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Securities Act File No. __________
As filed with the Securities and Exchange Commission on February 9, 2004
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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 March 10, 2004 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 Mutual Funds
570 Carillon Parkway
St. Petersburg, Florida 33716
888/233-4339
March 10, 2004
Dear Shareholder:
Your Board of Trustees has called a special meeting of shareholders of IDEX
Templeton Great Companies Global ("Acquired Fund"), to be held at 2 p.m., local
time, on April 23, 2004, at the offices of IDEX Mutual Funds ("IDEX"), 570
Carillon Parkway, St. Petersburg, Florida 33716, or any adjournment(s) thereof
(the "Special Meeting").
The Board of Trustees of IDEX (the "Board") has approved a reorganization of the
Acquired Fund into IDEX Janus Global ("Acquiring Fund"), also a series of IDEX
(the "Reorganization"). AEGON/Transamerica Fund Advisers, Inc. serves as
investment adviser to both the Acquired and the Acquiring Funds. Janus Capital
Management, LLC ("Janus") serves as sub-adviser to the Acquiring Fund, and
Templeton Investment Counsel, LLC ("Templeton") and Great Companies, L.L.C.
("Great Companies") serve as co-sub-adviser to the Acquired Fund. The Acquiring
Fund has investment objectives and policies that are similar in many respects to
those of the Acquired Fund. The Reorganization is expected to result in
operating expenses that are lower for shareholders of the Acquired Fund. Upon
the completion of the Reorganization, it is anticipated that Templeton and Great
Companies will assume the sub-advisory functions of the Acquiring Fund and the
Acquiring Fund will be renamed TA IDEX Templeton Great Companies Global. There
is no guarantee, however, that Templeton and Great Companies will serve as
co-sub-advisers to the Acquiring Fund or that the Acquiring Fund will be renamed
as indicated above, as Great Companies' service as co-sub-adviser will require
the approval of the Acquiring Fund's shareholders.
You are asked to vote to approve an Agreement and Plan of Reorganization. The
accompanying document describes the proposed Reorganization and compares the
policies and expenses of the Funds for your evaluation.
After careful consideration, the Board unanimously approved this proposal with
respect to the Acquired Fund and recommends that shareholders vote "FOR" the
proposal.
A Proxy Statement/Prospectus that describes the Reorganization is enclosed. We
urge you to vote your shares by completing and returning the enclosed proxy
card, in the envelope provided, or vote by Internet, facsimile or telephone, at
your earliest convenience.
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 2:00 P.M. ON
APRIL 23, 2004.
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 and Chief Executive Officer
IDEX MUTUAL FUNDS
570 Carillon Parkway
St. Petersburg, Florida 33716
(888) 233-4339
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS OF
IDEX TEMPLETON GREAT COMPANIES GLOBAL
TO BE HELD ON APRIL 23, 2004
To the Shareholders:
A special meeting of shareholders of IDEX Templeton Great Companies Global is
scheduled for April 23, 2004 at 2:00 p.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 Templeton
Great Companies Global (the "Acquired Fund") by IDEX Janus Global (the
"Acquiring Fund") solely in exchange for shares of the Acquiring Fund,
followed by the complete liquidation of the Acquired Fund; and
2. To transact such other business, that may properly come before the
Special Meeting.
Shareholders of record at the close of business on February 27, 2004 are
entitled to notice of, and to vote at, the Special Meeting. Your attention is
called to the accompanying Proxy Statement/Prospectus. You are cordially invited
to attend the Special Meeting. Shareholders who do not expect to attend the
Special Meeting in person are requested to complete, date, and sign the enclosed
proxy card and return it promptly in the envelope provided for that purpose.
Your proxy card also provides instructions for voting via telephone, facsimile
or the Internet, so you may choose to take advantage of these voting options.
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
Senior Vice President, Secretary &
General Counsel
March 10, 2004
TABLE OF CONTENTS
INTRODUCTION....................................................................... 1
SUMMARY............................................................................ 2
The Proposed Reorganization..................................................... 2
Comparison of Investment Objectives, Strategies and Management.................. 2
Comparison of Principal Risks Involved in Investing in the Funds................ 3
INVESTMENT STRATEGIES AND RISKS.................................................... 5
Principal Investment Strategies................................................. 5
Comparison of Portfolio Characteristics......................................... 7
Relative Performance............................................................ 7
Comparison of Securities and Investment Techniques.............................. 8
Proposed New Co-Sub-Advisers to Acquiring Fund.................................. 9
COMPARISONS OF FEES AND EXPENSES................................................... 9
Operating Expenses.............................................................. 9
Example......................................................................... 10
ADDITIONAL INFORMATION ABOUT ACQUIRING FUND........................................ 12
Investment Adviser and Sub-Adviser.............................................. 12
Investment Personnel............................................................ 12
Performance of the Acquiring Fund............................................... 12
INFORMATION ABOUT THE REORGANIZATION............................................... 13
The Reorganization Plan......................................................... 13
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
Dividends and Other Distributions............................................... 15
Capitalization.................................................................. 16
GENERAL INFORMATION................................................................ 16
Solicitation of Proxies......................................................... 16
Voting Rights................................................................... 17
Other Matters to Come Before the Meeting........................................ 17
Shareholder Proposals........................................................... 17
Information about the Funds..................................................... 18
MORE INFORMATION REGARDING ACQUIRING FUND.......................................... 19
APPENDIX A......................................................................... A-1
APPENDIX B......................................................................... B-1
APPENDIX C......................................................................... C-1
PROXY STATEMENT/PROSPECTUS
IDEX MUTUAL FUNDS
570 CARILLON PARKWAY
ST. PETERSBURG, FLORIDA 33716
(888) 233-4339
INTRODUCTION
This Proxy Statement/Prospectus provides you with information about the proposed
transfer of all of the assets and liabilities of IDEX Templeton Great Companies
Global (the "Acquired Fund"), a series of IDEX Mutual Funds ("IDEX"), to IDEX
Janus Global (the "Acquiring Fund"), also a series of IDEX Mutual Funds, solely
in exchange for shares of the Acquiring Fund (the "Reorganization"). Following
the transfer of its assets and liabilities to the Acquiring Fund in exchange for
shares of the Acquiring Fund, the Acquired Fund will distribute to you your
portion of the shares of the Acquiring Fund it receives in the Reorganization.
You will receive Class A, B, C, L and M shares of the Acquiring Fund having an
aggregate value equal to the aggregate value of that class of shares of the
Acquired Fund held by you immediately prior to the Reorganization. Following the
Reorganization, the Acquired Fund will liquidate. It is anticipated that
immediately following the Reorganization, Templeton Investment Counsel, LLC
("Templeton") and Great Companies, L.L.C. ("Great Companies") will assume the
sub-advisory functions of the Acquiring Fund and the Acquiring Fund will be
renamed TA IDEX Templeton Great Companies Global. There is no guarantee,
however, that Templeton and Great Companies will serve as co-sub-advisers to the
Acquiring Fund or that the Acquiring Fund will be renamed as indicated above, as
Great Companies' service as co-sub-adviser will require the approval of the
Acquiring Fund's shareholders.
This Proxy Statement/Prospectus solicits your vote in connection with a special
meeting of shareholders, to be held on April 23, 2004, at which Acquired Fund
shareholders will vote on the Agreement and Plan of Reorganization
("Reorganization Plan") through which these transactions will be accomplished.
Because you, as a shareholder of the Acquired Fund, are being asked to approve a
transaction that will result in your holding shares of the Acquiring Fund, this
document also serves as a prospectus for the Acquiring Fund, whose investment
objective is to maximize long-term growth.
This Proxy Statement/Prospectus, which you should retain for future reference,
contains important information about the Acquiring Fund that you should know
before investing. A Statement of Additional Information ("SAI") dated March 10,
2004, relating to this Proxy Statement/Prospectus and containing additional
information about the Reorganization and the parties thereto, has been filed
with the U.S. Securities and Exchange Commission ("SEC") 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 and Statement of Additional Information dated March 1, 2003, each of
which is incorporated herein by reference and is available, without charge, by
calling (888) 233-4339. The IDEX annual report relating to the Funds, dated
October 31, 2003, is incorporated herein by reference, and available, without
charge, 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) in
Washington, D.C., 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 Branch, Office of Consumer Affairs and Information
Services, Securities and Exchange Commission, Washington, D.C. 20549-0102.
The SEC 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: March 10, 2004
1
SUMMARY
You should read this entire Proxy Statement/Prospectus carefully. For additional
information, you should consult the IDEX Prospectus and the Reorganization Plan,
a copy of which is attached hereto as Appendix A.
THE PROPOSED REORGANIZATION -- On December 2, 2003, the Board of Trustees of
IDEX approved the Reorganization Plan with respect to each of the Funds. Subject
to approval of the Acquired Fund shareholders, the Reorganization Plan provides
for:
- - the transfer of all of the assets of the Acquired Fund to the Acquiring
Fund, in exchange for shares of the Acquiring Fund;
- - the assumption by the Acquiring Fund of all of the liabilities of the
Acquired Fund;
- - the distribution of shares of the Acquiring Fund to the shareholders of
the Acquired Fund; and
- - the complete liquidation of the Acquired Fund as a series of IDEX.
The Reorganization is expected to be effective immediately after the close of
business on April 30, 2004, or on a later date as the parties may agree (the
"Closing"). As a result of the Reorganization, each shareholder of the Acquired
Fund will become a shareholder of the Acquiring Fund. Each shareholder will
hold, immediately after the Closing, shares of the Acquiring Fund having an
aggregate value equal to the aggregate value of the same class of shares of the
Acquired Fund held by that shareholder as of the close of business on the day of
the Closing.
The Reorganization is intended to eliminate duplication of costs and other
inefficiencies arising from having two mutual funds within the same family of
funds that are similar in many respects, as well as to assist in achieving
economies of scale. Shareholders in the Acquired Fund are expected to benefit
from the larger asset base and the termination of this duplication that will
result from the Reorganization.
Approval of the Reorganization Plan with respect to the Acquired Fund requires
the affirmative vote of a majority of the outstanding voting securities of the
Acquired Fund. In the event that the shareholders of the Acquired Fund do not
approve the Reorganization, the Acquired Fund will continue to operate as a
separate entity, and the IDEX Board of Trustees will determine what further
action, if any, to take.
AFTER CAREFUL CONSIDERATION, THE BOARD OF TRUSTEES OF IDEX MUTUAL FUNDS
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:
- - As described below, the Acquired Fund has investment objectives and
policies that are similar in many respects to the investment objectives
and policies of the Acquiring Fund.
- - The Funds have the same investment adviser, AEGON/Transamerica Fund
Advisers, Inc. (the "Investment Adviser"), 570 Carillon Parkway, St.
Petersburg, Florida 33716.
- - The proposed Reorganization offers potential reductions in total
operating expenses for shareholders of each of the Funds.
- - 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
Acquiring Fund."
- - 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 (the "Code"). As such, shareholders of either Fund
will not recognize gain or loss as a result of the Reorganization. See
"Information About the Reorganization - Tax Considerations."
COMPARISON OF INVESTMENT OBJECTIVES, STRATEGIES AND MANAGEMENT - The investment
objectives and principal investment strategies of the Funds are similar in many
respects. The Funds' principal investment strategies and policies are described
in more detail below. There can be no assurance that either Fund will achieve
its stated objective.
2
ACQUIRING FUND ACQUIRED FUND
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INVESTMENT OBJECTIVE Long-term growth of capital in a manner Long-term growth of capital.
consistent with preservation of capital.
PRINCIPAL STRATEGIES AND POLICIES The Acquired Fund seeks to achieve its The fund is co-managed by two
investment objective by investing sub-advisers. Great Companies, L.L.C.
primarily in a portfolio of equity manages the domestic stock portion of
securities of foreign and domestic the Fund's portfolio. Templeton
issuers and depositary receipts. Investment Counsel, LLC. manages the
non-U.S. portion (called the "international
portion") of the Fund's portfolio. The
proportion of assets allocated to each portion
generally is based on the proportion of
securities from U.S. and foreign issuers
comprising the Morgan Stanley Capital
International World Index ("MSCIW Index"),
adjusted periodically for changes in the
index.
INVESTMENT ADVISER AEGON/Transamerica Fund Advisers, Inc. AEGON/Transamerica Fund Advisers, Inc.
SUB-ADVISER Janus Capital Management LLC Templeton Investment Counsel, LLC
("Janus") ("Templeton") and Great Companies, L.L.C.
("Great Companies") serve as
co-sub-advisers
PORTFOLIO MANAGERS Laurence Chang, CFA Tina Hellmer, CFA, Mark Beveridge,
CFA, and Gary Motyl, CFA serve as
portfolio managers for Templeton for
the international portion of the
Fund; and Jim Huguet, Gerry Bollman,
CFA, and Matt Stephani, CFA, serve as
portfolio managers for Great
Companies for the domestic portion of
the Fund.
COMPARISON OF PRINCIPAL RISKS INVOLVED IN INVESTING IN THE FUNDS -- Because the
Funds have investment objectives and policies that are similar in many respects,
the principal risks of an investment in the Funds also are similar in many
respects, although there are certain differences. Similarities include, among
others:
- - Each Fund primarily invests in equity securities such as common stock.
This type of investment involves risks. While equity securities 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 securities
a Fund holds fluctuate in price, the value of your investments in a
Fund will go up and down.
- - Each Fund invests in foreign securities. Investments in foreign
securities (including ADRs, GDRs and 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 issuer 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
3
business negotiations; less liquidity; more fluctuations in prices;
delays in settling foreign securities transactions; higher costs for
holding shares (custodial fees); higher transactions costs;
vulnerability to seizure and taxes; political instability and small
markets; different market trading days and forward currency contracts
for hedging.
- - Templeton, when managing its portion of Acquired Fund, use a
"bottom-up" approach to security selection. Janus also uses a
"bottom-up" approach to security selection for the Acquiring Fund.
- - Each Fund may invest in cash or cash equivalent for temporary defensive
purposes when adverse market conditions exist (which is inconsistent
with the Funds' principal investment strategies). Under these
circumstances, the Funds may be unable to achieve their investment
objective.
- - Each Fund may invest in convertible securities. Convertible securities
may include corporate notes or preferred stock, but ordinarily are a
long-term debt obligation of the issuer convertible at a stated
exchange rate into common stock of the issuer. As with many debt
securities, the market value of convertible securities tends to decline
as interest rates increase and conversely, to increase as interest
rates decline. Convertible securities generally offer lower interest or
dividend yields than non-convertible securities of similar quality.
However, when the market price of the common stock underlying a
convertible security exceeds the conversion price, the price of the
convertible security tends to reflect the value of the underlying
common stock. As the market price of the underlying common stock
declines, the convertible security tends to trade increasingly on a
yield basis, and thus may not depreciate to the same extent as the
underlying stock.
Differences include, among others:
- - Acquiring Fund may invest in forward foreign currency contracts and
futures for hedging.
- - For the international portion of Acquired Fund, Templeton may invest
securities of smaller companies, which Templeton describes as those
companies with a market capitalization of less than $2 billion. While
smaller companies may offer substantial opportunities for capital
growth, they also involve substantial risks and should be considered
speculative. Historically, smaller company securities have been more
volatile in price than larger company securities, especially over the
short term. Among the reasons for the greater price volatility are the
less certain growth prospects of smaller companies, the lower degree of
liquidity in the markets for such securities, and the greater
sensitivity of smaller companies to changing economic conditions.
- - Templeton's definition of "foreign securities" means those securities
issued by companies that: have its principal securities trading markets
outside the U.S.; derive a significant share of their total revenue
from either goods or services produced or sales made in markets
outside; have a significant portion of their assets outside the U.S.;
are linked to non-U.S. dollar currencies; and are organized under the
laws of, or with principal offices in, another country. This definition
may be different from what others define as "foreign securities."
- - Great Companies uses a proprietary method to select stocks when
managing the domestic portion of Acquired Fund. It seeks to achieve the
Acquired Fund's objective by investing in common stocks of U.S. based
companies that meet the Great Companies' screens for either being or
becoming a "great company" (which is described in more detail below
under "Investment Strategies and Risks").
4
INVESTMENT STRATEGIES AND RISKS
PRINCIPAL INVESTMENT STRATEGIES--
The investment strategies, restrictions and risks of the Funds are similar in
many respects, although there are certain differences. There can be no assurance
that either Fund will achieve its stated objective.
ACQUIRING FUND
- - Acquiring Fund pursues its objective by investing principally in equity
securities of foreign and domestic issuers and depositary receipts,
including ADRs, GDRs and EDRs.
- - Under normal market conditions, Acquiring Fund invests on a worldwide
basis in companies and securities issued by foreign or domestic
governments, government agencies or other government entities of any
size, regardless of country of organization or place of principal
business activity.
- - Janus employs a research oriented, "bottom-up" approach to security
selection. Foreign stocks are generally selected on a stock-by-stock
basis without regard to defined allocation among countries or
geographic regions.
- - When evaluating foreign investments, Janus (in addition to looking at
individual companies) considers such factors as: expected levels of
inflation in various countries; government policies that might affect
business conditions; the outlook for currency relationships; and
prospects for economic growth among countries, regions or geographic
areas.
- - Janus may, to a lesser extent, invest in forward foreign currency
contracts and futures for hedging.
- - Janus may decide to sell a security when its expectations regarding
growth potential change.
- - The Acquiring Fund may take a temporary defensive position when the
securities trading markets or the economy are experiencing excessive
volatility or a prolonged general decline, or other adverse conditions
exist (which is inconsistent with the Acquiring Fund's principal
investment strategies). During this time, the Acquiring Fund may invest
up to 100% of its assets in money market instruments and cash
equivalents. Under these circumstances, the Acquiring Fund may be
unable to achieve its investment objective.
ACQUIRED FUND
- - Acquired Fund is co-sub-advised; Templeton manages the non-U.S. portion
(called "international portion") of Acquired Fund, and Great Companies
manages the domestic portion of the Acquired Fund.
- - The proportion of assets allocated to each portion generally is based
on the proportion of securities from U.S. and foreign issuers
comprising the Morgan Stanley Capital International World Index ("MSCIW
Index"), a market capitalization-weighted benchmark index made up of
equities from 23 countries, including the U.S. Each of the domestic and
international portions of the Acquired Fund are adjusted periodically
to account for changes that may be made in the composition of the MSCIW
Index.
Domestic Portfolio
- Great Companies, managing the Acquired Fund's domestic
securities, seeks to achieve the objective by investing in
common stocks of U.S. based companies that meet Great
Companies' screens for either being or becoming a "great
company."
- To be considered a "great company" by Great Companies, an
initial determination is made to see if a company meets the
following criteria: be publicly traded; be a global business;
be engaged in what Great Companies considers to be a "terrific
business"; have "protective barrier(s)" such as superior brand
franchises; consider employees to be a company's most valuable
asset; have, in Great Companies' opinion, "world class
management"; and be an innovation-driven company that, in
Great Companies' opinion, can convert changes into
opportunities. Companies included in the portfolio may also
pass several additional screens Great Companies considers to
be paramount in its decision for inclusion to the portfolio.
5
- Companies identified by Great Companies for inclusion in the
fund's domestic portion of the portfolio may fall outside of
the initial screening process. The final selection process and
the addition of such companies to the fund's domestic portion
of the portfolio are at the sole discretion of Great Companies
irrespective of the stock screening process or methods used.
- The allocation of the weightings among securities held in the
domestic portion of the Acquired Fund will be driven by two
factors: intrinsic value momentum and market price of the
domestic stocks in the portfolio relative to their intrinsic
values.
International Portfolio
- Templeton, when managing the Acquired Fund's international
securities, seeks to achieve the objective by investing in
foreign securities. Templeton normally will invest primarily
in equity securities. An equity security, or stock, represents
a proportionate share of the ownership of a company. Its value
is based on the success of the company's business, any income
paid to stockholders, the value of the company's assets and
general market conditions. Common stocks, preferred stocks and
convertible securities are examples of equity securities.
Convertible securities generally are debt securities or
preferred stock that may be converted into common stock after
certain time periods or under certain circumstances.
- For purposes of the fund's investments, "foreign
securities" means those securities issued by
companies that:
- have their principal securities trading
markets outside the U.S.;
- derive a significant share of their total
revenue from either goods or services
produced or sales made in markets outside;
- have a significant portion of their assets
outside the U.S.;
- are linked to non-U.S. dollar currencies;
and
- are organized under the laws of, or with
principal offices in, another country.
- Acquired Fund's definition of "foreign securities" may differ
from the definition of the same or similar term as used in
other mutual fund prospectuses. As a result, the Acquiring
Fund may hold foreign securities that other funds may classify
differently.
- The Acquired Fund may invest a portion of its assets in
smaller companies. It considers smaller company stocks to be
generally those with market capitalizations of less than $2
billion.
- Templeton may also invest in ADRs, GDRs and EDRs, which are
certificates issued typically by a bank or trust company that
give their holders the right to receive securities issued by a
foreign or domestic company. Templeton, from time to time, may
have significant investments in one or more countries or in
particular sectors such as technology (including computer
hardware and software, electronics, and telecommunications)
and financial institutions.
- Depending upon current market conditions, Templeton generally
invests a portion of its total assets in debt securities of
companies and governments located anywhere in the world.
Templeton may use various derivative strategies seeking to
protect its assets, implement a cash or tax management
strategy or enhance its returns. With derivatives, the manager
attempts to predict whether an underlying investment will
increase or decrease in value at some future time. The manager
considers various factors, such as availability and cost, in
deciding whether to use a particular instrument or strategy.
- When choosing equity investments for this fund, Templeton
applies a "bottom-up," value-oriented, long-term approach,
focusing on the market price of a company's securities
relative to the manager's evaluation of the company's
long-term earnings, asset value and cash flow potential. The
manager also considers and analyzes various measures relevant
to stock valuation, such as a company's price/cash flow ratio,
price/earnings ratio, profit margins and liquidation value.
6
Temporary Defensive Position
- Acquired Fund may also take a temporary defensive position
when the securities trading markets or the economy are
experiencing excessive volatility or a prolonged general
decline, or when other adverse conditions exist (which is
inconsistent with the Acquired Fund's principal investment
strategies). Under these circumstances, it may be unable to
achieve its investment objective.
COMPARISON OF PORTFOLIO CHARACTERISTICS -- The following tables compare certain
characteristics of the portfolios of the Funds as of October 31, 2003:
ACQUIRING FUND ACQUIRED FUND
-------------- -------------
Net Assets (thousands) $412,541 $32,206
Number of Holdings 123 120
Portfolio Turnover Rate 103% 99%
As a percentage of net assets:
Preferred Stocks 0.5% 0.4%
Common Stocks 95.0% 94.1%
Security Lending Collateral 15.1% 11.1%
Liabilities in excess of other assets (10.6)% (5.6)%
----- -----
100.0% 100.0%
----- -----
TOP 10 HOLDINGS (AS A % OF NET ASSETS)
ACQUIRING FUND ACQUIRED FUND
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Samsung Electronics Co., Ltd. 4.0% United Technologies Corp. 5.1%
Citigroup, Inc. 3.5% Abbott Laboratories 4.4%
Roche Holding AG 3.0% Omnicom Group, Inc. 2.6%
Time Warner, Inc. 2.7% Merrill Lynch & Co., Inc. 2.6%
HSBC Holdings PLC 2.7% Mattel, Inc. 2.5%
Reliance Industries Ltd. - GDR - 144A 2.3% Lehman Brothers Holdings, Inc. 2.5%
UBS AG - Registered Shares 2.3% American International Group, Inc. 2.4%
Tyco International Ltd. 2.2% Analog Devices, Inc. 2.2%
Mitsubishi Tokyo Financial Group, Inc. 1.9% Clear Channel Communications, Inc. 2.2%
Credit Suisse Group 1.7% Marsh & McLennan Companies, Inc. 2.1%
RELATIVE PERFORMANCE -- The following table shows the average annual total
return for Class A shares of each Fund and their common comparative index,
MSCIWI. Average annual total return is shown for each calendar year since 2001
in the case of the Acquired Fund (which commenced operation in 2000) (please
note: prior to September 15, 2003, Great Companies was the sole sub-adviser of
Acquired Fund; Templeton became co-sub-adviser on that date) and since 1993 in
the case of the Acquiring Fund (which commenced operation in 1992). The Index
has an inherent performance advantage over the Funds, since an index 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.
7
CALENDAR YEAR/
PERIOD ENDED ACQUIRED FUND ACQUIRING FUND MSCIWI
------------- ------------- -------------- --------
12/31/93 N/A 31.28% 23.13%
12/31/94 N/A 0.62% 5.58%
12/31/95 N/A 20.03% 21.32%
12/31/96 N/A 26.76% 14.00%
12/31/97 N/A 20.44% 16.23%
12/31/98 N/A 24.85% 24.80%
12/31/99 N/A 63.31% 25.34%
12/31/00 N/A (17.72)% (12.92)%
12/31/01 (19.41)% (23.53)% (16.52)%
12/31/02 (21.18)% (27.00)% (19.54)%
12/31/03 27.37% 22.58% 33.76%
COMPARISON OF SECURITIES AND INVESTMENT TECHNIQUES -- The following is a summary
of the principal types of securities in which the Funds may invest and
strategies they may employ in pursuit of their investment objectives. As with
any security, an investment in a Fund involves certain risks, including loss of
principal. The Funds are subject to varying degrees of financial, market and
credit risk. An investment in the Funds 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 principal investments of, and the
primary risks of investing in, the Funds. However, the fact that a particular
risk is not identified does not mean that a Fund is prohibited from investing
its assets in investments that give rise to that risk.
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.
CONVERTIBLE SECURITIES. Convertible securities may include corporate notes or
preferred stock, but ordinarily are a long-term debt obligation of the issuer
convertible at a stated exchange rate into common stock of the issuer. As with
all debt securities, the market value of convertible securities tends to decline
as interest rates increase and conversely, to increase as interest rates
decline. Convertible securities generally offer lower interest or dividend
yields than non-convertible securities of similar quality. However, when the
market price of the common stock underlying a convertible security exceeds the
conversion price, the price of the convertible security tends to reflect the
value of the underlying common stock. As the market price of the underlying
common stock declines, the convertible security tends to trade increasingly on a
yield basis, and thus may not depreciate to the same extent as the underlying
stock.
FOREIGN STOCKS. Investments in foreign securities (including ADRs, GDRs and
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 issuer 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 transactions costs; vulnerability to seizure and taxes;
political instability and small markets; different market trading days and
forward currency contracts for hedging.
EMERGING MARKETS RISK. Investing in the securities of issuers located in or
principally doing business in emerging markets bear foreign investment risks as
discussed above. In addition, the risks associated with investing in emerging
markets are often greater than investing in developed foreign markets.
Specifically, the economic structures in emerging markets countries are less
diverse and mature than those in developed countries, and their political
systems are less stable. Investments in emerging markets countries may be
affected by national policies that restrict foreign investments. Emerging market
countries may have less developed legal structures, and the small size of their
securities markets and low trading volumes can make investments illiquid and
more volatile than investments in developed countries. As a result, a portfolio
investing in emerging market countries may be required to establish special
custody or other arrangements before investing COUNTRY, SECTOR OR INDUSTRY
FOCUS. (ACQUIRED FUND) To the extent the fund invests a significant portion of
its assets in one or more countries, sectors or industries at any time, the fund
will face a greater risk of loss due to factors affecting the single country,
sector or industry than if the fund always maintained wide diversity among the
countries, sectors and industries in which it invests.
DERIVATIVES. With derivatives, the manager attempts to predict whether an
underlying investment will increase or decrease in value at some future time.
The manager considers various factors, such as availability and cost, in
deciding whether to use a particular instrument or strategy. Derivatives may
involve additional risks and costs. Risks include: inaccurate market prediction;
prices may not match; illiquid markets; tax consequences; and leveraging.
PROPRIETARY RESEARCH. (ACQUIRED FUND) Proprietary forms of research may not be
effective and may cause overall returns to be lower than if other forms of
research are used.
SMALLER COMPANIES. (ACQUIRED FUND) Templeton defines smaller companies as those
with a market capitalization of less than $2 billion. While smaller companies
may offer substantial opportunities for capital growth, they also involve
substantial risks and should be considered speculative. Historically, smaller
company securities have been more volatile in price than larger company
securities, especially over the short term. Among the reasons for the greater
price volatility are the less certain growth prospects of smaller companies, the
lower degree of liquidity in the markets for such securities, and the greater
sensitivity of smaller companies to changing economic conditions.
8
PROPOSED NEW CO-SUB-ADVISERS TO ACQUIRING FUND
The Acquiring Fund is currently sub-advised by Janus. Upon the completion of the
Reorganization, it is anticipated that Templeton and Great Companies will become
sub-advisers of the Acquiring Fund, and the Acquiring Fund will be renamed TA
IDEX Templeton Great Companies Global. There is no guarantee, however, that
Templeton and Great Companies will serve as co-sub-advisers to the Acquiring
Fund or that the Acquiring Fund will be renamed as indicated above, and the
proposed replacement of Janus by Templeton and Great Companies is not contingent
upon consummation of the Reorganization. Great Companies will serve as a
co-sub-adviser to the Acquiring Fund if shareholders of the Acquiring Fund, at a
separate meeting, vote to approve a Sub-Advisory Agreement among the Investment
Adviser and Great Companies on behalf of the Acquiring Fund. Acquiring Fund
shareholders do not have to approve the sub-advisory relationship with
Templeton. Shareholders of the Acquired Fund are NOT being asked at this meeting
to vote to approve Templeton and Great Companies as co-sub-advisers to the
Acquiring Fund. If Templeton and Great Companies become co-sub-advisers of the
Acquiring Fund, it is anticipated that the Acquiring Fund's investment
objectives, strategies and risks will be revised to more closely resemble the
investment objectives, strategies and risks of the Acquired Fund.
COMPARISONS 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. It is expected that combining the Funds
would allow shareholders of the Acquired Fund to realize economies of scale and
lower expenses. While the Reorganization will not affect the management fee
payable with respect to the Acquiring Fund (as a percentage of the Fund's
average daily net assets), the Investment Adviser may be deemed to have a
material interest in the proposed Reorganization if Templeton and Great
Companies become co-sub-advisers of the Acquiring Fund and shareholders of the
Acquiring Fund approve a new sub-advisory agreement with Great Companies. In
that event, combination of the Funds will relieve the Investment Adviser of its
obligation to pay sub-advisory fees to Janus under the current sub-advisory
agreement applicable to the Acquiring Fund (which fees are slightly higher than
the sub-advisory fees payable to Great Companies/Templeton). In addition, should
Great Companies become a co-sub-adviser to the Acquiring Fund, the Investment
Adviser may be deemed to have a material interest in the proposed Reorganization
because Great Companies, an affiliate of the Investment Adviser, will be
receiving a portion of the sub-advisory fee instead of Janus. For further
information on the fees and expenses of the Acquiring Fund, see "More
Information Regarding the Acquiring Fund."
OPERATING EXPENSES -- The current 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 fiscal year ended October 31, 2003. Pro forma fees and expenses show
estimated fees and expenses of the Acquiring Fund after giving effect to the
proposed Reorganization as of October 31, 2003. Pro forma numbers are estimated
in good faith and are hypothetical.
ANNUAL FUND OPERATING EXPENSES (as a percentage of each Fund's average daily net
assets)
DISTRIBUTION & TOTAL ANNUAL
MANAGEMENT SERVICE (12B-1) OTHER FUND OPERATING EXPENSE NET OPERATING
FEES FEES EXPENSES EXPENSES REDUCTION(1) EXPENSES
---------- --------------- -------- -------------- ----------- -------------
ACQUIRING FUND
Class A shares 1.00% 0.35% 0.72% 2.07% 0.00% 2.07%
Class B shares 1.00% 1.00% 0.72% 2.72% 0.00% 2.72%
Class C shares 1.00% 1.00% 0.72% 2.72% 0.00% 2.72%
Class L shares 1.00% 1.00% 0.72% 2.72% 0.00% 2.72%
Class M shares 1.00% 0.90% 0.72% 2.62% 0.00% 2.62%
ACQUIRED FUND
Class A shares 0.80% 0.35% 0.90% 2.05% 0.50% 1.55%
Class B shares 0.80% 1.00% 0.90% 2.70% 0.50% 2.20%
Class C shares 0.80% 1.00% 0.90% 2.70% 0.50% 2.20%
Class L shares 0.80% 1.00% 0.90% 2.70% 0.50% 2.20%
Class M shares 0.80% 0.90% 0.90% 2.60% 0.50% 2.10%
PRO FORMA -
ACQUIRING FUND
INCLUDING
ACQUIRED FUND
Class A shares 0.80% 0.35% 0.71% 1.86% 0.31% 1.55%
Class B shares 0.80% 1.00% 0.71% 2.51% 0.31% 2.20%
Class C shares 0.80% 1.00% 0.71% 2.51% 0.31% 2.20%
Class L shares 0.80% 1.00% 0.71% 2.51% 0.31% 2.20%
Class M shares 0.80% 0.90% 0.71% 2.41% 0.31% 2.10%
1. Through a contractual arrangement with the Fund, the Investment Adviser has
agreed to limit the expenses of the Acquired Fund through 2/28/05 for expenses
(other than distribution and service fees (12b-1) fees) that exceed 1.20%.
Acquiring Fund has no expense limitation; however, once the Reorganization is
complete, an expense limitation of 1.20% through 2/28/05 will be imposed.
9
EXAMPLE -- This example is intended to help you compare the cost of investing in
the Funds and in the combined Funds on a pro forma basis. Your actual costs may
be higher or lower. The example assumes that you invest $10,000 in each Fund and
in the surviving Fund after the Reorganization for the time periods indicated.
The Example also assumes that your investment has a 5% return each year and that
the Fund's operating expenses remain the same. The 5% return is an assumption
and is not intended to portray past or future investment results. Based on the
above assumptions, you would pay the following expenses if you redeemed your
shares at the end of each period shown.
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
ACQUIRING FUND
Class A shares $748 $1,163 $1,602 $2,818
Class B shares $775 $1,144 $1,540 $2,895
Class C shares $275 $ 844 $1,440 $3,051
Class L shares $475 $ 844 $1,440 $3,051
Class M shares $461 $ 906 $1,476 $3,024
ACQUIRED FUND
Class A shares $699 $1,112 $1,549 $2,761
Class B shares $723 $1,091 $1,485 $2,838
Class C shares $223 $ 791 $1,385 $2,995
Class L shares $423 $ 791 $1,385 $2,995
Class M shares $410 $ 853 $1,422 $2,968
PRO FORMA - ACQUIRING FUND
INCLUDING ACQUIRED FUND
Class A shares $699 $1,074 $1,473 $2,586
Class B shares $723 $1,052 $1,408 $2,663
Class C shares $223 $ 752 $1,308 $2,823
Class L shares $423 $ 752 $1,308 $2,823
Class M shares $410 $ 815 $1,345 $2,796
10
You would pay the following expenses if you did not redeem your shares.
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
ACQUIRING FUND
Class A shares $748 $1,163 $1,602 $2,818
Class B shares $275 $844 $1,440 $2,895
Class C shares $275 $844 $1,440 $3,051
Class L shares $275 $844 $1,440 $3,051
Class M shares $362 $906 $1,476 $3,024
ACQUIRED FUND
Class A shares $699 $1,112 $1,549 $2,761
Class B shares $223 $791 $1,385 $2,838
Class C shares $223 $791 $1,385 $2,995
Class L shares $223 $791 $1,385 $2,995
Class M shares $311 $853 $1,422 $2,968
PRO FORMA - ACQUIRING FUND
INCLUDING ACQUIRED FUND
Class A shares $699 $1,074 $1,473 $2,586
Class B shares $223 $752 $1,308 $2,663
Class C shares $223 $752 $1,308 $2,823
Class L shares $223 $752 $1,308 $2,823
Class M shares $311 $815 $1,345 $2,796
GENERAL INFORMATION
Class A and Class M shares of the Acquired Fund issued to a shareholder in
connection with the Reorganization will not be subject to any initial sales
charge. Class B, Class L and Class M shares of the Acquiring Fund issued to a
shareholder in connection with the Reorganization will be subject to the same
contingent deferred sales charge, if any, applicable to the corresponding shares
of the Acquired Fund held by that shareholder immediately prior to the
Reorganization.
In addition, the period that the shareholder held shares of the Acquired Fund
would be included in holding period of the Acquiring Fund's shares for purposes
of calculating any contingent deferred sales charge. Similarly, Class B shares
of the Acquiring Fund issued to a shareholder in connection with the
Reorganization will convert to Class A shares eight years after the date that
the corresponding Class B shares of the Acquired Fund were purchased by
shareholders. Likewise, Class M shares of the Acquiring Fund issued to a
shareholder in connection with the reorganization will convert to Class A shares
ten years after the date that the corresponding Class M shares of the Acquired
Fund were purchased by shareholders.
Purchases of shares of the Acquiring Fund after the Reorganization will be
subject to the charges described in the table below. This is the same structure
that is currently in effect for the Acquired Fund.
11
TRANSACTION FEES ON NEW INVESTMENTS (FEES ARE PAID DIRECTLY FROM YOUR
INVESTMENT):
SHAREHOLDER FEES (fees paid directly from your investment) (Acquired Fund and
Acquiring Fund)
CLASS OF SHARES
----------------------------------------------------------
A B C(B) L M(B)
- ------------------------------------------------------------------------------------------------------------------
Maximum sales charge (load) imposed on purchases 5.50% None None None 1.00%
(as a percentage of offering price)
Maximum deferred sales charge (load) None(a) 5.00%(c) None 2.00%(d) 1.00%(e)
(as a percentage of offering 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.
(b) Class C and Class M shares currently are closed to new investors.
(c) Purchases of Class B shares are subject to a declining contingent
deferred sales charge if redeemed during the first six years of
purchase (5%-1st year; 4% - 2nd year, 3% - 3rd year; 2% - 4th year; and
1% - 5th and 6th years).
(d) Purchases of Class L shares are subject to a 2% contingent deferred
sales charge if redeemed during the first 12 months of purchase and 1%
if redeemed during the second 12 months.
(e) Purchases of Class M Shares are subject to a 1% contingent deferred
sales charge if redeemed within 18 months of purchase.
ADDITIONAL INFORMATION ABOUT ACQUIRING FUND
INVESTMENT ADVISER AND SUB-ADVISER -- The Investment Adviser has overall
responsibility for the management of the Acquiring Fund. For such services, the
Acquiring Fund pays an investment advisory fee monthly at the annual rate of
1.00% of the first $750 million of the fund's average daily net assets; 0.90% of
the next $250 million of the fund's average daily net assets; and 0.85% of
assets over $1 billion. In turn, the Investment Adviser has entered into a
sub-advisory agreement with Janus to provide investment sub-advisory services to
the Acquiring Fund. Pursuant to this agreement, Janus furnishes investment
advisory, statistical and research facilities, supervises and arranges for the
purchase and sale of securities on behalf of the Acquiring Fund and provides for
the compilation and maintenance of records pertaining to such investment
advisory services, subject to the control and supervision of IDEX's Board of
Trustees and the Investment Adviser. For such services, the Investment Adviser
pays a sub-advisory fee 0.50% of the first $750 million of the Acquiring Fund's
average daily net assets; 0.45% of the next $250 million of the Acquiring Fund's
average daily net assets; and 0.425% of assets over $1 billion.
Upon the completion of the Reorganization, it is anticipated that Templeton and
Great Companies will become the sub-advisers of the Acquiring Fund. The
Advisory Fee will be 0.80% of the first $500 million after Fund's average daily
assets and 0.70% of assets over $500 million. In that event, it is anticipated
that the Investment Adviser would pay sub-advisory fees at the following rates:
Templeton will receive 0.40% for assets that they manage up to $500 million. If
the assets managed by Templeton are less than $500 million, Great Companies
will receive 0.40% for the difference between Templeton's assets and the $500
million cap (up to the assets managed by Great Companies). For all assets above
$500 million, Great Companies and Templeton each will receive 0.35% of the
fund's average daily net assets for the portion of assets they respectively
manage.
INVESTMENT PERSONNEL -- The following individual has responsibility for the
day-to-day management of the Acquiring Fund:
LAURENCE J. CHANG, CFA, has served as manager of this fund since June 2003. From
January 2000 until June 2003, Mr. Chang served as co-manager of this fund. Mr.
Chang joined Janus Capital in 1993 as a research analyst.
PERFORMANCE OF THE ACQUIRING FUND -- The bar chart and table shown below provide
an indication of the risks of investing in the Acquiring Fund by showing (on a
calendar year basis) changes in the Acquiring Fund's annual total return from
year to year and by showing (on a calendar year basis) how the Acquiring Fund's
average annual returns for one year and since inception, compare to those of a
broad-based securities market index--the MSCIWI. Note that an index has an
inherent performance advantage over the Acquiring Fund since it imposes no sales
charges and incurs no operating expenses. An investor cannot invest directly in
an index. The information in the bar chart is based on the performance of the
Class A shares of the Acquiring Fund, although the bar chart does not reflect
the deduction of the sales load on Class A shares. If the bar chart included the
sales load, returns would be less than those shown. The Fund's past performance
(before and after taxes) is not an indication of how the Fund will perform in
the future.
12
ACQUIRING FUND
One year total return as of 12/31/03 (%)
[GRAPH]
During the period shown in the chart, the Acquiring Fund's best quarterly
performance was 43.29% for the quarter ended 12/31/99, and the Fund's worst
quarterly performance was (20.96)% for the quarter ended 9/30/01.
The table below shows the average annual total returns of the Acquiring Fund for
the periods shown. The table, which includes applicable sales charges, compares
how the Acquiring Fund's average annual total returns for different calendar
periods compare to a broad-based securities market index.
Since Inception
December 31, 2003* One Year Five Year Ten Year OCTOBER 1, 1992
- -------------------------------------------- -------- --------- -------- ---------------
Acquiring Fund
Return before taxes 15.84% (2.77)% 7.18% 10.64%
Return after taxes on distributions** 15.84% (3.13)% 6.10% 9.64%
Return after taxes on distributions and sale 10.29% (2.30)% 5.78% 9.11%
of fund shares**
MSCIWI(1) 33.76% (0.39)% 7.58% 8.69%
* Returns reflect the maximum sales load of 5.50% and include
the reinvestment of dividends and capital gains.
** 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.
(1) The MSCIW Index is a widely recognized market
capitalization-weighted benchmark index made up of equities
from 23 countries, including the U.S.
Additional information about the Acquiring Fund is included in the section,
"More Information Regarding the Acquiring Fund."
INFORMATION ABOUT THE REORGANIZATION
THE REORGANIZATION PLAN -- The Reorganization Plan provides for the transfer of
all of the assets and liabilities of the Acquired Fund to the Acquiring Fund
solely in exchange for Class A, B, C, L and M shares of the Acquiring Fund. The
Acquired Fund will distribute the shares of the Acquiring Fund received in the
exchange to its shareholders, and then the Acquired Fund will be liquidated.
After the Reorganization, each shareholder of the Acquired Fund will own shares
in the Acquiring Fund having an aggregate value equal to the aggregate value of
shares of the Acquired Fund held by that shareholder as of the close of business
on the business day preceding the Closing. Shareholders of Class A, B, C, L and
M shares of the Acquired Fund will receive shares of the corresponding class of
the Acquiring Fund. In the interest of economy and convenience, shares of the
Acquiring Fund will not be represented by physical certificates.
13
Generally, the liquidation and distribution will be accomplished by opening
accounts on the books of the Acquiring Fund in the names of the shareholders of
the Acquired Fund and transferring to those shareholders' accounts the same
class shares representing such shareholders' interest previously credited to the
account of the Acquired Fund. No sales charges or fees of any kind will be
charged to the shareholders of the Acquired Fund in connection with their
receipt of shares of the Acquiring Fund in the Reorganization.
Until the Closing, shareholders of the Acquired Fund will continue to be able to
redeem their shares. Redemption requests received after the Closing will be
treated as requests received by the 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 the 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. For a complete description of the terms and conditions
of the Reorganization, see the Reorganization Plan at Appendix A, which
qualifies in its entirety the foregoing summary of the Reorganization Plan.
REASONS FOR THE REORGANIZATION -- The Funds have investment objectives,
strategies and risks that are similar in many respects. Because the Acquired
Fund may invest in similar types of securities as the Acquiring Fund, the Funds
are somewhat duplicative. In addition, the Reorganization would create a larger
Acquiring Fund, which should benefit shareholders of the Funds by spreading
costs across a larger, combined asset base, and which may allow shareholders of
the Acquired Fund to continue to participate in a professionally managed
portfolio at the same level of operating expenses. Also, a larger Acquiring Fund
offers the potential benefit of a more diversified portfolio of securities, may
improve trading efficiency, and may eventually realize economies of scale and
lower operating expenses.
The proposed Reorganization was presented to the Board of Trustees of IDEX for
consideration and approval at a meeting held on December 2, 2003. 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) of IDEX,
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 each of the Funds and its
shareholders.
BOARD CONSIDERATIONS -- The Board of Trustees of IDEX, in recommending the
proposed transaction, considered a number of factors, including the following:
1. expense ratios and information regarding fees and expenses of the
Acquired Fund and the Acquiring Fund, which indicate that current
shareholders of the Acquired Fund will benefit from the Reorganization
by getting a comparable investment;
2. the Reorganization would allow shareholders of the Acquired Fund to
continue to participate in a professionally-managed portfolio. As
shareholders of the Acquiring Fund, these shareholders would continue
to be able to exchange into other mutual funds in the large IDEX fund
complex that offer the same class of shares in which a shareholder
currently invests;
3. the Investment Adviser's undertaking to limit the expenses of the
Acquiring Fund to 1.20%, excluding 12b-1 fees, of its average daily net
assets through February 28, 2005, subject to possible recoupment or
revision in future years.
4. the Reorganization would not dilute the interests of either Funds'
current shareholders;
5. the relative investment performance and comparable risks of the
Acquiring Fund as compared to the Acquired Fund;
6. the similarity of the Acquiring Fund's investment objectives, policies
and restrictions to those of the Acquired Fund and the fact that the
Funds are somewhat duplicative within the overall group of funds;
7. elimination of duplication of costs and inefficiencies of having two
similar Funds; and
8. the tax-free nature of the Reorganization to each Fund and its
shareholders.
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 BOARD OF TRUSTEES OF IDEX MUTUAL FUNDS RECOMMENDS THAT SHAREHOLDERS OF THE
ACQUIRED FUND APPROVE THE REORGANIZATION.
14
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 the Acquired Fund nor the 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
LLP 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, the 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 the 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 the
Acquired Fund's shareholders.
Both Funds have elected and qualified to be taxed as regulated investment
companies under Section 851-855 of the Code, and after the Reorganization, the
Acquiring Fund intends to continue to operate so as to qualify as a regulated
investment company. Following the distribution of the same class of shares to
shareholders, IDEX will terminate the Acquired Fund as a series of IDEX.
EXPENSES OF THE REORGANIZATION -- The Investment Adviser will bear the expenses
relating to the Reorganization, including but not limited to the costs of the
proxy solicitation. The costs of the Reorganization include, but are not limited
to, costs associated with preparation of the Acquiring Fund's registration
statement, printing and distributing the Acquiring Fund's prospectus and the
Acquired Fund's proxy materials, legal fees, accounting fees, securities
registration fees, and expenses of holding the shareholders' meeting.
ADDITIONAL INFORMATION ABOUT THE FUNDS
FORM OF ORGANIZATION -- Each of the Funds is a series of IDEX, a Massachusetts
business trust that was formed by a Declaration of Trust dated January 7, 1986.
IDEX is governed by a Board of Trustees. The IDEX Board of Trustees consists of
eleven individuals, eight of whom are not "interested persons" as defined in the
Investment Company Act of 1940, as amended (the "1940 Act"). The Trustees are
responsible for the overall supervision of the operation of each Fund and
perform the various duties imposed on the Trustees of investment companies in
the 1940 Act and under state law.
DISTRIBUTOR -- AFSG Securities Corporation ("AFSG" or the "Distributor"), whose
address is 4333 Edgewood Road NE, Cedar Rapids, Iowa 52499, is the principal
distributor for 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 that Fund, unless the shareholder
elects to receive distributions in cash.
If the Reorganization Plan is approved by shareholders of the Acquired Fund,
then as soon as practicable before the Closing, the Acquired Fund will pay its
shareholders a cash distribution of all undistributed net investment income and
undistributed realized net capital gains.
15
CAPITALIZATION -- The following table shows on an unaudited basis the
capitalization of each Fund as of October 31, 2003 and on a pro forma basis as
of October 31, 2003, giving effect to the Reorganization:
NET ASSETS NET ASSET SHARES OUTSTANDING
(THOUSANDS) VALUE PER SHARE (THOUSANDS)
----------- --------------- ------------------
ACQUIRING FUND
Class A Shares $189,046 $21.41 8,829
Class B Shares $153,046 $20.25 7,556
Class C Shares $ 18,495 $20.25 913
Class L Shares $ 163 $20.25 8
Class M Shares $ 51,791 $20.31 2,550
ACQUIRED FUND
Class A Shares $ 26,177 $ 6.90 3,793
Class B Shares $ 3,877 $ 6.74 575
Class C Shares $ 1,292 $ 6.74 192
Class L Shares $ 137 $ 6.74 20
Class M Shares $ 723 $ 6.77 107
PRO FORMA - ACQUIRING FUND INCLUDING ACQUIRED FUND
Class A Shares $215,223 $21.41 10,051
Class B Shares $156,923 $20.25 7,748
Class C Shares $ 19,787 $20.25 977
Class L Shares $ 300 $20.25 15
Class M Shares $ 52,514 $20.31 2,586
(1) The net assets of the Acquired Fund will be converted to shares based on the
Acquiring Fund's net asset value per share.
GENERAL INFORMATION
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 March 12, 2004. 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 ALAMO Direct (the "Solicitor"), a
professional proxy solicitation firm, to assist with any necessary solicitation
of proxies. Shareholders of the 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 $13,742, 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 the
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 Special Meeting.
VOTING RIGHTS -- Only shareholders of the Acquired Fund at the close of business
on February 27, 2004 (the "Record Date") are entitled to vote (with respect to
their shares owned as of that Record Date) at the Special Meeting or any
adjournment thereof. (Shareholders of the Acquired Fund whose shares are held
by nominees, such as brokers, can vote their proxies by contacting their
respective nominee.) At the close of business on Record Date, there were ___
shares of the Acquired Fund issued and outstanding and entitled to vote.
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.
To become effective, the proposed Reorganization must be approved by a "vote of
the majority of the outstanding voting securities" of the 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 the
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 the
Acquired Fund entitled to vote thereon.
The 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.
Security Ownership. To the knowledge of IDEX, as of February 27, 2004, 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 B hereto lists the persons that, as of the Record Date, owned
beneficially or of record 5% or more of the outstanding shares of the Acquired
Fund.
OTHER MATTERS TO COME BEFORE THE MEETING -- The Funds do not know of any matters
to be presented at the meeting other than those described in this Proxy
Statement/Prospectus. If other business should properly come before the meeting,
the proxy holders will vote thereon in accordance with their best judgment.
SHAREHOLDER PROPOSALS -- IDEX is not required to hold regular annual meetings
and, in order to minimize their costs, does not intend to hold meetings of
shareholders unless so required by applicable law, regulation, regulatory policy
or if otherwise deemed advisable by IDEX 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 IDEX.
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 -- IDEX is subject to the informational requirements
of the Securities Exchange Act and certain other federal securities statutes,
and files reports and other information with the SEC. Proxy materials, reports
and other information filed by 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 (at
http://www.sec.gov) which contains other information about the Funds.
IN ORDER THAT THE PRESENCE OF A QUORUM AT THE MEETINGS MAY BE ASSURED, PROMPT
EXECUTION AND RETURN OF THE ENCLOSED PROXY IS REQUESTED. A SELF-ADDRESSED,
POSTAGE-PAID ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE.
John K. Carter, Esq.
Senior Vice President,
Secretary & General Counsel
March 10, 2004
18
MORE INFORMATION REGARDING ACQUIRING FUND
SHAREHOLDER INFORMATION
This Proxy Statement/Prospectus relates to the separate classes of shares of the
Acquiring Fund: Class A, Class B, Class C, Class L and Class M, each of which
represents an identical interest in the Acquiring Fund's investment portfolio,
but is offered with different sales charges and distribution fee (Rule 12b-1)
arrangements. As described below and elsewhere in this Proxy
Statement/Prospectus, the contingent deferred sales load structure and
conversion characteristics of the Acquiring Fund shares issued to you in the
Reorganization will be the same as those that applied to the Acquired Fund
shares held by you immediately prior to the Reorganization, and the period that
you held the Acquired Fund shares will be included in the holding period of the
Acquiring Fund shares for purposes of calculating contingent deferred sales
charges and determining conversion rights. Purchases of the shares of the
Acquiring Fund after the Reorganization will be subject to the sales load
structure and conversion rights discussed below.
Shares of the Acquiring Fund will be available through broker/dealers, banks,
and other financial intermediaries that have an agreement with the Distributor.
A broker/dealer or other financial intermediary may charge fees in connection
with an investment in the Acquiring Fund.
NOTE: CLASS C AND CLASS M SHARES ARE CLOSED TO NEW INVESTORS.
OPENING AN ACCOUNT
If you are opening a fund account through a registered representative, he or she
can assist you with all phases of your investment.
If you are investing through an authorized dealer, the dealer is responsible for
opening your account and providing your taxpayer ID number. If you already have
an IDEX account, you do not need additional documentation.
IDEX or its agents may reject a request for purchase of shares at any time,
including any purchase under the exchange privilege.
NEW ACCOUNT APPLICATION
Fill out the New Account Application form which is included in this prospectus.
IRAs and other retirement accounts require a different application, which you
can request by calling 1-888-233-IDEX (4339) or visiting www.idexfunds.com. You
can avoid future inconvenience by signing up for any services you think you may
later use.
Note: On your application, be sure to include your social security number or
taxpayer identification number. If you don't, your account may be subject to
backup withholding, or be closed.
There are many ways that you can pay for your shares. The minimum initial
purchase per fund and per class is $1,000. There is a $50 minimum on additional
purchases. Purchases through regular investment plans, like the Automatic
Investment Plan, have no minimum to open an account, but you must invest at
least $50 monthly per fund.
The Securities and Exchange Commission (SEC) is taking an active interest in
money laundering because money laundering presents a serious risk to the
soundness of financial markets, opens financial service firms to criminal
liability, and can ruin the reputation of implicated firms. IDEX will not accept
money orders, traveler's checks, credit card convenience checks or cash.
Cashiers checks may be accepted, subject to approval by AEGON/Transamerica
Investor Services, Inc. (ATIS). Prior to September 26, 2002, ATIS was named Idex
Investor Services, Inc.
19
SHARE TRANSACTIONS
Depending on privileges established on your account, you may buy, sell or
exchange shares in several ways. You may do so in writing, by phone request or
you may access your account through the internet. You may make payments, or
receive payment for your redemptions, via an electronic funds transfer or by
check.
HOW TO SELL SHARES
Your request to sell your shares and receive payment may be subject to:
- the privileges or features established on your account such as
a systematic withdrawal plan (SWP) or telephone transactions
- the type of account you have, and if there is more than one
owner
- the dollar amount you are requesting; redemptions over $50,000
must be in writing and those redemptions greater than $100,000
require a written request with a signature guarantee
- a written request or signature guarantee may be required if
there have been recent changes made to your account (such as
an address change) or other such circumstances. A signature
guarantee assures that a signature is genuine so that you are
protected from unauthorized account transactions. Financial
institutions such as banks, savings and loan associations,
trust companies, credit unions, broker-dealers, and member
firms of a national securities exchange may guarantee your
signature. Notarization is not an acceptable substitute.
There are several ways to request redemption of your shares:
- in writing (by mail or fax)
- by internet access to your account(s) at www.idexfunds.com
- by telephone request using our touch-tone automated system,
IDEX InTouch(SM), or by a person-to-person verbal request
The proceeds of your redemption may be paid by check, or by direct deposit to
your bank account subject to any restrictions that may be applicable. Purchases
will be held at IDEX until your funds have cleared or up to 15 calendar days
before they are eligible for redemption. Certain exceptions may apply.
Shares will normally be 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. Please see the SAI for more details.
CHECKWRITING SERVICE. (For Class A and Class C shares of IDEX Transamerica Money
Market only). If you would like to use the checkwriting service, mark the
appropriate box on the application or authorization form. The fund will send you
checks when it receives these properly completed documents. Checks must be
written for at least $250 and investments made by check or ACH must have been in
your account for at least 15 days before you can write checks against them. A
service fee of $10 applies for those checks written under $250. When the check
is presented for payment, the fund will redeem a sufficient number of full and
fractional shares in your account at that day's net asset value to cover the
amount of the check. Checks presented against your account in an amount that
exceeds your available balance will be returned for "insufficient funds" and
your account will incur a $20 service fee. Due to dividends accruing on your
account it is not possible to determine your account's value in advance so you
should not write a check for the entire value or try to close your account by
writing a check. A stop payment on a check may be requested for a $20 service
fee. If you request that a checkbook to be delivered overnight, you will incur a
$20 service fee. The payment of funds is authorized by the signature(s)
appearing on the IDEX application or authorization form. Each signatory
guarantees the genuineness of the other signatures.
20
The use of checks is subject to the rules of the IDEX designated bank for its
checkwriting service. IDEX has chosen UMB Bank n.a. as its designated bank for
this service. UMB Bank, n.a. or its bank affiliate (the "Bank") is appointed
agent by the person(s) signing the IDEX application or authorization form (the
"Investor(s)") and, as agent, is authorized and directed upon presentment of
checks to the Bank to transmit such checks to IDEX as requests to redeem shares
registered in the name of the Investor(s) in the amounts of such checks.
This checkwriting service is subject to the applicable terms and restrictions,
including charges, set forth in this prospectus. The Investor(s) agrees that
he/she is subject to the rules, regulations, and laws governing check collection
including the Uniform Commercial Code as enacted in the State of Missouri,
pertaining to this checkwriting service, as amended from time to time. The Bank
and/or IDEX has the right not to honor checks presented to it and the right to
change, modify or terminate this checkwriting service at any time.
The checkwriting service is not available for tax-qualified retirement plans or
Class B, Class L or Class M shares of IDEX Transamerica Money Market.
HOW TO EXCHANGE SHARES
You can exchange $1,000 or more of one fund for shares in the same class of
another fund. Any CDSC will be calculated from the date you bought your original
shares. This means your new shares will be the same age as your old shares, so
your sales charge will not increase because of the exchange. The minimum
exchange to a new account is $1,000 unless an automatic investment plan is
established on the new account.
Prior to making exchanges into a fund that you do not own, read this prospectus
carefully. You can request share exchanges over the telephone unless you have
declined the privilege on your application. You can also exchange shares of the
same class automatically at regular intervals, from one fund to another.
SPECIAL SITUATIONS FOR EXCHANGING SHARES
- Class T shares may be exchanged for only Class A shares of any
IDEX fund, other than IDEX Janus Growth. Class A shares of all
IDEX funds are subject to distribution and service (12b-1)
fees.
- You may not exchange other classes of shares of the IDEX funds
for Class T shares.
- IDEX reserves the right to modify or terminate the exchange
privilege at any time upon 60 days written notice.
MARKET TIMING/EXCESSIVE TRADING
IDEX DOES NOT PERMIT MARKET TIMING OR EXCESSIVE TRADING AND HAS ADOPTED SPECIAL
POLICIES TO DISCOURAGE THIS ACTIVITY. IF YOU WISH TO ENGAGE IN SUCH PRACTICES,
WE REQUEST YOU DO NOT ATTEMPT TO PURCHASE SHARES OF ANY OF THE FUNDS.
Some investors try to profit from various short-term or frequent trading
strategies known as market timing; for example, switching money into mutual
funds when they expect prices to rise and taking money out when they expect
prices to fall, or switching from one fund to another and then back again after
a short period of time. As money is shifted in and out, a fund incurs expenses
for buying and selling securities. Excessive purchases, redemptions or exchanges
of Fund shares disrupt portfolio management, hurt fund performance and drive
fund expenses higher. These costs are borne by all shareholders, including the
long-term investors who do not generate these costs.
The exchange privilege is not intended as a vehicle for short-term or excessive
trading. Each fund may limit or terminate your exchange privileges or may not
accept future investments from you if you engage in excessive trading. In
determining excessive trading, we consider frequent purchases and redemptions
having similar effects as exchanges to be excessive trading. Four or more
exchanges in a quarter (3 months) will be considered excessive trading, although
each fund reserves the right to impose restrictions even if there are less
frequent transactions.
21
Specifically, each fund reserves the right to reject any request to purchase or
exchange shares that it determines may be disruptive to efficient fund
management and harmful to existing shareholders. Such a request could be
rejected because of the timing of the investment or because a history of
excessive trading by the shareholder or accounts under common control.
OTHER ACCOUNT INFORMATION
MINIMUM PURCHASES
- Initial Investment Per Fund and Per Class: $1,000;
- Subsequent Purchases: $50.
If your check, draft or electronic transfer is returned unpaid by your bank, the
Fund may charge a $15 fee.
PRICING OF SHARES
Each fund's price (NAV) is calculated on each day the New York Stock Exchange
(NYSE) is open for business.
The NAV of fund shares is not determined on days the NYSE is closed (generally
New Year's Day, Martin Luther King Day, President's Day, Good Friday, Memorial
Day, Independence Day, Labor Day, Thanksgiving and Christmas). The NAV of each
class is calculated by dividing its assets less liabilities by the number of its
shares outstanding.
If IDEX receives your request in good order by regular closing time of the NYSE
(usually 4 p.m. New York time), you will pay or receive that day's NAV plus any
applicable sales charges. If later, it will be priced based on the next day's
NAV. Share prices may change when a fund holds shares in companies traded on
foreign exchanges that are open on days the NYSE is closed.
In determining NAV, each fund's portfolio investments are valued at market
value. Investments for which quotations are not readily available are valued at
fair value determined in good faith under the supervision of the Board of
Trustees.
MINIMUM ACCOUNT BALANCE
Due to the proportionately higher cost of maintaining customer accounts with
balances below the stated minimums for each class of shares, IDEX reserves the
right to close such accounts. However, IDEX will provide a 60-day notification
to you prior to assessing a minimum account fee, or closing any account. The
following describes the fees assessed to accounts with low balances:
No fees will be charged on:
- accounts opened within the preceding 24 months
- accounts with an active monthly Automatic Investment Plan ($50
minimum per fund)
- accounts owned by individuals which, when combined by social
security number, have a balance of $5,000 or more
- accounts in which the balance of all accounts for that
household exceeds $5000
If your balance is below $1,000 $25.00 (annualized) until balance reaches $1,000
or if the balance falls below $25.00 the account
will be liquidated, as a fee.
22
TELEPHONE TRANSACTIONS
IDEX and ATIS are not liable for complying with telephone instructions which are
deemed by them to be genuine. IDEX and ATIS will employ reasonable procedures to
help ensure telephone instructions are genuine. In situations where IDEX or ATIS
reasonably believe they were acting on genuine telephone instructions, you bear
the risk of loss. These procedures may include requiring personal
identification, providing written confirmation of transactions, and tape
recording conversations. IDEX has the right to modify the telephone redemption
privilege at any time.
Telephone redemption with payment by check is not allowed within 10 days of a
change of registration/ address. Call IDEX Customer Service (1-888-233-IDEX
(4339)) or see the SAI for details. You may redeem up to $50,000 worth of shares
by phone and get your money by direct deposit to a pre-authorized bank account.
No fee is charged.
PROFESSIONAL FEES
Your financial professional may charge a fee for his or her services. This fee
will be in addition to any fees charged by IDEX. Your financial professional
will answer any questions that you may have regarding such fees.
REDEMPTIONS TRANSACTIONS PAID BY BANK WIRE
In most cases, IDEX can send your redemption money via a federal funds bank
wire. IDEX charges a $10 fee for this service, in addition to any fee your bank
may charge. For more details, call IDEX Customer Service (1-888-233-IDEX (4339))
or see the SAI.
EMPLOYEE SPONSORED ACCOUNTS
If you participate in an employer sponsored plan and wish to make an allocation
change to your current fund selection, you or your Financial Advisor must notify
IDEX by phone or in writing. Please also remember to inform your employer of the
change(s) to your fund allocation. Documentation received from your employer
will be used to properly allocate your contributions. This documentation will
supersede all other prior instructions received from you or your Financial
Advisor. (Note: If you perform a partial or complete exchange to a new fund
selection, your current fund allocation will remain unchanged for future
contributions unless specified otherwise.)
REINVESTMENT PRIVILEGE
Within a 90 day period after you sell your shares, you have the right to
"reinvest" your money in any fund of the same class. You will not incur a new
sales charge if you use this privilege within the allotted time frame. Any CDSC
you paid on your shares will be credited to your account. You may reinvest the
proceeds of a Class B share sale (less the CDSC) in Class A shares without
paying the up-front sales charge. Send your written request to IDEX along with
your check for your reinvestment privileges.
STATEMENTS AND REPORTS
IDEX will send you a confirmation statement after every transaction that affects
your account balance or registration. Please review the confirmation statement
carefully and promptly notify IDEX in writing of any error or you will be deemed
to have ratified the transaction as reported to you. If you are enrolled in the
Automatic Investment Plan and invest on a monthly basis, you will receive a
quarterly confirmation. Information about the tax status of income dividends and
capital gains distributions will be mailed to shareholders early each year.
Financial reports for the funds, which include a list of the holdings, will be
mailed twice a year to all shareholders.
A Historical Statement may be ordered for transactions of prior years.
23
SHARE CERTIFICATES
IDEX does not issue share certificates. If you are redeeming or exchanging
shares represented by certificates previously issued by IDEX, you must return
the certificates with your written redemption or exchange request. For your
protection, send your certificates by registered mail, but do not endorse them.
PERSONAL SECURITIES TRADING
IDEX permits "Access Persons" as defined by Rule 17j-1 under the 1940 Act to
engage in personal securities transactions, subject to the terms of the Code of
Ethics and Insider Trading Policy that has been adopted by the Board of Trustees
of IDEX. Access Persons must use the guidelines established by this Policy for
all personal securities transactions and are subject to certain prohibitions on
personal trading. The IDEX sub-advisers, pursuant to Rule 17j-1 and other
applicable laws, and pursuant to the terms of the Policy, must adopt and enforce
their own Code of Ethics and Insider Trading Policies appropriate to their
particular business needs. Each sub-adviser must report to the Board of Trustees
on a quarterly basis with respect to the administration and enforcement of such
Policy, including any violations thereof which may potentially affect IDEX.
DISTRIBUTIONS AND TAXES
Each of the funds intends to elect and qualify as a regulated investment company
under the Internal Revenue Code. As a regulated investment company, a fund will
not be subject to federal income tax on ordinary income and capital gains, if
any, that it distributes to its shareholders.
TAXES ON DISTRIBUTIONS FROM IDEX
The following summary does not apply to:
- qualified retirement accounts
- tax-exempt investors; or
- exempt-interest distributions from IDEX Federated Tax Exempt
Fund distributions are taxable to you 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 to you as
long-term capital gain (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 of the 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. The tax status of dividends and distributions for each
calendar year will be detailed in your annual tax statement or tax forms from
IDEX.
TAXES ON THE SALE OF SHARES
Any sale or exchange or redemption of fund shares may generate tax liability
(unless you are a tax-exempt investor or your investment is in a qualified
retirement or other tax-advantaged account). You will generally recognize
taxable gain or loss on a sale, exchange or redemption of your shares based upon
the difference between your cost (basis) in the shares and the amount you
receive for them. Any loss recognized on shares held for six months or less will
be treated as long-term capital loss to the extent of any capital gain dividends
that were received with respect to the shares.
If you receive an exempt-interest dividend on shares that are held by you for
six months or less, any loss on the sale or exchange of the shares will be
disallowed to the extent of such dividend amount.
24
WITHHOLDING TAXES
IDEX will be required to withhold 30% of any reportable income payments made to
a shareholder (which may include dividends, capital gain distributions, and
share redemption proceeds) if the shareholder has not provided IDEX with an
accurate taxpayer identification number in the manner required by IRS
regulations.
Please note that starting January 1, 2004, the withholding amount will change to
29%.
UNCASHED CHECKS ISSUED ON YOUR ACCOUNT
If any check we issue related to your account is returned by the Post Office as
undeliverable, or remains outstanding (uncashed) for six months, we reserve the
right to reinvest check proceeds back into your open account at the net asset
value next calculated after reinvestment. If applicable, we will also change
your account distribution option from CASH to REINVEST. Interest does not accrue
on amounts represented by uncashed checks.
MINIMUM DIVIDEND CHECK AMOUNTS
To control costs associated with issuing and administering dividend checks, we
reserve the right to not issue checks under a specified amount. For accounts
with the CASH BY CHECK dividend distribution option, if the dividend payment
total is less than $10, the distribution will be reinvested into the account and
no check will be issued, though the account option for future distributions will
remain unchanged, subject to the preceding paragraph.
NON-RESIDENT ALIEN WITHHOLDING
If you are a non-U.S. investor, your financial professional should determine
whether Fund shares may be sold in your jurisdiction. Shareholders that are not
U.S. persons under the Internal Revenue Code are subject to different tax rules.
Dividends, capital gains and redemptions may be subject to non-resident alien
withholding.
Additionally, a valid IRS W-8 form is required if you are not a U.S. citizen or
resident alien. Documentary evidence may also be required if a U.S. address is
indicated or if your permanent address is not the same as your mailing address.
Please see the instructions on one of the new series of IRS W-8 forms.
OTHER TAX INFORMATION
This tax discussion is for general information only. In addition to federal
income taxes, you may be subject to state, local or foreign taxes on payments
received from IDEX. More information is provided in the SAI. You should also
consult your own tax advisor for information regarding all tax consequences
applicable to your investments in IDEX.
INVESTMENT POLICY CHANGES
IDEX Transamerica Equity, IDEX Jennison Equity Opportunity, IDEX PBHG Mid Cap
Growth, IDEX Isabelle Small Cap Value, IDEX T. Rowe Price Small Cap, IDEX Great
Companies -- Technology(SM), IDEX T. Rowe Health Sciences, IDEX PIMCO Real
Return TIPS, IDEX Janus Flexible Income, IDEX Transamerica Conservative
High-Yield Bond, IDEX Transamerica Convertible Securities, and IDEX Federated
Tax Exempt, as part of each fund's investment policy, invest at least 80% of its
assets (defined as net assets plus the amount of any borrowing for investment
purposes) in certain securities as indicated in this prospectus. Shareholders
will be provided with at least 60 days' prior written notice of any changes in
the 80% investment policy. Such notice will comply with the conditions set forth
in any applicable SEC rules then in effect.
25
HOW TO BUY SHARES TO OPEN A NEW ACCOUNT (FIRST-TIME IDEX INVESTORS)
By Mail Send your completed application and check payable to:
AEGON/Transamerica Investor Services, Inc., P.O. Box 9015,
Clearwater, Florida 33758-9015;
For Overnight Delivery: 570 Carillon Parkway,
St. Petersburg, Florida 33716
Through an Authorized Dealer The dealer is responsible for opening your account and providing IDEX with your
Taxpayer ID Number. The minimum order from an authorized dealer is $1,000 for all
funds.
By Automatic Investment Plan Send your completed application, along with a check for your initial investment
(if any), payable to AEGON/Transamerica Investor Services, Inc., P.O. Box 9015,
Clearwater, Florida 33758-9015.
TO ADD TO YOUR EXISTING ACCOUNT
By Check Make your check payable to AEGON/Transamerica Investor Services, Inc. and mail it
to: P.O. Box 9015, Clearwater, FL 33758-9015; or, for overnight delivery: 570
Carillon Parkway, St. Petersburg, FL 33716. Third party checks, or checks endorsed
to IDEX, will not be accepted. All checks must be made payable to AEGON/Transamerica
Investor Services, Inc. IDEX will not accept money orders, traveler's checks, credit
card convenience checks or cash. Cashiers checks may be accepted, subject to
approval by ATIS. NOTE: IDEX is also unable to process check conversion
transactions.
By 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. Your bank may require
a 10-day pre-note. Call or write IDEX Customer Service to establish an AIP.
By Telephone The electronic funds transfer privilege must be established in advance, when you
open your account, or by adding this feature to your existing account. Select
"Electronic Bank Link" on the Application or write to IDEX. Funds can then be
transferred electronically from your bank to IDEX. Call IDEX Customer Service to
invest by phone, either through our automated IDEX InTouch(SM) system (1-888-233-IDEX
(4339)), or by speaking directly with your representative. Your bank may require a
10-day pre-note. Shares will be purchased via electronic funds when the money is
received by IDEX, usually 2-4 business days after the request.
Through Authorized Dealers If your dealer has already established your account for you, no additional
documentation is needed. Call your dealer to place your order. The dealer's bank may
charge you for a wire transfer. (IDEX currently does not charge for this service.)
IDEX must receive your payment within three business days after your order is
accepted.
By the Internet You may request a transfer of funds from your bank account to IDEX. Visit our website
at www.idexfunds.com. Payment will be transferred from your bank account
electronically. Shares will be purchased via electronic funds when the money is
received by IDEX, usually 2-4 business days after the request. Please contact IDEX
at www.idexfunds.com.
By Payroll Deduction You may have money transferred regularly from your payroll to your IDEX account.
Please instruct your employer's payroll department to do so. Call IDEX Customer
Service (1-888-233-IDEX (4339)) to establish this deduction.
By Wire Transfer Request that your bank wire funds to IDEX. You must have an existing account to
make a payment by wire transfer. Ask your bank to send your payment to: Bank of
America, NA, Tampa, FL, ABA# 063100277, Credit: AEGON/Transamerica Investor Services
Acct #: 3601194554, Ref: Shareholder name, IDEX fund and account numbers.
26
TO RECEIVE PAYMENT BY HOW TO REQUEST YOUR REDEMPTION
Direct Deposit -- ACH (only for Call IDEX Customer Service (1-888-233-IDEX (4339)) to verify that this feature is
accounts that are not qualified in place on your account. Maximum amount per day is the lesser of your balance or
retirement plans) $50,000. Request an "ACH redemption" in writing, by phone (automated IDEX InTouch(SM)
system (1-888-233-IDEX (4339)) or person-to-person), or by internet access to your
account. Payment should usually be received by your bank account 3-5 banking days
after your request. IDEX does not charge for this payment option. Certain IRAs and
Qualified Plans may not be eligible for ACH redemptions.
Direct Deposit (electronic funds Call IDEX Customer Service (1-888-233-IDEX (4339)) to be sure this feature is in
transfer-federal funds bank place on your account. Maximum amount per day is the lesser of your available
wire) balance or $50,000 (with a minimum of $1,000). Request an "Expedited Wire
Redemption" in writing, or by phone (person-to-person request). Payment should be
received by your bank account the next banking day after your request. IDEX charges
$10 for this service. Your bank may charge a fee as well.
Check to the address of record WRITTEN REQUEST:
Send a letter requesting a withdrawal to IDEX and include any share certificates you
may have. Specify the fund, account number, and dollar amount or number of shares
you wish to redeem. Mail to: AEGON/Transamerica Investor Services, Inc., P.O. Box
9015, Clearwater, FL 33758-9015. Attention: Redemptions. Be sure to include all
account owners' signatures and any additional documents, as well as a signature
guarantee(s) if required (see "How To Sell Shares").
TELEPHONE OR INTERNET REQUEST:
If your request is not required to be in writing (see "How To Sell Shares"), you may
call IDEX Customer Service (1-888-233-IDEX (4339)) and make your request using the
automated IDEX InTouch(SM) system (1-888-233-IDEX (4339)), 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.
If you request that a withdrawal check to be delivered overnight, a $20 overnight
fee will be assessed; for Saturday delivery, a $30 overnight fee will be assessed.
For your protection, if an address change was made in the last 10 days, IDEX
requires a redemption request in writing, signed and signature guaranteed by all
shareholders.
Check to another party/address This request must be in writing, regardless of amount, with all account owners'
signatures guaranteed. Mail to: AEGON/Transamerica Investor Services, Inc., P.O. Box
9015, Clearwater, FL 33758-9015. Attention: Redemptions.
Periodic automatic payment (by You can establish a Systematic Withdrawal Plan (SWP) either at the time you open
direct deposit-ACH or check) your account or at a later date. Call IDEX Customer Service (1-888-233-IDEX (4339))
for assistance. You must have a minimum balance of $10,000 in your fund.
By Exchange You may request an exchange in writing, by phone (automated IDEX InTouch(SM) system
(1-888-233-IDEX (4339)) or person-to-person), or by accessing your account through
the internet.
Through an Authorized Dealer You may redeem your shares through an authorized dealer. (They may impose a service
charge.) Contact your Registered Representative or call IDEX Customer Service
(1-888-233-IDEX (4339)) for assistance.
NOTE: Purchases must be held at IDEX until the funds have cleared or up to 15
calendar days before they are eligible for redemption. Certain
exceptions may apply.
CHOOSING A SHARE CLASS
IDEX offers five share classes, each with its own sales charge and expense
structure. (An additional class, Class T, is offered through IDEX Janus Growth,
but Class T shares are not available to new investors.) The Class M shares have
an initial sales charge of 1.00% and a contingent deferred sales charge (CDSC)
of 1.00% if you redeem within 18 months of purchase. The sales charge and CDSC
only apply to shares purchased after February 28, 1999.
27
IDEX began offering the current Class C share on November 1, 1999. This new
Class C share has no initial or deferred sales charges. All shares that were
designated as Class C shares prior to March 1, 1999, which then converted to
Class M shares on that date, will continue as Class M shares. Effective November
11, 2002, Class C and Class M shares were closed to new investors.
IDEX also began offering Class L shares on November 11, 2002. Class L shares
have no initial sales charge and a contingent deferred sales charge of 2.00% if
you redeem within the first 12 months of purchase and 1.00% if you redeem in the
second 12 months.
The amount of your investment and the amount of time that you plan to hold your
shares will determine which class of shares you should choose. You should make
this decision carefully because all of your future investments in your account
will be in the same share class that you designate when you open your account.
Your financial professional can help you choose the share class that makes the
best sense for you.
If you are investing a large amount and plan to hold your shares for a long
period, Class A, Class L or Class M shares may make the most sense for you. If
you are investing a lesser amount, you may want to consider Class B shares (if
you plan to invest for a period of at least 6 years) or Class C shares (if you
plan to invest for a period of less than 6 years).
IDEX may, at any time and in its sole discretion, add, delete, or change the
sales charges for any share class.
CLASS A SHARES -- FRONT LOAD
With Class A shares, you pay an initial sales charge only when you buy shares.
(The offering price includes the sales charge.) NOTE: You do not pay an initial
sales charge on Class A IDEX Transamerica Money Market purchases.
If you are investing $1 million or more (either as a lump sum or through any of
the methods described in this prospectus), you can purchase Class A shares
without any sales charge. However, if you redeem any of those shares within the
first 24 months after buying them, you will pay a 1.00% CDSC, unless they were
purchased through a 401k plan.
Also, for 401k plans only, IDEX will treat Class A share purchases in an amount
of less than $1 million that are sponsored by employers with 100 or more
eligible employees as if such purchases were equal to an amount more than $1
million.
28
CLASS C SHARES - CLASS M SHARES -
(CLOSED TO NEW CLASS L SHARES - (CLOSED TO NEWCLASS T SHARES -
CLASS A SHARES - CLASS B SHARES - INVESTORS) LEVEL AND INVESTORS)(CLOSED TO NEW
FRONT LOAD BACK LOAD LEVEL LOAD BACK LOAD LEVEL LOAD INVESTORS)
- - Initial sales No up-front No up-front No up-front Initial Initial
charge of 5.50% sales sales sales sales charge of sales charge of
(except for IDEX charge charge charge 1.00% 8.50% or
Janus Flexible less
Income, IDEX Deferred No deferred 12b-1 12b-1
Transamerica sales charge of sales distribution distribution - No 12b-1
Conservative 5.00% or charge and service and service distribution
High-Yield Bond, less on fees of fees of and
IDEX PIMCO Total shares you - 12b-1 1.00%* 0.90%* service
Return, IDEX sell within distribution (except for fees
PIMCO Real 6 years and service - Deferred the IDEX
Return TIPS, (see fees of sales charge of Federated - Sales
IDEX deferred 1.00%* 2.00% if Tax Exempt, charge
Transamerica sales you sell whose 12b-1 percentage
Convertible charge - No within 12 distribution can be
Securities and table) conversion to months of and service reduced in
IDEX Federated Class A purchase, fee is the same
Tax Exempt which - 12b-1 shares; and 1.00% 0.60%) four ways
is 4.75%) or distribution expenses do if you sell as Class A
less and service not within the - Deferred Shares
fees of decrease 2nd 12 sales charge of (see Class
- - no initial sales 1.00%* months of 1.00% if A Share
charge for IDEX purchase you sell Quantity
Transamerica - Automatic within 18 Discounts
Money Market conversion months of Table)
to Class A purchase
- - Discounts of shares
sales charge for after 8 - Automatic
larger years, conversion
investments (see reducing to Class A
Class A Share future Shares
Quantity annual after 10
Discount Table) expenses years,
reducing
- - 12b-1 future
distribution and annual
service fees of expenses
0.35%*
- - Lower annual
expenses than
Class B, C or M
shares due to
lower 12b-1
distribution and
service fees
*See the asset allocation funds for additional information regarding 12b-1 fees.
29
CLASS B SHARES -- BACK LOAD
Class B shares are sold in amounts up to $250,000 per fund. With Class B shares,
you pay no initial sales charge when you invest, but you are charged a CDSC when
you sell shares you have held for six years or less, as described in the table
below.
Class B shares automatically convert to Class A shares after 8 years, lowering
annual expenses from that time on.
CONTINGENT DEFERRED SALES CHARGE - CLASS B SHARES
YEAR AFTER PURCHASING AS A % OF DOLLAR AMOUNT (SUBJECT TO CHANGE)
- --------------------- -------------------------------------------
First 5%
Second 4%
Third 3%
Fourth 2%
Fifth 1%
Sixth 1%
Seventh and Later 0%
CLASS C SHARES -- LEVEL LOAD
(Closed to new investors)
With Class C shares, you pay no initial sales charge or CDSC. There are 12b-1
distribution and service fees of up to 1.00% per year. (Except for the asset
allocation funds.)
CLASS L SHARES -- LEVEL LOAD
With Class L shares, you pay no initial sales charge. You will pay a 2% CDSC if
shares are redeemed during the first 12 months, and a 1.00% CDSC if redeemed
during the second 12 months.
AFSG may enter into agreements with brokers and dealers whereby such shares may
be subject to a CDSC for one year only, not the twenty-four month period
otherwise applicable to Class L shares.
CLASS M SHARES -- LEVEL LOAD
(Closed to new investors)
Class M shares are sold in amounts up to $1 million. With Class M shares, you
pay an initial sales charge of 1.00% based on offering price. (The offering
price includes the sales charge.) There are 12b-1 distribution and service fees
of 0.90% per year. If you redeem within 18 months from the date of purchase, you
will incur a CDSC of 1.00%.
Class M shares purchased on or after November 1, 1999 automatically convert to
Class A shares after 10 years, lowering annual expenses from that time on.
CONTINGENT DEFERRED SALES CHARGE
Your shares may be subject to a CDSC. Dividends and capital gains are not
subject to the sales charge. There is no charge on any increase in the value of
your shares. To ensure that you pay the lowest CDSC possible, the Fund will
always use the shares with the lowest CDSC to fill your redemption requests. If
your shares are worth less than when you bought them, the charge will be
assessed on their current, lower value. In some cases, the sales charge may be
waived.
30
CLASS A SALES CHARGE REDUCTIONS
You can lower the sales charge percentage in four ways:
- Substantial investments receive lower sales charge rates.
Please see the SAI for details on these reductions.
- The "rights of accumulation" allows you, your spouse and minor
children to include existing Class A shares (or Class T shares
of IDEX Janus Growth) as part of your current investments for
sales charge purposes. Certain qualified groups are also
eligible for rights of accumulation.
- A "letter of intent" allows you to count all Class A share
investments in an IDEX fund over the next 13 months, as if you
were making them all at once, to qualify for reduced sales
charges.
- By investing as part of a qualified group.
CLASS A SHARE QUANTITY DISCOUNTS
(ALL FUNDS EXCEPT IDEX JANUS FLEXIBLE INCOME, IDEX TRANSAMERICA
CONSERVATIVE HIGH-YIELD BOND, IDEX PIMCO TOTAL RETURN, IDEX
PIMCO REAL RETURN TIPS, IDEX TRANSAMERICA CONVERTIBLE SECURITIES,
IDEX FEDERATED TAX EXEMPT AND IDEX TRANSAMERICA MONEY MARKET)
SALES CHARGE AS % SALES CHARGE AS %
AMOUNT OF PURCHASE OF OFFERING PRICE OF AMOUNT INVESTED
--------------------------------- ----------------- ------------------
Under $50,000 5.50% 5.82%
$50,000 to under $100,000 4.75% 4.99%
$100,000 to under $250,000 3.50% 3.63%
$250,000 to under $500,000 2.75% 2.83%
$500,000 to under $1,000,000 2.00% 2.04%
$1,000,000 and over 0.00% 0.00%
CLASS A SHARE QUANTITY DISCOUNTS
(IDEX JANUS FLEXIBLE INCOME, IDEX TRANSAMERICA CONVERTIBLE SECURITIES,
IDEX PIMCO TOTAL RETURN, IDEX PIMCO REAL RETURN TIPS, IDEX
TRANSAMERICA CONSERVATIVE HIGH-YIELD BOND & IDEX FEDERATED TAX EXEMPT)
SALES CHARGE AS % SALES CHARGE AS %
AMOUNT OF PURCHASE OF OFFERING PRICE OF AMOUNT INVESTED
--------------------------------- ----------------- ------------------
Under $50,000 4.75% 4.99%
$50,000 to under $100,000 4.00% 4.17%
$100,000 to under $250,000 3.50% 3.63%
$250,000 to under $500,000 2.25% 2.30%
$500,000 to under $1,000,000 1.25% 1.27%
$1,000,000 and over 0.00% 0.00%
WAIVERS OF SALES CHARGES
WAIVER OF CLASS A AND CLASS T SALES CHARGES
Class A and Class T shares may be purchased without a sales charge by:
- Current or former IDEX trustees, directors, officers,
full-time employees or sales representatives of IDEX, ATFA,
any of the sub-advisers or any of their affiliates
- Directors, officers, full-time employees and sales
representatives of dealers having a sales agreement with ATFA.
31
- Any trust, pension, profit-sharing or other benefit plan for
any of the foregoing persons.
- "Wrap" accounts for the benefit of clients of certain
broker-dealers, financial institutions or financial planners,
who have entered into arrangements with IDEX or AFSG.
Persons eligible to buy Class A and Class T shares at NAV may not
impose a sales charge when they re-sell those shares.
WAIVER OF CLASS A, CLASS B, CLASS L, CLASS M, AND CLASS T REDEMPTION CHARGES
You will not be assessed a sales charge for shares if you sell in the
following situations
- Following the death of the shareholder on redemptions from the
deceased person's account only. If this deceased person's
account is re-registered to another name, sales charges would
continue to apply to this new account.
- Following the total disability of the shareholder (as
determined by the Social Security Administration -- applies
only to shares held at the time the disability is determined).
- On redemptions made under the Fund's systematic withdrawal
plan (may not exceed 12% of the account value on the day the
systematic withdrawal plan was established). NOTE: The amount
redeemed under this waiver does not need to be under a
systematic withdrawal plan. If it is not under a systematic
withdrawal plan, it is limited to one redemption per calendar
year up to 12% of your account balance at the time of
redemption.
- If you redeem your shares and reinvest the proceeds in the
same class of any fund within 90 days of redeeming, the sales
charge on the first redemption is waived.
MANAGEMENT OF THE FUND
INVESTMENT ADVISER -- The Investment Adviser serves as the investment adviser
for the Acquiring Fund. The investment adviser hired Janus, as sub-adviser, to
furnish investment advice and recommendations. The investment adviser also
monitors the sub-adviser's buying and selling of securities and administration
of the Fund.
The Investment Adviser is directly owned by Western Reserve Life Assurance Co.
of Ohio (78%) (Western Reserve) and AUSA Holding Company (22%) (AUSA), both of
which are indirect wholly-owned subsidiaries of AEGON N.V. Great Companies is a
30% owned indirect subsidiary of AUSA. AUSA is wholly-owned by Transamerica
Holding Company, which 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. The Distributor is an affiliate of ATFA and the
Fund.
AEGON/Transamerica Series Fund, Inc. (ATSF) received an Order from the
Securities and Exchange Commission (Release IC-23379 dated August 5, 1998) that
permits IDEX and its investment adviser, the Investment Adviser, subject to
certain conditions, and without the approval of shareholders to:
(1) employ a new unaffiliated sub-adviser for a fund pursuant to the terms of a
new investment sub-advisory agreement, either as a replacement for an existing
sub-adviser or as an additional sub-adviser;
(2) materially change the terms of any sub-advisory agreement; and
(3) continue the employment of an existing sub-adviser on sub-advisory contract
terms where a contract has been assigned because of a change of control of the
sub-adviser. In such circumstances, shareholders would receive notice and
information about the new sub-adviser within ninety (90) days after the hiring
of any new sub-adviser.
The Order was issued to ATSF and is applicable to all open-end management
investment companies advised by the Investment Adviser, or a person controlling,
controlled by, or under common control with the Investment Adviser. ATSF and
IDEX are affiliates and both are advised by the Investment Adviser; thus the
Order includes both ATSF and IDEX. IDEX will also refer to this Order for any of
the transactions listed above.
32
DISTRIBUTIONS AND DIVIDENDS
The Acquiring Fund pays dividends from net investment income, and distributes
net capital gains, if any, at least annually. Dividends and distributions are
automatically reinvested in additional shares of the respective class of the
Acquiring Fund, unless the shareholder requests cash. There are no fees or
sales charges on reinvestments.
FINANCIAL HIGHLIGHTS FOR ACQUIRING FUND
For a Share Outstanding Throughout Each Period
The Acquiring Fund. The financial highlights table is intended to help you
understand the Acquiring Fund's financial performance for its shares for each
period 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, 2003 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.
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(d)(g) OF PERIOD INCOME (LOSS) GAIN (LOSS) OPERATIONS INCOME CAPITAL GAINS DISTRIBUTIONS
--------------------------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 $19.06 $(0.05) $ 2.40 $ 2.35 $ -- $ -- $ --
10/31/2002 23.67 (0.08) (4.53) (4.61) -- -- --
10/31/2001 40.20 (0.07) (13.99) (14.06) -- (2.47) (2.47)
10/31/2000 33.80 -- 7.53 7.53 -- (1.13) (1.13)
10/31/1999 24.09 0.22 9.49 9.71 -- -- --
--------------------------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 18.14 (0.17) 2.28 2.11 -- -- --
10/31/2002 22.71 (0.22) (4.35) (4.57) -- -- --
10/31/2001 38.97 (0.27) (13.52) (13.79) -- (2.47) (2.47)
10/31/2000 32.98 (0.41) 7.53 7.12 -- (1.13) (1.13)
10/31/1999 23.62 (0.13) 9.49 9.36 -- -- --
--------------------------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 18.14 (0.17) 2.28 2.11 -- -- --
10/31/2002 22.72 (0.22) (4.36) (4.58) -- -- --
10/31/2001 38.98 (0.27) (13.52) (13.79) -- (2.47) (2.47)
10/31/2000 32.98 (0.40) 7.53 7.13 -- (1.13) (1.13)
--------------------------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 18.00 (0.17) 2.42 2.25 -- -- --
--------------------------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 18.18 (0.15) 2.28 2.13 -- -- --
10/31/2002 22.72 (0.20) (4.34) (4.54) -- -- --
10/31/2001 38.94 (0.24) (13.51) (13.75) -- (2.47) (2.47)
10/31/2000 32.91 (0.37) 7.53 7.16 -- (1.13) (1.13)
10/31/1999 23.56 (0.14) 9.49 9.35 -- -- --
33
RATIOS/SUPPLEMENTAL DATA
-------------------------------------------------------
NET ASSETS, RATIO OF EXPENSES TO NET INVESTMENT
YEAR OR NET ASSET END OF AVERAGE NET ASSETS(a) INCOME (LOSS) TO
PERIOD VALUE, END TOTAL PERIOD --------------------- AVERAGE PORTFOLIO
ENDED(g) OF PERIOD RETURN(c) (000'S) NET(e) TOTAL(f) NET ASSETS(a) TURNOVER RATE(b)
---------------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 $21.41 12.33% $ 189,046 2.07% 2.07% (0.26)% 103%
10/31/2002 19.06 (19.46) 225,722 1.88 1.88 (0.34) 72
10/31/2001 23.67 (37.08) 374,626 1.63 1.63 (0.24) 79
10/31/2000 40.20 22.26 749,671 1.64 1.64 (0.56) 53
10/31/1999 33.80 40.31 487,787 1.73 1.73 (0.22) 145
---------------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 20.25 11.57 153,046 2.72 2.72 (0.91) 103
10/31/2002 18.14 (20.09) 193,259 2.53 2.53 (0.99) 72
10/31/2001 22.71 (37.58) 320,693 2.28 2.28 (0.89) 79
10/31/2000 38.97 21.62 614,789 2.29 2.29 (1.21) 53
10/31/1999 32.98 39.62 283,847 2.38 2.38 (0.87) 145
---------------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 20.25 11.57 18,495 2.72 2.72 (0.91) 103
10/31/2002 18.14 (20.09) 27,332 2.53 2.53 (0.99) 72
10/31/2001 22.72 (37.58) 54,221 2.28 2.28 (0.89) 79
10/31/2000 38.98 21.62 116,071 2.29 2.29 (1.21) 53
---------------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 20.25 12.50 163 2.72 2.72 (0.92) 103
---------------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 20.31 11.72 51,791 2.62 2.62 (0.81) 103
10/31/2002 18.18 (20.00) 77,884 2.43 2.43 (0.89) 72
10/31/2001 22.72 (37.48) 149,070 2.18 2.18 (0.79) 79
10/31/2000 38.94 21.72 306,667 2.19 2.19 (1.11) 53
10/31/1999 32.91 39.73 155,147 2.28 2.28 (0.77) 145
Notes to Financial Highlights
(a) Annualized.
(b) Not annualized for periods of less than one year.
(c) Total Return has been calculated for the applicable period without
deduction of a sales load, if any, on an initial purchase. Periods of
less than one year not annualized.
(d) Per share information is calculated based on average number of shares
outstanding for the periods ending 10/31/2001, 10/31/2002 and
10/31/2003.
(e) Ratio of Net Expenses to Average Net Assets is net of fee waivers and
reimbursements by the investment adviser, if any.
(f) Ratio of Total Expenses to Average Net Assets includes all expenses
before fee waivers and reimbursements by the investment adviser.
(g) The inception date for the Acquiring Fund's offering of share classes C
and L are as follows:
Class C - November 1, 1999
Class L - November 11, 2002
34
APPENDIX A
AGREEMENT & PLAN OF REORGANIZATION
THIS AGREEMENT & PLAN OF REORGANIZATION (the "Plan") is made as of the 2nd day
of December 2003 by IDEX Mutual Funds (the "Company") with its principal place
of business at 570 Carillon Parkway, St. Petersburg, Florida 33716, on behalf
of IDEX Janus Global (the "Acquiring Fund") and IDEX Templeton Great Companies
Global (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").
35
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 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.
36
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 April 30, 2004, 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.
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;
37
(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;
(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 Bylaws 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, 2003 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, 2003 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,
38
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;
(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
39
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 Bylaws 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, 2003 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 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, 2003, 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
40
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.
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.
41
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.
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
42
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.
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.
43
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: /s/ Brian C. Scott
Name: Brian C. Scott
Title: President & Chief Executive Officer
44
APPENDIX B
REPORT FOR IDEX JANUS GLOBAL
SET FORTH BELOW IS AN EXCERPT FROM THE IDEX ANNUAL REPORT, DATED OCTOBER 31,
2003, REGARDING THE ACQUIRING FUND'S PERFORMANCE:
MARKET ENVIRONMENT
Mirroring equity markets in the U.S., foreign markets closed out the fiscal year
higher. The period started on a positive note as most international stock
markets staged a comeback after stumbling to multiyear lows in early October
2002. Global economic data and sentiment among corporate leadership was
decidedly mixed, however, suggesting that gains were driven more by a shift in
investor psychology than a noticeable improvement in the business climate. As
the new year commenced, the march toward military conflict between the U.S. and
Iraq dominated action in markets around the world, pressuring stocks and
delaying any potential progress in the tepid global economic recovery.
Later, equity markets bounced back handsomely as major hostilities in Iraq came
to an end. Markets in Europe were further aided by the European Central Bank's
decision in June to cut its key lending rate by a half-point to 2%, the third
reduction since November. At the conclusion of the period, signs of a worldwide
economic rebound continued to emerge and markets built on earlier gains.
Meanwhile, the U.S. dollar continued to weaken against a number of foreign
currencies, most notably the euro, which remained a source of volatility despite
the brighter economic outlook.
As the fiscal year wrapped up, the Morgan Stanley Capital International World
Index ("MSCI Index") posted a 24.32% gain, while the Morgan Stanley Capital
International Europe, Australia and Far East (EAFE) Index soared 27.57%. Turning
to individual countries, Japan emerged as one of the world's best-performing
industrialized markets as the country's long-moribund economy gained momentum
and reform efforts seemed finally to take root. Germany also registered a
substantial gain, while markets in France and the United Kingdom ("U.K.")
followed with healthy returns of their own. None, however, performed as well as
less-developed markets. In particular, emerging market stocks in Latin America,
Europe and Asia climbed significantly higher. All three popular U.S. equity
market indices finished in positive territory as well.
The Dow Jones Industrial Average ended the period up 19.50% and the broad-based
Standard & Poor's 500 Index climbed 20.79%.More than doubling those returns, the
technology-dominated NASDAQ Composite Index surged 45.31% for the twelve months.
PERFORMANCE
For the year ended October 31, 2003, IDEX Janus Global underperformed its
benchmark, the MSCI Index, which returned 24.32%.
MANAGER'S OVERVIEW
Q. WHICH HOLDINGS HAD THE GREATEST POSITIVE IMPACT ON THE FUND'S PERFORMANCE?
The top performer for the portfolio over the past twelve months was South Korean
maker of semiconductors, LCDs and cellular phones, Samsung Electronics Co., Ltd.
InterActiveCorp, formerly known as USA Interactive, was also a big winner for
the portfolio. InterActiveCorp is a multi-brand interactive commerce company
with interests in well-known names including HSN, formerly Home Shopping
Network, Ticketmaster, and Expedia.com. Also on the positive side were financial
powerhouses Citigroup Inc. and UBS AG, both having rebounded nicely from 2003
lows set late in the first quarter. Lastly, a relatively new addition to the
portfolio, Japanese bank Mitsubishi Tokyo Financial Group, Inc., contributed to
the positive results of the portfolio during this twelve-month period.
Q. WHICH INDIVIDUAL HOLDINGS HAD THE GREATEST NEGATIVE IMPACT ON THE FUND'S
PERFORMANCE?
The largest drag on performance came from Japanese electronics
manufacturer Sony Corporation, which after seeing its stock price suffer a major
setback in April, has struggled back towards, but not yet reached, previous
valuation levels. Also detracting from results were Securitas AB, a Swedish firm
that provides alarm systems, and guarding and cash handling services, as well as
Wolters Kluwer NV, an Amsterdam-based, multimedia provider of content, software,
and services. Dixons Group, a U.K-based, international retailer of consumer
electronics and other products, drove down the returns of the portfolio, as did
U.S. multimedia giant TimeWarner Inc., formerly AOL TimeWarner Inc.
Q. WHICH SECTORS HAD THE GREATEST IMPACT ON THE FUND'S PERFORMANCE?
Our focus remains on finding the best individual stocks and building a portfolio
from the ground up, but sector weights also play a part in impacting
performance. The financial sector was the top performing area for the portfolio
over the past twelve months. Also contributing to the absolute returns of the
portfolio was the information technology sector where we were slightly
overweight the MSCI Index. There were no sectors contributing negative absolute
results to the Fund, but those that made the least impact were consumer staples
and industrials, both of which were somewhat underweight compared to the MSCI
Index.
Q. WHICH COUNTRIES HAD THE GREATEST IMPACT ON THE FUND'S PERFORMANCE?
Detractors from the Fund's performance included Finland and Russia, two regions
in which we had minimal exposure but were overweight versus our benchmark.
Meanwhile our U.S. position, which on average represented 30% of the portfolio's
total assets, was by far our biggest contributor to absolute results. The U.K.
ranked a distant second.
Q. WHAT OTHER INVESTMENT STRATEGIES AFFECTED THE FUND'S PERFORMANCE?
Residual currency hedges that were in place during the fourth quarter of 2002
hurt performance. We have since removed all of the currency hedges.
Q. HOW WILL YOU MANAGE THE FUND IN THE MONTHS AHEAD?
In our opinion, valuations in some areas of the market are beginning to reach
levels that suggest more limited upside potential in the near term. In addition,
we believe that while chasing historical performance is emotionally easily, it
is almost always a recipe for poor returns. Thus, we don't believe, for example,
that moving toward more financially leveraged or smaller companies, just to
chase what has been working, makes sense. More importantly, we think it is vital
for us to remain consistent in my investment approach.
While always retaining some flexibility, our emphasis will remain on finding
great business franchises with strong growth prospects.
Laurence Chang
Fund Manager
Janus Capital Management, LLC
IDEX Janus Global
....SEEKS LONG-TERM GROWTH OF CAPITAL IN A MANNER CONSISTENT WITH PRESERVATION OF
CAPITAL.
AVERAGE ANNUAL TOTAL RETURN FOR PERIODS ENDED 10/31/03
1 YEAR 5 YEARS 10 YEARS FROM INCEPTION INCEPTION DATE
Class A (NAV) 12.33% -0.47% 7.90% 10.65% 10/1/92
Class A (POP) 6.15% -1.59% 7.29% 10.08% 10/1/92
MSCIW(1) 24.32% 0.20% 6.65% 8.08% 10/1/92
Class B (NAV) 11.57% -1.12% - 5.99% 10/1/95
Class B (POP) 6.57% -1.32% - 5.99% 10/1/95
Class C (NAV) 11.57% -9.30% 11/1/99
Class L (NAV) - 12.50% 11/11/02
Class L (POP) - 10.50% 11/11/02
Class M (NAV) 11.72% -1.01% 7.42% 8.12% 10/1/93
Class M (POP) 9.60% -1.21% 7.31% 8.01% 10/1/93
NOTES
(1) The Morgan Stanley Capital InternationalWorld (MSCIW) Index is an unmanaged
index used as a general measure of market performance. Calculations assume
dividends and capital gains are reinvested and do not include any managerial
expenses. From inception calculation is based on life of Class A shares. Source:
Standard & Poor's Micropaltr Micropal, Inc. 2003 - 1-800-596-5323 -
http://www.micropal.com.
The performance data presented represents past performance, future results may
vary. Performance data does not reflect the deduction of taxes that would be
paid on fund distributions or the redemption of fund shares. Investment return
and principal value will fluctuate so that an investor's shares, when redeemed,
may be worth more or less than their original cost. Current performance may be
lower or higher than performance quoted.
Public Offering Price (POP) returns include the reinvestment of dividends and
capital gains and reflect the maximum sales charge of 5.5% for A shares and 1%
for M shares or the maximum applicable contingent deferred sales charge (5% in
the 1st year, decreasing to 0% after 6 years) for Class B, (2% in the 1st year
and 1% in the 2nd year) for Class L shares and 1% (during the 1st 18
months) for Class M shares. Class C shares do not impose a sales charge. Net
Asset Value (NAV) returns include the reinvestment of dividends and capital
gains but do not reflect any sales charges. Class C and M shares are not
available to new investors.
Investments in global securities involve risks relating to political, social and
economic developments abroad, foreign currency contracts for hedging, as well as
risks resulting from the differences between the regulations to which U.S. and
foreign issuer markets are subject.
Periods less than 1 year represent total return and are not annualized.
APPENDIX C
As of February 27, 2004, the following persons owned beneficially or of record
5% or more of the outstanding shares of the Acquired Fund:
% of the Acquired Fund % of the Acquiring Fund
Name and Address Class before Reorganization after Reorganization
---------------- ------ ---------------------- -----------------------
----------------------------------------- ----------- ------------------------------- -------------------------------
----------------------------------------- ----------- ------------------------------- -------------------------------
----------------------------------------- ----------- ------------------------------- -------------------------------
----------------------------------------- ----------- ------------------------------- -------------------------------
45
PART B
IDEX Mutual Funds
Statement of Additional Information
March 10, 2004
Acquisition of the Assets and Liabilities of By and in Exchange for Shares of
IDEX Janus Global (the "Acquired Fund") IDEX Templeton Great Companies Global (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
the Acquired Fund in connection with a proposed transaction whereby all of the
assets and liabilities of the Acquired Fund will be transferred to the
Acquiring Fund in exchange for shares of the Acquiring Fund.
This Statement of Additional Information of the 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 March
1, 2003.
2. The Financial Statements of the Acquired Fund and the Acquiring Fund as
included in the IDEX Annual Report for the year ended October 31, 2003,
Registration No. 033-02659 (Annual Report filed on Form N-CSR on January
8, 2004).
This Statement of Additional Information is not a prospectus. A Proxy
Statement/Prospectus dated March 10, 2004 relating to the reorganization of the
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 Proxy Statement/Prospectus.
46
REORGANIZATION BETWEEN IDEX TEMPLETON GREAT COMPANIES GLOBAL AND IDEX JANUS
GLOBAL
PRO FORMA SCHEDULE OF INVESTMENTS
At October 31, 2003
(all amounts except share amounts in thousands)
(unaudited)
IDEX TEMPLETON
GREAT COMPANIES GLOBAL IDEX JANUS GLOBAL PRO FORMA FUND
----------------------------- --------------------------- ----------------------------
PRINCIPAL VALUE PRINCIPAL VALUE PRINCIPAL VALUE
------------- ------------- ------------ ------------ ------------ ------------
CONVERTIBLE BONDS
FRANCE
AXA - Zero Coupon $ 9 $ 9 $ - $ - $ 9 $ 9
TOTAL CONVERTIBLE BONDS
------------- ------------ ------------
(COST: $ 7) 9 - 9
------------- ------------ ------------
SHARES VALUE SHARES VALUE SHARES VALUE
------------- ------------- ------------ ------------ ------------ ------------
PREFERRED STOCKS
AUSTRALIA
News Corporation Limited (The) - $ - 260,531 $ 1,914 260,531 $ 1,914
BRAZIL
Companhia Vale do Rio Doce - ADR 3,400 137 - - 3,400 137
TOTAL PREFERRED STOCKS
------------- ------------ ------------
(COST: $ 1,778) 137 1,914 2,051
------------- ------------ ------------
COMMON STOCKS
AUSTRALIA
Alumina Limited 25,700 109 - - 25,700 109
Australia and New Zealand Banking Group
Limited 10,100 127 - - 10,100 127
Australia and New Zealand Banking Group
Limited - Rights, Expires 11/24/2003 1,836 6 - - 1,836 6
BHP Billiton Limited - ADR 12,400 204 - - 12,400 204
Mayne Group Limited 39,700 102 - - 39,700 102
News Corporation Limited (The) - - 172,151 1,531 172,151 1,531
Rio Tinto Limited - - 36,746 928 36,746 928
BERMUDA
ACE Limited 3,600 130 - - 3,600 130
XL Capital Ltd. - Class A (b) 2,000 139 - - 2,000 139
Tyco International Ltd. (b) - - 435,840 9,100 435,840 9,100
Willis Group Holdings Limited (b) - - 49,475 1,648 49,475 1,648
BRAZIL
Companhia Vale do Rio Doce - ADR - - 85,095 3,893 85,095 3,893
CANADA
Alcan Inc. 4,400 176 - - 4,400 176
BCE Inc. (b) 6,900 156 - - 6,900 156
Canadian Natural Resources Ltd. - - 44,961 1,911 44,961 1,911
EnCana Corporation (b) - - 88,204 3,031 88,204 3,031
Suncor Energy Inc. - - 46,056 968 46,056 968
DENMARK
ISS A/S 2,500 119 - - 2,500 119
Vestas Wind Systems A/S 4,900 103 - - 4,900 103
FINLAND
Nokia Oyj - - 75,670 1,286 75,670 1,286
Stora Enso Oyj - R Shares 9,210 125 - - 9,210 125
UPM-Kymmene Oyj 10,200 191 - - 10,200 191
The notes to the pro forma financial statements are an integral part of this
report.
47
REORGANIZATION BETWEEN IDEX TEMPLETON GREAT COMPANIES GLOBAL AND IDEX JANUS
GLOBAL
PRO FORMA SCHEDULE OF INVESTMENTS
At October 31, 2003
(all amounts except share amounts in thousands)
(unaudited)
IDEX TEMPLETON
GREAT COMPANIES GLOBAL IDEX JANUS GLOBAL PRO FORMA FUND
----------------------------- ---------------------------- ---------------------------
SHARES VALUE SHARES VALUE SHARES VALUE
------------- ------------- ------------ ------------ ------------ ------------
FRANCE
Accor SA 3,100 $ 122 - $ - 3,100 $ 122
Aventis SA 3,100 164 23,113 1,225 26,213 1,389
AXA - rights 7,700 146 - - 7,700 146
Compagnie Generale des Etablissements
Michelin - Class B 2,400 94 - - 2,400 94
Credit Agricole SA - - 56,324 1,197 56,324 1,197
Credit Agricole SA - Rights, Expires
11/07/2003 (b) - - 56,324 13 56,324 13
LVMH Moet Hennessy Louis Vuitton SA - - 97,979 6,778 97,979 6,778
Sanofi-Synthelabo - - 57,771 3,580 57,771 3,580
Suez SA - ADR (b) 5,300 85 - - 5,300 85
Total Fina Elf SA 800 124 13,535 2,106 14,335 2,230
Valeo SA 2,800 105 - - 2,800 105
GERMANY
Altana AG - - 6,466 408 6,466 408
BASF AG - ADR 3,200 147 - - 3,200 147
Bayer AG - ADR 5,800 139 - - 5,800 139
Deutsche Post AG - Registered Shares 10,600 204 - - 10,600 204
Deutsche Telekom AG (a) (b) - - 154,146 2,430 154,146 2,430
E.ON AG - ADR 3,600 181 - - 3,600 181
SAP AG - - 10,198 1,480 10,198 1,480
SAP AG - ADR 5,600 205 - - 5,600 205
Volkswagen AG - ADR 12,100 122 - - 12,100 122
HONG KONG
Cheung Kong (Holdings) Limited 18,000 150 137,000 1,142 155,000 1,292
China Mobile (Hong Kong) Limited - - 1,895,300 5,382 1,895,300 5,382
CNOOC Limited - - 1,875,875 3,539 1,875,875 3,539
Hutchison Whampoa Limited 13,000 101 278,000 2,157 291,000 2,258
PICC Property and Casualty Company
Limited - H Shares - - 388,000 91 388,000 91
Sun Hung Kai Properties Limited - - 358,000 3,031 358,000 3,031
INDIA
Infosys Technologies Limited - - 34,049 3,562 34,049 3,562
Reliance Industries Limited - GDR -
144A (b) - - 397,897 9,510 397,897 9,510
Satyam Computer Services Limited - ADR
(b) 9,400 170 - - 9,400 170
Tata Iron and Steel Company Limited - - 175,368 1,387 175,368 1,387
ISRAEL
Check Point Software Technologies, Ltd.
(a) 7,900 134 198,435 3,371 206,335 3,505
Teva Pharmaceutical Industries Ltd. -
ADR (b) - - 38,625 2,197 38,625 2,197
ITALY
Banca Intesa SpA - - 331,115 1,117 331,115 1,117
Eni SpA. - ADR (b) 2,800 223 - - 2,800 223
Riunione Adriatica di Sicurta SpA 6,000 94 - - 6,000 94
UniCredito Italiano SpA - - 498,213 2,456 498,213 2,456
JAPAN
Canon Inc. - - 134,000 6,490 134,000 6,490
Canon Inc. - ADR 3,300 162 - - 3,300 162
Chugai Pharmaceutical Co., Ltd. - - 82,900 1,182 82,900 1,182
Denso Corporation 5,800 110 - - 5,800 110
East Japan Railway Company 26 118 - - 26 118
FANUC LTD - - 30,300 1,823 30,300 1,823
Hirose Electric Co., Ltd. - - 11,000 1,353 11,000 1,353
Hitachi, Ltd. 10,000 59 - - 10,000 59
Honda Motor Co., Ltd. - - 53,200 2,102 53,200 2,102
The notes to the pro forma financial statements are an integral part of this
report.
48
REORGANIZATION BETWEEN IDEX TEMPLETON GREAT COMPANIES GLOBAL AND IDEX JANUS
GLOBAL
PRO FORMA SCHEDULE OF INVESTMENTS
At October 31, 2003
(all amounts except share amounts in thousands)
(unaudited)
IDEX TEMPLETON
GREAT COMPANIES GLOBAL IDEX JANUS GLOBAL PRO FORMA FUND
----------------------------- ---------------------------- ---------------------------
SHARES VALUE SHARES VALUE SHARES VALUE
------------- ------------- ------------ ------------ ------------ ------------
Ito-Yokado Co., Ltd. - $ - 49,000 $ 1,802 49,000 $ 1,802
Kao Corporation - - 147,165 3,028 147,165 3,028
Komatsu Ltd. - - 404,000 2,188 404,000 2,188
Matsushita Electric Works, Ltd. - - 110,000 827 110,000 827
Millea Holdings, Inc. - - 154 1,837 154 1,837
Mitsubishi Corporation - - 77,000 800 77,000 800
Mitsubishi Estate Company, Limited - - 120,000 1,151 120,000 1,151
Mitsubishi Tokyo Financial Group, Inc. - - 1,097 7,890 1,097 7,890
NEC Corporation 8,000 71 - - 8,000 71
NEC Electronics Corporation (a) - - 21,000 1,617 21,000 1,617
Nikko Cordial Corporation - - 422,000 2,278 422,000 2,278
Nintendo Co., Ltd. 2,100 162 - - 2,100 162
Nippon Telegraph and Telephone
Corporation 40 179 - - 40 179
Nitto Denko Corporation - - 36,500 1,917 36,500 1,917
Nomura Securities Co., Ltd. (The) 4,000 69 325,000 5,586 329,000 5,655
NTT DoCoMo, Inc. - - 1,189 2,576 1,189 2,576
Omron Corporation - - 89,500 1,964 89,500 1,964
Pioneer Corporation - - 72,500 1,809 72,500 1,809
Rohm Company, Ltd. - - 11,900 1,606 11,900 1,606
Sony Corporation - ADR 4,800 169 - - 4,800 169
Sumitomo Mitsui Financial Group, Inc.
(b) - - 331 1,666 331 1,666
Tokyo Electron Limited - - 23,900 1,715 23,900 1,715
Toyota Motor Corporation - - 69,000 1,966 69,000 1,966
Yasuda Fire & Marine Insurance Company,
Limited (The) 17,000 141 - - 17,000 141
MEXICO
Cemex, SA de CV - ADR 2,300 55 - - 2,300 55
Grupo Televisa SA de CV - ADR - - 117,550 4,555 117,550 4,555
Kimberly-Clark de Mexico, S.A. de C.V.-
A Shares 24,400 59 - - 24,400 59
Telefonos de Mexico SA de CV - ADR 4,900 158 - - 4,900 158
Wal-Mart de Mexico SA de CV - Series V - - 652,100 1,819 652,100 1,819
NETHERLANDS
Akzo Nobel NV - ADR 4,400 139 - - 4,400 139
IHC Caland N.V. 3,000 128 - - 3,000 128
ING Groep NV - - 181,803 3,778 181,803 3,778
ING Groep NV - ADR 7,300 152 - - 7,300 152
Koninklijke Philips Electronics NV 7,000 189 - - 7,000 189
STMicroelectronics NV - - 168,121 4,480 168,121 4,480
NEW ZEALAND
Telecom Corporation of New Zealand
Limited 30,300 90 - - 30,300 90
PORTUGAL
Portugal Telecom, SGPS, SA - Registered
Shares 18,500 156 - - 18,500 156
RUSSIA
Lukoil Oil Company - ADR (a) - - 30,105 2,453 30,105 2,453
Mining and Metallurgical Company
Norilsk Nickel - ADR (b) - - 21,142 1,089 21,142 1,089
YUKOS Oil Company - ADR (b) - - 82,824 3,744 82,824 3,744
SINGAPORE
DBS Group Holdings Ltd. 4,100 135 497,000 4,085 501,100 4,220
SOUTH KOREA
Kookmin Bank - - 49,310 1,801 49,310 1,801
Kookmin Bank - ADR 4,100 151 - - 4,100 151
Korea Electric Power Corporation - ADR
(b) 9,060 98 - - 9,060 98
The notes to the pro forma financial statements are an integral part of this
report.
49
REORGANIZATION BETWEEN IDEX TEMPLETON GREAT COMPANIES GLOBAL AND IDEX JANUS
GLOBAL
PRO FORMA SCHEDULE OF INVESTMENTS
At October 31, 2003
(all amounts except share amounts in thousands)
(unaudited)
IDEX TEMPLETON
GREAT COMPANIES GLOBAL IDEX JANUS GLOBAL PRO FORMA FUND
----------------------------- ---------------------------- ----------------------------
SHARES VALUE SHARES VALUE SHARES VALUE
------------- ------------- ------------ ------------ ------------ ------------
KT Corp. - ADR (b) 7,920 $ 156 - $ - 7,920 $ 156
POSCO - - 16,770 1,956 16,770 1,956
Samsung Electronics Co., Ltd. - - 41,105 16,331 41,105 16,331
Samsung Electronics Co., Ltd. - GDR -
144A (USD) 1,260 252 - - 1,260 252
SK Telecom Co., Ltd. - - 4,850 857 4,850 857
SPAIN
Antena 3 Television, SA (a) 33 1 - - 33 1
Endesa SA 5,800 92 - - 5,800 92
Iberdrola SA 8,900 149 - - 8,900 149
Repsol-YPF, SA 7,200 126 - - 7,200 126
Telefonica SA 9,800 122 - - 9,800 122
SWEDEN
Atlas Copco AB - A Shares 4,600 162 83,821 2,949 88,421 3,111
Electrolux AB - Series B 2,600 53 - - 2,600 53
Nordea AB - FDR 26,900 167 - - 26,900 167
Securitas AB - Class B 9,200 113 - - 9,200 113
Svenska Cellulosa AB - B Shares 3,200 121 - - 3,200 121
Volvo AB - B Shares 4,600 129 - - 4,600 129
SWITZERLAND
Credit Suisse Group - - 198,430 7,000 198,430 7,000
Givaudan SA - Registered Shares - - 3,897 1,759 3,897 1,759
Nestle SA - ADR (b) 3,200 176 - - 3,200 176
Novartis AG - ADR 3,700 142 - - 3,700 142
Roche Holding AG - - 148,588 12,310 148,588 12,310
Serono SA - Class B - - 2,592 1,792 2,592 1,792
Swiss Reinsurance Company - Registered
Shares 2,800 176 - - 2,800 176
UBS AG - Registered Shares 2,100 129 151,269 9,300 153,369 9,429
TAIWAN
China Steel Corporation GDR - 144A - - 110,000 1,774 110,000 1,774
Chughwa Telecom Co., Ltd. - ADR 8,600 133 84,970 1,315 93,570 1,448
United Microelectronics Corporation -
ADR (a) (b) - - 982,890 5,160 982,890 5,160
UNITED KINGDOM
Abbey National PLC 13,700 131 - - 13,700 131
Amdocs Limited (a) - - 95,105 2,041 95,105 2,041
BAE Systems PLC 40,600 126 - - 40,600 126
BP PLC - ADR (b) 4,200 178 - - 4,200 178
Brambles Industries PLC 51,200 155 - - 51,200 155
British Airways PLC (a) 20,100 71 - - 20,100 71
British Sky Broadcasting Group PLC (a) - - 567,979 6,169 567,979 6,169
Cable & Wireless PLC 30,300 70 - - 30,300 70
Cadbury Schweppes PLC 28,800 185 - - 28,800 185
Compass Group PLC - - 596,525 3,439 596,525 3,439
GlaxoSmithKline PLC 5,600 120 - - 5,600 120
HSBC Holdings PLC - - 728,512 10,941 728,512 10,941
HSBC Holdings PLC - ADR (b) 1,900 143 - - 1,900 143
Marks and Spencer Group PLC 21,600 105 - - 21,600 105
National Grid Group PLC (The) 20,500 131 - - 20,500 131
Pearson PLC 11,900 123 - - 11,900 123
Reckitt Benckiser PLC - - 126,881 2,670 126,881 2,670
Rio Tinto PLC - Registered Shares - - 158,241 3,837 158,241 3,837
Rolls-Royce Group PLC 31,500 101 - - 31,500 101
Royal Bank of Scotland Group PLC (The) - - 78,728 2,110 78,728 2,110
Shell Transport & Trading Company PLC 18,800 117 - - 18,800 117
Smiths Group PLC 7,800 93 - - 7,800 93
Standard Chartered PLC 8,800 141 323,979 5,182 332,779 5,323
The notes to the pro forma financial statements are an integral part of this
report.
50
REORGANIZATION BETWEEN IDEX TEMPLETON GREAT COMPANIES GLOBAL AND IDEX JANUS
GLOBAL
PRO FORMA SCHEDULE OF INVESTMENTS
At October 31, 2003
(all amounts except share amounts in thousands)
(unaudited)
IDEX TEMPLETON
GREAT COMPANIES GLOBAL IDEX JANUS GLOBAL PRO FORMA FUND
----------------------------- ---------------------------- --------------------------
SHARES VALUE SHARES VALUE SHARES VALUE
------------- ------------- ------------ ------------ ------------ ------------
Tesco PLC - $ - 567,128 $ 2,274 567,128 $ 2,274
Unilever PLC 18,700 159 - - 18,700 159
WPP Group PLC - - 318,678 3,037 318,678 3,037
UNITED STATES
Abbott Laboratories 33,400 1,424 - - 33,400 1,424
American International Group, Inc. 12,800 779 - - 12,800 779
Amgen Inc. (a) 8,300 513 - - 8,300 513
Analog Devices, Inc. (a) 15,700 696 - - 15,700 696
Anheuser-Busch Companies, Inc. 11,200 552 - - 11,200 552
Anthem, Inc. (a) (b) - - 57,090 3,907 57,090 3,907
Autoliv, Inc. 2,900 96 - - 2,900 96
Avon Products, Inc. 8,900 605 - - 8,900 605
Bank of New York Company, Inc. (The) - - 131,775 4,110 131,775 4,110
Baxter International Inc. - - 103,900 2,762 103,900 2,762
Berkshire Hathaway Inc. - Class B (a) 200 520 - - 200 520
Cendant Corporation (a) - - 158,500 3,238 158,500 3,238
Cintas Corporation (b) 13,900 593 - - 13,900 593
Cisco Systems, Inc. (a) - - 306,915 6,439 306,915 6,439
Citigroup Inc. - - 304,285 14,423 304,285 14,423
Clear Channel Communications, Inc. 17,000 694 60,705 2,478 77,705 3,172
Colgate-Palmolive Company 10,400 553 - - 10,400 553
Dell Computer Corporation (a) 15,600 563 63,965 2,310 79,565 2,873
Disney (Walt) Company (The) - - 78,680 1,781 78,680 1,781
eBay Inc. (a) 9,800 548 18,940 1,060 28,740 1,608
EOG Resources, Inc. - - 42,970 1,811 42,970 1,811
First Data Corporation (b) 13,000 464 - - 13,000 464
General Electric Company 18,100 525 - - 18,100 525
Genzyme Corporation - General Division (a) 11,800 542 - - 11,800 542
Hewlett-Packard Company - - 110,765 2,471 110,765 2,471
Intel Corporation - - 29,835 986 29,835 986
InterActiveCorp (a) (b) - - 92,335 3,390 92,335 3,390
Johnson & Johnson 11,320 570 - - 11,320 570
KLA - Tencor Corporation (a) (b) - - 47,990 2,751 47,990 2,751
Lehman Brothers Holdings Inc. 11,100 799 - - 11,100 799
Liberty Media Corporation - Class A (a) - - 133,089 1,343 133,089 1,343
Lockheed Martin Corporation - - 46,910 2,175 46,910 2,175
Marsh & McLennan Companies, Inc. 15,500 663 6,330 271 21,830 934
Mattel, Inc. 42,300 819 - - 42,300 819
McDonald's Corporation - - 92,135 2,304 92,135 2,304
Medco Health Solutions, Inc. (a) - - 88,850 2,950 88,850 2,950
Medtronic, Inc. - - 135,620 6,180 135,620 6,180
Merrill Lynch & Co., Inc. 14,000 829 69,655 4,124 83,655 4,953
Microsoft Corporation 22,300 583 184,310 4,820 206,610 5,403
Moody's Corporation 10,900 631 - - 10,900 631
Northern Trust Corporation - - 35,585 1,653 35,585 1,653
Northrop Grumman Corporation - - 28,480 2,546 28,480 2,546
Omnicom Group, Inc. (b) 10,500 838 - - 10,500 838
Pfizer Inc. 16,000 506 - - 16,000 506
Procter & Gamble Company (The) 6,200 609 - - 6,200 609
SanDisk Corporation (a) (b) - - 60,980 4,915 60,980 4,915
Starwood Hotels & Resorts Worldwide, Inc. - - 41,110 1,387 41,110 1,387
Texas Instruments Incorporated - - 104,050 3,009 104,050 3,009
Time Warner Inc. (a) (b) - - 729,041 11,147 729,041 11,147
United Technologies Corporation 19,300 1,635 42,915 3,634 62,215 5,269
UnitedHealth Group Incorporated (b) - - 122,595 6,238 122,595 6,238
UTStarcom, Inc. (a) 14,300 450 - - 14,300 450
VERITAS Software Corporation (a) - - 55,800 2,017 55,800 2,017
Walgreen Co. - - 52,295 1,821 52,295 1,821
Xilinx, Inc. (a) - - 55,445 1,758 55,445 1,758
Yahoo! Inc. (a) - - 47,020 2,055 47,020 2,055
TOTAL COMMON STOCKS
------------- ------------ ------------
(COST: $ 385,761) 30,294 391,899 422,193
------------- ------------ ------------
The notes to the pro forma financial statements are an integral part of this
report.
51
REORGANIZATION BETWEEN IDEX TEMPLETON GREAT COMPANIES GLOBAL AND IDEX JANUS
GLOBAL
PRO FORMA SCHEDULE OF INVESTMENTS
At October 31, 2003
(all amounts except share amounts in thousands)
(unaudited)
IDEX TEMPLETON
GREAT COMPANIES GLOBAL IDEX JANUS GLOBAL PRO FORMA FUND
----------------------------- ---------------------------- ----------------------------
PRINCIPAL VALUE PRINCIPAL VALUE AMOUNT VALUE
------------- ------------- ------------ ------------ ------------ ------------
SECURITY LENDING COLLATERAL
DEBT
BANK NOTES
Canadian Imperial Bank of Commerce
1.12%, due 11/04/2003...............$ 156 $ 156 $ 2,712 $ 2,712 $ 2,868 $ 2,868
Fleet National Bank
1.06%, due 01/21/2004............... 218 218 3,796 3,796 4,014 4,014
EURO DOLLAR TERMS
Bank of Montreal
1.03%, due 11/13/2003............... 125 125 2,170 2,170 2,295 2,295
1.04%, due 11/14/2003............... 109 109 1,905 1,905 2,014 2,014
Bank of Nova Scotia (The)
1.06%, due 11/12/2003............... 62 62 1,085 1,085 1,147 1,147
Bank of Scotland
1.04%, due 11/14/2003............... 125 125 2,170 2,170 2,295 2,295
Citigroup, Inc.
1.08%, due 01/05/2004............... 187 187 3,255 3,255 3,442 3,442
Credit Agricole Indosuez
1.08%, due 01/06/2004............... 137 137 2,387 2,387 2,524 2,524
Den Danske Bank
1.04%, due 11/10/2003............... 62 62 1,085 1,085 1,147 1,147
1.08%, due 01/20/2004............... 187 187 3,255 3,255 3,442 3,442
Royal Bank of Canada
1.04%, due 11/24/2003............... 156 156 2,712 2,712 2,868 2,868
1.06%, due 12/08/2003............... 62 62 1,085 1,085 1,147 1,147
Royal Bank of Scotland Group PLC (The)
1.08%, due 01/15/2004............... 187 187 3,255 3,255 3,442 3,442
SouthTrust Bank
1.08%, due 01/16/2004............... 187 187 3,255 3,255 3,442 3,442
Wells Fargo & Company
1.04%, due 11/20/2003............... 187 187 3,255 3,255 3,442 3,442
PROMISSORY NOTES
Goldman Sachs Group, Inc. (The)
1.15%, due 11/03/2003............... 218 218 3,796 3,796 4,014 4,014
REPURCHASE AGREEMENTS (C)
Goldman Sachs Group, Inc. (The)
1.10% Repurchase Agreement
dated 10/31/2003 to be repurchased
at $1,085 on 11/03/2003.............. 62 62 1,085 1,085 1,147 1,147
Merrill Lynch & Co., Inc.
1.10% Repurchase Agreement
dated 10/31/2003 to be repurchased
at $12,476 on 11/03/2003............. 718 718 12,475 12,475 13,193 13,193
IDEX TEMPLETON
GREAT COMPANIES GLOBAL IDEX JANUS GLOBAL PRO FORMA FUND
----------------------------- ---------------------------- ----------------------------
SHARES VALUE SHARES VALUE SHARES VALUE
------------- ------------- ------------ ------------ ------------ ------------
Investment Companies
MONEY MARKET FUNDS
Merrimac Cash Series Fund - Premium
Class 1-day yield of 0.97%........... 436,409 $ 436 7,593,834 $ 7,593 8,030,243 $ 8,029
TOTAL SECURITY LENDING COLLATERAL
------------- ------------ ------------
(cost: $ 65,912) 3,581 62,331 65,912
------------- ------------ ------------
TOTAL INVESTMENT SECURITIES
(COST: $ 453,458) $ 34,021 $ 456,144 $ 490,165
============= ============ ============
The notes to the pro forma financial statements are an integral part of this
report.
52
REORGANIZATION BETWEEN IDEX TEMPLETON GREAT COMPANIES GLOBAL AND IDEX JANUS
GLOBAL
PRO FORMA SCHEDULE OF INVESTMENTS
At October 31, 2003
(all amounts except share amounts in thousands)
(unaudited)
IDEX TEMPLETON
GREAT COMPANIES GLOBAL IDEX JANUS GLOBAL PRO FORMA FUND
----------------------------- --------------------------- --------------------------
SUMMARY:
Investments, at value................... 105.6% $ 34,021 110.6% $ 456,144 110.2% $ 490,165
Liabilities in excess of other assets... -5.6% (1,815) -10.6% (43,603) -10.2% (45,418)
------------- ------------- ------------ ------------ ------------ ------------
Net assets.............................. 100.0% $ 32,206 100.0% $ 412,541 100.0% $ 444,747
============= ============= ============ ============ ============ ============
FORWARD FOREIGN CURRENCY CONTRACTS:
Amount in
U.S. Dollars Net Unrealized
Bought Settlement Bought Appreciation
Currency (Sold) Date (Sold) (Depreciation)
------------------------------------------------------------------------------------------------------
Canadian Dollar 66 11/03/2003 $ 50 $ -
Canadian Dollar (194) 11/03/2003 (148) 1
Canadian Dollar 32 11/04/2003 24 -
Canadian Dollar (197) 11/04/2003 (150) -
Euro Dollar 350 11/03/2003 409 (2)
British Pound 83 11/03/2003 141 -
British Pound (16) 11/03/2003 (27) -
Hong Kong Dollar (1,613) 11/03/2003 (208) -
Hong Kong Dollar 705 11/06/2003 91 -
Indian Rupee 1,125 11/03/2003 25 -
Japanese Yen 22,837 11/04/2003 211 (3)
Japanese Yen 31,508 11/06/2003 286 1
Korean Won (1,630,000) 11/12/2003 (1,334) (44)
Korean Won 1,630,000 11/12/2003 1,351 26
------------- -------------
$ 721 $ (21)
============= =============
NOTES TO SCHEDULE OF INVESTMENTS:
(a) No dividends were paid during the preceding twelve months.
(b) At October 31, 2003, all or a portion of this security is on loan. The
value at October 31, 2003 of all securities on loan is $ 63,546.
(c) Cash collateral for the Repurchase Agreements, valued at $14,627, that
serve as collateral for securities lending are invested in corporate bonds
with interest rates and maturity dates ranging from 0.00% - 10.18% and
06/01/2004 - 12/31/2049, respectively.
DEFINITIONS:
ADR American Depositary Receipt
FDR Finnish Depositary Receipt
GDR Global Depositary Receipt
144A Securities are registered pursuant to Rule 144A of the
Securities Act of 1933. These securities may be resold as
transactions exempt from registration, normally to qualified
institutional buyers.
The notes to the pro forma financial statements are an integral part of this
report.
53
REORGANIZATION BETWEEN IDEX TEMPLETON GREAT COMPANIES GLOBAL AND IDEX JANUS
GLOBAL
PRO FORMA STATEMENT OF ASSETS AND LIABILITIES
At October 31, 2003
(all amounts except per share amounts in thousands)
(unaudited)
IDEX
TEMPLETON IDEX CONSOLIDATED
GREAT COMPANIES JANUS PRO FORMA
GLOBAL GLOBAL ADJUSTMENTS FUND
------------- -------------- ---------------------- ------------------
Assets:
Investment securities, at value
(cost: $453,458) $ 34,021 $ 456,144 $ - $ 490,165
(including $63,546 of securities
loaned) -
Cash 1,717 22,864 - 24,581
Receivables: -
Investment securities sold 40 2,325 - 2,365
Shares of beneficial interest sold 28 39 - 67
Interest - 5 - 5
Dividends 36 457 - 493
Dividend reclaims receivable 1 465 - 466
Due from investment adviser 10 - 10
Unrealized appreciation on forward
foreign currency contracts - 28 - 28
Other 4 126 - 130
----------------------------- ---------------------- ------------------
35,857 482,453 - 518,310
----------------------------- ---------------------- ------------------
Liabilities:
Investment securities purchased - 4,488 - 4,488
Accounts payable and accrued
liabilities: -
Shares of beneficial interest
redeemed 11 1,783 - 1,794
Management and advisory fees - 361 - 361
Distribution fees 13 247 - 260
Transfer agent fees 11 320 - 331
Due to custodian 12 - 12
Payable for securities on loan 3,581 62,331 - 65,912
Unrealized depreciation on forward -
foreign currency contracts - 49 49
Other 23 333 - 356
----------------------------- ---------------------- ------------------
3,651 69,912 - 73,563
----------------------------- ---------------------- ------------------
Net Assets $ 32,206 $ 412,541 $ - $ 444,747
============================= ====================== ==================
Net Assets Consist of:
Shares of beneficial interest,
unlimited shares authorized 32,394 $ 824,018 $ - $ 856,412
Accumulated net investment income
(loss) - (100) - (100)
Accumulated net realized gain (loss)
from investment securities and
foreign currency transactions (1,957) (446,349) - (448,306)
Net unrealized appreciation (depreciation)
on:
Investment securities 1,769 34,916 36,685
Translation of assets and liabilities
denominated in foreign currencies - 56 - 56
----------------------------- ---------------------- ------------------
Net Assets $ 32,206 $ 412,541 $ - $ 444,747
============================= ====================== ==================
Shares Outstanding:
Class A 3,793 8,829 (1,470) (a) 11,152
Class B 575 7,556 (383) (a) 7,748
Class C 192 913 (128) (a) 977
Class L 20 8 (13) (a) 15
Class M 107 2,550 (71) (a) 2,586
Net Asset Value Per Share:
Class A $ 6.90 $ 21.41 $ - $ 21.41
Class B 6.74 20.25 - 20.25
Class C 6.74 20.25 - 20.25
Class L 6.74 20.25 - 20.25
Class M 6.77 20.31 - 20.31
Maximum Offering Price Per Share (1):
Class A $ 7.30 $ 22.66 $ - $ 22.66
Class M 6.84 20.52 - 20.52
(1) Includes the maximum selling commission (represented as a
percentage of offering price) which is reduced on certain levels of
sales as set forth in the Prospectus. Net asset value per share for
Classes B, C, and L shares represents offering price. The
redemption price for Classes B, L, and M shares equals net asset
value less any applicable contingent deferred sales charge.
The notes to the pro forma financial statements are an integral part of this
report.
54
REORGANIZATION BETWEEN IDEX TEMPLETON GREAT COMPANIES GLOBAL AND IDEX JANUS
GLOBAL
PRO FORMA STATEMENT OF OPERATIONS
Twelve-months ended October 31, 2003
(all amounts in thousands)
(unaudited)
IDEX
TEMPLETON IDEX CONSOLIDATED
GREAT COMPANIES JANUS PRO FORMA
GLOBAL GLOBAL ADJUSTMENTS PORTFOLIO
------------------ ------------- ---------------- -----------------
INVESTMENT INCOME:
Interest $ 5 $ 93 $ - $ 98
Dividends 418 8,694 - 9,112
Income from loaned securities--net 3 182 - 185
Less withholding taxes on foreign dividends (31) (764) - (795)
---------------- -------------- ----------------- ------------------
395 8,205 - 8,600
---------------- -------------- ----------------- ------------------
EXPENSES:
Management and advisory fees 204 4,544 (917)(b) 3,831
Transfer agent fees 72 2,217 - 2,289
Printing and shareholder reports 9 373 - 382
Custody fees 13 419 (10)(c) 422
Administration fees 34 37 (33)(d) 38
Legal fees 2 31 - 33
Auditing and accounting fees 20 40 (20)(e) 40
Trustees fees 2 37 - 39
Registration fees 76 79 - 155
Other 2 33 - 35
Distribution and service fees:
Class A 72 704 - 776
Class B 31 1,678 - 1,709
Class C 10 220 - 230
Class L - 3 - 3
Class M 6 568 - 574
---------------- -------------- ----------------- ------------------
Total expenses 553 10,983 (980) 10,556
Less:
Advisory fee waiver (127) - (1,379)(f) (1,506)
---------------- -------------- ----------------- ------------------
Net expenses 426 10,983 (2,359) 9,050
---------------- -------------- ----------------- ------------------
NET INVESTMENT INCOME (LOSS) (31) (2,778) 2,359 (450)
---------------- -------------- ----------------- ------------------
NET REALIZED GAIN (LOSS) FROM:
Investment securities 1,077 (49,641) - (48,564)
Foreign currency transactions (118) (7,838) (7,956)
---------------- -------------- ----------------- ------------------
959 (57,479) - (56,520)
---------------- -------------- ----------------- ------------------
NET INCREASE (DECREASE) IN UNREALIZED
APPRECIATION (DEPRECIATION) ON:
Investment securities 3,785 104,095 107,880
Translation of assets and liabilities
denominated in foreign currencies - 2,357 2,357
---------------- -------------- ----------------- ------------------
3,785 106,452 - 110,237
---------------- -------------- ----------------- ------------------
NET GAIN (LOSS) ON INVESTMENT SECURITIES AND
FOREIGN CURRENCY TRANSACTIONS 4,744 48,973 - 53,717
---------------- -------------- ----------------- ------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS $ 4,713 $ 46,195 $ 2,359 $ 53,267
================ ============== ================= ==================
Amounts shown as " - " represent amounts that are zero or those that round to
less than $1,000.
The notes to the pro forma financial statements are an integral part of this
report.
55
REORGANIZATION BETWEEN IDEX TEMPLETON GREAT COMPANIES GLOBAL AND IDEX JANUS
GLOBAL
PRO FORMA NOTES TO THE FINANCIAL STATEMENTS
At October 31, 2003
(all amounts in thousands)
(unaudited)
NOTE 1 - GENERAL
The accompanying unaudited pro forma financial statements are presented to show
the effect of the proposed transfer of substantially all of the assets of IDEX
Templeton Great Companies Global (the "Fund") to IDEX Janus Global (the
"Acquiring Fund") in exchange for Class A, B, C, L and M shares of the Acquiring
Fund and the assumption by the Acquiring Fund of substantially all of the
liabilities of the Fund as described elsewhere in this proxy
statement/prospectus. After the reorganization, IDEX Janus Global will be
renamed IDEX Templeton Great Companies Global.
The "Pro Forma Fund" as identified in these financial statements represents the
combined fund after the merger, with the Acquiring Fund treated as the
accounting survivor for financial reporting purposes. Management believes the
Acquiring Fund to be the accounting survivor because this fund's investment
objective/style would remain in tact with the combined fund, and the Acquiring
Fund has significantly more assets and a longer performance history then the
Fund.
Under the terms of the Agreement and Plan of Reorganization, the exchange of
assets of the Fund for the Class A, B, C, L and M shares of the Acquiring Fund
will be treated and accounted for as a tax-free reorganization. The acquisition
would be accomplished by an acquisition of the net assets of the Fund in
exchange for the Class A, B, C, L 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 October 31, 2003. The unaudited pro forma
Statement of Operations has been prepared as though the acquisition had been
effective November 1, 2002 to report operations for the twelve months ended
October 31, 2003.
The accompanying pro forma financial statements should be read in conjunction
with the financial statements of the Fund and the Acquiring Fund, which are
included in their respective annual reports dated October 31, 2003.
NOTE 2 - PRO FORMA ADJUSTMENTS
The Pro Forma adjustments below reflect the impact of the merger.
(a) To adjust shares outstanding of the Pro Forma Fund based on combining the
Fund at the Acquiring Fund's net asset value.
(b) To restate advisory fees using the proposed advisory fee rates for the Pro
Forma Fund at the combined average daily net assets of the Fund and
Acquiring Fund.
(c) To remove duplicate Custody fees.
(d) To remove duplicate Administration fees.
(e) To remove duplicate Auditing and accounting fees.
(f) To adjust the Reimbursements by the investment advisor as a result of the
proposed stated annual expense limit of the Pro Forma Fund at the combined
average daily net assets of the Fund and the Acquiring Fund.
No adjustments have been made to investments owned on the Schedules of
Investments as the investments of the Pro Forma Fund are not unsuitable nor
violate the investment objectives of the Acquiring Fund.
56
REORGANIZATION BETWEEN IDEX TEMPLETON GREAT COMPANIES GLOBAL AND IDEX JANUS
GLOBAL
PRO FORMA NOTES TO THE FINANCIAL STATEMENTS
At October 31, 2003
(all amounts in thousands)
(unaudited)
NOTE 3 - INVESTMENT ADVISORY AND OTHER TRANSACTIONS
AEGON/Transamerica Fund Advisers, Inc. ("ATFA") is the investment adviser for
the Acquiring Fund. AEGON/Transamerica Fund Services, Inc. ("ATFS") is the
Acquiring Fund's administrator. AFSG Securities Corporation ("AFSG") is the
Acquiring Fund's distributor/principal underwriter. AEGON/Transamerica Investor
Services, Inc. ("ATIS") is the Acquiring Fund's transfer agent. ATIS and AFSG
are 100% owned by AUSA Holding Company ("AUSA"). ATFA is a directly owned
subsidiary of Western Reserve Life Assurance Co. of Ohio (78%) ("WRL") and AUSA
(22%). ATFS is a wholly owned subsidiary of WRL. WRL and AUSA are wholly owned
indirect subsidiaries of AEGON NV, a Netherlands corporation.
Great Companies, LLC is both an affiliate of the Fund, and will be the
co-subadvisor of the Pro Forma Fund, managing the domestic portion.
The following Schedule reflects the percentage of the Fund's assets owned by
affiliated mutual funds (i.e. through the asset allocation funds):
Net Assets % of Net Assets
---------- ---------------
IDEX Asset Allocation Conservative Portfolio $ 5,165 16%
IDEX Asset Allocation Growth Portfolio 3,154 10%
IDEX Asset Allocation Moderate Growth Portfolio 6,438 20%
IDEX Asset Allocation Moderate Portfolio 4,954 15%
--------------
61%
==============
INVESTMENT ADVISORY FEES
The Acquiring Fund pays management fees to ATFA based on average daily net
assets ("ANA") at the following breakpoints:
1.00% of the first $750 million of ANA
0.90% of the next $250 million of ANA
0.85% of ANA over $1 billion.
If the reorganization is approved, the Acquiring Fund will pay management fees
to ATFA based on ANA at the following breakpoints:
0.80% of the first $500 million of ANA
0.70% of ANA over $500 million.
In addition, if the reorganization is approved, ATFA will voluntarily waive its
advisory fee and will reimburse the Acquiring Fund to the extent that operating
expenses, excluding 12b-1 fees, exceed the following stated annual limit:
1.20% Expense Limit
57
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 Exhibit 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. 54, as filed with the SEC on
December 31, 2003. (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. 54, as filed with the SEC on
December 31, 2003.
(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. 51, as filed with the SEC on December 13,
2002.
(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 September 12,
2002.
(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. 51, as filed with the SEC on
December 13, 2002. (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, 2001.
(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
58
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 incorporated herein by
reference to registrant's Registration Statement filed on Form N-14
(File No. 333-101251) as filed with the SEC on November 15, 2002.
(17) (a) Form of proxy card is filed herewith.
(b) The Registrant's Annual Report, dated October 31, 2003 is
incorporated herein by reference.
(c) Prospectus for IDEX Mutual Funds, dated March 1, 2003 is
incorporated herein by reference.
Item 17. Undertakings
1. The undersigned registrant agrees that prior to any public re-offering 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 re-offering prospectus will contain the information
called for by the applicable registration form for re-offerings 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.
59
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 6th day of February.
IDEX MUTUAL FUNDS
/s/ John K. Carter
---------------------------------------
John K. Carter
Senior Vice President, Secretary and
General Counsel
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
--------- ----- ----
/s/ Brian C. Scott
- ----------------------------------
Brian C. Scott* Trustee, President and Chief Executive Officer February 5, 2004
/s/ Kim D. Day
- ----------------------------------
Kim D. Day* Vice President, Treasurer and Principal Financial Officer February 5, 2004
/s/ Thomas O'Neill
- ----------------------------------
Thomas O'Neill* Trustee February 5, 2004
/s/ Peter R. Brown
- ----------------------------------
Peter R. Brown* Chairman February 5, 2004
/s/ Larry N. Norman
- ----------------------------------
Larry N. Norman* Trustee February 5, 2004
/s/ Daniel Calabria
- ----------------------------------
Daniel Calabria* Trustee February 5, 2004
/s/ Charles C. Harris
- ----------------------------------
Charles C. Harris* Trustee February 5, 2004
/s/ William W. Short, Jr.
- ----------------------------------
William W. Short, Jr.* Vice Chairman February 5, 2004
/s/ Jack E. Zimmerman
- ----------------------------------
Jack E. Zimmerman* Trustee February 5, 2004
/s/ Leo J. Hill
- ----------------------------------
Leo J. Hill* Trustee February 5, 2004
/s/ Janice B. Case
- ----------------------------------
Janice B. Case* Trustee February 5, 2004
/s/ Russell A. Kimball, Jr.
- ----------------------------------
Russell A. Kimball, Jr.* Trustee February 5, 2004
/s/ John K. Carter
- ----------------------------------
* Signed by John K. Carter, as Attorney in-Fact
60
Exhibit Index
16.(11) Opinion and Consent of Counsel
16.(14) Consent of Independent Certified Public Accountants
16.(17) Form of Proxy Card
61