556,800
HBO & Co. ..................................... 24,900 1,195,200
Microsoft Corp. (a) ........................... 16,000 2,068,000
Parametric Technology Corp. (a) ............... 12,000 568,500
Peoplesoft, Inc. (a) .......................... 27,800 1,084,200
----------
7,659,887
Telecommunications -- 5.93%
Ericsson LM Tel Co. ........................... 11,200 417,900
Lucent Technologies, Inc. ..................... 10,800 862,650
SBC Communications, Inc. ...................... 10,500 769,125
Sprint Corp. .................................. 27,000 1,582,875
Tele Communications, Inc. (a) ................. 23,000 651,188
Tellabs, Inc. (a) ............................. 14,100 745,538
----------
5,029,276
Market
Shares Value
Common Stocks (continued)
Waste Management -- 0.91%
USA Waste Services, Inc. (a) ................. 19,600 $769,300
--------
Total Common Stocks
(cost $70,309,266) ...................... 80,882,482
----------
Principal
Amount
---------
Short Term Investments -- 4.55%
Money Market Funds -- 0.00%
State Street Global Advisor
Fund, 5.42%, (b) ........................... $184 184
Repurchase Agreements -- 4.55%
Repurchase Agreement with United
Bank of Switzerland, 6.25%
(Collateralized by $2,452,000
U.S. Treasury Bond, 11.25%,
due 02/15/2015, market value,
$3,941,083) acquired on
12/31/1997,
due 01/02/1998 .............................. 3,857,000 3,857,000
----------
Total Short Term Investments
(cost $3,857,184) ....................... 3,857,184
----------
Total Investments -- 100%
(cost $74,166,450) ............................ $84,739,666
===========
- --------------------------------------------------------------------------------
(a) Non-income producing security.
(b) Dividend yields change daily to reflect current market conditions. Rate
stated is the quoted yield as of December 31, 1997.
See notes to the financial statements.
<PAGE>
JNL/PUTNAM VALUE EQUITY SERIES
SCHEDULE OF INVESTMENTS
December 31, 1997
Market
Shares Value
------ ------
Common Stocks -- 93.21%
- -----------------------
Aerospace -- 3.11%
Boeing Co. .................................... 24,740 $1,210,714
Northrop Grumman Corp. ........................ 7,520 864,800
Raytheon Co. (a) .............................. 8,342 411,381
TRW, Inc. ..................................... 17,060 910,578
----------
3,397,473
Agricultural Machinery -- 0.66%
Deere & Co. ................................... 12,380 721,909
Airlines -- 0.88%
Delta Air Lines, Inc. ......................... 8,070 960,330
Automobile & Parts -- 3.43%
Chrysler Corp. ................................ 14,855 522,710
Dana Corp. .................................... 25,800 1,225,500
Eaton Corp. ................................... 8,620 769,335
Tenneco, Inc. ................................. 31,175 1,231,413
----------
3,748,958
Banks -- 10.02%
Banc One Corp. ................................ 17,395 944,766
BankBoston Corp. .............................. 6,100 573,019
Bankers Trust NY Corp. ........................ 9,445 1,061,972
Crestar Financial Corp. ....................... 600 34,227
First Chicago NBD Corp. ....................... 10,800 901,800
First Tennessee National Corp. ................ 5,100 340,425
JP Morgan & Co., Inc. ......................... 9,440 1,065,540
Mercantile Bancorporation, Inc. ............... 9,050 556,575
National City Corp. ........................... 7,985 525,014
PNC Bank Corp. ................................ 41,460 2,365,811
Summit Bancorp ................................ 10,300 548,475
SunTrust Banks, Inc. .......................... 6,280 448,235
Union Planters Corp. .......................... 9,755 662,730
Wells Fargo & Co. ............................. 2,700 916,481
----------
10,945,070
Building & Construction -- 0.58%
Masco Corp. ................................... 12,490 635,429
Business Services -- 1.56%
NCR Corp. (a) ................................. 22,330 621,053
Pitney Bowes, Inc. ............................ 12,055 1,084,197
----------
1,705,250
Chemicals -- 2.46%
DuPont E I DeNemours & Co. .................... 15,830 950,789
Eastman Chemical Co. .......................... 15,400 917,262
Witco Corp. ................................... 20,140 821,964
----------
2,690,015
Computers & Business
Equipment -- 7.29%
Hewlett Packard Co. ........................... 28,555 1,784,687
Intel Corp. ................................... 22,560 1,584,840
Market
Shares Value
------ ------
Common Stocks (continued)
- -------------------------
Computers & Business
Equipment (continued)
International Business Machines Corp........... 17,235 $1,802,135
Seagate Technology, Inc. (a) .................. 23,565 453,626
Xerox Corp. ................................... 31,585 2,331,368
----------
7,956,656
Construction Machinery -- 0.77%
Caterpillar, Inc. ............................. 17,400 844,987
Containers & Glass -- 1.72%
Owens Illinois, Inc. (a) ...................... 40,790 1,547,471
Temple Inland, Inc. ........................... 6,235 326,168
----------
1,873,639
Drugs & Health Care -- 9.47%
American Home Products Corp. .................. 19,270 1,474,155
Baxter International, Inc. .................... 28,680 1,446,547
Bristol Myers Squibb Co. ...................... 16,900 1,599,162
Glaxo Wellcome PLC ............................ 11,445 547,929
Johnson & Johnson Co. ......................... 19,150 1,261,506
Merck & Co., Inc. ............................. 17,575 1,867,344
Pharmacia & Upjohn, Inc. ...................... 58,410 2,139,266
----------
10,335,909
Electrical Equipment -- 0.84%
Cooper Industries, Inc. ....................... 18,700 916,300
Electronics -- 2.63%
Emerson Electric Co. .......................... 18,305 1,033,088
General Motors Corp. Class H .................. 14,100 520,819
Texas Instruments, Inc. ....................... 29,260 1,316,700
----------
2,870,607
Financial Services -- 0.98%
Beneficial Corp. .............................. 7,330 609,306
Regions Financial Corp. ....................... 11,000 464,062
----------
1,073,368
Food & Beverages -- 6.55%
General Mills, Inc. ........................... 20,100 1,439,663
H. J. Heinz Co. ............................... 20,990 1,066,554
PepsiCo, Inc. ................................. 27,965 1,018,975
Quaker Oats Co. ............................... 22,090 1,165,247
Ralston Purina Co. (a) ........................ 7,265 675,191
Sara Lee Corp. ................................ 17,330 975,896
Whitman Corp. ................................. 30,950 806,634
----------
7,148,160
Gas Exploration -- 0.80%
Occidental Petroleum Corp. .................... 29,850 874,978
See notes to the financial statements.
<PAGE>
JNL/PUTNAM VALUE EQUITY SERIES
SCHEDULE OF INVESTMENTS (continued)
Market
Shares Value
------ ------
Common Stocks (continued)
- -------------------------
Gas & Pipeline Utilities-- 1.10%
Coastal Corp. ................................. 13,725 $850,092
Enron Corp. ................................... 8,500 353,281
----------
1,203,373
Hotels & Restaurants -- 0.77%
ITT Corp. ..................................... 10,100 837,038
Household Products -- 0.69%
Clorox Co. .................................... 7,990 631,709
Colgate Palmolive Co. ......................... 1,600 117,600
----------
749,309
Insurance -- 3.36%
American General Corp. ........................ 21,600 1,167,750
Aon Corp. ..................................... 19,055 1,117,099
CIGNA Corp. ................................... 5,530 957,036
USF&G Corp. ................................... 19,200 423,600
----------
3,665,485
Oil -- 6.76%
Amoco Corp. ................................... 13,700 1,166,213
Atlantic Richfield Co. ........................ 13,620 1,091,303
British Petroleum Co. PLC ADR ................. 11,946 951,947
Exxon Corp. ................................... 16,380 1,002,251
Kerr McGee Corp. .............................. 8,850 560,316
Mobil Corp. ................................... 14,300 1,032,281
Tosco Corp. ................................... 28,800 1,089,000
YPF Sociedad Anonima ADR ...................... 14,200 485,463
----------
7,378,774
Paper -- 3.69%
Boise Cascade Corp. ........................... 26,780 810,095
Kimberly Clark Corp. .......................... 32,690 1,612,026
Minnesota Mining & Manufacturing Co ........... 11,505 944,129
Williamette Industries, Inc. .................. 20,690 665,959
----------
4,032,209
Petroleum Services -- 1.40%
Elf Aquitane .................................. 26,100 1,530,113
Photography -- 2.19%
Eastman Kodak Co. ............................. 20,960 1,274,630
Polaroid Corp. ................................ 23,040 1,121,760
----------
2,396,390
Pollution Control -- 0.91%
Browning-Ferris Industries, Inc. .............. 26,970 997,890
Publishing -- 1.12%
McGraw Hill Cos., Inc. ........................ 11,425 845,450
Times Mirror Co. Class A ...................... 6,100 375,150
----------
1,220,600
Market
Shares Value
------ ------
Common Stocks (continued)
- -------------------------
Railroads & Equipment -- 1.66%
Canadian National Railway Co. ................. 11,500 $543,375
Union Pacific Corp. ........................... 20,345 1,270,291
----------
1,813,666
Retail -- 2.94%
Kmart Corp. (a) ............................... 79,600 920,375
Lowes Cos., Inc. .............................. 21,825 1,040,780
J.C. Penney, Inc. ............................. 700 42,219
Toys R Us, Inc. (a) ........................... 38,295 1,203,899
----------
3,207,273
Savings & Loan -- 0.99%
H.F. Ahmanson & Co. .......................... 8,800 589,050
Washington Mutual, Inc. ....................... 7,675 489,761
----------
1,078,811
Software -- 1.42%
Computer Associates International, Inc......... 29,350 1,551,881
Telecommunications -- 6.80%
AT&T Corp. .................................... 16,655 1,020,119
Bell Atlantic Corp. ........................... 13,130 1,194,830
Bellsouth Corp. ............................... 22,710 1,278,857
SBC Communications, Inc. ...................... 17,500 1,281,875
Sprint Corp. .................................. 26,575 1,557,959
US West, Inc. ................................. 24,250 1,094,281
----------
7,427,921
Tires & Rubber -- 1.29%
Goodyear Tire & Rubber Co. .................... 22,085 1,405,158
Tobacco -- 2.05%
Philip Morris Cos., Inc. ...................... 31,400 1,422,813
RJR Nabisco Holdings Corp. .................... 21,720 814,500
----------
2,237,313
Transportation -- 0.32%
Norfolk Southern Corp. ........................ 300 9,244
Ryder Systems, Inc. ........................... 10,500 343,875
----------
353,119
----------
Total Common Stocks
(cost $96,068,070) ........................ 101,785,361
----------
Principal
Amount
---------
Short Term Investments -- 6.79%
- -------------------------------
Money Market Fund -- 0.00%
State Street Global Advisor Fund,
5.42%, (b)................................... $637 637
See notes to the financial statements.
<PAGE>
JNL/PUTNAM VALUE EQUITY SERIES
SCHEDULE OF INVESTMENTS (continued)
Principal Market
Amount Value
--------- ------
Short Term Investments (continued)
- ----------------------------------
Repurchase Agreement -- 4.97%
Repurchase agreement with United
Bank of Switzerland, 6.25%
(Collateralized by $3,445,000
U.S. Treasury Bond, 11.25%,
due 02/15/2015, market value
$5,537,072) acquired on
12/31/97,
due 01/02/1998............................... $5,420,000 $5,420,000
U.S. Government Securities -- 1.82%
Federal Home Loan Mortgage Corp.
Discount Note 5.75%, 01/26/1998.............. 2,000,000 1,992,014
----------
Total Short Term Investments
(cost $7,412,651) ......................... 7,412,651
----------
Total Investments -- 100%
(cost $103,480,721)............................ $109,198,012
============
- --------------------------------------------------------------------------------
(a) Non-income producing security.
(b) Dividend yields change daily to reflect current market conditions. Rate
stated is the quoted yield as of December 31, 1997.
<PAGE>
PPM AMERICA/JNL BALANCED SERIES
SCHEDULE OF INVESTMENTS
December 31, 1997
Market
Shares Value
------ ------
Common Stocks --50.61%
- ----------------------
Aerospace -- 2.73%
Lockheed Martin Corp. ......................... 6,200 $610,700
Raytheon Co. (a) .............................. 1 27
TRW, Inc. ..................................... 10,200 544,425
United Technologies Corp. ..................... 6,300 458,719
-----------
1,613,871
Apparel & Textiles -- 1.28%
Liz Claiborne, Inc. ........................... 7,000 292,688
VF Corp. ...................................... 10,100 463,969
-----------
756,657
Automobiles & Parts -- 2.07%
Ford Motor Company ............................ 12,900 628,069
General Motors Corp. .......................... 9,800 594,125
-----------
1,222,194
Banks -- 3.87%
BankAmerica Corp. ............................. 3,000 219,000
Charter One Financial, Inc. ................... 7,800 492,375
Chase Manhattan Corp. ......................... 6,100 667,950
KeyCorp ....................................... 8,200 580,663
Mellon Bank Corp. ............................. 5,400 327,375
-----------
2,287,363
Chemicals -- 2.80%
Dow Chemical Co. .............................. 4,500 456,750
PPG Industries, Inc. .......................... 10,000 571,250
Rohm & Haas Co. ............................... 6,500 622,375
-----------
1,650,375
Computers & Business
Equipment -- 2.23%
International Business Machines Corp........... 6,600 690,112
Xerox Corp. ................................... 8,500 627,406
-----------
1,317,518
Conglomerates -- 0.80%
ITT Industries, Inc. .......................... 15,000 470,625
Drugs & Health Care -- 1.92%
Columbia/HCA Healthcare Corp. ................. 20,500 607,312
Wellpoint Health Networks, Inc. (a) ........... 12,500 528,125
-----------
1,135,437
Electric Utilities -- 3.06%
First Energy Corp. ............................ 22,700 658,300
GPU, Inc. ..................................... 14,000 589,750
Peco Energy Co. ............................... 23,100 560,175
-----------
1,808,225
Electrical Equipment -- 0.76%
Cooper Industries, Inc. ....................... 9,200 450,800
Market
Shares Value
------ ------
Common Stocks (continued)
- -------------------------
Electronics -- 1.04%
Harris Corp. .................................. 13,400 $614,725
Financial Services -- 1.64%
American Financial Group, Inc. ................ 8,900 358,781
Beneficial Corp. .............................. 7,300 606,812
-----------
965,593
Gas Exploration -- 1.13%
Occidental Petroleum Corp. .................... 22,800 668,325
Household Appliances &
Furnishings -- 0.81%
Maytag Corp. .................................. 12,800 477,600
Industrial Machinery -- 0.75%
Parker Hannifin Corp. ......................... 9,600 440,400
Insurance -- 4.76%
Aetna, Inc. ................................... 8,700 613,894
American General Corp. ........................ 11,000 594,687
CIGNA Corp. ................................... 3,400 588,412
Hartford Financial Services Group, Inc. ....... 6,600 617,513
TransAmerica Corp. ............................ 3,700 394,050
-----------
2,808,556
Liquor -- 0.86%
Anheuser Busch Cos., Inc. ..................... 11,600 510,400
Mining -- 1.02%
Phelps Dodge Corp. ............................ 9,700 603,825
Oil & Gas -- 2.82%
Ashland, Inc. ................................. 9,800 526,137
Chevron Corp. ................................. 7,400 569,800
Phillips Petroleum Co. ........................ 11,700 568,913
-----------
1,664,850
Paper -- 0.74%
Mead Corp. .................................... 15,600 436,800
Photography -- 0.70%
Polaroid Corp. ................................ 8,500 413,844
Retail -- 1.76%
Federated Department Stores, Inc. (a) ......... 10,800 465,075
Kmart Corp. (a) ............................... 49,400 571,188
-----------
1,036,263
Steel -- 0.74%
Nucor Corp. ................................... 9,100 439,644
Telecommunications -- 5.61%
AT&T Corp. .................................... 11,000 673,750
GTE Corp. ..................................... 11,500 600,875
See notes to the financial statements.
<PAGE>
PPM AMERICA/JNL BALANCED SERIES
SCHEDULE OF INVESTMENTS (continued)
Market
Shares Value
------ ------
Common Stocks (continued)
- -------------------------
Telecommunications (continued)
SBC Communications, Inc. ...................... 8,600 $629,950
Sprint Corp. .................................. 12,000 703,500
U S West Communications Inc. (a) .............. 15,600 703,950
-----------
3,312,025
Tobacco -- 2.05%
Philip Morris Cos. Inc. ....................... 13,000 589,063
RJR Nabisco Holdings Corp. .................... 16,500 618,750
-----------
1,207,813
Toys -- 0.84%
Hasbro, Inc. .................................. 15,800 497,700
Transportation -- 1.82%
Burlington Northern Santa Fe .................. 5,400 501,862
Railroad
CSX Corp. ..................................... 10,600 572,400
-----------
1,074,262
-----------
Total Common Stocks
(cost $26,840,717) ........................ 29,885,690
-----------
Principal
Amount
---------
Corporate Bonds -- 14.86%
- -------------------------
Aerospace -- 0.52%
K & F Industries, Inc., (144a)
9.25%, 10/15/2007............................ $300,000 307,500
Banks -- 0.57%
First Nationwide Holdings, Inc., (144a)
10.625%, 10/01/2003 ......................... 300,000 335,250
Broadcasting -- 0.60%
Capstar Broadcasting Partners, Inc.
(step-up bond),
12.75%, 02/01/2009 (d) ...................... 500,000 355,000
Building & Construction -- 0.52%
D. R. Horton, Inc. ............................
8.375%, 06/15/2004 .......................... 300,000 305,400
Chemicals -- 1.53%
LaRoche Industries, Inc., (144a)
9.50%, 09/15/2007 ........................... 300,000 298,500
PCI Chemicals Canada, Inc., (144a)
9.25%, 10/15/2007 ........................... 300,000 299,250
Pharmaceutical Fine Chemicals, (144a)
9.75%, 11/15/2007 ........................... 300,000 304,500
-----------
902,250
Consumer Products -- 0.47%
Revlon Worldwide Corp. (144a), Zero
Coupon, 03/15/2001 .......................... 400,000 279,000
Principal Market
Amount Value
--------- ------
Corporate Bonds (continued)
- ---------------------------
Conglomerates --1.58%
Burke Industries, Inc., (144a)
10.00%, 08/15/2007 .......................... 300,000 $308,250
Knology Holdings, Inc., (144a),
(step-up bond),
11.875%, 10/15/2007 (d) ..................... 600,000 328,500
National Equipment Services, Inc. .............
10.00%, 11/30/2004 .......................... 300,000 297,000
-----------
933,750
Containers & Glass -- 1.05%
Riverwood International Corp., (144a)
10.625%, 08/01/2007 ......................... 300,000 303,940
U.S. Can Corp. Series B, (144a)
8.125%, 10/15/2006 .......................... 300,000 317,250
-----------
621,190
Defense -- 0.56%
Alliant Techsystems, Inc., (144a)
11.75%, 03/01/2003 .......................... 300,000 328,500
Electronics -- 0.51%
Wyman-Gordon Co. ..............................
8.00%, 12/15/2007 ........................... 300,000 303,000
Gaming -- 1.10%
Horseshoe Gaming, Inc., Series B
12.75%, 09/30/2000 .......................... 300,000 333,000
Rio Hotel & Casino, Inc., (144a)
9.50%, 04/15/2007 ........................... 300,000 318,000
---------- -----------
651,000
Media & Cable -- 1.60%
Century Communications Corp.
9.50%, 08/15/2000 ........................... 250,000 261,250
Frontiervision Holdings, LP, (144a)
(step-up bond)
11.875%, 09/15/2007 (d) .................. 500,000 366,250
Rogers Cantel, Inc.
9.375%, 06/01/2008 .......................... 300,000 316,500
-----------
944,000
Paper -- 0.03%
Buckeye Technologies, Inc.
9.25%, 09/15/2008 ........................... 15,000 15,787
Petroleum Services -- 1.50%
DI Industries, Inc.
8.875%, 07/01/2007 .......................... 300,000 307,966
Pogo Producing Co., Series B (144a)
8.75%, 05/15/2007 ........................... 250,000 256,250
Pride Petroleum Services, Inc.
9.375%, 05/01/2007 .......................... 300,000 322,500
-----------
886,716
See notes to the financial statements.
<PAGE>
PPM AMERICA/JNL BALANCED SERIES
SCHEDULE OF INVESTMENTS (continued)
Principal Market
Amount Value
--------- ------
Corporate Bonds (continued)
- ---------------------------
Pollution Control -- 0.59%
Allied Waste Industries, Inc.
(step-up bond),
11.30%, 06/01/2007 (d)..................... $500,000 $351,250
Retail -- 0.52%
Specialty Retailers, Inc.,
Series B, (144a)
8.50%, 07/15/2005 ........................... 300,000 304,500
Steel -- 0.50%
Armco, Inc., (144a)
9.00%, 09/15/2007 ........................... 300,000 294,000
Telecommunications -- 0.58%
Metronet Communications Corp.,
12.00%, 08/15/2007 .......................... 300,000 345,000
Transportation -- 0.53%
Continental Airlines, Inc., (144a)
9.50%, 12/15/2001 ........................... 300,000 315,000
-----------
Total Corporate Bonds
(cost $8,572,904) ......................... 8,778,093
-----------
U.S. Government Securities -- 32.93%
- ------------------------------------
U.S. Governmental Agencies -- 11.85%
Federal Home Loan Mortgage Corp. ..............
6.50%, 05/01/2001 ........................... 704,707 708,892
6.75%, 06/15/2004 ........................... 596,854 606,179
8.00%, 09/01/2011 ........................... 1,085,954 1,120,566
6.50%, 04/01/2012 ........................... 727,046 728,180
7.50%, 03/01/2027 ........................... 738,874 756,652
6.50%, 12/01/2027 ........................... 500,000 494,215
Federal National Mortgage
Association
7.50%, 04/01/2012 ........................... 730,730 749,678
Government National
Mortgage Association
6.50%, 12/15/2023 ........................... 251,120 249,159
6.50%, 04/15/2026 ........................... 1,086,048 1,074,839
7.50%, 07/15/2027 ........................... 498,182 510,325
-----------
6,998,685
U.S. Treasury Bonds -- 4.89%
6.04%, 05/15/2016, principal only (c)........ 600,000 200,774
6.07%, 11/15/2016, principal only (c)........ 2,250,000 728,122
6.08%, 11/15/2017, principal only (c)........ 800,000 242,688
6.25%, 08/15/2023 ........................... 1,200,000 1,236,000
Principal Market
Amount Value
--------- ------
U.S. Government Securities (continued)
- --------------------------------------
U.S. Treasury Bonds (continued)
6.04%, 11/15/2024, principal only (c) ....... $1,300,000 $261,417
6.625%, 02/15/2027 .......................... 200,000 217,124
-----------
2,886,125
U.S. Treasury Notes -- 16.19%
5.00%, 01/31/1998 ........................... 600,000 599,622
5.875%, 08/15/1998 .......................... 400,000 400,564
6.375%, 01/15/1999 .......................... 2,750,000 2,771,065
6.875%, 07/31/1999 .......................... 1,700,000 1,730,277
6.25%, 08/31/2000 ........................... 1,400,000 1,418,816
6.25%, 10/31/2001 ........................... 600,000 610,218
6.25%, 02/15/2003 ........................... 1,300,000 1,329,458
5.875%, 11/15/2005 .......................... 700,000 703,717
-----------
9,563,737
-----------
Total U.S. Government Securities
(cost $19,105,860) ...................... 19,448,547
-----------
Mortgage Backed Securities -- 0.80%
- -----------------------------------
Prudential Home Loan Mortgage
Securities Co., Series 1993-44,
Class A5
6.00%, 11/25/2023 ........................... 700,000 470,654
-----------
Total Mortgage Backed Securities
(cost $458,089) ......................... 470,654
-----------
Short Term Investments -- 0.80%
- -------------------------------
Commercial Paper -- 0.76%
American Express Credit Corp.
6.65%, 01/02/1998 ........................... 450,000 449,917
Money Market Fund -- 0.04%
State Street Global Advisor Fund,
5.42% (b) ................................... 20,443 20,443
-----------
Total Short Term Investments
(cost $470,360) ......................... 470,360
-----------
Total Investments -- 100%
- -------------------------
(cost $55,447,930) ............................ $59,053,344
===========
- --------------------------------------------------------------------------------
(a) Non-income producing security.
(b) Dividend yields change daily to reflect current market conditions. Rate
stated is the quoted yield as of December 31, 1997.
(c) The interest rate disclosed for principal only strip represents effective
yield at December 31, 1997, based upon estimated future cash flows.
(d) Denotes deferred interest security that receives no current coupon payments
until a predetermined date at which time the stated coupon rate becomes
effective.
See notes to the financial statements
<PAGE>
PPM AMERICA/JNL HIGH YIELD BOND SERIES
SCHEDULE OF INVESTMENTS
December 31, 1997
Principal Market
Amount Value
--------- ------
Corporate Bonds -- 96.69%
Aerospace -- 1.84%
K & F Industries, Inc., (144a)
9.25%, 10/15/2007...........$ ............ $
1,100,000 1,127,500
Agricultural Machinery -- 1.25%
AGCO Corp. (144a), 8.50%, ..................... 750,000 766,875
03/15/2006
Apparel & Textiles -- 2.31%
Pillowtex Corp., 10.00%, ...................... 1,330,000 1,416,450
11/15/2006
Banks -- 2.37%
First Nationwide Holdings, Inc. ...............
(144a) ........................................ 1,300,000 1,452,750
10.625%, 10/01/2003
Broadcasting -- 2.83%
Capstar Broadcasting Partners,
Inc.,
(step-up bond), 12.75%,
02/01/2009 (a) ........................ 1,000,000 710,000
Jacor Communications Co.,
8.75%, 06/15/2007 ........................ 1,000,000 1,025,000
-----------
1,735,000
Building & Construction -- 2.99%
D.R. Horton, Inc., 8.375%, .................... 1,000,000 1,017,999
06/15/2004
Nortek, Inc., 9.125%, 09/01/2007 ............. 500,000 503,750
Toll Corp., 8.75%, 11/15/2006 ................. 300,000 313,500
-----------
1,835,249
Chemicals -- 8.52%
Freedom Chemical Co.,
10.625%, 10/15/2006 ...................... 500,000 550,000
Key Plastics, Inc. (144a),
10.25%, ....................................... 1,000,000 1,060,000
03/15/2007
Laroche Industries, Inc.,
(144a), 9.50%, ................................ 1,000,000 995,000
09/15/2007
PCI Chemicals Canada, Inc. ,
(144a) ........................................ 1,300,000 1,296,750
9.25%, 10/15/2007
Pharmaceutical Fine Chemicals,
(144a) ........................................ 1,300,000 1,319,500
9.75%, 11/15/2007
-----------
5,221,250
Communications -- 12.11%
Communications Instruments, Inc.,
10.00%, 09/15/2004 ....................... 1,000,000 1,020,000
Gray Communications,
10.625%, 10/01/2006 ...................... 1,100,000 1,188,000
Highwaymaster Communications,
13.75%, 09/15/2005 ....................... 1,000,000 1,022,500
Intermedia Communications, Inc.,
8.875%, 11/01/2007 ....................... 1,000,000 1,027,500
8.50%, 01/15/2008 ........................ 400,000 400,000
Metronet Communications Corp.,
12.00%, 08/15/2007 ....................... 1,300,000 1,495,000
Rogers Cantel Mobile, Inc.,
9.375%, 06/01/2008 ....................... 1,000,000 1,055,000
9.75%, 06/01/2016 ........................ 200,000 214,000
-----------
7,422,000
Principal Market
Amount Value
--------- ------
Corporate Bonds (continued)
- ---------------------------
Conglomerates -- 3.64%
Burke Industries, Inc., (144a),
10.00%, 08/15/2007............................. $1,000,000 $1,027,500
Knology Holdings, Inc., (144a)
(step-up bond)
11.875%, 10/15/2007 (a)................ 2,200,000 1,204,500
-----------
2,232,000
Consumer Products -- 2.39%
Revlon Worldwide Corp. (144a),
Zero Coupon, 03/15/2001 ....................... 1,800,000 1,255,500
Simmons Co., 10.75%,04/15/2006 ............... 200,000 210,500
-----------
1,466,000
Defense -- 1.79%
Alliant Techsystems, Inc., (144a)
11.75%, 03/01/2003 ......................... 1,000,000 1,095,000
Drugs & Health Care -- 1.74%
Leiner Health Products (144a)
9.625%, 07/01/2007 ....................... 1,000,000 1,065,000
Electronics -- 2.80%
Tracor, Inc. (144a), 8.50%, 03/01/2007......... 700,000 707,000
Wyman-Gordon Co.,
8.00%, 12/15/2007 ........................ 1,000,000 1,010,000
-----------
1,717,000
Food & Beverages -- 1.44%
International Home Foods, Inc.,
10.375%, 11/01/2006 ...................... 700,000 770,000
Keebler Corp., 10.75%, 07/01/2006 ............. 100,000 112,750
-----------
882,750
Gaming -- 3.55%
Harvey's Casino Resorts,
10.625%, 06/01/2006 ...................... 200,000 217,000
Horseshoe Gaming, Inc., Series B,
12.75%, 09/30/2000........................ 800,000 888,000
Rio Hotel & Casino, Inc. (144a)
10.625%, 07/15/2005 ...................... 600,000 649,500
9.50%, 04/15/2007 ........................ 400,000 424,000
-----------
2,178,500
Hotels & Restaurants -- 2.15%
Sun International Hotels, Ltd.,
8.625%, 12/15/2007 ....................... 1,300,000 1,319,500
Industrial Machinery -- 2.27%
Day International Group, Inc.,
Series B, 11.125%, 06/01/2005.................. 100,000 108,000
National Equipment Services, Inc.,
10.00%, 11/30/2004........................ 1,300,000 1,287,000
-----------
1,395,000
Leisure Time -- 1.73%
Hollywood Theaters, Inc.,
10.625%, 08/01/2007 ...................... 1,000,000 1,062,500
See notes to the financial statements.
<PAGE>
PPM AMERICA/JNL HIGH YIELD BOND SERIES
SCHEDULE OF INVESTMENTS (continued)
Principal Market
Amount Value
--------- ------
Corporate Bonds (continued)
- ---------------------------
Media & Cable -- 6.97%
Century Communications Corp. ..................
9.75%, 02/15/2002...........$ ............ $
400,000 420,000
9.50%, 03/01/2005 ........................ 100,000 106,000
8.875%, 01/15/2007 ....................... 500,000 515,000
Frontiervision, 11.00%,10/15/2006 ............. 400,000 444,000
Frontiervision Holdings, LP,
(144a)
(step-up bond),
11.875%, 09/15/2007 (a).. 1,000,000 ... 732,500
Jones Intercable, Inc., 9.625%,
03/15/2002 ............................... 425,000 455,812
Marcus Cable Co., ............................. 735,000 799,313
11.875%,10/01/2005
Rogers Cablesystems Limited
9.625%, 08/01/2002 ....................... 650,000 690,625
10.00%, 03/15/2005 ....................... 100,000 110,000
-----------
4,273,250
Packaging -- 5.63%
Huntsman Packaging Corp.,
8.625%, 10/01/2007 ....................... 1,000,000 1,020,000
Riverwood International Corp.,
10.625%, 8/01/2007 ....................... 1,000,000 1,013,132
Stone Container Corp., 12.25%,
04/01/2002 ............................... 1,400,000 1,417,500
-----------
3,450,632
Petroleum Services -- 12.57%
COHO Energy, Inc., 8.875%,
10/15/2007 ............................... 1,000,000 1,000,000
Cross Timbers Oil Co.,
8.75%, 11/01/2009 ........................ 1,000,000 1,020,000
DI Industries, Inc., 8.875%, .................. 1,000,000 1,026,552
07/01/2007
Newpark Resources, Inc.,
8.625%, 12/15/2007 ....................... 1,000,000 1,015,000
Ocean Energy, Inc. (144a),
8.875%, ....................................... 1,000,000 1,062,500
07/15/2007
Parker Drilling Co., Series B,
9.75%, ........................................ 700,000 750,750
11/15/2006
Pride Petroleum Services, Inc.,
9.375%, 05/01/2007 ....................... 1,000,000 1,075,000
Veritas DGC, Inc., 9.75%, ..................... 700,000 756,000
10/15/2003
-----------
7,705,802
Pollution Control -- 2.09%
Allied Waste Industries, Inc. .................
(step-up bond),
11.30%, 06/01/2007 (a) ................ 1,000,000 702,500
Norcal Waste System, Inc.,
Series B, ..................................... 500,000 580,000
(step-up bond), 13.50%,
11/15/2005
-----------
1,282,500
Printing & Publishing -- 0.86%
Hollinger International
Publishing, Inc., ............................. 500,000 525,000
9.25%, 03/15/2007
Principal Market
Amount Value
--------- ------
Corporate Bonds (continued)
- ---------------------------
Retail -- 4.49%
Finlay Enterprises, Inc.,
(step-up bond), ............................... $ $
12.00%, 05/01/2005 (a) ................... 400,000 394,000
Specialty Retailers, Inc.,
Series B (144a), .............................. 1,300,000 1,319,500
8.50%, 07/15/2005
Stater Brothers Holdings, Inc.,
9.00%, 07/01/2004 ........................ 1,000,000 1,040,000
-----------
2,753,500
Steel -- 4.28%
Armco, Inc., (144a) 9.00%, .................... 1,300,000 1,274,000
09/15/2007
Carpenter W.R. North America
Inc., ......................................... 1,000,000 1,035,000
(144a), 10.625%, 06/15/2007
NS Group, Inc., 13.50%, ....................... 270,000 313,200
07/15/2003
-----------
2,622,200
Tobacco -- 1.22%
Dimon, Inc., 8.875%, 06/01/2006 ............... 700,000 745,255
Transportation -- 0.86%
Continental Airlines, Inc.,
(144a) ........................................ 500,000 525,000
9.50%, 12/15/2001
-----------
Total Corporate Bonds
(cost $57,738,230) .................. 59,273,463
-----------
Shares
Common Stocks -- 0.65%
Chemicals -- 0.11%
General Chemical Group, Inc. .................. 2,500 66,875
Communications -- 0.02%
Highwaymaster Communications,
Inc., (c) .................................. 1,000 12,000
Computer Services -- 0.11%
Bell & Howell Co. (c) ......................... 2,700 65,306
Containers -- 0.10%
U.S. Can Corp. (c) ............................ 3,800 64,125
Paper -- 0.16%
Buckeye Technologies, Inc. (c) ............... 2,100 97,125
Steel -- 0.15%
NS Group, Inc. (c) ............................ 5,264 90,146
-----------
Total Common Stocks
(cost $276,910) ..................... 395,577
-----------
See notes to the financial statements.
<PAGE>
PPM AMERICA/JNL HIGH YIELD BOND SERIES
SCHEDULE OF INVESTMENTS (continued)
Market
Shares Value
------ -----
Preferred Stocks -- 1.11%
Broadcasting -- 1.11%
American Radio Systems Corp. (144a)
(cost $572,315) ............................. 5,689 $682,680
-----------
Warrants & Rights -- 0.01%
Industrial Machinery -- 0.01%
Terex Corp. Rights
(cost $831) ................................. 400 5,800
-----------
Principal Market
Amount Value
--------- ------
Short Term Investments -- 1.54%
- -------------------------------
Commercial Paper -- 1.51%
American Express Credit Corp.,
6.65%, ........................................ $ $
01/02/1998 ................................. 300,000 299,945
Ford Motor Credit Co., 6.14%,
01/02/1998 ................................. 625,000 624,893
-----------
924,838
Money Market Funds -- 0.03%
State Street Global Advisor
Fund, 5.42%, (b) ........................... 20,806 20,806
-----------
Total Short Term Investments
(cost $945,644) ..................... 945,644
-----------
Total Investments -- 100%
(cost $59,533,930) ............................ $61,303,164
===========
- --------------------------------------------------------------------------------
(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, 1997.
(c) Non-income producing security.
<PAGE>
PPM AMERICA/JNL MONEY MARKET SERIES
SCHEDULE OF INVESTMENTS
December 31, 1997
Principal Market
Amount Value
--------- ------
Commercial Paper -- 100%
- ------------------------
Captive Finance -- 19.29%
American Express Credit Corp.
6.65%, 01/02/1998............................ $1,275,000 $1,274,764
5.50%, 01/06/1998 ........................... 75,000 74,943
5.85%, 01/21/1998 ........................... 320,000 318,960
Chrysler Financial Corp.
5.60%, 02/27/1998 ........................... 725,000 718,572
5.70%, 03/06/1998 ........................... 265,000 262,315
Ford Motor Credit Co.
5.63%, 01/06/1998 ........................... 300,000 299,765
5.80%, 01/14/1998 ........................... 340,000 339,288
5.74%, 02/06/1998 ........................... 350,000 347,991
5.71%, 03/26/1998 ........................... 465,000 458,805
General Motors Acceptance Corp.
5.83%, 01/22/1998 ........................... 125,000 124,575
5.54%, 02/02/1998 ........................... 150,000 149,261
5.56%, 02/02/1998 ........................... 300,000 298,517
5.74%, 02/09/1998 ........................... 125,000 124,223
5.62%, 02/17/1998 ........................... 185,000 183,643
5.63%, 03/02/1998 ........................... 200,000 198,123
5.60%, 03/20/1998 ........................... 500,000 493,933
John Deere Capital Corp.
5.56%, 01/12/1998 ........................... 250,000 249,575
5.56%, 01/14/1998 ........................... 407,000 406,183
Sears Roebuck Acceptance Corp.
5.56%, 01/20/1998 ........................... 200,000 199,413
5.73%, 02/10/1998 ........................... 200,000 198,727
5.72%, 02/18/1998 ........................... 250,000 248,093
5.53%, 02/23/1998 ........................... 400,000 396,743
5.62%, 03/02/1998 ........................... 500,000 495,317
5.54%, 03/04/1998 ........................... 205,000 203,044
-----------
8,064,773
Casinos -- 1.61%
Circus Circus Enterprises, Inc.
5.89%, 01/07/1998 ........................... 675,000 674,337
Chemicals -- 3.76% DuPont E I DeNemours & Co.
5.49%, 02/03/1998 ........................... 455,000 452,710
5.80%, 02/03/1998 ........................... 610,000 606,757
5.67%, 03/05/1998 ........................... 221,000 218,807
5.70%, 04/09/1998 ........................... 300,000 295,345
-----------
1,573,619
Computers -- 3.81%
International Business Machines
Credit Corp.
5.79%, 01/12/1998 ........................... 500,000 499,115
5.71%, 01/15/1998 ........................... 505,000 503,879
5.71%, 02/04/1998 ........................... 292,000 290,425
5.73%, 02/13/1998 ........................... 300,000 297,947
-----------
1,591,366
Principal Market
Amount Value
--------- ------
Commercial Paper (continued)
- ----------------------------
Consumer Finance -- 18.23%
American General Financial Corp.
5.54%, 01/12/1998............................ $285,000 $284,518
5.54%, 01/14/1998 ........................... 280,000 279,440
5.70%, 04/09/1998 ........................... 400,000 393,793
Beneficial Corp.
5.70%, 01/21/1998 ........................... 175,000 174,446
5.58%, 02/17/1998 ........................... 135,000 134,017
5.58%, 02/23/1998 ........................... 1,000,000 991,785
5.60%, 03/09/1998 ........................... 200,000 197,916
Heller Financial, Inc.
5.65%, 01/05/1998 ........................... 200,000 199,874
5.56%, 01/08/1998 ........................... 510,000 509,449
5.90%, 01/09/1998 ........................... 390,000 389,489
5.58%, 01/20/1998 ........................... 125,000 124,632
5.73%, 03/09/1998 ........................... 170,000 168,187
5.58%, 03/19/1998 ........................... 400,000 395,226
Household Financial Corp.
5.55%, 01/16/1998 ........................... 1,210,000 1,207,202
5.55%, 01/21/1998 ........................... 100,000 99,692
5.59%, 02/03/1998 ........................... 355,000 353,181
Norwest Financial, Inc.
5.53%, 01/15/1998 ........................... 225,000 224,516
5.53%, 02/06/1998 ........................... 410,000 407,733
5.68%, 02/10/1998 ........................... 470,000 467,034
5.59%, 02/23/1998 ........................... 225,000 223,148
5.67%, 03/17/1998 ........................... 400,000 395,275
-----------
7,620,553
Consumer Products -- 3.86%
Conagra, Inc. .................................
6.15%, 01/05/1998 ........................... 400,000 399,727
6.20%, 01/05/1998 ........................... 102,000 101,930
6.27%, 01/07/1998 ........................... 135,000 134,858
7.25%, 01/07/1998 ........................... 100,000 99,879
Procter & Gamble Co. ..........................
6.50%, 01/06/1998 ........................... 880,000 879,206
-----------
1,615,600
Drugs & Health Care -- 6.35% A H Robins Co., Inc.
5.70%, 03/13/1998 ........................... 850,000 840,445
Allergan, 6.05%, 02/17/1998 ................... 900,000 892,891
Schering Corp.
5.52%, 01/13/1998 ........................... 805,000 803,519
5.67%, 02/04/1998 ........................... 117,000 116,373
-----------
2,653,228
Financial Services -- 5.76%
AC Acquisition Holding Co.
5.70%, 02/18/1998 ........................... 750,000 744,300
See notes to the financial statements.
<PAGE>
PPM AMERICA/JNL MONEY MARKET SERIES
SCHEDULE OF INVESTMENTS (continued)
Principal Market
Amount Value
--------- ------
Commercial Paper (continued)
- ----------------------------
Financial Services (continued)
Merrill Lynch & Co.
5.62%, 01/02/1998............................ $200,000 $199,969
5.74%, 01/05/1998 ........................... 299,000 298,809
5.61%, 01/21/1998 ........................... 280,000 279,127
5.65%, 01/30/1998 ........................... 100,000 99,545
5.58%, 03/17/1998 ........................... 350,000 345,931
5.71%, 04/30/1998 ........................... 250,000 245,281
5.71%, 06/17/1998 ........................... 200,000 194,702
-----------
2,407,664
Food & Beverages -- 1.16% H J Heinz Co.
5.55%, 06/22/1998 ........................... 500,000 486,742
Gas & Pipeline Utilities -- 0.99%
Consolidated Natural Gas Co.
6.20%, 01/07/1998 ........................... 415,000 414,571
Independent Finance -- 11.53%
Associates Corp. of North America
5.75%, 01/22/1998 ........................... 618,000 615,927
5.60%, 01/30/1998 ........................... 500,000 497,744
5.68%, 04/06/1998 ........................... 420,000 413,705
CIT Group Holdings, Inc.
5.59%, 02/20/1998 ........................... 500,000 496,118
5.58%, 03/03/1998 ........................... 700,000 693,381
5.58%, 03/27/1998 ........................... 500,000 493,412
General Electric Capital Corp.
5.59%, 02/17/1998 ........................... 578,000 573,782
5.54%, 03/04/1998 ........................... 300,000 297,138
5.61%, 03/23/1998 ........................... 158,000 156,006
5.65%, 05/19/1998 ........................... 300,000 293,502
5.59%, 08/04/1998 ........................... 300,000 289,985
-----------
4,820,700
Insurance -- 3.67% USAA Capital Corp.
5.52%, 01/05/1998 ........................... 150,000 149,908
5.50%, 01/06/1998 ........................... 363,000 362,723
5.52%, 01/06/1998 ........................... 220,000 219,831
5.68%, 01/26/1998 ........................... 300,000 298,817
5.73%, 02/13/1998 ........................... 505,000 501,544
-----------
1,532,823
Leisure Time -- 2.69%
Walt Disney Co.
6.00%, 01/05/1998 ........................... 300,000 299,800
6.50%, 01/05/1998 ........................... 200,000 199,856
5.64%, 03/19/1998 ........................... 282,000 278,598
5.56%, 06/24/1998 ........................... 355,000 345,460
-----------
1,123,714
Principal Market
Amount Value
--------- ------
Commercial Paper (continued)
- ----------------------------
Mortgage Banking -- 3.87%
Countrywide Home Loans, Inc.
5.85%, 01/26/1998............................ $400,000 $398,375
5.87%, 01/26/1998 ........................... 600,000 597,554
5.62%, 01/30/1998 ........................... 250,000 248,868
5.82%, 01/30/1998 ........................... 375,000 373,242
-----------
1,618,039
Packaging -- 1.43%
Crown Cork & Seal, Inc.
6.02%, 02/18/1998 ........................... 377,000 373,974
5.97%, 03/12/1998 ........................... 225,000 222,388
-----------
596,362
Publishing -- 3.86% McGraw Hill, Inc.
5.75%, 01/20/1998 ........................... 750,000 747,724
5.70%, 02/09/1998 ........................... 300,000 298,148
5.58%, 02/10/1998 ........................... 175,000 173,915
5.67%, 03/19/1998 ........................... 400,000 395,149
-----------
1,614,936
Telecommunications -- 6.45%
Ameritech Corp.
5.80%, 01/29/1998 ........................... 495,000 492,767
Bellsouth Telecommunications, Inc
6.05%, 01/09/1998 ........................... 550,000 549,261
GTE Corp.
6.07%, 01/23/1998 ........................... 700,000 697,403
6.30%, 01/23/1998 ........................... 100,000 99,615
6.52%, 01/28/1998 ........................... 250,000 248,777
6.05%, 02/20/1998 ........................... 112,000 111,059
6.07%, 02/20/1998 ........................... 400,000 396,628
6.12%, 02/20/1998 ........................... 100,000 99,150
-----------
2,694,660
Utilities -- 1.68%
Florida Power Co. .............................
5.75%, 02/19/1998 ........................... 710,000 704,443
-----------
Total Commercial Paper
(cost $41,808,130) ................. 41,808,130
-----------
Money Market Fund -- 0.00%
- --------------------------
State Street Global Advisor Fund
5.16% (a) (cost $1,944) .................... 1,944 1,944
-----------
Total Investments -- 100%
- -------------------------
(cost $41,810,074) ............................ $41,810,074
===========
- --------------------------------------------------------------------------------
(a) Dividend yields change daily to reflect current market conditions. Rate
shown is the quoted yield as of December 31, 1997.
<PAGE>
SALOMON BROTHERS/JNL GLOBAL BOND SERIES
SCHEDULE OF INVESTMENTS
December 31, 1997
Principal Market
Amount Value
------ -----
Corporate Bonds -- 36.75%
Germany -- 1.86%
Banks -- 1.48%
Bundesrepublik Deutschland,
6.50%, 07/04/2027............................. $ 990,000 $596,108
Business Services -- 0.38%
Treuhandanstalt, 7.375%,
12/02/2002 ........................................ 250,000 154,173
--------
Total Germany .................................. 750,281
United States -- 34.89%
Aerospace Industries -- 0.40%
Talley Industries, 10.75%, ........................ 150,000 159,750
10/15/2003
Banks -- 2.34%
Banc One Corp., 7.60%, 05/01/2007 ................. 600,000 644,922
Malayan Banking Berhad, NY,
7.125%, 09/15/2005 ........................... 210,000 190,645
Midland Bank PLC, 7.65%, 05/01/2025................ 100,000 108,706
--------
944,273
Broadcasting -- 1.13%
Cablevision Systems Corp.,
10.50%, 05/15/2016 (d) ....................... 250,000 291,250
SFX Broadcasting, Inc.,
10.75%, 05/15/2006 ........................... 150,000 164,625
--------
455,875
Building & Construction -- 1.35%
Nortek, Inc., 9.125%, 09/01/2007 ................. 250,000 251,875
Southdown, Inc. Series B,
10.00%, 03/01/2006 ........................... 125,000 137,188
Synthetic Industries, Inc. (144a),
9.25%, 02/15/2007 ............................ 150,000 157,500
--------
546,563
Business Services -- 1.29%
Iron Mountain, Inc.,
10.125%, 10/01/2006 .......................... 150,000 165,000
Ryder Trucks, Inc.,
10.00%, 12/01/2006 (d) ....................... 200,000 200,000
Williams Scotsman, Inc. (144a),
9.875%, 06/01/2007 ........................... 150,000 154,500
--------
519,500
Capital Goods -- 0.20%
Alvey Systems, Inc. 11.375%,
01/31/2003 .................................... 75,000 81,750
Chemicals -- 0.26%
Radnor Holdings Inc.,
10.00%, 12/01/2003 ........................... 100,000 103,750
Principal Market
Amount Value
------ -----
United States (continued)
Conglomerates -- 1.27%
Burke Industries, Inc.,
10.00%, 08/15/2007........................ $ 250,000 $ 256,875
Insilco Corp., 10.25%, 08/15/2007 ............. 150,000 157,125
Polymer Group, Inc.,
9.00%, 07/01/2007 ........................ 100,000 99,750
----------
513,750
Consumer Goods -- 0.90%
Coleman Holdings, Inc., Zero
Coupon, 05/15/2001 ....................... 300,000 199,500
International Knife & Saw, Inc.
11.375%, 11/15/2006 ...................... 150,000 162,000
----------
361,500
Containers & Glass -- 1.29%
Stone Container Corp.,
12.25%, 04/01/2002 ....................... 250,000 253,125
Plastic Containers, Inc.,
10.00%, 12/15/2006 ....................... 250,000 268,028
----------
521,153
Cosmetics & Toiletries -- 0.76%
French Fragrances, Inc. (144a),
10.375%, 05/15/2007 ...................... 125,000 131,250
Revlon Worldwide Corp. (144a),
Zero Coupon, 03/15/2001 .................. 250,000 174,375
----------
305,625
Drugs & Health Care -- 1.74%
Eye Care Centers of America,
Inc., .12.00%, 10/01/2003...................... 200,000 216,000
Imagyn Medical Technologies,
Inc., 12.50%, 04/01/2004 ................. 250,000 236,875
Integrated Health Services, Inc.,
9.50%, 09/15/2007 ........................ 100,000 103,000
Packard Bioscience Co.,
9.375%, 03/01/2007 ....................... 150,000 144,000
----------
699,875
Electronics -- 0.93%
Clark-Schwebel, Inc.,
10.50%, 04/15/2006 (d) ................... 250,000 272,500
Foamex LP/ Foamex Cap Corp. ...................
(144a),9.875%, 06/15/2007 ................. 100,000 102,500
----------
375,000
Financial Services -- 2.78%
Aetna Services Inc.,
7.625%, 08/15/2026 ....................... 200,000 210,824
Green Tree Financial Corp.,
7.07%, 09/15/2007 ........................ 600,000 608,185
PaineWebber Group, Inc.,
7.00%, 03/01/2000 ........................ 300,000 303,306
----------
1,122,315
See notes to the financial statements.
<PAGE>
SALOMON BROTHERS/JNL GLOBAL BOND SERIES
SCHEDULE OF INVESTMENTS (continued)
Principal Market
Amount Value
------ -----
Corporate Bonds (continued)
United States (continued)
Food & Beverages -- 1.07%
B & G Foods, Inc., 9.625%,
08/01/2007.................................... $ 125,000 $ 125,937
CFP Holdings, Inc.,
11.625%, 01/15/2004 .......................... 200,000 204,948
Dole Foods, Inc., 6.75%,
07/15/2000 ................................... 100,000 100,832
--------
431,717
Gaming -- 0.62%
Grand Casinos, Inc., 9.00%,
10/15/2004 ........................................ 250,000 251,250
Hotels & Restaurants -- 1.08%
Prime Hospitality Corp.,
9.75%, 04/01/2007 ............................ 250,000 267,500
Sun International Hotels, Ltd.
9.00%, 03/15/2007 ............................ 50,000 51,625
Wyndham Hotel Corp.,
10.50%, 05/15/2006 ........................... 100,000 116,000
--------
435,125
Household Appliances &
Furnishings -- 0.65%
Collins & Aikman Floorcovering
10.00%, 01/15/2007 ........................... 150,000 156,750
Rayovac Corp., 10.25%, 11/01/2006 ................. 98,000 106,820
--------
263,570
Industrial Machinery -- 0.52%
Harnischfeger Industries, Inc.,
6.875%, 02/15/2027 ........................... 200,000 208,142
Liquor -- 0.33%
Stroh Brewery Co., 11.10%,
07/01/2006 ........................................ 150,000 135,000
Metals & Mining -- 0.66%
Renco Metals, Inc., 11.50%,
07/01/2003 ........................................ 250,000 265,000
Packaging -- 0.28%
Tekni Plex, Inc., 11.25%,
04/01/2007 ........................................ 100,000 109,347
Paper -- 0.47%
Doman Industries Ltd.,
8.75%, 03/15/2004 ............................ 200,000 191,000
Petroleum Services -- 2.30%
Cliffs Drilling Co., 10.25%,
05/15/2003 ................................... 150,000 162,000
Cross Timbers Oil Co.,
9.25%, 04/01/2007 ............................ 150,000 156,000
Dailey Intl. Inc.,
9.75%, 08/15/2007 ............................ 100,000 104,250
National Energy Group, (144a),
10.75%, 11/01/2006 ........................... 150,000 155,625
Principal Market
Amount Value
------ -----
Corporate Bonds (continued)
United States (continued)
Petroleum Services (continued)
Occidental Petroleum Corp.,
9.25%, 08/01/2019........................... $ 150,000 $ 187,346
Parker Drilling Corp.,
9.75%, 11/15/2006 .......................... 150,000 160,875
---------
926,096
Pollution Control -- 1.28%
Allied Waste Industries, Inc. ...................
(step-up bond), 11.30%,
06/01/2007 (a) ............................. 200,000 140,500
Envirosource, Inc., 9.75%,
06/15/2003 ................................. 200,000 203,500
Norcal Waste System, (step-up
bond),Series B, 13.50%,
11/15/2005 ................................. 150,000 174,000
---------
518,000
Publishing -- 1.32%
American Media Operations Inc.,
11.625%, 11/15/2004 ........................ 250,000 271,250
Hollinger International
Publishing, Inc.
9.25%, 03/15/2007............................. 250,000 262,500
---------
533,750
Retail -- 3.50%
Cole National Group, Inc.,
8.625%, 08/15/2007 ......................... 250,000 250,000
Jitney Jungle Stores America,
Inc., 12.00%, 03/01/2006 (d) .................... 250,000 283,750
Pueblo Xtra International,
9.50%, 08/01/2003 .......................... 100,000 95,250
Riddell Sports, Inc., 10.50%,
07/15/2007 ................................ 250,000 256,875
Selmer Co. Inc. (144a),
11.00%, 05/15/2005 (d) ..................... 250,000 273,750
Staples, Inc., 7.125%, 08/15/2007 ............... 250,000 253,990
---------
1,413,615
Software -- 0.27%
Printpack, Inc. (144a),
10.625%, 08/15/2006 ........................ 100,000 107,000
Telecommunications -- 2.95%
Adelphia Communications,
10.50%, 07/15/2004 ......................... 100,000 107,125
9.875%, 03/01/2007 ......................... 100,000 105,250
Comcast Cellular Holdings, Inc.,
9.50%, 05/01/2007 (d) ...................... 250,000 260,000
Diamond Cable Communications, PLC,
11.75%, 12/15/2005 .......................... 225,000 174,937
Intermedia Communications,
(step-up bond), 12.50%,
05/15/2006 (a) .............................. 244,000 193,980
International CableTel, Inc.,
(step-up bond), 11.50%,
02/01/2006 (a) .............................. 225,000 176,625
Marcus Cable Co LP, (step-up
bond), 14.25%, 12/15/2005 (a) .................. 200,000 173,000
---------
1,190,917
See notes to the financial statements.
<PAGE>
SALOMON BROTHERS/JNL GLOBAL BOND SERIES
SCHEDULE OF INVESTMENTS (continued)
Principal Market
Amount Value
------ -----
Corporate Bonds (continued)
United States (continued)
Transportation -- 0.95%
Coach USA, Inc., 9.375%,
07/01/2007..................................... $ 250,000 $ 255,625
TFM SA de CV, 1.00%, 06/15/2009 ............... 200,000 127,000
----------
382,625
----------
Total United States ...................... 14,072,833
----------
Total Corporate Bonds
(cost $14,414,677) .................. 14,823,114
----------
Government Bonds -- 48.90%
Argentina -- 2.13%
Argentina Floating Rate Bond,
6.688%, 03/31/2005 (b) ................... 960,000 858,384
Australia -- 0.04%
Australia Government Bond,
8.75%, 08/15/2008 ........................ 20,000 15,711
Brazil -- 3.55%
Brazil Government Bond,
10.125%, 05/15/2027 ...................... 1,525,000 1,433,500
Canada -- 1.35%
Canadian Government Bond
6.50%, 09/01/1998 ........................ 570,000 402,835
7.50%, 09/01/2000 ........................ 150,000 110,407
7.00%, 12/01/2006 ........................ 40,000 30,686
----------
543,928
Denmark -- 0.87%
Denmark Government Bond,
6.00%, 11/15/2002 ........................ 1,940,000 294,034
8.00%, 03/15/2006 ........................ 330,000 55,795
----------
349,829
Ecuador -- 0.34%
Ecuador Pars (step-up bond),
3.50%, 02/28/2025 (g) .................... 250,000 137,500
Germany -- 1.14%
Germany (Federal Republic)
5.25%, 10/20/1998 ........................ 820,000 460,835
Mexico -- 4.17%
Mexico Global Bond,
11.375%, 09/15/2016 ...................... 350,000 401,844
6.25%, 12/31/2019 ........................ 750,000 628,096
11.50%, 05/15/2026 ....................... 550,000 651,200
----------
1,681,140
Principal Market
Amount Value
------ -----
Government Bonds (continued)
Morocco -- 1.50%
Morocco Loan Participation,
6.812%, 01/01/2009 (b).................... $ 700,000 $ 603,750
New Zealand -- 0.83%
New Zealand Government Bond,
8.00%, 07/15/1998 ........................ 580,000 335,884
Panama -- 0.38%
Panama Government Bond,
3.75%, 07/17/2014 (b) .................... 200,000 153,000
Russia -- 0.70%
Russia Government Bond,
6.719%, 12/02/2015 ....................... 400,000 280,248
South Korea -- 0.44%
Korea Development Bank,
9.60%, 12/01/2000 ........................ 200,000 178,686
Sweden -- 0.99%
Sweden Government Bond
11.00%, 01/21/1999 ....................... 2,300,000 306,950
6.50%, 10/25/2006 ........................ 700,000 91,229
----------
398,179
United States -- 28.91%
U.S. Government Agencies -- 18.55%
Federal Home Loan Mortgage Corp.
10.00%, 05/15/2020 ...................... 50,000 41,977
6.50%, TBA (e) ......................... 300,000 300,468
Federal National Mortgage
Association
6.65%, 08/25/2007 ........................ 1,200,000 1,227,375
13.00%, 11/01/2015 ....................... 15,000 11,275
7.00%, 11/18/2015 ........................ 1,500,000 1,528,521
10.40%, 04/25/2019 ....................... 100,000 69,170
8.77%, 03/17/2020, interest
only (c) .............................. 841,140 25,470
6.50%, 02/01/2026 ........................ 300,675 265,968
9.02%, 10/17/2036, interest
only (c) .............................. 4,295,000 133,445
7.00%, TBA (e) ........................... 3,500,000 3,525,130
7.00%, TBA (e) ........................... 350,000 352,513
----------
7,481,312
U.S. Treasury Bond -- 1.31%
6.375%, 08/15/2027 (d) ................... 500,000 527,345
U.S. Treasury Notes -- 9.05%
6.625%, 03/31/2002 (d) ................... 1,000,000 1,032,340
6.25%, 08/31/2002 (d) .................... 1,500,000 1,530,705
5.875%, 09/30/2002 (d) ................... 800,000 804,376
3.375%, 01/15/2007 (f) ................... 70,000 68,163
6.125%, 08/15/2007 (d) ................... 210,000 215,808
----------
3,651,392
----------
Total United States ................. 11,660,049
----------
See notes to the financial statements.
<PAGE>
SALOMON BROTHERS/JNL GLOBAL BOND SERIES
SCHEDULE OF INVESTMENTS (continued)
Principal Market
Amount Value
------ -----
Government Bonds (continued)
Venezuela -- 1.56%
Republic of Venezuela--Par,
6.812%, 03/31/2007 (b).................... $ 714,286 $ 628,607
-----------
Total Government Bonds
(cost $19,289,766) .................. 19,719,230
-----------
Asset Backed Securities -- 1.36%
Airplane Pass-through Trust,
10.875%, 03/15/2019 ...................... 125,000 144,515
Mid State Trust, Series VI,
7.34%, 07/01/2035 ........................ 400,000 402,974
-----------
Total Asset Backed Securities
(cost $511,602) .................... 547,489
-----------
Warrants -- 0.00%
United States -- 0.00%
Urohealth Systems, Inc.,
(cost $0) ..................................... 250 8
-----------
Principal Market
Amount Value
------ -----
Short Term Investments -- 12.99%
Government Bonds -- 0.82%
Republic of Italy,
5.97%, 07/31/1998......................... $ 600,000 $ 329,266
Money Market Fund -- 0.00%
State Street Global Advisor
Fund, 5.42%, (f) ........................... 873 873
Repurchase Agreements -- 12.17%
Repurchase Agreement with State
Street
Bank, 6.00%, (Collateralized by
$3,255,000 U.S. Treasury Note
10.625% due 08/15/2015,
market value - $4,911,637)
acquired on 12/31/97,
due 01/02/1998 .............................. 4,910,000 4,910,000
-----------
Total Short Term Investments
(cost $5,232,584) ....................... 5,240,139
-----------
Total Investments -- 100%
(cost $39,448,629) ............................ $40,329,980
===========
- --------------------------------------------------------------------------------
(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, 1997.
(c) The interest rates disclosed for interest only strips represent effective
yields at December 31, 1997 based upon estimated future cash flows.
(d) Security pledged as collateral for investments purchased on a when-issued
basis.
(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, 1997.
(g) Coupon payment periodically increases over the life of the security. Rate
stated is in effect as of December 31, 1997.
See notes to the financial statements.
<PAGE>
SALOMON BROTHERS/JNL
U.S. GOVERNMENT & QUALITY BOND SERIES
SCHEDULE OF INVESTMENTS
December 31, 1997
Principal Market
Amount Value
------ -----
U.S. Government Securities -- 68.49%
U.S. Government Agency & Agency
Backed Issues -- 42.44%
Federal Home Loan Bank
5.94%, 06/13/2000 ........................... $ 300,000 $ 300,936
Federal Home Loan Mortgage Corp.
6.00%, 09/01/2010 ........................... 4,021 3,991
11.75%, 01/01/2011 .......................... 4,613 5,192
7.00%, 07/01/2011 ........................... 117,757 119,768
8.25%, 04/01/2017 (c) ....................... 420,409 441,421
8.00%, 07/01/2020 ........................... 1,299,841 1,361,583
5.00%, 05/15/2021 ........................... 1,200,000 1,117,116
6.50%, TBA (a) .............................. 500,000 500,547
Federal National Mortgage
Association
6.74%, 08/25/2007 ........................... 1,400,000 1,445,062
14.50%, 11/01/2014 (c) ...................... 7,675 9,447
12.50%, 08/01/2015 .......................... 6,316 7,439
12.50%, 09/01/2015 .......................... 23,777 28,317
13.00%, 11/01/2015 (c) ...................... 20,619 24,054
12.00%, 01/01/2016 (c) ...................... 653,015 767,905
12.00%, 01/01/2016 .......................... 22,020 25,632
12.50%, 01/15/2016 (c) ...................... 333,170 392,620
11.50%, 04/01/2019 .......................... 7,312 8,361
10.50%, 08/01/2020 .......................... 128,212 143,357
6.50%, 03/01/2026 (c) ....................... 417,382 412,946
7.00%, 05/01/2026 (c) ....................... 325,331 328,379
6.50%, TBA (a) .............................. 1,500,000 1,481,250
7.00%, TBA (a) .............................. 100,000 100,718
7.00%, TBA (a) .............................. 3,800,000 3,827,284
Government National Mortgage
Association
13.50%, 07/15/2010 (c) ...................... 190,655 228,851
8.50%, 01/15/2018 ........................... 253,430 271,127
Student Loan Marketing
Association
7.50%, 03/08/2000 (c) ....................... 400,000 413,624
-----------
13,766,927
U.S. Treasury Bond -- 7.86%
6.625%, 02/15/2027 (c) ...................... 2,350,000 2,551,207
U.S. Treasury Notes -- 18.19%
6.50%, 05/31/2001 (c) ....................... 100,000 102,375
6.25%, 08/31/2002 ........................... 100,000 102,047
5.875%, 09/30/2002........................... 1,000,000 1,005,470
6.625%, 05/15/2007 (c) ...................... 2,150,000 2,275,646
6.125%, 08/15/2007 .......................... 2,350,000 2,415,001
-----------
5,900,539
-----------
Total U.S. Government
Securities
(cost $21,579,527) ...................... 22,218,673
-----------
Principal Market
Amount Value
------ -----
Corporate Bonds -- 2.42%
Banks -- 0.50%
Banc One Corp. .................................
7.60%, 05/01/2007 (c) ........................ $ 150,000 $ 161,231
Petroleum Services -- 1.92%
Occidental Petroleum Corp.
9.25%, 08/01/2019 (c) ........................ 500,000 624,485
Total Corporate Bonds
(cost $735,978) .......................... 785,716
-----------
Short Term Investments -- 29.09%
Commercial Paper --3.08%
UBS Finance Delaware, Inc.,
6.50%, 01/02/1998 ......................... 1,000,000 999,819
Money Market Fund -- 0.00%
State Street Global Advisor
Fund, 5.42% (b)................................. 299 299
Repurchase Agreements -- 23.70% Repurchase
agreement with J.P. Morgan,
6.25% (Collateralized by
U.S. Treasury Note, 8.75% due
05/15/2020, market value -
$3,920,895), acquired on
12/31/1997,
due 01/02/1998 ............................... 3,844,000 3,844,000
Repurchase agreement with State
Street
Bank, 6.00% (Collateralized by
$2,550,000 U.S. Treasury Note,
10.625% due 08/15/2020,
market value - $3,926,210),
acquired on 12/31/1997,
due 01/02/1998 ............................... 3,844,000 3,844,000
-----------
7,688,000
U.S. Government Agencies -- 2.31%
Federal Home Loan Bank Discount
Note
5.75%, 01/07/1998 ............................ 750,000 749,281
-----------
Total Short Term Investments
(cost $9,437,399) ........................ 9,437,399
-----------
Total Investments -- 100%
(cost $31,752,904) ............................. $32,441,788
===========
- --------------------------------------------------------------------------------
(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, 1997.
(c) Security pledged as collateral for investments purchased on a when-issued
basis.
See notes to the financial statements.
<PAGE>
T. ROWE PRICE/JNL ESTABLISHED GROWTH SERIES
SCHEDULE OF INVESTMENTS
December 31, 1997
Market
Shares Value
------ -----
Common Stocks -- 94.26%
France -- 0.13%
Liquor -- 0.13%
LVMH, Louis Vuitton Moet
Hennessy ............................... 990 $ 164,328
Hong Kong -- 0.56%
Conglomerates -- 0.56%
Hutchinson Whampoa Ltd. ................... 75,000 470,383
Swire Pacific Ltd. ........................ 40,000 219,383
----------
Total Hong Kong .................... 689,766
Italy -- 0.75%
Banks -- 0.44%
Banca Fideuram ............................ 125,700 550,337
SPA
Telecommunications -- 0.31%
Telecom Italia SPA ........................ 22,900 105,697
Telecom Italia Mobile (a) ................. 62,090 273,772
----------
379,469
----------
Total Italy ............................. 929,806
Malaysia -- 0.03%
Industrial Machinery -- 0.03%
United Engineers Ltd. ..................... 47,900 39,901
Mexico -- 0.32%
Household Products -- 0.32%
Kimberly Clark de Mexico,
SA de CV ............................ 80,500 393,997
Netherlands -- 2.05%
Household Products -- 0.17%
Hagemeyer NV .............................. 4,900 204,685
Newspapers -- 1.23%
Ver Ned Uitgevers N.V ..................... 54,300 1,531,803
Publishing -- 0.26%
Elsevier NV ............................... 20,300 328,380
Software -- 0.39%
Getronics NV .............................. 15,400 490,637
----------
Total Netherlands ....................... 2,555,505
Portugal -- 0.96%
Telecommunications -- 0.96%
Telecel - Communicacoes
Pessoais
SA, (a) ................................ 11,200 1,193,328
South Africa -- 0.16%
Mining -- 0.16%
Anglo American Platinum Corp. ........... 15,300 204,356
Market
Shares Value
------ -----
Common Stocks (continued)
Sweden -- 0.82%
Drugs & Health Care -- 0.43%
Astra AB Class B .......................... 31,400 $ 527,954
Retail -- 0.39%
Hennes & Mauritz AB Class B (a) ........... 10,000 440,811
Modern Times Group MTG
Class B (a) ........................... 7,800 46,663
----------
487,474
----------
Total Sweden ............................ 1,015,428
Switzerland -- 1.03%
Conglomerates -- 0.10%
Sig Schweizerische Industries AG .......... 45 123,186
Drugs & Health Care -- 0.93%
Novartis AG ............................... 713 1,156,454
----------
Total Switzerland ....................... 1,279,640
United Kingdom -- 2.67%
Conglomerates -- 2.28%
Granada Group PLC (a) ..................... 50,200 766,818
Rentokil Initial PLC ...................... 201,500 891,715
Tomkins PLC ............................... 249,000 1,177,870
----------
2,836,403
Telecommunications -- 0.39%
Vodafone Group PLC ........................ 67,300 486,377
----------
Total United Kingdom .................... 3,322,780
United States -- 84.78%
Aerospace -- 1.46%
AlliedSignal, Inc. ........................ 45,600 1,775,550
United Technologies Corp. ................. 500 36,406
----------
1,811,956
Apparel & Textiles -- 0.16%
Nike, Inc. Class B ........................ 5,000 196,250
Automobile & Parts -- 2.04%
Danaher Corp. ............................. 40,100 2,531,313
Banks -- 6.18%
Barnett Banks, Inc. ....................... 9,100 654,063
Citicorp .................................. 7,800 986,213
First Union Corp. ......................... 15,600 799,500
Mellon Bank Corp. ......................... 10,200 618,375
Northern Trust Corp. ...................... 8,400 585,900
<PAGE>
T. ROWE PRICE/JNL ESTABLISHED GROWTH SERIES
SCHEDULE OF INVESTMENTS (continued)
Market
Shares Value
------ -----
Common Stocks (continued)
United States (continued)
Banks (continued)
Norwest Corp. ............................. 47,500 $1,834,688
Toronto Dominion Bank ..................... 25,100 945,956
Wells Fargo & Co. ......................... 3,700 1,255,919
----------
7,680,614
Broadcasting -- 0.60%
Cox Communications, Inc. (a) .............. 18,500 741,156
Building & Construction -- 0.84%
Masco Corp. ............................... 20,600 1,048,025
Business Services -- 4.50%
Automatic Data Processing, Inc. ........... 16,100 988,138
Cendant Corp. (a) ......................... 46,200 1,588,125
First Data Corp. .......................... 47,002 1,374,809
Interpublic Group Companies, .............. 19,250 958,891
Inc .......................................
Service Corp. International, .............. 18,600 687,038
Inc .......................................
----------
5,597,001
Chemicals -- 0.15%
Great Lakes Chemical Corp. ................ 4,200 188,475
Computers & Business Equipment--2.25%
Cisco Systems, Inc. (a) ................... 13,500 752,625
Compaq Computer Corp. ..................... 16,100 908,644
Dell Computer Corp. (a) ................... 4,600 386,400
Hewlett Packard Co. ....................... 12,000 750,000
----------
2,797,669
Drugs & Health Care -- 9.49%
American Home Products Corp. .............. 10,400 795,600
Amgen, Inc. (a) ........................... 6,100 330,163
Baxter International, Inc. ................ 6,700 337,931
Biogen, Inc. (a) .......................... 14,300 520,163
Bristol Myers Squibb Co. .................. 12,400 1,173,350
Genentech, Inc. (a) ....................... 15,500 939,688
Healthsouth Corp. (a) ..................... 38,900 1,079,475
Johnson & Johnson Co. ..................... 8,300 546,763
Medtronic, Inc. ........................... 7,600 397,575
Merck & Co., Inc. ......................... 15,300 1,625,625
Pacificare Health Systems ................. 3,900 204,263
Class B (a)
Pfizer, Inc. .............................. 20,600 1,535,988
Tenet Healthcare Corp. (a) ................ 22,400 742,000
United Healthcare Corp. ................... 15,600 775,125
Warner Lambert Co. ........................ 6,400 793,600
----------
11,797,309
Electrical Equipment -- 2.90%
Boston Scientific Corp. (a) ............... 5,900 270,663
General Electric Co. ...................... 45,500 3,338,563
----------
3,609,226
Market
Shares Value
------ -----
Common Stocks (continued)
United States (continued)
Electronics -- 4.28%
Analog Devices, Inc. (a) .................. 24,100 $ 667,269
EMC Corp. (a) ............................. 16,000 439,000
Ericcson LM Tel Co. Class B ADR ........... 3,500 130,594
Intel Corp. ............................... 6,700 470,675
Linear Technology Corp. ................... 13,000 749,125
Maxim Integrated Products, Inc. ........... 30,200 1,041,900
(a)
Molex, Inc. Class A ....................... 9,468 272,205
National Semiconductor Corp. (a) ......... 17,100 443,531
Teleflex, Inc. ............................ 26,300 992,825
Xilinx, Inc. (a) .......................... 3,100 108,694
----------
5,315,818
Financial Services -- 5.71%
Corporate Express, Inc. (a) ............... 21,000 270,375
Federal Home Loan Mortgage Corp. ......... 82,800 3,472,425
Federal National Mortgage
Association .......................... 33,500 1,911,594
Green Tree Financial Corp. ............... 9,700 254,019
H & R Block, Inc. ........................ 22,300 999,319
SLM Holding Corp. ........................ 1,300 180,863
----------
7,088,595
Food & Beverages -- 3.51%
CPC International, Inc. ................... 5,200 560,300
Coca-Cola Co. ............................. 9,100 606,288
PepsiCo, Inc. ............................. 30,000 1,093,125
Pioneer Hi-Bred International, Inc. ....... 6,900 740,025
Sara Lee Corp. ............................ 16,200 912,263
Unilever NV ............................... 7,200 449,550
----------
4,361,551
Household Products -- 0.54%
Procter & Gamble Co. ...................... 8,400 670,410
Industrial Machinery -- 2.43%
Honeywell, Inc. ........................... 6,200 424,700
TriMas Corp. .............................. 23,600 811,250
Tyco International, Ltd. .................. 39,462 1,778,256
----------
3,014,206
Insurance -- 9.22%
Ace Ltd. .................................. 24,200 2,335,300
Aetna, Inc. ............................... 6,900 486,881
Berkshire Hathaway, Inc. Class ............ 34 1,564,000
A (a)
Exel Ltd. ................................. 9,900 627,413
Fairfax Financial Holdings, ............... 2,400 534,061
Ltd. (a)
Mutual Risk Management, Ltd. .............. 32,400 969,975
PartnerRe, Ltd. ........................... 14,100 653,888
St. Paul Cos., Inc. ....................... 5,400 443,138
Travelers Group, Inc., .................... 30,450 1,640,494
Travelers Property Casualty Corp. ......... 13,400 589,600
UNUM Corp. ................................ 29,700 1,614,938
----------
11,459,688
<PAGE>
T. ROWE PRICE/JNL ESTABLISHED GROWTH SERIES
SCHEDULE OF INVESTMENTS (continued)
Market
Shares Value
------ -----
Common Stocks (continued)
United States (continued)
Leisure Time -- 1.97%
Carnival Corp. ............................ 15,500 $ 858,313
Walt Disney Co. ........................... 16,100 1,594,906
----------
2,453,219
Mining -- 0.99%
Anglo American Platinum Corp. Ltd. ........ 21,218 283,409
Barrick Gold Corp. ........................ 13,400 249,575
Newmont Mining Corp. ...................... 23,900 702,063
----------
1,235,047
Newspapers -- 1.36%
Reuters Holdings ADR ...................... 4,800 318,000
Tribune Co. ............................... 22,100 1,375,725
----------
1,693,725
Office Furnishings & Supplies -- 0.48%
Ikon Office Solutions, Inc. ............... 21,000 590,625
Oil -- 2.23%
Mobil Corp. ............................... 14,300 1,032,281
Royal Dutch Petroleum Co. ................. 32,100 1,739,419
----------
2,771,700
Paper -- 0.74%
Kimberly Clark Corp. ...................... 18,700 922,145
Petroleum Services -- 1.26%
Halliburton Co. ........................... 11,200 581,700
Schlumberger Ltd. ......................... 5,900 474,950
Western Atlas, Inc. (a) ................... 6,900 510,600
----------
1,567,250
Pollution Control -- 0.71%
USA Waste Services, Inc. (a) .............. 22,500 883,125
Real Estate -- 1.85%
Security Capital U.S. Realty (a) ......... 72,500 1,029,500
Starwood Lodging Trust Co. ................ 22,000 1,273,250
----------
2,302,750
Restaurants -- 0.33%
McDonald's Corp. ......................... 8,500 405,875
Retail -- 4.13%
Circuit City Stores, Inc. ................. 3,700 131,581
CVS Corp. ................................. 9536 610,900
Dillards Inc. ............................. 17,800 627,450
Home Depot, Inc. .......................... 14,450 850,744
Kohl's Corp. (a) .......................... 5,200 354,250
Safeway, Inc. (a) ......................... 19,300 1,220,725
Tag Heuer International ADR (a) ........... 61,900 510,675
Wal-Mart Stores, Inc. ..................... 20,900 824,244
----------
5,130,569
Market
Shares Value
------ -----
Common Stocks (continued)
United States (continued)
Software -- 5.02%
BMC Software, Inc. (a) .................... 23,100 $1,515,938
Microsoft Corp. (a) ....................... 12,900 1,667,325
Network Associates, Inc. (a) .............. 22,600 1,194,975
Oracle Corp. (a) .......................... 27,725 618,614
Parametric Technology Corp. (a) ........... 26,100 1,236,488
----------
6,233,340
Steel -- 0.03%
Pohang Iron & Steel Co. ADR ............... 1,700 29,644
Telecommunications -- 5.03%
AT&T Corp. ................................ 14,900 912,625
Grupo Iusacell Series D ADR (a) ........... 60,200 918,050
MCI Communications Corp. .................. 23,200 993,250
Nokia Corp. ADR ........................... 14,100 985,238
Telecomunicacoes Brasileiras ADR .......... 5,400 628,763
Vodafone Group PLC ADR .................... 17,300 1,254,250
Worldcom, Inc. (a) ........................ 18,500 559,625
----------
6,251,801
Tobacco -- 1.58%
Philip Morris Cos., Inc. .................. 43,400 1,966,563
Toys -- 0.58%
Mattel, Inc. .............................. 19,400 722,650
Transportation -- 0.23%
Tranz Rail Holdings Ltd. ADR (a) ......... 25,200 289,800
----------
Total United States ..................... 105,359,090
----------
Total Common Stocks
(cost $99,548,528) .................. 117,147,925
----------
Principal
Amount
------
Short Term Investments -- 5.74%
Commercial Paper -- 3.40%
Ciesco LP
6.40%, 01/02/1998....................... $1,264,000 1,263,775
5.87%, 01/20/1998....................... 2,971,000 2,961,796
----------
4,225,571
Money Market Fund -- 0.00%
State Street Global Advisor Fund
5.42%, (b) ............................. 1,108 1,108
Market
Shares Value
------ -----
Short Term Investments (continued)
U.S. Government Agencies -- 2.34%
Federal National Mortgage
Association,
Discount Note, 5.70%, ................... $2,913,000 $2,903,776
01/21/1998
----------
Total Short Term Investments
(cost $7,130,455) ..................... 7,130,455
----------
Total Investments -- 100%
(cost $106,678,983) ....................... $124,278,380
==========
- --------------------------------------------------------------------------------
(a) Non-income producing security.
(b) Dividend yields change daily to reflect current market conditions. Rate
stated is the quoted yield as of December 31, 1997.
See notes to the financial statements.
<PAGE>
T. ROWE PRICE/JNL INTERNATIONAL EQUITY INVESTMENT SERIES
T. ROWE PRICE/JNL INTERNATIONAL EQUITY INVESTMENT SERIES
SCHEDULE OF INVESTMENTS
December 31, 1997
Market
Shares Value
------ -----
Common Stocks -- 95.40%
Argentina -- 0.21%
Oil -- 0.21%
Perez Companc Class B ....................... 22,563 $ 161,130
Australia -- 2.01%
Banks -- 0.52%
Australia & New Zealand Bank
Group Ltd. ............................... 7,000 46,261
Commonwealth Bank of Australia .............. 13,821 158,538
National Australia Bank ..................... 7,242 101,149
Westpac Banking Corp. ....................... 16,000 102,361
---------
408,309
Broadcasting -- 0.30%
Publishing & Broadcasting Ltd. .............. 18,000 81,112
News Corp. .................................. 27,383 151,163
---------
232,275
Conglomerates -- 0.05%
Brambles Industries, Ltd. ................... 2,000 39,692
Electric Utilities -- 0.18%
Australia Gas & Light Co., Ltd. ............. 20,237 141,127
Financial Services -- 0.29%
Lend Lease Corp. ............................ 7,403 144,747
Tab Corp. Holdings Ltd. ..................... 18,000 84,467
---------
229,214
Liquor -- 0.08%
Fosters Brewing Group, Ltd. ................. 34,000 64,706
Metals & Mining -- 0.04%
WMC, Ltd. ................................... 10,000 34,868
Oil -- 0.32%
Broken Hill Proprietary Co. ................. 16,156 150,048
Woodside Petroleum, Ltd. .................... 14,000 98,727
---------
248,775
Publishing -- 0.09%
John Fairfax FXF Unit Trust ................. 18,000 3,050
John Fairfax Holdings, Ltd. ................. 32,000 66,739
---------
69,789
Telecommunications -- 0.14%
Telstra Corporation Ltd. .................... 51,000 107,695
---------
Total Australia ........................... 1,576,450
Belgium -- 1.39%
Banks -- 1.25%
Credit Communal ............................. 545 73,180
Dexia Generale de Banque .................... 566 246,329
Kredietbank ................................. 1,580 663,113
---------
982,622
Market
Shares Value
------ -----
Common Stocks (continued)
Belgium (continued)
Basic Industry -- 0.14%
UCB SA ...................................... 33 $ 108,928
---------
Total Belgium ............................. 1,091,550
Brazil -- 0.08%
Basic Industry -- 0.01%
White Martins SA ............................ 5,897 8,613
Energy -- 0.07%
Centrais Electricas Brasileiras SA (a)....... 1,093,300 54,369
---------
Total Brazil .............................. 62,982
Canada -- 0.30%
Basic Industry -- 0.17%
Alcan Aluminum Ltd. ......................... 4,960 137,098
Financial Companies -- 0.13%
Royal Bank of Canada ........................ 1,850 98,063
---------
Total Canada .............................. 235,161
Czechoslovakia -- 0.02%
Telecommunication Services -- 0.02%
SPT Telecommunications AS ................... 130 13,607
Denmark -- 0.31%
Banks -- 0.30%
Den Danske Bank AB .......................... 1,130 150,570
Unidanmark Series A, A/S .................... 1,130 82,954
---------
233,524
Telecommunications -- 0.01%
Teledanmark Class B ......................... 200 12,405
---------
Total Denmark ............................. 245,929
France -- 8.70%
Banks -- 0.51%
Credit Commercial de France ................. 1,564 107,194
Dexia France ................................ 838 97,049
Societe Generale ............................ 1,420 193,470
---------
397,713
Broadcasting -- 0.39%
Canal Plus .................................. 750 139,445
Societe Television Francaise ................ 1,660 169,627
---------
309,072
Building & Construction -- 0.13%
Groupe GTM (a) .............................. 410 27,590
Lapeyre ..................................... 1,290 71,053
---------
98,643
See notes to the financial statements.
<PAGE>
T. ROWE PRICE/JNL INTERNATIONAL EQUITY INVESTMENT SERIES
SCHEDULE OF INVESTMENTS (continued)
Market
Shares Value
------ -----
Common Stocks (continued)
France (continued)
Business Services -- 1.60%
Eaux (Cie Generale) ......................... 8,800 $1,228,213
Havas ....................................... 400 28,778
---------
1,256,991
Containers & Glass -- 0.30%
Compagnie de Saint Gobain ................... 1,650 234,402
Drugs & Health Care -- 0.68%
L'Oreal ..................................... 262 102,519
Sanofi ...................................... 3,879 431,824
---------
534,343
Electrical Equipment -- 0.51%
Alcatel Alsthom ............................. 2,240 284,722
Legrand ..................................... 599 119,332
---------
404,054
Electronics -- 0.40%
Schneider ................................... 5,736 311,460
Food & Beverages -- 0.33%
Danone ...................................... 1,430 255,421
Gas Exploration -- 0.36%
Elf Aquitaine ............................... 2,450 284,955
Insurance -- 0.45%
AXA ......................................... 3,151 243,818
Assurances Generales de France .............. 1,996 105,761
---------
349,579
Leisure & Recreation -- 0.55%
Accor ....................................... 405 75,300
Pathe (a) ................................... 370 71,805
Sodexho Alliance ............................ 45 23,515
Sodexho Alliance ............................ 480 257,047
---------
427,667
Liquor -- 0.07%
LVMH, Luis Vuitton Moet Hennessy ............ 326 54,112
Oil -- 1.09%
Primagaz (Cie Des Gaz Petrole) .............. 755 63,100
Total Class B ............................... 7,237 787,611
---------
850,711
Paper --0.16%
Gilbert SA .................................. 898 128,019
Retail -- 1.17%
Carrefour Super Marche ...................... 393 205,038
Pinault Printemps Redoute ................... 1,340 714,919
---------
919,957
---------
Total France .............................. 6,817,099
Market
Shares Value
------ -----
Common Stocks (continued)
Germany -- 5.50%
Automobiles -- 0.14%
Buderus AG .................................. 78 $ 34,947
Volkswagen AG ............................... 140 78,757
---------
113,704
Banks -- 1.70%
Bayerische Hypotheken - und
Wechsel Bank AG .......................... 6,268 305,918
Bayerische Verinsbank AG .................... 4,308 281,860
Commerzbank AG .............................. 2,210 86,977
Deutsche Bank AG ............................ 6,710 473,704
Dresdner Bank AG ............................ 2,140 98,735
Dresdner Bank AG ............................ 4,783 85,081
---------
1,332,275
Basic Industry ................................. -- 0.46
Bayer AG .................................... 7,437 277,810
Hoechst AG .................................. 2,440 85,450
---------
363,260
Building & Construction -- 0.09%
Bilfinger & Berger Bau AG ................... 2,000 62,036
Hornback Baumarkt AG ........................ 200 5,670
---------
67,706
Drugs & Health Care -- 0.67%
Gehe AG ..................................... 8,074 403,936
Rhon Klinikum AG ............................ 1,230 120,337
---------
524,273
Electric Utilities -- 0.85%
Veba AG ..................................... 9,735 662,908
Industrial Machinery -- 0.37%
Mannesmann AG ............................... 258 130,366
Siemens AG .................................. 2,664 157,712
---------
288,078
Insurance -- 0.60%
Allianz AG (a) .............................. 1,810 468,862
Software -- 0.47%
SAP AG ...................................... 1,210 367,584
Telecommunications -- 0.15%
Deutsche Telekom ............................ 6,320 118,920
---------
Total Germany ............................. 4,307,570
Hong Kong -- 2.13%
Banks -- 0.10%
HSBC Holdings PLC ........................... 3,200 78,875
See notes to the financial statements.
<PAGE>
T. ROWE PRICE/JNL INTERNATIONAL EQUITY INVESTMENT SERIES
SCHEDULE OF INVESTMENTS (continued)
Market
Shares Value
------ -----
Common Stocks (continued)
Hong Kong (continued)
Conglomerates -- 0.90%
First Pacific Co. Ltd. ...................... 29,315 $ 14,186
Hutchinson Whampoa Ltd. ..................... 77,000 482,927
Swire Pacific Ltd. .......................... 38,000 208,414
---------
705,527
Electric Utilities -- 0.09%
China Light & Power ......................... 13,000 72,138
Financial Services -- 0.13%
Dao Heng Bank Group, Ltd. ................... 41,000 102,381
Real Estate -- 0.91%
Cheung Kong (Holdings) Ltd. ................. 11,000 72,042
New World Development Co., Ltd. ............. 100,034 345,969
Sun Hung Kai Properties, Ltd. ............... 11,000 76,655
Wharf Holdings .............................. 98,000 214,995
---------
709,661
---------
Total Hong Kong ........................... 1,668,582
Italy -- 3.99%
Banks -- 0.81%
Banca Commerciale Italiana .................. 14,000 48,672
Banca di Roma ............................... 186,000 187,682
Credito Italiano ............................ 128,833 397,278
---------
633,632
Financial Companies -- 0.54%
IMI Spa ..................................... 18,040 214,155
Mediolanum .................................. 11,108 209,099
---------
423,254
Food & Beverages -- 0.03%
La Rinascente SPA ........................... 3,000 22,386
Gas Exploration -- 0.60%
Ente Nazionale Idrocarburi Spa .............. 83,263 472,090
(ENI)
Gas & Pipeline Utilities -- 0.05%
Ital Gas (Societa Italiana II ............... 10,000 41,266
Gas) Spa
Insurance -- 0.32%
Assicurazioni Generali ...................... 10,000 245,619
Telecommunications -- 1.64%
Telecom Italia Mobile ....................... 10,797 30,700
Telecom Italia Mobile ....................... 140,601 648,958
Telecom Italia SPA .......................... 94,877 606,054
---------
1,285,712
---------
Total Italy ............................... 3,123,959
Market
Shares Value
------ -----
Common Stocks (continued)
Japan -- 18.49%
Automobiles -- 0.09%
Honda Motor Co. ............................. 2,000 $ 73,371
Automobile Parts -- 0.78%
Denso Corp. ................................. 34,000 611,932
Building & Construction -- 0.44%
Daiwa House Industry Co. .................... 24,000 126,829
Inax Corp. .................................. 5,000 14,513
Kumagai Gumi ................................ 10,000 5,438
National House Industrial ................... 3,000 20,563
Nippon Hodo ................................. 3,000 9,650
Sekisui House ............................... 18,000 115,662
Sumitomo Forestry Co., Ltd. ................. 11,000 53,833
---------
346,488
Business Services -- 0.51%
Kokuyo Co. .................................. 9,000 155,089
Toppan Printing Co. ......................... 19,000 247,377
---------
402,466
Chemicals -- 1.04%
Kuraray Co. ................................. 21,000 173,700
Mitsui Petrochemical Industries ............. 5,000 9,190
Sekisui Chemical Co., Ltd. .................. 30,000 152,332
Shin-Etsu Chemical Co. ...................... 20,000 381,405
Teijin ...................................... 45,000 94,087
---------
810,714
Consumer Products -- 0.28%
Kao Corp. ................................... 15,000 215,976
Drugs & Health Care -- 1.17%
Daiichi Pharmecutical Co. ................... 22,000 247,683
Sankyo Co. .................................. 24,000 542,238
Shiseido Co. ................................ 9,000 122,693
---------
912,614
Electrical Equipment -- 2.39%
Hitachi, Ltd. ............................... 36,000 256,414
Makita Corp. ................................ 16,000 153,175
NEC Corp. ................................... 67,000 713,257
Sumitomo Electric Industires, Ltd ........... 54,000 736,157
Yurtec Corp. ................................ 2,100 12,883
---------
1,871,886
Electronics -- 2.69%
Advantest Corp. ............................. 1,210 68,576
Alps Electric Co. Ltd. ...................... 11,000 103,623
Dai Nippon Screen Manufacturing
Co Ltd. (a) ................................ 18,000 82,714
Fanuc Co., Ltd. ............................. 4,900 185,387
Kyocera Corp. ............................... 12,000 544,076
Murata Manufacturing Co., Ltd. .............. 11,000 276,327
See notes to the financial statements.
<PAGE>
T. ROWE PRICE/JNL INTERNATIONAL EQUITY INVESTMENT SERIES
SCHEDULE OF INVESTMENTS (continued)
Market
Shares Value
------ -----
Common Stocks (continued)
Japan (continued)
Electronics (continued)
TDK Corp. ................................... 9,000 $ 678,257
Tokyo Electron, Ltd. ........................ 5,300 169,671
----------
2,108,631
Financial Companies -- 0.63%
Nomura Securities Co., Ltd. ................. 37,000 493,069
Household Appliances -- 2.23%
Matsushita Electric Industrial Co ........... 39,000 570,499
Pioneer Electronic Corp. .................... 11,000 169,334
Sangetsu Co. Ltd. ........................... 1,000 10,263
Sharp Corp. ................................. 33,000 226,959
Sony Corp. .................................. 8,700 772,919
----------
1,749,974
Industrial Machinery -- 1.06%
Amada Co., Ltd. ............................. 16,000 59,432
Daifuku Co. Ltd. ............................ 2,000 9,727
Hitachi Zosen Corp. ......................... 24,000 38,416
Ishihara Sangyo Kaisha (a) .................. 6,000 6,663
Komatsu, Ltd. ............................... 24,000 120,395
Komori Corp. ................................ 8,000 118,863
Mitsubishi Heavy Industries,
Ltd ......................................... 115,000 479,130
----------
832,626
Insurance -- 0.14%
Tokio Marine & Fire Insurance Co ............ 10,000 113,349
Leisure & Recreation -- 0.05%
Sega Enterprises Ltd. ....................... 2,000 36,149
Paper -- 0.01%
Mitsubishi Paper Mills, Ltd. ................ 8,000 11,212
Photography -- 1.19%
Canon, Inc. ................................. 40,000 931,301
Real Estate -- 0.70%
Mitsui Fudosan Co. Ltd. ..................... 57,000 550,050
Retail -- 2.06%
Citizen Watch Co. (a) ....................... 13,000 87,118
Ito-Yokado Co. Ltd. ......................... 9,000 458,375
Marui Co., Ltd. ............................. 22,000 342,039
Mitsubishi Corp. ............................ 21,000 165,658
Seven Eleven Japan Co., Ltd. ................ 3,000 212,300
Sumitomo Corp. .............................. 42,000 234,817
UNY Co. Ltd. ................................ 8,000 109,673
----------
1,609,980
Steel -- 0.28%
Nippon Steel Corp. .......................... 133,000 196,592
Tokyo Steel Manufacturing Ltd. .............. 6,000 20,265
----------
216,857
Market
Shares Value
------ -----
Common Stocks (continued)
Japan (continued)
Telecommunications -- 0.40%
DDI Corp. ................................... 36 $ 95,121
Nippon Telephone & Telegraph ................ 25 214,444
Corp ........................................
---------
309,565
Transportation -- 0.35%
East Japan Railway .......................... 60 270,659
---------
Total Japan ............................... 14,478,869
Malaysia -- 0.24%
Industrial Machinery -- 0.01%
Time Engineering Berhad ..................... 23,000 5,913
Leisure & Recreation -- 0.12%
Berjaya Sports Toto Berhad .................. 37,000 94,652
Mining -- 0.11%
Tanjong ..................................... 51,000 84,574
---------
Total Malaysia ............................ 185,139
Mexico -- 0.79%
Banks -- 0.11%
Grupo Financiero Banamex Series B (a)....... 27,288 81,656
Grupo Financiero Banamex Series L (a)........ 465 1,198
---------
82,854
Basic Industry -- 0.09%
Cemex SA de CV .............................. 12,950 69,159
Food & Beverages -- 0.25%
Fomento Economico Mexicano
SA de CV, Class A ........................ 15,629 124,908
Gruma S.A. Series B (a) ..................... 17,762 70,427
---------
195,335
Household Products -- 0.18%
Kimberly Clark de Mexico, SA de
CV Class A .................................. 28,211 138,075
Industrial Machinery -- 0.07%
Grupo Industrial Maseca SA de CV
Class B .................................. 54,800 56,630
Liquor -- 0.09%
Grupo Modelo SA de CV Class C ............... 8,844 74,298
---------
Total Mexico .............................. 616,351
Netherlands -- 10.31%
Banks -- 0.52%
ABN Amro Holdings NV ........................ 21,000 409,094
Chemicals -- 0.10%
Akzo Nobel NV ............................... 458 78,967
See notes to the financial statements.
<PAGE>
T. ROWE PRICE/JNL INTERNATIONAL EQUITY INVESTMENT SERIES
SCHEDULE OF INVESTMENTS (continued)
Market
Shares Value
------ -----
Common Stocks (continued)
Netherlands (continued)
Conglomerates -- 0.07%
Koninklijke PTT Nederland NV (a) ........... 1,407 $ 58,705
Electrical Equipment -- 0.01%
Otra NV ..................................... 670 9,583
Financial Companies -- 1.72%
Fortis AMEV NV .............................. 8,235 359,023
ING Groep N.V ............................... 23,500 989,766
---------
1,348,789
Food & Beverages -- 0.61%
CSM NV ...................................... 7,206 319,848
Nutricia Verenigde Bedruven NV .............. 5,150 156,203
---------
476,051
Household Products -- 0.97%
Unilever NV ................................. 12,350 761,349
Leisure & Recreation -- 0.44%
Polygram NV ................................. 7,127 340,946
Oil -- 2.44%
Royal Dutch Petroleum Co. ................... 34,770 1,908,565
Publishing -- 3.07%
Elsevier NV ................................. 53,329 862,669
Wolters Kluwer NV (a) ....................... 11,924 1,540,155
---------
2,402,824
Retail -- 0.15%
Koninklijke Ahold NV ........................ 4,392 114,584
Software -- 0.21%
Baan Co. NV (a) ............................. 4,950 162,099
---------
Total Netherlands ......................... 8,071,556
New Zealand -- 0.33%
Building Construction -- 0.06%
Fletcher Challange Building (a) ............. 22,396 45,775
Energy -- 0.08%
Fletcher Challange Energy ................... 16,915 59,225
Telecommunications -- 0.14%
Telecom Corp. of New Zealand, Ltd ........... 23,000 111,514
Transportation -- 0.05%
Air New Zealand Ltd. ........................ 20,909 41,886
---------
Total New Zealand ......................... 258,400
Market
Shares Value
------ -----
Common Stocks (continued)
Norway -- 1.88%
Conglomerates -- 0.99%
Orkla ASA ................................... 8,980 $ 772,063
Energy -- 0.87%
Norsk Hydro ASA ............................. 13,700 666,840
Saga Petroleum ASA Class B .................. 1,190 18,045
---------
684,885
Transportation -- 0.02%
Bergesen D-Y ASA ............................ 650 15,313
---------
Total Norway .............................. 1,472,261
Portugal -- 0.40%
Retail -- 0.40%
Jeronimo Martins (a) ........................ 5,998 190,320
Jeronimo Martins SGPS ....................... 3,999 126,890
---------
Total Portugal ......................... 317,210
Singapore -- 0.61%
Banks -- 0.24%
Overseas Chinese Banking Corp.Ltd ........... 4,800 27,909
Overseas Union Bank, Ltd. ................... 17,600 67,351
United Overseas Bank, Ltd. .................. 16,000 88,757
---------
184,017
Publishing -- 0.23%
Singapore Press Holdings, Ltd. .............. 14,400 180,267
Real Estate -- 0.14%
City Developments, Ltd. ..................... 9,000 41,649
Singapore Land, Ltd. ........................ 31,000 68,051
---------
109,700
---------
Total Singapore ........................... 473,984
South Korea -- 0.07%
Electrical Equipment -- 0.05%
Samsung Electronics ......................... 1,626 36,837
Steel -- 0.02%
Pohang Iron & Steel Co. Ltd. ................ 700 18,956
---------
Total South Korea ......................... 55,793
Spain -- 2.27%
Banks -- 1.02%
Argentaria Corp. SA (a) ..................... 2,015 122,606
Banco Bilbao Vizcaya SA ..................... 4,090 132,351
Banco Popular Espanol SA .................... 3,256 227,610
Banco Santander SA .......................... 9,421 314,755
---------
797,322
Electronics -- 0.25%
Empresa Nacional de Electricidad ............ 11,098 197,047
SA
See notes to the financial statements.
<PAGE>
T. ROWE PRICE/JNL INTERNATIONAL EQUITY INVESTMENT SERIES
SCHEDULE OF INVESTMENTS (continued)
Market
Shares Value
------ -----
Common Stocks (continued)
Spain (continued)
Oil -- 0.21%
Respol SA ................................... 3,792 $ 161,785
Telecommunications -- 0.42%
Telefonica de Espana SA ..................... 11,651 332,667
Utilities -- 0.37%
Gas Natural SDG SA .......................... 2,082 107,961
Iberdrola SA (a) ............................ 13,608 179,088
---------
287,049
---------
Total Spain ............................... 1,775,870
Sweden -- 3.42%
Banks -- 0.43%
Nordbanken Holding AB (a) ................... 60,151 340,153
Business Services -- 0.06%
Esselte AB Class B .......................... 2,310 46,841
Construction & Mining
Equipment -- 0.55%
ABB AB ...................................... 13,880 164,324
Atlas Copco AB .............................. 8,820 262,715
---------
427,039
Drugs & Health Care -- 0.94%
Astra AB Class B ............................ 44,003 739,858
Household Appliances -- 0.46%
Electrolux AB Series B ...................... 5,160 358,085
Metals & Mining -- 0.37%
Granges AB (a) .............................. 1,990 31,204
Sandvik AB Class A .......................... 2,090 59,489
Sandvik AB Class B .......................... 6,830 195,268
---------
285,961
Office Furniture & Supplies -- 0.01%
Scribona AB ................................. 750 8,360
Retail -- 0.60%
Hennes & Mauritz AB Class B (a) ............. 10,660 469,905
---------
Total Sweden .............................. 2,676,202
Switzerland -- 6.84%
Banks -- 0.97%
Credit Suisse Group AG ...................... 1,200 185,601
Schweizerischer Bankverein AG ............... 1,060 329,346
Union Bank of Switzerland AG (a) ........... 170 245,716
---------
760,663
Business Services -- 0.40%
Adecco SA (a) ............................... 1,073 310,988
Market
Shares Value
------ -----
Common Stocks (continued)
Switzerland (continued)
Drugs & Health Care -- 3.72%
Novartis AG ................................. 1,063 $1,724,138
Roche Holding AG ............................ 120 1,191,213
---------
2,915,351
Electrical Equipment -- 0.43%
ABB AG (a) .................................. 267 335,303
Food & Beverages -- 1.32%
Nestle SA ................................... 690 1,033,678
---------
Total Switzerland ......................... 5,355,983
United Kingdom -- 19.19%
Automobiles -- 0.10%
Rolls-Royce PLC ............................. 21,000 81,057
Banks -- 3.20%
Abbey National PLC .......................... 32,000 576,058
National Westminster Bank PLC ............... 116,000 1,928,164
---------
2,504,222
Building & Construction -- 0.06%
Heywood Williams Group PLC .................. 3,000 10,298
Laing (John) PLC ............................ 7,000 36,907
---------
47,205
Conglomerates -- 0.77%
Tomkins PLC ................................. 128,000 605,491
Containers & Glass -- 0.26%
Caradon PLC ................................. 69,800 202,924
Drugs & Health Care -- 3.34%
Glaxo Wellcome PLC .......................... 45,000 1,072,825
SmithKline Beecham PLC ...................... 149,400 1,539,819
---------
2,612,644
Electronics -- 0.20%
Electrocomponents PLC ....................... 21,000 156,251
Food & Beverages -- 2.14%
Cadbury Schweppes PLC ....................... 39,000 393,621
Diageo PLC .................................. 137,000 1,253,375
Hillsdown Holdings PLC ...................... 11,000 26,740
---------
1,673,736
Gas & Pipeline Utilities -- 0.16%
British Gas PLC ............................. 27,352 123,096
Hotels & Restaurants -- 0.20%
Ladbroke Group PLC .......................... 37,000 160,439
Industrial Machinery -- 0.22%
GKN PLC ..................................... 2,000 40,964
T&N PLC ..................................... 31,000 129,840
---------
170,804
See notes to the financial statements.
<PAGE>
T. ROWE PRICE/JNL INTERNATIONAL EQUITY INVESTMENT SERIES
SCHEDULE OF INVESTMENTS (continued)
Market
Shares Value
------ -----
Common Stocks (continued)
United Kingdom (continued)
Leisure & Entertainment -- 0.62%
Compass Group PLC ........................... 19,000 $ 233,744
Rank Group PLC .............................. 45,000 250,563
---------
484,307
Mining -- 0.41%
Rio Tinto PLC ............................... 26,000 320,501
Oil -- 1.87%
British Petroleum Co. PLC ................... 24,000 317,485
Shell Transport & Trading Co. ............... 163,500 1,146,703
---------
1,464,188
Paper -- 0.10%
David S. Smith Holdings PLC ................. 25,000 81,509
Publishing -- 2.13%
Reed International PLC ...................... 117,000 1,114,601
United Newspapers & Media PLC ............... 49,000 557,744
---------
1,672,345
Retail -- 2.70%
Argos PLC ................................... 28,200 254,520
ASDA Group .................................. 98,000 288,304
Kingfisher PLC .............................. 66,000 921,443
Safeway PLC ................................. 46,000 259,154
Tesco PLC ................................... 47,000 387,562
---------
2,110,983
Telecommunication Services -- 0.68%
Cable & Wireless PLC ........................ 61,000 536,030
Utilities -- 0.03%
Centrica PLC ................................ 14,000 20,581
---------
Total United Kingdom ...................... 15,028,313
United States -- 5.92%
Apparel & Textiles -- 0.12%
Gucci Group NV N.Y .......................... 2,291 95,937
Banks -- 0.31%
Banco de Galicia Buenos Aires
S.A. de CV ADR ........................... 2,661 68,521
Banco Frances del Rio La Plata ADR........... 2,147 58,774
Banco Latinoamericano de
Exportaciones SA ADR ..................... 477 19,736
Unibanco - Uniao De Bancos
Brasiliers ADR ........................... 3,055 98,333
---------
245,364
Broadcasting -- 0.26%
Grupo Television SA de CV ADR (a) ........... 2,531 97,918
TV Azteca SA de CV ADR ...................... 4,600 103,788
---------
201,706
Market
Shares Value
------ -----
Common Stocks (continued)
United States (continued)
Building & Construction -- 0.24%
Cemex SA ADR ................................ 20,410 $ 185,067
Containers & Glass -- 0.05%
Compania Cervecerias Unidas ADR ............. 1,385 40,684
Electric Utilities -- 0.93%
Centrais Electricas Brasileiras ADR.......... 5,000 124,325
Chilectra SA ADR ............................ 2,330 59,514
Chilenger SA ADR ............................ 2,016 49,392
Companhia Energetica De
Minas Gerais ADR ......................... 2,595 112,750
Empresa Nacional de Electricidad ADR......... 3,254 57,555
Enersis SA ADR .............................. 1,978 57,362
Huaneng Power International,
Inc ADR...................................... 11,400 264,337
---------
725,235
Financial Services -- 0.06%
Cifra SA de CV ADR .......................... 10,141 24,906
Creditcorp Ltd. ............................. 1,080 19,440
---------
44,346
Food & Beverages -- 0.38%
Companhia Brasileira de
Distribuicao .Grupo Pao de Acucar ADR........ 3,390 61,966
Gruma SA de CV ADR (144a) (a) ............... 3,056 48,521
Panamerican Beverages, Inc. Class A.......... 5,840 190,530
---------
301,017
Household Appliances -- 0.05%
Industrie Natuzzi SPA ADR ................... 1,810 37,331
Oil & Gas -- 0.50%
Lukoil Holding Co. .......................... 520 47,580
YPF Sociedad Anonima ADR .................... 10,158 347,277
---------
394,857
Real Estate -- 0.25%
Hong Kong Land Holdings, Ltd. ............... 101,908 195,663
Retail -- 0.02%
Santa Isabel SA ADR ......................... 959 16,783
Software -- 0.11%
Baan Co. N.V ................................ 2,500 82,500
Telecommunications -- 2.64%
Compania Anonima Nacional
Telefonos de Venezuela ADR................. 2,342 96,737
Mahanagar Telephone Nigam, Ltd. (a).......... 8,000 124,080
Telecomunicacoes Brasileiras ADR ............ 10,422 1,213,512
Telefonica de Argentina ADR (a) ............. 4,550 169,488
Telefonica del Peru SA ADR .................. 1,717 40,028
Telefonos de Mexico ADR ..................... 7,615 426,916
---------
2,070,761
See notes to the financial statements.
<PAGE>
T. ROWE PRICE/JNL INTERNATIONAL EQUITY INVESTMENT SERIES
SCHEDULE OF INVESTMENTS (continued)
Market
Shares Value
------ -----
Common Stocks (continued)
United States (continued)
Total United States ....................... $4,637,251
---------
Total Common Stocks
(cost $69,868,498) .................... 74,707,201
---------
Rights & Warrants -- 0.00%
Belgium -- 0.00%
Banks -- 0.00%
Generale De Banque (a) (cost $26) ........... 26 8
---------
Preferred Stocks -- 2.07%
Australia -- 0.12%
Leisure & Entertainment -- 0.12%
News Corp. Ltd. ............................. 8,465 41,897
Sydney Harbour Casino Holdings Ltd........... 52,200 49,501
Total Australia ........................ 91,398
Brazil -- 1.27%
Banks -- 0.25%
Banco Bradesco SA........................... 13,040,953 128,534
Banco Bradesco SA ........................... 557,568 1,998
Banco Itau SA ............................... 124,000 66,664
Uniao de Bancos Brasileiros SA .............. 167 11
---------
197,207
Basic Indurstry -- 0.02%
Companhia Cimentu Partland Itau ............. 73,000 14,063
Consumer Products -- 0.04%
Brasmotor SA ................................ 82,150 8,097
Companhia de Tecidos Norte de
Coteminas ................................ 55,000 19,712
Lojas Americanas SA ......................... 815,665 3,800
---------
31,609
Electrical Equipment -- 0.18%
Companhia Cemig - Cia
Energetica de
Minas Gerais ............................. 3,311,597
143,882
Empressa Nacional de Comercio
Redito e Participacoes SA ................ 55,000 41
---------
143,923
Food & Beverages -- 0.11%
Companhia Cervejaria Brahma (a) ............. 128,894 86,618
Oil -- 0.28%
Petrobras Brasileiro SA ..................... 930,094 217,512
Market
Shares Value
------ -----
Preferred Stocks (continued)
Brazil (continued)
Steel -- 0.02%
Usinas Siderurgicas de Minas
Gerais ADR ............................... 2,288 $ 13,531
Telecommunications -- 0.37%
Telecommunicacoes de Rio
de Janiero SA ............................ 165,546 17,207
Telecommunicacoes de Minas Gerais ........... 1,959 247
Telecommunicacoes de Minas Gerais ........... 365,000 46,114
Telecommunicacoes de Sao Paulo SA ........... 852,141 226,762
---------
290,330
---------
Total Brazil .............................. 994,793
Finland -- 0.25%
Telecommunications--0.25%
Nokia Oy AB Series A ........................ 2,710 192,401
Germany -- 0.31%
Drugs & Health Care 0.10%
Fielmann AG ................................. 336 7,471
Fresenius AG ................................ 400 73,598
---------
81,069
Retail -- 0.08%
Hornbach Holdings AG ........................ 940 65,055
Software -- 0.13%
SAP AG ...................................... 297 97,159
---------
Total Germany ............................. 243,283
United States -- 0.12%
Steel -- 0.12%
Usinas Siderurgicas de
Minas Gerais ADR ......................... 16,230 95,981
---------
Total Preferred Stocks
(cost $1,602,182) ..................... 1,617,856
---------
Principal
Amount
------
Short Term Investments -- 2.53%
Money Market Fund -- 2.53%
State Street Global Advisor Fund
5.42% (b).................................. $1,983,932
1,983,932
-----------
Total Short Term Investments
(cost $1,983,932) ..................... 1,983,932
-----------
Total Investments -- 100%
(cost $73,454,612) .......................... $78,308,997
===========
- --------------------------------------------------------------------------------
(a) Non-income producing security.
(b) Dividend yields change daily to reflect current market conditions. Rate
stated is the quoted yield as of December 31, 1997.
See notes to the financial statements.
<PAGE>
T. ROWE PRICE/JNL MID-CAP GROWTH SERIES
SCHEDULE OF INVESTMENTS
December 31, 1997
Market
Shares Value
------ -----
Common Stocks --91.65%
Aerospace & Aircraft -- 0.97%
BE Aerospace, Inc. (a) .................... 46,000 $ 1,230,500
Apparel & Textiles -- 2.07%
Warnaco Group, Inc. ....................... 84,000 2,635,500
Automobiles & Parts -- 2.00%
Danaher Corp. ............................. 33,000 2,083,125
OEA, Inc. ................................. 15,900 460,105
-----------
2,543,230
Broadcasting -- 3.27%
Comcast Corp. ............................. 48,000 1,515,000
Cox Communications, Inc. (a) .............. 45,000 1,802,813
Jacor Communications, Inc. (a) ............ 16,000 850,000
-----------
4,167,813
Building & Construction -- 0.36%
Fastenal Co. .............................. 12,000 459,000
Business Services -- 11.23%
AccuStaff, Inc. (a) ....................... 41,000 943,000
ADVO, Inc. (a) ............................ 16,000 312,000
Catalina Marketing Corp. (a) .............. 27,600 1,276,500
Cendant Corp. (a) ......................... 51,416 1,767,408
Galileo International, Inc. ............... 60,000 1,657,500
Gartner Group, Inc. (a) ................... 39,000 1,452,750
Interim Services, Inc. (a) ................ 70,000 1,811,250
National Data Corp. ....................... 33,000 1,192,125
Outdoor Systems, Inc. (a) ................. 52,450 2,012,769
Sungard Data Systems, Inc. (a) ............ 60,600 1,878,600
-----------
14,303,902
Chemicals -- 0.92%
Great Lakes Chemical Corp. ................ 26,000 1,166,750
Computers & Business Equipment --6.23%
Affiliated Computer Services, Inc. (a)..... 84,000 2,210,250
CheckFree Holding Corp. (a) ............... 33,000 891,000
DST Systems, Inc. (a) ..................... 41,000 1,750,187
Microchip Technology Inc.(a) .............. 24,000 720,000
Network Associates, Inc. (a) .............. 32,000 1,692,000
Security Dynamics Technologies,
Inc, (a) ............................... 19,000 679,250
-----------
7,942,687
Drugs & Health Care -- 13.29%
Agouron Pharmaceuticals, Inc. (a) ......... 22,000 643,500
ALZA Corp. (a) ............................ 41,000 1,304,312
Biogen, Inc. (a) .......................... 64,000 2,328,000
Cardinal Health, Inc. ..................... 15,000 1,126,875
Covance, Inc. (a) ......................... 77,000 1,530,375
General Nutrition Cos., Inc. (a) ......... 38,000 1,292,000
Gilead Sciences, Inc. (a) ................. 35,400 1,354,050
Market
Shares Value
------ -----
Common Stocks (continued)
Drugs & Health Care (continued)
Henry Schein, Inc. (a) .................... 11,500 $ 402,500
Omnicare, Inc. ............................ 45,000 1,395,000
Quorum Health Group, Inc. (a) ............. 58,600 1,530,925
St. Jude Medical, Inc. .................... 34,000 1,037,000
Sybron International Corp. (a) ............ 28,000 1,314,250
US Surgical Corp. ......................... 43,000 1,260,437
Vencor, Inc. (a) ........................ 17,000 415,437
-----------
16,934,661
Electrical Equipment -- 0.50%
Anixter International, Inc. (a) ........... 39,000 643,500
Electronics -- 4.19%
Analog Devices, Inc. (a) .................. 34,000 941,375
Maxim Integrated Products, Inc. (a) ....... 33,000 1,138,500
PMC -Sierra, Inc.(a) ...................... 21,000 651,000
Teleflex, Inc. ............................ 42,000 1,585,500
Xilinx, Inc. (a) .......................... 29,000 1,016,812
-----------
5,333,187
Financial Services -- 4.01%
Capital One Financial Corp. ............... 25,800 1,398,038
Corporate Express, Inc. (a) ............... 94,500 1,216,688
FINOVA Group,Inc .......................... 34,000 1,689,375
Newcourt Credit GroupInc .................. 24,000 809,188
-----------
5,113,289
Food & Beverages -- 6.48%
JP Foodservice, Inc. (a) .................. 65,000 2,400,938
Meyer Fred Inc. (a) ....................... 36,000 1,309,500
Outback Steakhouse, Inc. (a) .............. 38,000 1,092,500
Richfood Holdings, Inc. ................... 42,000 1,186,500
Suiza Foods Corp. (a) ..................... 38,000 2,263,375
-----------
8,252,813
Funeral Services -- 0.72%
Stewart Enterprises, Inc. ................. 19,700 918,512
Gas & Pipeline Utilities -- 1.05%
Cooper Cameron Corp. (a) .................. 22,000 1,342,000
Gas Exploration -- 0.95%
Weatherford Enterra, Inc. (a) ............. 27,600 1,207,500
Gold -- 1.63%
Battle Mountain Gold Co. .................. 176,000 1,034,000
Cambior, Inc. ............................. 70,000 411,250
TVX Gold, Inc. (a) ........................ 186,000 627,750
-----------
2,073,000
Hotels & Restaurants -- 0.82%
La Quinta Inns, Inc. ...................... 54,000 1,042,875
See notes to the financial statements.
<PAGE>
T. ROWE PRICE/JNL MID-CAP GROWTH SERIES
SCHEDULE OF INVESTMENTS (continued)
Market
Shares Value
------ -----
Common Stocks (continued)
Industrial Machinery -- 1.78%
TriMas Corp. .............................. 66,000 $ 2,268,750
Insurance -- 3.75%
Ace Ltd. .................................. 19,000 1,833,500
Fairfax Financial Holdings, Ltd. (a)....... 4,900 1,090,375
Partner Re, Ltd. .......................... 40,000 1,855,000
-----------
4,778,875
Investment Companies -- 1.30%
Franklin Resources, Inc. .................. 19,000 1,651,813
Leisure Time -- 1.59%
Royal Carribean Cruises, Ltd. ............. 38,000 2,025,875
Office Furnishings & Supplies -- 0.48%
Ikon Office Solutions, Inc. ............... 22,000 618,750
Petroleum Services -- 2.89%
Camco International, Inc. ................. 22,400 1,426,600
Smith International, Inc. (a) ............. 20,600 1,264,325
United Meridian Corp. (a) ................. 35,300 992,813
-----------
3,683,738
Pollution Control -- 2.49%
Culligan Water Technologies, Inc. (a)...... 39,000 1,959,750
USA Waste Services, Inc. (a) .............. 31,000 1,216,750
-----------
3,176,500
Real Estate --1.93%
INMC Mortgage Holdings, Inc ............... 48,000 1,125,000
Security Capital Group Inc. (a) ........... 41,000 1,332,500
-----------
2,457,500
Retail -- 7.50%
BJ's Wholesale Club Inc. (a) .............. 45,000 1,411,875
Circuit City Stores, Inc. ................. 53,500 1,895,481
Costco Companies, Inc. (a) ................ 35,000 1,561,875
Gymboree Corp. (a) ........................ 54,000 1,478,250
Kohl's Corp. (a) .......................... 17,000 1,158,125
MSC Industrial Direct Co., Inc. (a)....... 28,800 1,220,400
ShopKo Stores, Inc. (a) ................... 38,500 837,375
-----------
9,563,381
Software -- 3.51%
BMC Software, Inc. (a) .................... 15,000 984,375
Intuit, Inc. (a) .......................... 16,000 660,000
Platinum Technology, Inc. (a) ............. 12,000 339,000
Sterling Commerce, Inc. (a) ............... 36,000 1,383,750
Synopsys, Inc. (a) ........................ 31,000 1,108,250
-----------
4,475,375
Market
Shares Value
------ -----
Common Stocks (continued)
Telecommunications -- 3.74%
Cincinnati Bell, Inc ...................... 28,000 $ 868,000
Omnipoint Corp. (a) ....................... 38,000 883,500
Paging Network, Inc. (a) .................. 89,000 956,750
360 Communications Co. (a) ................ 83,000 1,675,563
Vanguard Cellular Systems, Inc. (a)........ 30,000 382,500
-----------
4,766,313
-----------
Total Common Stocks
(cost $97,011,710) .................. 116,777,589
-----------
Principal
Amount
------
Short Term Investments -- 8.35%
U.S. Government Agencies -- 2.68%
Federal Home Loan Mortgage
Corp Discount Notes
4.75%, 01/02/1998..................... $2,033,000 2,032,732
5.52%, 01/16/1998 .................... 172,000 171,604
-----------
2,204,336
Federal National Mortgage
Association
Discount Notes
5.69%, 01/05/1998 .................... 765,000 764,516
5.78%, 01/20/1998 .................... 447,000 445,636
-----------
1,210,152
Money Market Fund -- 0.00%
State Street Global Advisor
Fund, 5.42%, (b) .......................... 488 488
United States Treasury Bills -- 5.67%
5.15%, 01/22/1998 ......................... 130,000 129,610
5.16%, 01/22/1998 ......................... 6,781,000 6,760,590
5.20%, 01/22/1998 ......................... 332,000 330,994
-----------
7,221,194
-----------
Total Short Term Investments
(cost $10,636,170) .................... 10,636,170
-----------
Total Investments -- 100%
(cost $107,647,880)........................ $127,413,759
===========
- --------------------------------------------------------------------------------
(a) Non-income producing security.
(b) Dividend yields change daily to reflect current market conditions. Rate
stated is the quoted yield as of December 31, 1997.
<PAGE>
JNL SERIES TRUST
PART C
OTHER INFORMATION
Note: Items 24-32 have been answered with respect to all 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, 1997
Statements of Operations for the year ended
December 31, 1997
Statements of Changes in Net Assets
for the Period April 1, 1996 to
December 31, 1996, and the year
ended December 31, 1997
Financial Highlights for the Periods
May 15, 1995 through March 31, 1996,
April 1, 1996 to December 31, 1996,
and the year ended December 31, 1997
Notes to Financial Statements
Schedules of Investments at December 31, 1997
(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
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 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) Amendment dated April 18, 1997 to 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. 11 filed with the Securities
and Exchange Commission on October 16, 1997.
(m) Amendment dated April 18, 1997 to 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. 11 filed with the Securities
and Exchange Commission on October 16, 1997.
(n) Sub-Advisory Agreement between Jackson National Financial Services,
Inc. and Putnam Investment Management, Inc. dated April 22, 1997,
incorporated by reference to Registrant's Post-Effective Amendment No.
11 filed with the Securities and Exchange Commission on October 16,
1997.
(o) Amendment dated December 17, 1997 to 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. 12 filed with the Securities
and Exchange Commission on January 16, 1998.
(p) Sub-Advisory Agreement between Jackson National Financial Services,
Inc. and Alliance Capital Management L.P. dated December 17, 1997,
incorporated by reference to Registrant's Post-Effective Amendment No.
12 filed with the Securities and Exchange Commission on January 16,
1998.
(q) Sub-Advisory Agreement between Jackson National Financial Services,
Inc. and Goldman Sachs Asset Management dated December 17, 1997,
attached hereto.
(r) Sub-Advisory Agreement between Jackson National Financial Services,
Inc. and J.P. Morgan Investment Management Inc. dated December 17,
1997, incorporated by reference to Registrant's Post-Effective
Amendment No. 12 filed with the Securities and Exchange Commission on
January 16, 1998.
(s) Sub-Advisory Agreement between Jackson National Financial Services,
Inc. and Lazard Asset Management dated December 17, 1997, incorporated
by reference to Registrant's Post-Effective Amendment No. 12 filed
with the Securities and Exchange Commission on January 16, 1998.
(t) Sub-Advisory Agreement between Jackson National Financial Services,
Inc. and Pacific Investment Management Company dated December 17,
1997, incorporated by reference to Registrant's Post-Effective
Amendment No. 12 filed with the Securities and Exchange Commission on
January 16, 1998.
(u) Amendment dated December 17, 1997 to 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. 12 filed with the
Securities and Exchange Commission on January 16, 1998.
(v) Form of Sub-Advisory Agreement between Jackson National Financial
Services, Inc. and Standard & Poor's Investment Advisory Services,
Inc., incorporated by reference to Registrant's Post-Effective
Amendment No. 12 filed with the Securities and Exchange Commission on
January 16, 1998.
6. (a) Amended Fund Participation Agreement between Registrant, 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. 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 dated April 18, 1997 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.
11 filed with the Securities and Exchange Commission on October 16,
1997.
(d) Fund Participation Agreement between Registrant, Jackson National Life
Insurance Company and Jackson National Separate Account III dated
March 16, 1998, attached hereto.
(e) Amendment dated March 16, 1998 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.
(f) Fund Participation Agreement between Registrant, Jackson National Life
Insurance Company of New York and JNLNY Separate Account I dated March
16, 1998, attached hereto.
7. Not Applicable
8. Custodian Contract between Registrant and State Street Bank and Trust
Company dated September 16, 1996, incorporated by reference to Registrant's
Post-Effective Amendment No. 10 filed with the Securities and Exchange
Commission on April 15, 1997.
9. Transfer Agency and Service Agreement between Registrant State Street Bank
and Trust Company dated September 16, 1996, incorporated by reference to
Registrant's Post-Effective Amendment No. 10 filed with the Securities and
Exchange Commission on April 15, 1997.
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. Not Applicable
18. Not Applicable
Item 25. Persons controlled by or under Common Control with Registrant.
Not Applicable.
Item 26. Number of Holders of Securities.
HOLDERS AS OF
SERIES March 16, 1998
------ --------------
JNL Aggressive Growth Series 3
JNL Capital Growth Series 3
JNL Global Equities Series 3
JNL/Alger Growth Series 3
JNL/Alliance Growth Series 1
JNL/Eagle Core Equity Series 2
JNL/Eagle SmallCap Equity Series 3
JNL/JPM International & Emerging Markets Series 1
JNL/PIMCO Total Return Bond Series 1
JNL/Putnam Growth Series 3
JNL/Putnam Value Equity Series 2
JNL/S&P Conservative Growth Series I 0
JNL/S&P Moderate Growth Series I 0
JNL/S&P Aggressive Growth Series I 0
JNL/S&P Very Aggressive Growth Series I 0
JNL/S&P Equity Only-Growth Series I 0
JNL/S&P Equity Only-Aggressive Growth Series I 0
JNL/S&P Conservative Growth Series II 0
JNL/S&P Moderate Growth Series II 0
JNL/S&P Aggressive Growth Series II 0
JNL/S&P Very Aggressive Growth Series II 0
JNL/S&P Equity Only-Growth Series II 0
JNL/S&P Equity Only-Aggressive Growth Series II 0
Goldman Sachs/JNL Growth & Income Series 1
Lazard/JNL Small Cap Value Series 1
Lazard/JNL Mid Cap Value Series 1
PPM America/JNL Balanced Series 2
PPM America/JNL High Yield Bond Series 3
PPM America/JNL Money Market Series 3
Salomon Brothers/JNL Balanced Series 1
Salomon Brothers/JNL Global Bond Series 3
Salomon Brothers/JNL High Yield Bond Series 1
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.
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 Services" and the
biographical information pertaining to Messrs. Hopping, Meyer, Fritts
and Nerud and Ms. Eisenbeis, contained in the section entitled
"Trustees and Officers of the Trust" of the Statement of Additional
Information.
Alliance Capital Management L.P., Eagle Asset Management, Inc., Fred
Alger Management, Inc., Goldman Sachs Asset Management, Janus Capital
Corporation, J.P. Morgan Investment Management Inc., Lazard Asset
Management, Pacific Investment Management Company, PPM America, Inc.,
Putnam Investment Management, Inc., Salomon Brothers Asset Management
Inc, Salomon Brothers Asset Management Limited, Standard & Poor's
Investment Advisory Services, Inc., 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.
--------
Alliance Capital Management L.P. 801-32361
Eagle Asset Management, Inc. 801-21343
Fred Alger Management, Inc. 801-06709
Goldman Sachs Asset Management 801-16048
Janus Capital Corporation 801-13991
J.P. Morgan Investment Management Inc. 801-21011
Lazard Asset Management 801-6568
Pacific Investment Management Company 801-48187
PPM America, Inc. 801-40783
Putnam Investment Management, Inc. 801-7974
Salomon Brothers Asset Management Inc 801-32046
Standard & Poor's Investment Advisory
Services, Inc. 801-51431
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, 105
Rosemont Road, Westwood, Massachusetts 02090.
Item 31. Management Services.
Not Applicable.
Item 32. Undertakings.
(a) Not Applicable.
(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>
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 27th day of
March, 1998.
JNL SERIES TRUST
By: /s/ Andrew B. Hopping
by Thomas J. Meyer*
-------------------
Andrew B. Hopping
President, CEO and
Trustee
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/ Andrew B. Hopping President, CEO and March 27, 1998
by Thomas J. Meyer* Trustee
- ---------------------------------- ------------------------ ------------------
Andrew B. Hopping
/s/ Joseph Frauenheim Trustee March 27, 1998
by Thomas J. Meyer*
- ---------------------------------- ------------------------ ------------------
Joseph Frauenheim
/s/ Richard McLellan Trustee March 27, 1998
by Thomas J. Meyer*
- ---------------------------------- ------------------------ ------------------
Richard McLellan
/s/ Peter McPherson Trustee March 27, 1998
by Thomas J. Meyer*
- ---------------------------------- ------------------------ ------------------
Peter McPherson
* Attorney In Fact
<PAGE>
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 Andrew B. Hopping, 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/ Andrew B. Hopping 9/12/97
- --------------------------------------- ------------------
Andrew B. Hopping Date
/s/ Robert A. Fritts 9-12-97
- --------------------------------------- ------------------
Robert A. Fritts Date
/s/ Joseph Frauenheim September 15, 1997
- --------------------------------------- ------------------
Joseph Frauenheim Date
/s/ Richard McLellan September 15, 1997
- --------------------------------------- ------------------
Richard McLellan Date
/s/ Peter McPherson Sept 15, 97
- --------------------------------------- ------------------
Peter McPherson Date
<PAGE>
Exhibit List
Exhibit
Number Description
- ------ -----------
5.(q) Sub-Advisory Agreement between Jackson National Financial
Services, Inc. and Goldman Sachs Asset Management dated
December 17, 1997, attached hereto as EX-99.B5q.
6.(d) Fund Participation Agreement between Registrant, Jackson
National Life Insurance Company and Jackson National Separate
Account III dated March 16, 1998, attached hereto as
EX-99.B6d.
6.(e) Amendment dated March 16, 1998 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.B6e.
6.(f) Fund Participation Agreement between Registrant, Jackson
National Life Insurance Company of New York and JNLNY Separate
Account I dated March 16, 1998, attached hereto as EX-99.B6f.
10. Opinion of Blazzard, Grodd & Hasenauer, PC, attached hereto as
EX-99.B10.
11. Consent of Price Waterhouse LLP, attached hereto as EX-99.B11.
EX-99.B5q
INVESTMENT SUB-ADVISORY AGREEMENT
This AGREEMENT is effective this 17th day of December, 1997, by and between
JACKSON NATIONAL FINANCIAL SERVICES, INC., a Delaware Corporation and registered
investment adviser ("Adviser"), and GOLDMAN SACHS ASSET MANAGEMENT, a separate
operating division of Goldman, Sachs & Co., a New York limited partnership and
registered investment adviser ("Sub-Adviser").
WHEREAS, Adviser is the investment manager for the JNL Series Trust (the
"Trust"), an open-end management investment company registered under the
Investment Company Act of 1940, as amended ("1940 Act"); and
WHEREAS, the Trust is authorized to issue separate series, each series
having its own investment objective or objectives, policies and limitations;
WHEREAS, Adviser desires to retain Sub-Adviser as Adviser's agent to
furnish investment advisory services to the series of the Trust listed on
Schedule A hereto ("Fund").
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
1. Appointment. Adviser hereby appoints Sub-Adviser to provide certain
sub-investment advisory services to the Fund for the period and on the
terms set forth in this Agreement. Sub-Adviser accepts such appointment and
agrees to furnish the services herein set forth for the compensation herein
provided.
In the event the Adviser designates one or more series other than the Fund
with respect to which the Adviser wishes to retain the Sub-Adviser to
render investment advisory services hereunder, it shall notify the
Sub-Adviser in writing. If the Sub-Adviser is willing to render such
services, it shall notify the Adviser in writing, whereupon such series
shall become a Fund hereunder, and be subject to this Agreement.
2. Delivery of Documents. Adviser has or will furnish Sub-Adviser with copies
properly certified or authenticated of each of the following:
a) the Trust's Agreement and Declaration of Trust, as filed with the
Secretary of State of The Commonwealth of Massachusetts on June 1,
1994, and all amendments thereto or restatements thereof (such
Declaration, as presently in effect and as it shall from time to time
be amended or restated, is herein called the "Declaration of Trust");
b) the Trust's By-Laws and amendments thereto;
c) resolutions of the Trust's Board of Trustees authorizing the
appointment of Sub-Adviser and approving this Agreement;
d) the Trust's Notification of Registration on Form N-8A under the 1940
Act as filed with the Securities and Exchange Commission (the "SEC")
and all amendments thereto;
e) the Trust's Registration Statement on Form N-1A under the Securities
Act of 1933, as amended ("1933 Act") and under the 1940 Act as filed
with the SEC and all amendments thereto insofar as such Registration
Statement and such amendments relate to the Fund; and
f) the Trust's most recent prospectus and Statement of Additional
Information (collectively called the "Prospectus").
Adviser will furnish the Sub-Adviser from time to time with copies of
all amendments of or supplements to the foregoing, in particular,
amendments to the Prospectus shall be furnished to the Sub-Adviser in
advance to the extent that the Fund is impacted by the Amendment.
3. Management. Subject always to the supervision of Trust's Board of Trustees
and the Adviser, Sub-Adviser will furnish an investment program in respect
of, and make investment decisions for, all assets of the Fund and place all
orders for the purchase and sale of securities, all on behalf of the Fund.
In the performance of its duties, Sub-Adviser will satisfy its fiduciary
duties to the Fund (as set forth below), and will monitor the Fund's
investments, and will comply with the provisions of Trust's Declaration of
Trust and By-Laws, as amended from time to time, and the stated investment
objectives, policies and restrictions of the Fund. Sub-Adviser and Adviser
will each make its officers and employees available to the other from time
to time at reasonable times to review investment policies of the Fund and
to consult with each other regarding the investment affairs of the Fund.
Sub-Adviser will report to the Board of Trustees and to Adviser with
respect to the implementation of such program. Sub-Adviser is responsible
for compliance with the provisions of Section 817(h) of the Internal
Revenue Code of 1986, as amended, applicable to the Fund; however, the
Adviser agrees to inform the Sub-Adviser of any and all applicable state
insurance law restrictions on investments that operate to limit or restrict
the investments the Fund may otherwise make, and to inform the Sub-Adviser
promptly of any changes in such requirements.
The Sub-Adviser further agrees that it:
a) will use the same skill and care in providing such services as it uses
in providing services to fiduciary accounts for which it has
investment responsibilities;
b) will conform with all applicable Rules and Regulations of the
Securities and Exchange Commission in all material respects and in
addition, and to the extent notified as set forth above with respect
to applicable state insurance laws, will conduct its activities under
this Agreement in accordance with any applicable regulations of any
governmental authority pertaining to its investment advisory
activities;
c) will place orders pursuant to its investment determinations for the
Fund either directly with the issuer or with any broker or dealer,
including an affiliated broker-dealer which is a member of a national
securities exchange as permitted in accordance with guidelines
established by the Board of Trustees. In placing orders with brokers
and dealers, the Sub-Adviser will attempt to obtain the best
combination of prompt execution of orders in an effective manner and
at the most favorable price. Consistent with this obligation, when the
execution and price offered by two or more brokers or dealers are
comparable Sub-Adviser may, in its discretion, purchase and sell
portfolio securities to and from brokers and dealers who provide the
Sub-Adviser with research advice and other services. Therefore, the
Sub-Adviser is authorized to consider such services provided to the
Fund and other accounts over which Sub-Adviser or any of its
affiliates exercises investment discretion and to place orders for the
purchase and sale of securities for the Fund with such brokers,
subject to review by the Board of Trustees from time to time with
respect to the extent and continuation of this practice. It is
understood that the services provided by such brokers may be useful to
Sub-Adviser in connection with its services to other clients.
Sub-Adviser may, on occasions when it deems the purchase or sale of a
security to be in the best interests of the Fund as well as its other
clients, aggregate, to the extent permitted by applicable laws and
rules, the securities to be sold or purchased in order to obtain the
most favorable execution and net price. In such event, allocation of
the securities so purchase or sold, as well as the expenses incurred
in the transaction, will be made by Sub-Adviser in the manner it
considers to be the most equitable and consistent with its obligations
to the Fund and to such other clients. Sub-Adviser is not, however,
required to aggregate securities orders. In no instance will portfolio
securities be purchased from or sold to the Adviser, Sub-Adviser or
any affiliated person of either the Trust, Adviser, or Sub-Adviser,
except as may be permitted under the 1940 Act. In addition, joint
repurchase or other accounts may not be utilized by the Fund except to
the extent permitted under any exemptive order obtained by the
Sub-Adviser provided that all conditions of such order are complied
with;
d) will report regularly to Adviser and to the Board of Trustees and will
make appropriate persons available for the purpose of reviewing with
representatives of Adviser and the Board of Trustees on a regular
basis at reasonable times the management of the Fund, including,
without limitation, review of the general investment strategies of the
Fund, the performance of the Fund in relation to standard industry
indices, interest rate considerations and general conditions affecting
the marketplace and will provide various other reports from time to
time as reasonably requested by Adviser;
e) will prepare and maintain such books and records with respect to the
Fund's securities transactions and will furnish Adviser and Trust's
Board of Trustees such periodic and special reports as the Board or
Adviser may request;
f) will act upon instructions from Adviser not inconsistent with the
fiduciary duties hereunder;
g) will treat confidentially and as proprietary information of Trust all
such records and other information relative to Trust 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, provided that the Sub-Adviser may disclose any information
otherwise required to be kept confidential pursuant to this subsection
(i) to it employees, agents, affiliates and counsel on a need-to-know
basis, (ii) to its examiners, auditors or accountants or any other
governmental agency or similar authority exercising jurisdiction over
it, (iii) as may be required by applicable law, legal process or in
connection with any litigation arising out of the subject matter of
this Agreement, and (iv) to the extent that such information is
otherwise made public and such disclosure is not in breach of any
confidentiality restriction; and
h) will vote proxies received in connection with securities held by the
Fund consistent with its fiduciary duties hereunder.
4. Expenses. During the term of this Agreement, Sub-Adviser will pay all
expenses incurred by it in connection with its activities under this
Agreement other than the cost of securities (including taxes, brokerage
commissions and other transaction costs, if any) purchased for the Fund.
5. Books and Records. In compliance with the requirements of Rule 31a-3 under
the 1940 Act, the Sub-Adviser hereby agrees that all records which it
maintains for the Trust are the property of the Trust and further agrees to
surrender promptly to the Trust any of such records upon the Trust's
request. Sub-Adviser further agrees to preserve for the periods prescribed
by Rule 31a-2 under the 1940 Act the records required to be maintained by
Rule 31a-1(b)(5),(6),(7),(9) and (10) under the 1940 Act.
6. Compensation. For the services provided and the expenses assumed pursuant
to this Agreement, Adviser will pay the Sub-Adviser, and the Sub-Adviser
agrees to accept as full compensation therefor, a sub-advisory fee, accrued
daily and payable monthly on the average daily net assets in the Fund or
Funds excluding the net assets representing capital contributed by Jackson
National Life Insurance Company in accordance with Schedule B hereto. From
time to time, the Sub-Adviser may agree to waive or reduce some or all of
the compensation to which it is entitled under this Agreement.
For the purpose of accruing compensation, the net assets of the Fund will
be determined in the manner provided in the then-current prospectus of the
Fund. In the event of termination of this Agreement, all compensation due
to Sub-Adviser through the date of termination will be calculated on a
pro-rated basis through the date of termination and paid on the first
business day after the next succeeding month end.
The Sub-Adviser represents and warrants that in no event shall the
Sub-Adviser provide substantially the same investment advisory services to
any client (excluding any existing proprietary product or client of the
Sub-Adviser or any of its affiliates) comparable to the Fund being managed
under this Agreement at a composite rate of compensation less than that
provided for herein.
7. Services to Others. Adviser understands, and has advised the Trust's Board
of Trustees, that Sub-Adviser now acts, or may in the future act, as an
investment adviser to fiduciary and other managed accounts, and as
investment adviser or sub-investment adviser to other investment companies.
Adviser has no objection to Sub-Adviser acting in such capacities, provided
that whenever the Fund and one or more other investment advisory clients of
Sub-Adviser have available funds for investment, investments selected for
each will be allocated in a manner believed by Sub-Adviser to be equitable
to each. Adviser recognizes, and has advised Trust's Board of Trustees,
that in some cases this procedure may adversely affect the size of the
position that the participating Fund may obtain in a particular security.
Adviser and Board of Trustees also understand that Sub-Adviser and its
affiliates may give advice and take action with respect to any of its other
clients or for its own account which may differ from the timing or nature
of action taken by Sub-Adviser with respect to the Fund. Nothing in this
Agreement imposes upon Sub-Adviser any obligation to purchase or sell or to
recommend for purchase or sale, with respect to the Fund, any security
which Sub-Adviser or its partners, officers, employees or affiliates may
purchase or sell for its or their own account(s) or for the account of any
other client. In addition, Adviser understands, and has advised Trust's
Board of Trustees, that the persons employed by Sub-Adviser to assist in
Sub-Adviser's duties under this Agreement will not devote their full time
to such service and nothing contained in this Agreement will be deemed to
limit or restrict the right of Sub-Adviser or any of its affiliates to
engage in and devote time and attention to other businesses or to render
services of whatever kind or nature.
8. Standard of Care and Limitation of Liability. The Sub-Adviser shall
exercise its best judgment and shall act in good faith in rendering the
services pursuant to this Agreement.
Sub-Adviser, its officers, partners, managing directors, employees, agents
or affiliates ("associated persons") will not be subject to any liability
to the Adviser or the Fund or their trustees, directors, officers,
employees, agents or affiliates for any error of judgment or mistake of law
or for any loss suffered by the Fund in connection with the performance of
Sub-Adviser's duties under this Agreement or as a result of the failure by
the Adviser, or any of its affiliates, to comply with this Agreement and/or
any applicable insurance laws and rules, except for a loss resulting from
Sub-Adviser's willful misfeasance, bad faith, or gross negligence in the
performance of its duties or by reason of its reckless disregard of its
obligations and duties under this Agreement.
9. Indemnification. Notwithstanding Section 8 of this Agreement, the
Sub-Adviser agrees to indemnify and hold harmless the Adviser, any
affiliated person of the Adviser, and each person, if any, who, within the
meaning of Section 15 of the 1933 Act, controls ("controlling person") the
Adviser (all of such persons being referred to as "Adviser Indemnified
Persons") against any and all losses, claims, damages, liabilities, or
litigation (including reasonable legal and other expenses) to which an
Adviser Indemnified Person may become subject under the 1933 Act, 1940 Act,
the Investment Advisers Act of 1940, 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 and to the Trust which (1) may
be based upon any misfeasance, malfeasance, or nonfeasance by the
Sub-Adviser, any of its employees or representatives, or any affiliate of
or any person acting on behalf of the Sub-Adviser, (2) may be based upon a
failure to comply with Section 3 of this Agreement, or (3) may be based
upon any untrue statement or alleged untrue statement of a material fact
contained in the Prospectus, or any amendment or supplement thereto, or the
omission or alleged omission to state therein a material fact known or
which should have been 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 Trust, or any affiliated person of the
Adviser or Trust by the Sub-Adviser or any affiliated person of the
Sub-Adviser; provided, however, that in no case shall the indemnity 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.
The Adviser hereby indemnifies, defends and protects Sub-Adviser and holds
Sub-Adviser and its associated persons harmless from and against any and
all losses, claims, damages, liabilities or litigation (including
reasonable legal and other expenses) arising out of any breach by Adviser
of any representation or agreement contained in this Agreement (including
any failure by the Adviser to apprise Sub-Adviser of any changes in any
applicable state insurance laws and rules).
10. Duration and Termination. This Agreement will become effective as to a Fund
upon execution or, if later, on the date that initial capital for such Fund
is first provided to it and, unless sooner terminated as provided herein,
will continue in effect for two years from such date. Thereafter, if not
terminated as to a Fund, this Agreement will continue in effect as to a
Fund for successive periods of 12 months, provided that such continuation
is specifically approved at least annually by the Trust's Board of Trustees
or by vote of a majority of the outstanding voting securities of such Fund,
and in either event approved also by a majority of the Trustees of the
Trust who are not interested persons of the Trust, or of the Adviser, or of
the Sub-Adviser. Notwithstanding the foregoing, this Agreement may be
terminated as to a Fund at any time, without the payment of any penalty, on
sixty days' written notice by the Trust or Adviser, or on sixty days'
written notice by the Sub-Adviser. This Agreement will immediately
terminate in the event of its assignment. (As used in this Agreement, the
terms "majority of the outstanding voting securities", "interested persons"
and "assignment" have the same meanings of such terms in the 1940 Act.)
11. Amendment of this Agreement. No provision of this Agreement may be changed,
waived, discharged or terminated orally; but only by an instrument in
writing signed by the party against which enforcement of the change,
waiver, discharge or termination is sought.
12. Notice. Any notice under this Agreement shall be in writing, addressed and
delivered or mailed, postage prepaid, to the other party at such address as
such other party may designate for the receipt of such notice.
13. Reference to Sub-Adviser. Neither Adviser nor the Trust will publish or
distribute any information, including but not limited to registration
statements, advertising or promotional material, regarding the provision of
investment advisory services by Sub-Adviser pursuant to this Agreement, or
use in advertising, publicity or otherwise the name of Sub-Adviser or any
of its affiliates, or any trade name, trademark, trade device, service
mark, symbol or any abbreviation, contraction or simulation thereof of
Sub-Adviser or its affiliates without the prior written consent of
Sub-Adviser. Notwithstanding the foregoing, Adviser may distribute
information regarding the provision of investment advisory services by
Sub-Adviser to the Trust's Board of Trustees ("Board Materials") without
the prior written consent of Sub-Adviser.
14. Miscellaneous. The captions in this Agreement are included for convenience
of reference only and in no way define or delimit any of the provisions
hereof or otherwise affect their construction or effect. If any provision
of this Agreement is held or made invalid by a court decision, statute,
rule or otherwise, the remainder of this Agreement will be binding upon and
shall inure to the benefit of the parties hereto.
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 the Trust personally, but bind only the assets of the
Trust, and persons dealing with the Fund must look solely to the assets of
the Trust belonging to such Fund for the enforcement of any claims against
Trust. Sub-Adviser and its affiliates will not, without the prior written
consent of Adviser, solicit for employment, or hire or retain as a
consultant, representative, agent or adviser, any person who is now
employed by or acting as a representative or agent for Adviser or Adviser's
affiliates (including, without limitation, Jackson National Life
Distributors, Inc.)
The business unit within Sub-Adviser responsible for sub-advisory
relationships will not, without the prior written consent of Adviser,
solicit for employment, initiate a recommendation of employment or hire or
retain as a consultant, representative, agent or adviser, any person who is
now employed by or acting as a representative or agent for Adviser or
Adviser's affiliates (including, without limitation, Jackson National Life
Distributors, Inc.)
15. Representations and Warranties of the Sub-Adviser.
The Sub-Adviser hereby represents that this Agreement does not violate
any existing agreements between the Sub-Adviser and any other party.
The Sub-Adviser further represents and warrants that it is a duly
registered investment adviser under the Investment Advisers Act of
1940, as amended and has provided to the Adviser a copy of its most
recent Form ADV as filed with the Securities and Exchange Commission.
The Sub-Adviser further represents that is has reviewed the
post-effective amendment to the Registration Statement for the Trust
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 or information
relating, directly or indirectly, to 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.
16. Applicable Law. This Agreement shall be construed in accordance with
applicable federal law and the laws of the Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the Adviser and the Sub-Adviser have caused this
Agreement to be executed as of this 17th day of December, 1997.
JACKSON NATIONAL FINANCIAL
SERVICES, INC.
By: /s/ Andrew B. Hopping
--------------------------
Name: Andrew B. Hopping
--------------------------
Title: President
--------------------------
GOLDMAN SACHS ASSET MANAGEMENT,
a separate operating
division of Goldman, Sachs & Co.
By: Goldman, Sachs & Co.
By: /s/ David B. Ford
--------------------------
Name: David B. Ford
--------------------------
Title: Partner
--------------------------
<PAGE>
SCHEDULE A
(Fund)
Goldman Sachs/JNL Growth & Income Series
<PAGE>
SCHEDULE B
(Compensation)
Goldman Sachs/JNL Growth & Income Series
Average Daily Net Assets Annual Rate
----------------------------------------------
0 to $50 Million: .50%
$50 Million to $200 Million: .45%
$200 Million to $350 Million: .40%
Amounts over $350 Million: .35%
EX-99.B6d
FUND PARTICIPATION AGREEMENT
THIS FUND PARTICIPATION AGREEMENT, made on this the 16th day of March, 1998
among JNL Series Trust (the "Trust"), a business trust organized under the laws
of the Commonwealth of Massachusetts, and Jackson National Life Insurance
Company (the "Company"), a life insurance company organized under the laws of
the State of Michigan, on behalf of itself and on behalf of Jackson National
Separate Account III ("Separate Account"), a separate account of the Company
existing pursuant to the Michigan Insurance Code.
WITNESSETH:
WHEREAS, the Trust is an open-end management investment company which is
divided into various investment series ("Series"), each Series being subject to
separate investment objectives and restrictions. (See Exhibit A for available
Series); and
WHEREAS, the Trust's shares may be offered to variable annuity and variable
life insurance separate accounts of insurance companies, which may or may not be
affiliated persons of each other ("Participating Insurers"), pursuant to fund
participation agreements substantially identical to this Agreement; and
WHEREAS, the Company, by resolution, has established the Separate Account
on its books of account for the purpose of funding certain variable contracts
("Contracts"); and
WHEREAS, the Separate Account, registered with the Securities and Exchange
Commission as a unit investment trust under the Investment Company Act of 1940
("1940 Act"), is divided into various "Portfolios" under which the income, gains
and losses, whether or not realized, from assets allocated to each such
Portfolio are, in accordance with the Contracts, credited to or charged against
such Portfolio without regard to any other income, gains or losses of other
Portfolios or separate accounts or of the Company; and
WHEREAS, the Separate Account desires to purchase shares of the Trust; and
WHEREAS, the Trust agrees to make its shares available to serve as
underlying investment media for the various Portfolios of the Separate Account
with each Series of the Trust serving as the underlying investment medium for
the corresponding Portfolio of the Separate Account; and
WHEREAS, the Trust has undertaken that its Board of Trustees ("Board") will
monitor the Trust for the existence of any material irreconcilable conflicts
that may arise between the contract owners of separate accounts of insurance
companies that invest in the Trust for the purpose of identifying and remedying
any such conflict;
NOW, THEREFORE, in consideration of the foregoing and of mutual covenants
and conditions set forth herein and for other good and valuable consideration,
the Trust and the Company (on behalf of itself and the Separate Account) hereby
agree as follows:
ARTICLE I
Sale of Trust Shares
1.1 The Contracts funded by the Separate Account will provide for the
allocation of net amounts among the various Portfolios of the Separate Account
for investment in the shares of the particular Series of the Trust underlying
each Portfolio. The selection of a particular Portfolio is to be made (and such
selection may be changed) in accordance with the terms of the Contract.
1.2 Trust shares to be made available to the respective Portfolios of the
Separate Account shall be sold by each of the respective Series of the Trust and
purchased by the Company for that Portfolio at the net asset value next computed
after receipt of each order, as established in accordance with the provisions of
the then current prospectus of the Trust. Shares of a particular Series of the
Trust shall be ordered in such quantities and at such times as determined by the
Company to be necessary to meet the requirements of those Contracts having
amounts allocated to the Portfolio for which the Trust Series shares serve as
the underlying investment medium. Orders and payments for shares purchased will
be sent promptly to the Trust and will be made payable in the manner established
from time to time by the Trust for the receipt of such payments. Notwithstanding
the foregoing, the Board of the Trust may refuse to sell shares of any Series to
any person or suspend or terminate the offering of shares of any Series if such
action is required by law or by regulatory authority having jurisdiction over
the Trust or is, in the sole discretion of the Board acting in good faith and in
light of its fiduciary duties under federal and any applicable state laws,
necessary in the best interests of the shareholders of such Series.
1.3 The Trust will redeem the shares of the various Series when requested
by the Company on behalf of the corresponding Portfolio of the Separate Account
at the net asset value next computed after receipt of each request for
redemption, as established in accordance with the provisions of the then current
prospectus of the Trust. The Trust will make payment in the manner established
from time to time by the Trust for the receipt of such redemption requests, but
in no event shall payment be delayed for a greater period than is permitted by
the 1940 Act.
1.35 For purposes of paragraphs 1.2 and 1.3 hereinabove, the Company shall
be the agent of the Trust for the receipt of (1) orders to purchase, and (2)
requests to redeem, shares of the Series of the Trust on behalf of the Separate
Account, and receipt of such orders and requests by such agent shall constitute
receipt thereof by the Trust, provided that the Trust receives actual notice of
such order or request by 12:00 noon (at the Trust's offices) on the next
following Business Day. "Business Day" shall mean any day on which the New York
Stock Exchange is open for trading and on which the Trust calculates its net
asset value pursuant to the rules of the Securities and Exchange Commission.
1.4 Transfer of the Trust's shares will be by book entry only. No stock
certificates will be issued to the Separate Account. Shares ordered from a
particular Series of the Trust will be recorded in an appropriate title for the
corresponding Portfolio of the Separate Account.
1.5 The Trust shall furnish same day notice to the Company of any dividend
or distribution payable on its shares. All of such dividends and distributions
as are payable on each of the Series shares in the title for the corresponding
Portfolio of the Separate Account shall be automatically reinvested in
additional shares of that Series of the Trust. The Trust shall notify the
Company of the number of shares so issued.
1.6 The Trust shall make the net asset value per share of each Series
available to the Company on a daily basis as soon as reasonably practical after
the net asset value per share is calculated and shall use its best efforts to
make such net asset value per share available by 6:00 p.m. Eastern Time.
ARTICLE II
Sales Material and Information
2.1 The Company shall furnish to the Trust each piece of sales literature
or other promotional material in which the Trust or its investment adviser is
named at least ten business days prior to its use. No such material shall be
used if the Trust objects to such use within five business days after receipt of
such material.
2.2 The Company shall not give any information or make any representations
or statements on behalf of the Trust or concerning the Trust in connection with
the sale of the Contracts other than the information or representations
contained in the registration statement or prospectus for the Trust shares, as
such documents may be amended or supplemented from time to time, or in reports
or proxy statements for the Trust, or in sales literature or other promotional
material approved by the Trust, except with the permission of the Trust.
2.3 The Trust shall furnish to the Company each piece of sales literature
or other promotional material in which the Company or the Separate Account is
named at least ten business days prior to its use. No such material shall be
used if the Company objects to such use within five business days after receipt
of such material.
2.4 The Trust shall not give any information or make any representations on
behalf of the Company or concerning the Company, the Separate Account, or the
Contracts other than the information or representations contained in the
registration statement or prospectus for the Contracts, as such registration
statement and prospectus may be amended or supplemented from time to time, or in
published reports for the Separate Account which are in the public domain or
approved by the Company for distribution to Contract owners, or in sales
literature or other promotional material approved by the Company, except with
the permission of the Company.
2.5 The Trust will provide to the Company at least one complete copy of all
registration statements, prospectuses, statements of additional information,
reports, proxy statements, sales literature and other promotional materials,
applications for exemptions, requests for no-action letters, and all amendments
to any of the above that relate to the Trust or its shares, contemporaneously
with the filing of such document with the Securities and Exchange Commission or
other regulatory authorities.
2.6 The Company will provide to the Trust at least one complete copy of all
registration statements, prospectuses, statements of additional information,
reports, solicitations for voting instructions, sales literature and other
promotional materials, applications for exemptions, requests for no-action
letters, and all amendments to any of the above, that relate to the Contracts or
the Separate Account, contemporaneously with the filing of such documents with
the Securities and Exchange Commission or other regulatory authorities.
2.7 For purposes of this Article II, the phrase "sales literature or other
promotional material" includes, but is not limited to, advertisements (such as
material published, or designed for use in, a newspaper, magazine, or other
periodical, radio, television, telephone or tape recording, videotape display,
signs or billboards, motion pictures, or other public media), sales literature
(i.e., any written communication distributed or made generally available to
customers or the public, including brochures, circulars, research reports,
market letters, form letters, seminar texts, reprints or excerpts of any other
advertisement, sales literature, or published article), educational or training
materials or other communications distributed or made generally available to
some or all agents or employees, and registration statements, prospectuses,
statements of additional information, shareholder reports, and proxy materials.
ARTICLE III
Expenses
3.1 The Trust shall pay no fee or other compensation to the Company under
this Agreement. All expenses incident to performance by the Trust under this
Agreement shall be paid by the Trust. The Trust shall bear the expenses for: the
cost of registration of the Trust's shares; preparation and filing of the
Trust's prospectus and registration statement; preparation and filing of proxy
materials and reports; setting the prospectus in type; setting in type the proxy
materials and reports to shareholders; the preparation of all statements and
notices required of the Trust by any federal or state law; and all taxes on the
issuance or transfer of the Trust's shares.
3.2 The Trust's prospectus shall state that the statement of additional
information for the Trust is available from the Trust, and the Trust, at its
expense, shall provide such statement free of charge to the Company and to any
Contract owner or prospective Contract owner who requests such statement.
3.3 The Trust, at its expense, shall provide the Company with copies of its
proxy material, reports to stockholders and other communications to stockholders
in such quantity as the Company shall reasonably require for distributing to
Contract owners.
ARTICLE IV
Voting
4.1 The Company shall provide pass-through voting privileges to all
Contract owners so long as the Securities and Exchange Commission continues to
interpret the 1940 Act to require pass-through voting privileges for variable
contract owners. The Company shall be responsible for assuring that the Separate
Account calculates voting privileges in a manner consistent with standards
provided by the Trust, which standards will also be provided to other
Participating Insurers. To the extent required by law, the Company will vote
shares for which it has not received voting instructions as well as shares
attributable to the Company in the same proportion as it votes shares for which
it has received instructions.
4.2 The Trust will comply with all provisions of the 1940 Act requiring
voting by shareholders and, in particular, the Trust will either provide for
annual meetings or comply with Section 16(c) of the 1940 Act (although the Trust
is not one of the trusts described in Section 16(c) of that Act) as well as with
Sections 16(a) and, if and when applicable, 16(b). Further, the Trust will act
in accordance with the Securities and Exchange Commission's interpretation of
the requirements of Section 16(a) with respect to periodic elections of
directors and with whatever rules the Commission may promulgate with respect
thereto.
ARTICLE V
Potential Conflicts
5.1 The Board of the Trust will monitor the Trust for the existence of any
material irreconcilable conflict between the interests of the contract owners of
all separate accounts investing in the Trust. The Company will report to the
Board any potential or existing conflicts of which it is or becomes aware
between any of its Contract owners, or between any of its Contract owners and
contract owners of other Participating Insurers. The Company will be responsible
for assisting the Board in carrying out its responsibilities to identify and
resolve material conflicts by providing the Board with all information available
to it that is reasonably necessary for the Board to consider any issues raised,
including information as to a decision by the Company to disregard voting
instructions of its Contract owners.
5.2 The Board's determination of the existence of any irreconcilable
material conflict and its implications shall be made known promptly by it to the
Company and other Participating Insurers. An irreconcilable material conflict
may arise for a variety of reasons, including: (a) an action by any state
insurance regulatory authority; (b) a change in applicable federal or state
insurance tax, or securities laws or regulations, or a public ruling, private
letter ruling, or any similar action by insurance, tax, or securities regulatory
authorities; (c) an administrative or judicial decision in any relevant
proceeding; (d) the manner in which the investments of any Series are being
managed; (e) a difference in voting instructions given by variable annuity
contract owners and variable life insurance contract owners or by contract
owners of different Participating Insurers; or (f) a decision by a Participating
Insurer to disregard the voting instructions of its variable contract owners.
5.3 If it is determined by a majority of the Board or a majority of its
disinterested Trustees that a material irreconcilable conflict exists that
affects the interests of the Contract owners, the Company shall, to the extent
reasonably practicable (as determined by a majority of the Trust's disinterested
Trustees), take whatever steps are necessary to remedy or eliminate the
irreconcilable material conflict, which steps could include: (a) withdrawing the
assets allocable to the Separate Account from the Trust or any Series and
reinvesting such assets in a different investment medium, including another
Series of the Trust, or participating in the submission of the question of
whether such segregation should be implemented to a vote of all affected
contract owners and, as appropriate, segregating the assets of any particular
group (e.g. annuity contract owners or life insurance contract owners) that
votes in favor of such segregation, or offering to the affected contract owners
the option of making such a change; and (b) establishing a new registered
management investment company or managed separate account. The Company shall
take such steps at its expense if the conflict affects solely the interests of
the owners of the Company's Contracts, but shall bear only its equitable portion
of any such expense if the conflict also affects the interests of the contract
owners of one or more Participating Insurers other than the Company, provided:
that this sentence shall not be construed to require the Trust to bear any
portion of such expense. If a material irreconcilable conflict arises because of
the Company's decision to disregard Contract owner voting instructions and that
decision represents a minority position or would preclude a majority vote, the
Company may be required, at Trust's election, to withdraw the investment of the
Separate Account in the Trust, and no charge or penalty will be imposed as a
result of such a withdrawal. The Company agrees to take such remedial action as
may be required under this paragraph 5.3 with a view only to the interests of
its Contract owners. For purposes of this paragraph 5.3, a majority of the
disinterested members of the Trust's Board shall determine whether or not any
proposed action adequately remedies any irreconcilable conflict, but in no event
will Trust be required to establish a new funding medium for any variable
contract. The Company shall not be required by this paragraph 5.3 to establish a
new funding medium if any offer to do so has been declined by vote of a majority
of contract owners materially and adversely affected by the irreconcilable
material conflict.
Notwithstanding the foregoing, if the Company is required under this
paragraph 5.3 to withdraw the investment of the Separate Account in the Trust,
such withdrawal may take place within six (6) months after the Trust gives
written notice that this paragraph 5.3 is being implemented, provided: That the
Trust may require that such withdrawal must take place within a shorter period
of time after such notice if a majority of the disinterested members of the
Trust's Board determines that such shorter period is necessary to avoid
irreparable harm to its shareholders; and further provided: That until the end
of such six month (or shorter) period the Trust shall continue to accept and
implement orders by the Company for the purchase and redemption of Trust Shares.
The Company will not be required to withdraw investments in the Separate Account
of the Trust until all regulatory approval is obtained.
5.4 In discharging its responsibilities under this Article V, the Company
will cooperate and coordinate, to the extent necessary, with the Board and with
other Participating Insurers.
5.5 If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or a
subsequent Rule 6e-3 is adopted, to provide exemptive relief from any provision
of the Act or the rules promulgated thereunder with respect to mixed or shared
funding on terms and conditions materially different from those contained in the
Trust's mixed and shared funding order then the Trust or the Participating
Insurers, as appropriate, shall take such steps as may be necessary to comply
with Rules 6e-2 and 6e-3(T), and related Rules as amended, to the extent such
rules are applicable.
ARTICLE VI
Representations and Warranties
6.1 The Company represents and warrants that the Contracts are or will be
registered under the Securities Act of 1933 ("1933 Act"), that the Contracts
will be issued and sold in compliance in all material respects with all
applicable federal and state laws, and that the sale of the Contracts shall
comply in all material respects with state insurance suitability requirements.
The Company further represents and warrants that it is an insurance company duly
organized and in good standing under applicable laws and that it has legally and
validly established the Separate Account prior to any issuance or sale thereof
as a segregated asset account under the Michigan Insurance Code and has
registered or, prior to any issuance or sale of the Contracts, will register the
Separate Account as a unit investment trust in accordance with the provisions of
the 1940 Act to serve as a segregated investment account for the Contracts.
6.2 The Trust represents and warrants that Trust shares sold pursuant to
this Agreement shall be registered under the 1933 Act, shall be duly authorized
for issuance and sold in compliance with the laws of the State of Massachusetts
and all applicable federal and state securities laws and that the Trust is and
shall remain registered under the 1940 Act. The Trust shall amend the
Registration Statement for its shares under the 1933 Act and the 1940 Act from
time to time as required in order to effect the continuous offering of its
shares. The Trust represents that it is lawfully organized and validly existing
under the laws of the State of Massachusetts and that it does and will comply in
all material respects with the 1940 Act.
6.3 The Trust represents and warrants that it intends to qualify each of
its Series as a Regulated Investment Company under Subchapter M of the Internal
Revenue Code, as amended, (the "Code") and that it will make every effort to
maintain such qualification (under Subchapter M or any successor or similar
provision) and that it will notify the Company immediately upon having a
reasonable basis for believing that any such Series may not so qualify in the
future.
6.4 The Trust represents and warrants that it will at all times invest
money from the Contracts in such a manner as to ensure that the Contracts will
be treated as variable contracts under the Code and the regulations issued
thereunder. Without limiting the scope of the foregoing, the Trust will at all
times comply with Section 817(h) of the Code and the Regulations thereunder,
relating to the diversification requirements for annuity, endowment, or life
insurance contracts and any amendments or other modifications to such Section or
Regulation.
6.5 The Company represents that the Contracts are to be treated as annuity,
endowment, or life insurance contracts, under applicable provisions of the Code,
and that it will make every effort to maintain such treatment and that it will
notify the Trust immediately upon having a reasonable basis for believing that
the Contracts have ceased to be so treated or that they might not be so treated
in the future.
6.6 The Trust makes no representation as to whether any aspect of its
operations (including, but not limited to, fees and expenses and investment
policies) complies with the insurance laws or regulations of the various states
except that the Trust represents that its investment policies, fees and expenses
are and shall at all times remain in compliance with the laws of the State of
Massachusetts and the Trust represents that its operations are and shall at all
times remain in material compliance with the 1940 Act.
6.7 The Trust represents and warrants that all of its Trustees, officers,
employees, investment advisers, and other persons dealing with the money or
securities of the Trust are and shall continue to be at all times covered by a
blanket fidelity bond or similar coverage for the benefit of the Trust in an
amount not less that the minimal coverage as required currently by Section 17(g)
of the 1940 Act or related provisions as may be promulgated from time to time.
The aforesaid bond shall include coverage for larceny and embezzlement and shall
be issued by a reputable bonding company.
6.8 The Company represents and warrants that all of its directors,
officers, employees, and other persons who are directly dealing with the money
or securities of the Trust are and shall continue to be at all times covered by
a blanket fidelity bond or similar coverage in amounts which shall comply with
Rule 17g-1 under the 1940 Act.
6.9 The Trust represents and warrants that shares of the Trust will be sold
only to Participating Insurers and their separate accounts or to qualified plans
as permitted under section 817(h) of the Code. No shares of any Series will be
sold to the general public. The Trust further represents and warrants that it
will not sell Trust shares to any insurance company or separate account except
pursuant to an agreement containing provisions substantially the same as those
contained in Articles IV and V of this Agreement governing voting rights and
conflicts of interest, respectively.
6.10 The Company represents and warrants that it will make reasonable
efforts to market those Contracts it determines from time to time to offer for
sale and, although it is not required to offer for sale new Contracts in all
cases, will accept payments and otherwise service existing Contracts funded in
the Separate Account. No representation is made as to the number or amount of
such Contracts to be sold.
ARTICLE VII
Indemnification
7.1 The Company agrees to indemnify and hold harmless the Trust and each of
the Trust's Trustees and officers and each person, if any, who controls the
Trust within the meaning of Section 15 of the 1933 Act against any and all
losses, claims, damages, liabilities or litigation (including legal and other
expenses), arising out of the acquisition of any shares of the Trust by any
person, to which the Trust or such Trustees, officers or controlling person may
become subject under the 1933 Act, under any other statute, at common law or
otherwise, which (i) may be based upon any wrongful act by the Company, any of
its employees or representatives, any affiliate of or any person acting on
behalf of the Company or a principal underwriter of its insurance products, or
(ii) may be based upon any untrue statement or alleged untrue statement of a
material fact contained in a registration statement or prospectus covering
shares of the Trust or any amendment thereof or supplement thereto or the
omission or alleged omission to state therein a material fact 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 Trust by the Company, or (iii) may be based on any untrue statement or
alleged untrue statement of a material fact contained in a registration
statement or prospectus covering the Contracts, or any amendments or supplement
thereto, or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statement or statements
therein not misleading, unless such statement or omission was made in reliance
upon information furnished to the Company or such affiliate by or on behalf of
the Trust; provided, however, that in no case (i) is the Company's indemnity in
favor of a Trustee or officer or any other person deemed to protect such Trustee
or officer or other person against any liability to which any such person would
otherwise be subject by reason of willful misfeasance, bad faith, or gross
negligence in the performance of his or her duties or by reason of his or her
reckless disregard of obligations and duties under this Agreement or (ii) is the
Company to be liable under its indemnity agreement contained in this Paragraph
7.1 with respect to any claim made against the Trust or any person indemnified
unless the Trust or such person, as the case may be, shall have notified the
Company in writing pursuant to Paragraph 10 of this Agreement within a
reasonable time after the summons or other first legal process giving
information of the nature of the claims shall have been served upon the Trust or
upon such person (or after the Trust or such person shall have received notice
of such service on any designated agent), but failure to notify the Company of
any such claim shall not relieve the Company from any liability which it has to
the Trust or any person against whom such action is brought otherwise than on
account of its indemnity agreement contained in this Paragraph 7.1. The Company
shall be entitled to participate, at its own expense, in the defense, or, if it
so elects, to assume the defense of any suit which could result in liability to
it under this Paragraph 7.1, but, if it elects to assume the defense, such
defense shall be conducted by counsel chosen by it and satisfactory to the Trust
and to such of its officers, Trustees and controlling person or persons as may
be defendants in the suit. In the event that the Company elects to assume the
defense of any such suit and retain such counsel, the Trust, such officers,
Trustees and controlling person or persons shall bear the fees and expenses of
any additional counsel retained by them, but, in case the Company does not elect
to assume the defense of any such suit, the Company will reimburse the Trust,
such officers, Trustees and controlling person or persons for the reasonable
fees and expenses of any counsel retained by them. The Company agrees promptly
to notify the Trust pursuant to Paragraph 10 of this Agreement of the
commencement of any litigation or proceedings against it in connection with the
issue and sale of any shares of the Trust.
7.2 The Trust agrees to indemnify and hold harmless the Company and its
affiliated principal underwriter of the Contracts and each of the Company's
Directors and officers and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act against any and all losses, claims,
damages, liabilities or litigation (including legal and other expenses) to which
it or such directors, officers or controlling person may become subject under
the 1933 Act, under any other statute, at common law or otherwise, arising out
of the acquisition of any shares of the Trust by any person which (i) may be
based upon any wrongful act by the Trust or any of its employees or
representatives, or (ii) may be based upon any untrue statement or alleged
untrue statement of a material fact contained in a registration statement or
prospectus covering shares of the Trust or any amendment thereof or supplement
thereto or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading unless such statement or omission was made in reliance upon
information furnished to the Trust by the Company, or (iii) may be based on any
untrue statement or alleged untrue statement of a material fact contained in a
registration statement or prospectus covering the Contracts, or any amendment or
supplement thereto, or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statement
or statements therein not misleading, if such statement or omission was made in
reliance upon information furnished to the Company by or on behalf of the Trust;
provided, however, that in no case (i) is the Trust's indemnity in favor of a
Director or officer or any other person deemed to protect such Director or
officer or other person against any liability to which any such person would
otherwise be subject by reason of willful misfeasance, bad faith, or gross
negligence in the performance of his or her duties or by reason of his or her
reckless disregard of obligations and duties under this Agreement or (ii) is the
Trust to be liable under its indemnity agreement contained in this Paragraph 7.2
with respect to any claims made against the Company or any such Director,
officer or controlling person unless it, Director, officer or controlling
person, as the case may be, shall have notified the Trust in writing pursuant to
Paragraph 10 of this Agreement within a reasonable time after the summons or the
first legal process giving information of the nature of the claim shall have
been served upon it or upon such Director, officer or controlling person (or
after the Company or such Director, officer or controlling person shall have
received notice of such service on any designated agent), but failure to notify
the Trust of any claim shall not relieve it from any liability which it may have
to the person against whom such action is brought otherwise than on account of
its indemnity agreement contained in this Paragraph 7.2. The Trust will be
entitled to participate, at its own expense, in the defense, or, if it so
elects, to assume the defense of any suit which could result in liability to it
under this Paragraph 7.2, but, if the Trust elects to assume the defense, such
defense shall be conducted by counsel chosen by it and satisfactory to the
Company and to such of its Directors, officers and controlling person or persons
as may be defendants in the suit. In the event that the Trust elects to assume
the defense of any such suit and retain such counsel, the Company, such
Directors, officers and controlling person or persons shall bear the fees and
expenses of any additional counsel retained by them, but, in case the Trust does
not elect to assume the defense of any such suit, it will reimburse the Company,
such Directors, officers and controlling person or persons for the reasonable
fees and expenses of any counsel retained by them. The Trust agrees promptly to
notify the Company pursuant to Paragraph 10 of this Agreement of the
commencement of any litigation or proceedings against it or any of its officers
or Trustees in connection with the issue and sale of any of its shares.
ARTICLE VIII
Confidentiality
8. Subject to the requirements of legal process and regulatory authority,
each party shall treat as confidential all information reasonably identified as
confidential in writing by any other party hereto and, except as permitted by
this Agreement, shall not disclose, disseminate or utilize confidential
information without the express written consent of the affected party until such
time as it may come into the public domain.
<PAGE>
ARTICLE IX
Termination
9.1 This Agreement shall terminate:
(a) at the option of the Company or the Trust upon 90 days' advance
written notice to all other parties to this Agreement, provided,
however, such notice shall not be given earlier than twenty four
months following the date of this Agreement; or
(b) at the option of the Company if any of the Trust's shares are not
reasonably available to meet the requirements of the Contracts
funded in the Separate Account as determined by the Company; or
(c) at the option of any party to this Agreement upon institution of
formal proceedings against any other party to this Agreement by
the Securities and Exchange Commission or any other regulatory
body; or
(d) upon the vote of Contract owners having an interest in a
particular Portfolio of the Separate Account. The Company will
give 30 days' prior written notice to the Trust of the date of
any proposed action to replace the Trust's shares; or
(e) at the option of the Company if the Trust's shares are not
registered, issued or sold in accordance with applicable state
and/or federal law or such law precludes the use of such shares
as the underlying investment medium of the Contracts funded in
the Separate Account; or
(f) at the option of the Company if any Series of the Trust ceases to
qualify as a Regulated Investment Company under Subchapter M of
the Code or under any successor similar provision, or if the
Company reasonably believes that any Series of the Trust may fail
to so qualify; or
(g) at the option of the Company if any Series of the Trust fails to
meet the diversification requirements specified in paragraph 6.4
hereof.
9.2 Prompt notice of election to terminate under subparagraphs (b), (c),
(e), (f) and (g) of paragraph 9.1 shall be furnished by the electing party.
9.3 Notwithstanding any termination of this Agreement, the Trust shall, at
the option of the Company, continue to make available additional shares of the
Trust pursuant to the terms and conditions of this Agreement for all Contracts
in effect on the effective date of termination of this Agreement (hereinafter
referred to as "Existing Contracts"). Specifically, without limitation, the
owners of the Existing Contracts shall be permitted to reallocate investments in
the Trust, redeem investments in the Trust or invest in the Trust upon the
making of additional purchase payments under the Existing Contracts. The parties
agree that this paragraph 9.3 shall not apply to any terminations under Article
V and the effect of such Article V terminations shall be governed by Article V
of this Agreement.
9.4 Notwithstanding Article V and the foregoing provisions of this Article
IX, the provisions of Article VII (Indemnification) and Article VIII
(Confidentiality) shall survive any termination of this Agreement.
ARTICLE X
Notices
10. Any notice shall be sufficiently given when sent by registered or
certified mail to each other party at the address of such party set forth below
or at such other address as such party may from time to time specify in writing
to the other party.
If to the Trust:
JNL Series Trust
ATTN: Andrew B. Hopping
President
5901 Executive Drive
Lansing, MI 48911
If to the Company or the Separate Account:
Jackson National Life Insurance Company
ATTN: Thomas J. Meyer
Vice President
5901 Executive Drive
Lansing, MI 48911
ARTICLE XI
Applicable Law
11. This Agreement shall be construed in accordance with the laws of the
State of Michigan.
ARTICLE XII
Miscellaneous
12.1 The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.
12.2 If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Agreement shall
not be affected thereby.
12.3 The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and obligations,
at law or in equity, which the parties hereto are entitled to under state and
federal laws.
12.4 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
12.5 The Trust and the Company agree that the obligations of the Trust
under this Agreement shall not be binding upon any of the Trustees,
shareholders, nominees, officers, employees or agents, whether past, present or
future, of the Trust individually, but are binding only upon the assets and
property of the Trust or of the appropriate Series thereof, as provided in the
Agreement and Declaration of Trust. The execution and delivery of this Agreement
has been authorized by the Trustees of the Trust, and signed by an authorized
officer of the Trust, acting as such, and neither such authorization by such
Trustees nor such execution and delivery by such officer shall be deemed to have
been made by any of them or any shareholder of the Trust individually or to
impose any liability on any of them or any shareholder of the Trust personally,
but shall bind only the assets and property of the Trust or of the appropriate
Series thereof as provided in the Agreement and Declaration of Trust.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
Attest: JNL Series Trust
/s/ Amy D. Eisenbeis By: /s/ Andrew B. Hopping
-------------------- ---------------------
Andrew B. Hopping
President
Attest: Jackson National Life Insurance Company
/s/ Amy D. Eisenbeis By: /s/ Thomas J. Meyer
-------------------- -------------------
Thomas J. Meyer
Vice President
Jackson National Separate Account III
Attest: By: Jackson National Life Insurance Company
/s/ Amy D. Eisenbeis By: /s/ Thomas J. Meyer
-------------------- -------------------
Thomas J. Meyer
Vice President
<PAGE>
EXHIBIT A
JNL SERIES TRUST
- JNL Aggressive Growth Series
- JNL Global Equities Series
- JNL/Alliance Growth Series
- JNL/JPM International & Emerging Markets Series
- JNL/PIMCO Total Return Bond Series
- JNL/Putnam Growth Series
- JNL/Putnam Value Equity Series
- JNL/S&P Conservative Growth Series II
- JNL/S&P Moderate Growth Series II
- JNL/S&P Aggressive Growth Series II
- JNL/S&P Very Aggressive Growth Series II
- JNL/S&P Equity Growth Series II
- JNL/S&P Equity Aggressive Growth Series II
- Goldman Sachs/JNL Growth & Income Series
- Lazard/JNL Small Cap Value Series
- Lazard/JNL Mid Cap Value Series
- PPM America/JNL Money Market Series
- Salomon Brothers/JNL Balanced Series
- Salomon Brothers/JNL Global Bond Series
- Salomon Brothers/JNL High Yield Bond Series
- T. Rowe Price/JNL International Equity Investment Series
- T. Rowe Price/JNL Mid-Cap Growth Series
EX-99.B6e
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 April, 1998, 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 desires to make additional 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
additional 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 make available its shares of the JNL/S&P
Conservative Growth Series I, JNL/S&P Moderate Growth Series I, JNL/S&P
Aggressive Growth Series I, JNL/S&P Very Aggressive Growth Series I, JNL/S&P
Equity Growth Series I, and JNL/S&P Equity Aggressive Growth Series I 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 April 1, 1998, 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.
<PAGE>
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 16th day of March, 1998
Attest: JNL SERIES TRUST
/s/ Amy D. Eisenbeis By: /s/ Andrew B. Hopping
-------------------- ---------------------
Andrew B. Hopping
President
JACKSON NATIONAL LIFE
Attest: INSURANCE COMPANY
/s/ Amy D. Eisenbeis By: /s/ Thomas J. Meyer
-------------------- ---------------------
Thomas J. Meyer
Vice President
JACKSON NATIONAL
SEPARATE ACCOUNT I
JACKSON NATIONAL LIFE
Attest: INSURANCE COMPANY
/s/ Amy D. Eisenbeis By: /s/ Thomas J. Meyer
-------------------- ---------------------
Thomas J. Meyer
Vice President
<PAGE>
EXHIBIT A
dated April 1, 1998
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
JNL/S&P Conservative Growth Series I
JNL/S&P Moderate Growth Series I
JNL/S&P Aggressive Growth Series I
JNL/S&P Very Aggressive Growth Series I
JNL/S&P Equity Growth Series I
JNL/S&P Equity Aggressive Growth Series I
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
EX-99.B6f
FUND PARTICIPATION AGREEMENT
THIS FUND PARTICIPATION AGREEMENT, made on this the 16th day of March, 1998
among JNL Series Trust (the "Trust"), a business trust organized under the laws
of the Commonwealth of Massachusetts, and Jackson National Life Insurance
Company of New York (the "Company"), a life insurance company organized under
the laws of the State of New York, on behalf of itself and on behalf of JNLNY
Separate Account I ("Separate Account"), a separate account of the Company
existing pursuant to the New York Insurance Code.
WITNESSETH:
WHEREAS, the Trust is an open-end management investment company which is
divided into various investment series ("Series"), each Series being subject to
separate investment objectives and restrictions. (See Exhibit A for available
Series); and
WHEREAS, the Trust's shares may be offered to variable annuity and variable
life insurance separate accounts of insurance companies, which may or may not be
affiliated persons of each other ("Participating Insurers"), pursuant to fund
participation agreements substantially identical to this Agreement; and
WHEREAS, the Company, by resolution, has established the Separate Account
on its books of account for the purpose of funding certain variable contracts
("Contracts"); and
WHEREAS, the Separate Account, registered with the Securities and Exchange
Commission as a unit investment trust under the Investment Company Act of 1940
("1940 Act"), is divided into various "Portfolios" under which the income, gains
and losses, whether or not realized, from assets allocated to each such
Portfolio are, in accordance with the Contracts, credited to or charged against
such Portfolio without regard to any other income, gains or losses of other
Portfolios or separate accounts or of the Company; and
WHEREAS, the Separate Account desires to purchase shares of the Trust; and
WHEREAS, the Trust agrees to make its shares available to serve as
underlying investment media for the various Portfolios of the Separate Account
with each Series of the Trust serving as the underlying investment medium for
the corresponding Portfolio of the Separate Account; and
WHEREAS, the Trust has undertaken that its Board of Trustees ("Board") will
monitor the Trust for the existence of any material irreconcilable conflicts
that may arise between the contract owners of separate accounts of insurance
companies that invest in the Trust for the purpose of identifying and remedying
any such conflict;
NOW, THEREFORE, in consideration of the foregoing and of mutual covenants
and conditions set forth herein and for other good and valuable consideration,
the Trust and the Company (on behalf of itself and the Separate Account) hereby
agree as follows:
ARTICLE I
Sale of Trust Shares
1.1 The Contracts funded by the Separate Account will provide for the
allocation of net amounts among the various Portfolios of the Separate Account
for investment in the shares of the particular Series of the Trust underlying
each Portfolio. The selection of a particular Portfolio is to be made (and such
selection may be changed) in accordance with the terms of the Contract.
1.2 Trust shares to be made available to the respective Portfolios of the
Separate Account shall be sold by each of the respective Series of the Trust and
purchased by the Company for that Portfolio at the net asset value next computed
after receipt of each order, as established in accordance with the provisions of
the then current prospectus of the Trust. Shares of a particular Series of the
Trust shall be ordered in such quantities and at such times as determined by the
Company to be necessary to meet the requirements of those Contracts having
amounts allocated to the Portfolio for which the Trust Series shares serve as
the underlying investment medium. Orders and payments for shares purchased will
be sent promptly to the Trust and will be made payable in the manner established
from time to time by the Trust for the receipt of such payments. Notwithstanding
the foregoing, the Board of the Trust may refuse to sell shares of any Series to
any person or suspend or terminate the offering of shares of any Series if such
action is required by law or by regulatory authority having jurisdiction over
the Trust or is, in the sole discretion of the Board acting in good faith and in
light of its fiduciary duties under federal and any applicable state laws,
necessary in the best interests of the shareholders of such Series.
1.3 The Trust will redeem the shares of the various Series when requested
by the Company on behalf of the corresponding Portfolio of the Separate Account
at the net asset value next computed after receipt of each request for
redemption, as established in accordance with the provisions of the then current
prospectus of the Trust. The Trust will make payment in the manner established
from time to time by the Trust for the receipt of such redemption requests, but
in no event shall payment be delayed for a greater period than is permitted by
the 1940 Act.
1.35 For purposes of paragraphs 1.2 and 1.3 hereinabove, the Company shall
be the agent of the Trust for the receipt of (1) orders to purchase, and (2)
requests to redeem, shares of the Series of the Trust on behalf of the Separate
Account, and receipt of such orders and requests by such agent shall constitute
receipt thereof by the Trust, provided that the Trust receives actual notice of
such order or request by 12:00 noon (at the Trust's offices) on the next
following Business Day. "Business Day" shall mean any day on which the New York
Stock Exchange is open for trading and on which the Trust calculates its net
asset value pursuant to the rules of the Securities and Exchange Commission.
1.4 Transfer of the Trust's shares will be by book entry only. No stock
certificates will be issued to the Separate Account. Shares ordered from a
particular Series of the Trust will be recorded in an appropriate title for the
corresponding Portfolio of the Separate Account.
1.5 The Trust shall furnish same day notice to the Company of any dividend
or distribution payable on its shares. All of such dividends and distributions
as are payable on each of the Series shares in the title for the corresponding
Portfolio of the Separate Account shall be automatically reinvested in
additional shares of that Series of the Trust. The Trust shall notify the
Company of the number of shares so issued.
1.6 The Trust shall make the net asset value per share of each Series
available to the Company on a daily basis as soon as reasonably practical after
the net asset value per share is calculated and shall use its best efforts to
make such net asset value per share available by 6:00 p.m. Eastern Time.
ARTICLE II
Sales Material and Information
2.1 The Company shall furnish to the Trust each piece of sales literature
or other promotional material in which the Trust or its investment adviser is
named at least ten business days prior to its use. No such material shall be
used if the Trust objects to such use within five business days after receipt of
such material.
2.2 The Company shall not give any information or make any representations
or statements on behalf of the Trust or concerning the Trust in connection with
the sale of the Contracts other than the information or representations
contained in the registration statement or prospectus for the Trust shares, as
such documents may be amended or supplemented from time to time, or in reports
or proxy statements for the Trust, or in sales literature or other promotional
material approved by the Trust, except with the permission of the Trust.
2.3 The Trust shall furnish to the Company each piece of sales literature
or other promotional material in which the Company or the Separate Account is
named at least ten business days prior to its use. No such material shall be
used if the Company objects to such use within five business days after receipt
of such material.
2.4 The Trust shall not give any information or make any representations on
behalf of the Company or concerning the Company, the Separate Account, or the
Contracts other than the information or representations contained in the
registration statement or prospectus for the Contracts, as such registration
statement and prospectus may be amended or supplemented from time to time, or in
published reports for the Separate Account which are in the public domain or
approved by the Company for distribution to Contract owners, or in sales
literature or other promotional material approved by the Company, except with
the permission of the Company.
2.5 The Trust will provide to the Company at least one complete copy of all
registration statements, prospectuses, statements of additional information,
reports, proxy statements, sales literature and other promotional materials,
applications for exemptions, requests for no-action letters, and all amendments
to any of the above that relate to the Trust or its shares, contemporaneously
with the filing of such document with the Securities and Exchange Commission or
other regulatory authorities.
2.6 The Company will provide to the Trust at least one complete copy of all
registration statements, prospectuses, statements of additional information,
reports, solicitations for voting instructions, sales literature and other
promotional materials, applications for exemptions, requests for no-action
letters, and all amendments to any of the above, that relate to the Contracts or
the Separate Account, contemporaneously with the filing of such documents with
the Securities and Exchange Commission or other regulatory authorities.
2.7 For purposes of this Article II, the phrase "sales literature or other
promotional material" includes, but is not limited to, advertisements (such as
material published, or designed for use in, a newspaper, magazine, or other
periodical, radio, television, telephone or tape recording, videotape display,
signs or billboards, motion pictures, or other public media), sales literature
(i.e., any written communication distributed or made generally available to
customers or the public, including brochures, circulars, research reports,
market letters, form letters, seminar texts, reprints or excerpts of any other
advertisement, sales literature, or published article), educational or training
materials or other communications distributed or made generally available to
some or all agents or employees, and registration statements, prospectuses,
statements of additional information, shareholder reports, and proxy materials.
ARTICLE III
Expenses
3.1 The Trust shall pay no fee or other compensation to the Company under
this Agreement. All expenses incident to performance by the Trust under this
Agreement shall be paid by the Trust. The Trust shall bear the expenses for: the
cost of registration of the Trust's shares; preparation and filing of the
Trust's prospectus and registration statement; preparation and filing of proxy
materials and reports; setting the prospectus in type; setting in type the proxy
materials and reports to shareholders; the preparation of all statements and
notices required of the Trust by any federal or state law; and all taxes on the
issuance or transfer of the Trust's shares.
3.2 The Trust's prospectus shall state that the statement of additional
information for the Trust is available from the Trust, and the Trust, at its
expense, shall provide such statement free of charge to the Company and to any
Contract owner or prospective Contract owner who requests such statement.
3.3 The Trust, at its expense, shall provide the Company with copies of its
proxy material, reports to stockholders and other communications to stockholders
in such quantity as the Company shall reasonably require for distributing to
Contract owners.
ARTICLE IV
Voting
4.1 The Company shall provide pass-through voting privileges to all
Contract owners so long as the Securities and Exchange Commission continues to
interpret the 1940 Act to require pass-through voting privileges for variable
contract owners. The Company shall be responsible for assuring that the Separate
Account calculates voting privileges in a manner consistent with standards
provided by the Trust, which standards will also be provided to other
Participating Insurers. To the extent required by law, the Company will vote
shares for which it has not received voting instructions as well as shares
attributable to the Company in the same proportion as it votes shares for which
it has received instructions.
4.2 The Trust will comply with all provisions of the 1940 Act requiring
voting by shareholders and, in particular, the Trust will either provide for
annual meetings or comply with Section 16(c) of the 1940 Act (although the Trust
is not one of the trusts described in Section 16(c) of that Act) as well as with
Sections 16(a) and, if and when applicable, 16(b). Further, the Trust will act
in accordance with the Securities and Exchange Commission's interpretation of
the requirements of Section 16(a) with respect to periodic elections of
directors and with whatever rules the Commission may promulgate with respect
thereto.
ARTICLE V
Potential Conflicts
5.1 The Board of the Trust will monitor the Trust for the existence of any
material irreconcilable conflict between the interests of the contract owners of
all separate accounts investing in the Trust. The Company will report to the
Board any potential or existing conflicts of which it is or becomes aware
between any of its Contract owners, or between any of its Contract owners and
contract owners of other Participating Insurers. The Company will be responsible
for assisting the Board in carrying out its responsibilities to identify and
resolve material conflicts by providing the Board with all information available
to it that is reasonably necessary for the Board to consider any issues raised,
including information as to a decision by the Company to disregard voting
instructions of its Contract owners.
5.2 The Board's determination of the existence of any irreconcilable
material conflict and its implications shall be made known promptly by it to the
Company and other Participating Insurers. An irreconcilable material conflict
may arise for a variety of reasons, including: (a) an action by any state
insurance regulatory authority; (b) a change in applicable federal or state
insurance tax, or securities laws or regulations, or a public ruling, private
letter ruling, or any similar action by insurance, tax, or securities regulatory
authorities; (c) an administrative or judicial decision in any relevant
proceeding; (d) the manner in which the investments of any Series are being
managed; (e) a difference in voting instructions given by variable annuity
contract owners and variable life insurance contract owners or by contract
owners of different Participating Insurers; or (f) a decision by a Participating
Insurer to disregard the voting instructions of its variable contract owners.
5.3 If it is determined by a majority of the Board or a majority of its
disinterested Trustees that a material irreconcilable conflict exists that
affects the interests of the Contract owners, the Company shall, to the extent
reasonably practicable (as determined by a majority of the Trust's disinterested
Trustees), take whatever steps are necessary to remedy or eliminate the
irreconcilable material conflict, which steps could include: (a) withdrawing the
assets allocable to the Separate Account from the Trust or any Series and
reinvesting such assets in a different investment medium, including another
Series of the Trust, or participating in the submission of the question of
whether such segregation should be implemented to a vote of all affected
contract owners and, as appropriate, segregating the assets of any particular
group (e.g. annuity contract owners or life insurance contract owners) that
votes in favor of such segregation, or offering to the affected contract owners
the option of making such a change; and (b) establishing a new registered
management investment company or managed separate account. The Company shall
take such steps at its expense if the conflict affects solely the interests of
the owners of the Company's Contracts, but shall bear only its equitable portion
of any such expense if the conflict also affects the interests of the contract
owners of one or more Participating Insurers other than the Company, provided:
that this sentence shall not be construed to require the Trust to bear any
portion of such expense. If a material irreconcilable conflict arises because of
the Company's decision to disregard Contract owner voting instructions and that
decision represents a minority position or would preclude a majority vote, the
Company may be required, at Trust's election, to withdraw the investment of the
Separate Account in the Trust, and no charge or penalty will be imposed as a
result of such a withdrawal. The Company agrees to take such remedial action as
may be required under this paragraph 5.3 with a view only to the interests of
its Contract owners. For purposes of this paragraph 5.3, a majority of the
disinterested members of the Trust's Board shall determine whether or not any
proposed action adequately remedies any irreconcilable conflict, but in no event
will Trust be required to establish a new funding medium for any variable
contract. The Company shall not be required by this paragraph 5.3 to establish a
new funding medium if any offer to do so has been declined by vote of a majority
of contract owners materially and adversely affected by the irreconcilable
material conflict.
Notwithstanding the foregoing, if the Company is required under this
paragraph 5.3 to withdraw the investment of the Separate Account in the Trust,
such withdrawal may take place within six (6) months after the Trust gives
written notice that this paragraph 5.3 is being implemented, provided: That the
Trust may require that such withdrawal must take place within a shorter period
of time after such notice if a majority of the disinterested members of the
Trust's Board determines that such shorter period is necessary to avoid
irreparable harm to its shareholders; and further provided: That until the end
of such six month (or shorter) period the Trust shall continue to accept and
implement orders by the Company for the purchase and redemption of Trust Shares.
The Company will not be required to withdraw investments in the Separate Account
of the Trust until all regulatory approval is obtained.
5.4 In discharging its responsibilities under this Article V, the Company
will cooperate and coordinate, to the extent necessary, with the Board and with
other Participating Insurers.
5.5 If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or a
subsequent Rule 6e-3 is adopted, to provide exemptive relief from any provision
of the Act or the rules promulgated thereunder with respect to mixed or shared
funding on terms and conditions materially different from those contained in the
Trust's mixed and shared funding order then the Trust or the Participating
Insurers, as appropriate, shall take such steps as may be necessary to comply
with Rules 6e-2 and 6e-3(T), and related Rules as amended, to the extent such
rules are applicable.
ARTICLE VI
Representations and Warranties
6.1 The Company represents and warrants that the Contracts are or will be
registered under the Securities Act of 1933 ("1933 Act"), that the Contracts
will be issued and sold in compliance in all material respects with all
applicable federal and state laws, and that the sale of the Contracts shall
comply in all material respects with state insurance suitability requirements.
The Company further represents and warrants that it is an insurance company duly
organized and in good standing under applicable laws and that it has legally and
validly established the Separate Account prior to any issuance or sale thereof
as a segregated asset account under the Michigan Insurance Code and has
registered or, prior to any issuance or sale of the Contracts, will register the
Separate Account as a unit investment trust in accordance with the provisions of
the 1940 Act to serve as a segregated investment account for the Contracts.
6.2 The Trust represents and warrants that Trust shares sold pursuant to
this Agreement shall be registered under the 1933 Act, shall be duly authorized
for issuance and sold in compliance with the laws of the State of Massachusetts
and all applicable federal and state securities laws and that the Trust is and
shall remain registered under the 1940 Act. The Trust shall amend the
Registration Statement for its shares under the 1933 Act and the 1940 Act from
time to time as required in order to effect the continuous offering of its
shares. The Trust represents that it is lawfully organized and validly existing
under the laws of the State of Massachusetts and that it does and will comply in
all material respects with the 1940 Act.
6.3 The Trust represents and warrants that it intends to qualify each of
its Series as a Regulated Investment Company under Subchapter M of the Internal
Revenue Code, as amended, (the "Code") and that it will make every effort to
maintain such qualification (under Subchapter M or any successor or similar
provision) and that it will notify the Company immediately upon having a
reasonable basis for believing that any such Series may not so qualify in the
future.
6.4 The Trust represents and warrants that it will at all times invest
money from the Contracts in such a manner as to ensure that the Contracts will
be treated as variable contracts under the Code and the regulations issued
thereunder. Without limiting the scope of the foregoing, the Trust will at all
times comply with Section 817(h) of the Code and the Regulations thereunder,
relating to the diversification requirements for annuity, endowment, or life
insurance contracts and any amendments or other modifications to such Section or
Regulation.
6.5 The Company represents that the Contracts are to be treated as annuity,
endowment, or life insurance contracts, under applicable provisions of the Code,
and that it will make every effort to maintain such treatment and that it will
notify the Trust immediately upon having a reasonable basis for believing that
the Contracts have ceased to be so treated or that they might not be so treated
in the future.
6.6 The Trust makes no representation as to whether any aspect of its
operations (including, but not limited to, fees and expenses and investment
policies) complies with the insurance laws or regulations of the various states
except that the Trust represents that its investment policies, fees and expenses
are and shall at all times remain in compliance with the laws of the State of
Massachusetts and the Trust represents that its operations are and shall at all
times remain in material compliance with the 1940 Act.
6.7 The Trust represents and warrants that all of its Trustees, officers,
employees, investment advisers, and other persons dealing with the money or
securities of the Trust are and shall continue to be at all times covered by a
blanket fidelity bond or similar coverage for the benefit of the Trust in an
amount not less that the minimal coverage as required currently by Section 17(g)
of the 1940 Act or related provisions as may be promulgated from time to time.
The aforesaid bond shall include coverage for larceny and embezzlement and shall
be issued by a reputable bonding company.
6.8 The Company represents and warrants that all of its directors,
officers, employees, and other persons who are directly dealing with the money
or securities of the Trust are and shall continue to be at all times covered by
a blanket fidelity bond or similar coverage in amounts which shall comply with
Rule 17g-1 under the 1940 Act.
6.9 The Trust represents and warrants that shares of the Trust will be sold
only to Participating Insurers and their separate accounts or to qualified plans
as permitted under section 817(h) of the Code. No shares of any Series will be
sold to the general public. The Trust further represents and warrants that it
will not sell Trust shares to any insurance company or separate account except
pursuant to an agreement containing provisions substantially the same as those
contained in Articles IV and V of this Agreement governing voting rights and
conflicts of interest, respectively.
6.10 The Company represents and warrants that it will make reasonable
efforts to market those Contracts it determines from time to time to offer for
sale and, although it is not required to offer for sale new Contracts in all
cases, will accept payments and otherwise service existing Contracts funded in
the Separate Account. No representation is made as to the number or amount of
such Contracts to be sold.
ARTICLE VII
Indemnification
7.1 The Company agrees to indemnify and hold harmless the Trust and each of
the Trust's Trustees and officers and each person, if any, who controls the
Trust within the meaning of Section 15 of the 1933 Act against any and all
losses, claims, damages, liabilities or litigation (including legal and other
expenses), arising out of the acquisition of any shares of the Trust by any
person, to which the Trust or such Trustees, officers or controlling person may
become subject under the 1933 Act, under any other statute, at common law or
otherwise, which (i) may be based upon any wrongful act by the Company, any of
its employees or representatives, any affiliate of or any person acting on
behalf of the Company or a principal underwriter of its insurance products, or
(ii) may be based upon any untrue statement or alleged untrue statement of a
material fact contained in a registration statement or prospectus covering
shares of the Trust or any amendment thereof or supplement thereto or the
omission or alleged omission to state therein a material fact 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 Trust by the Company, or (iii) may be based on any untrue statement or
alleged untrue statement of a material fact contained in a registration
statement or prospectus covering the Contracts, or any amendments or supplement
thereto, or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statement or statements
therein not misleading, unless such statement or omission was made in reliance
upon information furnished to the Company or such affiliate by or on behalf of
the Trust; provided, however, that in no case (i) is the Company's indemnity in
favor of a Trustee or officer or any other person deemed to protect such Trustee
or officer or other person against any liability to which any such person would
otherwise be subject by reason of willful misfeasance, bad faith, or gross
negligence in the performance of his or her duties or by reason of his or her
reckless disregard of obligations and duties under this Agreement or (ii) is the
Company to be liable under its indemnity agreement contained in this Paragraph
7.1 with respect to any claim made against the Trust or any person indemnified
unless the Trust or such person, as the case may be, shall have notified the
Company in writing pursuant to Paragraph 10 of this Agreement within a
reasonable time after the summons or other first legal process giving
information of the nature of the claims shall have been served upon the Trust or
upon such person (or after the Trust or such person shall have received notice
of such service on any designated agent), but failure to notify the Company of
any such claim shall not relieve the Company from any liability which it has to
the Trust or any person against whom such action is brought otherwise than on
account of its indemnity agreement contained in this Paragraph 7.1. The Company
shall be entitled to participate, at its own expense, in the defense, or, if it
so elects, to assume the defense of any suit which could result in liability to
it under this Paragraph 7.1, but, if it elects to assume the defense, such
defense shall be conducted by counsel chosen by it and satisfactory to the Trust
and to such of its officers, Trustees and controlling person or persons as may
be defendants in the suit. In the event that the Company elects to assume the
defense of any such suit and retain such counsel, the Trust, such officers,
Trustees and controlling person or persons shall bear the fees and expenses of
any additional counsel retained by them, but, in case the Company does not elect
to assume the defense of any such suit, the Company will reimburse the Trust,
such officers, Trustees and controlling person or persons for the reasonable
fees and expenses of any counsel retained by them. The Company agrees promptly
to notify the Trust pursuant to Paragraph 10 of this Agreement of the
commencement of any litigation or proceedings against it in connection with the
issue and sale of any shares of the Trust.
7.2 The Trust agrees to indemnify and hold harmless the Company and its
affiliated principal underwriter of the Contracts and each of the Company's
Directors and officers and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act against any and all losses, claims,
damages, liabilities or litigation (including legal and other expenses) to which
it or such directors, officers or controlling person may become subject under
the 1933 Act, under any other statute, at common law or otherwise, arising out
of the acquisition of any shares of the Trust by any person which (i) may be
based upon any wrongful act by the Trust or any of its employees or
representatives, or (ii) may be based upon any untrue statement or alleged
untrue statement of a material fact contained in a registration statement or
prospectus covering shares of the Trust or any amendment thereof or supplement
thereto or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading unless such statement or omission was made in reliance upon
information furnished to the Trust by the Company, or (iii) may be based on any
untrue statement or alleged untrue statement of a material fact contained in a
registration statement or prospectus covering the Contracts, or any amendment or
supplement thereto, or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statement
or statements therein not misleading, if such statement or omission was made in
reliance upon information furnished to the Company by or on behalf of the Trust;
provided, however, that in no case (i) is the Trust's indemnity in favor of a
Director or officer or any other person deemed to protect such Director or
officer or other person against any liability to which any such person would
otherwise be subject by reason of willful misfeasance, bad faith, or gross
negligence in the performance of his or her duties or by reason of his or her
reckless disregard of obligations and duties under this Agreement or (ii) is the
Trust to be liable under its indemnity agreement contained in this Paragraph 7.2
with respect to any claims made against the Company or any such Director,
officer or controlling person unless it, Director, officer or controlling
person, as the case may be, shall have notified the Trust in writing pursuant to
Paragraph 10 of this Agreement within a reasonable time after the summons or the
first legal process giving information of the nature of the claim shall have
been served upon it or upon such Director, officer or controlling person (or
after the Company or such Director, officer or controlling person shall have
received notice of such service on any designated agent), but failure to notify
the Trust of any claim shall not relieve it from any liability which it may have
to the person against whom such action is brought otherwise than on account of
its indemnity agreement contained in this Paragraph 7.2. The Trust will be
entitled to participate, at its own expense, in the defense, or, if it so
elects, to assume the defense of any suit which could result in liability to it
under this Paragraph 7.2, but, if the Trust elects to assume the defense, such
defense shall be conducted by counsel chosen by it and satisfactory to the
Company and to such of its Directors, officers and controlling person or persons
as may be defendants in the suit. In the event that the Trust elects to assume
the defense of any such suit and retain such counsel, the Company, such
Directors, officers and controlling person or persons shall bear the fees and
expenses of any additional counsel retained by them, but, in case the Trust does
not elect to assume the defense of any such suit, it will reimburse the Company,
such Directors, officers and controlling person or persons for the reasonable
fees and expenses of any counsel retained by them. The Trust agrees promptly to
notify the Company pursuant to Paragraph 10 of this Agreement of the
commencement of any litigation or proceedings against it or any of its officers
or Trustees in connection with the issue and sale of any of its shares.
ARTICLE VIII
Confidentiality
8. Subject to the requirements of legal process and regulatory authority,
each party shall treat as confidential all information reasonably identified as
confidential in writing by any other party hereto and, except as permitted by
this Agreement, shall not disclose, disseminate or utilize confidential
information without the express written consent of the affected party until such
time as it may come into the public domain.
ARTICLE IX
Termination
9.1 This Agreement shall terminate:
(a) at the option of the Company or the Trust upon 90 days' advance
written notice to all other parties to this Agreement, provided,
however, such notice shall not be given earlier than twenty four
months following the date of this Agreement; or
(b) at the option of the Company if any of the Trust's shares are not
reasonably available to meet the requirements of the Contracts
funded in the Separate Account as determined by the Company; or
(c) at the option of any party to this Agreement upon institution of
formal proceedings against any other party to this Agreement by
the Securities and Exchange Commission or any other regulatory
body; or
(d) upon the vote of Contract owners having an interest in a
particular Portfolio of the Separate Account. The Company will
give 30 days' prior written notice to the Trust of the date of
any proposed action to replace the Trust's shares; or
(e) at the option of the Company if the Trust's shares are not
registered, issued or sold in accordance with applicable state
and/or federal law or such law precludes the use of such shares
as the underlying investment medium of the Contracts funded in
the Separate Account; or
(f) at the option of the Company if any Series of the Trust ceases to
qualify as a Regulated Investment Company under Subchapter M of
the Code or under any successor similar provision, or if the
Company reasonably believes that any Series of the Trust may fail
to so qualify; or
(g) at the option of the Company if any Series of the Trust fails to
meet the diversification requirements specified in paragraph 6.4
hereof.
9.2 Prompt notice of election to terminate under subparagraphs (b), (c),
(e), (f) and (g) of paragraph 9.1 shall be furnished by the electing party.
9.3 Notwithstanding any termination of this Agreement, the Trust shall, at
the option of the Company, continue to make available additional shares of the
Trust pursuant to the terms and conditions of this Agreement for all Contracts
in effect on the effective date of termination of this Agreement (hereinafter
referred to as "Existing Contracts"). Specifically, without limitation, the
owners of the Existing Contracts shall be permitted to reallocate investments in
the Trust, redeem investments in the Trust or invest in the Trust upon the
making of additional purchase payments under the Existing Contracts. The parties
agree that this paragraph 9.3 shall not apply to any terminations under Article
V and the effect of such Article V terminations shall be governed by Article V
of this Agreement.
9.4 Notwithstanding Article V and the foregoing provisions of this Article
IX, the provisions of Article VII (Indemnification) and Article VIII
(Confidentiality) shall survive any termination of this Agreement.
ARTICLE X
Notices
10. Any notice shall be sufficiently given when sent by registered or
certified mail to each other party at the address of such party set forth below
or at such other address as such party may from time to time specify in writing
to the other party.
If to the Trust:
JNL Series Trust
ATTN: Andrew B. Hopping
President
5901 Executive Drive
Lansing, MI 48911
If to the Company or the Separate Account:
Jackson National Life Insurance Company of New York
ATTN: Thomas J. Meyer
Vice President
2900 Westchester Avenue
Purchase, New York 10577
ARTICLE XI
Applicable Law
11. This Agreement shall be construed in accordance with the laws of the
State of Michigan.
ARTICLE XII
Miscellaneous
12.1 The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.
12.2 If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Agreement shall
not be affected thereby.
12.3 The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and obligations,
at law or in equity, which the parties hereto are entitled to under state and
federal laws.
12.4 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
12.5 The Trust and the Company agree that the obligations of the Trust
under this Agreement shall not be binding upon any of the Trustees,
shareholders, nominees, officers, employees or agents, whether past, present or
future, of the Trust individually, but are binding only upon the assets and
property of the Trust or of the appropriate Series thereof, as provided in the
Agreement and Declaration of Trust. The execution and delivery of this Agreement
has been authorized by the Trustees of the Trust, and signed by an authorized
officer of the Trust, acting as such, and neither such authorization by such
Trustees nor such execution and delivery by such officer shall be deemed to have
been made by any of them or any shareholder of the Trust individually or to
impose any liability on any of them or any shareholder of the Trust personally,
but shall bind only the assets and property of the Trust or of the appropriate
Series thereof as provided in the Agreement and Declaration of Trust.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
Attest: JNL Series Trust
/s/ Amy D. Eisenbeis By: /s/ Andrew B. Hopping
- -------------------- ---------------------
Andrew B. Hopping
President
Attest: Jackson National Life Insurance
Company of New York
/s/ Amy D. Eisenbeis By: /s/ Thomas J. Meyer
- -------------------- ---------------------
Thomas J. Meyer
Vice President
JNLNY Separate Account I
Attest: By: Jackson National Life Insurance
Company of New York
/s/ Amy D. Eisenbeis By: /s/ Thomas J. Meyer
- -------------------- ---------------------
Thomas J. Meyer
Vice President
<PAGE>
EXHIBIT A
JNL SERIES TRUST
- JNL Aggressive Growth Series
- JNL Capital Growth Series
- JNL Global Equities Series
- JNL/Alger Growth 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
EX-99.B10
March 20, 1998
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 Post-Effective Amendment No. 13
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 to 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>
Board of Trustees
JNL Series Trust
March 20, 1998
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
EX-99.B11
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Statement of Additional Information
constituting part of this Post-Effective Amendment No. 13 to the registration
statement on Form N-1A (the "Registration Statement") of our report dated
February 6, 1998, 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 the reference to us under the heading "Financial
Highlights" in such Prospectus.
/s/ Price Waterhouse LLP
Price Waterhouse LLP
Milwaukee, Wisconsin
March 19, 1998