Manning & Napier Fund N-CSR Certified annual shareholder report (management investment company)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-04087

Manning & Napier Fund, Inc.

(Exact name of registrant as specified in charter)

290 Woodcliff Drive, Fairport, NY 14450

(Address of principal executive offices)(Zip Code)

B. Reuben Auspitz 290 Woodcliff Drive, Fairport, NY 14450

(Name and address of agent for service)

Registrant’s telephone number, including area code: 585-325-6880

Date of fiscal year end: December 31, 2010

Date of reporting period: January 1, 2010 through December 31, 2010

Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.

ITEM 1. REPORTS TO STOCKHOLDERS

Management Discussion and Analysis (unaudited)

Dear Shareholders:

Over the course of 2010, the markets experienced several ups and downs driven by well-defined swings in investor sentiment. Optimism fueled strong market returns early in the year, as upbeat economic releases led investors to believe in the potential for a robust U.S. recovery. However, sentiment shifted drastically in May and June as more negative economic news and issues related to Europe’s government debt problems led to notable stock market losses. In another swing, the markets rebounded in the fall amid better economic developments and prospects that the Federal Reserve would enact another round of quantitative easing. That rally generally continued through the end of the year as the markets reacted positively to the U.S. tax compromise, which extended the Bush-era tax cuts for all income brackets.

With equities posting double-digit gains in the third and fourth quarters, the choppy year ended on a strong note, and broad equity indices have now produced back-to-back years of positive results. For the twelve months ending December 31, 2010, the S&P 500 Index returned 15.07%, while the S&P 500 Health Care Index earned only 2.9%, as Health Care was the lowest performing market sector in 2010.

The Life Sciences Series had a 14.80% return during 2010, noticeably outpacing the S&P 500 Health Care Index yet slightly lagging the broader stock market. More importantly, the Series continues to have a strong track record relative to the broad market and the sector-specific benchmark over the current market cycle, which includes both a bull and a bear market. Over this current cycle, the Life Sciences Series has earned an annualized return of 9.90%, compared to the 7.52% return of the S&P 500 Index and the 4.49% return of the S&P 500 Health Care Index.

In the volatile markets of 2010, Manning & Napier maintained a selective investment approach and focused on companies that we believe can grow market share. We continued to emphasize quality, targeting best-in-class companies expected to generate sales growth despite a muted economic backdrop, as well as “away game winners” expected to successfully compete in faster-growing markets overseas.

In the current health care environment, Manning & Napier is targeting companies that can lower costs and enhance quality. With this particular focus, over the past year the Series had a substantial weighting to diagnostics companies, which are part of the health care equipment and supplies industry. By emphasizing prevention and early detection, we believe diagnostics companies can improve health care treatment and help avoid expensive, unexpected hospital visits. The Series started 2010 with a significantly higher allocation to the health care equipment and supplies industry than the benchmark, and this exposure increased during the year. By the end of the year, about half of the portfolio consisted of companies within this industry.

The Advisor also sees opportunities in health care information technology companies. Over the last twelve months, the Series maintained an overweight to the health care technology industry relative to the benchmark, although this weighting is much smaller than that of the health care equipment and supplies industry. Additionally, the Series reduced exposure to health care providers and services over the past year, and the Series continued to have a noteworthy underweight to pharmaceuticals versus the benchmark, which aided relative returns.

Stock selection decisions were the primary drivers of outperformance for the Life Sciences Series in 2010. In particular, the Series’ relative results benefited from specific holdings in the health care equipment and supplies industry as well as the life sciences tools and services industry.

While economic developments turned more optimistic toward the end of 2010, the U.S. economy still faces significant headwinds, including a struggling housing market, a stagnant job market, a difficult consumer rebalancing act, and high government debt burdens. Given these long-term structural issues, the slow growth environment in the U.S. will likely remain a reality. As the markets fluctuated around this slow growth trend in 2010, Manning & Napier earned solid returns

1

Management Discussion and Analysis (unaudited)

by staying focused on the fundamentals and maintaining our selective investment process. This investment approach has proved beneficial for the past 40 years, and we believe these qualities will remain important as the market environment unfolds in 2011.

As always, we appreciate your business.

Sincerely,

Manning & Napier Advisors, Inc.

2

Performance Update as of December 31, 2010 (unaudited)

				Average Annual Total Returns As of December 31, 2010
	One Year			Five Year		Ten Year		Since Inception 1
Manning & Napier Fund, Inc. - Life Sciences Series2		14.80	%		5.84%		6.36%		12.58%
S&P 500 Total Return Index3		15.07	%		2.30%		1.42%		1.05%
S&P 500 Health Care Index3		2.90	%		1.89%		-0.23%		1.67%

The following graph compares the value of a $10,000 investment in the Manning & Napier Fund, Inc. - Life Sciences Series for the ten years ended December 31, 2010 to the S&P 500 Total Return Index and the S&P 500 Health Care Index.

¹Performance numbers for the Series and Indices are calculated from November 5, 1999, the Series’ current activation date.

²The Series’ performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of shares. The Series’ performance is historical and may not be indicative of future results. The performance returns shown are inclusive of the net expense ratio of the Series. For the year ended December 31, 2010, this net expense ratio was 1.09%. The gross expense ratio, which does not account for any voluntary or contractual waivers currently in effect, was 1.09% for the year ended December 31, 2010.

³The S&P 500 Total Return Index is an unmanaged capitalization-weighted measure of 500 widely held common stocks listed on the New York Stock Exchange, American Stock Exchange and the Over-the-Counter market. The S&P 500 Health Care Index, a sub-index of the S&P 500 Total Return Index, includes the stocks of companies involved in the business of health care related products and services. Both Indices’ returns assume daily reinvestment of dividends and, unlike Series returns, do not reflect any fees or expenses.

3

Shareholder Expense Example (unaudited)

As a shareholder of the Series, you may incur two types of costs: (1) transaction costs and (2) ongoing costs, including management fees and other Series expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Series and to compare these costs with the ongoing costs of investing in other mutual funds.

The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (July 1, 2010 to December 31, 2010).

Actual Expenses

The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Series’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Series’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid during the period. You may use this information to compare the ongoing costs of investing in the Series and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.

	Beginning Account  Value 7/1/10	Ending Account  Value 12/31/10	Expenses Paid During Period* 7/1/10-12/31/10
Actual	$1,000.00	$1,178.00	$6.04
Hypothetical (5% return before expenses)	$1,000.00	$1,019.66	$5.60

*Expenses are equal to the Series’ annualized expense ratio (for the six-month period) of 1.10%, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). Expenses are based on the most recent fiscal half year; therefore, the expense ratio stated above may differ from the expense ratio stated in the financial highlights, which is based on one-year data. The Series’ total return would have been lower had certain expenses not been waived during the period.

4

Portfolio Composition as of December 31, 2010 (unaudited)

Top Ten Stock Holdings2
Alere, Inc.	5.8	%	Cerner Corp.	4.0	%
Gen-Probe, Inc.	5.8	%	Sequenom, Inc.	3.5	%
Zoll Medical Corp.	5.3	%	Insulet Corp.	3.4	%
Cochlear Ltd. (Australia)	4.7	%	Amgen, Inc.	3.2	%
DexCom, Inc.	4.5	%	UCB S.A. (Belgium)	3.2	%
2As a percentage of total investments.

5

Investment Portfolio - December 31, 2010

	Shares		Value (Note 2)
COMMON STOCKS - 95.4%
Financials - 0.0%
Insurance - 0.0%
Avalon HealthCare Holdings, Inc.*1,2,3,4		38,359	$	—
Health Care - 95.4%
Biotechnology - 13.4%
Amgen, Inc.*		145,770		8,002,773
Basilea Pharmaceutica AG (Switzerland)*6		77,000		5,354,529
Cepheid, Inc.*		155,000		3,526,250
Momenta Pharmaceuticals, Inc.*		312,230		4,674,083
Swedish Orphan Biovitrum AB (Sweden)*6		740,501		4,455,306
United Therapeutics Corp.*		114,500		7,238,690
				33,251,631
Health Care Equipment & Supplies - 50.5%
Abaxis, Inc.*		232,500		6,242,625
Alere, Inc.*		273,000		9,991,800
Alere, Inc.*3,5		122,000		4,465,200
Becton, Dickinson and Co.		57,000		4,817,640
Cochlear Ltd. (Australia)6		141,230		11,625,969
Conceptus, Inc.*		405,000		5,589,000
Covidien plc (Ireland)		148,601		6,785,122
DexCom, Inc.*		815,000		11,124,750
Gen-Probe, Inc.*2		246,000		14,354,100
Hogy Medical Co. Ltd. (Japan)6		99,000		4,811,432
Hologic, Inc.*		310,000		5,834,200
Insulet Corp.*		550,970		8,540,035
Quidel Corp.*		325,000		4,696,250
Sirona Dental Systems, Inc.*		128,100		5,352,018
Straumann Holding AG (Switzerland)6		32,717		7,492,365
Zoll Medical Corp.*2		355,000		13,216,650
				124,939,156
Health Care Providers & Services - 12.1%
Bio-Reference Laboratories, Inc.*		280,000		6,210,400
China Cord Blood Corp. (Hong Kong)*		894,000		3,584,940
Cross Country Healthcare, Inc.*		640,300		5,423,341
Diagnosticos da America S.A. (Brazil)		542,000		7,346,385
Sonic Healthcare Ltd. (Australia)6		614,000		7,298,923
				29,863,989
Health Care Technology - 6.1%
Allscripts Healthcare Solutions, Inc.*		277,000		5,337,790
Cerner Corp.*		104,000		9,852,960
				15,190,750

6 The accompanying notes are an integral part of the financial statements.

Investment Portfolio - December 31, 2010

	Shares		Value (Note 2)
COMMON STOCKS (continued)
Health Care (continued)
Life Sciences Tools & Services - 6.6%
Caliper Life Sciences, Inc.*		1,037,452	$	6,577,446
Sequenom, Inc.*		1,085,000		8,701,700
WuXi PharmaTech (Cayman), Inc. - ADR (Cayman Islands)*		70,000		1,129,800
				16,408,946
Pharmaceuticals - 6.7%
Green Cross Corp. (South Korea)6		43,000		5,260,298
Teva Pharmaceutical Industries Ltd. - ADR (Israel)		66,500		3,466,645
UCB S.A. (Belgium)6		228,939		7,861,333
				16,588,276
Total Health Care				236,242,748
TOTAL COMMON STOCKS (Identified Cost $185,284,615)				236,242,748
PREFERRED STOCKS - 0.0%
Financials - 0.0%
Insurance - 0.0%
Avalon HealthCare Holdings, Inc. - Series D*2,3,4,7 (Identified Cost $2,312,500)		925,000		—
WARRANTS - 0.1%
Financials - 0.0%
Insurance - 0.0%
Avalon HealthCare Holdings, Inc., 2/27/20142,3,4,8		38,359		—
Health Care - 0.1%
Life Sciences Tools & Services - 0.1%
Caliper Life Sciences, Inc., 8/10/2011		401,109		248,687
TOTAL WARRANTS (Identified Cost $195,276)				248,687
SHORT-TERM INVESTMENTS - 4.7%
Dreyfus Cash Management, Inc. - Institutional Shares9, 0.14%, (Identified Cost $11,668,542)		11,668,542		11,668,542

The accompanying notes are an integral part of the financial statements. 7

Investment Portfolio - December 31, 2010

	Value (Note 2)
TOTAL INVESTMENTS - 100.2% (Identified Cost $199,460,933)	$	248,159,977
LIABILITIES, LESS OTHER ASSETS - (0.2%)		(596,067	)
NET ASSETS - 100%	$	247,563,910

ADR - American Depository Receipt

*Non-income producing security

¹ This security was acquired on February 27, 2009 at a cost of $76,718 ($2.00 per share) and has been determined to be illiquid under guidelines established by the Board of Directors (see Note 2 to the financial statements).

² Affiliated company as defined by the Investment Company Act of 1940 (see Note 2 to the financial statements).

³ Restricted securities - Investment in securities that are restricted as to public resale under the Securities Act of 1933, as amended. These securities amount to $4,465,200, or 1.8% of the Series’ net assets as of December 31, 2010 (see Note 2 to the financial statements).

⁴ Security has been valued at fair value (see Note 2 to the financial statements).

⁵ This security was acquired on February 3, 2006 at a cost of $2,978,020 ($24.41 per share) and has been determined to be liquid under guidelines established by the Board of Directors (see Note 2 to the financial statements).

⁶ International Fair Value factor from pricing service was applied.

⁷ This security was acquired on June 22, 2007 at a cost of $2,312,500 ($2.50 per share) and has been determined to be illiquid under guidelines established by the Board of Directors (see Note 2 to the financial statements).

⁸ This security was acquired on February 27, 2009 at a cost of $19,180 ($0.50 per warrant) and has been determined to be illiquid under guidelines established by the Board of Directors (see Note 2 to the financial statements).

⁹ Rate shown is the current yield as of December 31, 2010.

8 The accompanying notes are an integral part of the financial statements.

Statement of Assets and Liabilities

December 31, 2010

ASSETS:
Investments, at value (identified cost $199,460,933) (Note 2)	$	248,159,977
Receivable for fund shares sold		157,402
Foreign tax reclaims receivable		131,557
Dividends receivable		75,196
TOTAL ASSETS		248,524,132
LIABILITIES:
Accrued management fees (Note 3)		204,807
Accrued fund accounting and administration fees (Note 3)		7,788
Accrued transfer agent fees (Note 3)		2,594
Accrued Chief Compliance Officer service fees (Note 3)		245
Payable for fund shares repurchased		355,159
Payable for securities purchased		326,716
Other payables and accrued expenses		62,913
TOTAL LIABILITIES		960,222
TOTAL NET ASSETS	$	247,563,910
NET ASSETS CONSIST OF:
Capital stock	$	203,302
Additional paid-in-capital		219,578,943
Undistributed net investment loss		(20,942	)
Accumulated net realized loss on investments, foreign currency and translation of other assets and liabilities		(20,912,749	)
Net unrealized appreciation on investments, foreign currency and translation of other assets and liabilities		48,715,356
TOTAL NET ASSETS	$	247,563,910
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER SHARE - CLASS A ($247,563,910/20,330,172 shares)	$	12.18

The accompanying notes are an integral part of the financial statements. 9

Statement of Operations

For the Year Ended December 31, 2010

INVESTMENT INCOME:
Dividends (net of foreign taxes withheld, $154,466)	$	1,804,817
Interest		1,681
Total Investment Income		1,806,498
EXPENSES:
Management fees (Note 3)		2,650,046
Fund accounting and administration fees (Note 3)		61,888
Transfer agent fees (Note 3)		15,672
Directors’ fees (Note 3)		10,566
Chief Compliance Officer service fees (Note 3)		2,631
Custodian fees		52,878
Miscellaneous		102,561
Total Expenses		2,896,242
Less reduction of expenses (Note 3)		(758	)
Net Expenses		2,895,484
NET INVESTMENT LOSS		(1,088,986	)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY:
Net realized gain (loss) on-
Investments		18,309,383
Foreign currency and translation of other assets and liabilities		(75,704	)
		18,233,679
Net change in unrealized appreciation appreciation on-
Investments		17,281,571
Foreign currency and translation of other assets and liabilities		12,605
		17,294,176
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND FOREIGN CURRENCY		35,527,855
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	34,438,869

10 The accompanying notes are an integral part of the financial statements.

Statements of Changes in Net Assets

	For the Year Ended 12/31/10			For the Year Ended 12/31/09
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment loss	$	(1,088,986	)	$	(1,203,760	)
Net realized gain (loss) on investments, foreign currency and written options		18,233,679			(3,756,944	)
Net change in unrealized appreciation on investments and foreign currency		17,294,176			99,105,593
Net increase from operations		34,438,869			94,144,889
CAPITAL STOCK ISSUED AND REPURCHASED:
Net decrease from capital share transactions (Note 5)		(59,818,922	)		(3,905,204	)
Net increase (decrease) in net assets		(25,380,053	)		90,239,685
NET ASSETS:
Beginning of year		272,943,963			182,704,278
End of year (including undistributed net investment income (loss) of $(20,942) and $0, respectively)	$	247,563,910		$	272,943,963

The accompanying notes are an integral part of the financial statements. 11

Financial Highlights

				For the Years Ended
	12/31/10			12/31/09			12/31/08			12/31/07			12/31/06
Per share data (for a share outstanding throughout each year):
Net asset value - Beginning of year	$	10.61		$	6.99		$	11.54		$	11.41		$	12.10
Income (loss) from investment operations:
Net investment loss		(0.04	)1		(0.05	)1		(0.06	)		(0.08	)		(0.05	)
Net realized and unrealized gain (loss) on investments		1.61			3.67			(4.38	)		1.25			1.56
Total from investment operations		1.57			3.62			(4.44	)		1.17			1.51
Less distributions to shareholders:
From net realized gain on investments		—			—			(0.11	)		(1.04	)		(2.20	)
Net asset value - End of year	$	12.18		$	10.61		$	6.99		$	11.54		$	11.41
Net assets - End of year
(000’s omitted)	$	247,564		$	272,944		$	182,704		$	299,669		$	233,072
Total return2		14.80%			51.79%			(38.77%)			10.62%			12.52%
Ratios (to average net assets)/
Supplemental Data:
Expenses*		1.09%			1.11%			1.12%			1.12%			1.14%
Net investment loss		(0.41%	)		(0.55%	)		(0.65%	)		(0.75%	)		(0.51%	)
Portfolio turnover		67%			95%			94%			95%			93%
*The investment advisor did not impose all or a portion of its management fees, CCO fees, fund accounting and transfer agent fees, and other fees in some years and in some years paid a portion of the Series’ expenses. If these expenses had been incurred by the Series, the expense ratio (to average net assets) would have been increased by the following amounts:
		0.00%3			0.01%			N/A			N/A			N/A

¹Calculated based on average shares outstanding during the year.

²Represents aggregate total return for the years indicated, and assumes reinvestment of all distributions. Total returns would have been lower had certain expenses not been waived or reimbursed during certain years.

³Less than 0.01%.

12 The accompanying notes are an integral part of the financial statements.

Notes to Financial Statements

1. ORGANIZATION

Life Sciences Series (the “Series”) is a no-load diversified series of Manning & Napier Fund, Inc. (the “Fund”). The Fund is organized in Maryland and is registered under the Investment Company Act of 1940 (the “1940 Act”), as amended, as an open-end management investment company.

The Series’ investment objective is to provide long-term growth by investing principally in the common stocks of companies in the life sciences industry.

The Fund’s Advisor is Manning & Napier Advisors, Inc. (the “Advisor”). On November 5, 1999, the Series resumed sales of shares to advisory clients and employees of the Advisor and its affiliates. On May 1, 2001, the Series began offering shares directly to investors. Previously, the Series was available from time to time to advisory clients and employees of the Advisor. The total authorized capital stock of the Fund consists of 10.0 billion shares of common stock each having a par value of $0.01. As of December 31, 2010, 6.2 billion shares have been designated in total among 29 series, of which 100 million have been designated as Life Sciences Series Class A common stock.

2. SIGNIFICANT ACCOUNTING POLICIES

Security Valuation

Portfolio securities, including domestic equities, foreign equities, warrants and options, listed on an exchange other than the NASDAQ National Market System are valued at the latest quoted sales price of the exchange on which the security is primarily traded. Securities not traded on valuation date or securities not listed on an exchange are valued at the latest quoted bid price provided by the Fund’s pricing service. Securities listed on the NASDAQ National Market System are valued in accordance with the NASDAQ Official Closing Price.

Short-term investments that mature in sixty days or less are valued at amortized cost, which approximates market value. Investments in open-end investment companies are valued at their net asset value per share on valuation date.

Volume and level of activity in established markets for an asset or liability are evaluated to determine whether recent transactions and quoted prices are determinative of fair value. Where there have been significant decreases in volume and level of activity, further analysis and adjustment may be necessary to estimate fair value. The Series measures fair value in these instances by the use of inputs and valuation techniques which may be based upon current market prices of securities that are comparable in coupon, rating, maturity and industry and/or expectation of future cash flows. As a result of trading in relatively thin markets and/or markets that experience significant volatility, the prices used by the Series to value these securities may differ from the value that would be realized if these securities were sold, and the differences could be material.

Securities for which representative valuations or prices are not available from the Fund’s pricing service may be valued at fair value. Due to the inherent uncertainty of valuations of such securities, the fair value may differ significantly from the values that would have been used had a ready market for such securities existed. If trading or events occurring after the close of the principal market in which securities are traded are expected to materially affect the value of those securities, then they may be valued at their fair value, taking this trading or these events into account. Fair value is determined in good faith by the Advisor under procedures approved by and under the general supervision and responsibility of the Fund’s Board of Directors (the “Board”). In accordance with the procedures approved by the Board, the Series applies fair value pricing on a daily basis except for North American, Central American, South American and Caribbean equity securities. Fair valuing of securities is determined with the assistance of a pricing service using calculations or factors based on indices of domestic securities and other appropriate indicators, such as prices of relevant American Depository Receipts and futures contracts, to adjust local market prices for subsequent movements through the time the Series calculates its net asset value. The value of securities used for the net asset value calculation under the procedures may differ from published prices for the same securities. It is the Fund’s

13

Notes to Financial Statements

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

Security Valuation (continued)

policy to classify each foreign equity security, except for those in the regions noted above, as Level 2 securities due to the fact the pricing service evaluated what factor was applied to the calculated end of day market price.

Various inputs are used in determining the value of the Series’ assets or liabilities carried at market value. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical assets and liabilities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.). Level 3 includes significant unobservable inputs (including the Series’ own assumptions in determining the fair value of investments). The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

The following is a summary of the valuation levels used for major security types as of December 31, 2010 in valuing the Series’ assets or liabilities carried at market value:

Description	Total		Level 1		Level 2		Level 3
Assets:
Equity securities*	$	236,491,435	$	182,331,280	$	54,160,155	$	—	****
Preferred securities		—		—		—		—
Debt securities		—		—		—		—
Mutual funds		11,668,542		11,668,542		—		—
Other financial instruments**:		—		—		—		—
Total assets:		248,159,977		193,999,822		54,160,155		—
Liabilities:
Other financial instruments**:		—		—		—		—
Total liabilities:		—		—		—		—
Total	$	248,159,977	$	193,999,822	$	54,160,155	$	—

The following table is a reconciliation of Level 3 investments for which significant unobservable inputs were used to determine fair value:

		000000000000		000000000000		000000000000
Level 3 reconciliation	Equity Securities				Preferred Securities
Balance as of December 31, 2009 (market value)	$	37,739			$	231,250
Realized gain (loss)		(365,484	)			—
Change in unrealized appreciation (depreciation)***		327,745				(231,250	)
Net purchases (sales)		—				—
Transfers in and/or out of Level 3		—				—
Balance as of December 31, 2010 (market value)	$	—			$	—

*Includes common stock, warrants and rights. Please see the Investment Portfolio for industry classification and for securities where an International Fair Value factor from the pricing service was applied to value the security. Such securities are included in Level 2 in the table above.

**Other financial instruments are derivative instruments not reflected in the Investment Portfolio, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument. As of December 31, 2010, the Series did not hold any derivative instruments.

14

Notes to Financial Statements

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

Security Valuation (continued)

***The change in unrealized appreciation (depreciation) on securities still held at December 31, 2010 was $(241,223), which is included in the related net change in unrealized appreciation/depreciation on the Statement of Operations.

****Avalon Healthcare Holdings, Inc., Avalon Healthcare Holdings, Inc.- Series D, and Avalon Healthcare Holdings, Inc. 2/27/2014 are Level 3 as of December 31, 2010. However, there is no market value for these securities reported in the financial statements.

The Fund’s policy is to recognize transfers in and transfers out of the valuation levels as of the beginning of the reporting period. During the year ended December 31, 2010, the Fund had three foreign equity securities transfer from Level 1 to Level 2 due to the implementation of new international fair value pricing procedures. The following is a summary of the foreign equity securities that transferred from Level 1 to Level 2:

Total # Securities Level 1 at beginning and Level 2 at end of period	Total Market Value Beginning of period		Total Market Value End of period		Change in Market Value
3	$	30,576,707	$	26,417,257	$	(4,159,450	)

Additional disclosure surrounding the activity in Level 3 fair value measurement will be effective for fiscal years beginning after December 15, 2010. Management has concluded that this will not have a material impact on the Series’ financial statements.

Security Transactions, Investment Income and Expenses

Security transactions are accounted for on trade date. Dividend income is recorded on the ex-dividend date, except that if the ex-dividend date has passed, certain dividends from foreign securities are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends, if any, are recorded at the fair market value of the securities received. Interest income, including amortization of premium and accretion of discounts using the effective interest method, is earned from settlement date and accrued daily.

Expenses are recorded on an accrual basis. Most expenses of the Fund can be attributed to a specific series. Expenses which cannot be directly attributed are apportioned among the series in the Fund in such a manner as deemed equitable by the Fund’s Board, taking into consideration, among other things, the nature and type of expense.

The Series uses the identified cost method for determining realized gain or loss on investments for both financial statement and federal income tax reporting purposes.

Foreign Currency Translation

The books and records of the Series are maintained in U.S. dollars. Foreign currencies, investments and other assets and liabilities are translated into U.S. dollars at the current exchange rates. Purchases and sales of investment securities and income and expenses are translated on the respective dates of such transactions. The Series does not isolate realized and unrealized gains and losses attributable to changes in the exchange rates from gains and losses that arise from changes in the market value of investments. Such fluctuations are included with net realized and unrealized gain or loss on investments. Net realized foreign currency gains and losses represent foreign currency gains and losses between trade date and settlement date on securities transactions, gains and losses on disposition of foreign currencies and the difference between the amount of income and foreign withholding taxes recorded on the books of the Series and the amounts actually received or paid.

15

Notes to Financial Statements

Restricted securities

Restricted securities are purchased in private placement transactions, are not registered under the Securities Act of 1933, as amended, and may have contractual restrictions on resale. Information regarding restricted securities is included at the end of the Series’ Investment Portfolio.

Illiquid Securities

A security may be considered illiquid if so deemed in good faith by the Advisor under procedures approved by and under the general supervision and responsibility of the Fund’s Board. Securities that are illiquid are marked with the applicable footnote on the Investment Portfolio. As of December 31, 2010, the aggregate value of securities deemed illiquid was $0 representing 0% of the Series’ net assets.

Affiliated Companies

The 1940 Act defines “affiliated companies” to include securities in which a series owns 5% or more of the outstanding voting securities of the issuer. The following transactions were effected for the year ended December 31, 2010:

Name of Issuer	Value at 12/31/09	Purchase Cost	Sales Proceeds	Value at 12/31/10	Shares Held  at 12/31/10	Dividend Income 12/31/09 through 12/31/10	Net Realized Gain (Loss) 12/31/09 through 12/31/10
Avalon
HealthCare
Holdings, Inc. -
Series D	$231,250	$—	$—	$—	925,000	$—	$—
Avalon
HealthCare
Holdings, Inc.	9,590	—	—	—	38,359	—	—
Avalon
HealthCare
Holdings, Inc. -
Warrants
2/27/2014	383	—	—	—	38,359	—	—
	$241,223	$—	$—	$—	1,001,718	$—	$—

Federal Taxes

The Series’ policy is to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies. The Series is not subject to federal income tax or excise tax to the extent that the Series distributes to shareholders each year its taxable income, including any net realized gains on investments, in accordance with requirements of the Internal Revenue Code. Accordingly, no provision for federal income tax or excise tax has been made in the financial statements.

Management evaluates its tax positions to determine if the tax positions taken meet the minimum recognition threshold in connection with accounting for uncertainties in income tax positions taken or expected to be taken for the purposes of measuring and recognizing tax liabilities in the financial statements. Recognition of tax benefits of an uncertain tax position is required only when the position is “more likely than not” to be sustained assuming examination by taxing authorities. At December 31, 2010, the Series has recorded no liability for net unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken in future tax returns.

The Series files income tax returns in the U.S. federal jurisdiction, various states and foreign jurisdictions, as required. No income tax returns are currently under investigation. The statute of limitations on the Series’ tax returns remains open for the years ended December 31, 2007 through December 31, 2010. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.

16

Notes to Financial Statements

Additionally, based on the Fund’s understanding of the tax rules and rates related to income, gains and transactions for foreign jurisdictions in which it invests, the Series will provide for foreign taxes, and where appropriate, deferred foreign tax.

Distributions of Income and Gains

Distributions to shareholders of net investment income and net realized gains are made annually. An additional distribution may be necessary to avoid taxation of the Series. Distributions are recorded on the ex-dividend date.

Indemnifications

The Fund’s organizational documents provide former and current directors and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund’s maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.

Other

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.

3. TRANSACTIONS WITH AFFILIATES

The Fund has an Investment Advisory Agreement (the “Agreement”) with the Advisor, for which the Series pays a fee, computed daily and payable monthly, at an annual rate of 1.00% of the Series’ average daily net assets. Under the Agreement, personnel of the Advisor provide the Series with advice and assistance in the choice of investments and the execution of securities transactions, and otherwise maintain the Series’ organization. The Advisor also provides the Fund with necessary office space and fund administration and support services. The salaries of all officers of the Fund (except a percentage of the Fund’s Chief Compliance Officer’s salary, which is paid by the Fund), and of all Directors who are “affiliated persons” of the Fund, or of the Advisor, and all personnel of the Fund, or of the Advisor, performing services relating to research, statistical and investment activities, are paid by the Advisor. Each “non-affiliated” Director receives an annual stipend, which is allocated among all the active series of the Fund. In addition, these Directors also receive a fee per Board meeting attended plus a fee for each committee meeting attended.

Manning & Napier Investor Services, Inc., a registered broker-dealer affiliate of the Advisor, acts as distributor for the Fund’s shares. The services of Manning & Napier Investor Services, Inc. are provided at no additional cost to the Series.

For the year ended December 31, 2010, the Advisor voluntarily waived fees of $758, which is included as a reduction of expenses on the Statement of Operations. The Advisor is not eligible to recoup any expenses that have been waived or reimbursed in prior years.

The Advisor has agreements with PNC Global Investment Servicing (U.S.) Inc. (“PNCGIS”) under which PNCGIS serves as sub-accountant services agent and sub-transfer agent. The Fund pays the Advisor an annual fee related to fund accounting and administration of 0.0175% on the first $3 billion of average daily net assets (excluding Target Series); 0.015% on the next $3 billion of average daily net assets (excluding Target Series); and 0.01% of the average daily net assets in excess of $6 billion (excluding Target Series); plus a base fee of $25,500 per Series.

17

Notes to Financial Statements

3. TRANSACTIONS WITH AFFILIATES (continued)

Transfer Agent fees are charged to the Fund on a per account basis. Additionally, certain transaction- and cusip-based fees and out-of-pocket expenses, including charges for reporting relating to the Fund’s compliance program, are charged.

Effective July 1, 2010, PNCGIS, was sold to The Bank of New York Mellon Corporation, the Series’ custodian. At the close of the sale, PNCGIS changed its name to BNY Mellon Investment Servicing (U.S.) Inc. (“BNY”).

Expenses not directly attributable to a Series are allocated based on each Series’ relative net assets or number of accounts, depending on the expense.

4. PURCHASES AND SALES OF SECURITIES

For the year ended December 31, 2010, purchases and sales of securities, other than U.S. Government securities and short-term securities, were $166,102,061 and $233,048,440, respectively. There were no purchases or sales of U.S. Government securities.

5. CAPITAL STOCK TRANSACTIONS

Transactions in shares of Life Sciences Series were:

	For the Year Ended 12/31/10						For the Year Ended 12/31/09
	Shares			Amount			Shares			Amount
Sold		2,426,114		$	26,545,889			3,589,547		$	27,786,051
Reinvested		—			—			—			—
Repurchased		(7,813,236	)		(86,364,811	)		(4,015,779	)		(31,691,255	)
Total		(5,387,122	)	$	(59,818,922	)		(426,232	)	$	(3,905,204	)

Substantially all of the Series’ shares represent investments by fiduciary accounts over which the Advisor has sole investment discretion.

6. FINANCIAL INSTRUMENTS

The Series may trade in instruments including written and purchased options, forward foreign currency exchange contracts and futures contracts and other derivatives in the normal course of investing activities to assist in managing exposure to various market risks. Investments in these instruments may subject the Series to various elements of risk, which may involve, to a varying degree, elements of risk in excess of the amounts recognized for financial statement purposes. These risks include: the risk that changes in the value of a derivative may not correlate perfectly with the underlying asset, rate or index, counterparty credit risk related to over the counter derivatives counterparties’ failure to perform under contract terms, liquidity risk related to the lack of a liquid market for these contracts allowing the fund to close out its position(s) and documentation risk relating to disagreement over contract terms. No such investments were held by the Series during the year ended December 31, 2010.

7. FOREIGN SECURITIES

Investing in securities of foreign companies and foreign governments involves special risks and considerations not typically associated with investing in securities of domestic companies and the U.S. Government. These risks include revaluation of currencies and future adverse political and economic developments. Moreover, securities of foreign companies and foreign governments and their markets may be less liquid and their prices more volatile than those of comparable domestic companies and the U.S. Government.

18

Notes to Financial Statements

8. LIFE SCIENCES SECURITIES

The Series may focus its investments in certain related life sciences industries; hence, the Series may subject itself to a greater degree of risk than a series that is more diversified.

9. FEDERAL INCOME TAX INFORMATION

The amount and characterization of certain income and capital gains to be distributed are determined in accordance with federal income tax regulations, which may differ from accounting principles generally accepted in the United States of America. These differences are primarily due to differing book and tax treatments in the timing of the recognition of net investment income or gains and losses, including net operating losses, foreign currency gains and losses, losses deferred due to wash sales and post-October losses. The Series may periodically make reclassifications among its capital accounts to reflect income and gains available for distribution (or available capital loss carryovers) under income tax regulations without impacting the Series’ net asset value. Any such reclassifications are not reflected in the financial highlights.

There were no distributions to shareholders for the years ended December 31, 2010 or December 31, 2009. For the year ended December 31, 2010, the Series elected to defer $20,942 of currency losses, attributable to post-October losses.

At December 31, 2010, the tax basis of distributable earnings and the net unrealized appreciation based on the identified cost for federal income tax purposes were as follows:

Cost for federal income tax purposes	$	199,954,537
Unrealized appreciation	$	54,788,657
Unrealized depreciation		(6,583,217	)
Net unrealized appreciation	$	48,205,440
Capital loss carryover		20,419,145

At December 31, 2010, the capital loss carryover, disclosed above, available to the extent allowed by tax law to offset future net capital gain, if any, will expire as follows:

Loss  Carryover	Expiration Date
$15,858,502	December 31, 2016
$  4,560,643	December 31, 2017

The capital loss carryover utilized in the current year was $17,300,198.

19

Report of Independent Registered Public Accounting Firm

To the Board of Directors of Manning & Napier Fund, Inc. and Shareholders of Life Sciences Series:

In our opinion, the accompanying statement of assets and liabilities, including the investment portfolio, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the Life Sciences Series (a series of Manning & Napier Fund, Inc., hereafter referred to as the “Series”) at December 31, 2010, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Series’ management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2010 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

New York, New York

February 22, 2011

20

Renewal of Investment Advisory Agreement (unaudited)

At the Manning & Napier Fund, Inc. (the “Fund”) Board of Directors’ (the “Board”) meeting, held on November 17, 2010, the Investment Advisory Agreement (the “Agreement”) between the Fund and Manning & Napier Advisors, Inc. (the “Advisor”) was reviewed by the Board for renewal. In connection with the decision whether to renew the Agreement, a variety of material was prepared for and reviewed by the Board.

Representatives of the Advisor attended the meeting and presented additional oral and written information to the Board to assist the Board in its considerations. The discussion immediately below outlines the materials and information presented to the Board in connection with the Board’s 2010 Annual Review of the Agreement and the conclusions made by the Directors when determining to continue the Agreement.

• The Board considered the services provided by the Advisor under the Agreement including, among others: deciding what securities to purchase and sell for each Series; arranging for the purchase and sale of such securities by placing orders with broker-dealers; administering the affairs of the Fund (including the books and records of the Fund not maintained by third party service providers such as the custodian or sub-transfer agent); arranging for the insurance coverage for the Fund; and supervising the preparation of tax returns, SEC filings (including registration statements) and reports to shareholders for the Fund. The Board also considered the nature and quality of such services provided under the Agreement in light of the Advisor’s services provided to the Fund for 24 years. The Board discussed the quality of these services with representatives from the Advisor and concluded that the Advisor was performing its services to the Fund required under the Agreement in a reasonable manner.

• The Board considered the investment performance of the various Series of the Fund. The investment performance for each Series was reviewed on a cumulative basis since inception and on a one year basis. In addition, annualized performance for the following time periods was considered: inception, three year, five year, ten year, and current market cycle. A market cycle includes periods of both rising and falling markets. Returns for established benchmark indices for each Series were provided for each time period. The Board noted that the various Series were competitive against their respective benchmarks and/or peer groups over various time periods, but in particular over the full market cycle period relevant for the Series. In addition, the Board considered at the meeting (and considers on a quarterly basis) a peer group performance analysis consisting of Morningstar universes of mutual funds with similar investment objectives. The Board discussed the performance with representatives from the Advisor and concluded that the investment performance of each of the Fund’s Series was reasonable based on the Fund’s actual performance and comparative performance, especially performance over the current market cycle.

• The Board considered the costs of the Advisor’s services and the profits of the Advisor as they relate to the Advisor’s services to the Fund under the Agreement. In reviewing the Advisor’s costs and profits, the Board discussed the Advisor’s revenues generated from the Fund (on both an actual and adjusted basis) and its expenses associated with providing the services under the Agreement. In addition, the Board reviewed the Advisor’s expenses associated with Fund activities outside of the Agreement (such as expense reimbursements pursuant to expense caps and payments made by the Advisor to third party platforms on which shares of the Fund are available for purchase). It was noted by representatives of the Advisor that 11 of the 27 active Series of the Fund are currently experiencing expenses above the capped expense ratios. After discussing the above costs and profits, the Board concluded that the Advisor’s profitability relating to its services provided under the Agreement was reasonable.

• The Board considered the fees and expenses of the various Series of the Fund. The Advisor presented the advisory fees and total expenses for each Series, including the advisory fee adjusted for any expense waivers or reimbursements (either contractual or voluntary) paid by the Advisor. The advisory fees and expense ratios of each Series were compared to an average (on both a mean and median basis) of similar funds as disclosed on the Morningstar database. Representatives of the Advisor discussed with the Board the levels of its advisory

21

Renewal of Investment Advisory Agreement (unaudited)

fee for each Series of the Fund and as compared to the median and mean advisory fees for similar funds as listed on Morningstar. Expense ratios for every Series, except the Pro-Blend’s Class R and Class C, and Target Class R and Class C, are currently below the median and mean for similar funds as listed on Morningstar. Based on their review of the information provided, the Board concluded that the fees and expenses of each Series of the Fund were reasonable on a comparative basis.

• The Board also considered the other benefits the Advisor derives from its relationship with the Fund. Such other benefits include certain research products provided by soft dollars. Given the level of soft dollar transactions involving the Fund, the Board concluded that these additional benefits to the Advisor were reasonable.

• In addition to the factors described above, the Board considered the Advisor’s personnel, investment strategies, policies and procedures relating to compliance with personal securities transactions, and reputation, expertise and resources in domestic and foreign financial markets. The Board concluded that these factors support the conclusion that the Advisor performs its services in a reasonable manner.

• The Board did not consider economies of scale at this time because of the multiple uses of the Fund (for the Advisor’s discretionary investment account clients in addition to direct investors), the current profitability of the Advisor’s services to the Fund under the Agreement, and the overall size of the Fund complex.

Based on the Board’s deliberations and their evaluation of the information described above, the Board, including a majority of Directors that are not “interested persons” as defined in the Investment Company Act of 1940, concluded that the compensation under the Agreement was fair and reasonable in light of the services and expenses and such other matters as the Directors considered to be relevant in the exercise of their reasonable judgment. Accordingly, the Board approved the renewal of the Agreement. In the course of their deliberations, the Directors did not identify any particular information that was all important or controlling.

22

Directors’ and Officers’ Information (unaudited)

The Statement of Additional Information provides additional information about the Fund’s directors and officers and can be obtained without charge by calling 1-800-466-3863, at www.manningnapieradvisors.com, or on the EDGAR Database on the SEC Internet web site (http:// www.sec.gov). The following chart shows certain information about the Fund’s officers and directors, including their principal occupations during the last five years. Unless specific dates are provided, the individuals have held the listed positions for longer than five years.

INTERESTED DIRECTOR/OFFICER
Name:	B. Reuben Auspitz*
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	63
Current Position(s) Held with Fund:	Principal Executive Officer, President, Chairman & Director
Term of Office1 & Length of Time Served:	Indefinite - Director since 1984; Vice President 1984 - 2003; President since 2004; Principal Executive Officer since 2002
Principal Occupation(s) During Past 5 Years:	Executive Vice President; Executive Group Member**; Chief Compliance Officer since 2004; Vice Chairman since June 2010; Co-Executive Director from 2003-2010 - Manning & Napier Advisors, Inc. President;
	Director - Manning & Napier Investor Services, Inc.
	Holds or has held one or more of the following titles for various subsidiaries and affiliates: President, Vice President, Director, Chairman, Treasurer, Chief Compliance Officer or Member.
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
INDEPENDENT DIRECTORS
Name:	Paul A. Brooke
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	65
Current Position(s) Held with Fund:	Director, Audit Committee Member, Governance & Nominating Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 2007
Principal Occupation(s) During Past 5 Years:	Chairman & CEO, Alsius Corp. (investments); Managing Member, PMSV Holdings LLC (investments)
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	Incyte Corp. (2000-present)
	ViroPharma, Inc. (2000-present)
	HLTH Corp. (2000-present)
	Cheyne Capital International (2000-present)
	MPM Bio-equities (2000-present)
	GMP Companies (2000-present)
	HoustonPharma (2000-present)
Name:	Richard M. Hurwitz
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	47
Current Position(s) Held with Fund:	Director, Audit Committee Member, Governance & Nominating Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 2009
Principal Occupation(s) During Past 5 Years:	Chief Executive Officer, Pictometry International Corp. since August 2010 (provider of georeferenced, aerial image libraries and related software) Managing Partner (2006-July 2010) - Aegis Investment Partners, LLC (investments); Founder and Managing Partner (2004-2005) - Village Markets, LLC (groceries)
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	Pictometry International Corp. (2000-2010)
	Pioneering Technologies (2006-2009)
	Vensearch Capital Corp. (2003-2007)

23

Directors’ and Officers’ Information (unaudited)

INDEPENDENT DIRECTORS (continued)
Name:	Stephen B. Ashley
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	70
Current Position(s) Held with Fund:	Director, Audit Committee Member, Governance & Nominating Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 1996
Principal Occupation(s) During Past 5 Years:	Chairman, Director, President & Chief Executive Officer, The Ashley Group (property management and investment). Chairman (non-executive) 2004-2008; Director 1995-2008 - Fannie Mae (mortgage)
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	The Ashley Group (1995-2008)
	Genesee Corporation (1987-2007)
Name:	Peter L. Faber
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	72
Current Position(s) Held with Fund:	Director, Governance & Nominating Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 1987
Principal Occupation(s) During Past 5 Years:	Senior Counsel since 2006, Partner (1995 - 2006) - McDermott, Will & Emery LLP (law firm)
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	Partnership for New York City, Inc. (non-profit)
	New York Collegium (non-profit)
	Boston Early Music Festival (non-profit)
Name:	Harris H. Rusitzky
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	76
Current Position(s) Held with Fund:	Director, Audit Committee Member, Governance & Nominating Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 1985
Principal Occupation(s) During Past 5 Years:	President, The Greening Group (business consultants) since 1994; Partner, The Restaurant Group (restaurants) since 2006
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
OFFICERS
Name:	Jeffrey S. Coons, Ph.D., CFA
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	47
Current Position(s) Held with Fund:	Vice President
Term of Office1 & Length of Time Served:	Since 2004
Principal Occupation(s) During Past 5 Years:	President since 2010, Co-Director of Research since 2002, Executive Group Member** since 2003, - Manning & Napier Advisors, Inc. Holds one or more of the following titles for various subsidiaries and affiliates: President, Director, Treasurer or Senior Trust Officer.
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A

24

Directors’ and Officers’ Information (unaudited)

OFFICERS (continued)
Name:	Beth Galusha
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	49
Current Position(s) Held with Fund:	Assistant Chief Financial Officer
Term of Office1 & Length of Time Served:	Assistant Chief Financial Officer since 2010
Principal Occupation(s) During Past 5 Years:	Chief Financial Officer and Treasurer, Manning & Napier Advisors, Inc.
	Holds one or more of the following titles for various affiliates: Chief Financial Officer, Director, or Treasurer
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
Name:	Christine Glavin
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	44
Current Position(s) Held with Fund:	Principal Financial Officer, Chief Financial Officer
Term of Office1 & Length of Time Served:	Principal Financial Officer since 2002; Chief Financial Officer since 2001
Principal Occupation(s) During Past 5 Years:	Fund Reporting Manager, Manning & Napier Advisors, Inc. since 1997
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
Name:	Jodi L. Hedberg
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	43
Current Position(s) Held with Fund:	Corporate Secretary, Chief Compliance Officer, Anti-Money Laundering Compliance Officer
Term of Office1 & Length of Time Served:	Corporate Secretary since 1997; Chief Compliance Officer since 2004
Principal Occupation(s) During Past 5 Years:	Director of Compliance, Manning & Napier Advisors, Inc. and affiliates since 1990 (title change in 2005 from Compliance Manager to Director of Compliance); Corporate Secretary, Manning & Napier Investor Services, Inc. since 2006
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
Name:	Richard Yates
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	45
Current Position(s) Held with Fund:	Chief Legal Officer
Term of Office1 & Length of Time Served:	Chief Legal Officer since 2004
Principal Occupation(s) During Past 5 Years:	Counsel - Manning & Napier Advisors, Inc. & affiliates since 2000; Holds one or more of the following titles for various affiliates; Director or Corporate Secretary
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A

*Interested Director, within the meaning of the Investment Company Act of 1940 by reason of his position with the Fund’s investment advisor and distributor. Mr. Auspitz serves as the Executive Vice President and Director, Manning & Napier Advisors, Inc. and President and Director, Manning & Napier Investor Services, Inc., the Fund’s distributor.

**Prior to June 2010, the Executive Group, consisting of senior executive employee-owners, performed the duties of the Office of the Chief Executive of the Advisor. Effective June 2010, the Executive Group serves as an advisory board to the Chief Executive Officer.

¹The term of office for President, Vice President, Chief Financial Officer, Assistant Chief Financial Officer, Chief Legal Officer and Corporate Secretary is one year and until their respective successors are chosen and qualified. All other officers’ terms are indefinite.

25

Literature Requests (unaudited)

Proxy Voting Policies and Procedures

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available, without charge, upon request:

By phone	1-800-466-3863
On the Securities and Exchange Commission’s (SEC)web site	http://www.sec.gov

Proxy Voting Record

Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30th is available, without charge, upon request:

By phone	1-800-466-3863
On the SEC’s web site	http://www.sec.gov

Quarterly Portfolio Holdings

The Series’ complete schedule of portfolio holdings for the 1st and 3rd quarters of each fiscal year are provided on Form N-Q, and are available, without charge, upon request:

By phone	1-800-466-3863
On the SEC’s web site	http://www.sec.gov

The Series’ Form N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

Prospectus and Statement of Additional Information (SAI)

The prospectus and SAI provide additional information about each Series, including charges, expenses and risks. These documents are available, without charge, upon request:

By phone	1-800-466-3863
On the SEC’s web site	http://www.sec.gov
On the Advisor’s web site	http://www.manning-napier.com

Additional information available at www.manning-napier.com

1. Fund Holdings - Month-End

2. Fund Holdings - Quarter-End

3. Shareholder Report - Annual

4. Shareholder Report - Semi-Annual

MNLFS-12/10-AR

Management Discussion and Analysis (unaudited)

Dear Shareholders:

Over the course of 2010, the markets experienced several ups and downs driven by well-defined swings in investor sentiment. Optimism fueled strong market returns early in the year, as upbeat economic releases led investors to believe in the potential for a robust U.S. recovery. However, sentiment shifted drastically in May and June as more negative economic news and issues related to Europe’s government debt problems led to notable stock market losses. In another swing, the markets rebounded in the fall amid better economic developments and prospects that the Federal Reserve would enact another round of quantitative easing. That rally generally continued through the end of the year as the markets reacted positively to the U.S. tax compromise, which extended the Bush-era tax cuts for all income brackets.

With equities posting double-digit gains in the third and fourth quarters, the choppy year ended on a strong note, and broad equity indices have now produced back-to-back years of positive results. During 2010, the Russell 2000 Index earned 26.85%, outpacing indexes such as the Russell 1000 and S&P 500, which are composed of larger cap stocks. Similar to the Russell 2000 Index, the Small Cap Series had a return of 25.71%, slightly trailing the index for the year.

In the volatile market environment of 2010, Manning & Napier maintained a selective investment approach and focused on companies that we believe can grow market share. We continued to emphasize quality, targeting best-in-class companies expected to generate sales growth despite a muted economic backdrop, as well as “away game winners” expected to successfully compete in faster-growing markets overseas. Using our active stock selection strategies, our analysts also identified opportunities in certain cyclical industries that have experienced supply cutbacks. Specifically, we have looked for well-positioned companies that can take market share and benefit from tight supply and demand dynamics in certain industries. Overall, the Small Cap Series continues to have a bias toward larger, more stable small cap companies.

During 2010, the Series had a heavy weighting to Energy and Industrials versus the benchmark, which benefited the Series’ relative performance. Additionally, the Series had a relatively high allocation to the Consumer Discretionary and Staples sectors. Meanwhile, noticeably lower exposure to Financials than the benchmark helped relative performance over the past year, yet an underweight to Information Technology detracted from relative returns.

Stock selection decisions modestly aided relative results over the past twelve months. In particular, security selections in the Energy, Industrials, and Information Technology sectors contributed to positive relative performance. Several key Technology and Industrials holdings were either acquired or the subject of takeover speculation in the second half of the year, which helped drive outperformance. In contrast, specific investments in the Consumer Staples, Materials, and Utilities sectors hurt relative returns in 2010.

While economic developments turned more optimistic toward the end of 2010, the U.S. economy still faces significant headwinds, including a struggling housing market, a stagnant job market, a difficult consumer rebalancing act, and high government debt burdens. Given these long-term structural issues, the slow growth environment in the U.S. will likely remain a reality. As the markets fluctuated around this slow growth trend in 2010, Manning & Napier earned solid returns by staying focused on the fundamentals and maintaining our selective investment process. This investment approach has proved beneficial for the past 40 years, and we believe these qualities will remain important as the market environment unfolds in 2011.

As always, we appreciate your business.

Sincerely,

Manning & Napier Advisors, Inc.

1

Performance Update as of December 31, 2010 (unaudited)

				Average  Annual Total Returns As of December 31, 2010
	One Year			Five Year	Ten Year	Since Inception1
Manning & Napier Fund, Inc. - Small Cap Series2		25.71	%	-0.30%	6.50%	7.67%
S&P 500 Total Return Index3		15.07	%	2.30%	1.42%	8.25%
Russell 2000® Index3		26.85	%	4.47%	6.33%	9.20%

The following graph compares the value of a $10,000 investment in the Manning & Napier Fund, Inc. - Small Cap Series for the ten years ended December 31, 2010 to the S&P 500 Total Return Index and the Russell 2000^® Index.

¹Performance numbers for the Series and Indices are calculated from April 30, 1992, the Series’ current activation date.

²The Series’ performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of shares. The Series’ performance is historical and may not be indicative of future results. The performance returns shown are inclusive of the net expense ratio of the Series. For the year ended December 31, 2010, this net expense ratio was 1.12%. The gross expense ratio, which does not account for any voluntary or contractual waivers currently in effect, was 1.12% for the year ended December 31, 2010.

³The S&P 500 Total Return Index is an unmanaged capitalization-weighted measure of 500 widely held common stocks listed on the New York Stock Exchange, American Stock Exchange and the Over-the-Counter market. The Index returns assume daily reinvestment of dividends. The Russell 2000^® Index is an unmanaged index that consists of 2,000 U.S. small-capitalization stocks. The Index returns are based on a market capitalization-weighted average of relative price changes of the component stocks plus dividends whose reinvestments are compounded daily. Both Indices’ returns, unlike Series returns, do not reflect any fees or expenses.

2

Shareholder Expense Example (unaudited)

As a shareholder of the Series, you may incur two types of costs: (1) transaction costs and (2) ongoing costs, including management fees and other Series expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Series and to compare these costs with the ongoing costs of investing in other mutual funds.

The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (July 1, 2010 to December 31, 2010).

Actual Expenses

The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Series’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Series’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid during the period. You may use this information to compare the ongoing costs of investing in the Series and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.

	Beginning Account  Value 7/1/10	Ending Account  Value 12/31/10	Expenses Paid During Period* 7/1/10-12/31/10
Actual	$1,000.00	$1,358.20	$6.60
Hypothetical (5% return before expenses)	$1,000.00	$1,019.61	$5.65

*Expenses are equal to the Series’ annualized expense ratio (for the six-month period) of 1.11%, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). Expenses are based on the most recent fiscal half year; therefore, the expense ratio stated above may differ from the expense ratio stated in the financial highlights, which is based on one-year data. The Series’ total return would have been lower had certain expenses not been waived during the period.

3

Portfolio Composition as of December 31, 2010 (unaudited)

Market Capitalization		TopTen Stock Holdings2
Average	$2,143 Million	Tomra Systems ASA (Norway)	3.1	%
Median	1,595 Million	Zoll Medical Corp.	2.9	%
Weighted Average	1,963 Million	Imax Corp. (Canada)	2.9	%
		First Commonwealth Financial Corp.	2.5	%
		Paladin Energy Ltd. (Australia)	2.5	%
		RailAmerica, Inc.	2.3	%
		Alere, Inc.	2.3	%
		Infinera Corp.	2.3	%
		Calfrac Well Services Ltd. (Canada)	2.2	%
		Eagle Materials, Inc.	2.2	%
		2As a percentage of total investments.

4

Investment Portfolio - December 31, 2010

	Shares		Value (Note 2)
COMMON STOCKS - 95.1%
Consumer Discretionary - 18.4%
Auto Components - 1.5%
Cooper Tire & Rubber Co.		131,190	$	3,093,460
Distributors - 1.9%
Inchcape plc (United Kingdom)*1		714,271		3,983,905
Hotels, Restaurants & Leisure - 2.7%
Choice Hotels International, Inc.		52,060		1,992,336
Wendy’s - Arby’s Group, Inc. - Class A		783,990		3,622,034
				5,614,370
Household Durables - 2.9%
Lennar Corp. - Class A		89,340		1,675,125
Rodobens Negocios Imobiliarios S.A. (Brazil)		253,670		2,550,453
Tupperware Brands Corp.		36,310		1,730,898
				5,956,476
Media - 2.8%
Imax Corp. (Canada)*		211,620		5,935,941
Specialty Retail - 5.7%
Chico’s FAS, Inc.		183,690		2,209,791
Dick’s Sporting Goods, Inc.*		96,700		3,626,250
The Finish Line, Inc. - Class A		137,030		2,355,546
Lumber Liquidators Holdings, Inc.*		132,110		3,290,860
Select Comfort Corp.*		39,202		357,914
				11,840,361
Textiles, Apparel & Luxury Goods - 0.9%
Skechers U.S.A., Inc. - Class A*		94,810		1,896,200
Total Consumer Discretionary				38,320,713
Consumer Staples - 8.1%
Food & Staples Retailing - 3.0%
BJ’s Wholesale Club, Inc.*		40,940		1,961,026
SUPERVALU, Inc.		449,320		4,326,952
				6,287,978
Food Products - 5.1%
Diamond Foods, Inc.		45,430		2,415,967
Flowers Foods, Inc.		146,030		3,929,667
Sanderson Farms, Inc.		77,480		3,033,342
Tootsie Roll Industries, Inc.		42,966		1,244,725
				10,623,701
Total Consumer Staples				16,911,679

The accompanying notes are an integral part of the financial statements. 5

Investment Portfolio - December 31, 2010

	Shares		Value (Note 2)
COMMON STOCKS (continued)
Energy - 9.0%
Energy Equipment & Services - 6.6%
Calfrac Well Services Ltd. (Canada)		132,210	$	4,552,821
Dril-Quip, Inc.*		26,770		2,080,564
ION Geophysical Corp.*		249,310		2,114,149
Petroleum Geo-Services ASA (Norway)*1		144,580		2,272,693
Trican Well Service Ltd. (Canada)		131,340		2,660,352
				13,680,579
Oil, Gas & Consumable Fuels - 2.4%
Paladin Energy Ltd. (Australia)*		1,011,270		5,095,507
Total Energy				18,776,086
Financials - 8.9%
Commercial Banks - 3.6%
First Commonwealth Financial Corp.		733,470		5,192,968
First Financial Bancorp		120,890		2,234,047
				7,427,015
Real Estate Investment Trusts (REITS) - 4.1%
American Campus Communities, Inc.		63,600		2,019,936
Corporate Office Properties Trust		85,740		2,996,613
DuPont Fabros Technology, Inc.		65,620		1,395,737
Home Properties, Inc.		37,670		2,090,308
				8,502,594
Thrifts & Mortgage Finance - 1.2%
First Niagara Financial Group, Inc.		183,630		2,567,147
Total Financials				18,496,756
Health Care - 10.6%
Health Care Equipment & Supplies - 5.2%
Alere, Inc.*		130,026		4,758,952
Zoll Medical Corp.*		162,290		6,042,057
				10,801,009
Health Care Providers & Services - 3.0%
Cross Country Healthcare, Inc.*		306,770		2,598,342
Diagnosticos da America S.A. (Brazil)		277,760		3,764,819
				6,363,161
Life Sciences Tools & Services - 2.4%
Sequenom, Inc.*		543,940		4,362,399
WuXi PharmaTech (Cayman), Inc. - ADR (Cayman Islands)*		37,940		612,352
				4,974,751
Total Health Care				22,138,921

6 The accompanying notes are an integral part of the financial statements.

Investment Portfolio - December 31, 2010

	Shares		Value      (Note 2)
COMMON STOCKS (continued)
Industrials - 25.2%
Air Freight & Logistics - 1.5%
Atlas Air Worldwide Holdings, Inc.*		54,360	$	3,034,919
Airlines - 3.3%
Copa Holdings S.A. - Class A (Panama)		49,220		2,896,105
US Airways Group, Inc.*		403,220		4,036,232
				6,932,337
Commercial Services & Supplies - 3.1%
Tomra Systems ASA (Norway)1		962,570		6,408,360
Construction & Engineering - 1.3%
MYR Group, Inc.*		132,670		2,786,070
Machinery - 9.2%
ArvinMeritor, Inc.*		106,240		2,180,045
Astec Industries, Inc.*		77,910		2,525,063
Lindsay Corp.		41,890		2,489,523
Titan International, Inc.		197,330		3,855,828
Wabash National Corp.*		352,300		4,174,755
Wabtec Corp.		38,840		2,054,248
Westport Innovations, Inc. (Canada)*		101,140		1,873,113
				19,152,575
Marine - 1.0%
D/S Norden (Denmark)1		58,760		2,135,915
Road & Rail - 5.8%
Heartland Express, Inc.		257,840		4,130,597
Knight Transportation, Inc.		163,490		3,106,310
RailAmerica, Inc.*		373,540		4,837,343
				12,074,250
Total Industrials				52,524,426
Information Technology - 8.3%
Communications Equipment - 3.7%
Infinera Corp.*		454,180		4,691,679
Riverbed Technology, Inc.*		82,700		2,908,559
				7,600,238
Computers & Peripherals - 0.5%
Compellent Technologies, Inc.*		38,570		1,064,146
Internet Software & Services - 1.1%
VistaPrint N.V. (Netherlands)*		49,000		2,254,000
Software - 3.0%
Fortinet, Inc.*		75,730		2,449,865

The accompanying notes are an integral part of the financial statements. 7

Investment Portfolio - December 31, 2010

	Shares		Value      (Note 2)
COMMON STOCKS (continued)
Information Technology (continued)
Software (continued)
SolarWinds, Inc.*		201,600	$	3,880,800
				6,330,665
Total Information Technology				17,249,049
Materials - 5.5%
Chemicals - 3.3%
Calgon Carbon Corp.*		244,600		3,698,352
Flotek Industries, Inc.*		253,510		1,381,629
The Scotts Miracle-Gro Co. - Class A		35,400		1,797,258
				6,877,239
Construction Materials - 2.2%
Eagle Materials, Inc.		160,990		4,547,968
Total Materials				11,425,207
Utilities - 1.1%
Independent Power Producers & Energy Traders - 1.1%
GenOn Energy, Inc.*		607,963		2,316,339
TOTAL COMMON STOCKS (Identified Cost $156,046,584)				198,159,176
SHORT-TERM INVESTMENTS - 3.9%
Dreyfus Cash Management, Inc. - Institutional Shares2, 0.14% (Identified Cost $8,181,636)		8,181,636		8,181,636
TOTAL INVESTMENTS - 99.0%
(Identified Cost $164,228,220)				206,340,812
OTHER ASSETS, LESS LIABILITIES - 1.0%				2,056,296
NET ASSETS - 100%			$	208,397,108

ADR - American Depository Receipt

*Non-income producing security

¹International Fair Value factor from pricing service was applied.

²Rate shown is the current yield as of December 31, 2010.

8 The accompanying notes are an integral part of the financial statements.

Statement of Assets and Liabilities

December 31, 2010

ASSETS:
Investments, at value (identified cost $164,228,220) (Note 2)	$	206,340,812
Cash		80,722
Receivable for securities sold		8,975,034
Dividends receivable		137,758
Receivable for fund shares sold		125,007
TOTAL ASSETS		215,659,333
LIABILITIES:
Accrued management fees (Note 3)		173,847
Accrued fund accounting and administration fees (Note 3)		7,087
Accrued transfer agent fees (Note 3)		2,616
Accrued Chief Compliance Officer service fees (Note 3)		245
Payable for securities purchased		6,668,895
Payable for fund shares repurchased		348,981
Other payables and accrued expenses		60,554
TOTAL LIABILITIES		7,262,225
TOTAL NET ASSETS	$	208,397,108
NET ASSETS CONSIST OF:
Capital stock	$	224,225
Additional paid-in-capital		231,014,775
Accumulated net realized loss on investments, foreign currency and translation of other assets and liabilities		(64,954,922	)
Net unrealized appreciation on investments, foreign currency and translation of other assets and liabilities		42,113,030
TOTAL NET ASSETS	$	208,397,108
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER SHARE - CLASS A ($208,397,108/22,422,525 shares)	$	9.29

The accompanying notes are an integral part of the financial statements. 9

Statement of Operations

For the Year Ended December 31, 2010

INVESTMENT INCOME:
Dividends (net of foreign taxes withheld, $22,940)	$	1,740,239
Interest		55
Total Investment Income		1,740,294
EXPENSES:
Management fees (Note 3)		1,768,512
Fund accounting and administration fees (Note 3)		50,321
Transfer agent fees (Note 3)		16,169
Directors’ fees (Note 3)		9,389
Chief Compliance Officer service fees (Note 3)		2,631
Custodian fees		20,527
Miscellaneous		107,635
Total Expenses		1,975,184
Less reduction of expenses (Note 3)		(758	)
Net Expenses		1,974,426
NET INVESTMENT LOSS		(234,132	)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY:
Net realized gain (loss) on- Investments		28,499,262
Foreign currency and translation of other assets and liabilities		(4,579	)
		28,494,683
Net change in unrealized appreciation on- Investments		14,571,251
Foreign currency and translation of other assets and liabilities		229
		14,571,480
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND FOREIGN CURRENCY		43,066,163
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS		$  42,832,031

10 The accompanying notes are an integral part of the financial statements.

Statements of Changes in Net Assets

	For the Year Ended 12/31/10			For the Year Ended 12/31/09
INCREASE IN NET ASSETS:
OPERATIONS:
Net investment loss	$	(234,132	)	$	(481,098	)
Net realized gain (loss) on investments and foreign currency		28,494,683			(22,236,560	)
Net change in unrealized appreciation on investments and foreign currency		14,571,480			78,307,749
Net increase from operations		42,832,031			55,590,091
CAPITAL STOCK ISSUED AND REPURCHASED:
Net decrease from capital share transactions (Note 5)		(6,344,912	)		(3,842,395	)
			��
Net increase in net assets		36,487,119			51,747,696
NET ASSETS:
Beginning of year		171,909,989			120,162,293
End of year (including undistributed net investment income of $0 and $0, respectively)	$	208,397,108		$	171,909,989

The accompanying notes are an integral part of the financial statements. 11

Financial Highlights

	For the Years Ended
	12/31/10			12/31/09			12/31/08			12/31/07			12/31/06
Per share data (for a share outstanding throughout each year):
Net asset value - Beginning of year		$7.39			$4.98			$10.21			$13.08			$13.66
Income (loss) from investment operations:
Net investment loss		(0.01	)1		(0.02	)1		(0.02	)		(0.01	)		(0.05	)
Net realized and unrealized gain (loss) on investments		1.91			2.43			(5.12	)		(1.25	)		2.55
Total from investment operations		1.90			2.41			(5.14	)		(1.26	)		2.50
Less distributions to shareholders:
From net realized gain on investments		—			—			(0.09	)		(1.61	)		(3.08	)
Net asset value - End of year		$9.29		$	7.39		$	4.98		$	10.21		$	13.08
Net assets - End of year (000’s omitted)		$208,397		$	171,910		$	120,162		$	184,998		$	175,491
Total return2		25.71%			48.39%			(50.68%	)		(9.32%	)		18.06%
Ratios (to average net assets)/ Supplemental Data:
Expenses*		1.12%			1.15%			1.15%			1.14%			1.16%
Net investment loss		(0.13%	)		(0.34%	)		(0.39%	)		(0.08%	)		(0.40%	)
Portfolio turnover		75%			76%			68%			64%			85%
*The investment advisor did not impose all or a portion of its management fees, CCO fees, fund accounting and transfer agent fees, and other fees in some years and in some years paid a portion of the Series’ expenses. If these expenses had been incurred by the Series, the expense ratio (to average net assets) would have been increased by the following amounts:
		0.00	%3		0.00	%3		N/A			N/A			N/A

¹Calculated based on average shares outstanding during the year.

²Represents aggregate total return for the years indicated, and assumes reinvestment of all distributions. Total returns would have been lower had certain expenses not been waived or reimbursed during certain years.

³Less than 0.01%.

12 The accompanying notes are an integral part of the financial statements.

Notes to Financial Statements

1. ORGANIZATION

Small Cap Series (the “Series”) is a no-load diversified series of Manning & Napier Fund, Inc. (the “Fund”). The Fund is organized in Maryland and is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company.

The Series’ investment objective is to provide long-term growth by investing principally in the common stocks of companies with small market capitalizations.

The Series is authorized to issue five classes of shares (Class A, B, D, E and Z). Currently, only Class A shares have been issued. Each class of shares is substantially the same, except that class-specific distribution and shareholder servicing expenses are borne by the specific class of shares to which they relate.

The Fund’s Advisor is Manning & Napier Advisors, Inc. (the “Advisor”). Shares of the Series are offered to investors, clients and employees of the Advisor and its affiliates. The total authorized capital stock of the Fund consists of 10.0 billion shares of common stock each having a par value of $0.01. As of December 31, 2010, 6.2 billion shares have been designated in total among 29 series, of which 87.5 million have been designated as Small Cap Series Class A common stock.

2. SIGNIFICANT ACCOUNTING POLICIES

Security Valuation

Portfolio securities, including domestic equities, foreign equities, warrants and options, listed on an exchange other than the NASDAQ National Market System are valued at the latest quoted sales price of the exchange on which the security is primarily traded. Securities not traded on valuation date or securities not listed on an exchange are valued at the latest quoted bid price provided by the Fund’s pricing service. Securities listed on the NASDAQ National Market System are valued in accordance with the NASDAQ Official Closing Price.

Short-term investments that mature in sixty days or less are valued at amortized cost, which approximates market value. Investments in open-end investment companies are valued at their net asset value per share on valuation date.

Volume and level of activity in established markets for an asset or liability are evaluated to determine whether recent transactions and quoted prices are determinative of fair value. Where there have been significant decreases in volume and level of activity, further analysis and adjustment may be necessary to estimate fair value. The Series measures fair value in these instances by the use of inputs and valuation techniques which may be based upon current market prices of securities that are comparable in coupon, rating, maturity and industry and/or expectation of future cash flows. As a result of trading in relatively thin markets and/or markets that experience significant volatility, the prices used by the Series to value these securities may differ from the value that would be realized if these securities were sold, and the differences could be material.

Securities for which representative valuations or prices are not available from the Fund’s pricing service may be valued at fair value. Due to the inherent uncertainty of valuations of such securities, the fair value may differ significantly from the values that would have been used had a ready market for such securities existed. If trading or events occurring after the close of the principal market in which securities are traded are expected to materially affect the value of those securities, then they may be valued at their fair value, taking this trading or these events into account. Fair value is determined in good faith by the Advisor under procedures approved by and under the general supervision and responsibility of the Fund’s Board of Directors (the “Board”). In accordance with the procedures approved by the Board, the Series applies fair value pricing on a daily basis except for North American, Central American, South American and Caribbean equity securities. Fair valuing of securities is determined with the assistance of a pricing service using calculations or factors based on indices of domestic securities and other appropriate indicators, such as prices of relevant American Depository Receipts and futures contracts, to adjust local market prices for subsequent

13

Notes to Financial Statements

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

Security Valuation (continued)

movements through the time the Series calculates its net asset value. The value of securities used for the net asset value calculation under the procedures may differ from published prices for the same securities. It is the Fund’s policy to classify each foreign equity security, except for those in the regions noted above, as Level 2 securities due to the fact the pricing service evaluated what factor was applied to the calculated end of day market price.

Various inputs are used in determining the value of the Series’ assets or liabilities carried at market value. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical assets and liabilities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.). Level 3 includes significant unobservable inputs (including the Series’ own assumptions in determining the fair value of investments). The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

The following is a summary of the valuation levels used for major security types as of December 31, 2010 in valuing the Series’ assets or liabilities carried at market value:

		000000000000000		000000000000000		000000000000000		000000000000000
Description	Total		Level 1		Level 2		Level  3
Assets:
Equity securities*	$	198,159,176	$	183,358,303	$	14,800,873	$	—
Preferred securities		—		—		—		—
Debt securities		—		—		—		—
Mutual funds		8,181,636		8,181,636		—		—
Other financial instruments**:		—		—		—		—
Total assets:		206,340,812		191,539,939		14,800,873		—
Liabilities:
Other financial instruments**:		—		—		—		—
Total liabilities:		—		—		—		—
Total	$	206,340,812	$	191,539,939	$	14,800,873	$	—

*Includes common stock, warrants and rights. Please see the Investment Portfolio for industry classification and for securities where an International Fair Value factor from the pricing service was applied to value the security. Such securities are included in Level 2 in the table above.

**Other financial instruments are derivative instruments not reflected in the Investment Portfolio, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument. As of December 31, 2010, the Series did not hold any derivative instruments.

There were no Level 3 securities held by the Series as of December 31, 2009 or December 31, 2010.

The Fund’s policy is to recognize transfers in and transfers out of the valuation levels as of the beginning of the reporting period. During the year ended December 31, 2010, the Fund had one foreign equity security transfer from Level 1 to Level 2 due to the implementation of new international fair value pricing procedures. The following is a summary of the foreign equity securities that transferred from Level 1 to Level 2:

14

Notes to Financial Statements

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

Security Valuation (continued)

Total # Securities Level 1 at beginning and Level 2 at end of period	Total  Market Value Beginning of period		Total Market Value End of period		Change in Market Value
1	$	4,605,200	$	6,408,360	$	1,803,160

Additional disclosure surrounding the activity in Level 3 fair value measurement will be effective for fiscal years beginning after December 15, 2010. Management has concluded that this will not have a material impact on the Series’ financial statements.

Security Transactions, Investment Income and Expenses

Security transactions are accounted for on trade date. Dividend income is recorded on the ex-dividend date, except that if the ex-dividend date has passed, certain dividends from foreign securities are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends, if any, are recorded at the fair market value of the securities received. Interest income, including amortization of premium and accretion of discounts using the effective interest method, is earned from settlement date and accrued daily.

Expenses are recorded on an accrual basis. Most expenses of the Fund can be attributed to a specific series. Expenses which cannot be directly attributed are apportioned among the series in the Fund in such a manner as deemed equitable by the Fund’s Board, taking into consideration, among other things, the nature and type of expense.

The Series uses the identified cost method for determining realized gain or loss on investments for both financial statement and federal income tax reporting purposes.

Foreign Currency Translation

The books and records of the Series are maintained in U.S. dollars. Foreign currencies, investments and other assets and liabilities are translated into U.S. dollars at the current exchange rates. Purchases and sales of investment securities and income and expenses are translated on the respective dates of such transactions. The Series does not isolate realized and unrealized gains and losses attributable to changes in the exchange rates from gains and losses that arise from changes in the market value of investments. Such fluctuations are included with net realized and unrealized gain or loss on investments. Net realized foreign currency gains and losses represent foreign currency gains and losses between trade date and settlement date on securities transactions, gains and losses on disposition of foreign currencies and the difference between the amount of income and foreign withholding taxes recorded on the books of the Series and the amounts actually received or paid.

Federal Taxes

The Series’ policy is to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies. The Series is not subject to federal income tax or excise tax to the extent that the Series distributes to shareholders each year its taxable income, including any net realized gains on investments, in accordance with requirements of the Internal Revenue Code. Accordingly, no provision for federal income tax or excise tax has been made in the financial statements.

Management evaluates its tax positions to determine if the tax positions taken meet the minimum recognition threshold in connection with accounting for uncertainties in income tax positions taken or expected to be taken for the purposes of measuring and recognizing tax liabilities in the financial statements. Recognition of tax benefits of an uncertain tax position is required only when the position is “more likely than not” to be sustained assuming examination by

15

Notes to Financial Statements

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

Federal Taxes (continued)

taxing authorities. At December 31, 2010, the Series has recorded no liability for net unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken in future tax returns.

The Series files income tax returns in the U.S. federal jurisdiction, various states and foreign jurisdictions, as required. No income tax returns are currently under investigation. The statute of limitations on the Series’ tax returns remains open for the years ended December 31, 2007 through December 31, 2010. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.

Additionally, based on the Fund’s understanding of the tax rules and rates related to income, gains and transactions for foreign jurisdictions in which it invests, the Series will provide for foreign taxes, and where appropriate, deferred foreign tax.

Distributions of Income and Gains

Distributions to shareholders of net investment income and net realized gains are made annually. An additional distribution may be necessary to avoid taxation of the Series. Distributions are recorded on the ex-dividend date.

Indemnifications

The Fund’s organizational documents provide former and current directors and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund’s maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.

Other

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.

3. TRANSACTIONS WITH AFFILIATES

The Fund has an Investment Advisory Agreement (the “Agreement”) with the Advisor, for which the Series pays a fee, computed daily and payable monthly, at an annual rate of 1.00% of the Series’ average daily net assets.

Under the Agreement, personnel of the Advisor provide the Series with advice and assistance in the choice of investments and the execution of securities transactions, and otherwise maintain the Series’ organization. The Advisor also provides the Fund with necessary office space and fund administration and support services. The salaries of all officers of the Fund (except a percentage of the Fund’s Chief Compliance Officer’s salary, which is paid by the Fund), and of all Directors who are “affiliated persons” of the Fund, or of the Advisor, and all personnel of the Fund, or of the Advisor, performing services relating to research, statistical and investment activities, are paid by the Advisor. Each “non-affiliated” Director receives an annual stipend, which is allocated among all the active series of the Fund. In addition, these Directors also receive a fee per Board meeting attended plus a fee for each committee meeting attended.

Manning & Napier Investor Services, Inc., a registered broker-dealer affiliate of the Advisor, acts as distributor for the Fund’s shares. The services of Manning & Napier Investor Services, Inc. are provided at no additional cost to the Series.

16

Notes to Financial Statements

3. TRANSACTIONS WITH AFFILIATES (continued)

For the year ended December 31, 2010, the Advisor voluntarily waived fees of $758, which is included as a reduction of expenses on the Statement of Operations. The Advisor is not eligible to recoup any expenses that have been waived or reimbursed in prior years.

The Advisor has agreements with PNC Global Investment Servicing (U.S.) Inc. (“PNCGIS”) under which PNCGIS serves as sub-accountant services agent and sub-transfer agent. The Fund pays the Advisor an annual fee related to fund accounting and administration of 0.0175% on the first $3 billion of average daily net assets (excluding Target Series); 0.015% on the next $3 billion of average daily net assets (excluding Target Series); and 0.01% of the average daily net assets in excess of $6 billion (excluding Target Series); plus a base fee of $25,500 per Series.

Transfer Agent fees are charged to the Fund on a per account basis. Additionally, certain transaction- and cusip-based fees and out-of-pocket expenses, including charges for reporting relating to the Fund’s compliance program, are charged.

Effective July 1, 2010, PNCGIS was sold to The Bank of New York Mellon Corporation, the Series’ custodian. At the close of the sale, PNCGIS changed its name to BNY Mellon Investment Servicing (U.S.) Inc. (“BNY”).

Expenses not directly attributable to a Series are allocated based on each Series’ relative net assets or number of accounts, depending on the expense.

4. PURCHASES AND SALES OF SECURITIES

For the year ended December 31, 2010, purchases and sales of securities, other than U.S. Government securities and short-term securities, were $127,636,610 and $138,310,342, respectively. There were no purchases or sales of U.S. Government securities.

5. CAPITAL STOCK TRANSACTIONS

Transactions in Class A shares of Small Cap Series were:

	For the Year Ended 12/31/10						For the Year Ended 12/31/09
	Shares			Amount			Shares			Amount
Sold		2,171,584		$	16,811,321			3,622,635		$	20,933,139
Reinvested		—			—			—			—
Repurchased		(3,002,811	)		(23,156,233	)		(4,476,178	)		(24,775,534	)
Total		(831,227	)	$	(6,344,912	)		(853,543	)	$	(3,842,395	)

Approximately 90% of the Series’ shares represent investments by fiduciary accounts over which the Advisor has sole investment discretion.

6. FINANCIAL INSTRUMENTS

The Series may trade in instruments including written and purchased options, forward foreign currency exchange contracts and futures contracts and other derivatives in the normal course of investing activities to assist in managing exposure to various market risks. Investments in these instruments may subject the Series to various elements of risk, which may involve, to a varying degree, elements of risk in excess of the amounts recognized for financial statement purposes. These risks include: the risk that changes in the value of a derivative may not correlate perfectly with the underlying asset, rate or index, counterparty credit risk related to over the counter derivatives counterparties’ failure to perform under contract terms, liquidity risk related to the lack of a liquid market for these contracts allowing

17

Notes to Financial Statements

6. FINANCIAL INSTRUMENTS (continued)

the fund to close out its position(s) and documentation risk relating to disagreement over contract terms. No such investments were held by the Series during the year ended December 31, 2010.

7. FOREIGN SECURITIES

Investing in securities of foreign companies and foreign governments involves special risks and considerations not typically associated with investing in securities of domestic companies and the U.S. Government. These risks include revaluation of currencies and future adverse political and economic developments. Moreover, securities of foreign companies and foreign governments and their markets may be less liquid and their prices more volatile than those of comparable domestic companies and the U.S. Government.

8. FEDERAL INCOME TAX INFORMATION

The amount and characterization of certain income and capital gains to be distributed are determined in accordance with federal income tax regulations, which may differ from accounting principles generally accepted in the United States of America. These differences are primarily due to differing book and tax treatments in the timing of the recognition of net investment income or gains and losses, including net operating losses, losses deferred due to wash sales and foreign currency gains and losses. The Series may periodically make reclassifications among its capital accounts to reflect income and gains available for distribution (or available capital loss carryovers) under income tax regulations without impacting the Series’ net asset value. Any such reclassifications are not reflected in the financial highlights.

There were no distributions to shareholders for the years ended December 31, 2010 or December 31, 2009.

At December 31, 2010 , the tax basis of distributable earnings and the net unrealized appreciation based on identified cost of investments for federal income tax purposes were as follows:

Cost for federal income tax purposes	$	164,228,221
Unrealized appreciation	$	45,444,657
Unrealized depreciation		(3,332,066	)
Net unrealized appreciation	$	42,112,591
Capital loss carryover		64,954,922

At December 31, 2010, the capital loss carryover, disclosed above, available to the extent allowed by tax law to offset future net capital gain, if any, will expire as follows:

Loss  Carryover	Expiration  Date
$12,581,033	December 31, 2016
$52,373,889	December 31, 2017

The capital loss carryover utilized in the current year was $28,485,949.

18

Report of Independent Registered Public Accounting Firm

To the Board of Directors of Manning & Napier Fund, Inc. and Shareholders of Small Cap Series:

In our opinion, the accompanying statement of assets and liabilities, including the investment portfolio, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the Small Cap Series (a series of Manning & Napier Fund, Inc., hereafter referred to as the “Series”) at December 31, 2010, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Series’ management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2010 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

New York, New York

February 22, 2011

19

Renewal of Investment Advisory Agreement (unaudited)

At the Manning & Napier Fund, Inc. (the “Fund”) Board of Directors’ (the “Board”) meeting, held on November 17, 2010, the Investment Advisory Agreement (the “Agreement”) between the Fund and Manning & Napier Advisors, Inc. (the “Advisor”) was reviewed by the Board for renewal. In connection with the decision whether to renew the Agreement, a variety of material was prepared for and reviewed by the Board.

Representatives of the Advisor attended the meeting and presented additional oral and written information to the Board to assist the Board in its considerations. The discussion immediately below outlines the materials and information presented to the Board in connection with the Board’s 2010 Annual Review of the Agreement and the conclusions made by the Directors when determining to continue the Agreement.

• The Board considered the services provided by the Advisor under the Agreement including, among others: deciding what securities to purchase and sell for each Series; arranging for the purchase and sale of such securities by placing orders with broker-dealers; administering the affairs of the Fund (including the books and records of the Fund not maintained by third party service providers such as the custodian or sub-transfer agent); arranging for the insurance coverage for the Fund; and supervising the preparation of tax returns, SEC filings (including registration statements) and reports to shareholders for the Fund. The Board also considered the nature and quality of such services provided under the Agreement in light of the Advisor’s services provided to the Fund for 24 years. The Board discussed the quality of these services with representatives from the Advisor and concluded that the Advisor was performing its services to the Fund required under the Agreement in a reasonable manner.

• The Board considered the investment performance of the various Series of the Fund. The investment performance for each Series was reviewed on a cumulative basis since inception and on a one year basis. In addition, annualized performance for the following time periods was considered: inception, three year, five year, ten year, and current market cycle. A market cycle includes periods of both rising and falling markets. Returns for established benchmark indices for each Series were provided for each time period. The Board noted that the various Series were competitive against their respective benchmarks and/or peer groups over various time periods, but in particular over the full market cycle period relevant for the Series. In addition, the Board considered at the meeting (and considers on a quarterly basis) a peer group performance analysis consisting of Morningstar universes of mutual funds with similar investment objectives. The Board discussed the performance with representatives from the Advisor and concluded that the investment performance of each of the Fund’s Series was reasonable based on the Fund’s actual performance and comparative performance, especially performance over the current market cycle.

• The Board considered the costs of the Advisor’s services and the profits of the Advisor as they relate to the Advisor’s services to the Fund under the Agreement. In reviewing the Advisor’s costs and profits, the Board discussed the Advisor’s revenues generated from the Fund (on both an actual and adjusted basis) and its expenses associated with providing the services under the Agreement. In addition, the Board reviewed the Advisor’s expenses associated with Fund activities outside of the Agreement (such as expense reimbursements pursuant to expense caps and payments made by the Advisor to third party platforms on which shares of the Fund are available for purchase). It was noted by representatives of the Advisor that 11 of the 27 active Series of the Fund are currently experiencing expenses above the capped expense ratios. After discussing the above costs and profits, the Board concluded that the Advisor’s profitability relating to its services provided under the Agreement was reasonable.

• The Board considered the fees and expenses of the various Series of the Fund. The Advisor presented the advisory fees and total expenses for each Series, including the advisory fee adjusted for any expense waivers or reimbursements (either contractual or voluntary) paid by the Advisor. The advisory fees and expense ratios of each Series were compared to an average (on both a mean and median basis) of similar funds as disclosed on the Morningstar database. Representatives of the Advisor discussed with the Board the levels of its advisory

20

Renewal of Investment Advisory Agreement (unaudited)

fee for each Series of the Fund and as compared to the median and mean advisory fees for similar funds as listed on Morningstar. Expense ratios for every Series, except the Pro-Blend’s Class R and Class C, and Target Class R and Class C, are currently below the median and mean for similar funds as listed on Morningstar. Based on their review of the information provided, the Board concluded that the fees and expenses of each Series of the Fund were reasonable on a comparative basis.

• The Board also considered the other benefits the Advisor derives from its relationship with the Fund. Such other benefits include certain research products provided by soft dollars. Given the level of soft dollar transactions involving the Fund, the Board concluded that these additional benefits to the Advisor were reasonable.

• In addition to the factors described above, the Board considered the Advisor’s personnel, investment strategies, policies and procedures relating to compliance with personal securities transactions, and reputation, expertise and resources in domestic and foreign financial markets. The Board concluded that these factors support the conclusion that the Advisor performs its services in a reasonable manner.

• The Board did not consider economies of scale at this time because of the multiple uses of the Fund (for the Advisor’s discretionary investment account clients in addition to direct investors), the current profitability of the Advisor’s services to the Fund under the Agreement, and the overall size of the Fund complex.

Based on the Board’s deliberations and their evaluation of the information described above, the Board, including a majority of Directors that are not “interested persons” as defined in the Investment Company Act of 1940, concluded that the compensation under the Agreement was fair and reasonable in light of the services and expenses and such other matters as the Directors considered to be relevant in the exercise of their reasonable judgment. Accordingly, the Board approved the renewal of the Agreement. In the course of their deliberations, the Directors did not identify any particular information that was all important or controlling.

21

Directors’ and Officers’ Information (unaudited)

The Statement of Additional Information provides additional information about the Fund’s directors and officers and can be obtained without charge by calling 1-800-466-3863, at www.manningnapieradvisors.com, or on the EDGAR Database on the SEC Internet web site (http:// www.sec.gov). The following chart shows certain information about the Fund’s officers and directors, including their principal occupations during the last five years. Unless specific dates are provided, the individuals have held the listed positions for longer than five years.

INTERESTED DIRECTOR/OFFICER
Name:	B. Reuben Auspitz*
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	63
Current Position(s) Held with Fund:	Principal Executive Officer, President, Chairman & Director
Term of Office1 & Length of Time Served:	Indefinite - Director since 1984; Vice President 1984 - 2003; President since 2004; Principal Executive Officer since 2002
Principal Occupation(s) During Past 5 Years:	Executive Vice President; Executive Group Member**; Chief Compliance Officer since 2004; Vice Chairman since June 2010; Co-Executive Director from 2003-2010 - Manning & Napier Advisors, Inc. President; Director - Manning & Napier Investor Services, Inc. Holds or has held one or more of the following titles for various subsidiaries and affiliates: President, Vice President, Director, Chairman, Treasurer, Chief Compliance Officer or Member.
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
INDEPENDENT DIRECTORS
Name:	Paul A. Brooke
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	65
Current Position(s) Held with Fund:	Director, Audit Committee Member, Governance & Nominating Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 2007
Principal Occupation(s) During Past 5 Years:	Chairman & CEO, Alsius Corp. (investments); Managing Member, PMSV Holdings LLC (investments)
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	Incyte Corp. (2000-present)
	ViroPharma, Inc. (2000-present)
	HLTH Corp. (2000-present)
	Cheyne Capital International (2000-present)
	MPM Bio-equities (2000-present)
	GMP Companies (2000-present)
	HoustonPharma (2000-present)
Name:	Richard M. Hurwitz
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	47
Current Position(s) Held with Fund:	Director, Audit Committee Member, Governance & Nominating Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 2009
Principal Occupation(s) During Past 5 Years:	Chief Executive Officer, Pictometry International Corp. since August 2010 (provider of georeferenced, aerial image libraries and related software) Managing Partner (2006-July 2010) - Aegis Investment Partners, LLC (investments); Founder and Managing Partner (2004-2005) - Village
	Markets, LLC (groceries)
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	Pictometry International Corp. (2000-2010)
	Pioneering Technologies (2006-2009)
	Vensearch Capital Corp. (2003-2007)

22

Directors’ and Officers’ Information (unaudited)

INDEPENDENT DIRECTORS (continued)
Name:	Stephen B. Ashley
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	70
Current Position(s) Held with Fund:	Director, Audit Committee Member, Governance & Nominating Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 1996
Principal Occupation(s) During Past 5 Years:	Chairman, Director, President & Chief Executive Officer, The Ashley Group (property management and investment). Chairman (non-executive) 2004-2008; Director 1995-2008 - Fannie Mae (mortgage)
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	The Ashley Group (1995-2008)
	Genesee Corporation (1987-2007)
Name:	Peter L. Faber
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	72
Current Position(s) Held with Fund:	Director, Governance & Nominating Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 1987
Principal Occupation(s) During Past 5 Years:	Senior Counsel since 2006, Partner (1995 - 2006) - McDermott, Will & Emery LLP (law firm)
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	Partnership for New York City, Inc. (non-profit)
	New York Collegium (non-profit)
	Boston Early Music Festival (non-profit)
Name:	Harris H. Rusitzky
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	76
Current Position(s) Held with Fund:	Director, Audit Committee Member, Governance & Nominating Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 1985
Principal Occupation(s) During Past 5 Years:	President, The Greening Group (business consultants) since 1994; Partner, The Restaurant Group (restaurants) since 2006
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
OFFICERS
Name:	Jeffrey S. Coons, Ph.D., CFA
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	47
Current Position(s) Held with Fund:	Vice President
Term of Office1 & Length of Time Served:	Since 2004
Principal Occupation(s) During Past 5 Years:	President since 2010, Co-Director of Research since 2002, Executive Group Member** since 2003, - Manning & Napier Advisors, Inc. Holds one or more of the following titles for various subsidiaries and affiliates: President, Director, Treasurer or Senior Trust Officer.
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A

23

Directors’ and Officers’ Information (unaudited)

OFFICERS (continued)
Name:	Beth Galusha
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	49
Current Position(s) Held with Fund:	Assistant Chief Financial Officer
Term of Office1 & Length of Time Served:	Assistant Chief Financial Officer since 2010
Principal Occupation(s) During Past 5 Years:	Chief Financial Officer and Treasurer, Manning & Napier Advisors, Inc. Holds one or more of the following titles for various affiliates: Chief Financial Officer, Director, or Treasurer
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
Name:	Christine Glavin
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	44
Current Position(s) Held with Fund:	Principal Financial Officer, Chief Financial Officer
Term of Office1 & Length of Time Served:	Principal Financial Officer since 2002; Chief Financial Officer since 2001
Principal Occupation(s) During Past 5 Years:	Fund Reporting Manager, Manning & Napier Advisors, Inc. since 1997
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
Name:	Jodi L. Hedberg
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	43
Current Position(s) Held with Fund:	Corporate Secretary, Chief Compliance Officer, Anti-Money Laundering Compliance Officer
Term of Office1 & Length of Time Served:	Corporate Secretary since 1997; Chief Compliance Officer since 2004
Principal Occupation(s) During Past 5 Years:	Director of Compliance, Manning & Napier Advisors, Inc. and affiliates since 1990 (title change in 2005 from Compliance Manager to Director of Compliance); Corporate Secretary, Manning & Napier Investor Services, Inc. since 2006
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
Name:	Richard Yates
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	45
Current Position(s) Held with Fund:	Chief Legal Officer
Term of Office1 & Length of Time Served:	Chief Legal Officer since 2004
Principal Occupation(s) During Past 5 Years:	Counsel - Manning & Napier Advisors, Inc. & affiliates since 2000; Holds one or more of the following titles for various affiliates; Director or Corporate Secretary
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A

*Interested Director, within the meaning of the Investment Company Act of 1940 by reason of his position with the Fund’s investment advisor and distributor. Mr. Auspitz serves as the Executive Vice President and Director, Manning & Napier Advisors, Inc. and President and Director, Manning

& Napier Investor Services, Inc., the Fund’s distributor.

**Prior to June 2010, the Executive Group, consisting of senior executive employee-owners, performed the duties of the Office of the Chief Executive of the Advisor. Effective June 2010, the Executive Group serves as an advisory board to the Chief Executive Officer.

¹The term of office for President, Vice President, Chief Financial Officer, Assistant Chief Financial Officer, Chief Legal Officer and Corporate Secretary is one year and until their respective successors are chosen and qualified. All other officers’ terms are indefinite.

24

This page Intentionally Left Blank

25

Literature Requests (unaudited)

Proxy Voting Policies and Procedures

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available, without charge, upon request:

By phone	1-800-466-3863
On the Securities and Exchange Commission’s (SEC) web site	http://www.sec.gov

Proxy Voting Record

Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30th is available, without charge, upon request:

By phone	1-800-466-3863
On the SEC’s web site	http://www.sec.gov

Quarterly Portfolio Holdings

The Series’ complete schedule of portfolio holdings for the 1st and 3rd quarters of each fiscal year are provided on Form N-Q, and are available, without charge, upon request:

By phone	1-800-466-3863
On the SEC’s web site	http://www.sec.gov

The Series’ Form N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

Prospectus and Statement of Additional Information (SAI)

The prospectus and SAI provide additional information about each Series, including charges, expenses and risks. These documents are available, without charge, upon request:

By phone	1-800-466-3863
On the SEC’s web site	http://www.sec.gov
On the Advisor’s web site	http://www.manning-napier.com

Additional information available at www.manning-napier.com

1. Fund Holdings - Month-End

2. Fund Holdings - Quarter-End

3. Shareholder Report - Annual

4. Shareholder Report - Semi-Annual

MNSCS-12/10-AR

Management Discussion and Analysis (unaudited)

Dear Shareholders:

Over the course of 2010, the markets experienced several ups and downs driven by well-defined swings in investor sentiment. Optimism fueled strong market returns early in the year, as upbeat economic releases led investors to believe in the potential for a robust U.S. recovery. However, sentiment shifted drastically in May and June as more negative economic news and issues related to Europe’s government debt problems led to notable stock market losses. In another swing, the markets rebounded in the fall amid better economic developments and prospects that the Federal Reserve would enact another round of quantitative easing. That rally generally continued through the end of the year as the markets reacted positively to the U.S. tax compromise, which extended the Bush-era tax cuts for all income brackets.

With equities posting double-digit gains in the third and fourth quarters, the choppy year ended on a strong note, and broad equity indices have now produced back-to-back years of positive results. For the twelve months ending December 31, 2010, the S&P 500 Index returned 15.07%, while the S&P 500 Information Technology Index earned 10.23%.

The Technology Series had a 19.53% return during 2010, outpacing the S&P 500 Information Technology Index as well as the broader stock market. More importantly, the Series continues to have a strong track record relative to the broad market and the sector-specific benchmark over the current market cycle, which includes both a bull and a bear market. Over this current cycle, the Technology Series has earned an annualized return of 20.44%, compared to the 7.52% return of the S&P 500 Index and the 11.11% return of the S&P 500 Information Technology Index.

In the volatile market environment of 2010, Manning & Napier maintained a selective investment approach and focused on companies that we believe can grow market share. We continued to emphasize quality, targeting best-in-class companies expected to generate sales growth despite a muted economic backdrop, as well as “away game winners” expected to successfully compete in faster-growing markets overseas.

Focusing on companies with strong fundamentals and favorable growth drivers, we took advantage of the market swings in 2010. During the market pullback in the second quarter, we added stocks with strong secular (i.e., non-cyclical) growth prospects that fit our Strategic Profile strategy, which seeks companies with a leading competitive advantage. Earlier in 2010 the Series reduced exposure to early cyclical companies, such as investments in the semiconductor capital equipment industry.

As the year progressed, there was an increased premium placed on sustainable, high-growth technology companies, particularly small and mid-cap stocks related to thematic trends such as cloud computing. Therefore, in the second half of the year, the Series benefited from owning some of these small and mid-cap holdings perceived to be long-term growth companies and attractive acquisition targets. Several of our selections were the subject of merger and acquisition activity and speculation, which led to outsized returns. In cases when the Advisor viewed the price appreciation as more speculative in nature, we took gains and trimmed the positions. Conversely, over the past year many large cap technology vendors with solid growth potential and sustainable competitive advantages have underperformed. At the end of the year, we began to increase exposure to many of these more attractively valued companies.

Over the last twelve months, specific stock selections significantly boosted the Technology Series’ outperformance. In particular, investments in the communications equipment, software, internet software & services, and wireless telecommunications services industries were the primary drivers of strong relative results. In contrast, security selections in the semiconductor capital equipment and IT services industries detracted from relative returns in 2010. The Series continues to maintain a heavy weighting to the communications equipment and internet software & services industries versus the benchmark.

While economic developments turned more optimistic toward the end of 2010, the U.S. economy still faces significant headwinds, including a struggling housing market, a stagnant job market, a difficult consumer rebalancing act, and high government debt burdens. Given these long-term structural issues, the slow growth environment in the U.S. will likely

1

Management Discussion and Analysis (unaudited)

remain a reality. As the markets fluctuated around this slow growth trend in 2010, Manning & Napier earned solid returns by staying focused on the fundamentals and maintaining our selective investment process. This investment approach has proved beneficial for the past 40 years, and we believe these qualities will remain important as the market environment unfolds in 2011.

As always, we appreciate your business.

Sincerely,

Manning & Napier Advisors, Inc.

2

Performance Update as of December 31, 2010 (unaudited)

			Average  Annual Total Returns As of December 31, 2010
	One Year		Five Year		Ten Year		Since Inception 1
Manning & Napier Fund, Inc. - Technology Series2		19.53%		9.81%		6.44%		2.83%
S&P 500 Total Return Index3		15.07%		2.30%		1.42%		0.28%
S&P 500 Information Technology Index3		10.23%		5.04%		-1.00%		-5.89%

The following graph compares the value of a $10,000 investment in the Manning & Napier Fund, Inc. - Technology Series from its current activation¹ (8/8/00) to present (12/31/10) to the S&P 500 Total Return Index and the S&P 500 Information Technology Index.

¹Performance numbers for the Series and Indices are calculated from August 8, 2000, the Series’ current activation date.

²The Series’ performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of shares. The Series’ performance is historical and may not be indicative of future results. The performance returns shown are inclusive of the net expense ratio of the Series. For the year ended December 31, 2010, this net expense ratio was 1.12%. The gross expense ratio, which does not account for any voluntary or contractual waivers currently in effect, was 1.12% for the year ended December 31, 2010.

³The S&P 500 Total Return Index is an unmanaged capitalization-weighted measure of 500 widely held common stocks listed on the New York Stock Exchange, American Stock Exchange and the Over-the-Counter market. The S&P 500 Information Technology Index, a sub-index of the S&P 500 Total Return Index, includes the stocks of companies involved in the business of technology related products and services. Both Indices’ returns assume daily reinvestment of dividends and, unlike Series returns, do not reflect any fees or expenses.

3

Shareholder Expense Example (unaudited)

As a shareholder of the Series, you may incur two types of costs: (1) transaction costs and (2) ongoing costs, including management fees and other Series expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Series and to compare these costs with the ongoing costs of investing in other mutual funds.

The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (July 1, 2010 to December 31, 2010).

Actual Expenses

The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Series’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Series’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid during the period. You may use this information to compare the ongoing costs of investing in the Series and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.

	Beginning Account Value 7/1/10	Ending Account  Value 12/31/10	Expenses Paid During Period 7/1/10-12/31/10*
Actual	$1,000.00	$1,346.10	$6.56
Hypothetical (5% return before expenses)	$1,000.00	$1,019.61	$5.65

*Expenses are equal to the Series’ annualized expense ratio (for the six-month period) of 1.11%, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). Expenses are based on the most recent fiscal half year; therefore, the expense ratio stated above may differ from the expense ratio stated in the financial highlights, which is based on one-year data. The Series’ total return would have been lower had certain expenses not been waived during the period.

4

Portfolio Composition as of December 31, 2010 (unaudited)

TopTen Stock Holdings2
QUALCOMM, Inc.	4.8	%	Infinera Corp.	3.9%
Microsoft Corp.	4.8	%	Cerner Corp.	3.8%
Cisco Systems, Inc.	4.8	%	VistaPrint N.V. (Netherlands)	3.8%
Google, Inc. - Class A	4.3	%	Autodesk, Inc.	3.6%
Juniper Networks, Inc.	4.1	%	Liberty Global, Inc. - Class A	3.5%
2As a percentage of total investments.

5

Investment Portfolio - December 31, 2010

	Shares		Value (Note 2)
COMMON STOCKS - 97.5%
Consumer Discretionary - 3.5%
Media - 3.5%
Liberty Global, Inc. - Class A*		165,000	$	5,837,700
Health Care - 3.8%
Health Care Technology - 3.8%
Cerner Corp.*		67,580		6,402,529
Information Technology - 85.7%
Communications Equipment - 23.8%
Alcatel-Lucent - ADR (France)*		1,570,600		4,648,976
Cisco Systems, Inc.*		394,000		7,970,620
Infinera Corp.*		638,430		6,594,982
Juniper Networks, Inc.*		187,800		6,933,576
QUALCOMM, Inc.		164,130		8,122,794
Riverbed Technology, Inc.*		160,000		5,627,200
				39,898,148
Computers & Peripherals - 6.9%
Apple, Inc.*		12,400		3,999,744
Compellent Technologies, Inc.*		78,000		2,152,020
EMC Corp.*		158,600		3,631,940
Immersion Corp.*		257,000		1,724,470
				11,508,174
Electronic Equipment, Instruments & Components - 3.4%
Amphenol Corp. - Class A		107,850		5,692,323
Internet Software & Services - 15.1%
comScore, Inc.*		247,530		5,522,394
Google, Inc. - Class A*		12,230		7,264,253
NetEase.com, Inc. - ADR (China)*		34,960		1,263,804
Tencent Holdings Ltd. (China)1		91,500		1,986,414
VistaPrint N.V. (Netherlands)*		139,000		6,394,000
Vocus, Inc.*		105,000		2,904,300
				25,335,165
IT Services - 11.4%
Accenture plc - Class A (Ireland)		112,000		5,430,880
Amadeus IT Holding S.A. - Class A (Spain)*1		176,000		3,698,695
Amdocs Ltd. (Guernsey)*		210,000		5,768,700
Cap Gemini S.A. (France)1		89,000		4,160,718
				19,058,993
Semiconductors & Semiconductor Equipment - 7.4%
Advantest Corp. (Japan)1		196,000		4,406,708
Sumco Corp. (Japan)*1		330,500		4,706,133

6 The accompanying notes are an integral part of the financial statements.

Investment Portfolio - December 31, 2010

	Shares/     Principal Amount			Value (Note 2)
COMMON STOCKS (continued)
Information Technology (continued)
Semiconductors & Semiconductor Equipment (continued)
Tokyo Electron Ltd. (Japan)1			51,000		$	3,211,021
						12,323,862
Software - 17.7%
Adobe Systems, Inc.*			48,650			1,497,447
Autodesk, Inc.*			158,000			6,035,600
Fortinet, Inc.*			143,000			4,626,050
Microsoft Corp.			288,900			8,066,088
SAP AG - ADR (Germany)			73,000			3,694,530
SolarWinds, Inc.*			300,000			5,775,000
						29,694,715
Total Information Technology						143,511,380
Materials - 4.5%
Chemicals - 4.5%
Monsanto Co.			57,790			4,024,496
Shin-Etsu Chemical Co. Ltd. (Japan)1			65,000			3,503,277
Total Materials						7,527,773
TOTAL COMMON STOCKS (Identified Cost $132,016,139)						163,279,382
CORPORATE BONDS - 1.6%
Non-Convertible Corporate Bonds - 1.6%
Telecommunication Services - 1.6%
Diversified Telecommunication Services - 1.6%
Clearwire Communications LLC - Clearwire Finance, Inc.2, 12.00%, 12/1/2015 (Identified Cost $2,516,553)		$	2,500,000			2,700,000
SHORT-TERM INVESTMENTS - 1.1%
Dreyfus Cash Management, Inc. - Institutional Shares3, 0.14% (Identified Cost $1,754,448)			1,754,448			1,754,448
TOTAL INVESTMENTS - 100.2% (Identified Cost $136,287,140)						167,733,830
LIABILITIES, LESS OTHER ASSETS - (0.2%)						(333,985	)
NET ASSETS - 100%					$	167,399,845

The accompanying notes are an integral part of the financial statements. 7

Investment Portfolio - December 31, 2010

ADR - American Depository Receipt

*Non-income producing security

¹International Fair Value factor from pricing service was applied.

²Restricted securities - Investment in securities that are restricted as to public resale under the Securities Act of 1933, as amended. This security has been sold under rule 144A and has been determined to be liquid under guidelines established by the Board of Directors. This security amounts to $2,700,000, or 1.6%, of the Series’ net assets as of December 31, 2010.

³Rate shown is the current yield as of December 31, 2010.

8 The accompanying notes are an integral part of the financial statements.

Statement of Assets and Liabilities

December 31, 2010

ASSETS:
Investments, at value (identified cost $136,287,140) (Note 2)		$	167,733,830
Receivable for fund shares sold			109,207
Interest receivable			25,547
Foreign tax reclaims receivable			7,951
Dividends receivable			2,884
TOTAL ASSETS			167,879,419
LIABILITIES:
Accrued management fees (Note 3)	��		147,924
Accrued fund accounting and administration fees (Note 3)			6,690
Accrued transfer agent fees (Note 3)			2,219
Accrued Chief Compliance Officer service fees (Note 3)			245
Payable for fund shares repurchased			266,423
Audit fees payable			31,285
Other payables and accrued expenses			24,788
TOTAL LIABILITIES			479,574
TOTAL NET ASSETS		$	167,399,845
NET ASSETS CONSIST OF:
Capital stock		$	143,927
Additional paid-in-capital			150,453,267
Undistributed net investment loss			(169	)
Accumulated net realized loss on investments, foreign currency and translation of other assets and liabilities			(14,643,870	)
Net unrealized appreciation on investments			31,446,690
TOTAL NET ASSETS		$	167,399,845
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER SHARE - CLASS A ($167,399,845/14,392,678 shares)		$	11.63

The accompanying notes are an integral part of the financial statements. 9

Statement of Operations

For the Year Ended December 31, 2010

INVESTMENT INCOME:
Dividends (net of foreign taxes withheld, $45,896)	$	569,714
Interest		297,916
Total Investment Income		867,630
EXPENSES:
Management fees (Note 3)		1,614,799
Fund accounting and administration fees (Note 3)		48,336
Transfer agent fees (Note 3)		13,289
Directors’ fees (Note 3)		9,348
Chief Compliance Officer service fees (Note 3)		2,630
Custodian fees		17,094
Miscellaneous		98,874
Total Expenses		1,804,370
Less reduction of expenses (Note 3)		(758	)
Net Expenses		1,803,612
NET INVESTMENT LOSS		(935,982	)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on Investments		16,824,084
Foreign currency and translation of other assets and liabilities		(1,436	)
		16,822,648
Net change in unrealized appreciation on investments		14,923,959
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS		31,746,607
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	30,810,625

10 The accompanying notes are an integral part of the financial statements.

Statements of Changes in Net Assets

	For the Year Ended 12/31/10			For the Year Ended 12/31/09
INCREASE IN NET ASSETS:
OPERATIONS:
Net investment loss	$	(935,982	)	$	(1,012,429	)
Net realized gain on investments and foreign currency		16,822,648			4,676,879
Net change in unrealized appreciation on investments and foreign currency		14,923,959			66,974,543
Net increase from operations		30,810,625			70,638,993
CAPITAL STOCK ISSUED AND REPURCHASED:
Net decrease from capital share transactions (Note 5)		(21,141,317	)		(36,020,529	)
Net increase in net assets		9,669,308			34,618,464
NET ASSETS:
Beginning of year		157,730,537			123,112,073
End of year (including undistributed net investment income (loss) of $(169) and $0, respectively)	$	167,399,845		$	157,730,537

The accompanying notes are an integral part of the financial statements. 11

Financial Highlights

				For the Years Ended
	12/31/10			12/31/09			12/31/08			12/31/07			12/31/06
Per share data (for a share outstanding throughout each year):
Net asset value - Beginning of year		$9.73			$6.01			$11.29			$10.41			$8.37
Income (loss) from investment operations:
Net investment loss		(0.06	)1		(0.05	)1		(0.05	)		(0.05	)		(0.01	)
Net realized and unrealized gain (loss) on investments		1.96			3.77			(5.09	)		2.34			2.05
Total from investment operations		1.90			3.72			(5.14	)		2.29			2.04
Less distributions to shareholders:
From net realized gain on investments		—			—			(0.14	)		(1.41	)		—
Net asset value - End of year		$11.63			$9.73			$6.01			$11.29			$10.41
Net assets - End of year (000’s omitted)		$167,400			$157,731			$123,112			$227,679			$167,252
Total return2		19.53%			61.90%			(45.86%	)		22.55%			24.37%
Ratios (to average net assets)/ Supplemental Data:
Expenses*		1.12%			1.13%			1.13%			1.13%			1.16%
Net investment loss		(0.58%	)		(0.68%	)		(0.53%	)		(0.53%	)		(0.14%	)
Portfolio turnover		70%			55%			65%			79%			83%
*The investment advisor did not impose all or a portion of its management fees, CCO fees, fund accounting and transfer agent fees, and other fees in some years and in some years paid a portion of the Series’ expenses. If these expenses had been incurred by the Series, the expense ratio (to average net assets) would have been increased by the following amounts:
		0.00%	3		0.00%	3		N/A			N/A			N/A

¹Calculated based on average shares outstanding during the year.

²Represents aggregate total return for the years indicated, and assumes reinvestment of all distributions. Total returns would have been lower had certain expenses not been waived or reimbursed during certain years.

³Less than 0.01%.

12 The accompanying notes are an integral part of the financial statements.

Notes to Financial Statements

1. ORGANIZATION

Technology Series (the “Series”) is a no-load diversified series of Manning & Napier Fund, Inc. (the “Fund”). The Fund is organized in Maryland and is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company.

The Series’ investment objective is to provide long-term growth by investing principally in the common stocks of companies in technology-based industries.

The Fund’s Advisor is Manning & Napier Advisors, Inc. (the “Advisor”). On August 8, 2000, the Series resumed sales of shares to advisory clients and employees of the Advisor and its affiliates. The Series resumed offering shares directly to investors on May 18, 2004, as it had done previously from time to time. The total authorized capital stock of the Fund consists of 10.0 billion shares of common stock each having a par value of $0.01. As of December 31, 2010, 6.2 billion shares have been designated in total among 29 series, of which 100 million have been designated as Technology Series Class A common stock.

2. SIGNIFICANT ACCOUNTING POLICIES

Security Valuation

Portfolio securities, including domestic equities, foreign equities, warrants and options, listed on an exchange other than the NASDAQ National Market System are valued at the latest quoted sales price of the exchange on which the security is primarily traded. Securities not traded on valuation date or securities not listed on an exchange are valued at the latest quoted bid price provided by the Fund’s pricing service. Securities listed on the NASDAQ National Market System are valued in accordance with the NASDAQ Official Closing Price.

Debt securities, including corporate bonds, will normally be valued on the basis of evaluated bid prices provided by an independent pricing service. Certain investments in securities held by the Series may be valued on a basis of a price provided directly by a principal market maker. These prices may differ from the value that would have been used had a broader market for securities existed.

Short-term investments that mature in sixty days or less are valued at amortized cost, which approximates market value. Investments in open-end investment companies are valued at their net asset value per share on valuation date.

Volume and level of activity in established markets for an asset or liability are evaluated to determine whether recent transactions and quoted prices are determinative of fair value. Where there have been significant decreases in volume and level of activity, further analysis and adjustment may be necessary to estimate fair value. The Series measures fair value in these instances by the use of inputs and valuation techniques which may be based upon current market prices of securities that are comparable in coupon, rating, maturity and industry and/or expectation of future cash flows. As a result of trading in relatively thin markets and/or markets that experience significant volatility, the prices used by the Series to value these securities may differ from the value that would be realized if these securities were sold, and the differences could be material.

Securities for which representative valuations or prices are not available from the Fund’s pricing service may be valued at fair value. Due to the inherent uncertainty of valuations of such securities, the fair value may differ significantly from the values that would have been used had a ready market for such securities existed. If trading or events occurring after the close of the principal market in which securities are traded are expected to materially affect the value of those securities, then they may be valued at their fair value, taking this trading or these events into account. Fair value is determined in good faith by the Advisor under procedures approved by and under the general supervision and responsibility of the Fund’s Board of Directors (the “Board”). In accordance with the procedures approved by the Board, the Series applies fair value pricing on a daily basis except for North American, Central American, South American and Caribbean equity securities. Fair valuing of securities is determined with the assistance of a pricing

13

Notes to Financial Statements

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

Security Valuation (continued)

service using calculations or factors based on indices of domestic securities and other appropriate indicators, such as prices of relevant American Depository Receipts and futures contracts, to adjust local market prices for subsequent movements through the time the Series calculates its net asset value. The value of securities used for the net asset value calculation under the procedures may differ from published prices for the same securities. It is the Fund’s policy to classify each foreign equity security, except for those in the regions noted above, as Level 2 securities due to the fact the pricing service evaluated what factor was applied to the calculated end of day market price.

Various inputs are used in determining the value of the Series’ assets or liabilities carried at market value. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical assets and liabilities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.). Level 3 includes significant unobservable inputs (including the Series’ own assumptions in determining the fair value of investments). The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

The following is a summary of the valuation levels used for major security types as of December 31, 2010 in valuing the Series’ assets or liabilities carried at market value:

Description	Total		Level 1		Level 2		Level  3
Assets:
Equity securities*	$	163,279,382	$	137,606,416	$	25,672,966	$	—
Preferred securities		—		—		—		—
Debt securities:		—		—				—
Corporate debt		2,700,000		—		2,700,000		—
Mutual funds		1,754,448		1,754,448		—		—
Other financialinstruments**:		—		—		—		—
Total assets:		167,733,830		139,360,864		28,372,966		—
Liabilities:
Other financial instruments**:		—		—		—		—
Total liabilities:		—		—		—		—
Total	$	167,733,830	$	139,360,864	$	28,372,966	$	—

*Includes common stock, warrants and rights. Please see the Investment Portfolio for industry classification and for securities where an International Fair Value factor from the pricing service was applied to value the security. Such securities are included in Level 2 in the table above.

**Other financial instruments are derivative instruments not reflected in the Investment Portfolio, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument. As of December 31, 2010, the Series did not hold any derivative instruments.

There were no Level 3 securities held by the Series as of December 31, 2009 or December 31, 2010.

The Fund’s policy is to recognize transfers in and transfers out of the valuation levels as of the beginning of the reporting period. During the year ended December 31, 2010, the Fund had three foreign equity securities transfer from Level 1 to Level 2 due to the implementation of new international fair value pricing procedures. The following is a summary of the foreign equity securities that transferred from Level 1 to Level 2:

14

Notes to Financial Statements

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

Security Valuation (continued)

Total # Securities Level 1 at beginning and Level 2 at end of period	Total Market Value Beginning of period		Total Market Value End of period		Change in Market Value
3	$	13,971,009	$	11,778,448	$	(2,192,561	)

Additional disclosure surrounding the activity in Level 3 fair value measurement will be effective for fiscal years beginning after December 15, 2010. Management has concluded that this will not have a material impact on the Series’ financial statements.

Security Transactions, Investment Income and Expenses

Security transactions are accounted for on trade date. Dividend income is recorded on the ex-dividend date, except that if the ex-dividend date has passed, certain dividends from foreign securities are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends, if any, are recorded at the fair market value of the securities received. Interest income, including amortization of premium and accretion of discounts using the effective interest method, is earned from settlement date and accrued daily.

Expenses are recorded on an accrual basis. Most expenses of the Fund can be attributed to a specific series. Expenses which cannot be directly attributed are apportioned among the series in the Fund in such a manner as deemed equitable by the Fund’s Board, taking into consideration, among other things, the nature and type of expense.

The Series uses the identified cost method for determining realized gain or loss on investments for both financial statement and federal income tax reporting purposes.

Foreign Currency Translation

The books and records of the Series are maintained in U.S. dollars. Foreign currencies, investments and other assets and liabilities are translated into U.S. dollars at the current exchange rates. Purchases and sales of investment securities and income and expenses are translated on the respective dates of such transactions. The Series does not isolate realized and unrealized gains and losses attributable to changes in the exchange rates from gains and losses that arise from changes in the market value of investments. Such fluctuations are included with net realized and unrealized gain or loss on investments. Net realized foreign currency gains and losses represent foreign currency gains and losses between trade date and settlement date on securities transactions, gains and losses on disposition of foreign currencies and the difference between the amount of income and foreign withholding taxes recorded on the books of the Series and the amounts actually received or paid.

Federal Taxes

The Series’ policy is to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies. The Series is not subject to federal income tax or excise tax to the extent that the Series distributes to shareholders each year its taxable income, including any net realized gains on investments, in accordance with requirements of the Internal Revenue Code. Accordingly, no provision for federal income tax or excise tax has been made in the financial statements.

Management evaluates its tax positions to determine if the tax positions taken meet the minimum recognition threshold in connection with accounting for uncertainties in income tax positions taken or expected to be taken for the purposes of measuring and recognizing tax liabilities in the financial statements. Recognition of tax benefits of an uncertain tax position is required only when the position is “more likely than not” to be sustained assuming examination by

15

Notes to Financial Statements

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

Federal Taxes (continued)

taxing authorities. At December 31, 2010, the Series has recorded no liability for net unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken in future tax returns.

The Series files income tax returns in the U.S. federal jurisdiction, various states and foreign jurisdictions, as required. No income tax returns are currently under investigation. The statute of limitations on the Series’ tax returns remains open for the years ended December 31, 2007 through December 31, 2010. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.

Additionally, based on the Fund’s understanding of the tax rules and rates related to income, gains and transactions for foreign jurisdictions in which it invests, the Series will provide for foreign taxes, and where appropriate, deferred foreign tax.

Distributions of Income and Gains

Distributions to shareholders of net investment income and net realized gains are made annually. An additional distribution may be necessary to avoid taxation of the Series. Distributions are recorded on the ex-dividend date.

Indemnifications

The Fund’s organizational documents provide former and current directors and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund’s maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.

Other

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.

3. TRANSACTIONS WITH AFFILIATES

The Fund has an Investment Advisory Agreement (the “Agreement”) with the Advisor, for which the Series pays a fee, computed daily and payable monthly, at an annual rate of 1.00% of the Series’ average daily net assets.

Under the Agreement, personnel of the Advisor provide the Series with advice and assistance in the choice of investments and the execution of securities transactions, and otherwise maintain the Series’ organization. The Advisor also provides the Fund with necessary office space and fund administration and support services. The salaries of all officers of the Fund (except a percentage of the Fund’s Chief Compliance Officer’s salary, which is paid by the Fund), and of all Directors who are “affiliated persons” of the Fund, or of the Advisor, and all personnel of the Fund, or of the Advisor, performing services relating to research, statistical and investment activities, are paid by the Advisor. Each “non-affiliated” Director receives an annual stipend, which is allocated among all the active series of the Fund. In addition, these Directors also receive a fee per Board meeting attended plus a fee for each committee meeting attended.

The Advisor has contractually agreed, until at least April 30, 2012, to waive its fee and, if necessary, pay other operating expenses of the Series in order to maintain total direct annual fund operating expenses for the Series at no more than 1.20% of average daily net assets each year. For the year ended December 31, 2010, the Advisor voluntarily

16

Notes to Financial Statements

3. TRANSACTIONS WITH AFFILIATES (continued)

waived fees of $758, which is included as a reduction of expenses on the Statement of Operations. The Advisor is not eligible to recoup any expenses that have been waived or reimbursed in prior years.

Manning & Napier Investor Services, Inc., a registered broker-dealer affiliate of the Advisor, acts as distributor for the Fund’s shares. The services of Manning & Napier Investor Services, Inc. are provided at no additional cost to the Series.

The Advisor has agreements with PNC Global Investment Servicing (U.S.) Inc. (“PNCGIS”) under which PNCGIS serves as sub-accountant services agent and sub-transfer agent. The Fund pays the Advisor an annual fee related to fund accounting and administration of 0.0175% on the first $3 billion of average daily net assets (excluding Target Series); 0.015% on the next $3 billion of average daily net assets (excluding Target Series); and 0.01% of the average daily net assets in excess of $6 billion (excluding Target Series); plus a base fee of $25,500 per Series.Transfer Agent fees are charged to the Fund on a per account basis. Additionally, certain transaction- and cusip-based fees and out-of-pocket expenses, including charges for reporting relating to the Fund’s compliance program, are charged.

Effective July 1, 2010, PNCGIS was sold to The Bank of New York Mellon Corporation, the Series’ custodian. At the close of the sale, PNCGIS changed its name to BNY Mellon Investment Servicing (U.S.) Inc. (“BNY”).

Expenses not directly attributable to a Series are allocated based on each Series’ relative net assets or number of accounts, depending on the expense.

4. PURCHASES AND SALES OF SECURITIES

For the year ended December 31, 2010, purchases and sales of securities, other than U.S. Government securities and short-term securities, were $103,664,949 and $112,200,278 respectively. There were no purchases or sales of U.S. Government securities.

5. CAPITAL STOCK TRANSACTIONS

Transactions in shares of Technology Series were:

	For the Year Ended 12/31/10						For the Year Ended 12/31/09
	Shares			Amount			Shares			Amount
Sold		1,704,514		$	17,060,290			1,678,722		$	12,866,101
Reinvested		—			—			—			—
Repurchased		(3,526,619	)		(38,201,607	)		(5,953,766	)		(48,886,630	)
Total		(1,822,105	)	$	(21,141,317	)		(4,275,044	)	$	(36,020,529	)

Substantially all of the Series’ shares represent investments by fiduciary accounts over which the Advisor has sole investment discretion.

6. FINANCIAL INSTRUMENTS

The Series may trade in instruments including written and purchased options, forward foreign currency exchange contracts and futures contracts and other derivatives in the normal course of investing activities to assist in managing exposure to various market risks. Investments in these instruments may subject the Series to various elements of risk, which may involve, to a varying degree, elements of risk in excess of the amounts recognized for financial statement purposes. These risks include: the risk that changes in the value of a derivative may not correlate perfectly

17

Notes to Financial Statements

6. FINANCIAL INSTRUMENTS (continued)

with the underlying asset, rate or index, counterparty credit risk related to over the counter derivatives counterparties’ failure to perform under contract terms, liquidity risk related to the lack of a liquid market for these contracts allowing the fund to close out its position(s) and documentation risk relating to disagreement over contract terms. No such investments were held by the Series during the year ended December 31, 2010.

7. FOREIGN SECURITIES

Investing in securities of foreign companies and foreign governments involves special risks and considerations not typically associated with investing in securities of domestic companies and the U.S. Government. These risks include revaluation of currencies and future adverse political and economic developments. Moreover, securities of foreign companies and foreign governments and their markets may be less liquid and their prices more volatile than those of comparable domestic companies and the U.S. Government.

8. TECHNOLOGY SECURITIES

The Series may focus its investments in certain related technology industries; hence, the Series may subject itself to a greater degree of risk than a series that is more diversified.

9. FEDERAL INCOME TAX INFORMATION

The amount and characterization of certain income and capital gains to be distributed are determined in accordance with federal income tax regulations, which may differ from accounting principles generally accepted in the United States of America. These differences are primarily due to differing book and tax treatments in the timing of the recognition of net investment income or gains and losses, including net operating losses, foreign currency gains and losses, losses deferred due to wash sales and post-October losses. The Series may periodically make reclassifications among its capital accounts to reflect income and gains available for distribution (or available capital loss carryovers) under income tax regulations without impacting the Series’ net asset value. Any such reclassifications are not reflected in the financial highlights.

There were no distributions to shareholders for the years ended December 31, 2010 or December 31, 2009.

For the year ended December 31, 2010, the Series elected to defer $169 of currency losses, attributable to post-October losses.

At December 31, 2010, the tax basis of distributable earnings and the net unrealized appreciation based on the identified cost for federal income tax purposes were as follows:

Cost for federal income tax purposes	$	136,399,096
Unrealized appreciation	$	35,210,118
Unrealized depreciation		(3,875,384	)
Net unrealized appreciation	$	31,334,734
Capital loss carryover		14,531,914

At December 31, 2010, the capital loss carryover, disclosed above, available to the extent allowed by tax law to offset future net capital gain, if any, will expire as follows:

Loss  Carryover	Expiration Date
$3,181,311		December 31,2016
$11,350,603		December 31,2017

The capital loss carryover utilized in the current year was $16,462,115.

18

Report of Independent Registered Public Accounting Firm

To the Board of Directors of Manning & Napier Fund, Inc. and Shareholders of Technology Series:

In our opinion, the accompanying statement of assets and liabilities, including the investment portfolio, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the Technology Series (a series of Manning & Napier Fund, Inc., hereafter referred to as the “Series”) at December 31, 2010, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Series’ management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2010 by correspondence with the custodian, provide a reasonable basis for our opinion.

New York, New York

February 22, 2011

19

Renewal of Investment Advisory Agreement (unaudited)

At the Manning & Napier Fund, Inc. (the “Fund”) Board of Directors’ (the “Board”) meeting, held on November 17, 2010, the Investment Advisory Agreement (the “Agreement”) between the Fund and Manning & Napier Advisors, Inc. (the “Advisor”) was reviewed by the Board for renewal. In connection with the decision whether to renew the Agreement, a variety of material was prepared for and reviewed by the Board.

Representatives of the Advisor attended the meeting and presented additional oral and written information to the Board to assist the Board in its considerations. The discussion immediately below outlines the materials and information presented to the Board in connection with the Board’s 2010 Annual Review of the Agreement and the conclusions made by the Directors when determining to continue the Agreement.

• The Board considered the services provided by the Advisor under the Agreement including, among others: deciding what securities to purchase and sell for each Series; arranging for the purchase and sale of such securities by placing orders with broker-dealers; administering the affairs of the Fund (including the books and records of the Fund not maintained by third party service providers such as the custodian or sub-transfer agent); arranging for the insurance coverage for the Fund; and supervising the preparation of tax returns, SEC filings (including registration statements) and reports to shareholders for the Fund. The Board also considered the nature and quality of such services provided under the Agreement in light of the Advisor’s services provided to the Fund for 24 years. The Board discussed the quality of these services with representatives from the Advisor and concluded that the Advisor was performing its services to the Fund required under the Agreement in a reasonable manner.

• The Board considered the investment performance of the various Series of the Fund. The investment performance for each Series was reviewed on a cumulative basis since inception and on a one year basis. In addition, annualized performance for the following time periods was considered: inception, three year, five year, ten year, and current market cycle. A market cycle includes periods of both rising and falling markets. Returns for established benchmark indices for each Series were provided for each time period. The Board noted that the various Series were competitive against their respective benchmarks and/or peer groups over various time periods, but in particular over the full market cycle period relevant for the Series. In addition, the Board considered at the meeting (and considers on a quarterly basis) a peer group performance analysis consisting of Morningstar universes of mutual funds with similar investment objectives. The Board discussed the performance with representatives from the Advisor and concluded that the investment performance of each of the Fund’s Series was reasonable based on the Fund’s actual performance and comparative performance, especially performance over the current market cycle.

• The Board considered the costs of the Advisor’s services and the profits of the Advisor as they relate to the Advisor’s services to the Fund under the Agreement. In reviewing the Advisor’s costs and profits, the Board discussed the Advisor’s revenues generated from the Fund (on both an actual and adjusted basis) and its expenses associated with providing the services under the Agreement. In addition, the Board reviewed the Advisor’s expenses associated with Fund activities outside of the Agreement (such as expense reimbursements pursuant to expense caps and payments made by the Advisor to third party platforms on which shares of the Fund are available for purchase). It was noted by representatives of the Advisor that 11 of the 27 active Series of the Fund are currently experiencing expenses above the capped expense ratios. After discussing the above costs and profits, the Board concluded that the Advisor’s profitability relating to its services provided under the Agreement was reasonable.

• The Board considered the fees and expenses of the various Series of the Fund. The Advisor presented the advisory fees and total expenses for each Series, including the advisory fee adjusted for any expense waivers or reimbursements (either contractual or voluntary) paid by the Advisor. The advisory fees and expense ratios of each Series were compared to an average (on both a mean and median basis) of similar funds as disclosed on the Morningstar database. Representatives of the Advisor discussed with the Board the levels of its advisory

20

Renewal of Investment Advisory Agreement (unaudited)

fee for each Series of the Fund and as compared to the median and mean advisory fees for similar funds as listed on Morningstar. Expense ratios for every Series, except the Pro-Blend’s Class R and Class C, and Target Class R and Class C, are currently below the median and mean for similar funds as listed on Morningstar. Based on their review of the information provided, the Board concluded that the fees and expenses of each Series of the Fund were reasonable on a comparative basis.

• The Board also considered the other benefits the Advisor derives from its relationship with the Fund. Such other benefits include certain research products provided by soft dollars. Given the level of soft dollar transactions involving the Fund, the Board concluded that these additional benefits to the Advisor were reasonable.

• In addition to the factors described above, the Board considered the Advisor’s personnel, investment strategies, policies and procedures relating to compliance with personal securities transactions, and reputation, expertise and resources in domestic and foreign financial markets. The Board concluded that these factors support the conclusion that the Advisor performs its services in a reasonable manner.

• The Board did not consider economies of scale at this time because of the multiple uses of the Fund (for the Advisor’s discretionary investment account clients in addition to direct investors), the current profitability of the Advisor’s services to the Fund under the Agreement, and the overall size of the Fund complex.

Based on the Board’s deliberations and their evaluation of the information described above, the Board, including a majority of Directors that are not “interested persons” as defined in the Investment Company Act of 1940, concluded that the compensation under the Agreement was fair and reasonable in light of the services and expenses and such other matters as the Directors considered to be relevant in the exercise of their reasonable judgment. Accordingly, the Board approved the renewal of the Agreement. In the course of their deliberations, the Directors did not identify any particular information that was all important or controlling.

21

Directors’ and Officers’ Information (unaudited)

The Statement of Additional Information provides additional information about the Fund’s directors and officers and can be obtained without charge by calling 1-800-466-3863, at www.manningnapieradvisors.com, or on the EDGAR Database on the SEC Internet web site (http:// www.sec.gov). The following chart shows certain information about the Fund’s officers and directors, including their principal occupations during the last five years. Unless specific dates are provided, the individuals have held the listed positions for longer than five years.

INTERESTED DIRECTOR/OFFICER

Name:	B. Reuben Auspitz*
Address:	290 Woodcliff Drive Fairport, NY 14450
Age:	63
Current Position(s) Held with Fund:	Principal Executive Officer, President, Chairman & Director
Term of Office1 & Length of Time Served:	Indefinite - Director since 1984; Vice President 1984 - 2003; President since 2004; Principal Executive Officer since 2002
Principal Occupation(s) During Past 5 Years:	Executive Vice President; Executive Group Member**; Chief Compliance Officer since 2004; Vice Chairman since June 2010; Co-Executive Director from 2003-2010 - Manning & Napier Advisors, Inc. President; Director - Manning & Napier Investor Services, Inc. Holds or has held one or more of the following titles for various subsidiaries and affiliates: President, Vice President, Director, Chairman, Treasurer, Chief Compliance Officer or Member.
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
INDEPENDENT DIRECTORS
Name:	Paul A. Brooke
Address:	290 Woodcliff Drive Fairport, NY 14450
Age:	65
Current Position(s) Held with Fund:	Director, Audit Committee Member, Governance & Nominating Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 2007
Principal Occupation(s) During Past 5 Years:	Chairman & CEO, Alsius Corp. (investments); Managing Member, PMSV Holdings LLC (investments)
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	Incyte Corp. (2000-present) ViroPharma, Inc. (2000-present) HLTH Corp. (2000-present) Cheyne Capital International (2000-present) MPM Bio-equities (2000-present) GMP Companies (2000-present) HoustonPharma (2000-present)
Name:	Richard M. Hurwitz
Address:	290 Woodcliff Drive Fairport, NY 14450
Age:	47
Current Position(s) Held with Fund:	Director, Audit Committee Member, Governance & Nominating Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 2009
Principal Occupation(s) During Past 5 Years:	Chief Executive Officer, Pictometry International Corp. since August 2010 (provider of georeferenced, aerial image libraries and related software) Managing Partner (2006-July 2010) - Aegis Investment Partners, LLC (investments); Founder and Managing Partner (2004-2005) - Village Markets, LLC (groceries)
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	Pictometry International Corp. (2000-2010) Pioneering Technologies (2006-2009) Vensearch Capital Corp. (2003-2007)

22

Directors’ and Officers’ Information (unaudited)

INDEPENDENT DIRECTORS (continued)
Name:	Stephen B. Ashley
Address:	290 Woodcliff Drive Fairport, NY 14450
Age:	70
Current Position(s) Held with Fund:	Director, Audit Committee Member, Governance & Nominating Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 1996
Principal Occupation(s) During Past 5 Years:	Chairman, Director, President & Chief Executive Officer, The Ashley Group (property management and investment). Chairman (non-executive) 2004-2008; Director 1995-2008 - Fannie Mae (mortgage)
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	The Ashley Group (1995-2008) Genesee Corporation (1987-2007)
Name:	Peter L. Faber
Address:	290 Woodcliff Drive Fairport, NY 14450
Age:	72
Current Position(s) Held with Fund:	Director, Governance & Nominating Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 1987
Principal Occupation(s) During Past 5 Years:	Senior Counsel since 2006, Partner (1995 - 2006) - McDermott, Will & Emery LLP (law firm)
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	Partnership for New York City, Inc. (non-profit) New York Collegium (non-profit) Boston Early Music Festival (non-profit)
Name:	Harris H. Rusitzky
Address:	290 Woodcliff Drive Fairport, NY 14450
Age:	76
Current Position(s) Held with Fund:	Director, Audit Committee Member, Governance & Nominating Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 1985
Principal Occupation(s) During Past 5 Years:	President, The Greening Group (business consultants) since 1994; Partner, The Restaurant Group (restaurants) since 2006
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
OFFICERS
Name:	Jeffrey S. Coons, Ph.D., CFA
Address:	290 Woodcliff Drive Fairport, NY 14450
Age:	47
Current Position(s) Held with Fund:	Vice President
Term of Office1 & Length of Time Served:	Since 2004
Principal Occupation(s) During Past 5 Years:	President since 2010, Co-Director of Research since 2002, Executive Group Member** since 2003, - Manning & Napier Advisors, Inc. Holds one or more of the following titles for various subsidiaries and affiliates: President, Director, Treasurer or Senior Trust Officer.
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A

23

Directors’ and Officers’ Information (unaudited)

OFFICERS (continued)

Name:	Beth Galusha
Address:	290 Woodcliff Drive Fairport, NY 14450
Age:	49
Current Position(s) Held with Fund:	Assistant Chief Financial Officer
Term of Office1 & Length of Time Served:	Assistant Chief Financial Officer since 2010
Principal Occupation(s) During Past 5 Years:	Chief Financial Officer and Treasurer, Manning & Napier Advisors, Inc. Holds one or more of the following titles for various affiliates: Chief Financial Officer, Director, or Treasurer
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
Name:	Christine Glavin
Address:	290 Woodcliff Drive Fairport, NY 14450
Age:	44
Current Position(s) Held with Fund:	Principal Financial Officer, Chief Financial Officer
Term of Office1 & Length of Time Served:	Principal Financial Officer since 2002; Chief Financial Officer since 2001
Principal Occupation(s) During Past 5 Years:	Fund Reporting Manager, Manning & Napier Advisors, Inc. since 1997
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
Name:	Jodi L. Hedberg
Address:	290 Woodcliff Drive Fairport, NY 14450
Age:	43
Current Position(s) Held with Fund:	Corporate Secretary, Chief Compliance Officer, Anti-Money Laundering Compliance Officer
Term of Office1 & Length of Time Served:	Corporate Secretary since 1997; Chief Compliance Officer since 2004
Principal Occupation(s) During Past 5 Years:	Director of Compliance, Manning & Napier Advisors, Inc. and affiliates since 1990 (title change in 2005 from Compliance Manager to Director of Compliance); Corporate Secretary, Manning & Napier Investor Services, Inc. since 2006
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
Name:	Richard Yates
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	45
Current Position(s) Held with Fund:	Chief Legal Officer
Term of Office1 & Length of Time Served:	Chief Legal Officer since 2004
Principal Occupation(s) During Past 5 Years:	Counsel - Manning & Napier Advisors, Inc. & affiliates since 2000; Holds one or more of the following titles for various affiliates; Director or Corporate Secretary
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A

*Interested Director, within the meaning of the Investment Company Act of 1940 by reason of his position with the Fund’s investment advisor and distributor. Mr. Auspitz serves as the Executive Vice President and Director, Manning & Napier Advisors, Inc. and President and Director, Manning & Napier Investor Services, Inc., the Fund’s distributor.

**Prior to June 2010, the Executive Group, consisting of senior executive employee-owners, performed the duties of the Office of the Chief Executive of the Advisor. Effective June 2010, the Executive Group serves as an advisory board to the Chief Executive Officer.

¹The term of office for President, Vice President, Chief Financial Officer, Assistant Chief Financial Officer, Chief Legal Officer and Corporate Secretary is one year and until their respective successors are chosen and qualified. All other officers’ terms are indefinite.

24

This Page Intentionally Left Blank

25

Literature Requests (unaudited)

Proxy Voting Policies and Procedures

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available, without charge, upon request:

By phone	1-800-466-3863
On the Securities and Exchange Commission’s (SEC) web site	http://www.sec.gov

Proxy Voting Record

Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30th is available, without charge, upon request:

By phone	1-800-466-3863
On the SEC’s web site	http://www.sec.gov

Quarterly Portfolio Holdings

The Series’ complete schedule of portfolio holdings for the 1st and 3rd quarters of each fiscal year are provided on Form N-Q, and are available, without charge, upon request:

By phone	1-800-466-3863
On the SEC’s web site	http://www.sec.gov

The Series’ Form N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

Prospectus and Statement of Additional Information (SAI)

The prospectus and SAI provide additional information about each Series, including charges, expenses and risks. These documents are available, without charge, upon request:

By phone	1-800-466-3863
On the SEC’s web site	http://www.sec.gov
On the Advisor’s web site	http://www.manning-napier.com

Additional information available at www.manning-napier.com

1. Fund Holdings - Month-End

2. Fund Holdings - Quarter-End

3. Shareholder Report - Annual

4. Shareholder Report - Semi-Annual

MNTEC-12/10-AR                             

Management Discussion and Analysis (unaudited)

Dear Shareholders:

Over the course of 2010, the markets experienced several ups and downs driven by well-defined swings in investor sentiment. Optimism fueled strong market returns early in the year, as upbeat economic releases led investors to believe in the potential for a robust U.S. recovery. However, sentiment shifted drastically in May and June as more negative economic news and issues related to Europe’s government debt problems led to notable stock market losses. In another swing, the markets rebounded in the fall amid better economic developments and prospects that the Federal Reserve would enact another round of quantitative easing. That rally generally continued through the end of the year as the markets reacted positively to the U.S. tax compromise, which extended the Bush-era tax cuts for all income brackets.

With equities posting double-digit gains in the third and fourth quarters, the choppy year ended on a strong note, and broad equity indices have now produced back-to-back years of positive results. For the twelve months ending December 31, 2010, the S&P 500 Index returned 15.07%, while the S&P 500 Financial Services Index earned 12.17%. With a return of 6.56% during 2010, the Financial Services Series lagged behind the broad market and the sector-specific benchmark.

In the volatile market environment of 2010, Manning & Napier maintained a selective investment approach and focused on companies that we believe can grow market share. We continued to emphasize quality, targeting best-in-class companies expected to generate sales growth despite a muted economic backdrop, as well as “away game winners” expected to successfully compete in faster-growing markets overseas. Specifically, the Financial Services Series has invested in institutions that are well capitalized and have firm profitability, which we believe should allow them to take market share as weaker competitors struggle in the difficult credit environment.

Over the past year, the Series increased exposure to diversified financial services and commercial banks. Focusing on institutions with strong capital and deposit bases, the Advisor looked to invest in those companies that could benefit from the challenging banking environment through loan growth and market share gains. We favored financial institutions that operate in faster-growing Emerging Markets, and thus the Series added exposure to international companies during 2010. During the latter half of the year, the Series trimmed positions in the insurance industry.

Stock selection decisions in the insurance and capital markets industries aided the Financial Services Series’ relative results over the last twelve months. However, security selections in the IT services and commercial banking industries hurt relative returns. An underweight to Real Estate Investment Trusts (REITS) versus the benchmark also detracted from relative performance.

While economic developments turned more optimistic toward the end of 2010, the global economy still faces significant headwinds, including high consumer and government debt burdens. Given these long-term structural issues, the slow growth environment in the developed world will likely remain a reality. As the markets fluctuated around this slow growth trend in 2010, Manning & Napier earned solid returns by staying focused on the fundamentals and maintaining our selective investment process. This investment approach has proved beneficial over the past 40 years, and we believe these qualities will remain important as the market environment unfolds in 2011.

As always, we appreciate your business.

Sincerely,

Manning & Napier Advisors, Inc.

1

Performance Update as of December 31, 2010 (unaudited)

			Average Annual Total Returns As of December 31, 2010
	One Year		Five Year	Since     Inception1
Manning & Napier Fund, Inc. - Financial Services Series2		6.56%	-7.89%	-5.98%
S&P 500 Total Return Index3		15.07%	2.30%	3.14%
S&P 500 Financials Index3		12.17%	-10.56%	-8.22%

The following graph compares the value of a $10,000 investment in the Manning & Napier Fund, Inc. - Financial Services Series from its inception¹ (7/1/05) to present (12/31/10) to the S&P 500 Total Return Index and the S&P 500 Financials Index.

¹Performance numbers for the Series and Indices are calculated from July 1, 2005, the Series’ inception date.

²The Series’ performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of shares. The Series’ performance is historical and may not be indicative of future results. The performance returns shown are inclusive of the net expense ratio of the Series. For the year ended December 31, 2010, this net expense ratio was 1.14%. The gross expense ratio, which does not account for any voluntary or contractual waivers currently in effect, was 1.14% for the year ended December 31, 2010.

³The S&P 500 Total Return Index is an unmanaged capitalization-weighted measure of 500 widely held common stocks listed on the New York Stock Exchange, American Stock Exchange and the Over-the-Counter market. The S&P 500 Financials Index, a sub-index of the S&P 500 Total Return Index, includes the stocks of companies involved in the business of financial related products and services. Both Indices’ returns assume daily reinvestment of dividends and, unlike Series returns, do not reflect any fees or expenses.

2

Shareholder Expense Example (unaudited)

As a shareholder of the Series, you may incur two types of costs: (1) transaction costs and (2) ongoing costs, including management fees and other Series expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Series and to compare these costs with the ongoing costs of investing in other mutual funds.

The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (July 1, 2010 to December 31, 2010).

Actual Expenses

The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Series’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Series’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid during the period. You may use this information to compare the ongoing costs of investing in the Series and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.

	Beginning Account Value 7/1/10	Ending Account Value 12/31/10	Expenses Paid During Period* 7/1/10-12/31/10
Actual	$1,000.00	$1,164.20	$6.27
Hypothetical
(5% return before expenses)	$1,000.00	$1,019.41	$5.85

*Expenses are equal to the Series’ annualized expense ratio (for the six-month period) of 1.15%, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). Expenses are based on the most recent fiscal half year; therefore, the expense ratio stated above may differ from the expense ratio stated in the financial highlights, which is based on one-year data. The Series’ total return would have been lower had certain expenses not been waived during the period.

3

Portfolio Composition as of December 31, 2010 (unaudited)

TopTen Stock Holdings2
Moody’s Corp.	5.0	%	U.S. Bancorp	3.2	%
JPMorgan Chase & Co.	4.7	%	Brown & Brown, Inc.	3.2	%
The Bank of New York Mellon Corp.	4.6	%	The Charles Schwab Corp.	3.1	%
The Western Union Co.	3.9	%	State Street Corp.	3.1	%
GAM Holding AG (Switzerland)	3.9	%	Willis Group Holdings plc (United Kingdom)	3.1	%
2As a percentage of total investments.

4

Investment Portfolio - December 31, 2010

	Shares		Value (Note 2)
COMMON STOCKS - 94.5%
Financials - 79.0%
Capital Markets - 24.0%
The Bank of New York Mellon Corp.1		219,000	$	6,613,800
The Charles Schwab Corp.		264,000		4,517,040
Credit Suisse Group AG - ADR (Switzerland)		28,600		1,155,726
Evercore Partners, Inc. - Class A		46,700		1,587,800
Financial Engines, Inc.*		83,000		1,645,890
GAM Holding AG (Switzerland)*2		342,110		5,654,985
The Goldman Sachs Group, Inc.		18,300		3,077,328
Greenhill & Co., Inc.		16,800		1,372,224
Lazard Ltd. - Class A (Bermuda)		37,500		1,480,875
Northern Trust Corp.		54,000		2,992,140
State Street Corp.		97,000		4,494,980
				34,592,788
Commercial Banks - 15.6%
Banco Santander S.A. - ADR (Spain)		385,000		4,100,250
Barclays plc - ADR (United Kingdom)		66,000		1,090,320
First Commonwealth Financial Corp.		423,000		2,994,840
First Financial Bancorp		80,000		1,478,400
HSBC Holdings plc - ADR (United Kingdom)		83,540		4,263,882
Societe Generale - ADR (France)3		117,550		1,277,769
Standard Chartered plc (United Kingdom)2		98,700		2,664,463
U.S. Bancorp		169,670		4,576,000
				22,445,924
Consumer Finance - 3.7%
American Express Co.		90,000		3,862,800
Discover Financial Services		83,000		1,537,990
				5,400,790
Diversified Financial Services - 12.6%
Bank of America Corp.		119,000		1,587,460
Deutsche Boerse AG (Germany)2		37,000		2,556,370
JPMorgan Chase & Co.		161,000		6,829,620
Moody’s Corp.		271,000		7,192,340
				18,165,790
Insurance - 15.0%
Allianz SE (Germany)2		37,000		4,396,181
The Allstate Corp.		124,000		3,953,120
Brown & Brown, Inc.		190,000		4,548,600
Willis Group Holdings plc (United Kingdom)		128,000		4,432,640
Zurich Financial Services AG (Switzerland)2		16,500		4,272,951
				21,603,492

The accompanying notes are an integral part of the financial statements. 5

Investment Portfolio - December 31, 2010

	Shares		Value (Note 2)
COMMON STOCKS (continued)
Financials (continued)
Real Estate Investment Trusts (REITS) - 1.8%
Corporate Office Properties Trust		76,000	$	2,656,200
Thrifts & Mortgage Finance -6.3%
First Niagara Financial Group, Inc.		296,000		4,138,080
Hudson City Bancorp, Inc.		98,000		1,248,520
People’s United Financial, Inc.		261,540		3,664,175
				9,050,775
Total Financials				113,915,759
Information Technology - 15.5%
IT Services - 15.5%
Automatic Data Processing, Inc.		85,550		3,959,254
Cielo S.A. (Brazil)		330,000		2,673,795
MasterCard, Inc. - Class A		17,900		4,011,569
Redecard S.A. (Brazil)		173,000		2,193,765
Visa, Inc. - Class A		54,000		3,800,520
The Western Union Co.		305,000		5,663,850
Total Information Technology				22,302,753
TOTAL COMMON STOCKS     (Identified Cost $130,347,359)				136,218,512
SHORT-TERM INVESTMENTS - 5.5%
Dreyfus Cash Management, Inc. - Institutional Shares4, 0.14% (Identified Cost $7,948,572)		7,948,572		7,948,572
TOTAL INVESTMENTS - 100.0% (Identified Cost $138,295,931)				144,167,084
OTHER ASSETS, LESS LIABILITIES - 0.0%**				12,368
NET ASSETS - 100%			$	144,179,452

ADR - American Depository Receipt

*Non-income producing security

**Less than 0.1%

¹The Bank of New York Mellon Corp. is the Series’ custodian and serves as sub-accountant and sub-transfer agent to the Series.

²International Fair Value factor from pricing service was applied.

³Latest quoted sales price is not available and the latest quoted bid price was used to value the security.

⁴Rate shown is the current yield as of December 31, 2010.

6 The accompanying notes are an integral part of the financial statements.

Statement of Assets and Liabilities

December 31, 2010

ASSETS:
Investments, at value (identified cost $138,295,931) (Note 2)	$	144,167,084
Dividends receivable		192,168
Receivable for fund shares sold		130,496
Foreign tax reclaims receivable		77,884
TOTAL ASSETS		144,567,632
LIABILITIES:
Accrued management fees (Note 3)		120,821
Accrued fund accounting and administration fees (Note 3)		5,814
Accrued transfer agent fees (Note 3)		2,204
Accrued Chief Compliance Officer service fees (Note 3)		244
Payable for fund shares repurchased		196,774
Audit fees payable		31,404
Other payables and accrued expenses		30,919
TOTAL LIABILITIES		388,180
TOTAL NET ASSETS	$	144,179,452
NET ASSETS CONSIST OF:
Capital stock	$	246,943
Additional paid-in-capital		245,783,982
Undistributed net investment income		47,982
Accumulated net realized loss on investments, foreign currency and translation of other assets and liabilities		(107,777,337	)
Net unrealized appreciation on investments, foreign currency and translation of other assets and liabilities		5,877,882
TOTAL NET ASSETS	$	144,179,452
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER SHARE - Class A ($144,179,452/24,694,313 shares)	$	5.84

The accompanying notes are an integral part of the financial statements. 7

Statement of Operations

For the Year Ended December 31, 2010

INVESTMENT INCOME:
Dividends (net of foreign taxes withheld, $109,907)	$	3,283,753
EXPENSES:
Management fees (Note 3)		1,335,265
Fund accounting and administration fees (Note 3)		44,538
Transfer agent fees (Note 3)		13,420
Directors’ fees (Note 3)		8,677
Chief Compliance Officer service fees (Note 3)		2,621
Custodian fees		22,739
Miscellaneous		102,337
Total Expenses		1,529,597
Less reduction of expenses (Note 3)		(758	)
Net Expenses		1,528,839
NET INVESTMENT INCOME		1,754,914
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY:
Net realized gain (loss) on- Investments		2,654,084
Foreign currency and translation of other assets and liabilities		(7,057	)
		2,647,027
Net change in unrealized appreciation (depreciation) on- Investments		4,470,053
Foreign currency and translation of other assets and liabilities		6,084
		4,476,137
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND FOREIGN CURRENCY		7,123,164
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	8,878,078

8 The accompanying notes are an integral part of the financial statements.

Statements of Changes in Net Assets

	For the Year Ended 12/31/10			For the Year Ended 12/31/09
INCREASE IN NET ASSETS:
OPERATIONS:
Net investment income	$	1,754,914		$	2,884,947
Net realized gain (loss) on investments and foreign currency		2,647,027			(42,361,984	)
Net change in unrealized appreciation on investments and foreign currency		4,476,137			57,427,697
Net increase from operations		8,878,078			17,950,660
DISTRIBUTIONS TO SHAREHOLDERS (Note 9):
From net investment income		(1,786,293	)		(2,990,961	)
CAPITAL STOCK ISSUED AND REPURCHASED:
Net increase (decrease) from capital share transactions (Note 5)		6,672,693			(13,914,002	)
Net increase in net assets		13,764,478			1,045,697
NET ASSETS:
Beginning of year		130,414,974			129,369,277
End of year (including undistributed net investment income of $47,982 and $43,192, respectively)	$	144,179,452		$	130,414,974

The accompanying notes are an integral part of the financial statements. 9

Financial Highlights

				For the Years Ended
	12/31/10			12/31/09			12/31/08		12/31/07		12/31/06
Per share data (for a share outstanding throughout each year):
Net asset value - Beginning of year		$5.55			$5.14			$9.34		$12.51	$10.70
Income (loss) from investment operations:
Net investment income		0.071			0.101			0.17		0.19	0.10
Net realized and unrealized gain (loss) on investments		0.29			0.44			(4.19)		(2.36)	2.00
Total from investment operations		0.36			0.54			(4.02)		(2.17)	2.10
Less distributions to shareholders:
From net investment income		(0.07)			(0.13)			(0.18)		(0.18)	(0.11)
From net realized gain on investments		—			—			—		(0.82)	(0.18)
Total distributions to shareholders		(0.07)			(0.13)			(0.18)		(1.00)	(0.29)
Net asset value - End of year		$5.84			$5.55			$5.14		$9.34	$12.51
Net assets - End of year (000’s omitted)		$144,179			$130,415			$129,369		$220,097	$132,855
Total return2		6.56%			10.54%			(42.98%)		(17.46%)	19.62%
Ratios (to average net assets)/
Supplemental Data:
Expenses*		1.14%			1.14%			1.12%		1.15%	1.18%
Net investment income		1.31%			2.01%			2.34%		1.72%	1.14%
Portfolio turnover		49%			98%			41%		38%	30%
*The investment advisor did not impose all or a portion of its management fees, CCO fees and fund accounting and transfer agent fees, and other fees in some years and in some years paid a portion of the Series’ expenses. If these expenses had been incurred by the Series, the expense ratio (to average net assets) would have been increased by the following amounts:
		0.00%	3		0.00%	3		N/A		N/A	N/A

¹Calculated based on average shares outstanding during the year.

²Represents aggregate total return for the years indicated, and assumes reinvestment of all distributions. Total returns would have been lower had

certain expenses not been waived or reimbursed during certain years.

³Less than 0.01%.

10 The accompanying notes are an integral part of the financial statements.

Notes to Financial Statements

1. ORGANIZATION

Financial Services Series (the “Series”) is a no-load diversified series of Manning & Napier Fund, Inc. (the “Fund”). The Fund is organized in Maryland and is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company.

The Series’ investment objective is to provide long-term growth by investing principally in the common stocks of companies in the financial services industry.

The Fund’s Advisor is Manning & Napier Advisors, Inc. (the “Advisor”). Shares of the Series are offered to investors, clients and employees of the Advisor and its affiliates. The total authorized capital stock of the Fund consists of 10.0 billion shares of common stock each having a par value of $0.01. As of December 31, 2010, 6.2 billion shares have been designated in total among 29 series, of which 100 million have been designated as Financial Services Series Class A common stock.

2. SIGNIFICANT ACCOUNTING POLICIES

Security Valuation

Portfolio securities, including domestic equities, foreign equities, warrants and options, listed on an exchange other than the NASDAQ National Market System are valued at the latest quoted sales price of the exchange on which the security is primarily traded. Securities not traded on valuation date or securities not listed on an exchange are valued at the latest quoted bid price provided by the Fund’s pricing service. Securities listed on the NASDAQ National Market System are valued in accordance with the NASDAQ Official Closing Price.

Short-term investments that mature in sixty days or less are valued at amortized cost, which approximates market value. Investments in open-end investment companies are valued at their net asset value per share on valuation date.

Volume and level of activity in established markets for an asset or liability are evaluated to determine whether recent transactions and quoted prices are determinative of fair value. Where there have been significant decreases in volume and level of activity, further analysis and adjustment may be necessary to estimate fair value. The Series measures fair value in these instances by the use of inputs and valuation techniques which may be based upon current market prices of securities that are comparable in coupon, rating, maturity and industry and/or expectation of future cash flows. As a result of trading in relatively thin markets and/or markets that experience significant volatility, the prices used by the Series to value these securities may differ from the value that would be realized if these securities were sold, and the differences could be material.

Securities for which representative valuations or prices are not available from the Fund’s pricing service may be valued at fair value. Due to the inherent uncertainty of valuations of such securities, the fair value may differ significantly from the values that would have been used had a ready market for such securities existed. If trading or events occurring after the close of the principal market in which securities are traded are expected to materially affect the value of those securities, then they may be valued at their fair value, taking this trading or these events into account. Fair value is determined in good faith by the Advisor under procedures approved by and under the general supervision and responsibility of the Fund’s Board of Directors (the “Board”). In accordance with the procedures approved by the Board, the Series applies fair value pricing on a daily basis except for North American, Central American, South American and Caribbean equity securities. Fair valuing of securities is determined with the assistance of a pricing service using calculations or factors based on indices of domestic securities and other appropriate indicators, such as prices of relevant American Depository Receipts and futures contracts, to adjust local market prices for subsequent movements through the time the Series calculates its net asset value. The value of securities used for the net asset value calculation under the procedures may differ from published prices for the same securities. It is the Fund’s

11

Notes to Financial Statements

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

Security Valuation (continued)

policy to classify each foreign equity security, except for those in the regions noted above, as Level 2 securities due to the fact the pricing service evaluated what factor was applied to the calculated end of day market price.

Various inputs are used in determining the value of the Series’ assets or liabilities carried at market value. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical assets and liabilities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.). Level 3 includes significant unobservable inputs (including the Series’ own assumptions in determining the fair value of investments). The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

The following is a summary of the valuation levels used for major security types as of December 31, 2010 in valuing the Series’ assets or liabilities carried at market value:

		000000000000000		000000000000000		000000000000000		000000000000000
Description	Total		Level 1		Level 2		Level  3
Assets:
Equity securities*	$	136,218,512	$	115,395,793	$	20,822,719	$	—
Preferred securities		—		—		—		—
Debt securities		—		—		—		—
Mutual funds		7,948,572		7,948,572		—		—
Other financial instruments**:		—		—		—		—
Total assets:		144,167,084		123,344,365		20,822,719		—
Liabilities:
Other financial instruments**:		—		—		—		—
Total liabilities:		—		—		—		—
Total	$	144,167,084	$	123,344,365	$	20,822,719	$	—

*Includes common stock, warrants and rights. Please see the Investment Portfolio for industry classification and for securities where a latest quoted sales price is not available and the latest quoted bid price was used to value the security or foreign securities where an International Fair Value factor from the pricing service was applied to value the security. Such securities are included in Level 2 in the table above.

** Other financial instruments are derivative instruments not reflected in the Investment Portfolio, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument. As of December 31, 2010, the Series did not hold any derivative instruments.

There were no Level 3 securities held by the Series as of December 31, 2009 or December 31, 2010.

The Fund’s policy is to recognize transfers in and transfers out of the valuation levels as of the beginning of the reporting period. During the year ended December 31, 2010, the Fund had three foreign equity securities transfer from Level 1 to Level 2 due to the implementation of new international fair value pricing procedures. The following is a summary of the foreign equity securities that transferred from Level 1 to Level 2:

12

Notes to Financial Statements

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

Security Valuation (continued)

000000000000000000	000000000000000000	000000000000000000	000000000000000000
Total # Securities Level 1 at beginning and Level 2 at end of period	Total Market Value Beginning of period	Total Market Value End of period	Change in Market Value
3	$    8,954,028	$    14,324,117	$     5,370,089

Additional disclosure surrounding the activity in Level 3 fair value measurement will be effective for fiscal years beginning after December 15, 2010. Management has concluded that this will not have a material impact on the Series’ financial statements.

Security Transactions, Investment Income and Expenses

Security transactions are accounted for on trade date. Dividend income is recorded on the ex-dividend date, except that if the ex-dividend date has passed, certain dividends from foreign securities are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends, if any, are recorded at the fair market value of the securities received. Interest income, including amortization of premium and accretion of discounts using the effective interest method, is earned from settlement date and accrued daily.

Expenses are recorded on an accrual basis. Most expenses of the Fund can be attributed to a specific series. Expenses which cannot be directly attributed are apportioned among the series in the Fund in such a manner as deemed equitable by the Fund’s Board, taking into consideration, among other things, the nature and type of expense.

The Series uses the identified cost method for determining realized gain or loss on investments for both financial statement and federal income tax reporting purposes.

Foreign Currency Translation

The books and records of the Series are maintained in U.S. dollars. Foreign currencies, investments and other assets and liabilities are translated into U.S. dollars at the current exchange rates. Purchases and sales of investment securities and income and expenses are translated on the respective dates of such transactions. The Series does not isolate realized and unrealized gains and losses attributable to changes in the exchange rates from gains and losses that arise from changes in the market value of investments. Such fluctuations are included with net realized and unrealized gain or loss on investments. Net realized foreign currency gains and losses represent foreign currency gains and losses between trade date and settlement date on securities transactions, gains and losses on disposition of foreign currencies and the difference between the amount of income and foreign withholding taxes recorded on the books of the Series and the amounts actually received or paid.

Federal Taxes

The Series’ policy is to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies. The Series is not subject to federal income tax or excise tax to the extent that the Series distributes to shareholders each year its taxable income, including any net realized gains on investments, in accordance with requirements of the Internal Revenue Code. Accordingly, no provision for federal income tax or excise tax has been made in the financial statements.

Management evaluates its tax positions to determine if the tax positions taken meet the minimum recognition threshold in connection with accounting for uncertainties in income tax positions taken or expected to be taken for the purposes of measuring and recognizing tax liabilities in the financial statements. Recognition of tax benefits of an uncertain tax position is required only when the position is “more likely than not” to be sustained assuming examination by

13

Notes to Financial Statements

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

Federal Taxes (continued)

taxing authorities. At December 31, 2010, the Series has recorded no liability for net unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken in future tax returns.

The Series files income tax returns in the U.S. federal jurisdiction, various states and foreign jurisdictions, as required. No income tax returns are currently under investigation. The statute of limitations on the Series’ tax returns remains open for the years ended December 31, 2007 through December 31, 2010. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.

Additionally, based on the Fund’s understanding of the tax rules and rates related to income, gains and transactions for foreign jurisdictions in which it invests, the Series will provide for foreign taxes, and where appropriate, deferred foreign tax.

Distributions of Income and Gains

Distributions to shareholders of net investment income and net realized gains are made annually. An additional distribution may be necessary to avoid taxation of the Series. Distributions are recorded on the ex-dividend date.

Indemnifications

The Fund’s organizational documents provide former and current directors and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund’s maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.

Other

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.

3. TRANSACTIONS WITH AFFILIATES

The Fund has an Investment Advisory Agreement (the “Agreement”) with the Advisor, for which the Series pays a fee, computed daily and payable monthly, at an annual rate of 1.00% of the Series’ average daily net assets.

Under the Agreement, personnel of the Advisor provide the Series with advice and assistance in the choice of investments and the execution of securities transactions, and otherwise maintain the Series’ organization. The Advisor also provides the Fund with necessary office space and fund administration and support services. The salaries of all officers of the Fund (except a percentage of the Fund’s Chief Compliance Officer’s salary, which is paid by the Fund), and of all Directors who are “affiliated persons” of the Fund, or of the Advisor, and all personnel of the Fund, or of the Advisor, performing services relating to research, statistical and investment activities, are paid by the Advisor. Each “non-affiliated” Director receives an annual stipend, which is allocated among all the active series of the Fund. In addition, these Directors also receive a fee per Board meeting attended plus a fee for each committee meeting attended.

The Advisor has contractually agreed, until at least April 30, 2012, to waive its fee and, if necessary, pay other operating expenses of the Series in order to maintain total direct annual fund operating expenses for the Series at no more than 1.20% of average daily net assets each year. For the year ended December 31, 2010, the Advisor voluntarily

14

Notes to Financial Statements

3. TRANSACTIONS WITH AFFILIATES (continued)

waived fees of $758, which is included as a reduction of expenses on the Statement of Operations. The Advisor is not eligible to recoup any expenses that have been waived or reimbursed in prior years.

Manning & Napier Investor Services, Inc., a registered broker-dealer affiliate of the Advisor, acts as distributor for the Fund’s shares. The services of Manning & Napier Investor Services, Inc. are provided at no additional cost to the Series.

The Advisor has agreements with PNC Global Investment Servicing (U.S.) Inc. (“PNCGIS”) under which PNCGIS serves as sub-accountant services agent and sub-transfer agent. The Fund pays the Advisor an annual fee related to fund accounting and administration of 0.0175% on the first $3 billion of average daily net assets (excluding Target Series); 0.015% on the next $3 billion of average daily net assets (excluding Target Series); and 0.01% of the average daily net assets in excess of $6 billion (excluding Target Series); plus a base fee of $25,500 per Series. Transfer Agent fees are charged to the Fund on a per account basis. Additionally, certain transaction- and cusip-based fees and out-of-pocket expenses, including charges for reporting relating to the Fund’s compliance program, are charged.

Effective July 1, 2010, PNCGIS was sold to The Bank of New York Mellon Corporation, the Series’ custodian. At the close of the sale, PNCGIS changed its name to BNY Mellon Investment Servicing (U.S.) Inc. (“BNY”).

Expenses not directly attributable to a Series are allocated based on each Series’ relative net assets or number of accounts, depending on the expense.

4. PURCHASES AND SALES OF SECURITIES

For the year ended December 31, 2010, purchases and sales of securities, other than U.S. Government securities and short-term securities, were $63,810,863 and $62,850,672, respectively. There were no purchases or sales of U.S. Government securities.

5. CAPITAL STOCK TRANSACTIONS

Transactions in shares of Financial Services Series were:

	For the Year						For the Year
	Ended 12/31/10						Ended 12/31/09
	Shares			Amount			Shares			Amount
Sold		3,059,077		$	17,083,766			11,190,234		$	55,137,124
Reinvested		298,746			1,727,732			534,460			2,895,097
Repurchased		(2,175,056	)		(12,138,805	)		(13,401,764	)		(71,946,223	)
Total		1,182,767		$	6,672,693			(1,677,070	)	$	(13,914,002	)

Substantially all of the Series’ shares represent investments by fiduciary accounts over which the Advisor has sole investment discretion.

6. FINANCIAL INSTRUMENTS

The Series may trade in instruments including written and purchased options, forward foreign currency exchange contracts and futures contracts and other derivatives in the normal course of investing activities to assist in managing exposure to various market risks. Investments in these instruments may subject the Series to various elements of risk, which may involve, to a varying degree, elements of risk in excess of the amounts recognized for financial statement purposes. These risks include: the risk that changes in the value of a derivative may not correlate perfectly

15

Notes to Financial Statements

6. FINANCIAL INSTRUMENTS (continued)

with the underlying asset, rate or index, counterparty credit risk related to over the counter derivatives counterparties’ failure to perform under contract terms, liquidity risk related to the lack of a liquid market for these contracts allowing the fund to close out its position(s) and documentation risk relating to disagreement over contract terms. No such investments were held by the Series during the year ended December 31, 2010.

7. FOREIGN SECURITIES

Investing in securities of foreign companies and foreign governments involves special risks and considerations not typically associated with investing in securities of domestic companies and the U.S. Government. These risks include revaluation of currencies and future adverse political and economic developments. Moreover, securities of foreign companies and foreign governments and their markets may be less liquid and their prices more volatile than those of comparable domestic companies and the U.S. Government.

8. FINANCIAL SERVICES SECURITIES

The Series may focus its investments in certain related financial services industries; hence, the Series may subject itself to a greater degree of risk than a series that is more diversified.

9. FEDERAL INCOME TAX INFORMATION

The amount and characterization of certain income and capital gains to be distributed are determined in accordance with federal income tax regulations, which may differ from accounting principles generally accepted in the United States of America. These differences are primarily due to differing book and tax treatments in the timing of the recognition of net investment income or gains and losses, including investments in real estate investment trusts (REITs), foreign currency gains and losses and post-October losses. The Series may periodically make reclassifications among its capital accounts to reflect income and gains available for distribution (or available capital loss carryovers) under income tax regulations without impacting the Series’ net asset value. Any such reclassifications are not reflected in the financial highlights.

The tax character of distributions paid were as follows:

	For  the Year	For  the Year
	Ended  12/31/10	Ended  12/31/09
Ordinary income	$1,786,293	$2,990,961

At December 31, 2010, the tax basis of distributable earnings and the net unrealized appreciation based on identified cost of investments for federal income tax purposes were as follows:

Cost for federal income tax purposes	$	138,419,949
Unrealized appreciation	$	9,659,996
Unrealized depreciation		(3,912,861	)
Net unrealized appreciation	$	5,747,135
Capital loss carryover		107,605,337

16

Notes to Financial Statements

9. FEDERAL INCOME TAX INFORMATION (continued)

At December 31, 2010, the capital loss carryover, disclosed above, available to the extent allowed by tax law to offset future net capital gain, if any, will expire as follows:

Loss  Carryover	Expiration  Date
$50,750,210	December 31, 2016
$51,187,679	December 31, 2017
$  5,667,448	December 31, 2018

17

Report of Independent Registered Public Accounting Firm

To the Board of Directors of Manning & Napier Fund, Inc. and Shareholders of Financial Services Series:

In our opinion, the accompanying statement of assets and liabilities, including the investment portfolio, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the Financial Services Series (a series of Manning & Napier Fund, Inc., hereafter referred to as the “Series”) at December 31, 2010, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Series’ management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2010 by correspondence with the custodian, provide a reasonable basis for our opinion.

New York, New York

February 22, 2011

18

Supplemental Tax Information (unaudited)

All designations are based on financial information available as of the date of this annual report and, accordingly are subject to change.

For federal income tax purposes, the Series designates for the current fiscal year $1,786,293 or, if different, the maximum amount allowable under the tax law as qualified dividend income.

For corporate shareholders, the percentage of investment income (dividend income plus short-term gains, if any) that qualifies for the dividends received deduction for the current fiscal year is 99.37%, or if different, the maximum allowable under tax law.

19

Renewal of Investment Advisory Agreement (unaudited)

At the Manning & Napier Fund, Inc. (the “Fund”) Board of Directors’ (the “Board”) meeting, held on November 17, 2010, the Investment Advisory Agreement (the “Agreement”) between the Fund and Manning & Napier Advisors, Inc. (the “Advisor”) was reviewed by the Board for renewal. In connection with the decision whether to renew the Agreement, a variety of material was prepared for and reviewed by the Board.

Representatives of the Advisor attended the meeting and presented additional oral and written information to the Board to assist the Board in its considerations. The discussion immediately below outlines the materials and information presented to the Board in connection with the Board’s 2010 Annual Review of the Agreement and the conclusions made by the Directors when determining to continue the Agreement.

• The Board considered the services provided by the Advisor under the Agreement including, among others: deciding what securities to purchase and sell for each Series; arranging for the purchase and sale of such securities by placing orders with broker-dealers; administering the affairs of the Fund (including the books and records of the Fund not maintained by third party service providers such as the custodian or sub-transfer agent); arranging for the insurance coverage for the Fund; and supervising the preparation of tax returns, SEC filings (including registration statements) and reports to shareholders for the Fund. The Board also considered the nature and quality of such services provided under the Agreement in light of the Advisor’s services provided to the Fund for 24 years. The Board discussed the quality of these services with representatives from the Advisor and concluded that the Advisor was performing its services to the Fund required under the Agreement in a reasonable manner.

• The Board considered the investment performance of the various Series of the Fund. The investment performance for each Series was reviewed on a cumulative basis since inception and on a one year basis. In addition, annualized performance for the following time periods was considered: inception, three year, five year, ten year, and current market cycle. A market cycle includes periods of both rising and falling markets. Returns for established benchmark indices for each Series were provided for each time period. The Board noted that the various Series were competitive against their respective benchmarks and/or peer groups over various time periods, but in particular over the full market cycle period relevant for the Series. In addition, the Board considered at the meeting (and considers on a quarterly basis) a peer group performance analysis consisting of Morningstar universes of mutual funds with similar investment objectives. The Board discussed the performance with representatives from the Advisor and concluded that the investment performance of each of the Fund’s Series was reasonable based on the Fund’s actual performance and comparative performance, especially performance over the current market cycle.

• The Board considered the costs of the Advisor’s services and the profits of the Advisor as they relate to the Advisor’s services to the Fund under the Agreement. In reviewing the Advisor’s costs and profits, the Board discussed the Advisor’s revenues generated from the Fund (on both an actual and adjusted basis) and its expenses associated with providing the services under the Agreement. In addition, the Board reviewed the Advisor’s expenses associated with Fund activities outside of the Agreement (such as expense reimbursements pursuant to expense caps and payments made by the Advisor to third party platforms on which shares of the Fund are available for purchase). It was noted by representatives of the Advisor that 11 of the 27 active Series of the Fund are currently experiencing expenses above the capped expense ratios. After discussing the above costs and profits, the Board concluded that the Advisor’s profitability relating to its services provided under the Agreement was reasonable.

• The Board considered the fees and expenses of the various Series of the Fund. The Advisor presented the advisory fees and total expenses for each Series, including the advisory fee adjusted for any expense waivers or reimbursements (either contractual or voluntary) paid by the Advisor. The advisory fees and expense ratios of each Series were compared to an average (on both a mean and median basis) of similar funds as disclosed on the Morningstar database. Representatives of the Advisor discussed with the Board the levels of its advisory

20

Renewal of Investment Advisory Agreement (unaudited)

fee for each Series of the Fund and as compared to the median and mean advisory fees for similar funds as listed on Morningstar. Expense ratios for every Series, except the Pro-Blend’s Class R and Class C, and Target Class R and Class C, are currently below the median and mean for similar funds as listed on Morningstar. Based on their review of the information provided, the Board concluded that the fees and expenses of each Series of the Fund were reasonable on a comparative basis.

• The Board also considered the other benefits the Advisor derives from its relationship with the Fund. Such other benefits include certain research products provided by soft dollars. Given the level of soft dollar transactions involving the Fund, the Board concluded that these additional benefits to the Advisor were reasonable.

• In addition to the factors described above, the Board considered the Advisor’s personnel, investment strategies, policies and procedures relating to compliance with personal securities transactions, and reputation, expertise and resources in domestic and foreign financial markets. The Board concluded that these factors support the conclusion that the Advisor performs its services in a reasonable manner.

• The Board did not consider economies of scale at this time because of the multiple uses of the Fund (for the Advisor’s discretionary investment account clients in addition to direct investors), the current profitability of the Advisor’s services to the Fund under the Agreement, and the overall size of the Fund complex.

Based on the Board’s deliberations and their evaluation of the information described above, the Board, including a majority of Directors that are not “interested persons” as defined in the Investment Company Act of 1940, concluded that the compensation under the Agreement was fair and reasonable in light of the services and expenses and such other matters as the Directors considered to be relevant in the exercise of their reasonable judgment. Accordingly, the Board approved the renewal of the Agreement. In the course of their deliberations, the Directors did not identify any particular information that was all important or controlling.

21

Directors’ and Officers’ Information (unaudited)

The Statement of Additional Information provides additional information about the Fund’s directors and officers and can be obtained without charge by calling 1-800-466-3863, at www.manningnapieradvisors.com, or on the EDGAR Database on the SEC Internet web site (http:// www.sec.gov). The following chart shows certain information about the Fund’s officers and directors, including their principal occupations during the last five years. Unless specific dates are provided, the individuals have held the listed positions for longer than five years.

INTERESTED DIRECTOR/OFFICER

Name:	B. Reuben Auspitz*
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	63
Current Position(s) Held with Fund:	Principal Executive Officer, President, Chairman & Director
Term of Office1 & Length of Time Served:	Indefinite - Director since 1984; Vice President 1984 - 2003; President since 2004; Principal Executive Officer since 2002
Principal Occupation(s) During Past 5 Years:	Executive Vice President; Executive Group Member**; Chief Compliance Officer since 2004; Vice Chairman since June 2010; Co-Executive Director from 2003-2010 - Manning & Napier Advisors, Inc. President; Director - Manning & Napier Investor Services, Inc. Holds or has held one or more of the following titles for various subsidiaries and affiliates: President, Vice President, Director, Chairman, Treasurer, Chief Compliance Officer or Member.
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
INDEPENDENT DIRECTORS
Name:	Paul A. Brooke
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	65
Current Position(s) Held with Fund:	Director, Audit Committee Member, Governance & Nominating Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 2007
Principal Occupation(s) During Past 5 Years:	Chairman & CEO, Alsius Corp. (investments); Managing Member, PMSV Holdings LLC (investments)
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	Incyte Corp. (2000-present) ViroPharma, Inc. (2000-present) HLTH Corp. (2000-present) Cheyne Capital International (2000-present) MPM Bio-equities (2000-present) GMP Companies (2000-present) HoustonPharma (2000-present)
Name:	Richard M. Hurwitz
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	47
Current Position(s) Held with Fund:	Director, Audit Committee Member, Governance & Nominating Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 2009
Principal Occupation(s) During Past 5 Years:	Chief Executive Officer, Pictometry International Corp. since August 2010 (provider of georeferenced, aerial image libraries and related software) Managing Partner (2006-July 2010) - Aegis Investment Partners, LLC (investments); Founder and Managing Partner (2004-2005) - Village Markets, LLC (groceries)
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	Pictometry International Corp. (2000-2010) Pioneering Technologies (2006-2009) Vensearch Capital Corp. (2003-2007)

22

Directors’ and Officers’ Information (unaudited)

INDEPENDENT DIRECTORS (continued)

Name:	Stephen B. Ashley
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	70
Current Position(s) Held with Fund:	Director, Audit Committee Member, Governance & Nominating
	Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 1996
Principal Occupation(s) During Past 5 Years:	Chairman, Director, President & Chief Executive Officer, The Ashley Group (property management and investment). Chairman (non-executive) 2004-2008; Director 1995-2008 - Fannie Mae (mortgage)
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	The Ashley Group (1995-2008)
	Genesee Corporation (1987-2007)
Name:	Peter L. Faber
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	72
Current Position(s) Held with Fund:	Director, Governance & Nominating Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 1987
Principal Occupation(s) During Past 5 Years:	Senior Counsel since 2006, Partner (1995 - 2006) - McDermott, Will & Emery LLP (law firm)
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	Partnership for New York City, Inc. (non-profit) New York Collegium (non-profit) Boston Early Music Festival (non-profit)
Name:	Harris H. Rusitzky
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	76
Current Position(s) Held with Fund:	Director, Audit Committee Member, Governance & Nominating Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 1985
Principal Occupation(s) During Past 5 Years:	President, The Greening Group (business consultants) since 1994; Partner, The Restaurant Group (restaurants) since 2006
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
OFFICERS
Name:	Jeffrey S. Coons, Ph.D., CFA
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	47
Current Position(s) Held with Fund:	Vice President
Term of Office1 & Length of Time Served:	Since 2004
Principal Occupation(s) During Past 5 Years:	President since 2010, Co-Director of Research since 2002, Executive Group Member** since 2003, - Manning & Napier Advisors, Inc. Holds one or more of the following titles for various subsidiaries and affiliates: President, Director, Treasurer or Senior Trust Officer.
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A

23

Directors’ and Officers’ Information (unaudited)

OFFICERS (continued)
Name:	Beth Galusha
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	49
Current Position(s) Held with Fund:	Assistant Chief Financial Officer
Term of Office1 & Length of Time Served:	Assistant Chief Financial Officer since 2010
Principal Occupation(s) During Past 5 Years:	Chief Financial Officer and Treasurer, Manning & Napier Advisors, Inc. Holds one or more of the following titles for various affiliates: Chief Financial Officer, Director, or Treasurer
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
Name:	Christine Glavin
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	44
Current Position(s) Held with Fund:	Principal Financial Officer, Chief Financial Officer
Term of Office1 & Length of Time Served:	Principal Financial Officer since 2002; Chief Financial Officer since 2001
Principal Occupation(s) During Past 5 Years:	Fund Reporting Manager, Manning & Napier Advisors, Inc. since 1997
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
Name:	Jodi L. Hedberg
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	43
Current Position(s) Held with Fund:	Corporate Secretary, Chief Compliance Officer, Anti-Money Laundering Compliance Officer
Term of Office1 & Length of Time Served:	Corporate Secretary since 1997; Chief Compliance Officer since 2004
Principal Occupation(s) During Past 5 Years:	Director of Compliance, Manning & Napier Advisors, Inc. and affiliates since 1990 (title change in 2005 from Compliance Manager to Director of Compliance); Corporate Secretary, Manning & Napier Investor Services, Inc. since 2006
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
Name:	Richard Yates
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	45
Current Position(s) Held with Fund:	Chief Legal Officer
Term of Office1 & Length of Time Served:	Chief Legal Officer since 2004
Principal Occupation(s) During Past 5 Years:	Counsel - Manning & Napier Advisors, Inc. & affiliates since 2000; Holds one or more of the following titles for various affiliates; Director or Corporate Secretary
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A

*Interested Director, within the meaning of the Investment Company Act of 1940 by reason of his position with the Fund’s investment advisor and distributor. Mr. Auspitz serves as the Executive Vice President and Director, Manning & Napier Advisors, Inc. and President and Director, Manning

& Napier Investor Services, Inc., the Fund’s distributor.

**Prior to June 2010, the Executive Group, consisting of senior executive employee-owners, performed the duties of the Office of the Chief Executive of the Advisor. Effective June 2010, the Executive Group serves as an advisory board to the Chief Executive Officer.

¹The term of office for President, Vice President, Chief Financial Officer, Assistant Chief Financial Officer, Chief Legal Officer and Corporate Secretary is one year and until their respective successors are chosen and qualified. All other officers’ terms are indefinite.

24

This page Intentionally Left Blank

25

Literature Requests (unaudited)

Proxy Voting Policies and Procedures

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available, without charge, upon request:

By phone	1-800-466-3863
On the Securities and Exchange
Commission’s (SEC) web site	http://www.sec.gov

Proxy Voting Record

Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30th is available, without charge, upon request:

By phone	1-800-466-3863
On the SEC’s web site	http://www.sec.gov

Quarterly Portfolio Holdings

The Series’ complete schedule of portfolio holdings for the 1st and 3rd quarters of each fiscal year are provided on Form N-Q, and are available, without charge, upon request:

By phone	1-800-466-3863
On the SEC’s web site	http://www.sec.gov

The Series’ Form N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

Prospectus and Statement of Additional Information (SAI)

The prospectus and SAI provide additional information about each Series, including charges, expenses and risks. These documents are available, without charge, upon request:

By phone	1-800-466-3863
On the SEC’s web site	http://www.sec.gov
On the Advisor’s web site	http://www.manning-napier.com

Additional information available at www.manning-napier.com

1. Fund Holdings - Month-End

2. Fund Holdings - Quarter-End

3. Shareholder Report - Annual

4. Shareholder Report - Semi-Annual

MNFNS-12/10-AR

Management Discussion and Analysis (unaudited)

Dear Shareholders:

Over the course of 2010, the markets experienced several ups and downs driven by well-defined swings in investor sentiment. Optimism fueled strong market returns early in the year, as positive economic releases led investors to believe in the potential for a robust U.S. recovery. However, sentiment shifted drastically in May and June as more negative economic news and issues related to Europe’s government debt problems led to notable market losses. In another swing, the markets rebounded in the fall amid better economic developments and prospects that the Federal Reserve would enact another round of quantitative easing. That rally generally continued through the end of the year as the markets reacted positively to the U.S. tax compromise, which extended the Bush-era tax cuts for all income brackets.

With solid gains in the third and fourth quarters, the choppy year ended on a fairly strong note, and broad market indices have now produced back-to-back years of positive results. For the twelve months ending December 31, 2010, the Morgan Stanley Capital International (MSCI) U.S. REIT Index returned 28.48%, noticeably outpacing the S&P 500 Total Return Index, which earned 15.07%. In its first full year of operations, the Real Estate Series had a 24.4% return, outperforming the broad market yet trailing the U.S. REIT Index.

Because of the Advisor’s outlook for a slow, uneven U.S. recovery, the Real Estate Series has maintained a conservative positioning since its inception in November 2009. At the end of 2010, the allocation breakdown of the Series included 26.5% of the portfolio in Multi-family Real Estate Investment Trusts (“REITs”), 21.6% in Office Property REITs, and 12.1% in Lodging (i.e., Hotel REITs and Hotels & Motels). Within the Office sector, the Advisor concentrated on niche property types that are more defensive in nature, such as data centers, life sciences office space, and government-focused office buildings. Meanwhile, the Series continued to have an underweight as compared to the benchmark to more economically sensitive areas, such as the Industrial and Retail sectors. The Industrial sector is linked more directly to economic activity and global trade, and while the Advisor sees potential in niche retailers that can benefit from a restructuring of the traditional mall structure, there is concern as the Retail sector is exposed to the debt-burdened U.S. consumer.

Overall, the Series’ relative underperformance was a result of its conservative bias throughout the year. While this conservative posture aided returns during the market correction in the second quarter, it detracted from relative results as the market rallied on more upbeat U.S. growth prospects. For example, during the latter half of the year, the Series’ underweight to the Retail and Industrial sectors versus the benchmark hurt relative returns. Over the last twelve months, specific selections within Specialized REITs and Residential REITs hurt relative performance, as did an overweight to Office REITs compared to the benchmark. In contrast, a higher allocation to Residential REITs than the benchmark helped relative results, and the Series also benefited from specific selections within the Hotels Resorts & Cruise Lines sub-sector.

While economic developments turned more optimistic toward the end of 2010, the U.S. economy still faces significant headwinds, including a struggling housing market, a stagnant job market, a difficult consumer rebalancing act, and high government debt burdens. Given these long-term structural issues, the slow growth environment in the U.S. will likely remain a reality. As the markets fluctuated around this slow growth trend in 2010, Manning & Napier earned strong absolute returns by staying focused on the fundamentals and maintaining our selective investment process. This investment approach has proved beneficial for the past 40 years, and we believe these qualities will remain important as the market environment unfolds in 2011.

As always, we appreciate your business.

Sincerely,

Manning & Napier Advisors, Inc.

1

Performance Update as of December 31, 2010 (unaudited)

	Average Annual Total Returns As of December 31, 2010
	One Year	Since Inception1
Manning & Napier Fund, Inc. - Real Estate Series2	24.40%	27.85%
S&P 500 Total Return Index3	15.07%	15.41%
Morgan Stanley Capital International (MSCI) U.S. Real Estate Investment Trust (REIT) Index3,4	28.48%	35.25%

The following graph compares the value of a $10,000 investment in the Manning & Napier Fund, Inc. - Real Estate Series from its inception¹ (11/10/09) to present (12/31/10) to the S&P 500 Total Return Index and the MSCI U.S. REIT Index.

¹ Performance numbers for the Series and Index are calculated from November 10, 2009, the Series’ inception date.

² The Series’ performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of shares. The Series’ performance is historical and may not be indicative of future results. The performance returns shown are inclusive of the net expense ratio of the Series. For the year ended December 31, 2010, this annualized net expense ratio was 1.20%. The annualized gross expense ratio, which does not account for any voluntary or contractual waivers currently in effect, was 1.21% for the year ended December 31, 2010.

³ The S&P 500 Total Return Index is an unmanaged capitalization-weighted measure of 500 widely held common stocks listed on the New York Stock Exchange, American Stock Exchange and the Over-the-Counter market. The Index returns assume daily reinvestment of dividends. The MSCI U.S. REIT Index is a free float-adjusted market capitalization weighted index that is comprised of equity REITs that are included in the MSCI U.S. Investable Market 2500 Index, with the exception of specialty equity REITs that do not generate a majority of their revenue and income from real estate rental and leasing operations. The Index represents approximately 85% of the U.S. REIT universe. Both Indices’ returns, unlike Series returns, do not reflect any fees or expenses.

⁴ The MSCI U.S. REIT Index returns are now assuming daily reinvestment of net dividends. Prior to December 31, 2010 the Index returns assumed daily reinvestment of gross dividends.

2

Shareholder Expense Example (unaudited)

As a shareholder of the Series, you may incur two types of costs: (1) transaction costs and (2) ongoing costs, including management fees and other Series expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Series and to compare these costs with the ongoing costs of investing in other mutual funds.

The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (July 1, 2010 to December 31, 2010).

Actual Expenses

The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Series’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Series’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid during the period. You may use this information to compare the ongoing costs of investing in the Series and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.

	Beginning Account Value 7/1/10	Ending Account Value 12/31/10	Expenses Paid During Period* 7/1/10-12/31/10
Actual	$1,000.00	$1,173.20	$6.57
Hypothetical (5% return before expenses)	$1,000.00	$1,019.16	$6.11

*Expenses are equal to the Series’ annualized expense ratio (for the six-month period) of 1.20%, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). Expenses are based on the most recent fiscal half year; therefore, the expense ratio stated above may differ from the expense ratio stated in the financial highlights, which is based on one-year data. The Series’ total return would have been lower had certain expenses not been waived during the period.

3

Portfolio Composition as of December 31, 2010 (unaudited)

TopTen Stock Holdings2
BioMed Realty Trust, Inc.	4.9	%	UDR, Inc.	3.3	%
Digital Realty Trust, Inc.	4.5	%	AvalonBay Communities, Inc.	3.1	%
Apartment Investment & Management Co. - Class A	3.8	%	Pebblebrook Hotel Trust	3.1	%
Host Hotels & Resorts, Inc.	3.6	%	Simon Property Group, Inc.	3.1	%
Corporate Office Properties Trust	3.6	%	Boston Properties, Inc.	3.1	%
2As a percentage of total investments.

4

Investment Portfolio - December 31, 2010

	Shares		Value (Note 2)
COMMON STOCKS - 98.6%
Consumer Discretionary - 4.8%
Hotels, Restaurants & Leisure - 3.2%
Accor S.A. (France)1		23,000	$	1,025,053
Hyatt Hotels Corp. - Class A*		19,840		907,878
Intercontinental Hotels Group plc (United Kingdom)1		45,900		896,605
				2,829,536
Household Durables - 1.6%
DR Horton, Inc.		36,500		435,445
Lennar Corp. - Class A		30,000		562,500
Toll Brothers, Inc.*		22,800		433,200
				1,431,145
Total Consumer Discretionary				4,260,681
Financials - 91.9%
Real Estate Management & Development - 2.0%
CB Richard Ellis Group, Inc. - Class A*		46,600		954,368
Renhe Commercial Holdings Co. Ltd. (China)1		1,900,000		332,207
Thomas Properties Group, Inc.*		122,000		514,840
				1,801,415
REITS - Apartments - 24.0%
American Campus Communities, Inc.		71,210		2,261,630
Apartment Investment & Management Co. - Class A		131,000		3,385,040
Associated Estates Realty Corp.		57,000		871,530
AvalonBay Communities, Inc.		25,070		2,821,629
Camden Property Trust		49,710		2,683,346
Equity Residential		52,000		2,701,400
Home Properties, Inc.		43,540		2,416,035
Mid-America Apartment Communities, Inc.		20,430		1,297,101
UDR, Inc.		127,550		2,999,976
				21,437,687
REITS - Diversified - 11.2%
British Land Co. plc (United Kingdom)1		108,000		886,514
Digital Realty Trust, Inc.		79,200		4,081,968
DuPont Fabros Technology, Inc.		113,500		2,414,145
Land Securities Group plc (United Kingdom)1		77,000		812,235
Lexington Realty Trust		120,000		954,000
Morguard Real Estate Investment Trust (Canada)		58,690		868,279
				10,017,141
REITS - Health Care - 12.4%
Cogdell Spencer, Inc.		422,210		2,448,818
HCP, Inc.		70,790		2,604,364
Health Care REIT, Inc.		49,520		2,359,133

The accompanying notes are an integral part of the financial statements. 5

Investment Portfolio - December 31, 2010

	Shares		Value (Note 2)
COMMON STOCKS (continued)
Financials (continued)
REITS - Health Care (continued)
Healthcare Realty Trust, Inc.		79,580	$	1,684,708
National Health Investors, Inc.		16,633		748,818
Omega Healthcare Investors, Inc.		52,230		1,172,041
				11,017,882
REITS - Hotels - 8.9%
DiamondRock Hospitality Co.*		79,410		952,920
Host Hotels & Resorts, Inc.		182,030		3,252,876
LaSalle Hotel Properties		33,890		894,696
Pebblebrook Hotel Trust		138,000		2,804,160
				7,904,652
REITS - Manufactured Homes - 2.4%
Equity Lifestyle Properties, Inc.		39,030		2,182,948
REITS - Office Property - 15.9%
Alexandria Real Estate Equities, Inc.		36,920		2,704,759
BioMed Realty Trust, Inc.		235,710		4,395,991
Boston Properties, Inc.		32,120		2,765,532
Corporate Office Properties Trust		91,740		3,206,313
Mack-Cali Realty Corp.		33,400		1,104,204
				14,176,799
REITS - Regional Malls - 4.1%
General Growth Properties, Inc.		54,370		841,648
Simon Property Group, Inc.		28,000		2,785,720
				3,627,368
REITS - Shopping Centers - 2.9%
Equity One, Inc.		43,000		781,740
Tanger Factory Outlet Centers		35,860		1,835,673
				2,617,413
REITS - Single Tenant - 3.9%
National Retail Properties, Inc.		65,070		1,724,355
Realty Income Corp.		50,630		1,731,546
				3,455,901
REITS - Storage - 4.2%
Public Storage		24,700		2,505,074
Sovran Self Storage, Inc.		33,000		1,214,730
				3,719,804
Total Financials				81,959,010

6 The accompanying notes are an integral part of the financial statements.

Investment Portfolio - December 31, 2010

	Shares		Value (Note 2)
COMMON STOCKS (continued)
Industrials - 0.8%
Transportation Infrastructure - 0.8%
Groupe Eurotunnel S.A. (France)1		83,000	$	730,420
Utilities - 1.1%
Electric Utilities - 1.1%
Brookfield Infrastructure Partners LP - ADR (Bermuda)		45,600		959,880
AET&D Holdings No. 1 Ltd. (Australia)2		125,000		—
Total Utilities				959,880
TOTAL COMMON STOCKS
(Identified Cost $72,141,203)				87,909,991
SHORT-TERM INVESTMENTS - 2.2%
Dreyfus Cash Management, Inc. - Institutional Shares3, 0.14%
(Identified Cost $1,926,259)		1,926,259		1,926,259
TOTAL INVESTMENTS - 100.8%
(Identified Cost $74,067,462)				89,836,250
LIABILITIES, LESS OTHER ASSETS - (0.8%)				(700,275	)
NET ASSETS - 100%			$	89,135,975

No. - Number

REITS - Real Estate Investment Trusts

^*Non-income producing security

¹International Fair Value factor from pricing service was applied.

²Security has been valued at fair value (see Note 2 to the financial statements).

³Rate shown is the current yield as of December 31, 2010.

The accompanying notes are an integral part of the financial statements. 7

Statement of Assets and Liabilities

December 31, 2010

ASSETS:
Investments, at value (identified cost $74,067,462) (Note 2)	$	89,836,250
Cash		3,124
Dividends receivable		344,952
Receivable for fund shares sold		77,125
TOTAL ASSETS		90,261,451
LIABILITIES:
Accrued management fees (Note 3)		69,312
Accrued fund accounting and administration fees (Note 3)		4,387
Accrued transfer agent fees (Note 3)		1,941
Accrued Chief Compliance Officer service fees (Note 3)		241
Payable for securities purchased		854,558
Payable for fund shares repurchased		135,554
Other payables and accrued expenses		59,483
TOTAL LIABILITIES		1,125,476
TOTAL NET ASSETS	$	89,135,975
NET ASSETS CONSIST OF:
Capital stock	$	70,883
Additional paid-in-capital		71,933,274
Distributions in excess of net investment income		(6,678	)
Accumulated net realized gain on investments, foreign currency and translation of other assets and liabilities		1,369,605
Net unrealized appreciation on investments, foreign currency and translation of other assets and liabilities		15,768,891
TOTAL NET ASSETS	$	89,135,975
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER SHARE - Class A ($89,135,975/7,088,339 shares)	$	12.58

8 The accompanying notes are an integral part of the financial statements.

Statement of Operations

For the Year Ended December 31, 2010

INVESTMENT INCOME:
Dividends (net of foreign taxes withheld, $2,204)	$	1,770,300
EXPENSES:
Management fees (Note 3)		799,201
Fund accounting and administration fees (Note 3)		37,389
Transfer agent fees (Note 3)		14,682
Chief Compliance Officer service fees (Note 3)		2,741
Directors’ fees (Note 3)		1,305
Custodian fees		5,932
Miscellaneous		108,584
Total Expenses		969,834
Less reduction of expenses (Note 3)		(12,819	)
Net Expenses		957,015
NET INVESTMENT INCOME		813,285
REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND FOREIGN CURRENCY:
Net realized gain on-Investments		4,453,842
Foreign currency and translation of other assets and liabilities		1,672
		4,455,514
Net change in unrealized appreciation on-Investments		12,074,199
Foreign currency and translation of other assets and liabilities		103
		12,074,302
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND FOREIGN CURRENCY		16,529,816
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	17,343,101

The accompanying notes are an integral part of the financial statements. 9

Statements of Changes in Net Assets

	For the Year Ended 12/31/10			For the Period 11/10/091 to 12/31/09
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income	$	813,285		$	118,419
Net realized gain on investments and foreign currency		4,455,514			112,303
Net change in unrealized appreciation on investments and foreign currency		12,074,302			3,694,589
Net increase from operations		17,343,101			3,925,311
DISTRIBUTIONS TO SHAREHOLDERS (Note 9):
From net investment income		(842,827	)		(103,993	)
From net realized gain on investments		(3,149,000	)		(40,774	)
Total distributions to shareholders		(3,991,827	)		(144,767	)
CAPITAL STOCK ISSUED AND REPURCHASED:
Net increase from capital share transactions (Note 5)		6,606,115			65,398,042
Net increase in net assets		19,957,389			69,178,586
NET ASSETS:
Beginning of period		69,178,586			—
End of period (including distributions in excess of net investment income of $6,678 and undistributed netinvestment income of $14,426, respectively)	$	89,135,975		$	69,178,586
1 Commencement of operations.

10 The accompanying notes are an integral part of the financial statements.

Financial Highlights

	For the Year Ended 12/31/10		For the Period 11/10/091 to 12/31/09
Per share data (for a share outstanding throughout each period):
Net asset value - Beginning of period		$10.61		$10.00
Income from investment operations:
Net investment income2		0.12		0.02
Net realized and unrealized gain on investments		2.44		0.62
Total from investment operations		2.56		0.64
Less distributions to shareholders:
From net investment income		(0.12)		(0.02)
From net realized gain on investments		(0.47)		(0.01)
Total distributions to shareholders		(0.59)		(0.03)
Net asset value - End of period		$12.58		$10.61
Net assets - End of period (000’s omitted)		$89,136		$69,179
Total return3		24.40%		6.36%
Ratios (to average net assets)/Supplemental Data:
Expenses*		1.20%		1.20%4
Net investment income		1.02%		1.43%4
Portfolio turnover		34%		3%
*The investment advisor did not impose all or a portion of its management fees, and other fees in some periods and in some periods paid a portion of the series’ expenses. If these expenses had been incurred by the Series, the expense ratio (to average net assets) would have been increased by the following amounts:
		0.01%		0.38%4

¹Commencement of operations.

²Calculated based on average shares outstanding during the periods.

³Represents aggregate total return for the periods indicated, and assumes reinvestment of all distributions. Total return would have been lower had certain expenses not been waived or reimbursed during the periods. Periods less than one year are not annualized.

⁴Annualized.

The accompanying notes are an integral part of the financial statements. 11

Notes to Financial Statements

1. ORGANIZATION

Real Estate Series (the “Series”) is a no-load non-diversified series of Manning & Napier Fund, Inc. (the “Fund”). The Fund is organized in Maryland and is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company.

The Series’ investment objective is to provide long-term growth by investing principally in the common stocks of companies in real estate-based industries.

The Fund’s Advisor is Manning & Napier Advisors, Inc. (the “Advisor”). Shares of the Series are offered to investors, clients and employees of the Advisor and its affiliates. The total authorized capital stock of the Fund consists of 10.0 billion shares of common stock each having a par value of $0.01. As of December 31, 2010, 6.2 billion shares have been designated in total among 29 series, of which 100 million have been designated as Real Estate Series Class A common stock.

2. SIGNIFICANT ACCOUNTING POLICIES

Security Valuation

Portfolio securities, including domestic equities, foreign equities, warrants and options, listed on an exchange other than the NASDAQ National Market System are valued at the latest quoted sales price of the exchange on which the security is primarily traded. Securities not traded on valuation date or securities not listed on an exchange are valued at the latest quoted bid price provided by the Fund’s pricing service. Securities listed on the NASDAQ National Market System are valued in accordance with the NASDAQ Official Closing Price.

Short-term investments that mature in sixty days or less are valued at amortized cost, which approximates market value. Investments in open-end investment companies are valued at their net asset value per share on valuation date.

Volume and level of activity in established markets for an asset or liability are evaluated to determine whether recent transactions and quoted prices are determinative of fair value. Where there have been significant decreases in volume and level of activity, further analysis and adjustment may be necessary to estimate fair value. The Series measures fair value in these instances by the use of inputs and valuation techniques which may be based upon current market prices of securities that are comparable in coupon, rating, maturity and industry and/or expectation of future cash flows. As a result of trading in relatively thin markets and/or markets that experience significant volatility, the prices used by the Series to value these securities may differ from the value that would be realized if these securities were sold, and the differences could be material.

Securities for which representative valuations or prices are not available from the Fund’s pricing service may be valued at fair value. Due to the inherent uncertainty of valuations of such securities, the fair value may differ significantly from the values that would have been used had a ready market for such securities existed. If trading or events occurring after the close of the principal market in which securities are traded are expected to materially affect the value of those securities, then they may be valued at their fair value, taking this trading or these events into account. Fair value is determined in good faith by the Advisor under procedures approved by and under the general supervision and responsibility of the Fund’s Board of Directors (the “Board”). In accordance with the procedures approved by the Board, the Series applies fair value pricing on a daily basis except for North American, Central American, South American and Caribbean equity securities. Fair valuing of securities is determined with the assistance of a pricing service using calculations or factors based on indices of domestic securities and other appropriate indicators, such as prices of relevant American Depository Receipts and futures contracts, to adjust local market prices for subsequent movements through the time the Series calculates its net asset value. The value of securities used for the net asset value calculation under the procedures may differ from published prices for the same securities. It is the Fund’s

12

Notes to Financial Statements

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

Security Valuation (continued)

policy to classify each foreign equity security, except for those in the regions noted above, as Level 2 securities due to the fact the pricing service evaluated what factor was applied to the calculated end of day market price.

Various inputs are used in determining the value of the Series’ assets or liabilities carried at market value. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical assets and liabilities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.). Level 3 includes significant unobservable inputs (including the Series’ own assumptions in determining the fair value of investments). The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

The following is a summary of the valuation levels used for major security types as of December 31, 2010 in valuing the Series’ assets or liabilities carried at market value:

Description	Total		Level  1		Level  2		Level  3
Assets:
Equity securities*	$	87,909,991	$	83,226,957	$	4,683,034	$	—	***
Preferred securities		—		—		—		—
Debt securities:
Mutual funds		1,926,259		1,926,259		—		—
Other financial instruments**:		—		—		—		—
Total assets:		89,836,250		85,153,216		4,683,034		—
Liabilities:
Other financial instruments**:		—		—		—		—
Total liabilities:		—		—		—		—
Total	$	89,836,250	$	85,153,216	$	4,683,034	$	—

*Includes common stock, warrants and rights. Please see the Investment Portfolio for industry classification and for securities where an International Fair Value factor from the pricing service was applied to value the security. Such securities are included in Level 2 in the table above.

**Other financial instruments are derivative instruments not reflected in the Investment Portfolio, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument. As of December 31, 2010, the Series did not hold any derivative instruments.

***AET&D Holdings No.1 Ltd. is a Level 3 security as of December 31, 2010. However, there is no cost or market value for this security reported in the financial statements.

The Fund’s policy is to recognize transfers in and transfers out of the valuation levels as of the beginning of the reporting period. There were no transfers between Level 1 and Level 2 during the year ended December 31, 2010.

Additional disclosure surrounding the activity in Level 3 fair value measurement will be effective for fiscal years beginning after December 15, 2010. Management has concluded that this will not have a material impact on the Series’ financial statements.

Security Transactions, Investment Income and Expenses

Security transactions are accounted for on trade date. Dividend income is recorded on the ex-dividend date, except that if the ex-dividend date has passed, certain dividends from foreign securities are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends, if any, are recorded at the fair market value of the securities

13

Notes to Financial Statements

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

Security Transactions, Investment Income and Expenses (continued)

received. Interest income, including amortization of premium and accretion of discounts using the effective interest method, is earned from settlement date and accrued daily.

Expenses are recorded on an accrual basis. Most expenses of the Fund can be attributed to a specific series. Expenses which cannot be directly attributed are apportioned among the series in the Fund in such a manner as deemed equitable by the Fund’s Board, taking into consideration, among other things, the nature and type of expense.

The Fund records distributions received in excess of income from underlying investments as a reduction of cost of investments and/or realized gain. Such amounts are based on estimates if actual amounts are not available and actual amounts of income, realized gain and return of capital may differ from the estimated amounts. The Fund adjusts the estimated amounts of components of distributions (and consequently its net investment income) as necessary once the issuers provide information about the actual composition of the distributions.

The Series uses the identified cost method for determining realized gain or loss on investments for both financial statement and federal income tax reporting purposes.

Foreign Currency Translation

The books and records of the Series are maintained in U.S. dollars. Foreign currencies, investments and other assets and liabilities are translated into U.S. dollars at the current exchange rates. Purchases and sales of investment securities and income and expenses are translated on the respective dates of such transactions. The Series does not isolate realized and unrealized gains and losses attributable to changes in the exchange rates from gains and losses that arise from changes in the market value of investments. Such fluctuations are included with net realized and unrealized gain or loss on investments. Net realized foreign currency gains and losses represent foreign currency gains and losses between trade date and settlement date on securities transactions, gains and losses on disposition of foreign currencies and the difference between the amount of income and foreign withholding taxes recorded on the books of the Series and the amounts actually received or paid.

Federal Taxes

The Series’ policy is to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies. The Series is not subject to federal income tax or excise tax to the extent that the Series distributes to shareholders each year its taxable income, including any net realized gains on investments, in accordance with requirements of the Internal Revenue Code. Accordingly, no provision for federal income tax or excise tax has been made in the financial statements.

Management evaluates its tax positions to determine if the tax positions taken meet the minimum recognition threshold in connection with accounting for uncertainties in income tax positions taken or expected to be taken for the purposes of measuring and recognizing tax liabilities in the financial statements. Recognition of tax benefits of an uncertain tax position is required only when the position is “more likely than not” to be sustained assuming examination by taxing authorities. At December 31, 2010, the Series has recorded no liability for net unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken in future tax returns.

The Series files income tax returns in the U.S. federal jurisdiction, various states and foreign jurisdictions, as required. No income tax returns are currently under investigation. The statute of limitations on the Series’ tax returns remains open for the period ended December 31, 2009 and the year ended December 31, 2010. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.

14

Notes to Financial Statements

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

Federal Taxes (continued)

Additionally, based on the Fund’s understanding of the tax rules and rates related to income, gains and transactions for foreign jurisdictions in which it invests, the Series will provide for foreign taxes, and where appropriate, deferred foreign tax.

Distributions of Income and Gains

Distributions to shareholders of net investment income and net realized gains are made annually. An additional distribution may be necessary to avoid taxation of the Series. Distributions are recorded on the ex-dividend date.

Indemnifications

The Fund’s organizational documents provide former and current directors and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund’s maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.

Other

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.

3. TRANSACTIONS WITH AFFILIATES

The Fund has an Investment Advisory Agreement (the “Agreement”) with the Advisor, for which the Series pays a fee, computed daily and payable monthly, at an annual rate of 1.00% of the Series’ average daily net assets.

Under the Agreement, personnel of the Advisor provide the Series with advice and assistance in the choice of investments and the execution of securities transactions, and otherwise maintain the Series’ organization. The Advisor also provides the Fund with necessary office space and fund administration and support services. The salaries of all officers of the Fund (except a percentage of the Fund’s Chief Compliance Officer’s salary, which is paid by the Fund), and of all Directors who are “affiliated persons” of the Fund, or of the Advisor, and all personnel of the Fund, or of the Advisor, performing services relating to research, statistical and investment activities, are paid by the Advisor. Each “non-affiliated” Director receives an annual stipend, which is allocated among all the active series of the Fund. In addition, these Directors also receive a fee per Board meeting attended plus a fee for each committee meeting attended.

The Advisor has contractually agreed, until at least April 30, 2012, to waive its fee and, if necessary, pay other operating expenses of the Series in order to maintain total direct annual fund operating expenses for the Series at no more than 1.20% of average daily net assets each year. Accordingly, the Advisor waived fees of $12,061 for the year ended December 31, 2010, which is included as a reduction of expenses on the Statement of Operations. For the year ended December 31, 2010, the Advisor voluntarily waived additional fees of $758, which is also included as a reduction of expenses on the Statement of Operations. The Advisor is not eligible to recoup any expense that has been waived or reimbursed in prior years.

Manning & Napier Investor Services, Inc., a registered broker-dealer affiliate of the Advisor, acts as distributor for the Fund’s shares. The services of Manning & Napier Investor Services, Inc. are provided at no additional cost to the Series.

15

Notes to Financial Statements

3. TRANSACTIONS WITH AFFILIATES (continued)

The Advisor has agreements with PNC Global Investment Servicing (U.S.) Inc. (“PNCGIS”) under which PNCGIS serves as sub-accountant services agent and sub-transfer agent. The Fund pays the Advisor an annual fee related to fund accounting and administration of 0.0175% on the first $3 billion of average daily net assets (excluding Target Series); 0.015% on the next $3 billion of average daily net assets (excluding Target Series); and 0.01% of the average daily net assets in excess of $6 billion (excluding Target Series); plus a base fee of $25,500 per Series. Transfer Agent fees are charged to the Fund on a per account basis. Additionally, certain transaction- and cusip-based fees and out-of-pocket expenses, including charges for reporting relating to the Fund’s compliance program, are charged.

Effective July 1, 2010, PNCGIS was sold to The Bank of New York Mellon Corporation, the Series’ custodian. At the close of the sale, PNCGIS changed its name to BNY Mellon Investment Servicing (U.S.) Inc. (“BNY”).

Expenses not directly attributable to a Series are allocated based on each Series’ relative net assets or number of accounts, depending on the expense.

4. PURCHASES AND SALES OF SECURITIES

For the year ended December 31, 2010, purchases and sales of securities, other than U.S. Government securities and short-term securities, were $30,723,037 and $26,832,796, respectively. There were no purchases or sales of U.S. Government securities.

5. CAPITAL STOCK TRANSACTIONS

Transactions in shares of Real Estate Series were:

							For the period 11/10/09
	For the Year Ended 12/31/10						(commencement of operations) to 12/31/09
	Shares			Amount			Shares			Amount
Sold		938,366		$	11,015,288			6,617,571		$	66,420,562
Reinvested		326,194			3,931,823			13,571			139,922
Repurchased		(694,124	)		(8,340,996	)		(113,239	)		(1,162,442	)
Total		570,436		$	6,606,115			6,517,903		$	65,398,042

Substantially all of the Series’ shares represent investments by fiduciary accounts over which the Advisor has sole investment discretion.

6. FINANCIAL INSTRUMENTS

The Series may trade in instruments including written and purchased options, forward foreign currency exchange contracts and futures contracts and other derivatives in the normal course of investing activities to assist in managing exposure to various market risks. Investments in these instruments may subject the Series to various elements of risk, which may involve, to a varying degree, elements of risk in excess of the amounts recognized for financial statement purposes. These risks include: the risk that changes in the value of a derivative may not correlate perfectly with the underlying asset, rate or index, counterparty credit risk related to over the counter derivatives counterparties’ failure to perform under contract terms, liquidity risk related to the lack of a liquid market for these contracts allowing the fund to close out its position(s) and documentation risk relating to disagreement over contract terms. No such investments were held by the Series during the year ended December 31, 2010.

16

Notes to Financial Statements

7. FOREIGN SECURITIES

Investing in securities of foreign companies and foreign governments involves special risks and considerations not typically associated with investing in securities of domestic companies and the U.S. Government. These risks include revaluation of currencies and future adverse political and economic developments. Moreover, securities of foreign companies and foreign governments and their markets may be less liquid and their prices more volatile than those of comparable domestic companies and the U.S. Government.

8. REAL ESTATE SECURITIES

The Series may focus its investments in certain real estate related industries; hence, the Series may subject itself to a greater degree of risk than a series that is more diversified.

9. FEDERAL INCOME TAX INFORMATION

The amount and characterization of certain income and capital gains to be distributed are determined in accordance with federal income tax regulations, which may differ from accounting principles generally accepted in the United States of America. These differences are primarily due to differing book and tax treatments in the timing of the recognition of net investment income or gains and losses, including foreign currency gains and losses, losses deferred due to wash sales, post-October losses and investments in passive foreign investment companies (PFICs). The Series may periodically make reclassifications among its capital accounts to reflect income and gains available for distribution (or available capital loss carryovers) under income tax regulations without impacting the Series’ net asset value. Any such reclassifications are not reflected in the financial highlights.

The tax character of distributions paid were as follows:

	For the Year Ended 12/31/10		For the Period Ended 12/31/09*
Ordinary income	$	3,765,261	$	103,993
Long-term capital gains		226,566		40,774

* The Fund commenced operations on November 10, 2009.

For the year ended December 31, 2010, the Series elected to defer $125 of currency losses, attributable to post-October losses.

At December 31, 2010, the tax basis of distributable earnings and the net unrealized appreciation based on the identified cost of investments for federal income tax purposes were as follows:

Cost for federal income tax purposes	$74,078,511
Unrealized appreciation	$16,380,246
Unrealized depreciation	(622,507)
Net unrealized appreciation	$15,757,739
Undistributed ordinary income	504,518
Undistributed long-term gains	869,583

17

Report of Independent Registered Public Accounting Firm

To the Board of Directors of Manning & Napier Fund, Inc. and Shareholders of Real Estate Series:

In our opinion, the accompanying statement of assets and liabilities, including the investment portfolio, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the Real Estate Series (a series of Manning & Napier Fund, Inc., hereafter referred to as the “Series”) at December 31, 2010, and the results of its operations for the year then ended and the changes in its net assets and the financial highlights for the year then ended and for the period November 10, 2009 (commencement of operations) through December 31, 2009, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Series’ management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2010 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

New York, New York

February 22, 2011

18

Supplemental Tax Information (unaudited)

All designations are based on financial information available as of the date of this annual report and, accordingly are subject to change.

For federal income tax purposes, the Series designates for the current fiscal year $66,924 or, if different, the maximum amount allowable under the tax law as qualified dividend income.

Pursuant to Section 852 of the Internal Revenue Code, as amended, the Series hereby designates $226,566 as capital gains for its taxable year ended December 31, 2010, or if different, the maximum allowable under tax law.

For corporate shareholders, the percentage of investment income (dividend income plus short-term gains, if any) that qualifies for the dividends received deduction for the current fiscal year is 0.86%, or if different, the maximum allowable under tax law.

19

Renewal of Investment Advisory Agreement (unaudited)

At the Manning & Napier Fund, Inc. (the “Fund”) Board of Directors’ (the “Board”) meeting, held on November 17, 2010, the Investment Advisory Agreement (the “Agreement”) between the Fund and Manning & Napier Advisors, Inc. (the “Advisor”) was reviewed by the Board for renewal. In connection with the decision whether to renew the Agreement, a variety of material was prepared for and reviewed by the Board.

Representatives of the Advisor attended the meeting and presented additional oral and written information to the Board to assist the Board in its considerations. The discussion immediately below outlines the materials and information presented to the Board in connection with the Board’s 2010 Annual Review of the Agreement and the conclusions made by the Directors when determining to continue the Agreement.

• The Board considered the services provided by the Advisor under the Agreement including, among others: deciding what securities to purchase and sell for each Series; arranging for the purchase and sale of such securities by placing orders with broker-dealers; administering the affairs of the Fund (including the books and records of the Fund not maintained by third party service providers such as the custodian or sub-transfer agent); arranging for the insurance coverage for the Fund; and supervising the preparation of tax returns, SEC filings (including registration statements) and reports to shareholders for the Fund. The Board also considered the nature and quality of such services provided under the Agreement in light of the Advisor’s services provided to the Fund for 24 years. The Board discussed the quality of these services with representatives from the Advisor and concluded that the Advisor was performing its services to the Fund required under the Agreement in a reasonable manner.

• The Board considered the investment performance of the various Series of the Fund. The investment performance for each Series was reviewed on a cumulative basis since inception and on a one year basis. In addition, annualized performance for the following time periods was considered: inception, three year, five year, ten year, and current market cycle. A market cycle includes periods of both rising and falling markets. Returns for established benchmark indices for each Series were provided for each time period. The Board noted that the various Series were competitive against their respective benchmarks and/or peer groups over various time periods, but in particular over the full market cycle period relevant for the Series. In addition, the Board considered at the meeting (and considers on a quarterly basis) a peer group performance analysis consisting of Morningstar universes of mutual funds with similar investment objectives. The Board discussed the performance with representatives from the Advisor and concluded that the investment performance of each of the Fund’s Series was reasonable based on the Fund’s actual performance and comparative performance, especially performance over the current market cycle.

• The Board considered the costs of the Advisor’s services and the profits of the Advisor as they relate to the Advisor’s services to the Fund under the Agreement. In reviewing the Advisor’s costs and profits, the Board discussed the Advisor’s revenues generated from the Fund (on both an actual and adjusted basis) and its expenses associated with providing the services under the Agreement. In addition, the Board reviewed the Advisor’s expenses associated with Fund activities outside of the Agreement (such as expense reimbursements pursuant to expense caps and payments made by the Advisor to third party platforms on which shares of the Fund are available for purchase). It was noted by representatives of the Advisor that 11 of the 27 active Series of the Fund are currently experiencing expenses above the capped expense ratios. After discussing the above costs and profits, the Board concluded that the Advisor’s profitability relating to its services provided under the Agreement was reasonable.

• The Board considered the fees and expenses of the various Series of the Fund. The Advisor presented the advisory fees and total expenses for each Series, including the advisory fee adjusted for any expense waivers or reimbursements (either contractual or voluntary) paid by the Advisor. The advisory fees and expense ratios of each Series were compared to an average (on both a mean and median basis) of similar funds as disclosed on the Morningstar database. Representatives of the Advisor discussed with the Board the levels of its advisory

20

Renewal of Investment Advisory Agreement (unaudited)

fee for each Series of the Fund and as compared to the median and mean advisory fees for similar funds as listed on Morningstar. Expense ratios for every Series, except the Pro-Blend’s Class R and Class C, and Target Class R and Class C, are currently below the median and mean for similar funds as listed on Morningstar. Based on their review of the information provided, the Board concluded that the fees and expenses of each Series of the Fund were reasonable on a comparative basis.

• The Board also considered the other benefits the Advisor derives from its relationship with the Fund. Such other benefits include certain research products provided by soft dollars. Given the level of soft dollar transactions involving the Fund, the Board concluded that these additional benefits to the Advisor were reasonable.

• In addition to the factors described above, the Board considered the Advisor’s personnel, investment strategies, policies and procedures relating to compliance with personal securities transactions, and reputation, expertise and resources in domestic and foreign financial markets. The Board concluded that these factors support the conclusion that the Advisor performs its services in a reasonable manner.

• The Board did not consider economies of scale at this time because of the multiple uses of the Fund (for the Advisor’s discretionary investment account clients in addition to direct investors), the current profitability of the Advisor’s services to the Fund under the Agreement, and the overall size of the Fund complex.

Based on the Board’s deliberations and their evaluation of the information described above, the Board, including a majority of Directors that are not “interested persons” as defined in the Investment Company Act of 1940, concluded that the compensation under the Agreement was fair and reasonable in light of the services and expenses and such other matters as the Directors considered to be relevant in the exercise of their reasonable judgment. Accordingly, the Board approved the renewal of the Agreement. In the course of their deliberations, the Directors did not identify any particular information that was all important or controlling.

21

Directors’ and Officers’ Information (unaudited)

The Statement of Additional Information provides additional information about the Fund’s directors and officers and can be obtained without charge by calling 1-800-466-3863, at www.manningnapieradvisors.com, or on the EDGAR Database on the SEC Internet web site (http:// www.sec.gov). The following chart shows certain information about the Fund’s officers and directors, including their principal occupations during the last five years. Unless specific dates are provided, the individuals have held the listed positions for longer than five years.

INTERESTED DIRECTOR/OFFICER
Name:	B. Reuben Auspitz*
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	63
Current Position(s) Held with Fund:	Principal Executive Officer, President, Chairman & Director
Term of Office1 & Length of Time Served:	Indefinite - Director since 1984; Vice President 1984 - 2003; President since 2004; Principal Executive Officer since 2002
Principal Occupation(s) During Past 5 Years:	Executive Vice President; Executive Group Member**; Chief Compliance Officer since 2004; Vice Chairman since June 2010; Co-Executive Director from 2003-2010 - Manning & Napier Advisors, Inc. President; Director - Manning & Napier Investor Services, Inc. Holds or has held one or more of the following titles for various subsidiaries and affiliates: President, Vice President, Director, Chairman, Treasurer, Chief Compliance Officer or Member.
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
INDEPENDENT DIRECTORS
Name:	Paul A. Brooke
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	65
Current Position(s) Held with Fund:	Director, Audit Committee Member, Governance & Nominating Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 2007
Principal Occupation(s) During Past 5 Years:	Chairman & CEO, Alsius Corp. (investments); Managing Member, PMSV Holdings LLC (investments)
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	Incyte Corp. (2000-present)
	ViroPharma, Inc. (2000-present)
	HLTH Corp. (2000-present)
	Cheyne Capital International (2000-present)
	MPM Bio-equities (2000-present)
	GMP Companies (2000-present)
	HoustonPharma (2000-present)
Name:	Richard M. Hurwitz
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	47
Current Position(s) Held with Fund:	Director, Audit Committee Member, Governance & Nominating Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 2009
Principal Occupation(s) During Past 5 Years:	Chief Executive Officer, Pictometry International Corp. since August 2010 (provider of georeferenced, aerial image libraries and related software) Managing Partner (2006-July 2010) - Aegis Investment Partners, LLC (investments); Founder and Managing Partner (2004-2005) - Village Markets, LLC (groceries)
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	Pictometry International Corp. (2000-2010)
	Pioneering Technologies (2006-2009)
	Vensearch Capital Corp. (2003-2007)

22

Directors’ and Officers’ Information (unaudited)

INDEPENDENT DIRECTORS (continued)
Name:	Stephen B. Ashley
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	70
Current Position(s) Held with Fund:	Director, Audit Committee Member, Governance & Nominating Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 1996
Principal Occupation(s) During Past 5 Years:	Chairman, Director, President & Chief Executive Officer, The Ashley Group (property management and investment). Chairman (non-executive) 2004-2008; Director 1995-2008 - Fannie Mae (mortgage)
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	The Ashley Group (1995-2008)
	Genesee Corporation (1987-2007)
Name:	Peter L. Faber
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	72
Current Position(s) Held with Fund:	Director, Governance & Nominating Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 1987
Principal Occupation(s) During Past 5 Years:	Senior Counsel since 2006, Partner (1995 - 2006) - McDermott, Will & Emery LLP (law firm)
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	Partnership for New York City, Inc. (non-profit)
	New York Collegium (non-profit)
	Boston Early Music Festival (non-profit)
Name:	Harris H. Rusitzky
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	76
Current Position(s) Held with Fund:	Director, Audit Committee Member, Governance & Nominating Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 1985
Principal Occupation(s) During Past 5 Years:	President, The Greening Group (business consultants) since 1994; Partner, The Restaurant Group (restaurants) since 2006
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
OFFICERS
Name:	Jeffrey S. Coons, Ph.D., CFA
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	47
Current Position(s) Held with Fund:	Vice President
Term of Office1 & Length of Time Served:	Since 2004
Principal Occupation(s) During Past 5 Years:	President since 2010, Co-Director of Research since 2002, Executive Group Member** since 2003, - Manning & Napier Advisors, Inc. Holds one or more of the following titles for various subsidiaries and affiliates: President, Director, Treasurer or Senior Trust Officer.
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A

23

Directors’ and Officers’ Information (unaudited)

OFFICERS (continued)
Name:	Beth Galusha
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	49
Current Position(s) Held with Fund:	Assistant Chief Financial Officer
Term of Office1 & Length of Time Served:	Assistant Chief Financial Officer since 2010
Principal Occupation(s) During Past 5 Years:	Chief Financial Officer and Treasurer, Manning & Napier Advisors, Inc.
	Holds one or more of the following titles for various affiliates: Chief
	Financial Officer, Director, or Treasurer
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
Name:	Christine Glavin
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	44
Current Position(s) Held with Fund:	Principal Financial Officer, Chief Financial Officer
Term of Office1 & Length of Time Served:	Principal Financial Officer since 2002; Chief Financial Officer since 2001
Principal Occupation(s) During Past 5 Years:	Fund Reporting Manager, Manning & Napier Advisors, Inc. since 1997
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
Name:	Jodi L. Hedberg
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	43
Current Position(s) Held with Fund:	Corporate Secretary, Chief Compliance Officer, Anti-Money Laundering
	Compliance Officer
Term of Office1 & Length of Time Served:	Corporate Secretary since 1997; Chief Compliance Officer since 2004
Principal Occupation(s) During Past 5 Years:	Director of Compliance, Manning & Napier Advisors, Inc. and affiliates
	since 1990 (title change in 2005 from Compliance Manager to Director of
	Compliance); Corporate Secretary, Manning & Napier Investor Services,
	Inc. since 2006
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
Name:	Richard Yates
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	45
Current Position(s) Held with Fund:	Chief Legal Officer
Term of Office1 & Length of Time Served:	Chief Legal Officer since 2004
Principal Occupation(s) During Past 5 Years:	Counsel - Manning & Napier Advisors, Inc. & affiliates since 2000; Holds
	one or more of the following titles for various affiliates; Director or
	Corporate Secretary
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A

*Interested Director, within the meaning of the Investment Company Act of 1940 by reason of his position with the Fund’s investment advisor and distributor. Mr. Auspitz serves as the Executive Vice President and Director, Manning & Napier Advisors, Inc. and President and Director, Manning & Napier Investor Services, Inc., the Fund’s distributor.

**Prior to June 2010, the Executive Group, consisting of senior executive employee-owners, performed the duties of the Office of the Chief Executive of the Advisor. Effective June 2010, the Executive Group serves as an advisory board to the Chief Executive Officer.

¹The term of office for President, Vice President, Chief Financial Officer, Assistant Chief Financial Officer, Chief Legal Officer and Corporate Secretary is one year and until their respective successors are chosen and qualified. All other officers’ terms are indefinite.

24

This Page Is Intentionally Left Blank

25

Literature Requests (unaudited)

Proxy Voting Policies and Procedures

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available, without charge, upon request:

By phone	1-800-466-3863
On the Securities and Exchange
Commission’s (SEC) web site	http://www.sec.gov

Proxy Voting Record

Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30^th is available, without charge, upon request:

By phone	1-800-466-3863
On the SEC’s web site	http://www.sec.gov

Quarterly Portfolio Holdings

The Series’ complete schedule of portfolio holdings for the 1^st and 3^rd quarters of each fiscal year are provided on Form N-Q, and are available, without charge, upon request:

By phone	1-800-466-3863
On the SEC’s web site	http://www.sec.gov

The Series’ Form N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

Prospectus and Statement of Additional Information (SAI)

The prospectus and SAI provide additional information about each Series, including charges, expenses and risks. These documents are available, without charge, upon request:

By phone	1-800-466-3863
On the SEC’s web site	http://www.sec.gov
On the Advisor’s web site	http://www.manning-napier.com

Additional information available at www.manning-napier.com

1. Fund Holdings - Month-End

2. Fund Holdings - Quarter-End

3. Shareholder Report - Annual

4. Shareholder Report - Semi-Annual

                                                                  MNRE-12/10-AR

Management Discussion and Analysis (unaudited)

Dear Shareholders:

Over the course of 2010, the international markets experienced several ups and downs driven by well-defined swings in investor sentiment. Optimism fueled strong market returns early in the year, as upbeat economic releases led investors to believe in the potential for a robust global recovery. However, sentiment shifted drastically in May and June as more negative economic news and issues related to Europe’s government debt problems led to notable stock market losses. In another swing, the markets rebounded in the fall amid better economic developments.

With foreign equities posting gains in the third and fourth quarters, the choppy year ended on a fairly strong note, and broad international equity indices have now produced back-to-back years of positive results. For the twelve months ending December 31, 2010, the Morgan Stanley Capital International (MSCI) All Country World Index excluding the U.S. (ACWIxUS) was up 11.15%.

The International Series had a 12.04% return during 2010, outpacing the MSCI ACWIxUS Index. More importantly, the Series continues to have a strong track record relative to the benchmark over the current international stock market cycle, April 1, 2003 through December 31, 2010, which includes both a bull and a bear market. Over this current cycle, the International Series has earned an annualized return of 14.68%, compared to the 13.75% return of the ACWIxUS Index.

Despite concerns about Europe’s sovereign debt crisis, the International Series maintained an overweight to Western Europe during the past year. We believe some of the healthier, core European countries have more favorable dynamics, and we have invested in what we consider to be top level companies that may benefit from sales outside the European area. In particular, throughout 2010 the International Series’ largest country weightings included Germany, France, and the United Kingdom. While the higher allocation to France versus the benchmark detracted from relative returns in 2010, selections in Germany were drivers of outperformance. Stock selections in Brazil, Norway, and India also contributed to positive relative results. However, an underweight to Japan versus the benchmark and a lack of exposure to Canada hurt relative returns.

In regards to exposure to Emerging Markets, the Series had a noticeable overweight to Brazil and a higher allocation to India versus the benchmark, as the Advisor sees attractive longer-term growth potential in these markets. In contrast, the Series had no direct exposure to China during 2010, which modestly aided relative returns. While China has experienced robust growth, we believe there are risks related to China’s bank lending boom, inflationary pressures, and policy direction.

While the markets were volatile during the past year, the slow growth outlook for the global economy remains intact. Many developed countries continue to struggle with high government debt problems, perhaps best epitomized by the 16-nation Eurozone, which recently had to bail out Ireland to try to prevent its debt and banking crisis from spreading to other vulnerable countries such as Spain, Italy, or Portugal. In contrast to the slower growth developed world, emerging markets such as Brazil, China, and India have better fundamentals for more robust growth. Yet such rapid expansion may present its own set of dilemmas. With low growth, low yields, and accommodative monetary policy in much of the rest of the world, money is flowing into these stronger areas in search of higher returns, thus introducing inflationary pressures. Many of these emerging markets have already enacted policies to address mounting inflation, and their actions imply they are prepared to take additional measures to control inflation and growth if needed, including tightening monetary policy and implementing capital restrictions. Ultimately, two distinct economic scenarios appear to be playing out: a muted growth and subdued inflationary environment in the developed world, and a stronger growth and rising inflationary environment in the emerging markets.

With noteworthy headwinds such as sovereign debt issues in Europe, high government debt burdens in the developed world, and inflationary pressures in the emerging markets, the global economy remains in an uneven, slow growth environment. As the markets fluctuated around this slow growth trend in 2010, Manning & Napier earned solid returns by staying

1

Management Discussion and Analysis (unaudited)

focused on country and industry fundamentals. We believe this investment approach will remain important as the market environment unfolds in 2011.

As always, we appreciate your business.

Sincerely,

Manning & Napier Advisors, Inc.

2

Performance Update as of December 31, 2010 (unaudited)

		Average Annual Total Returns As of December 31, 2010
	One   Year	Five     Year	Ten     Year	Since Inception1
Manning & Napier Fund, Inc. - International Series2	12.04%	6.71%	6.04%	9.29%
S&P 500 Total Return Index3	15.07%	2.30%	1.42%	8.35%
Morgan Stanley Capital International (MSCI) All Country
World Index ex U.S.3	11.15%	4.82%	5.54%	7.15%

The following graph compares the value of a $10,000 investment in the Manning & Napier Fund, Inc. - International Series for the ten years ended December 31, 2010 to the S&P 500 Total Return Index and the MSCI All Country World Index ex U.S.

¹ Performance numbers for the Series and the S&P 500 Total Return Index are calculated from August 27, 1992, the Series’ inception date. Prior to 2001, the MSCI All Country World Index ex U.S. only published month-end numbers; therefore, performance numbers for the Index are calculated from August 31, 1992.

² The Series’ performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of shares. The Series’ performance is historical and may not be indicative of future results. The performance returns shown are inclusive of the net expense ratio of the Series. For the year ended December 31, 2010, this net expense ratio was 1.15%. The gross expense ratio, which does not account for any voluntary or contractual waivers currently in effect, was 1.15% for the year ended December 31, 2010.

³ The S&P 500 Total Return Index is an unmanaged capitalization-weighted measure of 500 widely held common stocks listed on the New York Stock Exchange, American Stock Exchange and the Over-the-Counter market. The Index returns assume daily reinvestment of dividends. The MSCI All Country World Index ex U.S. is a free float-adjusted market capitalization weighted index that is designed to measure equity market performance in the global developed and emerging markets and consists of 47 developed and emerging market country indices outside the United States. The Index is denominated in U.S Dollars. The Index returns assume daily reinvestment of gross dividends (which do not account for foreign dividend taxation) from the inception of the Series (see Note 1 above) through December 31, 1998, as net returns were not available. Subsequent to December 31, 1998, the Index returns assume daily reinvestment of net dividends (thus accounting for foreign dividend taxation). Both Indices’ returns, unlike Series returns, do not reflect any fees or expenses.

3

Shareholder Expense Example (unaudited)

As a shareholder of the Series, you may incur two types of costs: (1) transaction costs and (2) ongoing costs, including management fees and other Series expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Series and to compare these costs with the ongoing costs of investing in other mutual funds.

The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (July 1, 2010 to December 31, 2010).

Actual Expenses

The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Series’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Series’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid during the period. You may use this information to compare the ongoing costs of investing in the Series and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.

	Beginning Account Value 7/1/10		Ending Account Value 12/31/10		Expenses  Paid During Period* 7/1/10-12/31/10
Actual		$1,000.00		$1,245.10		$6.62
Hypothetical
(5% return before expenses)		$1,000.00		$1,019.31		$5.96

*Expenses are equal to the Series’ annualized expense ratio (for the six-month period) of 1.17%, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). Expenses are based on the most recent fiscal half year; therefore, the expense ratio stated above may differ from the expense ratio stated in the financial highlights, which is based on one-year data. The Series’ total return would have been lower had certain expenses not been waived during the period.

4

Portfolio Composition as of December 31, 2010 (unaudited)

5

Investment Portfolio - December 31, 2010

	Shares		Value (Note 2)
COMMON STOCKS - 95.1%
Consumer Discretionary - 12.4%
Auto Components - 1.6%
Hankook Tire Co. Ltd. (South Korea)1		178,870	$	5,000,988
Automobiles - 2.0%
Hero Honda Motors Ltd. (India)1		42,450		1,887,276
Maruti Suzuki India Ltd. (India)1		44,940		1,428,024
Yamaha Motor Co. Ltd. (Japan)*1		196,000		3,180,637
				6,495,937
Hotels, Restaurants & Leisure - 0.1%
Indian Hotels Co. Ltd. (India)1		86,954		187,784
Household Durables - 3.3%
Corporacion Geo S.A.B. de C.V. - Class B (Mexico)*		783,010		2,872,093
LG Electronics, Inc. (South Korea)1		32,640		3,386,105
PDG Realty S.A. Empreendimentos e Participacoes (Brazil)		87,074		532,935
Rodobens Negocios Imobiliarios S.A. (Brazil)		367,000		3,689,898
				10,481,031
Media - 3.7%
Gestevision Telecinco S.A. (Spain)1		490,600		5,404,095
Reed Elsevier plc - ADR (United Kingdom)		60,311		2,024,037
Societe Television Francaise 1 (France)1		108,530		1,886,713
Wolters Kluwer N.V. (Netherlands)1		114,447		2,509,920
				11,824,765
Multiline Retail - 1.2%
PPR (France)1		22,930		3,650,726
Specialty Retail - 0.5%
Komeri Co. Ltd. (Japan)1		67,000		1,534,209
Total Consumer Discretionary				39,175,440
Consumer Staples - 16.3%
Beverages - 2.5%
Diageo plc (United Kingdom)1		162,810		3,016,542
Kirin Holdings Co. Ltd. (Japan)1		215,000		3,007,002
United Spirits Ltd. (India)1		57,400		1,878,791
				7,902,335
Food & Staples Retailing - 5.1%
Carrefour S.A. (France)1		165,082		6,806,753
Casino Guichard-Perrachon S.A. (France)1		34,170		3,334,110
President Chain Store Corp. (Taiwan)1		352,320		1,624,414
Tesco plc (United Kingdom)1		667,410		4,425,605
				16,190,882

6 The accompanying notes are an integral part of the financial statements.

Investment Portfolio - December 31, 2010

	Shares		Value (Note 2)
COMMON STOCKS (continued)
Consumer Staples (continued)
Food Products - 6.4%
Danone S.A. (France)1		40,012	$	2,515,840
IOI Corp. Berhad (Malaysia)1		560,800		1,056,007
Nestle S.A. (Switzerland)1		105,220		6,164,174
Suedzucker AG (Germany)1		90,690		2,422,012
Unilever plc - ADR (United Kingdom)		261,230		8,066,782
				20,224,815
Household Products - 1.9%
Hindustan Unilever Ltd. (India)1		250,540		1,752,937
Reckitt Benckiser Group plc (United Kingdom)1		78,270		4,305,999
				6,058,936
Personal Products - 0.4%
Kao Corp. (Japan)1		47,000		1,263,129
Total Consumer Staples				51,640,097
Energy - 4.2%
Oil, Gas & Consumable Fuels - 4.2%
Repsol YPF S.A. (Spain)1		56,900		1,593,406
Royal Dutch Shell plc - Class B (Netherlands)1		88,430		2,928,317
Royal Dutch Shell plc - Class B - ADR (Netherlands)		87,780		5,852,293
Total S.A. (France)1		56,580		3,013,594
Total Energy				13,387,610
Financials - 13.7%
Capital Markets - 0.8%
Daiwa Securities Group, Inc. (Japan)1		98,000		502,702
Nomura Holdings, Inc. (Japan)1		78,900		500,626
OSK Holdings Berhad (Malaysia)1		2,089,500		1,330,878
OSK Ventures International Berhad (Malaysia)*1		202,575		26,279
				2,360,485
Commercial Banks - 3.6%
BNP Paribas (France)1		28,330		1,804,242
The Chugoku Bank Ltd. (Japan)1		137,000		1,653,147
Credit Agricole S.A. (France)1		63,090		802,235
The Hachijuni Bank Ltd. (Japan)1		244,000		1,359,504
Hong Leong Financial Group Berhad (Malaysia)1		816,800		2,354,285
Mitsubishi UFJ Financial Group, Inc. (Japan)1		170,000		916,661
Royal Bank of Scotland Group plc (United Kingdom)*1		277,092		170,167
Societe Generale (France)1		15,410		829,163
The Sumitomo Trust & Banking Co. Ltd. (Japan)1		247,000		1,547,368
				11,436,772

The accompanying notes are an integral part of the financial statements. 7

Investment Portfolio - December 31, 2010

	Shares		Value (Note 2)
COMMON STOCKS (continued)
Financials (continued)
Diversified Financial Services - 0.2%
ING Groep N.V. (Netherlands)*1		65,395	$	637,977
Insurance - 6.6%
Allianz SE (Germany)1		40,870		4,855,998
Amil Participacoes S.A. (Brazil)		350,000		3,753,012
AXA S.A. (France)1		56,372		938,337
Mapfre S.A. (Spain)1		885,000		2,467,072
Muenchener Rueckversicherungs-Gesellschaft AG (MunichRe) (Germany)1		40,610		6,150,576
Zurich Financial Services AG (Switzerland)1		10,500		2,719,151
				20,884,146
Real Estate Investment Trusts (REITS) - 1.4%
Alstria Office REIT AG (Germany)1		313,480		4,398,514
Real Estate Management & Development - 0.0%**
OSK Property Holdings Berhad (Malaysia)1		243,091		52,820
Thrifts & Mortgage Finance - 1.1%
Aareal Bank AG (Germany)*1		115,790		3,521,499
Total Financials				43,292,213
Health Care - 11.4%
Health Care Equipment & Supplies - 1.1%
Straumann Holding AG (Switzerland)1		15,476		3,544,085
Health Care Providers & Services - 2.4%
Odontoprev S.A. (Brazil)		492,000		7,436,313
Pharmaceuticals - 7.9%
AstraZeneca plc (United Kingdom)1		27,960		1,274,259
AstraZeneca plc - ADR (United Kingdom)		46,350		2,140,908
Bayer AG (Germany)1		100,000		7,412,735
GlaxoSmithKline plc (United Kingdom)1		172,980		3,354,567
Novartis AG - ADR (Switzerland)		49,000		2,888,550
Sanofi-Aventis S.A. (France)1		26,423		1,694,000
Shire plc (Ireland)1		195,160		4,705,715
Takeda Pharmaceutical Co. Ltd. (Japan)1		34,900		1,714,491
				25,185,225
Total Health Care				36,165,623
Industrials - 18.0%
Airlines - 1.4%
Deutsche Lufthansa AG (Germany)*1		206,580		4,493,679
Commercial Services & Supplies - 3.0%
Taiwan Secom Co. Ltd. (Taiwan)1		777,210		1,474,095

8 The accompanying notes are an integral part of the financial statements.

Investment Portfolio - December 31, 2010

	Shares		Value (Note 2)
COMMON STOCKS (continued)
Industrials (continued)
Commercial Services & Supplies (continued)
Tomra Systems ASA (Norway)1		1,189,080	$	7,916,362
				9,390,457
Construction & Engineering - 0.6%
Larsen & Toubro Ltd. (India)1		41,270		1,826,546
Electrical Equipment - 5.1%
ABB Ltd. (Asea Brown Boveri) - ADR (Switzerland)*		138,000		3,098,100
Alstom S.A. (France)1		97,560		4,676,167
Bharat Heavy Electricals Ltd. (India)1		30,080		1,562,897
Schneider Electric S.A. (France)1		26,590		3,986,800
Teco Electric and Machinery Co. Ltd. (Taiwan)1		4,084,000		2,730,155
				16,054,119
Industrial Conglomerates - 3.6%
Siemens AG (Germany)1		92,300		11,433,629
Machinery - 0.9%
FANUC Corp. (Japan)1		19,400		2,965,413
Road & Rail - 2.0%
All America Latina Logistica S.A. (Brazil)		722,000		6,524,096
Transportation Infrastructure - 1.4%
Malaysia Airports Holdings Berhad (Malaysia)1		2,148,700		4,376,143
Total Industrials				57,064,082
Information Technology - 8.0%
Communications Equipment - 0.4%
D-Link Corp. (Taiwan)1		1,120,606		1,152,616
Electronic Equipment, Instruments & Components - 2.2%
Hitachi Ltd. (Japan)1		662,000		3,514,670
Keyence Corp. (Japan)1		6,845		1,975,023
Yageo Corp. (Taiwan)1		2,931,000		1,441,394
				6,931,087
IT Services - 0.8%
Cap Gemini S.A. (France)1		56,320		2,632,940
Semiconductors & Semiconductor Equipment - 3.4%
Infineon Technologies AG (Germany)*1		770,000		7,177,394
Taiwan Semiconductor Manufacturing Co. Ltd. - ADR (Taiwan)		275,315		3,452,450
				10,629,844
Software - 1.2%
SAP AG (Germany)1		76,970		3,925,675
Total Information Technology				25,272,162

The accompanying notes are an integral part of the financial statements. 9

Investment Portfolio - December 31, 2010

	Shares		Value (Note 2)
COMMON STOCKS (continued)
Materials - 1.9%
Chemicals - 1.2%
Arkema S.A. (France)1		1,229	$	88,627
BASF SE (Germany)1		47,000		3,750,740
				3,839,367
Construction Materials - 0.7%
Taiwan Cement Corp. (Taiwan)1		1,899,827		2,136,661
Taiwan Cement Corp. (Taiwan) - Rights2		184,663		36,734
				2,173,395
Total Materials				6,012,762
Telecommunication Services - 5.3%
Diversified Telecommunication Services - 3.9%
France Telecom S.A. (France)1		155,920		3,262,760
France Telecom S.A. - ADR (France)		38,800		817,904
Swisscom AG - ADR (Switzerland)3		106,400		4,686,920
Telefonica S.A. - ADR (Spain)		22,850		1,563,397
Telenor ASA - ADR (Norway)3		45,480		2,223,972
				12,554,953
Wireless Telecommunication Services - 1.4%
Digi.Com Berhad (Malaysia)1		284,200		2,267,333
SK Telecom Co. Ltd. - ADR (South Korea)		114,190		2,127,360
				4,394,693
Total Telecommunication Services				16,949,646
Utilities - 3.9%
Electric Utilities - 1.6%
E.ON AG (Germany)1		164,441		5,021,838
Multi-Utilities - 1.3%
GDF Suez (France)1		51,850		1,862,202
National Grid plc (United Kingdom)1		286,530		2,476,545
				4,338,747
Water Utilities - 1.0%
Cia de Saneamento de Minas Gerais - Copasa MG (Brazil)		182,000		3,146,627
Total Utilities				12,507,212
TOTAL COMMON STOCKS (Identified Cost $255,475,986)				301,466,847

10 The accompanying notes are an integral part of the financial statements.

Investment Portfolio - December 31, 2010

	Shares		Value (Note 2)
SHORT-TERM INVESTMENTS - 4.9%
Dreyfus Cash Management, Inc. - Institutional Shares4, 0.14%, (Identified Cost $15,625,574)		15,625,574	$	15,625,574
TOTAL INVESTMENTS - 100.0% (Identified Cost $271,101,560)				317,092,421
OTHER ASSETS, LESS LIABILITIES - 0.0%**				106,081
NET ASSETS - 100%			$	317,198,502

ADR - American Depository Receipt

*Non-income producing security

**Less than 0.1%

¹International Fair Value factor from pricing service was applied.

²Security has been valued at fair value (see Note 2 to the financial statements).

³Latest quoted sales price is not available and latest quoted bid price was used to value the security.

⁴Rate shown is the current yield as of December 31, 2010.

The Series’ portfolio holds, as a percentage of net assets, greater than 10% in the following countries: Germany - 20.4%; France - 14.1%.

The accompanying notes are an integral part of the financial statements. 11

Statement of Assets & Liabilities

December 31, 2010

ASSETS:
Investments, at value (identified cost $271,101,560) (Note 2)	$317,092,421
Foreign currency, at value (cost $41,729)	41,810
Foreign tax reclaims receivable	361,651
Receivable for fund shares sold	306,281
Dividends receivable	145,768
TOTAL ASSETS	317,947,931
LIABILITIES:
Accrued management fees (Note 3)	263,429
Accrued fund accounting and administration fees (Note 3)	9,853
Accrued transfer agent fees (Note 3)	2,263
Accrued Chief Compliance Officer service fees (Note 3)	245
Payable for fund shares repurchased	371,959
Accrued custodian fees	43,120
Accrued capital gains tax payable (Note 2)	211
Other payables and accrued expenses	58,349
TOTAL LIABILITIES	749,429
TOTAL NET ASSETS	$317,198,502
NET ASSETS CONSIST OF:
Capital stock	$      358,418
Additional paid-in-capital	272,946,505
Distributions in excess of net investment income	(2,564,313	)
Accumulated net realized gain on investments, foreign currency and translation of other assets and liabilities	446,977
Net unrealized appreciation (depreciation) on investments (net of accrued capital gains tax of $211), foreign currency and translation of other assets and liabilities	46,010,915
TOTAL NET ASSETS	$317,198,502
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER SHARE - Class A ($317,198,502/35,841,758 shares)	$             8.85

12 The accompanying notes are an integral part of the financial statements.

Statement of Operations

For the Year Ended December 31, 2010

INVESTMENT INCOME:
Dividends (net of foreign taxes withheld, $862,092)	$  7,769,347
EXPENSES:
Management fees (Note 3)	2,747,895
Fund accounting and administration fees (Note 3)	66,435
Transfer agent fees (Note 3)	13,498
Directors’ fees (Note 3)	11,355
Chief Compliance Officer service fees (Note 3)	2,631
Custodian fees	190,558
Miscellaneous	125,304
Total Expenses	3,157,676
Less reduction of expenses (Note 3)	(758	)
Net Expenses	3,156,918
NET INVESTMENT INCOME	4,612,429
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY:
Net realized gain (loss) on-
Investments (net of foreign capital gains tax of $192,697) (Note 2)	10,981,265
Foreign currency, and translation of other assets and liabilities	(194,903	)
	10,786,362
Net change in unrealized appreciation (depreciation) on-
Investments (net of change in accrued capital gains tax of $(34,045))	18,846,538
Foreign currency, and translation of other assets and liabilities	14,719
	18,861,257
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND FOREIGN CURRENCY	29,647,619
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$34,260,048

The accompanying notes are an integral part of the financial statements. 13

Statements of Changes in Net Assets

	For the Year Ended 12/31/10			For the Year Ended 12/31/09
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income	$	4,612,429		$	3,790,908
Net realized gain on investments and foreign currency		10,786,362			8,560,500
Net change in unrealized appreciation (depreciation) on investments (net of change in accrued capital gains tax of $(34,045) and $34,256, respectively) and foreign currency		18,861,257			48,051,482
Net increase from operations		34,260,048			60,402,890
DISTRIBUTIONS TO SHAREHOLDERS (Note 8):
From net investment income		(6,327,558	)		(4,479,987	)
From net realized gain on investments		(11,801,674	)		(7,507,773	)
Total distributions to shareholders		(18,129,232	)		(11,987,760	)
CAPITAL STOCK ISSUED AND REPURCHASED:
Net increase from capital share transactions (Note 5)		33,967,286			36,412,740
Net increase in net assets		50,098,102			84,827,870
NET ASSETS:
Beginning of year		267,100,400			182,272,530
End of year (including distributions in excess of net investment income of $2,564,313 and $461,584, respectively)	$	317,198,502		$	267,100,400

14 The accompanying notes are an integral part of the financial statements.

Financial Highlights

			For the Years Ended
	12/31/10		12/31/09		12/31/08		12/31/07		12/31/06
Per share data (for a share outstanding through out each year):
Net asset value - Beginning of year		$8.39		$6.57		$10.87		$9.84		$9.90
Income (loss) from investment operations:
Net investment income		0.141		0.141		0.22		0.15		0.15
Net realized and unrealized gain (loss) on investments		0.86		2.10		(3.82)		1.12		2.01
Total from investment operations		1.00		2.24		(3.60)		1.27		2.16
Less distributions to shareholders:
From net investment income		(0.19)		(0.16)		(0.21)		(0.14)		(0.15)
From net realized gain on investments		(0.35)		(0.26)		(0.49)		(0.10)		(2.07)
Total distributions to shareholders		(0.54)		(0.42)		(0.70)		(0.24)		(2.22)
Net asset value - End of year		$8.85		$8.39		$6.57		$10.87		$9.84
Net assets - End of year (000’s omitted)		$317,199		$267,100		$182,273		$270,080		$215,981
Total return2		12.04%		34.23%		(33.25%)		13.01%		21.96%
Ratios (to average net assets)/
Supplemental Data:
Expenses*		1.15%		1.15%		1.15%		1.16%		1.18%
Net investment income		1.68%		1.90%		2.49%		1.47%		1.39%
Portfolio turnover		13%		17%		9%		20%		30%
*The investment advisor did not impose all of its management fees, CCO fees and fund accounting and transfer agent fees, and other fees in some years and in some years paid a portion of the Series’ expenses. If these expenses had been incurred by the Series, the expense ratio (to average net assets) would have been increased by the following amounts:
		0.00%3		0.00%3		N/A		N/A		N/A

¹Calculated based on average shares outstanding during the year.

²Represents aggregate total return for the periods indicated, and assumes reinvestment of all distributions. Total return would have been lower had certain expenses not been waived or reimbursed during the periods. Periods less than one year are not annualized.

³Less than 0.01%.

The accompanying notes are an integral part of the financial statements. 15

Notes to Financial Statements

1. ORGANIZATION

International Series (the “Series”) is a no-load diversified series of Manning & Napier Fund, Inc. (the “Fund”). The Fund is organized in Maryland and is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company.

The Series’ investment objective is to provide long-term growth by investing principally in the common stocks of companies located outside the United States.

The Fund’s Advisor is Manning & Napier Advisors, Inc. (the “Advisor”). Shares of the Series are offered to investors, clients and employees of the Advisor and its affiliates. The Series resumed offering shares directly to investors on May 18, 2004, as it had done previously from time to time. The total authorized capital stock of the Fund consists of 10.0 billion shares of common stock each having a par value of $0.01. As of December 31, 2010, 6.2 billion shares have been designated in total among 29 series, of which 100 million have been designated as International Series Class A common stock.

2. SIGNIFICANT ACCOUNTING POLICIES

Security Valuation

Portfolio securities, including domestic equities, foreign equities, warrants and options, listed on an exchange other than the NASDAQ National Market System are valued at the latest quoted sales price of the exchange on which the security is primarily traded. Securities not traded on valuation date or securities not listed on an exchange are valued at the latest quoted bid price provided by the Fund’s pricing service. Securities listed on the NASDAQ National Market System are valued in accordance with the NASDAQ Official Closing Price.

Short-term investments that mature in sixty days or less are valued at amortized cost, which approximates market value. Investments in open-end investment companies are valued at their net asset value per share on valuation date.

Volume and level of activity in established markets for an asset or liability are evaluated to determine whether recent transactions and quoted prices are determinative of fair value. Where there have been significant decreases in volume and level of activity, further analysis and adjustment may be necessary to estimate fair value. The Series measures fair value in these instances by the use of inputs and valuation techniques which may be based upon current market prices of securities that are comparable in coupon, rating, maturity and industry and/or expectation of future cash flows. As a result of trading in relatively thin markets and/or markets that experience significant volatility, the prices used by the Series to value these securities may differ from the value that would be realized if these securities were sold, and the differences could be material.

Securities for which representative valuations or prices are not available from the Fund’s pricing service may be valued at fair value. Due to the inherent uncertainty of valuations of such securities, the fair value may differ significantly from the values that would have been used had a ready market for such securities existed. If trading or events occurring after the close of the principal market in which securities are traded are expected to materially affect the value of those securities, then they may be valued at their fair value, taking this trading or these events into account. Fair value is determined in good faith by the Advisor under procedures approved by and under the general supervision and responsibility of the Fund’s Board of Directors (the “Board”). In accordance with the procedures approved by the Board, the Series applies fair value pricing on a daily basis except for North American, Central American, South American and Caribbean equity securities. Fair valuing of securities is determined with the assistance of a pricing service using calculations or factors based on indices of domestic securities and other appropriate indicators, such as prices of relevant American Depository Receipts and futures contracts, to adjust local market prices for subsequent movements through the time the Series calculates its net asset value. The value of securities used for the net asset value calculation under the procedures may differ from published prices for the same securities. It is the Fund’s

16

Notes to Financial Statements

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

Security Valuation (continued)

policy to classify each foreign equity security, except for those in the regions noted above, as Level 2 securities due to the fact the pricing service evaluated what factor was applied to the calculated end of day market price.

Various inputs are used in determining the value of the Series’ assets or liabilities carried at market value. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical assets and liabilities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.). Level 3 includes significant unobservable inputs (including the Series’ own assumptions in determining the fair value of investments.) The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

The following is a summary of the valuation levels used for major security types as of December 31, 2010 in valuing the Series’ assets or liabilities carried at market value:

Description	Total		Level 1		Level 2		Level 3
Assets:
Equity securities*	$	301,466,847	$	59,986,755	$	241,443,358	$	36,734
Preferred securities		—		—		—		—
Debt securities:
Mutual funds		15,625,574		15,625,574		—		—
Other financial instruments**		—		—		—		—
Total assets		317,092,421		75,612,329		241,443,358		36,734
Liabilities:
Other financial instruments**		—		—		—		—
Total liabilities:		—		—		—		—
Total	$	317,092,421	$	75,612,329	$	241,443,358	$	36,734

The following table is a reconciliation of Level 3 investments for which significant unobservable inputs were used to determine fair value:

Level 3 Reconciliation	Equity Securities
Balance as of December 31, 2009 (market value)	$	—
Accrued discounts/premiums		—
Change in unrealized appreciation/depreciation ***		36,734
Net realized gain		—
Net purchases/sales		—
Balance as of December 31, 2010 (market value)	$	36,734

*Includes common stock, warrants and rights. Please see the Investment Portfolio for industry classification and for securities where a latest quoted sales price is not available and the latest quoted bid price was used to value the security or foreign securities that had an International Fair Value factor applied from the pricing service. Such securities are included in Level 2 in the table above.

**Other financial instruments are derivative instruments not reflected in the Investment Portfolio, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument. As of December 31, 2010, the Series did not hold any derivative instruments.

17

Notes to Financial Statements

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

Security Valuation (continued)

***The change in unrealized appreciation (depreciation) on securities still held at December 31, 2010 was $36,734, which is included in the related net change in unrealized appreciation/depreciation on the Statement of Operations.

The Fund’s policy is to recognize transfers in and transfers out of the valuation levels as of the beginning of the reporting period. During the year ended December 31, 2010, the Fund had a significant amount of foreign equity securities transfer from Level 1 to Level 2 due to the implementation of new international fair value pricing procedures. The following is a summary of the foreign equity securities that transferred from Level 1 to Level 2:

Total # Securities Level 1 at beginning and Level 2 at end of period	Total  Market Value Beginning of period		Total Market Value End of period		Change in Market Value
74	$	187,697,217	$	204,537,518	$	16,840,301

Additional disclosure surrounding the activity in Level 3 fair value measurement will be effective for fiscal years beginning after December 15, 2010. Management has concluded that this will not have a material impact on the Series’ financial statements.

Security Transactions, Investment Income and Expenses

Security transactions are accounted for on trade date. Dividend income is recorded on the ex-dividend date, except that if the ex-dividend date has passed, certain dividends from foreign securities are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends, if any, are recorded at the fair market value of the securities received. Interest income, including amortization of premium and accretion of discounts using the effective interest method, is earned from settlement date and accrued daily.

Expenses are recorded on an accrual basis. Most expenses of the Fund can be attributed to a specific series. Expenses which cannot be directly attributed are apportioned among the series in the Fund in such a manner as deemed equitable by the Fund’s Board, taking into consideration, among other things, the nature and type of expense.

The Series uses the identified cost method for determining realized gain or loss on investments for both financial statement and federal income tax reporting purposes.

Foreign Currency Translation

The books and records of the Series are maintained in U.S. dollars. Foreign currencies, investments and other assets and liabilities are translated into U.S. dollars at the current exchange rates. Purchases and sales of investment securities and income and expenses are translated on the respective dates of such transactions. The Series does not isolate realized and unrealized gains and losses attributable to changes in the exchange rates from gains and losses that arise from changes in the market value of investments. Such fluctuations are included with net realized and unrealized gain or loss on investments. Net realized foreign currency gains and losses represent foreign currency gains and losses between trade date and settlement date on securities transactions, gains and losses on disposition of foreign currencies and the difference between the amount of income and foreign withholding taxes recorded on the books of the Series and the amounts actually received or paid.

Federal Taxes

The Series’ policy is to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies. The Series is not subject to federal income tax or excise tax to the extent that the Series distributes to

18

Notes to Financial Statements

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

Federal Taxes (continued)

shareholders each year its taxable income, including any net realized gains on investments, in accordance with requirements of the Internal Revenue Code. Accordingly, no provision for federal income tax or excise tax has been made in the financial statements.

Management evaluates its tax positions to determine if the tax positions taken meet the minimum recognition threshold in connection with accounting for uncertainties in income tax positions taken or expected to be taken for the purposes of measuring and recognizing tax liabilities in the financial statements. Recognition of tax benefits of an uncertain tax position is required only when the position is “more likely than not” to be sustained assuming examination by taxing authorities. At December 31, 2010, the Series has recorded no liability for net unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken in future tax returns.

The Series files income tax returns in the U.S. federal jurisdiction, various states and foreign jurisdictions, as required. No income tax returns are currently under investigation. The statute of limitations on the Series’ tax returns remains open for the years ended December 31, 2007 through December 31, 2010. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.

Additionally, based on the Fund’s understanding of the tax rules and rates related to income, gains and transactions for foreign jurisdictions in which it invests, the Series will provide for foreign taxes, and where appropriate, deferred foreign tax.

Distributions of Income and Gains

Distributions to shareholders of net investment income and net realized gains are made annually. An additional distribution may be necessary to avoid taxation of the Series. Distributions are recorded on the ex-dividend date.

Indemnifications

The Fund’s organizational documents provide former and current directors and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund’s maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.

Other

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.

3. TRANSACTIONS WITH AFFILIATES

The Fund has an Investment Advisory Agreement (the “Agreement”) with the Advisor, for which the Series pays a fee, computed daily and payable monthly, at an annual rate of 1.00% of the Series’ average daily net assets.

Under the Agreement, personnel of the Advisor provide the Series with advice and assistance in the choice of investments and the execution of securities transactions, and otherwise maintain the Series’ organization. The Advisor also provides the Fund with necessary office space and fund administration and support services. The salaries of all officers of the Fund (except a percentage of the Fund’s Chief Compliance Officer’s salary, which is paid by the Fund), and of all Directors who are “affiliated persons” of the Fund, or of the Advisor, and all personnel of the Fund,

19

Notes to Financial Statements

3. TRANSACTIONS WITH AFFILIATES (continued)

or of the Advisor, performing services relating to research, statistical and investment activities, are paid by the Advisor. Each “non-affiliated” Director receives an annual stipend, which is allocated among all the active series of the Fund. In addition, these Directors also receive a fee per Board meeting attended plus a fee for each committee meeting attended.

For the year ended December 31, 2010, the Advisor voluntarily waived fees of $758, which is included as a reduction of expenses on the Statement of Operations. The Advisor is not eligible to recoup any expense that has been waived or reimbursed in prior years.

Manning & Napier Investor Services, Inc., a registered broker-dealer affiliate of the Advisor, acts as distributor for the Fund’s shares. The services of Manning & Napier Investor Services, Inc. are provided at no additional cost to the Series.

The Advisor has agreements with PNC Global Investment Servicing (U.S.) Inc. (“PNCGIS”) under which PNCGIS serves as sub-accountant services agent and sub-transfer agent. The Fund pays the Advisor an annual fee related to fund accounting and administration of 0.0175% on the first $3 billion of average daily net assets (excluding Target Series); 0.015% on the next $3 billion of average daily net assets (excluding Target Series); and 0.01% of the average daily net assets in excess of $6 billion (excluding Target Series); plus a base fee of $25,500 per Series. Transfer Agent fees are charged to the Fund on a per account basis. Additionally, certain transaction- and cusip-based fees and out-of-pocket expenses, including charges for reporting relating to the Fund’s compliance program, are charged.

Effective July 1, 2010, PNCGIS was sold to The Bank of New York Mellon Corporation, the Series’ custodian. At the close of the sale, PNCGIS changed its name to BNY Mellon Investment Servicing (U.S.) Inc. (“BNY”).

Expenses not directly attributable to a Series are allocated based on each Series’ relative net assets or number of accounts, depending on the expense.

4. PURCHASES AND SALES OF SECURITIES

For the year ended December 31, 2010, purchases and sales of securities, other than U.S. Government securities and short-term securities, were $47,150,818 and $34,149,837, respectively. There were no purchases or sales of U.S. Government securities.

5. CAPITAL STOCK TRANSACTIONS

Transactions in shares of International Series were:

	For the Year Ended 12/31/10						For the Year Ended 12/31/09
	Shares			Amount			Shares			Amount
Sold		4,885,983		$	40,773,050			6,129,853		$	48,093,794
Reinvested		2,043,894			17,734,979			1,415,130			11,706,962
Repurchased		(2,930,271	)		(24,540,743	)		(3,449,201	)		(23,388,016	)
Total		3,999,606		$	33,967,286			4,095,782		$	36,412,740

Substantially all of the Series’ shares represent investments by fiduciary accounts over which the Advisor has sole investment discretion.

20

Notes to Financial Statements

6. FINANCIAL INSTRUMENTS

The Series may trade in instruments including written and purchased options, forward foreign currency exchange contracts and futures contracts and other derivatives in the normal course of investing activities to assist in managing exposure to various market risks. Investments in these instruments may subject the Series to various elements of risk, which may involve, to a varying degree, elements of risk in excess of the amounts recognized for financial statement purposes. These risks include: the risk that changes in the value of a derivative may not correlate perfectly with the underlying asset, rate or index, counterparty credit risk related to over the counter derivatives counterparties’ failure to perform under contract terms, liquidity risk related to the lack of a liquid market for these contracts allowing the fund to close out its position(s) and documentation risk relating to disagreement over contract terms. No such investments were held by the Series during the year ended December 31, 2010.

7. FOREIGN SECURITIES

Investing in securities of foreign companies and foreign governments involves special risks and considerations not typically associated with investing in securities of domestic companies and the U.S. Government. These risks include revaluation of currencies and future adverse political and economic developments. Moreover, securities of foreign companies and foreign governments and their markets may be less liquid and their prices more volatile than those of comparable domestic companies and the U.S. Government.

8. FEDERAL INCOME TAX INFORMATION

The amount and characterization of certain income and capital gains to be distributed are determined in accordance with federal income tax regulations, which may differ from accounting principles generally accepted in the United States of America. These differences are primarily due to differing book and tax treatments in the timing of the recognition of net investment income or gains and losses, including foreign currency gains and losses, post-October losses, foreign capital gains taxes and investments in passive foreign investment companies (PFICs). The Series may periodically make reclassifications among its capital accounts to reflect income and gains available for distribution (or available capital loss carryovers) under income tax regulations without impacting the Series’ net asset value. Any such reclassifications are not reflected in the financial highlights.

The tax character of distributions paid were as follows:

	For the Year Ended 12/31/10		For the Year Ended 12/31/09
Ordinary income	$	12,805,548	$	11,987,760
Long-term capital gains		5,323,684		—

For the year ended December 31, 2010, the Series elected to defer $16,001 of currency losses, attributable to post-October losses.

At December 31, 2010, the tax basis of distributable earnings and the net unrealized appreciation based on the identified cost of investments for federal income tax purposes were as follows:

Cost for federal income tax purposes	$	273,894,572
Unrealized appreciation	$	65,409,200
Unrealized depreciation		(22,211,351	)
Net unrealized appreciation	$	43,197,849
Undistributed ordinary income		691,677

21

Report of Independent Registered Public Accounting Firm

To the Board of Directors of Manning & Napier Fund, Inc. and Shareholders of International Series:

In our opinion, the accompanying statement of assets and liabilities, including the investment portfolio, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the International Series (a series of Manning & Napier Fund, Inc., hereafter referred to as the “Series”) at December 31, 2010, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Series’ management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2010 by correspondence with the custodian, provide a reasonable basis for our opinion.

New York, New York

February 22, 2011

22

Supplemental Tax Information (unaudited)

All designations are based on financial information available as of the date of this annual report and, accordingly are subject to change.

For federal income tax purposes, the Series designates for the current fiscal year $7,010,585 or, if different, the maximum amount allowable under the tax law as qualified dividend income.

Pursuant to Section 852 of the Internal Revenue Code, as amended, the Series hereby designates $5,323,684 as capital gains for its taxable year ended December 31, 2010, or if different, the maximum allowable under tax law.

23

Renewal of Investment Advisory Agreement (unaudited)

At the Manning & Napier Fund, Inc. (the “Fund”) Board of Directors’ (the “Board”) meeting, held on November 17, 2010, the Investment Advisory Agreement (the “Agreement”) between the Fund and Manning & Napier Advisors, Inc. (the “Advisor”) was reviewed by the Board for renewal. In connection with the decision whether to renew the Agreement, a variety of material was prepared for and reviewed by the Board.

Representatives of the Advisor attended the meeting and presented additional oral and written information to the Board to assist the Board in its considerations. The discussion immediately below outlines the materials and information presented to the Board in connection with the Board’s 2010 Annual Review of the Agreement and the conclusions made by the Directors when determining to continue the Agreement.

• The Board considered the services provided by the Advisor under the Agreement including, among others: deciding what securities to purchase and sell for each Series; arranging for the purchase and sale of such securities by placing orders with broker-dealers; administering the affairs of the Fund (including the books and records of the Fund not maintained by third party service providers such as the custodian or sub-transfer agent); arranging for the insurance coverage for the Fund; and supervising the preparation of tax returns, SEC filings (including registration statements) and reports to shareholders for the Fund. The Board also considered the nature and quality of such services provided under the Agreement in light of the Advisor’s services provided to the Fund for 24 years. The Board discussed the quality of these services with representatives from the Advisor and concluded that the Advisor was performing its services to the Fund required under the Agreement in a reasonable manner.

• The Board considered the investment performance of the various Series of the Fund. The investment performance for each Series was reviewed on a cumulative basis since inception and on a one year basis. In addition, annualized performance for the following time periods was considered: inception, three year, five year, ten year, and current market cycle. A market cycle includes periods of both rising and falling markets. Returns for established benchmark indices for each Series were provided for each time period. The Board noted that the various Series were competitive against their respective benchmarks and/or peer groups over various time periods, but in particular over the full market cycle period relevant for the Series. In addition, the Board considered at the meeting (and considers on a quarterly basis) a peer group performance analysis consisting of Morningstar universes of mutual funds with similar investment objectives. The Board discussed the performance with representatives from the Advisor and concluded that the investment performance of each of the Fund’s Series was reasonable based on the Fund’s actual performance and comparative performance, especially performance over the current market cycle.

• The Board considered the costs of the Advisor’s services and the profits of the Advisor as they relate to the Advisor’s services to the Fund under the Agreement. In reviewing the Advisor’s costs and profits, the Board discussed the Advisor’s revenues generated from the Fund (on both an actual and adjusted basis) and its expenses associated with providing the services under the Agreement. In addition, the Board reviewed the Advisor’s expenses associated with Fund activities outside of the Agreement (such as expense reimbursements pursuant to expense caps and payments made by the Advisor to third party platforms on which shares of the Fund are available for purchase). It was noted by representatives of the Advisor that 11 of the 27 active Series of the Fund are currently experiencing expenses above the capped expense ratios. After discussing the above costs and profits, the Board concluded that the Advisor’s profitability relating to its services provided under the Agreement was reasonable.

• The Board considered the fees and expenses of the various Series of the Fund. The Advisor presented the advisory fees and total expenses for each Series, including the advisory fee adjusted for any expense waivers or reimbursements (either contractual or voluntary) paid by the Advisor. The advisory fees and expense ratios of each Series were compared to an average (on both a mean and median basis) of similar funds as disclosed on the Morningstar database. Representatives of the Advisor discussed with the Board the levels of its advisory

24

Renewal of Investment Advisory Agreement (unaudited)

fee for each Series of the Fund and as compared to the median and mean advisory fees for similar funds as listed on Morningstar. Expense ratios for every Series, except the Pro-Blend’s Class R and Class C, and Target Class R and Class C, are currently below the median and mean for similar funds as listed on Morningstar. Based on their review of the information provided, the Board concluded that the fees and expenses of each Series of the Fund were reasonable on a comparative basis.

• The Board also considered the other benefits the Advisor derives from its relationship with the Fund. Such other benefits include certain research products provided by soft dollars. Given the level of soft dollar transactions involving the Fund, the Board concluded that these additional benefits to the Advisor were reasonable.

• In addition to the factors described above, the Board considered the Advisor’s personnel, investment strategies, policies and procedures relating to compliance with personal securities transactions, and reputation, expertise and resources in domestic and foreign financial markets. The Board concluded that these factors support the conclusion that the Advisor performs its services in a reasonable manner.

• The Board did not consider economies of scale at this time because of the multiple uses of the Fund (for the Advisor’s discretionary investment account clients in addition to direct investors), the current profitability of the Advisor’s services to the Fund under the Agreement, and the overall size of the Fund complex.

Based on the Board’s deliberations and their evaluation of the information described above, the Board, including a majority of Directors that are not “interested persons” as defined in the Investment Company Act of 1940, concluded that the compensation under the Agreement was fair and reasonable in light of the services and expenses and such other matters as the Directors considered to be relevant in the exercise of their reasonable judgment. Accordingly, the Board approved the renewal of the Agreement. In the course of their deliberations, the Directors did not identify any particular information that was all important or controlling.

25

Directors’ and Officers’ Information (unaudited)

The Statement of Additional Information provides additional information about the Fund’s directors and officers and can be obtained without charge by calling 1-800-466-3863, at www.manningnapieradvisors.com, or on the EDGAR Database on the SEC Internet web site (http:// www.sec.gov). The following chart shows certain information about the Fund’s officers and directors, including their principal occupations during the last five years. Unless specific dates are provided, the individuals have held the listed positions for longer than five years.

INTERESTED DIRECTOR/OFFICER
Name: Address:	B. Reuben Auspitz* 290 Woodcliff Drive Fairport, NY 14450
Age:	63
Current Position(s) Held with Fund:	Principal Executive Officer, President, Chairman & Director
Term of Office1 & Length of Time Served:	Indefinite - Director since 1984; Vice President 1984 - 2003; President
	since 2004; Principal Executive Officer since 2002
Principal Occupation(s) During Past 5 Years:	Executive Vice President; Executive Group Member**; Chief Compliance Officer since 2004; Vice Chairman since June 2010; Co-Executive Director from 2003-2010 - Manning & Napier Advisors, Inc. President; Director - Manning & Napier Investor Services, Inc. Holds or has held one or more of the following titles for various subsidiaries and affiliates: President, Vice President, Director, Chairman, Treasurer, Chief Compliance Officer or Member.
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
INDEPENDENT DIRECTORS
Name:	Paul A. Brooke
Address:	290 Woodcliff Drive Fairport, NY 14450
Age:	65
Current Position(s) Held with Fund:	Director, Audit Committee Member, Governance & Nominating Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 2007
Principal Occupation(s) During Past 5 Years:	Chairman & CEO, Alsius Corp. (investments); Managing Member, PMSV Holdings LLC (investments)
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	Incyte Corp. (2000-present) ViroPharma, Inc. (2000-present) HLTH Corp. (2000-present) Cheyne Capital International (2000-present) MPM Bio-equities (2000-present) GMP Companies (2000-present) HoustonPharma (2000-present)
Name:	Richard M. Hurwitz
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	47
Current Position(s) Held with Fund:	Director, Audit Committee Member, Governance & Nominating Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 2009
Principal Occupation(s) During Past 5 Years:	Chief Executive Officer, Pictometry International Corp. since August 2010 (provider of georeferenced, aerial image libraries and related software) Managing Partner (2006-July 2010) - Aegis Investment Partners, LLC (investments); Founder and Managing Partner (2004-2005) - Village Markets, LLC (groceries)
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	Pictometry International Corp. (2000-2010)
	Pioneering Technologies (2006-2009)
	Vensearch Capital Corp. (2003-2007)

26

Directors’ and Officers’ Information (unaudited)

INDEPENDENT DIRECTORS (continued)
Name:	Stephen B. Ashley
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	70
Current Position(s) Held with Fund:	Director, Audit Committee Member, Governance & Nominating Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 1996
Principal Occupation(s) During Past 5 Years:	Chairman, Director, President & Chief Executive Officer, The Ashley Group (property management and investment). Chairman (non-executive) 2004-2008; Director 1995-2008 - Fannie Mae (mortgage)
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	The Ashley Group (1995-2008)
	Genesee Corporation (1987-2007)
Name:	Peter L. Faber
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	72
Current Position(s) Held with Fund:	Director, Governance & Nominating Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 1987
Principal Occupation(s) During Past 5 Years:	Senior Counsel since 2006, Partner (1995 - 2006) - McDermott, Will & Emery LLP (law firm)
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	Partnership for New York City, Inc. (non-profit) New York Collegium (non-profit) Boston Early Music Festival (non-profit)
Name:	Harris H. Rusitzky
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	76
Current Position(s) Held with Fund:	Director, Audit Committee Member, Governance & Nominating Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 1985
Principal Occupation(s) During Past 5 Years:	President, The Greening Group (business consultants) since 1994; Partner, The Restaurant Group (restaurants) since 2006
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
OFFICERS
Name:	Jeffrey S. Coons, Ph.D., CFA
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	47
Current Position(s) Held with Fund:	Vice President
Term of Office1 & Length of Time Served:	Since 2004
Principal Occupation(s) During Past 5 Years:	President since 2010, Co-Director of Research since 2002, Executive Group Member** since 2003, - Manning & Napier Advisors, Inc. Holds one or more of the following titles for various subsidiaries and affiliates: President, Director, Treasurer or Senior Trust Officer.
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A

27

Directors’ and Officers’ Information (unaudited)

OFFICERS (continued)
Name:	Beth Galusha
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	49
Current Position(s) Held with Fund:	Assistant Chief Financial Officer
Term of Office1 & Length of Time Served:	Assistant Chief Financial Officer since 2010
Principal Occupation(s) During Past 5 Years:	Chief Financial Officer and Treasurer, Manning & Napier Advisors, Inc. Holds one or more of the following titles for various affiliates: Chief Financial Officer, Director, or Treasurer
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
Name:	Christine Glavin
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	44
Current Position(s) Held with Fund:	Principal Financial Officer, Chief Financial Officer
Term of Office1 & Length of Time Served:	Principal Financial Officer since 2002; Chief Financial Officer since 2001
Principal Occupation(s) During Past 5 Years:	Fund Reporting Manager, Manning & Napier Advisors, Inc. since 1997
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
Name:	Jodi L. Hedberg
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	43
Current Position(s) Held with Fund:	Corporate Secretary, Chief Compliance Officer, Anti-Money Laundering Compliance Officer
Term of Office1 & Length of Time Served:	Corporate Secretary since 1997; Chief Compliance Officer since 2004
Principal Occupation(s) During Past 5 Years:	Director of Compliance, Manning & Napier Advisors, Inc. and affiliates since 1990 (title change in 2005 from Compliance Manager to Director of Compliance); Corporate Secretary, Manning & Napier Investor Services, Inc. since 2006
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
Name:	Richard Yates
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	45
Current Position(s) Held with Fund:	Chief Legal Officer
Term of Office1 & Length of Time Served:	Chief Legal Officer since 2004
Principal Occupation(s) During Past 5 Years:	Counsel - Manning & Napier Advisors, Inc. & affiliates since 2000; Holds one or more of the following titles for various affiliates; Director or Corporate Secretary
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A

*Interested Director, within the meaning of the Investment Company Act of 1940 by reason of his position with the Fund’s investment advisor and distributor. Mr. Auspitz serves as the Executive Vice President and Director, Manning & Napier Advisors, Inc. and President and Director, Manning & Napier Investor Services, Inc., the Fund’s distributor.

**Prior to June 2010, the Executive Group, consisting of senior executive employee-owners, performed the duties of the Office of the Chief Executive of the Advisor. Effective June 2010, the Executive Group serves as an advisory board to the Chief Executive Officer.

¹The term of office for President, Vice President, Chief Financial Officer, Assistant Chief Financial Officer, Chief Legal Officer and Corporate Secretary is one year and until their respective successors are chosen and qualified. All other officers’ terms are indefinite.

28

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29

Literature Requests (unaudited)

Proxy Voting Policies and Procedures

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available, without charge, upon request:

By phone	1-800-466-3863
On the Securities and Exchange
Commission’s (SEC) web site	http://www.sec.gov

Proxy Voting Record

Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30th is available, without charge, upon request:

By phone	1-800-466-3863
On the SEC’s web site	http://www.sec.gov

Quarterly Portfolio Holdings

The Series’ complete schedule of portfolio holdings for the 1st and 3rd quarters of each fiscal year are provided on Form N-Q, and are available, without charge, upon request:

By phone	1-800-466-3863
On the SEC’s web site	http://www.sec.gov

The Series’ Form N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

Prospectus and Statement of Additional Information (SAI)

The prospectus and SAI provide additional information about each Series, including charges, expenses and risks. These documents are available, without charge, upon request:

By phone	1-800-466-3863
On the SEC’s web site	http://www.sec.gov
On the Advisor’s web site	http://www.manning-napier.com

Additional information available at www.manning-napier.com

1. Fund Holdings - Month-End

2. Fund Holdings - Quarter-End

3. Shareholder Report - Annual

4. Shareholder Report - Semi-Annual

MNINT-12/10-AR

Management Discussion and Analysis (unaudited)

Dear Shareholders:

Over the course of 2010, the international markets experienced several ups and downs driven by well-defined swings in investor sentiment. Optimism fueled strong market returns early in the year, as upbeat economic releases led investors to believe in the potential for a robust global recovery. However, sentiment shifted drastically in May and June as more negative economic news and issues related to Europe’s government debt problems led to notable stock market losses. In another swing, the markets rebounded in the fall amid better economic developments.

With foreign equities posting gains in the third and fourth quarters, the choppy year ended on a fairly strong note, and broad international equity indices have now produced back-to-back years of positive results. For the twelve months ending December 31, 2010, the Morgan Stanley Capital International (MSCI) All Country World Index excluding the U.S. (ACWIxUS) was up 11.15%.

While the World Opportunities Series had a solid 9.23% return during 2010, the Series trailed the MSCI ACWIxUS Index. However, the Series continues to have a strong track record relative to the benchmark over the current international stock market cycle, April 1, 2003 through December 31, 2010, which includes both a bull and a bear market. Over this current cycle, the World Opportunities Series has earned an annualized return of 14.21%, compared to the 13.75% return of the ACWIxUS Index.

In the volatile market environment of 2010, Manning & Napier maintained a selective investment approach and focused on companies that we believe can grow market share. We continued to emphasize quality, targeting best-in-class companies expected to generate sales growth despite a muted economic backdrop, as well as “away game winners” expected to successfully compete in faster-growing markets overseas. Using our active stock selection strategies, our analysts also identified opportunities in certain cyclical industries that have experienced supply cutbacks. Specifically, we have looked for well-positioned companies that we believe can take market share and benefit from tight supply and demand dynamics.

During the last year, sector allocation decisions aided the World Opportunities Series’ relative results. In particular, a noteworthy underweight to Financials versus the benchmark and not owning stocks in the Utilities sector were drivers of outperformance. Meanwhile, a lower allocation to Materials than the benchmark detracted from relative returns over the past twelve months. Throughout 2010, the Series maintained a relatively high exposure to Information Technology, Consumer Staples, Health Care, and Industrials.

As for specific stock selections, individual investments in the Energy sector significantly boosted the Series’ relative results over the last twelve months. However, security selections in Information Technology and Consumer Staples hurt relative performance. From a country standpoint, stock selections in Canada, Germany, Brazil, Ireland, and the Netherlands helped the World Opportunities Series’ relative returns in the last twelve months. In contrast, an underweight to Japan compared to the benchmark detracted from relative returns in 2010, as did specific stock selections in this market.

Despite concerns about Europe’s sovereign debt crisis, the World Opportunities Series maintained an overweight to Developed Europe. We believe some of the healthier, core European countries have more favorable dynamics, and we have invested in what we consider to be top level companies that may benefit from sales outside the European area. Indeed, stock selections in Developed Europe were a primary contributor to relative performance in 2010. Selections in North America also aided returns.

With noteworthy headwinds such as sovereign debt issues in Europe, high government debt burdens in the developed world, and inflationary pressures in the emerging markets, the global economy remains in an uneven, slow growth environment. As the markets fluctuated around this slow growth trend in 2010, Manning & Napier earned solid returns by staying focused on the fundamentals and maintaining our selective investment process. This investment approach has proved beneficial over the past 40 years, and we believe these qualities will remain important as the market environment unfolds in 2011.

As always, we appreciate your business.

Sincerely,

Manning & Napier Advisors, Inc.

1

Performance Update as of December 31, 2010 (unaudited)

			Average Annual Total Returns As of  December 31, 2010
	One Year		Five Year		Ten Year		Since Inception 1
Manning & Napier Fund, Inc. - World Opportunities Series2		9.23%		7.02%		8.59%		9.75%
Morgan Stanley Capital International (MSCI) All Country World   Index ex U.S.3		11.15%		4.82%		5.54%		5.86%

The following graph compares the value of a $10,000 investment in the Manning & Napier Fund, Inc. - World Opportunities Series for the ten years ended December 31, 2010 to the MSCI All Country World Index ex U.S.

¹Performance numbers for the Series are calculated from September 6, 1996, the Series’ inception date. Prior to 2001, the MSCI All Country World Index ex U.S. only published month-end numbers; therefore, performance numbers for the Index are calculated from September 30, 1996.

²The Series’ performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of shares. The Series’ performance is historical and may not be indicative of future results. The performance returns shown are inclusive of the net expense ratio of the Series. For the year ended December 31, 2010, this net expense ratio was 1.11%. The gross expense ratio, which does not account for any voluntary or contractual waivers currently in effect, was 1.11% for the year ended December 31, 2010.

³The MSCI All Country World Index ex U.S. is a free float-adjusted market capitalization weighted index that is designed to measure equity market performance in the global developed and emerging markets and consists of 47 developed and emerging market country indices outside the United States. The Index is denominated in U.S. Dollars. The Index returns assume daily reinvestment of gross dividends (which do not account for foreign dividend taxation) from the inception of the Series (see Note 1 above) through December 31, 1998, as net returns were not available. Subsequent to December 31, 1998, the Index returns assume daily reinvestment of net dividends (thus accounting for foreign dividend taxation). Unlike Series returns, the Index returns do not reflect any fees or expenses.

2

Shareholder Expense Example (unaudited)

As a shareholder of the Series, you may incur two types of costs: (1) transaction costs and (2) ongoing costs, including management fees and other Series expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Series and to compare these costs with the ongoing costs of investing in other mutual funds.

The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (July 1, 2010 to December 31, 2010).

Actual Expenses

The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Series’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Series’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid during the period. You may use this information to compare the ongoing costs of investing in the Series and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.

	Beginning Account  Value 7/1/10	Ending Account  Value 12/31/10	Expenses Paid   During Period*   7/1/10-12/31/10
Actual	$1,000.00	$1,233.60	$6.19
Hypothetical (5% return before expenses)	$1,000.00	$1,019.66	$5.60

*Expenses are equal to the Series’ annualized expense ratio (for the six-month period) of 1.10%, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). Expenses are based on the most recent fiscal half year; therefore, the expense ratio stated above may differ from the expense ratio stated in the financial highlights, which is based on one-year data. The Series’ total return would have been lower had certain expenses not been waived during the period.

3

Portfolio Composition as of December 31, 2010 (unaudited)

4

Investment Portfolio - December 31, 2010

	Shares		Value       (Note 2)
COMMON STOCKS - 95.0%
Consumer Discretionary - 11.5%
Automobiles - 1.3%
Bayerische Motoren Werke AG (BMW) (Germany)1		658,390	$	51,872,596
Suzuki Motor Corp. (Japan)1		1,290,200		31,672,883
				83,545,479
Hotels, Restaurants & Leisure - 0.8%
Accor S.A. (France)1		772,010		34,406,578
Club Mediterranee S.A. (France)*1		852,070		17,625,544
				52,032,122
Leisure Equipment & Products - 0.5%
Sankyo Co. Ltd. (Japan)1		576,000		32,453,798
Media - 6.5%
Grupo Televisa S.A. - ADR (Mexico)*		2,837,700		73,581,561
Liberty Global, Inc. - Class A (United States)*		1,929,970		68,282,339
Mediaset S.p.A. (Italy)1		4,111,660		24,901,045
Reed Elsevier plc (United Kingdom)1		7,692,400		64,977,565
Societe Television Francaise 1 (France)1		8,726,180		151,698,085
Virgin Media, Inc. (United Kingdom)		1,222,838		33,310,107
				416,750,702
Multiline Retail - 1.2%
Marks & Spencer Group plc (United Kingdom)1		13,137,700		75,758,378
Textiles, Apparel & Luxury Goods - 1.2%
Adidas AG (Germany)1		1,234,880		80,327,899
Total Consumer Discretionary				740,868,378
Consumer Staples - 14.6%
Beverages - 2.9%
Anheuser-Busch InBev N.V. (Belgium)1		1,050,370		60,017,281
Heineken N.V. (Netherlands)1		2,532,650		124,218,172
				184,235,453
Food & Staples Retailing - 5.1%
Carrefour S.A. (France)1		3,017,720		124,428,310
Koninklijke Ahold N.V. (Netherlands)1		3,846,750		50,816,507
Tesco plc (United Kingdom)1		23,591,360		156,434,649
				331,679,466
Food Products - 5.8%
Danone S.A. (France)1		2,129,470		133,894,977
Nestle S.A. (Switzerland)1		2,293,350		134,352,863
Unilever plc - ADR (United Kingdom)		3,496,690		107,977,787
				376,225,627

The accompanying notes are an integral part of the financial statements. 5

Investment Portfolio - December 31, 2010

	Shares		Value       (Note 2)
COMMON STOCKS (continued)
Consumer Staples (continued)
Personal Products - 0.8%
Beiersdorf AG (Germany)1		907,340	$	50,348,501
Total Consumer Staples				942,489,047
Energy - 12.7%
Energy Equipment & Services - 8.7%
Calfrac Well Services Ltd. (Canada)		1,296,670		44,652,500
Compagnie Generale de Geophysique - Veritas (CGG - Veritas) (France)*1		4,993,170		152,427,629
Petroleum Geo-Services ASA (Norway)*1		2,306,650		36,258,864
Schlumberger Ltd. (United States)		2,168,190		181,043,865
Trican Well Service Ltd. (Canada)2		7,415,430		150,202,917
				564,585,775
Oil, Gas & Consumable Fuels - 4.0%
Cameco Corp. (Canada)		2,735,540		110,461,105
Talisman Energy, Inc. (Canada)		6,488,650		144,351,743
				254,812,848
Total Energy				819,398,623
Financials - 7.8%
Commercial Banks - 3.1%
Banco Santander S.A. (Spain)1		9,236,150		98,418,804
HSBC Holdings plc (United Kingdom)1		9,710,520		99,242,573
				197,661,377
Diversified Financial Services - 1.9%
Deutsche Boerse AG (Germany)1		1,817,360		125,563,363
Insurance - 2.8%
Allianz SE (Germany)1		981,230		116,585,528
Willis Group Holdings plc (United Kingdom)		1,915,780		66,343,461
				182,928,989
Total Financials				506,153,729
Health Care - 12.1%
Health Care Equipment & Supplies - 4.5%
Cochlear Ltd. (Australia)1		1,173,920		96,636,392
Covidien plc (Ireland)		2,238,820		102,224,521
Mindray Medical International Ltd. - ADR (China)		891,100		23,525,040
Straumann Holding AG (Switzerland)1		295,300		67,625,249
				290,011,202
Health Care Providers & Services - 3.8%
BML, Inc. (Japan)1		554,500		15,520,454
Bumrungrad Hospital Public Co. Ltd. - NVDR (Thailand)1		35,555,100		37,395,125

6 The accompanying notes are an integral part of the financial statements.

Investment Portfolio - December 31, 2010

	Shares		Value (Note 2)
COMMON STOCKS (continued)
Health Care (continued)
Health Care Providers & Services (continued)
Sonic Healthcare Ltd. (Australia)1		16,077,890	$	191,125,859
				244,041,438
Life Sciences Tools & Services - 3.0%
Lonza Group AG (Switzerland)1		2,455,292		196,804,090
Pharmaceuticals - 0.8%
Santen Pharmaceutical Co. Ltd. (Japan)1		1,432,500		49,665,101
Total Health Care				780,521,831
Industrials - 15.0%
Aerospace & Defense - 1.0%
Empresa Brasileira de Aeronautica S.A. (Embraer) - ADR (Brazil)		2,227,150		65,478,210
Air Freight & Logistics - 3.1%
TNT N.V. (Netherlands)1		7,487,480		198,012,453
Airlines - 2.4%
Ryanair Holdings plc - ADR (Ireland)		5,058,530		155,600,383
Electrical Equipment - 2.7%
ABB Ltd. (Asea Brown Boveri) - ADR (Switzerland)*		5,189,430		116,502,704
Nexans S.A. (France)1		412,730		32,510,170
Prysmian S.p.A. (Italy)1		1,621,590		27,636,186
				176,649,060
Industrial Conglomerates - 1.1%
Siemens AG (Germany)1		550,520		68,195,467
Professional Services - 3.3%
Adecco S.A. (Switzerland)1		1,607,430		105,414,240
Randstad Holding N.V. (Netherlands)*1		1,997,449		105,563,315
				210,977,555
Road & Rail - 1.4%
All America Latina Logistica S.A. (Brazil)		7,149,150		64,600,753
Canadian National Railway Co. (Canada)		439,050		29,183,653
				93,784,406
Total Industrials				968,697,534
Information Technology - 15.7%
Communications Equipment - 1.3%
Alcatel-Lucent - ADR (France)*		29,070,460		86,048,562
Internet Software & Services - 0.6%
VistaPrint N.V. (Netherlands)*		809,360		37,230,560
IT Services - 6.9%
Accenture plc - Class A (Ireland)		1,338,860		64,921,321

The accompanying notes are an integral part of the financial statements. 7

Investment Portfolio - December 31, 2010

	Shares		Value (Note 2)
COMMON STOCKS (continued)
Information Technology (continued)
IT Services (continued)
Amadeus IT Holding S.A. - Class A (Spain)*1		1,577,960	$	33,161,321
Amdocs Ltd. (Guernsey)*		9,530,590		261,805,307
Cielo S.A. (Brazil)		5,119,970		41,484,094
Redecard S.A. (Brazil)		3,414,050		43,292,622
				444,664,665
Semiconductors & Semiconductor Equipment - 4.6%
Advantest Corp. (Japan)1		6,568,600		147,683,185
Sumco Corp. (Japan)*1		5,038,920		71,751,374
Tokyo Electron Ltd. (Japan)1		1,041,080		65,547,648
Yingli Green Energy Holding Co. Ltd.- ADR (China)*		1,439,780		14,225,026
				299,207,233
Software - 2.3%
Misys plc (United Kingdom)*1		12,411,604		66,258,594
SAP AG - ADR (Germany)		898,850		45,490,799
Square Enix Holdings Co. Ltd. (Japan)1		2,181,600		38,587,780
				150,337,173
Total Information Technology				1,017,488,193
Materials - 4.1%
Chemicals - 1.6%
Johnson Matthey plc (United Kingdom)1		1,554,500		49,526,122
Shin-Etsu Chemical Co. Ltd. (Japan)1		952,500		51,336,477
				100,862,599
Construction Materials - 2.3%
CRH plc (Ireland)1		6,993,600		145,914,497
Paper & Forest Products - 0.2%
Norbord, Inc. (Canada)*		1,120,342		16,495,833
Total Materials				263,272,929
Telecommunication Services - 1.5%
Wireless Telecommunication Services - 1.5%
SK Telecom Co. Ltd. - ADR (South Korea)		5,160,950		96,148,499
TOTAL COMMON STOCKS
(Identified Cost $5,519,494,262)				6,135,038,763

8 The accompanying notes are an integral part of the financial statements.

Investment Portfolio - December 31, 2010

	Shares		Value (Note 2)
PREFERRED STOCKS - 1.0%
Consumer Staples - 1.0%
Household Products - 1.0%
Henkel AG & Co. KGaA (Germany)1 (Identified Cost $36,696,378)		1,048,140	$	64,986,480
SHORT-TERM INVESTMENTS - 5.3%
Dreyfus Cash Management, Inc. - Institutional Shares3, 0.14% (Identified Cost $339,413,268)		339,413,268		339,413,268
TOTAL INVESTMENTS - 101.3%
(Identified Cost $5,895,603,908)				6,539,438,511
LIABILITIES, LESS OTHER ASSETS - (1.3%)				(84,012,377	)
NET ASSETS - 100%			$	6,455,426,134

ADR - American Depository Receipt

NVDR - Non-Voting Depository Receipt

*Non-income producing security

¹International Fair Value factor from pricing service was applied.

²Affiliated company as defined by the Investment Company Act of 1940 (see Note 2 to the financial statements).

³Rate shown is the current yield as of December 31, 2010.

The Series’ portfolio holds, as a percentage of net assets, greater than 10% in the following countries:

France - 11.4%; United Kingdom - 11.1%.

The accompanying notes are an integral part of the financial statements. 9

Statement of Assets and Liabilities

December 31, 2010

ASSETS:
Investments, at value (identified cost $5,895,603,908) (Note 2)	$	6,539,438,511
Receivable for fund shares sold		15,981,280
Receivable for securities sold		5,054,544
Foreign tax reclaims receivable		4,888,301
Dividends receivable		4,551,961
TOTAL ASSETS		6,569,914,597
LIABILITIES:
Accrued management fees (Note 3)		5,352,489
Accrued transfer agent fees (Note 3)		407,945
Accrued fund accounting and administration fees (Note 3)		136,223
Accrued directors’ fees (Note 3)		2,261
Accrued Chief Compliance Officer service fees (Note 3)		245
Payable for securities purchased		104,105,563
Payable for fund shares repurchased		3,856,821
Other payables and accrued expenses		626,916
TOTAL LIABILITIES		114,488,463
TOTAL NET ASSETS	$	6,455,426,134
NET ASSETS CONSIST OF:
Capital stock	$	7,500,565
Additional paid-in-capital		5,796,809,349
Distributions in excess of net investment income		(493,000	)
Accumulated net realized gain on investments, foreign currency and translation of other assets and liabilities		7,289,612
Net unrealized appreciation on investments, foreign currency and translation of other assets and liabilities		644,319,608
TOTAL NET ASSETS	$	6,455,426,134
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER SHARE - Class A ($6,455,426,134/750,056,522 shares)	$	8.61

10 The accompanying notes are an integral part of the financial statements.

Statement of Operations

For the Year Ended December 31, 2010

INVESTMENT INCOME:
Dividends (net of foreign taxes withheld, $12,577,925)	$112,609,854
EXPENSES:
Management fees (Note 3)	55,383,375
Transfer agent fees (Note 3)	2,927,156
Fund accounting and administration fees (Note 3)	743,077
Directors’ fees (Note 3)	103,078
Chief Compliance Officer service fees (Note 3)	2,631
Custodian fees	1,091,198
Miscellaneous	1,373,722
Total Expenses	61,624,237
Less reduction of expenses (Note 3)	(758	)
Net Expenses	61,623,479
NET INVESTMENT INCOME	50,986,375
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY:
Net realized gain (loss) on- Investments	145,345,736
Foreign currency and translation of other assets and liabilities	(2,707,000	)
	142,638,736
Net change in unrealized appreciation on- Investments	299,446,571
Foreign currency and translation of other assets and liabilities	387,847
	299,834,418
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND FOREIGN CURRENCY	442,473,154
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$493,459,529

The accompanying notes are an integral part of the financial statements. 11

Statements of Changes in Net Assets

	For the Year Ended 12/31/10			For the Year Ended 12/31/09
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income		$    50,986,375			$    16,004,364
Net realized gain on investments and foreign currency		142,638,736			32,401,977
Net change in unrealized appreciation on investments and foreign currency		299,834,418			859,900,733
Net increase from operations		493,459,529			908,307,074
DISTRIBUTIONS TO SHAREHOLDERS (Note 8):
From net investment income		(51,336,546	)		(30,333,272	)
From net realized gain on investments		(128,844,230	)		—
Total distributions to shareholders		(180,180,776	)		(30,333,272	)
CAPITAL STOCK ISSUED AND REPURCHASED:
Net increase from capital share transactions (Note 5)		1,224,687,957			2,699,428,129
Net increase in net assets		1,537,966,710			3,577,401,931
NET ASSETS:
Beginning of year		4,917,459,424			1,340,057,493
End of year (including distributions in excess of net investment income of $493,000 and undistributed net investment income of $2,564,172, respectively)		$6,455,426,134			$4,917,459,424

12 The accompanying notes are an integral part of the financial statements.

Financial Highlights

	For the Years Ended
	12/31/10		12/31/09		12/31/08		12/31/07		12/31/06
Per share data (for a share outstanding throughout each year):
Net asset value - Beginning of year		$8.12		$5.88		$10.07		$9.58		$8.46
Income (loss) from investment operations:
Net investment income		0.071		0.041		0.10		0.05		0.12
Net realized and unrealized gain (loss) on investments		0.67		2.26		(4.08)		1.36		2.71
Total from investment operations		0.74		2.30		(3.98)		1.41		2.83
Less distributions to shareholders:
From net investment income		(0.07)		(0.06)		(0.03)		(0.05)		(0.14)
From net realized gain on investments		(0.18)		—		(0.18)		(0.87)		(1.57)
Total distributions to shareholders		(0.25)		(0.06)		(0.21)		(0.92)		(1.71)
Net asset value - End of year		$8.61		$8.12		$5.88		$10.07		$9.58
Net assets - End of year (000’s omitted)		$6,455,426		$4,917,459		$1,340,057		$841,864		$317,121
Total return2		9.23%		39.12%		(40.07%)		15.13%		33.88%
Ratios (to average net assets)/Supplemental Data:
Expenses*		1.11%		1.17%		1.16%		1.14%		1.16%
Net investment income		0.92%		0.60%		2.17%		0.75%		1.35%
Portfolio turnover		39%		42%		34%		49%		64%
*The investment advisor did not impose all of its management fees, CCO fees and fund accounting and transfer agent fees, and other fees in some years and in some years paid a portion of the series’ expenses. If these expenses had been incurred by the Series, the expense ratio (to average net assets) would have been increased by the following amounts:
		0.00%3		0.00%3		N/A		N/A		N/A

¹Calculated based on average shares outstanding during the year.

²Represents aggregate total return for the periods indicated, and assumes reinvestment of all distributions. Total return would have been lower had certain expenses not been waived or reimbursed during the periods. Periods less than one year are not annualized.

³Less than 0.01%.

The accompanying notes are an integral part of the financial statements. 13

Notes to Financial Statements

1. ORGANIZATION

World Opportunities Series (the “Series”) is a no-load diversified series of Manning & Napier Fund, Inc. (the “Fund”). The Fund is organized in Maryland and is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company.

The Series’ investment objective is to provide long-term growth by investing principally in the common stocks of companies from outside the United States.

The Series is authorized to issue five classes of shares (Class A, B, D, E and Z). Currently, only Class A shares have been issued. Each class of shares is substantially the same, except that class-specific distribution and shareholder servicing expenses are borne by the specific class of shares to which they relate.

The Fund’s Advisor is Manning & Napier Advisors, Inc. (the “Advisor”). Shares of the Series are offered to investors, clients and employees of the Advisor and its affiliates. The total authorized capital stock of the Fund consists of 10.0 billion shares of common stock each having a par value of $0.01. As of December 31, 2010, 6.2 billion shares have been designated in total among 29 series, of which 2.5 billion have been designated as World Opportunities Series Class A common stock.

2. SIGNIFICANT ACCOUNTING POLICIES

Security Valuation

Portfolio securities, including domestic equities, foreign equities, warrants and options, listed on an exchange other than the NASDAQ National Market System are valued at the latest quoted sales price of the exchange on which the security is primarily traded. Securities not traded on valuation date or securities not listed on an exchange are valued at the latest quoted bid price provided by the Fund’s pricing service. Securities listed on the NASDAQ National Market System are valued in accordance with the NASDAQ Official Closing Price.

Short-term investments that mature in sixty days or less are valued at amortized cost, which approximates market value. Investments in open-end investment companies are valued at their net asset value per share on valuation date.

Volume and level of activity in established markets for an asset or liability are evaluated to determine whether recent transactions and quoted prices are determinative of fair value. Where there have been significant decreases in volume and level of activity, further analysis and adjustment may be necessary to estimate fair value. The Series measures fair value in these instances by the use of inputs and valuation techniques which may be based upon current market prices of securities that are comparable in coupon, rating, maturity and industry and/or expectation of future cash flows. As a result of trading in relatively thin markets and/or markets that experience significant volatility, the prices used by the Series to value these securities may differ from the value that would be realized if these securities were sold, and the differences could be material.

Securities for which representative valuations or prices are not available from the Fund’s pricing service may be valued at fair value. Due to the inherent uncertainty of valuations of such securities, the fair value may differ significantly from the values that would have been used had a ready market for such securities existed. If trading or events occurring after the close of the principal market in which securities are traded are expected to materially affect the value of those securities, then they may be valued at their fair value, taking this trading or these events into account. Fair value is determined in good faith by the Advisor under procedures approved by and under the general supervision and responsibility of the Fund’s Board of Directors (the “Board”). In accordance with the procedures approved by the Board, the Series applies fair value pricing on a daily basis except for North American, Central American, South American and Caribbean equity securities. Fair valuing of securities is determined with the assistance of a pricing service using calculations or factors based on indices of domestic securities and other appropriate indicators, such as prices of relevant American Depository Receipts and futures contracts, to adjust local market prices for subsequent

14

Notes to Financial Statements

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

Security Valuation (continued)

movements through the time the Series calculates its net asset value. The value of securities used for the net asset value calculation under the procedures may differ from published prices for the same securities. It is the Fund’s policy to classify each foreign equity security, except for those in the regions noted above, as Level 2 securities due to the fact the pricing service evaluated what factor was applied to the calculated end of day market price.

Various inputs are used in determining the value of the Series’ assets or liabilities carried at market value. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical assets and liabilities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.). Level 3 includes significant unobservable inputs (including the Series’ own assumptions in determining the fair value of investments.) The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

The following is a summary of the valuation levels used for major security types as of December 31, 2010 in valuing the Series’ assets or liabilities carried at market value:

Description	Total		Level 1		Level 2		Level  3
Assets:
Equity securities*		$ 6,135,038,763		$ 2,244,465,272		$ 3,890,573,491		$                      —
Preferred securities		64,986,480				64,986,480		—
Debt securities		—		—		—		—
Mutual funds		339,413,268		339,413,268		—		—
Other financial instruments**:		—		—		—		—
Total assets:		6,539,438,511		2,583,878,540		3,955,559,971		—
Liabilities:
Other financial instruments**:		—		—		—		—
Total liabilities:		—		—		—		—
Total		$ 6,539,438,511		$ 2,583,878,540		$ 3,955,559,971		$                      —

*Includes common stock, warrants and rights. Please see the Investment Portfolio for industry classification and for securities where an International Fair Value factor from the pricing service was applied to value the security. Such securities are included in Level 2 in the table above.

**Other financial instruments are derivative instruments not reflected in the Investment Portfolio, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument. As of December 31, 2010, the Series did not hold any derivative instruments.

There were no Level 3 securities held by the Series as of December 31, 2009 or December 31, 2010.

The Fund’s policy is to recognize transfers in and transfers out of the valuation levels as of the beginning of the reporting period. During the year ended December 31, 2010, the Fund had a significant amount of foreign equity securities transfer from Level 1 to Level 2 due to the implementation of new international fair value pricing procedures. The following is a summary of the foreign equity securities that transferred from Level 1 to Level 2:

15

Notes to Financial Statements

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

Security Valuation (continued)

Total # Securities Level 1 at beginning and Level 2 at end of period		Total Market Value Beginning of period		Total Market Value End of period		Change in Market Value
	28		$ 2,196,289,659		$ 2,575,490,588	$	379,200,929

Additional disclosure surrounding the activity in Level 3 fair value measurement will be effective for fiscal years beginning after December 15, 2010. Management has concluded that this will not have a material impact on the Series’ financial statements.

Security Transactions, Investment Income and Expenses

Security transactions are accounted for on trade date. Dividend income is recorded on the ex-dividend date, except that if the ex-dividend date has passed, certain dividends from foreign securities are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends, if any, are recorded at the fair market value of the securities received. Interest income, including amortization of premium and accretion of discounts using the effective interest method, is earned from settlement date and accrued daily.

Expenses are recorded on an accrual basis. Most expenses of the Fund can be attributed to a specific series. Expenses which cannot be directly attributed are apportioned among the series in the Fund in such a manner as deemed equitable by the Fund’s Board, taking into consideration, among other things, the nature and type of expense.

The Series uses the identified cost method for determining realized gain or loss on investments for both financial statement and federal income tax reporting purposes.

Foreign Currency Translation

The books and records of the Series are maintained in U.S. dollars. Foreign currencies, investments and other assets and liabilities are translated into U.S. dollars at the current exchange rates. Purchases and sales of investment securities and income and expenses are translated on the respective dates of such transactions. The Series does not isolate realized and unrealized gains and losses attributable to changes in the exchange rates from gains and losses that arise from changes in the market value of investments. Such fluctuations are included with net realized and unrealized gain or loss on investments. Net realized foreign currency gains and losses represent foreign currency gains and losses between trade date and settlement date on securities transactions, gains and losses on disposition of foreign currencies and the difference between the amount of income and foreign withholding taxes recorded on the books of the Series and the amounts actually received or paid.

Affiliated Companies

The 1940 Act defines “affiliated companies” to include securities in which a series owns 5% or more of the outstanding voting securities of the issuer. The following transactions were effected in shares of Calfrac Well Services Ltd. (Canada) and Trican Well Service Ltd. (Canada) for the year ended December 31, 2010:

16

Notes to Financial Statements

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

Affiliated Companies (continued)

Name of Issuer	Value at 12/31/09		Purchase Cost	Sales Proceeds		Value at 12/31/10	Shares Held  at 12/31/10	Dividend Income 12/31/09 through 12/31/10		Net Realized Gain 12/31/09 through 12/31/10
Calfrac Well Service Ltd. (Canada)*		$67,286,779	—		$27,870,894	$44,652,500	1,296,670		$159,989		$6,107,092
Trican Well Service Ltd. (Canada)		$99,690,152	—		$               —	$150,202,917	7,415,430		$729,495		$            —

* Security was an affiliated company for the period December 31, 2009 through April 16, 2010.

Federal Taxes

The Series’ policy is to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies. The Series is not subject to federal income tax or excise tax to the extent that the Series distributes to shareholders each year its taxable income, including any net realized gains on investments, in accordance with requirements of the Internal Revenue Code. Accordingly, no provision for federal income tax or excise tax has been made in the financial statements.

Management evaluates its tax positions to determine if the tax positions taken meet the minimum recognition threshold in connection with accounting for uncertainties in income tax positions taken or expected to be taken for the purposes of measuring and recognizing tax liabilities in the financial statements. Recognition of tax benefits of an uncertain tax position is required only when the position is “more likely than not” to be sustained assuming examination by taxing authorities. At December 31, 2010, the Series has recorded no liability for net unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken in future tax returns.

The Series files income tax returns in the U.S. federal jurisdiction, various states and foreign jurisdictions, as required. No income tax returns are currently under investigation. The statute of limitations on the Series’ tax returns remains open for the years ended December 31, 2007 through December 31, 2010. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.

Additionally, based on the Fund’s understanding of the tax rules and rates related to income, gains and transactions for foreign jurisdictions in which it invests, the Series will provide for foreign taxes, and where appropriate, deferred foreign tax.

Distributions of Income and Gains

Distributions to shareholders of net investment income and net realized gains are made annually. An additional distribution may be necessary to avoid taxation of the Series. Distributions are recorded on the ex-dividend date.

Indemnifications

The Fund’s organizational documents provide former and current directors and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund’s maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.

17

Notes to Financial Statements

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

Other

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.

3. TRANSACTIONS WITH AFFILIATES

The Fund has an Investment Advisory Agreement (the “Agreement”) with the Advisor, for which the Series pays a fee, computed daily and payable monthly, at an annual rate of 1.00% of the Series’ average daily net assets.

Under the Agreement, personnel of the Advisor provide the Series with advice and assistance in the choice of investments and the execution of securities transactions, and otherwise maintain the Series’ organization. The Advisor also provides the Fund with necessary office space and fund administration and support services. The salaries of all officers of the Fund (except a percentage of the Fund’s Chief Compliance Officer’s salary, which is paid by the Fund), and of all Directors who are “affiliated persons” of the Fund, or of the Advisor, and all personnel of the Fund, or of the Advisor, performing services relating to research, statistical and investment activities, are paid by the Advisor. Each “non-affiliated” Director receives an annual stipend, which is allocated among all the active series of the Fund. In addition, these Directors also receive a fee per Board meeting attended plus a fee for each committee meeting attended.

For the year ended December 31, 2010, the Advisor voluntarily waived fees of $758, which is included as a reduction of expenses on the Statement of Operations. The Advisor is not eligible to recoup any expense that has been waived or reimbursed in prior years.

Manning & Napier Investor Services, Inc., a registered broker-dealer affiliate of the Advisor, acts as distributor for the Fund’s shares. The services of Manning & Napier Investor Services, Inc. are provided at no additional cost to the Series.

The Advisor has agreements with PNC Global Investment Servicing (U.S.) Inc. (“PNCGIS”) under which PNCGIS serves as sub-accountant services agent and sub-transfer agent. The Fund pays the Advisor an annual fee related to fund accounting and administration of 0.0175% on the first $3 billion of average daily net assets (excluding Target Series); 0.015% on the next $3 billion of average daily net assets (excluding Target Series); and 0.01% of the average daily net assets in excess of $6 billion (excluding Target Series); plus a base fee of $25,500 per Series. Transfer Agent fees are charged to the Fund on a per account basis. Additionally, certain transaction- and cusip-based fees and out-of-pocket expenses, including charges for reporting relating to the Fund’s compliance program, are charged.

Effective July 1, 2010, PNCGIS was sold to The Bank of New York Mellon Corporation, the Series’ custodian. At the close of the sale, PNCGIS changed its name to BNY Mellon Investment Servicing (U.S.) Inc. (“BNY”).

Expenses not directly attributable to a Series are allocated based on each Series’ relative net assets or number of accounts, depending on the expense.

4. PURCHASES AND SALES OF SECURITIES

For the year ended December 31, 2010, purchases and sales of securities, other than U.S. Government securities and short-term securities, were $3,163,930,092 and $2,047,901,465, respectively. There were no purchases or sales of U.S. Government securities.

18

Notes to Financial Statements

5. CAPITAL STOCK TRANSACTIONS

Transactions in Class A shares of World Opportunities Series were:

	For the Year Ended 12/31/10						For the Year Ended 12/31/09
	Shares			Amount			Shares			Amount
Sold		380,543,895		$	3,072,871,491			473,021,745		$	3,314,846,649
Reinvested		17,838,209			148,727,024			2,714,538			21,626,348
Repurchased		(253,809,235	)		(1,996,910,558	)		(98,321,062	)		(637,044,868	)
Total		144,572,869		$	1,224,687,957			377,415,221		$	2,699,428,129

Approximately 3% of the Series’ shares represent investments by fiduciary accounts over which the Advisor has sole investment discretion.

6. FINANCIAL INSTRUMENTS

The Series may trade in instruments including written and purchased options, forward foreign currency exchange contracts and futures contracts and other derivatives in the normal course of investing activities to assist in managing exposure to various market risks. Investments in these instruments may subject the Series to various elements of risk, which may involve, to a varying degree, elements of risk in excess of the amounts recognized for financial statement purposes. These risks include: the risk that changes in the value of a derivative may not correlate perfectly with the underlying asset, rate or index, counterparty credit risk related to over the counter derivatives counterparties’ failure to perform under contract terms, liquidity risk related to the lack of a liquid market for these contracts allowing the fund to close out its position(s) and documentation risk relating to disagreement over contract terms. No such investments were held by the Series for the year ended December 31, 2010.

7. FOREIGN SECURITIES

Investing in securities of foreign companies and foreign governments involves special risks and considerations not typically associated with investing in securities of domestic companies and the U.S. Government. These risks include revaluation of currencies and future adverse political and economic developments. Moreover, securities of foreign companies and foreign governments and their markets may be less liquid and their prices more volatile than those of comparable domestic companies and the U.S. Government.

8. FEDERAL INCOME TAX INFORMATION

The amount and characterization of certain income and capital gains to be distributed are determined in accordance with federal income tax regulations, which may differ from accounting principles generally accepted in the United States of America. These differences are primarily due to differing book and tax treatments in the timing of the recognition of net investment income or gains and losses, including foreign currency gains and losses, losses deferred due to wash sales, and post-October losses. The Series may periodically make reclassifications among its capital accounts to reflect income and gains available for distribution (or available capital loss carryovers) under income tax regulations without impacting the Series’ net asset value. Any such reclassifications are not reflected in the financial highlights.

19

Notes to Financial Statements

8. FEDERAL INCOME TAX INFORMATION (continued)

The tax character of distributions paid were as follows:

	For the Year Ended 12/31/10		For the Year Ended 12/31/09
Ordinary income	$	115,460,480	$	30,333,272
Long-term capital gains		64,720,296		—

For the year ended December 31, 2010, the Series elected to defer $492,999 of currency losses, attributable to Post-October losses.

At December 31, 2010, the tax basis of distributable earnings and the net unrealized appreciation based on the identified cost of investments for federal income tax purposes were as follows:

Cost for federal income tax purposes	$	5,934,571,718
Unrealized appreciation	$	817,876,674
Unrealized depreciation		(213,009,881	)
Net unrealized appreciation	$	604,866,793
Undistributed ordinary income		28,292,435
Undistributed long-term gains		17,964,985

20

Report of Independent Registered Public Accounting Firm

To the Board of Directors of Manning & Napier Fund, Inc. and Shareholders of World Opportunities Series:

In our opinion, the accompanying statement of assets and liabilities, including the investment portfolio, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the World Opportunities Series (a series of Manning & Napier Fund, Inc., hereafter referred to as the “Series”) at December 31, 2010, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Series’ management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2010 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

New York, New York

February 22, 2011

21

Supplemental Tax Information (unaudited)

All designations are based on financial information available as of the date of this annual report and, accordingly are subject to change.

For federal income tax purposes, the Series designates for the current fiscal year $111,683,383 or, if different, the maximum amount allowable under the tax law as qualified dividend income.

Pursuant to Section 852 of the Internal Revenue Code, as amended, the Series hereby designates $64,720,296 as capital gains for its taxable year ended December 31, 2010, or if different, the maximum allowable under tax law.

For corporate shareholders, the percentage of investment income (dividend income plus short-term gains, if any) that qualifies for the dividends received deduction for the current fiscal year is 0.11%.

22

Renewal of Investment Advisory Agreement (unaudited)

At the Manning & Napier Fund, Inc. (the “Fund”) Board of Directors’ (the “Board”) meeting, held on November 17, 2010, the Investment Advisory Agreement (the “Agreement”) between the Fund and Manning & Napier Advisors, Inc. (the “Advisor”) was reviewed by the Board for renewal. In connection with the decision whether to renew the Agreement, a variety of material was prepared for and reviewed by the Board.

Representatives of the Advisor attended the meeting and presented additional oral and written information to the Board to assist the Board in its considerations. The discussion immediately below outlines the materials and information presented to the Board in connection with the Board’s 2010 Annual Review of the Agreement and the conclusions made by the Directors when determining to continue the Agreement.

• The Board considered the services provided by the Advisor under the Agreement including, among others: deciding what securities to purchase and sell for each Series; arranging for the purchase and sale of such securities by placing orders with broker-dealers; administering the affairs of the Fund (including the books and records of the Fund not maintained by third party service providers such as the custodian or sub-transfer agent); arranging for the insurance coverage for the Fund; and supervising the preparation of tax returns, SEC filings (including registration statements) and reports to shareholders for the Fund. The Board also considered the nature and quality of such services provided under the Agreement in light of the Advisor’s services provided to the Fund for 24 years. The Board discussed the quality of these services with representatives from the Advisor and concluded that the Advisor was performing its services to the Fund required under the Agreement in a reasonable manner.

• The Board considered the investment performance of the various Series of the Fund. The investment performance for each Series was reviewed on a cumulative basis since inception and on a one year basis. In addition, annualized performance for the following time periods was considered: inception, three year, five year, ten year, and current market cycle. A market cycle includes periods of both rising and falling markets. Returns for established benchmark indices for each Series were provided for each time period. The Board noted that the various Series were competitive against their respective benchmarks and/or peer groups over various time periods, but in particular over the full market cycle period relevant for the Series. In addition, the Board considered at the meeting (and considers on a quarterly basis) a peer group performance analysis consisting of Morningstar universes of mutual funds with similar investment objectives. The Board discussed the performance with representatives from the Advisor and concluded that the investment performance of each of the Fund’s Series was reasonable based on the Fund’s actual performance and comparative performance, especially performance over the current market cycle.

• The Board considered the costs of the Advisor’s services and the profits of the Advisor as they relate to the Advisor’s services to the Fund under the Agreement. In reviewing the Advisor’s costs and profits, the Board discussed the Advisor’s revenues generated from the Fund (on both an actual and adjusted basis) and its expenses associated with providing the services under the Agreement. In addition, the Board reviewed the Advisor’s expenses associated with Fund activities outside of the Agreement (such as expense reimbursements pursuant to expense caps and payments made by the Advisor to third party platforms on which shares of the Fund are available for purchase). It was noted by representatives of the Advisor that 11 of the 27 active Series of the Fund are currently experiencing expenses above the capped expense ratios. After discussing the above costs and profits, the Board concluded that the Advisor’s profitability relating to its services provided under the Agreement was reasonable.

• The Board considered the fees and expenses of the various Series of the Fund. The Advisor presented the advisory fees and total expenses for each Series, including the advisory fee adjusted for any expense waivers or reimbursements (either contractual or voluntary) paid by the Advisor. The advisory fees and expense ratios of each Series were compared to an average (on both a mean and median basis) of similar funds as disclosed on the Morningstar database. Representatives of the Advisor discussed with the Board the levels of its advisory

23

Renewal of Investment Advisory Agreement (unaudited)

fee for each Series of the Fund and as compared to the median and mean advisory fees for similar funds as listed on Morningstar. Expense ratios for every Series, except the Pro-Blend’s Class R and Class C, and Target Class R and Class C, are currently below the median and mean for similar funds as listed on Morningstar. Based on their review of the information provided, the Board concluded that the fees and expenses of each Series of the Fund were reasonable on a comparative basis.

• The Board also considered the other benefits the Advisor derives from its relationship with the Fund. Such other benefits include certain research products provided by soft dollars. Given the level of soft dollar transactions involving the Fund, the Board concluded that these additional benefits to the Advisor were reasonable.

• In addition to the factors described above, the Board considered the Advisor’s personnel, investment strategies, policies and procedures relating to compliance with personal securities transactions, and reputation, expertise and resources in domestic and foreign financial markets. The Board concluded that these factors support the conclusion that the Advisor performs its services in a reasonable manner.

• The Board did not consider economies of scale at this time because of the multiple uses of the Fund (for the Advisor’s discretionary investment account clients in addition to direct investors), the current profitability of the Advisor’s services to the Fund under the Agreement, and the overall size of the Fund complex.

Based on the Board’s deliberations and their evaluation of the information described above, the Board, including a majority of Directors that are not “interested persons” as defined in the Investment Company Act of 1940, concluded that the compensation under the Agreement was fair and reasonable in light of the services and expenses and such other matters as the Directors considered to be relevant in the exercise of their reasonable judgment. Accordingly, the Board approved the renewal of the Agreement. In the course of their deliberations, the Directors did not identify any particular information that was all important or controlling.

24

Directors’ and Officers’ Information (unaudited)

The Statement of Additional Information provides additional information about the Fund’s directors and officers and can be obtained without charge by calling 1-800-466-3863, at www.manningnapieradvisors.com, or on the EDGAR Database on the SEC Internet web site (http:// www.sec.gov). The following chart shows certain information about the Fund’s officers and directors, including their principal occupations during the last five years. Unless specific dates are provided, the individuals have held the listed positions for longer than five years.

INTERESTED DIRECTOR/OFFICER
Name:	B. Reuben Auspitz*
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	63
Current Position(s) Held with Fund:	Principal Executive Officer, President, Chairman & Director
Term of Office1 & Length of Time Served:	Indefinite - Director since 1984; Vice President 1984 - 2003; President since 2004; Principal Executive Officer since 2002
Principal Occupation(s) During Past 5 Years:	Executive Vice President; Executive Group Member**; Chief Compliance Officer since 2004; Vice Chairman since June 2010; Co-Executive Director from 2003-2010 - Manning & Napier Advisors, Inc. President; Director - Manning & Napier Investor Services, Inc. Holds or has held one or more of the following titles for various subsidiaries and affiliates: President, Vice President, Director, Chairman, Treasurer, Chief Compliance Officer or Member.
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
INDEPENDENT DIRECTORS
Name:	Paul A. Brooke
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	65
Current Position(s) Held with Fund:	Director, Audit Committee Member, Governance & Nominating
	Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 2007
Principal Occupation(s) During Past 5 Years:	Chairman & CEO, Alsius Corp. (investments); Managing Member, PMSV Holdings LLC (investments)
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	Incyte Corp. (2000-present)
	ViroPharma, Inc. (2000-present)
	HLTH Corp. (2000-present)
	Cheyne Capital International (2000-present)
	MPM Bio-equities (2000-present)
	GMP Companies (2000-present)
	HoustonPharma (2000-present)
Name:	Richard M. Hurwitz
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	47
Current Position(s) Held with Fund:	Director, Audit Committee Member, Governance & Nominating
	Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 2009
Principal Occupation(s) During Past 5 Years:	Chief Executive Officer, Pictometry International Corp. since August 2010 (provider of georeferenced, aerial image libraries and related software) Managing Partner (2006-July 2010) - Aegis Investment Partners, LLC (investments); Founder and Managing Partner (2004-2005) - Village Markets, LLC (groceries)
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	Pictometry International Corp. (2000-2010)
	Pioneering Technologies (2006-2009)
	Vensearch Capital Corp. (2003-2007)

25

Directors’ and Officers’ Information (unaudited)

INDEPENDENT DIRECTORS (continued)
Name:	Stephen B. Ashley
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	70
Current Position(s) Held with Fund:	Director, Audit Committee Member, Governance & Nominating Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 1996
Principal Occupation(s) During Past 5 Years:	Chairman, Director, President & Chief Executive Officer, The Ashley Group (property management and investment). Chairman (non-executive) 2004-2008; Director 1995-2008 - Fannie Mae (mortgage)
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	The Ashley Group (1995-2008)
	Genesee Corporation (1987-2007)
Name:	Peter L. Faber
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	72
Current Position(s) Held with Fund:	Director, Governance & Nominating Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 1987
Principal Occupation(s) During Past 5 Years:	Senior Counsel since 2006, Partner (1995 - 2006) - McDermott, Will & Emery LLP (law firm)
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	Partnership for New York City, Inc. (non-profit)
	New York Collegium (non-profit)
	Boston Early Music Festival (non-profit)
Name:	Harris H. Rusitzky
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	76
Current Position(s) Held with Fund:	Director, Audit Committee Member, Governance & Nominating Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 1985
Principal Occupation(s) During Past 5 Years:	President, The Greening Group (business consultants) since 1994; Partner, The Restaurant Group (restaurants) since 2006
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
OFFICERS
Name:	Jeffrey S. Coons, Ph.D., CFA
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	47
Current Position(s) Held with Fund:	Vice President
Term of Office1 & Length of Time Served:	Since 2004
Principal Occupation(s) During Past 5 Years:	President since 2010, Co-Director of Research since 2002, Executive Group Member** since 2003, - Manning & Napier Advisors, Inc. Holds one or more of the following titles for various subsidiaries and affiliates: President, Director, Treasurer or Senior Trust Officer.
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A

26

Directors’ and Officers’ Information (unaudited)

OFFICERS (continued)
Name:	Beth Galusha
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	49
Current Position(s) Held with Fund:	Assistant Chief Financial Officer
Term of Office1 & Length of Time Served:	Assistant Chief Financial Officer since 2010
Principal Occupation(s) During Past 5 Years:	Chief Financial Officer and Treasurer, Manning & Napier Advisors, Inc. Holds one or more of the following titles for various affiliates: Chief Financial Officer, Director, or Treasurer
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
Name:	Christine Glavin
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	44
Current Position(s) Held with Fund:	Principal Financial Officer, Chief Financial Officer
Term of Office1 & Length of Time Served:	Principal Financial Officer since 2002; Chief Financial Officer since 2001
Principal Occupation(s) During Past 5 Years:	Fund Reporting Manager, Manning & Napier Advisors, Inc. since 1997
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
Name:	Jodi L. Hedberg
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	43
Current Position(s) Held with Fund:	Corporate Secretary, Chief Compliance Officer, Anti-Money Laundering Compliance Officer
Term of Office1 & Length of Time Served:	Corporate Secretary since 1997; Chief Compliance Officer since 2004
Principal Occupation(s) During Past 5 Years:	Director of Compliance, Manning & Napier Advisors, Inc. and affiliates since 1990 (title change in 2005 from Compliance Manager to Director of Compliance); Corporate Secretary, Manning & Napier Investor Services, Inc. since 2006
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
Name:	Richard Yates
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	45
Current Position(s) Held with Fund:	Chief Legal Officer
Term of Office1 & Length of Time Served:	Chief Legal Officer since 2004
Principal Occupation(s) During Past 5 Years:	Counsel - Manning & Napier Advisors, Inc. & affiliates since 2000; Holds one or more of the following titles for various affiliates; Director or Corporate Secretary
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A

*Interested Director, within the meaning of the Investment Company Act of 1940 by reason of his position with the Fund’s investment advisor and distributor. Mr. Auspitz serves as the Executive Vice President and Director, Manning & Napier Advisors, Inc. and President and Director, Manning

& Napier Investor Services, Inc., the Fund’s distributor.

**Prior to June 2010, the Executive Group, consisting of senior executive employee-owners, performed the duties of the Office of the Chief Executive of the Advisor. Effective June 2010, the Executive Group serves as an advisory board to the Chief Executive Officer.

¹The term of office for President, Vice President, Chief Financial Officer, Assistant Chief Financial Officer, Chief Legal Officer and Corporate Secretary is one year and until their respective successors are chosen and qualified. All other officers’ terms are indefinite.

27

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28

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29

Literature Requests (unaudited)

Proxy Voting Policies and Procedures

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available, without charge, upon request:

By phone	1-800-466-3863
On the Securities and Exchange
Commission’s (SEC) web site	http://www.sec.gov

Proxy Voting Record

Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30th is available, without charge, upon request:

By phone	1-800-466-3863
On the SEC’s web site	http://www.sec.gov

Quarterly Portfolio Holdings

The Series’ complete schedule of portfolio holdings for the 1st and 3rd quarters of each fiscal year are provided on Form N-Q, and are available, without charge, upon request:

By phone	1-800-466-3863
On the SEC’s web site	http://www.sec.gov

The Series’ Form N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

Prospectus and Statement of Additional Information (SAI)

The prospectus and SAI provide additional information about each Series, including charges, expenses and risks. These documents are available, without charge, upon request:

By phone	1-800-466-3863
On the SEC’s web site	http://www.sec.gov
On the Advisor’s web site	http://www.manning-napier.com

Additional information available at www.manning-napier.com

1. Fund Holdings - Month-End

2. Fund Holdings - Quarter-End

3. Shareholder Report - Annual

4. Shareholder Report - Semi-Annual

            MNWO-12/10-AR

Management Discussion and Analysis (unaudited)

Dear Shareholders:

As well-defined swings in sentiment drove market fluctuations in 2010, the fixed income markets generally had favorable results for the year. Returns were broadly positive throughout the first three quarters of the year. However, while equities finished the year with a strong rally, fixed income markets generally took a negative turn at the end of 2010. After eight consecutive quarters of positive performance, broad fixed income markets suffered losses in the fourth quarter.

While municipal securities posted gains for the year, the sector had the weakest fixed income returns in 2010, as credit concerns and supply and demand changes caused noteworthy losses during the last quarter. The Bank of America Merrill Lynch 1-12 Year Municipal Bond Index earned 3.04% during the year. With a return of 0.14%, the Ohio Tax Exempt Series trailed its benchmark over the last twelve months.

The municipal bond market generally performed well in the first three quarters of the year, a reflection of attractive supply and demand dynamics. During this time, the fundamentals in the tax-exempt marketplace remained strong, with demand rising because of the likelihood of higher taxes in the top tax brackets, and supply for longer-term tax-exempt issues declining because of the popularity of the alternative Build America Bond program. However, amid heightened concern about municipal defaults, the municipal bond market struggled during the fourth quarter.

While credit issues exist in certain areas of the municipal market, the Advisor does not believe the broad municipal credit environment has materially deteriorated. In fact, municipal defaults are rare, and municipalities typically pay their debts in full even if they are forced to restructure. Rather, much of the losses at the end of the year were likely due to supply and demand shifts within the sector. The recent tax compromise, which extended the Bush-era tax cuts for all income brackets, lessened the immediate demand for tax-shielding investments, and supply is expected to increase because of the expiration of the Build America Bond program, which had limited longer-term, tax-exempt supply, thus benefiting the municipal market. Given these factors, municipal yields increased during the fourth quarter. While rising yields equate to price declines, the Advisor believes this yield shift has enhanced the relative value of municipal bonds versus other sectors of the fixed income market.

Throughout 2010, the Series continued to focus on high quality bonds with an emphasis on the underlying credit quality, which provides additional security in the midst of a tough credit and economic environment. Specifically, during the past year the underlying credit quality of the bonds in the Series was rated investment grade or higher, and the types of holdings included general obligation debt, pre-refunded bonds, and revenue debt associated with necessary municipal services. While this higher quality bias leads to slightly lower relative yields than the overall municipal market, the Advisor believes the safety and liquidity of such issues justifies the quality bias.

Over the past year, the Series had a significant exposure to securities in the intermediate to longer-term maturity range as compared to the benchmark, which holds only minimal securities in this range. This intermediate to longer-term weighting was the primary driver of relative underperformance in 2010. While the current positioning helped relative results during several periods last year, particularly when municipal yields fell to historic lows during the third quarter, this positioning noticeably detracted from returns when yields rose during the fourth quarter, causing the Series to lag its benchmark for the year. However, given the slow growth economic environment, the Advisor believes the intermediate to longer-term maturity structure continues to be the most suitable strategy.

As the markets unfold in 2011, it will be important to monitor trends such as state and local budgets, monetary policy, and inflation expectations. With this mindset, Manning & Napier remains committed to our active and selective investment approach to fixed income. Staying focused on the fundamentals and maintaining our selective investment process helped us earn solid returns through the volatile markets of 2010, and we believe these qualities will remain important in the environment ahead.

As always, we appreciate your business.

Sincerely,

Manning & Napier Advisors, Inc.

1

Performance Update as of December 31, 2010 (unaudited)

				Average  Annual Total Returns As of December 31, 2010
	One Year			Five Year		Ten Year		Since Inception 1
Manning & Napier Fund, Inc. - Ohio Tax Exempt Series2		0.14	%		3.47%		4.00%		4.29%
Bank of America (BofA) Merrill Lynch 1-12 Year Municipal Bond Index3		3.04	%		4.71%		4.91%		5.15%

The following graph compares the value of a $10,000 investment in the Manning & Napier Fund, Inc. - Ohio Tax Exempt Series for the ten years ended December 31, 2010 to the BofA Merrill Lynch 1-12 Year Municipal Bond Index.

¹Performance numbers for the Series and Index are calculated from February 14, 1994, the Series’ inception date.

²The Series’ performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of shares. The Series’ performance is historical and may not be indicative of future results. The performance returns shown are inclusive of the net expense ratio of the Series. For the year ended December 31, 2010, this net expense ratio was 0.85%. The gross expense ratio, which does not account for any voluntary or contractual waivers currently in effect, was 0.85% for the year ended December 31, 2010.

³The BofA Merrill Lynch 1-12 Year Municipal Bond Index (formerly a Merrill Lynch Index) is an unmanaged, market weighted index comprised of investment-grade, fixed rate, coupon bearing municipal bonds with maturities greater than one year but less than twelve years. The Index returns assume reinvestment of coupons and, unlike Series returns, do not reflect any fees or expenses.

2

Shareholder Expense Example (unaudited)

As a shareholder of the Series, you may incur two types of costs: (1) transaction costs and (2) ongoing costs, including management fees and other Series expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Series and to compare these costs with the ongoing costs of investing in other mutual funds.

The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (July 1, 2010 to December 31, 2010).

Actual Expenses

The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Series’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Series’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid during the period. You may use this information to compare the ongoing costs of investing in the Series and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.

	Beginning Account Value 7/1/10		Ending Account Value 12/31/10		Expenses Paid During Period* 7/1/10-12/31/10
Actual		$1,000.00		$   978.30		$4.24
Hypothetical (5% return before expenses)		$1,000.00		$1,020.92		$4.33

*Expenses are equal to the Series’ annualized expense ratio (for the six-month period) of 0.85%, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). Expenses are based on the most recent fiscal half year; therefore, the expense ratio stated above may differ from the expense ratio stated in the financial highlights, which is based on one-year data. The Series’ total return would have been lower had certain expenses not been waived during the period.

3

Portfolio Composition as of December 31, 2010 (unaudited)

4

Investment Portfolio - December 31, 2010

	Coupon Rate		Maturity Date		Credit Rating 1 (unaudited)		Principal Amount		Value (Note 2)
OHIO MUNICIPAL SECURITIES - 96.7%
Akron, Various Purposes Impt., G.O. Bond		4.250%		12/1/2028		AA2	$	200,000	$	179,376
Akron, Various Purposes Impt., Series B, G.O. Bond		5.000%		12/1/2031		AA2		300,000		292,392
American Municipal Power-Ohio, Inc., Prairie State Energy Campus Project, Series A, Revenue Bond		5.250%		2/15/2023		A1		150,000		156,143
Avon, Public Impt., Series B, G.O. Bond		5.000%		12/1/2023		Aa1		100,000		105,945
Batavia Local School District, G.O. Bond, NATL		5.625%		12/1/2022		A1		200,000		222,996
Bedford Heights, Series A, G.O. Bond, AMBAC.		5.650%		12/1/2014		Aa3		20,000		21,497
Big Walnut Local School District, Delaware County, School Facilities Construction & Impt., G.O. Bond, AGM		4.500%		12/1/2029		Aa2		200,000		194,284
Brunswick, Limited Tax, Capital Impt., G.O. Bond		4.000%		12/1/2025		Aa2		100,000		96,612
Butler County, G.O. Bond, AMBAC		5.000%		12/1/2016		Aa1		110,000		126,051
Butler County, Water & Sewer, G.O. Bond		2.500%		12/1/2014		Aa1		100,000		102,907
Canal Winchester Local School District, G.O. Bond, AGM		4.250%		12/1/2027		Aa3		500,000		460,515
Canal Winchester Local School District, Prerefunded Balance, Series B, G.O. Bond, NATL		5.000%		12/1/2025		A1		355,000		401,970
Cincinnati City School District, Construction & Impt., G.O. Bond, FGRNA		5.250%		12/1/2022		Aa2		115,000		129,857
Cincinnati City School District, Construction & Impt., G.O. Bond, FGRNA		5.250%		12/1/2025		Aa2		600,000		658,092
Cincinnati City School District, G.O. Bond		4.500%		6/1/2018		Aa2		100,000		110,670
Cincinnati City School District, G.O. Bond		5.000%		6/1/2031		Aa2		265,000		265,779
Cincinnati Water Systems, Series B, Revenue Bond, NATL		5.000%		12/1/2023		Aa1		600,000		637,968
Cincinnati, Various Purposes Impt., Series A, G.O. Bond		5.000%		12/1/2021		Aa1		220,000		241,025
Cincinnati, Various Purposes Impt., Series B, G.O. Bond		4.250%		12/1/2026		Aa1		170,000		164,263
Cleveland Heights & University Heights City School District, G.O. Bond		5.125%		12/1/2026		Aa2		200,000		204,178
Cleveland, Income Tax, Revenue Bond		5.250%		5/15/2024		AA2		500,000		520,730
Cleveland, Water Utility Impt., Series O, Revenue Bond, NATL		5.000%		1/1/2037		Aa1		380,000		369,759
Columbus City School District, Facilities Construction & Impt., G.O. Bond		4.500%		12/1/2029		Aa2		500,000		470,675
Columbus City School District, Facilities Construction & Impt., G.O. Bond, AGM		4.250%		12/1/2032		Aa2		500,000		441,270
Columbus, Limited Tax, Series 2, G.O. Bond		5.000%		7/1/2017		Aaa		250,000		279,455

5 The accompanying notes are an integral part of the financial statements.

Investment Portfolio - December 31, 2010

	Coupon Rate		Maturity Date		Credit Rating 1 (unaudited)		Principal Amount		Value (Note 2)
OHIO MUNICIPAL SECURITIES (continued)
Columbus, Sewer Impt., Series A, Revenue Bond		4.250%		6/1/2030		Aa1	$	250,000	$	226,575
Cuyahoga Falls, G.O. Bond, NATL		5.000%		12/1/2021		Aa2		750,000		795,330
Delaware County, Capital Facilities, Series A, G.O. Bond		4.250%		12/1/2023		Aa1		100,000		101,388
Eaton Community City Schools, G.O. Bond, FGRNA		4.125%		12/1/2026		Aa2		500,000		459,840
Elyria City School District, G.O. Bond, XLCA		4.750%		12/1/2027		A1		100,000		97,499
Euclid, G.O. Bond, NATL		4.250%		12/1/2023		Aa2		465,000		468,557
Fairbanks Local School District, School Facilities Construction & Impt., G.O. Bond, AGM		4.500%		12/1/2028		Aa3		400,000		374,380
Fairborn School District, G.O. Bond, AGM		5.000%		12/1/2021		Aa3		400,000		430,096
Fairfield County, Building Impt., Prerefunded Balance, G.O. Bond		5.000%		12/1/2018		Aa2		250,000		260,575
Fairview Park City School District, G.O. Bond, NATL		5.000%		12/1/2029		Aa3		315,000		316,969
Franklin County, Various Purposes Impt., G.O. Bond		5.000%		12/1/2027		Aaa		500,000		524,390
Geneva Area City School District, G.O. Bond, NATL		4.500%		12/1/2030		Aa3		120,000		116,159
Granville Exempt Village School District, G.O. Bond, AGM		4.375%		12/1/2031		Aa1		500,000		454,890
Greater Cleveland Regional Transit Authority, Capital Impt., G.O. Bond, FGRNA		4.125%		12/1/2023		Aa2		450,000		433,080
Greene County, Limited Tax, G.O. Bond		4.500%		12/1/2035		Aa2		250,000		232,630
Greene County, Revenue Bond		3.500%		12/1/2026		Aa2		300,000		259,047
Hamilton City School District, G.O. Bond, AGM		4.250%		12/1/2030		Aa3		500,000		435,760
Hamilton County, Sewer Impt., Series A, Revenue Bond		5.000%		12/1/2032		Aa2		100,000		100,286
Hamilton Electric System, Series A, Revenue Bond, AGC		4.125%		10/1/2024		Aa3		300,000		286,170
Hamilton Waterworks System, Series A, Revenue Bond, AGC		4.625%		10/15/2029		Aa3		100,000		93,835
Hamilton, Series A, Revenue Bond, AGC		4.125%		10/15/2023		Aa3		120,000		116,918
Hancock County, Various Purposes Impt., G.O. Bond, NATL		4.000%		12/1/2016		Aa2		200,000		217,134
Harrison, Various Purposes Impt., G.O. Bond, AGM		5.250%		12/1/2038		Aa3		275,000		284,081
Huber Heights City School District, School Impt., G.O. Bond		5.000%		12/1/2036		Aa2		450,000		441,013
Indian Hill Exempt Village School District, School Impt., G.O. Bond		4.375%		12/1/2022		Aaa		250,000		258,015

The accompanying notes are an integral part of the financial statements. 6

Investment Portfolio - December 31, 2010

	Coupon Rate		Maturity Date		Credit Rating 1 (unaudited)		Principal Amount		Value (Note 2)
OHIO MUNICIPAL SECURITIES (continued)
Indian Lake Local School District, School Facilities Construction & Impt., G.O. Bond, NATL		4.500%		12/1/2021		Aa3	$	235,000	$	240,755
Ironton City School District, G.O. Bond, NATL		4.250%		12/1/2028		Baa1		500,000		449,365
Kettering City School District, G.O. Bond, AGM		4.250%		12/1/2025		Aa2		750,000		722,648
Lakewood, Water System, Revenue Bond, AMBAC		4.500%		7/1/2028		WR3		500,000		446,750
Lakota Local School District, Series A, G.O. Bond, FGRNA		5.250%		12/1/2024		Aaa		210,000		233,568
Licking Heights Local School District, School Facilities Construction & Impt., Series A, G.O. Bond, NATL		5.000%		12/1/2022		Aa2		250,000		260,250
Lima, Revenue Bond, AGM		3.750%		12/1/2023		Aa3		225,000		217,201
Lima, Revenue Bond, AGM		4.300%		12/1/2029		Aa3		200,000		193,598
Lorain City School District, Unrefunded Balance, G.O. Bond, NATL		4.750%		12/1/2025		Aa2		335,000		341,750
Lorain County, Sewer System Impt., G.O. Bond		5.000%		12/1/2039		Aa2		200,000		196,984
Lucas County, Sewer & Water District Impt., G.O. Bond		4.100%		12/1/2027		AA2		100,000		97,376
Lucas County, Various Purposes Impt., G.O. Bond		4.500%		10/1/2035		Aa2		300,000		268,623
Mahoning County, Various Purposes Impt., Revenue Bond		4.375%		12/1/2035		Aa3		230,000		214,291
Mahoning County, Various Purposes Impt., Series B, G.O. Bond, AGC		4.375%		12/1/2035		Aa3		300,000		285,765
Mansfield, Limited Tax, Various Purposes Impt., G.O. Bond, AGC		5.500%		12/1/2029		Aa3		100,000		98,952
Marion, Limited Tax, Various Purposes Impt., Series A, G.O. Bond, AGM		4.300%		12/1/2030		Aa3		100,000		95,508
Marysville Exempt Village School District, G.O. Bond, AGM		5.000%		12/1/2023		Aa3		500,000		515,850
Marysville, Sewer & Wastewater, Revenue Bond, AGC, XLCA		4.750%		12/1/2046		Aa3		180,000		159,966
Mason, Limited Tax, Various Purposes Impt., G.O. Bond		4.250%		12/1/2027		Aaa		925,000		887,195
Maumee City School District, G.O. Bond, AGM		4.600%		12/1/2031		Aa3		260,000		252,171
Maumee, Public Impt., G.O. Bond, NATL		4.125%		12/1/2018		Aa2		375,000		396,926
Miamisburg City School District, G.O. Bond		5.000%		12/1/2033		Aa2		250,000		251,940
Middletown, Various Purposes Impt., G.O. Bond, AGM		4.500%		12/1/2018		Aa2		100,000		111,511
Monroe Local School District, G.O. Bond, AMBAC		5.500%		12/1/2024		Aa3		500,000		549,645

7 The accompanying notes are an integral part of the financial statements.

Investment Portfolio - December 31, 2010

	Coupon Rate		Maturity Date		Credit Rating 1 (unaudited)		Principal Amount		Value (Note 2)
OHIO MUNICIPAL SECURITIES (continued)
Montgomery County, Various Purposes Impt., G.O. Bond		3.000%		12/1/2019		Aa1	$	250,000	$	248,833
Mount Healthy City School District, G.O. Bond, AGM		5.000%		12/1/2031		Aa3		200,000		198,708
Muskingum County, Limited Tax, Various Purposes Impt., G.O. Bond, AGC		4.300%		12/1/2028		Aa2		145,000		141,281
New Albany Plain Local School District, G.O. Bond, FGRNA		5.000%		12/1/2030		AA2		140,000		133,869
New Albany Plain Local School District, Prerefunded Balance, G.O. Bond, FGIC		5.000%		12/1/2025		Aa1		45,000		47,758
New Albany Plain Local School District, Prerefunded Balance, G.O. Bond, FGIC		5.000%		12/1/2025		Aa1		85,000		90,209
New Albany Plain Local School District, Prerefunded Balance, G.O. Bond, FGIC		5.000%		12/1/2029		Aa1		95,000		100,822
New Albany Plain Local School District, Unrefunded Balance, G.O. Bond, FGIC		5.000%		12/1/2025		Aa1		185,000		185,043
New Albany Plain Local School District, Unrefunded Balance, G.O. Bond, FGRNA		5.000%		12/1/2029		Aa1		130,000		125,070
North Royalton, Various Purposes Impt., G.O. Bond		5.250%		12/1/2028		Aa2		1,025,000		1,058,446
Ohio State Water Development Authority, Pollution Control, Revenue Bond		5.250%		12/1/2015		Aaa		200,000		231,508
Ohio State Water Development Authority, Pure Water, Series I, Revenue Bond, AMBAC		6.000%		12/1/2016		Aaa		30,000		33,691
Ohio State, Infrastructure Impt., Series A, Prerefunded Balance, G.O. Bond		5.000%		3/1/2017		Aa1		250,000		289,925
Ohio State, School Services, Series A, G.O. Bond		4.500%		9/15/2025		Aa1		700,000		701,554
Ohio State, Series C, G.O. Bond		5.000%		9/15/2020		Aa1		100,000		113,287
Olentangy Local School District, Series A, G.O. Bond, AGM		4.500%		12/1/2032		Aa1		800,000		743,048
Orange City School District, G.O. Bond		4.500%		12/1/2023		Aaa		500,000		508,570
Painesville City Local School District, G.O. Bond, FGRNA		4.500%		12/1/2025		A1		170,000		168,536
Pickerington Local School District, G.O. Bond, NATL		4.300%		12/1/2024		Baa1		300,000		289,020
Pickerington Local School District, G.O. Bond, NATL		4.250%		12/1/2034		Aa2		230,000		196,910
Portage County, Limited Tax, Various Purposes Impt., G.O. Bond		4.000%		12/1/2020		AA2		175,000		180,133
South Range Local School District, G.O. Bond, XLCA		4.500%		12/1/2035		A2		225,000		201,973
South-Western City School District, Franklin & Pickway County, G.O. Bond, AGM		4.250%		12/1/2026		Aa2		600,000		574,500

The accompanying notes are an integral part of the financial statements. 8

Investment Portfolio - December 31, 2010

	Coupon Rate	Maturity Date		Credit Rating 1 (unaudited)		Principal Amount/ Shares		Value (Note 2)
OHIO MUNICIPAL SECURITIES (continued)
Springboro Community City School District, G.O. Bond, AGM	5.250%		12/1/2032		Aa3	$	150,000	$	150,771
Sugarcreek Local School District, G.O. Bond, AGM	4.250%		12/1/2031		Aa2		750,000		643,410
Summit County, Various Purposes Impt., Series R, G.O. Bond, FGRNA	5.500%		12/1/2019		Aa1		100,000		116,678
Sylvania City School District, G.O. Bond, AGC	5.000%		12/1/2025		Aa2		270,000		278,810
Symmes Township, Limited Tax, Parkland Acquisition & Impt., G.O. Bond	5.250%		12/1/2037		Aa1		100,000		103,434
Tallmadge City School District, G.O. Bond, AGM	5.000%		12/1/2031		AA2		200,000		202,280
Tallmadge, G.O. Bond	4.250%		12/1/2030		Aa2		180,000		172,060
Tecumseh Local School District, G.O. Bond, FGRNA	4.750%		12/1/2027		A1		195,000		192,317
Toledo, Capital Impt., G.O. Bond, AGC	4.000%		12/1/2024		Aa3		100,000		92,423
Toledo, Waterworks, Revenue Bond, NATL	5.000%		11/15/2023		Aa3		100,000		102,025
Trotwood-Madison City School District, G.O. Bond, AGM	4.250%		12/1/2022		Aa3		250,000		248,490
Troy, Sewer Impt., G.O. Bond	4.750%		12/1/2024		Aa1		250,000		255,940
Van Buren Local School District, Prerefunded Balance, G.O. Bond, AGM	5.250%		12/1/2016		Aa3		300,000		313,269
Vandalia Butler City School District, G.O. Bond	5.000%		12/1/2038		Aa2		500,000		510,145
Vandalia, G.O. Bond, AMBAC	5.000%		12/1/2015		Aa2		235,000		257,207
Wadsworth City School District, G.O. Bond, AGC	5.000%		12/1/2037		AA2		180,000		182,090
Warren County, Highway Impt., G.O. Bond	4.000%		12/1/2022		Aa1		100,000		101,249
Washington Court House City School District, G.O. Bond, FGRNA	5.000%		12/1/2029		A1		500,000		496,955
West Chester Township, Various Purposes Impt., Series A, G.O. Bond	5.000%		12/1/2020		Aaa		100,000		110,245
Wood County, G.O. Bond	5.400%		12/1/2013		Aa2		15,000		15,045
TOTAL MUNICIPAL BONDS (Identified Cost $34,002,680)									33,235,151
SHORT-TERM INVESTMENTS - 3.0%
Dreyfus AMT - Free Municipal Reserves - Class R (Identified Cost $1,017,361)							1,017,361		1,017,361

9 The accompanying notes are an integral part of the financial statements.

Investment Portfolio - December 31, 2010

	Value (Note 2)
TOTAL INVESTMENTS - 99.7% (Identified Cost $35,020,041)	$	34,252,512
OTHER ASSETS, LESS LIABILITIES - 0.3%		117,243
NET ASSETS - 100%	$	34,369,755

KEY:

G.O. Bond - General Obligation Bond

Impt. - Improvement

Scheduled principal and interest payments are guaranteed by:

AGC (Assured Guaranty Corp.)

AGM (Assurance Guaranty Municipal Corp.)

AMBAC (AMBAC Assurance Corp.)

FGIC (Financial Guaranty Insurance Co.)

FGRNA (FGIC reinsured by NATL)

NATL (National Public Finance Guarantee Corp.)

XLCA (XL Capital Assurance)

The insurance does not guarantee the market value of the municipal bonds.

¹Credit ratings from Moody’s (unaudited).

²Credit ratings from S&P (unaudited).

³Credit rating has been withdrawn. As of December 31, 2010, there is no rating available (unaudited).

The Series’ portfolio holds, as a percentage of net assets, greater than 10% in bonds insured by the following companies:

NATL - 26.1%; AGM - 24.0%.

The accompanying notes are an integral part of the financial statements. 10

Statement of Assets and Liabilities

December 31, 2010

ASSETS:
Investments, at value (identified cost $35,020,041) (Note 2)	$	34,252,512
Interest receivable		177,763
TOTAL ASSETS		34,430,275
LIABILITIES:
Accrued management fees (Note 3)		16,011
Accrued fund accounting and administration fees (Note 3)		5,520
Accrued transfer agent fees (Note 3)		477
Accrued Chief Compliance Officer service fees (Note 3)		245
Audit fees payable		29,616
Printing fees payable		4,234
Other payables and accrued expenses		4,417
TOTAL LIABILITIES		60,520
TOTAL NET ASSETS	$	34,369,755
NET ASSETS CONSIST OF:
Capital stock	$	33,358
Additional paid-in-capital		35,067,396
Undistributed net investment income		36,178
Accumulated net realized gain on investments		352
Net unrealized depreciation on investments		(767,529	)
TOTAL NET ASSETS	$	34,369,755
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER SHARE - Class A ($34,369,755/3,335,822 shares)	$	10.30

11 The accompanying notes are an integral part of the financial statements.

Statement of Operations

For the Year Ended December 31, 2010

INVESTMENT INCOME:
Interest	$	1,235,268
Dividends		48
Total Investment Income		1,235,316
EXPENSES:
Management fees (Note 3)		150,692
Fund accounting and administration fees (Note 3)		45,687
Directors’ fees (Note 3)		6,973
Chief Compliance Officer service fees (Note 3)		2,630
Transfer agent fees (Note 3)		2,603
Audit fees		29,805
Custodian fees		1,702
Miscellaneous		16,410
Total Expenses		256,502
Less reduction of expenses (Note 3)		(758	)
Net Expenses		255,744
NET INVESTMENT INCOME		979,572
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments		286
Net change in unrealized depreciation on investments		(1,217,584	)
NET REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS		(1,217,298	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(237,726	)

The accompanying notes are an integral part of the financial statements. 12

Statements of Changes in Net Assets

	For  the Year Ended 12/31/10			For  the Year Ended 12/31/09
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income	$	979,572		$	749,727
Net realized gain on investments		286			130,404
Net change in unrealized appreciation (depreciation) on investments		(1,217,584	)		1,786,693
Net increase (decrease) from operations		(237,726	)		2,666,824
DISTRIBUTIONS TO SHAREHOLDERS (Note 8):
From net investment income		(996,467	)		(774,410	)
From net realized gain on investments		—			(221,596	)
Total distributions to shareholders		(996,467	)		(996,006	)
CAPITAL STOCK ISSUED AND REPURCHASED:
Net increase from capital share transactions (Note 5)		10,728,881			2,359,995
Net increase in net assets		9,494,688			4,030,813
NET ASSETS:
Beginning of year		24,875,067			20,844,254
End of year (including undistributed net investment income of $36,178 and $53,139, respectively)	$	34,369,755		$	24,875,067

13 The accompanying notes are an integral part of the financial statements.

Financial Highlights

			For the Years Ended
	12/31/10		12/31/09		12/31/08		12/31/07		12/31/06
Per share data (for a share outstanding throughout each year):
Net asset value - Beginning of year		$10.62		$9.82		$10.43		$10.46		$10.52
Income (loss) from investment operations:
Net investment income		0.351		0.361		0.38		0.34		0.38
Net realized and unrealized gain (loss) on investments		(0.33)		0.91		(0.57)		—2		(0.05)
Total from investment operations		0.02		1.27		(0.19)		0.34		0.33
Less distributions to shareholders:
From net investment income		(0.34)		(0.37)		(0.36)		(0.37)		(0.38)
From net realized gain on investments		—		(0.10)		(0.06)		—		(0.01)
Total distributions to shareholders		(0.34)		(0.47)		(0.42)		(0.37)		(0.39)
Net asset value - End of year		$10.30		$10.62		$9.82		$10.43		$10.46
Net assets - End of year (000’s omitted)		$34,370		$24,875		$20,844		$26,432		$20,612
Total return3		0.14%		13.09%		(1.74%)		3.28%		3.19%
Ratios (to average net assets)/
Supplemental Data:
Expenses*		0.85%		0.85%		0.85%		0.85%		0.85%
Net investment income		3.25%		3.39%		3.58%		3.47%		3.81%
Portfolio turnover		0%4		11%		15%		3%		9%

*The investment advisor did not impose all or a portion of its management fees, CCO fees, fund accounting and transfer agent fees, and other fees in some years and in some years paid a portion of the Series’ expenses. If these expenses had been incurred by the Series, the expense ratio (to average net assets) would have been increased by the following amounts:

  0.00%⁵ 0.03 %     0.01 %  0.00 %⁵ 0.07 %     

¹Calculated based on average shares outstanding during the year.

²Less than $0.01 per share.

³Represents aggregate total return for the periods indicated, and assumes reinvestment of all distributions. Total return would have been lower had certain expenses not been waived or reimbursed during the periods. Periods less than one year are not annualized.

⁴Less than 1%.

⁵Less than 0.01%.

The accompanying notes are an integral part of the financial statements. 14

Notes to Financial Statements

1. ORGANIZATION

Ohio Tax Exempt Series (the “Series”) is a no-load diversified series of Manning & Napier Fund, Inc. (the “Fund”). The Fund is organized in Maryland and is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company.

The Series’ investment objective is to provide as high a level of current income exempt from federal income tax and Ohio State personal income tax as the Advisor believes is consistent with the preservation of capital.

The Fund’s Advisor is Manning & Napier Advisors, Inc. (the “Advisor”). Shares of the Series are offered to investors, clients and employees of the Advisor and its affiliates. The total authorized capital stock of the Fund consists of 10.0 billion shares of common stock each having a par value of $0.01. As of December 31, 2010, 6.2 billion shares have been designated in total among 29 series, of which 100 million have been designated as Ohio Tax Exempt Series Class A common stock.

2. SIGNIFICANT ACCOUNTING POLICIES

Security Valuation

Municipal securities will normally be valued on the basis of market valuations provided by an independent pricing service (the “Service”). The Service utilizes the latest price quotations and a matrix system (which considers such factors as security prices of similar securities, yields, maturities and ratings). The Service has been approved by the Fund’s Board of Directors (the “Board”).

Short-term investments that mature in sixty days or less are valued at amortized cost, which approximates market value. Investments in open-end investment companies are valued at their net asset value per share on valuation date.

Volume and level of activity in established markets for an asset or liability are evaluated to determine whether recent transactions and quoted prices are determinative of fair value. Where there have been significant decreases in volume and level of activity, further analysis and adjustment may be necessary to estimate fair value. The Series measures fair value in these instances by the use of inputs and valuation techniques which may be based upon current market prices of securities that are comparable in coupon, rating, maturity and industry and/or expectation of future cash flows. As a result of trading in relatively thin markets and/or markets that experience significant volatility, the prices used by the Series to value these securities may differ from the value that would be realized if these securities were sold, and the differences could be material.

Securities for which representative valuations or prices are not available from the Fund’s pricing service may be valued at fair value. Due to the inherent uncertainty of valuations of such securities, the fair value may differ significantly from the values that would have been used had a ready market for such securities existed. If trading or events occurring after the close of the principal market in which securities are traded are expected to materially affect the value of those securities, then they may be valued at their fair value, taking this trading or these events into account. Fair value is determined in good faith by the Advisor under procedures approved by and under the general supervision and responsibility of the Board.

Various inputs are used in determining the value of the Series’ assets or liabilities carried at market value. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical assets and liabilities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.). Level 3 includes significant unobservable inputs (including the Series’ own assumptions in determining the fair value of investments). The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

15

Notes to Financial Statements

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

Security Valuation (continued)

The following is a summary of the valuation levels used for major security types as of December 31, 2010 in valuing the Series’ assets or liabilities carried at market value:

Description	Total		Level  1		Level  2		Level  3
Assets:
Equity securities*	$	—	$	—	$	—	$	—
Preferred securities		—		—		—		—
Debt securities:
States and political subdivisions (municipals)		33,235,151		—		33,235,151		—
Mutual funds		1,017,361		1,017,361		—		—
Other financial instruments**:		—		—		—		—
Total assets:		34,252,512		1,017,361		33,235,151		—
Liabilities:
Other financial instruments**:		—		—		—		—
Total liabilities:		—		—		—		—
Total	$	34,252,512	$	1,017,361	$	33,235,151	$	—

*Includes common stock, warrants and rights. Please see the Investment Portfolio for industry classification.

**Other financial instruments are derivative instruments not reflected in the Investment Portfolio, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument. As of December 31, 2010, the Series did not hold any derivative instruments.

There were no Level 3 securities held by the Series as of December 31, 2009 or December 31, 2010.

The Fund’s policy is to recognize transfers in and transfers out of the valuation levels as of the beginning of the reporting period. There were no significant transfers between Level 1 and Level 2 during the year ended December 31, 2010.

Additional disclosure surrounding the activity in Level 3 fair value measurement will be effective for fiscal years beginning after December 15, 2010. Management has concluded that this will not have a material impact on the Series’ financial statements.

Security Transactions, Investment Income and Expenses

Security transactions are accounted for on trade date. Dividend income is recorded on the ex-dividend date, except that if the ex-dividend date has passed, certain dividends from foreign securities are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends, if any, are recorded at the fair market value of the securities received. Interest income, including amortization of premium and accretion of discounts using the effective interest method, is earned from settlement date and accrued daily.

Expenses are recorded on an accrual basis. Most expenses of the Fund can be attributed to a specific series. Expenses which cannot be directly attributed are apportioned among the series in the Fund in such a manner as deemed equitable by the Fund’s Board, taking into consideration, among other things, the nature and type of expense.

The Series uses the identified cost method for determining realized gain or loss on investments for both financial statement and federal income tax reporting purposes.

16

Notes to Financial Statements

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

Federal Taxes

The Series’ policy is to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies. The Series is not subject to federal income tax or excise tax to the extent that the Series distributes to shareholders each year its taxable income, including any net realized gains on investments, in accordance with requirements of the Internal Revenue Code. Accordingly, no provision for federal income tax or excise tax has been made in the financial statements.

Management evaluates its tax positions to determine if the tax positions taken meet the minimum recognition threshold in connection with accounting for uncertainties in income tax positions taken or expected to be taken for the purposes of measuring and recognizing tax liabilities in the financial statements. Recognition of tax benefits of an uncertain tax position is required only when the position is “more likely than not” to be sustained assuming examination by taxing authorities. At December 31, 2010, the Series has recorded no liability for net unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken in future tax returns.

The Series files income tax returns in the U.S. federal jurisdiction and various states, as required. No income tax returns are currently under investigation. The statute of limitations on the Series’ tax returns remains open for the years ended December 31, 2007 through December 31, 2010. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.

Distributions of Income and Gains

Distributions to shareholders of net investment income are made quarterly. Distributions of net realized gains are made annually. An additional distribution may be necessary to avoid taxation of the Series. Distributions are recorded on the ex-dividend date.

Indemnifications

The Fund’s organizational documents provide former and current directors and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund’s maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.

Other

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.

3. TRANSACTIONS WITH AFFILIATES

The Fund has an Investment Advisory Agreement (the “Agreement”) with the Advisor, for which the Series pays a fee, computed daily and payable monthly, at an annual rate of 0.50% of the Series’ average daily net assets.

Under the Agreement, personnel of the Advisor provide the Series with advice and assistance in the choice of investments and the execution of securities transactions, and otherwise maintain the Series’ organization. The Advisor also provides the Fund with necessary office space and fund administration and support services. The salaries of all officers of the Fund (except a percentage of the Fund’s Chief Compliance Officer’s salary, which is paid by the Fund), and of all Directors who are “affiliated persons” of the Fund, or of the Advisor, and all personnel of the Fund, or of the Advisor, performing services relating to research, statistical and investment activities, are paid by the

17

Notes to Financial Statements

3. TRANSACTIONS WITH AFFILIATES (continued)

Advisor. Each “non-affiliated” Director receives an annual stipend, which is allocated among all the active series of the Fund. In addition, these Directors also receive a fee per Board meeting attended plus a fee for each committee meeting attended.

The Advisor has contractually agreed, until at least April 30, 2012, to waive its fee and, if necessary, pay other operating expenses of the Series in order to maintain total direct annual fund operating expenses for the Series at no more than 0.85% of average daily net assets each year. For the year ended December 31, 2010, the Advisor voluntarily waived fees of $758, which are included as a reduction of expenses on the Statement of Operations. The Advisor is not eligible to recoup any expenses that have been waived or reimbursed in prior years.

Manning & Napier Investor Services, Inc., a registered broker-dealer affiliate of the Advisor, acts as distributor for the Fund’s shares. The services of Manning & Napier Investor Services, Inc. are provided at no additional cost to the Series.

The Advisor has agreements with PNC Global Investment Servicing (U.S.) Inc. (“PNCGIS”) under which PNCGIS serves as sub-accountant services agent and sub-transfer agent. The Fund pays the Advisor an annual fee related to fund accounting and administration of 0.0175% on the first $3 billion of average daily net assets (excluding Target Series); 0.015% on the next $3 billion of average daily net assets (excluding Target Series); and 0.01% of the average daily net assets in excess of $6 billion (excluding Target Series); plus a base fee of $25,500 per Series. Transfer Agent fees are charged to the Fund on a per account basis. Additionally, certain transaction- and cusip-based fees and out-of-pocket expenses, including charges for reporting relating to the Fund’s compliance program, are charged.

Effective July 1, 2010, PNCGIS was sold to The Bank of New York Mellon Corporation, the Series’ custodian. At the close of the sale, PNCGIS changed its name to BNY Mellon Investment Servicing (U.S.) Inc. (“BNY”).

Expenses not directly attributable to a Series are allocated based on each Series’ relative net assets or number of accounts, depending on the expense.

4. PURCHASES AND SALES OF SECURITIES

For the year ended December 31, 2010, purchases and sales of securities, other than U.S. Government securities and short-term securities, were $10,731,463 and $20,000, respectively. There were no purchases or sales of U.S. Government securities.

5. CAPITAL STOCK TRANSACTIONS

Transactions in shares of Ohio Tax Exempt Series were:

	For the Year Ended 12/31/10						For the Year Ended 12/31/09
	Shares			Amount			Shares			Amount
Sold		1,165,715		$	12,625,181			673,194		$	7,080,565
Reinvested		89,722			946,551			91,022			955,397
Repurchased		(262,403	)		(2,842,851	)		(543,835	)		(5,675,967	)
Total		993,034		$	10,728,881			220,381			2,359,995

Substantially all of the Series’ shares represent investments by fiduciary accounts over which the Advisor has sole investment discretion.

18

Notes to Financial Statements

6. FINANCIAL INSTRUMENTS

The Series may trade in instruments including written and purchased options, forward foreign currency exchange contracts and futures contracts and other derivatives in the normal course of investing activities to assist in managing exposure to various market risks. Investments in these instruments may subject the Series to various elements of risk, which may involve, to a varying degree, elements of risk in excess of the amounts recognized for financial statement purposes. These risks include: the risk that changes in the value of a derivative may not correlate perfectly with the underlying asset, rate or index, counterparty credit risk related to over the counter derivatives counterparties’ failure to perform under contract terms, liquidity risk related to the lack of a liquid market for these contracts allowing the fund to close out its position(s) and documentation risk relating to disagreement over contract terms. No such investments were held by the Series during the year ended December 31, 2010.

7. CONCENTRATION OF CREDIT

The Series primarily invests in debt obligations issued by the State of Ohio and its political subdivisions, agencies and public authorities to obtain funds for various public purposes. The Series is more susceptible to factors adversely affecting issues of Ohio municipal securities than is a municipal bond fund that is not concentrated in these issues to the same extent.

8. FEDERAL INCOME TAX INFORMATION

The amount and characterization of certain income and capital gains to be distributed are determined in accordance with federal income tax regulations, which may differ from accounting principles generally accepted in the United States of America. These differences are primarily due to differing book and tax treatments in the timing of the recognition of net investment income or gains and losses, including market discount. The Series may periodically make reclassifications among its capital accounts to reflect income and gains available for distribution (or available capital loss carryovers) under income tax regulations without impacting the Series’ net asset value. Any such reclassifications are not reflected in the financial highlights.

The tax character of distributions paid were as follows:

	For the  Year Ended 12/31/10		For the  Year Ended 12/31/09
Tax exempt income	$	996,467	$	774,419
Long-term capital gains		—		221,587

At December 31, 2010, the tax basis of distributable earnings and the net unrealized appreciation based on the identified cost of investments for federal income tax purposes were as follows:

Cost for federal income tax purposes	$	35,017,120
Unrealized appreciation	$	312,179
Unrealized depreciation		(1,076,787	)
Net unrealized depreciation	$	(764,608	)
Undistributed tax exempt income		33,257
Undistributed long-term gains		352

19

Report of Independent Registered Public Accounting Firm

To the Board of Directors of Manning & Napier Fund, Inc. and Shareholders of Ohio Tax Exempt Series:

In our opinion, the accompanying statement of assets and liabilities, including the investment portfolio (except for credit ratings), and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the Ohio Tax Exempt Series (a series of Manning & Napier Fund, Inc., hereafter referred to as the “Series”) at December 31, 2010, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Series’ management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2010 by correspondence with the custodian, provide a reasonable basis for our opinion.

New York, New York

February 22, 2011

20

Supplemental Tax Information (unaudited)

All designations are based on financial information available as of the date of this annual report and, accordingly are subject to change.

Pursuant to Section 852 of the Internal Revenue Code, as amended, the Series hereby designates $0 as capital gains for its taxable year ended December 31, 2010. In addition, the Series hereby designates $996,467 as tax exempt dividends for the year ended December 31, 2010. For each item it is the intention of the Series to designate the maximum allowable under tax law.

21

Renewal of Investment Advisory Agreement (unaudited)

At the Manning & Napier Fund, Inc. (the “Fund”) Board of Directors’ (the “Board”) meeting, held on November 17, 2010, the Investment Advisory Agreement (the “Agreement”) between the Fund and Manning & Napier Advisors, Inc. (the “Advisor”) was reviewed by the Board for renewal. In connection with the decision whether to renew the Agreement, a variety of material was prepared for and reviewed by the Board.

Representatives of the Advisor attended the meeting and presented additional oral and written information to the Board to assist the Board in its considerations. The discussion immediately below outlines the materials and information presented to the Board in connection with the Board’s 2010 Annual Review of the Agreement and the conclusions made by the Directors when determining to continue the Agreement.

• The Board considered the services provided by the Advisor under the Agreement including, among others: deciding what securities to purchase and sell for each Series; arranging for the purchase and sale of such securities by placing orders with broker-dealers; administering the affairs of the Fund (including the books and records of the Fund not maintained by third party service providers such as the custodian or sub-transfer agent); arranging for the insurance coverage for the Fund; and supervising the preparation of tax returns, SEC filings (including registration statements) and reports to shareholders for the Fund. The Board also considered the nature and quality of such services provided under the Agreement in light of the Advisor’s services provided to the Fund for 24 years. The Board discussed the quality of these services with representatives from the Advisor and concluded that the Advisor was performing its services to the Fund required under the Agreement in a reasonable manner.

• The Board considered the investment performance of the various Series of the Fund. The investment performance for each Series was reviewed on a cumulative basis since inception and on a one year basis. In addition, annualized performance for the following time periods was considered: inception, three year, five year, ten year, and current market cycle. A market cycle includes periods of both rising and falling markets. Returns for established benchmark indices for each Series were provided for each time period. The Board noted that the various Series were competitive against their respective benchmarks and/or peer groups over various time periods, but in particular over the full market cycle period relevant for the Series. In addition, the Board considered at the meeting (and considers on a quarterly basis) a peer group performance analysis consisting of Morningstar universes of mutual funds with similar investment objectives. The Board discussed the performance with representatives from the Advisor and concluded that the investment performance of each of the Fund’s Series was reasonable based on the Fund’s actual performance and comparative performance, especially performance over the current market cycle.

• The Board considered the costs of the Advisor’s services and the profits of the Advisor as they relate to the Advisor’s services to the Fund under the Agreement. In reviewing the Advisor’s costs and profits, the Board discussed the Advisor’s revenues generated from the Fund (on both an actual and adjusted basis) and its expenses associated with providing the services under the Agreement. In addition, the Board reviewed the Advisor’s expenses associated with Fund activities outside of the Agreement (such as expense reimbursements pursuant to expense caps and payments made by the Advisor to third party platforms on which shares of the Fund are available for purchase). It was noted by representatives of the Advisor that 11 of the 27 active Series of the Fund are currently experiencing expenses above the capped expense ratios. After discussing the above costs and profits, the Board concluded that the Advisor’s profitability relating to its services provided under the Agreement was reasonable.

• The Board considered the fees and expenses of the various Series of the Fund. The Advisor presented the advisory fees and total expenses for each Series, including the advisory fee adjusted for any expense waivers or reimbursements (either contractual or voluntary) paid by the Advisor. The advisory fees and expense ratios of each Series were compared to an average (on both a mean and median basis) of similar funds as disclosed on the Morningstar database. Representatives of the Advisor discussed with the Board the levels of its advisory

22

Renewal of Investment Advisory Agreement (unaudited)

fee for each Series of the Fund and as compared to the median and mean advisory fees for similar funds as listed on Morningstar. Expense ratios for every Series, except the Pro-Blend’s Class R and Class C, and Target Class R and Class C, are currently below the median and mean for similar funds as listed on Morningstar. Based on their review of the information provided, the Board concluded that the fees and expenses of each Series of the Fund were reasonable on a comparative basis.

• The Board also considered the other benefits the Advisor derives from its relationship with the Fund. Such other benefits include certain research products provided by soft dollars. Given the level of soft dollar transactions involving the Fund, the Board concluded that these additional benefits to the Advisor were reasonable.

• In addition to the factors described above, the Board considered the Advisor’s personnel, investment strategies, policies and procedures relating to compliance with personal securities transactions, and reputation, expertise and resources in domestic and foreign financial markets. The Board concluded that these factors support the conclusion that the Advisor performs its services in a reasonable manner.

• The Board did not consider economies of scale at this time because of the multiple uses of the Fund (for the Advisor’s discretionary investment account clients in addition to direct investors), the current profitability of the Advisor’s services to the Fund under the Agreement, and the overall size of the Fund complex.

Based on the Board’s deliberations and their evaluation of the information described above, the Board, including a majority of Directors that are not “interested persons” as defined in the Investment Company Act of 1940, concluded that the compensation under the Agreement was fair and reasonable in light of the services and expenses and such other matters as the Directors considered to be relevant in the exercise of their reasonable judgment. Accordingly, the Board approved the renewal of the Agreement. In the course of their deliberations, the Directors did not identify any particular information that was all important or controlling.

23

Directors’ and Officers’ Information (unaudited)

The Statement of Additional Information provides additional information about the Fund’s directors and officers and can be obtained without charge by calling 1-800-466-3863, at www.manningnapieradvisors.com, or on the EDGAR Database on the SEC Internet web site (http:// www.sec.gov). The following chart shows certain information about the Fund’s officers and directors, including their principal occupations during the last five years. Unless specific dates are provided, the individuals have held the listed positions for longer than five years.

INTERESTED DIRECTOR/OFFICER

Name:	B. Reuben Auspitz*
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	63
Current Position(s) Held with Fund:	Principal Executive Officer, President, Chairman & Director
Term of Office1 & Length of Time Served:	Indefinite - Director since 1984; Vice President 1984 - 2003; President since 2004; Principal Executive Officer since 2002
Principal Occupation(s) During Past 5 Years:	Executive Vice President; Executive Group Member**; Chief Compliance Officer since 2004; Vice Chairman since June 2010; Co-Executive Director from 2003-2010 - Manning & Napier Advisors, Inc. President;
	Director - Manning & Napier Investor Services, Inc.
	Holds or has held one or more of the following titles for various subsidiaries and affiliates: President, Vice President, Director, Chairman, Treasurer, Chief Compliance Officer or Member.
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
INDEPENDENT DIRECTORS
Name:	Paul A. Brooke
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	65
Current Position(s) Held with Fund:	Director, Audit Committee Member, Governance & Nominating Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 2007
Principal Occupation(s) During Past 5 Years:	Chairman & CEO, Alsius Corp. (investments); Managing Member, PMSV
	Holdings LLC (investments)
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	Incyte Corp. (2000-present)
	ViroPharma, Inc. (2000-present)
	HLTH Corp. (2000-present)
	Cheyne Capital International (2000-present)
	MPM Bio-equities (2000-present)
	GMP Companies (2000-present)
	HoustonPharma (2000-present)
Name:	Richard M. Hurwitz
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	47
Current Position(s) Held with Fund:	Director, Audit Committee Member, Governance &
	Nominating Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 2009
Principal Occupation(s) During Past 5 Years:	Chief Executive Officer, Pictometry International Corp. since August 2010 (provider of georeferenced, aerial image libraries and related software) Managing Partner (2006-July 2010) - Aegis Investment Partners, LLC (investments); Founder and Managing Partner (2004-2005) - Village Markets, LLC (groceries)
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	Pictometry International Corp. (2000-2010)
	Pioneering Technologies (2006-2009)
	Vensearch Capital Corp. (2003-2007)

24

Directors’ and Officers’ Information (unaudited)

INDEPENDENT DIRECTORS (continued)
Name:	Stephen B. Ashley
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	70
Current Position(s) Held with Fund:	Director, Audit Committee Member, Governance & Nominating Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 1996
Principal Occupation(s) During Past 5 Years:	Chairman, Director, President & Chief Executive Officer, The Ashley Group (property management and investment). Chairman (non-executive) 2004-2008; Director 1995-2008 - Fannie Mae (mortgage)
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	The Ashley Group (1995-2008) Genesee Corporation (1987-2007)
Name:	Peter L. Faber
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	72
Current Position(s) Held with Fund:	Director, Governance & Nominating Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 1987
Principal Occupation(s) During Past 5 Years:	Senior Counsel since 2006, Partner (1995 - 2006) - McDermott, Will & Emery LLP (law firm)
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	Partnership for New York City, Inc. (non-profit) New York Collegium (non-profit) Boston Early Music Festival (non-profit)
Name:	Harris H. Rusitzky
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	76
Current Position(s) Held with Fund:	Director, Audit Committee Member, Governance & Nominating Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 1985
Principal Occupation(s) During Past 5 Years:	President, The Greening Group (business consultants) since 1994; Partner, The Restaurant Group (restaurants) since 2006
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
OFFICERS
Name:	Jeffrey S. Coons, Ph.D., CFA
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	47
Current Position(s) Held with Fund:	Vice President
Term of Office1 & Length of Time Served:	Since 2004
Principal Occupation(s) During Past 5 Years:	President since 2010, Co-Director of Research since 2002, Executive Group Member** since 2003, - Manning & Napier Advisors, Inc. Holds one or more of the following titles for various subsidiaries and affiliates: President, Director, Treasurer or Senior Trust Officer.
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A

25

Directors’ and Officers’ Information (unaudited)

OFFICERS (continued)

Name:	Beth Galusha
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	49
Current Position(s) Held with Fund:	Assistant Chief Financial Officer
Term of Office1 & Length of Time Served:	Assistant Chief Financial Officer since 2010
Principal Occupation(s) During Past 5 Years:	Chief Financial Officer and Treasurer, Manning & Napier Advisors, Inc. Holds one or more of the following titles for various affiliates: Chief Financial Officer, Director, or Treasurer
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
Name:	Christine Glavin
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	44
Current Position(s) Held with Fund:	Principal Financial Officer, Chief Financial Officer
Term of Office1 & Length of Time Served:	Principal Financial Officer since 2002; Chief Financial Officer since 2001
Principal Occupation(s) During Past 5 Years:	Fund Reporting Manager, Manning & Napier Advisors, Inc. since 1997
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
Name:	Jodi L. Hedberg
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	43
Current Position(s) Held with Fund:	Corporate Secretary, Chief Compliance Officer, Anti-Money Laundering Compliance Officer
Term of Office1 & Length of Time Served:	Corporate Secretary since 1997; Chief Compliance Officer since 2004
Principal Occupation(s) During Past 5 Years:	Director of Compliance, Manning & Napier Advisors, Inc. and affiliates since 1990 (title change in 2005 from Compliance Manager to Director of Compliance); Corporate Secretary, Manning & Napier Investor Services, Inc. since 2006
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
Name:	Richard Yates
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	45
Current Position(s) Held with Fund:	Chief Legal Officer
Term of Office1 & Length of Time Served:	Chief Legal Officer since 2004
Principal Occupation(s) During Past 5 Years:	Counsel - Manning & Napier Advisors, Inc. & affiliates since 2000; Holds one or more of the following titles for various affiliates; Director or Corporate Secretary
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A

*Interested Director, within the meaning of the Investment Company Act of 1940 by reason of his position with the Fund’s investment advisor and distributor. Mr. Auspitz serves as the Executive Vice President and Director, Manning & Napier Advisors, Inc. and President and Director, Manning & Napier Investor Services, Inc., the Fund’s distributor.

**Prior to June 2010, the Executive Group, consisting of senior executive employee-owners, performed the duties of the Office of the Chief Executive of the Advisor. Effective June 2010, the Executive Group serves as an advisory board to the Chief Executive Officer.

¹The term of office for President, Vice President, Chief Financial Officer, Assistant Chief Financial Officer, Chief Legal Officer and Corporate Secretary is one year and until their respective successors are chosen and qualified. All other officers’ terms are indefinite.

26

Literature Requests (unaudited)

Proxy Voting Policies and Procedures

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available, without charge, upon request:

By phone	1-800-466-3863
On the Securities and Exchange Commission’s (SEC) web site	http://www.sec.gov

Proxy Voting Record

Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30^th is available, without charge, upon request:

By phone	1-800-466-3863
On the SEC’s web site	http://www.sec.gov

Quarterly Portfolio Holdings

The Series’ complete schedule of portfolio holdings for the 1^st and 3^rd quarters of each fiscal year are provided on

Form N-Q, and are available, without charge, upon request:

By phone	1-800-466-3863
On the SEC’s web site	http://www.sec.gov

The Series’ Form N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

Prospectus and Statement of Additional Information (SAI)

The prospectus and SAI provide additional information about each Series, including charges, expenses and risks. These documents are available, without charge, upon request:

By phone	1-800-466-3863
On the SEC’s web site	http://www.sec.gov
On the Advisor’s web site	http://www.manning-napier.com

Additional information available at www.manning-napier.com

1. Fund Holdings - Month-End

2. Fund Holdings - Quarter-End

3. Shareholder Report - Annual

4. Shareholder Report - Semi-Annual

MNOHTES-12/10-AR

Management Discussion and Analysis (unaudited)

Dear Shareholders:

As well-defined swings in sentiment drove market fluctuations in 2010, the fixed income markets generally had favorable results for the year. Returns were broadly positive throughout the first three quarters of the year. However, while equities finished the year with a strong rally, fixed income markets generally took a negative turn at the end of 2010. After eight consecutive quarters of positive performance, broad fixed income markets suffered losses in the fourth quarter.

While municipal securities posted gains for the year, the sector had the weakest fixed income returns in 2010, as credit concerns and supply and demand changes caused noteworthy losses during the last quarter. The Bank of America Merrill Lynch 1-12 Year Municipal Bond Index earned 3.04% during the year. With a return of 0.41%, the Diversified Tax Exempt Series trailed its benchmark over the last twelve months.

The municipal bond market generally performed well in the first three quarters of the year, a reflection of attractive supply and demand dynamics. During this time, the fundamentals in the tax-exempt marketplace remained strong, with demand rising because of the likelihood of higher taxes in the top tax brackets, and supply for longer-term tax-exempt issues declining because of the popularity of the alternative Build America Bond program. However, amid heightened concern about municipal defaults, the municipal bond market struggled during the fourth quarter.

While credit issues exist in certain areas of the municipal market, the Advisor does not believe the broad municipal credit environment has materially deteriorated. In fact, municipal defaults are rare, and municipalities typically pay their debts in full even if they are forced to restructure. Rather, much of the losses at the end of the year were likely due to supply and demand shifts within the sector. The recent tax compromise, which extended the Bush-era tax cuts for all income brackets, lessened the immediate demand for tax-shielding investments, and supply is expected to increase because of the expiration of the Build America Bond program, which had limited longer-term, tax-exempt supply, thus benefiting the municipal market. Given these factors, municipal yields increased during the fourth quarter. While rising yields equate to price declines, the Advisor believes this yield shift has enhanced the relative value of municipal bonds versus other sectors of the fixed income market.

Throughout 2010, the Series continued to focus on high quality bonds with an emphasis on the underlying credit quality, which provides additional security in the midst of a tough credit and economic environment. Specifically, during the past year the underlying credit quality of the bonds in the Series was rated investment grade or higher, and the types of holdings included general obligation debt, pre-refunded bonds, and revenue debt associated with necessary municipal services. While this higher quality bias leads to slightly lower relative yields than the overall municipal market, the Advisor believes the safety and liquidity of such issues justifies the quality bias.

Over the past year, the Series had a significant exposure to securities in the intermediate to longer-term maturity range as compared to the benchmark, which holds only minimal securities in this range. This intermediate to longer-term weighting was the primary driver of relative underperformance in 2010. While the current positioning helped relative results during several periods last year, particularly when municipal yields fell to historic lows during the third quarter, this positioning noticeably detracted from returns when yields rose during the fourth quarter, causing the Series to lag its benchmark for the year. However, given the slow growth economic environment, the Advisor believes the intermediate to longer-term maturity structure continues to be the most suitable strategy.

As the markets unfold in 2011, it will be important to monitor trends such as state and local budgets, monetary policy, and inflation expectations. With this mindset, Manning & Napier remains committed to our active and selective investment approach to fixed income. Staying focused on the fundamentals and maintaining our selective investment process helped us earn solid returns through the volatile markets of 2010, and we believe these qualities will remain important in the environment ahead.

As always, we appreciate your business.

Sincerely,

Manning & Napier Advisors, Inc.

1

Performance Update as of December 31, 2010 (unaudited)

	Average Annual Total Returns As of December 31, 2010
	One Year			Five Year			Ten Year			Since Inception 1
Manning & Napier Fund, Inc. - Diversified Tax Exempt Series2		0.41	%		3.59	%		4.18	%		4.49%
Bank of America (BofA) Merrill Lynch 1-12 Year Municipal Bond Index3		3.04	%		4.71	%		4.91	%		5.15%

The following graph compares the value of a $10,000 investment in the Manning & Napier Fund, Inc. - Diversified Tax Exempt Series for the ten years ended December 31, 2010 to the BofA Merrill Lynch 1-12 Year Municipal Bond Index.

¹Performance numbers for the Series and Index are calculated from February 14, 1994, the Series’ inception date.

²The Series’ performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of shares. The Series’ performance is historical and may not be indicative of future results. The performance returns shown are inclusive of the net expense ratio of the Series. For the year ended December 31, 2010, this net expense ratio was 0.58%. The gross expense ratio, which does not account for any voluntary or contractual waivers currently in effect, was 0.58% for the year ended December 31, 2010.

³The BofA Merrill Lynch 1-12 Year Municipal Bond Index (formerly a Merrill Lynch Index) is an unmanaged, market weighted index comprised of investment-grade, fixed rate, coupon bearing municipal bonds with maturities greater than one year but less than twelve years. The Index returns assume reinvestment of coupons and, unlike Series returns, do not reflect any fees or expenses.

2

Shareholder Expense Example (unaudited)

As a shareholder of the Series, you may incur two types of costs: (1) transaction costs and (2) ongoing costs, including management fees and other Series expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Series and to compare these costs with the ongoing costs of investing in other mutual funds.

The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (July 1, 2010 to December 31, 2010).

Actual Expenses

The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Series’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Series’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid during the period. You may use this information to compare the ongoing costs of investing in the Series and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.

	Beginning Account  Value 7/1/10	Ending Account  Value 12/31/10	Expenses Paid During Period* 7/1/10-12/31/10
Actual	$1,000.00	$  978.50	$2.94
Hypothetical (5% return before expenses)	$1,000.00	$1,022.23	$3.01

*Expenses are equal to the Series’ annualized expense ratio (for the six-month period) of 0.59%, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). Expenses are based on the most recent fiscal half year; therefore, the expense ratio stated above may differ from the expense ratio stated in the financial highlights, which is based on one-year data. The Series’ total return would have been lower had certain expenses not been waived during the period.

3

Portfolio Composition as of December 31, 2010 (unaudited)

Credit Quality Ratings2,3
Aaa	19.9%
Aa	56.7%
A	13.2%
Baa	4.5%
Unrated investments	1.0%
Cash, short-term investments, and other assets, less liabilities	4.7%
2As a percentage of net assets. 3Based on ratings from Moody’s, or the S&P equivalent. The Series may use different ratings provided by other rating agencies for purposes of determining compliance with the Series’ investment policies.

Top Ten States4
Florida	4.9%
Texas	4.9%
South Carolina	4.7%
Washington	4.6%
New York	4.5%
Indiana	4.1%
Massachusetts	3.8%
Pennsylvania	3.5%
Virginia	3.4%
Michigan	3.4%
4As a percentage of total investments.

4

Investment Portfolio - December 31, 2010

	Coupon Rate	Maturity Date		Credit Rating1 (unaudited)	Principal Amount		Value (Note 2)
MUNICIPAL BONDS - 95.3%
ALABAMA - 1.1%
Alabama State, Series C, G.O. Bond	3.250%		6/1/2021	Aa1	$	1,500,000	$	1,447,230
Fort Payne Waterworks Board, Revenue Bond, AMBAC	3.500%		7/1/2015	WR2		665,000		681,279
Hoover Board of Education, Special Tax Warrants, NATL	5.250%		2/15/2017	Aa2		500,000		503,005
Odenville Utilities Board, Water, Revenue Bond, NATL	4.300%		8/1/2028	Baa1		500,000		484,375
								3,115,889
ALASKA - 0.2%
Alaska Municipal Bond Bank Authority, Series 1, Revenue Bond, NATL	4.100%		6/1/2017	Aa2		455,000		473,082
ARIZONA - 2.6%
Goodyear, G.O. Bond, NATL	4.375%		7/1/2020	Aa2		680,000		702,134
Mesa, G.O. Bond, FGRNA	4.125%		7/1/2027	Aa2		2,215,000		2,056,672
Phoenix, Series B, G.O. Bond	4.200%		7/1/2021	Aa1		1,500,000		1,541,160
Salt River Project Agricultural Impt. & Power District, Series A, Revenue Bond	5.000%		1/1/2035	Aa1		1,700,000		1,700,000
Yuma County Library District, Series A, G.O. Bond, AMBAC	4.500%		7/1/2035	Aa3		1,200,000		1,064,640
								7,064,606
ARKANSAS - 0.8%
Arkansas State, Water Utility Impt., Series A, G.O. Bond	4.500%		7/1/2044	Aa1		1,000,000		932,940
Bentonville School District No. 6, Series A, G.O. Bond	4.500%		6/1/2040	Aa2		1,000,000		921,910
Hot Springs, Public Impt., Revenue Bond, AGC.	4.625%		12/1/2037	AA3		500,000		476,670
								2,331,520
CALIFORNIA - 3.0%
California State, G.O. Bond	5.250%		2/1/2023	A1		500,000		512,950
California State, G.O. Bond	4.750%		12/1/2028	A1		795,000		722,504
California State, Various Purposes Impt., G.O. Bond, AMBAC	4.250%		12/1/2035	A1		1,140,000		894,889
Campbell Union School District, G.O. Bond, AGM	4.375%		8/1/2027	Aa2		1,810,000		1,668,060

The accompanying notes are an integral part of the financial statements. 5

Investment Portfolio - December 31, 2010

	Coupon Rate		Maturity Date		Credit Rating 1 (unaudited)		Principal Amount		Value (Note 2)
MUNICIPAL BONDS (continued)
CALIFORNIA (continued)
Chula Vista Elementary School District, Series F, G.O. Bond, NATL		4.800%		8/1/2024		Baa1	$	435,000	$	434,382
Chula Vista Elementary School District, Series F, G.O. Bond, NATL		4.875%		8/1/2025		Baa1		425,000		422,573
Los Angeles Unified School District, Series B, G.O. Bond, AMBAC		4.500%		7/1/2027		Aa2		840,000		760,679
Oak Valley Hospital District, G.O. Bond, FGRNA		4.500%		7/1/2025		A1		1,395,000		1,251,692
Richmond Joint Powers Financing Authority, Series A, Tax Allocation, NATL		5.250%		9/1/2025		Baa1		1,570,000		1,515,395
										8,183,124
COLORADO - 0.8%
Colorado Water Resources & Power Development Authority, Water Resource, Series D, Revenue Bond, AGM		4.375%		8/1/2035		Aa2		1,420,000		1,269,295
Commerce City, Certificate of Participation, AMBAC		4.750%		12/15/2032		A3		1,000,000		884,460
										2,153,755
CONNECTICUT - 0.6%
Stamford, G.O. Bond		4.400%		2/15/2026		Aa1		1,545,000		1,553,698
DELAWARE - 1.0%
New Castle County, Series A, G.O. Bond		4.250%		7/15/2025		Aaa		1,500,000		1,515,405
New Castle County, Series A, G.O. Bond		4.250%		7/15/2026		Aaa		1,265,000		1,271,730
										2,787,135
DISTRICT OF COLUMBIA - 0.8%
District of Columbia, Series A, G.O. Bond, FGRNA		4.750%		6/1/2033		Aa2		2,500,000		2,345,700
FLORIDA - 4.8%
Cape Coral, Water Utility Impt., Special Assessment, NATL		4.500%		7/1/2021		A2		1,845,000		1,820,701
Florida State Board of Education, Capital Outlay, Public Education, Series A, G.O. Bond, AGM		4.500%		6/1/2025		Aa1		1,280,000		1,285,555

6 The accompanying notes are an integral part of the financial statements.

Investment Portfolio - December 31, 2010

	Coupon Rate	Maturity Date		Credit Rating1 (unaudited)	Principal Amount		Value (Note 2)
MUNICIPAL BONDS (continued)
FLORIDA (continued)
Florida State Board of Education, Capital Outlay, Public Education, Series D, G.O. Bond	5.000%		6/1/2016	Aa1	$	2,000,000	$	2,257,380
Florida State Department of Transportation, G.O. Bond	5.000%		7/1/2027	Aa1		1,000,000		1,006,300
Fort Lauderdale, Water Utility Impt., Revenue Bond	4.500%		9/1/2038	Aa1		1,000,000		892,470
Miami-Dade County, Water & Sewer Systems, Revenue Bond, AGM	5.000%		10/1/2039	Aa2		1,500,000		1,455,375
Palm Beach County, FPL Reclaimed Water Project, Revenue Bond	5.000%		10/1/2040	Aaa		1,020,000		1,015,226
Panama City Beach, Water Utility Impt., Revenue Bond, AGC	5.000%		6/1/2039	AA3		1,000,000		954,740
Tampa Bay Water Utility System, Revenue Bond	5.000%		10/1/2038	Aa2		1,000,000		985,160
Tohopekaliga Water Authority, Utility System, Series A, Revenue Bond, AGM	5.000%		10/1/2028	Aa2		510,000		513,606
Winter Park, Electric Impt., Series A, Revenue Bond, AGM	5.000%		10/1/2029	Aa3		1,000,000		1,001,330
Winter Park, Impt., Revenue Bond	5.000%		12/1/2034	Aa2		250,000		243,857
								13,431,700
GEORGIA - 3.1%
Atlanta, Prerefunded Balance, G.O. Bond	5.600%		12/1/2018	Aa2		350,000		354,900
Atlanta, Water & Wastewater, Revenue Bond, AGM	5.000%		11/1/2043	Aa3		1,500,000		1,399,395
Atlanta, Water & Wastewater, Series A, Revenue Bond, NATL	5.000%		11/1/2033	A1		310,000		294,205
Coweta County Water & Sewage Authority, Series A, Revenue Bond, AGM	4.250%		6/1/2040	Aa3		1,500,000		1,290,465
Dekalb County, Special Transportation Parks & Greenspace, G.O. Bond	4.375%		12/1/2030	Aa3		1,000,000		970,820
Dekalb County, Water & Sewer, Series A, Revenue Bond	5.000%		10/1/2035	Aa1		1,000,000		995,700
Fulton County, Water Utility Impt., Revenue Bond, FGRNA	5.000%		1/1/2035	Aa2		1,000,000		983,530
Georgia State, Prerefunded Balance, Series B, G.O. Bond	5.650%		3/1/2012	Aaa		5,000		5,298
Georgia State, Series B, G.O. Bond	4.000%		3/1/2022	Aaa		1,270,000		1,289,596
Georgia State, Unrefunded Balance, Series B, G.O. Bond	5.650%		3/1/2012	Aaa		195,000		206,747

The accompanying notes are an integral part of the financial statements. 7

Investment Portfolio - December 31, 2010

	Coupon Rate		Maturity Date		Credit Rating 1 (unaudited)		Principal Amount		Value (Note 2)
MUNICIPAL BONDS (continued)
GEORGIA (continued)
Madison, Water & Sewer, Revenue Bond, AMBAC		4.625%		7/1/2030		WR2	$	1,000,000	$	883,030
										8,673,686
HAWAII - 0.3%
Honolulu County, Public Impt., Series B, G.O. Bond		4.750%		12/1/2035		Aa1		1,000,000		957,700
ILLINOIS - 2.3%
Chicago, Series A, G.O. Bond, AGM		4.750%		1/1/2038		Aa3		1,500,000		1,304,820
Chicago, Unrefunded Balance, Series A, G.O. Bond, NATL		5.000%		1/1/2034		Aa3		520,000		461,505
Illinois State, G.O. Bond		5.000%		12/1/2027		A1		600,000		542,076
Illinois State, G.O. Bond, NATL		5.250%		10/1/2018		A1		2,000,000		2,007,020
Springfield Metropolitan Sanitation District, Series A, G.O. Bond		4.750%		1/1/2034		AA3		1,115,000		1,045,301
Springfield, Electric Power & Light, Revenue Bond, NATL		5.000%		3/1/2035		A1		1,000,000		959,310
										6,320,032
INDIANA - 4.0%
Avon Community School Building Corp., Revenue Bond, AMBAC		4.250%		7/15/2018		A3		1,450,000		1,519,702
Avon Community School Building Corp., Revenue Bond, AMBAC		4.750%		1/15/2032		A3		1,015,000		923,122
Frankfort High School Elementary School Building Corp., Revenue Bond, AGM		4.750%		7/15/2025		Aa3		1,500,000		1,517,445
Indiana Municipal Power Agency, Series A, Revenue Bond, NATL		5.000%		1/1/2042		A1		1,000,000		921,830
Indianapolis Local Public Impt. Bond Bank, Waterworks Project, Series A, Revenue Bond, AGC		5.500%		1/1/2038		Aa3		1,000,000		1,032,640
La Porte County, G.O. Bond, FGRNA		5.200%		1/15/2018		A1		300,000		306,561
Noblesville, Sewage Works, Revenue Bond, AMBAC		5.000%		1/1/2024		Aa2		550,000		550,253
North Lawrence Community Schools Building Corp., Revenue Bond, AGM		5.000%		7/15/2020		Aa3		450,000		469,242
Plainfield, Series A, Revenue Bond		4.650%		1/1/2027		A3		645,000		623,096

8 The accompanying notes are an integral part of the financial statements.

Investment Portfolio - December 31, 2010

	Coupon Rate		Maturity Date		Credit Rating1 (unaudited)	Principal Amount		Value (Note 2)
MUNICIPAL BONDS (continued)
INDIANA (continued)
Shelbyville Central Renovation School Building Corp., Revenue Bond, NATL		5.000%		7/15/2018	Baa1	$	3,000,000	$	3,265,020
									11,128,911
IOWA - 2.1%
Cedar Rapids, Public Impt., Series A, G.O. Bond		4.000%		6/1/2030	Aaa		440,000		387,715
Dubuque Iowa, Series D, Revenue Bond		4.000%		6/1/2030	Aa2		470,000		406,216
Indianola Community School District, G.O. Bond, FGRNA		5.200%		6/1/2021	A1		425,000		440,555
Iowa City Community School District, G.O. Bond, AGM		4.000%		6/1/2018	Aaa		425,000		435,918
Linn-Mar Community School District, Revenue Bond		4.625%		7/1/2029	A2		1,000,000		958,580
Polk County, Series C, G.O. Bond		4.000%		6/1/2017	Aaa		995,000		1,053,018
Polk County, Series C, G.O. Bond		4.125%		6/1/2025	Aaa		2,075,000		2,076,577
									5,758,579
KANSAS - 3.0%
Johnson & Miami Counties Unified School District No. 230, G.O. Bond, FGRNA		4.000%		9/1/2022	Aa3		1,000,000		976,510
Johnson County Water District No. 1, Revenue Bond		3.250%		12/1/2030	Aaa		1,000,000		793,820
Miami County Unified School District No. 416 Louisburg, G.O Bond, NATL		5.000%		9/1/2018	Baa1		2,000,000		2,173,900
Scott County, G.O. Bond		4.750%		4/1/2040	A3		1,000,000		967,690
Sedgwick County Unified School District No. 265, G.O. Bond, AGM		5.000%		10/1/2025	Aa3		1,090,000		1,102,306
Seward County, G.O. Bond, AGM		5.000%		8/1/2040	Aa3		1,000,000		1,012,110
Shawnee County Unified School District No. 450, Shawnee Heights, G.O. Bond, AGM		4.200%		9/1/2020	Aa3		700,000		715,750
Shawnee County Unified School District No. 450, Shawnee Heights, G.O. Bond, AGM		4.250%		9/1/2021	Aa3		580,000		589,054
									8,331,140
KENTUCKY - 1.3%
Lexington-Fayette Urban County Government Public Facilities Corp., Revenue Bond, NATL		4.000%		10/1/2018	Aa2		1,655,000		1,722,640
Lexington-Fayette Urban County Government, Series A, Revenue Bond		3.625%		7/1/2020	Aa2		1,000,000		1,016,920

The accompanying notes are an integral part of the financial statements. 9

Investment Portfolio - December 31, 2010

		Coupon Rate		Maturity Date		Credit Rating1 (unaudited)	Principal Amount		Value (Note 2)
MUNICIPAL BONDS (continued)
KENTUCKY (continued)
Louisville & Jefferson County Metropolitan Sewer District, Series A, Revenue Bond, AGC			4.250%		5/15/2038	Aa3	$	1,000,000	$	873,940
										3,613,500
LOUISIANA - 0.7%
Caddo Parish Parishwide School District, G.O. Bond, NATL	��		4.350%		3/1/2026	Aa2		660,000		654,898
Caddo Parish Parishwide School District, G.O. Bond, NATL			4.375%		3/1/2027	Aa2		1,090,000		1,073,792
New Orleans, Sewage Service, Revenue Bond, FGIC			5.250%		6/1/2012	A3		300,000		300,678
										2,029,368
MAINE - 0.3%
Maine Municipal Bond Bank, Series D, Revenue Bond			4.000%		11/1/2033	AAA3		1,000,000		850,160
MARYLAND - 1.4%
Anne Arundel County, Water & Sewer, G.O. Bond			4.125%		3/1/2024	Aa1		345,000		348,826
Anne Arundel County, Water & Sewer, G.O. Bond			4.200%		3/1/2025	Aa1		1,770,000		1,784,815
Baltimore County, Metropolitan District, G.O. Bond			4.250%		9/1/2029	Aaa		1,000,000		972,290
Maryland State, State and Local Facilities, G.O. Bond			4.250%		8/1/2021	Aaa		750,000		785,963
										3,891,894
MASSACHUSETTS - 3.7%
Beverly, Municipal Purpose Loan, G.O. Bond			4.500%		1/15/2035	AA3		695,000		647,608
Boston Water & Sewer Commission, Series A, Revenue Bond			5.000%		11/1/2031	Aa1		1,000,000		1,034,580
Boston, Series A, G.O. Bond, NATL			4.125%		1/1/2021	Aaa		1,000,000		1,022,230
Boston, Series A, G.O. Bond, NATL			4.125%		1/1/2022	Aaa		410,000		416,654
Cambridge, Series A, G.O. Bond			4.000%		2/1/2026	Aaa		850,000		836,629
Cambridge, Series A, G.O. Bond			4.000%		2/1/2027	Aaa		850,000		825,401
Commonwealth of Massachusetts, Series A, G.O. Bond			4.750%		8/1/2038	Aa1		500,000		479,935

10 The accompanying notes are an integral part of the financial statements.

Investment Portfolio - December 31, 2010

	Coupon Rate		Maturity Date		Credit Rating1 (unaudited)		Principal Amount		Value (Note 2)
MUNICIPAL BONDS (continued)
MASSACHUSETTS (continued)
Commonwealth of Massachusetts, Series C, G.O. Bond, AMBAC		5.500%		12/1/2023		Aa1	$	1,000,000	$	1,153,740
Commonwealth of Massachusetts, Series D, G.O. Bond		5.250%		10/1/2014		Aa1		1,000,000		1,133,870
Lowell, State Qualified, G.O. Bond, AMBAC		5.000%		2/1/2020		Aa2		500,000		528,740
Massachusetts Water Resources Authority, Series A, Revenue Bond, AGM		4.375%		8/1/2032		Aa1		2,000,000		1,826,160
Richmond, G.O. Bond, NATL		5.000%		4/15/2021		Aa2		400,000		404,996
										10,310,543
MICHIGAN - 3.3%
Bendle Public School District, G.O. Bond, FGRNA		4.500%		5/1/2028		Aa2		640,000		581,216
Detroit City School District, Series B, G.O. Bond, FGIC		5.000%		5/1/2033		Aa2		750,000		658,320
Detroit Sewer Disposal System, Series B, Revenue Bond, FGRNA		4.625%		7/1/2034		A2		1,500,000		1,265,235
Detroit Water Supply System, Revenue Bond, NATL		5.250%		7/1/2023		A1		2,000,000		2,022,820
Grand Rapids Public Schools, G.O. Bond, NATL		4.125%		5/1/2023		Aa3		1,200,000		1,169,016
Muskegon Public Schools, G.O. Bond, AGM		5.000%		5/1/2020		Aa2		1,000,000		1,034,850
Saginaw City School District, G.O. Bond, AGM		4.500%		5/1/2031		Aa2		1,695,000		1,502,245
Warren Woods Public Schools, School Building & Site, G.O. Bond, AGM		4.500%		5/1/2026		Aa2		1,015,000		952,750
										9,186,452
MINNESOTA - 2.0%
Brooklyn Center Independent School District No. 286, Series A, G.O. Bond, NATL		4.375%		2/1/2026		Aa2		1,105,000		1,095,928
Hennepin County, Series A, G.O. Bond		4.500%		12/1/2025		Aaa		1,500,000		1,531,800
Minnesota State, G.O. Bond		5.000%		8/1/2013		Aa1		2,000,000		2,200,100
Pine County, Series A, G.O. Bond, FGRNA		4.400%		2/1/2028		AAA3		555,000		539,643
Western Minnesota Municipal Power Agency, Revenue Bond		6.625%		1/1/2016		Aaa		175,000		198,201
										5,565,672
MISSISSIPPI - 0.2%
Biloxi Public School District, Prerefunded Balance, Revenue Bond, NATL		5.000%		4/1/2017		A1		500,000		505,740

The accompanying notes are an integral part of the financial statements. 11

Investment Portfolio - December 31, 2010

	Coupon Rate	Maturity Date		Credit Rating1 (unaudited)	Principal Amount		Value (Note 2)
MUNICIPAL BONDS (continued)
MISSOURI - 1.7%
Columbia, Water & Electric, Series A, Revenue Bond	4.125%		10/1/2033	AA3	$	995,000	$	928,703
Missouri State, Water Pollution Control, Series A, G.O. Bond	4.500%		12/1/2030	Aaa		2,375,000		2,745,429
Springfield, Electric Light & Power Impt., Revenue Bond, FGRNA	4.750%		8/1/2031	Aa3		1,015,000		981,302
								4,655,434
NEBRASKA - 1.8%
Nebraska Public Power District, Series C, Revenue Bond	5.000%		1/1/2026	A1		840,000		859,925
Omaha Metropolitan Utilities District, Series A, Revenue Bond, AGM	4.375%		12/1/2031	A1		2,640,000		2,375,393
Omaha Public Power District, Series AA, Revenue Bonds, FGRNA	4.500%		2/1/2034	Aa2		1,950,000		1,765,257
								5,000,575
NEVADA - 3.0%
Clark County, G.O. Bond, AGM	4.750%		6/1/2027	Aa1		3,000,000		2,986,350
Las Vegas Valley Water District, Water Impt., Series A, G.O. Bond, AGM	4.750%		6/1/2033	Aa1		1,500,000		1,403,655
Nevada State, Capital Impt., G.O. Bond	5.000%		6/1/2019	Aa1		2,040,000		2,233,147
Nevada State, Project Nos. 66 & 67, Unrefunded Balance, Series A, G.O. Bond, FGRNA	5.000%		5/15/2028	Aa1		125,000		125,010
North Las Vegas, G.O. Bond, NATL	5.000%		5/1/2024	Aa2		1,500,000		1,515,975
								8,264,137
NEW HAMPSHIRE - 0.6%
Manchester, Series F, G.O. Bond	3.750%		12/1/2025	Aa1		1,005,000		954,147
New Hampshire Municipal Bond Bank, Series D, Revenue Bond	4.625%		7/15/2039	Aa3		835,000		821,331
								1,775,478
NEW JERSEY - 1.5%
East Brunswick Township Board of Education, G.O. Bond, AGM	4.500%		11/1/2028	Aa2		835,000		828,879
East Brunswick Township Board of Education, G.O. Bond, AGM	4.500%		11/1/2029	Aa2		1,000,000		981,260

12 The accompanying notes are an integral part of the financial statements.

Investment Portfolio - December 31, 2010

	Coupon Rate	Maturity Date		Credit Rating1 (unaudited)	Principal Amount		Value (Note 2)
MUNICIPAL BONDS (continued)
NEW JERSEY (continued)
Hudson County, G.O. Bond, CIFG	4.250%		9/1/2021	Aa3	$	930,000	$	954,794
Morris County Impt. Authority, School District, Morris Hills Regional District, Revenue Bond	3.700%		10/1/2018	Aaa		540,000		559,121
Sparta Township Board of Education, G.O. Bond, AGM	4.300%		2/15/2030	Aa2		1,000,000		916,020
								4,240,074
NEW MEXICO - 0.3%
New Mexico Finance Authority, Public Project Revolving Fund, Series A-1, Revenue Bond, NATL	3.250%		6/1/2013	Aa1		690,000		725,501
NEW YORK - 4.4%
Hampton Bays Union Free School District, G.O. Bond, AGM	4.375%		9/15/2029	Aa3		2,225,000		2,173,447
New York City Municipal Water Finance Authority, Water & Sewer Systems, Series A, Revenue Bond	5.750%		6/15/2040	Aa1		2,590,000		2,752,626
New York City Municipal Water Finance Authority, Water & Sewer Systems, Series E, Revenue Bond, FGRNA	5.000%		6/15/2026	Aa1		750,000		758,835
New York State Dormitory Authority, University of Rochester, Series E, Revenue Bond	4.000%		7/1/2022	Aa3		930,000		924,494
New York State Power Authority, Series A, Revenue Bond, NATL	4.500%		11/15/2047	Aa2		1,000,000		909,430
New York State Urban Development Corp., Series B, Revenue Bond, NATL	5.000%		1/1/2019	WR2		1,000,000		1,080,640
Port Authority of New York & New Jersey, Revenue Bond	4.500%		10/15/2037	Aa2		1,000,000		925,180
Sachem Central School District of Holbrook, G.O. Bond, FGRNA	4.375%		10/15/2030	AA3		2,000,000		1,882,300
Saratoga County, Sewer Impt., Series B, G.O. Bond	4.375%		7/15/2040	AA3		855,000		770,526
								12,177,478
NORTH CAROLINA - 2.1%
Charlotte, Series B, Revenue Bond	4.625%		7/1/2039	Aaa		1,000,000		965,450
Charlotte, Water & Sewer, Revenue Bond	5.000%		7/1/2038	Aaa		1,000,000		1,016,250
Mecklenburg County, Public Impt., Series A, G.O. Bond	4.125%		2/1/2022	Aaa		1,455,000		1,490,677

The accompanying notes are an integral part of the financial statements. 13

Investment Portfolio - December 31, 2010

	Coupon Rate	Maturity Date		Credit Rating1 (unaudited)	Principal Amount		Value (Note 2)
MUNICIPAL BONDS (continued)
NORTH CAROLINA (continued)
North Carolina Municipal Power Agency No. 1 Catawba, Series A, Revenue Bond	5.000%		1/1/2030	A2	$	1,000,000	$	969,000
North Carolina State, Highway Impt., Revenue Bond, NATL	4.000%		3/1/2018	Aa2		1,355,000		1,443,617
								5,884,994
NORTH DAKOTA - 0.7%
Fargo, Series A, G.O. Bond, NATL	4.700%		5/1/2030	Aa1		1,840,000		1,805,960
OHIO - 3.0%
Brookville Local School District, G.O. Bond, AGM	4.125%		12/1/2026	Aa3		660,000		610,790
Columbus City School District, G.O. Bond, AGM	4.375%		12/1/2032	Aa2		1,000,000		892,810
Columbus, Limited Tax, Series 2, G.O. Bond	5.000%		7/1/2017	Aaa		1,000,000		1,117,820
Licking Heights Local School District, School Facilities Construction & Impt., Series A, G.O. Bond, NATL	5.000%		12/1/2022	Aa2		1,450,000		1,509,450
Newark City School District, G.O. Bond, FGRNA	4.250%		12/1/2027	A1		500,000		455,375
Ohio State, Conservation Project, Series A, Prerefunded Balance, G.O. Bond	5.000%		3/1/2015	Aa1		1,000,000		1,117,610
Pickerington Local School District, G.O. Bond, NATL	4.250%		12/1/2034	Aa2		2,500,000		2,140,325
Springfield City School District, Prerefunded Balance, G.O. Bond, FGIC	5.200%		12/1/2023	A1		325,000		345,439
								8,189,619
OKLAHOMA - 1.1%
Oklahoma City Water Utilities Trust, Series A, Revenue Bond	4.125%		7/1/2039	Aa1		1,000,000		878,850
Oklahoma City, G.O. Bond, NATL	4.250%		3/1/2023	Aaa		2,000,000		2,036,320
								2,915,170
OREGON - 2.3%
Clackamas County School District No. 12 North Clackamas, Series A, G.O. Bond, AGM	4.750%		6/15/2031	Aa1		870,000		863,231
Metro, G.O. Bond	5.000%		6/1/2022	Aaa		3,000,000		3,273,630

14 The accompanying notes are an integral part of the financial statements.

Investment Portfolio - December 31, 2010

	Coupon Rate			Maturity Date		Credit Rating 1 (unaudited)		Principal Amount		Value      (Note 2)
MUNICIPAL BONDS (continued)
OREGON (continued)
Portland, Water Utility Impt., Series A, Revenue Bond, NATL		4.500	%		10/1/2031		Aa1	$	550,000	$	528,435
Salem, Water & Sewer, Revenue Bond, AGM		5.000	%		5/1/2014		Aa3		1,120,000		1,244,141
Washington County School District No. 15 Forest Grove, Prerefunded Balance, G.O. Bond, AGM		5.500	%		6/15/2017		Aa1		500,000		511,645
											6,421,082
PENNSYLVANIA - 3.5%
Allegheny County, Series C-62B, G.O. Bond		5.000	%		11/1/2029		A1		750,000		750,480
Commonwealth of Pennsylvania, Second Series, G.O. Bond, CIFG		4.250	%		3/1/2025		Aa1		2,000,000		1,970,600
Erie Water Authority, Series 2006, Revenue Bond, AGM		5.000	%		12/1/2036		AA3		1,000,000		964,770
Jenkintown School District, Series A, G.O. Bond, FGRNA		4.500	%		5/15/2032		A3		1,000,000		913,880
Lancaster School District, G.O. Bond, AGM		5.000	%		6/1/2019		Aa3		1,200,000		1,319,472
Pennsylvania Turnpike Commission, Prerefunded Balance, Revenue Bond, AMBAC		5.375	%		7/15/2019		Aa3		530,000		549,700
Philadelphia, Water & Wastewater, Prerefunded Revenue Bond, NATL		5.600	%		8/1/2018		BBB3		20,000		23,162
Philadelphia, Water & Wastewater, Series A, Revenue Bond, AMRAG		5.000	%		8/1/2021		Aa3		1,000,000		1,050,960
Plum Boro School District, Series A, G.O. Bond, FGRNA		4.500	%		9/15/2030		A3		855,000		796,672
Uniontown Area School District, G.O. Bond, AGM		4.350	%		10/1/2034		Aa3		1,500,000		1,303,170
											9,642,866
RHODE ISLAND - 1.1%
Narragansett Bay Commission, Series A, Revenue Bond, NATL		5.000	%		8/1/2035		Baa1		1,000,000		976,450
Rhode Island Clean Water Finance Agency, Series A, Revenue Bond, NATL		5.000	%		10/1/2035		Baa1		1,000,000		893,080
Rhode Island State, Series B, G.O. Bond		5.000	%		4/1/2023		Aa2		1,110,000		1,182,239
											3,051,769

The accompanying notes are an integral part of the financial statements. 15

Investment Portfolio - December 31, 2010

	Coupon Rate			Maturity Date		Credit Rating 1 (unaudited)		Principal Amount		Value      (Note 2)
MUNICIPAL BONDS (continued)
SOUTH CAROLINA - 4.7%
Beaufort County School District, Series B, G.O. Bond, SCSDE		5.000	%		3/1/2017		Aa1	$	1,000,000	$	1,148,730
Beaufort County, G.O. Bond, NATL		4.250	%		3/1/2024		Aa1		790,000		787,203
Charleston County, Transportation Sales Tax, G.O. Bond		5.000	%		11/1/2017		Aaa		1,000,000		1,140,750
Columbia, Water Utility Impt., Revenue Bond		5.000	%		2/1/2027		Aa1		1,750,000		1,835,873
Lexington, Waterworks & Sewer System, Revenue Bond, AGC		5.000	%		1/15/2039		Aa3		1,565,000		1,566,096
Richland County School District No. 1, Series B, G.O. Bond, SCSDE		4.450	%		3/1/2026		Aa1		1,005,000		1,005,804
South Carolina Transportation Infrastructure Bank, Series B, Revenue Bond, AMBAC		4.250	%		10/1/2027		A1		2,000,000		1,822,560
South Carolina, State Institutional - South Carolina State University, Series D, G.O. Bond		4.250	%		10/1/2026		Aaa		1,250,000		1,256,263
Spartanburg Sanitation Sewer District, Series B, Revenue Bond, NATL		5.000	%		3/1/2032		A1		1,500,000		1,459,785
Sumter, Water Utility Impt., Revenue Bond, XLCA		4.500	%		12/1/2032		A1		1,000,000		901,780
											12,924,844
SOUTH DAKOTA - 0.2%
Rapid City, Revenue Bond		5.250	%		11/1/2039		Aa3		450,000		454,401
TENNESSEE - 1.1%
Claiborne County, Series A, G.O. Bond		4.125	%		4/1/2030		A3		750,000		694,373
Maryville, Series B, G.O. Bond		3.500	%		6/1/2030		Aa3		1,280,000		1,146,074
Tennessee State, Series A, G.O. Bond		3.625	%		5/1/2031		Aaa		1,500,000		1,257,180
											3,097,627
TEXAS - 4.8%
Alamo Community College District, Series A, G.O. Bond, NATL		5.000	%		8/15/2024		Aaa		1,020,000		1,070,908
Alvin Independent School District, G.O. Bond		4.375	%		2/15/2024		Aaa		750,000		755,483
Canyon Independent School District, G.O. Bond		4.700	%		2/15/2025		AAA3		1,440,000		1,472,990
Clear Creek Independent School District, G.O. Bond, AGM		4.000	%		2/15/2029		Aa2		2,340,000		2,060,581
Del Valle Independent School District, School Building, G.O. Bond		5.000	%		6/15/2019		AAA3		1,845,000		2,036,732

16 The accompanying notes are an integral part of the financial statements.

Investment Portfolio - December 31, 2010

	Coupon Rate			Maturity Date		Credit Rating 1 (unaudited)		Principal Amount		Value (Note 2)
MUNICIPAL BONDS (continued)
TEXAS (continued)
Fort Bend County, G.O. Bond, NATL		4.750	%		3/1/2031		Aa1	$	1,000,000	$	972,120
Huntsville Independent School District, G.O. Bond		4.500	%		2/15/2029		Aaa		1,220,000		1,187,487
McKinney, Waterworks & Sewer, Revenue Bond, FGRNA		4.750	%		3/15/2024		Aa2		1,000,000		1,009,280
San Antonio, Water, Revenue Bond, FGRNA		4.375	%		5/15/2029		Aa1		1,400,000		1,306,732
University of Texas, Financing System, Series F, Revenue Bond		4.750	%		8/15/2028		Aaa		1,000,000		1,009,470
Waller Consolidated Independent School District, G.O. Bond		4.750	%		2/15/2023		Aaa		500,000		502,710
											13,384,493
UTAH - 2.0%
Mountain Regional Water Special Service District, Revenue Bond, NATL		5.000	%		12/15/2030		Baa1		1,240,000		1,163,988
Ogden City School District, G.O. Bond		4.250	%		6/15/2025		Aaa		1,500,000		1,483,995
Ogden, Water Utility Impt., Revenue Bond, AGM		4.500	%		6/15/2038		Aa3		750,000		658,785
Provo City School District, Series B, G.O. Bond		4.000	%		6/15/2014		Aaa		1,100,000		1,194,743
St. George, Parks and Recreation, G.O. Bond, AMBAC		4.000	%		8/1/2019		Aa2		795,000		816,028
Utah State Building Ownership Authority, Series C, Revenue Bond, AGM		5.500	%		5/15/2011		Aa1		300,000		305,547
											5,623,086
VERMONT - 0.4%
Vermont State, Series D, G.O. Bond		4.500	%		7/15/2025		Aaa		1,000,000		1,029,660
VIRGINIA - 3.4%
Fairfax County Water Authority, Series B, Revenue Bond		4.000	%		4/1/2032		Aaa		1,000,000		911,530
Fairfax County, Public Impt., Series A, G.O. Bond		4.000	%		4/1/2017		Aaa		2,000,000		2,154,180
Fairfax County, Public Impt., Series A, G.O. Bond		4.250	%		4/1/2027		Aaa		1,500,000		1,498,170
Norfolk, Capital Impt., G.O. Bond, FGRNA		4.250	%		10/1/2024		Aa2		2,500,000		2,509,925
Norfolk, Capital Impt., G.O. Bond, NATL		4.375	%		3/1/2024		Aa2		685,000		691,720
Norfolk, Water Utility Impt., Revenue Bond		3.750	%		11/1/2040		Aa2		1,000,000		794,550
Richmond, Series B, G.O. Bond, AGM		4.750	%		7/15/2023		Aa2		400,000		409,332

The accompanying notes are an integral part of the financial statements. 17

Investment Portfolio - December 31, 2010

	Coupon Rate			Maturity Date		Credit Rating 1 (unaudited)		Principal Amount		Value (Note 2)
MUNICIPAL BONDS (continued)
VIRGINIA (continued)
Upper Occoquan Sewage Authority, Series B, Revenue Bond		4.500	%		7/1/2038		Aa1	$	470,000	$	439,746
											9,409,153
WASHINGTON - 4.6%
Franklin County, G.O. Bond, FGRNA		5.125	%		12/1/2022		BBB3		1,000,000		1,006,610
Grant County Public Utility District No. 2 Priest Rapids, Series A, Revenue Bond, NATL		5.000	%		1/1/2043		Aa3		1,000,000		933,640
King County School District No. 411 Issaquah, Series A, G.O. Bond, AGM		5.250	%		12/1/2018		Aaa		2,420,000		2,677,270
King County, Sewer Impt., G.O. Bond, FGRNA.		5.000	%		1/1/2035		Aa1		1,255,000		1,258,150
King County, Sewer Impt., Revenue Bond, AGM		5.000	%		1/1/2024		Aa2		1,460,000		1,536,869
King County, Sewer Impt., Series A, Revenue Bond, NATL		4.500	%		1/1/2032		Aa2		1,070,000		999,615
Seattle, Drain & Wastewater, Revenue Bond, NATL		4.375	%		2/1/2026		Aa1		2,000,000		1,957,760
Tacoma, Sewer Impt., Revenue Bond, FGRNA		5.125	%		12/1/2036		Aa2		1,275,000		1,278,494
Washington State, Motor Vehicle Fuel Tax, Series B, G.O. Bond, AMBAC		5.000	%		1/1/2025		Aa1		1,000,000		1,045,820
											12,694,228
WEST VIRGINIA - 0.3%
West Virginia State Water Development Authority, Series A, Revenue Bond, FGRNA		4.250	%		11/1/2026		A3		820,000		767,733
WISCONSIN - 3.0%
Central Brown County Water Authority, Water Systems, Revenue Bond, AMBAC		5.000	%		12/1/2035		A3		1,500,000		1,412,400
Eau Claire, Series B, G.O. Bond, NATL		4.000	%		4/1/2015		Aa1		1,195,000		1,310,043
Madison, Water Utility Impt., Series A, Revenue Bond		4.250	%		1/1/2030		Aa1		1,000,000		907,550
Milwaukee County Metropolitan Sewer District, Series F, G.O. Bond		5.000	%		10/1/2018		Aaa		1,050,000		1,214,241
Milwaukee, Series B5, G.O. Bond		5.000	%		5/1/2024		Aa1		1,000,000		1,074,780
Oshkosh, Corporate Purposes, Series A, G.O. Bond, FGRNA		5.050	%		12/1/2021		Aa2		450,000		469,242
Stoughton Area School District, G.O. Bond, FGRNA		4.875	%		4/1/2016		Aa2		500,000		504,835

18 The accompanying notes are an integral part of the financial statements.

Investment Portfolio - December 31, 2010

	Coupon Rate			Maturity Date		Credit Rating 1 (unaudited)		Principal Amount/ Shares		Value (Note 2)
MUNICIPAL BONDS (continued)
WISCONSIN (continued)
Wisconsin Public Power, Inc., Series A, Revenue Bond, AMBAC		5.000	%		7/1/2035		A1	$	870,000	$	815,173
Wisconsin State, Transportation, Series A, Revenue Bond, AGM		5.000	%		7/1/2025		Aa2		700,000		723,618
											8,431,882
WYOMING - 0.3%
Wyoming Municipal Power Agency, Series A, Revenue Bond		5.375	%		1/1/2042		A2		710,000		709,467
TOTAL MUNICIPAL BONDS (Identified Cost $268,550,079)											263,840,297
SHORT-TERM INVESTMENTS - 3.3%
Dreyfus AMT - Free Municipal Reserves - Class R (Identified Cost $9,284,437)									9,284,437		9,284,437
TOTAL INVESTMENTS - 98.6% (Identified Cost $277,834,516)											273,124,734
OTHER ASSETS, LESS LIABILITIES - 1.4%											3,845,102
NET ASSETS - 100%										$	276,969,836

KEY:

G.O. Bond - General Obligation Bond

Impt. - Improvement

No. - Number

Scheduled principal and interest payments are guaranteed by:

AGC (Assurance Guaranty Corp.)

AGM (Assurance Guaranty Municipal Corp.)

AMBAC (AMBAC Assurance Corp.)

AMRAG (AMBAC reinsured by AGC)

CIFG (CIFG North America, Inc.)

FGIC (Financial Guaranty Insurance Co.)

FGRNA (FGIC reinsured by NATL)

NATL (National Public Finance Guarantee Corp.)

XLCA (XL Capital Assurance)

The insurance does not guarantee the market value of the municipal bonds.

¹Credit ratings from Moody’s (unaudited).

²Credit rating has been withdrawn. As of December 31, 2010, there is no rating available (unaudited).

³Credit ratings from S&P (unaudited).

The Series’ portfolio holds, as a percentage of net assets, greater than 10% in bonds insured by the following companies:

NATL - 29.6%; AGM - 18.1%.

The accompanying notes are an integral part of the financial statements. 19

Statement of Assets and Liabilities

December 31, 2010

ASSETS:
Investments, at value (identified cost $277,834,516) (Note 2)	$	273,124,734
Interest receivable		3,496,462
Receivable for fund shares sold		590,433
TOTAL ASSETS		277,211,629
LIABILITIES:
Accrued management fees (Note 3)		117,515
Accrued fund accounting and administration fees (Note 3)		14,597
Accrued transfer agent fees (Note 3)		689
Accrued Chief Compliance Officer service fees (Note 3)		245
Accrued directors fees (Note 3)		49
Payable for fund shares repurchased		57,359
Audit fees payable		30,269
Other payables and accrued expenses		21,070
TOTAL LIABILITIES		241,793
TOTAL NET ASSETS	$	276,969,836
NET ASSETS CONSIST OF:
Capital stock	$	257,159
Additional paid-in-capital		281,150,952
Undistributed net investment income		271,507
Net unrealized depreciation on investments		(4,709,782	)
TOTAL NET ASSETS	$	276,969,836
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER SHARE - Class A ($276,969,836/25,715,917 shares)	$	10.77

20 The accompanying notes are an integral part of the financial statements.

Statement of Operations

For the Year Ended December 31, 2010

INVESTMENT INCOME:
Interest	$	10,834,848
Dividends		506
Total Investment Income		10,835,354
EXPENSES:
Management fees (Note 3)		1,324,330
Fund accounting and administration fees (Note 3)		99,043
Directors’ fees (Note 3)		11,408
Transfer agent fees (Note 3)		4,074
Chief Compliance Officer service fees (Note 3)		2,631
Custodian fees		13,551
Miscellaneous		91,552
Total Expenses		1,546,589
Less reduction of expenses (Note 3)		(758	)
Net Expenses		1,545,831
NET INVESTMENT INCOME		9,289,523
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments		44,160
Net change in unrealized depreciation on investments		(9,181,739	)
NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS		(9,137,579	)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	151,944

The accompanying notes are an integral part of the financial statements. 21

Statement of Changes in Net Assets

	For the Year Ended 12/31/10			For the Year Ended 12/31/09
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income	$	9,289,523		$	7,635,785
Net realized gain on investments		44,160			243,778
Net change in unrealized appreciation (depreciation) on investments		(9,181,739	)		16,756,505
Net increase from operations		151,944			24,636,068
DISTRIBUTIONS TO SHAREHOLDERS (Note 7):
From net investment income		(10,674,465	)		(8,260,550	)
From net realized gain on investments		(50,263	)		(515,923	)
Total distributions to shareholders		(10,724,728	)		(8,776,473	)
CAPITAL STOCK ISSUED AND REPURCHASED:
Net increase from capital share transactions (Note 5)		53,056,589			20,890,861
Net increase in net assets		42,483,805			36,750,456
NET ASSETS:
Beginning of year		234,486,031			197,735,575
End of year (including undistributed net investment income of $271,507 and $1,659,323, respectively)	$	276,969,836		$	234,486,031

22 The accompanying notes are an integral part of the financial statements.

Financial Highlights

			For the Years Ended
	12/31/10		12/31/09		12/31/08		12/31/07		12/31/06
Per share data (for a share outstanding throughout each year):
Net asset value - Beginning of year		$11.17		$10.34		$10.92		$10.95		$10.90
Income (loss) from investment operations:
Net investment income		0.401		0.401		0.42		0.36		0.37
Net realized and unrealized gain (loss) on investments		(0.35)		0.90		(0.62)		(0.02)		0.05
Total from investment operations		0.05		1.30		(0.20)		0.34		0.42
Less distributions to shareholders:
From net investment income		(0.45)		(0.44)		(0.36)		(0.37)		(0.36)  ��
From net realized gain on investments		—2		(0.03)		(0.02)		—2		(0.01)
Total distributions to shareholders		(0.45)		(0.47)		(0.38)		(0.37)		(0.37)
Net asset value - End of year		$10.77		$11.17		$10.34		$10.92		$10.95
Net assets - End of year (000’s omitted)		$276,970		$234,486		$197,736		$235,709		$167,689
Total return3		0.41%		12.75%		(1.79%)		3.20%		3.94%
Ratios (to average net assets)/ Supplemental Data:
Expenses*		0.58%		0.60%		0.61%		0.62%		0.66%
Net investment income		3.51%		3.65%		3.75%		3.65%		3.71%
Portfolio turnover		3%		8%		7%		3%		5%

^*The investment advisor did not impose all or a portion of its management fees, CCO fees, fund accounting and transfer agent fees, and other fees in some years and in some years paid a portion of the Series’ expenses. If these expenses had been incurred by the Series, the expense ratio (to average net assets) would have been increased by the following amounts:

0.00%⁴ 0.01 %                 N/A             N/A                     N/A    

¹Calculated based on average shares outstanding during the year.

²Less than $0.01 per share.

³Represents aggregate total return for the periods indicated, and assumes reinvestment of all distributions. Total return would have been lower had certain expenses not been waived or reimbursed during the periods. Periods less than one year are not annualized.

⁴Less than 0.01%.

The accompanying notes are an integral part of the financial statements. 23

Notes to Financial Statements

1. ORGANIZATION

Diversified Tax Exempt Series (the “Series”) is a no-load diversified series of Manning & Napier Fund, Inc. (the “Fund”). The Fund is organized in Maryland and is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company.

The Series’ investment objective is to provide as high a level of current income exempt from federal income tax as the Advisor believes is consistent with the preservation of capital.

The Fund’s Advisor is Manning & Napier Advisors, Inc. (the “Advisor”). Shares of the Series are offered to investors, clients and employees of the Advisor and its affiliates. The total authorized capital stock of the Fund consists of 10.0 billion shares of common stock each having a par value of $0.01. As of December 31, 2010, 6.2 billion shares have been designated in total among 29 series, of which 100 million have been designated as Diversified Tax Exempt Series Class A common stock.

2. SIGNIFICANT ACCOUNTING POLICIES

Security Valuation

Municipal securities will normally be valued on the basis of market valuations provided by an independent pricing service (the “Service”). The Service utilizes the latest price quotations and a matrix system (which considers such factors as security prices of similar securities, yields, maturities and ratings). The Service has been approved by the Fund’s Board of Directors (the “Board”).

Short-term investments that mature in sixty days or less are valued at amortized cost, which approximates market value. Investments in open-end investment companies are valued at their net asset value per share on valuation date.

Volume and level of activity in established markets for an asset or liability are evaluated to determine whether recent transactions and quoted prices are determinative of fair value. Where there have been significant decreases in volume and level of activity, further analysis and adjustment may be necessary to estimate fair value. The Series measures fair value in these instances by the use of inputs and valuation techniques which may be based upon current market prices of securities that are comparable in coupon, rating, maturity and industry and/or expectation of future cash flows. As a result of trading in relatively thin markets and/or markets that experience significant volatility, the prices used by the Series to value these securities may differ from the value that would be realized if these securities were sold, and the differences could be material.

Securities for which representative valuations or prices are not available from the Fund’s pricing service may be valued at fair value. Due to the inherent uncertainty of valuations of such securities, the fair value may differ significantly from the values that would have been used had a ready market for such securities existed. If trading or events occurring after the close of the principal market in which securities are traded are expected to materially affect the value of those securities, then they may be valued at their fair value, taking this trading or these events into account. Fair value is determined in good faith by the Advisor under procedures approved by and under the general supervision and responsibility of the Board.

Various inputs are used in determining the value of the Series’ assets or liabilities carried at market value. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical assets and liabilities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.). Level 3 includes significant unobservable inputs (including the Series’ own assumptions in determining the fair value of investments). The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

The following is a summary of the valuation levels used for major security types as of December 31, 2010 in valuing the Series’ assets or liabilities carried at market value:

24

Notes to Financial Statements

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

Security Valuation (continued)

Description	Total		Level 1		Level 2		Level  3
Assets:
Equity securities*	$	—	$	—	$	—	$	—
Preferred securities		—		—		—		—
Debt securities:
States and political subdivisions (municipals)		263,840,297		—		263,840,297		—
Mutual funds		9,284,437		9,284,437		—		—
Other financial instruments**:		—		—		—		—
Total Assets:		273,124,734		9,284,437		263,840,297		—
Liabilities:
Other financial instruments**:		—		—		—		—
Total liabilities:		—		—		—		—
Total	$	273,124,734	$	9,284,437	$	263,840,297	$	—

*Includes common stock, warrants and rights. Please see the Investment Portfolio for industry classification.

**Other financial instruments are derivative instruments not reflected in the Investment Portfolio, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument. As of December 31, 2010, the Series did not hold any derivative instruments.

There were no Level 3 securities held by the Series as of December 31, 2009 or December 31, 2010.

The Fund’s policy is to recognize transfers in and transfers out of the valuation levels as of the beginning of the reporting period. There were no significant transfers between Level 1 and Level 2 during the year ended December 31, 2010.

Additional disclosure surrounding the activity in Level 3 fair value measurement will be effective for fiscal years beginning after December 15, 2010. Management has concluded that this will not have a material impact on the Series’ financial statements.

Security Transactions, Investment Income and Expenses

Security transactions are accounted for on trade date. Dividend income is recorded on the ex-dividend date, except that if the ex-dividend date has passed, certain dividends from foreign securities are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends, if any, are recorded at the fair market value of the securities received. Interest income, including amortization of premium and accretion of discounts using the effective interest method, is earned from settlement date and accrued daily.

Expenses are recorded on an accrual basis. Most expenses of the Fund can be attributed to a specific series. Expenses which cannot be directly attributed are apportioned among the series in the Fund in such a manner as deemed equitable by the Fund’s Board, taking into consideration, among other things, the nature and type of expense.

The Series uses the identified cost method for determining realized gain or loss on investments for both financial statement and federal income tax reporting purposes.

25

Notes to Financial Statements

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

Federal Taxes

The Series’ policy is to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies. The Series is not subject to federal income tax or excise tax to the extent that the Series distributes to shareholders each year its taxable income, including any net realized gains on investments, in accordance with requirements of the Internal Revenue Code. Accordingly, no provision for federal income tax or excise tax has been made in the financial statements.

Management evaluates its tax positions to determine if the tax positions taken meet the minimum recognition threshold in connection with accounting for uncertainties in income tax positions taken or expected to be taken for the purposes of measuring and recognizing tax liabilities in the financial statements. Recognition of tax benefits of an uncertain tax position is required only when the position is “more likely than not” to be sustained assuming examination by taxing authorities. At December 31, 2010, the Series has recorded no liability for net unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken in future tax returns.

The Series files income tax returns in the U.S. federal jurisdiction and various states, as required. No income tax returns are currently under investigation. The statute of limitations on the Series’ tax returns remains open for the years ended December 31, 2007 through December 31, 2010. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.

Distributions of Income and Gains

Distributions to shareholders of net investment income are made quarterly. Distributions of net realized gains are made annually. An additional distribution may be necessary to avoid taxation of the Series. Distributions are recorded on the ex-dividend date.

Indemnifications

The Fund’s organizational documents provide former and current directors and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund’s maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.

Other

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.

3. TRANSACTIONS WITH AFFILIATES

The Fund has an Investment Advisory Agreement (the “Agreement”) with the Advisor, for which the Series pays a fee, computed daily and payable monthly, at an annual rate of 0.50% of the Series’ average daily net assets.

Under the Agreement, personnel of the Advisor provide the Series with advice and assistance in the choice of investments and the execution of securities transactions, and otherwise maintain the Series’ organization. The Advisor also provides the Fund with necessary office space and fund administration and support services. The salaries of all officers of the Fund (except a percentage of the Fund’s Chief Compliance Officer’s salary, which is paid by the Fund), and of all Directors who are “affiliated persons” of the Fund, or of the Advisor, and all personnel of the Fund, or of the Advisor, performing services relating to research, statistical and investment activities, are paid by the

26

Notes to Financial Statements

3. TRANSACTIONS WITH AFFILIATES (continued)

Advisor. Each “non-affiliated” Director receives an annual stipend, which is allocated among all the active series of the Fund. In addition, these Directors also receive a fee per Board meeting attended plus a fee for each committee meeting attended.

The Advisor has contractually agreed, until at least April 30, 2012, to waive its fee and, if necessary, pay other operating expenses of the Series in order to maintain total direct annual fund operating expenses for the Series at no more than 0.85% of average daily net assets each year. For the year ended December 31, 2010, the Advisor voluntarily waived fees of $758, which are included as a reduction of expenses on the Statement of Operations. The Advisor is not eligible to recoup any expenses that have been waived or reimbursed in prior years.

Manning & Napier Investor Services, Inc., a registered broker-dealer affiliate of the Advisor, acts as distributor for the Fund’s shares. The services of Manning & Napier Investor Services, Inc. are provided at no additional cost to the Series.

The Advisor has agreements with PNC Global Investment Servicing (U.S.) Inc. (“PNCGIS”) under which PNCGIS serves as sub-accountant services agent and sub-transfer agent. The Fund pays the Advisor an annual fee related to fund accounting and administration of 0.0175% on the first $3 billion of average daily net assets (excluding Target Series); 0.015% on the next $3 billion of average daily net assets (excluding Target Series); and 0.01% of the average daily net assets in excess of $6 billion (excluding Target Series); plus a base fee of $25,500 per Series. Transfer Agent fees are charged to the Fund on a per account basis. Additionally, certain transaction- and cusip-based fees and out-of-pocket expenses, including charges for reporting relating to the Fund’s compliance program, are charged.

Effective July 1, 2010, PNCGIS was sold to The Bank of New York Mellon Corporation, the Series’ custodian. At the close of the sale, PNCGIS changed its name to BNY Mellon Investment Servicing (U.S.) Inc. (“BNY”).

Expenses not directly attributable to a Series are allocated based on each Series’ relative net assets or number of accounts, depending on the expense.

4. PURCHASES AND SALES OF SECURITIES

For the year ended December 31, 2010, purchases and sales of securities, other than U.S. Government securities and short-term securities, were $56,294,453 and $7,867,290, respectively. There were no purchases or sales of U.S. Government securities.

5. CAPITAL STOCK TRANSACTIONS

Transactions in shares of Diversified Tax Exempt Series were:

	For the Year Ended 12/31/10						For the Year Ended 12/31/09
	Shares			Amount			Shares			Amount
Sold		7,011,303		$	79,206,449			4,637,961		$	51,174,088
Reinvested		903,576			10,015,744			749,319			8,166,096
Repurchased		(3,196,428	)		(36,165,604	)		(3,520,939	)		(38,449,323	)
Total		4,718,451		$	53,056,589			1,866,341		$	20,890,861

Substantially all of the Series’ shares represent investments by fiduciary accounts over which the Advisor has sole investment discretion.

27

Notes to Financial Statements

6. FINANCIAL INSTRUMENTS

The Series may trade in instruments including written and purchased options, forward foreign currency exchange contracts and futures contracts and other derivatives in the normal course of investing activities to assist in managing exposure to various market risks. Investments in these instruments may subject the Series to various elements of risk, which may involve, to a varying degree, elements of risk in excess of the amounts recognized for financial statement purposes. These risks include: the risk that changes in the value of a derivative may not correlate perfectly with the underlying asset, rate or index, counterparty credit risk related to over the counter derivatives counterparties’ failure to perform under contract terms, liquidity risk related to the lack of a liquid market for these contracts allowing the fund to close out its position(s) and documentation risk relating to disagreement over contract terms. No such investments were held by the Series during the year ended December 31, 2010.

7. FEDERAL INCOME TAX INFORMATION

The amount and characterization of certain income and capital gains to be distributed are determined in accordance with federal income tax regulations, which may differ from accounting principles generally accepted in the United States of America. These differences are primarily due to differing book and tax treatments in the timing of the recognition of net investment income or gains and losses, including market discount. The Series may periodically make reclassifications among its capital accounts to reflect income and gains available for distribution (or available capital loss carryovers) under income tax regulations without impacting the Series’ net asset value. Any such reclassifications are not reflected in the financial highlights.

The tax character of distributions paid were as follows:

	For the  Year Ended 12/31/10		For the  Year Ended 12/31/09
Ordinary income	$	—	$	42,152
Tax exempt income		10,676,650		8,218,398
Long-term capital gains		48,078		515,923

At December 31, 2010, the tax basis of distributable earnings and the net unrealized appreciation based on the identified cost of investments for federal income tax purposes were as follows:

Cost for federal income tax purposes	$	277,769,109
Unrealized appreciation	$	4,291,074
Unrealized depreciation		(8,935,449)
Net unrealized depreciation	$	(4,644,375)
Undistributed tax exempt income		206,100

28

Report of Independent Registered Public Accounting Firm

To the Board of Directors of Manning & Napier Fund, Inc. and Shareholders of

Diversified Tax Exempt Series:

In our opinion, the accompanying statement of assets and liabilities, including the investment portfolio (except for credit ratings), and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the Diversified Tax Exempt Series (a series of Manning & Napier Fund, Inc., hereafter referred to as the “Series”) at December 31, 2010, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Series’ management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2010 by correspondence with the custodian, provide a reasonable basis for our opinion.

New York, New York

February 22, 2011

29

Supplemental Tax Information (unaudited)

All designations are based on financial information available as of the date of this annual report and, accordingly are subject to change.

Pursuant to Section 852 of the Internal Revenue Code, as amended, the Series hereby designates $48,078 as capital gains for its taxable year ended December 31, 2010. In addition, the Series hereby designates $10,676,650 as tax exempt dividends for the year ended December 31, 2010. For each item it is the intention of the Series to designate the maximum allowable under tax law.

30

Renewal of Investment Advisory Agreement (unaudited)

At the Manning & Napier Fund, Inc. (the “Fund”) Board of Directors’ (the “Board”) meeting, held on November 17, 2010, the Investment Advisory Agreement (the “Agreement”) between the Fund and Manning & Napier Advisors, Inc. (the “Advisor”) was reviewed by the Board for renewal. In connection with the decision whether to renew the Agreement, a variety of material was prepared for and reviewed by the Board.

Representatives of the Advisor attended the meeting and presented additional oral and written information to the Board to assist the Board in its considerations. The discussion immediately below outlines the materials and information presented to the Board in connection with the Board’s 2010 Annual Review of the Agreement and the conclusions made by the Directors when determining to continue the Agreement.

• The Board considered the services provided by the Advisor under the Agreement including, among others: deciding what securities to purchase and sell for each Series; arranging for the purchase and sale of such securities by placing orders with broker-dealers; administering the affairs of the Fund (including the books and records of the Fund not maintained by third party service providers such as the custodian or sub-transfer agent); arranging for the insurance coverage for the Fund; and supervising the preparation of tax returns, SEC filings (including registration statements) and reports to shareholders for the Fund. The Board also considered the nature and quality of such services provided under the Agreement in light of the Advisor’s services provided to the Fund for 24 years. The Board discussed the quality of these services with representatives from the Advisor and concluded that the Advisor was performing its services to the Fund required under the Agreement in a reasonable manner.

• The Board considered the investment performance of the various Series of the Fund. The investment performance for each Series was reviewed on a cumulative basis since inception and on a one year basis. In addition, annualized performance for the following time periods was considered: inception, three year, five year, ten year, and current market cycle. A market cycle includes periods of both rising and falling markets. Returns for established benchmark indices for each Series were provided for each time period. The Board noted that the various Series were competitive against their respective benchmarks and/or peer groups over various time periods, but in particular over the full market cycle period relevant for the Series. In addition, the Board considered at the meeting (and considers on a quarterly basis) a peer group performance analysis consisting of Morningstar universes of mutual funds with similar investment objectives. The Board discussed the performance with representatives from the Advisor and concluded that the investment performance of each of the Fund’s Series was reasonable based on the Fund’s actual performance and comparative performance, especially performance over the current market cycle.

• The Board considered the costs of the Advisor’s services and the profits of the Advisor as they relate to the Advisor’s services to the Fund under the Agreement. In reviewing the Advisor’s costs and profits, the Board discussed the Advisor’s revenues generated from the Fund (on both an actual and adjusted basis) and its expenses associated with providing the services under the Agreement. In addition, the Board reviewed the Advisor’s expenses associated with Fund activities outside of the Agreement (such as expense reimbursements pursuant to expense caps and payments made by the Advisor to third party platforms on which shares of the Fund are available for purchase). It was noted by representatives of the Advisor that 11 of the 27 active Series of the Fund are currently experiencing expenses above the capped expense ratios. After discussing the above costs and profits, the Board concluded that the Advisor’s profitability relating to its services provided under the Agreement was reasonable.

• The Board considered the fees and expenses of the various Series of the Fund. The Advisor presented the advisory fees and total expenses for each Series, including the advisory fee adjusted for any expense waivers or reimbursements (either contractual or voluntary) paid by the Advisor. The advisory fees and expense ratios of each Series were compared to an average (on both a mean and median basis) of similar funds as disclosed on the Morningstar database. Representatives of the Advisor discussed with the Board the levels of its advisory

31

Renewal of Investment Advisory Agreement (unaudited)

fee for each Series of the Fund and as compared to the median and mean advisory fees for similar funds as listed on Morningstar. Expense ratios for every Series, except the Pro-Blend’s Class R and Class C, and Target Class R and Class C, are currently below the median and mean for similar funds as listed on Morningstar. Based on their review of the information provided, the Board concluded that the fees and expenses of each Series of the Fund were reasonable on a comparative basis.

• The Board also considered the other benefits the Advisor derives from its relationship with the Fund. Such other benefits include certain research products provided by soft dollars. Given the level of soft dollar transactions involving the Fund, the Board concluded that these additional benefits to the Advisor were reasonable.

• In addition to the factors described above, the Board considered the Advisor’s personnel, investment strategies, policies and procedures relating to compliance with personal securities transactions, and reputation, expertise and resources in domestic and foreign financial markets. The Board concluded that these factors support the conclusion that the Advisor performs its services in a reasonable manner.

• The Board did not consider economies of scale at this time because of the multiple uses of the Fund (for the Advisor’s discretionary investment account clients in addition to direct investors), the current profitability of the Advisor’s services to the Fund under the Agreement, and the overall size of the Fund complex.

Based on the Board’s deliberations and their evaluation of the information described above, the Board, including a majority of Directors that are not “interested persons” as defined in the Investment Company Act of 1940, concluded that the compensation under the Agreement was fair and reasonable in light of the services and expenses and such other matters as the Directors considered to be relevant in the exercise of their reasonable judgment. Accordingly, the Board approved the renewal of the Agreement. In the course of their deliberations, the Directors did not identify any particular information that was all important or controlling.

32

Directors’ and Officers’ Information (unaudited)

The Statement of Additional Information provides additional information about the Fund’s directors and officers and can be obtained without charge by calling 1-800-466-3863, at www.manningnapieradvisors.com, or on the EDGAR Database on the SEC Internet web site (http:// www.sec.gov). The following chart shows certain information about the Fund’s officers and directors, including their principal occupations during the last five years. Unless specific dates are provided, the individuals have held the listed positions for longer than five years.

INTERESTED DIRECTOR/OFFICER

Name:	B. Reuben Auspitz*
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	63
Current Position(s) Held with Fund:	Principal Executive Officer, President, Chairman & Director
Term of Office1 & Length of Time Served:	Indefinite - Director since 1984; Vice President 1984 - 2003; President since 2004; Principal Executive Officer since 2002
Principal Occupation(s) During Past 5 Years:	Executive Vice President; Executive Group Member**; Chief Compliance Officer since 2004; Vice Chairman since June 2010; Co-Executive Director from 2003-2010 - Manning & Napier Advisors, Inc. President; Director - Manning & Napier Investor Services, Inc. Holds or has held one or more of the following titles for various subsidiaries and affiliates: President, Vice President, Director, Chairman, Treasurer, Chief Compliance Officer or Member.
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
INDEPENDENT DIRECTORS
Name:	Paul A. Brooke
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	65
Current Position(s) Held with Fund:	Director, Audit Committee Member, Governance & Nominating Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 2007
Principal Occupation(s) During Past 5 Years:	Chairman & CEO, Alsius Corp. (investments); Managing Member, PMSV Holdings LLC (investments)
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	Incyte Corp. (2000-present) ViroPharma, Inc. (2000-present) HLTH Corp. (2000-present) Cheyne Capital International (2000-present) MPM Bio-equities (2000-present) GMP Companies (2000-present) HoustonPharma (2000-present)
Name:	Richard M. Hurwitz
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	47
Current Position(s) Held with Fund:	Director, Audit Committee Member, Governance & Nominating Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 2009
Principal Occupation(s) During Past 5 Years:	Chief Executive Officer, Pictometry International Corp. since August 2010 (provider of georeferenced, aerial image libraries and related software) Managing Partner (2006-July 2010) - Aegis Investment Partners, LLC (investments); Founder and Managing Partner (2004-2005) - Village Markets, LLC (groceries)
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	Pictometry International Corp. (2000-2010) Pioneering Technologies (2006-2009) Vensearch Capital Corp. (2003-2007)

33

Directors’ and Officers’ Information (unaudited)

INDEPENDENT DIRECTORS (continued)

Name:	Stephen B. Ashley
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	70
Current Position(s) Held with Fund:	Director, Audit Committee Member, Governance & Nominating Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 1996
Principal Occupation(s) During Past 5 Years:	Chairman, Director, President & Chief Executive Officer, The Ashley Group (property management and investment). Chairman (non-executive) 2004-2008; Director 1995-2008 - Fannie Mae (mortgage)
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	The Ashley Group (1995-2008) Genesee Corporation (1987-2007)
Name:	Peter L. Faber
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	72
Current Position(s) Held with Fund:	Director, Governance & Nominating Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 1987
Principal Occupation(s) During Past 5 Years:	Senior Counsel since 2006, Partner (1995 - 2006) - McDermott, Will & Emery LLP (law firm)
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	Partnership for New York City, Inc. (non-profit) New York Collegium (non-profit) Boston Early Music Festival (non-profit)
Name:	Harris H. Rusitzky
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	76
Current Position(s) Held with Fund:	Director, Audit Committee Member, Governance & Nominating Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 1985
Principal Occupation(s) During Past 5 Years:	President, The Greening Group (business consultants) since 1994; Partner, The Restaurant Group (restaurants) since 2006
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
OFFICERS
Name:	Jeffrey S. Coons, Ph.D., CFA
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	47
Current Position(s) Held with Fund:	Vice President
Term of Office1 & Length of Time Served:	Since 2004
Principal Occupation(s) During Past 5 Years:	President since 2010, Co-Director of Research since 2002, Executive Group Member** since 2003, - Manning & Napier Advisors, Inc. Holds one or more of the following titles for various subsidiaries and affiliates: President, Director, Treasurer or Senior Trust Officer.
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A

34

Directors’ and Officers’ Information (unaudited)

OFFICERS (continued)

Name:	Beth Galusha
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	49
Current Position(s) Held with Fund:	Assistant Chief Financial Officer
Term of Office1 & Length of Time Served:	Assistant Chief Financial Officer since 2010
Principal Occupation(s) During Past 5 Years:	Chief Financial Officer and Treasurer, Manning & Napier Advisors, Inc. Holds one or more of the following titles for various affiliates: Chief Financial Officer, Director, or Treasurer
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
Name:	Christine Glavin
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	44
Current Position(s) Held with Fund:	Principal Financial Officer, Chief Financial Officer
Term of Office1 & Length of Time Served:	Principal Financial Officer since 2002; Chief Financial Officer since 2001
Principal Occupation(s) During Past 5 Years:	Fund Reporting Manager, Manning & Napier Advisors, Inc. since 1997
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
Name:	Jodi L. Hedberg
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	43
Current Position(s) Held with Fund:	Corporate Secretary, Chief Compliance Officer, Anti-Money Laundering
	Compliance Officer
Term of Office1 & Length of Time Served:	Corporate Secretary since 1997; Chief Compliance Officer since 2004
Principal Occupation(s) During Past 5 Years:	Director of Compliance, Manning & Napier Advisors, Inc. and affiliates since 1990 (title change in 2005 from Compliance Manager to Director of Compliance); Corporate Secretary, Manning & Napier Investor Services, Inc. since 2006
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
Name:	Richard Yates
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	45
Current Position(s) Held with Fund:	Chief Legal Officer
Term of Office1 & Length of Time Served:	Chief Legal Officer since 2004
Principal Occupation(s) During Past 5 Years:	Counsel - Manning & Napier Advisors, Inc. & affiliates since 2000; Holds one or more of the following titles for various affiliates; Director or Corporate Secretary
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A

*Interested Director, within the meaning of the Investment Company Act of 1940 by reason of his position with the Fund’s investment advisor and distributor. Mr. Auspitz serves as the Executive Vice President and Director, Manning & Napier Advisors, Inc. and President and Director, Manning & Napier Investor Services, Inc., the Fund’s distributor.

**Prior to June 2010, the Executive Group, consisting of senior executive employee-owners, performed the duties of the Office of the Chief Executive of the Advisor. Effective June 2010, the Executive Group serves as an advisory board to the Chief Executive Officer.

¹The term of office for President, Vice President, Chief Financial Officer, Assistant Chief Financial Officer, Chief Legal Officer and Corporate Secretary is one year and until their respective successors are chosen and qualified. All other officers’ terms are indefinite.

35

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36

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37

Literature Requests (unaudited)

Proxy Voting Policies and Procedures

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available, without charge, upon request:

By phone	1-800-466-3863
On the Securities and Exchange Commission’s (SEC) web site	http://www.sec.gov

Proxy Voting Record

Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30th is available, without charge, upon request:

By phone	1-800-466-3863
On the SEC’s web site	http://www.sec.gov

Quarterly Portfolio Holdings

The Series’ complete schedule of portfolio holdings for the 1st and 3rd quarters of each fiscal year are provided on Form N-Q, and are available, without charge, upon request:

By phone	1-800-466-3863
On the SEC’s web site	http://www.sec.gov

The Series’ Form N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

Prospectus and Statement of Additional Information (SAI)

The prospectus and SAI provide additional information about each Series, including charges, expenses and risks. These documents are available, without charge, upon request:

By phone	1-800-466-3863
On the SEC’s web site	http://www.sec.gov
On the Advisor’s web site	http://www.manning-napier.com

Additional information available at www.manning-napier.com

1. Fund Holdings - Month-End

2. Fund Holdings - Quarter-End

3. Shareholder Report - Annual

4. Shareholder Report - Semi-Annual

                            MNDTES-12/10-AR

Management Discussion and Analysis (unaudited)

Dear Shareholders:

As well-defined swings in sentiment drove market fluctuations in 2010, the fixed income markets generally had favorable results for the year. Returns were broadly positive throughout the first three quarters of the year. However, while equities finished the year with a strong rally, fixed income markets generally took a negative turn at the end of 2010. After eight consecutive quarters of positive performance, broad fixed income markets suffered losses in the fourth quarter.

While municipal securities posted gains for the year, the sector had the weakest fixed income returns in 2010, as credit concerns and supply and demand changes caused noteworthy losses during the last quarter. The Bank of America Merrill Lynch 1-12 Year Municipal Bond Index earned 3.04% during the year. With a return of 0.32%, the New York Tax Exempt Series trailed its benchmark over the last twelve months.

The municipal bond market generally performed well in the first three quarters of the year, a reflection of attractive supply and demand dynamics. During this time, the fundamentals in the tax-exempt marketplace remained strong, with demand rising because of the likelihood of higher taxes in the top tax brackets, and supply for longer-term tax-exempt issues declining because of the popularity of the alternative Build America Bond program. However, amid heightened concern about municipal defaults, the municipal bond market struggled during the fourth quarter.

While credit issues exist in certain areas of the municipal market, the Advisor does not believe the broad municipal credit environment has materially deteriorated. In fact, municipal defaults are rare, and municipalities typically pay their debts in full even if they are forced to restructure. Rather, much of the losses at the end of the year were likely due to supply and demand shifts within the sector. The recent tax compromise, which extended the Bush-era tax cuts for all income brackets, lessened the immediate demand for tax-shielding investments, and supply is expected to increase because of the expiration of the Build America Bond program, which had limited longer-term, tax-exempt supply, thus benefiting the municipal market. Given these factors, municipal yields increased during the fourth quarter. While rising yields equate to price declines, the Advisor believes this yield shift has enhanced the relative value of municipal bonds versus other sectors of the fixed income market.

Throughout 2010, the Series continued to focus on high quality bonds with an emphasis on the underlying credit quality, which provides additional security in the midst of a tough credit and economic environment. Specifically, during the past year the underlying credit quality of the bonds in the Series was rated investment grade or higher, and the types of holdings included general obligation debt, pre-refunded bonds, and revenue debt associated with necessary municipal services. While this higher quality bias leads to slightly lower relative yields than the overall municipal market, the Advisor believes the safety and liquidity of such issues justifies the quality bias.

Over the past year, the Series had a significant exposure to securities in the intermediate to longer-term maturity range as compared to the benchmark, which holds only minimal securities in this range. This intermediate to longer-term weighting was the primary driver of relative underperformance in 2010. While the current positioning helped relative results during several periods last year, particularly when municipal yields fell to historic lows during the third quarter, this positioning noticeably detracted from returns when yields rose during the fourth quarter, causing the Series to lag its benchmark for the year. However, given the slow growth economic environment, the Advisor believes the intermediate to longer-term maturity structure continues to be the most suitable strategy.

As the markets unfold in 2011, it will be important to monitor trends such as state and local budgets, monetary policy, and inflation expectations. With this mindset, Manning & Napier remains committed to our active and selective investment approach to fixed income. Staying focused on the fundamentals and maintaining our selective investment process helped us earn solid returns through the volatile markets of 2010, and we believe these qualities will remain important in the environment ahead.

As always, we appreciate your business.

Sincerely,

Manning & Napier Advisors, Inc.

1

Performance Update as of December 31, 2010 (unaudited)

	Average Annual Total Returns As of December 31, 2010
	One Year			Five Year	Ten Year			Since Inception1
Manning & Napier Fund, Inc. - New York Tax Exempt Series2		0.32	%	3.35%		3.94	%	4.29%
Bank of America (BofA) Merrill Lynch 1-12 Year Municipal Bond Index3		3.04	%	4.71%		4.91	%	5.13%

The following graph compares the value of a $10,000 investment in the Manning & Napier Fund, Inc. - New York Tax Exempt Series for the ten years ended December 31, 2010 to the BofA Merrill Lynch 1-12 Year Municipal Bond Index.

¹ Performance numbers for the Series and Index are calculated from January 17, 1994, the Series’ inception date.

²The Series’ performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of shares. The Series’ performance is historical and may not be indicative of future results. The performance returns shown are inclusive of the net expense ratio of the Series. For the year ended December 31, 2010, this net expense ratio was 0.61%. The gross expense ratio, which does not account for any voluntary or contractual waivers currently in effect, was 0.61% for the year ended December 31, 2010.

³The BofA Merrill Lynch 1-12 Year Municipal Bond Index (formerly a Merrill Lynch Index) is an unmanaged, market weighted index comprised of investment-grade, fixed rate, coupon bearing municipal bonds with maturities greater than one year but less than twelve years. The Index returns assume reinvestment of coupons and, unlike Series returns, do not reflect any fees or expenses.

2

Shareholder Expense Example (unaudited)

As a shareholder of the Series, you may incur two types of costs: (1) transaction costs and (2) ongoing costs, including management fees and other Series expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Series and to compare these costs with the ongoing costs of investing in other mutual funds.

The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (July 1, 2010 to December 31, 2010).

Actual Expenses

The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Series’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Series’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid during the period. You may use this information to compare the ongoing costs of investing in the Series and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.

	Beginning Account  Value 7/1/10	Ending Account  Value 12/31/10	Expenses Paid During Period* 7/1/10-12/31/10
Actual	$1,000.00	$     978.90	$3.04
Hypothetical (5% return before expenses)	$1,000.00	$  1,022.13	$3.11

*Expenses are equal to the Series’ annualized expense ratio (for the six-month period) of 0.61%, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). Expenses are based on the most recent fiscal half year; therefore, the expense ratio stated above may differ from the expense ratio stated in the financial highlights, which is based on one-year data. The Series’ total return would have been lower had certain expenses not been waived during the period.

3

Portfolio Composition as of December 31, 2010 (unaudited)

4

Investment Portfolio - December 31, 2010

	Coupon Rate		Maturity Date		Credit Rating1 (unaudited)	Principal Amount		Value (Note 2)
NEW YORK MUNICIPAL BONDS - 98.4%
Albany County, Public Impt., G.O. Bond		4.000%		6/1/2026	Aa2	$	500,000	$	474,005
Arlington Central School District, G.O. Bond, NATL		4.625%		12/15/2024	Aa2		845,000		858,419
Arlington Central School District, G.O. Bond, NATL		4.625%		12/15/2025	Aa2		365,000		369,566
Bethlehem, Public Impt., G.O. Bond		4.500%		12/1/2033	AA2		335,000		335,211
Bethlehem, Public Impt., G.O. Bond		4.500%		12/1/2035	AA2		425,000		421,838
Briarcliff Manor, Public Impt., Series A, G.O. Bond, AMBAC		4.000%		10/1/2025	Aa2		280,000		278,135
Brookhaven, Public Impt., G.O. Bond, FGRNA		4.000%		5/1/2023	Aa2		900,000		892,179
Brookhaven, Public Impt., G.O. Bond, FGRNA		4.000%		5/1/2024	Aa2		815,000		799,262
Buffalo Fiscal Stability Authority, Sales Tax & State Aid, Series B, Revenue Bond, NATL		5.000%		9/1/2016	Aa1		525,000		590,588
Cayuga County, Public Impt., G.O. Bond, AGM		3.250%		4/1/2026	Aa3		670,000		601,633
Chautauqua County, Public Impt., G.O. Bond		4.250%		1/15/2027	A2		665,000		652,099
Chautauqua County, Public Impt., Series B, G.O. Bond, NATL		4.500%		12/15/2018	Aa3		485,000		518,465
Cleveland Hill Union Free School District, G.O. Bond, AGM		3.750%		6/15/2025	Aa3		475,000		456,494
Clifton Park Water Authority, Revenue Bond		4.250%		10/1/2029	AA2		250,000		242,125
Dryden Central School District, G.O. Bond, AGM		5.500%		6/15/2011	Aa3		200,000		204,032
Dutchess County, Public Impt., Prerefunded Balance, G.O. Bond, NATL		4.000%		12/15/2016	Aa1		315,000		348,160
Dutchess County, Public Impt., Unrefunded Balance, G.O. Bond, NATL		4.000%		12/15/2016	Aa1		360,000		387,234
East Rochester Union Free School District, G.O. Bond		3.500%		3/15/2023	AA2		380,000		367,707
Erie County Water Authority, Revenue Bond, NATL		5.000%		12/1/2037	Aa2		625,000		623,138
Franklin Square Union Free School District, G.O. Bond, FGRNA		5.000%		1/15/2021	Aa2		520,000		530,093
Gates Chili Central School District, G.O. Bond		2.500%		6/15/2016	Aa3		555,000		566,067
Gates Chili Central School District, G.O. Bond		3.000%		6/15/2017	Aa3		590,000		608,868
Geneva City, Public Impt., G.O. Bond, AGM		3.250%		5/15/2018	Aa3		590,000		605,340
Greece Central School District, G.O. Bond, AGM		4.000%		6/15/2019	Aa3		2,675,000		2,817,738
Hampton Bays Union Free School District, G.O. Bond, AGM		4.250%		9/15/2026	Aa3		1,140,000		1,142,006
Haverstraw-Stony Point Central School District, G.O. Bond, AGM		4.500%		10/15/2032	Aa2		2,000,000		1,860,520
Hempstead, Public Impt., Series A, G.O. Bond		4.000%		4/15/2021	Aaa		1,500,000		1,568,235
Hyde Park Central School District, G.O. Bond, AGC		3.500%		6/15/2018	AA2		360,000		374,926

5 The accompanying notes are an integral part of the financial statements.

Investment Portfolio - December 31, 2010

	Coupon Rate		Maturity Date		Credit Rating1 (unaudited)	Principal Amount		Value (Note 2)
NEW YORK MUNICIPAL BONDS (continued)
Johnson City Central School District, G.O. Bond, FGRNA		4.250%		6/15/2024	A2	$	500,000	$	487,970
Johnson City Central School District, G.O. Bond, FGRNA		4.375%		6/15/2028	A2		1,000,000		932,740
Johnson City Central School District, G.O. Bond, FGRNA		4.375%		6/15/2030	A2		985,000		896,951
Lake George Central School District, G.O. Bond		3.750%		7/15/2025	AA2		335,000		320,123
Long Island Power Authority, Electric Systems, Series A, Revenue Bond		5.750%		4/1/2039	A3		675,000		696,843
Long Island Power Authority, Electric Systems, Series A, Revenue Bond, FGRNA		5.000%		12/1/2019	A3		1,000,000		1,060,480
Long Island Power Authority, Electric Systems, Series A, Revenue Bond, FGRNA		5.000%		12/1/2025	A3		1,690,000		1,705,092
Long Island Power Authority, Electric Systems, Series F, Revenue Bond, NATL		4.500%		5/1/2028	A3		1,880,000		1,775,923
Maine-Endwell Central School District, G.O. Bond, AGC		4.000%		6/15/2025	AA2		1,000,000		966,890
Mamaroneck Union Free School District, G.O. Bond		3.500%		6/15/2025	Aaa		1,000,000		944,450
Marlboro Central School District, G.O. Bond, AGC		4.000%		12/15/2026	AA2		500,000		486,745
Metropolitan Transportation Authority, Dedicated Tax Fund, Series A, Revenue Bond, NATL		5.000%		11/15/2030	Aa3		750,000		749,955
Metropolitan Transportation Authority, Dedicated Tax Fund, Series B, Revenue Bond		5.000%		11/15/2034	AA2		1,000,000		997,180
Metropolitan Transportation Authority, Series A, Revenue Bond, AGM		5.000%		11/15/2030	Aa3		500,000		493,770
Metropolitan Transportation Authority, Series A, Revenue Bond, FGRNA		5.000%		11/15/2025	A2		1,500,000		1,500,180
Metropolitan Transportation Authority, Series B, Revenue Bond, AGM		4.500%		11/15/2032	Aa3		500,000		444,680
Metropolitan Transportation Authority, Series F, Revenue Bond		5.000%		11/15/2030	A2		640,000		624,301
Miller Place Union Free School District, G.O. Bond		4.000%		2/15/2027	Aa2		265,000		248,061
Minisink Valley Central School District, G.O. Bond		3.500%		4/15/2025	AA2		900,000		841,077
Monroe County Water Authority, Revenue Bond		4.250%		8/1/2030	Aa2		405,000		373,519
Monroe County Water Authority, Revenue Bond		4.500%		8/1/2035	Aa2		275,000		257,876
Monroe County, Public Impt., G.O. Bond, AMBAC		4.125%		6/1/2020	A3		1,000,000		987,370

The accompanying notes are an integral part of the financial statements. 6

Investment Portfolio - December 31, 2010

	Coupon Rate		Maturity Date		Credit Rating1 (unaudited)	Principal Amount		Value (Note 2)
NEW YORK MUNICIPAL BONDS (continued)
Nanuet Union Free School District, G.O. Bond, AGM		4.300%		6/15/2029	Aa2	$	505,000	$	483,553
Nassau County Interim Finance Authority, Sales Tax Secured, Series A, Revenue Bond, AMBAC		4.750%		11/15/2023	Aa1		1,000,000		1,025,580
Nassau County, Public Impt., Series A, G.O. Bond, AGC		5.000%		5/1/2022	Aa3		500,000		541,895
Nassau County, Public Impt., Series C, G.O. Bond		4.000%		10/1/2026	A1		1,000,000		895,860
Nassau County, Public Impt., Series C, G.O. Bond, AGC		5.000%		10/1/2028	Aa3		1,000,000		1,033,570
New Hyde Park & Garden City Park, Union Free School District, G.O. Bond, AGM		4.125%		6/15/2023	Aa2		200,000		201,438
New Hyde Park & Garden City Park, Union Free School District, G.O. Bond, AGM		4.125%		6/15/2024	Aa2		250,000		251,043
New York City Municipal Water Finance Authority, Water & Sewer Systems, Series A, Revenue Bond		4.250%		6/15/2033	Aa1		1,250,000		1,126,675
New York City Municipal Water Finance Authority, Water & Sewer Systems, Series A, Revenue Bond		4.500%		6/15/2037	Aa1		1,000,000		927,050
New York City Municipal Water Finance Authority, Water & Sewer Systems, Series A, Revenue Bond		5.750%		6/15/2040	Aa1		1,000,000		1,062,790
New York City Municipal Water Finance Authority, Water & Sewer Systems, Series A, Revenue Bond, AMBAC		5.000%		6/15/2035	Aa1		750,000		743,708
New York City Municipal Water Finance Authority, Water & Sewer Systems, Series D, Revenue Bond, AMBAC		4.500%		6/15/2036	Aa1		500,000		464,210
New York City Municipal Water Finance Authority, Water & Sewer Systems, Series E, Revenue Bond, FGRNA		5.000%		6/15/2026	Aa1		750,000		758,835
New York City, G.O. Bond, XLCA		5.000%		9/1/2019	Aa2		500,000		536,555
New York City, Series A, G.O. Bond, CIFG		5.000%		8/1/2024	Aa2		1,000,000		1,031,860
New York City, Series B, G.O. Bond		4.250%		8/1/2037	Aa2		1,000,000		872,920
New York City, Series G, G.O. Bond		5.000%		8/1/2023	Aa2		1,250,000		1,307,900
New York City, Series O, G.O. Bond		5.000%		6/1/2033	Aa2		1,050,000		1,051,187
New York Municipal Bond Bank Agency, Series A1, Revenue Bond, AGM		5.000%		5/15/2017	Aa3		215,000		237,220
New York Municipal Bond Bank Agency, Series B1, Revenue Bond, AGM		5.000%		4/15/2018	Aa3		1,000,000		1,093,960
New York State Dormitory Authority, Columbia University, Revenue Bond		5.000%		7/1/2038	Aaa		900,000		914,625

7 The accompanying notes are an integral part of the financial statements.

Investment Portfolio - December 31, 2010

	Coupon Rate	Maturity Date		Credit Rating1 (unaudited)	Principal Amount		Value (Note 2)
NEW YORK MUNICIPAL BONDS (continued)
New York State Dormitory Authority, Columbia University, Series A, Revenue Bond	5.000%		7/1/2025	Aaa	$	500,000	$	507,745
New York State Dormitory Authority, Cornell University, Series C, Revenue Bond	5.000%		7/1/2037	Aa1		1,000,000		1,007,520
New York State Dormitory Authority, Education, Series F, Revenue Bond	5.000%		3/15/2023	Aa3		1,475,000		1,536,537
New York State Dormitory Authority, New York University, Series A, Revenue Bond	5.000%		7/1/2039	Aa3		1,000,000		995,480
New York State Dormitory Authority, Series A, Revenue Bond, AGM	5.000%		10/1/2018	Aa3		250,000		278,445
New York State Dormitory Authority, Series A, Revenue Bond, AGM	5.000%		10/1/2021	Aa3		250,000		268,647
New York State Dormitory Authority, Series A, Revenue Bond, AGM	4.000%		10/1/2025	Aa3		1,500,000		1,393,635
New York State Dormitory Authority, Series A, Revenue Bond, AGM	4.375%		10/1/2030	Aa3		1,500,000		1,387,530
New York State Dormitory Authority, Series B, Revenue Bond, AGM	4.400%		10/1/2030	Aa3		140,000		128,701
New York State Dormitory Authority, Series B, Revenue Bond, AGM	4.750%		10/1/2040	Aa3		1,360,000		1,239,082
New York State Dormitory Authority, University of Rochester, Series A, Revenue Bond	5.125%		7/1/2039	Aa3		1,000,000		991,850
New York State Environmental Facilities Corp., Clean Water & Drinking, Revenue Bond	4.500%		6/15/2022	Aaa		300,000		305,982
New York State Environmental Facilities Corp., Clean Water & Drinking, Revenue Bond, NATL	5.000%		6/15/2021	Aaa		600,000		632,916
New York State Environmental Facilities Corp., Clean Water & Drinking, Series A, Revenue Bond	4.500%		6/15/2036	Aaa		1,000,000		940,770
New York State Environmental Facilities Corp., Clean Water & Drinking, Series B, Revenue Bond	5.000%		6/15/2027	Aaa		1,000,000		1,003,450
New York State Environmental Facilities Corp., Clean Water & Drinking, Series B, Revenue Bond	4.500%		6/15/2036	Aa1		1,500,000		1,407,000
New York State Environmental Facilities Corp., Personal Income Tax, Series A, Revenue Bond	5.000%		12/15/2019	AAA2		750,000		808,478
New York State Environmental Facilities Corp., Pollution Control, Unrefunded Balance, Series A, Revenue Bond	5.200%		6/15/2015	Aaa		25,000		25,089

The accompanying notes are an integral part of the financial statements. 8

Investment Portfolio - December 31, 2010

	Coupon Rate		Maturity Date		Credit Rating1 (unaudited)	Principal Amount		Value (Note 2)
NEW YORK MUNICIPAL BONDS (continued)
New York State Environmental Facilities Corp., Pollution Control, Unrefunded Balance, Series B, Revenue Bond		5.200%		5/15/2014	Aaa	$	440,000	$	463,021
New York State Housing Finance Agency, State University Construction, Series A, Revenue Bond		8.000%		5/1/2011	Aa3		30,000		30,660
New York State Municipal Bond Bank Agency, Series B1, Revenue Bond		4.125%		12/15/2029	A2		420,000		373,657
New York State Municipal Bond Bank Agency, Series B1, Revenue Bond		4.500%		12/15/2034	A2		215,000		194,242
New York State Power Authority, Series A, Revenue Bond, NATL		4.500%		11/15/2047	Aa2		2,000,000		1,818,860
New York State Thruway Authority, Highway & Bridge, Prerefunded Balance, Series A, Revenue Bond, FGIC		5.500%		4/1/2015	Aa2		320,000		327,318
New York State Thruway Authority, Highway & Bridge, Prerefunded Balance, Series B, Revenue Bond, NATL		5.250%		4/1/2016	AAA2		300,000		310,977
New York State Thruway Authority, Highway & Bridge, Series B, Revenue Bond, AMBAC		5.000%		4/1/2021	AA2		1,500,000		1,572,255
New York State Thruway Authority, Highway & Bridge, Series C, Revenue Bond, AMBAC		5.000%		4/1/2020	Aa3		750,000		781,875
New York State Thruway Authority, Highway & Bridge, Series C, Revenue Bond, NATL		5.250%		4/1/2011	Aa2		1,000,000		1,012,330
New York State Thruway Authority, Personal Income Tax, Prerefunded Balance, Series A, Revenue Bond, AGM		5.000%		3/15/2014	Aa3		500,000		544,385
New York State Thruway Authority, Personal Income Tax, Prerefunded Balance, Series A, Revenue Bond, NATL		5.000%		3/15/2016	AAA2		300,000		326,631
New York State Thruway Authority, Series F, Revenue Bond, AMBAC		5.000%		1/1/2026	A1		340,000		340,731
New York State Urban Development Corp., Correctional Capital Facilities, Series A, Revenue Bond, AGM		5.250%		1/1/2014	Aa3		500,000		536,635
New York State Urban Development Corp., Personal Income Tax, Series C, Revenue Bond, NATL		4.250%		3/15/2024	Baa1		1,000,000		1,010,100
New York State Urban Development Corp., Service Contract, Series B, Revenue Bond		5.250%		1/1/2022	AA2		2,350,000		2,515,158
New York State, Series A, G.O. Bond		4.600%		3/15/2013	Aa2		475,000		483,208
New York State, Series C, G.O. Bond		4.000%		2/1/2027	Aa2		600,000		570,990
New York State, Series C, G.O. Bond, AGM		5.000%		4/15/2012	Aa2		700,000		740,404

9 The accompanying notes are an integral part of the financial statements.

Investment Portfolio - December 31, 2010

	Coupon Rate	Maturity Date		Credit Rating1 (unaudited)	Principal Amount		Value (Note 2)
NEW YORK MUNICIPAL BONDS (continued)
New York State, Transit Impt., Series A, G.O. Bond	4.500%		3/1/2040	Aa2	$	1,500,000	$	1,400,685
New York State, Water Utility Impt., Series A, G.O. Bond	4.500%		3/15/2019	Aa2		500,000		528,675
Niagara County, Series B, G.O. Bond, NATL	5.200%		1/15/2011	Baa1		400,000		400,688
Niagara Falls City School District, G.O. Bond, AGM	4.375%		9/15/2029	AA2		885,000		856,910
Niagara-Wheatfield Central School District, G.O. Bond, FGRNA	4.125%		2/15/2019	Aa3		610,000		645,581
Niagara-Wheatfield Central School District, G.O. Bond, FGRNA	4.125%		2/15/2020	Aa3		850,000		883,677
Niskayuna Central School District, G.O Bond, AGC	4.000%		4/15/2022	Aa2		400,000		405,952
Onondaga County, Series A, G.O. Bond	4.500%		3/1/2028	Aa1		365,000		368,511
Orangetown, Public Impt., G.O. Bond	3.000%		9/15/2026	Aa2		580,000		507,987
Otsego County, G.O. Bond	4.000%		11/15/2027	Aa3		790,000		769,144
Palmyra Macedon Central School District, G.O. Bond	3.750%		6/15/2024	Aa3		500,000		487,845
Pembroke Central School District, G.O. Bond	4.000%		6/15/2023	AA2		500,000		506,325
Penfield Central School District, G.O. Bond	4.000%		6/15/2024	Aa2		1,025,000		1,021,290
Perinton, Public Impt., G.O. Bond	4.250%		12/15/2031	AA2		175,000		170,027
Phelps-Clifton Springs Central School District, Series B, G.O. Bond, NATL	5.000%		6/15/2021	A1		850,000		876,257
Phelps-Clifton Springs Central School District,
Series B, G.O. Bond, NATL	5.000%		6/15/2022	A1		450,000		461,916
Pleasantville Union Free School District, G.O. Bond	4.250%		5/1/2038	Aa2		500,000		441,095
Pleasantville Union Free School District, G.O. Bond	4.375%		5/1/2039	Aa2		500,000		445,680
Port Authority of New York & New Jersey, Revenue Bond	5.000%		7/15/2024	Aa2		3,000,000		3,157,440
Port Authority of New York & New Jersey, Revenue Bond	4.750%		7/15/2030	Aa2		495,000		483,897
Port Authority of New York & New Jersey, Revenue Bond	5.000%		10/1/2030	Aa2		1,000,000		1,005,880
Port Authority of New York & New Jersey, Revenue Bond	4.500%		10/15/2037	Aa2		400,000		370,072
Pulaski Central School District, Series A, G.O. Bond, FGRNA	4.500%		6/15/2026	A2		425,000		426,828
Ramapo, Public Impt., Series B, G.O. Bond, NATL	4.375%		5/1/2031	Aa2		435,000		410,601
Ramapo, Public Impt., Series B, G.O. Bond, NATL	4.375%		5/1/2032	Aa2		510,000		477,345

The accompanying notes are an integral part of the financial statements. 10

Investment Portfolio - December 31, 2010

	Coupon Rate		Maturity Date		Credit Rating1 (unaudited)	Principal Amount		Value (Note 2)
NEW YORK MUNICIPAL BONDS (continued)
Ramapo, Public Impt., Series B, G.O. Bond, NATL		4.500%		5/1/2033	Aa2	$	410,000	$	391,611
Ravena Coeymans Selkirk Central School District, G.O. Bond, AGM		4.250%		6/15/2014	Aa3		1,180,000		1,273,432
Rochester City, Series A, G.O. Bond, AMBAC		5.000%		8/15/2020	Aa3		250,000		281,447
Rochester City, Series A, G.O. Bond, AMBAC		5.000%		8/15/2022	A2		95,000		105,806
Sachem Central School District of Holbrook, G.O. Bond, FGRNA		4.250%		10/15/2028	AA2		330,000		317,255
Sachem Central School District of Holbrook, G.O. Bond, FGRNA		4.375%		10/15/2030	AA2		1,000,000		941,150
Sachem Central School District of Holbrook, Series B, G.O. Bond, FGRNA		4.250%		10/15/2026	AA2		1,200,000		1,189,572
Saratoga County Water Authority, Water Utility Impt., Revenue Bond		5.000%		9/1/2038	AA2		950,000		945,706
Saratoga County, Public Impt., Series A, G.O. Bond		4.750%		7/15/2036	Aa1		820,000		811,603
Saratoga County, Sewer Impt., Series B, G.O. Bond		4.200%		7/15/2032	AA2		425,000		383,371
Saratoga County, Sewer Impt., Series B, G.O. Bond		4.250%		7/15/2035	AA2		700,000		631,736
Saratoga Springs City School District, G.O. Bond		5.000%		6/15/2019	AA2		245,000		281,314
Schenectady, G.O. Bond, NATL		5.300%		2/1/2011	A1		250,000		250,877
Schroon Lake Central School District, G.O. Bond, AGM		4.000%		6/15/2027	Aa3		490,000		477,294
Schuylerville Central School District, G.O. Bond, AGM		4.000%		6/15/2025	AA2		500,000		496,735
Somers Central School District, G.O. Bond, NATL		4.000%		12/1/2023	Aa2		400,000		396,008
South Country Central School District at Brookhaven, G.O. Bond, AGM		4.000%		7/15/2027	AA2		750,000		694,493
South Glens Falls Central School District, Unrefunded Balance, G.O. Bond, FGRNA		5.375%		6/15/2018	A1		95,000		96,805
Spencerport Fire District, G.O. Bond, AGC		4.500%		11/15/2031	AA2		290,000		288,431
Spencerport Fire District, G.O. Bond, AGC		4.500%		11/15/2032	AA2		250,000		246,225
St. Lawrence County, Public Impt., G.O. Bond, FGRNA		4.500%		5/15/2031	A2		1,185,000		1,095,497
St. Lawrence County, Public Impt., G.O. Bond, FGRNA		4.500%		5/15/2032	A2		1,000,000		916,310
Suffolk County Water Authority, Revenue Bond, NATL		4.500%		6/1/2027	Baa1		1,160,000		1,136,220
Suffolk County Water Authority, Series A, Revenue Bond		4.500%		6/1/2030	AA2		640,000		608,602

11 The accompanying notes are an integral part of the financial statements.

Investment Portfolio - December 31, 2010

	Coupon Rate	Maturity Date		Credit Rating1 (unaudited)	Principal Amount		Value (Note 2)
NEW YORK MUNICIPAL BONDS (continued)
Suffolk County Water Authority, Series A, Revenue Bond, NATL	4.500%		6/1/2032	Baa1	$	1,000,000	$	933,440
Suffolk County, Public Impt., Series A, G.O. Bond, NATL	4.250%		5/1/2024	Aa2		1,000,000		1,005,640
Syracuse, Public Impt., Series A, G.O. Bond, FGRNA	4.250%		12/1/2028	A1		600,000		546,468
Syracuse, Public Impt., Series A, G.O. Bond, FGRNA	4.250%		12/1/2029	A1		600,000		539,226
Syracuse, Public Impt., Series A, G.O. Bond, NATL	4.250%		6/15/2023	A1		690,000		663,352
Syracuse, Public Impt., Series A, G.O. Bond, NATL	4.375%		6/15/2025	A1		990,000		934,144
Tarrytowns Union Free School District, G.O. Bond, AMBAC	4.250%		1/15/2030	Aa2		215,000		197,972
Tarrytowns Union Free School District, G.O. Bond, AMBAC	4.375%		1/15/2032	Aa2		1,090,000		1,004,599
Tompkins County, Public Impt., G.O. Bond	4.250%		12/15/2032	Aa1		300,000		292,464
Triborough Bridge & Tunnel Authority, General Purposes, Prerefunded Balance, Series A, Revenue Bond, NATL	4.750%		1/1/2019	AA2		300,000		341,367
Triborough Bridge & Tunnel Authority, General Purposes, Prerefunded Balance, Series A, Revenue Bond, NATL	5.000%		1/1/2032	AAA2		1,695,000		1,771,156
Triborough Bridge & Tunnel Authority, General Purposes, Series B, Revenue Bond	5.000%		11/15/2020	Aa2		750,000		782,018
Triborough Bridge & Tunnel Authority, General Purposes, Unrefunded Balance, Series A, Revenue Bond, NATL	5.000%		1/1/2032	Aa2		305,000		305,088
Triborough Bridge & Tunnel Authority, Series C, Revenue Bond	5.000%		11/15/2038	Aa2		900,000		901,107
Triborough Bridge & Tunnel Authority, Subordinate Bonds, Revenue Bond, FGRNA .	5.000%		11/15/2032	Aa3		1,000,000		1,000,740
Ulster County, Public Impt., G.O. Bond, XLCA	4.500%		11/15/2026	AA2		560,000		565,919
Ulster County, Public Impt., Series A, G.O. Bond, FGRNA	4.250%		11/15/2021	AA2		200,000		205,038
Union Endicott Central School District, G.O. Bond, FGRNA	4.125%		6/15/2014	A2		605,000		651,264
Union Endicott Central School District, G.O. Bond, FGRNA	4.125%		6/15/2015	A2		865,000		933,923
Village of Fayetteville, Public Impt., Series A, G.O. Bond, AGM	4.000%		6/15/2025	Aa3		555,000		548,384
Wayne County, Public Impt., G.O. Bond, NATL	4.125%		6/1/2024	Aa2		500,000		501,650
West Seneca Central School District, G.O. Bond, AGM	5.000%		5/1/2011	Aa3		300,000		304,716

The accompanying notes are an integral part of the financial statements. 12

Investment Portfolio - December 31, 2010

	Coupon Rate		Maturity Date		Credit Rating1 (unaudited)	Principal Amount/ Shares		Value (Note 2)
NEW YORK MUNICIPAL BONDS (continued)
Westchester County, Public Impt., Series B, G.O. Bond		4.300%		12/15/2011	Aaa	$	15,000	$	15,569
Westchester County, Public Impt., Series B, G.O. Bond		3.700%		12/15/2015	Aaa		1,000,000		1,060,650
Westhampton Beach Union Free School District, G.O. Bond, NATL		4.000%		7/15/2018	Aa2		726,000		764,275
White Plains City School District, Series B, G.O. Bond		4.650%		5/15/2031	Aa2		685,000		702,680
Yonkers City, Series B, G.O. Bond, NATL		5.000%		8/1/2023	A2		1,125,000		1,127,183
Yonkers City, Series B, G.O. Bond, NATL		5.000%		8/1/2030	A2		1,095,000		1,006,907
TOTAL MUNICIPAL BONDS (Identified Cost $136,126,767)									134,035,734
SHORT-TERM INVESTMENTS - 0.8%
Dreyfus BASIC New York Municipal Money Market Fund (Identified Cost $1,115,340)							1,115,340		1,115,340
TOTAL INVESTMENTS - 99.2% (Identified Cost $137,242,107)									135,151,074
OTHER ASSETS, LESS LIABILITIES - 0.8%									1,074,296
NET ASSETS - 100%								$	136,225,370

KEY:

G.O. Bond - General Obligation Bond

Impt. - Improvement

Scheduled principal and interest payments are guaranteed by:

AGC (Assured Guaranty Corp.)

AGM (Assurance Guaranty Municipal Corp.)

AMBAC (AMBAC Assurance Corp.)

CIFG (CIFG North America, Inc.)

FGIC (Financial Guaranty Insurance Co.)

FGRNA (FGIC reinsured by NATL)

NATL (National Public Finance Guarantee Corp.)

XLCA (XL Capital Assurance)

The insurance does not guarantee the market value of the municipal bonds.

¹Credit ratings from Moody’s (unaudited).

²Credit ratings from S&P (unaudited).

The Series’ portfolio holds, as a percentage of net assets, greater than 10% in bonds insured by the following companies:

NATL - 33.4%; AGM - 16.2%.

13 The accompanying notes are an integral part of the financial statements.

Statement of Assets and Liabilities

December 31, 2010

ASSETS:
Investments, at value (identified cost $137,242,107) (Note 2)	$135,151,074
Interest receivable	1,446,422
Receivable for fund shares sold	250,052
Dividends receivable	8
TOTAL ASSETS	136,847,556
LIABILITIES:
Accrued management fees (Note 3)	59,061
Accrued fund accounting and administration fees (Note 3)	9,584
Accrued transfer agent fees (Note 3)	770
Accrued Chief Compliance Officer service fees (Note 3)	245
Payable for fund shares repurchased	509,754
Other payables and accrued expenses	42,772
TOTAL LIABILITIES	622,186
TOTAL NET ASSETS	$136,225,370
NET ASSETS CONSIST OF:
Capital stock	$      133,648
Additional paid-in-capital	138,023,429
Undistributed net investment income	159,777
Accumulated net realized loss on investments	(451	)
Net unrealized depreciation on investments	(2,091,033	)
TOTAL NET ASSETS	$136,225,370
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER SHARE - Class A ($136,225,370/13,364,784 shares)	$          10.19

The accompanying notes are an integral part of the financial statements. 14

Statement of Operations

For the Year Ended December 31, 2010

INVESTMENT INCOME:
Interest	$	5,246,230
Dividends		195
Total Investment Income		5,246,425
EXPENSES:
Management fees (Note 3)		652,227
Fund accounting and administration fees (Note 3)		70,173
Directors’ fees (Note 3)		8,875
Transfer agent fees (Note 3)		4,398
Chief Compliance Officer service fees (Note 3)		2,630
Custodian fees		6,976
Miscellaneous		55,116
Total Expenses		800,395
Less reduction of expenses (Note 3)		(758	)
Net Expenses		799,637
NET INVESTMENT INCOME		4,446,788
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments		46,036
Net change in unrealized appreciation (depreciation) on investments		(4,689,742	)
NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS		(4,643,706	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(196,918	)

15 The accompanying notes are an integral part of the financial statements.

Statements of Changes in Net Assets

	For the Year Ended 12/31/10			For the Year Ended 12/31/09
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income		$    4,446,788			$    3,752,622
Net realized gain on investments		46,036			236,539
Net change in unrealized appreciation (depreciation) on investments		(4,689,742	)		7,946,641
Net increase (decrease) from operations		(196,918	)		11,935,802
DISTRIBUTIONS TO SHAREHOLDERS (Note 8):
From net investment income		(4,857,125	)		(4,042,429	)
From net realized gain on investments		(113,664	)		(341,360	)
Total distributions to shareholders		(4,970,789	)		(4,383,789	)
CAPITAL STOCK ISSUED AND REPURCHASED:
Net increase from capital share transactions (Note 5)		30,861,062			5,778,371
Net increase in net assets		25,693,355			13,330,384
NET ASSETS:
Beginning of year		110,532,015			97,201,631
End of year (including undistributed net investment income of $159,777 and $577,775, respectively)		$136,225,370			$110,532,015

The accompanying notes are an integral part of the financial statements. 16

Financial Highlights

			For the Years Ended
	12/30/10		12/31/09			12/31/08		12/31/07		12/31/06
Per share data (for a share outstanding throughout each year):
Net asset value - Beginning of year		$10.55		$9.79			$10.41		$10.44		$10.45
Income (loss) from investment operations:
Net investment income		0.361		0.381			0.38		0.37		0.38
Net realized and unrealized gain (loss) on investments		(0.32)		0.82			(0.63)		(0.01)		(0.02)
Total from investment operations		0.04		1.20			(0.25)		0.36		0.36
Less distributions to shareholders:
From net investment income		(0.39)		(0.41)	��		(0.36)		(0.37)		(0.36)
From net realized gain on investments		(0.01)		(0.03)			(0.01)		(0.02)		(0.01)
Total distributions to shareholders		(0.40)		(0.44)			(0.37)		(0.39)		(0.37)
Net asset value - End of year		$10.19		$10.55			$9.79		$10.41		$10.44
Net assets - End of year (000’s omitted)		$136,225		$110,532			$97,202		$111,704		$92,910
Total return2		0.32%		12.46%			(2.37%)		3.44%		3.48%
Ratios (to average net assets)/ Supplemental Data:
Expenses*		0.61%		0.64%			0.64%		0.65%		0.68%
Net investment income		3.41%		3.64%			3.71%		3.66%		3.68%
Portfolio turnover		7%		10%			11%		7%		8%
*The investment advisor did not impose all or a portion of its management fees, CCO fees, fund accounting and transfer agent fees, and other fees in some years and in some years paid a portion of the Series’ expenses. If these expenses had been incurred by the Series, the expense ratio (to average net assets) would have been increased by the following amounts:
		0.00%3		0.00%3			N/A		N/A		N/A

¹Calculated based on average shares outstanding during the year.

²Represents aggregate total return for the periods indicated, and assumes reinvestment of all distributions. Total return would have been lower had certain expenses not been waived or reimbursed during the periods. Periods less than one year are not annualized.

³Less than 0.01%.

17 The accompanying notes are an integral part of the financial statements.

Notes to Financial Statements

1. ORGANIZATION

New York Tax Exempt Series (the “Series”) is a no-load diversified series of Manning & Napier Fund, Inc. (the “Fund”). The Fund is organized in Maryland and is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company.

The Series’ investment objective is to provide as high a level of current income exempt from federal income tax and New York State personal income tax as the Advisor believes is consistent with the preservation of capital.

The Fund’s Advisor is Manning & Napier Advisors, Inc. (the “Advisor”). Shares of the Series are offered to investors, clients and employees of the Advisor and its affiliates. The total authorized capital stock of the Fund consists of 10.0 billion shares of common stock each having a par value of $0.01. As of December 31, 2010, 6.2 billion shares have been designated in total among 29 series, of which 100 million have been designated as New York Tax Exempt Series Class A common stock.

2. SIGNIFICANT ACCOUNTING POLICIES

Security Valuation

Municipal securities will normally be valued on the basis of market valuations provided by an independent pricing service (the “Service”). The Service utilizes the latest price quotations and a matrix system (which considers such factors as security prices of similar securities, yields, maturities and ratings). The Service has been approved by the Fund’s Board of Directors (the “Board”).

Short-term investments that mature in sixty days or less are valued at amortized cost, which approximates market value. Investments in open-end investment companies are valued at their net asset value per share on valuation date.

Volume and level of activity in established markets for an asset or liability are evaluated to determine whether recent transactions and quoted prices are determinative of fair value. Where there have been significant decreases in volume and level of activity, further analysis and adjustment may be necessary to estimate fair value. The Series measures fair value in these instances by the use of inputs and valuation techniques which may be based upon current market prices of securities that are comparable in coupon, rating, maturity and industry and/or expectation of future cash flows. As a result of trading in relatively thin markets and/or markets that experience significant volatility, the prices used by the Series to value these securities may differ from the value that would be realized if these securities were sold, and the differences could be material.

Securities for which representative valuations or prices are not available from the Fund’s pricing service may be valued at fair value. Due to the inherent uncertainty of valuations of such securities, the fair value may differ significantly from the values that would have been used had a ready market for such securities existed. If trading or events occurring after the close of the principal market in which securities are traded are expected to materially affect the value of those securities, then they may be valued at their fair value, taking this trading or these events into account. Fair value is determined in good faith by the Advisor under procedures approved by and under the general supervision and responsibility of the Board.

Various inputs are used in determining the value of the Series’ assets or liabilities carried at market value. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical assets and liabilities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.). Level 3 includes significant unobservable inputs (including the Series’ own assumptions in determining the fair value of investments). The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

18

Notes to Financial Statements

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

Security Valuation (continued)

The following is a summary of the valuation levels used for major security types as of December 31, 2010 in valuing the Series’ assets or liabilities carried at market value:

Description	Total		Level 1		Level 2		Level  3
Assets:
Equity securities*	$	—	$	—	$	—	$	—
Preferred securities		—		—		—		—
Debt securities:
States and political subdivisions (municipals)		134,035,734		—		134,035,734		—
Mutual funds		1,115,340		1,115,340		—		—
Other finanical instruments**:		—		—		—		—
Total assets:		135,151,074		1,115,340		134,035,734		—
Liabilities:
Other financial instruments**:		—		—		—		—
Total liabilities:		—		—		—		—
Total	$	135,151,074	$	1,115,340	$	134,035,734	$	—

*Includes common stock, warrants and rights. Please see the Investment Portfolio for industry classification.

**Other financial instruments are derivative instruments not reflected in the Investment Portfolio, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument. As of December 31, 2010, the Series did not hold any derivative instruments.

There were no Level 3 securities held by the Series as of December 31, 2009 or December 31, 2010.

The Fund’s policy is to recognize transfers in and transfers out of the valuation levels as of the beginning of the reporting period. There were no significant transfers between Level 1 and Level 2 during the year ended December 31, 2010.

Additional disclosure surrounding the activity in Level 3 fair value measurement will be effective for fiscal years beginning after December 15, 2010. Management has concluded that this will not have a material impact on the Series’ financial statements.

Security Transactions, Investment Income and Expenses

Security transactions are accounted for on trade date. Dividend income is recorded on the ex-dividend date, except that if the ex-dividend date has passed, certain dividends from foreign securities are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends, if any, are recorded at the fair market value of the securities received. Interest income, including amortization of premium and accretion of discounts using the effective interest method, is earned from settlement date and accrued daily.

Expenses are recorded on an accrual basis. Most expenses of the Fund can be attributed to a specific series. Expenses which cannot be directly attributed are apportioned among the series in the Fund in such a manner as deemed equitable by the Fund’s Board, taking into consideration, among other things, the nature and type of expense.

The Series uses the identified cost method for determining realized gain or loss on investments for both financial statement and federal income tax reporting purposes.

19

Notes to Financial Statements

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

Federal Taxes

The Series’ policy is to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies. The Series is not subject to federal income tax or excise tax to the extent that the Series distributes to shareholders each year its taxable income, including any net realized gains on investments, in accordance with requirements of the Internal Revenue Code. Accordingly, no provision for federal income tax or excise tax has been made in the financial statements.

Management evaluates its tax positions to determine if the tax positions taken meet the minimum recognition threshold in connection with accounting for uncertainties in income tax positions taken or expected to be taken for the purposes of measuring and recognizing tax liabilities in the financial statements. Recognition of tax benefits of an uncertain tax position is required only when the position is “more likely than not” to be sustained assuming examination by taxing authorities. At December 31, 2010, the Series has recorded no liability for net unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken in future tax returns.

The Series files income tax returns in the U.S. federal jurisdiction and various states, as required. No income tax returns are currently under investigation. The statute of limitations on the Series’ tax returns remains open for the years ended December 31, 2007 through December 31, 2010. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.

Distributions of Income and Gains

Distributions to shareholders of net investment income are made quarterly. Distributions of net realized gains are made annually. An additional distribution may be necessary to avoid taxation of the Series. Distributions are recorded on the ex-dividend date.

Indemnifications

The Fund’s organizational documents provide former and current directors and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund’s maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.

Other

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.

3. TRANSACTIONS WITH AFFILIATES

The Fund has an Investment Advisory Agreement (the “Agreement”) with the Advisor, for which the Series pays a fee, computed daily and payable monthly, at an annual rate of 0.50% of the Series’ average daily net assets.

Under the Agreement, personnel of the Advisor provide the Series with advice and assistance in the choice of investments and the execution of securities transactions, and otherwise maintain the Series’ organization. The Advisor also provides the Fund with necessary office space and fund administration and support services. The salaries of all officers of the Fund (except a percentage of the Fund’s Chief Compliance Officer’s salary, which is paid by the Fund), and of all Directors who are “affiliated persons” of the Fund, or of the Advisor, and all personnel of the Fund, or of the Advisor, performing services relating to research, statistical and investment activities, are paid by the

20

Notes to Financial Statements

3. TRANSACTIONS WITH AFFILIATES (continued)

Advisor. Each “non-affiliated” Director receives an annual stipend, which is allocated among all the active series of the Fund. In addition, these Directors also receive a fee per Board meeting attended plus a fee for each committee meeting attended.

The Advisor has contractually agreed, until at least April 30, 2012, to waive its fee and, if necessary, pay other operating expenses of the Series in order to maintain total direct annual fund operating expenses for the Series at no more than 0.85% of average daily net assets each year. For the year ended December 31, 2010, the Advisor voluntarily waived fees of $758, which is reflected as a reduction of expenses on the Statement of Operations. The Advisor is not eligible to recoup any expenses that have been waived or reimbursed in prior years.

Manning & Napier Investor Services, Inc., a registered broker-dealer affiliate of the Advisor, acts as distributor for the Fund’s shares. The services of Manning & Napier Investor Services, Inc. are provided at no additional cost to the Series.

The Advisor has agreements with PNC Global Investment Servicing (U.S.) Inc. (“PNCGIS”) under which PNCGIS serves as sub-accountant services agent and sub-transfer agent. The Fund pays the Advisor an annual fee related to fund accounting and administration of 0.0175% on the first $3 billion of average daily net assets (excluding Target Series); 0.015% on the next $3 billion of average daily net assets (excluding Target Series); and 0.01% of the average daily net assets in excess of $6 billion (excluding Target Series); plus a base fee of $25,500 per Series. Transfer Agent fees are charged to the Fund on a per account basis. Additionally, certain transaction- and cusip-based fees and out-of-pocket expenses, including charges for reporting relating to the Fund’s compliance program, are charged.

Effective July 1, 2010, PNCGIS was sold to The Bank of New York Mellon Corporation, the Series’ custodian. At the close of the sale, PNCGIS changed its name to BNY Mellon Investment Servicing (U.S.) Inc. (“BNY”).

Expenses not directly attributable to a Series are allocated based on each Series’ relative net assets or number of accounts, depending on the expense.

4. PURCHASES AND SALES OF SECURITIES

For the year ended December 31, 2010, purchases and sales of securities, other than U.S. Government securities and short-term securities, were $41,206,181 and $8,159,650, respectively. There were no purchases or sales of U.S. Government securities.

5. CAPITAL STOCK TRANSACTIONS

Transactions in shares of New York Tax Exempt Series were:

	For the Year Ended 12/31/10						For the Year Ended 12/31/09
	Shares			Amount			Shares			Amount
Sold		3,733,646		$	39,811,439			1,541,814		$	16,071,689
Reinvested		448,246			4,689,832			399,655			4,143,970
Repurchased		(1,293,178	)		(13,640,209	)		(1,396,044	)		(14,437,288	)
Total		2,888,714		$	30,861,062			545,425		$	5,778,371

21

Notes to Financial Statements

5. CAPITAL STOCK TRANSACTIONS (continued)

Substantially all of the Series’ shares represent investments by fiduciary accounts over which the Advisor has sole investment discretion.

6. FINANCIAL INSTRUMENTS

The Series may trade in instruments including written and purchased options, forward foreign currency exchange contracts and futures contracts and other derivatives in the normal course of investing activities to assist in managing exposure to various market risks. Investments in these instruments may subject the Series to various elements of risk, which may involve, to a varying degree, elements of risk in excess of the amounts recognized for financial statement purposes. These risks include: the risk that changes in the value of a derivative may not correlate perfectly with the underlying asset, rate or index, counterparty credit risk related to over the counter derivatives counterparties’ failure to perform under contract terms, liquidity risk related to the lack of a liquid market for these contracts allowing the fund to close out its position(s) and documentation risk relating to disagreement over contract terms. No such investments were held by the Series during the year ended December 31, 2010.

7. CONCENTRATION OF CREDIT

The Series primarily invests in debt obligations issued by the State of New York and its political subdivisions, agencies and public authorities to obtain funds for various public purposes. The Series is more susceptible to factors adversely affecting issues of New York municipal securities than is a municipal bond fund that is not concentrated in these issues to the same extent.

8. FEDERAL INCOME TAX INFORMATION

The amount and characterization of certain income and capital gains to be distributed are determined in accordance with federal income tax regulations, which may differ from accounting principles generally accepted in the United States of America. These differences are primarily due to differing book and tax treatments in the timing of the recognition of net investment income or gains and losses, including market discount and post-October losses. The Series may periodically make reclassifications among its capital accounts to reflect income and gains available for distribution (or available capital loss carryovers) under income tax regulations without impacting the Series’ net asset value. Any such reclassifications are not reflected in the financial highlights.

The tax character of distributions paid were as follows:

	For the Year Ended 12/31/10		For the Year Ended 12/31/09
Ordinary income	$	—	$	6,320
Tax exempt income		4,858,448		4,036,109
Long-term capital gains		112,341		341,360

For the year ended December 31, 2010, the Series elected to defer $451 of capital losses, attributable to post-October losses.

22

Notes to Financial Statements

8. FEDERAL INCOME TAX INFORMATION

(continued)

At December 31, 2010, the tax basis of distributable earnings and the net unrealized appreciation based on the identified cost of investments for federal income tax purposes were as follows:

Cost for federal income tax purposes	$	137,209,517
Unrealized appreciation	$	1,682,337
Unrealized depreciation		(3,740,780	)
Net unrealized depreciation	$	(2,058,443	)
Undistributed tax exempt income		127,187

23

Report of Independent Registered Public Accounting Firm

To the Board of Directors of Manning & Napier Fund, Inc. and Shareholders of New York Tax Exempt Series:

In our opinion, the accompanying statement of assets and liabilities, including the investment portfolio (except for credit ratings), and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the New York Tax Exempt Series (a series of Manning & Napier Fund, Inc., hereafter referred to as the “Series”) at December 31, 2010, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Series’ management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2010 by correspondence with the custodian, provide a reasonable basis for our opinion.

New York, New York

February 22, 2011

24

Supplemental Tax Information (unaudited)

All designations are based on financial information available as of the date of this annual report and, accordingly are subject to change.

Pursuant to Section 852 of the Internal Revenue Code, as amended, the Series hereby designates $112,341 as capital gains for its taxable year ended December 31, 2010. In addition, the Series hereby designates $4,858,448 as tax exempt dividends for the year ended December 31, 2010. For each item it is the intention of the Series to designate the maximum allowable under tax law.

25

Renewal of Investment Advisory Agreement (unaudited)

At the Manning & Napier Fund, Inc. (the “Fund”) Board of Directors’ (the “Board”) meeting, held on November 17, 2010, the Investment Advisory Agreement (the “Agreement”) between the Fund and Manning & Napier Advisors, Inc. (the “Advisor”) was reviewed by the Board for renewal. In connection with the decision whether to renew the Agreement, a variety of material was prepared for and reviewed by the Board.

Representatives of the Advisor attended the meeting and presented additional oral and written information to the Board to assist the Board in its considerations. The discussion immediately below outlines the materials and information presented to the Board in connection with the Board’s 2010 Annual Review of the Agreement and the conclusions made by the Directors when determining to continue the Agreement.

• The Board considered the services provided by the Advisor under the Agreement including, among others: deciding what securities to purchase and sell for each Series; arranging for the purchase and sale of such securities by placing orders with broker-dealers; administering the affairs of the Fund (including the books and records of the Fund not maintained by third party service providers such as the custodian or sub-transfer agent); arranging for the insurance coverage for the Fund; and supervising the preparation of tax returns, SEC filings (including registration statements) and reports to shareholders for the Fund. The Board also considered the nature and quality of such services provided under the Agreement in light of the Advisor’s services provided to the Fund for 24 years. The Board discussed the quality of these services with representatives from the Advisor and concluded that the Advisor was performing its services to the Fund required under the Agreement in a reasonable manner.

• The Board considered the investment performance of the various Series of the Fund. The investment performance for each Series was reviewed on a cumulative basis since inception and on a one year basis. In addition, annualized performance for the following time periods was considered: inception, three year, five year, ten year, and current market cycle. A market cycle includes periods of both rising and falling markets. Returns for established benchmark indices for each Series were provided for each time period. The Board noted that the various Series were competitive against their respective benchmarks and/or peer groups over various time periods, but in particular over the full market cycle period relevant for the Series. In addition, the Board considered at the meeting (and considers on a quarterly basis) a peer group performance analysis consisting of Morningstar universes of mutual funds with similar investment objectives. The Board discussed the performance with representatives from the Advisor and concluded that the investment performance of each of the Fund’s Series was reasonable based on the Fund’s actual performance and comparative performance, especially performance over the current market cycle.

• The Board considered the costs of the Advisor’s services and the profits of the Advisor as they relate to the Advisor’s services to the Fund under the Agreement. In reviewing the Advisor’s costs and profits, the Board discussed the Advisor’s revenues generated from the Fund (on both an actual and adjusted basis) and its expenses associated with providing the services under the Agreement. In addition, the Board reviewed the Advisor’s expenses associated with Fund activities outside of the Agreement (such as expense reimbursements pursuant to expense caps and payments made by the Advisor to third party platforms on which shares of the Fund are available for purchase). It was noted by representatives of the Advisor that 11 of the 27 active Series of the Fund are currently experiencing expenses above the capped expense ratios. After discussing the above costs and profits, the Board concluded that the Advisor’s profitability relating to its services provided under the Agreement was reasonable.

• The Board considered the fees and expenses of the various Series of the Fund. The Advisor presented the advisory fees and total expenses for each Series, including the advisory fee adjusted for any expense waivers or reimbursements (either contractual or voluntary) paid by the Advisor. The advisory fees and expense ratios of each Series were compared to an average (on both a mean and median basis) of similar funds as disclosed on the Morningstar database. Representatives of the Advisor discussed with the Board the levels of its advisory

26

Renewal of Investment Advisory Agreement (unaudited)

fee for each Series of the Fund and as compared to the median and mean advisory fees for similar funds as listed on Morningstar. Expense ratios for every Series, except the Pro-Blend’s Class R and Class C, and Target Class R and Class C, are currently below the median and mean for similar funds as listed on Morningstar. Based on their review of the information provided, the Board concluded that the fees and expenses of each Series of the Fund were reasonable on a comparative basis.

• The Board also considered the other benefits the Advisor derives from its relationship with the Fund. Such other benefits include certain research products provided by soft dollars. Given the level of soft dollar transactions involving the Fund, the Board concluded that these additional benefits to the Advisor were reasonable.

• In addition to the factors described above, the Board considered the Advisor’s personnel, investment strategies, policies and procedures relating to compliance with personal securities transactions, and reputation, expertise and resources in domestic and foreign financial markets. The Board concluded that these factors support the conclusion that the Advisor performs its services in a reasonable manner.

• The Board did not consider economies of scale at this time because of the multiple uses of the Fund (for the Advisor’s discretionary investment account clients in addition to direct investors), the current profitability of the Advisor’s services to the Fund under the Agreement, and the overall size of the Fund complex.

Based on the Board’s deliberations and their evaluation of the information described above, the Board, including a majority of Directors that are not “interested persons” as defined in the Investment Company Act of 1940, concluded that the compensation under the Agreement was fair and reasonable in light of the services and expenses and such other matters as the Directors considered to be relevant in the exercise of their reasonable judgment. Accordingly, the Board approved the renewal of the Agreement. In the course of their deliberations, the Directors did not identify any particular information that was all important or controlling.

27

Directors’ and Officers’ Information (unaudited)

The Statement of Additional Information provides additional information about the Fund’s directors and officers and can be obtained without charge by calling 1-800-466-3863, at www.manningnapieradvisors.com, or on the EDGAR Database on the SEC Internet web site (http:// www.sec.gov). The following chart shows certain information about the Fund’s officers and directors, including their principal occupations during the last five years. Unless specific dates are provided, the individuals have held the listed positions for longer than five years.

INTERESTED DIRECTOR/OFFICER
Name:	B. Reuben Auspitz*
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	63
Current Position(s) Held with Fund:	Principal Executive Officer, President, Chairman & Director
Term of Office1 & Length of Time Served:	Indefinite - Director since 1984; Vice President 1984 - 2003; President since 2004; Principal Executive Officer since 2002
Principal Occupation(s) During Past 5 Years:	Executive Vice President; Executive Group Member**; Chief Compliance Officer since 2004; Vice Chairman since June 2010; Co-Executive Director from 2003-2010 - Manning & Napier Advisors, Inc. President; Director - Manning & Napier Investor Services, Inc. Holds or has held one or more of the following titles for various subsidiaries and affiliates: President, Vice President, Director, Chairman, Treasurer, Chief Compliance Officer or Member.
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
INDEPENDENT DIRECTORS
Name:	Paul A. Brooke
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	65
Current Position(s) Held with Fund:	Director, Audit Committee Member, Governance & Nominating
	Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 2007
Principal Occupation(s) During Past 5 Years:	Chairman & CEO, Alsius Corp. (investments); Managing Member, PMSV
	Holdings LLC (investments)
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	Incyte Corp. (2000-present)
	ViroPharma, Inc. (2000-present)
	HLTH Corp. (2000-present)
	Cheyne Capital International (2000-present)
	MPM Bio-equities (2000-present)
	GMP Companies (2000-present)
	HoustonPharma (2000-present)
Name:	Richard M. Hurwitz
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	47
Current Position(s) Held with Fund:	Director, Audit Committee Member, Governance & Nominating
	Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 2009
Principal Occupation(s) During Past 5 Years:	Chief Executive Officer, Pictometry International Corp. since August 2010 (provider of georeferenced, aerial image libraries and related software) Managing Partner (2006-July 2010) - Aegis Investment Partners, LLC (investments); Founder and Managing Partner (2004-2005) - Village Markets, LLC (groceries)
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	Pictometry International Corp. (2000-2010)
	Pioneering Technologies (2006-2009)
	Vensearch Capital Corp. (2003-2007)

28

Directors’ and Officers’ Information (unaudited)

INDEPENDENT DIRECTORS (continued)
Name:	Stephen B. Ashley
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	70
Current Position(s) Held with Fund:	Director, Audit Committee Member, Governance & Nominating
	Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 1996
Principal Occupation(s) During Past 5 Years:	Chairman, Director, President & Chief Executive Officer, The Ashley Group (property management and investment). Chairman (non-executive) 2004-2008; Director 1995-2008 - Fannie Mae (mortgage)
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	The Ashley Group (1995-2008)
	Genesee Corporation (1987-2007)
Name:	Peter L. Faber
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	72
Current Position(s) Held with Fund:	Director, Governance & Nominating Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 1987
Principal Occupation(s) During Past 5 Years:	Senior Counsel since 2006, Partner (1995 - 2006) - McDermott, Will &
	Emery LLP (law firm)
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	Partnership for New York City, Inc. (non-profit)
	New York Collegium (non-profit)
	Boston Early Music Festival (non-profit)
Name:	Harris H. Rusitzky
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	76
Current Position(s) Held with Fund:	Director, Audit Committee Member, Governance & Nominating
	Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 1985
Principal Occupation(s) During Past 5 Years:	President, The Greening Group (business consultants) since 1994;
	Partner, The Restaurant Group (restaurants) since 2006
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
OFFICERS
Name:	Jeffrey S. Coons, Ph.D., CFA
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	47
Current Position(s) Held with Fund:	Vice President
Term of Office1 & Length of Time Served:	Since 2004
Principal Occupation(s) During Past 5 Years:	President since 2010, Co-Director of Research since 2002, Executive Group Member** since 2003, - Manning & Napier Advisors, Inc. Holds one or more of the following titles for various subsidiaries and affiliates: President, Director, Treasurer or Senior Trust Officer.
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A

29

Directors’ and Officers’ Information (unaudited)

OFFICERS (continued)

Name:	Beth Galusha
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	49
Current Position(s) Held with Fund:	Assistant Chief Financial Officer
Term of Office1 & Length of Time Served:	Assistant Chief Financial Officer since 2010
Principal Occupation(s) During Past 5 Years:	Chief Financial Officer and Treasurer, Manning & Napier Advisors, Inc. Holds one or more of the following titles for various affiliates: Chief Financial Officer, Director, or Treasurer
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
Name:	Christine Glavin
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	44
Current Position(s) Held with Fund:	Principal Financial Officer, Chief Financial Officer
Term of Office1 & Length of Time Served:	Principal Financial Officer since 2002; Chief Financial Officer since 2001
Principal Occupation(s) During Past 5 Years:	Fund Reporting Manager, Manning & Napier Advisors, Inc. since 1997
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
Name:	Jodi L. Hedberg
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	43
Current Position(s) Held with Fund:	Corporate Secretary, Chief Compliance Officer, Anti-Money Laundering
	Compliance Officer
Term of Office1 & Length of Time Served:	Corporate Secretary since 1997; Chief Compliance Officer since 2004
Principal Occupation(s) During Past 5 Years:	Director of Compliance, Manning & Napier Advisors, Inc. and affiliates since 1990 (title change in 2005 from Compliance Manager to Director of Compliance); Corporate Secretary, Manning & Napier Investor Services, Inc. since 2006
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
Name:	Richard Yates
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	45
Current Position(s) Held with Fund:	Chief Legal Officer
Term of Office1 & Length of Time Served:	Chief Legal Officer since 2004
Principal Occupation(s) During Past 5 Years:	Counsel - Manning & Napier Advisors, Inc. & affiliates since 2000; Holds one or more of the following titles for various affiliates; Director or Corporate Secretary
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A

*Interested Director, within the meaning of the Investment Company Act of 1940 by reason of his position with the Fund’s investment advisor and distributor. Mr. Auspitz serves as the Executive Vice President and Director, Manning & Napier Advisors, Inc. and President and Director, Manning & Napier Investor Services, Inc., the Fund’s distributor.

**Prior to June 2010, the Executive Group, consisting of senior executive employee-owners, performed the duties of the Office of the Chief Executive of the Advisor. Effective June 2010, the Executive Group serves as an advisory board to the Chief Executive Officer.

¹The term of office for President, Vice President, Chief Financial Officer, Assistant Chief Financial Officer, Chief Legal Officer and Corporate Secretary is one year and until their respective successors are chosen and qualified. All other officers’ terms are indefinite.

30

Literature Requests (unaudited)

Proxy Voting Policies and Procedures

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available, without charge, upon request:

By phone	1-800-466-3863
On the Securities and Exchange   Commission’s (SEC) web site	http://www.sec.gov

Proxy Voting Record

Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30th is available, without charge, upon request:

By phone	1-800-466-3863
On the SEC’s web site	http://www.sec.gov

Quarterly Portfolio Holdings

The Series’ complete schedule of portfolio holdings for the 1st and 3rd quarters of each fiscal year are provided on Form N-Q, and are available, without charge, upon request:

By phone	1-800-466-3863
On the SEC’s web site	http://www.sec.gov

The Series’ Form N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

Prospectus and Statement of Additional Information (SAI)

The prospectus and SAI provide additional information about each Series, including charges, expenses and risks. These documents are available, without charge, upon request:

By phone	1-800-466-3863
On the SEC’s web site	http://www.sec.gov
On the Advisor’s web site	http://www.manning-napier.com

Additional information available at www.manning-napier.com

1. Fund Holdings - Month-End

2. Fund Holdings - Quarter-End

3. Shareholder Report - Annual

4. Shareholder Report - Semi-Annual

MNNYTES-12/10-AR

Management Discussion and Analysis (unaudited)

Dear Shareholders:

As well-defined swings in sentiment drove market fluctuations in 2010, the fixed income markets had favorable results for the year. Returns were broadly positive throughout the first three quarters of the year, with higher gains during the stock market pullback in the second quarter. However, while equities finished the year with a strong rally, fixed income markets generally took a negative turn at the end of the year. After eight consecutive quarters of positive performance, broad fixed income markets suffered losses in the fourth quarter.

Overall, corporate bonds were the best performing sector during 2010, with below investment grade securities experiencing significant gains. Mortgage securities and U.S. Treasury securities also performed well, particularly intermediate and longer-term U.S. Treasuries. While municipal bonds posted positive results for the year, the sector had the weakest returns in 2010, as credit concerns and supply and demand changes caused noteworthy losses during the last quarter.

The Bank of America Merrill Lynch U.S. Corporate, Government and Mortgage Index earned a solid 6.43% during the year. With a return of 8.97%, the Core Bond Series noticeably outpaced its benchmark.

Throughout 2010, the Core Bond Series maintained a heavy weighting to corporate bonds because the Advisor believes the supply and demand dynamics within this sector remain attractive. As of the end of the year, the Series had 81.8% of its assets invested in corporate bonds and preferred stocks, and this significant allocation to corporate bonds was the primary driver of outperformance over the past year.

During the second quarter, the Series sold its taxable municipal bonds (i.e., Build America Bonds) and reinvested the proceeds into commercial mortgage-backed securities, which are a type of asset-backed securities. Accordingly, the Series’ exposure to asset-backed securities increased throughout the year. While the Series started the year with no mortgage-backed securities holdings, the Advisor added exposure to this sector toward the end of the year.

As the markets unfold in 2011, it will be important to monitor trends such as monetary policy and inflation expectations. With this mindset, Manning & Napier remains committed to our active investment approach to fixed income. With our fundamentals-based investment strategies, we will continue to use tools such as sector, maturity, quality, and issue selections to take advantage of market opportunities and manage risk throughout the full bond market cycle. Staying focused on the fundamentals and maintaining our selective investment process helped us earn strong returns through the volatile markets of 2010, and we believe these qualities will remain important in the environment ahead.

As always, we appreciate your business.

Sincerely,

Manning & Napier Advisors, Inc.

1

Performance Update as of December 31, 2010 (unaudited)

	Average  Annual Total Returns As of December 31, 2010
	One Year			Five Year		Since Inception 1
Manning & Napier Fund, Inc. - Core Bond Series2		8.97	%		6.38%		5.76%
Bank of America (BofA) Merrill Lynch U.S. Corporate,
Government & Mortgage Index3		6.43	%		5.87%		5.50%

The following graph compares the value of a $10,000 investment in the Manning & Napier Fund, Inc. - Core Bond Series from its inception¹ (4/21/05) to present (12/31/10) to the BofA Merrill Lynch U.S. Corporate, Government & Mortgage Index.

¹Performance numbers for the Series and Index are calculated from April 21, 2005, the Series’ inception date.

²The Series’ performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of shares. The Series’ performance is historical and may not be indicative of future results. The performance returns shown are inclusive of the net expense ratio of the Series. For the year ended December 31, 2010, this net expense ratio was 0.76%. The gross expense ratio, which does not account for any voluntary or contractual waivers currently in effect, was 0.76% for the year ended December 31, 2010.

³The unmanaged BofA Merrill Lynch U.S. Corporate, Government & Mortgage Index (formerly a Merrill Lynch Index) is a market value weighted measure that represents U.S. government, corporate, and pass-through securities issued by entities within the United States, by supranational entities, or by entities headquartered outside of the United States but who have issued dollar-denominated securities within the United States. The Index only includes investment-grade securities with maturities of greater than one year. The Index returns assume reinvestment of coupons and, unlike Series returns, do not reflect any fees or expenses.

2

Shareholder Expense Example (unaudited)

As a shareholder of the Series, you may incur two types of costs: (1) transaction costs and (2) ongoing costs, including management fees and other Series expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Series and to compare these costs with the ongoing costs of investing in other mutual funds.

The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (July 1, 2010 to December 31, 2010).

Actual Expenses

The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Series’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Series’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid during the period. You may use this information to compare the ongoing costs of investing in the Series and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.

	Beginning Account  Value 7/1/10	Ending Account  Value 12/31/10	Expenses Paid During Period* 7/1/10-12/31/10
Actual	$1,000.00	$1,027.30	$3.88
Hypothetical
(5% return before expenses)	$1,000.00	$1,021.37	$3.87

*Expenses are equal to the Series’ annualized expense ratio (for the six-month period) of 0.76%, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). Expenses are based on the most recent fiscal half year; therefore, the expense ratio stated above may differ from the expense ratio stated in the financial highlights, which is based on one-year data. The Series’ total return would have been lower had certain expenses not been waived during the period.

3

Portfolio Composition as of December 31, 2010 (unaudited)

4

Investment Portfolio - December 31, 2010

	Credit Rating 1 (unaudited)		Principal Amount		Value (Note 2)
CORPORATE BONDS - 74.4%
Convertible Corporate Bonds - 1.1%
Health Care - 0.6%
Biotechnology - 0.5%
Amgen, Inc., 0.375%, 2/1/2013		A3	$	530,000	$	530,000
Health Care Equipment & Supplies - 0.1%
Medtronic, Inc., 1.625%, 4/15/2013		A1		120,000		120,750
Total Health Care						650,750
Information Technology - 0.5%
Computers & Peripherals - 0.5%
EMC Corp., 1.75%, 12/1/2013		A2		395,000		594,969
Total Convertible Corporate Bonds (Identified Cost $1,128,853)						1,245,719
Non-Convertible Corporate Bonds - 73.3%
Consumer Discretionary - 11.4%
Hotels, Restaurants & Leisure - 2.1%
International Game Technology, 7.50%, 6/15/2019		Baa2		1,095,000		1,232,600
Yum! Brands, Inc., 3.875%, 11/1/2020		Baa3		1,250,000		1,194,109
						2,426,709
Household Durables - 0.9%
Newell Rubbermaid, Inc., 4.70%, 8/15/2020		Baa3		1,000,000		991,949
Media - 4.7%
Comcast Corp., 6.50%, 11/15/2035		Baa1		925,000		994,162
Comcast Corp., 6.95%, 8/15/2037		Baa1		665,000		752,160
DIRECTV Holdings LLC, 5.20%, 3/15/2020		Baa2		965,000		1,000,399
Discovery Communications LLC, 5.05%, 6/1/2020		Baa2		965,000		1,020,453
Time Warner, Inc., 7.625%, 4/15/2031		Baa2		850,000		1,033,330
The Walt Disney Co., 5.50%, 3/15/2019		A2		500,000		567,687
						5,368,191
Multiline Retail - 0.7%
Target Corp., 6.00%, 1/15/2018		A2		670,000		775,677
Specialty Retail - 2.5%
AutoZone, Inc., 4.00%, 11/15/2020		Baa2		850,000		802,801
The Home Depot, Inc., 5.40%, 3/1/2016		Baa1		1,065,000		1,193,444
Lowe’s Companies, Inc., 6.10%, 9/15/2017		A1		745,000		861,657
						2,857,902
Textiles, Apparel & Luxury Goods - 0.5%
VF Corp., 5.95%, 11/1/2017		A3		485,000		541,000
Total Consumer Discretionary						12,961,428

The accompanying notes are an integral part of the financial statements. 5

Investment Portfolio - December 31, 2010

	Credit Rating 1 (unaudited)		Principal Amount		Value (Note  2)
CORPORATE BONDS (continued)
Non-Convertible Corporate Bonds (continued)
Consumer Staples - 2.5%
Beverages - 0.2%
PepsiCo, Inc., 7.90%, 11/1/2018		Aa3	$	157,000	$	201,998
Food & Staples Retailing - 0.5%
The Kroger Co., 5.50%, 2/1/2013		Baa2		230,000		248,789
The Kroger Co., 6.15%, 1/15/2020		Baa2		335,000		379,609
						628,398
Food Products - 1.8%
General Mills, Inc., 5.65%, 2/15/2019		Baa1		765,000		851,640
Grupo Bimbo SAB de CV (Mexico)3, 4.875%, 6/30/2020		Baa2		500,000		501,957
Kraft Foods, Inc., 6.125%, 2/1/2018		Baa2		565,000		645,397
						1,998,994
Total Consumer Staples						2,829,390
Energy - 5.9%
Energy Equipment & Services - 3.4%
Baker Hughes, Inc., 7.50%, 11/15/2018		A2		620,000		777,446
Baker Hughes, Inc., 5.125%, 9/15/2040		A2		1,000,000		976,782
Weatherford International Ltd. (Switzerland), 9.625%, 3/1/2019		Baa2		1,645,000		2,110,843
						3,865,071
Oil, Gas & Consumable Fuels - 2.5%
Apache Corp., 6.90%, 9/15/2018		A3		630,000		769,220
Hess Corp., 5.60%, 2/15/2041		Baa2		1,050,000		1,042,370
Shell International Finance B.V. (Netherlands), 4.30%, 9/22/2019.		Aa1		1,000,000		1,042,555
						2,854,145
Total Energy						6,719,216
Financials - 24.8%
Capital Markets - 5.9%
The Charles Schwab Corp., 4.45%, 7/22/2020		A2		1,010,000		1,006,096
Goldman Sachs Capital I, 6.345%, 2/15/2034		A3		830,000		790,865
Goldman Sachs Capital II4, 5.793%, 12/29/2049		Baa2		1,285,000		1,089,037
The Goldman Sachs Group, Inc., 6.15%, 4/1/2018		A1		690,000		759,823
The Goldman Sachs Group, Inc., 5.375%, 3/15/2020		A1		500,000		516,681
Merrill Lynch & Co., Inc., 6.11%, 1/29/2037		A3		805,000		726,654
Morgan Stanley, 5.55%, 4/27/2017		A2		1,727,000		1,799,189
						6,688,345
Commercial Banks - 6.6%
Household Finance Co., 6.375%, 11/27/2012		A3		785,000		851,069
HSBC Finance Corp., 7.00%, 5/15/2012		A3		1,025,000		1,099,769
KeyBank National Association, 5.45%, 3/3/2016		Baa1		1,050,000		1,104,968

6 The accompanying notes are an integral part of the financial statements.

Investment Portfolio - December 31, 2010

	Credit Rating 1 (unaudited)		Principal Amount		Value (Note 2)
CORPORATE BONDS (continued)
Non-Convertible Corporate Bonds (continued)
Financials (continued)
Commercial Banks (continued)
Manufacturers & Traders Trust Co., 6.625%, 12/4/2017		A3	$	1,135,000	$	1,274,207
National City Corp., 6.875%, 5/15/2019		Baa1		500,000		561,379
PNC Bank National Association, 5.25%, 1/15/2017		A3		880,000		913,563
USB Capital XIII Trust, 6.625%, 12/15/2039		A2		715,000		730,323
Wachovia Corp., 5.25%, 8/1/2014		A2		945,000		1,007,837
						7,543,115
Consumer Finance - 0.9%
American Express Co., 8.125%, 5/20/2019		A3		795,000		989,148
Diversified Financial Services - 2.9%
Bank of America Corp., 7.625%, 6/1/2019		A2		845,000		972,963
Citigroup, Inc., 8.50%, 5/22/2019		A3		1,190,000		1,477,308
JPMorgan Chase & Co., 6.30%, 4/23/2019		Aa3		785,000		893,530
						3,343,801
Insurance - 1.7%
American International Group, Inc., 4.25%, 5/15/2013		A3		660,000		683,000
Fidelity National Financial, Inc., 6.60%, 5/15/2017		Baa3		1,260,000		1,257,167
						1,940,167
Real Estate Investment Trusts (REITS) - 6.8%
AvalonBay Communities, Inc., 6.10%, 3/15/2020		Baa1		720,000		805,178
Boston Properties LP, 5.875%, 10/15/2019		Baa2		935,000		1,013,959
Camden Property Trust, 5.70%, 5/15/2017		Baa1		780,000		823,113
Digital Realty Trust LP, 5.875%, 2/1/2020		Baa2		500,000		508,677
HCP, Inc., 6.70%, 1/30/2018		Baa3		940,000		1,008,504
Health Care REIT, Inc., 6.20%, 6/1/2016		Baa2		375,000		414,939
Mack-Cali Realty LP, 7.75%, 8/15/2019		Baa2		735,000		855,360
National Retail Properties, Inc., 6.875%, 10/15/2017		Baa2		890,000		958,852
Simon Property Group LP, 10.35%, 4/1/2019		A3		990,000		1,353,527
						7,742,109
Total Financials						28,246,685
Health Care - 2.7%
Biotechnology - 0.5%
Amgen, Inc., 5.85%, 6/1/2017		A3		500,000		570,749
Health Care Equipment & Supplies - 0.7%
Becton Dickinson and Co., 6.00%, 5/15/2039		A2		535,000		604,117
CR Bard, Inc., 4.40%, 1/15/2021		A3		200,000		203,214
						807,331

The accompanying notes are an integral part of the financial statements. 7

Investment Portfolio - December 31, 2010

	Credit Rating1 (unaudited)			Principal Amount		Value (Note 2)
CORPORATE BONDS (continued)
Non-Convertible Corporate Bonds (continued)
Health Care (continued)
Pharmaceuticals - 1.5%
Abbott Laboratories, 5.60%, 11/30/2017		A1		$	675,000	$	771,734
Novartis Securities Investment Ltd. (Bermuda), 5.125%, 2/10/2019		Aa2			870,000		962,250
							1,733,984
Total Health Care							3,112,064
Industrials - 13.1%
Aerospace & Defense - 1.2%
The Boeing Co., 6.00%, 3/15/2019		A2			500,000		575,259
Honeywell International, Inc., 5.30%, 3/1/2018		A2			690,000		767,848
							1,343,107
Air Freight & Logistics - 0.9%
FedEx Corp., 8.00%, 1/15/2019		Baa2			790,000		974,509
Airlines - 2.0%
Continental Airlines Pass-Through Trust, Series 1997-4, Class A, 6.90%, 1/2/2018		Baa2			300,296		319,065
Delta Air Lines Pass-Through Trust, Series 2001-1, Class 1A2, 7.111%, 9/18/2011		BBB	2		295,000		304,587
Delta Air Lines Pass-Through Trust, Series 2007-1, Class A, 6.821%, 8/10/2022		Baa1			166,574		176,569
Delta Air Lines Pass-Through Trust, Series 2010-1, Class A, 6.20%, 7/2/2018		Baa2			500,000		531,250
Southwest Airlines Co., 5.25%, 10/1/2014		Baa3			910,000		957,081
							2,288,552
Commercial Services & Supplies - 0.9%
Waste Management, Inc., 7.375%, 3/11/2019		Baa3			830,000		1,004,384
Industrial Conglomerates - 3.8%
GE Capital Trust I4, 6.375%, 11/15/2067		Aa3			1,145,000		1,130,687
General Electric Capital Corp., 5.625%, 5/1/2018		Aa2			350,000		381,680
General Electric Capital Corp., Series A, 6.75%, 3/15/2032		Aa2			740,000		837,767
General Electric Co., 5.25%, 12/6/2017		Aa2			370,000		399,635
Textron, Inc., 7.25%, 10/1/2019		Baa3			1,245,000		1,426,709
Tyco Electronics Group S.A. (Luxembourg), 4.875%, 1/15/2021		Baa2			200,000		202,244
							4,378,722
Machinery - 1.6%
Caterpillar Financial Services Corp., 7.05%, 10/1/2018		A2			660,000		798,358
John Deere Capital Corp., 5.50%, 4/13/2017		A2			225,000		250,861
John Deere Capital Corp., 5.75%, 9/10/2018		A2			700,000		793,010
							1,842,229

8 The accompanying notes are an integral part of the financial statements.

Investment Portfolio - December 31, 2010

	Credit Rating1 (unaudited)		Principal Amount		Value (Note 2)
CORPORATE BONDS (continued)
Non-Convertible Corporate Bonds (continued)
Industrials (continued)
Road & Rail - 2.7%
CSX Corp., 6.00%, 10/1/2036		Baa3	$	730,000	$	760,309
JB Hunt Transport Services, Inc., 3.375%, 9/15/2015		Baa3		1,595,000		1,575,514
Union Pacific Corp., 5.65%, 5/1/2017		Baa2		705,000		778,463
						3,114,286
Total Industrials						14,945,789
Information Technology - 6.1%
Communications Equipment - 1.0%
Cisco Systems, Inc., 5.90%, 2/15/2039		A1		1,065,000		1,179,493
Computers & Peripherals - 2.6%
Dell, Inc., 5.875%, 6/15/2019		A2		1,055,000		1,154,367
Hewlett-Packard Co., 5.50%, 3/1/2018		A2		680,000		766,174
International Business Machines Corp., 5.60%, 11/30/2039		Aa3		909,000		990,382
						2,910,923
Electronic Equipment, Instruments & Components - 0.4%
Corning, Inc., 4.25%, 8/15/2020		Baa1		500,000		493,768
IT Services - 0.8%
The Western Union Co., 5.253%, 4/1/2020		A3		945,000		970,884
Software - 1.3%
Oracle Corp., 5.00%, 7/8/2019		A2		700,000		759,503
Oracle Corp.3, 3.875%, 7/15/2020		A2		675,000		671,008
						1,430,511
Total Information Technology						6,985,579
Materials - 3.2%
Chemicals - 0.7%
E.I. du Pont de Nemours & Co., 6.00%, 7/15/2018		A2		670,000		770,363
Metals & Mining - 1.4%
Alcoa, Inc., 5.87%, 2/23/2022		Baa3		660,000		655,691
BHP Billiton Finance (USA) Ltd. (Australia), 6.50%, 4/1/2019		A1		810,000		963,207
						1,618,898
Paper & Forest Products - 1.1%
International Paper Co., 7.50%, 8/15/2021		Baa3		1,065,000		1,257,940
Total Materials						3,647,201
Telecommunication Services - 1.2%
Wireless Telecommunication Services - 1.2%
Crown Castle Towers LLC3, 6.113%, 1/15/2020		A2		745,000		777,274
Crown Castle Towers LLC3, 4.883%, 8/15/2020		A2		250,000		240,270

The accompanying notes are an integral part of the financial statements. 9

Investment Portfolio - December 31, 2010

	Credit Rating1 (unaudited)		Principal Amount/ Shares		Value (Note 2)
CORPORATE BONDS (continued)
Non-Convertible Corporate Bonds (continued)
Telecommunication Services (continued)
Wireless Telecommunication Services (continued)
SBA Tower Trust3, 5.101%, 4/15/2017		A2	$	375,000	$	389,869
Total Telecommunication Services						1,407,413
Utilities - 2.4%
Electric Utilities - 2.1%
Exelon Generation Co. LLC, 5.35%, 1/15/2014		A3		580,000		627,891
Exelon Generation Co. LLC, 6.20%, 10/1/2017		A3		350,000		391,711
Exelon Generation Co. LLC, 4.00%, 10/1/2020		A3		500,000		467,919
Southwestern Electric Power Co., 6.45%, 1/15/2019		Baa3		855,000		938,920
						2,426,441
Multi-Utilities - 0.3%
CenterPoint Energy Resources Corp., Series B, 7.875%, 4/1/2013		Baa3		335,000		378,696
Total Utilities						2,805,137
Total Non-Convertible Corporate Bonds (Identified Cost $77,969,198)						83,659,902
TOTAL CORPORATE BONDS (Identified Cost $79,098,051)						84,905,621
PREFERRED STOCKS - 2.1%
Financials - 2.1%
Commercial Banks - 1.2%
PNC Financial Services Group, Inc., Series K6, 8.25%		Baa3		290,000		309,224
Wells Fargo & Co., Series K6, 7.98%		Baa3		1,000,000		1,055,000
						1,364,224
Diversified Financial Services - 0.9%
JPMorgan Chase & Co., Series 16, 7.90%		Baa1		965,000		1,025,785
TOTAL PREFERRED STOCKS (Identified Cost $2,309,476)						2,390,009
ASSET-BACKED SECURITIES - 1.0%
Capital Auto Receivables Asset Trust, Series 2007-1, Class A4A, 5.010%, 4/16/2012		Aaa	$	22,273		22,483
Capital Auto Receivables Asset Trust, Series 2007-3, Class A4, 5.210%, 3/17/2014		Aaa		30,476		31,158
Ford Credit Auto Owner Trust, Series 2008-C, Class A4B4, 2.010%, 4/15/2013		Aaa		50,000		50,716
Hertz Vehicle Financing LLC, Series 2009-2A, Class A23, 5.290%, 3/25/2016		Aaa		370,000		401,877

10 The accompanying notes are an integral part of the financial statements.

Investment Portfolio - December 31, 2010

	Credit Rating 1 (unaudited)			Principal Amount		Value (Note 2)
ASSET-BACKED SECURITIES (continued)
Hertz Vehicle Financing LLC, Series 2010-1A, Class A23, 3.740%, 2/25/2017		Aaa		$	595,000	$	604,517
TOTAL ASSET-BACKED SECURITIES (Identified Cost $1,061,591)							1,110,751
COMMERCIAL MORTGAGE-BACKED SECURITIES - 3.7%
American Tower Trust, Series 2007-1A, Class AFX3, 5.420%, 4/15/2037		Aaa			400,000		432,503
Americold LLC Trust, Series 2010-ARTA, Class A13, 3.847%, 1/14/2029		AAA	2		100,000		100,179
Banc of America Commercial Mortgage, Inc., Series 2006-2, Class A44, 5.740%, 5/10/2045		AAA	2		200,000		218,952
Banc of America Commercial Mortgage, Inc., Series 2006-4, Class A4, 5.634%, 7/10/2046		Aaa			100,000		107,295
Bear Stearns Commercial Mortgage Securities, Series 2005-PWR9, Class A4A, 4.871%, 9/11/2042		Aaa			100,000		105,345
Bear Stearns Commercial Mortgage Securities, Series 2006-PW12, Class A44, 5.722%, 9/11/2038		Aaa			150,000		163,660
Citigroup Commercial Mortgage Trust, Series 2006-C4, Class A34, 5.728%, 3/15/2049		Aaa			110,000		119,055
Commercial Mortgage Pass-Through Certificates, Series 2006-C7, Class A44, 5.764%, 6/10/2046		AAA	2		155,000		169,473
Commercial Mortgage Pass-Through Certificates, Series 2010-C1, Class A13, 3.156%, 7/20/2046		Aaa			264,528		265,124
Greenwich Capital Commercial Funding Corp., Series 2006-GG7, Class A44, 5.883%, 7/10/2038		Aaa			415,000		452,764
JP Morgan Chase Commercial Mortgage Securities Corp., Series 2005-LDP5, Class A44, 5.205%, 12/15/2044		Aaa			325,000		349,883
JP Morgan Chase Commercial Mortgage Securities Corp., Series 2006-LDP7, Class A44, 5.872%, 4/15/2045		Aaa			100,000		109,361
JP Morgan Chase Commercial Mortgage Securities Corp., Series 2010-C2, Class A33, 4.070%, 11/15/2043		AAA	2		200,000		190,183
LB-UBS Commercial Mortgage Trust, Series 2006-C4, Class A44, 5.881%, 6/15/2038		Aaa			150,000		162,318
Merrill Lynch - Countrywide Commercial Mortgage Trust, Series 2006-3, Class A44, 5.414%, 7/12/2046		Aaa			125,000		131,759
Morgan Stanley Capital I, Series 2005-HQ7, Class A44, 5.204%, 11/14/2042		Aaa			100,000		107,652
OBP Depositor LLC Trust, Series 2010-OBP, Class A3, 4.646%, 7/15/2045		AAA	2		100,000		102,036
Vornado DP LLC, Series 2010-VNO, Class A2FX3, 4.004%, 9/13/2028		AAA	2		245,000		237,541

The accompanying notes are an integral part of the financial statements. 11

Investment Portfolio - December 31, 2010

	Credit Rating 1 (unaudited)		Principal Amount/ Shares		Value (Note 2)
COMMERCIAL MORTGAGE-BACKED SECURITIES (continued)
Wachovia Bank Commercial Mortgage Trust, Series 2005-C21, Class A44, 5.203%, 10/15/2044		Aaa	$	150,000	$	162,118
Wachovia Bank Commercial Mortgage Trust, Series 2006-C25, Class A44, 5.737%, 5/15/2043		Aaa		115,000		123,345
Wachovia Bank Commercial Mortgage Trust, Series 2006-C26, Class A34, 6.011%, 6/15/2045		Aaa		150,000		162,790
Wells Fargo Commercial Mortgage Trust, Series 2010-C1, Class A23, 4.393%, 11/18/2043		Aaa		275,000		271,905
TOTAL COMMERCIAL MORTGAGE-BACKED SECURITIES (Identified Cost $4,219,389)						4,245,241
MUNICIPAL BONDS - 0.9%
Monroe County Water Authority, Revenue Bond, 6.339%, 8/1/2035		Aa2		500,000		509,950
New York City, G.O. Bond, 6.646%, 12/1/2031		Aa2		500,000		511,840
TOTAL MUNICIPAL BONDS (Identified Cost $1,000,000)						1,021,790
MUTUAL FUNDS - 4.4%
iShares iBoxx Investment Grade Corporate Bond Fund (Identified Cost $4,523,436)				46,150		5,004,506
U.S. GOVERNMENT AGENCIES - 9.8%
Mortgage-Backed Securities - 9.8%
Fannie Mae, Pool #888468, 5.50%, 9/1/2021			$	2,054,275		2,215,086
Fannie Mae, Pool #995233, 5.50%, 10/1/2021				136,132		146,959
Fannie Mae, Pool #888017, 6.00%, 11/1/2021				156,364		170,608
Fannie Mae, Pool #995329, 5.50%, 12/1/2021				1,210,769		1,305,549
Fannie Mae, Pool #888136, 6.00%, 12/1/2021				205,685		224,422
Fannie Mae, Pool #888810, 5.50%, 11/1/2022				2,169,029		2,338,823
Fannie Mae, Pool #AD0462, 5.50%, 10/1/2024				129,863		139,718
Fannie Mae, Pool #889409, 6.00%, 5/1/2038				2,922,364		3,179,102
Freddie Mac, Pool #G11850, 5.50%, 7/1/2020				666,781		719,186
Freddie Mac, Pool #G12610, 6.00%, 3/1/2022				209,422		228,695
Freddie Mac, Pool #G12655, 6.00%, 5/1/2022				143,019		156,181
Freddie Mac, Pool #G12988, 6.00%, 1/1/2023				117,388		127,971
Freddie Mac, Pool #G13078, 6.00%, 3/1/2023				205,681		224,610
TOTAL U.S. GOVERNMENT AGENCIES (Identified Cost $11,198,202)						11,176,910

12 The accompanying notes are an integral part of the financial statements.

Investment Portfolio - December 31, 2010

	Shares		Value (Note 2)
SHORT-TERM INVESTMENTS - 2.6%
Dreyfus Cash Management, Inc. - Institutional Shares5, 0.14%, (Identified Cost $2,990,144)		2,990,144	$	2,990,144
TOTAL INVESTMENTS - 98.9% (Identified Cost $106,400,289)				112,844,972
OTHER ASSETS, LESS LIABILITIES - 1.1%				1,213,042
NET ASSETS - 100%			$	114,058,014

G.O. Bond - General Obligation Bond

¹Credit ratings from Moody’s (unaudited).

²Credit ratings from S&P (unaudited).

³Restricted securities - Investment in securities that are restricted as to public resale under the Securities Act of 1933, as amended. These securities have been sold under rule 144A and have been determined to be liquid under guidelines established by the Board of Directors. These securities amount to $5,186,243, or 4.5% of the Series’ net assets as of December 31, 2010.

⁴The coupon rate is floating and is the stated rate as of December 31, 2010.

⁵Rate shown is the current yield as of December 31, 2010.

⁶The rate shown is the fixed rate as of December 31, 2010; the rate becomes floating in 2049.

The accompanying notes are an integral part of the financial statements. 13

Statement of Assets and Liabilities

December 31, 2010

ASSETS:
Investments, at value (identified cost $106,400,289) (Note 2)	$	112,844,972
Interest receivable		1,305,102
Dividends receivable		20,202
TOTAL ASSETS		114,170,276
LIABILITIES:
Accrued management fees (Note 3)		56,977
Accrued fund accounting and administration fees (Note 3)		7,124
Accrued transfer agent fees (Note 3)		428
Accrued Chief Compliance Officer service fees (Note 3)		243
Audit fees payable		30,977
Registration fees payable		6,988
Printing fees payable		5,813
Other payables and accrued expenses		3,712
TOTAL LIABILITIES		112,262
TOTAL NET ASSETS	$	114,058,014
NET ASSETS CONSIST OF:
Capital stock	$	104,226
Additional paid-in-capital		107,668,697
Undistributed net investment income		211,367
Accumulated net realized loss on investments		(370,959	)
Net unrealized appreciation on investments		6,444,683
TOTAL NET ASSETS	$	114,058,014
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER SHARE - Class A ($114,058,014/10,422,646 shares)	$	10.94

14 The accompanying notes are an integral part of the financial statements.

Statement of Operations

For the Year Ended December 31, 2010

INVESTMENT INCOME:
Interest	$	4,290,125
Dividends		309,634
Total Investment Income		4,599,759
EXPENSES:
Management fees (Note 3)		568,425
Fund accounting and administration fees (Note 3)		54,794
Directors’ fees (Note 3)		8,306
Chief Compliance Officer service fees (Note 3)		2,621
Transfer agent fees (Note 3)		2,554
Custodian fees		6,455
Miscellaneous		74,094
Total Expenses		717,249
Less reduction of expenses (Note 3)		(758	)
Net Expenses		716,491
NET INVESTMENT INCOME		3,883,268
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments		499,316
Net change in unrealized appreciation on investments		3,349,635
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS		3,848,951
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	7,732,219

The accompanying notes are an integral part of the financial statements. 15

Statement of Changes in Net Assets

	For the Year Ended 12/31/10			For the Year Ended 12/31/09
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income	$	3,883,268		$	2,981,016
Net realized gain on investments		499,316			196,512
Net change in unrealized appreciation on investments		3,349,635			3,411,672
Net increase from operations		7,732,219			6,589,200
DISTRIBUTIONS TO SHAREHOLDERS (Note 8):
From net investment income		(3,683,326	)		(2,992,322	)
CAPITAL STOCK ISSUED AND REPURCHASED:
Net increase from capital share transactions (Note 5)		33,408,300			19,933,271
Net increase in net assets		37,457,193			23,530,149
NET ASSETS:
Beginning of year		76,600,821			53,070,672
End of year (including undistributed net investment income of $211,367 and $1,751, respectively)	$	114,058,014		$	76,600,821

16 The accompanying notes are an integral part of the financial statements.

Financial Highlights

			For the Years Ended
	12/31/10		12/31/09		12/31/08		12/31/07		12/31/06
Per share data (for a share outstanding throughout each year):
Net asset value - Beginning of year		$10.38		$9.69		$10.05		$9.98		$9.89
Income (loss) from investment operations:
Net investment income		0.451		0.491		0.45		0.42		0.36
Net realized and unrealized gain (loss) on investments		0.48		0.62		(0.30)		0.13		0.09
Total from investment operations		0.93		1.11		0.15		0.55		0.45
Less distributions to shareholders:
From net investment income		(0.37)		(0.42)		(0.46)		(0.42)		(0.36)
From net realized gain on investments		—		—		(0.05)		(0.06)		—
Total distributions to shareholders		(0.37)		(0.42)		(0.51)		(0.48)		(0.36)
Net asset value - End of year		$10.94		$10.38		$9.69		$10.05		$9.98
Net assets - End of year (000’s omitted)		$114,058		$76,601		$53,071		$49,909		$45,696
Total return2		8.97%		11.46%		1.66%		5.58%		4.51%
Ratios (to average net assets)/ Supplemental Data:
Expenses*		0.76%		0.79%		0.80%		0.80%		0.80%
Net investment income		4.10%		4.84%		4.73%		4.21%		3.87%
Portfolio turnover		23%		67%		53%		346%		313%
*The investment advisor did not impose all or a portion of its management fees, CCO fees, fund accounting and transfer agent fees, and other fees in some years and in some years paid a portion of the Series’ expenses. If these expenses had been incurred by the Series, the expense ratio (to average net assets) would have been increased by the following amounts:
		0.00%3		0.00%3		0.03%		0.04%		0.08%

¹Calculated based on average shares outstanding during the year.

²Represents aggregate total return for the year indicated, and assumes reinvestment of all distributions. Total return would have been lower had certain expenses not been waived or reimbursed during the years.

³Less than 0.01%.

The accompanying notes are an integral part of the financial statements. 17

Notes to Financial Statements

1. ORGANIZATION

Core Bond Series (the “Series”) is a no-load diversified series of Manning & Napier Fund, Inc. (the “Fund”). The Fund is organized in Maryland and is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company.

The Series’ investment objective is to provide long-term total return by investing primarily in investment-grade bonds and other financial instruments, including derivatives, with economic characteristics similar to bonds.

The Fund’s Advisor is Manning & Napier Advisors, Inc. (the “Advisor”). Shares of the Series are offered to investors, clients and employees of the Advisor and its affiliates. The total authorized capital stock of the Fund consists of 10.0 billion shares of common stock each having a par value of $0.01. As of December 31, 2010, 6.2 billion shares have been designated in total among 29 series, of which 125 million have been designated as Core Bond Series Class A common stock.

2. SIGNIFICANT ACCOUNTING POLICIES

Security Valuation

Portfolio securities, including domestic equities, foreign equities, warrants and options, listed on an exchange other than the NASDAQ National Market System are valued at the latest quoted sales price of the exchange on which the security is primarily traded. Securities not traded on valuation date or securities not listed on an exchange are valued at the latest quoted bid price provided by the Fund’s pricing service. Securities listed on the NASDAQ National Market System are valued in accordance with the NASDAQ Official Closing Price.

Debt securities, including government bonds, foreign bonds, asset-backed securities, structured notes, supranational obligations, sovereign bonds, corporate bonds and mortgage-backed securities will normally be valued on the basis of evaluated bid prices provided directly by an independent pricing service. The pricing services use multiple valuation techniques to determine fair value. In instances where sufficient market activity exists, the pricing services may utilize a market-based approach through which quotes from market makers are used to determine fair value. In instances where sufficient market activity may not exist or is limited, the pricing services also utilize proprietary valuation models which may consider market characteristics such as benchmark yield curves, option-adjusted spreads, credit spreads, estimated default rates, coupon rates, anticipated timing of principal repayments, underlying collateral, and other unique security features in order to estimate the relevant cash flows, which are then discounted to calculate the fair value. Certain investments in securities held by the Series may be valued on a basis of a price provided directly by a principal market maker. These prices may differ from the value that would have been used had a broader market for securities existed.

Municipal securities will normally be valued on the basis of market valuations provided by an independent pricing service that utilizes the latest price quotations and a matrix system (which considers such factors as security prices of similar securities, yields, maturities and ratings).

Short-term investments that mature in sixty days or less are valued at amortized cost, which approximates market value. Investments in open-end investment companies are valued at their net asset value per share on valuation date.

Volume and level of activity in established markets for an asset or liability are evaluated to determine whether recent transactions and quoted prices are determinative of fair value. Where there have been significant decreases in volume and level of activity, further analysis and adjustment may be necessary to estimate fair value. The Series measures fair value in these instances by the use of inputs and valuation techniques which may be based upon current market prices of securities that are comparable in coupon, rating, maturity and industry and/or expectation of future cash flows. As a result of trading in relatively thin markets and/or markets that experience significant volatility,

18

Notes to Financial Statements

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

Security Valuation (continued)

the prices used by the Series to value these securities may differ from the value that would be realized if these securities were sold, and the differences could be material.

Securities for which representative valuations or prices are not available from the Fund’s pricing service may be valued at fair value. Due to the inherent uncertainty of valuations of such securities, the fair value may differ significantly from the values that would have been used had a ready market for such securities existed. If trading or events occurring after the close of the principal market in which securities are traded are expected to materially affect the value of those securities, then they may be valued at their fair value, taking this trading or these events into account. Fair value is determined in good faith by the Advisor under procedures approved by and under the general supervision and responsibility of the Fund’s Board of Directors (the “Board”).

Various inputs are used in determining the value of the Series’ assets or liabilities carried at market value. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical assets and liabilities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.). Level 3 includes significant unobservable inputs (including the Series’ own assumptions in determining the fair value of investments). The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

The following is a summary of the valuation levels used for major security types as of December 31, 2010 in valuing the Series’ assets or liabilities carried at market value:

Description	Total		Level 1		Level 2		Level 3
Assets:
Equity securities*	$	—	$	—	$	—	$	—
Preferred securities		2,390,009		—		2,390,009		—
Debt securities:
U.S. Treasury and other U.S. Government agencies		11,176,910		—		11,176,910		—
States and political subdivisions (municipals)		1,021,790		—		1,021,790		—
Corporate debt		83,659,902		—		83,659,902		—
Convertible corporate debt		1,245,719		—		1,245,719		—
Asset backed securities		1,110,751		—		1,110,751		—
Commercial mortgage backed securities		4,245,241		—		4,245,241		—
Mutual funds		7,994,650		7,994,650		—		—
Other financial instruments**:		—		—		—		—
Total assets:		112,844,972		7,994,650		104,850,322		—
Liabilities:
Other financial instruments**:		—		—		—		—
Total liabilities:		—		—		—		—
Total	$	112,844,972	$	7,994,650	$	104,850,322	$	—

*Includes common stock, warrants and rights. Please see the Investment Portfolio for industry classification.

19

Notes to Financial Statements

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

Security Valuation (continued)

**Other financial instruments are derivative instruments not reflected in the Investment Portfolio, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument. As of December 31, 2010, the Series did not hold any derivative instruments.

There were no Level 3 securities held by the Series as of December 31, 2009 or December 31, 2010.

The Fund’s policy is to recognize transfers in and transfers out of the valuation levels as of the beginning of the reporting period. There were no significant transfers between Level 1 and Level 2 during the year ended December 31, 2010.

Additional disclosure surrounding the activity in Level 3 fair value measurement will be effective for fiscal years beginning after December 15, 2010. Management has concluded that this will not have a material impact on the Series’ financial statements.

Security Transactions, Investment Income and Expenses

Security transactions are accounted for on trade date. Dividend income is recorded on the ex-dividend date, except that if the ex-dividend date has passed, certain dividends from foreign securities are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends, if any, are recorded at the fair market value of the securities received. Interest income, including amortization of premium and accretion of discounts using the effective interest method, is earned from settlement date and accrued daily.

Expenses are recorded on an accrual basis. Most expenses of the Fund can be attributed to a specific series. Expenses which cannot be directly attributed are apportioned among the series in the Fund in such a manner as deemed equitable by the Fund’s Board, taking into consideration, among other things, the nature and type of expense.

The Series uses the identified cost method for determining realized gain or loss on investments for both financial statement and federal income tax reporting purposes.

Foreign Currency Translation

The books and records of the Series are maintained in U.S. dollars. Foreign currencies, investments and other assets and liabilities are translated into U.S. dollars at the current exchange rates. Purchases and sales of investment securities and income and expenses are translated on the respective dates of such transactions. The Series does not isolate realized and unrealized gains and losses attributable to changes in the exchange rates from gains and losses that arise from changes in the market value of investments. Such fluctuations are included with net realized and unrealized gain or loss on investments. Net realized foreign currency gains and losses represent foreign currency gains and losses between trade date and settlement date on securities transactions, gains and losses on disposition of foreign currencies and the difference between the amount of income and foreign withholding taxes recorded on the books of the Series and the amounts actually received or paid.

Securities Purchased on a When-Issued Basis or Forward Commitment

The Series may purchase securities on a when-issued basis or forward commitment. These transactions involve a commitment by the Series to purchase securities for a predetermined price with payment and delivery taking place beyond the customary settlement period. When such purchases are outstanding, the Series will designate liquid assets in an amount sufficient to meet the purchase price. When purchasing a security on a delayed delivery basis, the Series assumes the rights and risks of ownership of the security, including the risk of price and yield fluctuations, and takes such fluctuations into account when determining its net asset value. The Series may sell the when-issued securities before they are delivered, which may result in a capital gain or loss. No such investments were held by the Series as of December 31, 2010.

20

Notes to Financial Statements

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

Securities Purchased on a When-Issued Basis or Forward Commitment (continued)

In connection with its ability to purchase or sell securities on a forward commitment basis, the Series may enter into forward roll transactions principally using To Be Announced (TBA) securities. Forward roll transactions require the sale of securities for delivery in the current month, and a simultaneous agreement to repurchase substantially similar (same type, coupon and maturity) securities on a specified future date. Risks of entering into forward roll transactions include the potential inability of the counterparty to meet the terms of the agreement; the potential of the Series to receive inferior securities at redelivery as compared to the securities sold to the counterparty; counterparty credit risk; and the potential pay down speed variance between the mortgage-backed pools. During the roll period, the Series forgoes principal and interest paid on the securities. The Series accounts for such dollar rolls as purchases and sales. Information regarding securities purchased on a when-issued basis is included in the Series’ Investment Portfolio. No such investments were held by the Series as of December 31, 2010.

Restricted Securities

Restricted securities are purchased in private placement transactions, are not registered under the Securities Act of 1933, as amended, and may have contractual restrictions on resale. Information regarding restricted securities is included at the end of the Series’ Investment Portfolio.

Illiquid Securities

A security may be considered illiquid if so deemed in good faith by the Advisor under procedures approved by and under the general supervision and responsibility of the Fund’s Board. Securities that are illiquid are marked with the applicable footnote on the Investment Portfolio. No such investments were held by the Series on December 31, 2010.

Federal Taxes

The Series’ policy is to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies. The Series is not subject to federal income tax or excise tax to the extent that the Series distributes to shareholders each year its taxable income, including any net realized gains on investments, in accordance with requirements of the Internal Revenue Code. Accordingly, no provision for federal income tax or excise tax has been made in the financial statements.

Management evaluates its tax positions to determine if the tax positions taken meet the minimum recognition threshold in connection with accounting for uncertainties in income tax positions taken or expected to be taken for the purposes of measuring and recognizing tax liabilities in the financial statements. Recognition of tax benefits of an uncertain tax position is required only when the position is “more likely than not” to be sustained assuming examination by taxing authorities. At December 31, 2010, the Series has recorded no liability for net unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken in future tax returns.

The Series files income tax returns in the U.S. federal jurisdiction, various states and foreign jurisdictions, as required. No income tax returns are currently under investigation. The statute of limitations on the Series’ tax returns remains open for the years ended December 31, 2007 through December 31, 2010. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.

Additionally, based on the Fund’s understanding of the tax rules and rates related to income, gains and transactions for foreign jurisdictions in which it invests, the Series will provide for foreign taxes, and where appropriate, deferred foreign tax.

21

Notes to Financial Statements

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

Distributions of Income and Gains

Distributions to shareholders of net investment income and net realized gains are made annually. An additional distribution may be necessary to avoid taxation of the Series. Distributions are recorded on the ex-dividend date.

Indemnifications

The Fund’s organizational documents provide former and current directors and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund’s maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.

Other

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.

3. TRANSACTIONS WITH AFFILIATES

The Fund has an Investment Advisory Agreement (the “Agreement”) with the Advisor, for which the Series pays a fee, computed daily and payable monthly, at an annual rate of 0.60% of the Series’ average daily net assets.

Under the Agreement, personnel of the Advisor provide the Series with advice and assistance in the choice of investments and the execution of securities transactions, and otherwise maintain the Series’ organization. The Advisor also provides the Fund with necessary office space and fund administration and support services. The salaries of all officers of the Fund (except a percentage of the Fund’s Chief Compliance Officer’s salary, which is paid by the Fund), and of all Directors who are “affiliated persons” of the Fund, or of the Advisor, and all personnel of the Fund, or of the Advisor, performing services relating to research, statistical and investment activities, are paid by the Advisor. Each “non-affiliated” Director receives an annual stipend, which is allocated among all the active series of the Fund. In addition, these Directors also receive a fee per Board meeting attended plus a fee for each committee meeting attended.

The Advisor has contractually agreed, until at least April 30, 2012, to waive its fee and, if necessary, pay other operating expenses of the Series in order to maintain total direct annual fund operating expenses for the Series at no more than 0.80% of average daily net assets each year. For the year ended December 31, 2010, the Advisor voluntarily waived fees of $758, which is included as a reduction of expenses on the Statement of Operations. The Advisor is not eligible to recoup any expenses that have been waived or reimbursed in prior years.

Manning & Napier Investor Services, Inc., a registered broker-dealer affiliate of the Advisor, acts as distributor for the Fund’s shares. The services of Manning & Napier Investor Services, Inc. are provided at no additional cost to the Series.

The Advisor has agreements with PNC Global Investment Servicing (U.S.) Inc. (“PNCGIS”) under which PNCGIS serves as sub-accountant services agent and sub- transfer agent. The Fund pays the Advisor an annual fee related to fund accounting and administration of 0.0175% on the first $3 billion of average daily net assets (excluding Target Series); 0.015% on the next $3 billion of average daily net assets (excluding Target Series); and 0.01% of the average daily net assets in excess of $6 billion (excluding Target Series); plus a base fee of $25,500 per Series.

22

Notes to Financial Statements

3. TRANSACTIONS WITH AFFILIATES (continued)

Transfer Agent fees are charged to the Fund on a per account basis. Additionally, certain transaction- and cusip-based fees and out-of-pocket expenses, including charges for reporting relating to the Fund’s compliance program, are charged.

Effective July 1, 2010, PNCGIS was sold to The Bank of New York Mellon Corporation, the Series’ custodian. At the close of the sale, PNCGIS changed its name to BNY Mellon Investment Servicing (U.S.) Inc. (“BNY”).

Expenses not directly attributable to a Series are allocated based on each Series’ relative net assets or number of accounts, depending on the expense.

4. PURCHASES AND SALES OF SECURITIES

For the year ended December 31, 2010, purchases and sales of securities, other than U.S. Government securities and short-term securities, were $41,886,293 and $9,417,688, respectively. Purchases and sales of U.S. Government securities, other than short-term securities, were $12,562,768 and $11,446,569, respectively.

5. CAPITAL STOCK TRANSACTIONS

Transactions in shares of Core Bond Series were:

	For the Year Ended 12/31/10						For the Year Ended 12/31/09
	Shares			Amount			Shares			Amount
Sold		3,256,147		$	35,669,098			2,334,851		$	24,190,684
Reinvested		338,001			3,639,306			282,320			2,942,598
Repurchased		(553,027	)		(5,900,104	)		(711,761	)		(7,200,011	)
Total		3,041,121			33,408,300			1,905,410			19,933,271

Substantially all of the Series’ shares represent investments by fiduciary accounts over which the Advisor has sole investment discretion.

6. FINANCIAL INSTRUMENTS

The Series may trade in instruments including written and purchased options, forward foreign currency exchange contracts and futures contracts and other derivatives in the normal course of investing activities to assist in managing exposure to various market risks. Investments in these instruments may subject the Series to various elements of risk, which may involve, to a varying degree, elements of risk in excess of the amounts recognized for financial statement purposes. These risks include: the risk that changes in the value of a derivative may not correlate perfectly with the underlying asset, rate or index, counterparty credit risk related to over the counter derivatives counterparties’ failure to perform under contract terms, liquidity risk related to the lack of a liquid market for these contracts allowing the fund to close out its position(s) and documentation risk relating to disagreement over contract terms. No such investments were held by the Series during the year ended December 31, 2010.

7. FOREIGN SECURITIES

Investing in securities of foreign companies and foreign governments involves special risks and considerations not typically associated with investing in securities of domestic companies and the U.S. Government. These risks include revaluation of currencies and future adverse political and economic developments. Moreover, securities of foreign companies and foreign governments and their markets may be less liquid and their prices more volatile than those of comparable domestic companies and the U.S. Government.

23

Notes to Financial Statements

8. FEDERAL INCOME TAX INFORMATION

The amount and characterization of certain income and capital gains to be distributed are determined in accordance with federal income tax regulations, which may differ from accounting principles generally accepted in the United States of America. These differences are primarily due to differing book and tax treatments in the timing of the recognition of net investment income or gains and losses, including investments in hybrid securities. The Series may periodically make reclassifications among its capital accounts to reflect income and gains available for distribution (or available capital loss carryovers) under income tax regulations without impacting the Series’ net asset value. Any such reclassifications are not reflected in the financial highlights.

The tax character of distributions paid were as follows:

	For the Year Ended 12/31/10		For the Year Ended 12/31/09
Ordinary income	$	3,683,326	$	2,992,322

At December 31, 2010, the tax basis of distributable earnings and the net unrealized appreciation based on identified cost for federal income tax purposes were as follows:

Cost for federal income tax purposes	$	106,472,401
Unrealized appreciation	$	6,690,312
Unrealized depreciation		(317,741	)
Net unrealized appreciation	$	6,372,571
Undistributed ordinary income		234,229
Capital loss carryover		370,960

At December 31, 2010, the capital loss carryover, disclosed above, available to the extent allowed by tax law to offset future net capital gain, if any, will expire as follows:

Loss Carryover		Expiration Date
	$350,661	December 31, 2016
	20,299	December 31, 2017

The capital loss carryover utilized in the current year was $489,642.

24

Report of Independent Registered Public Accounting Firm

To the Board of Directors of Manning & Napier Fund, Inc. and Shareholders of Core Bond Series:

In our opinion, the accompanying statement of assets and liabilities, including the investment portfolio, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the Core Bond Series (a series of Manning & Napier Fund, Inc., hereafter referred to as the “Series”) at December 31, 2010, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Series’ management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2010 by correspondence with the custodian, provide a reasonable basis for our opinion.

New York, New York

February 22, 2011

25

Supplemental Tax Information (unaudited)

All designations are based on financial information available as of the date of this annual report and, accordingly are subject to change.

For federal income tax purposes, the Series designates for the current fiscal year $94,940 or, if different, the maximum amount allowable under the tax law as qualified dividend income.

For corporate shareholders, the percentage of investment income (dividend income plus short-term gain, if any) that qualifies for the dividends received deduction for the current fiscal year is 2.58%, or if different, the maximum allowable under tax law.

26

Renewal of Investment Advisory Agreement (unaudited)

At the Manning & Napier Fund, Inc. (the “Fund”) Board of Directors’ (the “Board”) meeting, held on November 17, 2010, the Investment Advisory Agreement (the “Agreement”) between the Fund and Manning & Napier Advisors, Inc. (the “Advisor”) was reviewed by the Board for renewal. In connection with the decision whether to renew the Agreement, a variety of material was prepared for and reviewed by the Board.

Representatives of the Advisor attended the meeting and presented additional oral and written information to the Board to assist the Board in its considerations. The discussion immediately below outlines the materials and information presented to the Board in connection with the Board’s 2010 Annual Review of the Agreement and the conclusions made by the Directors when determining to continue the Agreement.

• The Board considered the services provided by the Advisor under the Agreement including, among others: deciding what securities to purchase and sell for each Series; arranging for the purchase and sale of such securities by placing orders with broker-dealers; administering the affairs of the Fund (including the books and records of the Fund not maintained by third party service providers such as the custodian or sub-transfer agent); arranging for the insurance coverage for the Fund; and supervising the preparation of tax returns, SEC filings (including registration statements) and reports to shareholders for the Fund. The Board also considered the nature and quality of such services provided under the Agreement in light of the Advisor’s services provided to the Fund for 24 years. The Board discussed the quality of these services with representatives from the Advisor and concluded that the Advisor was performing its services to the Fund required under the Agreement in a reasonable manner.

• The Board considered the investment performance of the various Series of the Fund. The investment performance for each Series was reviewed on a cumulative basis since inception and on a one year basis. In addition, annualized performance for the following time periods was considered: inception, three year, five year, ten year, and current market cycle. A market cycle includes periods of both rising and falling markets. Returns for established benchmark indices for each Series were provided for each time period. The Board noted that the various Series were competitive against their respective benchmarks and/or peer groups over various time periods, but in particular over the full market cycle period relevant for the Series. In addition, the Board considered at the meeting (and considers on a quarterly basis) a peer group performance analysis consisting of Morningstar universes of mutual funds with similar investment objectives. The Board discussed the performance with representatives from the Advisor and concluded that the investment performance of each of the Fund’s Series was reasonable based on the Fund’s actual performance and comparative performance, especially performance over the current market cycle.

• The Board considered the costs of the Advisor’s services and the profits of the Advisor as they relate to the Advisor’s services to the Fund under the Agreement. In reviewing the Advisor’s costs and profits, the Board discussed the Advisor’s revenues generated from the Fund (on both an actual and adjusted basis) and its expenses associated with providing the services under the Agreement. In addition, the Board reviewed the Advisor’s expenses associated with Fund activities outside of the Agreement (such as expense reimbursements pursuant to expense caps and payments made by the Advisor to third party platforms on which shares of the Fund are available for purchase). It was noted by representatives of the Advisor that 11 of the 27 active Series of the Fund are currently experiencing expenses above the capped expense ratios. After discussing the above costs and profits, the Board concluded that the Advisor’s profitability relating to its services provided under the Agreement was reasonable.

• The Board considered the fees and expenses of the various Series of the Fund. The Advisor presented the advisory fees and total expenses for each Series, including the advisory fee adjusted for any expense waivers or reimbursements (either contractual or voluntary) paid by the Advisor. The advisory fees and expense ratios of each Series were compared to an average (on both a mean and median basis) of similar funds as disclosed on the Morningstar database. Representatives of the Advisor discussed with the Board the levels of its advisory

27

Renewal of Investment Advisory Agreement (unaudited)

fee for each Series of the Fund and as compared to the median and mean advisory fees for similar funds as listed on Morningstar. Expense ratios for every Series, except the Pro-Blend’s Class R and Class C, and Target Class R and Class C, are currently below the median and mean for similar funds as listed on Morningstar. Based on their review of the information provided, the Board concluded that the fees and expenses of each Series of the Fund were reasonable on a comparative basis.

• The Board also considered the other benefits the Advisor derives from its relationship with the Fund. Such other benefits include certain research products provided by soft dollars. Given the level of soft dollar transactions involving the Fund, the Board concluded that these additional benefits to the Advisor were reasonable.

• In addition to the factors described above, the Board considered the Advisor’s personnel, investment strategies, policies and procedures relating to compliance with personal securities transactions, and reputation, expertise and resources in domestic and foreign financial markets. The Board concluded that these factors support the conclusion that the Advisor performs its services in a reasonable manner.

• The Board did not consider economies of scale at this time because of the multiple uses of the Fund (for the Advisor’s discretionary investment account clients in addition to direct investors), the current profitability of the Advisor’s services to the Fund under the Agreement, and the overall size of the Fund complex.

Based on the Board’s deliberations and their evaluation of the information described above, the Board, including a majority of Directors that are not “interested persons” as defined in the Investment Company Act of 1940, concluded that the compensation under the Agreement was fair and reasonable in light of the services and expenses and such other matters as the Directors considered to be relevant in the exercise of their reasonable judgment. Accordingly, the Board approved the renewal of the Agreement. In the course of their deliberations, the Directors did not identify any particular information that was all important or controlling.

28

Directors’ and Officers’ Information (unaudited)

The Statement of Additional Information provides additional information about the Fund’s directors and officers and can be obtained without charge by calling 1-800-466-3863, at www.manningnapieradvisors.com, or on the EDGAR Database on the SEC Internet web site (http:// www.sec.gov). The following chart shows certain information about the Fund’s officers and directors, including their principal occupations during the last five years. Unless specific dates are provided, the individuals have held the listed positions for longer than five years.

INTERESTED DIRECTOR/OFFICER

Name:	B. Reuben Auspitz*
Address:	290 Woodcliff Drive Fairport, NY 14450
Age:	63
Current Position(s) Held with Fund:	Principal Executive Officer, President, Chairman & Director
Term of Office1 & Length of Time Served:	Indefinite - Director since 1984; Vice President 1984 - 2003; President since 2004; Principal Executive Officer since 2002
Principal Occupation(s) During Past 5 Years:	Executive Vice President; Executive Group Member**; Chief Compliance Officer since 2004; Vice Chairman since June 2010; Co-Executive Director from 2003-2010 - Manning & Napier Advisors, Inc. President; Director - Manning & Napier Investor Services, Inc. Holds or has held one or more of the following titles for various subsidiaries and affiliates: President, Vice President, Director, Chairman, Treasurer, Chief Compliance Officer or Member.
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
INDEPENDENT DIRECTORS
Name:	Paul A. Brooke
Address:	290 Woodcliff Drive Fairport, NY 14450
Age:	65
Current Position(s) Held with Fund:	Director, Audit Committee Member, Governance & Nominating Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 2007
Principal Occupation(s) During Past 5 Years:	Chairman & CEO, Alsius Corp. (investments); Managing Member, PMSV Holdings LLC (investments)
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	Incyte Corp. (2000-present) ViroPharma, Inc. (2000-present) HLTH Corp. (2000-present) Cheyne Capital International (2000-present) MPM Bio-equities (2000-present) GMP Companies (2000-present) HoustonPharma (2000-present)
Name:	Richard M. Hurwitz
Address:	290 Woodcliff Drive Fairport, NY 14450
Age:	47
Current Position(s) Held with Fund:	Director, Audit Committee Member, Governance & Nominating Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 2009
Principal Occupation(s) During Past 5 Years:	Chief Executive Officer, Pictometry International Corp. since August 2010 (provider of georeferenced, aerial image libraries and related software) Managing Partner (2006-July 2010) - Aegis Investment Partners, LLC (investments); Founder and Managing Partner (2004-2005) - Village Markets, LLC (groceries)
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	Pictometry International Corp. (2000-2010) Pioneering Technologies (2006-2009) Vensearch Capital Corp. (2003-2007)

29

Directors’ and Officers’ Information (unaudited)

INDEPENDENT DIRECTORS (continued)

Name:	Stephen B. Ashley
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	70
Current Position(s) Held with Fund:	Director, Audit Committee Member, Governance & Nominating Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 1996
Principal Occupation(s) During Past 5 Years:	Chairman, Director, President & Chief Executive Officer, The Ashley Group (property management and investment). Chairman (non-executive) 2004-2008; Director 1995-2008 - Fannie Mae (mortgage)
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	The Ashley Group (1995-2008)
	Genesee Corporation (1987-2007)
Name:	Peter L. Faber
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	72
Current Position(s) Held with Fund:	Director, Governance & Nominating Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 1987
Principal Occupation(s) During Past 5 Years:	Senior Counsel since 2006, Partner (1995 - 2006) - McDermott, Will & Emery LLP (law firm)
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	Partnership for New York City, Inc. (non-profit)
	New York Collegium (non-profit)
	Boston Early Music Festival (non-profit)
Name:	Harris H. Rusitzky
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	76
Current Position(s) Held with Fund:	Director, Audit Committee Member, Governance & Nominating Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 1985
Principal Occupation(s) During Past 5 Years:	President, The Greening Group (business consultants) since 1994; Partner, The Restaurant Group (restaurants) since 2006
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
OFFICERS
Name:	Jeffrey S. Coons, Ph.D., CFA
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	47
Current Position(s) Held with Fund:	Vice President
Term of Office1 & Length of Time Served:	Since 2004
Principal Occupation(s) During Past 5 Years:	President since 2010, Co-Director of Research since 2002, Executive Group Member** since 2003, - Manning & Napier Advisors, Inc. Holds one or more of the following titles for various subsidiaries and
	affiliates: President, Director, Treasurer or Senior Trust Officer.
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A

30

Directors’ and Officers’ Information (unaudited)

OFFICERS (continued)

Name:	Beth Galusha
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	49
Current Position(s) Held with Fund:	Assistant Chief Financial Officer
Term of Office1 & Length of Time Served:	Assistant Chief Financial Officer since 2010
Principal Occupation(s) During Past 5 Years:	Chief Financial Officer and Treasurer, Manning & Napier Advisors, Inc.
	Holds one or more of the following titles for various affiliates: Chief Financial Officer, Director, or Treasurer
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
Name:	Christine Glavin
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	44
Current Position(s) Held with Fund:	Principal Financial Officer, Chief Financial Officer
Term of Office1 & Length of Time Served:	Principal Financial Officer since 2002; Chief Financial Officer since 2001
Principal Occupation(s) During Past 5 Years:	Fund Reporting Manager, Manning & Napier Advisors, Inc. since 1997
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
Name:	Jodi L. Hedberg
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	43
Current Position(s) Held with Fund:	Corporate Secretary, Chief Compliance Officer, Anti-Money Laundering Compliance Officer
Term of Office1 & Length of Time Served:	Corporate Secretary since 1997; Chief Compliance Officer since 2004
Principal Occupation(s) During Past 5 Years:	Director of Compliance, Manning & Napier Advisors, Inc. and affiliates since 1990 (title change in 2005 from Compliance Manager to Director of Compliance); Corporate Secretary, Manning & Napier Investor Services,
	Inc. since 2006
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
Name:	Richard Yates
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	45
Current Position(s) Held with Fund:	Chief Legal Officer
Term of Office1 & Length of Time Served:	Chief Legal Officer since 2004
Principal Occupation(s) During Past 5 Years:	Counsel - Manning & Napier Advisors, Inc. & affiliates since 2000; Holds one or more of the following titles for various affiliates; Director or Corporate Secretary
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A

*Interested Director, within the meaning of the Investment Company Act of 1940 by reason of his position with the Fund’s investment advisor and distributor. Mr. Auspitz serves as the Executive Vice President and Director, Manning & Napier Advisors, Inc. and President and Director, Manning & Napier Investor Services, Inc., the Fund’s distributor.

**Prior to June 2010, the Executive Group, consisting of senior executive employee-owners, performed the duties of the Office of the Chief Executive of the Advisor. Effective June 2010, the Executive Group serves as an advisory board to the Chief Executive Officer.

¹The term of office for President, Vice President, Chief Financial Officer, Assistant Chief Financial Officer, Chief Legal Officer and Corporate Secretary is one year and until their respective successors are chosen and qualified. All other officers’ terms are indefinite.

31

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33

Literature Requests (unaudited)

Proxy Voting Policies and Procedures

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available, without charge, upon request:

By phone	1-800-466-3863
On the Securities and Exchange Commission’s (SEC) web site	http://www.sec.gov

Proxy Voting Record

Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30th is available, without charge, upon request:

By phone	1-800-466-3863
On the SEC’s web site	http://www.sec.gov

Quarterly Portfolio Holdings

The Series’ complete schedule of portfolio holdings for the 1st and 3rd quarters of each fiscal year are provided on Form N-Q, and are available, without charge, upon request:

By phone	1-800-466-3863
On the SEC’s web site	http://www.sec.gov

The Series’ Form N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

Prospectus and Statement of Additional Information (SAI)

The prospectus and SAI provide additional information about each Series, including charges, expenses and risks. These documents are available, without charge, upon request:

By phone	1-800-466-3863
On the SEC’s web site	http://www.sec.gov
On the Advisor’s web site	http://www.manning-napier.com

Additional information available at www.manning-napier.com

1. Fund Holdings - Month-End

2. Fund Holdings - Quarter-End

3. Shareholder Report - Annual

4. Shareholder Report - Semi-Annual

MNCRBND-12/10-AR

Management Discussion and Analysis (unaudited)

Dear Shareholders:

As well-defined swings in sentiment drove market fluctuations in 2010, the fixed income markets had favorable results for the year. Returns were broadly positive throughout the first three quarters of the year, with higher gains during the stock market pullback in the second quarter. However, while equities finished the year with a strong rally, fixed income markets generally took a negative turn at the end of the year. After eight consecutive quarters of positive performance, broad fixed income markets suffered losses in the fourth quarter.

Overall, corporate bonds were the best performing sector during 2010, with below investment grade securities experiencing significant gains. Mortgage securities and U.S. Treasury securities also performed well, particularly intermediate and longer-term U.S. Treasuries. While municipal bonds posted positive results for the year, the sector had the weakest returns in 2010, as credit concerns and supply and demand changes caused noteworthy losses during the last quarter.

The Bank of America Merrill Lynch U.S. Corporate, Government and Mortgage Index earned a solid 6.43% during the year. With a return of 10.18%, the Core Plus Bond Series noticeably outpaced its benchmark.

Throughout 2010, the Core Plus Bond Series has maintained a heavy weighting to corporate bonds, including below investment grade corporate securities, because the Advisor believes the supply and demand dynamics within this sector remain attractive. As of the end of the year, the Series had 86.6% of its assets invested in corporate bonds and preferred stocks, and this significant allocation to corporate bonds was the primary driver of outperformance over the past year. Within that sector weighting, the Series had a 19.7% allocation to corporate bonds rated below investment grade, which is near the 20% limit for the Series.

As the markets unfold in 2011, it will be important to monitor trends such as monetary policy and inflation expectations. With this mindset, Manning & Napier remains committed to our active investment approach to fixed income. With our fundamentals-based investment strategies, we will continue to use tools such as sector, maturity, quality, and issue selections to take advantage of market opportunities and manage risk throughout the full bond market cycle. Staying focused on the fundamentals and maintaining our selective investment process helped us earn strong returns through the volatile markets of 2010, and we believe these qualities will remain important in the environment ahead.

As always, we appreciate your business.

Sincerely,

Manning & Napier Advisors, Inc.

1

Performance Update as of December 31, 2010 (unaudited)

	Average Annual Total Returns As of December 31, 2010
	One Year	Five Year	Since Inception1
Manning & Napier Fund, Inc. - Core Plus Bond Series2	10.18%	6.84%	6.17%
Bank of America (BofA) Merrill Lynch U.S. Corporate, Government & Mortgage Index3	6.43%	5.87%	5.50%

The following graph compares the value of a $10,000 investment in the Manning & Napier Fund, Inc. - Core Plus Bond Series from its inception¹ (4/21/05) to present (12/31/10) to the BofA Merrill Lynch U.S. Corporate, Government & Mortgage Index.

¹Performance numbers for the Series and Index are calculated from April 21, 2005, the Series’ inception date.

²The Series’ performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of shares. The Series’ performance is historical and may not be indicative of future results. The performance returns shown are inclusive of the net expense ratio of the Series. For the year ended December 31, 2010, this net expense ratio was 0.76%. The gross expense ratio, which does not account for any voluntary or contractual waivers currently in effect, was 0.76% for the year ended December 31, 2010.

³The unmanaged BofA Merrill Lynch U.S. Corporate, Government & Mortgage Index (formerly a Merrill Lynch Index) is a market value weighted measure that represents U.S. government, corporate, and pass-through securities issued by entities within the United States, by supranational entities, or by entities headquartered outside of the United States but who have issued dollar-denominated securities within the United States. The Index only includes investment-grade securities with maturities of greater than one year. The Index returns assume reinvestment of coupons and, unlike Series returns, do not reflect any fees or expenses.

2

Shareholder Expense Example (unaudited)

As a shareholder of the Series, you may incur two types of costs: (1) transaction costs and (2) ongoing costs, including management fees and other Series expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Series and to compare these costs with the ongoing costs of investing in other mutual funds.

The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (July 1, 2010 to December 31, 2010).

Actual Expenses

The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Series’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Series’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid during the period. You may use this information to compare the ongoing costs of investing in the Series and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.

	Beginning Account Value 7/1/10	Ending Account Value 12/31/10	Expenses Paid During Period* 7/1/10-12/31/10
Actual	$1,000.00	$1,042.20	$3.91
Hypothetical (5% return before expenses)	$1,000.00	$1,021.37	$3.87

*Expenses are equal to the Series’ annualized expense ratio (for the six-month period) of 0.76%, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). Expenses are based on the most recent fiscal half year; therefore, the expense ratio stated above may differ from the expense ratio stated in the financial highlights, which is based on one-year data. The Series’ total return would have been lower had certain expenses not been waived during the period.

3

Portfolio Composition as of December 31, 2010 (unaudited)

4

Investment Portfolio - December 31, 2010

	Credit Rating1 (unaudited)			Principal Amount		Value (Note 2)
CORPORATE BONDS - 80.9%
Convertible Corporate Bonds - 1.2%
Health Care - 0.7%
Biotechnology - 0.6%
Amgen, Inc., 0.375%, 2/1/2013		A3		$	3,270,000	$	3,270,000
Health Care Equipment & Supplies - 0.1%
Medtronic, Inc., 1.625%, 4/15/2013		A1			665,000		669,156
Total Health Care							3,939,156
Information Technology - 0.5%
Computers & Peripherals - 0.5%
EMC Corp., 1.75%, 12/1/2013		A	2		1,685,000		2,538,031
Total Convertible Corporate Bonds
(Identified Cost $5,940,689)							6,477,187
Non-Convertible Corporate Bonds - 79.7%
Consumer Discretionary - 13.1%
Hotels, Restaurants & Leisure - 1.8%
Cedar Fair LP - Canada’s Wonderland Co. - Magnum Management Corp.3, 9.125%, 8/1/2018		B2			1,000,000		1,076,250
International Game Technology, 7.50%, 6/15/2019		Baa2			5,505,000		6,196,769
Wendy’s - Arby’s Restaurants LLC, 10.00%, 7/15/2016		B3			1,000,000		1,085,000
Wyndham Worldwide Corp., 9.875%, 5/1/2014		Ba1			405,000		474,252
Wyndham Worldwide Corp., 6.00%, 12/1/2016		Ba1			800,000		837,148
							9,669,419
Household Durables - 1.8%
Fortune Brands, Inc., 5.375%, 1/15/2016		Baa3			4,485,000		4,638,140
Newell Rubbermaid, Inc., 4.70%, 8/15/2020		Baa3			5,000,000		4,959,745
							9,597,885
Media - 5.9%
Cablevision Systems Corp., 8.625%, 9/15/2017		B1			1,965,000		2,139,394
Columbus International, Inc. (Barbados)3, 11.50%, 11/20/2014		B2			900,000		999,000
Comcast Corp., 6.50%, 11/15/2035		Baa1			4,540,000		4,879,456
Comcast Corp., 6.95%, 8/15/2037		Baa1			1,855,000		2,098,131
DIRECTV Holdings LLC, 5.20%, 3/15/2020		Baa2			4,710,000		4,882,777
Discovery Communications LLC, 5.05%, 6/1/2020		Baa2			4,875,000		5,155,137
MDC Partners, Inc. (Canada), 11.00%, 11/1/2016		B2			500,000		551,250
Sirius XM Radio, Inc.3, 9.75%, 9/1/2015		Ba3			1,405,000		1,577,113
Time Warner, Inc., 7.625%, 4/15/2031		Baa2			4,105,000		4,990,379
Unitymedia Hessen GmbH & Co. KG - Unitymedia NRW GmbH (Germany)3, 8.125%, 12/1/2017		B1		EUR	600,000		848,890
UPC Holding B.V. (Netherlands)3, 9.875%, 4/15/2018		B2		$	1,405,000		1,538,475
Virgin Media Finance plc, Series 1 (United Kingdom), 9.50%, 8/15/2016		Ba3			1,000,000		1,130,000

The accompanying notes are an integral part of the financial statements. 5

Investment Portfolio - December 31, 2010

	Credit Rating1 (unaudited)		Principal Amount		Value (Note 2)
CORPORATE BONDS (continued)
Non-Convertible Corporate Bonds (continued)
Consumer Discretionary (continued)
Media (continued)
WMG Acquisition Corp., 9.50%, 6/15/2016		Ba2	$	1,000,000	$	1,072,500
						31,862,502
Multiline Retail - 0.7%
Target Corp., 6.00%, 1/15/2018		A2		3,225,000		3,733,666
Specialty Retail - 2.3%
AutoZone, Inc., 4.00%, 11/15/2020		Baa2		1,650,000		1,558,379
The Home Depot, Inc., 5.40%, 3/1/2016		Baa1		4,325,000		4,846,617
Lowe’s Companies, Inc., 6.10%, 9/15/2017		A1		3,175,000		3,672,164
Rent-A-Center, Inc.3, 6.625%, 11/15/2020		Ba3		1,100,000		1,094,500
Toys R Us Property Co., LLC, 8.50%, 12/1/2017		Ba1		920,000		989,000
						12,160,660
Textiles, Apparel & Luxury Goods - 0.6%
VF Corp., 5.95%, 11/1/2017		A3		2,815,000		3,140,034
Total Consumer Discretionary						70,164,166
Consumer Staples - 1.7%
Beverages - 0.7%
CEDC Finance Corp. International, Inc.3, 9.125%, 12/1/2016		B1		1,215,000		1,290,937
Constellation Brands, Inc., 8.375%, 12/15/2014		Ba3		1,205,000		1,316,463
PepsiCo, Inc., 7.90%, 11/1/2018		Aa3		713,000		917,355
						3,524,755
Food Products - 0.8%
Kraft Foods, Inc., 6.125%, 2/1/2018		Baa2		3,610,000		4,123,685
Household Products - 0.0%*
The Procter & Gamble Co., 4.85%, 12/15/2015		Aa3		25,000		27,880
Personal Products - 0.2%
Revlon Consumer Products Corp., 9.75%, 11/15/2015		B3		1,215,000		1,284,863
Total Consumer Staples						8,961,183
Energy - 8.6%
Energy Equipment & Services - 3.5%
Baker Hughes, Inc., 7.50%, 11/15/2018		A2		3,155,000		3,956,200
Calfrac Holdings LP3, 7.50%, 12/1/2020		B2		1,000,000		1,012,500
Cie Generale de Geophysique - Veritas (France), 7.75%, 5/15/2017		Ba3		1,000,000		1,025,000
Complete Production Services, Inc., 8.00%, 12/15/2016		B1		1,155,000		1,195,425
Hornbeck Offshore Services, Inc., 8.00%, 9/1/2017		Ba3		500,000		510,000
Key Energy Services, Inc., 8.375%, 12/1/2014		B1		1,000,000		1,055,000
Thermon Industries, Inc.3, 9.50%, 5/1/2017		B1		830,000		883,950
Trinidad Drilling Ltd. (Canada)3, 7.875%, 1/15/2019		B2		1,000,000		1,010,000

6 The accompanying notes are an integral part of the financial statements.

Investment Portfolio - December 31, 2010

	Credit Rating1 (unaudited)			Principal Amount		Value (Note 2)
CORPORATE BONDS (continued)
Non-Convertible Corporate Bonds (continued)
Energy (continued)
Energy Equipment & Services (continued)
Weatherford International Ltd. (Switzerland), 9.625%, 3/1/2019		Baa2		$	6,175,000	$	7,923,680
							18,571,755
Oil, Gas & Consumable Fuels - 5.1%
Anadarko Petroleum Corp., 5.95%, 9/15/2016		Ba1			5,825,000		6,257,733
Apache Corp., 6.90%, 9/15/2018		A3			2,275,000		2,777,739
Aquilex Holdings LLC - Aquilex Finance Corp., 11.125%, 12/15/2016		Caa1			740,000		749,250
Arch Western Finance LLC, 6.75%, 7/1/2013		B1			694,000		700,940
Chaparral Energy, Inc., 8.875%, 2/1/2017		Caa1			1,055,000		1,070,825
Chesapeake Energy Corp., 9.50%, 2/15/2015		Ba3			1,500,000		1,691,250
Coffeyville Resources LLC - Coffeyville Finance, Inc.3, 9.00%, 4/1/2015		Ba3			373,000		399,110
Coffeyville Resources LLC - Coffeyville Finance, Inc.3, 10.875%, 4/1/2017		B3			395,000		424,625
Crosstex Energy LP - Crosstex Energy Finance Corp., 8.875%, 2/15/2018		B3			1,500,000		1,606,875
Hess Corp., 5.60%, 2/15/2041		Baa2			5,125,000		5,087,757
Linn Energy LLC - Linn Energy Finance Corp.3, 7.75%, 2/1/2021.		B2			1,045,000		1,071,125
Martin Midstream Partners LP - Martin Midstream Finance Corp., 8.875%, 4/1/2018		B	2		840,000		865,200
Niska Gas Storage US LLC - Niska Gas Storage Canada ULC3, 8.875%, 3/15/2018		B1			605,000		647,350
Plains Exploration & Production Co., 8.625%, 10/15/2019		B1			1,000,000		1,095,000
Targa Resources Partners LP - Targa Resources Partners Finance Corp., 8.25%, 7/1/2016		B1			750,000		791,250
Tesoro Corp., 9.75%, 6/1/2019		Ba1			1,180,000		1,306,850
Whiting Petroleum Corp., 7.00%, 2/1/2014		Ba3			1,000,000		1,050,000
							27,592,879
Total Energy							46,164,634
Financials - 24.9%
Capital Markets - 4.7%
Goldman Sachs Capital I, 6.345%, 2/15/2034		A3			3,450,000		3,287,333
Goldman Sachs Capital II4, 5.793%, 12/29/2049		Baa2			4,205,000		3,563,737
The Goldman Sachs Group, Inc., 6.15%, 4/1/2018		A1			3,385,000		3,727,538
The Goldman Sachs Group, Inc., 5.375%, 3/15/2020		A1			4,510,000		4,660,458
Merrill Lynch & Co., Inc., 6.11%, 1/29/2037		A3			1,785,000		1,611,277
Morgan Stanley, 5.55%, 4/27/2017		A2			3,544,000		3,692,139
Morgan Stanley, 5.50%, 1/26/2020		A2			4,485,000		4,520,992
							25,063,474

The accompanying notes are an integral part of the financial statements. 7

Investment Portfolio - December 31, 2010

	Credit Rating1 (unaudited)		Principal Amount		Value (Note 2)
CORPORATE BONDS (continued)
Non-Convertible Corporate Bonds (continued)
Financials (continued)
Commercial Banks - 6.1%
Household Finance Co., 6.375%, 11/27/2012		A3	$	4,335,000	$	4,699,855
KeyBank National Association, 5.45%, 3/3/2016		Baa1		4,640,000		4,882,909
Manufacturers & Traders Trust Co., 6.625%, 12/4/2017		A3		5,665,000		6,359,807
National City Corp., 6.875%, 5/15/2019		Baa1		1,920,000		2,155,693
PNC Bank National Association, 5.25%, 1/15/2017		A3		5,640,000		5,855,110
U.S. Bank National Association, 6.375%, 8/1/2011		Aa3		85,000		87,826
USB Capital XIII Trust, 6.625%, 12/15/2039		A2		3,580,000		3,656,719
Wachovia Corp., 5.25%, 8/1/2014		A2		4,500,000		4,799,223
						32,497,142
Consumer Finance - 1.8%
American Express Co., 8.125%, 5/20/2019		A3		3,935,000		4,895,970
American Express Co.4, 6.80%, 9/1/2066		Baa2		3,445,000		3,410,550
Credit Acceptance Corp.3, 9.125%, 2/1/2017		B1		1,500,000		1,575,000
						9,881,520
Diversified Financial Services - 3.3%
Bank of America Corp., 5.75%, 8/15/2016		A3		3,715,000		3,794,642
Bank of America Corp., 7.625%, 6/1/2019		A2		3,315,000		3,817,007
Citigroup, Inc., 8.50%, 5/22/2019		A3		4,110,000		5,102,298
JPMorgan Chase & Co., 6.30%, 4/23/2019		Aa3		4,300,000		4,894,497
						17,608,444
Insurance - 1.6%
American International Group, Inc., 4.25%, 5/15/2013		A3		1,840,000		1,904,120
Fidelity National Financial, Inc., 6.60%, 5/15/2017		Baa3		5,035,000		5,023,681
Hartford Financial Services Group, Inc.4, 8.125%, 6/15/2038		Ba1		1,615,000		1,715,937
						8,643,738
Real Estate Investment Trusts (REITS) - 7.4%
AvalonBay Communities, Inc., 6.10%, 3/15/2020		Baa1		4,380,000		4,898,167
Boston Properties LP, 5.875%, 10/15/2019		Baa2		4,455,000		4,831,216
Camden Property Trust, 5.70%, 5/15/2017		Baa1		4,025,000		4,247,474
Digital Realty Trust LP, 5.875%, 2/1/2020		Baa2		1,000,000		1,017,353
DuPont Fabros Technology LP, 8.50%, 12/15/2017		Ba2		1,475,000		1,578,250
Felcor Lodging LP, 10.00%, 10/1/2014		B2		1,000,000		1,120,000
HCP, Inc., 6.70%, 1/30/2018		Baa3		4,500,000		4,827,947
Health Care REIT, Inc., 6.20%, 6/1/2016		Baa2		4,390,000		4,857,557
Host Hotels & Resorts LP, 6.375%, 3/15/2015		Ba1		740,000		751,100
Mack-Cali Realty LP, 7.75%, 8/15/2019		Baa2		2,665,000		3,101,407
National Retail Properties, Inc., 6.875%, 10/15/2017		Baa2		2,365,000		2,547,961
Omega Healthcare Investors, Inc., 7.50%, 2/15/2020		Ba2		1,000,000		1,051,250

8 The accompanying notes are an integral part of the financial statements.

Investment Portfolio - December 31, 2010

	Credit Rating1 (unaudited)			Principal Amount		Value (Note 2)
CORPORATE BONDS (continued)
Non-Convertible Corporate Bonds (continued)
Financials (continued)
Real Estate Investment Trusts (REITS) (continued)
Simon Property Group LP, 10.35%, 4/1/2019		A3		$	3,670,000	$	5,017,620
							39,847,302
Total Financials							133,541,620
Health Care - 3.3%
Biotechnology - 0.9%
Amgen, Inc., 3.45%, 10/1/2020		A3			5,000,000		4,764,190
Health Care Equipment & Supplies - 1.5%
Alere, Inc., 9.00%, 5/15/2016		B3			2,000,000		2,060,000
Becton Dickinson and Co., 6.00%, 5/15/2039		A2			3,350,000		3,782,787
CR Bard, Inc., 4.40%, 1/15/2021		A3			800,000		812,855
Fresenius US Finance II, Inc.3, 9.00%, 7/15/2015		Ba1			1,320,000		1,511,400
							8,167,042
Health Care Providers & Services - 0.7%
BioScrip, Inc., 10.25%, 10/1/2015		B3			795,000		818,850
HCA, Inc., 8.50%, 4/15/2019		Ba3			1,000,000		1,095,000
Health Management Associates, Inc., 6.125%, 4/15/2016		BB	2		1,050,000		1,060,500
LifePoint Hospitals, Inc.3, 6.625%, 10/1/2020		Ba1			1,000,000		992,500
							3,966,850
Life Sciences Tools & Services - 0.2%
PharmaNet Development Group, Inc.3, 10.875%, 4/15/2017		B3			825,000		858,000
Total Health Care							17,756,082
Industrials - 13.9%
Aerospace & Defense - 1.1%
BE Aerospace, Inc., 6.875%, 10/1/2020		Ba3			1,000,000		1,032,500
The Boeing Co., 6.00%, 3/15/2019		A2			3,465,000		3,986,548
Kratos Defense & Security Solutions, Inc., 10.00%, 6/1/2017		B3			525,000		581,437
							5,600,485
Air Freight & Logistics - 0.1%
FedEx Corp., 8.00%, 1/15/2019		Baa2			435,000		536,597
Airlines - 1.7%
Continental Airlines Pass-Through Trust, Series 1997-4, Class A, 6.90%, 1/2/2018		Baa2			351,290		373,246
Continental Airlines, Inc.3, 6.75%, 9/15/2015		Ba2			1,000,000		1,030,000
Delta Air Lines Pass-Through Trust, Series 2001-1, Class 1A2, 7.111%, 9/18/2011		BBB	2		1,245,000		1,285,463
Delta Air Lines Pass-Through Trust, Series 2007-1, Class A, 6.821%, 8/10/2022		Baa1			1,218,838		1,291,968

The accompanying notes are an integral part of the financial statements. 9

Investment Portfolio - December 31, 2010

	Credit Rating1 (unaudited)		Principal Amount		Value (Note 2)
CORPORATE BONDS (continued)
Non-Convertible Corporate Bonds (continued)
Industrials (continued)
Airlines (continued)
Delta Air Lines, Inc.3, 9.50%, 9/15/2014		Ba2	$	898,000	$	977,697
Southwest Airlines Co., 5.25%, 10/1/2014		Baa3		3,925,000		4,128,068
						9,086,442
Building Products - 0.4%
Building Materials Corp. of America3, 6.875%, 8/15/2018		B1		630,000		623,700
Building Materials Corp. of America3, 7.50%, 3/15/2020		B1		400,000		407,000
Owens Corning, 9.00%, 6/15/2019		Ba1		1,095,000		1,284,647
						2,315,347
Commercial Services & Supplies - 1.2%
Clean Harbors, Inc., 7.625%, 8/15/2016		Ba2		900,000		956,250
Garda World Security Corp. (Canada)3, 9.75%, 3/15/2017		B3		800,000		858,000
Waste Management, Inc., 7.375%, 3/11/2019		Baa3		3,930,000		4,755,697
						6,569,947
Industrial Conglomerates - 3.9%
GE Capital Trust I4, 6.375%, 11/15/2067		Aa3		3,545,000		3,500,687
General Electric Capital Corp., 5.625%, 5/1/2018		Aa2		2,150,000		2,344,605
General Electric Capital Corp., 5.50%, 1/8/2020		Aa2		3,105,000		3,320,757
General Electric Capital Corp., Series A, 6.75%, 3/15/2032		Aa2		3,695,000		4,183,176
General Electric Co., 5.25%, 12/6/2017		Aa2		2,100,000		2,268,197
Textron, Inc., 7.25%, 10/1/2019		Baa3		3,790,000		4,343,154
Tyco Electronics Group S.A. (Luxembourg), 4.875%, 1/15/2021		Baa2		800,000		808,975
						20,769,551
Machinery - 1.8%
Caterpillar Financial Services Corp., 7.05%, 10/1/2018		A2		3,385,000		4,094,608
John Deere Capital Corp., 5.50%, 4/13/2017		A2		1,240,000		1,382,526
John Deere Capital Corp., 5.75%, 9/10/2018		A2		3,795,000		4,299,246
						9,776,380
Marine - 0.5%
Navios Maritime Holdings, Inc. - Navios Maritime Finance US, Inc. (Marshall Island), 8.875%, 11/1/2017		Ba3		1,530,000		1,656,225
United Maritime Group LLC - United Maritime Group Finance Corp., 11.75%, 6/15/2015		B3		740,000		741,850
						2,398,075
Road & Rail - 3.2%
CSX Corp., 6.00%, 10/1/2036		Baa3		4,530,000		4,718,081
JB Hunt Transport Services, Inc., 3.375%, 9/15/2015		Baa3		7,865,000		7,768,913
RailAmerica, Inc., 9.25%, 7/1/2017		B1		710,000		780,113

10 The accompanying notes are an integral part of the financial statements.

Investment Portfolio - December 31, 2010

		Credit Rating1 (unaudited)		Principal Amount		Value (Note 2)
CORPORATE BONDS (continued)
Non-Convertible Corporate Bonds (continued)
Industrials (continued)
Road & Rail (continued)
Union Pacific Corp., 5.65%, 5/1/2017			Baa2	$	3,675,000	$	4,057,946
							17,325,053
Total Industrials							74,377,877
Information Technology - 4.2%
Communications Equipment - 1.2%
Alcatel-Lucent USA, Inc., 6.50%, 1/15/2028			B1		1,000,000		795,000
Cisco Systems, Inc., 5.90%, 2/15/2039			A1		3,705,000		4,103,306
Hughes Network Systems LLC - HNS Finance Corp., 9.50%, 4/15/2014			B1		1,280,000		1,320,000
							6,218,306
Computers & Peripherals - 0.9%
International Business Machines Corp., 5.60%, 11/30/2039			Aa3		4,506,000		4,909,418
Electronic Equipment, Instruments & Components - 0.5%
Corning, Inc., 4.25%, 8/15/2020			Baa1		2,500,000		2,468,840
	��
IT Services - 0.9%
The Western Union Co., 5.253%, 4/1/2020			A3		4,810,000		4,941,746
Semiconductors & Semiconductor Equipment - 0.5%
Advanced Micro Devices, Inc., 8.125%, 12/15/2017			Ba3		1,475,000		1,563,500
MagnaChip Semiconductor S.A. - MagnaChip Semiconductor Finance Co., 10.50%, 4/15/2018			B2		830,000		875,650
							2,439,150
Software - 0.2%
Oracle Corp.3, 3.875%, 7/15/2020			A2		1,325,000		1,317,164
Total Information Technology							22,294,624
Materials - 4.5%
Chemicals - 1.1%
E.I. du Pont de Nemours & Co., 6.00%, 7/15/2018			A2		3,435,000		3,949,546
Ferro Corp., 7.875%, 8/15/2018			B2		1,030,000		1,086,650
Rhodia S.A. (France)3, 6.875%, 9/15/2020			B1		1,000,000		1,013,750
							6,049,946
Containers & Packaging - 0.1%
Reynolds Group Issuer, Inc. - Reynolds Group Issuer LLC3, 9.00%, 4/15/2019			Caa1		500,000		518,125
Metals & Mining - 1.9%
Alcoa, Inc., 5.87%, 2/23/2022			Baa3		2,185,000		2,170,736
BHP Billiton Finance (USA) Ltd. (Australia), 6.50%, 4/1/2019			A1		3,230,000		3,840,935
Cliffs Natural Resources, Inc., 5.90%, 3/15/2020			Baa3		1,000,000		1,053,535

The accompanying notes are an integral part of the financial statements. 11

Investment Portfolio - December 31, 2010

	Credit Rating 1 (unaudited)		Principal Amount		Value (Note 2)
CORPORATE BONDS (continued)
Non-Convertible Corporate Bonds (continued)
Materials (continued)
Metals & Mining (continued)
Cliffs Natural Resources, Inc., 4.80%, 10/1/2020		Baa3	$	2,000,000	$	1,954,218
Steel Dynamics, Inc., 7.75%, 4/15/2016		Ba2		805,000		847,263
						9,866,687
Paper & Forest Products - 1.4%
Georgia-Pacific LLC3, 8.25%, 5/1/2016		Ba2		1,100,000		1,241,625
International Paper Co., 7.50%, 8/15/2021		Baa3		5,330,000		6,295,604
						7,537,229
Total Materials						23,971,987
Telecommunication Services - 2.5%
Diversified Telecommunication Services - 0.8%
Clearwire Communications LLC - Clearwire Finance, Inc.3, 12.00%, 12/1/2015		B2		410,000		442,800
Clearwire Communications LLC - Clearwire Finance, Inc.3, 12.00%, 12/1/2015		B2		370,000		398,675
Inmarsat Finance plc (United Kingdom)3, 7.375%, 12/1/2017		Ba2		1,000,000		1,050,000
Intelsat Subsidiary Holding Co. S.A. (Bermuda)3, 8.875%, 1/15/2015		B3		995,000		1,017,387
Wind Acquisition Finance S.A. (Luxembourg)3, 11.75%, 7/15/2017		B2		1,080,000		1,217,700
						4,126,562
Wireless Telecommunication Services - 1.7%
CC Holdings GS V LLC - Crown Castle GS III Corp.3, 7.75%, 5/1/2017		Baa3		1,000,000		1,092,500
Crown Castle Towers LLC3, 6.113%, 1/15/2020		A2		4,070,000		4,246,316
Crown Castle Towers LLC3, 4.883%, 8/15/2020		A2		610,000		586,259
NII Capital Corp., 10.00%, 8/15/2016		B2		1,000,000		1,107,500
SBA Tower Trust3, 5.101%, 4/15/2017		A2		2,095,000		2,178,070
						9,210,645
Total Telecommunication Services						13,337,207
Utilities - 3.0%
Electric Utilities - 2.5%
Allegheny Energy Supply Co. LLC3, 5.75%, 10/15/2019		Baa3		2,385,000		2,400,600
Exelon Generation Co. LLC, 5.35%, 1/15/2014		A3		3,355,000		3,632,026
Exelon Generation Co. LLC, 4.00%, 10/1/2020		A3		4,000,000		3,743,352
Southwestern Electric Power Co., 6.45%, 1/15/2019		Baa3		3,240,000		3,558,013
						13,333,991
Gas Utilities - 0.2%
Ferrellgas LP - Ferrellgas Finance Corp.3, 6.50%, 5/1/2021		Ba3		1,000,000		975,000

12 The accompanying notes are an integral part of the financial statements.

Investment Portfolio - December 31, 2010

	Credit Rating 1 (unaudited)		Principal Amount/ Shares		Value (Note 2)
CORPORATE BONDS (continued)
Non-Convertible Corporate Bonds (continued)
Utilities (continued)
Independent Power Producers & Energy Traders - 0.2%
Mirant Mid Atlantic Pass-Through Trust, Series B, 9.125%, 6/30/2017		Ba1	$	389,076	$	418,257
Mirant Mid Atlantic Pass-Through Trust, Series C, 10.06%, 12/30/2028		Ba1		487,147		540,733
						958,990
Multi-Utilities - 0.1%
CenterPoint Energy Resources Corp., Series B, 7.875%, 4/1/2013		Baa3		770,000		870,435
Total Utilities						16,138,416
Total Non-Convertible Corporate Bonds (Identified Cost $394,151,508)						426,707,796
TOTAL CORPORATE BONDS (Identified Cost $400,092,197)						433,184,983
PREFERRED STOCKS - 2.2%
Financials - 2.2%
Commercial Banks - 1.0%
PNC Financial Services Group, Inc., Series K7, 8.25%		Baa3		1,850,000		1,972,637
Wells Fargo & Co., Series K7, 7.98%		Baa3		3,145,000		3,317,975
						5,290,612
Diversified Financial Services - 1.2%
Bank of America Corp., Series K7, 8.00%		Ba3		3,350,000		3,376,130
JPMorgan Chase & Co., Series 17, 7.90%		Baa1		2,985,000		3,173,025
						6,549,155
TOTAL PREFERRED STOCKS (Identified Cost $10,896,014)						11,839,767
ASSET-BACKED SECURITIES - 1.2%
Capital Auto Receivables Asset Trust, Series 2007-1, Class A4A, 5.010%, 4/16/2012		Aaa	$	133,637		134,898
Capital Auto Receivables Asset Trust, Series 2007-3, Class A4, 5.210%, 3/17/2014		Aaa		152,383		155,790
Ford Credit Auto Owner Trust, Series 2008-C, Class A4B4, 2.010%, 4/15/2013		Aaa		300,000		304,294
Hertz Vehicle Financing LLC, Series 2009-2A, Class A23, 5.290%, 3/25/2016		Aaa		2,585,000		2,807,711

The accompanying notes are an integral part of the financial statements. 13

Investment Portfolio - December 31, 2010

	Credit Rating 1 (unaudited)		Principal Amount		Value (Note 2)
ASSET-BACKED SECURITIES (continued)
Hertz Vehicle Financing LLC, Series 2010-1A, Class A23, 3.740%, 2/25/2017		Aaa	$	2,360,000	$	2,397,749
SLM Student Loan Trust, Series 2002-4, Class A44, 0.442%, 3/15/2017		Aaa		383,494		383,163
TOTAL ASSET-BACKED SECURITIES (Identified Cost $5,872,535)						6,183,605
COMMERCIAL MORTGAGE-BACKED SECURITIES - 3.5%
Americold LLC Trust, Series 2010-ARTA, Class A13, 3.847%, 1/14/2029		AAA2		435,000		435,778
Banc of America Commercial Mortgage, Inc., Series 2006-2, Class A44, 5.740%, 5/10/2045		AAA2		700,000		766,334
Banc of America Commercial Mortgage, Inc., Series 2006-4, Class A4, 5.634%, 7/10/2046		Aaa		335,000		359,438
Bear Stearns Commercial Mortgage Securities, Series 2005-PWR9, Class A4A, 4.871%, 9/11/2042		Aaa		375,000		395,043
Bear Stearns Commercial Mortgage Securities, Series 2006-PW12, Class A44, 5.722%, 9/11/2038		Aaa		745,000		812,843
Bear Stearns Commercial Mortgage Securities, Series 2006-PW13, Class A4, 5.540%, 9/11/2041		AAA2		650,000		697,580
Citigroup Commercial Mortgage Trust, Series 2006-C4, Class A34, 5.728%, 3/15/2049		Aaa		575,000		622,332
Commercial Mortgage Pass-Through Certificates, Series 2006-C7, Class A44, 5.764%, 6/10/2046		AAA2		900,000		984,036
Commercial Mortgage Pass-Through Certificates, Series 2010-C1, Class A13, 3.156%, 7/20/2046		Aaa		1,302,678		1,305,609
Greenwich Capital Commercial Funding Corp., Series 2006-GG7, Class A44, 5.883%, 7/10/2038		Aaa		1,695,000		1,849,243
JP Morgan Chase Commercial Mortgage Securities Corp., Series 2005-LDP5, Class A44, 5.205%, 12/15/2044		Aaa		1,670,000		1,797,861
JP Morgan Chase Commercial Mortgage Securities Corp., Series 2006-LDP7, Class A44, 5.872%, 4/15/2045		Aaa		330,000		360,891
JP Morgan Chase Commercial Mortgage Securities Corp., Series 2010-C2, Class A33, 4.070%, 11/15/2043		AAA2		750,000		713,185
LB-UBS Commercial Mortgage Trust, Series 2006-C4, Class A44, 5.881%, 6/15/2038		Aaa		645,000		697,974
Merrill Lynch - Countrywide Commercial Mortgage Trust, Series 2006-3, Class A44, 5.414%, 7/12/2046		Aaa		605,000		637,713
Morgan Stanley Capital I, Series 2005-HQ7, Class A44, 5.204%, 11/14/2042		Aaa		385,000		414,460
OBP Depositor LLC Trust, Series 2010-OBP, Class A3, 4.646%, 7/15/2045		AAA2		420,000		428,551

14 The accompanying notes are an integral part of the financial statements.

Investment Portfolio - December 31, 2010

	Credit Rating 1 (unaudited)		Principal Amount/ Shares		Value (Note 2)
COMMERCIAL MORTGAGE-BACKED SECURITIES (continued)
Vornado DP LLC, Series 2010-VNO, Class A2FX3, 4.004%, 9/13/2028		AAA2	$	1,195,000	$	1,158,618
Wachovia Bank Commercial Mortgage Trust, Series 2005-C21, Class A44, 5.203%, 10/15/2044		Aaa		820,000		886,245
Wachovia Bank Commercial Mortgage Trust, Series 2006-C25, Class A44, 5.737%, 5/15/2043		Aaa		770,000		825,873
Wachovia Bank Commercial Mortgage Trust, Series 2006-C26, Class A34, 6.011%, 6/15/2045		Aaa		900,000		976,741
Wells Fargo Commercial Mortgage Trust, Series 2010-C1, Class A23, 4.393%, 11/18/2043		Aaa		1,350,000		1,334,805
TOTAL COMMERCIAL MORTGAGE-BACKED SECURITIES (Identified Cost $18,381,578)						18,461,153
FOREIGN GOVERNMENT BONDS - 0.6%
Hellenic Republic Government Bond (Greece), 6.00%, 7/19/2019 (Identified Cost $5,180,884)		Ba1	EUR	4,000,000		3,432,175
MUNICIPAL BONDS - 0.5%
New York City, G.O. Bond, 6.646%, 12/1/2031 (Identified Cost $2,500,000)		Aa2	$	2,500,000		2,559,200
MUTUAL FUNDS - 1.7%				81,330		8,819,425
iShares iBoxx Investment Grade Corporate Bond Fund
John Hancock Preferred Income Fund				10,500		196,140
TOTAL MUTUAL FUNDS (Identified Cost $7,604,479)						9,015,565
U.S. GOVERNMENT AGENCIES - 6.6%
Mortgage-Backed Securities - 6.6%
Fannie Mae, Pool #888468, 5.50%, 9/1/2021			$	4,982,518		5,372,556
Fannie Mae, Pool #995233, 5.50%, 10/1/2021				356,262		384,595
Fannie Mae, Pool #888017, 6.00%, 11/1/2021				380,032		414,651
Fannie Mae, Pool #995329, 5.50%, 12/1/2021				2,943,686		3,174,122
Fannie Mae, Pool #888136, 6.00%, 12/1/2021				498,143		543,521
Fannie Mae, Pool #888810, 5.50%, 11/1/2022				5,262,289		5,674,228
Fannie Mae, Pool #AD0462, 5.50%, 10/1/2024				315,419		339,353
Fannie Mae, Pool #889409, 6.00%, 5/1/2038				14,557,617		15,836,545
Freddie Mac, Pool #G11850, 5.50%, 7/1/2020				1,620,915		1,748,309
Freddie Mac, Pool #G12610, 6.00%, 3/1/2022				508,205		554,975
Freddie Mac, Pool #G12655, 6.00%, 5/1/2022				347,394		379,365
Freddie Mac, Pool #G12988, 6.00%, 1/1/2023				285,385		311,114

The accompanying notes are an integral part of the financial statements. 15

Investment Portfolio - December 31, 2010

	Principal Amount/ Shares		Value (Note 2)
U.S. GOVERNMENT AGENCIES (continued)
Mortgage-Backed Securities (continued)
Freddie Mac, Pool #G13078, 6.00%, 3/1/2023	$	498,562	$	544,445
Freddie Mac, Pool #G13331, 5.50%, 10/1/2023		262,803		281,815
TOTAL U.S. GOVERNMENT AGENCIES (Identified Cost $35,643,752)				35,559,594
SHORT-TERM INVESTMENTS - 1.5%
Dreyfus Cash Management, Inc. - Institutional Shares5, 0.14%, (Identified Cost $8,065,745)		8,065,745		8,065,745
TOTAL INVESTMENTS - 98.7% (Identified Cost $494,237,184)				528,301,787
OTHER ASSETS, LESS LIABILITIES - 1.3%				7,053,560
NET ASSETS - 100%			$	535,355,347

FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS OPEN AT DECEMBER 31, 20106:
Settlement Date	Contracts to  Deliver	In  Exchange For	Contracts At Value		Unrealized     Depreciation
01/28/2011	EUR3,380,000	$4,440,813	$	4,516,504	$(75,691)

* Less than 0.1%

EUR - Euro currency

G.O. Bond - General Obligation Bond

¹Credit ratings from Moody’s (unaudited).

²Credit ratings from S&P (unaudited).

³Restricted securities - Investment in securities that are restricted as to public resale under the Securities Act of 1933, as amended. These securities have been sold under rule 144A and have been determined to be liquid under guidelines established by the Board of Directors. These securities amount to $52,985,099, or 9.9%, of the Series’ net assets as of December 31, 2010.

⁴The coupon rate is floating and is the stated rate as of December 31, 2010.

⁵Rate shown is the current yield as of December 31, 2010.

⁶The counterparty for all forward foreign currency exchange contracts is the Bank of New York Mellon Corp.

⁷The rate shown is the fixed rate as of December 31, 2010; the rate becomes floating in 2049.

16 The accompanying notes are an integral part of the financial statements.

Statement of Assets and Liabilities

December 31, 2010

ASSETS:
Investments, at value (identified cost $494,237,184) (Note 2)	$	528,301,787
Interest receivable		7,159,221
Receivable for fund shares sold		804,739
Dividends receivable		35,598
TOTAL ASSETS		536,301,345
LIABILITIES:
Accrued management fees (Note 3)		315,128
Accrued fund accounting and administration fees (Note 3)		17,553
Accrued transfer agent fees (Note 3)		1,068
Accrued Chief Compliance Officer service fees (Note 3)		243
Accrued directors’ fees (Note 3)		91
Payable for fund shares repurchased		473,520
Unrealized depreciation on foreign forward currency contracts (Note 2)		75,691
Other payables and accrued expenses		62,704
TOTAL LIABILITIES		945,998
TOTAL NET ASSETS	$	535,355,347
NET ASSETS CONSIST OF:
Capital stock	$	488,349
Additional paid-in-capital		497,599,318
Distributions in excess of net investment income		(28,376	)
Accumulated net realized gain on investments, foreign currency and translation of other assets and liabilities		3,305,937
Net unrealized appreciation on investments, foreign currency and translation of other assets and liabilities		33,990,119
TOTAL NET ASSETS	$	535,355,347
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER SHARE - Class A ($535,355,347/48,834,882 shares)	$	10.96

The accompanying notes are an integral part of the financial statements. 17

Statement of Operations

For the Year Ended December 31, 2010

INVESTMENT INCOME:
Interest	$	25,311,539
Dividends		2,228,910
Total Investment Income		27,540,449
EXPENSES:
Management fees (Note 3)		3,394,742
Fund accounting and administration fees (Note 3)		114,126
Directors’ fees (Note 3)		15,748
Transfer agent fees (Note 3)		6,026
Chief Compliance Officer service fees (Note 3)		2,621
Custodian fees		28,618
Miscellaneous		109,124
Total Expenses		3,671,005
Less reduction of expenses (Note 3)		(758	)
Net Expenses		3,670,247
NET INVESTMENT INCOME		23,870,202
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY:
Net realized gain (loss) on-
Investments		8,915,939
Foreign currency and translation of other assets and liabilities		(347,168	)
Forward foreign currency exchange contracts		195,190
		8,763,961
Net change in unrealized appreciation (depreciation) on- Investments		13,417,513
Foreign currency and translation of other assets and liabilities		10,688
Forward foreign currency exchange contracts		(75,691	)
		13,352,510
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND FOREIGN CURRENCY		22,116,471
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	45,986,673

18 The accompanying notes are an integral part of the financial statements.

Statements of Changes in Net Assets

	For the Year Ended 12/31/10			For the Year Ended 12/31/09
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income	$	23,870,202		$	19,821,911
Net realized gain on investments and foreign currency		8,763,961			2,769,225
Net change in unrealized appreciation (depreciation) on investments and foreign currency		13,352,510			24,535,497
Net increase from operations		45,986,673			47,126,633
	��
DISTRIBUTIONS TO SHAREHOLDERS (Note 8):
From net investment income		(24,015,126	)		(19,892,958	)
From net realized gain on investments		(3,214,343	)		—
Total distributions to shareholders		(27,229,469	)		(19,892,958	)
CAPITAL STOCK ISSUED AND REPURCHASED:
Net increase from capital share transactions (Note 5)		121,289,798			27,443,626
Net increase in net assets		140,047,002			54,677,301
NET ASSETS:
Beginning of year		395,308,345			340,631,044
End of year (including distributions in excess of net investment income of $28,376 and undistributed net investment income of $321,747, respectively)	$	535,355,347		$	395,308,345

The accompanying notes are an integral part of the financial statements. 19

Financial Highlights

				For the Years Ended
	12/31/10			12/31/09			12/31/08			12/31/07			12/31/06
Per share data (for a share outstanding throughout each year):
Net asset value - Beginning of year		$10.49			$9.66			$10.02			$9.98			$9.89
Income (loss) from investment operations:
Net investment income		0.55	1		0.57	1		0.42			0.40			0.37
Net realized and unrealized gain (loss) on investments		0.51			0.82			(0.32	)		0.03			0.08
Total from investment operations		1.06			1.39			0.10			0.43			0.45
Less distributions to shareholders: From net investment income		(0.52	)		(0.56	)		(0.45	)		(0.39	)		(0.36	)
From net realized gain on investments		(0.07	)		—			(0.01	)		—			—
Total distributions to shareholders		(0.59	)		(0.56	)		(0.46	)		(0.39	)		(0.36	)
Net asset value - End of year		$10.96			$10.49			$9.66			$10.02			$9.98
Net assets - End of year (000’s omitted)		$535,355			$395,308			$340,631			$278,494			$224,145
Total return2		10.18%			14.35%			1.24%			4.34%			4.59%
Ratios (to average net assets)/ Supplemental Data:
Expenses*		0.76%			0.78%			0.80%			0.81%			0.83%
Net investment income		4.92%			5.60%			4.84%			4.20%			3.95%
Portfolio turnover		31%			72%			63%			341%			315%
*The investment advisor did not impose all or a portion of its management fees, CCO fees, fund accounting and transfer agent fees and other fees in some years and in some years paid a portion of the Series’ expenses. If these expenses had been incurred by the Series, the expense ratio (to average net assets) would have been increased by the following amounts:
		0.00%	3		0.00%	3		N/A			N/A			N/A

¹Calculated based on average shares outstanding during the year.

²Represents aggregate total return for the periods indicated, and assumes reinvestment of all distributions. Total return would have been lower had certain expenses not been waived or reimbursed during the periods. Periods less than one year are not annualized.

³Less than 0.01%.

20 The accompanying notes are an integral part of the financial statements.

Notes to Financial Statements

1. ORGANIZATION

Core Plus Bond Series (the “Series”) is a no-load diversified series of Manning & Napier Fund, Inc. (the “Fund”). The Fund is organized in Maryland and is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company.

The Series’ investment objective is to provide long-term total return by investing primarily in bonds and other financial instruments, including derivatives, with economic characteristics similar to bonds.

The Fund’s Advisor is Manning & Napier Advisors, Inc. (the “Advisor”). Shares of the Series are offered to investors, clients and employees of the Advisor and its affiliates. The total authorized capital stock of the Fund consists of 10.0 billion shares of common stock each having a par value of $0.01. As of December 31, 2010, 6.2 billion shares have been designated in total among 29 series, of which 125 million have been designated as Core Plus Bond Series Class A common stock.

2. SIGNIFICANT ACCOUNTING POLICIES

Security Valuation

Portfolio securities, including domestic equities, foreign equities, warrants and options, listed on an exchange other than the NASDAQ National Market System are valued at the latest quoted sales price of the exchange on which the security is primarily traded. Securities not traded on valuation date or securities not listed on an exchange are valued at the latest quoted bid price provided by the Fund’s pricing service. Securities listed on the NASDAQ National Market System are valued in accordance with the NASDAQ Official Closing Price.

Debt securities, including government bonds, foreign bonds, asset-backed securities, structured notes, supranational obligations, sovereign bonds, corporate bonds and mortgage-backed securities will normally be valued on the basis of evaluated bid prices provided directly by an independent pricing service. The pricing services use multiple valuation techniques to determine fair value. In instances where sufficient market activity exists, the pricing services may utilize a market-based approach through which quotes from market makers are used to determine fair value. In instances where sufficient market activity may not exist or is limited, the pricing services also utilize proprietary valuation models which may consider market characteristics such as benchmark yield curves, option-adjusted spreads, credit spreads, estimated default rates, coupon rates, anticipated timing of principal repayments, underlying collateral, and other unique security features in order to estimate the relevant cash flows, which are then discounted to calculate the fair value. Certain investments in securities held by the Series may be valued on a basis of a price provided directly by a principal market maker. These prices may differ from the value that would have been used had a broader market for securities existed.

Municipal securities will normally be valued on the basis of market valuations provided by an independent pricing service that utilizes the latest price quotations and a matrix system (which considers such factors as security prices of similar securities, yields, maturities and ratings).

Short-term investments that mature in sixty days or less are valued at amortized cost, which approximates market value. Investments in open-end investment companies are valued at their net asset value per share on valuation date.

Volume and level of activity in established markets for an asset or liability are evaluated to determine whether recent transactions and quoted prices are determinative of fair value. Where there have been significant decreases in volume and level of activity, further analysis and adjustment may be necessary to estimate fair value. The Series measures fair value in these instances by the use of inputs and valuation techniques which may be based upon current market prices of securities that are comparable in coupon, rating, maturity and industry and/or expectation of future cash flows. As a result of trading in relatively thin markets and/or markets that experience significant volatility,

21

Notes to Financial Statements

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

Security Valuation (continued)

the prices used by the Series to value these securities may differ from the value that would be realized if these securities were sold, and the differences could be material.

Securities for which representative valuations or prices are not available from the Fund’s pricing service may be valued at fair value. Due to the inherent uncertainty of valuations of such securities, the fair value may differ significantly from the values that would have been used had a ready market for such securities existed. If trading or events occurring after the close of the principal market in which securities are traded are expected to materially affect the value of those securities, then they may be valued at their fair value, taking this trading or these events into account. Fair value is determined in good faith by the Advisor under procedures approved by and under the general supervision and responsibility of the Fund’s Board of Directors (the “Board”).

Various inputs are used in determining the value of the Series’ assets or liabilities carried at market value. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical assets and liabilities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.). Level 3 includes significant unobservable inputs (including the Series’ own assumptions in determining the fair value of investments). The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

The following is a summary of the valuation levels used for major security types as of December 31, 2010 in valuing the Series’ assets or liabilities carried at market value:

		$00000,000,000			$00000,000,000		$00000,000,000			$00000,000,000
Description	Total			Level  1		Level  2			Level  3
Assets:
Equity securities*	$	—		$	—	$	—		$	—
Preferred securities		11,839,767			—		11,839,767			—
Debt securities:
U.S. Treasury and other U.S. Government agencies		35,559,594			—		35,559,594			—
States and political subdivisions (municipals)		2,559,200			—		2,559,200			—
Corporate debt		426,707,796			—		426,707,796			—
Convertible corporate debt		6,477,187			—		6,477,187			—
Asset backed securities		6,183,605			—		6,183,605			—
Commercial mortgage backed securities		18,461,153			—		18,461,153			—
Foreign government bonds		3,432,175			—		3,432,175			—
Mutual funds		17,081,310			17,081,310		—			—
Other financial instruments**:		—			—		—			—
Total assets:		528,301,787			17,081,310		511,220,477			—
Liabilities:
Other financial instruments**: Forward foreign currency exchange contracts		(75,691	)		—		(75,691	)		—
Total liabilities:		(75,691	)		—		(75,691	)		—
Total	$	528,226,096		$	17,081,310	$	511,144,786		$	—

22

Notes to Financial Statements

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

Security Valuation (continued)

The following table is a reconciliation of Level 3 investments for which significant unobservable inputs were used to determine fair value:

Level 3 Reconciliation	Corporate Debt
Balance as of December 31, 2009 (market value)	$	244,111
Accrued discounts/premiums		2,483
Change in unrealized appreciation/ depreciation		(1,848	)
Net realized gain		44,810
Net purchases/sales		(289,556	)
Balance as of December 31, 2010 (market value)	$	—

*Includes common stock, warrants and rights. Please see the Investment Portfolio for industry classification.

**Other financial instruments are derivative instruments not reflected in the Investment Portfolio, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument.

There were no Level 3 securities held by the Series as of December 31, 2010.

The Fund’s policy is to recognize transfers in and transfers out of the valuation levels as of the beginning of the reporting period. There were no significant transfers between Level 1 and Level 2 during the year ended December 31, 2010.

Additional disclosure surrounding the activity in Level 3 fair value measurement will be effective for fiscal years beginning after December 15, 2010. Management has concluded that this will not have a material impact on the Series’ financial statements.

Security Transactions, Investment Income and Expenses

Security transactions are accounted for on trade date. Dividend income is recorded on the ex-dividend date, except that if the ex-dividend date has passed, certain dividends from foreign securities are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends, if any, are recorded at the fair market value of the securities received. Interest income, including amortization of premium and accretion of discounts using the effective interest method, is earned from settlement date and accrued daily.

Expenses are recorded on an accrual basis. Most expenses of the Fund can be attributed to a specific series. Expenses which cannot be directly attributed are apportioned among the series in the Fund in such a manner as deemed equitable by the Fund’s Board, taking into consideration, among other things, the nature and type of expense.

The Series uses the identified cost method for determining realized gain or loss on investments for both financial statement and federal income tax reporting purposes.

Foreign Currency Translation

The books and records of the Series are maintained in U.S. dollars. Foreign currencies, investments and other assets and liabilities are translated into U.S. dollars at the current exchange rates. Purchases and sales of investment securities and income and expenses are translated on the respective dates of such transactions. The Series does not isolate realized and unrealized gains and losses attributable to changes in the exchange rates from gains and losses that arise from changes in the market value of investments. Such fluctuations are included with net realized and unrealized gain or loss on investments. Net realized foreign currency gains and losses represent foreign currency

23

Notes to Financial Statements

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

Foreign Currency Translation (continued)

gains and losses between trade date and settlement date on securities transactions, gains and losses on disposition of foreign currencies and the difference between the amount of income and foreign withholding taxes recorded on the books of the Series and the amounts actually received or paid.

Forward Foreign Currency Exchange Contracts

The Series may purchase or sell forward foreign currency exchange contracts in order to hedge a portfolio position or specific transaction. Risks may arise if the counterparties to a contract are unable to meet the terms of the contract or if the value of the foreign currency moves unfavorably.

All forward foreign currency exchange contracts are adjusted daily by the exchange rate of the underlying currency and, for financial statement purposes, any gain or loss is recorded as unrealized gain or loss until a contract has been closed. Realized and unrealized gain or loss arising from a transaction is included in net realized and unrealized gain (loss) on investments.

The Series may regularly trade forward foreign currency exchange contracts with off-balance sheet risk in the normal course of its investing activities to assist in managing exposure to changes in foreign currency exchange rates.

The notional or contractual amount of these instruments represents the investment the Series has in forward foreign currency exchange contracts and does not necessarily represent the amounts potentially at risk. The measurement of the risks associated with forward foreign currency exchange contracts is meaningful only when all related and offsetting transactions are considered. Investments in forward foreign currency exchange contacts held by the Series on December 31, 2010 are shown at the end of the Investment Portfolio, which is indicative of volume of derivative activity during the period.

Securities Purchased on a When-Issued Basis or Forward Commitment

The Series may purchase securities on a when-issued basis or forward commitment. These transactions involve a commitment by the Series to purchase securities for a predetermined price with payment and delivery taking place beyond the customary settlement period. When such purchases are outstanding, the Series will designate liquid assets in an amount sufficient to meet the purchase price. When purchasing a security on a delayed delivery basis, the Series assumes the rights and risks of ownership of the security, including the risk of price and yield fluctuations, and takes such fluctuations into account when determining its net asset value. The Series may sell the when-issued securities before they are delivered, which may result in a capital gain or loss. No such investments were held by the Series on December 31, 2010.

In connection with its ability to purchase or sell securities on a forward commitment basis, the Series may enter into forward roll transactions principally using To Be Announced (TBA) securities. Forward roll transactions require the sale of securities for delivery in the current month, and a simultaneous agreement to repurchase substantially similar (same type, coupon and maturity) securities on a specified future date. Risks of entering into forward roll transactions include the potential inability of the counterparty to meet the terms of the agreement; the potential of the Series to receive inferior securities at redelivery as compared to the securities sold to the counterparty; counterparty credit risk; and the potential pay down speed variance between the mortgage-backed pools. During the roll period, the Series forgoes principal and interest paid on the securities. The Series accounts for such dollar rolls as purchases and sales. Information regarding securities purchased on a when-issued basis is included in the Series’ Investment Portfolio. No such investments were held by the Series on December 31, 2010.

24

Notes to Financial Statements

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

Restricted Securities

Restricted securities are purchased in private placement transactions, are not registered under the Securities Act of 1933, as amended, and may have contractual restrictions on resale. Information regarding restricted securities is included at the end of the Series’ Investment Portfolio.

Illiquid Securities

A security may be considered illiquid if so deemed in good faith by the Advisor under procedures approved by and under the general supervision and responsibility of the Fund’s Board. Securities that are illiquid are marked with the applicable footnote on the Investment Portfolio. No such investments were held by the Series on December 31, 2010.

Federal Taxes

The Series’ policy is to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies. The Series is not subject to federal income tax or excise tax to the extent that the Series distributes to shareholders each year its taxable income, including any net realized gains on investments, in accordance with requirements of the Internal Revenue Code. Accordingly, no provision for federal income tax or excise tax has been made in the financial statements.

Management evaluates its tax positions to determine if the tax positions taken meet the minimum recognition threshold in connection with accounting for uncertainties in income tax positions taken or expected to be taken for the purposes of measuring and recognizing tax liabilities in the financial statements. Recognition of tax benefits of an uncertain tax position is required only when the position is “more likely than not” to be sustained assuming examination by taxing authorities. At December 31, 2010, the Series has recorded no liability for net unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken in future tax returns.

The Series files income tax returns in the U.S. federal jurisdiction, various states and foreign jurisdictions, as required. No income tax returns are currently under investigation. The statute of limitations on the Series’ tax returns remains open for the years ended December 31, 2007 through December 31, 2010. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.

Additionally, based on the Fund’s understanding of the tax rules and rates related to income, gains and transactions for foreign jurisdictions in which it invests, the Series will provide for foreign taxes, and where appropriate, deferred foreign tax.

Distributions of Income and Gains

Distributions to shareholders of net investment income and net realized gains are made annually. An additional distribution may be necessary to avoid taxation of the Series. Distributions are recorded on the ex-dividend date.

Indemnifications

The Fund’s organizational documents provide former and current directors and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund’s maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.

Other

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of

25

Notes to Financial Statements

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

Other (continued)

assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.

3. TRANSACTIONS WITH AFFILIATES

The Fund has an Investment Advisory Agreement (the “Agreement”) with the Advisor, for which the Series pays a fee, computed daily and payable monthly, at an annual rate of 0.70% of the Series’ average daily net assets.

Under the Agreement, personnel of the Advisor provide the Series with advice and assistance in the choice of investments and the execution of securities transactions, and otherwise maintain the Series’ organization. The Advisor also provides the Fund with necessary office space and fund administration and support services. The salaries of all officers of the Fund (except a percentage of the Fund’s Chief Compliance Officer’s salary, which is paid by the Fund), and of all Directors who are “affiliated persons” of the Fund, or of the Advisor, and all personnel of the Fund, or of the Advisor, performing services relating to research, statistical and investment activities, are paid by the Advisor. Each “non-affiliated” Director receives an annual stipend, which is allocated among all the active series of the Fund. In addition, these Directors also receive a fee per Board meeting attended plus a fee for each committee meeting attended.

The Advisor has contractually agreed, until at least April 30, 2012, to waive its fee and, if necessary, pay other operating expenses of the Series in order to maintain total direct annual fund operating expenses for the Series at no more than 0.90% of average daily net assets each year. For the year ended December 31, 2010, the Advisor voluntarily waived fees of $758, which is included as a reduction of expenses on the Statement of Operations. The Advisor is not eligible to recoup any expenses that have been waived or reimbursed in prior years.

Manning & Napier Investor Services, Inc., a registered broker-dealer affiliate of the Advisor, acts as distributor for the Fund’s shares. The services of Manning & Napier Investor Services, Inc. are provided at no additional cost to the Series.

The Advisor has agreements with PNC Global Investment Servicing (U.S.) Inc. (“PNCGIS”) under which PNCGIS serves as sub-accountant services agent and sub-transfer agent. The Fund pays the Advisor an annual fee related to fund accounting and administration of 0.0175% on the first $3 billion of average daily net assets (excluding Target Series); 0.015% on the next $3 billion of average daily net assets (excluding Target Series); and 0.01% of the average daily net assets in excess of $6 billion (excluding Target Series); plus a base fee of $25,500 per Series. Transfer Agent fees are charged to the Fund on a per account basis. Additionally, certain transaction- and cusip-based fees and out-of-pocket expenses, including charges for reporting relating to the Fund’s compliance program, are charged.

Effective July 1, 2010, PNCGIS was sold to The Bank of New York Mellon Corporation, the Series’ custodian. At the close of the sale, PNCGIS changed its name to BNY Mellon Investment Servicing (U.S.) Inc. (“BNY”).

Expenses not directly attributable to a Series are allocated based on each Series’ relative net assets or number of accounts, depending on the expense.

4. PURCHASES AND SALES OF SECURITIES

For the year ended December 31, 2010, purchases and sales of securities, other than U.S. Government securities and short-term securities, were $226,721,358 and $103,347,523, respectively. Purchases and sales of U.S. Government securities, other than short-term securities, were $39,274,428 and $44,027,767, respectively.

26

Notes to Financial Statements

5. CAPITAL STOCK TRANSACTIONS

Transactions in shares of Core Plus Bond Series were:

	For the Year Ended 12/31/10						For the Year Ended 12/31/09
	Shares			Amount			Shares			Amount
Sold		12,957,005		$	142,303,123			5,159,453		$	53,012,979
Reinvested		2,483,553			26,822,714			1,861,873			19,585,357
Repurchased		(4,296,032	)		(47,836,039	)		(4,577,661	)		(45,154,710	)
Total		11,144,526		$	121,289,798			2,443,665		$	27,443,626

Substantially all of the Series’ shares represent investments by fiduciary accounts over which the Advisor has sole investment discretion.

6. FINANCIAL INSTRUMENTS

The Series may trade in instruments including written and purchased options, forward foreign currency exchange contracts and futures contracts and other derivatives in the normal course of investing activities to assist in managing exposure to various market risks. Investments in these instruments may subject the Series to various elements of risk, which may involve, to a varying degree, elements of risk in excess of the amounts recognized for financial statement purposes. These risks include: the risk that changes in the value of a derivative may not correlate perfectly with the underlying asset, rate or index, counterparty credit risk related to over the counter derivatives counterparties’ failure to perform under contract terms, liquidity risk related to the lack of a liquid market for these contracts allowing the fund to close out its position(s) and documentation risk relating to disagreement over contract terms. No such investments were held by the Series during the year ended December 31, 2010, except forward foreign currency exchange contracts, as shown at the end the Investment Portfolio.

7. FOREIGN SECURITIES

Investing in securities of foreign companies and foreign governments involves special risks and considerations not typically associated with investing in securities of domestic companies and the U.S. Government. These risks include revaluation of currencies and future adverse political and economic developments. Moreover, securities of foreign companies and foreign governments and their markets may be less liquid and their prices more volatile than those of comparable domestic companies and the U.S. Government.

8. FEDERAL INCOME TAX INFORMATION

The amount and characterization of certain income and capital gains to be distributed are determined in accordance with federal income tax regulations, which may differ from accounting principles generally accepted in the United States of America. These differences are primarily due to differing book and tax treatments in the timing of the recognition of net investment income or gains and losses, including foreign currency gains and losses, investments in hybrid securities, foreign currency contracts and post-October losses. The Series may periodically make reclassifications among its capital accounts to reflect income and gains available for distribution (or available capital loss carryovers) under income tax regulations without impacting the Series’ net asset value. Any such reclassifications are not reflected in the financial highlights.

27

Notes to Financial Statements

8. FEDERAL INCOME TAX INFORMATION (continued)

The tax character of distributions paid were as follows:

	For the Year Ended 12/31/10		For the Year Ended 12/31/09
Ordinary income	$	25,263,864	$	19,892,958
Long-term capital gains		1,965,605		—

At December 31, 2010, the tax basis of distributable earnings and the net unrealized appreciation based on the identified cost of investments for federal income tax purposes:

Cost for federal income tax purposes	$	494,545,149
Unrealized appreciation	$	37,215,210
Unrealized depreciation		(3,458,572	)
Net unrealized appreciation	$	33,756,638
Undistributed ordinary income		41,690
Undistributed long-term gains		3,188,556

The capital loss carryover utilized in the current year was $2,448,880.

28

Report of Independent Registered Public Accounting Firm

To the Board of Directors of Manning & Napier Fund, Inc. and Shareholders of Core Plus Bond Series:

In our opinion, the accompanying statement of assets and liabilities, including the investment portfolio (except for credit ratings), and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the Core Plus Bond Series (a series of Manning & Napier Fund, Inc., hereafter referred to as the “Series”) at December 31, 2010, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Series’ management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2010 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

New York, New York

February 22, 2011

29

Supplemental Tax Information (unaudited)

All designations are based on financial information available as of the date of this annual report and, accordingly are subject to change.

For federal income tax purposes, the Series designates for the current fiscal year $911,632 or, if different, the maximum amount allowable under the tax law as qualified dividend income.

Pursuant to Section 852 of the Internal Revenue Code, as amended, the Series hereby designates $1,965,605 as capital gains for its taxable year ended December 31, 2010, or if different, the maximum allowable under tax law.

For corporate shareholders, the percentage of investment income (dividend income plus short-term gains, if any) that qualifies for the dividends received deduction for the current fiscal year is 3.63%, or if different, the maximum allowable under tax law.

30

Renewal of Investment Advisory Agreement (unaudited)

At the Manning & Napier Fund, Inc. (the “Fund”) Board of Directors’ (the “Board”) meeting, held on November 17, 2010, the Investment Advisory Agreement (the “Agreement”) between the Fund and Manning & Napier Advisors, Inc. (the “Advisor”) was reviewed by the Board for renewal. In connection with the decision whether to renew the Agreement, a variety of material was prepared for and reviewed by the Board.

Representatives of the Advisor attended the meeting and presented additional oral and written information to the Board to assist the Board in its considerations. The discussion immediately below outlines the materials and information presented to the Board in connection with the Board’s 2010 Annual Review of the Agreement and the conclusions made by the Directors when determining to continue the Agreement.

• The Board considered the services provided by the Advisor under the Agreement including, among others: deciding what securities to purchase and sell for each Series; arranging for the purchase and sale of such securities by placing orders with broker-dealers; administering the affairs of the Fund (including the books and records of the Fund not maintained by third party service providers such as the custodian or sub-transfer agent); arranging for the insurance coverage for the Fund; and supervising the preparation of tax returns, SEC filings (including registration statements) and reports to shareholders for the Fund. The Board also considered the nature and quality of such services provided under the Agreement in light of the Advisor’s services provided to the Fund for 24 years. The Board discussed the quality of these services with representatives from the Advisor and concluded that the Advisor was performing its services to the Fund required under the Agreement in a reasonable manner.

• The Board considered the investment performance of the various Series of the Fund. The investment performance for each Series was reviewed on a cumulative basis since inception and on a one year basis. In addition, annualized performance for the following time periods was considered: inception, three year, five year, ten year, and current market cycle. A market cycle includes periods of both rising and falling markets. Returns for established benchmark indices for each Series were provided for each time period. The Board noted that the various Series were competitive against their respective benchmarks and/or peer groups over various time periods, but in particular over the full market cycle period relevant for the Series. In addition, the Board considered at the meeting (and considers on a quarterly basis) a peer group performance analysis consisting of Morningstar universes of mutual funds with similar investment objectives. The Board discussed the performance with representatives from the Advisor and concluded that the investment performance of each of the Fund’s Series was reasonable based on the Fund’s actual performance and comparative performance, especially performance over the current market cycle.

• The Board considered the costs of the Advisor’s services and the profits of the Advisor as they relate to the Advisor’s services to the Fund under the Agreement. In reviewing the Advisor’s costs and profits, the Board discussed the Advisor’s revenues generated from the Fund (on both an actual and adjusted basis) and its expenses associated with providing the services under the Agreement. In addition, the Board reviewed the Advisor’s expenses associated with Fund activities outside of the Agreement (such as expense reimbursements pursuant to expense caps and payments made by the Advisor to third party platforms on which shares of the Fund are available for purchase). It was noted by representatives of the Advisor that 11 of the 27 active Series of the Fund are currently experiencing expenses above the capped expense ratios. After discussing the above costs and profits, the Board concluded that the Advisor’s profitability relating to its services provided under the Agreement was reasonable.

• The Board considered the fees and expenses of the various Series of the Fund. The Advisor presented the advisory fees and total expenses for each Series, including the advisory fee adjusted for any expense waivers or reimbursements (either contractual or voluntary) paid by the Advisor. The advisory fees and expense ratios of each Series were compared to an average (on both a mean and median basis) of similar funds as disclosed on the Morningstar database. Representatives of the Advisor discussed with the Board the levels of its advisory

31

Renewal of Investment Advisory Agreement (unaudited)

fee for each Series of the Fund and as compared to the median and mean advisory fees for similar funds as listed on Morningstar. Expense ratios for every Series, except the Pro-Blend’s Class R and Class C, and Target Class R and Class C, are currently below the median and mean for similar funds as listed on Morningstar. Based on their review of the information provided, the Board concluded that the fees and expenses of each Series of the Fund were reasonable on a comparative basis.

• The Board also considered the other benefits the Advisor derives from its relationship with the Fund. Such other benefits include certain research products provided by soft dollars. Given the level of soft dollar transactions involving the Fund, the Board concluded that these additional benefits to the Advisor were reasonable.

• In addition to the factors described above, the Board considered the Advisor’s personnel, investment strategies, policies and procedures relating to compliance with personal securities transactions, and reputation, expertise and resources in domestic and foreign financial markets. The Board concluded that these factors support the conclusion that the Advisor performs its services in a reasonable manner.

• The Board did not consider economies of scale at this time because of the multiple uses of the Fund (for the Advisor’s discretionary investment account clients in addition to direct investors), the current profitability of the Advisor’s services to the Fund under the Agreement, and the overall size of the Fund complex.

Based on the Board’s deliberations and their evaluation of the information described above, the Board, including a majority of Directors that are not “interested persons” as defined in the Investment Company Act of 1940, concluded that the compensation under the Agreement was fair and reasonable in light of the services and expenses and such other matters as the Directors considered to be relevant in the exercise of their reasonable judgment. Accordingly, the Board approved the renewal of the Agreement. In the course of their deliberations, the Directors did not identify any particular information that was all important or controlling.

32

Directors’ and Officers’ Information (unaudited)

The Statement of Additional Information provides additional information about the Fund’s directors and officers and can be obtained without charge by calling 1-800-466-3863, at www.manningnapieradvisors.com, or on the EDGAR Database on the SEC Internet web site (http:// www.sec.gov). The following chart shows certain information about the Fund’s officers and directors, including their principal occupations during the last five years. Unless specific dates are provided, the individuals have held the listed positions for longer than five years.

INTERESTED DIRECTOR/OFFICER
Name:	B. Reuben Auspitz*
Address:	290 Woodcliff Drive Fairport, NY 14450
Age:	63
Current Position(s) Held with Fund:	Principal Executive Officer, President, Chairman & Director
Term of Office1 & Length of Time Served:	Indefinite - Director since 1984; Vice President 1984 - 2003; President since 2004; Principal Executive Officer since 2002
Principal Occupation(s) During Past 5 Years:	Executive Vice President; Executive Group Member**; Chief Compliance Officer since 2004; Vice Chairman since June 2010; Co-Executive Director from 2003-2010 - Manning & Napier Advisors, Inc. President; Director - Manning & Napier Investor Services, Inc. Holds or has held one or more of the following titles for various subsidiaries and affiliates: President, Vice President, Director, Chairman, Treasurer, Chief Compliance Officer or Member.
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
INDEPENDENT DIRECTORS
Name:	Paul A. Brooke
Address:	290 Woodcliff Drive Fairport, NY 14450
Age:	65
Current Position(s) Held with Fund:	Director, Audit Committee Member, Governance & Nominating Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 2007
Principal Occupation(s) During Past 5 Years:	Chairman & CEO, Alsius Corp. (investments); Managing Member, PMSV Holdings LLC (investments)
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	Incyte Corp. (2000-present) ViroPharma, Inc. (2000-present) HLTH Corp. (2000-present) Cheyne Capital International (2000-present) MPM Bio-equities (2000-present) GMP Companies (2000-present) HoustonPharma (2000-present)
Name:	Richard M. Hurwitz
Address:	290 Woodcliff Drive Fairport, NY 14450
Age:	47
Current Position(s) Held with Fund:	Director, Audit Committee Member, Governance & Nominating Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 2009
Principal Occupation(s) During Past 5 Years:	Chief Executive Officer, Pictometry International Corp. since August 2010 (provider of georeferenced, aerial image libraries and related software) Managing Partner (2006-July 2010) - Aegis Investment Partners, LLC (investments); Founder and Managing Partner (2004-2005) - Village Markets, LLC (groceries)
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	Pictometry International Corp. (2000-2010) Pioneering Technologies (2006-2009) Vensearch Capital Corp. (2003-2007)

33

Directors’ and Officers’ Information (unaudited)

INDEPENDENT DIRECTORS (continued)
Name:	Stephen B. Ashley
Address:	290 Woodcliff Drive Fairport, NY 14450
Age:	70
Current Position(s) Held with Fund:	Director, Audit Committee Member, Governance & Nominating Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 1996
Principal Occupation(s) During Past 5 Years:	Chairman, Director, President & Chief Executive Officer, The Ashley Group (property management and investment). Chairman (non-executive) 2004-2008; Director 1995-2008 - Fannie Mae (mortgage)
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	The Ashley Group (1995-2008) Genesee Corporation (1987-2007)
Name:	Peter L. Faber
Address:	290 Woodcliff Drive Fairport, NY 14450
Age:	72
Current Position(s) Held with Fund:	Director, Governance & Nominating Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 1987
Principal Occupation(s) During Past 5 Years:	Senior Counsel since 2006, Partner (1995 - 2006) - McDermott, Will & Emery LLP (law firm)
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	Partnership for New York City, Inc. (non-profit) New York Collegium (non-profit) Boston Early Music Festival (non-profit)
Name:	Harris H. Rusitzky
Address:	290 Woodcliff Drive Fairport, NY 14450
Age:	76
Current Position(s) Held with Fund:	Director, Audit Committee Member, Governance & Nominating Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 1985
Principal Occupation(s) During Past 5 Years:	President, The Greening Group (business consultants) since 1994; Partner, The Restaurant Group (restaurants) since 2006
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
OFFICERS
Name:	Jeffrey S. Coons, Ph.D., CFA
Address:	290 Woodcliff Drive Fairport, NY 14450
Age:	47
Current Position(s) Held with Fund:	Vice President
Term of Office1 & Length of Time Served:	Since 2004
Principal Occupation(s) During Past 5 Years:	President since 2010, Co-Director of Research since 2002, Executive Group Member** since 2003, - Manning & Napier Advisors, Inc. Holds one or more of the following titles for various subsidiaries and affiliates: President, Director, Treasurer or Senior Trust Officer.
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A

34

Directors’ and Officers’ Information (unaudited)

OFFICERS (continued)
Name:	Beth Galusha
Address:	290 Woodcliff Drive Fairport, NY 14450
Age:	49
Current Position(s) Held with Fund:	Assistant Chief Financial Officer
Term of Office1 & Length of Time Served:	Assistant Chief Financial Officer since 2010
Principal Occupation(s) During Past 5 Years:	Chief Financial Officer and Treasurer, Manning & Napier Advisors, Inc. Holds one or more of the following titles for various affiliates: Chief Financial Officer, Director, or Treasurer
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
Name:	Christine Glavin
Address:	290 Woodcliff Drive Fairport, NY 14450
Age:	44
Current Position(s) Held with Fund:	Principal Financial Officer, Chief Financial Officer
Term of Office1 & Length of Time Served:	Principal Financial Officer since 2002; Chief Financial Officer since 2001
Principal Occupation(s) During Past 5 Years:	Fund Reporting Manager, Manning & Napier Advisors, Inc. since 1997
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
Name:	Jodi L. Hedberg
Address:	290 Woodcliff Drive Fairport, NY 14450
Age:	43
Current Position(s) Held with Fund:	Corporate Secretary, Chief Compliance Officer, Anti-Money Laundering Compliance Officer
Term of Office1 & Length of Time Served:	Corporate Secretary since 1997; Chief Compliance Officer since 2004
Principal Occupation(s) During Past 5 Years:	Director of Compliance, Manning & Napier Advisors, Inc. and affiliates since 1990 (title change in 2005 from Compliance Manager to Director of Compliance); Corporate Secretary, Manning & Napier Investor Services, Inc. since 2006
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
Name:	Richard Yates
Address:	290 Woodcliff Drive Fairport, NY 14450
Age:	45
Current Position(s) Held with Fund:	Chief Legal Officer
Term of Office1 & Length of Time Served:	Chief Legal Officer since 2004
Principal Occupation(s) During Past 5 Years:	Counsel - Manning & Napier Advisors, Inc. & affiliates since 2000; Holds one or more of the following titles for various affiliates; Director or Corporate Secretary
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A

*Interested Director, within the meaning of the Investment Company Act of 1940 by reason of his position with the Fund’s investment advisor and distributor. Mr. Auspitz serves as the Executive Vice President and Director, Manning & Napier Advisors, Inc. and President and Director, Manning & Napier Investor Services, Inc., the Fund’s distributor.

**Prior to June 2010, the Executive Group, consisting of senior executive employee-owners, performed the duties of the Office of the Chief Executive of the Advisor. Effective June 2010, the Executive Group serves as an advisory board to the Chief Executive Officer.

¹The term of office for President, Vice President, Chief Financial Officer, Assistant Chief Financial Officer, Chief Legal Officer and Corporate Secretary is one year and until their respective successors are chosen and qualified. All other officers’ terms are indefinite.

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37

Literature Requests (unaudited)

Proxy Voting Policies and Procedures

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available, without charge, upon request:

By phone	1-800-466-3863
On the Securities and Exchange   Commission’s (SEC) web site	http://www.sec.gov

Proxy Voting Record

Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30^th is available, without charge, upon request:

By phone	1-800-466-3863
On the SEC’s web site	http://www.sec.gov

Quarterly Portfolio Holdings

The Series’ complete schedule of portfolio holdings for the 1^st and 3^rd quarters of each fiscal year are provided on Form N-Q, and are available, without charge, upon request:

By phone	1-800-466-3863
On the SEC’s web site	http://www.sec.gov

The Series’ Form N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

Prospectus and Statement of Additional Information (SAI)

The prospectus and SAI provide additional information about each Series, including charges, expenses and risks. These documents are available, without charge, upon request:

By phone	1-800-466-3863
On the SEC’s web site	http://www.sec.gov
On the Advisor’s web site	http://www.manning-napier.com

Additional information available at www.manning-napier.com

1. Fund Holdings - Month-End

2. Fund Holdings - Quarter-End

3. Shareholder Report - Annual

4. Shareholder Report - Semi-Annual

MNCRPLBND-12/10-AR

Management Discussion and Analysis (unaudited)

Dear Shareholders:

As well-defined swings in sentiment drove market fluctuations in 2010, the fixed income markets had favorable results for the year. While returns were broadly positive across sectors, high yield securities were the best performing area of the fixed income market for the year. With returns resembling those of equities, high yield bonds experienced stronger performance at the end of the year than the rest of the fixed income markets, which suffered losses in the fourth quarter.

The Bank of America Merrill Lynch U.S. High Yield, Cash Pay, BB-B Rated Index earned 14.50% during the year. While the High Yield Bond Series returned a solid 13.59% and outpaced the broader Bank of America Merrill Lynch U.S. Corporate, Government and Mortgage Index in its first full year of its most recent activation, the Series slightly trailed its benchmark during 2010.

Historically, the high yield market has provided strong total and relative returns for several years following a recession, as defaults recede and credit spreads tighten. Such favorable conditions were a main reason Manning & Napier launched the High Yield Bond Series in September 2009. Following the 2008 credit crisis, yields on high yield bonds have indeed retreated from extremes, helping the high yield market generate outsized gains in both 2009 and 2010. Given attractive valuations, low defaults, and expectations for modest growth and inflation, we believe the high yield market continues to present opportunities. Yields on below investment grade bonds remain relatively high, particularly as compared to Treasury yields, and spreads between the two have the potential for further tightening over the next few years. As bond prices rise when yields fall, the Series continues to look to take advantage of this market environment.

As of the end of 2010, the High Yield Bond Series had a relatively high allocation to the Communications, Non-Cyclical Consumer, and Energy sectors versus the benchmark. In contrast, the Series was underweight to the Basic Materials, Consumer Cyclical, Financial, and Utilities sectors as compared to the benchmark. The lower exposure to Financials hurt the Series’ relative performance during the past year, particularly in the first and third quarters.

The Series was also impacted by market events over the last twelve months. For instance, when European sovereign debt concerns escalated during the second quarter, exposure to the Euro detracted from the Series’ relative results. Meanwhile, the Series benefited from merger and acquisition activity that involved several holdings last year.

As the markets unfold in 2011, it will be important to monitor trends such as the financial condition of corporations, monetary policy, and pricing in the marketplace. With this mindset, Manning & Napier remains committed to our active and selective investment approach to fixed income. Staying focused on the fundamentals and maintaining our selective investment process helped us earn solid returns through the volatile markets of 2010, and we believe these qualities will remain important in the environment ahead.

As always, we appreciate your business.

Sincerely,

Manning & Napier Advisors, Inc.

1

Performance Update as of December 31, 2010 (unaudited)

	Average Annual Total Returns As of December 31, 2010
	One Year		Since Inception1
Manning & Napier Fund, Inc. - High Yield Bond Series2		13.59%		14.38%
Bank of America (BofA) Merrill Lynch U.S. High Yield, Cash Pay, BB-B Rated Index3		14.50%		17.34%

The following graph compares the value of a $10,000 investment in the Manning & Napier Fund, Inc. - High Yield Bond Series from its current activation¹ (9/14/09) to present (12/31/10) to the BofA Merrill Lynch U.S. High Yield, Cash Pay, BB-B Rated Index.

¹Performance numbers for the Series and Index are calculated from September 14, 2009, the Series’ current activation date.

²The Series’ performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of shares. The Series’ performance is historical and may not be indicative of future results. The performance returns shown are inclusive of the net expense ratio of the Series. For the year ended December 31, 2010, this annualized net expense ratio was 1.14%. The annualized gross expense ratio, which does not account for any voluntary or contractual waivers currently in effect, was 1.14% for the year ended December 31, 2010.

³The unmanaged BofA Merrill Lynch U.S. High Yield, Cash Pay, BB-B Rated Index (formerly a Merrill Lynch Index) is a market value weighted measure of BB and B rated corporate bonds with maturities of at least one-year. The Index returns assume reinvestment of coupons and, unlike Series returns, do not reflect any fees or expenses.

��

2

Shareholder Expense Example (unaudited)

As a shareholder of the Series, you may incur two types of costs: (1) transaction costs and (2) ongoing costs, including management fees and other Series expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Series and to compare these costs with the ongoing costs of investing in other mutual funds.

The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (July 1, 2010 to December 31, 2010).

Actual Expenses

The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Series’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Series’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid during the period. You may use this information to compare the ongoing costs of investing in the Series and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.

	Beginning Account Value 7/1/10	Ending Account Value 12/31/10	Expenses Paid During Period* 7/1/10-12/31/10
Actual	$1,000.00	$1,094.80	$6.18
Hypothetical (5% return before expenses)	$1,000.00	$1,019.31	$5.96

*Expenses are equal to the Series’ annualized expense ratio (for the six-month period) of 1.17%, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). Expenses are based on the most recent fiscal half year; therefore, the expense ratio stated above may differ from the expense ratio stated in the financial highlights, which is based on one-year data. The Series’ total return would have been lower had certain expenses not been waived during the period.

3

Portfolio Composition as of December 31, 2010 (unaudited)

4

Investment Portfolio - December 31, 2010

	Credit Rating1 (unaudited)		Principal Amount		Value (Note 2)
CORPORATE BONDS - 91.1%
Non-Convertible Corporate Bonds - 91.1%
Consumer Discretionary - 15.9%
Hotels, Restaurants & Leisure - 4.5%
Cedar Fair LP - Canada’s Wonderland Co. - Magnum Management Corp.2, 9.125%, 8/1/2018		B2	$	660,000	$	710,325
Scientific Games International, Inc.2, 7.875%, 6/15/2016		B1		1,450,000		1,446,375
Wendy’s - Arby’s Restaurants LLC, 10.00%, 7/15/2016		B3		1,700,000		1,844,500
Wyndham Worldwide Corp., 9.875%, 5/1/2014		Ba1		570,000		667,466
Wyndham Worldwide Corp., 6.00%, 12/1/2016		Ba1		2,260,000		2,364,943
						7,033,609
Media - 9.1%
Cablevision Systems Corp., 8.625%, 9/15/2017		B1		2,030,000		2,210,163
Columbus International, Inc. (Barbados)2, 11.50%, 11/20/2014		B2		1,770,000		1,964,700
Interactive Data Corp.2, 10.25%, 8/1/2018		Caa1		925,000		1,012,875
MDC Partners, Inc. (Canada), 11.00%, 11/1/2016		B2		955,000		1,052,887
Sirius XM Radio, Inc.2, 9.75%, 9/1/2015		Ba3		940,000		1,055,150
Unitymedia Hessen GmbH & Co. KG - Unitymedia NRW GmbH (Germany)2, 8.125%, 12/1/2017		B1		650,000		679,250
Unitymedia Hessen GmbH & Co. KG - Unitymedia NRW GmbH (Germany)2, 8.125%, 12/1/2017		B1	EUR	525,000		742,779
UPC Holding B.V. (Netherlands)2, 9.875%, 4/15/2018		B2	$	1,935,000		2,118,825
Virgin Media Finance plc (United Kingdom), 8.375%, 10/15/2019		Ba3		935,000		1,021,487
WMG Acquisition Corp., 9.50%, 6/15/2016		Ba2		1,105,000		1,185,113
XM Satellite Radio, Inc.2, 7.625%, 11/1/2018		B3		1,315,000		1,357,737
						14,400,966
Specialty Retail - 2.3%
Rent-A-Center, Inc.2, 6.625%, 11/15/2020		Ba3		1,600,000		1,592,000
Toys R Us Property Co., LLC, 8.50%, 12/1/2017		Ba1		1,885,000		2,026,375
						3,618,375
Total Consumer Discretionary						25,052,950
Consumer Staples - 3.9%
Beverages - 2.5%
CEDC Finance Corp. International, Inc.2, 9.125%, 12/1/2016		B1		1,885,000		2,002,813
Constellation Brands, Inc., 8.375%, 12/15/2014		Ba3		1,830,000		1,999,275
						4,002,088
Personal Products - 1.4%
Revlon Consumer Products Corp., 9.75%, 11/15/2015		B3		2,055,000		2,173,163
Total Consumer Staples						6,175,251
Energy - 20.1%
Energy Equipment & Services - 7.3%
Calfrac Holdings LP2, 7.50%, 12/1/2020		B2		1,595,000		1,614,937

The accompanying notes are an integral part of the financial statements. 5

Investment Portfolio - December 31, 2010

	Credit Rating1 (unaudited)			Principal Amount		Value (Note 2)
CORPORATE BONDS (continued)
Non-Convertible Corporate Bonds (continued)
Energy (continued)
Energy Equipment & Services (continued)
Cie Generale de Geophysique - Veritas (France), 7.50%, 5/15/2015		Ba3		$	2,000,000	$	2,035,000
Complete Production Services, Inc., 8.00%, 12/15/2016		B1			2,150,000		2,225,250
Hornbeck Offshore Services, Inc., 8.00%, 9/1/2017		Ba3			1,340,000		1,366,800
Key Energy Services, Inc., 8.375%, 12/1/2014		B1			1,150,000		1,213,250
Thermon Industries, Inc.2, 9.50%, 5/1/2017		B1			1,355,000		1,443,075
Trinidad Drilling Ltd. (Canada)2, 7.875%, 1/15/2019		B2			1,710,000		1,727,100
							11,625,412
Oil, Gas & Consumable Fuels - 12.8%
Aquilex Holdings LLC - Aquilex Finance Corp., 11.125%, 12/15/2016		Caa1			1,185,000		1,199,813
Arch Coal, Inc., 8.75%, 8/1/2016		B1			725,000		790,250
Arch Western Finance LLC, 6.75%, 7/1/2013		B1			611,000		617,110
Chaparral Energy, Inc., 8.875%, 2/1/2017		Caa1			1,495,000		1,517,425
Chesapeake Energy Corp., 9.50%, 2/15/2015		Ba3			2,075,000		2,339,562
Coffeyville Resources LLC - Coffeyville Finance, Inc.2, 9.00%, 4/1/2015		Ba3			604,000		646,280
Coffeyville Resources LLC - Coffeyville Finance, Inc.2, 10.875%, 4/1/2017		B3			640,000		688,000
Crosstex Energy LP - Crosstex Energy Finance Corp., 8.875%, 2/15/2018		B3			2,143,000		2,295,689
Linn Energy LLC - Linn Energy Finance Corp.2, 7.75%, 2/1/2021.		B2			1,455,000		1,491,375
MarkWest Energy Partners LP - MarkWest Energy Finance Corp., 6.75%, 11/1/2020		B1			1,550,000		1,550,000
Martin Midstream Partners LP - Martin Midstream Finance Corp., 8.875%, 4/1/2018		B	3		1,360,000		1,400,800
Niska Gas Storage US LLC - Niska Gas Storage Canada ULC2, 8.875%, 3/15/2018		B1			970,000		1,037,900
Plains Exploration & Production Co., 8.625%, 10/15/2019		B1			440,000		481,800
Targa Resources Partners LP - Targa Resources Partners Finance Corp., 8.25%, 7/1/2016		B1			1,410,000		1,487,550
Tesoro Corp., 9.75%, 6/1/2019		Ba1			1,940,000		2,148,550
Whiting Petroleum Corp., 7.00%, 2/1/2014		Ba3			485,000		509,250
							20,201,354
Total Energy							31,826,766
Financials - 11.5%
Capital Markets - 0.9%
Goldman Sachs Capital II4, 5.793%, 12/29/2049		Baa2			1,650,000		1,398,375

6 The accompanying notes are an integral part of the financial statements.

Investment Portfolio - December 31, 2010

	Credit Rating1 (unaudited)		Principal Amount		Value (Note 2)
CORPORATE BONDS (continued)
Non-Convertible Corporate Bonds (continued)
Financials (continued)
Commercial Banks - 0.5%
Wilmington Trust Corp., 8.50%, 4/2/2018		Ba1	$	755,000	$	861,834
Consumer Finance - 3.3%
American Express Co.4, 6.80%, 9/1/2066		Baa2		2,940,000		2,910,600
Credit Acceptance Corp.2, 9.125%, 2/1/2017		B1		2,185,000		2,294,250
						5,204,850
Insurance - 1.5%
Hartford Financial Services Group, Inc.4, 8.125%, 6/15/2038		Ba1		2,250,000		2,390,625
Real Estate Investment Trusts (REITS) - 4.3%
DuPont Fabros Technology LP, 8.50%, 12/15/2017		Ba2		2,495,000		2,669,650
Felcor Lodging LP, 10.00%, 10/1/2014		B2		1,370,000		1,534,400
Host Hotels & Resorts LP, 6.875%, 11/1/2014		BB3		665,000		684,950
Host Hotels & Resorts LP, 6.375%, 3/15/2015		Ba1		550,000		558,250
Omega Healthcare Investors, Inc., 7.50%, 2/15/2020		Ba2		1,335,000		1,403,419
						6,850,669
Real Estate Management & Development - 1.0%
CB Richard Ellis Services, Inc.2, 6.625%, 10/15/2020		Ba1		1,500,000		1,500,000
Total Financials						18,206,353
Health Care - 8.6%
Health Care Equipment & Supplies - 3.9%
Alere, Inc., 7.875%, 2/1/2016		B2		1,725,000		1,729,313
Alere, Inc., 9.00%, 5/15/2016		B3		1,323,000		1,362,690
Fresenius Medical Care Capital Trust IV, 7.875%, 6/15/2011		Ba3		965,000		981,887
Fresenius US Finance II, Inc.2, 9.00%, 7/15/2015		Ba1		1,885,000		2,158,325
						6,232,215
Health Care Providers & Services - 3.8%
BioScrip, Inc., 10.25%, 10/1/2015		B3		1,285,000		1,323,550
HCA, Inc., 7.875%, 2/15/2020		Ba3		1,170,000		1,251,900
Health Management Associates, Inc., 6.125%, 4/15/2016		BB3		1,935,000		1,954,350
LifePoint Hospitals, Inc.2, 6.625%, 10/1/2020		Ba1		1,500,000		1,488,750
						6,018,550
Life Sciences Tools & Services - 0.9%
PharmaNet Development Group, Inc.2, 10.875%, 4/15/2017		B3		1,350,000		1,404,000
Total Health Care						13,654,765
Industrials - 12.5%
Aerospace & Defense - 2.2%
BE Aerospace, Inc., 6.875%, 10/1/2020		Ba3		1,500,000		1,548,750
GeoEye, Inc., 9.625%, 10/1/2015		Ba3		945,000		1,067,850

The accompanying notes are an integral part of the financial statements. 7

Investment Portfolio - December 31, 2010

	Credit Rating1 (unaudited)		Principal Amount		Value (Note 2)
CORPORATE BONDS (continued)
Non-Convertible Corporate Bonds (continued)
Industrials (continued)
Aerospace & Defense (continued)
Kratos Defense & Security Solutions, Inc., 10.00%, 6/1/2017		B3	$	750,000	$	830,625
						3,447,225
Airlines - 1.8%
Continental Airlines, Inc.2, 6.75%, 9/15/2015		Ba2		1,495,000		1,539,850
Delta Air Lines, Inc.2, 9.50%, 9/15/2014		Ba2		1,176,000		1,280,370
						2,820,220
Building Products - 1.8%
Building Materials Corp. of America2, 6.875%, 8/15/2018		B1		825,000		816,750
Building Materials Corp. of America2, 7.50%, 3/15/2020		B1		645,000		656,287
Owens Corning, 9.00%, 6/15/2019		Ba1		1,140,000		1,337,441
						2,810,478
Commercial Services & Supplies - 2.2%
ACCO Brands Corp., 10.625%, 3/15/2015		B1		910,000		1,023,750
Clean Harbors, Inc., 7.625%, 8/15/2016		Ba2		1,072,000		1,139,000
Garda World Security Corp. (Canada)2, 9.75%, 3/15/2017		B3		1,290,000		1,383,525
						3,546,275
Industrial Conglomerates - 1.4%
GE Capital Trust I4, 6.375%, 11/15/2067		Aa3		2,250,000		2,221,875
Marine - 2.2%
Navios Maritime Holdings, Inc. - Navios Maritime Finance US, Inc. (Marshall Island), 8.875%, 11/1/2017		Ba3		2,195,000		2,376,087
United Maritime Group LLC - United Maritime Group Finance Corp., 11.75%, 6/15/2015		B3		1,185,000		1,187,963
						3,564,050
Road & Rail - 0.9%
RailAmerica, Inc., 9.25%, 7/1/2017		B1		773,000		849,334
Swift Services Holdings, Inc.2, 10.00%, 11/15/2018		Caa1		500,000		523,750
						1,373,084
Total Industrials						19,783,207
Information Technology - 3.8%
Communications Equipment - 2.0%
Alcatel-Lucent USA, Inc., 6.45%, 3/15/2029		B1		1,580,000		1,248,200
Hughes Network Systems LLC - HNS Finance Corp., 9.50%, 4/15/2014		B1		1,775,000		1,830,469
						3,078,669

8 The accompanying notes are an integral part of the financial statements.

Investment Portfolio - December 31, 2010

	Credit Rating1 (unaudited)		Principal Amount		Value (Note 2)
CORPORATE BONDS (continued)
Non-Convertible Corporate Bonds (continued)
Information Technology (continued)
Semiconductors & Semiconductor Equipment - 1.8%
Advanced Micro Devices, Inc., 8.125%, 12/15/2017		Ba3	$	645,000	$	683,700
Advanced Micro Devices, Inc.2, 7.75%, 8/1/2020		Ba3		760,000		788,500
MagnaChip Semiconductor S.A. - MagnaChip Semiconductor Finance Co., 10.50%, 4/15/2018		B2		1,360,000		1,434,800
						2,907,000
Total Information Technology						5,985,669
Materials - 5.9%
Chemicals - 2.0%
Ferro Corp., 7.875%, 8/15/2018		B2		1,470,000		1,550,850
Rhodia S.A. (France)2, 6.875%, 9/15/2020		B1		1,535,000		1,556,106
						3,106,956
Containers & Packaging - 1.5%
Reynolds Group Issuer, Inc. - Reynolds Group Issuer LLC2, 8.50%, 5/15/2018		Caa1		1,375,000		1,381,875
Reynolds Group Issuer, Inc. - Reynolds Group Issuer LLC2, 7.125%, 4/15/2019		Ba3		1,000,000		1,017,500
						2,399,375
Metals & Mining - 0.9%
Steel Dynamics, Inc., 7.75%, 4/15/2016		Ba2		1,300,000		1,368,250
Paper & Forest Products - 1.5%
Georgia-Pacific LLC2, 8.25%, 5/1/2016		Ba2		2,115,000		2,387,306
Total Materials						9,261,887
Telecommunication Services - 6.4%
Diversified Telecommunication Services - 4.2%
Clearwire Communications LLC - Clearwire Finance, Inc.2, 12.00%, 12/1/2015		B2		1,000,000		1,080,000
Clearwire Communications LLC - Clearwire Finance, Inc.2, 12.00%, 12/1/2015		B2		275,000		296,313
Inmarsat Finance plc (United Kingdom)2, 7.375%, 12/1/2017		Ba2		1,500,000		1,575,000
Intelsat Subsidiary Holding Co. S.A. (Bermuda)2, 8.875%, 1/15/2015		B3		1,395,000		1,426,387
Wind Acquisition Finance S.A. (Luxembourg)2, 11.75%, 7/15/2017		B2		1,800,000		2,029,500
Wind Acquisition Finance S.A. (Luxembourg)2, 7.25%, 2/15/2018.		Ba2		275,000		279,813
						6,687,013
Wireless Telecommunication Services - 2.2%
CC Holdings GS V LLC - Crown Castle GS III Corp.2, 7.75%, 5/1/2017		Baa3		1,315,000		1,436,637

The accompanying notes are an integral part of the financial statements. 9

Investment Portfolio - December 31, 2010

	Credit Rating (unaudited)		Principal Amount/ Shares		Value (Note 2)
CORPORATE BONDS (continued)
Non-Convertible Corporate Bonds (continued)
Telecommunication Services (continued)
Wireless Telecommunication Services (continued)
NII Capital Corp., 8.875%, 12/15/2019		B2	$	1,845,000	$	1,987,987
						3,424,624
Total Telecommunication Services						10,111,637
Utilities - 2.5%
Gas Utilities - 1.0%
Ferrellgas LP - Ferrellgas Finance Corp.2, 6.50%, 5/1/2021		Ba3		1,615,000		1,574,625
Independent Power Producers & Energy Traders - 1.5%
Mirant Mid Atlantic Pass-Through Trust, Series B, 9.125%, 6/30/2017		Ba1		779,047		837,476
Mirant Mid Atlantic Pass-Through Trust, Series C, 10.06%, 12/30/2028		Ba1		477,404		529,919
North American Energy Alliance LLC - North American Energy Alliance Finance Corp.2, 10.875%, 6/1/2016		Ba3		945,000		1,048,950
						2,416,345
Total Utilities						3,990,970
TOTAL CORPORATE BONDS (Identified Cost $137,487,774)						144,049,455
PREFERRED STOCKS - 2.6%
Financials - 2.6%
Commercial Banks - 0.9%
Wells Fargo & Co., Series K6, 7.98%		Baa3		1,335,000		1,408,425
Diversified Financial Services - 1.7%
Bank of America Corp., Series K6, 8.00%		Ba3		1,410,000		1,420,998
JPMorgan Chase & Co., Series 16, 7.90%		Baa1		1,275,000		1,355,312
						2,776,310
TOTAL PREFERRED STOCKS (Identified Cost $3,817,685)						4,184,735
MUTUAL FUNDS - 1.5%
iShares iBoxx High Yield Corporate Bond Fund (Identified Cost $2,235,307)				25,880		2,336,705

10 The accompanying notes are an integral part of the financial statements.

Investment Portfolio - December 31, 2010

	Shares		Value (Note 2)
SHORT-TERM INVESTMENTS - 3.2%
Dreyfus Cash Management, Inc. - Institutional Shares5, 0.14%, (Identified Cost $5,143,661)		5,143,661	$	5,143,661
TOTAL INVESTMENTS - 98.4% Identified Cost $148,684,427)				155,714,556
OTHER ASSETS, LESS LIABILITIES - 1.6%				2,466,755
NET ASSETS - 100%			$	158,181,311

EUR - Euro currency

¹Credit ratings from Moody’s (unaudited).

²Restricted securities - Investment in securities that are restricted as to public resale under the Securities Act of 1933, as amended. These securities have been sold under rule 144A and have been determined to be liquid under guidelines established by the Board of Directors. These securities amount to $56,255,865, or 35.6%, of the Series’ net assets as of December 31, 2010.

³Credit ratings from S&P (unaudited).

⁴The coupon rate is floating and is the stated rate as of December 31, 2010.

⁵Rate shown is the current yield as of December 31, 2010.

⁶The rate shown is the fixed rate as of December 31, 2010; the rate becomes floating in 2049.

The accompanying notes are an integral part of the financial statements. 11

Statement of Assets and Liabilities

December 31, 2010

ASSETS:
Investments, at value (identified cost $148,684,427) (Note 2)	$	155,714,556
Interest receivable		2,635,153
Receivable for fund shares sold		152,010
Dividends receivable		15,562
TOTAL ASSETS		158,517,281
LIABILITIES:
Accrued management fees (Note 3)		133,188
Accrued fund accounting and administration fees (Note 3)		7,725
Accrued transfer agent fees (Note 3)		1,510
Accrued Chief Compliance Officer service fees (Note 3)		243
Accrued directors’ fees (Note 3)		87
Payable for fund shares repurchased		133,941
Audit fees payable		34,834
Other payables and accrued expenses		24,442
TOTAL LIABILITIES		335,970
TOTAL NET ASSETS	$	158,181,311
NET ASSETS CONSIST OF:
Capital stock	$	147,331
Additional paid-in-capital		150,540,151
Undistributed net investment income		21,255
Accumulated net realized gain on investments, foreign currency and translation of other assets and liabilities		442,370
Net unrealized appreciation on investments, foreign currency and translation of other assets and liabilities		7,030,204
TOTAL NET ASSETS	$	158,181,311
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER SHARE - Class A ($158,181,311/14,733,147 shares)	$	10.74

12 The accompanying notes are an integral part of the financial statements.

Statement of Operations

For the Year Ended December 31, 2010

INVESTMENT INCOME:
Interest	$	10,674,449
Dividends		744,228
Total Investment Income		11,418,677
EXPENSES:
Management fees (Note 3)		1,439,394
Fund accounting and administration fees (Note 3)		58,379
Transfer agent fees (Note 3)		10,384
Directors’ fees (Note 3)		9,336
Chief Compliance Officer service fees (Note 3)		2,675
Custodian fees		9,775
Miscellaneous		114,150
Total Expenses		1,644,093
Less reduction of expenses (Note 3)		(758	)
Net Expenses		1,643,335
NET INVESTMENT INCOME		9,775,342
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY:
Net realized gain (loss) on Investments		3,928,488
Foreign currency and translation of other assets and liabilities		(46,171	)
		3,882,317
Net change in unrealized appreciation on Investments		4,695,592
Foreign currency and translation of other assets and liabilities		416
		4,696,008
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND FOREIGN CURRENCY		8,578,325
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	18,353,667

The accompanying notes are an integral part of the financial statements. 13

Statements of Changes in Net Assets

	For the Year Ended 12/31/10			For the Period 9/14/091 to 12/31/09
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income		$    9,775,342			$    1,590,736
Net realized gain on investments and foreign currency		3,882,317			450,110
Net change in unrealized appreciation on investments and foreign Currency		4,696,008			2,334,196
Net increase from operations		18,353,667			4,375,042
DISTRIBUTIONS TO SHAREHOLDERS (Note 8):
From net investment income		(10,050,478	)		(1,259,565	)
From net realized gain on investments		(3,847,008	)		(88,925	)
Total distributions to shareholders		(13,897,486	)		(1,348,490	)
CAPITAL STOCK ISSUED AND REPURCHASED:
Net increase from capital share transactions (Note 5)		26,046,907			124,651,671
Net increase in net assets		30,503,088			127,678,223
NET ASSETS:
Beginning of period		127,678,223			—
End of period (including undistributed net investment income of $21,255 and $325,982, respectively)		$158,181,311			$127,678,223

¹Commencement of operations.

14 The accompanying notes are an integral part of the financial statements.

Financial Highlights

	For the Year Ended 12/31/10		For the Period 9/14/091to 12/31/09
Per share data (for a share outstanding throughout each period):
Net asset value - Beginning of period		$10.37		$10.00
Income from investment operations:
Net investment income2		0.75		0.20
Net realized and unrealized gain on investments		0.66		0.28
Total from investment operations		1.41		0.48
Less distributions to shareholders:
From net investment income		(0.75)		(0.10)
From net realized gain on investments		(0.29)		(0.01)
Total distributions to shareholders		(1.04)		(0.11)
Net asset value - End of period		$10.74		$10.37
Net assets - End of period (000’s omitted)		$158,181		$127,678
Total return3		13.59%		4.82%
Ratios (to average net assets)/ Supplemental Data:
Expenses*		1.14%		1.20%4
Net investment income		6.79%		6.51%4
Portfolio turnover		54%		22%
*The investment advisor did not impose all or a portion of its management fees, CCO fees, fund accounting and transfer agent fees and other fees in some periods and in some periods paid a portion of the Series’ expenses. If these expenses had been incurred by the Series, the expense ratio (to average net assets) would have been increased by the following amounts:
		0.00%5		0.02%4

¹Commencement of operations.

²Calculated based on average shares outstanding during the year.

³Represents aggregate total return for the periods indicated, and assumes reinvestment of all distributions. Total return would have been lower had certain expenses not been waived or reimbursed during the periods. Periods less than one year are not annualized.

⁴Annualized.

⁵Less than 0.01%.

The accompanying notes are an integral part of the financial statements. 15

Notes to Financial Statements

1. ORGANIZATION

High Yield Bond Series (the “Series”) is a no-load non-diversified series of Manning & Napier Fund, Inc. (the “Fund”). The Fund is organized in Maryland and is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company.

The Series’ investment objective is to provide a high level of long-term total return by investing principally in non-investment grade fixed income securities that are issued by government and corporate entities.

The Fund’s Advisor is Manning & Napier Advisors, Inc. (the “Advisor”). On September 14, 2009 the Series resumed sales of shares to advisory clients and employees of the Advisor and its affiliates and directly to investors. The total authorized capital stock of the Fund consists of 10.0 billion shares of common stock each having a par value of $0.01. As of December 31, 2010, 6.2 billion shares have been designated in total among 29 series, of which 125 million have been designated as High Yield Bond Series Class A common stock.

2. SIGNIFICANT ACCOUNTING POLICIES

Security Valuation

Portfolio securities, including domestic equities, foreign equities, warrants and options, listed on an exchange other than the NASDAQ National Market System are valued at the latest quoted sales price of the exchange on which the security is primarily traded. Securities not traded on valuation date or securities not listed on an exchange are valued at the latest quoted bid price provided by the Fund’s pricing service. Securities listed on the NASDAQ National Market System are valued in accordance with the NASDAQ Official Closing Price.

Debt securities, including government bonds, foreign bonds, asset-backed securities, structured notes, supranational obligations, sovereign bonds, corporate bonds and mortgage-backed securities will normally be valued on the basis of evaluated bid prices provided directly by an independent pricing service. The pricing services use multiple valuation techniques to determine fair value. In instances where sufficient market activity exists, the pricing services may utilize a market-based approach through which quotes from market makers are used to determine fair value. In instances where sufficient market activity may not exist or is limited, the pricing services also utilize proprietary valuation models which may consider market characteristics such as benchmark yield curves, option-adjusted spreads, credit spreads, estimated default rates, coupon rates, anticipated timing of principal repayments, underlying collateral, and other unique security features in order to estimate the relevant cash flows, which are then discounted to calculate the fair value. Certain investments in securities held by the Series may be valued on a basis of a price provided directly by a principal market maker. These prices may differ from the value that would have been used had a broader market for securities existed.

Short-term investments that mature in sixty days or less are valued at amortized cost, which approximates market value. Investments in open-end investment companies are valued at their net asset value per share on valuation date.

Volume and level of activity in established markets for an asset or liability are evaluated to determine whether recent transactions and quoted prices are determinative of fair value. Where there have been significant decreases in volume and level of activity, further analysis and adjustment may be necessary to estimate fair value. The Series measures fair value in these instances by the use of inputs and valuation techniques which may be based upon current market prices of securities that are comparable in coupon, rating, maturity and industry and/or expectation of future cash flows. As a result of trading in relatively thin markets and/or markets that experience significant volatility, the prices used by the Series to value these securities may differ from the value that would be realized if these securities were sold, and the differences could be material.

Securities for which representative valuations or prices are not available from the Fund’s pricing service may be valued at fair value. Due to the inherent uncertainty of valuations of such securities, the fair value may differ significantly

16

Notes to Financial Statements

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

Security Valuation (continued)

from the values that would have been used had a ready market for such securities existed. If trading or events occurring after the close of the principal market in which securities are traded are expected to materially affect the value of those securities, then they may be valued at their fair value, taking this trading or these events into account. Fair value is determined in good faith by the Advisor under procedures approved by and under the general supervision and responsibility of the Fund’s Board of Directors (the “Board”).

Various inputs are used in determining the value of the Series’ assets or liabilities carried at market value. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical assets and liabilities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.). Level 3 includes significant unobservable inputs (including the Series’ own assumptions in determining the fair value of investments). The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

The following is a summary of the valuation levels used for major security types as of December 31, 2010 in valuing the Series’ assets or liabilities carried at market value:

Description	Total		Level 1		Level 2		Level  3
Assets:
Equity securities*	$	—	$	—	$	—	$	—
Preferred securities		4,184,735		—		4,184,735		—
Debt securities:
U.S. Treasury and other U.S. Government agencies		—		—		—		—
States and political subdivisions (municipals)		—		—		—		—
Corporate debt		144,049,455				144,049,455		—
Convertible corporate debt		—		—		—		—
Asset backed securities		—		—		—		—
Commercial mortgage backed securities		—		—		—		—
Mutual funds		7,480,366		7,480,366		—		—
Other financial instruments**:		—		—		—		—
Total assets		155,714,556		7,480,366		148,234,190		—
Liabilities:
Other financial instruments**:		—		—		—		—
Total liabilities:		—		—		—		—
Total:	$	155,714,556	$	7,480,366	$	148,234,190	$	—

17

Notes to Financial Statements

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

Security Valuation (continued)

The following table is a reconciliation of Level 3 investments for which significant unobservable inputs were used to determine fair value:

Level 3 Reconciliation	Corporate Debt
Balance as of December 31, 2009 (market value)	$	1,239,608
Accrued discounts/premiums		9,095
Change in unrealized appreciation/depreciation		(14,603	)
Net realized gain		155,747
Net purchases/sales		(1,389,847	)
Balance as of December 31, 2010 (market value)	$	—

*Includes common stock, warrants and rights. Please see the Investment Portfoilio for industry classification.

**Other financial instruments are derivative instruments not reflected in the Investment Portfolio, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument. As of December 31, 2010, the Series did not hold any derivative instruments.

There were no Level 3 securities held by the Series as of December 31, 2010.

The Fund’s policy is to recognize transfers in and transfers out of the valuation levels as of the beginning of the reporting period. There were no significant transfers between Level 1 and Level 2 during the year ended December 31, 2010.

Additional disclosure surrounding the activity in Level 3 fair value measurement will also be effective for fiscal years beginning after December 15, 2010. Management has concluded that this will not have a material impact on the Series’ financial statements.

Security Transactions, Investment Income and Expenses

Security transactions are accounted for on trade date. Dividend income is recorded on the ex-dividend date, except that if the ex-dividend date has passed, certain dividends from foreign securities are recorded as soon as the Fund is informed of the ex-dividend date. Non-cash dividends, if any, are recorded at the fair market value of the securities received. Interest income, including amortization of premium and accretion of discounts using the effective interest method, is earned from settlement date and accrued daily.

Expenses are recorded on an accrual basis. Most expenses of the Fund can be attributed to a specific series. Expenses which cannot be directly attributed are apportioned among the series in the Fund in such a manner as deemed equitable by the Fund’s Board, taking into consideration, among other things, the nature and type of expense.

The Series uses the identified cost method for determining realized gain or loss on investments for both financial statement and federal income tax reporting purposes.

Foreign Currency Translation

The books and records of the Series are maintained in U.S. dollars. Foreign currencies, investments and other assets and liabilities are translated into U.S. dollars at the current exchange rates. Purchases and sales of investment securities and income and expenses are translated on the respective dates of such transactions. The Series do not isolate realized and unrealized gains and losses attributable to changes in the exchange rates from gains and losses that arise from changes in the market value of investments. Such fluctuations are included with net realized and

18

Notes to Financial Statements

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

Foreign Currency Translation (continued)

unrealized gain or loss on investments. Net realized foreign currency gains and losses represent foreign currency gains and losses between trade date and settlement date on securities transactions, gains and losses on disposition of foreign currencies and the difference between the amount of income and foreign withholding taxes recorded on the books of the Series and the amounts actually received or paid.

Restricted Securities

Restricted securities are purchased in private placement transactions, are not registered under the Securities Act of 1933, as amended, and may have contractual restrictions on resale. Information regarding restricted securities is included at the end of the Series’ Investment Portfolio.

Illiquid Securities

A security may be considered illiquid if so deemed in good faith by the Advisor under procedures approved by and under the general supervision and responsibility of the Fund’s Board. Securities that are illiquid are marked with the applicable footnote on the Investment Portfolio. No such investments were held by the Series on December 31, 2010.

Federal Taxes

The Series’ policy is to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies. The Series is not subject to federal income tax or excise tax to the extent that the Series distributes to shareholders each year its taxable income, including any net realized gains on investments, in accordance with requirements of the Internal Revenue Code. Accordingly, no provision for federal income tax or excise tax has been made in the financial statements.

Management evaluates its tax positions to determine if the tax positions taken meet the minimum recognition threshold in connection with accounting for uncertainties in income tax positions taken or expected to be taken for the purposes of measuring and recognizing tax liabilities in the financial statements. Recognition of tax benefits of an uncertain tax position is required only when the position is “more likely than not” to be sustained assuming examination by taxing authorities. At December 31, 2010, the Series has recorded no liability for net unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken in future tax returns.

The Series files income tax returns in the U.S. federal jurisdiction, various states and foreign jurisdictions, as required. No income tax returns are currently under investigation. The statute of limitations on the Series’ tax returns remains open for the period ended December 31, 2009 through the year ended December 31, 2010. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.

Additionally, based on the Fund’s understanding of the tax rules and rates related to income, gains and transactions for foreign jurisdictions in which it invests, the Series will provide for foreign taxes, and where appropriate, deferred foreign tax.

Distributions of Income and Gains

Distributions to shareholders of net investment income and net realized gains are made annually. An additional distribution may be necessary to avoid taxation of the Series. Distributions are recorded on the ex-dividend date.

Indemnifications

The Fund’s organizational documents provide former and current directors and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund’s maximum exposure

19

Notes to Financial Statements

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

Indemnifications (continued)

under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.

Other

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.

3. TRANSACTIONS WITH AFFILIATES

The Fund has an Investment Advisory Agreement (the “Agreement”) with the Advisor, for which the Series pays a fee, computed daily and payable monthly, at an annual rate of 1.00% of the Series’ average daily net assets.

Under the Agreement, personnel of the Advisor provide the Series with advice and assistance in the choice of investments and the execution of securities transactions, and otherwise maintain the Series’ organization. The Advisor also provides the Fund with necessary office space and fund administration and support services. The salaries of all officers of the Fund (except a percentage of the Fund’s Chief Compliance Officer’s salary, which is paid by the Fund), and of all Directors who are “affiliated persons” of the Fund, or of the Advisor, and all personnel of the Fund, or of the Advisor, performing services relating to research, statistical and investment activities, are paid by the Advisor. Each “non-affiliated” Director receives an annual stipend, which is allocated among all the active series of the Fund. In addition, these Directors also receive a fee per Board meeting attended plus a fee for each committee meeting attended.

The Advisor has contractually agreed, until at least April 30, 2012, to waive its fee and, if necessary, pay other operating expenses of the Series in order to maintain total direct annual fund operating expenses for the Series at no more than 1.20% of average daily net assets each year. For the year ended December 31, 2010, the Advisor voluntarily waived fees of $758, which is included as a reduction of expenses on the Statement of Operations. The Advisor is not eligible to recoup any expenses that have been waived or reimbursed in prior years.

Manning & Napier Investor Services, Inc., a registered broker-dealer affiliate of the Advisor, acts as distributor for the Fund’s shares. The services of Manning & Napier Investor Services, Inc. are provided at no additional cost to the Series.

The Advisor has agreements with PNC Global Investment Servicing (U.S.) Inc. (“PNCGIS”) under which PNCGIS serves as sub-accountant services agent and sub-transfer agent. The Fund pays the Advisor an annual fee related to fund accounting and administration of 0.0175% on the first $3 billion of average daily net assets (excluding Target Series); 0.015% on the next $3 billion of average daily net assets (excluding Target Series); and 0.01% of the average daily net assets in excess of $6 billion (excluding Target Series); plus a base fee of $25,500 per Series. Transfer Agent fees are charged to the Fund on a per account basis. Additionally, certain transaction- and cusip-based fees and out-of-pocket expenses, including charges for reporting relating to the Fund’s compliance program, are charged.

Effective July 1, 2010, PNCGIS was sold to The Bank of New York Mellon Corporation, the Series’ custodian. At the close of the sale, PNCGIS changed its name to BNY Mellon Investment Servicing (U.S.) Inc. (“BNY”).

Expenses not directly attributable to a Series are allocated based on each Series’ relative net assets or number of accounts, depending on the expense.

20

Notes to Financial Statements

4. PURCHASES AND SALES OF SECURITIES

For the year ended December 31, 2010, purchases and sales of securities, other than U.S. Government securities and short-term securities, were $93,215,114 and $74,388,312, respectively. There were no purchases or sales of U.S. Government securities.

5. CAPITAL STOCK TRANSACTIONS

Transactions in shares of High Yield Bond Series were:

	For the Year Ended 12/31/10						For the period 9/14/09 (commencement of operations) to 12/31/09
	Shares			Amount			Shares			Amount
Sold		2,275,341		$	24,816,656			12,442,729		$	125,933,491
Reinvested		1,258,376			13,463,941			126,129			1,296,610
Repurchased		(1,117,255	)		(12,233,690	)		(252,173	)		(2,578,430	)
Total		2,416,462		$	26,046,907			12,316,685		$	124,651,671

Substantially all of the Series’ shares represent investments by fiduciary accounts over which the Advisor has sole investment discretion.

6. FINANCIAL INSTRUMENTS

The Series may trade in instruments including written and purchased options, forward foreign currency exchange contracts and futures contracts and other derivatives in the normal course of investing activities to assist in managing exposure to various market risks. Investments in these instruments may subject the Series to various elements of risk, which may involve, to a varying degree, elements of risk in excess of the amounts recognized for financial statement purposes. These risks include: the risk that changes in the value of a derivative may not correlate perfectly with the underlying asset, rate or index, counterparty credit risk related to over the counter derivatives counterparties’ failure to perform under contract terms, liquidity risk related to the lack of a liquid market for these contracts allowing the fund to close out its position(s) and documentation risk relating to disagreement over contract terms. No such investments were held by the Series during the year ended December 31, 2010.

7. FOREIGN SECURITIES

Investing in securities of foreign companies and foreign governments involves special risks and considerations not typically associated with investing in securities of domestic companies and the U.S. Government. These risks include revaluation of currencies and future adverse political and economic developments. Moreover, securities of foreign companies and foreign governments and their markets may be less liquid and their prices more volatile than those of comparable domestic companies and the U.S. Government.

8. FEDERAL INCOME TAX INFORMATION

The amount and characterization of certain income and capital gains to be distributed are determined in accordance with federal income tax regulations, which may differ from accounting principles generally accepted in the United States of America. These differences are primarily due to differing book and tax treatments in the timing of the recognition of net investment income or gains and losses, including foreign currency gains, losses and investments in hybrid securities, disallowed expenses and post-October losses. The Series may periodically make reclassifications among its capital accounts to reflect income and gains available for distribution (or available capital loss carryovers)

21

Notes to Financial Statements

8. FEDERAL INCOME TAX INFORMATION (continued)

under income tax regulations without impacting the Series’ net asset value. Any such reclassifications are not reflected in the financial highlights.

The tax character of distributions paid were as follows:

	For the Year Ended 12/31/10		For the Period Ended 12/31/09*
Ordinary income	$	13,587,061	$	1,348,490
Long-term capital gains		310,425		—

* The Series commenced operations on September 14, 2009.

At December 31, 2010, the tax basis of distributable earnings and the net unrealized appreciation based on identified cost for federal income tax purposes were as follows:

Cost for federal income tax purposes	$    148,763,047
Unrealized appreciation	$    7,234,162
Unrealized depreciation	(282,653	)
Net unrealized appreciation	$    6,951,509
Undistributed ordinary income	275,283
Undistributed long-term gains	167,087

22

Report of Independent Registered Public Accounting Firm

To the Board of Directors of Manning & Napier Fund, Inc. and Shareholders of High Yield Bond Series:

In our opinion, the accompanying statement of assets and liabilities, including the investment portfolio, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the High Yield Bond Series (a series of Manning & Napier Fund, Inc., hereafter referred to as the “Series”) at December 31, 2010, and the results of its operations for the year then ended and the changes in its net assets and the financial highlights for the year ended and the period September 14, 2009 (commencement of operations) through December 31, 2009, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Series’ management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2010 by correspondence with the custodian, provide a reasonable basis for our opinion.

New York, New York

February 22, 2011

23

Supplemental Tax Information (unaudited)

All designations are based on financial information available as of the date of this annual report and, accordingly are subject to change.

For federal income tax purposes, the Series designates for the current fiscal period $322,621 or, if different, the maximum amount allowable under the tax law as qualified dividend income.

Pursuant to Section 852 of the Internal Revenue Code, as amended, the Series hereby designates $310,425 as capital gains for its taxable year ended December 31, 2010, or if different, the maximum allowable under tax law.

For corporate shareholders, the percentage of investment income (dividend income plus short-term gains, if any) that qualifies for the dividends received deduction for the current fiscal period is 2.37%, or if different, the maximum allowable under tax law.

24

Renewal of Investment Advisory Agreement (unaudited)

At the Manning & Napier Fund, Inc. (the “Fund”) Board of Directors’ (the “Board”) meeting, held on November 17, 2010, the Investment Advisory Agreement (the “Agreement”) between the Fund and Manning & Napier Advisors, Inc. (the “Advisor”) was reviewed by the Board for renewal. In connection with the decision whether to renew the Agreement, a variety of material was prepared for and reviewed by the Board.

Representatives of the Advisor attended the meeting and presented additional oral and written information to the Board to assist the Board in its considerations. The discussion immediately below outlines the materials and information presented to the Board in connection with the Board’s 2010 Annual Review of the Agreement and the conclusions made by the Directors when determining to continue the Agreement.

• The Board considered the services provided by the Advisor under the Agreement including, among others: deciding what securities to purchase and sell for each Series; arranging for the purchase and sale of such securities by placing orders with broker-dealers; administering the affairs of the Fund (including the books and records of the Fund not maintained by third party service providers such as the custodian or sub-transfer agent); arranging for the insurance coverage for the Fund; and supervising the preparation of tax returns, SEC filings (including registration statements) and reports to shareholders for the Fund. The Board also considered the nature and quality of such services provided under the Agreement in light of the Advisor’s services provided to the Fund for 24 years. The Board discussed the quality of these services with representatives from the Advisor and concluded that the Advisor was performing its services to the Fund required under the Agreement in a reasonable manner.

• The Board considered the investment performance of the various Series of the Fund. The investment performance for each Series was reviewed on a cumulative basis since inception and on a one year basis. In addition, annualized performance for the following time periods was considered: inception, three year, five year, ten year, and current market cycle. A market cycle includes periods of both rising and falling markets. Returns for established benchmark indices for each Series were provided for each time period. The Board noted that the various Series were competitive against their respective benchmarks and/or peer groups over various time periods, but in particular over the full market cycle period relevant for the Series. In addition, the Board considered at the meeting (and considers on a quarterly basis) a peer group performance analysis consisting of Morningstar universes of mutual funds with similar investment objectives. The Board discussed the performance with representatives from the Advisor and concluded that the investment performance of each of the Fund’s Series was reasonable based on the Fund’s actual performance and comparative performance, especially performance over the current market cycle.

• The Board considered the costs of the Advisor’s services and the profits of the Advisor as they relate to the Advisor’s services to the Fund under the Agreement. In reviewing the Advisor’s costs and profits, the Board discussed the Advisor’s revenues generated from the Fund (on both an actual and adjusted basis) and its expenses associated with providing the services under the Agreement. In addition, the Board reviewed the Advisor’s expenses associated with Fund activities outside of the Agreement (such as expense reimbursements pursuant to expense caps and payments made by the Advisor to third party platforms on which shares of the Fund are available for purchase). It was noted by representatives of the Advisor that 11 of the 27 active Series of the Fund are currently experiencing expenses above the capped expense ratios. After discussing the above costs and profits, the Board concluded that the Advisor’s profitability relating to its services provided under the Agreement was reasonable.

• The Board considered the fees and expenses of the various Series of the Fund. The Advisor presented the advisory fees and total expenses for each Series, including the advisory fee adjusted for any expense waivers or reimbursements (either contractual or voluntary) paid by the Advisor. The advisory fees and expense ratios of each Series were compared to an average (on both a mean and median basis) of similar funds as disclosed on the Morningstar database. Representatives of the Advisor discussed with the Board the levels of its advisory

25

Renewal of Investment Advisory Agreement (unaudited)

fee for each Series of the Fund and as compared to the median and mean advisory fees for similar funds as listed on Morningstar. Expense ratios for every Series, except the Pro-Blend’s Class R and Class C, and Target Class R and Class C, are currently below the median and mean for similar funds as listed on Morningstar. Based on their review of the information provided, the Board concluded that the fees and expenses of each Series of the Fund were reasonable on a comparative basis.

• The Board also considered the other benefits the Advisor derives from its relationship with the Fund. Such other benefits include certain research products provided by soft dollars. Given the level of soft dollar transactions involving the Fund, the Board concluded that these additional benefits to the Advisor were reasonable.

• In addition to the factors described above, the Board considered the Advisor’s personnel, investment strategies, policies and procedures relating to compliance with personal securities transactions, and reputation, expertise and resources in domestic and foreign financial markets. The Board concluded that these factors support the conclusion that the Advisor performs its services in a reasonable manner.

• The Board did not consider economies of scale at this time because of the multiple uses of the Fund (for the Advisor’s discretionary investment account clients in addition to direct investors), the current profitability of the Advisor’s services to the Fund under the Agreement, and the overall size of the Fund complex.

Based on the Board’s deliberations and their evaluation of the information described above, the Board, including a majority of Directors that are not “interested persons” as defined in the Investment Company Act of 1940, concluded that the compensation under the Agreement was fair and reasonable in light of the services and expenses and such other matters as the Directors considered to be relevant in the exercise of their reasonable judgment. Accordingly, the Board approved the renewal of the Agreement. In the course of their deliberations, the Directors did not identify any particular information that was all important or controlling.

26

Directors’ and Officers’ Information (unaudited)

The Statement of Additional Information provides additional information about the Fund’s directors and officers and can be obtained without charge by calling 1-800-466-3863, at www.manningnapieradvisors.com, or on the EDGAR Database on the SEC Internet web site (http:// www.sec.gov). The following chart shows certain information about the Fund’s officers and directors, including their principal occupations during the last five years. Unless specific dates are provided, the individuals have held the listed positions for longer than five years.

INTERESTED DIRECTOR/OFFICER
Name:	B. Reuben Auspitz*
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	63
Current Position(s) Held with Fund:	Principal Executive Officer, President, Chairman & Director
Term of Office1 & Length of Time Served:	Indefinite - Director since 1984; Vice President 1984 - 2003; President
	since 2004; Principal Executive Officer since 2002
Principal Occupation(s) During Past 5 Years:	Executive Vice President; Executive Group Member**; Chief Compliance
	Officer since 2004; Vice Chairman since June 2010; Co-Executive
	Director from 2003-2010 - Manning & Napier Advisors, Inc. President;
	Director - Manning & Napier Investor Services, Inc.
	Holds or has held one or more of the following titles for various
	subsidiaries and affiliates: President, Vice President, Director, Chairman,
	Treasurer, Chief Compliance Officer or Member.
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
INDEPENDENT DIRECTORS
Name:	Paul A. Brooke
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	65
Current Position(s) Held with Fund:	Director, Audit Committee Member, Governance & Nominating
	Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 2007
Principal Occupation(s) During Past 5 Years:	Chairman & CEO, Alsius Corp. (investments); Managing Member, PMSV
	Holdings LLC (investments)
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	Incyte Corp. (2000-present)
	ViroPharma, Inc. (2000-present)
	HLTH Corp. (2000-present)
	Cheyne Capital International (2000-present)
	MPM Bio-equities (2000-present)
	GMP Companies (2000-present)
	HoustonPharma (2000-present)
Name:	Richard M. Hurwitz
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	47
Current Position(s) Held with Fund:	Director, Audit Committee Member, Governance & Nominating
	Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 2009
Principal Occupation(s) During Past 5 Years:	Chief Executive Officer, Pictometry International Corp. since August 2010
	(provider of georeferenced, aerial image libraries and related software)
	Managing Partner (2006-July 2010) - Aegis Investment Partners, LLC
	(investments); Founder and Managing Partner (2004-2005) - Village
	Markets, LLC (groceries)
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	Pictometry International Corp. (2000-2010)
	Pioneering Technologies (2006-2009)
	Vensearch Capital Corp. (2003-2007)

27

Directors’ and Officers’ Information (unaudited)

INDEPENDENT DIRECTORS (continued)
Name:	Stephen B. Ashley
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	70
Current Position(s) Held with Fund:	Director, Audit Committee Member, Governance & Nominating
	Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 1996
Principal Occupation(s) During Past 5 Years:	Chairman, Director, President & Chief Executive Officer, The Ashley
	Group (property management and investment). Chairman
	(non-executive) 2004-2008; Director 1995-2008 - Fannie Mae (mortgage)
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	The Ashley Group (1995-2008)
	Genesee Corporation (1987-2007)
Name:	Peter L. Faber
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	72
Current Position(s) Held with Fund:	Director, Governance & Nominating Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 1987
Principal Occupation(s) During Past 5 Years:	Senior Counsel since 2006, Partner (1995 - 2006) - McDermott, Will &
	Emery LLP (law firm)
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	Partnership for New York City, Inc. (non-profit)
	New York Collegium (non-profit)
	Boston Early Music Festival (non-profit)
Name:	Harris H. Rusitzky
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	76
Current Position(s) Held with Fund:	Director, Audit Committee Member, Governance & Nominating
	Committee Member
Term of Office & Length of Time Served:	Indefinite - Since 1985
Principal Occupation(s) During Past 5 Years:	President, The Greening Group (business consultants) since 1994;
	Partner, The Restaurant Group (restaurants) since 2006
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
OFFICERS
Name:	Jeffrey S. Coons, Ph.D., CFA
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	47
Current Position(s) Held with Fund:	Vice President
Term of Office1 & Length of Time Served:	Since 2004
Principal Occupation(s) During Past 5 Years:	President since 2010, Co-Director of Research since 2002, Executive
	Group Member** since 2003, - Manning & Napier Advisors, Inc.
	Holds one or more of the following titles for various subsidiaries and
	affiliates: President, Director, Treasurer or Senior Trust Officer.
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A

28

Directors’ and Officers’ Information (unaudited)

OFFICERS (continued)
Name:	Beth Galusha
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	49
Current Position(s) Held with Fund:	Assistant Chief Financial Officer
Term of Office1 & Length of Time Served:	Assistant Chief Financial Officer since 2010
Principal Occupation(s) During Past 5 Years:	Chief Financial Officer and Treasurer, Manning & Napier Advisors, Inc.
	Holds one or more of the following titles for various affiliates: Chief
	Financial Officer, Director, or Treasurer
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
Name:	Christine Glavin
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	44
Current Position(s) Held with Fund:	Principal Financial Officer, Chief Financial Officer
Term of Office1 & Length of Time Served:	Principal Financial Officer since 2002; Chief Financial Officer since 2001
Principal Occupation(s) During Past 5 Years:	Fund Reporting Manager, Manning & Napier Advisors, Inc. since 1997
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
Name:	Jodi L. Hedberg
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	43
Current Position(s) Held with Fund:	Corporate Secretary, Chief Compliance Officer, Anti-Money Laundering
	Compliance Officer
Term of Office1 & Length of Time Served:	Corporate Secretary since 1997; Chief Compliance Officer since 2004
Principal Occupation(s) During Past 5 Years:	Director of Compliance, Manning & Napier Advisors, Inc. and affiliates
	since 1990 (title change in 2005 from Compliance Manager to Director of
	Compliance); Corporate Secretary, Manning & Napier Investor Services,
	Inc. since 2006
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A
Name:	Richard Yates
Address:	290 Woodcliff Drive
	Fairport, NY 14450
Age:	45
Current Position(s) Held with Fund:	Chief Legal Officer
Term of Office1 & Length of Time Served:	Chief Legal Officer since 2004
Principal Occupation(s) During Past 5 Years:	Counsel - Manning & Napier Advisors, Inc. & affiliates since 2000; Holds
	one or more of the following titles for various affiliates; Director or
	Corporate Secretary
Number of Portfolios Overseen within Fund Complex:	29
Other Directorships Held Outside Fund Complex:	N/A

*Interested Director, within the meaning of the Investment Company Act of 1940 by reason of his position with the Fund’s investment advisor and

distributor. Mr. Auspitz serves as the Executive Vice President and Director, Manning & Napier Advisors, Inc. and President and Director, Manning & Napier Investor Services, Inc., the Fund’s distributor.

**Prior to June 2010, the Executive Group, consisting of senior executive employee-owners, performed the duties of the Office of the Chief

Executive of the Advisor. Effective June 2010, the Executive Group serves as an advisory board to the Chief Executive Officer.

¹The term of office for President, Vice President, Chief Financial Officer, Assistant Chief Financial Officer, Chief Legal Officer and Corporate

Secretary is one year and until their respective successors are chosen and qualified. All other officers’ terms are indefinite.

29

Literature Requests (unaudited)

Proxy Voting Policies and Procedures

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available, without charge, upon request:

By phone	1-800-466-3863
On the Securities and Exchange Commission’s (SEC) web site	http://www.sec.gov

Proxy Voting Record

Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30th is available, without charge, upon request:

By phone	1-800-466-3863
On the SEC’s web site	http://www.sec.gov

Quarterly Portfolio Holdings

The Series’ complete schedule of portfolio holdings for the 1st and 3rd quarters of each fiscal year are provided on Form N-Q, and are available, without charge, upon request:

By phone	1-800-466-3863
On the SEC’s web site	http://www.sec.gov

The Series’ Form N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

Prospectus and Statement of Additional Information (SAI)

The prospectus and SAI provide additional information about each Series, including charges, expenses and risks. These documents are available, without charge, upon request:

By phone	1-800-466-3863
On the SEC’s web site	http://www.sec.gov
On the Advisor’s web site	http://www.manning-napier.com

Additional information available at www.manning-napier.com

1. Fund Holdings - Month-End

2. Fund Holdings - Quarter-End

3. Shareholder Report - Annual

4. Shareholder Report - Semi-Annual

MNHYYLD-12/10-AR

ITEM 2: CODE OF ETHICS

(a) The registrant has adopted a code of ethics that applies to its principal executive officer, principal financial officer and principal accounting officer. A copy of the registrant’s code of ethics is filed herewith as Exhibit 12(a)(1).

(b) During the period covered by this report, no amendments were made to the provisions of the code of ethics adopted in 2 (a) above.

(c) During the period covered by this report, no implicit or explicit waivers to the provisions of the code of ethics adopted in 2 (a) above were granted.

(d) Not applicable to the registrant due to the response given in 2 (c) above.

ITEM 3: AUDIT COMMITTEE FINANCIAL EXPERT

All of the members of the Audit committee have been determined by the Registrant’s Board of Directors to be Audit Committee Financial Experts as defined in this item. The members of the Audit Committee are: Harris H. Rusitzky, Stephen B. Ashley, Paul A. Brooke and Richard M. Hurwitz. All Audit Committee members are independent under applicable rules. This designation will not increase the designee’s duties, obligations or liability as compared to their duties, obligations and liability as a member of the Audit Committee and of the Board.

ITEM 4: PRINCIPAL ACCOUNTANT FEES AND SERVICES

Principal Accountant Fees and Services

Aggregate fees for professional services rendered for the Manning & Napier Fund, Inc. (Life Sciences Series, Small Cap Series, Technology Series, Financial Services Series, Real Estate Series, International Series, World Opportunities Series, Ohio Tax Exempt Series, Diversified Tax Exempt Series, New York Tax Exempt Series, Core Bond Series, Core Plus Bond Series, and High Yield Bond Series, collectively the “Fund”) by PricewaterhouseCoopers LLP (“PwC”) as of and for the years ended December 31, 2010 and 2009 were:

	2010		2009
Audit Fees (a)		337,183		336,557
Audit Related Fees (b)		—		13,392
Tax Fees (c)		74,400		87,780
All Other Fees (d)		—		—
		411,583		437,729

(a) Audit Fees

These fees relate to professional services rendered by PwC for the audit of the Fund’s annual financial statements or services normally provided by the accountant in connection with statutory and regulatory filing or engagements. These services include the audits of the financial statements of the Fund, issuance of consents, income tax provision procedures and assistance with review of documents filed with the SEC.

(b) Audit-Related Fees

These fees relate to assurance and related services by PwC that are reasonably related to the performance of the audit of the Fund’s financial statements and are not reported under “Audit Fees” above. These fees relate to professional services provided by PwC in connection with service provider conversion.

(c) Tax Fees

These fees relate to professional services rendered by PwC for tax compliance, tax advice and tax planning. The tax services provided by PwC related to the preparation of the Fund’s federal and state income tax returns, excise tax calculations and returns, a review of the Fund’s calculations of capital gain and income distributions, and additional tax research for compliance purposes.

(d) All Other Fees

These fees relate to products and services provided by PwC other than those reported above under “Audit Fees,” “Audit-Related Fees,” and “Tax Fees” above.

There were no amounts that were approved by the Audit Committee pursuant to the de minimus exception (Rule 2-01(c)(7) of Regulation S-X) for the fiscal years ended December 31, 2010 and 2009.

Non-Audit Services to the Fund’s Service Affiliates that were Pre-Approved by the Fund’s Audit Committee

The Fund’s Audit Committee is required to pre-approve non-audit services which meet both the following criteria:

i) Directly relate to the Fund’s operations and financial reporting; and

ii) Rendered by PwC to the Fund’s advisor, Manning & Napier Advisors, Inc., and entities in a control relationship with the advisor (“service affiliate”) that provide ongoing services to the Fund. For purposes of disclosure, Manning & Napier Investor Services, Inc. is considered to be a service affiliate.

	2010		2009
Audit Related Fees		153,644		8,420
Tax Fees		—		1,950
		153,644		10,370

The Audit Related fees for the years ended December 31, 2010 were for a license for proprietary authoritative financial reporting and assurance literature library software, a surprise examination pursuant to Rule 204-2(b) and 206(4)-2, and a Type II SAS 70 pursuant to Rule 206. In 2009, were for 17Ad-13 internal control examinations and the license for proprietary authoritative financial report and assurance literature library software.

The Tax fees for the year ended December 31, 2009 relate to research on the tax implications for various funds holding certain investment types.

There were no amounts that were approved by the Audit Committee pursuant to the de minimus exception (Rule 2-01(c)(7) of Regulation S-X) for the fiscal years ended December 31, 2010 and 2009.

Aggregate Fees

Aggregate fees billed to the Fund for non-audit services for 2010 and 2009 were $74,400 and $87,780, respectively. Aggregate fees billed to the Fund’s advisor and service affiliates for non-audit services were $153,644 and $10,370, respectively. These amounts include fees for non-audit services required to be pre-approved and fees for non-audit services that did not require pre-approval since they did not relate to the Fund’s operations and financial reporting.

The Fund’s Audit Committee has considered whether the provisions for non-audit services to the Fund’s advisor and service affiliates, which did not require pre-approval, are compatible with maintaining PwC’s independence.

ITEM 5: AUDIT COMMITTEE OF LISTED REGISTRANTS.

Not applicable.

ITEM 6: INVESTMENTS.

(a) See Investment Portfolios under Item 1 on this Form N-CSR.

(b) Not applicable.

ITEM 7: DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED- END MANAGEMENT INVESTMENT COMPANIES.

Not applicable.

ITEM 8: PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable.

ITEM 9: PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.

Not applicable.

ITEM 10: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

There have been no material changes to the procedure by which shareholders may recommend nominees to the registrant’s board of directors.

ITEM 11: CONTROLS AND PROCEDURES.

(a) Based on their evaluation of the Funds’ disclosure controls and procedures, as of a date within 90 days of the filing date, the Funds’ Principal Executive Officer and Principal Financial Officer have concluded that the Funds’ disclosure controls and procedures are: (i) reasonably designed to ensure that information required to be disclosed in this report is appropriately communicated to the Funds’ officers to allow timely decisions regarding disclosures required in this report; (ii) reasonably designed to ensure that information required to be disclosed in this report is recorded, processed, summarized and reported in a timely manner; and (iii) are effective in achieving the goals described in (i) and (ii) above.

(b) During the second fiscal quarter of the period covered by this report, there have been no changes in the Funds’ internal control over financial reporting that the above officers believe to have materially affected, or to be reasonably likely to materially affect, the Funds’ internal control over financial reporting.

Item 12: EXHIBITS.

(a)(1)	Code of ethics that is subject to the disclosure of Item 2 above.
(a)(2)	Separate certifications for the Registrant’s principal executive officer and principal financial officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 30a-2(a) under the Investment Company Act of 1940, are attached as EX-99.CERT.
(a)(3)	Not applicable.
(b)	A certification of the Registrant’s principal executive officer and principal financial officer, as required by 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and Rule 30a-2(b) under the Investment Company Act of 1940, is attached as EX- 99.906CERT. The certification furnished pursuant to this paragraph is not deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section. Such certification is not deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the Registrant specifically incorporates them by reference.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Manning & Napier Fund, Inc.

/s/ B. Reuben Auspitz

B. Reuben Auspitz

President & Principal Executive Officer of
Manning & Napier Fund, Inc.

March 1, 2011

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/ B. Reuben Auspitz

B. Reuben Auspitz

President & Principal Executive Officer of
Manning & Napier Fund, Inc.

March 1, 2011

/s/ Christine Glavin

Christine Glavin

Chief Financial Officer & Principal Financial Officer
of Manning & Napier Fund, Inc.

March 1, 2011