Securities Act File No.
As filed with the Securities and Exchange Commission on November 15, 2002
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. [ ]
IDEX Mutual Funds
(Exact Name of Registrant as Specified in Charter)
570 Carillon Parkway
St. Petersburg, Florida 33716
(Address of Principal Executive Offices) (Zip Code)
(800) 851-9777
(Registrant's Area Code and Telephone Number)
John K. Carter, Esq.
570 Carillon Parkway
St. Petersburg, Florida 33716
IDEX Mutual Funds
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering: As soon as practicable after this
Registration Statement becomes effective.
It is proposed that this filing will become effective on December 16, 2002
pursuant to Rule 488 under the Securities Act of 1933.
No filing fee is required because an indefinite number of shares has previously
been registered pursuant to Rule 24f-2 under the Investment Company Act of 1940,
as amended.
Pursuant to Rule 429 under the Securities Act of 1933, this registration
statement relates to shares of beneficial interest previously registered on Form
N-1A (File No. 33-02659)
- --------------------------------------------------------------------------------
IDEX GABELLI GLOBAL GROWTH
IDEX Mutual Funds
570 Carillon Parkway
St. Petersburg, Florida 33716
888/233-4339
December 15, 2002
Dear Shareholder:
Your Board of Trustees has called a special meeting of shareholders of IDEX
Gabelli Global Growth, to be held at 11:30 a.m., local time, on February 12,
2003, at the offices of the IDEX Mutual Funds ("IDEX"), 570 Carillon Parkway,
St. Petersburg, Florida 33716, as adjourned from time-to-time (the "Special
Meeting").
The IDEX Board of Trustees (the "Board") has approved a reorganization (the
"Reorganization") of IDEX Gabelli Global Growth ("Acquired Fund") into IDEX
American Century International ("Acquiring Fund") (each a "Fund," collectively,
the "Funds"). AEGON/Transamerica Fund Advisers, Inc. ("ATFA") serves as
investment adviser to both funds. Gabelli Asset Management Company ("Gabelli")
serves as sub-adviser to Acquired Fund, and American Century Investment
Management, Inc. ("American Century") serves as sub-adviser to Acquiring Fund.
Acquired Fund has investment objectives and policies that are similar in many
respects to those of Acquiring Fund. The Reorganization is expected to result in
operating expenses that are lower for shareholders.
You are asked to vote to approve an Agreement and Plan of Reorganization. The
accompanying document describes the proposed transaction and compares the
policies and expenses of the Funds for your evaluation.
After careful consideration, the IDEX Board unanimously approved this proposal
and recommends that shareholders vote "FOR" the proposal.
A Proxy Statement/Prospectus that describes the Reorganization is enclosed. We
hope that you can attend the Special Meeting in person; however, we urge you in
any event to vote your shares by completing and returning the enclosed proxy
card, in the envelope provided, at your earliest convenience. You also may
INSTEAD vote by Internet, telephone, or facsimile by following the enclosed
instructions. If you choose one of these methods, DO NOT return your proxy card
unless you later decide to change your vote.
YOUR VOTE IS IMPORTANT REGARDLESS OF THE NUMBER OF SHARES YOU OWN. IN ORDER TO
AVOID THE ADDED COST OF FOLLOW-UP SOLICITATIONS AND POSSIBLE ADJOURNMENTS,
PLEASE TAKE A FEW MINUTES TO READ THE PROXY STATEMENT/PROSPECTUS AND CAST YOUR
VOTE. IT IS IMPORTANT THAT YOUR VOTE BE RECEIVED NO LATER THAN 11:30 A.M. ON
FEBRUARY 12, 2003.
ALAMO Direct ("ALAMO"), a professional solicitation firm, will assist you in the
voting process. As the date of the Special Meeting approaches, you may receive a
telephone call from ALAMO reminding you to exercise your right to vote.
We appreciate your participation and prompt response in this matter and thank
you for your continued support.
Sincerely,
Brian C. Scott
President
- --------------------------------------------------------------------------------
2
- --------------------------------------------------------------------------------
IDEX MUTUAL FUNDS
IDEX Gabelli Global Growth
570 Carillon Parkway
St. Petersburg, Florida 33716
(888) 233-4339
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS OF
IDEX GABELLI GLOBAL GROWTH
TO BE HELD ON FEBRUARY 12, 2003
To the Shareholders:
A special meeting of shareholders of IDEX Gabelli Global Growth is scheduled for
February 12, 2003 at 11:30 a.m., local time, at 570 Carillon Parkway, St.
Petersburg, Florida 33716, or as adjourned from time-to-time (the "Special
Meeting").
At the Special Meeting, you will be asked to consider the following proposals:
1. To approve an Agreement and Plan of Reorganization providing for the
acquisition of all of the assets and liabilities of IDEX Gabelli Global
Growth (the "Acquired Fund") by IDEX American Century International (the
"Acquiring Fund") solely in exchange for shares of Acquiring Fund,
followed by the complete liquidation of Acquired Fund; and
2. To transact such other business, not currently contemplated, that may
properly come before the Special Meeting in the discretion of the proxies
or their substitutes.
Shareholders of record at the close of business on November 15, 2002 are
entitled to notice of, and to vote at, the Special Meeting. Your attention is
called to the accompanying Proxy Statement/Prospectus. Regardless of whether you
plan to attend the Special Meeting, PLEASE COMPLETE, SIGN AND PROMPTLY RETURN
THE ENCLOSED PROXY CARD, OR VOTE BY TELEPHONE, BY FACSIMILE, OR THROUGH THE
INTERNET so that a quorum will be present and a maximum number of shares may be
voted. Proxies may be revoked at any time by executing and submitting a revised
proxy, by giving written notice of revocation to IDEX, or by voting in person at
the Special Meeting.
By Order of the Board of Trustees
John K. Carter
Vice President, Secretary &
General Counsel
December 15, 2002
- --------------------------------------------------------------------------------
3
INTRODUCTION............................................................................................................. 5
SUMMARY.................................................................................................................. 6
The Proposed Reorganization........................................................................................... 6
Purchase and Redemption Information................................................................................... 7
Federal Income Tax Consequences of the Reorganization................................................................. 7
Principal Risks of Investing in Acquiring Fund........................................................................ 7
INVESTMENT OBJECTIVES AND POLICIES....................................................................................... 8
Comparison of Investment Objectives and Primary Investment Strategies................................................. 8
Comparison of Portfolio Characteristics............................................................................... 8
Relative Performance.................................................................................................. 8
Comparisons of Investment Techniques and Risks of the Funds........................................................... 9
COMPARISON OF FEES AND EXPENSES.......................................................................................... 9
Management Fees....................................................................................................... 10
Administration Fees................................................................................................... 10
Expense Limitation Arrangement........................................................................................ 10
Expense Table......................................................................................................... 11
General Information................................................................................................... 9
Example............................................................................................................... 12
ADDITIONAL INFORMATION ABOUT ACQUIRING FUND.............................................................................. 12
Investment Adviser.................................................................................................... 12
Investment Personnel.................................................................................................. 13
Performance of Acquiring Fund......................................................................................... 13
INFORMATION ABOUT THE REORGANIZATION..................................................................................... 14
The Reorganization Plan............................................................................................... 14
Reasons for the Reorganization........................................................................................ 14
Board Considerations.................................................................................................. 14
Tax Considerations.................................................................................................... 15
Expenses of the Reorganization........................................................................................ 15
ADDITIONAL INFORMATION ABOUT THE FUNDS................................................................................... 15
Form of Organization.................................................................................................. 15
Distributor........................................................................................................... 15
Dividends and Other Distributions..................................................................................... 15
Capitalization........................................................................................................ 16
GENERAL INFORMATION ABOUT THE PROXY STATEMENT............................................................................ 16
Solicitation of Proxies............................................................................................... 16
Voting Rights......................................................................................................... 17
Other Matters to Come Before the Special Meeting...................................................................... 17
Shareholder Proposals................................................................................................. 17
Where to Obtain Information About the Funds........................................................................... 17
Reports to Shareholders............................................................................................... 18
MORE INFORMATION REGARDING THE FUNDS..................................................................................... 19
APPENDIX A (FORM OF AGREEMENT AND PLAN OF REORGANIZATION)
APPENDIX B (FUND MANAGER REPORT FOR ACQUIRING FUND)(4/30/02) ............................................................ 26
(10/31/01)............................................................. 26
APPENDIX C (SECURITY OWNERSHIP OF CERTAIN BENEFICIAL AND RECORD OWNERS).................................................. 28
- --------------------------------------------------------------------------------
4
- --------------------------------------------------------------------------------
PROXY STATEMENT/PROSPECTUS
IDEX MUTUAL FUNDS
570 CARILLON PARKWAY
ST. PETERSBURG, FLORIDA 33716
(888) 233-4339
SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON
FEBRUARY 12, 2003
IDEX GABELLI GLOBAL GROWTH
RELATING TO THE REORGANIZATION INTO
IDEX AMERICAN CENTURY INTERNATIONAL (COLLECTIVELY, THE "FUNDS")
INTRODUCTION
This Proxy Statement/Prospectus is being furnished to you in connection with a
special meeting of shareholders of IDEX Gabelli Global Growth scheduled to be
held on February 12, 2003, as adjourned from time-to-time (the "Special
Meeting"). As more fully described in this Proxy Statement/Prospectus, the
purpose of the Special Meeting is to vote on a proposed reorganization (the
"Reorganization") of IDEX Gabelli Global Growth (the "Acquired Fund") into IDEX
American Century International (the "Acquiring Fund") (each a "Fund,"
collectively, the "Funds"), each a series of IDEX Mutual Funds ("IDEX"), an
open-end management investment company. Under an Agreement and Plan of
Reorganization, Acquired Fund would transfer all of its assets to Acquiring Fund
in exchange for shares of beneficial interest of Acquiring Fund and the
assumption by Acquiring Fund of Acquired Fund's liabilities. You are being asked
to vote on the Agreement and Plan of Reorganization through which this
transaction would be accomplished.
Because you, as a shareholder of Acquired Fund, are being asked to approve the
Agreement and Reorganization that will result in a transaction in which you
ultimately will hold shares of Acquiring Fund, this Proxy Statement also serves
as a Prospectus for Acquiring Fund. The Reorganization will allow you to
participate in a Fund with similar investment objectives and strategies.
Acquiring Fund seeks to maximize long-term growth.
This Proxy Statement/Prospectus, which you should retain for future reference,
contains important information about Acquiring Fund that you should know before
investing. A Statement of Additional Information ("SAI") dated December 16,
2002, has been filed with the U.S. Securities and Exchange Commission ("SEC"),
and contains additional information about the Funds, and is incorporated herein
by reference. For a more detailed discussion of the investment objectives,
policies, restrictions and risks of each of the Funds, see the IDEX Prospectus,
dated November 11, 2002, and the IDEX SAI, dated November 11, 2002, each of
which is incorporated herein by reference and may be obtained without charge by
calling (888) 233-4339. Each of the Funds also provides periodic reports to its
shareholders, which highlight certain important information about the Funds,
including investment results and financial information. The annual report for
the Funds dated October 31, 2001, is incorporated herein by reference. You may
receive a copy of the most recent annual report and semi-annual report for the
Funds, without charge, by contacting IDEX, P.O. Box 9015, Clearwater, FL
33758-9015 or by calling (888)233-4339.
You may also obtain proxy materials, reports and other information filed by
either Fund from the SEC's Public Reference Section (1-202-942-8090) or from the
SEC's internet website at www.sec.gov. Copies of materials may also be obtained,
after paying a duplicating fee, by electronic request at the following e-mail
address: publicinfo@sec.gov, or by writing the SEC's Public Reference Section,
Washington, D.C. 20549-0102.
THE U.S. SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED
THESE SECURITIES, OR DETERMINED THAT THIS PROXY STATEMENT/PROSPECTUS IS TRUTHFUL
OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
DATE: DECEMBER 16, 2002
- --------------------------------------------------------------------------------
5
- --------------------------------------------------------------------------------
SUMMARY
You should read this entire Proxy Statement/Prospectus carefully. For additional
information, you should consult the IDEX Prospectus, which is incorporated by
reference, and the Agreement and Plan of Reorganization, which is attached
hereto as Appendix A.
THE PROPOSED REORGANIZATION --On December 3, 2002, the IDEX Board of Trustees
approved, with respect to each of the Funds, an Agreement and Plan of
Reorganization (the "Reorganization Plan"). Subject to approval of Acquired Fund
shareholders, the Reorganization Plan provides for:
- - the transfer of all of the assets of Acquired Fund to Acquiring Fund, in
exchange for shares of Acquiring Fund;
- - the assumption by Acquiring Fund of all of the liabilities of Acquired Fund;
- - the distribution of shares of Acquiring Fund to the shareholders of Acquired
Fund; and
- - the complete liquidation of Acquired Fund.
The Reorganization is expected to be effective upon the close of business on
February 28, 2003, or on a later date as the parties may agree (the "Closing").
As a result of the Reorganization, each shareholder of Acquired Fund would
become a shareholder of Acquiring Fund. Each shareholder would receive a number
of full and fractional shares of Acquiring Fund equal to the aggregate value of
shares of Acquired Fund held by such shareholder as of the close of business on
the day of the Closing. As a result of the Reorganization, each owner of shares
of each class of Acquired Fund would become a shareholder of the same class of
shares of Acquiring Fund.
The Reorganization is intended to eliminate duplication of costs and other
inefficiencies arising from having two similar funds within IDEX. Shareholders
in the Fund are expected to benefit from the elimination of this duplication and
from the larger asset base that will result from the Reorganization.
To become effective, the proposed Plan of Reorganization must be approved by a
"vote of the majority of the outstanding securities" of the Fund, as defined in
the 1940 Act. The "vote of a majority of the outstanding voting securities"
means the lesser of the vote of (i) 67% or more of the shares of the Fund
entitled to vote thereon present at the Meeting if the holders of more than 50%
of such outstanding shares are present in person or represented by proxy; or
(ii) more than 50% of such outstanding shares of the Fund entitled to vote
thereon.
AFTER CAREFUL CONSIDERATION, THE IDEX BOARD OF TRUSTEES UNANIMOUSLY APPROVED THE
PROPOSED REORGANIZATION. THE BOARD RECOMMENDS THAT YOU VOTE "FOR" THE PROPOSED
REORGANIZATION.
In considering whether to approve the Reorganization, you should note that:
- - Acquired Fund has an investment objective and certain similar investment
policies to that of Acquiring Fund. Both Acquired Fund and Acquiring Fund
seek capital growth. Each Fund invests primarily in stocks, but Acquired
Fund is a global fund and Acquiring Fund is an international fund. Global
funds invest in stocks of companies throughout the world, including the
United States. International funds only invest in companies outside of the
United States. Investing in international funds may put the investor at
greater risk.
- - Acquiring Fund invests stocks of growing foreign companies, selected by
using a growth investment strategy developed by American Century. Please
note: Prior to March 1, 2002, Acquiring Fund was named IDEX GE International
Equity and prior to October 4, 2001, GE Asset Management served as
sub-adviser of the Fund.
- - The Funds have the same investment adviser, AEGON/Transamerica Fund
Advisers, Inc. ("ATFA"), located at 570 Carillon Parkway, St. Petersburg,
Florida 33716. ATFA has engaged American Century, American Century Tower,
4500 Main Street, Kansas City, Missouri 64111, to provide sub-advisory
services to Acquiring Fund.
- --------------------------------------------------------------------------------
6
- --------------------------------------------------------------------------------
- - The proposed Reorganization is expected to result in a reduction in total
operating expenses, including expenses net of applicable expense reductions,
for current shareholders of Acquired Fund. The chart below compares the
current operating expenses, management fees, and distribution fees of the
Funds, and provides an estimate (pro forma) of the expected expenses
following the Reorganization (for period ended 4/30/02). (The historical
financial information for Acquiring Fund includes the previous fee levels
for IDEX International Equity. On March 1, 2002, IDEX International Equity
became IDEX American Century International with an increased fee structure.
Had this increased fee structure been in place for the time period reflected
in the pro forma example, such reduction for shareholders would be
apparent.)
- - For further information on fees and expenses, see "Comparison of Fees and
Expenses."
PURCHASE AND REDEMPTION INFORMATION -- The purchase and redemption provisions
for the Funds are the same. For additional information on purchase and
redemption provisions see "Comparison of Fees and Expenses" and "More
Information Regarding the Funds."
FEDERAL INCOME TAX CONSEQUENCES OF THE REORGANIZATION -- The Funds expect that
the Reorganization will be considered a tax-free reorganization within the
meaning of section 368(a)(1) of the Internal Revenue Code of 1986, as
amended (the "Code"). As such you will not recognize a gain or loss as a
result of the Reorganization. See "Information About The Reorganization -
Tax Considerations."
PRINCIPAL RISKS OF INVESTING IN ACQUIRING FUND -- The Funds share similar
investment risks. Each Fund is subject to the principal investment risks of
investing in stocks and small-or medium-sized companies, and Acquiring Fund
is also subject to the risks of investing in convertible securities, and
warrants and rights. For more information regarding the risks of the Funds,
see "Comparisons of Investment Techniques and Risks of the Funds."
INVESTMENT OBJECTIVES AND STRATEGIES
COMPARISON OF INVESTMENT OBJECTIVES AND PRIMARY INVESTMENT STRATEGIES --
- ------------------------------------------------------------------------------------------------------------------------------------
ACQUIRED FUND ACQUIRING FUND
- ------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT Seeks to provide investors with appreciation of capital. Seeks capital growth.
OBJECTIVE
- ------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT - Acquired Fund pursues its objective by - Acquiring Fund pursues its objective by
STRATEGIES investing principally in common stocks. investing principally in stocks of growing
foreign companies.
- ------------------------------------------------------------------------------------------------------------------------------------
- Under normal market conditions, Acquired Fund - Acquiring Fund's manager uses a growth
invests least 65% of total assets in common investment strategy developed by American
stocks of companies involved in the global Century to seek companies that it believes will
market place. increase in value over time.
- ------------------------------------------------------------------------------------------------------------------------------------
- Acquired Fund invests in companies of all - Acquiring Fund's manager looks for companies
capitalizations, and may invest without limitation that it believes has earnings and revenue
in securities of foreign issuers and will invest growth potential.
in securities of issuers located in at least three
countries.
- ------------------------------------------------------------------------------------------------------------------------------------
- Acquired Fund's manager employs a disciplined - Acquiring Fund's manager uses a "bottom up"
investment program focusing in the globalization approach when choosing securities for the fund's
and interactivity of the world's market place, portfolio. The manager tracks financial
seeking companies that it deems to be at the information for thousands of companies to
forefront of accelerated growth. identify trends in the companies' earnings and
revenues. This information is used to help the
fund manager to select or decide to continue to
hold the stocks of companies it believes will
be able to sustain their growth, and to sell
stocks of companies whose growth begins to slow
down.
- ------------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
7
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
ACQUIRED FUND ACQUIRING FUND
- ------------------------------------------------------------------------------------------------------------------------------------
- Acquired Fund's manager seeks to find reasonably - The fund's believes that it is important to
valued businesses exhibiting creativity diversify the fund's holdings across different
to adapt to the changing world, looking for solid countries and geographical regions in an effort
franchises with unique copyrights. to manage the risks of an international
portfolio.
- ------------------------------------------------------------------------------------------------------------------------------------
- Acquired Fund's manager looks to businesses in - To diversify Acquiring Fund's portfolio, the
the ever-evolving communications revolutions and manager considers the prospects for relative
anticipates that dominant companies will be economic growth among countries or regions,
conducting a major portion of their business via economic or political conditions, expected
the Internet in the next five years. inflation rates, currency exchange fluctuations
and tax considerations when making investments.
- ------------------------------------------------------------------------------------------------------------------------------------
- Acquired Fund's manager seeks companies - Acquiring Fund's manager does not attempt to
participating in emerging advances in services and time the market; instead the manager intends to
products that are accessible to individuals in keep the fund fully invested in stocks
their homes or offices through consumer regardless of the market generally.
electronics content based devices such as
telephones, televisions, radios and personal
devices.
- ------------------------------------------------------------------------------------------------------------------------------------
- Acquired Fund's manager considers the market - When the manager believes it is prudent, the
price of the issuer's securities, its balance manager may invest in other security types.
sheet characteristics and the perceived strength Acquiring Fund has a policy regarding stock
of its management. index futures contracts, a type of derivative
security, to help keep the fund's cash assets
to remain liquid by performing more like stocks.
- ------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT ADVISER AEGON/Transamerica Fund Advisers, Inc. AEGON/Transamerica Fund Advisers, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
SUB-ADVISER Gabelli Asset Management Company American Century Investment Management, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO MANAGERS An investment team led by Marc J. Gabelli An investment team led by Henrik Strabo and Mark S.
Kopinski
- ------------------------------------------------------------------------------------------------------------------------------------
As you can see from the chart above, the investment objectives and certain
investment strategies of the Funds are similar. However, differences do exist.
For example, Acquiring Fund invests primarily in stocks of growing foreign
companies, whereas Acquired Fund invests primarily in common stocks of companies
involved in the global market place. Following the Reorganization, and in the
ordinary course of business as a mutual fund, certain holdings of Acquired Fund
that were transferred to Acquiring Fund in connection with the Reorganization
may be sold. Such sales may result in increased transactional costs for
Acquiring Fund.
RELATIVE PERFORMANCE -- The following table shows the average annual total
return for each Fund and the listed broad-based securities indexes. Average
annual total return is shown for each calendar year since 1998 in the case of
Acquired Fund and since 2001 in the case of Acquiring Fund. The indexes have an
inherent performance advantage over the Funds, since an index has no cash in its
portfolio, and incurs no operating expenses. An investor cannot invest in an
index. Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the deduction of any
sales charges.
- --------------------------------------------------------------------------------
8
- ------------------------------------------------------------------------------------------------
CALENDAR YEAR/ ACQUIRING INDEX -
PERIOD ENDED ACQUIRED FUND (2) INDEX - MSCIWF FUND (1) MSCI-EAFE
- ------------------------------------------------------------------------------------------------
12/31/98 ---N/A N/A 11.21% 20.33%
- ------------------------------------------------------------------------------------------------
12/31/99 ---N/A N/A 30.63% 27.30%
- ------------------------------------------------------------------------------------------------
12/31/00 ---N/A N/A (12.43)% (13.96)%
- ------------------------------------------------------------------------------------------------
12/31/01 (19.99)% (21.21)% (25.05)% (16.52)%
- ------------------------------------------------------------------------------------------------
(1) 02/01/1997 Inception
(2) 9/15/2001 Inception
COMPARISON OF INVESTMENT TECHNIQUES AND RISKS OF THE FUNDS -- The following is a
summary of the principal types of securities in which each Fund may invest and
strategies the Funds may employ in pursuit of their respective investment
objectives. As with any security, an investment in a Fund's shares involves
certain risks, including loss of principal. The Funds are subject to varying
degrees of risk. An investment in either Fund is not a deposit of a bank and is
not insured by the Federal Deposit Insurance Corporation or any other government
agency. The following discussion addresses the primary risks of investing in the
Funds. However, the fact that a particular risk is not identified as a main risk
for the Fund does not mean that the Fund is prohibited from investing its assets
in securities that give rise to that risk. It simply means that the risk is not
a main risk of the Fund. For further information regarding risks of investing in
the Funds, see the SAI.
STOCKS. While stocks have historically outperformed other investments over the
long term, they tend to go up and down more dramatically over the shorter term.
These price movements may result from factors affecting individual companies,
industries or the securities market as a whole. Because the stocks a Fund holds
fluctuate in price, the value of your investments in a Fund will go up and down.
FOREIGN SECURITIES. Investments in foreign securities (including American
Depositary Receipts (ADRs), Global Depositary Receipts (GDRs), and European
Depositary Receipts (EDRs) involve risks relating to political, social and
economic developments abroad, as well as risks resulting from the differences
between the regulations to which U.S. and foreign markets are subject. These
risks include: changes in currency values; currency speculation; currency
trading costs; different accounting and reporting practices; less information
available to the public; less(or different) regulation of securities markets;
more complex business negotiations; less liquidity; more fluctuations in prices;
delays in settling foreign securities transactions; higher costs for holding
shares (custodial fees); higher transaction costs; vulnerability to seizure and
taxes; political instability and small markets; different trading days; and
forward foreign currency contracts for hedging.
CURRENCY RISK. Because the Funds' foreign investments are generally held in
foreign currencies, the Funds are subject to currency risk, meaning a fund could
experience gains or losses on changes in the exchange rate between foreign
currencies and the U.S. dollar.
ENTERTAINMENT AND COMMUNICATIONS STOCKS (ACQUIRED FUND). Acquired Fund may in
securities and communications companies which are strongly affected by worldwide
scientific and technological developments and governmental policies, and
therefore, are generally more volatile than securities of companies not
dependent upon or associated with such issues.
COMPARISON OF FEES AND EXPENSES
The following describes and compares the fees and expenses that you may pay if
you buy and hold shares of the Funds. For further information on the fees and
expenses of Acquiring Fund, see "More Information Regarding the Funds." While
the Reorganization is anticipated to reduce the total operating expenses for
current shareholders of Acquired Fund and will not affect Acquiring Fund's
management fees (as a percentage of the Fund's average daily net assets), ATFA
may be deemed to have a material interest in the proposed Reorganization because
combination of the Funds will relieve ATFA of its obligation to pay sub-advisory
fees to Gabelli under the sub-advisory agreement applicable to Acquired Fund
(although ATFA will continue to pay sub-advisory fees to American Century with
respect to Acquiring Fund), and because the proposed Reorganization is
anticipated to reduce ATFA's obligations under the expense limitation
arrangements discussed below.
- --------------------------------------------------------------------------------
9
- --------------------------------------------------------------------------------
MANAGEMENT FEES - Each Fund pays a management fee:
- ------------------------------------------------------------------------------------------------------------------------------------
FUND
- ------------------------------------------------------------------------------------------------------------------------------------
1.00% of the first $500 million of Acquired Fund's average
Acquired Fund daily net assets; 0.90% of assets over $500 million up to $1
billion; and 0.80% of assets over $1 billion, less 50% of
excess expenses. Expense cap: 1.40% of Acquired Fund's
average daily net assets.
- ------------------------------------------------------------------------------------------------------------------------------------
Acquiring Fund 1.00% of the first $50 million of Acquiring Fund's average
daily net assets; 0.95% of assets over $50 million up to $150
million; 0.90% of assets over $150 million up to $500 million;
and 0.85% of assets over $500 million up to $1 billion; and
0.80% of assets over $1 billion, less 50% of excess expenses,
Expense Cap: 1.40% of Acquiring Fund's average daily net
assets.
- ------------------------------------------------------------------------------------------------------------------------------------
ADMINISTRATION FEES - The Funds pay an administrative services fee to
AEGON/Transamerica Fund Services, Inc. on a cost incurred basis.
DISTRIBUTION AND SERVICES FEES - The distribution (12b-1) and services fees are
the same for both Funds for each respective class of shares. The fees are: 0.35%
for Class A shares, 1.00% for Class B, Class C and Class L shares, and 0.90% for
Class M shares.
EXPENSE LIMITATION ARRANGEMENTS: Expense limitation arrangements are in place
for both of the Funds. Under the terms of the expense limitation arrangements
ATFA has agreed to limit the expenses of the Funds, excluding interest, taxes,
brokerage and extraordinary expenses, with a possibility of recoupment by ATFA
of such expenses paid on behalf of Acquired Fund in the first three years. The
current expense limitation arrangement for each Fund will remain in effect
through at least October 31, 2003. There can be no assurance that the Expense
limitation arrangements will continue or remain at the same level after that
date. The expense limitation for Acquired Fund is 1.40% and the expense
limitation for Acquiring Fund is 1.60%, excluding 12b-1 fees. This information
and similar information is shown below in the table entitled "Annual Fund
Operating Expenses."
It is expected that combining the Funds will lower expenses currently borne by
investors in Acquired Fund. The expenses of each Fund and estimated pro forma
expenses giving effect to the proposed Reorganization are shown in the table
below. Expenses for the Funds are based on the operating expenses incurred for
the period ended April 30, 2002. Pro forma fees and expenses show estimated fees
and expenses of Acquiring Fund after giving effect to the proposed
Reorganization. Pro forma numbers are estimated in good faith and are
hypothetical. (The historical financial information for Acquiring Fund includes
the previous fee levels for IDEX International Equity. On March 1, 2002, IDEX
International Equity became IDEX American Century International with a reduced
fee structure. Had this reduced fee structure been in place for the time period
reflected in the pro forma example, such reduction for shareholders would be
apparent.) (The expenses included for L shares are estimates, as L shares had
not commenced operations as of April 30, 2002.)
- --------------------------------------------------------------------------------
10
- --------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES (as a percentage of each Fund's average daily net assets)
- -----------------------------------------------------------------------------------------------------------------------------------
Distribution & Total Annual
service (12b-1) Fund Operating Expense Net Operating
Management Fees fees Other Expenses Expenses Reduction(1) Expenses
- -----------------------------------------------------------------------------------------------------------------------------------
Acquiring Fund
- -----------------------------------------------------------------------------------------------------------------------------------
Class A shares 1.00% 0.35% 2.05% 3.40% 1.45% 1.95%
- -----------------------------------------------------------------------------------------------------------------------------------
Class B shares 1.00% 1.00% 2.05% 4.05% 1.45% 2.60%
- -----------------------------------------------------------------------------------------------------------------------------------
Class C shares 1.00% 1.00% 2.05% 4.05% 1.45% 2.60%
- -----------------------------------------------------------------------------------------------------------------------------------
Class M shares 1.00% 0.90% 2.05% 3.95% 1.45% 2.50%
- -----------------------------------------------------------------------------------------------------------------------------------
Class L shares(2) 1.00% 1.00% 2.05% 4.05% 1.45% 2.60%
- -----------------------------------------------------------------------------------------------------------------------------------
Acquired Fund
- -----------------------------------------------------------------------------------------------------------------------------------
Class A shares 1.00% 0.35% 0.91% 2.26% 0.51% 1.75%
- -----------------------------------------------------------------------------------------------------------------------------------
Class B shares 1.00% 1.00% 0.91% 2.91% 0.51% 2.40%
- -----------------------------------------------------------------------------------------------------------------------------------
Class C shares 1.00% 1.00% 0.91% 2.91% 0.51% 2.40%
- -----------------------------------------------------------------------------------------------------------------------------------
Class M shares 1.00% 0.90% 0.91% 2.81% 0.51% 2.30%
- -----------------------------------------------------------------------------------------------------------------------------------
Class L shares(2) 1.00% 1.00% 0.91% 2.91% 0.51% 2.40%
- -----------------------------------------------------------------------------------------------------------------------------------
Pro Forma -
Acquiring Fund
including Acquired
Fund
- -----------------------------------------------------------------------------------------------------------------------------------
Class A shares 0.98% 0.35% 1.35% 2.68% 0.93% 1.75%
- -----------------------------------------------------------------------------------------------------------------------------------
Class B shares 0.98% 1.00% 1.35% 3.33% 0.93% 2.40%
- -----------------------------------------------------------------------------------------------------------------------------------
Class C shares 0.98% 1.00% 1.35% 3.33% 0.93% 2.40%
- -----------------------------------------------------------------------------------------------------------------------------------
Class M shares 0.98% 0.90% 1.35% 3.23% 0.93% 2.30%
- -----------------------------------------------------------------------------------------------------------------------------------
Class L shares(2) 0.98% 1.00% 1.35% 3.33% 0.93% 2.40%
- -----------------------------------------------------------------------------------------------------------------------------------
(1) Contractual arrangement with ATFA through 10/31/03 for expenses other
than distribution and service fees (12b-1 fees) that exceed 1.40% for
Acquired Fund and 1.60% for Acquiring Fund.
(2) L share information is included for your reference; these shares did not
commence operations until November 11, 2002.
EXAMPLE. This example is intended to help you compare the cost of investing in
each Fund and in the combined Funds on a pro forma basis. It shows the
cumulative expenses you would pay if you invested $10,000 and held your shares
for various time periods, with a 5% annual return and Fund operating expenses
remaining the same. This return is for illustration purposes and is not
guaranteed. Actual costs may be higher or lower. (NOTE: L shares did not exist
on 4/3002, so the expenses for Class L shares is estimated.)
If the shares are redeemed at the end of each period:
====================================================================================================================
1 YEAR* 3 YEARS* 5 YEARS* 10 YEARS*
- --------------------------------------------------------------------------------------------------------------------
Acquiring Fund
- --------------------------------------------------------------------------------------------------------------------
Class A shares $737 $1,410 $2,104 $3,940
- --------------------------------------------------------------------------------------------------------------------
Class B shares $763 $1,400 $2,054 $4,020
- --------------------------------------------------------------------------------------------------------------------
Class C shares $263 $1,100 $1,954 $4,159
- --------------------------------------------------------------------------------------------------------------------
Class M shares $450 $1,161 $1,988 $4,133
- --------------------------------------------------------------------------------------------------------------------
Class L shares $463 $1,100 $1,954 $4,159
- --------------------------------------------------------------------------------------------------------------------
Acquired Fund
- --------------------------------------------------------------------------------------------------------------------
Class A shares $718 $1,171 $1,650 $2,965
- --------------------------------------------------------------------------------------------------------------------
Class B shares $743 $1,153 $1,588 $3,043
- --------------------------------------------------------------------------------------------------------------------
Class C shares $243 $853 $1,488 $3,197
- --------------------------------------------------------------------------------------------------------------------
Class M shares $430 $915 $1,525 $3,170
- --------------------------------------------------------------------------------------------------------------------
Class L shares $443 $853 $1,488 $3,197
- --------------------------------------------------------------------------------------------------------------------
Pro Forma - Acquiring Fund including
Acquired Fund
- --------------------------------------------------------------------------------------------------------------------
Class A shares $718 $1,253 $1,814 $3,332
- --------------------------------------------------------------------------------------------------------------------
Class B shares $743 $1,238 $1,756 $3,411
- --------------------------------------------------------------------------------------------------------------------
Class C shares $243 $938 $1,656 $3,559
- --------------------------------------------------------------------------------------------------------------------
Class M shares $430 $999 $1,692 $3,533
- --------------------------------------------------------------------------------------------------------------------
Class L shares $443 $938 $1,656 $3,559
====================================================================================================================
- --------------------------------------------------------------------------------
11
- --------------------------------------------------------------------------------
If the shares are not redeemed at the end of each period:
====================================================================================================================
- --------------------------------------------------------------------------------------------------------------------
1 YEAR* 3 YEARS* 5 YEARS* 10 YEARS*
- --------------------------------------------------------------------------------------------------------------------
Acquiring Fund
- --------------------------------------------------------------------------------------------------------------------
Class A shares $737 $1,410 $2,104 $3,940
- --------------------------------------------------------------------------------------------------------------------
Class B shares $263 $1,100 $1,954 $4,020
- --------------------------------------------------------------------------------------------------------------------
Class C shares $263 $1,100 $1,954 $4,159
- --------------------------------------------------------------------------------------------------------------------
Class M shares $351 $1,161 $1,988 $4,133
- --------------------------------------------------------------------------------------------------------------------
Class L shares $263 $1,100 $1,954 $4,159
- --------------------------------------------------------------------------------------------------------------------
Acquired Fund
- --------------------------------------------------------------------------------------------------------------------
Class A shares $718 $1,171 $1,650 $2,965
- --------------------------------------------------------------------------------------------------------------------
Class B shares $243 $853 $1,488 $3,043
- --------------------------------------------------------------------------------------------------------------------
Class C shares $243 $853 $1,488 $3,197
- --------------------------------------------------------------------------------------------------------------------
Class M shares $331 $915 $1,525 $3,170
- --------------------------------------------------------------------------------------------------------------------
Class L shares $243 $853 $1,488 $3,197
- --------------------------------------------------------------------------------------------------------------------
Pro Forma - Acquiring Fund including
Acquired Fund
- --------------------------------------------------------------------------------------------------------------------
Class A shares $718 $1,253 $1,814 $3,332
- --------------------------------------------------------------------------------------------------------------------
Class B shares $243 $938 $1,656 $3,411
- --------------------------------------------------------------------------------------------------------------------
Class C shares $243 $938 $1,656 $3,559
- --------------------------------------------------------------------------------------------------------------------
Class M shares $331 $999 $1,692 $3,533
- --------------------------------------------------------------------------------------------------------------------
Class L shares $243 $938 $1,656 $3,559
====================================================================================================================
- -----------------------------------------------------------------------------------------------------------------------------------
SHAREHOLDER FEES (fees paid directly from your investment)
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS OF SHARES
- -----------------------------------------------------------------------------------------------------------------------------------
A B C L M
- -----------------------------------------------------------------------------------------------------------------------------------
Maximum sales charge
(load) imposed on
purchases (as a % of 5.50% None None None 1.00%
offering price)
- -----------------------------------------------------------------------------------------------------------------------------------
Maximum deferred sales
charge (load) (as a
percentage of purchase None(a) 5.00% None 2.00% 1.00%
price or redemption
proceeds, whichever is
lower)
- -----------------------------------------------------------------------------------------------------------------------------------
(a) Certain purchases of Class A shares in amounts of $1 million or more are
subject to a 1% contingent deferred sales charge for 24 months after
purchase.
ADDITIONAL INFORMATION ABOUT ACQUIRING FUND
INVESTMENT ADVISER - AEGON/Transamerica Fund Advisers, Inc. ("ATFA") is
Acquiring Fund's investment adviser. On April 30, 2002, the aggregate assets of
all of the mutual funds under the investment management of ATFA were
approximately $27.1 billion. IDEX has entered into an Investment Advisory
Agreement ("Advisory Agreement") on behalf of Acquiring Fund with ATFA wherein
ATFA supervises Acquiring Fund's investments and conducts its investment
program. The Advisory Agreement provides that ATFA will perform the following
services or cause them to be performed by others to: (i) furnish investment
advice and recommendations (ii) supervise the purchase and sale of securities as
directed by appropriate Fund officers, and (iii) be responsible for the
administration of the Fund. The Advisory Agreement is not assignable and may be
terminated without penalty upon 60 days written notice at the option of either
IDEX, ATFA, or by a vote of shareholders of Acquiring Fund. Advisory fees are
computed and accrued daily and paid monthly.
- --------------------------------------------------------------------------------
12
- --------------------------------------------------------------------------------
SUB-ADVISER --American Century Investment Management, Inc. is Acquiring Fund's
sub-adviser. On April 30, 2002, the aggregate assets of all of the mutual funds
under the investment management of American Century were approximately $86.6
billion. American Century has overall responsibility for the management of the
Fund. ATFA and American Century have entered into an agreement that requires
American Century to: provide investment sub-advisory, statistical and research
services to Acquiring Fund; supervise and arrange for the purchase and sale of
securities on behalf of the Fund; and provide for the maintenance and
compilation of records pertaining to the investment sub-advisory function. The
agreement with American Century can be terminated by the Board of Trustees of
IDEX upon 60 days' written notice of either party. Sub-Advisory fees are
computed and accrued daily and paid monthly.
INVESTMENT PERSONNEL -- An investment team manages the portfolio for American
Century. The following individuals lead the investment team in the
responsibility for the day-to-day management of Acquiring Fund:
- HENRIK STRABO -Chief Investment Officer - International Equities,
has been a member of the team since 2001. He joined American
Century in 1993 and serves as a member of other management teams
for various American Century funds.
- MARK S. KOPINSKI -Senior Vice President and Senior Portfolio
Manager, has been a member of the team since 2001. Mr. Kopinski
joined American Century in April 1997 and serves as a member of
other management teams for various American Century funds. Prior
to joining American Century in 1997, Mr. Kopinski served as Vice
President and portfolio manager at Federated Investments. From
1990-1995, he served as Vice President and a member of American
Century International Growth and International Discovery.
PERFORMANCE OF ACQUIRING FUND -- The bar chart and table below provide an
indication of the risks of investing in Acquiring Fund by showing (on a calendar
year basis) Acquiring Fund's annual total return for its first calendar year of
operations and by showing (on a calendar year basis) how Acquiring Fund's
average annual returns for a one-year period compare to those of a broad-based
securities market index--the MSCI-EAFE Index. The information below is based on
the performance of the Class A shares of Acquiring Fund and does not reflect the
impact of sales charges. The bar chart and table assume reinvestment of
dividends and capital gains distributions. The Fund's past performance is not an
indication of how the Fund will perform in the future.
One year total return as of 12/31/01(%)
Insert Bar graph - 11.21% (1998); 30.63% (1999); (12.43)%
(2000); (25.05)%(2001)
During the period shown in the chart, Acquiring
Fund's best quarterly performance was 23.80% for the
quarter ended 12/31/99, and the Fund's worst
quarterly performance was -(16.94)% for the quarter
ended 9/30/98.
The table below shows the average annual total returns of Acquiring Fund if you
average actual performance over various lengths of time, compared to the
MSCI-EAFE Index. An index has an inherent performance advantage over Acquiring
Fund since it has no cash in its portfolio, imposes no sales charges and incurs
no operating expenses. An investor cannot invest directly in an index.
Additional information about Acquiring Fund is included in the section "More
Information Regarding the Funds."
- --------------------------------------------------------------------------------
13
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN (for the periods ended December 31, 2001)**
- ----------------------------------------------------------------------------------
10 years or
One Year since inception
- ----------------------------------------------------------------------------------
Acquiring Fund
- ----------------------------------------------------------------------------------
Return before taxes* (29.17)% (0.87)%
- ----------------------------------------------------------------------------------
Return after taxes on distributions* (29.17)% (1.62)%
- ----------------------------------------------------------------------------------
Return after taxes on distributions
and sale of fund shares* (17.76)% (0.68)%
- ----------------------------------------------------------------------------------
MSCI-EAFE (21.21)% 1.92%
- ----------------------------------------------------------------------------------
*The after tax returns are calculated using the historic highest
individual federal; marginal income tax rates and do not reflect the
impact of state and local taxes.
** Returns reflect the maximum sales load of 5.50% and include the
reinvestment of dividends and capital gains.
For more information about Acquiring Funds performance including a discussion of
factors that materially impact its performance, please see Appendix B.
INFORMATION ABOUT THE REORGANIZATION
THE REORGANIZATION PLAN -- The Reorganization Plan provides for the transfer of
all of the assets and liabilities of Acquired Fund to Acquiring Fund solely in
exchange for shares of Acquiring Fund. Acquired Fund will distribute the shares
of Acquiring Fund received in the exchange to its shareholders, and then
Acquired Fund will be liquidated.
After the Reorganization, each shareholder of Acquired Fund will own shares in
Acquiring Fund having an aggregate value equal to the aggregate value of shares
of Acquired Fund held by that shareholder as of the close of business on the
business day preceding the Closing.
Until the Closing, shareholders of Acquired Fund will continue to be able to
redeem their shares. Redemption requests received after the Closing will be
treated as requests received by Acquiring Fund for the redemption of its shares
received by the shareholder in the Reorganization.
The obligations of the Funds under the Reorganization Plan are subject to
various conditions, including approval of the shareholders of Acquired Fund. The
Reorganization Plan also requires that the Funds take, or cause to be taken, all
actions, and do or cause to be done, all things reasonably necessary, proper or
advisable to consummate and make effective the transactions contemplated by the
Reorganization Plan. The Reorganization Plan may be terminated by mutual
agreement of the parties or on certain other grounds. For a complete description
of the terms and conditions of the Reorganization, see the Reorganization Plan
at Appendix A, which modifies the foregoing summary of the Reorganization Plan
in its entirety.
REASONS FOR THE REORGANIZATION -- The Reorganization is one of several
reorganizations that are proposed or have already taken place among various IDEX
funds. The IDEX complex has grown in recent years through the addition of many
funds. IDEX management has proposed the consolidation of several of the IDEX
funds that they believe have similar or compatible strategies. Fund performance
is also a key factor management considers when evaluating the funds to present
to the Board for its consideration. The Reorganization is designed to be part of
the proposed reduction of the substantial overlap in funds offered in the IDEX
complex, thereby helping to eliminate inefficiencies and confusion about
overlapping funds. IDEX also believes that the Reorganization may benefit
shareholders by resulting in a surviving fund with a greater asset base. This is
expected to provide greater investment opportunities for Acquiring Fund and the
potential to take larger portfolio positions. Based upon these considerations,
among others, the IDEX Board determined that the Funds should be reorganized.
BOARD CONSIDERATION -- The proposed Reorganization was presented to the IDEX
Board of Trustees for consideration and approval at a Special Meeting held
December 2, 2002. For the reasons discussed below, the Trustees, including all
of the Trustees who are not "interested persons" (as defined in the Investment
Company Act of 1940), determined that the interests of the shareholders of the
respective Funds would not be diluted as a result of the proposed
Reorganization, and that the proposed Reorganization was in the best interests
of the Funds and their shareholders.
- --------------------------------------------------------------------------------
14
- --------------------------------------------------------------------------------
The IDEX Board of Trustees, in recommending the proposed transaction, considered
a number of factors, including the following:
1. expense ratios and information regarding fees and expenses of Acquired
Fund and Acquiring Fund;
2. estimates that show that combining the Funds should result in lower
expenses because of economies of scale;
3. elimination of duplication of costs and inefficiencies of having two
similar funds;
4. the Reorganization would not dilute the interests of the Funds' current
shareholders;
5. the relative investment performance and risks of Acquiring Fund as
compared to Acquired Fund;
6. the focus of investments by Acquired Fund, and that those types of
investments are out of favor in the market;
7. the similarity of Acquiring Fund's investment objectives, certain of its
policies and restrictions to those of Acquired Fund;
8. the tax-free nature of the Reorganization to Acquired Fund and its
shareholders;
9. the estimated costs to be incurred by ATFA as a result of the
Reorganization; and
10. similar funds managed by American Century and the performance of those
funds.
The Board also considered the future potential benefits to IDEX in that its
costs to administer both Funds may be reduced if the Reorganization is approved.
THE IDEX BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS OF ACQUIRED FUND APPROVE
THE REORGANIZATION.
TAX CONSIDERATIONS -- The Reorganization is intended to qualify for Federal
income tax purposes as a tax-free reorganization under Section 368 of the
Internal Revenue Code of 1986, as amended (the "Code"). Accordingly, pursuant to
this treatment, neither Acquired Fund, nor Acquiring Fund, is expected to
recognize any gain or loss for federal income tax purposes from the transactions
contemplated by the Reorganization Plan. As a condition to the closing of the
Reorganization, the Funds will receive an opinion from the law firm of Dechert
to the effect that the Reorganization will qualify as a tax-free reorganization
for Federal income tax purposes. That opinion will be based in part upon certain
assumptions and upon certain representations made by the Funds.
Immediately prior to the Reorganization, Acquired Fund will pay a dividend or
dividends which, together with all previous dividends, will have the effect of
distributing to the shareholders all of Acquired Fund's investment company
taxable income for taxable years ending on or prior to the Reorganization
(computed without regard to any deduction for dividends paid) and all of its net
capital gains, if any, realized in taxable years ending on or prior to the
Reorganization (after reduction for any available capital loss carryforward).
Such dividends will be included in the taxable income of Acquired Fund's
shareholders.
EXPENSES OF THE REORGANIZATION - ATFA will pay all of the expenses relating to
the Reorganization, including, but not limited to, the costs of the proxy
solicitation and necessary filing with the SEC.
ADDITIONAL INFORMATION ABOUT THE FUNDS
FORM OF ORGANIZATION -- Each of the Funds is a series of IDEX Mutual Funds, an
open-end management company organized as a Massachusetts business trust. IDEX is
governed by a Board of Trustees, which consists of ten Trustees. For more
information regarding the history of IDEX, please see the SAI.
DISTRIBUTOR - AFSG Securities Corporation ("AFSG"), located at 4333 Englewood
Road NE, Cedar Rapids, Iowa 52499, is principal distributor for both Funds. AFSG
is an affiliate of IDEX and ATFA. ASFG underwrites and distributes all classes
of Fund shares and bears the expense of offering these shares to the public. The
Funds pay AFSG, or its agent, a fee for those services. Please see "More
Information Regarding the Funds," below, for additional information regarding
the fees paid to ASFG by the Funds.
DIVIDENDS AND OTHER DISTRIBUTIONS -- Each Fund pays dividends from net
investment income, and distributes net capital gains, if any, at least annually.
Dividends and distributions of each Fund are automatically reinvested in
additional shares of the respective class of the particular Fund, unless the
shareholder requests cash. There are no fees or sales charges on reinvestments.
- --------------------------------------------------------------------------------
15
- --------------------------------------------------------------------------------
If the Reorganization Plan is approved by shareholders of Acquired Fund, then as
soon as practicable before the Closing, Acquired Fund will pay its shareholders
a cash distribution of all undistributed net investment income and undistributed
realized net capital gains.
CAPITALIZATION -- The following table shows, on an unaudited basis, the
capitalization of each Fund as of 4/30/02 and, on a pro forma basis, as of
4/30/02, giving effect to the Reorganization (Class L shares were not offered
until November 11, 2002):
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS NET ASSET VALUE PER SHARE SHARES OUTSTANDING
- -----------------------------------------------------------------------------------------------------------------------------------
ACQUIRING FUND
- -----------------------------------------------------------------------------------------------------------------------------------
Class A Shares $7,786,166 $8.60 904,912
- -----------------------------------------------------------------------------------------------------------------------------------
Class B Shares $6,826,942 $8.34 818,463
- -----------------------------------------------------------------------------------------------------------------------------------
Class C Shares $1,631,713 $8.34 195,619
- -----------------------------------------------------------------------------------------------------------------------------------
Class M Shares $1,147,864 $8.38 136,955
- -----------------------------------------------------------------------------------------------------------------------------------
ACQUIRED FUND
- -----------------------------------------------------------------------------------------------------------------------------------
Class A Shares $19,119,363 $7.22 2,648,817
- -----------------------------------------------------------------------------------------------------------------------------------
Class B Shares $23,535,008 $7.14 3,295,373
- -----------------------------------------------------------------------------------------------------------------------------------
Class C Shares $9,120,542 $7.14 1,277,058
- -----------------------------------------------------------------------------------------------------------------------------------
Class M Shares $3,886,384 $7.15 543,281
- -----------------------------------------------------------------------------------------------------------------------------------
PRO FORMA - ACQUIRING FUND
INCLUDING ACQUIRED FUND
- -----------------------------------------------------------------------------------------------------------------------------------
Class A Shares $26,905,529 $8.60 3,126,975
- -----------------------------------------------------------------------------------------------------------------------------------
Class B Shares $30,361,950 $8.34 3,640,007
- -----------------------------------------------------------------------------------------------------------------------------------
Class C Shares $10,752,255 $8.34 1,289,044
- -----------------------------------------------------------------------------------------------------------------------------------
Class M Shares $5,034,248 $8.38 600,650
- -----------------------------------------------------------------------------------------------------------------------------------
GENERAL INFORMATION ABOUT THE PROXY STATEMENT
SOLICITATION OF PROXIES -- Proxies are being solicited at the request of the
IDEX Board of Trustees. Solicitation of proxies is being made primarily by the
mailing of this Notice and Proxy Statement/Prospectus with its enclosures on or
about December 2, 2002. (Shareholders of Acquired Fund whose shares are held by
nominees, such as brokers, can vote their proxies by contacting their respective
nominee.) In addition to the solicitation of proxies by mail, employees of IDEX
and its affiliates, without additional compensation, may solicit proxies in
person or by telephone, telegraph, facsimile, or oral communication. The Funds
have retained {Name of Solicitor} the ("Solicitor"), a professional proxy
solicitation firm, to assist with any necessary solicitation of proxies.
Shareholders of Acquired Fund may receive a telephone call from the Solicitor
asking the shareholder to vote. The estimated costs for the services of the
Solicitor are estimated to be approximately $4,391, plus applicable postage.
In all cases where a proxy is solicited by telephone, the Solicitor is required
to ask the person to provide identifying registration data, including full name
and address, and, if known, the number of shares owned. If the shareholder is a
corporation or other entity, the Solicitor will ask for the title of the person
and for confirmation that the person is authorized to direct the voting of the
shares. The Solicitor will advise the shareholder that the shareholder can vote
his or her shares over the telephone and will ask if the shareholder would like
to cast a vote. Although the Solicitor's representative is permitted to answer
questions about the process, he or she is not permitted to recommend to the
shareholder how to vote, other than to read any recommendations set forth in the
Proxy Statement/Prospectus. The Solicitor will then record the shareholder's
instructions on the Proxy Card. Within 72 hours, the shareholder will be sent a
confirmation of his or her vote asking the shareholder to call the Solicitor
immediately if his or her instructions are not correctly reflected in the
confirmation.
- --------------------------------------------------------------------------------
16
- --------------------------------------------------------------------------------
If a shareholder wishes to participate in the Special Meeting, but does not wish
to give a proxy by telephone, the shareholder may still submit the proxy
originally sent with the Proxy Statement/Prospectus, attend in person, vote
online or by facsimile. Should shareholder require additional information
regarding the proxy or require replacement of the proxy, they may contact IDEX
Customer Service toll-free at (888) 233-4339.
A shareholder may revoke the accompanying proxy at any time prior to its use by
filing with IDEX a written revocation or duly executed proxy bearing a later
date. In addition, any shareholder who attends the Special Meeting of Acquired
Fund shareholders in person may vote by ballot at the Special Meeting, thereby
canceling any proxy previously given. However, attendance at the Special
Meeting, by itself, will not revoke a previously tendered proxy. The persons
named in the accompanying proxy will vote as directed by the proxy, but in the
absence of voting directions in any proxy that is signed and returned, they
intend to vote "FOR" the Reorganization proposal, and may vote in their
discretion with respect to other matters not now known to the IDEX Board of
Trustees that may be presented at the meeting.
VOTING RIGHTS -- Shares of the Funds entitle their holders to one vote per share
as to any matter on which the holder is entitled to vote, and each fractional
share shall be entitled to a proportionate fractional vote.
Shareholders of Acquired Fund at the close of business on November 15, 2002 (the
"Record Date") will be entitled to be present at the Special Meeting to vote
with respect to their shares owned as of that Record Date. As of the Record
Date, ________ shares of Acquired Fund were outstanding and entitled to vote.
To become effective, the proposed Reorganization must be approved by a "vote of
the majority of the outstanding voting securities" of Acquired Fund, as defined
in the 1940 Act. The "vote of a majority of the outstanding voting securities"
means the lesser of the vote of (i) 67% or more of the shares of Acquired Fund
entitled to vote thereon present at the Special Meeting if the holders of more
than 50% of such outstanding shares are present in person or represented by
proxy; or (ii) more than 50% of such outstanding shares of Acquired Fund
entitled to vote thereon.
Acquired Fund must have a quorum to conduct its business at the Special Meeting.
The holders of a majority of outstanding shares present in person or by proxy
shall constitute a quorum. In the absence of a quorum, a majority of outstanding
shares entitled to vote, present in person or by proxy, may adjourn the meeting
from time to time until a quorum is present.
If a shareholder abstains from voting as to any matter, or if a broker returns a
"non-vote" proxy, indicating a lack of authority to vote on a matter, the shares
represented by the abstention or non-vote will be deemed present at the Special
Meeting for purposes of determining a quorum. However, abstentions and broker
non-votes will not be deemed represented at the Special Meeting for purposes of
calculating the vote on any matter. As a result, an abstention or broker
non-vote will have the same effect as a vote against the Reorganization. Prior
to the Special Meeting, IDEX expects that broker-dealer firms holding their
shares of the Funds in "street name" for their customers will request voting
instructions from their customers and beneficial owners.
To the knowledge of IDEX, as of November 15, 2002, no Trustee of IDEX
beneficially owned 1% or more of the outstanding shares of either Fund, and the
officers and Trustees of IDEX beneficially owned, as a group, less than 1% of
the shares of either Fund.
Appendix C hereto lists the persons that, as of November 15, 2002, owned
beneficially 5% or more of the outstanding shares of either Fund.
OTHER MATTERS TO COME BEFORE THE SPECIAL MEETING -- The Board of Trustees does
not know of any matters to be presented at the Special Meeting other than those
described in this Proxy Statement/Prospectus. If other business should properly
come before the Special Meeting, the proxy holders will vote thereon in
accordance with their best judgment.
SHAREHOLDER PROPOSALS -- The Funds are not required to hold regular annual
meetings and, in order to minimize their costs, do not intend to hold meetings
of shareholders unless so required by applicable law, regulation, regulatory
policy or if otherwise deemed advisable by the Funds' management. Therefore it
is not practicable to specify a date by which shareholder proposals must be
received in order to be incorporated in an upcoming proxy statement for an
annual Special Meeting or to be submitted to shareholders of the Funds.
- --------------------------------------------------------------------------------
17
- --------------------------------------------------------------------------------
Shareholders wishing to submit proposals should send their written proposals to
the address set forth on the cover of this Proxy Statement/Prospectus a
reasonable time prior to the date of a meeting of shareholders to be considered
for inclusion in the proxy materials for a meeting. Timely submission of a
proposal does not, however, necessarily mean that the proposal will be included.
Persons named as proxies for any subsequent shareholder meeting will vote in
their discretion with respect to proposals submitted on an untimely basis.
INFORMATION ABOUT THE FUNDS -- Proxy materials, reports and other information
filed by IDEX, on behalf of the Funds, can be inspected and copied at the Public
Reference Facilities maintained by the SEC at 450 Fifth Street, NW, Washington,
DC 20549. The SEC maintains an Internet World Wide Web site (http://www.sec.gov)
which contains other information about the Funds.
REPORTS TO SHAREHOLDERS -- IDEX will furnish, without charge, a copy of the most
recent Annual Report and Semi-Annual Report regarding the Funds upon request.
Requests for such reports should be directed to IDEX Mutual Funds at P.O. Box
9015, Clearwater, FL 33758-9015, telephone (888) 233-4339.
IN ORDER THAT THE PRESENCE OF A QUORUM AT THE SPECIAL MEETING MAY BE ASSURED,
PROMPT EXECUTION AND RETURN OF THE ENCLOSED PROXY IS REQUESTED. A
SELF-ADDRESSED, POSTAGE-PAID ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE.
PLEASE NOTE: YOU ALSO MAY INSTEAD VOTE BY TELEPHONE, THROUGH THE INTERNET, OR BY
FACSIMILE BY FOLLOWING THE ENCLOSED INSTRUCTIONS. DO NOT RETURN YOUR PROXY CARD
IF YOU VOTE BY ONE OF THESE METHODS UNLESS YOU LATER DECIDE TO CHANGE YOUR VOTE.
--------------------------------------
John K. Carter, Vice President,
Secretary & General Counsel
December 13, 2002
- --------------------------------------------------------------------------------
18
- --------------------------------------------------------------------------------
MORE INFORMATION REGARDING THE FUNDS
DISTRIBUTION PLANS AND 12b-1 FEES. The Funds have adopted separate Distribution
Plans pursuant to Rule 12b-1 under the Investment Company Act of 1940 ("1940
Act") (individually, a "12b-1 Plan," and collectively, the "12b-1 Plans"),
applicable to Class A, Class B, Class C, Class L and Class M shares of the
Funds.
The distributor for the Funds, AFSG Securities Corporation ("AFSG") receives the
sales fees or loads imposed on these shares (up to 5.50% of the offering price,
which includes the sales load) and re-allows a portion of those fees to the
sellers of the shares. AFSG also receives service and distribution fees under
the 12b-1 Plans as follows:
Distribution of Class A Shares. For these shares, the Funds may pay AFSG a
distribution fee of up to 0.35% annually which includes a service fee of 0.25%.
Fees are based on the average daily net assets of Class A shares. However, if
the service fees rise, the distribution fee is lowered so that the total fees
payable don't exceed 0.35% annually.
Distribution of Class B Shares. For these shares, the Funds may pay AFSG an
annual distribution fee of up to 1.00%, which includes an annual service fee of
0.25%.
Distribution of Class C Shares. For these shares, the Funds may pay AFSG an
annual distribution fee of up to 1.00%, which includes a service fee of 0.25%.
Distribution of Class L Shares. For these shares, the Funds may pay AFSG an
annual distribution fee of up to 1.00%, which includes a service fee of 0.25%.
Distribution of Class M Shares. For these shares, the Funds may pay AFSG an
annual distribution fee of up to 0.90%, which includes a service fee of 0.25%.
Because the Funds have 12b-1 Plans, even though Class B and Class C shares do
not carry an up-front sales load, the higher distribution and service fees
payable by those shares may, over time, be higher than the total fees paid by
owners of Class A and Class M shares.
OTHER EXPENSES. In addition to the management fee and other fees described
previously, each Fund pays other expenses, such as legal, audit, transfer agency
and custodian fees, and the compensation of Trustees who are not affiliated with
IDEX. Most Fund expenses are allocated proportionately among all of the
outstanding shares of IDEX.
PURCHASING SHARES
IDEX and AFSG reserve the right to reject any purchase order. Please note that
cash, travelers checks, third party checks, money orders and checks drawn on
non-U.S. banks (even if payment is effected through a U.S. bank) generally will
not be accepted. IDEX reserves the right to waive minimum investment amounts.
CHOOSING A SHARE CLASS. IDEX offers five shares classes for the Funds, Class A,
Class B, Class C, Class L and Class M. Effective November 11, 2002, Class C and
Class M were closed to new investors. Class A shares has an initial sales charge
of 5.50%, in most cases, and an annual 12b-1 fee of 0.35%; Class B has no
up-front sales charge, a deferred sales charge starting at 5.00% if you sell in
6 years or less, and an annual 12b-1 fee of 1.00%; Class C has no up-front sales
load and no deferred sales charge with an annual 12b-1 fee of 1.00%; Class L has
a 1.00% up-front sales load, with an annual 1.00% 12b-1 fee and a contingent
deferred sales charge of 2% if redeemed during the first 12 months of purchase,
and 1% if redeemed during the second 12 months of purchase; and Class M has an
initial sales charge of 1.00% with a deferred sales charge of 1.00% if you sell
in the first 18 months, and an annual 12b-1 fee of 0.90%.
PRICE OF SHARES. When you buy shares, you pay Net Asset Value ("NAV") plus any
applicable sales charge. When you sell your shares, you receive NAV minus any
applicable deferred sales charge. Exchange orders are effected at NAV.
DETERMINATION OF NET ASSET VALUE. The NAV per share of each Fund is computed as
of the close of regular trading hours on the New York Stock Exchange (normally 4
p.m. Eastern time) on days when the Exchange is open. The Exchange is open
Monday through Friday, except on observation of the following holidays:
generally New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas.
Each Fund's NAV is generally based upon the market value of securities held in
the Fund's portfolio. If market prices are not available, the fair value of
securities is determined using procedures approved by the IDEX Board of
Trustees.
AUTOMATIC INVESTMENT PLAN. With an Automatic Investment Plan ("AIP"), a level
dollar amount is invested monthly and payment is deducted electronically from
your bank account. Call or write IDEX Customer service to establish an AIP.
- --------------------------------------------------------------------------------
19
- --------------------------------------------------------------------------------
MINIMUM ACCOUNT BALANCE. IDEX reserves the right to liquidate sufficient shares
to recover annual Transfer Agent fees should the investor fail to maintain
his/her account value at a minimum of $500 . If your balance is below $250 due
to redemptions, your account will be charged a fee and be liquidated; any
applicable contingent deferred sales charge ("CDSC") will be deducted, and a
check will be mailed to you.
EXECUTION OF REQUESTS. Purchase and sale requests are executed at the NAV next
determined after the order is received in proper form by the Transfer Agent or
Distributor. A purchase order will be deemed to be in proper order form when all
of the required steps set forth in the IDEX prospectus under the section
"Shareholder Information" have been completed. If you purchase by wire, however,
the order will be deemed to be in proper order after the telephone notification
and the federal funds wire have been received. If you purchase by wire, you must
submit an application form in a timely manner. If an order or payment is
received after the close of regular trading on the New York Stock Exchange
(normally, 4:00pm Eastern Time), the shares will not be credited until the next
business day.
You will receive a confirmation of each new transaction in your account, which
also will show you the number of Fund shares you own including the number of
shares being held in safekeeping by the Transfer Agent for your account. You may
rely on these confirmations in lieu of certificates as evidence of your
ownership. IDEX does not issue share certificates on behalf of its FUNDS.
TELEPHONE ORDERS. IDEX and its Transfer Agent will not be responsible for the
authenticity of phone instructions or losses, if any, resulting from
unauthorized shareholder transactions if they reasonably believe that such
instructions were genuine. IDEX and its Transfer Agent have established
reasonable procedures to confirm that instructions communicated by telephone are
genuine. These procedures include recording telephone instructions for exchanges
and expedited redemptions, requiring the caller to give certain specific
identifying information, and providing written confirmation to shareholders of
record not later than five days following such transaction. If IDEX and its
Transfer Agent do not employ these procedures, they may be liable for losses due
to unauthorized or fraudulent telephone instructions. To enjoy this privilege,
you must establish the privilege in advance, when you open your account, or by
adding this feature to your existing account.
EXCHANGE PRIVILEGES AND RESTRICTIONS. An exchange privilege is available. You
may exchange $500 or more of one fund for shares in the same class of another
fund. Any CDSC will be calculated from the date that you purchased your original
shares. Exchange requests may be made in writing to the Transfer Agent or by
calling IDEX Customer Service at (888) 233-4339. IDEX does not permit market
timing or excessive trading and has adopted special policies to discourage these
activities.
HOW TO REDEEM SHARES
Shares of the Funds will be redeemed at the NAV (less any applicable CDSC and/or
federal income tax withholding) next determined after receipt of a redemption
request in good form on any day that the New York Stock Exchange is open for
business. Payment by bank wire is subject to a $10 service fee, in addition to
the fees your bank may charge.
SYSTEMATIC WITHDRAWAL PLAN. You can establish a Systematic Withdrawal Plan
("SWP") either at the time you open your account or at a later date. Call IDEX
Customer Service at (888) 233-4339 for assistance. You must have a minimum
account balance of $10,000 for this privilege.
PAYMENTS. Payments to shareholders for shares redeemed or repurchased ordinarily
will be made within three days after receipt by the Transfer Agent of a written
request in good order. To request payment, you may also call IDEX Customer
Service at (888) 233-4339 and make your request using the automated IDEX
In-TouchSM system, by person-to-person, or by accessing your account on the
internet. Maximum amount per day is the lesser of your available balance or
$50,000.
The proceeds of your redemption may be paid by check, or by direct deposit to
your bank. Shares will normally re redeemed for cash, although each fund retains
the right to redeem its shares in kind under unusual circumstances in order to
protect the interests of shareholders by the delivery of securities selected
from its assets at its discretion.
MANAGEMENT OF THE FUNDS
INVESTMENT ADVISER --ATFA and IDEX have entered into an agreement on behalf of
Acquiring Fund wherein ATFA has agreed to provide investment advisory,
statistical and research services to the Fund, supervise and arrange for the
purchase and sale of securities on behalf of the Fund, and provide for the
maintenance and compilation of records pertaining to the sub-advisory function.
The agreement can be terminated by the IDEX Board upon 60 days written notice.
Investment management fees are computed and accrued daily and paid monthly. For
the year ended October 31, 2001, Acquiring Fund paid investment management fees
of $9,000 to ATFA.
ATFA has overall responsibility for the management of the Funds. However,
subject to the supervision of the IDEX Board, ATFA may hire sub-advisers to
assist with management of the funds.
- --------------------------------------------------------------------------------
20
- --------------------------------------------------------------------------------
PARENT COMPANY INFORMATION -- ATFA is a wholly-owned indirect subsidiary of
Western Reserve Life Assurance Co. of Ohio ("Western Reserve"); Western Reserve
is a wholly-owned indirect subsidiary of First AUSA Life Insurance Company
("First AUSA"); and First AUSA is wholly-owned by AEGON USA, Inc. ("AEGON USA"),
a financial services holding company whose primary emphasis is on life and
health insurance, and annuity and investment products. AEGON USA is a
wholly-owned indirect subsidiary of AEGON N.V., a Netherlands corporation and
publicly traded international insurance group.
ADMINISTRATIVE AGENT --AEGON/Transamerica Fund Services, Inc. ("ATFS") acts as
the administrative agent for IDEX and, as such, performs administrative
functions and the bookkeeping, accounting and pricing functions for the Funds.
(Prior to July 1, 2002, AFSG provided administrative services to the Fund.) For
these services, ATFS receives reimbursement from IDEX on behalf of the Funds on
a cost incurred basis.
SHAREHOLDER SERVICING AGENT (TRANSFER AGENT) - AEGON/Transamerica Investor
Services, Inc ("ATIS") acts as the transfer agent for the Funds. (Prior to
September 26, 2002, the transfer agent was named Idex Investor Services, Inc.)
As such, ATIS performs all shareholder servicing functions, including
transferring record ownership, processing purchase and redemption transactions,
answering inquiries, mailing shareholder communications and acting as the
dividend disbursing agent. For these services, ATIS receives an annual
per-account charge of $15.39 for each of its shareholder accounts in existence,
$2.73 for each new account opened, and $1.63 for each closed account.
FUND TRANSACTIONS --Decisions as to the assignment of fund business for each
Fund and negotiation of commission rates are made by the respective Fund's
sub-adviser, whose policy is to obtain the "best execution" (prompt and reliable
execution at a favorable security price) of all Fund transactions. The Advisory
Agreement and Sub-Advisory Agreement for each Fund specifically provide that in
placing portfolio transactions for a Fund, the Fund's sub-adviser may agree to
pay brokerage commissions for effecting a securities transaction in an amount
higher than another broker or dealer would have charged for effecting that
transaction as authorized, under certain circumstances, by the Securities
Exchange Act of 1934.
In selecting brokers and dealers and in negotiating commissions, a Fund's
sub-adviser considers a number of factors, including but not limited to:
The sub-adviser's knowledge of currently available negotiated commission
rates or prices of securities and other current transaction costs;
The nature of the security being traded;
The size and type of the transaction;
The nature and character of the markets for the security to be purchased
or sold;
The desired timing of the trade;
The activity existing and expected in the market for the particular
security;
The quality of the execution, clearance and settlement services;
Financial stability;
The existence of actual or apparent operational problems of any broker or
dealer; and
Research products and services provided.
In recognition of the value of the foregoing factors, the sub-adviser may place
portfolio transactions with a broker with whom it has negotiated a commission
that is in excess of the commission another broker would have charged for
effecting that transaction. This is done if the sub-adviser determines in good
faith that such amount of commission was reasonable in relation to the value of
the brokerage and research provided by such broker viewed in terms of either
that particular transaction or of the overall responsibilities of the
sub-adviser.
A sub-adviser may also consider the sale or recommendation of a Fund's shares by
a broker or dealer to its customers as a factor in the selection of brokers or
dealers to execute portfolio transactions. In placing portfolio business with
brokers or dealers, a sub-adviser will seek the best execution of each
transaction, and all such brokerage placement must be consistent with the
Conduct Rules of the National Association of Securities Dealers, Inc.
- --------------------------------------------------------------------------------
21
- --------------------------------------------------------------------------------
DIVIDENDS, DISTRIBUTIONS & TAXES
DIVIDENDS AND DISTRIBUTIONS. IDEX generally distributes most or all of its net
earnings in the form of dividends. IDEX pays dividends and capital gains, if
any, annually. Dividends and distributions will be determined on a class basis.
Any dividends and distributions paid by IDEX will be automatically reinvested in
additional shares of the respective class of the Fund, unless you elect to
receive dividends in cash. When a dividend or distribution is paid, the NAV per
share is reduced by the amount of payment. You may, upon written request or by
completing the appropriate section of the Account Application, elect to have all
dividends and other distributions paid on a Class A, B, C, L and M shares in a
fund invested into another fund in the same share class.
- - FEDERAL TAXES. The Funds qualified, and expect to continue to qualify, as
regulated investment companies under the Internal Revenue Code. As a regulated
investment company, a fund is not subject to federal income tax on ordinary
income and capital gains, if any, that it distributes to its shareholders.
Fund distributions are taxable as ordinary income to the extent they
are attributable to a Fund's net investment income, certain net realized foreign
exchange gains, and net short-term capital gains. They are taxable as long-term
capital gains (at the federal maximum rate of 20%) to the extent they are
attributable to the Fund's excess of net long-term capital gains over net
short-term capital losses. The tax status of any distribution is the same
regardless of how long you have been a shareholder in a Fund and whether you
elect to reinvest distributions or receive cash. Certain distributions paid by a
Fund in January may be taxable to shareholders as if they were received on the
prior December 31.
- -
As of October 31, 2001, IDEX Gabelli Global Growth had capital loss
carryforwards totaling $3,704,995, expiring on October 31, 2009. IDEX American
Century International had capital loss carryforwards totaling $4,497,319
expiring on October 31, 2009. The utilization of tax capital loss carryforwards
from Acquired Fund may be limited.
- -
- - You should rely on your own tax adviser for advice about particular
federal, state and local tax consequences of investing in mutual funds.
- --------------------------------------------------------------------------------
22
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS FOR ACQUIRING FUND
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
The financial highlights table is intended to help you understand Acquiring
Fund's financial performance for its shares for each period shown. No
information is shown for Class L shares, which did not commence operations until
after the periods shown. Certain information reflects financial results for a
single Fund share. The total returns in the table represent the rate that an
investor would have earned (or lost) on an investment in the Fund assuming
reinvestment of all dividends and distributions. This information through
October 31, 2001 has been derived from financial statements audited by
PricewaterhouseCoopers LLP, whose report, along with the IDEX financial
statements, are included in the IDEX Annual Report, which is available upon
request. The information for the period ended 4/30/02 is unaudited and is
included in the IDEX Semi-Annual Report, which is also available upon request.
FINANCIAL HIGHLIGHTS
FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH PERIOD:
------------- ------------------------------------------------------------------------------------------
INVESTMENT OPERATIONS DISTRIBUTIONS
NET ASSET
Year or VALUE, NET NET REALIZED FROM NET FROM NET
Period BEGINNING INVESTMENT AND UNREALIZED TOTAL INVESTMENT REALIZED TOTAL
Ended OF PERIOD INCOME (LOSS) GAIN (LOSS) OPERATIONS INCOME CAPITAL GAINS DISTRIBUTIONS
------------- ---------------------------------------------- ------------------------------------------
IDEX AMERICAN CENTURY
INTERNATIONAL
Class A 04/30/2002(5) $ 8.38 $ (0.01) $ 0.23 $ 0.22 $ - $ - $ -
10/31/2001(5) 12.76 0.05 (3.05) (3.00) - (1.38) (1.38)
10/31/2000 12.85 0.05 0.35 0.40 - (0.49) (0.49)
10/31/1999 10.77 0.03 2.05 2.08 - - -
10/31/1998 10.57 0.07 0.20 0.27 (0.07) - (0.07)
10/31/1997 10.00 0.07 0.50 0.57 - - -
- -----------------------------------------------------------------------------------------------------------------------------------
Class B 04/30/2002(5) 8.15 0.23
(0.04) 0.19 - - -
10/31/2001(5) 12.53 (0.02) (2.98) (3.00) - (1.38) (1.38)
10/31/2000 12.70 (0.03) 0.35 0.32 - (0.49) (0.49)
10/31/1999 10.71 (0.08) 2.05 1.97 - - -
10/31/1998 10.52 - 0.20 0.20 (0.01) - (0.01)
10/31/1997 10.00 0.02 0.50 0.52 - - -
- -----------------------------------------------------------------------------------------------------------------------------------
Class C 04/30/2002(5) 8.15 0.23
(0.04) 0.19 - - -
10/31/2001(5) 12.53 (0.02) (2.98) (3.00) - (1.38) (1.38)
10/31/2000 12.70 (0.03) 0.35 0.32 - (0.49) (0.49)
- -----------------------------------------------------------------------------------------------------------------------------------
Class M 04/30/2002(5) 8.18 0.23
(0.03) 0.20 - - -
10/31/2001(5) 12.57 (0.01) (3.00) (3.01) - (1.38) (1.38)
10/31/2000 12.73 (0.02) 0.35 0.33 - (0.49) (0.49)
10/31/1999 10.72 (0.04) 2.05 2.01 - - -
10/31/1998 10.53 0.01 0.20 0.21 (0.02) - (0.02)
10/31/1997 10.00 0.03 0.50 0.53 - - -
- --------------------------------------------------------------------------------
23
- --------------------------------------------------------------------------------
------------- ------------------------- ---------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
NET INVESTMENT
NET RATIO OF EXPENSES TO
ASSETS, AVERAGE NET ASSETS (1)(3)
NET ASSET END OF INCOME (LOSS) PORTFOLIO
Year or VALUE, END TOTAL PERIOD EXCLUDING TO AVERAGE NET TURNOVER RATE
Period Ended OF PERIOD RETURN (2) (000'S) CREDITS GROSS ASSETS (1) (3) (4)
IDEX AMERICAN CENTURY INTERNATIONAL
Class A 04/30/2002(5) $ 8.60 2.59% $ 7,786 1.13% 2.77% 0.32% 131.98%
10/31/2001(5) 8.38 (26.43) 5,209 1.55 2.77 0.47 128.78
10/31/2000 12.76 2.74 6,977 1.62 3.56 0.09 108.37
10/31/1999 12.85 19.12 4,902 1.90 3.53 (0.16) 71.70
10/31/1998 10.77 2.58 4,981 2.03 4.22 (0.21) 50.01
10/31/1997 10.57 5.70 3,076 1.70 8.93 0.19 21.85
- ---------------------------------------------------------------------------------------------------------------------------------
Class B 04/30/2002(5) 8.34 2.29 6,827 1.78 3.42 (0.33) 131.98
10/31/2001(5) 8.15 (26.96) 5,003 2.20 3.42 (0.18) 128.78
10/31/2000 12.53 2.09 4,407 2.27 4.21 (0.56) 108.37
10/31/1999 12.70 18.45 1,527 2.55 4.18 (0.81) 71.70
10/31/1998 10.71 1.89 1,198 2.68 4.87 (0.86) 50.01
10/31/1997 10.52 5.20 589 2.35 9.58 (0.45) 21.85
- ---------------------------------------------------------------------------------------------------------------------------------
Class C 04/30/2002(5) 8.34 2.29 1,632 1.78 3.42 (0.33) 131.98
10/31/2001(5) 8.15 (26.96) 938 2.20 3.42 (0.18) 128.78
10/31/2000 12.53 2.09 629 2.27 4.21 (0.56) 108.37
- ---------------------------------------------------------------------------------------------------------------------------------
Class M 04/30/2002(5) 8.38 2.34 1,148 1.68 3.32 (0.23) 131.98
10/31/2001(5) 8.18 (26.88) 872 2.10 3.32 (0.08) 128.78
10/31/2000 12.57 2.19 840 2.17 4.11 (0.46) 108.37
10/31/1999 12.73 18.55 480 2.45 4.08 (0.71) 71.70
10/31/1998 10.72 1.99 397 2.58 4.77 (0.76) 50.01
10/31/1997 10.53 5.30 399 2.25 9.48 (0.35) 21.85
Notes to Financial Highlights
(1) Ratio of Expenses to Average Net Assets shows:
Excluding Credits (net expense ratio which is total expenses less fee
waivers and reimbursements by the investment adviser). Gross (total
expenses not taking into account fee waivers and reimbursements by the
investment adviser or affiliated brokerage and custody earnings credits,
if any).
(2) Total Return has been calculated for the applicable period without
deduction of a sales load, if any, on an initial purchase for Class A or
Class C shares. Periods of less than one year not annualized.
(3) Periods of less than one year are annualized. The Ratio of Net
Investment Income (Loss) to Average Net Assets is based upon Net
Investment Income (Loss) prior to certain reclassifications as discussed
in Note 1 of the Notes to the Financial Statements.
(4) Periods of less than one year are not annualized.
(5) Calculated based on average number of shares outstanding during the
period.
The notes to the financial statements are an integral part of these statements.
- --------------------------------------------------------------------------------
24
- --------------------------------------------------------------------------------
APPENDIX A
AGREEMENT & PLAN OF REORGANIZATION
THIS AGREEMENT & PLAN OF REORGANIZATION (the "Plan") is made as of the 8th day
of October, 2002 by IDEX Mutual Funds (the "Company") with its principal place
of business at 570 Carillon Parkway, St. Petersburg, Florida 33716, on behalf of
IDEX American Century International (the "Acquiring Fund") and IDEX Gabelli
Global Growth (the "Acquired Fund"), separate series of the Company.
This Plan is intended to be, and is adopted as a plan of reorganization and
liquidation within the meaning of Section 368(a)(1) of the United States
Internal Revenue Code of 1986, as amended (the "Code"). The reorganization (the
"Reorganization") will consist of the transfer of all of the assets of Acquired
Fund to Acquiring Fund in exchange solely for Class A, Class B, Class C, Class L
and Class M voting shares of beneficial interest of Acquiring Fund (the
"Acquiring Fund Shares"), the assumption by Acquiring Fund of all liabilities of
Acquired Fund, and the distribution of Acquiring Fund Shares to the shareholders
of Acquired Fund in complete liquidation of Acquired Fund as provided herein,
all upon the terms and conditions hereinafter set forth in this Plan.
WHEREAS, the Company is an open-end, registered investment management company
and Acquired Fund owns securities which generally are assets of the character in
which Acquiring Fund is permitted to invest.
WHEREAS, the Trustees of the Company have determined that the exchange of all of
the assets of Acquired Fund for Acquiring Fund Shares, and the assumption of all
liabilities of Acquired Fund by Acquiring Fund, is in the best interests of
Acquiring Fund and its shareholders, and that the interests of the existing
shareholders of Acquiring Fund would not be diluted as a result of this
transaction.
WHEREAS, the Trustees of the Company have determined, with respect to Acquired
Fund, that the exchange of all of the assets of Acquired Fund for Acquiring Fund
Shares, and the assumption of all liabilities of Acquired Fund by Acquiring
Fund, is in the best interests of Acquired Fund and its shareholders, and that
the interests of the existing shareholders of Acquiring Fund would not be
diluted as a result of this transaction.
NOW, THEREFORE, in consideration of the premises and of the covenants and
agreements hereinafter set forth, the Company, on behalf of Acquiring Fund and
Acquired Fund separately, hereby covenants and agrees to the following terms and
conditions:
1. TRANSFER OF ASSETS OF ACQUIRED FUND TO ACQUIRING FUND IN EXCHANGE FOR
ACQUIRING FUND SHARES, THE ASSUMPTION OF ALL ACQUIRED FUND LIABILITIES
AND THE LIQUIDATION OF ACQUIRED FUND
1.1 Subject to the requisite approval of the shareholders of Acquired
Fund and the other terms and conditions herein set forth and on
the basis of the representations and warranties contained herein,
the Company will transfer all of Acquired Fund's assets, as set
forth in paragraph 1.2, to Acquiring Fund, and Acquiring Fund
agrees in exchange therefore: (i) to deliver to Acquired Fund the
number of full and fractional Class A, Class B, Class C, Class L
and Class M Acquiring Fund Shares determined by dividing the value
of Acquired Fund's net assets with respect to each class, computed
in the manner and as of the time and date set forth in paragraph
2.1, by the net asset value of one Acquiring Fund Share of the
same class, computed in the manner and as of the time and date set
forth in paragraph 2.2; and (ii) to assume all liabilities of
Acquired Fund. Such transactions shall take place at the closing
provided for in paragraph 3.1 (the "Closing").
1.2 The assets of Acquired Fund to be acquired by Acquiring Fund shall
consist of all assets and property, including, without limitation,
all cash, securities, commodities and futures interests and
dividends or interests receivable that are owned by Acquired Fund
and any deferred or prepaid expenses shown as an asset on the
books of Acquired Fund on the closing date provided for in
paragraph 3.1 (the "Closing Date") (collectively, "Assets").
1.3 Acquired Fund will endeavor to discharge all of its known
liabilities and obligations prior to the Closing Date. Acquiring
Fund shall also assume all of the liabilities of Acquired Fund,
whether accrued or contingent, known or unknown, existing at the
Valuation Date. On or as soon as practicable prior to the Closing
Date, Acquired Fund will declare and pay to its shareholders of
record one or more dividends and/or other distributions that,
together with all previous distributions, shall have the effect of
distributing to its shareholders (i) all of its
- --------------------------------------------------------------------------------
25
- --------------------------------------------------------------------------------
investment company taxable income and all of its net realized
capital gains, if any, for the period from the close of its last
taxable year to the end of the business day on the Closing; and
(ii) any undistributed investment company taxable income and net
capital gain from any period to the extent not otherwise
distributed.
1.4 Immediately after the transfer of assets provided for in paragraph
1.1, Acquired Fund will distribute to Acquired Fund's shareholders
of record with respect to each class of its shares, determined as
of immediately after the close of business on the Closing Date
(the "Acquired Fund Shareholders"), on a pro rata basis within
that class, Acquiring Fund Shares of the same class received by
Acquired Fund pursuant to paragraph 1.1, and will completely
liquidate. Such distribution and liquidation will be accomplished,
with respect to Acquired Fund's shares, by the transfer of
Acquiring Fund Shares then credited to the account of Acquired
Fund on the books of Acquiring Fund to open accounts on the share
records of Acquiring Fund in the names of Acquired Fund
Shareholders. The aggregate net asset value of Class A, Class B,
Class C, Class L and Class M Acquiring Fund Shares to be so
credited to Class A, Class B, Class C, Class L and Class M
Acquired Fund Shareholders shall, with respect to each class, be
equal to the aggregate net asset value of Acquired Fund shares of
the corresponding class owned by such shareholders on the Closing
Date. All issued and outstanding shares of Acquired Fund will
simultaneously be canceled on the books of Acquired Fund, although
share certificates representing interests in shares of each class
of Acquired Fund will represent a number of the same class of
Acquiring Fund Shares after the Closing Date, as determined in
accordance with Section 2.3. Acquiring Fund shall not issue
certificates representing Acquiring Fund Shares in connection with
such exchange.
1.5 Ownership of Acquiring Fund Shares will be shown on the books of
Acquiring Fund's transfer agent. Shares of Acquiring Fund will be
issued in the manner described in Acquiring Fund's then-current
prospectus and statement of additional information.
1.6 Any reporting responsibility of Acquired Fund including, but not
limited to, the responsibility for filing of regulatory reports,
tax returns, or other documents with the Securities and Exchange
Commission (the "Commission"), any state securities commission,
and any federal, state or local tax authorities or any other
relevant regulatory authority, is and shall remain the
responsibility of Acquired Fund.
2. VALUATION
2.1 The value of Assets shall be the value of such assets computed as
of immediately after the close of business of the New York Stock
Exchange and after the declaration of any dividends on the Closing
Date (such time and date being hereinafter called the "Valuation
Date"), using the valuation procedures set forth in the
then-current prospectus and statement of additional information,
and valuation procedures established by the Company's Board of
Trustees.
2.2 The net asset value of a Class A, Class B, Class C, Class L or
Class M Acquiring Fund Share shall be the net asset value per
share computed with respect to that class on the Valuation Date as
of immediately after the close of business of the New York Stock
Exchange and after the declaration of any dividends on the
Valuation Date, using the valuation procedures set forth in the
then-current prospectus or statement of additional information
with respect to Acquiring Fund, and valuation procedures
established by the Company's Board of Trustees.
2.3 The number of Class A, Class B, Class C, Class L and Class M
Acquiring Fund Shares to be issued (including fractional shares,
if any) in exchange for Acquired Fund's assets shall be determined
by dividing the value of the net assets with respect to Class A,
Class B, Class C, Class L and Class M shares of Acquired Fund, as
the case may be, determined using the same valuation procedures
referred to in paragraph 2.1, by the net asset value of the
corresponding class of Acquiring Fund Share, determined in
accordance with paragraph 2.2.
2.4 All computations of value shall be made by Acquired Fund's
designated record keeping agent, and shall be subject to review by
the independent certified public accountants for IDEX.
3. CLOSING AND CLOSING DATE
3.1 The Closing Date shall be February 28, 2003, or such other date as
the parties may agree to in writing. All acts taking place at the
Closing shall be deemed to take place simultaneously as of
immediately after the close of business on the Closing Date unless
otherwise agreed to by the parties. The close of business on the
Closing Date shall be as of 4:00 p.m., Eastern Time. The Closing
shall be held at the offices of the Company or at such other time
and/or place as the parties will agree.
- --------------------------------------------------------------------------------
26
- --------------------------------------------------------------------------------
3.2 The Company shall direct Investors Bank & Trust Company, as
custodian for Acquired Fund (the "Custodian"), to deliver, at the
Closing, a certificate of an authorized officer stating that (i)
Acquired Fund's portfolio securities, cash, and any other assets
("Assets") shall have been delivered in proper form to Acquiring
Fund within two business days prior to or on the Closing Date, and
(ii) all necessary taxes in connection with the delivery of the
Assets, including all applicable federal and state stock transfer
stamps, if any, have been paid or provision for payment has been
made. Acquired Fund's portfolio securities represented by a
certificate or other written instrument shall be transferred and
delivered by Acquired Fund as of the Closing Date for the account
of Acquiring Fund duly endorsed in proper form for transfer in
such condition as to constitute good delivery thereof. Acquired
Fund shall direct the Custodian to deliver portfolio securities
and instruments deposited with a securities depository, as defined
in Rule 17f-4 under the Investment Company Act of 1940, as amended
(the "1940 Act") as of the Closing Date by book entry in
accordance with the customary practices of such depositories and
the custodian for Acquiring Fund.
3.3 AEGON/Transamerica Investor Services, Inc., as transfer agent for
Acquired Fund (the "Transfer Agent"), shall deliver, on behalf of
Acquired Fund, at the Closing a certificate of an authorized
officer stating that its records contain the names and addresses
of Acquired Fund Shareholders and the number and percentage
ownership of outstanding Class A, Class B, Class C, Class L and
Class M shares owned by each such shareholder immediately prior to
the Closing.
3.4 In the event that on the Valuation Date (a) the New York Stock
Exchange or another primary trading market for portfolio
securities of Acquiring Fund or Acquired Fund shall be closed to
trading or trading thereupon shall be restricted, or (b) trading
or the reporting of trading on such Exchange or elsewhere shall be
disrupted so that, in the judgment of the Board of Trustees of the
Company, accurate appraisal of the value of the net assets of
Acquiring Fund or Acquired Fund is impracticable, the Closing Date
shall be postponed until the first business day after the day when
trading shall have been fully resumed and reporting shall have
been restored.
4. REPRESENTATIONS AND WARRANTIES
4.1 The Company, on behalf of Acquired Fund, represents and warrants
to Acquiring Fund as follows:
(a) Acquired Fund is duly organized as a series of the Company,
which is a business trust duly organized and validly
existing under the laws of the State of Massachusetts, with
power under the Company's Declaration of Trust to own all of
its properties and assets and to carry on its business as it
is now being conducted;
(b) The Company is a registered open-end investment management
company, and its registration with the Commission as an
investment company under the 1940 Act, and the registration
of its shares under the Securities Act of 1933, as amended
("1933 Act"), are in full force and effect;
(c) No consent, approval, authorization, or order of any court
or governmental authority is required for the consummation
by Acquired Fund of the transactions contemplated herein,
except such as have been obtained under the 1933 Act, the
Securities Exchange Act of 1934, as amended (the "1934 Act")
and the 1940 Act, and such as may be required by state
securities laws;
(d) The current prospectus and statement of additional
information of Acquired Fund and each prospectus and
statement of additional information of Acquired Fund used at
all times prior to the date of this Plan conforms or
conformed at the time of its use in all material respects to
the applicable requirements of the 1933 Act and the 1940 Act
and the rules and regulations of the Commission thereunder
and does not or did not at the time of its use include any
untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances
under which they were made, not materially misleading;
(e) On the Closing Date, the Company, on behalf of Acquired Fund
will have good and marketable title to the Assets to be
transferred to Acquiring Fund pursuant to paragraph 1.2 and
full right, power, and authority to sell, assign, transfer
and deliver such assets hereunder free of any liens or other
encumbrances, and upon delivery and payment for such assets,
the Company, on behalf of Acquiring Fund, will acquire good
and marketable title thereto, subject to no restrictions on
the full transfer thereof, including such restrictions as
might arise under the 1933 Act, other than as disclosed to
Acquiring Fund;
- --------------------------------------------------------------------------------
27
- --------------------------------------------------------------------------------
(f) Acquired Fund is not engaged currently, and the execution,
delivery and performance of this Plan will not result, in
(i) a material violation of the Company's Declaration of
Trust or By-Laws or of any agreement, indenture, instrument,
contract, lease or other undertaking to which the Company,
on behalf of Acquired Fund is a party or by which it is
bound, or (ii) the acceleration of any obligation, or the
imposition of any penalty, under any agreement, indenture,
instrument, contract, lease, judgment or decree to which the
Company, on behalf of Acquired Fund, is a party or by which
it is bound;
(g) material contracts or other commitments (other than this
Plan) that will be terminated with liability to it prior to
the Closing Date;
(h) Except as otherwise disclosed in writing to and accepted by
the Company, on behalf of Acquiring Fund, no litigation or
administrative proceeding or investigation of or before any
court or governmental body is presently pending or, to its
knowledge, threatened against Acquired Fund or any of its
properties or assets that, if adversely determined, would
materially and adversely affect its financial condition or
the conduct of its business. The Company, on behalf of
Acquired Fund, knows of no facts which might form the basis
for the institution of such proceedings and is not a party
to or subject to the provisions of any order, decree or
judgment of any court or governmental body which materially
and adversely affects its business or its ability to
consummate the transactions herein contemplated;
(i) The Statement of Assets and Liabilities, including the
Schedule of Investments, at October 31, 2001 of Acquired
Fund, and the Statements of Operations and of Changes in Net
Assets and the Financial Highlights for the periods then
ended, have been audited by PricewaterhouseCoopers LLP,
independent certified public accountants. Such statements
are in accordance with generally accepted accounting
principles ("GAAP") consistently applied, and such
statements (copies of which have been furnished to Acquiring
Fund) present fairly, in all material respects, the
financial condition of Acquired Fund as of such date;
(j) Since October 31, 2001 there has been no material adverse
change in Acquired Fund's financial condition, assets,
liabilities or business, other than changes occurring in the
ordinary course of business, or any incurrence by Acquired
Fund of indebtedness maturing more than one year from the
date such indebtedness was incurred, except as otherwise
disclosed to and accepted by Acquiring Fund. For the
purposes of this subparagraph (j), a decline in net asset
value per share of Acquired Fund due to declines in market
values of securities in Acquired Fund's portfolio, the
discharge of Acquired Fund liabilities, or the redemption of
Acquired Fund shares by shareholders of Acquired Fund shall
not constitute a material adverse change;
(k) On the Closing Date, all Federal and other tax returns and
reports of Acquired Fund required by law to have been filed
by such date (including any extensions) shall have been
filed and are or will be correct in all material respects,
and all Federal and other taxes shown as due or required to
be shown as due on said returns and reports shall have been
paid or provision shall have been made for the payment
thereof, and to the best of Acquired Fund's knowledge, no
such return is currently under audit and no assessment has
been asserted with respect to such returns;
(l) For each taxable year of its operation (including the
taxable year ending on the Closing Date), Acquired Fund has
met the requirements of Subchapter M of the Code for
qualification as a regulated investment company and has
elected to be treated as such, has been eligible to and has
computed its Federal income tax under Section 852 of the
Code, and will have distributed all of its investment
company taxable income and net capital gain (as defined in
the Code) that has accrued through the Closing Date, and
before the Closing Date will have declared dividends
sufficient to distribute all of its investment company
taxable income and net capital gain for the period ending on
the Closing Date;
(m) All issued and outstanding shares of Acquired Fund are, and
on the Closing Date will be, duly and validly issued and
outstanding, fully paid and non-assessable by the Company
and have been offered and sold in every state and the
District of Columbia in compliance in all material respects
with applicable registration requirements of the 1933 Act
and state securities laws. All of the issued and
outstanding shares of Acquired Fund will, at the time of
Closing, be held by the persons and in the amounts set
forth in the records of the Transfer Agent, on behalf of
Acquired Fund, as provided in paragraph 3.3. Acquired Fund
does not have outstanding any options, warrants or other
rights to subscribe for or purchase any of the shares of
Acquired Fund, nor is there outstanding any security
convertible into any of Acquired Fund shares;
- --------------------------------------------------------------------------------
28
- --------------------------------------------------------------------------------
(n) The execution and performance of this Plan will have been
duly authorized prior to the Closing Date by all necessary
action, if any, on the part of the Trustees of the Company,
on behalf of Acquired Fund, and, subject to the approval of
the shareholders of Acquired Fund, this Plan will constitute
a valid and binding obligation of Acquired Fund, enforceable
in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization, moratorium and other
laws relating to or affecting creditors' rights and to
general equity principles;
(o) The information to be furnished by Acquired Fund for use in
registration statements, proxy materials and other documents
filed or to be filed with any federal, state or local
regulatory authority (including the National Association of
Securities Dealers, Inc.), which may be necessary in
connection with the transactions contemplated hereby, shall
be accurate and complete in all material respects and shall
comply in all material respects with Federal securities and
other laws and regulations thereunder applicable thereto.
4.2 The Company, on behalf of Acquiring Fund, represents and warrants
to Acquired Fund as follows:
(a) Acquiring Fund is duly organized as a series of the Company,
which is a business trust duly organized and validly
existing under the laws of the State of Massachusetts, with
power under the Company's Declaration of Trust to own all of
its properties and assets and to carry on its business as it
is now being conducted;
(b) The Company is a registered open-end investment management
company, and its registration with the Commission as an
investment company under the 1940 Act and the registration
of its shares under the 1933 Act, including the shares of
Acquiring Fund, are in full force and effect;
(c) No consent, approval, authorization, or order of any court
or governmental authority is required for the consummation
by Acquiring Fund of the transactions contemplated herein,
except such as have been obtained under the 1933 Act, the
1934 Act and the 1940 Act and such as may be required by
state securities laws;
(d) The current prospectus and statement of additional
information of Acquiring Fund and each prospectus and
statement of additional information of Acquiring Fund used
at all times prior to the date of the Plan conforms or
conformed at the time of its use in all material respects to
the applicable requirements of the 1933 Act and the 1940 Act
and the rules and regulations of the Commission thereunder
and does not or did not at the time of its use include any
untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances
under which they were made, not materially misleading;
(e) On the Closing Date, the Company, on behalf of Acquiring
Fund, will have good and marketable title to Acquiring
Fund's assets, free of any liens of other encumbrances,
except those liens or encumbrances as to which Acquired Fund
has received notice and necessary documentation at or prior
to the Closing;
(f) Acquiring Fund is not engaged currently, and the execution,
delivery and performance of this Plan will not result, in
(i) a material violation of the Company's Declaration of
Trust or By-Laws or of any agreement, indenture, instrument,
contract, lease or other undertaking to which Acquiring Fund
is a party or by which it is bound, or (ii) the acceleration
of any obligation, or the imposition of any penalty, under
any agreement, indenture, instrument, contract, lease,
judgment or decree to which Acquiring Fund, is a party or by
which it is bound;
(g) Except as otherwise disclosed in writing to and accepted by
Acquired Fund, no litigation or administrative proceeding
or investigation of or before any court or governmental
body is presently pending or, to its knowledge, threatened
against Acquiring Fund or any of its properties or assets
that, if adversely determined, would materially and
adversely affect its financial condition or the conduct of
its business. The Company, on behalf of Acquiring Fund,
knows of no facts which might form the basis for the
institution of such proceedings and is not a party to or
subject to the provisions of any order, decree or judgment
of any court or governmental body which materially and
adversely affects its business or its ability to consummate
the transactions herein contemplated;
(h) The Statement of Assets and Liabilities, including the
Schedule of Investments, at October 31, 2001 of the
Acquiring Fund, and the Statement of Operations and of
Changes in Net Assets and the Financial Highlights for the
periods then ended, have been audited by
PricewaterhouseCoopers LLP, independent certified public
accountants. Such statements are in accordance with GAAP
consistently
- --------------------------------------------------------------------------------
29
- --------------------------------------------------------------------------------
applied, and such statements (copies of which have been
furnished to Acquired Fund) present fairly, in all material
respects, the financial condition of Acquiring Fund as of
such date;
(i) Since October 31, 2001, there has not been any material
adverse change in Acquiring Fund's financial condition,
assets, liabilities or business, other than changes
occurring in the ordinary course of business, or any
incurrence by Acquiring Fund of indebtedness maturing more
than one year from the date such indebtedness was incurred,
except as otherwise disclosed to and accepted by Acquired
Fund. For purposes of this subparagraph (i), a decline in
net asset value per share of Acquiring Fund due to declines
in market values of securities in Acquiring Fund's
portfolio, the discharge of Acquiring Fund liabilities, or
the redemption of Acquiring Fund Shares by shareholders of
Acquiring Fund, shall not constitute a material adverse
change;
(j) On the Closing Date, all Federal and other tax returns and
reports of Acquiring Fund required by law to have been filed
by such date (including any extensions) shall have been
filed and are or will be correct in all material respects,
and all Federal and other taxes shown as due or required to
be shown as due on said returns and reports shall have been
paid or provision shall have been made for the payment
thereof, and to the best of Acquiring Fund's knowledge no
such return is currently under audit and no assessment has
been asserted with respect to such returns;
(k) For each taxable year of its operation, Acquiring Fund has
met the requirements of Subchapter M of the Code for
qualification as a regulated investment company and has
elected to be treated as such, has been eligible to and has
computed its Federal income tax under Section 852 of the
Code, has distributed all of its investment company taxable
income and net capital gain (as defined in the Code) for
periods ending prior to the Closing Date, and will do so for
the taxable year including the Closing Date;
(l) All issued and outstanding Acquiring Fund Shares are, and on
the Closing Date will be, duly and validly issued and
outstanding, fully paid and non-assessable by the Company
and have been offered and sold in every state and the
District of Columbia in compliance in all material respects
with applicable registration requirements of the 1933 Act
and state securities laws. Acquiring Fund does not have
outstanding any options, warrants or other rights to
subscribe for or purchase any Acquiring Fund Shares, nor is
there outstanding any security convertible into any
Acquiring Fund Shares;
(m) The execution, delivery and performance of this Plan will
have been fully authorized prior to the Closing Date by all
necessary action, if any, on the part of the Trustees of the
Company on behalf of Acquiring Fund and this Plan will
constitute a valid and binding obligation of Acquiring Fund,
enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization,
moratorium and other laws relating to or affecting
creditors' rights and to general equity principles;
(n) Acquiring Fund Shares to be issued and delivered to Acquired
Fund, for the account of Acquired Fund Shareholders,
pursuant to the terms of this Plan, will on the Closing Date
have been duly authorized and, when so issued and delivered,
will be duly and validly issued Acquiring Fund Shares, and
will be fully paid and non-assessable by the Company;
(o) The information to be furnished by Acquiring Fund for use in
the registration statements, proxy materials and other
documents that may be necessary in connection with the
transactions contemplated hereby shall be accurate and
complete in all material respects and shall comply in all
material respects with Federal securities and other laws and
regulations applicable thereto; and
(p) That insofar as it relates to Company or Acquiring Fund,
the Registration Statement relating to Acquiring Fund
Shares issuable hereunder, and the proxy materials of
Acquired Fund to be included in the Registration Statement,
and any amendment or supplement to the foregoing, will,
from the effective date of the Registration Statement
through the date of the meeting of shareholders of Acquired
Fund contemplated therein (i) not contain any untrue
statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under
which such statements were made, not materially misleading
provided, however, that the representations and warranties
in this subparagraph (p) shall not apply to statements in
or omissions from the Registration Statement made in
reliance upon and in conformity with information that was
furnished by Acquired Fund for use therein, and (ii) comply
in all material respects with the provisions of the 1933
Act, the 1934 Act and the 1940 Act and the rules and
regulations thereunder.
- --------------------------------------------------------------------------------
30
- --------------------------------------------------------------------------------
5. COVENANTS OF ACQUIRING FUND AND ACQUIRED FUND
5.1 Acquiring Fund and Acquired Fund each will operate its business in
the ordinary course between the date hereof and the Closing Date,
it being understood that such ordinary course of business will
include the declaration and payment of customary dividends and
distributions, and any other distribution that may be advisable.
5.2 Acquired Fund will call a meeting of shareholders of Acquired Fund
to consider and act upon this Plan and to take all other actions
necessary to obtain approval of the transactions contemplated
herein.
5.3 To the extent required by applicable law, the Company will call a
meeting of the shareholders of Acquired Fund to consider and act
upon this Plan and to take all other action necessary to obtain
approval of the transactions contemplated herein.
5.4 Acquired Fund covenants that the Class A, Class B, Class C, Class
L and Class M Acquiring Fund Shares to be issued hereunder are not
being acquired for the purpose of making any distribution thereof,
other than in accordance with the terms of this Plan.
5.5 Acquired Fund will assist Acquiring Fund in obtaining such
information as Acquiring Fund reasonably requests concerning the
beneficial ownership of Acquired Fund shares.
5.6 Subject to the provisions of this Plan, Acquiring Fund and
Acquired Fund will each take, or cause to be taken, all action,
and do or cause to be done, all things reasonably necessary,
proper or advisable to consummate and make effective the
transactions contemplated by this Plan.
5.7 As soon as is reasonably practicable after the Closing, Acquired
Fund will make a liquidating distribution to its shareholders
consisting of the Class A, Class B, Class C, Class L and Class M
Acquiring Fund Shares received at the Closing.
5.8 Acquiring Fund and Acquired Fund shall each use its reasonable
best efforts to fulfill or obtain the fulfillment of the
conditions precedent to effect the transactions contemplated by
this Plan as promptly as practicable.
5.9 The Company, on behalf of Acquired Fund, covenants that it will,
from time to time, as and when reasonably requested by Acquiring
Fund, execute and deliver or cause to be executed and delivered
all such assignments and other instruments, and will take or cause
to be taken such further action as the Company, on behalf of
Acquiring Fund, may reasonably deem necessary or desirable in
order to vest in and confirm (a) the Company, on behalf of
Acquiring Fund's, title to and possession of Acquiring Fund's
shares to be delivered hereunder, and (b) the Company, on behalf
of Acquiring Fund's, title to and possession of all of the assets
and otherwise to carry out the intent and purpose of this Plan.
5.10 Acquiring Fund will use all reasonable efforts to obtain the
approvals and authorizations required by the 1933 Act, the 1940
Act and such of the state blue sky or securities laws as may be
necessary in order to continue its operations after the Closing
Date.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF ACQUIRED FUND
The obligations of the Company, on behalf of Acquired Fund, to consummate
the transactions provided for herein shall be subject, at the Company's
election, to the performance by the Company, on behalf of Acquiring Fund,
of all the obligations to be performed by it hereunder on or before the
Closing Date, and, in addition thereto, the following further conditions:
6.1 All representations and warranties of the Company, on behalf of
Acquiring Fund, and the Company contained in this Plan shall be
true and correct in all material respects as of the date hereof
and, except as they may be affected by the transactions
contemplated by this Plan, as of the Closing Date, with the same
force and effect as if made on and as of the Closing Date;
6.2 The Company, on behalf of Acquiring Fund, shall have performed all
of the covenants and complied with all of the provisions required
by this Plan to be performed or complied with by the Company, on
behalf of Acquiring Fund, on or before the Closing Date; and
6.3 Acquired Fund and Acquiring Fund shall have agreed on the number
of full and fractional Acquiring Fund Shares of each class to be
issued in connection with the Reorganization after such number has
been calculated in accordance with paragraph 1.1.
- --------------------------------------------------------------------------------
31
- --------------------------------------------------------------------------------
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF ACQUIRING FUND
The obligations of the Company, on behalf of Acquiring Fund, to complete
the transactions provided for herein shall be subject, at the Company's
election, to the performance by Acquired Fund of all of the obligations
to be performed by it hereunder on or before the Closing Date and, in
addition thereto, the following conditions:
7.1 All representations and warranties of the Company, on behalf of
Acquired Fund, contained in this Plan shall be true and correct in
all material respects as of the date hereof and, except as they
may be affected by the transactions contemplated by this Plan, as
of the Closing Date, with the same force and effect as if made on
and as of the Closing Date;
7.2 The Company, on behalf of Acquired Fund, shall have performed all
of the covenants and complied with all of the provisions required
by this Plan to be performed or complied with by the Company, on
behalf of Acquired Fund, on or before the Closing Date;
7.3 The Company, on behalf of Acquired Fund and Acquiring Fund, shall
have agreed on the number of full and fractional Acquiring Fund
Shares of each class to be issued in connection with the
Reorganization after such number has been calculated in accordance
with paragraph 1.1;
7.4 Acquired Fund shall have declared and paid a distribution or
distributions prior to the Closing that, together with all
previous distributions, shall have the effect of distributing to
its shareholders (i) all of its investment company taxable income
and all of its net realized capital gains, if any, for the period
from the close of its last taxable year to 4:00 p.m. Eastern Time
on the Closing; and (ii) any undistributed investment company
taxable income and net realized capital gains from any period to
the extent not otherwise already distributed.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF ACQUIRING FUND AND
ACQUIRED FUND
If any of the conditions set forth below do not exist on or before the
Closing Date with respect to the Company, on behalf of Acquired Fund or
Acquiring Fund, the other party to this Plan shall, at its option, not be
required to consummate the transactions contemplated by this Plan:
8.1 The Plan and the transactions contemplated herein shall have been
approved by the requisite vote, if any, of the holders of the
outstanding shares of Acquired Fund in accordance with the
provisions of the Company's Declaration of Trust, By-Laws,
applicable Massachusetts law and the 1940 Act, and certified
copies of the resolutions evidencing such approval shall have been
delivered to Acquiring Fund. Notwithstanding anything herein to
the contrary, Company, on behalf of Acquiring Fund or Acquired
Fund, may not waive the conditions set forth in this paragraph
8.1;
8.2 On the Closing Date, no action, suit or other proceeding shall be
pending or, to its knowledge, threatened before any court or
governmental agency in which it is sought to restrain or prohibit,
or obtain damages or other relief in connection with, this Plan or
the transactions contemplated herein;
8.3 All consents of other parties and all other consents, orders and
permits of Federal, state and local regulatory authorities deemed
necessary by the Company to permit consummation, in all material
respects, of the transactions contemplated hereby shall have been
obtained, except where failure to obtain any such consent, order
or permit would not involve a risk of a material adverse effect on
the assets or properties of Acquiring Fund or Acquired Fund,
provided that either party hereto may for itself waive any of such
conditions;
8.4 The Registration Statement shall have become effective under the
1933 Act and no stop orders suspending the effectiveness thereof
shall have been issued and, to the best knowledge of the parties
hereto, no investigation or proceeding for that purpose shall have
been instituted or be pending, threatened or contemplated under
the 1933 Act; and
8.5 Dechert shall deliver an opinion addressed to the Company
substantially to the effect that, based upon certain facts,
assumptions, and representations, the transaction contemplated by
this Plan shall constitute a tax-free reorganization for Federal
income tax purposes, unless, based on the circumstances existing
at the time of the Closing, Dechert determines that the
transaction contemplated by this Plan does not qualify as such.
The delivery of such opinion is conditioned upon receipt by
Dechert of representations it shall request of the Company.
Notwithstanding anything herein to the contrary, the Company may
not waive the condition set forth in this paragraph 8.5.
- --------------------------------------------------------------------------------
32
- --------------------------------------------------------------------------------
9. BROKERAGE FEES AND EXPENSES
9.1 The Company, on behalf of Acquiring Fund, represents and warrants
to the other that there are no brokers or finders entitled to
receive any payments in connection with the transactions provided
for herein.
9.2 The expenses relating to the proposed Reorganization will be paid
by the Investment Adviser, AEGON/Transamerica Fund Advisers, Inc.
The costs of the Reorganization shall include, but not be limited
to, costs associated with obtaining any necessary order of
exemption from the 1940 Act, preparation of the Registration
Statement, printing and distributing Acquiring Fund's prospectus
and Acquired Fund's proxy materials, legal fees, accounting fees,
securities registration fees, and expenses of holding the
shareholders' meeting.
10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
The representations, warranties and covenants contained in this Plan or
in any document delivered pursuant hereto or in connection herewith shall
survive the consummation of the transactions contemplated hereunder. The
covenants to be performed after the Closing and the obligations of each
of Acquired Fund and Acquiring Fund in sections 9.1 and 9.2 shall survive
the Closing.
11. TERMINATION
This Plan and the transactions contemplated hereby may be terminated and
abandoned by resolution of the Board of Trustees, at any time prior to
the Closing Date, if circumstances should develop that, in the opinion of
the Board, make proceeding with the Plan inadvisable.
12. AMENDMENTS
This Plan may be amended, modified or supplemented in such manner as may
be set forth in writing by the authorized officers of the Company;
provided, however, that following any meeting of the shareholders called
by the Company, on behalf of Acquired Fund, pursuant to paragraph 5.2 of
this Plan, no such amendment may have the effect of changing the
provisions for determining the number of Class A, Class B, Class C, Class
L and Class M Acquiring Fund Shares to be issued to Acquired Fund
Shareholders under this Plan to the detriment of such shareholders
without their further approval.
13. HEADINGS; GOVERNING LAW; ASSIGNMENT; LIMITATION OF LIABILITY
13.1 The Article and paragraph headings contained in this Plan are for
reference purposes only and shall not affect in any way the
meaning or interpretation of this Plan.
13.2 This Plan may be executed in any number of counterparts, each of
which shall be deemed to be an original.
13.3 This Plan shall be governed by and construed in accordance with
the laws of the State of Massachusetts without regard to its
principles of conflicts of laws.
13.4 This Plan shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no
assignment or transfer hereof or of any rights or obligations
hereunder shall be made by any party without the written consent
of the other party. Nothing herein expressed or implied is
intended or shall be construed to confer upon or give any person,
firm or corporation, other than the parties hereto and their
respective successors and assigns, any rights or remedies under or
by reason of this Plan.
13.5 It is expressly agreed that the obligations of the parties
hereunder shall not be binding upon any of the Trustees,
shareholders, nominees, officers, agents, or employees of the
Company personally, but shall bind only property of Acquired Fund,
as provided in the Declaration of Trust of the Company. The
execution and delivery by such officers shall not be deemed to
have been made by any of them individually or to impose any
liability on any of them personally, but shall bind only the
property of each party.
IN WITNESS WHEREOF, the Company, on behalf of Acquired Fund and Acquiring Fund,
has caused this Plan to be approved and executed by its President.
IDEX Mutual Funds
By:
------------------------------------------
Name: Brian C. Scott
Title: President and Chief Executive Officer
- --------------------------------------------------------------------------------
33
- --------------------------------------------------------------------------------
APPENDIX B
IDEX AMERICAN CENTURY INTERNATIONAL (4/30/02)
(formerly IDEX International Equity)
OBJECTIVE/FOCUS
Growth of capital through investments in stocks of growing foreign companies.
MARKET ENVIRONMENT
There was mounting evidence during the period that a global economic recovery is
under way, and numerous surveys showed increased confidence among businesses and
consumers. On the other hand, some executives continued to be restrained in
their outlook for growth and profits, and concern over corporate accounting
practices rattled investors.
In the midst of an improving economic climate, eight of IDEX American Century
International's sector concentrations added to performance, including consumer
cyclical and financial, the two largest sector stakes.
PERFORMANCE
For the six-months ended April 30, 2002, IDEX American Century International
underperformed its benchmark, the Morgan Stanley Capital International EAFE
Index ("EAFE"). Please refer to the Performance Table for additional
information.
STRATEGY REVIEW
With signs of recovery increasing, and more economically sensitive companies
poised to rebound, IDEX American Century International increased its weighting
in the consumer cyclical sector. The move paid off, as the sector turned in the
fund's best performance, and the increased weighting - along with superior stock
selection - resulted in outperformance.
Within the diverse consumer cyclical sector, the fund's overweight holdings in
the motor vehicles and parts industry led the advance. The industry benefited
from continued strength in automobile sales, particularly from South Korea's
Hyundai Motor Company, Ltd. The consumer durables industry, especially makers of
electronic products, also advanced and beat the benchmark. Department stores
also boosted the fund - and outperformed the EAFE - as consumers continued to
demonstrate their resilience.
IDEX American Century International's energy holdings advanced as oil prices
increased, partly because of ongoing tension in the Middle East's oil-producing
regions, but also because a global economic recovery should increase demand for
oil. The fund's overweight holdings in the oil services industry registered one
of the period's top performances, led by Italy's Ente Nazionale Idrocarburi,
Europe's fourth largest oil company and a leader in the European natural gas
market. The energy reserves and production industry were also among the
standouts. Despite its underweight position, the energy sector registered the
second-best performance against the EAFE, thanks to effective stock selection.
Financial holdings, which make up the fund's largest sector stake, contributed
on an absolute basis, with banks leading the advance. South Korea's Kookmin Bank
and the Royal Bank of Scotland Group were among the period's top-contributing
securities. Both benefited from low interest rates, which stimulated borrowing
among consumers. Holdings among financial services firms and asset managers
retreated, partly because nervousness over corporate accounting practices
affected investor confidence. Property and casualty insurance holdings
retreated, although IDEX American Century International's holdings outperformed
the EAFE. The fund's financial holdings slightly lagged the EAFE, partly because
of an underweight position in banks.
The telecommunications sector turned in the worst absolute performance, mostly
because the wireless telecommunications industry continues to be dogged by
concerns over subscriber growth and bogged down by debt. The United Kingdom's
Vodafone Group was among the phone service providers declining during the
period. Finnish phone maker Nokia Corp. also fell on concern over sales of
handsets. But IDEX American Century International allocated fewer assets to the
telecommunications sector than its benchmark, and the underweight position and
effective stock selection resulted in the top performance against the EAFE.
IDEX American Century International's underweight health care holdings detracted
from the fund. Pharmaceutical companies declined as investors moved money into
more economically sensitive securities expected to benefit from an anticipated
global recovery. Increasing competitive pressures on both branded and generic
products hampered several pharmaceutical companies. Denmark's Novo Nordisk
(eliminated from fund holdings by the end of the period) led declines among the
fund's pharmaceutical makers due to weak European insulin sales.
- --------------------------------------------------------------------------------
34
- --------------------------------------------------------------------------------
OUTLOOK
IDEX American Century International's management team will continue to
rigorously follow its highly disciplined and repeatable process of identifying
and owning businesses demonstrating solid, sustainable growth.
Henrik Strabo
Mark S. Kopinski
Co-Fund Managers
American Century Investment Management, Inc.
FIVE LARGEST HOLDINGS (% OF NET ASSETS)
iShares S&P 500 Index Fund 4.5%
Royal Bank of Scotland Group 2.0%
BNP Paribas SA 1.8%
Unicredito Italiano SpA 1.7%
Marks & Spencer Group PLC 1.5%
TOP FIVE COUNTRIES (% OF NET ASSETS)
United Kingdom 19.3%
France 13.6%
Japan 10.1%
Switzerland 6.5%
United States 6.2%
- --------------------------------------------------------------------------------
35
- --------------------------------------------------------------------------------
IDEX INTERNATIONAL EQUITY (10/31/01)
(formerly IDEX GE International Equity)
OBJECTIVE/FOCUS
Long-term growth of capital by investing primarily in the common stock and other
equity securities of foreign issuers traded on overseas exchanges and foreign
over-the-counter markets.
MARKET ENVIRONMENT
Uncertainty and volatility dominated international markets across the period.
Obviously, the most significant event occurred September 11th, when terrorist
attacks on the United States stunned the world's markets and further weakened an
already faltering global economy. While global business declined in wake of the
attacks, there's evidence that the stage is being set for a rebound. Central
banks around the world have been easing credit at a fairly aggressive clip, led
by the U.S. Federal Reserve. Lower interest rates should translate into improved
balance sheets for businesses and consumers, which is likely to boost personal
and corporate spending.
PERFORMANCE
For the fiscal year ended October 31, 2001, IDEX International Equity slightly
underperformed its benchmark, the Morgan Stanley Capital International-EAFE
Index. Please refer to the Performance Table on the next page for additional
information.
STRATEGY REVIEW
Despite economic weakness, we continued to follow our disciplined, "bottom-up"
investment process of searching for growing companies. Those moves resulted in
non-cyclical consumer businesses becoming an important part of our strategy.
Although the sector declined on an absolute basis, an overweighted position
outperformed the index, due mostly to the stability demonstrated by food and
beverage holdings. Investors often gravitate toward such firms during tough
times because consumers are almost certain to continue buying "necessities"
during a slowdown.
On the other hand, uncertainty hurt the financial sector. Companies exposed to
reduced trading volume and declining assets, such as those providing financial
services, retreated in the face of falling markets. Insurance companies declined
following the terrorist attacks, although some were recovering as the period
ended. The Royal and Sun Alliance Insurance Group was among those that fell.
Having taken the fund over late in the year, we moved to increase the fund's
exposure to the healthcare sector during the period, with special attention
toward drug makers. The sector slightly underperformed the index, mostly because
some pharmaceutical firms continue to face uncertainties in the regulatory and
political arenas. Investors also continued to take profits in the sector after
its run-up earlier in the year. But several drug makers advanced during the
period, including Novo Nordisk, the Danish pharmaceutical company.
OUTLOOK
American Century's management team follows a long-held investment process that
centers on finding individual companies demonstrating improving earnings growth.
Even in times of weaker business conditions, our disciplined, repeatable
approach points us to pockets of acceleration throughout the global economy. As
always, our job is to ensure that the fund is filled with businesses showing
strong, sustainable growth.
Henrik Strabo
Mark Kopinski
Co-Fund Managers
American Century Investment Management, Inc.
FIVE LARGEST HOLDINGS (% OF NET ASSETS)
Novo Nordisk A/S 3.4%
Koninklijke Ahold NV 3.3%
Aventis SA 3.3%
GlaxoSmithKline PLC ADR 3.0%
Tyco International, Ltd. 2.7%
TOP FIVE COUNTRIES (% OF NET ASSETS)
United Kingdom 31.7%
France 12.3%
Japan 11.3%
Netherlands 6.4%
- --------------------------------------------------------------------------------
36
- --------------------------------------------------------------------------------
IDEX AMERICAN CENTURY INTERNATIONAL (10/31/01)
OBJECTIVE/FOCUS
Growth of capital through investments in stocks of growing foreign companies.
MARKET ENVIRONMENT
IDEX American Century International commenced operations on April 2, 2001. Since
then, uncertainty and volatility have dominated international markets.
Obviously, the most significant event occurred September 11th, when terrorist
attacks on the United States stunned the world's markets and further weakened an
already faltering global economy.
While global business declined in wake of the attacks, there's evidence that the
stage is being set for a rebound. Central banks around the world have been
easing credit at a fairly aggressive clip, led by the U.S. Federal Reserve.
Lower interest rates should translate into improved balance sheets for
businesses and consumers, which is likely to boost personal and corporate
spending.
PERFORMANCE
From its inception through October 31, 2001, IDEX American Century International
underperformed its benchmark, the Morgan Stanley Capital International-EAFE
Index. Please refer to the Performance Table on the next page for additional
information.
STRATEGY REVIEW
Weaker business conditions led to declines in all sectors during the period,
although holdings in several industries helped bolster the fund's performance.
On a geographical basis, France, Bermuda, and Hong Kong were the top
contributing countries relative to the index, while Japan, Germany, and the
Netherlands were the biggest detractors.
Despite economic weakness, we continued to follow our disciplined, "bottom-up"
investment process of searching for growing companies. Those moves resulted in
non-cyclical consumer businesses becoming the fund's third-largest sector stake
during the period. Although the sector declined on an absolute basis, the
overweight position outperformed the index, due mostly to the stability
demonstrated by food and beverage holdings. Those companies represented our
second-largest industry stake. Investors often gravitate toward such firms
during tough times because consumers are almost certain to continue buying
"necessities" during a slowdown, a tendency that made British American Tobacco
one of the period's top-contributing securities.
On the other hand, uncertainty hurt the financial sector. Companies exposed to
reduced trading volume and declining assets, such as those providing financial
services, retreated in the face of falling markets. Insurance companies declined
following the terrorist attacks, although some were recovering as the period
ended. The Royal and Sun Alliance Insurance Group was among those that fell.
We increased our position in the healthcare sector during the period, with drug
makers becoming the fund's largest industry stake. The sector slightly
underperformed, mostly because some pharmaceutical firms continue to face
uncertainties in the regulatory and political arenas. Investors also continued
to take profits in the sector after its run-up earlier in the year. But several
drug makers advanced during the period, including Novo Nordisk, the Danish
pharmaceutical company.
Technology turned in the best performance relative to the index for us, mostly
due to our underweighted position. However, the fund's underweighted position in
telecommunications hindered performance during the period.
OUTLOOK
IDEX American Century International's management team follows a long-held
investment process that centers on finding individual companies demonstrating
improving earnings growth. Even in times of weaker business conditions, our
disciplined, repeatable approach points us to pockets of acceleration throughout
the global economy. As always, our job is to ensure that the fund is filled with
businesses showing strong, sustainable growth.
Henrik Strabo
Mark S. Kopinski
Co-Fund Managers
American Century Investment Management, Inc.
FIVE LARGEST HOLDINGS (% OF NET ASSETS) TOP FIVE COUNTRIES (% OF NET ASSETS)
Novo Nordisk A/S 3.5% United Kingdom 30.4%
Koninklijke Ahold NV 3.5% France 11.6%
Aventis SA 3.4% Japan 10.7%
GlaxoSmithKline PLC ADR 3.2% Netherlands 7.2%
Tyco International, Ltd. 2.8% Switzerland 6.1%
- --------------------------------------------------------------------------------
37
- --------------------------------------------------------------------------------
APPENDIX C
As of November 15, 2002 the following persons owned beneficially, or of record,
5% or more of the outstanding shares of Acquiring Fund:
-----------------------------------------------------------------------------------------------------------------
% OF ACQUIRING FUND % OF ACQUIRING FUND
NAME AND ADDRESS BEFORE REORGANIZATION AFTER REORGANIZATION
-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------
As of November 15, 2002, the following persons owned of record 5% or more of the
outstanding shares of Acquired Fund:
-----------------------------------------------------------------------------------------------------------------
% OF ACQUIRED FUND BEFORE % OF ACQUIRED FUND AFTER
NAME AND ADDRESS REORGANIZATION REORGANIZATION
-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
38
- --------------------------------------------------------------------------------
IDEX MUTUAL FUNDS
IDEX GABELLI GLOBAL GROWTH
PROXY FOR A SPECIAL MEETING OF SHAREHOLDERS on February 12, 2003
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned hereby appoint(s) John K. Carter and Thomas R. Moriarty or
either one of them, proxies, with full power of substitution, to vote all shares
of IDEX Gabelli Global Growth (the " Acquired Fund") which the undersigned is
entitled to vote at the Special Meeting of Shareholders of the Fund to be held
at the offices of IDEX Mutual Funds at 570 Carillon Parkway, St. Petersburg,
Florida 33716, on February 12, 2003 at 11:30 a.m., local time, and at any
adjournment thereof.
This proxy will be voted as instructed. If no specification is made, the proxy
will be voted "FOR" the proposal.
Please vote, date and sign this proxy and return it promptly in the enclosed
envelope.
Please indicate your vote by an "x" in the appropriate box below.
PROXY VOTING INSTRUCTIONS
IDEX Mutual Funds encourages all shareholders to vote their proxies. We now
provide the following convenient methods of voting:
1. PROXY CARD: Complete, sign, date and return the proxy card attached below
in the enclosed postage-paid envelope; or INSTEAD vote by
2. TELEPHONE;
3. INTERNET; or
4. FACSIMILE
by following the enclosed instructions. If you choose to vote by telephone, via
the Internet or by facsimile, DO NOT return your proxy card, unless you later
decide to change your vote.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE FOLLOWING PROPOSAL:
1. To approve a Plan of Reorganization providing for the acquisition of all
of the assets and liabilities of IDEX Gabelli Global Growth (the
"Acquired Fund") by IDEX American Century International (the "Acquiring
Fund") solely in exchange for shares of Acquiring Fund, followed by the
complete liquidation of Acquired Fund.
For Against Abstain
[ ] [ ] [ ]
This proxy must be signed exactly as your name(s) appears hereon. If as an
attorney, executor, guardian or in some representative capacity or as an officer
of a corporation, please add titles as such. Joint owners must each sign.
- ------------------------------------------- -----------------------------
Signature Date
- ------------------------------------------- -----------------------------
Signature (if held jointly) Date
- --------------------------------------------------------------------------------
39
- --------------------------------------------------------------------------------
PART B
IDEX Mutual Funds
- --------------------------------------------------------------------------------
Statement of Additional Information
December 16, 2002
- --------------------------------------------------------------------------------
Acquisition of the Assets and Liabilities of By and in Exchange for Shares of
IDEX Gabelli Global Growth (the "Acquired Fund") IDEX American Century International (the
570 Carillon Parkway, St. Petersburg, Florida 33716 "Acquiring Fund")
570 Carillon Parkway, St. Petersburg, Florida
33716
This Statement of Additional Information is available to the shareholders of
Acquired Fund in connection with a proposed transaction whereby all of the
assets and liabilities of Acquired Fund will be transferred to Acquiring Fund in
exchange for shares of Acquiring Fund.
This Statement of Additional Information of Acquiring Fund consists of this
cover page, pro forma financial statements, and the following documents, each of
which was filed electronically with the Securities and Exchange Commission and
is incorporated by reference herein:
1. The Statement of Additional Information for IDEX Mutual Funds dated
November 11, 2002.
2. The Financial Statements of Acquired Fund and Acquiring Fund as included
in the IDEX Annual Report and the IDEX Semi-Annual Report filed on Form
N-30D for the year ended October 31, 2001 and the fiscal period ended
April 30, 2002, Registration No. 033-02659 (Annual Report filed December
28, 2001 and Semi-Annual Report filed June 27, 2002).
This Statement of Additional Information is not a prospectus. A Prospectus/Proxy
Statement dated December 16, 2002 relating to the reorganization of Acquired
Fund may be obtained, without charge, by writing to IDEX Mutual Funds at 570
Carillon Parkway, St. Petersburg, Florida 33716 or calling (888) 233-4339. This
Statement of Additional Information should be read in conjunction with the
Prospectus/Proxy Statement.
- --------------------------------------------------------------------------------
40
- --------------------------------------------------------------------------------
PRO FORMA STATEMENT OF ASSETS AND LIABILITIES (Unaudited)
April 30, 2002
All numbers (except per share amounts) in thousands
IDEX IDEX
American Gabelli
Century Global Pro Forma
International Growth Adjustments Fund
-----------------------------------------------------------
ASSETS:
Investment securities, at market value $ 17,208 $ 48,145 $ - $ 65,353
Repurchase agreements, at market value - 5,540 - 5,540
Cash 206 13 - 219
Receivables:
Investment securities sold 615 2,040 - 2,655
Shares of beneficial interest sold 28 51 - 79
Interest - - - -
Dividends 60 74 - 134
Due from investment adviser 24 - - 24
Forward foreign currency contracts 1 2 - 3
Other - - - -
-----------------------------------------------------------
Total Assets 18,142 55,865 - 74,007
-----------------------------------------------------------
LIABILITIES:
Accounts payable:
Investment securities purchased 678 89 - 767
Shares of beneficial interest redeemed 7 - - 7
Accrued liabilities:
Management and advisory fees - 7 - 7
Distribution fees 10 36 - 46
Transfer agent fees and expenses 25 34 - 59
Forward foreign currency contracts - - - -
Other 29 38 - 67
-----------------------------------------------------------
Total Liabilities 749 204 - 953
-----------------------------------------------------------
Net Assets $ 17,393 $ 55,661 $ - $ 73,054
===========================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest, unlimited shares
authorized 21,960 72,891 - 94,851
Undistributed net investment income (loss) or
(distribution in excess of net investment income) (49) (379) - (428)
Undistributed net realized gain (loss) from
investments, futures/options contracts and foreign
currency transactions (5,635) (13,135) - (18,770)
Net unrealized appreciation (depreciation) of
investments and translation of foreign denominated
assets/liabilities 1,117 (3,716) - (2,599)
-----------------------------------------------------------
Net Assets $ 17,393 $ 55,661 $ - $ 73,054
-----------------------------------------------------------
Investment securities, at cost $ 16,097 $ 57,401 $ - $ 73,498
===========================================================
Net Assets: Class A $ 7,786 $ 19,119 $ - $ 26,905
Net Assets: Class B 6,827 23,535 - 30,362
Net Assets: Class C 1,632 9,121 - 10,753
Net Assets: Class M 1,148 3,886 - 5,034
-----------------------------------------------------------
$ 17,393 $ 55,661 $ - $ 73,054
===========================================================
Outstanding Shares: Class A (a) 904 2,648 (425) 3,127
Outstanding Shares: Class B (a) 818 3,295 (473) 3,640
Outstanding Shares: Class C (a) 196 1,278 (185) 1,289
Outstanding Shares: Class M (a) 137 543 (79) 601
Net Asset Value: Class A $ 8.60 $ 7.22 $ 8.60
Net Asset Value: Class B $ 8.34 $ 7.14 $ 8.34
Net Asset Value: Class C $ 8.34 $ 7.14 $ 8.34
Net Asset Value: Class M $ 8.38 $ 7.15 $ 8.38
Offering Price: Class A $ 9.10 $ 7.64 $ 9.10
Offering Price: Class M $ 8.46 $ 7.22 $ 8.46
Amounts shown as " - " represent amounts that are zero or those that round to less than $1,000.
See accompanying notes to unaudited pro forma financial statements.
- --------------------------------------------------------------------------------
41
- --------------------------------------------------------------------------------
PRO FORMA STATEMENT OF OPERATIONS (Unaudited)
For the twelve months ended April 30, 2002
All numbers (except per share amounts) in thousands
IDEX American
Century IDEX Gabelli Pro Forma
International Global Growth Adjustments Fund
-------------------------------------------------------------
Investment Income:
Interest $ 36 $ 93 $ - $ 129
Dividends 257 507 - 764
Less withholding taxes on foreign dividends (27) (31) - (58)
-------------------------------------------------------------
266 569 - 835
-------------------------------------------------------------
Expenses:
Management and advisory fees (See Note 2) 123 554 24 701
Transfer agent fees and expenses 119 299 - 418
Custody and accounting fees and expenses (b) 179 87 (1) 265
Registration fees 96 60 - 156
Trustees fees and expenses - 2 - 2
Audit fees and expenses (c) 20 11 (8) 23
Other 25 71 - 96
Distribution and service fees:
Class A 23 62 - 85
Class B 61 231 - 292
Class C 13 102 - 115
Class M 10 39 - 49
-------------------------------------------------------------
Gross Expenses 669 1,518 15 2,202
Less fee waivers and reimbursements by the investment
adviser (See Note 2) (367) (306) 8 (665)
-------------------------------------------------------------
Net Expenses 302 1,212 23 1,537
-------------------------------------------------------------
Net Investment Income (Loss) (36) (643) (23) (702)
-------------------------------------------------------------
Realized Gain (Loss) on Investments, Futures/Options
Contracts and Foreign Currency Transactions:
Net realized gain (loss) during the period on:
Investments (5,207) (12,612) - (17,819)
Futures/options contracts - (7) - (7)
Foreign currency transactions (23) (54) - (77)
-------------------------------------------------------------
(5,230) (12,673) - (17,903)
-------------------------------------------------------------
Unrealized Gain (Loss) on Investments, Futures/Options
Contracts and Foreign Currency Transactions:
Net unrealized appreciation (depreciation) during the
period on:
Investments 2,021 (1,444) - 577
Futures/options contracts - - - 0
Translation of assets and liabilities denominated in
foreign currency - (2) - (2)
-------------------------------------------------------------
2,021 (1,446) - 575
-------------------------------------------------------------
Net Gain (Loss) on Investments, Futures/Options Contracts
and Foreign Currency Transactions (3,209) (14,119) - (17,328)
-------------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting from
Operations $ (3,245) $ (14,762) $ (23) $ (18,030)
=============================================================
Amounts shown as " - " represent amounts that are zero or those that round to less than $1,000.
See accompanying notes to unaudited pro forma financial statements.
- --------------------------------------------------------------------------------
42
- --------------------------------------------------------------------------------
NOTES TO PRO FORMA FINANCIAL STATEMENTS
FOR REORGANIZATION BETWEEN
IDEX AMERICAN CENTURY INTERNATIONAL AND IDEX GABELLI GLOBAL GROWTH
APRIL 30, 2002
(UNAUDITED)
1. General Information and Basis for Combination/Presentation
The accompanying unaudited pro forma financial statements are an integral part
of the Proxy Statement/Prospectus within which they are contained and are
presented to illustrate the effects of the proposed merger whereby IDEX American
Century International (the "Acquiring Fund") would acquire substantially all of
the assets and assume substantially all of the liabilities of IDEX Gabelli
Global Growth (the "Target Fund") in exchange for Class A, B, C and M shares of
the Acquiring Fund (in like proportion to the shares of the Target Fund on or
about March 1, 2003). A full discussion of the proposed merger is described
elsewhere in the Proxy Statement/Prospectus.
Under the terms of the Agreement and Plan of Reorganization, the exchange of
assets of the Target Fund for Class A, B, C and M shares of the Acquiring Fund
will be treated and accounted for as a tax-free reorganization. The acquisition
would be accomplished essentially by an acquisition of the net assets of the
Target Fund in exchange for Class A, B, C and M shares of the Acquiring Fund at
net asset value. The unaudited pro forma Schedule of Investments and the
unaudited pro forma Statement of Assets and Liabilities have been prepared as
though the acquisition had been effective on April 30, 2002. The unaudited pro
forma Statement of Operations has been prepared as though the reorganization was
effective on May 1, 2001 (the twelve months ended April 30, 2002).
The accompanying pro forma financial statements should be read in conjunction
with the financial statements and Schedules of Investments of the Target Fund
and the Acquiring Fund, which are included in the IDEX Mutual Funds Semi-annual
report dated April 30, 2002. The combined funds are referred to as the "Pro
Forma Fund" in the pro forma financial statements.
2. Pro Forma Financial Statements and Adjustments
The accompanying unaudited pro forma Schedule of Investments and pro forma
Statement of Assets and Liabilities reflect changes as if the reorganization had
taken place on April 30, 2002. The unaudited Statement of Operations reflects
adjustments to certain expenses to reflect the results from operations of the
combined funds, under the Acquiring Fund's expense structure for the twelve
months ended April 30, 2002.
The combination produces current and ongoing expense reductions due to a more
advantageous management and advisory fee expense structure (breakpoints) from
the shareholder's perspective, as well as elimination of redundant costs.
These reductions however are offset by the one time effect of the situation
where Acquiring Fund's current expense structure has been in effect only since
March 1, 2002 as this fund was party to another merger on that date. The effects
of these factors are detailed below:
Management and advisory fees:
Expense reduction from combination................................................................... $(12,000)
Expense increase to restate Acquiring Fund's expense*.................. 36,000
------
Net adjustment.................................................................................. ... 24,000
Fee waivers and reimbursements by the adviser:
Expense reduction from combination................................................................... $(45,000)
Expense increase to restate Acquiring Fund's expense 53,000
------
Net adjustment........................................................................... ............ 8,000
* had the 1.00% management and advisory fee rate been in effect the 12 months
ended 4/30/02; actual operations reflect 0.80% from May 1 through February 28,
2002 and 1.00% thereafter through 4/30/02.
**had the 1.60% expense limitation excluding 12b-1 fees been in effect the 12
months ended 4/30/02; actual operations reflect 1.20% from May 1, 2001 through
February 28, 2002 and 1.60% thereafter through 4/30/02.
- --------------------------------------------------------------------------------
43
- --------------------------------------------------------------------------------
The remaining pro forma adjustments necessary as a result of the proposed merger
are to:
(a) adjust shares outstanding of the Pro Forma Fund based on combining the funds
at the Acquiring Fund's class net asset values;
(b) reduce Custody and accounting fees and expenses for $1,000 of duplicate
costs;
(c) reduce Audit and accounting fees for $8,000 of duplicate costs;
3. Management Agreement and Other Transactions
AEGON/Transamerica Fund Advisers, Inc. ("ATFA") is the investment adviser for
the Acquiring Fund. The Fund pays ATFA a management and advisory fee each month,
calculated on average daily net assets of the Acquiring Fund as follows:
1.00% of the first $50 million;
0.95% of the next $100 million;
0.90% of the next $350 million;
0.85% on average daily net assets over $500 million
ATFA and its affiliates also provide certain administrative services to the Fund
such as transfer agent, financial and legal fund administration and other
services.
- --------------------------------------------------------------------------------
44
- --------------------------------------------------------------------------------
PRO FORMA SCHEDULE OF INVESTMENTS (Unaudited)
April 30, 2002
IDEX American IDEX Gabelli Global Pro Forma
Century International Growth Fund
- -------------------------------------------------------------------------------------------------------------------------------
Description % of TNA Shares Value Shares Value Shares Value
- -------------------------------------------------------------------------------------------------------------------------------
Australia 0.6%
COMMON STOCK
BHP Billiton, Ltd. 10,377 $ 60,328 - $- 10,377 60,328
Brambles Industries, Ltd. 10,941 59,249 - - 10,941 59,249
Commonwealth Bank of Australia 6,129 108,380 - - 6,129 108,380
Goldfields, Ltd. - - 53,122 91,792 53,122 91,792
Lihir Gold, Ltd. - - 151,328 113,229 151,328 113,229
----------- ----------- ------------
Total Australia Common Stock 227,957 205,021 432,978
----------- ----------- ------------
Austria 0.2%
COMMON STOCK
Telekom Austria AG - - 18,520 154,299 18,520 154,299
----------- ----------- ------------
Total Austria Common Stock - 154,299 154,299
----------- ----------- ------------
Belgium 0.4%
COMMON STOCK
Groupe Bruxelles Lambert SA - - 1,624 90,105 1,624 90,105
Interbrew 2,290 68,128 - - 2,290 68,128
KBC Bankverzekeringsholding 1,439 51,922 - - 1,439 51,922
UCB SA - - 3,202 116,804 3,202 116,804
----------- ----------- ------------
Total Belgium Common Stock 120,050 206,909 326,959
----------- ----------- ------------
Brazil 0.9%
COMMON STOCK
Companhia Siderurgica Nacional ADR - - 3,400 66,980 3,400 66,980
Embratel Particpacoes SA ADR - - 11,800 30,916 11,800 30,916
Petroleo Brasiseiro SA 3,128 76,915 - - 3,128 76,915
Tele Nordeste Celular Participacoes SA ADR - - 16,900 214,630 16,900 214,630
Telemig Celular Participacoes SA ADR - - 11,025 232,187 11,025 232,187
----------- ----------- ------------
Total Brazil Common Stock 76,915 544,713 621,628
----------- ----------- ------------
Canada 1.9%
COMMON STOCK
Agnico-Eagle Mines, Ltd. - - 8,349 116,209 8,349 116,209
Barrick Gold Corp. ADR - - 7,476 150,043 7,476 150,043
Canadian National Railway Company ADR 1,715 82,063 - - 1,715 82,063
Canadian Pacific Railway, Ltd.* ADR 3,492 72,808 - - 3,492 72,808
Diversinet Corp. ADR - - 67,500 40,500 67,500 40,500
Fairmont Hotels & Resorts, Inc.* ADR 1,755 50,018 - - 1,755 50,018
Glamis Gold, Ltd. - - 27,097 165,937 27,097 165,937
Goldcorp, Inc. - - 7,590 135,179 7,590 135,179
IAMGOLD Corp. - - 26,451 118,955 26,451 118,955
Ivanhoe Mines, Ltd. - - 14,952 32,810 14,952 32,810
Meridian Gold, Inc. ADR - - 7,588 115,489 7,588 115,489
Repadre Capital Corp. - - 22,652 104,615 22,652 104,615
Suncor Energy, Inc. 2,980 103,601 - - 2,980 103,601
Talisman Energy, Inc. 2,417 103,300 - - 2,417 103,300
----------- ----------- ------------
Total Canada Common Stock 411,790 979,737 1,391,527
----------- ----------- ------------
WARRANTS 0.0%
Diversinet Corp.~ - - 33,750 - 33,750 -
----------- ----------- ------------
Total Canada Warrants - - -
----------- ----------- ------------
Total Canada stock and warrants - 979,737 1,391,527
----------- ----------- ------------
Croatia 0.1%
COMMON STOCK
Pliva D.D. Reg S GDR - - 5,396 76,829 5,396 76,829
- --------------------------------------------------------------------------------
45
- --------------------------------------------------------------------------------
----------- ----------- ------------
Total Croatia Common Stock - 76,829 76,829
----------- ----------- ------------
Denmark 0.5%
COMMON STOCK
D/S 1912 Class B 7 48,504 - - 7 48,504
Danske Bank A/S 8,296 149,740 - - 8,296 149,740
Group 4 Falck A/S 556 65,198 - - 556 65,198
TDC A/S - - 4,554 131,296 4,554 131,296
----------- ----------- ------------
Total Denmark Common Stock 263,442 131,296 394,738
----------- ----------- ------------
Finland 0.4%
COMMON STOCK
Sonera OY* - - 31,120 139,028 31,120 139,028
Stora Enso OY 6,190 78,668 - - 6,190 78,668
Tieto-x Corp. OY 1,174 29,396 - - 1,174 29,396
UPM-Kymmene Corp. 2,012 70,314 - - 2,012 70,314
----------- ----------- ------------
Total Finland Common Stock 178,378 139,028 317,406
----------- ----------- ------------
France 6.6%
COMMON STOCK
Accor SA 4,880 197,178 - - 4,880 197,178
Altran Technologies SA 1,603 83,742 - - 1,603 83,742
Arkopharma - - 822 37,759 822 37,759
Assurances Generales de France - - 1,457 73,490 1,457 73,490
BNP Paribas SA 6,011 314,018 - - 6,011 314,018
Boiron SA - - 2,375 176,481 2,375 176,481
Bouygues SA 2,901 87,533 - - 2,901 87,533
Business Objects SA ADR* 904 30,438 - - 904 30,438
Canal Plus - - 2,400 8,041 2,400 8,041
Compagnie de Saint-Gobain 808 138,275 - - 808 138,275
Credit Lyonnaise 144 3,031 127,792 - - 3,031 127,792
Danone 541 71,630 - - 541 71,630
Egide SA* - - 370 22,012 370 22,012
Eiffage - - 2,134 179,524 2,134 179,524
Eridania Beghin-Say* - - 4,500 181,986 4,500 181,986
JC Decaux SA - - 15,516 192,859 15,516 192,859
L'Air Liquide SA* 499 77,215 - - 499 77,215
Michelin Generale de Etablissments 2,413 93,456 - - 2,413 93,456
Neopost SA - - 2,140 80,974 2,140 80,974
NRJ Group - - 28,400 562,757 28,400 562,757
Pernod-Ricard SA 775 71,549 404 37,298 1,179 108,847
Publicis Groupe SA 1,643 50,167 - - 1,643 50,167
Renault SA 3,310 153,389 - - 3,310 153,389
Sanofi Synthelabo SA 1,313 84,025 778 49,788 2,091 133,813
Schneider Electric SA 1,912 92,221 - - 1,912 92,221
Societe Generale-A 3,024 207,002 - - 3,024 207,002
STMicroelectronics NV 2,471 76,784 - - 2,471 76,784
Technip-Coflexip SA 615 86,746 - - 615 86,746
Total Fina Elf SA 1,385 209,824 1,850 280,271 3,235 490,095
Valeo SA 2,738 117,141 - - 2,738 117,141
Vivendi Universal SA - - 16,625 529,935 16,625 529,935
Vivendi Universal SA ADR - - 2,019 64,850 2,019 64,850
----------- ----------- ------------
Total France Common Stock 2,370,125 2,478,025 4,848,150
----------- ----------- ------------
Germany 1.6%
COMMON STOCK
Altana AG* 1,160 64,883 1,260 70,476 2,420 135,359
BASF AG 2,846 121,505 - - 2,846 121,505
Bayer AG 1,554 51,159 - - 1,554 51,159
Bayerische Motoren Werke (BMW) AG* 3,990 159,205 - - 3,990 159,205
Deutsche Bank AG 1,160 76,877 - - 1,160 76,877
Henkel KGaA - - 4,740 311,618 4,740 311,618
Muenchener Ruckversicherungs-Namen AG 207 51,272 - - 207 51,272
SAP AG* 824 106,651 - - 824 106,651
Schering AG 1,291 78,606 - - 1,291 78,606
Stada Arzeneimittel AG - - 1,973 68,418 1,973 68,418
----------- ----------- ------------
Total Germany Common Stock 710,158 450,512 1,160,670
----------- ----------- ------------
NON-CONVERTIBLE PREFERRED STOCK 0.1%
ProSiebenSat.1 Media AG - - 4,486 43,233 4,486 43,233
- --------------------------------------------------------------------------------
46
- --------------------------------------------------------------------------------
----------- ----------- ------------
Total Germany Non-Convertible Preferred Stock - 43,233 43,233
----------- ----------- ------------
Total Germany stock 710,158 493,745 1,203,903
----------- ----------- ------------
Greece 0.2%
COMMON STOCK
Hellenic Telecommunication Organization SA - - 9,108 140,773 9,108 140,773
----------- ----------- ------------
Total Greece Common Stock - 140,773 140,773
----------- ----------- ------------
Hong Kong 0.1%
COMMON STOCK
Li & Fung, Ltd. 25,910 41,527 - - 25,910 41,527
Shaw Brothers (Hong Kong), Ltd. - - 35,000 40,389 35,000 40,389
----------- ----------- ------------
Total Hong Kong Common Stock 41,527 40,389 81,916
----------- ----------- ------------
Ireland 1.1%
COMMON STOCK
Allied Irish Banks PLC 6,700 88,589 - - 6,700 88,589
Anglo Irish Bank Corporation PLC - - 15,241 82,091 15,241 82,091
Bank of Ireland 10,622 123,417 - - 10,622 123,417
Bank of Ireland - - 7,649 88,874 7,649 88,874
Bank of Ireland - - 1,903 22,111 1,903 22,111
CRH PLC 7,871 135,195 - - 7,871 135,195
Irish Life & Permanent - - 19,790 269,155 19,790 269,155
Ryanair Holdings PLC ADR* 260 8,060 - - 260 8,060
----------- ----------- ------------
Total Ireland Common Stock 355,261 462,231 817,492
----------- ----------- ------------
Italy 4.9%
COMMON STOCK
Autogril SPA - - 15,245 179,878 15,245 179,878
Autostrade Meridionali SpA* 29,534 239,943 21,963 178,434 51,497 418,377
Banca Monte Dei Pashci - - 63,800 208,597 63,800 208,597
Bulgari SpA 6,687 51,978 - - 6,687 51,978
Ente Nazionale Idrocarburi SpA 15,442 237,142 477 7,325 15,919 244,467
Finmeccanica SpA* - - 120,000 99,978 120,000 99,978
IntesaBci SpA* 22,935 74,161 84,000 271,615 106,935 345,776
Manifattura Lane Gaetano Marzotto & Figli SpA - - 79,269 756,814 79,269 756,814
Mediaset SpA 16,033 134,301 - - 16,033 134,301
Parmalat Finanziaria SpA - - 22,497 79,026 22,497 79,026
Pininfarina SpA - - 14,050 294,858 14,050 294,858
Riunione Adriatica di Sicurta SpA* - - 3,825 49,611 3,825 49,611
Saipem SpA 17,015 110,803 17,015 110,803
Snam Rete Gas 17,948 50,922 - - 17,948 50,922
Telecom Italia SpA 6,131 32,857 13,010 69,723 19,141 102,580
Telecom Italia SpA - - 21,976 174,779 21,976 174,779
Unicredito Italiano SpA 64,966 301,352 - - 64,966 301,352
----------- ----------- ------------
Total Italy Common Stock 1,233,459 2,370,638 3,604,097
----------- ----------- ------------
Japan 9.2%
COMMON STOCK
Asatsu-DK, Inc. - - 1,700 38,865 1,700 38,865
Benesse Corp. - - 11,600 256,174 11,600 256,174
Bridgestone Corp. 10,001 140,838 - - 10,001 140,838
Canon, Inc. 5,675 217,115 - - 5,675 217,115
DDi Corp. - - 60 156,765 60 156,765
Fanuc, Ltd. 2,054 113,721 - - 2,054 113,721
Fast Retailing Company, Ltd. - - 3,350 89,090 3,350 89,090
Fuji Photo Film Company, Ltd. - - 100 3,173 100 3,173
Hitachi, Ltd. 14,918 110,319 - - 14,918 110,319
Honda Motor Company, Ltd. 2,328 104,271 - - 2,328 104,271
Hoya Corp. 841 62,519 - - 841 62,519
Hudson Soft Company, Ltd. - - 140 1,056 140 1,056
Ito-Yokado Company, Ltd. 1,948 95,885 - - 1,948 95,885
Kyocera Corp. ADR - - 40 2,736 40 2,736
Mitsubishi Tokyo Financial Group, Inc. - - 16 109,362 16 109,362
Nikko Securities, Ltd. - - 124,619 562,045 124,619 562,045
Nikon Corp. - - 600 7,824 600 7,824
Nippon Broadcasting System, Inc. - - 28,000 958,009 28,000 958,009
Nippon Steel Corp. 32,099 48,922 - - 32,099 48,922
Nissan Motor Company 22,970 176,472 - - 22,970 176,472
- --------------------------------------------------------------------------------
47
- --------------------------------------------------------------------------------
NTT DoCoMo, Inc. - Rights 8 20,342 - - 8 20,342
NTT DoCoMo, Inc. 13 32,854 286 722,784 299 755,638
Secom Co. Ltd. - - 15,000 737,170 15,000 737,170
Sharp Corp. 9,887 136,926 - - 9,887 136,926
SMC Corp. 1,086 129,881 - - 1,086 129,881
Sony Corp. 2,467 132,366 - - 2,467 132,366
Takeda Chemical Industries, Ltd. - - 15,849 692,623 15,849 692,623
The Furukawa Electric Company, Ltd. - - 500 2,309 500 2,309
Tokyo Electron, Ltd. 1,881 135,151 - - 1,881 135,151
Toshiba Corp. - - 400 1,863 400 1,863
Toyota Industries Corp. - - 13,500 216,777 13,500 216,777
Toyota Motor Corp. 3,661 99,638 14,203 386,551 17,864 486,189
----------- ----------- ------------
Total Japan Common Stock 1,757,220 4,945,176 6,702,396
----------- ----------- ------------
Luxembourg 0.2%
COMMON STOCK
Arcelor 7,360 101,426 - - 7,360 101,426
SBS Broadcasting SA ADR - - 2,867 56,222 2,867 56,222
----------- ----------- ------------
Total Luxembourg Common Stock 101,426 56,222 157,648
----------- ----------- ------------
Mexico 2.8%
COMMON STOCK
Cemex de C.V. SA ADR 2,551 80,867 - - 2,551 80,867
Coca-Cola FEMSA SA de C.V. ADR - - 14,125 392,393 14,125 392,393
Fomento Economico Mexicano SA de C.V. ADR 1,886 90,245 - - 1,886 90,245
Grupo Televisa SA de C.V. GDR* - - 26,040 1,177,008 26,040 1,177,008
Telefonos de Mexico SA de C.V. ADR 4,049 153,214 - - 4,049 153,214
Tubos de Acero de Mexico SA de C.V. ADR - - 8,200 86,510 8,200 86,510
Walmart de Mexico SA de C.V. Series V 15,749 52,569 - - 15,749 52,569
----------- ----------- ------------
Total Mexico Common Stock 376,895 1,655,911 2,032,806
----------- ----------- ------------
Netherlands 2.2%
COMMON STOCK
ABN Amro Holding NV 4,077 80,787 - - 4,077 80,787
ASML Holding NV NYRS* 4,268 95,304 - - 4,268 95,304
Fox Kids Europe NV - - 50,825 519,581 50,825 519,581
Gucci Group NV NYRS 1,187 114,925 - - 1,187 114,925
Heineken NV 3,358 151,228 - - 3,358 151,228
ING Groep NV 4,157 109,705 - - 4,157 109,705
Koninklijke (Royal) KPN NV 18,007 81,581 67,888 307,568 85,895 389,149
Koninklijke (Royal) Philips Electronics NV NYRS 1,651 51,198 - - 1,651 51,198
United Pan-Europe Communications NV* - - 32,000 3,459 32,000 3,459
Wolters Kluwer NV - - 4,008 81,225 4,008 81,225
----------- ----------- ------------
Total Netherlands Common Stock 684,728 911,833 1,596,561
----------- ----------- ------------
Norway 0.1%
COMMON STOCK
Petroleum Geo-Services ASA - - 3,034 19,114 3,034 19,114
Tandberg ASA 2,487 30,044 - - 2,487 30,044
----------- ----------- ------------
Total Norway Common Stock 30,044 19,114 49,158
----------- ----------- ------------
Peru 0.2%
COMMON STOCK
Minas Buenaventura ADR - - 4,553 121,383 4,553 121,383
----------- ----------- ------------
Total Peru Common Stock - 121,383 121,383
----------- ----------- ------------
Portugal 0.3%
COMMON STOCK
Portugal Telecom, SGPS, SA - - 8,577 62,575 8,577 62,575
Vodafone Telecel-Comunicacoes Pessoais SA - - 17,609 127,201 17,609 127,201
----------- ----------- ------------
Total Portugal Common Stock - 189,776 189,776
----------- ----------- ------------
Russia 0.3%
COMMON STOCK
Lukoil Holding Company ADR 1,014 72,106 - - 1,014 72,106
OAO Gazprom Sponsored ADR 5,835 92,777 - - 5,835 92,777
- --------------------------------------------------------------------------------
48
- --------------------------------------------------------------------------------
Surgutneftegaz Sponsored ADR 3,905 74,976 - - 3,905 74,976
----------- ----------- ------------
Total Russia Common Stock 239,859 - 239,859
----------- ----------- ------------
Singapore 0.1%
COMMON STOCK
Singapore Airlines, Ltd. 12,721 98,191 - - 12,721 98,191
----------- ----------- ------------
Total Singapore Common Stock 98,191 - 98,191
----------- ----------- ------------
South Africa 1.6%
COMMON STOCK
AngloGold Ltd Sponsored ADR - - 4,519 121,109 4,519 121,109
Durban Roodeporrt Deep SP ADR - - 37,946 150,646 37,946 150,646
Gold Fields, Ltd. Sponsored ADR - - 21,975 265,898 21,975 265,898
Harmony Gold Mining Company, Ltd. - - 29,075 374,384 29,075 374,384
Harmony Gold Mining Company, Ltd. ADR - - 18,214 237,811 18,214 237,811
----------- ----------- ------------
Total South Africa Common Stock - 1,149,848 1,149,848
----------- ----------- ------------
South Korea 2.3%
COMMON STOCK
Hyundai Motor Company, Ltd. 3,318 123,556 - - 3,318 123,556
Kangwon Land, Inc. 454 53,008 - - 454 53,008
Kookmin Bank 2,122 96,963 - - 2,122 96,963
Korea Electric Power Corp. 2,351 44,685 - - 2,351 44,685
LG Electronics, Inc. 4,212 166,650 - - 4,212 166,650
LG Electronics, Inc. 468 20,659 - - 468 20,659
Pohang Iron & Steel Co., Ltd. (POSCO) ADR - - 26,400 645,480 26,400 645,480
Samsung Electronics Company, Ltd. 834 247,159 - - 834 247,159
Samsung Fire & Marine Insurance Company, Ltd. 1,260 85,532 - - 1,260 85,532
Samsung-Electro Mechanics Co., Ltd. 2,010 118,823 - - 2,010 118,823
SK Telecom Company, Ltd. ADR 3,103 66,373 - - 3,103 66,373
----------- ----------- ------------
Total South Korea Common Stock 1,023,408 645,480 1,668,888
----------- ----------- ------------
Spain 1.2%
COMMON STOCK
Altadis SA 6,378 134,655 3,825 80,755 10,203 215,410
Amadeus Global Travel Distribution SA 14,482 96,395 - - 14,482 96,395
Centros Comerciales Carrefour SA - - 20,000 233,822 20,000 233,822
Fomento De Construction - - 6,859 176,070 6,859 176,070
Grupo Ferrovial SA 2,617 63,407 - - 2,617 63,407
Telefonica SA - - 778 8,328 778 8,328
Terra Networks, SA - - 17,457 115,253 17,457 115,253
----------- ----------- ------------
Total Spain Common Stock 294,457 614,228 908,685
----------- ----------- ------------
Sweden 0.7%
COMMON STOCK
Atlas Copco AB 2,501 58,658 - - 2,501 58,658
Electrolux AB 3,116 51,855 - - 3,116 51,855
Nordea AB 19,867 113,106 - - 19,867 113,106
Sandvik AB 1,904 44,100 - - 1,904 44,100
Securitas AB 11,308 210,192 - - 11,308 210,192
----------- ----------- ------------
Total Sweden Common Stock 477,911 - 477,911
----------- ----------- ------------
Switzerland 2.4%
COMMON STOCK
Adecco SA-Reg 2,871 181,686 - - 2,871 181,686
Converium Holding - - 1,700 93,517 1,700 93,517
Julius Baer Holding, Ltd. 178 57,366 - - 178 57,366
Logitech International SA 924 43,014 - - 924 43,014
Nestle SA 852 201,467 - - 852 201,467
Novartis AG 5,263 220,795 8,825 370,228 14,088 591,023
Roche Holding AG 1,547 117,240 - - 1,547 117,240
Swisscom AG* 441 131,644 152 45,374 593 177,018
The Swatch Group AG 2,639 54,908 - - 2,639 54,908
The Swatch Group of Switzerland AG-Class B - - 820 79,357 820 79,357
UBS AG 2,607 125,706 - - 2,607 125,706
Zuerich Rueckversicherung Koeln AG* - - 612 61,778 612 61,778
- --------------------------------------------------------------------------------
49
- --------------------------------------------------------------------------------
----------- ----------- ------------
Total Switzerland Common Stock 1,133,826 650,254 1,784,080
----------- ----------- ------------
United Kingdom 7.1%
COMMON STOCK
Amvescap PLC 4,122 43,506 - - 4,122 43,506
BAE SYSTEMS PLC - - 6,211 31,622 6,211 31,622
Barclays PLC 19,368 169,690 - - 19,368 169,690
BP PLC - - 24,735 211,124 24,735 211,124
BPB PLC 8,400 48,829 - - 8,400 48,829
British Sky Broadcasting Group PLC* 8,569 95,750 - - 8,569 95,750
BT Group PLC - - 103,417 388,964 103,417 388,964
Daily Mail and General Trust PLC 5,343 57,795 5,343 57,795
Diageo PLC* 18,747 248,834 6,119 81,219 24,866 330,053
Dixons Group PLC 12,601 41,745 - - 12,601 41,745
Exel PLC 12,113 154,334 - - 12,113 154,334
Filtronic PLC - - 35,550 137,336 35,550 137,336
GKN PLC 33,182 155,276 - - 33,182 155,276
GlaxoSmithKline PLC 3,399 82,254 - - 3,399 82,254
Great Universal Stores PLC 12,512 113,544 - - 12,512 113,544
Hilton Group PLC 41,855 156,507 31,096 116,276 72,951 272,783
HSBC Holdings PLC - - 587 6,936 587 6,936
Imperial Chemical Industries PLC 13,600 63,047 - - 13,600 63,047
International Power PLC* 20,497 62,377 - - 20,497 62,377
Legal & General Group PLC - - 27,492 63,022 27,492 63,022
Marks & Spencer Group PLC 47,346 274,014 - - 47,346 274,014
mm02 PLC - - 162,997 103,363 162,997 103,363
Next PLC 11,552 174,804 - - 11,552 174,804
Pearson PLC 6,319 75,859 - - 6,319 75,859
Rank Group PLC - - 26,632 108,319 26,632 108,319
Reckitt Benckiser PLC 9,471 167,753 - - 9,471 167,753
Reed Elsevier PLC 24,091 236,181 - - 24,091 236,181
Rentokil Initial PLC 50,887 200,480 - - 50,887 200,480
Reuters Group PLC* - - 150 1,050 150 1,050
Royal Bank of Scotland Group 12,363 354,688 - - 12,363 354,688
Scottish and Southern Energy PLC - - 12,000 118,082 12,000 118,082
Schroders PLC 2,501 30,717 - - 2,501 30,717
Six Continents PLC - - 6,345 70,113 6,345 70,113
Smith & Nephew PLC 15,817 90,330 - 15,817 90,330
South African Breweries PLC 11,702 94,892 - - 11,702 94,892
Stolt Offshores SA* - - 27,450 241,764 27,450 241,764
The National Grid Group PLC - - 19,398 139,130 19,398 139,130
United Business Media PLC - - 188 1,436 188 1,436
Vodafone Group PLC - - 21,811 35,214 21,811 35,214
WPP Group PLC 16,186 172,250 - - 16,186 172,250
----------- ----------- ------------
Total United Kingdom Common Stock 3,365,456 1,854,970 5,220,426
----------- ----------- ------------
United States 35.9%
COMMON STOCK
Acme Communications, Inc. - - 2,553 27,445 2,553 27,445
Adelphia Communications Corp.* - - 2,484 14,954 2,484 14,954
Agnico-Eagle Mines, Ltd. - - 3,760 52,226 3,760 52,226
Alcan, Inc. 1,625 59,524 - - 1,625 59,524
Allied Waste Industries, Inc.* - - 13,230 160,612 13,230 160,612
ALLTEL Corp. - - 1,555 76,973 1,555 76,973
AOL Time Warner, Inc.* - - 15,133 287,830 15,133 287,830
Archer-Daniels-Midland Company - - 30,800 408,716 30,800 408,716
AT&T Corp. - - 63,450 832,464 63,450 832,464
AT&T Wireless Services, Inc.* - - 52,774 472,327 52,774 472,327
Beasley Broadcast Group, Inc. - - 300 4,950 300 4,950
Belo Corp. - - 1,214 28,359 1,214 28,359
Blockbuster, Inc. Class A - - 1,511 432,175 1,511 432,175
Bristol-Myers Squibb Company, Inc. - - 3,036 87,437 3,036 87,437
Broadwing, Inc.* - - 84,631 558,565 84,631 558,565
Cablevision Systems Corp.* - - 36,899 867,127 36,899 867,127
Callaway Golf Company - - 9,000 158,400 9,000 158,400
Caremark Rx, Inc.* - - 9,108 195,822 9,108 195,822
Cendant Corp.* - - 53,216 957,356 53,216 957,356
Centennial Communications Corp.* - - 17,475 50,678 17,475 50,678
Centurytel, Inc. - - 1,555 43,074 1,555 43,074
Charter Communications, Inc.* - - 2,698 22,097 2,698 22,097
Citizens Communication Company - - 759 7,036 759 7,036
CMGI, Inc. - - 12,500 16,000 12,500 16,000
CMS Energy Corp. - - 1,062 20,560 1,062 20,560
50
- --------------------------------------------------------------------------------
Coach, Inc.* - - 15,225 852,600 15,225 852,600
Comcast Corp. Special Class A* - - 1,190 31,833 1,190 31,833
Compaq Computer Corp. - - 13,662 138,669 13,662 138,669
Constellation Brands, Inc. A - - 152 9,181 152 9,181
Crown Media Holdings-Class A - - 5,134 51,853 5,134 51,853
Cumulus Media, Inc. Class A* - - 20,491 383,796 20,491 383,796
Delphi Automotive Systems Corp. - - 35,125 546,194 35,125 546,194
Devon Energy Corp. 144A - - 15,050 742,116 15,050 742,116
Dobson Communications Corp.* - - 2,892 5,665 2,892 5,665
DPL, Inc. - - 10,028 260,929 10,028 260,929
Duke Energy Corp. - - 110 4,216 110 4,216
El Paso Corp. - - 5,313 212,520 5,313 212,520
EMC Corp.* - - 7,000 63,980 7,000 63,980
Equitable Resources,Inc. - - 4,793 172,308 4,793 172,308
Fisher Communications, Inc. - - 759 35,437 759 35,437
Fleming Companies, Inc. - - 1,518 33,457 1,518 33,457
Freeport-McMoRan Cooper & Gold Inc. - - 9,086 161,367 9,086 161,367
Gemstar-TV Guide International, Inc.* - - 56,492 506,168 56,492 506,168
General Motors Corp. Class H * - - 3,680 55,126 3,680 55,126
Granite Broadcasting Corp. - - 7,590 19,734 7,590 19,734
Gray Communications Systems, Inc. Class B - - 258 3,599 258 3,599
H.J. Heinz Company - - 608 25,530 608 25,530
Hain Celestial Group, Inc. - - 1,159 21,244 1,159 21,244
Honeywell International, Inc. - - 13,500 495,180 13,500 495,180
Interep Natl Radio Sales - - 6,370 22,868 6,370 22,868
iShares S&P 500 Index Fund 6,474 789,311 - - 6,474 789,311
Knight-Ridder, Inc. - - 667 44,689 667 44,689
L-3 Communications Holdings, Inc.* - - 10,050 1,284,189 10,050 1,284,189
Leap Wireless Intl, Inc. - - 35,415 262,779 35,415 262,779
Liberty Media Corp.* - - 90,334 966,574 90,334 966,574
Lockheed Martin Corp. - - 4,900 308,210 4,900 308,210
Loral Space & Communications, Ltd. - - 102,925 202,762 102,925 202,762
Lucent Technologies, Inc. - - 95,540 439,484 95,540 439,484
Magna International, Inc. 863 63,767 - - 863 63,767
ManTech International Corp. A - - 5,300 125,504 5,300 125,504
Mattel, Inc. - - 9,108 187,989 9,108 187,989
McLeodUSA, Inc. Class A* - - 30,000 2,100 30,000 2,100
Newmont Mining Corp. Holding Company - - 7,589 216,362 7,589 216,362
Nextel Communications, Inc. Class A* - - 58,516 322,423 58,516 322,423
Oracle Corp.* - - 35,578 357,203 35,578 357,203
Paxson Communications Corp.* - - 19,395 205,587 19,395 205,587
Peabody Energy Corp. - - 455 12,299 455 12,299
Pepsi Bottling Group, Inc.* - - 12,200 349,408 12,200 349,408
Placer Dome, Inc. - - 6,830 80,253 6,830 80,253
PPL Corp. - - 8,977 342,113 8,977 342,113
Qwest Communications International, Inc. - - 15,179 76,350 15,179 76,350
Rainbow Media Group - - 26,692 589,893 26,692 589,893
RGS Energy Group, Inc. - - 10,028 397,911 10,028 397,911
Rogers Communications, Inc. Class B* - - 41,750 507,263 41,750 507,263
Ross Stores, Inc. - - 14,000 568,540 14,000 568,540
Rural Cellular Corp. Class A* - - 30,105 111,389 30,105 111,389
SBC Communications, Inc. - - 491 15,250 491 15,250
Schering Plough Corp. - - 4,554 124,324 4,554 124,324
Scripps Company - - 607 48,372 607 48,372
Sinclair Broadcast Group, Inc.* - - 14,945 199,516 14,945 199,516
Sprint FON Group - - 8,518 135,010 8,518 135,010
Telephone and Data Systems, Inc. - - 11,107 955,202 11,107 955,202
Tennant Company - - 304 13,376 304 13,376
Texas Instruments, Inc. - - 12,000 371,160 12,000 371,160
The Reader's Digest Association, Inc. - - 892 21,230 892 21,230
The Washington Post Company Class B - - 595 375,921 595 375,921
The Williams Companies, Inc. - - 10,626 202,957 10,626 202,957
United States (continued)
Ticketmaster Corp. Class B* - - 40,496 952,871 40,496 952,871
Transocean Sedco Forex, Inc. 2,854 101,317 - - 2,854 101,317
Travelers Property Casualty Corp. - - 10,500 195,195 10,500 195,195
Tribune Company - - 455 20,097 455 20,097
United States Cellular Corp.* - - 11,109 438,806 11,109 438,806
USA Networks, Inc.* - - 21,475 642,317 21,475 642,317
ValueVision International, Inc.* - - 8,600 162,454 8,600 162,454
Verizon Communications, Inc. - - 491 19,694 491 19,694
Viacom, Inc. Class A* - - 759 35,772 759 35,772
Viacom, Inc. Class B* - - 13,975 658,223 13,975 658,223
Waste Management, Inc. - - 9,767 257,263 9,767 257,263
Western Wireless Corp.* - - 4,260 27,008 4,260 27,008
- --------------------------------------------------------------------------------
51
- --------------------------------------------------------------------------------
Willis Group Holdings, Ltd.* 2,100 61,426 - - 2,100 61,426
WorldCom, Inc.-MCI Group - - 28,280 106,078 28,280 106,078
Wyeth - - 1,518 86,526 1,518 86,526
Young Broadcasting, Inc. Class A* - - 20,454 462,055 20,454 462,055
----------- ----------- ------------
Total United States Common Stock 1,075,345 25,126,704 26,202,049
----------- ----------- ------------
CONVERTIBLE PREFERRED STOCK 0.2%
Mirant Trust I - - 3,918 147,415 3,918 147,415
-----------
----------- ------------
Total United States Convertible Preferred Stock - 147,415 147,415
----------- ----------- ------------
NON-CONVERTIBLE PREFERRED STOCK 0.0%
Broadwing Communications - - 200 10,000 200 10,000
-----------
----------- ------------
Total United States Non-Convertible Preferred Stock - 10,000 10,000
----------- ----------- ------------
----------- ----------- ------------
Total United States stock 1,075,345 25,284,119 26,359,464
----------- ----------- ------------
-----------------------------------------------------------------------
Principal Principal Principal
-----------------------------------------------------------------------
CONVERTIBLE CORPORATE BONDS 0.1%
NTL, Inc. 6.750% 5-15-2008 - - 150,000 61,500 150,000 61,500
----------- ----------- ------------
Total United States bonds - 61,500 61,500
----------- ----------- ------------
Short-Term Securities 10.5%
Repurchase Agreement
State Street Bank & Trust
1.860% Repurchase Agreement dated 4-30-2002
to be repurchased at $5,539,846 on 5-1-2002 - - 5,539,560 5,539,560 5,539,560 5,539,560
Time Deposit
State Street Bank & Trust Eurodollar Time Deposit
0.500% 5-1-2002 560,124 560,124 - - 560,124 560,124
0.750% 5-1-2002 - - 1,561,866 1,561,866 1,561,866 1,561,866
----------- ----------- ------------
Total Short-Term Securities (cost equals value) 560,124 7,101,426 7,661,550
----------- ----------- ------------
-----------------------------------------------------------------------
% of TNA % of TNA % of TNA
-----------------------------------------------------------------------
Total Investments 98.9% 96.4% 97.0%
$17,207,952 $53,684,873 $70,892,825
----------- ----------- ------------
Total investments cost
$16,097,010 $57,400,871 $73,497,881
----------- ----------- ------------
Unrealized gain (loss) on Forward Foreign Currency Contracts
B8,436 British Pound 5-1-2002Sell (3) - (3)
B2,765 British Pound 5-2-2002Buy (5) - (5)
E64,778 Euro 11-1-2001Buy (108) - (108)
F29,906 Swiss Franc 5-2-2002Sell 19 - 19
J12,197,457 Japanese Yen 5-1-2002Sell 527 - 527
J32,188,922 Japanese Yen 5-1-2002Sell - 370 370
J6,392,264 Japanese Yen 5-2-2002Sell 212 - 212
J256,254,321 Japanese Yen 5-1-2002Buy - 1,579 1,579
K321,667 Swedish Krona 5-2-2002Sell 121 - 121
----------- ----------- ------------
Total Unrealized Net Gain (Loss) on Forward Foreign Currency 763 1,949 2,712
Contracts
----------- ----------- ------------
-----------------------------------------------------------------------
% of TNA % of TNA % of TNA
-----------------------------------------------------------------------
Other net assets (liabilities) 1.1% 183,970 3.5% 1,974,476 3.0% 2,158,446
----------- ----------- ------------
Net Assets (100.0%)
$17,392,685 $55,661,298 $73,053,983
----------- ----------- ------------
* security is non-income producing.
~ private placement warrant valued at cost.
See accompanying notes to unaudited pro forma financial statements.
- --------------------------------------------------------------------------------
52
- --------------------------------------------------------------------------------
PART C
OTHER INFORMATION
Item 15. Indemnification
A policy of insurance covering ATFA, its subsidiaries, AFSG and all of the
registered investment companies advised by ATFA insures the Registrant's
directors and officers and others against liability arising by reason of an
alleged breach of duty caused by any negligent act, error or accidental omission
in the scope of their duties.
Provisions relating to indemnification of the Registrant's Trustees and
employees are included in Registrant's Restatement of Declaration of Trust and
Bylaws, which are incorporated herein by reference.
Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to Trustees, officers and controlling persons, or
otherwise, Registrant has been advised that in the opinion of the Commission
such indemnification may be against public policy as expressed in the Act and
may be, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by Registrant of expenses
incurred or paid by a Trustee, officer or controlling person of Registrant in
the successful defense of any action, suit or proceeding) is asserted by such
Trustee, officer or controlling person in connection with the securities being
registered, Registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
Item 16. Exhibits
(1) Restatement of Declaration of Trust and all amendments are incorporated
herein by reference to the Registrant's Registration Statement on Form
N-1A (File 33-2659), Post-Effective Amendment No. 24, as filed with the
SEC on November 15, 1996.
(2) Amended and Restated By-Laws are incorporated herein by reference to the
Registrant's Registration Statement on Form N-1A (File No. 33-2659),
Post-Effective Amendment No. 24, as filed with the SEC on November 15,
1996.
(3) Not Applicable
(4) Plan of Reorganization is filed herewith as Appendix A to the Prospectus/
Proxy Statement.
(5) See Exhibits 1 and 2.
(6) (a) Investment Advisory Agreement is incorporated herein by reference to
the Registrant's Registration Statement on Form N-1A (File No. 33-2659),
Post-Effective Amendment No. 33, as filed with the SEC on December 17,
1999.
(b) Sub-Advisory Agreement is incorporated herein by reference to the
Registrant's Registration Statement on Form N-1A (File No. 33-2659),
Post-Effective Amendment No. 33, as filed with the SEC on December 17,
1999.
(7) Underwriting Agreement is incorporated herein by reference to the
Registrant's Registration Statement on Form N-1A (File No. 33-2659),
Post-Effective Amendment No. 33, as filed with the SEC on December 17,
1999.
(8) Trustees Deferred Compensation Plan is incorporated herein by reference
to the Registrant's Registration Statement on Form N-1A (File No.
33-2659), Post-Effective Amendment No. 25, as filed with the SEC on
January 31, 1997.
(9) Custodian Agreement is incorporated herein by reference to the
Registrant's Registration Statement on Form N-1A (File No. 33-2659),
Post-Effective Amendment No. 49, as filed with the SEC on 9/12/02.
(10) (a) Plans of Distribution under Rule 12b-1 are incorporated by reference
to Registrant's Registration Statement on Form N-1A (File No.33-2659),
Post-Effective Amendment No. 33, as filed with the SEC on December 17,
1999.
- --------------------------------------------------------------------------------
53
- --------------------------------------------------------------------------------
(b) Amended and Restated Plan for Multiple Classes of Shares is
incorporated herein by reference to the Registrant's Registration
Statement on Form N-1A (File No. 33-2659), Post-Effective Amendment No.
43, as filed with the SEC on December 14, 2002.
(11) Opinion and Consent of Counsel is filed herewith.
(12) Opinion and Consent of Dechert to be filed by post-effective amendment.
(13) Administrative Services Agreement, and Transfer Agent Agreement are
incorporated herein by reference to Post-Effective Amendment Nos. 49 and
24, respectively, to the Registrant's Registration Statement on Form N-1A
(File No 33-2659), as filed with the SEC on September 12, 2002 and
November 15, 1996, respectively.
(14) Consent of Independent Certified Public Accountants is filed herewith.
(15) Not Applicable
(16) Powers of Attorney for the Registrant are filed herewith.
(17) (a) Form of proxy card is filed herewith.
(b) The Registrant's Annual Report, dated October 31, 2001, and its
Semi-Annual Report, dated April 30, 2002, are incorporated herein by
reference.
(c) Prospectus for IDEX Mutual Funds, dated March 1, 2002, as amended
April 1, 2002 is filed herewith.
Item 17. Undertakings
1. The undersigned registrant agrees that prior to any public reoffering of
the securities registered through the use of a prospectus which is a part
of this registration statement by any person or party who is deemed to be
an underwriter within the meaning of Rule 145(c) of the Securities Act 17
CFR 230.145(c), the reoffering prospectus will contain the information
called for by the applicable registration form for reofferings by persons
who may be deemed underwriters, in addition to the information called for
by the other items of the applicable form.
2. The undersigned registrant agrees that every prospectus that is filed
under paragraph (1) above will be filed as a part of an amendment to the
registration statement and will not be used until the amendment is
effective, and that, in determining any liability under the 1933 Act,
each post-effective amendment shall be deemed to be a new registration
statement for the securities offered therein, and the offering of the
securities at that time shall be deemed to be the initial bona fide
offering of them.
3. The undersigned registrant undertakes to file a post-effective amendment
to this registration statement upon the closing of the Reorganization
described in this registration statement that contains an opinion of
counsel supporting the tax matters discussed in this registration
statement.
- --------------------------------------------------------------------------------
54
- --------------------------------------------------------------------------------
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Registration Statement on Form N-14 to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of St.
Petersburg and State of Florida on the 13th day of November, 2002.
IDEX Mutual Funds
By:
---------------------------------------
Brian C. Scott
President
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
Signature Title Date
--------- ----- ----
President and Chief Executive Officer November 13, 2002
- ----------------------------------
Brian C. Scott*
Executive Vice President, Treasurer and Principal Financial November 13, 2002
- ---------------------------------- Officer
Thomas R. Moriarty
Vice President, Assistant Treasurer and Principal Accounting November 13, 2002
- ---------------------------------- Officer
Christopher G. Roetzer
Chairman November 13, 2002
- ----------------------------------
John R. Kenney*
Vice Chairman November 13, 2002
- ----------------------------------
Peter R. Brown*
Trustee November 13, 2002
- ----------------------------------
Larry N. Norman*
Trustee November 13, 2002
- ----------------------------------
Daniel Calabria*
Trustee November 13, 2002
- ----------------------------------
Charles C. Harris*
Trustee November 13, 2002
- ----------------------------------
William W. Short, Jr.*
Trustee November 13, 2002
- ----------------------------------
Jack E. Zimmerman*
Trustee November 13, 2002
- ----------------------------------
Leo J. Hill*
Trustee November 13, 2002
- ----------------------------------
Janice B. Case*
Trustee November 13, 2002
- ----------------------------------
- --------------------------------------------------------------------------------
55
- --------------------------------------------------------------------------------
Russell A. Kimball, Jr.*
- ----------------------------------
* John K. Carter, as attorney
in-fact, pursuant to powers of
attorney filed herewith.
- --------------------------------------------------------------------------------
56
- --------------------------------------------------------------------------------
(11)Opinion and Consent of Counsel
(12)Consent of Independent Certified Public Accountants
(14)None
(16)Powers of Attorney
(17)(a) Form of proxy card
- --------------------------------------------------------------------------------
57