As filed with the Securities and Exchange Commission on October 19, 2000
1933 Act Registration No. 33-87244
1940 Act Registration No. 811-8894
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. [ ]
----
Post-Effective Amendment No. 21 [X]
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and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 22 [X]
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JNL SERIES TRUST
(Exact Name of Registrant as Specified in Charter)
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1 Corporate Way, Lansing, Michigan 48951
(Address of Principal Executive Offices) (Zip Code)
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Registrant's Telephone Number, including Area Code: (517) 381-5500
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Patrick W. Garcy, Esq. with a copy to:
JNL Series Trust
Assistant Vice President & Counsel Blazzard, Grodd & Hasenauer P.C.
1 Corporate Way P.O. Box 5108
Lansing, Michigan 48951 Westport, Connecticut 06881
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(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box)
immediately upon filing pursuant to paragraph (b)
---
on May 1, 2000 pursuant to paragraph (b)
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X 60 days after filing pursuant to paragraph (a)(1)
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on (date)pursuant to paragraph (a)(1)
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75 days after filing pursuant to paragraph (a)(2)
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on (date) pursuant to paragraph (a)(2) of Rule 485.
---
This post-effective amendment designates a new effective date for a
--- previously filed post-effective amendment.
<PAGE>
JNL SERIES TRUST
REFERENCE TO ITEMS REQUIRED BY FORM N-1A
Caption in Prospectus or
Statement of Additional
Information relating to
N-1A Item each Item
--------- -------------------------------
Part A. Information Required in a Prospectus Prospectus
1. Front and Back Cover Pages Front and Back Cover Pages
2. Risk/Return Summary: Investments, About the Series of the Trust
Risks, and Performance
3. Risk/Return Summary: Fee Table Not Applicable
4. Investment Objectives, Principal About the Series of the Trust
Investment Strategies, and Related Risks
5. Management's Discussion of Fund Not Applicable
Performance
6. Management, Organization and Capital Management of the Trust;
Structure About the Series of the Trust
7. Shareholder Information Investment of Trust Shares;
Share Redemption; Tax Status
8. Distribution Arrangements The Distributor; Brokerage
Enhancement Plan
9. Financial Highlights Information Financial Highlights
Information Required in a Statement of Statement of
Part B. Additional Information Additional Information
10. Cover Page and Table Of Contents Cover Page and Table of
Contents
11. Fund History General Information and History
12. Descritpion of the Fund and Its Common Types of Investments and
Investments and Risks Management Practices;
Additional Risk
Considerations; Investment
Restrictions Applicable to All
Series
13. Management of the Fund Management of the Trust
14. Control Persons and Principal Holders Management of the Trust
of Securities
15. Investment Advisory and Other Services Investment Advisory and Other
Services
16. Brokerage Allocation and Other Practices Investment Advisory and Other
Services
17. Capital Stock and Other Securities Purchases, Redemptions and
Pricing of Shares; Additional
Information
18. Purchase, Redemption and Pricing of Purchases, Redemptions and
Shares Pricing of Shares
19. Taxation of the Fund Tax Status
20. Underwriters The Distributor; Brokerage
Enhancement Plan
21. Calculation of Performance Data Performance
22. Financial Statements Financial Statements
Part C.
Information required to be included in Part C is set forth under the appropriate
item, so numbered, in Part C of this Amendment to the Registration Statement.
<PAGE>
JNL(R) SERIES TRUST
PROSPECTUS
December __, 2000
JNL(R) SERIES TRUST
1 Corporate Way o Lansing, Michigan 48951
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 and variable life insurance
policies. Shares of the Trust may also be sold directly to qualified retirement
plans. The Trust currently offers shares in the following separate Series, each
with its own investment objective.
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 Stock Index Series
JNL/J.P. Morgan International & Emerging Markets Series
JNL/Janus Aggressive Growth Series
JNL/Janus Balanced Series
JNL/Janus Capital Growth Series
JNL/Janus Growth & Income Series
JNL/PIMCO Total Return Bond Series
JNL/Putnam Growth Series
JNL/Putnam International Equity Series
JNL/Putnam Midcap Growth Series
JNL/Putnam Value Equity Series
JNL/S&P Conservative Growth Series I
JNL/S&P Moderate Growth Series I
JNL/S&P Aggressive Growth Series I
JNL/S&P Very Aggressive Growth Series I
JNL/S&P Equity Growth Series I
JNL/S&P Equity Aggressive Growth Series I
JNL/S&P Conservative Growth Series II
JNL/S&P Moderate Growth Series II
JNL/S&P Aggressive Growth Series II
JNL/S&P Very Aggressive Growth Series II
JNL/S&P Equity Growth Series II
JNL/S&P Equity Aggressive Growth Series II
JNL/S&P Conservative Growth Series
JNL/S&P Moderate Growth Series
JNL/S&P Aggressive Growth Series
JNL Enhanced Intermediate Bond Index Series
JNL International Index Series
JNL Russell 2000 Index Series
JNL S&P 500 Index Series
JNL S&P MidCap Index 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 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 Mid-Cap Growth Series
T. Rowe Price/JNL Value 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", "S&P
MidCap 400 Index" and "Standard & Poor's 400 Index" are trademarks of The
McGraw-Hill Companies, Inc. and have been licensed for use by Jackson National
Life Insurance Company. The JNL/J.P. Morgan Enhanced S&P 500 Stock Index Series,
JNL S&P 500 Index Series and JNL S&P MidCap Index Series are not sponsored,
endorsed, sold or promoted by Standard & Poor's and Standard & Poor's makes no
representation regarding the advisability of investing in the Series. Among the
fund options considered are index funds based on the S&P 500 and other indexes
that are published by S&P's affiliate. This affiliate typically receives license
fees from the issuers of such funds, some of which may be based on the amount of
assets invested in the fund. Please see the Statement of Additional Information
which sets forth certain additional disclaimers and limitations of liabilities
on behalf of S&P.
For more detailed information about the Trust and the Series, see the Trust's
Statement of Additional Information (SAI), which is incorporated by reference
into this prospectus.
---------------
<PAGE>
TABLE OF CONTENTS
I. About the Series of the Trust
INCLUDES A DESCRIPTION OF EACH SERIES, ITS INVESTMENT STRATEGIES AND PRINCIPAL
RISKS; HISTORIC PERFORMANCE; PERFORMANCE MEASURED AGAINST A RELEVANT BENCHMARK;
HIGHEST AND LOWEST PERFORMING QUARTERS; EXPENSES; AND MANAGEMENT OF THE SERIES.
II. Management of the Trust
MANAGEMENT OF THE SERIES; SERIES EXPENSES; SUB-ADVISORY ARRANGEMENTS; INVESTMENT
OF TRUST SHARES; SHARE REDEMPTION; AND TAX STATUS.
III. Financial Highlights
THE FINANCIAL HIGHLIGHTS TABLES WILL HELP YOU UNDERSTAND A SERIES' FINANCIAL
PERFORMANCE FOR THE PAST FIVE YEARS, OR FOR THE SHORTER LIFE OF THE SERIES.
<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 at least 65% in a diversified portfolio of equity securities - common
stock, preferred stock, and securities convertible into or exchangeable for
common stock - 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.
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.
o Growth investing risk. Growth companies usually invest a high portion
of earnings in their businesses, and may lack the dividends of value
stocks that can cushion prices in a falling market. Also, earnings
disappointments often lead to sharp declines in prices because
investors buy growth stocks in anticipation of superior earnings
growth.
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 and shows how performance
has varied from year to year. The table shows the Series' annual returns and
compares them to a broad based index since these shares were first offered. 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 insurance contract. Those
charges, which are described in the variable insurance 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.
Annual Total Returns as of December 31
13.41% 26.20% 45.66% 33.80%
[Insert Chart]
1996 1997 1998 1999
During the period covered, 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, 1999
----------------------------------------------------
1 year Life of Series*
JNL/Alger Growth Series 33.80% 27.08%
S&P 500 Index 21.04% 26.67%
The S&P 500 Index is a broad-based, unmanaged index. * The Series began
operations on October 16, 1995.
Shareholder Transaction Expenses (fees paid directly from your investment)
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fee None
Exchange Fee None
Expenses. The table below shows certain expenses you will incur as a Series
investor, either directly or indirectly.
-----------------------------------------------------------------------------
Annual Series Operating Expenses
(expenses that are deducted from Series assets)
-----------------------------------------------------------------------------
Management/Administrative Fee 1.07%
-----------------------------------------------------------------------------
Distribution (12b-1) Fees 0.02%
-----------------------------------------------------------------------------
Other Expenses 0%
-----------------------------------------------------------------------------
Total Series Annual Operating Expenses 1.09%
-----------------------------------------------------------------------------
* As discussed under "Management of the Trust," the Trustees have adopted a
Brokerage Enhancement Plan (the "Plan") in accordance with the provisions of
Rule 12b-1 under the Investment Company Act of 1940. The Plan uses the available
brokerage commissions to promote the sale of shares of the Trust. While the
brokerage commission rates and amounts paid by the Trust are not expected to
increase as a result of the Distribution Plan, the staff of the Securities and
Exchange Commission has taken the position that commission amounts received
under the Distribution Plan should be reflected as distribution expenses of the
Series. The distribution fee noted is an estimate and therefore it is not
possible to determine with accuracy actual amounts that will be received by the
Series under the Plan.
Expense Example. This example is intended to help you compare the cost of
investing in the Series with the cost of investing in other mutual funds. Also,
this example does not reflect the expenses of the Qualified Plan. The table
below shows the expenses you would pay on a $10,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period. This
illustration is hypothetical and is not intended to be representative of past or
future performance of the Series. The example also assumes that the Series
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
--------------------------------------------------------------------------------
Expense Example
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1 Year $111
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3 Years $347
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5 Years $601
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10 Years $1,329
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Additional Information About the Other Investment Strategies, Other Investments
and Risks of the Series. 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/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 that the sub-adviser believes have the
potential for capital appreciation., which include securities convertible into
or exchangeable for common stock. 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 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 Growth investing risk. Growth companies usually invest a high portion
of earnings in their businesses, and may lack the dividends of value
stocks that can cushion prices in a falling market. Also, earnings
disappointments often lead to sharp declines in prices because
investors buy growth stocks in anticipation of superior earnings
growth.
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. In addition, foreign investing involves less publicly
available information and more volatile or less liquid securities
markets. 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. Foreign accounting may be less revealing than American
accounting practices. Foreign regulation may be inadequate or
irregular. 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 and shows how performance
has varied from year to year. The table shows the Series' annual returns and
compares them to a broad based index since these shares were first offered. 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 insurance contract. Those
charges, which are described in the variable insurance 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.
Annual Total Returns as of December 31
28.23%
[Insert Chart]
1999
In the period shown in the chart, the Series' highest quarterly return was
17.69% (4th quarter of 1999) and its lowest quarterly return was -5.30% (3rd
quarter of 1999).
Average Annual Total Returns as of December 31, 1999
----------------------------------------------------
1 year Life of Series*
JNL/Alliance Growth Series 28.23% 33.64%
S&P 500 Index 21.04% 26.67%
The S&P 500 Index is a broad-based, unmanaged index. *The Series began
operations on March 2, 1998.
Shareholder Transaction Expenses (fees paid directly from your investment)
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fee None
Exchange Fee None
--------------------------------------------------------------------------------
Annual Series Operating Expenses
(expenses that are deducted from Series assets)
--------------------------------------------------------------------------------
Management/Administrative Fee 0.88%
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Distribution (12b-1) Fees 0.02%
--------------------------------------------------------------------------------
Other Expenses 0%
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Total Series Annual Operating Expenses 0.90%
--------------------------------------------------------------------------------
* As discussed under "Management of the Trust," the Trustees have adopted a
Brokerage Enhancement Plan (the "Plan") in accordance with the provisions of
Rule 12b-1 under the Investment Company Act of 1940. The Plan uses the available
brokerage commissions to promote the sale of shares of the Trust. While the
brokerage commission rates and amounts paid by the Trust are not expected to
increase as a result of the Distribution Plan, the staff of the Securities and
Exchange Commission has taken the position that commission amounts received
under the Distribution Plan should be reflected as distribution expenses of the
Series. The distribution fee noted is an estimate and therefore it is not
possible to determine with accuracy actual amounts that will be received by the
Series under the Plan.
Expense Example. This example is intended to help you compare the cost of
investing in the Series with the cost of investing in other mutual funds. Also,
this example does not reflect the expenses of the Qualified Plan. The table
below shows the expenses you would pay on a $10,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period. This
illustration is hypothetical and is not intended to be representative of past or
future performance of the Series. The example also assumes that the Series
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
--------------------------------------------------------------------------------
Expense Example
--------------------------------------------------------------------------------
1 Year $92
--------------------------------------------------------------------------------
3 Years $287
--------------------------------------------------------------------------------
5 Years $498
--------------------------------------------------------------------------------
10 Years $1,108
--------------------------------------------------------------------------------
Additional Information About the Other Investment Strategies, Other Investments
and Risks of the Series. 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, Executive 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/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 at least 65% of total assets 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 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 sub-adviser looks for securities of companies
which have an exceptional management team and which have the potential
to increase market share and drive earnings per share 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.
The sub-adviser 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. 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.
These securities or their respective issuers have at least one
of the following characteristics when acquired for the Series:
-- low price-to-earnings price-to-book value, price to
cash flow and price-to-sales ratios, as compared to
the broad market, industry peers and the company's
historical ratios
-- above average dividend yield , or
-- Beta below that of the broad market
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.
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.
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 Growth investing risk. Growth companies usually invest a high
portion of earnings in their businesses, and may lack the
dividends of value stocks that can cushion prices in a falling
market. Also, earnings disappointments often lead to sharp
declines in prices because investors buy growth stocks in
anticipation of superior earnings growth.
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 Series' sub-advisers must correctly predict
the price movements, during the life of a derivative, of the
underlying asset in order to realize the desired results from
the investment. 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 price movements in the
rest of the portfolio.
o Value investing risk. The value approach carries the risk that
the market will not recognize a security's intrinsic value for
a long time, or that a stock judged to be undervalued may
actually be appropriately priced.
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 and shows how performance
has varied from year to year. The table shows the Series' annual returns and
compares them to a broad based index since these shares were first offered. 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 insurance contract. Those
charges, which are described in the variable insurance 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.
Annual Total Returns as of December 31
32.35% 16.54% 23.55%
[Insert Chart]
1997 1998 1999
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 31,1999
---------------------------------------------------
1 year Life of Series*
JNL/Eagle Core Equity Series 23.55% 23.96%
S&P 500 Index 21.04% 28.10%
The S&P 500 Index is a broad-based, unmanaged index. * The Series began
operations on September 16, 1996.
Shareholder Transaction Expenses (fees paid directly from your investment)
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fee None
Exchange Fee None
Expenses. The table below shows certain expenses you will incur as a Series
investor, either directly or indirectly.
--------------------------------------------------------------------------------
Annual Series Operating Expenses
(expenses that are deducted from Series assets)
--------------------------------------------------------------------------------
Management/Administrative Fee 0.99%
--------------------------------------------------------------------------------
Distribution (12b-1) Fees 0.04%
--------------------------------------------------------------------------------
Other Expenses 0%
--------------------------------------------------------------------------------
Total Series Annual Operating Expenses 1.03%
--------------------------------------------------------------------------------
* As discussed under "Management of the Trust," the Trustees have adopted a
Brokerage Enhancement Plan (the "Plan") in accordance with the provisions of
Rule 12b-1 under the Investment Company Act of 1940. The Plan uses the available
brokerage commissions to promote the sale of shares of the Trust. While the
brokerage commission rates and amounts paid by the Trust are not expected to
increase as a result of the Distribution Plan, the staff of the Securities and
Exchange Commission has taken the position that commission amounts received
under the Distribution Plan should be reflected as distribution expenses of the
Series. The distribution fee noted is an estimate and therefore it is not
possible to determine with accuracy actual amounts that will be received by the
Series under the Plan.
Expense Example. This example is intended to help you compare the cost of
investing in the Series with the cost of investing in other mutual funds. Also,
this example does not reflect the expenses of the Qualified Plan. The table
below shows the expenses you would pay on a $10,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period. This
illustration is hypothetical and is not intended to be representative of past or
future performance of the Series. The example also assumes that the Series
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
--------------------------------------------------------------------------------
Expense Example
--------------------------------------------------------------------------------
1 Year $105
--------------------------------------------------------------------------------
3 Years $328
--------------------------------------------------------------------------------
5 Years $569
--------------------------------------------------------------------------------
10 Years $1,259
--------------------------------------------------------------------------------
Additional Information About the Other Investment Strategies, Other Investments
and Risks of the Series.
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. Ed Cowart,
Managing Director and Portfolio Manager, is responsible for the day-to-day
management of the value equity strategy. Mr. Cowart joined Eagle in August 1999,
after serving as Managing Director at Banc One Investment Advisors in Columbus,
Ohio. Mr. Lou Kirschbaum, Managing Director and Portfolio Manager and Mr. David
Blount, Portfolio Manager, as co-managers, are responsible for the day-to-day
management of the equity income strategy. 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 65% of its total assets 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 sub-adviser 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 sub-adviser
generally invests in companies which have accelerating earnings, reasonable
valuations 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, or may depend on the expertise of a few
people 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 and shows how performance
has varied from year to year. The table shows the Series' annual returns and
compares them to a broad based index since these shares were first offered. 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 insurance contract. Those
charges, which are described in the variable insurance 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.
Annual Total Returns as of December 31
27.64% 1.18% 19.27%
[Insert Chart]
1997 1998 1999
In the periods shown in the chart, the Series' highest quarterly return was
29.40% (2nd quarter of 1999) and its lowest quarterly return was -23.92% (3rd
quarter of 1998).
Average Annual Total Returns as of December 31, 1999
-----------------------------------------------------
1 year Life of Series*
JNL/Eagle SmallCap Equity Series 19.27% 19.09%
Russell 2000 Index 21.35% 13.64%
The Russell 2000 Index is a broad-based, unmanaged index. * The Series began
operations on September 16, 1996.
Shareholder Transaction Expenses (fees paid directly from your investment)
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fee None
Exchange Fee None
Expenses. The table below shows certain expenses you will incur as a Series
investor, either directly or indirectly.
--------------------------------------------------------------------------------
Annual Series Operating Expenses (expenses that are deducted from Series assets)
--------------------------------------------------------------------------------
Management/Administrative Fee 1.05%
--------------------------------------------------------------------------------
Distribution (12b-1) Fees 0.02%
--------------------------------------------------------------------------------
Other Expenses 0%
--------------------------------------------------------------------------------
Total Series Annual Operating Expenses 1.07%
--------------------------------------------------------------------------------
* As discussed under "Management of the Trust," the Trustees have adopted a
Brokerage Enhancement Plan (the "Plan") in accordance with the provisions of
Rule 12b-1 under the Investment Company Act of 1940. The Plan uses the available
brokerage commissions to promote the sale of shares of the Trust. While the
brokerage commission rates and amounts paid by the Trust are not expected to
increase as a result of the Distribution Plan, the staff of the Securities and
Exchange Commission has taken the position that commission amounts received
under the Distribution Plan should be reflected as distribution expenses of the
Series. The distribution fee noted is an estimate and therefore it is not
possible to determine with accuracy actual amounts that will be received by the
Series under the Plan.
Expense Example. This example is intended to help you compare the cost of
investing in the Series with the cost of investing in other mutual funds. Also,
this example does not reflect the expenses of the Qualified Plan. The table
below shows the expenses you would pay on a $10,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period. This
illustration is hypothetical and is not intended to be representative of past or
future performance of the Series. The example also assumes that the Series
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
--------------------------------------------------------------------------------
Expense Example
--------------------------------------------------------------------------------
1 Year $109
--------------------------------------------------------------------------------
3 Years $340
--------------------------------------------------------------------------------
5 Years $590
--------------------------------------------------------------------------------
10 Years $1,306
--------------------------------------------------------------------------------
Additional Information About the Other Investment Strategies, Other Investments
and Risks of the Series. The JNL/Eagle SmallCap Equity Series 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, Managing Director 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/J.P. Morgan Enhanced S&P 500 Stock Index Series
Investment Objective. The investment objective of the JNL/J.P. Morgan Enhanced
S&P 500 Stock Index Series is to provide high total return from a broadly
diversified portfolio of equity securities.
Principal Investment Strategies. The Series seeks to achieve its objective by
investing primarily in a diversified portfolio of large- and
medium-capitalization U.S. companies. At least 65% of its total assets will be
invested, under normal market conditions, in stocks. The Series owns a large
number of stocks within the Standard & Poor's 500 Composite Stock Price Index
(S&P 500 Index), generally tracking the industry weighting of that Index. Within
each industry, the Series modestly overweights stocks that the sub-adviser
regards as undervalued or fairly valued and modestly underweights or does not
hold stocks that the sub-adviser determines are overvalued. By so doing, the
Series seeks returns that slightly exceed those of the S&P 500 Index over the
long term with virtually the same level of volatility. The Series' foreign
investments generally reflect the weightings of foreign securities in the S&P
500 Index.
In managing the JNL/J.P. Morgan Enhanced S&P 500 Stock Index Series, the
sub-adviser generally employs a three-step process:
(i) based on its in-house research, the sub-adviser takes an
in-depth look at company prospects over a relatively long
period, often as much as five years, rather than focusing on
near-term expectations. This approach is designed to provide
insight into a company's real growth potential.
(ii) the research findings allow the sub-adviser to rank the
companies in each industry group according to their relative
value. These valuation rankings are produced with the help of
models that quantify the research team's findings.
(iii) the sub-adviser buys and sells stocks for the Series according
to the policies of the Series based on the sub- research and
valuation rankings.
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.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Shareholder Transaction Expenses (fees paid directly from your investment)
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fee None
Exchange Fee None
Expenses. The table below shows certain expenses you will incur as a Series
investor, either directly or indirectly.
--------------------------------------------------------------------------------
Annual Series Operating Expenses (expenses that are deducted from Series assets)
--------------------------------------------------------------------------------
Management/Administrative Fee 0.90%
--------------------------------------------------------------------------------
Distribution (12b-1) Fees 0.01%
--------------------------------------------------------------------------------
Other Expenses 0%
--------------------------------------------------------------------------------
Total Series Annual Operating Expenses 0.91%
--------------------------------------------------------------------------------
* As discussed under "Management of the Trust," the Trustees have adopted a
Brokerage Enhancement Plan (the "Plan") in accordance with the provisions of
Rule 12b-1 under the Investment Company Act of 1940. The Plan uses the available
brokerage commissions to promote the sale of shares of the Trust. While the
brokerage commission rates and amounts paid by the Trust are not expected to
increase as a result of the Distribution Plan, the staff of the Securities and
Exchange Commission has taken the position that commission amounts received
under the Distribution Plan should be reflected as distribution expenses of the
Series. The distribution fee noted is an estimate and therefore it is not
possible to determine with accuracy actual amounts that will be received by the
Series under the Plan.
Expense Example. This example is intended to help you compare the cost of
investing in the Series with the cost of investing in other mutual funds. Also,
this example does not reflect the expenses of the Qualified Plan. The table
below shows the expenses you would pay on a $10,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period. This
illustration is hypothetical and is not intended to be representative of past or
future performance of the Series. The example also assumes that the Series
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
--------------------------------------------------------------------------------
Expense Example
--------------------------------------------------------------------------------
1 Year $93
--------------------------------------------------------------------------------
3 Years $290
--------------------------------------------------------------------------------
5 Years $504
--------------------------------------------------------------------------------
10 Years $1,120
--------------------------------------------------------------------------------
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the returns since the inception of the
Series. The table shows the Series' returns and compares them to a broad based
index since these shares were first offered. 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 insurance contract. Those charges, which are described
in the variable insurance 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.
COMPARABLE PERFORMANCE
Private Account Performance Composite
The JNL/J.P. Morgan Enhanced S&P 500 Stock Index Series has substantially
similar investment objectives, policies and investment strategies as certain
Private Accounts. Each of these Private Accounts is managed by J.P. Morgan
Investment Management Inc., the same Sub-Adviser which manages each of the
corresponding Series.
The historical performance of each of these Private Accounts is shown below.
This performance data should not be considered as an indication of future
performance of the Series. The Private Account performance figures shown below:
o do not reflect Contract fees or charges imposed by Jackson National
Life. Investors should refer to the separate account prospectus for
information describing the Contract fees and charges. These fees and
charges will have a detrimental effect on Series performance.
The Series and Private Accounts are expected to hold similar securities.
However, their investment results are expected to differ for the following
reasons:
o differences in asset size and cash flow resulting from purchases and
redemptions of Series shares may result in different security
selections
o differences in the relative weightings of securities
o differences in the price paid for particular portfolio holdings
o differences relating to certain tax matters
o differences in that such Accounts are not subject to certain investment
limitations, diversification requirements and other restrictions
imposed by federal tax and securities laws
However, the differences cited do not alter the conclusion that the funds have
substantially similar investment objectives, policies and strategies.
The chart below shows performance information derived from historical composite
performance of Private Accounts.
PRIVATE ACCOUNT
COMPOSITE PERFORMANCE FOR PERIODS ENDED 12/31/99
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------
Annualized Returns as of December 31, 1999
-------------------------------------------------------------------------------------------------------------
Structured Stock Selection S&P 500 Index
Composite
-------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1 Year 18.80 21.04
3 Years 27.85 27.56
5 Years 28.85 28.55
10 Years 18.92 18.21
-------------------------------------------------------------------------------------------------------------
</TABLE>
Performance results represent the investment performance record for a
size-weighted composite of similarly managed, unconstrained discretionary
accounts following the Structured Stock Selection Strategy. The composite
performance was calculated according to the requirements of the Association for
Investment Management and Research. These requirements differ from those
required by the Securities and Exchange Commission. The composite consists of
private individual and institutional accounts. Hence, these accounts are not
subject to investment limitations, diversification requirements, and other
restrictions imposed on mutual funds by the 1940 Act and the Internal Revenue
Code. The performance of the accounts might have been lower if they were subject
to these extra restrictions. Note also that the performance shown would be lower
upon taking into account charges assessed in connection with a variable annuity
or variable life contract.
Composite returns reflect the deduction of the highest fee J.P. Morgan charges
for the strategy. The fee deducted by J.P. Morgan is less than the fees of the
Series. If the expenses of the Series had been deducted, the performance results
would have been lower. Actual account performance will vary depending on the
size of a portfolio and applicable fee schedule. Past performance does not
guarantee future results.
The following is an example of the effect of compounded advisory fees over a
period of time on the value of a client's portfolio: A portfolio with a
beginning value of $100, gaining an annual return of 10% per annum would grow to
$259 after 10 years, assuming no fees have been paid out. Conversely, a
portfolio with a beginning value of $100, gaining an annual return of 10% per
annum, but paying a fee of 1% per annum, would only grow to $235 after 10 years.
The annualized returns over the 10 year time period are 10.00% (gross of fees)
and 8.91% (net of fees). If the fee in the above example was 0.25% per annum,
the portfolio would grow to $253 after 10 years and return 9.73% net of fees.
The fees were calculated on a monthly basis, which shows the maximum effect of
compounding.
A Series' performance may be affected by risks specific to certain types of
investments, such as foreign securities, derivative investments, non-investment
grade debt securities, initial public offerings (IPOs) or companies with
relatively small market capitalizations. IPOs and other investment techniques
may have magnified performance impact on a Series with a small asset base. A
Series may not experience similar performance as its assets grow.
Additional Information About the Other Investment Strategies, Other Investments
and Risks of the Series. In general, the sub-adviser buys stocks that it
identifies as undervalued and considers selling them when they appear
overvalued. Along with attractive valuation, the Series' sub-adviser may
consider other criteria, such as: catalysts that could trigger a rise in a
stock's price; high potential reward compared to potential risk; and temporary
mispricings caused by market overreactions. Under normal market conditions, the
Series holds approximately 300 stocks and limits each stock's weight in the
portfolio to be within +/- 1.0% of its weight in the S&P 500 Index.
The Series may invest up to 100% of its assets in investment-grade, short-term
fixed-income securities during severe market downturns. Doing so may reduce the
potential for appreciation in the Series' portfolio. The Series generally avoids
short-term trading, except to take advantage of attractive or unexpected
opportunities or to meet demands generated by shareholder activity. Active
trading may increase transaction costs, which may reduce performance.
The Series may use derivative instruments, such as futures contracts, options,
forward currency contracts and swaps, for hedging and risk management, i.e., to
establish or adjust exposure to the equities market. 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 JNL/J.P. Morgan
Enhanced S&P 500 Stock Index 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.
Nanett Buziak, Vice President of J.P. Morgan, Timothy Devlin, Vice President of
J.P. Morgan and Bernard Kroll, Vice President of J.P. Morgan share the
responsibility for the day to day management of the Series. Ms. Buziak has been
with J.P. Morgan since March of 1997 and prior to that time was an index
arbitrage trader and convertible bond portfolio manager at First Marathon
America, Inc. Mr. Devlin has been at J.P. Morgan since July of 1996, and prior
to that time was an equity portfolio manager at Mitchell Hutchins Asset
Management Inc. Mr. Knoll has been with J.P. Morgan since August of 1996 and has
had primary responsibility for the day to day management of the Series since its
inception.
<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. At least 65% of its total assets will be
invested, under normal market conditions, in equity securities of foreign
issuers. The Series also invests in the equity securities of companies in
developing countries or "emerging markets." 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.
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. In
addition, foreign investing involves less publicly available
information and more volatile or less liquid markets.
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. Foreign accounting may be
less revealing than American accounting practices. Foreign
regulation may be inadequate or irregular. 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.
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 Series sub-adviser must correctly predict
price movements, during the life of a derivative, of the
underlying asset in order to realize the desired results from
the investment. 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 price 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 bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns and shows how performance
has varied from year to year. The table shows the Series' annual returns and
compares them to a broad based index since these shares were first offered. 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 insurance contract. Those
charges, which are described in the variable insurance 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.
Annual Total Returns as of December 31
38.02%
[Insert Chart]
1999
In the period shown in the chart, the Series' highest quarterly return was
17.86% (4th quarter of 1999) and its lowest quarterly return was 4.07% (1st
quarter of 1999).
Average Annual Total Returns as of December 31, 1999
----------------------------------------------------
1 year Life of Series*
JNL/J.P. Morgan International &
Emerging Markets Series 38.02% 18.38%
MSCI All Country World Free (ex-US) Index 25.49% 16.53%
The MSCI All Country World Free (ex-US) Index is a broad-based, unmanaged index.
* The Series began operations on March 2, 1998.
Shareholder Transaction Expenses (fees paid directly from your investment)
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fee None
Exchange Fee None
Expenses. The table below shows certain expenses you will incur as a Series
investor, either directly or indirectly.
--------------------------------------------------------------------------------
Annual Series Operating Expenses (expenses that are deducted from Series assets)
--------------------------------------------------------------------------------
Management/Administrative Fee 1.08%
--------------------------------------------------------------------------------
Distribution (12b-1) Fees 0.03%
--------------------------------------------------------------------------------
Other Expenses 0%
--------------------------------------------------------------------------------
Total Series Annual Operating Expenses 1.11%
--------------------------------------------------------------------------------
* As discussed under "Management of the Trust," the Trustees have adopted a
Brokerage Enhancement Plan (the "Plan") in accordance with the provisions of
Rule 12b-1 under the Investment Company Act of 1940. The Plan uses the available
brokerage commissions to promote the sale of shares of the Trust. While the
brokerage commission rates and amounts paid by the Trust are not expected to
increase as a result of the Distribution Plan, the staff of the Securities and
Exchange Commission has taken the position that commission amounts received
under the Distribution Plan should be reflected as distribution expenses of the
Series. The distribution fee noted is an estimate and therefore it is not
possible to determine with accuracy actual amounts that will be received by the
Series under the Plan.
Expense Example. This example is intended to help you compare the cost of
investing in the Series with the cost of investing in other mutual funds. Also,
this example does not reflect the expenses of the Qualified Plan. The table
below shows the expenses you would pay on a $10,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period. This
illustration is hypothetical and is not intended to be representative of past or
future performance of the Series. The example also assumes that the Series
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
--------------------------------------------------------------------------------
Expense Example
--------------------------------------------------------------------------------
1 Year $113
--------------------------------------------------------------------------------
3 Years $353
--------------------------------------------------------------------------------
5 Years $612
--------------------------------------------------------------------------------
10 Years $1,352
--------------------------------------------------------------------------------
Additional Information About the Other 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 Free (ex-U.S.) Index, the
Series' benchmark.
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 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 Series may invest in companies of any size, from larger,
well-established companies to smaller, emerging growth companies. 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 to a lesser degree in other types of securities, including
preferred stock, warrants, convertible securities and debt securities. The
Series may invest without limit 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. 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 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. Growth investing risk. Growth companies usually invest a
high portion of earnings in their businesses, and may lack the
dividends of value stocks that can cushion prices in a falling
market. Also, earnings disappointments often lead to sharp
declines in prices because investors buy growth stocks in
anticipation of superior earnings growth.
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. In
addition, foreign investing involves less publicly available
information and more volatile or less liquid markets.
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. Foreign accounting may be
less revealing than American accounting practices. Foreign
regulation may be inadequate or irregular. 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 Derivatives risk. Investing in derivative instruments, such as
options, futures contracts, forward currency contracts,
indexed securities and asset-backed securities, involves
special risks. The Series sub-adviser must correctly predict
price movements, during the life of a derivative, of the
underlying asset in order to realize the desired results from
the investment. 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 price 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 bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns and shows how performance
has varied from year to year. The table shows the Series' annual returns and
compares them to a broad based index since these shares were first offered. 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 insurance contract. Those
charges, which are described in the variable insurance 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.
Annual Total Returns as of December 31
18.95% 12.67% 57.66% 94.43%
[Insert Chart]
1996 1997 1998 1999
In the periods shown in the chart, the Series' highest quarterly return was
41.64% (4th quarter of 1999) and its lowest quarterly return was -6.56% (3rd
quarter of 1998).
Average Annual Total Returns as of December 31, 1999
----------------------------------------------------
1 year Life of Series*
JNL/Janus Aggressive Growth Series 94.43% 42.10%
S&P 500 Index 21.04% 26.95%
The S&P 500 Index is a broad-based, unmanaged index. * The Series began
operations on May 15, 1995.
Shareholder Transaction Expenses (fees paid directly from your investment)
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fee None
Exchange Fee None
Expenses. The table below shows certain expenses you will
incur as a Series investor, either directly or indirectly.
--------------------------------------------------------------------------------
Annual Series Operating Expenses (expenses that are deducted from Series assets)
--------------------------------------------------------------------------------
Management/Administrative Fee 1.01%
--------------------------------------------------------------------------------
Distribution (12b-1) Fees 0.01%
--------------------------------------------------------------------------------
Other Expenses 0%
--------------------------------------------------------------------------------
Total Series Annual Operating Expenses 1.02%
--------------------------------------------------------------------------------
* As discussed under "Management of the Trust," the Trustees have adopted a
Brokerage Enhancement Plan (the "Plan") in accordance with the provisions of
Rule 12b-1 under the Investment Company Act of 1940. The Plan uses the available
brokerage commissions to promote the sale of shares of the Trust. While the
brokerage commission rates and amounts paid by the Trust are not expected to
increase as a result of the Distribution Plan, the staff of the Securities and
Exchange Commission has taken the position that commission amounts received
under the Distribution Plan should be reflected as distribution expenses of the
Series. The distribution fee noted is an estimate and therefore it is not
possible to determine with accuracy actual amounts that will be received by the
Series under the Plan.
Expense Example. This example is intended to help you compare the cost of
investing in the Series with the cost of investing in other mutual funds. Also,
this example does not reflect the expenses of the Qualified Plan. The table
below shows the expenses you would pay on a $10,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period. This
illustration is hypothetical and is not intended to be representative of past or
future performance of the Series. The example also assumes that the Series
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
--------------------------------------------------------------------------------
Expense Example
--------------------------------------------------------------------------------
1 Year $104
--------------------------------------------------------------------------------
3 Years $325
--------------------------------------------------------------------------------
5 Years $563
--------------------------------------------------------------------------------
10 Years $1,248
--------------------------------------------------------------------------------
Additional Information About the Other Investment Strategies, Other Investments
and Risks of the Series. 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 of 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 has earned
the right to use the Chartered Financial Analyst designation. Mr. Lammert has
had responsibility for the day-to-day management of the Series since the
inception of the Series.
<PAGE>
JNL/Janus Balanced Series
Investment Objective. The investment objective of the JNL/Janus Balanced Series
is long-term capital growth, consistent with preservation of capital and
balanced by current income.
Principal Investment Strategies. The Series normally invests 40-60% of its
assets in securities selected primarily for their growth potential and 40-60% of
its assets in securities selected primarily for their income potential. The
JNL/Janus Balanced 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.
The sub-adviser may also consider dividend-paying characteristics when selecting
common stock. 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 will normally invest at least 25% of its assets in
fixed-income securities. The Series may invest without limit 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. 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 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. In
addition, foreign investing involves less publicly available
information, more volatile or less liquid markets. 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. Foreign accounting may be less
revealing than American accounting practices. Foreign
regulation may be inadequate or irregular. 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. This Series will commence investment operations on or about the
date of this Prospectus. Therefore, a bar chart and table have not been included
for this Series.
Shareholder Transaction Expenses (fees paid directly from your investment)
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fee None
Exchange Fee None
Expenses. The table below shows certain expenses you will incur as a Series
investor, either directly or indirectly.
--------------------------------------------------------------------------------
Annual Series Operating Expenses (expenses that are deducted from Series assets)
--------------------------------------------------------------------------------
Management/Administrative Fee 1.05%
--------------------------------------------------------------------------------
Distribution (12b-1) Fees 0.03%
--------------------------------------------------------------------------------
Other Expenses 0%
--------------------------------------------------------------------------------
Total Series Annual Operating Expenses 1.08%
--------------------------------------------------------------------------------
* As discussed under "Management of the Trust," the Trustees have adopted a
Brokerage Enhancement Plan (the "Plan") in accordance with the provisions of
Rule 12b-1 under the Investment Company Act of 1940. The Plan uses the available
brokerage commissions to promote the sale of shares of the Trust. While the
brokerage commission rates and amounts paid by the Trust are not expected to
increase as a result of the Distribution Plan, the staff of the Securities and
Exchange Commission has taken the position that commission amounts received
under the Distribution Plan should be reflected as distribution expenses of the
Series. The distribution fee noted is an estimate and therefore it is not
possible to determine with accuracy actual amounts that will be received by the
Series under the Plan.
Expense Example. This example is intended to help you compare the cost of
investing in the Series with the cost of investing in other mutual funds. Also,
this example does not reflect the expenses of the Qualified Plan. The table
below shows the expenses you would pay on a $10,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period. This
illustration is hypothetical and is not intended to be representative of past or
future performance of the Series. The example also assumes that the Series
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
--------------------------------------------------------------------------------
Expense Example
--------------------------------------------------------------------------------
1 Year $110
--------------------------------------------------------------------------------
3 Years $343
--------------------------------------------------------------------------------
5 Years $595
--------------------------------------------------------------------------------
10 Years $1,317
--------------------------------------------------------------------------------
Comparable Performance.
Public Fund/Private Account Performance Composite
The JNL/Janus Balanced Series has substantially similar investment objectives,
policies and strategies as certain mutual funds and Private Accounts. Each of
these public mutual funds and Private Accounts is managed by Janus Capital
Corporation, the same Sub-Adviser which manages the JNL/Janus Balanced Series.
The historical performance of a composite of these public mutual funds and
Private Accounts is shown below. This is not the performance of the JNL/Janus
Balanced Series and the performance of the Series may differ. This performance
data should not be considered as an indication of future performance of the
Series. The public mutual fund and Private Account performance figures shown
below:
o reflect the deduction of the historical fees and expenses paid
by the public mutual funds and not those to be paid by the
Series.
o do not reflect Contract fees or charges imposed by Jackson
National Life. Investors should refer to the separate account
prospectus for information describing the Contract fees and
charges. These fees and charges will have a detrimental effect
on Series performance.
The Series and their corresponding public mutual fund series and Private
Accounts are expected to hold similar securities. However, their investment
results are expected to differ for the following reasons:
o differences in asset size and cash flow resulting from
purchases and redemptions of Series shares may result in
different security selections
o differences in the relative weightings of securities
o differences in the price paid for particular portfolio
holdings
o differences relating to certain tax matters
o differences (with respect to the Private Accounts) in that
such Accounts are not subject to certain investment
limitations, diversification requirements and other
restrictions imposed by federal tax and securities laws
However, the differences cited do not alter the conclusion that the Funds have
substantially similar investment objectives, policies and strategies.
The chart below shows performance information derived from historical composite
performance of the public mutual funds and Private Accounts. The inception date
for the composite shown is January 1, 1988.
JANUS BALANCED FUNDS COMPOSITE PERFORMANCE (INCLUDING MUTUAL FUNDS) FOR PERIODS
ENDED 12/31/99
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------
Annualized Returns
-------------------------------------------------------------------------------------------------------------
Janus Balanced S&P 500 Index
-------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1 Year 24.68 21.14
3 Years 26.08 27.66
5 Years 23.93 28.66
10 Years 18.74 18.25
-------------------------------------------------------------------------------------------------------------
</TABLE>
*Inception January 1, 1988
The Balanced Composite includes all fully discretionary separately managed
balanced accounts and mutual funds for which Janus Capital Corporation serves as
investment advisor. The composite was calculated according to the requirements
of the Association for Investment Management and Research. These requirements
differ from those required by the Securities and Exchange Commission. Composite
performance is presented net of all fees and reflects reinvestment of dividends
and capital gains. The fees deducted are less than the fees charged by the
Series. If the expenses of the Series had been deducted, the performance results
would have been lower. As of December 31, 1999, the Balanced Composite included
12 accounts and assets of $6,419.1 million, which represented 2.57% of total
assets under management. The percentage of total assets managed is defined as
composite assets as a percentage of the total assets managed including mutual
fund company accounts under management. Performance figures are based upon
historical information and do not guarantee future results. In addition, the
managers responsible for the historical performance record of these accounts
(Blaine Rollins and James Craig) assumed new responsibilities at Janus beginning
January 1, 2000. Karen Reidy is now the Portfolio Manager for all Balanced
Products. No changes will be made with regard to the investment philosophy or
process of the Funds or separate accounts. Prospective clients should recognize
the limitations inherent in composites, and consider all information presented
by Janus regarding its investment management capabilities. The S&P 500 is an
unmanaged index of common stock prices and includes reinvestment of dividends
and capital gains. They have been taken from published sources and have not been
audited. Composition of each separately managed account portfolio may differ
significantly from securities in the corresponding benchmark indices. A complete
list of Janus composites is available upon request. Please call 800-525-1068.
A Series' performance may be affected by risks specific to certain types of
investments, such as foreign securities, derivative investments, non-investment
grade debt securities, initial public offerings (IPOs) or companies with
relatively small market capitalizations. IPOs and other investment techniques
may have magnified performance impact on a Series with a small asset base. A
Series may not experience similar performance as its assets grow.
Additional Information About the Other Investment Strategies, Other Investments
and Risks of the Series. 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
Balanced 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.
Karen L. Reidy is the Portfolio Manager of the Series. She is also the portfolio
manager and Executive Vice President of Janus Balanced Fund and Janus Equity
Income Fund, as well as Janus Aspen Balanced and Janus Aspen Equity Income
Portfolios. She is also an Assistant Portfolio Manager of Janus Fund and manages
separate accounts and sub-advised portfolios in the Balanced discipline. Prior
to joining Janus in 1995, Ms. Reidy worked for Price Waterhouse in the Mergers
and Acquisitions area, performing corporate due diligence, and as an audit
manager, analyzing financials for corporate clients. Before assuming management
responsibilities of Janus Balanced Fund and Janus Equity Income Fund in January
2000, Ms. Reidy was Assistant Portfolio Manager of Janus Fund, focusing her
research on large-capitalization companies. Ms. Reidy earned a bachelor's degree
in accounting from the University of Colorado. She passed the Certified Public
Accountant exam in 1992 and has earned the right to use the Chartered Financial
Analyst designation. She has five years of professional investment experience.
<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 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, 1999, they ranged between approximately
$170 million and $37 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 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. The Fund may invest without limit 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 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 Growth investing risk. Growth companies usually invest a high
portion of earnings in their businesses, and may lack the
dividends of value stocks that can cushion prices in a falling
market. Also, earnings disappointments often lead to sharp
declines in prices because investors buy growth stocks in
anticipation of superior earnings growth.
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. In
addition, foreign investing involves less publicly available
information and more volatile or less liquid markets.
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. Foreign accounting may be
less revealing than American accounting practices. Foreign
regulation may be inadequate or irregular. 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." Under a
definition provided by the Investment Company Act of 1940, as
amended, non-diversified funds may invest in fewer assets, or
in larger proportions of assets of single companies or
industries. 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 and shows how performance
has varied from year to year. The table shows the Series' annual returns and
compares them to a broad based index since these shares were first offered. 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 insurance contract. Those
charges, which are described in the variable insurance 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.
Annual Total Returns as of December 31
16.83% 15.01% 35.16% 124.19%
[Insert Chart]
1996 1997 1998 1999
In the periods shown in the chart, the Series' highest quarterly return was
59.05% (4th quarter of 1999) and its lowest quarterly return was -15.05% (3rd
quarter of 1998).
Average Annual Total Returns as of December 31, 1999
----------------------------------------------------
1 year Life of Series*
JNL/Janus Capital Growth Series 124.19% 44.09%
S&P MidCap 400 Index 14.70% 21.41%
The S&P 400 MidCap Index is a broad-based, unmanaged index. * The Series began
operations on May 15, 1995.
Shareholder Transaction Expenses (fees paid directly from your investment)
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fee None
Exchange Fee None
Expenses. The table below shows certain expenses you will incur as a Series
investor, either directly or indirectly.
--------------------------------------------------------------------------------
Annual Series Operating Expenses (expenses that are deducted from Series assets)
--------------------------------------------------------------------------------
Management/Administrative Fee 1.03%
--------------------------------------------------------------------------------
Distribution (12b-1) Fees 0.01%
--------------------------------------------------------------------------------
Other Expenses 0%
--------------------------------------------------------------------------------
Total Series Annual Operating Expenses 1.04%
--------------------------------------------------------------------------------
* As discussed under "Management of the Trust," the Trustees have adopted a
Brokerage Enhancement Plan (the "Plan") in accordance with the provisions of
Rule 12b-1 under the Investment Company Act of 1940. The Plan uses the available
brokerage commissions to promote the sale of shares of the Trust. While the
brokerage commission rates and amounts paid by the Trust are not expected to
increase as a result of the Distribution Plan, the staff of the Securities and
Exchange Commission has taken the position that commission amounts received
under the Distribution Plan should be reflected as distribution expenses of the
Series. The distribution fee noted is an estimate and therefore it is not
possible to determine with accuracy actual amounts that will be received by the
Series under the Plan.
Expense Example. This example is intended to help you compare the cost of
investing in the Series with the cost of investing in other mutual funds. Also,
this example does not reflect the expenses of the Qualified Plan. The table
below shows the expenses you would pay on a $10,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period. This
illustration is hypothetical and is not intended to be representative of past or
future performance of the Series. The example also assumes that the Series
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
--------------------------------------------------------------------------------
Expense Example
--------------------------------------------------------------------------------
1 Year $106
--------------------------------------------------------------------------------
3 Years $331
--------------------------------------------------------------------------------
5 Years $574
--------------------------------------------------------------------------------
10 Years $1,271
--------------------------------------------------------------------------------
Additional Information About the Other Investment Strategies, Other Investments
and Risks of the Series. 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 has earned the right to use the Chartered Financial Analyst
designation. 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 at least 65% in a diversified portfolio of common stocks of foreign
and domestic issuers. 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 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. The Series
may invest without limit 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 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. In
addition, foreign investing involves less publicly available
information and more volatile or less liquid markets.
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. Foreign accounting may be
less revealing than American accounting practices. Foreign
regulation may be inadequate or irregular. 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.
--------
* The JNL/Janus Global Equities Series (the "Series") has been closed to new
contract holders as of September 1, 2000. The Series will still be available to
existing contract holders, even if the contract holder does not have a current
allocation in the Series. The Series will also be available to both new and
existing contract holders as an underlying series of the JNL/S&P Conservative
Growth Series I, the JNL/S&P Moderate Growth Series I, the JNL/S&P Aggressive
Growth Series I, the JNL/S&P Very Aggressive Growth Series I, the JNL/S&P Equity
Growth Series I, the JNL/S&P Equity Aggressive Growth Series I, the JNL/S&P
Conservative Growth Series II, the JNL/S&P Moderate Growth Series II, the
JNL/S&P Aggressive Growth Series II, the JNL/S&P Very Aggressive Growth Series
II, the JNL/S&P Equity Growth Series II, the JNL/S&P Equity Aggressive Growth
Series II, the JNL/S&P Conservative Growth Series, the JNL/S&P Moderate Growth
Series and the JNL/S&P Aggressive Growth Series.
<PAGE>
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 Series sub-adviser must correctly predict
price movements, during the life of a derivative, of the
underlying asset in order to realize the desired results from
the investment. 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 price 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 bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns and shows how performance
has varied from year to year. The table shows the Series' annual returns and
compares them to a broad based index since these shares were first offered. 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 insurance contract. Those
charges, which are described in the variable insurance 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.
Annual Total Returns as of December 31
31.36% 19.12% 26.87% 64.58%
[Insert Chart]
1996 1997 1998 1999
In the periods shown in the chart, the Series' highest quarterly return was
43.03% (4th quarter of 1999) and its lowest quarterly return was -16.93% (3rd
quarter of 1998).
Average Annual Total Returns as of December 31, 1999
----------------------------------------------------
1 year Life of Series*
JNL/Janus Global Equities Series 64.58% 36.45%
Morgan Stanley Capital International World Index 23.56% 18.01%
The Morgan Stanley Capital International World Index is a broad-based, unmanaged
index. * The Series began operations on May 15, 1995.
Shareholder Transaction Expenses (fees paid directly from your investment)
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fee None
Exchange Fee None
Expenses. The table below shows certain expenses you will incur as a Series
investor, either directly or indirectly.
--------------------------------------------------------------------------------
Annual Series Operating Expenses (expenses that are deducted from Series assets)
--------------------------------------------------------------------------------
Management/Administrative Fee 1.06%
--------------------------------------------------------------------------------
Distribution (12b-1) Fees 0.02%
--------------------------------------------------------------------------------
Other Expenses 0%
--------------------------------------------------------------------------------
Total Series Annual Operating Expenses 1.08%
--------------------------------------------------------------------------------
* As discussed under "Management of the Trust," the Trustees have adopted a
Brokerage Enhancement Plan (the "Plan") in accordance with the provisions of
Rule 12b-1 under the Investment Company Act of 1940. The Plan uses the available
brokerage commissions to promote the sale of shares of the Trust. While the
brokerage commission rates and amounts paid by the Trust are not expected to
increase as a result of the Distribution Plan, the staff of the Securities and
Exchange Commission has taken the position that commission amounts received
under the Distribution Plan should be reflected as distribution expenses of the
Series. The distribution fee noted is an estimate and therefore it is not
possible to determine with accuracy actual amounts that will be received by the
Series under the Plan.
Expense Example. This example is intended to help you compare the cost of
investing in the Series with the cost of investing in other mutual funds. Also,
this example does not reflect the expenses of the Qualified Plan. The table
below shows the expenses you would pay on a $10,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period. This
illustration is hypothetical and is not intended to be representative of past or
future performance of the Series. The example also assumes that the Series
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
--------------------------------------------------------------------------------
Expense Example
--------------------------------------------------------------------------------
1 Year $110
--------------------------------------------------------------------------------
3 Years $343
--------------------------------------------------------------------------------
5 Years $595
--------------------------------------------------------------------------------
10 Years $1,317
--------------------------------------------------------------------------------
Additional Information About the Other Investment Strategies, Other Investments
and Risks of the Series. 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 has earned the
right to use the Chartered Financial Analyst designation. Ms. Hayes has had
responsibility for the day-to-day management of the Series since the inception
of the Series.
<PAGE>
JNL/Janus Growth & Income Series (formerly the Goldman Sachs/JNL Growth & Income
Series)
Investment Objective. The investment objectives of the JNL/Janus Growth & Income
Series are long-term capital growth and current income.
Principal Investment Strategies. The Series normally emphasizes investments in
common stocks. It will normally invest up to 75% of its assets in equity
securities selected primarily for their growth potential, and at least 25% of
its assets in securities the portfolio manager believes have income potential.
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. The sub-adviser may also consider
dividend-paying characteristics when selecting common stock. 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. Equity
securities may make up part of this income component if they currently pay
dividends or the portfolio manager believes they have potential for increasing
or commencing dividend payments. The Series may invest without limit 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. 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 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. In
addition, foreign investing involves less publicly available
information, more volatile or less liquid markets. 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. Foreign accounting may be less
revealing than American accounting practices. Foreign
regulation may be inadequate or irregular. 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 Derivatives risk. Investing in derivative instruments, such as
options, futures contracts, forward currency contracts,
indexed securities and asset-backed securities, involves
special risks. The Series sub-adviser must correctly predict
price movements, during the life of a derivative, of the
underlying asset in order to realize the desired results from
the investment. 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 price movements in the
rest of the portfolio. Growth investing risk. Growth companies
usually invest a high portion of earnings in their businesses,
and may lack the dividends of value stocks that can cushion
prices in a falling market. Also, earnings disappointments
often lead to sharp declines in prices because investors buy
growth stocks in anticipation of superior earnings growth.
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 and shows how performance
has varied from year to year. The table shows the Series' average annual returns
and compares them to a broad based index since these shares were first offered.
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 insurance contract.
Those charges, which are described in the variable insurance prospectus, will
reduce the Series' performance.
As of the effective date of this Prospectus, Janus Capital Corporation (Janus)
has replaced Goldman Sachs Asset Management as the sub-adviser to this Series.
In addition, certain investment policies, practices and strategies have been
changed to reflect the management style of Janus, the new sub-adviser. The
advisory fees have also been changed. Given these changes, the performance
information shown below is not indicative in any manner of how the Series will
perform in the future.
Annual Total Returns as of December 31
4.98%
[Insert Chart] (Results achieved by prior sub-adviser)
1999
In the period shown in the chart, the Series' highest quarterly return was 8.43%
(2nd quarter of 1999) and its lowest quarterly return was -11.92% (3rd quarter
of 1999).
Average Annual Total Returns as of December 31, 1999
----------------------------------------------------
1 year Life of Series*
JNL/Janus Growth & Income Series 4.98% -2.64%
S&P 500 Index 21.04% 21.78%
The S&P 500 Index is a broad-based, unmanaged index. *The Series began
operations on March 2, 1998.
Shareholder Transaction Expenses (fees paid directly from your investment)
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fee None
Exchange Fee None
Expenses. The table below shows certain expenses you will
incur as a Series investor, either directly or indirectly.
--------------------------------------------------------------------------------
Annual Series Operating Expenses (expenses that are deducted from Series assets)
--------------------------------------------------------------------------------
Management/Administrative Fee 1.03%
--------------------------------------------------------------------------------
Distribution (12b-1) Fees 0.04%
--------------------------------------------------------------------------------
Other Expenses 0%
--------------------------------------------------------------------------------
Total Series Annual Operating Expenses 1.07%
--------------------------------------------------------------------------------
* As discussed under "Management of the Trust," the Trustees have adopted a
Brokerage Enhancement Plan (the "Plan") in accordance with the provisions of
Rule 12b-1 under the Investment Company Act of 1940. The Plan uses the available
brokerage commissions to promote the sale of shares of the Trust. While the
brokerage commission rates and amounts paid by the Trust are not expected to
increase as a result of the Distribution Plan, the staff of the Securities and
Exchange Commission has taken the position that commission amounts received
under the Distribution Plan should be reflected as distribution expenses of the
Series. The distribution fee noted is an estimate and therefore it is not
possible to determine with accuracy actual amounts that will be received by the
Series under the Plan.
Expense Example. This example is intended to help you compare the cost of
investing in the Series with the cost of investing in other mutual funds. Also,
this example does not reflect the expenses of the Qualified Plan. The table
below shows the expenses you would pay on a $10,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period. This
illustration is hypothetical and is not intended to be representative of past or
future performance of the Series. The example also assumes that the Series
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
--------------------------------------------------------------------------------
Expense Example
--------------------------------------------------------------------------------
1 Year $109
--------------------------------------------------------------------------------
3 Years $340
--------------------------------------------------------------------------------
5 Years $590
--------------------------------------------------------------------------------
10 Years $1,306
--------------------------------------------------------------------------------
Comparable Performance.
Public Fund Performance Composite
The JNL/Janus Growth & Income Series has substantially similar investment
objectives, policies and strategies as certain mutual funds. Each of these
public mutual funds is managed by Janus Capital Corporation, the same
Sub-Adviser which manages the JNL/Janus Growth & Income Series.
The historical performance of a composite of these public mutual funds is shown
below. This is not the performance of the JNL/Janus Growth & Income Series and
the performance of the Series may differ. This performance data should not be
considered as an indication of future performance of the Series. The public
mutual fund performance figures shown below:
o reflect the deduction of the historical fees and expenses paid
by the public mutual funds and not those to be paid by the
Series
o do not reflect Contract fees or charges imposed by Jackson
National Life. Investors should refer to the separate account
prospectus for information describing the Contract fees and
charges. These fees and charges will have a detrimental effect
on Series performance.
The Series and their corresponding public mutual fund series are expected to
hold similar securities. However, their investment results are expected to
differ for the following reasons:
o differences in asset size and cash flow resulting from
purchases and redemptions of Series shares may result in
different security selections
o differences in the relative weightings of securities
o differences in the price paid for particular portfolio
holdings
o differences relating to certain tax matters
However, the differences cited do not alter the conclusion that the Funds have
substantially similar investment objectives, policies and strategies.
The chart below shows performance information derived from historical composite
performance of the public mutual funds. The inception date for the composite
shown is October 1991.
JANUS GROWTH & INCOME FUNDS COMPOSITE PERFORMANCE (INCLUDING MUTUAL FUNDS) FOR
PERIODS ENDED 12/31/99
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------
Annualized Returns
-------------------------------------------------------------------------------------------------------------
Janus Growth & Income S&P 500 Index
-------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1 Year 51.30 21.14
3 Years 40.07 27.66
5 Years 36.41 28.66
Since Inception 25.27 20.36
-------------------------------------------------------------------------------------------------------------
</TABLE>
*Inception October1991
The Growth & Income Composite includes the Janus Growth & Income Fund and Janus
Aspen Series Growth & Income Fund for which Janus Capital Corporation serves as
investment advisor. The composite performance was calculated according to the
requirements of the Association for Investment Management and Research. These
requirements differ from those required by the Securities and Exchange
Commission. Composite performance is presented net of all fees and reflects
reinvestment of dividends and capital gains.The fees deducted are less than the
fees charged by the Series. If the expenses of the Series had been deducted, the
performance results would have been lower. As of December 31, 1999, the Growth &
Income Composite had assets of $7,583.6 million, which represented 3.04% of
total assets under management. Accounts enter the composite upon their first
full quarter under management. The percentage of total assets managed is defined
as composite assets as a percentage of the total assets managed including mutual
fund company accounts under management. Performance figures are based upon
historical information and do not guarantee future results. Please see a
prospectus for more complete information regarding the Funds, including the
expenses associated with each portfolio. In addition, the manager responsible
for the historical performance record of the composite from inception to August
of 1997 is no longer with the firm. David Corkins is now the Portfolio Manager
for all Growth & Income Products. No changes were made with regard to the
investment philosophy or process of the Funds. Prospective clients should
recognize the limitations inherent in composites, and consider all information
presented by Janus regarding its investment management capabilities. The S&P 500
is an unmanaged index of common stock prices and includes reinvestment of
dividends and capital gains. They have been taken from published sources and
have not been audited. Composition of each separately managed account portfolio
may differ significantly from securities in the corresponding benchmark indices.
A complete list of Janus composites is available upon request. Please call
800-525-1068.
A Series' performance may be affected by risks specific to certain types of
investments, such as foreign securities, derivative investments, non-investment
grade debt securities, initial public offerings (IPOs) or companies with
relatively small market capitalizations. IPOs and other investment techniques
may have magnified performance impact on a Series with a small asset base. A
Series may not experience similar performance as its assets grow.
Additional Information About the Other Investment Strategies, Other Investments
and Risks of the Series. 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
Growth & Income Series is Janus Capital Corporation (Janus Capital), with
principal offices at 100 Fillmore Street, Denver, Colorado 80206. Janus Capital
providesinvestment advisory services to mutual funds and other institutional
accounts.
David Corkins is Portfolio Manager of the Series. He is also the portfolio
manager and Executive Vice President of Janus Growth and Income Fund and Janus
Aspen Growth and Income Portfolio. He also manages separate accounts in the
LargeCap Growth and Diversified Growth disciplines. Prior to joining Janus in
1995, Mr. Corkins was Chief Financial Officer of Chase U.S. Consumer Services,
Inc., a Chase Manhattan mortgage business. While at Chase, Mr. Corkins also
worked in consumer credit and mortgage issuance and analysis. Mr. Corkins
graduated cum laude from Dartmouth College with a bachelor's degree in English
and Russian, and earned an M.B.A. in finance with honors from Columbia
University. He has nine years of professional investment experience.
<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. At least 65% of its
total assets will be invested, under normal market conditions in fixed-income
securities.
The average duration of the Series typically ranges between three and six years,
although the maturities of the securities it holds may vary. For example, with a
duration of 5 years, there will be a 5% change in the value of the Series with a
1% movement in interest rates. 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. In
addition, foreign investing involves less publicly available
information and more volatile or less liquid markets.
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. Foreign accounting may be
less revealing than American accounting practices. Foreign
regulation may be inadequate or irregular. 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 Series sub-adviser must correctly predict
price movements, during the life of a derivative, of the
underlying asset in order to realize the desired results from
the investment. 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 price 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 bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns and shows how performance
has varied from year to year. The table shows the Series' annual returns and
compares them to a broad based index since these shares were first offered. 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 insurance contract. Those
charges, which are described in the variable insurance 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.
Annual Total Returns as of December 31
-0.26%
[Insert Chart]
1999
In the period shown in the chart, the Series' highest quarterly return was 1.00%
(3rd quarter of 1999) and its lowest quarterly return was -1.57% (2nd quarter of
1999).
Average Annual Total Returns as of December 31, 1999
----------------------------------------------------
1 year Life of Series*
JNL/PIMCO Total Return Bond Series -0.26% 2.92%
Lehman Brothers Aggregate Bond Index -0.82% 2.83%
The Lehman Brothers Aggregate Bond Index is a broad-based, unmanaged index. *
The Series began operations on March 2, 1998.
Shareholder Transaction Expenses (fees paid directly from your investment)
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fee None
Exchange Fee None
Expenses. The table below shows certain expenses you will incur as a Series
investor, either directly or indirectly.
--------------------------------------------------------------------------------
Annual Series Operating Expenses (expenses that deducted from Series assets)
--------------------------------------------------------------------------------
Management/Administrative Fee 0.80%
--------------------------------------------------------------------------------
Distribution (12b-1) Fees <0.01%
--------------------------------------------------------------------------------
Other Expenses 0%
--------------------------------------------------------------------------------
Total Series Annual Operating Expenses 0.80%
--------------------------------------------------------------------------------
* As discussed under "Management of the Trust," the Trustees have adopted a
Brokerage Enhancement Plan (the "Plan") in accordance with the provisions of
Rule 12b-1 under the Investment Company Act of 1940. The Plan uses the available
brokerage commissions to promote the sale of shares of the Trust. While the
brokerage commission rates and amounts paid by the Trust are not expected to
increase as a result of the Distribution Plan, the staff of the Securities and
Exchange Commission has taken the position that commission amounts received
under the Distribution Plan should be reflected as distribution expenses of the
Series. The distribution fee noted is an estimate and therefore it is not
possible to determine with accuracy actual amounts that will be received by the
Series under the Plan.
Expense Example. This example is intended to help you compare the cost of
investing in the Series with the cost of investing in other mutual funds. Also,
this example does not reflect the expenses of the Qualified Plan. The table
below shows the expenses you would pay on a $10,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period. This
illustration is hypothetical and is not intended to be representative of past or
future performance of the Series. The example also assumes that the Series
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
--------------------------------------------------------------------------------
Expense Example
--------------------------------------------------------------------------------
1 Year $82
--------------------------------------------------------------------------------
3 Years $255
--------------------------------------------------------------------------------
5 Years $444
--------------------------------------------------------------------------------
10 Years $990
--------------------------------------------------------------------------------
Additional Information About the Other 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-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 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 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 Growth investing risk. Growth companies usually invest a high
portion of earnings in their businesses, and may lack the
dividends of value stocks that can cushion prices in a falling
market. Also, earnings disappointments often lead to sharp
declines in prices because investors buy growth stocks in
anticipation of superior earnings growth.
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. In
addition, foreign investing involves less publicly available
information and more volatile or less liquid markets.
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. Foreign accounting may be
less revealing than American accounting practices. Foreign
regulation may be inadequate or irregular. 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 Derivatives risk. Investing in derivative instruments, such as
options, futures contracts, forward currency contracts,
indexed securities and asset-backed securities, involves
special risks. The Series sub-adviser must correctly predict
price movements, during the life of a derivative, of the
underlying asset in order to realize the desired results from
the investment. 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 price 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 bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns and shows how performance
has varied from year to year. The table shows the Series' 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 insurance contract. Those charges, which are described in the variable
insurance 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.
Annual Total Returns as of December 31
26.81% 21.88% 34.93% 29.41%
[Insert Chart]
1996 1997 1998 1999
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, 1999
----------------------------------------------------
1 year Life of Series*
JNL/Putnam Growth Series 29.41% 30.51%
S&P 500 Index 21.04% 26.95%
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.
Shareholder Transaction Expenses (fees paid directly from your investment)
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fee None
Exchange Fee None
Expenses. The table below shows certain expenses you will incur as a Series
investor, either directly or indirectly.
--------------------------------------------------------------------------------
Annual Series Operating Expenses (expenses that are deducted from Series assets)
--------------------------------------------------------------------------------
Management/Administrative Fee 0.97%
--------------------------------------------------------------------------------
Distribution (12b-1) Fees 0.01%
--------------------------------------------------------------------------------
Other Expenses 0%
--------------------------------------------------------------------------------
Total Series Annual Operating Expenses 0.98%
--------------------------------------------------------------------------------
* As discussed under "Management of the Trust," the Trustees have adopted a
Brokerage Enhancement Plan (the "Plan") in accordance with the provisions of
Rule 12b-1 under the Investment Company Act of 1940. The Plan uses the available
brokerage commissions to promote the sale of shares of the Trust. While the
brokerage commission rates and amounts paid by the Trust are not expected to
increase as a result of the Distribution Plan, the staff of the Securities and
Exchange Commission has taken the position that commission amounts received
under the Distribution Plan should be reflected as distribution expenses of the
Series. The distribution fee noted is an estimate and therefore it is not
possible to determine with accuracy actual amounts that will be received by the
Series under the Plan.
Expense Example. This example is intended to help you compare the cost of
investing in the Series with the cost of investing in other mutual funds. Also,
this example does not reflect the expenses of the Qualified Plan. The table
below shows the expenses you would pay on a $10,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period. This
illustration is hypothetical and is not intended to be representative of past or
future performance of the Series. The example also assumes that the Series
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
--------------------------------------------------------------------------------
Expense Example
--------------------------------------------------------------------------------
1 Year $100
--------------------------------------------------------------------------------
3 Years $312
--------------------------------------------------------------------------------
5 Years $542
--------------------------------------------------------------------------------
10 Years $1,201
--------------------------------------------------------------------------------
Additional Information About the Other Investment Strategies, Other Investments
and Risks of the Series. 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.
The Series is managed by the Core Growth Equity team at Putnam. The team is
headed by C. Beth Cotner, Managing Director and Chief Investment Officer of the
Group. Ms. Cotner joined Putnam in 1995 as Senior Portfolio Manager in the Core
Growth Equity Group. 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 International Equity Series (formerly the T. Rowe Price/JNL
International Equity Investment Series)
Investment Objective. The investment objective of the JNL/Putnam International
Equity Series is long-term growth of capital.
Principal Investment Strategies. The Series seeks to achieve its objective by
investing at least 65% in a diversified portfolio consisting primarily of common
stocks of non-U.S. companies. The Series invests in foreign securities that the
sub-adviser believes offer significant potential for long-term appreciation. The
Series normally has at least three countries represented in its portfolio,
including both developed and emerging markets.
Putnam's Core International Equity team seeks consistent, above-average relative
returns and below-average relative risk through a balance of country and sector
diversification and the selection of believed underpriced companies. The team's
process relies on both top-down macroeconomic and market analysis and bottom-up
fundamental company research.
Putnam selects stocks through a bottom up process, using its valuation approach
to identify significantly mispriced companies. Its expertise is in identifying
stocks selling for less than their real or relative worth regardless of the type
of company (i.e., growth, cyclical, or mature) or the current market
environment. Putnam begins by screening its international stock database of over
5,500 non-U.S. companies to identify those companies with a positive valuation
indicator (price to book relative to return on equity). Stocks passing this
initial valuation screen are then subjected to a rigorous process. The decision
to purchase a stock is based on the combined judgment of the Core International
Equity portfolio managers, and their decision must be unanimous. Putnam
typically visits all companies before a purchase decision is finalized.
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. In
addition, foreign investing involves less publicly available
information and more volatile or less liquid markets.
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. Foreign accounting may be
less revealing than American accounting practices. Foreign
regulation may be inadequate or irregular. 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.
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 Series sub-adviser must correctly predict
price movements, during the life of a derivative, of the
underlying asset in order to realize the desired results from
the investment. 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 price 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 bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns and shows how performance
has varied from year to year. The table shows the Series' annual returns and
compares them to a broad based index since these shares were first offered. 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 insurance contract. Those
charges, which are described in the variable insurance 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.
As of the effective date of this Prospectus, Putnam Investment Management, Inc.
has replaced Rowe-Price Fleming International, Inc. as the sub-adviser for the
Series. Therefore, the performance information shown below is not indicative in
any manner of how the Series will perform in the future.
Annual Total Returns as of December 31(Results achieved by prior sub-adviser)
--------------------------------------
13.91% 2.65% 14.43% 32.11%
[Insert Chart]
1996 1997 1998 1999
In the periods shown in the chart, the Series' highest quarterly return was
23.24% (4th quarter of 1999) and its lowest quarterly return was -13.48% (3rd
quarter of 1998).
Average Annual Total Returns as of December 31, 1999
----------------------------------------------------
1 year Life of Series*
JNL/Putnam International Equity Series 32.11% 14.78%
Morgan Stanley Europe and
Australasia, Far East Equity Index 25.27% 11.61%
The Morgan Stanley Europe and Australasia, Far East Equity Index is a
broad-based, unmanaged index. * The Series began operations on May 15, 1995.
Shareholder Transaction Expenses (fees paid directly from your investment)
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fee None
Exchange Fee None
Expenses. The table below shows certain expenses you will incur as a Series
investor, either directly or indirectly.
--------------------------------------------------------------------------------
Annual Series Operating Expenses (expenses that are deducted from Series assets)
--------------------------------------------------------------------------------
Management/Administrative Fee 1.18%
--------------------------------------------------------------------------------
Distribution (12b-1) Fees 0.05%
--------------------------------------------------------------------------------
Other Expenses 0%
--------------------------------------------------------------------------------
Total Series Annual Operating Expenses 1.23%
--------------------------------------------------------------------------------
* As discussed under "Management of the Trust," the Trustees have adopted a
Brokerage Enhancement Plan (the "Plan") in accordance with the provisions of
Rule 12b-1 under the Investment Company Act of 1940. The Plan uses the available
brokerage commissions to promote the sale of shares of the Trust. While the
brokerage commission rates and amounts paid by the Trust are not expected to
increase as a result of the Distribution Plan, the staff of the Securities and
Exchange Commission has taken the position that commission amounts received
under the Distribution Plan should be reflected as distribution expenses of the
Series. The distribution fee noted is an estimate and therefore it is not
possible to determine with accuracy actual amounts that will be received by the
Series under the Plan.
Expense Example. This example is intended to help you compare the cost of
investing in the Series with the cost of investing in other mutual funds. Also,
this example does not reflect the expenses of the Qualified Plan. The table
below shows the expenses you would pay on a $10,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period. This
illustration is hypothetical and is not intended to be representative of past or
future performance of the Series. The example also assumes that the Series
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
--------------------------------------------------------------------------------
Expense Example
--------------------------------------------------------------------------------
1 Year $125
--------------------------------------------------------------------------------
3 Years $390
--------------------------------------------------------------------------------
5 Years $676
--------------------------------------------------------------------------------
10 Years $1,489
--------------------------------------------------------------------------------
Additional Information About the Other Investment Strategies, Other Investments
and Risks of the Series. In addition to common stocks, the Series may also
invest in other types of securities, such as preferred stocks, convertible
securities, fixed-income 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 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/Putnam
International 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.
The Series is managed by the Core International Equity team at Putnam. The team
is headed by Omid Kamshad, Managing Director and Chief Investment Officer of the
group. Mr. Kamshad has been employed by Putnam since 1996. Prior to January
1996, Mr. Kamshad was employed at Lombard Odier International Portfolio
Management Limited and prior to April 1995, he was employed at Baring Asset
Management Company.
<PAGE>
JNL/Putnam Midcap Growth Series
Investment Objective. The investment objective of the JNL/Putnam Midcap Growth
Series is capital appreciation.
Principal Investment Strategies. The Series invests mainly in common stocks of
U.S. companies with a focus on growth stocks which are stocks whose earnings the
sub-adviser believes are likely to grow faster than the economy as a whole.
Growth stocks typically trade at higher multiples of current earnings than other
stocks. Therefore, the values of growth stocks may be more sensitive to changes
in current or expected earnings than the values of other stocks.
Growth stocks are issued by companies whose earnings the sub-adviser believes
are likely to grow faster than the economy as a whole. Growth in a company's
earnings may lead to an increase in the price of its stock. The Series invests
mainly in mid-cap companies.
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
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 small and mid-size
companies generally involves greater risks than investing in
larger more established ones.
o Growth investing risk. Growth companies usually invest a high
portion of earnings in their businesses, and may lack the
dividends of value stocks that can cushion prices in a falling
market. Also, earnings disappointments often lead to sharp
declines in prices because investors buy growth stocks in
anticipation of superior earnings growth. There is a risk that
the market as a whole may not favor the type of investments
which the Series makes.
In addition, the performance of the Series depends on the sub-adviser's ability
to effectively implement the investment strategies of the Series.
Performance. This Series will commence investment operations on or about the
date of this Prospectus. Therefore, a bar chart and table have not been included
for this Series.
Shareholder Transaction Expenses (fees paid directly from your investment)
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fee None
Exchange Fee None
Expenses. The table below shows certain expenses you will incur as a Series
investor, either directly or indirectly.
--------------------------------------------------------------------------------
Annual Series Operating Expenses (expenses that are deducted from Series assets)
--------------------------------------------------------------------------------
Management/Administrative Fee 1.05%
--------------------------------------------------------------------------------
Distribution (12b-1) Fees 0.08%
--------------------------------------------------------------------------------
Other Expenses 0%
--------------------------------------------------------------------------------
Total Series Annual Operating Expenses 1.13%
--------------------------------------------------------------------------------
* As discussed under "Management of the Trust," the Trustees have adopted a
Brokerage Enhancement Plan (the "Plan") in accordance with the provisions of
Rule 12b-1 under the Investment Company Act of 1940. The Plan uses the available
brokerage commissions to promote the sale of shares of the Trust. While the
brokerage commission rates and amounts paid by the Trust are not expected to
increase as a result of the Distribution Plan, the staff of the Securities and
Exchange Commission has taken the position that commission amounts received
under the Distribution Plan should be reflected as distribution expenses of the
Series. The distribution fee noted is an estimate and therefore it is not
possible to determine with accuracy actual amounts that will be received by the
Series under the Plan.
Expense Example. This example is intended to help you compare the cost of
investing in the Series with the cost of investing in other mutual funds. Also,
this example does not reflect the expenses of the Qualified Plan. The table
below shows the expenses you would pay on a $10,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period. This
illustration is hypothetical and is not intended to be representative of past or
future performance of the Series. The example also assumes that the Series
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
--------------------------------------------------------------------------------
Expense Example
--------------------------------------------------------------------------------
1 Year $115
--------------------------------------------------------------------------------
3 Years $359
--------------------------------------------------------------------------------
5 Years $622
--------------------------------------------------------------------------------
10 Years $1,375
--------------------------------------------------------------------------------
COMPARABLE PERFORMANCE
Putnam Midcap Equity (S&P Midcap 400) Composite Returns
As of 12/31/1999
Private Account Performance Composite
The Putnam/JNL Midcap Series has substantially similar investment objectives,
policies and investment strategies as certain Private Accounts. Each of these
Private Accounts is managed by the Putnam Advisory Company Inc. of Putnam
Fiduciary Trust Company, affiliates of the Sub-Adviser which manages the
corresponding Series.
The historical performance of a composite of these Private Accounts is shown
below. This performance data should not be considered as an indication of future
performance of the Series. The Private Account performance figures shown below:
o do not reflect Contract fees or charges imposed by Jackson
National Life. Investors should refer to the separate account
prospectus for information describing the Contract fees and
charges. These fees and charges will have a detrimental effect
on Series performance.
The Series and their corresponding Private Account are expected to hold similar
securities. However, their investment results are expected to differ for the
following reasons:
o differences in asset size and cash flow resulting from
purchases and redemptions of Series shares may result in
different security selections
o differences in the relative weightings of securities
o differences in the price paid for particular portfolio
holdings
o differences relating to certain tax matters
o differences in that Private Accounts are not subject to
certain investment limitations, diversification requirements
and other restrictions imposed by federal tax and securities
laws.
However, the differences cited do not alter the conclusion that the Funds have
substantially similar investment objectives, policies and strategies.
The chart below shows performance information derived from historical composite
performance of Private Accounts. The inception date for the composite shown is
March 31, 1992.
<TABLE>
-------------------------------------------------------------------------------------------------------------
Putnam Composite S&P Midcap 400 Index
-------------------------------------------------------------------------------------------------------------
<S> <C> <C>
One Year 39.76% 14.72%
Three Years (annualized) 26.88% 21.82%
Five Years (annualized) 28.18% 23.05%
Since Inception (03/31/92) (annualized) 23.04% 17.48%
-------------------------------------------------------------------------------------------------------------
</TABLE>
1. Composition of Composite
The inception date for the Putnam Midcap Equity (S&P Midcap 400)
Composite was April 1, 1992. The composite is composed of all US
institutional tax-exempt accounts managed by Putnam in this investment
style. It does not include performance of retail funds, accounts for
taxable entities, accounts for non-US investors and accounts whose
investment guidelines differ in a material way from the standard
guidelines established by Putnam for its Midcap Equity (S&P Midcap 400)
accounts. Since tax exempt institutional accounts typically do not need
to manage subscriptions and redemptions on a daily basis, performance
will vary from that of a mutual fund investing in the same investment
style.
Composite returns reflect the deduction of all expenses. The fees
deducted are the same as the highest fees charged by the Series.
Accounts are included no later than the beginning of the first calendar
quarter following three months from the date of funding, and are
excluded as of the last full calendar month under management or such
prior date Putnam receives notice of termination and begins managing
the account in a manner different from other accounts in the composite.
2. Calculation of Composite; Index Disclosure
The investment performance of an individual account within a composite
is calculated monthly using a time-weighted, rate-of-return calculation
method. The investment performance of a composite is calculated monthly
by summing the size-weighted return for that month of the individual
accounts that make up the composite for the month in question. The
investment performance of a composite over periods longer than a month
is calculated by linking its monthly rates of return. The composite's
benchmark is the S&P Midcap 400 Index. Performance calculations for
Putnam accounts and comparative indices reflect changes in value and
reinvestment of all distributions. Putnam portfolios are actively
managed using specified strategies, while the indices are unmanaged and
may contain securities different from those included in Putnam
portfolios.
3. AIMR Verification
The Putnam Midcap Equity (S&P Midcap 400) Composite has been Level II
verified by Arthur Andersen LLP for the calendar years 1993, 1994,
1995, 1996, and 1997. A list of Putnam's composites and auditors'
reports is available upon request. The AIMR requirements differ than
the requirements of the Securities and Exchange Commission.
4. Past Performance
Past performance is not necessarily indicative of future performance.
No assurance can be given as to future performance.
A Series' performance may be affected by risks specific to certain types of
investments, such as foreign securities, derivative investments, non-investment
grade debt securities, initial public offerings (IPOs) or companies with
relatively small market capitalizations. IPOs and other investment techniques
may have magnified performance impact on a Series with a small asset base. A
Series may not experience similar performance as its assets grow.
Additional Information About the Other Investment Strategies, Other Investments
and Risks of the Series. The Series may also invest in securities of foreign
issuers which involve certain special risks. These risks include, among others,
adverse fluctuations in foreign currency values as well as adverse political,
social and economic developments affecting a foreign country. In addition,
foreign investing involves less publicly available information and more volatile
or less liquid markets. 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. Foreign accounting may be less
revealing than American accounting practices. Foreign regulation may be
inadequate or irregular. 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.
The Series may buy and sell investments relatively often, which involves higher
brokerage commissions and other expenses.
In addition to the main investment strategies described above, the Series may
make other investments, such as investments in preferred stocks, convertible
securities, debt instruments and derivatives, which may be subject to other
risks, as described in the SAI.
At times the sub-adviser may judge that market conditions make pursuing the
Series' usual investment strategies inconsistent with the best interests of the
Series' shareholders. The sub-adviser then may temporarily use alternative
strategies that are mainly designed to limit losses. However, the sub-adviser
may choose not to use these strategies for a variety of reasons, even in very
volatile market conditions. These strategies may cause the Series to miss out on
investment opportunities, and may prevent the Series from achieving its goal.
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
Midcap 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.
The Series is managed by the Midcap Equity Growth team at Putnam. The team is
headed by Eric M. Wetlaufer, Managing Director and Chief Investment Officer for
the group. Mr. Welaufer has been with Putnam since 1997. Prior to 1997 Mr.
Wetlaufer was with Cadence Capital Management.
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. At least 65% of its total assets will be
invested, under normal market conditions, in equity securities. 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.
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.
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. In
addition, foreign investing involves less publicly available
information and more volatile or less liquid markets.
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. Foreign accounting may be
less revealing than American accounting practices. Foreign
regulation may be inadequate or irregular. Owning foreign
securities could cause the Series' performance to fluctuate
more than if it held only U.S. securities.
o Value investing risk. With a value approach, there is also the
risk that stocks may remain undervalued during a given period.
This may happen because value stocks as a category lose favor
with investors compared to growth stocks or because the
manager failed to anticipate which stocks or industries would
benefit from changing market or economic conditions.
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 and shows how performance
has varied from year to year. The table shows the Series' annual returns and
compares them to a broad based index since these shares were first offered. 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 insurance contract. Those
charges, which are described in the variable insurance 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.
Annual Total Returns as of December 31
24.33% 21.82% 12.48% -1.04%
[Insert Chart]
1996 1997 1998 1999
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 -11.73% (3rd
quarter of 1999).
Average Annual Total Returns as of December 31, 1999
----------------------------------------------------
1 year Life of Series*
JNL/Putnam Value Equity Series -1.04% 16.96%
S&P 500 Index 21.04% 26.95%
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.
Shareholder Transaction Expenses (fees paid directly from your investment)
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fee None
Exchange Fee None
Expenses. The table below shows certain expenses you will incur as a Series
investor, either directly or indirectly.
--------------------------------------------------------------------------------
Annual Series Operating Expenses (expenses that are deducted from Series assets)
--------------------------------------------------------------------------------
Management/Administrative Fee 0.98%
--------------------------------------------------------------------------------
Distribution (12b-1) Fees 0.02%
--------------------------------------------------------------------------------
Other Expenses 0%
--------------------------------------------------------------------------------
Total Series Annual Operating Expenses 1.00%
--------------------------------------------------------------------------------
* As discussed under "Management of the Trust," the Trustees have adopted a
Brokerage Enhancement Plan (the "Plan") in accordance with the provisions of
Rule 12b-1 under the Investment Company Act of 1940. The Plan uses the available
brokerage commissions to promote the sale of shares of the Trust. While the
brokerage commission rates and amounts paid by the Trust are not expected to
increase as a result of the Distribution Plan, the staff of the Securities and
Exchange Commission has taken the position that commission amounts received
under the Distribution Plan should be reflected as distribution expenses of the
Series. The distribution fee noted is an estimate and therefore it is not
possible to determine with accuracy actual amounts that will be received by the
Series under the Plan.
Expense Example. This example is intended to help you compare the cost of
investing in the Series with the cost of investing in other mutual funds. Also,
this example does not reflect the expenses of the Qualified Plan. The table
below shows the expenses you would pay on a $10,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period. This
illustration is hypothetical and is not intended to be representative of past or
future performance of the Series. The example also assumes that the Series
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
--------------------------------------------------------------------------------
Expense Example
--------------------------------------------------------------------------------
1 Year $102
--------------------------------------------------------------------------------
3 Years $318
--------------------------------------------------------------------------------
5 Years $552
--------------------------------------------------------------------------------
10 Years $1,225
--------------------------------------------------------------------------------
Additional Information About the Other Investment Strategies, Other Investments
and Risks of the Series. 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.The Series is managed by the Large Cap Value team at
Putnam. The team is headed by Deborah F. Kuenstner, CFA, Managing Director and
Chief Investment Officer of the group. In this role, she heads the team managing
large-cap value equity portfolios for retail and institutional clients. Ms.
Kuenstner joined Putnam in 1997 as Senior Vice President and Senior Portfolio
Manager in the International Core and Value Equity Group. In 1998, she was
promoted to Chief Investment Officer of the International Value Equities team. A
Chartered Financial Analyst, Ms. Kuenster has 20 years of investment experience.
Before joining Putnam, Ms. Kuenster was a Senior Portfolio Manager of
International Equities from 1989 through 1997 at DuPont Pension Fund Investment.
<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/Alliance Growth Series,
JNL/Eagle Core Equity Series, JNL/Eagle SmallCap Equity Series, JNL/Janus
Aggressive Growth Series, JNL/Janus Balanced Series, JNL/Janus Capital Growth
Series, JNL/Janus Global Equities Series, JNL/Putnam Growth Series, JNL/Putnam
International Equity Series, JNL/Putnam Value Equity Series, JNL/Putnam Midcap
Growth 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 Mid-Cap Growth Series,
and T. Rowe Price/JNL Value 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. In
addition, foreign investing involves less publicly available
information, more volatile or less liquid markets. 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. Foreign accounting may be less
revealing than American accounting practices. Foreign
regulation may be inadequate or irregular. 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 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." Under a
definition provided by the Investment Company Act of 1940, as
amended, non-diversified funds may invest in fewer assets, or
in larger proportions of the assets of single companies or
industries. 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.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns and shows how performance
has varied from year to year. The table shows the Series' annual returns and
compares them to a broad based index since these shares were first offered. 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 insurance contract. Those
charges, which are described in the variable insurance 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.
Annual Total Returns as of December 31
19.52%
[Insert Chart]
1999
In the period shown in the chart, the Series' highest quarterly return was
13.55% (4th quarter of 1999) and its lowest quarterly return was -2.99% (3rd
quarter of 1999).
Average Annual Total Returns as of December 31, 1999
----------------------------------------------------
1 year Life of Series*
JNL/S&P Conservative Growth Series I 19.52% 13.85%
S&P 500 Index/Lehman Bond Aggregate Index 12.30% 13.16%
S&P 500 Index 21.05% 19.06%
The S&P 500 Index and the Lehman Bond Aggregate Index are broad-based, unmanaged
indexes. The total returns were calculated according to the following
weightings: the S&P 500 Index represents 60% of the equity investments and the
Lehman Bond Aggregate Index represents 40% of the fixed-income investments of
the Series.
* The Series began operations on April 9, 1998.
Shareholder Transaction Expenses (fees paid directly from your investment)
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fee None
Exchange Fee None
Expenses. The table below shows certain expenses you will incur as a Series
investor.
--------------------------------------------------------------------------------
Annual Series Operating Expenses (expenses that are deducted from Series assets)
--------------------------------------------------------------------------------
Management/Administrative Fee 0.20%
--------------------------------------------------------------------------------
Other Expenses 0%
--------------------------------------------------------------------------------
Total Series Annual Operating Expenses 0.20%
--------------------------------------------------------------------------------
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.
The total annual operating expenses for each JNL/S&P Series (including both the
annual operating expenses for the JNL/S&P Series and the annual operating
expenses for the underlying investment divisions) could range from .90% to
1.38%. The table below shows estimated total annual operating expenses for each
JNL/S&P Series based on the pro rata share of expenses that the JNL/S&P Series
would bear if they invested in a hypothetical mix of underlying investment
divisions. The adviser believes the expenses shown below to be a likely
approximation of the expenses the JNL/S&P Series will incur based on the actual
mix of underlying investment divisions. The expenses shown below include both
the annual operating expenses for the JNL/S&P Series and the annual operating
expenses for the underlying investment divisions. The actual expenses of each
JNL/S&P Series will be based on the actual mix of underlying investment
divisions in which it invests. The actual expenses may be greater or less than
those shown.
JNL/S&P Conservative Growth....................................1.13%
Expense Example. This example is intended to help you compare the cost of
investing in the Series with the cost of investing in other mutual funds. Also,
this example does not reflect the expenses of the Qualified Plan. The table
below shows the expenses you would pay on a $10,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period. This
illustration is hypothetical and is not intended to be representative of past or
future performance of the Series. The example also assumes that the Series
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
--------------------------------------------------------------------------------
Expense Example
--------------------------------------------------------------------------------
1 Year $20
--------------------------------------------------------------------------------
3 Years $64
--------------------------------------------------------------------------------
5 Years $113
--------------------------------------------------------------------------------
10 Years $255
--------------------------------------------------------------------------------
Additional Information About the Other 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 Robert D. Jaramillo 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 Financial
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. Jaramillo has
been a senior investment officer with the Quantitative Services department of
Standard & Poor's Financial Information Services since May 1999. Since joining
Standard & Poor's in May 1998, Mr. Jaramillo has provided analytical support for
Standard & Poor's mutual fund advisory products. Prior to 1998, Mr. Jaramillo
worked as an analyst for The Boston Company Asset Management, Inc. Mr. Jaramillo
has had responsibility for the day-to-day management of the Series since August
2000.
<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/Alliance Growth Series, JNL/Eagle
Core Equity Series, JNL/Eagle SmallCap Equity Series, JNL/Janus Aggressive
Growth Series, JNL/Janus Balanced Series, JNL/Janus Capital Growth Series,
JNL/Janus Global Equities Series, JNL/Putnam Growth Series, JNL/Putnam
International Equity Series, JNL/Putnam Value Equity Series, JNL/Putnam Midcap
Growth 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 Mid-Cap Growth Series,
and T. Rowe Price/JNL Value 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. In
addition, foreign investing involves less publicly available
information and more volatile or less liquid markets.
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. Foreign accounting may be
less revealing than American accounting practices. Foreign
regulation may be inadequate or irregular. 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 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." Under a
definition provided by the Investment Company Act of 1940, as
amended, non-diversified funds may invest in fewer assets, or
in larger proportions of the assets of single companies or
industries. 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.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns and shows how performance
has varied from year to year. The table shows the Series' annual returns and
compares them to a broad based index since these shares were first offered. 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 insurance contract. Those
charges, which are described in the variable insurance 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.
Annual Total Returns as of December 31
26.74%
[Insert Chart]
1999
In the period shown in the chart, the Series' highest quarterly return was
17.87% (4th quarter of 1999) and its lowest quarterly return was -3.54% (3rd
quarter of 1999).
Average Annual Total Returns as of December 31, 1999
----------------------------------------------------
1 year Life of Series*
JNL/S&P Moderate Growth Series I 26.74% 18.75%
S&P 500 Index/Lehman Bond Aggregate Index 15.58% 15.38%
S&P 500 Index 21.05% 19.06%
The S&P 500 Index and the Lehman Bond Aggregate Index are broad-based, unmanaged
indexes. The total returns were calculated according to the following
weightings: the S&P 500 Index represents 75% of the equity investments and the
Lehman Bond Aggregate Index represents 25% of the fixed-income investments of
the Series.
* The Series began operations on April 8, 1998.
Shareholder Transaction Expenses (fees paid directly from your investment)
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fee None
Exchange Fee None
Expenses. The table below shows certain expenses you will incur as a Series
investor.
--------------------------------------------------------------------------------
Annual Series Operating Expenses (expenses that are deducted from Series assets)
--------------------------------------------------------------------------------
Management/Administrative Fee 0.20%
--------------------------------------------------------------------------------
Other Expenses 0%
--------------------------------------------------------------------------------
Total Series Annual Operating Expenses 0.20%
--------------------------------------------------------------------------------
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.
The total annual operating expenses for each JNL/S&P Series (including both the
annual operating expenses for the JNL/S&P Series and the annual operating
expenses for the underlying investment divisions) could range from .90% to
1.38%. The table below shows estimated total annual operating expenses for each
JNL/S&P Series based on the pro rata share of expenses that the JNL/S&P Series
would bear if they invested in a hypothetical mix of underlying investment
divisions. The adviser believes the expenses shown below to be a likely
approximation of the expenses the JNL/S&P Series will incur based on the actual
mix of underlying investment divisions. The expenses shown below include both
the annual operating expenses for the JNL/S&P Series and the annual operating
expenses for the underlying investment divisions. The actual expenses of each
JNL/S&P Series will be based on the actual mix of underlying investment
divisions in which it invests. The actual expenses may be greater or less than
those shown.
JNL/S&P Moderate Growth Series I..............................1.15%
Expense Example. This example is intended to help you compare the cost of
investing in the Series with the cost of investing in other mutual funds. Also,
this example does not reflect the expenses of the Qualified Plan. The table
below shows the expenses you would pay on a $10,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period. This
illustration is hypothetical and is not intended to be representative of past or
future performance of the Series. The example also assumes that the Series
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
--------------------------------------------------------------------------------
Expense Example
--------------------------------------------------------------------------------
1 Year $20
--------------------------------------------------------------------------------
3 Years $64
--------------------------------------------------------------------------------
5 Years $113
--------------------------------------------------------------------------------
10 Years $255
--------------------------------------------------------------------------------
Additional Information About theOther 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 Robert D. Jaramillo 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 Financial
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. Jaramillo has
been a senior investment officer with the Quantitative Services department of
Standard & Poor's Financial Information Services since May 1999. Since joining
Standard & Poor's in May 1998, Mr. Jaramillo has provided analytical support for
Standard & Poor's mutual fund advisory products. Prior to 1998, Mr. Jaramillo
worked as an analyst for The Boston Company Asset Management, Inc. Mr. Jaramillo
has had responsibility for the day-to-day management of the Series since August
2000.
<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/Alliance Growth Series,
JNL/Eagle Core Equity Series, JNL/Eagle SmallCap Equity Series, JNL/Janus
Aggressive Growth Series, JNL/Janus Balanced Series, JNL/Janus Capital Growth
Series, JNL/Janus Global Equities Series, JNL/Putnam Growth Series, JNL/Putnam
International Equity Series, JNL/Putnam Value Equity Series, JNL/Putnam Midcap
Growth 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 Mid-Cap Growth Series,
and T. Rowe Price/JNL Value 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.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 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. In
addition, foreign investing involves less publicly available
information and more volatile or less liquid markets.
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. Foreign accounting may be
less revealing than American accounting practices. Foreign
regulation may be inadequate or irregular. 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." Under a
definition provided by the Investment Company Act of 1940, as
amended, non-diversified funds may invest in fewer assets, or
in larger proportions of the assets of single companies or
industries. 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.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns and shows how performance
has varied from year to year. The table shows the Series' annual returns and
compares them to a broad based index since these shares were first offered. 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 insurance contract. Those
charges, which are described in the variable insurance 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.
Annual Total Returns as of December 31
35.38%
[Insert Chart]
1999
In the period shown in the chart, the Series' highest quarterly return was
22.84% (4th quarter of 1999) and its lowest quarterly return was -3.85% (3rd
quarter of 1999).
Average Annual Total Returns as of December 31, 1999
----------------------------------------------------
1 year Life of Series*
JNL/S&P Aggressive Growth Series I 35.38% 25.02%
S&P 500 Index/Lehman Bond Aggregate Index 18.86% 17.59%
S&P 500 Index 21.05% 19.06%
The S&P 500 Index and the Lehman Bond Aggregate Index are broad-based, unmanaged
indexes. . The total returns were calculated according to the following
weightings: the S&P 500 Index represents 90% of the equity investments and the
Lehman Bond Aggregate Index represents 10% of the fixed-income investments of
the Series.
* The Series began operations on April 8, 1998.
Shareholder Transaction Expenses (fees paid directly from your investment)
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fee None
Exchange Fee None
Expenses. The table below shows certain expenses you will incur as a Series
investor.
--------------------------------------------------------------------------------
Annual Series Operating Expenses (expenses that are deducted from Series assets)
--------------------------------------------------------------------------------
Management/Administrative Fee 0.20%
--------------------------------------------------------------------------------
Other Expenses 0%
--------------------------------------------------------------------------------
Total Series Annual Operating Expenses 0.20%
--------------------------------------------------------------------------------
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.
The total annual operating expenses for each JNL/S&P Series (including both the
annual operating expenses for the JNL/S&P Series and the annual operating
expenses for the underlying investment divisions) could range from .90% to
1.38%. The table below shows estimated total annual operating expenses for each
JNL/S&P Series based on the pro rata share of expenses that the JNL/S&P Series
would bear if they invested in a hypothetical mix of underlying investment
divisions. The adviser believes the expenses shown below to be a likely
approximation of the expenses the JNL/S&P Series will incur based on the actual
mix of underlying investment divisions. The expenses shown below include both
the annual operating expenses for the JNL/S&P Series and the annual operating
expenses for the underlying investment divisions. The actual expenses of each
JNL/S&P Series will be based on the actual mix of underlying investment
divisions in which it invests. The actual expenses may be greater or less than
those shown.
JNL/S&P Aggressive Growth Series I........................... 1.18%
Expense Example. This example is intended to help you compare the cost of
investing in the Series with the cost of investing in other mutual funds. Also,
this example does not reflect the expenses of the Qualified Plan. The table
below shows the expenses you would pay on a $10,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period. This
illustration is hypothetical and is not intended to be representative of past or
future performance of the Series. The example also assumes that the Series
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
--------------------------------------------------------------------------------
Expense Example
--------------------------------------------------------------------------------
1 Year $20
--------------------------------------------------------------------------------
3 Years $64
--------------------------------------------------------------------------------
5 Years $113
--------------------------------------------------------------------------------
10 Years $255
--------------------------------------------------------------------------------
Additional Information About the Other 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 Robert D. Jaramillo 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 Financial
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. Jaramillo has
been a senior investment officer with the Quantitative Services department of
Standard & Poor's Financial Information Services since May 1999. Since joining
Standard & Poor's in May 1998, Mr. Jaramillo has provided analytical support for
Standard & Poor's mutual fund advisory products. Prior to 1998, Mr. Jaramillo
worked as an analyst for The Boston Company Asset Management, Inc. Mr. Jaramillo
has had responsibility for the day-to-day management of the Series since August
2000.
<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/Alliance Growth Series,
JNL/Eagle Core Equity Series, JNL/Eagle SmallCap Equity Series, JNL/Janus
Aggressive Growth Series, JNL/Janus Balanced Series, JNL/Janus Capital Growth
Series, JNL/Janus Global Equities Series, JNL/Putnam Growth Series, JNL/Putnam
International Equity Series, JNL/Putnam Value Equity Series, JNL/Putnam Midcap
Growth 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 Mid-Cap Growth Series,
and T. Rowe Price/JNL Value 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 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. In
addition, foreign investing involves less publicly available
information and more volatile or less liquid markets.
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. Foreign accounting may be
less revealing than American accounting practices. Foreign
regulation may be inadequate or irregular. 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 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 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." Under a
definition provided by the Investment Company Act of 1940, as
amended, non-diversified funds may invest in fewer assets, or
in larger proportions of the assets of single companies or
industries. 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.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns and shows how performance
has varied from year to year. The table shows the Series' average annual returns
and compares them to a broad based index since these shares were first offered.
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 insurance contract.
Those charges, which are described in the variable insurance 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.
Annual Total Returns as of December 31
48.86%
[Insert Chart]
1999
In the period shown in the chart, the Series' highest quarterly return was
29.63% (4th quarter of 1999) and its lowest quarterly return was -2.43% (3rd
quarter of 1999).
Average Annual Total Returns as of December 31, 1999
----------------------------------------------------
1 year Life of Series*
JNL/S&P Very Aggressive Growth Series I 48.86% 33.84%
S&P 500 Index 21.05% 19.06%
The S&P 500 Index is a broad-based, unmanaged indexes. The S&P 500 Index
represents 100% of the equity investments of the Series.
* The Series began operations on April 1, 1998.
Shareholder Transaction Expenses (fees paid directly from your investment)
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fee None
Exchange Fee None
Expenses. The table below shows certain expenses you will incur as a Series
investor.
--------------------------------------------------------------------------------
Annual Series Operating Expenses (expenses that are deducted from Series assets)
--------------------------------------------------------------------------------
Management/Administrative Fee 0.20%
--------------------------------------------------------------------------------
Other Expenses 0%
--------------------------------------------------------------------------------
Total Series Annual Operating Expenses 0.20%
--------------------------------------------------------------------------------
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.
The total annual operating expenses for each JNL/S&P Series (including both the
annual operating expenses for the JNL/S&P Series and the annual operating
expenses for the underlying investment divisions) could range from .90% to
1.38%. The table below shows estimated total annual operating expenses for each
JNL/S&P Series based on the pro rata share of expenses that the JNL/S&P Series
would bear if they invested in a hypothetical mix of underlying investment
divisions. The adviser believes the expenses shown below to be a likely
approximation of the expenses the JNL/S&P Series will incur based on the actual
mix of underlying investment divisions. The expenses shown below include both
the annual operating expenses for the JNL/S&P Series and the annual operating
expenses for the underlying investment divisions. The actual expenses of each
JNL/S&P Series will be based on the actual mix of underlying investment
divisions in which it invests. The actual expenses may be greater or less than
those shown.
JNL/S&P Very Aggressive Growth Series I....................... 1.18%
Expense Example. This example is intended to help you compare the cost of
investing in the Series with the cost of investing in other mutual funds. Also,
this example does not reflect the expenses of the Qualified Plan. The table
below shows the expenses you would pay on a $10,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period. This
illustration is hypothetical and is not intended to be representative of past or
future performance of the Series. The example also assumes that the Series
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
--------------------------------------------------------------------------------
Expense Example
--------------------------------------------------------------------------------
1 Year $20
--------------------------------------------------------------------------------
3 Years $64
--------------------------------------------------------------------------------
5 Years $113
--------------------------------------------------------------------------------
10 Years $255
--------------------------------------------------------------------------------
Additional Information About the Other 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 Robert D. Jaramillo 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 Financial
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. Jaramillo has
been a senior investment officer with the Quantitative Services department of
Standard & Poor's Financial Information Services since May 1999. Since joining
Standard & Poor's in May 1998, Mr. Jaramillo has provided analytical support for
Standard & Poor's mutual fund advisory products. Prior to 1998, Mr. Jaramillo
worked as an analyst for The Boston Company Asset Management, Inc. Mr. Jaramillo
has had responsibility for the day-to-day management of the Series since August
2000.
<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/Alliance Growth Series, JNL/Eagle
Core Equity Series, JNL/Eagle SmallCap Equity Series, JNL/Janus Aggressive
Growth Series, JNL/Janus Balanced Series, JNL/Janus Capital Growth Series,
JNL/Janus Global Equities Series, JNL/Putnam Growth Series, JNL/Putnam
International Equity Series, JNL/Putnam Value Equity Series, JNL/Putnam Midcap
Growth 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 Mid-Cap Growth Series,
and T. Rowe Price/JNL Value 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 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. In
addition, foreign investing involves less publicly available
information and more volatile or less liquid markets.
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. Foreign accounting may be
less revealing than American accounting practices. Foreign
regulation may be inadequate or irregular. 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 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 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." Under a
definition provided by the Investment Company Act of 1940, as
amended, non-diversified funds may invest in fewer assets, or
in larger proportions of the assets of single companies or
industries. 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.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns and shows how performance
has varied from year to year. The table shows the annual returns and compares
them to a broad based index since these shares were first offered. 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 insurance contract. Those
charges, which are described in the variable insurance 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.
Annual Total Returns as of December 31
43.19%
[Insert Chart]
1999
In the period shown in the chart, the Series' highest quarterly return was
27.60% (4th quarter of 1999) and its lowest quarterly return was -3.40% (3rd
quarter of 1999).
Average Annual Total Returns as of December 31, 1999
----------------------------------------------------
1 year Life of Series*
JNL/S&P Equity Growth Series I 43.19% 27.72%
S&P 500 Index 21.05% 19.06%
The S&P 500 Index is a broad-based, unmanaged indexes. The S&P 500 Index
represents 100% of the equity investments of the Series.
* The Series began operations on April 13, 1998.
Shareholder Transaction Expenses (fees paid directly from your investment)
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fee None
Exchange Fee None
Expenses. The table below shows certain expenses you will incur as a Series
investor.
--------------------------------------------------------------------------------
Annual Series Operating Expenses (expenses that are deducted from Series assets)
--------------------------------------------------------------------------------
Management/Administrative Fee 0.20%
--------------------------------------------------------------------------------
Other Expenses 0%
--------------------------------------------------------------------------------
Total Series Annual Operating Expenses 0.20%
--------------------------------------------------------------------------------
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.
The total annual operating expenses for each JNL/S&P Series (including both the
annual operating expenses for the JNL/S&P Series and the annual operating
expenses for the underlying investment divisions) could range from .90% to
1.38%. The table below shows estimated total annual operating expenses for each
JNL/S&P Series based on the pro rata share of expenses that the JNL/S&P Series
would bear if they invested in a hypothetical mix of underlying investment
divisions. The adviser believes the expenses shown below to be a likely
approximation of the expenses the JNL/S&P Series will incur based on the actual
mix of underlying investment divisions. The expenses shown below include both
the annual operating expenses for the JNL/S&P Series and the annual operating
expenses for the underlying investment divisions. The actual expenses of each
JNL/S&P Series will be based on the actual mix of underlying investment
divisions in which it invests. The actual expenses may be greater or less than
those shown.
JNL/S&P Equity Growth Series I................................. 1.19%
Expense Example. This example is intended to help you compare the cost of
investing in the Series with the cost of investing in other mutual funds. Also,
this example does not reflect the expenses of the Qualified Plan. The table
below shows the expenses you would pay on a $10,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period. This
illustration is hypothetical and is not intended to be representative of past or
future performance of the Series. The example also assumes that the Series
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
--------------------------------------------------------------------------------
Expense Example
--------------------------------------------------------------------------------
1 Year $20
--------------------------------------------------------------------------------
3 Years $64
--------------------------------------------------------------------------------
5 Years $113
--------------------------------------------------------------------------------
10 Years $255
--------------------------------------------------------------------------------
Additional Information About the Other 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 Robert D. Jaramillo 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 Financial
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. Jaramillo has
been a senior investment officer with the Quantitative Services department of
Standard & Poor's Financial Information Services since May 1999. Since joining
Standard & Poor's in May 1998, Mr. Jaramillo has provided analytical support for
Standard & Poor's mutual fund advisory products. Prior to 1998, Mr. Jaramillo
worked as an analyst for The Boston Company Asset Management, Inc. Mr. Jaramillo
has had responsibility for the day-to-day management of the Series since August
2000.
<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/Alliance Growth Series,
JNL/Eagle Core Equity Series, JNL/Eagle SmallCap Equity Series, JNL/Janus
Aggressive Growth Series, JNL/Janus Balanced Series, JNL/Janus Capital Growth
Series, JNL/Janus Global Equities Series, JNL/Putnam Growth Series, JNL/Putnam
International Equity Series, JNL/Putnam Value Equity Series, JNL/Putnam Midcap
Growth 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 Mid-Cap Growth Series,
and T. Rowe Price/JNL Value 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 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. In
addition, foreign investing involves less publicly available
information and more volatile or less liquid markets.
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. Foreign accounting may be
less revealing than American accounting practices. Foreign
regulation may be inadequate or irregular. 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 markets 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, 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 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." Under a
definition provided by the Investment Company Act of 1940, as
amended, non-diversified funds may invest in fewer assets, or
in larger proportions of the assets of single companies or
industries. 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.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns and shows how performance
has varied from year to year. The table shows the Series' annual returns and
compares them to a broad based index since these shares were first offered. 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 insurance contract. Those
charges, which are described in the variable insurance 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.
Annual Total Returns as of December 31
45.25%
[Insert Chart]
1999
In the period shown in the chart, the Series' highest quarterly return was
28.62% (4th quarter of 1999) and its lowest quarterly return was -2.88% (3rd
quarter of 1999).
Average Annual Total Returns as of December 31, 1999
----------------------------------------------------
1 year Life of Series*
JNL/S&P Equity Aggressive Growth Series I 45.25% 29.67%
S&P 500 Index 21.05% 19.06%
The S&P 500 Index is a broad-based, unmanaged indexes. The S&P 500 Index
represents 100% of the equity investments of the Series. * The Series began
operations on April 15, 1998.
Shareholder Transaction Expenses (fees paid directly from your investment)
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fee None
Exchange Fee None
Expenses. The table below shows certain expenses you will incur as a Series
investor.
--------------------------------------------------------------------------------
Annual Series Operating Expenses (expenses that are deducted from Series assets)
--------------------------------------------------------------------------------
Management/Administrative Fee 0.20%
--------------------------------------------------------------------------------
Other Expenses 0%
--------------------------------------------------------------------------------
Total Series Annual Operating Expenses 0.20%
--------------------------------------------------------------------------------
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.
The total annual operating expenses for each JNL/S&P Series (including both the
annual operating expenses for the JNL/S&P Series and the annual operating
expenses for the underlying investment divisions) could range from .90% to
1.38%. The table below shows estimated total annual operating expenses for each
JNL/S&P Series based on the pro rata share of expenses that the JNL/S&P Series
would bear if they invested in a hypothetical mix of underlying investment
divisions. The adviser believes the expenses shown below to be a likely
approximation of the expenses the JNL/S&P Series will incur based on the actual
mix of underlying investment divisions. The expenses shown below include both
the annual operating expenses for the JNL/S&P Series and the annual operating
expenses for the underlying investment divisions. The actual expenses of each
JNL/S&P Series will be based on the actual mix of underlying investment
divisions in which it invests. The actual expenses may be greater or less than
those shown.
JNL/S&P Equity Aggressive Growth Series I..................... 1.18%
Expense Example. This example is intended to help you compare the cost of
investing in the Series with the cost of investing in other mutual funds. Also,
this example does not reflect the expenses of the Qualified Plan. The table
below shows the expenses you would pay on a $10,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period. This
illustration is hypothetical and is not intended to be representative of past or
future performance of the Series. The example also assumes that the Series
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
--------------------------------------------------------------------------------
Expense Example
--------------------------------------------------------------------------------
1 Year $20
--------------------------------------------------------------------------------
3 Years $64
--------------------------------------------------------------------------------
5 Years $113
--------------------------------------------------------------------------------
10 Years $255
--------------------------------------------------------------------------------
Additional Information About the Other 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 Robert D. Jaramillo 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 Financial
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. Jaramillo has
been a senior investment officer with the Quantitative Services department of
Standard & Poor's Financial Information Services since May 1999. Since joining
Standard & Poor's in May 1998, Mr. Jaramillo has provided analytical support for
Standard & Poor's mutual fund advisory products. Prior to 1998, Mr. Jaramillo
worked as an analyst for The Boston Company Asset Management, Inc. Mr. Jaramillo
has had responsibility for the day-to-day management of the Series since August
2000.
<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/Janus Growth & Income Series, JNL/PIMCO Total Return Bond
Series, JNL/Putnam Growth Series, JNL/Putnam International Equity Series,
JNL/Putnam Value Equity Series, JNL/Putnam Midcap Growth 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, 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. In
addition, foreign investing involves less publicly available
information and more volatile or less liquid markets.
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. Foreign accounting may be
less revealing than American accounting practices. Foreign
regulation may be inadequate or irregular. 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 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." Under a
definition provided by the Investment Company Act of 1940, as
amended, non-diversified funds may invest in fewer assets, or
in larger proportions of the assets of single companies or
industries. 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.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns and shows how performance
has varied from year to year. The table shows the Series' annual returns and
compares them to a broad based index since these shares were first offered. 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 insurance contract. Those
charges, which are described in the variable insurance 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.
Annual Total Returns as of December 31
16.14%
[Inert Chart]
1999
In the period shown in the chart, the Series' highest quarterly return was
12.71% (4th quarter of 1999) and its lowest quarterly return was -3.63% (3rd
quarter of 1999).
Average Annual Total Returns as of December 31, 1999
----------------------------------------------------
1 year Life of Series*
JNL/S&P Conservative Growth Series II 16.14% 6.14%
S&P 500 Index/ Lehman Bond Aggregate Index 13.39% 13.90%
S&P 500 Index 21.05% 19.06%
The S&P 500 Index and the Lehman Bond Aggregate Index are broad-based, unmanaged
indexes. The total returns were calculated according to the following
weightings: the S&P 500 Index represents 65% of the equity investments and the
Lehman Bond Aggregate Index represents 35% of the fixed-income investments of
the Series.
* The Series began operations on April 13, 1998.
Shareholder Transaction Expenses (fees paid directly from your investment)
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fee None
Exchange Fee None
Expenses. The table below shows certain expenses you will incur as a Series
investor.
--------------------------------------------------------------------------------
Annual Series Operating Expenses (expenses that are deducted from Series assets)
--------------------------------------------------------------------------------
Management/Administrative Fee 0.20%
--------------------------------------------------------------------------------
Other Expenses 0%
--------------------------------------------------------------------------------
Total Series Annual Operating Expenses 0.20%
--------------------------------------------------------------------------------
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.
The total annual operating expenses for each JNL/S&P Series (including both the
annual operating expenses for the JNL/S&P Series and the annual operating
expenses for the underlying investment divisions) could range from .90% to
1.38%. The table below shows estimated total annual operating expenses for each
JNL/S&P Series based on the pro rata share of expenses that the JNL/S&P Series
would bear if they invested in a hypothetical mix of underlying investment
divisions. The adviser believes the expenses shown below to be a likely
approximation of the expenses the JNL/S&P Series will incur based on the actual
mix of underlying investment divisions. The expenses shown below include both
the annual operating expenses for the JNL/S&P Series and the annual operating
expenses for the underlying investment divisions. The actual expenses of each
JNL/S&P Series will be based on the actual mix of underlying investment
divisions in which it invests. The actual expenses may be greater or less than
those shown.
JNL/S&P Conservative Growth Series II..........................1.15%
Expense Example. This example is intended to help you compare the cost of
investing in the Series with the cost of investing in other mutual funds. Also,
this example does not reflect the expenses of the Qualified Plan. The table
below shows the expenses you would pay on a $10,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period. This
illustration is hypothetical and is not intended to be representative of past or
future performance of the Series. The example also assumes that the Series
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
--------------------------------------------------------------------------------
Expense Example
--------------------------------------------------------------------------------
1 Year $20
--------------------------------------------------------------------------------
3 Years $64
--------------------------------------------------------------------------------
5 Years $113
--------------------------------------------------------------------------------
10 Years $255
--------------------------------------------------------------------------------
Additional Information About the Other 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 Robert D. Jaramillo 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 Financial
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. Jaramillo has
been a senior investment officer with the Quantitative Services department of
Standard & Poor's Financial Information Services since May 1999. Since joining
Standard & Poor's in May 1998, Mr. Jaramillo has provided analytical support for
Standard & Poor's mutual fund advisory products. Prior to 1998, Mr. Jaramillo
worked as an analyst for The Boston Company Asset Management, Inc. Mr. Jaramillo
has had responsibility for the day-to-day management of the Series since August
2000.
<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/Janus Growth & Income Series, JNL/PIMCO
Total Return Bond Series, JNL/Putnam Growth Series, JNL/Putnam International
Equity Series, JNL/Putnam Value Equity Series, JNL/Putnam Midcap Growth 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,
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. In
addition, foreign investing involves less publicly available
information and more volatile or less liquid markets.
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. Foreign accounting may be
less revealing than American accounting practices. Foreign
regulation may be inadequate or irregular. 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 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." Under a
definition provided by the Investment Company Act of 1940, as
amended, non-diversified funds may invest in fewer asset, or
in larger proportions of the assets of single companies or
industries. 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.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns and shows how performance
has varied from year to year. The table shows the Series' annual returns and
compares them to a broad based index since these shares were first offered. 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 insurance contract. Those
charges, which are described in the variable insurance 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.
Annual Total Returns as of December 31
22.77%
[Insert Chart]
1999
In the period shown in the chart, the Series' highest quarterly return was
15.43% (4th quarter of 1999) and its lowest quarterly return was -4.14% (3rd
quarter of 1999).
Average Annual Total Returns as of December 31, 1999
----------------------------------------------------
1 year Life of Series*
JNL/S&P Moderate Growth Series II 22.77% 14.10%
S&P 500 Index/ Lehman Bond Aggregate Index 15.58% 15.38%
S&P 500 Index 21.05% 19.06%
The S&P 500 Index and the Lehman Bond Aggregate Index are broad-based, unmanaged
indexes. The total returns were calculated according to the following
weightings: the S&P 500 Index represents 75% of the equity investments and the
Lehman Bond Aggregate Index represents 25% of the fixed-income investments of
the Series.
* The Series began operations on April 13, 1998.
Shareholder Transaction Expenses (fees paid directly from your investment)
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fee None
Exchange Fee None
Expenses. The table below shows certain expenses you will incur as a Series
investor.
--------------------------------------------------------------------------------
Annual Series Operating Expenses (expenses that are deducted from Series assets)
--------------------------------------------------------------------------------
Management/Administrative Fee 0.20%
--------------------------------------------------------------------------------
Other Expenses 0%
--------------------------------------------------------------------------------
Total Series Annual Operating Expenses 0.20%
--------------------------------------------------------------------------------
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.
The total annual operating expenses for each JNL/S&P Series (including both the
annual operating expenses for the JNL/S&P Series and the annual operating
expenses for the underlying investment divisions) could range from .90% to
1.38%. The table below shows estimated total annual operating expenses for each
JNL/S&P Series based on the pro rata share of expenses that the JNL/S&P Series
would bear if they invested in a hypothetical mix of underlying investment
divisions. The adviser believes the expenses shown below to be a likely
approximation of the expenses the JNL/S&P Series will incur based on the actual
mix of underlying investment divisions. The expenses shown below include both
the annual operating expenses for the JNL/S&P Series and the annual operating
expenses for the underlying investment divisions. The actual expenses of each
JNL/S&P Series will be based on the actual mix of underlying investment
divisions in which it invests. The actual expenses may be greater or less than
those shown.
JNL/S&P Moderate Growth Series II............................ 1.174%
Expense Example. This example is intended to help you compare the cost of
investing in the Series with the cost of investing in other mutual funds. Also,
this example does not reflect the expenses of the Qualified Plan. The table
below shows the expenses you would pay on a $10,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period. This
illustration is hypothetical and is not intended to be representative of past or
future performance of the Series. The example also assumes that the Series
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
--------------------------------------------------------------------------------
Expense Example
--------------------------------------------------------------------------------
1 Year $20
--------------------------------------------------------------------------------
3 Years $64
--------------------------------------------------------------------------------
5 Years $113
--------------------------------------------------------------------------------
10 Years $255
--------------------------------------------------------------------------------
Additional Information About the Other 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 Robert D. Jaramillo 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 Financial
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. Jaramillo has
been a senior investment officer with the Quantitative Services department of
Standard & Poor's Financial Information Services since May 1999. Since joining
Standard & Poor's in May 1998, Mr. Jaramillo has provided analytical support for
Standard & Poor's mutual fund advisory products. Prior to 1998, Mr. Jaramillo
worked as an analyst for The Boston Company Asset Management, Inc. Mr. Jaramillo
has had responsibility for the day-to-day management of the Series since August
2000.
<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/Janus Growth & Income Series, JNL/PIMCO Total Return Bond
Series, JNL/Putnam Growth Series, JNL/Putnam International Equity Series,
JNL/Putnam Value Equity Series, JNL/Putnam Midcap Growth 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, 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. In
addition, foreign investing involves less publicly available
information and more volatile or less liquid markets.
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. Foreign accounting may be
less revealing than American accounting practices. Foreign
regulation may be inadequate or irregular. 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 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." Under a
definition provided by the Investment Company Act of 1940, as
amended, non-diversified funds may invest in fewer assets, or
in larger proportions of the assets of single companies or
industries. 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.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns and shows how performance
has varied from year to year. The table shows the Series' annual returns and
compares them to a broad based index since these shares were first offered. 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 insurance contract. Those
charges, which are described in the variable insurance 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.
Annual Total Returns as of December 31
28.66%
[Insert Chart]
1999
In the period shown in the chart, the Series' highest quarterly return was
20.17% (4th quarter of 1999) and its lowest quarterly return was -4.69% (3rd
quarter of 1999).
Average Annual Total Returns as of December 31, 1999
----------------------------------------------------
1 year Life of Series*
JNL/S&P Aggressive Growth Series II 28.66% 16.11%
S&P 500 Index/ Lehman Bond Aggregate Index 18.86% 17.59%
S&P 500 Index 21.05% 19.06%
The S&P 500 Index and the Lehman Bond Aggregate Index are broad-based, unmanaged
indexes. The total returns were calculated according to the following
weightings: the S&P 500 Index represents 90% of the equity investments and the
Lehman Bond Aggregate Index represents 10% of the fixed-income investments of
the Series.
*The Series began operations on April 13, 1998.
Shareholder Transaction Expenses (fees paid directly from your investment)
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fee None
Exchange Fee None
Expenses. The table below shows certain expenses you will incur as a Series
investor.
--------------------------------------------------------------------------------
Annual Series Operating Expenses (expenses that are deducted from Series assets)
--------------------------------------------------------------------------------
Management/Administrative Fee 0.20%
--------------------------------------------------------------------------------
Other Expenses 0%
--------------------------------------------------------------------------------
Total Series Annual Operating Expenses 0.20%
--------------------------------------------------------------------------------
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.
The total annual operating expenses for each JNL/S&P Series (including both the
annual operating expenses for the JNL/S&P Series and the annual operating
expenses for the underlying investment divisions) could range from .90% to
1.38%. The table below shows estimated total annual operating expenses for each
JNL/S&P Series based on the pro rata share of expenses that the JNL/S&P Series
would bear if they invested in a hypothetical mix of underlying investment
divisions. The adviser believes the expenses shown below to be a likely
approximation of the expenses the JNL/S&P Series will incur based on the actual
mix of underlying investment divisions. The expenses shown below include both
the annual operating expenses for the JNL/S&P Series and the annual operating
expenses for the underlying investment divisions. The actual expenses of each
JNL/S&P Series will be based on the actual mix of underlying investment
divisions in which it invests. The actual expenses may be greater or less than
those shown.
JNL/S&P Aggressive Growth Series II........................... 1.21%
Expense Example. This example is intended to help you compare the cost of
investing in the Series with the cost of investing in other mutual funds. Also,
this example does not reflect the expenses of the Qualified Plan. The table
below shows the expenses you would pay on a $10,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period. This
illustration is hypothetical and is not intended to be representative of past or
future performance of the Series. The example also assumes that the Series
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
--------------------------------------------------------------------------------
Expense Example
--------------------------------------------------------------------------------
1 Year $20
--------------------------------------------------------------------------------
3 Years $64
--------------------------------------------------------------------------------
5 Years $113
--------------------------------------------------------------------------------
10 Years $255
--------------------------------------------------------------------------------
Additional Information About the Other 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 Robert D. Jaramillo 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 Financial
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. Jaramillo has
been a senior investment officer with the Quantitative Services department of
Standard & Poor's Financial Information Services since May 1999. Since joining
Standard & Poor's in May 1998, Mr. Jaramillo has provided analytical support for
Standard & Poor's mutual fund advisory products. Prior to 1998, Mr. Jaramillo
worked as an analyst for The Boston Company Asset Management, Inc. Mr. Jaramillo
has had responsibility for the day-to-day management of the Series since August
2000.
<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/Janus Growth & Income Series, JNL/PIMCO Total Return Bond
Series, JNL/Putnam Growth Series, JNL/Putnam International Equity Series,
JNL/Putnam Value Equity Series, JNL/Putnam Midcap Growth 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, 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 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. In
addition, foreign investing involves less publicly available
information and more volatile or less liquid markets.
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. Foreign accounting may be
less revealing than American accounting practices. Foreign
regulation may be inadequate or irregular. 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 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 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." Under a
definition provided by the Investment Company Act of 1940, as
amended, non-diversified funds may invest in fewer assets, or
in larger proportions of the assets of single companies or
industries. 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.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns and shows how performance
has varied from year to year. The table shows the Series' annual returns and
compares them to a broad based index since these shares were first offered. 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 insurance contract. Those
charges, which are described in the variable insurance 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.
Annual Total Returns as of December 31
42.42%
[Insert Chart]
1999
In the period shown in the chart, the Series' highest quarterly return was
26.60% (4th quarter of 1999) and its lowest quarterly return was -2.80% (3rd
quarter of 1999).
Average Annual Total Returns as of December 31, 1999
----------------------------------------------------
1 year Life of Series*
JNL/S&P Very Aggressive Growth Series II 42.42% 28.44%
S&P 500 Index 21.05% 19.06%
The S&P 500 Index is a broad-based, unmanaged indexes. The S&P 500 Index
represents 100% of the equity investments of the Series.
* The Series began operations on April 13, 1998.
Shareholder Transaction Expenses (fees paid directly from your investment)
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fee None
Exchange Fee None
Expenses. The table below shows certain expenses you will incur as a Series
investor.
--------------------------------------------------------------------------------
Annual Series Operating Expenses (expenses that are deducted from Series assets)
--------------------------------------------------------------------------------
Management/Administrative Fee 0.20%
--------------------------------------------------------------------------------
Other Expenses 0%
--------------------------------------------------------------------------------
Total Series Annual Operating Expenses 0.20%
--------------------------------------------------------------------------------
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.
The total annual operating expenses for each JNL/S&P Series (including both the
annual operating expenses for the JNL/S&P Series and the annual operating
expenses for the underlying investment divisions) could range from .90% to
1.38%. The table below shows estimated total annual operating expenses for each
JNL/S&P Series based on the pro rata share of expenses that the JNL/S&P Series
would bear if they invested in a hypothetical mix of underlying investment
divisions. The adviser believes the expenses shown below to be a likely
approximation of the expenses the JNL/S&P Series will incur based on the actual
mix of underlying investment divisions. The expenses shown below include both
the annual operating expenses for the JNL/S&P Series and the annual operating
expenses for the underlying investment divisions. The actual expenses of each
JNL/S&P Series will be based on the actual mix of underlying investment
divisions in which it invests. The actual expenses may be greater or less than
those shown.
JNL/S&P Very Aggressive Growth Series II....................... 1.23%
Expense Example. This example is intended to help you compare the cost of
investing in the Series with the cost of investing in other mutual funds. Also,
this example does not reflect the expenses of the Qualified Plan. The table
below shows the expenses you would pay on a $10,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period. This
illustration is hypothetical and is not intended to be representative of past or
future performance of the Series. The example also assumes that the Series
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
-------------------------------------------------------------------------------
Expense Example
-------------------------------------------------------------------------------
1 Year $20
-------------------------------------------------------------------------------
3 Years $64
-------------------------------------------------------------------------------
5 Years $113
-------------------------------------------------------------------------------
10 Years $255
-------------------------------------------------------------------------------
Additional Information About the Other 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 Robert D. Jaramillo 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 Financial
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. Jaramillo has
been a senior investment officer with the Quantitative Services department of
Standard & Poor's Financial Information Services since May 1999. Since joining
Standard & Poor's in May 1998, Mr. Jaramillo has provided analytical support for
Standard & Poor's mutual fund advisory products. Prior to 1998, Mr. Jaramillo
worked as an analyst for The Boston Company Asset Management, Inc. Mr. Jaramillo
has had responsibility for the day-to-day management of the Series since August
2000.
<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/Janus Growth & Income Series, JNL/PIMCO Total Return Bond
Series, JNL/Putnam Growth Series, JNL/Putnam International Equity Series,
JNL/Putnam Value Equity Series, JNL/Putnam Midcap Growth 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, 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 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. In
addition, foreign investing involves less publicly available
information and more volatile or less liquid markets.
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. Foreign accounting may be
less revealing than American accounting practices. Foreign
regulation may be inadequate or irregular. 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 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 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." Under a
definition provided by the Investment Company Act of 1940, as
amended, non-diversified funds may invest in fewer assets, or
in larger proportions of the assets of single companies or
industries. 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.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns and shows how performance
has varied from year to year. The table shows the Series' annual returns and
compares them to a broad based index since these shares were first offered. 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 insurance contract. Those
charges, which are described in the variable insurance 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.
Annual Total Returns as of December 31
36.29%
[Insert Chart]
1999
In the period shown in the chart, the Series' highest quarterly return was
23.27% (4th quarter of 1999) and its lowest quarterly return was -4.31% (3rd
quarter of 1999).
Average Annual Total Returns as of December 31, 1999
----------------------------------------------------
1 year Life of Series*
JNL/S&P Equity Growth Series II 36.29% 19.99%
S&P 500 Index 21.05% 19.06%
The S&P 500 Index is a broad-based, unmanaged indexes. The S&P 500 Index
represents 100% of the equity investments of the Series.
* The Series began operations on April 13, 1998.
Shareholder Transaction Expenses (fees paid directly from your investment)
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fee None
Exchange Fee None
Expenses. The table below shows certain expenses you will incur as a Series
investor.
--------------------------------------------------------------------------------
Annual Series Operating Expenses (expenses that are deducted from Series assets)
--------------------------------------------------------------------------------
Management/Administrative Fee 0.20%
--------------------------------------------------------------------------------
Other Expenses 0%
--------------------------------------------------------------------------------
Total Series Annual Operating Expenses 0.20%
--------------------------------------------------------------------------------
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.
The total annual operating expenses for each JNL/S&P Series (including both the
annual operating expenses for the JNL/S&P Series and the annual operating
expenses for the underlying investment divisions) could range from .90% to
1.38%. The table below shows estimated total annual operating expenses for each
JNL/S&P Series based on the pro rata share of expenses that the JNL/S&P Series
would bear if they invested in a hypothetical mix of underlying investment
divisions. The adviser believes the expenses shown below to be a likely
approximation of the expenses the JNL/S&P Series will incur based on the actual
mix of underlying investment divisions. The expenses shown below include both
the annual operating expenses for the JNL/S&P Series and the annual operating
expenses for the underlying investment divisions. The actual expenses of each
JNL/S&P Series will be based on the actual mix of underlying investment
divisions in which it invests. The actual expenses may be greater or less than
those shown.
JNL/S&P Equity Growth Series II.............................. 1.22%
Expense Example. This example is intended to help you compare the cost of
investing in the Series with the cost of investing in other mutual funds. Also,
this example does not reflect the expenses of the Qualified Plan. The table
below shows the expenses you would pay on a $10,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period. This
illustration is hypothetical and is not intended to be representative of past or
future performance of the Series. The example also assumes that the Series
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
--------------------------------------------------------------------------------
Expense Example
--------------------------------------------------------------------------------
1 Year $20
--------------------------------------------------------------------------------
3 Years $64
--------------------------------------------------------------------------------
5 Years $113
--------------------------------------------------------------------------------
10 Years $255
--------------------------------------------------------------------------------
Additional Information About the Other 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 VeryAggressive 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 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 Robert D. Jaramillo 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 Financial
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. Jaramillo has
been a senior investment officer with the Quantitative Services department of
Standard & Poor's Financial Information Services since May 1999. Since joining
Standard & Poor's in May 1998, Mr. Jaramillo has provided analytical support for
Standard & Poor's mutual fund advisory products. Prior to 1998, Mr. Jaramillo
worked as an analyst for The Boston Company Asset Management, Inc. Mr. Jaramillo
has had responsibility for the day-to-day management of the Series since August
2000.
<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/Janus Growth & Income Series, JNL/PIMCO
Total Return Bond Series, JNL/Putnam Growth Series, JNL/Putnam International
Equity Series, JNL/Putnam Value Equity Series, JNL/Putnam Midcap Growth 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 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 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. In
addition, foreign investing involves less publicly available
information and more volatile or less liquid markets.
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. Foreign accounting may be
less revealing than American accounting practices. Foreign
regulation may be inadequate or irregular. 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 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 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." Under a
definition provided by the Investment Company Act of 1940, as
amended, non-diversified funds may invest in fewer assets, or
in larger proportions of single companies or industries. 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.
Performance. The bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns and shows how performance
has varied from year to year. The table shows the Series' annual returns and
compares them to a broad based index since these shares were first offered. 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 insurance contract. Those
charges, which are described in the variable insurance 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.
Annual Total Returns as of December 31
39.61%
[Insert Chart]
1999
In the period shown in the chart, the Series' highest quarterly return was
25.34% (4th quarter of 1999) and its lowest quarterly return was -3.59% (3rd
quarter of 1999).
Average Annual Total Returns as of December 31, 1999
----------------------------------------------------
1 year Life of Series*
JNL/S&P Equity Aggressive Growth Series II 39.61% 23.92%
S&P 500 Index 21.05% 19.06%
The S&P 500 Index is a broad-based, unmanaged indexes. The S&P 500 Index
represents 100% of the equity investments of the Series.
* The Series began operations on April 13, 1998.
Shareholder Transaction Expenses (fees paid directly from your investment)
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fee None
Exchange Fee None
Expenses. The table below shows certain expenses you will incur as a Series
investor.
--------------------------------------------------------------------------------
Annual Series Operating Expenses (expenses that are deducted from Series assets)
--------------------------------------------------------------------------------
Management/Administrative Fee 0.20%
--------------------------------------------------------------------------------
Other Expenses 0%
--------------------------------------------------------------------------------
Total Series Annual Operating Expenses 0.20%
--------------------------------------------------------------------------------
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.
The total annual operating expenses for each JNL/S&P Series (including both the
annual operating expenses for the JNL/S&P Series and the annual operating
expenses for the underlying investment divisions) could range from .90% to
1.38%. The table below shows estimated total annual operating expenses for each
JNL/S&P Series based on the pro rata share of expenses that the JNL/S&P Series
would bear if they invested in a hypothetical mix of underlying investment
divisions. The adviser believes the expenses shown below to be a likely
approximation of the expenses the JNL/S&P Series will incur based on the actual
mix of underlying investment divisions. The expenses shown below include both
the annual operating expenses for the JNL/S&P Series and the annual operating
expenses for the underlying investment divisions. The actual expenses of each
JNL/S&P Series will be based on the actual mix of underlying investment
divisions in which it invests. The actual expenses may be greater or less than
those shown.
JNL/S&P Equity Aggressive Growth Series II..................... 1.23%
Expense Example. This example is intended to help you compare the cost of
investing in the Series with the cost of investing in other mutual funds. Also,
this example does not reflect the expenses of the Qualified Plan. The table
below shows the expenses you would pay on a $10,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period. This
illustration is hypothetical and is not intended to be representative of past or
future performance of the Series. The example also assumes that the Series
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
--------------------------------------------------------------------------------
Expense Example
--------------------------------------------------------------------------------
1 Year $20
--------------------------------------------------------------------------------
3 Years $64
--------------------------------------------------------------------------------
5 Years $113
--------------------------------------------------------------------------------
10 Years $255
--------------------------------------------------------------------------------
Additional Information About the Other 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 Robert D. Jaramillo 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 Financial
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. Jaramillo has
been a senior investment officer with the Quantitative Services department of
Standard & Poor's Financial Information Services since May 1999. Since joining
Standard & Poor's in May 1998, Mr. Jaramillo has provided analytical support for
Standard & Poor's mutual fund advisory products. Prior to 1998, Mr. Jaramillo
worked as an analyst for The Boston Company Asset Management, Inc. Mr. Jaramillo
has had responsibility for the day-to-day management of the Series since August
2000.
<PAGE>
JNL/S&P Conservative Growth Series
Investment Objective. The investment objective of the JNL/S&P Conservative
Growth Series 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
may invest are the JNL/Alliance Growth Series, JNL/J.P. Morgan Enhanced S&P 500
Stock Index Series, JNL/J.P. Morgan International & Emerging Markets Series,
JNL/Janus Aggressive Growth Series, JNL/Janus Global Equities Series, JNL/Janus
Growth & Income Series, JNL/PIMCO Total Return Bond Series, Lazard/JNL Small Cap
Value Series, Lazard/JNL Mid Cap Value Series, PPM America/JNL Money Market
Series, JNL/Putnam International Equity Series, JNL/Putnam Midcap Growth Series,
Salomon Brothers/JNL Balanced Series, Salomon Brothers/JNL Global Bond Series,
Salomon Brothers/JNL High Yield Bond 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 exclusively in bonds of U.S. corporate and
government issuers and Underlying Series that invest exclusively in
investment-grade securities.
Under normal circumstances, the Series allocates approximately 50% to 75% of its
assets to Underlying Series that invest primarily in equity securities, 15% to
50% to Underlying Series that invest primarily in fixed-income securities and 0%
to 20% to Underlying Securities that invest primarily in money market funds.
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. In
addition, foreign investing involves less publicly available
information and more volatile or less liquid markets.
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. Foreign accounting may be
less revealing than American accounting practices. Foreign
regulation may be inadequate or irregular. 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." Under a
definition provided by the Investment Company Act of 1940, as
amended, non-diversified funds may invest in fewer assets, or
in larger proportions of the assets of single companies or
industries. 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.
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 insurance contract. Those charges, which are
described in the variable insurance 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 the year ended December 31, 1999.
Shareholder Transaction Expenses (fees paid directly from your investment)
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fee None
Exchange Fee None
Expenses. The table below shows certain expenses you will incur as a Series
investor.
--------------------------------------------------------------------------------
Annual Series Operating Expenses (expenses that are deducted from Series assets)
--------------------------------------------------------------------------------
Management/Administrative Fee 0.20%
--------------------------------------------------------------------------------
Other Expenses 0%
--------------------------------------------------------------------------------
Total Series Annual Operating Expenses 0.20%
--------------------------------------------------------------------------------
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.
The total annual operating expenses for each JNL/S&P Series (including both the
annual operating expenses for the JNL/S&P Series and the annual operating
expenses for the underlying investment divisions) could range from .90% to
1.38%. The table below shows estimated total annual operating expenses for each
JNL/S&P Series based on the pro rata share of expenses that the JNL/S&P Series
would bear if they invested in a hypothetical mix of underlying investment
divisions. The adviser believes the expenses shown below to be a likely
approximation of the expenses the JNL/S&P Series will incur based on the actual
mix of underlying investment division. The expenses shown below include both the
annual operating expenses for the JNL/S&P Series and the annual operating
expenses for the underlying investment divisions. The actual expenses of each
JNL/S&P Series will be based on the actual mix of underlying investment
divisions in which it invests. The actual expenses may be greater or less than
those shown.
JNL/S&P Conservative Growth Series ............................ 1.04%
Expense Example. This example is intended to help you compare the cost of
investing in the Series with the cost of investing in other mutual funds. Also,
this example does not reflect the expenses of the Qualified Plan. The table
below shows the expenses you would pay on a $10,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period. This
illustration is hypothetical and is not intended to be representative of past or
future performance of the Series. The example also assumes that the Series
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
--------------------------------------------------------------------------------
Expense Example
--------------------------------------------------------------------------------
1 Year $20
--------------------------------------------------------------------------------
3 Years $64
--------------------------------------------------------------------------------
5 Years $113
--------------------------------------------------------------------------------
10 Years $255
--------------------------------------------------------------------------------
Additional Information About the Other Investment Strategies, Other Investments
and Risks of the Series. The JNL/S&P Conservative Growth Series may invest up to
100% of its assets in cash or cash equivalents when the sub-adviser believes
that a temporary defensive position is desirable. 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 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 Robert D. Jaramillo 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 Financial
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. Jaramillo has
been a senior investment officer with the Quantitative Services department of
Standard & Poor's Financial Information Services since May 1999. Since joining
Standard & Poor's in May 1998, Mr. Jaramillo has provided analytical support for
Standard & Poor's mutual fund advisory products. Prior to 1998, Mr. Jaramillo
worked as an analyst for The Boston Company Asset Management, Inc. Mr. Jaramillo
has had responsibility for the day-to-day management of the Series since August
2000.
<PAGE>
JNL/S&P Moderate Growth Series
Investment Objective. The investment objective of the JNL/S&P Moderate Growth
Series is 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 may
invest are the JNL/Alliance Growth Series, JNL/J.P. Morgan Enhanced S&P 500
Stock Index Series, JNL/J.P. Morgan International & Emerging Markets Series,
JNL/Janus Aggressive Growth Series, JNL/Janus Global Equities Series, JNL/Janus
Growth & Income Series, JNL/PIMCO Total Return Bond Series, Lazard/JNL Small Cap
Value Series, Lazard/JNL Mid Cap Value Series, PPM America/JNL Money Market
Series, JNL/Putnam International Equity Series, JNL/Putnam Midcap Growth Series,
Salomon Brothers/JNL Balanced Series, Salomon Brothers/JNL Global Bond Series,
Salomon Brothers/JNL High Yield Bond 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 investment in Underlying
Series that invest primarily in fixed-income securities. These investments may
include Underlying Series that invest exclusively in bonds of U.S. corporate and
government issuers and Underlying Series that invest exclusively in
investment-grade securities.
Under normal circumstances, the Series allocates approximately 60% to 80% of its
assets to Underlying Series that invest primarily in equity securities and 20%
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 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 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. In
addition, foreign investing involves less publicly available
information and more volatile or less liquid markets.
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. Foreign accounting may be
less revealing than American accounting practices. Foreign
regulation may be inadequate or irregular. Owning foreign
securities could cause an Underlying 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 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." Under a
definition provided by the Investment Company Act of 1940, as
amended, non-diversified funds may invest in fewer assets, or
in larger proportions of the assets of single companies or
industries. 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.
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 insurance contract. Those charges, which are
described in the variable insurance 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 the year ended December 31, 1999.
Shareholder Transaction Expenses (fees paid directly from your investment)
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fee None
Exchange Fee None
Expenses. The table below shows certain expenses you will incur as a Series
investor.
--------------------------------------------------------------------------------
Annual Series Operating Expenses (expenses that are deducted from Series assets)
--------------------------------------------------------------------------------
Management/Administrative Fee 0.20%
--------------------------------------------------------------------------------
Other Expenses 0%
--------------------------------------------------------------------------------
Total Series Annual Operating Expenses 0.20%
--------------------------------------------------------------------------------
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.
The total annual operating expenses for each JNL/S&P Series (including both the
annual operating expenses for the JNL/S&P Series and the annual operating
expenses for the underlying investment divisions) could range from .90% to
1.38%. The table below shows estimated total annual operating expenses for each
JNL/S&P Series based on the pro rata share of expenses that the JNL/S&P Series
would bear if they invested in a hypothetical mix of underlying investment
divisions. The adviser believes the expenses shown below to be a likely
approximation of the expenses the JNL/S&P Series will incur based on the actual
mix of underlying investment division. The expenses shown below include both the
annual operating expenses for the JNL/S&P Series and the annual operating
expenses for the underlying investment divisions. The actual expenses of each
JNL/S&P Series will be based on the actual mix of underlying investment
divisions in which it invests. The actual expenses may be greater or less than
those shown.
JNL/S&P Moderate Growth Series ............................ 1.00%
Expense Example. This example is intended to help you compare the cost of
investing in the Series with the cost of investing in other mutual funds. Also,
this example does not reflect the expenses of the Qualified Plan. The table
below shows the expenses you would pay on a $10,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period. This
illustration is hypothetical and is not intended to be representative of past or
future performance of the Series. The example also assumes that the Series
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
--------------------------------------------------------------------------------
Expense Example
--------------------------------------------------------------------------------
1 Year $20
--------------------------------------------------------------------------------
3 Years $64
--------------------------------------------------------------------------------
5 Years $113
--------------------------------------------------------------------------------
10 Years $255
--------------------------------------------------------------------------------
Additional Information About the Other Investment Strategies, Other Investments
and Risks of the Series. The JNL/S&P Moderate Growth Series may invest up to
100% of its assets in cash or cash equivalents when the sub-adviser believes
that a temporary defensive position is desirable. Doing so may reduce the
potential 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 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 Robert D. Jaramillo 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 Financial
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. Jaramillo has
been a senior investment officer with the Quantitative Services department of
Standard & Poor's Financial Information Services since May 1999. Since joining
Standard & Poor's in May 1998, Mr. Jaramillo has provided analytical support for
Standard & Poor's mutual fund advisory products. Prior to 1998, Mr. Jaramillo
worked as an analyst for The Boston Company Asset Management, Inc. Mr. Jaramillo
has had responsibility for the day-to-day management of the Series since August
2000.
<PAGE>
JNL/S&P Aggressive Growth Series
Investment Objective. The investment objective of the JNL/S&P Aggressive Growth
Series is 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 Aggressive Growth Series may
invest are the JNL/Alliance Growth Series, JNL/J.P. Morgan Enhanced S&P 500
Stock Index Series, JNL/J.P. Morgan International & Emerging Markets Series,
JNL/Janus Aggressive Growth Series, JNL/Janus Global Equities Series, JNL/Janus
Growth & Income Series, JNL/PIMCO Total Return Bond Series, Lazard/JNL Small Cap
Value Series, Lazard/JNL Mid Cap Value Series, PPM America/JNL Money Market
Series, JNL/Putnam International Equity Series, JNL/Putnam Midcap Growth Series,
Salomon Brothers/JNL Balanced Series, Salomon Brothers/JNL Global Bond Series,
Salomon Brothers/JNL High Yield Bond 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 investment in Underlying
Series that invest primarily in fixed-income securities. These investments may
include Underlying Series that invest exclusively in bonds of U.S. corporate and
government issuers and Underlying Series that invest exclusively in
investment-grade securities.
Under normal circumstances, the Series allocates 75% to 100% of its assets to
Underlying Series that invest primarily in equity securities and 0% to 25% 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 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 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. In
addition, foreign investing involves less publicly available
information and more volatile or less liquid markets.
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. Foreign accounting may be
less revealing than American accounting practices. Foreign
regulation may be inadequate or irregular. Owning foreign
securities could cause an Underlying 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 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." Under a
definition provided by the Investment Company Act of 1940, as
amended, non-diversified funds may invest in fewer assets, or
in larger proportions of the assets of single companies or
industries. 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.
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 insurance contract. Those charges, which are
described in the variable insurance 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 the year ended December 31, 1999.
Shareholder Transaction Expenses (fees paid directly from your investment)
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fee None
Exchange Fee None
Expenses. The table below shows certain expenses you will incur as a Series
investor.
------------------------------------------------------------------------------
Annual Series Operating Expenses (expenses that are deducted from Series assets)
------------------------------------------------------------------------------
Management/Administrative Fee 0.20%
------------------------------------------------------------------------------
Other Expenses 0%
------------------------------------------------------------------------------
Total Series Annual Operating Expenses 0.20%
------------------------------------------------------------------------------
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.
The total annual operating expenses for each JNL/S&P Series (including both the
annual operating expenses for the JNL/S&P Series and the annual operating
expenses for the underlying investment divisions) could range from .90% to
1.38%. The table below shows estimated total annual operating expenses for each
JNL/S&P Series based on the pro rata share of expenses that the JNL/S&P Series
would bear if they invested in a hypothetical mix of underlying investment
divisions. The adviser believes the expenses shown below to be a likely
approximation of the expenses the JNL/S&P Series will incur based on the actual
mix of underlying investment division. The expenses shown below include both the
annual operating expenses for the JNL/S&P Series and the annual operating
expenses for the underlying investment divisions. The actual expenses of each
JNL/S&P Series will be based on the actual mix of underlying investment
divisions in which it invests. The actual expenses may be greater or less than
those shown.
JNL/S&P Aggressive Growth Series ............................. 1.17%
Expense Example. This example is intended to help you compare the cost of
investing in the Series with the cost of investing in other mutual funds. Also,
this example does not reflect the expenses of the Qualified Plan. The table
below shows the expenses you would pay on a $10,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period. This
illustration is hypothetical and is not intended to be representative of past or
future performance of the Series. The example also assumes that the Series
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
--------------------------------------------------------------------------------
Expense Example
--------------------------------------------------------------------------------
1 Year $20
--------------------------------------------------------------------------------
3 Years $64
--------------------------------------------------------------------------------
5 Years $113
--------------------------------------------------------------------------------
10 Years $255
--------------------------------------------------------------------------------
Additional Information About the Other Investment Strategies, Other Investments
and Risks of the Series. The JNL/S&P Aggressive Growth Series may invest up to
100% of its assets in cash or cash equivalents when the sub-adviser believes
that a temporary defensive position is desirable. 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
Aggressive Growth Series 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 Robert D. Jaramillo 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 Financial
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. Jaramillo has
been a senior investment officer with the Quantitative Services department of
Standard & Poor's Financial Information Services since May 1999. Since joining
Standard & Poor's in May 1998, Mr. Jaramillo has provided analytical support for
Standard & Poor's mutual fund advisory products. Prior to 1998, Mr. Jaramillo
worked as an analyst for The Boston Company Asset Management, Inc. Mr. Jaramillo
has had responsibility for the day-to-day management of the Series since August
2000.
<PAGE>
JNL Enhanced Intermediate Bond Index Series
Investment Objective. The investment objective of the JNL Enhanced Intermediate
Bond Fund Index Series is to match or exceed the return of the Lehman Brothers
Intermediate Government/Corporate Bond Index.
Principal Investment Strategies. The Series seeks to achieve its objective by
utilizing an enhanced bond indexing strategy intended to add incremental value
over the Lehman Brothers Intermediate Government/Corporate Index in a
risk-controlled framework. The JNL Enhanced Intermediate Bond Index Series
invests primarily in U.S. dollar-denominated U.S. Treasury, Agency, corporate,
and mortgage- and other asset-backed securities, and supranational and sovereign
debt obligations. The Series invests at least 65% in a diversified portfolio of
intermediate-maturity, investment-grade fixed-income securities The Series has
no policy regarding the quality and maturity of the bonds which may be
purchased..
The sub-adviser may engage in options, financial futures and swap transactions
in seeking to hedge the portfolio or enhance return.
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 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.
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 Derivatives risk. Investing in derivative instruments, such as
options, futures contracts, forward currency contracts,
indexed securities and asset-backed securities, involves
special risks. The Series' sub-advisers must correctly predict
the price movements, during the life of a derivative, of the
underlying asset in order to realize the desired results from
the investment. 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 price 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 insurance contract. Those charges, which are
described in the variable insurance 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
commenced operations as of the date of this prospectus.
Shareholder Transaction Expenses (fees paid directly from your investment)
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fee None
Exchange Fee None
Expenses. The table below shows certain expenses you will incur as a Series
investor, either directly or indirectly.
--------------------------------------------------------------------------------
Annual Series Operating expenses (expenses that are deducted from Series assets)
--------------------------------------------------------------------------------
Management/Administrative Fee 0.75%
--------------------------------------------------------------------------------
Other Expenses 0%
--------------------------------------------------------------------------------
Total Series Annual Operating Expenses 0.75%
--------------------------------------------------------------------------------
Expense Example. This example is intended to help you compare the cost of
investing in the Series with the cost of investing in other mutual funds. Also,
this example does not reflect the expenses of the Qualified Plan. The table
below shows the expenses you would pay on a $10,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period. This
illustration is hypothetical and is not intended to be representative of past or
future performance of the Series. The example also assumes that the Series
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
--------------------------------------------------------------------------------
Expense Example
--------------------------------------------------------------------------------
1 Year $77
--------------------------------------------------------------------------------
3 Years $240
--------------------------------------------------------------------------------
5 Years $417
--------------------------------------------------------------------------------
10 Years $930
--------------------------------------------------------------------------------
Additional Information About the Other Investment Strategies, Other Investments
and Risks of the Series. The Series may invest in money market funds including
those for which the sub-adviser acts as an investment adviser. As a shareholder
in a money market fund, the Series would bear its share of that fund's expenses.
The sub-adviser uses a combination of quantitative and qualitative analysis in
balancing the top-down sector decision - selecting among government obligations,
corporate securities and structured investments - with the bottom-up security
selection which is based upon fundamental and technical analysis.
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.
<PAGE>
JNL International Index Series
Investment Objective. The investment objective of the JNL International Index
Series is to closely match the performance of the Morgan Stanley Capital
International Europe and Australasia, Far East Equity Index (MSCI E.A.FE. Index)
while minimizing transaction costs.
Principal Investment Strategies. The Series seeks to achieve its objective
through a diversified portfolio whose returns closely parallel those of the MSCI
E.A.FE. Index. The Series typically holds all securities contained in the MSCI
E.A.FE. Index. To better track the performance of the Index and provide
liquidity, the Series may hold E.A.FE. futures contracts instead of cash
equivalents in its portfolio. The sub-adviser uses a trading approach intended
to reduce the Series' transaction costs.
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. In
addition, foreign investing involves less publicly available
information and more volatile or less liquid markets.
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. Foreign accounting may be
less revealing than American accounting practices. Foreign
regulation may be inadequate or irregular. 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.
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 Series sub-adviser must correctly predict
price movements, during the life of a derivative, of the
underlying asset in order to realize the desired results from
the investment. 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 price 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 insurance contract. Those charges, which are
described in the variable insurance 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
commenced operations as of the date of this prospectus.
Shareholder Transaction Expenses (fees paid directly from your investment)
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fee None
Exchange Fee None
Expenses. The table below shows certain expenses you will incur as a Series
investor, either directly or indirectly.
--------------------------------------------------------------------------------
Annual Series Operating expenses (expenses that are deducted from Series assets)
--------------------------------------------------------------------------------
Management/Administrative Fee 0.75%
--------------------------------------------------------------------------------
Other Expenses 0%
--------------------------------------------------------------------------------
Total Series Annual Operating Expenses 0.75%
--------------------------------------------------------------------------------
Expense Example. This example is intended to help you compare the cost of
investing in the Series with the cost of investing in other mutual funds. Also,
this example does not reflect the expenses of the Qualified Plan. The table
below shows the expenses you would pay on a $10,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period. This
illustration is hypothetical and is not intended to be representative of past or
future performance of the Series. The example also assumes that the Series
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
--------------------------------------------------------------------------------
Expense Example
--------------------------------------------------------------------------------
1 Year $77
--------------------------------------------------------------------------------
3 Years $240
--------------------------------------------------------------------------------
5 Years $417
--------------------------------------------------------------------------------
10 Years $930
--------------------------------------------------------------------------------
Additional Information About the Other Investment Strategies, Other Investments
and Risks of the Series. The SAI has more information about the Series'
authorized investments and strategies, as well as the risks and restrictions
that may apply to them.
<PAGE>
JNL Russell 2000 Index Series
Investment Objective. The investment objective of the JNL Russell 2000 Index
Series is to closely match the returns and characteristics of the Russell 2000
Index.
Principal Investment Strategies. The Series seeks to achieve its objective
through a diversified portfolio whose return closely tracks that of the Russell
2000 Index. The Series typically holds all the common stocks included in the
Russell 2000 Index.
The sub-adviser generally follows a buy and hold strategy, trading only when
there is a change in the composition of the Russell 2000 Index or when cash flow
activity occurs in the Series. The sub-adviser uses a trading approach intended
to reduce the Series' transaction costs.
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.
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 risk. 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, or may depend on the expertise of a
few people, 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 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 insurance contract. Those charges, which are
described in the variable insurance 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
commenced operations as of the date of this prospectus.
Shareholder Transaction Expenses (fees paid directly from your investment)
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fee None
Exchange Fee None
Expenses. The table below shows certain expenses you will incur as a Series
investor, either directly or indirectly.
--------------------------------------------------------------------------------
Annual Series Operating expenses (expenses that are deducted from Series assets)
--------------------------------------------------------------------------------
Management/Administrative Fee 0.60%
--------------------------------------------------------------------------------
Other Expenses 0%
--------------------------------------------------------------------------------
Total Series Annual Operating Expenses 0.60%
--------------------------------------------------------------------------------
Expense Example. This example is intended to help you compare the cost of
investing in the Series with the cost of investing in other mutual funds. Also,
this example does not reflect the expenses of the Qualified Plan. The table
below shows the expenses you would pay on a $10,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period. This
illustration is hypothetical and is not intended to be representative of past or
future performance of the Series. The example also assumes that the Series
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
--------------------------------------------------------------------------------
Expense Example
--------------------------------------------------------------------------------
1 Year $61
--------------------------------------------------------------------------------
3 Years $192
--------------------------------------------------------------------------------
5 Years $335
--------------------------------------------------------------------------------
10 Years $750
--------------------------------------------------------------------------------
Additional Information About the Other Investment Strategies, Other Investments
and Risks of the Series. The JNL Russell 2000 Index Series may also hold U.S.
Treasury Bills, short-term fixed- income securities, equity index futures,
Standard & Poor's Depository Receipts traded on the American Stock Exchange and
other similar derivative instruments.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
<PAGE>
JNL S&P 500 Index Series
Investment Objective. The investment objective of the JNL S&P 500 Index Series
is to closely match the returns and characteristics of the Standard & Poor's 500
Composite Stock Price Index (S&P 500 Index).
Principal Investment Strategies. The Series seeks to achieve its objective
through a diversified portfolio whose return closely tracks that of the S&P 500
Index. The Series typically holds all the stock in the S&P 500 Index in
approximately the same proportions as they appear in the Index. To better track
the performance of the Index and provide liquidity, the Series may hold S&P 500
futures contracts instead of cash equivalents in its portfolio. The sub-adviser
generally follows a buy and hold strategy, trading only when there is a change
in the composition of the S&P 500 Index or when cash flow activity occurs in the
Series. The sub-adviser uses a trading approach intended to reduce the Series'
transaction costs.
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.
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 insurance contract. Those charges, which are
described in the variable insurance 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
commenced operations as of the date of this prospectus.
Shareholder Transaction Expenses (fees paid directly from your investment)
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fee None
Exchange Fee None
Expenses. The table below shows certain expenses you will incur as a Series
investor, either directly or indirectly.
--------------------------------------------------------------------------------
Annual Series Operating expenses (expenses that are deducted from Series assets)
--------------------------------------------------------------------------------
Management/Administrative Fee 0.60%
--------------------------------------------------------------------------------
Other Expenses 0%
--------------------------------------------------------------------------------
Total Series Annual Operating Expenses 0.60%
--------------------------------------------------------------------------------
Expense Example. This example is intended to help you compare the cost of
investing in the Series with the cost of investing in other mutual funds. Also,
this example does not reflect the expenses of the Qualified Plan. The table
below shows the expenses you would pay on a $10,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period. This
illustration is hypothetical and is not intended to be representative of past or
future performance of the Series. The example also assumes that the Series
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
--------------------------------------------------------------------------------
Expense Example
--------------------------------------------------------------------------------
1 Year $61
--------------------------------------------------------------------------------
3 Years $192
--------------------------------------------------------------------------------
5 Years $335
--------------------------------------------------------------------------------
10 Years $750
--------------------------------------------------------------------------------
Additional Information About the Other Investment Strategies, Other Investments
and Risks of the Series. The SAI has more information about the Series'
authorized investments and strategies, as well as the risks and restrictions
that may apply to them.
<PAGE>
JNL S&P MidCap Index Series
Investment Objective. The objective of the JNL S&P MidCap Index Series is to
closely match the returns and characteristics of the Standard & Poor's MidCap
400 Index (S&P MidCap 400 Index).
Principal Investment Strategies. The Series seeks to achieve its objective
through a diversified portfolio whose return closely tracks that of the S&P
MidCap 400 Index. The Series typically holds all the stock in the S&P MidCap 400
Index in approximately the same proportions as they appear in the Index. To
better track the performance of the Index and provide liquidity, the Series may
invest in equity index futures contracts and other derivatives instead of cash
equivalents. The sub-adviser generally follows a buy and hold strategy, trading
only when there is a change in the composition of the S&P MidCap 400 Index or
when cash flow activity occurs in the Series. The sub-adviser uses a trading
approach intended to reduce the Series' transaction costs.
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.
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 insurance contract. Those charges, which are
described in the variable insurance 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
commenced operations as of the date of this prospectus.
Shareholder Transaction Expenses (fees paid directly from your investment)
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fee None
Exchange Fee None
Expenses. The table below shows certain expenses you will incur as a Series
investor, either directly or indirectly.
--------------------------------------------------------------------------------
Annual Series Operating expenses (expenses that are deducted from Series assets)
--------------------------------------------------------------------------------
Management/Administrative Fee 0.60%
--------------------------------------------------------------------------------
Other Expenses 0%
--------------------------------------------------------------------------------
Total Series Annual Operating Expenses 0.60%
--------------------------------------------------------------------------------
Expense Example. This example is intended to help you compare the cost of
investing in the Series with the cost of investing in other mutual funds. Also,
this example does not reflect the expenses of the Qualified Plan. The table
below shows the expenses you would pay on a $10,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period. This
illustration is hypothetical and is not intended to be representative of past or
future performance of the Series. The example also assumes that the Series
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
--------------------------------------------------------------------------------
Expense Example
--------------------------------------------------------------------------------
1 Year $61
--------------------------------------------------------------------------------
3 Years $192
--------------------------------------------------------------------------------
5 Years $335
--------------------------------------------------------------------------------
10 Years $750
--------------------------------------------------------------------------------
Additional Information About the Other Investment Strategies, Other Investments
and Risks of the Series. The JNL S&P MidCap Index Series may invest in
interest-bearing cash equivalents, notes and other short-term instruments,
including call accounts pending the investment of available cash. The Series
will be rebalanced periodically to reflect changes in the S&P MidCap 400 Index,
and all dividends and realized capital gains will be reinvested.
The SAI has more information about the Series' authorized investments and
strategies, as well as the risks and restrictions that may apply to them.
<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 at least 80% of total assets 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. 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).
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 Value investing risk. The value approach carries the risk that
the market will not recognize a security's intrinsic value for
a long time, or that a stock judged to be undervalued may
actually be appropriately priced.
o Non-diversification. The Series is "non-diversified." Under a
definition provided by the Investment Company Act of 1940, as
amended, non-diversified funds may invest in fewer assets, or
in larger proportions of the assets of single companies or
industries. 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 and shows how performance
has varied from year to year. The table shows the Series' annual returns and
compares them to a broad based index since these shares were first offered. 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 insurance contract. Those
charges, which are described in the variable insurance 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.
Annual Total Returns as of December 31
4.77%
[Insert Chart]
1999
In the period shown in the chart, the Series' highest quarterly return was
12.00% (2nd quarter of 1999) and its lowest quarterly return was -13.00% (3rd
quarter of 1999).
Average Annual Total Returns as of December 31, 1999
----------------------------------------------------
1 year Life of Series*
Lazard/JNL Mid Cap Value Series 4.77% -1.78%
Russell MidCap Index 16.48% 10.22%
The Russell Mid Cap Index is a broad-based, unmanaged index. * The Series began
operations on March 2, 1998.
Shareholder Transaction Expenses (fees paid directly from your investment)
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fee None
Exchange Fee None
Expenses. The table below shows certain expenses you will incur as a Series
investor, either directly or indirectly.
--------------------------------------------------------------------------------
Annual Series Operating Expenses (expenses that are deducted from Series assets)
--------------------------------------------------------------------------------
Management/Administrative Fee 1.08%
--------------------------------------------------------------------------------
Distribution (12b-1) Fees 0.05%
--------------------------------------------------------------------------------
Other Expenses 0%
--------------------------------------------------------------------------------
Total Series Annual Operating Expenses 1.13%
--------------------------------------------------------------------------------
* As discussed under "Management of the Trust," the Trustees have adopted a
Brokerage Enhancement Plan (the "Plan") in accordance with the provisions of
Rule 12b-1 under the Investment Company Act of 1940. The Plan uses the available
brokerage commissions to promote the sale of shares of the Trust. While the
brokerage commission rates and amounts paid by the Trust are not expected to
increase as a result of the Distribution Plan, the staff of the Securities and
Exchange Commission has taken the position that commission amounts received
under the Distribution Plan should be reflected as distribution expenses of the
Series. The distribution fee noted is an estimate and therefore it is not
possible to determine with accuracy actual amounts that will be received by the
Series under the Plan.
Expense Example. This example is intended to help you compare the cost of
investing in the Series with the cost of investing in other mutual funds. Also,
this example does not reflect the expenses of the Qualified Plan. The table
below shows the expenses you would pay on a $10,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period. This
illustration is hypothetical and is not intended to be representative of past or
future performance of the Series. The example also assumes that the Series
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
--------------------------------------------------------------------------------
Expense Example
--------------------------------------------------------------------------------
1 Year $115
--------------------------------------------------------------------------------
3 Years $359
--------------------------------------------------------------------------------
5 Years $622
--------------------------------------------------------------------------------
10 Years 1,375
--------------------------------------------------------------------------------
Additional Information About the Other Investment Strategies, Other Investments
and Risks of the Series. 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 at least 80% of its total assets 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. 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.
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 Value investing risk. The value approach carries the risk that
the market will not recognize a security's intrinsic value for
a long time, or that a stock judged to be undervalued may
actually be appropriately priced.
o Small cap investing risk. 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, or may depend on the expertise of a
few people 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." Under a
definition provided by the Investment Company Act of 1940, as
amended, non-diversified funds may invest in fewer assets, or
in larger proportions of the assets of single companies or
industries. 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 and shows how performance
has varied from year to year. The table shows the Series' annual returns and
compares them to a broad based index since these shares were first offered. 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 insurance contract. Those
charges, which are described in the variable insurance 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.
Annual Total Returns as of December 31
1.96%
[Insert Chart]
1999
In the period shown in the chart, the Series' highest quarterly return was
20.18% (2nd quarter of 1999) and its lowest quarterly return was -8.85% (1st
quarter of 1999).
Average Annual Total Returns as of December 31, 1999
----------------------------------------------------
1 year Life of Series*
Lazard/JNL Small Cap Value Series 1.96% -6.27%
Russell 2000 21.35% 5.69%
The Russell 2000 Index is a broad-based, unmanaged index.
* The Series began operations on March 2, 1998.
Shareholder Transaction Expenses (fees paid directly from your investment)
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fee None
Exchange Fee None
Expenses. The table below shows certain expenses you will incur as a Series
investor, either directly or indirectly.
--------------------------------------------------------------------------------
Annual Series Operating Expenses (expenses that are deducted from Series assets)
--------------------------------------------------------------------------------
Management/Administrative Fee 1.15%
--------------------------------------------------------------------------------
Distribution (12b-1) Fees 0.03%
--------------------------------------------------------------------------------
Other Expenses 0%
--------------------------------------------------------------------------------
Total Series Annual Operating Expenses 1.18%
--------------------------------------------------------------------------------
* As discussed under "Management of the Trust," the Trustees have adopted a
Brokerage Enhancement Plan (the "Plan") in accordance with the provisions of
Rule 12b-1 under the Investment Company Act of 1940. The Plan uses the available
brokerage commissions to promote the sale of shares of the Trust. While the
brokerage commission rates and amounts paid by the Trust are not expected to
increase as a result of the Distribution Plan, the staff of the Securities and
Exchange Commission has taken the position that commission amounts received
under the Distribution Plan should be reflected as distribution expenses of the
Series. The distribution fee noted is an estimate and therefore it is not
possible to determine with accuracy actual amounts that will be received by the
Series under the Plan.
Expense Example. This example is intended to help you compare the cost of
investing in the Series with the cost of investing in other mutual funds. Also,
this example does not reflect the expenses of the Qualified Plan. The table
below shows the expenses you would pay on a $10,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period. This
illustration is hypothetical and is not intended to be representative of past or
future performance of the Series. The example also assumes that the Series
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
--------------------------------------------------------------------------------
Expense Example
--------------------------------------------------------------------------------
1 Year $120
--------------------------------------------------------------------------------
3 Years $375
--------------------------------------------------------------------------------
5 Years $649
--------------------------------------------------------------------------------
10 Years $1,432
--------------------------------------------------------------------------------
Additional Information About the Other Investment Strategies, Other Investments
and Risks of the Series. 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, but may also invest in securities convertible into
common stocks, deferred debt obligations and zero coupon bonds. 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 and shows how performance
has varied from year to year. The table shows the Series' annual returns and
compares them to a broad based index since these shares were first offered. 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 insurance contract. Those
charges, which are described in the variable insurance 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.
Annual Total Returns as of December 31
10.81% 18.43% 10.06% -0.11%
[Insert Chart]
1996 1997 1998 1999
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 -5.75% (3rd
quarter of 1999).
Average Annual Total Returns as of December 31, 1999
----------------------------------------------------
1 year Life of Series*
PPM America/JNL Balanced Series -0.11% 11.64%
S&P 500 Index 21.04% 26.95%
Lehman Brothers Aggregate Bond Index -0.82% 5.98%
Each of the S&P 500 Index and the Lehman Brothers Aggregate 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.
Shareholder Transaction Expenses (fees paid directly from your investment)
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fee None
Exchange Fee None
Expenses. The table below shows certain expenses you will incur as a Series
investor, either directly or indirectly.
--------------------------------------------------------------------------------
Annual Series Operating Expenses (expenses that are deducted from Series assets)
--------------------------------------------------------------------------------
Management/Administrative Fee 0.82%
--------------------------------------------------------------------------------
Distribution (12b-1) Fees 0.01%
--------------------------------------------------------------------------------
Other Expenses 0%
--------------------------------------------------------------------------------
Total Series Annual Operating Expenses 0.83%
--------------------------------------------------------------------------------
* As discussed under "Management of the Trust," the Trustees have adopted a
Brokerage Enhancement Plan (the "Plan") in accordance with the provisions of
Rule 12b-1 under the Investment Company Act of 1940. The Plan uses the available
brokerage commissions to promote the sale of shares of the Trust. While the
brokerage commission rates and amounts paid by the Trust are not expected to
increase as a result of the Distribution Plan, the staff of the Securities and
Exchange Commission has taken the position that commission amounts received
under the Distribution Plan should be reflected as distribution expenses of the
Series. The distribution fee noted is an estimate and therefore it is not
possible to determine with accuracy actual amounts that will be received by the
Series under the Plan.
Expense Example. This example is intended to help you compare the cost of
investing in the Series with the cost of investing in other mutual funds. Also,
this example does not reflect the expenses of the Qualified Plan. The table
below shows the expenses you would pay on a $10,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period. This
illustration is hypothetical and is not intended to be representative of past or
future performance of the Series. The example also assumes that the Series
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
--------------------------------------------------------------------------------
Expense Example
--------------------------------------------------------------------------------
1 Year $85
--------------------------------------------------------------------------------
3 Years $265
--------------------------------------------------------------------------------
5 Years $460
--------------------------------------------------------------------------------
10 Years $1,025
--------------------------------------------------------------------------------
Additional Information About the Other Investment Strategies, Other Investments
and Risks of the Series. The PPM America/JNL Balanced Series invests primarily
in common stocks and fixed-income securities 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. The Series will invest at
least 65% in "junk bonds," which are bonds 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. 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 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 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.
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.
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 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.
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. In
addition, foreign investing involves less publicly available
information and more volatile or less liquid markets.
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. Foreign accounting may be
less revealing than American accounting practices. Foreign
regulation may be inadequate or irregular. 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 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 and shows how performance
has varied from year to year. The table shows the Series' annual returns and
compares them to a broad based index since these shares were first offered. 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 insurance contract. Those
charges, which are described in the variable insurance 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.
Annual Total Returns as of December 31
12.90% 15.05% 3.84% 1.09%
[Insert Chart]
1996 1997 1998 1999
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, 1999
----------------------------------------------------
1 year Life of Series*
PPM America/JNL High Yield Bond Series 1.09% 8.32%
Lehman Brothers High Yield Index 2.39% 9.15%
The Lehman Brothers High Yield Index is a broad-based, unmanaged index.
* The Series began operations on May 15, 1995.
Shareholder Transaction Expenses (fees paid directly from your investment)
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fee None
Exchange Fee None
Expenses. The table below shows certain expenses you will incur as a Series
investor, either directly or indirectly.
--------------------------------------------------------------------------------
Annual Series Operating Expenses (expenses that are deducted from Series assets)
--------------------------------------------------------------------------------
Management/Administrative Fee 0.82%
--------------------------------------------------------------------------------
Distribution (12b-1) Fees 0.01%
--------------------------------------------------------------------------------
Other Expenses 0%
--------------------------------------------------------------------------------
Total Series Annual Operating Expenses 0.83%
--------------------------------------------------------------------------------
* As discussed under "Management of the Trust," the Trustees have adopted a
Brokerage Enhancement Plan (the "Plan") in accordance with the provisions of
Rule 12b-1 under the Investment Company Act of 1940. The Plan uses the available
brokerage commissions to promote the sale of shares of the Trust. While the
brokerage commission rates and amounts paid by the Trust are not expected to
increase as a result of the Distribution Plan, the staff of the Securities and
Exchange Commission has taken the position that commission amounts received
under the Distribution Plan should be reflected as distribution expenses of the
Series. The distribution fee noted is an estimate and therefore it is not
possible to determine with accuracy actual amounts that will be received by the
Series under the Plan.
Expense Example. This example is intended to help you compare the cost of
investing in the Series with the cost of investing in other mutual funds. Also,
this example does not reflect the expenses of the Qualified Plan. The table
below shows the expenses you would pay on a $10,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period. This
illustration is hypothetical and is not intended to be representative of past or
future performance of the Series. The example also assumes that the Series
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
--------------------------------------------------------------------------------
Expense Example
--------------------------------------------------------------------------------
1 Year $85
--------------------------------------------------------------------------------
3 Years $265
--------------------------------------------------------------------------------
5 Years $460
--------------------------------------------------------------------------------
10 Years $1,025
--------------------------------------------------------------------------------
Additional Information About the Other 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. 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 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 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 and shows how performance
has varied from year to year. The table shows the Series' annual returns and
compares them to a broad based index since these shares were first offered. 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 insurance contract. Those
charges, which are described in the variable insurance 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.
Annual Total Returns as of December 31
4.87% 5.01% 4.99% 4.67%
[Insert Chart]
1996 1997 1998 1999
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 1.07% (1st
quarter of 1999).
Average Annual Total Returns as of December 31, 1999
----------------------------------------------------
1 year Life of Series*
PPM America/JNL Money Market Series 4.67% 4.93%
Merrill Lynch Treasury Bill Index (3 month) 4.85% 5.34%
The 7-day yield of the Series on December 31, 1999, was 5.37%. The Merrill Lynch
Treasury Bill Index is a broad-based unmanaged index.
* The Series began operations on May 15, 1995.
Shareholder Transaction Expenses (fees paid directly from your investment)
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fee None
Exchange Fee None
Expenses. The table below shows certain expenses you will incur as a Series
investor, either directly or indirectly.
--------------------------------------------------------------------------------
Annual Series Operating Expenses (expenses that are deducted from Series assets)
--------------------------------------------------------------------------------
Management/Administrative Fee 0.70%
--------------------------------------------------------------------------------
Other Expenses 0%
--------------------------------------------------------------------------------
Total Series Annual Operating Expenses 0.70%
--------------------------------------------------------------------------------
Expense Example. This example is intended to help you compare the cost of
investing in the Series with the cost of investing in other mutual funds. Also,
this example does not reflect the expenses of the Qualified Plan. The table
below shows the expenses you would pay on a $10,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period. This
illustration is hypothetical and is not intended to be representative of past or
future performance of the Series. The example also assumes that the Series
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
--------------------------------------------------------------------------------
Expense Example
--------------------------------------------------------------------------------
1 Year $72
--------------------------------------------------------------------------------
3 Years $224
--------------------------------------------------------------------------------
5 Years $390
--------------------------------------------------------------------------------
10 Years $871
--------------------------------------------------------------------------------
Additional Information About the Other Investment Strategies, Other Investments
and Risks of the Series. 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 portfolio 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 up to 25% 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. In
addition, foreign investing involves less publicly available
information and more volatile or less liquid markets.
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. Foreign accounting may be
less revealing than American accounting practices. Foreign
regulation may be inadequate or irregular. 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 bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns and shows how performance
has varied from year to year. The table shows the Series' annual returns and
compares them to a broad based index since these shares were first offered. 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 insurance contract. Those
charges, which are described in the variable insurance 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.
Annual Total Returns as of December 31
0.09%
[Insert Chart]
1999
In the period shown in the chart, the Series' highest quarterly return was
-4.91% (3rd quarter of 1999) and its lowest quarterly return was 4.15% (2nd
quarter of 1999).
Average Annual Total Returns as of December 31, 1999
----------------------------------------------------
1 year Life of Series*
Salomon Brothers/JNL Balanced Series 0.09% 3.23%
Lehman Brothers Aggregate Bond Index -0.82% 2.83%
S&P 500 Index 21.04% 21.78%
Each of the Lehman Brothers Aggregate Bond Index and the S&P 500 Index is a
broad-based, unmanaged index. * The Series began operations on March 2, 1998.
Shareholder Transaction Expenses (fees paid directly from your investment)
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fee None
Exchange Fee None
Expenses. The table below shows certain expenses you will incur as a Series
investor, either directly or indirectly.
--------------------------------------------------------------------------------
Annual Series Operating Expenses
(expenses that are deducted directly from Series assets)
--------------------------------------------------------------------------------
Management/Administrative Fee 0.90%
--------------------------------------------------------------------------------
Distribution (12b-1) Fees .01%
--------------------------------------------------------------------------------
Other Expenses 0%
--------------------------------------------------------------------------------
Total Series Annual Operating Expenses 0.91%
--------------------------------------------------------------------------------
* As discussed under "Management of the Trust," the Trustees have adopted a
Brokerage Enhancement Plan (the "Plan") in accordance with the provisions of
Rule 12b-1 under the Investment Company Act of 1940. The Plan uses the available
brokerage commissions to promote the sale of shares of the Trust. While the
brokerage commission rates and amounts paid by the Trust are not expected to
increase as a result of the Distribution Plan, the staff of the Securities and
Exchange Commission has taken the position that commission amounts received
under the Distribution Plan should be reflected as distribution expenses of the
Series. The distribution fee noted is an estimate and therefore it is not
possible to determine with accuracy actual amounts that will be received by the
Series under the Plan.
Expense Example. This example is intended to help you compare the cost of
investing in the Series with the cost of investing in other mutual funds. Also,
this example does not reflect the expenses of the Qualified Plan. The table
below shows the expenses you would pay on a $10,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period. This
illustration is hypothetical and is not intended to be representative of past or
future performance of the Series. The example also assumes that the Series
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
--------------------------------------------------------------------------------
Expense Example
--------------------------------------------------------------------------------
1 Year $93
--------------------------------------------------------------------------------
3 Years $290
--------------------------------------------------------------------------------
5 Years $504
--------------------------------------------------------------------------------
10 Years $1,120
--------------------------------------------------------------------------------
Additional Information About the Other 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 and 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, Director and Senior Portfolio Manager of SBAM, is primarily
responsible for the day-to-day management of the Series. 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 Salomon Brothers/JNL Global Bond Series
invests at least 65% 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. The Series does not currently intend to invest more than 75% of
assets in medium or lower rated securities.
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.
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.
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 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. In
addition, foreign investing involves less publicly available
information and more volatile or less liquid markets.
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. Foreign accounting may be
less revealing than American accounting practices. Foreign
regulation may be inadequate or irregular. 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 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 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.
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 Series sub-adviser must correctly predict
price movements, during the life of a derivative, of the
underlying asset in order to realize the desired results from
the investment. 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 price 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 bar chart and table below show the past performance of the
Series' shares. The chart presents the annual returns and shows how performance
has varied from year to year. The table shows the Series' annual returns and
compares them to a broad based index since these shares were first offered. 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 insurance contract. Those
charges, which are described in the variable insurance 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.
Annual Total Returns as of December 31
14.39% 10.66% 2.46% 1.87%
[Insert Chart]
1996 1997 1998 1999
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, 1999
----------------------------------------------------
1 year Life of Series*
Salomon Brothers/JNL Global Bond Series 1.87% 7.79%
Salomon Smith Barney Broad Investment Grade Index -0.83% 6.46%
The Salomon Smith Barney Broad Investment Grade Index is a broad-based,
unmanaged index. * The Series began operations on May 15, 1995.
Shareholder Transaction Expenses (fees paid directly from your investment)
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fee None
Exchange Fee None
Expenses. The table below shows certain expenses you will incur as a Series
investor, either directly or indirectly.
--------------------------------------------------------------------------------
Annual Series Operating Expenses (expenses that are deducted from Series assets)
--------------------------------------------------------------------------------
Management/Administrative Fee 0.95%
--------------------------------------------------------------------------------
Distribution (12b-1) Fees 0.01%
--------------------------------------------------------------------------------
Other Expenses 0%
--------------------------------------------------------------------------------
Total Series Annual Operating Expenses 0.96%
--------------------------------------------------------------------------------
* As discussed under "Management of the Trust," the Trustees have adopted a
Brokerage Enhancement Plan (the "Plan") in accordance with the provisions of
Rule 12b-1 under the Investment Company Act of 1940. The Plan uses the available
brokerage commissions to promote the sale of shares of the Trust. While the
brokerage commission rates and amounts paid by the Trust are not expected to
increase as a result of the Distribution Plan, the staff of the Securities and
Exchange Commission has taken the position that commission amounts received
under the Distribution Plan should be reflected as distribution expenses of the
Series. The distribution fee noted is an estimate and therefore it is not
possible to determine with accuracy actual amounts that will be received by the
Series under the Plan.
Expense Example. This example is intended to help you compare the cost of
investing in the Series with the cost of investing in other mutual funds. Also,
this example does not reflect the expenses of the Qualified Plan. The table
below shows the expenses you would pay on a $10,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period. This
illustration is hypothetical and is not intended to be representative of past or
future performance of the Series. The example also assumes that the Series
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
--------------------------------------------------------------------------------
Expense Example
--------------------------------------------------------------------------------
1 Year $98
--------------------------------------------------------------------------------
3 Years $306
--------------------------------------------------------------------------------
5 Years $531
--------------------------------------------------------------------------------
10 Years $1,178
--------------------------------------------------------------------------------
Additional Information About the Other Investment Strategies, Other Investments
and Risks of the Series. 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 individualand 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 and Chief
Investment Officer - Fixed Income of SBAM and 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.
Ms. Semmel is a Managing Director of SBAM. Ms. Semmel joined SBAM in May of
1993, where she manages high-yield portfolios. 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.
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.
<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 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.
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. The Fund may also invest in
securities of foreign issuers.
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.
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.
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 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. In
addition, foreign investing involves less publicly available
information and more volatile or less liquid markets.
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. Foreign accounting may be
less revealing than American accounting practices. Foreign
regulation may be inadequate or irregular. 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, 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 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 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 and shows how performance
has varied from year to year. The table shows the Series' annual returns and
compares them to a broad based index since these shares were first offered. 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 insurance contract. Those
charges, which are described in the variable insurance 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.
Annual Total Returns as of December 31
-1.76%
[Insert Chart]
1999
In the period shown in the chart, the Series' highest quarterly return was 1.56%
(1st quarter of 1999) and its lowest quarterly return was -2.18% (3rd quarter of
1999).
Average Annual Total Returns as of December 31, 1999
----------------------------------------------------
1 year Life of Series*
Salomon Brothers/JNL High Yield Bond Series -1.76% -0.25%
Salomon Brothers High Yield Index 1.73% 1.29%
The Salomon Brothers High Yield Index is a broad-based, unmanaged index. * The
Series began operations on March 2, 1998.
Shareholder Transaction Expenses (fees paid directly from your investment)
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fee None
Exchange Fee None
Expenses. The table below shows certain expenses you will incur as a Series
investor, either directly or indirectly.
--------------------------------------------------------------------------------
Annual Series Operating Expenses (expenses that are deducted from Series assets)
--------------------------------------------------------------------------------
Management/Administrative Fee 0.90%
--------------------------------------------------------------------------------
Distribution (12b-1) Fees 0.01%
--------------------------------------------------------------------------------
Other Expenses 0%
--------------------------------------------------------------------------------
Total Series Annual Operating Expenses 0.91%
--------------------------------------------------------------------------------
* As discussed under "Management of the Trust," the Trustees have adopted a
Brokerage Enhancement Plan (the "Plan") in accordance with the provisions of
Rule 12b-1 under the Investment Company Act of 1940. The Plan uses the available
brokerage commissions to promote the sale of shares of the Trust. While the
brokerage commission rates and amounts paid by the Trust are not expected to
increase as a result of the Distribution Plan, the staff of the Securities and
Exchange Commission has taken the position that commission amounts received
under the Distribution Plan should be reflected as distribution expenses of the
Series. The distribution fee noted is an estimate and therefore it is not
possible to determine with accuracy actual amounts that will be received by the
Series under the Plan.
Expense Example. This example is intended to help you compare the cost of
investing in the Series with the cost of investing in other mutual funds. Also,
this example does not reflect the expenses of the Qualified Plan. The table
below shows the expenses you would pay on a $10,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period. This
illustration is hypothetical and is not intended to be representative of past or
future performance of the Series. The example also assumes that the Series
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
--------------------------------------------------------------------------------
Expense Example
--------------------------------------------------------------------------------
1 Year $93
--------------------------------------------------------------------------------
3 Years $290
--------------------------------------------------------------------------------
5 Years $504
--------------------------------------------------------------------------------
10 Years $1,120
--------------------------------------------------------------------------------
Additional Information About the Other Investment Strategies, Other Investments
and Risks of the Series. 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 issuers. 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 partnership 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. SBAM's business offices are located at 7 World Trade
Center, New York, New York 10048.
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 and Chief Investment Officer - Fixed Income 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.
<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 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.
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 and shows how performance
has varied from year to year. The table shows the Series' annual returns and
compares them to a broad based index since these shares were first offered. 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 insurance contract. Those
charges, which are described in the variable insurance 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.
Annual Total Returns as of December 31
2.58% 9.16% 9.40% -2.50%
[Insert Chart]
1996 1997 1998 1999
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, 1999
----------------------------------------------------
1 year Life of Series*
Salomon Brothers/JNL U.S. Government
& Quality Bond Series -2.50% 5.42%
Salomon Brothers Treasury Index -2.45% 6.08%
The Salomon Brothers Treasury Index is a broad-based, unmanaged index.
* The Series began operations on May 15, 1995.
Shareholder Transaction Expenses (fees paid directly from your investment)
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fee None
Exchange Fee None
Expenses. The table below shows certain expenses you will incur as a Series
investor, either directly or indirectly.
--------------------------------------------------------------------------------
Annual Series Operating Expenses (expenses that are deducted from Series assets)
--------------------------------------------------------------------------------
Management/Administrative Fee 0.80%
--------------------------------------------------------------------------------
Distribution (12b-1) Fees 0.01%
--------------------------------------------------------------------------------
Other Expenses 0%
--------------------------------------------------------------------------------
Total Series Annual Operating Expenses 0.81%
--------------------------------------------------------------------------------
* As discussed under "Management of the Trust," the Trustees have adopted a
Brokerage Enhancement Plan (the "Plan") in accordance with the provisions of
Rule 12b-1 under the Investment Company Act of 1940. The Plan uses the available
brokerage commissions to promote the sale of shares of the Trust. While the
brokerage commission rates and amounts paid by the Trust are not expected to
increase as a result of the Distribution Plan, the staff of the Securities and
Exchange Commission has taken the position that commission amounts received
under the Distribution Plan should be reflected as distribution expenses of the
Series. The distribution fee noted is an estimate and therefore it is not
possible to determine with accuracy actual amounts that will be received by the
Series under the Plan.
Expense Example. This example is intended to help you compare the cost of
investing in the Series with the cost of investing in other mutual funds. Also,
this example does not reflect the expenses of the Qualified Plan. The table
below shows the expenses you would pay on a $10,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period. This
illustration is hypothetical and is not intended to be representative of past or
future performance of the Series. The example also assumes that the Series
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
--------------------------------------------------------------------------------
Expense Example
--------------------------------------------------------------------------------
1 Year $83
--------------------------------------------------------------------------------
3 Years $259
--------------------------------------------------------------------------------
5 Years $450
--------------------------------------------------------------------------------
10 Years $1002
--------------------------------------------------------------------------------
Additional Information About the Other Investment Strategies, Other Investments
and Risks of the Series. 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.
<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 U.S. 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 can 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. Growth investing risk. Growth
companies usually invest a high portion of earnings in their
businesses, and may lack the dividends of value stocks that
can cushion prices in a falling market. Also, earnings
disappointments often lead to sharp declines in prices because
investors buy growth stocks in anticipation of superior
earnings growth.
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. In
addition, foreign investing involves less publicly available
information and more volatile or less liquid markets.
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. Foreign accounting may be
less revealing than American accounting practices. Foreign
regulation may be inadequate or irregular. 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 and shows how performance
has varied from year to year. The table shows the Series' annual returns and
compares them to a broad based index since these shares were first offered. 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 insurance contract. Those
charges, which are described in the variable insurance 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.
Annual Total Returns as of December 31
22.59% 29.47% 27.78% 21.77%
[Insert Chart]
1996 1997 1998 1999
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, 1999
----------------------------------------------------
1 year Life of Series*
T. Rowe Price/JNL Established Growth Series 21.77% 26.74%
S&P 500 Index 21.04% 26.95%
The S&P 500 Index is a broad-based, unmanaged index. * The Series began
operations on May 15, 1995.
Shareholder Transaction Expenses (fees paid directly from your investment)
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fee None
Exchange Fee None
Expenses. The table below shows certain expenses you will incur as a Series
investor, either directly or indirectly.
--------------------------------------------------------------------------------
Annual Series Operating Expenses (expenses that are deducted from Series assets)
--------------------------------------------------------------------------------
Management/Administrative Fee 0.93%
--------------------------------------------------------------------------------
Distribution (12b-1) Fees 0.02%
--------------------------------------------------------------------------------
Other Expenses 0%
--------------------------------------------------------------------------------
Total Series Annual Operating Expenses 0.95%
--------------------------------------------------------------------------------
* As discussed under "Management of the Trust," the Trustees have adopted a
Brokerage Enhancement Plan (the "Plan") in accordance with the provisions of
Rule 12b-1 under the Investment Company Act of 1940. The Plan uses the available
brokerage commissions to promote the sale of shares of the Trust. While the
brokerage commission rates and amounts paid by the Trust are not expected to
increase as a result of the Distribution Plan, the staff of the Securities and
Exchange Commission has taken the position that commission amounts received
under the Distribution Plan should be reflected as distribution expenses of the
Series. The distribution fee noted is an estimate and therefore it is not
possible to determine with accuracy actual amounts that will be received by the
Series under the Plan.
Expense Example. This example is intended to help you compare the cost of
investing in the Series with the cost of investing in other mutual funds. Also,
this example does not reflect the expenses of the Qualified Plan. The table
below shows the expenses you would pay on a $10,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period. This
illustration is hypothetical and is not intended to be representative of past or
future performance of the Series. The example also assumes that the Series
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
--------------------------------------------------------------------------------
Expense Example
--------------------------------------------------------------------------------
1 Year $97
--------------------------------------------------------------------------------
3 Years $303
--------------------------------------------------------------------------------
5 Years $525
--------------------------------------------------------------------------------
10 Years $1,166
--------------------------------------------------------------------------------
Additional Information About the Other 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. If the Series uses futures and
options, it is exposed to additional volatility and potential losses.
The Series may sell securities for a variety of reasons, such as to secure
gains, limit losses, or redeploy assets into more promising opportunities.
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
joined T. Rowe in 1992 and has been managing investments since 1987. Mr. Smith
has had responsibility for the day-to-day management of the Series since
February 21, 1997.
<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 at least 65% of its total assets, under normal market conditions in a
diversified portfolio of common stocks of medium-sized (mid-cap) U.S. companies
which the sub-adviser believes have the potential for above-average earnings
growth. The sub-adviser defines mid-cap companies as those 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. 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. However,
the Series will not automatically sell or cease to purchase stock of a company
it already owns just because the company's market capitalization grows or falls
outside this range.
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. Growth investing risk. Growth
companies usually invest a high portion of earnings in their
businesses, and may lack the dividends of value stocks that
can cushion prices in a falling market. Also, earnings
disappointments often lead to sharp declines in prices because
investors buy growth stocks in anticipation of superior
earnings growth.
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. In
addition, foreign investing involves less publicly available
information and more volatile or less liquid markets.
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. Foreign accounting may be
less revealing than American accounting practices. Foreign
regulation may be inadequate or irregular. Owning foreign
securities could cause the Series' performance to fluctuate
more than if it held only U.S. securities.
Stocks of mid-cap companies entail greater risk and are usually more volatile
than shares of larger companies. 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 and shows how performance
has varied from year to year. The table shows the Series' annual returns and
compares them to a broad based index since these shares were first offered. 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 insurance contract. Those
charges, which are described in the variable insurance 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.
Annual Total Returns as of December 31
23.47% 18.21% 21.49% 24.01%
[Insert Chart]
1996 1997 1998 1999
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, 1999
----------------------------------------------------
1 year Life of Series*
T. Rowe Price/JNL Mid-Cap Growth Series 24.01% 25.27%
S&P MidCap 400 Index 14.70% 21.41%
The S&P MidCap 400 Index is a broad-based, unmanaged index.
* The Series began operations on May 15, 1995.
Shareholder Transaction Expenses (fees paid directly from your investment)
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fee None
Exchange Fee None
Expenses. The table below shows certain expenses you will incur as a Series
investor, either directly or indirectly.
--------------------------------------------------------------------------------
Annual Series Operating Expenses (expenses that are deducted from Series assets)
--------------------------------------------------------------------------------
Management/Administrative Fee 1.03%
--------------------------------------------------------------------------------
Distribution (12b-1) Fees 0.01%
--------------------------------------------------------------------------------
Other Expenses 0%
--------------------------------------------------------------------------------
Total Series Annual Operating Expenses 1.04%
--------------------------------------------------------------------------------
Expense Example. This example is intended to help you compare the cost of
investing in the Series with the cost of investing in other mutual funds. Also,
this example does not reflect the expenses of the Qualified Plan. The table
below shows the expenses you would pay on a $10,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period. This
illustration is hypothetical and is not intended to be representative of past or
future performance of the Series. The example also assumes that the Series
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
--------------------------------------------------------------------------------
Expense Example
--------------------------------------------------------------------------------
1 Year $106
--------------------------------------------------------------------------------
3 Years $331
--------------------------------------------------------------------------------
5 Years $574
--------------------------------------------------------------------------------
10 Years $1,271
--------------------------------------------------------------------------------
* As discussed under "Management of the Trust," the Trustees have adopted a
Brokerage Enhancement Plan (the "Plan") in accordance with the provisions of
Rule 12b-1 under the Investment Company Act of 1940. The Plan uses the available
brokerage commissions to promote the sale of shares of the Trust. While the
brokerage commission rates and amounts paid by the Trust are not expected to
increase as a result of the Distribution Plan, the staff of the Securities and
Exchange Commission has taken the position that commission amounts received
under the Distribution Plan should be reflected as distribution expenses of the
Series. The distribution fee noted is an estimate and therefore it is not
possible to determine with accuracy actual amounts that will be received by the
Series under the Plan.
Additional Information About the Other 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 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. If the Series uses futures
and options, it is exposed to additional volatility and potential losses.
The Series may sell securities for a variety of reasons, such as to secure
gains, limit losses, or redeploy assets into more promising opportunities.
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>
T. Rowe Price/JNL Value Series
Investment Objective. The investment objective of the T. Rowe Price/JNL Value
Series is to provide long-term capital appreciation by investing in common
stocks believed to be undervalued. Income is a secondary objective.
Principal Investment Strategies. In taking a value approach to investment
selection, at least 65% of total assets will be invested in common stocks the
portfolio manager regards as undervalued. Stock holdings are expected to consist
primarily of large-company issues, but may also include smaller companies. In
selecting investments, the sub-adviser generally looks for the following:
o low price/earnings, price/book value, or price/cash flow
ratios relative to the S&P 500 Index, the company's peers, or
its own historic norm;
o low stock price relative to a company's underlying asset
values;
o a plan to improve the business through restructuring; and
o a sound balance sheet and other positive financial
characteristics.
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 small- and medium-company stocks generally involves greater
risks than investing in larger, more established ones.
o Value investing risk. The value approach carries the risk that
the market will not recognize a security's intrinsic value for
a long time, or that a stock judged to be undervalued may
actually be appropriately priced.
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. In
addition, foreign investing involves less publicly available
information and more volatile or less liquid markets.
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. Foreign accounting may be
less revealing than American accounting practices. Foreign
regulation may be inadequate or irregular. Owning foreign
securities could cause the Series' performance to fluctuate
more than if it held only U.S. securities.
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 Series sub-adviser must correctly predict
price movements, during the life of a derivative, of the
underlying asset in order to realize the desired results from
the investment. 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 price movements in the
rest of the portfolio.
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. This Series will commence investment operations on or about the
date of this Prospectus. Therefore, a bar chart and table have not been included
for this Series.
Shareholder Transaction Expenses (fees paid directly from your investment)
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fee None
Exchange Fee None
Expenses. The table below shows certain expenses you will incur as a Series
investor, either directly or indirectly.
--------------------------------------------------------------------------------
Annual Series Operating Expenses (expenses that are deducted from Series assets)
--------------------------------------------------------------------------------
Management/Administrative Fee 1.00%
--------------------------------------------------------------------------------
Distribution (12b-1) Fees .12%
--------------------------------------------------------------------------------
Other Expenses 0%
--------------------------------------------------------------------------------
Total Series Annual Operating Expenses 1.12%
--------------------------------------------------------------------------------
* As discussed under "Management of the Trust," the Trustees have adopted a
Brokerage Enhancement Plan (the "Plan") in accordance with the provisions of
Rule 12b-1 under the Investment Company Act of 1940. The Plan uses the available
brokerage commissions to promote the sale of shares of the Trust. While the
brokerage commission rates and amounts paid by the Trust are not expected to
increase as a result of the Distribution Plan, the staff of the Securities and
Exchange Commission has taken the position that commission amounts received
under the Distribution Plan should be reflected as distribution expenses of the
Series. The distribution fee noted is an estimate and therefore it is not
possible to determine with accuracy actual amounts that will be received by the
Series under the Plan.
Expense Example. This example is intended to help you compare the cost of
investing in the Series with the cost of investing in other mutual funds. Also,
this example does not reflect the expenses of the Qualified Plan. The table
below shows the expenses you would pay on a $10,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period. This
illustration is hypothetical and is not intended to be representative of past or
future performance of the Series. The example also assumes that the Series
operating expenses remain the same. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
--------------------------------------------------------------------------------
Expense Example
--------------------------------------------------------------------------------
1 Year $114
--------------------------------------------------------------------------------
3 Years $356
--------------------------------------------------------------------------------
5 Years $617
--------------------------------------------------------------------------------
10 Years $1,363
--------------------------------------------------------------------------------
COMPARABLE PERFORMANCE
Public Fund Performance
The T. Rowe Price/JNL Value Series has substantially similar investment
objectives, policies and investment strategies as certain mutual funds whose
shares are sold to the public. The T. Rowe Price Value Fund is a public mutual
fund managed by T. Rowe Price Associates, Inc., the same Sub-Adviser which
manages each of the corresponding Series.
The historical performance of the T. Rowe Price Value Fund is shown below. This
performance data should not be considered as an indication of future performance
of the Series. The public mutual fund performance figures shown below:
o reflects the historical fees and expenses paid by the T. Rowe
Value Fund and not those paid by the Series.
o do not reflect Contract fees or charges imposed by Jackson
National Life. Investors should refer to the separate account
prospectus for information describing the Contract fees and
charges. These fees and charges will have a detrimental effect
on Series performance.
The Series and their corresponding public mutual fund series are expected to
hold similar securities. However, their investment results are expected to
differ for the following reasons:
o differences in asset size and cash flow resulting from
purchases and redemptions of Series shares may result in
different security selections
o differences in the relative weightings of securities
o differences in the price paid for particular portfolio holdings
o differences relating to certain tax matters
However, the differences cited do not alter the conclusion that the Funds have
substantially similar investment objectives, policies and strategies.
The chart below shows performance information for the T. Rowe Price Value Fund,
a retail mutual fund managed by the Series' sub-advisor with assets of $851.4
million at 12/31/99.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------
Annualized Returns for the period ended 12/31/99 (1)
-------------------------------------------------------------------------------------------------------------
T. Rowe Price Value Fund Lipper Multi-Cap
Value Funds Average (2)
-------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1 Year 9.16% 6.34%
-------------------------------------------------------------------------------------------------------------
3 Years 14.66% 13.15%
-------------------------------------------------------------------------------------------------------------
5 Years 22.06% 18.12%
-------------------------------------------------------------------------------------------------------------
Since Inception* 21.61% 16.83%
-------------------------------------------------------------------------------------------------------------
</TABLE>
*September 30, 1994
(1) Source: T. Rowe Price Associates, Inc. Total returns were calculated using
the actual fees and expenses of the T. Rowe Value Fund. These fees and expenses
are less than the fees charged by the Series. The performance returns would have
been lower if the actual expenses of the Series had been used. The returns were
calculated using the standardized Securities and Exchange Commission method.
Actual account performance will vary depending on the size of a portfolio and
applicable fee schedule. Performance figures are based on historical performance
and do not guarantee future results. Performance for the T. Rowe Price/JNL Vale
Series will vary based on different fees, different implementation of investment
policies, different cash flows into and out of the portfolio and different
sizes.
(2) The Lipper Multi-Cap Value Funds Average consists of all the mutual funds in
this particular category as tracked by Lipper Inc. The Multi-Cap Value Fund
category includes funds that by portfolio practice, invest in a variety of
market capitalization ranges, without concentrating 75% of their equity assets
in any one market capitalization range over an extended period of time. A
Series' performance may be affected by risks specific to certain types of
investments, such as foreign securities, derivative investments, non-investment
grade debt securities, initial public offerings (IPOs) or companies with
relatively small market capitalizations. IPOs and other investment techniques
may have magnified performance impact on a Series with a small asset base. A
Series may not experience similar performance as its assets grow.
Additional Information About the Other Investment Strategies, Other Investments
and Risks of the Series. The Series may sell securities for a variety of
reasons, such as to secure gains, limit losses, or redeploy assets into more
promising opportunities.
The Series may invest up to 25% of its total assets (excluding reserves) in
foreign securities. Although the Series will invest primarily in common stocks,
the Series may invest in any type of security or instrument (including certain
potentially high-risk derivatives) whose investment characteristics are
consistent with the Series' investment program. These may include:
o preferred stocks
o convertible securities and warrants
o fixed income securities, including lower quality (high-yield,
high-risk bonds) commonly referred to as "junk bonds"
o hybrid instruments which combine the characteristics of
securities, futures and options
o private placements
If the Series uses futures and options, it is exposed to additional volatility
and potential losses.The SAI has more information about the Series' authorized
investments and strategies.
Sub-Adviser and Portfolio Management. The sub-adviser to the T. Rowe Price/JNL
Value 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 with the following members:
Brian C. Rogers, Chairman, Stephen W. Boesel, Richard P. Howard, Kara Cheseby
Landers, Robert W. Sharps, and David J. Wallack. The committee chairman has
day-to-day responsibility for managing the portfolio and works with the
committee in developing and executing the fund's investment program. Mr. Rogers
is the lead portfolio manager. He joined T. Rowe Price in 1982 and has been
managing investments since 1983.
<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.
<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), 1 Corporate Way, Lansing,
Michigan 48951, is the investment adviser to the Trust and provides the Trust
with professional investment supervision and management. JNFS is a wholly owned
subsidiary of Jackson National Life Insurance Company (JNL), which is in turn
wholly owned by Prudential plc, a life insurance company in the United Kingdom.
JNFS is a successor to Jackson National Financial Services, Inc. which 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, 1999, is
set forth below as an annual percentage of the net assets of the Series' fee.
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>
---------------------------------------------- ----------------------------------- ---------------------------------
Advisory Fee (Annual Rate Based
on Average Net Assets of each
Series Assets Series)
---------------------------------------------- ----------------------------------- ---------------------------------
<S> <C> <C>
JNL/Alger Growth Series $0 to $300 million .975%
$300 million to $500 million .95%
Over $500 million .90%
---------------------------------------------- ----------------------------------- ---------------------------------
JNL/Alliance Growth Series $0 to $250 million .775%
Over $250 million .70%
---------------------------------------------- ----------------------------------- ---------------------------------
JNL/Eagle Core Equity Series $0 to $50 million .90%
$50 million to $300 million .85%
Over $300 million .75%
---------------------------------------------- ----------------------------------- ---------------------------------
JNL/Eagle SmallCap Equity Series $0 to $150 million .95%
$150 million to $500 million .90%
Over $500 million .85%
---------------------------------------------- ----------------------------------- ---------------------------------
JNL/J.P. Morgan Enhanced S&P 500 Stock Index $0 to $25 million .80%
Series Over $25 million .75%
---------------------------------------------- ----------------------------------- ---------------------------------
JNL/J.P. Morgan International & Emerging $0 to $50 million .975%
Markets Series $50 million to $200 million .95%
$200 million to $350 million .90%
Over $350 million .85%
---------------------------------------------- ----------------------------------- ---------------------------------
JNL/Janus Aggressive Growth Series $0 to $150 million .95%
$150 million to $300 million .90%
Over $300 million .85%
---------------------------------------------- ----------------------------------- ---------------------------------
JNL/Janus Balanced Series $0 to $300 million .95%
Over $300 million .90%
---------------------------------------------- ----------------------------------- ---------------------------------
JNL/Janus Capital Growth Series $0 to $150 million .95%
$150 million to $300 million .90%
Over $300 million .85%
---------------------------------------------- ----------------------------------- ---------------------------------
JNL/Janus Global Equities Series $0 to $150 million 1.00%
$150 million to $300 million .95%
Over $300 million .90%
---------------------------------------------- ----------------------------------- ---------------------------------
JNL/Janus Growth & Income Series $0 to $300 million .95%
Over $300 million .90%
---------------------------------------------- ----------------------------------- ---------------------------------
JNL/PIMCO Total Return Bond Series All assets .70%
---------------------------------------------- ----------------------------------- ---------------------------------
JNL/Putnam Growth Series $0 to $150 million .90%
$150 million to $300 million .85%
Over $300 million .80%
---------------------------------------------- ----------------------------------- ---------------------------------
JNL/Putnam International Equity Series $0 to $50 million 1.10%
$50 million to $150 million 1.05%
$150 million to $300 million 1.00%
$300 million to $500 million .95%
Over $500 million .90%
---------------------------------------------- ----------------------------------- ---------------------------------
JNL/Putnam Value Equity Series $0 to $150 million .90%
$150 million to $300 million .85%
Over $300 million .80%
---------------------------------------------- ----------------------------------- ---------------------------------
JNL/Putnam Midcap Growth Series $0 to $300 million .95%
Over $300 million .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%
---------------------------------------------- ----------------------------------- ---------------------------------
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%
---------------------------------------------- ----------------------------------- ---------------------------------
JNL/S&P Conservative Growth Series $0 to $500 million .20%
Over $500 million .15%
---------------------------------------------- ----------------------------------- ---------------------------------
JNL/S&P Moderate Growth Series $0 to $500 million .20%
Over $500 million .15%
---------------------------------------------- ----------------------------------- ---------------------------------
JNL/S&P Aggressive Growth Series $0 to $500 million .20%
Over $500 million .15%
---------------------------------------------- ----------------------------------- ---------------------------------
JNL Enhanced Intermediate Bond Index Series All Assets .65%
---------------------------------------------- ----------------------------------- ---------------------------------
JNL International Index Series All Assets .60%
---------------------------------------------- ----------------------------------- ---------------------------------
JNL Russell 2000 Index Series All Assets .50%
---------------------------------------------- ----------------------------------- ---------------------------------
JNL S&P 500 Index Series All Assets .50%
---------------------------------------------- ----------------------------------- ---------------------------------
JNL S&P Mid Cap Value Series All Assets .50%
---------------------------------------------- ----------------------------------- ---------------------------------
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 $0 to $50 million .75%
$50 million to $150 million .70%
$150 million to $300 million .675%
$300 million to $500 million .65%
Over $500 million .625%
---------------------------------------------- ----------------------------------- ---------------------------------
PPM America/JNL High Yield Bond Series $0 to $50 million .75%
$50 million to $150 million .70%
$150 million to $300 million .675%
$300 million to $500 million .65%
Over $500 million .625%
---------------------------------------------- ----------------------------------- ---------------------------------
PPM America/JNL Money Market Series $0 to $150 million .60%
$150 million to $300 million .575%
$300 million to $500 million .55%
Over $500 million .525%
---------------------------------------------- ----------------------------------- ---------------------------------
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 $0 to $150 million .85%
$150 million to $500 million .80%
Over $500 million .75%
---------------------------------------------- ----------------------------------- ---------------------------------
Salomon Brothers/JNL High Yield Bond Series $0 to $50 million .80%
$50 million to $150 million .75%
Over $150 million .70%
---------------------------------------------- ----------------------------------- ---------------------------------
Salomon Brothers/JNL U.S. Government & $0 to $150 million .70%
Quality Bond Series $150 million to $300 million .65%
$300 million to $500 million .60%
Over $500 million .55%
---------------------------------------------- ----------------------------------- ---------------------------------
T. Rowe Price/JNL Established Growth Series $0 to $150 million .85%
Over $150 million .80%
---------------------------------------------- ----------------------------------- ---------------------------------
T. Rowe Price/JNL Mid-Cap Growth Series $0 to $150 million .95%
Over $150 million .90%
---------------------------------------------- ----------------------------------- ---------------------------------
T. Rowe Price/JNL Value Series $0 to $300 million .90%
Over $300 million .85%
---------------------------------------------- ----------------------------------- ---------------------------------
</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.
The Investment Adviser and the Trust has filed an application to obtain an
exemption from the Securities and Exchange Commission for a multi-manager
structure that allows the Investment Adviser to hire, replace or terminate
sub-advisers without the approval of shareholders. The order would also allow
the Investment Adviser to revise a sub-advisory agreement with the approval of
the Board of Trustees, but without shareholder approval. If a new sub-adviser is
hired, shareholders will receive information about the new sub-adviser within 90
days of the change. The order would allow the Series to operate more efficiently
and with greater flexibility. The Investment Adviser provides the following
oversight and evaluation services to the Series:
o performing initial due diligence on prospective sub-advisers
for the Series
o monitoring the performance of sub-advisers
o communicating performance expectations to the sub-advisers
o ultimately recommending to the Board of Trustees whether a
sub-adviser's contract should be renewed, modified or
terminated.
The Investment Adviser does not expect to recommend frequent changes of
sub-advisers. Although the Investment Adviser will monitor the performance of
the sub-advisers, there is no certainty that any sub-adviser or Series will
obtain favorable results at any given time.
ADMINISTRATIVE FEE
In addition to the investment advisory fee, each Series, except the JNL
International Index Series and the JNL/S&P Series, pays to JNFS an
Administrative Fee of .10% of the average daily net assets of the Series. The
JNL International Index Series pays an Administrative Fee of .15%. 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.
BROKERAGE ENHANCEMENT PLAN
Certain Series of the Trust has adopted, in accordance with the provisions of
Rule 12b-1 under the Investment Company Act of 1940, a Brokerage Enhancement
Plan (the "Plan"). The Plan uses available brokerage commissions to promote the
sale and distribution of Trust shares (through the sale of variable insurance
products funded by the Trust).
Under the Plan, the Trust may direct the Investment Adviser or a sub-adviser to
use certain broker-dealers for securities transactions. (The duty of best price
and execution still applies to these transactions.) These are broker-dealers
that have agreed either (1) to pay a portion of their commission from the sale
and purchase of securities to the series which will then be passed to the
Distributor or other introducing brokers ("Brokerage Payments"), or (2) to
provide brokerage credits, benefits or services ("Brokerage Credits"). The
Distributor will use all Brokerage Payments and Credits (other than a minimal
amount to defray its legal and administrative costs) to finance activities that
are meant to result in the sale of the Trust's shares, including:
o holding or participating in seminars and sales meetings
promoting the sale of the Trust's shares
o paying marketing fees requested by broker-dealers who sell the
variable insurance products
o training sales personnel
o creating and mailing advertising and sales literature
o financing any other activity that is intended to result in the
sale of Trust's shares.
The Plan permits the Brokerage Payments and Credits generated by securities
transactions from one series of the Trust to inure to the benefit of other
Series as well. The Plan is not expected to increase the brokerage costs of the
Trust. For more information about the Plan, please read the "Brokerage
Enhancement Plan" section of the Statement of Additional Information.
INVESTMENT IN TRUST SHARES
Shares of the Trust are currently sold to separate accounts (Accounts) of
Jackson National Life Insurance Company, 1 Corporate Way, Lansing, Michigan
48951, 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) and to qualified retirement plans. 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 and qualified retirement
plans, 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, except for the period ended
June 30, 2000, 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.
JNL/ALGER GROWTH SERIES
Financial Highlights (Unaudited)
<TABLE>
<CAPTION>
PERIOD FROM PERIOD FROM
SIX MONTHS APRIL 1, OCTOBER 16,
ENDED 1996 TO 1995* TO
JUNE 30, YEAR ENDED DECEMBER 31, DECEMBER 31, MARCH 31,
2000 1999 1998 1997 1996 1996
-------- -------- -------- ------- ------- ------
<S> <C> <C> <C> <C> <C> <C>
Selected Per Share Data
Net asset value, beginning of period .................... $22.91 $18.95 $13.56 $11.16 $10.38 $10.00
Income from operations:
Net investment income (loss) ............................ (0.01) (0.03) - (0.01) - -
Net realized and unrealized gains on investments ........ 1.05 6.42 6.20 2.93 0.78 0.38
-------- -------- -------- ------- ------- ------
Total income from operations ............................ 1.04 6.39 6.20 2.92 0.78 0.38
-------- -------- -------- ------- ------- ------
Less distributions:
From net investment income .............................. - - - - - -
From net realized gains on investment transactions ...... - (2.43) (0.81) (0.52) - -
-------- -------- -------- ------- ------- ------
Total distributions ..................................... - (2.43) (0.81) (0.52) - -
-------- -------- -------- ------- ------- ------
Net increase ............................................ 1.04 3.96 5.39 2.40 0.78 0.38
-------- -------- -------- ------- ------- ------
Net asset value, end of period .......................... $23.95 $22.91 $18.95 $13.56 $11.16 $10.38
======== ======== ======== ======= ======= ======
Total Return (a) ........................................ 4.54 % 33.80 % 45.66 % 26.20 % 7.51 % 3.80 %
Ratios and Supplemental Data:
Net assets, end of period (in thousands) ................ $495,632 $400,639 $164,948 $85,877 $38,252 $8,649
Ratio of expenses to average net assets (b) ............. 1.07 % 1.07 % 1.06 % 1.10 % 1.07 % 1.03 %
Ratio of net investment loss to average net assets (b) .. (0.09)% (0.22)% (0.02)% (0.07)% (0.02)% (0.17)%
Portfolio turnover ...................................... 45.53 % 122.58 % 121.39 % 125.44 % 59.92 % 50.85 %
Ratio information assuming no expense reimbursement:
Ratio of expenses to average net assets (b) ............. n/a n/a 1.06 % 1.10 % 1.19 % 1.89 %
Ratio of net investment loss to average net assets (b) .. n/a n/a (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 periods less than one year.
(b) Annualized for periods less than one year.
See notes to the financial statements.
<PAGE>
JNL/ALLIANCE GROWTH SERIES
Financial Highlights (Unaudited)
<TABLE>
<CAPTION>
PERIOD FROM
SIX MONTHS MARCH 2,
ENDED YEAR ENDED 1998* TO
JUNE 30, DECEMBER 31, DECEMBER 31,
2000 1999 1998
--------------- --------------- ---------------
<S> <C> <C> <C>
SELECTED PER SHARE DATA
NET ASSET VALUE, BEGINNING OF PERIOD ..................................... $ 16.64 $ 13.28 $ 10.00
--------------- --------------- ---------------
INCOME FROM OPERATIONS:
Net investment income (loss) ........................................... 0.01 (0.01) (0.01)
Net realized and unrealized gains on investments ....................... 0.34 3.76 3.29
--------------- --------------- ---------------
Total income from operations ........................................... 0.35 3.75 3.28
--------------- --------------- ---------------
LESS DISTRIBUTIONS:
From net investment income ............................................. - - -
From net realized gains on investment transactions ..................... - (0.39) -
--------------- --------------- ---------------
Total distributions .................................................... - (0.39) -
--------------- --------------- ---------------
Net increase ........................................................... 0.35 3.36 3.28
--------------- --------------- ---------------
NET ASSET VALUE, END OF PERIOD ........................................... $ 16.99 $ 16.64 $ 13.28
=============== =============== ===============
TOTAL RETURN (A) ......................................................... 2.10% 28.23% 32.80%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ............................... $ 74,302 $ 18,256 $ 4,573
Ratio of expenses to average net assets (b) ............................ 0.875% 0.875% 0.925%
Ratio of net investment income (loss) to average net assets (b) ........ 0.17% (0.07)% (0.08)%
Portfolio turnover ..................................................... 19.59% 51.15% 136.69%
RATIO INFORMATION ASSUMING NO EXPENSE REIMBURSEMENT:
Ratio of expenses to average net assets (b) ............................ n/a n/a 2.13%
Ratio of net investment loss to average net assets (b) ................. n/a n/a (1.28)%
</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 periods less than one year.
(b) Annualized for periods less than one year.
<PAGE>
JNL/EAGLE CORE EQUITY SERIES
Financial Highlights (Unaudited)
<TABLE>
<CAPTION>
PERIOD FROM
SIX MONTHS SEPTEMBER 16,
ENDED 1996* TO
JUNE 30, YEAR ENDED DECEMBER 31, DECEMBER 31,
2000 1999 1998 1997 1996
--------------- --------------- --------------- -------------- ---------------
<S> <C> <C> <C> <C> <C>
Selected Per Share Data
Net asset value, beginning of period .................... $ 18.47 $ 15.91 $ 13.75 $ 10.62 $ 10.00
--------- -------- -------- -------- --------
Income from operations:
Net investment income ................................... 0.05 0.11 0.10 0.08 0.03
Net realized and unrealized gains on investments and
options written ......................................... 0.62 3.63 2.17 3.35 0.62
--------- -------- -------- -------- --------
Total income from operations ............................ 0.67 3.74 2.27 3.43 0.65
--------- -------- -------- -------- --------
Less distributions:
From net investment income .............................. - (0.11) (0.09) (0.08) (0.03)
From net realized gains on investment transactions ...... - (1.07) (0.02) (0.22) -
--------- -------- -------- -------- --------
Total distributions ..................................... - (1.18) (0.11) (0.30) (0.03)
--------- -------- -------- -------- --------
Net increase ............................................ 0.67 2.56 2.16 3.13 0.62
--------- -------- -------- -------- --------
Net asset value, end of period .......................... $ 19.14 $ 18.47 $ 15.91 $ 13.75 $ 10.62
========= ======== ======== ======== ========
Total Return (a) ........................................ 3.63 % 23.55 % 16.54 % 32.35 % 6.47 %
Ratios and Supplemental Data:
Net assets, end of period (in thousands) ................ $ 119,735 $ 95,329 $ 37,169 $ 11,896 $ 1,954
Ratio of expenses to average net assets (b) ............. 0.97 % 0.99 % 1.05 % 1.05 % 1.05 %
Ratio of net investment income to average net assets (b) 0.60 % 0.97 % 1.07 % 1.00 % 1.10 %
Portfolio turnover ...................................... 104.07 % 124.71 % 67.04 % 51.48 % 1.36 %
Ratio information assuming no expense reimbursement:
Ratio of expenses to average net assets (b) ............. n/a n/a 1.17 % 1.54 % 4.57 %
Ratio of net investment income (loss) to average net
assets (b) .............................................. n/a n/a 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 periods less than one year.
(b) Annualized for periods less than one year.
<PAGE>
JNL/EAGLE SMALLCAP EQUITY SERIES
Financial Highlights (Unaudited)
<TABLE>
<CAPTION>
PERIOD FROM
SIX MONTHS SEPTEMBER 16,
ENDED 1996* TO
JUNE 30, YEAR ENDED DECEMBER 31, DECEMBER 31,
2000 1999 1998 1997 1996
---------------- ---------------- ------------------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Selected Per Share Data
Net asset value, beginning of period .................. $ 16.97 $ 14.82 $ 14.73 $ 11.54 $ 10.00
-------- -------- -------- -------- --------
Income from operations:
Net investment loss ................................... (0.03) (0.04) (0.06) (0.07) (0.01)
Net realized and unrealized gains on investments ...... 0.55 2.88 0.23 3.26 1.55
-------- -------- -------- -------- --------
Total income from operations .......................... 0.52 2.84 0.17 3.19 1.54
-------- -------- -------- -------- --------
Less distributions:
From net investment income ............................ - - - - -
From net realized gains on investment transactions .... - (0.69) (0.08) - -
-------- -------- -------- -------- --------
Total distributions ................................... - (0.69) (0.08) - -
-------- -------- -------- -------- --------
Net increase .......................................... 0.52 2.15 0.09 3.19 1.54
-------- -------- -------- -------- --------
Net asset value, end of period ........................ $ 17.49 $ 16.97 $ 14.82 $ 14.73 $ 11.54
======== ======== ======== ======== ========
Total Return (a) ...................................... 3.06 % 19.27 % 1.18 % 27.64 % 15.40 %
Ratios and Supplemental Data:
Net assets, end of period (in thousands) .............. $ 81,759 $ 61,504 $ 34,953 $ 13,493 $ 1,944
Ratio of expenses to average net assets (b) ........... 1.05 % 1.05 % 1.10 % 1.10 % 1.10 %
Ratio of net investment loss to average net assets (b) (0.42)% (0.35)% (0.42)% (0.54)% (0.26)%
Portfolio turnover .................................... 39.31 % 61.69 % 51.90 % 60.78 % 28.01 %
</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 periods less than one year.
(b) Annualized for periods less than one year.
<PAGE>
JNL/J.P. MORGAN ENHANCED S&P 500 STOCK INDEX SERIES
Financial Highlights (Unaudited)
<TABLE>
<CAPTION>
PERIOD FROM
SIX MONTHS MAY 16,
ENDED 1999* TO
JUNE 30, DECEMBER 31,
2000 1999
--------------- ---------------
SELECTED PER SHARE DATA
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ......................................... $ 10.58 $ 10.00
--------------- ---------------
INCOME FROM OPERATIONS:
Net investment income ...................................................... 0.02 0.03
Net realized and unrealized gains (losses) on investments .................. (0.22) 0.65
--------------- ---------------
Total income (loss) from operations ........................................ (0.20) 0.68
--------------- ---------------
LESS DISTRIBUTIONS:
From net investment income ................................................. - (0.03)
From net realized gains on investment transactions ......................... - (0.07)
--------------- ---------------
Total distributions ........................................................ - (0.10)
--------------- ---------------
Net increase (decrease) .................................................... (0.20) 0.58
--------------- ---------------
NET ASSET VALUE, END OF PERIOD ............................................... $ 10.38 $ 10.58
=============== ===============
TOTAL RETURN (A) ............................................................. (1.89)% 6.85%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ................................... $ 15,860 $ 5,341
Ratio of expenses to average net assets (b) ................................ 0.90% 0.90%
Ratio of net investment income to average net assets (b) ................... 0.57% 0.56%
Portfolio turnover ......................................................... 20.75% 34.39%
</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 periods less than one year.
(b) Annualized for periods less than one year.
<PAGE>
JNL/J.P. MORGAN INTERNATIONAL & EMERGING MARKETS SERIES
Financial Highlights (Unaudited)
<TABLE>
<CAPTION>
PERIOD FROM
SIX MONTHS MARCH 2,
ENDED YEAR ENDED 1998* TO
JUNE 30, DECEMBER 31, DECEMBER 31,
2000 1999 1998
---------------- ---------------- ----------------
<S> <C> <C> <C>
SELECTED PER SHARE DATA
NET ASSET VALUE, BEGINNING OF PERIOD ........................................ $ 13.15 $ 9.82 $ 10.00
---------------- ---------------- ----------------
INCOME FROM OPERATIONS:
Net investment income ..................................................... 0.04 0.06 0.08
Net realized and unrealized gains (losses) on investments
futures contracts and foreign currency related items .................... (0.44) 3.67 (0.20)
---------------- ---------------- ----------------
Total income (loss) from operations ....................................... (0.40) 3.73 (0.12)
---------------- ---------------- ----------------
LESS DISTRIBUTIONS:
From net investment income ................................................ - (0.21) (0.06)
From net realized gains on investment transactions ........................ - (0.19) -
---------------- ---------------- ----------------
Total distributions ....................................................... - (0.40) (0.06)
---------------- ---------------- ----------------
Net increase (decrease) ................................................... (0.40) 3.33 (0.18)
---------------- ---------------- ----------------
NET ASSET VALUE, END OF PERIOD .............................................. $ 12.75 $ 13.15 $ 9.82
================ ================ ================
TOTAL RETURN (A) ............................................................ (3.04)% 38.02% (1.24)%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) .................................. $ 10,034 $ 7,777 $ 4,997
Ratio of expenses to average net assets (b) ............................... 1.075% 1.075% 1.125%
Ratio of net investment income to average net assets (b) .................. 0.75% 0.53% 0.62%
Portfolio turnover ........................................................ 36.18% 66.82% 231.88%
RATIO INFORMATION ASSUMING NO EXPENSE REIMBURSEMENT:
Ratio of expenses to average net assets (b) ............................... n/a n/a 2.64%
Ratio of net investment loss to average net assets (b) .................... n/a n/a (0.90)%
</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 periods less than one year.
(b) Annualized for periods less than one year.
<PAGE>
JNL/JANUS AGGRESSIVE GROWTH SERIES
Financial Highlights (Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
2000 1999 1998 1997
--------------------------------------------------------
<S> <C> <C> <C> <C>
Selected Per Share Data
Net asset value, beginning of period ................ $ 39.97 $ 22.09 $ 14.53 $ 13.38
-------- -------- -------- --------
Income from operations:
Net investment income (loss) ........................ 0.01 (0.06) (0.06) 0.04
Net realized and unrealized gains (losses) on
investments and foreign currency related items ...... (1.08) 20.87 8.45 1.65
-------- -------- -------- --------
Total income (loss) from operations ................. (1.07) 20.81 8.39 1.69
-------- -------- -------- --------
Less distributions:
From net investment income .......................... - - (0.05) -
From net realized gains on investment transactions .. - (2.93) (0.78) (0.54)
Return of capital ................................... - - - -
-------- -------- -------- --------
Total distributions ................................. - (2.93) (0.83) (0.54)
-------- -------- -------- --------
Net increase (decrease) ............................. (1.07) 17.88 7.56 1.15
-------- -------- -------- --------
Net asset value, end of period ...................... $ 38.90 $ 39.97 $ 22.09 $ 14.53
======== ======== ======== ========
Total Return (a) .................................... (2.68)% 94.43 % 57.66 % 12.67 %
Ratios and Supplemental Data:
Net assets, end of period (in thousands) ............ 845,637 $ 654,546 $ 161,842 $ 78,870
Ratio of expenses to average net assets (b) ......... 0.98 % 1.01 % 1.10 % 1.10 %
Ratio of net investment income (loss) to average
net assets (b) ...................................... 0.01 % (0.40)% (0.35)% 0.39 %
Portfolio turnover .................................. 26.05 % 95.06 % 114.51 % 137.26 %
Ratio information assuming no expense reimbursement:
Ratio of expenses to average net assets (b) ......... n/a n/a 1.10 % 1.17 %
Ratio of net investment income (loss) to average
net assets (b) ...................................... n/a n/a (0.35)% 0.32 %
</TABLE>
PERIOD FROM PERIOD FROM
APRIL 1, MAY 15,
1996 TO 1995* TO
DECEMBER 31, MARCH 31,
1996 1996
----------------------------
Net asset value, beginning of period ................ $ 13.13 $ 10.00
Income from operations:
Net investment income (loss) ........................ 0.05 0.01
Net realized and unrealized gains (losses) on
investments and foreign currency related items ...... 1.10 3.53
Total income (loss) from operations ................. 1.15 3.54
Less distributions:
From net investment income .......................... (0.05) -
From net realized gains on investment transactions .. (0.71) (0.41)
Return of capital ................................... (0.14) -
Total distributions ................................. (0.90) (0.41)
Net increase (decrease) ............................. 0.25 3.13
Net asset value, end of period ...................... $ 13.38 $ 13.13
Total Return (a) .................................... 8.72 % 35.78 %
Ratios and Supplemental Data:
Net assets, end of period (in thousands) ............ $ 29,555 $ 8,527
Ratio of expenses to average net assets (b) ......... 1.09 % 1.09 %
Ratio of net investment income (loss) to average
net assets (b) ...................................... 0.77 % 0.27 %
Portfolio turnover .................................. 85.22 % 163.84 %
Ratio information assuming no expense reimbursement:
Ratio of expenses to average net assets (b) ......... 1.40 % 2.77 %
Ratio of net investment income (loss) to average
net assets (b) ...................................... 0.46 % (1.41)%
--------------------------------------------------------------------------------
* 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 periods less than one year.
(b) Annualized for periods less than one year.
<PAGE>
JNL/JANUS BALANCED SERIES
Financial Highlights (Unaudited)
PERIOD FROM
MAY 1,
2000* TO
JUNE 30,
2000
---------------
SELECTED PER SHARE DATA
NET ASSET VALUE, BEGINNING OF PERIOD ...................... $ 10.00
INCOME FROM OPERATIONS:
Net investment income ................................... 0.03
Net realized and unrealized loss on investments ......... (0.05)
---------------
Total loss from operations .............................. (0.02)
---------------
LESS DISTRIBUTIONS:
From net investment income .............................. -
From net realized gains on investment transactions ...... -
---------------
Total distributions ..................................... -
---------------
Net decrease ............................................ (0.02)
---------------
NET ASSET VALUE, END OF PERIOD ............................ $ 9.98
===============
(0.20)%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ................ $ 23,147
Ratio of expenses to average net assets (b) ............. 1.05%
Ratio of net investment income to average net
assets (b) .............................................. 2.47%
Portfolio turnover ...................................... 8.99%
--------------------------------------------------------------------------------
* 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 periods less than one year.
(b) Annualized for periods less than one year.
See notes to the financial statements.
<PAGE>
JNL/JANUS CAPITAL GROWTH SERIES
Financial Highlights (Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
2000 1999 1998 1997
----------------------------------------------------------
<S> <C> <C> <C> <C>
Selected Per Share Data
Net asset value, beginning of period .................. $ 43.62 $ 20.73 $ 16.50 $ 14.46
-------- -------- -------- --------
Income from operations:
Net investment income (loss) .......................... (0.12) (0.13) (0.12) (0.06)
Net realized and unrealized gains (losses)
on investments and foreign currency related items ..... (0.54) 25.85 5.92 2.23
-------- -------- -------- --------
Total income (loss) from operations ................... (0.66) 25.72 5.80 2.17
-------- -------- -------- --------
Less distributions:
From net investment income ............................ - - - (0.02)
From net realized gains on investment transactions .... - (2.83) (1.57) (0.04)
Return of capital ..................................... - - - (0.07)
-------- -------- -------- --------
Total distributions ................................... - (2.83) (1.57) (0.13)
-------- -------- -------- --------
Net increase (decrease) ............................... (0.66) 22.89 4.23 2.04
-------- -------- -------- --------
Net asset value, end of period ........................ $ 42.96 $ 43.62 $ 20.73 $ 16.50
======== ======== ======== ========
Total Return (a) ...................................... (1.51)% 124.19 % 35.16 % 15.01 %
Ratios and Supplemental Data:
Net assets, end of period (in thousands) .............. $ 702,531 $ 509,086 $ 111,037 $ 73,749
Ratio of expenses to average net assets (b) ........... 0.99 % 1.03 % 1.09 % 1.10 %
Ratio of net investment income (loss) to average
net assets (b) ........................................ (0.63)% (0.75)% (0.68)% (0.30)%
Portfolio turnover .................................... 73.88 % 102.26 % 128.95 % 131.43 %
Ratio information assuming no expense reimbursement:
Ratio of expenses to average net assets (b) ........... n/a n/a 1.09 % 1.11 %
Ratio of net investment income (loss) to average
net assets (b) ........................................ n/a n/a (0.68)% (0.31)%
</TABLE>
PERIOD FROM PERIOD FROM
APRIL 1, MAY 15,
1996 TO 1995* TO
DECEMBER 31, MARCH 31,
1996 1996
---------------------------
Selected Per Share Data
Net asset value, beginning of period .................. $ 13.86 $ 10.00
-------- --------
Income from operations:
Net investment income (loss) .......................... 0.06 -
Net realized and unrealized gains (losses)
on investments and foreign currency related items ..... 0.70 4.70
-------- --------
Total income (loss) from operations ................... 0.76 4.70
-------- --------
Less distributions:
From net investment income ............................ - -
From net realized gains on investment transactions .... (0.16) (0.84)
Return of capital ..................................... - -
-------- --------
Total distributions ................................... (0.16) (0.84)
-------- --------
Net increase (decrease) ............................... 0.60 3.86
-------- --------
Net asset value, end of period ........................ $ 14.46 $ 13.86
======== ========
Total Return (a) ...................................... 5.45 % 47.94 %
Ratios and Supplemental Data:
Net assets, end of period (in thousands) .............. $ 36,946 $ 9,578
Ratio of expenses to average net assets (b) ........... 1.09 % 1.09 %
Ratio of net investment income (loss) to average
net assets (b) ........................................ 0.91 % (0.49)%
Portfolio turnover .................................... 115.88 % 128.56 %
Ratio information assuming no expense reimbursement:
Ratio of expenses to average net assets (b) ........... 1.27 % 2.08 %
Ratio of net investment income (loss) to average
net assets (b) ........................................ 0.73 % (1.48)%
--------------------------------------------------------------------------------
* 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 periods less than one year.
(b) Annualized for periods less than one year.
<PAGE>
JNL/JANUS GLOBAL EQUITIES SERIES
Financial Highlights (Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
2000 1999 1998 1997
------------- -------------- -------------- ------------------
<S> <C> <C> <C> <C>
Selected Per Share Data
Net asset value, beginning of period ....................... $ 35.69 $ 22.11 $ 17.48 $ 15.20
-------- -------- -------- --------
Income from operations:
Net investment income ...................................... 0.01 - 0.04 0.07
Net realized and unrealized gains on investments and
foreign currency related items ............................. 0.37 14.27 4.66 2.84
-------- -------- -------- --------
Total income from operations ............................... 0.38 14.27 4.70 2.91
-------- -------- -------- --------
Less distributions:
From net investment income ................................. - - (0.07) -
From net realized gains on investment transactions ......... - (0.69) - (0.63)
Return of capital .......................................... - - - -
-------- -------- -------- --------
Total distributions ........................................ - (0.69) (0.07) (0.63)
-------- -------- -------- --------
Net increase ............................................... 0.38 13.58 4.63 2.28
-------- -------- -------- --------
Net asset value, end of period ............................. $ 36.07 $ 35.69 $ 22.11 $ 17.48
======== ======== ======== ========
Total Return (a) ........................................... 1.06 % 64.58 % 26.87 % 19.12 %
Ratios and Supplemental Data:
Net assets, end of period (in thousands) ................... $800,645 $597,241 $240,385 $151,050
Ratio of expenses to average net assets (b) ................ 1.03 % 1.06 % 1.14 % 1.15 %
Ratio of net investment income to average net assets (b) ... - % 0.01 % 0.13 % 0.33 %
Portfolio turnover ......................................... 28.90 % 61.60 % 81.46 % 97.21 %
Ratio information assuming no expense reimbursement:
Ratio of expenses to average net assets (b) ................ n/a n/a 1.30 % 1.37 %
Ratio of net investment income (loss) to average net
assets (b) ................................................. n/a n/a (0.03)% 0.11 %
</TABLE>
<TABLE>
<CAPTION>
PERIOD FROM PERIOD FROM
APRIL 1, MAY 15,
1996 TO 1995* TO
DECEMBER 31, MARCH 31,
1996 1996
------------- -----------------
<S> <C> <C>
Selected Per Share Data
Net asset value, beginning of period ........................ $ 13.75 $ 10.00
-------- --------
Income from operations:
Net investment income ....................................... 0.03 0.10
Net realized and unrealized gains on investments and
foreign currency related items .............................. 2.72 4.02
-------- --------
Total income from operations ................................ 2.75 4.12
-------- --------
Less distributions:
From net investment income ................................... (0.08) -
From net realized gains on investment transactions ........... (0.90) (0.37)
Return of capital ............................................ (0.32) -
-------- --------
Total distributions .......................................... (1.30) (0.37)
-------- --------
Net increase ................................................. 1.45 3.75
-------- --------
Net asset value, end of period .............................. $ 15.20 $ 13.75
======== ========
Total Return (a) ............................................. 19.99 % 41.51 %
Ratios and Supplemental Data:
Net assets, end of period (in thousands) ..................... $ 48,638 $ 16,141
Ratio of expenses to average net assets (b) .................. 1.14 % 1.15 %
Ratio of net investment income to average net assets (b) ..... 0.37 % 0.39 %
Portfolio turnover ........................................... 52.02 % 142.36 %
Ratio information assuming no expense reimbursement:
Ratio of expenses to average net assets (b) .................. 1.63 % 2.25 %
Ratio of net investment income (loss) to average net
assets (b) ................................................... (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 periods less than one year.
(b) Annualized for periods less than one year.
<PAGE>
JNL/JANUS GROWTH & INCOME SERIES
Financial Highlights (Unaudited)
<TABLE>
<CAPTION>
PERIOD FROM
SIX MONTHS MARCH 2,
ENDED YEAR ENDED 1998* TO
JUNE 30, DECEMBER 31, DECEMBER 31,
2000 1999 1998
--------------- --------------- ---------------
<S> <C> <C> <C>
SELECTED PER SHARE DATA
NET ASSET VALUE, BEGINNING OF PERIOD ............................................. $ 9.36 $ 9.00 $ 10.00
--------------- --------------- ---------------
INCOME FROM OPERATIONS:
Net investment income .......................................................... 0.05 0.09 0.07
Net realized and unrealized gains (losses) on investments, futures contracts,
options written and foreign currency related items ........................... (0.20) 0.36 (1.00)
--------------- --------------- ---------------
Total income (loss) from operations ............................................ (0.15) 0.45 (0.93)
--------------- --------------- ---------------
LESS DISTRIBUTIONS:
From net investment income ..................................................... - (0.09) (0.07)
From net realized gains on investment transactions ............................. - - -
--------------- --------------- ---------------
Total distributions ............................................................ - (0.09) (0.07)
--------------- --------------- ---------------
Net increase (decrease) ........................................................ (0.15) 0.36 (1.00)
--------------- --------------- ---------------
NET ASSET VALUE, END OF PERIOD ................................................... $ 9.21 $ 9.36 $ 9.00
=============== =============== ===============
TOTAL RETURN (A) ................................................................. (1.60)% 4.98% (9.31)%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ....................................... $ 15,012 $ 7,677 $ 4,311
Ratio of expenses to average net assets (b) .................................... 1.04% 1.025% 1.075%
Ratio of net investment income to average net assets (b) ....................... 1.48% 1.17% 1.01%
Portfolio turnover ............................................................. 188.28% 120.54% 129.99%
RATIO INFORMATION ASSUMING NO EXPENSE REIMBURSEMENT:
Ratio of expenses to average net assets (b) .................................... n/a n/a 2.16%
Ratio of net investment loss to average net assets (b) ......................... n/a n/a (0.08)%
</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 periods less than one year.
(b) Annualized for periods less than one year.
<PAGE>
JNL/PIMCO TOTAL RETURN BOND SERIES
Financial Highlights (Unaudited)
<TABLE>
<CAPTION>
PERIOD FROM
SIX MONTHS MARCH 2,
ENDED YEAR ENDED 1998* TO
JUNE 30, DECEMBER 31, DECEMBER 31,
2000 1999 1998
------------- -------------- ----------------
<S> <C> <C> <C>
SELECTED PER SHARE DATA
NET ASSET VALUE, BEGINNING OF PERIOD ...................................... $ 9.64 $ 10.16 $ 10.00
------------- -------------- ----------------
INCOME FROM OPERATIONS:
Net investment income ................................................... 0.23 0.49 0.31
Net realized and unrealized gains (losses) on
investments, futures contracts,
options written and foreign currency related items .................... 0.14 (0.52) 0.26
------------- -------------- ----------------
Total income (loss) from operations ..................................... 0.37 (0.03) 0.57
------------- -------------- ----------------
LESS DISTRIBUTIONS:
From net investment income .............................................. - (0.49) (0.31)
From net realized gains on investment transactions ...................... - - (0.10)
------------- -------------- ----------------
Total distributions ..................................................... - (0.49) (0.41)
------------- -------------- ----------------
Net increase (decrease) ................................................. 0.37 (0.52) 0.16
------------- -------------- ----------------
NET ASSET VALUE, END OF PERIOD ............................................ $ 10.01 $ 9.64 $ 10.16
============= ============== ================
TOTAL RETURN (A) .......................................................... 3.84% (0.26)% 5.70%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ................................ $ 14,396 $ 9,451 $ 6,133
Ratio of expenses to average net assets (b) ............................. 0.80% 0.80% 0.85%
Ratio of net investment income to average net assets (b) ................ 5.93% 5.41% 4.95%
Portfolio turnover ...................................................... 138.65% 91.12% 269.16%
RATIO INFORMATION ASSUMING NO EXPENSE REIMBURSEMENT:
Ratio of expenses to average net assets (b) ............................. n/a n/a 1.57%
Ratio of net investment income to average net assets (b) ................ n/a n/a 4.23%
</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 periods less than one year.
(b) Annualized for periods less than one year.
<PAGE>
JNL/PUTNAM GROWTH SERIES
Financial Highlights (Unaudited)
<TABLE>
<CAPTION>
Period from Period from
Six months April 1, May 15,
ended 1996 to 1995* to
June 30, Year ended December 31, December 31, March 31,
2000 1999 1998 1997 1996 1996
-------------- ------------- -------------- ------------- ---------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Selected Per Share Data
Net asset value, beginning of period ....... $28.45 $22.88 $16.99 $14.21 $12.50 $10.00
-------------- ------------- -------------- ------------- ---------------- -----------
Income from operations:
Net investment income (loss) ............... (0.03) (0.04) (0.01) 0.04 0.04 0.01
Net realized and unrealized gains (losses)
on investments ............................ (0.66) 6.76 5.94 3.07 2.12 3.66
-------------- ------------- -------------- ------------- ---------------- -----------
Total income (loss) from operations ........ (0.69) 6.72 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 ............................... - (1.15) (0.03) (0.31) (0.40) (1.17)
-------------- ------------- -------------- ------------- ---------------- -----------
Total distributions ........................ - (1.15) (0.04) (0.33) (0.45) (1.17)
-------------- ------------- -------------- ------------- ---------------- -----------
Net increase (decrease) .................... (0.69) 5.57 5.89 2.78 1.71 2.50
-------------- ------------- -------------- ------------- ---------------- -----------
Net asset value, end of period ............. $27.76 $28.45 $22.88 $16.99 $14.21 $12.50
============== ============= ============== ============= ================ ===========
Total Return (a) ........................... (2.43)% 29.41% 34.93% 21.88% 17.28% 37.69%
Ratios and Supplemental Data:
Net assets, end of period (in thousands) ... $543,416 454,393 $182,097 $83,612 $22,804 $2,518
Ratio of expenses to average net
assets (b)(c) .............................. 0.95% 0.97% 1.01% 1.13% 1.04% 0.95%
Ratio of net investment income (loss)
to average net assets (b) .................. (0.26)% (0.21)% (0.07)% 0.31% 0.94% 0.28%
Portfolio turnover ......................... 31.06% 74.67% 70.55% 194.81% 184.33% 255.03%
Ratio information assuming no expense
reimbursement:
Ratio of expenses to average net assets (b) n/a n/a 1.01% 1.13% 1.27% 5.38%
Ratio of net investment income (loss)
to average net assets(b) ................... n/a n/a (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 periods less than one year.
(b) Annualized for periods less than one year.
(c) For the year ended December 31, 1997, the ratio of expenses to average net
assets excluding non-operating expenses was 1.05%.
<PAGE>
JNL/PUTNAM INTERNATIONAL EQUITY SERIES
Financial Highlights (Unaudited)
<TABLE>
<CAPTION>
Period from Period from
Six months April 1, May 15,
ended 1996 to 1995* to
June 30, Year ended December 31, December 31, March 31,
2000 1999 1998 1997 1996 1996
------------ ----------- --------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Selected Per Share Data
Net asset value, beginning of period ..................... $16.79 $13.62 $12.09 $12.08 $11.25 $10.00
------------ ----------- --------- ----------- ------------ ------------
Income from operations:
Net investment income .................................... 0.08 0.09 0.16 0.09 0.06 0.04
Net realized and unrealized gains (losses) on investments
and foreign cy related items ............................ (0.83) 4.28 1.58 0.23 0.90 1.21
------------ ----------- --------- ----------- ------------ ------------
Total income (loss) from operations ...................... (0.75) 4.37 1.74 0.32 0.96 1.25
------------ ----------- --------- ----------- ------------ ------------
Less distributions:
From net investment income ............................... - (0.16) (0.19) (0.08) (0.12) -
From net realized gains on investment transactions ....... - (1.04) (0.02) (0.23) (0.01) -
------------ ----------- --------- ----------- ------------ ------------
Total distributions ...................................... - (1.20) (0.21) (0.31) (0.13) -
------------ ----------- --------- ----------- ------------ ------------
Net increase (decrease) .................................. (0.75) 3.17 1.53 0.01 0.83 1.25
------------ ----------- --------- ----------- ------------ ------------
Net asset value, end of period ........................... $16.04 $16.79 $13.62 $12.09 $12.08 $11.25
============ =========== ========= =========== ============ ============
Total Return (a) ......................................... (4.47)% 32.11% 14.43% 2.65% 8.54% 12.50%
Ratios and Supplemental Data:
Net assets, end of period (in thousands) ................. $122,945 $105,034 $70,927 $78,685 $48,204 $24,211
Ratio of expenses to average net assets (b) .............. 1.17% 1.18% 1.23% 1.24% 1.25% 1.25%
Ratio of net investment income to average net
assets (b) ............................................... 0.86% 0.63% 0.88% 0.74% 1.09% 0.78%
Portfolio turnover ....................................... 112.00% 26.19% 16.39% 18.81% 5.93% 16.45%
Ratio information assuming no expense reimbursement:
Ratio of expenses to average net assets (b) .............. n/a n/a 1.28 % 1.32 % 1.29 % 2.14 %
Ratio of net investment income (loss) to average
net assets (b) ........................................... n/a n/a 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 periods less than one year.
(b) Annualized for periods less than one year.
<PAGE>
JNL/PUTNAM MIDCAP GROWTH SERIES
Financial Highlights (Unaudited)
Period from
May 1,
2000* to
June 30,
2000
---------------
Selected Per Share Data
Net asset value, beginning of period ................. $ 10.00
---------------
Income from operations:
Net investment income .............................. -
Net realized and unrealized gains on
investments ....................................... 0.15
---------------
Total income from operations 0.15
---------------
Less distributions:
From net investment income ......................... -
From net realized gains on investment transactions . -
---------------
Total distributions ................................ -
---------------
Net increase ....................................... 0.15
---------------
Net asset value, end of period ....................... $ 10.15
===============
Total Return (a) 1.50%
Ratios and Supplemental Data:
Net assets, end of period (in thousands) ........... $ 24,094
Ratio of expenses to average net assets (b) 1.05%
Ratio of net investment income to average
net assets (b) .................................. 2.47%
Portfolio turnover ................................. 18.31%
-------------------------------------------------------------------------------
* 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 periods less than one year.
(b) Annualized for periods less than one year.
<PAGE>
JNL/PUTNAM VALUE EQUITY SERIES
Financial Highlights (Unaudited)
<TABLE>
<CAPTION>
Period from Period from
Six months April 1, May 15,
ended 1996 to 1995* to
June 30, Year ended December 31, December 31, March 31,
2000 1999 1998 1997 1996 1996
------------ ------------ ------------ ------------ ------------ --------
<S> <C> <C> <C> <C> <C> <C>
Selected Per Share Data
Net asset value, beginning of period ................. $ 16.78 $ 18.24 $ 16.82 $ 14.50 $ 12.77 $ 10.00
------------ ------------ ------------ ------------ ------------ --------
Income from operations:
Net investment income .............................. 0.08 0.19 0.16 0.13 0.10 0.23
Net realized and unrealized gains
(losses)on investments ............................ (0.35) (0.38) 1.94 3.03 1.97 2.86
------------ ------------ ------------ ------------ ------------ --------
Total income (loss) from operations ............... (0.27) (0.19) 2.10 3.16 2.07 3.09
Less distributions:
From net investment income ......................... - (0.20) (0.16) (0.13) (0.15) (0.17)
From net realized gains on investment transactions . - (1.07) (0.52) (0.71) (0.19) (0.15)
------------ ------------ ------------ ------------ ------------ --------
Total distributions ................................ - (1.27) (0.68) (0.84) (0.34) (0.32)
------------ ------------ ------------ ------------ ------------ --------
Net increase (decrease) ............................ (0.27) (1.46) 1.42 2.32 1.73 2.77
------------ ------------ ------------ ------------ ------------ --------
Net asset value, end of period ....................... $ 16.51 $ 16.78 $ 18.24 $ 16.82 $ 14.50 $ 12.77
=========== ============= ============ ============ ============ ========
Total Return (a) ..................................... (1.61)% (1.04)% 12.48% 21.82% 16.25% 31.14%
Ratios and Supplemental Data:
Net assets, end of period (in thousands) ........... $ 366,523 $ 319,454 $ 195,936 $ 108,565 $ 17,761 3,365
Ratio of expenses to average net assets (b) ........ 0.97% 0.98% 1.01% 1.03% 0.85% 0.87%
Ratio of net investment income to average net
assets (b) ....................................... 1.04% 1.19% 1.06% 1.43% 2.29% 2.33%
Portfolio turnover ................................. 53.66% 72.23% 77.80% 112.54% 13.71% 30.12%
Ratio information assuming no expense reimbursement:
Ratio of expenses to average net assets (b) ........ n/a n/a 1.01% 1.09% 1.53% 2.28%
Ratio of net investment income to average net
assets (b) ....................................... n/a n/a 1.06% 1.37% 1.61% 0.91%
--------------------------------------------------------------------------------
* 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 periods less than one year.
(b) Annualized for periods less than one year.
</TABLE>
<PAGE>
JNL/S&P CONSERVATIVE GROWTH SERIES I
Financial Highlights (Unaudited)
<TABLE>
<CAPTION>
PERIOD FROM
SIX MONTHS APRIL 9,
ENDED YEAR ENDED 1998* TO
JUNE 30, DECEMBER 31, DECEMBER 31,
2000 1999 1998
----------------- ----------------- ----------------
<S> <C> <C> <C>
SELECTED PER SHARE DATA
NET ASSET VALUE, BEGINNING OF PERIOD ....................................... $ 12.45 $ 10.47 $ 10.00
----------------- ----------------- ----------------
INCOME FROM OPERATIONS:
Net investment income .................................................... (0.20) 0.37 0.38
Net realized and unrealized gains on investments ......................... 0.49 1.67 0.09
----------------- ----------------- ----------------
Total income from operations ............................................. 0.29 2.04 0.47
----------------- ----------------- ----------------
LESS DISTRIBUTIONS:
From net investment income ............................................... - (0.06) -
From net realized gains on investment transactions ....................... - - -
----------------- ----------------- ----------------
Total distributions ...................................................... - (0.06) -
----------------- ----------------- ----------------
Net increase ............................................................. 0.29 1.98 0.47
----------------- ----------------- ----------------
NET ASSET VALUE, END OF PERIOD ............................................. $ 12.74 $ 12.45 $ 10.47
================= ================= ================
TOTAL RETURN (A) ........................................................... 2.33% 19.52% 4.70%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ................................. $ 107,213 $ 72,998 $ 10,026
Ratio of expenses to average net assets (b) .............................. 0.20% 0.20% 0.20%
Ratio of net investment income to average net assets (b) ................. 0.18% 10.35% 14.15%
Portfolio turnover ....................................................... 17.95% 12.96% 36.08%
</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 periods less than one year.
(b) Annualized for periods less than one year.
<PAGE>
JNL/S&P MODERATE GROWTH SERIES I
Financial Highlights (Unaudited)
<TABLE>
<CAPTION>
PERIOD FROM
SIX MONTHS APRIL 9,
ENDED YEAR ENDED 1998* TO
JUNE 30, DECEMBER 31, DECEMBER 31,
2000 1999 1998
---------------- ---------------- --------------
<S> <C> <C> <C>
SELECTED PER SHARE DATA
NET ASSET VALUE, BEGINNING OF PERIOD ................................. $ 13.42 $ 10.63 $ 10.00
---------------- ---------------- --------------
INCOME FROM OPERATIONS:
Net investment income ............................................. 0.02 0.46 0.36
Net realized and unrealized gain on investments ................... 0.25 2.38 0.27
---------------- ---------------- --------------
Total income from operations ...................................... 0.27 2.84 0.63
---------------- ---------------- --------------
LESS DISTRIBUTIONS:
From net investment income ........................................ - (0.05) -
From net realized gains on investment transactions ................ - - -
---------------- ---------------- --------------
Total distributions ............................................... - (0.05) -
---------------- ---------------- --------------
Net increase ...................................................... 0.27 2.79 0.63
---------------- ---------------- --------------
NET ASSET VALUE, END OF PERIOD ....................................... $ 13.69 $ 13.42 $ 10.63
================ ================ ==============
TOTAL RETURN (A) ..................................................... 2.01% 26.74% 6.30%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) .......................... $ 178,838 $ 110,608 $ 12,612
Ratio of expenses to average net assets (b) ....................... 0.20% 0.20% 0.20%
Ratio of net investment income (loss) to average net assets (b) ... (0.09)% 11.55% 13.74%
Portfolio turnover ................................................ 19.81% 17.15% 57.96%
</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 periods less than one year.
(b) Annualized for periods less than one year.
<PAGE>
JNL/S&P AGGRESSIVE GROWTH SERIES I
Financial Highlights (Unaudited)
<TABLE>
<CAPTION>
PERIOD FROM
SIX MONTHS APRIL 8,
ENDED YEAR ENDED 1998* TO
JUNE 30, DECEMBER 31, DECEMBER 31,
2000 1999 2000
------------------ ----------------- -----------------
<S> <C> <C> <C>
SELECTED PER SHARE DATA
NET ASSET VALUE, BEGINNING OF PERIOD ..................................... $ 14.69 $ 10.88 $ 10.00
------------------ ----------------- -----------------
INCOME FROM OPERATIONS:
Net investment income (loss) ........................................... (0.18) 0.64 0.27
Net realized and unrealized gains on investments ....................... 0.34 3.21 0.61
------------------ ----------------- -----------------
Total income from operations ........................................... 0.16 3.85 0.88
------------------ ----------------- -----------------
LESS DISTRIBUTIONS:
From net investment income ............................................. - (0.04) -
From net realized gains on investment transactions ..................... - - -
------------------ ----------------- -----------------
Total distributions .................................................... - (0.04) -
------------------ ----------------- -----------------
Net increase ........................................................... 0.16 3.81 0.88
------------------ ----------------- -----------------
NET ASSET VALUE, END OF PERIOD ........................................... $ 14.85 $ 14.69 $ 10.88
================== ================= =================
TOTAL RETURN (A) ......................................................... 1.09% 35.38% 8.80%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ............................... $ 76,933 $ 41,329 $ 4,425
Ratio of expenses to average net assets (b) ............................ 0.20% 0.20% 0.20%
Ratio of net investment income to average net assets (b) ............... (0.20)% 13.46% 7.34%
Portfolio turnover ..................................................... 28.87% 26.50% 126.18%
</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 periods less than one year.
(b) Annualized for periods less than one year.
<PAGE>
JNL/S&P VERY AGGRESSIVE GROWTH SERIES I
Financial Highlights (Unaudited)
<TABLE>
<CAPTION>
PERIOD FROM
SIX MONTHS APRIL 1,
ENDED YEAR ENDED 1998* TO
JUNE 30, DECEMBER 31, DECEMBER 31,
2000 1999 1998
------------------ ----------------- ---------------
<S> <C> <C> <C>
SELECTED PER SHARE DATA
NET ASSET VALUE, BEGINNING OF PERIOD $ 16.61 $ 11.19 $ 10.00
------------------ ----------------- ---------------
INCOME FROM OPERATIONS:
Net investment income (loss) (0.35) 0.88 0.24
Net realized and unrealized gains on investments ................... 0.50 4.59 0.95
------------------ ----------------- ---------------
Total income from operations ....................................... 0.15 5.47 1.19
------------------ ----------------- ---------------
LESS DISTRIBUTIONS:
From net investment income ......................................... - (0.04) -
From net realized gains on investment transactions ................. - (0.01) -
------------------ ----------------- ---------------
Total distributions ................................................ - (0.05) -
------------------ ----------------- ---------------
Net increase ....................................................... 0.15 5.42 1.19
------------------ ----------------- ---------------
NET ASSET VALUE, END OF PERIOD ....................................... $ 16.76 $ 16.61 $ 11.19
================== ================= ===============
TOTAL RETURN (A) ..................................................... 1.09% 48.86% 11.90%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ........................... $ 47,263 $ 23,588 $ 2,441
Ratio of expenses to average net assets (b) ........................ 0.20% 0.20% 0.20%
Ratio of net investment income to average net assets (b) ........... (0.20)% 16.71% 5.73%
Portfolio turnover ................................................. 34.30% 141.89% 121.03%
</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 periods less than one year.
(b) Annualized for periods less than one year.
<PAGE>
JNL/S&P EQUITY GROWTH SERIES I
Financial Highlights (Unaudited)
<TABLE>
<CAPTION>
PERIOD FROM
SIX MONTHS APRIL 13,
ENDED YEAR ENDED 1998* TO
JUNE 30, DECEMBER 31, DECEMBER 31,
2000 1999 1998
------------------ --------------- ---------------
<S> <C> <C> <C>
SELECTED PER SHARE DATA
NET ASSET VALUE, BEGINNING OF PERIOD ..................................... $ 15.21 $ 10.64 $ 10.00
------------------ --------------- ---------------
INCOME FROM OPERATIONS:
Net investment income (loss) ........................................... (0.39) 0.70 0.21
Net realized and unrealized gains on investments ....................... 0.53 3.89 0.43
------------------ --------------- ---------------
Total income from operations ............................................ 0.14 4.59 0.64
------------------ --------------- ---------------
LESS DISTRIBUTIONS:
From net investment income ............................................. - (0.02) -
From net realized gains on investment transactions ..................... - - -
------------------ --------------- ---------------
Total distributions .................................................... - (0.02) -
------------------ --------------- ---------------
Net increase ........................................................... 0.14 4.57 0.64
------------------ --------------- ---------------
NET ASSET VALUE, END OF PERIOD ........................................... $ 15.35 $ 15.21 $ 10.64
================== =============== ===============
TOTAL RETURN (A) ......................................................... 0.92% 43.19% 6.40%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ............................... $ 108,493 $ 60,879 $ 5,035
Ratio of expenses to average net assets (b) ............................ 0.20% 0.20% 0.20%
Ratio of net investment income to average net assets (b) ............... (0.20)% 14.02% 6.93%
Portfolio turnover ..................................................... 34.92% 34.62% 72.69%
</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 periods less than one year.
(b) Annualized for periods less than one year.
<PAGE>
JNL/S&P EQUITY AGGRESSIVE GROWTH SERIES I
Financial Highlights (Unaudited)
<TABLE>
<CAPTION>
PERIOD FROM
SIX MONTHS APRIL 15,
ENDED YEAR ENDED 1998* TO
JUNE 30, DECEMBER 31, DECEMBER 31,
2000 1999 1998
---------------- ----------------- -----------------
<S> <C> <C> <C>
SELECTED PER SHARE DATA
NET ASSET VALUE, BEGINNING OF PERIOD .................................... $ 15.56 $ 10.75 $ 10.00
---------------- ----------------- -----------------
INCOME FROM OPERATIONS:
Net investment income (loss) .......................................... (0.26) 0.79 0.21
Net realized and unrealized gains on investments ...................... 0.45 4.07 0.54
---------------- ----------------- -----------------
Total income from operations .......................................... 0.19 4.86 0.75
---------------- ----------------- -----------------
LESS DISTRIBUTIONS:
From net investment income ............................................ - (0.05) -
From net realized gains on investment transactions .................... - - -
---------------- ----------------- -----------------
Total distributions ................................................... - (0.05) -
---------------- ----------------- -----------------
Net increase .......................................................... 0.19 4.81 0.75
---------------- ----------------- -----------------
NET ASSET VALUE, END OF PERIOD .......................................... $ 15.75 $ 15.56 $ 10.75
================ ================= =================
TOTAL RETURN (A) ........................................................ 1.22% 45.25% 7.50%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) .............................. $ 32,845 $ 18,680 $ 3,238
Ratio of expenses to average net assets (b) ........................... 0.20% 0.20% 0.20%
Ratio of net investment income to average net assets (b) .............. (0.20)% 13.54% 7.01%
Portfolio turnover .................................................... 32.18% 41.60% 67.88%
</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 periods less than one year.
(b) Annualized for periods less than one year.
<PAGE>
JNL/S&P CONSERVATIVE GROWTH SERIES II
Financial Highlights (Unaudited)
<TABLE>
<CAPTION>
PERIOD FROM
SIX MONTHS APRIL 13,
ENDED YEAR ENDED 1998* TO
JUNE 30, DECEMBER 31, DECEMBER 31,
2000 1999 1998
----------------- -------------- --------------
<S> <C> <C> <C>
SELECTED PER SHARE DATA
NET ASSET VALUE, BEGINNING OF PERIOD ................................... $ 11.01 $ 9.54 $ 10.00
----------------- -------------- --------------
INCOME FROM OPERATIONS:
Net investment income (loss) ......................................... (0.10) 0.28 0.23
Net realized and unrealized gain (loss) on investments ............... 0.14 1.26 (0.69)
----------------- -------------- --------------
Total income (loss) from operations .................................. 0.04 1.54 (0.46)
----------------- -------------- --------------
LESS DISTRIBUTIONS:
From net investment income ........................................... - (0.07) -
From net realized gains on investment transactions ................... - - -
----------------- -------------- --------------
Total distributions .................................................. - (0.07) -
----------------- -------------- --------------
Net increase (decrease) .............................................. 0.04 1.47 (0.46)
----------------- -------------- --------------
NET ASSET VALUE, END OF PERIOD ......................................... $ 11.05 $ 11.01 $ 9.54
================= ============== ==============
TOTAL RETURN (A) ....................................................... 0.36% 16.14% (4.60)%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ............................. $ 8,190 $ 6,513 $ 1,710
Ratio of expenses to average net assets (b) .......................... 0.20% 0.20% 0.20%
Ratio of net investment income to average net assets (b) ............. (0.20)% 6.57% 2.29%
Portfolio turnover ................................................... 18.04% 55.32% 369.99%
</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 periods less than one year.
(b) Annualized for periods less than one year.
<PAGE>
JNL/S&P MODERATE GROWTH SERIES II
Financial Highlights (Unaudited)
<TABLE>
<CAPTION>
PERIOD FROM
SIX APRIL 13,
MONTHS
ENDED YEAR ENDED 1998* TO
JUNE DECEMBER 31, DECEMBER 31,
30,
2000 1999 1998
---------------- -------------- --------------
<S> <C> <C> <C>
SELECTED PER SHARE DATA
NET ASSET VALUE, BEGINNING OF PERIOD ........................................ $ 12.49 $ 10.22 $ 10.00
---------------- -------------- --------------
INCOME FROM OPERATIONS:
Net investment income (loss) ............................................. (0.14) 0.35 0.17
Net realized and unrealized gain on investments .......................... 0.23 1.98 0.05
---------------- -------------- --------------
Total income from operations
............................................................................ 0.09 2.33 0.22
---------------- -------------- --------------
LESS DISTRIBUTIONS:
From net investment income ............................................... - (0.06) -
From net realized gains on investment transactions ....................... - - -
---------------- -------------- --------------
Total distributions ...................................................... - (0.06) -
---------------- -------------- --------------
Net increase ............................................................. 0.09 2.27 0.22
---------------- -------------- --------------
NET ASSET VALUE, END OF PERIOD .............................................. $ 12.58 $ 12.49 $ 10.22
================ ============== ==============
TOTAL RETURN (A) ............................................................ 0.72% 22.77% 2.20%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ................................. $ 14,758 $ 10,450 $ 2,856
Ratio of expenses to average net assets (b) .............................. 0.20% 0.20% 0.20%
Ratio of net investment income to average net assets (b) ................. (0.20)% 6.14% 4.09%
Portfolio turnover ....................................................... 17.20% 38.38% 103.28%
</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 periods less than one year.
(b) Annualized for periods less than one year.
<PAGE>
JNL/S&P Aggressive Growth Series II
Financial Highlights (Unaudited)
<TABLE>
<CAPTION>
Period from
Six months April 13,
ended Year ended 1998* to
June 30, December 31, December 31,
2000 1999 1998
------------------ --------------- ---------------
<S> <C> <C> <C>
Selected Per Share Data
Net asset value, beginning of period ................................... $12.92 $10.05 $10.00
------------------ --------------- ---------------
Income from operations:
Net investment income (loss) ........................................... (0.18) 0.41 0.10
Net realized and unrealized gains (losses) on investments .............. 0.24 2.47 (0.05)
------------------ --------------- ---------------
Total income from operations ........................................... 0.06 2.88 0.05
------------------ --------------- ---------------
Less distributions:
From net investment income ............................................. - (0.01) -
From net realized gains on investment transactions ..................... - - -
------------------ --------------- ---------------
Total distributions .................................................... - (0.01) -
------------------ --------------- ---------------
Net increase ........................................................... 0.06 2.87 0.05
------------------ --------------- ---------------
Net asset value, end of period ......................................... $12.98 $12.92 $10.05
================== =============== ===============
Total Return (a) ....................................................... 0.46 % 28.66 % 0.50 %
Ratios and Supplemental Data:
Net assets, end of period (in thousands) ............................... $5,092 $3,379 $267
Ratio of expenses to average net assets (b) ............................ 0.20 % 0.20 % 0.20 %
Ratio of net investment income to average net assets (b) ............... (0.20)% 7.97 % 2.19 %
Portfolio turnover ..................................................... 30.39 % 72.67 % 165.71 %
</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 periods less than one year.
(b) Annualized for periods less than one year.
<PAGE>
JNL/S&P VERY AGGRESSIVE GROWTH SERIES II
Financial Highlights (Unaudited)
<TABLE>
<CAPTION>
PERIOD FROM
SIX MONTHS APRIL 13,
ENDED, YEAR ENDED 1998* TO
JUNE 30, DECEMBER 31, DECEMBER 31,
2000 1999 1998
----------------- ----------------- ----------------
<S> <C> <C> <C>
SELECTED PER SHARE DATA
NET ASSET VALUE, BEGINNING OF PERIOD .................................... $ 15.37 $ 10.80 $ 10.00
----------------- ----------------- ----------------
INCOME FROM OPERATIONS:
Net investment income (loss) .......................................... (0.13) 0.57 0.07
Net realized and unrealized gains on investments ...................... 0.24 4.01 0.73
----------------- ----------------- ----------------
Total income from operations .......................................... 0.11 4.58 0.80
----------------- ----------------- ----------------
LESS DISTRIBUTIONS:
From net investment income ............................................ - - -
From net realized gains on investment transactions .................... - (0.01) -
----------------- ----------------- ----------------
Total distributions ................................................... - (0.01) -
----------------- ----------------- ----------------
Net increase .......................................................... 0.11 4.57 0.80
----------------- ----------------- ----------------
NET ASSET VALUE, END OF PERIOD .......................................... $ 15.48 $ 15.37 $ 10.80
================= ================= ================
TOTAL RETURN (A) ........................................................ 0.72% 42.42% 8.00%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) .............................. $ 3,853 $ 3,122 $ 155
Ratio of expenses to average net assets (b) ........................... 0.20% 0.20% 0.20%
Ratio of net investment income to average net assets (b) .............. (0.20)% 9.04% 0.91%
Portfolio turnover .................................................... 18.13% 145.99% 208.66%
</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 periods less than one year.
(b) Annualized for periods less than one year.
<PAGE>
JNL/S&P EQUITY GROWTH SERIES II
Financial Highlights (Unaudited)
<TABLE>
<CAPTION>
PERIOD FROM
SIX MONTHS APRIL 13,
ENDED YEAR ENDED 1998* TO
JUNE 30, DECEMBER 31, DECEMBER 31,
2000 1999 1998
----------------- ----------------- -----------------
<S> <C> <C> <C>
SELECTED PER SHARE DATA
NET ASSET VALUE, BEGINNING OF PERIOD .................................... $ 13.67 $ 10.04 $ 10.00
----------------- ----------------- -----------------
INCOME FROM OPERATIONS:
Net investment income (loss) .......................................... (0.28) 0.50 0.08
Net realized and unrealized gains (losses) on investments ............. 0.36 3.14 (0.04)
----------------- ----------------- -----------------
Total income from operations .......................................... 0.08 3.64 0.04
----------------- ----------------- -----------------
LESS DISTRIBUTIONS:
From net investment income ............................................ - (0.01) -
From net realized gains on investment transactions .................... - - -
----------------- ----------------- -----------------
Total distributions ................................................... - (0.01) -
----------------- ----------------- -----------------
Net increase .......................................................... 0.08 3.63 0.04
----------------- ----------------- -----------------
NET ASSET VALUE, END OF PERIOD .......................................... $ 13.75 $ 13.67 $ 10.04
================= ================= =================
TOTAL RETURN (A) ........................................................ 0.59% 36.29% 0.40%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) .............................. $ 9,921 $ 4,733 $ 600
Ratio of expenses to average net assets (b) ........................... 0.20% 0.20% 0.20%
Ratio of net investment income to average net assets (b) .............. (0.20)% 10.87% 1.82%
Portfolio turnover .................................................... 10.94% 59.07% 121.14%
</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 periods less than one year.
(b) Annualized for periods less than one year.
<PAGE>
JNL/S&P EQUITY AGGRESSIVE GROWTH SERIES II
Financial Highlights (Unaudited)
<TABLE>
<CAPTION>
PERIOD FROM
SIX MONTHS APRIL 23,
ENDED YEAR ENDED 1998* TO
JUNE 30, DECEMBER 31, DECEMBER 31,
2000 1999 1998
--------------- ------------------ -----------------
<S> <C> <C> <C>
SELECTED PER SHARE DATA
NET ASSET VALUE, BEGINNING OF PERIOD .................................... $ 14.44 $ 10.36 $ 10.00
--------------- ------------------ -----------------
INCOME FROM OPERATIONS:
Net investment income (loss) .......................................... (0.39) 0.54 0.07
Net realized and unrealized gains on investments ...................... 0.51 3.56 0.29
--------------- ------------------ -----------------
Total income from operations .......................................... 0.12 4.10 0.36
--------------- ------------------ -----------------
LESS DISTRIBUTIONS:
From net investment income (loss) ..................................... - (0.02) -
From net realized gains on investment transactions .................... - - -
--------------- ------------------ -----------------
Total distributions ................................................... - (0.02) -
--------------- ------------------ -----------------
Net increase .......................................................... 0.12 4.08 0.36
--------------- ------------------ -----------------
NET ASSET VALUE, END OF PERIOD .......................................... $ 14.56 $ 14.44 $ 10.36
=============== ================== =================
TOTAL RETURN (A) ........................................................ 0.83% 39.61% 3.60%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) .............................. $ 2,714 $ 946 $ 224
Ratio of expenses to average net assets (b) ........................... 0.20% 0.20% 0.20%
Ratio of net investment income to average net assets (b) .............. (0.20)% 7.76% 1.22%
Portfolio turnover .................................................... 22.07% 202.45% 157.21%
</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 periods less than one year.
(b) Annualized for periods less than one year.
<PAGE>
JNL/S&P AGGRESSIVE GROWTH SERIES
Financial Highlights (Unaudited)
PERIOD FROM
JANUARY 13,
2000* TO
JUNE 30,
2000
---------------
SELECTED PER SHARE DATA
NET ASSET VALUE, BEGINNING OF PERIOD ........................ $ 10.00
---------------
INCOME FROM OPERATIONS:
Net investment income ..................................... -
Net realized and unrealized gains on investments .......... 0.85
---------------
Total income from operations .............................. 0.85
---------------
LESS DISTRIBUTIONS:
From net investment income ................................ -
From net realized gains on investment transactions ........ -
---------------
Total distributions ....................................... -
---------------
Net increase .............................................. 0.85
---------------
NET ASSET VALUE, END OF PERIOD .............................. $ 10.85
===============
TOTAL RETURN (A) ............................................ 8.50%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) .................. $ 10,328
Ratio of expenses to average net assets (b) ............... 0.20%
Ratio of net investment income to average net assets (b) .. (0.20)%
Portfolio turnover ........................................ 15.46%
--------------------------------------------------------------------------------
* 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 periods less than one year.
(b) Annualized for periods less than one year.
<PAGE>
JNL/S&P CONSERVATIVE GROWTH SERIES
Financial Highlights (Unaudited)
PERIOD FROM
JANUARY 26,
2000* TO
JUNE 30,
2000
---------------
SELECTED PER SHARE DATA
NET ASSET VALUE, BEGINNING OF PERIOD ....................... $ 10.00
---------------
INCOME FROM OPERATIONS:
Net investment income .................................... -
Net realized and unrealized gains on investments ......... 0.22
---------------
Total income from operations ............................. 0.22
---------------
LESS DISTRIBUTIONS:
From net investment income ............................... -
From net realized gains 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) ................. $ 5,481
Ratio of expenses to average net assets (b) .............. 0.20%
Ratio of net investment loss to average net assets (b) ... (0.02)%
Portfolio turnover ....................................... 13.62%
--------------------------------------------------------------------------------
* 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 periods less than one year.
(b) Annualized for periods less than one year.
<PAGE>
JNL/S&P MODERATE GROWTH SERIES
Financial Highlights (Unaudited)
PERIOD FROM
JANUARY 13,
2000* TO
JUNE 30,
2000
---------------
SELECTED PER SHARE DATA
NET ASSET VALUE, BEGINNING OF PERIOD ......................... $ 10.00
---------------
INCOME FROM OPERATIONS:
Net investment income ...................................... -
Net realized and unrealized gains on investments ........... 0.21
---------------
Total income from operations ............................... 0.21
---------------
LESS DISTRIBUTIONS:
From net investment income ................................. -
From net realized gains on investment transactions ......... -
---------------
Total distributions ........................................ -
---------------
Net increase ............................................... 0.21
---------------
NET ASSET VALUE, END OF PERIOD ............................... $ 10.21
===============
TOTAL RETURN (A) ............................................. 2.10%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ................... $ 11,426
Ratio of expenses to average net assets (b) ................ 0.20%
Ratio of net investment income to average net assets (b) ... (0.20)%
Portfolio turnover ......................................... 10.60%
--------------------------------------------------------------------------------
* 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 periods less than one year.
(b) Annualized for periods less than one year.
<PAGE>
LAZARD/JNL MID CAP VALUE SERIES
Financial Highlights (Unaudited)
<TABLE>
<CAPTION>
PERIOD FROM
SIX MONTHS MARCH 2,
ENDED YEAR ENDED 1998* TO
JUNE 30, DECEMBER 31, DECEMBER 31,
2000 1999 1998
--------------- --------------- ---------------
<S> <C> <C> <C>
SELECTED PER SHARE DATA
NET ASSET VALUE, BEGINNING OF PERIOD ....................................... $ 9.63 $ 9.21 $ 10.00
--------------- --------------- ---------------
INCOME FROM OPERATIONS:
Net investment income .................................................... 0.01 0.02 0.03
Net realized and unrealized gains (losses) on investments ................ 0.67 0.42 (0.79)
--------------- --------------- ---------------
Total income (loss) from operations ...................................... 0.68 0.44 (0.76)
--------------- --------------- ---------------
LESS DISTRIBUTIONS:
From net investment income ............................................... - (0.02) (0.03)
From net realized gains on investment transactions ....................... - - -
--------------- --------------- ---------------
Total distributions ...................................................... - (0.02) (0.03)
--------------- --------------- ---------------
Net increase (decrease) .................................................. 0.68 0.42 (0.79)
--------------- --------------- ---------------
NET ASSET VALUE, END OF PERIOD ............................................. $ 10.31 $ 9.63 $ 9.21
=============== =============== ===============
TOTAL RETURN (A) ........................................................... 7.06% 4.77% (7.64)%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ................................. $ 9,466 $ 6,394 $ 4,731
Ratio of expenses to average net assets (b) .............................. 1.075% 1.075% 1.125%
Ratio of net investment income to average net assets (b) ................. 0.34% 0.25% 0.34%
Portfolio turnover ....................................................... 70.70% 118.56% 70.72%
RATIO INFORMATION ASSUMING NO EXPENSE REIMBURSEMENT:
Ratio of expenses to average net assets (b) .............................. n/a n/a 1.85%
Ratio of net investment loss to average net assets (b) ................... n/a n/a (0.38)%
</TABLE>
<PAGE>
LAZARD/JNL SMALL CAP VALUE SERIES
Financial Highlights (Unaudited)
<TABLE>
<CAPTION>
PERIOD FROM
SIX MONTHS MARCH 2,
ENDED YEAR ENDED 1998* TO
JUNE 30, DECEMBER 31, DECEMBER 31,
2000 1999 1998
--------------- --------------- --------------
<S> <C> <C> <C>
SELECTED PER SHARE DATA
NET ASSET VALUE, BEGINNING OF PERIOD ................................ $ 8.84 $ 8.70 $ 10.00
--------------- --------------- --------------
INCOME FROM OPERATIONS:
Net investment income (loss) ...................................... (0.01) 0.03 (0.01)
Net realized and unrealized gains (losses) on investments ......... 0.45 0.14 (1.28)
--------------- --------------- --------------
Total income (loss) from operations ............................... 0.46 0.17 (1.29)
--------------- --------------- --------------
LESS DISTRIBUTIONS:
From net investment income ........................................ - (0.03) -
From net realized gains on investment transactions ................ - - -
Return of capital ................................................. - - (0.01)
--------------- --------------- --------------
Total distributions ............................................... - (0.03) (0.01)
--------------- --------------- --------------
Net increase (decrease) ........................................... 0.46 0.14 (1.30)
--------------- --------------- --------------
NET ASSET VALUE, END OF PERIOD ...................................... $ 9.30 $ 8.84 $ 8.70
=============== =============== ==============
TOTAL RETURN (A) .................................................... 5.20% 1.96% (12.92)%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) .......................... $ 10,212 $ 6,313 $ 4,804
Ratio of expenses to average net assets (b) ....................... 1.15% 1.15% 1.20%
Ratio of net investment income (loss) to average net assets (b) ... 0.47% 0.43% (0.04)%
Portfolio turnover ................................................ 24.60% 53.35% 40.15%
RATIO INFORMATION ASSUMING NO EXPENSE REIMBURSEMENT:
Ratio of expenses to average net assets (b) ....................... n/a n/a 1.89%
Ratio of net investment loss to average net assets (b) ............ n/a n/a (0.73)%
</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 periods less than one year.
(b) Annualized for periods less than one year. See notes to the financial
statements.
<PAGE>
PPM AMERICA/JNL BALANCED SERIES
Financial Highlights (Unaudited)
<TABLE>
<CAPTION>
PERIOD FROM PERIOD FROM
SIX MONTHS APRIL 1, MAY 15,
ENDED 1996 TO 1995* TO
JUNE 30, YEAR ENDED DECEMBER 31, DECEMBER 31, MARCH 31,
2000 1999 1998 1997 1996 1996
------------- ------------- ----------- ------------ ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER SHARE DATA
NET ASSET VALUE, BEGINNING OF PERIOD ............... $ 12.60 $ 13.48 13.06 11.92 $ 11.17 $ 10.00
------------- ------------- ----------- ------------ ------------- -----------
INCOME FROM OPERATIONS:
Net investment income ............................ 0.25 0.44 0.47 0.36 0.10 0.25
Net realized and unrealized gains (losses) on
investments .................................... (0.66) (0.45) 0.84 1.83 0.98 1.40
------------- ------------- ----------- ------------ ------------- -----------
Total income (loss) from operations .............. (0.41) (0.01) 1.31 2.19 1.08 1.65
------------- ------------- ----------- ------------ ------------- -----------
LESS DISTRIBUTIONS:
From net investment income ....................... - (0.44) (0.47) (0.36) (0.15) (0.19)
From net realized gains on investment transactions - (0.43) (0.42) (0.69) (0.18) (0.29)
------------- ------------- ----------- ------------ ------------- -----------
Total distributions .............................. - (0.87) (0.89) (1.05) (0.33) (0.48)
------------- ------------- ----------- ------------ ------------- -----------
Net increase (decrease) .......................... (0.41) (0.88) 0.42 1.14 0.75 1.17
------------- ------------- ----------- ------------ ------------- -----------
NET ASSET VALUE, END OF PERIOD ..................... $ 12.19 $ 12.60 $ 13.48 $ 13.06 $ 11.92 $ 11.17
============= ============= =========== ============ ============= ===========
TOTAL RETURN (A) ................................... (3.25)% (0.11)% 10.06% 18.43% 9.72% 16.60%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ......... $ 140,223 $ 143,012 $ 95,974 $ 59,694 $ 24,419 $ 4,761
Ratio of expenses to average net assets (b) ...... 0.82% 0.82% 0.85% 0.93% 1.04% 1.01%
Ratio of net investment income to average net
assets (b) ..................................... 4.18% 3.71% 3.87% 3.72% 2.39% 2.99%
Portfolio turnover ............................... 12.12% 35.02% 33.74% 160.88% 158.15% 115.84%
RATIO INFORMATION ASSUMING NO EXPENSE REIMBURSEMENT:
Ratio of expenses to average net assets (b) ...... n/a n/a 0.85% 0.94% 1.22% 3.71%
Ratio of net investment income to average net
assets (b) ..................................... n/a n/a 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 periods less than one year.
(b) Annualized for periods less than one year.
<PAGE>
PPM AMERICA/JNL HIGH YIELD BOND SERIES
Financial Highlights (Unaudited)
<TABLE>
<CAPTION>
PERIOD FROM PERIOD FROM
SIX MONTHS APRIL 1, MAY 15,
ENDED 1996 TO 1995* TO
JUNE 30, YEAR ENDED DECEMBER 31, DECEMBER 31, MARCH 31,
2000 1999 1998 1997 1996 1996
------------- ----------- ----------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER SHARE DATA
NET ASSET VALUE, BEGINNING OF PERIOD ............... $ 10.13 $ 10.89 $ 11.48 $ 10.67 $ 10.23 $ 10.00
------------- ----------- ----------- ------------ ------------- ------------
INCOME FROM OPERATIONS:
Net investment income ............................ 0.50 0.88 0.91 0.59 0.51 0.73
Net realized and unrealized gains (losses)
on investments ................................. (0.65) (0.76) (0.47) 1.02 0.64 0.04
------------- ----------- ----------- ------------ ------------- ------------
Total income (loss) from operations .............. (0.15) 0.12 0.44 1.61 1.15 0.77
------------- ----------- ----------- ------------ ------------- ------------
LESS DISTRIBUTIONS:
From net investment income ....................... - (0.88) (0.91) (0.59) (0.69) (0.54)
From net realized gains on investment transactions - - (0.12) (0.21) (0.02) -
------------- ----------- ----------- ------------ ------------- ------------
Total distributions .............................. - (0.88) (1.03) (0.80) (0.71) (0.54)
------------- ----------- ----------- ------------ ------------- ------------
Net increase (decrease) .......................... (0.15) (0.76) (0.59) 0.81 0.44 0.23
------------- ----------- ----------- ------------ ------------- ------------
NET ASSET VALUE, END OF PERIOD ..................... $ 9.98 $ 10.13 $ 10.89 $ 11.48 $ 10.67 $ 10.23
============= =========== =========== ============ ============= ============
TOTAL RETURN (A) ................................... (1.48)% 1.09% 3.84% 15.05% 11.24% 7.82%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ......... $ 148,258 $ 147,023 $ 101,485 $ 62,712 $ 13,396 $ 6,156
Ratio of expenses to average net assets (b) ...... 0.82% 0.82% 0.83% 0.90% 0.88% 0.88%
Ratio of net investment income to average net
assets (b) ....................................... 10.14% 9.22% 8.62% 8.15% 8.64% 8.34%
Portfolio turnover ............................... 31.49% 61.03% 129.85% 189.25% 113.08% 186.21%
RATIO INFORMATION ASSUMING NO EXPENSE REIMBURSEMENT:
Ratio of expenses to average net assets (b) ...... n/a n/a 0.83% 0.90% 1.21% 1.50%
Ratio of net investment income to average net
assets (b) ..................................... n/a n/a 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 periods less than one year.
(b) Annualized for periods less than one year.
<PAGE>
PPM AMERICA/JNL MONEY MARKET SERIES
Financial Highlights (Unaudited)
<TABLE>
<CAPTION>
PERIOD FROM PERIOD FROM
SIX MONTHS APRIL 1, MAY 15,
ENDED 1996 TO 1995* TO
JUNE 30, YEAR ENDED DECEMBER 31, DECEMBER 31, MARCH 31,
2000 1999 1998 1997 1996 1996
--------------- ------------- --------------- ---------------- --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER SHARE DATA
NET ASSET VALUE, BEGINNING OF PERIOD ... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------------- ------------- --------------- ---------------- --------------- ------------
INCOME FROM OPERATIONS:
Net investment income ................ 0.03 0.05 0.05 0.05 0.04 0.04
--------------- ------------- --------------- ---------------- --------------- ------------
LESS DISTRIBUTIONS:
From net investment income ........... (0.03) (0.05) (0.05) (0.05) (0.04) (0.04)
--------------- ------------- --------------- ---------------- --------------- ------------
Net increase ......................... - - - - - -
--------------- ------------- --------------- ---------------- --------------- ------------
NET ASSET VALUE, END OF PERIOD ......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
=============== ============= =============== ================ =============== ============
TOTAL RETURN (A) ....................... 2.74% 4.67% 4.99% 5.01% 3.61% 4.59%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands) ........................ $ 147,342 $ 164,446 $ 56,349 $ 41,808 $ 23,752 $ 6,816
Ratio of expenses to average net
assets (b) ........................ 0.70% 0.70% 0.74% 0.75% 0.75% 0.75%
Ratio of net investment income to
average net assets (b) ............ 5.46% 4.63% 4.87% 4.92% 4.75% 5.06%
RATIO INFORMATION ASSUMING NO EXPENSE:
Ratio of expenses to average net
assets (b) ........................ n/a n/a 0.75% 0.76% 0.85% 1.30%
Ratio of net investment income to
average net assets (b) ............ n/a n/a 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 periods less than one year.
(b) Annualized for periods less than one year.
<PAGE>
SALOMON BROTHERS/JNL BALANCED SERIES
Financial Highlights (Unaudited)
<TABLE>
<CAPTION>
PERIOD ENDED
SIX MONTHS MARCH 2,
ENDED YEAR ENDED 1998* TO
JUNE 30, DECEMBER 31, DECEMBER 31,
2000 1999 1998
---------------- --------------- ---------------
<S> <C> <C> <C>
SELECTED PER SHARE DATA
NET ASSET VALUE, BEGINNING OF PERIOD ...................................... $ 10.11 $ 10.38 $ 10.00
---------------- --------------- ---------------
INCOME FROM OPERATIONS:
Net investment income ................................................... 0.22 0.28 0.21
Net realized and unrealized gains (losses) on investments ............... 0.11 (0.27) 0.38
---------------- --------------- ---------------
Total income from operations ........................................... 0.33 0.01 0.59
---------------- --------------- ---------------
LESS DISTRIBUTIONS:
From net investment income .............................................. - (0.28) (0.21)
From net realized gains on investment transactions ...................... - - -
---------------- --------------- ---------------
Total distributions ..................................................... - (0.28) (0.21)
---------------- --------------- ---------------
Net increase (decrease) ................................................. 0.33 (0.27) 0.38
---------------- --------------- ---------------
NET ASSET VALUE, END OF PERIOD ............................................ $ 10.44 $ 10.11 $ 10.38
================ =============== ===============
TOTAL RETURN (A) .......................................................... 3.26% 0.09% 5.91%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) ................................ $ 10,354 $ 7,517 $ 3,297
Ratio of expenses to average net assets (b) ............................. 0.90% 0.90% 0.95%
Ratio of net investment income to average net assets (b) ................ 5.06% 3.54% 3.49%
Portfolio turnover ...................................................... 19.41% 59.53% 128.41%
RATIO INFORMATION ASSUMING NO EXPENSE REIMBURSEMENT:
Ratio of expenses to average net assets (b) ............................. n/a n/a 2.38%
Ratio of net investment income to average net assets (b) ................ n/a n/a 2.06%
</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 periods less than one year.
(b) Annualized for periods less than one year.
<PAGE>
Salomon Brothers/JNL Global Bond Series
Financial Highlights (Unaudited)
<TABLE>
<CAPTION>
Period from Period from
Six months April 1, May 15,
ended 1996 to 1995* to
June 30, Year ended December 31, December 31, March 31,
2000 1999 1998 1997 1996 1996
------------- --------------- ------------ ------------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
Selected Per Share Data
Net asset value, beginning of period ......... $ 10.25 $ 10.67 $ 11.12 $ 10.63 $ 10.46 $ 10.00
------------- --------------- ------------ ------------- ------------ ----------
Income from operations:
Net investment income ...................... 0.36 0.62 0.72 0.54 0.42 0.81
Net realized and unrealized gains (losses)
on investments and foreign currency
related items ......................... (0.14) (0.42) (0.45) 0.59 0.70 0.24
------------- --------------- ------------ ------------- ------------ ----------
Total income from operations ............... 0.22 0.20 0.27 1.13 1.12 1.05
------------- --------------- ------------ ------------- ------------ ----------
Less distributions:
From net investment income ................. - (0.62) (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 ........................ - (0.62) (0.72) (0.64) (0.95) (0.59)
Net increase (decrease) .................... 0.22 (0.42) (0.45) 0.49 0.17 0.46
------------- --------------- ------------ ------------- ------------ ----------
Net asset value, end of period ............... $ 10.47 $ 10.25 $ 10.67 $ 11.12 $ 10.63 $ 10.46
============= =============== ============ ============= ============ ==========
Total Return (a) ............................. 2.15% 1.87% 2.46% 10.66% 10.68% 10.74%
Ratios and Supplemental Data:
Net assets, end of period (in thousands) ... $96,747 $81,061 $ 48,167 $ 36,725 $ 12,483 $ 6,380
Ratio of expenses to average net assets (b)
(c) ...................................... 0.95% 0.95% 1.00% 1.01% 0.99% 1.00%
Ratio of net investment income to average
net assets (b) ........................... 7.45% 7.22% 7.05% 6.83% 7.52% 9.01%
Portfolio turnover ......................... 71.99% 98.01% 261.87% 134.55% 109.85% 152.89%
Ratio information assuming no expense
reimbursement:
Ratio of expenses to average net assets (b) n/a n/a 1.01% 1.08% 1.44% 2.14%
Ratio of net investment income to average
net assets (b) ........................... n/a n/a 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 periods less than one year.
(b) Annualized for periods less than one year.
(c) For the year ended December 31, 1997, the ratio of expenses to average net
assets excluding non-operating expenses was 1.00%.
<PAGE>
Salomon Brothers/JNL High Yield Bond Series
Financial Highlights (Unaudited)
<TABLE>
<CAPTION>
Period from
Six months March 2,
ended Year ended 1998* to
June 30, December 31, December 31,
2000 1999 1998
--------------- ------------- -------------
<S> <C> <C> <C>
Selected Per Share Data
Net asset value, beginning of period ....................................... $ 8.71 $ 9.59 $ 10.00
--------------- ------------- -------------
Income from operations:
Net investment income .................................................... 0.32 0.71 0.54
Net realized and unrealized losses on investments ........................ (0.62) (0.88) (0.41)
--------------- -------------- ------------
Total income (loss) from operations ...................................... (0.30) (0.17) 0.13
--------------- -------------- ------------
Less distributions:
From net investment income ............................................... - (0.71) (0.54)
From net realized gains on investment transactions ....................... - - -
--------------- ------------- -------------
Total distributions ...................................................... - (0.71) (0.54)
--------------- ------------- -------------
Net decrease ............................................................. (0.30) (0.88) (0.41)
--------------- ------------- -------------
Net asset value, end of period ............................................. $ 8.41 $ 8.71 $ 9.59
=============== ============= ==============
Total Return (a) ........................................................... (3.44)% (1.76)% 1.32%
Ratios and Supplemental Data:
Net assets, end of period (in thousands) ................................. $ 13,655 $ 10,690 $ 7,388
Ratio of expenses to average net assets (b) .............................. 0.90% 0.90% 0.95%
Ratio of net investment income to average net assets (b) ................. 9.02% 8.74% 7.80%
Portfolio turnover ....................................................... 21.35% 31.39% 37.45%
Ratio information assuming no expense reimbursement:
Ratio of expenses to average net assets (b) .............................. n/a n/a 1.39%
Ratio of net investment income to average net assets (b) ................. n/a n/a 7.36%
</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 periods less than one year.
(b) Annualized for periods less than one year.
<PAGE>
SALOMON BROTHERS/JNL U.S. GOVERNMENT & QUALITY BOND SERIES
Financial Highlights (Unaudited)
<TABLE>
<CAPTION>
PERIOD
PERIOD FROM FROM MAY
SIX MONTH APRIL 1, 15,
ENDED 1996 TO 1995* TO
JUNE 30, DECEMBER 31, MARCH 31,
2000 1999 1998 1997 1996 1996
------------- ------------ ------------- ------------- -------------- -----------
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER SHARE DATA
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.36 $ 11.15 $ 10.69 $ 10.20 $ 10.09 $ 10.00
------------- ------------ ------------- ------------- -------------- -----------
INCOME FROM OPERATIONS:
Net investment income 0.30 0.51 0.41 0.44 0.24 0.45
Net realized and unrealized gains (losses) on
investments 0.08 (0.79) 0.60 0.49 0.24 0.02
------------- ------------ ------------- ------------- -------------- -----------
Total income (loss) from operations 0.38 (0.28) 1.01 0.93 0.48 0.47
------------- ------------ ------------- ------------- -------------- -----------
LESS DISTRIBUTIONS:
From net investment income - (0.51) (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 - (0.51) (0.55) (0.44) (0.37) (0.38)
------------- ------------ ------------- ------------- -------------- -----------
Net increase (decrease) 0.38 (0.79) 0.46 0.49 0.11 0.09
------------- ------------ ------------- ------------- -------------- -----------
NET ASSET VALUE, END OF PERIOD $ 10.74 $ 10.36 $ 11.15 $ 10.69 $ 10.20 $ 10.09
============= ============ ============= ============= ============== ===========
TOTAL RETURN (A) 3.67% (2.50)% 9.40% 9.16% 4.82% 4.65%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $ 117,421 $ 106,329 $ 63,785 $ 25,389 $ 9,832 $ 3,007
Ratio of expenses to average net assets (b) (c) 0.80% 0.80% 1.28% 0.94% 0.84% 0.84%
Ratio of net investment income to average net
assets (b) 6.10% 5.45% 5.33% 5.99% 5.72% 5.41%
Portfolio turnover 50.76% 122.72% 429.70% 378.59% 218.50% 253.37%
RATIO INFORMATION ASSUMING NO EXPENSE
REIMBURSEMENT:
Ratio of expenses to average net assets (b) n/a n/a 1.29% 1.05% 1.37% 2.53%
Ratio of net investment income to average net
assets (b) n/a n/a 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 periods less than one year.
(b) Annualized for periods less than one year.
(c) For the years ended December 31, 1998 and 1997, the ratio of expenses to
average net assets excluding non-operating expenses was 0.85% for each
year.
<PAGE>
T. Rowe Price/JNL Established Growth Series
Financial Highlights (Unaudited)
<TABLE>
<CAPTION>
Period from Period from
Six months April 1, May 15,
ended 1996 to 1995* to
June 30, Year ended December 31, December 31, March 31,
2000 1999 1998 1997 1996 1996
--------- ------------ ---------- --------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Selected Per Share Data
Net asset value, beginning of period ....................... $21.70 $19.06 $15.62 $12.56 $11.36 $10.00
--------- ------------ ---------- --------- ------------ -----------
Income from operations:
Net investment income ...................................... - 0.03 0.05 0.06 0.03 0.07
Net realized and unrealized gains on investments and
foreign currency related items ............................. 1.70 4.12 4.29 3.64 1.81 2.68
--------- ------------ ---------- --------- ------------ -----------
Total income from operations ............................... 1.70 4.15 4.34 3.70 1.84 2.75
--------- ------------ ---------- --------- ------------ -----------
Less distributions:
From net investment income ................................. - (0.03) (0.06) (0.03) (0.04) (0.06)
From net realized gains on investment transactions ......... - (1.48) (0.84) (0.61) (0.09) (1.33)
Return of capital .......................................... - - - - (0.51) -
--------- ------------ ---------- --------- ------------ -----------
Total distributions ........................................ - (1.51) (0.90) (0.64) (0.64) (1.39)
--------- ------------ ---------- --------- ------------ -----------
Net increase ............................................... 1.7 2.64 3.44 3.06 1.2 1.36
--------- ------------ ---------- --------- ------------ -----------
Net asset value, end of period ............................. $23.40 $21.70 $19.06 $15.62 $12.56 $11.36
========= ============ ========== ========= ============ ===========
Total Return (a) ........................................... 7.83 % 21.77 % 27.78 % 29.47 % 16.12 % 28.23 %
Ratios and Supplemental Data:
Net assets, end of period (in thousands) ................... $415,651 $351,338 $216,599 $124,022 $32,291 $8,772
Ratio of expenses to average net assets (b) ................ 0.92 % 0.93 % 0.95 % 0.98 % 1.00 % 1.00 %
Ratio of net investment income to average net assets (b) ... - 0.16 % 0.38 % 0.43 % 0.59 % 0.75 %
Portfolio turnover ......................................... 39.95 % 61.45 % 54.93 % 47.06 % 36.41 % 101.13 %
Ratio information assuming no expense reimbursement:
Ratio of expenses to average net assets (b) ................ n/a n/a 0.95 % 0.98 % 1.11 % 2.09 %
Ratio of net investment income (loss) to average net
assets (b) ................................................. n/a n/a 0.38 % 0.43 % 0.48 % (0.34)%
</TABLE>
--------------------------------------------------------------------------------
* Commencement of operations.
(a) Assumes investment at net asset value at the beginning of 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 periods less than one year.
(b) Annualized for periods less than one year.
<PAGE>
T. Rowe Price/JNL Mid-Cap Growth Series
Financial Highlights (Unaudited)
<TABLE>
<CAPTION>
Period from Period from
Six months April 1, May 15,
ended 1996 to 1995* to
June 30, Year ended December 31, December 31, March 31,
2000 1999 1998 1997 1996 1996
------------ ----------- ---------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $23.71 $20.43 $17.37 $14.89 $13.43 $10.00
------------ ----------- ---------- ------------ ------------- ------------
Income from operations:
Net investment income (loss) ....................... (0.03) (0.05) (0.07) (0.03) (0.05) 0.06
Net realized and unrealized gains on investments and
foreign currency related items ..................... 1.34 4.93 3.8 2.74 1.92 3.9
------------ ----------- ---------- ------------ ------------- ------------
Total income from operations ....................... 1.31 4.88 3.73 2.71 1.87 3.96
------------ ----------- ---------- ------------ ------------- ------------
Less distributions:
From net investment income ......................... - - - - -0.05 -
From net realized gains on investment transactions . - (1.60) (0.67) (0.23) (0.36) (0.53)
------------ ----------- ---------- ------------ ------------- ------------
Total distributions ................................ - (1.60) (0.67) (0.23) (0.41) (0.53)
------------ ----------- ---------- ------------ ------------- ------------
Net increase ....................................... 1.31 3.28 3.06 2.48 1.46 3.43
------------ ----------- ---------- ------------ ------------- ------------
Net asset value, end of period ..................... $25.02 $23.71 $20.43 $17.37 $14.89 $13.43
============ =========== ========== ============ ============= ============
Total Return (a) ................................... 5.53% 24.01% 21.49% 18.21% 13.91% 40.06%
Ratios and Supplemental Data:
Net assets, end of period (in thousands) .......... 355,790 $286,502 $189,636 $127,052 $47,104 $10,545
Ratio of expenses to average net assets (b) ....... 1.02% 1.03% 1.04% 1.06% 1.10% 1.10%
Ratio of net investment income (loss) to average net
assets (b) ........................................ (0.25)% (0.28)% (0.37)% (0.26)% 0.18)% 0.82%
Portfolio turnover ................................ 28.00% 56.68% 50.92% 41.43% 25.05% 66.04%
Ratio information assuming no expense reimbursement:
Ratio of expenses to average net assets (b) ....... n/a n/a 1.04% 1.06% 1.14% 2.10%
Ratio of net investment loss to average net assets (b) n/a n/a (0.37)% (0.26)% (0.22)% (0.18)%
</TABLE>
--------------------------------------------------------------------------------
* Commencement of operations.
(a) Assumes investment at net asset value at the beginning of 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 periods less than one year.
(b) Annualized for periods less than one year.
<PAGE>
T. Rowe Price/JNL Value Series
Financial Highlights (Unaudited)
Period from
May 1,
2000* to
June 30,
2000
---------------
Selected Per Share Data
Net asset value, beginning of period ................. $ 10.00
---------------
Income from operations:
Net investment income .............................. 0.03
Net realized and unrealized losses on
investments and foreign currency related items .... (.38)
---------------
Total loss from operations ......................... (0.35)
---------------
Less distributions:
From net investment income ......................... -
From net realized gains on investment transactions . -
---------------
Total distributions ................................ -
---------------
Net decrease ....................................... (0.35)
---------------
Net asset value, end of period ....................... $ 9.65
===============
Total Return (a) ..................................... (3.50)%
Ratios and Supplemental Data:
Net assets, end of period (in thousands) .......... $ 15,630
Ratio of expenses to average net assets (b) ....... 1.00%
Ratio of net investment income to average
net assets (b) .................................. 2.04%
Portfolio turnover ................................ 12.23%
-------------------------------------------------------------------------------
* 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 periods less than one year.
(b) Annualized for periods less than one year.
<PAGE>
PROSPECTUS
DECEMBER __, 2000
JNL SERIES TRUST
You can find more information about the Trust in:
o The Trust's Statement of Additional Information (SAI) dated
December __, 2000, 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), by electronic request ([email protected]) or by writing
the SEC's Public Reference Section Washington, D.C., 20549-0102. You can find
out about the operation of the Public Reference Section and copying charges by
calling 1-202-942-8090.
The Trust's SEC file number is: 811-8894
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
December __, 2000
JNL SERIES TRUST
================================================================================
This Statement of Additional Information (the "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 December __, 2000 (the "Prospectus"). Not all Series
described in this SAI may be available for investment. The Prospectus may be
obtained at no charge 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 34
Purchases, Redemptions and Pricing of Shares 47
Additional Information 48
Tax Status 50
Financial Statements 51
Appendix A - Ratings of Investments A-1
<PAGE>
GENERAL INFORMATION AND HISTORY
The JNL Series Trust (the "Trust") is an open-end management investment
company organized under the laws of the Commonwealth 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. Asset-backed securities represent interests
in pools of consumer loans and most are structured as pass-through 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 directly bear 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
interpretation, 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 (the "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 may 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 be
made. 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. Investors should
realize that investing in foreign securities involves certain special
considerations which are not typically associated with investing in U.S.
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). In
addition, foreign securities purchased by the Series, may be subject to foreign
government taxes, higher custodian fees, higher brokerage commissions and
dividend collection fees. 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 a 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 contrast, 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 its 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). REITs are pooled investment vehicles
whose assets consist primarily of interests in real estate and real estate
loans. The REITs in which a Series may invest include equity REITs, which own
real estate properties and realize income from rents and gain or loss from the
sale of real estate interests, and mortgage REITs, which make construction,
development and long-term mortgage loans and realize income from interest
payments on 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, heavy
cash flow dependency, 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. REITs (especially
mortgage REITs) are subject to interest rate risk.
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. If
the value of the security goes up, the Series will have to buy it back at a loss
to make good on the borrowing.
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 those 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.
In addition, emerging market economies may be based on only a few industries,
may be highly vulnerable to changes in local or global trade conditions, and may
suffer from extreme and volatile debt burdens or inflation rates.
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 any 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/Janus 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. The telecommunications industry
is comprised of several services which are considered separate industries by the
sub-advisers. Services can include cellular, long distance, paging and
messaging, satellite or data and internet. As the telecommunications industry
continues to expand, there will be more service industries created.
(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 Stock 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/Janus Balanced Series and JNL/Janus Growth & Income 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 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. A minimum of 75% of
currency exposure will be hedged.
(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.
JNL/Putnam International Equity Series:
(a) The Series normally invests at least 65% of its total assets
in equity securities of companies located in three countries
other than the U.S. Companies are located outside the U.S. if
(1) the are not organized under U.S. law, (2) their principal
office is outside the U.S., (3) their securities are
principally traded outside the U.S., (4) 50% or more of total
revenues come from outside the U.S. or (5) 50% or more of
assets are outside the U.S.
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 International Index Series:
(a) The Series may hold up to 25% of its value in MSCI E.A.FE.
futures contracts.
For the JNL Russell 2000 Index Series:
(a) The Series may hold up to 5% of its value in Russell 2000
Index futures contracts.
For the JNL 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 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. There are no limitations on
investments in 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 foreign
securities.
(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
normal market conditions, in non-investment grade fixed-income
securities.
(b) The Series may invest up to 35% 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
(short term investments in securities for the forward
settlement of trades shall not count for purposes of this
policy).
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.
For the T. Rowe Price/JNL Value Series:
(a) 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 41), 1 Corporate Way, Lansing, Michigan 48951
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 Life Distributors, Inc., Treasurer (1/98 to present)
Jackson National Financial Services, LLC, President and 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)
Jackson National Life Distributors, Inc., Chief Financial Officer and Vice
President (7/97 to present)
National Planning Corporation, Director (6/97 to present)
Jackson National Financial Services, Inc., Chief Executive Officer and
President (7/97 to 5/98)
Countrywide Credit, Executive Vice President (3/92 to 6/94)
JOSEPH FRAUENHEIM (Age 65), 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 51) 1 Corporate Way, Lansing, MI 48951
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)
Jackson National Life Insurance Company, Vice President and Controller
(8/82 to present)
THOMAS J. MEYER (Age 53) 1 Corporate Way, Lansing, MI 48951
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 58), 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 59), 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 33) 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 Life Distributors, Inc., Chief Operating Officer
(7/97 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, Vice President - Fund Accounting &
Administration (1/00 to present)
Jackson National Life Insurance Company, Assistant Vice President - Mutual Fund
Operations (4/97 to 12/99)
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)
SUSAN S. RHEE (Age 28), 1 Corporate Way, Lansing, MI 48951
Assistant Secretary of the Trust and each of the other funds in the Fund Complex
Jackson National Financial Services, LLC, Secretary (1/00 to present)
Jackson National Life Insurance Company, Senior Attorney (1/00 to present)
Goldman, Sachs & Co., Associate (10/99 to 12/99)
Van Eck Associates Corporation, Staff Attorney (9/97 to 10/99)
-----------
*Trustees who are interested persons as defined in the Investment Company Act of
1940.
As of January 20, 2000, 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 $5,000 for each meeting of the Board of Trustees 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, 1999, the disinterested Trustees received the
following fees from the Trust for service as Trustee:
<TABLE>
<CAPTION>
Pension or Retirement Benefits
Aggregate Compensation from the Accrued As Part of Trust Expenses
Adviser
Trustee
<S> <C> <C>
Joseph Frauenheim $16,000 $0
Richard McLellan $16,000 0
Peter McPherson $16,000 0
</TABLE>
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 for the
periods indicated was as follows:
<TABLE>
<CAPTION>
For the Period One-Year Period Commencement of
Ended Ended December Operations to
June 30, 2000 31, 1999 December 31,
1999
------------------ ------------------ -----------------
<S> <C> <C> <C>
JNL/Alger Growth Series2 4.54% 33.80% 27.08%
JNL/Alliance Growth Series4 2.10% 28.23% 33.64%
JNL/Eagle Core Equity Series3 3.63% 23.55% 23.96%
JNL/Eagle SmallCap Equity Series3 2.95% 19.27% 19.09%
JNL/J.P. Morgan International & Emerging Markets -3.04% 38.02% 18.38%
Series4
JNL/J.P. Morgan Enhanced S&P 500 Stock Index Series4 -1.89% N/A 6.85%
JNL/Janus Aggressive Growth Series1 -2.68% 94.43% 42.10%
JNL/Janus Balanced Series8 -0.20%
JNL/Janus Capital Growth Series1 -1.51% 124.19% 44.09%
JNL/Janus Global Equities Series1 1.06% 64.58% 36.45%
JNL/Janus Growth & Income Series6 -1.60% 4.98% -2.64%
JNL/PIMCO Total Return Bond Series4 3.84% -0.26% 2.92%
JNL/Putnam Growth Series1 -2.43% 29.41% 30.51%
JNL/Putnam International Equity Series7 -4.47% 32.11% 14.78%
JNL/Putnam Midcap Series8 1.50% N/A N/A
JNL/Putnam Value Equity Series1 -1.61% -1.04% 16.96%
JNL/S&P Conservative Growth Series I5 2.33% 19.52% 13.85%
JNL/S&P Moderate Growth Series I5 2.01% 26.74% 18.75%
JNL/S&P Aggressive Growth Series I5 1.09% 35.38% 25.02%
JNL/S&P Very Aggressive Growth Series I5 0.90% 48.86% 33.84%
JNL/S&P Equity Growth Series I5 0.92% 43.19% 27.72%
JNL/S&P Equity Aggressive Growth Series I 5 1.22% 45.25% 29.67%
JNL/S&P Conservative Growth Series II5 0.36% 16.14% 6.14%
JNL/S&P Moderate Growth Series II5 0.72% 22.77% 14.10%
JNL/S&P Aggressive Growth Series II5 0.46% 28.66% 16.11%
JNL/S&P Very Aggressive Growth Series II5 0.72% 42.42% 28.44%
JNL/S&P Equity Growth Series II5 0.59% 36.29% 19.99%
JNL/S&P Equity Aggressive Growth Series II 5 0.83% 39.61% 23.92%
JNL/S&P Conservative Growth Series9 2.20% N/A N/A
JNL/S&P Moderate Growth Series10 2.10% N/A N/A
JNL/S&P Aggressive Growth Series11 8.50% N/A N/A
Lazard/JNL Mid Cap Value Series4 7.06% 4.77% -1.78%
Lazard/JNL Small Cap Value Series4 5.20% 1.96% -6.27%
PPM America/JNL Balanced Series1 -3.25% -0.11% 11.64%
PPM America/JNL Money Market Series1 2.74% 4.67% 4.93%
PPM America/JNL High-Yield Bond Series1 -1.48% 1.09% 8.32%
Salomon Brothers/JNL Balanced Series4 3.26% 0.09% 3.23%
Salomon Brothers/JNL Global Bond Series1 2.15% 1.87% 7.79%
Salomon Brothers/JNL High-Yield Bond Series 4 -3.44% -1.76% -0.25%
Salomon Brothers/JNL U.S. Government & Quality Bond
Series1 3.67% -2.50% 5.42%
T. Rowe Price/JNL Established Growth Series1 7.83% 21.77% 26.74%
T. Rowe Price/JNL Mid-Cap Growth Series1 5.53% 24.01% 25.27%
T. Rowe Price/JNL Value Series8 -3.50% N/A N/A
</TABLE>
1 Commenced operations on May 15, 1995.
2 Commenced operations on October 16, 1995.
3 Commenced operations on September 16, 1996.
4 Commenced operations on March 2, 1998. Performance figures are not
annualized.
5 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; the JNL/S&P Equity Aggressive
Growth Series II commenced operations on April 13, 1998 and the JNL/J.P. Morgan
Enhanced S&P 500 Index Series commenced operations on May 16, 1999. Performance
figures are not annualized.
6 Commenced operations on March 2, 1998. As of the effective date of
this Statement of Additional Information, Janus Capital Corporation (Janus) has
replaced Goldman Sachs Asset Management as the sub-adviser to this Series. In
addition, certain investment policies, practices and strategies have been
changed to reflect the management style of Janus, the new sub-adviser. The
Advisory fees have also been changed. Given these changes, the performance
information shown below is not indicative in any manner of how the Series will
perform in the future.
7 Commenced operations on May 15, 1995. As of the effective date of
this Statement of Additional Information, Putnam Investment Management, Inc. has
replaced Rowe-Price Fleming International, Inc. as the sub-adviser to this
Series. Therefore, the performance information shown below is not indicative in
any manner of how the Series will perform in the future.
8 Commenced operations on May 1, 2000.
9 Commenced operations on January 26, 2000
10 Commenced operations on January 13, 2000.
11 Commenced operations on January 16, 2000.
The JNL/S&P Conservative Growth Series, the JNL/S&P Moderate Growth
Series, the JNL/S&P Aggressive Growth Series, the JNL Enhanced Intermediate Bond
Index Series, the JNL International Index Series, the JNL Russell 2000 Index
Series, the JNL S&P 500 Index Series, and the JNL S&P MidCap Index Series were
not in operation in 1999. 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.
A Series' performance may be affected by risks specific to certain
types of investments, such as foreign securities, derivative investments,
non-investment grade debt securities, initial public offerings (IPOs) or
companies with relatively small market capitalizations. IPOs and other
investment techniques may have magnified performance impact on a Series with a
small asset base. A Series may not experience similar performance as its assets
grow.
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, 1999, for each of
the referenced Series was as follows:
JNL/PIMCO Total Return Bond Series 6.10%
PPM America/JNL Balanced Series 3.83%
PPM America/JNL High-Yield Bond Series 10.21%
Salomon Brothers/JNL Balanced Series 2.96%
Salomon Brothers/JNL Global Bond Series 8.12%
Salomon Brothers/JNL High-Yield Bond Series 9.71%
Salomon Brothers/JNL U.S. Government & Quality Bond Series 6.22%
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, 1999, was 5.37%.
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, 1999, was 5.52%.
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
Jackson National Financial Services, LLC ("JNFS"), 1 Corporate Way,
Lansing, MI 48951, is the investment adviser to the Trust. As investment
adviser, JNFS provides the Trust with professional investment supervision and
management. JNFS is a wholly owned subsidiary of Jackson National Life Insurance
Company, which is in turn wholly owned by Prudential 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 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 and for the fiscal year ended December 31, 1999 were $7,786,576 and
$26,522,400, respectively.
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.
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 Stock 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 Balanced
Series, the JNL/Janus Capital Growth Series, the JNL/Janus Global Equities
Series, and the JNL/Janus Growth & Income Series. Kansas City Southern
Industries, Inc. (KCSI) indirectly through its wholly-owned subsidiary, Stilwell
Financial, Inc., owns approximately 82% of the outstanding voting stock of Janus
Capital. 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. KCSI has announced its intention to separate its transportion
and financial services businesses. KCSI anticipates the separation to be
completed in the first half of 2000.
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 Chicago 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. On
October 1, 1999, an Implementation and Merger Agreement ("Merger Agreement") was
entered into with Allianz of America ("Allianz"). The Merger Agreement provided
for the acquisition of 70% of PAH by Allianz through a merger of a subsidiary of
Allianz with and into PAH. PIMCO may, from time to time, seek research
assistance and rely on other management resources of its affiliated companies. A
portion of the sub-advisory fees received by PIMCO may be paid to those
affiliates in return for such services provided.
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 JNFS, 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, the JNL/Putnam International Equity Series, the JNL/Putnam Value
Equity Series, and the JNL/Putnam Midcap Growth 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), located at 7 World Trade
Center, New York, New York 10048, 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.
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, the T. Rowe Price/JNL Mid-Cap Growth
Series, and the T. Rowe Price/JNL Value Series. T. Rowe was founded in 1937 by
the late Thomas Rowe Price, Jr.
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 Stock 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 Balanced 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/Janus Growth & Income 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 International Equity Series............... $0 to $150 million...................... .65%
$150 million to $300 million............ .55%
Over $300 million....................... .45%
JNL/Putnam Value Equity Series....................... $0 to $150 million...................... .50%
$150 million to $300 million............ .45%
Over $300 million....................... .35%
JNL/Putnam Midcap Growth Series...................... $0 to $250 million...................... .50%
Over $250 million...................... .45%
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 Enhanced Intermediate Bond Index Series.......... all assets.............................. .20%
JNL International Index Series....................... all assets.............................. .15%
JNL Russell 2000 Index Series........................ all assets.............................. .05%
JNL S&P 500 Index Series............................. all assets.............................. .05%
JNL S&P MidCap Index Series.......................... all assets.............................. .05%
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 Mid-Cap Growth Series.............. $0 to $20 million....................... .60%
$20 million to $50 million.............. .50%
Over $50 million........................ .50%*
T. Rowe Price/JNL Value Series....................... $0 to $50 million....................... .50%
Over $50 million........................ .40%
</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 Stock Index Series, JNL S&P 500
Index Series, and JNL 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. Each Series, except the JNL 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 International Index Series pays
an Administrative Fee of .15%. 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. 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.
Boston Safe Deposit and Trust Company, One Boston Place, Boston,
Massachusetts 02108, 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 Stock Index Series, JNL/J.P.
Morgan International & Emerging Markets Series, JNL/Janus Aggressive Growth
Series, JNL/Janus Balanced Series, JNL/Janus Capital Growth Series, JNL/Janus
Global Equities Series JNL/Janus Growth & Income Series, JNL/PIMCO Total Return
Bond Series, JNL/Putnam Growth Series, JNL/Putnam International Equity Series,
JNL/Putnam Midcap Growth Series, JNL/Putnam Value Equity Series, JNL Enhanced
Intermediate Bond Index Series, JNL International Index Series, JNL Russell 2000
Index Series, JNL S&P 500 Index Series, JNL S&P MidCap Index 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 Midcaap Growth Series, T. Rowe Price/JNL Value Series,
JNL Enhanced Intermediate Bond Index Series, JNL/SSGA International Index
Series, JNL Russell 2000 Index Series, JNL S&P 500 Index Series, and JNL 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 LaSalle, 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.
The Distributor. Jackson National Life Distributors, Inc. (the "Distributors" or
"JNLD"), 401 Wilshire Boulevard, Santa Monica, California 90401 is the
distributor. JNLD is a wholly owned subsidiary of Jackson National Life
Insurance Company, which is in turn wholly owned by Prudential plc, a life
insurance company in the United Kingdom. The Distribution Agreement was approved
by the Board of Trustees on August 10, 2000.
Brokerage Enhancement Plan. The Board of Trustees of the Trust, including all of
the Trustees who are not "interested persons" (as defined in the Investment
Company Act of 1940) of the Trust, the Investment Adviser, the Distributor
(referred to as the "Independent Trustees") and the shareholders of certain
Series have voted pursuant to the provisions of Rule 12b-1 under the Investment
Company Act of 1940 to adopt a Brokerage Enhancement Plan (the "Plan") for the
purpose of utilizing the Trust's brokerage commissions to the extent available,
to promote the sale and distribution of the Trust's shares (through the sale of
variable insurance products funded by the Trust).
Under the Plan, the Distributor, on behalf of the Trust is authorized to direct
the Investment Adviser or a sub-adviser to effect brokerage transactions in
portfolio securities through certain broker-dealers, consistent with the
obligation to achieve best price and execution. These broker-dealers have agreed
either (1) to pay a portion of their commission from the sale and purchase of
securities to the Series, which will then be passed to the Distributor or other
introducing brokers ("Brokerage Payments") that provide distribution activities,
or (2) to provide brokerage credits, benefits or other services ("Brokerage
Credits") to be used for distribution activities in addition to the execution of
the trade. The Distributor will use a part of the Brokerage Payments and Credits
to defray its legal and administrative costs associated with implementation of
the Plan. These expenses are expected to be minimal. Th remainder of the
Brokerage Payments or Brokerage Credits generated will be used by the
Distributor to finance activities principally intended to result in the sale of
the Trust's shares. These activities will include, but are not limited to:
o holding or participating in seminars and sales meetings
promoting the sale of the Trust's shares
o paying marketing fees requested by broker-dealers who sell the
variable insurance products
o training sales personnel
o creating and mailing advertising and sales literature
o financing any other activity that is intended to result in the
sale of Trust's shares.
The Distributor is obligated to use all amounts generated under the Plan for
distribution expenses, except for a small amount to be used to defray the
incidental costs associated with implementation of the Plan. The Plan may
indirectly benefit the Distributor in that amounts expended under the Plan may
help defray, n whole or in part, distribution expenses that otherwise might be
borne by the Distributor or an affiliate.
The Plan provides (1) that it will be subject to annual approval by the Trustees
and the Independent Trustees; (2) that the Distributor must provide the Trustees
with a quarterly written report of payments made under the Plan and the purpose
of the payments and (3) that the Plan may be terminated at any time by the vote
of a majority of the Independent Trustees. The Plan may not be amended to
increase materially the amount to be spent for distribution without shareholder
approval, and all material Plan amendments must be approved by a vote of the
Independent Trustees. In addition, the selection and nomination of the
Independent Tustees must be committed to the Independent Trustees.
Series Transactions and Brokerage. Pursuant to the Sub-advisory Agreements, the
sub-advisers are responsible for placing all orders for the purchase and sale of
portfolio securities of the Trust. The sub-advisers have no formula for the
distribution of the Trust's brokerage business, their intention being to place
orders for the purchase and sale of securities with the primary objective of
obtaining the most favorable overall results for the Trust. The cost of
securities transactions for each portfolio will consist primarily of brokerage
commissions or dealer or underwriter spreads. Bonds and money market instruments
are generally traded on a net basis and do not normally involve either brokerage
commissions or transfer taxes.
Occasionally, securities may be purchased directly from the issuer. For
securities traded primarily in the over-the-counter market, the sub-advisers
will, where possible, deal directly with dealers who make a market in the
securities unless better prices and execution are available elsewhere. Such
dealers usually act as principals for their own account.
In selecting brokers and dealers through whom to effect transactions,
the sub-advisers will give consideration to a number of factors, including
price, dealer spread or commission, if any, the reliability, integrity and
financial condition of the broker-dealer, size of the transaction and difficulty
of execution. Consideration of these factors by a sub-adviser, either in terms
of a particular transaction or the sub-adviser's overall responsibilities with
respect to the Trust and any other accounts managed by the sub-adviser, could
result in the Trust paying a commission or spread on a transaction that is in
excess of the amount of commission or spread another broker-dealer might have
charged for executing the same transaction. In selecting brokers and dealers,
the sub-advisers will also give consideration to the value and quality of any
research, statistical, quotation or valuation services provided by the broker or
dealer. In placing a purchase or sale order, a sub-adviser may use a broker
whose commission in effecting the transaction is higher than that of some other
broker if the sub-adviser determines in good faith that the amount of the higher
commission is reasonable in relation to the value of the brokerage and research
services provided by such broker, viewed in terms of either the particular
transaction or the sub-adviser's overall responsibilities with respect to the
Trust and any other accounts managed by the Sub-adviser. Brokerage and research
services provided by brokers and dealers include advice, either directly or
through publications or writings, as to the value of securities, the
advisability of purchasing or selling securities, the availability of securities
or purchasers or sellers of securities, and analyses and reports concerning
issuers, industries, securities, economic factors and trends and portfolio
strategy. Consistent with the foregoing considerations and the Rules of Fair
Practice of the NASD, a sub-adviser may consider the sale of shares of the
Series or variable insurance products that use the Series as investment
vehicles, or may consider or follow recommendations of JNFS that take such sales
into account, as factors in the selection of brokers to effect portfolio
transactions for a Series, subject to the requirements of best net price
available and most favorable execution. In this regard, JNFS may direct a
sub-adviser to try to effect a portion of a Series' transactions through
broker-dealers that give prominence to variable insurance products using the
Series as investment vehicles, to the extent consistent with best net price
available and most favorable execution.
To the extent research services are used by the sub-advisers in
rendering investment advice to the Trust, such services would tend to reduce the
sub-advisers' expenses. However, the sub-advisers do not believe that an exact
dollar value can be assigned to these services. Research services received by
the sub-advisers from brokers or dealers executing transactions for the Trust
will be available also for the benefit of other portfolios managed by the
sub-advisers.
The Trustees periodically review the Adviser's performance of its
responsibilities in connection with the placement of portfolio transactions on
behalf of the Series and review commissions paid by the Series over a period of
time to determine if they are reasonable in relation to the benefit to the
Series.
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.
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>
Fiscal year ended Fiscal year ended Fiscal year ended
December 31, 1999 December 31, 1998 December 31, 1997
----------------- ----------------- -----------------
<S> <C> <C> <C>
JNL/Alger Growth Series*** $543,677 $300,075 $183,075
JNL/Alliance Growth Series***** 16,815 7,467 0
JNL/Eagle Core Equity Series**** 176,866 70,878 17,298
JNL/Eagle SmallCap Equity Series**** 38,923 59,117 33,313
JNL/J.P. Morgan International & Emerging
Markets Series***** 16,988 34,462 0
JNL/J.P. Morgan Enhanced S&P 500 Stock Index
Series* 3,495 0 0
JNL/Janus Aggressive Growth Series** 500,158 194,347 162,153
JNL/Janus Capital Growth Series** 277,576 209,026 147,014
JNL/Janus Global Equities Series** 559,149 487,399 453,347
JNL/Janus Growth & Income Series (formerly,
Goldman Sachs/JNL Growth & Income
Series)***** 23,133 12,650 0
JNL/PIMCO Total Return Bond Series***** 349 275 0
JNL/Putnam Growth Series** 323,736 169,997 181,765
JNL/Putnam International Equity Series
(formerly, T. Rowe Price/JNL International
Equity Investment Series)** 98,046 87,777 142,628
JNL/Putnam Value Equity Series** 475,590 249,514 139,522
Lazard/JNL Mid Cap Value Series***** 23,907 11,510 0
Lazard/JNL Small Cap Value Series***** 12,644 8,479 0
PPM America/JNL Balanced Series** 73,565 27,513 43,630
PPM America/JNL High Yield Bond Series** 0 4,823 0
PPM America/JNL Money Market Series** 0 0 0
Salomon Brothers/JNL Balanced Series***** 4,741 2,066 0
Salomon Brothers/JNL Global Bond Series** 0 32 0
Salomon Brothers/JNL High-Yield Bond Series***** 0 0 0
Salomon Brothers/JNL U.S. Government and
Quality Bond Series** 0 0 0
T. Rowe Price/JNL Established Growth Series** 420,664 239,877 114,988
T. Rowe Price/JNL Mid-Cap Growth Series** 350,062 195,160 164,887
</TABLE>
* Commenced operations on May 16, 1999. ** 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>
Period Ended December Period Ended December Period Ended
Name of Broker/Dealer 31, 1999 31, 1998 December 31, 1997
--------------------- --------------------- --------------------- ----------------
<S> <C> <C> <C>
Fred Alger & Co., Inc. $629,057.11 $ 297,614.70 $ 181,990.33
Goldman Sachs 1,142.73 821.76 0.00
Jardine Fleming 551.77 0.00 0.00
Raymond James & Associates, Inc. 7,281.60 4,700.00 4,306.92
Robert Fleming 2,426.04 9,558.28 34,696.52
Salomon Brothers Inc. 264.00 178.00 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, 1999 is as
follows:
<TABLE>
<CAPTION>
Broker/Dealer Percentage of Aggregate Commissions
------------- -----------------------------------
<S> <C>
Fred Alger & Co., Inc. 15.966%
Goldman Sachs 0.030%
Jardine Fleming 0.014%
Raymond James & Associates, Inc. 0.185%
Robert Fleming 0.062%
Salomon Brothers Inc. 0.007%
</TABLE>
As of December 31, 1999, the following Series owned securities of one
of the Trust's regular broker/dealers:
<TABLE>
<CAPTION>
Amount of
Securities
Series Broker/Dealer Owned
------ ------------- -----
<S> <C> <C>
JNL/Alger Growth Series Morgan Stanley & Co. Inc. 13,803,925
JNL/Alger Growth Series Merrill Lynch Pierce, Fenner & Smith 1,862,050
JNL/Alliance Growth Series CIT Group Holdings 202,800
JNL/Alliance Growth Series Goldman Sachs & Co. 178,956
JNL/Alliance Growth Series Merrill Lynch Pierce, Fenner & Smith 175,350
JNL/Alliance Growth Series Morgan Stanley & Co. Inc. 656,650
JNL/Janus Growth & Income Series (formerly, Goldman
Sachs/JNL Growth & Income Series) Morgan Stanley & Co. Inc. 57,100
JNL/J.P. Morgan Enhanced S&P 500 Stock Index CIT Group Holdings 4,225
JNL/J.P. Morgan Enhanced S&P 500 Stock Index Goldman, Sachs & Co. 27,314
JNL/J.P. Morgan Enhanced S&P 500 Stock Index Merrill Lynch Pierce, Fenner & Smith 25,885
JNL/PIMCO Total Return Bond Series Goldman, Sachs & Co. 116,438
JNL/PIMCO Total Return Bond Series Merrill Lynch Pierce, Fenner & Smith 252,123
JNL/PIMCO Total Return Bond Series Morgan Stanley & Co. Inc. 271,685
JNL/Putnam International Equity Series (formerly, T.
Rowe Price/JNL International Equity Investment Series) Credit Suisse Group 373,702
JNL/Putnam International Equity Series (formerly, T.
Rowe Price/JNL International Equity Investment Series) HSBC Securities 387,007
JNL/Putnam Value Equity Series J.P. Morgan Securities, Inc. 2,625,569
JNL/Putnam Value Equity Series Merrill Lynch Pierce, Fenner & Smith 1,987,718
Lazard/JNL Mid Cap Value Series CIT Group Holdings 80,275
Salomon Brothers/JNL Balanced Series Donaldson, Lufkin & Jenrette 48,563
Salomon Brothers/JNL Balanced Series Merrill Lynch Pierce, Fenner & Smith 70,875
Salomon Brothers/JNL Global Bond Series Merrill Lynch Pierce, Fenner & Smith 806,710
T. Rowe Price/JNL Established Growth Series HSBC Holdings 883,386
T. Rowe Price/JNL Established Growth Series Morgan Stanley & Co. Inc 2,398,200
T. Rowe Price/JNL Mid-Cap Growth Series CIT Group Inc. 1,719,575
</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. Employees subject to
the Code of Ethics may invest in securities for their own investment accounts,
including securities that may be purchased or held by the Trust.
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
The financial statements of the JNL Series Trust for the year ended December 31,
1999 and for the period ended June 30, 2000 are incorporated by reference from
the Trust's Annual and Semi-Annual Reports to shareholders which are available
at no charge upon written or telephone request to the Trust at the address and
telephone number set forth on the front page of this Statement of Additional
Information.
<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 based 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, it 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.
<PAGE>
JNL SERIES TRUST
PART C
OTHER INFORMATION
Note: Items 23-30 have been answered with respect to all investment
portfolios (Series) of the Registrant.
Item 23. Exhibits
(a) Agreement and Declaration of Trust of Registrant dated June 1, 1994,
incorporated by reference to Registrant's Post-Effective Amendment No.
5 filed with the Securities and Exchange Commission on June 28, 1996.
(b) Amended and Restated By-laws of Registrant, incorporated by reference
to Registrant's Post-Effective Amendment No. 7 filed with the
Securities and Exchange Commission on September 13, 1996.
(c) Not Applicable
(d) (1) Amended Investment Advisory and Management Agreement between
Registrant and Jackson National Financial Services, Inc. dated
August 17, 1995, incorporated by reference to Registrant's
Post-Effective Amendment No. 5 filed with the Securities and
Exchange Commission on June 28, 1996.
(2) Investment Sub-Advisory Agreement between Jackson National
Financial Services, Inc. and Fred Alger Management, Inc. dated
August 16, 1995, incorporated by reference to Registrant's
Post-Effective Amendment No. 5 filed with the Securities and
Exchange Commission on June 28, 1996.
(3) Investment Sub-Advisory Agreement between Jackson National
Financial Services, Inc. and Janus Capital Corporation dated
February 28, 1995, incorporated by reference to Registrant's
Post-Effective Amendment No. 5 filed with the Securities and
Exchange Commission on June 28, 1996.
(4) Investment Sub-Advisory Agreement between Jackson National
Financial Services, Inc. and PPM America, Inc. dated February
17, 1995, incorporated by reference to Registrant's
Post-Effective Amendment No. 5 filed with the Securities and
Exchange Commission on June 28, 1996.
(5) Investment Sub-Advisory Agreement between Jackson National
Financial Services, Inc. and Rowe Price-Fleming International,
Inc. dated February 20, 1995, incorporated by reference to
Registrant's Post-Effective Amendment No. 5 filed with the
Securities and Exchange Commission on June 28, 1996.
(6) Investment Sub-Advisory Agreement between Jackson National
Financial Services, Inc. and Salomon Brothers Asset Management
Inc dated February 8, 1995, incorporated by reference to
Registrant's Post-Effective Amendment No. 5 filed with the
Securities and Exchange Commission on June 28, 1996.
(7) Investment Sub-Advisory Agreement between Jackson National
Financial Services, Inc. and T. Rowe Price Associates, Inc.
dated February 20, 1995, incorporated by reference to
Registrant's Post-Effective Amendment No. 5 filed with the
Securities and Exchange Commission on June 28, 1996.
(8) Amendment dated August 7, 1996 to Amended Investment Advisory
and Management Agreement between Registrant and Jackson
National Financial Services, Inc. dated August 17, 1995,
incorporated by reference to Registrant's Post-Effective
Amendment No. 7 filed with the Securities and Exchange
Commission on September 13, 1996.
(9) Investment Sub-Advisory Agreement between Jackson National
Financial Services, Inc. and Eagle Asset Management, Inc.
dated August 9, 1996, incorporated by reference to
Registrant's Post-Effective Amendment No. 7 filed with the
Securities and Exchange Commission on September 13, 1996.
(10) Amendment dated August 21, 1996 to Investment Sub-Advisory
Agreement between Jackson National Financial Services, Inc.
and Janus Capital Corporation dated February 28, 1995,
incorporated by reference to Registrant's Post-Effective
Amendment No. 7 filed with the Securities and Exchange
Commission on September 13, 1996.
(11) Amendment dated April 18, 1997 to Amended Investment Advisory
and Management Agreement between Registrant and Jackson
National Financial Services, Inc. dated August 17, 1995,
incorporated by reference to Registrant's Post-Effective
Amendment No. 11 filed with the Securities and Exchange
Commission on October 16, 1997.
(12) Amendment dated April 18, 1997 to Investment Sub-Advisory
Agreement between Jackson National Financial Services, Inc.
and PPM America, Inc. dated February 17, 1995, incorporated by
reference to Registrant's Post-Effective Amendment No. 11
filed with the Securities and Exchange Commission on October
16, 1997.
(13) Sub-Advisory Agreement between Jackson National Financial
Services, Inc. and Putnam Investment Management, Inc. dated
April 22, 1997, incorporated by reference to Registrant's
Post-Effective Amendment No. 11 filed with the Securities and
Exchange Commission on October 16, 1997.
(14) Amendment dated December 17, 1997 to Amended Investment
Advisory and Management Agreement between Registrant and
Jackson National Financial Services, Inc. dated August 17,
1995, incorporated by reference to Registrant's Post-Effective
Amendment No. 12 filed with the Securities and Exchange
Commission on January 16, 1998.
(15) Sub-Advisory Agreement between Jackson National Financial
Services, Inc. and Alliance Capital Management L.P. dated
December 17, 1997, incorporated by reference to Registrant's
Post-Effective Amendment No. 12 filed with the Securities and
Exchange Commission on January 16, 1998.
(16) Amendment dated December 21, 1998 to Amended Investment
Advisory and Management Agreement between the Registrant and
Jackson National Financial Services, LLC dated August 17,
1995, incorporated by reference to Registrant's Post-Effective
Amendment No. 20 filed with the Securities and Exchange
Commission on April 28, 2000.
(17) Sub-Advisory Agreement between Jackson National Financial
Services, Inc. and Goldman Sachs Asset Management dated
December 17, 1997, incorporated by reference to Registrant's
Post-Effective Amendment No. 13 filed with the Securities and
Exchange Commission on March 27, 1998.
(18) Sub-Advisory Agreement between Jackson National Financial
Services, Inc. and J.P. Morgan Investment Management Inc.
dated December 17, 1997, incorporated by reference to
Registrant's Post-Effective Amendment No. 12 filed with the
Securities and Exchange Commission on January 16, 1998.
(19) Sub-Advisory Agreement between Jackson National Financial
Services, Inc. and Lazard Asset Management dated December 17,
1997, incorporated by reference to Registrant's Post-Effective
Amendment No. 12 filed with the Securities and Exchange
Commission on January 16, 1998.
(20) Sub-Advisory Agreement between Jackson National Financial
Services, Inc. and Pacific Investment Management Company dated
December 17, 1997, incorporated by reference to Registrant's
Post-Effective Amendment No. 12 filed with the Securities and
Exchange Commission on January 16, 1998.
(21) Amendment dated December 17, 1997 to Investment Sub-Advisory
Agreement between Jackson National Financial Services, Inc.
and Salomon Brothers Asset Management Inc dated February 8,
1995, incorporated by reference to Registrant's Post-Effective
Amendment No. 12 filed with the Securities and Exchange
Commission on January 16, 1998.
(22) Sub-Advisory Agreement between Jackson National Financial
Services, Inc. and Standard & Poor's Investment Advisory
Services, Inc. dated March 2, 1998, incorporated by reference
to Registrant's Post-Effective Amendment No. 14 filed with the
Securities and Exchange Commission on May 1, 1998.
(23) Amendment dated April 30, 1999 to Investment Sub-Advisory
Agreement between Jackson National Financial Services, LLC and
J.P. Morgan Investment Management, Inc. dated December 17,
1997, incorporated by reference to Registrant's Post-Effective
Amendment No. 20 filed with the Securities and Exchange
Commission on April 28, 2000.
(24) Amendment dated December 31, 1999 to Investment Sub-Advisory
Agreement between Jackson National Financial Services, LLC and
Standard & Poor's Investment Advisory Services, Inc. dated
March 2, 1998, incorporated by reference to Registrant's
Post-Effective Amendment No. 20 filed with the Securities and
Exchange Commission on April 28, 2000.
(25) Sub-Advisory Agreement between Jackson National Financial
Services, LLC and Pacific Investment Management Company dated
March 14, 2000, incorporated by reference to Registrant's
Post-Effective Amendment No. 20 filed with the Securities and
Exchange Commission on April 28, 2000.
(26) Amendment dated February 10, 2000 to Amended Investment
Advisory and Management Agreement between the Registrant and
Jackson National Financial Services, LLC dated August 17,
1995, incorporated by reference to Registrant's Post-Effective
Amendment No. 20 filed with the Securities and Exchange
Commission on April 28, 2000.
(27) Amendment dated February 10, 2000 to Investment Sub-Advisory
Agreement between Jackson National Financial Services, LLC and
T. Rowe Price Associates, Inc. dated February 20, 1995,
incorporated by reference to Registrant's Post-Effective
Amendment No. 20 filed with the Securities and Exchange
Commission on April 28, 2000.
(28) Amendment dated February 10, 2000 to Investment Sub-Advisory
Agreement between Jackson National Financial Services, LLC and
Putnam Investment Management, Inc. dated August 17, 1995,
incorporated by reference to Registrant's Post-Effective
Amendment No. 20 filed with the Securities and Exchange
Commission on April 28, 2000.
(29) Amendment dated February 10, 2000 to Investment Sub-Advisory
Agreement between Jackson National Financial Services, LLC and
Janus Capital Corporation dated February 28, 1995,
incorporated by reference to Registrant's Post-Effective
Amendment No. 20 filed with the Securities and Exchange
Commission on April 28, 2000.
(30) Form of Investment Advisory and Management Agreement between
Registrant and Jackson National Financial Services, LLC,
attached hereto.
(e) (1) Amended Fund Participation Agreement between Registrant,
Jackson National Life Insurance Company and Jackson National
Separate Account I dated September 19, 1995, incorporated by
reference to Registrant's Post-Effective Amendment No. 5 filed
with the Securities and Exchange Commission on June 28, 1996.
(2) Amendment dated August 7, 1996 to Amended Fund Participation
Agreement between JNL Series Trust, Jackson National Life
Insurance Company and Jackson National Separate Account I
dated September 19, 1995, incorporated by reference to
Registrant's Post-Effective Amendment No. 7 filed with the
Securities and Exchange Commission on September 13, 1996.
(3) Amendment dated April 18, 1997 to Amended Fund Participation
Agreement between JNL Series Trust, Jackson National Life
Insurance Company and Jackson National Separate Account I
dated September 19, 1995, incorporated by reference to
Registrant's Post-Effective Amendment No. 11 filed with the
Securities and Exchange Commission on October 16, 1997.
(4) Fund Participation Agreement between Registrant, Jackson
National Life Insurance Company and Jackson National Separate
Account III dated March 16, 1998, incorporated by reference to
Registrant's Post-Effective Amendment No. 13 filed with the
Securities and Exchange Commission on March 27, 1998.
(5) Amendment dated March 16, 1998 to Amended Fund Participation
Agreement between JNL Series Trust, Jackson National Life
Insurance Company and Jackson National Separate Account I
dated September 19, 1995, incorporated by reference to
Registrant's Post-Effective Amendment No. 13 filed with the
Securities and Exchange Commission on March 27, 1998.
(6) Fund Participation Agreement between Registrant, Jackson
National Life Insurance Company and Jackson National Separate
Account V dated February 11, 1999, incorporated by reference
to Registrant's Post-Effective Amendment No. 20 filed with the
Securities and Exchange Commission on April 28, 2000.
(7) Fund Participation Agreement between Registrant, Jackson
National Life Insurance Company of New York and JNLNY Separate
Account I dated March 16, 1998, incorporated by reference to
Registrant's Post-Effective Amendment No. 13 filed with the
Securities and Exchange Commission on March 27, 1998.
(8) Fund Participation Agreement between Registrant,Jackson
National Life Insurance Company of New York and JNLNY Separate
Account II dated December 16, 1999, incorporated by reference
to Registrant's Post-Effective Amendment No. 20 filed with the
Securities and Exchange Commission on April 28, 2000.
(9) Form of Distribution Agreement between Registrant and Jackson
National Life Distributors, Inc., attached hereto.
(f) Not Applicable
(g) (1) Custodian Contract between Registrant and State Street Bank
and Trust Company dated September 16, 1996, incorporated by
reference to Registrant's Post-Effective Amendment No. 10
filed with the Securities and Exchange Commission on April 15,
1997.
(2) Custody Contract between Registrant and Boston Safe deposit &
Trust Company dated May 14, 1999, incorporated by reference to
Registrant's Post-Effective Amendment No. 20 filed with the
Securities and Exchange Commission on April 28, 2000.
(h) (1) Administration Agreement between Registrant and Jackson
National Financial Services, LLC dated January 1, 1999,
incorporated by reference to Registrant's Post-Effective
Amendment No. 17 filed with the Securities and Exchange
Commission on March 1, 1999.
(2) Amendment dated February 10, 2000 to Administration Agreement
between Registrant and Jackson National Financial Services,
LLC dated January 1, 1999, incorporated by reference to
Registrant's Post-Effective Amendment No. 20 filed with the
Securities and Exchange Commission on April 28, 2000.
(i) Consent of Counsel, attached hereto.
(j) Consent of Auditors, attached hereto.
(k) Not Applicable
(l) Not Applicable
(m) Form of Brokerage Enhancement Plan, attached hereto.
(n) Not Applicable
(o) Not Applicable
(p) (1) The Registrant's Code of Ethics, attached hereto.
(2) Alliance Capital Management L.P. Code of Ethics, attached
hereto.
(3) Eagle Asset Management, Inc. Code of Ethics, attached hereto.
(4) Fred Alger Management, Inc. Code of Ethics, incorporated by
reference to Registrant's Post-Effective Amendment No. 20
filed with the Securities and Exchange Commission on April 28,
2000.
(5) J.P. Morgan Investment Management Inc. Code of Ethics,
attached hereto.
(6) Janus Capital Corporation Code of Ethics, attached hereto.
(7) Lazard Asset Management Code of Ethics, incorporated by
reference to Registrant's Post-Effective Amendment No. 20
filed with the Securities and Exchange Commission on April 28,
2000. (8) Pacific Investment Management Company Code of
Ethics, incorporated by reference to Registrant's
Post-Effective Amendment No. 20 filed with the Securities and
Exchange Commission on April 28, 2000.
(9) PPM America, Inc. Code of Ethics, attached hereto.
(10) Putnam Investment Management, Inc. Code of Ethics, attached
hereto.
(11) Salomon Brothers Asset Management Inc Code of Ethics,
incorporated by reference to Registrant's Post-Effective
Amendment No. 20 filed with the Securities and Exchange
Commission on April 28, 2000.
(12) Standard & Poor's Investment Advisory Services, Inc. Code of
Ethics, incorporated by reference to Registrant's
Post-Effective Amendment No. 20 filed with the Securities and
Exchange Commission on April 28, 2000.
(13) T. Rowe Price Associates, Inc. Code of Ethics, incorporated by
reference to Registrant's Post-Effective Amendment No. 20
filed with the Securities and Exchange Commission on April 28,
2000.
Item 24. Persons controlled by or under Common Control with Registrant.
Jackson National Separate Account - I Jackson National
Separate Account III Jackson National Separate Account V
Jackson National Separate Account VI JNLNY Separate Account I
JNLNY Separate Account II
Item 25. Indemnification.
Article VIII of the Registrant's Agreement and Declaration of
Trust provides that each of its Trustees and Officers
(including persons who serve at the Registrant's request as
directors, officers or trustees of another organization in
which the Registrant has any interest as a shareholder,
creditor or otherwise) (each, a "Covered Person") shall be
indemnified by the Registrant against all liabilities and
expenses that may be incurred by reason of being or having
been such a Covered Person, except that no Covered Person
shall be indemnified against any liability to the Registrant
or its shareholders to which such Covered Person would
otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties
involved in the conduct of such Covered Person's office.
The foregoing indemnification arrangements are subject to the
provisions of Section 17(h) of the Investment Company Act of
1940.
Insofar as indemnification by the Registrant for liabilities
arising under the Securities Act of 1933 may be permitted to
directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in
the successful defense of any action, suit or proceeding) is
asserted against the Registrant by such director, officer or
controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final
adjudication of such issue.
In addition to the above indemnification, Jackson National
Life Insurance Company extends its indemnification of its own
officers, directors and employees to cover such persons'
activities as officers, trustees or employees of the
Registrant, and by separate agreement Jackson National Life
Insurance Company has agreed to indemnify trustees of the
Registrant who are not interested persons of the Registrant or
its investment adviser.
Item 26. Business and Other Connections of Investment Adviser.
Incorporated herein by reference from the Prospectus and
Statement of Additional Information relating to the Trust are
the following: the description of the business of Jackson
National Financial Services, LLC ("JNFSLLC") contained in the
section entitled "Management of the Trust" of the Prospectus,
and the biographical information pertaining to Messrs.
Hopping,Frauenheim, Meyer, Fritts, McLellan, McPherson and
Nerud and Ms. Rhee, contained in the section entitled
"Trustees and Officers of the Trust" and the description of
JNFSLLC contained in the section entitled "Investment Adviser
and Other Services" of the Statement of Additional
Information.
Directors and Officers of JNFSLLC:
Name Address Principal Occupation
Andrew B. Hopping 1 Corporate Way President, Managing
Lansing, MI 48951 Board Member (3/98 to Present)
Mark D. Nerud 1 Corporate Way Chief Financial
Lansing, MI 48951 Managing Board Member Officer,
(3/98 to Present)
Susan S. Rhee 1 Corporate Way Secretary
Lansing, MI 48951 (1/00 to Present)
Alliance Capital Management L.P., Eagle Asset Management,
Inc., Fred Alger Management, Inc., Janus Capital Corporation,
J.P. Morgan Investment Management Inc., Lazard Asset
Management, Pacific Investment Management Company, PPM
America, Inc., Putnam Investment Management, Inc., Salomon
Brothers Asset Management Inc, Salomon Brothers Asset
Management Limited, Standard & Poor's Investment Advisory
Services, Inc., and T. Rowe Price Associates, Inc., the
sub-advisers of certain series of the Trust, are primarily
engaged in the business of rendering investment advisory
services. Reference is made to the most recent Form ADV and
schedules thereto on file with the Commission for a
description of the names and employment of the directors and
officers of the sub-advisers and other required information:
File No.
Alliance Capital Management L.P. 801-32361
Eagle Asset Management, Inc. 801-21343
Fred Alger Management, Inc. 801-06709
Janus Capital Corporation 801-13991
J.P. Morgan Investment Management Inc. 801-21011
Lazard Asset Management 801-6568
Pacific Investment Management Company 801-48187
PPM America, Inc. 801-40783
Putnam Investment Management, Inc. 801-7974
Salomon Brothers Asset Management Inc 801-32046
Standard & Poor's Investment Advisory
Services, Inc. 801-51431
T. Rowe Price Associates, Inc. 801-856
Salomon Brothers Asset Management Limited 801-43335
Item 27. Principal Underwriters.
(a) Jackson National Life Distributors, Inc. acts as general
distributor for the Registrant. Jackson National Life Distributors, Inc. also
acts as general distributor for the Jackson National Separate Account - I, the
Jackson National Separate Account III, the Jackson National Separate Account V,
the JNLNY Separate Account I and the JNLNY Separate Account II.
(b) Directors and Officers of Jackson National Life Distributors, Inc.:
Name and Positions and Offices
Business Address with Underwriter
Robert P. Saltzman Director
1 Corporate Way
Lansing, MI 48951
Andrew B. Hopping* Director, Vice President,
1 Corporate Way Chief Financial Officer and
Lansing, MI 48951 Treasurer
Michael A. Wells Director, President and
401 Wilshire Blvd. Chief Executive Officer
Suite 1200
Santa Monica, CA 90401
Mark D. Nerud* Chief Operating Officer,
225 West Wacker Drive Vice President and Assistant
Suite 1200 Treasurer
Chicago, IL 60606
Willard Barrett Senior Vice President -
3500 S. Blvd., Ste. 18B Divisional Director West
Edmond, OK 73013
Jay A. Elliott Senior Vice President -
10710 Midlothian Turnpike Division Director Northeast
Suite 301
Richmond, VA 23235
Douglas K. Kinder Senior Vice President -
1018 W. St. Maartens Dr. Divisional Director Midwest
St. Joseph, MO 64506
Scott W. Richardson Senior Vice President -
900 Circle 75 Parkway Divisional Director Southeast
Suite 1750
Atlanta, GA 30339
Gregory B. Salsbury Senior Vice President -
401 Wilshire Blvd. Resource Development
Suite 1200
Santa Monica, CA 90401
Christine A. Pierce-Tucker Senior Vice President -
401 Wilshire Boulevard Marketing
Suite 1200
Santa Monica, CA 90401
Steven R. Banis Senior Vice President -
401 Wilshire Boulevard Corporate Communications
Suite 1200
Santa Monica, CA 90401
Sean P. Blowers Vice President - Thrift
401 Wilshire Boulevard Products
Suite 1200
Santa Monica, CA 90401
Barry L. Bulakites Western Vice President of
401 Wilshire Blvd. Regional Development
Suite 1200
Santa Monica, CA 90401
Stephanee Maxwell Vice President - Marketing
401 Wilshire Blvd. Communications for Registered
Suite 1200 Products
Santa Monica, CA 90401
Bradley J. Powell Vice President - IMG
210 Interstate North Parkway
Suite 401
Atlanta, GA 30339-2120
Phil Wright Vice President - Marketing
401 Wilshire Boulevard Communications for Guaranteed
Suite 1200 Products
Santa Monica, CA 90401
Kristina Zimmerman Assistant Vice President - Advanced
401 Wilshire Boulevard Markets
Suite 1200
Santa Monica, CA 90401
* These directors and/or Officers are also trustees and/or officers of
the Trust.o
Item 28. Location of Accounts and Records
Certain accounts, books and other documents required to be
maintained pursuant to Rule 31a-1(b)(4), (5), (6), (7), (9),
(10), and (11) are in the physical possession of the
Registrant at 1 Corporate Way, Lansing, Michigan 48951;
certain accounts, books and other documents required to be
maintained pursuant to Rule 31a-1(b)(4), (5), (6), (7), (9),
(10), and (11) are in the physical possession of the
Registrant at 225 West Wacker Drive, Suite 1200, Chicago,
Illinois 60606; all other books, accounts and other documents
required to be maintained under Section 31(a) of the
Investment Company Act of 1940 and the Rules promulgated
thereunder are in the physical possession of Boston Safe
Deposit and Trust Company, One Boston Place, Boston, MA 02108.
Item 21. Management Services.
Not Applicable.
Item 30. Undertakings.
Not Applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act and the Investment
Company Act, the Trust certifies that it meets all of the requirements for
effectiveness of this Post-Effective Amendment under rule 485(a) under the
Securities Act and has duly caused this Post-Effective Amendment to be signed on
its behalf by the undersigned, duly authorized, in the City of Lansing and the
State of Michigan on the 19th day of October, 2000.
JNL SERIES TRUST
By:
------------------------------------------------
Andrew B. Hopping
President, CEO and Trustee
by Thomas J. Meyer*
Pursuant to the requirements of the Securities Act, this Post-Effective
Amendment has been signed below by the following persons in the capacities and
on the date indicated.
/s/ Andrew B. Hopping President, CEO and
by Thomas J. Meyer* Trustee October 19, 2000
-------------------------------- -----------------
Andrew B. Hopping
/s/ Robert A. Fritts Vice President,
by Thomas J. Meyer* Treasurer, CFO and October 19, 2000
-------------------------------- Trustee -----------------
Robert A. Fritts
/s/ Joseph Frauenheim Trustee
by Thomas J. Meyer* October 19, 2000
-------------------------------- -----------------
Joseph Frauenheim
/s/ Richard McLellan Trustee
by Thomas J. Meyer* October 19, 2000
-------------------------------- -----------------
Richard McLellan
/s/ Peter McPherson Trustee
by Thomas J. Meyer* October 19, 2000
-------------------------------- -----------------
Peter McPherson
* Attorney In Fact
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned as directors of JNL
SERIES TRUST, a Massachusetts business trust, which has filed or will file with
the Securities and Exchange Commission under the provisions of the Securities
Act of 1933 and Investment Company Act of 1940, as amended, various Registration
Statements and amendments thereto for the registration under said Acts of the
sale of shares of beneficial interest of JNL Series Trust, hereby constitute and
appoint Andrew B. Hopping, Thomas J. Meyer and Robert P. Saltzman, his attorney,
with full power of substitution and resubstitution, for and in his name, place
and stead, in any and all capacities to approve and sign such Registration
Statements and any and all amendments thereto and to file the same, with all
exhibits thereto and other documents, granting unto said attorneys, each of
them, full power and authority to do and perform all and every act and thing
requisite to all intents and purposes as he might or could do in person, hereby
ratifying and confirming that which said attorneys, or any of them, may lawfully
do or cause to be done by virtue hereof. This instrument may be executed in one
or more counterparts.
IN WITNESS WHEREOF, the undersigned have herewith set their names as of the
dates set forth below.
/s/ Andrew B. Hopping April 4, 2000
-------------------------------------------- ------------------
Andrew B. Hopping Date
/s/ Robert A. Fritts April 4, 2000
----------------------------------------------------- -----------------
Robert A. Fritts Date
/s/ Joseph Frauenheim April 4, 2000
----------------------------------------------------- -----------------
Joseph Frauenheim Date
/s/ Richard McLellan April 4, 2000
----------------------------------------------------- -----------------
Richard McLellan Date
/s/ Peter McPherson April 4, 2000
----------------------------------------------------- -----------------
Peter McPherson Date
<PAGE>
EXHIBIT LIST
Exhibit
Number Description
23.(d)(30) Form of Investment Advisory and Management Agreement
between Registrant and Jackson National Financial Services,
LLC, attached hereto as EX-99.d30 ADVSR CONT.
23.(e)(9) Form of Distribution Agreement between Registrant and Jackson
National Distributors, Inc., attached hereto as EX-99.e9
DIST AGRMT.
23.(i) Consent of Counsel, attached hereto as EX-99.i LEGAL OPININ.
23.(j) Consent of Auditor, attached hereto as EX-99.j AUDIT OPININ.
23.(m) Brokerage Enhancement Plan, attached hereto as EX-99.m 12B-1
PLAN.
23.(p)(1) The Registrant's Code of Ethics, attached hereto as EX-99.p1
CODE ETH.
23.(p)(2) Alliance Capital Management L.P. Code of Ethics, attached
hereto as EX-99.p2 CODE ETH.
23.(p)(3) Eagle Asset Management, Inc. Code of Ethics, attached hereto
as EX-99.p3 CODE ETH.
23.(p)(5) J.P. Morgan Investment Management Inc. Code of Ethics,
attached hereto as EX-99.p5 CODE ETH.
23.(p)(6) Janus Capital Corporation Code of Ethics, attached hereto as
EX-99.p6 CODE ETH.
23.(p)(9) PPM America, Inc. Code of Ethics, attached hereto as EX-99.p9
CODE ETH.
23.(p)(10) Putnam Investment Management, Inc. Code of Ethics, attached
hereto as EX-99.p10 CODE ETH.
