JNL(R) SERIES TRUST
<PAGE>
PROSPECTUS
May 1, 1999
JNL(R) SERIES TRUST
5901 Executive Drive o Lansing, Michigan 48911
This Prospectus provides you with the basic information you should know before
investing in the JNL Series Trust (Trust).
The shares of the Trust are sold to life insurance company separate accounts to
fund the benefits of variable annuity contracts. The Trust currently offers
shares in the following separate Series, each with its own investment objective.
JNL/Alger Growth Series
JNL/Eagle Core Equity Series
JNL/Eagle SmallCap Equity Series
JNL/Janus Aggressive Growth Series
JNL/Janus Capital Growth Series
JNL/Janus Global Equities Series
JNL/Putnam Growth Series
JNL/Putnam Value Equity Series
JNL/S&P Conservative Growth Series I
JNL/S&P Moderate Growth Series I
JNL/S&P Aggressive Growth Series I
JNL/S&P Very Aggressive Growth Series I
JNL/S&P Equity Growth Series I
JNL/S&P Equity Aggressive Growth Series I
PPM America/JNL Balanced Series
PPM America/JNL High Yield Bond Series
PPM America/JNL Money Market Series
Salomon Brothers/JNL Global Bond Series
Salomon Brothers/JNL U.S. Government & Quality Bond Series
T. Rowe Price/JNL Established Growth Series
T. Rowe Price /JNL International Equity Investment Series
T. Rowe Price /JNL Mid-Cap Growth Series
The Securities and Exchange Commission has not approved or disapproved the
Trust's securities, or determined whether this prospectus is accurate or
complete. It is a criminal offense to state otherwise.
"Standard & Poor's(R)", "S&P(R)", "S&P 500(R)", Standard & Poor's 500", "500",
"S&P MidCap 400 Index" and "Standard & Poor's 400 Index" are trademarks of The
McGraw-Hill Companies, Inc.
The Trust's Statement of Additional Information (SAI) contains additional
information about the Trust and the Series.
---------------
<PAGE>
TABLE OF CONTENTS
About the Series of the Trust
Management of the Trust
Administrative Fee
Investment in Trust Shares
Share Redemption
Tax Status
Financial Highlights
<PAGE>
ABOUT THE SERIES OF THE TRUST
JNL/Alger Growth Series
Investment Objective. The investment objective of the JNL/Alger Growth Series is
long-term capital appreciation.
Principal Investment Strategies. The Series seeks to achieve its objective by
investing primarily in a diversified portfolio of equity securities -- common
stock, preferred stock, and securities convertible into or exchangeable for
common stock -- of large, U.S.-traded companies. To provide flexibility to take
advantage of investment opportunities, the Series may hold a portion of its
assets in money market investments and repurchase agreements.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests in U.S.-traded equity
securities, it is subject to stock market risk. Stock prices
typically fluctuate more than the values of other types of
securities, typically in response to changes in the particular
company's financial condition and factors affecting the market in
general. For example, unfavorable or unanticipated poor earnings
performance of the company may result in a decline in its stock's
price, and a broad-based market drop may also cause a stock's
price to fall.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns since these shares were
first offered and shows how performance has varied from year to year. The table
shows the Series' average annual returns and compares them to the market
indicators listed. Both the chart and the table assume reinvestment of dividends
and distributions. The Series' returns shown in the chart and table below do not
reflect the deduction of any charges that are imposed under a variable annuity
contract. Those charges, which are described in the variable annuity prospectus,
will reduce the Series' performance. As with all mutual funds, the Series' past
performance does not necessarily indicate how it will perform in the future.
Year-By-Year Returns as of December 31
- --------------------------------------
13.41% 26.20% 45.66%
[Insert Chart]
1996 1997 1998
In the periods shown in the chart, the Series' highest quarterly return was
25.65% (4th quarter of 1998) and its lowest quarterly return was -7.37% (3rd
quarter of 1998).
Average Annual Total Returns as of December 31, 1998
----------------------------------------------------
1 year Life of Series*
JNL/Alger Growth Series 45.66% 25.06%
S&P 500 Index 28.58% 28.48%
The S&P 500 Index is a broad-based, unmanaged index.
* The Series began operations on October 16, 1995.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The JNL/Alger Growth Series seeks to
achieve its investment objective of long-term capital appreciation by investing
primarily in equity securities of large companies which trade on U.S. exchanges
or in the U.S. over-the-counter market. The Series considers a large company to
be one that, at the time its securities are acquired by the Series, has a market
capitalization of $1 billion or more. These companies typically have broad
product lines, markets, financial resources and depth of management.
The Series may take a temporary, defensive position by investing up to all of
its assets in debt securities (typically of a high grade), cash equivalents and
repurchase agreements. Taking a defensive position may reduce the potential for
appreciation in the Series' portfolio.
The Series may actively trade securities in seeking to achieve its objective.
Doing so may increase transaction costs, which may reduce performance.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
Sub-Adviser and Portfolio Management. The sub-adviser to the JNL/Alger Growth
Series is Fred Alger Management, Inc. (Alger Management), which is located at 1
World Trade Center, Suite 9333, New York, New York 10048. Alger Management is
generally engaged in the business of rendering investment advisory services to
institutions and, to a lesser extent, individuals and has been so engaged since
1964.
David D. Alger, President and Chief Investment Officer of Alger Management, is
primarily responsible for the day-to-day management of the Series. He has been
employed by Alger Management as Executive Vice President and Director of
Research since 1971, and as President since 1995. He serves as portfolio manager
for other mutual funds and investment accounts managed by Alger Management.
Ronald Tartaro also participates in the management of the Series. Mr. Tartaro
has been employed by Alger Management as a senior research analyst since 1990
and as a Senior Vice President since 1995. Mr. Alger and Mr. Tartaro have had
responsibility for the day-to-day management of the Series since the inception
of the Series.
<PAGE>
JNL/Eagle Core Equity Series
Investment Objective. The investment objective of the JNL/Eagle Core Equity
Series is long-term capital appreciation and, secondarily, current income.
Principal Investment Strategies. The Series seeks to achieve its objective by
investing primarily in a diversified portfolio of common stock of U.S. companies
that meet the criteria for one of three separate equity strategies: the growth
equity strategy, the value equity strategy and the equity income strategy.
o Under the growth equity strategy, the sub-adviser invests in
securities which it believes have sufficient growth potential to
offer above-average, long-term capital appreciation. The
subadviser seeks securities of companies which:
-- have projected earnings growth and return on equity
greater than 15%,
-- are dominant in their industries, and
-- have the ability to create and sustain a competitive
advantage.
o Under the value equity strategy, the sub-adviser invests in
securities which it believes indicate above-average financial
soundness and high intrinsic value relative to price. These
securities or their respective issuers have at least one of the
following characteristics when acquired for the Series:
-- price-to-earnings ratio or price-to-book value ratio of
less than or approximately equal to 75% of the S&P 500,
-- yield that approximates at least half of the average
yield to maturity of the Lehman Brothers Long Treasury
Bond Index (or similar index),
-- per share going concern value that, in the
sub-adviser's judgment, exceeds book value and market
value, or
-- long-term debt equal to or below tangible net worth.
o Under the equity income strategy, the sub-adviser invests in
income-producing securities.
The sub-adviser divides the Series' assets among each of these three strategies,
with about 40% of the assets allocated to each of the growth equity and value
equity strategies and about 20% to the equity income strategy.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests primarily in stocks of
U.S. companies, it is subject to stock market risk. Stock prices
typically fluctuate more than the values of other types of
securities, typically in response to changes in the particular
company's financial condition and factors affecting the market in
general. For example, unfavorable or unanticipated poor earnings
performance of the company may result in a decline in its stock's
price, and a broad-based market drop may also cause a stock's
price to fall.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns since these shares were
first offered and shows how performance has varied from year to year. The table
shows the Series' average annual returns and compares them to the market
indicators listed. Both the chart and the table assume reinvestment of dividends
and distributions. The Series' returns shown in the chart and table below do not
reflect the deduction of any charges that are imposed under a variable annuity
contract. Those charges, which are described in the variable annuity prospectus,
will reduce the Series' performance. As with all mutual funds, the Series' past
performance does not necessarily indicate how it will perform in the future.
Year-By-Year Returns as of December 31
- --------------------------------------
32.35% 16.54%
[Insert Chart]
1997 1998
In the periods shown in the chart, the Series' highest quarterly return was
18.43% (4th quarter of 1998) and its lowest quarterly return was -10.99% (3rd
quarter of 1998).
Average Annual Total Returns as of December 31, 1998
----------------------------------------------------
1 year Life of Series*
JNL/Eagle Core Equity Series 16.54% 24.15%
S&P 500 Index 28.58% 31.30%
The S&P 500 Index is a broad-based, unmanaged index.
* The Series began operations on September 16, 1996.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. Under the growth equity strategy, the
sub-adviser selects common stocks in part based on its opinions regarding the
sustainability of the company's competitive advantage in the marketplace and the
company's management team. The subadviser looks for securities of companies
which have an exceptional management team and which have the potential to
increase market share and drive EPS growth. If a particular stock appreciates to
over 5% of the total assets of the portfolio, the sub-adviser typically will
reduce the position to less than 5%. Generally, the sub-adviser will sell a
stock if its price appreciates to a level that the sub-adviser views as not
sustainable or to purchase stock that the sub-adviser believes presents a better
investment opportunity.
Under the value equity strategy, the sub-adviser screens a universe of over
2,500 companies. From this universe, the sub-adviser makes selections based on
its projections of the company's growth in earnings and dividends, earnings
momentum, and undervaluation based on a dividend discount model. The sub-adviser
develops target prices and value ranges from this analysis and makes portfolio
selection from among the top-rated securities. The sub-adviser will typically
sell a security if the security reaches its target price, negative changes occur
with respect to the issuer or its industry, or there is a significant change in
one or more of the four characteristics applicable to the security's selection.
However, the Series may continue to hold equity securities that no longer meet
the selection criteria but that the sub-adviser deems suitable investments in
view of the Series' investment objective.
Under normal market conditions, the Series invests at least 65% of its assets in
the common stock of U.S. companies and may invest the balance in other
securities, such as common stock of foreign issuers, corporate debt obligations,
U.S. Government securities, preferred stock, convertible stock, warrants and
rights to buy common stock, real estate investment trusts, repurchase agreements
and money market instruments. Investing in foreign securities presents
additional risks, such as those related to currency fluctuations and adverse
political or economic conditions affecting a foreign country. Although the
Series emphasizes investment-grade securities (or unrated securities that the
sub-adviser deems to be of comparable quality), the Series may invest in
non-investment-grade securities. A non-investment grade security may fluctuate
more in value, and present a greater risk of default, than a higher-rated
security.
The Series may also use derivative instruments, such as options, futures
contracts and indexed securities, which are subject to transaction costs and
certain risks, such as unanticipated changes in securities prices.
For temporary defensive purposes during actual or anticipated periods of general
market decline, the Series may invest up to 100% of its assets in high-grade
money market instruments, including U.S. Government securities, and repurchase
agreements secured by such instruments, as well as other high-quality debt
securities. Taking a defensive position may reduce the potential for
appreciation in the Series' portfolio.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the JNL/Eagle Core
Equity Series is Eagle Asset Management, Inc. (Eagle), 880 Carillon Parkway, St.
Petersburg, Florida 33716. Eagle is a wholly owned subsidiary of Raymond James
Financial, Inc. Eagle and its affiliates provide a wide range of financial
services to retail and institutional clients.
In its capacity as sub-adviser, Eagle supervises and manages the investment
portfolio of the Series. Mr. Ashi Parikh, Managing Director and Portfolio
Manager, is responsible for the day-to-day management of the growth equity
strategy. Mr. Parikh joined Eagle in April 1999, after serving as Managing
Director at Banc One Investment Advisers in Columbus, Ohio. Mr. Lou Kirschbaum,
Senior Vice President and Portfolio Manager and Mr. David Blount, Senior Vice
President and Portfolio Manager, as co-managers, are responsible for the
day-to-day management of both the value equity and the equity income strategies.
They assumed responsibility for the value equity strategy in January 1999; they
have been responsible for the equity income strategy since the inception of the
Series. Mr. Kirschbaum has been with Eagle since 1986, and Mr. Blount joined
Eagle in 1993.
<PAGE>
JNL/Eagle SmallCap Equity Series
Investment Objective. The investment objective of the JNL/Eagle SmallCap Equity
Series is long-term capital appreciation.
Principal Investment Strategies. The Series seeks to achieve its objective by
investing primarily in a diversified portfolio of equity securities of domestic
small capitalization companies, i.e., companies which, at the time of purchase,
typically have a market capitalization under $1 billion. The subadviser employs
a bottom-up approach to identify rapidly growing, under-researched small
capitalization companies that appear to be undervalued in relation to their long
term earnings growth rate or asset value. The subadviser generally invests in
companies which have accelerating earnings, reasonable valuations (typically
with a price-to-earnings ratio of no more than 75% of the earnings growth rate),
strong management that participates in the ownership of the company, reasonable
debt, and a high or expanding return on equity. The Series' equity holdings
consist primarily of common stocks, but may also include preferred stocks and
investment grade securities convertible into common stocks and warrants.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests primarily in stocks of
U.S. companies, it is subject to stock market risk. Stock prices
typically fluctuate more than the values of other types of
securities, typically in response to changes in the particular
company's financial condition and factors affecting the market in
general. For example, unfavorable or unanticipated poor earnings
performance of the company may result in a decline in its stock's
price, and a broad-based market drop may also cause a stock's
price to fall.
o Small cap investing. Investing in smaller, newer companies
generally involves greater risks than investing in larger, more
established ones. The companies in which the Series is likely to
invest have limited product lines, markets or financial resources
and may be subject to more abrupt or erratic market movements than
securities of larger, more established companies or the market
averages in general. In addition, many small capitalization
companies may be in the early stages of development. Accordingly,
an investment in the Series may not be appropriate for all
investors.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns since these shares were
first offered and shows how performance has varied from year to year. The table
shows the Series' average annual returns and compares them to the market
indicators listed. Both the chart and the table assume reinvestment of dividends
and distributions. The Series' returns shown in the chart and table below do not
reflect the deduction of any charges that are imposed under a variable annuity
contract. Those charges, which are described in the variable annuity prospectus,
will reduce the Series' performance. As with all mutual funds, the Series' past
performance does not necessarily indicate how it will perform in the future.
Year-By-Year Returns as of December 31
- --------------------------------------
27.64% 1.18%
[Insert Chart]
1997 1998
In the periods shown in the chart, the Series' highest quarterly return was
22.67% (4th quarter of 1998) and its lowest quarterly return was -23.92% (3rd
quarter of 1998).
Average Annual Total Returns as of December 31, 1998
----------------------------------------------------
1 year Life of Series*
JNL/Eagle SmallCap Equity Series 1.18% 19.01%
Russell 2000 Index -2.55% 10.44%
The Russell 2000 Index is a broad-based, unmanaged index.
* The Series began operations on September 16, 1996.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The JNL/Eagle SmallCap Equity Series
invests primarily in the equity securities of small capitalization U.S.
companies. However, it may also invest in American Depositary Receipts of U.S.
traded foreign issuers, U.S. Government securities, repurchase agreements and
other short-term money market instruments.
For temporary, defensive purposes during actual or anticipated periods of
general market decline, the Series may invest up to 100% of its assets in
high-grade money market instruments, including U.S. Government securities, and
repurchase agreements secured by such instruments, as well as other high-quality
debt securities. Taking a defensive position may reduce the potential for
appreciation in the Series' portfolio.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the JNL/Eagle
SmallCap Equity Series is Eagle Asset Management, Inc. (Eagle), 880 Carillon
Parkway, St. Petersburg, Florida 33716. Eagle and its affiliates provide a wide
range of financial services to retail and institutional clients.
Bert L. Boksen, Senior Vice President and Portfolio Manager of Eagle, is
responsible for the day-to-day management of the Series. Mr. Boksen joined Eagle
in April 1995 and has portfolio management responsibilities for its small cap
equity accounts. Prior to joining Eagle, Mr. Boksen was employed for 16 years by
Raymond James & Associates, Inc. in its institutional research and sales
department. While employed by Raymond James & Associates, Inc., Mr. Boksen
served as co-head of Research, Chief Investment Officer and Chairman of the
Raymond James & Associates, Inc. Focus List Committee. Mr. Boksen has had
responsibility for the day-to-day management of the Series since the inception
of the Series.
<PAGE>
JNL/Janus Aggressive Growth Series
Investment Objective. The investment objective of the JNL/Janus Aggressive
Growth Series is long-term growth of capital.
Principal Investment Strategies. The Series seeks to achieve its objective by
investing primarily in a diversified portfolio of common stocks of U.S. and
foreign companies selected for their growth potential. The Series may invest in
companies of any size, from larger, well-established companies to smaller,
emerging growth companies. The Series may invest to a lesser degree in other
types of securities, including preferred stock, warrants, convertible securities
and debt securities.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests in stocks of U.S. and
foreign companies, it is subject to stock market risk. Stock
prices typically fluctuate more than the values of other types of
securities, typically in response to changes in the particular
company's financial condition and factors affecting the market in
general. For example, unfavorable or unanticipated poor earnings
performance of the company may result in a decline in its stock's
price, and a broad-based market drop may also cause a stock's
price to fall. Investing in smaller, newer companies generally
involves greater risks than investing in larger, more established
ones.
For bonds, market risk generally reflects credit risk and interest
rate risk. Credit risk is the actual or perceived risk that the
issuer of the bond will not pay the interest and principal
payments when due. Bond value typically declines if the issuer's
credit quality deteriorates. Interest rate risk is the risk that
interest rates will rise and the value of bonds, including those
held by the Series, will fall. A broad-based market drop may also
cause a bond's price to fall.
o Foreign investing risk. Foreign investing involves risks not
typically associated with U.S. investment. These risks include,
among others, adverse fluctuations in foreign currency values as
well as adverse political, social and economic developments
affecting a foreign country. Investments in foreign countries
could be affected by factors not present in the U.S., such as
restrictions on receiving the investment proceeds from a foreign
country, foreign tax laws, and potential difficulties in enforcing
contractual obligations. Transactions in foreign securities may be
subject to less efficient settlement practices, including extended
clearance and settlement periods. Owning foreign securities could
cause the Series' performance to fluctuate more than if it held
only U.S. securities.
o Currency risk. The value of the Series' shares may change as a
result of changes in exchange rates reducing the value of the U.S.
dollar value of the Series' foreign investments. Currency exchange
rates can be volatile and affected by a number of factors, such as
the general economics of a country, the actions of U.S. and
foreign governments or central banks, the imposition of currency
controls, and speculation.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns since these shares were
first offered and shows how performance has varied from year to year. The table
shows the Series' average annual returns and compares them to the market
indicators listed. Both the chart and the table assume reinvestment of dividends
and distributions. The Series' returns shown in the chart and table below do not
reflect the deduction of any charges that are imposed under a variable annuity
contract. Those charges, which are described in the variable annuity prospectus,
will reduce the Series' performance. As with all mutual funds, the Series' past
performance does not necessarily indicate how it will perform in the future.
Year-By-Year Returns as of December 31
- --------------------------------------
18.95% 12.67% 57.66%
[Insert Chart]
1996 1997 1998
In the periods shown in the chart, the Series' highest quarterly return was
29.79% (4th quarter of 1998) and its lowest quarterly return was -6.56% (3rd
quarter of 1998).
Average Annual Total Returns as of December 31, 1998
----------------------------------------------------
1 year Life of Series*
JNL/Janus Aggressive Growth Series 57.66% 30.36%
S&P 500 Index 28.58% 28.63%
The S&P 500 Index is a broad-based, unmanaged index.
* The Series began operations on May 15, 1995.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The JNL/Janus Aggressive Growth Series
invests primarily in common stocks when the sub-adviser believes that the
relevant market environment favors profitable investing in those securities. The
sub-adviser seeks to identify individual companies with earnings growth
potential that may not be recognized by the market. The sub-adviser selects
securities for their capital growth potential; investment income is not a
consideration. When the sub-adviser believes that market conditions are not
favorable for profitable investing or when the sub-adviser is otherwise unable
to locate favorable investment opportunities, the Series may hedge its
investments to a greater degree and/or increase its position in cash or similar
investments. Doing so may reduce the potential for appreciation in the Series'
portfolio.
The Series may invest in "special situations" from time to time. A special
situation arises when, in the opinion of the sub-adviser, the securities of a
particular issuer will be recognized and appreciate in value due to a specific
development with respect to that issuer. Developments creating special
situations might include, among others, a new product or process, a
technological breakthrough, a management change or other extraordinary corporate
event, or differences in market supply of and demand for the security.
Investment in special situations may carry an additional risk of loss in the
event that the anticipated development does not occur or does not attract the
expected attention. The impact of this strategy on the Series will depend on the
Series' size and the extent of its holdings of special situation issuers
relative to total net assets.
The Series may use derivative instruments, such as futures contracts, options,
and forward currency contracts, for hedging or as a means of enhancing return.
These instruments are subject to transaction costs and certain risks, such as
unanticipated changes in interest rates, securities prices and global currency
markets.
The Series may invest in high-yield, high-risk, fixed-income securities,
commonly known as "junk bonds." These are corporate debt securities rated BBB or
lower by S&P or Baa or lower by Moody's, or unrated securities deemed by the
sub-adviser to be on comparable quality. Lower-rated securities generally
involve a higher risk of default than higher-rated ones.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the JNL/Janus
Aggressive Growth Series is Janus Capital Corporation (Janus Capital), with
principal offices at 100 Fillmore Street, Denver, Colorado 80206. Janus Capital
provides investment advisory services to mutual funds and other institutional
accounts.
Warren B. Lammert, Portfolio Manager of Janus Capital, is responsible for the
day-to-day management of the Series. Mr. Lammert joined Janus Capital in 1987.
He holds a Bachelor of Arts in Economics from Yale University and a Master of
Science in Economic History from the London School of Economics. He is a
Chartered Financial Analyst. Mr. Lammert has had responsibility for the
day-to-day management of the Series since the inception of the Series.
<PAGE>
JNL/Janus Capital Growth Series
Investment Objective. The investment objective of the JNL/Janus Capital Growth
Series is long-term growth of capital in a manner consistent with the
preservation of capital.
Principal Investment Strategies. The Series seeks to achieve its objective
through a non-diversified portfolio consisting primarily of common stock of U.S.
and foreign companies selected for their growth potential. The Series normally
invests a majority of its equity assets in medium-sized companies. The Series
may invest to a lesser degree in other types of securities, including preferred
stock, warrants, convertible securities and debt securities.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests in stocks of U.S. and
foreign companies, it is subject to stock market risk. Stock
prices typically fluctuate more than the values of other types of
securities, typically in response to changes in the particular
company's financial condition and factors affecting the market in
general. For example, unfavorable or unanticipated poor earnings
performance of the company may result in a decline in its stock's
price, and a broad-based market drop may also cause a stock's
price to fall.
For bonds, market risk generally reflects credit risk and interest
rate risk. Credit risk is the actual or perceived risk that the
issuer of the bond will not pay the interest and principal
payments when due. Bond value typically declines if the issuer's
credit quality deteriorates. Interest rate risk is the risk that
interest rates will rise and the value of bonds, including those
held by the Series, will fall. A broad-based market drop may also
cause a bond's price to fall.
o Foreign investing risk. Foreign investing involves risks not
typically associated with U.S. investment. These risks include,
among others, adverse fluctuations in foreign currency values as
well as adverse political, social and economic developments
affecting a foreign country. Investments in foreign countries
could be affected by factors not present in the U.S., such as
restrictions on receiving the investment proceeds from a foreign
country, foreign tax laws, and potential difficulties in enforcing
contractual obligations. Transactions in foreign securities may be
subject to less efficient settlement practices, including extended
clearance and settlement periods. Owning foreign securities could
cause the Series' performance to fluctuate more than if it held
only U.S. securities.
o Currency risk. The value of the Series' shares may change as a
result of changes in exchange rates reducing the value of the U.S.
dollar value of the Series' foreign investments. Currency exchange
rates can be volatile and affected by a number of factors, such as
the general economics of a country, the actions of U.S. and
foreign governments or central banks, the imposition of currency
controls, and speculation.
o Non-diversification. The Series is "non-diversified" as such term
is defined in the Investment Company Act of 1940, as amended,
which means that more than 5%, but not more than 25%, of its total
assets may be invested in securities of any one issuer. Thus, the
Series may hold a smaller number of issuers than if it were
"diversified." With a smaller number of different issuers, the
Series is subject to more risk than another fund holding a larger
number of issuers, since changes in the financial condition or
market status of a single issuer may cause greater fluctuation in
the Series' total return and share price.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns since these shares were
first offered and shows how performance has varied from year to year. The table
shows the Series' average annual returns and compares them to the market
indicators listed. Both the chart and the table assume reinvestment of dividends
and distributions. The Series' returns shown in the chart and table below do not
reflect the deduction of any charges that are imposed under a variable annuity
contract. Those charges, which are described in the variable annuity prospectus,
will reduce the Series' performance. As with all mutual funds, the Series' past
performance does not necessarily indicate how it will perform in the future.
Year-By-Year Returns as of December 31
- --------------------------------------
16.83% 15.01% 35.16%
[Insert Chart]
1996 1997 1998
In the periods shown in the chart, the Series' highest quarterly return was
35.74% (4th quarter of 1998) and its lowest quarterly return was -15.05% (3rd
quarter of 1998).
Average Annual Total Returns as of December 31, 1998
----------------------------------------------------
1 year Life of Series*
JNL/Janus Capital Growth Series 35.16% 27.59%
S&P MidCap 400 Index 19.09% 23.32%
The S&P 400 MidCap Index is a broad-based, unmanaged index.
* The Series began operations on May 15, 1995.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The JNL/Janus Capital Growth Series seeks
to achieve its objective by investing primarily in common stocks selected for
their growth potential and normally invests at least 50% of its equity assets in
medium-sized companies. Medium-sized companies are those whose market
capitalizations fall within the range of companies in the S&P MidCap 400 Index
and are determined at the time their securities are acquired by the Series. The
market capitalizations within the Index will vary, but as of December 31, 1998,
they ranged between approximately $142 million and $73 billion. The sub-adviser
seeks to identify individual companies with earnings growth potential that may
not be recognized by the market. The sub-adviser selects securities for their
capital growth potential; investment income is not a consideration. When the
sub-adviser believes that market conditions are not favorable for profitable
investing or when the sub-adviser is otherwise unable to locate favorable
investment opportunities, the Series may hedge its investments to a greater
degree and/or increase its position in cash or similar investments. Doing so may
reduce the potential for appreciation in the Series' portfolio.
The Series may invest in "special situations" from time to time. A special
situation arises when, in the opinion of the sub-adviser, the securities of a
particular issuer will be recognized and appreciate in value due to a specific
development with respect to that issuer. Developments creating special
situations might include, among others, a new product or process, a
technological breakthrough, a management change or other extraordinary corporate
event, or differences in market supply of and demand for the security.
Investment in special situations may carry an additional risk of loss in the
event that the anticipated development does not occur or does not attract the
expected attention. The impact of this strategy on the Series will depend on the
Series' size and the extent of its holdings of special situation issuers
relative to total net assets.
The Series may use derivative instruments, such as futures contracts, options,
and forward currency contracts, for hedging or as a means of enhancing return.
These instruments are subject to transaction costs and certain risks, such as
unanticipated changes in interest rates, securities prices and global currency
markets.
The Series may invest in high-yield, high-risk, fixed-income securities,
commonly known as "junk bonds." These are corporate debt securities rated BBB or
lower by S&P or Baa or lower by Moody's, or unrated securities deemed by the
sub-adviser to be on comparable quality. Lower-rated securities generally
involve a higher risk of default than higher-rated ones.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the JNL/Janus
Capital Growth Series is Janus Capital Corporation (Janus Capital), with
principal offices at 100 Fillmore Street, Denver, Colorado 80206. Janus Capital
provides investment advisory services to mutual funds and other institutional
accounts.
James P. Goff, Portfolio Manager of Janus Capital, is responsible for the
day-to-day management of the JNL/Janus Capital Growth Series. Mr. Goff joined
Janus Capital in 1988. He holds a Bachelor of Arts in Economics from Yale
University and is a Chartered Financial Analyst. Mr. Goff has had responsibility
for the day-to-day management of the Series since the inception of the Series.
<PAGE>
JNL/Janus Global Equities Series
Investment Objective. The investment objective of the JNL/Janus Global Equities
Series is long-term growth of capital in a manner consistent with the
preservation of capital.
Principal Investment Strategies. The Series seeks to achieve its objective by
investing primarily in a diversified portfolio of common stocks of foreign and
domestic issuers. The Series may invest to a lesser degree in other types of
securities, including preferred stock, warrants, convertible securities, and
debt securities, such as corporate bonds. The Series can invest on a worldwide
basis in companies and other organizations of any size, regardless of country of
organization or place of principal business activity, as well as domestic and
foreign governments, government agencies and other governmental entities. The
Series normally invests in securities of issuers from at least five different
countries, including the United States, although it may invest in fewer than
five countries.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests in stocks of U.S. and
foreign companies, it is subject to stock market risk. Stock
prices typically fluctuate more than the values of other types of
securities, typically in response to changes in the particular
company's financial condition and factors affecting the market in
general. For example, unfavorable or unanticipated poor earnings
performance of the company may result in a decline in its stock's
price, and a broad-based market drop may also cause a stock's
price to fall.
For bonds, market risk generally reflects credit risk and
interest rate risk. Credit risk is the actual or perceived risk
that the issuer of the bond will not pay the interest and
principal payments when due. Bond value typically declines if the
issuer's credit quality deteriorates. Interest rate risk is the
risk that interest rates will rise and the value of bonds,
including those held by the Series, will fall. A broad-based
market drop may also cause a bond's price to fall.
o Foreign investing risk. Foreign investing involves risks not
typically associated with U.S. investment. These risks include,
among others, adverse fluctuations in foreign currency values as
well as adverse political, social and economic developments
affecting a foreign country. Investments in foreign countries
could be affected by factors not present in the U.S., such as
restrictions on receiving the investment proceeds from a foreign
country, foreign tax laws, and potential difficulties in
enforcing contractual obligations. Transactions in foreign
securities may be subject to less efficient settlement practices,
including extended clearance and settlement periods. Owning
foreign securities could cause the Series' performance to
fluctuate more than if it held only U.S. securities. To the
extent that the Series invests in bonds issued by a foreign
government, the Series may have limited legal recourse in the
event of default. Political conditions, especially a country's
willingness to meet the terms of its debt obligations, can create
special risks.
o Currency risk. The value of the Series' shares may change as a
result of changes in exchange rates reducing the value of the
U.S. dollar value of the Series' foreign investments. Currency
exchange rates can be volatile and affected by a number of
factors, such as the general economics of a country, the actions
of U.S. and foreign governments or central banks, the imposition
of currency controls, and speculation.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns since these shares were
first offered and shows how performance has varied from year to year. The table
shows the Series' average annual returns and compares them to the market
indicators listed. Both the chart and the table assume reinvestment of dividends
and distributions. The Series' returns shown in the chart and table below do not
reflect the deduction of any charges that are imposed under a variable annuity
contract. Those charges, which are described in the variable annuity prospectus,
will reduce the Series' performance. As with all mutual funds, the Series' past
performance does not necessarily indicate how it will perform in the future.
Year-By-Year Returns as of December 31
- --------------------------------------
31.36% 19.12% 26.87%
[Insert Chart]
1996 1997 1998
In the periods shown in the chart, the Series' highest quarterly return was
20.52% (4th quarter of 1998) and its lowest quarterly return was -16.93% (3rd
quarter of 1998).
Average Annual Total Returns as of December 31, 1998
----------------------------------------------------
1 year Life of Series*
JNL/Janus Global Equities Series 26.87% 29.59%
Morgan Stanley Capital
International World Index 22.78% 16.53%
The Morgan Stanley Capital International World Index is a broad-based, unmanaged
index.
* The Series began operations on May 15, 1995.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The JNL/Janus Global Equities Series
invests primarily in common stocks of foreign and domestic companies and, to a
lesser degree, other types of securities, such as bonds and other debt
securities. The sub-adviser seeks to identify individual companies with earnings
growth potential that may not be recognized by the market at large. The
sub-adviser selects securities for their capital growth potential; investment
income is not a consideration. When the sub-adviser believes that market
conditions are not favorable for profitable investing or when the sub-adviser is
otherwise unable to locate favorable investment opportunities, the Series may
hedge its investments to a greater degree and/or increase its position in cash
or similar investments. Doing so may reduce the potential for appreciation in
the Series' portfolio.
The Series may invest in "special situations" from time to time. A special
situation arises when, in the opinion of the sub-adviser, the securities of a
particular issuer will be recognized and appreciate in value due to a specific
development with respect to that issuer. Developments creating special
situations might include, among others, a new product or process, a
technological breakthrough, a management change or other extraordinary corporate
event, or differences in market supply of and demand for the security.
Investments in special situations may carry an additional risk of loss in the
event that the anticipated development does not occur or does not attract the
expected attention. The impact of this strategy on the Series will depend on the
Series' size and the extent of its holdings of special situation issuers
relative to total net assets.
The Series may use derivative instruments, such as futures contracts, options,
and forward currency contracts, for hedging or as a means of enhancing return.
These instruments are subject to transaction costs and certain risks, such as
unanticipated changes in interest rates, securities prices and global currency
markets.
The Series may invest in high-yield, high-risk fixed-income securities, commonly
known as "junk bonds." These are corporate debt securities rated BBB or lower by
S&P or Baa or lower by Moody's, or unrated securities deemed by the sub-adviser
to be of comparable quality. Lower-rated securities generally involve a higher
risk of default, and may fluctuate more in value than higher-rated securities.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the JNL/Janus
Global Equities Series is Janus Capital Corporation (Janus Capital), with
principal offices at 100 Fillmore Street, Denver, Colorado 80206. Janus Capital
provides investment advisory services to mutual funds and other institutional
accounts.
Helen Young Hayes, Portfolio Manager of Janus Capital, is responsible for the
day-to-day management of the Series. Ms. Hayes joined Janus Capital in 1987. She
holds a Bachelor of Arts in Economics from Yale University and is a Chartered
Financial Analyst. Ms. Hayes has had responsibility for the day-to-day
management of the Series since the inception of the Series.
<PAGE>
JNL/Putnam Growth Series
Investment Objective. The investment objective of the JNL/Putnam Growth Series
is long-term capital growth.
Principal Investment Strategies. The Series seeks to achieve its objective by
investing primarily in a diversified portfolio of common stock of domestic,
large-capitalization companies. However, the Series may also invest in preferred
stocks, bonds, convertible preferred stock and convertible debentures if the
sub-adviser believes that they offer the potential for capital appreciation. The
Series may invest a portion of its assets in foreign securities.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests in stocks of U.S. and
foreign companies, it is subject to stock market risk. Stock
prices typically fluctuate more than the values of other types of
securities, typically in response to changes in the particular
company's financial condition and factors affecting the market in
general. For example, unfavorable or unanticipated poor earnings
performance of the company may result in a decline in its stock's
price, and a broad-based market drop may also cause a stock's
price to fall.
For bonds, market risk generally reflects credit risk and interest
rate risk. Credit risk is the actual or perceived risk that the
issuer of the bond will not pay the interest and principal
payments when due. Bond value typically declines if the issuer's
credit quality deteriorates. Interest rate risk is the risk that
interest rates will rise and the value of bonds, including those
held by the Series, will fall. A broad-based market drop may also
cause a bond's price to fall.
o Foreign investing risk. Foreign investing involves risks not
typically associated with U.S. investment. These risks include,
among others, adverse fluctuations in foreign currency values as
well as adverse political, social and economic developments
affecting a foreign country. Investments in foreign countries
could be affected by factors not present in the U.S., such as
restrictions on receiving the investment proceeds from a foreign
country, foreign tax laws, and potential difficulties in enforcing
contractual obligations. Transactions in foreign securities may be
subject to less efficient settlement practices, including extended
clearance and settlement periods. Owning foreign securities could
cause the Series' performance to fluctuate more than if it held
only U.S. securities.
o Currency risk. The value of the Series' shares may change as a
result of changes in exchange rates reducing the value of the U.S.
dollar value of the Series' foreign investments. Currency exchange
rates can be volatile and affected by a number of factors, such as
the general economics of a country, the actions of U.S. and
foreign governments or central banks, the imposition of currency
controls, and speculation.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns since these shares were
first offered and shows how performance has varied from year to year. The table
shows the Series' average annual returns and compares them to the market
indicators listed. Both the chart and the table assume reinvestment of dividends
and distributions. The Series' returns shown in the chart and table below do not
reflect the deduction of any charges that are imposed under a variable annuity
contract. Those charges, which are described in the variable annuity prospectus,
will reduce the Series' performance. As with all mutual funds, the Series' past
performance does not necessarily indicate how it will perform in the future.
Year-By-Year Returns as of December 31
- --------------------------------------
26.81% 21.88% 34.93%
[Insert Chart]
1996 1997 1998
In the periods shown in the chart, the Series' highest quarterly return was
24.99% (4th quarter of 1998) and its lowest quarterly return was -12.00% (3rd
quarter of 1998).
Average Annual Total Returns as of December 31, 1998
----------------------------------------------------
1 year Life of Series*
JNL/Putnam Growth Series 34.93% 30.82%
S&P 500 Index 28.58% 28.63%
The S&P 500 Index is a broad-based, unmanaged index.
* The Series began operations on May 15, 1995. Prior to May 1, 1997, the Series
was managed by Phoenix Investment Counsel, Inc.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The JNL/Putnam Growth Series invests
primarily in the equity securities of domestic, large capitalization companies.
However, the Series may invest any amount or proportion of its assets in any
class or type of security believed by the sub-adviser to offer potential for
capital appreciation over both the intermediate and long term.
The Series may use derivative instruments, such as financial futures contracts
and options, for hedging and risk management. These instruments are subject to
transaction costs and certain risks, such as unanticipated changes in interest
rates, securities prices and global currency markets.
For temporary, defensive purposes, when the sub-adviser believes other types of
investments are advantageous on the basis both of risk and protection of capital
values, the Series may invest in fixed-income securities with or without
warrants or conversion features and may retain cash, or invest up to all of its
assets in cash equivalents. Taking a defensive position may reduce the potential
for appreciation of the Series' portfolio.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the JNL/Putnam
Growth Series is Putnam Investment Management, Inc. (Putnam), located at One
Post Office Square, Boston, Massachusetts 02109. Putnam has been managing mutual
funds since 1937.
C. Beth Cotner has responsibility for the day-to-day management of the Series.
Ms. Cotner, Senior Vice President, has been employed as a Senior Portfolio
Manager by Putnam since September 1995. Prior to that, Ms. Cotner was Executive
Vice President of Kemper Financial Services. Ms. Cotner has had responsibility
for the day-to-day management of the Series since May 1, 1997.
<PAGE>
JNL/Putnam Value Equity Series
Investment Objective. The investment objective of the JNL/Putnam Value Equity
Series is capital growth, with income as a secondary objective.
Principal Investment Strategies. The Series seeks to achieve its objectives by
investing primarily in a diversified portfolio of equity securities of domestic,
large-capitalization companies. For this purpose, equity securities include
common stocks, securities convertible into common stock and securities with
common stock characteristics, such as rights and warrants. The Series considers
a large-capitalization company to be one that, at the time its securities are
acquired by the Series, has a market capitalization of $2 billion or greater.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests in the equity securities
of U.S. and foreign companies, it is subject to stock market risk.
Stock prices typically fluctuate more than the values of other
types of securities, typically in response to changes in the
particular company's financial condition and factors affecting the
market in general. For example, unfavorable or unanticipated poor
earnings performance of the company may result in a decline in its
stock's price, and a broad-based market drop may also cause a
stock's price to fall.
o Foreign investing risk. Foreign investing involves risks not
typically associated with U.S. investment. These risks include,
among others, adverse fluctuations in foreign currency values as
well as adverse political, social and economic developments
affecting a foreign country. Investments in foreign countries
could be affected by factors not present in the U.S., such as
restrictions on receiving the investment proceeds from a foreign
country, foreign tax laws, and potential difficulties in enforcing
contractual obligations. Transactions in foreign securities may be
subject to less efficient settlement practices, including extended
clearance and settlement periods. Owning foreign securities could
cause the Series' performance to fluctuate more than if it held
only U.S. securities.
o Currency risk. The value of the Series' shares may change as a
result of changes in exchange rates reducing the value of the U.S.
dollar value of the Series' foreign investments. Currency exchange
rates can be volatile and affected by a number of factors, such as
the general economics of a country, the actions of U.S. and
foreign governments or central banks, the imposition of currency
controls, and speculation.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns since these shares were
first offered and shows how performance has varied from year to year. The table
shows the Series' average annual returns and compares them to the market
indicators listed. Both the chart and the table assume reinvestment of dividends
and distributions. The Series' returns shown in the chart and table below do not
reflect the deduction of any charges that are imposed under a variable annuity
contract. Those charges, which are described in the variable annuity prospectus,
will reduce the Series' performance. As with all mutual funds, the Series' past
performance does not necessarily indicate how it will perform in the future.
Year-By-Year Returns as of December 31
- --------------------------------------
24.33% 21.82% 12.48%
[Insert Chart]
1996 1997 1998
In the periods shown in the chart, the Series' highest quarterly return was
16.64% (4th quarter of 1998) and its lowest quarterly return was -11.03% (3rd
quarter of 1998).
Average Annual Total Returns as of December 31, 1998
----------------------------------------------------
1 year Life of Series*
JNL/Putnam Value Equity Series 12.48% 22.46%
S&P 500 Index 28.58% 28.63%
The S&P 500 Index is a broad-based, unmanaged index.
* The Series began operations on May 15, 1995. Prior to May 1, 1997, the Series
was managed by PPM America, Inc.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The JNL/Putnam Value Equity Series invests
primarily in equity securities of domestic, large-capitalization companies. The
sub-adviser typically selects companies whose stocks have distinctly
above-average dividend yields and market prices that it believes are undervalued
relative to the normal earning power of the company. Under this approach, the
sub-adviser seeks to identify investments where current investor enthusiasm is
low, as reflected in their valuations. The sub-adviser typically reduces the
Series' exposure to a company when its stock price approaches, in the
sub-adviser's judgment, fair valuation.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the JNL/Putnam
Value Equity Series is Putnam Investment Management, Inc. (Putnam), located at
One Post Office Square, Boston, Massachusetts 02109. Putnam has been managing
mutual funds since 1937.
Anthony I. Kreisel a Managing Director of Putnam, has responsibility for the
day-to-day management of the Series. Mr. Kreisel has been an investment
professional at Putnam since 1986. Mr. Kreisel has had responsibility for the
day-to-day management of the Series since May 1, 1997.
<PAGE>
JNL/S&P Conservative Growth Series I
Investment Objective. The investment objective of the JNL/S&P Conservative
Growth Series I is capital growth and current income.
Principal Investment Strategies. The Series seeks to achieve its objective by
investing in a diversified group of other Series of the Trust (Underlying
Series). The Underlying Series in which the JNL/S&P Conservative Growth Series I
may invest are the JNL/Alger Growth Series, JNL/Eagle Core Equity Series,
JNL/Eagle SmallCap Equity Series, JNL/Janus Aggressive Growth Series, JNL/Janus
Capital Growth Series, JNL/Janus Global Equities Series, JNL/Putnam Growth
Series, JNL/Putnam Value Equity Series, PPM America/JNL Balanced Series, PPM
America/JNL High Yield Bond Series, PPM America/JNL Money Market Series, Salomon
Brothers/JNL Global Bond Series, Salomon Brothers/JNL U.S. Government & Quality
Bond Series, T. Rowe Price/JNL Established Growth Series, T. Rowe Price/JNL
International Equity Investment Series, and T. Rowe Price/JNL Mid-Cap Growth
Series.
The Series seeks to achieve capital growth through its investments in Underlying
Series that invest primarily in equity securities. These investments may include
Series that invest in stocks of large established companies as well as those
that invest in stocks of smaller companies with above-average growth potential.
The Series seeks to achieve current income through its investments in Underlying
Series that invest primarily in fixed-income securities. These investments may
include Underlying Series that invest in foreign bonds denominated in currencies
other than U.S. dollars as well as Underlying Series that invest exclusively in
bonds of U.S. issuers. The Series may invest in Underlying Series that invest
exclusively in investment-grade securities, as well as Underlying Series that
invest in high-yield, high-risk bonds.
Under normal circumstances, the Series allocates approximately 55% to 65% of its
assets to Underlying Series that invest primarily in equity securities, 30% to
40% to Underlying Series that invest primarily in fixed-income securities and 0%
to 10% to Underlying Series that invest primarily in money market funds. Within
these three asset classes, the Series remains flexible with respect to the
percentage it will allocate among Underlying Series.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. Since the Series
concentrates its investments in shares of the Underlying Series, its performance
is directly related to the ability of the Underlying Series to meet their
respective investment objectives, as well as the sub-adviser's allocation among
the Underlying Series. Accordingly, a variety of factors may influence the
performance of the Series, such as:
o Market risk. Because the Series invests indirectly in stocks of
U.S. and foreign companies, it is subject to stock market risk.
Stock prices typically fluctuate more than the values of other
types of securities, typically in response to changes in the
particular company's financial condition and factors affecting
the market in general. For example, unfavorable or unanticipated
poor earnings performance of the company may result in a decline
in its stock's price, and a broad-based market drop may also
cause a stock's price to fall.
For bonds, market risk generally reflects credit risk and
interest rate risk. Credit risk is the actual or perceived risk
that the issuer of the bond will not pay the interest and
principal payments when due. Bond value typically declines if the
issuer's credit quality deteriorates. Interest rate risk is the
risk that interest rates will rise and the value of bonds,
including those held by an Underlying Series, will fall. A
broad-based market drop may also cause a bond's price to fall.
o Prepayment risk. During periods of falling interest rates, there
is the risk that a debt security with a high stated interest rate
will be prepaid before its expected maturity date.
o Foreign investing risk. Foreign investing involves risks not
typically associated with U.S. investment. These risks include,
among others, adverse fluctuations in foreign currency values as
well as adverse political, social and economic developments
affecting a foreign country. Investments in foreign countries
could be affected by factors not present in the U.S., such as
restrictions on receiving the investment proceeds from a foreign
country, foreign tax laws, and potential difficulties in
enforcing contractual obligations. Transactions in foreign
securities may be subject to less efficient settlement practices,
including extended clearance and settlement periods. Owning
foreign securities could cause an Underlying Series' performance
to fluctuate more than if it held only U.S. securities. To the
extent that an Underlying Series invests in bonds issued by a
foreign government, that Series may have limited legal recourse
in the event of default. Political conditions, especially a
country's willingness to meet the terms of its debt obligations,
can create special risks.
o Emerging markets risk. The Series may invest a portion of its
assets in one or more Underlying Series that hold securities of
issuers in emerging markets, which involves greater risk.
Emerging market countries typically have economic and political
systems that are less fully developed, and likely to be less
stable, than those of more advanced countries. Emerging market
countries may have policies that restrict investment by
foreigners, and there is a higher risk of a government taking
private property. Low or nonexistent trading volume in securities
of issuers in emerging markets may result in a lack of liquidity
and in price volatility. Issuers in emerging market typically are
subject to a greater degree of change in earnings and business
prospects than are companies in developed markets.
o High-yield/high-risk bonds. Lower-rated bonds involve a higher
degree of credit risk, which is the risk that the issuer will not
make interest or principal payments when due. In the event of an
unanticipated default, an Underlying Series would experience a
reduction in its income, a decline in the market value of the
securities so affected and a decline in the value of its shares.
During an economic downturn or substantial period of rising
interest rates, highly leveraged issuers may experience financial
stress which could adversely affect their ability to service
principal and interest payment obligations, to meet projected
business goals and to obtain additional financing. The market
prices of lower-rated securities are generally less sensitive to
interest rate changes than higher-rated investments, but more
sensitive to adverse economic or political changes, or individual
developments specific to the issuer. Periods of economic or
political uncertainty and change can be expected to result in
volatility of prices of these securities.
o Currency risk. The value of the Series' shares may change as a
result of changes in exchange rates reducing the value of the
U.S. dollar value of an Underlying Series' foreign investments.
Currency exchange rates can be volatile and affected by a number
of factors, such as the general economics of a country, the
actions of U.S. and foreign governments or central banks, the
imposition of currency controls, and speculation.
o Non-diversification. The Series is "non-diversified" as such term
is defined in the Investment Company Act of 1940, as amended,
which means that more than 5%, but not more than 25%, of its
total assets may be invested in securities of any one issuer.
Thus, the Series may hold a smaller number of issuers than if it
were "diversified." With a smaller number of different issuers,
the Series is subject to more risk than another fund holding a
larger number of issuers, since changes in the financial
condition or market status of a single issuer may cause greater
fluctuation in the Series' total return and share price.
Because the Series invests exclusively in other Series of the Trust, you should
look elsewhere in this prospectus for the particular information about those
Series. As a shareholder of an Underlying Series, the Series will bear its pro
rata share of the expenses of that Underlying Series, which could result in
duplication of certain fees, including management and administration fees.
Performance. The performance of the Series will vary from year to year. The
Series' performance figures will not reflect the deduction of any charges that
are imposed under a variable annuity contract. Those charges, which are
described in the variable annuity prospectus, will reduce the Series'
performance. As with all mutual funds, the Series' past performance does not
necessarily indicate how it will perform in the future.
Performance for the Series has not been included because the Series had not been
in operation for a full fiscal year as of December 31, 1998.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The JNL/S&P Conservative Growth Series I
asset allocation is expected to result in less risk than that incurred by
JNL/S&P Moderate Growth Series I, JNL/S&P Aggressive Growth Series I, JNL/S&P
Very Aggressive Growth Series I, JNL/S&P Equity Growth Series I or JNL/S&P
Equity Aggressive Growth Series I.
When the sub-adviser believes that a temporary defensive position is desirable,
the Series may invest up to 100% of its assets in cash or cash equivalents.
Doing so may reduce the potential for appreciation of the Series' portfolio.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the JNL/S&P
Conservative Growth Series I is Standard & Poor's Investment Advisory Services,
Inc. (SPIAS), located at 25 Broadway, New York, New York 10004. SPIAS was
established in 1995 to provide investment advice to the financial community.
SPIAS operates independently of and has no access to analysis or other
information supplied or obtained by Standard & Poor's Ratings Services in
connection with its ratings business, except to the extent such information is
made available by Standard & Poor's Ratings Services to the general public.
David M. Blitzer and Joshua M. Harari, CFA, share the primary responsibility for
the day-to-day management of the Series. Mr. Blitzer has been Vice President of
SPIAS since 1995 and has been an economist with Standard & Poor's Equity
Services Group (which operates independently of Standard & Poor's Ratings
Services) since 1982. Mr. Blitzer has had responsibility for the day-to-day
management of the Series since the inception of the Series. Mr. Harari has been
a senior investment officer with the Quantitative Services department of
Standard & Poor's Financial Information Services since 1998. Since joining
Standard & Poor's in 1986, Mr. Harari served as an equity analyst and supervisor
of industrial analysts with Standard & Poor's Equity Services Group. Mr. Harari
has had responsibility for the day-to-day management of the Series since May
1998.
<PAGE>
JNL/S&P Moderate Growth Series I
Investment Objective. The investment objective of the JNL/S&P Moderate Growth
Series I is to seek capital growth. Current income is a secondary objective.
Principal Investment Strategies. The Series seeks to achieve its objectives by
investing in a diversified group of other Series of the Trust (Underlying
Series). The Underlying Series in which the JNL/S&P Moderate Growth Series I may
invest are the JNL/Alger Growth Series, JNL/Eagle Core Equity Series, JNL/Eagle
SmallCap Equity Series, JNL/Janus Aggressive Growth Series, JNL/Janus Capital
Growth Series, JNL/Janus Global Equities Series, JNL/Putnam Growth Series,
JNL/Putnam Value Equity Series, PPM America/JNL Balanced Series, PPM America/JNL
High Yield Bond Series, PPM America/JNL Money Market Series, Salomon
Brothers/JNL Global Bond Series, Salomon Brothers/JNL U.S. Government & Quality
Bond Series, T. Rowe Price/JNL Established Growth Series, T. Rowe Price/JNL
International Equity Investment Series, and T. Rowe Price/JNL Mid-Cap Growth
Series.
The Series seeks to achieve capital growth through its investments in Underlying
Series that invest primarily in equity securities. These investments may include
Underlying Series that invest in stocks of large established companies as well
as those that invest in stocks of smaller companies with above-average growth
potential.
The Series seeks to achieve current income through its investments in Underlying
Series that invest primarily in fixed-income securities. These investments may
include Underlying Series that invest in foreign bonds denominated in currencies
other than U.S. dollars as well as Underlying Series that invest exclusively in
bonds of U.S. issuers. The Series may invest in Underlying Series that invest
exclusively in investment-grade securities, as well as Underlying Series that
invest in high-yield, high-risk bonds.
Under normal circumstances, the Series allocates approximately 70% to 80% of its
assets to Underlying Series that invest primarily in equity securities and 20%
to 30% to Underlying Series that invest primarily in fixed-income securities.
Within these asset classes, the Series remains flexible with respect to the
percentage it will allocate among particular Underlying Series.
Principal Risks of Investing in the Series
An investment in the Series is not guaranteed. As with any mutual fund, the
value of the Series' shares will change and you could lose money by investing in
the Series. Since the Series concentrates its investments in shares of the
Underlying Series, its performance is directly related to the ability of the
Underlying Series to meet their respective investment objectives, as well as the
sub-adviser's allocation among the Underlying Series. Accordingly, a variety of
factors may influence its performance, such as:
o Market risk. Because the Series invests indirectly in stocks of
U.S. and foreign companies, it is subject to stock market risk.
Stock prices typically fluctuate more than the values of other
types of securities, typically in response to changes in the
particular company's financial condition and factors affecting
the market in general. For example, unfavorable or unanticipated
poor earnings performance of the company may result in a decline
in its stock's price, and a broad-based market drop may also
cause a stock's price to fall.
For bonds, market risk generally reflects credit risk and
interest rate risk. Credit risk is the actual or perceived risk
that the issuer of the bond will not pay the interest and
principal payments when due. Bond value typically declines if the
issuer's credit quality deteriorates. Interest rate risk is the
risk that interest rates will rise and the value of bonds,
including those held by an Underlying Series, will fall. A
broad-based market drop may also cause a bond's price to fall.
o Prepayment risk. During periods of falling interest rates, there
is the risk that a debt security with a high stated interest rate
will be prepaid before its expected maturity date.
o Foreign investing risk. Foreign investing involves risks not
typically associated with U.S. investment. These risks include,
among others, adverse fluctuations in foreign currency values as
well as adverse political, social and economic developments
affecting a foreign country. Investments in foreign countries
could be affected by factors not present in the U.S., such as
restrictions on receiving the investment proceeds from a foreign
country, foreign tax laws, and potential difficulties in
enforcing contractual obligations. Transactions in foreign
securities may be subject to less efficient settlement practices,
including extended clearance and settlement periods. Owning
foreign securities could cause an Underlying Series' performance
to fluctuate more than if it held only U.S. securities. To the
extent that an Underlying Series invests in bonds issued by a
foreign government, that Series may have limited legal recourse
in the event of default. Political conditions, especially a
country's willingness to meet the terms of its debt obligations,
can create special risks.
o Emerging markets risk. The Series may invest a portion of its
assets in one or more Underlying Series that hold securities of
issuers in emerging markets, which involves greater risk.
Emerging market countries typically have economic and political
systems that are less fully developed, and likely to be less
stable, than those of more advanced countries. Emerging market
countries may have policies that restrict investment by
foreigners, and there is a higher risk of a government taking
private property. Low or nonexistent trading volume in securities
of issuers in emerging markets may result in a lack of liquidity
and in price volatility. Issuers in emerging market typically are
subject to a greater degree of change in earnings and business
prospects than are companies in developed markets.
o High-yield/high-risk bonds. Lower-rated bonds involve a higher
degree of credit risk, which is the risk that the issuer will not
make interest or principal payments when due. In the event of an
unanticipated default, an Underlying Series would experience a
reduction in its income, a decline in the market value of the
securities so affected and a decline in the value of its shares.
During an economic downturn or substantial period of rising
interest rates, highly leveraged issuers may experience financial
stress which could adversely affect their ability to service
principal and interest payment obligations, to meet projected
business goals and to obtain additional financing. The market
prices of lower-rated securities are generally less sensitive to
interest rate changes than higher-rated investments, but more
sensitive to adverse economic or political changes, or individual
developments specific to the issuer. Periods of economic or
political uncertainty and change can be expected to result in
volatility of prices of these securities.
o Currency risk. The value of the Series' shares may change as a
result of changes in exchange rates reducing the value of the
U.S. dollar value of an Underlying Series' foreign investments.
Currency exchange rates can be volatile and affected by a number
of factors, such as the general economics of a country, the
actions of U.S. and foreign governments or central banks, the
imposition of currency controls, and speculation.
o Non-diversification. The Series is "non-diversified" as such term
is defined in the Investment Company Act of 1940, as amended,
which means that more than 5%, but not more than 25%, of its
total assets may be invested in securities of any one issuer.
Thus, the Series may hold a smaller number of issuers than if it
were "diversified." With a smaller number of different issuers,
the Series is subject to more risk than another fund holding a
larger number of issuers, since changes in the financial
condition or market status of a single issuer may cause greater
fluctuation in the Series' total return and share price.
Because the Series invests exclusively in other series of the Trust, you should
look elsewhere in this prospectus for the particular information about those
series. As a shareholder of an Underlying Series, the Series will bear its pro
rata share of the expenses of that Underlying Series, which could result in
duplication of certain fees, including management and administration fees.
Performance. The performance of the Series will vary from year to year. The
Series' performance figures will not reflect the deduction of any charges that
are imposed under a variable annuity contract. Those charges, which are
described in the variable annuity prospectus, will reduce the Series'
performance. As with all mutual funds, the Series' past performance does not
necessarily indicate how it will perform in the future.
Performance for the Series has not been included because the Series had not been
in operation for a full fiscal year as of December 31, 1998.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The JNL/S&P Moderate Growth Series I asset
allocation is expected to result in less risk than that incurred by JNL/S&P
Aggressive Growth Series I, JNL/S&P Very Aggressive Growth Series I, JNL/S&P
Equity Growth Series I or JNL/S&P Equity Aggressive Growth Series I, but more
risk than JNL/S&P Conservative Growth Series I.
When the sub-adviser believes that a temporary defensive position is desirable,
the Series may invest up to 100% of its assets in cash or cash equivalents.
Doing so may reduce the potential for appreciation of the Series' portfolio.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the JNL/S&P
Moderate Growth Series I is Standard & Poor's Investment Advisory Services, Inc.
(SPIAS), located at 25 Broadway, New York, New York 10004. SPIAS was established
in 1995 to provide investment advice to the financial community. SPIAS operates
independently of and has no access to analysis or other information supplied or
obtained by Standard & Poor's Ratings Services in connection with its ratings
business, except to the extent such information is made available by Standard &
Poor's Ratings Services to the general public.
David M. Blitzer and Joshua M. Harari, CFA, share the primary responsibility for
the day-to-day management of the Series. Mr. Blitzer has been Vice President of
SPIAS since 1995 and has been an economist with Standard & Poor's Equity
Services Group (which operates independently of Standard & Poor's Ratings
Services) since 1982. Mr. Blitzer has had responsibility for the day-to-day
management of the Series since the inception of the Series. Mr. Harari has been
a senior investment officer with the Quantitative Services department of
Standard & Poor's Financial Information Services since 1998. Since joining
Standard & Poor's in 1986, Mr. Harari served as an equity analyst and supervisor
of industrial analysts with Standard & Poor's Equity Services Group. Mr. Harari
has had responsibility for the day-to-day management of the Series since May
1998.
<PAGE>
JNL/S&P Aggressive Growth Series I
Investment Objective. The investment objective of the JNL/S&P Aggressive Growth
Series I is capital growth.
Principal Investment Strategies. The Series seeks to achieve its objective by
investing in a diversified group of other Series of the Trust (Underlying
Series). The Underlying Series in which the JNL/S&P Aggressive Growth Series I
may invest are the JNL/Alger Growth Series, JNL/Eagle Core Equity Series,
JNL/Eagle SmallCap Equity Series, JNL/Janus Aggressive Growth Series, JNL/Janus
Capital Growth Series, JNL/Janus Global Equities Series, JNL/Putnam Growth
Series, JNL/Putnam Value Equity Series, PPM America/JNL Balanced Series, PPM
America/JNL High Yield Bond Series, PPM America/JNL Money Market Series, Salomon
Brothers/JNL Global Bond Series, Salomon Brothers/JNL U.S. Government & Quality
Bond Series, T. Rowe Price/JNL Established Growth Series, T. Rowe Price/JNL
International Equity Investment Series and T. Rowe Price/JNL Mid-Cap Growth
Series.
The Series seeks to achieve capital growth primarily through its investments in
Underlying Series that invest primarily in equity securities. These investments
may include Series that invest in stocks of large established companies as well
as those that invest in stocks of smaller companies with above-average growth
potential.
The Series seeks to achieve capital growth secondarily through its investment in
Underlying Series that invest primarily in fixed-income securities. These
investments may include Underlying Series that invest in foreign bonds
denominated in currencies other than U.S. dollars as well as Underlying Series
that invest exclusively in bonds of U.S. issuers. The Series may invest in
Underlying Series that invest exclusively in investment-grade securities, as
well as Underlying Series that invest in high-yield, high-risk bonds.
Under normal circumstances, the Series allocates approximately 85% to 95% of its
assets to Underlying Series that invest primarily in equity securities and 5% to
15% to Underlying Series that invest primarily in fixed-income securities.
Within these asset classes, the Series remains flexible with respect to the
percentage it will allocate among particular Underlying Series.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. Since the Series
concentrates its investments in shares of the Underlying Series, its performance
is directly related to the ability of the Underlying Series to meet their
respective investment objectives, as well as the sub-adviser's allocation among
the Underlying Series. Accordingly, a variety of factors may influence its
investment performance, such as:
o Market risk. Because the Series invests indirectly in stocks of
U.S. and foreign companies, it is subject to stock market risk.
Stock prices typically fluctuate more than the values of other
types of securities, typically in response to changes in the
particular company's financial condition and factors affecting
the market in general. For example, unfavorable or unanticipated
poor earnings performance of the company may result in a decline
in its stock's price, and a broad-based market drop may also
cause a stock's price to fall.
For bonds, market risk generally reflects credit risk and
interest rate risk. Credit risk is the actual or perceived risk
that the issuer of the bond will not pay the interest and
principal payments when due. Bond value typically declines if the
issuer's credit quality deteriorates. Interest rate risk is the
risk that interest rates will rise and the value of bonds,
including those held by an Underlying Series, will fall. A
broad-based market drop may also cause a bond's price to fall.
o Prepayment risk. During periods of falling interest rates, there
is the risk that a debt security with a high stated interest rate
will be prepaid before its expected maturity date.
o Foreign investing risk. Foreign investing involves risks not
typically associated with U.S. investment. These risks include,
among others, adverse fluctuations in foreign currency values as
well as adverse political, social and economic developments
affecting a foreign country. Investments in foreign countries
could be affected by factors not present in the U.S., such as
restrictions on receiving the investment proceeds from a foreign
country, foreign tax laws, and potential difficulties in
enforcing contractual obligations. Transactions in foreign
securities may be subject to less efficient settlement practices,
including extended clearance and settlement periods. Owning
foreign securities could cause an Underlying Series' performance
to fluctuate more than if it held only U.S. securities. To the
extent that an Underlying Series invests in bonds issued by a
foreign government, that Series may have limited recourse in the
event of default. Political conditions, especially a country's
willingness to meet the terms of its debt obligations, can create
special risks.
o Emerging markets risk. The Series may invest a portion of its
assets in one or more Underlying Series that hold securities of
issuers in emerging markets, which involves greater risk.
Emerging market countries typically have economic and political
systems that are less fully developed, and likely to be less
stable, than those of more advanced countries. Emerging market
countries may have policies that restrict investment by
foreigners, and there is a higher risk of a government taking
private property. Low or nonexistent trading volume in securities
of issuers in emerging markets may result in a lack of liquidity
and in price volatility. Issuers in emerging markets typically
are subject to a greater degree of change in earnings and
business prospects than are companies in developed markets.
o Currency risk. The value of an Underlying Series' shares may
change as a result of changes in exchange rates reducing the
value of the U.S. dollar value of the Series' foreign
investments. Currency exchange rates can be volatile and affected
by a number of factors, such as the general economics of a
country, the actions of U.S. and foreign governments or central
banks, the imposition of currency controls, and speculation.
o Non-diversification. The Series is "non-diversified" as such term
is defined in the Investment Company Act of 1940, as amended,
which means that more than 5%, but not more than 25%, of its
total assets may be invested in securities of any one issuer.
Thus, the Series may hold a smaller number of issuers than if it
were "diversified." With a smaller number of different issuers,
the Series is subject to more risk than another fund holding a
larger number of issuers, since changes in the financial
condition or market status of a single issuer may cause greater
fluctuation in the Series' total return and share price.
Because the Series invests exclusively in other series of the Trust, you should
look elsewhere in this prospectus for the particular information about those
series. As a shareholder of an Underlying Series, the Series will bear its pro
rata share of the expenses of that Underlying Series, which could result in
duplication of certain fees, including management and administration fees.
Performance. The performance of the Series will vary from year to year. The
Series' performance figures will not reflect the deduction of any charges that
are imposed under a variable annuity contract. Those charges, which are
described in the variable annuity prospectus, will reduce the Series'
performance. As with all mutual funds, the Series' past performance does not
necessarily indicate how it will perform in the future.
Performance for the Series has not been included because the Series had not been
in operation for a full fiscal year as of December 31, 1998.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The JNL/S&P Aggressive Growth Series I
asset allocation is expected to result in less risk than that incurred by
JNL/S&P Very Aggressive Growth Series I, JNL/S&P Equity Growth Series I or
JNL/S&P Equity Aggressive Growth Series I, but more risk than JNL/S&P
Conservative Growth Series I or JNL/S&P Moderate Growth Series I.
When the sub-adviser believes that a temporary defensive position is desirable,
the Series may invest up to 100% of its assets in cash or cash equivalents.
Taking a defensive position may reduce the potential for appreciation of the
Series' portfolio.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the JNL/S&P
Aggressive Growth Series I is Standard & Poor's Investment Advisory Services,
Inc. (SPIAS), located at 25 Broadway, New York, New York 10004. SPIAS was
established in 1995 to provide investment advice to the financial community.
SPIAS operates independently of and has no access to analysis or other
information supplied or obtained by Standard & Poor's Ratings Services in
connection with its ratings business, except to the extent such information is
made available by Standard & Poor's Ratings Services to the general public.
David M. Blitzer and Joshua M. Harari, CFA, share the primary responsibility for
the day-to-day management of the Series. Mr. Blitzer has been Vice President of
SPIAS since 1995 and has been an economist with Standard & Poor's Equity
Services Group (which operates independently of Standard & Poor's Ratings
Services) since 1982. Mr. Blitzer has had responsibility for the day-to-day
management of the Series since the inception of the Series. Mr. Harari has been
a senior investment officer with the Quantitative Services department of
Standard & Poor's Financial Information Services since 1998. Since joining
Standard & Poor's in 1986, Mr. Harari served as an equity analyst and supervisor
of industrial analysts with Standard & Poor's Equity Services Group. Mr. Harari
has had responsibility for the day-to-day management of the Series since May
1998.
<PAGE>
JNL/S&P Very Aggressive Growth Series I
Investment Objective. The investment objective of the JNL/S&P Very Aggressive
Growth Series I is capital growth.
Principal Investment Strategies. The Series seeks to achieve its objective by
investing in a diversified group of other Series of the Trust (Underlying
Series). The Underlying Series in which the JNL/S&P Very Aggressive Growth
Series I may invest are the JNL/Alger Growth Series, JNL/Eagle Core Equity
Series, JNL/Eagle SmallCap Equity Series, JNL/Janus Aggressive Growth Series,
JNL/Janus Capital Growth Series, JNL/Janus Global Equities Series, JNL/Putnam
Growth Series, JNL/Putnam Value Equity Series, PPM America/JNL Balanced Series,
PPM America/JNL High Yield Bond Series, PPM America/JNL Money Market Series,
Salomon Brothers/JNL Global Bond Series, Salomon Brothers/JNL U.S. Government &
Quality Bond Series, T. Rowe Price/JNL Established Growth Series, T. Rowe
Price/JNL International Equity Investment Series and T. Rowe Price/JNL Mid-Cap
Growth Series.
The Series seeks to achieve capital growth through its investments in Underlying
Series that invest primarily in equity securities. These investments may include
Series that invest in stocks of large established companies as well as those
that invest in stocks of smaller companies with above-average growth potential.
Under normal circumstances, the Series allocates up to 100% of its assets to
Underlying Series that invest primarily in equity securities. The Series remains
flexible with respect to the percentage it will allocate among those particular
Underlying Series that invest primarily in equity securities.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. Since the Series
concentrates its investments in shares of the Underlying Series, its performance
is directly related to the ability of the Underlying Series to meet their
respective investment objectives, as well as the sub-adviser's allocation among
the Underlying Series. Accordingly, a variety of factors may influence its
investment performance, such as:
o Market risk. Because the Series invests indirectly in stocks of
U.S. and foreign companies, it is subject to stock market risk.
Stock prices typically fluctuate more than the values of other
types of securities, typically in response to changes in the
particular company's financial condition and factors affecting
the market in general. For example, unfavorable or unanticipated
poor earnings performance of the company may result in a decline
in its stock's price, and a broad-based market drop may also
cause a stock's price to fall.
For bonds, market risk generally reflects credit risk and
interest rate risk. Credit risk is the actual or perceived risk
that the issuer of the bond will not pay the interest and
principal payments when due. Bond value typically declines if the
issuer's credit quality deteriorates. Interest rate risk is the
risk that interest rates will rise and the value of bonds,
including those held by an Underlying Series, will fall. A
broad-based market drop may also cause a bond's price to fall.
o Prepayment risk. During periods of falling interest rates, there
is the risk that a debt security with a high stated interest rate
will be prepaid before its expected maturity date.
o Foreign investing risk. Foreign investing involves risks not
typically associated with U.S. investment. These risks include,
among others, adverse fluctuations in foreign currency values as
well as adverse political, social and economic developments
affecting a foreign country. Investments in foreign countries
could be affected by factors not present in the U.S., such as
restrictions on receiving the investment proceeds from a foreign
country, foreign tax laws, and potential difficulties in
enforcing contractual obligations. Transactions in foreign
securities may be subject to less efficient settlement practices,
including extended clearance and settlement periods. Owning
foreign securities could cause an Underlying Series' performance
to fluctuate more than if it held only U.S. securities. To the
extent that an Underlying Series invests in bonds issued by a
foreign government, that Series may have limited legal recourse
in the event of default. Political conditions, especially a
country's willingness to meet the terms of its debt obligations,
can create special risks.
o Emerging markets risk. The Series may invest a portion of its
assets in one or more Underlying Series that hold securities of
issuers in emerging markets, which involves greater risk.
Emerging market countries typically have economic and political
systems that are less fully developed, and likely to be less
stable, than those of more advanced countries. Emerging market
countries may have policies that restrict investment by
foreigners, and there is a higher risk of a government taking
private property. Low or nonexistent trading volume in securities
of issuers in emerging markets may result in a lack of liquidity
and in price volatility. Issuers in emerging markets typically
are subject to a greater degree of change in earnings and
business prospects than are companies in developed markets.
o Currency risk. The value of an Underlying Series' shares may
change as a result of changes in exchange rates reducing the
value of the U.S. dollar value of the Series' foreign
investments. Currency exchange rates can be volatile and affected
by a number of factors, such as the general economics of a
country, the actions of U.S. and foreign governments or central
banks, the imposition of currency controls, and speculation.
o Non-diversification. The Series is "non-diversified" as such term
is defined in the Investment Company Act of 1940, as amended,
which means that more than 5%, but not more than 25%, of its
total assets may be invested in securities of any one issuer.
Thus, the Series may hold a smaller number of issuers than if it
were "diversified." With a smaller number of different issuers,
the Series is subject to more risk than another fund holding a
larger number of issuers, since changes in the financial
condition or market status of a single issuer may cause greater
fluctuation in the Series' total return and share price.
Because the Series invests exclusively in other series of the Trust, you should
look elsewhere in this prospectus for the particular information about those
series. As a shareholder of an Underlying Series, the Series will bear its pro
rata share of the expenses of that Underlying Series, which could result in
duplication of certain fees, including management and administration fees.
Performance. The performance of the Series will vary from year to year. The
Series' performance figures will not reflect the deduction of any charges that
are imposed under a variable annuity contract. Those charges, which are
described in the variable annuity prospectus, will reduce the Series'
performance. As with all mutual funds, the Series' past performance does not
necessarily indicate how it will perform in the future.
Performance for the Series has not been included because the Series had not been
in operation for a full fiscal year as of December 31, 1998.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The JNL/S&P Very Aggressive Growth Series I
asset allocation is expected to result in more risk than that incurred by
JNL/S&P Conservative Growth Series I, JNL/S&P Moderate Growth Series I, JNL/S&P
Aggressive Growth Series I, JNL/S&P Equity Growth Series I or JNL/S&P Equity
Aggressive Growth Series I.
When the sub-adviser believes that a temporary defensive position is desirable,
the Series may invest up to 100% of its assets in cash, cash equivalents or
Underlying Series that invest primarily in fixed-income securities. Taking a
defensive position may reduce the potential for appreciation of the Series'
portfolio.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the JNL/S&P Very
Aggressive Growth Series I is Standard & Poor's Investment Advisory Services,
Inc. (SPIAS), located at 25 Broadway, New York, New York 10004. SPIAS was
established in 1995 to provide investment advice to the financial community.
SPIAS operates independently of and has no access to analysis or other
information supplied or obtained by Standard & Poor's Ratings Services in
connection with its ratings business, except to the extent such information is
made available by Standard & Poor's Ratings Services to the general public.
David M. Blitzer and Joshua M. Harari, CFA, share the primary responsibility for
the day-to-day management of the Series. Mr. Blitzer has been Vice President of
SPIAS since 1995 and has been an economist with Standard & Poor's Equity
Services Group (which operates independently of Standard & Poor's Ratings
Services ) since 1982. Mr. Blitzer has had responsibility for the day-to-day
management of the Series since the inception of the Series. Mr. Harari has been
a senior investment officer with the Quantitative Services department of
Standard & Poor's Financial Information Services since 1998. Since joining
Standard & Poor's in 1986, Mr. Harari served as an equity analyst and supervisor
of industrial analysts with Standard & Poor's Equity Services Group. Mr. Harari
has had responsibility for the day-to-day management of the Series since May
1998.
<PAGE>
JNL/S&P Equity Growth Series I
Investment Objective. The investment objective of the JNL/S&P Equity Growth
Series I is capital growth.
Principal Investment Strategies. The Series seeks to achieve its objective by
investing in a diversified group of other Series of the Trust (Underlying
Series). The Underlying Series in which JNL/S&P Equity Growth Series I may
invest are the JNL/Alger Growth Series, JNL/Eagle Core Equity Series, JNL/Eagle
SmallCap Equity Series, JNL/Janus Aggressive Growth Series, JNL/Janus Capital
Growth Series, JNL/Janus Global Equities Series, JNL/Putnam Growth Series,
JNL/Putnam Value Equity Series, PPM America/JNL Balanced Series, PPM America/JNL
High Yield Bond Series, PPM America/JNL Money Market Series, Salomon
Brothers/JNL Global Bond Series, Salomon Brothers/JNL U.S. Government & Quality
Bond Series, T. Rowe Price/JNL Established Growth Series, T. Rowe Price/JNL
International Equity Investment Series and T. Rowe Price/JNL Mid-Cap Growth
Series.
The Series seeks to achieve capital growth through its investments in Underlying
Series that invest primarily in equity securities. These investments may include
Series that invest in stocks of large established companies as well as those
that invest in stocks of smaller companies with above-average growth potential.
Under normal circumstances, the Series allocates 100% of its assets to
Underlying Series that invest primarily in equity securities. The Series remains
flexible with respect to the percentage it will allocate among those particular
Underlying Series that invest primarily in equity securities.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. Since the Series
concentrates its investments in shares of the Underlying Series, its performance
is directly related to the ability of the Underlying Series to meet their
respective investment objectives, as well as the sub-adviser's allocation among
the Underlying Series. Accordingly, a variety of factors may influence its
investment performance, such as:
o Market risk. Because the Series invests indirectly in stocks of
U.S. and foreign companies, it is subject to stock market risk.
Stock prices typically fluctuate more than the values of other
types of securities, typically in response to changes in the
particular company's financial condition and factors affecting
the market in general. For example, unfavorable or unanticipated
poor earnings performance of the company may result in a decline
in its stock's price, and a broad-based market drop may also
cause a stock's price to fall.
For bonds, market risk generally reflects credit risk and
interest rate risk. Credit risk is the actual or perceived risk
that the issuer of the bond will not pay the interest and
principal payments when due. Bond value typically declines if the
issuer's credit quality deteriorates. Interest rate risk is the
risk that interest rates will rise and the value of bonds,
including those held by an Underlying Series, will fall. A
broad-based market drop may also cause a bond's price to fall.
o Prepayment risk. During periods of falling interest rates, there
is the risk that a debt security with a high stated interest rate
will be prepaid before its expected maturity date.
o Foreign investing risk. Foreign investing involves risks not
typically associated with U.S. investment. These risks include,
among others, adverse fluctuations in foreign currency values as
well as adverse political, social and economic developments
affecting a foreign country. Investments in foreign countries
could be affected by factors not present in the U.S., such as
restrictions on receiving the investment proceeds from a foreign
country, foreign tax laws, and potential difficulties in
enforcing contractual obligations. Transactions in foreign
securities may be subject to less efficient settlement practices,
including extended clearance and settlement periods. Owning
foreign securities could cause an Underlying Series' performance
to fluctuate more than if it held only U.S. securities. To the
extent that an Underlying Series invests in bonds issued by a
foreign government, that Series may have limited legal recourse
in the event of default. Political conditions, especially a
country's willingness to meet the terms of its debt obligations,
can create special risks.
o Emerging markets risk. The Series may invest a portion of its
assets in one or more Underlying Series that hold securities of
issuers in emerging markets, which involves greater risk.
Emerging market countries typically have economic and political
systems that are less fully developed, and likely to be less
stable, than those of more advanced countries. Emerging market
countries may have policies that restrict investment by
foreigners, and there is a higher risk of a government taking
private property. Low or nonexistent trading volume in securities
of issuers in emerging markets may result in a lack of liquidity
and in price volatility. Issuers in emerging markets typically
are subject to a greater degree of change in earnings and
business prospects than are companies in developed markets.
o Currency risk. The value of an Underlying Series' shares may
change as a result of changes in exchange rates reducing the
value of the U.S. dollar value of the Series' foreign
investments. Currency exchange rates can be volatile and affected
by a number of factors, such as the general economics of a
country, the actions of U.S. and foreign governments or central
banks, the imposition of currency controls, and speculation.
o Non-diversification. The Series is "non-diversified" as that term
is defined in the Investment Company Act of 1940, as amended,
which means that more than 5%, but not more than 25%, of its
total assets may be invested in securities of any one issuer.
Thus, the Series may hold a smaller number of issuers than if it
were "diversified." With a smaller number of different issuers,
the Series is subject to more risk than another fund holding a
larger number of issuers, since changes in the financial
condition or market status of a single issuer may cause greater
fluctuation in the Series' total return and share price.
Because the Series invests exclusively in other series of the Trust, you should
look elsewhere in this prospectus for the particular information about those
series. As a shareholder of an Underlying Series, the Series will bear its pro
rata share of the expenses of that Underlying Series, which could result in
duplication of certain fees, including management and administration fees.
Performance. The performance of the Series will vary from year to year. The
Series' performance figures will not reflect the deduction of any charges that
are imposed under a variable annuity contract. Those charges, which are
described in the variable annuity prospectus, will reduce the Series'
performance. As with all mutual funds, the Series' past performance does not
necessarily indicate how it will perform in the future.
Performance for the Series has not been included because the Series had not been
in operation for a full fiscal year as of December 31, 1998.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The JNL/S&P Equity Growth Series I asset
allocation is expected to result in more risk than that incurred by JNL/S&P
Conservative Growth Series I, JNL/S&P Moderate Growth Series I and JNL/S&P
Aggressive Growth Series I, but less risk than JNL/S&P Equity Aggressive Growth
Series I or JNL/S&P Very Aggressive Growth Series I.
When the sub-adviser believes that a temporary defensive position is desirable,
the Series may invest up to 100% of its assets in cash, cash equivalents or
Underlying Series that invest primarily in fixed-income securities. Taking a
defensive position may reduce the potential for appreciation of the Series'
portfolio.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the JNL/S&P Equity
Growth Series I is Standard & Poor's Investment Advisory Services, Inc. (SPIAS),
located at 25 Broadway, New York, New York 10004. SPIAS was established in 1995
to provide investment advice to the financial community. SPIAS operates
independently of and has no access to analysis or other information supplied or
obtained by Standard & Poor's Ratings Services in connection with its ratings
business, except to the extent such information is made available by Standard &
Poor's Ratings Services to the general public.
David M. Blitzer and Joshua M. Harari, CFA, share the primary responsibility for
the day-to-day management of the Series. Mr. Blitzer has been Vice President of
SPIAS since 1995 and has been an economist with Standard & Poor's Equity
Services Group (which operates independently of Standard & Poor's Ratings
Services) since 1982. Mr. Blitzer has had responsibility for the day-to-day
management of the Series since the inception of the Series. Mr. Harari has been
a senior investment officer with the Quantitative Services department of
Standard & Poor's Financial Information Services since 1998. Since joining
Standard & Poor's in 1986, Mr. Harari served as an equity analyst and supervisor
of industrial analysts with Standard & Poor's Equity Services Group. Mr. Harari
has had responsibility for the day-to-day management of the Series since May
1998.
<PAGE>
JNL/S&P Equity Aggressive Growth Series I
Investment Objective. The investment objective of the JNL/S&P Equity Aggressive
Growth Series I is capital growth.
Principal Investment Strategies. The Series seeks to achieve its objective by
investing in a diversified group of other Series of the Trust (Underlying
Series). The Underlying Series in which JNL/S&P Equity Aggressive Growth Series
I may invest are the JNL/Alger Growth Series, JNL/Eagle Core Equity Series,
JNL/Eagle SmallCap Equity Series, JNL/Janus Aggressive Growth Series, JNL/Janus
Capital Growth Series, JNL/Janus Global Equities Series, JNL/Putnam Growth
Series, JNL/Putnam Value Equity Series, PPM America/JNL Balanced Series, PPM
America/JNL High Yield Bond Series, PPM America/JNL Money Market Series, Salomon
Brothers/JNL Global Bond Series, Salomon Brothers/JNL U.S. Government & Quality
Bond Series, T. Rowe Price/JNL Established Growth Series, T. Rowe Price/JNL
International Equity Investment Series and T. Rowe Price/JNL Mid-Cap Growth
Series.
The Series seeks to achieve capital growth through its investments in Underlying
Series that invest primarily in equity securities. These investments may include
Series that invest in stocks of large established companies as well as those
that invest in stocks of smaller companies with above-average growth potential.
Under normal circumstances, the Series allocates 100% of its assets to
Underlying Series that invest primarily in equity securities. The Series remains
flexible with respect to the percentage it will allocate among those particular
Underlying Series that invest primarily in equity securities.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. Since the Series
concentrates its investments in shares of the Underlying Series, its performance
is directly related to the ability of the Underlying Series to meet their
respective investment objectives, as well as the sub-adviser's allocation among
the Underlying Series. Accordingly, a variety of factors may influence its
investment performance, such as:
o Market risk. Because the Series invests indirectly in stocks of
U.S. and foreign companies, it is subject to stock market risk.
Stock prices typically fluctuate more than the values of other
types of securities, typically in response to changes in the
particular company's financial condition and factors affecting
the market in general. For example, unfavorable or unanticipated
poor earnings performance of the company may result in a decline
in its stock's price, and a broad-based market drop may also
cause a stock's price to fall.
For bonds, market risk generally reflects credit risk and
interest rate risk. Credit risk is the actual or perceived risk
that the issuer of the bond will not pay the interest and
principal payments when due. Bond value typically declines if the
issuer's credit quality deteriorates. Interest rate risk is the
risk that interest rates will rise and the value of bonds,
including those held by an Underlying Series, will fall. A
broad-based market drop may also cause a bond's price to fall.
o Prepayment risk. During periods of falling interest rates, there
is the risk that a debt security with a high stated interest rate
will be prepaid before its expected maturity date.
o Foreign investing risk. Foreign investing involves risks not
typically associated with U.S. investment. These risks include,
among others, adverse fluctuations in foreign currency values as
well as adverse political, social and economic developments
affecting a foreign country. Investments in foreign countries
could be affected by factors not present in the U.S., such as
restrictions on receiving the investment proceeds from a foreign
country, foreign tax laws, and potential difficulties in
enforcing contractual obligations. Transactions in foreign
securities may be subject to less efficient settlement practices,
including extended clearance and settlement periods. Owning
foreign securities could cause an Underlying Series' performance
to fluctuate more than if it held only U.S. securities. To the
extent that an Underlying Series invests in bonds issued by a
foreign government, that Series may have limited legal recourse
in the event of default. Political conditions, especially a
country's willingness to meet the terms of its debt obligations,
can create special risks.
o Emerging markets risk. The Series may invest a portion of its
assets in one or more Underlying Series that hold securities of
issuers in emerging markets, which involves greater risk.
Emerging market countries typically have economic and political
systems that are less fully developed, and likely to be less
stable, than those of more advanced countries. Emerging market
countries may have policies that restrict investment by
foreigners, and there is a higher risk of a government taking
private property. Low or nonexistent trading volume in securities
of issuers in emerging market may result in a lack of liquidity
and in price volatility. Issuers in emerging market typically are
subject to a greater degree of change in earnings and business
prospects than are companies in developed markets.
o Currency risk. The value of an Underlying Series' shares may
change as a result of changes in exchange rates reducing the
value of the U.S. dollar value of the Series' foreign
investments. Currency exchange rates can be volatile and affected
by a number of factors, such as the general economics of a
country, the actions of U.S. and foreign governments or central
banks, the imposition of currency controls, and speculation.
o Non-diversification. The Series is "non-diversified" as such term
is defined in the Investment Company Act of 1940, as amended,
which means that more than 5%, but not more than 25%, of its
total assets may be invested in securities of any one issuer.
Thus, the Series may hold a smaller number of issuers than if it
were "diversified." With a smaller number of different issuers,
the Series is subject to more risk than another fund holding a
larger number of issuers, since changes in the financial
condition or market status of a single issuer may cause greater
fluctuation in the Series' total return and share price.
Because the Series invests exclusively in other series of the Trust, you should
look elsewhere in this prospectus for the particular information about those
series. As a shareholder of an Underlying Series, the Series will bear its pro
rata share of the expenses of that Underlying Series, which could result in
duplication of certain fees, including management and administration fees.
Performance. The performance of the Series will vary from year to year. The
Series' performance figures will not reflect the deduction of any charges that
are imposed under a variable annuity contract. Those charges, which are
described in the variable annuity prospectus, will reduce the Series'
performance. As with all mutual funds, the Series' past performance does not
necessarily indicate how it will perform in the future.
Performance for the Series has not been included because the Series had not been
in operation for a full fiscal year as of December 31, 1998.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The JNL/S&P Equity Aggressive Growth Series
I asset allocation is expected to result in more risk than that incurred by
JNL/S&P Conservative Growth Series I, JNL/S&P Moderate Growth Series I, JNL/S&P
Aggressive Growth Series I or JNL/S&P Equity Growth Series I, but less risk than
JNL/S&P Very Aggressive Growth Series I.
When the sub-adviser believes that a temporary defensive position is desirable,
the Series may invest up to 100% of its assets in cash, cash equivalents or
Underlying Series that invest primarily in fixed-income securities. Taking a
defensive position may reduce the potential for appreciation of the Series'
portfolio.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the JNL/S&P Equity
Aggressive Growth Series I is Standard & Poor's Investment Advisory Services,
Inc. (SPIAS), located at 25 Broadway, New York, New York 10004. SPIAS was
established in 1995 to provide investment advice to the financial community.
SPIAS operates independently of and has no access to analysis or other
information supplied or obtained by Standard & Poor's Ratings Services in
connection with its ratings business, except to the extent such information is
made available by Standard & Poor's Ratings Services to the general public.
David M. Blitzer and Joshua M. Harari, CFA, share the primary responsibility for
the day-to-day management of the Series. Mr. Blitzer has been Vice President of
SPIAS since 1995 and has been an economist with Standard & Poor's Equity
Services Group (which operates independently of Standard & Poor's Ratings
Services) since 1982. Mr. Blitzer has had responsibility for the day-to-day
management of the Series since the inception of the Series. Mr. Harari has been
a senior investment officer with the Quantitative Services department of
Standard & Poor's Financial Information Services since 1998. Since joining
Standard & Poor's in 1986, Mr. Harari served as an equity analyst and supervisor
of industrial analysts with Standard & Poor's Equity Services Group. Mr. Harari
has had responsibility for the day-to-day management of the Series since May
1998.
<PAGE>
PPM America/JNL Balanced Series
Investment Objective. The investment objective of the PPM America/JNL Balanced
Series is reasonable income, long-term capital growth and preservation of
capital.
Principal Investment Strategies. The Series seeks to achieve its objectives by
investing primarily in a diversified portfolio of common stock and fixed-income
securities of U.S. companies. The Series may invest in any type or class of
security. The anticipated mix of the Series' holdings is approximately 45-75% of
its assets in equities and 25-55% in fixed-income securities.
The Series emphasizes investment-grade, fixed-income securities. However, the
Series may take a modest position in lower- or non-rated fixed-income
securities, and if, in the sub-adviser's opinion, market conditions warrant, may
increase its position in lower- or non-rated securities from time to time.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests in equity securities of
U.S. companies, it is subject to stock market risk. Stock prices
typically fluctuate more than the values of other types of
securities, typically in response to changes in the particular
company's financial condition and factors affecting the market in
general. For example, unfavorable or unanticipated poor earnings
performance of the company may result in a decline in its stock's
price, and a broad-based market drop may also cause a stock's
price to fall.
For bonds, market risk generally reflects credit risk and
interest rate risk. Credit risk is the actual or perceived risk
that the issuer of the bond will not pay the interest and
principal payments when due. Bond value typically declines if the
issuer's credit quality deteriorates. Interest rate risk is the
risk that interest rates will rise and the value of bonds,
including those held by the Series, will fall. A broad-based
market drop may also cause a bond's price to fall.
o High-yield/high-risk bonds. Lower-rated bonds involve a higher
degree of credit risk, which is the risk that the issuer will not
make interest or principal payments when due. In the event of an
unanticipated default, the Series would experience a reduction in
its income, a decline in the market value of the securities so
affected and a decline in the value of its shares. During an
economic downturn or substantial period of rising interest rates,
highly leveraged issuers may experience financial stress which
could adversely affect their ability to service principal and
interest payment obligations, to meet projected business goals
and to obtain additional financing. The market prices of
lower-rated securities are generally less sensitive to interest
rate changes than higher-rated investments, but more sensitive to
adverse economic or political changes, or individual developments
specific to the issuer. Periods of economic or political
uncertainty and change can be expected to result in volatility of
prices of these securities.
o Prepayment risk. During periods of falling interest rates, there
is the risk that a debt security with a high stated interest rate
will be prepaid before its expected maturity date.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns since these shares were
first offered and shows how performance has varied from year to year. The table
shows the Series' average annual returns and compares them to the market
indicators listed. Both the chart and the table assume reinvestment of dividends
and distributions. The Series' returns shown in the chart and table below do not
reflect the deduction of any charges that are imposed under a variable annuity
contract. Those charges, which are described in the variable annuity prospectus,
will reduce the Series' performance. As with all mutual funds, the Series' past
performance does not necessarily indicate how it will perform in the future.
Year-By-Year Returns as of December 31
- --------------------------------------
10.81% 18.43% 10.06%
[Insert Chart]
1996 1997 1998
In the periods shown in the chart, the Series' highest quarterly return was
9.77% (2nd quarter of 1997) and its lowest quarterly return was -5.54% (3rd
quarter of 1998).
Average Annual Total Returns as of December 31, 1998
----------------------------------------------------
1 year Life of Series*
PPM America/JNL Balanced Series 10.06% 15.10%
S&P 500 Index 28.58% 28.63%
Lehman Brothers Bond Index 8.68% 7.93%
Each of the S&P 500 Index and the Lehman Brothers Bond Index is a broad-based,
unmanaged index.
* The Series began operations on May 15, 1995. Prior to May 1, 1997, the Series
was managed by Phoenix Investment Counsel, Inc.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The PPM America/JNL Balanced Series invests
primarily in common stocks and fixed-income securities but may also invest in
securities convertible into common stocks, deferred debt obligations and zero
coupon bonds.
The Series may use derivative instruments, such as options and financial futures
contracts, for hedging purposes. These instruments are subject to transaction
costs and certain risks, such as unanticipated changes in interest rates and
securities prices.
For temporary, defensive purposes, the Series may invest up to all of its assets
in cash equivalents, such as U.S. Government securities and high grade
commercial paper. Taking a defensive position may reduce the potential for
appreciation of the Series' portfolio.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the PPM America/JNL
Balanced Series is PPM America, Inc. (PPM), which is located at 225 West Wacker
Drive, Chicago, Illinois 60606. PPM, an affiliate of the investment adviser to
the Trust, manages assets of Jackson National Life Insurance Company and of
other affiliated companies.
PPM supervises and manages the investment portfolio of the Series and directs
the purchase and sale of the Series' investment securities. PPM utilizes teams
of investment professionals acting together to manage the assets of the Series.
The teams meet regularly to review portfolio holdings and to discuss purchase
and sale activity. The teams adjust holdings in the portfolios as they deem
appropriate in the pursuit of the Series' investment objectives. PPM has
supervised and managed the investment portfolio of the Series since May 1, 1997.
<PAGE>
PPM America/JNL High Yield Bond Series
Investment Objective. The primary investment objective of the PPM America/JNL
High Yield Bond Series is to provide 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.
Principal Investment Strategies. The Series attempts to achieve its objective by
investing substantially in a diversified portfolio of long-term (over 10 years
to maturity) and intermediate-term (3 to 10 years to maturity) fixed-income
securities of U.S. and foreign issuers, with emphasis on higher-yielding,
higher-risk, lower-rated or unrated corporate bonds. These bonds, commonly known
as "junk bonds," are those rated Ba or below by Moody's or BB or below by S&P
or, if unrated, considered by the sub-adviser to be of comparable quality.
In pursuing its secondary investment objective of capital appreciation, the
Series may purchase high-yield bonds that the sub-adviser expects will increase
in value due to improvements in their credit quality or ratings or anticipated
declines in interest rates. In addition, the Series may invest for this purpose
up to 25% of its assets in equity securities, such as common stocks or
securities convertible into or exchangeable for common stock.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o High-yield/high-risk bonds. Lower-rated bonds involve a higher
degree of credit risk, which is the risk that the issuer will not
make interest or principal payments when due. In the event of an
unanticipated default, the Series would experience a reduction in
its income, a decline in the market value of the securities so
affected and a decline in the value of its shares. During an
economic downturn or substantial period of rising interest rates,
highly leveraged issuers may experience financial stress which
could adversely affect their ability to service principal and
interest payment obligations, to meet projected business goals
and to obtain additional financing. The market prices of
lower-rated securities are generally less sensitive to interest
rate changes than higher-rated investments, but more sensitive to
adverse economic or political changes, or individual developments
specific to the issuer. Periods of economic or political
uncertainty and change can be expected to result in volatility of
prices of these securities.
o Market risk. Because the Series invests in the securities of U.S.
and foreign issuers, it is subject to market risk. For bonds,
market risk generally reflects credit risk and interest rate
risk. Credit risk is the actual or perceived risk that the issuer
of the bond will not pay the interest and principal payments when
due. Bond value typically declines if the issuer's credit quality
deteriorates. Interest rate risk is the risk that interest rates
will rise and the value of bonds, including those held by the
Series, will fall. A broad-based market drop may also cause a
bond's price to fall.
To the extent the Series invests in the equity securities of U.S.
and foreign companies, it is subject to stock market risk. Stock
prices typically fluctuate more than the values of other types of
securities, typically in response to changes in the particular
company's financial condition and factors affecting the market in
general. For example, unfavorable or unanticipated poor earnings
performance of the company may result in a decline in its stock's
price, and a broad-based market drop may also cause a stock's
price to fall.
o Prepayment risk. During periods of falling interest rates, there
is the risk that a debt security with a high stated interest rate
will be prepaid before its expected maturity date.
o Foreign investing risk. Foreign investing involves risks not
typically associated with U.S. investment. These risks include,
among others, adverse fluctuations in foreign currency values as
well as adverse political, social and economic developments
affecting a foreign country. Investments in foreign countries
could be affected by factors not present in the U.S., such as
restrictions on receiving the investment proceeds from a foreign
country, foreign tax laws, and potential difficulties in
enforcing contractual obligations. Transactions in foreign
securities may be subject to less efficient settlement practices,
including extended clearance and settlement periods. Owning
foreign securities could cause the Series' performance to
fluctuate more than if it held only U.S. securities. To the
extent that the Series invests in bonds issued by a foreign
government, the Series may have limited legal recourse in the
event of default. Political conditions, especially a country's
willingness to meet the terms of its debt obligations, can create
special risks.
o Currency risk. The value of the Series' shares may change as a
result of changes in exchange rates reducing the value of the
U.S. dollar value of the Series' foreign investments. Currency
exchange rates can be volatile and affected by a number of
factors, such as the general economics of a country, the actions
of U.S. and foreign governments or central banks, the imposition
of currency controls, and speculation.
Treating high current income as its primary investment objective means that the
Series may forego opportunities that would result in capital gains and may
accept prudent risks to capital value, in each case to take advantage of
opportunities for higher current income. In addition, the performance of the
Series depends on the adviser's ability to effectively implement the investment
strategies of the Series.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns since these shares were
first offered and shows how performance has varied from year to year. The table
shows the Series' average annual returns and compares them to the market
indicators listed. Both the chart and the table assume reinvestment of dividends
and distributions. The Series' returns shown in the chart and table below do not
reflect the deduction of any charges that are imposed under a variable annuity
contract. Those charges, which are described in the variable annuity prospectus,
will reduce the Series' performance. As with all mutual funds, the Series' past
performance does not necessarily indicate how it will perform in the future.
Year-By-Year Returns as of December 31
- --------------------------------------
12.90% 15.05% 3.84%
[Insert Chart]
1996 1997 1998
In the periods shown in the chart, the Series' highest quarterly return was
5.71% (3rd quarter of 1997) and its lowest quarterly return was -4.56% (3rd
quarter of 1998).
Average Annual Total Returns as of December 31, 1998
----------------------------------------------------
1 year Life of Series*
PPM America/JNL High Yield Bond Series 3.84% 10.40%
Lehman Brothers High Yield Index 1.88% 9.52%
The Lehman Brothers High Yield Index is a broad-based, unmanaged index.
* The Series began operations on May 15, 1995.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The PPM America/JNL High Yield Bond Series
invests the majority of its assets under normal market conditions in U.S.
corporate bonds of below investment-grade quality and with maturities exceeding
three years. However, the Series will not invest more than 10% of its total
assets in bonds rated C by Moody's or D by S&P (or unrated but considered by the
sub-adviser to be of comparable quality). Lower-rated securities generally
involve a higher risk of default than higher-rated ones.
In addition to investing in securities of foreign issuers, the Series may also
hold a portion of its assets in foreign currencies and enter into forward
currency exchange contracts, currency options, currency and financial futures
contracts, and options on such futures contracts. The Series may enter into
repurchase agreements and firm commitment agreements and may purchase securities
on a when-issued basis. The Series may invest without limit in zero coupon
bonds.
The Series may adopt a temporary defensive position, such as investing up to all
of its assets in cash or cash equivalents, during adverse market, economic or
other circumstances that the sub-adviser believes require immediate action to
avoid losses. In doing so, the Series may not be pursuing its investment
objectives.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the PPM America/JNL
High Yield Bond Series is PPM America, Inc. (PPM), which is located at 225 West
Wacker Drive, Chicago, Illinois 60606. PPM, an affiliate of the investment
adviser to the Trust, manages assets of Jackson National Life Insurance Company
and of other affiliated companies.
PPM supervises and manages the investment portfolio of the Series and directs
the purchase and sale of the Series' investment securities. PPM utilizes teams
of investment professionals acting together to manage the assets of the Series.
The teams meet regularly to review portfolio holdings and to discuss purchase
and sale activity. The teams adjust holdings in the portfolios as they deem
appropriate in the pursuit of the Series' investment objectives. PPM has
supervised and managed the investment portfolio of the Series since inception of
the Series.
<PAGE>
PPM America/JNL Money Market Series
Investment Objective. The investment objective of the PPM America/JNL Money
Market Series is to achieve as high a level of current income as is consistent
with the preservation of capital and maintenance of liquidity by investing in
high quality, short-term money market instruments.
Principal Investment Strategies. The Series invests in high quality, U.S.
dollar-denominated money market instruments that mature in 397 days or less. The
sub-adviser manages the Series to meet the requirements of Rule 2a-7 under the
Investment Company Act of 1940, as amended, including those as to quality,
diversification and maturity. The Series may invest more than 25% of its assets
in the U.S. banking industry.
Principal Risks of Investing in the Series. An investment in the Series is not
insured or guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Although the Series seeks to preserve the value of your
investment at $1.00 per share, you could lose money by investing in the Series.
A variety of factors may influence its investment performance, such as:
o Market risk. Fixed income securities in general are subject to
credit risk and market risk. Credit risk is the actual or
perceived risk that the issuer of the bond will not pay the
interest and principal payments when due. Bond value typically
declines if the issuer's credit quality deteriorates. Market
risk, also known as interest rate risk, is the risk that interest
rates will rise and the value of bonds, including those held by
the Series, will fall. A broad-based market drop may also cause a
bond's price to fall.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns since these shares were
first offered and shows how performance has varied from year to year. The table
shows the Series' average annual returns and compares them to the market
indicators listed. Both the chart and the table assume reinvestment of dividends
and distributions. The Series' returns shown in the chart and table below do not
reflect the deduction of any charges that are imposed under a variable annuity
contract. Those charges, which are described in the variable annuity prospectus,
will reduce the Series' performance. As with all mutual funds, the Series' past
performance does not necessarily indicate how it will perform in the future.
Year-By-Year Returns as of December 31
- --------------------------------------
4.87% 5.01% 4.99%
[Insert Chart]
1996 1997 1998
In the periods shown in the chart, the Series' highest quarterly return was
1.30% (3rd quarter of 1995) and its lowest quarterly return was 1.17% (1st
quarter of 1997).
Average Annual Total Returns as of December 31, 1998
----------------------------------------------------
1 year Life of Series*
PPM America/JNL Money Market Series 4.99% 5.00%
Merrill Lynch Treasury Bill
Index (3 month) 5.23% 5.405%
The 7-day yield of the Series on December 31, 1998, was 4.78%.
The Merrill Lynch Treasury Bill Index is a broad-based unmanaged index.
* The Series began operations on May 15, 1995.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The PPM America/JNL Money Market Series
invests exclusively in the following types of high quality, U.S.
dollar-denominated money market instruments that mature in 397 days or less:
o Obligations issued or guaranteed as to principal and interest by
the U.S. Government, its agencies and instrumentalities;
o Obligations, such as time deposits, certificates of deposit and
bankers acceptances, issued by U.S. banks and savings banks that
are members of the Federal Deposit Insurance Corporation,
including their foreign branches and foreign subsidiaries, and
issued by domestic and foreign branches of foreign banks;
o Corporate obligations, including commercial paper, of domestic
and foreign issuers;
o Obligations issued or guaranteed by one or more foreign
governments or any of their political subdivisions, agencies or
instrumentalities, including obligations of supranational
entities; and
o Repurchase agreements on obligations issued or guaranteed by the
U.S. Government, its agencies or instrumentalities.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the PPM America/JNL
Money Market Series is PPM America, Inc. (PPM), which is located at 225 West
Wacker Drive, Chicago, Illinois 60606. PPM, an affiliate of the investment
adviser to the Trust, manages assets of Jackson National Life Insurance Company
and of other affiliated companies.
PPM supervises and manages the investment portfolio of the Series and directs
the purchase and sale of the Series' investment securities. PPM utilizes teams
of investment professionals acting together to manage the assets of the Series.
The teams meet regularly to review portfolio holdings and to discuss purchase
and sale activity. The teams adjust holdings in the portfolios as they deem
appropriate in the pursuit of the Series' investment objectives. PPM has
supervised and managed the investment portfolio of the Series since inception of
the Series.
<PAGE>
Salomon Brothers/JNL Global Bond Series
Investment Objective. The primary investment objective of the Salomon
Brothers/JNL Global Bond Series is to seek a high level of current income. As a
secondary objective, the Series seeks capital appreciation.
Principal Investment Strategies. The Series seeks to achieve its objective
through a diversified portfolio consisting primarily of fixed income securities
of U.S. and foreign issuers. The sub-adviser invests the Series' assets
primarily by making strategic allocations among: U.S. investment grade bonds;
high-yield bonds; non-U.S. investment grade bonds; and emerging markets debt
securities. The sub-adviser makes these allocations based on its analysis of
current economic and market conditions, and the relative risks and
opportunities, applicable to those types of securities. The sub-adviser may
invest a significant portion of the Series' assets in medium- or lower-quality
securities.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests in fixed-income
securities of U.S. and foreign issuers, it is subject to market
risk. For bonds, market risk generally reflects credit risk and
interest rate risk. Credit risk is the actual or perceived risk
that the issuer of the bond will not pay the interest and
principal payments when due. Bond value typically declines if the
issuer's credit quality deteriorates. Interest rate risk is the
risk that interest rates will rise and the value of bonds,
including those held by the Series, will fall. A broad-based
market drop may also cause a bond's price to fall.
o Prepayment risk. During periods of falling interest rates, there
is the risk that a debt security with a high stated interest rate
will be prepaid before its expected maturity date.
o Foreign investing risk. Foreign investing involves risks not
typically associated with U.S. investment. These risks include,
among others, adverse fluctuations in foreign currency values as
well as adverse political, social and economic developments
affecting a foreign country. Investments in foreign countries
could be affected by factors not present in the U.S., such as
restrictions on receiving the investment proceeds from a foreign
country, foreign tax laws, and potential difficulties in
enforcing contractual obligations. Transactions in foreign
securities may be subject to less efficient settlement practices,
including extended clearance and settlement periods. Owning
foreign securities could cause the Series' performance to
fluctuate more than if it held only U.S. securities. To the
extent that the Series invests in bonds issued by a foreign
government, the Series may have limited legal recourse in the
event of default. Political conditions, especially a country's
willingness to meet the terms of its debt obligations, can create
special risks.
o High-yield/high-risk bonds. Lower rated bonds involve a higher
degree of credit risk, which is the risk that the issuer will not
make interest or principal payments when due. In the event of an
unanticipated default, the Series would experience a reduction in
its income, a decline in the market value of the securities so
affected and a decline in the value of its shares. During an
economic downturn or substantial period of rising interest rates,
highly leveraged issuers may experience financial stress which
could adversely affect their ability to service principal and
interest payment obligations, to meet projected business goals
and to obtain additional financing. The market prices of
lower-rated securities are generally less sensitive to interest
rate changes than higher-rated investments, but more sensitive to
adverse economic or political changes, or individual developments
specific to the issuer. Periods of economic or political
uncertainty and change can be expected to result in volatility of
prices of these securities.
o Currency risk. The value of the Series' shares may change as a
result of changes in exchange rates reducing the value of the
U.S. dollar value of the Series' foreign investments. Currency
exchange rates can be volatile and affected by a number of
factors, such as the general economics of a country, the actions
of U.S. and foreign governments or central banks, the imposition
of currency controls, and speculation.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns since these shares were
first offered and shows how performance has varied from year to year. The table
shows the Series' average annual returns and compares them to the market
indicators listed. Both the chart and the table assume reinvestment of dividends
and distributions. The Series' returns shown in the chart and table below do not
reflect the deduction of any charges that are imposed under a variable annuity
contract. Those charges, which are described in the variable annuity prospectus,
will reduce the Series' performance. As with all mutual funds, the Series' past
performance does not necessarily indicate how it will perform in the future.
Year-By-Year Returns as of December 31
- --------------------------------------
14.39% 10.66% 2.46%
[Insert Chart]
1996 1997 1998
In the periods shown in the chart, the Series' highest quarterly return was
4.86% (2nd quarter of 1997) and its lowest quarterly return was -2.72% (3rd
quarter of 1998).
Average Annual Total Returns As of December 31, 1998
----------------------------------------------------
1 year Life of Series*
Salomon Brothers/JNL Global Bond
Series 2.46% 9.47%
Salomon Smith Barney Broad Investment
Grade Index 8.72% 8.56%
The Salomon Smith Barney Broad Investment Grade Index is a broad-based,
unmanaged index.
* The Series began operations on May 15, 1995.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The Salomon Brothers/JNL Global Bond Series
invests in a globally diverse portfolio of fixed-income investments. The
sub-adviser has broad discretion to invest the Series' assets among certain
segments of the fixed-income market, primarily U.S. investment-grade bonds,
high-yield corporate debt securities, emerging market debt securities and
investment-grade foreign debt securities. These segments include U.S. Government
securities and mortgage- and other asset-backed securities (including
interest-only or principal-only securities), as well as debt obligations issued
or guaranteed by a foreign government or supranational organization.
In determining the assets to invest in each type of security, the sub-adviser
relies in part on quantitative analytical techniques that measure relative risks
and opportunities of each type of security based on current and historical
economic, market, political and technical data for each type of security, as
well as on its own assessment of economic and market conditions both on a global
and local (country) basis. The sub-adviser continuously reviews the allocation
of assets for the Series and makes such adjustments as it deems appropriate.
The sub-adviser has discretion to select the range of maturities of the various
fixed income securities in which the Series invests. The sub-adviser anticipates
that, under current market conditions, the Series' portfolio securities will
have a weighted average life of 6 to 10 years. However, the weighted average
life of the portfolio securities may vary substantially from time to time
depending on economic and market conditions.
The sub-adviser may invest in medium or lower-rated securities. Investments of
this type involve significantly greater risks, including price volatility and
risk of default in the payment of interest and principal, than higher-quality
securities.
When the sub-adviser believes that adverse conditions prevail in the market for
fixed-income securities, the Series may, for temporary defensive purposes,
invest its assets without limit in high-quality, short-term money market
instruments. Doing so may reduce the potential for high current income or
appreciation of the Series' portfolio.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the Salomon
Brothers/JNL Global Bond Series is Salomon Brothers Asset Management Inc (SBAM).
SBAM was incorporated in 1987, and, together with affiliates in London,
Frankfurt, Tokyo and Hong Kong, SBAM provides a broad range of fixed-income and
equity investment advisory services to various individual and institutional
clients located throughout the world and serves as sub-adviser to various
investment companies. SBAM's business offices are located at 7 World Trade
Center, New York, New York 10048.
In connection with SBAM's service as sub-adviser to the Series, SBAM Limited,
whose business address is Victoria Plaza, 111 Buckingham Palace Road, London
SW1W OSB, England, provides certain sub-advisory services to SBAM relating to
currency transactions and investments in non-dollar denominated debt securities
for the benefit of the Series. SBAM Limited is compensated by SBAM at no
additional expense to the Trust.
Peter J. Wilby is primarily responsible for the day-to-day management of the
high-yield and emerging market debt securities portions of the Series. Mr. Wilby
has had primary responsibility for the day-to-day management of the high-yield
and emerging market debt securities portions of the Series since the inception
of the Series. Beth Semmel assists Mr. Wilby in the day-to-day management of the
Series. Mr. Wilby, who joined SBAM in 1989, is a Managing Director of Salomon
Brothers Inc. and SBAM and Senior Portfolio Manager of SBAM, is responsible for
investment company and institutional portfolios which invest in high-yield
non-U.S. and U.S. corporate debt securities and high-yield foreign sovereign
debt securities. From 1984 to 1989, Mr. Wilby was employed by Prudential Capital
Management Group (Prudential) where he served as Director of Prudential's credit
research unit and as a corporate and sovereign credit analyst with Prudential.
Mr. Wilby also managed high-yield bonds and leveraged equities in the mutual
funds and institutional portfolios at Prudential. Ms. Semmel is a Director and
Portfolio Manager of SBAM and a Director of Salomon Brothers Inc. Ms. Semmel
joined SBAM in May of 1993, where she manages high-yield portfolios. Prior to
joining SBAM, Ms. Semmel spent four years as a high-yield bond analyst at Morgan
Stanley Asset Management. Ms. Semmel has assisted in the day-to-day management
of the Series since inception of the Series.
David J. Scott, a Managing Director and Senior Portfolio Manager of SBAM, is
primarily responsible for currency transactions and investments in non-dollar
denominated debt securities for the Series. Prior to joining SBAM Limited in
April 1994, Mr. Scott worked for four years at J.P. Morgan Investment Management
Inc. (J.P. Morgan) where he was responsible for global and non-dollar portfolios
for clients including departments of various governments, pension funds and
insurance companies. Before joining J.P. Morgan, Mr. Scott worked for three
years at Mercury Asset Management where he was responsible for captive insurance
portfolios and products. Mr. Scott has had responsibility for currency
transactions and investment in non-dollar denominated debt securities for the
Series since inception of the Series.
Roger Lavan is primarily responsible for the mortgage-backed securities and U.S.
Government securities portions of the Series. Mr. Lavan joined SBAM in 1990 and
is a Director and Portfolio Manager responsible for investment grade portfolios.
Prior to joining SBAM, Mr. Lavan spent four years analyzing portfolios for
Salomon Brothers Inc.'s Fixed Income Sales Group and Product Support Divisions.
Mr. Lavan has had responsibility for mortgage-backed securities and U.S.
Government securities for the Series since the inception of the Series.
<PAGE>
Salomon Brothers/JNL U.S. Government & Quality Bond Series
Investment Objective. The investment objective of the Salomon Brothers/JNL U.S.
Government & Quality Bond Series is to obtain a high level of current income.
Principal Investment Strategies. The Series seeks to achieve its objective by
investing primarily in a diversified portfolio of 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. The Series may invest in securities of any maturity or
effective duration, so the composition and weighted average maturity of the
portfolio will vary.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests in fixed-income
securities of U.S. and foreign issuers, it is subject to market
risk. For bonds, market risk generally reflects credit risk and
interest rate risk. Credit risk is the actual or perceived risk
that the issuer of the bond will not pay the interest and
principal payments when due. Bond value typically declines if the
issuer's credit quality deteriorates. Interest rate risk is the
risk that interest rates will rise and the value of bonds,
including those held by the Series, will fall. A broad-based
market drop may also cause a bond's price to fall.
o Prepayment risk. During periods of falling interest rates, there
is the risk that a debt security with a high stated interest rate
will be prepaid before its expected maturity date.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns since these shares were
first offered and shows how performance has varied from year to year. The table
shows the Series' average annual returns and compares them to the market
indicators listed. Both the chart and the table assume reinvestment of dividends
and distributions. The Series' returns shown in the chart and table below do not
reflect the deduction of any charges that are imposed under a variable annuity
contract. Those charges, which are described in the variable annuity prospectus,
will reduce the Series' performance. As with all mutual funds, the Series' past
performance does not necessarily indicate how it will perform in the future.
Year-By-Year Returns as of December 31
- --------------------------------------
2.58% 9.16% 9.40%
[Insert Chart]
1996 1997 1998
In the periods shown in the chart, the Series' highest quarterly return was
5.86% (3rd quarter of 1998) and its lowest quarterly return was -2.13% (1st
quarter of 1996).
Average Annual Total Returns as of December 31, 1998
----------------------------------------------------
1 year Life of Series*
Salomon Brothers/JNL U.S.
Government & Quality Bond Series 9.40% 7.71%
Salomon Brothers Treasury Index 10.00% 8.55%
The Salomon Brothers Treasury Index is a broad-based, unmanaged index.
* The Series began operations on May 15, 1995.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The Salomon Brothers/JNL U.S. Government &
Quality Bond Series invests at least 65% of its assets in:
(i) U.S. Treasury obligations;
(ii) obligations issued or guaranteed by agencies or instrumentalities
of the U.S. Government which are backed by their own credit and
may not be backed by the full faith and credit of the U.S.
Government;
(iii)mortgage-backed securities guaranteed by the Government National
Mortgage Association that are supported by the full faith and
credit of the U.S. Government. Such securities entitle the holder
to receive all interest and principal payments due whether or not
payments are actually made on the underlying mortgages;
(iv) mortgage-backed securities guaranteed by agencies or
instrumentalities of the U.S. Government which are supported by
their own credit but not the full faith and credit of the U.S.
Government, such as the Federal Home Loan Mortgage Corporation
and Fannie Mae (formerly, the Federal National Mortgage
Association);
(v) collateralized mortgage obligations issued by private issuers for
which the underlying mortgage-backed securities serving as
collateral are backed by (i) the credit alone of the U.S.
Government agency or instrumentality which issues or guarantees
the mortgage-backed securities, or (ii) the full faith and credit
of the U.S. Government; and
(vi) repurchase agreements collateralized by any of the foregoing.
Any guarantee of the securities in which the Series invests runs only to the
principal and interest payments on the securities and not to the market value of
such securities or to the principal and interest payments on the underlying
mortgages. A security issued or guaranteed by a U.S. Government agency may
significantly fluctuate in value, and the Series may not receive the originally
anticipated yield on the security. Shares of the Series are not insured or
guaranteed by the U.S. Government, its agencies or instrumentalities.
The sub-adviser seeks to add value by actively managing the portfolio's interest
rate exposure, yield curve positioning, sector allocation and security
selection. In selecting mortgage-backed securities for the Series, the
sub-adviser determines a security's average maturity and duration according to
mathematical models that reflect certain payment assumptions and estimates of
future economic factors. These estimates may vary from actual results, and the
average maturity and duration of mortgage-backed derivative securities may not
reflect the price volatility of those securities in certain market conditions.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the Salomon
Brothers/JNL U.S. Government & Quality Bond Series is Salomon Brothers Asset
Management Inc (SBAM). SBAM was incorporated in 1987, and, together with
affiliates in London, Frankfurt, Tokyo and Hong Kong, SBAM provides a broad
range of fixed-income and equity investment advisory services to various
individual and institutional clients located throughout the world and serves as
sub-adviser to various investment companies. SBAM's business offices are located
at 7 World Trade Center, New York, New York 10048.
Roger Lavan is primarily responsible for the day-to-day management of the
Series. Mr. Lavan joined SBAM in 1990 and is a Director and Portfolio Manager
responsible for investment grade portfolios. Prior to joining SBAM, Mr. Lavan
spent four years analyzing portfolios for Salomon Brothers Inc.'s Fixed Income
Sales Group and Product Support Divisions. Mr. Lavan has had primary
responsibility for the day-to-day management of the Series since June 1, 1998.
<PAGE>
T. Rowe Price/JNL Established Growth Series
Investment Objective. The investment objective of the T. Rowe Price/JNL
Established Growth Series is long-term growth of capital and increasing dividend
income.
Principal Investment Strategies. The Series seeks to achieve its objective by
investing primarily in a diversified portfolio of common stocks of
well-established growth companies. A growth company is one which (i) has
demonstrated historical growth of earnings faster than the growth of inflation
and the economy in general, and (ii) has indications of being able to continue
this growth pattern in the future.
While the Series will invest principally in U.S. companies, a substantial
portion of the Series' assets will be invested in foreign stocks.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests primarily in equity
securities, it is subject to stock market risk. Stock prices
typically fluctuate more than the values of other types of
securities, typically in response to changes in the particular
company's financial condition and factors affecting the market in
general. For example, unfavorable or unanticipated poor earnings
performance of the company may result in a decline in its stock's
price, and a broad-based market drop may also cause a stock's
price to fall.
o Foreign investing risk. Foreign investing involves risks not
typically associated with U.S. investment. These risks include,
among others, adverse fluctuations in foreign currency values as
well as adverse political, social and economic developments
affecting a foreign country. Investments in foreign countries
could be affected by factors not present in the U.S., such as
restrictions on receiving the investment proceeds from a foreign
country, foreign tax laws, and potential difficulties in
enforcing contractual obligations. Transactions in foreign
securities may be subject to less efficient settlement practices,
including extended clearance and settlement periods. Owning
foreign securities could cause the Series' performance to
fluctuate more than if it held only U.S. securities.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns since these shares were
first offered and shows how performance has varied from year to year. The table
shows the Series' average annual returns and compares them to the market
indicators listed. Both the chart and the table assume reinvestment of dividends
and distributions. The Series' returns shown in the chart and table below do not
reflect the deduction of any charges that are imposed under a variable annuity
contract. Those charges, which are described in the variable annuity prospectus,
will reduce the Series' performance. As with all mutual funds, the Series' past
performance does not necessarily indicate how it will perform in the future.
Year-By-Year Returns as of December 31
- --------------------------------------
22.59% 29.47% 27.78%
[Insert Chart]
1996 1997 1998
In the periods shown in the chart, the Series' highest quarterly return was
23.36% (4th quarter of 1998) and its lowest quarterly return was -11.63% (3rd
quarter of 1998).
Average Annual Total Returns as of December 31, 1998
----------------------------------------------------
1 year Life of Series*
T. Rowe Price/JNL Established
Growth Series 27.78% 28.14%
S&P 500 Index 28.58% 28.63%
The S&P 500 Index is a broad-based, unmanaged index.
* The Series began operations on May 15, 1995.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The T. Rowe Price/JNL Established Growth
Series invests most of its assets in common stocks of U.S. companies. However,
the Series may invest in other securities, including convertible securities,
warrants, preferred stocks and corporate and government debt obligations.
The Series may use derivative instruments, such as options and futures
contracts, for hedging purposes and to maintain market exposure. These
instruments are subject to transaction costs and certain risks, such as
unanticipated changes in securities prices.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the T. Rowe
Price/JNL Established Growth Series is T. Rowe Price Associates, Inc. (T. Rowe),
located at 100 East Pratt Street, Baltimore, Maryland 21202. T. Rowe was founded
in 1937. T. Rowe and its affiliates provide investment advisory services to
individual and institutional investor accounts.
Robert W. Smith is responsible for the day-to-day management of the Series. Mr.
Smith is a Managing Director and Equity Portfolio Manager for T. Rowe. Mr. Smith
is a Vice President of Price-Fleming and is also responsible for the North
American component of other investment company and institutional client
portfolios. Prior to joining T. Rowe in 1992, Mr. Smith was employed as an
Investment Analyst for Massachusetts Financial Services. He earned a BS (finance
and economics) from the University of Delaware and an MBA (finance) from the
Darden Graduate School of Business Administration, University of Virginia. Mr.
Smith has had responsibility for the day-to-day management of the Series since
February 21, 1997.
<PAGE>
T. Rowe Price/JNL International Equity Investment Series
Investment Objective. The investment objective of the T. Rowe Price/JNL
International Equity Investment Series is long-term growth of capital.
Principal Investment Strategies. The Series seeks to achieve its objective
through a diversified portfolio consisting primarily of common stocks of
established, non-U.S. companies. The Series normally has at least three
countries represented in its portfolio, including both developed and emerging
markets.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests in stocks, it is subject
to stock market risk. Stock prices typically fluctuate more than
the values of other types of securities, typically in response to
changes in the particular company's financial condition and
factors affecting the market in general. For example, unfavorable
or unanticipated poor earnings performance of the company may
result in a decline in its stock's price, and a broad-based
market drop may also cause a stock's price to fall.
o Foreign investing risk. Foreign investing involves risks not
typically associated with U.S. investment. These risks include,
among others, adverse fluctuations in foreign currency values as
well as adverse political, social and economic developments
affecting a foreign country. Investments in foreign countries
could be affected by factors not present in the U.S., such as
restrictions on receiving the investment proceeds from a foreign
country, foreign tax laws, and potential difficulties in
enforcing contractual obligations. Transactions in foreign
securities may be subject to less efficient settlement practices,
including extended clearance and settlement periods. Owning
foreign securities could cause the Series' performance to
fluctuate more than if it held only U.S. securities.
o Emerging markets risk. The Series may invest a portion of its
assets in securities of issuers in emerging markets, which
involves greater risk. Emerging market countries typically have
economic and political systems that are less developed, and
likely to be less stable, than those of more advanced countries.
Emerging market countries may have policies that restrict
investment by foreigners, and there is a higher risk of a
government taking private property. Low or nonexistent trading
volume in securities of issuers in emerging markets may result in
a lack of liquidity and in price volatility. Issuers in emerging
markets typically are subject to a greater degree of change in
earnings and business prospects than are companies in developed
markets.
o Currency risk. The value of the Series' shares may change as a
result of changes in exchange rates reducing the value of the
U.S. dollar value of the Series' foreign investments. Currency
exchange rates can be volatile and affected by a number of
factors, such as the general economics of a country, the actions
of U.S. and foreign governments or central banks, the imposition
of currency controls, and speculation.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns since these shares were
first offered and shows how performance has varied from year to year. The table
shows the Series' average annual returns and compares them to the market
indicators listed. Both the chart and the table assume reinvestment of dividends
and distributions. The Series' returns shown in the chart and table below do not
reflect the deduction of any charges that are imposed under a variable annuity
contract. Those charges, which are described in the variable annuity prospectus,
will reduce the Series' performance. As with all mutual funds, the Series' past
performance does not necessarily indicate how it will perform in the future.
Year-By-Year Returns as of December 31
- --------------------------------------
13.91% 2.65% 14.43%
[Insert Chart]
1996 1997 1998
In the periods shown in the chart, the Series' highest quarterly return was
16.55% (4th quarter of 1998) and its lowest quarterly return was -13.48% (3rd
quarter of 1998).
Average Annual Total Returns as of December 31, 1998
----------------------------------------------------
1 year Life of Series*
T. Rowe Price/JNL International
Equity Investment Series 14.43% 10.43%
Morgan Stanley Europe and
Australasia, Far East Equity Index 20.33% 8.13%
The Morgan Stanley Europe and Australasia, Far East Equity Index is a
broad-based, unmanaged index.
* The Series began operations on May 15, 1995.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The T. Rowe Price/JNL International Equity
Investment Series invests in foreign securities that the sub-adviser believes
offer significant potential for long-term appreciation and investment
diversification. In addition to common stocks, the Series may also invest in
other types of securities, such as preferred stocks, convertible securities,
fixed-income securities.
In analyzing companies for investment, the sub-adviser ordinarily looks for one
or more of the following characteristics: an above-average earnings growth per
share; high return on invested capital; healthy balance sheet with relatively
low debt; sound financial and accounting policies and overall financial
strength; strong competitive advantages; effective research and product
development and marketing; efficient service; pricing flexibility; strength of
management; and general operating characteristics which will enable the
companies to compete successfully in their market place. Current dividend income
is not a prerequisite in the selection of portfolio companies. However, the
Series generally invests in companies that have a record of paying dividends,
which the sub-adviser expects will increase in future years as earnings
increase.
The Series may use derivative instruments, such as futures contracts, options
and forward currency contracts, for hedging and risk management. These
instruments are subject to transaction costs and certain risks, such as
unanticipated changes in securities prices and global currency markets.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the T. Rowe
Price/JNL International Equity Investment Series is Rowe Price-Fleming
International, Inc. (Price-Fleming), located at 100 East Pratt Street,
Baltimore, Maryland 21202. Price-Fleming is one of America's largest
international mutual fund asset managers.
There is an investment advisory group that has day-to-day responsibility for
managing the Series and developing and executing the Series' investment program.
The Series' advisory group is composed of the following members: Martin G. Wade,
Vice Chairman and Chief Executive Officer of Price-Fleming, John R. Ford, Chief
Investment Officer of Price-Fleming, James B.M. Seddon, Vice President of
Price-Fleming, Mark C.J. Bickford-Smith, Vice President of Price-Fleming, and
David J.L. Warren, President of Price-Fleming. The Series' advisory group has
had day-to-day responsibility for managing the Series since the inception of the
Series.
Martin Wade joined Price-Fleming in 1979 and has 30 years of experience with the
Fleming Group in research, client service, and investment management. (Fleming
Group includes Robert Fleming and/or Jardine Fleming Group Limited). John Ford
joined Price-Fleming in 1982 and has 19 years of experience with the Fleming
Group in research and portfolio management. James Seddon joined Price-Fleming in
1987 and has 12 years of experience in investment management. Mark
Bickford-Smith joined Price-Fleming in 1995 and has 14 years experience with the
Fleming Group in research and financial analysis. David Warren joined
Price-Fleming in 1983 and has 18 years of experience in equity research,
fixed-income research and portfolio management.
<PAGE>
T. Rowe Price/JNL Mid-Cap Growth Series
Investment Objective. The investment objective of the T. Rowe Price/JNL Mid-Cap
Growth Series is long-term growth of capital.
Principal Investment Strategies. The Series seeks to achieve its objective by
investing primarily in a diversified portfolio of common stock of medium-sized
(mid-cap) U.S. companies which the sub-adviser believes have the potential for
above-average earnings growth. A mid-cap company is one whose market
capitalization, at the time of acquisition by the Series, falls within the
capitalization range of companies in the S&P MidCap 400 Index.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests in equity securities, it
is subject to stock market risk. Stock prices typically fluctuate
more than the values of other types of securities, typically in
response to changes in the particular company's financial
condition and factors affecting the market in general. For
example, unfavorable or unanticipated poor earnings performance
of the company may result in a decline in its stock's price, and
a broad-based market drop may also cause a stock's price to fall.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns since these shares were
first offered and shows how performance has varied from year to year. The table
shows the Series' average annual returns and compares them to the market
indicators listed. Both the chart and the table assume reinvestment of dividends
and distributions. The Series' returns shown in the chart and table below do not
reflect the deduction of any charges that are imposed under a variable annuity
contract. Those charges, which are described in the variable annuity prospectus,
will reduce the Series' performance. As with all mutual funds, the Series' past
performance does not necessarily indicate how it will perform in the future.
Year-By-Year Returns as of December 31
- --------------------------------------
23.47% 18.21% 21.49%
[Insert Chart]
1996 1997 1998
In the periods shown in the chart, the Series' highest quarterly return was
27.05% (4th quarter of 1998) and its lowest quarterly return was -18.02% (3rd
quarter of 1998).
Average Annual Total Returns as of December 31, 1998
----------------------------------------------------
1 year Life of Series*
T. Rowe Price/JNL Mid-Cap Growth
Series 21.49% 25.62%
S&P MidCap 400 Index 19.09% 23.32%
The S&P MidCap 400 Index is a broad-based, unmanaged index.
* The Series began operations on May 15, 1995.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The T. Rowe Price/JNL Mid-Cap Growth Series
seeks to achieve its objective of long-term growth of capital by investing
primarily in common stocks of U.S. companies with medium-sized market
capitalizations and the potential for above-average growth. The sub-adviser
relies on its proprietary research to identify mid-cap companies with attractive
growth prospects. The Series seeks to invest primarily in companies that: (i)
offer proven products or services; (ii) have a historical record of earnings
growth that is above average, (iii) demonstrate the potential to sustain
earnings growth; (iv) operate in industries experiencing increasing demand;
and/or (v) the sub-adviser believes are undervalued in the marketplace.
The Series will not automatically sell or cease to purchase stock of a company
it already owns just because the company's market cap grows or falls outside the
range of companies in the S&P MidCap 400 Index.
The Series may also invest in securities other than U.S. common stocks,
including foreign securities, convertible securities, and warrants. The Series
may use derivative instruments, such as options and futures contracts, for
hedging purposes and to maintain market exposure. These instruments are subject
to transaction costs and certain risks, such as unanticipated changes in
securities prices.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the T. Rowe
Price/JNL Mid-Cap Growth Series is T. Rowe Price Associates, Inc. (T. Rowe),
located at 100 East Pratt Street, Baltimore, Maryland 21202. T. Rowe was founded
in 1937. T. Rowe and its affiliates provide investment advisory services to
individual and institutional investor accounts.
The Series has an Investment Advisory Committee composed of the following
members: Brian W. Berghuis, Chairman, James A.C. Kennedy, and John F. Wakeman.
The Committee Chairman has day to day responsibility for managing the Series and
works with the Committee in developing and executing the Series' investment
program. Mr. Berghuis, a Managing Director of T. Rowe, has been managing
investments since joining T. Rowe in 1985. The Investment Advisory Committee has
had day-to-day responsibility for managing the Series since the inception of the
Series.
<PAGE>
More About The Investment Objectives and Risks of All Series
The investment objectives of the respective Series are not fundamental and may
be changed by the Trustees without shareholder approval.
Year 2000 and Euro Issues: Apart from the particular risks described above for
each Series, the Trust could be adversely affected if the computer systems used
by the Trust's investment adviser and its other service providers are unable to
process and calculate date-related information because they are not programmed
to distinguish between the year 2000 and the year 1900.
The Trust relies entirely on outside service providers for the processing of its
business. To the extent that a service provider utilizes computers to process
the Trust's business, the smooth operation of the Trust depends on the ability
of those computers to continue to function properly.
The Trust has contacted each of its service providers to ascertain the service
provider's state of readiness for the year 2000. Each of the service providers
has indicated to the Trust that, at this time, it is either year 2000 compliant
or that it has identified its systems which are not currently year 2000
compliant and that it intends to make such systems compliant before December 31,
1999.
The Trust intends to continue to monitor the year 2000 status of its service
providers.
Based on the information currently available, the Trust does not anticipate any
material impact on the delivery of services to and by the Trust. However, since
the Trust must rely on the information provided to it by its service providers,
there can be no assurance that the steps taken by the service providers in
preparation for the year 2000 will be sufficient to avoid any adverse impact on
the Trust.
Similarly, the companies and other issuers in which a Series invests could be
adversely affected by year 2000 computer-related problems, and there can be no
assurance that the steps taken, if any, by these issuers will be sufficient to
avoid any adverse impact on the Series.
Also, to the extent that a Series invests in foreign securities, the Series
could be adversely affected by the conversion of certain European currencies
into the Euro. This conversion, which is underway, is scheduled to be completed
in 2002. However, problems with the conversion process and delays could increase
volatility in world capital markets and affect European capital markets in
particular.
<PAGE>
MANAGEMENT OF THE TRUST
Investment Adviser
Under Massachusetts law and the Trust's Declaration of Trust and By-Laws, the
management of the business and affairs of the Trust is the responsibility of the
Trustees.
Jackson National Financial Services, LLC (JNFS), 5901 Executive Drive, Lansing,
Michigan 48911, is the investment adviser to the Trust and provides the Trust
with professional investment supervision and management. Jackson National
Financial Services, Inc. served as investment adviser to the Trust from the
inception of the Trust until July 1, 1998, when it transferred its duties as
investment adviser and its professional staff for investment advisory services
to JNFS.
Management Fee
As compensation for its services, JNFS receives a fee from the Trust computed
separately for each Series, accrued daily and payable monthly. The fee which
JNFS received from each Series for the fiscal year ended December 31, 1998, is
set forth below as an annual percentage of the net assets of the Series. For a
Series which was not in operation for all of 1998, its current management fee
schedule is shown instead. Each JNL/S&P Series will indirectly bear its pro rata
share of fees of the Underlying Series in addition to the fees shown for that
Series.
<TABLE>
<CAPTION>
SERIES SCHEDULE (where applicable) FEES
------ --------------------------- ----
<S> <C> <C>
JNL/Alger Growth Series................................... ................................... .975%
JNL/Eagle Core Equity Series.............................. ................................... .90%
JNL/Eagle SmallCap Equity Series.......................... ................................... .95%
JNL/Janus Aggressive Growth Series........................ ................................... .95%
JNL/Janus Capital Growth Series........................... ................................... .95%
JNL/Janus Global Equities Series.......................... ................................... .99%
JNL/Putnam Growth Series.................................. ................................... .90%
JNL/Putnam Value Equity Series............................ ................................... .90%
JNL/S&P Conservative Growth Series I...................... $0 to $500 million................. .20%
Over $500 million.................. .15%
JNL/S&P Moderate Growth Series I.......................... $0 to $500 million................. .20%
Over $500 million.................. .15%
JNL/S&P Aggressive Growth Series I........................ $0 to $500 million................. .20%
Over $500 million.................. .15%
JNL/S&P Very Aggressive Growth Series I................... $0 to $500 million................. .20%
Over $500 million.................. .15%
JNL/S&P Equity Growth Series I............................ $0 to $500 million................. .20%
Over $500 million.................. .15%
JNL/S&P Equity Aggressive Growth Series I................. $0 to $500 million................. .20%
Over $500 million.................. .15%
PPM America/JNL Balanced Series........................... ................................... .73%
PPM America/JNL High Yield Bond Series.................... ................................... .73%
PPM America/JNL Money Market Series....................... ................................... .60%
Salomon Brothers/JNL Global Bond Series................... ................................... .85%
Salomon Brothers/JNL U.S. Government & Quality Bond Series ................................... .70%
T. Rowe Price/JNL Established Growth Series............... ................................... .84%
T. Rowe Price/JNL International Equity Investment Series.. ................................... 1.08%
T. Rowe Price/JNL Mid-Cap Growth Series................... ................................... .95%
</TABLE>
Sub-Advisory Arrangements
JNFS selects, contracts with and compensates sub-advisers to manage the
investment and reinvestment of the assets of the Series of the Trust. JNFS
monitors the compliance of such sub-advisers with the investment objectives and
related policies of each Series and reviews the performance of such sub-advisers
and reports periodically on such performance to the Trustees of the Trust.
Under the terms of each of the Sub-Advisory Agreements with JNFS, the
sub-adviser manages the investment and reinvestment of the assets of the
assigned Series, subject to the supervision of the Trustees of the Trust. The
sub-adviser formulates a continuous investment program for each such Series
consistent with its investment objectives and policies outlined in this
Prospectus. Each sub-adviser implements such programs by purchases and sales of
securities and regularly reports to JNFS and the Trustees of the Trust with
respect to the implementation of such programs.
As compensation for its services, each sub-adviser receives a fee from JNFS
computed separately for the applicable Series, stated as an annual percentage of
the net assets of such Series. The SAI contains a schedule of the management
fees JNFS currently is obligated to pay the sub-advisers out of the advisory fee
it receives from the Series.
ADMINISTRATIVE FEE
In addition to the investment advisory fee, effective January 1, 1999, each
Series, except the JNL/S&P Series, pays to JNFS an Administrative Fee of .10% of
the average daily net assets of the Series. The JNL/S&P Series do not pay an
Administrative Fee. In return for the fee, JNFS provides or procures all
necessary administrative functions and services for the operation of the Series.
In addition, JNFS, at its own expense, arranges for legal, audit, fund
accounting, custody, printing and mailing, and all other services necessary for
the operation of each Series. Each Series is responsible for trading expenses
including brokerage commissions, interest and taxes, and other non-operating
expenses. Prior to January 1, 1999, each Series paid all of its own operating
expenses.
INVESTMENT IN TRUST SHARES
Shares of the Trust are currently sold to separate accounts (Accounts) of
Jackson National Life Insurance Company, 5901 Executive Drive, Lansing, Michigan
48911, and Jackson National Life Insurance Company of New York, 2900 Westchester
Avenue, Purchase, New York 10577, to fund the benefits under certain variable
annuity contracts (Contracts). An insurance company purchases the shares of the
Series at their net asset value using premiums received on Contracts issued by
the insurance company. There is no sales charge.
Shares of the Series are not available to the general public directly. Some of
the Series are managed by sub-advisers who manage publicly traded mutual funds
having similar names and investment objectives. While some of the Series may be
similar to, and may in fact be modeled after publicly traded mutual funds,
Contract purchasers should understand that the Series are not otherwise directly
related to any publicly traded mutual fund. Consequently, the investment
performance of publicly traded mutual funds and any corresponding Series may
differ substantially.
The net asset value per share of each Series is determined at the close of
regular trading on the New York Stock Exchange (normally 4:00 p.m., Eastern
time) each day that the New York Stock Exchange is open. The net asset value per
share is calculated by adding the value of all securities and other assets of a
Series, deducting its liabilities, and dividing by the number of shares
outstanding. Generally, the value of exchange-listed or -traded securities is
based on their respective market prices, bonds are valued based on prices
provided by an independent pricing service and short-term debt securities are
valued at amortized cost, which approximates market value. A Series may invest
in securities primarily listed on foreign exchanges and that trade on days when
the Series does not price its shares. As a result, a Series' net asset value may
change on days when shareholders are not able to purchase or redeem the Series'
shares.
All investments in the Trust are credited to the shareholder's account in the
form of full and fractional shares of the designated Series (rounded to the
nearest 1/1000 of a share). The Trust does not issue share certificates.
SHARE REDEMPTION
An Account redeems shares to make benefit or withdrawal payments under the terms
of its Contracts. Redemptions are processed on any day on which the Trust is
open for business and are effected at net asset value next determined after the
redemption order, in proper form, is received by the Trust's transfer agent.
The Trust may suspend the right of redemption only under the following unusual
circumstances:
o when the New York Stock Exchange is closed (other than weekends
and holidays) or trading is restricted;
o when an emergency exists, making disposal of portfolio securities
or the valuation of net assets not reasonably practicable; or
o during any period when the SEC has by order permitted a
suspension of redemption for the protection of shareholders.
TAX STATUS
Each Series' policy is to meet the requirements of Subchapter M of the Internal
Revenue Code (Code) necessary to qualify as a regulated investment company. Each
Series intends to distribute all its net investment income and net capital gains
to shareholders and, therefore, will not be required to pay any federal income
taxes.
Each Series is treated as a separate corporation for purposes of the Code.
Therefore, the assets, income, and distributions of each Series are considered
separately for purposes of determining whether or not the Series qualifies as a
regulated investment company.
Because the shareholders of each Series are Accounts, there are no tax
consequences to shareholders of buying, holding, exchanging and selling shares
of the Series. Distributions from the Series are not taxable to those
shareholders. However, owners of Contracts should consult the applicable Account
prospectus for more detailed information on tax issues related to the Contracts.
<PAGE>
FINANCIAL HIGHLIGHTS
The following table provides selected per share data for one share of each
Series. The information does not reflect any charges imposed by an Account
investing in shares of the Series. You should refer to the appropriate Account
prospectus for additional information regarding such charges.
The information for each of the periods shown below has been audited by
PricewaterhouseCoopers LLP, independent accountants, and should be read in
conjunction with the financial statements and notes thereto, together with the
report of PricewaterhouseCoopers LLP thereon, in the Annual Report included in
the Statement of Additional Information.
<PAGE>
JNL SERIES TRUST
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Income from Operations Distributions
-------------------------------- -----------------------------------------
Net realized &
unrealized gains
Net Asset Net on investments From net
value, investment & foreign From net realized gains
beginning income currency investment on investment Return of
Period or Year Ended of period (loss) related items income transactions Capital
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
JNL Aggressive Growth Series
Year ended 12/31/98 $14.53 $(0.06) $8.45 $(0.05) $(0.78) $ -
Year ended 12/31/97 13.38 0.04 1.65 - (0.54) -
Period from 4/1/96 to 12/31/96 13.13 0.05 1.10 (0.05) (0.71) (0.14)
Period from 5/15/95* to 3/31/96 10.00 0.01 3.53 - (0.41) -
- ------------------------------------------------------------------------------------------------------------------------------------
JNL Capital Growth Series
Year ended 12/31/98 16.50 (0.12) 5.92 - (1.57) -
Year ended 12/31/97 14.46 (0.06) 2.23 (0.02) (0.04) (0.07)
Period from 4/1/96 to 12/31/96 13.86 0.06 0.70 - (0.16) -
Period from 5/15/95* to 3/31/96 10.00 - 4.70 - (0.84) -
- ------------------------------------------------------------------------------------------------------------------------------------
JNL Global Equities Series
Year ended 12/31/98 17.48 0.04 4.66 (0.07) - -
Year ended 12/31/97 15.20 0.07 2.84 - (0.63) -
Period from 4/1/96 to 12/31/96 13.75 0.03 2.72 (0.08) (0.90) (0.32)
Period from 5/15/95* to 3/31/96 10.00 0.10 4.02 - (0.37) -
- ------------------------------------------------------------------------------------------------------------------------------------
JNL/Alger Growth Series
Year ended 12/31/98 13.56 - 6.20 - (0.81) -
Year ended 12/31/97 11.16 (0.01) 2.93 - (0.52) -
Period from 4/1/96 to 12/31/96 10.38 - 0.78 - - -
Period from 10/16/95* to 3/31/96 10.00 - 0.38 - - -
- ------------------------------------------------------------------------------------------------------------------------------------
JNL/Eagle Core Equity Series
Year ended 12/31/98 13.75 0.10 2.17 (0.09) (0.02) -
Year ended 12/31/97 10.62 0.08 3.35 (0.08) (0.22) -
Period from 9/16/96* to 12/31/96 10.00 0.03 0.62 (0.03) - -
- ------------------------------------------------------------------------------------------------------------------------------------
JNL/Eagle SmallCap Equity Series
Year ended 12/31/98 14.73 (0.06) 0.23 - (0.08) -
Year ended 12/31/97 11.54 (0.07) 3.26 - - -
Period from 9/16/96* to 12/31/96 10.00 (0.01) 1.55 - - -
====================================================================================================================================
</TABLE>
* Commencement of operations.
(a) Assumes investment at net asset value at the beginning of the period,
reinvestment of all distributions, and a complete redemption of the
investment at the net asset value at the end of the period. Total return is
not annualized.
(b) Annualized for the periods ended December 31, 1998, 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>
<TABLE>
<CAPTION>
Ratios and Supplemental Data
----------------------------------------------------------
Ratio of Ratio of
Net asset Net assets, expenses to income to
value, end Total Return end of period average net average net Portfolio
Period or Year Ended of period (a) (in thousands) assets (b)(c) assets (b)(c) turnover
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
JNL Aggressive Growth Series
Year ended 12/31/98 $22.09 57.66% $161,842 1.10% (0.35)% 114.51%
Year ended 12/31/97 14.53 12.67% 78,870 1.10% 0.39% 137.26%
Period from 4/1/96 to 12/31/96 13.38 8.72% 29,555 1.09% 0.77% 85.22%
Period from 5/15/95* to 3/31/96 13.13 35.78% 8,527 1.09% 0.27% 163.84%
- ------------------------------------------------------------------------------------------------------------------------------------
JNL Capital Growth Series
Year ended 12/31/98 20.73 35.16% 111,037 1.09% (0.68)% 128.95%
Year ended 12/31/97 16.50 15.01% 73,749 1.10% (0.30)% 131.43%
Period from 4/1/96 to 12/31/96 14.46 5.45% 36,946 1.09% 0.91% 115.88%
Period from 5/15/95* to 3/31/96 13.86 47.94% 9,578 1.09% (0.49)% 128.56%
- ------------------------------------------------------------------------------------------------------------------------------------
JNL Global Equities Series
Year ended 12/31/98 21.11 26.87% 240,385 1.14% 0.13% 81.46%
Year ended 12/31/97 17.48 19.12% 151,050 1.15% 0.33% 97.21%
Period from 4/1/96 to 12/31/96 15.20 19.99% 48,638 1.14% 0.37% 52.02%
Period from 5/15/95* to 3/31/96 13.75 41.51% 16,141 1.15% 0.39% 142.36%
- ------------------------------------------------------------------------------------------------------------------------------------
JNL/Alger Growth Series
Year ended 12/31/98 18.95 45.66% 164,948 1.06% (0.02)% 121.39%
Year ended 12/31/97 13.56 26.20% 85,877 1.10% (0.07)% 125.44%
Period from 4/1/96 to 12/31/96 11.16 7.51% 38,252 1.07% (0.02)% 59.92%
Period from 10/16/95* to 3/31/96 10.38 3.80% 8,649 1.03% (0.17)% 50.85%
- ------------------------------------------------------------------------------------------------------------------------------------
JNL/Eagle Core Equity Series
Year ended 12/31/98 15.91 16.54% 37,169 1.05% 1.07% 67.04%
Year ended 12/31/97 13.75 32.35% 11,896 1.05% 1.00% 51.48%
Period from 9/16/96* to 12/31/96 10.62 6.47% 1,954 1.05% 1.10% 1.36%
- ------------------------------------------------------------------------------------------------------------------------------------
JNL/Eagle SmallCap Equity Series
Year ended 12/31/98 14.82 1.18% 34,953 1.10% (0.42)% 51.90%
Year ended 12/31/97 14.73 27.64% 13,493 1.10% (0.54)% 60.78%
Period from 9/16/96* to 12/31/96 11.54 15.40% 1,944 1.10% (0.26)% 28.01%
====================================================================================================================================
</TABLE>
Ratio information assuming
no expense reimbursement
or fees paid indirectly
------------------------------
expenses to income to
average net average net
Period or Year Ended assets (b) assets (b)
================================================================================
JNL Aggressive Growth Series
Year ended 12/31/98 1.10% (0.35)%
Year ended 12/31/97 1.17% 0.32%
Period from 4/1/96 to 12/31/96 1.40% 0.46%
Period from 5/15/95* to 3/31/96 2.77% (1.41)%
- --------------------------------------------------------------------------------
JNL Capital Growth Series
Year ended 12/31/98 1.09% (0.68)%
Year ended 12/31/97 1.11% (0.31)%
Period from 4/1/96 to 12/31/96 1.27% 0.73%
Period from 5/15/95* to 3/31/96 2.08% (1.48)%
- --------------------------------------------------------------------------------
JNL Global Equities Series
Year ended 12/31/98 1.30% (0.03)%
Year ended 12/31/97 1.37% 0.11%
Period from 4/1/96 to 12/31/96 1.63% (0.12)%
Period from 5/15/95* to 3/31/96 2.25% (0.71)%
- --------------------------------------------------------------------------------
JNL/Alger Growth Series
Year ended 12/31/98 1.06% (0.02)%
Year ended 12/31/97 1.10% (0.07)%
Period from 4/1/96 to 12/31/96 1.19% (0.14)%
Period from 10/16/95* to 3/31/96 1.89% (1.03)%
- --------------------------------------------------------------------------------
JNL/Eagle Core Equity Series
Year ended 12/31/98 1.17% 0.95%
Year ended 12/31/97 1.54% 0.51%
Period from 9/16/96* to 12/31/96 4.57% (2.42)%
- --------------------------------------------------------------------------------
JNL/Eagle SmallCap Equity Series
Year ended 12/31/98 1.17% (0.49)%
Year ended 12/31/97 1.51% (0.95)%
Period from 9/16/96* to 12/31/96 4.77% (3.93)%
================================================================================
See notes to the financial statements.
<PAGE>
JNL SERIES TRUST
FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
Income from operations Distributions
----------------------------- -------------------------------------------
Net realized &
unrealized gains
Net Asset Net on investments From net
value, investment & foreign From net realized gains
beginning income currency investment on investment Return of
Period or Year ended of period (loss) related items income transactions Capital
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
JNL/Putnam Growth Series
Year ended 12/31/98 $16.99 $(0.01) $5.94 $(0.01) $(0.$3) -
Year ended 12/31/97 14.21 0.04 3.07 (0.02) (0.31) -
Period from 4/1/96 to 12/31/96 12.50 0.04 2.12 (0.05) (0.40) -
Period from 5/15/95* to 3/31/96 10.00 0.01 3.66 - (1.17) -
- ------------------------------------------------------------------------------------------------------------------------------------
JNL/Putnam Value Equity Series
Year ended 12/31/98 16.82 0.16 1.94 (0.16) (0.52) -
Year ended 12/31/97 14.50 0.13 3.03 (0.13) (0.71) -
Period from 4/1/96 to 12/31/96 12.77 0.10 1.97 (0.15) (0.19) -
Period from 5/15/95* to 3/31/96 10.00 0.23 2.86 (0.17) (0.15) -
- ------------------------------------------------------------------------------------------------------------------------------------
PPM America/JNL Balanced Series
Year ended 12/31/98 13.06 0.47 0.84 (0.47) (0.42) -
Year ended 12/31/97 11.92 0.36 1.83 (0.36) (0.69) -
Period from 4/1/96 to 12/31/96 11.17 0.10 0.98 (0.15) (0.18) -
Period from 5/15/95* to 3/31/96 10.00 0.25 1.40 (0.19) (0.29) -
- ------------------------------------------------------------------------------------------------------------------------------------
PPM America/JNL High Yield Bond Series
Year ended 12/31/98 11.48 0.91 (0.47) (0.91) (0.12) -
Year ended 12/31/97 10.67 0.59 1.02 (0.59) (0.21) -
Period from 4/1/96 to 12/31/96 10.23 0.51 0.64 (0.69) (0.02) -
Period from 5/15/95* to 3/31/96 10.00 0.73 0.04 (0.54) - -
- ------------------------------------------------------------------------------------------------------------------------------------
PPM America/JNL Money Market Series
Year ended 12/31/98 1.00 0.05 - (0.05) - -
Year ended 12/31/97 1.00 0.05 - (0.05) - -
Period from 4/1/96 to 12/31/96 1.00 0.04 - (0.04) - -
Period from 5/15/95* to 3/31/96 1.00 0.04 - (0.04) - -
- ------------------------------------------------------------------------------------------------------------------------------------
Salomon Brothers/JNL Global Bond Series
Year ended 12/31/98 11.12 0.72 (0.45) (0.72) - -
Year ended 12/31/97 10.63 0.54 0.59 (0.58) (0.05) (0.01)
Period from 4/1/96 to 12/31/96 10.46 0.42 0.70 (0.69) (0.26) -
Period from 5/15/95* to 3/31/96 10.00 0.81 0.24 (0.56) (0.03) -
====================================================================================================================================
</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.
(b) Annualized for the periods ended December 31, 1998, 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>
<TABLE>
<CAPTION>
Ratio and Supplemental Data
------------------------------------------------------------
Ratio of net Ratio of net
operating investment
Net asset Net assets, expenses to income to
value, end Total Return end of period average net average net Portfolio
Period or Year ended of period (a) (in thousands) assets (b) (c) assets (b) (c) turnover
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
JNL/Putnam Growth Series
Year ended 12/31/98 $22.88 34.93% $182,097 1.01% (0.07)% 70.55%
Year ended 12/31/97 16.99 21.88% 83,612 1.05% 0.31% 194.81%
Period from 4/1/96 to 12/31/96 14.21 17.28% 22,804 1.04% 0.94% 184.33%
Period from 5/15/95* to 3/31/96 12.50 37.69% 2,518 0.95% 0.28% 255.03%
- ------------------------------------------------------------------------------------------------------------------------------------
JNL/Putnam Value Equity Series
Year ended 12/31/98 18.24 12.48% 195,936 1.01% 1.06% 77.80%
Year ended 12/31/97 16.82 21.82% 108,565 1.03% 1.43% 112.54%
Period from 4/1/96 to 12/31/96 14.50 16.25% 17,761 0.85% 2.29% 13.71%
Period from 5/15/95* to 3/31/96 12.77 31.14% 3,365 0.87% 2.33% 30.12%
- ------------------------------------------------------------------------------------------------------------------------------------
PPM America/JNL Balanced Series
Year ended 12/31/98 13.48 10.06% 95,974 0.85% 3.87% 33.74%
Year ended 12/31/97 13.06 18.43% 59,694 0.93% 3.72% 160.88%
Period from 4/1/96 to 12/31/96 11.92 9.72% 24,419 1.04% 2.39% 158.15%
Period from 5/15/95* to 3/31/96 11.17 16.60% 4,761 1.01% 2.99% 115.84%
- ------------------------------------------------------------------------------------------------------------------------------------
PPM America/JNL High Yield Bond Series
Year ended 12/31/98 10.89 3.84% 101,485 0.83% 8.62% 129.85%
Year ended 12/31/97 11.48 15.05% 62,712 0.90% 8.15% 189.25%
Period from 4/1/96 to 12/31/96 10.67 11.24% 13,396 0.88% 8.64% 113.08%
Period from 5/15/95* to 3/31/96 10.23 7.82% 6,156 0.88% 8.34% 186.21%
- ------------------------------------------------------------------------------------------------------------------------------------
PPM America/JNL Money Market Series
Year ended 12/31/98 1.00 4.99% 56,349 0.74% 4.87% -
Year ended 12/31/97 1.00 5.01% 41,808 0.75% 4.92% -
Period from 4/1/96 to 12/31/96 1.00 3.61% 23,752 0.75% 4.75% -
Period from 5/15/95* to 3/31/96 1.00 4.59% 6,816 0.75% 5.06% -
- ------------------------------------------------------------------------------------------------------------------------------------
Salomon Brothers/JNL Global Bond Series
Year ended 12/31/98 10.67 2.46% 48,167 1.00% 7.05% 261.87%
Year ended 12/31/97 11.12 10.66% 36,725 1.00% 6.83% 134.55%
Period from 4/1/96 to 12/31/96 10.63 10.68% 12,483 0.99% 7.52% 109.85%
Period from 5/15/95* to 3/31/96 10.46 10.74% 6,380 1.00% 9.01% 152.89%
====================================================================================================================================
</TABLE>
Ratio information assuming
no expense reimbursement
or fees paid indirectly
--------------------------------
Ratio of net
Ratio of investment
expenses to income to
average net average net
Period or Year ended assets (b) assets (b)
================================================================================
JNL/Putnam Growth Series
Year ended 12/31/98 1.01% (0.07)%
Year ended 12/31/97 1.05% 0.31%
Period from 4/1/96 to 12/31/96 1.27% 0.71%
Period from 5/15/95* to 3/31/96 5.38% (4.15)%
- --------------------------------------------------------------------------------
JNL/Putnam Value Equity Series
Year ended 12/31/98 1.01% 1.06%
Year ended 12/31/97 1.09% 1.37%
Period from 4/1/96 to 12/31/96 1.53% 1.61%
Period from 5/15/95* to 3/31/96 2.28% 0.91%
- --------------------------------------------------------------------------------
PPM America/JNL Balanced Series
Year ended 12/31/98 0.85% 3.87%
Year ended 12/31/97 0.94% 3.71%
Period from 4/1/96 to 12/31/96 1.22% 2.21%
Period from 5/15/95* to 3/31/96 3.71% 0.29%
- --------------------------------------------------------------------------------
PPM America/JNL High Yield Bond Series
Year ended 12/31/98 0.83% 8.62%
Year ended 12/31/97 0.90% 8.15%
Period from 4/1/96 to 12/31/96 1.21% 8.31%
Period from 5/15/95* to 3/31/96 1.50% 7.72%
- --------------------------------------------------------------------------------
PPM America/JNL Money Market Series
Year ended 12/31/98 0.75% 4.86%
Year ended 12/31/97 0.76% 4.91%
Period from 4/1/96 to 12/31/96 0.85% 4.65%
Period from 5/15/95* to 3/31/96 1.30% 4.51%
- --------------------------------------------------------------------------------
Salomon Brothers/JNL Global Bond Series
Year ended 12/31/98 1.01% 7.04%
Year ended 12/31/97 1.07% 6.76%
Period from 4/1/96 to 12/31/96 1.44% 7.07%
Period from 5/15/95* to 3/31/96 2.14% 7.87%
================================================================================
See notes to the financial statement.
<PAGE>
JNL SERIES TRUST
FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
Income from Operations Distributions
----------------------------- ---------------------------------------
Net realized &
unrealized gains
Net Asset Net on investments From net
value, investment & foreign From net realized gains
beginning income currency investment on investment Return of
Period or Year ended of period (loss) related items income transactions Capital
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Salomon Brothers/JNL U.S. Government &
Quality Bond Series
Year ended 12/31/98 10.69 0.41 0.60 (0.41) (0.14) -
Year ended 12/31/97 10.20 0.44 0.49 (0.42) (0.02) -
Period from 4/1/96 to 12/31/96 10.09 0.24 0.24 (0.34) (0.03) -
Period from 5/15/95* to 3/31/96 10.00 0.45 0.02 (0.34) (0.04) -
- ------------------------------------------------------------------------------------------------------------------------------------
T. Rowe Price/JNL Established Growth Series
Year ended 12/31/98 15.62 0.05 4.29 (0.06) (0.84) -
Year ended 12/31/97 12.56 0.06 3.64 (0.03) (0.61) -
Period from 4/1/96 to 12/31/96 11.36 0.03 1.81 (0.04) (0.09) (0.51)
Period from 5/15/95* to 3/31/96 10.00 0.07 2.68 (0.06) (1.33) -
- ------------------------------------------------------------------------------------------------------------------------------------
T. Rowe Price/JNL International Equity
Investment Series
Year ended 12/31/98 12.09 0.16 1.58 (0.19) (0.02) -
Year ended 12/31/97 12.08 0.09 0.23 (0.08) (0.23) -
Period from 4/1/96 to 12/31/96 11.25 0.06 0.90 (0.12) (0.01) -
Period from 5/15/95* to 3/31/96 10.00 0.04 1.21 - - -
- ------------------------------------------------------------------------------------------------------------------------------------
T. Rowe Price/JNL Mid-Cap Growth Series
Year ended 12/31/98 17.37 (0.07) 3.80 - (0.67) -
Year ended 12/31/97 14.89 (0.03) 2.74 - (0.23) -
Period from 4/1/96 to 12/31/96 13.43 (0.05) 1.92 (0.05) (0.36) -
Period from 5/15/95* to 3/31/96 10.00 0.06 3.90 - (0.53) -
- ------------------------------------------------------------------------------------------------------------------------------------
JNL/S&P Conservative Growth Series I
Period from 4/9/98* to 12/31/98 10.00 0.38 0.09 - - -
- ------------------------------------------------------------------------------------------------------------------------------------
JNL/S&P Moderate Growth Series I
Period from 4/8/98* to 12/31/98 10.00 0.36 0.27 - - -
- ------------------------------------------------------------------------------------------------------------------------------------
JNL/S&P Aggressive Growth Series I
Period from 4/8/98* to 12/31/98 10.00 0.27 0.61 - - -
- ------------------------------------------------------------------------------------------------------------------------------------
JNL/S&P Very Aggressive Growth Series I
Period from 4/1/98* to 12/31/98 10.00 0.24 0.95 - - -
- ------------------------------------------------------------------------------------------------------------------------------------
JNL/S&P Equity Growth Series I
Period from 4/13/98* to 12/31/98 10.00 0.21 0.43 - - -
- ------------------------------------------------------------------------------------------------------------------------------------
JNL/S&P Equity Aggressive Growth Series I
Period from 4/15/98* to 12/31/98 10.00 0.21 0.54 - - -
====================================================================================================================================
</TABLE>
* Commencement of operations.
(a) Assumes investment at net asset value at the beginning of the period,
reinvestment of all distributions, and a complete redemption of the
investment at the net asset value at the end of the period. Total return is
not annualized.
(b) Annualized for the periods ended December 31, 1998, 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>
<TABLE>
<CAPTION>
Ratios and Supplemental Data
----------------------------------------------------------
Net asset Net assets, expenses to income to
value, end Total Return end of period average net average net Portfolio
Period or Year ended of period (a) (in thousands) assets (b)(c) assets (b)(c) turnover
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Salomon Brothers/JNL U.S. Government &
Quality Bond Series
Year ended 12/31/98 11.15 9.40% 63,785 0.85% 5.33% 429.70%
Year ended 12/31/97 10.69 9.16% 25,389 0.85% 5.99% 378.59%
Period from 4/1/96 to 12/31/96 10.20 4.82% 9,832 0.84% 5.72% 218.50%
Period from 5/15/95* to 3/31/96 10.09 4.65% 3,007 0.84% 5.41% 253.37%
- ------------------------------------------------------------------------------------------------------------------------------------
T. Rowe Price/JNL Established Growth Series
Year ended 12/31/98 19.06 27.78% 216,599 0.95% 0.38% 54.93%
Year ended 12/31/97 15.62 29.47% 124,022 0.98% 0.43% 47.06%
Period from 4/1/96 to 12/31/96 12.56 16.12% 32,291 1.00% 0.59% 36.41%
Period from 5/15/95* to 3/31/96 11.36 28.23% 8,772 1.00% 0.75% 101.13%
- ------------------------------------------------------------------------------------------------------------------------------------
T. Rowe Price/JNL International Equity
Investment Series
Year ended 12/31/98 13.62 14.43% 70,927 1.23% 0.88% 16.39%
Year ended 12/31/97 12.09 2.65% 78,685 1.24% 0.74% 18.81%
Period from 4/1/96 to 12/31/96 12.08 8.54% 48,204 1.25% 1.09% 5.93%
Period from 5/15/95* to 3/31/96 11.25 12.50% 24,211 1.25% 0.78% 16.45%
- ------------------------------------------------------------------------------------------------------------------------------------
T. Rowe Price/JNL Mid-Cap Growth Series
Year ended 12/31/98 20.43 21.49% 189,636 1.04% (0.37)% 50.92%
Year ended 12/31/97 17.37 18.21% 127,052 1.06% (0.26)% 41.43%
Period from 4/1/96 to 12/31/96 14.89 13.91% 47,104 1.10% (0.18)% 25.05%
Period from 5/15/95* to 3/31/96 13.43 40.06% 10,545 1.10% 0.82% 66.04%
- ------------------------------------------------------------------------------------------------------------------------------------
JNL/S&P Conservative Growth Series I
Period from 4/9/98* to 12/31/98 10.47 4.70% 10,026 0.20% 14.15% 36.08%
- ------------------------------------------------------------------------------------------------------------------------------------
JNL/S&P Moderate Growth Series I
Period from 4/8/98* to 12/31/98 10.63 6.30% 12,612 0.20% 13.74% 57.96%
- ------------------------------------------------------------------------------------------------------------------------------------
JNL/S&P Aggressive Growth Series I
Period from 4/8/98* to 12/31/98 10.88 8.80% 4,425 0.20% 7.34% 126.18%
- ------------------------------------------------------------------------------------------------------------------------------------
JNL/S&P Very Aggressive Growth Series I
Period from 4/1/98* to 12/31/98 11.19 11.90% 2,441 0.20% 5.73% 121.03%
- ------------------------------------------------------------------------------------------------------------------------------------
JNL/S&P Equity Growth Series I
Period from 4/13/98* to 12/31/98 10.64 6.40% 5,035 0.20% 6.93% 72.69%
- ------------------------------------------------------------------------------------------------------------------------------------
JNL/S&P Equity Aggressive Growth Series I
Period from 4/15/98* to 12/31/98 10.75 7.50% 3,238 0.20% 7.01% 67.88%
====================================================================================================================================
</TABLE>
Ratio information assuming
no expense reimbursement
or fees paid indirectly
------------------------------
Ratio of net
Ratio of investment
expenses to income to
average net average net
Period or Year ended assets (b) assets (b)
================================================================================
Salomon Brothers/JNL U.S. Government &
Quality Bond Series
Year ended 12/31/98 0.86% 5.32%
Year ended 12/31/97 0.96% 5.88%
Period from 4/1/96 to 12/31/96 1.37% 5.19%
Period from 5/15/95* to 3/31/96 2.53% 3.72%
- --------------------------------------------------------------------------------
T. Rowe Price/JNL Established Growth Series
Year ended 12/31/98 0.95% 0.38%
Year ended 12/31/97 0.98% 0.43%
Period from 4/1/96 to 12/31/96 1.11% 0.48%
Period from 5/15/95* to 3/31/96 2.09% (0.34)%
- --------------------------------------------------------------------------------
T. Rowe Price/JNL International Equity
Investment Series
Year ended 12/31/98 1.28% 0.83%
Year ended 12/31/97 1.32% 0.66%
Period from 4/1/96 to 12/31/96 1.29% 1.05%
Period from 5/15/95* to 3/31/96 2.14% (0.11)%
- --------------------------------------------------------------------------------
T. Rowe Price/JNL Mid-Cap Growth Series
Year ended 12/31/98 1.04% (0.37)%
Year ended 12/31/97 1.06% (0.26)%
Period from 4/1/96 to 12/31/96 1.14% (0.22)%
Period from 5/15/95* to 3/31/96 2.10% (0.18)%
- --------------------------------------------------------------------------------
JNL/S&P Conservative Growth Series I
Period from 4/9/98* to 12/31/98 - -
- --------------------------------------------------------------------------------
JNL/S&P Moderate Growth Series I
Period from 4/8/98* to 12/31/98 - -
- --------------------------------------------------------------------------------
JNL/S&P Aggressive Growth Series I
Period from 4/8/98* to 12/31/98 - -
- --------------------------------------------------------------------------------
JNL/S&P Very Aggressive Growth Series I
Period from 4/1/98* to 12/31/98 - -
- --------------------------------------------------------------------------------
JNL/S&P Equity Growth Series I
Period from 4/13/98* to 12/31/98 - -
- --------------------------------------------------------------------------------
JNL/S&P Equity Aggressive Growth Series I
Period from 4/15/98* to 12/31/98 - -
================================================================================
See notes to the financial statements.
<PAGE>
PROSPECTUS
May 1, 1999
JNL SERIES TRUST
You can find more information about the Trust in:
o The Trust's Statement of Information (SAI) dated May 1, 1999,
which contains further information about the Trust and the
Series, particularly their investment practices and restrictions.
The current SAI is on file with the Securities and Exchange
Commission (SEC) and is incorporated into the Prospectus by
reference (which means the SAI is legally part of the
Prospectus).
o The Trust's Annual and Semi-Annual Reports to shareholders, which
show the Series' actual investments and include financial
statements as of the close of the particular annual or
semi-annual period. The Annual Report also discusses the market
conditions and investment strategies that significantly affected
each Series' performance during the year covered by the report.
You can obtain a copy of the current SAI or the most recent Annual or
Semi-Annual Reports without charge, or make other inquiries, by calling (800)
766-4683, or writing the JNL Series Trust Service Center, P.O. Box 378002,
Denver, Colorado 80237-8003.
You can also obtain information about the Trust (including its current SAI and
most recent Annual and Semi-Annual Reports) from the SEC's Internet site
(http://www.sec.gov) and from the SEC's Public Reference Room in Washington,
D.C. You can find out about the operation of the Public Reference Room and
copying charges by calling (800) SEC-0330.
The Trust's SEC file number is: 811-8894
<PAGE>
JNL(R) SERIES TRUST
<PAGE>
PROSPECTUS
May 1, 1999
JNL(R) SERIES TRUST
5901 Executive Drive o Lansing, Michigan 48911
This Prospectus provides you with the basic information you should know before
investing in the JNL Series Trust (Trust).
The shares of the Trust are sold to life insurance company separate accounts to
fund the benefits of variable annuity contracts. The Trust currently offers
shares in the following separate Series, each with its own investment objective.
JNL/Alliance Growth Series
JNL/J.P. Morgan International & Emerging Markets Series
JNL/Janus Aggressive Growth Series
JNL/Janus Global Equities Series
JNL/PIMCO Total Return Bond Series
JNL/Putnam Growth Series
JNL/Putnam Value Equity Series
JNL/S&P Conservative Growth Series II
JNL/S&P Moderate Growth Series II
JNL/S&P Aggressive Growth Series II
JNL/S&P Very Aggressive Growth Series II
JNL/S&P Equity Growth Series II
JNL/S&P Equity Aggressive Growth Series II
Goldman Sachs/JNL Growth & Income Series
Lazard/JNL Mid Cap Value Series
Lazard/JNL Small Cap Value Series
PPM America/JNL Money Market Series
Salomon Brothers/JNL Balanced Series
Salomon Brothers/JNL Global Bond Series
Salomon Brothers/JNL High Yield Bond Series
T. Rowe Price/JNL International Equity Investment Series
T. Rowe Price/JNL Mid-Cap Growth Series
The Securities and Exchange Commission has not approved or disapproved the
Trust's securities, or determined whether this prospectus is accurate or
complete. It is a criminal offense to state otherwise.
"Standard & Poor's(R)", "S&P(R)", "S&P 500(R)", Standard & Poor's 500", "500",
"S&P MidCap 400 Index" and "Standard & Poor's 400 Index" are trademarks of The
McGraw-Hill Companies, Inc.
The Trust's Statement of Additional Information (SAI) contains additional
information about the Trust and the Series.
---------------
<PAGE>
TABLE OF CONTENTS
About the Series of the Trust
Management of the Trust
Administrative Fee
Investment in Trust Shares
Share Redemption
Tax Status
Financial Highlights
<PAGE>
ABOUT THE SERIES OF THE TRUST
JNL/Alliance Growth Series
Investment Objective. The investment objective of the JNL/Alliance Growth Series
is long-term growth of capital.
Principal Investment Strategies. The Series seeks to achieve its objective by
investing primarily in a diversified portfolio of common stocks or securities
with common stock characteristics, which include securities convertible into or
exchangeable for common stock. The Series invests primarily in high-quality U.S.
companies, generally those of large market capitalization. The Series may invest
a portion of its assets in foreign securities. The potential for appreciation of
capital is the basis for investment decisions. Whatever income the Series'
investments generate is incidental to the objective of capital growth.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests in stocks of U.S. and
foreign companies, it is subject to stock market risk. Stock
prices typically fluctuate more than the values of other types of
securities, typically in response to changes in the particular
company's financial condition and factors affecting the market in
general. For example, unfavorable or unanticipated poor earnings
performance of the company may result in a decline in its stock's
price, and a broad-based market drop may also cause a stock's
price to fall.
o Foreign investing risk. Foreign investing involves risks not
typically associated with U.S. investment. These risks include,
among others, adverse fluctuations in foreign currency values as
well as adverse political, social and economic developments
affecting a foreign country. Investments in foreign countries
could be affected by factors not present in the U.S., such as
restrictions on receiving the investment proceeds from a foreign
country, foreign tax laws, and potential difficulties in
enforcing contractual obligations. Transactions in foreign
securities may be subject to less efficient settlement practices,
including extended clearance and settlement periods. Owning
foreign securities could cause the Series' performance to
fluctuate more than if it held only U.S. securities.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The performance of the Series will vary from year to year. The
Series' performance figures will not reflect the deduction of any charges that
are imposed under a variable annuity contract. Those charges, which are
described in the variable annuity prospectus, will reduce the Series'
performance. As with all mutual funds, the Series' past performance does not
necessarily indicate how it will perform in the future.
Performance for the Series has not been included because the Series had not been
in operation for a full fiscal year as of December 31, 1998.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The JNL/Alliance Growth Series seeks to
achieve its investment objective of long-term growth of capital by investing
primarily in common stocks or securities with common stock characteristics that
the sub-adviser believes have the potential for capital appreciation. In
selecting equity securities, the sub-adviser considers a variety of factors,
such as an issuer's current and projected revenue, earnings, cash flow and
assets, as well as general market conditions. Because the Series holds
securities selected for growth potential rather than protection of income, the
value of the Series' portfolio may be more volatile in response to market
changes than it would be if the Series held income-producing securities.
The Series may use derivative instruments, such as futures contracts, options
and forward currency contracts, for hedging and risk management. These
instruments are subject to transaction costs and certain risks, such as
unanticipated changes in securities prices and global currency markets.
The Series may take a temporary, defensive position by investing a substantial
portion of its assets in U.S. government securities, cash, cash equivalents and
repurchase agreements. Taking a defensive position may reduce the potential for
appreciation in the Series' portfolio. The Series may actively trade securities
in seeking to achieve its objective. Doing so may increase transaction costs,
which may reduce performance.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the JNL/Alliance
Growth Series is Alliance Capital Management L.P. (Alliance), with principal
offices at 1345 Avenue of the Americas, New York, New York 10105. Alliance is a
major international investment manager whose clients primarily are major
corporate employee benefit funds, investment companies, foundations, endowment
funds and public employee retirement systems.
James G. Reilly, Senior Vice President of Alliance, and Syed Hasnain, Senior
Vice President and Large Cap Growth Portfolio Manager of Alliance, share the
responsibility for the day-to-day management of the Series. Mr. Reilly joined
Alliance in 1984. Mr. Hasnain joined Alliance in 1993. Mr. Reilly has had
responsibility for the day-to-day management of the Series since the inception
of the Series. Mr. Hasnain has shared responsibility for the day-to-day
management of the Series since January 1999.
<PAGE>
JNL/J.P. Morgan International & Emerging Markets Series
Investment Objective. The investment objective of the JNL/J.P. Morgan
International & Emerging Markets Series is to provide high total return from a
portfolio of equity securities of foreign companies in developed and, to a
lesser extent, developing markets.
Principal Investment Strategies. The Series seeks to achieve its objective by
investing primarily in a diversified portfolio of common stocks of non-U.S.
companies in developed markets. The Series also invests in the equity securities
of companies in developing countries or "emerging markets." The Series focuses
its emerging market investments in those countries which the sub-adviser
believes have strongly developing economies and in which the markets are
becoming more sophisticated.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests in stocks of foreign
companies, it is subject to stock market risk. Stock prices
typically fluctuate more than the values of other types of
securities, typically in response to changes in the particular
company's financial condition and factors affecting the market in
general. For example, unfavorable or unanticipated poor earnings
performance of the company may result in a decline in its stock's
price, and a broad-based market drop may also cause a stock's
price to fall.
o Foreign investing risk. Foreign investing involves risks not
typically associated with U.S. investment. These risks include,
among others, adverse fluctuations in foreign currency values as
well as adverse political, social and economic developments
affecting a foreign country. Investments in foreign countries
could be affected by factors not present in the U.S., such as
restrictions on receiving the investment proceeds from a foreign
country, foreign tax laws, and potential difficulties in
enforcing contractual obligations. Transactions in foreign
securities may be subject to less efficient settlement practices,
including extended clearance and settlement periods. Owning
foreign securities could cause the Series' performance to
fluctuate more than if it held only U.S. securities.
o Emerging markets risk. The Series may invest a portion of its
assets in securities of issuers in emerging markets, which
involves greater risk. Emerging market countries typically have
economic and political systems that are less fully developed, and
likely to be less stable, than those of more advanced countries.
Emerging market countries may have policies that restrict
investment by foreigners, and there is a higher risk of a
government taking private property. Low or nonexistent trading
volume in securities of issuers in emerging markets may result in
a lack of liquidity and in price volatility. Issuers in emerging
markets typically are subject to a greater degree of change in
earnings and business prospects than are companies in developed
markets.
o Currency risk. The value of the Series' shares may change as a
result of changes in exchange rates reducing the value of the
U.S. dollar value of the Series' foreign investments. Currency
exchange rates can be volatile and affected by a number of
factors, such as the general economics of a country, the actions
of U.S. and foreign governments or central banks, the imposition
of currency controls, and speculation.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The performance of the Series will vary from year to year. The
Series' performance figures will not reflect the deduction of any charges that
are imposed under a variable annuity contract. Those charges, which are
described in the variable annuity prospectus, will reduce the Series'
performance. As with all mutual funds, the Series' past performance does not
necessarily indicate how it will perform in the future.
Performance for the Series has not been included because the Series had not been
in operation for a full fiscal year as of December 31, 1998.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The JNL/J.P. Morgan International &
Emerging Markets Series seeks to achieve its investment objective primarily
through its stock selection process. Using a variety of quantitative valuation
techniques and based on in-house research, the sub-adviser ranks issuers within
each industry group according to their relative value. The sub-adviser makes
investment decisions using the research and valuation ranking, as well as its
assessment of other factors, including: catalysts that could trigger a change in
a stock's price; potential reward compared to potential risk, and temporary
mispricings caused by market overreactions. The Series' country allocation and
industrial sector weightings result primarily from its stock selection decisions
and may vary significantly from the MSCI All Country World Index Free (ex-U.S.),
the Series' benchmark.
The sub-adviser considers "emerging markets" to be any country generally
considered to be an emerging or developing country by the World Bank, the
International Finance Corporation or the United Nations or its authorities. An
issuer in an emerging market is one that: (i) has its principal securities
trading market in an emerging market country; (ii) is organized under the laws
of an emerging market; (iii) derives 50% or more of its total revenue from
either goods produced, sales made or services performed in emerging markets; or
(iv) has at least 50% of its assets located in emerging markets.
Under normal market conditions, the Series may invest in money market
instruments to invest temporary cash balances or to maintain liquidity to meet
redemptions. The Series may also invest in money market instruments as a
temporary defensive measure when, in the sub-adviser's view, market conditions
are, or are anticipated to be, adverse. Doing so may reduce the potential for
appreciation in the Series' portfolio.
The sub-adviser manages the Series actively in pursuit of its investment
objective. Active trading may increase transaction costs, which may reduce
performance.
The Series may use derivative instruments, such as futures contracts, options
and forward currency contracts, for hedging and risk management. These
instruments are subject to transaction costs and certain risks, such as
unanticipated changes in interest rates, securities prices and global currency
markets.
The Series may invest in when-issued and delayed delivery securities. Actual
payment for and delivery of such securities does not take place until some time
in the future, i.e., beyond normal settlement. The purchase of these securities
will result in a loss if their value declines prior to the settlement date. This
could occur, for example, if interest rates increase prior to settlement.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the JNL/J.P. Morgan
International & Emerging Markets Series is J.P. Morgan Investment Management
Inc. (J.P. Morgan), with principal offices at 522 Fifth Avenue, New York, New
York 10036. J.P. Morgan and its affiliates offer a wide range of services to
governmental, institutional, corporate and individual customers and act as
investment adviser to individual and institutional customers.
The Series has a portfolio management team that is responsible for the
day-to-day management of the Series. The portfolio management team is led by
Paul A. Quinsee, Managing Director of J.P. Morgan, Andrew C. Cormie, Vice
President of J.P. Morgan, and Nigel F. Emmett, Vice President of J.P. Morgan.
Mr. Quinsee has been at J.P. Morgan since 1992 and has been on the portfolio
management team since the inception of the Series. Mr. Cormie has been an
international equity portfolio manager since 1997 and employed by J.P. Morgan
since 1984. Mr. Emmett joined J.P. Morgan in August 1997; prior to that, he was
an assistant manager at Brown Brothers Harriman and Co. and a portfolio manager
at Gartmore Investment Management. Mr. Cormie and Mr. Emmett have been on the
portfolio management team for the Series since the inception of the Series.
<PAGE>
JNL/Janus Aggressive Growth Series
Investment Objective. The investment objective of the JNL/Janus Aggressive
Growth Series is long-term growth of capital.
Principal Investment Strategies. The Series seeks to achieve its objective by
investing primarily in a diversified portfolio of common stocks of U.S. and
foreign companies selected for their growth potential. The Series may invest in
companies of any size, from larger, well-established companies to smaller,
emerging growth companies. The Series may invest to a lesser degree in other
types of securities, including preferred stock, warrants, convertible securities
and debt securities.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests in stocks of U.S. and
foreign companies, it is subject to stock market risk. Stock
prices typically fluctuate more than the values of other types of
securities, typically in response to changes in the particular
company's financial condition and factors affecting the market in
general. For example, unfavorable or unanticipated poor earnings
performance of the company may result in a decline in its stock's
price, and a broad-based market drop may also cause a stock's
price to fall. Investing in smaller, newer companies generally
involves greater risks than investing in larger, more established
ones.
For bonds, market risk generally reflects credit risk and interest
rate risk. Credit risk is the actual or perceived risk that the
issuer of the bond will not pay the interest and principal
payments when due. Bond value typically declines if the issuer's
credit quality deteriorates. Interest rate risk is the risk that
interest rates will rise and the value of bonds, including those
held by the Series, will fall. A broad-based market drop may also
cause a bond's price to fall.
o Foreign investing risk. Foreign investing involves risks not
typically associated with U.S. investment. These risks include,
among others, adverse fluctuations in foreign currency values as
well as adverse political, social and economic developments
affecting a foreign country. Investments in foreign countries
could be affected by factors not present in the U.S., such as
restrictions on receiving the investment proceeds from a foreign
country, foreign tax laws, and potential difficulties in enforcing
contractual obligations. Transactions in foreign securities may be
subject to less efficient settlement practices, including extended
clearance and settlement periods. Owning foreign securities could
cause the Series' performance to fluctuate more than if it held
only U.S. securities.
o Currency risk. The value of the Series' shares may change as a
result of changes in exchange rates reducing the value of the U.S.
dollar value of the Series' foreign investments. Currency exchange
rates can be volatile and affected by a number of factors, such as
the general economics of a country, the actions of U.S. and
foreign governments or central banks, the imposition of currency
controls, and speculation.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns since these shares were
first offered and shows how performance has varied from year to year. The table
shows the Series' average annual returns and compares them to the market
indicators listed. Both the chart and the table assume reinvestment of dividends
and distributions. The Series' returns shown in the chart and table below do not
reflect the deduction of any charges that are imposed under a variable annuity
contract. Those charges, which are described in the variable annuity prospectus,
will reduce the Series' performance. As with all mutual funds, the Series' past
performance does not necessarily indicate how it will perform in the future.
Year-By-Year Returns as of December 31
- --------------------------------------
18.95% 12.67% 57.66%
[Insert Chart]
1996 1997 1998
In the periods shown in the chart, the Series' highest quarterly return was
29.79% (4th quarter of 1998) and its lowest quarterly return was -6.56% (3rd
quarter of 1998).
Average Annual Total Returns as of December 31, 1998
----------------------------------------------------
1 year Life of Series*
JNL/Janus Aggressive Growth Series 57.66% 30.36%
S&P 500 Index 28.58% 28.63%
The S&P 500 Index is a broad-based, unmanaged index.
* The Series began operations on May 15, 1995.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The JNL/Janus Aggressive Growth Series
invests primarily in common stocks when the sub-adviser believes that the
relevant market environment favors profitable investing in those securities. The
sub-adviser seeks to identify individual companies with earnings growth
potential that may not be recognized by the market. The sub-adviser selects
securities for their capital growth potential; investment income is not a
consideration. When the sub-adviser believes that market conditions are not
favorable for profitable investing or when the sub-adviser is otherwise unable
to locate favorable investment opportunities, the Series may hedge its
investments to a greater degree and/or increase its position in cash or similar
investments. Doing so may reduce the potential for appreciation in the Series'
portfolio.
The Series may invest in "special situations" from time to time. A special
situation arises when, in the opinion of the sub-adviser, the securities of a
particular issuer will be recognized and appreciate in value due to a specific
development with respect to that issuer. Developments creating special
situations might include, among others, a new product or process, a
technological breakthrough, a management change or other extraordinary corporate
event, or differences in market supply of and demand for the security.
Investment in special situations may carry an additional risk of loss in the
event that the anticipated development does not occur or does not attract the
expected attention. The impact of this strategy on the Series will depend on the
Series' size and the extent of its holdings of special situation issuers
relative to total net assets.
The Series may use derivative instruments, such as futures contracts, options,
and forward currency contracts, for hedging or as a means of enhancing return.
These instruments are subject to transaction costs and certain risks, such as
unanticipated changes in interest rates, securities prices and global currency
markets.
The Series may invest in high-yield, high-risk, fixed-income securities,
commonly known as "junk bonds." These are corporate debt securities rated BBB or
lower by S&P or Baa or lower by Moody's, or unrated securities deemed by the
sub-adviser to be on comparable quality. Lower-rated securities generally
involve a higher risk of default than higher-rated ones.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the JNL/Janus
Aggressive Growth Series is Janus Capital Corporation (Janus Capital), with
principal offices at 100 Fillmore Street, Denver, Colorado 80206. Janus Capital
provides investment advisory services to mutual funds and other institutional
accounts.
Warren B. Lammert, Portfolio Manager of Janus Capital, is responsible for the
day-to-day management of the Series. Mr. Lammert joined Janus Capital in 1987.
He holds a Bachelor of Arts in Economics from Yale University and a Master of
Science in Economic History from the London School of Economics. He is a
Chartered Financial Analyst. Mr. Lammert has had responsibility for the
day-to-day management of the Series since the inception of the Series.
<PAGE>
JNL/Janus Global Equities Series
Investment Objective. The investment objective of the JNL/Janus Global Equities
Series is long-term growth of capital in a manner consistent with the
preservation of capital.
Principal Investment Strategies. The Series seeks to achieve its objective by
investing primarily in a diversified portfolio of common stocks of foreign and
domestic issuers. The Series may invest to a lesser degree in other types of
securities, including preferred stock, warrants, convertible securities, and
debt securities, such as corporate bonds. The Series can invest on a worldwide
basis in companies and other organizations of any size, regardless of country of
organization or place of principal business activity, as well as domestic and
foreign governments, government agencies and other governmental entities. The
Series normally invests in securities of issuers from at least five different
countries, including the United States, although it may invest in fewer than
five countries.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests in stocks of U.S. and
foreign companies, it is subject to stock market risk. Stock
prices typically fluctuate more than the values of other types of
securities, typically in response to changes in the particular
company's financial condition and factors affecting the market in
general. For example, unfavorable or unanticipated poor earnings
performance of the company may result in a decline in its stock's
price, and a broad-based market drop may also cause a stock's
price to fall.
For bonds, market risk generally reflects credit risk and
interest rate risk. Credit risk is the actual or perceived risk
that the issuer of the bond will not pay the interest and
principal payments when due. Bond value typically declines if the
issuer's credit quality deteriorates. Interest rate risk is the
risk that interest rates will rise and the value of bonds,
including those held by the Series, will fall. A broad-based
market drop may also cause a bond's price to fall.
o Foreign investing risk. Foreign investing involves risks not
typically associated with U.S. investment. These risks include,
among others, adverse fluctuations in foreign currency values as
well as adverse political, social and economic developments
affecting a foreign country. Investments in foreign countries
could be affected by factors not present in the U.S., such as
restrictions on receiving the investment proceeds from a foreign
country, foreign tax laws, and potential difficulties in
enforcing contractual obligations. Transactions in foreign
securities may be subject to less efficient settlement practices,
including extended clearance and settlement periods. Owning
foreign securities could cause the Series' performance to
fluctuate more than if it held only U.S. securities. To the
extent that the Series invests in bonds issued by a foreign
government, the Series may have limited legal recourse in the
event of default. Political conditions, especially a country's
willingness to meet the terms of its debt obligations, can create
special risks.
o Currency risk. The value of the Series' shares may change as a
result of changes in exchange rates reducing the value of the
U.S. dollar value of the Series' foreign investments. Currency
exchange rates can be volatile and affected by a number of
factors, such as the general economics of a country, the actions
of U.S. and foreign governments or central banks, the imposition
of currency controls, and speculation.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns since these shares were
first offered and shows how performance has varied from year to year. The table
shows the Series' average annual returns and compares them to the market
indicators listed. Both the chart and the table assume reinvestment of dividends
and distributions. The Series' returns shown in the chart and table below do not
reflect the deduction of any charges that are imposed under a variable annuity
contract. Those charges, which are described in the variable annuity prospectus,
will reduce the Series' performance. As with all mutual funds, the Series' past
performance does not necessarily indicate how it will perform in the future.
Year-By-Year Returns as of December 31
- --------------------------------------
31.36% 19.12% 26.87%
[Insert Chart]
1996 1997 1998
In the periods shown in the chart, the Series' highest quarterly return was
20.52% (4th quarter of 1998) and its lowest quarterly return was -16.93% (3rd
quarter of 1998).
Average Annual Total Returns as of December 31, 1998
----------------------------------------------------
1 year Life of Series*
JNL/Janus Global Equities Series 26.87% 29.59%
Morgan Stanley Capital
International World Index 22.78% 16.53%
The Morgan Stanley Capital International World Index is a broad-based, unmanaged
index.
* The Series began operations on May 15, 1995.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The JNL/Janus Global Equities Series
invests primarily in common stocks of foreign and domestic companies and, to a
lesser degree, other types of securities, such as bonds and other debt
securities. The sub-adviser seeks to identify individual companies with earnings
growth potential that may not be recognized by the market at large. The
sub-adviser selects securities for their capital growth potential; investment
income is not a consideration. When the sub-adviser believes that market
conditions are not favorable for profitable investing or when the sub-adviser is
otherwise unable to locate favorable investment opportunities, the Series may
hedge its investments to a greater degree and/or increase its position in cash
or similar investments. Doing so may reduce the potential for appreciation in
the Series' portfolio.
The Series may invest in "special situations" from time to time. A special
situation arises when, in the opinion of the sub-adviser, the securities of a
particular issuer will be recognized and appreciate in value due to a specific
development with respect to that issuer. Developments creating special
situations might include, among others, a new product or process, a
technological breakthrough, a management change or other extraordinary corporate
event, or differences in market supply of and demand for the security.
Investments in special situations may carry an additional risk of loss in the
event that the anticipated development does not occur or does not attract the
expected attention. The impact of this strategy on the Series will depend on the
Series' size and the extent of its holdings of special situation issuers
relative to total net assets.
The Series may use derivative instruments, such as futures contracts, options,
and forward currency contracts, for hedging or as a means of enhancing return.
These instruments are subject to transaction costs and certain risks, such as
unanticipated changes in interest rates, securities prices and global currency
markets.
The Series may invest in high-yield, high-risk fixed-income securities, commonly
known as "junk bonds." These are corporate debt securities rated BBB or lower by
S&P or Baa or lower by Moody's, or unrated securities deemed by the sub-adviser
to be of comparable quality. Lower-rated securities generally involve a higher
risk of default, and may fluctuate more in value than higher-rated securities.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the JNL/Janus
Global Equities Series is Janus Capital Corporation (Janus Capital), with
principal offices at 100 Fillmore Street, Denver, Colorado 80206. Janus Capital
provides investment advisory services to mutual funds and other institutional
accounts.
Helen Young Hayes, Portfolio Manager of Janus Capital, is responsible for the
day-to-day management of the Series. Ms. Hayes joined Janus Capital in 1987. She
holds a Bachelor of Arts in Economics from Yale University and is a Chartered
Financial Analyst. Ms. Hayes has had responsibility for the day-to-day
management of the Series since the inception of the Series.
<PAGE>
JNL/PIMCO Total Return Bond Series
Investment Objective. The investment objective of the JNL/PIMCO Total Return
Bond Series is to realize maximum total return, consistent with the preservation
of capital and prudent investment management.
Principal Investment Strategies. The Series attempts to achieve its objective by
investing primarily in a diversified portfolio of investment-grade fixed-income
securities of U.S. and foreign issuers such as government, corporate, mortgage-
and other asset-backed securities and cash equivalents.
The average duration of the Series typically ranges between three and six years,
although the maturities of the securities it holds may vary. The Series' foreign
investments will primarily be in securities of issuers based in developed
countries, although it may invest in securities of issuers in emerging market
countries. A significant portion of the Series' foreign holdings may be
denominated in foreign currencies. The Series may buy and sell foreign currency
and foreign currency contracts, and invest in options, futures contracts, swap
agreements, and other indexed instruments. The Series may enter into a series of
purchase or sale contracts or use other investment techniques to obtain market
exposure or to hedge against changes in foreign currency exchange rates,
interest rates or securities prices.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests in securities of U.S. and
foreign issuers, it is subject to market risk. For bonds, market
risk generally reflects credit risk and interest rate risk.
Credit risk is the actual or perceived risk that the issuer of
the bond will not pay the interest and principal payments when
due. Bond value typically declines if the issuer's credit quality
deteriorates. Interest rate risk is the risk that interest rates
will rise and the value of bonds, including those held by the
Series, will fall. A broad-based market drop may also cause a
bond's price to fall.
o Prepayment risk. During periods of falling interest rates, there
is the risk that a debt security with a high stated interest rate
will be prepaid before its expected maturity date.
o Foreign investing risk. Foreign investing involves risks not
typically associated with U.S. investment. These risks include,
among others, adverse fluctuations in foreign currency values as
well as adverse political, social and economic developments
affecting a foreign country. Investments in foreign countries
could be affected by factors not present in the U.S., such as
restrictions on receiving the investment proceeds from a foreign
country, foreign tax laws, and potential difficulties in
enforcing contractual obligations. Transactions in foreign
securities may be subject to less efficient settlement practices,
including extended clearance and settlement periods. Owning
foreign securities could cause the Series' performance to
fluctuate more than if it held only U.S. securities. To the
extent that the Series invests in bonds issued by a foreign
government, the Series may have limited legal recourse in the
event of default. Political conditions, especially a country's
willingness to meet the terms of its debt obligations, can create
special risks.
o Currency risk. The value of the Series' shares may change as a
result of changes in exchange rates reducing the value of the
U.S. dollar value of the Series' foreign investments. Currency
exchange rates can be volatile and affected by a number of
factors, such as the general economics of a country, the actions
of U.S. and foreign governments or central banks, the imposition
of currency controls, and speculation.
o Derivatives risk. Investing in derivative instruments, such as
options, futures contracts, forward currency contracts, indexed
securities and asset-backed securities, involves special risks.
The value of derivatives may rise or fall more rapidly than other
investments, which may increase the volatility of the Series
depending on the nature and extent of the derivatives in the
Series' portfolio. If the sub-adviser uses derivatives in
attempting to manage or "hedge" the overall risk of the
portfolio, the strategy might not be successful, for example, due
to changes in the value of the derivatives that do not correlate
with prices movements in the rest of the portfolio.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The performance of the Series will vary from year to year. The
Series' performance figures will not reflect the deduction of any charges that
are imposed under a variable annuity contract. Those charges, which are
described in the variable annuity prospectus, will reduce the Series'
performance. As with all mutual funds, the Series' past performance does not
necessarily indicate how it will perform in the future.
Performance for the Series has not been included because the Series had not been
in operation for a full fiscal year as of December 31, 1998.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The Series seeks to consistently add value
relative to the Lehman Brothers Aggregate Bond Index, while keeping risk equal
to or less than that index. In managing the Series, the sub-adviser generally
makes investment decisions based on its view of longer-term (three- to
five-year) trends and non-economic factors that may affect interest rates, while
seeking to maintain a portfolio duration that approximates that of the Lehman
Brothers Aggregate Bond Index.
The Series may invest in a wide variety of taxable fixed-income securities,
including convertible securities, fixed- and floating-rate loans and loan
participations. The Series may also invest in repurchase agreements, reverse
repurchase agreements, and dollar rolls. The Series may invest all of its assets
in derivative instruments, such as options, futures contracts or swap
agreements. The Series may invest all of its assets in mortgage- or other
asset-backed securities, zero coupon bonds or strips.
The Series may invest in when-issued and delayed delivery securities. Actual
payment for and delivery of such securities does not take place until some time
in the future, i.e., beyond normal settlement. The purchase of these securities
will result in a loss if their value declines prior to the settlement date. This
could occur, for example, if interest rates increase prior to settlement.
The Series may invest in high-yeild, high-risk, fixed-income securities,
commonly known as "junk bonds." These are corporate debt securities rated BBB or
lower by S&P or Baa or lower by Moody's, or unrated securities deemed by the
sub-adviser to be on comparable quality. Lower-rated securities generally
involve a higher risk of default than higher-rated ones.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the JNL/PIMCO Total
Return Bond Series is Pacific Investment Management Company (PIMCO), located at
840 Newport Center Drive, Suite 300, Newport Beach, California 92660. PIMCO is
an investment counseling firm founded in 1971.
William H. Gross, Managing Director of PIMCO, is responsible for the day-to-day
management of the Series. A Fixed Income Portfolio Manager, Mr. Gross is one of
the founders of PIMCO. Mr. Gross has had responsibility for the day-to-day
management of the Series since the inception of the Series.
<PAGE>
JNL/Putnam Growth Series
Investment Objective. The investment objective of the JNL/Putnam Growth Series
is long-term capital growth.
Principal Investment Strategies. The Series seeks to achieve its objective by
investing primarily in a diversified portfolio of common stock of domestic,
large-capitalization companies. However, the Series may also invest in preferred
stocks, bonds, convertible preferred stock and convertible debentures if the
sub-adviser believes that they offer the potential for capital appreciation. The
Series may invest a portion of its assets in foreign securities.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests in stocks of U.S. and
foreign companies, it is subject to stock market risk. Stock
prices typically fluctuate more than the values of other types of
securities, typically in response to changes in the particular
company's financial condition and factors affecting the market in
general. For example, unfavorable or unanticipated poor earnings
performance of the company may result in a decline in its stock's
price, and a broad-based market drop may also cause a stock's
price to fall.
For bonds, market risk generally reflects credit risk and interest
rate risk. Credit risk is the actual or perceived risk that the
issuer of the bond will not pay the interest and principal
payments when due. Bond value typically declines if the issuer's
credit quality deteriorates. Interest rate risk is the risk that
interest rates will rise and the value of bonds, including those
held by the Series, will fall. A broad-based market drop may also
cause a bond's price to fall.
o Foreign investing risk. Foreign investing involves risks not
typically associated with U.S. investment. These risks include,
among others, adverse fluctuations in foreign currency values as
well as adverse political, social and economic developments
affecting a foreign country. Investments in foreign countries
could be affected by factors not present in the U.S., such as
restrictions on receiving the investment proceeds from a foreign
country, foreign tax laws, and potential difficulties in enforcing
contractual obligations. Transactions in foreign securities may be
subject to less efficient settlement practices, including extended
clearance and settlement periods. Owning foreign securities could
cause the Series' performance to fluctuate more than if it held
only U.S. securities.
o Currency risk. The value of the Series' shares may change as a
result of changes in exchange rates reducing the value of the U.S.
dollar value of the Series' foreign investments. Currency exchange
rates can be volatile and affected by a number of factors, such as
the general economics of a country, the actions of U.S. and
foreign governments or central banks, the imposition of currency
controls, and speculation.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns since these shares were
first offered and shows how performance has varied from year to year. The table
shows the Series' average annual returns and compares them to the market
indicators listed. Both the chart and the table assume reinvestment of dividends
and distributions. The Series' returns shown in the chart and table below do not
reflect the deduction of any charges that are imposed under a variable annuity
contract. Those charges, which are described in the variable annuity prospectus,
will reduce the Series' performance. As with all mutual funds, the Series' past
performance does not necessarily indicate how it will perform in the future.
Year-By-Year Returns as of December 31
- --------------------------------------
26.81% 21.88% 34.93%
[Insert Chart]
1996 1997 1998
In the periods shown in the chart, the Series' highest quarterly return was
24.99% (4th quarter of 1998) and its lowest quarterly return was -12.00% (3rd
quarter of 1998).
Average Annual Total Returns as of December 31, 1998
----------------------------------------------------
1 year Life of Series*
JNL/Putnam Growth Series 34.93% 30.82%
S&P 500 Index 28.58% 28.63%
The S&P 500 Index is a broad-based, unmanaged index.
* The Series began operations on May 15, 1995. Prior to May 1, 1997, the Series
was managed by Phoenix Investment Counsel, Inc.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The JNL/Putnam Growth Series invests
primarily in the equity securities of domestic, large capitalization companies.
However, the Series may invest any amount or proportion of its assets in any
class or type of security believed by the sub-adviser to offer potential for
capital appreciation over both the intermediate and long term.
The Series may use derivative instruments, such as financial futures contracts
and options, for hedging and risk management. These instruments are subject to
transaction costs and certain risks, such as unanticipated changes in interest
rates, securities prices and global currency markets.
For temporary, defensive purposes, when the sub-adviser believes other types of
investments are advantageous on the basis both of risk and protection of capital
values, the Series may invest in fixed-income securities with or without
warrants or conversion features and may retain cash, or invest up to all of its
assets in cash equivalents. Taking a defensive position may reduce the potential
for appreciation of the Series' portfolio.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the JNL/Putnam
Growth Series is Putnam Investment Management, Inc. (Putnam), located at One
Post Office Square, Boston, Massachusetts 02109. Putnam has been managing mutual
funds since 1937.
C. Beth Cotner has responsibility for the day-to-day management of the Series.
Ms. Cotner, Senior Vice President, has been employed as a Senior Portfolio
Manager by Putnam since September 1995. Prior to that, Ms. Cotner was Executive
Vice President of Kemper Financial Services. Ms. Cotner has had responsibility
for the day-to-day management of the Series since May 1, 1997.
<PAGE>
JNL/Putnam Value Equity Series
Investment Objective. The investment objective of the JNL/Putnam Value Equity
Series is capital growth, with income as a secondary objective.
Principal Investment Strategies. The Series seeks to achieve its objectives by
investing primarily in a diversified portfolio of equity securities of domestic,
large-capitalization companies. For this purpose, equity securities include
common stocks, securities convertible into common stock and securities with
common stock characteristics, such as rights and warrants. The Series considers
a large-capitalization company to be one that, at the time its securities are
acquired by the Series, has a market capitalization of $2 billion or greater.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests in the equity securities
of U.S. and foreign companies, it is subject to stock market risk.
Stock prices typically fluctuate more than the values of other
types of securities, typically in response to changes in the
particular company's financial condition and factors affecting the
market in general. For example, unfavorable or unanticipated poor
earnings performance of the company may result in a decline in its
stock's price, and a broad-based market drop may also cause a
stock's price to fall.
o Foreign investing risk. Foreign investing involves risks not
typically associated with U.S. investment. These risks include,
among others, adverse fluctuations in foreign currency values as
well as adverse political, social and economic developments
affecting a foreign country. Investments in foreign countries
could be affected by factors not present in the U.S., such as
restrictions on receiving the investment proceeds from a foreign
country, foreign tax laws, and potential difficulties in enforcing
contractual obligations. Transactions in foreign securities may be
subject to less efficient settlement practices, including extended
clearance and settlement periods. Owning foreign securities could
cause the Series' performance to fluctuate more than if it held
only U.S. securities.
o Currency risk. The value of the Series' shares may change as a
result of changes in exchange rates reducing the value of the U.S.
dollar value of the Series' foreign investments. Currency exchange
rates can be volatile and affected by a number of factors, such as
the general economics of a country, the actions of U.S. and
foreign governments or central banks, the imposition of currency
controls, and speculation.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns since these shares were
first offered and shows how performance has varied from year to year. The table
shows the Series' average annual returns and compares them to the market
indicators listed. Both the chart and the table assume reinvestment of dividends
and distributions. The Series' returns shown in the chart and table below do not
reflect the deduction of any charges that are imposed under a variable annuity
contract. Those charges, which are described in the variable annuity prospectus,
will reduce the Series' performance. As with all mutual funds, the Series' past
performance does not necessarily indicate how it will perform in the future.
Year-By-Year Returns as of December 31
- --------------------------------------
24.33% 21.82% 12.48%
[Insert Chart]
1996 1997 1998
In the periods shown in the chart, the Series' highest quarterly return was
16.64% (4th quarter of 1998) and its lowest quarterly return was -11.03% (3rd
quarter of 1998).
Average Annual Total Returns as of December 31, 1998
----------------------------------------------------
1 year Life of Series*
JNL/Putnam Value Equity Series 12.48% 22.46%
S&P 500 Index 28.58% 28.63%
The S&P 500 Index is a broad-based, unmanaged index.
* The Series began operations on May 15, 1995. Prior to May 1, 1997, the Series
was managed by PPM America, Inc.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The JNL/Putnam Value Equity Series invests
primarily in equity securities of domestic, large-capitalization companies. The
sub-adviser typically selects companies whose stocks have distinctly
above-average dividend yields and market prices that it believes are undervalued
relative to the normal earning power of the company. Under this approach, the
sub-adviser seeks to identify investments where current investor enthusiasm is
low, as reflected in their valuations. The sub-adviser typically reduces the
Series' exposure to a company when its stock price approaches, in the
sub-adviser's judgment, fair valuation.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the JNL/Putnam
Value Equity Series is Putnam Investment Management, Inc. (Putnam), located at
One Post Office Square, Boston, Massachusetts 02109. Putnam has been managing
mutual funds since 1937.
Anthony I. Kreisel a Managing Director of Putnam, has responsibility for the
day-to-day management of the Series. Mr. Kreisel has been an investment
professional at Putnam since 1986. Mr. Kreisel has had responsibility for the
day-to-day management of the Series since May 1, 1997.
<PAGE>
JNL/S&P Conservative Growth Series II
Investment Objective. The investment objective of the JNL/S&P Conservative
Growth Series II is capital growth and current income.
Principal Investment Strategies. The Series seeks to achieve its objective by
investing in a diversified group of other Series of the Trust (Underlying
Series). The Underlying Series in which the JNL/S&P Conservative Growth Series
II may invest are the JNL/Alliance Growth Series, JNL/J.P. Morgan International
& Emerging Markets Series, JNL/Janus Aggressive Growth Series, JNL/Janus Global
Equities Series, JNL/PIMCO Total Return Bond Series, JNL/Putnam Growth Series,
JNL/Putnam Value Equity Series, Goldman Sachs/JNL Growth & Income Series,
Lazard/JNL Mid Cap Value Series, Lazard/JNL Small Cap Value Series, PPM
America/JNL Money Market Series, Salomon Brothers/JNL Balanced Series, Salomon
Brothers/JNL Global Bond Series, Salomon Brothers/JNL High Yield Bond Series, T.
Rowe Price/JNL International Equity Investment Series, and T. Rowe Price/JNL
Mid-Cap Growth Series.
The Series seeks to achieve capital growth through its investments in Underlying
Series that invest primarily in equity securities. These investments may include
Underlying Series that invest in stocks of large established companies as well
as those that invest in stocks of smaller companies with above-average growth
potential.
The Series seeks to achieve current income through its investments in Underlying
Series that invest primarily in fixed-income securities. These investments may
include Underlying Series that invest in foreign bonds denominated in currencies
other than U.S. dollars as well as Underlying Series that invest exclusively in
bonds of U.S. issuers. The Series may invest in Underlying Series that invest
exclusively in investment-grade securities, as well as Underlying Series that
invest in high-yield, high-risk bonds.
Under normal circumstances, the Series allocates approximately 60% to 70% of its
assets to Underlying Series that invest primarily in equity securities and 30%
to 40% to Underlying Series that invest primarily in fixed-income securities.
Within these asset classes, the Series remains flexible with respect to the
percentage it will allocate among particular Underlying Series.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. Since the Series
concentrates its investments in shares of the Underlying Series, its performance
is directly related to the ability of the Underlying Series to meet their
respective investment objectives, as well as the sub-adviser's allocation among
the Underlying Series. Accordingly, a variety of factors may influence its
performance, such as:
o Market risk. Because the Series invests indirectly in stocks of
U.S. and foreign companies, it is subject to stock market risk.
Stock prices typically fluctuate more than the values of other
types of securities, typically in response to changes in the
particular company's financial condition and factors affecting
the market in general. For example, unfavorable or unanticipated
poor earnings performance of the company may result in a decline
in its stock's price, and a broad-based market drop may also
cause a stock's price to fall.
For bonds, market risk generally reflects credit risk and
interest rate risk. Credit risk is the actual or perceived risk
that the issuer of the bond will not pay the interest and
principal payments when due. Bond value typically declines if the
issuer's credit quality deteriorates. Interest rate risk is the
risk that interest rates will rise and the value of bonds,
including those held by an Underlying Series, will fall. A
broad-based market drop may also cause a bond's price to fall.
o Prepayment risk. During periods of falling interest rates, there
is the risk that a debt security with a high stated interest rate
will be prepaid before its expected maturity date.
o Foreign investing risk. Foreign investing involves risks not
typically associated with U.S. investment. These risks include,
among others, adverse fluctuations in foreign currency values as
well as adverse political, social and economic developments
affecting a foreign country. Investments in foreign countries
could be affected by factors not present in the U.S., such as
restrictions on receiving the investment proceeds from a foreign
country, foreign tax laws, and potential difficulties in
enforcing contractual obligations. Transactions in foreign
securities may be subject to less efficient settlement practices,
including extended clearance and settlement periods. Owning
foreign securities could cause an Underlying Series' performance
to fluctuate more than if it held only U.S. securities. To the
extent that an Underlying Series invests in bonds issued by a
foreign government, that Series may have limited legal recourse
in the event of default. Political conditions, especially a
country's willingness to meet the terms of its debt obligations,
can create special risks.
o Emerging markets risk. The Series may invest a portion of its
assets in one or more Underlying Series that hold securities of
issuers in emerging markets, which involves greater risk.
Emerging market countries typically have economic and political
systems that are less fully developed, and likely to be less
stable, than those of more advanced countries. Emerging market
countries may have policies that restrict investment by
foreigners, and there is a higher risk of a government taking
private property. Low or nonexistent trading volume in securities
of issuers in emerging markets may result in a lack of liquidity
and in price volatility. Issuers in emerging market typically are
subject to a greater degree of change in earnings and business
prospects than are companies in developed markets.
o High-yield/high-risk bonds. Lower-rated bonds involve a higher
degree of credit risk, which is the risk that the issuer will not
make interest or principal payments when due. In the event of an
unanticipated default, an Underlying Series would experience a
reduction in its income, a decline in the market value of the
securities so affected and a decline in the value of its shares.
During an economic downturn or substantial period of rising
interest rates, highly leveraged issuers may experience financial
stress which could adversely affect their ability to service
principal and interest payment obligations, to meet projected
business goals and to obtain additional financing. The market
prices of lower-rated securities are generally less sensitive to
interest rate changes than higher-rated investments, but more
sensitive to adverse economic or political changes, or individual
developments specific to the issuer. Periods of economic or
political uncertainty and change can be expected to result in
volatility of prices of these securities.
o Currency risk. The value of the Series' shares may change as a
result of changes in exchange rates reducing the value of the
U.S. dollar value of an Underlying Series' foreign investments.
Currency exchange rates can be volatile and affected by a number
of factors, such as the general economics of a country, the
actions of U.S. and foreign governments or central banks, the
imposition of currency controls, and speculation.
o Non-diversification. The Series is "non-diversified" as such term
is defined in the Investment Company Act of 1940, as amended,
which means that more than 5%, but not more than 25%, of its
total assets may be invested in securities of any one issuer.
Thus, the Series may hold a smaller number of issuers than if it
were "diversified." With a smaller number of different issuers,
the Series is subject to more risk than another fund holding a
larger number of issuers, since changes in the financial
condition or market status of a single issuer may cause greater
fluctuation in the Series' total return and share price.
Because the Series invests exclusively in other series of the Trust, you should
look elsewhere in this prospectus for the particular information about those
series. As a shareholder of an Underlying Series, the Series will bear its pro
rata share of the expenses of that Underlying Series, which could result in
duplication of certain fees, including management and administration fees.
Performance. The performance of the Series will vary from year to year. The
Series' performance figures will not reflect the deduction of any charges that
are imposed under a variable annuity contract. Those charges, which are
described in the variable annuity prospectus, will reduce the Series'
performance. As with all mutual funds, the Series' past performance does not
necessarily indicate how it will perform in the future.
Performance for the Series has not been included because the Series had not been
in operation for a full fiscal year as of December 31, 1998.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The JNL/S&P Conservative Growth Series II
asset allocation is expected to result in less risk than that incurred by
JNL/S&P Moderate Growth Series II, JNL/S&P Aggressive Growth Series II, JNL/S&P
Very Aggressive Growth Series II, JNL/S&P Equity Growth Series II or JNL/S&P
Equity Aggressive Growth Series II.
When the sub-adviser believes that a temporary defensive position is desirable,
the Series may invest up to 100% of its assets in cash or cash equivalents.
Doing so may reduce the potential for appreciation of the Series' portfolio.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the JNL/S&P
Conservative Growth Series II is Standard & Poor's Investment Advisory Services,
Inc. (SPIAS), located at 25 Broadway, New York, New York 10004. SPIAS was
established in 1995 to provide investment advice to the financial community.
SPIAS operates independently of and has no access to analysis or other
information supplied or obtained by Standard & Poor's Ratings Services in
connection with its ratings business, except to the extent such information is
made available by Standard & Poor's Ratings Services to the general public.
David M. Blitzer and Joshua M. Harari, CFA, share the primary responsibility for
the day-to-day management of the Series. Mr. Blitzer has been Vice President of
SPIAS since 1995 and has been an economist with Standard & Poor's Equity
Services Group (which operates independently of Standard & Poor's Ratings
Services) since 1982. Mr. Blitzer has had responsibility for the day-to-day
management of the Series since the inception of the Series. Mr. Harari has been
a senior investment officer with the Quantitative Services department of
Standard & Poor's Financial Information Services since 1998. Since joining
Standard & Poor's in 1986, Mr. Harari served as an equity analyst and supervisor
of industrial analysts with Standard & Poor's Equity Services Group. Mr. Harari
has had responsibility for the day-to-day management of the Series since May
1998.
<PAGE>
JNL/S&P Moderate Growth Series II
Investment Objective. The investment objective of the JNL/S&P Moderate Growth
Series II is capital growth. Current income is a secondary objective.
Principal Investment Strategies. The Series seeks to achieve its investment
objectives by investing in a diversified group of other Series of the Trust
(Underlying Series). The Underlying Series in which the JNL/S&P Moderate Growth
Series II may invest are the JNL/Alliance Growth Series, JNL/J.P. Morgan
International & Emerging Markets Series, JNL/Janus Aggressive Growth Series,
JNL/Janus Global Equities Series, JNL/PIMCO Total Return Bond Series, JNL/Putnam
Growth Series, JNL/Putnam Value Equity Series, Goldman Sachs/JNL Growth & Income
Series, Lazard/JNL Mid Cap Value Series, Lazard/JNL Small Cap Value Series, PPM
America/JNL Money Market Series, Salomon Brothers/JNL Balanced Series, Salomon
Brothers/JNL Global Bond Series, Salomon Brothers/JNL High Yield Bond Series, T.
Rowe Price/JNL International Equity Investment Series, and T. Rowe Price/JNL
Mid-Cap Growth Series.
The Series seeks to achieve capital growth through its investments in Underlying
Series that invest primarily in equity securities. These investments may include
Underlying Series that invest in stocks of large established companies as well
as those that invest in stocks of smaller companies with above-average growth
potential.
The Series seeks to achieve current income through its investments in Underlying
Series that invest primarily in fixed-income securities. These investments may
include Underlying Series that invest in foreign bonds denominated in currencies
other than U.S. dollars as well as Underlying Series that invest exclusively in
bonds of U.S. issuers. The Series may invest in Underlying Series that invest
exclusively in investment-grade securities, as well as Underlying Series that
invest in high-yield, high-risk bonds.
Under normal circumstances, the Series allocates approximately 70% to 80% of its
assets to Underlying Series that invest primarily in equity securities and 20%
to 30% to Underlying Series that invest primarily in fixed-income securities.
Within these asset classes, the Series remains flexible with respect to the
percentage it will allocate among particular Underlying Series.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. Since the Series
concentrates its investments in shares of the Underlying Series, its performance
is directly related to the ability of the Underlying Series to meet their
respective investment objectives, as well as the sub-adviser's allocation among
the Underlying Series. Accordingly, a variety of factors may influence its
performance, such as:
o Market risk. Because the Series invests indirectly in stocks of
U.S. and foreign companies, it is subject to stock market risk.
Stock prices typically fluctuate more than the values of other
types of securities, typically in response to changes in the
particular company's financial condition and factors affecting
the market in general. For example, unfavorable or unanticipated
poor earnings performance of the company may result in a decline
in its stock's price, and a broad-based market drop may also
cause a stock's price to fall.
For bonds, market risk generally reflects credit risk and
interest rate risk. Credit risk is the actual or perceived risk
that the issuer of the bond will not pay the interest and
principal payments when due. Bond value typically declines if the
issuer's credit quality deteriorates. Interest rate risk is the
risk that interest rates will rise and the value of bonds,
including those held by an Underlying Series, will fall. A
broad-based market drop may also cause a bond's price to fall.
o Prepayment risk. During periods of falling interest rates, there
is the risk that a debt security with a high stated interest rate
will be prepaid before its expected maturity date.
o Foreign investing risk. Foreign investing involves risks not
typically associated with U.S. investment. These risks include,
among others, adverse fluctuations in foreign currency values as
well as adverse political, social and economic developments
affecting a foreign country. Investments in foreign countries
could be affected by factors not present in the U.S., such as
restrictions on receiving the investment proceeds from a foreign
country, foreign tax laws, and potential difficulties in
enforcing contractual obligations. Transactions in foreign
securities may be subject to less efficient settlement practices,
including extended clearance and settlement periods. Owning
foreign securities could cause an Underlying Series' performance
to fluctuate more than if it held only U.S. securities. To the
extent that an Underlying Series invests in bonds issued by a
foreign government, that Series may have limited legal recourse
in the event of default. Political conditions, especially a
country's willingness to meet the terms of its debt obligations,
can create special risks.
o Emerging markets risk. The Series may invest a portion of its
assets in one or more Underlying Series that hold securities of
issuers in emerging markets, which involves greater risk.
Emerging market countries typically have economic and political
systems that are less fully developed, and likely to be less
stable, than those of more advanced countries. Emerging market
countries may have policies that restrict investment by
foreigners, and there is a higher risk of a government taking
private property. Low or nonexistent trading volume in securities
of issuers in emerging markets may result in a lack of liquidity
and in price volatility. Issuers in emerging market typically are
subject to a greater degree of change in earnings and business
prospects than are companies in developed markets.
o High-yield/high-risk bonds. Lower-rated bonds involve a higher
degree of credit risk, which is the risk that the issuer will not
make interest or principal payments when due. In the event of an
unanticipated default, an Underlying Series would experience a
reduction in its income, a decline in the market value of the
securities so affected and a decline in the value of its shares.
During an economic downturn or substantial period of rising
interest rates, highly leveraged issuers may experience financial
stress which could adversely affect their ability to service
principal and interest payment obligations, to meet projected
business goals and to obtain additional financing. The market
prices of lower-rated securities are generally less sensitive to
interest rate changes than higher-rated investments, but more
sensitive to adverse economic or political changes, or individual
developments specific to the issuer. Periods of economic or
political uncertainty and change can be expected to result in
volatility of prices of these securities.
o Currency risk. The value of an Underlying Series' shares may
change as a result of changes in exchange rates reducing the
value of the U.S. dollar value of the Series' foreign
investments. Currency exchange rates can be volatile and affected
by a number of factors, such as the general economics of a
country, the actions of U.S. and foreign governments or central
banks, the imposition of currency controls, and speculation.
o Non-diversification. The Series is "non-diversified" as such term
is defined in the Investment Company Act of 1940, as amended,
which means that more than 5%, but not more than 25%, of its
total assets may be invested in securities of any one issuer.
Thus, the Series may hold a smaller number of issuers than if it
were "diversified." With a smaller number of different issuers,
the Series is subject to more risk than another fund holding a
larger number of issuers, since changes in the financial
condition or market status of a single issuer may cause greater
fluctuation in the Series' total return and share price.
Because the Series invests exclusively in other series of the Trust, you should
look elsewhere in this prospectus for the particular information about those
series. As a shareholder of an Underlying Series, the Series will bear its pro
rata share of the expenses of that Underlying Series, which could result in
duplication of certain fees, including management and administration fees.
Performance. The performance of the Series will vary from year to year. The
Series' performance figures will not reflect the deduction of any charges that
are imposed under a variable annuity contract. Those charges, which are
described in the variable annuity prospectus, will reduce the Series'
performance. As with all mutual funds, the Series' past performance does not
necessarily indicate how it will perform in the future.
Performance for the Series has not been included because the Series had not been
in operation for a full fiscal year as of December 31, 1998.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The JNL/S&P Moderate Growth Series II asset
allocation is expected to result in less risk than that incurred by JNL/S&P
Aggressive Growth Series II, JNL/S&P Very Aggressive Growth Series II, JNL/S&P
Equity Growth Series II or JNL/S&P Equity Aggressive Growth Series II, but more
risk than JNL/S&P Conservative Growth Series II.
When the sub-adviser believes that a temporary defensive position is desirable,
the Series may invest up to 100% of its assets in cash or cash equivalents.
Doing so may reduce the potential for appreciation of the Series' portfolio.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the JNL/S&P
Moderate Growth Series II is Standard & Poor's Investment Advisory Services,
Inc. (SPIAS), located at 25 Broadway, New York, New York 10004. SPIAS was
established in 1995 to provide investment advice to the financial community.
SPIAS operates independently of and has no access to analysis or other
information supplied or obtained by Standard & Poor's Ratings Services in
connection with its ratings business, except to the extent such information is
made available by Standard & Poor's Ratings Services to the general public.
David M. Blitzer and Joshua M. Harari, CFA, share the primary responsibility for
the day-to-day management of the Series. Mr. Blitzer has been Vice President of
SPIAS since 1995 and has been an economist with Standard & Poor's Equity
Services Group (which operates independently of Standard & Poor's Ratings
Services) since 1982. Mr. Blitzer has had responsibility for the day-to-day
management of the Series since the inception of the Series. Mr. Harari has been
a senior investment officer with the Quantitative Services department of
Standard & Poor's Financial Information Services since 1998. Since joining
Standard & Poor's in 1986, Mr. Harari served as an equity analyst and supervisor
of industrial analysts with Standard & Poor's Equity Services Group. Mr. Harari
has had responsibility for the day-to-day management of the Series since May
1998.
<PAGE>
JNL/S&P Aggressive Growth Series II
Investment Objective. The investment objective of the JNL/S&P Aggressive Growth
Series II is capital growth.
Principal Investment Strategies. The Series seeks to achieve its objective by
investing in a diversified group of other Series of the Trust (Underlying
Series). The Underlying Series in which the JNL/S&P Aggressive Growth Series II
may invest are the JNL/Alliance Growth Series, JNL/J.P. Morgan International &
Emerging Market Series, JNL/Janus Aggressive Growth Series, JNL/Janus Global
Equities Series, JNL/PIMCO Total Return Bond Series, JNL/Putnam Growth Series,
JNL/Putnam Value Equity Series, Goldman Sachs/JNL Growth & Income Series,
Lazard/JNL Mid Cap Value Series, Lazard/JNL Small Cap Value Series, PPM
America/JNL Money Market Series, Salomon Brothers/JNL Balanced Series, Salomon
Brothers/JNL Global Bond Series, Salomon Brothers/JNL High Yield Bond Series, T.
Rowe Price/JNL International Equity Investment Series, and T. Rowe Price/JNL
Mid-Cap Growth Series.
The Series seeks to achieve capital growth primarily through its investments in
Underlying Series that invest primarily in equity securities. These investments
may include Series that invest in stocks of large established companies as well
as those that invest in stocks of smaller companies with above-average growth
potential.
The Series seeks to achieve capital growth secondarily through its investment in
Underlying Series that invest primarily in fixed-income securities. These
investments may include Underlying Series that invest in foreign bonds
denominated in currencies other than U.S. dollars as well as Underlying Series
that invest exclusively in bonds of U.S. issuers. The Series may invest in
Underlying Series that invest exclusively in investment-grade securities, as
well as Underlying Series that invest in high-yield, high-risk bonds.
Under normal circumstances, the Series allocates approximately 85% to 95% of its
assets to Underlying Series that invest primarily in equity securities and 5% to
15% to Underlying Series that invest primarily in fixed-income securities.
Within these asset classes, the Series remains flexible with respect to the
percentage it will allocate among particular Underlying Series.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. Since the Series
concentrates its investments in shares of the Underlying Series, its performance
is directly related to the ability of the Underlying Series to meet their
respective investment objectives, as well as the sub-adviser's allocation among
the Underlying Series. Accordingly, a variety of factors may influence its
investment performance, such as:
o Market risk. Because the Series invests indirectly in stocks of
U.S. and foreign companies, it is subject to stock market risk.
Stock prices typically fluctuate more than the values of other
types of securities, typically in response to changes in the
particular company's financial condition and factors affecting
the market in general. For example, unfavorable or unanticipated
poor earnings performance of the company may result in a decline
in its stock's price, and a broad-based market drop may also
cause a stock's price to fall.
For bonds, market risk generally reflects credit risk and
interest rate risk. Credit risk is the actual or perceived risk
that the issuer of the bond will not pay the interest and
principal payments when due. Bond value typically declines if the
issuer's credit quality deteriorates. Interest rate risk is the
risk that interest rates will rise and the value of bonds,
including those held by an Underlying Series, will fall. A
broad-based market drop may also cause a bond's price to fall.
o Prepayment risk. During periods of falling interest rates, there
is the risk that a debt security with a high stated interest rate
will be prepaid before its expected maturity date.
o Foreign investing risk. Foreign investing involves risks not
typically associated with U.S. investment. These risks include,
among others, adverse fluctuations in foreign currency values as
well as adverse political, social and economic developments
affecting a foreign country. Investments in foreign countries
could be affected by factors not present in the U.S., such as
restrictions on receiving the investment proceeds from a foreign
country, foreign tax laws, and potential difficulties in
enforcing contractual obligations. Transactions in foreign
securities may be subject to less efficient settlement practices,
including extended clearance and settlement periods. Owning
foreign securities could cause an Underlying Series' performance
to fluctuate more than if it held only U.S. securities. To the
extent that an Underlying Series invests in bonds issued by a
foreign government, that Series may have limited legal recourse
in the event of default. Political conditions, especially a
country's willingness to meet the terms of its debt obligations,
can create special risks.
o Emerging markets risk. The Series may invest a portion of its
assets in one or more Underlying Series that hold securities of
issuers in emerging markets, which involves greater risk.
Emerging market countries typically have economic and political
systems that are less fully developed, and likely to be less
stable, than those of more advanced countries. Emerging market
countries may have policies that restrict investment by
foreigners, and there is a higher risk of a government taking
private property. Low or nonexistent trading volume in securities
of issuers in emerging markets may result in a lack of liquidity
and in price volatility. Issuers in emerging markets typically
are subject to a greater degree of change in earnings and
business prospects than are companies in developed markets.
o Currency risk. The value of an Underlying Series' shares may
change as a result of changes in exchange rates reducing the
value of the U.S. dollar value of the Series' foreign
investments. Currency exchange rates can be volatile and affected
by a number of factors, such as the general economics of a
country, the actions of U.S. and foreign governments or central
banks, the imposition of currency controls, and speculation.
o Non-diversification. The Series is "non-diversified" as such term
is defined in the Investment Company Act of 1940, as amended,
which means that more than 5%, but not more than 25%, of its
total assets may be invested in securities of any one issuer.
Thus, the Series may hold a smaller number of issuers than if it
were "diversified." With a smaller number of different issuers,
the Series is subject to more risk than another fund holding a
larger number of issuers, since changes in the financial
condition or market status of a single issuer may cause greater
fluctuation in the Series' total return and share price.
Because the Series invests exclusively in other series of the Trust, you should
look elsewhere in this prospectus for the particular information about those
series. As a shareholder of an Underlying Series, the Series will bear its pro
rata share of the expenses of that Underlying Series, which could result in
duplication of certain fees, including management and administration fees.
Performance. The performance of the Series will vary from year to year. The
Series' performance figures will not reflect the deduction of any charges that
are imposed under a variable annuity contract. Those charges, which are
described in the variable annuity prospectus, will reduce the Series'
performance. As with all mutual funds, the Series' past performance does not
necessarily indicate how it will perform in the future.
Performance for the Series has not been included because the Series had not been
in operation for a full fiscal year as of December 31, 1998.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The JNL/S&P Aggressive Growth Series II
asset allocation is expected to result in less risk than that incurred by
JNL/S&P Very Aggressive Growth Series II, JNL/S&P Equity Growth Series II or
JNL/S&P Equity Aggressive Growth Series II, but more risk than JNL/S&P
Conservative Growth Series II or JNL/S&P Moderate Growth Series II.
When the sub-adviser believes that a temporary defensive position is desirable,
the Series may invest up to 100% of its assets in cash or cash equivalents.
Taking a defensive position may reduce the potential for appreciation of the
Series' portfolio.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the JNL/S&P
Aggressive Growth Series II is Standard & Poor's Investment Advisory Services,
Inc. (SPIAS), located at 25 Broadway, New York, New York 10004. SPIAS was
established in 1995 to provide investment advice to the financial community.
SPIAS operates independently of and has no access to analysis or other
information supplied or obtained by Standard & Poor's Ratings Services in
connection with its ratings business, except to the extent such information is
made available by Standard & Poor's Ratings Services to the general public.
David M. Blitzer and Joshua M. Harari, CFA, share the primary responsibility for
the day-to-day management of the Series. Mr. Blitzer has been Vice President of
SPIAS since 1995 and has been an economist with Standard & Poor's Equity
Services Group (which operates independently of Standard & Poor's Ratings
Services) since 1982. Mr. Blitzer has had responsibility for the day-to-day
management of the Series since the inception of the Series. Mr. Harari has been
a senior investment officer with the Quantitative Services department of
Standard & Poor's Financial Information Services since 1998. Since joining
Standard & Poor's in 1986, Mr. Harari served as an equity analyst and supervisor
of industrial analysts with Standard & Poor's Equity Services Group. Mr. Harari
has had responsibility for the day-to-day management of the Series since May
1998.
<PAGE>
JNL/S&P Very Aggressive Growth Series II
Investment Objective. The investment objective of the JNL/S&P Very Aggressive
Growth Series II is capital growth.
Principal Investment Strategies. The Series seeks to achieve its objective by
investing in a diversified group of other Series of the Trust (Underlying
Series). The Underlying Series in which JNL/S&P Very Aggressive Growth Series II
may invest are the JNL/Alliance Growth Series, JNL/J.P. Morgan International &
Emerging Markets Series, JNL/Janus Aggressive Growth Series, JNL/Janus Global
Equities Series, JNL/PIMCO Total Return Bond Series, JNL/Putnam Growth Series,
JNL/Putnam Value Equity Series, Goldman Sachs/JNL Growth & Income Series,
Lazard/JNL Mid Cap Value Series, Lazard/JNL Small Cap Value Series, PPM
America/JNL Money Market Series, Salomon Brothers/JNL Balanced Series, Salomon
Brothers/JNL Global Bond Series, Salomon Brothers/JNL High Yield Bond Series, T.
Rowe Price/JNL International Equity Investment Series, and T. Rowe Price/JNL
Mid-Cap Growth Series.
The Series seeks to achieve capital growth through its investments in Underlying
Series that invest primarily in equity securities. These investments may include
Series that invest in stocks of large established companies as well as those
that invest in stocks of smaller companies with above-average growth potential.
Under normal circumstances, the Series allocates 100% of its assets to
Underlying Series that invest primarily in equity securities. The Series remains
flexible with respect to the percentage it will allocate among those particular
Underlying Series that invest primarily in equity securities.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. Since the Series
concentrates its investments in shares of the Underlying Series, its performance
is directly related to the ability of the Underlying Series to meet their
respective investment objectives, as well as the sub-adviser's allocation among
the Underlying Series. Accordingly, a variety of factors may influence its
investment performance, such as:
o Market risk. Because the Series invests indirectly in stocks of
U.S. and foreign companies, it is subject to stock market risk.
Stock prices typically fluctuate more than the values of other
types of securities, typically in response to changes in the
particular company's financial condition and factors affecting
the market in general. For example, unfavorable or unanticipated
poor earnings performance of the company may result in a decline
in its stock's price, and a broad-based market drop may also
cause a stock's price to fall.
For bonds, market risk generally reflects credit risk and
interest rate risk. Credit risk is the actual or perceived risk
that the issuer of the bond will not pay the interest and
principal payments when due. Bond value typically declines if the
issuer's credit quality deteriorates. Interest rate risk is the
risk that interest rates will rise and the value of bonds,
including those held by an Underlying Series, will fall. A
broad-based market drop may also cause a bond's price to fall.
o Prepayment risk. During periods of falling interest rates, there
is the risk that a debt security with a high stated interest rate
will be prepaid before its expected maturity date.
o Foreign investing risk. Foreign investing involves risks not
typically associated with U.S. investment. These risks include,
among others, adverse fluctuations in foreign currency values as
well as adverse political, social and economic developments
affecting a foreign country. Investments in foreign countries
could be affected by factors not present in the U.S., such as
restrictions on receiving the investment proceeds from a foreign
country, foreign tax laws, and potential difficulties in
enforcing contractual obligations. Transactions in foreign
securities may be subject to less efficient settlement practices,
including extended clearance and settlement periods. Owning
foreign securities could cause an Underlying Series' performance
to fluctuate more than if it held only U.S. securities. To the
extent that an Underlying Series invests in bonds issued by a
foreign government, that Series may have limited legal recourse
in the event of default. Political conditions, especially a
country's willingness to meet the terms of its debt obligations,
can create special risks.
o Emerging markets risk. The Series may invest a portion of its
assets in one or more Underlying Series that hold securities of
issuers in emerging markets, which involves greater risk.
Emerging market countries typically have economic and political
systems that are less fully developed, and likely to be less
stable, than those of more advanced countries. Emerging market
countries may have policies that restrict investment by
foreigners, and there is a higher risk of a government taking
private property. Low or nonexistent trading volume in securities
of issuers in emerging markets may result in a lack of liquidity
and in price volatility. Issuers in emerging markets typically
are subject to a greater degree of change in earnings and
business prospects than are companies in developed markets.
o Currency risk. The value of an Underlying Series' shares may
change as a result of changes in exchange rates reducing the
value of the U.S. dollar value of the Series' foreign
investments. Currency exchange rates can be volatile and affected
by a number of factors, such as the general economics of a
country, the actions of U.S. and foreign governments or central
banks, the imposition of currency controls, and speculation.
o Non-diversification. The Series is "non-diversified" as such term
is defined in the Investment Company Act of 1940, as amended,
which means that more than 5%, but not more than 25%, of its
total assets may be invested in securities of any one issuer.
Thus, the Series may hold a smaller number of issuers than if it
were "diversified." With a smaller number of different issuers,
the Series is subject to more risk than another fund holding a
larger number of issuers, since changes in the financial
condition or market status of a single issuer may cause greater
fluctuation in the Series' total return and share price.
Because the Series invests exclusively in other series of the Trust, you should
look elsewhere in this prospectus for the particular information about those
series. As a shareholder of an Underlying Series, the Series will bear its pro
rata share of the expenses of that Underlying Series, which could result in
duplication of certain fees, including management and administration fees.
Performance. The performance of the Series will vary from year to year. The
Series' performance figures will not reflect the deduction of any charges that
are imposed under a variable annuity contract. Those charges, which are
described in the variable annuity prospectus, will reduce the Series'
performance. As with all mutual funds, the Series' past performance does not
necessarily indicate how it will perform in the future.
Performance for the Series has not been included because the Series had not been
in operation for a full fiscal year as of December 31, 1998.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The JNL/S&P Very Aggressive Growth Series
II asset allocation is expected to result in more risk than that incurred by
JNL/S&P Conservative Growth Series II, JNL/S&P Moderate Growth Series II,
JNL/S&P Aggressive Growth Series II, JNL/S&P Equity Growth Series II or JNL/S&P
Equity Aggressive Growth Series II.
When the sub-adviser believes that a temporary defensive position is desirable,
the Series may invest up to 100% of its assets in cash, cash equivalents or
Underlying Series that invest primarily in fixed-income securities. Taking a
defensive position may reduce the potential for appreciation of the Series'
portfolio.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the JNL/S&P Very
Aggressive Growth Series II is Standard & Poor's Investment Advisory Services,
Inc. (SPIAS), located at 25 Broadway, New York, New York 10004. SPIAS was
established in 1995 to provide investment advice to the financial community.
SPIAS operates independently of and has no access to analysis or other
information supplied or obtained by Standard & Poor's Ratings Services in
connection with its ratings business, except to the extent such information is
made available by Standard & Poor's Ratings Services to the general public.
David M. Blitzer and Joshua M. Harari, CFA, share the primary responsibility for
the day-to-day management of the Series. Mr. Blitzer has been Vice President of
SPIAS since 1995 and has been an economist with Standard & Poor's Equity
Services Group (which operates independently of Standard & Poor's Ratings
Services) since 1982. Mr. Blitzer has had responsibility for the day-to-day
management of the Series since the inception of the Series. Mr. Harari has been
a senior investment officer with the Quantitative Services department of
Standard & Poor's Financial Information Services since 1998. Since joining
Standard & Poor's in 1986, Mr. Harari served as an equity analyst and supervisor
of industrial analysts with Standard & Poor's Equity Services Group. Mr. Harari
has had responsibility for the day-to-day management of the Series since May
1998.
<PAGE>
JNL/S&P Equity Growth Series II
Investment Objective. The investment objective of the JNL/S&P Equity Growth
Series II is capital growth.
Principal Investment Strategies. The Series seeks to achieve its objective by
investing in a diversified group of other Series of the Trust (Underlying
Series). The Underlying Series in which the JNL/S&P Equity Growth Series II may
invest are the JNL/Alliance Growth Series, JNL/J.P. Morgan International &
Emerging Markets Series, JNL/Janus Aggressive Growth Series, JNL/Janus Global
Equities Series, JNL/PIMCO Total Return Bond Series, JNL/Putnam Growth Series,
JNL/Putnam Value Equity Series, Goldman Sachs/JNL Growth & Income Series,
Lazard/JNL Mid Cap Value Series, Lazard/JNL Small Cap Value Series, PPM
America/JNL Money Market Series, Salomon Brothers/JNL Balanced Series, Salomon
Brothers/JNL Global Bond Series, Salomon Brothers/JNL High Yield Bond Series, T.
Rowe Price/JNL International Equity Investment Series, and T. Rowe Price/JNL
Mid-Cap Growth Series.
The Series seeks to achieve capital growth through its investments in Underlying
Series that invest primarily in equity securities. These investments may include
Series that invest in stocks of large established companies as well as those
that invest in stocks of smaller companies with above-average growth potential.
Under normal circumstances, the Series allocates 100% of its assets to
Underlying Series that invest primarily in equity securities. The Series remains
flexible with respect to the percentage it will allocate among those particular
Underlying Series that invest primarily in equity securities.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. Since the Series
concentrates its investments in shares of the Underlying Series, its performance
is directly related to the ability of the Underlying Series to meet their
respective investment objectives, as well as the sub-adviser's allocation among
the Underlying Series. Accordingly, a variety of factors may influence its
investment performance, such as:
o Market risk. Because the Series invests indirectly in stocks of
U.S. and foreign companies, it is subject to stock market risk.
Stock prices typically fluctuate more than the values of other
types of securities, typically in response to changes in the
particular company's financial condition and factors affecting
the market in general. For example, unfavorable or unanticipated
poor earnings performance of the company may result in a decline
in its stock's price, and a broad-based market drop may also
cause a stock's price to fall.
For bonds, market risk generally reflects credit risk and
interest rate risk. Credit risk is the actual or perceived risk
that the issuer of the bond will not pay the interest and
principal payments when due. Bond value typically declines if the
issuer's credit quality deteriorates. Interest rate risk is the
risk that interest rates will rise and the value of bonds,
including those held by an Underlying Series, will fall. A
broad-based market drop may also cause a bond's price to fall.
o Prepayment risk. During periods of falling interest rates, there
is the risk that a debt security with a high stated interest rate
will be prepaid before its expected maturity date.
o Foreign investing risk. Foreign investing involves risks not
typically associated with U.S. investment. These risks include,
among others, adverse fluctuations in foreign currency values as
well as adverse political, social and economic developments
affecting a foreign country. Investments in foreign countries
could be affected by factors not present in the U.S., such as
restrictions on receiving the investment proceeds from a foreign
country, foreign tax laws, and potential difficulties in
enforcing contractual obligations. Transactions in foreign
securities may be subject to less efficient settlement practices,
including extended clearance and settlement periods. Owning
foreign securities could cause an Underlying Series' performance
to fluctuate more than if it held only U.S. securities. To the
extent that an Underlying Series invests in bonds issued by a
foreign government, that Series may have limited legal recourse
in the event of default. Political conditions, especially a
country's willingness to meet the terms of its debt obligations,
can create special risks.
o Emerging markets risk. The Series may invest a portion of its
assets in one or more Underlying Series that hold securities of
issuers in emerging markets, which involves greater risk.
Emerging market countries typically have economic and political
systems that are less fully developed, and likely to be less
stable, than those of more advanced countries. Emerging market
countries may have policies that restrict investment by
foreigners, and there is a higher risk of a government taking
private property. Low or nonexistent trading volume in securities
of issuers in emerging markets may result in a lack of liquidity
and in price volatility. Issuers in emerging market typically are
subject to a greater degree of change in earnings and business
prospects than are companies in developed markets.
o Currency risk. The value of an Underlying Series' shares may
change as a result of changes in exchange rates reducing the
value of the U.S. dollar value of the Series' foreign
investments. Currency exchange rates can be volatile and affected
by a number of factors, such as the general economics of a
country, the actions of U.S. and foreign governments or central
banks, the imposition of currency controls, and speculation.
o Non-diversification. The Series is "non-diversified" as such term
is defined in the Investment Company Act of 1940, as amended,
which means that more than 5%, but not more than 25%, of its
total assets may be invested in securities of any one issuer.
Thus, the Series may hold a smaller number of issuers than if it
were "diversified." With a smaller number of different issuers,
the Series is subject to more risk than another fund holding a
larger number of issuers, since changes in the financial
condition or market status of a single issuer may cause greater
fluctuation in the Series' total return and share price.
Because the Series invests exclusively in other series of the Trust, you should
look elsewhere in this prospectus for the particular information about those
series. As a shareholder of an Underlying Series, the Series will bear its pro
rata share of the expenses of that Underlying Series, which could result in
duplication of certain fees, including management and administration fees.
Performance. The performance of the Series will vary from year to year. The
Series' performance figures will not reflect the deduction of any charges that
are imposed under a variable annuity contract. Those charges, which are
described in the variable annuity prospectus, will reduce the Series'
performance. As with all mutual funds, the Series' past performance does not
necessarily indicate how it will perform in the future.
Performance for the Series has not been included because the Series had not been
in operation for a full fiscal year as of December 31, 1998.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The JNL/S&P Equity Growth Series II asset
allocation is expected to result in more risk than that incurred by JNL/S&P
Conservative Growth Series II, JNL/S&P Moderate Growth Series II and JNL/S&P
Aggressive Growth Series II, but less risk than JNL/S&P Equity Aggressive Growth
Series II or JNL/S&P Very Aggressive Growth Series II.
When the sub-adviser believes that a temporary defensive position is desirable,
the Series may invest up to 100% of its assets in cash, cash equivalents or
Underlying Series that invest primarily in fixed-income securities. Taking a
defensive position may reduce the potential for appreciation of the Series'
portfolio.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the JNL/S&P Equity
Growth Series II is Standard & Poor's Investment Advisory Services, Inc.
(SPIAS), located at 25 Broadway, New York, New York 10004. SPIAS was established
in 1995 to provide investment advice to the financial community. SPIAS operates
independently of and has no access to analysis or other information supplied or
obtained by Standard & Poor's Ratings Servicesin connection with its ratings
business, except to the extent such information is made available by Standard &
Poor's Ratings Servicesto the general public.
David M. Blitzer and Joshua M. Harari, CFA, share the primary responsibility for
the day-to-day management of the Series. Mr. Blitzer has been Vice President of
SPIAS since 1995 and has been an economist with Standard & Poor's Equity
Services Group (which operates independently of Standard & Poor's Ratings
Services) since 1982. Mr. Blitzer has had responsibility for the day-to-day
management of the Series since the inception of the Series. Mr. Harari has been
a senior investment officer with the Quantitative Services department of
Standard & Poor's Financial Information Services since 1998. Since joining
Standard & Poor's in 1986, Mr. Harari served as an equity analyst and supervisor
of industrial analysts with Standard & Poor's Equity Services Group. Mr. Harari
has had responsibility for the day-to-day management of the Series since May
1998.
<PAGE>
JNL/S&P Equity Aggressive Growth Series II
Investment Objective. The investment objective of the JNL/S&P Equity Aggressive
Growth Series II is capital growth.
Principal Investment Strategies. The Series seeks to achieve its objective by
investing in a diversified group of other Series of the Trust (Underlying
Series). The Underlying Series in which the JNL/S&P Equity Aggressive Growth
Series II may invest are the JNL/Alliance Growth Series, JNL/J.P. Morgan
International & Emerging Markets Series, JNL/Janus Aggressive Growth Series,
JNL/Janus Global Equities Series, JNL/PIMCO Total Return Bond Series, JNL/Putnam
Growth Series, JNL/Putnam Value Equity Series, Goldman Sachs/JNL Growth & Income
Series, Lazard/JNL Mid Cap Value Series, Lazard/JNL Small Cap Value Series, PPM
America/JNL Money Market Series, Salomon Brothers/JNL Balanced Series, Salomon
Brothers/JNL Global Bond Series, Salomon Brothers/JNL High Yield Bond Series, T.
Rowe Price/JNL International Equity Investment Series, and T. Rowe Price/JNL
Mid-Cap Growth Series.
The Series seeks to achieve capital growth through its investments in Underlying
Series that invest primarily in equity securities. These investments may include
Series that invest in stocks of large established companies as well as those
that invest in stocks of smaller companies with above-average growth potential.
Under normal circumstances, the Series allocates 100% of its assets to
Underlying Series that invest primarily in equity securities. The Series remains
flexible with respect to the percentage it will allocate among those particular
Underlying Series that invest primarily in equity securities.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. Since the Series
concentrates its investments in shares of the Underlying Series, its performance
is directly related to the ability of the Underlying Series to meet their
respective investment objectives, as well as the sub-adviser's allocation among
the Underlying Series. Accordingly, a variety of factors may influence its
investment performance, such as:
o Market risk. Because the Series invests indirectly in stocks of
U.S. and foreign companies, it is subject to stock market risk.
Stock prices typically fluctuate more than the values of other
types of securities, typically in response to changes in the
particular company's financial condition and factors affecting
the market in general. For example, unfavorable or unanticipated
poor earnings performance of the company may result in a decline
in its stock's price, and a broad-based market drop may also
cause a stock's price to fall.
For bonds, market risk generally reflects credit risk and
interest rate risk. Credit risk is the actual or perceived risk
that the issuer of the bond will not pay the interest and
principal payments when due. Bond value typically declines if the
issuer's credit quality deteriorates. Interest rate risk is the
risk that interest rates will rise and the value of bonds,
including those held by an Underlying Series, will fall. A
broad-based market drop may also cause a bond's price to fall.
o Prepayment risk. During periods of falling interest rates, there
is the risk that a debt security with a high stated interest rate
will be prepaid before its expected maturity date.
o Foreign investing risk. Foreign investing involves risks not
typically associated with U.S. investment. These risks include,
among others, adverse fluctuations in foreign currency values as
well as adverse political, social and economic developments
affecting a foreign country. Investments in foreign countries
could be affected by factors not present in the U.S., such as
restrictions on receiving the investment proceeds from a foreign
country, foreign tax laws, and potential difficulties in
enforcing contractual obligations. Transactions in foreign
securities may be subject to less efficient settlement practices,
including extended clearance and settlement periods. Owning
foreign securities could cause an Underlying Series' performance
to fluctuate more than if it held only U.S. securities. To the
extent that an Underlying Series invests in bonds issued by a
foreign government, that Series may have limited legal recourse
in the event of default. Political conditions, especially a
country's willingness to meet the terms of its debt obligations,
can create special risks.
o Emerging markets risk. The Series may invest a portion of its
assets in one or more Underlying Series that hold securities of
issuers in emerging markets, which involves greater risk.
Emerging market countries typically have economic and political
systems that are less fully developed, and likely to be less
stable, than those of more advanced countries. Emerging market
countries may have policies that restrict investment by
foreigners, and there is a higher risk of a government taking
private property. Low or nonexistent trading volume in securities
of issuers in emerging markets may result in a lack of liquidity
and in price volatility. Issuers in emerging markets typically
are subject to a greater degree of change in earnings and
business prospects than are companies in developed markets.
o Currency risk. The value of an Underlying Series' shares may
change as a result of changes in exchange rates reducing the
value of the U.S. dollar value of the Series' foreign
investments. Currency exchange rates can be volatile and affected
by a number of factors, such as the general economics of a
country, the actions of U.S. and foreign governments or central
banks, the imposition of currency controls, and speculation.
o Non-diversification. The Series is "non-diversified" as such term
is defined in the Investment Company Act of 1940, as amended,
which means that more than 5%, but not more than 25%, of its
total assets may be invested in securities of any one issuer.
Thus, the Series may hold a smaller number of issuers than if it
were "diversified." With a smaller number of different issuers,
the Series is subject to more risk than another fund holding a
larger number of issuers, since changes in the financial
condition or market status of a single issuer may cause greater
fluctuation in the Series' total return and share price.
Because the Series invests exclusively in other series of the Trust, you should
look elsewhere in this prospectus for the particular information about those
series. As a shareholder of an Underlying Series, the Series will bear its pro
rata share of the expenses of that Underlying Series, which could result in
duplication of certain fees, including management and administration fees.
Performance. The performance of the Series will vary from year to year. The
Series' performance figures will not reflect the deduction of any charges that
are imposed under a variable annuity contract. Those charges, which are
described in the variable annuity prospectus, will reduce the Series'
performance. As with all mutual funds, the Series' past performance does not
necessarily indicate how it will perform in the future.
Performance for the Series has not been included because the Series had not been
in operation for a full fiscal year as of December 31, 1998.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The JNL/S&P Equity Aggressive Growth Series
II asset allocation is expected to result in more risk than that incurred by
JNL/S&P Conservative Growth Series II, JNL/S&P Moderate Growth Series II,
JNL/S&P Aggressive Growth Series II or JNL/S&P Equity Growth Series II, but less
risk than JNL/S&P Very Aggressive Growth Series II.
When the sub-adviser believes that a temporary defensive position is desirable,
the Series may invest up to 100% of its assets in cash, cash equivalents or
Underlying Series that invest primarily in fixed-income securities. Taking a
defensive position may reduce the potential for appreciation of the Series'
portfolio.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the JNL/S&P Equity
Aggressive Growth Series II is Standard & Poor's Investment Advisory Services,
Inc. (SPIAS), located at 25 Broadway, New York, New York 10004. SPIAS was
established in 1995 to provide investment advice to the financial community.
SPIAS operates independently of and has no access to analysis or other
information supplied or obtained by Standard & Poor's Ratings Services in
connection with its ratings business, except to the extent such information is
made available by Standard & Poor's Ratings Services to the general public.
David M. Blitzer and Joshua M. Harari, CFA, share the primary responsibility for
the day-to-day management of the Series. Mr. Blitzer has been Vice President of
SPIAS since 1995 and has been an economist with Standard & Poor's Equity
Services Group (which operates independently of Standard & Poor's Ratings
Services) since 1982. Mr. Blitzer has had responsibility for the day-to-day
management of the Series since the inception of the Series. Mr. Harari has been
a senior investment officer with the Quantitative Services department of
Standard & Poor's Financial Information Services since 1998. Since joining
Standard & Poor's in 1986, Mr. Harari served as an equity analyst and supervisor
of industrial analysts with Standard & Poor's Equity Services Group. Mr. Harari
has had responsibility for the day-to-day management of the Series since May
1998.
<PAGE>
Goldman Sachs/JNL Growth & Income Series
Investment Objective. The investment objectives of the Goldman Sachs/JNL Growth
& Income Series are long-term growth of capital and growth of income.
Principal Investment Strategies. The Series seeks to achieve its objectives by
investing primarily in a diversified portfolio of equity securities of domestic
large-capitalization companies that the sub-adviser believes to have favorable
prospects for capital appreciation and/or dividend-paying ability. The Series
may also invest in fixed-income securities (typically of investment grade) that
offer the potential to further the Series' investment objectives. The Series may
invest in foreign securities, including securities of issuers in emerging
markets and securities quoted in foreign currencies.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests in stocks of U.S. and
foreign companies, it is subject to stock market risk. Stock
prices typically fluctuate more than the values of other types of
securities, typically in response to changes in the particular
company's financial condition and factors affecting the market in
general. For example, unfavorable or unanticipated poor earnings
performance of the company may result in a decline in its stock's
price, and a broad-based market drop may also cause a stock's
price to fall.
For bonds, market risk generally reflects credit risk and
interest rate risk. Credit risk is the actual or perceived risk
that the issuer of the bond will not pay the interest and
principal payments when due. Bond value typically declines if the
issuer's credit quality deteriorates. Interest rate risk is the
risk that interest rates will rise and the value of bonds,
including those held by the Series, will fall. A broad-based
market drop may also cause a bond's price to fall.
o Prepayment risk. During periods of falling interest rates, there
is the risk that a debt security with a high stated interest rate
will be prepaid before its expected maturity date.
o Foreign investing risk. Foreign investing involves risks not
typically associated with U.S. investment. These risks include,
among others, adverse fluctuations in foreign currency values as
well as adverse political, social and economic developments
affecting a foreign country. Investments in foreign countries
could be affected by factors not present in the U.S., such as
restrictions on receiving the investment proceeds from a foreign
country, foreign tax laws, and potential difficulties in
enforcing contractual obligations. Transactions in foreign
securities may be subject to less efficient settlement practices,
including extended clearance and settlement periods. Owning
foreign securities could cause the Series' performance to
fluctuate more than if it held only U.S. securities. To the
extent that the Series invests in bonds issued by a foreign
government, the Series may have limited legal recourse in the
event of default. Political conditions, especially a country's
willingness to meet the terms of its debt obligations, can create
special risks.
o Currency risk. The value of the Series' shares may change as a
result of changes in exchange rates reducing the value of the
U.S. dollar value of the Series' foreign investments. Currency
exchange rates can be volatile and affected by a number of
factors, such as the general economics of a country, the actions
of U.S. and foreign governments or central banks, the imposition
of currency controls, and speculation.
o Emerging markets risk. The Series may invest a portion of its
assets securities of issuers in emerging markets, which involves
greater risk. Emerging market countries typically have economic
and political systems that are less fully developed, and likely
to be less stable, than those of more advanced countries.
Emerging market countries may have policies that restrict
investment by foreigners, and there is a higher risk of a
government taking private property. Low or nonexistent trading
volume in securities of issuers in emerging markets may result in
a lack of liquidity and in price volatility. Issuers in emerging
markets typically are subject to a greater degree of change in
earnings and business prospects than are companies in developed
markets.
o Derivatives risk. Investing in derivative instruments, such as
options, futures contracts, forward currency contracts, indexed
securities and asset-backed securities, involves special risks.
The value of derivatives may rise or fall more rapidly than other
investments, which may increase the volatility of the Series
depending on the nature and extent of the derivatives in the
Series' portfolio. If the sub-adviser uses derivatives in
attempting to manage or "hedge" the overall risk of the
portfolio, the strategy might not be successful, for example, due
to changes in the value of the derivatives that do not correlate
with prices movements in the rest of the portfolio.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The performance of the Series will vary from year to year. The
Series' performance figures will not reflect the deduction of any charges that
are imposed under a variable annuity contract. Those charges, which are
described in the variable annuity prospectus, will reduce the Series'
performance. As with all mutual funds, the Series' past performance does not
necessarily indicate how it will perform in the future.
Performance for the Series has not been included because the Series had not been
in operation for a full fiscal year as of December 31, 1998.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The Goldman Sachs/JNL Growth & Income
Series invests primarily in equity securities of companies which the sub-adviser
believes are underpriced relative to a combination of such factors as the
company's long-term earnings, growth rate, free cash flow and/or dividend paying
ability.
The sub-adviser gives consideration to the business quality of the issuer.
Factors affecting the sub-adviser's view of that quality include the
competitiveness and degree of regulation in the markets in which the company
operates, the existence of a management team with a record of success, the
position of the company in the markets in which it operates, the level of the
company's financial leverage and the sustainable return on capital invested in
the business. The Series may also purchase securities of companies that have
experienced difficulties and that, in the opinion of the sub-adviser, are
available at attractive prices.
The sub-adviser uses firsthand fundamental research in choosing the Series'
securities and applies macro analysis of numerous economic and valuation
variables to anticipate changes in company earnings and the overall investment
climate. The sub-adviser draws on the research and market expertise of its
affiliates as well as information provided by other securities dealers. In
general, the sub-adviser sells equity securities held by the Series when it
believes that the market price fully reflects or exceeds the securities'
fundamental valuation or when it identifies other, more attractive investments.
The Series may invest up to 10% of its total assets in debt securities which are
unrated or rated in the lowest rating categories by S&P or Moody's. These
lower-rated bonds are commonly referred to as junk bonds. Lower-rated securities
generally involve a higher risk of default than higher-rated ones and a
potentially greater risk of illiquidity.
The Series may use derivative instruments, such as futures contracts, options
and forward currency contracts, for hedging or as a means of enhancing return.
These instruments are subject to transaction costs and certain risks, such as
unanticipated changes in interest rates, securities prices and global currency
markets.
For temporary, defensive purposes, the Series may invest up to 100% of its
assets in U.S. Government securities, repurchase agreements collateralized by
U.S. Government securities, high-grade commercial paper, certificates of
deposit, bankers' acceptances, repurchase agreements, non-convertible preferred
stocks, non-convertible corporate bonds with a remaining maturity of less than
one year, or subject to certain tax restrictions, foreign currencies. Taking a
defensive position may reduce the potential for appreciation of the Series'
portfolio or for growth of income.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the Goldman
Sachs/JNL Growth & Income Series is Goldman Sachs Asset Management (GSAM), One
New York Plaza, New York, New York 10004. GSAM is a separate operating division
of Goldman, Sachs & Co., which registered as an investment adviser in 1981. The
Goldman Sachs Group, L.P., which controls GSAM, announced that it will pursue an
initial public offering of the firm in the late spring or early summer of 1999.
Simultaneously with the offering, the Goldman Sachs Group, L.P. will merge into
The Goldman Sachs Group, Inc. GSAM provides a wide range of fully discretionary
investment advisory services including quantitatively driven and actively
managed U.S. and international equity portfolios, U.S. and global fixed income
portfolios, commodity and currency products, and money markets.
Paul D. Farrell, Managing Director of GSAM, and Karma Wilson, Vice President of
GSAM, share the responsibility for the day-to-day management of the Goldman
Sachs/JNL Growth & Income Series. Mr. Farrell joined GSAM in 1991. In 1998, he
became responsible for managing GSAM's Value team. Ms. Wilson joined Goldman
Sachs in 1994. Prior to 1994, she was an investment analyst with Bankers Trust
Australia Ltd. Mr. Farrell has had responsibility for the day-to-day management
of the Series since January 1999. Ms. Wilson has responsibility for the
day-to-day management of the Series since September 1998.
<PAGE>
Lazard/JNL Mid Cap Value Series
Investment Objective. The investment objective of the Lazard/JNL Mid Cap Value
Series is capital appreciation.
Principal Investment Strategies. The Series seeks to achieve its objective by
investing primarily in a non-diversified portfolio of equity securities of U.S.
companies with market capitalizations in the range of companies represented in
the Russell Mid Cap Index and that the sub-adviser believes are undervalued
based on their return on equity. The Russell Mid Cap Index is composed of
selected common stocks of medium-size U.S. companies. The Series' equity
holdings consist primarily of common stocks but may also include preferred
stocks, securities convertible into or exchangeable for common stocks, rights
and warrants, real estate investment trusts and American and Global Depositary
Receipts.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests primarily in equity
securities of U.S. companies, it is subject to stock market risk.
Stock prices typically fluctuate more than the values of other
types of securities, typically in response to changes in the
particular company's financial condition and factors affecting
the market in general. For example, unfavorable or unanticipated
poor earnings performance of the company may result in a decline
in its stock's price, and a broad-based market drop may also
cause a stock's price to fall.
o Non-diversification. The Series is "non-diversified" as such term
is defined in the Investment Company Act of 1940, as amended,
which means that more than 5%, but not more than 25%, of its
total assets may be invested in securities of any one issuer.
Thus, the Series may hold a smaller number of issuers than if it
were "diversified." With a smaller number of different issuers,
the Series is subject to more risk than another fund holding a
larger number of issuers, since changes in the financial
condition or market status of a single issuer may cause greater
fluctuation in the Series' total return and share price.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The performance of the Series will vary from year to year. The
Series' performance figures will not reflect the deduction of any charges that
are imposed under a variable annuity contract. Those charges, which are
described in the variable annuity prospectus, will reduce the Series'
performance. As with all mutual funds, the Series' past performance does not
necessarily indicate how it will perform in the future.
Performance for the Series has not been included because the Series had not been
in operation for a full fiscal year as of December 31, 1998.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The Lazard/JNL Mid Cap Value Series invests
primarily in the equity securities of undervalued medium-size U.S. companies. To
the extent its assets are not invested in such securities, the Series may invest
in the equity securities of larger capitalization companies or investment grade
fixed-income securities. In searching for undervalued medium capitalization
stocks, the sub-adviser uses a stock-selection process based primarily on
analysis of historical financial data, with little emphasis placed on
forecasting future earnings or events.
The sub-adviser does not automatically sell a security if its market
capitalization grows or falls outside the range of companies in the Russell
Midcap Index. The sub-adviser may sell a security for any of the following
reasons:
o its price rises to a level where it no longer reflects value
(target valuation);
o the underlying investment assumptions are no longer valid;
o company management changes their direction; or
o external events occur (e.g., changes in regulation, taxes and
competitive position).
The Series may use derivative instruments, such as options and futures contracts
and forward currency contracts, for hedging or to enhance return. These
instruments are subject to transaction costs and certain risks, such as
unanticipated changes in securities prices.
For temporary, defensive purposes, the Series may invest up to all of its assets
in larger capitalization companies, cash and short-term money market
instruments. Taking a defensive position may reduce the potential for
appreciation of the Series' portfolio.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the Lazard/JNL Mid
Cap Value Series is Lazard Asset Management (Lazard), 30 Rockefeller Plaza, New
York, New York 10112. Lazard is a division of Lazard Freres & Co. LLC (Lazard
Freres), a New York limited liability company, which provides its clients with a
wide variety of investment banking, brokerage and related services. Lazard and
its affiliates provide investment management services to client discretionary
accounts of both individuals and institutions.
Herbert W. Gullquist and Eileen Alexanderson share primary responsibility for
the day-to-day management of the Series. Mr. Gullquist has been with Lazard
since 1982. He is a Managing Director and a Vice-Chairman of Lazard Freres, and
is the Chief Investment Officer of Lazard. Mr. Gullquist is responsible for
monitoring all investment activity to ensure adherence to Lazard's investment
philosophy and guidelines. Ms. Alexanderson has been with Lazard since 1979. She
has been a Managing Director of Lazard Freres since January 1997; prior thereto,
Ms. Alexanderson was a Senior Vice President of Lazard. Ms. Alexanderson is
responsible for U.S./global equity management and overseeing the day-to-day
operations of the U.S. Small Cap and U.S. Mid Cap equity investment teams. Mr.
Gullquist and Ms. Alexanderson have shared responsibility for the day-to-day
management of the Series since the inception of the Series.
<PAGE>
Lazard/JNL Small Cap Value Series
Investment Objective. The investment objective of the Lazard/JNL Small Cap Value
Series is capital appreciation.
Principal Investment Strategies. The Series seeks to achieve its objective by
investing primarily in a non-diversified portfolio of equity securities of U.S.
companies with market capitalizations in the range of companies represented by
the Russell 2000 Index that the sub-adviser believes are undervalued based on
their return on equity. The Russell 2000 Index is composed of selected common
stocks of small, generally unseasoned U.S. companies. The Series' equity
holdings consist primarily of common stocks but may also include preferred
stocks, securities convertible into or exchangeable for common stocks, rights
and warrants, real estate investment trusts and American and Global Depositary
Receipts.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests in equity securities, it
is subject to stock market risk. Stock prices typically fluctuate
more than the values of other types of securities, typically in
response to changes in the particular company's financial
condition and factors affecting the market in general. For
example, unfavorable or unanticipated poor earnings performance
of the company may result in a decline in its stock's price, and
a broad-based market drop may also cause a stock's price to fall.
o Small cap investing. Investing in smaller, newer companies
generally involves greater risks than investing in larger, more
established ones. The companies in which the Series is likely to
invest have limited product lines, markets or financial resources
and may be subject to more abrupt or erratic market movements
than securities of larger, more established companies or the
market averages in general. In addition, many small
capitalization companies may be in the early stages of
development. Accordingly, an investment in the Series may not be
appropriate for all investors.
o Non-diversification. The Series is "non-diversified" as such term
is defined in the Investment Company Act of 1940, as amended,
which means that more than 5%, but not more than 25%, of its
total assets may be invested in securities of any one issuer.
Thus, the Series may hold a smaller number of issuers than if it
were "diversified." With a smaller number of different issuers,
the Series is subject to more risk than another fund holding a
larger number of issuers, since changes in the financial
condition or market status of a single issuer may cause greater
fluctuation in the Series' total return and share price.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The performance of the Series will vary from year to year. The
Series' performance figures will not reflect the deduction of any charges that
are imposed under a variable annuity contract. Those charges, which are
described in the variable annuity prospectus, will reduce the Series'
performance. As with all mutual funds, the Series' past performance does not
necessarily indicate how it will perform in the future.
Performance for the Series has not been included because the Series had not been
in operation for a full fiscal year as of December 31, 1998.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The Lazard/JNL Small Cap Value Series
invests in equity securities of small U.S. companies that, in the sub-adviser's
opinion, have one or more of the following characteristics: (i) are undervalued
relative to their earnings, cash flow, or asset values; (ii) have an attractive
price/value relationship with expectations that some catalyst will cause the
perception of value to change within 2 years; (iii) are out of favor due to
circumstances which are unlikely to harm the company's franchise or earnings
power; (iv) have low projected price-to-earnings or price-to-cash-flow
multiples; (v) have the potential to become a larger factor in the company's
business; (vi) have significant debt but have high levels of free cash flow; and
(vii) have a relatively short corporate history with the expectation that the
business may grow. In searching for undervalued small capitalization stocks, the
sub-adviser uses a stock-selection process based primarily on analysis of
historical financial data, with little emphasis placed on forecasting future
earnings or events.
The sub-adviser does not automatically sell a security if its market
capitalization grows or falls outside the range of companies in the Russell 2000
Index. The sub-adviser may sell a security for any of the following reasons:
o its price rises to a level where it no longer reflects value
(target valuation);
o the underlying investment assumptions are no longer valid;
o company management changes their direction; or
o external events occur (e.g., changes in regulation, taxes and
competitive position).
The Series may invest in equity securities of larger U.S. companies or
investment grade fixed-income securities.
The Series may use derivative instruments, such as options and futures contracts
and forward currency contracts, for hedging or to enhance return. These
instruments are subject to transaction costs and certain risks, such as
unanticipated changes in securities prices.
For temporary, defensive purposes, the Series may invest up to all of its assets
in larger capitalization companies, cash and short-term money market
instruments. Taking a defensive position may reduce the potential for
appreciation of the Series' portfolio.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the Lazard/JNL
Small Cap Value Series is Lazard Asset Management (Lazard), 30 Rockefeller
Plaza, New York, New York 10112. Lazard is a division of Lazard Freres & Co. LLC
(Lazard Freres), a New York limited liability company, which provides its
clients with a wide variety of investment banking, brokerage and related
services. Lazard and its affiliates provide investment management services to
client discretionary accounts of both individuals and institutions.
Herbert W. Gullquist and Eileen Alexanderson share primary responsibility for
the day-to-day management of the Series. Mr. Gullquist has been with Lazard
since 1982. He is a Managing Director and a Vice-Chairman of Lazard Freres, and
is the Chief Investment Officer of Lazard. Mr. Gullquist is responsible for
monitoring all investment activity to ensure adherence to Lazard's investment
philosophy and guidelines. Ms. Alexanderson has been with Lazard since 1979. She
has been a Managing Director of Lazard Freres since January 1997; prior thereto,
Ms. Alexanderson was a Senior Vice President of Lazard. Ms. Alexanderson is
responsible for U.S./global equity management and overseeing the day-to-day
operations of the U.S. Small Cap and U.S. Mid Cap equity investment teams. Mr.
Gullquist and Ms. Alexanderson have shared responsibility for the day-to-day
management of the Series since the inception of the Series.
<PAGE>
PPM America/JNL Money Market Series
Investment Objective. The investment objective of the PPM America/JNL Money
Market Series is to achieve as high a level of current income as is consistent
with the preservation of capital and maintenance of liquidity by investing in
high quality, short-term money market instruments.
Principal Investment Strategies. The Series invests in high quality, U.S.
dollar-denominated money market instruments that mature in 397 days or less. The
sub-adviser manages the Series to meet the requirements of Rule 2a-7 under the
Investment Company Act of 1940, as amended, including those as to quality,
diversification and maturity. The Series may invest more than 25% of its assets
in the U.S. banking industry.
Principal Risks of Investing in the Series. An investment in the Series is not
insured or guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Although the Series seeks to preserve the value of your
investment at $1.00 per share, you could lose money by investing in the Series.
A variety of factors may influence its investment performance, such as:
o Market risk. Fixed income securities in general are subject to
credit risk and market risk. Credit risk is the actual or
perceived risk that the issuer of the bond will not pay the
interest and principal payments when due. Bond value typically
declines if the issuer's credit quality deteriorates. Market
risk, also known as interest rate risk, is the risk that interest
rates will rise and the value of bonds, including those held by
the Series, will fall. A broad-based market drop may also cause a
bond's price to fall.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns since these shares were
first offered and shows how performance has varied from year to year. The table
shows the Series' average annual returns and compares them to the market
indicators listed. Both the chart and the table assume reinvestment of dividends
and distributions. The Series' returns shown in the chart and table below do not
reflect the deduction of any charges that are imposed under a variable annuity
contract. Those charges, which are described in the variable annuity prospectus,
will reduce the Series' performance. As with all mutual funds, the Series' past
performance does not necessarily indicate how it will perform in the future.
Year-By-Year Returns as of December 31
- --------------------------------------
4.87% 5.01% 4.99%
[Insert Chart]
1996 1997 1998
In the periods shown in the chart, the Series' highest quarterly return was
1.30% (3rd quarter of 1995) and its lowest quarterly return was 1.17% (1st
quarter of 1997).
Average Annual Total Returns as of December 31, 1998
----------------------------------------------------
1 year Life of Series*
PPM America/JNL Money Market Series 4.99% 5.00%
Merrill Lynch Treasury Bill
Index (3 month) 5.23% 5.405%
The 7-day yield of the Series on December 31, 1998, was 4.78%.
The Merrill Lynch Treasury Bill Index is a broad-based unmanaged index.
* The Series began operations on May 15, 1995.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The PPM America/JNL Money Market Series
invests exclusively in the following types of high quality, U.S.
dollar-denominated money market instruments that mature in 397 days or less:
o Obligations issued or guaranteed as to principal and interest by
the U.S. Government, its agencies and instrumentalities;
o Obligations, such as time deposits, certificates of deposit and
bankers acceptances, issued by U.S. banks and savings banks that
are members of the Federal Deposit Insurance Corporation,
including their foreign branches and foreign subsidiaries, and
issued by domestic and foreign branches of foreign banks;
o Corporate obligations, including commercial paper, of domestic
and foreign issuers;
o Obligations issued or guaranteed by one or more foreign
governments or any of their political subdivisions, agencies or
instrumentalities, including obligations of supranational
entities; and
o Repurchase agreements on obligations issued or guaranteed by the
U.S. Government, its agencies or instrumentalities.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the PPM America/JNL
Money Market Series is PPM America, Inc. (PPM), which is located at 225 West
Wacker Drive, Chicago, Illinois 60606. PPM, an affiliate of the investment
adviser to the Trust, manages assets of Jackson National Life Insurance Company
and of other affiliated companies.
PPM supervises and manages the investment portfolio of the Series and directs
the purchase and sale of the Series' investment securities. PPM utilizes teams
of investment professionals acting together to manage the assets of the Series.
The teams meet regularly to review portfolio holdings and to discuss purchase
and sale activity. The teams adjust holdings in the portfolios as they deem
appropriate in the pursuit of the Series' investment objectives. PPM has
supervised and managed the investment portfolio of the Series since inception of
the Series.
<PAGE>
Salomon Brothers/JNL Balanced Series
Investment Objective. The investment objective of the Salomon Brothers/JNL
Balanced Series is to obtain above-average income. The Series' secondary
objective is to take advantage of opportunities for growth of capital and
income.
Principal Investment Strategies. The Series seeks to achieve its objectives by
investing in a diversified portfolio of a broad variety of securities, including
equity securities, fixed-income securities and short-term obligations. The
Series may vary the percentage of assets invested in any one type of security in
accordance with the sub-adviser's view of existing and anticipated economic and
market conditions, fiscal and monetary policy and underlying security values.
Under normal market conditions, approximately 40% of the Series' assets will
consist of equity securities. Equity holdings may include common and preferred
stock, securities convertible into common or preferred stock, rights and
warrants, equity interests in trusts, partnerships, joint ventures or similar
enterprises, and Depositary Receipts.
The sub-adviser may invest in the full range of maturities of fixed-income
securities, which may include corporate debt securities, U.S. Government
securities, mortgage-backed securities, zero coupon bonds, deferred interest
bonds and payment-in-kind securities. Generally, most of the Series' long-term
debt investments consist of investment grade securities, although the Series may
invest in non-investment grade securities commonly known as "junk bonds." The
Series may also invest in foreign securities.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests in equity securities of
U.S. and foreign companies, it is subject to stock market risk.
Stock prices typically fluctuate more than the values of other
types of securities, typically in response to changes in the
particular company's financial condition and factors affecting
the market in general. For example, unfavorable or unanticipated
poor earnings performance of the company may result in a decline
in its stock's price, and a broad-based market drop may also
cause a stock's price to fall.
For bonds, market risk generally reflects credit risk and
interest rate risk. Credit risk is the actual or perceived risk
that the issuer of the bond will not pay the interest and
principal payments when due. Bond value typically declines if the
issuer's credit quality deteriorates. Interest rate risk is the
risk that interest rates will rise and the value of bonds,
including those held by the Series, will fall. A broad-based
market drop may also cause a bond's price to fall.
o Foreign investing risk. Foreign investing involves risks not
typically associated with U.S. investment. These risks include,
among others, adverse fluctuations in foreign currency values as
well as adverse political, social and economic developments
affecting a foreign country. Investments in foreign countries
could be affected by factors not present in the U.S., such as
restrictions on receiving the investment proceeds from a foreign
country, foreign tax laws, and potential difficulties in
enforcing contractual obligations. Transactions in foreign
securities may be subject to less efficient settlement practices,
including extended clearance and settlement periods. Owning
foreign securities could cause the Series' performance to
fluctuate more than if it held only U.S. securities.
o High-yield/high-risk bonds. Lower-rated bonds involve a higher
degree of credit risk, which is the risk that the issuer will not
make interest or principal payments when due. In the event of an
unanticipated default, the Series would experience a reduction in
its income, a decline in the market value of the securities so
affected and a decline in the value of its shares. During an
economic downturn or substantial period of rising interest rates,
highly leveraged issuers may experience financial stress which
could adversely affect their ability to service principal and
interest payment obligations, to meet projected business goals
and to obtain additional financing. The market prices of
lower-rated securities are generally less sensitive to interest
rate changes than higher-rated investments, but more sensitive to
adverse economic or political changes, or individual developments
specific to the issuer. Periods of economic or political
uncertainty and change can be expected to result in volatility of
prices of these securities.
o Prepayment risk. During periods of falling interest rates, there
is the risk that a debt security with a high stated interest rate
will be prepaid before its expected maturity date.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The performance of the Series will vary from year to year. The
Series' performance figures will not reflect the deduction of any charges that
are imposed under a variable annuity contract. Those charges, which are
described in the variable annuity prospectus, will reduce the Series'
performance. As with all mutual funds, the Series' past performance does not
necessarily indicate how it will perform in the future.
Performance for the Series has not been included because the Series had not been
in operation for a full fiscal year as of December 31, 1998.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The Salomon Brothers/JNL Balanced Series
allocates its assets primarily among common stocks, investment-grade bonds,
convertible securities, high-yield/high-risk securities and cash.
The Series may use derivative instruments, such as futures contracts and
options, for hedging or maturity or duration purposes, or as a means of
enhancing return. These instruments are subject to transaction costs and certain
risks, such as unanticipated changes in interest rates securities prices.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the Salomon
Brothers/JNL Balanced Series is Salomon Brothers Asset Management Inc (SBAM).
SBAM was incorporated in 1987, and, together with affiliates in London,
Frankfurt, Tokyo and Hong Kong, SBAM provides a broad range of fixed-income and
equity investment advisory services to various individual and institutional
clients located throughout the world and serves as sub-adviser to various
investment companies. SBAM's business offices are located at 7 World Trade
Center, New York, New York 10048.
George Williamson, Diretor and Senior Portfolio Manager of SBAM, is primarily
responsible for the day-to-day management of the Series. Prior to joining SBAM
in 1990, Mr. Williamson was employed by as a portfolio manager with Lehman
Brothers from 1979 to 1990. Mr. Williamson has had primary responsibility for
the day-to-day management of the Series since September 1998.
<PAGE>
Salomon Brothers/JNL Global Bond Series
Investment Objective. The primary investment objective of the Salomon
Brothers/JNL Global Bond Series is to seek a high level of current income. As a
secondary objective, the Series seeks capital appreciation.
Principal Investment Strategies. The Series seeks to achieve its objective
through a diversified portfolio consisting primarily of fixed income securities
of U.S. and foreign issuers. The sub-adviser invests the Series' assets
primarily by making strategic allocations among: U.S. investment grade bonds;
high-yield bonds; non-U.S. investment grade bonds; and emerging markets debt
securities. The sub-adviser makes these allocations based on its analysis of
current economic and market conditions, and the relative risks and
opportunities, applicable to those types of securities. The sub-adviser may
invest a significant portion of the Series' assets in medium- or lower-quality
securities.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests in fixed-income
securities of U.S. and foreign issuers, it is subject to market
risk. For bonds, market risk generally reflects credit risk and
interest rate risk. Credit risk is the actual or perceived risk
that the issuer of the bond will not pay the interest and
principal payments when due. Bond value typically declines if the
issuer's credit quality deteriorates. Interest rate risk is the
risk that interest rates will rise and the value of bonds,
including those held by the Series, will fall. A broad-based
market drop may also cause a bond's price to fall.
o Prepayment risk. During periods of falling interest rates, there
is the risk that a debt security with a high stated interest rate
will be prepaid before its expected maturity date.
o Foreign investing risk. Foreign investing involves risks not
typically associated with U.S. investment. These risks include,
among others, adverse fluctuations in foreign currency values as
well as adverse political, social and economic developments
affecting a foreign country. Investments in foreign countries
could be affected by factors not present in the U.S., such as
restrictions on receiving the investment proceeds from a foreign
country, foreign tax laws, and potential difficulties in
enforcing contractual obligations. Transactions in foreign
securities may be subject to less efficient settlement practices,
including extended clearance and settlement periods. Owning
foreign securities could cause the Series' performance to
fluctuate more than if it held only U.S. securities. To the
extent that the Series invests in bonds issued by a foreign
government, the Series may have limited legal recourse in the
event of default. Political conditions, especially a country's
willingness to meet the terms of its debt obligations, can create
special risks.
o High-yield/high-risk bonds. Lower rated bonds involve a higher
degree of credit risk, which is the risk that the issuer will not
make interest or principal payments when due. In the event of an
unanticipated default, the Series would experience a reduction in
its income, a decline in the market value of the securities so
affected and a decline in the value of its shares. During an
economic downturn or substantial period of rising interest rates,
highly leveraged issuers may experience financial stress which
could adversely affect their ability to service principal and
interest payment obligations, to meet projected business goals
and to obtain additional financing. The market prices of
lower-rated securities are generally less sensitive to interest
rate changes than higher-rated investments, but more sensitive to
adverse economic or political changes, or individual developments
specific to the issuer. Periods of economic or political
uncertainty and change can be expected to result in volatility of
prices of these securities.
o Currency risk. The value of the Series' shares may change as a
result of changes in exchange rates reducing the value of the
U.S. dollar value of the Series' foreign investments. Currency
exchange rates can be volatile and affected by a number of
factors, such as the general economics of a country, the actions
of U.S. and foreign governments or central banks, the imposition
of currency controls, and speculation.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns since these shares were
first offered and shows how performance has varied from year to year. The table
shows the Series' average annual returns and compares them to the market
indicators listed. Both the chart and the table assume reinvestment of dividends
and distributions. The Series' returns shown in the chart and table below do not
reflect the deduction of any charges that are imposed under a variable annuity
contract. Those charges, which are described in the variable annuity prospectus,
will reduce the Series' performance. As with all mutual funds, the Series' past
performance does not necessarily indicate how it will perform in the future.
Year-By-Year Returns as of December 31
- --------------------------------------
14.39% 10.66% 2.46%
[Insert Chart]
1996 1997 1998
In the periods shown in the chart, the Series' highest quarterly return was
4.86% (2nd quarter of 1997) and its lowest quarterly return was -2.72% (3rd
quarter of 1998).
Average Annual Total Returns As of December 31, 1998
----------------------------------------------------
1 year Life of Series*
Salomon Brothers/JNL Global Bond
Series 2.46% 9.47%
Salomon Smith Barney Broad Investment
Grade Index 8.72% 8.56%
The Salomon Smith Barney Broad Investment Grade Index is a broad-based,
unmanaged index.
* The Series began operations on May 15, 1995.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The Salomon Brothers/JNL Global Bond Series
invests in a globally diverse portfolio of fixed-income investments. The
sub-adviser has broad discretion to invest the Series' assets among certain
segments of the fixed-income market, primarily U.S. investment-grade bonds,
high-yield corporate debt securities, emerging market debt securities and
investment-grade foreign debt securities. These segments include U.S. Government
securities and mortgage- and other asset-backed securities (including
interest-only or principal-only securities), as well as debt obligations issued
or guaranteed by a foreign government or supranational organization.
In determining the assets to invest in each type of security, the sub-adviser
relies in part on quantitative analytical techniques that measure relative risks
and opportunities of each type of security based on current and historical
economic, market, political and technical data for each type of security, as
well as on its own assessment of economic and market conditions both on a global
and local (country) basis. The sub-adviser continuously reviews the allocation
of assets for the Series and makes such adjustments as it deems appropriate.
The sub-adviser has discretion to select the range of maturities of the various
fixed income securities in which the Series invests. The sub-adviser anticipates
that, under current market conditions, the Series' portfolio securities will
have a weighted average life of 6 to 10 years. However, the weighted average
life of the portfolio securities may vary substantially from time to time
depending on economic and market conditions.
The sub-adviser may invest in medium or lower-rated securities. Investments of
this type involve significantly greater risks, including price volatility and
risk of default in the payment of interest and principal, than higher-quality
securities.
When the sub-adviser believes that adverse conditions prevail in the market for
fixed-income securities, the Series may, for temporary defensive purposes,
invest its assets without limit in high-quality, short-term money market
instruments. Doing so may reduce the potential for high current income or
appreciation of the Series' portfolio.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the Salomon
Brothers/JNL Global Bond Series is Salomon Brothers Asset Management Inc (SBAM).
SBAM was incorporated in 1987, and, together with affiliates in London,
Frankfurt, Tokyo and Hong Kong, SBAM provides a broad range of fixed-income and
equity investment advisory services to various individual and institutional
clients located throughout the world and serves as sub-adviser to various
investment companies. SBAM's business offices are located at 7 World Trade
Center, New York, New York 10048.
In connection with SBAM's service as sub-adviser to the Series, SBAM Limited,
whose business address is Victoria Plaza, 111 Buckingham Palace Road, London
SW1W OSB, England, provides certain sub-advisory services to SBAM relating to
currency transactions and investments in non-dollar denominated debt securities
for the benefit of the Series. SBAM Limited is compensated by SBAM at no
additional expense to the Trust.
Peter J. Wilby is primarily responsible for the day-to-day management of the
high-yield and emerging market debt securities portions of the Series. Mr. Wilby
has had primary responsibility for the day-to-day management of the high-yield
and emerging market debt securities portions of the Series since the inception
of the Series. Beth Semmel assists Mr. Wilby in the day-to-day management of the
Series. Mr. Wilby, who joined SBAM in 1989, is a Managing Director of Salomon
Brothers Inc. and SBAM and Senior Portfolio Manager of SBAM, is responsible for
investment company and institutional portfolios which invest in high-yield
non-U.S. and U.S. corporate debt securities and high-yield foreign sovereign
debt securities. From 1984 to 1989, Mr. Wilby was employed by Prudential Capital
Management Group (Prudential) where he served as Director of Prudential's credit
research unit and as a corporate and sovereign credit analyst with Prudential.
Mr. Wilby also managed high-yield bonds and leveraged equities in the mutual
funds and institutional portfolios at Prudential. Ms. Semmel is a Director and
Portfolio Manager of SBAM and a Director of Salomon Brothers Inc. Ms. Semmel
joined SBAM in May of 1993, where she manages high-yield portfolios. Prior to
joining SBAM, Ms. Semmel spent four years as a high-yield bond analyst at Morgan
Stanley Asset Management. Ms. Semmel has assisted in the day-to-day management
of the Series since inception of the Series.
David J. Scott, a Managing Director and Senior Portfolio Manager of SBAM, is
primarily responsible for currency transactions and investments in non-dollar
denominated debt securities for the Series. Prior to joining SBAM Limited in
April 1994, Mr. Scott worked for four years at J.P. Morgan Investment Management
Inc. (J.P. Morgan) where he was responsible for global and non-dollar portfolios
for clients including departments of various governments, pension funds and
insurance companies. Before joining J.P. Morgan, Mr. Scott worked for three
years at Mercury Asset Management where he was responsible for captive insurance
portfolios and products. Mr. Scott has had responsibility for currency
transactions and investment in non-dollar denominated debt securities for the
Series since inception of the Series.
Roger Lavan is primarily responsible for the mortgage-backed securities and U.S.
Government securities portions of the Series. Mr. Lavan joined SBAM in 1990 and
is a Director and Portfolio Manager responsible for investment grade portfolios.
Prior to joining SBAM, Mr. Lavan spent four years analyzing portfolios for
Salomon Brothers Inc.'s Fixed Income Sales Group and Product Support Divisions.
Mr. Lavan has had responsibility for mortgage-backed securities and U.S.
Government securities for the Series since the inception of the Series.
<PAGE>
Salomon Brothers/JNL High Yield Bond Series
Investment Objective. The investment objective of the Salomon Brothers/JNL High
Yield Bond Series is to maximize current income. As a secondary objective, the
Series seeks capital appreciation.
Principal Investment Strategies. The Series seeks to achieve its objectives by
investing primarily in a diversified portfolio of high- yield, high-risk,
fixed-income securities of U.S. issuers rated in medium or lower rating
categories (or determined by the sub-adviser to be of comparable quality). In
pursuing the Series' secondary objective of capital appreciation, the
sub-adviser looks for those companies that the sub-adviser believes have the
highest potential for improving credit fundamentals.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o High-yield/high-risk bonds. Lower-rated bonds involve a higher
degree of credit risk, which is the risk that the issuer will not
make interest or principal payments when due. In the event of an
unanticipated default, a Series would experience a reduction in
its income, a decline in the market value of the securities so
affected and a decline in the value of its shares. During an
economic downturn or substantial period of rising interest rates,
highly leveraged issuers may experience financial stress which
could adversely affect their ability to service principal and
interest payment obligations, to meet projected business goals
and to obtain additional financing. The market prices of
lower-rated securities are generally less sensitive to interest
rate changes than higher-rated investments, but more sensitive to
adverse economic or political changes, or individual developments
specific to the issuer. Periods of economic or political
uncertainty and change can be expected to result in volatility of
prices of these securities.
o Market risk. Because the Series invests in fixed-income
securities of U.S. and foreign issuers, it is subject to market
risk. For bonds, market risk generally reflects credit risk and
interest rate risk. Credit risk is the actual or perceived risk
that the issuer of the bond will not pay the interest and
principal payments when due. Bond value typically declines if the
issuer's credit quality deteriorates. Interest rate risk is the
risk that interest rates will rise and the value of bonds,
including those held by the Series, will fall. A broad-based
market drop may also cause a bond's price to fall.
o Prepayment risk. During periods of falling interest rates, there
is the risk that a debt security with a high stated interest rate
will be prepaid before its expected maturity date.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The performance of the Series will vary from year to year. The
Series' performance figures will not reflect the deduction of any charges that
are imposed under a variable annuity contract. Those charges, which are
described in the variable annuity prospectus, will reduce the Series'
performance. As with all mutual funds, the Series' past performance does not
necessarily indicate how it will perform in the future.
Performance for the Series has not been included because the Series had not been
in operation for a full fiscal year as of December 31, 1998.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The Salomon Brothers/JNL High Yield Bond
Series invests a substantial percentage of its total assets in high-yield,
high-risk debt securities, commonly referred to as "junk bonds." In light of the
risks associated with such securities, the sub-adviser takes various factors
into consideration in evaluating the creditworthiness of an issuer. For
corporate debt securities, these typically include the issuer's financial
resources, its sensitivity to economic conditions and trends, the operating
history of the issuer, and the experience and track record of the issuer's
management. For sovereign debt instruments, these typically include the economic
and political conditions within the issuer's country, the issuer's overall and
external debt levels and debt service ratios, the issuer's access to capital
markets and other sources of funding, and the issuer's debt service payment
history. The sub-adviser also reviews the ratings, if any, assigned to the
security by any recognized rating agencies, although the sub-adviser's judgment
as to the quality of a debt security may differ from that suggested by the
rating published by a rating service. The Series' ability to achieve its
investment objectives may be more dependent on the sub-adviser's credit analysis
than would be the case if it invested in higher quality debt securities.
The Series may invest in foreign securities, such as obligations issued or
guaranteed by foreign governmental authorities, debt obligations of
supranational organizations and fixed-income securities of foreign corporate
issues. The Series may invest without limit in zero coupon securities,
pay-in-kind bonds and deferred payment securities, which involve special risk
considerations. The Series may invest in fixed- and floating-rate loans,
including loan participations. The Series may invest up to 10% of its total
assets in either (i) equipment lease or trust certificates and conditional sales
contracts or (ii) limited partnerships interests. The Series may also invest up
to 10% of its total assets in equity securities (other than preferred stock, in
which the Series may invest without limit), typically equity investments
acquired as a result of purchases of fixed-income securities.
The sub-adviser has discretion to select the range of maturities of the
fixed-income securities in which the Series may invest. The sub-adviser
anticipates that, under current market conditions, the Series will have average
portfolio life of 10 to 15 years. However, the average portfolio life may vary
substantially from time to time depending on economic and market conditions.
The Series may use derivative instruments, such as futures contracts, options
and forward currency contracts, and invest in indexed securities for hedging and
risk management. These instruments are subject to transaction costs and certain
risks, such as unanticipated changes in securities prices and global currency
markets.
When the sub-adviser believes that adverse conditions prevail in the markets for
high-yield fixed-income securities that make the Series' investment strategy
inconsistent with the best interests of the Series' shareholders, the Series may
invest its assets without limit in high-quality, short-term money market
instruments. Doing so may reduce the potential for high current income or
appreciation of the Series' portfolio.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the Salomon
Brothers/JNL High Yield Bond Series is Salomon Brothers Asset Management Inc
(SBAM). SBAM was incorporated in 1987, and, together with affiliates in London,
Frankfurt, Tokyo and Hong Kong, SBAM provides a broad range of fixed-income and
equity investment advisory services to various individual and institutional
clients located throughout the world and serves as sub-adviser to various
investment companies.
Peter J. Wilby is primarily responsible for the day-to-day management of the
Series. Mr. Wilby has had primary responsibility for the day-to-day management
of the Series since the inception of the Series. Mr. Wilby, who joined SBAM in
1989, is a Managing Director of Salomon Brothers Inc and SBAM and Senior
Portfolio Manager of SBAM, is responsible for investment company and
institutional portfolios which invest in high-yield non-U.S. and U.S. corporate
debt securities and high-yield foreign sovereign debt securities. From 1984 to
1989, Mr. Wilby was employed by Prudential Capital Management Group (Prudential)
where he served as Director of Prudential's credit research unit and as a
corporate and sovereign credit analyst with Prudential. Mr. Wilby also managed
high-yield bonds and leveraged equities in the mutual funds and institutional
portfolios at Prudential.
<PAGE>
T. Rowe Price/JNL International Equity Investment Series
Investment Objective. The investment objective of the T. Rowe Price/JNL
International Equity Investment Series is long-term growth of capital.
Principal Investment Strategies. The Series seeks to achieve its objective
through a diversified portfolio consisting primarily of common stocks of
established, non-U.S. companies. The Series normally has at least three
countries represented in its portfolio, including both developed and emerging
markets.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests in stocks, it is subject
to stock market risk. Stock prices typically fluctuate more than
the values of other types of securities, typically in response to
changes in the particular company's financial condition and
factors affecting the market in general. For example, unfavorable
or unanticipated poor earnings performance of the company may
result in a decline in its stock's price, and a broad-based
market drop may also cause a stock's price to fall.
o Foreign investing risk. Foreign investing involves risks not
typically associated with U.S. investment. These risks include,
among others, adverse fluctuations in foreign currency values as
well as adverse political, social and economic developments
affecting a foreign country. Investments in foreign countries
could be affected by factors not present in the U.S., such as
restrictions on receiving the investment proceeds from a foreign
country, foreign tax laws, and potential difficulties in
enforcing contractual obligations. Transactions in foreign
securities may be subject to less efficient settlement practices,
including extended clearance and settlement periods. Owning
foreign securities could cause the Series' performance to
fluctuate more than if it held only U.S. securities.
o Emerging markets risk. The Series may invest a portion of its
assets in securities of issuers in emerging markets, which
involves greater risk. Emerging market countries typically have
economic and political systems that are less developed, and
likely to be less stable, than those of more advanced countries.
Emerging market countries may have policies that restrict
investment by foreigners, and there is a higher risk of a
government taking private property. Low or nonexistent trading
volume in securities of issuers in emerging markets may result in
a lack of liquidity and in price volatility. Issuers in emerging
markets typically are subject to a greater degree of change in
earnings and business prospects than are companies in developed
markets.
o Currency risk. The value of the Series' shares may change as a
result of changes in exchange rates reducing the value of the
U.S. dollar value of the Series' foreign investments. Currency
exchange rates can be volatile and affected by a number of
factors, such as the general economics of a country, the actions
of U.S. and foreign governments or central banks, the imposition
of currency controls, and speculation.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns since these shares were
first offered and shows how performance has varied from year to year. The table
shows the Series' average annual returns and compares them to the market
indicators listed. Both the chart and the table assume reinvestment of dividends
and distributions. The Series' returns shown in the chart and table below do not
reflect the deduction of any charges that are imposed under a variable annuity
contract. Those charges, which are described in the variable annuity prospectus,
will reduce the Series' performance. As with all mutual funds, the Series' past
performance does not necessarily indicate how it will perform in the future.
Year-By-Year Returns as of December 31
- --------------------------------------
13.91% 2.65% 14.43%
[Insert Chart]
1996 1997 1998
In the periods shown in the chart, the Series' highest quarterly return was
16.55% (4th quarter of 1998) and its lowest quarterly return was -13.48% (3rd
quarter of 1998).
Average Annual Total Returns as of December 31, 1998
----------------------------------------------------
1 year Life of Series*
T. Rowe Price/JNL International
Equity Investment Series 14.43% 10.43%
Morgan Stanley Europe and
Australasia, Far East Equity Index 20.33% 8.13%
The Morgan Stanley Europe and Australasia, Far East Equity Index is a
broad-based, unmanaged index.
* The Series began operations on May 15, 1995.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The T. Rowe Price/JNL International Equity
Investment Series invests in foreign securities that the sub-adviser believes
offer significant potential for long-term appreciation and investment
diversification. In addition to common stocks, the Series may also invest in
other types of securities, such as preferred stocks, convertible securities,
fixed-income securities.
In analyzing companies for investment, the sub-adviser ordinarily looks for one
or more of the following characteristics: an above-average earnings growth per
share; high return on invested capital; healthy balance sheet with relatively
low debt; sound financial and accounting policies and overall financial
strength; strong competitive advantages; effective research and product
development and marketing; efficient service; pricing flexibility; strength of
management; and general operating characteristics which will enable the
companies to compete successfully in their market place. Current dividend income
is not a prerequisite in the selection of portfolio companies. However, the
Series generally invests in companies that have a record of paying dividends,
which the sub-adviser expects will increase in future years as earnings
increase.
The Series may use derivative instruments, such as futures contracts, options
and forward currency contracts, for hedging and risk management. These
instruments are subject to transaction costs and certain risks, such as
unanticipated changes in securities prices and global currency markets.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the T. Rowe
Price/JNL International Equity Investment Series is Rowe Price-Fleming
International, Inc. (Price-Fleming), located at 100 East Pratt Street,
Baltimore, Maryland 21202. Price-Fleming is one of America's largest
international mutual fund asset managers.
There is an investment advisory group that has day-to-day responsibility for
managing the Series and developing and executing the Series' investment program.
The Series' advisory group is composed of the following members: Martin G. Wade,
Vice Chairman and Chief Executive Officer of Price-Fleming, John R. Ford, Chief
Investment Officer of Price-Fleming, James B.M. Seddon, Vice President of
Price-Fleming, Mark C.J. Bickford-Smith, Vice President of Price-Fleming, and
David J.L. Warren, President of Price-Fleming. The Series' advisory group has
had day-to-day responsibility for managing the Series since the inception of the
Series.
Martin Wade joined Price-Fleming in 1979 and has 30 years of experience with the
Fleming Group in research, client service, and investment management. (Fleming
Group includes Robert Fleming and/or Jardine Fleming Group Limited). John Ford
joined Price-Fleming in 1982 and has 19 years of experience with the Fleming
Group in research and portfolio management. James Seddon joined Price-Fleming in
1987 and has 12 years of experience in investment management. Mark
Bickford-Smith joined Price-Fleming in 1995 and has 14 years experience with the
Fleming Group in research and financial analysis. David Warren joined
Price-Fleming in 1983 and has 18 years of experience in equity research,
fixed-income research and portfolio management.
<PAGE>
T. Rowe Price/JNL Mid-Cap Growth Series
Investment Objective. The investment objective of the T. Rowe Price/JNL Mid-Cap
Growth Series is long-term growth of capital.
Principal Investment Strategies. The Series seeks to achieve its objective by
investing primarily in a diversified portfolio of common stock of medium-sized
(mid-cap) U.S. companies which the sub-adviser believes have the potential for
above-average earnings growth. A mid-cap company is one whose market
capitalization, at the time of acquisition by the Series, falls within the
capitalization range of companies in the S&P MidCap 400 Index.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests in equity securities, it
is subject to stock market risk. Stock prices typically fluctuate
more than the values of other types of securities, typically in
response to changes in the particular company's financial
condition and factors affecting the market in general. For
example, unfavorable or unanticipated poor earnings performance
of the company may result in a decline in its stock's price, and
a broad-based market drop may also cause a stock's price to fall.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns since these shares were
first offered and shows how performance has varied from year to year. The table
shows the Series' average annual returns and compares them to the market
indicators listed. Both the chart and the table assume reinvestment of dividends
and distributions. The Series' returns shown in the chart and table below do not
reflect the deduction of any charges that are imposed under a variable annuity
contract. Those charges, which are described in the variable annuity prospectus,
will reduce the Series' performance. As with all mutual funds, the Series' past
performance does not necessarily indicate how it will perform in the future.
Year-By-Year Returns as of December 31
- --------------------------------------
23.47% 18.21% 21.49%
[Insert Chart]
1996 1997 1998
In the periods shown in the chart, the Series' highest quarterly return was
27.05% (4th quarter of 1998) and its lowest quarterly return was -18.02% (3rd
quarter of 1998).
Average Annual Total Returns as of December 31, 1998
----------------------------------------------------
1 year Life of Series*
T. Rowe Price/JNL Mid-Cap Growth
Series 21.49% 25.62%
S&P MidCap 400 Index 19.09% 23.32%
The S&P MidCap 400 Index is a broad-based, unmanaged index.
* The Series began operations on May 15, 1995.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The T. Rowe Price/JNL Mid-Cap Growth Series
seeks to achieve its objective of long-term growth of capital by investing
primarily in common stocks of U.S. companies with medium-sized market
capitalizations and the potential for above-average growth. The sub-adviser
relies on its proprietary research to identify mid-cap companies with attractive
growth prospects. The Series seeks to invest primarily in companies that: (i)
offer proven products or services; (ii) have a historical record of earnings
growth that is above average, (iii) demonstrate the potential to sustain
earnings growth; (iv) operate in industries experiencing increasing demand;
and/or (v) the sub-adviser believes are undervalued in the marketplace.
The Series will not automatically sell or cease to purchase stock of a company
it already owns just because the company's market cap grows or falls outside the
range of companies in the S&P MidCap 400 Index.
The Series may also invest in securities other than U.S. common stocks,
including foreign securities, convertible securities, and warrants. The Series
may use derivative instruments, such as options and futures contracts, for
hedging purposes and to maintain market exposure. These instruments are subject
to transaction costs and certain risks, such as unanticipated changes in
securities prices.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the T. Rowe
Price/JNL Mid-Cap Growth Series is T. Rowe Price Associates, Inc. (T. Rowe),
located at 100 East Pratt Street, Baltimore, Maryland 21202. T. Rowe was founded
in 1937. T. Rowe and its affiliates provide investment advisory services to
individual and institutional investor accounts.
The Series has an Investment Advisory Committee composed of the following
members: Brian W. Berghuis, Chairman, James A.C. Kennedy, and John F. Wakeman.
The Committee Chairman has day to day responsibility for managing the Series and
works with the Committee in developing and executing the Series' investment
program. Mr. Berghuis, a Managing Director of T. Rowe, has been managing
investments since joining T. Rowe in 1985. The Investment Advisory Committee has
had day-to-day responsibility for managing the Series since the inception of the
Series.
<PAGE>
More About The Investment Objectives and Risks of All Series
The investment objectives of the respective Series are not fundamental and may
be changed by the Trustees without shareholder approval.
Year 2000 and Euro Issues: Apart from the particular risks described above for
each Series, the Trust could be adversely affected if the computer systems used
by the Trust's investment adviser and its other service providers are unable to
process and calculate date-related information because they are not programmed
to distinguish between the year 2000 and the year 1900.
The Trust relies entirely on outside service providers for the processing of its
business. To the extent that a service provider utilizes computers to process
the Trust's business, the smooth operation of the Trust depends on the ability
of those computers to continue to function properly.
The Trust has contacted each of its service providers to ascertain the service
provider's state of readiness for the year 2000. Each of the service providers
has indicated to the Trust that, at this time, it is either year 2000 compliant
or that it has identified its systems which are not currently year 2000
compliant and that it intends to make such systems compliant before December 31,
1999. The Trust intends to continue to monitor the year 2000 status of its
service providers.
Based on the information currently available, the Trust does not anticipate any
material impact on the delivery of services to and by the Trust. However, since
the Trust must rely on the information provided to it by its service providers,
there can be no assurance that the steps taken by the service providers in
preparation for the year 2000 will be sufficient to avoid any adverse impact on
the Trust.
Similarly, the companies and other issuers in which a Series invests could be
adversely affected by year 2000 computer-related problems, and there can be no
assurance that the steps taken, if any, by these issuers will be sufficient to
avoid any adverse impact on the Series.
Also, to the extent that a Series invests in foreign securities, the Series
could be adversely affected by the conversion of certain European currencies
into the Euro. This conversion, which is underway, is scheduled to be completed
in 2002. However, problems with the conversion process and delays could increase
volatility in world capital markets and affect European capital markets in
particular.
<PAGE>
MANAGEMENT OF THE TRUST
Investment Adviser
Under Massachusetts law and the Trust's Declaration of Trust and By-Laws, the
management of the business and affairs of the Trust is the responsibility of the
Trustees.
Jackson National Financial Services, LLC (JNFS), 5901 Executive Drive, Lansing,
Michigan 48911, is the investment adviser to the Trust and provides the Trust
with professional investment supervision and management. Jackson National
Financial Services, Inc. served as investment adviser to the Trust from the
inception of the Trust until July 1, 1998, when it transferred its duties as
investment adviser and its professional staff for investment advisory services
to JNFS.
Management Fee
As compensation for its services, JNFS receives a fee from the Trust computed
separately for each Series, accrued daily and payable monthly. The fee which
JNFS received from each Series for the fiscal year ended December 31, 1998, is
set forth below as an annual percentage of the net assets of the Series. For a
Series which was not in operation for all of 1998, its current management fee
schedule is shown instead. Each JNL/S&P Series will indirectly bear its pro rata
share of fees of the Underlying Series in addition to the fees shown for that
Series.
<TABLE>
<CAPTION>
SERIES SCHEDULE (where applicable) FEES
------ --------------------------- ----
<S> <C> <C>
JNL/Alliance Growth Series................................ $0 to $250 million................. .775%
Over $250 million.................. .70%
JNL/J.P. Morgan International & Emerging Markets Series $0 to $50 million.................. .975%
$50 million to $200 million........ .95%
$200 million to $350 million....... .90%
Over $350 million.................. .85%
JNL/Janus Aggressive Growth Series........................ ................................... .95%
JNL/Janus Global Equities Series.......................... ................................... .99%
JNL/PIMCO Total Return Bond Series........................ all assets......................... .70%
JNL/Putnam Growth Series.................................. ................................... .90%
JNL/Putnam Value Equity Series............................ ................................... .90%
JNL/S&P Conservative Growth Series II..................... $0 to $500 million................. .20%
Over $500 million.................. .15%
JNL/S&P Moderate Growth Series II......................... $0 to $500 million................. .20%
Over $500 million.................. .15%
JNL/S&P Aggressive Growth Series II....................... $0 to $500 million................. .20%
Over $500 million.................. .15%
JNL/S&P Very Aggressive Growth Series II.................. $0 to $500 million................. .20%
Over $500 million.................. .15%
JNL/S&P Equity Growth Series II........................... $0 to $500 million................. .20%
Over $500 million.................. .15%
JNL/S&P Equity Aggressive Growth Series II................ $0 to $500 million................. .20%
Over $500 million.................. .15%
Goldman Sachs/JNL Growth & Income Series.................. $0 to $50 million.................. .925%
$50 million to $200 million........ .90%
$200 million to $350 million....... .85%
Over $350 million.................. .80%
Lazard/JNL Mid Cap Value Series........................... $0 to $150 million................. .975%
$150 million to $300 million....... .925%
Over $300 million.................. .90%
Lazard/JNL Small Cap Value Series......................... $0 to $50 million.................. 1.05%
$50 million to $150 million........ 1.00%
$150 million to $300 million....... .975%
Over $300 million.................. .925%
PPM America/JNL Money Market Series....................... ................................... .60%
Salomon Brothers/JNL Balanced Series...................... $0 to $50 million.................. .80%
$50 million to $150 million........ .75%
Over $150 million.................. .70%
Salomon Brothers/JNL Global Bond Series................... ................................... .85%
Salomon Brothers/JNL High Yield Bond Series............... $0 to $50 million.................. .80%
$50 million to $150 million........ .75%
Over $150 million.................. .70%
T. Rowe Price/JNL International Equity Investment Series.. ................................... 1.08%
T. Rowe Price/JNL Mid-Cap Growth Series................... ................................... .95%
</TABLE>
Sub-Advisory Arrangements
JNFS selects, contracts with and compensates sub-advisers to manage the
investment and reinvestment of the assets of the Series of the Trust. JNFS
monitors the compliance of such sub-advisers with the investment objectives and
related policies of each Series and reviews the performance of such sub-advisers
and reports periodically on such performance to the Trustees of the Trust.
Under the terms of each of the Sub-Advisory Agreements with JNFS, the
sub-adviser manages the investment and reinvestment of the assets of the
assigned Series, subject to the supervision of the Trustees of the Trust. The
sub-adviser formulates a continuous investment program for each such Series
consistent with its investment objectives and policies outlined in this
Prospectus. Each sub-adviser implements such programs by purchases and sales of
securities and regularly reports to JNFS and the Trustees of the Trust with
respect to the implementation of such programs.
As compensation for its services, each sub-adviser receives a fee from JNFS
computed separately for the applicable Series, stated as an annual percentage of
the net assets of such Series. The SAI contains a schedule of the management
fees JNFS currently is obligated to pay the sub-advisers out of the advisory fee
it receives from the Series.
ADMINISTRATIVE FEE
In addition to the investment advisory fee, effective January 1, 1999, each
Series, except the JNL/S&P Series, pays to JNFS an Administrative Fee of .10% of
the average daily net assets of the Series. The JNL/S&P Series do not pay an
Administrative Fee. In return for the fee, JNFS provides or procures all
necessary administrative functions and services for the operation of the Series.
In addition, JNFS, at its own expense, arranges for legal, audit, fund
accounting, custody, printing and mailing, and all other services necessary for
the operation of each Series. Each Series is responsible for trading expenses
including brokerage commissions, interest and taxes, and other non-operating
expenses. Prior to January 1, 1999, each Series paid all of its own operating
expenses.
INVESTMENT IN TRUST SHARES
Shares of the Trust are currently sold to separate accounts (Accounts) of
Jackson National Life Insurance Company, 5901 Executive Drive, Lansing, Michigan
48911, and Jackson National Life Insurance Company of New York, 2900 Westchester
Avenue, Purchase, New York 10577, to fund the benefits under certain variable
annuity contracts (Contracts). An insurance company purchases the shares of the
Series at their net asset value using premiums received on Contracts issued by
the insurance company. There is no sales charge.
Shares of the Series are not available to the general public directly. Some of
the Series are managed by sub-advisers who manage publicly traded mutual funds
having similar names and investment objectives. While some of the Series may be
similar to, and may in fact be modeled after publicly traded mutual funds,
Contract purchasers should understand that the Series are not otherwise directly
related to any publicly traded mutual fund. Consequently, the investment
performance of publicly traded mutual funds and any corresponding Series may
differ substantially.
The net asset value per share of each Series is determined at the close of
regular trading on the New York Stock Exchange (normally 4:00 p.m., Eastern
time) each day that the New York Stock Exchange is open. The net asset value per
share is calculated by adding the value of all securities and other assets of a
Series, deducting its liabilities, and dividing by the number of shares
outstanding. Generally, the value of exchange-listed or -traded securities is
based on their respective market prices, bonds are valued based on prices
provided by an independent pricing service and short-term debt securities are
valued at amortized cost, which approximates market value. A Series may invest
in securities primarily listed on foreign exchanges and that trade on days when
the Series does not price its shares. As a result, a Series' net asset value may
change on days when shareholders are not able to purchase or redeem the Series'
shares.
All investments in the Trust are credited to the shareholder's account in the
form of full and fractional shares of the designated Series (rounded to the
nearest 1/1000 of a share). The Trust does not issue share certificates.
SHARE REDEMPTION
An Account redeems shares to make benefit or withdrawal payments under the terms
of its Contracts. Redemptions are processed on any day on which the Trust is
open for business and are effected at net asset value next determined after the
redemption order, in proper form, is received by the Trust's transfer agent.
The Trust may suspend the right of redemption only under the following unusual
circumstances:
o when the New York Stock Exchange is closed (other than weekends
and holidays) or trading is restricted;
o when an emergency exists, making disposal of portfolio securities
or the valuation of net assets not reasonably practicable; or
o during any period when the SEC has by order permitted a
suspension of redemption for the protection of shareholders.
TAX STATUS
Each Series' policy is to meet the requirements of Subchapter M of the Internal
Revenue Code (Code) necessary to qualify as a regulated investment company. Each
Series intends to distribute all its net investment income and net capital gains
to shareholders and, therefore, will not be required to pay any federal income
taxes.
Each Series is treated as a separate corporation for purposes of the Code.
Therefore, the assets, income, and distributions of each Series are considered
separately for purposes of determining whether or not the Series qualifies as a
regulated investment company.
Because the shareholders of each Series are Accounts, there are no tax
consequences to shareholders of buying, holding, exchanging and selling shares
of the Series. Distributions from the Series are not taxable to those
shareholders. However, owners of Contracts should consult the applicable Account
prospectus for more detailed information on tax issues related to the Contracts.
<PAGE>
FINANCIAL HIGHLIGHTS
The following table provides selected per share data for one share of each
Series. The information does not reflect any charges imposed by an Account
investing in shares of the Series. You should refer to the appropriate Account
prospectus for additional information regarding such charges.
The information for each of the periods shown below has been audited by
PricewaterhouseCoopers LLP, independent accountants, and should be read in
conjunction with the financial statements and notes thereto, together with the
report of PricewaterhouseCoopers LLP thereon, in the Annual Report included in
the Statement of Additional Information.
<PAGE>
JNL SERIES TRUST
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Income from Operations Distributions
-------------------------------- -----------------------------------------
Net realized &
unrealized gains
Net Asset Net on investments From net
value, investment & foreign From net realized gains
beginning income currency investment on investment Return of
Period or Year Ended of period (loss) related items income transactions Capital
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
JNL Aggressive Growth Series
Year ended 12/31/98 $14.53 $(0.06) $8.45 $(0.05) $(0.78) $ -
Year ended 12/31/97 13.38 0.04 1.65 - (0.54) -
Period from 4/1/96 to 12/31/96 13.13 0.05 1.10 (0.05) (0.71) (0.14)
Period from 5/15/95* to 3/31/96 10.00 0.01 3.53 - (0.41) -
- ------------------------------------------------------------------------------------------------------------------------------------
JNL Global Equities Series
Year ended 12/31/98 17.48 0.04 4.66 (0.07) - -
Year ended 12/31/97 15.20 0.07 2.84 - (0.63) -
Period from 4/1/96 to 12/31/96 13.75 0.03 2.72 (0.08) (0.90) (0.32)
Period from 5/15/95* to 3/31/96 10.00 0.10 4.02 - (0.37) -
- ------------------------------------------------------------------------------------------------------------------------------------
JNL/Alliance Growth Series
Period from 3/2/98* to 12/31/98 10.00 (0.01) 3.29 - - -
- ------------------------------------------------------------------------------------------------------------------------------------
JNL/JPM International & Emerging
Markets Series
Period from 3/2/98* to 12/31/98 10.00 0.08 (0.20) (0.06) - -
- ------------------------------------------------------------------------------------------------------------------------------------
JNL/PIMCO Total Return Bond Series
Period from 3/2/98* to 12/31/98 10.00 0.31 0.26 (0.31) (0.10) -
====================================================================================================================================
</TABLE>
* Commencement of operations.
(a) Assumes investment at net asset value at the beginning of the period,
reinvestment of all distributions, and a complete redemption of the
investment at the net asset value at the end of the period. Total return is
not annualized.
(b) Annualized for the periods ended December 31, 1998, 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>
<TABLE>
<CAPTION>
Ratios and Supplemental Data
----------------------------------------------------------
Ratio of Ratio of
Net asset Net assets, expenses to income to
value, end Total Return end of period average net average net Portfolio
Period or Year Ended of period (a) (in thousands) assets (b)(c) assets (b)(c) turnover
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
JNL Aggressive Growth Series
Year ended 12/31/98 $22.09 57.66% $161,842 1.10% (0.35)% 114.51%
Year ended 12/31/97 14.53 12.67% 78,870 1.10% 0.39% 137.26%
Period from 4/1/96 to 12/31/96 13.38 8.72% 29,555 1.09% 0.77% 85.22%
Period from 5/15/95* to 3/31/96 13.13 35.78% 8,527 1.09% 0.27% 163.84%
- ------------------------------------------------------------------------------------------------------------------------------------
JNL Global Equities Series
Year ended 12/31/98 21.11 26.87% 240,385 1.14% 0.13% 81.46%
Year ended 12/31/97 17.48 19.12% 151,050 1.15% 0.33% 97.21%
Period from 4/1/96 to 12/31/96 15.20 19.99% 48,638 1.14% 0.37% 52.02%
Period from 5/15/95* to 3/31/96 13.75 41.51% 16,141 1.15% 0.39% 142.36%
- ------------------------------------------------------------------------------------------------------------------------------------
JNL/Alliance Growth Series
Period from 3/2/98* to 12/31/98 13.28 32.80% 4,573 0.93% (8.00)% 136.69%
- ------------------------------------------------------------------------------------------------------------------------------------
JNL/JPM International & Emerging
Markets Series
Period from 3/2/98* to 12/31/98 9.82 (1.24)% 4,997 1.13% 0.62% 231.88%
- ------------------------------------------------------------------------------------------------------------------------------------
JNL/PIMCO Total Return Bond Series
Period from 3/2/98* to 12/31/98 10.16 5.70% 6,133 0.85% 4.95% 269.16%
====================================================================================================================================
</TABLE>
Ratio information assuming
no expense reimbursement
or fees paid indirectly
------------------------------
expenses to income to
average net average net
Period or Year Ended assets (b) assets (b)
================================================================================
JNL Aggressive Growth Series
Year ended 12/31/98 1.10% (0.35)%
Year ended 12/31/97 1.17% 0.32%
Period from 4/1/96 to 12/31/96 1.40% 0.46%
Period from 5/15/95* to 3/31/96 2.77% (1.41)%
- --------------------------------------------------------------------------------
JNL Global Equities Series
Year ended 12/31/98 1.30% (0.03)%
Year ended 12/31/97 1.37% 0.11%
Period from 4/1/96 to 12/31/96 1.63% (0.12)%
Period from 5/15/95* to 3/31/96 2.25% (0.71)%
- --------------------------------------------------------------------------------
JNL/Alliance Growth Series
Period from 3/2/98* to 12/31/98 2.13% (1.28)%
- --------------------------------------------------------------------------------
JNL/JPM International & Emerging
Markets Series
Period from 3/2/98* to 12/31/98 2.64% (0.90)%
- --------------------------------------------------------------------------------
JNL/PIMCO Total Return Bond Series
Period from 3/2/98* to 12/31/98 1.57% 4.23%
================================================================================
See notes to the financial statements.
<PAGE>
JNL SERIES TRUST
FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
Income from operations Distributions
----------------------------- -------------------------------------------
Net realized &
unrealized gains
Net Asset Net on investments From net
value, investment & foreign From net realized gains
beginning income currency investment on investment Return of
Period or Year ended of period (loss) related items income transactions Capital
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
JNL/Putnam Growth Series
Year ended 12/31/98 $16.99 $(0.01) $5.94 $(0.01) $(0.$3) -
Year ended 12/31/97 14.21 0.04 3.07 (0.02) (0.31) -
Period from 4/1/96 to 12/31/96 12.50 0.04 2.12 (0.05) (0.40) -
Period from 5/15/95* to 3/31/96 10.00 0.01 3.66 - (1.17) -
- ------------------------------------------------------------------------------------------------------------------------------------
JNL/Putnam Value Equity Series
Year ended 12/31/98 16.82 0.16 1.94 (0.16) (0.52) -
Year ended 12/31/97 14.50 0.13 3.03 (0.13) (0.71) -
Period from 4/1/96 to 12/31/96 12.77 0.10 1.97 (0.15) (0.19) -
Period from 5/15/95* to 3/31/96 10.00 0.23 2.86 (0.17) (0.15) -
- ------------------------------------------------------------------------------------------------------------------------------------
Goldman Sachs/JNL Growth & Income Series
Period from 3/2/98* to 12/31/98 10.00 0.07 (1.00) (0.07) - -
- ------------------------------------------------------------------------------------------------------------------------------------
Lazard/JNL Small Cap Value Series
Period from 3/2/98* to 12/31/98 10.00 (0.01) (1.28) - - (0.01)
- ------------------------------------------------------------------------------------------------------------------------------------
Lazard/JNL Mid Cap Value Series
Period from 3/2/98* to 12/31/98 10.00 0.03 (0.79) (0.03) - -
- ------------------------------------------------------------------------------------------------------------------------------------
PPM America/JNL Money Market Series
Year ended 12/31/98 1.00 0.05 - (0.05) - -
Year ended 12/31/97 1.00 0.05 - (0.05) - -
Period from 4/1/96 to 12/31/96 1.00 0.04 - (0.04) - -
Period from 5/15/95* to 3/31/96 1.00 0.04 - (0.04) - -
- ------------------------------------------------------------------------------------------------------------------------------------
Salomon Brothers/JNL Balanced Series
Period from 3/2/98* to 12/31/98 10.00 0.21 0.38 (0.21) - -
- ------------------------------------------------------------------------------------------------------------------------------------
Salomon Brothers/JNL Global Bond Series
Year ended 12/31/98 11.12 0.72 (0.45) (0.72) - -
Year ended 12/31/97 10.63 0.54 0.59 (0.58) (0.05) (0.01)
Period from 4/1/96 to 12/31/96 10.46 0.42 0.70 (0.69) (0.26) -
Period from 5/15/95* to 3/31/96 10.00 0.81 0.24 (0.56) (0.03) -
====================================================================================================================================
</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.
(b) Annualized for the periods ended December 31, 1998, 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>
<TABLE>
<CAPTION>
Ratio and Supplemental Data
------------------------------------------------------------
Ratio of net Ratio of net
operating investment
Net asset Net assets, expenses to income to
value, end Total Return end of period average net average net Portfolio
Period or Year ended of period (a) (in thousands) assets (b) (c) assets (b) (c) turnover
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
JNL/Putnam Growth Series
Year ended 12/31/98 $22.88 34.93% $182,097 1.01% (0.07)% 70.55%
Year ended 12/31/97 16.99 21.88% 83,612 1.05% 0.31% 194.81%
Period from 4/1/96 to 12/31/96 14.21 17.28% 22,804 1.04% 0.94% 184.33%
Period from 5/15/95* to 3/31/96 12.50 37.69% 2,518 0.95% 0.28% 255.03%
- ------------------------------------------------------------------------------------------------------------------------------------
JNL/Putnam Value Equity Series
Year ended 12/31/98 18.24 12.48% 195,936 1.01% 1.06% 77.80%
Year ended 12/31/97 16.82 21.82% 108,565 1.03% 1.43% 112.54%
Period from 4/1/96 to 12/31/96 14.50 16.25% 17,761 0.85% 2.29% 13.71%
Period from 5/15/95* to 3/31/96 12.77 31.14% 3,365 0.87% 2.33% 30.12%
- ------------------------------------------------------------------------------------------------------------------------------------
Goldman Sachs/JNL Growth & Income Series
Period from 3/2/98* to 12/31/98 9.00 (9.31)% 4,311 1.08% 1.01% 129.99%
- ------------------------------------------------------------------------------------------------------------------------------------
Lazard/JNL Small Cap Value Series
Period from 3/2/98* to 12/31/98 8.70 (12.92)% 4,804 1.20% (0.04)% 40.15%
- ------------------------------------------------------------------------------------------------------------------------------------
Lazard/JNL Mid Cap Value Series
Period from 3/2/98* to 12/31/98 9.21 (7.64)% 4,731 1.13% 0.34% 70.72%
- ------------------------------------------------------------------------------------------------------------------------------------
PPM America/JNL Money Market Series
Year ended 12/31/98 1.00 4.99% 56,349 0.74% 4.87% -
Year ended 12/31/97 1.00 5.01% 41,808 0.75% 4.92% -
Period from 4/1/96 to 12/31/96 1.00 3.61% 23,752 0.75% 4.75% -
Period from 5/15/95* to 3/31/96 1.00 4.59% 6,816 0.75% 5.06% -
- ------------------------------------------------------------------------------------------------------------------------------------
Salomon Brothers/JNL Balanced Series
Period from 3/2/98* to 12/31/98 10.38 5.91% 3,297 0.95% 3.49% 128.41%
- ------------------------------------------------------------------------------------------------------------------------------------
Salomon Brothers/JNL Global Bond Series
Year ended 12/31/98 10.67 2.46% 48,167 1.00% 7.05% 261.87%
Year ended 12/31/97 11.12 10.66% 36,725 1.00% 6.83% 134.55%
Period from 4/1/96 to 12/31/96 10.63 10.68% 12,483 0.99% 7.52% 109.85%
Period from 5/15/95* to 3/31/96 10.46 10.74% 6,380 1.00% 9.01% 152.89%
====================================================================================================================================
</TABLE>
Ratio information assuming
no expense reimbursement
or fees paid indirectly
--------------------------------
Ratio of net
Ratio of investment
expenses to income to
average net average net
Period or Year ended assets (b) assets (b)
================================================================================
JNL/Putnam Growth Series
Year ended 12/31/98 1.01% (0.07)%
Year ended 12/31/97 1.05% 0.31%
Period from 4/1/96 to 12/31/96 1.27% 0.71%
Period from 5/15/95* to 3/31/96 5.38% (4.15)%
- --------------------------------------------------------------------------------
JNL/Putnam Value Equity Series
Year ended 12/31/98 1.01% 1.06%
Year ended 12/31/97 1.09% 1.37%
Period from 4/1/96 to 12/31/96 1.53% 1.61%
Period from 5/15/95* to 3/31/96 2.28% 0.91%
- --------------------------------------------------------------------------------
Goldman Sachs/JNL Growth & Income Series
Period from 3/2/98* to 12/31/98 2.16% (0.08)%
- --------------------------------------------------------------------------------
Lazard/JNL Small Cap Value Series
Period from 3/2/98* to 12/31/98 1.89% (0.73)%
- --------------------------------------------------------------------------------
Lazard/JNL Mid Cap Value Series
Period from 3/2/98* to 12/31/98 1.85% (0.38)%
- --------------------------------------------------------------------------------
PPM America/JNL Money Market Series
Year ended 12/31/98 0.75% 4.86%
Year ended 12/31/97 0.76% 4.91%
Period from 4/1/96 to 12/31/96 0.85% 4.65%
Period from 5/15/95* to 3/31/96 1.30% 4.51%
- --------------------------------------------------------------------------------
Salomon Brothers/JNL Balanced Series
Period from 3/2/98* to 12/31/98 2.38% 2.06%
- --------------------------------------------------------------------------------
Salomon Brothers/JNL Global Bond Series
Year ended 12/31/98 1.01% 7.04%
Year ended 12/31/97 1.07% 6.76%
Period from 4/1/96 to 12/31/96 1.44% 7.07%
Period from 5/15/95* to 3/31/96 2.14% 7.87%
================================================================================
See notes to the financial statement.
<PAGE>
JNL SERIES TRUST
FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
Income from Operations Distributions
----------------------------- ---------------------------------------
Net realized &
unrealized gains
Net Asset Net on investments From net
value, investment & foreign From net realized gains
beginning income currency investment on investment Return of
Period or Year ended of period (loss) related items income transactions Capital
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Salomon Brothers/JNL High Yield Bond Series
Period from 3/2/98* to 12/31/98 $10.00 $0.54 $(0.41) $(0.54) $ - -
- ------------------------------------------------------------------------------------------------------------------------------------
T. Rowe Price/JNL International Equity
Investment Series
Year ended 12/31/98 12.09 0.16 1.58 (0.19) (0.02) -
Year ended 12/31/97 12.08 0.09 0.23 (0.08) (0.23) -
Period from 4/1/96 to 12/31/96 11.25 0.06 0.90 (0.12) (0.01) -
Period from 5/15/95* to 3/31/96 10.00 0.04 1.21 - - -
- ------------------------------------------------------------------------------------------------------------------------------------
T. Rowe Price/JNL Mid-Cap Growth Series
Year ended 12/31/98 17.37 (0.07) 3.80 - (0.67) -
Year ended 12/31/97 14.89 (0.03) 2.74 - (0.23) -
Period from 4/1/96 to 12/31/96 13.43 (0.05) 1.92 (0.05) (0.36) -
Period from 5/15/95* to 3/31/96 10.00 0.06 3.90 - (0.53) -
====================================================================================================================================
</TABLE>
* Commencement of operations.
(a) Assumes investment at net asset value at the beginning of the period,
reinvestment of all distributions, and a complete redemption of the
investment at the net asset value at the end of the period. Total return is
not annualized.
(b) Annualized for the periods ended December 31, 1998, 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>
<TABLE>
<CAPTION>
Ratios and Supplemental Data
----------------------------------------------------------
Net asset Net assets, expenses to income to
value, end Total Return end of period average net average net Portfolio
Period or Year ended of period (a) (in thousands) assets (b)(c) assets (b)(c) turnover
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Salomon Brothers/JNL High Yield Bond Series
Period from 3/2/98* to 12/31/98 $9.59 1.32% $7,388 0.95% 7.80% 37.45%
- ------------------------------------------------------------------------------------------------------------------------------------
T. Rowe Price/JNL International Equity
Investment Series
Year ended 12/31/98 13.62 14.43% 70,927 1.23% 0.88% 16.39%
Year ended 12/31/97 12.09 2.65% 78,685 1.24% 0.74% 18.81%
Period from 4/1/96 to 12/31/96 12.08 8.54% 48,204 1.25% 1.09% 5.93%
Period from 5/15/95* to 3/31/96 11.25 12.50% 24,211 1.25% 0.78% 16.45%
- ------------------------------------------------------------------------------------------------------------------------------------
T. Rowe Price/JNL Mid-Cap Growth Series
Year ended 12/31/98 20.43 21.49% 189,636 1.04% (0.37)% 50.92%
Year ended 12/31/97 17.37 18.21% 127,052 1.06% (0.26)% 41.43%
Period from 4/1/96 to 12/31/96 14.89 13.91% 47,104 1.10% (0.18)% 25.05%
Period from 5/15/95* to 3/31/96 13.43 40.06% 10,545 1.10% 0.82% 66.04%
====================================================================================================================================
</TABLE>
Ratio information assuming
no expense reimbursement
or fees paid indirectly
------------------------------
Ratio of net
Ratio of investment
expenses to income to
average net average net
Period or Year ended assets (b) assets (b)
================================================================================
Salomon Brothers/JNL High Yield Bond Series
Period from 3/2/98* to 12/31/98 1.39% 7.36%
- --------------------------------------------------------------------------------
T. Rowe Price/JNL International Equity
Investment Series
Year ended 12/31/98 1.28% 0.83%
Year ended 12/31/97 1.32% 0.66%
Period from 4/1/96 to 12/31/96 1.29% 1.05%
Period from 5/15/95* to 3/31/96 2.14% (0.11)%
- --------------------------------------------------------------------------------
T. Rowe Price/JNL Mid-Cap Growth Series
Year ended 12/31/98 1.04% (0.37)%
Year ended 12/31/97 1.06% (0.26)%
Period from 4/1/96 to 12/31/96 1.14% (0.22)%
Period from 5/15/95* to 3/31/96 2.10% (0.18)%
================================================================================
See notes to the financial statements.
<PAGE>
JNL SERIES TRUST
FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
Income from operations Distributions
------------------------------ -----------------------------------------
Net realized &
unrealized gains
Net Asset Net on investments From net
value, investment & foreign From net realized gains
beginning income currency investment on investment Return of
Period or Year ended of period (loss) related items income transactions Capital
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
JNL/S&P Conservative Growth Series II
Period from 4/13/98* to 12/31/98 $10.00 $0.23 $(0.69) $ - $ - $ -
- ------------------------------------------------------------------------------------------------------------------------------------
JNL/S&P Moderate Growth Series II
Period from 4/13/98* to 12/31/98 10.00 0.17 0.05 - - -
- ------------------------------------------------------------------------------------------------------------------------------------
JNL/S&P Aggressive Growth Series II
Period from 4/13/98* to 12/31/98 10.00 0.10 (0.05) - - -
- ------------------------------------------------------------------------------------------------------------------------------------
JNL/S&P Very Aggressive Growth Series II
Period from 4/13/98* to 12/31/98 10.00 0.07 0.73 - - -
- ------------------------------------------------------------------------------------------------------------------------------------
JNL/S&P Equity Growth Series II
Period from 4/13/98* to 12/31/98 10.00 0.08 (0.04) - - -
- ------------------------------------------------------------------------------------------------------------------------------------
JNL/S&P Equity Aggressive Growth Series II
Period from 4/13/98* to 12/31/98 10.00 0.07 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.
(b) Annualized for the periods ended December 31, 1998.
(c) Computed after giving effect to the Adviser's expense reimbursement and
fees paid indirectly.
See notes to the financial statements.
<PAGE>
<TABLE>
<CAPTION>
Ratios and Supplemental Data
-----------------------------------------------------------
Ratio of net Ratio of net
operating investment
Net asset Net assets, expenses to income to
value, end Total Return end of period average net average net Portfolio
Period or Year ended of period (a) (in thousands) assets (b) (c) assets (b) (c) turnover
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
JNL/S&P Conservative Growth Series II
Period from 4/13/98* to 12/31/98 $9.54 (4.60)% $1,701 0.20% 2.29% 369.99%
- ------------------------------------------------------------------------------------------------------------------------------------
JNL/S&P Moderate Growth Series II
Period from 4/13/98* to 12/31/98 10.22 2.20% 2,856 0.20% 4.09% 103.28%
- ------------------------------------------------------------------------------------------------------------------------------------
JNL/S&P Aggressive Growth Series II
Period from 4/13/98* to 12/31/98 10.05 0.50% 267 0.20% 2.19% 165.71%
- ------------------------------------------------------------------------------------------------------------------------------------
JNL/S&P Very Aggressive Growth Series II
Period from 4/13/98* to 12/31/98 10.80 8.00% 155 0.20% 0.91% 208.66%
- ------------------------------------------------------------------------------------------------------------------------------------
JNL/S&P Equity Growth Series II
Period from 4/13/98* to 12/31/98 10.04 0.40% 600 0.20% 1.82% 121.14%
- ------------------------------------------------------------------------------------------------------------------------------------
JNL/S&P Equity Aggressive Growth Series II
Period from 4/13/98* to 12/31/98 10.36 3.60% 224 0.20% 1.22% 157.21%
====================================================================================================================================
</TABLE>
Ratio information assuming
no expense reimbursement
or fees paid indirectly
----------------------------------
Ratio of net
Ratio of investment
expenses to income to
average net average net
Period or Year ended assets (b) assets (b)
- --------------------------------------------------------------------------------
JNL/S&P Conservative Growth Series II
Period from 4/13/98* to 12/31/98 - -
- --------------------------------------------------------------------------------
JNL/S&P Moderate Growth Series II
Period from 4/13/98* to 12/31/98 - -
- --------------------------------------------------------------------------------
JNL/S&P Aggressive Growth Series II
Period from 4/13/98* to 12/31/98 - -
- --------------------------------------------------------------------------------
JNL/S&P Very Aggressive Growth Series II
Period from 4/13/98* to 12/31/98 - -
- --------------------------------------------------------------------------------
JNL/S&P Equity Growth Series II
Period from 4/13/98* to 12/31/98 - -
- --------------------------------------------------------------------------------
JNL/S&P Equity Aggressive Growth Series II
Period from 4/13/98* to 12/31/98 - -
- --------------------------------------------------------------------------------
<PAGE>
PROSPECTUS
May 1, 1999
JNL SERIES TRUST
You can find more information about the Trust in:
o The Trust's Statement of Information (SAI) dated May 1, 1999,
which contains further information about the Trust and the Series,
particularly their investment practices and restrictions. The
current SAI is on file with the Securities and Exchange Commission
(SEC) and is incorporated into the Prospectus by reference (which
means the SAI is legally part of the Prospectus).
o The Trust's Annual and Semi-Annual Reports to shareholders, which
show the Series' actual investments and include financial
statements as of the close of the particular annual or semi-annual
period. The Annual Report also discusses the market conditions and
investment strategies that significantly affected each Series'
performance during the year covered by the report.
You can obtain a copy of the current SAI or the most recent Annual or
Semi-Annual Reports without charge, or make other inquiries, by calling (800)
766-4683, or writing the JNL Series Trust Service Center, P.O. Box 378002,
Denver, Colorado 80237-8003.
You can also obtain information about the Trust (including its current SAI and
most recent Annual and Semi-Annual Reports) from the SEC's Internet site
(http://www.sec.gov) and from the SEC's Public Reference Room in Washington,
D.C. You can find out about the operation of the Public Reference Room and
copying charges by calling (800) SEC-0330.
The Trust's SEC file number is: 811-8894
<PAGE>
JNL(R) SERIES TRUST
<PAGE>
PROSPECTUS
May 1, 1999
JNL(R) SERIES TRUST
5901 Executive Drive o Lansing, Michigan 48911
This Prospectus provides you with the basic information you should know before
investing in the JNL Series Trust (Trust).
The shares of the Trust are sold to life insurance company separate accounts to
fund the benefits of variable annuity contracts. The Trust currently offers
shares in the following separate Series, each with its own investment objective.
JNL/Alger Growth Series
JNL/Eagle Core Equity Series
JNL/Eagle SmallCap Equity Series
JNL/Janus Aggressive Growth Series
JNL/Janus Capital Growth Series
JNL/Janus Global Equities Series
JNL/Putnam Growth Series
JNL/Putnam Value Equity Series
PPM America/JNL Balanced Series
PPM America/JNL High Yield Bond Series
PPM America/JNL Money Market Series
Salomon Brothers/JNL Global Bond Series
Salomon Brothers/JNL U.S. Government & Quality Bond Series
T. Rowe Price/JNL Established Growth Series
T. Rowe Price /JNL International Equity Investment Series
T. Rowe Price /JNL Mid-Cap Growth Series
The Securities and Exchange Commission has not approved or disapproved the
Trust's securities, or determined whether this prospectus is accurate or
complete. It is a criminal offense to state otherwise.
"Standard & Poor's(R)", "S&P(R)", "S&P 500(R)", Standard & Poor's 500", "500",
"S&P MidCap 400 Index" and "Standard & Poor's 400 Index" are trademarks of The
McGraw-Hill Companies, Inc.
The Trust's Statement of Additional Information (SAI) contains additional
information about the Trust and the Series.
---------------
<PAGE>
TABLE OF CONTENTS
About the Series of the Trust
Management of the Trust
Administrative Fee
Investment in Trust Shares
Share Redemption
Tax Status
Financial Highlights
<PAGE>
ABOUT THE SERIES OF THE TRUST
JNL/Alger Growth Series
Investment Objective. The investment objective of the JNL/Alger Growth Series is
long-term capital appreciation.
Principal Investment Strategies. The Series seeks to achieve its objective by
investing primarily in a diversified portfolio of equity securities -- common
stock, preferred stock, and securities convertible into or exchangeable for
common stock -- of large, U.S.-traded companies. To provide flexibility to take
advantage of investment opportunities, the Series may hold a portion of its
assets in money market investments and repurchase agreements.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests in U.S.-traded equity
securities, it is subject to stock market risk. Stock prices
typically fluctuate more than the values of other types of
securities, typically in response to changes in the particular
company's financial condition and factors affecting the market in
general. For example, unfavorable or unanticipated poor earnings
performance of the company may result in a decline in its stock's
price, and a broad-based market drop may also cause a stock's
price to fall.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns since these shares were
first offered and shows how performance has varied from year to year. The table
shows the Series' average annual returns and compares them to the market
indicators listed. Both the chart and the table assume reinvestment of dividends
and distributions. The Series' returns shown in the chart and table below do not
reflect the deduction of any charges that are imposed under a variable annuity
contract. Those charges, which are described in the variable annuity prospectus,
will reduce the Series' performance. As with all mutual funds, the Series' past
performance does not necessarily indicate how it will perform in the future.
Year-By-Year Returns as of December 31
- --------------------------------------
13.41% 26.20% 45.66%
[Insert Chart]
1996 1997 1998
In the periods shown in the chart, the Series' highest quarterly return was
25.65% (4th quarter of 1998) and its lowest quarterly return was -7.37% (3rd
quarter of 1998).
Average Annual Total Returns as of December 31, 1998
----------------------------------------------------
1 year Life of Series*
JNL/Alger Growth Series 45.66% 25.06%
S&P 500 Index 28.58% 28.48%
The S&P 500 Index is a broad-based, unmanaged index.
* The Series began operations on October 16, 1995.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The JNL/Alger Growth Series seeks to
achieve its investment objective of long-term capital appreciation by investing
primarily in equity securities of large companies which trade on U.S. exchanges
or in the U.S. over-the-counter market. The Series considers a large company to
be one that, at the time its securities are acquired by the Series, has a market
capitalization of $1 billion or more. These companies typically have broad
product lines, markets, financial resources and depth of management.
The Series may take a temporary, defensive position by investing up to all of
its assets in debt securities (typically of a high grade), cash equivalents and
repurchase agreements. Taking a defensive position may reduce the potential for
appreciation in the Series' portfolio.
The Series may actively trade securities in seeking to achieve its objective.
Doing so may increase transaction costs, which may reduce performance.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
Sub-Adviser and Portfolio Management. The sub-adviser to the JNL/Alger Growth
Series is Fred Alger Management, Inc. (Alger Management), which is located at 1
World Trade Center, Suite 9333, New York, New York 10048. Alger Management is
generally engaged in the business of rendering investment advisory services to
institutions and, to a lesser extent, individuals and has been so engaged since
1964.
David D. Alger, President and Chief Investment Officer of Alger Management, is
primarily responsible for the day-to-day management of the Series. He has been
employed by Alger Management as Executive Vice President and Director of
Research since 1971, and as President since 1995. He serves as portfolio manager
for other mutual funds and investment accounts managed by Alger Management.
Ronald Tartaro also participates in the management of the Series. Mr. Tartaro
has been employed by Alger Management as a senior research analyst since 1990
and as a Senior Vice President since 1995. Mr. Alger and Mr. Tartaro have had
responsibility for the day-to-day management of the Series since the inception
of the Series.
<PAGE>
JNL/Eagle Core Equity Series
Investment Objective. The investment objective of the JNL/Eagle Core Equity
Series is long-term capital appreciation and, secondarily, current income.
Principal Investment Strategies. The Series seeks to achieve its objective by
investing primarily in a diversified portfolio of common stock of U.S. companies
that meet the criteria for one of three separate equity strategies: the growth
equity strategy, the value equity strategy and the equity income strategy.
o Under the growth equity strategy, the sub-adviser invests in
securities which it believes have sufficient growth potential to
offer above-average, long-term capital appreciation. The
subadviser seeks securities of companies which:
-- have projected earnings growth and return on equity
greater than 15%,
-- are dominant in their industries, and
-- have the ability to create and sustain a competitive
advantage.
o Under the value equity strategy, the sub-adviser invests in
securities which it believes indicate above-average financial
soundness and high intrinsic value relative to price. These
securities or their respective issuers have at least one of the
following characteristics when acquired for the Series:
-- price-to-earnings ratio or price-to-book value ratio of
less than or approximately equal to 75% of the S&P 500,
-- yield that approximates at least half of the average
yield to maturity of the Lehman Brothers Long Treasury
Bond Index (or similar index),
-- per share going concern value that, in the
sub-adviser's judgment, exceeds book value and market
value, or
-- long-term debt equal to or below tangible net worth.
o Under the equity income strategy, the sub-adviser invests in
income-producing securities.
The sub-adviser divides the Series' assets among each of these three strategies,
with about 40% of the assets allocated to each of the growth equity and value
equity strategies and about 20% to the equity income strategy.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests primarily in stocks of
U.S. companies, it is subject to stock market risk. Stock prices
typically fluctuate more than the values of other types of
securities, typically in response to changes in the particular
company's financial condition and factors affecting the market in
general. For example, unfavorable or unanticipated poor earnings
performance of the company may result in a decline in its stock's
price, and a broad-based market drop may also cause a stock's
price to fall.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns since these shares were
first offered and shows how performance has varied from year to year. The table
shows the Series' average annual returns and compares them to the market
indicators listed. Both the chart and the table assume reinvestment of dividends
and distributions. The Series' returns shown in the chart and table below do not
reflect the deduction of any charges that are imposed under a variable annuity
contract. Those charges, which are described in the variable annuity prospectus,
will reduce the Series' performance. As with all mutual funds, the Series' past
performance does not necessarily indicate how it will perform in the future.
Year-By-Year Returns as of December 31
- --------------------------------------
32.35% 16.54%
[Insert Chart]
1997 1998
In the periods shown in the chart, the Series' highest quarterly return was
18.43% (4th quarter of 1998) and its lowest quarterly return was -10.99% (3rd
quarter of 1998).
Average Annual Total Returns as of December 31, 1998
----------------------------------------------------
1 year Life of Series*
JNL/Eagle Core Equity Series 16.54% 24.15%
S&P 500 Index 28.58% 31.30%
The S&P 500 Index is a broad-based, unmanaged index.
* The Series began operations on September 16, 1996.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. Under the growth equity strategy, the
sub-adviser selects common stocks in part based on its opinions regarding the
sustainability of the company's competitive advantage in the marketplace and the
company's management team. The subadviser looks for securities of companies
which have an exceptional management team and which have the potential to
increase market share and drive EPS growth. If a particular stock appreciates to
over 5% of the total assets of the portfolio, the sub-adviser typically will
reduce the position to less than 5%. Generally, the sub-adviser will sell a
stock if its price appreciates to a level that the sub-adviser views as not
sustainable or to purchase stock that the sub-adviser believes presents a better
investment opportunity.
Under the value equity strategy, the sub-adviser screens a universe of over
2,500 companies. From this universe, the sub-adviser makes selections based on
its projections of the company's growth in earnings and dividends, earnings
momentum, and undervaluation based on a dividend discount model. The sub-adviser
develops target prices and value ranges from this analysis and makes portfolio
selection from among the top-rated securities. The sub-adviser will typically
sell a security if the security reaches its target price, negative changes occur
with respect to the issuer or its industry, or there is a significant change in
one or more of the four characteristics applicable to the security's selection.
However, the Series may continue to hold equity securities that no longer meet
the selection criteria but that the sub-adviser deems suitable investments in
view of the Series' investment objective.
Under normal market conditions, the Series invests at least 65% of its assets in
the common stock of U.S. companies and may invest the balance in other
securities, such as common stock of foreign issuers, corporate debt obligations,
U.S. Government securities, preferred stock, convertible stock, warrants and
rights to buy common stock, real estate investment trusts, repurchase agreements
and money market instruments. Investing in foreign securities presents
additional risks, such as those related to currency fluctuations and adverse
political or economic conditions affecting a foreign country. Although the
Series emphasizes investment-grade securities (or unrated securities that the
sub-adviser deems to be of comparable quality), the Series may invest in
non-investment-grade securities. A non-investment grade security may fluctuate
more in value, and present a greater risk of default, than a higher-rated
security.
The Series may also use derivative instruments, such as options, futures
contracts and indexed securities, which are subject to transaction costs and
certain risks, such as unanticipated changes in securities prices.
For temporary defensive purposes during actual or anticipated periods of general
market decline, the Series may invest up to 100% of its assets in high-grade
money market instruments, including U.S. Government securities, and repurchase
agreements secured by such instruments, as well as other high-quality debt
securities. Taking a defensive position may reduce the potential for
appreciation in the Series' portfolio.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the JNL/Eagle Core
Equity Series is Eagle Asset Management, Inc. (Eagle), 880 Carillon Parkway, St.
Petersburg, Florida 33716. Eagle is a wholly owned subsidiary of Raymond James
Financial, Inc. Eagle and its affiliates provide a wide range of financial
services to retail and institutional clients.
In its capacity as sub-adviser, Eagle supervises and manages the investment
portfolio of the Series. Mr. Ashi Parikh, Managing Director and Portfolio
Manager, is responsible for the day-to-day management of the growth equity
strategy. Mr. Parikh joined Eagle in April 1999, after serving as Managing
Director at Banc One Investment Advisers in Columbus, Ohio. Mr. Lou Kirschbaum,
Senior Vice President and Portfolio Manager and Mr. David Blount, Senior Vice
President and Portfolio Manager, as co-managers, are responsible for the
day-to-day management of both the value equity and the equity income strategies.
They assumed responsibility for the value equity strategy in January 1999; they
have been responsible for the equity income strategy since the inception of the
Series. Mr. Kirschbaum has been with Eagle since 1986, and Mr. Blount joined
Eagle in 1993.
<PAGE>
JNL/Eagle SmallCap Equity Series
Investment Objective. The investment objective of the JNL/Eagle SmallCap Equity
Series is long-term capital appreciation.
Principal Investment Strategies. The Series seeks to achieve its objective by
investing primarily in a diversified portfolio of equity securities of domestic
small capitalization companies, i.e., companies which, at the time of purchase,
typically have a market capitalization under $1 billion. The subadviser employs
a bottom-up approach to identify rapidly growing, under-researched small
capitalization companies that appear to be undervalued in relation to their long
term earnings growth rate or asset value. The subadviser generally invests in
companies which have accelerating earnings, reasonable valuations (typically
with a price-to-earnings ratio of no more than 75% of the earnings growth rate),
strong management that participates in the ownership of the company, reasonable
debt, and a high or expanding return on equity. The Series' equity holdings
consist primarily of common stocks, but may also include preferred stocks and
investment grade securities convertible into common stocks and warrants.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests primarily in stocks of
U.S. companies, it is subject to stock market risk. Stock prices
typically fluctuate more than the values of other types of
securities, typically in response to changes in the particular
company's financial condition and factors affecting the market in
general. For example, unfavorable or unanticipated poor earnings
performance of the company may result in a decline in its stock's
price, and a broad-based market drop may also cause a stock's
price to fall.
o Small cap investing. Investing in smaller, newer companies
generally involves greater risks than investing in larger, more
established ones. The companies in which the Series is likely to
invest have limited product lines, markets or financial resources
and may be subject to more abrupt or erratic market movements than
securities of larger, more established companies or the market
averages in general. In addition, many small capitalization
companies may be in the early stages of development. Accordingly,
an investment in the Series may not be appropriate for all
investors.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns since these shares were
first offered and shows how performance has varied from year to year. The table
shows the Series' average annual returns and compares them to the market
indicators listed. Both the chart and the table assume reinvestment of dividends
and distributions. The Series' returns shown in the chart and table below do not
reflect the deduction of any charges that are imposed under a variable annuity
contract. Those charges, which are described in the variable annuity prospectus,
will reduce the Series' performance. As with all mutual funds, the Series' past
performance does not necessarily indicate how it will perform in the future.
Year-By-Year Returns as of December 31
- --------------------------------------
27.64% 1.18%
[Insert Chart]
1997 1998
In the periods shown in the chart, the Series' highest quarterly return was
22.67% (4th quarter of 1998) and its lowest quarterly return was -23.92% (3rd
quarter of 1998).
Average Annual Total Returns as of December 31, 1998
----------------------------------------------------
1 year Life of Series*
JNL/Eagle SmallCap Equity Series 1.18% 19.01%
Russell 2000 Index -2.55% 10.44%
The Russell 2000 Index is a broad-based, unmanaged index.
* The Series began operations on September 16, 1996.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The JNL/Eagle SmallCap Equity Series
invests primarily in the equity securities of small capitalization U.S.
companies. However, it may also invest in American Depositary Receipts of U.S.
traded foreign issuers, U.S. Government securities, repurchase agreements and
other short-term money market instruments.
For temporary, defensive purposes during actual or anticipated periods of
general market decline, the Series may invest up to 100% of its assets in
high-grade money market instruments, including U.S. Government securities, and
repurchase agreements secured by such instruments, as well as other high-quality
debt securities. Taking a defensive position may reduce the potential for
appreciation in the Series' portfolio.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the JNL/Eagle
SmallCap Equity Series is Eagle Asset Management, Inc. (Eagle), 880 Carillon
Parkway, St. Petersburg, Florida 33716. Eagle and its affiliates provide a wide
range of financial services to retail and institutional clients.
Bert L. Boksen, Senior Vice President and Portfolio Manager of Eagle, is
responsible for the day-to-day management of the Series. Mr. Boksen joined Eagle
in April 1995 and has portfolio management responsibilities for its small cap
equity accounts. Prior to joining Eagle, Mr. Boksen was employed for 16 years by
Raymond James & Associates, Inc. in its institutional research and sales
department. While employed by Raymond James & Associates, Inc., Mr. Boksen
served as co-head of Research, Chief Investment Officer and Chairman of the
Raymond James & Associates, Inc. Focus List Committee. Mr. Boksen has had
responsibility for the day-to-day management of the Series since the inception
of the Series.
<PAGE>
JNL/Janus Aggressive Growth Series
Investment Objective. The investment objective of the JNL/Janus Aggressive
Growth Series is long-term growth of capital.
Principal Investment Strategies. The Series seeks to achieve its objective by
investing primarily in a diversified portfolio of common stocks of U.S. and
foreign companies selected for their growth potential. The Series may invest in
companies of any size, from larger, well-established companies to smaller,
emerging growth companies. The Series may invest to a lesser degree in other
types of securities, including preferred stock, warrants, convertible securities
and debt securities.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests in stocks of U.S. and
foreign companies, it is subject to stock market risk. Stock
prices typically fluctuate more than the values of other types of
securities, typically in response to changes in the particular
company's financial condition and factors affecting the market in
general. For example, unfavorable or unanticipated poor earnings
performance of the company may result in a decline in its stock's
price, and a broad-based market drop may also cause a stock's
price to fall. Investing in smaller, newer companies generally
involves greater risks than investing in larger, more established
ones.
For bonds, market risk generally reflects credit risk and interest
rate risk. Credit risk is the actual or perceived risk that the
issuer of the bond will not pay the interest and principal
payments when due. Bond value typically declines if the issuer's
credit quality deteriorates. Interest rate risk is the risk that
interest rates will rise and the value of bonds, including those
held by the Series, will fall. A broad-based market drop may also
cause a bond's price to fall.
o Foreign investing risk. Foreign investing involves risks not
typically associated with U.S. investment. These risks include,
among others, adverse fluctuations in foreign currency values as
well as adverse political, social and economic developments
affecting a foreign country. Investments in foreign countries
could be affected by factors not present in the U.S., such as
restrictions on receiving the investment proceeds from a foreign
country, foreign tax laws, and potential difficulties in enforcing
contractual obligations. Transactions in foreign securities may be
subject to less efficient settlement practices, including extended
clearance and settlement periods. Owning foreign securities could
cause the Series' performance to fluctuate more than if it held
only U.S. securities.
o Currency risk. The value of the Series' shares may change as a
result of changes in exchange rates reducing the value of the U.S.
dollar value of the Series' foreign investments. Currency exchange
rates can be volatile and affected by a number of factors, such as
the general economics of a country, the actions of U.S. and
foreign governments or central banks, the imposition of currency
controls, and speculation.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns since these shares were
first offered and shows how performance has varied from year to year. The table
shows the Series' average annual returns and compares them to the market
indicators listed. Both the chart and the table assume reinvestment of dividends
and distributions. The Series' returns shown in the chart and table below do not
reflect the deduction of any charges that are imposed under a variable annuity
contract. Those charges, which are described in the variable annuity prospectus,
will reduce the Series' performance. As with all mutual funds, the Series' past
performance does not necessarily indicate how it will perform in the future.
Year-By-Year Returns as of December 31
- --------------------------------------
18.95% 12.67% 57.66%
[Insert Chart]
1996 1997 1998
In the periods shown in the chart, the Series' highest quarterly return was
29.79% (4th quarter of 1998) and its lowest quarterly return was -6.56% (3rd
quarter of 1998).
Average Annual Total Returns as of December 31, 1998
----------------------------------------------------
1 year Life of Series*
JNL/Janus Aggressive Growth Series 57.66% 30.36%
S&P 500 Index 28.58% 28.63%
The S&P 500 Index is a broad-based, unmanaged index.
* The Series began operations on May 15, 1995.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The JNL/Janus Aggressive Growth Series
invests primarily in common stocks when the sub-adviser believes that the
relevant market environment favors profitable investing in those securities. The
sub-adviser seeks to identify individual companies with earnings growth
potential that may not be recognized by the market. The sub-adviser selects
securities for their capital growth potential; investment income is not a
consideration. When the sub-adviser believes that market conditions are not
favorable for profitable investing or when the sub-adviser is otherwise unable
to locate favorable investment opportunities, the Series may hedge its
investments to a greater degree and/or increase its position in cash or similar
investments. Doing so may reduce the potential for appreciation in the Series'
portfolio.
The Series may invest in "special situations" from time to time. A special
situation arises when, in the opinion of the sub-adviser, the securities of a
particular issuer will be recognized and appreciate in value due to a specific
development with respect to that issuer. Developments creating special
situations might include, among others, a new product or process, a
technological breakthrough, a management change or other extraordinary corporate
event, or differences in market supply of and demand for the security.
Investment in special situations may carry an additional risk of loss in the
event that the anticipated development does not occur or does not attract the
expected attention. The impact of this strategy on the Series will depend on the
Series' size and the extent of its holdings of special situation issuers
relative to total net assets.
The Series may use derivative instruments, such as futures contracts, options,
and forward currency contracts, for hedging or as a means of enhancing return.
These instruments are subject to transaction costs and certain risks, such as
unanticipated changes in interest rates, securities prices and global currency
markets.
The Series may invest in high-yield, high-risk, fixed-income securities,
commonly known as "junk bonds." These are corporate debt securities rated BBB or
lower by S&P or Baa or lower by Moody's, or unrated securities deemed by the
sub-adviser to be on comparable quality. Lower-rated securities generally
involve a higher risk of default than higher-rated ones.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the JNL/Janus
Aggressive Growth Series is Janus Capital Corporation (Janus Capital), with
principal offices at 100 Fillmore Street, Denver, Colorado 80206. Janus Capital
provides investment advisory services to mutual funds and other institutional
accounts.
Warren B. Lammert, Portfolio Manager of Janus Capital, is responsible for the
day-to-day management of the Series. Mr. Lammert joined Janus Capital in 1987.
He holds a Bachelor of Arts in Economics from Yale University and a Master of
Science in Economic History from the London School of Economics. He is a
Chartered Financial Analyst. Mr. Lammert has had responsibility for the
day-to-day management of the Series since the inception of the Series.
<PAGE>
JNL/Janus Capital Growth Series
Investment Objective. The investment objective of the JNL/Janus Capital Growth
Series is long-term growth of capital in a manner consistent with the
preservation of capital.
Principal Investment Strategies. The Series seeks to achieve its objective
through a non-diversified portfolio consisting primarily of common stock of U.S.
and foreign companies selected for their growth potential. The Series normally
invests a majority of its equity assets in medium-sized companies. The Series
may invest to a lesser degree in other types of securities, including preferred
stock, warrants, convertible securities and debt securities.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests in stocks of U.S. and
foreign companies, it is subject to stock market risk. Stock
prices typically fluctuate more than the values of other types of
securities, typically in response to changes in the particular
company's financial condition and factors affecting the market in
general. For example, unfavorable or unanticipated poor earnings
performance of the company may result in a decline in its stock's
price, and a broad-based market drop may also cause a stock's
price to fall.
For bonds, market risk generally reflects credit risk and interest
rate risk. Credit risk is the actual or perceived risk that the
issuer of the bond will not pay the interest and principal
payments when due. Bond value typically declines if the issuer's
credit quality deteriorates. Interest rate risk is the risk that
interest rates will rise and the value of bonds, including those
held by the Series, will fall. A broad-based market drop may also
cause a bond's price to fall.
o Foreign investing risk. Foreign investing involves risks not
typically associated with U.S. investment. These risks include,
among others, adverse fluctuations in foreign currency values as
well as adverse political, social and economic developments
affecting a foreign country. Investments in foreign countries
could be affected by factors not present in the U.S., such as
restrictions on receiving the investment proceeds from a foreign
country, foreign tax laws, and potential difficulties in enforcing
contractual obligations. Transactions in foreign securities may be
subject to less efficient settlement practices, including extended
clearance and settlement periods. Owning foreign securities could
cause the Series' performance to fluctuate more than if it held
only U.S. securities.
o Currency risk. The value of the Series' shares may change as a
result of changes in exchange rates reducing the value of the U.S.
dollar value of the Series' foreign investments. Currency exchange
rates can be volatile and affected by a number of factors, such as
the general economics of a country, the actions of U.S. and
foreign governments or central banks, the imposition of currency
controls, and speculation.
o Non-diversification. The Series is "non-diversified" as such term
is defined in the Investment Company Act of 1940, as amended,
which means that more than 5%, but not more than 25%, of its total
assets may be invested in securities of any one issuer. Thus, the
Series may hold a smaller number of issuers than if it were
"diversified." With a smaller number of different issuers, the
Series is subject to more risk than another fund holding a larger
number of issuers, since changes in the financial condition or
market status of a single issuer may cause greater fluctuation in
the Series' total return and share price.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns since these shares were
first offered and shows how performance has varied from year to year. The table
shows the Series' average annual returns and compares them to the market
indicators listed. Both the chart and the table assume reinvestment of dividends
and distributions. The Series' returns shown in the chart and table below do not
reflect the deduction of any charges that are imposed under a variable annuity
contract. Those charges, which are described in the variable annuity prospectus,
will reduce the Series' performance. As with all mutual funds, the Series' past
performance does not necessarily indicate how it will perform in the future.
Year-By-Year Returns as of December 31
- --------------------------------------
16.83% 15.01% 35.16%
[Insert Chart]
1996 1997 1998
In the periods shown in the chart, the Series' highest quarterly return was
35.74% (4th quarter of 1998) and its lowest quarterly return was -15.05% (3rd
quarter of 1998).
Average Annual Total Returns as of December 31, 1998
----------------------------------------------------
1 year Life of Series*
JNL/Janus Capital Growth Series 35.16% 27.59%
S&P MidCap 400 Index 19.09% 23.32%
The S&P 400 MidCap Index is a broad-based, unmanaged index.
* The Series began operations on May 15, 1995.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The JNL/Janus Capital Growth Series seeks
to achieve its objective by investing primarily in common stocks selected for
their growth potential and normally invests at least 50% of its equity assets in
medium-sized companies. Medium-sized companies are those whose market
capitalizations fall within the range of companies in the S&P MidCap 400 Index
and are determined at the time their securities are acquired by the Series. The
market capitalizations within the Index will vary, but as of December 31, 1998,
they ranged between approximately $142 million and $73 billion. The sub-adviser
seeks to identify individual companies with earnings growth potential that may
not be recognized by the market. The sub-adviser selects securities for their
capital growth potential; investment income is not a consideration. When the
sub-adviser believes that market conditions are not favorable for profitable
investing or when the sub-adviser is otherwise unable to locate favorable
investment opportunities, the Series may hedge its investments to a greater
degree and/or increase its position in cash or similar investments. Doing so may
reduce the potential for appreciation in the Series' portfolio.
The Series may invest in "special situations" from time to time. A special
situation arises when, in the opinion of the sub-adviser, the securities of a
particular issuer will be recognized and appreciate in value due to a specific
development with respect to that issuer. Developments creating special
situations might include, among others, a new product or process, a
technological breakthrough, a management change or other extraordinary corporate
event, or differences in market supply of and demand for the security.
Investment in special situations may carry an additional risk of loss in the
event that the anticipated development does not occur or does not attract the
expected attention. The impact of this strategy on the Series will depend on the
Series' size and the extent of its holdings of special situation issuers
relative to total net assets.
The Series may use derivative instruments, such as futures contracts, options,
and forward currency contracts, for hedging or as a means of enhancing return.
These instruments are subject to transaction costs and certain risks, such as
unanticipated changes in interest rates, securities prices and global currency
markets.
The Series may invest in high-yield, high-risk, fixed-income securities,
commonly known as "junk bonds." These are corporate debt securities rated BBB or
lower by S&P or Baa or lower by Moody's, or unrated securities deemed by the
sub-adviser to be on comparable quality. Lower-rated securities generally
involve a higher risk of default than higher-rated ones.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the JNL/Janus
Capital Growth Series is Janus Capital Corporation (Janus Capital), with
principal offices at 100 Fillmore Street, Denver, Colorado 80206. Janus Capital
provides investment advisory services to mutual funds and other institutional
accounts.
James P. Goff, Portfolio Manager of Janus Capital, is responsible for the
day-to-day management of the JNL/Janus Capital Growth Series. Mr. Goff joined
Janus Capital in 1988. He holds a Bachelor of Arts in Economics from Yale
University and is a Chartered Financial Analyst. Mr. Goff has had responsibility
for the day-to-day management of the Series since the inception of the Series.
<PAGE>
JNL/Janus Global Equities Series
Investment Objective. The investment objective of the JNL/Janus Global Equities
Series is long-term growth of capital in a manner consistent with the
preservation of capital.
Principal Investment Strategies. The Series seeks to achieve its objective by
investing primarily in a diversified portfolio of common stocks of foreign and
domestic issuers. The Series may invest to a lesser degree in other types of
securities, including preferred stock, warrants, convertible securities, and
debt securities, such as corporate bonds. The Series can invest on a worldwide
basis in companies and other organizations of any size, regardless of country of
organization or place of principal business activity, as well as domestic and
foreign governments, government agencies and other governmental entities. The
Series normally invests in securities of issuers from at least five different
countries, including the United States, although it may invest in fewer than
five countries.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests in stocks of U.S. and
foreign companies, it is subject to stock market risk. Stock
prices typically fluctuate more than the values of other types of
securities, typically in response to changes in the particular
company's financial condition and factors affecting the market in
general. For example, unfavorable or unanticipated poor earnings
performance of the company may result in a decline in its stock's
price, and a broad-based market drop may also cause a stock's
price to fall.
For bonds, market risk generally reflects credit risk and
interest rate risk. Credit risk is the actual or perceived risk
that the issuer of the bond will not pay the interest and
principal payments when due. Bond value typically declines if the
issuer's credit quality deteriorates. Interest rate risk is the
risk that interest rates will rise and the value of bonds,
including those held by the Series, will fall. A broad-based
market drop may also cause a bond's price to fall.
o Foreign investing risk. Foreign investing involves risks not
typically associated with U.S. investment. These risks include,
among others, adverse fluctuations in foreign currency values as
well as adverse political, social and economic developments
affecting a foreign country. Investments in foreign countries
could be affected by factors not present in the U.S., such as
restrictions on receiving the investment proceeds from a foreign
country, foreign tax laws, and potential difficulties in
enforcing contractual obligations. Transactions in foreign
securities may be subject to less efficient settlement practices,
including extended clearance and settlement periods. Owning
foreign securities could cause the Series' performance to
fluctuate more than if it held only U.S. securities. To the
extent that the Series invests in bonds issued by a foreign
government, the Series may have limited legal recourse in the
event of default. Political conditions, especially a country's
willingness to meet the terms of its debt obligations, can create
special risks.
o Currency risk. The value of the Series' shares may change as a
result of changes in exchange rates reducing the value of the
U.S. dollar value of the Series' foreign investments. Currency
exchange rates can be volatile and affected by a number of
factors, such as the general economics of a country, the actions
of U.S. and foreign governments or central banks, the imposition
of currency controls, and speculation.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns since these shares were
first offered and shows how performance has varied from year to year. The table
shows the Series' average annual returns and compares them to the market
indicators listed. Both the chart and the table assume reinvestment of dividends
and distributions. The Series' returns shown in the chart and table below do not
reflect the deduction of any charges that are imposed under a variable annuity
contract. Those charges, which are described in the variable annuity prospectus,
will reduce the Series' performance. As with all mutual funds, the Series' past
performance does not necessarily indicate how it will perform in the future.
Year-By-Year Returns as of December 31
- --------------------------------------
31.36% 19.12% 26.87%
[Insert Chart]
1996 1997 1998
In the periods shown in the chart, the Series' highest quarterly return was
20.52% (4th quarter of 1998) and its lowest quarterly return was -16.93% (3rd
quarter of 1998).
Average Annual Total Returns as of December 31, 1998
----------------------------------------------------
1 year Life of Series*
JNL/Janus Global Equities Series 26.87% 29.59%
Morgan Stanley Capital
International World Index 22.78% 16.53%
The Morgan Stanley Capital International World Index is a broad-based, unmanaged
index.
* The Series began operations on May 15, 1995.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The JNL/Janus Global Equities Series
invests primarily in common stocks of foreign and domestic companies and, to a
lesser degree, other types of securities, such as bonds and other debt
securities. The sub-adviser seeks to identify individual companies with earnings
growth potential that may not be recognized by the market at large. The
sub-adviser selects securities for their capital growth potential; investment
income is not a consideration. When the sub-adviser believes that market
conditions are not favorable for profitable investing or when the sub-adviser is
otherwise unable to locate favorable investment opportunities, the Series may
hedge its investments to a greater degree and/or increase its position in cash
or similar investments. Doing so may reduce the potential for appreciation in
the Series' portfolio.
The Series may invest in "special situations" from time to time. A special
situation arises when, in the opinion of the sub-adviser, the securities of a
particular issuer will be recognized and appreciate in value due to a specific
development with respect to that issuer. Developments creating special
situations might include, among others, a new product or process, a
technological breakthrough, a management change or other extraordinary corporate
event, or differences in market supply of and demand for the security.
Investments in special situations may carry an additional risk of loss in the
event that the anticipated development does not occur or does not attract the
expected attention. The impact of this strategy on the Series will depend on the
Series' size and the extent of its holdings of special situation issuers
relative to total net assets.
The Series may use derivative instruments, such as futures contracts, options,
and forward currency contracts, for hedging or as a means of enhancing return.
These instruments are subject to transaction costs and certain risks, such as
unanticipated changes in interest rates, securities prices and global currency
markets.
The Series may invest in high-yield, high-risk fixed-income securities, commonly
known as "junk bonds." These are corporate debt securities rated BBB or lower by
S&P or Baa or lower by Moody's, or unrated securities deemed by the sub-adviser
to be of comparable quality. Lower-rated securities generally involve a higher
risk of default, and may fluctuate more in value than higher-rated securities.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the JNL/Janus
Global Equities Series is Janus Capital Corporation (Janus Capital), with
principal offices at 100 Fillmore Street, Denver, Colorado 80206. Janus Capital
provides investment advisory services to mutual funds and other institutional
accounts.
Helen Young Hayes, Portfolio Manager of Janus Capital, is responsible for the
day-to-day management of the Series. Ms. Hayes joined Janus Capital in 1987. She
holds a Bachelor of Arts in Economics from Yale University and is a Chartered
Financial Analyst. Ms. Hayes has had responsibility for the day-to-day
management of the Series since the inception of the Series.
<PAGE>
JNL/Putnam Growth Series
Investment Objective. The investment objective of the JNL/Putnam Growth Series
is long-term capital growth.
Principal Investment Strategies. The Series seeks to achieve its objective by
investing primarily in a diversified portfolio of common stock of domestic,
large-capitalization companies. However, the Series may also invest in preferred
stocks, bonds, convertible preferred stock and convertible debentures if the
sub-adviser believes that they offer the potential for capital appreciation. The
Series may invest a portion of its assets in foreign securities.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests in stocks of U.S. and
foreign companies, it is subject to stock market risk. Stock
prices typically fluctuate more than the values of other types of
securities, typically in response to changes in the particular
company's financial condition and factors affecting the market in
general. For example, unfavorable or unanticipated poor earnings
performance of the company may result in a decline in its stock's
price, and a broad-based market drop may also cause a stock's
price to fall.
For bonds, market risk generally reflects credit risk and interest
rate risk. Credit risk is the actual or perceived risk that the
issuer of the bond will not pay the interest and principal
payments when due. Bond value typically declines if the issuer's
credit quality deteriorates. Interest rate risk is the risk that
interest rates will rise and the value of bonds, including those
held by the Series, will fall. A broad-based market drop may also
cause a bond's price to fall.
o Foreign investing risk. Foreign investing involves risks not
typically associated with U.S. investment. These risks include,
among others, adverse fluctuations in foreign currency values as
well as adverse political, social and economic developments
affecting a foreign country. Investments in foreign countries
could be affected by factors not present in the U.S., such as
restrictions on receiving the investment proceeds from a foreign
country, foreign tax laws, and potential difficulties in enforcing
contractual obligations. Transactions in foreign securities may be
subject to less efficient settlement practices, including extended
clearance and settlement periods. Owning foreign securities could
cause the Series' performance to fluctuate more than if it held
only U.S. securities.
o Currency risk. The value of the Series' shares may change as a
result of changes in exchange rates reducing the value of the U.S.
dollar value of the Series' foreign investments. Currency exchange
rates can be volatile and affected by a number of factors, such as
the general economics of a country, the actions of U.S. and
foreign governments or central banks, the imposition of currency
controls, and speculation.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns since these shares were
first offered and shows how performance has varied from year to year. The table
shows the Series' average annual returns and compares them to the market
indicators listed. Both the chart and the table assume reinvestment of dividends
and distributions. The Series' returns shown in the chart and table below do not
reflect the deduction of any charges that are imposed under a variable annuity
contract. Those charges, which are described in the variable annuity prospectus,
will reduce the Series' performance. As with all mutual funds, the Series' past
performance does not necessarily indicate how it will perform in the future.
Year-By-Year Returns as of December 31
- --------------------------------------
26.81% 21.88% 34.93%
[Insert Chart]
1996 1997 1998
In the periods shown in the chart, the Series' highest quarterly return was
24.99% (4th quarter of 1998) and its lowest quarterly return was -12.00% (3rd
quarter of 1998).
Average Annual Total Returns as of December 31, 1998
----------------------------------------------------
1 year Life of Series*
JNL/Putnam Growth Series 34.93% 30.82%
S&P 500 Index 28.58% 28.63%
The S&P 500 Index is a broad-based, unmanaged index.
* The Series began operations on May 15, 1995. Prior to May 1, 1997, the Series
was managed by Phoenix Investment Counsel, Inc.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The JNL/Putnam Growth Series invests
primarily in the equity securities of domestic, large capitalization companies.
However, the Series may invest any amount or proportion of its assets in any
class or type of security believed by the sub-adviser to offer potential for
capital appreciation over both the intermediate and long term.
The Series may use derivative instruments, such as financial futures contracts
and options, for hedging and risk management. These instruments are subject to
transaction costs and certain risks, such as unanticipated changes in interest
rates, securities prices and global currency markets.
For temporary, defensive purposes, when the sub-adviser believes other types of
investments are advantageous on the basis both of risk and protection of capital
values, the Series may invest in fixed-income securities with or without
warrants or conversion features and may retain cash, or invest up to all of its
assets in cash equivalents. Taking a defensive position may reduce the potential
for appreciation of the Series' portfolio.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the JNL/Putnam
Growth Series is Putnam Investment Management, Inc. (Putnam), located at One
Post Office Square, Boston, Massachusetts 02109. Putnam has been managing mutual
funds since 1937.
C. Beth Cotner has responsibility for the day-to-day management of the Series.
Ms. Cotner, Senior Vice President, has been employed as a Senior Portfolio
Manager by Putnam since September 1995. Prior to that, Ms. Cotner was Executive
Vice President of Kemper Financial Services. Ms. Cotner has had responsibility
for the day-to-day management of the Series since May 1, 1997.
<PAGE>
JNL/Putnam Value Equity Series
Investment Objective. The investment objective of the JNL/Putnam Value Equity
Series is capital growth, with income as a secondary objective.
Principal Investment Strategies. The Series seeks to achieve its objectives by
investing primarily in a diversified portfolio of equity securities of domestic,
large-capitalization companies. For this purpose, equity securities include
common stocks, securities convertible into common stock and securities with
common stock characteristics, such as rights and warrants. The Series considers
a large-capitalization company to be one that, at the time its securities are
acquired by the Series, has a market capitalization of $2 billion or greater.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests in the equity securities
of U.S. and foreign companies, it is subject to stock market risk.
Stock prices typically fluctuate more than the values of other
types of securities, typically in response to changes in the
particular company's financial condition and factors affecting the
market in general. For example, unfavorable or unanticipated poor
earnings performance of the company may result in a decline in its
stock's price, and a broad-based market drop may also cause a
stock's price to fall.
o Foreign investing risk. Foreign investing involves risks not
typically associated with U.S. investment. These risks include,
among others, adverse fluctuations in foreign currency values as
well as adverse political, social and economic developments
affecting a foreign country. Investments in foreign countries
could be affected by factors not present in the U.S., such as
restrictions on receiving the investment proceeds from a foreign
country, foreign tax laws, and potential difficulties in enforcing
contractual obligations. Transactions in foreign securities may be
subject to less efficient settlement practices, including extended
clearance and settlement periods. Owning foreign securities could
cause the Series' performance to fluctuate more than if it held
only U.S. securities.
o Currency risk. The value of the Series' shares may change as a
result of changes in exchange rates reducing the value of the U.S.
dollar value of the Series' foreign investments. Currency exchange
rates can be volatile and affected by a number of factors, such as
the general economics of a country, the actions of U.S. and
foreign governments or central banks, the imposition of currency
controls, and speculation.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns since these shares were
first offered and shows how performance has varied from year to year. The table
shows the Series' average annual returns and compares them to the market
indicators listed. Both the chart and the table assume reinvestment of dividends
and distributions. The Series' returns shown in the chart and table below do not
reflect the deduction of any charges that are imposed under a variable annuity
contract. Those charges, which are described in the variable annuity prospectus,
will reduce the Series' performance. As with all mutual funds, the Series' past
performance does not necessarily indicate how it will perform in the future.
Year-By-Year Returns as of December 31
- --------------------------------------
24.33% 21.82% 12.48%
[Insert Chart]
1996 1997 1998
In the periods shown in the chart, the Series' highest quarterly return was
16.64% (4th quarter of 1998) and its lowest quarterly return was -11.03% (3rd
quarter of 1998).
Average Annual Total Returns as of December 31, 1998
----------------------------------------------------
1 year Life of Series*
JNL/Putnam Value Equity Series 12.48% 22.46%
S&P 500 Index 28.58% 28.63%
The S&P 500 Index is a broad-based, unmanaged index.
* The Series began operations on May 15, 1995. Prior to May 1, 1997, the Series
was managed by PPM America, Inc.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The JNL/Putnam Value Equity Series invests
primarily in equity securities of domestic, large-capitalization companies. The
sub-adviser typically selects companies whose stocks have distinctly
above-average dividend yields and market prices that it believes are undervalued
relative to the normal earning power of the company. Under this approach, the
sub-adviser seeks to identify investments where current investor enthusiasm is
low, as reflected in their valuations. The sub-adviser typically reduces the
Series' exposure to a company when its stock price approaches, in the
sub-adviser's judgment, fair valuation.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the JNL/Putnam
Value Equity Series is Putnam Investment Management, Inc. (Putnam), located at
One Post Office Square, Boston, Massachusetts 02109. Putnam has been managing
mutual funds since 1937.
Anthony I. Kreisel a Managing Director of Putnam, has responsibility for the
day-to-day management of the Series. Mr. Kreisel has been an investment
professional at Putnam since 1986. Mr. Kreisel has had responsibility for the
day-to-day management of the Series since May 1, 1997.
<PAGE>
PPM America/JNL Balanced Series
Investment Objective. The investment objective of the PPM America/JNL Balanced
Series is reasonable income, long-term capital growth and preservation of
capital.
Principal Investment Strategies. The Series seeks to achieve its objectives by
investing primarily in a diversified portfolio of common stock and fixed-income
securities of U.S. companies. The Series may invest in any type or class of
security. The anticipated mix of the Series' holdings is approximately 45-75% of
its assets in equities and 25-55% in fixed-income securities.
The Series emphasizes investment-grade, fixed-income securities. However, the
Series may take a modest position in lower- or non-rated fixed-income
securities, and if, in the sub-adviser's opinion, market conditions warrant, may
increase its position in lower- or non-rated securities from time to time.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests in equity securities of
U.S. companies, it is subject to stock market risk. Stock prices
typically fluctuate more than the values of other types of
securities, typically in response to changes in the particular
company's financial condition and factors affecting the market in
general. For example, unfavorable or unanticipated poor earnings
performance of the company may result in a decline in its stock's
price, and a broad-based market drop may also cause a stock's
price to fall.
For bonds, market risk generally reflects credit risk and
interest rate risk. Credit risk is the actual or perceived risk
that the issuer of the bond will not pay the interest and
principal payments when due. Bond value typically declines if the
issuer's credit quality deteriorates. Interest rate risk is the
risk that interest rates will rise and the value of bonds,
including those held by the Series, will fall. A broad-based
market drop may also cause a bond's price to fall.
o High-yield/high-risk bonds. Lower-rated bonds involve a higher
degree of credit risk, which is the risk that the issuer will not
make interest or principal payments when due. In the event of an
unanticipated default, the Series would experience a reduction in
its income, a decline in the market value of the securities so
affected and a decline in the value of its shares. During an
economic downturn or substantial period of rising interest rates,
highly leveraged issuers may experience financial stress which
could adversely affect their ability to service principal and
interest payment obligations, to meet projected business goals
and to obtain additional financing. The market prices of
lower-rated securities are generally less sensitive to interest
rate changes than higher-rated investments, but more sensitive to
adverse economic or political changes, or individual developments
specific to the issuer. Periods of economic or political
uncertainty and change can be expected to result in volatility of
prices of these securities.
o Prepayment risk. During periods of falling interest rates, there
is the risk that a debt security with a high stated interest rate
will be prepaid before its expected maturity date.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns since these shares were
first offered and shows how performance has varied from year to year. The table
shows the Series' average annual returns and compares them to the market
indicators listed. Both the chart and the table assume reinvestment of dividends
and distributions. The Series' returns shown in the chart and table below do not
reflect the deduction of any charges that are imposed under a variable annuity
contract. Those charges, which are described in the variable annuity prospectus,
will reduce the Series' performance. As with all mutual funds, the Series' past
performance does not necessarily indicate how it will perform in the future.
Year-By-Year Returns as of December 31
- --------------------------------------
10.81% 18.43% 10.06%
[Insert Chart]
1996 1997 1998
In the periods shown in the chart, the Series' highest quarterly return was
9.77% (2nd quarter of 1997) and its lowest quarterly return was -5.54% (3rd
quarter of 1998).
Average Annual Total Returns as of December 31, 1998
----------------------------------------------------
1 year Life of Series*
PPM America/JNL Balanced Series 10.06% 15.10%
S&P 500 Index 28.58% 28.63%
Lehman Brothers Bond Index 8.68% 7.93%
Each of the S&P 500 Index and the Lehman Brothers Bond Index is a broad-based,
unmanaged index.
* The Series began operations on May 15, 1995. Prior to May 1, 1997, the Series
was managed by Phoenix Investment Counsel, Inc.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The PPM America/JNL Balanced Series invests
primarily in common stocks and fixed-income securities but may also invest in
securities convertible into common stocks, deferred debt obligations and zero
coupon bonds.
The Series may use derivative instruments, such as options and financial futures
contracts, for hedging purposes. These instruments are subject to transaction
costs and certain risks, such as unanticipated changes in interest rates and
securities prices.
For temporary, defensive purposes, the Series may invest up to all of its assets
in cash equivalents, such as U.S. Government securities and high grade
commercial paper. Taking a defensive position may reduce the potential for
appreciation of the Series' portfolio.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the PPM America/JNL
Balanced Series is PPM America, Inc. (PPM), which is located at 225 West Wacker
Drive, Chicago, Illinois 60606. PPM, an affiliate of the investment adviser to
the Trust, manages assets of Jackson National Life Insurance Company and of
other affiliated companies.
PPM supervises and manages the investment portfolio of the Series and directs
the purchase and sale of the Series' investment securities. PPM utilizes teams
of investment professionals acting together to manage the assets of the Series.
The teams meet regularly to review portfolio holdings and to discuss purchase
and sale activity. The teams adjust holdings in the portfolios as they deem
appropriate in the pursuit of the Series' investment objectives. PPM has
supervised and managed the investment portfolio of the Series since May 1, 1997.
<PAGE>
PPM America/JNL High Yield Bond Series
Investment Objective. The primary investment objective of the PPM America/JNL
High Yield Bond Series is to provide 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.
Principal Investment Strategies. The Series attempts to achieve its objective by
investing substantially in a diversified portfolio of long-term (over 10 years
to maturity) and intermediate-term (3 to 10 years to maturity) fixed-income
securities of U.S. and foreign issuers, with emphasis on higher-yielding,
higher-risk, lower-rated or unrated corporate bonds. These bonds, commonly known
as "junk bonds," are those rated Ba or below by Moody's or BB or below by S&P
or, if unrated, considered by the sub-adviser to be of comparable quality.
In pursuing its secondary investment objective of capital appreciation, the
Series may purchase high-yield bonds that the sub-adviser expects will increase
in value due to improvements in their credit quality or ratings or anticipated
declines in interest rates. In addition, the Series may invest for this purpose
up to 25% of its assets in equity securities, such as common stocks or
securities convertible into or exchangeable for common stock.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o High-yield/high-risk bonds. Lower-rated bonds involve a higher
degree of credit risk, which is the risk that the issuer will not
make interest or principal payments when due. In the event of an
unanticipated default, the Series would experience a reduction in
its income, a decline in the market value of the securities so
affected and a decline in the value of its shares. During an
economic downturn or substantial period of rising interest rates,
highly leveraged issuers may experience financial stress which
could adversely affect their ability to service principal and
interest payment obligations, to meet projected business goals
and to obtain additional financing. The market prices of
lower-rated securities are generally less sensitive to interest
rate changes than higher-rated investments, but more sensitive to
adverse economic or political changes, or individual developments
specific to the issuer. Periods of economic or political
uncertainty and change can be expected to result in volatility of
prices of these securities.
o Market risk. Because the Series invests in the securities of U.S.
and foreign issuers, it is subject to market risk. For bonds,
market risk generally reflects credit risk and interest rate
risk. Credit risk is the actual or perceived risk that the issuer
of the bond will not pay the interest and principal payments when
due. Bond value typically declines if the issuer's credit quality
deteriorates. Interest rate risk is the risk that interest rates
will rise and the value of bonds, including those held by the
Series, will fall. A broad-based market drop may also cause a
bond's price to fall.
To the extent the Series invests in the equity securities of U.S.
and foreign companies, it is subject to stock market risk. Stock
prices typically fluctuate more than the values of other types of
securities, typically in response to changes in the particular
company's financial condition and factors affecting the market in
general. For example, unfavorable or unanticipated poor earnings
performance of the company may result in a decline in its stock's
price, and a broad-based market drop may also cause a stock's
price to fall.
o Prepayment risk. During periods of falling interest rates, there
is the risk that a debt security with a high stated interest rate
will be prepaid before its expected maturity date.
o Foreign investing risk. Foreign investing involves risks not
typically associated with U.S. investment. These risks include,
among others, adverse fluctuations in foreign currency values as
well as adverse political, social and economic developments
affecting a foreign country. Investments in foreign countries
could be affected by factors not present in the U.S., such as
restrictions on receiving the investment proceeds from a foreign
country, foreign tax laws, and potential difficulties in
enforcing contractual obligations. Transactions in foreign
securities may be subject to less efficient settlement practices,
including extended clearance and settlement periods. Owning
foreign securities could cause the Series' performance to
fluctuate more than if it held only U.S. securities. To the
extent that the Series invests in bonds issued by a foreign
government, the Series may have limited legal recourse in the
event of default. Political conditions, especially a country's
willingness to meet the terms of its debt obligations, can create
special risks.
o Currency risk. The value of the Series' shares may change as a
result of changes in exchange rates reducing the value of the
U.S. dollar value of the Series' foreign investments. Currency
exchange rates can be volatile and affected by a number of
factors, such as the general economics of a country, the actions
of U.S. and foreign governments or central banks, the imposition
of currency controls, and speculation.
Treating high current income as its primary investment objective means that the
Series may forego opportunities that would result in capital gains and may
accept prudent risks to capital value, in each case to take advantage of
opportunities for higher current income. In addition, the performance of the
Series depends on the adviser's ability to effectively implement the investment
strategies of the Series.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns since these shares were
first offered and shows how performance has varied from year to year. The table
shows the Series' average annual returns and compares them to the market
indicators listed. Both the chart and the table assume reinvestment of dividends
and distributions. The Series' returns shown in the chart and table below do not
reflect the deduction of any charges that are imposed under a variable annuity
contract. Those charges, which are described in the variable annuity prospectus,
will reduce the Series' performance. As with all mutual funds, the Series' past
performance does not necessarily indicate how it will perform in the future.
Year-By-Year Returns as of December 31
- --------------------------------------
12.90% 15.05% 3.84%
[Insert Chart]
1996 1997 1998
In the periods shown in the chart, the Series' highest quarterly return was
5.71% (3rd quarter of 1997) and its lowest quarterly return was -4.56% (3rd
quarter of 1998).
Average Annual Total Returns as of December 31, 1998
----------------------------------------------------
1 year Life of Series*
PPM America/JNL High Yield Bond Series 3.84% 10.40%
Lehman Brothers High Yield Index 1.88% 9.52%
The Lehman Brothers High Yield Index is a broad-based, unmanaged index.
* The Series began operations on May 15, 1995.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The PPM America/JNL High Yield Bond Series
invests the majority of its assets under normal market conditions in U.S.
corporate bonds of below investment-grade quality and with maturities exceeding
three years. However, the Series will not invest more than 10% of its total
assets in bonds rated C by Moody's or D by S&P (or unrated but considered by the
sub-adviser to be of comparable quality). Lower-rated securities generally
involve a higher risk of default than higher-rated ones.
In addition to investing in securities of foreign issuers, the Series may also
hold a portion of its assets in foreign currencies and enter into forward
currency exchange contracts, currency options, currency and financial futures
contracts, and options on such futures contracts. The Series may enter into
repurchase agreements and firm commitment agreements and may purchase securities
on a when-issued basis. The Series may invest without limit in zero coupon
bonds.
The Series may adopt a temporary defensive position, such as investing up to all
of its assets in cash or cash equivalents, during adverse market, economic or
other circumstances that the sub-adviser believes require immediate action to
avoid losses. In doing so, the Series may not be pursuing its investment
objectives.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the PPM America/JNL
High Yield Bond Series is PPM America, Inc. (PPM), which is located at 225 West
Wacker Drive, Chicago, Illinois 60606. PPM, an affiliate of the investment
adviser to the Trust, manages assets of Jackson National Life Insurance Company
and of other affiliated companies.
PPM supervises and manages the investment portfolio of the Series and directs
the purchase and sale of the Series' investment securities. PPM utilizes teams
of investment professionals acting together to manage the assets of the Series.
The teams meet regularly to review portfolio holdings and to discuss purchase
and sale activity. The teams adjust holdings in the portfolios as they deem
appropriate in the pursuit of the Series' investment objectives. PPM has
supervised and managed the investment portfolio of the Series since inception of
the Series.
<PAGE>
PPM America/JNL Money Market Series
Investment Objective. The investment objective of the PPM America/JNL Money
Market Series is to achieve as high a level of current income as is consistent
with the preservation of capital and maintenance of liquidity by investing in
high quality, short-term money market instruments.
Principal Investment Strategies. The Series invests in high quality, U.S.
dollar-denominated money market instruments that mature in 397 days or less. The
sub-adviser manages the Series to meet the requirements of Rule 2a-7 under the
Investment Company Act of 1940, as amended, including those as to quality,
diversification and maturity. The Series may invest more than 25% of its assets
in the U.S. banking industry.
Principal Risks of Investing in the Series. An investment in the Series is not
insured or guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Although the Series seeks to preserve the value of your
investment at $1.00 per share, you could lose money by investing in the Series.
A variety of factors may influence its investment performance, such as:
o Market risk. Fixed income securities in general are subject to
credit risk and market risk. Credit risk is the actual or
perceived risk that the issuer of the bond will not pay the
interest and principal payments when due. Bond value typically
declines if the issuer's credit quality deteriorates. Market
risk, also known as interest rate risk, is the risk that interest
rates will rise and the value of bonds, including those held by
the Series, will fall. A broad-based market drop may also cause a
bond's price to fall.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns since these shares were
first offered and shows how performance has varied from year to year. The table
shows the Series' average annual returns and compares them to the market
indicators listed. Both the chart and the table assume reinvestment of dividends
and distributions. The Series' returns shown in the chart and table below do not
reflect the deduction of any charges that are imposed under a variable annuity
contract. Those charges, which are described in the variable annuity prospectus,
will reduce the Series' performance. As with all mutual funds, the Series' past
performance does not necessarily indicate how it will perform in the future.
Year-By-Year Returns as of December 31
- --------------------------------------
4.87% 5.01% 4.99%
[Insert Chart]
1996 1997 1998
In the periods shown in the chart, the Series' highest quarterly return was
1.30% (3rd quarter of 1995) and its lowest quarterly return was 1.17% (1st
quarter of 1997).
Average Annual Total Returns as of December 31, 1998
----------------------------------------------------
1 year Life of Series*
PPM America/JNL Money Market Series 4.99% 5.00%
Merrill Lynch Treasury Bill
Index (3 month) 5.23% 5.405%
The 7-day yield of the Series on December 31, 1998, was 4.78%.
The Merrill Lynch Treasury Bill Index is a broad-based unmanaged index.
* The Series began operations on May 15, 1995.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The PPM America/JNL Money Market Series
invests exclusively in the following types of high quality, U.S.
dollar-denominated money market instruments that mature in 397 days or less:
o Obligations issued or guaranteed as to principal and interest by
the U.S. Government, its agencies and instrumentalities;
o Obligations, such as time deposits, certificates of deposit and
bankers acceptances, issued by U.S. banks and savings banks that
are members of the Federal Deposit Insurance Corporation,
including their foreign branches and foreign subsidiaries, and
issued by domestic and foreign branches of foreign banks;
o Corporate obligations, including commercial paper, of domestic
and foreign issuers;
o Obligations issued or guaranteed by one or more foreign
governments or any of their political subdivisions, agencies or
instrumentalities, including obligations of supranational
entities; and
o Repurchase agreements on obligations issued or guaranteed by the
U.S. Government, its agencies or instrumentalities.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the PPM America/JNL
Money Market Series is PPM America, Inc. (PPM), which is located at 225 West
Wacker Drive, Chicago, Illinois 60606. PPM, an affiliate of the investment
adviser to the Trust, manages assets of Jackson National Life Insurance Company
and of other affiliated companies.
PPM supervises and manages the investment portfolio of the Series and directs
the purchase and sale of the Series' investment securities. PPM utilizes teams
of investment professionals acting together to manage the assets of the Series.
The teams meet regularly to review portfolio holdings and to discuss purchase
and sale activity. The teams adjust holdings in the portfolios as they deem
appropriate in the pursuit of the Series' investment objectives. PPM has
supervised and managed the investment portfolio of the Series since inception of
the Series.
<PAGE>
Salomon Brothers/JNL Global Bond Series
Investment Objective. The primary investment objective of the Salomon
Brothers/JNL Global Bond Series is to seek a high level of current income. As a
secondary objective, the Series seeks capital appreciation.
Principal Investment Strategies. The Series seeks to achieve its objective
through a diversified portfolio consisting primarily of fixed income securities
of U.S. and foreign issuers. The sub-adviser invests the Series' assets
primarily by making strategic allocations among: U.S. investment grade bonds;
high-yield bonds; non-U.S. investment grade bonds; and emerging markets debt
securities. The sub-adviser makes these allocations based on its analysis of
current economic and market conditions, and the relative risks and
opportunities, applicable to those types of securities. The sub-adviser may
invest a significant portion of the Series' assets in medium- or lower-quality
securities.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests in fixed-income
securities of U.S. and foreign issuers, it is subject to market
risk. For bonds, market risk generally reflects credit risk and
interest rate risk. Credit risk is the actual or perceived risk
that the issuer of the bond will not pay the interest and
principal payments when due. Bond value typically declines if the
issuer's credit quality deteriorates. Interest rate risk is the
risk that interest rates will rise and the value of bonds,
including those held by the Series, will fall. A broad-based
market drop may also cause a bond's price to fall.
o Prepayment risk. During periods of falling interest rates, there
is the risk that a debt security with a high stated interest rate
will be prepaid before its expected maturity date.
o Foreign investing risk. Foreign investing involves risks not
typically associated with U.S. investment. These risks include,
among others, adverse fluctuations in foreign currency values as
well as adverse political, social and economic developments
affecting a foreign country. Investments in foreign countries
could be affected by factors not present in the U.S., such as
restrictions on receiving the investment proceeds from a foreign
country, foreign tax laws, and potential difficulties in
enforcing contractual obligations. Transactions in foreign
securities may be subject to less efficient settlement practices,
including extended clearance and settlement periods. Owning
foreign securities could cause the Series' performance to
fluctuate more than if it held only U.S. securities. To the
extent that the Series invests in bonds issued by a foreign
government, the Series may have limited legal recourse in the
event of default. Political conditions, especially a country's
willingness to meet the terms of its debt obligations, can create
special risks.
o High-yield/high-risk bonds. Lower rated bonds involve a higher
degree of credit risk, which is the risk that the issuer will not
make interest or principal payments when due. In the event of an
unanticipated default, the Series would experience a reduction in
its income, a decline in the market value of the securities so
affected and a decline in the value of its shares. During an
economic downturn or substantial period of rising interest rates,
highly leveraged issuers may experience financial stress which
could adversely affect their ability to service principal and
interest payment obligations, to meet projected business goals
and to obtain additional financing. The market prices of
lower-rated securities are generally less sensitive to interest
rate changes than higher-rated investments, but more sensitive to
adverse economic or political changes, or individual developments
specific to the issuer. Periods of economic or political
uncertainty and change can be expected to result in volatility of
prices of these securities.
o Currency risk. The value of the Series' shares may change as a
result of changes in exchange rates reducing the value of the
U.S. dollar value of the Series' foreign investments. Currency
exchange rates can be volatile and affected by a number of
factors, such as the general economics of a country, the actions
of U.S. and foreign governments or central banks, the imposition
of currency controls, and speculation.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns since these shares were
first offered and shows how performance has varied from year to year. The table
shows the Series' average annual returns and compares them to the market
indicators listed. Both the chart and the table assume reinvestment of dividends
and distributions. The Series' returns shown in the chart and table below do not
reflect the deduction of any charges that are imposed under a variable annuity
contract. Those charges, which are described in the variable annuity prospectus,
will reduce the Series' performance. As with all mutual funds, the Series' past
performance does not necessarily indicate how it will perform in the future.
Year-By-Year Returns as of December 31
- --------------------------------------
14.39% 10.66% 2.46%
[Insert Chart]
1996 1997 1998
In the periods shown in the chart, the Series' highest quarterly return was
4.86% (2nd quarter of 1997) and its lowest quarterly return was -2.72% (3rd
quarter of 1998).
Average Annual Total Returns As of December 31, 1998
----------------------------------------------------
1 year Life of Series*
Salomon Brothers/JNL Global Bond
Series 2.46% 9.47%
Salomon Smith Barney Broad Investment
Grade Index 8.72% 8.56%
The Salomon Smith Barney Broad Investment Grade Index is a broad-based,
unmanaged index.
* The Series began operations on May 15, 1995.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The Salomon Brothers/JNL Global Bond Series
invests in a globally diverse portfolio of fixed-income investments. The
sub-adviser has broad discretion to invest the Series' assets among certain
segments of the fixed-income market, primarily U.S. investment-grade bonds,
high-yield corporate debt securities, emerging market debt securities and
investment-grade foreign debt securities. These segments include U.S. Government
securities and mortgage- and other asset-backed securities (including
interest-only or principal-only securities), as well as debt obligations issued
or guaranteed by a foreign government or supranational organization.
In determining the assets to invest in each type of security, the sub-adviser
relies in part on quantitative analytical techniques that measure relative risks
and opportunities of each type of security based on current and historical
economic, market, political and technical data for each type of security, as
well as on its own assessment of economic and market conditions both on a global
and local (country) basis. The sub-adviser continuously reviews the allocation
of assets for the Series and makes such adjustments as it deems appropriate.
The sub-adviser has discretion to select the range of maturities of the various
fixed income securities in which the Series invests. The sub-adviser anticipates
that, under current market conditions, the Series' portfolio securities will
have a weighted average life of 6 to 10 years. However, the weighted average
life of the portfolio securities may vary substantially from time to time
depending on economic and market conditions.
The sub-adviser may invest in medium or lower-rated securities. Investments of
this type involve significantly greater risks, including price volatility and
risk of default in the payment of interest and principal, than higher-quality
securities.
When the sub-adviser believes that adverse conditions prevail in the market for
fixed-income securities, the Series may, for temporary defensive purposes,
invest its assets without limit in high-quality, short-term money market
instruments. Doing so may reduce the potential for high current income or
appreciation of the Series' portfolio.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the Salomon
Brothers/JNL Global Bond Series is Salomon Brothers Asset Management Inc (SBAM).
SBAM was incorporated in 1987, and, together with affiliates in London,
Frankfurt, Tokyo and Hong Kong, SBAM provides a broad range of fixed-income and
equity investment advisory services to various individual and institutional
clients located throughout the world and serves as sub-adviser to various
investment companies. SBAM's business offices are located at 7 World Trade
Center, New York, New York 10048.
In connection with SBAM's service as sub-adviser to the Series, SBAM Limited,
whose business address is Victoria Plaza, 111 Buckingham Palace Road, London
SW1W OSB, England, provides certain sub-advisory services to SBAM relating to
currency transactions and investments in non-dollar denominated debt securities
for the benefit of the Series. SBAM Limited is compensated by SBAM at no
additional expense to the Trust.
Peter J. Wilby is primarily responsible for the day-to-day management of the
high-yield and emerging market debt securities portions of the Series. Mr. Wilby
has had primary responsibility for the day-to-day management of the high-yield
and emerging market debt securities portions of the Series since the inception
of the Series. Beth Semmel assists Mr. Wilby in the day-to-day management of the
Series. Mr. Wilby, who joined SBAM in 1989, is a Managing Director of Salomon
Brothers Inc. and SBAM and Senior Portfolio Manager of SBAM, is responsible for
investment company and institutional portfolios which invest in high-yield
non-U.S. and U.S. corporate debt securities and high-yield foreign sovereign
debt securities. From 1984 to 1989, Mr. Wilby was employed by Prudential Capital
Management Group (Prudential) where he served as Director of Prudential's credit
research unit and as a corporate and sovereign credit analyst with Prudential.
Mr. Wilby also managed high-yield bonds and leveraged equities in the mutual
funds and institutional portfolios at Prudential. Ms. Semmel is a Director and
Portfolio Manager of SBAM and a Director of Salomon Brothers Inc. Ms. Semmel
joined SBAM in May of 1993, where she manages high-yield portfolios. Prior to
joining SBAM, Ms. Semmel spent four years as a high-yield bond analyst at Morgan
Stanley Asset Management. Ms. Semmel has assisted in the day-to-day management
of the Series since inception of the Series.
David J. Scott, a Managing Director and Senior Portfolio Manager of SBAM, is
primarily responsible for currency transactions and investments in non-dollar
denominated debt securities for the Series. Prior to joining SBAM Limited in
April 1994, Mr. Scott worked for four years at J.P. Morgan Investment Management
Inc. (J.P. Morgan) where he was responsible for global and non-dollar portfolios
for clients including departments of various governments, pension funds and
insurance companies. Before joining J.P. Morgan, Mr. Scott worked for three
years at Mercury Asset Management where he was responsible for captive insurance
portfolios and products. Mr. Scott has had responsibility for currency
transactions and investment in non-dollar denominated debt securities for the
Series since inception of the Series.
Roger Lavan is primarily responsible for the mortgage-backed securities and U.S.
Government securities portions of the Series. Mr. Lavan joined SBAM in 1990 and
is a Director and Portfolio Manager responsible for investment grade portfolios.
Prior to joining SBAM, Mr. Lavan spent four years analyzing portfolios for
Salomon Brothers Inc.'s Fixed Income Sales Group and Product Support Divisions.
Mr. Lavan has had responsibility for mortgage-backed securities and U.S.
Government securities for the Series since the inception of the Series.
<PAGE>
Salomon Brothers/JNL U.S. Government & Quality Bond Series
Investment Objective. The investment objective of the Salomon Brothers/JNL U.S.
Government & Quality Bond Series is to obtain a high level of current income.
Principal Investment Strategies. The Series seeks to achieve its objective by
investing primarily in a diversified portfolio of 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. The Series may invest in securities of any maturity or
effective duration, so the composition and weighted average maturity of the
portfolio will vary.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests in fixed-income
securities of U.S. and foreign issuers, it is subject to market
risk. For bonds, market risk generally reflects credit risk and
interest rate risk. Credit risk is the actual or perceived risk
that the issuer of the bond will not pay the interest and
principal payments when due. Bond value typically declines if the
issuer's credit quality deteriorates. Interest rate risk is the
risk that interest rates will rise and the value of bonds,
including those held by the Series, will fall. A broad-based
market drop may also cause a bond's price to fall.
o Prepayment risk. During periods of falling interest rates, there
is the risk that a debt security with a high stated interest rate
will be prepaid before its expected maturity date.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns since these shares were
first offered and shows how performance has varied from year to year. The table
shows the Series' average annual returns and compares them to the market
indicators listed. Both the chart and the table assume reinvestment of dividends
and distributions. The Series' returns shown in the chart and table below do not
reflect the deduction of any charges that are imposed under a variable annuity
contract. Those charges, which are described in the variable annuity prospectus,
will reduce the Series' performance. As with all mutual funds, the Series' past
performance does not necessarily indicate how it will perform in the future.
Year-By-Year Returns as of December 31
- --------------------------------------
2.58% 9.16% 9.40%
[Insert Chart]
1996 1997 1998
In the periods shown in the chart, the Series' highest quarterly return was
5.86% (3rd quarter of 1998) and its lowest quarterly return was -2.13% (1st
quarter of 1996).
Average Annual Total Returns as of December 31, 1998
----------------------------------------------------
1 year Life of Series*
Salomon Brothers/JNL U.S.
Government & Quality Bond Series 9.40% 7.71%
Salomon Brothers Treasury Index 10.00% 8.55%
The Salomon Brothers Treasury Index is a broad-based, unmanaged index.
* The Series began operations on May 15, 1995.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The Salomon Brothers/JNL U.S. Government &
Quality Bond Series invests at least 65% of its assets in:
(i) U.S. Treasury obligations;
(ii) obligations issued or guaranteed by agencies or instrumentalities
of the U.S. Government which are backed by their own credit and
may not be backed by the full faith and credit of the U.S.
Government;
(iii)mortgage-backed securities guaranteed by the Government National
Mortgage Association that are supported by the full faith and
credit of the U.S. Government. Such securities entitle the holder
to receive all interest and principal payments due whether or not
payments are actually made on the underlying mortgages;
(iv) mortgage-backed securities guaranteed by agencies or
instrumentalities of the U.S. Government which are supported by
their own credit but not the full faith and credit of the U.S.
Government, such as the Federal Home Loan Mortgage Corporation
and Fannie Mae (formerly, the Federal National Mortgage
Association);
(v) collateralized mortgage obligations issued by private issuers for
which the underlying mortgage-backed securities serving as
collateral are backed by (i) the credit alone of the U.S.
Government agency or instrumentality which issues or guarantees
the mortgage-backed securities, or (ii) the full faith and credit
of the U.S. Government; and
(vi) repurchase agreements collateralized by any of the foregoing.
Any guarantee of the securities in which the Series invests runs only to the
principal and interest payments on the securities and not to the market value of
such securities or to the principal and interest payments on the underlying
mortgages. A security issued or guaranteed by a U.S. Government agency may
significantly fluctuate in value, and the Series may not receive the originally
anticipated yield on the security. Shares of the Series are not insured or
guaranteed by the U.S. Government, its agencies or instrumentalities.
The sub-adviser seeks to add value by actively managing the portfolio's interest
rate exposure, yield curve positioning, sector allocation and security
selection. In selecting mortgage-backed securities for the Series, the
sub-adviser determines a security's average maturity and duration according to
mathematical models that reflect certain payment assumptions and estimates of
future economic factors. These estimates may vary from actual results, and the
average maturity and duration of mortgage-backed derivative securities may not
reflect the price volatility of those securities in certain market conditions.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the Salomon
Brothers/JNL U.S. Government & Quality Bond Series is Salomon Brothers Asset
Management Inc (SBAM). SBAM was incorporated in 1987, and, together with
affiliates in London, Frankfurt, Tokyo and Hong Kong, SBAM provides a broad
range of fixed-income and equity investment advisory services to various
individual and institutional clients located throughout the world and serves as
sub-adviser to various investment companies. SBAM's business offices are located
at 7 World Trade Center, New York, New York 10048.
Roger Lavan is primarily responsible for the day-to-day management of the
Series. Mr. Lavan joined SBAM in 1990 and is a Director and Portfolio Manager
responsible for investment grade portfolios. Prior to joining SBAM, Mr. Lavan
spent four years analyzing portfolios for Salomon Brothers Inc.'s Fixed Income
Sales Group and Product Support Divisions. Mr. Lavan has had primary
responsibility for the day-to-day management of the Series since June 1, 1998.
<PAGE>
T. Rowe Price/JNL Established Growth Series
Investment Objective. The investment objective of the T. Rowe Price/JNL
Established Growth Series is long-term growth of capital and increasing dividend
income.
Principal Investment Strategies. The Series seeks to achieve its objective by
investing primarily in a diversified portfolio of common stocks of
well-established growth companies. A growth company is one which (i) has
demonstrated historical growth of earnings faster than the growth of inflation
and the economy in general, and (ii) has indications of being able to continue
this growth pattern in the future.
While the Series will invest principally in U.S. companies, a substantial
portion of the Series' assets will be invested in foreign stocks.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests primarily in equity
securities, it is subject to stock market risk. Stock prices
typically fluctuate more than the values of other types of
securities, typically in response to changes in the particular
company's financial condition and factors affecting the market in
general. For example, unfavorable or unanticipated poor earnings
performance of the company may result in a decline in its stock's
price, and a broad-based market drop may also cause a stock's
price to fall.
o Foreign investing risk. Foreign investing involves risks not
typically associated with U.S. investment. These risks include,
among others, adverse fluctuations in foreign currency values as
well as adverse political, social and economic developments
affecting a foreign country. Investments in foreign countries
could be affected by factors not present in the U.S., such as
restrictions on receiving the investment proceeds from a foreign
country, foreign tax laws, and potential difficulties in
enforcing contractual obligations. Transactions in foreign
securities may be subject to less efficient settlement practices,
including extended clearance and settlement periods. Owning
foreign securities could cause the Series' performance to
fluctuate more than if it held only U.S. securities.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns since these shares were
first offered and shows how performance has varied from year to year. The table
shows the Series' average annual returns and compares them to the market
indicators listed. Both the chart and the table assume reinvestment of dividends
and distributions. The Series' returns shown in the chart and table below do not
reflect the deduction of any charges that are imposed under a variable annuity
contract. Those charges, which are described in the variable annuity prospectus,
will reduce the Series' performance. As with all mutual funds, the Series' past
performance does not necessarily indicate how it will perform in the future.
Year-By-Year Returns as of December 31
- --------------------------------------
22.59% 29.47% 27.78%
[Insert Chart]
1996 1997 1998
In the periods shown in the chart, the Series' highest quarterly return was
23.36% (4th quarter of 1998) and its lowest quarterly return was -11.63% (3rd
quarter of 1998).
Average Annual Total Returns as of December 31, 1998
----------------------------------------------------
1 year Life of Series*
T. Rowe Price/JNL Established
Growth Series 27.78% 28.14%
S&P 500 Index 28.58% 28.63%
The S&P 500 Index is a broad-based, unmanaged index.
* The Series began operations on May 15, 1995.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The T. Rowe Price/JNL Established Growth
Series invests most of its assets in common stocks of U.S. companies. However,
the Series may invest in other securities, including convertible securities,
warrants, preferred stocks and corporate and government debt obligations.
The Series may use derivative instruments, such as options and futures
contracts, for hedging purposes and to maintain market exposure. These
instruments are subject to transaction costs and certain risks, such as
unanticipated changes in securities prices.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the T. Rowe
Price/JNL Established Growth Series is T. Rowe Price Associates, Inc. (T. Rowe),
located at 100 East Pratt Street, Baltimore, Maryland 21202. T. Rowe was founded
in 1937. T. Rowe and its affiliates provide investment advisory services to
individual and institutional investor accounts.
Robert W. Smith is responsible for the day-to-day management of the Series. Mr.
Smith is a Managing Director and Equity Portfolio Manager for T. Rowe. Mr. Smith
is a Vice President of Price-Fleming and is also responsible for the North
American component of other investment company and institutional client
portfolios. Prior to joining T. Rowe in 1992, Mr. Smith was employed as an
Investment Analyst for Massachusetts Financial Services. He earned a BS (finance
and economics) from the University of Delaware and an MBA (finance) from the
Darden Graduate School of Business Administration, University of Virginia. Mr.
Smith has had responsibility for the day-to-day management of the Series since
February 21, 1997.
<PAGE>
T. Rowe Price/JNL International Equity Investment Series
Investment Objective. The investment objective of the T. Rowe Price/JNL
International Equity Investment Series is long-term growth of capital.
Principal Investment Strategies. The Series seeks to achieve its objective
through a diversified portfolio consisting primarily of common stocks of
established, non-U.S. companies. The Series normally has at least three
countries represented in its portfolio, including both developed and emerging
markets.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests in stocks, it is subject
to stock market risk. Stock prices typically fluctuate more than
the values of other types of securities, typically in response to
changes in the particular company's financial condition and
factors affecting the market in general. For example, unfavorable
or unanticipated poor earnings performance of the company may
result in a decline in its stock's price, and a broad-based
market drop may also cause a stock's price to fall.
o Foreign investing risk. Foreign investing involves risks not
typically associated with U.S. investment. These risks include,
among others, adverse fluctuations in foreign currency values as
well as adverse political, social and economic developments
affecting a foreign country. Investments in foreign countries
could be affected by factors not present in the U.S., such as
restrictions on receiving the investment proceeds from a foreign
country, foreign tax laws, and potential difficulties in
enforcing contractual obligations. Transactions in foreign
securities may be subject to less efficient settlement practices,
including extended clearance and settlement periods. Owning
foreign securities could cause the Series' performance to
fluctuate more than if it held only U.S. securities.
o Emerging markets risk. The Series may invest a portion of its
assets in securities of issuers in emerging markets, which
involves greater risk. Emerging market countries typically have
economic and political systems that are less developed, and
likely to be less stable, than those of more advanced countries.
Emerging market countries may have policies that restrict
investment by foreigners, and there is a higher risk of a
government taking private property. Low or nonexistent trading
volume in securities of issuers in emerging markets may result in
a lack of liquidity and in price volatility. Issuers in emerging
markets typically are subject to a greater degree of change in
earnings and business prospects than are companies in developed
markets.
o Currency risk. The value of the Series' shares may change as a
result of changes in exchange rates reducing the value of the
U.S. dollar value of the Series' foreign investments. Currency
exchange rates can be volatile and affected by a number of
factors, such as the general economics of a country, the actions
of U.S. and foreign governments or central banks, the imposition
of currency controls, and speculation.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns since these shares were
first offered and shows how performance has varied from year to year. The table
shows the Series' average annual returns and compares them to the market
indicators listed. Both the chart and the table assume reinvestment of dividends
and distributions. The Series' returns shown in the chart and table below do not
reflect the deduction of any charges that are imposed under a variable annuity
contract. Those charges, which are described in the variable annuity prospectus,
will reduce the Series' performance. As with all mutual funds, the Series' past
performance does not necessarily indicate how it will perform in the future.
Year-By-Year Returns as of December 31
- --------------------------------------
13.91% 2.65% 14.43%
[Insert Chart]
1996 1997 1998
In the periods shown in the chart, the Series' highest quarterly return was
16.55% (4th quarter of 1998) and its lowest quarterly return was -13.48% (3rd
quarter of 1998).
Average Annual Total Returns as of December 31, 1998
----------------------------------------------------
1 year Life of Series*
T. Rowe Price/JNL International
Equity Investment Series 14.43% 10.43%
Morgan Stanley Europe and
Australasia, Far East Equity Index 20.33% 8.13%
The Morgan Stanley Europe and Australasia, Far East Equity Index is a
broad-based, unmanaged index.
* The Series began operations on May 15, 1995.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The T. Rowe Price/JNL International Equity
Investment Series invests in foreign securities that the sub-adviser believes
offer significant potential for long-term appreciation and investment
diversification. In addition to common stocks, the Series may also invest in
other types of securities, such as preferred stocks, convertible securities,
fixed-income securities.
In analyzing companies for investment, the sub-adviser ordinarily looks for one
or more of the following characteristics: an above-average earnings growth per
share; high return on invested capital; healthy balance sheet with relatively
low debt; sound financial and accounting policies and overall financial
strength; strong competitive advantages; effective research and product
development and marketing; efficient service; pricing flexibility; strength of
management; and general operating characteristics which will enable the
companies to compete successfully in their market place. Current dividend income
is not a prerequisite in the selection of portfolio companies. However, the
Series generally invests in companies that have a record of paying dividends,
which the sub-adviser expects will increase in future years as earnings
increase.
The Series may use derivative instruments, such as futures contracts, options
and forward currency contracts, for hedging and risk management. These
instruments are subject to transaction costs and certain risks, such as
unanticipated changes in securities prices and global currency markets.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the T. Rowe
Price/JNL International Equity Investment Series is Rowe Price-Fleming
International, Inc. (Price-Fleming), located at 100 East Pratt Street,
Baltimore, Maryland 21202. Price-Fleming is one of America's largest
international mutual fund asset managers.
There is an investment advisory group that has day-to-day responsibility for
managing the Series and developing and executing the Series' investment program.
The Series' advisory group is composed of the following members: Martin G. Wade,
Vice Chairman and Chief Executive Officer of Price-Fleming, John R. Ford, Chief
Investment Officer of Price-Fleming, James B.M. Seddon, Vice President of
Price-Fleming, Mark C.J. Bickford-Smith, Vice President of Price-Fleming, and
David J.L. Warren, President of Price-Fleming. The Series' advisory group has
had day-to-day responsibility for managing the Series since the inception of the
Series.
Martin Wade joined Price-Fleming in 1979 and has 30 years of experience with the
Fleming Group in research, client service, and investment management. (Fleming
Group includes Robert Fleming and/or Jardine Fleming Group Limited). John Ford
joined Price-Fleming in 1982 and has 19 years of experience with the Fleming
Group in research and portfolio management. James Seddon joined Price-Fleming in
1987 and has 12 years of experience in investment management. Mark
Bickford-Smith joined Price-Fleming in 1995 and has 14 years experience with the
Fleming Group in research and financial analysis. David Warren joined
Price-Fleming in 1983 and has 18 years of experience in equity research,
fixed-income research and portfolio management.
<PAGE>
T. Rowe Price/JNL Mid-Cap Growth Series
Investment Objective. The investment objective of the T. Rowe Price/JNL Mid-Cap
Growth Series is long-term growth of capital.
Principal Investment Strategies. The Series seeks to achieve its objective by
investing primarily in a diversified portfolio of common stock of medium-sized
(mid-cap) U.S. companies which the sub-adviser believes have the potential for
above-average earnings growth. A mid-cap company is one whose market
capitalization, at the time of acquisition by the Series, falls within the
capitalization range of companies in the S&P MidCap 400 Index.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests in equity securities, it
is subject to stock market risk. Stock prices typically fluctuate
more than the values of other types of securities, typically in
response to changes in the particular company's financial
condition and factors affecting the market in general. For
example, unfavorable or unanticipated poor earnings performance
of the company may result in a decline in its stock's price, and
a broad-based market drop may also cause a stock's price to fall.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns since these shares were
first offered and shows how performance has varied from year to year. The table
shows the Series' average annual returns and compares them to the market
indicators listed. Both the chart and the table assume reinvestment of dividends
and distributions. The Series' returns shown in the chart and table below do not
reflect the deduction of any charges that are imposed under a variable annuity
contract. Those charges, which are described in the variable annuity prospectus,
will reduce the Series' performance. As with all mutual funds, the Series' past
performance does not necessarily indicate how it will perform in the future.
Year-By-Year Returns as of December 31
- --------------------------------------
23.47% 18.21% 21.49%
[Insert Chart]
1996 1997 1998
In the periods shown in the chart, the Series' highest quarterly return was
27.05% (4th quarter of 1998) and its lowest quarterly return was -18.02% (3rd
quarter of 1998).
Average Annual Total Returns as of December 31, 1998
----------------------------------------------------
1 year Life of Series*
T. Rowe Price/JNL Mid-Cap Growth
Series 21.49% 25.62%
S&P MidCap 400 Index 19.09% 23.32%
The S&P MidCap 400 Index is a broad-based, unmanaged index.
* The Series began operations on May 15, 1995.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The T. Rowe Price/JNL Mid-Cap Growth Series
seeks to achieve its objective of long-term growth of capital by investing
primarily in common stocks of U.S. companies with medium-sized market
capitalizations and the potential for above-average growth. The sub-adviser
relies on its proprietary research to identify mid-cap companies with attractive
growth prospects. The Series seeks to invest primarily in companies that: (i)
offer proven products or services; (ii) have a historical record of earnings
growth that is above average, (iii) demonstrate the potential to sustain
earnings growth; (iv) operate in industries experiencing increasing demand;
and/or (v) the sub-adviser believes are undervalued in the marketplace.
The Series will not automatically sell or cease to purchase stock of a company
it already owns just because the company's market cap grows or falls outside the
range of companies in the S&P MidCap 400 Index.
The Series may also invest in securities other than U.S. common stocks,
including foreign securities, convertible securities, and warrants. The Series
may use derivative instruments, such as options and futures contracts, for
hedging purposes and to maintain market exposure. These instruments are subject
to transaction costs and certain risks, such as unanticipated changes in
securities prices.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the T. Rowe
Price/JNL Mid-Cap Growth Series is T. Rowe Price Associates, Inc. (T. Rowe),
located at 100 East Pratt Street, Baltimore, Maryland 21202. T. Rowe was founded
in 1937. T. Rowe and its affiliates provide investment advisory services to
individual and institutional investor accounts.
The Series has an Investment Advisory Committee composed of the following
members: Brian W. Berghuis, Chairman, James A.C. Kennedy, and John F. Wakeman.
The Committee Chairman has day to day responsibility for managing the Series and
works with the Committee in developing and executing the Series' investment
program. Mr. Berghuis, a Managing Director of T. Rowe, has been managing
investments since joining T. Rowe in 1985. The Investment Advisory Committee has
had day-to-day responsibility for managing the Series since the inception of the
Series.
<PAGE>
More About The Investment Objectives and Risks of All Series
The investment objectives of the respective Series are not fundamental and may
be changed by the Trustees without shareholder approval.
Year 2000 and Euro Issues: Apart from the particular risks described above for
each Series, the Trust could be adversely affected if the computer systems used
by the Trust's investment adviser and its other service providers are unable to
process and calculate date-related information because they are not programmed
to distinguish between the year 2000 and the year 1900.
The Trust relies entirely on outside service providers for the processing of its
business. To the extent that a service provider utilizes computers to process
the Trust's business, the smooth operation of the Trust depends on the ability
of those computers to continue to function properly.
The Trust has contacted each of its service providers to ascertain the service
provider's state of readiness for the year 2000. Each of the service providers
has indicated to the Trust that, at this time, it is either year 2000 compliant
or that it has identified its systems which are not currently year 2000
compliant and that it intends to make such systems compliant before December 31,
1999. The Trust intends to continue to monitor the year 2000 status of its
service providers.
Based on the information currently available, the Trust does not anticipate any
material impact on the delivery of services to and by the Trust. However, since
the Trust must rely on the information provided to it by its service providers,
there can be no assurance that the steps taken by the service providers in
preparation for the year 2000 will be sufficient to avoid any adverse impact on
the Trust.
Similarly, the companies and other issuers in which a Series invests could be
adversely affected by year 2000 computer-related problems, and there can be no
assurance that the steps taken, if any, by these issuers will be sufficient to
avoid any adverse impact on the Series.
Also, to the extent that a Series invests in foreign securities, the Series
could be adversely affected by the conversion of certain European currencies
into the Euro. This conversion, which is underway, is scheduled to be completed
in 2002. However, problems with the conversion process and delays could increase
volatility in world capital markets and affect European capital markets in
particular.
<PAGE>
MANAGEMENT OF THE TRUST
Investment Adviser
Under Massachusetts law and the Trust's Declaration of Trust and By-Laws, the
management of the business and affairs of the Trust is the responsibility of the
Trustees.
Jackson National Financial Services, LLC (JNFS), 5901 Executive Drive, Lansing,
Michigan 48911, is the investment adviser to the Trust and provides the Trust
with professional investment supervision and management. Jackson National
Financial Services, Inc. served as investment adviser to the Trust from the
inception of the Trust until July 1, 1998, when it transferred its duties as
investment adviser and its professional staff for investment advisory services
to JNFS.
Management Fee
As compensation for its services, JNFS receives a fee from the Trust computed
separately for each Series, accrued daily and payable monthly. The fee which
JNFS received from each Series for the fiscal year ended December 31, 1998, is
set forth below as an annual percentage of the net assets of the Series. For a
Series which was not in operation for all of 1998, its current management fee
schedule is shown instead.
<TABLE>
<CAPTION>
SERIES SCHEDULE (where applicable) FEES
------ --------------------------- ----
<S> <C> <C>
JNL/Alger Growth Series................................... ....................................... .975%
JNL/Eagle Core Equity Series.............................. ....................................... .90%
JNL/Eagle SmallCap Equity Series.......................... ....................................... .95%
JNL/Janus Aggressive Growth Series........................ ....................................... .95%
JNL/Janus Capital Growth Series........................... ....................................... .95%
JNL/Janus Global Equities Series.......................... ....................................... .99%
JNL/Putnam Growth Series.................................. ....................................... .90%
JNL/Putnam Value Equity Series............................ ....................................... .90%
PPM America/JNL Balanced Series........................... ....................................... .73%
PPM America/JNL High Yield Bond Series.................... ....................................... .73%
PPM America/JNL Money Market Series....................... ....................................... .60%
Salomon Brothers/JNL Global Bond Series................... ....................................... .85%
Salomon Brothers/JNL U.S. Government & Quality Bond Series ....................................... .70%
T. Rowe Price/JNL Established Growth Series............... ....................................... .84%
T. Rowe Price/JNL International Equity Investment Series.. ....................................... 1.08%
T. Rowe Price/JNL Mid-Cap Growth Series................... ....................................... .95%
</TABLE>
Sub-Advisory Arrangements
JNFS selects, contracts with and compensates sub-advisers to manage the
investment and reinvestment of the assets of the Series of the Trust. JNFS
monitors the compliance of such sub-advisers with the investment objectives and
related policies of each Series and reviews the performance of such sub-advisers
and reports periodically on such performance to the Trustees of the Trust.
Under the terms of each of the Sub-Advisory Agreements with JNFS, the
sub-adviser manages the investment and reinvestment of the assets of the
assigned Series, subject to the supervision of the Trustees of the Trust. The
sub-adviser formulates a continuous investment program for each such Series
consistent with its investment objectives and policies outlined in this
Prospectus. Each sub-adviser implements such programs by purchases and sales of
securities and regularly reports to JNFS and the Trustees of the Trust with
respect to the implementation of such programs.
As compensation for its services, each sub-adviser receives a fee from JNFS
computed separately for the applicable Series, stated as an annual percentage of
the net assets of such Series. The SAI contains a schedule of the management
fees JNFS currently is obligated to pay the sub-advisers out of the advisory fee
it receives from the Series.
ADMINISTRATIVE FEE
In addition to the investment advisory fee, effective January 1, 1999, each
Series pays to JNFS an Administrative Fee of .10% of the average daily net
assets of the Series. In return for the fee, JNFS provides or procures all
necessary administrative functions and services for the operation of the Series.
In addition, JNFS, at its own expense, arranges for legal, audit, fund
accounting, custody, printing and mailing, and all other services necessary for
the operation of each Series. Each Series is responsible for trading expenses
including brokerage commissions, interest and taxes, and other non-operating
expenses. Prior to January 1, 1999, each Series paid all of its own operating
expenses.
INVESTMENT IN TRUST SHARES
Shares of the Trust are currently sold to separate accounts (Accounts) of
Jackson National Life Insurance Company, 5901 Executive Drive, Lansing, Michigan
48911, and Jackson National Life Insurance Company of New York, 2900 Westchester
Avenue, Purchase, New York 10577, to fund the benefits under certain variable
annuity contracts (Contracts). An insurance company purchases the shares of the
Series at their net asset value using premiums received on Contracts issued by
the insurance company. There is no sales charge.
Shares of the Series are not available to the general public directly. Some of
the Series are managed by sub-advisers who manage publicly traded mutual funds
having similar names and investment objectives. While some of the Series may be
similar to, and may in fact be modeled after publicly traded mutual funds,
Contract purchasers should understand that the Series are not otherwise directly
related to any publicly traded mutual fund. Consequently, the investment
performance of publicly traded mutual funds and any corresponding Series may
differ substantially.
The net asset value per share of each Series is determined at the close of
regular trading on the New York Stock Exchange (normally 4:00 p.m., Eastern
time) each day that the New York Stock Exchange is open. The net asset value per
share is calculated by adding the value of all securities and other assets of a
Series, deducting its liabilities, and dividing by the number of shares
outstanding. Generally, the value of exchange-listed or -traded securities is
based on their respective market prices, bonds are valued based on prices
provided by an independent pricing service and short-term debt securities are
valued at amortized cost, which approximates market value. A Series may invest
in securities primarily listed on foreign exchanges and that trade on days when
the Series does not price its shares. As a result, a Series' net asset value may
change on days when shareholders are not able to purchase or redeem the Series'
shares.
All investments in the Trust are credited to the shareholder's account in the
form of full and fractional shares of the designated Series (rounded to the
nearest 1/1000 of a share). The Trust does not issue share certificates.
SHARE REDEMPTION
An Account redeems shares to make benefit or withdrawal payments under the terms
of its Contracts. Redemptions are processed on any day on which the Trust is
open for business and are effected at net asset value next determined after the
redemption order, in proper form, is received by the Trust's transfer agent.
The Trust may suspend the right of redemption only under the following unusual
circumstances:
o when the New York Stock Exchange is closed (other than weekends
and holidays) or trading is restricted;
o when an emergency exists, making disposal of portfolio securities
or the valuation of net assets not reasonably practicable; or
o during any period when the SEC has by order permitted a
suspension of redemption for the protection of shareholders.
TAX STATUS
Each Series' policy is to meet the requirements of Subchapter M of the Internal
Revenue Code (Code) necessary to qualify as a regulated investment company. Each
Series intends to distribute all its net investment income and net capital gains
to shareholders and, therefore, will not be required to pay any federal income
taxes.
Each Series is treated as a separate corporation for purposes of the Code.
Therefore, the assets, income, and distributions of each Series are considered
separately for purposes of determining whether or not the Series qualifies as a
regulated investment company.
Because the shareholders of each Series are Accounts, there are no tax
consequences to shareholders of buying, holding, exchanging and selling shares
of the Series. Distributions from the Series are not taxable to those
shareholders. However, owners of Contracts should consult the applicable Account
prospectus for more detailed information on tax issues related to the Contracts.
<PAGE>
FINANCIAL HIGHLIGHTS
The following table provides selected per share data for one share of each
Series. The information does not reflect any charges imposed by an Account
investing in shares of the Series. You should refer to the appropriate Account
prospectus for additional information regarding such charges.
The information for each of the periods shown below has been audited by
PricewaterhouseCoopers LLP, independent accountants, and should be read in
conjunction with the financial statements and notes thereto, together with the
report of PricewaterhouseCoopers LLP thereon, in the Annual Report included in
the Statement of Additional Information.
<PAGE>
JNL SERIES TRUST
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Income from Operations Distributions
-------------------------------- -----------------------------------------
Net realized &
unrealized gains
Net Asset Net on investments From net
value, investment & foreign From net realized gains
beginning income currency investment on investment Return of
Period or Year Ended of period (loss) related items income transactions Capital
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
JNL Aggressive Growth Series
Year ended 12/31/98 $14.53 $(0.06) $8.45 $(0.05) $(0.78) $ -
Year ended 12/31/97 13.38 0.04 1.65 - (0.54) -
Period from 4/1/96 to 12/31/96 13.13 0.05 1.10 (0.05) (0.71) (0.14)
Period from 5/15/95* to 3/31/96 10.00 0.01 3.53 - (0.41) -
- ------------------------------------------------------------------------------------------------------------------------------------
JNL Capital Growth Series
Year ended 12/31/98 16.50 (0.12) 5.92 - (1.57) -
Year ended 12/31/97 14.46 (0.06) 2.23 (0.02) (0.04) (0.07)
Period from 4/1/96 to 12/31/96 13.86 0.06 0.70 - (0.16) -
Period from 5/15/95* to 3/31/96 10.00 - 4.70 - (0.84) -
- ------------------------------------------------------------------------------------------------------------------------------------
JNL Global Equities Series
Year ended 12/31/98 17.48 0.04 4.66 (0.07) - -
Year ended 12/31/97 15.20 0.07 2.84 - (0.63) -
Period from 4/1/96 to 12/31/96 13.75 0.03 2.72 (0.08) (0.90) (0.32)
Period from 5/15/95* to 3/31/96 10.00 0.10 4.02 - (0.37) -
- ------------------------------------------------------------------------------------------------------------------------------------
JNL/Alger Growth Series
Year ended 12/31/98 13.56 - 6.20 - (0.81) -
Year ended 12/31/97 11.16 (0.01) 2.93 - (0.52) -
Period from 4/1/96 to 12/31/96 10.38 - 0.78 - - -
Period from 10/16/95* to 3/31/96 10.00 - 0.38 - - -
- ------------------------------------------------------------------------------------------------------------------------------------
JNL/Eagle Core Equity Series
Year ended 12/31/98 13.75 0.10 2.17 (0.09) (0.02) -
Year ended 12/31/97 10.62 0.08 3.35 (0.08) (0.22) -
Period from 9/16/96* to 12/31/96 10.00 0.03 0.62 (0.03) - -
- ------------------------------------------------------------------------------------------------------------------------------------
JNL/Eagle SmallCap Equity Series
Year ended 12/31/98 14.73 (0.06) 0.23 - (0.08) -
Year ended 12/31/97 11.54 (0.07) 3.26 - - -
Period from 9/16/96* to 12/31/96 10.00 (0.01) 1.55 - - -
====================================================================================================================================
</TABLE>
* Commencement of operations.
(a) Assumes investment at net asset value at the beginning of the period,
reinvestment of all distributions, and a complete redemption of the
investment at the net asset value at the end of the period. Total return is
not annualized.
(b) Annualized for the periods ended December 31, 1998, 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>
<TABLE>
<CAPTION>
Ratios and Supplemental Data
----------------------------------------------------------
Ratio of Ratio of
Net asset Net assets, expenses to income to
value, end Total Return end of period average net average net Portfolio
Period or Year Ended of period (a) (in thousands) assets (b)(c) assets (b)(c) turnover
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
JNL Aggressive Growth Series
Year ended 12/31/98 $22.09 57.66% $161,842 1.10% (0.35)% 114.51%
Year ended 12/31/97 14.53 12.67% 78,870 1.10% 0.39% 137.26%
Period from 4/1/96 to 12/31/96 13.38 8.72% 29,555 1.09% 0.77% 85.22%
Period from 5/15/95* to 3/31/96 13.13 35.78% 8,527 1.09% 0.27% 163.84%
- ------------------------------------------------------------------------------------------------------------------------------------
JNL Capital Growth Series
Year ended 12/31/98 20.73 35.16% 111,037 1.09% (0.68)% 128.95%
Year ended 12/31/97 16.50 15.01% 73,749 1.10% (0.30)% 131.43%
Period from 4/1/96 to 12/31/96 14.46 5.45% 36,946 1.09% 0.91% 115.88%
Period from 5/15/95* to 3/31/96 13.86 47.94% 9,578 1.09% (0.49)% 128.56%
- ------------------------------------------------------------------------------------------------------------------------------------
JNL Global Equities Series
Year ended 12/31/98 21.11 26.87% 240,385 1.14% 0.13% 81.46%
Year ended 12/31/97 17.48 19.12% 151,050 1.15% 0.33% 97.21%
Period from 4/1/96 to 12/31/96 15.20 19.99% 48,638 1.14% 0.37% 52.02%
Period from 5/15/95* to 3/31/96 13.75 41.51% 16,141 1.15% 0.39% 142.36%
- ------------------------------------------------------------------------------------------------------------------------------------
JNL/Alger Growth Series
Year ended 12/31/98 18.95 45.66% 164,948 1.06% (0.02)% 121.39%
Year ended 12/31/97 13.56 26.20% 85,877 1.10% (0.07)% 125.44%
Period from 4/1/96 to 12/31/96 11.16 7.51% 38,252 1.07% (0.02)% 59.92%
Period from 10/16/95* to 3/31/96 10.38 3.80% 8,649 1.03% (0.17)% 50.85%
- ------------------------------------------------------------------------------------------------------------------------------------
JNL/Eagle Core Equity Series
Year ended 12/31/98 15.91 16.54% 37,169 1.05% 1.07% 67.04%
Year ended 12/31/97 13.75 32.35% 11,896 1.05% 1.00% 51.48%
Period from 9/16/96* to 12/31/96 10.62 6.47% 1,954 1.05% 1.10% 1.36%
- ------------------------------------------------------------------------------------------------------------------------------------
JNL/Eagle SmallCap Equity Series
Year ended 12/31/98 14.82 1.18% 34,953 1.10% (0.42)% 51.90%
Year ended 12/31/97 14.73 27.64% 13,493 1.10% (0.54)% 60.78%
Period from 9/16/96* to 12/31/96 11.54 15.40% 1,944 1.10% (0.26)% 28.01%
====================================================================================================================================
</TABLE>
Ratio information assuming
no expense reimbursement
or fees paid indirectly
------------------------------
expenses to income to
average net average net
Period or Year Ended assets (b) assets (b)
================================================================================
JNL Aggressive Growth Series
Year ended 12/31/98 1.10% (0.35)%
Year ended 12/31/97 1.17% 0.32%
Period from 4/1/96 to 12/31/96 1.40% 0.46%
Period from 5/15/95* to 3/31/96 2.77% (1.41)%
- --------------------------------------------------------------------------------
JNL Capital Growth Series
Year ended 12/31/98 1.09% (0.68)%
Year ended 12/31/97 1.11% (0.31)%
Period from 4/1/96 to 12/31/96 1.27% 0.73%
Period from 5/15/95* to 3/31/96 2.08% (1.48)%
- --------------------------------------------------------------------------------
JNL Global Equities Series
Year ended 12/31/98 1.30% (0.03)%
Year ended 12/31/97 1.37% 0.11%
Period from 4/1/96 to 12/31/96 1.63% (0.12)%
Period from 5/15/95* to 3/31/96 2.25% (0.71)%
- --------------------------------------------------------------------------------
JNL/Alger Growth Series
Year ended 12/31/98 1.06% (0.02)%
Year ended 12/31/97 1.10% (0.07)%
Period from 4/1/96 to 12/31/96 1.19% (0.14)%
Period from 10/16/95* to 3/31/96 1.89% (1.03)%
- --------------------------------------------------------------------------------
JNL/Eagle Core Equity Series
Year ended 12/31/98 1.17% 0.95%
Year ended 12/31/97 1.54% 0.51%
Period from 9/16/96* to 12/31/96 4.57% (2.42)%
- --------------------------------------------------------------------------------
JNL/Eagle SmallCap Equity Series
Year ended 12/31/98 1.17% (0.49)%
Year ended 12/31/97 1.51% (0.95)%
Period from 9/16/96* to 12/31/96 4.77% (3.93)%
================================================================================
See notes to the financial statements.
<PAGE>
JNL SERIES TRUST
FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
Income from operations Distributions
----------------------------- -------------------------------------------
Net realized &
unrealized gains
Net Asset Net on investments From net
value, investment & foreign From net realized gains
beginning income currency investment on investment Return of
Period or Year ended of period (loss) related items income transactions Capital
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
JNL/Putnam Growth Series
Year ended 12/31/98 $16.99 $(0.01) $5.94 $(0.01) $(0.$3) -
Year ended 12/31/97 14.21 0.04 3.07 (0.02) (0.31) -
Period from 4/1/96 to 12/31/96 12.50 0.04 2.12 (0.05) (0.40) -
Period from 5/15/95* to 3/31/96 10.00 0.01 3.66 - (1.17) -
- ------------------------------------------------------------------------------------------------------------------------------------
JNL/Putnam Value Equity Series
Year ended 12/31/98 16.82 0.16 1.94 (0.16) (0.52) -
Year ended 12/31/97 14.50 0.13 3.03 (0.13) (0.71) -
Period from 4/1/96 to 12/31/96 12.77 0.10 1.97 (0.15) (0.19) -
Period from 5/15/95* to 3/31/96 10.00 0.23 2.86 (0.17) (0.15) -
- ------------------------------------------------------------------------------------------------------------------------------------
PPM America/JNL Balanced Series
Year ended 12/31/98 13.06 0.47 0.84 (0.47) (0.42) -
Year ended 12/31/97 11.92 0.36 1.83 (0.36) (0.69) -
Period from 4/1/96 to 12/31/96 11.17 0.10 0.98 (0.15) (0.18) -
Period from 5/15/95* to 3/31/96 10.00 0.25 1.40 (0.19) (0.29) -
- ------------------------------------------------------------------------------------------------------------------------------------
PPM America/JNL High Yield Bond Series
Year ended 12/31/98 11.48 0.91 (0.47) (0.91) (0.12) -
Year ended 12/31/97 10.67 0.59 1.02 (0.59) (0.21) -
Period from 4/1/96 to 12/31/96 10.23 0.51 0.64 (0.69) (0.02) -
Period from 5/15/95* to 3/31/96 10.00 0.73 0.04 (0.54) - -
- ------------------------------------------------------------------------------------------------------------------------------------
PPM America/JNL Money Market Series
Year ended 12/31/98 1.00 0.05 - (0.05) - -
Year ended 12/31/97 1.00 0.05 - (0.05) - -
Period from 4/1/96 to 12/31/96 1.00 0.04 - (0.04) - -
Period from 5/15/95* to 3/31/96 1.00 0.04 - (0.04) - -
- ------------------------------------------------------------------------------------------------------------------------------------
Salomon Brothers/JNL Global Bond Series
Year ended 12/31/98 11.12 0.72 (0.45) (0.72) - -
Year ended 12/31/97 10.63 0.54 0.59 (0.58) (0.05) (0.01)
Period from 4/1/96 to 12/31/96 10.46 0.42 0.70 (0.69) (0.26) -
Period from 5/15/95* to 3/31/96 10.00 0.81 0.24 (0.56) (0.03) -
====================================================================================================================================
</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.
(b) Annualized for the periods ended December 31, 1998, 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>
<TABLE>
<CAPTION>
Ratio and Supplemental Data
------------------------------------------------------------
Ratio of net Ratio of net
operating investment
Net asset Net assets, expenses to income to
value, end Total Return end of period average net average net Portfolio
Period or Year ended of period (a) (in thousands) assets (b) (c) assets (b) (c) turnover
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
JNL/Putnam Growth Series
Year ended 12/31/98 $22.88 34.93% $182,097 1.01% (0.07)% 70.55%
Year ended 12/31/97 16.99 21.88% 83,612 1.05% 0.31% 194.81%
Period from 4/1/96 to 12/31/96 14.21 17.28% 22,804 1.04% 0.94% 184.33%
Period from 5/15/95* to 3/31/96 12.50 37.69% 2,518 0.95% 0.28% 255.03%
- ------------------------------------------------------------------------------------------------------------------------------------
JNL/Putnam Value Equity Series
Year ended 12/31/98 18.24 12.48% 195,936 1.01% 1.06% 77.80%
Year ended 12/31/97 16.82 21.82% 108,565 1.03% 1.43% 112.54%
Period from 4/1/96 to 12/31/96 14.50 16.25% 17,761 0.85% 2.29% 13.71%
Period from 5/15/95* to 3/31/96 12.77 31.14% 3,365 0.87% 2.33% 30.12%
- ------------------------------------------------------------------------------------------------------------------------------------
PPM America/JNL Balanced Series
Year ended 12/31/98 13.48 10.06% 95,974 0.85% 3.87% 33.74%
Year ended 12/31/97 13.06 18.43% 59,694 0.93% 3.72% 160.88%
Period from 4/1/96 to 12/31/96 11.92 9.72% 24,419 1.04% 2.39% 158.15%
Period from 5/15/95* to 3/31/96 11.17 16.60% 4,761 1.01% 2.99% 115.84%
- ------------------------------------------------------------------------------------------------------------------------------------
PPM America/JNL High Yield Bond Series
Year ended 12/31/98 10.89 3.84% 101,485 0.83% 8.62% 129.85%
Year ended 12/31/97 11.48 15.05% 62,712 0.90% 8.15% 189.25%
Period from 4/1/96 to 12/31/96 10.67 11.24% 13,396 0.88% 8.64% 113.08%
Period from 5/15/95* to 3/31/96 10.23 7.82% 6,156 0.88% 8.34% 186.21%
- ------------------------------------------------------------------------------------------------------------------------------------
PPM America/JNL Money Market Series
Year ended 12/31/98 1.00 4.99% 56,349 0.74% 4.87% -
Year ended 12/31/97 1.00 5.01% 41,808 0.75% 4.92% -
Period from 4/1/96 to 12/31/96 1.00 3.61% 23,752 0.75% 4.75% -
Period from 5/15/95* to 3/31/96 1.00 4.59% 6,816 0.75% 5.06% -
- ------------------------------------------------------------------------------------------------------------------------------------
Salomon Brothers/JNL Global Bond Series
Year ended 12/31/98 10.67 2.46% 48,167 1.00% 7.05% 261.87%
Year ended 12/31/97 11.12 10.66% 36,725 1.00% 6.83% 134.55%
Period from 4/1/96 to 12/31/96 10.63 10.68% 12,483 0.99% 7.52% 109.85%
Period from 5/15/95* to 3/31/96 10.46 10.74% 6,380 1.00% 9.01% 152.89%
====================================================================================================================================
</TABLE>
Ratio information assuming
no expense reimbursement
or fees paid indirectly
--------------------------------
Ratio of net
Ratio of investment
expenses to income to
average net average net
Period or Year ended assets (b) assets (b)
================================================================================
JNL/Putnam Growth Series
Year ended 12/31/98 1.01% (0.07)%
Year ended 12/31/97 1.05% 0.31%
Period from 4/1/96 to 12/31/96 1.27% 0.71%
Period from 5/15/95* to 3/31/96 5.38% (4.15)%
- --------------------------------------------------------------------------------
JNL/Putnam Value Equity Series
Year ended 12/31/98 1.01% 1.06%
Year ended 12/31/97 1.09% 1.37%
Period from 4/1/96 to 12/31/96 1.53% 1.61%
Period from 5/15/95* to 3/31/96 2.28% 0.91%
- --------------------------------------------------------------------------------
PPM America/JNL Balanced Series
Year ended 12/31/98 0.85% 3.87%
Year ended 12/31/97 0.94% 3.71%
Period from 4/1/96 to 12/31/96 1.22% 2.21%
Period from 5/15/95* to 3/31/96 3.71% 0.29%
- --------------------------------------------------------------------------------
PPM America/JNL High Yield Bond Series
Year ended 12/31/98 0.83% 8.62%
Year ended 12/31/97 0.90% 8.15%
Period from 4/1/96 to 12/31/96 1.21% 8.31%
Period from 5/15/95* to 3/31/96 1.50% 7.72%
- --------------------------------------------------------------------------------
PPM America/JNL Money Market Series
Year ended 12/31/98 0.75% 4.86%
Year ended 12/31/97 0.76% 4.91%
Period from 4/1/96 to 12/31/96 0.85% 4.65%
Period from 5/15/95* to 3/31/96 1.30% 4.51%
- --------------------------------------------------------------------------------
Salomon Brothers/JNL Global Bond Series
Year ended 12/31/98 1.01% 7.04%
Year ended 12/31/97 1.07% 6.76%
Period from 4/1/96 to 12/31/96 1.44% 7.07%
Period from 5/15/95* to 3/31/96 2.14% 7.87%
================================================================================
See notes to the financial statement.
<PAGE>
JNL SERIES TRUST
FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
Income from Operations Distributions
----------------------------- ---------------------------------------
Net realized &
unrealized gains
Net Asset Net on investments From net
value, investment & foreign From net realized gains
beginning income currency investment on investment Return of
Period or Year ended of period (loss) related items income transactions Capital
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Salomon Brothers/JNL U.S. Government &
Quality Bond Series
Year ended 12/31/98 10.69 0.41 0.60 (0.41) (0.14) -
Year ended 12/31/97 10.20 0.44 0.49 (0.42) (0.02) -
Period from 4/1/96 to 12/31/96 10.09 0.24 0.24 (0.34) (0.03) -
Period from 5/15/95* to 3/31/96 10.00 0.45 0.02 (0.34) (0.04) -
- ------------------------------------------------------------------------------------------------------------------------------------
T. Rowe Price/JNL Established Growth Series
Year ended 12/31/98 15.62 0.05 4.29 (0.06) (0.84) -
Year ended 12/31/97 12.56 0.06 3.64 (0.03) (0.61) -
Period from 4/1/96 to 12/31/96 11.36 0.03 1.81 (0.04) (0.09) (0.51)
Period from 5/15/95* to 3/31/96 10.00 0.07 2.68 (0.06) (1.33) -
- ------------------------------------------------------------------------------------------------------------------------------------
T. Rowe Price/JNL International Equity
Investment Series
Year ended 12/31/98 12.09 0.16 1.58 (0.19) (0.02) -
Year ended 12/31/97 12.08 0.09 0.23 (0.08) (0.23) -
Period from 4/1/96 to 12/31/96 11.25 0.06 0.90 (0.12) (0.01) -
Period from 5/15/95* to 3/31/96 10.00 0.04 1.21 - - -
- ------------------------------------------------------------------------------------------------------------------------------------
T. Rowe Price/JNL Mid-Cap Growth Series
Year ended 12/31/98 17.37 (0.07) 3.80 - (0.67) -
Year ended 12/31/97 14.89 (0.03) 2.74 - (0.23) -
Period from 4/1/96 to 12/31/96 13.43 (0.05) 1.92 (0.05) (0.36) -
Period from 5/15/95* to 3/31/96 10.00 0.06 3.90 - (0.53) -
====================================================================================================================================
</TABLE>
* Commencement of operations.
(a) Assumes investment at net asset value at the beginning of the period,
reinvestment of all distributions, and a complete redemption of the
investment at the net asset value at the end of the period. Total return is
not annualized.
(b) Annualized for the periods ended December 31, 1998, 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>
<TABLE>
<CAPTION>
Ratios and Supplemental Data
----------------------------------------------------------
Net asset Net assets, expenses to income to
value, end Total Return end of period average net average net Portfolio
Period or Year ended of period (a) (in thousands) assets (b)(c) assets (b)(c) turnover
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Salomon Brothers/JNL U.S. Government &
Quality Bond Series
Year ended 12/31/98 11.15 9.40% 63,785 0.85% 5.33% 429.70%
Year ended 12/31/97 10.69 9.16% 25,389 0.85% 5.99% 378.59%
Period from 4/1/96 to 12/31/96 10.20 4.82% 9,832 0.84% 5.72% 218.50%
Period from 5/15/95* to 3/31/96 10.09 4.65% 3,007 0.84% 5.41% 253.37%
- ------------------------------------------------------------------------------------------------------------------------------------
T. Rowe Price/JNL Established Growth Series
Year ended 12/31/98 19.06 27.78% 216,599 0.95% 0.38% 54.93%
Year ended 12/31/97 15.62 29.47% 124,022 0.98% 0.43% 47.06%
Period from 4/1/96 to 12/31/96 12.56 16.12% 32,291 1.00% 0.59% 36.41%
Period from 5/15/95* to 3/31/96 11.36 28.23% 8,772 1.00% 0.75% 101.13%
- ------------------------------------------------------------------------------------------------------------------------------------
T. Rowe Price/JNL International Equity
Investment Series
Year ended 12/31/98 13.62 14.43% 70,927 1.23% 0.88% 16.39%
Year ended 12/31/97 12.09 2.65% 78,685 1.24% 0.74% 18.81%
Period from 4/1/96 to 12/31/96 12.08 8.54% 48,204 1.25% 1.09% 5.93%
Period from 5/15/95* to 3/31/96 11.25 12.50% 24,211 1.25% 0.78% 16.45%
- ------------------------------------------------------------------------------------------------------------------------------------
T. Rowe Price/JNL Mid-Cap Growth Series
Year ended 12/31/98 20.43 21.49% 189,636 1.04% (0.37)% 50.92%
Year ended 12/31/97 17.37 18.21% 127,052 1.06% (0.26)% 41.43%
Period from 4/1/96 to 12/31/96 14.89 13.91% 47,104 1.10% (0.18)% 25.05%
Period from 5/15/95* to 3/31/96 13.43 40.06% 10,545 1.10% 0.82% 66.04%
====================================================================================================================================
</TABLE>
Ratio information assuming
no expense reimbursement
or fees paid indirectly
------------------------------
Ratio of net
Ratio of investment
expenses to income to
average net average net
Period or Year ended assets (b) assets (b)
================================================================================
Salomon Brothers/JNL U.S. Government &
Quality Bond Series
Year ended 12/31/98 0.86% 5.32%
Year ended 12/31/97 0.96% 5.88%
Period from 4/1/96 to 12/31/96 1.37% 5.19%
Period from 5/15/95* to 3/31/96 2.53% 3.72%
- --------------------------------------------------------------------------------
T. Rowe Price/JNL Established Growth Series
Year ended 12/31/98 0.95% 0.38%
Year ended 12/31/97 0.98% 0.43%
Period from 4/1/96 to 12/31/96 1.11% 0.48%
Period from 5/15/95* to 3/31/96 2.09% (0.34)%
- --------------------------------------------------------------------------------
T. Rowe Price/JNL International Equity
Investment Series
Year ended 12/31/98 1.28% 0.83%
Year ended 12/31/97 1.32% 0.66%
Period from 4/1/96 to 12/31/96 1.29% 1.05%
Period from 5/15/95* to 3/31/96 2.14% (0.11)%
- --------------------------------------------------------------------------------
T. Rowe Price/JNL Mid-Cap Growth Series
Year ended 12/31/98 1.04% (0.37)%
Year ended 12/31/97 1.06% (0.26)%
Period from 4/1/96 to 12/31/96 1.14% (0.22)%
Period from 5/15/95* to 3/31/96 2.10% (0.18)%
===============================================================================
See notes to the financial statements.
<PAGE>
PROSPECTUS
May 1, 1999
JNL SERIES TRUST
You can find more information about the Trust in:
o The Trust's Statement of Information (SAI) dated May 1, 1999,
which contains further information about the Trust and the Series,
particularly their investment practices and restrictions. The
current SAI is on file with the Securities and Exchange Commission
(SEC) and is incorporated into the Prospectus by reference (which
means the SAI is legally part of the Prospectus).
o The Trust's Annual and Semi-Annual Reports to shareholders, which
show the Series' actual investments and include financial
statements as of the close of the particular annual or semi-annual
period. The Annual Report also discusses the market conditions and
investment strategies that significantly affected each Series'
performance during the year covered by the report.
You can obtain a copy of the current SAI or the most recent Annual or
Semi-Annual Reports without charge, or make other inquiries, by calling (800)
766-4683, or writing the JNL Series Trust Service Center, P.O. Box 378002,
Denver, Colorado 80237-8003.
You can also obtain information about the Trust (including its current SAI and
most recent Annual and Semi-Annual Reports) from the SEC's Internet site
(http://www.sec.gov) and from the SEC's Public Reference Room in Washington,
D.C. You can find out about the operation of the Public Reference Room and
copying charges by calling (800) SEC-0330.
The Trust's SEC file number is: 811-8894
<PAGE>
JNL(R) SERIES TRUST
<PAGE>
PROSPECTUS
May 1, 1999
JNL(R) SERIES TRUST
5901 Executive Drive o Lansing, Michigan 48911
This Prospectus provides you with the basic information you should know before
investing in the JNL Series Trust (Trust).
The shares of the Trust are sold to life insurance company separate accounts to
fund the benefits of variable annuity contracts. The Trust currently offers
shares in the following separate Series, each with its own investment objective.
JNL/Alger Growth Series
JNL/Eagle Core Equity Series
JNL/Eagle SmallCap Equity Series
JNL/Janus Aggressive Growth Series
JNL/Janus Capital Growth Series
JNL/Janus Global Equities Series
JNL/Putnam Growth Series
JNL/Putnam Value Equity Series
Lazard/JNL Mid Cap Value Series
Lazard/JNL Small Cap Value Series
PPM America/JNL Balanced Series
PPM America/JNL High Yield Bond Series
PPM America/JNL Money Market Series
Salomon Brothers/JNL Global Bond Series
Salomon Brothers/JNL U.S. Government & Quality Bond Series
T. Rowe Price/JNL Established Growth Series
T. Rowe Price /JNL International Equity Investment Series
T. Rowe Price /JNL Mid-Cap Growth Series
The Securities and Exchange Commission has not approved or disapproved the
Trust's securities, or determined whether this prospectus is accurate or
complete. It is a criminal offense to state otherwise.
"Standard & Poor's(R)", "S&P(R)", "S&P 500(R)", Standard & Poor's 500", "500",
"S&P MidCap 400 Index" and "Standard & Poor's 400 Index" are trademarks of The
McGraw-Hill Companies, Inc.
The Trust's Statement of Additional Information (SAI) contains additional
information about the Trust and the Series.
---------------
<PAGE>
TABLE OF CONTENTS
About the Series of the Trust
Management of the Trust
Administrative Fee
Investment in Trust Shares
Share Redemption
Tax Status
Financial Highlights
<PAGE>
ABOUT THE SERIES OF THE TRUST
JNL/Alger Growth Series
Investment Objective. The investment objective of the JNL/Alger Growth Series is
long-term capital appreciation.
Principal Investment Strategies. The Series seeks to achieve its objective by
investing primarily in a diversified portfolio of equity securities -- common
stock, preferred stock, and securities convertible into or exchangeable for
common stock -- of large, U.S.-traded companies. To provide flexibility to take
advantage of investment opportunities, the Series may hold a portion of its
assets in money market investments and repurchase agreements.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests in U.S.-traded equity
securities, it is subject to stock market risk. Stock prices
typically fluctuate more than the values of other types of
securities, typically in response to changes in the particular
company's financial condition and factors affecting the market in
general. For example, unfavorable or unanticipated poor earnings
performance of the company may result in a decline in its stock's
price, and a broad-based market drop may also cause a stock's
price to fall.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns since these shares were
first offered and shows how performance has varied from year to year. The table
shows the Series' average annual returns and compares them to the market
indicators listed. Both the chart and the table assume reinvestment of dividends
and distributions. The Series' returns shown in the chart and table below do not
reflect the deduction of any charges that are imposed under a variable annuity
contract. Those charges, which are described in the variable annuity prospectus,
will reduce the Series' performance. As with all mutual funds, the Series' past
performance does not necessarily indicate how it will perform in the future.
Year-By-Year Returns as of December 31
- --------------------------------------
13.41% 26.20% 45.66%
[Insert Chart]
1996 1997 1998
In the periods shown in the chart, the Series' highest quarterly return was
25.65% (4th quarter of 1998) and its lowest quarterly return was -7.37% (3rd
quarter of 1998).
Average Annual Total Returns as of December 31, 1998
----------------------------------------------------
1 year Life of Series*
JNL/Alger Growth Series 45.66% 25.06%
S&P 500 Index 28.58% 28.48%
The S&P 500 Index is a broad-based, unmanaged index.
* The Series began operations on October 16, 1995.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The JNL/Alger Growth Series seeks to
achieve its investment objective of long-term capital appreciation by investing
primarily in equity securities of large companies which trade on U.S. exchanges
or in the U.S. over-the-counter market. The Series considers a large company to
be one that, at the time its securities are acquired by the Series, has a market
capitalization of $1 billion or more. These companies typically have broad
product lines, markets, financial resources and depth of management.
The Series may take a temporary, defensive position by investing up to all of
its assets in debt securities (typically of a high grade), cash equivalents and
repurchase agreements. Taking a defensive position may reduce the potential for
appreciation in the Series' portfolio.
The Series may actively trade securities in seeking to achieve its objective.
Doing so may increase transaction costs, which may reduce performance.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
Sub-Adviser and Portfolio Management. The sub-adviser to the JNL/Alger Growth
Series is Fred Alger Management, Inc. (Alger Management), which is located at 1
World Trade Center, Suite 9333, New York, New York 10048. Alger Management is
generally engaged in the business of rendering investment advisory services to
institutions and, to a lesser extent, individuals and has been so engaged since
1964.
David D. Alger, President and Chief Investment Officer of Alger Management, is
primarily responsible for the day-to-day management of the Series. He has been
employed by Alger Management as Executive Vice President and Director of
Research since 1971, and as President since 1995. He serves as portfolio manager
for other mutual funds and investment accounts managed by Alger Management.
Ronald Tartaro also participates in the management of the Series. Mr. Tartaro
has been employed by Alger Management as a senior research analyst since 1990
and as a Senior Vice President since 1995. Mr. Alger and Mr. Tartaro have had
responsibility for the day-to-day management of the Series since the inception
of the Series.
<PAGE>
JNL/Eagle Core Equity Series
Investment Objective. The investment objective of the JNL/Eagle Core Equity
Series is long-term capital appreciation and, secondarily, current income.
Principal Investment Strategies. The Series seeks to achieve its objective by
investing primarily in a diversified portfolio of common stock of U.S. companies
that meet the criteria for one of three separate equity strategies: the growth
equity strategy, the value equity strategy and the equity income strategy.
o Under the growth equity strategy, the sub-adviser invests in
securities which it believes have sufficient growth potential to
offer above-average, long-term capital appreciation. The
subadviser seeks securities of companies which:
-- have projected earnings growth and return on equity
greater than 15%,
-- are dominant in their industries, and
-- have the ability to create and sustain a competitive
advantage.
o Under the value equity strategy, the sub-adviser invests in
securities which it believes indicate above-average financial
soundness and high intrinsic value relative to price. These
securities or their respective issuers have at least one of the
following characteristics when acquired for the Series:
-- price-to-earnings ratio or price-to-book value ratio of
less than or approximately equal to 75% of the S&P 500,
-- yield that approximates at least half of the average
yield to maturity of the Lehman Brothers Long Treasury
Bond Index (or similar index),
-- per share going concern value that, in the
sub-adviser's judgment, exceeds book value and market
value, or
-- long-term debt equal to or below tangible net worth.
o Under the equity income strategy, the sub-adviser invests in
income-producing securities.
The sub-adviser divides the Series' assets among each of these three strategies,
with about 40% of the assets allocated to each of the growth equity and value
equity strategies and about 20% to the equity income strategy.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests primarily in stocks of
U.S. companies, it is subject to stock market risk. Stock prices
typically fluctuate more than the values of other types of
securities, typically in response to changes in the particular
company's financial condition and factors affecting the market in
general. For example, unfavorable or unanticipated poor earnings
performance of the company may result in a decline in its stock's
price, and a broad-based market drop may also cause a stock's
price to fall.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns since these shares were
first offered and shows how performance has varied from year to year. The table
shows the Series' average annual returns and compares them to the market
indicators listed. Both the chart and the table assume reinvestment of dividends
and distributions. The Series' returns shown in the chart and table below do not
reflect the deduction of any charges that are imposed under a variable annuity
contract. Those charges, which are described in the variable annuity prospectus,
will reduce the Series' performance. As with all mutual funds, the Series' past
performance does not necessarily indicate how it will perform in the future.
Year-By-Year Returns as of December 31
- --------------------------------------
32.35% 16.54%
[Insert Chart]
1997 1998
In the periods shown in the chart, the Series' highest quarterly return was
18.43% (4th quarter of 1998) and its lowest quarterly return was -10.99% (3rd
quarter of 1998).
Average Annual Total Returns as of December 31, 1998
----------------------------------------------------
1 year Life of Series*
JNL/Eagle Core Equity Series 16.54% 24.15%
S&P 500 Index 28.58% 31.30%
The S&P 500 Index is a broad-based, unmanaged index.
* The Series began operations on September 16, 1996.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. Under the growth equity strategy, the
sub-adviser selects common stocks in part based on its opinions regarding the
sustainability of the company's competitive advantage in the marketplace and the
company's management team. The subadviser looks for securities of companies
which have an exceptional management team and which have the potential to
increase market share and drive EPS growth. If a particular stock appreciates to
over 5% of the total assets of the portfolio, the sub-adviser typically will
reduce the position to less than 5%. Generally, the sub-adviser will sell a
stock if its price appreciates to a level that the sub-adviser views as not
sustainable or to purchase stock that the sub-adviser believes presents a better
investment opportunity.
Under the value equity strategy, the sub-adviser screens a universe of over
2,500 companies. From this universe, the sub-adviser makes selections based on
its projections of the company's growth in earnings and dividends, earnings
momentum, and undervaluation based on a dividend discount model. The sub-adviser
develops target prices and value ranges from this analysis and makes portfolio
selection from among the top-rated securities. The sub-adviser will typically
sell a security if the security reaches its target price, negative changes occur
with respect to the issuer or its industry, or there is a significant change in
one or more of the four characteristics applicable to the security's selection.
However, the Series may continue to hold equity securities that no longer meet
the selection criteria but that the sub-adviser deems suitable investments in
view of the Series' investment objective.
Under normal market conditions, the Series invests at least 65% of its assets in
the common stock of U.S. companies and may invest the balance in other
securities, such as common stock of foreign issuers, corporate debt obligations,
U.S. Government securities, preferred stock, convertible stock, warrants and
rights to buy common stock, real estate investment trusts, repurchase agreements
and money market instruments. Investing in foreign securities presents
additional risks, such as those related to currency fluctuations and adverse
political or economic conditions affecting a foreign country. Although the
Series emphasizes investment-grade securities (or unrated securities that the
sub-adviser deems to be of comparable quality), the Series may invest in
non-investment-grade securities. A non-investment grade security may fluctuate
more in value, and present a greater risk of default, than a higher-rated
security.
The Series may also use derivative instruments, such as options, futures
contracts and indexed securities, which are subject to transaction costs and
certain risks, such as unanticipated changes in securities prices.
For temporary defensive purposes during actual or anticipated periods of general
market decline, the Series may invest up to 100% of its assets in high-grade
money market instruments, including U.S. Government securities, and repurchase
agreements secured by such instruments, as well as other high-quality debt
securities. Taking a defensive position may reduce the potential for
appreciation in the Series' portfolio.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the JNL/Eagle Core
Equity Series is Eagle Asset Management, Inc. (Eagle), 880 Carillon Parkway, St.
Petersburg, Florida 33716. Eagle is a wholly owned subsidiary of Raymond James
Financial, Inc. Eagle and its affiliates provide a wide range of financial
services to retail and institutional clients.
In its capacity as sub-adviser, Eagle supervises and manages the investment
portfolio of the Series. Mr. Ashi Parikh, Managing Director and Portfolio
Manager, is responsible for the day-to-day management of the growth equity
strategy. Mr. Parikh joined Eagle in April 1999, after serving as Managing
Director at Banc One Investment Advisers in Columbus, Ohio. Mr. Lou Kirschbaum,
Senior Vice President and Portfolio Manager and Mr. David Blount, Senior Vice
President and Portfolio Manager, as co-managers, are responsible for the
day-to-day management of both the value equity and the equity income strategies.
They assumed responsibility for the value equity strategy in January 1999; they
have been responsible for the equity income strategy since the inception of the
Series. Mr. Kirschbaum has been with Eagle since 1986, and Mr. Blount joined
Eagle in 1993.
<PAGE>
JNL/Eagle SmallCap Equity Series
Investment Objective. The investment objective of the JNL/Eagle SmallCap Equity
Series is long-term capital appreciation.
Principal Investment Strategies. The Series seeks to achieve its objective by
investing primarily in a diversified portfolio of equity securities of domestic
small capitalization companies, i.e., companies which, at the time of purchase,
typically have a market capitalization under $1 billion. The subadviser employs
a bottom-up approach to identify rapidly growing, under-researched small
capitalization companies that appear to be undervalued in relation to their long
term earnings growth rate or asset value. The subadviser generally invests in
companies which have accelerating earnings, reasonable valuations (typically
with a price-to-earnings ratio of no more than 75% of the earnings growth rate),
strong management that participates in the ownership of the company, reasonable
debt, and a high or expanding return on equity. The Series' equity holdings
consist primarily of common stocks, but may also include preferred stocks and
investment grade securities convertible into common stocks and warrants.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests primarily in stocks of
U.S. companies, it is subject to stock market risk. Stock prices
typically fluctuate more than the values of other types of
securities, typically in response to changes in the particular
company's financial condition and factors affecting the market in
general. For example, unfavorable or unanticipated poor earnings
performance of the company may result in a decline in its stock's
price, and a broad-based market drop may also cause a stock's
price to fall.
o Small cap investing. Investing in smaller, newer companies
generally involves greater risks than investing in larger, more
established ones. The companies in which the Series is likely to
invest have limited product lines, markets or financial resources
and may be subject to more abrupt or erratic market movements than
securities of larger, more established companies or the market
averages in general. In addition, many small capitalization
companies may be in the early stages of development. Accordingly,
an investment in the Series may not be appropriate for all
investors.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns since these shares were
first offered and shows how performance has varied from year to year. The table
shows the Series' average annual returns and compares them to the market
indicators listed. Both the chart and the table assume reinvestment of dividends
and distributions. The Series' returns shown in the chart and table below do not
reflect the deduction of any charges that are imposed under a variable annuity
contract. Those charges, which are described in the variable annuity prospectus,
will reduce the Series' performance. As with all mutual funds, the Series' past
performance does not necessarily indicate how it will perform in the future.
Year-By-Year Returns as of December 31
- --------------------------------------
27.64% 1.18%
[Insert Chart]
1997 1998
In the periods shown in the chart, the Series' highest quarterly return was
22.67% (4th quarter of 1998) and its lowest quarterly return was -23.92% (3rd
quarter of 1998).
Average Annual Total Returns as of December 31, 1998
----------------------------------------------------
1 year Life of Series*
JNL/Eagle SmallCap Equity Series 1.18% 19.01%
Russell 2000 Index -2.55% 10.44%
The Russell 2000 Index is a broad-based, unmanaged index.
* The Series began operations on September 16, 1996.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The JNL/Eagle SmallCap Equity Series
invests primarily in the equity securities of small capitalization U.S.
companies. However, it may also invest in American Depositary Receipts of U.S.
traded foreign issuers, U.S. Government securities, repurchase agreements and
other short-term money market instruments.
For temporary, defensive purposes during actual or anticipated periods of
general market decline, the Series may invest up to 100% of its assets in
high-grade money market instruments, including U.S. Government securities, and
repurchase agreements secured by such instruments, as well as other high-quality
debt securities. Taking a defensive position may reduce the potential for
appreciation in the Series' portfolio.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the JNL/Eagle
SmallCap Equity Series is Eagle Asset Management, Inc. (Eagle), 880 Carillon
Parkway, St. Petersburg, Florida 33716. Eagle and its affiliates provide a wide
range of financial services to retail and institutional clients.
Bert L. Boksen, Senior Vice President and Portfolio Manager of Eagle, is
responsible for the day-to-day management of the Series. Mr. Boksen joined Eagle
in April 1995 and has portfolio management responsibilities for its small cap
equity accounts. Prior to joining Eagle, Mr. Boksen was employed for 16 years by
Raymond James & Associates, Inc. in its institutional research and sales
department. While employed by Raymond James & Associates, Inc., Mr. Boksen
served as co-head of Research, Chief Investment Officer and Chairman of the
Raymond James & Associates, Inc. Focus List Committee. Mr. Boksen has had
responsibility for the day-to-day management of the Series since the inception
of the Series.
<PAGE>
JNL/Janus Aggressive Growth Series
Investment Objective. The investment objective of the JNL/Janus Aggressive
Growth Series is long-term growth of capital.
Principal Investment Strategies. The Series seeks to achieve its objective by
investing primarily in a diversified portfolio of common stocks of U.S. and
foreign companies selected for their growth potential. The Series may invest in
companies of any size, from larger, well-established companies to smaller,
emerging growth companies. The Series may invest to a lesser degree in other
types of securities, including preferred stock, warrants, convertible securities
and debt securities.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests in stocks of U.S. and
foreign companies, it is subject to stock market risk. Stock
prices typically fluctuate more than the values of other types of
securities, typically in response to changes in the particular
company's financial condition and factors affecting the market in
general. For example, unfavorable or unanticipated poor earnings
performance of the company may result in a decline in its stock's
price, and a broad-based market drop may also cause a stock's
price to fall. Investing in smaller, newer companies generally
involves greater risks than investing in larger, more established
ones.
For bonds, market risk generally reflects credit risk and interest
rate risk. Credit risk is the actual or perceived risk that the
issuer of the bond will not pay the interest and principal
payments when due. Bond value typically declines if the issuer's
credit quality deteriorates. Interest rate risk is the risk that
interest rates will rise and the value of bonds, including those
held by the Series, will fall. A broad-based market drop may also
cause a bond's price to fall.
o Foreign investing risk. Foreign investing involves risks not
typically associated with U.S. investment. These risks include,
among others, adverse fluctuations in foreign currency values as
well as adverse political, social and economic developments
affecting a foreign country. Investments in foreign countries
could be affected by factors not present in the U.S., such as
restrictions on receiving the investment proceeds from a foreign
country, foreign tax laws, and potential difficulties in enforcing
contractual obligations. Transactions in foreign securities may be
subject to less efficient settlement practices, including extended
clearance and settlement periods. Owning foreign securities could
cause the Series' performance to fluctuate more than if it held
only U.S. securities.
o Currency risk. The value of the Series' shares may change as a
result of changes in exchange rates reducing the value of the U.S.
dollar value of the Series' foreign investments. Currency exchange
rates can be volatile and affected by a number of factors, such as
the general economics of a country, the actions of U.S. and
foreign governments or central banks, the imposition of currency
controls, and speculation.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns since these shares were
first offered and shows how performance has varied from year to year. The table
shows the Series' average annual returns and compares them to the market
indicators listed. Both the chart and the table assume reinvestment of dividends
and distributions. The Series' returns shown in the chart and table below do not
reflect the deduction of any charges that are imposed under a variable annuity
contract. Those charges, which are described in the variable annuity prospectus,
will reduce the Series' performance. As with all mutual funds, the Series' past
performance does not necessarily indicate how it will perform in the future.
Year-By-Year Returns as of December 31
- --------------------------------------
18.95% 12.67% 57.66%
[Insert Chart]
1996 1997 1998
In the periods shown in the chart, the Series' highest quarterly return was
29.79% (4th quarter of 1998) and its lowest quarterly return was -6.56% (3rd
quarter of 1998).
Average Annual Total Returns as of December 31, 1998
----------------------------------------------------
1 year Life of Series*
JNL/Janus Aggressive Growth Series 57.66% 30.36%
S&P 500 Index 28.58% 28.63%
The S&P 500 Index is a broad-based, unmanaged index.
* The Series began operations on May 15, 1995.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The JNL/Janus Aggressive Growth Series
invests primarily in common stocks when the sub-adviser believes that the
relevant market environment favors profitable investing in those securities. The
sub-adviser seeks to identify individual companies with earnings growth
potential that may not be recognized by the market. The sub-adviser selects
securities for their capital growth potential; investment income is not a
consideration. When the sub-adviser believes that market conditions are not
favorable for profitable investing or when the sub-adviser is otherwise unable
to locate favorable investment opportunities, the Series may hedge its
investments to a greater degree and/or increase its position in cash or similar
investments. Doing so may reduce the potential for appreciation in the Series'
portfolio.
The Series may invest in "special situations" from time to time. A special
situation arises when, in the opinion of the sub-adviser, the securities of a
particular issuer will be recognized and appreciate in value due to a specific
development with respect to that issuer. Developments creating special
situations might include, among others, a new product or process, a
technological breakthrough, a management change or other extraordinary corporate
event, or differences in market supply of and demand for the security.
Investment in special situations may carry an additional risk of loss in the
event that the anticipated development does not occur or does not attract the
expected attention. The impact of this strategy on the Series will depend on the
Series' size and the extent of its holdings of special situation issuers
relative to total net assets.
The Series may use derivative instruments, such as futures contracts, options,
and forward currency contracts, for hedging or as a means of enhancing return.
These instruments are subject to transaction costs and certain risks, such as
unanticipated changes in interest rates, securities prices and global currency
markets.
The Series may invest in high-yield, high-risk, fixed-income securities,
commonly known as "junk bonds." These are corporate debt securities rated BBB or
lower by S&P or Baa or lower by Moody's, or unrated securities deemed by the
sub-adviser to be on comparable quality. Lower-rated securities generally
involve a higher risk of default than higher-rated ones.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the JNL/Janus
Aggressive Growth Series is Janus Capital Corporation (Janus Capital), with
principal offices at 100 Fillmore Street, Denver, Colorado 80206. Janus Capital
provides investment advisory services to mutual funds and other institutional
accounts.
Warren B. Lammert, Portfolio Manager of Janus Capital, is responsible for the
day-to-day management of the Series. Mr. Lammert joined Janus Capital in 1987.
He holds a Bachelor of Arts in Economics from Yale University and a Master of
Science in Economic History from the London School of Economics. He is a
Chartered Financial Analyst. Mr. Lammert has had responsibility for the
day-to-day management of the Series since the inception of the Series.
<PAGE>
JNL/Janus Capital Growth Series
Investment Objective. The investment objective of the JNL/Janus Capital Growth
Series is long-term growth of capital in a manner consistent with the
preservation of capital.
Principal Investment Strategies. The Series seeks to achieve its objective
through a non-diversified portfolio consisting primarily of common stock of U.S.
and foreign companies selected for their growth potential. The Series normally
invests a majority of its equity assets in medium-sized companies. The Series
may invest to a lesser degree in other types of securities, including preferred
stock, warrants, convertible securities and debt securities.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests in stocks of U.S. and
foreign companies, it is subject to stock market risk. Stock
prices typically fluctuate more than the values of other types of
securities, typically in response to changes in the particular
company's financial condition and factors affecting the market in
general. For example, unfavorable or unanticipated poor earnings
performance of the company may result in a decline in its stock's
price, and a broad-based market drop may also cause a stock's
price to fall.
For bonds, market risk generally reflects credit risk and interest
rate risk. Credit risk is the actual or perceived risk that the
issuer of the bond will not pay the interest and principal
payments when due. Bond value typically declines if the issuer's
credit quality deteriorates. Interest rate risk is the risk that
interest rates will rise and the value of bonds, including those
held by the Series, will fall. A broad-based market drop may also
cause a bond's price to fall.
o Foreign investing risk. Foreign investing involves risks not
typically associated with U.S. investment. These risks include,
among others, adverse fluctuations in foreign currency values as
well as adverse political, social and economic developments
affecting a foreign country. Investments in foreign countries
could be affected by factors not present in the U.S., such as
restrictions on receiving the investment proceeds from a foreign
country, foreign tax laws, and potential difficulties in enforcing
contractual obligations. Transactions in foreign securities may be
subject to less efficient settlement practices, including extended
clearance and settlement periods. Owning foreign securities could
cause the Series' performance to fluctuate more than if it held
only U.S. securities.
o Currency risk. The value of the Series' shares may change as a
result of changes in exchange rates reducing the value of the U.S.
dollar value of the Series' foreign investments. Currency exchange
rates can be volatile and affected by a number of factors, such as
the general economics of a country, the actions of U.S. and
foreign governments or central banks, the imposition of currency
controls, and speculation.
o Non-diversification. The Series is "non-diversified" as such term
is defined in the Investment Company Act of 1940, as amended,
which means that more than 5%, but not more than 25%, of its total
assets may be invested in securities of any one issuer. Thus, the
Series may hold a smaller number of issuers than if it were
"diversified." With a smaller number of different issuers, the
Series is subject to more risk than another fund holding a larger
number of issuers, since changes in the financial condition or
market status of a single issuer may cause greater fluctuation in
the Series' total return and share price.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns since these shares were
first offered and shows how performance has varied from year to year. The table
shows the Series' average annual returns and compares them to the market
indicators listed. Both the chart and the table assume reinvestment of dividends
and distributions. The Series' returns shown in the chart and table below do not
reflect the deduction of any charges that are imposed under a variable annuity
contract. Those charges, which are described in the variable annuity prospectus,
will reduce the Series' performance. As with all mutual funds, the Series' past
performance does not necessarily indicate how it will perform in the future.
Year-By-Year Returns as of December 31
- --------------------------------------
16.83% 15.01% 35.16%
[Insert Chart]
1996 1997 1998
In the periods shown in the chart, the Series' highest quarterly return was
35.74% (4th quarter of 1998) and its lowest quarterly return was -15.05% (3rd
quarter of 1998).
Average Annual Total Returns as of December 31, 1998
----------------------------------------------------
1 year Life of Series*
JNL/Janus Capital Growth Series 35.16% 27.59%
S&P MidCap 400 Index 19.09% 23.32%
The S&P 400 MidCap Index is a broad-based, unmanaged index.
* The Series began operations on May 15, 1995.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The JNL/Janus Capital Growth Series seeks
to achieve its objective by investing primarily in common stocks selected for
their growth potential and normally invests at least 50% of its equity assets in
medium-sized companies. Medium-sized companies are those whose market
capitalizations fall within the range of companies in the S&P MidCap 400 Index
and are determined at the time their securities are acquired by the Series. The
market capitalizations within the Index will vary, but as of December 31, 1998,
they ranged between approximately $142 million and $73 billion. The sub-adviser
seeks to identify individual companies with earnings growth potential that may
not be recognized by the market. The sub-adviser selects securities for their
capital growth potential; investment income is not a consideration. When the
sub-adviser believes that market conditions are not favorable for profitable
investing or when the sub-adviser is otherwise unable to locate favorable
investment opportunities, the Series may hedge its investments to a greater
degree and/or increase its position in cash or similar investments. Doing so may
reduce the potential for appreciation in the Series' portfolio.
The Series may invest in "special situations" from time to time. A special
situation arises when, in the opinion of the sub-adviser, the securities of a
particular issuer will be recognized and appreciate in value due to a specific
development with respect to that issuer. Developments creating special
situations might include, among others, a new product or process, a
technological breakthrough, a management change or other extraordinary corporate
event, or differences in market supply of and demand for the security.
Investment in special situations may carry an additional risk of loss in the
event that the anticipated development does not occur or does not attract the
expected attention. The impact of this strategy on the Series will depend on the
Series' size and the extent of its holdings of special situation issuers
relative to total net assets.
The Series may use derivative instruments, such as futures contracts, options,
and forward currency contracts, for hedging or as a means of enhancing return.
These instruments are subject to transaction costs and certain risks, such as
unanticipated changes in interest rates, securities prices and global currency
markets.
The Series may invest in high-yield, high-risk, fixed-income securities,
commonly known as "junk bonds." These are corporate debt securities rated BBB or
lower by S&P or Baa or lower by Moody's, or unrated securities deemed by the
sub-adviser to be on comparable quality. Lower-rated securities generally
involve a higher risk of default than higher-rated ones.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the JNL/Janus
Capital Growth Series is Janus Capital Corporation (Janus Capital), with
principal offices at 100 Fillmore Street, Denver, Colorado 80206. Janus Capital
provides investment advisory services to mutual funds and other institutional
accounts.
James P. Goff, Portfolio Manager of Janus Capital, is responsible for the
day-to-day management of the JNL/Janus Capital Growth Series. Mr. Goff joined
Janus Capital in 1988. He holds a Bachelor of Arts in Economics from Yale
University and is a Chartered Financial Analyst. Mr. Goff has had responsibility
for the day-to-day management of the Series since the inception of the Series.
<PAGE>
JNL/Janus Global Equities Series
Investment Objective. The investment objective of the JNL/Janus Global Equities
Series is long-term growth of capital in a manner consistent with the
preservation of capital.
Principal Investment Strategies. The Series seeks to achieve its objective by
investing primarily in a diversified portfolio of common stocks of foreign and
domestic issuers. The Series may invest to a lesser degree in other types of
securities, including preferred stock, warrants, convertible securities, and
debt securities, such as corporate bonds. The Series can invest on a worldwide
basis in companies and other organizations of any size, regardless of country of
organization or place of principal business activity, as well as domestic and
foreign governments, government agencies and other governmental entities. The
Series normally invests in securities of issuers from at least five different
countries, including the United States, although it may invest in fewer than
five countries.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests in stocks of U.S. and
foreign companies, it is subject to stock market risk. Stock
prices typically fluctuate more than the values of other types of
securities, typically in response to changes in the particular
company's financial condition and factors affecting the market in
general. For example, unfavorable or unanticipated poor earnings
performance of the company may result in a decline in its stock's
price, and a broad-based market drop may also cause a stock's
price to fall.
For bonds, market risk generally reflects credit risk and
interest rate risk. Credit risk is the actual or perceived risk
that the issuer of the bond will not pay the interest and
principal payments when due. Bond value typically declines if the
issuer's credit quality deteriorates. Interest rate risk is the
risk that interest rates will rise and the value of bonds,
including those held by the Series, will fall. A broad-based
market drop may also cause a bond's price to fall.
o Foreign investing risk. Foreign investing involves risks not
typically associated with U.S. investment. These risks include,
among others, adverse fluctuations in foreign currency values as
well as adverse political, social and economic developments
affecting a foreign country. Investments in foreign countries
could be affected by factors not present in the U.S., such as
restrictions on receiving the investment proceeds from a foreign
country, foreign tax laws, and potential difficulties in
enforcing contractual obligations. Transactions in foreign
securities may be subject to less efficient settlement practices,
including extended clearance and settlement periods. Owning
foreign securities could cause the Series' performance to
fluctuate more than if it held only U.S. securities. To the
extent that the Series invests in bonds issued by a foreign
government, the Series may have limited legal recourse in the
event of default. Political conditions, especially a country's
willingness to meet the terms of its debt obligations, can create
special risks.
o Currency risk. The value of the Series' shares may change as a
result of changes in exchange rates reducing the value of the
U.S. dollar value of the Series' foreign investments. Currency
exchange rates can be volatile and affected by a number of
factors, such as the general economics of a country, the actions
of U.S. and foreign governments or central banks, the imposition
of currency controls, and speculation.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns since these shares were
first offered and shows how performance has varied from year to year. The table
shows the Series' average annual returns and compares them to the market
indicators listed. Both the chart and the table assume reinvestment of dividends
and distributions. The Series' returns shown in the chart and table below do not
reflect the deduction of any charges that are imposed under a variable annuity
contract. Those charges, which are described in the variable annuity prospectus,
will reduce the Series' performance. As with all mutual funds, the Series' past
performance does not necessarily indicate how it will perform in the future.
Year-By-Year Returns as of December 31
- --------------------------------------
31.36% 19.12% 26.87%
[Insert Chart]
1996 1997 1998
In the periods shown in the chart, the Series' highest quarterly return was
20.52% (4th quarter of 1998) and its lowest quarterly return was -16.93% (3rd
quarter of 1998).
Average Annual Total Returns as of December 31, 1998
----------------------------------------------------
1 year Life of Series*
JNL/Janus Global Equities Series 26.87% 29.59%
Morgan Stanley Capital
International World Index 22.78% 16.53%
The Morgan Stanley Capital International World Index is a broad-based, unmanaged
index.
* The Series began operations on May 15, 1995.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The JNL/Janus Global Equities Series
invests primarily in common stocks of foreign and domestic companies and, to a
lesser degree, other types of securities, such as bonds and other debt
securities. The sub-adviser seeks to identify individual companies with earnings
growth potential that may not be recognized by the market at large. The
sub-adviser selects securities for their capital growth potential; investment
income is not a consideration. When the sub-adviser believes that market
conditions are not favorable for profitable investing or when the sub-adviser is
otherwise unable to locate favorable investment opportunities, the Series may
hedge its investments to a greater degree and/or increase its position in cash
or similar investments. Doing so may reduce the potential for appreciation in
the Series' portfolio.
The Series may invest in "special situations" from time to time. A special
situation arises when, in the opinion of the sub-adviser, the securities of a
particular issuer will be recognized and appreciate in value due to a specific
development with respect to that issuer. Developments creating special
situations might include, among others, a new product or process, a
technological breakthrough, a management change or other extraordinary corporate
event, or differences in market supply of and demand for the security.
Investments in special situations may carry an additional risk of loss in the
event that the anticipated development does not occur or does not attract the
expected attention. The impact of this strategy on the Series will depend on the
Series' size and the extent of its holdings of special situation issuers
relative to total net assets.
The Series may use derivative instruments, such as futures contracts, options,
and forward currency contracts, for hedging or as a means of enhancing return.
These instruments are subject to transaction costs and certain risks, such as
unanticipated changes in interest rates, securities prices and global currency
markets.
The Series may invest in high-yield, high-risk fixed-income securities, commonly
known as "junk bonds." These are corporate debt securities rated BBB or lower by
S&P or Baa or lower by Moody's, or unrated securities deemed by the sub-adviser
to be of comparable quality. Lower-rated securities generally involve a higher
risk of default, and may fluctuate more in value than higher-rated securities.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the JNL/Janus
Global Equities Series is Janus Capital Corporation (Janus Capital), with
principal offices at 100 Fillmore Street, Denver, Colorado 80206. Janus Capital
provides investment advisory services to mutual funds and other institutional
accounts.
Helen Young Hayes, Portfolio Manager of Janus Capital, is responsible for the
day-to-day management of the Series. Ms. Hayes joined Janus Capital in 1987. She
holds a Bachelor of Arts in Economics from Yale University and is a Chartered
Financial Analyst. Ms. Hayes has had responsibility for the day-to-day
management of the Series since the inception of the Series.
<PAGE>
JNL/Putnam Growth Series
Investment Objective. The investment objective of the JNL/Putnam Growth Series
is long-term capital growth.
Principal Investment Strategies. The Series seeks to achieve its objective by
investing primarily in a diversified portfolio of common stock of domestic,
large-capitalization companies. However, the Series may also invest in preferred
stocks, bonds, convertible preferred stock and convertible debentures if the
sub-adviser believes that they offer the potential for capital appreciation. The
Series may invest a portion of its assets in foreign securities.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests in stocks of U.S. and
foreign companies, it is subject to stock market risk. Stock
prices typically fluctuate more than the values of other types of
securities, typically in response to changes in the particular
company's financial condition and factors affecting the market in
general. For example, unfavorable or unanticipated poor earnings
performance of the company may result in a decline in its stock's
price, and a broad-based market drop may also cause a stock's
price to fall.
For bonds, market risk generally reflects credit risk and interest
rate risk. Credit risk is the actual or perceived risk that the
issuer of the bond will not pay the interest and principal
payments when due. Bond value typically declines if the issuer's
credit quality deteriorates. Interest rate risk is the risk that
interest rates will rise and the value of bonds, including those
held by the Series, will fall. A broad-based market drop may also
cause a bond's price to fall.
o Foreign investing risk. Foreign investing involves risks not
typically associated with U.S. investment. These risks include,
among others, adverse fluctuations in foreign currency values as
well as adverse political, social and economic developments
affecting a foreign country. Investments in foreign countries
could be affected by factors not present in the U.S., such as
restrictions on receiving the investment proceeds from a foreign
country, foreign tax laws, and potential difficulties in enforcing
contractual obligations. Transactions in foreign securities may be
subject to less efficient settlement practices, including extended
clearance and settlement periods. Owning foreign securities could
cause the Series' performance to fluctuate more than if it held
only U.S. securities.
o Currency risk. The value of the Series' shares may change as a
result of changes in exchange rates reducing the value of the U.S.
dollar value of the Series' foreign investments. Currency exchange
rates can be volatile and affected by a number of factors, such as
the general economics of a country, the actions of U.S. and
foreign governments or central banks, the imposition of currency
controls, and speculation.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns since these shares were
first offered and shows how performance has varied from year to year. The table
shows the Series' average annual returns and compares them to the market
indicators listed. Both the chart and the table assume reinvestment of dividends
and distributions. The Series' returns shown in the chart and table below do not
reflect the deduction of any charges that are imposed under a variable annuity
contract. Those charges, which are described in the variable annuity prospectus,
will reduce the Series' performance. As with all mutual funds, the Series' past
performance does not necessarily indicate how it will perform in the future.
Year-By-Year Returns as of December 31
- --------------------------------------
26.81% 21.88% 34.93%
[Insert Chart]
1996 1997 1998
In the periods shown in the chart, the Series' highest quarterly return was
24.99% (4th quarter of 1998) and its lowest quarterly return was -12.00% (3rd
quarter of 1998).
Average Annual Total Returns as of December 31, 1998
----------------------------------------------------
1 year Life of Series*
JNL/Putnam Growth Series 34.93% 30.82%
S&P 500 Index 28.58% 28.63%
The S&P 500 Index is a broad-based, unmanaged index.
* The Series began operations on May 15, 1995. Prior to May 1, 1997, the Series
was managed by Phoenix Investment Counsel, Inc.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The JNL/Putnam Growth Series invests
primarily in the equity securities of domestic, large capitalization companies.
However, the Series may invest any amount or proportion of its assets in any
class or type of security believed by the sub-adviser to offer potential for
capital appreciation over both the intermediate and long term.
The Series may use derivative instruments, such as financial futures contracts
and options, for hedging and risk management. These instruments are subject to
transaction costs and certain risks, such as unanticipated changes in interest
rates, securities prices and global currency markets.
For temporary, defensive purposes, when the sub-adviser believes other types of
investments are advantageous on the basis both of risk and protection of capital
values, the Series may invest in fixed-income securities with or without
warrants or conversion features and may retain cash, or invest up to all of its
assets in cash equivalents. Taking a defensive position may reduce the potential
for appreciation of the Series' portfolio.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the JNL/Putnam
Growth Series is Putnam Investment Management, Inc. (Putnam), located at One
Post Office Square, Boston, Massachusetts 02109. Putnam has been managing mutual
funds since 1937.
C. Beth Cotner has responsibility for the day-to-day management of the Series.
Ms. Cotner, Senior Vice President, has been employed as a Senior Portfolio
Manager by Putnam since September 1995. Prior to that, Ms. Cotner was Executive
Vice President of Kemper Financial Services. Ms. Cotner has had responsibility
for the day-to-day management of the Series since May 1, 1997.
<PAGE>
JNL/Putnam Value Equity Series
Investment Objective. The investment objective of the JNL/Putnam Value Equity
Series is capital growth, with income as a secondary objective.
Principal Investment Strategies. The Series seeks to achieve its objectives by
investing primarily in a diversified portfolio of equity securities of domestic,
large-capitalization companies. For this purpose, equity securities include
common stocks, securities convertible into common stock and securities with
common stock characteristics, such as rights and warrants. The Series considers
a large-capitalization company to be one that, at the time its securities are
acquired by the Series, has a market capitalization of $2 billion or greater.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests in the equity securities
of U.S. and foreign companies, it is subject to stock market risk.
Stock prices typically fluctuate more than the values of other
types of securities, typically in response to changes in the
particular company's financial condition and factors affecting the
market in general. For example, unfavorable or unanticipated poor
earnings performance of the company may result in a decline in its
stock's price, and a broad-based market drop may also cause a
stock's price to fall.
o Foreign investing risk. Foreign investing involves risks not
typically associated with U.S. investment. These risks include,
among others, adverse fluctuations in foreign currency values as
well as adverse political, social and economic developments
affecting a foreign country. Investments in foreign countries
could be affected by factors not present in the U.S., such as
restrictions on receiving the investment proceeds from a foreign
country, foreign tax laws, and potential difficulties in enforcing
contractual obligations. Transactions in foreign securities may be
subject to less efficient settlement practices, including extended
clearance and settlement periods. Owning foreign securities could
cause the Series' performance to fluctuate more than if it held
only U.S. securities.
o Currency risk. The value of the Series' shares may change as a
result of changes in exchange rates reducing the value of the U.S.
dollar value of the Series' foreign investments. Currency exchange
rates can be volatile and affected by a number of factors, such as
the general economics of a country, the actions of U.S. and
foreign governments or central banks, the imposition of currency
controls, and speculation.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns since these shares were
first offered and shows how performance has varied from year to year. The table
shows the Series' average annual returns and compares them to the market
indicators listed. Both the chart and the table assume reinvestment of dividends
and distributions. The Series' returns shown in the chart and table below do not
reflect the deduction of any charges that are imposed under a variable annuity
contract. Those charges, which are described in the variable annuity prospectus,
will reduce the Series' performance. As with all mutual funds, the Series' past
performance does not necessarily indicate how it will perform in the future.
Year-By-Year Returns as of December 31
- --------------------------------------
24.33% 21.82% 12.48%
[Insert Chart]
1996 1997 1998
In the periods shown in the chart, the Series' highest quarterly return was
16.64% (4th quarter of 1998) and its lowest quarterly return was -11.03% (3rd
quarter of 1998).
Average Annual Total Returns as of December 31, 1998
----------------------------------------------------
1 year Life of Series*
JNL/Putnam Value Equity Series 12.48% 22.46%
S&P 500 Index 28.58% 28.63%
The S&P 500 Index is a broad-based, unmanaged index.
* The Series began operations on May 15, 1995. Prior to May 1, 1997, the Series
was managed by PPM America, Inc.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The JNL/Putnam Value Equity Series invests
primarily in equity securities of domestic, large-capitalization companies. The
sub-adviser typically selects companies whose stocks have distinctly
above-average dividend yields and market prices that it believes are undervalued
relative to the normal earning power of the company. Under this approach, the
sub-adviser seeks to identify investments where current investor enthusiasm is
low, as reflected in their valuations. The sub-adviser typically reduces the
Series' exposure to a company when its stock price approaches, in the
sub-adviser's judgment, fair valuation.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the JNL/Putnam
Value Equity Series is Putnam Investment Management, Inc. (Putnam), located at
One Post Office Square, Boston, Massachusetts 02109. Putnam has been managing
mutual funds since 1937.
Anthony I. Kreisel a Managing Director of Putnam, has responsibility for the
day-to-day management of the Series. Mr. Kreisel has been an investment
professional at Putnam since 1986. Mr. Kreisel has had responsibility for the
day-to-day management of the Series since May 1, 1997.
<PAGE>
Lazard/JNL Mid Cap Value Series
Investment Objective. The investment objective of the Lazard/JNL Mid Cap Value
Series is capital appreciation.
Principal Investment Strategies. The Series seeks to achieve its objective by
investing primarily in a non-diversified portfolio of equity securities of U.S.
companies with market capitalizations in the range of companies represented in
the Russell Mid Cap Index and that the sub-adviser believes are undervalued
based on their return on equity. The Russell Mid Cap Index is composed of
selected common stocks of medium-size U.S. companies. The Series' equity
holdings consist primarily of common stocks but may also include preferred
stocks, securities convertible into or exchangeable for common stocks, rights
and warrants, real estate investment trusts and American and Global Depositary
Receipts.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests primarily in equity
securities of U.S. companies, it is subject to stock market risk.
Stock prices typically fluctuate more than the values of other
types of securities, typically in response to changes in the
particular company's financial condition and factors affecting
the market in general. For example, unfavorable or unanticipated
poor earnings performance of the company may result in a decline
in its stock's price, and a broad-based market drop may also
cause a stock's price to fall.
o Non-diversification. The Series is "non-diversified" as such term
is defined in the Investment Company Act of 1940, as amended,
which means that more than 5%, but not more than 25%, of its
total assets may be invested in securities of any one issuer.
Thus, the Series may hold a smaller number of issuers than if it
were "diversified." With a smaller number of different issuers,
the Series is subject to more risk than another fund holding a
larger number of issuers, since changes in the financial
condition or market status of a single issuer may cause greater
fluctuation in the Series' total return and share price.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The performance of the Series will vary from year to year. The
Series' performance figures will not reflect the deduction of any charges that
are imposed under a variable annuity contract. Those charges, which are
described in the variable annuity prospectus, will reduce the Series'
performance. As with all mutual funds, the Series' past performance does not
necessarily indicate how it will perform in the future.
Performance for the Series has not been included because the Series had not been
in operation for a full fiscal year as of December 31, 1998.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The Lazard/JNL Mid Cap Value Series invests
primarily in the equity securities of undervalued medium-size U.S. companies. To
the extent its assets are not invested in such securities, the Series may invest
in the equity securities of larger capitalization companies or investment grade
fixed-income securities. In searching for undervalued medium capitalization
stocks, the sub-adviser uses a stock-selection process based primarily on
analysis of historical financial data, with little emphasis placed on
forecasting future earnings or events.
The sub-adviser does not automatically sell a security if its market
capitalization grows or falls outside the range of companies in the Russell
Midcap Index. The sub-adviser may sell a security for any of the following
reasons:
o its price rises to a level where it no longer reflects value
(target valuation);
o the underlying investment assumptions are no longer valid;
o company management changes their direction; or
o external events occur (e.g., changes in regulation, taxes and
competitive position).
The Series may use derivative instruments, such as options and futures contracts
and forward currency contracts, for hedging or to enhance return. These
instruments are subject to transaction costs and certain risks, such as
unanticipated changes in securities prices.
For temporary, defensive purposes, the Series may invest up to all of its assets
in larger capitalization companies, cash and short-term money market
instruments. Taking a defensive position may reduce the potential for
appreciation of the Series' portfolio.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the Lazard/JNL Mid
Cap Value Series is Lazard Asset Management (Lazard), 30 Rockefeller Plaza, New
York, New York 10112. Lazard is a division of Lazard Freres & Co. LLC (Lazard
Freres), a New York limited liability company, which provides its clients with a
wide variety of investment banking, brokerage and related services. Lazard and
its affiliates provide investment management services to client discretionary
accounts of both individuals and institutions.
Herbert W. Gullquist and Eileen Alexanderson share primary responsibility for
the day-to-day management of the Series. Mr. Gullquist has been with Lazard
since 1982. He is a Managing Director and a Vice-Chairman of Lazard Freres, and
is the Chief Investment Officer of Lazard. Mr. Gullquist is responsible for
monitoring all investment activity to ensure adherence to Lazard's investment
philosophy and guidelines. Ms. Alexanderson has been with Lazard since 1979. She
has been a Managing Director of Lazard Freres since January 1997; prior thereto,
Ms. Alexanderson was a Senior Vice President of Lazard. Ms. Alexanderson is
responsible for U.S./global equity management and overseeing the day-to-day
operations of the U.S. Small Cap and U.S. Mid Cap equity investment teams. Mr.
Gullquist and Ms. Alexanderson have shared responsibility for the day-to-day
management of the Series since the inception of the Series.
<PAGE>
Lazard/JNL Small Cap Value Series
Investment Objective. The investment objective of the Lazard/JNL Small Cap Value
Series is capital appreciation.
Principal Investment Strategies. The Series seeks to achieve its objective by
investing primarily in a non-diversified portfolio of equity securities of U.S.
companies with market capitalizations in the range of companies represented by
the Russell 2000 Index that the sub-adviser believes are undervalued based on
their return on equity. The Russell 2000 Index is composed of selected common
stocks of small, generally unseasoned U.S. companies. The Series' equity
holdings consist primarily of common stocks but may also include preferred
stocks, securities convertible into or exchangeable for common stocks, rights
and warrants, real estate investment trusts and American and Global Depositary
Receipts.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests in equity securities, it
is subject to stock market risk. Stock prices typically fluctuate
more than the values of other types of securities, typically in
response to changes in the particular company's financial
condition and factors affecting the market in general. For
example, unfavorable or unanticipated poor earnings performance
of the company may result in a decline in its stock's price, and
a broad-based market drop may also cause a stock's price to fall.
o Small cap investing. Investing in smaller, newer companies
generally involves greater risks than investing in larger, more
established ones. The companies in which the Series is likely to
invest have limited product lines, markets or financial resources
and may be subject to more abrupt or erratic market movements
than securities of larger, more established companies or the
market averages in general. In addition, many small
capitalization companies may be in the early stages of
development. Accordingly, an investment in the Series may not be
appropriate for all investors.
o Non-diversification. The Series is "non-diversified" as such term
is defined in the Investment Company Act of 1940, as amended,
which means that more than 5%, but not more than 25%, of its
total assets may be invested in securities of any one issuer.
Thus, the Series may hold a smaller number of issuers than if it
were "diversified." With a smaller number of different issuers,
the Series is subject to more risk than another fund holding a
larger number of issuers, since changes in the financial
condition or market status of a single issuer may cause greater
fluctuation in the Series' total return and share price.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The performance of the Series will vary from year to year. The
Series' performance figures will not reflect the deduction of any charges that
are imposed under a variable annuity contract. Those charges, which are
described in the variable annuity prospectus, will reduce the Series'
performance. As with all mutual funds, the Series' past performance does not
necessarily indicate how it will perform in the future.
Performance for the Series has not been included because the Series had not been
in operation for a full fiscal year as of December 31, 1998.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The Lazard/JNL Small Cap Value Series
invests in equity securities of small U.S. companies that, in the sub-adviser's
opinion, have one or more of the following characteristics: (i) are undervalued
relative to their earnings, cash flow, or asset values; (ii) have an attractive
price/value relationship with expectations that some catalyst will cause the
perception of value to change within 2 years; (iii) are out of favor due to
circumstances which are unlikely to harm the company's franchise or earnings
power; (iv) have low projected price-to-earnings or price-to-cash-flow
multiples; (v) have the potential to become a larger factor in the company's
business; (vi) have significant debt but have high levels of free cash flow; and
(vii) have a relatively short corporate history with the expectation that the
business may grow. In searching for undervalued small capitalization stocks, the
sub-adviser uses a stock-selection process based primarily on analysis of
historical financial data, with little emphasis placed on forecasting future
earnings or events.
The sub-adviser does not automatically sell a security if its market
capitalization grows or falls outside the range of companies in the Russell 2000
Index. The sub-adviser may sell a security for any of the following reasons:
o its price rises to a level where it no longer reflects value
(target valuation);
o the underlying investment assumptions are no longer valid;
o company management changes their direction; or
o external events occur (e.g., changes in regulation, taxes and
competitive position).
The Series may invest in equity securities of larger U.S. companies or
investment grade fixed-income securities.
The Series may use derivative instruments, such as options and futures contracts
and forward currency contracts, for hedging or to enhance return. These
instruments are subject to transaction costs and certain risks, such as
unanticipated changes in securities prices.
For temporary, defensive purposes, the Series may invest up to all of its assets
in larger capitalization companies, cash and short-term money market
instruments. Taking a defensive position may reduce the potential for
appreciation of the Series' portfolio.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the Lazard/JNL
Small Cap Value Series is Lazard Asset Management (Lazard), 30 Rockefeller
Plaza, New York, New York 10112. Lazard is a division of Lazard Freres & Co. LLC
(Lazard Freres), a New York limited liability company, which provides its
clients with a wide variety of investment banking, brokerage and related
services. Lazard and its affiliates provide investment management services to
client discretionary accounts of both individuals and institutions.
Herbert W. Gullquist and Eileen Alexanderson share primary responsibility for
the day-to-day management of the Series. Mr. Gullquist has been with Lazard
since 1982. He is a Managing Director and a Vice-Chairman of Lazard Freres, and
is the Chief Investment Officer of Lazard. Mr. Gullquist is responsible for
monitoring all investment activity to ensure adherence to Lazard's investment
philosophy and guidelines. Ms. Alexanderson has been with Lazard since 1979. She
has been a Managing Director of Lazard Freres since January 1997; prior thereto,
Ms. Alexanderson was a Senior Vice President of Lazard. Ms. Alexanderson is
responsible for U.S./global equity management and overseeing the day-to-day
operations of the U.S. Small Cap and U.S. Mid Cap equity investment teams. Mr.
Gullquist and Ms. Alexanderson have shared responsibility for the day-to-day
management of the Series since the inception of the Series.
<PAGE>
PPM America/JNL Balanced Series
Investment Objective. The investment objective of the PPM America/JNL Balanced
Series is reasonable income, long-term capital growth and preservation of
capital.
Principal Investment Strategies. The Series seeks to achieve its objectives by
investing primarily in a diversified portfolio of common stock and fixed-income
securities of U.S. companies. The Series may invest in any type or class of
security. The anticipated mix of the Series' holdings is approximately 45-75% of
its assets in equities and 25-55% in fixed-income securities.
The Series emphasizes investment-grade, fixed-income securities. However, the
Series may take a modest position in lower- or non-rated fixed-income
securities, and if, in the sub-adviser's opinion, market conditions warrant, may
increase its position in lower- or non-rated securities from time to time.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests in equity securities of
U.S. companies, it is subject to stock market risk. Stock prices
typically fluctuate more than the values of other types of
securities, typically in response to changes in the particular
company's financial condition and factors affecting the market in
general. For example, unfavorable or unanticipated poor earnings
performance of the company may result in a decline in its stock's
price, and a broad-based market drop may also cause a stock's
price to fall.
For bonds, market risk generally reflects credit risk and
interest rate risk. Credit risk is the actual or perceived risk
that the issuer of the bond will not pay the interest and
principal payments when due. Bond value typically declines if the
issuer's credit quality deteriorates. Interest rate risk is the
risk that interest rates will rise and the value of bonds,
including those held by the Series, will fall. A broad-based
market drop may also cause a bond's price to fall.
o High-yield/high-risk bonds. Lower-rated bonds involve a higher
degree of credit risk, which is the risk that the issuer will not
make interest or principal payments when due. In the event of an
unanticipated default, the Series would experience a reduction in
its income, a decline in the market value of the securities so
affected and a decline in the value of its shares. During an
economic downturn or substantial period of rising interest rates,
highly leveraged issuers may experience financial stress which
could adversely affect their ability to service principal and
interest payment obligations, to meet projected business goals
and to obtain additional financing. The market prices of
lower-rated securities are generally less sensitive to interest
rate changes than higher-rated investments, but more sensitive to
adverse economic or political changes, or individual developments
specific to the issuer. Periods of economic or political
uncertainty and change can be expected to result in volatility of
prices of these securities.
o Prepayment risk. During periods of falling interest rates, there
is the risk that a debt security with a high stated interest rate
will be prepaid before its expected maturity date.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns since these shares were
first offered and shows how performance has varied from year to year. The table
shows the Series' average annual returns and compares them to the market
indicators listed. Both the chart and the table assume reinvestment of dividends
and distributions. The Series' returns shown in the chart and table below do not
reflect the deduction of any charges that are imposed under a variable annuity
contract. Those charges, which are described in the variable annuity prospectus,
will reduce the Series' performance. As with all mutual funds, the Series' past
performance does not necessarily indicate how it will perform in the future.
Year-By-Year Returns as of December 31
- --------------------------------------
10.81% 18.43% 10.06%
[Insert Chart]
1996 1997 1998
In the periods shown in the chart, the Series' highest quarterly return was
9.77% (2nd quarter of 1997) and its lowest quarterly return was -5.54% (3rd
quarter of 1998).
Average Annual Total Returns as of December 31, 1998
----------------------------------------------------
1 year Life of Series*
PPM America/JNL Balanced Series 10.06% 15.10%
S&P 500 Index 28.58% 28.63%
Lehman Brothers Bond Index 8.68% 7.93%
Each of the S&P 500 Index and the Lehman Brothers Bond Index is a broad-based,
unmanaged index.
* The Series began operations on May 15, 1995. Prior to May 1, 1997, the Series
was managed by Phoenix Investment Counsel, Inc.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The PPM America/JNL Balanced Series invests
primarily in common stocks and fixed-income securities but may also invest in
securities convertible into common stocks, deferred debt obligations and zero
coupon bonds.
The Series may use derivative instruments, such as options and financial futures
contracts, for hedging purposes. These instruments are subject to transaction
costs and certain risks, such as unanticipated changes in interest rates and
securities prices.
For temporary, defensive purposes, the Series may invest up to all of its assets
in cash equivalents, such as U.S. Government securities and high grade
commercial paper. Taking a defensive position may reduce the potential for
appreciation of the Series' portfolio.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the PPM America/JNL
Balanced Series is PPM America, Inc. (PPM), which is located at 225 West Wacker
Drive, Chicago, Illinois 60606. PPM, an affiliate of the investment adviser to
the Trust, manages assets of Jackson National Life Insurance Company and of
other affiliated companies.
PPM supervises and manages the investment portfolio of the Series and directs
the purchase and sale of the Series' investment securities. PPM utilizes teams
of investment professionals acting together to manage the assets of the Series.
The teams meet regularly to review portfolio holdings and to discuss purchase
and sale activity. The teams adjust holdings in the portfolios as they deem
appropriate in the pursuit of the Series' investment objectives. PPM has
supervised and managed the investment portfolio of the Series since May 1, 1997.
<PAGE>
PPM America/JNL High Yield Bond Series
Investment Objective. The primary investment objective of the PPM America/JNL
High Yield Bond Series is to provide 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.
Principal Investment Strategies. The Series attempts to achieve its objective by
investing substantially in a diversified portfolio of long-term (over 10 years
to maturity) and intermediate-term (3 to 10 years to maturity) fixed-income
securities of U.S. and foreign issuers, with emphasis on higher-yielding,
higher-risk, lower-rated or unrated corporate bonds. These bonds, commonly known
as "junk bonds," are those rated Ba or below by Moody's or BB or below by S&P
or, if unrated, considered by the sub-adviser to be of comparable quality.
In pursuing its secondary investment objective of capital appreciation, the
Series may purchase high-yield bonds that the sub-adviser expects will increase
in value due to improvements in their credit quality or ratings or anticipated
declines in interest rates. In addition, the Series may invest for this purpose
up to 25% of its assets in equity securities, such as common stocks or
securities convertible into or exchangeable for common stock.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o High-yield/high-risk bonds. Lower-rated bonds involve a higher
degree of credit risk, which is the risk that the issuer will not
make interest or principal payments when due. In the event of an
unanticipated default, the Series would experience a reduction in
its income, a decline in the market value of the securities so
affected and a decline in the value of its shares. During an
economic downturn or substantial period of rising interest rates,
highly leveraged issuers may experience financial stress which
could adversely affect their ability to service principal and
interest payment obligations, to meet projected business goals
and to obtain additional financing. The market prices of
lower-rated securities are generally less sensitive to interest
rate changes than higher-rated investments, but more sensitive to
adverse economic or political changes, or individual developments
specific to the issuer. Periods of economic or political
uncertainty and change can be expected to result in volatility of
prices of these securities.
o Market risk. Because the Series invests in the securities of U.S.
and foreign issuers, it is subject to market risk. For bonds,
market risk generally reflects credit risk and interest rate
risk. Credit risk is the actual or perceived risk that the issuer
of the bond will not pay the interest and principal payments when
due. Bond value typically declines if the issuer's credit quality
deteriorates. Interest rate risk is the risk that interest rates
will rise and the value of bonds, including those held by the
Series, will fall. A broad-based market drop may also cause a
bond's price to fall.
To the extent the Series invests in the equity securities of U.S.
and foreign companies, it is subject to stock market risk. Stock
prices typically fluctuate more than the values of other types of
securities, typically in response to changes in the particular
company's financial condition and factors affecting the market in
general. For example, unfavorable or unanticipated poor earnings
performance of the company may result in a decline in its stock's
price, and a broad-based market drop may also cause a stock's
price to fall.
o Prepayment risk. During periods of falling interest rates, there
is the risk that a debt security with a high stated interest rate
will be prepaid before its expected maturity date.
o Foreign investing risk. Foreign investing involves risks not
typically associated with U.S. investment. These risks include,
among others, adverse fluctuations in foreign currency values as
well as adverse political, social and economic developments
affecting a foreign country. Investments in foreign countries
could be affected by factors not present in the U.S., such as
restrictions on receiving the investment proceeds from a foreign
country, foreign tax laws, and potential difficulties in
enforcing contractual obligations. Transactions in foreign
securities may be subject to less efficient settlement practices,
including extended clearance and settlement periods. Owning
foreign securities could cause the Series' performance to
fluctuate more than if it held only U.S. securities. To the
extent that the Series invests in bonds issued by a foreign
government, the Series may have limited legal recourse in the
event of default. Political conditions, especially a country's
willingness to meet the terms of its debt obligations, can create
special risks.
o Currency risk. The value of the Series' shares may change as a
result of changes in exchange rates reducing the value of the
U.S. dollar value of the Series' foreign investments. Currency
exchange rates can be volatile and affected by a number of
factors, such as the general economics of a country, the actions
of U.S. and foreign governments or central banks, the imposition
of currency controls, and speculation.
Treating high current income as its primary investment objective means that the
Series may forego opportunities that would result in capital gains and may
accept prudent risks to capital value, in each case to take advantage of
opportunities for higher current income. In addition, the performance of the
Series depends on the adviser's ability to effectively implement the investment
strategies of the Series.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns since these shares were
first offered and shows how performance has varied from year to year. The table
shows the Series' average annual returns and compares them to the market
indicators listed. Both the chart and the table assume reinvestment of dividends
and distributions. The Series' returns shown in the chart and table below do not
reflect the deduction of any charges that are imposed under a variable annuity
contract. Those charges, which are described in the variable annuity prospectus,
will reduce the Series' performance. As with all mutual funds, the Series' past
performance does not necessarily indicate how it will perform in the future.
Year-By-Year Returns as of December 31
- --------------------------------------
12.90% 15.05% 3.84%
[Insert Chart]
1996 1997 1998
In the periods shown in the chart, the Series' highest quarterly return was
5.71% (3rd quarter of 1997) and its lowest quarterly return was -4.56% (3rd
quarter of 1998).
Average Annual Total Returns as of December 31, 1998
----------------------------------------------------
1 year Life of Series*
PPM America/JNL High Yield Bond Series 3.84% 10.40%
Lehman Brothers High Yield Index 1.88% 9.52%
The Lehman Brothers High Yield Index is a broad-based, unmanaged index.
* The Series began operations on May 15, 1995.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The PPM America/JNL High Yield Bond Series
invests the majority of its assets under normal market conditions in U.S.
corporate bonds of below investment-grade quality and with maturities exceeding
three years. However, the Series will not invest more than 10% of its total
assets in bonds rated C by Moody's or D by S&P (or unrated but considered by the
sub-adviser to be of comparable quality). Lower-rated securities generally
involve a higher risk of default than higher-rated ones.
In addition to investing in securities of foreign issuers, the Series may also
hold a portion of its assets in foreign currencies and enter into forward
currency exchange contracts, currency options, currency and financial futures
contracts, and options on such futures contracts. The Series may enter into
repurchase agreements and firm commitment agreements and may purchase securities
on a when-issued basis. The Series may invest without limit in zero coupon
bonds.
The Series may adopt a temporary defensive position, such as investing up to all
of its assets in cash or cash equivalents, during adverse market, economic or
other circumstances that the sub-adviser believes require immediate action to
avoid losses. In doing so, the Series may not be pursuing its investment
objectives.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the PPM America/JNL
High Yield Bond Series is PPM America, Inc. (PPM), which is located at 225 West
Wacker Drive, Chicago, Illinois 60606. PPM, an affiliate of the investment
adviser to the Trust, manages assets of Jackson National Life Insurance Company
and of other affiliated companies.
PPM supervises and manages the investment portfolio of the Series and directs
the purchase and sale of the Series' investment securities. PPM utilizes teams
of investment professionals acting together to manage the assets of the Series.
The teams meet regularly to review portfolio holdings and to discuss purchase
and sale activity. The teams adjust holdings in the portfolios as they deem
appropriate in the pursuit of the Series' investment objectives. PPM has
supervised and managed the investment portfolio of the Series since inception of
the Series.
<PAGE>
PPM America/JNL Money Market Series
Investment Objective. The investment objective of the PPM America/JNL Money
Market Series is to achieve as high a level of current income as is consistent
with the preservation of capital and maintenance of liquidity by investing in
high quality, short-term money market instruments.
Principal Investment Strategies. The Series invests in high quality, U.S.
dollar-denominated money market instruments that mature in 397 days or less. The
sub-adviser manages the Series to meet the requirements of Rule 2a-7 under the
Investment Company Act of 1940, as amended, including those as to quality,
diversification and maturity. The Series may invest more than 25% of its assets
in the U.S. banking industry.
Principal Risks of Investing in the Series. An investment in the Series is not
insured or guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Although the Series seeks to preserve the value of your
investment at $1.00 per share, you could lose money by investing in the Series.
A variety of factors may influence its investment performance, such as:
o Market risk. Fixed income securities in general are subject to
credit risk and market risk. Credit risk is the actual or
perceived risk that the issuer of the bond will not pay the
interest and principal payments when due. Bond value typically
declines if the issuer's credit quality deteriorates. Market
risk, also known as interest rate risk, is the risk that interest
rates will rise and the value of bonds, including those held by
the Series, will fall. A broad-based market drop may also cause a
bond's price to fall.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns since these shares were
first offered and shows how performance has varied from year to year. The table
shows the Series' average annual returns and compares them to the market
indicators listed. Both the chart and the table assume reinvestment of dividends
and distributions. The Series' returns shown in the chart and table below do not
reflect the deduction of any charges that are imposed under a variable annuity
contract. Those charges, which are described in the variable annuity prospectus,
will reduce the Series' performance. As with all mutual funds, the Series' past
performance does not necessarily indicate how it will perform in the future.
Year-By-Year Returns as of December 31
- --------------------------------------
4.87% 5.01% 4.99%
[Insert Chart]
1996 1997 1998
In the periods shown in the chart, the Series' highest quarterly return was
1.30% (3rd quarter of 1995) and its lowest quarterly return was 1.17% (1st
quarter of 1997).
Average Annual Total Returns as of December 31, 1998
----------------------------------------------------
1 year Life of Series*
PPM America/JNL Money Market Series 4.99% 5.00%
Merrill Lynch Treasury Bill
Index (3 month) 5.23% 5.405%
The 7-day yield of the Series on December 31, 1998, was 4.78%.
The Merrill Lynch Treasury Bill Index is a broad-based unmanaged index.
* The Series began operations on May 15, 1995.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The PPM America/JNL Money Market Series
invests exclusively in the following types of high quality, U.S.
dollar-denominated money market instruments that mature in 397 days or less:
o Obligations issued or guaranteed as to principal and interest by
the U.S. Government, its agencies and instrumentalities;
o Obligations, such as time deposits, certificates of deposit and
bankers acceptances, issued by U.S. banks and savings banks that
are members of the Federal Deposit Insurance Corporation,
including their foreign branches and foreign subsidiaries, and
issued by domestic and foreign branches of foreign banks;
o Corporate obligations, including commercial paper, of domestic
and foreign issuers;
o Obligations issued or guaranteed by one or more foreign
governments or any of their political subdivisions, agencies or
instrumentalities, including obligations of supranational
entities; and
o Repurchase agreements on obligations issued or guaranteed by the
U.S. Government, its agencies or instrumentalities.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the PPM America/JNL
Money Market Series is PPM America, Inc. (PPM), which is located at 225 West
Wacker Drive, Chicago, Illinois 60606. PPM, an affiliate of the investment
adviser to the Trust, manages assets of Jackson National Life Insurance Company
and of other affiliated companies.
PPM supervises and manages the investment portfolio of the Series and directs
the purchase and sale of the Series' investment securities. PPM utilizes teams
of investment professionals acting together to manage the assets of the Series.
The teams meet regularly to review portfolio holdings and to discuss purchase
and sale activity. The teams adjust holdings in the portfolios as they deem
appropriate in the pursuit of the Series' investment objectives. PPM has
supervised and managed the investment portfolio of the Series since inception of
the Series.
<PAGE>
Salomon Brothers/JNL Global Bond Series
Investment Objective. The primary investment objective of the Salomon
Brothers/JNL Global Bond Series is to seek a high level of current income. As a
secondary objective, the Series seeks capital appreciation.
Principal Investment Strategies. The Series seeks to achieve its objective
through a diversified portfolio consisting primarily of fixed income securities
of U.S. and foreign issuers. The sub-adviser invests the Series' assets
primarily by making strategic allocations among: U.S. investment grade bonds;
high-yield bonds; non-U.S. investment grade bonds; and emerging markets debt
securities. The sub-adviser makes these allocations based on its analysis of
current economic and market conditions, and the relative risks and
opportunities, applicable to those types of securities. The sub-adviser may
invest a significant portion of the Series' assets in medium- or lower-quality
securities.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests in fixed-income
securities of U.S. and foreign issuers, it is subject to market
risk. For bonds, market risk generally reflects credit risk and
interest rate risk. Credit risk is the actual or perceived risk
that the issuer of the bond will not pay the interest and
principal payments when due. Bond value typically declines if the
issuer's credit quality deteriorates. Interest rate risk is the
risk that interest rates will rise and the value of bonds,
including those held by the Series, will fall. A broad-based
market drop may also cause a bond's price to fall.
o Prepayment risk. During periods of falling interest rates, there
is the risk that a debt security with a high stated interest rate
will be prepaid before its expected maturity date.
o Foreign investing risk. Foreign investing involves risks not
typically associated with U.S. investment. These risks include,
among others, adverse fluctuations in foreign currency values as
well as adverse political, social and economic developments
affecting a foreign country. Investments in foreign countries
could be affected by factors not present in the U.S., such as
restrictions on receiving the investment proceeds from a foreign
country, foreign tax laws, and potential difficulties in
enforcing contractual obligations. Transactions in foreign
securities may be subject to less efficient settlement practices,
including extended clearance and settlement periods. Owning
foreign securities could cause the Series' performance to
fluctuate more than if it held only U.S. securities. To the
extent that the Series invests in bonds issued by a foreign
government, the Series may have limited legal recourse in the
event of default. Political conditions, especially a country's
willingness to meet the terms of its debt obligations, can create
special risks.
o High-yield/high-risk bonds. Lower rated bonds involve a higher
degree of credit risk, which is the risk that the issuer will not
make interest or principal payments when due. In the event of an
unanticipated default, the Series would experience a reduction in
its income, a decline in the market value of the securities so
affected and a decline in the value of its shares. During an
economic downturn or substantial period of rising interest rates,
highly leveraged issuers may experience financial stress which
could adversely affect their ability to service principal and
interest payment obligations, to meet projected business goals
and to obtain additional financing. The market prices of
lower-rated securities are generally less sensitive to interest
rate changes than higher-rated investments, but more sensitive to
adverse economic or political changes, or individual developments
specific to the issuer. Periods of economic or political
uncertainty and change can be expected to result in volatility of
prices of these securities.
o Currency risk. The value of the Series' shares may change as a
result of changes in exchange rates reducing the value of the
U.S. dollar value of the Series' foreign investments. Currency
exchange rates can be volatile and affected by a number of
factors, such as the general economics of a country, the actions
of U.S. and foreign governments or central banks, the imposition
of currency controls, and speculation.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns since these shares were
first offered and shows how performance has varied from year to year. The table
shows the Series' average annual returns and compares them to the market
indicators listed. Both the chart and the table assume reinvestment of dividends
and distributions. The Series' returns shown in the chart and table below do not
reflect the deduction of any charges that are imposed under a variable annuity
contract. Those charges, which are described in the variable annuity prospectus,
will reduce the Series' performance. As with all mutual funds, the Series' past
performance does not necessarily indicate how it will perform in the future.
Year-By-Year Returns as of December 31
- --------------------------------------
14.39% 10.66% 2.46%
[Insert Chart]
1996 1997 1998
In the periods shown in the chart, the Series' highest quarterly return was
4.86% (2nd quarter of 1997) and its lowest quarterly return was -2.72% (3rd
quarter of 1998).
Average Annual Total Returns As of December 31, 1998
----------------------------------------------------
1 year Life of Series*
Salomon Brothers/JNL Global Bond
Series 2.46% 9.47%
Salomon Smith Barney Broad Investment
Grade Index 8.72% 8.56%
The Salomon Smith Barney Broad Investment Grade Index is a broad-based,
unmanaged index.
* The Series began operations on May 15, 1995.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The Salomon Brothers/JNL Global Bond Series
invests in a globally diverse portfolio of fixed-income investments. The
sub-adviser has broad discretion to invest the Series' assets among certain
segments of the fixed-income market, primarily U.S. investment-grade bonds,
high-yield corporate debt securities, emerging market debt securities and
investment-grade foreign debt securities. These segments include U.S. Government
securities and mortgage- and other asset-backed securities (including
interest-only or principal-only securities), as well as debt obligations issued
or guaranteed by a foreign government or supranational organization.
In determining the assets to invest in each type of security, the sub-adviser
relies in part on quantitative analytical techniques that measure relative risks
and opportunities of each type of security based on current and historical
economic, market, political and technical data for each type of security, as
well as on its own assessment of economic and market conditions both on a global
and local (country) basis. The sub-adviser continuously reviews the allocation
of assets for the Series and makes such adjustments as it deems appropriate.
The sub-adviser has discretion to select the range of maturities of the various
fixed income securities in which the Series invests. The sub-adviser anticipates
that, under current market conditions, the Series' portfolio securities will
have a weighted average life of 6 to 10 years. However, the weighted average
life of the portfolio securities may vary substantially from time to time
depending on economic and market conditions.
The sub-adviser may invest in medium or lower-rated securities. Investments of
this type involve significantly greater risks, including price volatility and
risk of default in the payment of interest and principal, than higher-quality
securities.
When the sub-adviser believes that adverse conditions prevail in the market for
fixed-income securities, the Series may, for temporary defensive purposes,
invest its assets without limit in high-quality, short-term money market
instruments. Doing so may reduce the potential for high current income or
appreciation of the Series' portfolio.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the Salomon
Brothers/JNL Global Bond Series is Salomon Brothers Asset Management Inc (SBAM).
SBAM was incorporated in 1987, and, together with affiliates in London,
Frankfurt, Tokyo and Hong Kong, SBAM provides a broad range of fixed-income and
equity investment advisory services to various individual and institutional
clients located throughout the world and serves as sub-adviser to various
investment companies. SBAM's business offices are located at 7 World Trade
Center, New York, New York 10048.
In connection with SBAM's service as sub-adviser to the Series, SBAM Limited,
whose business address is Victoria Plaza, 111 Buckingham Palace Road, London
SW1W OSB, England, provides certain sub-advisory services to SBAM relating to
currency transactions and investments in non-dollar denominated debt securities
for the benefit of the Series. SBAM Limited is compensated by SBAM at no
additional expense to the Trust.
Peter J. Wilby is primarily responsible for the day-to-day management of the
high-yield and emerging market debt securities portions of the Series. Mr. Wilby
has had primary responsibility for the day-to-day management of the high-yield
and emerging market debt securities portions of the Series since the inception
of the Series. Beth Semmel assists Mr. Wilby in the day-to-day management of the
Series. Mr. Wilby, who joined SBAM in 1989, is a Managing Director of Salomon
Brothers Inc. and SBAM and Senior Portfolio Manager of SBAM, is responsible for
investment company and institutional portfolios which invest in high-yield
non-U.S. and U.S. corporate debt securities and high-yield foreign sovereign
debt securities. From 1984 to 1989, Mr. Wilby was employed by Prudential Capital
Management Group (Prudential) where he served as Director of Prudential's credit
research unit and as a corporate and sovereign credit analyst with Prudential.
Mr. Wilby also managed high-yield bonds and leveraged equities in the mutual
funds and institutional portfolios at Prudential. Ms. Semmel is a Director and
Portfolio Manager of SBAM and a Director of Salomon Brothers Inc. Ms. Semmel
joined SBAM in May of 1993, where she manages high-yield portfolios. Prior to
joining SBAM, Ms. Semmel spent four years as a high-yield bond analyst at Morgan
Stanley Asset Management. Ms. Semmel has assisted in the day-to-day management
of the Series since inception of the Series.
David J. Scott, a Managing Director and Senior Portfolio Manager of SBAM, is
primarily responsible for currency transactions and investments in non-dollar
denominated debt securities for the Series. Prior to joining SBAM Limited in
April 1994, Mr. Scott worked for four years at J.P. Morgan Investment Management
Inc. (J.P. Morgan) where he was responsible for global and non-dollar portfolios
for clients including departments of various governments, pension funds and
insurance companies. Before joining J.P. Morgan, Mr. Scott worked for three
years at Mercury Asset Management where he was responsible for captive insurance
portfolios and products. Mr. Scott has had responsibility for currency
transactions and investment in non-dollar denominated debt securities for the
Series since inception of the Series.
Roger Lavan is primarily responsible for the mortgage-backed securities and U.S.
Government securities portions of the Series. Mr. Lavan joined SBAM in 1990 and
is a Director and Portfolio Manager responsible for investment grade portfolios.
Prior to joining SBAM, Mr. Lavan spent four years analyzing portfolios for
Salomon Brothers Inc.'s Fixed Income Sales Group and Product Support Divisions.
Mr. Lavan has had responsibility for mortgage-backed securities and U.S.
Government securities for the Series since the inception of the Series.
<PAGE>
Salomon Brothers/JNL U.S. Government & Quality Bond Series
Investment Objective. The investment objective of the Salomon Brothers/JNL U.S.
Government & Quality Bond Series is to obtain a high level of current income.
Principal Investment Strategies. The Series seeks to achieve its objective by
investing primarily in a diversified portfolio of 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. The Series may invest in securities of any maturity or
effective duration, so the composition and weighted average maturity of the
portfolio will vary.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests in fixed-income
securities of U.S. and foreign issuers, it is subject to market
risk. For bonds, market risk generally reflects credit risk and
interest rate risk. Credit risk is the actual or perceived risk
that the issuer of the bond will not pay the interest and
principal payments when due. Bond value typically declines if the
issuer's credit quality deteriorates. Interest rate risk is the
risk that interest rates will rise and the value of bonds,
including those held by the Series, will fall. A broad-based
market drop may also cause a bond's price to fall.
o Prepayment risk. During periods of falling interest rates, there
is the risk that a debt security with a high stated interest rate
will be prepaid before its expected maturity date.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns since these shares were
first offered and shows how performance has varied from year to year. The table
shows the Series' average annual returns and compares them to the market
indicators listed. Both the chart and the table assume reinvestment of dividends
and distributions. The Series' returns shown in the chart and table below do not
reflect the deduction of any charges that are imposed under a variable annuity
contract. Those charges, which are described in the variable annuity prospectus,
will reduce the Series' performance. As with all mutual funds, the Series' past
performance does not necessarily indicate how it will perform in the future.
Year-By-Year Returns as of December 31
- --------------------------------------
2.58% 9.16% 9.40%
[Insert Chart]
1996 1997 1998
In the periods shown in the chart, the Series' highest quarterly return was
5.86% (3rd quarter of 1998) and its lowest quarterly return was -2.13% (1st
quarter of 1996).
Average Annual Total Returns as of December 31, 1998
----------------------------------------------------
1 year Life of Series*
Salomon Brothers/JNL U.S.
Government & Quality Bond Series 9.40% 7.71%
Salomon Brothers Treasury Index 10.00% 8.55%
The Salomon Brothers Treasury Index is a broad-based, unmanaged index.
* The Series began operations on May 15, 1995.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The Salomon Brothers/JNL U.S. Government &
Quality Bond Series invests at least 65% of its assets in:
(i) U.S. Treasury obligations;
(ii) obligations issued or guaranteed by agencies or instrumentalities
of the U.S. Government which are backed by their own credit and
may not be backed by the full faith and credit of the U.S.
Government;
(iii)mortgage-backed securities guaranteed by the Government National
Mortgage Association that are supported by the full faith and
credit of the U.S. Government. Such securities entitle the holder
to receive all interest and principal payments due whether or not
payments are actually made on the underlying mortgages;
(iv) mortgage-backed securities guaranteed by agencies or
instrumentalities of the U.S. Government which are supported by
their own credit but not the full faith and credit of the U.S.
Government, such as the Federal Home Loan Mortgage Corporation
and Fannie Mae (formerly, the Federal National Mortgage
Association);
(v) collateralized mortgage obligations issued by private issuers for
which the underlying mortgage-backed securities serving as
collateral are backed by (i) the credit alone of the U.S.
Government agency or instrumentality which issues or guarantees
the mortgage-backed securities, or (ii) the full faith and credit
of the U.S. Government; and
(vi) repurchase agreements collateralized by any of the foregoing.
Any guarantee of the securities in which the Series invests runs only to the
principal and interest payments on the securities and not to the market value of
such securities or to the principal and interest payments on the underlying
mortgages. A security issued or guaranteed by a U.S. Government agency may
significantly fluctuate in value, and the Series may not receive the originally
anticipated yield on the security. Shares of the Series are not insured or
guaranteed by the U.S. Government, its agencies or instrumentalities.
The sub-adviser seeks to add value by actively managing the portfolio's interest
rate exposure, yield curve positioning, sector allocation and security
selection. In selecting mortgage-backed securities for the Series, the
sub-adviser determines a security's average maturity and duration according to
mathematical models that reflect certain payment assumptions and estimates of
future economic factors. These estimates may vary from actual results, and the
average maturity and duration of mortgage-backed derivative securities may not
reflect the price volatility of those securities in certain market conditions.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the Salomon
Brothers/JNL U.S. Government & Quality Bond Series is Salomon Brothers Asset
Management Inc (SBAM). SBAM was incorporated in 1987, and, together with
affiliates in London, Frankfurt, Tokyo and Hong Kong, SBAM provides a broad
range of fixed-income and equity investment advisory services to various
individual and institutional clients located throughout the world and serves as
sub-adviser to various investment companies. SBAM's business offices are located
at 7 World Trade Center, New York, New York 10048.
Roger Lavan is primarily responsible for the day-to-day management of the
Series. Mr. Lavan joined SBAM in 1990 and is a Director and Portfolio Manager
responsible for investment grade portfolios. Prior to joining SBAM, Mr. Lavan
spent four years analyzing portfolios for Salomon Brothers Inc.'s Fixed Income
Sales Group and Product Support Divisions. Mr. Lavan has had primary
responsibility for the day-to-day management of the Series since June 1, 1998.
<PAGE>
T. Rowe Price/JNL Established Growth Series
Investment Objective. The investment objective of the T. Rowe Price/JNL
Established Growth Series is long-term growth of capital and increasing dividend
income.
Principal Investment Strategies. The Series seeks to achieve its objective by
investing primarily in a diversified portfolio of common stocks of
well-established growth companies. A growth company is one which (i) has
demonstrated historical growth of earnings faster than the growth of inflation
and the economy in general, and (ii) has indications of being able to continue
this growth pattern in the future.
While the Series will invest principally in U.S. companies, a substantial
portion of the Series' assets will be invested in foreign stocks.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests primarily in equity
securities, it is subject to stock market risk. Stock prices
typically fluctuate more than the values of other types of
securities, typically in response to changes in the particular
company's financial condition and factors affecting the market in
general. For example, unfavorable or unanticipated poor earnings
performance of the company may result in a decline in its stock's
price, and a broad-based market drop may also cause a stock's
price to fall.
o Foreign investing risk. Foreign investing involves risks not
typically associated with U.S. investment. These risks include,
among others, adverse fluctuations in foreign currency values as
well as adverse political, social and economic developments
affecting a foreign country. Investments in foreign countries
could be affected by factors not present in the U.S., such as
restrictions on receiving the investment proceeds from a foreign
country, foreign tax laws, and potential difficulties in
enforcing contractual obligations. Transactions in foreign
securities may be subject to less efficient settlement practices,
including extended clearance and settlement periods. Owning
foreign securities could cause the Series' performance to
fluctuate more than if it held only U.S. securities.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns since these shares were
first offered and shows how performance has varied from year to year. The table
shows the Series' average annual returns and compares them to the market
indicators listed. Both the chart and the table assume reinvestment of dividends
and distributions. The Series' returns shown in the chart and table below do not
reflect the deduction of any charges that are imposed under a variable annuity
contract. Those charges, which are described in the variable annuity prospectus,
will reduce the Series' performance. As with all mutual funds, the Series' past
performance does not necessarily indicate how it will perform in the future.
Year-By-Year Returns as of December 31
- --------------------------------------
22.59% 29.47% 27.78%
[Insert Chart]
1996 1997 1998
In the periods shown in the chart, the Series' highest quarterly return was
23.36% (4th quarter of 1998) and its lowest quarterly return was -11.63% (3rd
quarter of 1998).
Average Annual Total Returns as of December 31, 1998
----------------------------------------------------
1 year Life of Series*
T. Rowe Price/JNL Established
Growth Series 27.78% 28.14%
S&P 500 Index 28.58% 28.63%
The S&P 500 Index is a broad-based, unmanaged index.
* The Series began operations on May 15, 1995.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The T. Rowe Price/JNL Established Growth
Series invests most of its assets in common stocks of U.S. companies. However,
the Series may invest in other securities, including convertible securities,
warrants, preferred stocks and corporate and government debt obligations.
The Series may use derivative instruments, such as options and futures
contracts, for hedging purposes and to maintain market exposure. These
instruments are subject to transaction costs and certain risks, such as
unanticipated changes in securities prices.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the T. Rowe
Price/JNL Established Growth Series is T. Rowe Price Associates, Inc. (T. Rowe),
located at 100 East Pratt Street, Baltimore, Maryland 21202. T. Rowe was founded
in 1937. T. Rowe and its affiliates provide investment advisory services to
individual and institutional investor accounts.
Robert W. Smith is responsible for the day-to-day management of the Series. Mr.
Smith is a Managing Director and Equity Portfolio Manager for T. Rowe. Mr. Smith
is a Vice President of Price-Fleming and is also responsible for the North
American component of other investment company and institutional client
portfolios. Prior to joining T. Rowe in 1992, Mr. Smith was employed as an
Investment Analyst for Massachusetts Financial Services. He earned a BS (finance
and economics) from the University of Delaware and an MBA (finance) from the
Darden Graduate School of Business Administration, University of Virginia. Mr.
Smith has had responsibility for the day-to-day management of the Series since
February 21, 1997.
<PAGE>
T. Rowe Price/JNL International Equity Investment Series
Investment Objective. The investment objective of the T. Rowe Price/JNL
International Equity Investment Series is long-term growth of capital.
Principal Investment Strategies. The Series seeks to achieve its objective
through a diversified portfolio consisting primarily of common stocks of
established, non-U.S. companies. The Series normally has at least three
countries represented in its portfolio, including both developed and emerging
markets.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests in stocks, it is subject
to stock market risk. Stock prices typically fluctuate more than
the values of other types of securities, typically in response to
changes in the particular company's financial condition and
factors affecting the market in general. For example, unfavorable
or unanticipated poor earnings performance of the company may
result in a decline in its stock's price, and a broad-based
market drop may also cause a stock's price to fall.
o Foreign investing risk. Foreign investing involves risks not
typically associated with U.S. investment. These risks include,
among others, adverse fluctuations in foreign currency values as
well as adverse political, social and economic developments
affecting a foreign country. Investments in foreign countries
could be affected by factors not present in the U.S., such as
restrictions on receiving the investment proceeds from a foreign
country, foreign tax laws, and potential difficulties in
enforcing contractual obligations. Transactions in foreign
securities may be subject to less efficient settlement practices,
including extended clearance and settlement periods. Owning
foreign securities could cause the Series' performance to
fluctuate more than if it held only U.S. securities.
o Emerging markets risk. The Series may invest a portion of its
assets in securities of issuers in emerging markets, which
involves greater risk. Emerging market countries typically have
economic and political systems that are less developed, and
likely to be less stable, than those of more advanced countries.
Emerging market countries may have policies that restrict
investment by foreigners, and there is a higher risk of a
government taking private property. Low or nonexistent trading
volume in securities of issuers in emerging markets may result in
a lack of liquidity and in price volatility. Issuers in emerging
markets typically are subject to a greater degree of change in
earnings and business prospects than are companies in developed
markets.
o Currency risk. The value of the Series' shares may change as a
result of changes in exchange rates reducing the value of the
U.S. dollar value of the Series' foreign investments. Currency
exchange rates can be volatile and affected by a number of
factors, such as the general economics of a country, the actions
of U.S. and foreign governments or central banks, the imposition
of currency controls, and speculation.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns since these shares were
first offered and shows how performance has varied from year to year. The table
shows the Series' average annual returns and compares them to the market
indicators listed. Both the chart and the table assume reinvestment of dividends
and distributions. The Series' returns shown in the chart and table below do not
reflect the deduction of any charges that are imposed under a variable annuity
contract. Those charges, which are described in the variable annuity prospectus,
will reduce the Series' performance. As with all mutual funds, the Series' past
performance does not necessarily indicate how it will perform in the future.
Year-By-Year Returns as of December 31
- --------------------------------------
13.91% 2.65% 14.43%
[Insert Chart]
1996 1997 1998
In the periods shown in the chart, the Series' highest quarterly return was
16.55% (4th quarter of 1998) and its lowest quarterly return was -13.48% (3rd
quarter of 1998).
Average Annual Total Returns as of December 31, 1998
----------------------------------------------------
1 year Life of Series*
T. Rowe Price/JNL International
Equity Investment Series 14.43% 10.43%
Morgan Stanley Europe and
Australasia, Far East Equity Index 20.33% 8.13%
The Morgan Stanley Europe and Australasia, Far East Equity Index is a
broad-based, unmanaged index.
* The Series began operations on May 15, 1995.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The T. Rowe Price/JNL International Equity
Investment Series invests in foreign securities that the sub-adviser believes
offer significant potential for long-term appreciation and investment
diversification. In addition to common stocks, the Series may also invest in
other types of securities, such as preferred stocks, convertible securities,
fixed-income securities.
In analyzing companies for investment, the sub-adviser ordinarily looks for one
or more of the following characteristics: an above-average earnings growth per
share; high return on invested capital; healthy balance sheet with relatively
low debt; sound financial and accounting policies and overall financial
strength; strong competitive advantages; effective research and product
development and marketing; efficient service; pricing flexibility; strength of
management; and general operating characteristics which will enable the
companies to compete successfully in their market place. Current dividend income
is not a prerequisite in the selection of portfolio companies. However, the
Series generally invests in companies that have a record of paying dividends,
which the sub-adviser expects will increase in future years as earnings
increase.
The Series may use derivative instruments, such as futures contracts, options
and forward currency contracts, for hedging and risk management. These
instruments are subject to transaction costs and certain risks, such as
unanticipated changes in securities prices and global currency markets.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the T. Rowe
Price/JNL International Equity Investment Series is Rowe Price-Fleming
International, Inc. (Price-Fleming), located at 100 East Pratt Street,
Baltimore, Maryland 21202. Price-Fleming is one of America's largest
international mutual fund asset managers.
There is an investment advisory group that has day-to-day responsibility for
managing the Series and developing and executing the Series' investment program.
The Series' advisory group is composed of the following members: Martin G. Wade,
Vice Chairman and Chief Executive Officer of Price-Fleming, John R. Ford, Chief
Investment Officer of Price-Fleming, James B.M. Seddon, Vice President of
Price-Fleming, Mark C.J. Bickford-Smith, Vice President of Price-Fleming, and
David J.L. Warren, President of Price-Fleming. The Series' advisory group has
had day-to-day responsibility for managing the Series since the inception of the
Series.
Martin Wade joined Price-Fleming in 1979 and has 30 years of experience with the
Fleming Group in research, client service, and investment management. (Fleming
Group includes Robert Fleming and/or Jardine Fleming Group Limited). John Ford
joined Price-Fleming in 1982 and has 19 years of experience with the Fleming
Group in research and portfolio management. James Seddon joined Price-Fleming in
1987 and has 12 years of experience in investment management. Mark
Bickford-Smith joined Price-Fleming in 1995 and has 14 years experience with the
Fleming Group in research and financial analysis. David Warren joined
Price-Fleming in 1983 and has 18 years of experience in equity research,
fixed-income research and portfolio management.
<PAGE>
T. Rowe Price/JNL Mid-Cap Growth Series
Investment Objective. The investment objective of the T. Rowe Price/JNL Mid-Cap
Growth Series is long-term growth of capital.
Principal Investment Strategies. The Series seeks to achieve its objective by
investing primarily in a diversified portfolio of common stock of medium-sized
(mid-cap) U.S. companies which the sub-adviser believes have the potential for
above-average earnings growth. A mid-cap company is one whose market
capitalization, at the time of acquisition by the Series, falls within the
capitalization range of companies in the S&P MidCap 400 Index.
Principal Risks of Investing in the Series. An investment in the Series is not
guaranteed. As with any mutual fund, the value of the Series' shares will change
and you could lose money by investing in the Series. A variety of factors may
influence its investment performance, such as:
o Market risk. Because the Series invests in equity securities, it
is subject to stock market risk. Stock prices typically fluctuate
more than the values of other types of securities, typically in
response to changes in the particular company's financial
condition and factors affecting the market in general. For
example, unfavorable or unanticipated poor earnings performance
of the company may result in a decline in its stock's price, and
a broad-based market drop may also cause a stock's price to fall.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns since these shares were
first offered and shows how performance has varied from year to year. The table
shows the Series' average annual returns and compares them to the market
indicators listed. Both the chart and the table assume reinvestment of dividends
and distributions. The Series' returns shown in the chart and table below do not
reflect the deduction of any charges that are imposed under a variable annuity
contract. Those charges, which are described in the variable annuity prospectus,
will reduce the Series' performance. As with all mutual funds, the Series' past
performance does not necessarily indicate how it will perform in the future.
Year-By-Year Returns as of December 31
- --------------------------------------
23.47% 18.21% 21.49%
[Insert Chart]
1996 1997 1998
In the periods shown in the chart, the Series' highest quarterly return was
27.05% (4th quarter of 1998) and its lowest quarterly return was -18.02% (3rd
quarter of 1998).
Average Annual Total Returns as of December 31, 1998
----------------------------------------------------
1 year Life of Series*
T. Rowe Price/JNL Mid-Cap Growth
Series 21.49% 25.62%
S&P MidCap 400 Index 19.09% 23.32%
The S&P MidCap 400 Index is a broad-based, unmanaged index.
* The Series began operations on May 15, 1995.
Additional Information About the Principal Investment Strategies, Other
Investments and Risks of the Series. The T. Rowe Price/JNL Mid-Cap Growth Series
seeks to achieve its objective of long-term growth of capital by investing
primarily in common stocks of U.S. companies with medium-sized market
capitalizations and the potential for above-average growth. The sub-adviser
relies on its proprietary research to identify mid-cap companies with attractive
growth prospects. The Series seeks to invest primarily in companies that: (i)
offer proven products or services; (ii) have a historical record of earnings
growth that is above average, (iii) demonstrate the potential to sustain
earnings growth; (iv) operate in industries experiencing increasing demand;
and/or (v) the sub-adviser believes are undervalued in the marketplace.
The Series will not automatically sell or cease to purchase stock of a company
it already owns just because the company's market cap grows or falls outside the
range of companies in the S&P MidCap 400 Index.
The Series may also invest in securities other than U.S. common stocks,
including foreign securities, convertible securities, and warrants. The Series
may use derivative instruments, such as options and futures contracts, for
hedging purposes and to maintain market exposure. These instruments are subject
to transaction costs and certain risks, such as unanticipated changes in
securities prices.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
The Sub-Adviser and Portfolio Management. The sub-adviser to the T. Rowe
Price/JNL Mid-Cap Growth Series is T. Rowe Price Associates, Inc. (T. Rowe),
located at 100 East Pratt Street, Baltimore, Maryland 21202. T. Rowe was founded
in 1937. T. Rowe and its affiliates provide investment advisory services to
individual and institutional investor accounts.
The Series has an Investment Advisory Committee composed of the following
members: Brian W. Berghuis, Chairman, James A.C. Kennedy, and John F. Wakeman.
The Committee Chairman has day to day responsibility for managing the Series and
works with the Committee in developing and executing the Series' investment
program. Mr. Berghuis, a Managing Director of T. Rowe, has been managing
investments since joining T. Rowe in 1985. The Investment Advisory Committee has
had day-to-day responsibility for managing the Series since the inception of the
Series.
<PAGE>
More About The Investment Objectives and Risks of All Series
The investment objectives of the respective Series are not fundamental and may
be changed by the Trustees without shareholder approval.
Year 2000 and Euro Issues: Apart from the particular risks described above for
each Series, the Trust could be adversely affected if the computer systems used
by the Trust's investment adviser and its other service providers are unable to
process and calculate date-related information because they are not programmed
to distinguish between the year 2000 and the year 1900.
The Trust relies entirely on outside service providers for the processing of its
business. To the extent that a service provider utilizes computers to process
the Trust's business, the smooth operation of the Trust depends on the ability
of those computers to continue to function properly.
The Trust has contacted each of its service providers to ascertain the service
provider's state of readiness for the year 2000. Each of the service providers
has indicated to the Trust that, at this time, it is either year 2000 compliant
or that it has identified its systems which are not currently year 2000
compliant and that it intends to make such systems compliant before December 31,
1999. The Trust intends to continue to monitor the year 2000 status of its
service providers.
Based on the information currently available, the Trust does not anticipate any
material impact on the delivery of services to and by the Trust. However, since
the Trust must rely on the information provided to it by its service providers,
there can be no assurance that the steps taken by the service providers in
preparation for the year 2000 will be sufficient to avoid any adverse impact on
the Trust.
Similarly, the companies and other issuers in which a Series invests could be
adversely affected by year 2000 computer-related problems, and there can be no
assurance that the steps taken, if any, by these issuers will be sufficient to
avoid any adverse impact on the Series.
Also, to the extent that a Series invests in foreign securities, the Series
could be adversely affected by the conversion of certain European currencies
into the Euro. This conversion, which is underway, is scheduled to be completed
in 2002. However, problems with the conversion process and delays could increase
volatility in world capital markets and affect European capital markets in
particular.
<PAGE>
MANAGEMENT OF THE TRUST
Investment Adviser
Under Massachusetts law and the Trust's Declaration of Trust and By-Laws, the
management of the business and affairs of the Trust is the responsibility of the
Trustees.
Jackson National Financial Services, LLC (JNFS), 5901 Executive Drive, Lansing,
Michigan 48911, is the investment adviser to the Trust and provides the Trust
with professional investment supervision and management. Jackson National
Financial Services, Inc. served as investment adviser to the Trust from the
inception of the Trust until July 1, 1998, when it transferred its duties as
investment adviser and its professional staff for investment advisory services
to JNFS.
Management Fee
As compensation for its services, JNFS receives a fee from the Trust computed
separately for each Series, accrued daily and payable monthly. The fee which
JNFS received from each Series for the fiscal year ended December 31, 1998, is
set forth below as an annual percentage of the net assets of the Series. For a
Series which was not in operation for all of 1998, its current management fee
schedule is shown instead.
<TABLE>
<CAPTION>
SERIES SCHEDULE (where applicable) FEES
------ --------------------------- ----
<S> <C> <C>
JNL/Alger Growth Series................................... ..................................... .975%
JNL/Eagle Core Equity Series.............................. ..................................... .90%
JNL/Eagle SmallCap Equity Series.......................... ..................................... .95%
JNL/Janus Aggressive Growth Series........................ ..................................... .95%
JNL/Janus Capital Growth Series........................... ..................................... .95%
JNL/Janus Global Equities Series.......................... ..................................... .99%
JNL/Putnam Growth Series.................................. ..................................... .90%
JNL/Putnam Value Equity Series............................ ..................................... .90%
Lazard/JNL Mid Cap Value Series........................... $0 to $150 million................... .975%
$150 million to $300 million......... .925%
Over $300 million.................... .90%
Lazard/JNL Small Cap Value Series......................... $0 to $50 million.................... 1.05%
$50 million to $150 million.......... 1.00%
$150 million to $300 million......... .975%
Over $300 million.................... .925%
PPM America/JNL Balanced Series........................... ..................................... .73%
PPM America/JNL High Yield Bond Series.................... ..................................... .73%
PPM America/JNL Money Market Series....................... ..................................... .60%
Salomon Brothers/JNL Global Bond Series................... ..................................... .85%
Salomon Brothers/JNL U.S. Government & Quality Bond Series ..................................... .70%
T. Rowe Price/JNL Established Growth Series............... ..................................... .84%
T. Rowe Price/JNL International Equity Investment Series.. ..................................... 1.08%
T. Rowe Price/JNL Mid-Cap Growth Series................... ..................................... .95%
</TABLE>
Sub-Advisory Arrangements
JNFS selects, contracts with and compensates sub-advisers to manage the
investment and reinvestment of the assets of the Series of the Trust. JNFS
monitors the compliance of such sub-advisers with the investment objectives and
related policies of each Series and reviews the performance of such sub-advisers
and reports periodically on such performance to the Trustees of the Trust.
Under the terms of each of the Sub-Advisory Agreements with JNFS, the
sub-adviser manages the investment and reinvestment of the assets of the
assigned Series, subject to the supervision of the Trustees of the Trust. The
sub-adviser formulates a continuous investment program for each such Series
consistent with its investment objectives and policies outlined in this
Prospectus. Each sub-adviser implements such programs by purchases and sales of
securities and regularly reports to JNFS and the Trustees of the Trust with
respect to the implementation of such programs.
As compensation for its services, each sub-adviser receives a fee from JNFS
computed separately for the applicable Series, stated as an annual percentage of
the net assets of such Series. The SAI contains a schedule of the management
fees JNFS currently is obligated to pay the sub-advisers out of the advisory fee
it receives from the Series.
ADMINISTRATIVE FEE
In addition to the investment advisory fee, effective January 1, 1999, each
Series pays to JNFS an Administrative Fee of .10% of the average daily net
assets of the Series. In return for the fee, JNFS provides or procures all
necessary administrative functions and services for the operation of the Series.
In addition, JNFS, at its own expense, arranges for legal, audit, fund
accounting, custody, printing and mailing, and all other services necessary for
the operation of each Series. Each Series is responsible for trading expenses
including brokerage commissions, interest and taxes, and other non-operating
expenses. Prior to January 1, 1999, each Series paid all of its own operating
expenses.
INVESTMENT IN TRUST SHARES
Shares of the Trust are currently sold to separate accounts (Accounts) of
Jackson National Life Insurance Company, 5901 Executive Drive, Lansing, Michigan
48911, and Jackson National Life Insurance Company of New York, 2900 Westchester
Avenue, Purchase, New York 10577, to fund the benefits under certain variable
annuity contracts (Contracts). An insurance company purchases the shares of the
Series at their net asset value using premiums received on Contracts issued by
the insurance company. There is no sales charge.
Shares of the Series are not available to the general public directly. Some of
the Series are managed by sub-advisers who manage publicly traded mutual funds
having similar names and investment objectives. While some of the Series may be
similar to, and may in fact be modeled after publicly traded mutual funds,
Contract purchasers should understand that the Series are not otherwise directly
related to any publicly traded mutual fund. Consequently, the investment
performance of publicly traded mutual funds and any corresponding Series may
differ substantially.
The net asset value per share of each Series is determined at the close of
regular trading on the New York Stock Exchange (normally 4:00 p.m., Eastern
time) each day that the New York Stock Exchange is open. The net asset value per
share is calculated by adding the value of all securities and other assets of a
Series, deducting its liabilities, and dividing by the number of shares
outstanding. Generally, the value of exchange-listed or -traded securities is
based on their respective market prices, bonds are valued based on prices
provided by an independent pricing service and short-term debt securities are
valued at amortized cost, which approximates market value. A Series may invest
in securities primarily listed on foreign exchanges and that trade on days when
the Series does not price its shares. As a result, a Series' net asset value may
change on days when shareholders are not able to purchase or redeem the Series'
shares.
All investments in the Trust are credited to the shareholder's account in the
form of full and fractional shares of the designated Series (rounded to the
nearest 1/1000 of a share). The Trust does not issue share certificates.
SHARE REDEMPTION
An Account redeems shares to make benefit or withdrawal payments under the terms
of its Contracts. Redemptions are processed on any day on which the Trust is
open for business and are effected at net asset value next determined after the
redemption order, in proper form, is received by the Trust's transfer agent.
The Trust may suspend the right of redemption only under the following unusual
circumstances:
o when the New York Stock Exchange is closed (other than weekends
and holidays) or trading is restricted;
o when an emergency exists, making disposal of portfolio securities
or the valuation of net assets not reasonably practicable; or
o during any period when the SEC has by order permitted a
suspension of redemption for the protection of shareholders.
TAX STATUS
Each Series' policy is to meet the requirements of Subchapter M of the Internal
Revenue Code (Code) necessary to qualify as a regulated investment company. Each
Series intends to distribute all its net investment income and net capital gains
to shareholders and, therefore, will not be required to pay any federal income
taxes.
Each Series is treated as a separate corporation for purposes of the Code.
Therefore, the assets, income, and distributions of each Series are considered
separately for purposes of determining whether or not the Series qualifies as a
regulated investment company.
Because the shareholders of each Series are Accounts, there are no tax
consequences to shareholders of buying, holding, exchanging and selling shares
of the Series. Distributions from the Series are not taxable to those
shareholders. However, owners of Contracts should consult the applicable Account
prospectus for more detailed information on tax issues related to the Contracts.
<PAGE>
FINANCIAL HIGHLIGHTS
The following table provides selected per share data for one share of each
Series. The information does not reflect any charges imposed by an Account
investing in shares of the Series. You should refer to the appropriate Account
prospectus for additional information regarding such charges.
The information for each of the periods shown below has been audited by
PricewaterhouseCoopers LLP, independent accountants, and should be read in
conjunction with the financial statements and notes thereto, together with the
report of PricewaterhouseCoopers LLP thereon, in the Annual Report included in
the Statement of Additional Information.
<PAGE>
JNL SERIES TRUST
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Income from Operations Distributions
-------------------------------- -----------------------------------------
Net realized &
unrealized gains
Net Asset Net on investments From net
value, investment & foreign From net realized gains
beginning income currency investment on investment Return of
Period or Year Ended of period (loss) related items income transactions Capital
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
JNL Aggressive Growth Series
Year ended 12/31/98 $14.53 $(0.06) $8.45 $(0.05) $(0.78) $ -
Year ended 12/31/97 13.38 0.04 1.65 - (0.54) -
Period from 4/1/96 to 12/31/96 13.13 0.05 1.10 (0.05) (0.71) (0.14)
Period from 5/15/95* to 3/31/96 10.00 0.01 3.53 - (0.41) -
- ------------------------------------------------------------------------------------------------------------------------------------
JNL Capital Growth Series
Year ended 12/31/98 16.50 (0.12) 5.92 - (1.57) -
Year ended 12/31/97 14.46 (0.06) 2.23 (0.02) (0.04) (0.07)
Period from 4/1/96 to 12/31/96 13.86 0.06 0.70 - (0.16) -
Period from 5/15/95* to 3/31/96 10.00 - 4.70 - (0.84) -
- ------------------------------------------------------------------------------------------------------------------------------------
JNL Global Equities Series
Year ended 12/31/98 17.48 0.04 4.66 (0.07) - -
Year ended 12/31/97 15.20 0.07 2.84 - (0.63) -
Period from 4/1/96 to 12/31/96 13.75 0.03 2.72 (0.08) (0.90) (0.32)
Period from 5/15/95* to 3/31/96 10.00 0.10 4.02 - (0.37) -
- ------------------------------------------------------------------------------------------------------------------------------------
JNL/Alger Growth Series
Year ended 12/31/98 13.56 - 6.20 - (0.81) -
Year ended 12/31/97 11.16 (0.01) 2.93 - (0.52) -
Period from 4/1/96 to 12/31/96 10.38 - 0.78 - - -
Period from 10/16/95* to 3/31/96 10.00 - 0.38 - - -
- ------------------------------------------------------------------------------------------------------------------------------------
JNL/Eagle Core Equity Series
Year ended 12/31/98 13.75 0.10 2.17 (0.09) (0.02) -
Year ended 12/31/97 10.62 0.08 3.35 (0.08) (0.22) -
Period from 9/16/96* to 12/31/96 10.00 0.03 0.62 (0.03) - -
- ------------------------------------------------------------------------------------------------------------------------------------
JNL/Eagle SmallCap Equity Series
Year ended 12/31/98 14.73 (0.06) 0.23 - (0.08) -
Year ended 12/31/97 11.54 (0.07) 3.26 - - -
Period from 9/16/96* to 12/31/96 10.00 (0.01) 1.55 - - -
====================================================================================================================================
</TABLE>
* Commencement of operations.
(a) Assumes investment at net asset value at the beginning of the period,
reinvestment of all distributions, and a complete redemption of the
investment at the net asset value at the end of the period. Total return is
not annualized.
(b) Annualized for the periods ended December 31, 1998, 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>
<TABLE>
<CAPTION>
Ratios and Supplemental Data
----------------------------------------------------------
Ratio of Ratio of
Net asset Net assets, expenses to income to
value, end Total Return end of period average net average net Portfolio
Period or Year Ended of period (a) (in thousands) assets (b)(c) assets (b)(c) turnover
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
JNL Aggressive Growth Series
Year ended 12/31/98 $22.09 57.66% $161,842 1.10% (0.35)% 114.51%
Year ended 12/31/97 14.53 12.67% 78,870 1.10% 0.39% 137.26%
Period from 4/1/96 to 12/31/96 13.38 8.72% 29,555 1.09% 0.77% 85.22%
Period from 5/15/95* to 3/31/96 13.13 35.78% 8,527 1.09% 0.27% 163.84%
- ------------------------------------------------------------------------------------------------------------------------------------
JNL Capital Growth Series
Year ended 12/31/98 20.73 35.16% 111,037 1.09% (0.68)% 128.95%
Year ended 12/31/97 16.50 15.01% 73,749 1.10% (0.30)% 131.43%
Period from 4/1/96 to 12/31/96 14.46 5.45% 36,946 1.09% 0.91% 115.88%
Period from 5/15/95* to 3/31/96 13.86 47.94% 9,578 1.09% (0.49)% 128.56%
- ------------------------------------------------------------------------------------------------------------------------------------
JNL Global Equities Series
Year ended 12/31/98 21.11 26.87% 240,385 1.14% 0.13% 81.46%
Year ended 12/31/97 17.48 19.12% 151,050 1.15% 0.33% 97.21%
Period from 4/1/96 to 12/31/96 15.20 19.99% 48,638 1.14% 0.37% 52.02%
Period from 5/15/95* to 3/31/96 13.75 41.51% 16,141 1.15% 0.39% 142.36%
- ------------------------------------------------------------------------------------------------------------------------------------
JNL/Alger Growth Series
Year ended 12/31/98 18.95 45.66% 164,948 1.06% (0.02)% 121.39%
Year ended 12/31/97 13.56 26.20% 85,877 1.10% (0.07)% 125.44%
Period from 4/1/96 to 12/31/96 11.16 7.51% 38,252 1.07% (0.02)% 59.92%
Period from 10/16/95* to 3/31/96 10.38 3.80% 8,649 1.03% (0.17)% 50.85%
- ------------------------------------------------------------------------------------------------------------------------------------
JNL/Eagle Core Equity Series
Year ended 12/31/98 15.91 16.54% 37,169 1.05% 1.07% 67.04%
Year ended 12/31/97 13.75 32.35% 11,896 1.05% 1.00% 51.48%
Period from 9/16/96* to 12/31/96 10.62 6.47% 1,954 1.05% 1.10% 1.36%
- ------------------------------------------------------------------------------------------------------------------------------------
JNL/Eagle SmallCap Equity Series
Year ended 12/31/98 14.82 1.18% 34,953 1.10% (0.42)% 51.90%
Year ended 12/31/97 14.73 27.64% 13,493 1.10% (0.54)% 60.78%
Period from 9/16/96* to 12/31/96 11.54 15.40% 1,944 1.10% (0.26)% 28.01%
====================================================================================================================================
</TABLE>
Ratio information assuming
no expense reimbursement
or fees paid indirectly
------------------------------
expenses to income to
average net average net
Period or Year Ended assets (b) assets (b)
================================================================================
JNL Aggressive Growth Series
Year ended 12/31/98 1.10% (0.35)%
Year ended 12/31/97 1.17% 0.32%
Period from 4/1/96 to 12/31/96 1.40% 0.46%
Period from 5/15/95* to 3/31/96 2.77% (1.41)%
- --------------------------------------------------------------------------------
JNL Capital Growth Series
Year ended 12/31/98 1.09% (0.68)%
Year ended 12/31/97 1.11% (0.31)%
Period from 4/1/96 to 12/31/96 1.27% 0.73%
Period from 5/15/95* to 3/31/96 2.08% (1.48)%
- --------------------------------------------------------------------------------
JNL Global Equities Series
Year ended 12/31/98 1.30% (0.03)%
Year ended 12/31/97 1.37% 0.11%
Period from 4/1/96 to 12/31/96 1.63% (0.12)%
Period from 5/15/95* to 3/31/96 2.25% (0.71)%
- --------------------------------------------------------------------------------
JNL/Alger Growth Series
Year ended 12/31/98 1.06% (0.02)%
Year ended 12/31/97 1.10% (0.07)%
Period from 4/1/96 to 12/31/96 1.19% (0.14)%
Period from 10/16/95* to 3/31/96 1.89% (1.03)%
- --------------------------------------------------------------------------------
JNL/Eagle Core Equity Series
Year ended 12/31/98 1.17% 0.95%
Year ended 12/31/97 1.54% 0.51%
Period from 9/16/96* to 12/31/96 4.57% (2.42)%
- --------------------------------------------------------------------------------
JNL/Eagle SmallCap Equity Series
Year ended 12/31/98 1.17% (0.49)%
Year ended 12/31/97 1.51% (0.95)%
Period from 9/16/96* to 12/31/96 4.77% (3.93)%
================================================================================
See notes to the financial statements.
<PAGE>
JNL SERIES TRUST
FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
Income from operations Distributions
----------------------------- -------------------------------------------
Net realized &
unrealized gains
Net Asset Net on investments From net
value, investment & foreign From net realized gains
beginning income currency investment on investment Return of
Period or Year ended of period (loss) related items income transactions Capital
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
JNL/Putnam Growth Series
Year ended 12/31/98 $16.99 $(0.01) $5.94 $(0.01) $(0.$3) -
Year ended 12/31/97 14.21 0.04 3.07 (0.02) (0.31) -
Period from 4/1/96 to 12/31/96 12.50 0.04 2.12 (0.05) (0.40) -
Period from 5/15/95* to 3/31/96 10.00 0.01 3.66 - (1.17) -
- ------------------------------------------------------------------------------------------------------------------------------------
JNL/Putnam Value Equity Series
Year ended 12/31/98 16.82 0.16 1.94 (0.16) (0.52) -
Year ended 12/31/97 14.50 0.13 3.03 (0.13) (0.71) -
Period from 4/1/96 to 12/31/96 12.77 0.10 1.97 (0.15) (0.19) -
Period from 5/15/95* to 3/31/96 10.00 0.23 2.86 (0.17) (0.15) -
- ------------------------------------------------------------------------------------------------------------------------------------
Lazard/JNL Small Cap Value Series
Period from 3/2/98* to 12/31/98 10.00 (0.01) (1.28) - - (0.01)
- ------------------------------------------------------------------------------------------------------------------------------------
Lazard/JNL Mid Cap Value Series
Period from 3/2/98* to 12/31/98 10.00 0.03 (0.79) (0.03) - -
- ------------------------------------------------------------------------------------------------------------------------------------
PPM America/JNL Balanced Series
Year ended 12/31/98 13.06 0.47 0.84 (0.47) (0.42) -
Year ended 12/31/97 11.92 0.36 1.83 (0.36) (0.69) -
Period from 4/1/96 to 12/31/96 11.17 0.10 0.98 (0.15) (0.18) -
Period from 5/15/95* to 3/31/96 10.00 0.25 1.40 (0.19) (0.29) -
- ------------------------------------------------------------------------------------------------------------------------------------
PPM America/JNL High Yield Bond Series
Year ended 12/31/98 11.48 0.91 (0.47) (0.91) (0.12) -
Year ended 12/31/97 10.67 0.59 1.02 (0.59) (0.21) -
Period from 4/1/96 to 12/31/96 10.23 0.51 0.64 (0.69) (0.02) -
Period from 5/15/95* to 3/31/96 10.00 0.73 0.04 (0.54) - -
- ------------------------------------------------------------------------------------------------------------------------------------
PPM America/JNL Money Market Series
Year ended 12/31/98 1.00 0.05 - (0.05) - -
Year ended 12/31/97 1.00 0.05 - (0.05) - -
Period from 4/1/96 to 12/31/96 1.00 0.04 - (0.04) - -
Period from 5/15/95* to 3/31/96 1.00 0.04 - (0.04) - -
- ------------------------------------------------------------------------------------------------------------------------------------
Salomon Brothers/JNL Global Bond Series
Year ended 12/31/98 11.12 0.72 (0.45) (0.72) - -
Year ended 12/31/97 10.63 0.54 0.59 (0.58) (0.05) (0.01)
Period from 4/1/96 to 12/31/96 10.46 0.42 0.70 (0.69) (0.26) -
Period from 5/15/95* to 3/31/96 10.00 0.81 0.24 (0.56) (0.03) -
====================================================================================================================================
</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.
(b) Annualized for the periods ended December 31, 1998, 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>
<TABLE>
<CAPTION>
Ratio and Supplemental Data
------------------------------------------------------------
Ratio of net Ratio of net
operating investment
Net asset Net assets, expenses to income to
value, end Total Return end of period average net average net Portfolio
Period or Year ended of period (a) (in thousands) assets (b) (c) assets (b) (c) turnover
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
JNL/Putnam Growth Series
Year ended 12/31/98 $22.88 34.93% $182,097 1.01% (0.07)% 70.55%
Year ended 12/31/97 16.99 21.88% 83,612 1.05% 0.31% 194.81%
Period from 4/1/96 to 12/31/96 14.21 17.28% 22,804 1.04% 0.94% 184.33%
Period from 5/15/95* to 3/31/96 12.50 37.69% 2,518 0.95% 0.28% 255.03%
- ------------------------------------------------------------------------------------------------------------------------------------
JNL/Putnam Value Equity Series
Year ended 12/31/98 18.24 12.48% 195,936 1.01% 1.06% 77.80%
Year ended 12/31/97 16.82 21.82% 108,565 1.03% 1.43% 112.54%
Period from 4/1/96 to 12/31/96 14.50 16.25% 17,761 0.85% 2.29% 13.71%
Period from 5/15/95* to 3/31/96 12.77 31.14% 3,365 0.87% 2.33% 30.12%
- ------------------------------------------------------------------------------------------------------------------------------------
Lazard/JNL Small Cap Value Series
Period from 3/2/98* to 12/31/98 8.70 (12.92)% 4,804 1.20% (0.04)% 40.15%
- ------------------------------------------------------------------------------------------------------------------------------------
Lazard/JNL Mid Cap Value Series
Period from 3/2/98* to 12/31/98 9.21 (7.64)% 4,731 1.13% 0.34% 70.72%
- ------------------------------------------------------------------------------------------------------------------------------------
PPM America/JNL Balanced Series
Year ended 12/31/98 13.48 10.06% 95,974 0.85% 3.87% 33.74%
Year ended 12/31/97 13.06 18.43% 59,694 0.93% 3.72% 160.88%
Period from 4/1/96 to 12/31/96 11.92 9.72% 24,419 1.04% 2.39% 158.15%
Period from 5/15/95* to 3/31/96 11.17 16.60% 4,761 1.01% 2.99% 115.84%
- ------------------------------------------------------------------------------------------------------------------------------------
PPM America/JNL High Yield Bond Series
Year ended 12/31/98 10.89 3.84% 101,485 0.83% 8.62% 129.85%
Year ended 12/31/97 11.48 15.05% 62,712 0.90% 8.15% 189.25%
Period from 4/1/96 to 12/31/96 10.67 11.24% 13,396 0.88% 8.64% 113.08%
Period from 5/15/95* to 3/31/96 10.23 7.82% 6,156 0.88% 8.34% 186.21%
- ------------------------------------------------------------------------------------------------------------------------------------
PPM America/JNL Money Market Series
Year ended 12/31/98 1.00 4.99% 56,349 0.74% 4.87% -
Year ended 12/31/97 1.00 5.01% 41,808 0.75% 4.92% -
Period from 4/1/96 to 12/31/96 1.00 3.61% 23,752 0.75% 4.75% -
Period from 5/15/95* to 3/31/96 1.00 4.59% 6,816 0.75% 5.06% -
- ------------------------------------------------------------------------------------------------------------------------------------
Salomon Brothers/JNL Global Bond Series
Year ended 12/31/98 10.67 2.46% 48,167 1.00% 7.05% 261.87%
Year ended 12/31/97 11.12 10.66% 36,725 1.00% 6.83% 134.55%
Period from 4/1/96 to 12/31/96 10.63 10.68% 12,483 0.99% 7.52% 109.85%
Period from 5/15/95* to 3/31/96 10.46 10.74% 6,380 1.00% 9.01% 152.89%
====================================================================================================================================
</TABLE>
Ratio information assuming
no expense reimbursement
or fees paid indirectly
--------------------------------
Ratio of net
Ratio of investment
expenses to income to
average net average net
Period or Year ended assets (b) assets (b)
================================================================================
JNL/Putnam Growth Series
Year ended 12/31/98 1.01% (0.07)%
Year ended 12/31/97 1.05% 0.31%
Period from 4/1/96 to 12/31/96 1.27% 0.71%
Period from 5/15/95* to 3/31/96 5.38% (4.15)%
- --------------------------------------------------------------------------------
JNL/Putnam Value Equity Series
Year ended 12/31/98 1.01% 1.06%
Year ended 12/31/97 1.09% 1.37%
Period from 4/1/96 to 12/31/96 1.53% 1.61%
Period from 5/15/95* to 3/31/96 2.28% 0.91%
- --------------------------------------------------------------------------------
Lazard/JNL Small Cap Value Series
Period from 3/2/98* to 12/31/98 1.89% (0.73)%
- --------------------------------------------------------------------------------
Lazard/JNL Mid Cap Value Series
Period from 3/2/98* to 12/31/98 1.85% (0.38)%
- --------------------------------------------------------------------------------
PPM America/JNL Balanced Series
Year ended 12/31/98 0.85% 3.87%
Year ended 12/31/97 0.94% 3.71%
Period from 4/1/96 to 12/31/96 1.22% 2.21%
Period from 5/15/95* to 3/31/96 3.71% 0.29%
- --------------------------------------------------------------------------------
PPM America/JNL High Yield Bond Series
Year ended 12/31/98 0.83% 8.62%
Year ended 12/31/97 0.90% 8.15%
Period from 4/1/96 to 12/31/96 1.21% 8.31%
Period from 5/15/95* to 3/31/96 1.50% 7.72%
- --------------------------------------------------------------------------------
PPM America/JNL Money Market Series
Year ended 12/31/98 0.75% 4.86%
Year ended 12/31/97 0.76% 4.91%
Period from 4/1/96 to 12/31/96 0.85% 4.65%
Period from 5/15/95* to 3/31/96 1.30% 4.51%
- --------------------------------------------------------------------------------
Salomon Brothers/JNL Global Bond Series
Year ended 12/31/98 1.01% 7.04%
Year ended 12/31/97 1.07% 6.76%
Period from 4/1/96 to 12/31/96 1.44% 7.07%
Period from 5/15/95* to 3/31/96 2.14% 7.87%
================================================================================
See notes to the financial statement.
<PAGE>
JNL SERIES TRUST
FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
Income from Operations Distributions
----------------------------- ---------------------------------------
Net realized &
unrealized gains
Net Asset Net on investments From net
value, investment & foreign From net realized gains
beginning income currency investment on investment Return of
Period or Year ended of period (loss) related items income transactions Capital
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Salomon Brothers/JNL U.S. Government &
Quality Bond Series
Year ended 12/31/98 10.69 0.41 0.60 (0.41) (0.14) -
Year ended 12/31/97 10.20 0.44 0.49 (0.42) (0.02) -
Period from 4/1/96 to 12/31/96 10.09 0.24 0.24 (0.34) (0.03) -
Period from 5/15/95* to 3/31/96 10.00 0.45 0.02 (0.34) (0.04) -
- ------------------------------------------------------------------------------------------------------------------------------------
T. Rowe Price/JNL Established Growth Series
Year ended 12/31/98 15.62 0.05 4.29 (0.06) (0.84) -
Year ended 12/31/97 12.56 0.06 3.64 (0.03) (0.61) -
Period from 4/1/96 to 12/31/96 11.36 0.03 1.81 (0.04) (0.09) (0.51)
Period from 5/15/95* to 3/31/96 10.00 0.07 2.68 (0.06) (1.33) -
- ------------------------------------------------------------------------------------------------------------------------------------
T. Rowe Price/JNL International Equity
Investment Series
Year ended 12/31/98 12.09 0.16 1.58 (0.19) (0.02) -
Year ended 12/31/97 12.08 0.09 0.23 (0.08) (0.23) -
Period from 4/1/96 to 12/31/96 11.25 0.06 0.90 (0.12) (0.01) -
Period from 5/15/95* to 3/31/96 10.00 0.04 1.21 - - -
- ------------------------------------------------------------------------------------------------------------------------------------
T. Rowe Price/JNL Mid-Cap Growth Series
Year ended 12/31/98 17.37 (0.07) 3.80 - (0.67) -
Year ended 12/31/97 14.89 (0.03) 2.74 - (0.23) -
Period from 4/1/96 to 12/31/96 13.43 (0.05) 1.92 (0.05) (0.36) -
Period from 5/15/95* to 3/31/96 10.00 0.06 3.90 - (0.53) -
====================================================================================================================================
</TABLE>
* Commencement of operations.
(a) Assumes investment at net asset value at the beginning of the period,
reinvestment of all distributions, and a complete redemption of the
investment at the net asset value at the end of the period. Total return is
not annualized.
(b) Annualized for the periods ended December 31, 1998, 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>
<TABLE>
<CAPTION>
Ratios and Supplemental Data
----------------------------------------------------------
Net asset Net assets, expenses to income to
value, end Total Return end of period average net average net Portfolio
Period or Year ended of period (a) (in thousands) assets (b)(c) assets (b)(c) turnover
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Salomon Brothers/JNL U.S. Government &
Quality Bond Series
Year ended 12/31/98 11.15 9.40% 63,785 0.85% 5.33% 429.70%
Year ended 12/31/97 10.69 9.16% 25,389 0.85% 5.99% 378.59%
Period from 4/1/96 to 12/31/96 10.20 4.82% 9,832 0.84% 5.72% 218.50%
Period from 5/15/95* to 3/31/96 10.09 4.65% 3,007 0.84% 5.41% 253.37%
- ------------------------------------------------------------------------------------------------------------------------------------
T. Rowe Price/JNL Established Growth Series
Year ended 12/31/98 19.06 27.78% 216,599 0.95% 0.38% 54.93%
Year ended 12/31/97 15.62 29.47% 124,022 0.98% 0.43% 47.06%
Period from 4/1/96 to 12/31/96 12.56 16.12% 32,291 1.00% 0.59% 36.41%
Period from 5/15/95* to 3/31/96 11.36 28.23% 8,772 1.00% 0.75% 101.13%
- ------------------------------------------------------------------------------------------------------------------------------------
T. Rowe Price/JNL International Equity
Investment Series
Year ended 12/31/98 13.62 14.43% 70,927 1.23% 0.88% 16.39%
Year ended 12/31/97 12.09 2.65% 78,685 1.24% 0.74% 18.81%
Period from 4/1/96 to 12/31/96 12.08 8.54% 48,204 1.25% 1.09% 5.93%
Period from 5/15/95* to 3/31/96 11.25 12.50% 24,211 1.25% 0.78% 16.45%
- ------------------------------------------------------------------------------------------------------------------------------------
T. Rowe Price/JNL Mid-Cap Growth Series
Year ended 12/31/98 20.43 21.49% 189,636 1.04% (0.37)% 50.92%
Year ended 12/31/97 17.37 18.21% 127,052 1.06% (0.26)% 41.43%
Period from 4/1/96 to 12/31/96 14.89 13.91% 47,104 1.10% (0.18)% 25.05%
Period from 5/15/95* to 3/31/96 13.43 40.06% 10,545 1.10% 0.82% 66.04%
====================================================================================================================================
</TABLE>
Ratio information assuming
no expense reimbursement
or fees paid indirectly
------------------------------
Ratio of net
Ratio of investment
expenses to income to
average net average net
Period or Year ended assets (b) assets (b)
================================================================================
Salomon Brothers/JNL U.S. Government &
Quality Bond Series
Year ended 12/31/98 0.86% 5.32%
Year ended 12/31/97 0.96% 5.88%
Period from 4/1/96 to 12/31/96 1.37% 5.19%
Period from 5/15/95* to 3/31/96 2.53% 3.72%
- --------------------------------------------------------------------------------
T. Rowe Price/JNL Established Growth Series
Year ended 12/31/98 0.95% 0.38%
Year ended 12/31/97 0.98% 0.43%
Period from 4/1/96 to 12/31/96 1.11% 0.48%
Period from 5/15/95* to 3/31/96 2.09% (0.34)%
- --------------------------------------------------------------------------------
T. Rowe Price/JNL International Equity
Investment Series
Year ended 12/31/98 1.28% 0.83%
Year ended 12/31/97 1.32% 0.66%
Period from 4/1/96 to 12/31/96 1.29% 1.05%
Period from 5/15/95* to 3/31/96 2.14% (0.11)%
- --------------------------------------------------------------------------------
T. Rowe Price/JNL Mid-Cap Growth Series
Year ended 12/31/98 1.04% (0.37)%
Year ended 12/31/97 1.06% (0.26)%
Period from 4/1/96 to 12/31/96 1.14% (0.22)%
Period from 5/15/95* to 3/31/96 2.10% (0.18)%
===============================================================================
See notes to the financial statements.
<PAGE>
PROSPECTUS
May 1, 1999
JNL SERIES TRUST
You can find more information about the Trust in:
o The Trust's Statement of Information (SAI) dated May 1, 1999,
which contains further information about the Trust and the Series,
particularly their investment practices and restrictions. The
current SAI is on file with the Securities and Exchange Commission
(SEC) and is incorporated into the Prospectus by reference (which
means the SAI is legally part of the Prospectus).
o The Trust's Annual and Semi-Annual Reports to shareholders, which
show the Series' actual investments and include financial
statements as of the close of the particular annual or semi-annual
period. The Annual Report also discusses the market conditions and
investment strategies that significantly affected each Series'
performance during the year covered by the report.
You can obtain a copy of the current SAI or the most recent Annual or
Semi-Annual Reports without charge, or make other inquiries, by calling (800)
766-4683, or writing the JNL Series Trust Service Center, P.O. Box 378002,
Denver, Colorado 80237-8003.
You can also obtain information about the Trust (including its current SAI and
most recent Annual and Semi-Annual Reports) from the SEC's Internet site
(http://www.sec.gov) and from the SEC's Public Reference Room in Washington,
D.C. You can find out about the operation of the Public Reference Room and
copying charges by calling (800) SEC-0330.
The Trust's SEC file number is: 811-8894
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
MAY 1, 1999
JNL SERIES TRUST
================================================================================
This Statement of Additional Information (SAI) is not a prospectus. It
contains information in addition to and more detailed than set forth in the
Prospectus and should be read in conjunction with the JNL Series Trust
Prospectus dated May 1, 1999. Not all Series described in this SAI may be
available for investment. The Prospectus may be obtained by calling (800)
766-4683, or writing JNL Series Trust, P.O. Box 378002, Denver, Colorado
80237-8002.
================================================================================
TABLE OF CONTENTS
General Information and History 2
Common Types of Investments and Management Practices 2
Additional Risk Considerations 14
Investment Restrictions Applicable to all Series 18
Trustees and Officers of the Trust 25
Performance 28
Investment Adviser and Other Services 33
Purchases, Redemptions and Pricing of Shares 46
Additional Information 48
Tax Status 49
Financial Statements 51
Appendix A - Ratings of Investments A-1
<PAGE>
GENERAL INFORMATION AND HISTORY
-------------------------------
The JNL Series Trust (Trust) is an open-end management investment
company organized under the laws of Massachusetts, by a Declaration of Trust
dated June 1, 1994. The Trust offers shares in separate Series, each with its
own investment objective.
COMMON TYPES OF INVESTMENTS AND MANAGEMENT PRACTICES
----------------------------------------------------
This section describes some of the types of securities a Series may
hold in its portfolio and the various kinds of investment practices that may be
used in day-to-day portfolio management. A Series may invest in the following
securities or engage in the following practices to the extent that such
securities and practices are consistent with the Series' investment objective(s)
and policies described in the Prospectus and in this SAI.
Asset-Backed Securities. A Series may invest in asset-backed securities, which
include mortgage-backed securities. The credit quality of most asset-backed
securities depends primarily on the credit quality of the assets underlying such
securities, how well the entity issuing the security is insulated from the
credit risk of the originator or any other affiliated entities, and the amount
and quality of any credit support provided to the securities. The rate of
principal payment on asset-backed securities generally depends on the rate of
principal payments received on the underlying assets, which in turn may be
affected by a variety of economic and other factors. As a result, the yield on
any asset-backed security is difficult to predict with precision and actual
yield to maturity may be more or less than the anticipated yield to maturity. A
sub-adviser considers estimated prepayment rates in calculating the average
weighted maturities of the Series. Unscheduled prepayments are more likely to
accelerate during periods of declining long-term interest rates. In the event of
a prepayment during a period of declining interest rates, a Series may be
required to invest the unanticipated proceeds at a lower interest rate.
Prepayments during such periods will also limit a Series' ability to participate
in as large a market gain as may be experienced with a comparable security not
subject to prepayment.
Asset-backed securities may be classified as pass-through certificates
or collateralized obligations. Pass-through certificates are asset-backed
securities that represent an undivided fractional ownership interest in an
underlying pool of assets. Pass-through certificates usually provide for
payments of principal and interest received to be passed through to their
holders, usually after deduction for certain costs and expenses incurred in
administering the pool. Because pass-through certificates represent an ownership
interest in the underlying assets, the holders thereof bear directly the risk of
any defaults by the obligors on the underlying assets not covered by any credit
support.
Asset-backed securities issued in the form of debt instruments, also
known as collateralized obligations, are generally issued as the debt of a
special purpose entity organized solely for the purpose of owning such assets
and issuing such debt. Such assets are most often trade, credit card or
automobile receivables. The assets collateralizing such asset-backed securities
are pledged to a trustee or custodian for the benefit of the holders hereof.
Such issuers generally hold no assets other than those underlying the
asset-backed securities and any credit support provided. As a result, although
payments on such asset-backed securities are obligations of the issuers, in the
event of defaults on the underlying assets not covered by any credit support,
the issuing entities are unlikely to have sufficient assets to satisfy their
obligations on the related asset-backed securities.
Bank Obligations. A Series may invest in bank obligations, which include
certificates of deposit, bankers' acceptances, and other short-term debt
obligations. Certificates of deposit are short-term obligations of commercial
banks. A bankers' acceptance is a time draft drawn on a commercial bank by a
borrower, usually in connection with international commercial transactions.
Certificates of deposit may have fixed or variable rates. The Series may invest
in U.S. banks, foreign branches of U.S. banks, U.S. branches of foreign banks,
and foreign branches of foreign banks.
Borrowing and Lending. A Series may borrow money from banks for temporary or
emergency purposes in amounts up to 25% of its total assets. To secure
borrowings, a Series may mortgage or pledge securities in amounts up to 15% of
its net assets.
Cash Position. A Series may hold a certain portion of its assets in repurchase
agreements and money market securities maturing in one year or less that are
rated in one of the two highest rating categories by a nationally recognized
statistical rating organization. For temporary, defensive purposes, a Series may
invest without limitation in such securities. This reserve position provides
flexibility in meeting redemptions, expenses, and the timing of new investments,
and serves as a short-term defense during periods of unusual market volatility.
Collateralized Mortgage Obligations (CMOs). A Series may invest in CMOs, which
are bonds that are collateralized by whole loan mortgages or mortgage
pass-through securities. The bonds issued in a CMO transaction are divided into
groups, and each group of bonds is referred to as a "tranche." Under the
traditional CMO structure, the cash flows generated by the mortgages or mortgage
pass-through securities in the collateral pool are used to first pay interest
and then pay principal to the CMO bondholders. The bonds issued under a CMO
structure are retired sequentially as opposed to the pro rata return of
principal found in traditional pass-through obligations. Subject to the various
provisions of individual CMO issues, the cash flow generated by the underlying
collateral (to the extent it exceeds the amount required to pay the stated
interest) is used to retire the bonds. Under the CMO structure, the repayment of
principal among the different tranches is prioritized in accordance with the
terms of the particular CMO issuance. The "fastest-pay" tranche of bonds, as
specified in the prospectus for the issue, would initially receive all principal
payments. When that tranche of bonds is retired, the next tranche, or tranches,
in the sequence, as specified in the prospectus, receive all of the principal
payments until they are retired. The sequential retirement of bonds groups
continues until the last tranche, or group of bonds, is retired. Accordingly,
the CMO structure allows the issuer to use cash flows of long maturity,
monthly-pay collateral to formulate securities with short, intermediate and long
final maturities and expected average lives. Depending on the type of CMOs in
which the Series invests, the investment may be subject to a greater or lesser
risk of prepayment than other types of mortgage-related securities.
The primary risk of any mortgage security is the uncertainty of the
timing of cash flows. For CMOs, the primary risk results from the rate of
prepayments on the underlying mortgages serving as collateral. An increase or
decrease in prepayment rates (resulting primarily from a decrease or increase in
mortgage interest rates) will affect the yield, average life, and price of CMOs.
The prices of certain CMOs, depending on their structure and the rate of
prepayments, can be volatile. Some CMOs may also not be as liquid as other
securities.
Commercial Paper. A Series may invest in commercial paper. Commercial paper are
short-term promissory notes issued by corporations primarily to finance
short-term credit needs. Certain notes may have floating or variable rates.
Common and Preferred Stocks. A Series may invest in common and/or preferred
stocks. Stocks represent shares of ownership in a company. Generally, preferred
stock has a specified dividend and ranks after bonds and before common stocks in
its claim on income for dividend payments and on assets should the company be
liquidated. After other claims are satisfied, common stockholders participate in
company profits on a pro rata basis; profits may be paid out in dividends or
reinvested in the company to help it grow. Increases and decreases in earnings
are usually reflected in a company's stock price, so common stocks generally
have the greatest appreciation and depreciation potential of all corporate
securities. While most preferred stocks pay a dividend, a Series may purchase
preferred stock where the issuer has omitted, or is in danger of omitting,
payment of its dividend. Such investments would be made primarily for their
capital appreciation potential. Although common and preferred stocks have a
history of long-term growth in value, their prices tend to fluctuate in the
short term, particularly those of smaller companies.
Convertible Securities and Warrants. A Series may invest in debt or preferred
equity securities convertible into or exchangeable for equity securities.
Traditionally, convertible securities have paid dividends or interest at rates
higher than common stocks but lower than non-convertible securities. They
generally participate in the appreciation or depreciation of the underlying
stock into which they are convertible, but to a lesser degree. In recent years,
convertibles have been developed which combine higher or lower current income
with options and other features. Warrants are options to buy a stated number of
shares of common stock at a specified price any time during the life of the
warrants (generally, two or more years).
Catastrophe Bonds. Catastrophe bonds are fixed income securities for which the
return of principal and payment of interest is contingent on the non-occurrence
of a specific trigger event, such as a hurricane or an earthquake. If a trigger
event causes losses exceeding a specific amount in the geographic region and
time period specified in a bond, a Series investing in the bond may lose a
portion or all of its principal invested in the bond. If no trigger event
occurs, the Series will recover its principal plus interest. Catastrophe bonds
may also expose the Series to certain unanticipated risks including, but not
limited to, issuer (credit) default, adverse regulatory or jurisdictional
intepretation, and adverse tax consequences.
<PAGE>
Diversification. Certain of the Series are diversified companies, as such term
is defined under the Investment Company Act of 1940, as amended (1940 Act). A
Series that is a diversified company under the 1940 Act will have at least 75%
of the value of its total assets represented by:
o cash and cash items (including receivables),
o Government securities,
o securities of other investment companies, and
o other securities limited in respect to any one issuer to not
more than 5% of the value of the Series' total assets and to
not more than 10% of the outstanding voting securities of such
issuer.
These percentage limitations are measured at the time that a Series
acquires a security, and a Series will not lose its diversification status if
the Series' holdings exceed these percentages because of post-acquisition
changes in security prices.
Equity Swaps. Equity swap contracts offer an opportunity to invest in a market
without owning or taking physical custody of securities in circumstances in
which direct investment is restricted for legal reasons or is otherwise
impracticable. The counterparty to an equity swap contract will typically be a
bank, investment banking firm or broker/dealer. The counterparty will generally
agree to pay the Series the amount, if any, by which the notional amount of the
equity swap contract would have increased in value had it been invested in the
particular stocks, plus the dividends that would have been received on those
stocks. The Series will agree to pay to the counterparty a floating rate of
interest on the notional amount of the equity swap contract plus the amount, if
any, by which that notional amount would have decreased in value had it been
invested in such stocks. Therefore, the return to the Series on any equity swap
contract should be the gain or loss on the notional amount plus dividends on the
stocks less the interest paid by the Series on the notional amount.
The Series will enter into equity swaps only on a net basis, which
means that the two payment streams are netted out, with the Series receiving or
paying, as the case my be, only the net amount of the two payments. Payments may
be made at the conclusion of an equity swap contract or periodically during its
term. Equity swaps do not involve the delivery of securities or other underlying
assets. Accordingly, the risk of loss with respect to equity swaps is limited to
the net amount of payments that is contractually obligated to make. If the other
party to an equity swap defaults, the Series' risk of loss consists of the net
amount of payments that such Series is contractually entitled to receive, if
any. The net amount of the excess, if any, of the Series' obligations over its
entitlements with respect to each equity swap will be accrued on a daily basis
and an amount of cash or liquid assets, having an aggregate net asset value at
least equal to such accrued excess will be maintained in a segregated account by
the Series' custodian. Inasmuch as these transactions are entered into for
hedging purposes or are offset by segregated cash or liquid assets, as permitted
by applicable law, the Series will not treat them as being subject to the
Series' borrowing restrictions.
Fixed-Income Securities. A Series may invest in fixed-income securities of
companies which meet the investment criteria for the Series. The price of
fixed-income securities fluctuates with changes in interest rates, generally
rising when interest rates fall and falling when interest rates rise. Prices of
longer-term securities generally increase or decrease more sharply than those of
shorter-term securities in response to interest rate changes.
Foreign Currency Transactions. A Series will normally conduct its foreign
currency exchange transactions either on a spot (i.e., cash), basis at the spot
rate prevailing in the foreign currency exchange market, or through entering
into forward contracts to purchase or sell foreign currencies. A Series will
generally not enter into a forward contract with a term of greater than one
year.
There are certain markets where it is not possible to engage in
effective foreign currency hedging. This may be true, for example, for the
currencies of various countries where the foreign exchange markets are not
sufficiently developed to permit hedging activity to take place.
Foreign Securities. A Series may invest in foreign securities. These include
non-U.S. dollar-denominated securities traded principally outside the U.S. and
U.S. dollar-denominated securities traded in the U.S. (such as American
Depositary Receipts). Such investments increase a Series' diversification and
may enhance return, but they also involve some special risks such as exposure to
potentially adverse local political and economic developments; nationalization
and exchange controls; potentially lower liquidity and higher volatility;
possible problems arising from accounting, disclosure, settlement, and
regulatory practices that differ from U.S. standards; and the chance that
fluctuations in foreign exchange rates will decrease the investment's value
(favorable changes can increase its value). Foreign government securities are
issued or guaranteed by a foreign government, province, instrumentality,
political subdivision or similar unit thereof.
Futures and Options. Futures contracts are often used to manage risk, because
they enable the investor to buy or sell an asset in the future at an agreed upon
price. Options give the investor the right, but not the obligation, to buy or
sell an asset at a predetermined price in the future. A Series may buy and sell
futures contracts (and options on such contracts) to manage its exposure to
changes in securities prices and foreign currencies and as an efficient means of
adjusting overall exposure to certain markets. A Series may purchase or sell
call and put options on securities, financial indices, and foreign currencies,
and may invest in futures contracts on foreign currencies and financial indices,
including interest rates or an index of U.S. Government securities, foreign
government securities or equity or fixed-income securities.
Futures contracts and options may not always be successful hedges;
their prices can be highly volatile; using them could lower a Series' total
return; and the potential loss from the use of futures can exceed the Series'
initial investment in such contracts. These instruments may also be used for
non-hedging purposes such as increasing a Series' income.
The Series' use of commodity futures and commodity options trading
should not be viewed as providing a vehicle for shareholder participation in a
commodity pool. Rather, in accordance with regulations adopted by the Commodity
Futures Trading Commission (CFTC), a Series will employ such techniques only for
(1) hedging purposes, or (2) otherwise, to the extent that aggregate initial
margin and required premiums do not exceed 5 percent of the Series' net assets.
Foreign government securities are issued or guaranteed by a foreign
government, province, instrumentality, political subdivision or similar unit
thereof.
High-Yield Bonds. A Series may invest its assets in fixed-income securities
offering high current income that are in the lower-rated categories of
recognized rating agencies or, if not rated, considered to be of comparable
quality. These lower-rated fixed-income securities are considered, on balance,
as predominantly speculative with respect to capacity to pay interest and repay
principal in accordance with the terms of the obligation and generally will
involve more credit risk than securities in the higher rated categories.
High-yield bonds are commonly referred to as "junk bonds."
High-yield securities frequently are issued by corporations in the
growth stage of their development. They may also be issued in connection with a
corporate reorganization or a corporate takeover. Companies that issue such
high-yielding securities often are highly leveraged and may not have available
to them more traditional methods of financing. Therefore, the risk associated
with acquiring the securities of such issuers generally is greater than is the
case with higher rated securities. For example, during an economic downturn or
recession, highly leveraged issuers of high-yield securities may experience
financial stress. During such periods, such issuers may not have sufficient
revenues to meet their interest payment obligations. The issuer's ability to
service its debt obligations may also be adversely affected by specific
corporate developments, or the issuer's inability to meet specific projected
business forecasts, or the unavailability of additional financing. Adverse
publicity and investor perceptions regarding lower rated bonds, whether or not
based upon fundamental analysis, may also depress the price for such securities.
The risk of loss from default by the issuer is significantly greater for the
holders of high-yield securities because such securities are generally unsecured
and are often subordinated to other creditors of the issuer.
Hybrid Instruments. A Series may purchase hybrid instruments, which combine the
elements of futures contracts or options with those of debt, preferred equity or
a depository instrument. Often these hybrid instruments are indexed to the price
of commodity, a particular currency, or a domestic or foreign debt or equity
securities index. Hybrid instruments may take a variety of forms, including, but
not limited to, debt instruments with interest or principal payments or
redemption terms determined by reference to the value of a currency or commodity
or securities index at a future point in time, preferred stock with dividend
rates determined by reference to the value of a currency, or convertible
securities with the conversion terms related to a particular commodity.
Illiquid Securities. A Series may hold illiquid investments. Illiquid
investments are investments that cannot be sold or disposed of in the ordinary
course of business within seven days at approximately the price at which they
are valued. Illiquid investments generally include: repurchase agreements not
terminable within seven days; securities for which market quotations are not
readily available; restricted securities not determined to be liquid in
accordance with guidelines established by the Trust's Board of Trustees;
over-the-counter (OTC) options and, in certain instances, their underlying
collateral; and securities involved in swap, cap, collar and floor transactions.
Inflation-Indexed Bonds. A Series may purchase inflation-indexed bonds.
Inflation-indexed bonds are fixed income securities whose principal value is
periodically adjusted according to the rate of inflation. Such bonds generally
are issued at an interest rate lower than typical bonds, but are expected to
retain their principal value over time. The interest rate on these bonds is
fixed at issuance, but over the life of the bond the interest may be paid on an
increasing principal value, which has been adjusted for inflation.
Inflation-indexed securities issued by the U.S. Treasury have
maturities of ten years, although it is anticipated that securities with other
maturities will be issued in the future. The securities pay interest on a
semi-annual basis, equal to a fixed percentage of the inflation-adjusted
principal amount.
If the periodic adjustment rate measuring inflation falls, the
principal value of inflation-indexed bonds will be adjusted downward, and
consequently the interest payable on these securities (calculated with respect
to a smaller principal amount) will be reduced. Repayment of the original bond
principal upon maturity (as adjusted for inflation) is guaranteed in the case of
U.S. Treasury inflation-indexed bonds, even during a period of deflation.
However, the current market value of the bonds is not guaranteed, and will
fluctuate. The Series may also invest in other inflation related bonds which may
or may not provide a similar guarantee. If a guarantee of principal is not
provided, the adjusted principal value of the bond repaid at maturity may be
less than the original principal.
The value of inflation-indexed bonds is expected to change in response
to changes in real interest rates. Real interest rates in turn are tied to the
relationship between nominal interest rates and the rate of inflation.
Therefore, if inflation were to rise at a faster rate than nominal interest
rates, real interest rates might decline, leading to an increase in value of
inflation-indexed bonds. In contract, if nominal interest rates increased at a
faster rate than inflation, real interest rates might rise, leading to a
decrease in value of inflation-indexed bonds.
The periodic adjustment of U.S. inflation-index bonds is tied to the
Consumer Price-Index for Urban Consumers (CPI-U), which is calculated monthly by
the U.S. Bureau of Labor Statistics. The CPI-U is a measurement of changes in
the cost of living, made up of components such as housing, food, transportation
and energy. Inflation-indexed bonds issued by a foreign government are generally
adjusted to reflect a comparable inflation index, calculated by that government.
There can be no assurance that the CPI-U or any foreign inflation index will
accurately measure the real rate of inflation in the prices of goods and
services. Moreover, there can be no assurance that the rate of inflation in a
foreign country will be correlated to the rate of inflation in the United
States.
Any increase in the principal amount of an inflation-indexed bond will
be considered taxable ordinary income, even though investors do not receive
their principal until maturity.
Investment Companies. A Series may invest in investment companies to the extent
permitted under the 1940 Act. As a shareholder in an investment company, the
Series would bear its pro rata share of that investment company's expenses,
which could result in duplication of certain fees, including management and
administrative fees.
A Series may invest cash balances into investment companies managed by
a common investment adviser or its affiliates. A Series' investments in any such
fund will not be subject to any additional fees, including management and
administrative fees.
Mortgage-Backed Securities. A Series may invest in mortgage-backed securities.
Mortgage-backed securities are securities representing an interest in a pool of
mortgages. The mortgages may be of a variety of types, including adjustable
rate, conventional 30-year, fixed-rate, graduated payment, and 15-year.
Principal and interest payments made on the mortgages in the underlying mortgage
pool of a mortgage-backed security held by a Series are passed through to the
Series. This is in contrast to traditional bonds where principal is normally
paid back at maturity in a lump sum. Unscheduled prepayments of principal
shorten the securities' weighted average life and may lower their total return.
(When a mortgage in the underlying mortgage pool is prepaid, an unscheduled
principal prepayment is passed through to the Series. This principal is returned
to the Series at par. As a result, if a mortgage security were trading at a
discount, its total return would be increased by prepayments). The value of
these securities also may change because of changes in the market's perception
of the creditworthiness of the issuer. In addition, the mortgage securities
market in general may be adversely affected by changes in governmental
regulation or tax policies.
Mortgage Dollar Rolls. A Series may enter into mortgage dollar rolls in which a
Series sells mortgage-backed securities for delivery in the current month and
simultaneously contracts to repurchase substantially similar (same type, coupon
and maturity) securities on a specified future date. During the roll period, a
Series foregoes principal and interest paid on the mortgage-backed securities. A
Series is compensated by the interest earned on the cash proceeds of the initial
sale and from negotiated fees paid by brokers offered as an inducement to the
Series to "roll over" its purchase commitments. A Series may only enter into
covered rolls. A "covered roll" is a specific type of dollar roll for which
there is an offsetting cash position which matures on or before the forward
settlement date of the dollar roll transaction. At the time a Series enters into
a mortgage "dollar roll", it will establish an account with its custodian bank
in which it will maintain cash, U.S. Government securities or other liquid
assets equal in value to its obligations in respect of dollar rolls, and
accordingly, such dollar rolls will not be considered borrowings. Mortgage
dollar rolls involve the risk that the market value of the securities the Series
is obligated to repurchase under the agreement may decline below the repurchase
price. In the event the buyer of securities under a mortgage dollar roll files
for bankruptcy or becomes insolvent, the Series' use of proceeds of the dollar
roll may be restricted pending a determination by the other party, or its
trustee or receiver, whether to enforce the Series' obligation to repurchase the
securities.
Participations and Assignments. A Series may invest in fixed- and floating-rate
loans (Loans) arranged through private negotiations between a corporate borrower
or a foreign sovereign entity and one or more financial institutions (Lenders).
A Series may invest in such Loans in the form of participations in Loans
(Participations) and assignments of all or a portion of Loans from third parties
(Assignments). Participations typically will result in a Series having a
contractual relationship only with the Lender, not with the borrower. A Series
will have the right to receive payments of principal, interest and any fees to
which it is entitled only from the Lender selling the Participation and only
upon receipt by the Lender of the payments from the borrower. In connection with
purchasing Participations, a Series generally will have no right to enforce
compliance by the borrower with the terms of the loan agreement relating to the
Loan, nor any rights of set-off against the borrower, and a Series may not
benefit directly from any collateral supporting the Loan in which it has
purchased the Participation. As a result, a Series will assume the credit risk
of both the borrower and the Lender that is selling the Participation. In the
event of the insolvency of the Lender selling a Participation, a Series may be
treated as a general creditor of the Lender and may not benefit from any set-off
between the Lender and the borrower. A Series will acquire Participations only
if the Lender interpositioned between a Series and the borrower is determined by
the sub-adviser to be creditworthy. When a Series purchases Assignments from
Lenders, a Series will acquire direct rights against the borrower on the Loan,
except that under certain circumstances such rights may be more limited than
those held by the assigning Lender.
A Series may have difficulty disposing of Assignments and
Participations. Because the market for such instruments is not highly liquid, a
Series anticipates that such instruments could be sold only to a limited number
of institutional investors. The lack of a highly liquid secondary market may
have an adverse impact on the value of such instruments and will have an adverse
impact on a Series' ability to dispose of particular Assignments or
Participations in response to a specific economic event, such as deterioration
in the creditworthiness of the borrower. A Series currently treats investments
in Participations and Assignments as illiquid for purposes of its limitation on
investment in illiquid securities. However, the Trustees may in the future adopt
guidelines for determining whether Assignments and Loan Participations are
liquid or illiquid.
Passive Foreign Investment Companies. A Series may purchase the securities of
passive foreign investment companies. A passive foreign investment company, in
general, is a foreign corporation of which either at least 75% of its income is
passive or an average of at least 50% of is assets produce, or are held for the
production of, passive income. In addition to bearing their proportionate share
of the Trust's expenses (management fees and operating expenses), shareholders
will also indirectly bear similar expenses of such investment companies.
Portfolio Turnover. To a limited extent, a Series may engage in short-term
transactions if such transactions further its investment objective. A Series may
sell one security and simultaneously purchase another of comparable quality or
simultaneously purchase and sell the same security to take advantage of
short-term differentials in bond yields or otherwise purchase individual
securities in anticipation of relatively short-term price gains. The rate of
portfolio turnover will not be a determining factor in the purchase and sale of
such securities. Increased portfolio turnover necessarily results in
correspondingly higher costs including brokerage commissions, dealer mark-ups
and other transaction costs on the sale of securities and reinvestment in other
securities, and may result in the acceleration of taxable gains.
Real Estate Investment Trusts (REITs). The REITs in which a Series may invest
include equity REITs, which own real estate properties, and mortgage REITs,
which make construction, development and long-term mortgage loans. The value of
an equity REIT may be affected by changes in the value of the underlying
property, while a mortgage REIT may be affected by the quality of the credit
extended. The performance of both types of REITs depends upon conditions in the
real estate industry, management skills and the amount of cash flow. The risks
associated with REITs include defaults by borrowers, self-liquidation, failure
to qualify as a "pass-through" entity under the Federal tax law, failure to
qualify as an exempt entity under the 1940 Act, and the fact that REITs are not
diversified.
Repurchase Agreements and Reverse Repurchase Agreements. A Series may invest in
repurchase or reverse repurchase agreements. A repurchase agreement involves the
purchase of a security by a Series and a simultaneous agreement (generally by a
bank or dealer) to repurchase that security from the Series at a specified price
and date or upon demand. This technique offers a method of earning income on
idle cash. A repurchase agreement may be considered a loan collateralized by the
underlying security. The Series must take physical possession of the security or
receive written confirmation of the purchase and a custodial or safekeeping
receipt from a third party or be recorded as the owner of the security through
the Federal Reserve Book Entry System.
The Series may invest in open repurchase agreements which vary from the
typical agreement in the following respects: (1) the agreement has no set
maturity, but instead matures upon 24 hours' notice to the seller; and (2) the
repurchase price is not determined at the time the agreement is entered into,
but is instead based on a variable interest rate and the duration of the
agreement. In addition, a Series, together with other registered investment
companies having management agreements with a common investment adviser or its
affiliates, may transfer uninvested cash balances into a single joint account,
the daily aggregate balance of which will be invested in one or more repurchase
agreements.
When a Series invests in a reverse repurchase agreement, it sells a
portfolio security to another party, such as a bank or a broker-dealer, in
return for cash, and agrees to buy the security back at a future date and price.
Reverse repurchase agreements may be used to provide cash to satisfy unusually
heavy redemption requests or for other temporary or emergency purposes without
the necessity of selling portfolio securities or to earn additional income on
portfolio securities, such as Treasury bills and notes.
Short Sales. A Series may sell securities short. A short sale is the sale of a
security the Series does not own. It is "against the box" if at all times when
the short position is open the Series owns an equal amount of the securities or
securities convertible into, or exchangeable without further consideration for,
securities of the same issue as the securities sold short. To the extent that a
Series engages in short sales that are not "against the box," it must maintain
asset coverage in the form of assets determined to be liquid by the sub-adviser
in accordance with procedures established by the Board of Trustees, in a
segregated account, or otherwise cover its position in a permissible manner.
Short-Term Corporate Debt Securities. A Series may invest in short-term
corporate debt securities. These are non-convertible corporate debt securities
(e.g., bonds and debentures) which have one year or less remaining to maturity.
Corporate notes may have fixed, variable, or floating rates.
Standard & Poor's Depository Receipts (SPDRs). SPDRs are American Stock
Exchange-traded securities that represent ownership in the SPDR Trust, a trust
which has been established to accumulate and hold a portfolio of common stocks
that is intended to track the price performance and dividend yield of the S&P
500 Index. The SPDR trust is sponsored by a subsidiary of the American Stock
Exchange. SPDRs may be used for several reasons including but not limited to:
facilitating the handling of cash flows or trading, or reducing transaction
costs. The use of SPDRs would introduce additional risk to a Series as the price
movement of the instrument does not perfectly correlate with the price action of
the underlying index.
Stripped Mortgage-Backed Securities. A Series may purchase stripped
mortgage-backed securities, which may be considered derivative mortgage-backed
securities, which may be issued by agencies or instrumentalities of the U.S.
Government or by private entities. Stripped mortgage-backed securities have
greater volatility than other types of mortgage-backed securities. Stripped
mortgage-backed securities are structured with two or more classes that receive
different proportions of the interest and principal distributions on a pool of
mortgage assets. In the most extreme case, one class will receive all of the
interest (IOs, or interest-only securities), while the other class will receive
all of the principal (POs, or principal-only securities). The yield to maturity
of such mortgage-backed securities that are purchased at a substantial discount
or premium are extremely sensitive to changes in interest rates as well as to
the rate of principal payments (including prepayments) on the related underlying
mortgage assets.
As interest rates rise and fall, the value of IOs tends to move in the
same direction as interest rates. The value of the other mortgage-backed
securities described herein, like other debt instruments, will tend to move in
the opposite direction compared to interest rates. Under the Internal Revenue
Code of 1986, as amended (Code), POs may generate taxable income from the
current accrual of original issue discount, without a corresponding distribution
of cash to the Series.
The cash flows and yields on IO and PO classes are extremely sensitive
to the rate of principal payments (including prepayments) on the related
underlying mortgage assets. For example, a rapid or slow rate of principal
payments may have a material adverse effect on the prices of IOs or POs,
respectively. If the underlying mortgage assets experience greater than
anticipated prepayments of principal, an investor may fail to recoup fully its
initial investment in an IO class of a stripped mortgage-backed security, even
if the IO class is rated AAA or Aaa or is derived from a full faith and credit
obligation. Conversely, if the underlying mortgage assets experience slower than
anticipated prepayments of principal, the price on a PO class will be affected
more severely than would be the case with a traditional mortgage-backed
security.
Supranational Agency Securities. A Series may invest in securities issued or
guaranteed by certain supranational entities, such as the International
Development Bank.
U.S. Government Securities. U.S. Government securities are issued or guaranteed
as to principal and interest by U.S. Government agencies or instrumentalities.
These include securities issued by the Federal National Mortgage Association
(Fannie Mae), Government National Mortgage Association (Ginnie Mae), Federal
Home Loan Bank, Federal Land Banks, Farmers Home Administration, Banks for
Cooperatives, Federal Intermediate Credit Banks, Federal Financing Bank, Farm
Credit Banks, the Small Business Association, Student Loan Marketing
Association, and the Tennessee Valley Authority. Some of these securities, such
as these issued by Ginnie Mae, are supported by the full faith and credit of the
U.S. Treasury; others, such as those of Fannie Mae, are supported by the
discretionary authority of the U.S. Government to purchase the agency's
obligations; and still others, such as those of the Student Loan Marketing
Association, are supported only by the credit of the instrumentality. No
assurance can be given that the U.S. Government will provide financial support
to U.S. Government agencies or instrumentalities in the future, other than as
set forth above, since it is not obligated to do so by law.
U.S. Government Obligations. U.S. Government obligations include bills, notes,
bonds, and other debt securities issued by the U.S. Treasury. These are direct
obligations of the U.S. Government and differ mainly in the length of their
maturities.
Variable Rate Securities. Variable rate securities provide for a periodic
adjustment in the interest rate paid on the obligations. The terms of such
obligations must provide that interest rates are adjusted periodically based
upon some appropriate interest rate adjustment index as provided in the
respective obligations. The adjustment intervals may be regular and range from
daily up to annually, or may be event based, such as on a change in the prime
rate.
Warrants. A Series may invest in warrants. Warrants have no voting rights, pay
no dividends and have no rights with respect to the assets of the corporation
issuing them. Warrants basically are options to purchase equity securities at a
specific price valid for a specific period of time. They do not represent
ownership of the securities, but only the right to buy them. Warrants differ
from call options in that warrants are issued by the issuer of the security
which may be purchased on their exercise, whereas call options may be written or
issued by anyone. The prices of warrants do not necessarily move parallel to the
prices of the underlying securities.
When-Issued Securities and Forward Commitment Contracts. A Series may purchase
securities on a when-issued or delayed delivery basis (When-Issueds) and may
purchase securities on a forward commitment basis (Forwards). Any or all of the
Series' investments in debt securities may be in the form of When-Issueds and
Forwards. The price of such securities, which may be expressed in yield terms,
is fixed at the time the commitment to purchase is made, but delivery and
payment take place at a later date. Normally, the settlement date occurs within
90 days of the purchase for When-Issueds, but may be substantially longer for
Forwards. During the period between purchase and settlement, no payment is made
by the Series to the issuer and no interest accrues to the Series. The purchase
of these securities will result in a loss if their value declines prior to the
settlement date. This could occur, for example, if interest rates increase prior
to settlement. The longer the period between purchase and settlement, the
greater the risks. At the time the Series makes the commitment to purchase these
securities, it will record the transaction and reflect the value of the security
in determining its net asset value. The Series will maintain cash and/or liquid
assets with its custodian bank at least equal in value to commitments for them
during the time between the purchase and the settlement. Therefore, the longer
this period, the longer the period during which alternative investment options
are not available to the Series (to the extent of the securities used for
cover). Such securities either will mature or, if necessary, be sold on or
before the settlement date.
Zero Coupon and Pay-in-Kind Bonds. Unless otherwise stated herein, a Series may
invest up to 10% of its assets in zero coupon bonds or strips. Zero coupon bonds
do not make regular interest payments; rather, they are sold at a discount from
face value. Principal and accreted discount (representing interest accrued but
not paid) are paid at maturity. Strips are debt securities that are stripped of
their interest after the securities are issued, but otherwise are comparable to
zero coupon bonds. The market value of strips and zero coupon bonds generally
fluctuates in response to changes in interest rates to a greater degree than
interest-paying securities of comparable term and quality. A Series may also
purchase pay-in-kind bonds. Pay-in-kind bonds pay all or a portion of their
interest in the form of debt or equity securities.
Zero coupon and pay-in-kind bonds tend to be subject to greater price
fluctuations in response to changes in interest rates than are ordinary
interest-paying debt securities with similar maturities. The value of zero
coupon securities appreciates more during periods of declining interest rates
and depreciates more during periods of rising interest rates than ordinary
interest-paying debt securities with similar maturities. Zero coupon securities
and pay-in-kind bonds may be issued by a wide variety of corporate and
governmental issuers.
Current federal income tax law requires the holder of a zero coupon
security, certain pay-in-kind bonds and certain other securities acquired at a
discount (such as Brady Bonds) to accrue income with respect to these securities
prior to the receipt of cash payments. Accordingly, to avoid liability for
federal income and excise taxes, a Series may be required to distribute income
accrued with respect to these securities and may have to dispose of portfolio
securities under disadvantageous circumstances in order to generate cash to
satisfy these distribution requirements.
ADDITIONAL RISK CONSIDERATIONS
------------------------------
Emerging Markets. The considerations noted below under "Foreign Securities" may
be intensified in the case of investment in developing countries. Investments in
securities of issuers in emerging markets countries may involve a high degree of
risk and many may be considered speculative. These investments carry all of the
risks of investing in securities of foreign issuers to a heightened degree.
These heightened risks include: (i) greater risks of expropriation, confiscatory
taxation, nationalization, and less social, political and economic stability;
(ii) limitations on daily price changes and the small current size of the
markets for securities of emerging markets issuers and the currently low or
nonexistent volume of trading, resulting in lack of liquidity and in price
volatility; (iii) certain national policies which may restrict a Series'
investment opportunities including limitations on aggregate holdings by foreign
investors and restrictions on investing in issuers or industries deemed
sensitive to relevant national interests; and (iv) the absence of developed
legal structures governing private or foreign investment and private property.
Foreign Securities. Investments in foreign securities, including those of
foreign governments, involve risks that are different in some respects from
investments in securities of U.S. issuers, such as the risk of fluctuations in
the value of the currencies in which they are denominated, a heightened risk of
adverse political and economic developments and, with respect to certain
countries, the possibility of expropriation, nationalization or confiscatory
taxation or limitations on the removal of funds or other assets of a Series.
Securities of some foreign issuers in many cases are less liquid and more
volatile than securities of comparable domestic issuers. There also may be less
publicly available information about foreign issuers than domestic issuers, and
foreign issuers generally are not subject to the uniform accounting, auditing
and financial reporting standards, practices and requirements applicable to
domestic issuers. Certain markets may require payment for securities before
delivery. A Series may have limited legal recourse against the issuer in the
event of a default on a debt instrument. Delays may be encountered in settling
securities transactions in certain foreign markets and a Series will incur costs
in converting foreign currencies into U.S. dollars. Bank custody charges are
generally higher for foreign securities. The Series which invest primarily in
foreign securities are particularly susceptible to such risks. American
Depositary Receipts do not involve the same direct currency and liquidity risks
as foreign securities.
The share price of a Series that invests in foreign securities will
reflect the movements of both the prices of the portfolio securities and the
currencies in which such securities are denominated. A Series' foreign
investments may cause changes in a Series' share price that have a low
correlation with movement in the U.S. markets. Because most of the foreign
securities in which a Series invests will be denominated in foreign currencies,
or otherwise will have values that depend on the performance of foreign
currencies relative to the U.S. dollar, the relative strength of the U.S. dollar
may be an important factor in the performance of a Series, depending on the
extent of the Series' foreign investments.
A Series may employ certain strategies in order to manage exchange rate
risks. For example, a Series may hedge some or all of its investments
denominated in or exposed to a foreign currency against a decline in the value
of that currency. A Series may enter into contracts to sell that foreign
currency for U.S. dollars (not exceeding the value of a Series' assets
denominated in or exposed to that currency) or by participating in options or
futures contracts with respect to such currency (position hedge). A Series could
also hedge that position by selling a second currency, which is expected to
perform similarly to the currency in which portfolio investments are
denominated, for U.S. dollars (proxy hedge). A Series may also enter into a
forward contract to sell the currency in which the security is denominated for a
second currency that is expected to perform better relative to the U.S. dollar
if the sub-adviser believes there is a reasonable degree of correlation between
movements in the two currencies (cross hedge). A Series may also enter into a
forward contract to sell a currency in which portfolio securities are
denominated in exchange for a second currency in order to manage its currency
exposure to selected countries. In addition, when a Series anticipates
purchasing securities denominated in or exposed to a particular currency, the
Series may enter into a forward contract to purchase or sell such currency in
exchange for the dollar or another currency (anticipatory hedge).
These strategies minimize the effect of currency appreciation as well
as depreciation, but do not protect against a decline in the underlying value of
the hedged security. In addition, such strategies may reduce or eliminate the
opportunity to profit from increases in the value of the original currency and
may adversely impact a Series' performance if the sub-adviser's projection of
future exchange rates is inaccurate.
Futures, Options and Other Derivative Instruments. The use of futures, options,
forward contracts, and swaps (derivative instruments) exposes a Series to
additional investment risks and transaction costs. If a sub-adviser seeks to
protect a Series against potential adverse movements in the securities, foreign
currency or interest rate markets using these instruments, and such markets do
not move in a direction adverse to the Series, that Series could be left in a
less favorable position than if such strategies had not been used. Risks
inherent in the use of futures, options, forward contracts and swaps include:
(i) the risk that interest rates, securities prices and currency markets will
not move in the directions anticipated; (ii) imperfect correlation between the
price of derivative instruments and movements in the prices of the securities,
interest rates or currencies being hedged; (iii) the fact that skills needed to
use these strategies are different from those needed to select portfolio
securities; (iv) the possible absence of a liquid secondary market for any
particular instrument at any time; and (v) the possible need to defer closing
out certain hedged positions to avoid adverse tax consequences.
High-Yield/High-Risk Bonds. Lower-rated bonds involve a higher degree of credit
risk, which is the risk that the issuer will not make interest or principal
payments when due. In the event of an unanticipated default, a Series would
experience a reduction in its income, a decline in the market value of the
securities so affected and a decline in the value of its shares. More careful
analysis of the financial condition of issuers of lower-rated securities is
therefore necessary. During an economic downturn or substantial period of rising
interest rates, highly leveraged issuers may experience financial stress which
could adversely affect their ability to service principal and interest payment
obligations, to meet projected business goals and to obtain additional
financing.
The market prices of lower-rated securities are generally less
sensitive to interest rate changes than higher rated investments, but more
sensitive to adverse economic or political changes, or individual developments
specific to the issuer. Periods of economic or political uncertainty and change
can be expected to result in volatility of prices of these securities. Since the
last major economic recession, there has been a substantial increase in the use
of high-yield debt securities to fund highly leveraged corporate acquisitions
and restructurings, so past experience with high-yield securities in a prolonged
economic downturn may not provide an accurate indication of future performance
during such periods. Lower-rated securities also may have less liquid markets
than higher-rated securities, and their liquidity as well as their value may be
more severely affected by adverse economic conditions. Many high-yield bonds do
not trade frequently. When they do trade, their price may be substantially
higher or lower than had been expected. A lack of liquidity also means that
judgment may play a bigger role in valuing the securities. Adverse publicity and
investor perceptions as well as new or proposed laws may also have a greater
negative impact on the market for lower rated bonds.
A Series may also invest in unrated debt securities of foreign and
domestic issuers. Unrated debt, while not necessarily of lower quality than
rated securities, may not have as broad a market. Sovereign debt of foreign
governments is generally rated by country, because these ratings do not take
into account individual factors relevant to each issue and may not be updated
regularly. Because of the size and perceived demand of the issue, among other
factors, certain municipalities may not incur the costs of obtaining a rating.
The sub-adviser will analyze the credit- worthiness of the issuer, as well as
any financial institution or other party responsible for payments on the
security, in determining whether to purchase unrated municipal bonds. (See
Appendix A for a description of bond rating categories).
High-Yield Foreign Sovereign Debt Securities. Investing in fixed and floating
rate high-yield foreign sovereign debt securities will expose the Series
investing in such securities to the direct or indirect consequences of
political, social or economic changes in the countries that issue the
securities. (See "Foreign Securities.") The ability and willingness of sovereign
obligors in developing and emerging market countries or the governmental
authorities that control repayment of their external debt to pay principal and
interest on such debt when due may depend on general economic and political
conditions within the relevant country. Countries such as those in which a
Series may invest have historically experienced, and may continue to experience,
high rates of inflation, high interest rates, exchange rate trade difficulties
and extreme poverty and unemployment. Many of these countries are also
characterized by political uncertainty or instability. Additional factors which
may influence the ability or willingness to service debt include, but are not
limited to, a country's cash flow situation, the availability of sufficient
foreign exchange on the date a payment is due, the relative size of its debt
service burden to the economy as a whole, and its government's policy towards
the International Monetary Fund, the World Bank and other international
agencies.
Hybrid Instruments. The risks of investing in hybrid instruments reflect a
combination of the risks of investing in securities, options, futures and
currencies, including volatility and lack of liquidity. Reference is made to the
discussion of futures, options, and forward contracts herein for a discussion of
these risks. Further, the prices of the hybrid instrument and the related
commodity or currency may not move in the same direction or at the same time.
Hybrid instruments may bear interest or pay preferred dividends at below market
(or even relatively nominal) rates. Alternatively, hybrid instruments may bear
interest at above market rates but bear an increased risk of principal loss. In
addition, because the purchase and sale of hybrid instruments could take place
in an over-the-counter or in a private transaction between the Series and the
seller of the hybrid instrument, the creditworthiness of the counter-party to
the transaction would be a risk factor which the Series would have to consider.
Hybrid instruments also may not be subject to regulation of the Commodity
Futures Trading Commission, which generally regulates the trading of commodity
futures by U.S. persons, the Securities and Exchange Commission, which regulates
the offer and sale of securities by and to U.S. persons, or any other
governmental regulatory authority.
Securities Lending. Lending securities enables a Series to earn additional
income, but could result in a loss or delay in recovering these securities. The
borrower of a Series' portfolio securities must maintain acceptable collateral
with that Series' custodian in an amount, marked to market daily, at least equal
to the market value of the securities loaned, plus accrued interest and
dividends. Acceptable collateral is limited to cash, U.S. government securities
and irrevocable letters of credit that meet certain guidelines. A Series may
reinvest an cash collateral in money market investments or other short-term
liquid investments. A Series will retain authority to terminate any of its loans
at any time. A Series may pay reasonable fees in connection with a loan and may
pay the borrower or placing broker a negotiated portion of the interest earned
on the reinvestment of cash held as collateral. A Series will receive amounts
equivalent to any dividends, interest or other distributions on the securities
loaned. A Series will regain record ownership of loaned securities to exercise
beneficial rights, such as voting and subscription rights, when regaining such
rights is considered to be in the Series' interest.
<PAGE>
INVESTMENT RESTRICTIONS APPLICABLE TO ALL SERIES
------------------------------------------------
Fundamental Policies. Each Series is subject to certain fundamental policies and
restrictions that may not be changed without shareholder approval. Shareholder
approval means approval by the lesser of (i) more than 50% of the outstanding
voting securities of the Trust (or a particular Series if a matter affects just
that Series), or (ii) 67% or more of the voting securities present at a meeting
if the holders of more than 50% of the outstanding voting securities of the
Trust (or the affected Series) are present or represented by proxy. Unless
otherwise indicated, all restrictions apply at the time of investment.
(1) Each Series, except the JNL Capital Growth Series, JNL/S&P
Conservative Growth Series I, JNL/S&P Moderate Growth Series I, JNL/S&P
Aggressive Growth Series I, JNL/S&P Very Aggressive Growth Series I, JNL/S&P
Equity Growth Series I, JNL/S&P Equity Aggressive Growth Series I, JNL/S&P
Conservative Growth Series II, JNL/S&P Moderate Growth Series II, JNL/S&P
Aggressive Growth Series II, JNL/S&P Very Aggressive Growth Series II, JNL/S&P
Equity Growth Series II, JNL/S&P Equity Aggressive Growth Series II, JNL/S&P
Conservative Growth Series, JNL/S&P Moderate Growth Series, JNL/S&P Aggressive
Growth Series, Lazard/JNL Small Cap Value Series and Lazard/JNL Mid Cap Value
Series, shall be a "diversified company," as such term is defined under the 1940
Act.
(2) No Series may invest more than 25% of the value of their respective
assets in any particular industry (other than U.S. Government securities),
except the PPM America/JNL Money Market Series.
(3) No Series may invest directly in real estate or interests in real
estate; however, the Series may own debt or equity securities issued by
companies engaged in those businesses.
(4) No Series may purchase or sell physical commodities other than
foreign currencies unless acquired as a result of ownership of securities (but
this limitation shall not prevent the Series from purchasing or selling options,
futures, swaps and forward contracts or from investing in securities or other
instruments backed by physical commodities).
(5) No Series may lend any security or make any other loan if, as a
result, more than 33 1/3% of the Series' total assets would be lent to other
parties (but this limitation does not apply to purchases of commercial paper,
debt securities or repurchase agreements).
(6) No Series may act as an underwriter of securities issued by others,
except to the extent that a Series may be deemed an underwriter in connection
with the disposition of portfolio securities of such Series.
(7) No Series may invest more than 15% of a Series' net assets (10% in
the case of the PPM America/JNL Money Market Series and the JNL/Alger Growth
Series) in illiquid securities. This limitation does not apply to securities
eligible for resale pursuant to Rule 144A of the Securities Act of 1933 or
Commercial Paper issued in reliance upon the exemption from registration
contained in Section 4(2) of that Act, which have been determined to be liquid
in accordance with guidelines established by the Board of Trustees.
(8) The Series will not issue senior securities except that they may
borrow money for temporary or emergency purposes (not for leveraging or
investment) in an amount not exceeding 25% of the value of their respective
total assets (including the amount borrowed) less liabilities (other than
borrowings). If borrowings exceed 25% of the value of a Series' total assets by
reason of a decline in net assets, the Series will reduce its borrowings within
three business days to the extent necessary to comply with the 25% limitation.
This policy shall not prohibit reverse repurchase agreements, deposits of assets
to margin or guarantee positions in futures, options, swaps and forward
contracts, or the segregation of assets in connection with such contracts.
Operating Policies. The Trustees have adopted additional investment restrictions
for the Series. These restrictions are operating policies of the Series and may
be changed by the Trustees without shareholder approval. The additional
investment restrictions adopted by the Trustees to date include the following:
For each Series, to the extent applicable:
(a) The Series intend to comply with the CFTC regulations limiting
a Series' investments in futures and options for non-hedging
purposes.
For the JNL/Alger Growth Series:
(a) At least 85% of the Series' net assets, under normal market
conditions, will be invested in equity securities and at least
65% of its total assets will be invested in the equity
securities of companies that, at the time their securities are
purchased by the Series, have a market capitalization of $1
billion or more.
(b) The Series may hold up to 15% of its net assets in money
market instruments and repurchase agreements.
For the JNL/Alliance Growth Series:
(a) The Series may invest up to 25% of its total assets in foreign
securities.
For the JNL/Eagle Core Equity Series:
(a) At least 65% of the Series' total assets, under normal market
conditions, will be invested in U.S. common stocks.
(b) The Series may invest up to 35% of its assets in
non-investment grade securities.
(c) The Series may invest up to 25% of its total assets in foreign
securities.
For the JNL/Eagle SmallCap Equity Series:
(a) At least 65% of its total assets will be invested, under
normal market conditions, in the equity securities of
companies that, at the time their securities are purchased by
the Series, have a market capitalization under $1 billion.
(b) The Series may invest up to 5% of its assets in non-investment
grade securities.
For the JNL/J.P. Morgan Enhanced S&P 500 Index Series:
(a) At least 65% of its total assets will be invested, under
normal market conditions, in stocks.
For the JNL/J.P. Morgan International & Emerging Markets Series:
(a) At least 65% of its total assets will be invested, under
normal market conditions, in equity securities of foreign
issuers.
(b) The Series may invest up to 10% of its total assets in shares
of investment companies and up to 5% of its total assets in
any one investment company as long as that investment does not
represent more than 3% of the total voting stock of the
acquired investment company.
For each of the JNL/Janus Aggressive Growth Series, JNL/Janus Capital Growth
Series and JNL/Janus Global Equities Series:
(a) The Series may not invest more than 35% of its net assets in
high-yield/high-risk bonds.
(b) The Series may not invest more than 25% of its assets in
mortgage- and asset-backed securities.
(c) The Series may not invest more than 10% of its assets in zero
coupon bonds.
For the JNL/PIMCO Total Return Bond Series:
(a) At least 65% of its total assets will be invested, under
normal market conditions, in fixed-income securities.
(b) The Series may invest up to 10% of its assets in
non-investment grade fixed-income securities rated at least B
by Moody's or S&P.
(c) The Series may invest up to 20% of its assets in securities
denominated in foreign currencies.
(d) The Series may invest up to 10% of its assets in securities of
issuers based in emerging markets.
(e) The Series may not invest more than 5% of its net assets in
any combination of inverse floater, interest-only or
principal-only securities.
(f) The Series may not enter into a swap agreement with a party if
the net amount owed or to be received under existing contracts
with that party would exceed 5% of the Series' assets.
For the JNL/Putnam Growth Series:
(a) The Series may invest up to 20% of its net assets in foreign
securities.
For the JNL/Putnam Value Equity Series:
(a) At least 65% of its total assets will be invested, under
normal market conditions, in equity securities.
(b) The Series may invest up to 25% of its total assets in the
common stocks of foreign issuers.
For the JNL/SSGA International Index Series:
(a) The Series may hold up to 25% of its value in MSCI E.A.FE.
futures contracts.
For the JNL/SSGA Russell 2000 Index Series:
(a) The eries may hold up to 5% of its value in Russell 2000 Index
futures contracts.
For the JNL/SSGA S&P 500 Index Series:
(a) The Series may hold up to 25% of its value in S&P 500 Index
futures contracts.
For the Goldman Sachs/JNL Growth & Income Series:
(a) At least 65% of its total assets will be invested, under
normal market conditions, in equity securities that the
sub-adviser considers to have favorable prospects for capital
appreciation or dividend-paying ability.
(b) The Series may invest up to 35% of its total assets in
fixed-income securities that, in the opinion of the
sub-adviser, offer the potential to further the Series'
investment objectives.
(c) The Series may invest up to 25% of its total assets in foreign
securities, including securities of issuers in emerging
markets or countries and securities quoted in foreign
currencies.
(d) The Series may invest up to 10% of its total assets in
non-investment grade securities.
For the Lazard/JNL Mid Cap Value Series:
(a) At least 80% of its total assets will generally be invested in
the equity securities of undervalued medium size companies.
(b) The Series may invest up to 15% of its total assets in foreign
securities.
For the Lazard/JNL Small Cap Value Series:
(a) At least 80% of its total assets will generally be invested in
the equity securities of small U.S. companies in the range of
the Russell 2000 Index.
(b) The Series does not currently intend to invest more than 10%
of its total assets in the securities of unseasoned companies.
For the PPM America/JNL Balanced Series:
(a) At least 25% of its assets will be invested, under normal
market conditions, in fixed-income senior securities.
(b) The Series may invest up to 35% of its net assets in
non-investment grade securities rated at least Ca by Moody's
Investors Services, Inc. (Moody's) or CC by Standard & Poor's,
a division of The McGraw-Hill Companies, Inc. (S&P).
For the PPM America/JNL High Yield Bond Series:
(a) At least 65% of its total assets will be invested, under
normal market conditions, in bonds rated Ba or below by
Moody's or BB or below by S&P, or if unrated, of comparable
quality.
(b) The Series may invest up to 10% of its total assets in bonds
rated C by Moody's or D by S&P.
(c) The series may invest up to 25% of its assets in foreign
securities.
For the PPM America/JNL Money Market Series:
(a) The Series may not invest more than 5% of its assets in the
securities of any one issuer or invest more than 5% of its
assets in securities (other than U.S. Government securities
and repurchase agreements on such securities) that have not
been rated in the highest category by the requisite rating
agencies or, if unrated, have not been deemed to be of
comparable quality, as determined in accordance with Rule 2a-7
under the 1940 Act.
(b) The Series may invest more than 25% of its total assets in the
domestic banking industry. This 25% limitation does not apply
to U.S. Government securities, including obligations issued or
guaranteed by its agencies or instrumentalities.
For the Salomon Brothers/JNL Balanced Series:
(a) The Series currently expects that at least 40% of its total
assets will be invested, under normal market conditions, in
equity securities.
(b) The Series may invest up to 20% of its net assets in
nonconvertible fixed-income securities rated Ba or lower by
Moody's or BB or lower by S&P or, if unrated, are determined
to be of comparable quality.
(c) The Series may invest up to 20% of its total assets in
foreignsecurities.
(d) The Series may not invest more than 10% of its assets in
repurchase agreements maturing in more than 7 days.
For the Salomon Brothers/JNL Global Bond Series:
(a) The Series does not currently intend to invest more than 75%
of its assets in medium- or lower-rated securities.
(b) The Series may invest up to 20% of its assets in common stock,
convertible securities, warrants, preferred stock or other
equity securities when consistent with the Series' objectives.
(c) To maintain liquidity, the Series may invest up to 20% of its
assets in high-quality, short-term money market instruments.
(d) The Series may not make loans of its portfolio securities with
a value in excess of 25% of its total assets.
For the Salomon Brothers/JNL High Yield Bond Series:
(a) At least 80% of its total assets will be invested, under norma
market conditions, in non-investment grade fixed-income
securities.
(b) The Series may invest up to 10% of its total assets in the
securities of foreign issuers and up to 5% of its total assets
in foreign governmental issuers in any one country.
(c) The Series may invest up to 10% of its total assets in either
(i) equipment lease certificates, equipment trust certificates
and conditional sales contracts or (ii) limited partnership
interests.
(d) The Series may invest up to 10% of its total assets in common
stock, convertible securities, warrants or other equity
securities when consistent with its objective.
(e) To maintain liquidity, the Series may invest up to 20% of its
assets in cash and/or U.S. dollar-denominated debt securities.
For the Salomon Brothers/JNL U.S. Government & Quality Bond Series:
(a) At least 65% of its total assets will be invested, under
normal market conditions, in: U.S. Treasury obligations;
obligations issued or guaranteed by agencies or
instrumentalities of the U.S. Government; mortgage-backed
securities guaranteed by Ginnie Mae that are supported by the
full faith and credit of the U.S. Government; mortgage-backed
securities guaranteed by agencies or instrumentalities of the
U.S. Government which are supported by their own credit but
not the full faith and credit of the U.S. Government; and
collateralized mortgage obligations issued by private issuers
for which the underlying mortgage-backed securities serving as
collateral are backed either by (i)the credit alone of the
U.S. Government agency or instrumentality which issues or
guarantees them or (ii) the full faith and credit of the U.S.
Government.
(b) The Series may invest up to 35% of its assets in U.S.
dollar-denominated securities rated AAA, AA, A or BBB by S&P
or Aaa, Aa, A or Baa by Moody's, or if unrated, determined to
be of comparable quality.
(c) The Series may not invest more than 10% of its total assets in
obligations of foreign issuers.
(d) The Series may not make loans of its portfolio securities with
a value in excess of 25% of its total assets.
For the T. Rowe Price/JNL Established Growth Series:
(a) The Series may invest up to 30% of its total assets (excluding
reserves) in foreign securities.
For the T. Rowe Price/JNL Mid-Cap Growth Series:
(a) At least 65% of its total assets will be invested, under
normal market conditions, in mid-cap (as defined in the
Prospectus) common stocks with above-average growth potential.
(b) The Series may invest up to 25% of its total assets (excluding
reserves) in foreign securities.
Insurance Law Restrictions. In connection with the Trust's agreement to sell
shares to the separate accounts, Jackson National Financial Services, LLC (JNFS)
and the insurance companies may enter into agreements, required by certain state
insurance departments, under which JNFS may agree to use its best efforts to
assure and to permit insurance companies to monitor that each Series of the
Trust complies with the investment restrictions and limitations prescribed by
state insurance laws and regulations applicable to the investment of separate
account assets in shares of mutual funds. If a Series failed to comply with such
restrictions or limitations, the insurance company would take appropriate action
which might include ceasing to make investments in the Series or withdrawing
from the state imposing the limitation. Such restrictions and limitations are
not expected to have a significant impact on the Trust's operations.
TRUSTEES AND OFFICERS OF THE TRUST
----------------------------------
The officers of the Trust manage its day to day operations and are
responsible to the Trust's Board of Trustees. The trustees set broad policies
for each Series and choose the Trust's officers. The following is a list of the
trustees and officers of the Trust and a statement of their present positions
and principal occupations during the past five years.
For purposes of this section, the term "Fund Complex" includes each of the
following investment companies: JNL Series Trust, JNL Variable Fund LLC, JNL
Variable Fund III LLC, JNL Variable Fund V LLC, JNLNY Variable Fund I LLC, and
JNLNY Variable Fund II LLC. Each of the Trustees is also a Trustee or Manager of
each of the other funds in the Fund Complex and each of the Trust's officers is
also an officer of one or more of the funds in the Fund Complex.
ANDREW B. HOPPING* (Age 40), 5901 Executive Drive, Lansing, Michigan 48911
Trustee of the Trust and Member of the Board of Managers of each of the other
funds in the Fund Complex
President and Chief Executive Officer of the Trust and each of the other funds
in the Fund Complex
JNL Series Trust, Vice President (8/96 to 8/97)
JNL Series Trust, Treasurer (8/96 to 8/97)
JNL Series Trust, Chief Financial Officer (8/96 to 8/97)
Jackson National Financial Services, LLC, President (3/98 to present)
Jackson National Financial Services, LLC, Managing Board Member
(3/98 to present)
Jackson National Life Insurance Company, Executive Vice President
(7/98 to present)
Jackson National Life Insurance Company, Chief Financial Officer
(12/97 to present)
Jackson National Life Insurance Company, Senior Vice President (6/94 to 7/98)
National Planning Corporation, Vice President (5/98 to 7/98)
National Planning Corporation, Director (6/97 to present)
Jackson National Financial Services, Inc., Chief Executive Officer
(7/97 to 5/98)
Jackson National Financial Services, Inc., President (7/97 to 5/98)
Countrywide Credit, Executive Vice President (3/92 to 6/94)
JOSEPH FRAUENHEIM (Age 64), 1405 Cambridge, Lansing, MI 48911
Trustee of the Trust and Member of the Board of Managers of each of the other
funds in the Fund Complex
Consultant (1991 to present)
ROBERT A. FRITTS* (Age 50) 5901 Executive Drive, Lansing, Michigan 48911
Trustee of the Trust and Member of the Board of Managers of each of the other
funds in the Fund Complex
Vice President, Treasurer and Chief Financial Officer of the Trust and each of
the other funds in the Fund Complex
JNL Series Trust, Assistant Treasurer (2/96 to 8/97)
JNL Series Trust, Assistant Secretary (12/94 to 2/96)
JNL, Vice President and Controller
THOMAS J. MEYER (Age 51) 5901 Executive Drive, Lansing, Michigan 48911
Vice President, Secretary and Counsel of the Trust and each of the other funds
in the Fund Complex
Jackson National Life Insurance Company, Senior Vice President (7/98 to present)
Jackson National Life Insurance Company, Secretary (9/94 to present)
Jackson National Life Insurance Company, General Counsel (3/85 to present)
Jackson National Life Insurance Company, Vice President (3/85 to 7/98)
RICHARD MCLELLAN (Age 56), 1191 Carriageway North, East Lansing, MI 48823
Trustee of the Trust and Member of the Board of Managers of each of the other
funds in the Fund Complex
Dykema Gossett PLLC, Attorney
PETER MCPHERSON (Age 57), 1 Abbott Road, East Lansing, MI 48824
Trustee of the Trust and Member of the Board of Managers of each of the other
funds in the Fund Complex
Michigan State University, President (10/93 to present)
MARK D. NERUD (Age 32) 225 West Wacker Drive, Suite 1200, Chicago, IL 60606
Vice President and Assistant Treasurer of the Trust and each of the other funds
in the Fund Complex
Jackson National Financial Services, LLC, Chief Financial Officer
(3/98 to present)
Jackson National Financial Services, LLC, Managing Board Member
(3/98 to present)
National Planning Corporation, Vice President (5/98 to present)
Jackson National Financial Services, Inc., Director (1/98 to 5/98)
Jackson National Financial Services, Inc., Chief Operating Officer
(6/97 to 5/98)
Jackson National Financial Services, Inc., Treasurer (6/97 to 5/98)
Jackson National Life Insurance Company, Assistant Vice President - Mutual Fund
Operations (4/97 to present)
Jackson National Life Insurance Company, Assistant Controller (10/96 to 4/97)
Jackson National Life Insurance Company, Senior Manager - Mutual Fund Operations
(4/96 to 10/96)
Voyageur Asset Management Company, Manager - Mutual Fund Accounting
(5/93 to 4/96)
AMY D. EISENBEIS (Age 34) 5901 Executive Drive, Lansing, Michigan 48911
Vice President and Assistant Secretary of the Trust and each of the other funds
in the Fund Complex
Jackson National Financial Services, LLC, Vice President (3/98 to present)
Jackson National Financial Services, LLC, Secretary (3/98 to present)
National Planning Corporation, Vice President (1/98 to 7/98) National Planning
Corporation, Secretary (1/98 to 7/98)
National Planning Corporation, Chief Legal Officer (1/98 to 7/98)
Jackson National Life Insurance Company, Assistant Vice President \
(4/99 to present)
Jackson National Life Insurance Company, Associate General Counsel
(7/95 to present)
Waddell & Reed, Inc., Staff Attorney (1/94 to 7/95)
- -----------
*Trustees who are interested persons as defined in the Investment Company Act of
1940.
<PAGE>
As of April 26, 1999, the officers and trustees of the Trust, as a
group, owned less than 1% of the then outstanding shares of the Trust. To the
extent required by applicable law, Jackson National Life Insurance Company will
solicit voting instructions from owners of variable insurance or variable
annuity contracts. All shares of each Series of the Trust will be voted by
Jackson National Life Insurance Company in accordance with voting instructions
received from such variable contract owners. Jackson National Life Insurance
Company will vote all of the shares which it is entitled to vote in the same
proportion as the voting instructions given by variable contract owners, on the
issues presented, including shares which are attributable to Jackson National
Life Insurance Company's interest in the Trust.
The trustees who are "interested persons" and officers as designated
above receive no compensation from the Trust. Disinterested Trustees will be
paid $4,000 for each meeting of the Board of Trustees/Managers that they attend.
The fees to the disinterested Trustees are divided among the funds in the Fund
Complex based on their relative size.
For the year ended December 31, 1998, the disinterested Trustees received the
following fees from the Trust for service as Trustee:
Pension or Retirement
Aggregate Compensation Benefits Accrued As Part of
Trustee from Trust Trust Expenses
- ------- ---------- --------------
Joseph Frauenheim $20,000 $0
Richard McLellan $20,000 0
Peter McPherson $20,000 0
PERFORMANCE
-----------
A Series' historical performance may be shown in the form of total
return and yield. These performance measures are described below. Performance
advertised for a Series may or may not reflect the effect of any charges that
are imposed under a variable annuity contract (Contract) that is funded by the
Trust. Such charges, described in the prospectus for the Contract, will have the
effect of reducing a Series' performance.
Standardized average annual total return and non-standardized total
return measure both the net investment income generated by, and the effect of
any realized and unrealized appreciation or depreciation of, the underlying
investments of a Series. Yield is a measure of the net investment income per
share earned over a specific one month or 30-day period (seven-day period for
the PPM America/JNL Money Market Series) expressed as a percentage of the net
asset value.
A Series' standardized average annual total return quotation is
computed in accordance with a standardized method prescribed by rules of the
Securities and Exchange Commission (SEC). Standardized average annual total
return shows the percentage rate of return of a hypothetical initial investment
of $1,000 for the most recent one-, five- and ten-year periods, or for a period
covering the time the Series has been in existence if the Series has not been in
existence for one of the prescribed periods. Because average annual total
returns tend to smooth out variations in the Series' returns, you should
recognize that they are not the same as actual year-by-year results. The
standardized average annual total return for a Series for a specific period is
found by first taking a hypothetical $1,000 investment (initial investment) in
the Series' shares on the first day of the period, adjusting to deduct the
applicable charges, if any, and computing the redeemable value of that
investment at the end of the period. The redeemable value is then divided by the
initial investment, and this quotient is taken to the Nth root (N representing
the number of years in the period) and 1 is subtracted from the result, which is
then expressed as a percentage. The calculation assumes that all income and
capital gains dividends paid by the Series have been reinvested at net asset
value on the reinvestment dates during the period.
The standardized average annual total return for each Series (except
the PPM America/JNL Money Market Series) for the periods indicated was as
follows:
<TABLE>
<CAPTION>
One-Year Period Commencement of
Ended December 31, Operations to
1998 December 31, 1998
---- -----------------
<S> <C> <C>
JNL/Alger Growth Series** 45.66% 25.06%
JNL/Alliance Growth Series**** N/A 32.80%
JNL/Eagle Core Equity Series*** 16.54% 24.15%
JNL/Eagle SmallCap Equity Series*** 1.18% 19.01%
JNL/J.P. Morgan International & Emerging Markets Series**** N/A -1.24%
JNL/Janus Aggressive Growth Series* 57.66% 30.36%
JNL/Janus Capital Growth Series* 35.16% 27.59%
JNL/Janus Global Equities Series* 26.87% 29.59%
JNL/PIMCO Total Return Bond Series**** N/A 5.70%
JNL/Putnam Growth Series* 34.93% 30.82%
JNL/Putnam Value Equity Series* 12.48% 22.46%
JNL/S&P Conservative Growth Series I***** N/A 4.70%
JNL/S&P Moderate Growth Series I***** N/A 6.30%
JNL/S&P Aggressive Growth Series I***** N/A 8.80%
JNL/S&P Very Aggressive Growth Series I***** N/A 11.90%
JNL/S&P Equity Growth Series I***** N/A 6.40%
JNL/S&P Equity Aggressive Growth Series I***** N/A 7.50%
JNL/S&P Conservative Growth Series II***** N/A -4.60%
JNL/S&P Moderate Growth Series II***** N/A 2.20%
JNL/S&P Aggressive Growth Series II***** N/A 0.50%
JNL/S&P Very Aggressive Growth Series II***** N/A 8.00%
JNL/S&P Equity Growth Series II***** N/A 0.40%
JNL/S&P Equity Aggressive Growth Series II***** N/A 3.60%
Goldman Sachs/JNL Growth & Income Series**** N/A -9.31%
Lazard/JNL Mid Cap Value Series**** N/A -7.64%
Lazard/JNL Small Cap Value Series**** N/A -12.92%
PPM America/JNL Balanced Series* 10.06% 15.10%
PPM America/JNL High-Yield Bond Series* 3.84% 10.40%
Salomon Brothers/JNL Balanced Series**** N/A 5.91%
Salomon Brothers/JNL Global Bond Series* 2.46% 9.47%
Salomon Brothers/JNL High-Yield Bond Series**** N/A 1.32%
Salomon Brothers/JNL U.S. Government & Quality Bond Series* 9.40% 7.71%
T. Rowe Price/JNL Established Growth Series* 27.78% 28.14%
T. Rowe Price/JNL International Equity Investment Series* 14.43% 10.43%
T. Rowe Price/JNL Mid-Cap Growth Series* 21.49% 25.62%
</TABLE>
* Commenced operations on May 15, 1995.
** Commenced operations on October 16, 1995.
*** Commenced operations on September 16, 1996.
**** Commenced operations on March 2, 1998. Performance figures are not
annualized.
***** The JNL/S&P Conservative Growth Series I commenced operations on
April 9, 1998; the JNL/S&P Moderate Growth Series I commenced operations on
April 8, 1998; the JNL/S&P Aggressive Growth Series I commenced operations on
April 8, 1998; the JNL/S&P Very Aggressive Growth Series I commenced operations
on April 1, 1998; the JNL/S&P Equity Growth Series I commenced operations on
April 13, 1998; the JNL/S&P Equity Aggressive Growth Series I commenced
operations on April 15, 1998; the JNL/S&P Conservative Growth Series II
commenced operations on April 13, 1998; the JNL/S&P Moderate Growth Series II
commenced operations on April 13, 1998; the JNL/S&P Aggressive Growth Series II
commenced operations on April 13, 1998; the JNL/S&P Very Aggressive Growth
Series II commenced operations on April 13, 1998; the JNL/S&P Equity Growth
Series II commenced operations on April 13, 1998; and the JNL/S&P Equity
Aggressive Growth Series II commenced operations on April 13, 1998. Performance
figures are not annualized.
The JNL/J.P. Morgan Enhanced S&P 500 Index Series, the JNL/S&P
Conservative Growth Series, the JNL/S&P Moderate Growth Series, the JNL/S&P
Aggressive Growth Series, the JNL/SSGA Enhanced Intermediate Bond Index Series,
the JNL/SSGA International Index Series, the JNL/SSGA Russell 2000 Index Series,
the JNL/SSGA S&P 500 Index Series, and the JNL/SSGA S&P MidCap Index Series were
not in operation in 1998. Prior to May 1, 1997, the PPM America/JNL Balanced
Series was the JNL/Phoenix Investment Counsel Balanced Series and was
sub-advised by Phoenix Investment Counsel Inc., the JNL/Putnam Growth Series was
the JNL/Phoenix Investment Counsel Growth Series and was sub-advised by Phoenix
Investment Counsel, Inc., and the JNL/Putnam Value Equity Series was the PPM
America/JNL Value Equity Series and was sub-advised by PPM America, Inc.
The standardized average annual total return quotations will be current
to the last day of the calendar quarter preceding the date on which an
advertisement is submitted for publication. The standardized average annual
total return will be based on rolling calendar quarters and will cover at least
periods of one, five and ten years, or a period covering the time the Series has
been in existence, if it has not been in existence for one of the prescribed
periods.
Non-standardized total return may also be advertised. Non-standardized
total return may be for periods other than those required to be presented or may
otherwise differ from standardized average annual total return. Non-standardized
total return for a specific period is calculated by first taking an investment
(initial investment) in the Series' shares on the first day of the period and
computing the end value of that investment at the end of the period. The total
return percentage is then determined by subtracting the initial investment from
the ending value and dividing the remainder by the initial investment and
expressing the result as a percentage. The calculation assumes that all income
and capital gains dividends paid by the Series have been reinvested at net asset
value on the reinvestment dates during the period. Non-standardized total return
may also be shown as the increased dollar value of the hypothetical investment
over the period.
Quotations of standardized average annual total return and
non-standardized total return are based upon historical earnings and will
fluctuate. Any quotation of performance, therefore, should not be considered a
guarantee of future performance. Factors affecting the performance of a Series
include general market conditions, operating expenses and investment management.
The yield for a Series other than the PPM America/JNL Money Market
Series is computed in accordance with a standardized method prescribed by the
rules of the SEC. The yield is calculated by assuming that the income generated
by the investment during that 30-day period is generated each 30-day period over
a 12-month period and is shown as a percentage of the investment. Under this
method, yield is computed by dividing the net investment income per share earned
during the specified one month or 30-day period by the offering price per share
on the last day of the period, according to the following formula:
a-b 6
YIELD = 2[(---+1) -1]
cd
Where:
a = dividends and interest earned during the period.
b = expenses accrued for the period (net of reimbursements).
c = the average daily number of shares outstanding during the
period that were entitled to receive dividends.
d = the offering price (net asset value) per share on the last day of
the period.
The yield for the 30-day period ended December 31, 1998, for each of
the referenced Series was as follows:
JNL/PIMCO Total Return Bond Series 4.75%
PPM America/JNL Balanced Series 2.43%
PPM America/JNL High-Yield Bond Series 9.27%
Salomon Brothers/JNL Balanced Series 2.07%
Salomon Brothers/JNL Global Bond Series 7.51%
Salomon Brothers/JNL High-Yield Bond Series 8.60%
Salomon Brothers/JNL U.S. Government & Quality Bond Series 5.25%
In computing the foregoing yield, the Series follow certain
standardized accounting practices specified by SEC rules. These practices are
not necessarily consistent with those that the Series use to prepare annual and
interim financial statements in accordance with generally accepted accounting
principles.
The PPM America/JNL Money Market Series' yield is also computed in
accordance with a standardized method prescribed by rules of the SEC. This
Series' yield is a measure of the net dividend and interest income earned over a
specific seven-day period expressed as a percentage of the offering price of the
Series. the yield is an annualized figure, which means that it is assumed that
the Series generates the same level of net income over a 52-week period. Under
this method, the current yield quotation is based on a seven-day period and is
computed as follows. The first calculation is net investment income per share;
which is accrued interest on portfolio securities, plus or minus amortized
discount or premium, less accrued expenses. This number is then divided by the
price per share (expected to remain constant at $1.00) at the beginning of the
period (base period return). The result is then divided by 7 and multiplied by
365 and the resulting yield figure is carried to the nearest one-hundredth of
one percent. Realized capital gains or losses and unrealized appreciation or
depreciation of investments are not included in the calculation. The PPM
America/JNL Money Market Series' yield for the seven-day period ended December
31, 1998, was 4.78%.
The PPM America/JNL Money Market Series' effective yield is determined
by taking the base period return (computed as described above) and calculating
the effect of assumed compounding. The formula for the effective yield is: (base
period return + 1)365/7 - 1. The PPM America/JNL Money Market Series' effective
yield for the seven-day period ended December 31, 1998, was 4.90%.
A Series' performance quotations are based upon historical results and
are not necessarily representative of future performance. The Series' shares are
sold at net asset value. Returns and net asset value will fluctuate, except that
the PPM America/JNL Money Market Series seeks to maintain a $1.00 net asset
value per share. Factors affecting a Series' performance include general market
conditions, operating expenses and investment management. Shares of a Series are
redeemable at the then current net asset value, which may be more or less than
original cost.
The performance of the Series may be compared to the performance of
other mutual funds or mutual fund indices with similar objectives and policies
as reported by Lipper Analytical Services, Inc. (Lipper), CDA Investment
Technologies, Inc. (CDA) or Donoghue's Money Fund Report. Lipper and CDA
performance calculations are based upon changes in net asset value with all
dividends reinvested and do not include the effect of any sales charges. A
Series' performance may also be compared to that of the Consumer Price Index or
various unmanaged stock and bond indices including, but not limited to the
Consumer Price Index, the Standard & Poor's 500 Index, the Standard & Poor's
MidCap 400 Index, the Morgan Stanley Capital International All Country World
Free (ex-U.S.) Index, the Morgan Stanley Capital International World Index, the
Lehman Brothers Aggregate Bond Index, the Lehman Brothers High-Yield Index, the
Merrill Lynch Treasury Bill Index (3 month), the Salomon Smith Barney Broad
Investment Grade Bond Index, the Salomon Smith Barney High Yield Market Index,
the Salomon Brothers Treasury Index, the Russell 2000 Index, the Russell Midcap
Index, the Morgan Stanley Europe and Australasia, Far East Equity Index, the S&P
Micropal Asset Allocation USA Income Funds Sector Index, or the S&P Micropal
Asset Allocation USA Balanced Funds Sector Index,. No adjustments are made for
taxes payable on dividends. Lipper and CDA are widely recognized independent
mutual fund reporting services. Lipper and CDA indices are weighted performance
averages of other mutual funds with similar investment objectives.
From time to time, a Series also may quote information from
publications including, but not limited to, the following: Morningstar, Inc.,
The Wall Street Journal, Money Magazine, Forbes, Barron's, The New York Times,
USA Today, Institutional Investor and Registered Representative. Also, investors
may want to compare the historical returns of various investments, performance
indices of those investments or economic indicators, including but not limited
to stocks, bonds, certificates of deposit and other bank products, money market
funds and U.S. Treasury obligations. Certain of these alternative investments
may offer fixed rates of return and guaranteed principal, and may be insured.
Economic indicators may include, without limitation, indicators of market rate
trends and cost of funds, such as Federal Home Loan Bank Board 11th District
Cost of Funds Index (COFI).
The net asset values and returns of the Series will fluctuate. Shares
of a Series are redeemable by an investor at the then current net asset value,
which may be more or less than original cost.
A Series may periodically advertise tax-deferred compounding charts and
other hypothetical illustrations.
INVESTMENT ADVISER AND OTHER SERVICES
-------------------------------------
JNFS, 5901 Executive Drive, Lansing, Michigan 48911, is the investment
adviser to the Trust. As investment adviser, JNFSLLC provides the Trust with
professional investment supervision and management and permits any of its
officers or employees to serve without compensation as trustees or officers of
the Trust if elected to such positions. JNFS is a wholly owned subsidiary of
Jackson National Life Insurance Company, which is in turn wholly owned by
Prudential Corporation plc, a life insurance company in the United Kingdom.
JNFS acts as investment adviser to the Trust pursuant to an Amended
Investment Advisory and Management Agreement. Prior to July 1, 1998, Jackson
National Financial Services, Inc., an affiliate of JNFS, acted as investment
adviser to the Trust. Jackson National Financial Services, Inc. transferred the
Amended Investment Advisory and Management Agreement, all related investment
management duties and its related professional staff to JNFS on July 1, 1998,
with the approval of the Board of Trustees of the Trust.
The Amended Investment Advisory and Management Agreement continues in
effect for each Series from year to year after its initial two-year term so long
as its continuation is approved at least annually by (i) a majority of the
Trustees who are not parties to such agreement or interested persons of any such
party except in their capacity as Trustees of the Trust, and (ii) the
shareholders of the affected Series or the Board of Trustees. It may be
terminated at any time upon 60 days notice by either party, or by a majority
vote of the outstanding shares of a Series with respect to that Series, and will
terminate automatically upon assignment. Additional Series may be subject to a
different agreement. The Amended Investment Advisory and Management Agreement
provides that JNFS shall not be liable for any error of judgment, or for any
loss suffered by the Series in connection with the matters to which the
agreement relates, except a loss resulting from willful misfeasance, bad faith
or gross negligence on the part of JNFS in the performance of its obligations
and duties, or by reason of its reckless disregard of its obligations and duties
under the agreement. As compensation for its services, the Trust pays JNFS a fee
as described in the Prospectus. The fees paid by the Trust to Jackson National
Financial Services, Inc. pursuant to the Amended Investment Advisory and
Management Agreement from the commencement of operations to March 31, 1996 were
$701,004, from April 1, 1996 to December 31, 1996 were $1,884,328, for the
fiscal year ended December 31, 1997 were $7,264,087, and for the period from
January 1, 1998 to June 30, 1998 were $6,458,387. The fees paid by the Trust to
JNFS pursuant to the Amended Investment Advisory and Management Agreement from
July 1, 1998 to December 31, 1998 were $7,786,576.
In addition to providing the services described above, JNFS selects,
contracts with and compensates sub-advisers to manage the investment and
reinvestment of the assets of the Series of the Trust. JNFS monitors the
compliance of such sub-advisers with the investment objectives and related
policies of each Series and reviews the performance of such sub-advisers and
reports periodically on such performance to the Trustees of the Trust.
Alliance Capital Management L.P. (Alliance), with principal offices at
1345 Avenue of the Americas, New York, New York 10105, serves as sub-adviser to
the JNL/Alliance Growth Series. Alliance's clients are primarily major corporate
employee benefit funds, investment companies, foundations, endowment funds and
public employee retirement systems.
Eagle Asset Management, Inc. (Eagle), 880 Carillon Parkway, St.
Petersburg, Florida 33716, serves as sub-adviser to the JNL/Eagle Core Equity
Series and the JNL/Eagle SmallCap Equity Series. Eagle is a wholly owned
subsidiary of Raymond James Financial, Inc., which, together with its
subsidiaries, provides a wide range of financial services to retail and
institutional clients.
Fred Alger Management, Inc. (Alger Management), which is located at 1
World Trade Center, Suite 9333, New York, New York 10048, serves as sub-adviser
to the JNL/Alger Growth Series. Alger Management is generally engaged in the
business of rendering investment advisory services to institutions and, to a
lesser extent, individuals. Alger Management has been engaged in the business of
rendering investment advisory services since 1964. Alger Management is a wholly
owned subsidiary of Fred Alger & Company, Incorporated which in turn is a wholly
owned subsidiary of Alger Associates, Inc., a financial services holding
company. Fred M. Alger III and his brother, David D. Alger are majority
shareholders of Alger Associates, Inc. and may be deemed to control that company
and its subsidiaries.
Goldman Sachs Asset Management (GSAM), One New York Plaza, New York,
New York 10004, serves as sub-adviser to the Goldman Sachs/JNL Growth & Income
Series. GSAM is a separate operating division of Goldman, Sachs & Co., which
registered as an investment adviser in 1981. GSAM provides a wide range of fully
discretionary investment advisory services including quantitatively driven and
actively managed U.S. and international equity portfolios, U.S. and global fixed
income portfolios, commodity and currency products, and money markets.
J.P. Morgan Investment Management Inc. (J.P. Morgan), with principal
offices at 522 Fifth Avenue, New York, New York 10036, serves as sub-adviser to
the JNL/J.P. Morgan Enhanced S&P 500 Index Series and the JNL/J.P. Morgan
International & Emerging Markets Series. J.P. Morgan is a wholly-owned
subsidiary of J.P. Morgan & Co. Incorporated, a bank holding company that also
owns Morgan Guaranty Trust Company, J.P. Morgan Securities Inc. and J.P. Morgan
Futures Inc. J.P. Morgan and its affiliates offer a wide range of services to
governmental, institutional, corporate and individual customers and act as
investment advisor to individual and institutional customers.
Janus Capital Corporation (Janus Capital), a Colorado corporation with
principal offices at 100 Fillmore Street, Denver, Colorado 80206, serves as
sub-adviser to the JNL/Janus Aggressive Growth Series, the JNL/Janus Capital
Growth Series and the JNL/Janus Global Equities Series. Kansas City Southern
Industries, Inc. (KCSI) owns approximately 83% of the outstanding voting stock
of Janus Capital, most of which it acquired in 1984. KCSI is a publicly-traded
holding company whose primary subsidiaries are engaged in transportation and
financial services. Thomas H. Bailey, President and Chairman of the Board of
Janus Capital, owns approximately 12% of its voting stock and, by agreement with
KCSI, selects a majority of Janus Capital's Board.
Lazard Asset Management (Lazard), 30 Rockefeller Plaza, New York, New
York 10112, serves as sub-adviser to the Lazard/JNL Mid Cap Value Series and the
Lazard/JNL Small Cap Value Series. Lazard is a division of Lazard Freres & Co.
LLC (Lazard Freres), a New York limited liability company, which is registered
as an investment adviser with the SEC and is a member of the New York, American
and Midwest Stock Exchanges. Lazard Freres provides its clients with a wide
variety of investment banking, brokerage and related services. Its clients are
both individuals and institutions.
Pacific Investment Management Company (PIMCO), located at 840 Newport
Center Drive, Suite 300, Newport Beach, California 92660, serves as sub-adviser
to the JNL/PIMCO Total Return Bond Series. PIMCO is an investment counseling
firm founded in 1971. PIMCO is a subsidiary of PIMCO Advisors L.P. (PIMCO
Advisors). The general partners of PIMCO Advisors are PIMCO Partners, G.P. and
PIMCO Advisors Holdings L.P. (PAH). PIMCO Partners, G.P. is a general
partnership between PIMCO Holding LLC, a Delaware limited liability company and
indirect wholly-owned subsidiary of Pacific Life Insurance Company, and PIMCO
Partners LLC, a California limited liability company controlled by the PIMCO
Managing Directors. PIMCO Partners, G.P. is the sole general partner of PAH.
PPM America, Inc. (PPM), which is located at 225 West Wacker Drive,
Suite 1200, Chicago, Illinois 60606, serves as sub-adviser to the PPM
America/JNL Balanced Series, the PPM America/JNL High Yield Bond Series and the
PPM America/JNL Money Market Series. PPM, an affiliate of JNFSLLC, is a wholly
owned subsidiary of Prudential Portfolio Managers Ltd., (PPM Ltd.) an investment
management company engaged in global money management, which is in turn wholly
owned by Prudential Corporation plc.
Putnam Investment Management, Inc. (Putnam), located at One Post Office
Square, Boston, Massachusetts 02109, serves as sub-adviser to the JNL/Putnam
Growth Series and the JNL/Putnam Value Equity Series. Putnam has been managing
mutual funds since 1937. Putnam is a subsidiary of Putnam Investment, Inc.,
which is owned by Marsh & McLennan Companies, Inc., a publicly-owned holding
company whose principal businesses are international insurance and reinsurance
brokerage, employee benefit consulting and investment management.
Salomon Brothers Asset Management Inc (SBAM) serves as sub-adviser to
the Salomon Brothers/JNL Balanced Series, the Salomon Brothers/JNL Global Bond
Series, the Salomon Brothers/JNL High Yield Bond Series and the Salomon
Brothers/JNL U.S. Government & Quality Bond Series. SBAM is an indirect wholly
owned subsidiary of Citigroup Inc. SBAM was incorporated in 1987, and, together
with affiliates in London, Frankfurt, Tokyo and Hong Kong, SBAM provides a broad
range of fixed income and equity investment advisory services to various
individual and institutional clients located throughout the world and serves as
sub-advisor to various investment companies.
In connection with SBAM's service as sub-adviser to the Salomon
Brothers/JNL Global Bond Series, SBAM Limited, whose business address is
Victoria Plaza, 111 Buckingham Palace Road, London SW1W OSB, England, provides
certain sub-advisory services to SBAM relating to currency transactions and
investments in non-dollar denominated debt securities for the benefit of the
Series. SBAM Limited is compensated by SBAM at no additional expense to the
Trust. Like SBAM, SBAM Limited is an indirect, wholly owned subsidiary of
Citigroup Inc. SBAM Limited is a member of the Investment Management Regulatory
Organization Limited in the United Kingdom and is registered as an investment
adviser in the United States pursuant to the Investment Advisers Act of 1940, as
amended.
Standard & Poor's Investment Advisory Services, Inc. (SPIAS), located
at 25 Broadway, New York, New York 10004, serves as sub-adviser to the JNL/S&P
Conservative Growth Series I, JNL/S&P Moderate Growth Series I, JNL/S&P
Aggressive Growth Series I, JNL/S&P Very Aggressive Growth Series I, JNL/S&P
Equity Growth Series I, JNL/S&P Equity Aggressive Growth Series I, JNL/S&P
Conservative Growth Series II, JNL/S&P Moderate Growth Series II, JNL/S&P
Aggressive Growth Series II, JNL/S&P Very Aggressive Growth Series II, JNL/S&P
Equity Growth Series II, JNL/S&P Equity Aggressive Growth Series II, JNL/S&P
Conservative Growth Series, JNL/S&P Moderate Growth Series and JNL/S&P
Aggressive Growth Series. SPIAS was established in 1995 to provide investment
advice to the financial community. SPIAS is a subsidiary of The McGraw-Hill
Companies, Inc. and is affiliated with S&P. SPIAS operates independently of and
has no access to analysis or other information supplied or obtained by S&P in
connection with its ratings business, except to the extent such information is
made available by S&P to the general public.
State Street Global Advisors (SSGA), located at One International
Place, Boston, Massachusetts 02110, serves as sub-adviser to the JNL/SSGA
Enhanced Intermediate Bond Index Series, the JNL/SSGA International Index
Series, the JNL/SSGA Russell 2000 Index Series, the JNL/SSGA S&P 500 Index
Series and the JNL/SSGA S&P MidCap Index Series. Since 1978, SSGA has been
providing comprehensive investment management services across all major asset
classes to both institutional and individual investors. SSGA is the investment
management division of State Street Bank and Trust Company, a Massachusetts bank
founded in 1792.
T. Rowe Price Associates, Inc. (T. Rowe), located at 100 East Pratt
Street, Baltimore, Maryland 21202, serves as sub-adviser to the T. Rowe
Price/JNL Established Growth Series and the T. Rowe Price/JNL Mid-Cap Growth
Series. T. Rowe was founded in 1937 by the late Thomas Rowe Price, Jr.
Rowe Price-Fleming International, Inc. (Price-Fleming), located at 100
East Pratt Street, Baltimore, Maryland 21202, serves as sub-adviser to the T.
Rowe Price/JNL International Equity Investment Series. Price-Fleming was founded
in 1979 as a joint venture between T. Rowe Price Associates, Inc. and Robert
Fleming Holdings Limited. Price-Fleming is one of America's largest
international mutual fund asset managers with offices in Baltimore, London,
Tokyo, Hong Kong and Singapore.
T. Rowe provides certain administrative support to Price-Fleming for a
fee of .15% of the market value of all assets in equity accounts, .15% of the
market value of all assets in active fixed income accounts, and .035% of the
market value of all assets in passive fixed-income accounts under
Price-Fleming's management. Additional investment research and administrative
support for equity investments is provided to Price-Fleming by Fleming
Investment Management Limited (FIM) and Jardine Fleming International Holdings
Limited (JFIH), for which each receives from Price-Fleming a fee of .075% of the
market value of all assets in equity accounts under Price-Fleming's management.
FIM and JFIH also provide research and administration support for fixed income
accounts for which each receive a fee of .075% of the market value of all assets
in active fixed-income accounts and .0175% of such market value in passive
fixed-income accounts under Price-Fleming's management. FIM is a wholly owned
subsidiary of Flemings. JFIH is a wholly owned subsidiary of Jardine Fleming.
As compensation for their services, the sub-advisers receive fees from
JNFS computed separately for each Series. The fee for each Series is stated as
an annual percentage of the net assets of such Series. The fees are calculated
based on the average net assets of each Series. The following is a schedule of
the management fees JNFS currently is obligated to pay the sub-advisers out of
the advisory fee it receives from the Series as described elsewhere in this SAI
and the Prospectus:
<TABLE>
<CAPTION>
SERIES ASSETS FEES
------ ------ ----
<S> <C> <C>
JNL/Alger Growth Series.............................. $0 to $300 million...................... .55%
$300 million to $500 million............ .50%
Over $500 million....................... .45%
JNL/Alliance Growth Series........................... $0 to $250 million...................... .35%
Over $250 million....................... .25%
JNL/Eagle Core Equity Series......................... $0 to $50 million....................... .45%
$50 million to $300 million............. .40%
Over $300 million....................... .30%
JNL/Eagle SmallCap Equity Series..................... $0 to $150 million...................... .50%
$150 million to $500 million............ .45%
Over $500 million....................... .40%
JNL/J.P. Morgan Enhanced S&P 500 Index Series........ $0 to $25 million....................... .35%
Over $25 million........................ .30%
JNL/J.P. Morgan International & Emerging Markets
Series............................................... $0 to $50 million....................... .55%
$50 million to $200 million............. .50%
$200 million to $350 million............ .45%
Over $350 million....................... .40%
JNL/Janus Aggressive Growth Series................... $0 to $100 million...................... .55%
$100 million to $500 million............ .50%
Over $500 million....................... .45%
JNL/Janus Capital Growth Series...................... $0 to $100 million...................... .55%
$100 million to $500 million............ .50%
Over $500 million....................... .45%
JNL/Janus Global Equities Series..................... $0 to $100 million...................... .55%
$100 million to $500 million............ .50%
Over $500 million....................... .45%
JNL/PIMCO Total Return Bond Series................... all assets.............................. .25%
JNL/Putnam Growth Series............................. $0 to $150 million...................... .50%
$150 million to $300 million............ .45%
Over $300 million....................... .35%
JNL/Putnam Value Equity Series....................... $0 to $150 million...................... .50%
$150 million to $300 million............ .45%
Over $300 million....................... .35%
JNL/S&P Conservative Growth Series I................. $0 to $500 million...................... .10%
Over $500 million....................... .075%
JNL/S&P Moderate Growth Series I..................... $0 to $500 million...................... .10%
Over $500 million....................... .075%
JNL/S&P Aggressive Growth Series I................... $0 to $500 million...................... .10%
Over $500 million....................... .075%
JNL/S&P Very Aggressive Growth Series I.............. $0 to $500 million...................... .10%
Over $500 million....................... .075%
JNL/S&P Equity Growth Series I....................... $0 to $500 million...................... .10%
Over $500 million....................... .075%
JNL/S&P Equity Aggressive Growth Series I............ $0 to $500 million...................... .10%
Over $500 million....................... .075%
JNL/S&P Conservative Growth Series II................ $0 to $500 million...................... .10%
Over $500 million....................... .075%
JNL/S&P Moderate Growth Series II.................... $0 to $500 million...................... .10%
Over $500 million....................... .075%
JNL/S&P Aggressive Growth Series II.................. $0 to $500 million...................... .10%
Over $500 million....................... .075%
JNL/S&P Very Aggressive Growth Series II............. $0 to $500 million...................... .10%
Over $500 million....................... .075%
JNL/S&P Equity Growth Series II...................... $0 to $500 million...................... .10%
Over $500 million....................... .075%
JNL/S&P Equity Aggressive Growth Series II........... $0 to $500 million...................... .10%
Over $500 million....................... .075%
JNL/S&P Conservative Growth Index Series............. $0 to $500 million...................... .10%
Over $500 million....................... .075%
JNL/S&P Moderate Growth Index Series................. $0 to $500 million...................... .10%
Over $500 million....................... .075%
JNL/S&P Aggressive Growth Index Series............... $0 to $500 million...................... .10%
Over $500 million....................... .075%
JNL/SSGA Enhanced Intermediate Bond Index Series..... all assets.............................. .20%
JNL/SSGA International Index Series.................. all assets.............................. .15%
JNL/SSGA Russell 2000 Index Series................... all assets.............................. .05%
JNL/SSGA S&P 500 Index Series........................ all assets.............................. .05%
JNL/SSGA S&P MidCap Index Series..................... all assets.............................. .05%
Goldman Sachs/JNL Growth & Income Series............. $0 to $50 million....................... .50%
$50 million to $200 million............. .45%
$200 million to $350 million............ .40%
Over $350 million....................... .35%
Lazard/JNL Mid Cap Value Series...................... $0 to $50 million....................... .55%
$50 million to $150 million............. .525%
$150 million to $300 million............ .475%
Over $300 million....................... .45%
Lazard/JNL Small Cap Value Series.................... $0 to $50 million....................... .625%
$50 million to $150 million............. .575%
$150 million to $300 million............ .525%
Over $300 million....................... .475%
PPM America/JNL Balanced Series...................... $0 to $50 million....................... .25%
$50 million to $150 million............. .20%
$150 million to $300 million............ .175%
$300 million to $500 million............ .15%
Over $500 million....................... .125%
PPM America/JNL High Yield Bond Series............... $0 to $50 million....................... .25%
$50 million to $150 million............. .20%
$150 million to $300 million............ .175%
$300 million to $500 million............ .15%
Over $500 million....................... .125%
PPM America/JNL Money Market Series.................. $0 to $50 million....................... .20%
$50 million to $150 million............. .15%
$150 million to $300 million............ .125%
$300 million to $500 million............ .10%
Over $500 million....................... .075%
Salomon Brothers/JNL Balanced Series................. $0 to $50 million....................... .35%
$50 million to $100 million............. .30%
Over $100 million....................... .25%
Salomon Brothers/JNL Global Bond Series.............. $0 to $50 million....................... .375%
$50 million to $150 million............. .35%
$150 million to $500 million............ .30%
Over $500 million....................... .25%
Salomon Brothers/JNL High Yield Bond Series.......... $0 to $50 million....................... .35%
$50 million to $100 million............. .30%
Over $100 million....................... .25%
Salomon Brothers/JNL U.S. Government & Quality
Bond Series.......................................... $0 to $150 million...................... .225%
$150 million to $300 million............ .175%
$300 million to $500 million............ .15%
Over $500 million....................... .10%
T. Rowe Price/JNL Established Growth Series.......... $0 to $20 million....................... .45%
$20 million to $50 million.............. .40%
Over $50 million........................ .40%*
T. Rowe Price/JNL International Equity Investment
Series............................................... $0 to $20 million....................... .75%
$20 million to $50 million.............. .60%
$50 million to $200 million............. .50%
Over $200 million....................... .50%*
T. Rowe Price/JNL Mid-Cap Growth Series.............. $0 to $20 million....................... .60%
$20 million to $50 million.............. .50%
Over $50 million........................ .50%*
</TABLE>
* When average net assets exceed this amount, the sub-advisory fee asterisked is
applicable to all amounts in this Series.
The sub-advisory fees payable by JNFS to a sub-adviser may be reduced
as agreed to by the parties from time to time. With respect to the Salomon
Brothers/JNL Global Bond Series and in connection with the advisory consulting
agreement between Salomon Brothers and SBAM Limited, Salomon Brothers will pay
SBAM Limited, as full compensation for all services provided under the advisory
consulting agreement, a portion of its investment management fee. The amount
payable to SBAM Limited will be equal to the fee payable under Salomon Brothers'
sub-advisory agreement multiplied by the portion of the assets of the Series
that SBAM Limited has been delegated to manage divided by the current value of
the net assets of the Series.
Subject to the supervision of JNFS and the Trustees pursuant to
investment sub-advisory agreements entered into between JNFS and each of the
sub-advisers, respectively, the sub-advisers invest and reinvest the Series'
assets consistent with the Series' respective investment objectives and
policies. The investment sub-advisory agreement continues in effect for each
Series from year to year after its initial two-year term so long as its
continuation is approved at least annually by a majority of the Trustees who are
not parties to such agreement or interested persons of any such party except in
their capacity as Trustees of the Series and by the shareholders of the affected
Series or the Board of Trustees. It may be terminated at any time upon 60 days
notice by either party, or by a majority vote of the outstanding shares of a
Series with respect to that Series, and will terminate automatically upon
assignment or upon the termination of the investment management agreement
between JNFS and the Series. Additional Series may be subject to a different
agreement. The sub-advisers are responsible for compliance with or have agreed
to use their best efforts to manage the Series to comply with the provisions of
Section 817(h) of the Code, applicable to each Series (relating to the
diversification requirements applicable to investments in underlying variable
annuity contracts).
The JNL/J.P. Morgan Enhanced S&P 500 Index Series, JNL/SSGA S&P 500
Index Series, and JNL/SSGA S&P MidCap Index Series are not sponsored, endorsed,
sold or promoted by Standard & Poor's, a division of The McGraw-Hill Companies,
Inc. (S&P). S&P makes no representation or warranty, express or implied, to the
owners of the Series or any member of public regarding the advisability of
investing in securities generally or in the Series particularly or the ability
of the S&P 500 Index or the S&P MidCap 400 Index to track general stock market
performance. S&P's only relationship to the Licensee is the licensing of certain
trademarks and trade names of S&P and of the S&P 500 Index and the S&P MidCap
400 Index which are determined, composed and calculated by S&P without regard to
the Licensee or the Series. S&P has no obligation to take the needs of the
Licensee or the owners of the Series into consideration in determining,
composing or calculating the S&P 500 Index or the S&P MidCap 400 Index. S&P is
not responsible for and has not participated in the determination of the prices
and amount of the Series or the timing of the issuance or sale of the Series or
in the determination or calculation of the equation by which the Series is to be
converted into cash. S&P has no obligation or liability in connection with the
administration, marketing or trading of the Series.
S&P DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE S&P
500 INDEX OR THE S&P MIDCAP 400 INDEX OR ANY DATA INCLUDED THEREIN AND S&P SHALL
HAVE NO LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. S&P MAKES
NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY LICENSEE,
OWNERS OF THE SERIES, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE S&P 500
INDEX OR THE S&P MIDCAP 400 INDEX OR ANY DATA INCLUDED THEREIN. S&P MAKES NO
EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE
S&P 500 INDEX OR THE S&P MIDCAP 400 INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT
LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL S&P HAVE ANY LIABILITY FOR ANY
SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS),
EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.
Administrative Fee. Effective January 1, 1999, each Series, except the JNL/SSGA
International Index Series and each of the JNL/S&P Series, pays to JNFS an
Administrative Fee of .10% of the average daily net assets of the Series. The
JNL/SSGA International Index Series pays an Administrative Fee of .20%. The
JNL/S&P Series do not pay an Administrative Fee. In return for the fee, JNFS
provides or procures all necessary administrative functions and services for the
operation of the Series. In addition, JNFSLLC, at its own expense, arranges for
legal, audit, fund accounting, custody, printing and mailing, and all other
services necessary for the operation of each Series. Prior to January 1, 1999,
each Series paid all of its own operating expenses. Each Series is responsible
for trading expenses including brokerage commissions, interest and taxes, and
other non-operating expenses.
Custodian and Transfer Agent. The custodian has custody of all securities and
cash of the Trust maintained in the United States and attends to the collection
of principal and income and payment for and collection of proceeds of securities
bought and sold by the Trust.
State Street Bank and Trust Company (State Street), 105 Rosemont Road,
Westwood, Massachusetts 02090, acts as custodian for the JNL/Alger Growth
Series, JNL/Alliance Growth Series, JNL/Eagle Core Equity Series, JNL/Eagle
SmallCap Equity Series, JNL/J.P. Morgan Enhanced S&P 500 Index Series, JNL/J.P.
Morgan International & Emerging Markets Series, JNL/Janus Aggressive Growth
Series, JNL/Janus Capital Growth Series, JNL/Janus Global Equities Series,
JNL/PIMCO Total Return Bond Series, JNL/Putnam Growth Series, JNL/Putnam Value
Equity Series, JNL/SSGA Enhanced Intermediate Bond Index Series, JNL/SSGA
International Index Series, JNL/SSGA Russell 2000 Index Series, JNL/SSGA S&P 500
Index Series, JNL/SSGA S&P MidCap Index Series, Goldman Sachs/JNL Growth &
Income Series, Lazard/JNL Small Cap Value Series, Lazard/JNL Mid Cap Value
Series, PPM America/JNL Balanced Series, PPM America/JNL High Yield Bond Series,
PPM America/JNL Money Market Series, Salomon Brothers/JNL Balanced Series,
Salomon Brothers/JNL Global Bond Series, Salomon Brothers/JNL High Yield Bond
Series, Salomon Brothers/JNL U.S. Government & Quality Bond Series, T. Rowe
Price/JNL Established Growth Series, T. Rowe Price/JNL International Equity
Investment Series, and T. Rowe Price/JNL Mid-Cap Growth Series. Boston Safe
Deposit and Trust Company, One Boston Place, Boston, Massachusetts 02108, acts
as custodian for the JNL/J.P. Morgan Enhanced S&P 500 Index Series, JNL/SSGA
Enhanced Intermediate Bond Index Series, JNL/SSGA International Index Series,
JNL/SSGA Russell 2000 Index Series, JNL/SSGA S&P 500 Index Series, and JNL/SSGA
S&P MidCap Index Series. The Trust acts as custodian for the JNL/S&P
Conservative Growth Series I, JNL/S&P Moderate Growth Series I, JNL/S&P
Aggressive Growth Series I, JNL/S&P Very Aggressive Growth Series I, JNL/S&P
Equity Growth Series I, JNL/S&P Equity Aggressive Growth Series I, JNL/S&P
Conservative Growth Series II, JNL/S&P Moderate Growth Series II, JNL/S&P
Aggressive Growth Series II, JNL/S&P Very Aggressive Growth Series II, JNL/S&P
Equity Growth Series II, JNL/S&P Equity Aggressive Growth Series II, JNL/S&P
Conservative Growth Series, JNL/S&P Moderate Growth Series, and JNL/S&P
Aggressive Growth Series.
JNFS is the transfer agent and dividend-paying agent for each Series of
the Trust.
Independent Accountants. The Series' independent accountants,
PricewaterhouseCoopers LLP, 203 North La Salle Street, Chicago, Illinois 60601,
audit and report on the Series' annual financial statements, and perform other
professional accounting, auditing and advisory services when engaged to do so by
the Series.
Series Transactions and Brokerage. Purchases and sales of newly issued portfolio
securities are usually principal transactions without brokerage commissions
effected directly with the issuer or with an underwriter acting as principal.
Other purchases and sales may be effected on a securities exchange or
over-the-counter, depending on where it appears that the best price or execution
will be obtained. The purchase price paid by a Series to underwriters of newly
issued securities usually includes a concession paid by the issuer to the
underwriter, and purchases of securities from dealers, acting as either
principals or agents in the after market, are normally executed at a price
between the bid and asked price, which includes a dealer's mark-up or mark-down.
Transactions on U.S. stock exchanges and some foreign stock exchanges involve
the payment of negotiated brokerage commissions. On exchanges on which
commissions are negotiated, the cost of transactions may vary among different
brokers. On most foreign exchanges, commissions are generally fixed. There is
generally no stated commission in the case of securities traded in domestic or
foreign over-the-counter markets, but the price of securities traded in
over-the-counter markets includes an undisclosed commission or mark-up. U.S.
Government Securities are generally purchased from underwriters or dealers,
although certain newly issued U.S. Government Securities may be purchased
directly from the U.S. Treasury or from the issuing agency or instrumentality.
No brokerage commissions are typically paid on purchases and sales of U.S.
Government Securities.
Transactions for a Series may be effected on foreign securities exchanges. In
transactions for securities not actively traded on a foreign securities
exchange, a Series will deal directly with the dealers who make a market in the
securities involved, except in those circumstances where better prices and
execution are available elsewhere. Such dealers usually are acting as principal
for their own account. On occasion, securities may be purchased directly from
the issuer. Such portfolio securities are generally traded on a net basis and do
not normally involve brokerage commissions. Securities firms may receive
brokerage commissions on certain portfolio transactions, including options,
futures and options on futures transactions and the purchase and sale of
underlying securities upon exercise of options.
Each Series may participate, if and when practicable, in bidding for the
purchase of securities for the Series' portfolio directly from an issuer in
order to take advantage of the lower purchase price available to members of such
a group. A Series will engage in this practice, however, only when the
sub-adviser, in its sole discretion, believes such practice to be otherwise in
the Series' interest.
The primary consideration in portfolio security transactions is "best
execution," i.e., execution at the most favorable prices and in the most
effective manner possible. JNFS and the sub-advisers always attempt to achieve
best execution and have complete freedom as to the markets in and the
broker/dealers through which they seek this result. Subject to the requirement
of seeking best execution, securities may be bought from or sold to
broker/dealers who have furnished statistical, research, and other information
or services to JNFS or the sub-advisers. In placing orders with such
broker/dealers, JNFS and the sub-advisers will, where possible, take into
account the comparative usefulness of such information. Such information is
useful to JNFS and the sub-advisers even though its dollar value may be
indeterminable and its receipt or availability generally does not reduce JNFS'
or the sub-advisers' normal research activities or expenses.
JNFS and the sub-advisers are authorized, consistent with Section 28(e)
of the Securities Exchange Act of 1934, as amended, when placing portfolio
transactions for a Series with a broker to pay a brokerage commission (to the
extent applicable) in excess of that which another broker might have charged for
effecting the same transaction on account of the receipt of research, market or
statistical information. The term "research, market or statistical information"
includes (a) advice as to (i) the value of securities, (ii) the advisability of
investing in, purchasing or selling securities, and (iii) the availability of
securities or purchasers or sellers of securities and (b) furnishing analysis
and reports concerning issuers, industries, securities, economic factors and
trends, portfolio strategy and the performance of accounts. Higher commissions
may be paid to firms that provide research services to the extent permitted by
law. JNFS and the sub-advisers may use this research information in managing the
Trust's assets, as well as the assets of other clients.
Any portfolio transaction for a Series may be executed through brokers
that are affiliated with the Trust, JNFS and/or sub-adviser, if, in the
sub-adviser's judgment, the use of such affiliated brokers is likely to result
in price and execution at least as favorable as those of other qualified
brokers, and if, in the transaction, the affiliated broker charges the Series a
commission rate consistent with those charged by the affiliated broker to
comparable unaffiliated customers in similar transactions.
All transactions with affiliated brokers will comply with Rule 17e-1 under the
1940 Act.
Trust portfolio transactions may be effected with broker/dealers who
have assisted investors in the purchase of Contracts. However, neither such
assistance nor sale of other investment company shares is a qualifying or
disqualifying factor in a broker/dealer's selection, nor is the selection of any
broker/dealer based on the volume of shares sold.
There may be occasions when portfolio transactions for the Trust are
executed as part of concurrent authorizations to purchase or sell the same
security for trusts or other accounts served by affiliated companies of JNFS or
the sub-advisers. Although such concurrent authorizations potentially could be
either advantageous or disadvantageous to the Trust, they are effected only when
JNFS and the sub-advisers believe that to do so is in the interest of the Trust.
When such concurrent authorizations occur the executions will be allocated in an
equitable manner.
During the periods indicated, the Series paid the following
amounts in brokerage commissions:
<TABLE>
<CAPTION>
April 1, 1996
Fiscal year Fiscal year to Commencement of
ended December ended December December 31, Operations to
31 ,1998 31, 1997 1996* March 31, 1996
-------- -------- ----- --------------
<S> <C> <C> <C> <C>
JNL/Alger Growth Series*** ................................. $300,075 $183,075 $ 22,155 $ 9,414
JNL/Alliance Growth Series***** ............................ 7,467 0 0 0
JNL/Eagle Core Equity Series**** ........................... 70,878 17,298 1,785 N/A
JNL/Eagle SmallCap Equity Series**** ....................... 59,117 33,313 4,389 N/A
JNL/J.P. Morgan International Emerging
Markets Series***** ..................................... 34,462 0 0 0
JNL/Janus Aggressive Growth Series** ....................... 194,347 162,153 16,981 19,654
JNL/Janus Capital Growth Series** .......................... 209,026 147,014 34,515 16,905
JNL/Janus Global Equities Series** ......................... 487,399 453,347 47,800 72,359
JNL/PIMCO Total Return Bond Series***** .................... 275 0 0 0
JNL/Putnam Growth Series** ................................. 169,997 181,765 33,185 8,008
JNL/Putnam Value Equity Series** ........................... 249,514 139,522 3,587 2,888
Goldman Sachs/JNL Growth & Income
Series***** ............................................. 12,650 0 0 0
Lazard/JNL Mid Cap Value Series***** ....................... 11,510 0 0 0
Lazard/JNL Small Cap Value Series***** ..................... 8,479 0 0 0
PPM America/JNL Balanced Series** .......................... 27,513 43,630 17,054 5,077
PPM America/JNL High Yield Bond Series** ................... 4,823 0 500 0
PPM America/JNL Money Market Series** ...................... 0 0 0 0
Salomon Brothers/JNL Balanced Series***** .................. 2,066 0 0 0
Salomon Brothers/JNL Global Bond Series** .................. 32 0 0 1,399
Salomon Brothers/JNL High-Yield Bond
Series***** ............................................. 0 0 0 0
Salomon Brothers/JNL U.S. Government and
Quality Bond Series** ................................... 0 0 0 0
T. Rowe Price/JNL Established Growth
Series** ................................................ 239,877 114,988 5,706 20,293
T. Rowe Price/JNL International Equity
Investment Series** ..................................... 87,777 142,628 17,105 63,341
T. Rowe Price/JNL Mid-Cap Growth Series** .................. 195,160 164,887 19,868 25,663
</TABLE>
*The JNL Series Trust changed its fiscal year end from March 31 to December 31.
**Commenced operations on May 15, 1995.
***Commenced operations on October 16, 1995.
****Commenced operations on September 16, 1996.
*****Commenced operations on March 2, 1998.
During the periods indicated, the Trust paid the following amounts in
brokerage commissions to affiliated broker/dealers:
<TABLE>
<CAPTION>
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Name of Broker/Dealer Period Ended December 31, Period Ended December 31, Period Ended December 31,
1998 1997 1996
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
<S> <C> <C> <C>
Fred Alger & Co., Inc. $ 297,614.70 $ 181,990.33 $ 22,028.26
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Goldman Sachs 821.76 0.00 0.00
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Phoenix Investments 0.00 0.00 1,225.00
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Raymond James & Associates, 4,700.00 4,306.92 90.00
Inc.
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Robert Fleming 9,558.28 34,696.52 5,844.00
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
Salomon Brothers Inc. 178.00 0.00 0.00
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
</TABLE>
Each of the broker/dealers listed above is affiliated with the Trust
through a sub-adviser.
The percentage of the Trust's aggregate brokerage commissions paid to
affiliated broker/dealers during the period ended December 31, 1998 is as
follows:
<TABLE>
<CAPTION>
- ------------------------------------------------------------ ---------------------------------------------------------
Broker/Dealer Percentage of Aggregate Commissions
- ------------------------------------------------------------ ---------------------------------------------------------
<S> <C>
Fred Alger & Co., Inc. 12.54%
- ------------------------------------------------------------ ---------------------------------------------------------
Goldman Sachs 0.03%
- ------------------------------------------------------------ ---------------------------------------------------------
Raymond James & Associates, Inc. 0.20%
- ------------------------------------------------------------ ---------------------------------------------------------
Robert Fleming 0.40%
- ------------------------------------------------------------ ---------------------------------------------------------
Salomon Brothers Inc. 0.00%
- ------------------------------------------------------------ ---------------------------------------------------------
</TABLE>
As of December 31, 1998, the following Series owned securities of one
of the Trust's regular broker/dealers:
<TABLE>
<CAPTION>
Amount of
Securities
Series Broker/Dealer Owned
------ ------------- -----
<S> <C> <C>
JNL/Alger Growth Series Household International Inc. $3,269,062
JNL/Alger Growth Series Morgan Stanley Dean Witter & Co. 3,301,500
JNL/Alger Growth Series State Street Corp. 744,319
JNL/Alliance Growth Series Morgan Stanley Dean Witter & Co. 49,700
JNL/Eagle Core Equity Series Chase Manhattan Corp. 408,375
JNL/Janus Aggressive Growth Series Household International Inc. 486,991
JNL/Janus Capital Growth Series Charles Schwab & Co. Inc. 2,044,382
JNL/Putnam Growth Series Merrill Lunch & Co. Inc. 794,325
JNL/Putnam Value Equity Series Chase Manhattan Corp. 2,167,110
JNL/Putnam Value Equity Series J.P. Morgan & Co. Inc. 2,227,850
JNL/Putnam Value Equity Series Lehman Brothers 1,964,306
JNL/Putnam Value Equity Series Merrill Lynch & Co. Inc. 1,609,009
JNL/PIMCO Total Return Bond Series Goldman Sachs & Co. 122,828
Goldman Sachs/JNL Growth & Income Series Chase Manhattan Corp. 61,256
Goldman Sachs/JNL Growth & Income Series CIT Group Inc. 47,719
Lazard/JNL Mid Cap Value Series CIT Group Inc. 69,987
PPM America/JNL Balanced Series Chase Manhattan Corp. 1,089,000
Salomon Brothers/JNL Global Bond Series Merrill Lynch & Co. Inc. 80,282
T. Rowe Price/JNL Established Growth Series HSBC Holdings Plc 529,906
T. Rowe Price/JNL International Equity Investment Series HSBC Holdings Plc 99,644
T. Rowe Price/JNL Mid-Cap Growth Series CIT Group Inc. 2,354,125
</TABLE>
Code of Ethics. To mitigate the possibility that a Series will be adversely
affected by personal trading of employees, the Trust, JNFS and the sub-advisers
have adopted Codes of Ethics under Rule 17j-1 of the 1940 Act. These Codes
contain policies restricting securities trading in personal accounts of the
portfolio managers and others who normally come into possession of information
on portfolio transactions. These Codes comply, in all material respects, with
the recommendations of the Investment Company Institute.
PURCHASES, REDEMPTIONS AND PRICING OF SHARES
--------------------------------------------
An insurance company may purchase shares of the Series at their
respective net asset values, using premiums received with respect to Contracts
issued by the company's separate accounts. These separate accounts are funded by
shares of the Trust.
All investments in the Trust are credited to the shareholder's account
in the form of full and fractional shares of the designated Series (rounded to
the nearest 1/1000 of a share). The Trust does not issue share certificates.
As stated in the Prospectus, the net asset value (NAV) of a Series'
shares is determined once each day on which the New York Stock Exchange (NYSE)
is open (Business Day) at the close of the regular trading session of the
Exchange (normally 4:00 p.m., Eastern Time, Monday through Friday). The NAV of a
Series' shares is not determined on the days the NYSE is closed, which days
generally are New Year's Day, Martin Luther King Jr. holiday, President's Day,
Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and
Christmas.
The per share NAV of a Series is determined by dividing the total value
of the securities and other assets, less liabilities, by the total number of
shares outstanding. In determining NAV, securities listed on the national
securities exchanges, the Nasdaq National Market and foreign markets are valued
at the closing prices on such markets, or if such price is lacking for the
trading period immediately preceding the time of determination, such securities
are valued at their current bid price. Securities that are traded on the
over-the-counter market are valued at their closing bid prices. Foreign
securities and currencies are converted to U.S. dollars using exchange rates in
effect at the time of valuation. A Series may determine the market value of
individual securities held by it, by using prices provided by one or more
professional pricing services which may provide market prices to other funds,
or, as needed, by obtaining market quotations from independent broker-dealers.
Short-term securities maturing within 60 days are valued on the amortized cost
basis.
Trading in securities on European and Far Eastern securities exchanges
and over-the-counter markets is normally completed well before the close of
business on each Business Day. In addition, European and Far Eastern securities
trading generally or in a particular country or countries may not take place on
all Business Days. Furthermore, trading takes place in Japanese markets on
certain Saturdays and in various foreign markets on days which are not Business
Days and on which a Series' NAV is not calculated. A Series calculates NAV per
share, and therefore effects sales, redemptions and repurchases of its shares,
as of the close of the NYSE once on each day on which the NYSE is open. Such
calculation does not take place contemporaneously with the determination of the
prices of the majority of the foreign portfolio securities used in such
calculation.
For the PPM America/JNL Money Market Series, securities are valued at
amortized cost, which approximates market value, in accordance with Rule 2a-7
under the 1940 Act. The net income of the PPM America/JNL Money Market Series is
determined once each day, on which the NYSE is open, at the close of the regular
trading session of the NYSE (normally 4:00 p.m., Eastern time, Monday through
Friday). All the net income of the Series, so determined, is declared as a
dividend to shareholders of record at the time of such determination. Shares
purchased become entitled to dividends declared as of the first day following
the date of investment. Dividends are distributed in the form of additional
shares of the Series on the last business day of each month at the rate of one
share (and fraction thereof) of the Series for each one dollar (and fraction
thereof) of dividend income.
For this purpose, the net income of the PPM America/JNL Money Market
Series (from the time of the immediately preceding determination thereof) shall
consist of: (a) all interest income accrued on the portfolio assets of the
Series, (b) less all actual and accrued expenses, and (c) plus or minus net
realized gains and losses on the assets of the Series determined in accordance
with generally accepted accounting principles. Interest income includes discount
earned (including both original issue and market discount) on discount paper
accrued ratably to the date of maturity. Securities are valued at amortized cost
which approximates market, which the Trustees have determined in good faith
constitutes fair value for the purposes of complying with the 1940 Act.
Because the net income of the PPM America/JNL Money Market Series is
declared as a dividend each time the net income is determined, the net asset
value per share (i.e., the value of the net assets of the Series divided by the
number of shares outstanding) remains at one dollar per share immediately after
each such determination and dividend declaration. Any increase in the value of a
shareholder's investment in the Series, representing the reinvestment of
dividend income, is reflected by an increase in the number of shares of the
Series in its account. Pursuant to its objective of maintaining a fixed one
dollar share price, the Series will not purchase securities with a remaining
maturity of more than 397 days and will maintain a dollar-weighted average
portfolio maturity of 90 days or less.
The Trust may suspend the right of redemption for any Series only under
the following unusual circumstances: (a) when the NYSE is closed (other than
weekends and holidays) or trading is restricted; (b) when an emergency exists,
making disposal of portfolio securities or the valuation of net assets not
reasonably practicable; or (c) during any period when the Securities and
Exchange Commission has by order permitted a suspension of redemption for the
protection of shareholders.
ADDITIONAL INFORMATION
----------------------
Description of Shares. The Declaration of Trust permits the Trustees to issue an
unlimited number of full and fractional shares of beneficial interest of each
Series and to divide or combine such shares into a greater or lesser number of
shares without thereby changing the proportionate beneficial interests in the
Trust. Each share of a Series represents an equal proportionate interest in that
Series with each other share. The Trust reserves the right to create and issue
any number of Series of shares. In that case, the shares of each Series would
participate equally in the earnings, dividends, and assets of the particular
Series. Upon liquidation of a Series, shareholders are entitled to share pro
rata in the net assets of such Series available for distribution to
shareholders.
Voting Rights. Shareholders are entitled to one vote for each share held. Except
for matters affecting a particular Series, as described below, all shares of the
Trust have equal voting rights and may be voted in the election of Trustees and
on other matters submitted to the vote of the shareholders. Shareholders'
meetings ordinarily will not be held unless required by the 1940 Act. As
permitted by Massachusetts law, there normally will be no shareholders' meetings
for the purpose of electing Trustees unless and until such time as fewer than a
majority of the Trustees holding office have been elected by shareholders. At
that time, the Trustees then in office will call a shareholders' meeting for the
election of Trustees. The Trustees must call a meeting of shareholders for the
purpose of voting upon the removal of any Trustee when requested to do so by the
record holders of 10% of the outstanding shares of the Trust. A Trustee may be
removed after the holders of record of not less than two-thirds of the
outstanding shares have declared that the Trustee be removed either by
declaration in writing or by votes cast in person or by proxy. Except as set
forth above, the Trustees shall continue to hold office and may appoint
successor Trustees, provided that immediately after the appointment of any
successor Trustee, at least two-thirds of the Trustees have been elected by the
shareholders. Shares do not have cumulative voting rights. Thus, holders of a
majority of the shares voting for the election of Trustees can elect all the
Trustees.
In matters affecting only a particular Series, the matter shall have
been effectively acted upon by a majority vote of that Series even though: (1)
the matter has not been approved by a majority vote of any other Series; or (2)
the matter has not been approved by a majority vote of the Trust.
Shareholders of a Massachusetts business trust may, under certain
circumstances, be held personally liable as partners for the obligations of the
Trust. The risk of a shareholder incurring any financial loss on account of
shareholder liability is limited to circumstances in which the Trust itself
would be unable to meet its obligations. The Declaration of Trust contains an
express disclaimer of shareholder liability for acts or obligations of the Trust
and provides that notice of the disclaimer must be given in each agreement,
obligation or instrument entered into or executed by the Trust or Trustees. The
Declaration of Trust provides for indemnification of any shareholder held
personally liable for the obligations of the Trust and also provides for the
Trust to reimburse the shareholder for all legal and other expenses reasonably
incurred in connection with any such claim or liability.
No amendment may be made to the Declaration of Trust without the
affirmative vote of a majority of the outstanding shares of the Trust. The
Trustees may, however, amend the Declaration of Trust without the vote or
consent of shareholders to:
o designate Series of the Trust; or
o change the name of the Trust; or
o supply any omission, cure, correct, or supplement any
ambiguous, defective, or inconsistent provision to conform the
Declaration of Trust to the requirements of applicable federal
or state regulations if they deem it necessary.
If not terminated by the vote or written consent of a majority of its
outstanding shares, the Trust will continue indefinitely. Shares have no
pre-emptive or conversion rights. Shares are fully paid and non-assessable.
Shareholder Inquiries. All inquiries regarding the Trust should be directed to
the Trust at the telephone number or address shown on the back cover page of the
Prospectus.
TAX STATUS
----------
The Trust's policy is to meet the requirements of Subchapter M of the
Internal Revenue Code. Each Series intends to distribute taxable net investment
income and capital gains to shareholders in amounts that will avoid federal
income or excise tax. In addition, each Series intends to comply with the
diversification requirements of Code Section 817(h) related to the tax-deferred
status of annuity and life insurance contracts issued by insurance company
separate accounts. If any Series failed to qualify for treatment as a regulated
investment company for any taxable year, (1) it would be taxed at corporate
rates on the full amount of its taxable income for that year without being able
to deduct the distributions it makes to its shareholders, (2) the shareholders
would treat all those distributions, including distributions of net capital gain
(the excess of net long-term capital gain over net short-term capital loss), as
dividends (that is, ordinary income) to the extent of the Series' earnings and
profits, and (3) most importantly, each insurance company separate account
invested therein would fail to satisfy the diversification requirements of
Section 817(h), with the result that the variable annuity contracts supported by
that account would no longer be eligible for tax deferral. In addition, the
Series could be required to recognize unrealized gains, pay substantial taxes
and interest and make substantial distributions before requalifying for
regulated investment company treatment.
All income dividends and capital gain distributions, if any, on Series
shares are reinvested automatically in additional shares of the Series at the
NAV determined on the first Business Day following the record date, unless
otherwise requested by a shareholder.
Each Series is treated as a separate corporation for purpose of the
Code and, therefore, the assets, income, and distributions of each Series are
considered separately for purposes of determining whether or not the Series
qualifies as a regulated investment company.
<PAGE>
JNL SERIES TRUST
Financial Statements
<PAGE>
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) ............. $160,460,520
=============
- --------------------------------------------------------------------------------
(a) Non-income producing security.
(b) Dividend yields change daily to reflect current market conditions. Rate is
the quoted yield as of December 31, 1998.
(c) All or a portion of this security has been loaned.
See notes to the financial statements.
<PAGE>
JNL Series Trust
JNL Capital Growth Series
Statement of Assets and Liabilities
December 31, 1998
Assets
Investments in securities, at cost .......$ 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) .............. $109,365,603
============
- --------------------------------------------------------------------------------
(a) Non-income producing security.
(b) Dividend yields change daily to reflect current market conditions. Rate is
the quoted yield as of December 31, 1998.
(c) All or a portion of this security has been loaned.
See notes to the financial statements.
<PAGE>
JNL Series Trust
JNL Global Equities Series
Statement of Assets and Liabilities
December 31, 1998
Assets
Investments in securities, at cost .......$ 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) ............ $239,302,664
==============
- --------------------------------------------------------------------------------
(a) Non-income producing security.
(b) Dividend yield change daily to reflect current market conditions. Rate is
the quoted yield as December 31, 1998.
(c) All or a portion of this security has been loaned.
See notes to the financial statements.
<PAGE>
JNL Series Trust
JNL/Alliance Growth Series
<PAGE>
Statement of Assets and Liabilities
December 31, 1998
Assets
Investments in securities, at cost .......$ 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) ............... $4,643,035
==========
- --------------------------------------------------------------------------------
(a) Non-income producing security.
(b) Dividend yields change daily to reflect current market conditions. Rate is
the quoted yield as of December 31, 1998.
See notes to the financial statements.
<PAGE>
JNL Series Trust
JNL/Alger Growth Series
Statement of Assets and Liabilities
December 31, 1998
Assets
Investments in securities, at cost .......$ 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) ............. $163,350,327
============
<PAGE>
- --------------------------------------------------------------------------------
(a) Non-income producing security.
(b) Dividend yields change daily to reflect current market conditions. Rate is
the quoted yield as of December 31, 1998.
(c) All or a portion of this security has been loaned.
See notes to the financial statements.
<PAGE>
JNL Series Trust
JNL/Eagle Core Equity Series
Statement of Assets and Liabilities
December 31, 1998
Assets
Investments in securities, at cost .......$ 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 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 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 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 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) ............. $181,785,947
============
- --------------------------------------------------------------------------------
(a) Non-income producing security.
(b) Dividend yields change daily to reflect current market conditions. Rate is
the quoted yield as of December 31, 1998.
(c) All or a portion of this security has been loaned.
See notes to the financial statements.
<PAGE>
JNL Series Trust
JNL/Putnam Value Equity Series
Statement of Assets and Liabilities
December 31, 1998
Assets
Investments in securities, at cost .......$ 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 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 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 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 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 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 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 Series Trust
JNL/S&P Conservative Growth Series II
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 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 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 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 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 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>
JNL Series Trust
Goldman Sachs/JNL Growth & Income Series
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>
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>
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>
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>
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>
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>
JNL Series Trust
Salomon Brothers/JNL Global Bond Series
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>
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>
JNL Series Trust
Salomon Brothers/JNL U.S. Government & Quality Bond Series
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>
JNL Series Trust
T. Rowe Price/JNL Established Growth Series
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>
JNL Series Trust
T. Rowe Price/JNL International Equity Investment Series
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>
JNL Series Trust
T. Rowe Price/JNL Mid-Cap Growth Series
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.
<PAGE>
APPENDIX A -- RATINGS OF INVESTMENTS
Moody's Investors Service, Inc.
Commercial Paper Ratings. The ratings Prime-1 and Prime-2 are the two highest
commercial paper ratings assigned by Moody's Investors Service, Inc. (Moody's).
Among the factors considered by it in assigning ratings are the following: (1)
evaluation of the management of the issuer; (2) economic evaluation of the
issuer's industry or industries and an appraisal of speculative-type risks which
may be inherent in certain areas; (3) evaluation of the issuer's products in
relation to competition and customer-acceptance; (4) liquidity; (5) amount and
quality of long-term debt; (6) trend of earnings over a period of ten years; (7)
financial strength of a parent company and the relationships which exist with
the issuer; and (8) recognition by the management of obligations which may be
present or may arise as a result of public interest questions and preparations
to meet such obligations. Relative strength or weakness of the above factors
determines whether the issuer's commercial paper is rated Prime-1 or 2.
Bond Ratings.
AAA. Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt-edge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
AA. Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group, they comprise what are generally known
as high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat larger than in Aaa securities.
A. Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper medium grade obligations. Factors giving security
to principal and interest are considered adequate but elements may be present
which suggest a susceptibility to impairment sometime in the future.
BAA. Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and, in
fact, have speculative characteristics as well.
BA. Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B. Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
CAA. Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal and
interest.
CA. Bonds which are rated Ca represent obligations which are speculative in
a high degree. Such issues are often in default or have other marked
shortcomings.
C. Bonds which are rated C are the lowest rated class of bonds and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.
Standard & Poor's Ratings Services
Issue Credit Ratings Definitions. A Standard & Poor's issue credit rating is a
current opinion of the creditworthiness of an obligor with respect to a specific
financial obligation, a specific class of financial obligations, or a specific
financial program (including ratings on medium-term note programs and commercial
paper programs). It takes into consideration the creditworthiness of guarantors,
insurers, or other forms of credit enhancement on the obligation and takes into
account the currency in which the obligation is denominated. The issue credit
rating is not a recommendation to purchase, sell, or hold a financial
obligation, inasmuch as it does not comment as to market price or suitability
for a particular investor.
Issue credit ratings are base on current information furnished by the obligors
or obtained by Standard & Poor's from other sources it considers reliable.
Standard & Poor's does not perform an audit in connection with any credit rating
and may, on occasion, rely on unaudited financial information. Credit ratings
may be changed, suspended, or withdrawn as a result of changes in, or
unavailability of, such information, or based on other circumstances.
Issue credit ratings can be either long-term or short-term. Short-term ratings
are generally assigned to those obligations considered short-term in the
relevant market. In the U.S., for example, that means obligations with an
original maturity of no more than 365 days - including commercial paper.
Short-term ratings are also used to indicate the creditworthiness of an obligor
with respect to put features on long-term obligations. The result is a dual
rating, in which the short-term rating addresses the put feature, in addition to
the usual long-term rating. Medium-term notes are assigned long-term ratings.
Long-Term Issue Credit Ratings. Issue credit ratings are based, in varying
degrees, on the following considerations:
1. Likelihood of payment-capacity and willingness of the obligor to
meet its financial commitment on an obligation in accordance with
the terms of the obligation;
2. Nature of and provisions of the obligation;
3. Protection afforded by, and relative position of, the obligation in
the event of bankruptcy, reorganization, or other arrangement under
the laws of bankruptcy and other laws affecting creditors' rights.
The issue rating definitions are expressed in terms of default risk. As such,
they pertain to senior obligations of an entity. Junior obligations are
typically rated lower than senior obligations, to reflect the lower priority in
bankruptcy, as noted above. (Such differentiation applies when an entity has
both senior and subordinated obligations, secured and unsecured obligations, or
operating company and holding company obligations.) Accordingly, in the case of
junior debt, the rating may not confirm exactly with the category definition.
AAA. An obligation rated AAA has the highest rating assigned by Standard &
Poor's. The obligor's capacity to meet its financial commitment on the
obligation is extremely strong.
AA. An obligation rated AA differs from the highest-rated obligations only
in small degree. The obligor's capacity to meet its financial commitment on the
obligation is very strong.
A. An obligation rated A is somewhat more susceptible to the adverse effects
of changes in circumstances and economic conditions than obligations in
higher-rated categories. However, the obligor's capacity to meet its financial
commitment on the obligation is still strong.
BBB. An obligation rated BBB exhibits adequate protection parameters.
However, adverse economic conditions or changing circumstances are more likely
to lead to a weakened capacity of the obligor to meet its financial commitment
on the obligation.
Obligations rated BB, B, CCC, CC, and C are regarded as having significant
speculative characteristics. BB indicates the least degree of speculation and C
the highest. While such obligations will likely have some quality and protective
characteristics, these may be outweighed by large uncertainties or major
exposures to adverse conditions.
BB. An obligation rated BB is less vulnerable to nonpayment than other
speculative issues. However, it faces major ongoing uncertainties or exposure to
adverse business, financial, or economic conditions which could lead to the
obligor's inadequate capacity to meet its financial commitment on the
obligation.
B. An obligation rated B is more vulnerable to nonpayment than obligations
rated BB, but the obligor currently has the capacity to meet its financial
commitment on the obligation. Adverse business, financial, or economic
conditions will likely impair the obligor's capacity or willingness to meet its
financial commitment on the obligation.
CCC. An obligation rated CCC is currently vulnerable to nonpayment, and is
dependent upon favorable business, financial and economic conditions for the
obligor to meet its financial commitment on the obligation. In the event of
adverse business, financial, or economic conditions, the obligor is not likely
to have the capacity to meet its financial commitment on the obligation.
CC. An obligation rated CC is currently highly vulnerable to nonpayment.
C. The C rating may be used to cover a situation where a bankruptcy petition
has been filed or similar action has been taken, but payments on this obligation
are being continued.
D. An obligation rated D is in payment default. The D rating category is
used when payments on an obligation are not made on the date due even if the
applicable grace period has not expired, unless Standard & Poor's believes that
such payments will be made during such grace period. The D rating also will be
used upon the filing of a bankruptcy petition or the taking of a similar action
if payments on an obligation are jeopardized.
Plus (+) or minus (-). The ratings from AA to CCC may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
r. This symbol is attached to the ratings of instruments with significant
noncredit risks. It highlights risks to principal or volatility of expected
returns which are not addressed in the credit rating. Examples include:
obligations linked or indexed to equities, currencies, or commodities;
obligations exposed to severe prepayment risk-such as interest-only or
principal-only mortgage securities; and obligations with unusually risky
interest terms, such as inverse floaters.
Short-Term Issue Credit Ratings.
A-1. A short-term obligation rated A-1 is rated in the highest category by
Standard & Poor's. The obligor's capacity to meet its financial commitment on
the obligation is strong. Within this category, certain obligations are
designated with a plus sign (+). This indicates that the obligor's capacity to
meet its financial commitment on these obligations is extremely strong.
A-2. A short-term obligation rated A-2 is somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions than
obligations in higher rating categories. However, the obligor's capacity to meet
its financial commitment on the obligation is satisfactory.
A-3. A short-term obligation rated A-3 exhibits adequate protection
parameters. However, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity of the obligor to meet its financial
commitment on the obligation.
B. A short-term obligation rated B is regarded as having significant
speculative characteristics. The obligor currently has the capacity to meet its
financial commitment on the obligation; however, if faces major ongoing
uncertainties which could lead to the obligor's inadequate capacity to meet its
financial commitment on the obligation.
C. A short-term obligation rated C is currently vulnerable to nonpayment and
is dependent upon favorable business, financial, and economic conditions for the
obligor to meet its financial commitment on the obligation.
D. A short-term obligation rated D is in payment default. The D rating
category is used when payments on an obligation are not made on the date due
even if the applicable grace period has not expired, unless Standard & Poor's
believes that such payments will be made during such grace period. The D rating
also will be used upon the filing of a bankruptcy petition or the taking of a
similar action if payments on an obligation are jeopardized.
Local Currency and Foreign Currency Risks. Country risk considerations are a
standard part of Standard & Poor's analysis for credit ratings on any issuer or
issue. Currency of repayment is a key factor in this analysis. An obligor's
capacity to repay foreign currency obligations may be lower than its capacity to
repay obligations in its local currency due to the sovereign government's own
relatively lower capacity to repay external versus domestic debt. These
sovereign risk considerations are incorporated in the debt ratings assigned to
specific issues. Foreign currency issuer ratings are also distinguished from
local currency issuer ratings to identify those instances where sovereign risks
make them different for the same issuer.
