<PAGE>
DEAR SHAREHOLDER:
This report relates to the operations of the JNL Series Trust for the year ended
December 31, 1998. The following Money Manager commentaries, graphs and tables
provide you with information regarding each Series' performance during the
period.
JNL AGGRESSIVE GROWTH SERIES
JANUS CAPITAL CORPORATION
[JANUS LOGO] WARREN B. LAMMERT
OBJECTIVE:
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.
MONEY MANAGER COMMENTARY:
Despite dramatic volatility in 1998, global equity markets moved higher. Stocks
began the year with a broad-based rally buoyed by strong corporate earnings and
a resilient domestic economy. In late spring, the rally narrowed dramatically
with small- and mid-sized companies falling behind their larger counterparts.
Then, in mid-summer, stocks began a precipitous decline after Russia defaulted
on its debt. As liquidity dried up, the world's financial system teetered on the
edge of collapse as several highly leveraged hedge funds sold securities to
cover their losses. In response, the Federal Reserve lowered interest rates
three times in the fall. This Fed action sufficiently restored investor appetite
for risk and stocks rallied for the remainder of the year in spite of
substantial political turmoil in the United States.
Turning to the Series, we outperformed our benchmark, the S&P 500 Index, due to
our focus on growth stocks in the technology, pharmaceutical, and cable
industries, as well as individual names with compelling growth stories. In the
technology sector, we benefited from substantial gains in our Internet-related
companies. Pioneering online retailer Amazon.com enjoyed a tremendous run-up,
reflecting the rapid expansion of its franchise to cover an increasingly diverse
product line. Another winner was Cisco Systems, the leading network equipment
supplier, and a prime beneficiary of the growth of the Internet. On the
downside, our position in Parametric Technology was disappointing after its
earnings fell short of our expectations. We sold the position at a loss.
Looking forward, despite low interest rates and an absence of inflation, more
companies are expected to see their earnings come under pressure. Additionally,
economic uncertainty abroad and political instability at home are expected to
contribute to market volatility. However, this potential uncertainty could cater
to our strength as stockpickers as we will continue to seek out growing
businesses in dynamic industries.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
JNL AGGRESSIVE GROWTH SERIES AND THE S&P 500 INDEX
[GRAPHIC]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
05/15 1995 $10,000 $10,000
6/30 $10,860 $10,356
9/30 $12,190 $11,179
12/31 1995 $12,409 $11,851
3/31 $13,577 $12,487
6/30 $14,022 $13,046
9/30 $14,601 $13,448
12/31 1996 $14,760 $14,568
3/31 $14,010 $14,958
6/30 $15,665 $17,567
9/30 $17,232 $18,882
12/31 1997 $16,630 $19,424
3/31 $19,595 $22,134
6/30 $21,620 $22,863
9/30 $20,201 $20,593
12/31 1998 $26,220 $24,975
AVERAGE ANNUAL
TOTAL RETURN
1 year.................. 57.66%
Since inception * ...... 30.36%
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT RETURN AND
PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY
BE MORE OR LESS THAN THEIR ORIGINAL COST.
PERFORMANCE NUMBERS ARE NET OF ALL SERIES OPERATING EXPENSES, BUT DO NOT REFLECT
THE DEDUCTION OF INSURANCE CHARGES.
- ------------
* Inception date May 15, 1995.
<PAGE>
JNL Series Trust
JNL Aggressive Growth Series
Statement of Assets and Liabilities
December 31, 1998
Assets
Investments in securities, at cost .......$ 117,104,607
================
Investments in securities, at value ......$ 160,460,520
Foreign currency .......................... 133,119
Receivables:
Dividends and interest ................. 17,381
Forward foreign currency
exchange contracts .................. 27,164
Foreign taxes recoverable .............. 52
Fund shares sold ....................... 792,324
Investment securities sold ............. 4,198,351
Collateral for securities loaned .......... 36,285,845
----------------
Total assets .............................. 201,914,756
----------------
Liabilities
Payables:
Investment advisory fees ............... 117,088
Forward foreign currency
exchange contracts .................. 7,413
Fund shares redeemed ................... 12,886
Investment securities purchased 3,617,497
........
Return of collateral for securities
loaned .................................... 36,285,845
Other liabilities ......................... 32,382
----------------
Total liabilities ......................... 40,073,111
================
Net assets ...............................$ 161,841,645
================
Net assets consist of:
Paid-in capital ..........................$ 107,861,160
Undistributed net investment loss ......... (271,789)
Accumulated net realized gain on
investments
and foreign currency related items ..... 10,875,653
Net unrealized appreciation on:
Investments ............................ 43,355,913
Foreign currency related items ......... 20,708
================
Net assets ...............................$ 161,841,645
================
Total shares outstanding (no par
value), unlimited shares
authorized authorized................. 7,327,619
================
Net asset value, offering and
redemption price per share............$ 22.09
================
Statement of Operations
For the Year Ended December 31, 1998
Investment income
Dividends ..............................$ 393,034
Interest ............................... 444,447
Foreign tax withholding ................ (11,858)
---------------
Total investment income ................... 825,623
---------------
Expenses
Investment advisory fees ............... 1,046,049
Custodian fees ......................... 76,905
Portfolio accounting fees .............. 24,645
Professional fees ...................... 32,056
Other .................................. 31,512
---------------
Total operating expenses .................. 1,211,167
Less:
Reimbursement from Adviser ............. -
---------------
Net expenses .............................. 1,211,167
---------------
Net investment loss ....................... (385,544)
---------------
Realized and unrealized gains (losses)
Net realized gain (loss) on:
Investments ............................ 16,357,152
Foreign currency related items ......... (201,346)
Net change in unrealized appreciation
(depreciation) on:
Investments ............................ 37,522,949
Foreign currency related items ......... 30,130
---------------
Net realized and unrealized gains ......... 53,708,885
---------------
Net increase in net assets
from operations ........................$ 53,323,341
===============
See notes to the financial statements.
<PAGE>
JNL Series Trust
JNL Aggressive Growth Series
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year ended December 31,
----------------------------------
1998 1997
---------------- ----------------
<S> <C> <C>
Operations:
Net investment income (loss) ..................................................... $ (385,544) $ 224,729
Net realized gain (loss) on:
Investments ................................................................... 16,357,152 3,158,027
Foreign currency related items ................................................. (201,346) 149,464
Net change in unrealized appreciation (depreciation) on:
Investments ................................................................... 37,522,949 3,997,177
Foreign currency related items ................................................. 30,130 (5,389)
------------- ----------------
Net increase in net assets from operations ......................................... 53,323,341 7,524,008
------------- ----------------
Distributions to shareholders:
From net investment income ....................................................... (333,868) -
From net realized gains on investment transactions................................ (5,486,108) (2,833,974)
------------- ----------------
Total distributions to shareholders ................................................ (5,819,976) (2,833,974)
------------- ----------------
Share transactions:
Proceeds from the sale of shares ................................................. 78,834,529 54,409,351
Reinvestment of distributions .................................................... 5,819,976 2,776,615
Cost of shares redeemed .......................................................... (49,186,569) (12,560,301)
------------- ----------------
Net increase in net assets from share transactions ................................. 35,467,936 44,625,665
------------- ----------------
Net increase in net assets ......................................................... 82,971,301 49,315,699
Net assets beginning of period ..................................................... 78,870,344 29,554,645
------------- ----------------
Net assets end of period ........................................................... $161,841,645 78,870,344
============= ================
Undistributed net investment income (loss).......................................... $ (271,789) $ 381,611
============= ================
</TABLE>
See notes to the financial statements.
<PAGE>
JNL Series Trust
JNL Aggressive Growth Series
Financial Highlights
<TABLE>
<CAPTION>
Period from Period from
April 1, May 15,
Year ended December 31, 1996 to 1995* to
------------------------------ December 31, March 31,
1998 1997 1996 1996
-------------- -------------- -------------- -----------
<S> <C> <C> <C> <C>
Selected Per Share Data
Net asset value, beginning of period ................................. $ 14.53 $ 13.38 $ 13.13 $ 10.00
-------------- -------------- -------------- -----------
Income from operations:
Net investment income (loss) ....................................... (0.06) 0.04 0.05 0.01
Net realized and unrealized gains on investments and
foreign currency related items ................................... 8.45 1.65 1.10 3.53
-------------- -------------- -------------- -----------
Total income from operations ......................................... 8.39 1.69 1.15 3.54
-------------- -------------- -------------- -----------
Less distributions:
From net investment income ......................................... (0.05) - (0.05) -
From net realized gains on investment transactions ................. (0.78) (0.54) (0.71) (0.41)
Return of capital .................................................. - - (0.14) -
-------------- -------------- -------------- -----------
Total distributions .................................................. (0.83) (0.54) (0.90) (0.41)
-------------- -------------- -------------- -----------
Net increase ......................................................... 7.56 1.15 0.25 3.13
-------------- -------------- -------------- -----------
Net asset value, end of period ....................................... $ 22.09 $ 14.53 $ 13.38 $ 13.13
============== ============== ============== ===========
Total Return (a) ..................................................... 57.66% 12.67% 8.72% 35.78%
Ratios and Supplemental Data:
Net assets, end of period (in thousands) ........................... $ 161,842 $ 78,870 $ 29,555 $ 8,527
Ratio of net operating expenses to average net assets (b) (c) ...... 1.10% 1.10% 1.09% 1.09%
Ratio of net investment income (loss) to average net assets (b) (c) (0.35)% 0.39% 0.77% 0.27%
Portfolio turnover ................................................. 114.51% 137.26% 85.22% 163.84%
Ratio information assuming no expense reimbursement or
fees paid indirectly:
Ratio of net operating expenses to average net assets (b) .......... 1.10% 1.17% 1.40% 2.77%
Ratio of net investment income (loss) to average net assets (b) .... (0.35)% 0.32% 0.46% (1.41)%
- ------------------------------------------------------------------------------------------------------------------------------------
</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 Adviser's expense reimbursement and
fees paid indirectly.
See notes to the financial statements.
<PAGE>
JNL AGGRESSIVE GROWTH SERIES
SCHEDULE OF INVESTMENTS
December 31, 1998
Market
Shares Value
------ -----
Common Stocks - 87.26%
Finland - 0.52%
Food & Beverage - 0.52%
Raisio Group Plc. ............... 76,098 $ 835,750
Italy - 0.71%
Telecommunications - 0.71%
Telecom Italia SpA. ............. 133,311 1,136,826
Norway - 0.11%
Oil & Gas - 0.11%
Ocean Rig ASA. (a) .............. 653,139 178,789
United States - 85.92%
Advertising - 2.15%
Lamar Advertising Co. (a) (c) ... 38,586 1,437,329
Outdoor Systems Inc. (a) ........ 46,634 1,399,020
Penton Media Inc. ............... 30,390 615,398
------------
3,451,747
Aerospace & Defense - 0.51%
Orbital Sciences Corp. (a) (c) .. 18,525 819,731
Airlines - 0.75%
Southwest Airlines (c) .......... 53,405 1,198,275
Apparel - 0.87%
Nike Inc. ....................... 34,415 1,395,958
Auto Manufacturers - 0.87%
DaimlerChrysler AG (a) (c) ...... 14,623 1,404,721
Auto Parts & Equipment - 0.46%
Federal-Mogul Corp. (c) ......... 12,475 742,263
Banks -3.90%
Bank of New York Co. Inc. (c) ... 116,370 4,683,893
Firstar Corp (c) .............. 16,913 1,577,137
------------
6,261,030
Biotechnology - 1.93%
Centocor Inc. (a) (c) ........... 19,315 871,589
Monsanto Co. .................... 46,855 2,225,613
------------
3,097,202
Computers - 6.47%
Cisco Systems Inc. (a) .......... 77,100 7,155,844
EMC Corp. (c) ................... 8,070 685,950
Sapient Corp. (a) (c) ........... 40,920 2,291,520
Technology Solutions Co. (a) .... 23,850 255,642
------------
10,388,956
Distribution & Wholesale - 0.05%
CDW Computer Centers Inc. (a)
(c) ............................. 910 87,303
Diversified Financial Services -
0.70%
FINOVA Group Inc. (c) ........... 5,265 283,981
Household International Inc. .... 12,290 486,991
Market
Shares Value
------ -----
Common Stocks (continued)
United States (continued)
Diversified Financial Services
(continued)
Newcourt Credit Group Inc. (c) .. 10,160 $ 354,965
------------
1,125,937
Electronics - 3.19%
Maxim Integrated Products Inc.
(a) (c) ......................... 30,565 1,335,308
Pittway Corp .................... 63,020 2,083,599
Vitesse Semiconductor Corp. (a) . 37,160 1,695,425
------------
5,114,332
Health Care - 3.13%
Aterial Vascular Engineering
Inc. (a) ........................... 26,725 1,403,063
Medtronic Inc. (c) .............. 2,845 211,241
MiniMed Inc. (a) (c) .......... 4,870 510,132
Sofamor Danek Group Inc. (a) .... 23,795 2,897,041
------------
5,021,477
Holding Companies - Diversified -
3.58%
TCI Ventures Group (a) (c) ...... 243,515 5,737,822
Insurance - 0.21%
UNUM Corp. ...................... 5,775 337,116
Manufacturing - 2.68%
Tyco International Ltd. (c) ..... 56,907 4,292,922
Media - 21.71%
Cablevision Systems Corp. (a) 28,475 1,429,089
(c) .............................
Chancellor Media Corp. (a) (c) .. 32,550 1,558,331
Comcast Corp. (c) ............... 127,655 7,491,753
Cox Communications Inc. (a) (c) . 30,630 2,117,299
Liberty Media Group (a) ......... 33,835 1,558,525
MediaOne Group Inc. (a) ......... 87,555 4,115,085
Tele-Communications Inc. (a) (c) 100,168 5,540,543
Time Warner Inc. ................ 135,944 8,437,025
United International Holdings
Inc.(a) ......................... 60,090 1,156,733
USA Networks Inc. (a) ........... 43,325 1,435,140
------------
34,839,523
Oil & Gas Producers - 0.33%
Schlumberger Ltd. ............... 11,315 527,571
Pharmaceuticals - 8.23%
ALZA Corp. (a) (c) .............. 46,140 2,410,815
Eli Lilly & Co. ................. 29,530 2,624,479
Pfizer Inc. ..................... 35,700 4,478,119
Pharmacia & Upjohn Inc. ......... 26,350 1,492,069
Warner-Lambert Co. .............. 29,185 2,194,347
------------
13,199,829
Retail - 5.29%
Amazon.com Inc. (a) (c) ......... 17,670 5,676,488
Costco Cos. Inc. (c) ............ 18,225 1,315,617
Dollar Tree Stores Inc.(a) (c) .. 2,580 112,713
Staples Inc. (a) ................ 31,750 1,387,078
------------
8,491,896
Market
Shares Value
------ -----
Common Stocks (continued)
United States (continued)
Software - 11.88%
America Online Inc. (c) ......... 35,481 $5,135,875
At Home Corp. (a) (c) ........... 22,210 1,649,093
DoubleClick Inc. (a) (c) ........ 27,300 1,243,856
IMS Health Inc. ................. 41,850 3,157,059
Inktomi Corp. (a) (c) ........... 1,445 186,946
Intuit Inc. (a) (c) ............. 22,185 1,608,413
Microsoft Corp. (a) ............. 37,525 5,204,248
Wind River Systems Inc. (a) (c) . 18,585 873,495
------------
19,058,985
Telecommunications - 7.03%
General Instrument Corp. (a) .... 17,920 608,160
Global Crossing Ltd. (a) ........ 3,255 146,882
MCI WorldCom Inc. (a) ........... 11,180 792,383
Nokia Corp. - ADR (c) ........... 77,815 9,371,844
Qwest Communications
International
Inc. (a) (c) ................. 7,190 359,500
------------
11,278,769
------------
Total United States ............ 137,873,365
------------
Total Common Stocks
(cost $96,696,287) .......... 140,024,730
------------
Principal
Amount
------------
Corporate Bonds - 0.55%
Retail - 0.55%
Amazon.com Inc., 10.00%,
08/01/2008 .................. $ 1,375,000 886,875
------------
Total Corporate Bonds
(cost $859,405) ............. 886,875
------------
Principal Market
Amount Value
------ -----
Short Term Investments - 12.19%
Diversified Financial Services -
5.98%
CIT Group Inc., 5.30%,
01/04/1999 ..../............... $7,000,000 $6,996,908
Household Finance Corp., 5.25%,
01/04/1999 ................... 2,600,000 2,598,861
-------------
9,595,769
U.S. Government Agencies - 6.16%
Federal National Mortgage
Association,
Discount Note, 4.93%,
04/01/1999 .................. 10,000,000 9,876,750
Money Market Fund - 0.05%
SSgA Money Market Fund, 4.85%
(b) ......................... 76,396 76,396
-------------
Total Short Term Investments
(cost $19,548,915) ......... 19,548,915
-------------
Total Investments - 100%
(cost $117,104,607) ............. $160,460,520
=============
- --------------------------------------------------------------------------------
(a) Non-income producing security.
(b) Dividend yields change daily to reflect current market conditions. Rate is
the quoted yield as of December 31, 1998.
(c) All or a portion of this security has been loaned.
See notes to the financial statements.
<PAGE>
JNL CAPITAL GROWTH SERIES
JANUS CAPITAL CORPORATION
[JANUS LOGO] JAMES P. GOFF
OBJECTIVE:
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.
MONEY MANAGER COMMENTARY:
In a year marked by heightened volatility, equity markets posted mixed results
in 1998. During the first four months, equities advanced, driven by mild
inflation and strong corporate profits. Then, in the late summer and early fall,
stocks endured a precipitous sell-off after concern mounted over the viability
of selected emerging market economies. With the world on the verge of a
financial meltdown, the Federal Reserve intervened by lowering short-term
interest rates three times. This increased liquidity spurred stocks higher for
the remainder of the year in spite of severe political turmoil.
Turning to the Series, we are pleased to report that we outpaced our benchmark,
the S&P MidCap 400 Index, reflecting strong gains by our technology, media, and
pharmaceutical positions. Among our technology holdings, Vitesse Semiconductor
soared on robust demand in the voice and data communications market for its
high-speed, high-frequency chips. In the media arena, billboard company Outdoor
Systems shook off recession fears to rebound solidly. Consolidation continued to
drive revenue growth in the radio and outdoor media sectors, making earnings
less vulnerable to advertising budgets and the economy.
In the pharmaceutical industry, our position in Sepracor was a standout. The
company reformulates and patents single-isomer versions of existing drugs in a
procedure that eliminates many of the drugs' negative side effects. On the
downside, we were disappointed with the performance of Paychex, a payroll
processing company, which declined on concerns over a potential slowdown in
employment growth.
Looking ahead, we believe that this market is playing directly to our strengths
of strong research and the ability to identify all-weather growth companies. As
many large capitalization companies see their profit margins erode, the key will
be to own those companies that can meet or exceed Wall Street's estimates. In
this environment, we believe small and midcap companies continue to offer
significant opportunities.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
JNL CAPITAL GROWTH SERIES AND THE S&P MIDCAP 400 INDEX
[GRAPHIC]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
5/15 1995 $10,000 $10,000
6/30 $10,910 $10,417
9/30 $12,480 $11,432
12/31 1995 $13,352 $11,593
3/31 $14,793 $12,306
6/30 $15,626 $12,661
9/30 $16,330 $13,034
12/31 1996 $15,600 $12,823
3/31 $13,819 $12,633
6/30 $16,334 $14,489
9/30 $17,595 $16,817
12/31 1997 $17,810 $17,994
3/31 $20,039 $20,011
6/30 $21,029 $19,545
9/30 $17,864 $16,720
12/31 1998 $24,249 $21,429
AVERAGE ANNUAL
TOTAL RETURN
1 year .................. 35.16%
Since inception* ...... 27.59%
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT RETURN AND
PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY
BE MORE OR LESS THAN THEIR ORIGINAL COST.
PERFORMANCE NUMBERS ARE NET OF ALL SERIES OPERATING EXPENSES, BUT DO NOT REFLECT
THE DEDUCTION OF INSURANCE CHARGES.
- ------------
* Inception date May 15, 1995.
<PAGE>
JNL Series Trust
JNL Capital Growth Series
Statement of Assets and Liabilities
December 31, 1998
Assets
Investments in securities, at cost .......$ 81,212,008
================
Investments in securities, at value ......$ 109,365,603
Foreign currency .......................... 132,496
Receivables:
Dividends and interest ................. 14,033
Forward foreign currency
exchange contracts .................. 35,245
Foreign taxes recoverable............... 2,141
Fund shares sold........................ 17,952
Investment securities sold.............. 3,475,970
Collateral for securities loaned .......... 23,902,478
----------------
Total assets............................... 136,945,918
----------------
Liabilities
Payables:
Investment advisory fees................ 79,849
Forward foreign currency
exchange contracts .................. 31,399
Fund shares redeemed.................... 30,811
Investment securities purchased......... 1,832,604
Return of collateral for securities
loaned .................................... 23,902,478
Other liabilities.......................... 32,258
----------------
Total liabilities.......................... 25,909,399
================
Net assets................................$ 111,036,519
================
Net assets consist of:
Paid-in capital...........................$ 78,591,609
Undistributed net investment loss.......... (154,077)
Accumulated net realized gain on
investments
and foreign currency related items ..... 4,442,347
Net unrealized appreciation on:
Investments ............................ 28,153,595
Foreign currency related items ......... 3,045
----------------
Net assets ...............................$ 111,036,519
================
Total shares outstanding (no par
value),unlimited shares
authorized.............................. 5,355,548
================
Net asset value, offering and
redemption price per
share................................... 20.73
================
Statement of Operations
For the Year Ended December 31, 1998
Investment income
Dividends ..............................$ 224,603
Interest ............................... 107,304
Security lending ....................... 27,649
Foreign tax withholding ................ (10,731)
---------------
Total investment income ................... 348,825
---------------
Expenses
Investment advisory fees ............... 810,666
Custodian fees ......................... 43,213
Portfolio accounting fees .............. 24,645
Professional fees ...................... 23,140
Other .................................. 24,390
---------------
Total operating expenses .................. 926,054
Less:
Reimbursement from Adviser ............. -
---------------
Net expenses .............................. 926,054
---------------
Net investment loss ....................... (577,229)
---------------
Realized and unrealized gains (losses)
Net realized gain (loss) on:
Investments ............................ 13,077,232
Foreign currency related items ......... (275,392)
Net change in unrealized appreciation on:
Investments ............................ 15,365,434
Foreign currency related items ......... 20,059
---------------
Net realized and unrealized gains ......... 28,187,333
---------------
Net increase in net assets
from operations ........................$ 27,610,104
===============
See notes to the financial statements.
<PAGE>
JNL Series Trust
JNL Capital Growth Series
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year ended December 31,
----------------------------------
1998 1997
---------------- ----------------
<S> <C> <C>
Operations:
Net investment loss ................................................................. $ (577,229) $ (173,959)
Net realized gain (loss) on:
Investments ....................................................................... 13,077,232 250,781
Foreign currency related items .................................................... (275,392) (105,156)
Net change in unrealized appreciation on:
Investments ....................................................................... 15,365,434 10,161,826
Foreign currency related items ................................................... 20,059 55,218
---------------- ----------------
Net increase in net assets from operations ............................................ 27,610,104 10,188,710
---------------- ----------------
Distributions to shareholders:
From net investment income .......................................................... - (82,884)
From net realized gains on investment transactions .................................. (7,823,970) (157,215)
Return of capital ................................................................... - (331,198)
---------------- ----------------
Total distributions to shareholders ................................................... (7,823,970) (571,297)
---------------- ----------------
Share transactions:
Proceeds from the sale of shares .................................................... 37,270,227 40,823,421
Reinvestment of distributions ....................................................... 7,823,970 557,860
Cost of shares redeemed ............................................................. (27,592,611) (14,196,046)
---------------- ----------------
Net increase in net assets from share transactions .................................... 17,501,586 27,185,235
---------------- ----------------
Net increase in net assets ............................................................ 37,287,720 36,802,648
Net assets beginning of period ........................................................ 73,748,799 36,946,151
---------------- ----------------
Net assets end of period .............................................................. $ 111,036,519 $ 73,748,799
================ ================
Undistributed net investment loss ..................................................... $ (154,077) $ (17,785)
================ ================
</TABLE>
See notes to the financial statements.
<PAGE>
JNL Series Trust
JNL Capital Growth Series
Financial Highlights
<TABLE>
<CAPTION>
Period from Period from
April 1, May 15,
Year ended December 31, 1996 to 1995* to
------------------------------ December 31, March 31,
1998 1997 1996 1996
-------------- -------------- -------------- ------------
<S> <C> <C> <C> <C>
Selected Per Share Data
Net asset value, beginning of period ................................. $ 16.50 $ 14.46 $ 13.86 $ 10.00
-------------- -------------- -------------- ------------
Income from operations:
Net investment income (loss) ....................................... (0.12) (0.06) 0.06 -
Net realized and unrealized gains on investments and
foreign currency related items ................................... 5.92 2.23 0.70 4.70
-------------- -------------- -------------- ------------
Total income from operations ......................................... 5.80 2.17 0.76 4.70
-------------- -------------- -------------- ------------
Less distributions:
From net investment income ......................................... - (0.02) - -
From net realized gains on investment transactions ................. (1.57) (0.04) (0.16) (0.84)
Return of capital .................................................. - (0.07) - -
-------------- -------------- -------------- ------------
Total distributions .................................................. (1.57) (0.13) (0.16) (0.84)
-------------- -------------- -------------- ------------
Net increase ......................................................... 4.23 2.04 0.60 3.86
-------------- -------------- -------------- ------------
Net asset value, end of period........................................ $ 20.73 $ 16.50 $ 14.46 $ 13.86
============== ============== ============== ============
Total Return (a)...................................................... 35.16% 15.01% 5.45% 47.94%
Ratios and Supplemental Data:
Net assets, end of period (in thousands)............................ $ 111,037 $ 73,749 $ 36,946 $ 9,578
Ratio of net operating expenses to average net assets (b) (c)....... 1.09% 1.10% 1.09% 1.09%
Ratio of net investment income (loss) to average net assets (b) (c). (0.68)% (0.30)% 0.91% (0.49)%
Portfolio turnover.................................................. 128.95% 131.43% 115.88% 128.56%
Ratio information assuming no expense reimbursement or
fees paid indirectly:
Ratio of net operating expenses to average net assets (b).......... 1.09% 1.11% 1.27% 2.08%
Ratio of net investment income (loss) to average net assets (b).... (0.68)% (0.31)% 0.73% (1.48)%
- ------------------------------------------------------------------------------------------------------------------------------------
</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 Adviser's expense reimbursement and
fees paid indirectly.
See notes to the financial statements.
<PAGE>
JNL CAPITAL GROWTH SERIES
SCHEDULE OF INVESTMENTS
December 31, 1998
Market
Shares Value
------ -----
Common Stocks - 96.42%
United Kingdom - 6.61%
Commercial Services - 1.02%
Capita Group Plc ................ 121,827 $1,121,318
Retail - 5.59%
J.D. Wetherspoon Plc (a) ........ 599,719 1,783,514
PizzaExpress Plc ................ 324,868 4,328,695
----------
6,112,209
----------
Total United Kingdom ........... 7,233,527
United States - 89.81%
Advertising - 3.49%
HA-LO Industries Inc. (a) (c) ... 50,895 1,914,924
Outdoor Systems Inc. (a) ........ 63,475 1,904,250
----------
3,819,174
Aerospace & Defense - 1.03%
Orbital Sciences Corp. (a) (c) .. 25,565 1,131,251
Airlines - 1.79%
Ryanair Holdings Plc - ADR (a)
(c) ............................. 51,721 1,952,468
Banks - 3.61%
Firstar Corp. (c) ............... 30,640 2,857,180
U.S. Trust Corp. ................ 14,395 1,094,020
----------
3,951,200
Commercial Services - 18.29%
Apollo Group Inc. (a) (c) ....... 361,482 12,245,203
ITT Educational Services Inc. ... 83,080 2,824,720
Paychex Inc. .................... 83,312 4,285,361
Robert Half International Inc. .. 14,325 640,148
----------
19,995,432
Computers - 6.56%
Cisco Systems Inc. (a) (c) ...... 24,235 2,249,311
Equant NV (a) (c) ............... 9,814 665,512
Veritas Software Corp. (a) (c) .. 71,100 4,261,556
----------
7,176,379
Diversified Financial Services -
3.90%
Charles Schwab Corp. (c) ........ 36,385 2,044,382
HealthCare Financial Partners
Inc. (a) (c)..................... 55,690 2,220,639
----------
4,265,021
Electronics - 8.15%
Uniphase Corp. (a) (c) .......... 17,535 1,216,491
Vitesse Semiconductor Corp. (a) . 168,685 7,696,253
----------
8,912,744
Entertainment - 0.92%
Premier Parks Inc. (c) .......... 33,155 1,002,939
Market
Shares Value
------ -----
Common Stocks (continued)
United States (continued)
Health Care - 1.20%
Sofamor Danek Group Inc. (a) .... 10,780 $1,312,465
Home Furnishings - 0.45%
Gemstar Group Ltd. (a) .......... 8,655 495,499
Media - 15.62%
Adelphia Communications Inc. (a) 27,690 1,266,818
Chancellor Media Corp. (a) (c) .. 44,010 2,106,979
Clear Channel Communications
Inc. ............................ 47,600 2,594,200
Heftel Broadcasting Corp. (a) ... 90,570 4,460,572
Jacor Communications Inc. (a)
(c) ............................. 68,170 4,388,444
TCA Cable TV Inc. ............... 32,795 1,170,372
Univision Communications Inc.
(a) ............................. 30,255 1,094,853
----------
17,082,238
Pharmaceuticals - 9.95%
MedImmune Inc. (a) (c) .......... 33,829 3,363,871
Omnicare Inc. (c) ............... 96,675 3,359,456
Sepracor Inc. (a) (c) ........... 35,975 3,170,297
Watson Pharmaceutical Inc. (a)
(c) ............................. 15,720 988,395
----------
10,882,019
Retail - 3.80%
Amazon.com Inc. (a) (c) ......... 6,435 2,067,244
CVS Corp. ....................... 37,925 2,085,875
----------
4,153,119
Software - 3.66%
America Online Inc. (c) ......... 13,050 1,888,987
Broadcast.com Inc. (a) (c) ...... 7,375 564,188
Exodus Communications Inc. (a) .. 9,805 629,971
Infospace.com Inc. (a) (c) ...... 13,115 500,009
Lycos Inc. (a) (c) .............. 7,565 420,330
----------
4,003,485
Telecommunications - 7.39%
American Tower Corp. ............ 7,100 209,894
Crown Castle International Corp.
(a) ............................. 71,800 1,687,300
Global Crossing Ltd. (a) ........ 5,375 242,547
Level 3 Communications Inc. (a)
(c) ............................. 30,140 1,299,788
Metronet Communications Corp.
(a) ............................. 2,635 88,272
Nextlink Communications Inc. (a) 55 1,561
Qwest Communications
International
Inc. (a) (c) ................. 44,915 2,245,750
RSL Communications Ltd. (a) (c) . 36,035 1,063,032
Winstar Communications Inc. (a)
(c) ............................. 31,970 1,246,830
----------
8,084,974
----------
Total United States ............ 98,220,407
----------
Total Common Stocks
(cost $77,300,339) .......... 105,453,934
----------
Principal Market
Amount Value
------ -----
Short Term Investments - 3.58%
Diversified Financial Services -
3.56%
CIT Group Inc., 5.30%,
01/04/1999 ......................$3,900,000 $3,898,277
Money Market Fund - 0.02%
SSgA Money Market Fund, 4.85%
(b) ............................. 13,392 13,392
----------
Total Short Term Investments
(cost $3,911,669) ........... 3,911,669
----------
Total Investments -- 100%
(cost $81,212,008) .............. $109,365,603
============
- --------------------------------------------------------------------------------
(a) Non-income producing security.
(b) Dividend yields change daily to reflect current market conditions. Rate is
the quoted yield as of December 31, 1998.
(c) All or a portion of this security has been loaned.
See notes to the financial statements.
<PAGE>
JNL GLOBAL EQUITIES SERIES
JANUS CAPITAL CORPORATION
[JANUS LOGO] HELEN YOUNG HAYES
OBJECTIVE:
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.
MONEY MANAGER COMMENTARY:
Extreme volatility gripped the global equity markets in 1998. After a
substantial run-up during the first six months of the year, stocks took a turn
for the worse following Russia's announcement that it could not service its debt
and that it would be forced to devalue its currency. In response to the Russian
meltdown, investors indiscriminately sold securities with any degree of risk.
The selling was compounded by several hedge funds, which were forced to sell
securities when several arbitrage techniques that they had employed backfired on
them. With liquidity nearly absent, central banks from around the world lowered
interest rates through year-end. With liquidity restored, investors returned to
riskier securities, including stocks. Consequently, equities moved higher for
the remainder of the year, with selected U.S. technology stocks exhibiting
particular strength.
The Series outperformed its benchmark, the MSCI World Index, due to strong
performance from a number of telecommunications and technology companies. For
instance, our position in Nokia, the Finnish cellular phone company, enjoyed a
wonderful year as it continued to take market share in a growing market.
Mannesmann, the German conglomerate, also had a strong year as the company
continued to transform itself into a telecommunications company. Additionally,
the company is finding the European competitive landscape, which has recently
been deregulated, to be very receptive to its strategies. On the downside, our
European financial holdings, such as UBS, were sold-off dramatically in the
summer after investors speculated about the magnitude of their proprietary
losses in Russia.
Looking ahead, with worldwide commodity prices currently at depressed levels,
inflationary pressures remain benign, which is keeping a lid on interest rates
around the world. This bodes well for equity markets in the U.S. and Europe.
However, the uncertain economic outlook for Japan has led us to keep a
relatively light weighting in Asian stocks. We will continue to concentrate on
companies that can grow their earnings regardless of the broader economic
environment.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
JNL GLOBAL EQUITIES SERIES AND THE MSCI WORLD INDEX
[GRAPHIC]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
5/15 1995 $10,000 $10,000
6/30 $10,680 $10,026
9/30 $12,240 $10,543
12/31/95 $12,926 $10,999
3/31 $14,150 $11,402
6/30 $15,735 $11,623
9/30 $16,064 $11,730
12/31/96 $16,979 $12,221
3/31 $17,974 $12,269
6/30 $19,996 $14,130
9/30 $21,146 $14,548
12/31/97 $20,226 $14,204
3/31 $23,698 $16,336
6/30 $25,630 $16,464
9/30 $21,291 $14,444
12/31/98 $25,661 $17,440
AVERAGE ANNUAL
TOTAL RETURN
1 year .................. 26.87%
Since inception * ...... 29.59%
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT RETURN AND
PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY
BE MORE OR LESS THAN THEIR ORIGINAL COST.
PERFORMANCE NUMBERS ARE NET OF ALL BUT DO NOT REFLECT THE DEDUCTION OF INSURANCE
CHARGES.
- ------------
* Inception date May 15, 1995.
<PAGE>
JNL Series Trust
JNL Global Equities Series
Statement of Assets and Liabilities
December 31, 1998
Assets
Investments in securities, at cost .......$ 176,454,446
================
Investments in securities, at value ......$ 239,302,664
Foreign currency .......................... 2,359,387
Receivables:
Dividends and interest .................. 32,947
Forward foreign currency
exchange contracts .................... 234,505
Foreign taxes recoverable ............... 130,516
Fund shares sold ........................ 98,093
Investment securities sold .............. 186,545
Reimbursement from Adviser ............. 97,982
Collateral for securities loaned .......... 23,820,421
----------------
Total assets .............................. 266,263,060
----------------
Liabilities
Payables:
Investment advisory fees ................ 189,878
Forward foreign currency
exchange contracts ................... 1,063,333
Fund shares redeemed .................... 152,545
Investment securities purchased ......... 561,436
Return of collateral for securities
loaned .................................... 23,820,421
Other liabilities ......................... 89,959
----------------
Total liabilities ......................... 25,877,572
================
Net assets ...............................$ 240,385,488
================
Net assets consist of:
Paid-in capital ..........................$ 179,835,657
Undistributed net investment income ....... 434,865
Accumulated net realized loss on
investments
and foreign currency related items
on investments.......................... (1,909,005)
Net unrealized appreciation (depreciation) on:
Investments.............................. 62,848,218
Foreign currency related items........... (824,247)
================
Net assets ...............................$ 240,385,488
================
Total shares outstanding (no par
value),
unlimited shares authorized ............ 10,870,018
================
Net asset value, offering and
redemption
price per share ........................$ 22.11
================
Statement of Operations
For the Year Ended December 31, 1998
Investment income
Dividends ...............................$ 2,030,179
Interest ................................ 721,100
Foreign tax withholding ................. (243,317)
---------------
Total investment income ................... 2,507,962
---------------
Expenses
Investment advisory fees ................ 1,955,416
Custodian fees .......................... 454,253
Portfolio accounting fees ............... 42,255
Professional fees ....................... 54,730
Other ................................... 60,729
---------------
Total operating expenses .................. 2,567,383
Less:
Reimbursement from Adviser ............. (315,056)
---------------
Net expenses............................... 2,252,327
---------------
Net investment income ..................... 255,635
---------------
Realized and unrealized gains (losses)
Net realized gain (loss) on:
Investments ............................. 630,606
Foreign currency related items .......... (2,531,119)
Net change in unrealized appreciation
(depreciation) on:
Investments ............................. 45,926,872
Foreign currency related items. ......... (758,325)
---------------
Net realized and unrealized gains ......... 43,268,034
---------------
Net increase in net assets
from operations .........................$ 43,523,669
===============
See notes to the financial statements.
<PAGE>
JNL Series Trust
JNL Global Equities Series
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year ended December 31,
----------------------------------
1998 1997
---------------- ----------------
<S> <C> <C>
Operations:
Net investment income ................................................................... $ 255,635 $ 350,018
Net realized gain (loss) on:
Investments ........................................................................... 630,606 2,328,631
Foreign currency related items ........................................................ (2,531,119) 1,151,326
Net change in unrealized appreciation (depreciation) on:
Investments ........................................................................... 45,926,872 10,283,961
Foreign currency related items ........................................................ (758,325) (207,133)
---------------- ----------------
Net increase in net assets from operations ................................................ 43,523,669 13,906,803
---------------- ----------------
Distributions to shareholders:
From net investment income .............................................................. (715,943) -
From net realized gains on investment transactions ...................................... - (5,237,204)
---------------- ----------------
Total distributions to shareholders ....................................................... (715,943) (5,237,204)
---------------- ----------------
Share transactions:
Proceeds from the sale of shares ........................................................ 83,519,461 109,725,346
Reinvestment of distributions ........................................................... 715,943 5,176,815
Cost of shares redeemed ................................................................. (37,707,917) (21,159,959)
---------------- ----------------
Net increase in net assets from share transactions ........................................ 46,527,487 93,742,202
---------------- ----------------
Net increase in net assets ................................................................ 89,335,213 102,411,801
Net assets beginning of period ............................................................ 151,050,275 48,638,474
---------------- ----------------
Net assets end of period .................................................................. $ 240,385,488 $ 151,050,275
================ ================
Undistributed net investment income ....................................................... $ 434,865 $ 633,816
================ ================
</TABLE>
See notes to the financial statements.
<PAGE>
JNL Series Trust
JNL Global Equities Series
Financial Highlights
<TABLE>
<CAPTION>
Period from Period from
April 1, May 15,
Year ended December 31, 1996 to 1995* to
------------------------------- December 31, March 31,
1998 1997 1996 1996
------------------------------- --------------- ------------
<S> <C> <C> <C> <C>
Selected Per Share Data
Net asset value, beginning of period................................. $ 17.48 $ 15.20 $ 13.75 $ 10.00
----------------- ------------- --------------- ------------
Income from operations:
Net investment income ............................................. 0.04 0.07 0.03 0.10
Net realized and unrealized gains on investments and
foreign currency related items ................................. 4.66 2.84 2.72 4.02
----------------- ------------- --------------- ------------
Total income from operations ........................................ 4.70 2.91 2.75 4.12
----------------- ------------- --------------- ------------
Less distributions:
From net investment income ........................................ (0.07) - (0.08) -
From net realized gains on investment transactions ................ - (0.63) (0.90) (0.37)
Return of capital ................................................. - - (0.32) -
----------------- ------------- --------------- ------------
Total distributions ................................................. (0.07) (0.63) (1.30) (0.37)
----------------- ------------- --------------- ------------
Net increase ........................................................ 4.63 2.28 1.45 3.75
----------------- ------------- --------------- ------------
Net asset value, end of period ...................................... $ 22.11 $ 17.48 $ 15.20 $ 13.75
================= ============= =============== ============
Total Return (a) .................................................... 26.87% 19.12% 19.99% 41.51%
Ratios and Supplemental Data:
Net assets, end of period (in thousands) .......................... $ 240,385 151,050 48,638 16,141
Ratio of net operating expenses to average net assets (b) (c) ..... 1.14% 1.15% 1.14% 1.15%
Ratio of net investment income to average net assets (b) (c) ...... 0.13% 0.33% 0.37% 0.39%
Portfolio turnover ................................................ 81.46% 97.21% 52.02% 142.36%
Ratio information assuming no expense reimbursement or
fees paid indirectly:
Ratio of net operating expenses to average net assets (b) ......... 1.30% 1.37% 1.63% 2.25%
Ratio of net investment income (loss) to average net assets (b).... (0.03)% 0.11% (0.12)% (0.71)%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Commencement of operations.
(a) Assumes investment at net asset value at the beginning of the period,
reinvestment of all distributions, and a complete redemption of the
investment at the net asset value at the end of the period. Total Return is
not annualized 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 Adviser's expense reimbursement and
fees paid indirectly.
See notes to the financial statements.
<PAGE>
JNL GLOBAL EQUITIES SERIES
SCHEDULE OF INVESTMENTS
December 31, 1998
Market
Shares Value
------ -----
Common Stocks - 88.29%
Austria - 0.14%
Banks - 0.14%
Bank Austria AG ................. 6,593 $ 335,259
Denmark - 0.21%
Banks - 0.18%
Kapital Holding ................. 1,730 85,626
Unidanmark A/S .................. 3,854 348,200
-----------
433,826
Transportation - 0.03%
SAS Danmark A/S (c) ............. 5,282 59,756
-----------
Total Denmark .................. 493,582
Finland - 3.19%
Food - 0.17%
Raisio Group Plc ................ 36,582 401,763
Insurance - 0.33%
Sampo Insurance Co. Ltd. ........ 20,615 782,311
Software - 0.60%
Tieto Corp. (c) ................. 32,123 1,430,069
Telecommunications - 2.09%
Nokia Oyj "A" ................... 41,308 5,022,742
-----------
Total Finland .................. 7,636,885
France - 8.37%
Auto Manufacturers - 0.72%
Renault SA ...................... 38,623 1,733,925
Auto Parts & Equipment - 0.76%
Valeo SA ........................ 23,081 1,818,078
Commercial Services - 1.63%
Vivendi (c) ..................... 15,059 3,905,482
Computers - 2.11%
Atos SA (a) ..................... 5,491 1,312,105
Cap Gemini SA (c) ............... 20,284 3,254,292
Equant NV ....................... 6,777 471,396
-----------
5,037,793
Engineering & Construction - 0.69%
Suez Lyonnaise des Eaux ......... 8,054 1,653,728
Food - 0.83%
Group Danone .................... 6,906 1,976,319
Holding Companies - Diversified -
0.33%
Lagardere S.C.A. ................ 18,703 794,484
Pharmaceuticals - 1.27%
Rhone-Poulene SA ................ 38,175 1,963,715
Market
Shares Value
------ -----
Common Stocks (continued)
France (continued)
Pharmaceuticals (continued)
Sanofi SA ....................... 6,595 $1,085,208
-----------
3,048,923
Telecommunications - 0.03%
Alcatel Alsthom SA .............. 561 68,632
-----------
Total France ................... 20,037,364
Germany - 4.84%
Auto Manufacturers - 0.55%
DaimlerChrysler AG (a) .......... 13,273 1,310,097
Banks - 0.77%
Bayerische Vereinsbank AG ....... 2,366 185,265
Deutsche Pfandbrief &
Hypothekenban
AG ........................... 18,866 1,652,728
-----------
1,837,993
Chemicals - 0.39%
Hoechst AG ...................... 22,689 940,724
Insurance - 0.07%
Ergo Versicherungs Gruppe AG (c) 1,070 176,557
Machinery - 2.76%
Mannesmann AG ................... 57,542 6,594,577
Manufacturing - 0.13%
VEBA AG ........................ 5,154 308,325
Pharmaceuticals - 0.17%
Merck KgaA ..................... 9,215 414,692
-----------
Total Germany .................. 11,582,965
Greece - 0.06%
Telecommunications - 0.06%
Panafon Hellenic Telecom SA ..... 5,731 153,575
Hong Kong - 0.40%
Telecommunications - 0.40%
China Telecom Ltd. (a) .......... 548,000 951,340
Italy - 3.84%
Banks - 1.33%
Banca Commerciale Italiana ...... 184,005 1,268,655
Banca di Roma (a) (c) ........... 804,681 1,362,670
Credito Italiano SpA ............ 94,601 560,414
-----------
3,191,739
Telecommunications - 2.51%
Telecom Italia Mobile SpA (a) ... 197,255 1,455,448
Telecom Italia SpA .............. 532,386 4,539,988
-----------
5,995,436
-----------
Total Italy .................... 9,187,175
<PAGE>
JNL GLOBAL EQUITIES SERIES
SCHEDULE OF INVESTMENTS (continued)
Market
Shares Value
------ -----
Common Stocks (continued)
Japan - 6.94%
Auto Manufacturing - 0.34%
Honda Motor Co. Ltd. ............ 25,000 $ 820,433
Auto Parts and Equipment - 0.04%
Bridgestone Corp. ............... 4,000 90,756
Beverages - 0.67%
Kirin Brewery Co. Ltd. .......... 126,000 1,604,954
Computers - 0.40%
Fujitsu Ltd. (c) ................ 71,100 946,533
Cosmetics & Personal Care - 0.35%
Kao Corp. ....................... 37,000 834,586
Home Furnishings - 0.77%
Sony Corp. ...................... 25,300 1,841,831
Pharmaceuticals - 1.37%
Takeda Chemical Industries ...... 85,000 3,270,677
Retail - 0.41%
Ito-Yokado Co. Ltd. ............. 14,000 978,328
Semiconductors - 0.08%
Rohm Co. Ltd. ................... 2,000 182,043
Telecommunications - 2.51%
Nippon Telegraph & Telephone
Corp. ........................... 7 53,994
NTT Data Corp. (c) .............. 275 1,364,662
NTT Mobile Communications
Network Inc. .................... 112 4,606,811
------------
6,025,467
------------
Total Japan .................... 16,595,608
Netherlands - 5.09%
Chemicals - 0.29%
Akzo Nobel ...................... 15,458 703,497
Computers - 0.97%
Getronics NV .................... 46,958 2,324,530
Electronics - 0.69%
Philips Electronics NV .......... 19,269 1,292,327
Simac Techniek NV ............... 14,410 364,334
------------
1,656,661
Food - 0.55%
Koniklijke Ahold NV ............. 35,621 1,315,855
Household Products - 0.44%
Unilever NV ..................... 12,209 1,043,032
Market
Shares Value
------ -----
Common Stocks (continued)
Netherlands (continued)
Insurance - 0.27%
Aegon NV ........................ 5,210 $ 639,498
Media - 1.88%
Wolters Kluwer NV ............... 21,027 4,497,072
------------
Total Netherlands .............. 12,180,145
Norway - 0.09%
Airlines - 0.04%
SAS Norge ASA "B" ............... 11,734 98,832
Banks - 0.05%
Den Norske Bank ASA ............. 36,015 124,656
------------
Total Norway ................... 223,488
Portugal - 0.24%
Building Materials - 0.14%
Cimentos de Portugal SA ......... 10,385 331,653
Telecommunications - 0.10%
Portugal Telecom SA ............. 5,494 252,012
------------
Total Portugal ................. 583,665
Spain - 1.98%
Banks - 0.74%
Banco Bibao Vizcaya ............. 26,672 417,571
Banco Central Hispanoamericano
(c) ............................. 53,883 638,846
Corporacion Bancaria de Espana
SA .............................. 27,840 719,899
-----------
1,776,316
Retail - 0.79%
Tele Pizza SA (a) ............... 200,238 1,902,063
Telecommunications - 0.45%
Telefonica SA ................... 24,023 1,066,600
------------
Total Spain .................... 4,744,979
Sweden - 4.03%
Airlines - 0.08%
SAS Sverige AB .................. 21,491 197,061
Auto Manufacturers - 0.10%
Volvo AB ........................ 10,916 249,899
Banks - 0.26%
Skandinaviska Enskilda Banken ... 59,297 624,002
Commercial Services - 1.13%
Securities AB ................... 173,800 2,695,303
Computers - 0.20%
WM-Data AB ...................... 11,219 477,769
Market
Shares Value
------ -----
Common Stocks (continued)
Sweden (continued)
Health Care - 0.02%
Ortivus AB "B" (a) .............. 5,678 $ 41,232
Home Furnishings - 0.94%
Electrolux AB "B" ............... 131,473 2,257,346
Metals & Mining - 1.04%
Assa Abloy AB ................... 64,623 2,465,677
Pharmaceuticals - 0.25%
Astra AB "A" .................... 22,025 448,643
Pharmacia & Upjohn Inc. ......... 2,886 161,264
------------
609,907
Telecommunications - 0.01%
Telefonaktiebolaget LM Ericsson . 891 21,165
------------
Total Sweden ................... 9,639,361
Switzerland - 5.41%
Banks - 0.60%
Julius Baer Holding AG (c) ...... 95 315,698
UBS AG (a) ...................... 3,656 1,123,122
------------
1,438,820
Commercial Services - 0.18%
Adecco SA ....................... 941 429,502
Insurance - 1.11%
Baloise Holdings Ltd. ........... 804 834,025
Schweizeriche
Lebensversicherungs und
Rentenanstalt ................ 408 302,948
Zurich Allied AG ................ 2,037 1,508,065
------------
2,645,038
Leisure Time - 0.18%
Kuoni Reisen AG ................. 111 440,380
Pharmaceuticals - 1.90%
Novartis ........................ 1,138 2,236,733
Roche Holding AG ................ 189 2,305,918
------------
4,542,651
Telecommunications - 1.44%
Swisscom AG (a) ................. 8,229 3,444,475
------------
Total Switzerland .............. 12,940,866
United Kingdom - 10.31%
Advertising - 0.01%
WPP Group Plc ................... 3,255 19,739
Banks - 0.98%
Lloyds TSB Group Plc ............ 157,862 2,247,678
Beverages - 0.23%
Diageo Plc (a) .................. 50,335 558,209
Market
Shares Value
------ -----
Common Stocks (continued)
United Kingdom (continued)
Commercial Services - 3.08%
Capita Group Plc ................ 24,844 $ 228,669
Hays Plc ........................ 283,963 2,500,422
Rentokil Initial Plc ............ 617,293 4,666,362
------------
7,395,453
Computers - 1.64%
Logica Plc ...................... 315,291 2,739,611
Misys Plc ....................... 103,494 759,999
SEMA Group Plc .................. 43,985 433,346
------------
3,932,956
Diversified Financial Services -
0.21%
Amvescap Plc .................... 65,618 506,934
Electronics - 0.01%
Electrocomponents Plc ........... 5,269 34,753
Food - 0.79%
Compass Group Plc ............... 166,226 1,897,280
Holding Companies Diversified -
0.24%
Tomkins Plc ..................... 122,660 582,834
Manufacturing - 0.73%
Siebe Plc ....................... 305,183 1,199,132
Williams Plc .................... 96,062 549,017
------------
1,748,149
Pharmaceuticals - 0.70%
Glaxo Wellcome Plc .............. 35,300 1,215,179
SmithKline Beecham Plc .......... 32,489 450,274
------------
1,665,453
Software - 0.02%
JBA Holdings Plc ................ 18,513 58,439
Telecommunications - 1.67%
Colt Telecom Group Plc (a) ...... 41,967 634,490
Energis Plc (a) ................. 117,767 2,621,827
Orange Plc (a) .................. 7,340 84,144
Vodafone Group Plc .............. 41,333 671,601
------------
4,012,062
------------
Total United Kingdom ........... 24,659,939
United States - 33.15%
Agriculture - 0.06%
Delta & Pine Land Co. (c) ....... 3,620 133,940
Auto Manufacturers - 0.46%
DaimlerChrysler AG .............. 11,422 1,097,222
Beverages - 0.09%
Coca-Cola Femsa SA-ADR (c) ...... 16,125 213,656
Market
Shares Value
------ -----
Common Stocks (continued)
United States (continued)
Biotechnology - 0.38%
Monsanto Co. .................... 19,155 $ 909,863
Chemicals - 0.01%
Solutia Inc. .................... 925 20,697
Computers - 5.81%
Cisco Systems Inc. (a) .......... 119,700 11,109,656
Dell Computer Corp. (a) ......... 6,910 505,726
EMC Corp. ....................... 2,520 214,200
Equant NV (a) (c)................ 13,336 904,348
International Business Machines 1,150 212,463
Corp. ...........................
Sun Microsystems Inc. (a) ....... 11,310 968,419
------------
13,914,812
Cosmetics & Personal Care - 1.15%
Estee Lauder Cos. Inc. (c) ...... 32,265 2,758,658
Electronics - 0.59%
Philips Electronics NV - NYS .... 20,709 1,401,740
Investment Company - 0.06%
Romania Investment Fund ......... 204 148,127
Leisure Time - 0.15%
Carnival Corp. .................. 7,395 354,960
Manufacturing - 3.20%
Tyco International Ltd. ......... 101,414 7,650,419
Media - 7.22%
Clear Channel Communications
Inc. ............................ 27,015 1,472,318
Comcast Corp. ................... 55,650 3,265,959
Fox Entertainment Group Inc.
(a) ............................. 7,180 180,846
Grupo Televisa SA-GDR (c) ....... 26,415 652,120
MediaOne Group Inc. (a) ......... 12,800 601,600
Tele-Communications Inc. (a) (c). 98,965 5,474,002
Time Warner Inc. ................ 90,940 5,643,964
------------
17,290,809
Pharmaceuticals - 4.82%
America Home Products Corp. ..... 12,805 721,082
Elan Corp. Plc - ADR (a) (c) .... 23,240 1,616,633
Pfizer Inc. ..................... 13,020 1,633,196
Pharmacia & Upjohn Inc. ......... 55,080 3,118,905
SmithKline Beecham Plc - ADR .... 15,600 1,084,200
Warner-Lambert Co. .............. 44,749 3,364,565
------------
11,538,581
Software - 3.68%
America Online Inc. (c) ......... 1,130 163,569
Intuit Inc. (a) (c) ............. 18,710 1,356,475
Microsoft Corp. (a) ............. 52,605 7,295,656
------------
8,815,700
Market
Shares Value
------ -----
Common Stocks (continued)
United States (continued)
Telecommunications - 5.47%
AirTouch Communications Inc. (a). 25,860 $1,865,153
Alcatel Alsthom SA - ADR (c)..... 10,790 263,681
MCI WorldCom Inc. (a) ........... 51,560 3,699,430
Nokia Corp. - ADR ............... 36,995 4,455,585
Qwest Communications
International
Inc. (a) ..................... 1,695 84,750
Telecom Argentina SA - ADR (c)... 3,255 89,513
Telecomunicacoes Braileriras SA-
ADR (c) ...................... 15,500 1,126,656
Telefonaktiebolaget LM Ericsson 19,552 468,026
- ADR
Telefonica de Argentina SA -
ADR (c).......................... 13,840 386,655
Telefonica SA-ADR (c)............ 4,743 642,084
------------
13,081,533
------------
Total United States ............ 79,330,717
------------
Total Common Stocks
(cost $148,602,320) ......... 211,276,913
------------
Preferred Stocks - 1.55%
Brazil - 0.00%
Oil & Gas Producers - 0.00%
Petroleo Brasileiro SA .......... 500 57
Germany - 1.55%
Auto Manufacturers - 0.54%
Porsche AG ...................... 569 1,297,371
Insurance - 0.56%
Marschollek Laut und Partner AG . 2,336 1,331,572
Software - 0.45%
SAP AG (a) ...................... 2,278 1,086,923
------------
Total Germany .................. 3,715,866
------------
Total Preferred Stocks
(cost $3,545,321) ........... 3,715,923
------------
Warrants - 0.00%
Germany - 0.00%
Insurance - 0.00%
Muenchener Rueckversicher ....... 65 3,023
------------
Total Warrants (cost $0) ...... 3,023
------------
Principal
Amount
------
Short Term Investments - 10.16%
Diversified Financial Services -
5.97%
CIT Group Inc., 5.30%,
01/04/1999 ......................$10,000,000 9,995,583
Household Finance Corp., 5.25%,
01/04/1999 .................. 4,300,000 4,298,119
------------
14,293,702
Principal Market
Amount Value
------ -----
Short Term Investments (continued)
U.S. Government Agencies - 4.15%
Federal National Mortgage
Association
Discount Note, 5.04%,
02/19/1999 ......................$10,000,000 $9,931,400
Money Market Fund - 0.04%
SSgA Money Market Fund, 4.85%,
(b) ............................. 81,703 81,703
------------
Total Short Term Investments
(cost $24,306,805) .......... 24,306,805
------------
Total Investments - 100%
(cost $176,454,446) ............ $239,302,664
==============
- --------------------------------------------------------------------------------
(a) Non-income producing security.
(b) Dividend yield change daily to reflect current market conditions. Rate is
the quoted yield as December 31, 1998.
(c) All or a portion of this security has been loaned.
See notes to the financial statements.
<PAGE>
JNL/ALLIANCE GROWTH SERIES
ALLIANCE CAPITAL MANAGEMENT L.P.
JAMES G. REILLY
[ALLIANCE CAPITAL LOGO] SYED HASNAIN
OBJECTIVE:
JNL/Alliance Growth Series seeks as its investment objective long-term growth of
capital by investing primarily in common stocks or securities with common stock
characteristics which demonstrate the potential for appreciation.
MONEY MANAGER COMMENTARY:
We are pleased to report that over the period February 28, 1998 to December 31,
1998, the portfolio returned 32.80%. The S&P 500 rose 18.61% and the Russell
1000 rose 25.3% over the same period. The Series' outperformance versus the
indices was driven by strong stock selection within our investment process and,
especially in the third quarter, our decision to increase holdings in a few
stocks that had been over-sold despite intact fundamentals.
Strong performing sectors for the year were technology and retailing where the
portfolio is overweight versus the S&P 500. Key technology holdings include
Cisco Systems +152% for the year, Dell +255%, Nokia +254%, and Microsoft +117%.
Discount retailers produced excellent same store sales and therefore Home Depot
+109%, Dayton Hudson +56%, Kohl's +76% and Wal-Mart +108% all performed well.
Pharmaceutical stocks were also exceptional performers, showing strong revenue
growth and promising new drug pipelines. Significant positions included Bristol
Myers Squibb, which was up 41% for the year, Pfizer +67%, Schering Plough +81%,
and Warner Lambert +77%. The overweight position in financial stocks hurt
performance. Several of these holdings have outperformed the market including
American International Group, Federal Home Loan Mortgage Corporation and MBNA
Corporation and continue to be substantial holdings in the portfolio. However,
we have reduced positions in certain money center banks and brokers as we are
less confident in their ability to generate consistent earnings growth.
Our investment approach is to hold fairly concentrated positions in our top
twenty-five holdings. We research these companies thoroughly and then trade
around a core position taking advantage of market and individual stock
volatility. Stock selection accounts for two-thirds of the outperformance,
intra-period trading around core positions accounts for one-third of the
outperformance.
The portfolio remains weighted toward industry dominant companies in rapidly
growing sectors of the economy. The lack of pricing power for many corporations
forces a renewed focus on volume growth and expense control. The technology,
retailing, and pharmaceutical stocks within the portfolio have demonstrated an
ability to grow earnings in excess of the market as a whole despite minimal
pricing power. The financial stocks remaining in the portfolio have also
demonstrated consistent earnings power and will likely help dampen the
volatility of the portfolio.
We believe that 1999 will be another year of moderate growth for the U.S. and
Europe with subdued inflation. Thus, 1999 may be similar to 1998 in many
respects. Interest rates should remain low under a vigilant Federal Reserve and
European Central Bank. The Southeast Asian crisis appears to be bottoming with
painful progress in Korea and Thailand. China's ability to avoid currency
devaluation in 1998 is evidence of some strength in its economy. Japan's
restructuring of its banking system also appears to be moving forward. Although
the potential for a mid-year correction in the stock market related to Year 2000
computer problems is a possibility, we believe any correction will be short
lived. We remain concerned about Russian instability and Brazil's financial
crisis but would expect the world community to provide sufficient assistance to
avoid a dramatic spillover impact elsewhere. With low interest rates around 5%
as modest competition for capital and with the aging populations in developed
nations increasing savings, U.S. equities should benefit from continued domestic
and international fund flows. Under this environment, large company growth
stocks should likely outperform again.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
JNL/ALLIANCE GROWTH SERIES AND THE S&P 500 INDEX
[GRAPHIC]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
03/02/98 $10,000.00 $10,050.00
03/31/98 $10,410.00 $10,550.84
04/30/98 $10,680.00 $10,646.86
05/31/98 $10,540.00 $10,446.70
06/30/98 $11,280.00 $10,858.30
07/31/98 $11,530.00 $10,742.97
08/31/98 $9,360.00 $9,191.22
09/30/98 $10,060.00 $9,780.05
10/31/98 $11,050.00 $10,574.83
11/30/98 $11,770.00 $11,215.52
12/31/98 $13,280.00 $11,861.40
TOTAL RETURN
FOR THE PERIOD
FROM MARCH 2, 1998* TO
DECEMBER 31, 1998 ... 32.80%
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT RETURN AND
PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY
BE MORE OR LESS THAN THEIR ORIGINAL COST.
PERFORMANCE NUMBERS ARE NET OF ALL SERIES OPERATING EXPENSES, BUT DO NOT REFLECT
THE DEDUCTION OF INSURANCE CHARGES.
- -------------
* Commencement of operations.
<PAGE>
JNL Series Trust
JNL/Alliance Growth Series
<PAGE>
Statement of Assets and Liabilities
December 31, 1998
Assets
Investments in securities, at cost .......$ 3,824,281
================
Investments in securities, at value ......$ 4,643,035
Dividends and interest receivable ......... 1,809
----------------
Total assets .............................. 4,644,844
----------------
Liabilities
Payables:
Investment advisory fees ............... 2,732
Fund shares redeemed ................... 80
Investment securities purchased ........ 56,901
Other liabilities ......................... 11,926
----------------
Total liabilities ......................... 71,639
================
Net assets ...............................$ 4,573,205
================
Net assets consist of:
Paid-in capital ..........................$ 3,787,736
Undistributed net investment income ....... -
Accumulated net realized loss
on investments ......................... (33,285)
Net unrealized appreciation on
investments ............................... 818,754
================
Net assets................................$ 4,573,205
================
Total shares outstanding (no par
value),
unlimited shares authorized ............ 344,467
================
Net asset value, offering and
redemption redemption
price per share .......................$ 13.28
================
Statement of Operations
For the Period Ended December 31, 1998*
Investment income
Dividends ..............................$ 18,417
Interest ............................... 2,504
Foreign tax withholding ................ (193)
---------------
Total investment income ................... 20,728
---------------
Expenses
Investment advisory fees ............... 19,016
Custodian fees ......................... 13,955
Portfolio accounting fees .............. 13,984
Professional fees ...................... 4,363
Other .................................. 807
---------------
Total operating expenses .................. 52,125
Less:
Reimbursement from Adviser ............. (29,429)
---------------
Net expenses .............................. 22,696
---------------
Net investment loss ....................... (1,968)
---------------
Realized and unrealized gains (losses)
Net realized loss on investments .......... (31,317)
Net change in unrealized appreciation on
investments ............................ 818,754
---------------
Net realized and unrealized gains ......... 787,437
---------------
Net increase in net assets
from operations ........................$ 785,469
===============
- ----------------------------------------------------------
* For period beginning March 2, 1998 (commencement of
operations).
See notes to the financial statements.
<PAGE>
JNL Series Trust
JNL/Alliance Growth Series
Statement of Changes in Net Assets
Period from
March 2,
1998* to
December 31,
1998
----------------
Operations:
Net investment loss ....................... $ (1,968)
Net realized loss on investments .......... (31,317)
Net change in unrealized appreciation on
investments ............................ 818,754
----------------
Net increase in net assets from
operations ................................. 785,469
----------------
Distributions to shareholders:
From net investment income................ -
From net realized gains on investment
transactions .......................... -
----------------
Total distributions to shareholders ........ -
----------------
Share transactions:
Proceeds from the sale of shares ......... 5,288,197
Reinvestment of distributions ............ -
Cost of shares redeemed .................. (1,500,461)
----------------
Net increase in net assets from
share transactions ...................... 3,787,736
----------------
Net increase in net assets ................. 4,573,205
Net assets beginning of period ............. -
----------------
Net assets end of period ................... $4,573,205
================
Undistributed net investment income ........ $ -
================
Financial Highlights
Period from
March 2,
1998* to
December 31,
1998
-----------------
Selected Per Share Data
Net asset value, beginning of period ....... $10.00
-----------------
Income from operations:
Net investment loss ...................... (0.01)
Net realized and unrealized gains on
investments ........................... 3.29
-----------------
Total income from operations ............... 3.28
-----------------
Less distributions:
From net investment income ............... -
From net realized gains on
investment transactions ............... -
-----------------
Total distributions ........................ -
-----------------
Net increase ............................... 3.28
-----------------
Net asset value, end of period ............. $13.28
=================
Total Return (a) ........................... 32.80%
Ratios and Supplemental Data:
Net assets, end of period (in
thousands) ............................... $4,573
Ratio of net operating expenses to
average
net assets (b) (c) .................... 0.925%
Ratio of net investment loss to average
net assets (b) (c) .................... (0.08)%
Portfolio turnover ....................... 136.69%
Ratio information assuming no
expense reimbursement:
Ratio of net operating expenses to
average net assets (b) ................... 2.13%
Ratio of net investment loss to average
net assets (b) ........................ (1.28)%
- --------------------------------------------------------------
* 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 period ended December 31, 1998.
(b) Annualized for the period ended December 31, 1998.
(c) Computed after giving effect to the Advisor's expense reimbursement.
See notes to the financial statements.
<PAGE>
JNL/ALLIANCE GROWTH SERIES
SCHEDULE OF INVESTMENTS
December 31, 1998
Market
Shares Value
------ -----
Common Stocks -- 98.56%
Aerospace & Defense -- 1.52%
United Technologies Corp. ....... 650 $ 70,687
Airlines -- 2.14%
Delta Air Lines Inc. ............ 400 20,800
Northwest Airlines Corp.(a) ..... 1,200 30,675
UAL Corp.(a) .................... 800 47,750
---------
99,225
Banks -- 3.10%
BankAmerica Corp. ............... 1,150 69,144
Fifth Third Bancorp ............. 300 21,394
U.S. Bancorp .................... 1,500 53,250
---------
143,788
Computers -- 14.49%
Cisco Systems Inc.(a) ........... 2,300 213,469
Dell Computer Corp.(a) .......... 3,600 263,475
EMC Corp. ....................... 1,800 153,000
Sun Microsystems Inc.(a) ........ 500 42,812
---------
672,756
Cosmetics & Personal Care -- 0.80%
Colgate-Palmolive Co. ........... 400 37,150
Diversified Financial Services --
8.84%
Associates First Capital Corp. .. 2,300 97,462
Citigroup Inc. .................. 325 16,087
Federal Home Loan Mortgage Corp. 1,100 70,881
Federal National Mortgage
Association...................... 700 51,800
MBNA Corp. ...................... 5,000 124,688
Morgan Stanley Dean Witter & Co. 700 49,700
---------
410,618
Electronics -- 0.78%
AMP Inc. ........................ 700 36,444
Food -- 1.04%
Kroger Co. ...................... 800 48,400
Insurance -- 1.86%
American International Group
Inc. ............................ 200 19,325
Progressive Corp. ............... 300 50,813
SunAmerica Inc. ................. 200 16,225
---------
86,363
Manufacturing -- 5.70%
General Electric Co. ............ 300 30,619
Tyco International Ltd. ......... 3,100 233,856
---------
264,475
Media -- 2.09%
Liberty Media Group (a) ......... 1,750 80,609
TCI Group (a) ................... 300 16,594
---------
97,203
Market
Shares Value
------ -----
Common Stocks (continued)
Pharmaceuticals -- 12.94%
Bristol-Myers Squibb Co. ........ 1,300 $ 173,956
Merck & Co. Inc. ................ 300 44,306
Pfizer Inc. ..................... 1,500 188,156
Schering-Plough Corp. ........... 2,700 149,175
Warner-Lambert Co. .............. 600 45,113
---------
600,706
Retail -- 14.75%
Dayton Hudson Corp. ............. 2,250 122,063
Home Depot Inc. ................. 4,330 264,942
Kohl's Corp. (a) ................ 1,200 73,725
Lowe's Cos. Inc. ................ 900 46,069
Rite Aid Corp. .................. 800 39,650
Wal-Mart Stores Inc. ............ 1,700 138,444
---------
684,893
Savings & Loans -- 1.65%
Washington Mutual Inc. .......... 2,000 76,375
Semiconductors -- 3.06%
Intel Corp. ..................... 1,200 142,275
Software -- 5.93%
America Online Inc. ............. 100 14,475
HBO & Co. ....................... 2,900 83,194
IMS Health Inc. ................. 700 52,806
Microsoft Corp.(a) .............. 900 124,819
---------
275,294
Telecommunications -- 15.91%
AirTouch Communications Inc. (a) 3,300 238,012
Lucent Technologies Inc. ........ 900 99,000
MCI WorldCom Inc.(a) ............ 1,400 100,450
Nokia Corp. - ADR ............... 2,500 301,094
---------
738,556
Tobacco -- 1.96%
Philip Morris Cos. Inc. ......... 1,700 90,950
---------
Total Common Stocks
(cost $3,757,404) ............ 4,576,158
---------
Short Term Investments -- 1.44%
Money Market Fund -- 1.44%
SSgA Money Market Fund, 4.85%
(b) ............................. 66,877 66,877
---------
Total Short Term Investments
(cost $66,877) .............. 66,877
---------
Total Investments -- 100%
(cost $3,824,281) ............... $4,643,035
==========
- --------------------------------------------------------------------------------
(a) Non-income producing security.
(b) Dividend yields change daily to reflect current market conditions. Rate is
the quoted yield as of December 31, 1998.
See notes to the financial statements.
<PAGE>
JNL/ALGER GROWTH SERIES
FRED ALGER MANAGEMENT, INC.
[FRED ALGER MANAGEMENT LOGO] DAVID D. ALGER
OBJECTIVE:
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.
MONEY MANAGER COMMENTARY:
1998 proved a turbulent and challenging year for investors in the U.S. stock
market. During the first half of the year, stocks that had been undeservedly
oversold in the wake of the Asian crisis rebounded nicely. Inflation remained
subdued and the Federal Reserve left interest rates unchanged. The post-Asian
crisis earnings season came and went with some predictable casualties, but most
companies got through it unscathed. Moreover, after a year where value stocks
significantly outperformed growth stocks, investors returned to the more
aggressive discipline. By mid-July, most major market indices were trading at
record levels.
Amid incidents of international economic instability and domestic political
controversy, the market sold off dramatically in August. Specifically, the
Russian economy collapsed and the state of Japan's banking system worsened.
Economic activity was slowed by a credit crunch, as spreads between corporate
and treasury bonds widened. As measured by the S&P 500 Index, the historically
placid month of August proved to be the worst month since October of 1987. The
markets recovered during September in anticipation of relief from the Federal
Reserve, yet sold off sharply toward the end of the month following what was
perceived to be a disappointing reduction of the Federal Funds Rate by 25 basis
points.
As October progressed, stocks gained a boost from a rare intra-meeting rate
reduction by the Fed. The technology sector stabilized as Intel, Microsoft and
Apple all reported better than expected quarterly earnings. A rally prompted by
additional relief from the Fed in November highlighted a strong fourth quarter,
which anchored another lucrative, albeit challenging, year for the U.S. stock
market.
For the year ended December 31, 1998, the Series' total return was 45.66% as
compared to 28.58% for the S&P 500. During this volatile period, investors
favored larger, more predictable stocks. In particular, the Series' heavy
exposure to healthcare, retailing and technology stocks enabled it to post
strong returns.
In conclusion, 1999 should be a wonderful year for the American economy and
American investors. While we believe there are going to be problems around the
world, overall we expect the stock market to continue to chug along. Moreover,
while corporate profit growths should be subdued this year, growth in America's
more dynamic sectors should once again be spectacular, and we expect that
high-quality growth companies, which have the ability to generate high levels of
earnings, will once again be rewarded by investors.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
JNL/ALGER GROWTH SERIES AND THE S&P 500 INDEX
[GRAPHIC]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
10/16 1995 $10,000 $10,000
12/31/1995 $9,840 $10,617
3/31 $10,380 $11,187
6/30 $10,430 $11,687
9/30 $10,760 $12,048
12/31/1996 $11,160 $13,051
3/31 $11,140 $13,401
6/30 $13,030 $15,737
9/30 $14,560 $16,916
12/31/1997 $14,083 $17,402
3/31 $16,160 $19,902
6/30 $17,625 $20,482
9/30 $16,327 $18,448
12/31/1998 $20,515 $22,374
AVERAGE ANNUAL
TOTAL RETURN
1 year.................. 45.66%
Since inception * ...... 25.06%
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT RETURN AND
PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY
BE MORE OR LESS THAN THEIR ORIGINAL COST.
PERFORMANCE NUMBERS ARE NET OF ALL SERIES OPERATING EXPENSES BUT DO NOT REFLECT
THE DEDUCTION OF INSURANCE CHARGES.
- ------------
* Inception date October 16, 1995.
<PAGE>
JNL Series Trust
JNL/Alger Growth Series
Statement of Assets and Liabilities
December 31, 1998
Assets
Investments in securities, at cost .......$ 120,666,132
================
Investments in securities, at value ......$ 163,350,327
Receivables:
Dividends and interest ................. 38,799
Fund shares sold ....................... 101,750
Investment securities sold ............. 5,027,630
Collateral for securities loaned .......... 16,453,167
----------------
Total assets .............................. 184,971,673
----------------
Liabilities
Payables:
Investment advisory fees ............... 126,846
Fund shares redeemed ................... 72,912
Investment securities purchased ........ 3,342,573
Return of collateral for securities
loaned .................................... 16,453,167
Other liabilities ......................... 27,876
----------------
Total liabilities ......................... 20,023,374
----------------
Net assets ...............................$ 164,948,299
================
Net assets consist of:
Paid-in capital ..........................$ 112,256,917
Undistributed net investment income ....... -
Accumulated net realized gain
on investments ......................... 10,007,187
Net unrealized appreciation on
investments ............................... 42,684,195
================
Net assets ...............................$ 164,948,299
================
Total shares outstanding (no par
value),
unlimited shares authorized ............ 8,705,934
================
Net asset value, offering and
redemption
price per share .......................$ 18.95
================
Statement of Operations
For the Year Ended December 31, 1998
Investment income
Dividends ..............................$ 689,434
Interest ............................... 549,412
Foreign tax withholding ................ (3,015)
---------------
Total investment income ................... 1,235,831
---------------
Expenses
Investment advisory fees ............... 1,159,596
Custodian fees ......................... 22,192
Portfolio accounting fees .............. 24,591
Professional fees ...................... 31,456
Other .................................. 25,816
---------------
Total operating expenses .................. 1,263,651
Less:
Reimbursement from Adviser ............. -
---------------
Net expenses .............................. 1,263,651
---------------
Net investment loss ....................... (27,820)
---------------
Realized and unrealized gains
Net realized gain on investments........... 15,637,621
Net change in unrealized appreciation
on investments ......................... 30,926,299
---------------
Net realized and unrealized gains ......... 46,563,920
---------------
Net increase in net assets
from operations ........................$ 46,536,100
===============
See notes to the financial statements.
<PAGE>
JNL Series Trust
JNL/Alger Growth Series
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year ended December 31,
----------------------------------
1998 1997
---------------- ----------------
<S> <C> <C>
Operations:
Net investment loss .................................................................... $ (27,820) $ (44,675)
Net realized gain on investments ....................................................... 15,637,621 5,005,844
Net change in unrealized appreciation on investments ................................... 30,926,299 8,093,212
---------------- ----------------
Net increase in net assets from operations ............................................... 46,536,100 13,054,381
---------------- ----------------
Distributions to shareholders:
From net investment income ............................................................. - -
From net realized gains on investment transactions ..................................... (6,697,670) (3,165,534)
---------------- ----------------
Total distributions to shareholders ...................................................... (6,697,670) (3,165,534)
---------------- ----------------
Share transactions:
Proceeds from the sale of shares ....................................................... 71,371,106 45,948,085
Reinvestment of distributions .......................................................... 3,096,106
6,697,670
Cost of shares redeemed ................................................................ (38,835,754) (11,308,282)
---------------- ----------------
Net increase in net assets from share transactions ....................................... 39,233,022 37,735,909
---------------- ----------------
Net increase in net assets ............................................................... 79,071,452 47,624,756
Net assets beginning of period ........................................................... 85,876,847 38,252,091
---------------- ----------------
Net assets end of period ................................................................. $ 164,948,299 $ 85,876,847
================ ================
Undistributed net investment income ...................................................... $ - $ -
================ ================
</TABLE>
See notes to the financial statements.
<PAGE>
JNL Series Trust
JNL/Alger Growth Series
Financial Highlights
<TABLE>
<CAPTION>
Period from Period from
April 1, October 16,
Year ended December 31, 1996 to 1995* to
------------------------------ December 31, March 31,
1998 1997 1996 1996
-------------- -------------- -------------- ------------
<S> <C> <C> <C> <C>
Selected Per Share Data
Net asset value, beginning of period ................................ $ 13.56 $ 11.16 $ 10.38 $ 10.00
-------------- -------------- -------------- ------------
Income from operations:
Net investment loss ............................................... - (0.01) - -
Net realized and unrealized gains on investments .................. 6.20 2.93 0.78 0.38
-------------- -------------- -------------- ------------
Total income from operations ........................................ 6.20 2.92 0.78 0.38
-------------- -------------- -------------- ------------
Less distributions:
From net investment income ........................................ - - - -
From net realized gains on investment transactions ................ (0.81) (0.52) - -
-------------- -------------- -------------- ------------
Total distributions ................................................. (0.81) (0.52) - -
-------------- -------------- -------------- ------------
Net increase ........................................................ 5.39 2.40 0.78 0.38
-------------- -------------- -------------- ------------
Net asset value, end of period ...................................... $ 18.95 $ 13.56 $ 11.16 $ 10.38
============== ============== ============== ============
Total Return (a) .................................................... 45.66% 26.20% 7.51% 3.80%
Ratios and Supplemental Data:
Net assets, end of period (in thousands) .......................... $ 164,948 85,877 38,252 8,649
Ratio of net operating expenses to average net assets (b) (c) ..... 1.06% 1.10% 1.07% 1.03%
Ratio of net investment loss to average net assets (b) (c) ........ (0.02)% (0.07)% (0.02)% (0.17)%
Portfolio turnover ................................................ 121.39% 125.44% 59.92% 50.85%
Ratio information assuming no expense reimbursement or
fees paid indirectly:
Ratio of net operating expenses to average net assets (b) ......... 1.06% 1.10% 1.19% 1.89%
Ratio of net investment loss to average net assets (b) ............ (0.02)% (0.07)% (0.14)% (1.03)%
- ------------------------------------------------------------------------------------------------------------------------------------
</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 Adviser's expense reimbursement and
fees paid indirectly.
See notes to the financial statements.
<PAGE>
JNL/ALGER GROWTH SERIES
SCHEDULE OF INVESTMENTS
December 31, 1998
Market
Shares Value
------ -----
Common Stocks - 88.45%
Airlines - 0.73%
US Airways Group Inc. (a) ....... 23,000 $1,196,000
Banks - 4.00%
Bank of New York Co. Inc. ....... 20,500 825,125
BankAmerica Corp................. 39,000 2,344,875
First Union Corp. ............... 27,100 1,648,019
Firstar Corp. ................... 10,488 978,006
State Street Corp. .............. 10,700 744,319
----------
6,540,344
Biotechnology - 0.53%
Biogen Inc. (a) ................. 10,400 863,200
Commercial Services - 1.03%
McKesson HBOC Inc. (c) .......... 21,200 1,676,125
Computers - 10.99%
Ascend Communications Inc. (a)
(c) ............................. 39,800 2,616,850
Cisco Systems Inc. (a) .......... 24,875 2,308,711
Compaq Computer Corp. ........... 39,600 1,660,725
Dell Computer Corp. (a) ......... 47,600 3,483,725
EMC Corp. ....................... 36,000 3,060,000
International Business Machines
Corp. ........................... 26,100 4,821,975
----------
17,951,986
Diversified Financial Services -
8.39%
Citigroup Inc. .................. 82,500 4,083,750
Federal Home Loan Mortgage Corp. 47,400 3,054,338
Household International Inc. .... 82,500 3,269,062
Morgan Stanley Dean Witter & Co. 46,500 3,301,500
----------
13,708,650
Environmental Control - 3.15%
Waste Management Inc. ........... 110,500 5,152,062
Food - 4.45%
Kroger Co. ...................... 66,900 4,047,450
Safeway Inc. (a) ................ 53,000 3,229,687
----------
7,277,137
Health Care - 1.95%
Medtronic Inc. .................. 42,800 3,177,900
Insurance - 2.71%
American International Group
Inc. ............................ 37,350 3,608,944
SunAmerica Inc. ................. 10,100 819,362
----------
4,428,306
Leisure Time - 1.18%
Carnival Corp. .................. 40,000 1,920,000
Manufacturing - 3.80%
Corning Inc. .................... 18,600 837,000
Tyco International Ltd. ......... 71,140 5,366,624
----------
6,203,624
Market
Shares Value
------ -----
Common Stocks (continued)
Media - 2.56%
Comcast Corp. ................... 56,800 $3,333,450
Cox Communications Inc. (a) (c) . 12,200 843,325
----------
4,176,775
Pharmaceuticals - 15.09%
Bristol-Myers Squibb Co. ........ 11,800 1,578,987
Cardinal Health Inc. (c) ........ 36,150 2,742,881
Elan Corp. Plc - ADR (a) (c) .... 9,500 660,844
Eli Lilly & Co. ................. 31,900 2,835,113
Merck & Co. Inc. ................ 25,500 3,766,031
Pfizer Inc. ..................... 36,500 4,578,469
Schering-Plough Corp. ........... 39,000 2,154,750
SmithKline Beecham Plc - ADR .... 31,800 2,210,100
Warner-Lambert Co. .............. 54,900 4,127,794
----------
24,654,969
Retail - 10.82%
Costco Cos. Inc. ................ 24,000 1,732,500
CVS Corp. ....................... 42,400 2,332,000
Fred Meyer Inc. (a) ............. 13,200 795,300
Home Depot Inc. (c) ............. 88,500 5,415,094
Office Depot Inc. (a) ........... 21,400 790,463
Staples Inc. (a) ................ 59,800 2,612,512
Wal-Mart Stores Inc. ............ 49,000 3,990,438
----------
17,668,307
Semiconductors - 3.75%
Intel Corp. ..................... 38,600 4,576,513
Texas Instruments Inc. .......... 18,200 1,557,237
----------
6,133,750
Softwares - 7.50%
America Online Inc. (c) ......... 26,800 3,879,300
Compuware Corp. (a) ............. 22,400 1,750,000
IMS Health Inc. (c) ............. 26,000 1,961,375
Microsoft Corp. (a) ............. 33,600 4,659,900
----------
12,250,575
Telecommunications - 4.16%
MCI WorldCom Inc. (a) ........... 66,400 4,764,200
Telefonaktiebolaget LM Ericsson -
ADR .......................... 85,200 2,039,475
----------
6,803,675
Transportation - 1.66%
Kansas City Southern Industries
Inc. ............................ 55,000 2,705,312
----------
Total Common Stocks
(cost $101,804,502) ......... 144,488,697
-----------
See notes to the financial statements.
<PAGE>
JNL/ALGER GROWTH SERIES
SCHEDULE OF INVESTMENTS (continued)
Principal Market
Amount Value
------ -----
Short Term Investments - 11.55%
Banks - 2.26%
Bayerische Vereinsbank AG,
5.80%, 01/05/1999 ...............$1,200,000 $1,199,227
Halifax Plc, 5.70%, 01/06/1999 .. 2,500,000 2,498,021
----------
3,697,248
Commercial Services - 1.53%
Hertz Corp., 5.70%, 01/07/1999 .. 2,500,000 2,497,625
Diversified Financial Services -
3.43%
Montauk Fund Corp., 5.70%,
01/06/1999 ................... 1,600,000 1,598,733
Twin Towers Inc., 4.95%, 2,000,000 1,996,700
01/13/1999 ......................
Wood Street Funding Corp.,
5.05%, 2,000,000 1,998,317
01/07/1999 ...................
----------
5,593,750
Holding Companies - Diversified -
1.22%
Republic Industries Funding
Corp.,
5.75%, 01/11/1999 ............ 2,000,000 1,996,805
Principal Market
Amount Value
------ -----
Short Term Investments (continued)
Money Market Fund - 0.36%
SSgA Money Market Fund, 4.85%
(b) .............................$ 581,843 $ 581,843
Oil & Gas Producers - 1.53%
New Jersey Natural Gas Co.,
5.67%,
01/05/1999 ................... 2,500,000 2,498,425
Telecommunications - 1.22%
Ameritech Corp., 5.63%,
01/14/1999 ...................... 2,000,000 1,995,934
----------
Total Short Term Investments
(cost $18,861,630) .......... 18,861,630
----------
Total Investments -- 100%
(cost $120,666,132) ............. $163,350,327
============
<PAGE>
- --------------------------------------------------------------------------------
(a) Non-income producing security.
(b) Dividend yields change daily to reflect current market conditions. Rate is
the quoted yield as of December 31, 1998.
(c) All or a portion of this security has been loaned.
See notes to the financial statements.
<PAGE>
JNL/EAGLE CORE EQUITY SERIES
EAGLE ASSET MANAGEMENT, INC.
[EAGLE ASSET MANAGEMENT LOGO] TEAM MANAGEMENT
OBJECTIVE:
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 is believed to offer above-average
potential for long-term growth. To achieve this, the sub-adviser uses three
different investment strategies each with its own independently managed
portfolio. The Series' assets are allocated 40 percent to the "Growth
Portfolio", 40 percent to the "Value Portfolio" and 20 percent to the "Income
Portfolio". The Growth Portfolio emphasizes securities of blue chip companies
with growing earnings that are industry leaders and have market capitalizations
in excess of $5 billion. The Value Portfolio emphasizes securities of companies
with market capitalizations in excess of $1 billion and that are financially
sound but whose stock trades at a discount to its estimated intrinsic value. The
Income Portfolio emphasizes securities of companies with market capitalizations
in excess of $1 billion that provide a stable or rising income stream.
MONEY MANAGER COMMENTARY:
During the global market turmoil stemming from Asia that prevailed for much of
1998, U.S. equity markets continued to be driven by investor preference for
liquidity, size, quality, and earnings growth at any price. Consequently, the
larger indices offer a misleading indication of overall market performance. For
example, though the S&P 500, which was heavily influenced by expensive
technology and drug issues, was up 28.58% for the year, the median stock in the
index was up only 3.5%. The continued bull market in the second half of the year
was sparked in part by the Federal Reserve's three interest rate cuts totaling
0.75%. The additional monetary liquidity, with the money supply posting an
increase of 15.3% year-over-year, contributed to the continued market surge in
the face of sustained pressure on corporate earnings.
For 1998, the Series increased 16.54% compared to a 28.58% increase for the S&P
500. On an individual basis, the Growth Portfolio gained 37.36%, the Value
Portfolio gained 1.25% and the Income Portfolio gained 8.78%. The flight to
quality caused by the global financial market turmoil, made it a particularly
difficult year for value and equity income investing, but the combination of the
three Portfolios helped to moderate much of the market volatility experienced
throughout the year.
The Growth Portfolio was positively impacted by overweightings in technology,
pharmaceuticals and medical devices and financial services. During 1998, the
technology sector benefited from the ongoing need for domestic and foreign
companies to invest in technology in order to remain competitive in the global
market place. Pharmaceutical and medical device companies benefited from
increasing prescription volumes, new products and aging demographics. U.S.
financial institutions benefited from a healthy domestic economy and are
beginning to capitalize on strategic investment opportunities in other parts of
the world that have emerged as a result of the recent financial turmoil in those
regions.
The Value Portfolio was cautiously positioned for much of the year. The stocks
in this Portfolio tended to be larger, less cyclical, quality, domestic
companies. The Portfolio's retail, telephone and financial service holdings were
generally positive performers, whereas the energy and tobacco holdings
negatively impacted performance.
The Income Portfolio also tended to be defensively positioned for much of the
year. Positive contributions in 1998 came from the healthcare, financial
services and pharmaceutical sectors, and, as one would expect in a rising
market, REITS and electric utilities tended to lag the overall market thereby
negatively impacting performance.
The U.S. economy is doing reasonably well heading into 1999 although there is
evidence of a modest slowdown as we cannot remain immune forever to the global
economic turmoil. A moderating economy and benign inflation environment
typically lead to declining interest rates. We believe this environment is
likely to benefit all categories of U.S. equities. There is, however, likely to
be significant volatility until investors can better assess the impact of the
Asian and Latin American problems on U.S. corporate earnings.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
JNL/EAGLE CORE EQUITY SERIES AND THE S&P 500 INDEX
[GRAPHIC]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
9/16/1996 $10,000 $10,000
12/31/1996 $10,647 $10,892
3/31 $10,807 $11,184
6/30 $12,642 $13,134
9/30 $13,694 $14,118
12/31/1997 $14,091 $14,523
3/31 $15,628 $16,610
6/30 $15,577 $17,094
9/30 $13,865 $15,396
12/31/1998 $16,422 $18,673
AVERAGE ANNUAL
TOTAL RETURN
1 year.................. 16.54%
Since inception * ...... 24.15%
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT RETURN AND
PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY
BE MORE OR LESS THAN THEIR ORIGINAL COST.
PERFORMANCE NUMBERS ARE NET OF ALL SERIES OPERATING EXPENSES, BUT DO NOT REFLECT
THE DEDUCTION OF INSURANCE CHARGES.
- ------------
* Inception date September 16, 1996.
<PAGE>
JNL Series Trust
JNL/Eagle Core Equity Series
Statement of Assets and Liabilities
December 31, 1998
Assets
Investments in securities, at cost .......$ 31,321,868
================
Investments in securities, at value ......$ 37,300,025
Receivables:
Dividends and interest ................. 52,647
Fund shares sold ....................... 77,874
Investment securities sold ............. 14,400
Collateral for securities loaned .......... 8,060,604
----------------
Total assets .............................. 45,505,550
----------------
Liabilities
Payables:
Investment advisory fees ............... 26,900
Fund shares redeemed ................... 68,270
Investment securities purchased ........ 153,522
Call options written, at value
(Premiums received $10,456) ............ 7,013
Return of collateral for securities
loaned .................................... 8,060,604
Other liabilities ......................... 20,559
----------------
Total liabilities ......................... 8,336,868
================
Net assets ...............................$ 37,168,682
================
Net assets consist of:
Paid-in capital ..........................$ 32,050,642
Undistributed net investment income ....... 20,858
Accumulated net realized loss
on investments ......................... (884,418)
Net unrealized appreciation on:
Investments ............................ 5,978,157
Foreign currency related items ......... -
Options written ........................ 3,443
----------------
Net assets ...............................$ 37,168,682
================
Total shares outstanding (no par
value), unlimited shares authorized ... 2,336,646
================
Net asset value, offering and
redemption price per share.............$ 15.91
================
Statement of Operations
For the Year Ended December 31, 1998
Investment income
Dividends ..............................$ 384,552
Interest ............................... 97,319
Foreign tax withholding ................ (4,270)
---------------
Total investment income ................... 477,601
---------------
Expenses
Investment advisory fees ............... 202,790
Custodian fees ......................... 22,403
Portfolio accounting fees .............. 24,568
Professional fees ...................... 8,642
Other .................................. 5,876
---------------
Total operating expenses .................. 264,279
Less:
Reimbursement from Adviser ............. (27,691)
---------------
Net expenses .............................. 236,588
---------------
Net investment income ..................... 241,013
---------------
Realized and unrealized gains (losses) Net realized loss on:
Investments ............................ (870,107)
Options written ........................ (7,111)
Net change in unrealized appreciation
(depreciation) on:
Investments ............................ 4,476,032
Foreign currency related items ......... (2)
Options written ........................ 2,986
---------------
Net realized and unrealized gains ......... 3,601,798
---------------
Net increase in net assets
from operations ........................$ 3,842,811
===============
See notes to the financial statements.
<PAGE>
JNL Series Trust
JNL/Eagle Core Equity Series
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year ended December 31,
----------------------------------
1998 1997
---------------- ----------------
<S> <C> <C>
Operations:
Net investment income .............................................................. $ 241,013 $ 67,995
Net realized gain (loss) on:
Investments ..................................................................... (870,107) 233,207
Options written ................................................................. (7,111) -
Net change in unrealized appreciation (depreciation) on:
Investments ..................................................................... 4,476,032 1,423,310
Foreign currency related items .................................................. (2) 2
Options written ................................................................. 2,986 -
---------------- ----------------
Net increase in net assets from operations ........................................... 3,842,811 1,724,514
---------------- ----------------
Distributions to shareholders:
From net investment income ......................................................... (220,267) (67,862)
From net realized gains on investment transactions ................................. (43,918) (190,309)
---------------- ----------------
Total distributions to shareholders .................................................. (264,185) (258,171)
---------------- ----------------
Share transactions:
Proceeds from the sale of shares ................................................... 28,178,113 8,561,855
Reinvestment of distributions ...................................................... 264,185 227,752
Cost of shares redeemed ............................................................ (6,748,710) (313,679)
---------------- ----------------
Net increase in net assets from share transactions ................................... 21,693,588 8,475,928
---------------- ----------------
Net increase in net assets ........................................................... 25,272,214 9,942,271
Net assets beginning of period ....................................................... 11,896,468 1,954,197
---------------- ----------------
Net assets end of period ............................................................. $ 37,168,682 $ 11,896,468
================ ================
Undistributed net investment income .................................................. $ 20,858 $ 133
================ ================
</TABLE>
See notes to the financial statements.
<PAGE>
JNL Series Trust
JNL/Eagle Core Equity Series
Financial Highlights
<TABLE>
<CAPTION>
Period from
September 16,
Year ended December 31, 1996* to
------------------------------- December 31,
1998 1997 1996
----------------------------------------------
<S> <C> <C> <C>
Selected Per Share Data
Net asset value, beginning of period ............................... $ 13.75 10.62 10.00
----------------------------------------------
Income from operations:
Net investment income ............................................ 0.10 0.08 0.03
Net realized and unrealized gains on investments and
foreign currency related items ................................ 2.17 3.35 0.62
----------------------------------------------
Total income from operations ....................................... 2.27 3.43 0.65
----------------------------------------------
Less distributions:
From net investment income ....................................... (0.09) (0.08) (0.03)
From net realized gains on investment transactions ............... (0.02) (0.22) -
----------------------------------------------
Total distributions ................................................ (0.11) (0.30) (0.03)
----------------------------------------------
Net increase ....................................................... 2.16 3.13 0.62
----------------------------------------------
Net asset value, end of period ..................................... $ 15.91 13.75 10.62
==============================================
Total Return (a) ................................................... 16.54% 32.35% 6.47%
Ratios and Supplemental Data:
Net assets, end of period (in thousands) ......................... $ 37,169 11,896 1,954
Ratio of net operating expenses to average net assets (b) (c) .... 1.05% 1.05% 1.05%
Ratio of net investment income to average net assets (b) (c) ..... 1.07% 1.00% 1.10%
Portfolio turnover ............................................... 67.04% 51.48% 1.36%
Ratio information assuming no expense reimbursement or
fees paid indirectly:
Ratio of net operating expenses to average net assets (b) ....... 1.17% 1.54% 4.57%
Ratio of net investment income (loss) to average net assets (b) . 0.95% 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 period ended December 31, 1996.
(b) Annualized for the period ended December 31, 1996.
(c) Computed after giving effect to the Adviser's expense reimbursement and
fees paid indirectly.
<PAGE>
JNL/EAGLE CORE EQUITY SERIES
SCHEDULE OF INVESTMENTS
December 31, 1998
Market
Shares Value
------ -----
Common Stocks - 91.45%
Advertising - 1.99%
Omnicom Group Inc (c) (d) ....... 12,800 $ 742,400
Aerospace & Defense - 1.54%
Raytheon Co. "B" ................ 10,800 575,100
Apparel - 0.20%
Nike Inc. ....................... 1,800 73,012
Banks - 2.98%
BankAmerica Corp. ............... 800 48,100
Chase Manhattan Corp. ........... 6,000 408,375
First Union Corp. ............... 7,500 456,094
Mellon Bank Corp. ............... 2,900 199,375
-----------
1,111,944
Chemicals - 0.39%
Morton International Inc. ....... 6,000 147,000
Commercial Services - 1.38%
Paychex Inc. .................... 10,000 514,375
Computers - 6.87%
Cisco Systems Inc. (a) .......... 8,000 742,500
Dell Computer Corp. (a) ......... 6,000 439,125
Electronic Data Systems Corp. ... 10,000 502,500
EMC Corp. (c) ................... 6,000 510,000
International Business Machines
Corp. ........................... 2,000 369,500
-----------
2,563,625
Distribution & Wholesale - 0.39%
Unisource Worldwide Inc. ........ 20,000 145,000
Diversified Financial Services -
8.13%
American Express Co. ............ 4,000 409,000
Citigroup Inc. .................. 8,049 398,425
Federal Home Loan Mortgage Corp.
(c) ............................. 15,500 998,781
Federal National Mortgage
Association (c) (d) .......... 8,800 651,200
SLM Holding Corp. (c) ........... 12,000 576,000
-----------
3,033,406
Electric - 1.21%
FPL Group Inc. .................. 2,700 166,388
PacifiCorp ...................... 4,500 94,781
Sierra Pacific Resources ........ 5,000 190,000
-----------
451,169
Electronics - 1.24%
Philips Electronics NV (c) ...... 6,800 460,275
Environmental Control - 1.63%
Waste Management Inc. (c) ....... 13,000 606,125
Food - 2.72%
ConAgra Inc. (c) ................ 6,500 204,750
H. J. Heinz Co. (d) ............. 3,300 186,863
Safeway Inc. (a) ................ 7,500 457,031
Market
Shares Value
------ -----
Common Stocks (continued)
Food (continued)
SYSCO Corp. ..................... 6,000 $ 164,625
-----------
1,013,269
Forest Products & Paper - 0.81%
International Paper Co. ......... 3,300 147,881
Schweitzer-Mauduit International
Inc. ............................ 10,000 154,375
-----------
302,256
Health Care - 4.45%
Bausch & Lomb Inc. .............. 1,800 108,000
Columbia/HCA Healthcare Corp.
(c) ............................. 18,000 445,500
Guidant Corp. (c) ............... 5,000 551,250
HEALTHSOUTH Corp. (a) (c) ....... 22,500 347,344
Humana Inc. (a) (c) ............. 11,700 208,406
-----------
1,660,500
Household Products - 2.05%
Clorox Co. (c)................... 3,000 350,437
Fortune Brands Inc. ............. 9,000 284,625
Libbey Inc. ..................... 4,500 130,219
-----------
765,281
Insurance - 3.95%
Aetna Inc. ...................... 7,300 573,962
American International Group
Inc. ............................ 5,000 483,125
SAFECO Corp. (c) ................ 5,000 214,688
TIG Holdings Inc. ............... 13,000 202,313
-----------
1,474,088
Iron & Steel - 1.19%
Allegheny Teledyne Inc. ......... 17,500 357,656
British Steel Plc ADR (c) ....... 6,000 87,750
-----------
445,406
Leisure Time - 0.40%
Mattel Inc. (c) ................. 6,500 148,281
Lodging - 0.12%
Starwood Hotels & Resorts (a)
(c) ............................. 2 ,000 45,375
Manufacturing - 3.37%
General Electric Co. ............ 6,700 683,819
Harsco Corp. .................... 3,600 109,575
Illinois Tool Works Inc. (c) .... 8,000 464,000
-----------
1,257,394
Oil & Gas Producers - 7.78%
Amoco Corp. ..................... 500 30,187
Ashland Inc. .................... 6,500 314,437
Baker Hughes Inc. ............... 6,500 114,969
BP Amoco Plc ADR (c) ............ 4,100 367,463
Exxon Corp. ..................... 3,500 255,937
Input/Output Inc. (a) ........... 20,000 146,250
MCN Energy Group Inc. (c) ....... 17,500 333,594
Mobil Corp. ..................... 2,200 191,675
Royal Dutch Petroleum Co. - NYS
(c) ............................. 5,500 263,313
Market
Shares Value
------ -----
Common Stocks (continued)
Oil & Gas Producers (continued)
Sonat Inc. (c) .................. 12,200 $ 330,163
UGI Corp. ....................... 7,400 175,750
WICOR Inc. ...................... 8,000 174,500
Williams Cos. Inc. (c) .......... 6,500 202,719
-----------
2,900,957
Pharmaceuticals - 9.16%
Abbott Laboratories ............. 3,700 181,300
American Home Products Corp. .... 3,600 202,725
Bristol-Myers Squibb Co. ........ 5,300 709,206
Cardinal Health Inc. (c) ........ 4,500 341,437
Merck & Co. Inc ................. 1,400 206,762
Pfizer Inc. ..................... 4,000 501,750
Pharmacia & Upjohn Inc. (d) ..... 4,600 260,475
Schering-Plough Corp. ........... 8,000 442,000
Warner-Lambert Co. .............. 7,600 571,425
-----------
3,417,080
Real Estate - 1.91%
Centertrust Retail Properties
Inc. (c) ........................ 5,900 72,275
Health Care Property Investors
Inc. ............................ 2,500 76,875
Highwoods Properties Inc. ....... 1,600 41,200
Mack-Cali Realty Corp. .......... 2,000 61,750
PS Business Parks Inc. (c) ...... 3,300 78,788
Rouse Co. ....................... 3,000 82,500
Security Capital Group Inc. (a) . 8,500 115,281
Spieker Properties Inc. ......... 2,000 69,250
Sun Communities Inc. ............ 2,400 83,550
Tower Realty Trust Inc. ......... 1,500 30,188
-----------
711,657
Retail - 10.16%
Federated Department Stores Inc.
(a) (c) ......................... 7,000 304,937
Gap Inc. ........................ 15,000 843,750
Home Depot Inc. (c) ............. 10,000 611,875
Intimate Brands Inc. (c) ........ 7,200 215,100
Kohl's Corp. (a) (c)............. 8,000 491,500
Toys "R" Us Inc. (a) (c) ........ 30,000 506,250
Wal-Mart Stores Inc. (c) ........ 5,000 407,188
Walgreen Co. .................... 7,000 409,938
-----------
3,790,538
Software - 1.49%
Microsoft Corp. (a) ............. 4,000 554,750
Telecommunications - 7.95%
ALLTEL Corp. .................... 3,300 197,381
BellSouth Corp. ................. 10,200 508,725
GTE Corp. ....................... 2,900 188,500
Lucent Technologies Inc. ........ 5,000 550,000
MCI WorldCom Inc. (a) (c) ....... 10,000 717,500
Nokia Corp. - ADR (c) ........... 4,000 481,750
SBC Communications Inc. ......... 6,000 321,750
-----------
2,965,606
Market
Shares Value
------ -----
Common Stocks (continued)
Tobacco - 5.40%
Dimon Inc. (c)................... 65,000 $ 483,437
Philip Morris Cos. Inc. ......... 11,700 625,950
RJR Nabisco Holdings Corp. ...... 17,000 504,688
UST Inc. ........................ 11,500 401,063
-----------
2,015,138
Water - 0.59%
American Water Works Co. Inc.
(c) ............................. 6,500 219,375
-----------
Total Common Stocks
(cost $28,149,893) .......... 34,110,382
-----------
Preferred Stocks - 3.50%
Banks - 0.23%
Jefferson Pilot "NB" Aces ....... 800 83,600
Diversified Financial Services -
1.49%
Coltec Capital Trust (144a) ..... 1,200 51,750
Kmart Financing I ............... 3,500 202,781
MCN Energy Group Inc. (c) ....... 2,700 94,331
Wendy's Financing I (c) ......... 4,000 208,000
-----------
556,862
Electronics - 0.40%
Houston Industries Inc. ......... 1,400 148,925
Holding Companies - Diversified -
0.46%
Ralston Purina Group ............ 3,300 172,425
Media - 0.45%
MediaOne Group .................. 2,500 166,250
Software - 0.47%
Microsoft Corp. (c) ............. 1,800 175,950
-----------
Total Preferred Stocks
(cost $1,271,922) ........... 1,304,012
-----------
Principal
Amount
------
Corporate Bonds - 0.48%
Auto Parts & Equipment - 0.27%
Magna International Inc., 4.875%,
02/15/2005 ................... $ 100,000 102,250
Commercial Services - 0.21%
Interim Services Inc., 4.50%,
06/01/2005 ................... 90,000 78,862
-----------
Total Corporate Bonds
(cost $195,534) ............. 181,112
-----------
<PAGE>
JNL/EAGLE CORE EQUITY SERIES
SCHEDULE OF INVESTMENTS (continued)
Principal Market
Amount Value
------ -----
Short Term Investments - 4.57%
Money Market Funds - 4.57%
SSgA Money Market Fund, 4.85% (b) $852,260 $ 852,260
SSgA Government Money Market
Fund, 4.68% (b) .... ............. 852,259 852,259
-----------
Total Short Term Investments
(cost $1,704,519) ........... 1,704,519
-----------
Total Investments - 100%
(cost $31,321,868) .............. $37,300,025
===========
- --------------------------------------------------------------------------------
(a) Non-income producing security.
(b) Dividend yields change daily to reflect current market conditions. Rate is
the quoted yield as of December 31, 1998.
(c) All or a portion of this security has been loaned.
(d) All or a portion of this security has been pledged to cover call options
written.
SCHEDULE OF CALL OPTIONS WRITTEN
December 31, 1998
Contracts
(100 Shares Market
per Contract) Value
- ------------- -----
4 Federal National Mortgage Association
Expiration January 1999, Exercise Price $75..... $ (500)
10 H.J. Heinz Co.
Expiration January 1999, Exercise Price $60 ..... (313)
10 Omnicom Group Inc.
Expiration January 1999, Exercise Price $55 ..... (3,500)
12 Pharmacia & Upjohn Inc.
Expiration January 1999, Exercise Price $55 .... (2,700)
$(7,013)
========
See notes to the financial statements.
<PAGE>
JNL/EAGLE SMALLCAP EQUITY SERIES
EAGLE ASSET MANAGEMENT, INC.
[EAGLE ASSET MANAGEMENT LOGO] BERT L. BOKSEN
OBJECTIVE:
JNL/Eagle SmallCap Equity Series seeks long-term capital appreciation by
investing primarily in equity securities of smaller companies which are believed
to offer potential for rapid growth.
MONEY MANAGER COMMENTARY:
Small cap stocks started 1998 strong, with the Russell 2000 posting a first
quarter gain of 10.1%. However, fears over weakness in the Asian economy
dominated much of the negative sentiment that began to build in the second
quarter when the Russell 2000 dropped 4.7%.
The bottom then fell out of the small cap market in the third quarter as
investor preference for highly liquid, large cap stocks caused a sharp reduction
in all market segments other than large cap U.S. growth stocks and U.S.
Treasuries. During the third quarter alone, the Russell 2000 dropped 20.2%,
making it one of only three quarters in the preceding two decades with a drop
exceeding 20%.
The downward trend that began in the second quarter and accelerated in the third
quarter reached bottom on October 8th when the Russell 2000 was off 36.9% for
the year. By the end of the year, however, the Russell 2000 had rebounded 36.0%
from the trough, posting a positive 16.3% gain for the fourth quarter and ending
1998 down only 2.55%.
For 1998, the Series was up 1.18%, compared to a 2.55% decline for the Russell
2000. The Federal Reserve Board's reductions in interest rates during the third
and fourth quarters provided the Series with a catalyst to reinvigorate many of
its holdings that had been oversold during the summer and early fall. The Series
was up 22.67% for the fourth quarter, led higher by the sharp rebound in
technology and medical device/pharmaceutical companies. In addition, insider
buying and corporate share repurchases by many small cap companies helped fuel
the late recovery.
During the first half of the year, the retail sector continued to thrive. At the
same time, we also began to reduce the Series exposure to the energy sector as
we expected energy demand to decrease due to the global economic slowdown.
During the difficult summer months, technology, financial services and energy
were the most negatively impacted sectors. As the Asian crisis continued, we
began to further reduce the Series exposure to certain cyclical businesses with
significant Asian exposure. During this volatile period, the Series was
positioned defensively, with a focus on domestic companies with strong business
fundamentals that we believed would be able to withstand the extreme market
fluctuations.
We also began to take advantage of the opportunity to buy fundamentally solid
companies whose valuations we believed had reached irrationally low levels. As a
result, several of the purchases made during the second and third quarters,
particularly in the technology and healthcare sectors, performed extremely well
toward the latter half of the year. In addition, several long-term holdings also
started moving upwards as investors began focusing on the earnings strength of
their relative valuations.
Morgan Stanley Equity Research noted that 1998 was the worst year for the
Russell 2000 Index in terms of relative performance since its inception 20 years
ago. For the year, the Russell 2000 trailed the S&P 500 by more than 30%.
History shows that periods of substantial outperformance by small cap stocks
tend to follow periods of significant relative underperformance. If this trend
holds true to form, the small cap market may be about to enter a protracted
period when it will outperform the large cap market. With global financial
concerns abating, investor confidence increasing and small cap stocks at
historically low valuations, we believe that 1999 may be the year for small cap
stocks.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
JNL/EAGLE SMALLCAP EQUITY SERIES AND THE RUSSELL 2000 INDEX
[GRAPHIC]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
9/16/1996 $10,000 $10,000
12/31/1996 $11,540 $10,639
3/31 $11,340 $10,091
6/30 $13,490 $11,722
9/30 $16,120 $13,462
12/31/1997 $14,730 $13,004
3/31 $17,140 $14,346
6/30 $15,970 $13,520
9/30 $12,150 $10,784
12/31/1998 $14,904 $12,557
AVERAGE ANNUAL
TOTAL RETURN
1 year .................. 1.18%
Since inception * ...... 19.01%
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT RETURN AND
PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY
BE MORE OR LESS THAN THEIR ORIGINAL COST.
PERFORMANCE NUMBERS ARE NET OF ALL SERIES OPERATING EXPENSES, BUT DO NOT REFLECT
THE DEDUCTION OF INSURANCE CHARGES.
- ------------
* Inception date September 16, 1996.
<PAGE>
JNL Series Trust
JNL/Eagle SmallCap Equity Series
Statement of Assets and Liabilities
December 31, 1998
Assets
Investments in securities, at cost $ 33,830,290
================
Investments in securities, at value $ 35,618,497
Receivables:
Dividends and interest ................. 23,180
Fund shares sold ....................... 37,682
Collateral for securities loaned .......... 7,289,685
----------------
Total assets .............................. 42,969,044
----------------
Liabilities
Payables:
Investment advisory fees ............... 26,247
Fund shares redeemed ................... 25,086
Investment securities purchased ........ 653,652
Return of collateral for securities
loaned .................................... 7,289,685
Other liabilities ......................... 21,874
----------------
Total liabilities ......................... 8,016,544
================
Net assets ...............................$ 34,952,500
================
Net assets consist of:
Paid-in capital ..........................$ 33,236,361
Undistributed net investment income ....... -
Accumulated net realized loss on
investments................................ (72,068)
Net unrealized appreciation on
investments ............................... 1,788,207
================
Net assets ...............................$ 34,952,500
================
Total shares outstanding (no par
value), unlimited shares authorized ... 2,358,526
================
Net asset value, offering and
redemption price per share............. 14.82
================
Statement of Operations
For the Year Ended December 31, 1998
Investment income
Dividends ..............................$ 63,072
Interest ............................... 92,882
---------------
Total investment income ................... 155,954
---------------
Expenses
Investment advisory fees ............... 219,120
Custodian fees ......................... 12,032
Portfolio accounting fees .............. 24,568
Professional fees ...................... 7,957
Other .................................. 6,003
---------------
Total operating expenses .................. 269,680
Less:
Reimbursement from Adviser ............. (15,962)
---------------
Net expenses .............................. 253,718
---------------
Net investment loss ....................... (97,764)
---------------
Realized and unrealized gains (losses)
Net realized loss on investments .......... (66,256)
Net change in unrealized appreciation on
investments ............................ 352,762
---------------
Net realized and unrealized gains ......... 286,506
---------------
Net increase in net assets resulting
from operations ........................$ 188,742
===============
See notes to the financial statements.
<PAGE>
JNL Series Trust
JNL/Eagle SmallCap Equity Series
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year ended December 31,
----------------------------------
1998 1997
---------------- ----------------
<S> <C> <C>
Operations:
Net investment loss ................................................................... $ (97,764) $ (40,539)
Net realized gain (loss) on:
Investments ........................................................................ (66,256) 247,335
Foreign currency related items ..................................................... - (2)
Net change in unrealized appreciation on investments ............................... 352,762 1,221,736
---------------- ----------------
Net increase in net assets from operation ............................................... 188,742 1,428,530
---------------- ----------------
Distributions to shareholders:
From net investment income ............................................................ - -
From net realized gains on investment transactions .................................... (197,460) -
---------------- ----------------
Total distributions to shareholders ..................................................... (197,460) -
---------------- ----------------
Share transactions:
Proceeds from the sale of shares ...................................................... 31,145,398 12,054,510
Reinvestment of distributions ......................................................... 197,460 -
Cost of shares redeemed ............................................................... (9,875,019) (1,933,750)
---------------- ----------------
Net increase in net assets from share transactions ...................................... 21,467,839 10,120,760
---------------- ----------------
Net increase in net assets .............................................................. 21,459,121 11,549,290
Net assets beginning of period .......................................................... 13,493,379 1,944,089
---------------- ----------------
Net assets end of period ................................................................ $ 34,952,500 $ 13,493,379
================ ================
Undistributed net investment income ..................................................... $ - $ 390
================ ================
</TABLE>
See notes to the financials statements.
<PAGE>
JNL Series Trust
JNL/Eagle SmallCap Equity Series
Financial Highlights
<TABLE>
<CAPTION>
Period from
September 16,
Year ended December 31, 1996* to
---------------------------- December 31,
1998 1997 1996
------------- -------------- --------------
<S> <C> <C> <C>
Selected Per Share Data
Net asset value, beginning of period ............................................$ 14.73 $ 11.54 $ 10.00
------------- -------------- --------------
Income from operations:
Net investment loss ........................................................... (0.06) (0.07) (0.01)
Net realized and unrealized gains on investments and
foreign currency related items .............................................. 0.23 3.26 1.55
------------- -------------- --------------
Total income from operations .................................................... 0.17 3.19 1.54
------------- -------------- --------------
Less distributions:
From net investment income .................................................... - - -
From net realized gains on investment transactions ............................ (0.08) - -
------------- -------------- --------------
Total distributions ............................................................. (0.08) - -
------------- -------------- --------------
Net increase .................................................................... 0.09 3.19 1.54
------------- -------------- --------------
Net asset value, end of period ..................................................$ 14.82 $ 14.73 $ 11.54
============= ============== ==============
Total Return (a) ................................................................ 1.18% 27.64% 15.40%
Ratios and Supplemental Data:
Net assets, end of period (in thousands) ......................................$ 34,953 $ 13,493 $ 1,944
Ratio of net operating expenses to average net assets (b) (c) ................. 1.10% 1.10% 1.10%
Ratio of net investment loss to average net assets (b) (c) .................... (0.42)% (0.54)% (0.26)%
Portfolio turnover ............................................................ 51.90% 60.78% 28.01%
Ratio information assuming no expense reimbursement or
fees paid indirectly:
Ratio of net operating expenses to average net assets (b) ..................... 1.17% 1.51% 4.77%
Ratio of net investment loss to average net assets (b) ........................ (0.49)% (0.95)% (3.93)%
- -----------------------------------------------------------------------------------------------------------------------------
</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 period ended December 31, 1996.
(b) Annualized for the period ended December 31, 1996.
(c) Computed after giving effect to the Adviser's expense reimbursement and
fees paid indirectly.
See notes to the financial statements.
<PAGE>
JNL/EAGLE SMALLCAP EQUITY SERIES
SCHEDULE OF INVESTMENTS
December 31, 1998
Market
Shares Value
------ -----
Common Stocks - 95.13%
Apparel - 1.08%
R.G. Barry Corp. ................ 35,000 $385,000
Commercial Services - 23.24%
ABR Information Services Inc.
(a) ............................. 72,500 1,422,812
Boron, LePore & Associates Inc.
(a) ............................. 30,000 1,035,000
CDI Corp. (a) ................... 25,000 504,688
DeVry Inc. (a) .................. 18,200 557,375
Interim Services Inc. (a) ....... 35,000 818,125
MPW Industrial Services Group
Inc. (a) ........................ 65,000 731,250
RCM Technologies Inc. (a) ....... 32,500 861,250
Steiner Leisure Ltd. (a) ........ 40,000 1,280,000
Strayer Education Inc. .......... 14,750 519,937
Wackenhut Corp. ................. 25,000 548,437
-----------
8,278,874
Computers - 3.43%
Sykes Enterprises Inc. (a) (c) .. 40,000 1,220,000
Distribution & Wholesale - 5.05%
CDW Computer Centers Inc. (a)
(c) ............................. 8,000 767,500
Brightpoint Inc. (a) (c) ........ 75,000 1,031,250
-----------
1,798,750
Diversified Financial Services -
4.27%
Dain Rauscher Corp. (c) ......... 30,250 892,375
Southwest Securities Group Inc. . 31,250
628,906
-----------
1,521,281
Electrical Components &
Equipment - 2.75%
Artesyn Technologies Inc. (a)
(c) ............................. 70,000 980,000
Electronics - 5.37%
Ampex Corp. (a) ................. 200,000 225,000
Coherent Inc. (a) (c) ........... 30,000 373,125
Gentex Corp. (a) ................ 12,000 240,000
OYO Geospace Corp. (a) (c) ...... 23,000 198,375
Sawtek Inc. (a) (c) ............. 50,000 875,000
-----------
1,911,500
Entertainment - 1.14%
International Speedway Corp. .... 10,000 405,000
Environmental Control - 3.42%
IMCO Recycling Inc. ............. 40,000 617,500
Superior Services Inc. (a) ...... 30,000 601,875
-----------
1,219,375
Health Care - 2.68%
Healthcare Recoveries Inc. (a) .. 40,000 680,000
Horizon Health Corp. (a) ........ 35,000 275,625
-----------
955,625
Home Builders - 1.91%
Lennar Corp. (c) ................ 27,000 681,750
Market
Shares Value
------ -----
Common Stocks (continued)
Lodging - 2.11%
Cavanaughs Hospitality Corp. (a)
(c).............................. 60,000 $ 645,000
Lodgian Inc. (c) ................ 22,000 107,250
-----------
752,250
Media - 3.92%
Mail-Well Inc. (a) (c) .......... 61,000 697,688
World Color Press Inc. (a) (c) .. 23,000 700,062
-----------
1,397,750
Office Furnishings - 2.22%
CompX International Inc. (a) .... 30,000 791,250
Oil & Gas Producers - 0.65%
Marine Drilling Cos. Inc. (a) ... 30,100 231,394
Pharmaceuticals - 2.53%
PharMerica Inc. (a) ............. 150,000 900,000
Real Estate - 3.63%
LNR Property Corp. .............. 50,000 996,875
Meristar Hospitality Corp. (c) .. 16,000 297,000
-----------
1,293,875
Retail - 15.40%
Action Performance Cos. Inc. (a)
(c) ............................. 26,500 937,437
Cash America International Inc. . 38,100 578,644
Claire's Stores Inc. ............ 30,000 615,000
Genesco Inc. (a) (c) ............ 45,000 255,937
Hughes Supply Inc. .............. 25,000 731,250
Micro Warehouse Inc. (a) ........ 50,000 1,690,625
Musicland Stores (a) ............ 30,000 448,125
Sunglass Hut International Inc.
(a) ............................. 32,500 227,500
-----------
5,484,518
Savings & Loans - 1.63%
Commercial Federal Corp. ........ 25,000 579,688
Software - 7.97%
Cerner Corp. (a) (c) ............ 45,000 1,203,750
INSpire Insurance Solutions Inc.
(a) ............................. 30,000 551,250
Medical Manager Corp. (a) (c) ... 34,500 1,082,438
-----------
2,837,438
Textiles - 0.73%
Interface Inc. (c) .............. 28,000 259,875
-----------
Total Common Stocks
(cost $32,096,986) .......... 33,885,193
-----------
Principal
Amount
------
Short Term Investments - 4.87%
Money Market Funds - 4.87%
SSgA Money Market Fund, 4.85%
(b) ............................ $866,652 866,652
See notes to the financial statements.
<PAGE>
Principal Market
Amount Value
------ -----
Short Term Investments (continued)
Money Market Funds (continued)
SSgA Government Money Market
Fund, 4.68% (b) .................. $866,652 866,652
-----------
Total Short Term Investments
(cost $1,733,304) ........... 1,733,304
-----------
Total Investments - 100%
(cost $33,830,290) .............. $35,618,497
===========
- --------------------------------------------------------------------------------
(a) Non-income producing security.
(b) Dividend yields change daily to reflect current market conditions. Rate is
the quoted yield as of December 31, 1998.
(c) All or a portion of this security has been loaned.
See notes to the financial statements.
<PAGE>
JNL/JPM INTERNATIONAL & EMERGING
MARKETS SERIES
J.P. MORGAN INVESTMENT MANAGEMENT INC.
[J.P. MORGAN LOGO] TEAM MANAGEMENT
OBJECTIVE:
JNL/JPM International & Emerging Markets Series seeks as its investment
objective to provide high total return by investing in a portfolio of equity
securities of foreign companies in developed and, to lesser extent, developing
markets.
MONEY MANAGER COMMENTARY:
Since the Series' inception date, the Series' returned -1.24%. The MSCI All
Country World (ex U.S.) Index returned 2.11%.
The developed international equity markets achieved a very credible return over
the course of 1998, despite a very difficult period during the summer months.
European equity markets, in particular, started the year in a strong fashion,
reflecting the continued optimism over the prospects for corporate profits.
During the summer months, global market turmoil spread from Asia to Russia to
Latin America, calling into question the near-term earnings estimates in equity
markets, both developed and emerging around the world. Continental European
markets suffered much of the pain, as investor sentiment waned. However, the
global market turmoil of the third quarter turned to global market euphoria in
the fourth quarter as markets everywhere rallied strongly. Stocks were helped by
moves to ease monetary policy in the U.S. and Europe, with the Federal Reserve
cutting the overnight rate twice during the quarter, and towards year-end, the
European Central Bank orchestrating a coordinated rate cut. While many continue
to worry about a slowing global economy, the quick responses from central banks
and the overreaction to negative news during the summer provided room for
pleasing equity returns.
In contrast to Europe, the Japanese market fell over the year, although the
strength of the Yen in the final quarter resulted in a positive return in U.S.
dollars.
Our country allocation decisions were a positive influence over the period. In
particular, underweighting Japan and the UK proved to be a positive decision as
did an overweight position in Continental Europe. The primary reason for the
Series' underperformance was in stock selection, particularly in the European
countries. Within Europe, the markets have been very focused, rewarding "growth"
companies, emphasizing the very largest, but not necessarily fundamentally
better value companies.
After a strong fourth quarter, international equity markets once again appear
overvalued. We maintain overweight positions in Europe and continue to
underweight Japan. We continue to favor Australia and New Zealand. We hold an
underweight position in Latin America, especially in Brazil, and a neutral
position in the Asian emerging markets.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
JNL/JPM INTERNATIONAL & EMERGING MARKETS SERIES AND THE
MSCI ALL COUNTRY WORLD (EX U.S.)
[GRAPHIC]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
03/02/98 $10,000.00 $10,000.00
03/31/98 $10,490.00 $10,321.75
04/30/98 $10,750.00 $10,369.75
05/31/98 $10,320.00 $10,151.88
06/30/98 $10,230.00 $10,092.20
07/31/98 $10,270.00 $10,173.56
08/31/98 $8,560.00 $8,718.73
09/30/98 $8,140.00 $8,524.52
10/31/98 $9,200.00 $9,402.91
11/30/98 $9,600.00 $9,892.60
12/31/98 $9,875.81 $10,211.28
TOTAL
RETURN FOR THE PERIOD
FROM MARCH 2, 1998* TO
DECEMBER 31, 1998 ... -1.24%
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT RETURN AND
PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY
BE MORE OR LESS THAN THEIR ORIGINAL COST.
PERFORMANCE NUMBERS ARE NET OF ALL SERIES OPERATING EXPENSES, BUT DO NOT REFLECT
THE DEDUCTION OF INSURANCE CHARGES.
- ------------
* Commencement of operations.
<PAGE>
JNL Series Trust
JNL/JPM International & Emerging Markets Series
Statement of Assets and Liabilities
December 31, 1998
Assets
Investments in securities, at cost ........ $ 4,806,091
================
Investments in securities, at value ....... $ 4,893,546
Foreign currency .......................... 74,727
Receivables:
Dividends and interest ................. 5,828
Forward foreign currency
exchange contracts .................. 31,415
Foreign taxes recoverable .............. 6,655
Reimbursement from Adviser ................ 10,481
----------------
Total assets .............................. 5,022,652
----------------
Liabilities
Payables:
Investment advisory fees ............... 4,006
Forward foreign currency
exchange contracts .................. 5,820
Fund shares redeemed ................... 2
Investment securities purchased ........ 1,307
Other liabilities ......................... 14,512
----------------
Total liabilities ......................... 25,647
================
Net assets ................................ $ 4,997,005
================
Net assets consist of:
Paid-in capital ........................... $ 5,083,237
Undistributed net investment loss ......... (2,832)
Accumulated net realized loss on
investments
and foreign currency related items ..... (196,318)
Net unrealized appreciation on:
Investments ............................ 87,455
Foreign currency related items ......... 25,463
================
Net assets ................................ $ 4,997,005
================
Total shares outstanding (no par
value), unlimited shares authorized..... 508,660
================
Net asset value, offering and
redemption price per share................. $ 9.82
================
Statement of Operations
For the Period Ended December 31, 1998*
Investment income
Dividends .............................. $ 85,145
Interest ............................... 6,641
Foreign tax withholding ................ (8,381)
---------------
Total investment income ................... 83,405
---------------
Expenses
Investment advisory fees ............... 39,810
Custodian fees ......................... 37,824
Portfolio accounting fees .............. 24,320
Professional fees ...................... 4,413
Other .................................. 1,593
---------------
Total operating expenses .................. 107,960
Less:
Reimbursement from Adviser ............. (62,025)
---------------
Net expenses .............................. 45,935
---------------
Net investment income ..................... 37,470
---------------
Realized and unrealized gains (losses)
Net realized loss on:
Investments ............................ (196,318)
Foreign currency related items ......... (12,078)
Net change in unrealized appreciation on:
Investments ............................ 87,455
Foreign currency related items ......... 25,463
---------------
Net realized and unrealized losses ........ (95,478)
---------------
Net decrease in net assets
from operations ........................$ (58,008)
===============
- ----------------------------------------------------------
* For period beginning March 2, 1998 (commencement of operations).
See notes to the financial statements.
<PAGE>
JNL Series Trust
JNL/JPM International & Emerging Markets Series
Statement of Changes in Net Assets
Period from
March 2,
1998* to
December 31,
1998
----------------
Operations:
Net investment income ...................... $37,470
Net realized loss on:
Investments .............................. (196,318)
Foreign currency related items ........... (12,078)
Net change in unrealized appreciation on:
Investments .............................. 87,455
Foreign currency related items ........... 25,463
-------
Net decrease in net assets from
operations ................................... (58,008)
-------
Distributions to shareholders:
From net investment income ................. (28,224)
From net realized gains on
investment transactions ................. -
-------
Total distributions to shareholders .......... (28,224)
-------
Share transactions:
Proceeds from the sale of shares ........... 5,079,227
Reinvestment of distributions .............. 28,224
Cost of shares redeemed .................... (24,214)
-------
Net increase in net assets from share
transactions .............................. 5,083,237
-------
Net increase in net assets ................... 4,997,005
Net assets at beginning of period ............ -
-------
Net assets end of period ..................... $ 4,997,005
=======
Undistributed net investment loss ............ $(2,832)
=======
Financial Highlights
Period from
March 2,
1998* to
December 31,
1998
-------------
Selected Per Share Data
Net asset value, beginning of period ....... $10.00
------------
Income from operations:
Net investment income .................... 0.08
Net realized and unrealized losses on
investments and foreign currency
related items ......................... (0.20)
------------
Total loss from operations ................. (0.12)
------------
Less distributions:
From net investment income ............... (0.06)
From net realized gains on investment
transactions .......................... -
------------
Total distributions ........................ (0.06)
------------
Net decrease ............................... (0.18)
------------
Net asset value, end of period ............. $9.82
============
Total Return (a) ........................... (1.24)%
Ratios and Supplemental Data:
Net assets, end of period (in
thousands) ............................... $4,997
Ratio of net operating expenses to
average
net assets (b) (c) .................... 1.125%
Ratio of net investment income to
average
net assets (b) (c) .................... 0.62%
Portfolio turnover ....................... 231.88%
Ratio information assuming no expense
reimbursement:
Ratio of net operating expenses to
average net assets (b) ................... 2.64%
Ratio of net investment loss to average
net assets (b) ........................ (0.90)%
- --------------------------------------------------------------------------------
* 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 period ended December 31, 1998.
(b) Annualized for the period ended December 31, 1998.
(c) Computed after giving effect to the Adviser's expense reimbursement.
See notes to the financial statements.
<PAGE>
JNL/JPM INTERNATIONAL & EMERGING MARKETS SERIES
SCHEDULE OF INVESTMENTS
December 31, 1998
Market
Shares Value
------ -----
Common Stocks -- 92.02%
Australia -- 3.59%
Banks -- 1.13%
Westpac Banking Corp. Ltd. ...... 8,300 $55,540
Insurance -- 1.01%
QBE Insurance Group Ltd. ........ 12,000 49,635
Media -- 1.45%
News Corp. Ltd.(a) .............. 10,700 70,682
---------
Total Australia ................ 175,857
Austria -- 0.73%
Banks -- 0.73%
Bank Austria AG ................. 700 35,596
Belgium -- 0.56%
Oil & Gas Producers -- 0.56%
PetroFina SA (a) ................ 60 27,335
Canada -- 1.54%
Banks -- 1.54%
Royal Bank of Canada ............ 1,500 75,123
Denmark -- 2.30%
Food -- 1.00%
Danisco A/S ..................... 900 48,788
Telecommunications -- 1.30%
GN Store Nord A/S ............... 1,800 63,636
---------
Total Denmark .................. 112,424
Finland -- 1.05%
Iron & Steel -- 1.05%
Rautaruukki OYJ ................. 8,000 51,618
France -- 15.51%
Banks -- 1.32%
Societe Generale ................ 400 64,747
Building Materials -- 0.38%
Compagnie de Saint Gobain ....... 131 18,487
Chemicals -- 0.89%
Rhodia SA (a) ................... 2,853 43,374
Commercial Services -- 3.52%
Vivendi ......................... 665 172,465
Cosmetics & Personal Care -- 0.90%
Christian Dior SA ............... 400 44,214
Diversified Financial Services --
1.55%
Paribas ......................... 873 75,839
Food -- 1.08%
Carrefour Supermarche ........... 70 52,822
Market
Shares Value
------ -----
Common Stocks (continued)
France (continued)
Holding Companies - Diversified-
0.52%
Lagardere S.C.A ................. 600 $ 25,487
Media -- 0.56%
Canal Plus ...................... 100 27,276
Oil & Gas Producers -- 2.37%
Elf Aquitaine SA ................ 505 58,349
Total SA ........................ 572 57,906
---------
116,255
Pharmaceuticals -- 1.18%
Sanofi SA ....................... 350 57,593
Semiconductors -- 1.24%
ST Microelectronics NV (a) ...... 770 60,597
---------
Total France ................... 759,156
Germany -- 7.92%
Chemicals -- 1.09%
BASF AG ......................... 1,400 53,426
Electric -- 1.68%
RWE AG .......................... 1,500 82,128
Insurance -- 1.85%
Muenchener Rueckversicheungs -
Gesellschaft AG .............. 187 90,549
Manufacturing -- 1.47%
VEBA AG ......................... 1,200 71,787
Pharmaceuticals -- 1.83%
Merck KgaA ...................... 600 27,001
Schering AG ..................... 500 62,778
---------
89,779
---------
Total Germany .................. 387,669
Hong Kong -- 1.62%
Banks -- 1.17%
Dao Heng Bank Group Ltd. ........ 18,500 57,189
Telecommunications -- 0.45%
Smartone Telecom ................ 8,000 22,200
---------
Total Hong Kong ............. 79,389
Italy -- 1.60%
Insurance -- 0.17%
Bayerische Vita SpA (a) ........ 1,300 8,295
Telecommunications -- 1.43%
Telecom Italia SpA .............. 11,110 69,881
---------
Total Italy ............... 78,176
See notes to the financial statements.
<PAGE>
JNL/JPM INTERNATIONAL & EMERGING MARKETS SERIES
SCHEDULE OF INVESTMENTS (continued)
Market
Shares Value
------ -----
Common Stocks (continued)
Japan -- 11.35%
Banks -- 0.89%
Mitsui Trust & Banking Co. Ltd. ..... 18,000 $ 20,540
Sanwa Bank Ltd. ..................... 3,000 23,113
---------
43,653
Building Materials -- 1.48%
Taiheiyo Cement Corp. ............... 13,000 32,543
Tostem Corp. ........................ 2,000 39,628
---------
72,171
Chemicals -- 0.65%
Mitsubishi Chemical Corp. ........... 15,000 31,579
Computers -- 1.09%
Fujitsu Ltd. ........................ 4,000 53,251
Diversified & Wholesale -- 1.29%
Mitsubishi Corp. .................... 11,000 63,246
Electronics -- 0.70%
Fanuc Ltd. .......................... 1,000 34,233
Home Furnishings -- 0.89%
Sony Corp. .......................... 600 43,680
Machinery -- 0.59%
Tadano Ltd. ......................... 10,000 28,925
Pharmaceuticals -- 2.10%
Takeda Chemical Industries .......... 1,000 38,479
Yamanouchi Pharmaceutical Co.
Ltd. ................................ 2,000 64,396
---------
102,875
Telecommunications -- 1.67%
DDI Corp. ........................... 22 81,734
-----------
Total Japan ........................ 555,347
Netherlands -- 3.91%
Electronics -- 1.65%
Philips Electronics NV .............. 1,205 80,817
Food - 1.11%
Laurus NV ......................... 2,160 54,497
Media -- 0.44%
Wolters Kluwer NV ................... 100 21,387
Retail -- 0.64%
Vendex NV ........................... 1,300 31,554
Transportation -- 0.07%
TNT Post Groep NV ................... 100 3,220
---------
Total Netherlands .................. 191,475
Market
Shares Value
------ -----
Common Stocks (continued)
New Zealand -- 0.30%
Forest Products & Paper -- 0.30%
Fletcher Challenge Paper (a) ........ 21,800 $14,569
Norway -- 0.64%
Banks -- 0.64%
Sparebanken Nord .................... 1,620 31,554
Philippines -- 0.32%
Electric -- 0.32%
First Philippine Holdings Corp. ..... 28,800 15,548
Portugal -- 0.70%
Banks -- 0.70%
Banco Pinto & Sotto Mayor ........... 1,812 34,370
South Africa -- 1.74%
Banks -- 0.29%
ABSA Group Ltd. ..................... 3,000 14,235
Holding Companies - Diversified -
0.63%
Anglo American Corp. of South
Africa Ltd........................... 300 8,444
South African Breweries Ltd. ........ 1,325 22,315
---------
30,759
Metals & Mining -- 0.82%
Anglogold Ltd. ...................... 1,036 40,312
---------
Total South Africa ................. 85,306
Spain -- 3.79%
Electric -- 2.06%
Iberdrola SA ........................ 5,400 100,880
Engineering & Construction -- 1.20%
Actividades de Construccion
Servicios SA......................... 1,500 59,105
Iron & Steel -- 0.53%
Acerinox SA ......................... 1,100 25,580
---------
Total Spain ........................ 185,565
Sweden -- 4.01%
Auto Parts & Equipment -- 2.20%
Autoliv Inc. - ADR .................. 3,000 107,449
Engineering and Construction -- 0.63%
ABB AB (a) .......................... 2,900 30,875
Forest Products & Paper -- 1.18%
Stora Enso "R" ..................... 4,338 37,912
Stora Enso "A"...................... 2,338 20,144
---------
58,056
---------
Total Sweden ....................... 196,380
See notes to the financial statements.
<PAGE>
JNL/JPM INTERNATIONAL & EMERGING MARKETS SERIES
SCHEDULE OF INVESTMENTS (continued)
Market
Shares Value
------ -----
Common Stocks (continued)
Switzerland -- 12.03%
Banks -- 1.76%
UBS AG (a) ........................ 280 $ 86,016
Food -- 2.00%
Nestle SA ........................... 45 97,947
Insurance -- 4.21%
Schweizerische Rueckversicherungs-
Gesellschaft ..................... 45 117,307
Zurich Allied AG .................... 120 88,840
--------
206,147
Pharmaceuticals -- 1.75%
Roche Holding AG .................... 7 85,404
Telecommunications - 2.31%
Swisscom AG (a) .................... 270 113,016
--------
Total Switzerland .................. 588,530
Turkey - 0.14%
Banks - 0.14%
Yapi Kredi Bankasi ................ 577,964 6,686
United Kingdom -- 13.61%
Auto Parts & Equipment -- 0.72%
LucasVarity Plc ..................... 10,500 35,064
Banks -- 1.98%
Lloyds TSB Group Plc ................ 6,800 96,820
Commercial Services -- 0.36%
Hays Plc ............................ 2,000 17,611
Electric - 0.53%
National Power ..................... 3,000 25,868
Food -- 1.68%
PIC International ................... 9,678 12,220
Tate & Lyle Plc ..................... 13,000 69,978
--------
82,198
Household Products -- 1.45%
Unilever Plc ........................ 6,300 70,861
Insurance -- 1.90%
Allied Zurich Plc ................... 3,500 52,596
Royal & Sun Alliance Insurance
Group Plc ........................ 5,000 40,704
--------
93,300
Oil & Gas Producers -- 1.18%
Shell Transport & Trading Co. Plc ... 9,400 57,784
Pharmaceuticals -- 2.28%
SmithKline Beecham Plc .............. 4,600 63,753
Market
Shares Value
------ -----
Common Stocks (continued)
United Kingdom (continued)
Pharmaceuticals (continued)
Zeneca Group Plc .................... 1,100 $ 47,918
--------
111,671
Telecommunications -- 0.90%
Cable and Wireless Plc (a) .......... 3,600 44,021
Tobacco -- 0.63%
British American Tobacco Plc ........ 3,500 30,819
--------
Total United Kingdom ............... 666,017
United States -- 3.06%
Media -- 1.02%
Central European Media
Enterprises Ltd. .................... 100 656
Grupo Televisa SA - GDR ............. 2,000 49,375
--------
50,031
Oil & Gas Producers -- 0.86%
Surgutneftegaz ...................... 5,200 16,771
YPF SA - ADR ........................ 900 25,144
--------
41,915
Telecommunications - 0.87%
Tele Norte Leste Participacoes-
ADR(a) ................................. 3,394 42,213
Transportation -- 0.31%
Stolt-Nielsen SA - ADR .............. 1,500 15,375
--------
Total United States ................ 149,534
--------
Total Common Stocks
(cost $4,410,493) ............... 4,503,224
--------
Preferred Stocks -- 1.21%
Germany -- 1.21%
Auto Manufacturers -- 0.38%
Volkswagen AG ....................... 370 18,427
Manufacturing -- 0.83%
GEA AG .............................. 1,700 40,802
--------
Total Germany ...................... 59,229
--------
Total Preferred Stocks
(cost $71,727) .................. 59,229
--------
Principal
Amount
------
Corporate Bonds -- 0.89%
United Kingdom -- 0.89%
Food -- 0.89%
Compass Group Plc, 5.75%,
10/05/2007
GBP............................ 15,000 43,685
--------
Total Corporate Bonds
(cost $36,463) .................. 43,685
--------
See notes to the financial statements.
<PAGE>
JNL/JPM INTERNATIONAL & EMERGING MARKETS SERIES
SCHEDULE OF INVESTMENTS (continued)
Principal Market
Amount Value
------ -----
Short Term Investments -- 5.88%
Money Market Fund -- 0.01%
SSgA Money Market Fund, 4.85% (b) ... $ 408 $ 408
Repurchase Agreement -- 5.87%
Repurchase agreement with State
Street Bank, 2.00% (Collateralized by
$275,000 U.S. Treasury Note, 5.875%,
due 02/15/2004, market value
$295,969) acquired on 12/31/1998,
due 01/04/1999....................... 287,000 287,000
---------
Total Short Term Investments
(cost $287,408) ................. 287,408
---------
Total Investments -- 100%
(cost $4,806,091) ................... $4,893,546
=========
- --------------------------------------------------------------------------------
(a) Non-income producing security.
(b) Dividend yields change daily to reflect current market conditions. Rate is
the quoted yield as of December 31, 1998.
See notes to the financial statements.
<PAGE>
JNL/PIMCO TOTAL RETURN BOND SERIES
PACIFIC INVESTMENT MANAGEMENT COMPANY
[PACIFIC INVESTMENT MANAGEMENT LOGO] WILLIAM H. GROSS
OBJECTIVE:
JNL/PIMCO Total Return Bond Series seeks as its investment objective 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.
MONEY MANAGER COMMENTARY:
Extreme volatility in financial markets worldwide made 1998 one of the most
difficult years in recent memory for fixed income managers. Still, market
participants able to shift nimbly among all fixed income sectors delivered solid
returns.
Following Russia's devaluation in August, concern about further currency
devaluations and weak Asian economies made investors wary of taking risk.
Heightened caution substantially reduced liquidity in most bond markets. Yield
premiums required for holding non-Treasury bonds doubled for some securities
between mid-summer and October as investors fled to safe assets.
During the fourth quarter, 50 basis points of interest rate cuts by the Federal
Reserve, together with easing by other central banks, calmed the markets and
restored liquidity. As confidence returned, Treasuries lost some appeal as a
safe haven. Investors shifted money to other bond market sectors and to stocks,
which surged to record highs. Yield premiums on corporate and emerging markets
debt narrowed, though they remained well above levels seen earlier in the year.
Hopes of additional rate cuts in the near term faded late in the year in the
face of a strong U.S. economy, reducing demand for Treasuries and driving yields
up 10 to 30 basis points. Intermediate rates rose most and the yield curve
flattened, as the difference in yield between two-year and 30-year maturities
narrowed by 14 basis points.
Looking ahead, the Series will:
- - Target portfolio duration at approximately 0.25 years above it's benchmark
to capture gains from falling interest rates
- - Emphasize short/intermediate maturity securities which should benefit as
these rates decline more than long rates
- - Maintain a cautious approach to risk given continued market uncertainty,
with sector weightings near current levels
- - Underweight investment-grade corporates while risks of renewed financial
market turmoil persist.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
JNL/PIMCO TOTAL RETURN BOND SERIES AND THE
LEHMAN BROTHERS AGGREGATE BOND INDEX
[GRAPHIC]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
03/02/98 $10,000.00 $10,000.00
03/31/98 $9,940.00 $9,917.91
04/30/98 $9,970.00 $9,968.48
05/31/98 $10,200.00 $10,064.19
06/30/98 $10,330.00 $10,147.81
07/31/98 $10,290.00 $10,169.17
08/31/98 $10,440.00 $10,329.56
09/30/98 $10,650.00 $10,577.07
10/31/98 $10,540.00 $10,577.58
11/30/98 $10,510.00 $10,581.19
12/31/98 $10,569.69 $10,613.03
TOTAL RETURN
FOR THE PERIOD
FROM MARCH 2, 1998* TO
DECEMBER 31, 1998 ... 5.70%
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT RETURN AND
PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY
BE MORE OR LESS THAN THEIR ORIGINAL COST.
PERFORMANCE NUMBERS ARE NET OF ALL SERIES OPERATING EXPENSES, BUT DO NOT REFLECT
THE DEDUCTION OF INSURANCE CHARGES.
- ------------
* Commencement of operations.
<PAGE>
JNL Series Trust
JNL/PIMCO Total Return Bond Series
Statement of Assets and Liabilities
December 31, 1998
Assets
Investments in securities, at cost ..... $ 6,082,505
==============
Investments in securities, at value .... $ 6,106,864
Interest receivable .................... 44,539
--------------
Total assets ........................... 6,151,403
--------------
Liabilities
Payables:
Investment advisory fees ............ 3,468
Fund shares redeemed ................ 118
Variation margin ....................... 250
Other liabilities ...................... 14,942
--------------
Total liabilities ...................... 18,778
==============
Net assets ............................. $ 6,132,625
==============
Net assets consist of:
Paid-in capital ........................ $ 6,121,855
Undistributed net investment income .... -
Accumulated net realized loss
on investments and future contracts . (1,151)
Net unrealized appreciation
(depreciation) on:
Investments ......................... 24,359
Futures contracts ................... (12,438)
==============
Net assets ............................. $ 6,132,625
==============
Total shares outstanding (no par
value),
unlimited shares authorized
............authorized.................. 603,395
==============
Net asset value, offering and
redemption
price per share...................... $ 10.16
==============
Statement of Operations
For the Period Ended December 31, 1998*
Investment income
Interest ............................ $ 211,843
--------------
Expenses
Investment advisory fees ............ 25,652
Custodian fees ...................... 11,437
Portfolio accounting fees ........... 13,984
Professional fees ................... 4,463
Other ............................... 1,797
--------------
Total operating expenses ............... 57,333
Less:
Reimbursement from Adviser .......... (26,184)
--------------
Net expenses ........................... 31,149
--------------
Net investment income .................. 180,694
--------------
Realized and unrealized gains (losses)
Net realized gain on:
Investments ......................... 35,855
Futures contracts ................... 18,225
Net change in unrealized appreciation
(depreciation) on:
Investments ......................... 24,359
Futures contracts ................... (12,438)
--------------
Net realized and unrealized gains ...... 66,001
--------------
Net increase in net assets
from operations ..................... $ 246,695
==============
- --------------------------------------------------------------------------------
* For period beginning March 2, 1998 (commencement of operations).
See notes to the financial statements.
<PAGE>
JNL Series Trust
JNL/PIMCO Total Return Bond Series
Statement of Changes in Net Assets
Period from
March 2,
1998* to
December 31,
1998
----------------
Operations:
Net investment income ............... $ 180,694
Net realized gain on:
Investments ....................... 35,855
Futures contracts ................. 18,225
Net change in unrealized appreciation
(depreciation) on:
Investments ...................... 24,359
Futures contracts ................. (12,438)
-----------
Net increase in net assets from
operations ............................ 246,695
-----------
Distributions to shareholders:
From net investment income .......... (182,399)
From net realized gains on investment
transactions ..................... (55,231)
-----------
Total distributions to shareholders ... (237,630)
-----------
Share transactions:
Proceeds from the sale of shares .... 7,323,899
Reinvestment of distributions ....... 237,630
Cost of shares redeemed ............. (1,437,969)
-----------
Net increase in net assets from share
transactions ....................... 6,123,560
-----------
Net increase in net assets ............ 6,132,625
Net assets beginning of period ........ --
-----------
Net assets end of period .............. $ 6,132,625
===========
Undistributed net investment income ... $ --
===========
Financial Highlights
Period from
March 2,
1998* to
December 31,
1998
----------------
Selected Per Share Data
Net asset value, beginning of period .. $ 10.00
---------
Income from operations:
Net investment income ............... 0.31
Net realized and unrealized gains on
investments and futures contracts 0.26
---------
Total income from operations .......... 0.57
---------
Less distributions:
From net investment income .......... (0.31)
From net realized gains on investment
transactions ..................... (0.10)
---------
Total distributions ................... (0.41)
---------
Net increase .......................... 0.16
---------
Net asset value, end of period ........ $ 10.16
=========
Total Return (a) ...................... 5.70%
Ratios and Supplemental Data:
Net assets, end of period (in
thousands) .......................... $ 6,133
Ratio of net operating expenses to
average net assets (b) (c) ......... 0.85%
Ratio of net investment income to
average net assets (b) (c) .......... 4.95%
Portfolio turnover .................. 269.16%
Ratio information assuming no expense
reimbursement:
Ratio of net operating expenses to
average net assets (b) .............. 1.57%
Ratio of net investment income to
average net assets (b) .............. 4.23%
- --------------------------------------------------------------------------------
* 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 period ended December 31, 1998.
(b) Annualized for the period ended December 31, 1998.
(c) Computed after giving effect to the Adviser's expense reimbursement.
See notes to the financial statements.
<PAGE>
JNL/PIMCO TOTAL RETURN BOND SERIES
SCHEDULE OF INVESTMENTS
December 31, 1998
Principal Market
Amount Value
Asset Backed Securities - 3.28%
Diversified Financial Services -
3.28%
Ford Credit Auto Owner Trust,
5.73%,
11/15/2000 .................... $ 200,000 $ 200,437
-----------
Total Asset Backed Securities
(cost $199,995) ............... 200,437
-----------
Corporate Bonds - 29.77%
Banks - 6.88%
Nationsbank Corp., 6.20%, 200,000 203,620
08/15/2003 ......................
First Chicago, 8.25%, 06/15/2002 200,000 216,416
-----------
420,036
Chemicals - 3.57%
Dow Chemical Co., 8.04%,
07/02/2005 ...................... 200,000 217,856
Diversified Financial Services -
5.46%
Goldman Sachs Group LP, (144a)
7.80%, 07/15/2002 ............. 115,000 122,828
Sears Roebuck Acceptance Corp.,
7.03%, 06/04/2003 ............. 200,000 210,426
-----------
333,254
Electric - 2.15%
Niagara Mohawk Power Corp.,
9.50%,
06/01/2000 .................... 125,000 131,114
Insurance - 6.88%
Allstate Corp., 6.75%,
06/15/2003 ...................... 200,000 209,460
Safeco Corp., 7.02%, 09/18/2002 . 200,000 210,620
-----------
420,080
Sovereign - 3.18%
Republic of Argentina, 8.573%,
08/15/1999 ARS................. 200,000 194,480
Tobacco - 1.65%
Philip Morris Cos. Inc., 6.15%,
03/15/2000 .................... 100,000 100,830
-----------
Total Corporate Bonds
(cost $1,801,362) ........... 1,817,650
-----------
U.S. Government Securities - 31.73%
U.S. Government Agencies - 19.70%
Federal Home Loan Mortgage Corp.,
7.00%, 05/15/2023 ............. 1,181,228 1,203,159
Principal Market
Amount Value
------ -----
U.S. Government Securities
(continued)
U.S. Treasury Bonds - 12.03%
10.75%, 08/15/2005 ............$ 200,000 $ 266,750
8.00%, 11/15/2021 ............. 350,000 467,961
-----------
734,711
-----------
Total U.S. Government
Securities
(cost $1,930,241) ........... 1,937,870
-----------
Short Term Investments - 35.22%
Commercial Paper - 17.91%
Ford Motor Credit Co., 5.51%,
01/22/1999 ................... 200,000 199,357
General Electric Capital Corp.,
5.51%,
01/25/1999 ................... 200,000 199,265
General Motors Acceptance Corp.,
5.51%, 01/25/1999 ............ 200,000 199,265
National Rural Utilities
Cooperative Finance Corp., 4.88%,
03/23/1999 ...................... 300,000 296,706
Procter & Gamble Co., 5.25%,
02/05/1999 ................... 200,000 198,979
-----------
1,093,572
Money Market Fund - 0.00%
SSgA Money Market Fund, 4.85%
(a) ............................. 464 464
Repurchase Agreement - 2.11%
Repurchase agreement with State
Street
Bank, 2.00% (Collateralized by
$125,000 U.S. Treasury Note,
5.875%, due 02/15/2004, market
value $134,531), acquired on
12/31/1998, due 01/04/1999 ... 129,000 129,000
U.S. Government Agencies - 14.71%
Federal Home Loan Bank Discount
Note, 5.12%, 01/20/1999 ....... 200,000 199,460
Federal Home Loan Mortgage Corp.
Discount Note, 5.08%,
01/15/1999 ...................... 700,000 698,617
-----------
898,077
U.S. Treasury Bills - 0.49%
3.96%, 03/04/1999 (b)............ 20,000 19,864
4.09%, 03/04/1999 (b)............ 10,000 9,930
-----------
29,794
-----------
Total Short Term Investments
(cost $2,150,907) ............ 2,150,907
-----------
Total Investments - 100%
(cost $6,082,505) ............... $6,106,864
Number of Expiration Market Unrealized
Issuer Contracts Date Value Depreciation
------ --------- ---- ----- ------------
U.S. Treasury Notes 8 March 1999 $ 953,250 $ (12,438)
See notes to the financial statements.
<PAGE>
JNL/PUTNAM GROWTH SERIES
PUTNAM INVESTMENT MANAGEMENT, INC.
[PUTNAM INVESTMENTS LOGO] C. BETH COTNER
OBJECTIVE:
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 objectives. It is
intended that this Series will invest primarily in the common stocks of
companies believed to have the opportunity for capital growth.
MONEY MANAGER COMMENTARY:
For much of 1998, U.S. equities performed extremely well, although in late
summer, the market took a decided dip as investors grew skittish about continued
financial and economic turmoil among developing nations. Stocks recovered as
fall wore on, closing out their fourth consecutive year of sparkling returns.
Large-capitalization stocks continued to outpace small- and mid-cap stocks, and
companies whose operations were primarily domestic fared better than
manufacturers and exporters with links to Asia. In addition, growth stocks
outperformed their value counterparts.
The Series fared well during the first half of 1998, benefiting from strong
performance in large-cap technology stocks. In the tumultuous third quarter of
1998, the Series lagged the benchmark as holdings in the finance sector dragged
down returns. By fourth quarter, however, the Series handily outperformed the
index due in large part to overweight exposure to the surging technology area,
the quarter's top-performing sector. Strong stock selection among consumer
stocks in the fourth quarter was also a major contributor to performance.
Overweighting three of the year's top-performing sectors, technology, health
care and consumer cyclicals, aided returns throughout the period. In technology,
the focus was on software and PC companies, while in health care, the emphasis
was on major pharmaceuticals. In consumer cyclicals, significant positions were
held in major retailers, which were particularly robust in the fourth quarter.
Looking ahead, the market will likely remain volatile, given the unsettled
nature of the global economy, yet the U.S. continues to benefit from low
inflation and recent declines in interest rates. This unique environment may
serve as the foundation for domestic stability, helping to maintain investor
confidence and nurture growth. In this environment, we are maintaining our
disciplined approach to stock selection, which we believe will result in
superior returns over time. The Series remains overweighted in consumer
cyclicals (primarily retail) and in selected technology and health-care areas.
Sectors in which earnings growth is less evident and in which the Series is
underweighted include energy, basic industry, and utilities.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
JNL/PUTNAM GROWTH SERIES AND THE S&P 500 INDEX
[GRAPHIC]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
5/15 $10,000 $10,000
6/30 $10,540 $10,356
9/30 $12,080 $11,179
12/31/1995 $12,734 $11,851
3/31 $13,769 $12,487
6/30 $15,356 $13,046
9/30 $15,521 $13,448
12/31/1996 $16,148 $14,568
3/31 $15,887 $14,958
6/30 $17,614 $17,567
9/30 $19,057 $18,882
12/31/1997 $19,624 $19,424
3/31 $22,891 $22,134
6/30 $24,142 $22,863
9/30 $21,246 $20,593
12/31/1998 $26,556 $24,975
AVERAGE ANNUAL
TOTAL RETURN
1 year.................. 34.93%
Since inception * ...... 30.82%
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT RETURN AND
PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY
BE MORE OR LESS THAN THEIR ORIGINAL COST.
PERFORMANCE NUMBERS ARE NET OF ALL SERIES OPERATING EXPENSES, BUT DO NOT REFLECT
THE DEDUCTION OF INSURANCE CHARGES.
- ------------
* Inception date May 15, 1995. Prior to May 1, 1997, the JNL/Putnam Growth
Series was the JNL/Phoenix Investment Counsel Growth Series and was
sub-advised by Phoenix Investment Counsel, Inc.
<PAGE>
JNL Series Trust
JNL/Putnam Growth Series
Statement of Assets and Liabilities
December 31, 1998
Assets
Investments in securities, at cost .......$ 131,729,578
================
Investments in securities, at value ......$ 181,785,947
Receivables:
Dividends and interest ................. 87,988
Fund shares sold ....................... 136,823
Investment securities sold ............. 505,010
Collateral for securities loaned .......... 13,376,071
----------------
Total assets .............................. 195,891,839
----------------
Liabilities
Payables:
Investment advisory fees ............... 128,357
Fund shares redeemed ................... 44,312
Investment securities purchased ........ 213,889
Return of collateral for securities
loaned .................................... 13,376,071
Other liabilities ......................... 31,741
----------------
Total liabilities ......................... 13,794,370
----------------
Net assets ...............................$ 182,097,469
================
Net assets consist of:
Paid-in capital ..........................$ 131,849,723
Undistributed net investment income ....... -
Accumulated net realized gain on
investments................................ 191,377
Net unrealized appreciation on
investments ............................... 50,056,369
================
Net assets ...............................$ 182,097,469
================
Total shares outstanding (no par
value), unlimited shares authorized....... 7,959,785
================
Net asset value, offering and
redemption price per share................$ 22.88
================
Statement of Operations
For the Year Ended December 31, 1998
Investment income
Dividends ..............................$ 924,924
Interest ............................... 268,739
Foreign tax withholding ................ (316)
---------------
Total investment income .................. 1,193,347
---------------
Expenses
Investment advisory fees ............... 1,144,908
Custodian fees ......................... 40,488
Portfolio accounting fees .............. 24,901
Professional fees ...................... 37,770
Other .................................. 31,570
---------------
Total operating expenses .................. 1,279,637
Less:
Reimbursement from Adviser ............. -
---------------
Net expenses .............................. 1,279,637
---------------
Net investment loss ....................... (86,290)
---------------
Realized and unrealized gains
Net realized gain on investments .......... 227,951
Net change in unrealized appreciation
on investments ......................... 39,483,153
---------------
Net realized and unrealized gains ......... 39,711,104
---------------
Net increase in net assets
from operations ........................$ 39,624,814
===============
See notes to the financial statements.
<PAGE>
JNL Series Trust
JNL/Putnam Growth Series
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year ended December 31,
----------------------------------
1998 1997
---------------- ----------------
<S> <C> <C>
Operations:
Net investment income (loss) ........................................................ $ (86,290) $ 169,636
Net realized gain (loss) on:
Investments ....................................................................... 227,951 1,060,161
Foreign currency related items .................................................... - (4)
Net change in unrealized appreciation on investments ................................ 39,483,153 10,282,868
---------------- ----------------
Net increase in net assets from operations ............................................ 39,624,814 11,512,661
---------------- ----------------
Distributions to shareholders:
From net investment income .......................................................... (85,266) (84,366)
From net realized gains on investment transactions .................................. (263,115) (1,494,204)
---------------- ----------------
Total distributions to shareholders ................................................... (348,381) (1,578,570)
---------------- ----------------
Share transactions:
Proceeds from the sale of shares .................................................... 87,352,638 73,766,092
Reinvestment of distributions ....................................................... 348,381 1,560,371
Cost of shares redeemed ............................................................. (28,492,435) (24,451,617)
---------------- ----------------
Net increase in net assets from share transactions .................................... 59,208,584 50,874,846
---------------- ----------------
Net increase in net assets ............................................................ 98,485,017 60,808,937
Net assets beginning of period ........................................................ 83,612,452 22,803,515
---------------- ----------------
Net assets end of period .............................................................. $ 182,097,469 $ 83,612,452
================ ================
Undistributed net investment income ................................................... $ - $ 85,266
================ ================
</TABLE>
See notes to the financial statements.
<PAGE>
JNL Series Trust
JNL/Putnam Growth Series
Financial Highlights
<TABLE>
<CAPTION>
Period from Period from
April 1, May 15,
Year ended December 31, 1996 to 1995* to
------------------------------- December 31, March 31,
1998 1997 1996 1996
--------------- --------------- --------------- ------------
<S> <C> <C> <C> <C>
Selected Per Share Data
Net asset value, beginning of period ................................. $ 16.99 $ 14.21 $ 12.50 $ 10.00
--------------- --------------- --------------- -----------
Income from operations:
Net investment income (loss) ....................................... 0.04 0.04 0.01
(0.01)
Net realized and unrealized gains on investments ................... 5.94 3.07 2.12 3.66
--------------- --------------- --------------- ------------
Total income from operations ......................................... 5.93 3.11 2.16 3.67
--------------- --------------- --------------- ------------
Less distributions:
From net investment income ......................................... (0.01) (0.02) (0.05) -
From net realized gains on investment transactions ................. (0.03) (0.31) (0.40) (1.17)
--------------- --------------- --------------- ------------
Total distributions .................................................. (0.04) (0.33) (0.45) (1.17)
--------------- --------------- --------------- ------------
Net increase ......................................................... 5.89 2.78 1.71 2.50
--------------- --------------- --------------- ------------
Net asset value, end of period ....................................... $ 22.88 $ 16.99 $ 14.21 $ 12.50
=============== =============== =============== ============
Total Return (a) ..................................................... 34.93% 21.88% 17.28% 37.69%
Ratios and Supplemental Data:
Net assets, end of period (in thousands) ........................... $ 182,097 $ 83,612 $ 22,804 $ 2,518
Ratio of net operating expenses to average net assets (b) (c) ...... 1.01% 1.05% 1.04% 0.95%
Ratio of net expenses to average net assets (c) .................... - 1.13% - -
Ratio of net investment income (loss) to average net assets (b) (c) (0.07)% 0.31% 0.94% 0.28%
Portfolio turnover ................................................. 70.55% 194.81% 184.33% 255.03%
Ratio information assuming no expense reimbursement or
fees paid indirectly:
Ratio of net operating expenses to average net assets (b) ......... 1.01% 1.05% 1.27% 5.38%
Ratio of net investment income (loss) to average net assets (b) ... (0.07)% 0.31% 0.71% (4.15)%
- ------------------------------------------------------------------------------------------------------------------------------------
</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 Adviser's expense reimbursement and
fees paid indirectly.
See notes to the financial statements.
<PAGE>
JNL/PUTNAM GROWTH SERIES
SCHEDULE OF INVESTMENTS
December 31, 1998
Market
Shares Value
------ -----
Common Stocks - 95.47%
Advertising - 1.34%
Interpublic Group of Companies
Inc. ............................ 30,500 $2,432,375
Aerospace & Defense - 0.93%
United Technologies Corp. ....... 15,600 1,696,500
Banks - 4.59%
Comerica Inc. ................... 24,900 1,697,869
Fifth Third Bancorp (c) ......... 18,550 1,322,847
Firstar Corp. (c) ............... 24,112 2,248,444
Wells Fargo Co. ................. 76,800 3,067,200
---------
8,336,360
Biotechnology - 0.47%
Centocor Inc. (a) (c) ........... 18,900 852,862
Building Materials - 0.49%
Masco Corp. ..................... 30,700 882,625
Commercial Services - 0.47%
Quintiles Transnational Corp.
(a) (c) ......................... 16,100 859,338
Computers - 8.58%
Ascend Communications Inc. (a)
(c) ............................. 24,200 1,591,150
Cisco Systems Inc. (a) .......... 19,900 1,846,969
Computer Sciences Corp. ......... 23,200 1,494,950
Dell Computer Corp. (a) ......... 20,500 1,500,344
EMC Corp. ....................... 34,000 2,890,000
International Business Machines
Corp. ........................... 24,000 4,434,000
Sun Microsystems Inc. (a) ....... 13,400 1,147,375
3Com Corp. (a) .................. 15,400 690,113
---------
15,594,901
Cosmetics & Personal Care - 1.95%
Colgate-Palmolive Co. ........... 21,300 1,978,237
Estee Lauder Cos. Inc. (c) ...... 18,400 1,573,200
---------
3,551,437
Diversified Financial Services -
5.91%
American Express Co. ............ 10,800 1,104,300
Associates First Capital Corp. .. 20,000 847,500
Federal Home Loan Mortgage Corp. 62,600 4,033,788
MBNA Corp. ...................... 107,850 2,689,509
Merrill Lynch & Co. Inc. ........ 11,900 794,325
Providian Financial Corp. ....... 17,055 1,279,125
---------
10,748,547
Electric - 0.86%
PECO Energy Co. ................. 37,600 1,565,100
Environmental Control - 1.00%
Waste Management Inc. (c) ....... 39,100 1,823,037
Food - 3.35%
Kroger Co. ...................... 13,300 804,650
Quaker Oats Co................... 16,500 981,750
Safeway Inc. (a) ................ 52,200 3,180,937
Market
Shares Value
------ -----
Common Stocks (continued)
Food (continued)
Sara Lee Corp.................... 40,000 $1,127,500
---------
6,094,837
Household Products - 0.58%
Clorox Co. ...................... 9,000 1,051,313
Insurance - 3.06%
American General Corp. .......... 16,800 1,310,400
American International Group
Inc. ............................ 27,000 2,608,875
SunAmerica Inc. ................. 20,200 1,638,725
---------
5,558,000
Leisure Time - 1.30%
Carnival Corp. .................. 49,200 2,361,600
Manufacturing - 5.68%
General Electric Co. ............ 44,100 4,500,956
Tyco International Ltd. ......... 77,100 5,816,231
---------
10,317,187
Media - 6.36%
TCI Group (a) ................... 44,900 2,483,531
TCI Ventures Group (a) .......... 73,600 1,734,200
Time Warner Inc. ................ 76,200 4,729,163
Viacom Inc. "B" (a) ............. 35,400 2,619,600
---------
11,566,494
Office & Business Equipment - 0.81%
Pitney Bowes Inc. ............... 22,300 1,473,194
Oil & Gas Producers - 1.73%
Exxon Corp. ..................... 43,000 3,144,375
Pharmaceuticals - 11.59%
Bristol-Myers Squibb Co. ........ 27,700 3,706,606
Cardinal Health Inc. ............ 19,650 1,490,944
Eli Lilly & Co. ................. 34,000 3,021,750
McKesson Corp. (c) .............. 9,300 735,281
Pfizer Inc. ..................... 28,000 3,512,250
Schering-Plough Corp. ........... 79,400 4,386,850
Warner-Lambert Co. .............. 56,000 4,210,500
---------
21,064,181
Retail - 13.28%
Costco Cos. Inc. (c) ............ 44,400 3,205,125
CVS Corp. ....................... 84,200 4,631,000
Gap Inc. ........................ 16,650 936,563
Home Depot Inc. ................. 54,700 3,346,956
TJX Cos. Inc. ................... 81,200 2,354,800
Tricon Global Restaurants Inc.
(a) ............................. 21,500 1,077,688
Wal-Mart Stores Inc. ............ 69,500 5,659,906
Walgreen Co. .................... 50,000 2,928,125
---------
24,140,163
Savings & Loans - 0.13%
Charter One Financial Inc. ...... 8,700 241,425
See notes to the financial statements.
<PAGE>
JNL/PUTNAM GROWTH SERIES
SCHEDULE OF INVESTMENTS (continued)
Market
Shares Value
Common Stocks (continued)
Semiconductors - 2.56%
Intel Corp. ..................... 32,000 $3,794,000
Micron Technology Inc. (c) ...... 17,000 859,562
---------
4,653,562
Software - 7.79%
America Online Inc. (c) ......... 6,700 969,825
BMC Software Inc. (a) ........... 39,770 1,772,251
Compuware Corp. (a) ............. 20,500 1,601,562
HBO & Co. ....................... 77,300 2,217,544
IMS Health Inc. (c) ............. 18,600 1,403,137
Microsoft Corp. (a) ............. 44,700 6,199,331
---------
14,163,650
Telecommunications - 9.83%
AirTouch Communications Inc. (a) 17,600 1,269,400
General Instrument Corp. (a) .... 21,600 733,050
Lucent Technologies Inc. ........ 49,500 5,445,000
MCI WorldCom Inc. (a) ........... 62,700 4,498,725
SBC Communications Inc. ......... 54,600 2,927,925
Sprint Corp. .................... 35,600 2,994,850
---------
17,868,950
Tobacco - 0.83%
Philip Morris Cos. Inc. ......... 28,200 1,508,700
---------
Total Common Stocks
(cost $123,494,344) ......... 173,550,713
-----------
Principal Market
Amount Value
------ -----
Short Term Investments - 4.53%
Commercial Paper - 1.65%
Windmill Funding Corp.,
5.28%, 01/13/1999 ........... $3,000,000 $2,994,720
Money Market Fund - 0.00%
SSgA Money Market Fund, 4.85%
(b) ............................ 514 514
Repurchase Agreement - 2.88%
Repurchase agreement with Swiss
Bank, 4.75% (Collateralized by
$4,294,000 U.S. Treasury Bond,
7.50%, due 11/15/2016, market
value $5,373,535) acquired on
12/31/1998, due 1/04/1999 ...... 5,240,000 5,240,000
------------
Total Short Term Investments
(cost $8,235,234)........... 8,235,234
------------
Total Investments - 100%
(cost $131,729,578) ............. $181,785,947
============
- --------------------------------------------------------------------------------
(a) Non-income producing security.
(b) Dividend yields change daily to reflect current market conditions. Rate is
the quoted yield as of December 31, 1998.
(c) All or a portion of this security has been loaned.
See notes to the financial statements.
<PAGE>
JNL/PUTNAM VALUE EQUITY SERIES
PUTNAM INVESTMENT MANAGEMENT, INC.
[PUTNAM INVESTMENTS LOGO] ANTHONY I. KREISEL
OBJECTIVE:
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.
MONEY MANAGER COMMENTARY:
Throughout 1998, though large-cap stocks outperformed their small-cap
counterparts, growth equities overshadowed value. Growth equities, which
dominate the S&P 500, have been in favor over the past four years, a preference
that has made it difficult for value portfolios to outperform the Index. As a
result, the Series underperformed the S&P 500 Index for the year ended December
31, 1998.
The Series did benefit from market weighting in two of the top-performing
sectors, utilities and consumer cyclicals. Strong stock selection in the other
two (growth-oriented) top performers, technology and health care, also
contributed to results.
The average technology holding in the Series returned over 53% for the year. The
top contributors to total return for the year included Texas Instruments
(+90.1%), IBM (+76.7%), Intel Corp. (+68.8%), and Xerox (+59.9%). The Series'
health-care stocks rose 42%; stocks that contributed significantly to
performance included Pharmacia & Upjohn (+54.6%), American Home Products
(+47.2%), and Bristol-Myers Squibb (+41.4%).
Overweighting the more cyclically oriented basic industrial, transportation,
energy, and financial services hindered performance throughout the year. Money-
center banks underperformed, with Citigroup and BankAmerica declining 17.8% and
32%, respectively. Specialty chemicals and oil also lagged.
Looking ahead, while we anticipate ongoing volatility, we believe that the
Series is well positioned to capture the long-term appreciation potential of
undervalued but fundamentally sound large-cap value companies. We continue to
emphasize companies with domestic exposure and minimal Asian earnings exposure,
which is illustrated by our overweight position in utilities and financial.
We are emphasizing companies with high-quality earnings growth, including a
number of technology companies providing value-added increases in productivity
and health-care companies demonstrating earnings growth from new products. We
are also focused on companies benefiting from merger activity and on those
exposed to the U.S. consumer.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
JNL/PUTNAM VALUE EQUITY SERIES AND THE S&P 500 INDEX
[GRAPHIC]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
5/15 $10,000 $10,000
6/30 $10,340 $10,356
9/30 $11,380 $11,179
12/31/1995 $12,261 $11,851
3/31 $13,114 $12,487
6/30 $13,617 $13,046
9/30 $13,904 $13,448
12/31/1996 $15,244 $14,568
3/31 $15,580 $14,958
6/30 $17,357 $17,567
9/30 $18,619 $18,882
12/31/1997 $18,570 $19,424
3/31 $20,602 $22,134
6/30 $20,127 $22,863
9/30 $17,908 $20,593
12/31/1998 $20,888 $24,975
AVERAGE ANNUAL
TOTAL RETURN
1 year.................. 12.48%
Since inception * ...... 22.46%
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT RETURN AND
PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY
BE MORE OR LESS THAN THEIR ORIGINAL COST.
PERFORMANCE NUMBERS ARE NET OF ALL SERIES OPERATING EXPENSES, BUT DO NOT REFLECT
DEDUCTION OF INSURANCE CHARGES.
- ------------
* Inception date May 15, 1995. Prior to May 1, 1997, the JNL/Putnam Value Equity
Series was PPM America/JNL Value Equity Series and was sub-advised by PPM
America, Inc.
<PAGE>
JNL Series Trust
JNL/Putnam Value Equity Series
Statement of Assets and Liabilities
December 31, 1998
Assets
Investments in securities, at cost .......$ 181,738,357
================
Investments in securities, at value ......$ 195,623,579
Receivables:
Dividends and interest ................. 363,892
Foreign taxes recoverable .............. 6,480
Fund shares sold ....................... 99,050
Investment securities sold ............. 68,522
Collateral for securities loaned .......... 12,080,761
----------------
Total assets .............................. 208,242,284
----------------
Liabilities
Payables:
Investment advisory fees ............... 144,632
Fund shares redeemed ................... 43,904
Return of collateral for securities 12,080,761
loaned ....................................
Other liabilities ......................... 37,230
----------------
Total liabilities ......................... 12,306,527
================
Net assets ................................ $ 195,935,757
================
Net assets consist of:
Paid-in capital ........................... $ 179,704,230
Undistributed net investment income ....... -
Accumulated net realized gain on
investments and foreign currency
related items .......................... 2,346,305
Net unrealized appreciation on
investments ............................... 13,885,222
================
Net assets ................................ $ 195,935,757
================
Total shares outstanding (no par
value), unlimited shares authorized........ 10,742,197
================
Net asset value, offering and
redemption price per share................. $ 18.24
================
Statement of Operations
For the Year Ended December 31, 1998
Investment income
Dividends .............................. $ 2,955,262
Interest ............................... 301,147
Foreign tax withholding ................ (12,134)
---------------
Total investment income ................... 3,244,275
---------------
Expenses
Investment advisory fees ............... 1,403,297
Custodian fees ......................... 60,589
Portfolio accounting fees .............. 24,561
Professional fees ...................... 45,575
Other .................................. 43,497
---------------
Total operating expenses .................. 1,577,519
Less:
Reimbursement from Adviser ............. -
---------------
Net expenses .............................. 1,577,519
---------------
Net investment income ..................... 1,666,756
---------------
Realized and unrealized gains
Net realized gain on:
Investments ............................ 7,450,950
Foreign currency related items ......... 7
Net change in unrealized appreciation
on investments ......................... 8,167,931
---------------
Net realized and unrealized gains ......... 15,618,888
---------------
Net increase in net assets
from operations ........................ $ 17,285,644
===============
See notes to the financial statements.
<PAGE>
JNL Series Trust
JNL/Putnam Value Equity Series
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year ended December 31,
----------------------------------
1998 1997
---------------- ----------------
<S> <C> <C>
Operations:
Net investment income .................................................................... $ 1,666,756 $ 795,372
Net realized gain (loss) on:
Investments ........................................................................... 7,450,950 4,469,530
Foreign currency related items ......................................................... 7 (3)
Net change in unrealized appreciation on investments ..................................... 8,167,931 3,766,196
---------------- ----------------
Net increase in net assets from operations ................................................. 17,285,644 9,031,095
---------------- ----------------
Distributions to shareholders:
From net investment income ............................................................... (1,674,663) (792,740)
From net realized gains on investment transactions ....................................... (5,357,383) (4,348,955)
---------------- ----------------
Total distributions to shareholders ........................................................ (7,032,046) (5,141,695)
---------------- ----------------
Share transactions:
Proceeds from the sale of shares ......................................................... 99,834,026 87,596,492
Reinvestment of distributions ............................................................ 7,032,046 5,112,708
Cost of shares redeemed .................................................................. (29,748,935) (5,794,256)
---------------- ----------------
Net increase in net assets from share transactions ......................................... 77,117,137 86,914,944
---------------- ----------------
Net increase in net assets ................................................................. 87,370,735 90,804,344
Net assets beginning of period ............................................................. 108,565,022 17,760,678
---------------- ----------------
Net assets end of period ................................................................... $ 195,935,757 $ 108,565,022
================ ================
Undistributed net investment income ........................................................ $ - $ 7,901
================ ================
</TABLE>
See notes to the financial statements.
<PAGE>
JNL Series Trust
JNL/Putnam Value Equity Series
Financial Highlights
<TABLE>
<CAPTION>
Period from Period from
April 1, May 15,
Year ended December 31, 1996 to 1995* to
------------------------------- December 31, March 31,
1998 1997 1996 1996
--------------- --------------- --------------- ------------
<S> <C> <C> <C> <C>
Selected Per Share Data
Net asset value, beginning of period ................................. $ 16.82 $ 14.50 $ 12.77 $ 10.00
--------------- --------------- --------------- ------------
Income from operations:
Net investment income .............................................. 0.16 0.13 0.10 0.23
Net realized and unrealized gains on investments and
foreign currency related items ................................... 1.94 3.03 1.97 2.86
--------------- --------------- --------------- ------------
Total income from operations ......................................... 2.10 3.16 2.07 3.09
--------------- --------------- --------------- ------------
Less distributions:
From net investment income ......................................... (0.16) (0.13) (0.15) (0.17)
From net realized gains on investment transactions ................. (0.52) (0.71) (0.19) (0.15)
--------------- --------------- --------------- ------------
Total distributions .................................................. (0.68) (0.84) (0.34) (0.32)
--------------- --------------- --------------- ------------
Net increase ......................................................... 1.42 2.32 1.73 2.77
--------------- --------------- --------------- ------------
Net asset value, end of period ....................................... $ 18.24 $ 16.82 $ 14.50 $ 12.77
=============== =============== =============== ============
Total Return (a) ..................................................... 12.48% 21.82% 16.25% 31.14%
Ratios and Supplemental Data:
Net assets, end of period (in thousands) ........................... $ 195,936 $ 108,565 $ 17,761 $ 3,365
Ratio of net operating expenses to average net assets (b) (c) ...... 1.01% 1.03% 0.85% 0.87%
Ratio of net investment income to average net assets (b) (c) ....... 1.06% 1.43% 2.29% 2.33%
Portfolio turnover ................................................. 77.80% 112.54% 13.71% 30.12%
Ratio information assuming no expense reimbursement or
fees paid indirectly:
Ratio of net operating expenses to average net assets (b) .......... 1.01% 1.09% 1.53% 2.28%
Ratio of net investment income to average net assets (b) ........... 1.06% 1.37% 1.61% 0.91%
- ------------------------------------------------------------------------------------------------------------------------------------
</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 Adviser's expense reimbursement and
fees paid indirectly.
See notes to the financial statements.
<PAGE>
JNL/PUTNAM VALUE EQUITY SERIES
SCHEDULE OF INVESTMENTS
December 31, 1998
Market
Shares Value
------ -----
Common Stocks -96.84%
Aerospace & Defense - 0.77%
Raytheon Co. "A" (c) ............ 22,115 $1,143,069
Raytheon Co. "B" ................ 6,900 367,425
---------
1,510,494
Airlines - 0.78%
Southwest Airlines (c) .......... 68,042 1,526,692
Auto Manufacturers - 2.28%
Ford Motor Co. .................. 39,060 2,292,334
General Motors Corp. ............ 30,280 2,166,913
---------
4,459,247
Auto Parts & Equipment - 0.76%
Dana Corp. ...................... 10,665 435,932
Goodyear Tire & Rubber Co. ...... 20,700 1,044,056
---------
1,479,988
Banks - 11.67%
BankAmerica Corp. ............... 65,206 3,920,511
BankBoston Corp. ................ 48,335 1,882,044
Bank One Corp. .................. 52,193 2,665,105
Chase Manhattan Corp. ........... 31,840 2,167,110
First Union Corp. ............... 21,205 1,289,529
Fleet Financial Group Inc. ...... 33,630 1,502,841
J.P. Morgan & Co. Inc. .......... 21,205 2,227,850
Mercantile Bancorporation Inc. .. 24,945 1,150,588
National City Corp. ............. 21,250 1,540,625
PNC Bank Corp. .................. 29,526 1,598,095
Summit Bancorp .................. 13,975 610,533
Wells Fargo Co. ................. 56,900 2,272,444
---------
22,827,275
Beverages - 1.96%
Anheuser-Busch Cos. Inc. ........ 31,260 2,051,437
Whitman Corp. ................... 70,440 1,787,415
---------
3,838,852
Chemicals - 1.98%
E.I. du Pont de Nemours & Co. ... 43,200 2,292,300
Eastman Chemical Co. ............ 22,350 1,000,163
Witco Corp. ..................... 36,970 589,209
---------
3,881,672
Computers - 3.63%
Compaq Computer Corp. ........... 63,170 2,649,192
International Business Machines
Corp. ........................... 20,595 3,804,926
NCR Corp. (a) ................... 1,600 66,800
Sun Microsystems Inc. (a) ....... 6,655 569,834
---------
7,090,752
Cosmetics & Personal Care - 1.03%
Colgate-Palmolive Co. ........... 13,280 1,233,380
Kimberly-Clark Corp. ............ 14,315 780,168
---------
2,013,548
Market
Shares Value
------ -----
Common Stocks (continued)
Diversified Financial Services -
5.63%
American Express Co. ............ 11,700 $1,196,325
Citigroup Inc. .................. 79,075 3,914,212
Federal National Mortgage
Association ..................... 31,350 2,319,900
Lehman Brothers Holdings Inc. ... 44,580 1,964,306
Merrill Lynch & Co. Inc. ........ 24,105 1,609,009
---------
11,003,752
Electric - 4.86%
Consolidated Edison Inc. ........ 34,190 1,807,796
Dominion Resources Inc. ......... 32,170 1,503,947
Duke Energy Corp. ............... 25,060 1,605,406
Edison International ............ 48,600 1,354,725
Entergy Corp. ................... 54,615 1,699,892
Texas Utilities Co. ............. 33,045 1,542,788
---------
9,514,554
Electrical Equipment - 0.78%
Emerson Electric Co. ............ 25,210 1,525,205
Environmental Control - 0.62%
Waste Management Inc. ........... 26,090 1,216,446
Food - 3.11%
General Mills Inc. (c) .......... 18,265 1,420,104
H.J. Heinz Co. .................. 25,845 1,463,473
Nabisco Holdings Corp. .......... 12,600 522,900
Quaker Oats Co. ................. 23,170 1,378,615
Sara Lee Corp. .................. 45,720 1,288,733
---------
6,073,825
Forest Products & Paper - 0.78%
Boise Cascade Corp. ............. 49,285 1,527,835
Health Care - 2.18%
Baxter International Inc. ....... 38,460 2,473,459
Johnson & Johnson Co. ........... 21,315 1,787,796
---------
4,261,255
Household Products - 0.90%
Clorox Co. (c) .................. 15,140 1,768,541
Insurance - 5.06%
Aetna Inc. ...................... 14,260 1,121,192
Allstate Corp. (c) .............. 38,580 1,490,152
American General Corp. .......... 33,775 2,634,450
Aon Corp. ....................... 23,360 1,293,560
CIGNA Corp. ..................... 32,015 2,475,160
Equitable Cos. Inc. ............. 15,300 885,488
---------
9,900,002
Leisure Time - 0.87%
Hasbro Inc. (c) ................. 47,165 1,703,836
Machinery - 1.01%
Deere & Co. (c) ................. 41,395 1,371,209
Rockwell International Corp. .... 12,530 608,488
---------
1,979,697
See notes to the financial statements.
<PAGE>
JNL/PUTNAM VALUE EQUITY SERIES
SCHEDULE OF INVESTMENTS (continued)
Market
Shares Value
------ -----
Common Stocks (continued)
Manufacturing - 3.34%
Eastman Kodak Co. ............... 22,695 $1,634,040
General Electric Co. ............ 30,855 3,149,138
Minnesota Mining & Manufacturing
Co............................... 24,460 1,739,718
---------
6,522,896
Media - 2.34%
McGraw-Hill Cos. Inc. .......... 10,825 1,102,797
MediaOne Group Inc. (a) ......... 39,680 1,864,960
Times Mirror Co. (c) ............ 28,880 1,617,280
---------
4,585,037
Office & Business Equipment - 2.42%
Pitney Bowes Inc. ............... 9,545 630,567
Xerox Corp. ..................... 34,830 4,109,940
---------
4,740,507
Oil & Gas Producers - 9.72%
Atlantic Richfield Co. .......... 37,595 2,453,074
BP Amoco Plc ADR (c) ............ 19,457 1,743,834
Chevron Corp. ................... 29,165 2,418,872
Conoco Inc. (a) (c) ............. 41,300 862,137
Enron Corp. ..................... 9,085 518,413
Exxon Corp. ..................... 40,360 2,951,325
Halliburton Co. ................. 35,945 1,064,871
Kerr-McGee Corp. (c) ............ 34,340 1,313,505
Mobil Corp. ..................... 23,100 2,012,588
Sonat Inc. ...................... 48,100 1,301,706
Texaco Inc. ..................... 25,880 1,368,405
Tosco Corp. ..................... 38,740 1,002,398
---------
19,011,128
Packaging & Containers - 0.96%
Owens-Illinois Inc. (a) ......... 61,265 1,876,241
Pharmaceuticals - 7.57%
American Home Products Corp. .... 56,145 3,161,665
Bristol-Myers Squibb Co. ........ 24,100 3,224,881
Merck & Co. Inc. ................ 26,600 3,928,488
Pharmacia & Upjohn Inc. ......... 79,220 4,485,833
---------
14,800,867
Retail - 3.79%
Federated Department Stores Inc.
(a) (c) ......................... 23,600 1,028,075
J.C. Penney Co. ................. 24,535 1,150,078
Kmart Corp. (a) (c) ............. 92,445 1,415,564
McDonald's Corp. ................ 19,095 1,463,154
Sears, Roebuck & Co. ............ 34,860 1,481,550
Toys "R" Us Inc. (a) (c) ........ 51,570 870,244
---------
7,408,665
Savings & Loans - 0.75%
Washington Mutual Inc. .......... 37,785 1,471,253
Market
Shares Value
------ -----
Common Stocks (continued)
Semiconductors - 4.20%
Intel Corp. ..................... 22,685 $2,689,590
Motorola Inc. ................... 36,840 2,249,543
Texas Instruments Inc. .......... 38,255 3,273,193
-----------
8,212,326
Telecommunications - 8.51%
ALLTEL Corp. .................... 24,435 1,461,518
Ameritech Corp. ................. 17,505 1,109,379
AT&T Corp. ...................... 49,425 3,719,231
GTE Corp. ....................... 39,925 2,595,125
SBC Communications Inc. ......... 56,100 3,008,363
Sprint Corp. .................... 22,505 1,893,233
US West Inc. .................... 44,357 2,866,571
-----------
16,653,420
Tobacco - 1.86%
Philip Morris Cos. Inc. ......... 68,100 3,643,350
Transportation - 0.72%
Burlington Northern Santa Fe
Corp. ........................... 41,744 1,408,860
-----------
Total Common Stocks
(cost $175,552,796) ......... 189,438,018
-----------
Principal
Amount
------
Short Term Investments - 3.16%
Commercial Paper - 1.53%
Windmill Funding Corp.,
5.28%, 1/13/1999 .............$3,000,000 2,994,720
Money Market Fund - 0.00%
SSgA Money Market Fund, 4.85%
(b) ............................. 841 841
Repurchase Agreement - 1.63%
Repurchase agreement with Swiss
Bank, 4.75% (Collateralized by
$2,225,000 U.S. Treasury Bond,
12.75%, due 11/15/2010, market
value $3,269,252) acquired on
12/31/1998, due 1/04/1999 ....... 3,190,000 3,190,000
-----------
Short Term Investments
(cost $6,185,561) ........... 6,185,561
-----------
Total Investments -- 100%
(cost $181,738,357) ............. $195,623,579
===========
- --------------------------------------------------------------------------------
(a) Non-income producing security.
(b) Dividend yields change daily to reflect current market conditions. Rate is
the quoted yield as of December 31, 1998.
(c) All or a portion of this security has been loaned.
See notes to the financial statements.
<PAGE>
JNL/S&P CONSERVATIVE GROWTH SERIES I
STANDARD & POOR'S INVESTMENT ADVISORY
SERVICES, INC.
[STANDARD & POOR'S LOGO] DAVID M. BLITZER, JOSHUA M. HARARI
OBJECTIVE:
JNL/S&P Conservative Growth Series I seeks as its investment objective capital
growth and current income. This Series pursues its investment objective by
investing in a diversified group of Series of the JNL Series Trust. This
investment concept is referred to as a "fund of funds." Under normal
circumstances, this Series allocates between 55% and 65% of its assets to Series
that invest primarily in equity securities, 30% to 40% to Series that invest
primarily in fixed income securities, and 0% to 10% to Series that invest
primarily in money market funds.
MONEY MANAGER COMMENTARY:
The Series commenced operations on April 9, 1998 and returned 4.70% from
inception to year-end 1998, compared with 2.77% for its benchmark, the S&P
Micropal Asset Allocation USA Income Funds Sector Index.
The Series' initial investment mix included allocations of 15% each to the T.
Rowe Price/JNL Mid-Cap Growth Series and the JNL/Eagle Core Equity Series, 10%
each to the JNL/Putnam Growth Series and JNL/Putnam Value Equity Series and 5%
each to the JNL Global Equities Series and the T. Rowe Price/ JNL Established
Growth Series. The fixed income portion was allocated as follows: 20% to the
Salomon Brothers/JNL Global Bond Series, 15% to the PPM America/JNL High Yield
Bond Series, and 5% to the PPM America/JNL Money Market Series. This allocation
reflected the long-term focus of this investment program, but also took into
account the near-term concern about excessive valuations of domestic equities by
allocating a total of 25% to global equity and debt securities. The domestic
equity allocation reflected a focus on value by allocating to Series that invest
in sectors that had lagged early in 1998, such as mid-cap and value stocks.
During the third quarter, our concern shifted from overvaluation of growth
stocks to worry that the U.S. economy would slow down. We adjusted the
allocation to reduce exposure to value-oriented Series that often have high
exposures to cyclical, economically sensitive stocks and increased the
allocation to Series that focus on growth stocks that are less sensitive to
economic fluctuations. The new allocation included 15% each to the JNL/Eagle
Core Equity Series and JNL/Putnam Value Equity Series, 10% each to the JNL/Alger
Growth Series and the JNL Global Equities Series, and 5% each to the JNL
Aggressive Growth Series and the T. Rowe Price/JNL Mid-Cap Growth Series. The
fixed income portion of the portfolio was allocated as follows: 15% to the
Salomon Brothers/JNL Global Bond Series, 10% each to the PPM America/JNL High
Yield Bond Series and the Salomon Brothers/JNL U.S. Government & Quality Bond
Series, and 5% to the PPM America/ JNL Money Market Series.
The new allocation positioned the portfolio to participate in the strong market
rally that began in October as the Federal Reserve aggressively implemented
three consecutive interest rate cuts. The rate cuts allayed investor fears of
recession. Yet, the rally in the equity markets has benefited growth stocks to a
greater degree than value plays. Thus, our reliance on equity Series that focus
on growth stocks has proven sound. We remain confident that over the long term,
a portfolio consistently weighted towards equities will provide superior returns
and help investors meet their financial objectives. We are alert to the elements
of speculative excess that crop up from time to time and are prepared to adjust
the investment mix to protect the portfolio when deemed necessary.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
JNL/S&P CONSERVATIVE GROWTH SERIES I AND THE
S&P MICROPAL ASSET ALLOCATION USA INCOME FUNDS SECTOR INDEX
[GRAPHIC]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
4/09/1998 $10,000 $10,000
4/30 $9,970 $10,049
5/31 $9,850 $9,998
6/30 $10,050 $10,095
7/31 $9,950 $10,017
8/31 $8,920 $9,396
9/30 $9,250 $9,629
10/31 $9,570 $9,800
11/30 $9,980 $10,072
12/31/1998 $10,470 $10,277
TOTAL RETURN
FOR THE PERIOD
FROM APRIL 9, 1998* TO
DECEMBER 31, 1998 ... 4.70%
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT RETURN AND
PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY
BE MORE OR LESS THAN THEIR ORIGINAL COST.
PERFORMANCE NUMBERS ARE NET OF ALL SERIES OPERATING EXPENSES, BUT DO NOT REFLECT
THE DEDUCTION OF INSURANCE CHARGES.
- ------------
* Commencement of operations.
<PAGE>
JNL Series Trust
JNL/S&P Conservative Growth Series I
<PAGE>
Statement of Assets and Liabilities
December 31, 1998
Assets
Investments in securities, at cost ........ $ 9,725,534
================
Investments in securities, at value ....... $ 10,027,519
Receivable:
Fund shares sold ....................... 13,878
Total assets .............................. 10,041,397
Liabilities
Payables:
Investment securities purchased ........ 13,494
Investment advisory fees ............... 1,514
Fund shares redeemed ................... 384
Total liabilities ......................... 15,392
Net assets ................................ $ 10,026,005
================
Net assets consist of:
Paid-in capital ........................... $ 9,373,693
Undistributed net investment income ....... 366,802
Accumulated net realized loss
on investments ......................... (16,475)
Net unrealized appreciation on
investments ............................. 301,985
Net assets ................................ $ 10,026,005
================
Total shares outstanding (no par
value), unlimited shares authorized........ 957,851
================
Net asset value, offering and
redemption price per share................. $ 10.47
================
Undistributed net investment income ....... $ 366,802
================
Statement of Operations
For the Period Ended December 31, 1998*
Investment income
Dividends .............................. $ 365,669
Interest................................ 6,319
---------------
Total investment income ................... 371,988
---------------
Expenses
Investment advisory fees ............... 5,186
---------------
Total operating expenses .................. 5,186
---------------
Net investment income ..................... 366,802
---------------
Realized and unrealized gain (loss)
Net realized loss on investments .......... (16,475)
Net change in unrealized appreciation
on investments ......................... 301,985
---------------
Net realized and unrealized gain .......... 285,510
---------------
Net increase in net assets from
operations ................................$ 652,312
===============
- ----------------------------------------------------------
* For period beginning April 9, 1998 (commencement of
operations).
See notes to the financial statements.
<PAGE>
JNL Series Trust
JNL/S&P Conservative Growth Series I
Statement of Changes in Net Assets
Period from
April 9,
1998* to
December 31,
1998
------------
Operations:
Net investment income ..................... $366,802
Net realized loss on investments .......... (16,475)
Net change in unrealized appreciation
on investments ......................... 301,985
----------
Net increase in net assets from
operations................................. 652,312
----------
Distributions to shareholders:
From net investment income ................ -
From net realized gain on
investment transactions ................ -
----------
Total distributions to shareholders ....... -
----------
Share transactions:
Proceeds from the sale of shares .......... 10,018,487
Reinvestment of distributions ............. -
Cost of shares redeemed ................... (644,794)
----------
Net increase in net assets from share
transactions ............................. 9,373,693
----------
Net increase in net assets .................. 10,026,005
Net assets beginning of period .............. -
----------
Net assets end of period .................... $10,026,005
==========
Undistributed net investment income ......... $ 366,802
==========
Financial Highlights
Period from
April 9,
1998* to
December 31,
1998
----------------
Selected Per Share Data
Net asset value, beginning of period ..... $ 10.00
----------
Income from operations:
Net investment income (c) .............. 0.38
Net realized and unrealized gain
on investments (c) .................. 0.09
----------
Total income from operations ........... 0.47
----------
Less distributions:
From net investment income ............. --
From net realized gain on
investment transactions ............. --
----------
Total distributions .................... --
----------
Net increase ........................... 0.47
----------
Net asset value, end of period ........... $ 10.47
==========
Total Return (a) ......................... 4.70%
Ratios and Supplemental Data:
Net assets, end of period (in thousands) 10,026
Ratio of net operating expenses to
averagenet assets (b) ................... 0.20%
Ratio of net investment income to
average net assets (b) .................. 14.15%
Portfolio turnover ...................... 36.08%
- --------------------------------------------------------------------------------
* 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 period ended December 31, 1998.
(b) Annualized for the period ended December 31, 1998.
(c) The amount shown may not accord with the change in the aggregate gains and
losses of portfolio securities due to timing of sales, redemptions of
Series shares and receipt of dividends.
See notes to the financial statements.
<PAGE>
JNL/S&P MODERATE GROWTH SERIES I
STANDARD & POOR'S INVESTMENT ADVISORY
SERVICES, INC.
[STANDARD & POOR'S LOGO] DAVID M. BLITZER, JOSHUA M. HARARI
OBJECTIVE:
JNL/S&P Moderate Growth Series I seeks as its investment objective capital
growth and current income. This Series pursues its investment objective by
investing in a diversified group of Series of the JNL Series Trust. This
investment concept is referred to as a "fund of funds." Under normal
circumstances, this Series allocates between 70% and 80% of its assets to Series
that invest primarily in equity securities and 20% to 30% to Series that invest
primarily in fixed income securities.
MONEY MANAGER COMMENTARY:
The Series commenced operations on April 8, 1998 and returned 6.30% from
inception to year-end 1998, compared with 5.45% for its benchmark, the S&P
Micropal Asset Allocation USA Balanced Funds Sector Index.
The Series' initial investment mix included allocations of 20% to the T. Rowe
Price/JNL Mid-Cap Growth Series, 15% each to the JNL/Eagle Core Equity Series
and the JNL/Putnam Growth Series, 10% each to the JNL/Putnam Value Equity Series
and the JNL Global Equities Series, and 5% to the T. Rowe Price/JNL Established
Growth Series. The fixed income portion was allocated 20% to the Salomon
Brothers/ JNL Global Bond Series and 5% to the PPM America/JNL High Yield Bond
Series. This allocation reflected the long-term focus of this investment
program, but also took into account the near-term concern about excessive
valuations of domestic equities by allocating a total of 30% to global equity
and debt securities. The domestic equity allocation reflected a focus on value
by allocating to series that invest in sectors that had lagged early in 1998
such as mid-cap and value stocks.
During the third quarter, our concern shifted from overvaluation of growth
stocks to worry that the U.S. economy would slow down. We adjusted the
allocation to reduce exposure to value-oriented Series that often have higher
exposures to cyclical, economically sensitive stocks and increased the
allocation to Series that focus on growth stocks that are less sensitive to
economic fluctuations. The new allocation included 15% each to the JNL/Eagle
Core Equity Series, JNL/Putnam Value Equity Series and the JNL Global Equities
Series, and 10% each to the JNL/Alger Growth Series, the JNL Aggressive Growth
Series and the T. Rowe Price/JNL Mid-Cap Growth Series. The fixed income portion
of the portfolio was allocated as follows: 10% to the Salomon Brothers/JNL
Global Bond Series, 10% to the PPM America/JNL High Yield Bond Series and 5% to
the Salomon Brothers/JNL U.S. Government & Quality Bond Series.
The new allocation positioned the portfolio to participate in the strong market
rally that began in October as the Federal Reserve aggressively implemented
three consecutive interest rate cuts. The rate cuts allayed investor fears of
recession. Yet, the rally in the equity markets has benefited growth stocks to a
greater degree than value plays. Thus, our reliance on equity Series that focus
on growth stocks has proven sound. We remain confident that over the long term,
a portfolio consistently weighted towards equities will provide superior returns
and help investors meet their financial objectives. We are alert to the elements
of speculative excess that crop up from time to time and are prepared to adjust
the investment mix to protect the portfolio when deemed necessary.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
JNL/S&P MODERATE GROWTH SERIES I AND THE
S&P MICROPAL ASSET ALLOCATION USA BALANCED FUNDS SECTOR INDEX
[GRAPHIC]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
4/8/1998 $10,000 $10,000
4/30 $10,010 $10,070
5/31 $9,860 $9,969
6/30 $10,140 $10,121
7/31 $10,000 $9,976
8/31 $8,720 $9,111
9/30 $9,090 $9,473
10/31 $9,480 $9,850
11/30 $9,970 $10,200
12/31/1998 $10,630 $10,545
TOTAL RETURN
FOR THE PERIOD
FROM APRIL 8, 1998* TO
DECEMBER 31, 1998 ... 6.30%
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT RETURN AND
PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY
BE MORE OR LESS THAN THEIR ORIGINAL COST.
PERFORMANCE NUMBERS ARE NET OF ALL SERIES OPERATING EXPENSES, BUT DO NOT REFLECT
THE DEDUCTION OF INSURANCE CHARGES.
- ------------
* Commencement of operations.
<PAGE>
JNL Series Trust
JNL/S&P Moderate Growth Series I
Statement of Assets and Liabilities
December 31, 1998
Assets
Investments in securities, at cost ........ $ 11,824,958
================
Investments in securities, at value ....... $ 12,613,637
Receivable:
Fund shares sold ....................... 18,882
Total assets .............................. 12,632,519
Liabilities
Payables:
Investment securities purchased ........ 18,399
Investment advisory fees ............... 1,901
Fund shares redeemed ................... 483
Total liabilities ......................... 20,783
Net assets ................................ $ 12,611,736
================
Net assets consist of:
Paid-in capital ........................... 11,531,641
Undistributed net investment income ....... 428,464
Accumulated net realized loss
on investments ......................... (137,048)
Net unrealized appreciation on
investments ............................... 788,679
Net assets ................................ $ 12,611,736
================
Total shares outstanding (no par
value), unlimited shares authorized ....... 1,186,353
================
Net asset value, offering and
redemption price per share................. $ 10.63
================
Statement of Operations
For the Period Ended December 31, 1998*
Investment income
Dividends .............................. $ 434,699
Interest................................ -
---------------
Total investment income ................... 434,699
---------------
Expenses
Investment advisory fees ............... 6,235
---------------
Total operating expenses .................. 6,235
---------------
Net investment income ..................... 428,464
---------------
Realized and unrealized gain (loss)
Net realized loss on investments .......... (137,048)
Net change in unrealized appreciation
on investments ......................... 788,679
---------------
Net realized and unrealized gain .......... 651,631
---------------
Net increase in net assets from
operations................................. $ 1,080,095
===============
- ----------------------------------------------------------
* For period beginning April 8, 1998 (commencement of
operations).
See notes to the financial statements.
<PAGE>
JNL Series Trust
JNL/S&P Moderate Growth Series I
Statement of Changes in Net Assets
Period from
April 8,
1998* to
December 31,
1998
Operations:
Net investment income ..................... $428,464
Net realized loss on investments .......... 137,048)
Net change in unrealized appreciation
on investments ......................... 788,679
-----------
Net increase in net assets from
operations................................. 1,080,095
-----------
Distributions to shareholders:
From net investment income ................ -
From net realized gain
on investment transactions ............. -
-----------
Total distributions to shareholders ....... -
-----------
Share transactions:
Proceeds from the sale of shares .......... 13,290,877
Reinvestment of distributions ............. -
Cost of shares redeemed ................... (1,759,236)
-----------
Net increase in net assets from
share transactions ....................... 11,531,641
-----------
Net increase in net assets .................. 12,611,736
Net assets beginning of period .............. -
-----------
Net assets end of period .................... $12,611,736
===========
Undistributed net investment income ......... $428,464
-----------
Financial Highlights
Period from
April 8,
1998* to
December 31,
1998
----------------
Selected Per Share Data
Net asset value, beginning of period ........ $ 10.00
----------------
Income from operations:
Net investment income (c) ................. 0.36
Net realized and unrealized gain
on investments (c) ..................... 0.27
----------------
Total income from operations .............. 0.63
----------------
Less distributions:
From net investment income ................ -
From net realized gain
on investment transactions ............. -
----------------
Total distributions........................ -
----------------
Net increase .............................. 0.63
----------------
Net asset value, end of period .............. $ 10.63
================
Total Return (a) ............................ 6.30%
Ratios and Supplemental Data:
Net assets, end of period (in thousands)... $ 12,612
Ratio of net operating expenses to
average net assets (b) .................... 0.20%
Ratio of net investment income to
average net assets (b) .................... 13.74%
Portfolio turnover ........................ 57.96%
- --------------------------------------------------------------------------------
* 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 period ended December 31, 1998.
(b) Annualized for the period ended December 31, 1998.
(c) The amount shown may not accord with the change in the aggregate gains and
losses of portfolio securities due to timing of sales, redemptions of
Series shares and receipt of dividends.
See notes to the financial statements.
<PAGE>
JNL/S&P AGGRESSIVE GROWTH SERIES I
STANDARD & POOR'S INVESTMENT ADVISORY
SERVICES, INC.
[STANDARD & POOR'S LOGO] DAVID M. BLITZER, JOSHUA M. HARARI
OBJECTIVE:
JNL/S&P Aggressive Growth Series I seeks as its investment objective capital
growth. This Series pursues its investment objective by investing in a
diversified group of Series of the JNL Series Trust. This investment concept is
referred to as a "fund of funds." Under normal circumstances, this Series
allocates between 85% and 95% of its assets to Series that invest primarily in
equity securities and 5% to 15% to Series that invest primarily in fixed income
securities.
MONEY MANAGER COMMENTARY:
The Series commenced operations on April 8, 1998 and returned 8.80% from
inception to year-end 1998, compared with 5.45% for its benchmark, the S&P
Micropal Asset Allocation USA Balanced Funds Sector Index.
The Series' initial investment mix included allocations of 25% to the T. Rowe
Price/JNL Mid-Cap Growth Series, 20% to the JNL/Putnam Growth Series, 15% to the
JNL/Putnam Value Equity Series, 10% each to the JNL/Eagle Core Equity Series and
the JNL Global Equities Series, and 5% each to the JNL/ Alger Growth Series and
the JNL Aggressive Growth Series. The 10% allocated to fixed income investments
was invested in the Salomon Brothers/JNL Global Bond Series. This allocation
reflected the long-term focus of this investment program on equity Series that
emphasize growth. But, it also took into account the near-term concern about
excessive valuations of domestic equities by allocating a total of 20% to global
equity and debt securities and 40% to Series that invest in sectors that had
lagged early in 1998, such as mid-cap and value stocks.
During the third quarter, our concern shifted from overvaluation of growth
stocks to worry that the U.S. economy would slow down. We adjusted the
allocation to reduce exposure to value-oriented Series that often have higher
exposures to cyclical, economically sensitive stocks and increased the
allocation to Series that focus on growth stocks that are less sensitive to
economic fluctuations. The new allocation included 20% each to the JNL/Eagle
Core Equity Series and the JNL Global Equities Series, 15% each to the JNL/Alger
Growth Series, the JNL Aggressive Growth Series and the T. Rowe Price/JNL
Mid-Cap Growth Series, and 5% to the JNL/Eagle SmallCap Equity Series. The 10%
allocated to fixed income Series went into the Salomon Brothers/JNL Global Bond
Series.
The new allocation positioned the portfolio to participate in the strong market
rally that began in October as the Federal Reserve aggressively implemented
three consecutive interest rate cuts. The rate cuts allayed investor fears of
recession. Yet, the rally in the equity markets has benefited growth stocks to a
greater degree than value plays. Thus, our reliance on equity Series that focus
on growth stocks has proven sound. We remain confident that over the long term,
a portfolio consistently weighted towards equities will provide superior returns
and help investors meet their financial objectives. We are alert to the elements
of speculative excess that crop up from time to time and are prepared to adjust
the investment mix to protect the portfolio when deemed necessary.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
JNL/S&P AGGRESSIVE GROWTH SERIES I AND THE
S&P MICROPAL ASSET ALLOCATION USA BALANCED FUNDS SECTOR INDEX
[GRAPHIC]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
4/8/1998 $10,000 $10,000
4/30 $10,020 $10,070
5/31 $9,830 $9,969
6/30 $10,230 $10,121
7/31 $10,080 $9,976
8/31 $8,520 $9,111
9/30 $8,960 $9,473
10/31 $9,420 $9,850
11/30 $9,960 $10,200
12/31/1998 $10,880 $10,545
TOTAL RETURN
FOR THE PERIOD
FROM APRIL 8, 1998* TO
DECEMBER 31, 1998 ... 8.80%
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT RETURN AND
PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY
BE MORE OR LESS THAN THEIR ORIGINAL COST.
PERFORMANCE NUMBERS ARE NET OF ALL SERIES OPERATING EXPENSES, BUT DO NOT REFLECT
THE DEDUCTION OF INSURANCE CHARGES.
- ------------
* Commencement of operations.
<PAGE>
JNL Series Trust
JNL/S&P Aggressive Growth Series I
Statement of Assets and Liabilities
December 31, 1998
Assets
Investments in securities, at cost ........ $ 4,022,415
================
Investments in securities, at value ....... $ 4,425,708
Receivable:
Fund shares sold ....................... 2,650
Total assets .............................. 4,428,358
Liabilities
Payables:
Investment securities purchased ........ 2,480
Investment advisory fees ............... 687
Fund shares redeemed ................... 170
Total liabilities ......................... 3,337
Net assets ................................ $ 4,425,021
================
Net assets consist of:
Paid-in capital ........................... 4,033,239
Undistributed net investment income ....... 108,846
Accumulated net realized loss
on investments ......................... (120,357)
Net unrealized appreciation on
investments ............................... 403,293
Net assets ................................ $ 4,425,021
================
Total shares outstanding (no par
value), unlimited shares authorized........ 406,701
================
Net asset value, offering and
redemption price per share................. $ 10.88
================
Statement of Operations
For the Period Ended December 31, 1998*
Investment income
Dividends .............................. $ 111,813
Interest................................ -
---------------
Total investment income ................... 111,813
---------------
Expenses
Investment advisory fees ............... 2,967
---------------
Total operating expenses .................. 2,967
---------------
Net investment income ..................... 108,846
---------------
Realized and unrealized gain (loss)
Net realized loss on investments .......... (120,357)
Net change in unrealized appreciation
on investments ......................... 403,293
---------------
Net realized and unrealized gain .......... 282,936
---------------
Net increase in net assets from
operations................................. $ 391,782
===============
- ----------------------------------------------------------
* For period beginning April 8, 1998 (commencement of operations).
See notes to the financial statements.
<PAGE>
JNL Series Trust
JNL/S&P Aggressive Growth Series I
Statement of Changes in Net Assets
Period from
April 8,
1998* to
December 31,
1998
------------
Operations:
Net investment income ..................... $108,846
Net realized loss on investments .......... 120,357)
Net change in unrealized appreciation on
investments ............................ 403,293
---------
Net increase in net assets from
operations ................................ 391,782
---------
Distributions to shareholders:
From net investment income ................ -
From net realized gain
on investment transactions ............. -
---------
Total distributions to shareholders ....... -
---------
Share transactions:
Proceeds from the sale of shares .......... 6,129,056
Reinvestment of distributions ............. -
Cost of shares redeemed ................... (2,095,817)
---------
Net increase in net assets from
share transactions ....................... 4,033,239
---------
Net increase in net assets .................. 4,425,021
Net assets beginning of period .............. -
---------
Net assets end of period .................... $ 4,425,021
=========
Undistributed net investment income ......... $ 108,846
=========
Financial Highlights
Period from
April 8,
1998* to
December 31,
1998
----------------
Selected Per Share Data
Net asset value, beginning of period ........ $10.00
---------
Income from operations:
Net investment income (c) ................ 0.27
Net realized and unrealized gain
on investments (c) ..................... 0.61
---------
Total income from operations ............. 0.88
---------
Less distributions:
From net investment income ................ -
From net realized gain
on investment transactions ............. -
---------
Total distributions ....................... -
---------
Net increase .............................. 0.88
---------
Net asset value, end of period .............. $ 10.88
=========
Total Return (a) ............................ 8.80%
Ratios and Supplemental Data:
Net assets, end of period (in thousands) .. $ 4,425
Ratio of net operating expenses to
average net assets (b) .................... 0.20%
Ratio of net investment income to
average net assets (b) .................... 7.34%
Portfolio turnover ........................ 126.18%
- --------------------------------------------------------------------------------
* 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 period ended December 31, 1998.
(b) Annualized for the period ended December 31, 1998.
(c) The amount shown may not accord with the change in the aggregate gains and
losses of portfolio securities due to timing of sales, redemptions of
Series shares and receipt of dividends.
See notes to the financial statements.
<PAGE>
JNL/S&P VERY AGGRESSIVE GROWTH SERIES I
STANDARD & POOR'S INVESTMENT ADVISORY
SERVICES, INC.
[STANDARD & POOR'S LOGO] DAVID M. BLITZER, JOSHUA M. HARARI
OBJECTIVE:
JNL/S&P Very Aggressive Growth Series I seeks as its investment objective
capital growth. Under normal circumstances, this Series pursues its investment
objective by investing 100% of its assets in a diversified group of Series of
the JNL Series Trust that invest primarily in equity securities. This investment
concept is referred to as a "fund of funds."
MONEY MANAGER COMMENTARY:
The Series commenced operations on April 1, 1998 and returned 11.90% from
inception to year-end 1998, compared with 5.40% for its benchmark, the S&P
Micropal Asset Allocation USA Balanced Funds Sector Index.
The Series' initial investment mix included allocations of 25% each to the
JNL/Putnam Growth Series and the JNL/ Eagle Core Equity Series, 20% to the JNL
Aggressive Growth Series, 15% to the T. Rowe Price/JNL Mid-Cap Growth Series,
and 5% each to the JNL/Alger Growth Series, T. Rowe Price/JNL International
Equity Investment Series and the JNL Global Equities Series. This allocation
reflected the long-term focus of this investment program on equity Series that
emphasize growth. Allocations to Series that invest in global equity securities
and Series that invest in sectors that had lagged early in 1998 such as mid-cap,
small-cap and value stocks accounted for 25% of the allocation.
During the third quarter, our concern shifted from overvaluation of growth
stocks to worry that the U.S. economy would slow down. We adjusted the
allocation to reduce exposure to value-oriented Series that often have higher
exposures to cyclical, economically sensitive stocks and increased the
allocation to Series that focus on growth stocks that are less sensitive to
economic fluctuations. The new allocation included 25% each to the JNL/Alger
Growth Series and the JNL Global Equities Series, 20% to the JNL Aggressive
Growth Series, 10% each to the JNL/Eagle SmallCap Equity Series and the
JNL/Eagle Core Equity Series, and 5% each to the T. Rowe Price/JNL Mid-Cap
Growth Series and the JNL/Putnam Growth Series.
The new allocation positioned the portfolio to participate in the strong market
rally that began in October as the Federal Reserve aggressively implemented
three consecutive interest rate cuts. The rate cuts allayed investor fears of
recession. Yet, the rally in the equity markets has benefited growth stocks to a
greater degree than value plays. Thus, our reliance on equity Series that focus
on growth stocks has proven sound. We remain confident that over the long term,
a portfolio consistently weighted towards equities will provide superior returns
and help investors meet their financial objectives. We are alert to the elements
of speculative excess that crop up from time to time and are prepared to adjust
the investment mix to protect the portfolio when deemed necessary.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
JNL/S&P VERY AGGRESSIVE GROWTH SERIES I AND THE
S&P MICROPAL ASSET ALLOCATION USA BALANCED FUNDS SECTOR INDEX
[GRAPHIC]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
4/1 $10,000 $10,000
4/30 $10,010 $10,065
5/31 $9,800 $9,964
6/30 $10,340 $10,116
7/31 $10,220 $9,971
8/31/98 $8,520 $9,107
9/30 $9,000 $9,468
10/31 $9,460 $9,845
11/30 $10,110 $10,195
12/31/98 $11,190 $10,540
TOTAL RETURN
FOR THE PERIOD
FROM APRIL 1, 1998* TO
DECEMBER 31, 1998 ... 11.90%
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT RETURN AND
PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY
BE MORE OR LESS THAN THEIR ORIGINAL COST.
PERFORMANCE NUMBERS ARE NET OF ALL SERIES OPERATING EXPENSES, BUT DO NOT REFLECT
THE DEDUCTION OF INSURANCE CHARGES.
- ------------
* Commencement of operations.
<PAGE>
JNL Series Trust
JNL/S&P Very Aggressive Growth Series I
Statement of Assets and Liabilities
December 31, 1998
Assets
Investments in securities, at cost ........ $ 2,211,104
================
Investments in securities, at value ....... $ 2,441,748
Receivable:
Fund shares sold ....................... 13,510
Total assets .............................. 2,455,258
Liabilities
Payables:
Investment securities purchased ........ 13,417
Investment advisory fees ............... 417
Fund shares redeemed ................... 93
Total liabilities ......................... 13,927
Net assets ................................ $ 2,441,331
================
Net assets consist of:
Paid-in capital ........................... $ 2,143,842
Undistributed net investment income ....... 51,762
Accumulated net realized gain
on investments ......................... 15,083
Net unrealized appreciation on
investments ............................. 230,644
Net assets ................................ $ 2,441,331
================
Total shares outstanding (no par
value), unlimited shares authorized ....... 218,190
================
Net asset value, offering and
redemption price per share................. $ 11.19
================
Statement of Operations
For the Period Ended December 31, 1998*
Investment income
Dividends .............................. $ 53,569
Interest................................ -
---------------
Total investment income ................... 53,569
---------------
Expenses
Investment advisory fees ............... 1,807
---------------
Total operating expenses .................. 1,807
---------------
Net investment income ..................... 51,762
---------------
Realized and unrealized gain
Net realized gain on investments .......... 15,083
Net change in unrealized appreciation
on investments ......................... 230,644
---------------
Net realized and unrealized gain .......... 245,727
---------------
Net increase in net assets from
operations ................................ $ 297,489
===============
- ----------------------------------------------------------
* For period beginning April 1, 1998 (commencement of operations).
See notes to the financial statements.
<PAGE>
JNL Series Trust
JNL/S&P Very Aggressive Growth Series I
Statement of Changes in Net Assets
Period from
April 1,
1998* to
December 31,
1998
------------
Operations:
Net investment income ..................... $ 51,762
Net realized gain on investments .......... 15,083
Net change in unrealized appreciation
on investments ......................... 230,644
----------
Net increase in net assets from
operations ................................ 297,489
----------
Distributions to shareholders:
From net investment income................. -
From net realized gain on
investment transactions ................ -
----------
Total distributions to shareholders ....... -
----------
Share transactions:
Proceeds from the sale of shares .......... 3,155,187
Reinvestment of distributions ............. -
Cost of shares redeemed ................... (1,011,345)
----------
Net increase in net assets from
share transactions ....................... 2,143,842
----------
Net increase in net assets .................. 2,441,331
Net assets beginning of period .............. -
----------
Net assets end of period .................... $ 2,441,331
==========
Undistributed net investment income ......... $ 51,762
==========
Financial Highlights
Period from
April 1,
1998* to
December 31,
1998
------------
Selected Per Share Data
Net asset value, beginning of period......... $ 10.00
------------
Income from operations:
Net investment income (c) ................. 0.24
Net realized and unrealized gains
on investments (c) ..................... 0.95
------------
Total income from operations............... 1.19
------------
Less distributions:
From net investment income ................ -
From net realized gain on
investment transactions ................ -
------------
Total distributions........................ -
------------
Net increase .............................. 1.19
------------
Net asset value, end of period .............. $ 11.19
Total Return (a) ............................ 11.90%
Ratios and Supplemental Data:
Net assets, end of period (in thousands) .. $ 2,441
Ratio of net operating expenses to
average net assets (b) .................... 0.20%
Ratio of net investment income to
average net assets (b) .................... 5.73%
Portfolio turnover ........................ 121.03%
- --------------------------------------------------------------------------------
* 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 period ended December 31, 1998.
(b) Annualized for the period ended December 31, 1998.
(c) The amount shown may not accord with the change in the aggregate gains and
losses of portfolio securities due to timing of sales, redemptions of
Series shares and receipt of dividends.
See notes to the financial statements.
<PAGE>
JNL/S&P EQUITY GROWTH SERIES I
STANDARD & POOR'S INVESTMENT ADVISORY
SERVICES, INC.
[STANDARD & POOR'S LOGO] DAVID M. BLITZER, JOSHUA M. HARARI
OBJECTIVE:
JNL/S&P Equity Growth Series I seeks as its investment objective capital growth.
Under normal circumstances, this Series pursues its investment objective by
investing 100% of its assets in a diversified group of Series of the JNL Series
Trust that primarily invest in equity securities. This investment concept is
referred to as a "fund of funds."
MONEY MANAGER COMMENTARY:
The Series commenced operations on April 13, 1998 and returned 6.40% from
inception to year-end 1998, compared with 5.45% for its benchmark, the S&P
Micropal Asset Allocation USA Balanced Funds Sector Index.
The Series' initial investment mix included allocations of 40% to the JNL/Putnam
Value Equity Series, 15% to the T. Rowe Price/JNL Established Growth Series, 10%
each to the T. Rowe Price/JNL Mid-Cap Growth Series, the JNL/Putnam Growth
Series, the JNL/Eagle Core Equity Series and the JNL Global Equities Series, and
5% to the JNL/Eagle SmallCap Equity Series. This allocation reflected the
long-term focus of this investment program on equity Series that emphasize
growth. But, it also took into account the near-term concern about excessive
valuations of domestic equities by allocating 10% to global equity securities
and 55% to Series that invest in sectors that had lagged early in 1998, such as
mid-cap, small-cap and value stocks.
During the third quarter, our concern shifted from overvaluation of growth
stocks to worry that the U.S. economy would slow down. We adjusted the
allocation to reduce exposure to value-oriented Series that often have higher
exposures to cyclical, economically sensitive stocks and increased the
allocation to Series that focus on growth stocks that are less sensitive to
economic fluctuations. The new allocation included 25% to the JNL/Eagle Core
Equity Series, 20% each to the JNL Global Equities Series and the JNL/Alger
Growth Series, 15% to the JNL Aggressive Growth Series, and 10% each to the T.
Rowe Price/JNL Mid-Cap Growth Series and the JNL/Eagle SmallCap Equity Series.
The new allocation positioned the portfolio to participate in the strong market
rally that began in October as the Federal Reserve aggressively implemented
three consecutive interest rate cuts. The rate cuts allayed investor fears of
recession. Yet, the rally in the equity markets has benefited growth stocks to a
greater degree than value plays. Thus, our reliance on equity Series that focus
on growth stocks has proven sound. We remain confident that over the long term,
a portfolio consistently weighted towards equities will provide superior returns
and help investors meet their financial objectives. We are alert to the elements
of speculative excess that crop up from time to time and are prepared to adjust
the investment mix to protect the portfolio when deemed necessary.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
JNL/S&P EQUITY GROWTH SERIES I AND THE
S&P MICROPAL ASSET ALLOCATION USA BALANCED FUNDS SECTOR INDEX
[GRAPHIC]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
4/13 $10,000 $10,000
4/30 $9,990 $10,070
5/31 $9,770 $9,969
6/30 $9,970 $10,121
7/31 $9,780 $9,976
8/31/98 $8,170 $9,111
9/30 $8,630 $9,473
10/31 $9,120 $9,850
11/30 $9,700 $10,200
12/31/98 $10,640 $10,545
TOTAL RETURN
FOR THE PERIOD
FROM APRIL 13, 1998* TO
DECEMBER 31, 1998 ... 6.40%
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT RETURN AND
PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY
BE MORE OR LESS THAN THEIR ORIGINAL COST.
PERFORMANCE NUMBERS ARE NET OF ALL SERIES OPERATING EXPENSES BUT DO NOT REFLECT
THE DEDUCTION OF INSURANCE CHARGES.
- ------------
* Commencement of operations.
<PAGE>
JNL Series Trust
JNL/S&P Equity Growth Series I
Statement of Assets and Liabilities
December 31, 1998
Assets
Investments in securities, at cost ........ $ 4,557,366
================
Investments in securities, at value ....... $ 5,035,338
Receivable:
Fund shares sold ....................... 58,883
Total assets .............................. 5,094,221
Liabilities
Payables:
Investment securities purchased ........ 58,692
Investment advisory fees ............... 757
Fund shares redeemed ................... 191
Total liabilities ......................... 59,640
Net assets ................................ $ 5,034,581
================
Net assets consist of:
Paid-in capital ........................... $ 4,516,990
Undistributed net investment income ....... 98,327
Accumulated net realized loss
on investments ......................... (58,708)
Net unrealized appreciation on
investments ............................. 477,972
Net assets ................................ $ 5,034,581
================
Total shares outstanding (no par
value), unlimited shares authorized........ 473,365
================
Net asset value, offering and
redemption price per share................. $ 10.64
================
Statement of Operations
For the Period Ended December 31, 1998*
Investment income
Dividends .............................. $ 101,165
Interest................................ -
---------------
Total investment income ................... 101,165
---------------
Expenses
Investment advisory fees ............... 2,838
---------------
Total operating expenses .................. 2,838
---------------
Net investment income ..................... 98,327
---------------
Realized and unrealized gain (loss)
Net realized loss on investments .......... (58,708)
Net change in unrealized appreciation
on investments ......................... 477,972
---------------
Net realized and unrealized gain .......... 419,264
---------------
Net increase in net assets from
operations ................................ $ 517,591
===============
- ----------------------------------------------------------
* For period beginning April 13, 1998 (commencement of operations).
See notes to the financial statements.
<PAGE>
JNL Series Trust
JNL/S&P Equity Growth Series I
Statement of Changes in Net Assets
Period from
April 13,
1998* to
December 31,
1998
Operations:
Net investment income ..................... $ 98,327
Net realized loss on investments .......... (58,708)
Net change in unrealized appreciation
on investments ......................... 477,972
----------
Net increase in net assets from
operations ................................ 517,591
----------
Distributions to shareholders:
From net investment income................. -
From net realized gain on
investment transactions ................ -
----------
Total distributions to shareholders ....... -
----------
Share transactions:
Proceeds from the sale of shares .......... 4,945,786
Reinvestment of distributions ............. -
Cost of shares redeemed ................... (428,796)
----------
Net increase in net assets from
share transactions ....................... 4,516,990
----------
Net increase in net assets .................. 5,034,581
Net assets beginning of period .............. -
----------
Net assets end of period .................... $ 5,034,581
==========
Undistributed net investment income ......... $ 98,327
==========
Financial Highlights
Period from
April 13,
1998* to
December 31,
1998
------------
Selected Per Share Data
Net asset value, beginning of period......... $ 10.00
------------
Income from operations:
Net investment income (c) ................. 0.21
Net realized and unrealized gains
on investments (c) ..................... 0.43
------------
Total income from operations .............. 0.64
------------
Less distributions:
From net investment income ................ -
From net realized gain on
investment transactions ................ -
------------
Total distributions ....................... -
------------
Net increase .............................. 0.64
------------
Net asset value, end of period .............. $ 10.64
============
Total Return (a) ............................ 6.40%
Ratios and Supplemental Data:
Net assets, end of period (in
thousands) ................................ $ 5,035
Ratio of net operating expenses to
average net assets (b) .................... 0.20%
Ratio of net investment income to
average net assets (b) .................... 6.93%
Portfolio turnover ........................ 72.69%
- --------------------------------------------------------------------------------
* 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 period ended December 31, 1998.
(b) Annualized for the period ended December 31, 1998.
(c) The amount shown may not accord with the change in the aggregate gains and
losses of portfolio securities due to timing of sales, redemptions of
Series shares and receipt of dividends.
See notes to the financial statements.
<PAGE>
JNL/S&P EQUITY AGGRESSIVE GROWTH SERIES I
STANDARD & POOR'S INVESTMENT ADVISORY
SERVICES, INC.
[STANDARD & POOR'S LOGO] DAVID M. BLITZER, JOSHUA M. HARARI
OBJECTIVE:
JNL/S&P Equity Aggressive Growth Series I seeks as its investment objective
capital growth. Under normal circumstances, this Series pursues its investment
objective by investing 100% of its assets in a diversified group of Series of
the JNL Series Trust that primarily invest in equity securities. This investment
concept is referred to as a "fund of funds."
MONEY MANAGER COMMENTARY:
The Series commenced operations on April 15, 1998 and returned 7.50% from
inception to year-end 1998, compared with 6.11% for its benchmark, the S&P
Micropal Asset Allocation USA Balanced Funds Sector Index.
The Series' initial investment mix included allocations of 25% each to the
JNL/Putnam Growth Series and the T. Rowe Price/JNL Mid-Cap Growth Series, 20% to
the JNL/Eagle Core Equity Series, 10% to the JNL Aggressive Growth Series, and
5% each to the JNL/Eagle SmallCap Equity Series, T. Rowe Price/JNL International
Equity Investment Series, the JNL Global Equities Series and the JNL/Putnam
Value Equity Series. This allocation reflected the long-term focus of this
investment program on equity Series that emphasize growth. Allocations to global
equity securities and Series that invest in sectors that had lagged early in
1998 such as mid-cap, small-cap and value stocks accounted for 40% of the
allocation.
During the third quarter, our concern shifted from overvaluation of growth
stocks to worry that the U.S. economy would slow down. We adjusted the
allocation to reduce exposure to value-oriented Series that often have higher
exposures to cyclical, economically sensitive stocks and increased the
allocation to Series that focus on growth stocks that are less sensitive to
economic fluctuations. The new allocation included 25% to the JNL/Alger Growth
Series, 20% each to the JNL Global Equities Series and the JNL/Eagle Core Equity
Series, 15% to the JNL Aggressive Growth Series, 10% to the JNL/Eagle SmallCap
Equity Series and 5% each to the T. Rowe Price/JNL Mid-Cap Growth Series and the
JNL/ Putnam Growth Series.
The new allocation positioned the portfolio to participate in the strong market
rally that began in October as the Federal Reserve aggressively implemented
three consecutive interest rate cuts. The rate cuts allayed investor fears of
recession. Yet, the rally in the equity markets has benefited growth stocks to a
greater degree than value plays. Thus, our reliance on equity Series that focus
on growth stocks has proven sound. We remain confident that over the long-term,
a portfolio consistently weighted towards equities will provide superior returns
and help investors meet their financial objectives. We are alert to the elements
of speculative excess that crop up from time to time and are prepared to adjust
the investment mix to protect the portfolio when deemed necessary.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
JNL/S&P EQUITY AGGRESSIVE GROWTH SERIES I AND THE
S&P MICROPAL ASSET ALLOCATION USA BALANCED FUNDS SECTOR INDEX
[GRAPHIC]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
4/15/1998 $10,000 $10,000
4/30 $9,900 $10,133
5/31 $9,650 $10,032
6/30 $10,070 $10,184
7/31 $9,850 $10,039
8/31 $8,230 $9,168
9/30 $8,700 $9,532
10/31 $9,170 $9,912
11/30 $9,780 $10,263
12/31/1998 $10,750 $10,611
TOTAL RETURN
FOR THE PERIOD
FROM APRIL 15, 1998* TO
DECEMBER 31, 1998 ... 7.50%
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT RETURN AND
PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY
BE MORE OR LESS THAN THEIR ORIGINAL COST.
PERFORMANCE NUMBERS ARE NET OF ALL SERIES OPERATING EXPENSES, BUT DO NOT REFLECT
THE DEDUCTION OF INSURANCE CHARGES.
- ------------
* Commencement of operations.
<PAGE>
JNL Series Trust
JNL/S&P Equity Aggressive Growth Series I
Statement of Assets and Liabilities
December 31, 1998
Assets
Investments in securities, at cost ........ $ 2,913,308
================
Investments in securities, at value ....... $ 3,238,322
Receivable:
Fund shares sold ....................... 25,773
Total assets .............................. 3,264,095
Liabilities
Payables:
Investment securities purchased ........ 25,615
Investment advisory fees ............... 490
Fund shares redeemed ................... 158
Total liabilities ......................... 26,263
Net assets ................................ $ 3,237,832
================
Net assets consist of:
Paid-in capital ........................... $ 2,887,701
Undistributed net investment income ....... 64,180
Accumulated net realized loss on
investments ............................... (39,063)
Net unrealized appreciation on
investments ............................. 325,014
Net assets ................................ $ 3,237,832
================
Total shares outstanding (no par
value), unlimited shares authorized........ 301,109
================
Net asset value, offering and
redemption price per share................. $ 10.75
================
Statement of Operations
For the Period Ended December 31, 1998*
Investment income
Dividends ..............................$ 66,013
Interest................................ -
---------------
Total investment income ................... 66,013
---------------
Expenses
Investment advisory fees ............... 1,833
---------------
Total operating expenses .................. 1,833
---------------
Net investment income ..................... 64,180
---------------
Realized and unrealized gains (loss)
Net realized loss on investments .......... (39,063)
Net change in unrealized appreciation
on investments ......................... 325,014
---------------
Net realized and unrealized gain .......... 285,951
---------------
Net increase in net assets from
operations ................................ $ 350,131
===============
- ----------------------------------------------------------
* For period beginning April 15, 1998 (commencement of operations).
See notes to the financial statements.
<PAGE>
JNL Series Trust
JNL/S&P Equity Aggressive Growth Series I
Statement of Changes in Net Assets
Period from
April 15,
1998* to
December 31,
1998
------------
Operations:
Net investment income ..................... $ 64,180
Net realized loss on investments .......... (39,063)
Net change in unrealized appreciation
on investments ......................... 325,014
----------
Net increase in net assets from
operations ................................ 350,131
----------
Distributions to shareholders:
From net investment income................. -
From net realized gain on
investment transactions ................ -
----------
Total distributions to shareholders ....... -
----------
Share transactions:
Proceeds from the sale of shares .......... 3,188,502
Reinvestment of distributions ............. -
Cost of shares redeemed ................... (300,801)
----------
Net increase in net assets from
share transactions ........................ 2,887,701
----------
Net increase in net assets ................... 3,237,832
Net assets beginning of period ............... -
----------
Net assets end of period .................... $ 3,237,832
==========
Undistributed net investment income ......... $ 64,180
==========
Financial Highlights
Period from
April 15,
1998* to
December 31,
1998
------------
Selected Per Share Data
Net asset value, beginning of period......... $ 10.00
------------
Income from operations:
Net investment income (c) ................. 0.21
Net realized and unrealized gain
on investments (c) ..................... 0.54
------------
Total income from operations .............. 0.75
------------
Less distributions:
From net investment income ................ -
From net realized gain on
investment transactions ................ -
------------
Total distributions ....................... -
------------
Net increase .............................. 0.75
------------
Net asset value, end of period .............. $10.75
============
Total Return (a) ............................ 7.50%
Ratios and Supplemental Data:
Net assets, end of period (in thousands) .. $3,238
Ratio of net operating expenses to
average net assets (b) .................... 0.20%
Ratio of net investment income to
average net assets (b) .................... 7.01%
Portfolio turnover ........................ 67.88%
- --------------------------------------------------------------------------------
* 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 period ended December 31, 1998.
(b) Annualized for the period ended December 31, 1998.
(c) The amount shown may not accord with the change in the aggregate gains and
losses of portfolio securities due to timing of sales, redemptions of
Series shares and receipt of dividends.
See notes to the financial statements.
<PAGE>
JNL/S&P CONSERVATIVE GROWTH SERIES II
STANDARD & POOR'S INVESTMENT ADVISORY
SERVICES, INC.
[STANDARD & POOR'S LOGO] DAVID M. BLITZER, JOSHUA M. HARARI
OBJECTIVE:
JNL/S&P Conservative Growth Series II seeks as its investment objective capital
growth and current income. This Series pursues its investment objective by
investing in a diversified group of Series of the JNL Series Trust. This
investment concept is referred to as a "fund of funds." Under normal
circumstances, this Series allocates between 60% to 70% of its assets to Series
that invest primarily in equity securities and 30% to 40% to Series that invest
in fixed income securities.
MONEY MANAGER COMMENTARY:
The Series commenced operations on April 13, 1998 and returned -4.60% from
inception to year-end 1998, compared with 2.77% for its benchmark, the S&P
Micropal Asset Allocation USA Income Funds Sector Index.
The Series' initial investment mix included allocations of 25% to the Goldman
Sachs/JNL Growth & Income Series, 20% to the Salomon Brothers/JNL Balanced
Series, and 5% each to the JNL/Putnam Growth Series, Lazard/JNL Mid Cap Value
Series, JNL Global Equities Series and JNL/Putnam Value Equity Series. The fixed
income portion was allocated 20% to the Salomon Brothers/JNL Global Bond Series,
10% to the JNL/PIMCO Total Return Bond Series, and 5% to the Salomon
Brothers/JNL High Yield Bond Series. This allocation reflected the long-term
focus of this investment program, but also took into account the near-term
concern about excessive valuations of domestic equities by making extensive use
of equity Series that focus on value as opposed to growth.
During the third quarter, our concern shifted from overvaluation of growth
stocks to worry that the U.S. economy would slow down. We adjusted the
allocation to reduce exposure to value-oriented Series that often have higher
exposures to cyclical, economically sensitive stocks and increased the
allocation to Series that focus on growth stocks that are less sensitive to
economic fluctuations. The new allocation included 20% to the Goldman Sachs/JNL
Growth & Income Series, 15% each to the JNL/Alliance Growth Series and the
Salomon Brothers/ JNL Balanced Series, 10% to the JNL Global Equities Series,
and 5% each to the JNL Aggressive Growth Series and the Lazard/JNL Mid Cap Value
Series. The fixed income portion of the portfolio was allocated as follows: 15%
to the JNL/ PIMCO Total Return Bond Series, 10% to the Salomon Brothers/JNL
Global Bond Series, and 5% to the Salomon Brothers/ JNL High Yield Bond Series.
The effort to maintain a long-term focus resulted in setbacks as a broad
pullback in the equity markets took hold in August. However, by staying true to
the long-term objectives of this Series and with the increased focus on the more
aggressive equity Series available, the portfolio quickly began to recover as
the market rallied in October. While the overall performance from inception to
the end of 1998 lagged the Series' benchmark, the portfolio remained positioned
to continue to benefit from future market advances. We remain confident that
over the long term, a portfolio consistently weighted towards equities will
provide superior returns and help investors meet their financial objectives. We
are alert to the elements of speculative excess that crop up from time to time
and are prepared to adjust the investment mix to protect the portfolio when
deemed necessary.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
JNL/S&P CONSERVATIVE GROWTH SERIES II AND THE
S&P MICROPAL ASSET ALLOCATION USA INCOME FUNDS SECTOR INDEX
[GRAPHIC]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
4/13/1998 $10,000.00 $10,000.00
4/30 $9,970.00 $10,049.00
5/31 $9,890.00 $9,998.00
6/30 $9,900.00 $10,095.00
7/31 $9,720.00 $10,017.00
8/31 $8,720.00 $9,396.00
9/30 $8,990.00 $9,629.00
10/31 $9,060.00 $9,800.00
11/30 $9,300.00 $10,072.00
12/31/1998 $9,540.00 $10,277.00
TOTAL RETURN
FOR THE PERIOD
FROM APRIL 13, 1998* TO
DECEMBER 31, 1998 ... -4.60%
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT RETURN AND
PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY
BE MORE OR LESS THAN THEIR ORIGINAL COST.
PERFORMANCE NUMBERS ARE NET OF ALL SERIES OPERATING EXPENSES, BUT DO NOT REFLECT
THE DEDUCTION OF INSURANCE CHARGES.
- -------------
* Commencement of operations.
<PAGE>
Statement of Assets and Liabilities
December 31, 1998
Assets
Investments in securities, at cost ........ $ 1,636,407
================
Investments in securities, at value ....... $ 1,701,340
Receivable:
Investment securities sold ............. 70
Total assets .............................. 1,701,410
Liabilities
Payables:
Investment advisory fees ............... 263
Fund shares redeemed ................... 70
Total liabilities ......................... 333
Net assets ................................ $ 1,701,077
================
Net assets consist of:
Paid-in capital ........................... $ 2,289,200
Undistributed net investment income ....... 40,676
Accumulated net realized loss on
investments................................ (693,732)
Net unrealized appreciation on
investments ............................. 64,933
Net assets ................................ $ 1,701,077
================
Total shares outstanding (no par
value), unlimited shares authorized........ 178,376
================
Net asset value, offering and
redemption price per share................. $ 9.54
================
Statement of Operations
For the Period Ended December 31, 1998*
Investment income
Dividends .............................. $ 44,228
Interest................................ -
---------------
Total investment income ................... 44,228
---------------
Expenses
Investment advisory fees ............... 3,552
---------------
Total operating expenses .................. 3,552
---------------
Net investment income ..................... 40,676
---------------
Realized and unrealized gain (loss)
Net realized loss on investments .......... (693,732)
Net change in unrealized appreciation
on investments ......................... 64,933
---------------
Net realized and unrealized loss .......... (628,799)
---------------
Net decrease in net assets from
operations ................................ $ (588,123)
===============
- ----------------------------------------------------------
* For period beginning April 13, 1998 (commencement of operations).
See notes to the financial statements.
<PAGE>
JNL Series Trust
JNL/S&P Conservative Growth Series II
Statement of Changes in Net Assets
Period from
April 13,
1998* to
December 31,
1998
------------
Operations:
Net investment income ..................... $ 40,676
Net realized loss on investments .......... (693,732)
Net change in unrealized appreciation
on investments ......................... 64,933
Net decrease in net assets from
operations ................................ (588,123)
Distributions to shareholders:
From net investment income ................ -
From net realized gain on
investment transactions ................ -
-----------
Total distributions to shareholders ....... -
-----------
Share transactions:
Proceeds from the sale of shares .......... 9,898,825
Reinvestment of distributions ............. -
Cost of shares redeemed ................... (7,609,625)
-----------
Net increase in net assets from
share transactions ....................... 2,289,200
-----------
Net increase in net assets .................. 1,701,077
Net assets beginning of period .............. -
-----------
Net assets end of period .................... $ 1,701,077
==========
Undistributed net investment income ......... $ 40,676
-----------
Financial Highlights
Period from
April 13,
1998* to
December 31,
1998
------------
Selected Per Share Data
Net asset value, beginning of period......... $ 10.00
------------
Income from operations:
Net investment income (c) ................. 0.23
Net realized and unrealized loss
on investments (c) ..................... (0.69
------------
Total loss from operations ................ (0.46
------------
Less distributions:
From net investment income ................ -
From net realized gain on
investment transactions ................ -
------------
Total distributions ....................... -
------------
Net decrease .............................. (0.46)
------------
Net asset value, end of period .............. $ 9.54
============
Total Return (a) ............................ (4.60)%
Ratios and Supplemental Data:
Net assets, end of period (in thousands) .. $ 1,701
Ratio of net operating expenses to
average net assets (b) .................... 0.20%
Ratio of net investment income to
average net assets (b) .................... 2.29%
Portfolio turnover ........................ 369.99%
- --------------------------------------------------------------------------------
* 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 period ended December 31, 1998.
(b) Annualized for the period ended December 31, 1998.
(c) The amount shown may not accord with the change in the aggregate gains and
losses of portfolio securities due to timing of sales, redemptions of
Series shares and receipt of dividends.
See notes to the financial statements.
<PAGE>
JNL/S&P MODERATE GROWTH SERIES II
STANDARD & POOR'S INVESTMENT ADVISORY
SERVICES, INC.
[STANDARD & POORS LOGO] DAVID M. BLITZER, JOSHUA M. HARARI
OBJECTIVE:
JNL/S&P Moderate Growth Series II seeks as its investment objective capital
growth and current income. This Series pursues its investment objective by
investing in a diversified group of Series of the JNL Series Trust. This
investment concept is referred to as a "fund of funds." Under normal
circumstances, this Series allocates between 70% and 80% of its assets to Series
that invest primarily in equity securities and 20% to 30% to Series that invest
in fixed income securities.
MONEY MANAGER COMMENTARY:
The Series commenced operations on April 13, 1998 and returned 2.20% from
inception to year-end 1998, compared with 5.45% for its benchmark, the S&P
Micropal Asset Allocation USA Balanced Funds Sector Index.
The Series' initial investment mix included allocations of 20% to the Goldman
Sachs/JNL Growth & Income Series, 15% each to the Salomon Brothers/JNL Balanced
Series, and the Lazard/JNL Mid Cap Value Series, 10% to the JNL/Putnam Growth
Series, and 5% each to the JNL/Alliance Growth Series, the T. Rowe Price/JNL
Mid-Cap Growth Series, and the JNL Global Equities Series. The fixed income
portion was allocated 15% to the Salomon Brothers/JNL Global Bond Series and 10%
to the Salomon Brothers/JNL High Yield Bond Series. This allocation reflected
the long-term focus of this investment program, but also took into account the
near-term concern about excessive valuations of domestic equities by making
extensive use of equity Series that focus on value as opposed to growth.
During the third quarter, our concern shifted from overvaluation of growth
stocks to worry that the U.S. economy would slow down. We adjusted the
allocation to reduce exposure to value-oriented Series that often have higher
exposures to cyclical, economically sensitive stocks and increased the
allocation to Series that focus on growth stocks that are less sensitive to
economic fluctuations. The new allocation included 20% each to the Goldman
Sachs/JNL Growth & Income Series and the Salomon Brothers/JNL Balanced Series,
15% to the JNL/Alliance Growth Series, and 10% each to the JNL Aggressive Growth
Series, JNL Global Equities Series and the Lazard/ JNL Mid Cap Value Series. The
fixed income portion of the portfolio was allocated 5% each to the JNL/PIMCO
Total Return Bond Series, the Salomon Brothers/JNL Global Bond Series and the
Salomon Brothers/JNL High Yield Bond Series.
The effort to maintain a long-term focus resulted in setbacks as a broad
pullback in the equity markets took hold in August. However, by staying true to
the long-term objectives of this Series and with the increased focus on the more
aggressive equity Series available, the portfolio quickly began to recover as
the market rallied in October. While the overall performance from inception to
the end of 1998 lagged the Series' benchmark, the portfolio remained positioned
to continue to benefit from future market advances. We remain confident that
over the long term, a portfolio consistently weighted towards equities will
provide superior returns and help investors meet their financial objectives. We
are alert to the elements of speculative excess that crop up from time to time
and are prepared to adjust the investment mix to protect the portfolio when
deemed necessary.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
JNL/S&P MODERATE GROWTH SERIES II AND THE
S&P MICROPAL ASSET ALLOCATION USA BALANCED FUNDS SECTOR INDEX
[GRAPHIC]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
4/13/1998 $10,000.00 $10,000.00
4/30 $9,900.00 $10,070.00
5/31 $9,830.00 $9,969.00
6/30 $9,910.00 $10,121.00
7/31 $9,710.00 $9,976.00
8/31 $8,540.00 $9,111.00
9/30 $8,940.00 $9,473.00
10/31 $9,330.00 $9,850.00
11/30 $9,720.00 $10,200.00
12/31/1998 $10,220.00 $10,545.00
TOTAL RETURN
FOR THE PERIOD
FROM APRIL 13, 1998* TO
DECEMBER 31, 1998 ... 2.20%
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT RETURN AND
PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY
BE MORE OR LESS THAN THEIR ORIGINAL COST.
PERFORMANCE NUMBERS ARE NET OF ALL SERIES OPERATING EXPENSES, BUT DO NOT REFLECT
THE DEDUCTION OF INSURANCE CHARGES.
- -------------
* Commencement of operations.
<PAGE>
JNL Series Trust
JNL/S&P Moderate Growth Series II
Statement of Assets and Liabilities
December 31, 1998
Assets
Investments in securities, at cost ........ $ 2,694,835
================
Investments in securities, at value ....... $ 2,856,054
Receivable:
Investment securities sold ............. 117
Total assets .............................. 2,856,171
Liabilities
Payables:
Investment advisory fees ............... 411
Fund shares redeemed ................... 117
Total liabilities ......................... 528
Net assets ................................ $ 2,855,643
================
Net assets consist of:
Paid-in capital ........................... $ 2,661,394
Undistributed net investment income ....... 47,089
Accumulated net realized loss
on investments ......................... (14,059)
Net unrealized appreciation on
investments ............................... 161,219
Net assets................................. $ 2,855,643
================
Total shares outstanding (no par
value),unlimited shares authorized ........ 279,342
================
Net asset value, offering and
redemption price per share................. $ 10.22
================
Statement of Operations
For the Period Ended December 31, 1998*
Investment income
Dividends .............................. $ 49,393
Interest ............................... -
---------------
Total investment income ................... 49,393
---------------
Expenses
Investment advisory fees ............... 2,304
---------------
Total operating expenses .................. 2,304
---------------
Net investment income ..................... 47,089
---------------
Realized and unrealized gain (loss)
Net realized loss on investments .......... (14,059)
Net change in unrealized appreciation
on investments ......................... 161,219
---------------
Net realized and unrealized gain .......... 147,160
---------------
Net increase in net assets from
operations ................................ $ 194,249
===============
- ----------------------------------------------------------
* For period beginning April 13, 1998 (commencement of operations).
See notes to the financial statements.
<PAGE>
JNL Series Trust
JNL/S&P Moderate Growth Series II
Statement of Changes in Net Assets
Period from
April 13,
1998* to
December 31,
----------------
1998
Operations:
Net investment income ............... $ 47,089
Net realized loss on investments .... (14,059)
Net change in unrealized appreciation
on investments ................... 161,219
----------------
Net increase in net assets from
operations .......................... 194,249
----------------
Distributions to shareholders:
From net investment income .......... -
From net realized gains on
investment transactions .......... -
----------------
Total distributions to shareholders . -
----------------
Share transactions:
Proceeds from the sale of shares .... 4,026,686
Reinvestment of distributions ....... -
Cost of shares redeemed ............. (1,365,292)
----------------
Net increase in net assets from
share transactions ................. 2,661,394
----------------
Net increase in net assets ............ 2,855,643
Net assets beginning of period ........ -
----------------
Net assets end of period .............. $ 2,855,643
================
Undistributed net investment income ... $ 47,089
================
Financial Highlights
Period from
April 13,
1998* to
December 31,
1998
-------------
Selected Per Share Data
Net asset value, beginning of period....... $ 10.00
-------------
Income from operations:
Net investment income (c) ............... 0.17
Net realized and unrealized gain on
investments (c) ...................... 0.05
-------------
Total income from operations............. 0.22
-------------
Less distributions:
From net investment income............... -
From net realized gain on
investment transactions .............. -
-------------
Total distributions ..................... -
-------------
Net increase ............................ 0.22
-------------
Net asset value, end of period ............ $ 10.22
=============
Total Return (a) .......................... 2.20%
Ratios and Supplemental Data:
Net assets, end of period (in thousands) $ 2,856
Ratio of net operating expenses to
average net assets (b) .................. 0.20%
Ratio of net investment income to
average net assets (b) .................. 4.09%
Portfolio turnover ...................... 103.28%
- --------------------------------------------------------------------------------
* 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 period ended December 31, 1998.
(b) Annualized for the period ended December 31, 1998.
(c) The amount shown may not accord with the change in the aggregate gains and
losses of portfolio securities due to timing of sales, redemptions of
Series shares and receipt of dividends.
See notes to the financial statements.
<PAGE>
JNL/S&P AGGRESSIVE GROWTH SERIES II
STANDARD & POOR'S INVESTMENT ADVISORY
SERVICES, INC.
[STANDARD & POORS LOGO] DAVID M. BLITZER, JOSHUA M. HARARI
OBJECTIVE:
JNL/S&P Aggressive Growth Series II seeks as its investment objective capital
growth. This Series pursues its investment objective by investing in a
diversified group of Series of the JNL Series Trust. This investment concept is
referred to as a "fund of funds." Under normal circumstances, this Series
allocates between 85% and 95% of its assets to Series that invest primarily in
equity securities and 5% to 15% to Series that invest in fixed income
securities.
MONEY MANAGER COMMENTARY:
The Series commenced operations on April 13, 1998 and returned 0.50% from
inception to year-end 1998, compared with 5.45% for its benchmark, the S&P
Micropal Asset Allocation USA Balanced Funds Sector Index.
The Series' initial investment mix included allocations of 25% to the Lazard/JNL
Mid Cap Value Series, 20% to the Goldman Sachs/JNL Growth & Income Series, 10%
each to the Salomon Brothers/JNL Balanced Series, JNL/Putnam Growth Series and
the JNL Global Equities Series, and 5% each to the JNL/ Alliance Growth Series,
the T. Rowe Price/JNL Mid-Cap Growth Series, and the Lazard/JNL Small Cap Value
Series. The fixed income portion was allocated 5% each to the Salomon
Brothers/JNL Global Bond Series and to the Salomon Brothers/JNL High Yield Bond
Series. This allocation reflected the long-term focus of this investment
program, but also took into account the near-term concern about excessive
valuations of domestic equities by making extensive use of equity Series that
focus on value as opposed to growth.
During the third quarter, our concern shifted from overvaluation of growth
stocks to worry that the U.S. economy would slow down. We adjusted the
allocation to reduce exposure to value-oriented Series that often have higher
exposures to cyclical, economically sensitive stocks and increased the
allocation to Series that focus on growth stocks that are less sensitive to
economic fluctuations. The new allocation included 20% each to the JNL/Alliance
Growth Series and the Goldman Sachs/ JNL Growth & Income Series, 15% to the
Lazard/JNL Mid Cap Value Series, 10% each to the JNL Aggressive Growth Series,
the Lazard/JNL Small Cap Value Series, the JNL Global Equities Series and the
Salomon Brothers/JNL Balanced Series. The 5% fixed income portion of the
portfolio was allocated to the Salomon Brothers/JNL Global Bond Series.
The effort to maintain a long-term focus resulted in setbacks as a broad
pullback in the equity markets took hold in August. However, by staying true to
the long-term objectives of this Series and with the increased focus on the more
aggressive equity Series available, the portfolio quickly began to recover as
the market rallied in October. While the overall performance from inception to
the end of 1998 lagged the Series' benchmark, the portfolio remained positioned
to continue to benefit from future market advances. We remain confident that
over the long term, a portfolio consistently weighted towards equities will
provide superior returns and help investors meet their financial objectives. We
are alert to the elements of speculative excess that crop up from time to time
and are prepared to adjust the investment mix to protect the portfolio when
deemed necessary.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
JNL/S&P AGGRESSIVE GROWTH SERIES II AND THE
S&P MICROPAL ASSET ALLOCATION USA BALANCED FUNDS SECTOR INDEX
[GRAPHIC]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
4/13/1998 $10,000.00 $10,000.00
4/30/98 $10,010.00 $10,070.00
5/31/98 $9,790.00 $9,969.00
6/30/98 $9,850.00 $10,121.00
7/31/98 $9,550.00 $9,976.00
8/31/98 $8,120.00 $9,111.00
9/30/98 $8,540.00 $9,473.00
10/31/98 $9,010.00 $9,850.00
11/30/98 $9,450.00 $10,200.00
12/31/1998 $10,050.00 $10,545.00
TOTAL RETURN
FOR THE PERIOD
FROM APRIL 13, 1998* TO
DECEMBER 31, 1998 ... 0.50%
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT RETURN AND
PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY
BE MORE OR LESS THAN THEIR ORIGINAL COST.
PERFORMANCE
NUMBERS ARE NET OF ALL SERIES OPERATING EXPENSES, BUT DO NOT REFLECT THE
DEDUCTION OF
INSURANCE CHARGES.
- -------------
* Commencement of operations.
<PAGE>
JNL Series Trust
JNL/S&P Aggressive Growth Series II
Statement of Assets and Liabilities
December 31, 1998
Assets
Investments in securities, at cost ........ $ 255,710
================
Investments in securities, at value ....... $ 266,887
Receivable:
Investment securities sold ............. 11
Total assets .............................. 266,898
Liabilities
Payables:
Investment advisory fees ............... 33
Fund shares redeemed ................... 11
Total liabilities ......................... 44
Net assets ................................ $ 266,854
================
Net assets consist of:
Paid-in capital ........................... $ 258,495
Undistributed net investment income ....... 2,744
Accumulated net realized loss on
investments ............................... (5,562)
Net unrealized appreciation on
investments ............................. 11,177
Net assets ................................ $ 266,854
================
Total shares outstanding (no par
value), unlimited shares authorized ....... 26,565
================
Net asset value, offering and
redemption price per share ................ $ 10.05
================
Statement of Operations
For the Period Ended December 31, 1998*
Investment income
Dividends .............................. $ 2,994
Interest ............................... -
---------------
Total investment income ................... 2,994
---------------
Expenses
Investment advisory fees ............... 250
---------------
Total operating expenses .................. 250
---------------
Net investment income ..................... 2,744
---------------
Realized and unrealized gain (loss)
Net realized loss on investments .......... (5,562)
Net change in unrealized appreciation
on investments ......................... 11,177
---------------
Net realized and unrealized gain .......... 5,615
---------------
Net increase in net assets from
operations ................................ $ 8,359
===============
- ----------------------------------------------------------
* For period beginning April 13, 1998 (commencement of operations).
See notes to the financial statements
<PAGE>
JNL Series Trust
JNL/S&P Aggressive Growth Series II
Statement of Changes in Net Assets
Period from
April 13,
1998* to
December 31,
1998
-------------
Operations:
Net investment income ............... $ 2,744
Net realized loss on investments .... 5,562
Net change in unrealized appreciation
on investments ................... 11,177
-------------
Net increase in net assets from
operations .......................... 8,359
-------------
Distributions to shareholders:
From net investment income .......... --
From net realized gain on
investment transactions .......... --
-------------
Total distributions to shareholders . --
-------------
Share transactions:
Proceeds from the sale of shares .... 520,291
Reinvestment of distributions ....... --
Cost of shares redeemed ............. (261,796)
-------------
Net increase in net assets from
share transactions ................. 258,495
-------------
Net increase in net assets ............ 266,854
Net assets beginning of period ........ --
-------------
Net assets end of period .............. $ 266,854
=============
Undistributed net investment income ... $ 2,744
=============
Financial Highlights
Period from
April 13,
1998* to
December 31,
1998
------------
Selected Per Share Data
Net asset value, beginning of period......... $ 10.00
------------
Income from operations:
Net investment income (c) ................. 0.10
Net realized and unrealized loss
on investments (c) ..................... (0.05
------------
Total income from operations .............. 0.05
------------
Less distributions:
From net investment income ................ -
From net realized gain on
investment transactions ................ -
------------
Total distributions ....................... -
------------
Net increase .............................. 0.05
------------
Net asset value, end of period .............. $ 10.05
============
Total Return (a) ............................ 0.50%
Ratios and Supplemental Data:
Net assets, end of period (in thousands) .. $ 267
Ratio of net operating expenses to
average net assets (b) .................... 0.20%
Ratio of net investment income to
average net assets (b) .................... 2.19%
Portfolio turnover ........................ 165.71%
- --------------------------------------------------------------------------------
* 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 period ended December 31, 1998.
(b) Annualized for the period ended December 31, 1998.
(c) The amount shown may not accord with the change in the aggregate gains and
losses of portfolio securities due to timing of sales, redemptions of
Series shares and receipt of dividends.
See notes to the financial statements.
<PAGE>
JNL/S&P VERY AGGRESSIVE GROWTH SERIES II
STANDARD & POOR'S INVESTMENT ADVISORY
SERVICES, INC.
[STANDARD AND POORS LOGO] DAVID M. BLITZER, JOSHUA M. HARARI
OBJECTIVE:
JNL/S&P Very Aggressive Growth Series II seeks as its investment objective
capital growth. Under normal circumstances, this Series pursues its investment
objective by investing 100% of its assets in a diversified group of Series of
the JNL Series Trust that primarily invest in equity securities. This investment
concept is referred to as a "fund of funds."
MONEY MANAGER COMMENTARY:
The Series commenced operations on April 13, 1998 and returned 8.00% from
inception to year-end 1998, compared with 5.45% for its benchmark, the S&P
Micropal Asset Allocation USA Balanced Funds Sector Index.
This Series' initial investment mix included allocations of 25% each to the
JNL/Alliance Growth Series, Lazard/ JNL Mid Cap Value Series and the JNL/Putnam
Growth Series, 10% each to the JNL Global Equities Series and the Goldman
Sachs/JNL Growth & Income Series, and 5% to the T. Rowe Price/JNL Mid-Cap Growth
Series. This allocation reflected the long-term focus on growth of this
investment program, but also took into account the near-term concern about
excessive valuations of domestic equities by making modest use of equity Series
that focus on value.
During the third quarter, our concern shifted from overvaluation of growth
stocks to worry that the U.S. economy would slow down. We increased the
allocation to Series that focus on growth stocks that are less sensitive to
economic fluctuations. The new allocation included 30% to the JNL/Alliance
Growth Series, 20% each to the Lazard/JNL Mid Cap Value Series and the JNL
Global Equities Series, 15% to the JNL Aggressive Growth Series, 10% to the
Lazard/JNL Small Cap Value Series and 5% to the Goldman Sachs/JNL Growth &
Income Series.
The effort to maintain a long-term focus resulted in setbacks as a broad
pullback in the equity markets took hold in August. However, by staying true to
the long-term objectives of this Series and with the increased focus on the more
aggressive equity Series available, the portfolio quickly began to recover as
the market rallied in October. The Series exceeded its benchmark and remained
positioned to continue to benefit from future market advances. We remain
confident that over the long term, a portfolio consistently weighted towards
equities will provide superior returns and help investors meet their financial
objectives. We are alert to the elements of speculative excess that crop up from
time to time and are prepared to adjust the investment mix to protect the
portfolio when deemed necessary.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
JNL/S&P VERY AGGRESSIVE GROWTH SERIES II AND THE
S&P MICROPAL ASSET ALLOCATION USA BALANCED FUNDS SECTOR INDEX
[GRAPHIC]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
4/13/1998 $10,000.00 $10,000.00
4/30/98 $10,040.00 $10,070.00
5/31/98 $9,810.00 $9,969.00
6/30/98 $10,150.00 $10,121.00
7/31/98 $10,020.00 $9,976.00
8/31/98 $8,320.00 $9,111.00
9/30/98 $8,740.00 $9,473.00
10/31/98 $9,290.00 $9,850.00
11/30/98 $9,860.00 $10,200.00
12/31/1998 $10,800.00 $10,545.00
TOTAL RETURN
FOR THE PERIOD
FROM APRIL 13, 1998* TO
DECEMBER 31, 1998 ... 8.00%
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT RETURN AND
PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY
BE MORE OR LESS THAN THEIR ORIGINAL COST.
PERFORMANCE NUMBERS ARE NET OF ALL SERIES OPERATING EXPENSES, BUT DO NOT REFLECT
THE DEDUCTION OF INSURANCE CHARGES.
- ------------
* Commencement of operations.
<PAGE>
JNL Series Trust
JNL/S&P Very Aggressive Growth Series II
Statement of Assets and Liabilities
December 31, 1998
Assets
Investments in securities, at cost ........ $ 133,617
================
Investments in securities, at value ....... $ 154,707
Receivable:
Investment securities sold ............. 6
Total assets .............................. 154,713
Liabilities
Payables:
Investment advisory fees ............... 25
Fund shares redeemed ................... 6
Total liabilities ......................... 31
Net assets ................................ $ 154,682
================
Net assets consist of:
Paid-in capital ........................... $ 132,016
Undistributed net investment income ....... 963
Accumulated net realized gain
on investments ......................... 613
Net unrealized appreciation on
investments ............................... 21,090
Net assets ................................ $ 154,682
================
Total shares outstanding (no par
value),unlimited shares authorized ........ 14,321
================
Net asset value, offering and
redemption price per share................. $ 10.80
================
Statement of Operations
For the Period Ended December 31, 1998*
Investment income
Dividends .............................. $ 1,174
Interest ............................... -
---------------
Total investment income ................... 1,174
---------------
Expenses
Investment advisory fees ............... 211
---------------
Total operating expenses .................. 211
---------------
Net investment income .................... 963
---------------
Realized and unrealized gain
Net realized gain on investments .......... 613
Net change in unrealized appreciation
on investments ......................... 21,090
---------------
Net realized and unrealized gain .......... 21,703
---------------
Net increase in net assets from
operations ................................ $ 22,666
===============
- ----------------------------------------------------------
* For period beginning April 13, 1998 (commencement of operations).
See notes to the financial statements.
<PAGE>
JNL Series Trust
JNL/S&P Very Aggressive Growth Series II
Statement of Changes in Net Assets
Period from
April 13,
1998* to
December 31,
1998
----------
Operations:
Net investment income ................... $ 963
Net realized gain on investments ........ 613
Net change in unrealized appreciation
on investments ....................... 21,090
----------
Net increase in net assets from
operations .............................. 22,666
----------
Distributions to shareholders:
From net investment income .............. -
From net realized gain on
investment transactions .............. -
----------
Total distributions to shareholders ..... -
----------
Share transactions:
Proceeds from the sale of shares ........ 401,318
Reinvestment of distributions ........... -
Cost of shares redeemed ................. (269,302)
----------
Net increase in net assets from
share transactions ..................... 132,016
----------
Net increase in net assets ................ 154,682
Net assets beginning of period ............ -
----------
Net assets end of period .................. $ 154,682
==========
Undistributed net investment income ....... $ 963
==========
Financial Highlights
Period from
April 13,
1998* to
December 31,
1998
-------------
Selected Per Share Data
Net asset value, beginning of period....... $ 10.00
-------------
Income from operations:
Net investment income (c) ............... 0.07
Net realized and unrealized gains
on investments (c) ................... 0.73
-------------
Total income from operations ............ 0.80
-------------
Less distributions:
From net investment income .............. -
From net realized gain on
investment transactions .............. -
-------------
Total distributions ..................... -
-------------
Net increase ............................ 0.80
-------------
Net asset value, end of period ............ $ 10.80
=============
Total Return (a) .......................... 8.00%
Ratios and Supplemental Data:
Net assets, end of period (in thousands). $ 155
Ratio of net operating expenses to
average net assets (b) .................. 0.20%
Ratio of net investment income to
average net assets (b) .................. 0.91%
Portfolio turnover ...................... 208.66%
- --------------------------------------------------------------------------------
* 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 period ended December 31, 1998.
(b) Annualized for the period ended December 31, 1998.
(c) The amount shown may not accord with the change in the aggregate gains and
losses of portfolio securities due to timing of sales, redemptions of
Series shares and receipt of dividends.
See notes to the financial statements.
<PAGE>
JNL/S&P EQUITY GROWTH SERIES II
STANDARD & POOR'S INVESTMENT ADVISORY
SERVICES, INC.
[STANDARD AND POORS LOGO] DAVID M. BLITZER, JOSHUA M. HARARI
OBJECTIVE:
JNL/S&P Equity Growth Series II seeks as its investment objective capital
growth. Under normal circumstances, this Series pursues its investment objective
by investing 100% of its assets in a diversified group of Series of the JNL
Series Trust that primarily invest in equity securities. This investment concept
is referred to as a "fund of funds."
MONEY MANAGER COMMENTARY:
The Series commenced operations on April 13, 1998 and returned 0.40% from
inception to year-end 1998, compared with 5.45% for its benchmark, the S&P
Micropal Asset Allocation USA Balanced Funds Sector Index.
The Series' initial investment mix included allocations of 25% each to the
Lazard/JNL Mid Cap Value Series and the Goldman Sachs/JNL Growth & Income
Series, 15% each to the JNL/Putnam Growth Series and the JNL/Putnam Value
Series, 10% to the JNL Global Equities Series, and 5% each to the JNL/Alliance
Growth Series and the Lazard/ JNL Small Cap Value Series. This allocation
reflected the long-term focus of this investment program, but also took into
account the near-term concern about excessive valuations of domestic equities by
making extensive use of equity Series that focus on value as opposed to growth.
During the third quarter, our concern shifted from overvaluation of growth
stocks to worry that the U.S. economy would slow down. We adjusted the
allocation to reduce exposure to value-oriented Series that often have higher
exposures to cyclical, economically sensitive stocks and increased the
allocation to Series that focus on growth stocks that are less sensitive to
economic fluctuations. The new allocation included 20% each to the JNL/Alliance
Growth Series, the Lazard/JNL Mid Cap Value Series and the JNL Global Equities
Series, 15% each to the JNL Aggressive Growth Series and the Goldman Sachs/JNL
Growth & Income Series, and 10% to the Lazard/JNL Small Cap Value Series.
The effort to maintain a long-term focus resulted in setbacks as a broad
pullback in the equity markets took hold in August. However, by staying true to
the long-term objectives of this Series and with the increased focus on the more
aggressive equity Series available, the portfolio quickly began to recover as
the market rallied in October. While the overall performance from inception to
the end of 1998 lagged the Series' benchmark, the portfolio remained positioned
to continue to benefit from future market advances. We remain confident that
over the long term, a portfolio consistently weighted towards equities will
provide superior returns and help investors meet their financial objectives. We
are alert to the elements of speculative excess that crop up from time to time
and are prepared to adjust the investment mix to protect the portfolio when
deemed necessary.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
JNL/S&P EQUITY GROWTH SERIES II AND THE
S&P MICROPAL ASSET ALLOCATION USA BALANCED FUNDS SECTOR INDEX
[GRAPHIC]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
4/13/1998 $10,000.00 $10,000.00
4/30 $10,000.00 $10,070.00
5/31 $9,730.00 $9,969.00
6/30 $9,800.00 $10,121.00
7/31 $9,460.00 $9,976.00
8/31 $7,910.00 $9,111.00
9/30 $8,290.00 $9,473.00
10/31 $8,780.00 $9,850.00
11/30 $9,280.00 $10,200.00
12/31/1998 $10,040.00 $10,545.00
TOTAL RETURN
FOR THE PERIOD
FROM APRIL 13, 1998* TO
DECEMBER 31, 1998 ... 0.40%
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT RETURN AND
PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY
BE MORE OR LESS THAN THEIR ORIGINAL COST.
PERFORMANCE NUMBERS ARE NET OF ALL SERIES OPERATING EXPENSES, BUT DO NOT REFLECT
THE DEDUCTION OF INSURANCE CHARGES.
- -------------
* Commencement of operations.
<PAGE>
JNL Series Trust
JNL/S&P Equity Growth Series II
Statement of Assets and Liabilities
December 31, 1998
Assets
Investments in securities, at cost ........ $ 536,781
================
Investments in securities, at value ....... $ 600,477
Receivable:
Investment securities sold ............. 25
Total assets .............................. 600,502
Liabilities
Payables:
Investment advisory fees ............... 97
Fund shares redeemed ................... 25
Total liabilities ......................... 122
Net assets ................................ $ 600,380
================
Net assets consist of:
Paid-in capital ........................... $ 542,216
Undistributed net investment income ....... 4,501
Accumulated net realized loss on
investments ............................... (10,033)
Net unrealized appreciation on
investments ............................... 63,696
Net assets ................................ $ 600,380
================
Total shares outstanding (no par
value),unlimited shares authorized ........ 59,799
================
Net asset value, offering and
redemption price per share................. $ 10.04
================
Statement of Operations
For the Period Ended December 31, 1998*
Investment income
Dividends .............................. $ 4,997
Interest ............................... -
---------------
Total investment income ................... 4,997
---------------
Expenses
Investment advisory fees ............... 496
---------------
Total operating expenses .................. 496
---------------
Net investment income .................... 4,501
---------------
Realized and unrealized gain (loss)
Net realized loss on investments .......... (10,033)
Net change in unrealized appreciation
on investments .......................... 63,696
---------------
Net realized and unrealized gain .......... 53,663
---------------
Net increase in net assets from
operations ................................ $ 58,164
===============
- ----------------------------------------------------------
* For period beginning April 13, 1998 (commencement of operations).
See notes to the financial statements.
<PAGE>
JNL Series Trust
JNL/S&P Equity Growth Series II
Statement of Changes in Net Assets
Period from
April 13,
1998* to
December 31,
1998
-------------
Operations:
Net investment income ................... $ 4,501
Net realized loss on investments ........ (10,033)
Net change in unrealized appreciation
on investments ....................... 63,696
-------------
Net increase in net assets from
operations .............................. 58,164
-------------
Distributions to shareholders:
From net investment income .............. -
From net realized gain on
investment transactions .............. -
-------------
Total distributions to shareholders ..... -
-------------
Share transactions:
Proceeds from the sale of shares ........ 826,868
Reinvestment of distributions ........... -
Cost of shares redeemed ................. (284,652)
-------------
Net increase in net assets from
share transactions ..................... 542,216
-------------
Net increase in net assets ................ 600,380
Net assets beginning of period ............ -
-------------
Net assets end of period .................. $ 600,380
=============
Undistributed net investment income ....... $ 4,501
=============
Financial Highlights
Period from
April 13,
1998* to
December 31,
1998
------------
Selected Per Share Data
Net asset value, beginning of period....... $ 10.00
------------
Income from operations:
Net investment income (c) ............... 0.08
Net realized and unrealized gains
on investments (c) ................... (0.04)
------------
Total income from operations ............ 0.04
------------
Less distributions:
From net investment income .............. -
From net realized gain on
investment transactions .............. -
------------
Total distributions ..................... -
------------
Net increase ............................ 0.04
------------
Net asset value, end of period ............ $ 10.04
============
Total Return (a) .......................... 0.40%
Ratios and Supplemental Data:
Net assets, end of period (in
thousands) .............................. $ 600
Ratio of net operating expenses to
average net assets (b) .................. 0.20%
Ratio of net investment income to
average net assets (b) .................. 1.82%
Portfolio turnover ...................... 121.14%
- --------------------------------------------------------------------------------
* 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 period ended December 31, 1998.
(b) Annualized for the period ended December 31, 1998.
(c) The amount shown may not accord with the change in the aggregate gains and
losses of portfolio securities due to timing of sales, redemptions of
Series shares and receipt of dividends.
See notes to the financial statements.
<PAGE>
JNL/S&P EQUITY AGGRESSIVE GROWTH SERIES II
STANDARD & POOR'S INVESTMENT ADVISORY
SERVICES, INC.
[STANDARD AND POORS LOGO] DAVID M. BLITZER, JOSHUA M. HARARI
OBJECTIVE:
JNL/S&P Equity Aggressive Growth Series II seeks as its investment objective
capital growth. Under normal circumstances, this Series pursues its investment
objective by investing 100% of its assets in a diversified group of Series of
the JNL Series Trust that primarily invest in equity securities. This investment
concept is referred to as a "fund of funds."
MONEY MANAGER COMMENTARY:
The Series commenced operations on April 13, 1998 and returned 3.60% from
inception to year-end 1998, compared with 5.45% for its benchmark, the S&P
Micropal Asset Allocation USA Balanced Funds Sector Index.
The Series' initial investment mix included allocations of 25% each to the
Lazard/JNL Mid Cap Value Series and the Goldman Sachs/JNL Growth & Income
Series, 15% each to the JNL/Alliance Growth Series and the JNL/ Putnam Growth
Series, 10% to the JNL Global Equities Series, and 5% each to the T. Rowe
Price/JNL Mid-Cap Growth Series and the Lazard/JNL Small Cap Value Series. This
allocation reflected the long-term focus of this investment program, but also
took into account the near-term concern about excessive valuations of domestic
equities by making extensive use of equity Series that focus on value as opposed
to growth.
During the third quarter, our concern shifted from overvaluation of growth
stocks to worry that the U.S. economy would slow down. We adjusted the
allocation to reduce exposure to value-oriented Series that often have higher
exposures to cyclical, economically sensitive stocks and increased the
allocation to Series that focus on growth stocks that are less sensitive to
economic fluctuations. The new allocation included 25% to the JNL/Alliance
Growth Series, 20% each to the Lazard/ JNL Mid Cap Value Series and the JNL
Global Equities Series, 15% to the JNL Aggressive Growth Series, and 10% each to
the Goldman Sachs/JNL Growth & Income Series and the Lazard/JNL Small Cap Value
Series.
The effort to maintain a long-term focus resulted in setbacks as a broad
pullback in the equity markets took hold in August. However, by staying true to
the long-term objectives of this Series and with the increased focus on the more
aggressive equity Series available, the portfolio quickly began to recover as
the market rallied in October. While the overall performance from inception to
the end of 1998 lagged the Series' benchmark, the portfolio remained positioned
to continue to benefit from future market advances. We remain confident that
over the long-term, a portfolio consistently weighted towards equities will
provide superior returns and help investors meet their financial objectives. We
are alert to the elements of speculative excess that crop up from time to time
and are prepared to adjust the investment mix to protect the portfolio when
deemed necessary.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
JNL/S&P EQUITY AGGRESSIVE GROWTH SERIES II AND THE
S&P MICROPAL ASSET ALLOCATION USA BALANCED FUNDS SECTOR INDEX
[GRAPHIC]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
4/13/1998 $10,000.00 $10,000.00
4/30 $10,010.00 $10,070.00
5/31 $9,750.00 $9,969.00
6/30 $9,920.00 $10,121.00
7/31 $9,690.00 $9,976.00
8/31 $8,070.00 $9,111.00
9/30 $8,470.00 $9,473.00
10/31 $8,990.00 $9,850.00
11/30 $9,520.00 $10,200.00
12/31/1998 $10,360.00 $10,545.00
TOTAL RETURN
FOR THE PERIOD
FROM APRIL 13, 1998* TO
DECEMBER 31, 1998 ... 3.60%
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT RETURN AND
PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY
BE MORE OR LESS THAN THEIR ORIGINAL COST.
PERFORMANCE NUMBERS ARE NET OF ALL SERIES OPERATING EXPENSES, BUT DO NOT REFLECT
THE DEDUCTION OF INSURANCE CHARGES.
- ------------
* Commencement of operations.
<PAGE>
JNL Series Trust
JNL/S&P Equity Aggressive Growth Series II
Statement of Assets and Liabilities
December 31, 1998
Assets
Investments in securities, at cost ........ $ 204,578
================
Investments in securities, at value ....... $ 224,071
Receivable:
Investment securities sold ............. 9
Total assets .............................. 224,080
Liabilities
Payables:
Investment advisory fees ............... 36
Fund shares redeemed ................... 9
Total liabilities ......................... 45
Net assets ................................ $ 224,035
================
Net assets consist of:
Paid-in capital ........................... $ 208,302
Undistributed net investment income ....... 1,538
Accumulated net realized loss
on investments ......................... (5,298)
Net unrealized appreciation on
investments ............................. 19,493
Net assets ................................ $ 224,035
================
Total shares outstanding (no par
value), unlimited shares authorized ....... 21,616
================
Net asset value, offering and
redemption price per share................. $ 10.36
================
Statement of Operations
For the Period Ended December 31, 1998*
Investment income
Dividends .............................. $ 1,790
Interest ............................... -
---------------
Total investment income ................... 1,790
---------------
Expenses
Investment advisory fees ............... 252
---------------
Total operating expenses................... 252
---------------
Net investment income ..................... 1,538
---------------
Realized and unrealized gain (loss)
Net realized loss on investments .......... (5,298)
Net change in unrealized appreciation
on investments ......................... 19,493
---------------
Net realized and unrealized gain .......... 14,195
---------------
Net increase in net assets from
operations ................................ $ 15,733
===============
- ----------------------------------------------------------
* For period beginning April 13, 1998 (commencement of operations).
See notes to the financial statements.
<PAGE>
JNL Series Trust
JNL/S&P Equity Aggressive Growth Series II
Statement of Changes in Net Assets
Period from
April 13,
1998* to
December 31,
1998
------------
Operations:
Net investment income ................... $ 1,538
Net realized loss on investments ........ (5,298)
Net change in unrealized appreciation
on investments ....................... 19,493
------------
Net increase in net assets from
operations .............................. 15,733
------------
Distributions to shareholders:
From net investment income .............. -
From net realized gain on
investment transactions .............. -
------------
Total distributions to shareholders ..... -
------------
Share transactions:
Proceeds from the sale of shares ........ 445,053
Reinvestment of distributions ........... -
Cost of shares redeemed ................. (236,751)
------------
Net increase in net assets from
share transactions ..................... 208,302
------------
Net increase in net assets ................ 224,035
Net assets beginning of period ............ -
------------
Net assets end of period .................. $ 224,035
============
Undistributed net investment income ....... $ 1,538
============
Financial Highlights
Period from
April 13,
1998* to
December 31,
1998
------------
Selected Per Share Data
Net asset value, beginning of period....... $ 10.00
------------
Income from operations:
Net investment income (c) ............... 0.07
Net realized and unrealized gain
on investments (c) ................... 0.29
------------
Total income from operations ............ 0.36
------------
Less distributions:
From net investment income .............. -
From net realized gain on
investment transactions .............. -
------------
Total distributions ..................... -
------------
Net increase ............................ 0.36
------------
Net asset value, end of period ............ $ 10.36
=============
Total Return (a) .......................... 3.60%
Ratios and Supplemental Data:
Net assets, end of period (in thousands) $ 224
Ratio of net operating expenses to
average net assets (b) .................. 0.20%
Ratio of net investment income to
average net assets (b) .................. 1.22%
Portfolio turnover ...................... 157.21%
- --------------------------------------------------------------------------------
* 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 period ended December 31, 1998.
(b) Annualized for the period ended December 31, 1998.
(c) The amount shown may not accord with the change in the aggregate gains and
losses of portfolio securities due to timing of sales, redemptions of
Series shares and receipt of dividends.
See notes to the financial statements.
<PAGE>
JNL/S&P CONSERVATIVE GROWTH SERIES I
SCHEDULE OF INVESTMENTS
December 31, 1998
<TABLE>
<CAPTION>
Market
Shares Value
------ -----
<S> <C> <C>
Investment Company Securities -- 100%
JNL Aggressive Growth Series.......................................................... 25,877 $571,373
JNL Global Equities Series ........................................................... 45,575 1,007,663
JNL/Alger Growth Series............................................................... 57,308 1,085,993
JNL/Eagle Core Equity Series ......................................................... 96,265 1,531,580
JNL/Putnam Value Equity Series ....................................................... 82,163 1,498,647
PPM America/JNL High Yield Bond Series ............................................... 86,904 946,386
PPM America/JNL Money Market Series .................................................. 473,740 473,740
Salomon Brothers/JNL Global Bond Series .............................................. 133,169 1,420,910
Salomon Brothers/JNL U.S. Government & Quality Bond Series............................ 85,944 958,277
T. Rowe Price/JNL Mid-Cap Growth Series .............................................. 26,087 532,950
--------------
Total Investments -- 100%
(cost $9,725,534) .................................................................... $10,027,519
==============
</TABLE>
JNL/S&P MODERATE GROWTH SERIES I
SCHEDULE OF INVESTMENTS
December 31, 1998
<TABLE>
<CAPTION>
Market
Shares Value
------ -----
<S> <C> <C>
Investment Company Securities -- 100%
JNL Aggressive Growth Series......................................................... 64,217 $1,417,912
JNL Global Equities Series ........................................................... 84,600 1,870,500
JNL/Alger Growth Series............................................................... 70,875 1,343,087
JNL/Eagle Core Equity Series ......................................................... 118,920 1,892,016
JNL/Putnam Value Equity Series........................................................ 101,441 1,850,291
PPM America/JNL High Yield Bond Series ............................................... 106,540 1,160,220
Salomon Brothers/JNL Global Bond Series .............................................. 109,326 1,166,513
Salomon Brothers/JNL U.S. Government & Quality Bond Series............................ 53,004 590,995
T. Rowe Price/JNL Mid-Cap Growth Series .............................................. 64,714 1,322,103
--------------
Total Investments -- 100%
(cost $11,824,958) ................................................................... $12,613,637
==============
</TABLE>
JNL/S&P AGGRESSIVE GROWTH SERIES I
SCHEDULE OF INVESTMENTS
December 31, 1998
<TABLE>
<CAPTION>
Market
Shares Value
------ -----
<S> <C> <C>
Investment Company Securities -- 100%
JNL Aggressive Growth Series ......................................................... 33,234 $733,802
JNL Global Equities Series ........................................................... 37,574 830,760
JNL/Alger Growth Series .............................................................. 36,764 696,678
JNL/Eagle Core Equity Series ......................................................... 54,693 870,170
JNL/Eagle SmallCap Equity Series ..................................................... 14,694 217,765
Salomon Brothers/JNL Global Bond Series .............................................. 38,046 405,955
T. Rowe Price/JNL Mid-Cap Growth Series .............................................. 32,823 670,578
--------------
Total Investments -- 100%
(cost $4,022,415) .................................................................... $4,425,708
==============
</TABLE>
See notes to the financial statements.
<PAGE>
JNL/S&P VERY AGGRESSIVE GROWTH SERIES I
SCHEDULE OF INVESTMENTS
December 31, 1998
<TABLE>
<CAPTION>
Market
Shares Value
------ -----
<S> <C> <C>
Investment Company Securities -- 100%
JNL Aggressive Growth Series ......................................................... 24,462 $540,124
JNL Global Equities Series ........................................................... 25,291 559,190
JNL/Alger Growth Series .............................................................. 33,201 629,163
JNL/Eagle Core Equity Series ......................................................... 14,780 235,156
JNL/Eagle SmallCap Equity Series...................................................... 15,722 233,007
JNL/Putnam Growth Series ............................................................. 5,378 123,040
T. Rowe Price/JNL Mid-Cap Growth Series............................................... 5,975 122,068
--------------
Total Investments -- 100%
(cost $2,211,104) .................................................................... $2,441,748
==============
</TABLE>
JNL/S&P EQUITY GROWTH SERIES I
SCHEDULE OF INVESTMENTS
December 31, 1998
<TABLE>
<CAPTION>
Market
Shares Value
------ -----
<S> <C> <C>
Investment Company Securities -- 100%
JNL Aggressive Growth Series.......................................................... 37,190 $821,164
JNL Global Equities Series ........................................................... 43,322 957,859
JNL/Alger Growth Series............................................................... 54,791 1,038,294
JNL/Eagle Core Equity Series ......................................................... 76,815 1,222,133
JNL/Eagle SmallCap Equity Series ..................................................... 32,974 488,679
T. Rowe Price/JNL Mid-Cap Growth Series .............................................. 24,827 507,209
--------------
Total Investments -- 100%
(cost $4,557,366) .................................................................... $5,035,338
==============
</TABLE>
JNL/S&P EQUITY AGGRESSIVE GROWTH SERIES I
SCHEDULE OF INVESTMENTS
December 31, 1998
<TABLE>
<CAPTION>
Market
Shares Value
------ -----
<S> <C> <C>
Investment Company Securities -- 100%
JNL Aggressive Growth Series ......................................................... 23,964 $529,121
JNL Global Equities Series ........................................................... 27,514 608,329
JNL/Alger Growth...................................................................... 43,977 833,367
JNL/Eagle Core Equity Series ......................................................... 39,409 626,994
JNL/Eagle SmallCap Equity Series ..................................................... 21,177 313,844
JNL/Putnam Growth Series ............................................................. 7,149 163,566
T. Rowe Price/JNL Mid-Cap Growth Series .............................................. 7,983 163,101
--------------
Total Investments -- 100%
(cost $2,913,308) .................................................................... $3,238,322
==============
</TABLE>
See notes to the financial statements.
<PAGE>
JNL/S&P CONSERVATIVE GROWTH SERIES II
SCHEDULE OF INVESTMENTS
December 31, 1998
<TABLE>
<CAPTION>
Market
Shares Value
------ -----
<S> <C> <C>
Investment Company Securities -- 100%
Goldman Sachs/JNL Growth & Income Series ............................................. 34,842 $313,574
JNL Aggressive Growth Series ......................................................... 3,404 75,165
JNL Global Equities Series ........................................................... 4,903 108,415
JNL/Alliance Growth Series............................................................ 11,951 158,714
JNL/PIMCO Total Return Bond Series ................................................... 34,668 352,230
Lazard/JNL Mid Cap Value Series ...................................................... 7,416 68,299
Salomon Brothers/JNL Balanced Series ................................................. 30,291 314,416
Salomon Brothers/JNL Global Bond Series .............................................. 19,505 208,120
Salomon Brothers/JNL High Yield Bond Series .......................................... 10,679 102,407
--------------
Total Investments -- 100%
(cost $1,636,407) .................................................................... $1,701,340
==============
</TABLE>
JNL/S&P MODERATE GROWTH SERIES II
SCHEDULE OF INVESTMENTS
December 31, 1998
<TABLE>
<CAPTION>
Market
Shares Value
------ -----
<S> <C> <C>
Investment Company Securities -- 100%
Goldman Sachs/JNL Growth & Income Series ............................................. 60,060 $540,538
JNL Aggressive Growth Series ......................................................... 14,716 324,939
JNL Global Equities Series ........................................................... 12,616 278,932
JNL/Alliance Growth Series ........................................................... 35,355 469,513
JNL/PIMCO Total Return Bond Series ................................................... 13,207 134,178
Lazard/JNL Mid Cap Value Series ...................................................... 30,941 284,967
Salomon Brothers/JNL Balanced Series ................................................. 53,523 555,567
Salomon Brothers/JNL Global Bond Series .............................................. 12,569 134,107
Salomon Brothers/JNL High Yield Bond Series .......................................... 13,901 133,313
--------------
Total Investments -- 100%
(cost $2,694,835) .................................................................... $2,856,054
==============
</TABLE>
JNL/S&P AGGRESSIVE GROWTH SERIES II
SCHEDULE OF INVESTMENTS
December 31, 1998
<TABLE>
<CAPTION>
Market
Shares Value
------ -----
<S> <C> <C>
Investment Company Securities -- 100%
Goldman Sachs/JNL Growth & Income Series ............................................. 5,628 $50,648
JNL Aggressive Growth Series ......................................................... 1,332 29,416
JNL Global Equities Series ........................................................... 1,159 25,627
JNL/Alliance Growth Series ........................................................... 4,261 56,589
Lazard/JNL Mid Cap Value Series ...................................................... 4,310 39,696
Lazard/JNL Small Cap Value Series .................................................... 2,966 25,803
Salomon Brothers/JNL Balanced Series ................................................. 2,536 26,326
Salomon Brothers/JNL Global Bond Series .............................................. 1,198 12,782
--------------
Total Investments -- 100%
(cost $255,710)....................................................................... $266,887
==============
</TABLE>
See notes to the financial statements.
<PAGE>
JNL/S&P VERY AGGRESSIVE GROWTH SERIES II
SCHEDULE OF INVESTMENTS
December 31, 1998
<TABLE>
<CAPTION>
Market
Shares Value
------ -----
<S> <C> <C>
Investment Company Securities -- 100%
Goldman Sachs/JNL Growth & Income Series ............................................. 780 $7,019
JNL Aggressive Growth Series ......................................................... 1,180 26,047
JNL Global Equities Series ........................................................... 1,284 28,379
JNL/Alliance Growth Series ........................................................... 3,735 49,596
Lazard/JNL Mid Cap Value Series ...................................................... 3,208 29,549
Lazard/JNL Small Cap Value Series .................................................... 1,623 14,117
--------------
Total Investments -- 100%
(cost $133,617) ...................................................................... $154,707
==============
</TABLE>
JNL/S&P EQUITY GROWTH SERIES II
SCHEDULE OF INVESTMENTS
December 31, 1998
<TABLE>
<CAPTION>
Market
Shares Value
------ -----
<S> <C> <C>
Investment Company Securities -- 100%
Goldman Sachs/JNL Growth & Income Series ............................................. 9,050 $81,448
JNL Aggressive Growth Series ......................................................... 4,588 101,312
JNL Global Equities Series ........................................................... 5,225 115,530
JNL/Alliance Growth Series ........................................................... 9,749 129,464
Lazard/JNL Mid Cap Value Series ...................................................... 12,572 115,789
Lazard/JNL Small Cap Value Series .................................................... 6,544 56,934
--------------
Total Investments -- 100%
(cost $536,781) ...................................................................... $600,477
==============
</TABLE>
JNL/S&P EQUITY AGGRESSIVE GROWTH SERIES II
SCHEDULE OF INVESTMENTS
December 31, 1998
<TABLE>
<CAPTION>
Market
Shares Value
------ -----
<S> <C> <C>
Investment Company Securities -- 100%
Goldman Sachs/JNL Growth & Income Series ............................................. 2,283 $20,545
JNL Aggressive Growth Series ......................................................... 1,718 37,932
JNL Global Equities Series ........................................................... 1,892 41,823
JNL/Alliance Growth Series ........................................................... 4,514 59,950
Lazard/JNL Mid Cap Value Series ...................................................... 4,686 43,156
Lazard/JNL Small Cap Value Series .................................................... 2,375 20,665
--------------
Total Investments -- 100%
(cost $204,578) ...................................................................... $224,071
==============
</TABLE>
See notes to the financial statements.
<PAGE>
GOLDMAN SACHS/JNL GROWTH & INCOME SERIES
GOLDMAN SACHS ASSET MANAGEMENT
GREG GIGLIOTTI, THOMAS S. PRICE,
[GOLDMAN SACHS LOGO] LAWRENCE S. SIBLEY, KARMA WILSON
OBJECTIVE:
Goldman Sachs/JNL Growth & Income Series seeks as its investment objective
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.
MONEY MANAGER COMMENTARY:
The year's positive momentum was inspired largely by the Federal Reserve Board's
successive rate cuts, which eased the credit crunch in capital markets and
relieved concerns about global financial conditions. Notably, gains for the
entire year were attributable to a narrow segment of the market; the top five
stocks in the S&P 500 Index ("Index") created 24% of the total return, and the
top fifty stocks accounted for 82% of the total return. Furthermore, the top
decile generated approximately 70% of the 1998 total return and mega-cap growth
stocks led the pack. The final results: the Index closed the year up an
impressive 28.58%, significantly outperforming smaller capitalization indices
such as the Russell Midcap Index, which was up only 10.1% for the same time
period.
Investors also favored growth versus value investing during most of the year,
with the S&P 500/BARRA Growth Index posting a 42.1% return at year-end versus
the S&P 500/BARRA Value Index, which returned only 13.8% for the same time
period.
The Series employs a value-oriented strategy that seeks long-term growth of
capital. This strategy, combined with our bias for mid-capitalization stocks,
detracted from performance during the year. However, performance was
attributable, to a greater extent, to stocks we did not own. Specifically, we
lost ground relative to the Index based on lack of participation in the enormous
gains of blue-chip computer software companies (the majority of their returns
ranged from 20%-60% for the quarter), multi-national consumer product companies
(returns ranged between 14%-58%) and mega-cap pharmaceutical companies and
electronic media stocks (except for two stocks, returns ranged between 17%-95%).
During the year, we increased the number of holdings in the portfolio from 34
holdings in May to 88 holdings at year-end. By broadening the portfolio
exposures, we diminished the size and number of industry bets and the
concentration of the largest holdings. We focused our new investments in
large-cap segments of the market (>$5 billion) and raised the median market cap
of the portfolio from $9 billion in May to $16 billion at year-end.
Since inception, the Series returned -9.31%, underperforming the S&P 500 Index
return of 18.61% during the same time period. The Series currently sells at a
significant discount relative to the Index, and we anticipate that our
discounted valuation investments should re-attract capital and drive returns to
more traditional levels. We believe that the steps we have taken to improve
diversification will provide returns more in line with the Index going forward.
In all environments, we perform rigorous, firsthand research into stocks which
trade at a discount to the market and their peers due to obscurity or
uncertainty. We aim to exploit anomalies by investigating what is undiscovered
or misunderstood by the marketplace. We firmly believe that our disciplined,
value-based approach has the potential to deliver strong returns to the
long-term investor.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
GOLDMAN SACHS/JNL GROWTH & INCOME SERIES AND THE S&P 500 INDEX
[GRAPHIC]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
03/02/98 $10,000.00 $10,000.00
03/31/98 $10,270.00 $10,550.84
04/30/98 $10,160.00 $10,646.86
05/31/98 $9,880.00 $10,446.70
06/30/98 $9,740.00 $10,858.30
07/31/98 $9,240.00 $10,742.97
08/31/98 $7,940.00 $9,191.22
09/30/98 $8,440.00 $9,780.05
10/31/98 $8,910.00 $10,574.83
11/30/98 $9,110.00 $11,215.52
12/31/98 $9,068.92 $11,861.40
TOTAL RETURN
FOR THE PERIOD
FROM MARCH 2, 1998* TO
DECEMBER 31, 1998 ... -9.31%
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT RETURN AND
PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY
BE MORE OR LESS THAN THEIR ORIGINAL COST.
PERFORMANCE NUMBERS ARE NET OF ALL SERIES OPERATING EXPENSES, BUT DO NOT REFLECT
THE DEDUCTION OF INSURANCE CHARGES.
- -------------
* Commencement of operations.
<PAGE>
JNL Series Trust
Goldman Sachs/JNL Growth & Income Series
<PAGE>
Statement of Assets and Liabilities
December 31, 1998
Assets
Investments in securities, at cost ........ $ 4,228,646
================
Investments in securities, at value ....... $ 4,315,162
Receivables:
Dividends and interest ................. 6,183
Investment securities sold ............. 5,693
----------------
Total assets .............................. 4,327,038
----------------
Liabilities
Payables:
Investment advisory fees ............... 3,258
Fund shares redeemed ................... 106
Other liabilities ......................... 12,920
----------------
Total liabilities ......................... 16,284
================
Net assets ................................ $ 4,310,754
================
Net assets consist of:
Paid-in capital ........................... $ 4,753,549
Undistributed net investment income ....... -
Accumulated net realized loss
on investments, future contracts,
and foreign currency related items ..... (529,317)
Net unrealized appreciation on:
Investments ............................ 86,516
Foreign currency related items ......... 6
================
Net assets ................................ $ 4,310,754
================
Total shares outstanding (no par
value), unlimited shares authorized ....... 479,039
================
Net asset value, offering and
redemption price per share................. $ 9.00
================
Statement of Operations
For the Period Ended December 31, 1998*
Investment income
Dividends .............................. $ 46,623
Interest ............................... 10,668
Foreign tax withholding ................ (319)
---------------
Total investment income ................... 56,972
---------------
Expenses
Investment advisory fees ............... 25,322
Custodian fees ......................... 14,204
Portfolio accounting fees .............. 13,984
Professional fees ...................... 4,363
Other .................................. 1,171
---------------
Total operating expenses .................. 59,044
Less:
Reimbursement from Adviser ............. (29,616)
---------------
Net expenses .............................. 29,428
---------------
Net investment income ..................... 27,544
---------------
Realized and unrealized gains (losses) Net realized loss on:
Investments ............................ (510,356)
Foreign currency related items ......... (10)
Futures contracts ...................... (18,962)
Net change in unrealized appreciation on:
Investments ............................ 86,516
Foreign currency related items ......... 6
---------------
Net realized and unrealized losses ........ (442,806)
---------------
Net decrease in net assets
from operations ........................ $ (415,262)
===============
- ----------------------------------------------------------
* For period beginning March 2, 1998 (commencement of
operations).
See notes to the financial statements.
<PAGE>
JNL Series Trust
Goldman Sachs/JNL Growth & Income Series
Statement of Changes in Net Assets
Period from
March 2,
1998* to
December 31,
1998
----------------
Operations:
Net investment income ..................... $ 27,544
Net realized loss on:
Investments ............................. (510,356)
Foreign currency related items .......... (10)
Futures contracts ....................... (18,962)
Net change in unrealized appreciation on:
Investments ............................. 86,516
Foreign currency related items .......... 6
----------
Net decrease in net assets from
operations .................................. (415,262)
----------
Distributions to shareholders:
From net investment income ................ (32,767)
From net realized gains on investment
transactions ........................... -
----------
Total distributions to shareholders ......... (32,767)
----------
Share transactions:
Proceeds from the sale of shares .......... 7,095,095
Reinvestment of distributions ............. 32,767
Cost of shares redeemed ................... (2,369,079)
----------
Net increase in net assets from share
transactions ............................. 4,758,783
----------
Net increase in net assets .................. 4,310,754
Net assets beginning of period .............. -
----------
Net assets end of period .................... $ 4,310,754
==========
Undistributed net investment income ......... $ -
==========
Financial Highlights
Period from
March 2,
1998* to
December 31,
1998
------------
Selected Per Share Data
Net asset value, beginning of period......... $ 10.00
------------
Income (loss) from operations:
Net investment income ..................... 0.07
Net realized and unrealized losses on
investments and foreign currency
related items .......................... (1.00)
------------
Total loss from operations .................. (0.93)
------------
Less distributions:
From net investment income ................ (0.07)
From net realized gains on investment
transactions ........................... -
------------
Total distributions ......................... (0.07)
------------
Net decrease ................................ (1.00)
------------
Net asset value, end of period .............. $ 9.00
============
Total Return (a) ............................ (9.31)%
Ratios and Supplemental Data:
Net assets, end of period (in
thousands) ................................ $ 4,311
Ratio of net operating expenses to
average net assets (b) (c) ................ 1.075%
Ratio of net investment income to
average net assets (b) (c) ................ 1.01%
Portfolio turnover ........................ 129.99%
Ratio information assuming no expense
reimbursement:
Ratio of net operating expenses to
average net assets (b) .................... 2.16%
Ratio of net investment loss to average
net assets (b) ......................... (0.08)%
- --------------------------------------------------------------------------------
* 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 period ended December 31, 1998.
(b) Annualized for the period ended December 31, 1998.
(c) Computed after giving effect to the Adviser's expense reimbursement.
See notes to the financial statements.
<PAGE>
GOLDMAN SACHS/JNL GROWTH & INCOME SERIES
SCHEDULE OF INVESTMENTS
December 31, 1998
Market
Shares Value
------ -----
Common Stocks -- 97.21%
Aerospace & Defense -- 3.97%
Boeing Co ....................... 800 $ 26,100
Lockheed Martin Corp. ........... 800 67,800
Raytheon Co. "A" ................ 1,500 77,531
-----------
171,431
Auto Manufacturer -- 3.70%
Ford Motor Co. .................. 500 29,344
General Motors Corp. ............ 1,200 85,875
Volvo AB - ADR .................. 1,900 44,294
-----------
159,513
Auto Parts & Equipment -- 3.06%
Federal-Mogul Corp. ............. 400 23,800
Goodyear Tire & Rubber Co. ...... 500 25,219
Lucasvarity Plc ................. 1,000 33,500
Magna International Inc. ........ 800 49,600
-----------
132,119
Banks -- 9.48%
BankAmerica Corp. ............... 1,600 96,200
Bank One Corp. .................. 2,000 102,125
Chase Manhattan Corp. ........... 900 61,256
First Union Corp. ............... 2,000 121,625
Wells Fargo Co. ................. 700 27,956
-----------
409,162
Chemicals -- 0.61%
E.I. du Pont de Nemours & Co. ... 500 26,531
Commercial Services -- 1.32%
Dun & Bradstreet Corp. .......... 1,800 56,812
Computers -- 1.64%
Compaq Computer Corp. ........... 600 25,162
Hewlett-Packard Co. ............. 400 27,325
International Business Machines
Corp. ........................... 100 18,475
-----------
70,962
Diversified Financial Services --
1.11%
CIT Group Inc. .................. 1,500 47,719
Electric -- 5.39%
Consolidated Edison Inc. ........ 500 26,437
Entergy Corp. ................... 1,700 52,912
Northeast Utilities (a) ......... 2,300 36,800
PacifiCorp. ..................... 2,600 54,762
Unicom Corp. .................... 1,600 61,700
-----------
232,611
Electronics -- 2.96%
Honeywell Inc. .................. 300 22,594
Hughes Electronics .............. 1,500 59,531
PG&E Corp. ...................... 800 25,200
Philips Electronics NV .......... 300 20,306
-----------
127,631
Market
Shares Value
------ -----
Common Stocks (continued)
Entertainment -- 0.76%
Mirage Resorts Inc.(a) .......... 2,200 $ 32,863
Environmental Control -- 2.14%
Browning-Ferris Industries Inc. . 2,100 59,719
Waste Management Inc. ........... 700 32,638
-----------
92,357
Food -- 2.65%
Archer-Daniels-Midland Co. ...... 3,500 60,156
ConAgra Inc. .................... 900 28,350
Ralston Purina Group ............ 800 25,900
-----------
114,406
Forest Products & Paper -- 1.36%
Georgia-Pacific Group ........... 1,000 58,562
Health Care -- 4.90%
Aluminum Co. of America ......... 400 29,825
Baxter International Inc. ....... 400 25,725
Columbia/HCA Healthcare Corp. ... 2,100 51,975
Johnson & Johnson Co. ........... 300 25,163
Tenet Healthcare Corp. (a) ...... 3,000 78,750
-----------
211,438
Home Builders -- 1.29%
Crown Cork & Seal Co. Inc. ...... 1,800 55,462
Household Products -- 0.58%
Unilever NV ..................... 300 24,881
Insurance -- 10.32%
Aetna Inc. ...................... 1,400 110,075
Allstate Corp. .................. 1,400 54,075
CIGNA Corp. ..................... 800 61,850
Hartford Financial Services
Group Inc. ...................... 1,300 71,338
Loews Corp. ..................... 1,000 98,250
Provident Co. ................... 1,200 49,800
-----------
445,388
Leisure Time -- 1.17%
Hasbro Inc. ..................... 1,400 50,575
Lodging -- 1.51%
Hilton Hotels Corp. ............. 3,400 65,025
Manufacturing -- 1.29%
Corning Inc. .................... 600 27,000
Minnesota Mining & Manufacturing
Co. ............................. 400 28,450
-----------
55,450
Media -- 4.18%
CBS Corp. (a) ................... 900 29,475
Gannett Co. Inc. ................ 400 25,800
MediaOne Group Inc. (a) ......... 600 28,200
New York Times Co. .............. 2,000 69,375
TCI Group (a) ................... 500 27,656
-----------
180,506
See notes to the financial statements.
<PAGE>
GOLDMAN SACHS/JNL GROWTH & INCOME SERIES
SCHEDULE OF INVESTMENTS (continued)
Market
Shares Value
------ -----
Common Stocks (continued)
Office & Business Equipment-- 0.55%
Xerox Corp. ..................... 200 $ 23,600
Oil & Gas Products -- 10.65%
Atlantic Richfield Co. .......... 1,300 84,825
Elf Aquitaine SA - ADR .......... 1,800 101,925
Exxon Corp. ..................... 300 21,937
Halliburton Co. ................. 1,500 44,438
Occidental Petroleum Corp. ...... 1,400 23,625
Royal Dutch Petroleum Co. ....... 1,800 86,175
Texaco Inc. ..................... 400 21,150
Tosco Corp. ..................... 1,200 31,050
Transocean Offshore Inc. ........ 1,000 26,813
USX-Marathon Group .............. 600 18,075
-----------
460,013
Pharmaceuticals -- 1.44%
American Home Products Corp. .... 600 33,787
Pharmacia & Upjohn Inc. ......... 500 28,313
-----------
62,100
Retail -- 5.61%
Dayton Hudson Corp. ............. 1,000 54,250
Federated Department Stores Inc.
(a) ............................. 1,100 47,919
Sears, Roebuck & Co. ............ 1,500 63,750
TJX Cos. Inc. ................... 1,000 29,000
Toys "R" Us Inc. (a) ............ 2,800 47,250
-----------
242,169
Semiconductors -- 0.55%
Intel Corp. ..................... 200 23,713
Software -- 2.06%
First Data Corp. ................ 2,800 88,725
Telecommunications-- 6.29%
ALLTEL Corp. .................... 200 11,963
AT&T Corp. ...................... 900 67,725
BCE Inc. ........................ 1,700 64,494
BellSouth Corp. ................. 600 29,925
GTE Corp. ....................... 1,000 65,000
US West Inc. .................... 500 32,313
-----------
271,420
Market
Shares Value
------ ------
Common Stocks (continued)
Tobacco -- 4.20%
Philip Morris Cos. Inc. ......... 2,500 $ 133,750
RJR Nabisco Holding Corp. ....... 1,600 47,500
-----------
181,250
Transportation -- 0.47%
Burlington Northern Santa Fe
Corp. ........................... 600 20,250
-----------
Total Common Stocks
(cost $4,108,128) ........... 4,194,644
-----------
Principal
Amount
------
Short Term Investments -- 2.79%
Money Market Fund -- 0.01%
SSgA Money Market Fund, 4.85%
(b) ............................. $ 518 518
Repurchase Agreement -- 2.78%
Repurchase agreement with State
Street Bank, 2.00%
(Collateralized by
$115,000 U.S. Treasury Note,
5.875%, due 02/15/2004,
market value $123,769),
acquired on 12/31/1998,
due 01/04/1999 ............... 120,000 120,000
-----------
Total Short Term Investments
(cost $120,518) ............. 120,518
-----------
Total Investments -- 100%
(cost $4,228,646) ............... $4,315,162
============
- --------------------------------------------------------------------------------
(a) Non-income producing security.
(b) Dividend yields change daily to reflect current market conditions. Rate is
the quoted yield as of December 31, 1998.
See notes to the financial statements.
<PAGE>
LAZARD/JNL SMALL CAP VALUE SERIES
LAZARD ASSET MANAGEMENT
HERBERT W. GULLQUIST
[LAZARD ASSET MANAGEMENT LOGO] EILEEN ALEXANDERSON
OBJECTIVE:
Lazard/JNL Small Cap Value Series is a non-diversified Series that seeks as its
investment objective 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.
MONEY MANAGER COMMENTARY:
Although the Russell 2000 Index lost ground in 1998, small caps rallied
impressively over the fourth quarter -- up over 30% since the October 8th
trough, with a 16.4% gain in the fourth quarter. Historically low valuations,
declining interest rates, sanguine earnings expectations, and positive flow
funds have set the stage for the current small cap rally. Although larger
capitalization equities still capture the bulk of investor attention and money
flows, strong earnings expectations for small cap companies have been the
catalyst for attracting new money into the asset class. Consumer confidence
remained robust in December, a sign that household spending, and by extension
overall economic growth, should remain strong in early 1999. And, with the
exception of energy, all sectors of the market generated positive returns over
the fourth quarter, with technology and healthcare producing the best absolute
gains.
Despite the current healthy environment, the collective faith of small cap
investors was severely challenged during 1998. The Russell 2000 Index was down
2.55% for the year, a drop that was especially notable when compared to the
large cap stocks, as measured by the S&P 500, which was up 28.58%. As the larger
stocks once again asserted their dominance throughout 1998, small cap investors
were able to take comfort in some of the merger and acquisition activity, as the
deep discounts that some small cap stocks are selling at has begun to be noticed
by strategic buyers. In fact, many of the stocks in the Series benefited from
such takeovers. Amidst the rapid shifts in the market during 1998, the Series
benefited from strong stock selection in the telecommunications and utilities
sectors, and was hurt by weak stock selections in the technology, health,
finance, and consumer services sectors.
During the last quarter, technology stocks, including Electronics for Imaging,
Lattice Semiconductor, and VLSI Technology, were among our best performing
stocks. Electronics for Imaging, which develops products and technologies that
enable digital color printing over computer networks, profited from robust
corporate demand, while semiconductor companies, including Lattice Semiconductor
and VLSI Technology, profited from strong PC-related and wireless end markets,
as well as from overall low inventory levels. Economically sensitive stocks,
like Omniquip International and Belden Inc., outperformed over the quarter as
fears of global recession subsided. Meanwhile, consumer discretionary stocks
were among both our best and worst performers over the quarter. First Brands
Corp., a consumer goods company (GLAD bags, Handiwipes, cat litter), benefited
from strong domestic sales, a favorable sales mix, and more normalized raw
material prices. The company's results were also driven by performance of its
acquirer, Clorox. Wet Seal and Talbots reported better-than-expected results as
sales levels returned to normal when the weather normalized and good
merchandising paid off. Cole National Corporation, however, a specialty retail
service company operating in both optical and gift businesses, suffered from
challenges at Pearle Vision, one of the company's optical retail operations.
Pearle's results have fallen short of expectations due, in part, to aggressive
store growth by competitors and changes in government reimbursement. Many of our
energy stocks, including Tuboscope Inc. and Vintage Petroleum, were victims of
plunging oil prices, which now hover at 12-year lows.
1998's turbulence brought many higher-priced stocks down to our valuation
levels. As well, amidst continuing volatility, heightened competition will
likely forge many new, interesting unions, making the selection of choice,
undervalued small cap companies a savvy investment decision. Looking forward,
1999 promises plenty of volatility, but with it, many opportunities.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
LAZARD/JNL SMALL CAP VALUE SERIES AND THE RUSSELL 2000 INDEX
[GRAPHIC]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
03/02/98 $10,000.00 $10,000.00
03/31/98 $10,350.00 $10,420.44
04/30/98 $10,360.00 $10,369.36
05/31/98 $9,820.00 $9,804.33
06/30/98 $9,640.00 $9,820.86
07/31/98 $8,860.00 $9,018.90
08/31/98 $7,340.00 $7,270.48
09/30/98 $7,480.00 $7,833.07
10/31/98 $7,960.00 $8,154.40
11/30/98 $8,370.00 $8,584.94
12/31/98 $8,707.85 $9,120.91
TOTAL RETURN
FOR THE PERIOD
FROM MARCH 2, 1998* TO
DECEMBER 31, 1998 ... -12.92%
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT RETURN AND
PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY
BE MORE OR LESS THAN THEIR ORIGINAL COST.
PERFORMANCE NUMBERS ARE NET OF ALL SERIES OPERATING EXPENSES, BUT DO NOT REFLECT
THE DEDUCTION OF INSURANCE CHARGES.
- -------------
* Commencement of operations.
<PAGE>
JNL Series Trust
Lazard/JNL Small Cap Value Series
Statement of Assets and Liabilities
December 31, 1998
Assets
Investments in securities, at cost ........ $ 5,329,580
================
Investments in securities, at value ....... $ 4,833,743
Dividends and interest receivable ......... 5,977
----------------
Total assets .............................. 4,839,720
----------------
Liabilities
Payables:
Investment advisory fees ............... 4,075
Fund shares redeemed ................... 19
Investment securities purchased ........ 17,872
Other liabilities ......................... 13,586
----------------
Total liabilities ......................... 35,552
================
Net assets ................................ $ 4,804,168
================
Net assets consist of:
Paid-in capital ........................... $ 5,438,256
Undistributed net investment income ....... 1,672
Accumulated net realized loss on
investments ............................... (139,923)
Net unrealized depreciation on
investments ............................... (495,837)
================
Net assets ................................ $ 4,804,168
================
Total shares outstanding (no par
value), unlimited shares authorized ......... 551,993
================
Net asset value, offering and
redemption price per share .................. $ 8.70
================
Statement of Operations
For the Period Ended December 31, 1998*
Investment income
Dividends .............................. $ 33,421
Interest ............................... 11,590
Foreign tax withholding ................ (98)
---------------
Total investment income ................... 44,913
---------------
Expenses
Investment advisory fees ............... 40,701
Custodian fees ......................... 12,998
Portfolio accounting fees .............. 13,984
Professional fees ...................... 4,413
Other .................................. 1,066
---------------
Total operating expenses .................. 73,162
Less:
Reimbursement from Adviser ............. (26,646)
---------------
Net expenses .............................. 46,516
---------------
Net investment loss ....................... (1,603)
---------------
Realized and unrealized losses
Net realized loss on investments .......... (139,923)
Net change in unrealized depreciation on
investments ............................ (495,837)
---------------
Net realized and unrealized losses ........ (635,760)
---------------
Net decrease in net assets
from operations ........................ $ (637,363)
===============
- ----------------------------------------------------------
* For period beginning March 2, 1998 (commencement of operations).
See notes to the financial statements.
<PAGE>
JNL Series Trust
Lazard/JNL Small Cap Value Series
Statement of Changes in Net Assets
Period from
March 2,
1998* to
December 31,
1998
----------------
Operations:
Net investment loss ....................... $ (1,603)
Net realized loss on investments .......... (139,923)
Net change in unrealized depreciation on
investments ............................. (495,837)
----------
Net decrease in net assets from ............. (637,363)
operations
----------
Distributions to shareholders:
From net investment income ................ -
From net realized gains on investment
transactions ............................ -
Return of capital ......................... (4,329)
----------
Total distributions to shareholders ......... (4,329)
----------
Share transactions:
Proceeds from the sale of shares .......... 5,554,767
Reinvestment of distributions ............. 4,329
Cost of shares redeemed ................... (113,236)
----------
Net increase in net assets from share
transactions .............................. 5,445,860
----------
Net increase in net assets .................. 4,804,168
Net assets beginning of period .............. -
----------
Net assets end of period .................... $ 4,804,168
==========
Undistributed net investment income ......... $ 1,672
==========
Financial Highlights
Period from
March 2,
1998* to
December 31,
1998
------------
Selected Per Share Data
Net asset value, beginning of period......... $ 10.00
------------
Loss from operations:
Net investment loss ....................... (0.01)
Net realized and unrealized loss
on investments .......................... (1.28)
------------
Total loss from operations .................. (1.29)
------------
Less distributions:
From net investment income ................ -
From net realized gains on investment
transactions ............................ -
Return of capital ......................... (0.01)
------------
Total distributions ......................... (0.01)
------------
Net decrease ................................ (1.30)
------------
Net asset value, end of period .............. $ 8.70
============
Total Return (a) ............................ (12.92)%
Ratios and Supplemental Data:
Net assets, end of period (in
thousands) ................................ $ 4,804
Ratio of net operating expenses to
average net assets (b) (c) .............. 1.20%
Ratio of net investment loss to
average net assets (b) (c) .............. (0.04)%
Portfolio turnover ........................ 40.15%
Ratio information assuming no expense
reimbursement:
Ratio of net operating expenses to
average net assets (b) .................... 1.89%
Ratio of net investment loss to
average net assets (b) .................. (0.73)%
- --------------------------------------------------------------------------------
* 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 period ended December 31, 1998.
(b) Annualized for the period ended December 31, 1998.
(c) Computed after giving effect to the Adviser's expense reimbursement.
See notes to the financial statements.
<PAGE>
LAZARD/JNL SMALL CAP VALUE SERIES
SCHEDULE OF INVESTMENTS
December 31, 1998
Market
Shares Value
------ -----
Common Stocks -- 98.61%
Apparel -- 0.74%
Stride Rite Corp. ................ 4,100 $ 35,875
Auto Parts & Equipment -- 3.74%
Borg-Warner Automotive Inc. ...... 1,200 66,975
Dura Automotive Systems Inc. (a) . 1,000 34,125
Tower Automotive Inc. (a) ........ 3,200 79,800
-----------
180,900
Banks -- 1.75%
HUBCO Inc. ....................... 2,033 61,244
Southwest Bancorporation (a) ..... 1,300 23,238
-----------
84,482
Building Materials -- 2.32%
Apogee Enterprises Inc. .......... 4,000 45,000
Hussmann International Inc. ...... 800 15,500
Lone Star Industries Inc. ........ 1,400 51,537
-----------
112,037
Chemicals -- 2.50%
A. Schulman Inc. ................. 1,900 43,106
Ferro Corp. ...................... 1,700 44,200
H B Fuller Co. ................... 700 33,687
-----------
120,993
Commercial Services -- 3.72%
Budget Group Inc. (a) ............ 2,800 44,450
CDI Corp. (a) .................... 1,500 30,281
Nielsen Media Research ........... 2,998 53,964
Pittston Brink's Group ........... 1,600 51,000
-----------
179,695
Computers -- 5.38%
Anixter International Inc. (a) ... 3,800 77,188
Bell & Howell Co. (a) ............ 2,000 75,625
Electronics for Imaging Inc. (a) . 1,500 60,281
Wang Laboratories Inc. (a) ....... 1,700 47,175
-----------
260,269
Distribution & Wholesale -- 0.51%
Unisource Worldwide Inc. ......... 3,400 24,650
Electric -- 2.12%
Calpine Corp. (a) ................ 2,100 53,025
Sierra Pacific Resources ......... 1,300 49,400
-----------
102,425
Electrical Components & Equipment--1.56%
Belden Inc. ...................... 2,200 46,612
Scotsman Industries Inc. ......... 1,400 28,788
-----------
75,400
Electronics -- 4.29%
Credence Systems Corp. (a) ....... 2,700 49,950
Flextronics International (a) .... 300 25,688
Kemet Corp. (a) .................. 4,000 45,000
Market
Shares Value
------ -----
Common Stocks (continued)
Electronics (continued)
Oak Industries Inc. .............. 1,200 $ 42,000
Watts Industries ................. 2,700 44,887
-----------
207,525
Food -- 3.33%
American Italian Pasta Co. (a) ... 1,500 39,562
International Multifoods Corp. ... 400 10,325
Lance Inc. ....................... 1,700 33,894
Ralcorp Holdings Inc. (a) ........ 1,100 20,075
Vlasic Foods International Inc.
(a) .............................. 2,400 57,150
-----------
161,006
Forest Products & Paper -- 0.70%
Chesapeake Corp. ................. 300 11,063
Wausau Mosinee Paper Corp. ....... 1,300 22,994
-----------
34,057
Hand & Machine Tools -- 0.95%
Regal-Beloit Corp. ............... 2,000 46,000
Health Care -- 6.69%
ADAC Labratories Inc. ............ 400 7,988
Apria Healthcare Group Inc. (a) .. 5,200 46,474
Integrated Health Services Inc. .. 1,400 19,775
Magellan Health Services (a) ..... 2,900 24,288
Oakley Inc. (a) .................. 3,900 36,806
Sierra Health Services Inc. (a) .. 3,150 66,347
Sun Healthcare Group Inc. (a) .... 2,500 16,406
Sunrise Medical Inc. (a) ......... 3,000 37,313
West Co. ......................... 1,900 67,806
-----------
323,203
Holding Companies - Diversified --
0.98%
Walter Industries Inc. (a) ....... 3,100 47,469
Home Builders -- 1.35%
Kaufman & Broad Home Corp. ....... 700 20,125
Toll Brothers (a) ................ 2,000 45,125
-----------
65,250
Home Furnishings -- 4.23%
Bassett Furniture Industries Inc. 1,800 43,424
Dorel Industries Inc. (a) ........ 1,800 29,025
Furniture Brands International
Inc. (a) ......................... 2,600 70,850
Harman International Industries
Inc. ............................. 1,600 61,000
-----------
204,299
Household Products -- 0.54%
Gibson Greetings Inc. ............ 2,200 26,125
Insurance -- 8.67%
Amerin Corp. (a) ................. 1,800 42,524
Delphi Financial Group Inc. ...... 414 21,709
E.W. Blanch Holdings Inc. ........ 1,300 61,669
Enhance Financial Services Group . 1,600 48,000
Frontier Insurance Group ......... 1,960 25,235
Gallagher, Arthur J. & Co. ....... 800 35,300
HCC Insurance Holdings Inc. ...... 2,300 40,538
See notes to the financial statements.
<PAGE>
LAZARD/JNL SMALL CAP VALUE SERIES
SCHEDULE OF INVESTMENTS (continued)
Market
Shares Value
------ -----
Common Stocks (continued)
Insurance (continued)
Horace Mann Educators Corp. ...... 1,000 $ 28,500
NAC RE Corp. ..................... 1,100 51,631
Orion Capital Corp. .............. 200 7,963
Reliance Group Holdings Inc. ..... 1,800 23,175
Scottish Annuity & Life Corp. (a) 2,400 33,000
-----------
419,244
Leisure Time -- 1.22%
Polaris Industries Inc. .......... 1,500 58,781
Lodging -- 0.66%
Prime Hospitality Corp. (a) ...... 3,000 31,688
Machinery -- 3.87%
Albany International Corp. ....... 10 194
Briggs & Stratton Corp. .......... 1,400 69,825
JLG Industries Inc. .............. 3,600 56,250
MagneTek Inc. (a) ................ 2,800 32,375
OmniQuip International Inc. ...... 1,900 28,500
-----------
187,144
Manufacturing -- 4.24%
ACX Technologies (a) ............. 2,100 27,824
Aeroquip-Vickers Inc. ............ 800 23,950
Crane Co. ........................ 2,250 67,922
Mark IV Industries ............... 3,900 50,700
Roper Industries ................. 1,700 34,638
-----------
205,034
Media -- 3.58%
Banta Corp. ...................... 2,400 65,700
Bowne & Co. Inc. ................. 4,300 76,863
World Color Press (a) ............ 1,000 30,438
-----------
173,001
Metals & Mining -- 0.36%
Wyman-Gordon Co. (a) ............. 1,700 17,425
Oil & Gas Producers -- 3.91%
Barrett Resources Corp. (a) ...... 2,400 57,600
Devon Energy Corp. ............... 1,500 46,031
Helmerich & Payne Inc. ........... 2,400 46,500
Tuboscope Inc. (a) ............... 1,600 13,000
Vintage Petroleum Inc. ........... 3,000 25,875
-----------
189,006
Packaging & Containers -- 2.28%
First Brands Corp. ............... 2,800 110,425
Pharmaceuticals -- 1.04%
Perrigo Co. (a) .................. 5,700 50,231
Real Estate -- 4.83%
Catellus Development Corp. (a) ... 2,400 34,350
Market
Shares Value
------ -----
Common Stocks (continued)
Real Estate (continued)
Chateau Communities Inc. ......... 1,200 $ 35,175
Felcor Lodging Trust Inc. ........ 1,700 39,206
Glenborough Realty Trust Inc. .... 2,100 42,788
JDN Realty Corp. ................. 300 6,469
Kilroy Realty Corp. .............. 1,800 41,400
Mack-Cali Realty Corp. ........... 1,100 33,962
-----------
233,350
Retail -- 7.17%
Cole National Corp. (a) .......... 1,600 27,400
Eagle Hardware & Garden (a) ...... 1,300 42,250
General Nutrition Cos. Inc. (a) .. 2,900 47,125
Hughes Supply Inc. ............... 1,200 35,100
Lone Star Steakhouse & Saloon
Inc. (a).......................... 3,700 33,994
Pier 1 Imports Inc. .............. 4,500 43,594
Ryan's Family Steak Houses Inc.
(a) .............................. 3,500 43,313
Talbots Inc. ..................... 1,300 40,788
Wet Seal Inc. (a) ................ 1,100 33,206
-----------
346,770
Savings & Loans -- 1.27%
Astoria Financial Corp. .......... 1,035 47,350
Staten Island Bancorp Inc. ....... 700 13,956
-----------
61,306
Semiconductors -- 3.35%
Lam Research Corp. (a) ........... 1,400 24,938
Lattice Semiconductor Corp. (a) .. 1,200 55,088
Silicon Valley Group Inc. (a) .... 2,200 28,050
VLSI Technology Inc. (a) ......... 4,900 53,594
-----------
161,670
Telecommunications -- 1.94%
Allen Telecom Inc. (a) ........... 5,500 36,781
Vanguard Cellular Systems Inc.
(a) .............................. 2,200 56,788
-----------
93,569
Transportation - 2.82%
Circle International Group Inc. .. 2,300 47,150
CNF Transportation Inc. .......... 1,600 60,100
Pittston BAX Group ............... 2,600 28,925
-----------
136,175
-----------
Total Common Stocks
(cost $5,262,316) ........... 4,766,479
-----------
Principal
Amount
------
Short Term Investments -- 1.39%
SSgA Money Market Fund, 4.85% (b) $ 67,264 67,264
-----------
Total Short Term Investments
(cost $67,264) .............. 67,264
-----------
Total Investments -- 100%
(cost $5,329,580) ............... $4,833,743
===========
- --------------------------------------------------------------------------------
(a) Non-income producing security.
(b) Dividend yields change daily to reflect current market conditions. Rate is
the quoted yield as of December 31, 1998.
See notes to the financial statments.
<PAGE>
LAZARD/JNL MID CAP VALUE SERIES
LAZARD ASSET MANAGEMENT
HERBERT W. GULLQUIST
[LAZARD ASSET MANAGEMENT LOGO] EILEEN ALEXANDERSON
OBJECTIVE:
Lazard/JNL Mid Cap Value Series is a non-diversified Series that seeks as its
investment objective 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.
MONEY MANAGER COMMENTARY:
After a volatile third quarter, mid cap indices rallied in the fourth quarter,
with the S&P Mid Cap Index outperforming both the S&P 500 Index and the Russell
2000 Index of small cap companies. The market's momentum was fueled by the
Federal Reserve's three interest-rate cuts, signs that the Asian financial
crisis may be turning a corner, surging merger and acquisition activity, the
resilience of the U.S. economy, and a rally among technology stocks. Markets
seemed impervious to the bombing of Iraq, the impeachment of President Clinton,
and numerous profit warnings. Consumer confidence remained robust in December, a
sign that household spending, and by extension overall economic growth, should
remain strong in early 1999. With the exception of energy, all sectors of the
mid cap market generated positive returns over the fourth quarter, with
technology producing the best absolute gains.
Despite the current healthy environment, mid cap stocks proved to be a less than
stellar asset class in 1998, with the Russell Midcap Index being up 10.10% for
the year, especially when compared to large cap stocks, as measured by the S&P
500 Index, which was up 28.58%. In the fourth quarter, the Russell Midcap Index
rebounded 18.44%, with a real divergence between value and growth that was due
largely to the mania for anything remotely connected to the Internet. Amidst the
rapid shifts in the market during 1998, the Series benefited from strong stock
selection in the consumer durables, producer manufacturing, and
telecommunications sectors, and was hurt by weak stock selections in the
consumer discretionary, health, technology, and process sectors.
Technology stocks, including Altera Corp., Advanced Micro Devices, and NCR
Corp., benefited from strong consumer and corporate demand and were among our
best performing stocks, especially over the fourth quarter. Consumer
discretionary stocks, including TJX Companies (T.J. Maxx and Marshalls), Circuit
City, and Saks Inc., also outperformed in the wake of better-than-expected
Christmas sales trends. Financial companies were among both our best and worst
performing stocks. Ambac Financial, Waddell & Reed, and Heller Financial
benefited from lower interest rates and a sense of greater international
stability. American Bankers Insurance Group and Union Planters, however,
underperformed over the quarter. Several of our energy holdings, including R&B
Falcon, Noble Affiliates, and Cooper Cameron, were victims of oil prices, which
now hover at 12-year lows. Some of our utility holdings, including Illinova
Corp. and Nipsco Industries, also underperformed as the market rallied.
1998's turbulence brought many higher-prices stocks down to our valuation
levels. As well, amidst continuing volatility, heightened competition will
likely forge many new, interesting unions, making the selection of choice,
undervalued mid cap companies a savvy investment decision. Looking forward, 1999
promises plenty of volatility, but with it, many opportunities.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
LAZARD/JNL MID CAP VALUE SERIES AND THE RUSSELL MIDCAP INDEX
[GRAPHIC]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
03/02/98 $10,000.00 $10,000.00
03/31/98 $10,420.00 $10,461.08
04/30/98 $10,410.00 $10,475.92
05/31/98 $9,880.00 $10,137.84
06/30/98 $9,670.00 $10,261.03
07/31/98 $9,000.00 $9,765.60
08/31/98 $7,460.00 $8,190.45
09/30/98 $7,890.00 $8,695.03
10/31/98 $8,300.00 $9,282.97
11/30/98 $8,790.00 $9,710.71
12/31/98 $9,235.56 $10,264.29
TOTAL RETURN
FOR THE PERIOD FROM
MARCH 2, 1998* TO
DECEMBER 31, 1998 ... -7.64%
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT RETURN AND
PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY
BE MORE OR LESS THAN THEIR ORIGINAL COST.
PERFORMANCE NUMBERS ARE NET OF ALL SERIES OPERATING EXPENSES, BUT DO NOT REFLECT
THE DEDUCTION OF INSURANCE CHARGES.
- ------------
* Commencement of operations.
<PAGE>
JNL Series Trust
Lazard/JNL Mid Cap Value Series
Statement of Assets and Liabilities
December 31, 1998
Assets
Investments in securities, at cost ........ $ 4,866,285
================
Investments in securities, at value ....... $ 4,816,974
Receivables:
Dividends and interest ................. 3,909
Foreign taxes recoverable .............. 1,231
----------------
Total assets .............................. 4,822,114
----------------
Liabilities
Payables:
Investment advisory fees ............... 3,657
Fund shares redeemed ................... 44
Investment securities purchased ........ 71,009
Other liabilities ......................... 16,188
----------------
Total liabilities ......................... 90,898
================
Net assets ................................ $ 4,731,216
================
Net assets consist of:
Paid-in capital ........................... $ 5,086,540
Undistributed net investment income ....... -
Accumulated net realized loss
on investments ......................... (306,013)
Net unrealized depreciation on
investments ............................... (49,311)
================
Net assets ................................ $ 4,731,216
================
Total shares outstanding (no par
value), unlimited shares authorized ....... 513,858
================
Net asset value, offering and
redemption price per share................. $ 9.21
================
Statement of Operations
For the Period Ended December 31, 1998*
Investment income
Dividends .............................. $ 44,179
Interest ............................... 8,096
Foreign tax withholding ................ (756)
---------------
Total investment income ................... 51,519
---------------
Expenses
Investment advisory fees ............... 34,250
Custodian fees ......................... 11,421
Portfolio accounting fees .............. 13,984
Professional fees ...................... 4,383
Other .................................. 936
---------------
Total operating expenses .................. 64,974
Less:
Reimbursement from Adviser ............. (25,455)
---------------
Net expenses .............................. 39,519
---------------
Net investment income ..................... 12,000
---------------
Realized and unrealized losses
Net realized loss on investments .......... (306,013)
Net change in unrealized depreciation
on investments ......................... (49,311)
---------------
Net realized and unrealized losses ........ (355,324)
---------------
Net decrease in net assets
from operations ........................ $ (343,324)
===============
- ----------------------------------------------------------
* For period beginning March 2, 1998 (commencement of operations).
See notes to the financial statements.
<PAGE>
JNL Series Trust
Lazard/JNL Mid Cap Value Series
Statement of Changes in Net Assets
Period from
March 2,
1998* to
December 31,
1998
----------------
Operations:
Net investment income ................... $ 12,000
Net realized loss on investments ........ (306,013)
Net change in unrealized depreciation
on investments ....................... (49,311)
----------
Net decrease in net assets from
operations ................................ (343,324)
----------
Distributions to shareholders:
From net investment income............... (13,099)
From net realized gains on
investment transactions .............. -
----------
Total distributions to shareholders ....... (13,099)
----------
Share transactions:
Proceeds from the sale of shares ........ 5,976,688
Reinvestment of distributions ........... 13,099
Cost of shares redeemed ................. (902,148)
----------
Net increase in net assets from
share transactions ..................... 5,087,639
----------
Net increase in net assets ................ 4,731,216
Net assets beginning of period ............ -
----------
Net assets end of period .................. $ 4,731,216
==========
Undistributed net investment income ....... $ -
==========
Financial Highlights
Period from
March 2,
1998* to
December 31,
1998
------------
Selected Per Share Data
Net asset value, beginning of period....... $ 10.00
------------
Loss from operations:
Net investment income ................... 0.03
Net realized and unrealized losses
on investments ....................... (0.79)
------------
Total loss from operations ................ (0.76)
------------
Less distributions:
From net investment income .............. (0.03)
From net realized gains on investment
transactions ......................... -
------------
Total distributions ....................... (0.03)
------------
Net decrease .............................. (0.79)
------------
Net asset value, end of period ............ $ 9.21
============
Total Return (a) .......................... (7.64)%
Ratios and Supplemental Data:
Net assets, end of period (in thousands) $ 4,731
Ratio of net operating expenses to
average net assets (b) (c) .............. 1.125%
Ratio of net investment income to average
net assets (b) (c) ................... 0.34%
Portfolio turnover ...................... 70.72%
Ratio information assuming no expense
reimbursement:
Ratio of net operating expenses to
average net assets (b) .................. 1.85%
Ratio of net investment loss to average
net assets (b) ....................... (0.38)%
- --------------------------------------------------------------------------------
* 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 period ended December 31, 1998.
(b) Annualized for the period ended December 31, 1998.
(c) Computed after giving effect to the Adviser's expense reimbursement.
See notes to the financial statements.
<PAGE>
LAZARD/JNL MID CAP VALUE SERIES
SCHEDULE OF INVESTMENTS
December 31, 1998
Market
Shares Value
------ -----
Common Stocks - 94.80%
Aerospace & Defense - 3.55%
Gulfstream Aerospace Corp.
(a) ............................. 1,500 $ 9,875
Litton Industries Inc. (a) ...... 1,400 91,350
--------------
171,225
Apparel - 2.84%
Polo Ralph Lauren Corp. (a) ..... 3,700 70,994
Warnaco Group Inc. .............. 2,600 65,650
--------------
136,644
Auto Parts & Equipment - 1.85%
Borg-Warner Automotive Inc. ..... 1,600 89,300
Banks - 5.54%
Hibernia Corp. .................. 4,200 72,975
North Fork Bancorporation 5,450 130,459
Inc..............................
Union Planters Corp. ............ 1,400 63,438
--------------
266,872
Building Materials - 1.19%
Johns Manville Corp. ............ 3,500 57,531
Commercial Services - 4.11%
Gartner Group Inc. (a) .......... 1,900 40,375
H&R Block Inc. .................. 1,800 81,000
Pittston Brink's Group ........ 2,400 76,500
--------------
197,875
Computers - 4.63%
Fore Systems Inc. (a) ........... 2,400 43,950
NCR Corp. (a) ................... 2,300 96,025
Quantum Corp. (a) ............... 3,900 82,875
--------------
222,850
Diversified Financial Services -
5.22%
CIT Group Inc. .................. 2,200 69,987
Heller Financial Inc. ........... 3,200 94,000
Waddell & Reed Financial
Inc. ............................ 3,700 87,644
--------------
251,631
Electric - 8.80%
Illinova Corp. .................. 3,500 87,500
IPALCO Enterprises Inc. ......... 2,200 121,962
Niagra Mohawk Power Corp.
(a) ............................. 6,700 108,038
NIPSCO Industries Inc. .......... 3,500 106,531
--------------
424,031
Energy Alternate Sources - 1.66%
CalEnergy Co. Inc. (a) .......... 2,300 79,781
Health Care - 1.73%
Mallinckrodt Inc. ............... 2,700 83,194
Home Builders - 2.15%
Lennar Corp. .................... 4,100 103,525
Market
Shares Value
------ -----
Common Stocks (continued)
Home Furnishings - 2.13%
Ethan Allen Interiors Inc. ..... 2,500 $ 102,500
Household Products - 1.50%
Dial Corp. ...................... 2,500 72,187
Insurance - 11.51%
Ace Ltd. ........................ 2,200 75,762
American Bankers Inc. ........... 2,200 106,425
AMBAC Financial Group Inc. .... 1,300 78,244
Everest Reinsurance 2,500 97,344
Holdings ...........................
HSB Group Inc. ................ 1,600 65,700
Old Republic International
Corp. .............................. 2,850 64,125
Reliance Group Holdings
Inc. ............................... 5,200 66,950
--------------
554,550
Iron & Steel - 1.06%
Carpenter Technology Corp. ...... 1,500 50,906
Machinery - 1.86%
Briggs & Stratton Corp. ......... 1,800 89,775
Manufacturing - 2.34%
Crane Co. ....................... 2,100 63,394
Mark IV Industries Inc. ......... 3,800 49,400
--------------
112,794
Media - 1.83%
King World Productions Inc. ..... 3,000 88,313
Oil & Gas Producers - 3.98%
Cooper Cameron Corp. (a) ........ 1,700 41,650
Enron Oil & Gas Co. ............. 4,100 70,725
Noble Affiliates Inc. ........... 2,100 51,713
R & B Falcon Corp. (a) ........ 3,600 27,450
--------------
191,538
Real Estate - 1.09%
Mack-Cali Realty Corp. ......... 1,700 52,487
Retail - 14.60%
Circuit City Stores ............. 2,400 119,850
Consolidated Stores Corp.
(a) ............................. 2,500 50,469
Ross Stores Inc. ................ 1,900 74,812
Saks Inc. (a) ................... 4,300 135,719
Tandy Corp. ..................... 2,700 111,206
TJX Cos. Inc. ................... 3,300 95,700
Tricon Global Restaurants
Inc. (a) ........................ 2,300 115,288
--------------
703,044
Savings & Loan - 1.69%
Sovereign Bancorp Inc. .......... 5,700 81,225
Semiconductors - 1.95%
Advanced Micro Devices Inc. ..... 2,400 69,450
Altera Corp. (a) ................ 400 24,350
--------------
93,800
See notes to the financial statements.
<PAGE>
LAZARD/JNL MID CAP VALUE SERIES
SCHEDULE OF INVESTMENTS (continued)
Market
Shares Value
------ -----
Common Stocks (continued)
Software - 1.06%
Auto Desk Inc. .................. 1,200 $ 51,225
Telecommunications - 2.59%
Cincinnati Bell Inc. ............ 3,300 124,781
Transportation - 2.34%
CNF Transportation Inc. ......... 3,000 112,688
------------
Total Common Stocks
(cost $4,615,583) ........... 4,566,272
------------
Principal Market
Amount Value
------ -----
Short Term Investments - 5.20%
Money Market Fund - 0.01%
SSgA Money Market Fund, 4.85%
(b) ............................ $ 702 $ 702
Repurchase Agreement - 5.19%
Repurchase agreement with State
Street Bank, 2.00%
(Collateralized by
$240,000 U.S. Treasury Note,
5.875%, due 02/15/2004,
market value $258,300)
acquired on 12/31/1998,
due 01/04/1999 .................. 250,000 250,000
------------
Total Short Term Investments
(cost $250,702) ............. 250,702
------------
Total Investments - 100%
(cost $4,866,285) ............... $ 4,816,974
=============
- --------------------------------------------------------------------------------
(a) Non-income producing security.
(b) Dividend yields change daily to reflect current market conditions. Rate is
quoted yield as of December 31, 1998.
See notes to the financial statements.
<PAGE>
PPM AMERICA/JNL BALANCED SERIES
PPM AMERICA, INC.
[PPM AMERICA LOGO] TEAM MANAGEMENT
OBJECTIVE:
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.
MONEY MANAGER COMMENTARY:
Despite a dip in the third quarter, the U.S. equity market produced another
extremely strong return in 1998. The stock market was driven primarily by the
"Nifty 50" segment of the market; i.e. by stocks of very large companies with
extremely high valuations. The U.S. fixed income market also posted positive
returns as interest rates fell during the year. The overall decline in interest
rates was driven by short-term interest rate reductions engineered by the
Federal Reserve and a flight to quality due to the deepening economic crisis in
the emerging markets.
The valuation of the broad market has become very expensive as a result of the
extremely strong market returns over the last few years (the Standard & Poor's
500 Stock Index produced its fourth consecutive 20+% annual return in 1998.)
There are also increasing signs of speculative excess in the stock market. We
use value-oriented strategies in managing the Series. As a result of the overall
market's unattractive level, we have maintained a fairly even allocation between
equity and fixed income securities.
The stock selection philosophy that guides the management of the equity
component of the Series is value-oriented. Therefore, even within an overall
market of stretched valuation, we remain committed to identifying attractively
priced sectors and securities. The equity portion of the Series' assets have a
lower-than-market price/ earnings ratio (compared to the S&P 500 Index) and a
higher-than-market dividend yield. The equity component is overweighted in
stocks of telecommunications, retail/apparel, financial, auto and transportation
companies. It is significantly underweighted in stocks of health care and
technology companies. The fixed income portion of the Series is managed with a
duration-neutral, relative value framework. With an interest rate risk profile
similar to the overall bond market, the fixed income portion of the Series was
overweighted (at year-end) in U.S. Government securities and high yield
corporate bonds and underweighted in investment grade corporate bonds.
The Series produced a return of 10.06% for 1998. This compares to 28.58% for the
S&P 500 Index and 8.69% for the Lehman Brothers Aggregate Bond Index.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
PPM AMERICA/JNL BALANCED SERIES, THE S&P 500 INDEX AND THE
LEHMAN BROTHERS AGGREGATE BOND INDEX
[GRAPHIC]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
5/15 $10,000 $10,000 $10,000
6/30 $10,210 $10,356 $10,210
9/30 $10,840 $11,179 $10,469
12/31/95 $11,545 $11,851 $10,915
3/31 $11,660 $12,487 $10,722
6/30 $11,983 $13,046 $10,404
9/30 $12,265 $13,448 $10,778
12/31/96 $12,792 $14,568 $11,102
3/31 $12,739 $14,958 $11,010
6/30 $13,984 $17,567 $11,415
9/30 $14,810 $18,882 $11,796
12/31/97 $15,104 $19,424 $12,143
3/31 $16,391 $22,134 $12,333
6/30 $16,345 $22,863 $12,619
9/30 $15,440 $20,593 $13,152
12/31/98 $16,674 $24,975 $13,197
AVERAGE ANNUAL
TOTAL RETURN
1 year.................. 10.06%
Since inception * ...... 15.10%
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT RETURN AND
PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY
BE MORE OR LESS THAN THEIR ORIGINAL COST.
PERFORMANCE NUMBERS ARE NET OF ALL SERIES OPERATING EXPENSES, BUT DO NOT REFLECT
THE DEDUCTION OF INSURANCE CHARGES.
- ------------
* Inception date May 15, 1995. 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.
<PAGE>
JNL Series Trust
PPM America/JNL Balanced Series
Statement of Assets and Liabilities
December 31, 1998
Assets
Investments in securities, at cost ........ $ 90,742,527
================
Investments in securities, at value ....... $ 95,264,080
Receivables:
Dividends and interest ................. 732,213
Foreign taxes recoverable .............. 2,878
Fund shares sold ....................... 76,533
Collateral for securities loaned .......... 19,171,566
----------------
Total assets .............................. 115,247,270
----------------
Liabilities
Payables:
Investment advisory fees ............... 58,133
Fund shares redeemed ................... 20,418
Return of collateral for securities
loaned .................................... 19,171,566
Other liabilities ......................... 23,390
----------------
Total liabilities ......................... 19,273,507
================
Net assets ................................ $ 95,973,763
================
Net assets consist of:
Paid-in capital ........................... $ 90,984,380
Undistributed net investment income ....... -
Accumulated net realized gain
on investments ......................... 467,830
Net unrealized appreciation on
investments ............................... 4,521,553
================
Net assets ................................ $ 95,973,763
================
Total shares outstanding (no par
value), unlimited shares authorized ....... 7,117,694
================
Net asset value, offering and
redemption price per share................. $ 13.48
================
Statement of Operations
For the Year Ended December 31, 1998
Investment income
Dividends .............................. $ 979,152
Interest ............................... 2,813,915
Foreign tax withholding ................ (281)
---------------
Total investment income ................... 3,792,786
---------------
Expenses
Investment advisory fees ............... 587,254
Custodian fees ......................... 27,912
Portfolio accounting fees .............. 24,614
Professional fees ...................... 24,925
Other .................................. 21,596
---------------
Total operating expenses .................. 686,301
Less:
Reimbursement from Adviser ............. -
---------------
Net expenses .............................. 686,301
---------------
Net investment income ..................... 3,106,485
---------------
Realized and unrealized gains
Net realized gain on investments .......... 3,117,578
Net change in unrealized appreciation
on investments ........................ 916,139
---------------
Net realized and unrealized gains ......... 4,033,717
---------------
Net increase in net assets
from operations ........................ $ 7,140,202
===============
See notes to the financial statements.
<PAGE>
JNL Series Trust
PPM America/JNL Balanced Series
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year ended December 31,
----------------------------------
1998 1997
---------------- ----------------
<S> <C> <C>
Operations:
Net investment income ............................................................... $ 3,106,485 $ 1,540,576
Net realized gain on investments .................................................... 3,117,578 2,477,967
Net change in unrealized appreciation on investments ................................ 916,139 2,991,325
---------------- ----------------
Net increase in net assets from operations ............................................ 7,140,202 7,009,868
---------------- ----------------
Distributions to shareholders:
From net investment income .......................................................... (3,117,738) (1,524,222)
From net realized gains on investment transactions .................................. (2,845,227) (2,918,420)
---------------- ----------------
Total distributions to shareholders ................................................... (5,962,965) (4,442,642)
---------------- ----------------
Share transactions:
Proceeds from the sale of shares .................................................... 41,271,571 33,426,507
Reinvestment of distributions ....................................................... 5,962,965 4,400,386
Cost of shares redeemed ............................................................. (12,132,501) (5,118,205)
---------------- ----------------
Net increase in net assets from share transactions .................................... 35,102,035 32,708,688
---------------- ----------------
Net increase in net assets ........................................................... 36,279,272 35,275,914
Net assets beginning of period ........................................................ 59,694,491 24,418,577
---------------- ----------------
Net assets end of period .............................................................. $ 95,973,763 $ 59,694,491
================ ================
Undistributed net investment income ................................................... $ - $ 11,253
================ ================
</TABLE>
See notes to the financial statements.
<PAGE>
JNL Series Trust
PPM America/JNL Balanced Series
Financial Highlights
<TABLE>
<CAPTION>
Period from Period from
April 1, May 15,
Year ended December 31, 1996 to 1995* to
------------------------------- December 31, March 31,
1998 1997 1996 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Selected Per Share Data
Net asset value, beginning of period .............................. $ 13.06 $ 11.92 $ 11.17 $ 10.00
--------------- --------------- --------------- ---------------
Income from operations:
Net investment income ........................................... 0.47 0.36 0.10 0.25
Net realized and unrealized gains on investments ............... 0.84 1.83 0.98 1.40
--------------- --------------- --------------- ---------------
Total income from operations ...................................... 1.31 2.19 1.08 1.65
--------------- --------------- --------------- ---------------
Less distributions:
From net investment income ...................................... (0.47) (0.36) (0.15) (0.19)
From net realized gains on investment transactions .............. (0.42) (0.69) (0.18) (0.29)
--------------- --------------- --------------- ---------------
Total distributions ............................................... (0.89) (1.05) (0.33) (0.48)
--------------- --------------- --------------- ---------------
Net increase ...................................................... 0.42 1.14 0.75 1.17
--------------- --------------- --------------- ---------------
Net asset value, end of period .................................... $ 13.48 $ 13.06 $ 11.92 $ 11.17
=============== =============== =============== ===============
Total Return (a) .................................................. 10.06% 18.43% 9.72% 16.60%
Ratios and Supplemental Data:
Net assets, end of period (in thousands) ........................ $ 95,974 $ 59,694 $ 24,419 $ 4,761
Ratio of net operating expenses to average net assets (b) (c) ... 0.85% 0.93% 1.04% 1.01%
Ratio of net investment income to average net assets (b) (c) .... 3.87% 3.72% 2.39% 2.99%
Portfolio turnover .............................................. 33.74% 160.88% 158.15% 115.84%
Ratio information assuming no expense reimbursement or
fees paid indirectly:
Ratio of net operating expenses to average net assets (b) ...... 0.85% 0.94% 1.22% 3.71%
Ratio of net investment income to average net assets (b) ....... 3.87% 3.71% 2.21% 0.29%
- ------------------------------------------------------------------------------------------------------------------------------------
</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 Adviser's expense reimbursement and
fees paid indirectly.
See notes to the financial statements.
<PAGE>
PPM AMERICA/JNL BALANCED SERIES
SCHEDULE OF INVESTMENTS
December 31, 1998
Market
Shares Value
------ -----
Common Stocks - 50.83%
Aerospace & Defense - 1.89%
Lockheed Martin Corp. ........... 9,300 $ 788,175
United Technologies Corp. ....... 9,300 1,011,375
-----------
1,799,550
Apparel - 2.23%
Jones Apparel Group Inc. (a) .... 22,000 485,375
Liz Claiborne Inc. .............. 19,600 618,625
VF Corp. ........................ 21,700 1,017,188
-----------
2,121,188
Auto Manufacturers - 2.00%
Ford Motor Co. .................. 15,000 880,312
General Motors Corp. ............ 14,400 1,030,500
-----------
1,910,812
Auto Parts & Equipment - 1.04%
TRW Inc. ........................ 17,600 988,900
Banks - 3.63%
BankAmerica Corp. ............... 16,100 968,012
Chase Manhattan Corp. ........... 16,000 1,089,000
KeyCorp ......................... 30,000 960,000
Union Planters Corp. ............ 9,700 439,531
-----------
3,456,543
Chemicals - 1.92%
Dow Chemical Co. ................ 10,200 927,563
Rohm & Haas Co. ................. 30,100 906,763
-----------
1,834,326
Computers - 1.66%
Adaptec Inc. (a) (d) ............ 35,500 623,469
International Business Machines
Corp. ........................... 5,200 960,700
-----------
1,584,169
Electric - 1.98%
FirstEnergy Corp. ............... 30,000 976,875
GPU Inc. ........................ 20,500 905,844
-----------
1,882,719
Electronics - 1.08%
Parker-Hannifin Corp. (d) ....... 31,400 1,028,350
Forest Products & Paper - 0.96%
Mead Corp. ...................... 31,200 914,550
Health Care - 1.07%
Columbia/HCA Healthcare Corp. ... 41,300 1,022,175
Insurance - 4.91%
Aetna Inc. ...................... 8,800 691,900
American Financial Group Inc. ... 15,200 666,900
American General Corp. (d) ...... 8,800 686,400
CIGNA Corp. ..................... 12,500 966,406
Hartford Financial Services
Group Inc. ...................... 17,900 982,263
Market
Shares Value
------ -----
Common Stocks (continued)
Insurance (continued)
TransAmerica Corp. .............. 5,900 $ 681,450
-----------
4,675,319
Iron & Steel - 1.02%
Nucor Corp. (d) ................. 22,500 973,125
Leisure Time - 1.41%
Brunswick Corp. ................. 30,500 754,875
Hasbro Inc. ..................... 16,300 588,838
-----------
1,343,713
Manufacturing - 3.54%
Cooper Industries Inc. .......... 15,900 758,231
ITT Industries Inc. ............. 19,000 755,250
PPG Industries Inc. (d) ......... 15,800 920,350
Tenneco Inc. .................... 27,700 943,531
-----------
3,377,362
Metals & Mining - 0.97%
Phelps Dodge Corp. (d) .......... 18,200 925,925
Office & Business Equipment - 1.04%
Harris Corp. .................... 27,000 988,875
Oil & Gas Producers - 3.47%
Ashland Inc. .................... 16,500 798,188
Chevron Corp. ................... 9,500 787,906
Occidental Petroleum Corp. ...... 50,600 853,875
Phillips Petroleum Co. .......... 20,300 865,287
-----------
3,305,256
Retail - 3.26%
Federated Department Stores Inc.
(a) (d) ......................... 23,700 1,032,431
Kmart Corp. (a) (d) ............. 73,600 1,127,000
Sears, Roebuck & Co. ............ 22,200 943,500
-----------
3,102,931
Savings & Loans - 2.08%
Charter One Financial Inc. ...... 33,535 930,596
Washington Mutual Inc. (d) ...... 27,500 1,050,156
-----------
1,980,752
Telecommunications - 5.77%
AT&T Corp. ...................... 11,200 842,800
Bell Atlantic Corp. ............. 17,000 901,000
GTE Corp. ....................... 14,500 942,500
SBC Communications Inc. ......... 20,300 1,088,588
Sprint Corp. .................... 8,700 731,887
US West Inc. .................... 15,400 995,225
-----------
5,502,000
Tobacco - 1.98%
Philip Morris Cos. Inc. ......... 17,500 936,250
RJR Nabisco Holdings Corp. ...... 31,900 947,031
-----------
1,883,281
See notes to the financial statements.
<PAGE>
PPM AMERICA/JNL BALANCED SERIES
SCHEDULE OF INVESTMENTS (continued)
Market
Shares Value
------ -----
Common Stocks (continued)
Transportation - 1.92%
Burlington Northern Santa Fe
Corp. ........................... 26,300 $ 887,625
CSX Corp. ....................... 22,600 937,900
-----------
1,825,525
-----------
Total Common Stocks
(cost $44,443,100) .......... 48,427,346
-----------
Principal
Amount
------
Corporate Bonds - 9.83%
Aerospace & Defense - 0.32%
K & F Industries Inc., 9.25%,
10/15/2007 ...................$ 300,000 303,000
Building Materials - 0.31%
Brand Scaffolding Services Inc.,
10.25%, 02/15/2008 ........... 300,000 296,857
Chemicals - 0.54%
Brunner Mond Group Plc, (144a)
11.00%, 07/15/2008 ........ 300,000 278,250
PCI Chemicals Canada Inc., 9.25%,
10/15/2007 ................... 300,000 234,000
-----------
512,250
Commercial Services - 0.66%
Rental Service Corp., 9.00%,
05/15/2008 ................... 300,000 298,125
Universal Compression Holdings,
Inc.,
(Step-Up Bond), 11.375%,
02/15/2009 (c) ............... 500,000 326,718
-----------
624,843
Computers - 0.20%
Seagate Technology Inc., 7.37%,
03/01/2007 .................. 200,000 193,690
Distribution & Wholesale - 0.31%
United Stationers Supply Inc.,
8.375%,
04/15/2008 ................... 300,000 299,250
Diversified Financial Services -
0.26%
PX Escrow Corp., (Step Up Bond),
9.625%, 02/01/2006 (c) ..... 450,000 248,625
Electronics - 0.31%
Hadco Corp., 9.50%, 06/15/2008 .. 300,000 297,000
Entertainment - 0.29%
MGM Grand Inc., 6.875%,
02/06/2008 ...................... 300,000 274,863
Forest Products & Paper - 0.02%
Buckeye Cellulose Corp., 9.25%,
09/15/2008 .................. 15,000 15,525
Principal Market
Amount Value
------ -----
Corporate Bonds (continued)
Holding Companies-Diversified -
0.60%
Elgar Holdings Inc. 9.875%,
02/01/2008 ...................$ 300,000 $ 275,250
Knology Holdings Inc., (Step-Up
Bond),
11.875%, 10/15/2007 (c) ...... 600,000 295,500
-----------
570,750
Home Builders - 0.31%
D.R. Horton Inc., 8.375%,
06/15/2004 ...................... 300,000 297,000
Home Furnishings - 0.30%
Windmere-Durable Holdings,
10.00%,
07/31/2008 ................... 300,000 281,250
Leisure Time - 0.30%
Royal Caribbean Cruises Ltd.,
7.50%,
10/15/2027 ................... 300,000 288,822
Manufacturing - 0.31%
Burke Industries Inc., 10.00%,
08/15/2007 ................. 300,000 291,000
Media - 1.14%
Capstar Broadcasting Corp.,
(Step-Up Bond), 12.75%, 02/01/2009
(c) ................................ 500,000 410,000
Century Communications Corp.,
9.50%, 08/15/2000 ........... 250,000 261,875
Frontier Vision Holdings LP,
(Step-Up Bond), 11.875%
09/15/2007 (c) ............ 500,000 417,500
-----------
1,089,375
Metals & Mining - 0.31%
Wyman-Gordon Co., 8.00%,
12/15/2007 ...................... 300,000 297,750
Oil & Gas Producers - 0.24%
Pogo Producing Co., 8.75%,
05/15/2007....................... 250,000 231,250
Packaging & Containers - 0.95%
Riverwood International Corp.,
10.625%,
08/01/2007 .................. 300,000 299,250
Stone Container Corp., 12.25%,
04/01/2002 ................... 300,000 300,000
U.S. Can Corp., 10.125%,
10/15/2006 ...................... 300,000 309,000
-----------
908,250
Retail - 0.87%
Eye Care Centers of America
Inc., (144a), 9.125%,
05/01/2008 ...................... 300,000 288,000
Finlay Fine Jewelry Corp.,
8.375%,
05/01/2008 ................... 300,000 275,250
Specialty Retailers Inc., 8.50%,
07/15/2005 ................... 300,000 261,000
-----------
824,250
See notes to the financial statements.
<PAGE>
PPM AMERICA/JNL BALANCED SERIES
SCHEDULE OF INVESTMENTS (continued)
Principal Market
Amount Value
------ -----
Corporate Bonds (continued)
Telecommunications - 0.68%
Metronet Communications Corp.,
12.00%, 08/15/2007 ........... $ 300,000 4 333,000
Rogers Cantel Mobile Inc.,
9.375%,
06/01/2008 ................. 300,000 316,500
-----------
649,500
Transportation - 0.60%
Gulfmark Offshore Inc., 8.75%
06/01/2008 .................. 300,000 292,500
Ultrapetrol Ltd, 10.50%,
04/01/2008 ...................... 300,000 281,250
-----------
573,750
-----------
Total Corporate Bonds
(cost $9,747,771) ........... 9,368,850
-----------
U.S. Government Securities - 39.34%
U.S. Government Agencies - 15.40%
Federal Home Loan Mortgage Corp.
6.50%, 05/01/2001 .............. 453,306 455,259
6.00%, 07/01/2001 .............. 373,551 373,692
7.50%, 11/01/2011 .............. 762,797 784,247
6.50%, 04/01/2012 .............. 662,124 671,844
7.00%, 01/01/2013 .............. 880,744 899,776
8.00%, 10/01/2024 .............. 570,652 591,869
7.50%, 11/01/2024 .............. 740,739 760,872
6.50%, 02/01/2027 .............. 424,318 427,364
7.50%, 03/01/2027 .............. 544,280 558,942
6.50%, 12/01/2027 .............. 484,401 488,024
7.00%, 09/01/2028 .............. 602,712 614,386
7.00%, 11/01/2028 .............. 544,595 555,146
Federal National Mortgage
Association
7.50%, 04/01/2012 ............ 548,508 564,239
6.50%, 08/01/2028 ............ 746,830 751,729
7.00%, 08/01/2028 ............ 441,922 450,760
7.00%, 08/01/2028 ............ 747,891 762,849
6.50%, 10/01/2028 ............ 499,161 502,435
6.50%, 12/01/2028 ............ 599,772 603,707
Government National Mortgage
Association
7.00%, 09/15/2013 .............. 494,856 507,069
6.50%, 04/15/2026 .............. 1,004,176 1,014,529
7.50%, 07/15/2027 .............. 446,898 460,783
8.00%, 02/15/2028 .............. 645,517 670,931
7.00%, 05/15/2028 .............. 447,861 458,215
7.00%, 06/15/2028 .............. 719,148 735,775
-----------
14,664,442
Principal Market
Amount Value
------ -----
U.S. Government Securities
(continued)
U.S. Treasury Bonds - 5.41%
U.S. Treasury Bonds
6.25%, 08/15/2023 (d) ..........$3,000,000 3,352,980
6.625%, 02/15/2027 (d) ......... 200,000 236,562
U.S. Treasury Strips - Principal
only
5.735%, 05/15/2016 ............. 600,000 231,354
5.77%, 11/15/2016 .............. 1,950,000 728,364
5.72%, 11/15/2024 (d) .......... 1,300,000 322,751
U.S. Treasury Strip - Interest
Only
5.785%, 11/15/2017 ............. 800,000 281,496
-----------
5,153,507
U.S. Treasury Notes - 18.53%
6.375%, 01/15/1999 (d) ......... 650,000 650,306
6.875%, 07/31/1999 (d) ......... 1,700,000 1,720,979
6.125%, 07/31/2000 ............. 1,000,000 1,022,030
6.25%, 08/31/2000 (d) ........ 2,200,000 2,255,683
6.125%, 09/30/2000 (d) ......... 1,565,000 1,603,389
6.25%, 10/31/2001 (d) ......... 3,600,000 3,750,733
6.25%, 02/15/2003 ............ 1,300,000 1,374,750
5.50%, 02/28/2003 (d) ........ 2,240,000 2,307,558
5.875%, 11/15/2005 (d) ......... 1,725,000 1,840,092
5.625%, 05/15/2008 (d) ......... 1,050,000 1,120,382
-----------
17,645,902
-----------
Total U.S. Government
Securities
(cost $36,549,732) .......... 37,463,851
-----------
Warrants - 0.00%
Holding Companies-Diversified -
0.00%
Knology Holdings Inc. ........... 600 1,203
Telecommunications - 0.00%
Metronet Communications Corp. ... 300 1,050
-----------
Total Warrants
(cost $144) ................. 2,253
-----------
Short Term Investments - 0.00%
Money Market Fund - 0.00%
SSgA Money Market Fund, 4.85%
(b) ............................. 1,780 1,780
-----------
Total Short Term Investments
(cost $1,780) ............... 1,780
-----------
Total Investments - 100%
(cost $90,742,527) ............. $95,264,080
===========
- --------------------------------------------------------------------------------
(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, 1998.
(c) Denotes deferred interest security that receives no current coupon payments
until a predetermined date at which time the stated coupon rate becomes
effective.
(d) All or a portion of this security has been loaned.
See notes to the financial statements.
<PAGE>
PPM AMERICA/JNL HIGH YIELD BOND SERIES
PPM AMERICA, INC.
[PPM AMERICA LOGO] TEAM MANAGEMENT
OBJECTIVE:
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.
MONEY MANAGER COMMENTARY:
The U.S. high yield market, as measured by the Lehman Brothers High Yield Index,
returned 1.87% in 1998, a performance which lagged all other domestic
fixed-income classes and broke its two-year string of outperformance.
Higher-grade tiers of the bond market outperformed, reversing previous trends,
as interest rates fell around 100 basis points across the yield curve. High
yield outperformed in the period through July as stable interest rates, a
healthy economy, low default rates, and strong investor demand carried over from
1997. In August, however, the deepening economic crises in Asia and Russia began
to pose a realistic risk of global recession. The market fell 5.52% that month,
its worst loss since September 1990, amid a flight to quality which was
compounded by selling from some mutual funds and hedge funds. A recovery was
sparked in September when the Federal Reserve began to cut interest rates and
the G-7 funded a loan package to help stabilize emerging markets. In fact,
November's gain of 5.15% was one of the index's best performances ever, but not
enough to offset the summer's losses. Despite the turmoil, however, the high
yield market continued to grow at a rapid rate in 1998. New issue volume reached
record levels for the second year in a row as the principal amount of new bonds
issued jumped 18.7% to $141 billion.
Our approach to managing the Series is based on relative value. We focus on
purchasing individual securities which are attractively priced and have the
potential to outperform the benchmark, within the context of industry weightings
which are derived from the same factors. In 1998, this approach lead to an
approximately neutral weighting of double-B versus single-B credits, but
security and industry selection were generally defensive, particularly in the
third quarter.
The Series finished 1998 with a total return of 3.84%, outperforming the Lehman
Brothers High Yield Index by 197 basis points. The Lipper High Yield Universe
lost 0.44% and the Morningstar High Yield Index lost 0.42% in 1998, so the
Series also strongly outperformed them by 428 and 426 basis points,
respectively. The Series' performance advantage was primarily attributable to
security selection as well as favorable industry and asset-class allocations.
We expect the high yield market to perform closer to historical averages in 1999
since the fundamental underpinnings of a growing economy, low interest rates,
and low default rates appear to remain in place. The Lehman Brothers High Yield
Index has returned an annual average 13.05% over the last 15 years. Major risks
include the possibility of a recession, although the U.S. economy looks quite
strong at the moment, and further effects from economic crises abroad.
Additionally, single-B and lower-rated credits (including unrated) have
accounted for more than 2/3 of new issue flow for three years in a row. While
the highest returns often come from the lower quality tiers, this mix is also
changing the market's risk profile and will undoubtedly have an impact on future
performance.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
PPM AMERICA/JNL HIGH YIELD BOND SERIES AND THE LEHMAN BROTHERS HIGH YIELD INDEX
[GRAPHIC]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
5/15 $10,000 $10,000
6/30 $9,930 $10,207
9/30 $10,230 $10,493
12/31/95 $10,624 $10,818
3/31 $10,782 $11,009
6/30 $10,888 $11,192
9/30 $11,425 $11,639
12/31/96 $11,994 $12,046
3/31 $12,107 $12,181
6/30 $12,792 $12,747
9/30 $13,523 $13,326
12/31/97 $13,800 $13,670
3/31 $14,389 $14,130
6/30 $14,509 $14,277
9/30 $13,848 $13,628
12/31/98 $14,329 $13,918
AVERAGE ANNUAL
TOTAL RETURN
1 year .................. 3.84%
Since inception * ...... 10.40%
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT RETURN AND
PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY
BE MORE OR LESS THAN THEIR ORIGINAL COST.
PERFORMANCE NUMBERS ARE NET OF ALL SERIES OPERATING EXPENSES, BUT DO NOT REFLECT
THE DEDUCTION CHARGES.
- ------------
* Inception date May 15, 1995.
<PAGE>
JNL Series Trust
PPM America/JNL High Yield Bond Series
Statement of Assets and Liabilities
December 31, 1998
Assets
Investments in securities, at cost ........ $ 103,266,629
================
Investments in securities, at value ....... $ 99,416,325
Receivables:
Dividends and interest ................. 2,084,340
Foreign taxes recoverable .............. 19,189
Fund shares sold ....................... 64,072
Collateral for securities loaned .......... 12,481,995
----------------
Total assets .............................. 114,065,921
----------------
Liabilities
Payables:
Investment advisory fees ............... 61,723
Fund shares redeemed ................... 16,046
Return of collateral for securities
loaned .................................... 12,481,995
Other liabilities ......................... 20,902
----------------
Total liabilities ......................... 12,580,666
================
Net assets ................................ $ 101,485,255
================
Net assets consist of:
Paid-in capital ........................... $ 105,637,022
Undistributed net investment income ....... -
Accumulated net realized loss
on investments ......................... (301,463)
Net unrealized depreciation on
investments ............................... (3,850,304)
================
Net assets ................................ $ 101,485,255
================
Total shares outstanding (no par
value), unlimited shares authorized ....... 9,317,185
================
Net asset value, offering and
redemption price per share................. $ 10.89
================
Statement of Operations
For the Year Ended December 31, 1998
Investment income
Dividends .............................. $ 60,285
Interest ............................... 8,389,955
---------------
Total investment income ................... 8,450,240
---------------
Expenses
Investment advisory fees ............... 651,122
Custodian fees ......................... 20,623
Portfolio accounting fees .............. 24,591
Professional fees ...................... 24,773
Other................................... 22,566
---------------
Total operating expenses .................. 743,675
Less:
Reimbursement from Adviser ............. -
---------------
Net expenses .............................. 743,675
---------------
Net investment income ..................... 7,706,565
---------------
Realized and unrealized gains (losses)
Net realized gain on investments .......... 538,153
Net change in unrealized depreciation
on investments ......................... (5,619,538)
---------------
Net realized and unrealized losses ........ (5,081,385)
---------------
Net increase in net assets
from operations ........................ $ 2,625,180
===============
See notes to the financial statements.
<PAGE>
JNL Series Trust
PPM America/JNL High Yield Bond Series
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year ended December 31,
----------------------------------
1998 1997
---------------- ----------------
<S> <C> <C>
Operations:
Net investment income ............................................................. $ 7,706,565 $ 3,007,939
Net realized gain on investments .................................................. 538,153 1,066,669
Net change in unrealized appreciation (depreciation) on investments ............... (5,619,538) 1,355,284
---------------- ----------------
Net increase in net assets from operations .......................................... 2,625,180 5,429,892
---------------- ----------------
Distributions to shareholders:
From net investment income ........................................................ (7,729,402) (3,009,722)
From net realized gains on investment transactions ................................ (1,038,904) (1,036,946)
---------------- ----------------
Total distributions to shareholders ................................................. (8,768,306) (4,046,668)
---------------- ----------------
Share transactions:
Proceeds from the sale of shares .................................................. 63,833,968 51,335,721
Reinvestment of distributions ..................................................... 8,768,306 4,011,473
Cost of shares redeemed ........................................................... (27,685,557) (7,415,150)
---------------- ----------------
Net increase in net assets from share transactions .................................. 44,916,717 47,932,044
---------------- ----------------
Net increase in net assets .......................................................... 38,773,591 49,315,268
Net assets beginning of period ...................................................... 62,711,664 13,396,396
---------------- ----------------
Net assets end of period ............................................................ $ 101,485,255 $ 62,711,664
================ ================
Undistributed net investment income ................................................. $ - $ 4,258
================ ================
</TABLE>
See notes to the financial statements.
<PAGE>
JNL Series Trust
PPM America/JNL High Yield Bond Series
Financial Highlights
<TABLE>
<CAPTION>
Period from Period from
April 1, May 15,
Year ended December 31, 1996 to 1995* to
------------------------------- December 31, March 31,
1998 1997 1996 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Selected Per Share Data
Net asset value, beginning of period ............................ $ 11.48 $ 10.67 $ 10.23 $ 10.00
--------------- --------------- --------------- ---------------
Income from investment operations:
Net investment income ......................................... 0.91 0.59 0.51 0.73
Net realized and unrealized gains (losses) on investments ..... (0.47) 1.02 0.64 0.04
--------------- --------------- --------------- ---------------
Total income from investment operations ......................... 0.44 1.61 1.15 0.77
--------------- --------------- --------------- ---------------
Less distributions:
From net investment income .................................... (0.91) (0.59) (0.69) (0.54)
From net realized gains on investment transactions ............ (0.12) (0.21) (0.02) -
--------------- --------------- --------------- ---------------
Total distributions ............................................. (1.03) (0.80) (0.71) (0.54)
--------------- --------------- --------------- ---------------
Net increase (decrease) ......................................... (0.59) 0.81 0.44 0.23
--------------- --------------- --------------- ---------------
Net asset value, end of period .................................. $ 10.89 $ 11.48 $ 10.67 $ 10.23
=============== =============== =============== ===============
Total Return (a) ................................................ 3.84% 15.05% 11.24% 7.82%
Ratios and Supplemental Data:
Net assets, end of period (in thousands) ...................... $ 101,485 $ 62,712 $ 13,396 $ 6,156
Ratio of net operating expenses to average net assets (b) (c) . 0.83% 0.90% 0.88% 0.88%
Ratio of net investment income to average net assets (b) (c) .. 8.62% 8.15% 8.64% 8.34%
Portfolio turnover ............................................ 129.85% 189.25% 113.08% 186.21%
Ratio information assuming no expense reimbursement or
fees paid indirectly:
Ratio of net operating expenses to average net assets (b) ..... 0.83% 0.90% 1.21% 1.50%
Ratio of net investment income to average net assets (b) ...... 8.62% 8.15% 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 Adviser's expense reimbursement and
fees paid indirectly.
See notes to the financial statements.
<PAGE>
PPM AMERICA/JNL HIGH YIELD BOND SERIES
SCHEDULE OF INVESTMENTS
December 31, 1998
Principal Market
Amount Value
------ -----
Corporate Bonds - 96.50%
Aerospace & Defense - 1.12%
K&F Industries Inc., 9.25%,
10/15/2007 (d) ...............$1,100,000 $1,111,000
Apparel - 1.44%
Pillowtex Corp., 10.00%,
11/15/2006 ...................... 1,330,000 1,436,400
Building Materials - 4.06%
Brand Scaffold Services Inc.,
10.25%,
02/15/2008 ................. 2,000,000 1,970,000
Nortek Inc., 9.25%, 03/15/2007 .. 2,000,000 2,070,000
---------
4,040,000
Chemicals - 3.41%
Brunner Mond Group Plc., (144a),
11.00%, 07/15/2008 ........... 2,000,000 1,855,000
PCI Chemicals Canada Inc., 9.25%,
10/15/2007 ................... 1,965,000 1,532,700
---------
3,387,700
Commercial Services - 3.12%
Flag Ltd., 8.25%, 01/30/2008 .... 2,000,000 1,960,000
Universal Compression Holdings
Inc.,
(Step-Up Bond), 11.375%,
02/15/2009 (a) ............... 1,750,000 1,143,513
---------
3,103,513
Cosmetics & Personal Care - 1.04%
Chattem Inc., 8.875%, 04/01/2008
(d) ............................. 1,000,000 1,030,000
Diversified Financial Services -
1.38%
DVI Inc., 9.875%, 02/01/2004 .... 1,000,000 960,000
PX Escrow Corp., (Step-Up Bond),
9.625%, 02/01/2006 (a) ....... 750,000 414,375
---------
1,374,375
Electrical Components & Equipment -1.94%
Communications Instruments Inc.,
10.00%, 09/15/2004 ........... 2,000,000 1,925,000
Electronics - 1.99%
Hadco Corp., 9.50%, 06/15/2008 .. 2,000,000 1,980,000
Engineering & Construction - 1.75%
Schuff Steel Co., 10.50%,
06/01/2008 ...................... 2,000,000 1,740,000
Entertainment - 5.54%
Harrahs Operating Co. Inc.,
7.875%,
12/15/2005 (d) ............... 2,000,000 2,000,000
Harvey Casinos Resorts, 10.625%,
06/01/2006 ................... 200,000 216,000
Sun International Hotels Ltd.,
9.00%, 03/15/2007 ............ 500,000 520,000
8.625%, 12/15/2007 ........... 1,300,000 1,332,500
United Artists Theatre Circuit
Inc.,
9.75%, 04/15/2008 ............ 1,500,000 1,440,000
---------
5,508,500
Principal Market
Amount Value
------ -----
Corporate Bonds (continued)
Environmental Control - 2.62%
Marsulex Inc., 9.625%,
07/01/2008$....... ..............$2,000,000 2,047,500
Norcal Waste Systems Inc.,
13.50%,
11/15/2005 ................... 500,000 555,000
---------
2,602,500
Food - 2.05%
Agrilink Foods Inc., (144a),
11.875%,
11/01/2008 ................... 2,000,000 2,035,000
Holding Companies-Diversified -
3.06%
Elgar Holdings Inc., 9.875%,
02/01/2008 ................... 2,400,000 2,202,000
Knology Holdings Inc., (Step-Up
Bond),
11.875%, 10/15/2007 (a) ...... 1,700,000 837,250
---------
3,039,250
Home Furnishings - 2.26%
Windmere-Durable Holdings, 10.00%
07/31/2008 ................... 2,400,000 2,250,000
Iron & Steel - 1.01%
Armco Inc., (144a), 8.875%,
12/01/2008 ...................... 1,000,000 1,007,500
Lodging - 1.96%,
HMH Properties Inc., 7.875%,
08/01/2008 ................... 2,000,000 1,947,500
Machinery - 4.87%
Grove Holdings LLC, (Step-Up
Bond),
11.625%, 05/01/2009 (a) ...... 2,000,000 837,500
National Equipment Services
Inc.,
(144a), 10.00%, 11/30/2004 ... 2,000,000 1,975,000
W.R. Carpenter North America
Inc.,
10.625%, 06/15/2007 .......... 2,000,000 2,025,000
---------
4,837,500
Manufacturing - 6.11%
Burke Industries Inc.,
9.719%, 08/15/2007 (c) ....... 700,000 647,500
10.00%, 08/15/2007 ........... 1,450,000 1,406,500
Jackson Products Inc., 9.50%,
04/15/2005 ................... 2,000,000 1,995,000
Prestolite Electric Inc., 9.625%,
02/01/2008 ................... 2,060,000 2,023,950
---------
6,072,950
Media -- 8.72%
Advanstar Communications Inc.,
9.25%, 05/01/2008 ............ 1,000,000 1,018,750
Capstar Broadcasting Corp.,
(Step-Up Bond), 12.75%,
02/01/2009 (a) ................. 2,850,000 2,337,000
CBS Radio Inc., 11.375%,
01/15/2009 ...................... 568,900 669,169
Frontiervision Holdings LP,
(Step-Up Bond), 11.875 %,
09/15/2007 (a) .................. 1,300,000 1,085,500
FrontierVision Operating
Partners LP,
11.00%, 10/15/2006 ........... 400,000 444,000
Gray Communications System Inc.,
10.625%, 10/01/2006 .......... 1,100,000 1,182,500
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 (continued)
Rogers Cablesystems Ltd.,
9.625%, 08/01/2002 ...........$ 650,000 698,750
10.00%, 03/15/2005 ........... 1,100,000 1,232,000
---------
8,667,669
Metals & Mining - 1.57%
Steel Heddle Manufacturing Co.,
10.625%, 06/01/2008 .......... 2,000,000 1,560,000
Office & Business Equipment - 2.02%
General Binding Corp., 9.375%,
06/01/2008 ................... 2,000,000 2,012,500
Oil & Gas Producers - 1.54%
Parker Drilling Co., 9.75%,
11/15/2006 (d) ............... 1,700,000 1,530,000
Packaging & Containers - 5.42%
Huntsman Packaging Corp., 9.125%,
10/01/2007 ................... 1,000,000 992,500
Riverwood International Corp.,
10.625%,
08/01/2007 (d) ............... 2,000,000 1,995,000
Stone Container Corp., 12.75%,
04/01/2002 ................... 2,400,000 2,400,000
---------
5,387,500
Retail - 5.12%
APCOA Inc., 9.25%, 03/15/2008
(d) ............................. 1,500,000 1,406,250
Eye Care Centers of America
Inc.,
(144a), 9.125%, 05/01/2008 ... 2,000,000 1,920,000
Finlay Enterprises Inc., 9.00%,
05/01/2008 ................... 2,000,000 1,760,000
---------
5,086,250
Software - 2.19%
PSINet Inc., 10.00%, 02/15/2005
(d) ............................. 2,220,000 2,175,600
Sovereign - 1.97%
Republic of Argentina, 11.00%,
10/09/2006 ARS................ 2,000,000 1,960,000
Telecommunications - 13.98%
Call-Net Enterprises Inc.,
(Step-Up Bond), 8.94%,
08/15/2008 (a) (d) .............. 1,500,000 862,500
Focal Communications Corp.,
(Step-Up Bond), 12.125%,
02/15/2008 (a) (d) ............. 1,750,000 914,375
Intermedia Communications Inc.,
8.875%, 11/01/2007 (d) ....... 1,000,000 965,000
8.50%, 01/15/2008 (d) ........ 1,400,000 1,330,000
Principal Market
Amount Value
------ -----
Corporate Bonds (continued)
Telecommunications (continued)
Level 3 Communications Inc,
9.125%, 05/01/2008 (d) .......$2,000,000 $1,982,500
Metrocall Inc., (144a), 11.00%
09/15/2008 ................... 2,000,000 2,010,000
Metronet Communications Corp.,
(Step-Up Bond), 9.95%,
06/15/2008(a) ................ 1,000,000 616,250
12.00%, 08/15/2007 (d) ....... 1,800,000 1,998,000
Northeast Optic Network, 12.75%,
08/15/2008 ................... 2,000,000 1,960,000
Rogers Cantel Inc.,
9.375%, 06/01/2008 ........... 1,000,000 1,055,000
9.75%, 06/01/2016 ............ 200,000 214,500
----------
13,908,125
Transportation - 3.24%
Gulfmark Offshore, 8.75%,
06/01/2008 ...................... 1,000,000 975,000
Ultrapetrol Ltd., 10.50%,
04/01/2008 (d) .................. 2,400,000 2,250,000
3,225,000
Total Corporate Bonds
(cost $99,805,241) .......... 95,941,332
Rights - 0.01%
Machinery - 0.01%
Terex Corp (cost $831) .......... 400 8,000
Warrants - 0.01%
Metals & Mining - 0.00%
Knology Holdings Inc. ........... 2,200 4,411
Telecommunications - 0.01%
Highwaymaster Communications
Inc. ............................ 1,500 3,000
Metronet Communications Inc. .... 1,300 4,550
7,550
Total Warrants (cost $5,525) . 11,961
Short Term Investments - 3.48%
Diversified Financial Services -
3.46%
American Express Credit Corp.,
6.10%
01/04/1999 ................... 2,000,000 1,998,983
Household Finance Corp., 5.10%,
01/04/1999 ................... 1,440,000 1,439,388
---------
3,438,371
See notes to financial statements.
<PAGE>
PPM AMERICA/JNL HIGH YEILD BOND SERIES
SCHEDULE OF INVESTMENTS (continued)
Principal Market
Amount Value
------ -----
Short Term Investments (continued)
Money Market Fund - 0.02%
SSgA Money Market Fund, 4.85%
(b) .............................$ 16,661 $ 16,661
Total Short Term Investments
(cost $3,455,032) ........... 3,455,032
Total Investments -- 100%
(cost $103,266,629) ............. $99,416,325
===========
- --------------------------------------------------------------------------------
(a) Denotes deferred interest security that receives no current 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 is
the quoted yield as of December 31, 1998.
(c) Coupon is indexed to 6 month Libor. Rate stated is in effect as of December
31, 1998.
(d) All or a portion of this security has been loaned.
See notes to the financial statements.
<PAGE>
JNL Series Trust
PPM America/JNL Money Market Series
Statement of Assets and Liabilities
December 31, 1998
Assets
Investments in securities, at cost ........ $ 57,072,984
================
Investments in securities, at
amortized cost ............................ $ 57,072,984
Receivables:
Interest ............................... 8
Fund shares sold ....................... 15,804
Reimbursement from Adviser ............. 4,132
----------------
Total assets .............................. 57,092,928
----------------
Liabilities
Payables:
Investment advisory fees ............... 28,375
Fund shares redeemed ................... 699,507
Other liabilities ......................... 16,065
----------------
Total liabilities ......................... 743,947
================
Net assets ................................ $ 56,348,981
================
Net assets consist of:
Paid-in capital ........................... $ 56,348,981
================
Total shares outstanding (no par
value),
unlimited shares authorized ........... 56,348,981
================
Net asset value, offering and
redemption
price per share......................... $ 1.00
================
Statement of Operations
For the Year Ended December 31, 1998
Investment income
Interest ............................... $ 3,023,100
---------------
Expenses
Investment advisory fees ............... 323,501
Custodian fees ......................... 23,460
Portfolio accounting fees .............. 24,498
Professional fees ...................... 15,567
Other................................... 14,752
---------------
Total operating expenses .................. 401,778
Less:
Reimbursement from Adviser ............. (4,940)
---------------
Net expenses .............................. 396,838
---------------
Net investment income ..................... 2,626,262
---------------
Net increase in net assets
from operations ........................ $ 2,626,262
===============
See notes to the financial statements.
<PAGE>
JNL Series Trust
PPM America/JNL Money Market Series
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year ended December 31,
----------------------------------
1998 1997
---------------- ----------------
<S> <C> <C>
Operations:
Net investment income .............................................................. $ 2,626,262 $ 1,699,439
---------------- ----------------
Distributions to shareholders:
From net investment income ......................................................... (2,626,262) (1,699,439)
---------------- ----------------
Share transactions:
Proceeds from the sale of shares ................................................... 129,092,539 87,270,526
Reinvestment of distributions ...................................................... 2,626,262 1,658,199
Cost of shares redeemed ............................................................ (117,177,667) (70,873,065)
---------------- ----------------
Net increase in net assets from share transactions ................................... 14,541,134 18,055,660
---------------- ----------------
Net increase in net assets ........................................................... 14,541,134 18,055,660
Net assets beginning of period ....................................................... 41,807,847 23,752,187
---------------- ----------------
Net assets end of period ............................................................. $ 56,348,981 $ 41,807,847
================ ================
</TABLE>
See notes to the financial statements.
<PAGE>
JNL Series Trust
PPM America/JNL Money Market Series
Financial Highlights
<TABLE>
<CAPTION>
Period from Period from
April 1, May 15,
Year ended December 31, 1996 to 1995* to
------------------------------- December 31, March 31,
1998 1997 1996 1996
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Selected Per Share Data
Net asset value, beginning of period ............................. $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------------- --------------- --------------- ---------------
Income from operations:
Net investment income .......................................... 0.05 0.05 0.04 0.04
--------------- --------------- --------------- ---------------
Less distributions:
From net investment income ..................................... (0.05) (0.05) (0.04) (0.04)
--------------- --------------- --------------- ---------------
Net increase ..................................................... - - - -
--------------- --------------- --------------- ---------------
Net asset value, end of period ................................... $ 1.00 $ 1.00 $ 1.00 $ 1.00
=============== =============== =============== ===============
Total Return (a) ................................................. 4.99% 5.01% 3.61% 4.59%
Ratios and Supplemental Data:
Net assets, end of period (in thousands) ....................... $ 56,349 $ 41,808 $ 23,752 $ 6,816
Ratio of net operating expenses to average net assets (b) (c) .. 0.74% 0.75% 0.75% 0.75%
Ratio of net investment income to average net assets (b) (c) ... 4.87% 4.92% 4.75% 5.06%
Ratio information assuming no expense reimbursement or
fees paid indirectly:
Ratio of net operating expenses to average net assets (b) ..... 0.75% 0.76% 0.85% 1.30%
Ratio of net investment income to average net assets (b) ...... 4.86% 4.91% 4.65% 4.51%
- ----------------------------------------------------------------------------------------------------------------------------------
</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 Adviser's expense reimbursement and
fees paid indirectly.
See notes to the financial statements.
<PAGE>
PPM AMERICA/JNL MONEY MARKET SERIES
SCHEDULE OF INVESTMENTS
December 31, 1998
Principal Amortized
Amount Cost
------ ----
Commercial Paper -- 100%
Auto Manufacturers - 3.34%
General Motors Acceptance Corp.
5.35%, 01/11/1999 .............. $ 630,000 $ 629,064
5.34%, 01/20/1999 .............. 480,000 478,647
5.16%, 01/26/1999 .............. 500,000 498,208
5.47%, 01/27/1999 .............. 300,000 298,815
-----------
1,904,734
Chemicals - 2.97%
E.I. du Pont de Nemours & Co.,
5.20%, 01/14/1999 .............. 1,700,000 1,696,808
Computers - 1.73%
International Business Machines
Corp.,
5.09%, 02/11/1999 .............. 993,000 987,244
Cosmetics & Personal Care - 1.09%
Procter & Gamble Co., 5.45%,
01/27/1999 ................... 625,000 622,540
Diversified Financial Services -
56.57%
AC Acquisition Holding Co.
5.04%, 01/27/1999 .............. 820,000 817,015
5.00%, 03/26/1999 .............. 1,100,000 1,087,166
American Express Credit Corp.
5.80%, 01/05/1999 .............. 106,000 105,932
5.05%, 01/29/1999 .............. 540,000 537,879
5.05%, 02/11/1999 .............. 250,000 248,562
5.00%, 03/11/1999 .............. 273,000 270,384
5.00%, 03/15/1999 .............. 800,000 791,889
American General Finance Corp.
5.60%, 01/05/1999 .............. 700,000 699,564
5.07%, 03/01/1999 .............. 100,000 99,169
5.08%, 03/02/1999 .............. 900,000 892,380
4.99%, 04/13/1999 .............. 335,000 330,264
Associated Corporation of North
America
5.06%, 02/18/1999 .............. 500,000 496,627
5.05%, 02/19/1999 .............. 500,000 496,563
4.85%, 06/07/1999 .............. 1,095,000 1,071,838
Chevron UK Investment Plc
5.23%, 02/23/1999 .............. 1,000,000 992,300
5.00%, 05/13/1999 .............. 1,300,000 1,276,166
Chrysler Financial Corp.
5.10%, 02/03/1999 .............. 1,010,000 1,005,278
5.05%, 03/11/1999 .............. 1,200,000 1,188,385
CIT Group Inc.
5.35%, 01/19/1999 .............. 1,650,000 1,645,586
5.06%, 03/05/1999 .............. 650,000 644,244
Countrywide Funding Corp.
5.27%, 01/29/1999 .............. 1,350,000 1,344,467
Countrywide Home Loans Inc.
5.20%, 01/20/1999 .............. 500,000 498,628
5.20%, 02/05/1999 .............. 600,000 596,967
Deere (John) Capital Corp., 5.02%,
02/19/1999 ..................... 300,000 297,950
Principal Amortized
Amount Cost
------ ----
Commercial Paper (continued)
Diversified Financial Services
(continued)
Ford Motor Credit Co.
5.46%, 01/08/1999 .............. $ 720,000 $ 719,236
5.46%, 01/14/1999 .............. 360,000 359,290
5.47%, 01/21/1999 .............. 540,000 538,359
5.47%, 01/22/1999 .............. 300,000 299,042
5.03%, 01/27/1999 .............. 105,000 104,619
5.47%, 02/02/1999 .............. 300,000 298,541
Heller Financial Inc.
5.55%, 01/27/1999 .............. 305,000 303,777
5.50%, 01/28/1999 .............. 1,383,000 1,377,295
5.68%, 02/11/1999 .............. 550,000 546,442
Household Finance Corp.
5.39%, 01/07/1999 .............. 1,100,000 1,099,012
5.33%, 01/11/1999 .............. 195,000 194,711
5.02%, 02/26/1999 .............. 1,000,000 992,191
Merrill Lynch & Co. Inc.
5.40%, 01/15/1999 .............. 185,000 184,612
5.48%, 01/15/1999 .............. 300,000 299,361
5.50%, 01/15/1999 .............. 980,000 977,904
5.51%, 02/02/1999 .............. 200,000 199,020
5.08%, 02/12/1999 .............. 300,000 298,222
5.10%, 02/12/1999 .............. 250,000 248,513
Norwest Financial Inc.
5.30%, 01/04/1999 .............. 750,000 749,669
5.07%, 03/12/1999 .............. 350,000 346,550
Sears Roebuck Acceptance Corp.
5.16%, 01/21/1999 .............. 1,100,000 1,096,847
5.05%, 02/26/1999 .............. 250,000 248,036
5.00%, 04/14/1999 .............. 750,000 739,271
5.05%, 05/04/1999 .............. 268,000 263,376
USAA Capital Corp.
5.06%, 01/21/1999 .............. 645,000 643,187
4.91%, 02/24/1999 .............. 1,140,000 1,131,604
4.99%, 03/31/1999 .............. 600,000 592,598
-----------
32,286,488
Electric - 1.65%
Central & Southwest Corp.
5.62%, 01/22/1999 .............. 450,000 448,525
5.50%, 03/18/1999 .............. 500,000 494,194
-----------
942,719
Food - 7.12%
Campbell Soup Co.
5.44%, 02/11/1999 .............. 1,100,000 1,093,185
4.95%, 04/05/1999 .............. 650,000 641,599
ConAgra Inc.
5.52%, 01/12/1999 .............. 625,000 623,946
5.52%, 01/13/1999 .............. 200,000 199,632
H.J. Heinz Co.
5.15%, 02/18/1999 .............. 1,515,000 1,504,597
-----------
4,062,959
See notes to the financial statements.
<PAGE>
PPM AMERICA/JNL MONEY MARKET SERIES
SCHEDULE OF INVESTMENTS (continued)
Principal Amortized
Amount Cost
------ ----
Commercial Paper (continued)
Health Care - 3.52%
Allergan Inc.
5.40%, 01/06/1999 ..............$ 415,000 414,689
5.60%, 01/06/1999 .............. 1,593,000 1,591,761
-----------
2,006,450
Leisure Time - 2.01%
Hasbro Inc., 5.15%, 01/04/1999 .. 1,150,000 1,149,506
Machinery -3.32%
Deere & Co.
5.03%, 01/29/1999 .............. 860,000 856,635
5.06%, 02/16/1999 .............. 250,000 248,384
5.02%, 03/16/1999 .............. 800,000 791,745
-----------
1,896,764
Manufacturing - 3.17%
General Electric Capital Corp.
5.48%, 01/21/1999 .............. 200,000 199,391
5.48%, 01/29/1999 .............. 250,000 248,934
5.49%, 01/29/1999 .............. 550,000 547,652
5.06%, 02/19/1999 .............. 250,000 248,278
5.48%, 02/22/1999 .............. 275,000 272,823
4.97%, 04/13/1999 .............. 295,000 290,846
-----------
1,807,924
Media - 4.37%
Walt Disney Co., 4.98%,
03/09/1999 ...................... 2,200,000 2,179,610
McGraw-Hill Company Inc., 5.00%,
03/24/1999 ..................... 320,000 316,356
-----------
2,495,966
Principal Amortized
Amount Cost
------ ----
Commercial Paper (continued)
Oil & Gas Producers - 3.48%
Amoco Co., 5.43%, 02/23/1999 ....$1,765,000 $ 1,750,890
Consolidated Natural Gas Co.,
5.13%,
01/25/1999 ..................... 235,000 234,196
-----------
1,985,086
Packaging & Containers - 1.28%
Crown Cork & Seal Co. Inc.
6.00%, 01/12/1999 .............. 600,000 598,900
5.82%, 02/19/1999 .............. 130,000 128,970
-----------
727,870
Telecommunications - 4.38% GTE Corp.
5.75%, 01/04/1999 .............. 300,000 299,856
5.90%, 01/04/1999 .............. 558,000 557,726
5.38%, 01/26/1999 .............. 750,000 747,198
5.30%, 02/19/1999 .............. 900,000 893,508
-----------
2,498,288
-----------
Total Commercial Paper
(cost $57,071,346) .......... 57,071,346
-----------
Money Market Fund - 0.00%
SSgA Money Market Fund, 4.85%
(a)
(cost $1,638) ................... 1,638 1,638
-----------
Total Investments - 100%
(cost $57,072,984) .............. $57,072,984
=============
- --------------------------------------------------------------------------------
(a) Dividend yields change daily to reflect current market conditions. Rate is
the quoted yield as of December 31, 1998.
See notes to the financial statements.
<PAGE>
[SALOMON BROTHERS ASSET MANAGEMENT LOGO]
SALOMON BROTHERS/JNL BALANCED SERIES
SALOMON BROTHERS ASSET MANAGEMENT INC
GEORGE WILLIAMSON
OBJECTIVE:
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.
MONEY MANAGER COMMENTARY:
The Series returned 5.91% since inception, versus 13.01% for the 50% Salomon
Smith Barney Broad Investment Grade Bond Index/50% S&P 500 Index.
Underperformance of the Series for the period was attributed to its continued
conservative equity allocation and value style. In an environment characterized
by extremely momentum driven markets, we perform less than the market due to our
value style.
The equity market finished its fourth consecutive year of returns in excess of
20% with the S&P 500 returning 28.58%. Investors experienced significant
volatility during the year as the S&P 500 increased more than 20% through early
July, only to fall back into negative territory in the beginning of October.
Worldwide political and economic turmoil resulted in a loss of confidence by
U.S. equity investors late in the summer. The collapse of the financial
structure in Russia, although not totally unexpected, coupled with the ongoing
crisis in Asia, caused a number of financial institutions to take charge offs,
and led to a "flight to quality" that exposed a number of over leveraged hedge
funds financial difficulties.
By early Fall, the Federal Reserve came to the market's rescue by cutting the
federal funds rate and discount rate. As the stock and credit markets rallied
after the Federal Reserve rate cut, the need for the safety of Treasuries was
reduced. Spread sectors of the market such as mortgage backed securities,
corporate bonds and asset backed securities all did better as the overall
reduction in the global risk premium led to an improving disposition in those
markets. Two additional interest rate reductions increased investor confidence
and provided liquidity to fuel the market's strong fourth quarter performance.
Large-cap growth stocks were the only stocks that really drove performance for
the year 1998. We anticipate security markets will be more subdued in 1999.
In the equity portion of our portfolio, we maintained our strategy to
significantly overweight those companies where we had the greatest conviction,
i.e. position and concentration. We kept our overweight stance in the consumer
and financial sectors with such new additions as PepsiCo, Avon Products,
BankAmerica, and Pharmacia & Upjohn. We were positioned conservatively for the
year, to give investors the upside potential through the Series exposure to
equities while limiting downside risk.
We expect value stocks to receive better valuation in the current year as well
as better performance. We believe the portfolio is in a good position to
withstand further market declines if any are experienced and to participate in
market appreciation.
After seven years of uninterrupted growth, the U.S. economy faces a period of
slowing expansion and threatened instability. Although key areas of economic
activity remain buoyant, gradual slowing remains a likely scenario for 1999. The
Federal Reserve will probably condition further easing on renewed
intensification of financial stress of evidence that demand pressures are
receding.
We expect interest rates to generally move lower in the first few months of the
year, followed by a gradual rise through the end of 1999. With the expectation
of further Federal Reserve easing, we look for the yield curve to steepen. As
such, long-term bonds may stabilize in a range centered on 5% as long-term
inflation expectations fall.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
SALOMON BROTHERS/JNL BALANCED SERIES, THE S&P 500 INDEX AND THE
SALOMON SMITH BARNEY BROAD INVESTMENT GRADE BOND INDEX
[GRAPHIC]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
03/02/98 $10,000.00 $10,000.00 $10,000.00
03/31/98 $10,550.84 $10,270.00 $10,039.05
04/30/98 $10,646.86 $10,270.00 $10,090.85
05/31/98 $10,446.70 $10,260.00 $10,187.28
06/30/98 $10,858.30 $10,230.00 $10,270.96
07/31/98 $10,742.97 $10,120.00 $10,292.91
08/31/98 $9,191.22 $9,570.00 $10,450.85
09/30/98 $9,780.05 $9,900.00 $10,697.12
10/31/98 $10,574.83 $10,220.00 $10,648.72
11/30/98 $11,215.52 $10,500.00 $10,707.48
12/31/98 $11,861.40 $10,591.00 $10,740.76
TOTAL RETURN
FOR THE PERIOD FROM
MARCH 2, 1998* TO
DECEMBER 31, 1998 ... 5.91%
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT RETURN AND
PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY
BE MORE OR LESS THAN THEIR ORIGINAL COST.
PERFORMANCE NUMBERS ARE NET OF ALL SERIES OPERATING EXPENSES, BUT DO NOT REFLECT
THE DEDUCTION OF INSURANCE CHARGES.
- ---------------
* Commencement of operations.
<PAGE>
JNL Series Trust
Salomon Brothers/JNL Balanced Series
Statement of Assets and Liabilities
December 31, 1998
Assets
Investments in securities, at cost ........ $ 3,427,614
================
Investments in securities, at value ....... $ 3,497,395
Receivables:
Dividends and interest ................. 22,963
Investment securities sold ............. 101,988
----------------
Total assets .............................. 3,622,346
----------------
Liabilities
Bank overdraft ............................ 103
Payables:
Investment advisory fees ............... 2,093
Fund shares redeemed ................... 90
Investment securities purchased ........ 307,529
Other liabilities ......................... 15,951
----------------
Total liabilities ......................... 325,766
================
Net assets ................................ $ 3,296,580
================
Net assets consist of:
Paid-in capital ........................... $ 3,241,423
Undistributed net investment income ....... 918
Accumulated net realized loss on
investments and foreign currency
related items .......................... (15,542)
Net unrealized appreciation on
investments ............................... 69,781
================
Net assets ................................ $ 3,296,580
================
Total shares outstanding (no par
value), unlimited shares authorized ....... 317,593
================
Net asset value, offering and
redemption price per share................. $ 10.38
================
Statement of Operations
For the Period Ended December 31, 1998*
Investment income
Dividends .............................. $ 23,538
Interest ............................... 58,950
Foreign tax withholding ................ (157)
---------------
Total investment income ................... 82,331
---------------
Expenses
Investment advisory fees ............... 14,837
Custodian fees ......................... 9,755
Portfolio accounting fees .............. 13,984
Professional fees ...................... 4,273
Other .................................. 1,317
---------------
Total operating expenses .................. 44,166
Less:
Reimbursement from Adviser ............. (26,547)
---------------
Net expenses .............................. 17,619
---------------
Net investment income ..................... 64,712
---------------
Realized and unrealized gains (losses)
Net realized loss on:
Investments ............................ (15,542)
Foreign currency related items ......... (39)
Net change in unrealized appreciation
on investments ......................... 69,781
---------------
Net realized and unrealized gains ......... 54,200
---------------
Net increase in net assets
from operations ........................ $ 118,912
===============
- ----------------------------------------------------------
* For period beginning March 2, 1998 (commencement of
operations).
See notes to the financial statements
<PAGE>
JNL Series Trust
Salomon Brothers/JNL Balanced Series
Statement of Changes in Net Assets
Period from
March 2,
1998* to
December 31,
1998
------------
Operations:
Net investment income ................... $ 64,712
Net realized loss on:
Investments ........................... (15,542)
Foreign currency related items ........ (39)
Net change in unrealized appreciation
on investments ........................ 69,781
---------
Net increase in net assets from
operations ................................ 118,912
---------
Distributions to shareholders:
From net investment income .............. 65,648)
From net realized gains on investment
transactions ......................... -
---------
Total distributions to shareholders ....... (65,648)
---------
Share transactions:
Proceeds from the sale of shares ........ 4,871,127
Reinvestment of distributions ........... 65,648
Cost of shares redeemed ................. (1,693,459)
---------
Net increase in net assets from
share transactions ..................... 3,243,316
---------
Net increase in net assets ................ 3,296,580
Net assets beginning of period ............ -
---------
Net assets end of period .................. $ 3,296,580
=========
Undistributed net investment income ....... $ 918
=========
Financial Highlights
Period from
March 2,
1998* to
December 31,
1998
------------
Selected Per Share Data
Net asset value, beginning of period ...... $ 10.00
------------
Income from operations:
Net investment income ................... 0.21
Net realized and unrealized gains on
investments and foreign currency
related items ........................ 0.38
------------
Total income from operations .............. 0.59
------------
Less distributions:
From net investment income .............. (0.21)
From net realized gains on
investment transactions .............. -
------------
Total distributions ....................... (0.21)
------------
Net increase .............................. 0.38
------------
Net asset value, end of period ............ $ 10.38
============
Total Return (a) .......................... 5.91%
Ratios and Supplemental Data:
Net assets, end of period (in
thousands) ..............................$ 3,297
Ratio of net operating expenses to
average net assets (b) (c) .............. 0.95%
Ratio of net investment income to
average net assets (b) (c) .............. 3.49%
Portfolio turnover ...................... 128.41%
Ratio information assuming no expense
reimbursement:
Ratio of net operating expenses to
average net assets (b) .................. 2.38%
Ratio of net investment income to
average net assets (b) .................. 2.06%
- --------------------------------------------------------------------------------
* 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 period ended December 31, 1998.
(b) Annualized for the period ended December 31, 1998.
(c) Computed after giving effect to the Adviser's expense reimbursement.
See notes to the financial statements.
<PAGE>
SALOMON BROTHERS/JNL BALANCED SERIES
SCHEDULE OF INVESTMENTS
December 31, 1998
Market
Shares Value
------ -----
Common Stocks -- 41.07%
Auto Manufacturers -- 1.37%
DaimlerChrysler AG (a) ............... 498 $ 47,839
Banks --3.93%
BankAmerica Corp. .................... 905 54,412
Fleet Financial Group Inc. ........... 1,000 44,688
Mercantile Bancshares Corp. .......... 1,000 38,500
-----------
137,600
Beverages -- 1.87%
PepsiCo Inc. ......................... 1,600 65,500
Building Materials -- 1.13%
Vulcan Materials Co. ................. 300 39,469
Chemicals -- 0.99%
Geon Co. ............................. 1,500 34,500
Computers -- 2.11%
International Business Machines 400 73,900
Corp. ................................
Cosmetics & Personal Care -- 1.77%
Avon Products Inc. ................... 1,400 61,950
Electric -- 0.96%
Edison International ................. 1,200 33,450
Food -- 1.96%
Hormel Foods Corp. ................... 1,200 39,300
Ralston Purina Group ................. 900 29,138
-----------
68,438
Health Care -- 1.44%
Johnson & Johnson Co. ................ 600 50,325
Insurance -- 3.91%
Allstate Corp. ....................... 500 19,313
Chubb Corp. .......................... 300 19,463
CIGNA Corp. .......................... 700 54,118
Marsh & McLennan Cos. Inc. ........... 750 43,828
-----------
136,722
Manufacturing -- 1.09%
Cooper Industries Inc. ............... 800 38,150
Metals & Mining -- 0.99%
USEC Inc. ............................ 2,500 34,688
Oil & Gas Producers -- 4.10%
Amerada Hess Corp. ................... 600 29,850
Amoco Corp. .......................... 600 36,225
Exxon Corp. .......................... 500 36,562
Schlumberger Ltd. .................... 300 13,838
Suncor Energy Inc. ................... 900 26,888
-----------
143,363
Market
Shares Value
------ -----
Common Stocks (continued)
Pharmaceuticals -- 3.07%
American Home Products Corp. ......... 900 $ 50,681
Pharmacia & Upjohn Inc. .............. 1,000 56,624
-----------
107,305
Real Estate -- 2.21%
Crescent Real Estate Equities Co. .... 1,000 23,000
Glenborough Realty Trust Inc. ........ 1,100 22,413
New Plan Excel Realty Trust Inc. ..... 1,440 31,950
-----------
77,363
Retail -- 1.83%
May Department Stores Co. ............ 500 30,188
Sears Roebuck & Co. .................. 800 34,000
-----------
64,188
Telecommunications -- 3.05%
Bell Atlantic Corp. .................. 1,000 53,000
SBC Communications Inc. .............. 1,000 53,624
-----------
106,624
Tobacco -- 1.22%
Philip Morris Cos. Inc. .............. 800 42,800
Transportation -- 2.07%
Canadian National Railway Co. ........ 700 36,313
Union Pacific Corp. .................. 800 36,050
-----------
72,363
-----------
Total Common Stocks
(cost $1,365,578) ................ 1,436,537
-----------
Principal
Amount
------
Corporate Bonds -- 11.87%
Aerospace & Defense -- 0.58%
Raytheon Co., 6.15%, 11/01/2008 .....$ 20,000 20,367
Banks -- 0.57%
US Bank NA, 5.70%, 12/15/2008 ........ 20,000 19,800
Commercial Services -- 1.42%
Comdisco Inc., 6.125%, 08/01/2001 .... 50,000 49,616
Diversified Financial Services -- 0.30%
Sears Roebuck Acceptance Corp.,
7.00%, 06/15/2007 .................. 10,000 10,730
Electrical Components & Equipment --
1.55%
Integrated Process Equipment Corp.,
6.250%, 09/15/2004 ................. 75,000 54,094
Manufacturing -- 0.86%
Mark IV Industries Inc., (144a),
4.75%,
11/01/2004 ......................... 25,000 20,031
Norsk Hydro ASA, 6.70%, 01/15/2018 ... 10,000 9,937
-----------
29,968
See notes to the financial statements.
<PAGE>
SALOMON BROTHERS/JNL BALANCED SERIES
SCHEDULE OF INVESTMENTS (continued)
Principal Market
Amount Value
------ -----
Corporate Bonds (continued)
Media -- 0.58%
A.H. Belo Corp., 7.25%, 09/15/2027 ..$ 20,000 $ 20,137
Semiconductors -- 1.53%
Micron Technology Inc., 7.00%,
07/01/2004 ......................... 50,000 53,563
Software -- 2.93%
First Data Corp., 6.375%, 50,000 51,807
12/15/2007 ...........................
Northern Telecom Ltd., 5.25%,
05/15/2003 ......................... 50,000 50,500
-----------
102,307
Telecommunications -- 1.55%
Aspect Telecommunications Corp.,
Zero Coupon, 08/10/2018 (144a) .....150,000 32,438
GTE Corp., 6.94%, 04/15/2028 ......... 20,000 21,721
-----------
54,159
-----------
Total Corporate Bonds
(cost $416,263) .................. 414,741
-----------
Shares
----------
Preferred Stocks -- 0.82%
Diversified Financial Services -- 0.82%
BTI Capital Trust .................... 400 8,150
Morgan Stanley Group Inc. "AMAT" -
PERQS ............................. 500 20,625
-----------
Total Preferred Stocks
(cost $34,930) ................... 28,775
-----------
Principal Market
Amount Value
------ -----
U.S. Government Securities -- 39.17%
U.S. Government Agencies -- 11.20%
Federal National Mortgage
Association
6.50%, 07/01/2028 .................$185,167 $ 186,382
7.00%, TBA (c) .....................100,000 102,000
8.00%, TBA (c) .....................100,000 103,562
-----------
391,944
U.S. Treasury Notes -- 27.97%
4.50%, 09/30/2000 ..................100,000 99,780
6.375%, 03/31/2001 ................. 15,000 15,548
5.25%, 08/15/2003 (d) ..............100,000 102,547
6.125%, 08/15/2007 .................200,000 218,438
5.625%, 05/15/2008 (d) .............300,000 320,109
4.75%, 11/15/2008 ..................220,000 221,718
-----------
978,140
-----------
Total U.S. Government Securities
(cost $1,363,585) ................ 1,370,084
-----------
Short Term Investments -- 7.07%
Money Market Fund -- 0.01%
SSgA Money Market Fund, 4.85% (b) .... 258 258
Repurchase Agreement -- 7.06%
Repurchase Agreement with State
Street
Bank, 4.85%, (Collateralized by
$240,000 U.S. Treasury Note,
6.25%,
due 02/15/2003, market value
$259,500) acquired on 12/31/1998,
due 01/04/1999 .....................247,000 247,000
-----------
Total Short Term Investments
(cost $247,258) .................. 247,258
-----------
Total Investments -- 100%
(cost $3,427,614) .................... $3,497,395
============
- --------------------------------------------------------------------------------
(a) Non-income producing security.
(b) Dividend yields change daily to reflect current market conditions. Rate is
the quoted yield as of December 31, 1998.
(c) Investment purchased on a when-issued basis.
(d) Security pledged as collateral for investments purchased on a when-issued
basis.
See notes to the financial statements.
<PAGE>
[SALOMON BROTHERS ASSET MANAGEMENT LOGO]
SALOMON BROTHERS/JNL GLOBAL BOND SERIES
SALOMON BROTHERS ASSET MANAGEMENT INC
PETER J. WILBY, DAVID J. SCOTT
OBJECTIVE:
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.
MONEY MANAGER COMMENTARY:
The Series returned 2.46% for 1998 versus 5.15% for the Lipper Variable Products
Global Income Funds category and 8.72% for the Salomon Smith Barney Broad
Investment Grade Bond Index. Underperformance of the Series was largely due to
its exposure to high yield and emerging markets debt during the unexpected
credit crisis in the summer of 1998.
For bonds, 1998 was a mixture of good and bad news. The good news was that
interest rates fell approximately 1% across the yield curve. Though low
inflation did contribute to lower bond yields, exogenous factors such as equity
market fears, default fears and expectations of spreading global economic
weakness gave investors sufficient reasons to seek only the safety and liquidity
of the Treasury sector. The bad news came for any bond that wasn't a Treasury,
as yield spreads across all sectors of the domestic bond universe widened toward
unexplainable and unsustainable levels. High yield bonds and emerging market
debt suffered through their worst performances in years. This was largely due to
the global spread rout.
Early in 1998, domestic demand readings in the U.S. remained exceptionally
healthy, benefitting from low interest rates, generation-low unemployment rates
and sky-high consumer confidence. Lower quality high yield bonds outperformed,
so the Series reaped the profits and upgraded into relatively higher quality
bonds. The Series maintained a neutral duration relative to the Lehman Brothers
Aggregate Bond Index and added to its overweighting in mortgage backed
securities. Discount coupon mortgages and seasoned pass-through mortgages
continued to be selected as they offered a more attractive convexity profile
than higher coupon securities.
The Series maintained it's weightings in the high yield sector throughout the
second quarter, as credit fundamentals remained favorable. We continued to seek
opportunities to upgrade credit quality and moved to a more defensive position
within the sector. In the emerging markets sector of the portfolio, we lowered
our exposure to Russia and added Bulgaria and Peru. Mexico and Argentina
continued to be core holdings as their fundamentals remained strong.
During the third quarter, heightened global market volatility caused the Series
to commit to a more defensive stance in its high yield sector and lower its
allocations to the emerging markets debt sector. We continued to decrease the
Series' exposure to Russia and increase its position in Argentina and Mexico as
fundamentals appeared more favorable. The Series continued to favor discount and
coupon mortgage backed securities in the investment grade portion of the
portfolio.
During the fourth quarter, high yield and emerging debt markets snapped back
strongly when it became apparent to investors that the financial market crisis
was stabilizing. Bold steps taken by the Federal Reserve in lowering short-term
interest rates and restoring liquidity in the markets began to put investors at
ease. We maintained our stance in the high yield sector of the portfolio as
credit spreads had room to improve and interest rates slashed by 75 basis
points. We increased our allocations in the emerging markets debt sector from
15% to 20% as the markets have recovered some 20% since their lows in early
September.
Investor optimism and recent economic data suggest that the U.S. economy is
sailing into the new year. As booming sectors moderate and external growth
continues to fade, the current expansion will slow perceptibly. The optimistic
view assumes that the rest of the world holds together. Outside the U.S., where
the main threat to domestic stability first emerged, conditions have
deteriorated since the Federal Reserve's last rate cut. This backdrop leaves the
Federal Reserve in a watchful state, despite the complacency of today's
marketplace and strong fourth-quarter GDP growth. Near-term job and economic
growth probably will remain fairly buoyant, given the boost from lower commodity
prices, warm weather and the fresh rise in the equity market. However, with
inflation pressures in remission, the Federal Reserve will have ample leeway to
renew its rescue efforts in 1999 if necessary.
We remain optimistic about the high yield market, as interest rates are low and
credit spreads have room to improve. While there will be bumps along the way, we
expect emerging debt to outperform the U.S. investment grade market in 1999.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
SALOMON BROTHERS/JNL GLOBAL BOND SERIES AND THE SALOMON SMITH BARNEY BROAD
INVESTMENT GRADE INDEX
[GRAPHIC]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
5/15 $10,000 $10,000
6/30 $10,040 $10,265
9/30 $10,240 $10,459
12/31/95 $10,714 $10,913
3/31 $11,074 $10,722
6/30 $11,370 $10,774
9/30 $11,910 $10,976
12/31/96 $12,256 $11,307
3/31 $12,325 $11,249
6/30 $12,925 $11,654
9/30 $13,432 $12,041
12/31/97 $13,563 $12,397
3/31 $13,868 $12,597
6/30 $13,904 $12,888
9/30 $13,526 $13,423
12/31/98 $13,897 $13,478
AVERAGE ANNUAL
TOTAL RETURN
1 year..................... 2.46%
Since inception * ......... 9.47%
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT RETURN AND
PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY
BE MORE OR LESS THAN THEIR ORIGINAL COST.
PERFORMANCE NUMBERS ARE NET OF ALL SERIES OPERATING EXPENSES, BUT DO NOT REFLECT
THE DEDUCTION OF INSURANCE CHARGES.
- ------------
* Inception date May 15, 1995.
<PAGE>
JNL Series Trust
Salomon Brothers/JNL Global Bond Series
<PAGE>
Statement of Assets and Liabilities
December 31, 1998
Assets
Investments in securities, at cost ........ $ 54,157,094
================
Investments in securities, at value ....... $ 54,004,396
Foreign currency .......................... 5
Receivables:
Interest ............................... 875,554
Forward foreign currency
exchange contracts .................. 3,227
Fund shares sold ....................... 77,047
Investment securities sold ............. 502,775
Collateral for securities loaned .......... 2,634,334
----------------
Total assets .............................. 58,097,338
----------------
Liabilities
Payables:
Investment advisory fees ............... 34,167
Forward foreign currency
exchange contracts .................. 6,282
Fund shares redeemed ................... 12,095
Investment securities purchased ........ 7,205,925
Return of collateral for securities
loaned .................................... 2,634,334
Other liabilities ......................... 37,992
----------------
Total liabilities ......................... 9,930,795
================
Net assets ................................ $ 48,166,543
================
Net assets consist of:
Paid-in capital ........................... $ 49,421,275
Undistributed net investment loss ......... (11,832)
Accumulated net realized loss on
investments and foreign currency
related items .......................... (1,091,158)
Net unrealized appreciation
(depreciation) on:
Investments ............................ (152,698)
Foreign currency related items ......... 956
----------------
Net assets ................................ $ 48,166,543
================
Total shares outstanding (no par
value), unlimited shares authorized ....... 4,513,390
================
Net asset value, offering and
redemption price per share................. $ 10.67
================
Statement of Operations
For the Year Ended December 31, 1998
Investment income
Interest................................ $ 3,560,307
Foreign tax withholding................. (6,171)
---------------
Total investment income ................... 3,554,136
---------------
Expenses
Investment advisory fees ............... 375,503
Custodian fees ......................... 23,412
Portfolio accounting fees .............. 21,190
Professional fees ...................... 13,399
Other .................................. 13,467
---------------
Total operating expenses .................. 446,971
Less:
Reimbursement from Adviser ............. (5,203)
---------------
Net expenses .............................. 441,768
---------------
Net investment income ..................... 3,112,368
---------------
Realized and unrealized losses
Net realized loss on:
Investments ............................ (1,087,833)
Foreign currency related items ......... (53,642)
Net change in unrealized depreciation on:
Investments ............................ (1,034,049)
Foreign currency related items ......... (34,338)
---------------
Net realized and unrealized losses ........ (2,209,862)
---------------
Net increase in net assets
from operations ........................ $ 902,506
===============
See notes to the financial statements.
<PAGE>
JNL Series Trust
Salomon Brothers/JNL Global Bond Series
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year ended December 31,
----------------------------------
1998 1997
---------------- ----------------
<S> <C> <C>
Operations:
Net investment income ...................................................... $ 3,112,368 $ 1,712,722
Net realized gain (loss) on:
Investments ............................................................. (1,087,833) 76,786
Foreign currency related items ........................................... (53,642) 74,761
Net change in unrealized appreciation (depreciation) on:
Investments ............................................................. (1,034,049) 677,987
Foreign currency related items ........................................... (34,338) 50,955
---------------- ----------------
Net increase in net assets from operations ................................... 902,506 2,593,211
---------------- ----------------
Distributions to shareholders:
From net investment income ................................................. (3,054,679) (1,801,495)
From net realized gains on investment transactions ......................... - (164,331)
Return of capital .......................................................... - (33,012)
---------------- ----------------
Total distributions to shareholders .......................................... (3,054,679) (1,998,838)
---------------- ----------------
Share transactions:
Proceeds from the sale of shares ........................................... 26,135,631 26,946,293
Reinvestment of distributions .............................................. 3,054,679 1,962,974
Cost of shares redeemed .................................................... (15,596,426) (5,261,751)
---------------- ----------------
Net increase in net assets from share transactions ........................... 13,593,884 23,647,516
---------------- ----------------
Net increase in net assets ................................................... 11,441,711 24,241,889
Net assets beginning of period ............................................... 36,724,832 12,482,943
---------------- ----------------
Net assets end of period ..................................................... $ 48,166,543 $ 36,724,832
================ ================
Undistributed net investment loss ............................................ $ (11,832) $ (15,879)
================ ================
</TABLE>
See notes to the financial statements.
<PAGE>
JNL Series Trust
Salomon Brothers/JNL Global Bond Series
Financial Highlights
<TABLE>
<CAPTION>
Period from Period from
April 1, May 15,
Year ended December 31, 1996 to 1995* to
------------------------------- December 31, March 31,
1998 1997 1996 1996
----------------------------- --------------- ---------------
<S> <C> <C> <C> <C>
Selected Per Share Data
Net asset value, beginning of period ............................. $ 11.12 $ 10.63 $ 10.46 $ 10.00
--------------- -------------- --------------- -------------
Income from operations:
Net investment income .......................................... 0.72 0.54 0.42 0.81
Net realized and unrealized gains (losses) on investments and
foreign currency related items .............................. (0.45) 0.59 0.70 0.24
--------------- -------------- --------------- -------------
Total income from operations ..................................... 0.27 1.13 1.12 1.05
--------------- -------------- --------------- -------------
Less distributions:
From net investment income ..................................... (0.72) (0.58) (0.69) (0.56)
From net realized gains on investment transactions ............. - (0.05) (0.26) (0.03)
Return of capital .............................................. - (0.01) - -
Total distributions .............................................. (0.72) (0.64) (0.95) (0.59)
--------------- -------------- --------------- -------------
Net increase (decrease) .......................................... (0.45) 0.49 0.17 0.46
--------------- -------------- --------------- -------------
Net asset value, end of period ................................... $ 10.67 $ 11.12 $ 10.63 $ 10.46
=============== ============== =============== =============
Total Return (a) ................................................. 2.46% 10.66% 10.68% 10.74%
Ratios and Supplemental Data:
Net assets, end of period (in thousands) ....................... $ 48,167 36,725 12,483 6,380
Ratio of net operating expenses to average net assets (b) (c) .. 1.00% 1.00% 0.99% 1.00%
Ratio of net expenses to average net assets (c) ................ - 1.01% - -
Ratio of net investment income to average net assets (b) (c) ... 7.05% 6.83% 7.52% 9.01%
Portfolio turnover ............................................. 261.87% 134.55% 109.85% 152.89%
Ratio information assuming no expense reimbursement or
fees paid indirectly:
Ratio of net operating expenses to average net assets (b) ...... 1.01% 1.07% 1.44% 2.14%
Ratio of net investment income to average net assets (b) ....... 7.04% 6.76% 7.07% 7.87%
- ---------------------------------------------------------------------------------------------------------------------------------
</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 Adviser's expense reimbursement and
fees paid indirectly.
See notes to the financial statements.
<PAGE>
SALOMON BROTHERS/JNL GLOBAL BOND SERIES
SCHEDULE OF INVESTMENTS
December 31, 1998
Principal Market
Amount Value
------ -----
Corporate Bonds -- 33.50%
Poland -- 0.37%
Banks -- 0.37%
Nordic Investment Bank, 17.75%,
04/15/2002 PLN................. 340,000 $ 110,185
Sudwest LB Capital Market,
17.50%,
05/05/2003 PLN................. 270,000 90,461
-----------
Total Poland .................. 200,646
United States -- 33.13%
Aerospace & Defense - 0.64%
BE Aerospace Inc., 8.00%,
03/01/2008(c)............... $250,000 245,000
Raytheon Co., 6.15%, 11/01/2008 . 100,000 101,837
-----------
346,837
Auto Manufacturers -- 0.28%
Navistar International Corp.,
8.00%,
02/01/2008 .................... 150,000 152,625
Auto Parts & Equipment -- 0.87%
Breed Technologies Inc., (144a),
9.25%, 04/15/2008 ............. 250,000 220,000
Hayes Lemmerz International
Inc.,
(144a), 8.25%, 12/15/2008 ..... 250,000 249,375
-----------
469,375
Banks -- 0.55%
US Bank NA, 5.70%, 12/15/2008 ... 300,000 296,994
Beverages -- 0.21%
Stroh Brewery Co., 11.10%,
07/01/2006 ...................... 150,000 112,500
Biotechnology -- 0.59%
Monsato Co., (144a), 5.875%,
12/01/2008 .................. 175,000 174,486
Packard Bioscience Co., 9.375%,
03/01/2007 .................... 150,000 142,500
-----------
316,986
Chemicals -- 0.65%
Huntsman Corp., (144a), 9.50%,
07/01/2007 ................... 150,000 149,250
Praxair Inc., 6.15%, 04/15/2003 . 200,000 199,530
-----------
348,780
Commercial Services -- 3.02%
Comdisco Inc., 6.13%, 08/01/2001 250,000 248,080
Iron Mountain Inc., 10.125%,
10/01/2006 .................... 150,000 162,750
KinderCare Learning Centers
Inc.,
9.50%, 02/15/2009 (c) ......... 250,000 248,750
Pierce Leahy Corp., 11.125%,
07/15/2006 .................... 250,000 273,750
Primark Corp., (144a), 9.25%,
12/15/2008 .................... 250,000 250,000
Principal Market
Amount Value
------ -----
Corporate Bonds (continued)
United States (continued)
Commercial Services (continued)
Protection One Inc., (144a),
8.125%,
01/15/2009 ....................$ 250,000 $ 250,000
Service Corp. International,
6.00%,
12/15/2005 .................... 200,000 198,707
-----------
1,632,037
Computers -- 0.49%
Unisys Corp., 7.875%, 04/01/2008
(c) ............................. 250,000 265,000
Cosmetics & Personal Care -- 0.92%
American Safety Razor Co.,
9.875%,
08/01/2005 .................... 250,000 257,500
French Fragrances Inc., 10.375%,
05/15/2007 (g) ................ 125,000 123,438
Revlon Worldwide Corp., Zero
Coupon,
03/15/2001 (g) ................ 200,000 115,000
-----------
495,938
Diversified Financial Services
- --2.77%
ContiFinancial Corp., 8.125%,
04/01/2008 (g) ................ 250,000 175,000
DVI Inc., 9.875%, 02/01/2004 .... 250,000 240,000
Merrill Lynch & Co. Inc., 6.00%,
11/15/2004 (g) ................ 80,000 80,282
Paine Webber Group Inc., 7.00%,
03/01/2000 (c) ................ 300,000 302,808
Polymer Group Inc., 9.00%,
07/01/2007 ...................... 250,000 247,500
TPSA Finance BV, (144a), 7.75%,
12/10/2008 .................... 300,000 296,165
Williams Scotsman Inc., 9.875%,
06/01/2007 .................... 150,000 153,000
-----------
1,494,755
Electric -- 0.23%
L-3 Communications Corp., (144a),
8.00%, 08/01/2008 ............. 125,000 125,313
Entertainment -- 1.46%
Grand Casinos Inc., 9.00%,
10/15/2004 (c) ............... 250,000 281,250
Park Place Entertainment Corp.,
(144a),
7.875%, 12/15/2005 ............ 250,000 250,000
Sun International Hotels Ltd.,
8.625%,
12/15/2007 .................... 250,000 256,250
-----------
787,500
Environmental Control -- 1.26%
Allied Waste Industries Inc.,
(144a),
7.875%, 01/01/2009 ............ 250,000 253,438
Envirosource Inc., 9.75%,
06/15/2003 (g) ............... 185,000 172,050
Marsulex Inc., 9.625%,
07/01/2008 (g) .................. 250,000 255,938
-----------
681,426
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 -- 0.72%
CFP Holdings Inc.,
11.625%,
01/15/2004 ....................$ 200,000 $ 166,000
Dole Foods Co., 6.75%,
07/15/2000 ...................... 100,000 100,164
SC International Services Inc.,
9.25%,
09/01/2007 .................... 125,000 125,000
-----------
391,164
Forest Products & Paper -- 0.15%
Doman Industries Ltd., 8.75%,
03/15/2004 .................... 100,000 79,000
Hand & Machine Tools -- 0.29%
International Knife & Saw Inc.,
11.375%, 11/15/2006 (g) ...... 150,000 153,750
Health Care -- 0.69%
Dade International Inc., 11.125%,
05/01/2006 ................... 250,000 275,000
Integrated Health Services Inc.,
9.50%,
09/15/2007 ................... 100,000 95,000
-----------
370,000
Holding Companies - Diversified --
1.30%
High Voltage Engineering Corp.,
10.50%, 08/15/2004 ............ 125,000 118,125
Jordan Industries Inc., 10.375%,
08/01/2007 .................... 200,000 206,750
Nebco Evans Holding Co.,
(Step-Up
Bond), 12.375%, 07/15/2007
(d) ............................. 350,000 167,563
United International Holdings
Inc.,
(Step-Up Bond), 10.75%,
02/15/2008 (d) ............... 400,000 212,000
-----------
704,438
Household Products -- 0.89%
Ekco Group Inc., 9.25%,
04/01/2006 ...................... 250,000 250,000
Indesco International Inc.,
9.75%,
04/15/2008 .................... 250,000 233,125
-----------
483,125
Insurance -- 0.38%
Aetna Services Inc., 7.625%,
08/15/2026 (c) ............... 200,000 203,246
Lodging -- 0.92%
HMH Properties Inc., 7.875%,
08/01/2008 ................... 250,000 243,438
Prime Hospitality Corp., 9.75%,
04/01/2007 ................... 250,000 251,250
-----------
494,688
Manufacturing -- 1.08%
Alvey Systems Inc., 11.375%,
01/31/2003 ................... 125,000 125,625
Axiohm Transaction Solutions,
9.75%,
10/01/2007 ................... 150,000 141,750
Principal Market
Amount Value
------ -----
Corporate Bonds (continued)
United States (continued)
Manufacturing (continued)
Foamex L.P./Foamex Capital
Corp.,
9.875%, 06/15/2007 ........... $ 100,000 $ 108,000
Norsk Hydro ASA, 6.70%,
01/15/2018 ...................... 100,000 99,370
Tekni-Plex Inc., 11.25%,
04/01/2007 ...................... 100,000 110,125
-----------
584,870
Media -- 3.55%
Adelphia Communications Corp.
10.50%, 07/15/2004 ........... 100,000 109,500
9.875%, 03/01/2007 ........... 100,000 110,625
American Media Operation Inc.,
11.625%, 11/15/2004 .......... 250,000 256,250
CSC Holdings Inc., 10.50%,
05/15/2016 ...................... 250,000 293,750
Diamond Cable Communications
Corp.,
(Step-Up Bond), 11.75%,
12/15/2005 (d) ................ 150,000 123,374
Hollinger International
Publishing Inc.,
9.25%, 03/15/2007 ............. 250,000 262,500
Lin Holdings Corp., (Step-Up
Bond),
10.00%, 03/01/2008 (d) ........ 375,000 258,750
Mail-Well Corp., (144a), 8.750%,
12/15/2008 .................... 250,000 250,625
Marcus Cable Company L.P.,
(Step-Up
Bond), 14.25%, 12/15/2005 (d) . 150,000 143,250
SFX Broadcasting Inc., 10.75%,
05/15/2006 .................... 99,000 109,890
-----------
1,918,514
Metals & Mining -- 0.74%
Glencore Nickel Property Ltd.,
9.00%,
12/01/2014 .................... 175,000 140,000
Renco Metals Inc., 11.50%,
07/01/2003 ...................... 250,000 260,000
-----------
400,000
Oil & Gas Producers -- 0.45%
Occidental Petroleum Corp.,
9.25%,
08/01/2019 .................... 150,000 172,224
TransAmerican Energy Corp.,
11.50%,
06/15/2002 (g) ................ 250,000 72,500
-----------
244,724
Packaging & Containers -- 0.67%
Plastic Containers Inc., 10.00%,
12/15/2006 .................... 250,000 260,000
Radnor Holdings Corp., 10.00%,
12/01/2003 .................... 100,000 100,750
-----------
360,750
Real Estate -- 1.38%
CB Richard Ellis Services Inc.,
8.875%,
06/01/2006 (c) ................ 250,000 245,000
Forest City Enterprises Inc.,
8.50%,
03/15/2008 .................... 325,000 325,000
Vencor Operating Inc., 9.875%,
05/01/2005 (g) ................ 200,000 173,500
-----------
743,500
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)
Retail -- 1.36%
Cole National Group Inc., 8.625%,
08/15/2007 .................... $ 250,000 $ 245,000
Jitney-Jungle Stores of America
Inc.,
12.00%, 03/01/2006 (c) ........ 250,000 277,500
Pueblo Xtra International, Inc.,
9.50%,
08/01/2003 .................... 60,000 57,600
Staples Inc., 7.125%, 08/15/2007 150,000 152,151
-----------
732,251
Software -- 0.38%
First Data Corp., 6.375%,
12/15/2007 (c) .................. 200,000 207,226
Telecommunications -- 3.02%
British Telecom Plc., 7.00%,
05/23/2007 (c) ............. 550,000 611,324
Comcast Cellular Holdings Inc.,
9.50%,
05/01/2007 (c) ................ 250,000 265,625
GTE Corp., 6.94%, 04/15/2028 .... 100,000 108,605
Intermedia Communication Inc.,
8.60%,
06/01/2008 .................... 125,000 119,375
Nextel Communications, Inc.,
(Step-Up
Bond), 9.75%, 10/31/2007 (d)
(g) ........................... 350,000 213,500
NTL Inc., (Step-Up Bond), 11.50%,
02/01/2006 (d) ................ 225,000 189,000
TeleWest Communications Plc,
(Step-
Up Bond), 11.00%, 10/01/2007
(d) ........................... 150,000 124,875
-----------
1,632,304
Textiles -- 0.29%
Collins & Aikman Floorcoverings,
10.00%, 01/15/2007 ........... 150,000 155,250
Transportation -- 0.93%
Coach USA Inc., 9.375%,
07/01/2007(g) ................... 250,000 256,250
Holt Group Inc., (144a), 9.75%,
01/15/2006 .................... 200,000 138,000
TFM SA, (Step-Up Bond), 11.75%,
06/15/2009 (d) ................ 200,000 107,750
-----------
502,000
-----------
Total United States ............ 17,886,866
-----------
Total Corporate Bonds
(cost $18,712,509) .......... 18,087,512
-----------
Government Securities -- 46.67%
Argentina -- 2.67%
Republic of Argentina
6.187%, 03/31/2005 (f) ARS..... 855,400 727,090
9.750%, 09/19/2027 ARS......... 800,000 713,040
-----------
Total Argentina ................ 1,440,130
Principal Market
Amount Value
------ -----
Government Securities (continued)
Australia -- 0.05%
New South Wales Treasury Corp.,
7.375%, 02/21/2007 AUD........ 40,000 $ 27,502
Brazil -- 1.00%
Federal Republic of Brazil,
6.125%,
04/15/2024 BRL................ 500,000 290,000
Republic of Brazil, 10.125%,
05/15/2027 BRL................ 375,000 249,375
-----------
Total Brazil ................... 539,375
Bulgaria -- 1.24%
National Republic of Bulgaria,
6.687%,
07/28/2011 (f) BGL............ 1,000,000 670,000
Denmark -- 1.09%
Kingdom of Denmark, 8.00%
05/15/2003 DKK.................. 3,220,000 586,949
Ecuador -- 1.01%
Republic of Ecuador
4.465%, 02/27/2015 (f) ECS.... 565,830 227,747
3.50%, 02/28/2025
(Step-Up Bond) (e) ECS... 750,000 318,750
-----------
Total Ecuador .................. 546,497
Finland -- 0.41%
Republic of Finland, 6.00%,
04/25/2008
FIM ..................... 1,000,000 225,829
Germany -- 0.97%
Federal Republic of Germany
4.125%, 07/04/2008 DEM.......... 200,000 122,405
4.75%, 07/04/2008 DEM........... 180,000 115,381
6.50%, 07/04/2027 DEM........... 140,000 105,382
5.625%, 01/04/2028 DEM.......... 270,000 182,581
-----------
Total Germany .................. 525,749
Greece -- 1.65%
Republic of Greece
11.00%, 02/25/2000 GRD.......... 43,500,000 150,683
8.90%, 04/01/2003 GRD...........139,000,000 520,977
8.70%, 04/08/2005 GRD........... 18,000,000 69,298
8.60%, 03/26/2008 GRD........... 39,000,000 154,673
-----------
Total Greece ................... 895,631
Italy -- 0.68%
European Investment Bank, 7.45%,
02/04/1999 ITL................600,000,000 364,919
Korea -- 0.37%
Korea Development Bank, 9.60%,
12/01/2000 (g) KRW............. 200,000 200,890
See notes to the financial statements.
<PAGE>
SALOMON BROTHERS/JNL GLOBAL BOND SERIES
SCHEDULE OF INVESTMENTS (continued)
Principal Market
Amount Value
------ -----
Government Securities (continued)
Mexico -- 4.68%
United Mexican States
11.375%, 09/15/2016
MXN.... .................... $ 350,000 $ 358,400
11.50%, 05/15/2026 MXN......... 2,025,000 2,166,750
-----------
Total Mexico ................... 2,525,150
Morocco -- 1.76%
Morocco Loan Participation,
6.812%,
01/01/2009 (f) MAD............. 700,000 546,000
Morocco Loan Participation,
9.525%,
01/01/2009 MAD................. 500,000 402,500
-----------
Total Morocco .................. 948,500
Panama -- 0.97%
Republic of Panama, 4.00%,
(Step-Up
Bond), 07/17/2014 (e) PAB....... 700,000 521,500
Peru -- 2.32%
Republic of Peru, (Step-Up
Bond),
4.00%, 03/07/2017 (e) PEN....... 2,000,000 1,255,000
Russia -- 0.00%
Russia Government International
Bond,
5.968%, 12/15/2015 (f) RUB.... 12,628 1,326
Slovenia -- 0.42%
Republic of Slovenia, 5.375%,
05/27/2005 SIT................. 190,000 226,549
Sweden -- 0.75%
Kingdom of Sweden
11.00%, 01/21/1999 SEK.......... 2,000,000 246,953
6.50%, 05/05/2008 SEK........... 1,100,000 158,700
-----------
Total Sweden ................... 405,653
United States -- 22.55%
U.S. Government Agency & Agency
Issued Mortgage Backed
Securities --
16.49%
Federal Home Loan Mortgage
Corp.,
10.00%, 05/15/2020 ............ $ 26,143 28,389
11.565%, 06/15/2021 ........... 1,311 31,884
6.50% , TBA (a) ................ 300,000 302,154
Federal National Mortgage
Association
13.00%, 11/01/2015 ............. 7,461 8,741
7.00%, 11/18/2015 (c) .......... 1,500,000 1,503,750
10.40%, 04/25/2019 ............. 43,894 48,366
8.77%, 03/17/2020 - Interest
Only ........................... 742,499 19,082
6.50%, 02/01/2026 .............. 254,739 256,489
8.15%, 02/25/2035 - Interest
Only ........................... 2,409,282 189,129
9.50%, 10/17/2036 - Interest
Only ........................... 4,240,793 117,894
6.00%, TBA (a) ................. 4,750,000 4,687,633
6.50%, TBA (a) ................. 1,700,000 1,711,152
-----------
8,904,663
Principal Market
Amount Value
------ -----
Government Securities (continued)
U.S. Treasury Bonds -- 0.30%
6.125%, 11/15/2027 ........... $ 100,000 $ 111,937
U.S. Treasury Inflation Index
Bond,
3.625%, 04/15/2028 (g) ....... 50,000 48,500
-----------
160,437
U.S. Treasury Notes -- 5.76%
6.375%, 03/31/2001 (g) ......... 100,000 103,656
6.625%, 03/31/2002 (c) ......... 1,000,000 1,057,030
5.875%, 09/30/2002 (c) ......... 800,000 831,496
5.625%, 12/31/2002 (c) ......... 250,000 258,320
5.25%, 08/15/2003 (g) .......... 100,000 102,547
5.50%, 02/15/2008 (g) .......... 500,000 529,845
4.75%, 11/15/2008 (g) .......... 225,000 226,757
-----------
3,109,651
-----------
Total United States ............ 12,174,751
Venezuela -- 2.08%
Republic of Venezuela
6.125%, 03/31/2007 (f) VEB...... 404,760 251,477
6.625%, 12/18/2007 (f) VEB...... 1,071,428 680,357
13.625%, 08/15/2018 VEB......... 250,000 192,500
-----------
Total Venezuela ................ 1,124,334
-----------
Total Government Securities
(cost $24,818,092) .......... 25,206,234
-----------
Asset Backed Securities -- 7.09%
Airplane Pass-through Trust,
10.875%,
03/15/2019 .................... $ 125,000 140,876
DLJ Commercial Mortgage Corp.
- Interest Only
8.24%, 06/10/2031 ............. 4,475,450 211,152
9.50%, 11/12/2031 (c) ......... 4,500,000 254,520
First Union Residential
Securitization
Transactions Inc., 7.00%,
08/25/2028 ...................... 99,125 92,806
GE Capital Mortgage Services
Inc.,
6.75%, 10/25/2028 (c) ......... 399,053 381,594
Green Tree Financial Corp.,
7.07%,
09/15/2007 (c) .............. 580,784 592,940
Mid-State Trust VI, 7.34%,
07/1/2035 (c)................ 823,078 847,253
PNC Mortgage Securities Corp.
6.734%, 07/25/2018 ............ 198,662 184,011
6.75%, 05/25/2028 ............. 149,070 140,126
6.838%, 05/25/2028 ............ 223,573 213,029
6.50%, 12/25/2028 ............. 549,127 516,866
6.25%, 12/26/2028 ............. 274,776 256,915
-----------
Total Asset Backed Securities
(cost $3,747,931) ........... 3,832,088
-----------
See notes to the financials statements.
<PAGE>
SALOMON BROTHERS/JNL GLOBAL BOND SERIES
SCHEDULE OF INVESTMENTS (continued)
Market
Shares Value
------ -----
Preferred Stocks -- 0.00%
Holding Companies -Diversified -
0.00%
TCR Holdings C .................. 241 $ 13
TCR Holdings D .................. 636 34
TCR Holdings E .................. 1,316 83
TCR Holdings B .................. 439 26
-----------
Total Preferred Stocks
(cost $156) ................. 156
-----------
Principal Market
Amount Value
------ -----
Short Term Investments -- 12.74%
Money Market Fund -- 0.00%
SSgA Money Market Fund, 4.85%
(b) ............................. $ 406 $ 406
Repurchase Agreements -- 12.74%
Repurchase Agreement with State
Street
Bank, 4.85% (Collateralized by
$6,490,000 U.S. Treasury Note,
6.25%,
due 02/15/2003, market value,
$7,017,313), acquired on
12/31/1998,
due 01/04/1999 ................. 6,878,000 6,878,000
------------
Total Short Term Investments
(cost $6,878,406) ........... 6,878,406
------------
Total Investments -- 100%
(cost $54,157,094) .............. $54,004,396
=============
- --------------------------------------------------------------------------------
(a) Investment purchased on a when-issued basis.
(b) Dividend yields change daily to reflect current market conditions. Rate is
the quoted yield as of December 31, 1998.
(c) Security pledged as collateral for investment purchased on a when-issued
basis.
(d) Denotes deferred interest security that receives no coupon payments until a
predetermined date at which time the stated coupon rate becomes effective.
(e) Coupon payment periodically increases over the life of the security. Rate
is in effect as of December 31, 1998.
(f) Coupon is indexed to six month Libor. Rate stated is in effect as of
December 31, 1998.
(g) All or a portion of this security has been loaned.
See notes to the financial statements.
<PAGE>
[SALOMON BROTHERS ASSET MANAGEMENT LOGO]
SALOMON BROTHERS/JNL HIGH YIELD BOND SERIES
SALOMON BROTHERS ASSET MANAGEMENT INC
PETER J. WILBY
OBJECTIVE:
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.
MONEY MANAGER COMMENTARY:
The Series returned 1.32% since its inception, versus 0.63% for the Salomon
Smith Barney High Yield Market Index.
The U.S. high yield bond market experienced a volatile year in 1998, compared to
recent years. Weakened global economies and financial markets negatively
affected the high yield market for both fundamental reasons as well as technical
market reasons. The market started out respectably but experienced a sharp
downward correction of 6.8% (as reported by Salomon Smith Barney High Yield
Index) in August as global assets, triggered by Russia's debt crisis, affected
all markets globally.
The first seven months of the year in the high yield market returned 5.99% and
were characterized by relative calm in both underlying credit quality and market
conditions. Market default statistics were consistent with 1997 at historically
low levels, characterizing reasonable credit quality for broad sectors of the
market. Simultaneously, the market was starting to experience a significant
weakening in operating results and credit quality from companies most vulnerable
to the global economic slowdown emanating from the Asian economic crisis. Driven
by global overcapacity and slackened demand, commodity prices worldwide were
tumbling, severely affecting companies in the energy and oil services sectors,
paper and forest products, steel and other metals and chemicals.
The first part of the year was also driven by strong technical market conditions
in high yield. A large financing calendar -- 691 new issues for the year for a
total of $138.9 billion -- was comfortably absorbed by the mutual fund inflows
asset allocations to high yield by institutional investors and structured
finance investments. Credit spreads, or the yield premium above U.S. treasury
bonds which the high yield market pays, gradually widened as treasury markets
rallied.
In August, extreme volatility hit the world's financial markets, including the
U.S. high yield bond market. Precipitated by the inability of Russia to
refinance its local treasury bills, a global "flight to quality" ensued, with
investors in a panic exiting riskier asset classes and buying U.S. treasury
bonds. The U.S. equity market, U.S. high yield, U.S. investment grade corporate
and mortgage bonds, and most notably emerging market bonds, declined materially
in price. This "flight to quality" was magnified by forced selling out on
leveraged investment vehicles, commonly known as "hedge funds", which had to
sell these investments to meet margin calls on borrowings.
By October, things had calmed down somewhat, and the U.S. high yield market
returned 3.50% for the fourth quarter as sell pressure abated and credit spreads
declined. After two very slow, almost dormant months for financing, better
quality companies were able to re-enter the market for financing, although the
previously restored commodity cyclical companies still faced difficulty.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
SALOMON BROTHERS/JNL HIGH YIELD BOND SERIES AND THE
SALOMON SMITH BARNEY HIGH YIELD MARKET INDEX
[GRAPHIC]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
03/02/98 $10,000.00 $10,000.00
03/31/98 $10,050.00 $10,107.96
04/30/98 $10,080.00 $10,163.00
05/31/98 $10,110.00 $10,190.16
06/30/98 $10,140.00 $10,212.74
07/31/98 $10,190.00 $10,294.59
08/31/98 $9,760.00 $9,604.50
09/30/98 $9,830.00 $9,723.05
10/31/98 $9,690.00 $9,589.33
11/30/98 $10,160.00 $10,070.56
12/31/98 $10,132.37 $10,063.26
TOTAL RETURN
FOR THE PERIOD FROM
MARCH 2, 1998* TO
DECEMBER 31, 1998 ... 1.32%
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT RETURN AND
PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY
BE MORE OR LESS THAN THEIR ORIGINAL COST.
PERFORMANCE NUMBERS ARE NET OF ALL SERIES OPERATING EXPENSES, BUT DO NOT REFLECT
THE DEDUCTION OF INSURANCE CHARGES.
- ---------------
* Commencement of operations.
<PAGE>
JNL Series Trust
Salomon Brothers/JNL High Yield Bond Series
Statement of Assets and Liabilities
December 31, 1998
Assets
Investments in securities, at cost ........ $ 7,576,267
================
Investments in securities, at value ....... $ 7,273,791
Interest receivable ....................... 136,300
----------------
Total assets .............................. 7,410,091
----------------
Liabilities
Payables:
Investment advisory fees ............... 4,939
Fund shares redeemed ................... 95
Other liabilities ......................... 6,943
----------------
Total liabilities ......................... 21,977
================
Net assets ................................ $ 7,388,114
================
Net assets consist of:
Paid-in capital ........................... $ 7,702,539
Undistributed net investment income ....... 1,298
Accumulated net realized loss
on investments ......................... (13,247)
Net unrealized depreciation on
investments ............................... (302,476)
================
Net assets ................................ $ 7,388,114
================
Total shares outstanding (no par
value), unlimited shares authorized ....... 770,330
================
Net asset value, offering and
redemption price per share................. $ 9.59
================
Statement of Operations
For the Period Ended December 31, 1998*
Investment income
Interest ............................... $ 445,240
---------------
Expenses
Investment advisory fees ............... 40,840
Custodian fees ......................... 9,221
Portfolio accounting fees .............. 13,984
Professional fees ...................... 4,573
Other .................................. 2,007
---------------
Total operating expenses .................. 70,625
Less:
Reimbursement from Adviser ............. (22,127)
---------------
Net expenses .............................. 48,498
---------------
Net investment income ..................... 396,742
---------------
Realized and unrealized losses
Net realized loss on investments .......... (13,247)
Net change in unrealized depreciation
on investments ......................... (302,476)
---------------
Net realized and unrealized losses ........ (315,723)
---------------
Net increase in net assets
from operations ........................ $ 81,019
===============
- ----------------------------------------------------------
* For period beginning March 2, 1998 (commencement of operations).
See notes to the financial statements.
<PAGE>
JNL Series Trust
Salomon Brothers/JNL High Yield Bond Series
Statement of Changes in Net Assets
Period from
March 2,
1998* to
December 31,
1998
----------------
Operations:
Net investment income ................... $ 396,742
Net realized loss on investments ........ (13,247)
Net change in unrealized depreciation
on investments ....................... (302,476)
---------
Net increase in net assets from
operations ................................ 81,019
---------
Distributions to shareholders:
From net investment income .............. (395,444)
From net realized gains on
investment transactions .............. -
---------
Total distributions to shareholders ....... (395,444)
---------
Share transactions:
Proceeds from the sale of shares ........ 8,246,639
Reinvestment of distributions ........... 395,444
Cost of shares redeemed ................. (939,544)
---------
Net increase in net assets from share
transactions ........................... 7,702,539
---------
Net increase in net assets ................ 7,388,114
Net assets beginning of period ............ -
---------
Net assets end of period .................. $ 7,388,114
=========
Undistributed net investment income ....... $ 1,298
=========
Financial Highlights
Period from
March 2,
1998* to
December 31,
1998
----------------
Selected Per Share Data
Net asset value, beginning of period....... $ 10.00
----------------
Income from operations:
Net investment income ................... 0.54
Net realized and unrealized losses on
investments .......................... (0.41)
----------------
Total income from operations .............. 0.13
----------------
Less distributions:
From net investment income .............. (0.54)
From net realized gains on investment
transactions ......................... -
----------------
Total distributions ....................... (0.54)
----------------
Net decrease .............................. (0.41)
----------------
Net asset value, end of period ............ $ 9.59
================
Total Return (a) .......................... 1.32%
Ratios and Supplemental Data:
Net assets, end of period (in
thousands) .............................. $ 7,388
Ratio of net operating expenses to
average net assets (b) (c) .............. 0.95%
Ratio of net investment income to
average net assets (b) (c) .............. 7.80%
Portfolio turnover ...................... 37.45%
Ratio information assuming no expense
reimbursement:
Ratio of net operating expenses to
average net assets (b) .................. 1.39%
Ratio of net investment income to
average net assets (b) .................. 7.36%
- --------------------------------------------------------------------------------
* 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 period ended December 31, 1998.
(b) Annualized for the period ended December 31, 1998.
(c) Computed after giving effect to the Adviser's expense reimbursement.
See notes to the financial statements.
<PAGE>
SALOMON BROTHERS/JNL HIGH YIELD BOND SERIES
SCHEDULE OF INVESTMENTS
December 31, 1998
Principal Market
Amount Value
------ -----
Corporate Bonds -- 92.55%
Advertising -- 1.41%
SITEL Corp., 9.25%, 03/15/2006 ...... $125,000 $ 102,500
Aerospace & Defense-- 3.17%
BE Aerospace Inc., 8.00%,
03/01/2008 .......................... 125,000 122,500
Stellex Industries Inc., 9.50%,
11/01/2007 ......................... 125,000 107,813
230,313
Auto Manufacturers -- 1.75%
Navistar International Corp.,
8.00%,
02/01/2008 ......................... 125,000 127,188
Auto Parts & Equipment -- 1.21%
Breed Technologies Inc., (144a),
9.25%, 04/15/2008 .................. 100,000 88,000
Building Materials -- 1.62%
International Utility Structures
Inc.,
10.75%, 02/01/2008 ................. 125,000 117,500
Chemicals -- 3.14%
Octel Developments Plc, (144a),
10.00%, 05/01/2006 ................. 125,000 130,934
PCI Chemicals Canada Inc., 9.25%,
10/15/2007 ......................... 125,000 97,500
228,434
Commercial Services -- 5.20%
Iron Mountain Inc., 8.75%,
09/30/2009 .......................... 125,000 128,750
KinderCare Learning Centers Inc.,
9.50%, 02/15/2009 .................. 125,000 124,375
Protection One Inc., (144a),
8.125%,
01/15/2009 ......................... 125,000 125,000
----------
378,125
Cosmetics & Personal Care -- 0.99%
Revlon Worldwide Corp., Zero
Coupon,
03/15/2001 ......................... 125,000 71,875
Diversified Financial Services --
4.57% ContiFinancial Corp.
7.50%, 03/15/2002 .................. 50,000 35,954
8.125%, 04/01/2008 ................. 75,000 52,500
DVI Inc., 9.875%, 02/01/2004 ........ 125,000 120,000
Polymer Group Inc., 9.00%,
07/01/2007 ......................... 125,000 123,750
----------
332,204
Entertainment -- 3.48%
Park Place Entertainment Corp.,
(144a),
7.875%, 12/15/2005 ................. 125,000 125,000
Sun International Hotels Ltd.,
8.625%,
12/15/2007 ......................... 125,000 128,125
----------
253,125
Principal Market
Amount Value
------ -----
Corporate Bonds (continued)
Environmental Control -- 1.74%
Allied Waste North America,
(144a),
7.875%, 01/01/2009 ................. $125,000 $ 126,719
Food -- 5.16%
Ameriserve Food Distribution
Inc.,
10.125%, 07/15/2007 ................ 125,000 111,875
Jitney-Jungle Stores of America
Inc.,
12.00%, 03/01/2006 ................. 125,000 138,750
SC International Services Inc.,
9.25%,
09/01/2007 ......................... 125,000 125,000
----------
375,625
Health Care -- 6.66%
Dade International Inc., 11.125%,
05/01/2006 ......................... 125,000 137,500
Kinetic Concepts Inc., 9.625%,
11/01/2007 ......................... 125,000 119,688
Prime Medical Services Inc.,
8.75%,
04/01/2008 ......................... 125,000 117,500
Universal Hospital Services
Inc.,
10.25%, 03/01/2008 ................. 125,000 109,844
----------
484,532
Holding Companies-Diversified --
1.62%
High Voltage Engineering Corp.,
10.50%, 08/15/2004 ................. 125,000 118,125
Household Products -- 3.32%
Ekco Group Inc., 9.25%,
04/01/2006 .......................... 125,000 125,000
Indesco International Inc.,
9.75%,
04/15/2008 ......................... 125,000 116,563
----------
241,563
Lodging -- 1.67%
HMH Properties Inc., 7.875%,
08/01/2008 ......................... 125,000 121,719
Manufacturing -- 3.33%
Axiohm Transaction Solutions,
9.75%
10/01/2007 ......................... 125,000 118,125
Furon Co., 8.125%, 03/01/2008 ....... 125,000 123,750
----------
241,875
Media -- 13.61%
Adelphia Communications Corp.,
9.50%, 02/15/2004 .................. 100,000 105,500
Century Communications Corp.,
8.375%, 12/15/2007 ................. 125,000 133,750
CSC Holdings Inc., 9.25%,
11/01/2005 ......................... 125,000 134,375
Falcon Holding Group L.P.,
8.375%,
04/15/2010 ......................... 125,000 125,625
Hollinger International
Publishing Inc.,
9.25%, 03/15/2007 .................. 125,000 131,250
See notes to the financial statements.
<PAGE>
SALOMON BROTHERS/JNL HIGH YIELD BOND SERIES
SCHEDULE OF INVESTMENTS (continued)
Principal Market
Amount Value
------ -----
Corporate Bonds (continued)
Media (continued)
Mediacom LLC / Mediacom Capital
Corp.,
(144a), 8.50%, 04/15/2008 .......... $125,000 $ 127,969
United International Holdings
Inc., (Step-Up Bond), 10.75%,
02/15/2008(b) ...................... 200,000 106,000
World Color Press Inc., (144a),
8.375%,
11/15/2008 ......................... 125,000 125,000
----------
989,469
Metals & Mining -- 1.71%
AEI Holding Co., (144a), 10.50%,
12/15/2005 ......................... 125,000 124,688
Oil & Gas Producers -- 2.88%
Canadian Forest Oil Ltd., 8.75%,
09/15/2007 ......................... 100,000 94,000
Clark Refining & Marketing Inc.,
8.875%, 11/15/2007 ................. 125,000 115,781
----------
209,781
Packaging & Containers -- 5.28%
Ball Corp., (144a), 7.75%,
08/01/2006 .......................... 125,000 131,250
Delta Beverage Group Inc.,
9.75%,
12/15/2003 ......................... 125,000 130,312
Packaged Ice Inc., 9.75%,
02/01/2005 .......................... 125,000 122,813
----------
384,375
Pharmaceuticals -- 1.69%
NBTY Inc., 8.625%, 09/15/2007 ....... 125,000 122,656
Real Estate -- 2.91%
Forest City Enterprises Inc.,
8.50%,
03/15/2008 ......................... 125,000 125,000
Vencor Operating Inc., 9.875%,
05/01/2005 ......................... 100,000 86,750
----------
211,750
Retail -- 3.47%
Cole National Group Inc., 8.625%,
08/15/2007 ......................... 125,000
122,500
Leslie's Poolmart Inc., 10.375%,
07/15/2004 ....................... 125,000 129,688
----------
252,188
Principal Market
Amount Value
------ -----
Corporate Bonds (continued)
Telecommunications -- 6.79%
Centennial Cellular Operating
Co. LLC,
(144a), 10.75%, 12/15/2008 ......... $125,000 $ 125,938
MetroNet Communications Corp.,
(Step-
Up Bond), 9.95%, 06/15/2008 (b) .... 200,000 120,000
Nextel Communications, Inc.,
(Step-Up
Bond), 9.75%, 10/31/2007 (b) ....... 200,000 122,000
NTL Inc., (Step-Up Bond),
11.50%,
02/01/2006 (b) ..................... 150,000 126,000
----------
493,938
Tobacco -- 1.38%
North Atlantic Trading Inc.,
11.00%,
06/15/2004 ......................... 100,000 100,500
Transportation -- 2.79%
Atlantic Express Transportation
Corp.,
10.75%, 02/01/2004 ................. 100,000 101,500
Enterprises Shipholding Corp.,
8.875%,
05/01/2008 ......................... 125,000 101,761
----------
203,261
----------
Total Corporate Bonds
(cost $7,034,504) ............... 6,732,028
----------
Short Term Investments -- 7.45%
Money Market Fund -- 0.01%
SSgA Money Market Fund, 4.85% (a) ... 763 763
Repurchase Agreement -- 7.44%
Repurchase Agreement with State
Street
Bank, 4.85%, (Collateralized by
$515,000 U.S. Treasury Note,
6.25%,
due 02/15/2003, market value
$556,844), acquired on
12/31/1998, due
01/04/1999 ......................... 541,000 541,000
----------
Total Short Term Investments
(cost $541,763) ................. 541,763
----------
Total Investments -- 100%
(cost $7,576,267) ................... $7,273,791
==========
- --------------------------------------------------------------------------------
(a) Dividend yields change daily to reflect current market conditions. Rate is
the quoted yield as of December 31, 1998.
(b) Denoted 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>
[SALOMON BROTHERS ASSET MANAGEMENT LOGO]
SALOMON BROTHERS/JNL U.S. GOVERNMENT &
QUALITY BOND SERIES
SALOMON BROTHERS ASSET MANAGEMENT INC
ROGER LAVAN
OBJECTIVE:
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.
MONEY MANAGER COMMENTARY:
The Series returned 9.40% for 1998, placing it 1st out of 33 funds in its Lipper
category. The Series outperformance resulted from its shift into longer duration
bonds and a sizable allocation to Treasuries.
In January, we believed Asia's economic woes would slow economic growth in the
U.S. and push inflation lower. This would enable interest rates, in particular
long-term rates, to move modestly lower, pushing bond prices higher. To take
advantage of our expectations for lower interest rates and a flatter yield
curve, we moved the Series into a slightly long duration barbelled position
while overweighting discount mortgage securities.
We held this position until mid-August when it became apparent that the global
economy would slow down more than thought previously and the Federal Reserve
would ease monetary policy. We strategically reduced the Series' barbell
position by swapping long maturity Treasuries and mortgages into 5-year
Treasuries. The 5-year area of the Treasury curve often performs best just prior
to a Federal easing cycle and this time was no exception. To maintain duration,
we sold mortgage securities trading above par and bought discount pass-throughs.
During the fourth quarter, it became apparent to investors that the global
market crisis that began in mid-1997 had stabilized. A 75 basis point cut of the
Federal funds rate by the Federal Reserve restored investor confidence and
liquidity in the markets. The main strategy change in the Series was a
reallocation to mortgage pass-throughs from Treasuries.
After seven years of uninterrupted growth, the U.S. economy faces a period of
slowing expansion and threatened instability. Although key areas of economic
activity remain buoyant, gradual slowing remains a likely scenario for 1999. The
Federal Reserve will probably condition further easing on renewed
intensification of financial stress of evidence that demand pressures are
receding.
We expect interest rates to generally move lower in the first few months of the
year, followed by a gradual rise through the end of 1999. With the expectation
of further Federal Reserve easing, we look for the yield curve to steepen. As
such, long-term bonds may stabilize in a range centered on 5% as long-term
inflation expectations fall.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
SALOMON BROTHERS/JNL U.S. GOVERNMENT & QUALITY BOND SERIES
AND THE SALOMON BROTHERS TREASURY INDEX
[GRAPHIC]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
5/15 $10,000 $10,000
6/30 $10,277 $10,140
9/30 $10,449 $10,270
12/31/95 $10,934 $10,694
3/31 $10,691 $10,465
6/30 $10,737 $10,507
9/30 $10,916 $10,694
12/31/96 $11,232 $10,969
3/31 $11,142 $10,905
6/30 $11,522 $11,227
9/30 $11,911 $11,604
12/31/97 $12,249 $11,951
3/31 $12,435 $12,153
6/30 $12,764 $12,422
9/30 $13,494 $13,150
12/31/98 $13,475 $13,099
AVERAGE ANNUAL
TOTAL RETURN
1 year..................... 9.40%
Since inception * ......... 7.71%
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT RETURN AND
PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY
BE MORE OR LESS THAN THEIR ORIGINAL COST.
PERFORMANCE NUMBERS ARE NET OF ALL SERIES OPERATING EXPENSES, BUT DO NOT REFLECT
THE DEDUCTION CHARGES.
- ------------
* Inception date May 15, 1995.
<PAGE>
JNL Series Trust
Salomon Brothers/JNL U.S. Government & Quality Bond Series
<PAGE>
Statement of Assets and Liabilities
December 31, 1998
Assets
Investments in securities, at cost ........ $ 77,504,553
================
Investments in securities, at value ....... $ 78,837,893
Receivables:
Interest ............................... 544,371
Fund shares sold ....................... 101,370
Reimbursement from Adviser ............. 1,909
Collateral for securities loaned .......... 13,948,893
----------------
Total assets .............................. 93,434,436
----------------
Liabilities
Payables:
Investment advisory fees ............... 37,279
Fund shares redeemed ................... 5,165
Investment securities purchased ........ 15,638,922
Return of collateral for securities
loaned .................................... 13,948,893
Other liabilities ......................... 19,563
----------------
Total liabilities ......................... 29,649,822
================
Net assets ................................ $ 63,784,614
================
Net assets consist of:
Paid-in capital ........................... $ 62,427,321
Undistributed net investment income ....... -
Accumulated net realized gain
on investments ......................... 23,953
Net unrealized appreciation on
investments ............................... 1,333,340
----------------
Net assets ................................ $ 63,784,614
================
Total shares outstanding (no par
value), unlimited shares authorized ....... 5,720,915
================
Net asset value, offering and
redemption price per share................. 11.15
================
Statement of Operations
For the Year Ended December 31, 1998
Investment income
Interest ............................... $ 2,718,271
---------------
Expenses
Investment advisory fees ............... 287,473
Custodian fees ......................... 18,817
Portfolio accounting fees .............. 24,044
Professional fees ...................... 13,481
Other .................................. 9,323
---------------
Total operating expenses 353,138
Less:
Reimbursement from Adviser ............. (4,063)
---------------
Net operating expenses before
interest expense ....................... 349,075
Interest expense ....................... 178,388
---------------
Net expenses .............................. 527,463
---------------
Net investment income ..................... 2,190,808
---------------
Realized and unrealized gains
Net realized gain on investments .......... 773,031
Net change in unrealized appreciation
on investments ......................... 644,456
---------------
Net realized and unrealized gains ......... 1,417,487
---------------
Net increase in net assets
from operations ........................ $ 3,608,295
===============
See notes to the financial statements.
<PAGE>
JNL Series Trust
Salomon Brothers/JNL U.S. Government & Quality Bond Series
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year ended December 31,
----------------------------------
1998 1997
---------------- ----------------
<S> <C> <C>
Operations:
Net investment income ...................................................... $ 2,190,808 $ 1,013,295
Net realized gain on investments ........................................... 773,031 13,329
Net change in unrealized appreciation on investments ....................... 644,456 639,103
---------------- ----------------
---------------- ----------------
Net increase in net assets from operations ................................... 3,608,295 1,665,727
---------------- ----------------
Distributions to shareholders:
From net investment income ................................................. (2,196,524) (965,070)
From net realized gains on investment transactions ......................... (771,611) (43,260)
---------------- ----------------
Total distributions to shareholders .......................................... (2,968,135) (1,008,330)
---------------- ----------------
Share transactions:
Proceeds from the sale of shares ........................................... 51,208,295 18,344,542
Reinvestment of distributions .............................................. 2,968,135 986,266
Cost of shares redeemed .................................................... (16,420,509) (4,431,412)
---------------- ----------------
Net increase in net assets from share transactions ........................... 37,755,921 14,899,396
---------------- ----------------
Net increase in net assets ................................................... 38,396,081 15,556,793
Net assets beginning of period ............................................... 25,388,533 9,831,740
---------------- ----------------
Net assets end of period ..................................................... $ 63,784,614 $ 25,388,533
================ ================
Undistributed net investment income .......................................... $ - $ 5,716
================ ================
</TABLE>
See notes to the financial statements.
<PAGE>
JNL Series Trust
Salomon Brothers/JNL U.S. Government & Quality Bond Series
Financial Highlights
<TABLE>
<CAPTION>
Period from Period from
April 1, May 15,
Year ended December 31, 1996 to 1995* to
------------------------------- December 31, March 31,
1998 1997 1996 1996
--------------- ------------------------------ -------------
<S> <C> <C> <C> <C>
Selected Per Share Data
Net asset value, beginning of period .............................. $ 10.69 $ 10.20 $ 10.09 $ 10.00
--------------- --------------- -------------- -------------
Income from operations:
Net investment income ........................................... 0.41 0.44 0.24 0.45
Net realized and unrealized gains on investments ................ 0.60 0.49 0.24 0.02
--------------- --------------- -------------- -------------
Total income from operations ...................................... 1.01 0.93 0.48 0.47
--------------- --------------- -------------- -------------
Less distributions:
From net investment income ...................................... (0.41) (0.42) (0.34) (0.34)
From net realized gains on investment transactions .............. (0.14) (0.02) (0.03) (0.04)
--------------- --------------- -------------- -------------
Total distributions ............................................... (0.55) (0.44) (0.37) (0.38)
--------------- --------------- -------------- -------------
Net increase ...................................................... 0.46 0.49 0.11 0.09
--------------- --------------- -------------- -------------
Net asset value, end of period .................................... $ 11.15 $ 10.69 $ 10.20 10.09
=============== =============== ============== =============
Total Return (a) .................................................. 9.40% 9.16% 4.82% 4.65%
Ratios and Supplemental Data:
Net assets, end of period (in thousands) ........................ $ 63,785 $ 25,389 $ 9,832 $ 3,007
Ratio of net operating expenses to average net assets (b) (c) ... 0.85% 0.85% 0.84% 0.84%
Ratio of net expenses to average net assets (c) ................. 1.28% 0.94% - -
Ratio of net investment income to average net assets (b) (c) .... 5.33% 5.99% 5.72% 5.41%
Portfolio turnover .............................................. 429.70% 378.59% 218.50% 253.37%
Ratio information assuming no expense reimbursement or
fees paid indirectly:
Ratio of net operating expenses to average net assets (b) ...... 0.86% 0.96% 1.37% 2.53%
Ratio of net investment income to average net assets (b) ....... 5.32% 5.88% 5.19% 3.72%
- ------------------------------------------------------------------------------------------------------------------------------------
</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 Adviser's expense reimbursement and
fees paid indirectly.
<PAGE>
SALOMON BROTHERS/JNL U.S. GOVERNMENT & QUALITY BOND SERIES
SCHEDULE OF INVESTMENTS
December 31, 1998
Principal Market
Amount Value
------ -----
Corporate Bonds - 0.90%
Banks - 0.17%
US Bank NA, 5.70%, 12/15/2008 . $ 140,000 138,597
Oil & Gas Producers - 0.73%
Occidental Petroleum Corp.,
9.25%,
08/01/2019 (c) .................
500,000 574,080
-----------
Total Corporate Bonds
(cost $721,507) .............. 712,677
-----------
U.S. Government Securities - 79.13%
U.S. Government Agencies - 48.02%
Federal Home Loan Bank
5.94%, 06/13/2000 (c) .......... 300,000 303,936
5.80%, 09/02/2008 .............. 3,500,000 3,622,500
Federal Home Loan Mortgage Corp.
6.00%, 09/01/2010 (c) .......... 3,350 3,371
11.75%, 01/01/2011 (c) ......... 3,765 4,226
7.00%, 07/01/2011 (c) .......... 96,834 98,892
6.50%, 08/01/2013 .............. 474,293 481,256
10.00%, 03/01/2016 ............. 1,300,000 1,413,750
8.25%, 04/01/2017 (c) .......... 287,326 301,031
10.50%, 06/01/2020 (c) ......... 675,962 748,905
8.00%, 07/01/2020 (c) .......... 912,021 955,989
6.247%, 03/17/2021 ............. 760,000 784,700
8.50%, 03/15/2024 (c) .......... 1,750,000 1,862,578
6.00%, 11/01/2028 .............. 4,536,629 4,481,327
6.00%, TBA (a) ................. 4,000,000 3,951,240
Federal National Mortgage
Association
14.50%, 11/01/2014 (c) ......... 5,077 6,140
12.50%, 09/01/2015 (c) ......... 16,560 19,375
13.00%, 11/01/2015 (c) ......... 15,917 18,648
12.00%, 01/01/2016 (c) ......... 454,115 514,153
12.00%, 01/01/2016 (c) ......... 14,743 17,236
12.50%, 01/15/2016 (c) ......... 236,274 276,441
11.50%, 04/01/2019 (c) ......... 4,843 5,415
10.50%, 08/01/2020 (c) ......... 92,868 101,574
6.50%, 03/01/2026 (c) .......... 334,626 336,925
7.00%, 05/01/2026 (c) .......... 244,161 249,120
9.00%, 08/01/2026 .............. 413,906 437,835
6.975%, 12/28/2028 ............. 1,735,170 1,752,522
6.527%, 05/25/2030 (c) ......... 2,100,000 2,178,750
6.00%, TBA (a) ................. 5,500,000 5,427,785
6.50%, TBA (a) ................. 4,100,000 4,126,896
7.00%, TBA (a) ................. 2,100,000 2,142,000
Government National Mortgage
Association
13.50%, 07/15/2010 (c) ......... 153,833 177,576
8.50%, 01/15/2018 (c) .......... 200,487 214,032
Student Loan Marketing
Association,
7.50%, 03/08/2000 (c) .......... 400,000 411,376
Principal Market
Amount Value
------ -----
U.S. Government Securities
(continued)
U.S. Government Agencies (continued)
VENDEE Mortgage Trust, 7.25%,
10/15/2010 (c) ................ $ 436,400 $ 436,670
-----------
37,864,170
U.S. Treasury Bonds - 7.26%
U.S. Treasury Bonds
6.625%, 02/15/2027 (c) ....... 2,350,000 2,779,603
6.375%, 08/15/2027 (d) ....... 1,000,000 1,149,370
5.25%, 11/15/2028 ............ 1,750,000 1,791,563
-----------
5,720,536
U.S. Treasury Notes - 23.85%
U.S. Treasury Notes
6.50%, 05/31/2001 (c) .......... 100,000 104,172
6.25%, 08/31/2002 (c) .......... 100,000 105,109
5.375%, 06/30/2003 (d) ......... 2,500,000 2,572,650
6.625%, 05/15/2007 (d) ......... 2,150,000 2,417,740
6.125%, 08/15/2007 (d) ......... 350,000 382,267
5.50%, 02/15/2008 (c) .......... 1,000,000 1,059,690
5.625%, 05/15/2008 (d) ......... 10,450,000 11,150,464
4.75%,11/15/2008 (d) ........... 1,000,000 1,007,810
-----------
18,799,902
-----------
Total U.S. Government
Securities
(cost $61,042,438) ........... 62,384,608
-----------
Short Term Investments - 19.97%
Food - 3.81%
Safeway Inc., 6.00%, 01/06/1999 3,000,000 2,997,500
Money Market Fund - 0.00%
SSgA Money Market Fund, 4.85%,
(b) ............................. 108 108
Repurchase Agreements - 16.16%
Repurchase agreement with State
Street Bank, 4.85%, (Collateralized
by $5,890,000 U.S. Treasury Note
6.25%, due 02/15/2003, market
value $6,368,563), acquired on
12/31/1998, due 01/04/1999 ...... 6,243,000 6,243,000
Repurchase agreement with Swiss
Bank, 4.75%, (Collateralized by
$5,463,000 U.S. Treasury Note 7.25%,
due 05/15/2016 market value
$6,630,716), acquired on 12/31/1998,
due 01/04/1999 .................. 6,500,000 6,500,000
-----------
12,743,000
-----------
Total Short Term Investments
(cost $15,740,608) ........... 15,740,608
-----------
Total Investments -- 100%
(cost $77,504,553) .............. $78,837,893
===========
- --------------------------------------------------------------------------------
(a) Investment purchased on a when-issued basis.
(b) Dividend yields change daily to reflect current market conditions. Rate
stated is the yield quoted as of December 31, 1998.
(c) Security pledged as collateral for investments purchased on a when-issued
basis.
(d) All or a portion of this security has been loaned.
See notes to the financial statements.
<PAGE>
T. ROWE PRICE/JNL ESTABLISHED GROWTH SERIES
T. ROWE PRICE ASSOCIATES, INC.
[T. ROWE PRICE LOGO] ROBERT W. SMITH
OBJECTIVE:
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.
MONEY MANAGER COMMENTARY:
The Series return of 27.78% outperformed the Lipper VA Growth Fund Average's
return of 24.94%, but slightly trailed the S&P 500 Index's return of 28.58% for
the year ended December 31, 1998. The narrowness of the S&P 500 Index continued
as most of the performance came from the top 50 blue chip stocks. This was also
true for the Series as the smaller companies in the portfolio continued to lag.
International holdings also continued to underperform slightly.
Over the last six months many negative developments attempted to stand in the
way of the bull market and the robust U.S. economy. Russia defaulted on its
loans, causing panic in emerging markets and a looming credit crunch both here
and abroad. Before much damage could be inflicted on the U.S. economy, the
Federal Reserve Bank stepped in by lowering rates in the U.S. several times, and
the IMF put a package together to stabilize Latin America. This calmed the
market and restored consumer confidence. While the manufacturing sector slowed
noticeably, other elements of the economy remained relatively strong. This
calming effort, combined with the public's insatiable appetite for stocks, drove
the market up sharply at year-end, surpassing highs reached in July.
Several of our large holdings did quite well. America Online, which was
purchased early in the year, performed exceedingly well. Network Associates,
EMC, Microsoft, MCI WorldCom, and Intel also added nicely to returns. In other
sectors, the Series was helped by our large positions in Federal Home Loan
Mortgage Corp., Safeway, Home Depot, Philip Morris, and Danaher. On the
international side, ACE Ltd., Wolters Kluwer, and Hutchison Whampoa were
positive contributors.
Many of our financial stocks detracted from performance. Trading activities and
poor foreign loans affected Citigroup, and general soft markets negatively
affected our insurance holdings. As usual, a few earnings disappointments, like
Parametric Technology and United HealthCare, also impacted returns. In most
cases we held or added to these positions.
The U.S. stock market has continued to advance despite many efforts to slow it
down. The Federal Reserve Bank continues to masterfully steer the economic ship,
and U.S. companies continue to be world leaders and shareholder focused. On the
negative side, valuations are extreme, industrial America is troubled, and
consumers continue to spend and not save. In addition, economies around the
world appear to remain volatile. While the market was rewarded with strong
returns in 1998, earnings and cash flow at companies showed little growth.
Over time, stocks cannot continue to move upward at a faster rate than the
underlying cash flow. This could produce lower stock market returns in the
period ahead. We do, however, feel confident that the companies that make up
your portfolio will continue to grow to their "true value" faster than the
overall market.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
T. ROWE PRICE/JNL ESTABLISHED GROWTH SERIES AND THE S&P 500 INDEX
[GRAPHIC]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
5/15 $10,000 $10,000
6/30 $10,760 $10,356
9/30 $11,720 $11,179
12/31/95 $12,146 $11,851
3/31 $12,823 $12,487
6/30 $13,376 $13,046
9/30 $14,019 $13,448
12/31/96 $14,890 $14,568
3/31 $14,949 $14,958
6/30 $17,510 $17,567
9/30 $18,731 $18,882
12/31/97 $19,277 $19,424
3/31 $22,227 $22,134
6/30 $22,597 $22,863
9/30 $19,968 $20,593
12/31/98 $24,633 $24,975
AVERAGE ANNUAL
TOTAL RETURN
1 year .................. 27.78%
Since inception * ....... 28.14%
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT RETURN AND
PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY
BE MORE OR LESS THAN THEIR ORIGINAL COST.
PERFORMANCE NUMBERS ARE NET OF ALL SERIES OPERATING EXPENSES, BUT DO NOT REFLECT
THE DEDUCTION INSURANCE CHARGES.
- ------------
* Inception date May 15, 1995.
<PAGE>
JNL Series Trust
T. Rowe Price/JNL Established Growth Series
<PAGE>
Statement of Assets and Liabilities
December 31, 1998
Assets
Investments in securities, at cost ........ $ 172,883,313
================
Investments in securities, at value ....... $ 218,341,838
Foreign currency .......................... 9,014
Receivables:
Dividends and interest ................. 146,489
Forward foreign currency
exchange contracts .................. 374
Foreign taxes recoverable .............. 7,943
Fund shares sold ....................... 194,991
Investment securities sold ............. 875,343
Collateral for securities loaned .......... 15,465,947
----------------
Total assets .............................. 235,041,939
----------------
Liabilities
Payables:
Investment advisory fees ............... 145,219
Fund shares redeemed ................... 69,799
Investment securities purchased ........ 2,721,724
Return of collateral for securities
loaned .................................... 15,465,947
Other liabilities ......................... 40,021
----------------
Total liabilities ......................... 18,442,710
================
Net assets ................................ $ 216,599,229
================
Net assets consist of:
Paid-in capital ........................... $ 166,906,385
Undistributed net investment loss ......... (7,235)
Accumulated net realized gain on
investments and foreign currency
related items ..... .................... 4,241,358
Net unrealized appreciation on:
Investments ............................ 45,458,525
Foreign currency related items ......... 196
================
Net assets ................................ $ 216,599,229
================
Total shares outstanding (no par
value), unlimited shares authorized ....... 11,364,852
================
Net asset value, offering and
redemption price per share ................ $ 19.06
================
Statement of Operations
For the Year Ended December 31, 1998
Investment income
Dividends .............................. $ 1,766,201
Interest ............................... 522,999
Foreign tax withholding ................ (47,760)
----------------
Total investment income ................... 2,241,440
----------------
Expenses
Investment advisory fees ............... 1,427,655
Custodian fees ......................... 54,991
Portfolio accounting fees .............. 24,408
Professional fees ...................... 47,865
Other .................................. 46,561
----------------
Total operating expenses .................. 1,601,480
Less:
Reimbursement from Adviser ............. -
----------------
Net expenses .............................. 1,601,480
----------------
Net investment income ..................... 639,960
----------------
Realized and unrealized gains (losses)
Net realized gain (loss) on:
Investments ............................ 12,647,433
Foreign currency related items ......... (77,630)
Net change in unrealized appreciation on:
Investments ............................ 27,869,207
Foreign currency related items ......... 925
----------------
Net realized and unrealized gains ......... 40,439,935
----------------
Net increase in net assets
from operations ........................ $ 41,079,895
================
See notes to the financial statements.
<PAGE>
JNL Series Trust
T. Rowe Price/JNL Established Growth Series
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year ended December 31,
----------------------------------
1998 1997
---------------- ----------------
<S> <C> <C>
Operations:
Net investment income ........................................................ $ 639,960 $ 334,356
Net realized gain (loss) on:
Investments ................................................................ 12,647,433 5,371,177
Foreign currency related items ............................................. (77,630) (22,021)
Net change in unrealized appreciation (depreciation) on:
Investments ................................................................ 27,869,207 13,594,661
Foreign currency related items ............................................. 925 (785)
---------------- ----------------
Net increase in net assets from operations ..................................... 41,079,895 19,277,388
---------------- ----------------
Distributions to shareholders:
From net investment income ................................................... (627,111) (250,893)
From net realized gains on investment transactions ........................... (9,129,666) (4,612,029)
---------------- ----------------
Total distributions to shareholders ............................................ (9,756,777) (4,862,922)
---------------- ----------------
Share transactions:
Proceeds from the sale of shares ............................................. 88,065,942 84,604,291
Reinvestment of distributions ................................................ 9,756,777 4,813,632
Cost of shares redeemed ...................................................... (36,568,552) (12,101,386)
---------------- ----------------
Net increase in net assets from share transactions ............................. 61,254,167 77,316,537
---------------- ----------------
Net increase in net assets ..................................................... 92,577,285 91,731,003
Net assets beginning of period ................................................. 124,021,944 32,290,941
---------------- ----------------
Net assets end of period ....................................................... $ 216,599,229 $ 124,021,944
================ ================
Undistributed net investment income (loss) ..................................... $ (7,235) $ 57,546
================ ================
</TABLE>
See notes to the financial statements.
<PAGE>
JNL Series Trust
T. Rowe Price/JNL Established Growth Series
Financial Highlights
<TABLE>
<CAPTION>
Period from Period from
April 1, May 15,
Year ended December 31, 1996 to 1995* to
------------------------------- December 31, March 31,
1998 1997 1996 1996
------------------------------- --------------- ---------------
<S> <C> <C> <C> <C>
Selected Per Share Data
Net asset value, beginning of period .............................. $ 15.62 $ 12.56 $ 11.36 $ 10.00
---------------- --------------- --------------- ---------------
Income from operations:
Net investment income ........................................... 0.05 0.06 0.03 0.07
Net realized and unrealized gains on investments and
foreign currency related items ................................ 4.29 3.64 1.81 2.68
---------------- --------------- --------------- ---------------
Total income from operations ...................................... 4.34 3.70 1.84 2.75
---------------- --------------- --------------- ---------------
Less distributions:
From net investment income ...................................... (0.06) (0.03) (0.04) (0.06)
From net realized gains on investment transactions .............. (0.84) (0.61) (0.09) (1.33)
Return of capital ............................................... - - (0.51) -
---------------- --------------- --------------- ---------------
Total distributions ............................................... (0.90) (0.64) (0.64) (1.39)
---------------- --------------- --------------- ---------------
Net increase ...................................................... 3.44 3.06 1.20 1.36
---------------- --------------- --------------- ---------------
Net asset value, end of period .................................... $ 19.06 $ 15.62 $ 12.56 $ 11.36
================ =============== =============== ===============
Total Return (a) .................................................. 27.78% 29.47% 16.12% 28.23%
Ratios and Supplemental Data:
Net assets, end of period (in thousands) ........................ $ 216,599 $ 124,022 $ 32,291 $ 8,772
Ratio of net operating expenses to average net assets (b) (c) ... 0.95% 0.98% 1.00% 1.00%
Ratio of net investment income to average net assets (b) (c) .... 0.38% 0.43% 0.59% 0.75%
Portfolio turnover .............................................. 54.93% 47.06% 36.41% 101.13%
Ratio information assuming no expense reimbursement or
fees paid indirectly:
Ratio of net operating expenses to average net assets (b) ....... 0.95% 0.98% 1.11% 2.09%
Ratio of net investment income (loss) to average net assets (b) . 0.38% 0.43% 0.48% (0.34)%
- ----------------------------------------------------------------------------------------------------------------------------------
</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 Adviser's expense reimbursement and
fees paid indirectly.
<PAGE>
T. ROWE PRICE/JNL ESTABLISHED GROWTH SERIES
SCHEDULE OF INVESTMENTS
December 31, 1998
Market
Shares Value
------ -----
Common Stocks - 94.26%
Canada - 1.01%
Insurance - 1.01%
Fairfax Financial Holdings
Ltd.(144a)(a) ................... 4,700 $ 1,660,451
Fairfax Financial Holdings 1,600 536,997
(144a) (a) ......................
-----------
Total Canada .................. 2,197,448
Germany - 0.34%
Pharmaceuticals - 0.34%
Gehe AG ......................... 10,900 752,130
Hong Kong - 0.86%
Banks - 0.24%
HSBC Holdings Plc ............... 21,000 529,906
Holding Companies - Diversified -
0.62%
Hutchison Whampoa Ltd. .......... 191,100 1,344,281
-----------
Total Hong Kong ............... 1,874,187
Italy - 0.54%
Telecommunications - 0.54%
Telecom Italia SPA .............. 138,900 1,184,487
Mexico - 0.25%
Forest Products & Paper - 0.25%
Kimberly-Clark de Mexico SA ..... 172,300 549,579
Netherlands - 1.96%
Computers - 0.41%
Getronics NV .................... 18,068 894,408
Food - 0.23%
Koninklijke Ahold NV ............ 13,800 509,778
Media - 1.32%
Verenigde Nederlandse
Utgeversbedrijven ............ 42,100 1,586,565
Wolters Kluwer NV ............... 6,100 1,304,615
-----------
2,891,180
-----------
Total Netherlands ............. 4,295,366
Switzerland - 1.27%
Banks - 0.28%
UBS AG (a) ...................... 2,000 614,399
Pharmaceuticals - 0.99%
Novartis ........................ 853 1,676,567
Roche Holding AG ................ 40 488,025
-----------
2,164,592
-----------
Total Switzerland ............. 2,778,991
Market
Shares Value
------ -----
Common Stocks (continued)
United Kingdom - 2.18%
Commercial Services - 0.54%
Rentokil Initial Plc ............ 155,800 $1,177,754
Holding Companies - Diversified -
1.14%
Tomkins Plc ..................... 521,900 2,479,870
Pharmaceuticals - 0.50%
Zeneca Group Plc ................ 25,200 1,097,764
-----------
Total United Kingdom .......... 4,755,388
United States - 85.85%
Advertising - 0.94%
Omnicom Group Inc. .............. 35,100 2,035,800
Aerospace & Defense - 1.16%
AlliedSignal Inc. ............... 57,000 2,525,812
Banks - 5.66%
Bank of New York Co. Inc. ....... 57,800 2,326,450
BankAmerica Corp. ............... 33,049 1,987,071
First Union Corp. ............... 37,900 2,304,794
Mellon Bank Corp. ............... 11,300 776,875
Toronto-Dominion Bank ........... 16,200 571,050
Wells Fargo Co. ................. 109,900 4,389,131
-----------
12,355,371
Beverages - 1.48%
Coca-Cola Co. ................... 14,200 949,625
PepsiCo Inc. .................... 56,000 2,292,500
-----------
3,242,125
Biotechnology - 1.49%
Biogen Inc. (a) ................. 18,700 1,552,100
Genentech Inc. (a) .............. 21,300 1,697,344
-----------
3,249,444
Building Materials - 0.78%
Masco Corp. ..................... 58,300 1,676,124
Commercial Services - 1.18%
Cendant Corp. ................... 35,700 680,531
Gartner Group Inc. (a) (c) ...... 44,000 935,000
McKesson Corp. (c) .............. 12,200 964,563
-----------
2,580,094
Computers - 3.56%
Ascend Communications Inc. (a)
(c) ............................. 18,000 1,183,500
Cisco Systems Inc. (a) .......... 24,100 2,236,780
Dell Computer Corp (a) .......... 17,900 1,310,055
EMC Corp. (c) ................... 20,700 1,759,500
Hewlett-Packard Co. ............. 18,800 1,284,275
-----------
7,774,110
See notes to the financial statements.
<PAGE>
T. ROWE PRICE/JNL ESTABLISHED GROWTH SERIES
SCHEDULE OF INVESTMENTS (continued)
Market
Shares Value
------ -----
Common Stocks (continued)
United States (continued)
Cosmetics & Personal Care - 1.68%
Gillette Co. .................... 16,600 $801,988
Kimberly-Clark Corp. ............ 35,600 1,940,200
Procter & Gamble Co. ............ 10,200 931,388
-------------
3,673,576
Diversified Financial Services -
7.03%
Associates First Capital Corp. .. 39,400 1,669,575
Citigroup Inc. .................. 65,650 3,249,675
Federal Home Loan Mortgage Corp. 103,000 6,637,063
Federal National Mortgage
Association ..................... 41,600 3,078,400
Morgan Stanley Dean Witter & Co. 10,100 717,100
-------------
15,351,813
Electronics - 1.02%
Maxim Integrated Products Inc.
(a) (c) ......................... 51,000 2,228,063
Entertainment - 0.37%
Mirage Resorts Inc. (a) (c) ..... 54,100 808,118
Environmental Control - 1.28%
Waste Management Inc ............ 60,000 2,797,500
Food - 2.07%
Safeway Inc. (a) ................ 53,400 3,254,063
Sara Lee Corp. .................. 44,600 1,257,163
-------------
4,511,226
Healthcare - 2.59%
Guidant Corp..................... 7,300 804,825
HEALTHSOUTH Corp. (a) (c) ....... 65,600 1,012,700
Johnson & Johnson Co. ........... 20,200 1,694,275
United HealthCare Corp. ......... 49,700 2,140,206
-------------
5,652,006
Diversified Holding Companies -
1.19%
Berkshire Hathaway Inc. (a) (c) . 37 2,590,000
Household Products - 0.27%
Newell Co. (c) .................. 6,100 251,624
Unilever NV-- NYS ............... 4,100 340,043
-------------
591,667
Insurance - 5.71%
ACE Ltd. ........................ 69,800 2,403,737
Aetna Inc. ...................... 14,600 1,147,925
AMBAC Financial Group Inc. ...... 18,100 1,089,394
Exel Limited .................... 10,600 795,000
Mutual Risk Management Ltd. (c) . 47,300 1,850,612
PartnerRe Ltd. .................. 48,300 2,209,725
Travelers Property Casualty
Corp. ........................... 18,400 570,400
UNUM Corp. ...................... 41,300 2,410,888
-------------
12,477,681
Market
Shares Value
------ -----
Common Stocks (continued)
United States (continued)
Leisure Time - 0.78%
Carnival Corp. .................. 19,600 $ 940,800
Hasbro Inc. ..................... 21,100 762,238
-------------
1,703,038
Lodging - 0.57%
Starwood Hotels & Resorts (a) ... 55,300 1,254,619
Manufacturing - 6.35%
Corning Inc. .................... 3,800 171,000
Danaher Corp. ................... 54,900 2,981,756
General Electric Co. ............ 52,100 5,317,456
Teleflex Inc. ................... 31,800 1,450,874
Tyco International Ltd. ......... 52,262 3,942,515
-------------
13,863,601
Media - 4.72%
CBS Corp. (a) ................... 67,000 2,194,250
Clear Channel Communications
Inc. ............................ 19,900 1,084,550
Cox Communications Inc. (a) (c) . 14,700 1,016,138
Fox Entertainment Group (a) ..... 67,300 1,695,119
Infinity Broadcasting Corp. "A"
(a) ............................. 41,000 1,122,375
Jacor Communications Inc. (a)
(c) ............................. 1,800 115,875
Time Warner Inc. ................ 16,800 1,042,650
Tribune Co. ..................... 22,100 1,458,600
Walt Disney Co. ................. 19,000 570,000
-------------
10,299,557
Oil & Gas Producers - 3.13%
Chevron Corp. ................... 16,600 1,376,763
Halliburton Co. ................. 32,400 959,850
Mobil Co. ....................... 22,500 1,960,313
Royal Dutch Petroleum Co. - NYS . 53,000 2,537,375
-------------
6,834,301
Pharmaceuticals - 7.57%
American Home Products Corp. .... 25,400 1,430,338
Bristol-Myers Squibb Co. ........ 23,300 3,117,831
Eli Lilly & Co. ................. 27,100 2,408,513
Merck & Co. Inc. ................ 20,900 3,086,669
Pfizer Inc. .................... 23,100 2,897,606
Schering-Plough Corp. .......... 21,000 1,160,250
Warner-Lambert Co. ............. 32,400 2,436,075
-------------
16,537,282
Real Estate - 0.92%
Crescent Real Estate Equities
Co. ............................. 40,300 926,900
Security Capital U.S. Realty (a) 108,800 1,077,120
-------------
2,004,020
Retail - 5.03%
CVS Corp. ....................... 18,972 1,043,460
Fred Meyer Inc. (a) ............. 30,100 1,813,525
Home Depot Inc. ................. 34,900 2,135,444
See notes to the financial statements.
<PAGE>
T. ROWE PRICE/JNL ESTABLISHED GROWTH SERIES
SCHEDULE OF INVESTMENTS (continued)
Market
Shares Value
------ -----
Common Stocks (continued)
United States (continued)
Retail (continued)
McDonald's Corp. ................ 11,900 $ 911,838
Rite Aid Corp. (c) .............. 21,800 1,080,463
Saks Incorporated (a) ........... 43,500 1,372,969
TAG Heuer International SA - ADR
(c) ............................. 64,500 459,563
Wal-Mart Stores Inc. ............ 26,700 2,174,381
-------------
10,991,643
Semiconductors - 1.77%
Intel Corp. ..................... 23,300 2,762,506
Texas Instruments Inc. .......... 9,600 821,400
Xilinx Inc.(a) .................. 4,200 273,525
-------------
3,857,431
Software - 9.20%
America Online Inc. (c) ......... 10,200 1,476,450
Automatic Data Processing ....... 17,300 1,387,243
BMC Software Inc. (a) ........... 52,000 2,317,250
Computer Associates
International Inc. .............. 17,800 758,725
Compuware Corp (a) .............. 16,600 1,296,875
HBO & Co. ....................... 29,200 837,675
Microsoft Corp (a) .............. 32,800 4,548,950
Network Associates Inc. (a) (c) . 53,750 3,560,938
Parametric Technology Corp (a) .. 106,100 1,737,388
Platinum Technology Inc. (a) (c) 38,200 730,575
Sterling Commerce Inc. (a) (c) .. 31,600 1,422,000
-------------
20,074,069
Telecommunications - 5.09%
AirTouch Communications Inc. (a) 26,000 1,875,250
GTE Corp. ....................... 10,200 663,000
MCI WorldCom Inc. (a) ........... 70,851 5,083,559
Nokia Corp. - ADR ............... 6,000 722,625
SBC Communications Inc. ......... 24,800 1,329,900
Telecomunicacoes Brasileiras SA
(c) ............................. 19,800 1,439,213
-------------
11,113,547
Tobacco - 1.26%
Philip Morris Cos. Inc. ......... 51,600 2,760,600
-------------
Total United States ............ 187,414,238
-------------
Total Common Stocks
(cost $160,343,289) .......... 205,801,814
-------------
Principal Market
Amount Value
------ -----
Short Term Investments - 5.74%
Banks - 1.46%
Bayeriische Landesbank, 6.15%,
01/04/1999 ...................$3,000,000 $ 2,998,462
Societe Generale, 5.73%,
01/07/1999 ...................... 200,000 199,996
-------------
3,198,458
Diversified Financial Services -
2.06%
National Australia Funding,
5.32%, 01/08/1999 .............. 3,000,000 2,996,897
Repeat Offering Securitization,
5.40%, 01/08/1999 ............... 1,500,000 1,498,425
-------------
4,495,322
Insurance - 0.61%
Met Life Funding Inc., 5.25%,
01/15/1999 ................... 1,330,000 1,327,285
Money Market Fund - 1.61%
SSgA Money Market Fund, 4.85%
(b) ............................. 3,518,959 3,518,959
-------------
Total Short Term Investments
(cost $12,540,024) .......... 12,540,024
-------------
Total Investments - 100%
(cost $172,883,313) ............. $218,341,838
==============
- --------------------------------------------------------------------------------
(a) Non-income producing security.
(b) Dividend yields change daily to reflect current market conditions. Rate is
the quoted yield as of December 31, 1998.
(c) All or a portion of this security has been loaned.
See notes to the financial statements.
<PAGE>
T. ROWE PRICE/JNL INTERNATIONAL EQUITY
INVESTMENT SERIES
ROWE PRICE-FLEMING INTERNATIONAL, INC.
[T. ROWE PRICE LOGO] ADVISORY COMMITTEE
OBJECTIVE:
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.
MONEY MANAGER COMMENTARY:
For the year, the MSCI E.A.FE. benchmark was up 20.33%, helped by dollar
weakness that contributed about one-third of the gain. Europe, up 29%, was the
strongest international region in 1998, while Latin America, down 35%, was the
weakest. Latin America suffered the savage sell-off that afflicted the Far East
last year as "Asian contagion", exacerbated by the Russian default and
devaluation, induced a loss of confidence in Brazil and the region. Japan
managed a modest increase of 5% in U.S. dollar terms, but the rest of the Far
East, excluding Australia, declined 5%. In 1998, the dollar fell 13% against the
yen, 7% against major European currencies, and 1% against pound sterling.
For 1998, the 14.43% return of the Series underperformed the MSCI E.A.FE. Index.
Country allocation relative to the benchmark was negative over the year. For the
year, underweighting Japan, in particular, and Asia to a lesser extent, added
value. However, these gains were offset largely by our position in Latin
America, with smaller negatives from overweighting Norway and underweighting the
buoyant Finnish and German markets. For the year, stock selection was positive,
with holdings in the Netherlands, Belgium, France, and Japan particularly
successful.
During the fourth quarter, we selectively reduced holdings in Europe, such as
French retailer Pinault Printemps, which performed strongly and may be
vulnerable to weaker demand. Deutsche Telekom was reduced; we bought new issue
Swisscom and added to Spanish Telefonica, which offer better value and growth
prospects. The European savings market is expanding rapidly so we added to
insurers including Italian company INA. In Japan we bought mobile telecoms new
issue, DoCoMo, spun off by its parent NTT. In Hong Kong we reduced Hong Kong
Telecom and added China Telecom which operates in a less competitive, higher
growth environment.
At the end of 1998, the Series was slightly underweighted in the UK and slightly
overweighted in Continental Europe. Japan and the Pacific region also remained
underweighted.
Looking forward, we see international economies growing more slowly. Our
cautious stance in the Pacific and Japan will help shield the Series from the
pain that those markets must go through before they can emerge as fundamentally
healthy investment centers. The Series emphasis on businesses, which have the
management, products, and sound finances to support sustainable growth, should
prove appropriate as cyclical business face a tougher environment.
Corporate activity and restructuring in Europe are expected to continue as
Economic and Monetary Union (EMU), deregulation, and a weaker economy coincide
in the year ahead. The extent of corporate consolidation in Europe lags the
U.S., and thus there is further scope for industry concentration. Our enthusiasm
for Continental Europe remains high, as we continue to find businesses with
sustainable growth prospects, managed to maximize returns, at reasonable
valuations.
The Japanese government's long overdue action in the fourth quarter is
encouraging. We remain underweighted, though, because at the stock level there
are relatively few companies focused on shareholder value, willing to take the
tough actions that may be required in the recessionary and deflationary
environment of Japan at present.
In the rest of the Far East, the bottom of the crisis may be at hand, but we
believe that valuations bear little relationship to the underlying merits of the
stocks. We retain our belief that Latin America offers attractions and
opportunity. The key remains avoiding a disorderly devaluation in Brazil. Our
view is that this is possible, and the Series holdings will, in time, be able to
achieve valuations closer to those of international sector peers.
Our outlook for currencies favors the new euro currency over the dollar and the
yen, although we do not anticipate major moves in the year ahead.
Confidence has clearly returned to global stock markets after the difficult
third quarter. Looking ahead, we believe that this renewed confidence, coupled
with healthy if unspectacular economic growth in Europe and signs that we are at
least closer to the bottom in Asia will lead to reasonable performance from
international equity markets in 1999.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
T. ROWE PRICE/JNL INTERNATIONAL EQUITY INVESTMENT SERIES
AND THE MSCI E.A.FE. INDEX
[GRAPHIC]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
AVERAGE
ANNUAL
TOTAL
RETURN
1 year .................. 14.43%
Since inception * ...... 10.43%
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT RETURN AND
PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY
BE MORE OR LESS THAN THEIR ORIGINAL COST.
PERFORMANCE NUMBERS ARE NET OF ALL SERIES OPERATING EXPENSES, BUT DO NOT REFLECT
THE DEDUCTION OF INSURANCE CHARGES.
5/15 $10,000 $10,000
6/30 $9,950 $9,810
9/30 $10,430 $10,178
12/31/95 $10,720 $10,548
3/31 $11,250 $10,811
6/30 $11,630 $10,940
9/30 $11,710 $10,882
12/31/96 $12,211 $11,010
3/31 $12,191 $10,845
6/30 $13,626 $12,261
9/30 $13,565 $12,183
12/31/97 $12,534 $11,236
3/31 $14,214 $12,843
6/30 $14,224 $12,933
9/30 $12,306 $11,051
12/31/98 $14,343 $13,285
- ------------
* Inception date May 15, 1995.
<PAGE>
JNL Series Trust
T. Rowe Price/JNL International Equity Investment Series
<PAGE>
Statement of Assets and Liabilities
December 31, 1998
Assets
Investments in securities, at cost......... $ 59,900,738
================
Investments in securities, at value........ $ 70,434,559
Foreign currency........................... 336,255
Receivables:
Dividends and interest.................. 53,855
Foreign taxes recoverable............... 77,296
Fund shares sold........................ 150,477
Investment securities sold.............. 3,364
Collateral for securities loaned .......... 3,996,200
----------------
Total assets............................... 75,052,006
----------------
Liabilities
Payables:
Investment advisory fees................ 65,197
Fund shares redeemed.................... 12,003
Return of collateral for securities
loaned .................................... 3,996,200
Other liabilities.......................... 51,384
----------------
Total liabilities.......................... 4,124,784
================
Net assets................................. $ 70,927,222
================
Net assets consist of:
Paid-in capital............................ $ 57,636,392
Undistributed net investment loss.......... (144,374)
Accumulated net realized gain on
investments and foreign currency
related items........................... 2,896,376
Net unrealized appreciation on:
Investments............................. 10,533,821
Foreign currency related items.......... 5,007
----------------
Net assets................................. $ 70,927,222
================
Total shares outstanding (no par
value), unlimited shares authorized........ 5,209,423
================
Net asset value, offering and
redemption price per share................. $ 13.62
================
Statement of Operations
For the Year Ended December 31, 1998
Investment income
Dividends...............................$ 1,803,775
Interest................................ 171,091
Foreign tax withholding................. (195,604)
---------------
Total investment income.................... 1,779,262
---------------
Expenses
Investment advisory fees................ 908,522
Custodian fees.......................... 87,337
Portfolio accounting fees............... 42,361
Professional fees....................... 23,078
Other................................... 19,036
---------------
Total operating expenses................... 1,080,334
Less:
Reimbursement from Adviser.............. (45,594)
---------------
Net expenses............................... 1,034,740
---------------
Net investment income...................... 744,522
---------------
Realized and unrealized gains
Net realized gain on:
Investments............................. 3,947,435
Foreign currency related items.......... 83,284
Net change in unrealized appreciation on:
Investments............................. 5,679,438
Foreign currency related items.......... 6,966
---------------
Net realized and unrealized gains.......... 9,717,123
---------------
Net increase in net assets
from operations......................... $ 10,461,645
===============
See notes to the financial statements.
<PAGE>
JNL Series Trust
T. Rowe Price/JNL International Equity Investment Series
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year ended December 31,
----------------------------------
1998 1997
---------------- ----------------
<S> <C> <C>
Operations:
Net investment income ........................................................ $ 744,522 $ 502,649
Net realized gain (loss) on:
Investments ................................................................ 3,947,435 513,591
Foreign currency related items ............................................. 83,284 (43,913)
Net change in unrealized appreciation (depreciation) on:
Investments ................................................................ 5,679,438 (279,483)
Foreign currency related items ............................................. 6,966 (5,020)
---------------- ----------------
Net increase in net assets from operations ..................................... 10,461,645 687,824
---------------- ----------------
Distributions to shareholders:
From net investment income ................................................... (1,015,335) (531,066)
From net realized gains on investment transactions ........................... (83,404) (1,459,893)
---------------- ----------------
Total distributions to shareholders ............................................ (1,098,739) (1,990,959)
---------------- ----------------
Share transactions:
Proceeds from the sale of shares ............................................. 19,304,333 38,069,689
Reinvestment of distributions ................................................ 1,098,739 1,367,879
Cost of shares redeemed ...................................................... (37,523,404) (7,654,114)
---------------- ----------------
Net increase (decrease) in net assets from share transactions .................. (17,120,332) 31,783,454
---------------- ----------------
Net increase (decrease) in net assets .......................................... (7,757,426) 30,480,319
Net assets beginning of period ................................................. 78,684,648 48,204,329
---------------- ----------------
Net assets end of period ....................................................... $ 70,927,222 $ 78,684,648
================ ================
Undistributed net investment loss .............................................. $ (144,374) $ (69,263)
================ ================
</TABLE>
See notes to the financial statements.
<PAGE>
JNL Series Trust
T. Rowe Price/JNL International Equity Investment Series
Financial Highlights
<TABLE>
<CAPTION>
Period from Period from
April 1, May 15,
Year ended December 31, 1996 to 1995* to
------------------------------- December 31, March 31,
1998 1997 1996 1996
------------------------------- --------------- ---------------
<S> <C> <C> <C> <C>
Selected Per Share Data
Net asset value, beginning of period............................... $ 12.09 $ 12.08 $ 11.25 $ 10.00
--------------- --------------- --------------- ---------------
Income from operations:
Net investment income ........................................... 0.16 0.09 0.06 0.04
Net realized and unrealized gains on investments and
foreign currency related items................................. 1.58 0.23 0.90 1.21
--------------- --------------- --------------- ---------------
Total income from operations....................................... 1.74 0.32 0.96 1.25
--------------- --------------- --------------- ---------------
Less distributions:
From net investment income....................................... (0.19) (0.08) (0.12) -
From net realized gains on investment transactions............... (0.02) (0.23) (0.01) -
--------------- --------------- --------------- ---------------
Total distributions.............................................. (0.21) (0.31) (0.13) -
--------------- --------------- --------------- ---------------
Net increase..................................................... 1.53 0.01 0.83 1.25
--------------- --------------- --------------- ---------------
Net asset value, end of period..................................... $ 13.62 $ 12.09 $ 12.08 $ 11.25
=============== =============== =============== ===============
Total Return (a)................................................... 14.43% 2.65% 8.54% 12.50%
Ratios and Supplemental Data:
Net assets, end of period (in thousands)......................... $ 70,927 $ 78,685 $ 48,204 $ 24,211
Ratio of net operating expenses to average net assets (b) (c).... 1.23% 1.24% 1.25% 1.25%
Ratio of net investment income to average net assets (b) (c)..... 0.88% 0.74% 1.09% 0.78%
Portfolio turnover............................................... 16.39% 18.81% 5.93% 16.45%
Ratio information assuming no expense reimbursement or
fees paid indirectly:
Ratio of net operating expenses to average net assets (b)........ 1.28% 1.32% 1.29% 2.14%
Ratio of net investment income to average net assets (b)......... 0.83% 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 Adviser's expense reimbursement and
fees paid indirectly.
<PAGE>
T. ROWE PRICE/JNL INTERNATIONAL EQUITY INVESTMENT SERIES
SCHEDULE OF INVESTMENTS
December 31, 1998
Market
Shares Value
------ -----
Common Stocks - 94.43%
Australia - 2.04%
Banks - 0.46%
Commonwealth Bank of Australia .. 12,173 $ 172,782
National Australia Bank Ltd. .... 8 121
Westpac Banking Corp. Ltd. ...... 22,542 150,842
-----------
323,745
Commercial Services - 0.17%
Brambles Industries Ltd. ........ 5,000 121,791
Diversified Financial Services -
0.29%
Colonial Ltd. ................... 31,500 108,095
Lend Lease Corp. Ltd. ........... 7,028 94,746
-----------
202,841
Food - 0.09%
Goodman Fielder Ltd. (a) (c) .... 61,000 61,677
Leisure Time - 0.16%
Tabcorp Holdings Ltd. ........... 18,000 110,301
Media - 0.35%
John Fairfax Holdings Ltd.(a) ... 7,000 14,370
News Corp. Ltd. (a) ............. 20,383 134,646
Publishing & Broadcasting Ltd.
(c) ............................. 22,000 96,121
-----------
245,137
Oil & Gas Producers - 0.14%
Australian Gas Light Co. Ltd. ... 13,900 100,117
Telecommunications - 0.38%
Telstra Corp. Ltd. .............. 57,815 270,316
-----------
Total Australia ................ 1,435,925
Belgium - 2.02%
Banks - 1.14%
Dexia Belgium (c) ............... 545 90,649
KBC Bancassurance Holding ....... 9,050 712,062
-----------
802,711
Insurance - 0.57%
Fortis AG ....................... 1,106 398,314
Pharmaceuticals - 0.20%
UCB SA .......................... 23 141,047
Telecommunications - 0.11%
Societe Europeenne des
Satellites (a) .................. 500 76,656
-----------
Total Belgium .................. 1,418,728
Canada - 0.23%
Banks - 0.09%
Royal Bank of Canada ............ 1,290 64,605
Market
Shares Value
------ -----
Common Stocks (continued)
Canada (continued)
Metals & Mining - 0.14%
Alcan Aluminum Ltd. ............. 3,490 $ 94,756
-----------
Total Canada ................... 159,361
Czech Republic - 0.03%
Telecommunications - 0.03%
SPT Telecom AS (a) .............. 1,300 19,837
Denmark - 0.32%
Banks - 0.28%
Den Danske Bank ................. 930 124,939
Unidanmark A/S .................. 810 73,182
-----------
198,121
Telecommunications - 0.04%
Teledanmark A/S ................. 200 26,994
-----------
Total Denmark .................. 225,115
Finland - 0.72%
Telecommunications - 0.72%
Nokia Oyj "A" ................... 4,170 507,040
France - 10.68%
Banks - 0.86%
Credit Commercial de France (c) . 2,664 247,293
Dexia France (a) ................ 434 66,835
Dexia France (a) ................ 244 37,575
Dexia France .................... 160 24,640
Societe Generale ................ 1,430 231,470
-----------
607,813
Building Materials - 0.64%
Compagnie de Saint Gobain ....... 1,810 255,427
Lafarge SA ...................... 1,095 103,997
Lapeyre SA ...................... 1,290 92,060
-----------
451,484
Commercial Services - 1.58%
Vivendi ......................... 4,280 1,109,998
Cosmetics & Personal Care - 0.27%
L'OREAL ......................... 262 189,319
Electrical Components & Equipment - 0.23%
Legrand SA ...................... 599 158,669
Engineering & Construction - 0.06%
Groupe GTM (c) .................. 410 42,533
Entertainment - 0.15%
Pathe SA (c) .................... 370 103,237
Food - 1.71%
Carrefour Supermarche ........... 483 364,475
Groupe Danone ................... 970 277,589
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)
Food (continued)
Sodexho Alliance SA ............. 2,520 $ 563,405
-----------
1,205,469
Hand & Machine Tools - 0.56%
Schneider SA .................... 6,486 393,267
Insurance - 0.85%
AXA (c) ......................... 4,121 597,033
Media - 0.35%
Societe Television Francaise .... 1,400 249,150
Oil & Gas Producers - 1.10%
Elf Aquitaine SA ................ 2,040 235,707
Primagaz Cie .................... 65 6,162
Total SA ........................ 5,297 536,237
-----------
778,106
Pharmaceuticals - 0.72%
Sanofi SA ....................... 3,089 508,295
Retail - 0.96%
Pinault-Printemps-Redoute ....... 3,550 678,126
Semiconductors - 0.23%
ST Microelectronics NV (a) ...... 2,080 163,692
Telecommunications - 0.41%
Alcatel Alsthom SA (c) .......... 2,360 288,721
-----------
Total France ................... 7,524,912
Germany - 6.59%
Auto Manufacturers - 0.17%
Volkswagen AG ................... 1,500 119,705
Banks - 1.72%
Bayerische Vereninsbank AG ...... 7,229 566,053
Deutsche Bank AG ................ 5,410 318,283
Dresdner Bank AG (a) ............ 7,810 328,033
-----------
1,212,369
Chemicals - 0.50%
Bayer AG ........................ 5,977 249,430
Hoechst AG ...................... 2,440 101,166
-----------
350,596
Health Care - 0.17%
Rhoen-Klinikum AG ............... 1,230 122,144
Insurance - 0.58%
Allianz AG ...................... 1,120 410,608
Machinery - 0.79%
Mannesmann AG ................... 4,860 556,978
Market
Shares Value
------ -----
Common Stocks (continued)
Germany (continued)
Manufacturing - 0.84%
Buderus AG ...................... 78 $ 28,409
Siemens AG ...................... 2,234 144,099
VEBA AG ......................... 6,965 416,663
-----------
589,171
Pharmaceuticals - 0.79%
Gehe AG ......................... 8,044 555,058
Retail - 0.01%
Hornbach Baumarkt AG ............ 200 7,200
Software - 0.57%
SAP AG (a) ...................... 930 401,776
Telecommunications - 0.45%
Deutsche Telekom AG ............. 9,590 315,332
-----------
Total Germany .................. 4,640,937
Hong Kong - 1.53%
Banks - 0.23%
Hang Seng Bank Ltd. ............. 7,000 62,568
HSBC Holdings Plc ............... 4,000 99,644
-----------
162,212
Electric - 0.14%
CLP Holdings Ltd. ............... 20,000 99,644
Holding Companies - Diversified -
0.57%
Hutchison Whampoa Ltd. .......... 57,000 402,802
Real Estate - 0.36%
Cheung Kong Holdings Ltd. ....... 8,000 57,566
Henderson Land Development Co.
Ltd. ............................ 26,000 134,571
Sun Hung Kai Properties Ltd. .... 8,000 58,341
-----------
250,478
Telecommunications - 0.23%
China Telecom Ltd. (a) .......... 40,000 69,183
Hong Kong Telecom Ltd. .......... 51,600 90,245
-----------
159,428
-----------
Total Hong Kong ................. 1,074,564
Italy - 5.71%
Banks - 1.77%
Banca Commerciale Italiana ...... 14,000 96,525
Banca di Roma (a) (c) ........... 132,000 223,533
Istituto Bancario San Paolo IMI
SpA ............................. 27,211 480,547
Unicredito Italiano SpA ......... 75,833 449,233
-----------
1,249,838
Food - 0.04%
La Rinascente SpA ............... 3,000 30,836
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)
Italy (continued)
Insurance - 1.17%
Assicurazioni Generali .......... 7,600 $ 317,155
Istituto Nazionale delle
Assicurazioni ................... 91,000 240,234
Mediolanum SpA ................. 35,540 263,307
-----------
820,696
Oil & Gas Producers - 0.70%
ENI SpA ......................... 67,263 439,348
Italgas SpA ..................... 10,000 54,099
-----------
493,447
Telecommunications - 2.03%
Telecom Italia Mobile SpA (a) ... 82,601 609,472
Telecome Italia SpA ............. 95,877 817,603
-----------
1,427,075
-----------
Total Italy ..................... 4,021,892
Japan - 16.22%
Auto Manufacturers - 0.09%
Honda Motor Co. Ltd. ............ 2,000 65,635
Auto Parts & Equipment - 0.68%
Denso Corp. ..................... 26,000 480,672
Chemicals - 0.76%
Sekisui Chemical Co. Ltd. ....... 26,000 174,790
Shin-Etsu Chemical Co. Ltd. (c) . 15,000 360,902
-----------
535,692
Computers - 0.89%
Fujitsu Ltd. (c) ................ 6,000 79,876
TDK Corp. ....................... 6,000 548,253
-----------
628,129
Cosmetics & Personal Care - 0.63%
Kao Corp. ....................... 14,000 315,789
Shiseido Co. Ltd. ............... 10,000 128,439
-----------
444,228
Distribution & Wholesale - 0.41%
Mitsubishi Corp. ................ 21,000 120,743
Sumitomo Corp. .................. 34,000 165,414
-----------
286,157
Diversified Financial Services -
0.37%
Nomura Securities Co. Ltd. ...... 30,000 261,389
Electrical Components & Equipment - 0.91%
Hitachi Ltd. .................... 31,000 191,950
Sumitomo Electric Industries .... 40,000 449,713
-----------
641,663
Electronics - 2.18%
Advantest Corp. ................. 1,310 82,969
Alps Electric Co. Ltd. (c) ...... 6,000 110,128
Market
Shares Value
------ -----
Common Stocks (continued)
Japan (continued)
Electronics (continued)
Fanuc Ltd. ...................... 3,500 $ 119,814
Kyocera Corp. ................... 7,000 369,659
Murata Manufacturing Co. Ltd..... 8,000 331,889
NEC Corp. ....................... 57,000 524,370
-----------
1,538,829
Forest Products & Paper - 0.11%
Sumitomo Forestry Co. Ltd. ...... 11,000 78,815
Hand & Machine Tools - 0.19%
Makita Corp. .................... 12,000 133,640
Home Builders - 0.50%
Daiwa House Industry Co. Ltd. ... 17,000 180,902
Sekisui House Ltd. .............. 16,000 169,129
Yurtec Corp. .................... 100 566
-----------
350,597
Home Furnishings - 1.52%
Matsushita Electric Industrial
Co. Ltd. ........................ 28,000 495,108
Pioneer Electronic Corp. ........ 5,000 83,812
Sony Corp. ...................... 6,800 495,038
-----------
1,073,958
Household Products - 0.02%
Sangetsu Co. Ltd. ............... 1,000 14,949
Insurance - 0.14%
Tokio Marine & Fire Insurance
Co. Ltd. ........................ 8,000 95,533
Iron & Steel - 0.04%
Tokyo Steel Manufacturing Co.
Ltd. ............................ 6,000 30,040
Machinery - 0.44%
Amada Co. Ltd. .................. 16,000 77,417
Komatsu Ltd. .................... 16,000 83,927
Komori Corp. .................... 7,000 147,368
-----------
308,712
Manufacturing - 0.48%
Mitsubishi Heavy Industries Ltd. 86,000 334,719
Media - 0.28%
Toppan Printing Co. Ltd. ........ 16,000 195,312
Office & Business Equipment - 0.76%
Canon Inc. ...................... 25,000 534,056
Office Furnishings - 0.15%
Kokuyo Co. Ltd. ................. 8,000 107,634
Pharmaceuticals - 0.85%
Daiichi Pharmaceutical Co. Ltd. . 11,000 185,750
Sankyo Co. Ltd. ................. 19,000 415,126
-----------
600,876
See notes to the financial statements.
<PAGE>
T. ROWE PRICE INTERNATIONAL EQUITY INVESTMENT SERIES
SCHEDULE OF INVESTMENTS (continued)
Market
Shares Value
------ -----
Common Stocks (continued)
Japan (continued)
Real Estate - 0.43%
Mitsui Fudosan Co. Ltd. ......... 40,000 $ 302,521
Retail - 1.63%
Citizen Watch Co. Ltd. .......... 9,000 54,135
Ito-Yokado Co. Ltd. ............. 6,000 419,284
Mauri Co. Ltd. .................. 19,000 365,546
Seven-Eleven Japan Co. Ltd. ..... 2,000 160,991
Uny Co. Ltd. .................... 8,000 146,130
-----------
1,146,086
Semiconductors - 0.23%
Tokyo Electron Ltd. ............. 4,300 163,176
Telecommunications - 0.93%
DDI Corp. ....................... 36 133,746
Nippon Telegraph & Telephone
Corp. ........................... 35 269,969
NTT Mobile Communication
Network Inc. .................. 6 246,793
-----------
650,508
Textiles - 0.30%
Kuraray Co. Ltd. ................ 19,000 209,580
Transportation - 0.30%
East Japan Railway Co. .......... 38 212,101
-----------
Total Japan .................... 11,425,207
Mexico - 0.53%
Beverages - 0.10%
Grupo Modelo SA "C" (c) ......... 35,376 74,987
Building Materials - 0.05%
Cemex SA ........................ 388 836
Cemex SA "B" (a) (c) ............ 12,950 32,483
-----------
33,319
Food - 0.13%
Gruma SA (a) .................... 18,058 45,569
Grupo Industrial Maseca SA ...... 54,800 44,252
-----------
89,821
Forest Products & Paper - 0.13%
Kimberly-Clark de Mexico SA ..... 28,211 89,984
Holding Companies - Diversified -
0.12%
Fomento Economico Mexicano SA ... 31,260 85,194
-----------
Total Mexico ................... 373,305
Netherlands - 10.46%
Banks - 1.96%
ABN Amro Holding NV ............. 15,000 315,378
ING Groep NV .................... 17,500 1,066,562
-----------
1,381,940
Market
Shares Value
------ -----
Common Stocks (continued)
Netherlands (continued)
Chemicals - 0.12%
Akzo Nobel ...................... 1,832 $ 83,375
Electronics - 0.47%
Philips Electronics NV .......... 4,980 333,997
Food - 1.59%
CSM NV .......................... 5,706 329,233
Koninklijke Ahold NV ............ 13,902 513,546
Numico NV ....................... 5,840 278,214
-----------
1,120,993
Household Products - 1.10%
Unilever NV ..................... 9,030 771,446
Insurance - 0.78%
Fortis Amev NV .................. 6,605 547,047
Media - 3.04%
Elsevier NV ..................... 35,629 498,772
Wolters Kluwer NV ............... 7,671 1,640,607
-----------
2,139,379
Oil & Gas Producers - 0.82%
Royal Dutch Petroleum Co. ....... 11,560 575,323
Semiconductors - 0.34%
ASM Lithography Holding NV (a)
(c) ............................. 7,930 242,286
Telecommunications - 0.15%
Royal KPN NV .................... 2,147 107,424
Transportation - 0.09%
TNT Post Group NV ............... 2,047 65,920
-----------
Total Netherlands .............. 7,369,130
New Zealand - 0.22%
Telecommunications - 0.22%
Telecom Corp. of New Zealand
Ltd. ............................ 26,000 112,870
Telecom Corp. of New Zealand
Ltd. ............................ 18,000 41,485
-----------
Total New Zealand .............. 154,355
Norway - 1.10%
Food - 0.57%
Orkla ASA ....................... 27,090 404,648
Manufacturing - 0.50%
Norsk Hydro ASA ................. 10,400 351,754
Oil & Gas Producers - 0.02%
Saga Petroleum A/S .............. 1,190 10,884
Transportation - 0.01%
Bergesen d.y. ASA ............... 650 7,784
-----------
Total Norway ................... 775,070
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)
Portugal - 0.55%
Retail - 0.55%
Jeronimo Martins SA ............. 7,096 $ 388,365
Singapore - 0.11%
Publishing - 0.11%
Singapore Press Holdings Ltd. .. 7,336 79,980
South Korea - 0.17%
Electronics - 0.17%
Samsung Electronics ............. 1,930 129,468
Spain - 2.97%
Banks - 0.94%
Banco Bilbao Vizcaya ............ 8,440 132,135
Banco Santander ................. 17,380 344,861
Corporacion Bancaria de Espana
SA .............................. 7,100 183,595
-----------
660,591
Electric - 0.70%
Endesa SA (c) ................... 10,528 278,534
Iberdrola SA .................... 11,538 215,546
-----------
494,080
Oil & Gas Producers - 0.54%
Gas Natural SDG SA .............. 2,082 226,336
Repsol SA (c) ................... 2,852 151,911
-----------
378,247
Telecommunications - 0.79%
Telefonica SA ................... 12,540 556,765
-----------
Total Spain .................... 2,089,683
Sweden - 3.45%
Banks - 0.54%
Nordbanken Holding AB ........... 59,431 380,368
Engineering & Construction - 0.21%
ABB AB (a) ...................... 13,880 147,772
Hand & Machine Tools - 0.22%
Sandvik AB "A" .................. 2,090 36,270
Sandvik AB "B" .................. 6,830 117,689
-----------
153,959
Home Furnishings - 0.48%
Electrolux AB "B" ............... 19,790 339,787
Household Products - 0.05%
Esselte AB ...................... 2,310 37,814
Machinery - 0.23%
Atlas Copco AB .................. 7,400 160,299
Market
Shares Value
------ -----
Common Stocks (continued)
Sweden (continued)
Metals & Mining - 0.04%
Granges AB ..................... 1,990 $ 28,656
Pharmaceuticals - 0.89%
Astra AB "B" .................... 30,713 623,726
Retail - 0.79%
Hennes & Mauritz AB "B" ......... 6,810 554,872
-----------
Total Sweden ................... 2,427,253
Switzerland - 6.81%
Banks - 1.39%
Credit Suisse Group (a) ......... 1,880 294,242
UBS AG (a) ...................... 2,230 685,055
-----------
979,297
Commercial Services - 0.60%
Adecco SA ....................... 923 421,286
Engineering & Construction - 0.38%
ABB AG .......................... 227 266,048
Food - 1.82%
Nestle SA ....................... 590 1,284,196
Pharmaceuticals - 2.44%
Novartis ........................ 503 988,644
Roche Holding AG ................ 60 732,038
-----------
1,720,682
Telecommunications - 0.18%
Swisscom AG (a) ............... 298 124,736
-----------
Total Switzerland .............. 4,796,245
United Kingdom - 18.64%
Aerospace & Defense - 0.12%
Rolls-Royce Plc ................. 21,000 87,224
Auto Parts & Equipment - 0.13%
GKN Plc ......................... 7,000 93,039
Banks - 3.08%
Abbey National Plc .............. 20,000 425,652
National Westminster Bank Plc ... 90,000 1,741,984
-----------
2,167,636
Beverages - 1.36%
Diageo Plc (a) .................. 86,368 957,811
Building Materials - 0.14%
Caradon Plc ..................... 55,800 95,488
Heywood Williams Group Plc ...... 3,000 10,716
-----------
106,204
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)
Commercial Services - 0.12%
Rank Group Plc .................. 21,000 $ 80,267
Electronics - 0.16%
Electrocomponents Plc ........... 17,000 112,128
Engineering & Construction - 0.04%
John Laing Plc .................. 7,000 29,075
Entertainment - 0.21%
Ladbroke Group Plc .............. 37,000 148,762
Food - 2.35%
Asda Group Plc .................. 78,000 209,287
Cadbury Schweppes Plc ........... 31,000 530,487
Compass Group Plc ............... 31,000 353,830
Safeway Plc ..................... 46,000 230,802
Tesco Plc (a) ................... 114,000 331,450
-----------
1,655,856
Forest Products & Paper - 0.06%
David S. Smith Holding Plc ...... 25,000 44,027
Holding Companies - Diversified -
0.67%
Tomkins Plc ..................... 99,000 470,410
Household Products - 0.27%
Unilever Plc .................... 17,000 191,211
Media - 1.33%
Reed International Plc .......... 80,000 635,321
United News & Media Plc ......... 35,000 304,120
-----------
939,441
Metals & Mining - 0.40%
Rio Tinto Plc (a) ............... 24,000 279,116
Oil & Gas Producers - 2.08%
BG Plc .......................... 23,352 150,145
BP Amoco Plc .................... 20,000 297,724
Centrica Plc (a) ................ 14,000 28,726
Shell Transport & Trading Co.
Plc ............................. 160,500 986,626
-----------
1,463,221
Pharmaceuticals - 3.82%
Glaxo Wellcome Plc .............. 34,000 1,170,427
SmithKline Beecham Plc .......... 109,400 1,516,205
-----------
2,686,632
Retail - 1.48%
Kingfisher Plc .................. 96,000 1,039,907
Telecommunications - 0.82%
Cable & Wireless Plc (a) ........ 47,000 574,713
-----------
Total United Kingdom ........... 13,126,680
Market
Shares Value
------ -----
Common Stocks (continued)
United States - 3.33%
Apparel - 0.16%
Gucci Group NV - NYS ............ 2,291 $ 111,400
Banks - 0.18%
Banco de Galicia Y Buenos Aires -
ADR (c) ....................... 2,327 41,013
Banco Frances SA - ADR (c) ...... 2,147 44,550
Uniao de Bancos Brasileiros Sa -
GDR ............................. 3,055 44,107
-----------
129,670
Beverages - 0.19%
Compania Cervecerias Unidas SA -
ADR (c) ...................... 1,385 26,661
Panamerican Beverages Inc. (c) .. 4,840 105,573
-----------
132,234
Building Materials - 0.13%
Cemex SA - ADR (c) .............. 20,410 89,155
Electric - 0.31%
Chilectra SA - ADR .............. 2,330 51,599
Companhia Energetica de Minas
Gerais - ADR (c) ............. 2,175 41,405
Huaneng Power International Inc.
- ADR (a) (c) ................... 8,400 121,800
-----------
214,804
Food - 0.09%
Companhia Brasileira de
Distribuicao
Grupo Pao de Acucar - ADR (c) 2,305 35,728
Gruma SA - ADR (a)(c) ........... 3,106 30,478
-----------
66,206
Home Furnishings - 0.06%
Industrie Natuzzi SpA - ADR ..... 1,810 45,024
Media - 0.14%
Grupo Televisa SA - GDR (c) ..... 2,831 69,890
TV Azteca SA - ADR .............. 4,600 30,763
-----------
100,653
Oil & Gas Producers - 0.40%
Gazprom - ADR ................... 3,490 29,595
Lukoil Holding - ADR (c) ........ 520 8,061
YPF SA - ADR (c) ................ 8,728 243,839
-----------
281,495
Software - 0.12%
CBT Group Plc (a) ............... 5,727 85,189
Telecommunications - 1.55%
Mahanagar Telephone Nigam Ltd.-
GDR ............................. 8,000 96,000
Telecomunicacoes Brasileiras SA
(c) ............................. 7,751 563,401
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)
Telecommunications (continued)
Telefonica de Argentina SA - ADR
(c) ............................. 3,990 $ 111,471
Telefonos de Mexico SA - ADR (c) 6,615 322,068
-----------
1,092,940
-----------
Total United States ............ 2,348,770
-----------
Total Common Stocks
(cost $55,754,007) .......... 66,511,822
-----------
Preferred Stocks - 1.41%
Australia - 0.23%
Leisure Time - 0.08%
Star City Holdings Ltd. ......... 63,200 55,884
Media - 0.15%
News Corp. Ltd. ................. 17,613 107,174
-----------
Total Australia ................ 163,058
Brazil - 0.62%
Banks - 0.17%
Banco Bradesco SA ............... 9,543,953 52,921
Banco Itau SA ................... 124,000 60,547
-----------
113,468
Building Materials - 0.01%
Companhia Cimento Portland Itau
SA .............................. 73,000 8,307
Electric - 0.07%
Companhia Energetic de Minas
Gerais .......................... 2,705,633 51,502
Oil & Gas Producers - 0.18%
Petroleo Brasileiro SA .......... 1,144,094 129,720
Telecommunications - 0.19%
Telecomunicacoes de Sao Paulo SA 720,189 98,167
Telesp Celular SA ............... 852,141 37,448
-----------
135,615
-----------
Total Brazil ................... 438,612
Germany - 0.56%
Pharmaceuticals - 0.12%
Fresenius AG .................... 400 84,243
Market
Shares Value
------ -----
Preferred Stock (continued)
Germany (continued)
Retail - 0.10%
Fielmann AG ..................... 336 $ 16,129
Hornbach Holding AG ............. 940 55,838
-----------
71,967
Software - 0.34%
SAP AG - Vorzug ................. 489 233,321
-----------
Total Germany .................. 389,531
-----------
Total Preferred Stocks
(cost $1,216,247) ........... 991,201
-----------
Rights - 0.01%
Brazil - 0.00%
Banks - 0.00%
Banco Bradesco SA .................. 395,588 229
Spain - 0.01%
Telecommunications - 0.01%
Telefonica SA ................... 12,540 11,118
-----------
Total Rights
(cost $7,933) ............... 11,347
-----------
Warrants - 0.12%
Germany - 0.12%
Banks - 0.12%
Dresdner Bank AG ................ 4,783 81,793
-----------
Total Warrants
(cost $84,155) .............. 81,793
-----------
Principal
Amount
------------
Short Term Investments - 4.03%
Money Market Fund - 4.03%
SSgA Money Market Fund, 4.85%(b) $2,838,396 2,838,396
-----------
Total Short Term Investments
(cost $2,838,396) ........... 2,838,396
-----------
Total Investments - 100%
(cost $59,900,738) .............. $70,434,559
===========
- --------------------------------------------------------------------------------
(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, 1998.
(c) All or a portion of this security has been loaned.
See notes to the financial statements.
<PAGE>
T. ROWE PRICE/JNL MID-CAP GROWTH SERIES
T. ROWE PRICE ASSOCIATES, INC.
[T. ROWE PRICE LOGO] INVESTMENT ADVISORY COMMITTEE
OBJECTIVE:
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.
MONEY MANAGER COMMENTARY:
Despite increased market volatility during the year, investors enjoyed strong
gains again in 1998 as the S&P 500 soared 28.58%, its fourth consecutive year of
returns in excess of 20%. Although mid-cap stocks still lagged their large-cap
peers, the S&P Mid-Cap 400 Index rebounded after a decline of 30% from its high
in April to finish the year with a 19.11% gain. In June, we warned that the
historically high valuations of U.S. stocks could increase the volatility and
risk in the market. Indeed, increasing instability in emerging markets,
political turmoil in major markets such as the U.S., Japan, and Germany, and
indications of ebbing U.S. economic growth generated sharp declines in all
sectors of the market and contributed to a brief credit crunch. However, three
interest rate cuts by the Federal Reserve within a two-month period this fall
seem to have allayed investor fears, and revived the aging bull market.
The Series outperformed two passive benchmarks, the S&P MidCap 400 Index and the
Russell Midcap Growth Index, for the year, though it lagged slightly in the last
quarter. The Series easily beat the Lipper Mid Cap Fund Index for both periods.
Throughout the year, the Internet sector waylaid many institutional investors,
including us. America Online, for example, began 1998 as a $10 billion market
capitalization company, double the upper threshold of what we consider to be
mid-cap but still in the S&P Mid-Cap 400 Index. As the stock rose almost
sevenfold during the year, it contributed approximately 7% of the index's 19.11%
gain for 1998, vastly exceeding the contribution of any other stock, ever, to a
major U.S. stock index.
Following the trend of recent quarters, some of our best performers were in the
health care and technology sectors. Top contributors for the quarter included
Gilead Sciences, a leading developer of antiviral products, whose new drugs
treating influenza and HIV are showing promising results; and Analog Devices, a
leading supplier of integrated chips, whose stock rose strongly as investors
perceived that industry fundamentals were improving. The top performer for the
year was Biogen, which continues to experience strong sales of its multiple
sclerosis treatment drug, Avonex.
The most deleterious contributor to the Series' performance for 1998 was
Security Capital Group, a commercial real estate investment advisory company;
commercial property stocks were pummeled this year, and the company fell well
short of investors' earnings expectations.
During the fourth quarter, we added to our weighting in the consumer sector, and
also modestly increased our holdings in technology, where we have been
underweighted.
With the strong fourth quarter rebound, the stock market has returned to the
upper reaches of its historic valuation range, but low interest rates provide
some support if earnings growth continues. It remains to be seen, however, if
pressures from the global economic crisis begun in Thailand in 1997 have truly
abated. Meanwhile, the market's leadership remains with an increasingly narrow
group of large, blue chip companies. While these companies have grown their
earnings nicely in recent years, they now trade at valuations that are well in
excess of small- and mid-cap companies, even though many of the latter are
expected to grow their earnings significantly faster in the next few years with
less international risk. On a relative basis, small- and mid-cap stocks are
trading at historically low levels. We believe the Series is well positioned to
achieve attractive returns over the long run and should benefit particularly
when the mid-cap sector returns to favor among investors.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
T. ROWE PRICE/JNL MID-CAP GROWTH SERIES AND THE S&P MID-CAP 400 INDEX
[GRAPHIC]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
5/15 $10,000 $10,000
6/30 $10,417 $10,740
9/30 $11,432 $12,230
12/31/95 $11,593 $12,922
3/31 $12,306 $14,006
6/30 $12,661 $14,496
9/30 $13,034 $15,237
12/31/96 $12,823 $15,955
3/31 $12,633 $14,905
6/30 $14,489 $16,930
9/30 $16,817 $18,901
12/31/97 $17,994 $18,687
3/31 $20,012 $21,901
6/30 $19,546 $21,998
9/30 $16,720 $18,035
12/31/98 $21,429 $22,914
AVERAGE ANNUAL
TOTAL RETURN
1 year.................. 21.49%
Since inception * ...... 25.62%
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT RETURN AND
PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY
BE MORE OR LESS THAN THEIR ORIGINAL COST.
PERFORMANCE NUMBERS ARE NET OF ALL SERIES OPERATING EXPENSES BUT DO NOT REFLECT
THE DEDUCTION OF INSURANCE CHARGES.
- ------------
* Inception date May 15, 1995.
<PAGE>
JNL Series Trust
T. Rowe Price/JNL Mid-Cap Growth Series
<PAGE>
Statement of Assets and Liabilities
December 31, 1998
Assets
Investments in securities, at cost ........ $ 146,748,956
================
Investments in securities, at value ....... $ 190,185,063
Foreign currency .......................... 12
Receivables:
Dividends and interest .................. 45,365
Fund shares sold ........................ 77,064
Investment securities sold .............. 2,164,687
----------------
Total assets .............................. 192,472,191
----------------
Liabilities
Payables:
Investment advisory fees ................ 139,686
Fund shares redeemed .................... 95,703
Investment securities purchased ......... 2,566,199
Other liabilities ......................... 34,305
----------------
Total liabilities ......................... 2,835,893
----------------
Net assets ................................ $ 189,636,298
================
Net assets consist of:
Paid-in capital ........................... $ 144,065,822
Undistributed net investment income ....... -
Accumulated net realized gain on
investments and foreign currency
related items ............................. 2,134,369
Net unrealized appreciation on:
Investments ............................ 43,436,107
Foreign currency related items ......... -
----------------
Net assets ................................ $ 189,636,298
================
Total shares outstanding (no par
value), unlimited shares authorized ....... 9,282,547
================
Net asset value, offering and
redemption price per share ................ $ 20.43
================
Statement of Operations
For the Year Ended December 31, 1998
Investment income
Dividends .............................. $ 413,302
Interest ............................... 638,801
Foreign tax withholding ................ (2,251)
---------------
Total investment income ................... 1,049,852
---------------
Expenses
Investment advisory fees ............... 1,473,732
Custodian fees ......................... 36,824
Portfolio accounting fees .............. 24,592
Professional fees ...................... 40,350
Other .................................. 44,213
---------------
Total operating expenses .................. 1,619,711
---------------
Less:
Reimbursement from Adviser ............. -
---------------
Net expenses .............................. 1,619,711
---------------
Net investment loss ....................... (569,859)
---------------
Realized and unrealized gains (losses)
Net realized gain on:
Investments ............................ 7,408,320
Foreign currency related items ......... 2,020
Net change in unrealized appreciation
(depreciation) on:
Investments ............................ 23,670,228
Foreign currency related items ......... (3)
---------------
Net realized and unrealized gains ......... 31,080,565
---------------
Net increase in net assets
from operations .........................$ 30,510,706
===============
See notes to the financial statements.
<PAGE>
JNL Series Trust
T. Rowe Price/JNL Mid-Cap Growth Series
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year ended December 31,
----------------------------------
1998 1997
---------------- ----------------
<S> <C> <C>
Operations:
Net investment loss ................................................. $ (569,859) $ (227,852)
Net realized gain (loss) on:
Investments ....................................................... 7,408,320 3,012,259
Foreign currency related items .................................... 2,020 (9,918)
Net change in unrealized appreciation (depreciation) on:
Investments ....................................................... 23,670,228 14,655,100
Foreign currency related items .................................... (3) 3
---------------- ----------------
Net increase in net assets from operations ............................ 30,510,706 17,429,592
---------------- ----------------
Distributions to shareholders:
From net investment income .......................................... - -
From net realized gains on investment transactions .................. (6,049,293) (1,652,413)
----------------
----------------
Total distributions to shareholders ................................... (6,049,293) (1,652,413)
---------------- ----------------
Share transactions:
Proceeds from the sale of shares .................................... 70,686,697 76,676,391
Reinvestment of distributions ....................................... 6,049,293 1,622,324
Cost of shares redeemed ............................................. (38,613,374) (14,128,114)
---------------- ----------------
Net increase in net assets from share transactions .................... 38,122,616 64,170,601
---------------- ----------------
Net increase in net assets ............................................ 62,584,029 79,947,780
Net assets beginning of period ........................................ 127,052,269 47,104,489
---------------- ----------------
Net assets end of period .............................................. $ 189,636,298 $ 127,052,269
================ ================
Undistributed net investment income ................................... $ - $ -
================ ================
</TABLE>
See notes to the financial statements.
<PAGE>
JNL Series Trust
T. Rowe Price/JNL Mid-Cap Growth Series
Financial Highlights
<TABLE>
<CAPTION>
Period from Period from
April 1, May 15,
Year ended December 31, 1996 to 1995* to
------------------------------- December 31, March 31,
1998 1997 1996 1996
--------------- --------------- -------------- --------------
<S> <C> <C> <C> <C>
Selected Per Share Data
Net asset value, beginning of period ................................. $ 17.37 $ 14.89 $ 13.43 $ 10.00
--------------- --------------- -------------- --------------
Income from operations:
Net investment income (loss)........................................ (0.07) (0.03) (0.05) 0.06
Net realized and unrealized gains on investments and
foreign currency related items .................................. 3.80 2.74 1.92 3.90
--------------- --------------- -------------- --------------
Total income from operations ......................................... 3.73 2.71 1.87 3.96
--------------- --------------- -------------- --------------
Less distributions:
From net investment income ......................................... - - (0.05) -
From net realized gains on investment transactions ................. (0.67) (0.23) (0.36) (0.53)
--------------- --------------- -------------- --------------
Total distributions .................................................. (0.67) (0.23) (0.41) (0.53)
--------------- --------------- -------------- --------------
Net increase ......................................................... 3.06 2.48 1.46 3.43
--------------- --------------- -------------- --------------
Net asset value, end of period ....................................... $ 20.43 $ 17.37 $ 14.89 $ 13.43
=============== =============== ============== ==============
Total Return (a) ..................................................... 21.49% 18.21% 13.91% 40.06%
Ratios and Supplemental Data:
Net assets, end of period (in thousands) ........................... $ 189,636 $ 127,052 $ 47,104 $ 10,545
Ratio of net operating expenses to average net assets (b) (c) ...... 1.04% 1.06% 1.10% 1.10%
Ratio of net investment income (loss) to average net assets (b) (c) (0.37)% (0.26)% (0.18)% 0.82%
Portfolio turnover ................................................. 50.92% 41.43% 25.05% 66.04%
Ratio information assuming no expense reimbursement or``
fees paid indirectly:
Ratio of net operating expenses to average net assets (b) .......... 1.04% 1.06% 1.14% 2.10%
Ratio of net investment loss to average net assets (b) ............. (0.37)% (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 Adviser's expense reimbursement and
fees paid indirectly.
See notes to the financial statements.
<PAGE>
T. ROWE PRICE/JNL MID-CAP GROWTH SERIES
SCHEDULE OF INVESTMENTS
December 31, 1998
Market
Shares Value
------ -----
Common Stocks -- 93.98%
Advertising -- 2.55%
Catalina Marketing Corp. (a) .... 26,600 $ 1,818,775
Outdoor Systems Inc.(a) ......... 100,900 3,027,000
-----------
4,845,775
Aerospace & Defense -- 0.86%
BE Aerospace Inc. (a) ........... 78,000 1,638,000
Apparel -- 2.79%
Jones Apparel Group Inc. (a) .... 101,000 2,228,313
Warnaco Group Inc. .............. 122,000 3,080,500
-----------
5,308,813
Banks -- 1.10%
North Fork Bancorporation Inc. .. 87,000 2,082,563
Biotechnology -- 1.28%
Biogen Inc. (a) ................. 29,300 2,431,900
Chemicals -- 0.65%
Great Lakes Chemical Corp. ...... 30,900 1,236,000
Commercial Services -- 5.43%
Gartner Group Inc. (a) .......... 101,100 2,148,375
Interim Services Inc. (a) ....... 83,700 1,956,488
NOVA Corp. (a) .................. 63,300 2,195,719
Renaissance Worldwide Inc. (a) .. 63,300 387,713
Romac International Inc. (a) .... 107,500 2,391,875
Viad Corp. ...................... 41,300 1,254,487
-----------
10,334,657
Computers -- 8.24%
Affiliated Computer Services
Inc. (a) ........................ 85,000 3,825,000
Anixter International Inc. (a) .. 44,000 893,750
Checkfree Holdings Corp. (a) .... 54,000 1,262,250
Ciber Inc. (a) .................. 6,700 187,181
DST Systems Inc. (a) ............ 39,000 2,225,437
Saville Systems Ireland Ltd.-ADR
(a) ............................. 134,000 2,546,000
SunGard Data Systems Inc.(a) .... 56,300 2,234,406
Synopsys Inc. (a) ............... 46,100 2,500,925
-----------
15,674,949
Diversified Financial Services --
6.21%
Capital One Financial Corp. ..... 21,000 2,415,000
CIT Group Inc. .................. 74,000 2,354,125
E*trade Group Inc. (a) .......... 17,000 795,281
FINOVA Group Inc. ............... 44,000 2,373,250
Franklin Resources Inc. ......... 32,000 1,024,000
Waddell & Reed Financial Inc. A . 83,800 1,985,012
Waddell & Reed Financial Inc. B . 37,000 860,250
-----------
11,806,918
Electronics -- 2.89%
Analog Devices Inc. (a) ......... 92,000 2,886,500
Maxim Integrated Products Inc.
(a) ............................. 50,000 2,184,375
Sanmina Corp. (a) ............... 6,700 418,750
-----------
5,489,625
Market
Shares Value
------ -----
Common Stocks (continued)
Entertainment -- 1.32%
Premier Parks Inc. .............. 83,000 $ 2,510,750
Environmental Control -- 2.00%
Allied Waste Industries Inc. (a) 107,000 2,501,125
Waste Management Inc. ........... 28,000 1,305,500
-----------
3,806,625
Food -- 4.92%
Suiza Foods Corp. (a) ........... 68,000 3,463,750
U.S. Foodservice (a) ............ 71,000 3,479,000
Whole Foods Market Inc. (a). .... 50,000 2,418,750
-----------
9,361,500
Health Care -- 3.85%
Covance Inc. (a) ................ 92,000 2,679,500
Henry Schein Inc. (a) ........... 49,000 2,192,750
Quorum Health Group Inc. (a) .... 56,000 724,500
Total Renal Care Holdings Inc.
(a) ............................. 58,200 1,720,538
-----------
7,317,288
Insurance -- 3.64%
Ace Ltd. ........................ 44,000 1,515,250
Fairfax Financial Holdings Ltd.
(144a) (a) (c) .................. 3,600 1,271,835
Fairfax Financial Holdings
(144a) (a) (c) .................. 800 268,499
PartnerRe Ltd. .................. 41,700 1,907,775
Protective Life Corp. ........... 49,000 1,950,813
-----------
6,914,172
Leisure Time -- 3.01%
Galileo International Inc. ...... 77,200 3,358,200
Royal Caribbean Cruises Ltd. .... 64,200 2,375,400
-----------
5,733,600
Manufacturing -- 2.62%
Danaher Corp. ................... 52,000 2,824,250
Teleflex Inc. ................... 47,300 2,158,062
-----------
4,982,312
Media -- 4.81%
Comcast Corp. ................... 42,000 2,464,875
Cox Communications Inc. (a) ..... 30,000 2,073,750
Jacor Communications Inc. (a) ... 28,300 1,821,812
Univision Communications Inc.
(a) ............................. 77,000 2,786,437
-----------
9,146,874
Metals & Mining -- 0.28%
Battle Mountain Gold Co. ........ 129,700 535,013
Oil & Gas Producers -- 2.15%
BJ Services Co. ................. 107,000 1,671,875
Ocean Energy Inc.(a) ............ 69,800 440,612
Smith International Inc. (a) .... 78,900 1,987,294
-----------
4,099,781
See notes to the financial statements.
<PAGE>
T. ROWE PRICE/MID-CAP GROWTH SERIES
SCHEDULE OF INVESTMENTS (continued)
Market
Shares Value
------ -----
Common Stocks (continued)
Pharmaceuticals -- 7.17%
Agouron Pharmaceuticals Inc.(a) . 25,000 $ 1,468,750
ALZA Corp.(a) ................... 27,000 1,410,750
BioChem Pharma Inc.(a) .......... 29,600 847,300
Gilead Sciences Inc.(a) ......... 76,000 3,120,750
MedImmune Inc.(a) ............... 12,000 1,193,250
Omnicare Inc. ................... 36,000
1,251,000
Sybron International Corp.(a) ... 85,000 2,310,939
Teva Pharmaceutical Industries
Ltd. - ADR....................... 50,000 2,034,375
-----------
13,637,114
Retail -- 12.69%
AutoZone Inc.(a) ................ 66,000 2,173,875
BJ's Wholesale Club Inc.(a) ..... 51,000 2,361,937
Borders Group Inc.(a) ........... 46,200 1,152,113
Circuit City Stores ............. 64,300 3,210,981
Costco Cos. Inc. ................ 29,000 2,093,438
Family Dollar Stores Inc. ....... 96,000 2,112,000
Fred Meyer Inc.(a) .............. 39,000 2,349,750
General Nutrition Cos. Inc.(a) .. 74,000 1,202,500
MSC Industrial Direct Co. ....... 65,800 1,488,725
Outback Steakhouse Inc.(a) ...... 55,000 2,193,125
Saks Inc. (a) ................... 64,000 2,020,000
ShopKo Stores Inc. .............. 53,400 1,775,550
-----------
24,133,994
Semiconductors -- 3.38%
Kla-Tencor Corp. (a) ............ 37,000 1,604,875
PMC - Sierra Inc. (a) ........... 33,000 2,083,125
Xilinx Inc. (a) ................. 42,000 2,735,250
-----------
6,423,250
Software -- 8.33%
Acxiom Corp. (a) ................ 52,000 1,612,000
BMC Software Inc. (a) ........... 23,000 1,024,938
Intuit Inc. (a) ................. 16,000 1,160,000
Learning Co. Inc. (a) ........... 74,000 1,919,375
National Data Corp. ............. 46,000 2,239,625
Netscape Communications Corp. (a) 20,000 1,215,000
Market
Shares Value
------ -----
Common Stocks (continued)
Software (continued)
Network Associates Inc. (a) ..... 38,500 $2,550,625
Parametric Technology Corp. (a) . 120,000 1,965,000
Sterling Commerce Inc. (a) ...... 47,900 2,155,500
-------------
15,842,063
Telecommunications -- 1.81%
Omnipoint Corp. (a) ............. 73,000 679,812
Paging Network Inc. (a) ......... 60,200 282,187
Western Wireless Corp. (a) ...... 113,000 2,486,000
-------------
3,447,999
-------------
Total Common Stocks
(cost $135,305,428) ......... 178,741,535
-------------
Principal
Amount
------
Short Term Investments -- 6.02%
Money Market Fund -- 1.29%
SSgA Money Market Fund, 4.85%
(b) .............................$2,451,491 2,451,491
U.S. Government Agencies -- 4.73%
Federal Home Loan Mortgage
Discount Note, 4.55%,
01/08/1999 .................. 9,000,000 8,992,037
-------------
Total Short Term
Investments
(cost $11,443,528) .......... 11,443,528
-------------
Total Investments -- 100%
(cost $146,748,956) ............. $190,185,063
==============
- --------------------------------------------------------------------------------
(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, 1998.
(c) Foreign security denominated in Canadian Dollars.
See notes to the financial statements.
<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
thirty-six (36) 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/Alliance Growth for which Alliance Capital
Management L.P. 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/JPM International & Emerging Markets for which J.P. Morgan Investment
Management Inc. serves as the sub-adviser; JNL/PIMCO Total Return Bond for which
Pacific Investment Management Company serves as the sub-adviser; JNL/Putnam
Growth and JNL/Putnam Value Equity for which Putnam Investment Management, Inc.
serves as the sub-adviser; Goldman Sachs/JNL Growth & Income for which Goldman
Sachs Asset Management serves as the sub-adviser; Lazard/JNL Small Cap Value and
Lazard/JNL Mid Cap Value for which Lazard Asset Management serves as
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 Balanced, Salomon Brothers/JNL Global Bond, Salomon
Brothers/JNL High Yield 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; T. Rowe
Price/JNL International Equity Investment for which Rowe Price-Fleming
International, Inc. serves as the sub-adviser; and JNL/S&P Conservative Growth
I, JNL/S&P Moderate Growth I, JNL/S&P Aggressive Growth I, JNL/S&P Very
Aggressive Growth I, JNL/S&P Equity Growth I, JNL/S&P Equity Aggressive Growth
I, JNL/S&P Conservative Growth II, JNL/S&P Moderate Growth II, JNL/S&P
Aggressive Growth II, JNL/S&P Very Aggressive Growth II, JNL/S&P Equity Growth
II and JNL/S&P Equity Aggressive Growth II for which Standard & Poor's
Investment Advisory Services, Inc. serves as the sub-adviser. Jackson National
Financial Services, LLC ("JNFS"), 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 statements 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
pricing services which determine prices for normal institutional size trading
units of bonds or based on quotations provided by broker-dealers. When
quotations are not readily available, bonds are valued at fair market value
determined by procedures approved by the Board of Trustees. Stocks listed on a
national or foreign stock exchange are valued at the final sale price, or final
bid price in absence of a sale. Stocks not listed on a national or foreign stock
exchange are valued at the closing bid price on the over-the-counter market.
Short-term securities maturing within 60 days of purchase, and all securities in
the PPM America/JNL Money Market Series, are valued at amortized cost, which
approximates market value. American Depository Receipts ("ADRs"), which are
certificates representing shares of foreign securities deposited in domestic and
foreign banks, are traded and valued in U.S. dollars.
<PAGE>
- --------------------------------------------------------------------------------
JNL SERIES TRUST
NOTES TO THE FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
JNL/S&P Conservative Growth I, JNL/S&P Moderate Growth I, JNL/S&P
Aggressive Growth I, JNL/S&P Very Aggressive Growth I, JNL/S&P Equity Growth I,
JNL/S&P Equity Aggressive Growth I, JNL/S&P Conservative Growth II, JNL/S&P
Moderate Growth II, JNL/S&P Aggressive Growth II, JNL/S&P Very Aggressive Growth
II, JNL/S&P Equity Growth II and JNL/S&P Equity Aggressive Growth II are valued
at the net asset value per share of each Underlying Fund determined as of the
close of the New York Stock Exchange on the valuation date.
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
payments are translated into U.S. dollars at the exchange rates prevailing on
the respective dates of such transactions.
Realized gains and losses arising from selling foreign currencies and
certain non-dollar denominated fixed income securities, entering into forward
foreign currency exchange contracts, and accruing income or settling portfolio
purchases and sales denominated in a foreign currency paid or received at a
later date are recorded as net realized foreign currency related gains (losses)
and are considered ordinary income for tax purposes. Realized and unrealized
gains and losses on investments which result from changes in foreign currency
exchange rates are primarily included in net realized gains (losses) on
investments and net unrealized appreciation (depreciation) on investments,
respectively.
Forward Foreign Currency Exchange Contracts -- A Series may enter into
forward foreign currency exchange 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 (depreciation) on foreign currency
related items. When the contract is closed, the difference between the value of
the contract at the time it was opened and the value at the time it was closed
is recorded as net realized gain (loss) on foreign currency related items.
The use of forward foreign currency exchange contracts does not eliminate
fluctuations in the underlying prices of the Series' portfolio securities, but
it does establish a rate of exchange that can be achieved in the future. 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 position
hedges as of December 31, 1998.
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. 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.
<PAGE>
- --------------------------------------------------------------------------------
JNL SERIES TRUST
NOTES TO THE FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
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.
Futures Contracts -- A Series may utilize futures contracts to a limited
extent. The risks associated with the use of futures contracts include 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. . Upon
entering into a futures contract, the Series is required to deposit with the
broker an amount of cash or cash equivalents equal to a certain percentage of
the contract amount. This is known as the "initial margin". Futures contracts
are valued based upon their quoted daily settlement prices. The Series receive
from or pay to brokers an amount of cash equal to the daily fluctuation in the
value of the contracts. Such receipts or payments, known as the "variation
margin," are recorded by the Series as unrealized appreciation (depreciation)
until the contracts are terminated at which time realized gains and losses are
recognized. Futures contracts involve, to varying degrees, risk of loss in
excess of the futures variation margin reflected in the Statements of Assets and
Liabilities.
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,
Salomon Brothers/JNL U.S. Government & Quality Bond Series, and Salomon
Brothers/JNL Balanced Series may enter into dollar roll transactions with
respect to mortgage securities in which the Series sells mortgage securities and
simultaneously agrees to repurchase similar (same type, coupon and maturity)
securities at a later date at an agreed upon price. The value of the dollar roll
transactions are reflected in the Series' Statements of Assets and Liabilities.
During the period between the sale and repurchase, the Series forgoes principal
and interest paid on the mortgage securities sold. The Series is compensated by
the interest earned on the cash proceeds of the initial sale and from negotiated
fees paid by brokers offered as an inducement to the Series to "roll over" its
purchase commitments. These fees are accrued as income over the life of the
dollar roll contract. 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.
<PAGE>
- --------------------------------------------------------------------------------
JNL SERIES TRUST
NOTES TO THE FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
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.
Securities Loaned -- The Series has entered into a securities lending
arrangement with the custodian. Under the terms of the agreement, the Series
receives 65% of the annual net income from lending transactions. In exchange for
such fees, the custodian is authorized to loan securities on behalf of the
Series, against receipt of collateral at least equal in value to the value of
the securities loaned. Cash collateral is invested by the custodian in money
market instruments approved by the Manager. The Series bears the risk of any
deficiency in the amount of collateral available for return to a borrower due to
a loss in an approved investment.
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 periodically makes 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 JNFS whereby JNFS
provides investment management and transfer agency services. Each Series pays
JNFS 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 JNFS.
<PAGE>
- --------------------------------------------------------------------------------
JNL SERIES TRUST
NOTES TO THE FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
$0 to $50 to $100 to $150 to $200 to $250 to $300 to $350 to Over
(M - Millions) $50 M $100 M $150 M $200 M $250 M $300 M $350 M $500 M $500 M
- -------------- ----- ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
JNL Aggressive Growth Series................ .95% .95% .95% .90% .90% .90% .85% .85% .85%
JNL Capital Growth Series................... .95% .95% .95% .90% .90% .90% .85% .85% .85%
JNL Global Equities Series.................. 1.00% 1.00% 1.00% .95% .95% .95% .90% .90% .90%
JNL/Alger Growth Series..................... .975% .975% .975% .975% .975% .975% .95% .95% .90%
JNL/Alliance Growth Series.................. .775% .775% .775% .775% .775% .70% .70% .70% .70%
JNL/Eagle Core Equity Series................ .90% .85% .85% .85% .85% .85% .75% .75% .75%
JNL/Eagle SmallCap Equity Series............ .95% .95% .95% .90% .90% .90% .90% .90% .85%
JNL/JPM International & Emerging
Markets Series........................... .975% .95% .95% .95% .90% .90% .90% .85% .85%
JNL/PIMCO Total Return Bond Series.......... .70% .70% .70% .70% .70% .70% .70% .70% .70%
JNL/Putnam Growth Series*................... .90% .90% .90% .85% .85% .85% .80% .80% .80%
JNL/Putnam Value Equity Series**............ .90% .90% .90% .85% .85% .85% .80% .80% .80%
Goldman Sachs/JNL Growth & Income Series.... .925% .90% .90% .90% .85% .85% .85% .80% .80%
Lazard/JNL Small Cap Value Series........... 1.05% 1.00% 1.00% .975% .975% .975% .925% .925% .925%
Lazard/JNL Mid Cap Value Series............. .975% .975% .975% .925% .925% .925% .90% .90% .90%
PPM America/JNL Balanced Series***.......... .75% .70% .70% .675% .675% .675% .65% .65% .625%
PPM America/JNL High Yield Bond Series...... .75% .70% .70% .675% .675% .675% .65% .65% .625%
PPM America/JNL Money Market Series......... .60% .60% .60% .575% .575% .575% .55% .55% .525%
Salomon Brothers/JNL Balanced Series........ .80% .75% .75% .70% .70% .70% .70% .70% .70%
Salomon Brothers/JNL Global Bond Series..... .85% .85% .85% .80% .80% .80% .80% .80% .75%
Salomon Brothers/JNL High Yield Bond Series. .80% .75% .75% .70% .70% .70% .70% .70% .70%
Salomon Brothers/JNL U.S. Government &
Quality Bond Series...................... .70% .70% .70% .65% .65% .65% .60% .60% .55%
T. Rowe Price/JNL Established Growth Series. .85% .85% .85% .80% .80% .80% .80% .80% .80%
T. Rowe Price/JNL International Equity
Investment Series........................ 1.10% 1.05% 1.05% 1.00% 1.00% 1.00% .95% .95% .90%
T. Rowe Price/JNL Mid-Cap Growth Series..... .95% .95% .95% .90% .90% .90% .90% .90% .90%
JNL/S&P Conservative Growth Series I........ .20% .20% .20% .20% .20% .20% .20% .20% .15%
JNL/S&P Moderate Growth Series I............ .20% .20% .20% .20% .20% .20% .20% .20% .15%
JNL/S&P Aggressive Growth Series I.......... .20% .20% .20% .20% .20% .20% .20% .20% .15%
JNL/S&P Very Aggressive Growth Series I..... .20% .20% .20% .20% .20% .20% .20% .20% .15%
JNL/S&P Equity Growth Series I.............. .20% .20% .20% .20% .20% .20% .20% .20% .15%
JNL/S&P Equity Aggressive Growth Series I... .20% .20% .20% .20% .20% .20% .20% .20% .15%
JNL/S&P Conservative Growth Series II....... .20% .20% .20% .20% .20% .20% .20% .20% .15%
JNL/S&P Moderate Growth Series II........... .20% .20% .20% .20% .20% .20% .20% .20% .15%
JNL/S&P Aggressive Growth Series II........ .20% .20% .20% .20% .20% .20% .20% .20% .15%
JNL/S&P Very Aggressive Growth Series II.... .20% .20% .20% .20% .20% .20% .20% .20% .15%
JNL/S&P Equity Growth Series II............. .20% .20% .20% .20% .20% .20% .20% .20% .15%
JNL/S&P Equity Aggressive Growth Series II.. .20% .20% .20% .20% .20% .20% .20% .20% .15%
</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.
<PAGE>
- --------------------------------------------------------------------------------
JNL SERIES TRUST
NOTES TO THE FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
As compensation for their services, the sub-advisers receive fees from JNFS
calculated on the basis of the average daily net assets of each Series. The
following is a schedule of the fees JNFS 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 $200 to $250 to $300 to $350 to Over
(M - Millions) $50 M $100 M $150M $200 M $250 M $300M $350 M $500M $500 M
- -------------- ----- ------ ----- ------ ------ ----- ------ ----- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
JNL Aggressive Growth Series................ .55% .55% .50% .50% .50% .50% .50% .50% .45%
JNL Capital Growth Series................... .55% .55% .50% .50% .50% .50% .50% .50% .45%
JNL Global Equities Series.................. .55% .55% .50% .50% .50% .50% .50% .50% .45%
JNL/Alger Growth Series..................... .55% .55% .55% .55% .55% .55% .50% .50% .45%
JNL/Alliance Growth Series.................. .35% .35% .35% .35% .35% .25% .25% .25% .25%
JNL/Eagle Core Equity Series................ .45% .40% .40% .40% .40% .40% .30% .30% .30%
JNL/Eagle SmallCap Equity Series............ .50% .50% .50% .45% .45% .45% .45% .45% .40%
JNL/JPM International & Emerging Markets
Series.................................. .55% .50% .50% .50% .45% .45% .45% .40% .40%
JNL/PIMCO Total Return Bond Series.......... .25% .25% .25% .25% .25% .25% .25% .25% .25%
JNL/Putnam Growth Series*................... .50% .50% .50% .45% .45% .45% .35% .35% .35%
JNL/Putnam Value Equity Series**............ .50% .50% .50% .45% .45% .45% .35% .35% .35%
Goldman Sachs/JNL Growth & Income Series.... .50% .45% .45% .45% .40% .40% .40% .35% .35%
Lazard/JNL Small Cap Value Series........... .625% .575% .575% .525% .525% .525% .475% .475% .475%
Lazard/JNL Mid Cap Value Series............. .55% .525% .525% .475% .475% .475% .45% .45% .45%
PPM America/JNL Balanced Series*............ .25% .20% .20% .175% .175% .175% .15% .15% .125%
PPM America/JNL High Yield Bond Series...... .25% .20% .20% .175% .175% .175% .15% .15% .125%
PPM America/JNL Money Market Series......... .20% .15% .15% .125% .125% .125% .10% .10% .075%
Salomon Brothers/JNL Balanced Series........ .35% .30% .25% .25% .25% .25% .25% .25% .25%
Salomon Brothers/JNL Global Bond Series..... .375% .35% .35% .30% .30% .30% .30% .30% .25%
Salomon Brothers/JNL High Yield Bond Series. .35% .30% .25% .25% .25% .25% .25% .25% .25%
Salomon Brothers/JNL U.S. Government &
Quality Bond Series..................... .225% .225% .225% .175% .175% .175% .15% .15% .10%
JNL/S&P Conservative Growth Series I........ .10% .10% .10% .10% .10% .10% .10% .10% .075%
JNL/S&P Moderate Growth Series I............ .10% .10% .10% .10% .10% .10% .10% .10% .075%
JNL/S&P Aggressive Growth Series I.......... .10% .10% .10% .10% .10% .10% .10% .10% .075%
JNL/S&P Very Aggressive Growth Series I..... .10% .10% .10% .10% .10% .10% .10% .10% .075%
JNL/S&P Equity Growth Series I.............. .10% .10% .10% .10% .10% .10% .10% .10% .075%
JNL/S&P Equity Aggressive Growth Series I... .10% .10% .10% .10% .10% .10% .10% .10% .075%
JNL/S&P Conservative Growth Series II....... .10% .10% .10% .10% .10% .10% .10% .10% .075%
JNL/S&P Moderate Growth Series II........... .10% .10% .10% .10% .10% .10% .10% .10% .075%
JNL/S&P Aggressive Growth Series II........ .10% .10% .10% .10% .10% .10% .10% .10% .075%
JNL/S&P Very Aggressive Growth Series II.... .10% .10% .10% .10% .10% .10% .10% .10% .075%
JNL/S&P Equity Growth Series II............. .10% .10% .10% .10% .10% .10% .10% .10% .075%
JNL/S&P Equity Aggressive Growth Series II.. .10% .10% .10% .10% .10% .10% .10% .10% .075%
</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)
- --------------------------------------------------------------------------------
Through December 31, 1998, JNFS voluntarily agreed to reimburse each of the
Series for annual expenses (excluding the management fee) in excess of 0.15% of
average daily net assets. Effective January 1, 1999, these voluntary
reimbursements have been replaced by an administrative fee of 0.10% of average
daily net assets payable to JNFS. In exchange for this fee, JNFS provides or
procures all necessary administrative functions and services for the operation
of each Series.
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 $60,000
for the year ended December 31, 1998.
During the period ended December 31, 1998, JNL/Alger Growth Series,
JNL/Eagle SmallCap Equity Series, Goldman Sachs/JNL Growth & Income Series,
Salomon Brothers/JNL Balanced 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 paid $299,354, $4,680, $822, $178, $3,264,
$5,964 and $330, respectively, to affiliates of the Trust for brokerage fees on
the execution of purchases and sales of portfolio investments.
<PAGE>
- --------------------------------------------------------------------------------
JNL SERIES TRUST
NOTES TO THE FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
NOTE 4. SECURITY TRANSACTIONS
During the period ended December 31, 1998, 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.................................................... $ 131,828 $ 118,721
JNL Capital Growth Series....................................................... 113,677 108,604
JNL Global Equities Series...................................................... 177,259 153,355
JNL/Alger Growth Series......................................................... 150,810 131,583
JNL/Alliance Growth Series...................................................... 6,938 3,150
JNL/Eagle Core Equity Series.................................................... 34,612 14,117
JNL/Eagle SmallCap Equity Series................................................ 31,520 11,177
JNL/JPM International & Emerging Markets Series................................. 12,827 8,112
JNL/PIMCO Total Return Bond Series.............................................. 10,147 6,287
JNL/Putnam Growth Series........................................................ 139,626 86,669
JNL/Putnam Value Equity Series.................................................. 188,646 116,612
Goldman Sachs/JNL Growth & Income Series........................................ 7,530 2,911
Lazard/JNL Small Cap Value Series............................................... 6,734 1,332
Lazard/JNL Mid Cap Value Series................................................. 7,089 2,167
PPM America/JNL Balanced Series................................................. 48,702 33,825
PPM America/JNL High Yield Bond Series.......................................... 215,158 174,602
Salomon Brothers/JNL Balanced Series............................................ 4,662 1,665
Salomon Brothers/JNL Global Bond Series......................................... 66,412 36,847
Salomon Brothers/JNL High Yield Bond Series..................................... 10,933 3,908
Salomon Brothers/JNL U.S. Government & Quality Bond Series...................... 94,957 63,672
T. Rowe Price/JNL Established Growth Series..................................... 136,154 88,014
T. Rowe Price/JNL International Equity Investment Series........................ 13,019 31,334
T. Rowe Price/JNL Mid-Cap Growth Series......................................... 104,341 73,456
JNL/S&P Conservative Growth Series I............................................ 11,052 1,310
JNL/S&P Moderate Growth Series I................................................ 14,500 2,538
JNL/S&P Aggressive Growth Series I ............................................. 6,718 2,575
JNL/S&P Very Aggressive Growth Series I......................................... 3,639 1,443
JNL/S&P Equity Growth Series I.................................................. 6,047 1,431
JNL/S&P Equity Aggressive Growth Series I....................................... 3,806 854
JNL/S&P Conservative Growth Series II........................................... 11,217 8,887
JNL/S&P Moderate Growth Series II............................................... 4,316 1,608
JNL/S&P Aggressive Growth Series II............................................ 548 287
JNL/S&P Very Aggressive Growth Series II........................................ 423 290
JNL/S&P Equity Growth Series II................................................. 951 404
JNL/S&P Equity Aggressive Growth Series II...................................... 476 266
</TABLE>
Included in these transactions were purchases and sales of U.S. Government
obligations of $8,138,477 and $6,287,114 in the JNL/PIMCO Total Return Bond
Series; $27,114,625 and $7,295,225 in the PPM America/JNL Balanced Series;
$2,426,761 and $1,295,094 in the Salomon
Brothers/JNL Balanced Series; $9,003,337 and $10,940,957 in the Salomon
Brothers/JNL Global Bond Series; $93,806,427 and $63,358,772 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, 1998 were as follows (in
thousands):
<TABLE>
<CAPTION>
Net
Tax Gross Gross Unrealized
Cost Unrealized Unrealized Appreciation
Basis Appreciation Depreciation (Depreciation)
----- ------------ ------------ --------------
<S> <C> <C> <C> <C>
JNL Aggressive Growth Series ............................. $117,269 $ 44,154 $ (962) $43,192
JNL Capital Growth Series ................................ 81,275 28,592 (501) 28,091
JNL Global Equities Series ............................... 176,915 67,632 (4,327) 63,305
JNL/Alger Growth Series .................................. 121,835 42,371 (856) 41,515
JNL/Alliance Growth Series ............................... 3,867 859 (83) 776
JNL/Eagle Core Equity Series ............................. 31,525 6,844 (1,069) 5,775
JNL/Eagle SmallCap Equity Series ......................... 33,902 5,738 (4,022) 1,716
JNL/JPM International & Emerging Markets Series .......... 4,823 450 (379) 71
JNL/PIMCO Total Return Bond Series ....................... 6,083 36 (12) 24
JNL/Putnam Growth Series ................................. 131,795 50,107 (116) 49,991
JNL/Putnam Value Equity Series ........................... 182,026 24,227 (10,629) 13,598
Goldman Sachs/JNL Growth & Income Series ................. 4,293 172 (150) 22
Lazard/JNL Small Cap Value Series ........................ 5,344 373 (883) (510)
Lazard/JNL Mid Cap Value Series .......................... 4,866 426 (475) (49)
PPM America/JNL Balanced Series .......................... 90,810 7,114 (2,660) 4,454
PPM America/JNL High Yield Bond Series ................... 103,267 831 (4,682) (3,851)
Salomon Brothers/JNL Balanced Series ..................... 3,427 191 (121) 70
Salomon Brothers/JNL Global Bond Series .................. 54,470 614 (1,080) (466)
Salomon Brothers/JNL High Yield Bond Series .............. 7,576 61 (363) (302)
Salomon Brothers/JNL U.S. Government & Quality
Bond Series ......................................... 77,505 1,419 (86) 1,333
T. Rowe Price/JNL Established Growth Series .............. 173,256 50,568 (5,482) 45,086
T. Rowe Price/JNL International Equity Investment Series . 60,225 15,859 (5,313) 10,546
T. Rowe Price/JNL Mid-Cap Growth Series .................. 146,754 50,420 (6,989) 43,431
JNL/S&P Conservative Growth Series I ..................... 9,726 465 (163) 302
JNL/S&P Moderate Growth Series I ......................... 11,825 936 (147) 789
JNL/S&P Aggressive Growth Series I ....................... 4,023 421 (18) 403
JNL/S&P Very Aggressive Growth Series I .................. 2,211 231 -- 231
JNL/S&P Equity Growth Series I ........................... 4,557 478 -- 478
JNL/S&P Equity Aggressive Growth Series I ................ 2,913 325 -- 325
JNL/S&P Conservative Growth Series II .................... 1,636 83 (18) 65
JNL/S&P Moderate Growth Series II ........................ 2,695 176 (15) 161
JNL/S&P Aggressive Growth Series II ..................... 256 13 (2) 11
JNL/S&P Very Aggressive Growth Series II ................. 134 21 -- 21
JNL/S&P Equity Growth Series II .......................... 537 63 -- 63
JNL/S&P Equity Aggressive Growth Series II ............... 205 19 -- 19
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
JNL SERIES TRUST
NOTES TO THE FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
NOTE 5. TRUST TRANSACTIONS
Transactions of trust shares for the period ended December 31, 1998 were as
follows:
<TABLE>
<CAPTION>
Shares Distributions Shares Net Increase
Purchased Reinvested Redeemed (Decrease)
--------- ---------- -------- ----------
<S> <C> <C> <C> <C>
JNL Aggressive Growth Series.............................. 4,451,840 263,586 (2,814,258) 1,901,168
JNL Capital Growth Series................................. 2,081,514 377,423 (1,572,974) 885,963
JNL Global Equities Series................................ 4,094,524 32,381 (1,899,732) 2,227,173
JNL/Alger Growth Series................................... 4,446,364 353,439 (2,427,134) 2,372,669
JNL/Alliance Growth Series................................ 498,168 - (153,701) 344,467
JNL/Eagle Core Equity Series.............................. 1,918,710 16,605 (463,692) 1,471,623
JNL/Eagle SmallCap Equity Series.......................... 2,110,019 13,324 (680,929) 1,442,414
JNL/JPM International & Emerging Markets Series........... 508,566 2,874 (2,780) 508,660
JNL/PIMCO Total Return Bond Series........................ 716,223 23,389 (136,217) 603,395
JNL/Putnam Growth Series.................................. 4,482,876 15,226 (1,460,926) 3,037,176
JNL/Putnam Value Equity Series ........................... 5,600,351 385,529 (1,697,387) 4,288,493
Goldman Sachs/JNL Growth & Income Series.................. 752,447 3,641 (277,049) 479,039
Lazard/JNL Small Cap Value Series......................... 565,084 498 (13,589) 551,993
Lazard/JNL Mid Cap Value Series........................... 617,890 1,422 (105,454) 513,858
PPM America/JNL Balanced Series .......................... 2,985,317 442,356 (880,851) 2,546,822
PPM America/JNL High Yield Bond Series.................... 5,394,697 805,170 (2,345,246) 3,854,621
PPM America/JNL Money Market Series....................... 129,092,539 2,626,262 (117,177,667) 14,541,134
Salomon Brothers/JNL Balanced Series...................... 482,460 6,324 (171,191) 317,593
Salomon Brothers/JNL Global Bond Series................... 2,316,775 286,287 (1,391,870) 1,211,192
Salomon Brothers/JNL High Yield Bond Series............... 823,839 41,235 (94,744) 770,330
Salomon Brothers/JNL U.S. Government & Quality Series..... 4,532,896 266,200 (1,452,316) 3,346,780
T. Rowe Price/JNL Established Growth Series............... 5,041,045 511,898 (2,125,680) 3,427,263
T. Rowe Price/JNL International Equity Investment Series.. 1,460,409 80,671 (2,838,400) (1,297,320)
T. Rowe Price/JNL Mid-Cap Growth Series................... 3,774,173 296,099 (2,103,504) 1,966,768
JNL/S&P Conservative Growth Series I...................... 1,024,973 - (67,122) 957,851
JNL/S&P Moderate Growth Series I.......................... 1,377,193 - (190,840) 1,186,353
JNL/S&P Aggressive Growth Series I........................ 624,029 - (217,328) 406,701
JNL/S&P Very Aggressive Growth Series I................... 315,185 - (96,995) 218,190
JNL/S&P Equity Growth Series I............................ 521,045 - (47,680) 473,365
JNL/S&P Equity Aggressive Growth Series I................. 335,228 - (34,119) 301,109
JNL/S&P Conservative Growth Series II..................... 1,046,311 - (867,935) 178,376
JNL/S&P Moderate Growth Series II......................... 417,228 - (137,886) 279,342
JNL/S&P Aggressive Growth Series II....................... 53,405 - (26,840) 26,565
JNL/S&P Very Aggressive Growth Series II.................. 41,171 - (26,850) 14,321
JNL/S&P Equity Growth Series II........................... 89,401 - (29,602) 59,799
JNL/S&P Equity Aggressive Growth Series II................ 45,798 - (24,182) 21,616
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
JNL SERIES TRUST
NOTES TO THE FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
Transactions of trust shares for the year ending 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>
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, 1998 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 $19,787, $3,847, ($829,154), $25,657, ($3,055) and $279, in
the JNL Aggressive Growth Series, JNL Capital Growth Series, JNL Global Equities
Series, JNL/JPM International & Emerging Markets Series, Salomon Brothers/JNL
Global Bond Series, and T. Rowe Price/ JNL Established Growth 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 12/31/98 Currency to be received at 12/31/98
---- ------------------------ ----------- ----------------------- -----------
<S> <C> <C> <C> <C>
1/22/99 13,500,000 Finnish Markka $ 2,650,500 2,647,059 US $ $ 2,647,059
1/22/99 3,000,000 Finnish Markka 589,000 587,751 US $ 587,751
1/22/99 3,000,000 Finnish Markka 589,000 591,407 US $ 591,407
1/26/99 2,800,000 Finnish Markka 549,844 553,841 US $ 553,841
1/26/99 2,500,000 Finnish Markka 490,932 494,942 US $ 494,942
1/26/99 2,200,000 Finnish Markka 432,020 434,272 US $ 434,272
1/22/99 167,000,000 Italian Lira 101,107 100,542 US $ 100,542
1/22/99 148,000,000 Italian Lira 89,604 89,023 US $ 89,023
1/22/99 125,000,000 Italian Lira 75,679 75,964 US $ 75,964
1/22/99 35,000,000 Italian Lira 21,190 21,180 US $ 21,180
1/26/99 695,000,000 Italian Lira 420,857 431,248 US $ 431,248
1/26/99 200,000,000 Italian Lira 121,110 124,931 US $ 124,931
1/26/99 140,000,000 Italian Lira 84,777 83,247 US $ 83,247
----------------- -----------------
$ 6,215,620 $ 6,235,407
================= =================
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
JNL SERIES TRUST
NOTES TO THE FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
JNL Capital Growth Series
<TABLE>
<CAPTION>
Settlement U.S. $ value U.S. $ value
Date Currency to be delivered at 12/31/98 Currency to be received at 12/31/98
---- ------------------------ ----------- ----------------------- -----------
<S> <C> <C> <C> <C>
4/7/99 1,433,374 US $ $ 1,433,374 848,000 British Sterling $ 1,405,172
Pound
4/7/99 238,000 British Sterling 394,376 402,660 US $ 402,660
Pound
4/7/99 1,400,000 British Sterling 2,319,859 2,346,820 US $ 2,346,820
Pound
5/13/99 1,305,000 British Sterling 2,161,666 2,158,470 US $ 2,158,470
Pound
----------------- ----------------
$ 6,309,275 $ 6,313,122
================= ================
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
JNL SERIES TRUST
NOTES TO THE FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
JNL Global Equities Series
<TABLE>
<CAPTION>
Settlement U.S. $ value U.S. $ value
Date Currency to be delivered at 12/31/98 Currency to be received at 12/31/98
---- ------------------------ ----------- ----------------------- -----------
<S> <C> <C> <C> <C>
3/25/99 150,000 Swiss Franc $ 110,141 110,701 US $ $ 110,701
4/7/99 150,000 Swiss Franc 110,274 113,208 US $ 113,208
4/7/99 600,000 Swiss Franc 441,095 431,950 US $ 431,950
4/8/99 600,000 Swiss Franc 441,132 452,148 US $ 452,148
1/22/99 2,000,000 Deutsche Mark 1,201,320 1,202,776 US $ 1,202,776
1/25/99 1,650,000 Deutsche Mark 991,232 1,004,383 US $ 1,004,383
1/26/99 1,000,000 Deutsche Mark 600,776 589,249 US $ 589,249
1/27/99 3,000,000 Deutsche Mark 1,802,414 1,762,995 US $ 1,762,995
1/27/99 7,300,000 Deutsche Mark 4,385,873 4,286,553 US $ 4,286,553
4/7/99 700,000 British Sterling 1,159,929 1,184,295 US $ 1,184,295
Pound
4/7/99 4,068,000 British Sterling 6,740,847 6,819,188 US $ 6,819,188
Pound
5/6/99 4,232,000 British Sterling 7,010,581 6,957,154 US $ 6,957,154
Pound
5/13/99 600,000 British Sterling 993,870 992,400 US $ 992,400
Pound
2/12/99 325,000,000 Japanese Yen 2,891,276 2,812,246 US $ 2,812,246
2/12/99 230,000,000 Japanese Yen 2,046,133 1,981,751 US $ 1,981,751
2/12/99 45,000,000 Japanese Yen 400,330 387,448 US $ 387,448
3/25/99 153,750,000 Japanese Yen 1,375,434 1,299,662 US $ 1,299,662
4/7/99 2,616,431 US $ 2,616,431 300,000,000 Japanese Yen 2,688,469
4/7/99 300,000,000 Japanese Yen 2,688,469 2,283,105 US $ 2,283,105
4/8/99 173,250,000 Japanese Yen 1,552,794 1,522,408 US $ 1,522,408
4/21/99 343,000,000 Japanese Yen 3,079,462 3,069,351 US $ 3,069,351
5/20/99 230,000,000 Japanese Yen 2,072,833 1,947,502 US $ 1,947,502
1/21/99 2,000,000 Netherlands Guilder 1,065,640 1,046,299 US $ 1,046,299
1/22/99 1,000,000 Netherlands Guilder 532,846 529,101 US $ 529,101
1/26/99 7,000,000 Netherlands Guilder 3,730,637 3,741,595 US $ 3,741,595
1/27/99 1,700,000 Netherlands Guilder 906,055 885,417 US $ 885,417
3/25/99 700,000 Swedish Krona 86,483 87,995 US $ 87,995
4/7/99 8,900,000 Swedish Krona 1,100,203 1,113,335 US $ 1,113,335
5/13/99 6,400,000 Swedish Krona 792,359 795,031 US $ 795,031
----------------- ---------------
$ 52,926,869 $52,097,715
================= ===============
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
JNL SERIES TRUST
NOTES TO THE FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
JNL/JPM International & Emerging Markets Series
<TABLE>
<CAPTION>
Settlement U.S. $ value U.S. $ value
Date Currency to be delivered at 12/31/98 Currency to be received at 12/31/98
---- ------------------------ ----------- ----------------------- -----------
<S> <C> <C> <C> <C>
3/12/99 14,390 British Sterling $ 24,012 38,142 Australian $ $ 23,387
Pound
3/12/99 133,093 Australian $ 81,607 82,351 US $ 82,351
3/12/99 83,400 US $ 83,400 128,269 Canadian $ 83,932
3/12/99 266,240 Swiss Franc 195,237 196,342 US $ 196,342
3/12/99 30,000 US $ 30,000 49,807 Deutsche Mark 29,991
3/12/99 60,000 US $ 60,000 98,790 Deutsche Mark 59,486
3/12/99 66,834 Deutsche Mark 40,244 40,000 US $ 40,000
3/12/99 30,524 Deutsche Mark 18,380 18,330 US $ 18,330
3/12/99 19,422 Deutsche Mark 11,695 11,670 US $ 11,670
3/12/99 116,567 Deutsche Mark 70,190 70,000 US $ 70,000
3/12/99 415,064 Deutsche Mark 249,928 249,228 US $ 249,228
3/12/99 486,036 Danish Krone 76,515 76,517 US $ 76,517
3/12/99 73,638 French Franc 13,217 13,149 US $ 13,149
3/12/99 14,390 British Sterling 23,856 38,142 Australian $ 24,012
Pound
3/12/99 212,393 US $ 212,393 129,192 British Sterling 214,179
Pound
3/12/99 33,923 US $ 33,923 263,145 Hong Kong $ 33,946
3/12/99 10,000 US $ 10,000 1,167,830 Japanese Yen 10,428
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
JNL SERIES TRUST
NOTES TO THE FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
JNL/JPM International & Emerging Markets Series (continued)
<TABLE>
<CAPTION>
Settlement U.S. $ value U.S. $ value
Date Currency to be delivered at 12/31/98 Currency to be received at 12/31/98
---- ------------------------ ----------- ----------------------- -----------
<S> <C> <C> <C> <C>
3/12/99 30,000 US $ $ 30,000 3,484,230 Japanese Yen $ 31,114
3/12/99 20,000 US $ 20,000 2,287,780 Japanese Yen 20,430
3/12/99 10,000 US $ 10,000 1,149,500 Japanese Yen 10,265
3/12/99 20,000 US $ 20,000 2,298,260 Japanese Yen 20,523
3/12/99 30,000 US $ 30,000 3,423,990 Japanese Yen 30,576
3/12/99 2,285,740 Japanese Yen 20,411 20,000 US $ 20,000
3/12/99 435,842 US $ 435,842 51,429,286 Japanese Yen 459,255
3/12/99 45,118 US $ 45,118 84,718 Netherlands Guilder 45,253
3/12/99 297,819 Norwegian Krone 38,953 38,989 US $ 38,989
3/12/99 25,983 US $ 25,983 4,443,134 Portuguese Escudo 26,130
3/12/99 684,160 Swedish Krona 84,473 83,946 US $ 83,946
3/12/99 515,639 South African Rand 85,600 83,205 US $ 83,205
----------------- ---------------
$ 2,080,977 $2,106,634
================= ===============
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
JNL SERIES TRUST
NOTES TO THE FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
Salomon Brothers/JNL Global Bond Series
<TABLE>
<CAPTION>
Settlement U.S. $ value U.S. $ value
Date Currency to be delivered at 12/31/98 Currency to be received at 12/31/98
---- ------------------------ ----------- ----------------------- -----------
<S> <C> <C> <C> <C>
2/4/99 562,980,800 Italian Lira $ 341,065 340,375 US $ $ 340,375
2/16/99 434,795 Deutsche Mark 261,492 260,356 US $ 260,356
2/16/99 107,804 European Currency 127,147 211,942 Deutsche Mark 127,465
Unit
2/16/99 207,740 Deutsche Mark 124,938 122,344 US $ 122,344
2/16/99 1,755,504 Swedish Krona 214,650 360,000 Deutsche Mark 216,510
2/16/99 1,133,727 Finnish Markka 222,873 223,394 US $ 223,394
2/16/99 1,755,504 Swedish Krona 216,512 360,000 Deutsche Mark 214,650
2/16/99 34,306 European Currency 40,347 40,515 US $ 40,515
Unit
2/16/99 107,804 European Currency 126,787 211,942 Deutsche Mark 127,147
Unit
----------------- ----------------
$ 1,675,811 $ 1,672,756
================= ================
</TABLE>
T. Rowe Price/ JNL Established Growth Series
<TABLE>
<CAPTION>
Settlement U.S. $ value U.S. $ value
Date Currency to be delivered at 12/31/98 Currency to be received at 12/31/98
---- ------------------------ ----------- ----------------------- -----------
<S> <C> <C> <C> <C>
1/5/99 31,421 British Sterling $ 52,194 52,473 US $ $ 52,473
Pound
================ ================
</TABLE>
<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 thirty-six Series
comprising the JNL Series Trust (hereafter referred to as the "Trust") at
December 31, 1998, and the results of each of their operations, changes in each
of their net assets and the financial highlights for the periods indicated from
inception to December 31, 1998, 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, 1998, by correspondence with the
custodian and brokers, provide a reasonable basis for the opinion expressed
above.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Chicago, Illinois
February 17, 1999
<PAGE>
Jackson National Life Distributors, Inc.
