UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-04556
----------------------------------------------
IDEX Mutual Funds
------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
570 Carillon Parkway, St. Petersburg, Florida 33716
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(Address of principal executive offices) (Zip code)
John K. Carter, Esq., P.O. Box 5068, Clearwater, Florida 33758-5068
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(Name and address of agent for service)
Registrant's telephone number, including area code: (727) 299-1800
------------------
Date of fiscal year end: 10/31/03
-----------------
Date of reporting period: 11/01/02 - 10/31/03
----------------------------
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1 (REPORT TO SHAREHOLDERS): The Annual Report is attached.
[LOGO]
Annual Report
October 31, 2003
www.idexfunds.com
Customer Service 1-888-233-IDEX (4339)
P.O. Box 9015 o Clearwater, FL o 33758-9015
Distributor: AFSG Securities Corporation
Dear Shareholder,
After an extended bear market, the market rallies seen this past year have been
most welcome. In general, investors should expect both bear and bull markets
over any extended time period. A sound financial plan will take into account
the market's natural fluctuations by using an asset allocation that is
appropriate for your personal situation, including your age and tolerance for
market volatility.
A financial advisor can help you build a comprehensive picture of your current
and future financial needs. What's more, financial advisors are familiar with
the market's history, including long-term returns and volatility of various
asset classes. With your financial advisor, you can develop an investment
program that incorporates factors such as your goals, your investment timeline,
and your risk tolerance.
The Securities and Exchange Commission requires that an annual report be sent
to all shareholders. The following pages provide a comprehensive review of the
investments of each fund as well as the detailed performance and accounting
data. The report also provides a discussion of the accounting policies for the
funds in addition to any matters presented to the shareholders that may have
required their vote.
Please contact your financial advisor if you have any questions about the
contents of this report.
On behalf of IDEX Mutual Funds, I would like to thank you for your continued
support and confidence in our products. We look forward to continuing to serve
your investment needs in 2004.
Sincerely,
Brian C. Scott
President
IDEX Mutual Funds
The views expressed in this report reflect those of the portfolio managers only
and may not necessarily represent the views of IDEX Mutual Funds. These views
are subject to change based upon market conditions. These views should not be
relied on as investment advice and are not indicative of a trading intent on
behalf of the IDEX Mutual Funds.
IDEX Alger Aggressive Growth
- --------------------------------------------------------------------------------
MARKET ENVIRONMENT
The fiscal year ended October 31, 2003 was an exceptionally strong period for
equity securities. At the start of the period, the market moved higher on solid
earnings and a larger-than-expected interest rate cut on November 6, 2002. The
positive momentum came to a sudden end during the final month of 2002 with
escalating tensions in Iraq and North Korea, continued political turmoil in
Venezuela, a weak holiday shopping season and the highest unemployment rate in
eight years. Nevertheless, investors seemed to be cautiously optimistic that
2003 would bring an ultimate end to three straight years of market declines.
The negative momentum continued into the first quarter of 2003, as fear about a
war with Iraq began to trump economic fundamentals. With the outbreak of war in
March, markets reversed course and recouped some of the losses experienced in
January and February. Preferring war to the pre-combat uncertainty, investors
pushed most indices higher during the final month of the quarter with mid and
large-cap growth stocks leading the upturn.
The second quarter of 2003 sustained the positive momentum, with most equity
indices moving substantially higher during the three-month period. Reassured by
the swift allied victory in Iraq and better-than expected first quarter
profits, investors found good reason to get back into the market. Stocks of all
market capitalizations and styles surged higher during the first month of the
quarter. The positive trend continued into May with most equity indices moving
higher during the one-month period. Investors pushed stocks slightly higher
during the final month of the quarter.
Equity prices continued to rise throughout the third quarter of 2003, with
small cap growth stocks leading the advance. Encouraged by upbeat earnings news
from technology giants such as Microsoft Corporation and Telefonaktiebolaget LM
Ericsson, investors pushed most indices higher into July and August. However,
stocks were dragged down during the final month of the quarter due to news in
the labor markets and the Organization of Petroleum Exporting Countries' (OPEC)
surprise decision to cut oil output. Positive momentum returned to the market
in October following an upbeat outlook from the Federal Reserve Board and news
of the fastest Growth Domestic Product growth in almost twenty years.
PERFORMANCE
For the year ended October 31, 2003, IDEX Alger Aggressive Growth returned
23.25%. By comparison its benchmark, the Standard and Poor's 500 Composite
Stock Index returned 20.79%.
STRATEGY REVIEW
IDEX Alger Aggressive Growth benefited from solid security selection in the
health care sector, an overweighting in the strong information technology
sector and an underweighting in the relatively weak consumer staples sector. As
of October 31, 2003, the portfolio held 63 stocks and had a cash position of
1.99%. Computers & data processing services, pharmaceuticals and electronic
components & accessories represented the top three industries. The portfolio
remains well diversified, with Yahoo! Inc., Genentech, Inc., eBay Inc.,
PeopleSoft, Inc. and Boston Scientific Corporation representing the top five
holdings.
/s/ Frederick M. Alger
Frederick M. Alger
/s/ David Hyun
David Hyun
Co-Fund Managers
Fred Alger Management, Inc.
IDEX Mutual Funds Annual Report 2003
IDEX Alger Aggressive Growth 1
IDEX Alger Aggressive Growth
- --------------------------------------------------------------------------------
Comparison of change in value of $10,000 investment in Class A shares and its
comparative index.
Growth of $10,000
Inception of 12/2/94 through 10/31/03
Investment less sales charges - $9,452
[The following table was depicted as a mountain chart in the printed material.]
DATE Class A S&P 500
- ------------------ ---------------- ------------
12/2/1994 9,452 10,000
12/31/1994 9,854 10,148
3/31/1995 11,444 11,135
6/30/1995 14,059 12,197
9/30/1995 16,716 13,165
12/31/1995 15,274 13,957
3/31/1996 15,631 14,706
6/30/1996 15,737 15,365
9/30/1996 15,899 15,840
12/31/1996 16,189 17,160
3/31/1997 15,882 17,621
6/30/1997 18,578 20,694
9/30/1997 20,787 22,244
12/31/1997 19,957 22,882
3/31/1998 23,055 26,072
6/30/1998 25,448 26,933
9/30/1998 23,039 24,259
12/31/1998 29,719 29,421
3/31/1999 33,833 30,887
6/30/1999 35,179 33,063
9/30/1999 35,058 31,001
12/31/1999 50,265 35,612
3/31/2000 55,663 36,427
6/30/2000 45,754 35,462
9/30/2000 44,043 35,118
12/31/2000 33,937 32,372
3/31/2001 27,465 28,537
6/30/2001 29,956 30,206
9/30/2001 24,689 25,774
12/31/2001 27,991 28,528
3/31/2002 26,582 28,606
6/30/2002 22,116 24,776
9/30/2002 18,581 20,498
12/31/2002 18,052 22,225
3/31/2003 18,644 21,524
6/30/2003 21,739 24,837
9/30/2003 22,078 25,494
10/31/2003 23,676 26,936
Average Annual Total Return for Periods Ended 10/31/03
- --------------------------------------------------------------------------------
From Inception
1 year 5 years Inception Date
- ----------------------------------------------------------------------
Class A (NAV) 23.25% -0.45% 10.85% 12/2/94
Class A (POP) 16.47% -1.57% 10.15% 12/2/94
S&P 500(1) 20.79% 0.53% 11.75% 12/2/94
- ----------------------------------------------------------------------
Class B (NAV) 22.48% -1.14% 3.81% 10/1/95
Class B (POP) 17.48% -1.34% 3.81% 10/1/95
- ----------------------------------------------------------------------
Class C (NAV) 22.48% - -11.64% 11/1/99
- ----------------------------------------------------------------------
Class L (NAV) - - 25.49% 11/11/02
Class L (POP) - - 23.49% 11/11/02
- ----------------------------------------------------------------------
Class M (NAV) 22.60% -1.04% 10.34% 12/2/94
Class M (POP) 20.37% -1.24% 10.22% 12/2/94
- ----------------------------------------------------------------------
NOTES
(1) The Standard & Poor's 500 Composite Stock (S&P 500) 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 Micropal(R)(C) 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 shares, (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.
Periods less than 1 year represent total return and are not annualized.
This material must be preceded or accompanied by a current prospectus, which
includes specific contents regarding the investment objectives and policies of
this fund.
IDEX Mutual Funds Annual Report 2003
IDEX Alger Aggressive Growth 2
IDEX Alger Aggressive Growth
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
At October 31, 2003
(all amounts except share amounts in thousands)
Shares Value
- ----------------------------------------------------------------------------------------
COMMON STOCKS (99.6%)
Amusement & Recreation Services (2.2%)
Disney (Walt) Company (The) 130,500 $ 2,954
Apparel & Accessory Stores (3.1%)
Gap, Inc. (The) 107,900 2,059
Pacific Sunwear of California, Inc. (a) 89,050 2,056
Automotive (1.2%)
General Motors Corporation-Class H (a) 96,200 1,581
Business Services (4.0%)
eBay Inc. (a)(b) 74,750 4,182
Monster Worldwide, Inc. (a)(b) 44,600 1,136
Commercial Banks (5.1%)
Bank of New York Company, Inc. (The) 65,000 2,027
Citigroup Inc. 72,400 3,432
U.S. Bancorp 49,000 1,334
Communication (0.6%)
SpectraSite, Inc. (a) 19,000 736
Communications Equipment (7.8%)
Advanced Fibre Communications, Inc. (a) 144,900 3,488
Ciena Corporation (a) 323,400 2,073
Comverse Technology, Inc. (a)(b) 116,400 2,100
Corning Incorporated (a) 244,400 2,684
Computer & Data Processing Services (15.5%)
BEA Systems, Inc. (a)(b) 104,400 1,451
Electronic Arts Inc. (a) 13,300 1,317
Microsoft Corporation 150,300 3,930
Oracle Corporation (a) 112,800 1,349
PeopleSoft, Inc. (a) 193,700 4,021
United Online, Inc. (a) 64,500 1,857
VERITAS Software Corporation (a) 36,600 1,323
Yahoo! Inc. (a) 122,500 5,353
Computer & Office Equipment (4.2%)
Cisco Systems, Inc. (a) 129,500 2,717
EMC Corporation (a) 148,800 2,059
SanDisk Corporation (a) 9,700 782
Drug Stores & Proprietary Stores (1.0%)
Medco Health Solutions, Inc. (a) 40,200 1,335
Educational Services (0.8%)
Apollo Group, Inc.-Class A (a) 16,200 1,029
Electronic & Other Electric Equipment (2.0%)
General Electric Company 91,600 2,657
Electronic Components & Accessories (11.6%)
Broadcom Corporation-Class A (a)(b) 123,700 3,952
Intel Corporation 68,700 2,271
Intersil Corporation-Class A 78,600 2,027
Micron Technology, Inc. (a)(b) 190,600 2,733
National Semiconductor Corporation (a) 50,200 2,040
Texas Instruments Incorporated 81,400 2,354
Health Services (2.0%)
Health Management Associates, Inc.-Class A 62,200 $ 1,378
Quest Diagnostics Incorporated (a) 19,750 1,336
Industrial Machinery & Equipment (2.8%)
Applied Materials, Inc. (a) 59,200 1,384
Kulicke and Soffa Industries, Inc. (a) 63,000 925
Novellus Systems, Inc. (a) 33,000 1,363
Insurance (1.5%)
American International Group, Inc. 32,450 1,974
Lumber & Other Building Materials (2.5%)
Home Depot, Inc. (The) 91,000 3,373
Management Services (1.1%)
Paychex, Inc. 35,800 1,393
Manufacturing Industries (1.2%)
International Game Technology 49,600 1,624
Medical Instruments & Supplies (6.1%)
Boston Scientific Corporation (a) 59,200 4,009
Medtronic, Inc. 44,500 2,028
Varian Medical Systems, Inc. (a) 11,000 703
Zimmer Holdings, Inc. (a)(b) 21,400 1,366
Motion Pictures (2.6%)
Time Warner Inc. (a) 224,300 3,430
Oil & Gas Extraction (1.1%)
Halliburton Company 60,300 1,440
Personal Credit Institutions (1.7%)
Capital One Financial Corporation (b) 37,400 2,274
Pharmaceuticals (13.8%)
Allergan, Inc. 24,600 1,860
Amgen Inc. (a) 26,200 1,618
Genentech, Inc. (a) 53,000 4,344
Gilead Sciences, Inc. (a)(b) 22,740 1,241
Invitrogen Corporation (a) 11,200 712
Millennium Pharmaceuticals, Inc. (a) 79,000 1,258
Mylan Laboratories Inc. 83,550 2,018
Pfizer Inc. 61,100 1,931
QLT Inc. (a)(b) 66,300 1,024
Teva Pharmaceutical Industries Ltd.-ADR (b) 37,400 2,128
Radio, Television & Computer Stores (0.8%)
Circuit City Stores, Inc.-Circuit City
Group 117,700 1,123
Telecommunications (1.7%)
Nextel Communications, Inc.-Class A (a) 94,100 2,277
Transportation & Public Utilities (1.6%)
InterActiveCorp (a)(b) 56,100 2,059
---------
Total Common Stocks (cost: $114,859)
131,992
---------
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Alger Aggressive Growth 3
IDEX Alger Aggressive Growth
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Principal Value
- --------------------------------------------------------------------------------
SECURITY LENDING COLLATERAL (11.8%)
Bank Notes (1.2%)
Canadian Imperial Bank of Commerce
1.12%, due 11/04/2003 $ 683 $ 683
Fleet National Bank
1.06%, due 01/21/2004 956 956
Euro Dollar Term (5.9%)
Bank of Montreal
1.03%, due 11/13/2003 546 546
1.04%, due 11/14/2003 480 480
Bank of Nova Scotia (The)
1.06%, due 11/12/2003 273 273
Bank of Scotland
1.04%, due 11/14/2003 546 546
Citigroup Inc.
1.08%, due 01/05/2004 819 819
Credit Agricole Indosuez
1.08%, due 01/06/2004 601 601
Den Danske Bank
1.04%, due 11/10/2003 273 273
1.08%, due 01/20/2004 819 819
Royal Bank of Canada
1.04%, due 11/24/2003 683 683
1.06%, due 12/08/2003 273 273
Royal Bank of Scotland Group PLC (The)
1.08%, due 01/15/2004 819 819
SouthTrust Bank
1.08%, due 01/16/2004 819 819
Wells Fargo & Company
1.04%, due 11/20/2003 819 819
Promissory Notes (0.7%)
Goldman Sachs Group, Inc. (The)
1.15%, due 11/03/2003 $ 956 $ 956
Repurchase Agreements (2.6%) (c)
Goldman Sachs Group, Inc. (The)
1.10% Repurchase Agreement dated
10/31/2003 to be repurchased at $273
on 11/03/2003 273 273
Merrill Lynch & Co., Inc.
1.10% Repurchase Agreement dated
10/31/2003 to be repurchased at $3,142
on 11/03/2003 3,142 3,142
Shares Value
- --------------------------------------------------------------------------------
Investment Companies (1.4%)
Money Market Funds (1.4%)
Merrimac Cash Series Fund-
Premium Class
1-day yield of 0.97% 1,911,766 $ 1,912
---------
Total Security Lending Collateral (cost: $15,692) 15,692
---------
Total Investment Securities (cost: $130,551) $ 147,684
=========
SUMMARY:
Investments, at value 111.4 % $ 147,684
Liabilities in excess of other assets (11.4)% (15,072)
--------- ---------
Net assets 100.0 % $ 132,612
========= =========
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 (see Note
1). The value at October 31, 2003, of all securities on loan is $15,249.
(c) Cash collateral for the Repurchase Agreements, valued at $3,482, 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
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Alger Aggressive Growth 4
IDEX Alger Aggressive Growth
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
At October 31, 2003
(all amounts except per share amounts in thousands)
Assets:
Investment securities, at value (cost: $130,551)
(including $15,249 of securities loaned) $147,684
Cash 2,634
Receivables:
Investment securities sold 5,863
Shares of beneficial interest sold 62
Interest 1
Dividends 90
Dividend reclaims receivable 1
Due from investment adviser 8
Other 38
--------
156,381
--------
Liabilities:
Investment securities purchased 7,536
Accounts payable and accrued liabilities:
Shares of beneficial interest redeemed 220
Distribution fees 75
Transfer agent fees 140
Payable for securities on loan 15,692
Other 106
--------
23,769
--------
Net Assets $132,612
========
Net Assets Consist of:
Shares of beneficial interest, unlimited shares authorized $250,745
Accumulated net investment income (loss) (17)
Accumulated net realized gain (loss) from investment
securities (135,244)
Net unrealized appreciation (depreciation) on investment
securities 17,128
--------
Net Assets $132,612
========
Shares Outstanding:
Class A 3,496
Class B 2,732
Class C 403
Class L 46
Class M 554
Net Asset Value Per Share:
Class A $ 18.82
Class B 17.87
Class C 17.87
Class L 17.87
Class M 18.01
Maximum Offering Price Per Share (a):
Class A $ 19.92
Class M 18.19
(a) 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.
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the year ended October 31, 2003
(all amounts in thousands)
Investment Income:
Interest $ 20
Dividends 701
Income from loaned securities-net 14
Less withholding taxes on foreign dividends (3)
--------
732
--------
Expenses:
Management and advisory fees 959
Transfer agent fees 1,191
Printing and shareholder reports 164
Custody fees 27
Administration fees 31
Legal fees 8
Auditing and accounting fees 23
Trustees fees 10
Registration fees 78
Other 10
Distribution and service fees:
Class A 208
Class B 442
Class C 67
Class L 2
Class M 83
--------
Total expenses 3,303
Less:
Advisory fee waiver and expense reimbursements (1,066)
--------
Net expenses 2,237
--------
Net Investment Income (Loss) (1,505)
--------
Net Realized and Unrealized Gain (Loss):
Realized gain (loss) from investment securities 4,926
Increase (decrease) in unrealized appreciation
(depreciation) on investment securities 21,278
--------
Net Gain (Loss) on Investment Securities 26,204
--------
Net Increase (Decrease) in Net Assets Resulting
from Operations $ 24,699
========
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Alger Aggressive Growth 5
IDEX Alger Aggressive Growth
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended
(all amounts in thousands)
October 31, October 31,
2003 2002
--------- ---------
Increase (Decrease) In Net Assets From:
Operations:
Net investment income (loss) $ (1,505) $ (2,468)
Net realized gain (loss) from investment
securities 4,926 (48,994)
Net unrealized appreciation
(depreciation) on investment
securities 21,278 8,004
--------- ---------
24,699 (43,458)
--------- ---------
Distributions to Shareholders:
From net investment income:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
-------- ---------
- -
-------- ---------
From net realized gains:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
-------- ---------
- -
-------- ---------
Capital Share Transactions:
Proceeds from shares sold:
Class A 50,196 293,385
Class B 5,089 7,548
Class C 956 2,935
Class L 792 -
Class M 688 1,339
-------- ---------
57,721 305,207
-------- ---------
Dividends and distributions reinvested:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
-------- ---------
- -
-------- ---------
Cost of shares redeemed:
Class A (56,280) (318,028)
Class B (9,676) (18,403)
Class C (2,128) (3,913)
Class L (40) -
Class M (2,453) (5,821)
-------- ---------
(70,577) (346,165)
-------- ---------
(12,856) (40,958)
-------- ---------
Net increase (decrease) in net assets 11,843 (84,416)
-------- ---------
Net Assets:
Beginning of year 120,769 205,185
-------- ---------
End of year $ 132,612 $ 120,769
========= =========
Accumulated Net Investment Income (Loss) $ (17) $ (17)
========= =========
Share Activity:
Shares issued:
Class A 3,287 15,257
Class B 326 402
Class C 63 156
Class L 48 -
Class M 43 69
-------- ---------
3,767 15,884
-------- ---------
Shares issued-reinvested from distributions:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
-------- ---------
- -
-------- ---------
Shares redeemed:
Class A (3,679) (16,547)
Class B (640) (1,043)
Class C (142) (215)
Class L (2) -
Class M (163) (321)
-------- ---------
(4,626) (18,126)
-------- ---------
Net increase (decrease) in shares
outstanding (859) (2,242)
========= =========
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Alger Aggressive Growth 6
IDEX Alger Aggressive Growth
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share of beneficial interest outstanding throughout each period
------------------------------------------------------------------------------------------------------------
Investment Operations Distributions
--------------------------------------------- ---------------------------------------
Net Asset Net Asset
For the Value, Net Net Realized From Net From Net Value,
Period Beginning Investment and Unrealized Total Investment Realized Total End
Ended (d)(g) of Period Income (Loss) Gain (Loss) Operations Income Gains Distributions of Period
- -----------------------------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 $ 15.27 $ (0.15) $ 3.70 $ 3.55 $ - $ - $ - $ 18.82
10/31/2002 20.21 (0.20) (4.74) (4.94) - - - 15.27
10/31/2001 32.07 (0.13) (11.09) (11.22) - (0.64) (0.64) 20.21
10/31/2000 33.05 (0.13) 2.15 2.02 - (3.00) (3.00) 32.07
10/31/1999 22.24 0.17 11.82 11.99 - (1.18) (1.18) 33.05
- -----------------------------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 14.59 (0.25) 3.53 3.28 - - - 17.87
10/31/2002 19.48 (0.32) (4.57) (4.89) - - - 14.59
10/31/2001 31.23 (0.29) (10.82) (11.11) - (0.64) (0.64) 19.48
10/31/2000 32.44 (0.36) 2.15 1.79 - (3.00) (3.00) 31.23
10/31/1999 21.93 (0.13) 11.82 11.69 - (1.18) (1.18) 32.44
- -----------------------------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 14.59 (0.24) 3.52 3.28 - - - 17.87
10/31/2002 19.48 (0.32) (4.57) (4.89) - - - 14.59
10/31/2001 31.23 (0.31) (10.80) (11.11) - (0.64) (0.64) 19.48
10/31/2000 32.44 (0.36) 2.15 1.79 - (3.00) (3.00) 31.23
- -----------------------------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 14.24 (0.26) 3.89 3.63 - - - 17.87
- -----------------------------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 14.69 (0.23) 3.55 3.32 - - - 18.01
10/31/2002 19.59 (0.30) (4.60) (4.90) - - - 14.69
10/31/2001 31.36 (0.27) (10.86) (11.13) - (0.64) (0.64) 19.59
10/31/2000 32.53 (0.32) 2.15 1.83 - (3.00) (3.00) 31.36
10/31/1999 21.98 (0.09) 11.82 11.73 - (1.18) (1.18) 32.53
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
-----------------------------------------------------------------------
Ratio of Expenses
Net Assets, to Average Net Investment
For the End of Net Assets (a) Income (Loss) Portfolio
Period Total Period ----------------------- to Average Turnover
Ended (g) Return (c) (000's) Net (e) Total (f) Net Assets (a) Rate (b)
- ---------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 23.25% $ 65,778 1.55% 2.43% (0.94)% 187%
10/31/2002 (24.44) 59,396 1.55 2.26 (1.05) 174
10/31/2001 (35.56) 104,660 1.55 1.88 (0.56) 105
10/31/2000 4.81 164,730 1.55 1.77 (0.94) 108
10/31/1999 55.49 100,078 1.61 1.90 (1.15) 96
- ---------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 22.48 48,825 2.20 3.08 (1.59) 187
10/31/2002 (25.11) 44,439 2.20 2.91 (1.70) 174
10/31/2001 (36.17) 71,834 2.20 2.53 (1.21) 105
10/31/2000 4.13 115,689 2.20 2.42 (1.59) 108
10/31/1999 54.88 47,399 2.26 2.55 (1.80) 96
- ---------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 22.48 7,209 2.20 3.08 (1.59) 187
10/31/2002 (25.11) 7,028 2.20 2.91 (1.70) 174
10/31/2001 (36.17) 10,545 2.20 2.53 (1.21) 105
10/31/2000 4.13 16,586 2.20 2.42 (1.59) 108
- ---------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 25.49 814 2.20 3.09 (1.59) 187
- ---------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 22.60 9,986 2.10 2.98 (1.49) 187
10/31/2002 (25.02) 9,906 2.10 2.81 (1.60) 174
10/31/2001 (36.08) 18,146 2.10 2.43 (1.11) 105
10/31/2000 4.24 33,223 2.10 2.32 (1.49) 108
10/31/1999 54.97 18,538 2.16 2.45 (1.70) 96
- ---------------------------------------------------------------------------------------------------------------
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Alger Aggressive Growth 7
IDEX Alger Aggressive Growth
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (continued)
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 are not annualized.
(d) Per share information is calculated based on average number of shares
outstanding for the periods ended 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 (see note 2).
(f) Ratio of Total Expenses to Average Net Assets includes all expenses before
fee waivers and reimbursements by the investment adviser.
(g) IDEX Alger Aggressive Growth ("the Fund") commenced operations on December
2, 1994. The inception date for the Fund's offering of share classes C and L
are as follows:
Class C - November 1, 1999
Class L - November 11, 2002
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Alger Aggressive Growth 8
IDEX Alger Aggressive Growth
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
At October 31, 2003
(all amounts in thousands)
NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
IDEX Mutual Funds is a Massachusetts business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company. IDEX Alger Aggressive Growth ("the Fund"), part
of IDEX Mutual Funds, began operations on December 2, 1994.
In the normal course of business, the Fund enters into contracts that contain a
variety of representations and warranties which provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown, as this would involve future claims that may be made against the Fund
and/or its affiliates that have not yet occurred. However, based on experience,
the Fund expects the risk of loss to be remote.
See the Prospectus and Statement of Additional Information for a description of
the Fund's investment objective.
In preparing the Fund's financial statements in accordance with accounting
principles generally accepted in the United States of America ("GAAP"),
estimates or assumptions (which could differ from actual results) may be used
that affect reported amounts and disclosures. The following policies were
consistently followed by the Fund, in accordance with GAAP.
Multiple class operations and expenses: The Fund currently offers five classes
of shares, each with a public offering price that reflects different sales
charges, if any, and expense levels. Effective November 11, 2002, Class C and M
shares were closed to new investors. Income, non-class specific expenses and
realized and unrealized gains and losses, are allocated daily to each class,
based upon the value of shares outstanding method as permitted under Rule 18f-3
of the 1940 Act. Each class bears its own specific expenses as well as a
portion of general, common expenses.
Security valuations: Fund investments traded on an exchange are valued at the
closing price on the day of valuation on the exchange where the security is
principally traded. With respect to securities traded on the NASDAQ INMS, such
closing price may be the last reported sales price or the NASDAQ Official
Closing Price.
Securities traded in the over-the-counter market and listed securities for
which no sale was reported on that date are valued at the last quoted bid
price.
Debt securities are valued by independent pricing services; however, those that
mature in sixty days or less are valued at amortized cost, which approximates
market.
Other securities for which quotations are not readily available are valued at
fair value determined in good faith, in accordance with procedures established
by and, under the supervision of the Board of Trustees and the Fund's Valuation
Committee.
Cash: The Fund may leave cash overnight in its cash account with the custodian,
Investors Bank & Trust Company ("IBT"). IBT has been contracted on behalf of
the Fund to invest the excess cash into a savings account, which at October 31,
2003, was paying an interest rate of 0.75%.
Directed brokerage: The sub-adviser, to the extent consistent with the best
execution and usual commission rate policies and practices, may place security
transactions of the Fund with broker/dealers with which IDEX Mutual Funds has
established a Directed Brokerage Program. A Directed Brokerage Program is any
arrangement under which a broker/dealer applies a portion of the commissions
received by such broker/dealer on the security transactions to the Fund. In no
event will commissions paid by the Fund be used to pay expenses that would
otherwise be borne by any other funds within IDEX Mutual Funds, or by any other
party. Directed commissions during the year ended October 31, 2003, of $276 are
included in net realized gains in the Statement of Operations.
Securities lending: The Fund may lend securities to enhance fund earnings from
investing cash collateral received in making such loans to qualified borrowers
(typically broker/dealers). The Fund has engaged its custodian bank, IBT, as a
lending agent to administer its securities lending program. IBT earned $4 of
program net income for its services. When the Fund makes a security loan, it
receives cash collateral as protection against the risk that the borrower will
default on the loan, and records an asset for the cash invested collateral and
a liability for the return of the collateral.
Securities on loan are included in Investment securities at value on the
Statement of Assets and Liabilities and remain on the Schedule of Investments.
Loans of securities are required to be secured by collateral at least equal to
102% of the value of the securities at inception of the loan, and not less then
100% thereafter. The Fund may invest cash collateral in short-term money market
instruments including: U.S. Treasury Bills, U.S. agency obligations, commercial
paper, money market mutual funds, repurchase agreements and other highly rated,
liquid investments. During the life of securities loans, the collateral and
securities loaned remain subject to fluctuation in value. IBT marks to market
securities loaned and the collateral each business day. If additional
collateral is due (at least $1), IBT collects additional cash collateral from
the borrowers. Although securities loaned will be fully collateralized at all
times, IBT may experience delays in, or may be prevented from, recovering the
collateral on behalf of the Fund. The Fund may recall a loaned security
position at any time from the borrower through IBT. In the event the borrower
fails to timely return a recalled security, IBT may indemnify the Fund by
purchasing replacement securities for the Fund at its own expense and claiming
the collateral to fund such a purchase. IBT absorbs the loss if the collateral
value is not sufficient to cover the cost of the replacement securities. If
replacement securities are not available, IBT will credit the equivalent cash
value to the Fund.
IDEX Mutual Funds Annual Report 2003
IDEX Alger Aggressive Growth 9
IDEX Alger Aggressive Growth
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 1-(continued)
Income from securities lending is included in the Statement of Operations. The
amount of collateral and value of securities on loan are included in the
Statement of Assets and Liabilities as well as on the Schedule of Investments.
Security transactions and investment income: Security transactions are recorded
on the trade date. Security gains and losses are calculated on the specific
identification basis. Dividend income is recorded on the ex-dividend date or,
in the case of foreign securities, as soon as the Fund is informed of the
ex-dividend date. Interest income, including accretion of discounts and
amortization of premiums, is recorded on the accrual basis commencing on the
settlement date.
Dividend distributions: Distributions to shareholders are recorded on the
ex-dividend date and are determined in accordance with Federal income tax
regulations which may differ from GAAP.
NOTE 2. RELATED PARTY TRANSACTIONS
AEGON/Transamerica Fund Advisers, Inc. ("ATFA") is the Fund's investment
adviser. AEGON/Transamerica Fund Services, Inc. ("ATFS") is the Fund's
administrator. AFSG Securities Corp. ("AFSG") is the Fund's
distributor/principal underwriter. AEGON/Transamerica Investor Services, Inc.
("ATIS") is the 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. AUSA and WRL are wholly owned indirect
subsidiaries of AEGON NV, a Netherlands corporation.
Investment advisory fees: The Fund pays management fees to ATFA based on
average daily net assets ("ANA") at the following stated break points:
0.80% of the first $500 million of ANA
0.70% of ANA over $500 million
ATFA currently voluntarily waives its advisory fee and will reimburse the Fund
to the extent that operating expenses, excluding 12b-1 fees, exceed the
following stated annual limit:
1.20% Expense Limit
If total fund expenses fall below the annual expense limitations agreed to by
the adviser within the succeeding three years, the Fund may be required to pay
the advisor a portion or all of the waived advisory fees.
Distribution and service fees: The Fund has a 12b-1 distribution plan under the
1940 Act pursuant to which an annual fee, based on average daily net assets, is
paid to the distributor for various disbursements such as broker-dealer account
servicing fees and other promotional expenses of the Fund. The 12b-1 fee for
the Fund is comprised of a 0.25% service fee and the remaining amount is an
asset-based sales charge/distribution fee. The Fund is authorized under the
12b-1 plan to pay fees on each class up to the following limits:
Class A 0.35%
Class B 1.00%
Class C 1.00%
Class L 1.00%
Class M 0.90%
Underwriter commissions relate to front-end sales charges imposed for Class A
and M shares and contingent deferred sales charges from Classes B, L, M and
certain A share redemptions. For the year ended October 31, 2003, the
underwriter commissions were as follows:
Received by Underwriter $ 185
Retained by Underwriter 18
Contingent Sales Charges 101
Administrative services: The Fund has entered into an agreement with ATFS for
financial and legal fund administration services, which include such items as
compliance, expenses, financial statements and other reporting, distributions,
tax returns, prospectus preparation, board of trustees meeting support and
other legal matters. Transfer agent fees are reflected separately from
Administration fees on the Statement of Operations. The Legal fees on the
Statement of Operations are for fees paid to external legal counsel. ATFS
provides its services to the Fund at a cost and is reimbursed monthly.
Transfer agent fees: The Fund incurs ATIS annual per-account charges (not in
thousands) of $20.00 for each open shareholder account and $1.63 for each
closed account maintained, and certain out of pocket expenses.
Brokerage commissions: Brokerage commissions incurred on security transactions
placed with an affiliate of the sub-adviser for the year ended October 31,
2003, were $199.
Deferred compensation plan: Each eligible Fund Trustee may elect participation
in the Deferred Compensation Plan ("the Plan"). Under the Plan, such Trustees
may defer payment of a percentage of their total fees earned as a Fund Trustee.
These deferred amounts may be invested in any IDEX Fund. At October 31, 2003,
the value of invested plan amounts was $15. Invested plan amounts and the total
liability for deferred compensation to the Trustees under the Plan at October
31, 2003, are included in Net assets in the accompanying Statement of Assets
and Liabilities.
IDEX Mutual Funds Annual Report 2003
IDEX Alger Aggressive Growth 10
IDEX Alger Aggressive Growth
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 3. INVESTMENT TRANSACTIONS
The cost of securities purchased and proceeds from securities sold (excluding
short-term securities) for the year ended October 31, 2003, are as follows:
Purchases of securities:
Long-Term excluding U.S. Government $ 216,384
U.S. Government -
Proceeds from maturities and sales of securities:
Long-Term excluding U.S. Government 221,536
U.S. Government -
NOTE 4. FEDERAL INCOME TAX MATTERS
The Fund has not made any provision for federal income or excise taxes due to
its policy to distribute all of its taxable income and capital gains to its
shareholders and otherwise qualify as a regulated investment company under the
Internal Revenue Code. Income and capital gain distributions are determined in
accordance with income tax regulations, which may differ from GAAP. These
differences are primarily due to differing treatments for items including, but
not limited to, wash sales, net operating losses and capital loss
carryforwards.
Reclassifications between Undistributed net investment income (loss),
Undistributed net realized capital gains (loss) and Shares of beneficial
interest are made to reflect income and gains available for distribution under
federal tax regulations. Results of operations and net assets are not effected
by these reclassifications. These reclassifications are as follows:
Shares of beneficial interest, unlimited
shares authorized $ (1,505)
Accumulated net investment income (loss) 1,505
Accumulated net realized gain (loss) from
investment securities -
The tax basis components of distributable earnings as of October 31, 2003, are
as follows:
Undistributed Ordinary Income $ -
===========
Undistributed Long-term Capital Gains $ -
===========
Capital Loss Carryforward $ (134,887)
===========
Net Unrealized Appreciation (Depreciation) $ 16,778
===========
The capital loss carryforward utilized as of October 31, 2003 was $4,496. The
capital loss carryforwards are available to offset future realized capital
gains through the periods listed:
Capital Loss
Carryforward Available through
- -------------- ------------------
$ 85,926 October 31, 2009
48,961 October 31, 2010
The aggregate cost of investments and composition of unrealized appreciation
(depreciation) for federal income tax purposes as of October 31, 2003, are as
follows:
Federal Tax Cost Basis $ 130,906
=========
Unrealized Appreciation $ 18,008
Unrealized (Depreciation) (1,230)
---------
Net Unrealized Appreciation (Depreciation) $ 16,778
=========
IDEX Mutual Funds Annual Report 2003
IDEX Alger Aggressive Growth 11
- --------------------------------------------------------------------------------
Report of Independent Certified Public Accountants
To the Board of Trustees and Shareholders of
IDEX Alger Aggressive Growth
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of IDEX Alger Aggressive Growth (the
"Fund") (one of the portfolios constituting the IDEX Mutual Funds) at October
31, 2003, and the results of its operations, the changes in its net assets and
the financial highlights for each of the periods indicated, in conformity with
accounting principles generally accepted in the United States of America. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with auditing standards generally accepted in the United States of America,
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at October 31, 2003 by correspondence with the
custodian and brokers, provide a reasonable basis for our opinion.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Tampa, Florida
December 18, 2003
IDEX Mutual Funds Annual Report 2003
IDEX Alger Aggressive Growth 12
IDEX American Century Income & Growth
- --------------------------------------------------------------------------------
MARKET ENVIRONMENT
The economic recovery strengthened during the year ended October 31, 2003.
Manufacturing activity increased, productivity surged, corporate profits
bounced back, and investors saw the first signs of the long-awaited return of
business spending and hiring. The Federal Reserve Board helped the recovery
along by cutting interest rates to a 42-year low of 1.00%, as low inflation
gave the central bank more time to stimulate the economy. Congress also did its
part to help the economy by passing another round of tax cuts and rebates. As a
result, consumer spending continued to support the economy. Mortgage
refinancing and real wage gains helped buoy spending, despite high levels of
consumer debt.
Stocks dipped leading up to the war in Iraq, but bounced back when profits and
confidence improved. Small and medium-sized companies outpaced large-cap
stocks. Among large-company stocks, cheaper, value-oriented stocks outpaced
stocks geared for growth, but both categories performed well.
PERFORMANCE
For the year ended October 31, 2003, IDEX American Century Income & Growth
returned 20.40%. By comparison its benchmark, the Standard and Poor's 500
Composite Stock Index ("S&P 500") returned 20.79%. Stock selection in the
consumer cyclical, energy, and financial sectors enhanced the portfolio's
performance, while the portfolio's risk controls helped it stay in balance with
the S&P 500. The main detractor from the relative performance was stock
selection in the consumer services sector.
STRATEGY REVIEW
Consumer cyclicals advanced, as tax cuts helped boost consumer spending. The
portfolio's overweight positions in several home-building stocks helped
performance most in that sector. In addition, solid stock selection among
department stores and automakers helped the portfolio's performance. Overall,
stock picks in the consumer cyclicals sector boosted relative performance more
than any other sector of the market.
Unfortunately, our successful stock picking in the consumer cyclicals sector
did not transfer to consumer services. In the services sector, one of the
portfolio's biggest holdings tumbled when it cut its dividend and restructured
its business. That burdened the portfolio's performance more than any other
sector. Fortunately, solid stock selection in other sectors offset the negative
impact.
Technology stocks led the rally, as investors reacted to better business
spending and solid technology profits. Technology stocks were one of the
biggest drivers of the portfolio's positive, absolute return. On a relative
basis, the portfolio performed well in the semiconductor industry, but less
exposure to the highest-priced technology shares in other industries detracted
somewhat.
Energy stocks continued to benefit from relatively high oil prices, but lagged
the overall market. The portfolio's energy stocks performed slightly better
than the benchmark's energy weighting. That's because solid stock selection in
the refining and energy reserves and production industries more than offset the
negative impact of the portfolio's modest overweight in the sector.
Financial stocks rallied, as the stock market rebounded and interest rates
remained relatively low. Holdings in the property and casualty industry and an
overweight position in a credit-card company also helped the portfolio's
performance.
/s/ John Schniedwind
John Schniedwind
/s/ Kurt Borgwardt
Kurt Borgwardt
Co-Fund Managers
American Century Investment Management, Inc.
IDEX Mutual Funds Annual Report 2003
IDEX American Century Income & Growth 1
IDEX American Century Income & Growth
- --------------------------------------------------------------------------------
Comparison of change in value of $10,000 investment in Class A shares and its
comparative index.
Growth of $10,000
Inception of 3/1/00 through 10/31/03
Investment less sales charges - $9,452
[The following table was depicted as a mountain chart in the printed material.]
DATE Class A S&P 500
- ------------------ ------------------ -----------------
3/1/2000 9,452 10,000
3/31/2000 10,229 10,978
6/30/2000 10,030 10,687
9/30/2000 10,016 10,583
12/31/2000 9,869 9,756
3/31/2001 9,055 8,600
6/30/2001 9,314 9,103
9/30/2001 8,146 7,767
12/31/2001 8,943 8,597
3/31/2002 9,079 8,621
6/30/2002 8,034 7,466
9/30/2002 6,635 6,177
12/31/2002 7,174 6,698
3/31/2003 6,891 6,486
6/30/2003 7,997 7,485
9/30/2003 8,139 7,683
10/31/2003 8,592 8,117
Average Annual Total Return for Periods Ended 10/31/03
- --------------------------------------------------------------------------------
From Inception
1 year Inception Date
- --------------------------------------------------------
Class A (NAV) 20.40% -2.57% 3/1/00
Class A (POP) 13.78% -4.06% 3/1/00
S&P 500(1) 20.79% -5.53% 3/1/00
- --------------------------------------------------------
Class B (NAV) 19.70% -3.21% 3/1/00
Class B (POP) 14.70% -3.74% 3/1/00
- --------------------------------------------------------
Class C (NAV) 19.70% -3.21% 3/1/00
- --------------------------------------------------------
Class L (NAV) - 21.17% 11/11/02
Class L (POP) - 19.17% 11/11/02
- --------------------------------------------------------
Class M (NAV) 19.78% -3.12% 3/1/00
Class M (POP) 17.59% -3.39% 3/1/00
- --------------------------------------------------------
NOTES
(1) The Standard & Poor's 500 Composite Stock (S&P 500) 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 Micropal(R)(C) 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 shares, (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.
Periods less than 1 year represent total return and are not annualized.
This material must be preceded or accompanied by a current prospectus, which
includes specific contents regarding the investment objectives and policies of
this fund.
IDEX Mutual Funds Annual Report 2003
IDEX American Century Income & Growth 2
IDEX American Century Income & Growth
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
At October 31, 2003
(all amounts except share amounts in thousands)
Shares Value
- -------------------------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCKS (0.3%)
Automotive (0.1%)
Ford Motor Company Capital Trust II 1,092 $ 51
Computer & Office Equipment (0.2%)
Xerox Corporation 507 53
--------
Total Convertible Preferred Stocks (cost: $114) 104
--------
PREFERRED STOCKS (0.1%)
Automotive (0.1%)
General Motors Corporation 1,300 30
--------
Total Preferred Stocks (cost: $36) 30
--------
COMMON STOCKS (98.8%)
Aerospace (0.3%)
Lockheed Martin Corporation 1,061 49
United Technologies Corporation 743 63
Air Transportation (0.4%)
Delta Air Lines, Inc. (b) 867 11
FedEx Corporation 1,012 77
Southwest Airlines Co. (b) 3,149 61
Amusement & Recreation Services (0.6%)
Disney (Walt) Company (The) 7,326 166
Harrah's Entertainment, Inc. 1,229 53
Apparel & Accessory Stores (0.3%)
Claire's Stores, Inc. 922 36
Gap, Inc. (The) 3,569 68
Automotive (2.5%)
Delphi Corporation 8,733 78
Ford Motor Company 54,773 663
General Motors Corporation 3,098 132
Honeywell International Inc. 358 11
Automotive Dealers & Service Stations (0.0%)
Advance Auto Parts, Inc. (a) 121 9
Beverages (0.2%)
PepsiCo, Inc. 1,364 65
Business Services (1.1%)
CheckFree Holdings Corporation (a) 1,073 30
Rent-A-Center, Inc. (a) 5,708 178
Viad Corp 6,793 170
Chemicals & Allied Products (4.8%)
Cytec Industries Inc. (a) 369 13
Monsanto Company 21,235 532
Procter & Gamble Company (The) 8,699 855
RPM, Inc. 2,500 36
Sherwin-Williams Company (The) 7,664 257
Commercial Banks (13.5%)
Bank of America Corporation 18,975 $ 1,437
Bank One Corporation (b) 560 24
Citigroup Inc. 25,091 1,189
First Tennessee National Corporation 1,434 65
FleetBoston Financial Corporation 3,004 121
MBNA Corporation 1,293 32
Morgan Chase & Co. (J.P.) (b) 20,047 720
National City Corporation 1,750 57
PNC Financial Services Group, Inc. (The) 2,415 129
U.S. Bancorp 12,390 337
UnionBanCal Corporation 3,299 179
Wachovia Corporation 5,085 233
Wells Fargo & Company 4,796 270
Communication (1.1%)
PanAmSat Corporation (a) 5,156 107
Viacom, Inc.-Class B 6,827 272
Communications Equipment (0.5%)
QUALCOMM Incorporated 2,664 127
Scientific-Atlanta, Inc. (b) 1,160 34
Computer & Data Processing Services (4.6%)
Computer Associates International, Inc. 292 7
Computer Sciences Corporation (a)(b) 1,743 69
Convergys Corporation (a)(b) 4,472 72
EarthLink, Inc. (a) 2,963 27
Electronic Arts Inc. (a) 162 16
Electronic Data Systems Corporation (b) 6,716 144
Intuit Inc. (a) 877 44
Microsoft Corporation 34,246 896
Oracle Corporation (a) 9,467 113
Take-Two Interactive Software, Inc. (a) 1,460 58
United Online, Inc. (a)(b) 1,812 52
VeriSign, Inc. (a) 8,251 131
Computer & Office Equipment (4.7%)
Cisco Systems, Inc. (a) 14,438 303
Dell Computer Corporation (a) 2,934 106
Hewlett-Packard Company 19,017 424
Imation Corp. 153 5
International Business Machines
Corporation 5,538 496
Storage Technology Corporation (a) 1,237 30
Western Digital Corporation (a) 9,797 132
Xerox Corporation (a)(b) 14,427 151
Construction (1.6%)
KB Home 2,933 201
NVR, Inc. (a) 747 366
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX American Century Income & Growth 3
IDEX American Century Income & Growth
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Shares Value
- -------------------------------------------------------------------------------------
Department Stores (3.4%)
Federated Department Stores, Inc. 20,525 $ 976
May Department Stores Company (The) 7,610 213
Electric Services (2.4%)
Edison International (a) 22,744 448
Entergy Corporation 2,330 126
FPL Group, Inc. 1,125 72
Great Plains Energy Incorporated (b) 5,742 183
OGE Energy Corp. 1,146 26
Electric, Gas & Sanitary Services (1.5%)
Exelon Corporation 6,316 401
Sempra Energy 2,569 71
UGI Corporation 1,693 52
Electrical Goods (0.9%)
Arrow Electronics, Inc. (a) 5,775 123
Avnet, Inc. (a) 9,661 187
Electronic & Other Electric Equipment (2.2%)
Eaton Corporation 365 37
Energizer Holdings, Inc. (a) 479 18
General Electric Company 18,946 550
Whirlpool Corp. 2,159 152
Electronic Components & Accessories (4.7%)
Benchmark Electronics, Inc. (a)(b) 1,719 84
ESS Technology, Inc. (a) 1,925 27
Intel Corporation 39,488 1,305
Sanmina Corporation (a)(b) 7,108 75
Texas Instruments Incorporated 1,335 39
Tyco International Ltd. (b) 5,946 124
Fabricated Metal Products (0.7%)
Fortune Brands, Inc. 3,922 256
Food & Kindred Products (2.6%)
Altria Group, Inc. (b)(d) 13,382 621
Archer Daniels Midland Co. 2,649 38
ConAgra Foods, Inc. 6,524 156
Sara Lee Corporation 4,252 85
Gas Production & Distribution (0.7%)
ONEOK, Inc. 11,752 234
Health Services (0.2%)
LabOne, Inc. 2,719 54
Holding & Other Investment Offices (0.6%)
CBL & Associates Properties, Inc. 1,278 68
Equity Office Properties Trust 2,383 67
General Growth Properties, Inc. 471 36
Simon Property Group, Inc. 771 35
Industrial Machinery & Equipment (0.1%)
Briggs & Stratton Corporation 383 25
Instruments & Related Products (1.3%)
Eastman Kodak Company 19,002 $ 464
Insurance (5.0%)
Allstate Corporation (The) 5,030 199
American International Group, Inc. 235 14
Fidelity National Financial, Inc. (b) 13,254 410
First American Corporation (The) 11,806 338
Health Net Inc. (a)(b) 5,803 183
Humana Inc. (a) 8,264 168
PacifiCare Health Systems, Inc. (a) 1,631 97
Principal Financial Group, Inc. 2,954 93
W.R. Berkley Corporation 6,024 207
XL Capital Ltd.-Class A (b) 509 35
Life Insurance (1.4%)
AmerUs Group Co. 5,217 197
John Hancock Financial Services, Inc. 3,562 126
Protective Life Corporation 4,675 152
Lumber & Other Building Materials (0.1%)
Home Depot, Inc. (The) 691 26
Lumber & Wood Products (0.7%)
Louisiana-Pacific Corporation (a) 1,627 31
Rayonier, Inc. 5,363 226
Mining (0.0%)
Consol Energy Inc. (b) 351 8
Motion Pictures (2.5%)
Blockbuster Inc.-Class A 5,471 105
Fox Entertainment Group, Inc.-Class A (a) 898 25
Netflix, Inc. (a) 362 21
Regal Entertainment Group-Class A (b) 9,382 192
Time Warner Inc. (a) 36,131 552
Oil & Gas Extraction (1.4%)
ConocoPhillips 2,286 131
Occidental Petroleum Corporation 8,235 290
Schlumberger Limited 1,255 59
Paper & Allied Products (0.3%)
Bemis Company, Inc. 2,159 100
Paper & Paper Products (0.3%)
United Stationers Inc. (a) 2,989 111
Personal Credit Institutions (0.1%)
Capital One Financial Corporation 862 52
Personal Services (0.7%)
Block (H&R), Inc. 3,379 159
Cendant Corporation (a) 3,447 70
Petroleum Refining (7.8%)
Amerada Hess Corporation (b) 3,411 176
ChevronTexaco Corporation 9,297 691
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX American Century Income & Growth 4
IDEX American Century Income & Growth
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Shares Value
- -------------------------------------------------------------------------------------
Petroleum Refining (continued)
Exxon Mobil Corporation 16,839 $ 615
Marathon Oil Corporation 25,110 743
Sunoco, Inc. 11,635 509
Pharmaceuticals (8.4%)
Abbott Laboratories 2,369 101
Amgen Inc. (a) 5,645 349
Bristol-Myers Squibb Co. 17,940 455
Endo Pharmaceutical Holdings Inc. (a) 1,243 20
ICN Pharmaceuticals, Inc. (b) 1,419 27
Johnson & Johnson 10,238 515
King Pharmaceuticals, Inc. (a) 1,885 25
McKesson HBOC, Inc. 6,662 202
Merck & Co., Inc. 13,451 595
Pfizer Inc. 22,477 710
Primary Metal Industries (0.0%)
Engelhard Corporation 244 7
Radio, Television & Computer Stores (0.1%)
RadioShack Corporation 802 24
Railroads (0.4%)
Burlington Northern Santa Fe
Corporation 1,222 35
CSX Corporation 735 23
Norfolk Southern Corporation 1,332 27
Union Pacific Corporation 878 55
Retail Trade (0.3%)
Barnes & Noble, Inc. (a) 3,486 104
Rubber & Misc. Plastic Products (0.2%)
Carlisle Companies Incorporated 1,201 69
Savings Institutions (1.0%)
Flagstar Bancorp, Inc. 1,165 26
Washington Mutual, Inc. 7,105 311
Security & Commodity Brokers (1.6%)
American Express Company 621 29
E*TRADE Group, Inc. (a) 1,173 12
Lehman Brothers Holdings Inc. 105 8
Merrill Lynch & Co., Inc. 5,278 312
Morgan Stanley 3,933 216
Telecommunications (6.3%)
ALLTEL Corporation 5,534 262
AT&T Corp. (b) 2,785 52
BellSouth Corporation 12,933 340
Nextel Communications, Inc.-Class A (a)(b) 12,298 298
SBC Communications Inc. 13,927 334
Sprint Corporation (FON Group) 22,488 360
Verizon Communications, Inc. 16,875 567
Transportation Equipment (0.1%)
General Dynamics Corporation 83 $ 7
United Defense Industries, Inc. (a) 752 24
Trucking & Warehousing (0.8%)
United Parcel Service, Inc.-Class B (b) 3,868 281
U.S. Government Agencies (0.9%)
Fannie Mae 4,364 313
Wholesale Trade Durable Goods (0.3%)
Fisher Scientific International Inc. (a)(b) 3,023 122
Wholesale Trade Nondurable Goods (0.6%)
SUPERVALU INC. 7,809 197
--------
Total Common Stocks (cost: $32,615) 34,742
--------
Principal Value
- ------------------------------------------------------------------------
SECURITY LENDING COLLATERAL (11.2%)
Debt (9.8%)
Bank Notes (1.2%)
Canadian Imperial Bank of Commerce
1.12%, due 11/04/2003 $ 171 $ 171
Fleet National Bank
1.06%, due 01/21/2004 239 239
Euro Dollar Terms (5.5%)
Bank of Montreal
1.03%, due 11/13/2003 137 137
1.04%, due 11/14/2003 120 120
Bank of Nova Scotia (The)
1.06%, due 11/12/2003 69 69
Bank of Scotland
1.04%, due 11/14/2003 137 137
Citigroup Inc.
1.08%, due 01/05/2004 206 206
Credit Agricole Indosuez
1.08%, due 01/06/2004 151 151
Den Danske Bank
1.04%, due 11/10/2003 69 69
1.08%, due 01/20/2004 206 206
Royal Bank of Canada
1.04%, due 11/24/2003 171 171
1.06%, due 12/08/2003 69 69
Royal Bank of Scotland Group PLC (The)
1.08%, due 01/15/2004 206 206
SouthTrust Bank
1.08%, due 01/16/2004 206 206
Wells Fargo & Company
1.04%, due 11/20/2003 206 206
Promissory Notes (0.7%)
Goldman Sachs Group, Inc. (The)
1.15%, due 11/03/2003 240 240
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX American Century Income & Growth 5
IDEX American Century Income & Growth
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Principal Value
- ------------------------------------------------------------------------
Repurchase Agreements (2.4%) (c)
Goldman Sachs Group, Inc. (The)
1.10% Repurchase Agreement dated
10/31/2003 to be repurchased at $69 on
11/03/2003 $ 69 $ 69
Merrill Lynch & Co., Inc.
1.10% Repurchase Agreement dated
10/31/2003 to be repurchased at $788
on 11/03/2003 788 788
Shares Value
- ------------------------------------------------------------------------
Investment Companies (1.4%)
Money Market Funds (1.4%)
Merrimac Cash Series Fund-
Premium Class
1-day yield of 0.97% 480,049 $ 480
--------
Total Security Lending Collateral (cost: $3,940) 3,940
--------
Total Investment Securities (cost: $36,705) $ 38,816
========
SUMMARY:
Investments, at value 110.4% $ 38,816
Liabilities in excess of other assets (10.4)% (3,668)
----- --------
Net assets 100.0% $ 35,148
===== ========
FUTURES CONTRACTS:
- -----------------------------------------------------------------
Net Unrealized
Settlement Appreciation
Contracts Date Amount (Depreciation)
- -----------------------------------------------------------------
S&P 500 Index 1 12/18/2003 $ 256 $ 6
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 (see Note
1). The value at October 31, 2003, of all securities on loan is $3,798.
(c) Cash collateral for the Repurchase Agreements, valued at $874, 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.
(d) At October 31, 2003, all or a portion of this security is segregated with
the custodian to cover margin requirements for open futures contracts. The
value of all securities segregated at October 31, 2003, is $140.
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX American Century Income & Growth 6
IDEX American Century Income & Growth
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
At October 31, 2003
(all amounts except per share amounts in thousands)
Assets:
Investment securities, at value (cost: $36,705)
(including $3,798 of securities loaned) $ 38,816
Cash 424
Receivables:
Investment securities sold 52
Shares of beneficial interest sold 116
Dividends 70
Other 5
--------
39,483
--------
Liabilities:
Investment securities purchased 59
Accounts payable and accrued liabilities:
Shares of beneficial interest redeemed 187
Management and advisory fees 23
Distribution fees 24
Transfer agent fees 51
Payable for securities on loan 3,940
Other 51
--------
4,335
--------
Net Assets $ 35,148
========
Net Assets Consist of:
Shares of beneficial interest, unlimited shares authorized $ 40,648
Undistributed net investment income (loss) 15
Accumulated net realized gain (loss) from investment
securities and futures contracts (7,632)
Net unrealized appreciation (depreciation) on:
Investment securities 2,111
Futures contracts 6
--------
Net Assets $ 35,148
========
Shares Outstanding:
Class A 989
Class B 1,945
Class C 620
Class L 139
Class M 246
Net Asset Value Per Share:
Class A $ 9.09
Class B 8.87
Class C 8.87
Class L 8.87
Class M 8.90
Maximum Offering Price Per Share (a):
Class A $ 9.62
Class M 8.99
(a) 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.
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the year ended October 31, 2003
(all amounts in thousands)
Investment Income:
Interest $ 1
Dividends 692
Income from loaned securities-net 3
-------
696
-------
Expenses:
Management and advisory fees 265
Transfer agent fees 178
Printing and shareholder reports 40
Custody fees 48
Administration fees 31
Legal fees 2
Auditing and accounting fees 18
Trustees fees 2
Registration fees 62
Other 2
Distribution and service fees:
Class A 28
Class B 145
Class C 44
Class L 3
Class M 19
-------
Total expenses 887
Less:
Advisory fee waiver (207)
-------
Net expenses 680
-------
Net Investment Income (Loss) 16
-------
Net Realized Gain (Loss) from:
Investment securities (2,351)
Futures contracts 44
-------
(2,307)
-------
Net Increase (Decrease) in Unrealized Appreciation
(Depreciation) on:
Investment securities 7,565
Futures contracts 6
-------
7,571
-------
Net Gain (Loss) on Investment Securities and Futures
Contracts 5,264
-------
Net Increase (Decrease) in Net Assets Resulting from
Operations $ 5,280
=======
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX American Century Income & Growth 7
IDEX American Century Income & Growth
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended
(all amounts in thousands)
October 31, October 31,
2003 2002
----------- -----------
Increase (Decrease) In Net Assets From:
Operations:
Net investment income (loss) $ 16 $ (134)
Net realized gain (loss) from investment
securities and futures contracts (2,307) (3,697)
Net unrealized appreciation
(depreciation) on investment
securities and futures contracts 7,571 (3,257)
-------- --------
5,280 (7,088)
-------- --------
Distributions to Shareholders:
From net investment income:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
-------- --------
- -
-------- --------
From net realized gains:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
-------- --------
- -
-------- --------
Capital Share Transactions:
Proceeds from shares sold:
Class A 3,664 13,320
Class B 4,673 12,717
Class C 1,954 3,660
Class L 1,169 -
Class M 333 1,945
-------- --------
11,793 31,642
-------- --------
Dividends and distributions reinvested:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
-------- --------
- -
-------- --------
Cost of shares redeemed:
Class A (4,031) (8,387)
Class B (4,466) (6,476)
Class C (1,462) (2,502)
Class L (17) -
Class M (1,030) (1,009)
-------- --------
(11,006) (18,374)
-------- --------
787 13,268
-------- --------
Net increase (decrease) in net assets 6,067 6,180
-------- --------
Net Assets:
Beginning of year 29,081 22,901
-------- --------
End of year $ 35,148 $ 29,081
======== ========
Undistributed Net Investment Income (Loss) $ 15 $ -
======== ========
Share Activity:
Shares issued:
Class A 445 1,467
Class B 576 1,404
Class C 243 407
Class L 141 -
Class M 42 215
-------- --------
1,447 3,493
-------- --------
Shares issued-reinvested from distributions:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
-------- --------
- -
-------- --------
Shares redeemed:
Class A (503) (1,009)
Class B (580) (792)
Class C (193) (295)
Class L (2) -
Class M (134) (120)
-------- --------
(1,412) (2,216)
-------- --------
Net increase (decrease) in shares
outstanding 35 1,277
======== ========
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX American Century Income & Growth 8
IDEX American Century Income & Growth
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share of beneficial interest outstanding throughout each period
----------------------------------------------------------------------------------------------------------
Investment Operations Distributions
----------------------------------------- --------------------------------------
Net Asset Net Asset
For the Value, Net Net Realized From Net From Net Value,
Period Beginning Investment and Unrealized Total Investment Realized Total End
Ended (d)(g) of Period Income (Loss) Gain (Loss) Operations Income Gains Distributions of Period
- -----------------------------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 $ 7.55 $ 0.04 $ 1.50 $ 1.54 $ - $ - $ - $ 9.09
10/31/2002 8.79 0.01 (1.25) (1.24) - - - 7.55
10/31/2001 10.83 (0.03) (2.01) (2.04) - - - 8.79
10/31/2000 10.00 - 0.83 0.83 - - - 10.83
- -----------------------------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 7.41 (0.01) 1.47 1.46 - - - 8.87
10/31/2002 8.69 (0.05) (1.23) (1.28) - - - 7.41
10/31/2001 10.79 (0.10) (2.00) (2.10) - - - 8.69
10/31/2000 10.00 (0.04) 0.83 0.79 - - - 10.79
- -----------------------------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 7.41 (0.01) 1.47 1.46 - - - 8.87
10/31/2002 8.69 (0.05) (1.23) (1.28) - - - 7.41
10/31/2001 10.79 (0.08) (2.02) (2.10) - - - 8.69
10/31/2000 10.00 (0.04) 0.83 0.79 - - - 10.79
- -----------------------------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 7.32 (0.01) 1.56 1.55 - - - 8.87
- -----------------------------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 7.43 - 1.47 1.47 - - - 8.90
10/31/2002 8.71 (0.04) (1.24) (1.28) - - - 7.43
10/31/2001 10.79 (0.09) (1.99) (2.08) - - - 8.71
10/31/2000 10.00 (0.04) 0.83 0.79 - - - 10.79
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
-----------------------------------------------------------------------
Ratio of Expenses
Net Assets, to Average Net Investment
For the End of Net Assets (a) Income (Loss) Portfolio
Period Total Period ----------------------- to Average Turnover
Ended (g) Return (c) (000's) Net (e) Total (f) Net Assets (a) Rate (b)
- ---------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 20.40% $ 8,988 1.85% 2.56% 0.53% 76%
10/31/2002 (14.15) 7,908 1.80 2.43 0.09 161
10/31/2001 (18.80) 5,183 1.55 2.49 (0.28) 113
10/31/2000 8.30 2,974 1.55 6.85 (0.42) 111
- ---------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 19.70 17,245 2.50 3.21 (0.12) 76
10/31/2002 (14.76) 14,446 2.45 3.08 (0.56) 161
10/31/2001 (19.41) 11,623 2.20 3.14 (0.93) 113
10/31/2000 7.86 3,635 2.20 7.50 (1.07) 111
- ---------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 19.70 5,498 2.50 3.21 (0.12) 76
10/31/2002 (14.76) 4,223 2.45 3.08 (0.56) 161
10/31/2001 (19.41) 3,985 2.20 3.14 (0.93) 113
10/31/2000 7.86 2,077 2.20 7.50 (1.07) 111
- ---------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 21.17 1,230 2.50 3.21 (0.12) 76
- ---------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 19.78 2,187 2.40 3.11 (0.02) 76
10/31/2002 (14.68) 2,504 2.35 2.98 (0.46) 161
10/31/2001 (19.32) 2,110 2.10 3.04 (0.83) 113
10/31/2000 7.93 741 2.10 7.40 (0.97) 111
- ---------------------------------------------------------------------------------------------------------------
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX American Century Income & Growth 9
IDEX American Century Income & Growth
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (continued)
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 are not annualized.
(d) Per share information is calculated based on average number of shares
outstanding for the periods ended 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 (see note 2).
(f) Ratio of Total Expenses to Average Net Assets includes all expenses before
fee waivers and reimbursements by the investment adviser.
(g) IDEX American Century Income & Growth ("the Fund") commenced operations on
March 1, 2000. The inception date for the Fund's offering of share Class L
was November 11, 2002.
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX American Century Income & Growth 10
IDEX American Century Income & Growth
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
At October 31, 2003
(all amounts in thousands)
NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
IDEX Mutual Funds is a Massachusetts business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company. IDEX American Century Income & Growth ("the
Fund"), part of IDEX Mutual Funds, began operations on March 1, 2000.
On March 1, 2002, IDEX GE U.S. Equity acquired all the net assets of IDEX
American Century Income & Growth pursuant to a plan of reorganization approved
by shareholders of IDEX American Century Income & Growth on February 22, 2002.
The acquisition was accomplished by a tax-free exchange of 1,150 shares of IDEX
American Century Income & Growth (valued at $11,600) for the 1,251 shares of
IDEX GE U.S. Equity outstanding on February 28, 2002. IDEX American Century
Income & Growth net assets at that date ($11,600) including $145 of unrealized
depreciation, were combined with those of IDEX GE U.S. Equity. The aggregate
net assets of IDEX GE U.S. Equity and IDEX American Century Income & Growth
immediately before the acquisition were $26,183 and $11,600, respectively.
Immediately following the merger, IDEX GE U.S. Equity was renamed IDEX American
Century Income & Growth.
Shares Amount
----------------------
Proceeds in connection with the acquisition
Class A 363 $ 3,678
Class B 581 5,853
Class C 111 1,115
Class M 95 954
-------
$11,600
=======
In the normal course of business, the Fund enters into contracts that contain a
variety of representations and warranties and which provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown, as this would involve future claims that may be made against the Fund
and/or its affiliates that have not yet occurred. However, based on experience,
the Fund expects the risk of loss to be remote.
See the Prospectus and Statement of Additional Information for a description of
the Fund's investment objective.
In preparing the Fund's financial statements in accordance with accounting
principles generally accepted in the United States of America ("GAAP"),
estimates or assumptions (which could differ from actual results) may be used
that affect reported amounts and disclosures. The following policies were
consistently followed by the Fund, in accordance with GAAP.
Multiple class operations and expenses: The Fund currently offers five classes
of shares, each with a public offering price that reflects different sales
charges, if any, and expense levels. Effective November 11, 2002, Class C and M
shares were closed to new investors. Income, non-class specific expenses and
realized and unrealized gains and losses are allocated daily to each class,
based upon the value of shares outstanding method as permitted under Rule 18f-3
of the 1940 Act. Each class bears its own specific expenses as well as a
portion of general, common expenses.
Security valuations: Fund investments traded on an exchange are valued at the
closing price on the day of valuation on the exchange where the security is
principally traded. With respect to securities traded on the NASDAQ INMS, such
closing price may be the last reported sales price or the NASDAQ Official
Closing Price.
Securities traded in the over-the-counter market and listed securities for
which no sale was reported on that date are valued at the last quoted bid
price.
Debt securities are valued by independent pricing services; however, those that
mature in sixty days or less are valued at amortized cost, which approximates
market.
Other securities for which quotations are not readily available are valued at
fair value determined in good faith, in accordance with procedures established
by and, under the supervision of the Board of Trustees and the Fund's Valuation
Committee.
Cash: The Fund may leave cash overnight in its cash account with the custodian,
Investors Bank & Trust Company ("IBT"). IBT has been contracted on behalf of
the Fund to invest the excess cash into a savings account, which at October 31,
2003, was paying an interest rate of 0.75%.
Securities lending: The Fund may lend securities to enhance fund earnings from
investing cash collateral received in making such loans to qualified borrowers
(typically broker/dealers). The Fund has engaged its custodian bank, IBT, as a
lending agent to administer its securities lending program. IBT earned $1 of
program net income for its services. When the Fund makes a security loan, it
receives cash collateral as protection against the risk that the borrower will
default on the loan, and records an asset for the cash invested collateral and
a liability for the return of the collateral.
Securities on loan are included in Investment securities at value on the
Statement of Assets and Liabilities and remain on the Schedule of Investments.
Loans of securities are required to be secured by collateral at least equal to
102% of the value of the securities at inception of the loan, and not less then
100% thereafter. The Fund may invest cash collateral in short-term money market
instruments including: U.S. Treasury Bills, U.S. agency obligations, commercial
paper, money market mutual funds, repurchase agreements and other highly rated,
liquid investments. During the life of securities loans, the collateral and
securities loaned remain subject to fluctuation in value. IBT marks to market
securities loaned and the collateral each business day. If additional
collateral is due (at least $1), IBT collects additional cash collateral from
the borrowers. Although securities loaned will be fully collateralized at all
IDEX Mutual Funds Annual Report 2003
IDEX American Century Income & Growth 11
IDEX American Century Income & Growth
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 1-(continued)
times, IBT may experience delays in, or may be prevented from, recovering the
collateral on behalf of the Fund. The Fund may recall a loaned security
position at any time from the borrower through IBT. In the event the borrower
fails to timely return a recalled security, IBT may indemnify the Fund by
purchasing replacement securities for the Fund at its own expense and claiming
the collateral to fund such a purchase. IBT absorbs the loss if the collateral
value is not sufficient to cover the cost of the replacement securities. If
replacement securities are not available, IBT will credit the equivalent cash
value to the Fund.
Income from securities lending is included in the Statement of Operations. The
amount of collateral and value of securities on loan are included in the
Statement of Assets and Liabilities as well as on the Schedule of Investments.
Real Estate Investment Trusts ("REITs"): There are certain additional risks
involved in investing in REITs. These include, but are not limited to, economic
conditions, changes in zoning laws, real estate values, property taxes and
interest rates. Since the Fund invests primarily in real estate related
securities, the value of its shares may fluctuate more widely than the value of
shares of a fund that invests in a broad range of industries.
Security transactions and investment income: Security transactions are recorded
on the trade date. Security gains and losses are calculated on the specific
identification basis. Dividend income is recorded on the ex-dividend date or,
in the case of foreign securities, as soon as the Fund is informed of the
ex-dividend date. Interest income, including accretion of discounts and
amortization of premiums, is recorded on the accrual basis commencing on the
settlement date.
Futures contracts: The Fund may enter into futures contracts to manage exposure
to market, interest rate or currency fluctuations. Futures contracts are valued
at the settlement price established each day by the board of trade or exchange
on which they are traded. The primary risks associated with futures contracts
are imperfect correlation between the change in market value of the securities
held and the prices of futures contracts; the possibility of an illiquid market
and inability of the counterparty to meet the contract terms.
The underlying face amounts of any open futures contracts at October 31, 2003,
are listed in the Schedule of Investments.
Dividend distributions: Distributions to shareholders are recorded on the
ex-dividend date and are determined in accordance with Federal income tax
regulations which may differ from GAAP.
NOTE 2. RELATED PARTY TRANSACTIONS
AEGON/Transamerica Fund Advisers, Inc. ("ATFA") is the Fund's investment
adviser. AEGON/Transamerica Fund Services, Inc. ("ATFS") is the Fund's
administrator. AFSG Securities Corp. ("AFSG") is the Fund's
distributor/principal underwriter. AEGON/Transamerica Investor Services, Inc.
("ATIS") is the 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. AUSA and WRL are wholly owned indirect
subsidiaries of AEGON NV, a Netherlands corporation.
Investment advisory fees: The Fund pays management fees to ATFA based on
average daily net assets ("ANA") at the following stated break points:
0.90% of the first $100 million of ANA
0.85% of the next $150 million of ANA
0.80% of ANA over $250 million
ATFA currently voluntarily waives its advisory fee and will reimburse the Fund
to the extent that operating expenses, excluding 12b-1 fees, exceed the
following stated annual limit:
1.50% Expense Limit
If total fund expenses fall below the annual expense limitations agreed to by
the adviser within the succeeding three years, the Fund may be required to pay
the advisor a portion or all of the waived advisory fees.
Advisory Fee Available for
Waived Recapture Through
-------------- ------------------
Fiscal Year 2003 207 10/31/2006
Distribution and service fees: The Fund has a 12b-1 distribution plan under the
1940 Act pursuant to which an annual fee, based on average daily net assets, is
paid to the distributor for various disbursements such as broker-dealer account
servicing fees and other promotional expenses of the Fund. The 12b-1 fee for
the Fund is comprised of a 0.25% service fee and the remaining amount is an
asset-based sales charge/distribution fee. The Fund is authorized under the
12b-1 plan to pay fees on each class up to the following limits:
Class A 0.35%
Class B 1.00%
Class C 1.00%
Class L 1.00%
Class M 0.90%
Underwriter commissions relate to front-end sales charges imposed for Class A
and M shares and contingent deferred sales charges from Classes B, L, M and
certain A share redemptions. For the year ended October 31, 2003, the
underwriter commissions were as follows:
Received by Underwriter $ 43
Retained by Underwriter 3
Contingent Sales Charges 70
IDEX Mutual Funds Annual Report 2003
IDEX American Century Income & Growth 12
IDEX American Century Income & Growth
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 2-(continued)
Administrative services: The Fund has entered into an agreement with ATFS for
financial and legal fund administration services, which include such items as
compliance, expenses, financial statements and other reporting, distributions,
tax returns, prospectus preparation, board of trustees meeting support and
other legal matters. Transfer agent fees are reflected separately from
Administration fees on the Statement of Operations. The Legal fees on the
Statement of Operations are for fees paid to external legal counsel. ATFS
provides its services to the Fund at a cost and is reimbursed monthly.
Transfer agent fees: The Fund incurs ATIS annual per-account charges (not in
thousands) of $20.00 for each open shareholder account and $1.63 for each
closed account maintained, and certain out of pocket expenses.
Deferred compensation plan: Each eligible Fund Trustee may elect participation
in the Deferred Compensation Plan ("the Plan"). Under the Plan, such Trustees
may defer payment of a percentage of their total fees earned as a Fund Trustee.
These deferred amounts may be invested in any IDEX Fund. At October 31, 2003,
the value of invested plan amounts was $1. Invested plan amounts and the total
liability for deferred compensation to the Trustees under the Plan at October
31, 2003, are included in Net assets in the accompanying Statement of Assets
and Liabilities.
NOTE 3. INVESTMENT TRANSACTIONS
The cost of securities purchased and proceeds from securities sold (excluding
short-term securities) for the year ended October 31, 2003, are as follows:
Purchases of securities:
Long-Term excluding U.S. Government $ 22,929
U.S. Government 189
Proceeds from maturities and sales of securities:
Long-Term excluding U.S. Government 21,718
U.S. Government 551
NOTE 4. FEDERAL INCOME TAX MATTERS
The Fund has not made any provision for federal income or excise taxes due to
its policy to distribute all of its taxable income and capital gains to its
shareholders and otherwise qualify as a regulated investment company under the
Internal Revenue Code. Income and capital gain distributions are determined in
accordance with income tax regulations, which may differ from GAAP. These
differences are primarily due to differing treatments for items including, but
not limited to, wash sales, net operating losses and capital loss
carryforwards.
Reclassifications between Undistributed net investment income (loss),
Undistributed net realized capital gains (loss) and Shares of beneficial
interest are made to reflect income and gains available for distribution under
federal tax regulations. Results of operations and net assets are not effected
by these reclassifications. These reclassifications are as follows. Dividend
income is recorded at management's estimate of the income included in
distributions from the REIT investments. Distributions received in excess of
this estimated amount are recorded as a reduction of the cost of investments.
The actual amounts of income, return of capital, and capital gains are only
determined by each REIT after the fiscal year-end, and may differ from the
estimated amounts.
Shares of beneficial interest, unlimited
shares authorized $ (2)
Undistributed net investment income (loss) (1)
Accumulated net realized gain (loss) from
investment securities 3
The tax basis components of distributable earnings as of October 31, 2003, are
as follows:
Undistributed Ordinary Income $ 17
========
Undistributed Long-term Capital Gains $ -
========
Capital Loss Carryforward $ (6,692)
========
Net Unrealized Appreciation (Depreciation) $ 1,177
========
The capital loss carryforwards are available to offset future realized capital
gains through the periods listed:
Capital Loss
Carryforward Available through
- -------------- ------------------
$ 856 October 31, 2009
3,407 October 31, 2010
2,429 October 31, 2011
The aggregate cost of investments and composition of unrealized appreciation
(depreciation) for federal income tax purposes as of October 31, 2003, are as
follows:
Federal Tax Cost Basis $ 37,639
========
Unrealized Appreciation $ 3,315
Unrealized (Depreciation) (2,138)
--------
Net Unrealized Appreciation (Depreciation) $ 1,177
========
IDEX Mutual Funds Annual Report 2003
IDEX American Century Income & Growth 13
IDEX American Century Income & Growth
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
Supplemental Tax Information
(unaudited)
For dividends paid during the year ended October 31, 2003, the Fund designates
qualified dividend income to the maximum extent allowable.
For corporate shareholders, 100% of investment income (dividend income plus
short-term gains, if any) qualifies for the dividends received deduction.
The information and distributions reported herein may differ from the
information and distributions taxable to the shareholders for the calendar year
ending December 31, 2003. Complete information will be computed and reported in
conjunction with your 2003 Form 1099-DIV.
IDEX Mutual Funds Annual Report 2003
IDEX American Century Income & Growth 14
- --------------------------------------------------------------------------------
Report of Independent Certified Public Accountants
To the Board of Trustees and Shareholders of
IDEX American Century Income & Growth
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of IDEX American Century Income &
Growth (the "Fund") (one of the portfolios constituting the IDEX Mutual Funds)
at October 31, 2003, and the results of its operations, the changes in its net
assets and the financial highlights for each of the periods indicated, in
conformity with accounting principles generally accepted in the United States
of America. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Fund's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with auditing standards generally accepted in the
United States of America, which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits, which included confirmation of securities at October 31, 2003 by
correspondence with the custodian and brokers, provide a reasonable basis for
our opinion.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Tampa, Florida
December 18, 2003
IDEX Mutual Funds Annual Report 2003
IDEX American Century Income & Growth 15
IDEX American Century International
- --------------------------------------------------------------------------------
MARKET ENVIRONMENT
The period was marked by the anticipation and onset of war in Iraq, concern
about the spread of a potentially fatal virus and Korean nuclear tensions, all
of which restrained many of the world's markets in late 2002 and the first few
months of 2003. But with the end of major combat in Iraq, and the SARS outbreak
under control, markets in the U.S. and abroad rebounded during the second half
of the period.
PERFORMANCE
For the year ended October 31, 2003, IDEX American Century International
returned 14.71%. By comparison its benchmark, the Morgan Stanley Capital
International EAFE Index, returned 27.57%.
STRATEGY REVIEW
Against this backdrop, IDEX American Century International's complement of
financial holdings posted the period's largest contribution to the portfolio.
The financial sector, the portfolio's biggest stake at the period's end,
advanced mostly on the strength of banks, which represented the portfolio's
heaviest average industry weighting. HBOS and The Royal Bank of Scotland Group,
both in the United Kingdom, were among the top-contributing banks. Both gained
on strong demand for mortgages and diminished concern about loan quality.
Elsewhere in the sector, the financial services industry advanced, while
property and casualty insurers declined. Overall, the sector underperformed the
benchmark.
The portfolio's telecommunications stake registered the second-best
performance, led by wireless companies. Some providers of mobile phone service
are benefiting from higher average revenue per user and increasing use of
mobile phones for data services. France Telecom and the United Kingdom's
Vodafone Group were the top two contributors among wireless companies. The
portfolio's overweight telecommunications sector outperformed the index.
The portfolio's investments in the technology sector rallied during the period,
led by gains among holdings in the semiconductor and electrical equipment
industries. Canon Inc., a top-10 holding, topped contributors in the
semiconductor industry. The Japanese company advanced on strong sales of
digital cameras. Alcatel, the French telecommunications-equipment maker, topped
the portfolio's contributors in the electrical equipment industry.
The commercial services sector also contributed to the portfolio, led by Yahoo
Japan Corporation ("Yahoo Japan") in the information services industry. Yahoo
Japan advanced as business surged on its online auction site. Internet auction
services have become the main engine of growth for Yahoo Japan since the
company started charging fees to list products for sale through its Web site.
Only three sectors detracted from the portfolio, with the industrials sector
registering the period's worst absolute performance. Although the sector's
heavy machinery industry contributed to the portfolio, those gains were
outweighed by declines among industrial parts holdings, with Tyco International
Group SA accounting for most of the damage. We eliminated the position. The
basic materials sector also detracted, with the forest products and paper
industry registering the sector's worst performance. Consumer services
retreated on weakness among publishers.
/s/ Henrik Strabo
Henrik Strabo
/s/ Mark S. Kopinski
Mark S. Kopinski
Co-Fund Managers
American Century Investment Management, Inc.
IDEX Mutual Funds Annual Report 2003
IDEX American Century International 1
IDEX American Century International
- --------------------------------------------------------------------------------
Comparison of change in value of $10,000 investment in Class A shares and its
comparative index.
Growth of $10,000
Inception of 2/1/97 through 10/31/03
Investment less sales charges - $9,452
[The following table was depicted as a mountain chart in the printed material.]
DATE Class A MSCI-EAFE
- -------------------- --------------- ----------------
2/1/1997 9,452 10,000
3/31/1997 9,588 10,205
6/30/1997 10,692 11,538
9/30/1997 10,777 11,464
12/31/1997 10,055 10,573
3/31/1998 11,594 12,137
6/30/1998 11,667 12,274
9/30/1998 9,690 10,537
12/31/1998 11,182 12,723
3/31/1999 11,333 12,909
6/30/1999 11,510 13,246
9/30/1999 11,799 13,837
12/31/1999 14,635 16,197
3/31/2000 15,045 16,189
6/30/2000 14,853 15,557
9/30/2000 13,125 14,311
12/31/2000 12,893 13,936
3/31/2001 11,135 12,033
6/30/2001 11,230 11,929
9/30/2001 9,369 10,264
12/31/2001 9,584 10,981
3/31/2002 9,504 11,043
6/30/2002 9,272 10,829
9/30/2002 7,442 8,698
12/31/2002 7,663 9,261
3/31/2003 6,924 8,509
6/30/2003 8,038 10,173
9/30/2003 8,291 11,006
10/31/2003 8,853 11,693
Average Annual Total Return for Periods Ended 10/31/03
- --------------------------------------------------------------------------------
From Inception
1 year 5 years Inception Date
- ----------------------------------------------------------------------
Class A (NAV) 14.71% -2.91% -0.97% 2/1/97
Class A (POP) 8.41% -4.01% -1.79% 2/1/97
MSCI-EAFE(1) 27.57% 0.09% 2.35% 2/1/97
- ----------------------------------------------------------------------
Class B (NAV) 13.91% -3.56% -1.62% 2/1/97
Class B (POP) 8.91% -3.76% -1.62% 2/1/97
- ----------------------------------------------------------------------
Class C (NAV) 13.91% - -8.39% 11/1/99
- ----------------------------------------------------------------------
Class L (NAV) - - 14.41% 11/11/02
Class L (POP) - - 12.41% 11/11/02
- ----------------------------------------------------------------------
Class M (NAV) 14.14% -3.46% -1.52% 2/1/97
Class M (POP) 12.00% -3.66% -1.67% 2/1/97
- ----------------------------------------------------------------------
NOTES
(1) The Morgan Stanley Capital International - Europe, Asia, and Far East
(MSCI-EAFE) 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 Micropal(R)(C)
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 shares, (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.
International investing involves special risks including currency fluctuations,
political instability, and different financial accounting standards.
Periods less than 1 year represent total return and are not annualized.
This material must be preceded or accompanied by a current prospectus, which
includes specific contents regarding the investment objectives and policies of
this fund.
IDEX Mutual Funds Annual Report 2003
IDEX American Century International 2
IDEX American Century International
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
At October 31, 2003
(all amounts except share amounts in thousands)
Shares Value
- ---------------------------------------------------------------------------------------
PREFERRED STOCKS (0.4%)
Germany (0.4%)
Porsche AG 1,630 $ 800
---------
Total Preferred Stocks (cost: $732) 800
---------
COMMON STOCKS (95.5%)
Australia (0.5%)
BHP Billiton Limited 114,984 955
Austria (0.9%)
Erste Bank der oesterreichischen
Sparkassen AG 15,328 1,696
Brazil (0.1%)
Tele Norte Celular Participacoes
SA-ADR (a)(b) 18,300 146
Canada (0.8%)
Nortel Networks Corporation (a)(b) 276,665 1,231
Placer Dome Inc.-CUFS 10,066 150
China (1.5%)
Huaneng Power International, Inc. 694,000 1,081
PetroChina Company Limited 2,489,000 905
SINOPEC Shanghai Petrochemical
Company Limited 2,564,000 726
Denmark (0.4%)
A. P. Moller-Maersk A/S 99 778
France (13.5%)
Accor SA 44,653 1,758
Alcatel-Class A (a)(b) 123,601 1,632
AXA 102,648 1,947
Credit Agricole SA-Rights Expires 11/07/2003 85,790 20
Credit Agricole SA (b) 103,690 2,204
France Telecom (a) 112,040 2,715
Groupe Danone SA 12,582 1,900
Groupe Wanadoo SA (a) 129,334 963
LVMH Moet Hennessy Louis Vuitton SA 30,604 2,117
Publicis Groupe SA (b) 45,185 1,414
Renault SA 23,453 1,553
Sanofi-Synthelabo 25,716 1,593
Societe Generale-Class A 48,867 3,633
Television Francaise 1 43,258 1,299
Germany (8.4%)
BASF AG 10,647 489
Commerzbank AG 10,300 204
Deutsche Borse AG 35,864 1,997
Deutsche Telekom AG (a)(b) 121,163 1,910
E.ON AG 19,288 972
METRO AG (b) 33,120 1,345
Muenchener Rueckversicherungs-
Gesellschaft AG
Rights Expires 11/10/2003 (b) 4,945 41
Germany (continued)
Muenchener Rueckversicherungs-
Gesellschaft AG (b) 5,045 $ 602
PUMA AG Rudolf Dassler Sport 5,887 860
SAP AG 15,337 2,225
Siemens AG-Registered Shares 44,573 2,998
T-Online International AG (a) 132,825 1,720
Greece (0.1%)
Public Power Corporation 4,800 103
Hong Kong (1.3%)
Cheung Kong (Holdings) Limited 109,000 909
CNOOC Limited 313,000 590
Sun Hung Kai Properties Limited 105,000 889
Hungary (0.3%)
Gedeon Richter Rt. 3,230 333
OTP Bank Rt. (a) 20,620 253
Ireland (2.0%)
Anglo Irish Bank Corporation PLC 68,410 822
CRH PLC (GBP) 78,924 1,421
RyanAir Holdings PLC-ADR (a)(b) 27,286 1,405
Israel (1.0%)
Teva Pharmaceutical Industries
Ltd.-ADR (b) 32,748 1,863
Italy (1.6%)
Banco Popolare di Verona e Novara S.c.r.l. 79,749 1,230
ENI-Ente Nazionale Idrocarburi 28,513 454
Marzotto SpA 89,687 817
Pininfarina SpA 14,780 434
Japan (20.7%)
Canon Inc. 58,409 2,829
Denso Corporation 54,000 1,025
Dentsu Inc. 112 505
East Japan Railway Company 189 857
FANUC LTD 37,000 2,228
Fast Retailing Co., Ltd. 11,500 699
Honda Motor Co., Ltd. 15,600 616
Hoya Corporation 21,264 1,926
KDDI Corporation 236 1,283
Keyence Corporation 7,800 1,717
Konica Corporation 88,000 1,158
Marui Co., Ltd. 101,700 1,293
Mitsubishi Corporation 267,000 2,775
Mitsui Fudosan Co., Ltd. 88,000 820
Murata Manufacturing Company, Ltd. 28,000 1,593
NEC Corporation 68,000 601
Nissan Motor Co., Ltd. 351,845 3,946
Nitto Denko Corporation 34,600 1,818
NTT DoCoMo, Inc. 560 1,213
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX American Century International 3
IDEX American Century International
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Shares Value
- ---------------------------------------------------------------------------------------
Japan (continued)
ORIX Corporation 14,800 $ 1,246
Pioneer Corporation 42,800 1,068
Sharp Corporation 86,000 1,355
Sony Corporation 37,700 1,315
Tokyo Electron Limited 19,700 1,413
Tokyu Corporation 211,000 1,047
Trend Micro Incorporated (a) 30,000 828
Yahoo Japan Corporation (a) 69 1,024
Mexico (0.6%)
America Movil, SA de CV-Series L-ADR 42,687 1,016
Netherlands (3.1%)
Fox Kids Europe NV (a) 54,960 425
ING Groep NV 135,234 2,810
Koninklijke Philips Electronics NV-NY
Registered Shares 64,418 1,729
STMicroelectronics NV-NY Registered
Shares 30,320 808
Russia (2.5%)
Lukoil Oil Company-ADR (b) 7,725 624
Mobile TeleSystems OJSC-ADR 16,599 1,286
Savings Bank of the Russian Federation (a) 1,417 356
Vimpel-Communications-ADR (a)(b) 12,835 836
YUKOS Oil Company (a) 138,646 1,553
South Africa (0.3%)
MTN Group Limited (a) 134,680 487
South Korea (2.0%)
Kookmin Bank 28,228 1,031
LG Electronics, Inc. 23,070 1,195
Samsung Electronics Co., Ltd. 3,501 1,391
Spain (1.1%)
Antena 3 Television, SA (a) 317 10
Gas Natural SDG, SA 13,836 266
Repsol-YPF, SA 25,918 452
Telefonica SA 99,847 1,243
Sweden (2.7%)
Atlas Copco AB-A Shares 26,620 937
ForeningsSparbanken AB 28,312 473
Skandia Insurance Company, Ltd. 258,040 948
Tele2 AB-B Shares (a) 22,646 1,141
Volvo AB-B Shares 48,665 1,362
Switzerland (10.1%)
ABB Ltd (a)(b) 139,629 822
Adecco SA-Registered Shares 38,464 2,272
Alcon, Inc. 14,474 798
Credit Suisse Group 114,926 4,054
Julius Baer Holding Ltd.-Class B 1,940 630
Switzerland (continued)
Nestle SA-Registered Shares 8,316 $ 1,833
Novartis AG 17,966 686
Roche Holding AG 35,967 2,980
Swiss Life Holding (a) 9,747 1,655
UBS AG-Registered Shares 46,276 2,845
Taiwan (0.3%)
China Steel Corporation-GDR (a) 680 11
China Steel Corporation GDR-144A 32,663 527
United Kingdom (17.8%)
3i Group PLC 94,790 997
Abbey National PLC 416,489 3,977
Alliance & Leicester PLC 136,324 2,052
AMVESCAP PLC 146,662 1,161
AstraZeneca PLC 57,383 2,696
BOC Group PLC (The) 58,380 796
BP PLC 356,891 2,478
British Sky Broadcasting Group PLC (a) 135,561 1,472
Exel PLC 86,418 1,112
GlaxoSmithKline PLC 74,620 1,598
Hays PLC 426,160 882
HBOS PLC 180,957 2,105
HSBC Holdings PLC 94,850 1,424
Man Group PLC 56,376 1,386
mmO2 PLC (a) 571,728 621
Next PLC 54,870 1,099
Reckitt Benckiser PLC 96,143 2,023
Smith & Nephew PLC 81,015 644
United Business Media PLC 82,530 650
Vodafone Group PLC 897,571 1,885
WPP Group PLC 160,940 1,534
United States (1.9%)
Comverse Technology, Inc. (a)(b) 47,378 855
iShares MSCI EAFE Index Fund (b) 20,420 2,545
---------
Total Common Stocks (cost: $157,906)
174,984
---------
Principal Value
- ------------------------------------------------------------------
SECURITY LENDING COLLATERAL (9.0%)
Debt (7.9%)
Bank Notes (0.9%)
Canadian Imperial Bank of Commerce
1.12%, due 11/04/2003 $ 717 $ 717
Fleet National Bank
1.06%, due 01/21/2004 1,003 1,003
Euro Dollar Term (4.5%)
Bank of Montreal
1.03%, due 11/13/2003 574 574
1.04%, due 11/14/2003 504 504
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX American Century International 4
IDEX American Century International
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Principal Value
- ------------------------------------------------------------------------
Euro Dollar Term (continued)
Bank of Nova Scotia (The)
1.06%, due 11/12/2003 $ 287 $ 287
Bank of Scotland
1.04%, due 11/14/2003 574 574
Citigroup Inc.
1.08%, due 01/05/2004 860 860
Credit Agricole Indosuez
1.08%, due 01/06/2004 631 631
Den Danske Bank
1.04%, due 11/10/2003 287 287
1.08%, due 01/20/2004 860 860
Royal Bank of Canada
1.04%, due 11/24/2003 717 717
1.06%, due 12/08/2003 287 287
Royal Bank of Scotland Group PLC (The)
1.08%, due 01/15/2004 860 860
SouthTrust Bank
1.08%, due 01/16/2004 860 860
Wells Fargo & Company
1.04%, due 11/20/2003 860 860
Promissory Notes (0.5%)
Goldman Sachs Group, Inc. (The)
1.15%, due 11/03/2003 1,004 1,004
Repurchase Agreements (2.0%) (c)
Goldman Sachs Group, Inc. (The)
1.10% Repurchase Agreement
dated 10/31/2003 to be repurchased
at $287 on 11/03/2003 287 287
Merrill Lynch & Co., Inc.
1.10% Repurchase Agreement
dated 10/31/2003 to be repurchased
at $3,296 on 11/03/2003 3,296 3,296
Shares Value
- -------------------------------------------------------------------------
Investment Companies (1.1%)
Money Market Funds (1.1%)
Merrimac Cash Series Fund-
Premium Class
1-day yield of 0.97% 2,007,320 $ 2,007
---------
Total Security Lending Collateral (cost: $16,475) 16,475
---------
Total Investment Securities (cost: $175,114) $ 192,259
=========
SUMMARY:
Investments, at value 104.9% $ 192,259
Liabilities in excess of other assets (4.9)% (8,982)
--------- ---------
Net assets 100.0% $ 183,277
========= =========
Percentage of
Net Assets Value
- -------------------------------------------------------------------------
INVESTMENTS BY INDUSTRY:
Commercial Banks 14.8% $ 26,957
Telecommunications 8.6% 15,782
Pharmaceuticals 6.8% 12,547
Electronic & Other Electric Equipment 6.4% 11,694
Automotive 5.3% 9,736
Business Services 3.8% 6,971
Computer & Data Processing Services 3.7% 6,760
Life Insurance 3.5% 6,412
Chemicals & Allied Products 3.2% 5,852
Oil & Gas Extraction 2.5% 4,578
Electronic Components & Accessories 2.2% 4,118
Industrial Machinery & Equipment 2.1% 3,935
Food & Kindred Products 2.0% 3,733
Communications Equipment 2.0% 3,718
Wholesale Trade Durable Goods 2.0% 3,657
Computer & Office Equipment 1.9% 3,430
Department Stores 1.8% 3,337
Radio & Television Broadcasting 1.7% 3,206
Holding & Other Investment Offices 1.7% 3,203
Security & Commodity Brokers 1.7% 3,158
Instruments & Related Products 1.7% 3,084
Transportation & Public Utilities 1.6% 3,016
Finance 1.4% 2,545
Petroleum Refining 1.4% 2,478
Electric Services 1.2% 2,156
Beer, Wine & Distilled Beverages 1.2% 2,117
Mortgage Bankers & Brokers 1.1% 2,052
Real Estate 1.0% 1,798
Hotels & Other Lodging Places 1.0% 1,758
Insurance 0.9% 1,591
Lumber & Constuction Materials 0.8% 1,421
Air Transportation 0.8% 1,405
Metal Mining 0.6% 1,105
Apparel & Accessory Stores 0.6% 1,099
Manufacturing Industries 0.5% 860
Management Services 0.4% 822
Apparel Products 0.4% 817
Water Transportation 0.4% 778
Printing & Publishing 0.4% 650
Medical Instruments & Supplies 0.4% 644
Primary Metal Industries 0.3% 538
Gas Production & Distribution 0.1% 266
----- --------
Investments, at value 95.9% 175,784
Short-term investments 9.0% 16,475
Liabilities in excess of other assets (4.9)% (8,982)
----- --------
Net assets 100.0% $183,277
===== ========
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX American Century International 5
IDEX American Century International
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
FORWARD FOREIGN CURRENCY CONTRACTS:
- ----------------------------------------------------------------------------
Amount in Net Unrealized
Bought Settlement U.S. Dollars Appreciation
Currency (Sold) Date Bought (Sold) (Depreciation)
- ----------------------------------------------------------------------------
Australian Dollar 31 11/03/2003 $ 22 $ --
Euro Dollar 247 11/03/2003 286 1
Euro Dollar (394) 11/04/2003 (456) (3)
British Pound 32 11/03/2003 54 --
British Pound (329) 11/04/2003 (556) (2)
Hungarian Forint 2,849 11/03/2003 13 --
Japanese Yen 20,511 11/04/2003 190 (3)
Japanese Yen 61,623 11/05/2003 567 (6)
Singapore Dollar (137) 11/03/2003 (79) --
South African Rand 62 11/05/2003 9 --
Swedish Krona 6,524 11/03/2003 840 (2)
Swiss Franc 716 11/03/2003 544 (7)
------- ------
$ 1,434 $ (22)
======= ======
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 (see
Note 1). The value at October 31, 2003, of all securities on loan is
$15,737.
(c) Cash collateral for the Repurchase Agreements, valued at $3,656, 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
CUFS Chess Unit of Foreign Securities
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 financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX American Century International 6
IDEX American Century International
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
At October 31, 2003
(all amounts except per share amounts in thousands)
Assets:
Investment securities, at value (cost: $175,114)
(including $15,737 of securities loaned) $ 192,259
Cash 8,427
Receivables:
Investment securities sold 3,561
Shares of beneficial interest sold 1,393
Interest 2
Dividends 150
Dividend reclaims receivable 47
Unrealized appreciation on forward foreign currency
contracts 1
Other 16
---------
205,856
---------
Liabilities:
Investment securities purchased 5,369
Accounts payable and accrued liabilities:
Shares of beneficial interest redeemed 333
Management and advisory fees 123
Distribution fees 67
Transfer agent fees 60
Due to custodian 15
Payable for securities on loan 16,475
Unrealized depreciation on forward foreign currency
contracts 22
Other 115
---------
22,579
---------
Net Assets $ 183,277
=========
Net Assets Consist of:
Shares of beneficial interest, unlimited shares authorized $ 201,085
Accumulated net investment income (loss) (2)
Accumulated net realized gain (loss) from investment
securities and foreign currency transactions (34,958)
Net unrealized appreciation (depreciation) on
investment securities 17,144
Translation of assets and liabilities denominated in
foreign currencies 8
---------
Net Assets $ 183,277
=========
Shares Outstanding:
Class A 18,944
Class B 2,782
Class C 778
Class L 74
Class M 414
Net Asset Value Per Share:
Class A $ 8.03
Class B 7.70
Class C 7.70
Class L 7.70
Class M 7.75
Maximum Offering Price Per Share (a):
Class A $ 8.50
Class M 7.83
(a) 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.
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the year ended October 31, 2003
(all amounts in thousands)
Investment Income:
Interest $ 12
Dividends 1,701
Income from loaned securities-net 59
Less withholding taxes on foreign dividends (199)
--------
1,573
--------
Expenses:
Management and advisory fees 784
Transfer agent fees 283
Printing and shareholder reports 56
Custody fees 276
Administration fees 35
Legal fees 4
Auditing and accounting fees 23
Trustees fees 6
Registration fees 103
Other 22
Distribution and service fees:
Class A 196
Class B 153
Class C 44
Class L 3
Class M 21
--------
Total expenses 2,009
Less:
Advisory fee waiver (473)
--------
Net expenses 1,536
--------
Net Investment Income (Loss) 37
--------
Net Realized Gain (Loss) from:
Investment securities (7,565)
Foreign currency transactions (717)
--------
(8,282)
--------
Net Unrealized Appreciation (Depreciation) on:
Investment securities 27,812
Translation of assets and liabilities denominated in
foreign currencies 7
--------
27,819
--------
Net Gain (Loss) on Investment Securities and Foreign
Currency Transactions 19,537
--------
Net Increase (Decrease) in Net Assets Resulting from
Operations $ 19,574
========
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX American Century International 7
IDEX American Century International
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended
(all amounts in thousands)
October 31, October 31,
2003 2002
----------- -----------
Increase (Decrease) In Net Assets From:
Operations:
Net investment income (loss) $ 37 $ (56)
Net realized gain (loss) from investment
securities and foreign currency
transactions (8,282) (3,308)
Net unrealized appreciation
(depreciation) on investment
securities and foreign currency
translation 27,819 (248)
--------- ---------
19,574 (3,612)
--------- ---------
Distributions to Shareholders:
From net investment income:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
--------- ---------
- -
--------- ---------
From net realized gains:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
--------- ---------
- -
--------- ---------
Capital Share Transactions:
Proceeds from shares sold:
Class A 166,990 22,709
Class B 6,031 2,202
Class C 3,919 3,264
Class L 499 -
Class M 1,197 2,126
--------- ---------
178,636 30,301
--------- ---------
Proceeds from fund acquisition:
Class A 11,819 951
Class B 15,256 1,646
Class C 5,043 646
Class L 43 -
Class M 2,412 362
--------- ---------
44,646 3,605
--------- ---------
Dividends and distributions reinvested:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
--------- ---------
- -
--------- ---------
Cost of shares redeemed:
Class A (63,205) (11,860)
Class B (5,349) (2,375)
Class C (2,519) (3,242)
Class L (119) -
Class M (770) (2,383)
--------- ---------
(71,962) (19,860)
--------- ---------
141,247 14,046
--------- ---------
Net increase (decrease) in net assets 160,821 10,434
--------- ---------
Net Assets:
Beginning of period 22,456 12,022
--------- ---------
End of period $ 183,277 $ 22,456
========= =========
Accumulated Net Investment Income (Loss) $ (2) $ (1)
========= =========
Share Activity:
Shares issued:
Class A 24,009 2,978
Class B 332 278
Class C 134 439
Class L 84 -
Class M 18 284
--------- ---------
24,577 3,979
--------- ---------
Shares issued-proceeds from fund
acquisition:
Class A 1,824 117
Class B 2,449 205
Class C 809 80
Class L 7 -
Class M 387 45
--------- ---------
5,476 447
--------- ---------
Shares issued-reinvested from
distributions:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
--------- ---------
- -
--------- ---------
Shares redeemed:
Class A (9,020) (1,585)
Class B (787) (309)
Class C (369) (430)
Class L (17) -
Class M (113) (314)
--------- ---------
(10,306) (2,638)
--------- ---------
Net increase (decrease) in shares
outstanding 19,747 1,788
========= =========
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX American Century International 8
IDEX American Century International
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share of beneficial interest outstanding throughout each period
----------------------------------------------------------------------------------------------------------
Investment Operations Distributions
------------------------------------------ -------------------------------------
Net Asset Net Asset
For the Value, Net Net Realized From Net From Net Value,
Period Beginning Investment and Unrealized Total Investment Realized Total End
Ended (d)(g) of Period Income (Loss) Gain (Loss) Operations Income Gains Distributions of Period
- ----------------------------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 $ 7.00 $ 0.02 $ 1.01 $ 1.03 $ - $ - $ - $ 8.03
10/31/2002 8.38 0.01 (1.39) (1.38) - - - 7.00
10/31/2001 12.76 0.05 (3.05) (3.00) - (1.38) (1.38) 8.38
10/31/2000 12.85 0.05 0.35 0.40 - (0.49) (0.49) 12.76
10/31/1999 10.77 0.03 2.05 2.08 - - - 12.85
- ----------------------------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 6.76 (0.03) 0.97 0.94 - - - 7.70
10/31/2002 8.15 (0.04) (1.35) (1.39) - - - 6.76
10/31/2001 12.53 (0.02) (2.98) (3.00) - (1.38) (1.38) 8.15
10/31/2000 12.70 (0.03) 0.35 0.32 - (0.49) (0.49) 12.53
10/31/1999 10.71 (0.06) 2.05 1.99 - - - 12.70
- ----------------------------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 6.76 (0.03) 0.97 0.94 - - - 7.70
10/31/2002 8.15 (0.04) (1.35) (1.39) - - - 6.76
10/31/2001 12.53 (0.02) (2.98) (3.00) - (1.38) (1.38) 8.15
10/31/2000 12.70 (0.03) 0.35 0.32 - (0.49) (0.49) 12.53
- ----------------------------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 6.73 (0.03) 1.00 0.97 - - - 7.70
- ----------------------------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 6.80 (0.02) 0.97 0.95 - - - 7.75
10/31/2002 8.18 (0.03) (1.35) (1.38) - - - 6.80
10/31/2001 12.57 (0.01) (3.00) (3.01) - (1.38) (1.38) 8.18
10/31/2000 12.73 (0.02) 0.35 0.33 - (0.49) (0.49) 12.57
10/31/1999 10.72 (0.04) 2.05 2.01 - - - 12.73
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
-----------------------------------------------------------------------
Ratio of Expenses
Net Assets, to Average Net Investment
For the End of Net Assets (a) Income (Loss) Portfolio
Period Total Period ----------------------- to Average Turnover
Ended (g) Return (c) (000's) Net (e) Total (f) Net Assets (a) Rate (b)
- ---------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 14.71% $ 152,086 1.78% 2.39% 0.23% 220%
10/31/2002 (16.49) 14,921 1.87 3.68 0.22 241
10/31/2001 (26.43) 5,209 1.55 2.77 0.47 129
10/31/2000 2.74 6,977 1.62 3.56 0.09 108
10/31/1999 19.12 4,902 1.90 3.53 (0.16) 72
- ---------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 13.91 21,421 2.44 3.05 (0.42) 220
10/31/2002 (17.09) 5,328 2.52 4.33 (0.43) 241
10/31/2001 (26.96) 5,003 2.20 3.42 (0.18) 129
10/31/2000 2.09 4,407 2.27 4.21 (0.56) 108
10/31/1999 18.45 1,527 2.55 4.18 (0.81) 72
- ---------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 13.91 5,990 2.44 3.05 (0.42) 220
10/31/2002 (17.09) 1,381 2.52 4.33 (0.43) 241
10/31/2001 (26.96) 938 2.20 3.42 (0.18) 129
10/31/2000 2.09 629 2.27 4.21 (0.56) 108
- ---------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 14.41 568 2.44 3.04 (0.42) 220
- ---------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 14.14 3,212 2.34 2.95 (0.32) 220
10/31/2002 (17.08) 826 2.42 4.23 (0.33) 241
10/31/2001 (26.88) 872 2.10 3.32 (0.08) 129
10/31/2000 2.19 840 2.17 4.11 (0.46) 108
10/31/1999 18.55 480 2.45 4.08 (0.71) 72
- ---------------------------------------------------------------------------------------------------------------
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX American Century International 9
IDEX American Century International
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (continued)
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 are not annualized.
(d) Per share information is calculated based on average number of shares
outstanding for the periods ended 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 (see note 2).
(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 Fund's offering of share classes C and L are as
follows:
Class C - November 1, 1999
Class L - November 11, 2002
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX American Century International 10
IDEX American Century International
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
At October 31, 2003
(all amounts in thousands)
NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
IDEX Mutual Funds is a Massachusetts business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company. IDEX American Century International ("the
Fund"), part of IDEX Mutual Funds, began operations on February 1, 1997.
On March 1, 2003, the Fund acquired all the net assets of IDEX Gabelli Global
Growth pursuant to a plan of reorganization approved by shareholders of IDEX
Gabelli Global Growth on February 12, 2003. The acquisition was accomplished by
a tax-free exchange of 5,476 shares of the Fund for the 6,190 shares of IDEX
Gabelli Global Growth outstanding on February 28, 2003. IDEX Gabelli Global
Growth's net assets at that date ($34,573), including ($10,073) of unrealized
depreciation, were combined with those of the Fund. Proceeds in connection with
the acquisition were as follows:
Shares Amount
--------------------
Proceeds in connection with the acquisition
Class A 1,824 $11,819
Class B 2,449 15,256
Class C 809 5,043
Class L 7 43
Class M 387 2,412
-------
$34,573
=======
On March 1, 2002, IDEX International Equity acquired all the net assets of IDEX
American Century International pursuant to a plan of reorganization approved by
shareholders of IDEX American Century International on February 22, 2002. The
acquisition was accomplished by a tax-free exchange of 447 shares of IDEX
American Century International (valued at $3,605) for the 449 shares of IDEX
International Equity outstanding on February 28, 2002. IDEX American Century
International's net assets at that date ($3,605), including $8 of unrealized
appreciation, were combined with those of IDEX International Equity. The
aggregate net assets of IDEX International Equity and IDEX American Century
International immediately before the acquisition were $11,514 and $3,605,
respectively. Immediately following the merger, IDEX International Equity was
renamed IDEX American Century International.
Shares Amount
-------------------
Proceeds in connection with the acquisition
Class A 117 $ 951
Class B 205 1,646
Class C 80 646
Class M 45 362
------
$3,605
======
In the normal course of business, the Fund enters into contracts that contain a
variety of representations and warranties and which provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown, as this would involve future claims that may be made against the Fund
and/or its affiliates that have not yet occurred. However, based on experience,
the Fund expects the risk of loss to be remote.
See the Prospectus and Statement of Additional Information for a description of
the Fund's investment objective.
In preparing the Fund's financial statements in accordance with accounting
principles generally accepted in the United States of America ("GAAP"),
estimates or assumptions (which could differ from actual results) may be used
that affect reported amounts and disclosures. The following policies were
consistently followed by the Fund, in accordance with GAAP.
Multiple class operations and expenses: The Fund currently offers five classes
of shares, each with a public offering price that reflects different sales
charges, if any, and expense levels. Effective November 11, 2002, Class C and M
shares were closed to new investors. Income, non-class specific expenses and
realized and unrealized gains and losses, are allocated daily to each class,
based upon the value of shares outstanding method as permitted under Rule 18f-3
of the 1940 Act. Each class bears its own specific expenses as well as a
portion of general, common expenses.
Security valuations: Fund investments traded on an exchange are valued at the
closing price on the day of valuation on the exchange where the security is
principally traded. With respect to securities traded on the NASDAQ INMS, such
closing price may be the last reported sales price or the NASDAQ Official
Closing Price.
Securities traded in the over-the-counter market and listed securities for
which no sale was reported on that date are valued at the last quoted bid
price.
Debt securities are valued by independent pricing services; however, those that
mature in sixty days or less are valued at amortized cost, which approximates
market.
Other securities for which quotations are not readily available are valued at
fair value determined in good faith, in accordance with procedures established
by and, under the supervision of the Board of Trustees and the Fund's Valuation
Committee.
Cash: The Fund may leave cash overnight in its cash account with the custodian,
Investors Bank & Trust Company ("IBT"). IBT has been contracted on behalf of
the Fund to invest the excess cash into a savings account, which at October 31,
2003, was paying an interest rate of 0.75%.
Securities lending: The Fund may lend securities to enhance fund earnings from
investing cash collateral received in making such loans to qualified borrowers
(typically broker/dealers). The Fund has engaged its custodian bank, IBT, as a
lending agent to administer its securities
IDEX Mutual Funds Annual Report 2003
IDEX American Century International 11
IDEX American Century International
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 1-(continued)
lending program. IBT earned $24 of program net income for its services. When
the Fund makes a security loan, it receives cash collateral as protection
against the risk that the borrower will default on the loan, and records an
asset for the cash invested collateral and a liability for the return of the
collateral.
Securities on loan are included in Investment securities at value on the
Statement of Assets and Liabilities and remain on the Schedule of Investments.
Loans of securities are required to be secured by collateral at least equal to
102% of the value of the securities at inception of the loan, and not less then
100% thereafter. The Fund may invest cash collateral in short-term money market
instruments including: U.S. Treasury Bills, U.S. agency obligations, commercial
paper, money market mutual funds, repurchase agreements and other highly rated,
liquid investments. During the life of securities loans, the collateral and
securities loaned remain subject to fluctuation in value. IBT marks to market
securities loaned and the collateral each business day. If additional
collateral is due (at least $1), IBT collects additional cash collateral from
the borrowers. Although securities loaned will be fully collateralized at all
times, IBT may experience delays in, or may be prevented from, recovering the
collateral on behalf of the Fund. The Fund may recall a loaned security
position at any time from the borrower through IBT. In the event the borrower
fails to timely return a recalled security, IBT may indemnify the Fund by
purchasing replacement securities for the Fund at its own expense and claiming
the collateral to fund such a purchase. IBT absorbs the loss if the collateral
value is not sufficient to cover the cost of the replacement securities. If
replacement securities are not available, IBT will credit the equivalent cash
value to the Fund.
Income from securities lending is included in the Statement of Operations. The
amounts of collateral and value of securities on loan are included in the
Statement of Assets and Liabilities as well as in the Schedule of Investments.
Security transactions and investment income: Security transactions are recorded
on the trade date. Security gains and losses are calculated on the specific
identification basis. Dividend income is recorded on the ex-dividend date or,
in the case of foreign securities, as soon as the Fund is informed of the
ex-dividend date. Interest income, including accretion of discounts and
amortization of premiums, is recorded on the accrual basis commencing on the
settlement date.
Foreign currency denominated investments: The accounting records of the Fund
are maintained in U.S. dollars. Securities and other assets and liabilities
denominated in foreign currencies are translated into U.S. dollars at the
closing exchange rate each day. The cost of foreign securities is translated at
the exchange rate in effect when the investment was acquired. The Fund combines
fluctuations from currency exchange rates and fluctuations in value when
computing net realized and unrealized gains or losses from investments.
Net foreign currency gains and losses resulting from changes in exchange rates
include: 1) foreign currency fluctuations between trade date and settlement
date of investment security transactions; 2) gains and losses on forward
foreign currency contracts; and 3) the difference between the receivable
amounts of interest and dividends recorded in the accounting records in U.S.
dollars and the amounts actually received.
Foreign currency denominated assets may involve risks not typically associated
with domestic transactions, including unanticipated movements in exchange
currency rates, the degree of government supervision and regulation of security
markets, and the possibility of political or economic instability.
Forward foreign currency contracts: The Fund may enter into forward foreign
currency contracts to hedge against exchange rate risk arising from investments
in securities denominated in foreign currencies. Contracts are valued at the
contractual forward rate and are marked to market daily, with the change in
value recorded as an unrealized gain or loss. When the contracts are closed a
realized gain or loss is incurred. Risks may arise from changes in value of the
underlying currencies and from the possible inability of counterparties to meet
the terms of their contracts. Open forward currency contracts at October 31,
2003, are listed in the Schedule of Investments.
Dividend distributions: Distributions to shareholders are recorded on the
ex-dividend date and are determined in accordance with Federal income tax
regulations which may differ from GAAP.
NOTE 2. RELATED PARTY TRANSACTIONS
AEGON/Transamerica Fund Advisers, Inc. ("ATFA") is the Fund's investment
adviser. AEGON/Transamerica Fund Services, Inc. ("ATFS") is the Fund's
administrator. AFSG Securities Corp. ("AFSG") is the Fund's
distributor/principal underwriter. AEGON/Transamerica Investor Services, Inc.
("ATIS") is the 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. AUSA and WRL are wholly owned indirect
subsidiaries of AEGON NV, a Netherlands corporation.
IDEX Mutual Funds Annual Report 2003
IDEX American Century International 12
IDEX American Century International
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 2-(continued)
The following schedule reflects the percentage of fund assets owned by
affiliated mutual funds (ie: through the asset allocation funds)
Net % of
Assets Net Assets
-------- -----------
IDEX Asset Allocation
Conservative Portfolio 5,869 3%
IDEX Asset Allocation Growth 34,622 19%
IDEX Asset Allocation Moderate
Growth 64,048 35%
IDEX Asset Allocation Moderate 32,030 17%
----
74%
Investment advisory fees: The Fund pays management fees to ATFA based on
average daily net assets ("ANA") at the following stated break points from
November 1, 2002 to February 28, 2003:
1.00% of the first $50 million of ANA
0.95% of the next $100 million of ANA
0.90% of the next $350 million of ANA
0.85% of ANA over $500 million
From March 1, 2003 on:
1.00% of the first $50 million of ANA
0.95% of the next $100 million of ANA
0.90% of the next $350 million of ANA
0.85% of the next $500 million of ANA
0.80% of ANA over $1 billion
ATFA currently voluntarily waives its advisory fee and will reimburse the Fund
to the extent that operating expenses, excluding 12b-1 fees, exceed the
following stated annual limit from November 1, 2002 to February 28, 2003:
1.60% Expense Limit
From March 1, 2003 on:
1.40% Expense Limit
If total fund expenses fall below the annual expense limitations agreed to by
the adviser within the succeeding three years, the Fund may be required to pay
the advisor a portion or all of the waived advisory fees.
Advisory Fee Available for
Waived Recapture Through
-------------- ------------------
Fiscal Year 2003 473 10/31/2006
Distribution and service fees: The Fund has a 12b-1 distribution plan under the
1940 Act pursuant to which an annual fee, based on average daily net assets, is
paid to the distributor for various disbursements such as broker-dealer account
servicing fees and other promotional expenses of the Fund. The 12b-1 fee for
the Fund is comprised of a 0.25% service fee and the remaining amount is an
asset-based sales charge/distribution fee. The Fund is authorized under the
12b-1 plan to pay fees on each class up to the following limits:
Class A 0.35%
Class B 1.00%
Class C 1.00%
Class L 1.00%
Class M 0.90%
Underwriter commissions relate to front-end sales charges imposed for Class A
and M shares and contingent deferred sales charges from Classes B, L, M, and
certain A share redemptions. For the year ended October 31, 2003, the
underwriter commissions were as follows:
Received by Underwriter $ 47
Retained by Underwriter 1
Contingent Sales Charges 99
Administrative services: The Fund has entered into an agreement with ATFS for
financial and legal fund administration services, which include such items as
compliance, expenses, financial statements and other reporting, distributions,
tax returns, prospectus preparation, board of trustees meeting support and
other legal matters. Transfer agent fees are reflected separately from
Administration fees on the Statement of Operations. The Legal fees on the
Statement of Operations are for fees paid to external legal counsel. ATFS
provides its services to the Fund at a cost and is reimbursed monthly.
Transfer agent fees: The Fund incurs ATIS annual per-account charges (not in
thousands) of $20.00 for each open shareholder account and $1.63 for each
closed account maintained, and certain out of pocket expenses.
Brokerage commissions: Brokerage commissions incurred on security transactions
placed with an affiliate of the sub-adviser for the year ended October 31,
2003, were $17.
Deferred compensation plan: Each eligible Fund Trustee may elect participation
in the Deferred Compensation Plan ("the Plan"). Under the Plan, such Trustees
may defer payment of a percentage of their total fees earned as a Fund Trustee.
These deferred amounts may be invested in any IDEX Fund. At October 31, 2003,
the value of invested plan amounts was $2. Invested plan amounts and the total
liability for deferred compensation to the Trustees under the Plan at October
31, 2003, are included in Net assets in the accompanying Statement of Assets
and Liabilities.
IDEX Mutual Funds Annual Report 2003
IDEX American Century International 13
IDEX American Century International
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 3. INVESTMENT TRANSACTIONS
The cost of securities purchased and proceeds from securities sold (excluding
short-term securities) for the year ended October 31, 2003, are as follows:
Purchases of securities:
Long-Term excluding U.S. Government $ 268,040
U.S. Government -
Proceeds from maturities and sales of securities:
Long-Term excluding U.S. Government 165,844
U.S. Government -
NOTE 4. FEDERAL INCOME TAX MATTERS
The Fund has not made any provision for federal income or excise taxes due to
its policy to distribute all of its taxable income and capital gains to its
shareholders and otherwise qualify as a regulated investment company under the
Internal Revenue Code. Income and capital gain distributions are determined in
accordance with income tax regulations, which may differ from GAAP. These
differences are primarily due to differing treatments for items including, but
not limited to, wash sales, foreign currency transactions, net operating losses
and capital loss carryforwards.
Reclassifications between Undistributed net investment income (loss),
Undistributed net realized capital gains (loss) and Shares of beneficial
interest are made to reflect income and gains available for distribution under
federal tax regulations. Results of operations and net assets are not effected
by these reclassifications. These reclassifications are as follows:
Shares of beneficial interest, unlimited shares
authorized $ 18,283
Undistributed net investment income (loss) (38)
Accumulated net realized gain (loss) from
investment securities and foreign currency
transactions (18,245)
The tax basis components of distributable earnings as of October 31, 2003, are
as follows:
Undistributed Ordinary Income $ -
=========
Undistributed Long-term Capital Gains $ -
=========
Capital Loss Carryforward $ (34,407)
=========
Net Unrealized Appreciation (Depreciation) $ 16,573
=========
The capital loss carryforwards are available to offset future realized capital
gains through the periods listed:
Capital Loss
Carryforward Available through
- -------------- ------------------
$ 8,205 October 31, 2008
17,179 October 31, 2009
1,005 October 31, 2010
8,018 October 31, 2011
The aggregate cost of investments and composition of unrealized appreciation
(depreciation) for federal income tax purposes as of October 31, 2003, are as
follows:
Federal Tax Cost Basis $ 175,686
=========
Unrealized Appreciation $ 18,561
Unrealized (Depreciation) (1,988)
---------
Net Unrealized Appreciation (Depreciation) $ 16,573
=========
IDEX Mutual Funds Annual Report 2003
IDEX American Century International 14
- --------------------------------------------------------------------------------
Report of Independent Certified Public Accountants
To the Board of Trustees and Shareholders of
IDEX American Century International
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of IDEX American Century
International (the "Fund") (one of the portfolios constituting the IDEX Mutual
Funds) at October 31, 2003, and the results of its operations, the changes in
its net assets and the financial highlights for each of the periods indicated,
in conformity with accounting principles generally accepted in the United
States of America. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of the
Fund's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with auditing standards generally accepted
in the United States of America, which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits, which included confirmation of securities at October
31, 2003 by correspondence with the custodian and brokers, provide a reasonable
basis for our opinion.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Tampa, Florida
December 18, 2003
IDEX Mutual Funds Annual Report 2003
IDEX American Century International 15
IDEX Asset Allocation-Conservative Portfolio
- --------------------------------------------------------------------------------
MARKET ENVIRONMENT
The war in Iraq, rebuilding Afghanistan, continuing threats of terrorism and
concerns of inflation are just a few of the many factors that currently affect
the market environment.
During the twelve months ended October 31, 2003, the Federal Reserve Board
("Fed") reduced the Federal Funds rate by 25 basis points to a 45-year low.
However, an accelerated money supply, tax cuts, low interest rates, a declining
dollar and the start of the presidential election cycle are providing a
powerful stimulus to the U.S. economy. September and October economic data
indicate that unemployment levels have stabilized and capital expenditures by
businesses are on the rise.
The ten-year Treasury bond yield rose over 140 basis points as the market
adjusted to the prospects of faster economic growth and possible end of the
Fed's easing cycle.
PERFORMANCE
For the year ended October 31, 2003, IDEX Asset Allocation- Conservative
Portfolio returned 18.18%. By comparison its benchmark, the Lehman Brothers
Aggregate Bond Index, returned 4.90%.
STRATEGY REVIEW
IDEX Asset Allocation-Conservative Portfolio is a collection of underlying
portfolios, designed for maximum diversification by offering investors exposure
not only to a variety of securities, but to several money managers with
different approaches to security selection.
A sampling of the portfolio's top holdings shows a distinct defensive strategy.
Three of the largest holdings as of October 31, 2003 were fixed income
portfolios: IDEX Transamerica Conservative High-Yield Bond, IDEX Transamerica
Convertible Securities and IDEX Salomon Investors Value.
This portfolio comprised nineteen underlying funds as of October 31, 2003, each
with a different management team following its unique approach to investment
selection.
Investment Committee
AEGON/Transamerica Fund Advisers, Inc.
IDEX Mutual Funds Annual Report 2003
IDEX Asset Allocation-Conservative Portfolio 1
IDEX Asset Allocation-Conservative Portfolio
- --------------------------------------------------------------------------------
Comparison of change in value of $10,000 investment in Class A shares and its
comparative index.
Growth of $10,000
Inception of 3/1/02 through 10/31/03
Investment less sales charges - $9,452
[The following table was depicted as a mountain chart in the printed material.]
DATE Class A LBAB
----------------- --------- ---------
3/1/2002 9,452 10,000
3/31/2002 9,519 9,834
6/30/2002 9,046 10,197
9/30/2002 8,526 10,664
12/31/2002 8,863 10,832
3/31/2003 8,857 10,983
6/30/2003 9,727 11,257
9/30/2003 9,999 11,241
10/31/2003 10,299 11,136
Average Annual Total Return for Periods Ended 10/31/03
- --------------------------------------------------------------------------------
From Inception
1 year Inception Date
- --------------------------------------------------------
Class A (NAV) 18.18% 5.27% 3/1/02
Class A (POP) 11.68% 1.77% 3/1/02
LBAB(1) 4.90% 6.66% 3/1/02
- --------------------------------------------------------
Class B (NAV) 17.38% 4.57% 3/1/02
Class B (POP) 12.38% 2.23% 3/1/02
- --------------------------------------------------------
Class C (NAV) 17.38% 4.57% 3/1/02
- --------------------------------------------------------
Class L (NAV) - 17.25% 11/11/02
Class L (POP) - 15.25% 11/11/02
- --------------------------------------------------------
Class M (NAV) 17.56% 4.67% 3/1/02
Class M (POP) 15.39% 4.04% 3/1/02
- --------------------------------------------------------
NOTES
(1) The Lehman Brothers Aggregate Bond (LBAB) 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 Micropal(R)(C) 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 shares, (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.
Periods less than 1 year represent total return and are not annualized.
This material must be preceded or accompanied by a current prospectus, which
includes specific contents regarding the investment objectives and policies of
this fund.
IDEX Mutual Funds Annual Report 2003
IDEX Asset Allocation-Conservative Portfolio 2
IDEX Asset Allocation-Conservative Portfolio
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
At October 31, 2003
(all amounts except share amounts in thousands)
Shares Value
--------------- ------------
INVESTMENT COMPANIES (99.1%) (b)
Aggressive Equity (14.1%)
IDEX Isabelle Small Cap Value (a) 836,407 $ 10,823
IDEX T. Rowe Price Health Sciences (a) 535,276 5,428
IDEX T. Rowe Price Small Cap (a) 829,121 8,797
IDEX Transamerica Growth
Opportunities (a) 1,748,584 10,404
Capital Preservation (4.0%)
IDEX Transamerica Money Market 10,070,937 10,071
Fixed-Income (49.9%)
IDEX Janus Flexible Income 1,350,273 13,786
IDEX PIMCO Real Return TIPS 1,073,221 10,840
IDEX PIMCO Total Return 1,077,883 11,339
IDEX Transamerica Conservative
High-Yield Bond 5,238,360 47,564
IDEX Transamerica Convertible Securities 3,692,302 41,797
Growth Equity (21.2%)
IDEX Great Companies-Technology (a) 2,502,814 9,035
IDEX Janus Growth (a) 271,147 5,350
Growth Equity (continued)
IDEX Salomon All Cap (a) 1,053,804 $ 14,701
IDEX Salomon Investors Value 1,254,525 15,694
IDEX T. Rowe Price Tax-Efficient Growth (a) 492,191 4,848
IDEX Transamerica Equity (a) 501,747 3,442
Specialty-Real Estate (5.5%)
IDEX Clarion Real Estate Securities 1,116,354 13,675
World Equity (4.4%)
IDEX American Century International (a) 730,864 5,869
IDEX Templeton Great Companies Global (a) 748,581 5,165
---------
Total Investment Companies (cost: $226,488)
248,628
---------
Total Investment Securities (cost: $226,488)
$ 248,628
=========
SUMMARY:
Investments, at value 99.1% $ 248,628
Other assets in excess of liabilities 0.9% 2,225
---------- ---------
Net assets 100.0% $ 250,853
========== =========
NOTES TO SCHEDULE OF INVESTMENTS:
(a) No dividends were paid during the preceding twelve months.
(b) The Fund invests its assets in Class A shares of underlying IDEX Mutual
Funds, which are affiliates of the Fund.
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Asset Allocation-Conservative Portfolio 3
IDEX Asset Allocation-Conservative Portfolio
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
At October 31, 2003
(all amounts except per share amounts in thousands)
Assets:
Investment in affiliated mutual funds, at value (cost:
$ 226,488) $ 248,628
Receivables:
Investment securities sold 75
Shares of beneficial interest sold 2,747
Other 3
---------
251,453
---------
Liabilities:
Accounts payable and accrued liabilities:
Shares of beneficial interest redeemed 338
Management and advisory fees 30
Distribution fees 100
Transfer agent fees 34
Due to custodian 75
Other 23
---------
600
---------
Net Assets $ 250,853
=========
Net Assets Consist of:
Shares of beneficial interest, unlimited shares authorized $ 227,856
Undistributed net investment income (loss) 377
Undistributed net realized gain (loss) from investment in
affiliated mutual funds 480
Net unrealized appreciation (depreciation) on investment
in affiliated mutual funds 22,140
---------
Net Assets $ 250,853
=========
Shares Outstanding:
Class A 5,551
Class B 7,984
Class C 1,490
Class L 7,799
Class M 695
Net Asset Value Per Share:
Class A $ 10.67
Class B 10.66
Class C 10.66
Class L 10.66
Class M 10.66
Maximum Offering Price Per Share (a):
Class A $ 11.29
Class M 10.77
(a) 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.
- ---------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the year ended October 31, 2003
(all amounts in thousands)
Investment Income:
Interest $ 2
Dividends from affiliated mutual funds 3,015
--------
3,017
--------
Expenses:
Management and advisory fees 137
Transfer agent fees 193
Printing and shareholder reports 23
Custody fees 32
Administration fees 37
Legal fees 6
Auditing and accounting fees 18
Trustees fees 8
Registration fees 96
Other fees 5
Distribution and service fees:
Class A -
Class B 365
Class C 99
Class L 207
Class M 36
--------
Total expenses 1,262
--------
Net Investment Income (Loss) 1,755
--------
Net Realized and Unrealized Gain (Loss):
Realized gain (loss) from investment in affiliated
mutual funds 581
Increase (decrease) in unrealized appreciation
(depreciation) on investment in affiliated
mutual funds 22,911
--------
Net Gain (Loss) on Investment in Affiliated Mutual Funds 23,492
--------
Net Increase (Decrease) in Net Assets Resulting from
Operations $ 25,247
========
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Asset Allocation-Conservative Portfolio 4
IDEX Asset Allocation-Conservative Portfolio
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
For the year or period ended
(all amounts in thousands)
October 31, October 31,
2003 2002(a)
---------- ----------
Increase (Decrease) In Net Assets From:
Operations:
Net investment income (loss) $ 1,755 $ 95
Net realized gain (loss) from investment
in affiliated mutual funds 581 (158)
Net unrealized appreciation
(depreciation) on investment in
affiliated mutual funds 22,911 (771)
--------- ---------
25,247 (834)
--------- ---------
Distributions to Shareholders:
From net investment income:
Class A (442) --
Class B (509) --
Class C (162) --
Class L (228) --
Class M (78) --
--------- ---------
(1,419) --
--------- ---------
From net realized gains:
Class A -- --
Class B -- --
Class C -- --
Class L -- --
Class M -- --
--------- ---------
--------- ---------
--------- ---------
Capital Share Transactions:
Proceeds from shares sold:
Class A 58,579 10,560
Class B 66,574 25,680
Class C 10,727 12,651
Class L 83,907 --
Class M 3,386 5,738
--------- ---------
223,173 54,629
--------- ---------
Dividends and distributions reinvested:
Class A 383 --
Class B 420 --
Class C 127 --
Class L 156 --
Class M 69 --
--------- ---------
1,155 --
--------- ---------
Cost of shares redeemed:
Class A (13,815) (883)
Class B (14,758) (2,125)
Class C (9,371) (495)
Class L (6,938) --
Class M (2,144) (569)
--------- ---------
(47,026) (4,072)
--------- ---------
177,302 50,557
--------- ---------
Net increase (decrease) in net assets 201,130 49,723
--------- ---------
Net Assets:
Beginning of year 49,723 --
--------- ---------
End of year $ 250,853 $ 49,723
========= =========
Undistributed Net Investment Income (Loss) $ 377 $ 98
========= =========
Share Activity:
Shares issued:
Class A 5,870 1,124
Class B 6,893 2,765
Class C 1,125 1,355
Class L 8,469 --
Class M 356 615
--------- ---------
22,713 5,859
--------- ---------
Shares issued-reinvested from distributions:
Class A 39 --
Class B 43 --
Class C 13 --
Class L 15 --
Class M 7 --
--------- ---------
117 --
--------- ---------
Shares redeemed:
Class A (1,387) (95)
Class B (1,484) (233)
Class C (949) (54)
Class L (685) --
Class M (220) (63)
--------- ---------
(4,725) (445)
--------- ---------
Net increase (decrease) in shares
outstanding 18,105 5,414
========= =========
(a) Commenced operations on March 1, 2002.
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Asset Allocation-Conservative Portfolio 5
IDEX Asset Allocation-Conservative Portfolio
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share of beneficial interest outstanding throughout each period
-----------------------------------------------------------------------------------------------------------
Investment Operations Distributions
Net Asset -------------------------------------------- --------------------------------------- Net Asset
For the Value, Net Net Realized From Net From Net Value,
Period Beginning Investment and Unrealized Total Investment Realized Total End
Ended (d)(g) of Period Income (Loss) Gain (Loss) Operations Income Gains Distributions of Period
- ------------------------------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 $ 9.22 $0.18 $ 1.47 $ 1.65 $(0.20) $ - $(0.20) $10.67
10/31/2002 10.00 0.07 (0.85) (0.78) - - - 9.22
- ------------------------------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 9.18 0.11 1.47 1.58 (0.10) - (0.10) 10.66
10/31/2002 10.00 0.03 (0.85) (0.82) - - - 9.18
- ------------------------------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 9.18 0.11 1.47 1.58 (0.10) - (0.10) 10.66
10/31/2002 10.00 0.03 (0.85) (0.82) - - - 9.18
- ------------------------------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 9.19 0.11 1.46 1.57 (0.10) - (0.10) 10.66
- ------------------------------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 9.18 0.12 1.48 1.60 (0.12) - (0.12) 10.66
10/31/2002 10.00 0.04 (0.86) (0.82) - - - 9.18
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
-----------------------------------------------------------------------
Ratio of Expenses
Net Assets, to Average Net Investment
For the End of Net Assets (a) Income (Loss) Portfolio
Period Total Period ----------------------- to Average Turnover
Ended (g) Return (c) (000's) Net (e) Total (f) Net Assets (a) Rate (b)
- ---------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 18.18% $ 59,250 0.41% 0.41% 1.80% 22%
10/31/2002 (7.80) 9,482 0.45 1.21 1.27 8
- ---------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 17.38 85,134 1.06 1.06 1.15 22
10/31/2002 (8.20) 23,229 1.10 1.86 0.62 8
- ---------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 17.38 15,888 1.06 1.06 1.15 22
10/31/2002 (8.20) 11,940 1.10 1.86 0.62 8
- ---------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 17.25 83,165 1.06 1.06 1.15 22
- ---------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 17.56 7,416 0.96 0.96 1.25 22
10/31/2002 (8.20) 5,072 1.00 1.76 0.72 8
- ---------------------------------------------------------------------------------------------------------------
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 are not annualized.
(d) Per share information is calculated based on average number of shares
outstanding.
(e) Ratio of Net Expenses to Average Net Assets is net of fee waivers and
reimbursements by the investment adviser, if any (see note 2).
(f) Ratio of Total Expenses to Average Net Assets includes all expenses before
fee waivers and reimbursements by the investment adviser.
(g) IDEX Asset Allocation-Conservative Portfolio ("the Fund") commenced
operations on March 1, 2002. The inception date for the Fund's offering of
share Class L is November 11, 2002.
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Asset Allocation-Conservative Portfolio 6
IDEX Asset Allocation-Conservative Portfolio
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
At October 31, 2003
(all amounts in thousands)
NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
IDEX Mutual Funds is a Massachusetts business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company. IDEX Asset Allocation-Conservative Portfolio
("the Fund"), part of IDEX Mutual Funds, began operations on March 1, 2002. On
March 3, 2003, the Fund changed its name from IDEX Conservative Asset Allocation
to IDEX Asset Allocation-Conservative Portfolio.
In the normal course of business, the Fund enters into contracts that contain a
variety of representations and warranties and which provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown, as this would involve future claims that may be made against the Fund
and/or its affiliates that have not yet occurred. However, based on experience,
the Fund expects the risk of loss to be remote.
See the Prospectus and Statement of Additional Information for a description of
the Fund's investment objective.
In preparing the Fund's financial statements in accordance with accounting
principles generally accepted in the United States of America ("GAAP"),
estimates or assumptions (which could differ from actual results) may be used
that affect reported amounts and disclosures. The following policies were
consistently followed by the Fund, in accordance with GAAP.
Multiple class operations and expenses: The Fund currently offers five classes
of shares, each with a public offering price that reflects different sales
charges, if any, and expense levels. Effective November 11, 2002, Class C and M
shares were closed to new investors. Income, non-class specific expenses and
realized and unrealized gains and losses, are allocated daily to each class,
based upon the value of shares outstanding method as permitted under Rule 18f-3
of the 1940 Act. Each class bears its own specific expenses as well as a portion
of general, common expenses.
Security valuations: The Fund's investments are valued at the net asset values
of the underlying portfolios of IDEX Mutual Funds. The net asset values of the
underlying portfolios are determined at the close of the New York Stock Exchange
(generally 4:00 p.m. eastern time) on the valuation date.
Cash: At October 31, 2003 the Fund was in a cash overdraft. The amount of the
cash overdraft is included as Due to Custodian in the accompanying Statements of
Assets and Liabilities. The Fund pays monthly overdraft charges based on the
average daily overdraft balance during the month. The average balance is
multiplied by a rate equal to 0.50% plus the federal funds rate. As of October
31, 2003, this rate was 0.75%.
Security transactions and investment income: Security transactions are recorded
on the trade date. Security gains and losses are calculated on the specific
identification basis. Dividend income is recorded on the ex-dividend date.
Dividends and net realized gain (loss) from investment securities for the Fund
are from investments in shares of affiliated investment companies.
Dividend distributions: Distributions to shareholders are recorded on the
ex-dividend date and are determined in accordance with Federal income tax
regulations which may differ from GAAP.
NOTE 2. RELATED PARTY TRANSACTIONS
AEGON/Transamerica Fund Advisers, Inc. ("ATFA") is the Fund's investment
adviser. AEGON/Transamerica Fund Services, Inc. ("ATFS") is the Fund's
administrator. AFSG Securities Corp. ("AFSG") is the Fund's
distributor/principal underwriter. AEGON/Transamerica Investor Services, Inc.
("ATIS") is the 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. AUSA and WRL are wholly owned indirect subsidiaries of AEGON
NV, a Netherlands corporation.
ATFA has entered into consultant agreements with Morningstar Associates, LLC to
provide investment services to the Fund. ATFA compensates Morningstar
Associates, LLC as described in the Prospectus.
Transamerica Investment Management, LLC and Great Companies, LLC are affiliates
of the Fund and are sub-advisors to other funds within IDEX Mutual Funds.
Investment advisory fees: The Fund pays management fees to ATFA based on average
daily net assets ("ANA") at the following rate:
0.10% of ANA
ATFA currently voluntarily waives its advisory fee and will reimburse the Fund
to the extent that operating expenses, excluding 12b-1 fees, exceed the
following stated annual limit:
0.45% Expense Limit
If total fund expenses fall below the annual expense limitations agreed to by
the adviser within the succeeding three years, the Fund may be required to pay
the advisor a portion or all of the waived advisory fees.
IDEX Mutual Funds Annual Report 2003
IDEX Asset Allocation-Conservative Portfolio 7
IDEX Asset Allocation-Conservative Portfolio
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 2-(continued)
Advisory Fee Available for
Waived Recapture Through
-------------- ------------------
Fiscal Year 2003 - 10/31/2006
Fiscal Year 2002 93 10/31/2005
For the year ended October 31, 2003, ATFA has voluntarily agreed to waive the
recapture of $59 reimbursed expenses that were otherwise eligible for recapture.
Distribution and service fees: The Fund has a 12b-1 distribution plan under the
1940 Act pursuant to which an annual fee, based on average daily net assets, is
paid to the distributor for various disbursements such as broker-dealer account
servicing fees and other promotional expenses of the Fund. The Fund is
authorized under the 12b-1 plan to pay fees on each class up to the following
limits:
Class A N/A
Class B 0.65%
Class C 0.65%
Class L 0.65%
Class M 0.55%
In addition, the underlying Fund's Class A shares in which the Fund invests
impose a 0.35% 12b-1 fee. To avoid duplication of 12b-1 fees, each class of fund
shares of the Fund has reduced the 12b-1 fees by the amount of the underlying
funds' Class A 12b-1 fees.
Underwriter commissions relate to front-end sales charges imposed for Class A
and M shares and contingent deferred sales charges from Classes B, L, M and
certain A share redemptions. For the year ended October 31, 2003, the
underwriter commissions were as follows:
Received by Underwriter $ 1,176
Retained by Underwriter 155
Contingent Sales Charges 266
Administrative services: The Fund has entered into an agreement with ATFS for
financial and legal fund administration services, which include such items as
compliance, expenses, financial statements and other reporting, distributions,
tax returns, prospectus preparation, board of trustees meeting support and other
legal matters. Transfer agent fees are reflected separately from Administration
fees on the Statement of Operations. The Legal fees on the Statement of
Operations are for fees paid to external legal counsel. ATFS provides its
services to the Fund at a cost and is reimbursed monthly.
Transfer agent fees: The Fund incurs ATIS annual per-account charges (not in
thousands) of $20.00 for each open shareholder account and $1.63 for each closed
account maintained, and certain out of pocket expenses.
Deferred compensation plan: Each eligible Fund Trustee may elect participation
in the Deferred Compensation Plan ("the Plan"). Under the Plan, such Trustees
may defer payment of a percentage of their total fees earned as a Fund Trustee.
These deferred amounts may be invested in any IDEX Fund. At October 31, 2003,
the value of invested plan amounts was $2. Invested plan amounts and the total
liability for deferred compensation to the Trustees under the Plan at October
31, 2003, are included in Net assets in the accompanying Statement of Assets and
Liabilities.
NOTE 3. INVESTMENT TRANSACTIONS
The cost of securities purchased and proceeds from securities sold (excluding
short-term securities) for the year ended October 31, 2003, are as follows:
Purchases of securities:
Long-Term excluding U.S. Government $ 207,676
U.S. Government -
Proceeds from maturities and sales of securities:
Long-Term excluding U.S. Government 30,378
U.S. Government -
NOTE 4. FEDERAL INCOME TAX MATTERS
The Fund has not made any provision for federal income or excise taxes due to
its policy to distribute all of its taxable income and capital gains to its
shareholders and otherwise qualify as a regulated investment company under the
Internal Revenue Code. Income and capital gain distributions are determined in
accordance with income tax regulations, which may differ from GAAP. These
differences are primarily due to differing treatments for items including, but
not limited to, wash sales and capital loss carryforwards.
Reclassifications between Undistributed net investment income (loss),
Undistributed net realized capital gains (loss) and Shares of beneficial
interest are made to reflect income and gains available for distribution under
federal tax regulations. Results of operations and net assets are not effected
by these reclassifications. These reclassifications are as follows:
Shares of beneficial interest, unlimited
shares authorized $ -
Undistributed net investment income (loss) (57)
Undistributed net realized gain (loss) from
investment in mutual funds 57
Net unrealized appreciation (depreciation) on
investment mutual funds
The tax character of distributions paid may differ from the character of
distributions shown in the Statements of Changes in Net Assets
primarily due to short-term gains being treated as ordinary income for tax
purposes. The tax character of distributions paid during 2003 was as follows:
2003 Distributions paid from:
Ordinary income $ 1,419
Long-term capital gains -
IDEX Mutual Funds Annual Report 2003
IDEX Asset Allocation-Conservative Portfolio 8
IDEX Asset Allocation-Conservative Portfolio
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 4-(continued)
The tax basis components of distributable earnings as of October 31, 2003, are
as follows:
Undistributed Ordinary Income $ 1,012
========
Undistributed Long-term Capital Gains $ 5
========
Capital Loss Carryforward $ -
========
Net Unrealized Appreciation (Depreciation) $ 21,979
========
The capital loss carryforward utilized as of October 31, 2003 was $151. The
aggregate cost of investments and composition of unrealized appreciation
(depreciation) for federal income tax purposes as of October 31, 2003, are as
follows:
Federal Tax Cost Basis $ 226,649
=========
Unrealized Appreciation $ 21,979
Unrealized (Depreciation) -
---------
Net Unrealized Appreciation (Depreciation) $ 21,979
=========
Supplemental Tax Information
(unaudited)
For tax purposes, the Fund has made a Long-Term Capital Gain Designation of
$0.00022 per share for the year ended October 31, 2003.
For dividends paid during the year ended October 31, 2003, the Fund designates
qualified dividend income to the maximum extent allowable.
For corporate shareholders, 5% of investment income (dividend income plus
short-term gains, if any) qualifies for the dividends received deduction.
The information and distributions reported herein may differ from the
information and distributions taxable to the shareholders for the calendar year
ending December 31, 2003. Complete information will be computed and reported in
conjunction with your 2003 Form 1099-DIV.
IDEX Mutual Funds Annual Report 2003
IDEX Asset Allocation-Conservative Portfolio 9
- --------------------------------------------------------------------------------
Report of Independent Certified Public Accountants
To the Board of Trustees and Shareholders of
IDEX Asset Allocation-Conservative Portfolio
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of IDEX Asset Allocation-Conservative
Portfolio (the "Fund") (one of the portfolios constituting the IDEX Mutual
Funds) at October 31, 2003, and the results of its operations, the changes in
its net assets and the financial highlights for each of the periods indicated,
in conformity with accounting principles generally accepted in the United States
of America. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Fund's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with auditing standards generally accepted in the
United States of America, which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at October 31, 2003 by
correspondence with the custodian and brokers, provide a reasonable basis for
our opinion.
/s/ PRICEWATERHOUSECOOPERS LLP
PricewaterhouseCoopers LLP
Tampa, Florida
December 18, 2003
IDEX Mutual Funds Annual Report 2003
IDEX Asset Allocation-Conservative Portfolio 10
IDEX Asset Allocation-Growth Portfolio
- --------------------------------------------------------------------------------
MARKET ENVIRONMENT
During the past twelve months, we have seen the overall market move from a
pessimistic "wait and see" attitude to a slightly more optimistic "let's begin
to buy" attitude. Twelve months ago the world was waiting to see what events
were going to happen in Iraq, North Korea and Venezuela. Whether the oil prices
were going to fluctuate and whether or not interest rates would continue to
decline. Many people were touting the gloom and doom deflation theory while
others sat patiently and looked for bargains.
As the year progressed, the overall uncertainty began to wane as the allies
quickly defeated the Iraqi army; the oil prices stabilized and the world didn't
implode. The Federal Reserve Board lowered the short-term interest rates to
40-year lows in an effort to increase short-term borrowing and motivate business
spending. Companies began to work more efficiently as productivity increased and
inventories were tightened. Several companies began to see their profits rise
again as business spending increased. Once again technology companies began to
prosper, as did biotechnology companies and large defense contractors. Retailers
picked up later in the year as consumer confidence began to rise.
Internationally, the business climate improved as situations in Iraq, North
Korea and Venezuela calmed down. Valuations climbed again and the Gross Domestic
Product grew at one of the fastest rates in many years. The "gloom and doom"
deflationary people began to change their tune as they saw basic market
fundamentals improving.
PERFORMANCE
For the year ended October 31, 2003, IDEX Asset Allocation- Growth Portfolio
returned 23.52%. By comparison its benchmark, the Wilshire 5000 Total Market
Index, returned 22.34%.
STRATEGY REVIEW
We continued to invest heavily in large cap and foreign equities, with a gradual
shift to more aggressive equities than in the previous two years. We took
advantage of lower pricing valuations and greater long term potential as we saw
our underlying funds invest in these companies. At the same time, we attempted
to move away from those positions we felt were over-valued and over-priced or
those funds that were too conservative and unable to generate the returns we
were looking for. Our position in world equity increased as we saw a generally
optimistic shift in the global economic forces. Several of our funds also invest
heavily in mid-cap equities, which also saw an improvement over the past year.
Our main portfolios at the end of the year were the IDEX Salomon Investors
Value, IDEX Salomon All Cap and IDEX American Century International. By
investing in primarily large-cap funds, we were able to take advantage of the
company's strengths while managing risk. Our strategic objective is to seek
capital appreciation while investing in 100% stock-oriented funds.
Investment Committee
AEGON/Transamerica Fund Advisers, Inc.
IDEX Mutual Funds Annual Report 2003
IDEX Asset Allocation-Growth Portfolio 1
IDEX Asset Allocation-Growth Portfolio
- --------------------------------------------------------------------------------
Comparison of change in value of $10,000 investment in Class A shares and its
comparative index.
Growth of $10,000
Inception of 3/1/02 through 10/31/03
Investment less sales charges - $9,452
[The following table was depicted as a mountain chart in the printed material.]
Date Class A Wilshire 5000
- ---------- ---------------- -------------
3/1/2002 9,452 10,000
3/31/2002 9,762 10,429
6/30/2002 8,582 9,082
9/30/2002 7,080 7,523
12/31/2002 7,571 8,074
3/31/2003 7,278 7,792
6/30/2003 8,431 9,042
9/30/2003 8,809 9,339
10/31/2003 9,281 9,895
Average Annual Total Return for Periods Ended 10/31/03
- --------------------------------------------------------------------------------
From Inception
1 year Inception Date
- --------------------------------------------------------
Class A (NAV) 23.52% -1.08% 3/1/02
Class A (POP) 16.73% -4.38% 3/1/02
Wilshire 5000(1) 22.34% -0.63% 3/1/02
- --------------------------------------------------------
Class B (NAV) 22.76% -1.75% 3/1/02
Class B (POP) 17.76% -4.12% 3/1/02
- --------------------------------------------------------
Class C (NAV) 22.76% -1.75% 3/1/02
- --------------------------------------------------------
Class L (NAV) - 23.54% 11/11/02
Class L (POP) - 21.54% 11/11/02
- --------------------------------------------------------
Class M (NAV) 23.01% -1.63% 3/1/02
Class M (POP) 20.78% -2.22% 3/1/02
- --------------------------------------------------------
NOTES
(1) The Wilshire 5000 Total Market Index (Wilshire 5000) 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 Micropal(R)(C) 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 shares, (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.
Periods less than 1 year represent total return and are not annualized.
This material must be preceded or accompanied by a current prospectus, which
includes specific contents regarding the investment objectives and policies of
this fund.
IDEX Mutual Funds Annual Report 2003
IDEX Asset Allocation-Growth Portfolio 2
IDEX Asset Allocation-Growth Portfolio
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
At October 31, 2003
(all amounts except share amounts in thousands)
Shares Value
- ---------------------------------------------------------------------------
INVESTMENT COMPANIES (97.5%) (b)
Aggressive Equity (30.7%)
IDEX Isabelle Small Cap Value (a) 2,298,241 $ 29,739
IDEX T. Rowe Price Health Sciences (a) 1,152,366 11,685
IDEX T. Rowe Price Small Cap (a) 1,917,836 20,348
IDEX Transamerica Growth
Opportunities (a) 3,723,616 22,156
Growth Equity (50.3%)
IDEX Great Companies-Technology (a) 3,480,604 12,565
IDEX Janus Growth (a) 532,729 10,511
IDEX Salomon All Cap (a) 3,545,849 49,464
IDEX Salomon Investors Value 4,534,839 56,730
IDEX Transamerica Equity (a) 1,257,080 8,624
Specialty-Real Estate (2.7%)
IDEX Clarion Real Estate Securities 603,568 $ 7,394
World Equity (13.8%)
IDEX American Century International (a) 4,311,596 34,622
IDEX Templeton Great Companies Global (a) 457,035 3,154
---------
Total Investment Companies (cost: $241,383) 266,992
---------
Total Investment Securities (cost: $241,383) $ 266,992
=========
SUMMARY:
Investments, at value 97.5% $ 266,992
Other assets in excess of liabilities 2.5% 6,816
--------- ---------
Net assets 100.0% $ 273,808
========= =========
NOTES TO SCHEDULE OF INVESTMENTS:
(a) No dividends were paid during the preceding twelve months.
(b) The Fund invests its assets in Class A shares of underlying IDEX Mutual
Funds, which are affiliates of the Fund.
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Asset Allocation-Growth Portfolio 3
IDEX Asset Allocation-Growth Portfolio
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
At October 31, 2003
(all amounts except per share amounts in thousands)
Assets:
Investment in affiliated mutual funds, at value
(cost: $241,383) $ 266,992
Cash 1,850
Receivables:
Shares of beneficial interest sold 7,254
Other 2
---------
276,098
---------
Liabilities:
Investment securities purchased 1,850
Accounts payable and accrued liabilities:
Shares of beneficial interest redeemed 156
Management and advisory fees 58
Distribution fees 107
Transfer agent fees 48
Other 71
---------
2,290
---------
Net Assets $ 273,808
=========
Net Assets Consist of:
Shares of beneficial interest, unlimited shares authorized $ 249,146
Undistributed net investment income (loss) --
Accumulated net realized gain (loss) from investment in
affiliated mutual funds (947)
Net unrealized appreciation (depreciation) on
investment in affiliated mutual funds 25,609
---------
Net Assets $ 273,808
=========
Shares Outstanding:
Class A 5,622
Class B 8,475
Class C 1,207
Class L 12,042
Class M 781
Net Asset Value Per Share:
Class A $ 9.82
Class B 9.71
Class C 9.71
Class L 9.71
Class M 9.73
Maximum Offering Price Per Share (a):
Class A $ 10.39
Class M 9.83
(a) 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.
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the year ended October 31, 2003
(all amounts in thousands)
Investment Income:
Interest $ 2
Dividends from affiliated mutual funds 159
--------
161
--------
Expenses:
Management and advisory fees 106
Transfer agent fees 279
Printing and shareholder reports 75
Custody fees 26
Administration fees 37
Legal fees 4
Auditing and accounting fees 17
Trustees fees 7
Registration fees 80
Other 5
Distribution and service fees:
Class A --
Class B 241
Class C 60
Class L 203
Class M 30
--------
Total expenses 1,170
Less:
Advisory fee waiver and expense reimbursement (161)
--------
Net expenses 1,009
--------
Net Investment Income (Loss) (848)
--------
Net Realized and Unrealized Gain (Loss):
Realized gain (loss) from investment in affiliated
mutual funds (298)
Increase (decrease) in unrealized appreciation
(depreciation) on investment in affiliated
mutual funds 28,567
--------
Net Gain (Loss) on Investment in Affiliated Mutual Funds 28,269
--------
Net Increase (Decrease) in Net Assets Resulting from
Operations $ 27,421
========
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Asset Allocation-Growth Portfolio 4
IDEX Asset Allocation-Growth Portfolio
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
For the year or period ended
(all amounts in thousands)
October 31, October 31,
2003 2002(a)
---------- ----------
Increase (Decrease) In Net Assets From:
Operations:
Net investment income (loss) $ (848) $ (87)
Net realized gain (loss) from investment
in affiliated mutual funds (298) (716)
Net unrealized appreciation
(depreciation) on investment in
affiliated mutual funds 28,567 (2,958)
--------- ---------
27,421 (3,761)
--------- ---------
Distributions to Shareholders:
From net investment income:
Class A -- --
Class B -- --
Class C -- --
Class L -- --
Class M -- --
--------- ---------
-- --
--------- ---------
From net realized gains:
Class A -- --
Class B -- --
Class C -- --
Class L -- --
Class M -- --
--------- ---------
-- --
--------- ---------
Capital Share Transactions:
Proceeds from shares sold:
Class A 45,941 10,067
Class B 65,588 12,627
Class C 6,479 9,331
Class L 110,485 --
Class M 3,340 5,274
--------- ---------
231,833 37,299
--------- ---------
Dividends and distributions reinvested:
Class A -- --
Class B -- --
Class C -- --
Class L -- --
Class M -- --
--------- ---------
-- --
--------- ---------
Cost of shares redeemed:
Class A (4,869) (607)
Class B (3,326) (757)
Class C (4,559) (656)
Class L (2,504) --
Class M (1,359) (347)
--------- ---------
(16,617) (2,367)
--------- ---------
215,216 34,932
--------- ---------
Net increase (decrease) in net assets 242,637 31,171
--------- ---------
Net Assets:
Beginning of year 31,171 --
--------- ---------
End of year $ 273,808 $ 31,171
========= =========
Undistributed Net Investment Income (Loss) $ -- $ --
========= =========
Share Activity:
Shares issued:
Class A 5,117 1,126
Class B 7,537 1,416
Class C 752 1,085
Class L 12,323 --
Class M 389 598
--------- ---------
26,118 4,225
--------- ---------
Shares issued-reinvestment from
distributions:
Class A -- --
Class B -- --
Class C -- --
Class L -- --
Class M -- --
--------- ---------
-- --
--------- ---------
Shares redeemed:
Class A (548) (73)
Class B (384) (94)
Class C (550) (80)
Class L (281) --
Class M (164) (42)
--------- ---------
(1,927) (289)
--------- ---------
Net increase (decrease) in shares
outstanding 24,191 3,936
========= =========
(a) Commenced operations on March 1, 2002.
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Asset Allocation-Growth Portfolio 5
IDEX Asset Allocation-Growth Portfolio
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share of beneficial interest outstanding throughout each period
-----------------------------------------------------------------------------------------------------------
Investment Operations Distributions
Net Asset --------------------------------------------- -------------------------------------- Net Asset
For the Value, Net Net Realized From Net From Net Value,
Period Beginning Investment and Unrealized Total Investment Realized Total End
Ended (d)(g) of Period Income (Loss) Gain (Loss) Operations Income Gains Distributions of Period
- ------------------------------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 $ 7.95 $(0.03) $ 1.90 $ 1.87 $ - $ - $ - $9.82
10/31/2002 10.00 (0.02) (2.03) (2.05) - - - 7.95
- ------------------------------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 7.91 (0.08) 1.88 1.80 - - - 9.71
10/31/2002 10.00 (0.06) (2.03) (2.09) - - - 7.91
- ------------------------------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 7.91 (0.08) 1.88 1.80 - - - 9.71
10/31/2002 10.00 (0.04) (2.05) (2.09) - - - 7.91
- ------------------------------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 7.86 (0.08) 1.93 1.85 - - - 9.71
- ------------------------------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 7.91 (0.07) 1.89 1.82 - - - 9.73
10/31/2002 10.00 (0.05) (2.04) (2.09) - - - 7.91
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
-----------------------------------------------------------------------
Ratio of Expenses
Net Assets, to Average Net Investment
For the End of Net Assets (a) Income (Loss) Portfolio
Period Total Period ----------------------- to Average Turnover
Ended (g) Return (c) (000's) Net (e) Total (f) Net Assets (a) Rate (b)
- ---------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 23.52% $ 55,209 0.45% 0.60% (0.30)% 25%
10/31/2002 (20.50) 8,368 0.45 1.65 (0.44) 31
- ---------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 22.76 82,318 1.10 1.25 (0.95) 25
10/31/2002 (20.90) 10,452 1.10 2.30 (1.09) 31
- ---------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 22.76 11,724 1.10 1.25 (0.95) 25
10/31/2002 (20.90) 7,948 1.10 2.30 (1.09) 31
- ---------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 23.54 116,956 1.10 1.25 (0.95) 25
- ---------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 23.01 7,601 1.00 1.15 (0.85) 25
10/31/2002 (20.90) 4,403 1.00 2.20 (0.99) 31
- ---------------------------------------------------------------------------------------------------------------
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 are not annualized.
(d) Per share information is calculated based on average number of shares
outstanding.
(e) Ratio of Net Expenses to Average Net Assets is net of fee waivers and
reimbursements by the investment adviser, if any (see note 2).
(f) Ratio of Total Expenses to Average Net Assets includes all expenses before
fee waivers and reimbursements by the investment adviser.
(g) IDEX Asset Allocation-Growth Portfolio ("the Fund") commenced operations on
March 1, 2002. The inception date for the Fund's offering of share Class L
was November 11, 2002.
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Asset Allocation-Growth Portfolio 6
IDEX Asset Allocation-Growth Portfolio
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
At October 31, 2003
(all amounts in thousands)
NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
IDEX Mutual Funds is a Massachusetts business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company. IDEX Asset Allocation-Growth Portfolio ("the
Fund"), part of IDEX Mutual Funds, began operations on March 1, 2002. On March
3, 2003, the Fund changed its name from IDEX Aggressive Asset Allocation to IDEX
Asset Allocation-Growth Portfolio.
In the normal course of business, the Fund enters into contracts that contain a
variety of representations and warranties and which provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown, as this would involve future claims that may be made against the Fund
and/or its affiliates that have not yet occurred. However, based on experience,
the Fund expects the risk of loss to be remote.
See the Prospectus and Statement of Additional Information for a description of
the Fund's investment objective.
In preparing the Fund's financial statements in accordance with accounting
principles generally accepted in the United States of America ("GAAP"),
estimates or assumptions (which could differ from actual results) may be used
that affect reported amounts and disclosures. The following policies were
consistently followed by the Fund, in accordance with GAAP.
Multiple class operations and expenses: The Fund currently offers five classes
of shares, each with a public offering price that reflects different sales
charges, if any, and expense levels. Effective November 11, 2002, Class C and M
shares were closed to new investors. Income, non-class specific expenses and
realized and unrealized gains and losses, are allocated daily to each class,
based upon the value of shares outstanding method as permitted under Rule 18f-3
of the 1940 Act. Each class bears its own specific expenses as well as a portion
of general, common expenses.
Security valuations: The Fund's investments are valued at the net asset values
of the underlying portfolios of IDEX Mutual Funds. The net asset values of the
underlying portfolios are determined at the close of the New York Stock Exchange
(generally 4:00 p.m. eastern time) on the valuation date.
Cash: The Fund may leave cash overnight in its cash account with the custodian,
Investors Bank & Trust Company ("IBT"). IBT has been contracted on behalf of the
Fund to invest the excess cash into a savings account, which at October 31,
2003, was paying an interest rate of 0.75%.
Security transactions and investment income: Security transactions are recorded
on the trade date. Security gains and losses are calculated on the specific
identification basis. Dividend income is recorded on the ex-dividend date.
Dividends and net realized gain (loss) from investment securities for the Fund
are from investments in shares of affiliated investment companies.
Dividend distributions: Distributions to shareholders are recorded on the
ex-dividend date and are determined in accordance with Federal income tax
regulations which may differ from GAAP.
NOTE 2. RELATED PARTY TRANSACTIONS
AEGON/Transamerica Fund Advisers, Inc. ("ATFA") is the Fund's investment
adviser. AEGON/Transamerica Fund Services, Inc. ("ATFS") is the Fund's
administrator. AFSG Securities Corp. ("AFSG") is the Fund's
distributor/principal underwriter. AEGON/Transamerica Investor Services, Inc.
("ATIS") is the 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. AUSA and WRL are wholly owned indirect subsidiaries of AEGON
NV, a Netherlands corporation.
ATFA has entered into consultant agreements with Morningstar Associates, LLC to
provide investment services to the Fund. ATFA compensates Morningstar
Associates, LLC as described in the Prospectus.
Transamerica Investment Management, LLC and Great Companies, LLC are affiliates
of the Fund and are sub-advisors to other funds within IDEX Mutual Funds.
Investment advisory fees: The Fund pays management fees to ATFA based on average
daily net assets ("ANA") at the following rate:
0.10% of ANA
ATFA currently voluntarily waives its advisory fee and will reimburse the Fund
to the extent that operating expenses, excluding 12b-1 fees, exceed the
following stated annual limit:
0.45% Expense Limit
If total fund expenses fall below the annual expense limitations agreed to by
the adviser within the succeeding three years, the Fund may be required to pay
the advisor a portion or all of the waived advisory fees.
Advisory Fee Available for
Waived Recapture Through
------------ -----------------
Fiscal Year 2003 161 10/31/2006
Fiscal Year 2002 118 10/31/2005
Distribution and service fees: The Fund has a 12b-1 distribution plan under the
1940 Act pursuant to which an annual fee, based on average daily net assets, is
paid to the distributor for various disbursements such as broker-dealer account
servicing fees and other promotional expenses of the Fund. The Fund is
authorized under the 12b-1 plan to pay fees on each class up to the following
limits:
IDEX Mutual Funds Annual Report 2003
IDEX Asset Allocation-Growth Portfolio 7
IDEX Asset Allocation-Growth Portfolio
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 2-(continued)
Class A N/A
Class B 0.65%
Class C 0.65%
Class L 0.65%
Class M 0.55%
In addition, the underlying Fund's Class A shares in which the Fund invests
impose a 0.35% 12b-1 fee. To avoid duplication of 12b-1 fees, each class of fund
shares of the Fund has reduced the 12b-1 fees by the amount of the underlying
funds' Class A 12b-1 fees.
Underwriter commissions relate to front-end sales charges imposed for Class A
and M shares and contingent deferred sales charges from Classes B, L, M and
certain A share redemptions. For the year ended October 31, 2003, the
underwriter commissions were as follows:
Received by Underwriter $ 1,264
Retained by Underwriter 165
Contingent Sales Charges 73
Administrative services: The Fund has entered into an agreement with ATFS for
financial and legal fund administration services, which include such items as
compliance, expenses, financial statements and other reporting, distributions,
tax returns, prospectus preparation, board of trustees meeting support and other
legal matters. Transfer agent fees are reflected separately from Administration
fees on the Statement of Operations. The Legal fees on the Statement of
Operations are for fees paid to external legal counsel. ATFS provides its
services to the Fund at a cost and is reimbursed monthly.
Transfer agent fees: The Fund incurs ATIS annual per-account charges (not in
thousands) of $20.00 for each open shareholder account and $1.63 for each closed
account maintained, and certain out of pocket expenses.
Deferred compensation plan: Each eligible Fund Trustee may elect participation
in the Deferred Compensation Plan ("the Plan"). Under the Plan, such Trustees
may defer payment of a percentage of their total fees earned as a Fund Trustee.
These deferred amounts may be invested in any IDEX Fund. At October 31, 2003,
the value of invested plan amounts was $2. Invested plan amounts and the total
liability for deferred compensation to the Trustees under the Plan at October
31, 2003, are included in Net assets in the accompanying Statement of Assets and
Liabilities.
NOTE 3. INVESTMENT TRANSACTIONS
The cost of securities purchased and proceeds from securities sold (excluding
short-term securities) for the year ended October 31, 2003, are as follows:
Purchases of securities:
Long-Term excluding U.S. Government $ 235,279
U.S. Government -
Proceeds from maturities and sales of securities:
Long-Term excluding U.S. Government 26,500
U.S. Government -
NOTE 4. FEDERAL INCOME TAX MATTERS
The Fund has not made any provision for federal income or excise taxes due to
its policy to distribute all of its taxable income and capital gains to its
shareholders and otherwise qualify as a regulated investment company under the
Internal Revenue Code. Income and capital gain distributions are determined in
accordance with income tax regulations, which may differ from GAAP. These
differences are primarily due to differing treatments for items including, but
not limited to, wash sales, net operating losses and capital loss carryforwards.
Reclassifications between Undistributed net investment income (loss),
Undistributed net realized capital gains (loss) and Shares of beneficial
interest are made to reflect income and gains available for distribution under
federal tax regulations. Results of operations and net assets are not effected
by these reclassifications. These reclassifications are as follows:
Shares of beneficial interest, unlimited
shares authorized $ (915)
Undistributed net investment income (loss) 848
Accumulated net realized gain (loss) from
investment in mutual funds 67
The tax basis components of distributable earnings as of October 31, 2003, are
as follows:
Undistributed Ordinary Income $ -
========
Undistributed Long-term Capital Gains $ -
========
Capital Loss Carryforward $ (135)
========
Net Unrealized Appreciation (Depreciation) $ 24,797
========
The capital loss carryforward utilized as of October 31, 2003 was $581. The
capital loss carryforward is available to offset future realized capital gains
through the period listed:
Capital Loss
Carryforward Available through
------------ -----------------
$ 135 October 31, 2010
The aggregate cost of investments and composition of unrealized appreciation
(depreciation) for federal income tax purposes as of October 31, 2003, are as
follows:
Federal Tax Cost Basis $ 242,195
=========
Unrealized Appreciation $ 24,797
Unrealized (Depreciation) -
---------
Net Unrealized Appreciation (Depreciation) $ 24,797
=========
IDEX Mutual Funds Annual Report 2003
IDEX Asset Allocation-Growth Portfolio 8
- --------------------------------------------------------------------------------
Report of Independent Certified Public Accountants
To the Board of Trustees and Shareholders of
IDEX Asset Allocation-Growth Portfolio
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of IDEX Asset Allocation-Growth
Portfolio (the "Fund") (one of the portfolios constituting the IDEX Mutual
Funds) at October 31, 2003, and the results of its operations, the changes in
its net assets and the financial highlights for each of the periods indicated,
in conformity with accounting principles generally accepted in the United States
of America. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Fund's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with auditing standards generally accepted in the
United States of America, which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at October 31, 2003 by
correspondence with the custodian and brokers, provide a reasonable basis for
our opinion.
/s/ PRICEWATERHOUSECOOPERS LLP
PricewaterhouseCoopers LLP
Tampa, Florida
December 18, 2003
IDEX Mutual Funds Annual Report 2003
IDEX Asset Allocation-Growth Portfolio 9
IDEX Asset Allocation-Moderate Portfolio
- --------------------------------------------------------------------------------
MARKET ENVIRONMENT
Despite good financial market reports, many investors cautiously step forward
hoping for the best, and prepared for the worst. There were signs of the market
getting back on the right track with labor market trends and productivity slowly
improving and with heightened confidence that U.S. and to a lesser extent,
European policymakers would protect the global economy against the risks of
deflation. However, the war in Iraq, the reconstruction in Afghanistan and the
continuing threat of terrorism are significant geopolitical wildcards that keep
the financial markets and the Federal Reserve Board uneasy.
PERFORMANCE
For the year ended October 31, 2003, IDEX Asset Allocation-Moderate Portfolio
returned 19.98%. By comparison its primary benchmark, the Wilshire 5000 Total
Market Index, returned 22.34% and its secondary benchmark, the Lehman Brothers
Aggregate Bond Index, returned 4.90%
STRATEGY REVIEW
IDEX Asset Allocation-Moderate Portfolio is a collection of underlying
portfolios, designed for maximum diversification by offering investors exposure
not only to a variety of securities, but to several money managers with
different approaches to security selection. This fund is for investors who seek
some capital appreciation from equities but also want less risk -- thus a
healthy exposure to fixed-income and money market investments.
A sampling of the portfolio's top holdings show its construction combines a
diverse set of investments to pursue its goals. Among its top holdings as of
October 31, 2003, were two fixed-income portfolios: IDEX Transamerica
Convertible Securities and IDEX Transamerica Conservative High-Yield Bond. Both
convertibles and high-yield bonds tend to do well during times of equity market
recovery. IDEX Salomon Investors Value, a conservative equity fund, also ranked
among our top holdings during the period.
By the end of the year, this portfolio was comprised of nineteen underlying
portfolios, each with a different management team following its unique approach
to investment selection.
Investment Committee
AEGON/Transamerica Fund Advisers, Inc.
IDEX Mutual Funds Annual Report 2003
IDEX Asset Allocation-Moderate Portfolio 1
IDEX Asset Allocation-Moderate Portfolio
- --------------------------------------------------------------------------------
Comparison of change in value of $10,000 investment in Class A shares and
its comparative index.
Growth of $10,000
Inception of 3/1/02 through 10/31/03
Investment less sales charges - $9,452
[The following table was depicted as a mountain chart in the printed material.]
Date Class A Wilshire 5000 LBAB
---- ------------------ ------------- ------
3/1/2002 9,452 10,000 10,000
3/31/2002 9,566 10,429 9,834
6/30/2002 8,875 9,082 10,197
9/30/2002 8,006 7,523 10,664
12/31/2002 8,390 8,074 10,832
3/31/2003 8,285 7,792 10,983
6/30/2003 9,257 9,042 11,257
9/30/2003 9,563 9,339 11,241
10/31/2003 9,934 9,895 11,136
Average Annual Total Return for Periods Ended 10/31/03
- --------------------------------------------------------------------------------
From Inception
1 year Inception Date
- ---------------------------------------------------------
Class A (NAV) 19.98% 3.03% 3/1/02
Class A (POP) 13.38% -0.41% 3/1/02
Wilshire 5000(1) 22.34% -0.63% 3/1/02
LBAB(1) 4.90% 6.66% 3/1/02
- ---------------------------------------------------------
Class B (NAV) 19.39% 2.37% 3/1/02
Class B (POP) 14.39% -0.01% 3/1/02
- ---------------------------------------------------------
Class C (NAV) 19.39% 2.37% 3/1/02
- ---------------------------------------------------------
Class L (NAV) - 19.39% 11/11/02
Class L (POP) - 17.39% 11/11/02
- ---------------------------------------------------------
Class M (NAV) 19.47% 2.48% 3/1/02
Class M (POP) 17.28% 1.87% 3/1/02
- ---------------------------------------------------------
NOTES
(1) The Wilshire 5000 Total Market (Wilshire 5000) Index and Lehman Brothers
Aggregate Bond (LBAB) Index are unmanaged indices 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
Micropal(R)(C) 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 shares, (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.
Periods less than 1 year represent total return and are not annualized.
This material must be preceded or accompanied by a current prospectus, which
includes specific contents regarding the investment objectives and policies of
this fund.
IDEX Mutual Funds Annual Report 2003
IDEX Asset Allocation-Moderate Portfolio 2
IDEX Asset Allocation-Moderate Portfolio
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
At October 31, 2003
(all amounts except share amounts in thousands)
Shares Value
- ----------------------------------------------------------------------------
INVESTMENT COMPANIES (98.8%)(b)
Aggressive Equity (19.1%)
IDEX Isabelle Small Cap Value (a) 2,772,306 $ 35,874
IDEX T. Rowe Price Health Sciences (a) 1,733,526 17,578
IDEX T. Rowe Price Small Cap (a) 2,311,151 24,521
IDEX Transamerica Growth
Opportunities (a) 4,961,136 29,519
Capital Preservation (1.1%)
IDEX Transamerica Money Market 6,448,139 6,448
1-day yield of 0.25%
Fixed-Income (35.6%)
IDEX Janus Flexible Income 2,231,654 22,785
IDEX PIMCO Real Return TIPS 1,355,342 13,689
IDEX PIMCO Total Return 1,673,315 17,603
IDEX Transamerica Conservative
High-Yield Bond 7,745,440 70,329
IDEX Transamerica Convertible Securities 6,636,316 75,123
Growth Equity (31.4%)
IDEX Great Companies-Technology (a) 6,176,812 22,298
IDEX Janus Growth (a) 527,985 10,417
Growth Equity (continued)
IDEX Marsico Growth (a) 1,199,843 $ 10,763
IDEX Salomon All Cap (a) 4,057,206 56,598
IDEX Salomon Investors Value 4,599,235 57,537
IDEX Transamerica Equity (a) 2,687,780 18,438
Specialty-Real Estate (5.0%)
IDEX Clarion Real Estate Securities 2,308,957 28,285
World Equity (6.6%)
IDEX American Century International (a) 3,988,808 32,030
IDEX Templeton Great Companies Global (a) 718,025 4,954
---------
Total Investment Companies (cost: $502,980) 554,789
---------
Total Investment Securities (cost: $502,980) $ 554,789
=========
SUMMARY:
Investments, at value 98.8% $ 554,789
Other assets in excess of liabilities 1.2% 6,848
--------- ---------
Net assets 100.0% $ 561,637
========= =========
NOTES TO SCHEDULE OF INVESTMENTS:
(a) No dividends were paid during the preceding twelve months.
(b) The Fund invests its assets in Class A shares of underlying IDEX Mutual
Funds, which are affiliates of the Fund.
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Asset Allocation-Moderate Portfolio 3
IDEX Asset Allocation-Moderate Portfolio
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
At October 31, 2003
(all amounts except per share amounts in thousands)
Assets:
Investment in affiliated mutual funds, at value
(cost: $502,980) $ 554,789
Cash 2,180
Receivables:
Shares of beneficial interest sold 7,602
Other 5
---------
564,576
---------
Liabilities:
Investment securities purchased 2,180
Accounts payable and accrued liabilities:
Shares of beneficial interest redeemed 349
Management and advisory fees 49
Distribution fees 230
Transfer agent fees 92
Other 39
---------
2,939
---------
Net Assets $ 561,637
=========
Net Assets Consist of:
Shares of beneficial interest, unlimited shares authorized $ 508,687
Undistributed net investment income (loss) 1,370
Accumulated net realized gain (loss) from investment in
affiliated mutual funds (227)
Net unrealized appreciation (depreciation) on investment
in affiliated mutual funds 51,807
---------
Net Assets $ 561,637
=========
Shares Outstanding:
Class A 11,137
Class B 17,655
Class C 4,263
Class L 19,448
Class M 1,579
Net Asset Value Per Share:
Class A $ 10.42
Class B 10.37
Class C 10.37
Class L 10.37
Class M 10.38
Maximum Offering Price Per Share (a):
Class A $ 11.03
Class M 10.48
(a) 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.
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the year ended October 31, 2003
(all amounts in thousands)
Investment Income:
Interest $ 5
Dividends from affiliated mutual funds 4,442
--------
4,447
--------
Expenses:
Management and advisory fees 280
Transfer agent fees 452
Printing and shareholder reports 52
Custody fees 40
Administration fees 38
Legal fees 12
Auditing and accounting fees 19
Trustees fees 17
Registration fees 117
Other 9
Distribution and service fees:
Class A -
Class B 676
Class C 231
Class L 494
Class M 75
--------
Total expenses 2,512
--------
Net Investment Income (Loss) 1,935
--------
Net Realized and Unrealized Gain (Loss):
Realized gain (loss) from investment in affiliated
mutual funds 251
Increase (decrease) in unrealized appreciation
(depreciation) on investment in affiliated
mutual funds 55,947
--------
Net Gain (Loss) on Investment in Affiliated Mutual Funds 56,198
--------
Net Increase (Decrease) in Net Assets Resulting from
Operations $ 58,133
========
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Asset Allocation-Moderate Portfolio 4
IDEX Asset Allocation-Moderate Portfolio
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
For the year or period ended
(all amounts in thousands)
October 31, October 31,
2003 2002 (a)
---------- ----------
Increase (Decrease) In Net Assets From:
Operations:
Net investment income (loss) $ 1,935 $ 83
Net realized gain (loss) from investment
in affiliated mutual funds 251 (620)
Net unrealized appreciation
(depreciation) on investment in
affiliated mutual funds 55,947 (4,140)
--------- ---------
58,133 (4,677)
--------- ---------
Distributions to Shareholders:
From net investment income:
Class A (219) --
Class B (148) --
Class C (85) --
Class L (21) --
Class M (44) --
--------- ---------
(517) --
--------- ---------
From net realized gains:
Class A -- --
Class B -- --
Class C -- --
Class L -- --
Class M -- --
--------- ---------
-- --
--------- ---------
Capital Share Transactions:
Proceeds from shares sold:
Class A 102,381 20,382
Class B 137,237 43,878
Class C 20,189 28,947
Class L 193,572 --
Class M 7,305 12,877
--------- ---------
460,684 106,084
--------- ---------
Dividends and distributions reinvested:
Class A 200 --
Class B 123 --
Class C 61 --
Class L 18 --
Class M 41 --
--------- ---------
443 --
--------- ---------
Cost of shares redeemed:
Class A (14,662) (1,985)
Class B (14,226) (2,810)
Class C (7,862) (2,406)
Class L (8,858) --
Class M (4,553) (1,151)
--------- ---------
(50,161) (8,352)
--------- ---------
410,966 97,732
--------- ---------
Net increase (decrease) in net assets 468,582 93,055
--------- ---------
Net Assets:
Beginning of year 93,055 --
--------- ---------
End of year $ 561,637 $ 93,055
========= =========
Undistributed Net Investment Income (Loss) $ 1,370 $ 94
========= =========
Share Activity:
Shares issued:
Class A 10,668 2,226
Class B 14,694 4,793
Class C 2,174 3,190
Class L 20,375 --
Class M 794 1,409
--------- ---------
48,705 11,618
--------- ---------
Shares issued-reinvested from distributions:
Class A 23 --
Class B 14 --
Class C 7 --
Class L 2 --
Class M 5 --
--------- ---------
51 --
--------- ---------
Shares redeemed:
Class A (1,554) (226)
Class B (1,525) (321)
Class C (838) (270)
Class L (929) --
Class M (496) (133)
--------- ---------
(5,342) (950)
--------- ---------
Net increase (decrease) in shares
outstanding 43,414 10,668
========= =========
(a) Commenced operations on March 1, 2002.
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Asset Allocation-Moderate Portfolio 5
IDEX Asset Allocation-Moderate Portfolio
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share of beneficial interest outstanding throughout each period
----------------------------------------------------------------------------------------------------------
Investment Operations Distributions
Net Asset ------------------------------------------- ------------------------------------- Net Asset
For the Value, Net Net Realized From Net From Net Value,
Period Beginning Investment and Unrealized Total Investment Realized Total End
Ended (d)(g) of Period Income (Loss) Gain (Loss) Operations Income Gains Distributions of Period
- -----------------------------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 $ 8.76 $0.12 $ 1.62 $ 1.74 $(0.08) $ - $(0.08) $10.42
10/31/2002 10.00 0.04 (1.28) (1.24) - - - 8.76
- -----------------------------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 8.71 0.05 1.63 1.68 (0.02) - (0.02) 10.37
10/31/2002 10.00 0.01 (1.30) (1.29) - - - 8.71
- -----------------------------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 8.71 0.05 1.63 1.68 (0.02) - (0.02) 10.37
10/31/2002 10.00 0.01 (1.30) (1.29) - - - 8.71
- -----------------------------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 8.71 0.05 1.63 1.68 (0.02) - (0.02) 10.37
- -----------------------------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 8.72 0.06 1.63 1.69 (0.03) - (0.03) 10.38
10/31/2002 10.00 0.01 (1.29) (1.28) - - - 8.72
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
-----------------------------------------------------------------------
Ratio of Expenses
Net Assets, to Average Net Investment
For the End of Net Assets (a) Income (Loss) Portfolio
Period Total Period ----------------------- to Average Turnover
Ended (g) Return (c) (000's) Net (e) Total (f) Net Assets (a) Rate (b)
- ---------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 19.98% $ 116,102 0.37% 0.37% 1.22% 18%
10/31/2002 (12.40) 17,517 0.45 0.78 0.83 12
- ---------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 19.39 183,148 1.02 1.02 0.57 18
10/31/2002 (12.90) 38,969 1.10 1.43 0.18 12
- ---------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 19.39 44,225 1.02 1.02 0.57 18
10/31/2002 (12.90) 25,444 1.10 1.43 0.18 12
- ---------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 19.39 201,774 1.02 1.02 0.57 18
- ---------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 19.47 16,388 0.92 0.92 0.67 18
10/31/2002 (12.80) 11,125 1.00 1.33 0.28 12
- ---------------------------------------------------------------------------------------------------------------
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 are not annualized.
(d) Per share information is calculated based on average number of shares
outstanding.
(e) Ratio of Net Expenses to Average Net Assets is net of fee waivers and
reimbursements by the investment adviser, if any (see note 2).
(f) Ratio of Total Expenses to Average Net Assets includes all expenses before
fee waivers and reimbursements by the investment adviser.
(g) IDEX Asset Allocation-Moderate Portfolio ("the Fund") commenced operations
on March 1, 2002. The inception date for the Fund's offering of share Class
L was November 11, 2002.
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Asset Allocation-Moderate Portfolio 6
IDEX Asset Allocation-Moderate Portfolio
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
At October 31, 2003
(all amounts in thousands)
NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
IDEX Mutual Funds is a Massachusetts business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company. IDEX Asset Allocation-Moderate Portfolio ("the
Fund"), part of IDEX Mutual Funds, began operations on March 1, 2002. On March
3, 2003, the Fund changed its name from IDEX Moderate Asset Allocation to IDEX
Asset Allocation-Moderate Portfolio.
In the normal course of business, the Fund enters into contracts that contain a
variety of representations and warranties and which provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown, as this would involve future claims that may be made against the Fund
and/or its affiliates that have not yet occurred. However, based on experience,
the Fund expects the risk of loss to be remote.
See the Prospectus and Statement of Additional Information for a description of
the Fund's investment objective.
In preparing the Fund's financial statements in accordance with accounting
principles generally accepted in the United States of America ("GAAP"),
estimates or assumptions (which could differ from actual results) may be used
that affect reported amounts and disclosures. The following policies were
consistently followed by the Fund, in accordance with GAAP.
Multiple class operations and expenses: The Fund currently offers five classes
of shares, each with a public offering price that reflects different sales
charges, if any, and expense levels. Effective November 11, 2002, Class C and M
shares were closed to new investors. Income, non-class specific expenses and
realized and unrealized gains and losses, are allocated daily to each class,
based upon the value of shares outstanding method as permitted under Rule 18f-3
of the 1940 Act. Each class bears its own specific expenses as well as a portion
of general, common expenses.
Security valuations: The Fund's investments are valued at the net asset values
of the underlying portfolios of IDEX Mutual Funds. The net asset values of the
underlying portfolios are determined at the close of the New York Stock Exchange
(generally 4:00 p.m. eastern time) on the valuation date.
Cash: The Fund may leave cash overnight in its cash account with the custodian,
Investors Bank & Trust Company ("IBT"). IBT has been contracted on behalf of the
Fund to invest the excess cash into a savings account, which at October 31,
2003, was paying an interest rate of 0.75%.
Security transactions and investment income: Security transactions are recorded
on the trade date. Security gains and losses are calculated on the specific
identification basis. Dividend income is recorded on the ex-dividend date.
Dividends and net realized gain (loss) from investment securities for the Fund
are from investments in shares of affiliated investment companies.
Dividend distributions: Distributions to shareholders are recorded on the
ex-dividend date and are determined in accordance with Federal income tax
regulations which may differ from GAAP.
NOTE 2. RELATED PARTY TRANSACTIONS
AEGON/Transamerica Fund Advisers, Inc. ("ATFA") is the Fund's investment
adviser. AEGON/Transamerica Fund Services, Inc. ("ATFS") is the Fund's
administrator. AFSG Securities Corp. ("AFSG") is the Fund's
distributor/principal underwriter. AEGON/Transamerica Investor Services, Inc.
("ATIS") is the 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. AUSA and WRL are wholly owned indirect subsidiaries of AEGON
NV, a Netherlands corporation.
ATFA has entered into consultant agreements with Morningstar Associates, LLC to
provide investment services to the Fund. ATFA compensates Morningstar
Associates, LLC as described in the Prospectus.
Transamerica Investment Management, LLC and Great Companies, LLC are affiliates
of the Fund and are sub-advisors to other funds within IDEX Mutual Funds.
Investment advisory fees: The Fund pays management fees to ATFA based on average
daily net assets ("ANA") at the following rate:
0.10% of ANA
ATFA currently voluntarily waives its advisory fee and will reimburse the Fund
to the extent that operating expenses, excluding 12b-1 fees, exceed the
following stated annual limit:
0.45% Expense Limit
If total fund expenses fall below the annual expense limitations agreed to by
the adviser within the succeeding three years, the Fund may be required to pay
the advisor a portion or all of the waived advisory fees.
Advisory Fee Available for
Waived Recapture Through
-------------- ------------------
Fiscal Year 2003 - 10/31/2006
Fiscal Year 2002 83 10/31/2005
For the year ended October 31, 2003, ATFA has voluntarily agreed to waive the
recapture of $83 reimbursed expenses that were otherwise eligible for recapture.
IDEX Mutual Funds Annual Report 2003
IDEX Asset Allocation-Moderate Portfolio 7
IDEX Asset Allocation-Moderate Portfolio
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 2-(continued)
Distribution and service fees: The Fund has a 12b-1 distribution plan under the
1940 Act pursuant to which an annual fee, based on average daily net assets, is
paid to the distributor for various disbursements such as broker-dealer account
servicing fees and other promotional expenses of the Fund. The Fund is
authorized under the 12b-1 plan to pay fees on each class up to the following
limits:
Class A N/A
Class B 0.65%
Class C 0.65%
Class L 0.65%
Class M 0.55%
In addition, the underlying Funds' Class A shares in which the Fund invests
impose a 0.35% 12b-1 fee. To avoid duplication of 12b-1 fees, each class of fund
shares of the Fund has reduced the 12b-1 fees by the amount of the underlying
funds' Class A 12b-1 fees.
Underwriter commissions relate to front-end sales charges imposed for Class A
and M shares and contingent deferred sales charges from Classes B, L, M and
certain A share redemptions. For the year ended October 31, 2003, the
underwriter commissions were as follows:
Received by Underwriter $ 2,730
Retained by Underwriter 361
Contingent Sales Charges 345
Administrative services: The Fund has entered into an agreement with ATFS for
financial and legal fund administration services, which include such items as
compliance, expenses, financial statements and other reporting, distributions,
tax returns, prospectus preparation, board of trustees meeting support and other
legal matters. Transfer agent fees are reflected separately from Administration
fees on the Statement of Operations. The Legal fees on the Statement of
Operations are for fees paid to external legal counsel. ATFS provides its
services to the Fund at cost and is reimbursed monthly.
Transfer agent fees: The Fund incurs ATIS annual per-account charges (not in
thousands) of $20.00 for each open shareholder account and $1.63 for each closed
account maintained, and certain out of pocket expenses.
Deferred compensation plan: Each eligible Fund Trustee may elect participation
in the Deferred Compensation Plan ("the Plan"). Under the Plan, such Trustees
may defer payment of a percentage of their total fees earned as a Fund Trustee.
These deferred amounts may be invested in any IDEX Fund. At October 31, 2003,
the value of invested plan amounts was $4. Invested plan amounts and the total
liability for deferred compensation to the Trustees under the Plan at October
31, 2003, are included in Net assets in the accompanying Statement of Assets and
Liabilities.
NOTE 3. INVESTMENT TRANSACTIONS
The cost of securities purchased and proceeds from securities sold (excluding
short-term securities) for the year ended October 31, 2003, were as follows:
Purchases of securities:
Long-Term excluding U.S. Government $ 460,292
U.S. Government -
Proceeds from maturities and sales of securities:
Long-Term excluding U.S. Government 51,420
U.S. Government -
NOTE 4. FEDERAL INCOME TAX MATTERS
The Fund has not made any provision for federal income or excise taxes due to
its policy to distribute all of its taxable income and capital gains to its
shareholders and otherwise qualify as a regulated investment company under the
Internal Revenue Code. Income and capital gain distributions are determined in
accordance with income tax regulations, which may differ from GAAP. These
differences are primarily due to differing treatments for items including, but
not limited to, wash sales and capital loss carryforwards.
Reclassifications between Undistributed net investment income (loss),
Undistributed net realized capital gains (loss) and Shares of beneficial
interest are made to reflect income and gains available for distribution under
federal tax regulations. Results of operations and net assets are not effected
by these reclassifications. These reclassifications are as follows:
Shares of beneficial interest, unlimited
shares authorized $ -
Undistributed net investment income (loss) (142)
Accumulated net realized gain (loss) from
investment in mutual funds 142
The tax character of distributions paid may differ from the character of
distributions shown in the Statements of Changes in Net Assets primarily due to
short-term gains being treated as ordinary income for tax purposes. The tax
character of distributions paid during 2002 and 2003 was as follows:
2002 Distributions paid from:
Ordinary income $ -
Long-term capital gains -
2003 Distributions paid from:
Ordinary income $ 517
Long-term capital gains -
IDEX Mutual Funds Annual Report 2003
IDEX Asset Allocation-Moderate Portfolio 8
IDEX Asset Allocation-Moderate Portfolio
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 4-(continued)
The tax basis components of distributable earnings as of October 31, 2003, are
as follows:
Undistributed Ordinary Income $ 1,370
========
Undistributed Long-term Capital Gains $ -
========
Capital Loss Carryforward $ (57)
========
Net Unrealized Appreciation (Depreciation) $ 51,639
========
The capital loss carryforward utilized as of October 31, 2003 was $563. The
capital loss carryforward is available to offset future realized capital gains
through the period listed:
Capital Loss
Carryforward Available through
------------ -----------------
$ 57 October 31, 2010
The aggregate cost of investments and composition of unrealized appreciation
(depreciation) for federal income tax purposes as of October 31, 2003, are as
follows:
Federal Tax Cost Basis $ 503,150
=========
Unrealized Appreciation $ 51,639
Unrealized (Depreciation) -
---------
Net Unrealized Appreciation (Depreciation) $ 51,639
=========
Supplemental Tax Information
(unaudited)
For dividends paid during the year ended October 31, 2003, the Fund designates
qualified dividend income to the maximum extent allowable.
For corporate shareholders, 5% of investment income (dividend income plus
short-term gains, if any) qualifies for the dividends received deduction.
The information and distributions reported herein may differ from the
information and distributions taxable to the shareholders for the calendar year
ending December 31, 2003. Complete information will be computed and reported in
conjunction with your 2003 Form 1099-DIV.
IDEX Mutual Funds Annual Report 2003
IDEX Asset Allocation-Moderate Portfolio 9
- --------------------------------------------------------------------------------
Report of Independent Certified Public Accountants
To the Board of Trustees and Shareholders of
IDEX Asset Allocation-Moderate Portfolio
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of IDEX Asset Allocation-Moderate
Portfolio (the "Fund") (one of the portfolios constituting the IDEX Mutual
Funds) at October 31, 2003, and the results of its operations, the changes in
its net assets and the financial highlights for each of the periods indicated,
in conformity with accounting principles generally accepted in the United States
of America. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Fund's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with auditing standards generally accepted in the
United States of America, which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at October 31, 2003 by
correspondence with the custodian and brokers, provide a reasonable basis for
our opinion.
/s/ PRICEWATERHOUSECOOPERS LLP
PricewaterhouseCoopers LLP
Tampa, Florida
December 18, 2003
IDEX Mutual Funds Annual Report 2003
IDEX Asset Allocation-Moderate Portfolio 10
IDEX Asset Allocation-Moderate Growth Portfolio
- --------------------------------------------------------------------------------
MARKET ENVIRONMENT
During the past twelve months, we have seen the overall market move from a
pessimistic "wait and see" attitude to a slightly more optimistic "let's begin
to buy" attitude. Twelve months ago the world was waiting to see what was going
to happen in Iraq, North Korea and Venezuela, where the oil prices were going
and whether or not interest rates would continue to be cut. Many people were
touting the gloom and doom deflation theory while others sat patiently and
looked for bargains.
As the year progressed, the overall uncertainty began to wane as the allies
quickly defeated the Iraqi army; the oil prices stabilized and the world didn't
implode. The Federal Reserve Board lowered the short-term interest rates to
40-year lows in an effort to increase short-term borrowing and motivate business
spending. Companies began to work more efficiently as productivity increased and
inventories were tightened. Several companies began to see their profits rise
again as business spending increased. Once again technology companies began to
prosper, as did biotechnology companies and large defense contractors. Retailers
picked up later in the year as consumer confidence began to rise.
Internationally, the business climate improved. Valuations climbed again and the
Gross Domestic Product grew at one of the fastest rates in many years. The
"gloom and doom" deflationary people began to change their tune as they saw
basic market fundamentals improving.
PERFORMANCE
For the year ended October 31, 2003, IDEX Asset Allocation-Moderate Growth
Portfolio returned 21.79%. By comparison its benchmark, the Wilshire 5000 Total
Market Index, returned 22.34%.
STRATEGY REVIEW
We continued to invest heavily in large cap growth oriented equities, with a
gradual shift to more aggressive equities than in the previous two years. We
took advantage of lower pricing valuations and greater long term potential as we
saw our underlying funds invest in these companies. At the same time, we
attempted to move away from those positions we felt were over-valued and
over-priced or those funds that were too conservative and unable to generate the
profits we were looking for. Our position in world equity increased as we saw a
generally optimistic shift in the global economic forces while our positions in
conservative bonds and fixed income equities were reduced slightly due to the
continuing low interest rate environment.
Our main portfolios at the end of the year were the IDEX Salomon Investors
Value, IDEX Salomon All Cap and the IDEX American Century International. By
investing in primarily large-cap funds, we were able to take advantage of the
company's strengths while managing risk. Although more aggressive funds
performed better during the year, the risk associated with these funds did not
fit into our investment strategy. Our strategic objective is to seek capital
appreciation, which we hope to accomplish while maintaining some exposure in
conservative bond and fixed-income type investments.
Investment Committee
AEGON/Transamerica Fund Advisers, Inc.
IDEX Mutual Funds Annual Report 2003
IDEX Asset Allocation-Moderate Growth Portfolio 1
IDEX Asset Allocation-Moderate Growth Portfolio
- --------------------------------------------------------------------------------
Comparison of change in value of $10,000 investment in Class A shares and its
comparative index.
Growth of $10,000
Inception of 3/1/02 through 10/31/03
Investment less sales charges - $9,452
[The following table was depicted as a mountain chart in the printed material.]
Date Class A Wilshire 5000
- ---------- ---------------- -------------
3/1/2002 9,452 10,000
3/31/2002 9,644 10,429
6/30/2002 8,762 9,082
9/30/2002 7,552 N/A
12/31/2002 8,009 8,074
3/31/2003 7,838 7,792
6/30/2003 8,884 9,042
9/30/2003 9,208 9,339
10/31/2003 9,635 9,895
Average Annual Total Return for Periods Ended 10/31/03
- --------------------------------------------------------------------------------
From Inception
1 year Inception Date
- ---------------------------------------------------------
Class A (NAV) 21.79% 1.16% 3/1/02
Class A (POP) 15.09% -2.21% 3/1/02
Wilshire 5000(1) 22.34% -0.63% 3/1/02
- ---------------------------------------------------------
Class B (NAV) 21.15% 0.55% 3/1/02
Class B (POP) 16.15% -1.86% 3/1/02
- ---------------------------------------------------------
Class C (NAV) 21.15% 0.55% 3/1/02
- ---------------------------------------------------------
Class L (NAV) - 21.44% 11/11/02
Class L (POP) - 19.44% 11/11/02
- ---------------------------------------------------------
Class M (NAV) 21.12% 0.60% 3/1/02
Class M (POP) 18.90% 0.00% 3/1/02
- ---------------------------------------------------------
NOTES
(1) The Wilshire 5000 Total Market (Wilshire 5000) 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 Micropal(R)(C) 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 shares, (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.
Periods less than 1 year represent total return and are not annualized.
This material must be preceded or accompanied by a current prospectus, which
includes specific contents regarding the investment objectives and policies of
this fund.
IDEX Mutual Funds Annual Report 2003
IDEX Asset Allocation-Moderate Growth Portfolio 2
IDEX Asset Allocation-Moderate Growth Portfolio
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
At October 31, 2003
(all amounts except share amounts in thousands)
Shares Value
- --------------------------------------------------------------------------------
INVESTMENT COMPANIES (98.1%)(b)
Aggressive Equity (22.9%)
IDEX Isabelle Small Cap Value (a) 3,556,567 $ 46,022
IDEX T. Rowe Price Health Sciences (a) 2,218,951 22,500
IDEX T. Rowe Price Small Cap (a) 3,046,082 32,319
IDEX Transamerica Growth
Opportunities (a) 6,646,972 39,549
Fixed-Income (20.3%)
IDEX Janus Flexible Income 1,319,654 13,474
IDEX PIMCO Real Return TIPS 1,050,422 10,609
IDEX PIMCO Total Return 1,386,465 14,586
IDEX Transamerica Conservative
High-Yield Bond 3,548,413 32,220
IDEX Transamerica Convertible Securities 4,725,136 53,489
Growth Equity (41.2%)
IDEX Great Companies-Technology (a) 6,742,650 24,341
IDEX Janus Growth (a) 926,147 18,273
IDEX Marsico Growth (a) 1,508,041 13,527
Shares Value
- --------------------------------------------------------------------------------
Growth Equity (continued)
IDEX Salomon All Cap (a) 6,013,647 $ 83,890
IDEX Salomon Investors Value 7,423,389 92,866
IDEX Transamerica Equity (a) 3,015,263 20,685
Specialty-Real Estate (2.2%)
IDEX Clarion Real Estate Securities 1,084,971 13,291
World Equity (11.5%)
IDEX American Century International (a) 7,976,130 64,048
IDEX Templeton Great Companies Global (a) 933,028 6,438
---------
Total Investment Companies (cost: $547,077) 602,127
---------
Total Investment Securities (cost: $547,077) $ 602,127
=========
SUMMARY:
Investments, at value 98.1% $ 602,127
Other assets in excess of liabilities 1.9% 11,464
--------- ---------
Net assets 100.0% $ 613,591
========= =========
NOTES TO SCHEDULE OF INVESTMENTS:
(a) No dividends were paid during the preceding twelve months.
(b) The Fund invests its assets in Class A shares of underlying IDEX Mutual
Funds, which are affiliates of the Fund.
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Asset Allocation-Moderate Growth Portfolio 3
IDEX Asset Allocation-Moderate Growth Portfolio
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
At October 31, 2003
(all amounts except per share amounts in thousands)
Assets:
Investment in affiliated mutual funds, at value (cost:
$547,077) $ 602,127
Cash 5,334
Receivables:
Shares of beneficial interest sold 12,562
Interest 1
Other 5
---------
620,029
---------
Liabilities:
Investment securities purchased 5,334
Accounts payable and accrued liabilities:
Shares of beneficial interest redeemed 577
Management and advisory fees 127
Distribution fees 240
Transfer agent fees 122
Other 38
---------
6,438
---------
Net Assets $ 613,591
=========
Net Assets Consist of:
Shares of beneficial interest, unlimited shares authorized $ 559,596
Accumulated net investment income (loss) -
Accumulated net realized gain (loss) from investment in
affiliated mutual funds (1,054)
Net unrealized appreciation (depreciation) on
investment in affiliated mutual funds 55,049
---------
Net Assets $ 613,591
=========
Shares Outstanding:
Class A 13,450
Class B 18,900
Class C 2,942
Class L 23,699
Class M 1,779
Net Asset Value Per Share:
Class A $ 10.13
Class B 10.09
Class C 10.09
Class L 10.09
Class M 10.09
Maximum Offering Price Per Share (a):
Class A $ 10.72
Class M 10.19
(a) 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.
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the year ended October 31, 2003
(all amounts in thousands)
Investment Income:
Interest $ 6
Dividends from affiliated mutual funds 2,425
--------
2,431
--------
Expenses:
Management and advisory fees 265
Transfer agent fees 591
Printing and shareholder reports 63
Custody fees 37
Administration fees 37
Legal fees 11
Auditing and accounting fees 19
Trustees fees 17
Registration fees 110
Other 10
Distribution and service fees:
Class A -
Class B 630
Class C 155
Class L 496
Class M 85
--------
Total expenses 2,526
--------
Net Investment Income (Loss) (95)
--------
Net Realized and Unrealized Gain (Loss):
Realized gain (loss) from investment in affiliated
mutual funds 26
Increase (decrease) in unrealized appreciation
(depreciation) on investment in affiliated
mutual funds 60,689
--------
Net Gain (Loss) on Investments in Affiliated Mutual
Funds 60,715
--------
Net Increase (Decrease) in Net Assets Resulting from
Operations $ 60,620
========
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Asset Allocation-Moderate Growth Portfolio 4
IDEX Asset Allocation-Moderate Growth Portfolio
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
For the year or period ended
(all amounts in thousands)
October 31, October 31,
2003 2002(a)
------------ -----------
Increase (Decrease) In Net Assets From:
Operations:
Net investment income (loss) $ (95) $ (18)
Net realized gain (loss) from investment
in affiliated mutual funds 26 (1,241)
Net unrealized appreciation
(depreciation) on investment in
affiliated mutual funds 60,689 (5,640)
--------- ---------
60,620 (6,899)
--------- ---------
Distributions to Shareholders:
From net investment income:
Class A (161) -
Class B (6) -
Class C (3) -
Class L (1) -
Class M (15) -
--------- ---------
(186) -
--------- ---------
From net realized gains:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
--------- ---------
- -
--------- ---------
Capital Share Transactions:
Proceeds from shares sold:
Class A 113,138 23,598
Class B 147,200 38,467
Class C 14,858 21,710
Class L 227,401 -
Class M 6,649 14,344
--------- ---------
509,246 98,119
--------- ---------
Dividends and distributions reinvested:
Class A 148 -
Class B 6 -
Class C 2 -
Class L 1 -
Class M 14 -
--------- ---------
171 -
--------- ---------
Cost of shares redeemed:
Class A (9,689) (1,413)
Class B (11,490) (2,297)
Class C (7,390) (2,531)
Class L (7,570) -
Class M (4,373) (727)
--------- ---------
(40,512) (6,968)
--------- ---------
468,905 91,151
--------- ---------
Net increase (decrease) in net assets 529,339 84,252
--------- ---------
Net Assets:
Beginning of year 84,252 -
--------- ---------
End of year $ 613,591 $ 84,252
========= =========
Accumulated Net Investment Income (Loss) $ - $ (1)
========= =========
October 31, October 31,
2003 2002(a)
------------ -----------
Share Activity:
Shares issued:
Class A 12,021 2,640
Class B 16,189 4,266
Class C 1,666 2,434
Class L 24,504 -
Class M 745 1,599
--------- ---------
55,125 10,939
--------- ---------
Shares issued-reinvested from
distributions:
Class A 17 -
Class B 1 -
Class C - -
Class L - -
Class M 2 -
--------- ---------
20 -
--------- ---------
Shares redeemed:
Class A (1,058) (170)
Class B (1,280) (276)
Class C (851) (307)
Class L (805) -
Class M (481) (86)
--------- ---------
(4,475) (839)
--------- ---------
Net increase (decrease) in shares
outstanding 50,670 10,100
========= =========
(a) Commenced operations on March 1, 2002.
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Asset Allocation-Moderate Growth Portfolio 5
IDEX Asset Allocation-Moderate Growth Portfolio
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share of beneficial interest outstanding throughout each period
-----------------------------------------------------------------------------------------------------------
Investment Operations Distributions
------------------------------------------ ----------------------------------------------------
Net Asset Net Asset
For the Value, Net Net Realized From Net From Net Value,
Period Beginning Investment and Unrealized Total Investment Realized Total End
Ended (d)(g) of Period Income (Loss) Gain (Loss) Operations Income Gains Distributions of Period
- ------------------------------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 $ 8.37 $ 0.04 $ 1.77 $ 1.81 $(0.05) $ - $(0.05) $10.13
10/31/2002 10.00 0.02 (1.65) (1.63) - - - 8.37
- ------------------------------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 8.33 (0.02) 1.78 1.76 - - - 10.09
10/31/2002 10.00 (0.01) (1.66) (1.67) - - - 8.33
- ------------------------------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 8.33 (0.02) 1.78 1.76 - - - 10.09
10/31/2002 10.00 (0.01) (1.66) (1.67) - - - 8.33
- ------------------------------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 8.31 (0.02) 1.80 1.78 - - - 10.09
- ------------------------------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 8.34 (0.01) 1.77 1.76 (0.01) - (0.01) 10.09
10/31/2002 10.00 (0.01) (1.65) (1.66) - - - 8.34
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
---------------------------------------------------------------------------
Ratio of Expenses
Net Assets, to Average Net Investment
For the End of Net Assets (a) Income (Loss) Portfolio
Period Total Period ----------------------- to Average Turnover
Ended (g) Return (c) (000's) Net (e) Total (f) Net Assets (a) Rate (b)
- -------------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 21.79% $ 136,295 0.44% 0.44% 0.48% 15%
10/31/2002 (16.30) 20,681 0.45 0.90 0.41 21
- -------------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 21.15 190,621 1.09 1.09 (0.17) 15
10/31/2002 (16.70) 33,241 1.10 1.55 (0.24) 21
- -------------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 21.15 29,672 1.09 1.09 (0.17) 15
10/31/2002 (16.70) 17,719 1.10 1.55 (0.24) 21
- -------------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 21.44 239,043 1.09 1.09 (0.17) 15
- -------------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 21.12 17,960 0.99 0.99 (0.07) 15
10/31/2002 (16.60) 12,611 1.00 1.45 (0.14) 21
- -------------------------------------------------------------------------------------------------------------------
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 are not annualized.
(d) Per share information is calculated based on average number of shares
outstanding.
(e) Ratio of Net Expenses to Average Net Assets is net of fee waivers and
reimbursements by the investment adviser, if any (see note 2).
(f) Ratio of Total Expenses to Average Net Assets includes all expenses before
fee waivers and reimbursements by the investment adviser.
(g) IDEX Asset Allocation-Moderate Growth Portfolio ("the Fund") commenced
operations on March 1, 2002. The inception date for the Fund's offering of
share Class L was November 11, 2002.
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Asset Allocation-Moderate Growth Portfolio 6
IDEX Asset Allocation-Moderate Growth Portfolio
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
At October 31, 2003
(all amounts in thousands)
NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
IDEX Mutual Funds is a Massachusetts business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company. IDEX Asset Allocation-Moderate Growth Portfolio
("the Fund"), part of IDEX Mutual Funds, began operations on March 1, 2002. On
March 3, 2003, the Fund changed its name from IDEX Moderately Aggressive Asset
Allocation to IDEX Asset Allocation-Moderate Growth Portfolio.
In the normal course of business, the Fund enters into contracts that contain a
variety of representations and warranties which provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown, as this would involve future claims that may be made against the Fund
and/or its affiliates that have not yet occurred. However, based on experience,
the Fund expects the risk of loss to be remote.
See the Prospectus and Statement of Additional Information for a description of
the Fund's investment objective.
In preparing the Fund's financial statements in accordance with accounting
principles generally accepted in the United States of America ("GAAP"),
estimates or assumptions (which could differ from actual results) may be used
that affect reported amounts and disclosures. The following policies were
consistently followed by the Fund, in accordance with GAAP.
Multiple class operations and expenses: The Fund currently offers five classes
of shares, each with a public offering price that reflects different sales
charges, if any, and expense levels. Effective November 11, 2002, Class C and M
shares were closed to new investors. Income, non-class specific expenses and
realized and unrealized gains and losses, are allocated daily to each class,
based upon the value of shares outstanding method as permitted under Rule 18f-3
of the 1940 Act. Each class bears its own specific expenses as well as a
portion of general, common expenses.
Security valuations: The Fund's investments are valued at the net asset values
of the underlying portfolios of IDEX Mutual Funds. The net asset values of the
underlying portfolios are determined at the close of the New York Stock
Exchange (generally 4:00 p.m. eastern time) on the valuation date.
Cash: The Fund may leave cash overnight in its cash account with the custodian,
Investors Bank & Trust Company ("IBT"). IBT has been contracted on behalf of
the Fund to invest the excess cash into a savings account, which at October 31,
2003, was paying an interest rate of 0.75%.
Security transactions and investment income: Security transactions are recorded
on the trade date. Security gains and losses are calculated on the specific
identification basis. Dividend income is recorded on the ex-dividend date.
Dividends and net realized gain (loss) from investment securities for the Fund
are from investments in shares of affiliated investment companies.
Dividend distributions: Distributions to shareholders are recorded on the
ex-dividend date and are determined in accordance with Federal income tax
regulations which may differ from GAAP.
NOTE 2. RELATED PARTY TRANSACTIONS
AEGON/Transamerica Fund Advisers, Inc. ("ATFA") is the Fund's investment
adviser. AEGON/Transamerica Fund Services, Inc. ("ATFS") is the Fund's
administrator. AFSG Securities Corp. ("AFSG") is the Fund's
distributor/principal underwriter. AEGON/Transamerica Investor Services, Inc.
("ATIS") is the 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. AUSA and WRL are wholly owned indirect
subsidiaries of AEGON NV, a Netherlands corporation.
ATFA has entered into consultant agreements with Morningstar Associates, LLC to
provide investment services to the Fund. ATFA compensates Morningstar
Associates, LLC as described in the Prospectus.
Transamerica Investment Management, LLC and Great Companies, LLC are affiliates
of the Fund and are sub-advisors to other funds within IDEX Mutual Funds.
Investment advisory fees: The Fund pays management fees to ATFA based on
average daily net assets ("ANA") at the following rate:
0.10% of ANA
ATFA currently voluntarily waives its advisory fee and will reimburse the Fund
to the extent that operating expenses, excluding 12b-1 fees, exceed the
following stated annual limit:
0.45% Expense Limit
If total fund expenses fall below the annual expense limitations agreed to by
the adviser within the succeeding three years, the Fund may be required to pay
the advisor a portion or all of the waived advisory fees.
Advisory Fee Available for
Waived Recapture Through
-------------- ------------------
Fiscal Year 2003 - 10/31/2006
Fiscal Year 2002 112 10/31/2005
For the year ended October 31, 2003, ATFA has voluntarily agreed to waive the
recapture of $33 reimbursed expenses that were otherwise eligible for
recapture.
IDEX Mutual Funds Annual Report 2003
IDEX Asset Allocation-Moderate Growth Portfolio 7
IDEX Asset Allocation-Moderate Growth Portfolio
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 2-(continued)
Distribution and service fees: The Fund has a 12b-1 distribution plan under the
1940 Act pursuant to which an annual fee, based on average daily net assets, is
paid to the distributor for various disbursements such as broker-dealer account
servicing fees and other promotional expenses of the Fund. The Fund is
authorized under the 12b-1 plan to pay fees on each class up to the following
limits:
Class A N/A
Class B 0.65%
Class C 0.65%
Class L 0.65%
Class M 0.55%
In addition, the underlying Funds' Class A shares in which the Fund invests
impose a 0.35% 12b-1 fee. To avoid duplication of 12b-1 fees, each class of
fund shares of the Fund has reduced the 12b-1 fees by the amount of the
underlying funds' Class A 12b-1 fees.
Underwriter commissions relate to front-end sales charges imposed for Class A
and M shares and contingent deferred sales charges from Classes B, L, M and
certain A share redemptions. For the year ended October 31, 2003, the
underwriter commissions were as follows:
Received by Underwriter $ 3,078
Retained by Underwriter 433
Contingent Sales Charges 282
Administrative services: The Fund has entered into an agreement with ATFS for
financial and legal fund administration services, which include such items as
compliance, expenses, financial statements and other reporting, distributions,
tax returns, prospectus preparation, board of trustees meeting support and
other legal matters. Transfer agent fees are reflected separately from
Administration fees on the Statement of Operations. The Legal fees on the
Statement of Operations are for fees paid to external legal counsel. ATFS
provides its services to the Fund at cost and is reimbursed monthly.
Transfer agent fees: The Fund incurs ATIS annual per-account charges (not in
thousands) of $20.00 for each open shareholder account and $1.63 for each
closed account maintained, and certain out of pocket expenses.
Deferred compensation plan: Each eligible Fund Trustee may elect participation
in the Deferred Compensation Plan ("the Plan"). Under the Plan, such Trustees
may defer payment of a percentage of their total fees earned as a Fund Trustee.
These deferred amounts may be invested in any IDEX Fund. At October 31, 2003,
the value of invested plan amounts was $4. Invested plan amounts and the total
liability for deferred compensation to the Trustees under the Plan at October
31, 2003, are included in Net assets in the accompanying Statement of Assets
and Liabilities.
NOTE 3. INVESTMENT TRANSACTIONS
The cost of securities purchased and proceeds from securities sold (excluding
short-term securities) for the year ended October 31, 2003, were as follows:
Purchases of securities:
Long-Term excluding U.S. Government $ 499,360
U.S. Government -
Proceeds from maturities and sales of securities:
Long-Term excluding U.S. Government 39,306
U.S. Government -
NOTE 4. FEDERAL INCOME TAX MATTERS
The Fund has not made any provision for federal income or excise taxes due to
its policy to distribute all of its taxable income and capital gains to its
shareholders and otherwise qualify as a regulated investment company under the
Internal Revenue Code. Income and capital gain distributions are determined in
accordance with income tax regulations, which may differ from GAAP. These
differences are primarily due to differing treatments for items including, but
not limited to, wash sales, net operating losses and capital loss
carryforwards.
Reclassifications between Undistributed net investment income (loss),
Undistributed net realized capital gains (loss) and Shares of beneficial
interest are made to reflect income and gains available for distribution under
federal tax regulations. Results of operations and net assets are not effected
by these reclassifications. These reclassifications are as follows:
Shares of beneficial interest, unlimited shares
authorized $ (443)
Undistributed net investment income (loss) 282
Accumulated net realized gain (loss) from
investment in mutual funds 161
The tax character of distributions paid may differ from the character of
distributions shown in the Statement of Changes in Net Assets
primarily due to short-term gains being treated as ordinary income for tax
purposes. The tax character of distributions paid during 2002 and 2003 was as
follows:
2002 Distributions paid from:
Ordinary income $ -
Long-term capital gains -
2003 Distributions paid from:
Ordinary income $ 186
Long-term capital gains -
IDEX Mutual Funds Annual Report 2003
IDEX Asset Allocation-Moderate Growth Portfolio 8
IDEX Asset Allocation-Moderate Growth Portfolio
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 4-(continued)
The tax basis components of distributable earnings as of October 31, 2003, are
as follows:
Undistributed Ordinary Income $ -
========
Undistributed Long-term Capital Gains $ -
========
Capital Loss Carryforward $ (978)
========
Net Unrealized Appreciation (Depreciation) $ 54,975
========
The capital loss carryforward utilized as of October 31, 2003 was $261. The
capital loss carryforward is available to offset future realized
capital gains through the periods listed:
Capital Loss
Carryforward Available through
- ------------ -----------------
$ 978 October 31, 2010
The aggregate cost of investments and composition of unrealized appreciation
(depreciation) for federal income tax purposes as of October 31, 2003, are as
follows:
Federal Tax Cost Basis $ 547,152
=========
Unrealized Appreciation $ 54,975
Unrealized (Depreciation) -
---------
Net Unrealized Appreciation (Depreciation) $ 54,975
=========
IDEX Mutual Funds Annual Report 2003
IDEX Asset Allocation-Moderate Growth Portfolio 9
- --------------------------------------------------------------------------------
Report of Independent Certified Public Accountants
To the Board of Trustees and Shareholders of
IDEX Asset Allocation-Moderate Growth Portfolio
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of IDEX Asset Allocation-Moderate
Growth Portfolio (the "Fund") (one of the portfolios constituting the IDEX
Mutual Funds) at October 31, 2003, and the results of its operations, the
changes in its net assets and the financial highlights for each of the periods
indicated, in conformity with accounting principles generally accepted in the
United States of America. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of the
Fund's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with auditing standards generally accepted
in the United States of America, which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits, which included confirmation of securities at October
31, 2003 by correspondence with the custodian and brokers, provide a reasonable
basis for our opinion.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Tampa, Florida
December 18, 2003
IDEX Mutual Funds Annual Report 2003
IDEX Asset Allocation-Moderate Growth Portfolio 10
IDEX Clarion Real Estate Securities
- --------------------------------------------------------------------------------
MARKET ENVIRONMENT
Real Estate Investment Trusts' (REITs) have delivered stellar performance over
the last year, with the Wilshire Real Estate Securities Index ("Wilshire Real
Estate") +29.27% since October 31, 2002. In an environment where investors had
return expectations for stocks to be in the single-digits and for bonds to be
only around 5%, real estate garnered an increasing share of asset allocations.
Real estate securities offer a very attractive (and liquid) alternative for
getting exposure to commercial real estate assets for investors of all shapes
and sizes. And though valuations are no longer depressed as they were two years
ago, REITs offer attractive valuations relative to historical pricing levels.
PERFORMANCE
From inception March 1, 2003 through October 31, 2003, IDEX Clarion Real Estate
Securities returned 23.80%. By comparison its benchmark, the Wilshire Real
Estate, returned 29.27%.
At inception, the portfolio was contemplated to be an "Income Focused Fund,"
which in the real estate securities universe means a significant focus on high
dividend yield, low earnings growth common stocks plus a reasonable portion of
the portfolio invested in preferred stocks. In a bull market for REITs, this
income-focused approach has proven to be an under-performing strategy for
beating the benchmark. Given the prior income focus, we felt unable to purchase
high growth, low dividend yield stocks. Upon review in the third quarter of
2003, we have decided to take a more benchmark-sensitive total return strategy,
which we believe will improve relative performance to the benchmark in the
future.
STRATEGY REVIEW
IDEX Clarion Real Estate Securities' total return investment philosophy is to
own a concentrated portfolio (30-40 stocks) of real estate stocks with the goal
of outperforming the Wilshire Real Estate through proprietary real estate
market research and knowledge. We seek to own attractively priced stocks that
offer favorable underlying real estate fundamentals from both a property type
and geographic perspective.
Real estate fundamentals continue to be soft. Currently, weak demand persists
in many parts of the country and across most property types. Accordingly, many
companies have offered modest and conservative earnings growth forecasts for
2004.
/s/ T. Ritson Ferguson
T. Ritson Ferguson
/s/ Joseph P. Smith
Joseph P. Smith
Co-Fund Managers
Clarion CRA Securities, LP
IDEX Mutual Funds Annual Report 2003
IDEX Clarion Real Estate Securities 1
IDEX Clarion Real Estate Securities
- --------------------------------------------------------------------------------
Comparison of change in value of $10,000 investment in Class A shares and its
comparative index.
Growth of $10,000
Inception of 3/1/03 through 10/31/03
Investment less sales charges - $9,452
[The following table was depicted as a mountain chart in the printed material.]
DATE Class A Wilshire RES
- -------------------- --------------- -----------------
3/1/2003 9,452 10,000
3/31/2003 9,717 10,254
6/30/2003 10,766 11,519
9/30/2003 11,578 12,733
10/31/2003 11,702 12,927
Average Annual Total Return for Periods Ended 10/31/03
- --------------------------------------------------------------------------------
From Inception
Inception Date
- --------------------------------------------------------------------------------
Class A (NAV) 23.80% 3/1/03
Class A (POP) 16.99% 3/1/03
Wilshire RES(1) 29.27% 3/1/03
- --------------------------------------------------------------------------------
Class B (NAV) 23.33% 3/1/03
Class B (POP) 18.33% 3/1/03
- --------------------------------------------------------------------------------
Class C (NAV) 23.33% 3/1/03
- --------------------------------------------------------------------------------
Class L (NAV) 23.33% 3/1/03
Class L (POP) 21.33% 3/1/03
- --------------------------------------------------------------------------------
Class M (NAV) 23.36% 3/1/03
Class M (POP) 21.12% 3/1/03
- --------------------------------------------------------------------------------
NOTES
(1) The Wilshire Real Estate Securities (Wilshire RES) 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.
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 shares, (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 a "non-diversified" fund may be subject to specific risks such
as susceptibility to single economic political or regulatory events and may be
subject to greater loss than investments in a diversified fund.
The risks of investing in REITs are similar to investing directly in real
estate. Investing in real estate presents its own risks, including declining
property values, overbuilding, low occupancy rates from commercial properties,
rising operating expenses and interest rates, as well as taxes and other
regulatory issues.
Periods less than 1 year represent total return and are not annualized.
This material must be preceded or accompanied by a current prospectus, which
includes specific contents regarding the investment objectives and policies of
this fund.
IDEX Mutual Funds Annual Report 2003
IDEX Clarion Real Estate Securities 2
IDEX Clarion Real Estate Securities
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
At October 31, 2003
(all amounts except share amounts in thousands)
Shares Value
- --------------------------------------------------------------------------------
PREFERRED STOCKS (0.8%)
Finance (0.8%)
Bedford Property Investors, Inc.-144A 11,000 $ 550
--------
Total Preferred Stocks (cost: $550) 550
--------
COMMON STOCKS (94.7%)
Holding & Other Investment Offices (92.7%)
Apartments (15.9%)
Camden Property Trust 74,860 2,964
Equity Residential 91,720 2,683
Gables Residential Trust 58,500 1,883
Home Properties of New York, Inc. 33,300 1,282
United Dominion Realty Trust, Inc. 113,100 1,974
Diversified (8.5%)
Catellus Development Corporation 50,400 1,122
Liberty Property Trust 74,049 2,694
Vornado Realty Trust 40,000 2,022
Health Care (4.0%)
Health Care REIT, Inc. 83,290 2,761
Hotels (6.7%)
Hersha Hospitality Trust 78,100 679
Host Marriott Corporation (a) 238,800 2,495
LaSalle Hotel Properties 81,900 1,380
Office Property (23.4%)
Arden Realty, Inc. 69,950 1,957
Boston Properties, Inc. 45,000 1,991
Corporate Office Properties Trust 49,000 948
Mack-Cali Realty Corporation 69,750 2,630
Maguire Properties, Inc. 126,800 2,764
Mission West Properties, Inc. 20,500 257
Prentiss Properties Trust 88,860 2,687
Trizec Properties, Inc. 202,000 2,697
Regional Mall (15.6%)
CBL & Associates Properties, Inc. 49,680 2,648
General Growth Properties, Inc. 36,000 2,754
Macerich Company (The) (b) 66,100 2,657
Mills Corporation (The) 64,300 2,623
Shopping Center (12.3%)
Cedar Shopping Centers, Inc. (a)(b) 116,000 1,336
Heritage Property Investment Trust 37,130 1,047
New Plan Realty Trust, Inc. 82,900 1,882
Pennsylvania Real Estate Investment Trust 39,500 1,319
Regency Centers Corporation (b) 20,000 742
Tanger Factory Outlet Centers, Inc. 51,100 2,063
Shares Value
- --------------------------------------------------------------------------------
Warehouse (6.3%)
AMB Property Corporation 44,000 $ 1,320
First Industrial Realty Trust, Inc. 40,000 1,292
ProLogis 58,000 1,713
Hotels & Other Lodging Places (2.0%)
Hotels (2.0%)
Starwood Hotels & Resorts Worldwide, Inc. 41,000 1,383
--------
Total Common Stocks (cost: $61,351) 64,649
--------
Principal Value
- --------------------------------------------------------------------------------
SECURITY LENDING COLLATERAL (5.6%)
Debt (4.9%)
Bank Notes (0.6%)
Canadian Imperial Bank of Commerce
1.12%, due 11/04/2003 $ 167 $ 167
Fleet National Bank
1.06%, due 01/21/2004 233 233
Euro Dollar Terms (2.8%)
Bank of Montreal
1.04%, due 11/14/2003 117 117
1.03%, due 11/13/2003 133 132
Bank of Nova Scotia (The)
1.06%, due 11/12/2003 67 67
Bank of Scotland
1.04%, due 11/14/2003 133 133
Citigroup Inc.
1.08%, due 01/05/2004 200 200
Credit Agricole Indosuez
1.08%, due 01/06/2004 147 147
Den Danske Bank
1.08%, due 01/20/2004 200 200
1.04%, due 11/10/2003 67 67
Royal Bank of Canada
1.06%, due 12/08/2003 67 67
1.04%, due 11/24/2003 167 167
Royal Bank of Scotland Group PLC (The)
1.08%, due 01/15/2004 200 200
SouthTrust Bank
1.08%, due 01/16/2004 200 200
Wells Fargo & Company
1.04%, due 11/20/2003 200 200
Promissory Notes (0.3%)
Goldman Sachs Group, Inc. (The)
1.15%, due 11/03/2003 233 233
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Clarion Real Estate Securities 3
IDEX Clarion Real Estate Securities
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Principal Value
- --------------------------------------------------------------------------------
Repurchase Agreements (1.2%) (c)
Goldman Sachs Group, Inc. (The)
1.10% Repurchase Agreement
dated 10/31/2003 to be repurchased
at $67 on 11/03/2003 $ 67 $ 67
Merrill Lynch & Co., Inc.
1.10% Repurchase Agreement
dated 10/31/2003 to be repurchased
at $766 on 11/03/2003 766 766
Shares Value
- --------------------------------------------------------------------------------
Investment Companies (0.7%)
Money Market Funds (0.7%)
Merrimac Cash Series Fund-
Premium Class
1-day yield of 0.97% 466,482 $ 466
-------
Total Security Lending Collateral (cost: $3,829) 3,829
-------
Total Investment Securities (cost: $65,730) $69,028
=======
SUMMARY:
Investments, at value 101.1% $69,028
Liabilities in excess of other assets (1.1)% (745)
------- -------
Net assets 100.0% $68,283
======= =======
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 (see Note
1). The value at October 31, 2003, of all securities on loan is $3,714.
(c) Cash collateral for the Repurchase Agreements, valued at $850, 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:
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 financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Clarion Real Estate Securities 4
IDEX Clarion Real Estate Securities
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
At October 31, 2003
(all amounts except per share amounts in thousands)
Assets:
Investment securities, at value (cost: $65,730)
(including $3,714 of securities loaned) $ 69,028
Cash 1,788
Receivables:
Investment securities sold 676
Shares of beneficial interest sold 294
Dividends 440
Other 2
---------
72,228
---------
Liabilities:
Accounts payable and accrued liabilities:
Shares of beneficial interest redeemed 6
Management and advisory fees 66
Distribution fees 22
Transfer agent fees 7
Payable for securities on loan 3,829
Other 15
---------
3,945
---------
Net Assets $ 68,283
=========
Net Assets Consist of:
Shares of beneficial interest, unlimited shares authorized $ 61,309
Undistributed net investment income (loss) 576
Undistributed net realized gain (loss) from investment
securities 3,100
Net unrealized appreciation (depreciation) on
investment securities 3,298
---------
Net Assets $ 68,283
=========
Shares Outstanding:
Class A 5,232
Class B 148
Class C 19
Class L 157
Class M 20
Net Asset Value Per Share:
Class A $ 12.25
Class B 12.22
Class C 12.22
Class L 12.22
Class M 12.22
Maximum Offering Price Per Share (a):
Class A $ 12.96
Class M 12.34
(a) 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.
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the period ended October 31, 2003 (b)
(all amounts in thousands)
Investment Income:
Interest $ 5
Dividends 1,653
-------
1,658
-------
Expenses:
Management and advisory fees 218
Transfer agent fees 34
Printing and shareholder reports 2
Custody fees 8
Administration fees 22
Legal fees 1
Auditing and accounting fees 11
Trustees fees 2
Registration fees 83
Other 4
Distribution and service fees:
Class A 90
Class B 6
Class C 1
Class L 6
Class M 1
-------
Total expenses 489
Less:
Advisory fee waiver (3)
-------
Net expenses 486
-------
Net Investment Income (Loss) 1,172
-------
Net Realized and Unrealized Gain (Loss):
Realized gain (loss) from investment securities 3,100
Increase (decrease) in unrealized appreciation
(depreciation) on investment securities 3,298
-------
Net Gain (Loss) on Investment Securities 6,398
-------
Net Increase (Decrease) in Net Assets Resulting
from Operations $ 7,570
=======
(b) Commenced operations on March 1, 2003.
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Clarion Real Estate Securities 5
IDEX Clarion Real Estate Securities
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
For the period ended
(all amounts in thousands)
October 31,
2003 (a)
-----------
Increase (Decrease) In Net Assets From:
Operations:
Net investment income (loss) $ 1,172
Net realized gain (loss) from investment securities 3,100
Net unrealized appreciation (depreciation) on
investment securities 3,298
--------
7,570
--------
Distributions to Shareholders:
From net investment income:
Class A (583)
Class B (13)
Class C (2)
Class L (14)
Class M (2)
--------
(614)
--------
From net realized gains:
Class A -
Class B -
Class C -
Class L -
Class M -
--------
-
--------
Capital Share Transactions:
Proceeds from shares sold:
Class A 57,510
Class B 1,793
Class C 200
Class L 1,816
Class M 215
--------
61,534
--------
Dividends and distributions reinvested:
Class A 582
Class B 11
Class C 2
Class L 11
Class M 1
--------
607
--------
Cost of shares redeemed:
Class A (610)
Class B (139)
Class C (6)
Class L (54)
Class M (5)
--------
(814)
--------
61,327
--------
Net increase (decrease) in net assets 68,283
--------
Net Assets:
Beginning of year -
--------
End of year $ 68,283
========
Undistributed Net Investment Income (Loss) $ 576
========
October 31,
2003 (a)
-----------
Share Activity:
Shares issued:
Class A 5,238
Class B 159
Class C 19
Class L 160
Class M 20
--------
5,596
--------
Shares issued-reinvested from distributions:
Class A 49
Class B 1
Class C -
Class L 1
Class M -
--------
51
--------
Shares redeemed:
Class A (55)
Class B (12)
Class C -
Class L (4)
Class M -
--------
(71)
--------
Net increase (decrease) in shares outstanding 5,576
========
(a) Commenced operations March 1, 2003.
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Clarion Real Estate Securities 6
IDEX Clarion Real Estate Securities
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share of beneficial interest outstanding throughout each period
-----------------------------------------------------------------------------------------------------------
Investment Operations Distributions
------------------------------------------- -------------------------------------------------
Net Asset Net Asset
For the Value, Net Net Realized From Net From Net Value,
Period Beginning Investment and Unrealized Total Investment Realized Total End
Ended (d)(g) of Period Income (Loss) Gain (Loss) Operations Income Gains Distributions of Period
- ------------------------------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 $ 10.00 $ 0.43 $ 1.95 $ 2.38 $ (0.13) $ - $ (0.13) $ 12.25
- ------------------------------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 10.00 0.38 1.95 2.33 (0.11) - (0.11) 12.22
- ------------------------------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 10.00 0.37 1.96 2.33 (0.11) - (0.11) 12.22
- ------------------------------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 10.00 0.38 1.95 2.33 (0.11) - (0.11) 12.22
- ------------------------------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 10.00 0.38 1.95 2.33 (0.11) - (0.11) 12.22
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
-----------------------------------------------------------------------
Ratio of Expenses
Net Assets, to Average Net Investment
For the End of Net Assets (a) Income (Loss) Portfolio
Period Total Period ----------------------- to Average Turnover
Ended (g) Return (c) (000's) Net (e) Total (f) Net Assets (a) Rate (b)
- ----------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 23.80% $ 64,090 1.75% 1.76% 5.55% 95%
- ----------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 23.33 1,804 2.40 2.41 4.91 95
- ----------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 23.33 226 2.39 2.40 4.91 95
- ----------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 23.33 1,913 2.40 2.41 4.91 95
- ----------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 23.36 250 2.30 2.31 5.01 95
- ----------------------------------------------------------------------------------------------------------------
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 are not annualized.
(d) Per share information is calculated based on average number of shares
outstanding.
(e) Ratio of Net Expenses to Average Net Assets shows the net expense ratio,
which is total expenses less reimbursement by the investment adviser.
(f) Ratio of Total Expenses to Average Net Assets does not take into account
reimbursements by the investment adviser or affiliated brokerage and
custody earnings credits, if any.
(g) IDEX Clarion Real Estate Securities commenced operations on March 1, 2003.
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Clarion Real Estate Securities 7
IDEX Clarion Real Estate Securities
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
At October 31, 2003
(all amounts in thousands)
NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
IDEX Mutual Funds is a Massachusetts business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company. IDEX Clarion Real Estate Securities ("the
Fund"), part of IDEX Mutual Funds, began operations on March 1, 2003. The Fund
is "non-diversified" under the 1940 Act.
In the normal course of business, the Fund enters into contracts that contain a
variety of representations and warranties and which provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown, as this would involve future claims that may be made against the Fund
and/or its affiliates that have not yet occurred. However, based on experience,
the Fund expects the risk of loss to be remote.
See the Prospectus and Statement of Additional Information for a description of
the Fund's investment objective.
In preparing the Fund's financial statements in accordance with accounting
principles generally accepted in the United States of America ("GAAP"),
estimates or assumptions (which could differ from actual results) may be used
that affect reported amounts and disclosures. The following policies were
consistently followed by the Fund, in accordance with GAAP.
Multiple class operations and expenses: The Fund currently offers five classes
of shares, each with a public offering price that reflects different sales
charges, if any, and expense levels. Class C and M shares are not available to
new investors. Income, non-class specific expenses and realized and unrealized
gains and losses, are allocated daily to each class, based upon the value of
shares outstanding method as permitted under Rule 18f-3 of the 1940 Act. Each
class bears its own specific expenses as well as a portion of general, common
expenses.
Security valuations: Fund investments traded on an exchange are valued at the
closing price on the day of valuation on the exchange where the security is
principally traded. With respect to securities traded on the NASDAQ INMS, such
closing price may be the last reported sales price or the NASDAQ Official
Closing Price.
Securities traded in the over-the-counter market and listed securities for
which no sale was reported on that date are valued at the last quoted bid
price.
Debt securities are valued by independent pricing services; however, those that
mature in sixty days or less are valued at amortized cost, which approximates
market.
Other securities for which quotations are not readily available are valued at
fair value determined in good faith, in accordance with procedures established
by and, under the supervision of the Board of Trustees and the Fund's Valuation
Committee.
Cash: The Fund may leave cash overnight in its cash account with the custodian,
Investor's Bank & Trust Company ("IBT"). IBT has been contracted on behalf of
the Fund to invest the excess cash into a savings account, which at October 31,
2003, was paying an interest rate of 0.75%.
Directed brokerage: The sub-adviser, to the extent consistent with the best
execution and usual commission rate policies and practices, may place security
transactions of the Fund with broker/dealers with which IDEX Mutual Funds has
established a Directed Brokerage Program. A Directed Brokerage Program is any
arrangement under which a broker/dealer applies a portion of the commissions
received by such broker/dealer on the security transactions to the Fund. In no
event will commissions paid by the Fund be used to pay expenses that would
otherwise be borne by any other funds within IDEX Mutual Funds, or by any other
party. Directed commissions from inception March 1, 2003, through October 31,
2003, of $1 are included in net realized gains in the Statement of Operations.
Securities lending: The Fund may lend securities to enhance fund earnings from
investing cash collateral received in making such loans to qualified borrowers
(typically broker/dealers). The Fund has engaged its custodian bank, IBT, as a
lending agent to administer its securities lending program. IBT earned less
than $1 of program net income for its services. When the Fund makes a security
loan, it receives cash collateral as protection against the risk that the
borrower will default on the loan, and records an asset for the cash invested
collateral and a liability for the return of the collateral.
Securities on loan are to be included in Investment securities at value on the
Statement of Assets and Liabilities and remain on the Schedule of Investments.
Loans of securities are required to be secured by collateral at least equal to
102% of the value of the securities at inception of the loan, and not less then
100% thereafter. The Fund may invest cash collateral in short-term money market
instruments including: U.S. Treasury Bills, U.S. agency obligations, commercial
paper, money market mutual funds, repurchase agreements and other highly rated,
liquid investments. During the life of securities loans, the collateral and
securities loaned remain subject to fluctuation in value. IBT marks to market
securities loaned and the collateral each business day. If additional
collateral is due (at least $1), IBT collects additional cash collateral from
the borrowers. Although securities loaned will be fully collateralized at all
times, IBT may experience delays in, or may be prevented from, recovering the
collateral on behalf of the Fund. The Fund may recall a loaned security
position at any time from the borrower through IBT. In the event the borrower
fails to timely return a recalled security, IBT may indemnify the Fund by
purchasing replacement securities for the Fund at its own expense and claiming
the collateral to fund such a purchase. IBT absorbs the loss if the collateral
value is not sufficient to cover the cost of the replacement securities. If
replacement securities are not available, IBT will credit the equivalent cash
value to the Fund.
IDEX Mutual Funds Annual Report 2003
IDEX Clarion Real Estate Securities 8
IDEX Clarion Real Estate Securities
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 1-(continued)
Income from securities lending is included in the Statement of Operations. The
amounts of collateral and value of securities on loan are included in the
Statement of Assets and Liabilities as well as on the Schedule of Investments.
Real Estate Investment Trusts ("REITs"): There are certain additional risks
involved in investing in REITs. These include, but are not limited to, economic
conditions, changes in zoning laws, real estate values, property taxes and
interest rates. Since the Fund invests primarily in real estate related
securities, the value of its shares may fluctuate more widely than the value of
shares of a fund that invests in a broad range of industries.
Security transactions and investment income: Security transactions are recorded
on the trade date. Security gains and losses are calculated on the specific
identification basis. Dividend income is recorded on the ex-dividend date or,
in the case of foreign securities, as soon as the Fund is informed of the
ex-dividend date. Interest income, including accretion of discounts and
amortization of premiums, is recorded on the accrual basis commencing on the
settlement date.
Dividend distributions: Distributions to shareholders are recorded on the
ex-dividend date and are determined in accordance with Federal income tax
regulations which may differ from GAAP.
NOTE 2. RELATED PARTY TRANSACTIONS
AEGON/Transamerica Fund Advisers, Inc. ("ATFA") is the Fund's investment
adviser. AEGON/Transamerica Fund Services, Inc. ("ATFS") is the Fund's
administrator. AFSG Securities Corp. ("AFSG") is the Fund's
distributor/principal underwriter. AEGON/Transamerica Investor Services, Inc.
("ATIS") is the 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. AUSA and WRL are wholly owned indirect
subsidiaries of AEGON NV, a Netherlands corporation.
The following schedule reflects the percentage of fund assets owned by
affiliated mutual funds (ie: through the assets allocation funds)
Net % of
Assets Net Assets
-------- -----------
IDEX Asset Allocation Conservative
Portfolio 13,675 20%
IDEX Asset Allocation Growth 7,394 11%
IDEX Asset Allocation Moderate
Growth 13,291 19%
IDEX Asset Allocation Moderate 28,285 41%
----------
92%
Investment advisory fees: The Fund pays management fees to ATFA based on
average daily net assets ("ANA") at the following stated break points:
0.80% of the first $250 million of ANA
0.775% of the next $250 million of ANA
0.70% of the next $500 million of ANA
0.65% of ANA over $1 billion
ATFA currently voluntarily waives its advisory fee and will reimburse the Fund
to the extent that operating expenses, excluding 12b-1 fees, exceed the
following stated annual limit:
1.40% Expense Limit
If total fund expenses fall below the annual expense limitations agreed to by
the adviser within the succeeding three years, the Fund may be required to pay
the advisor a portion or all of the waived advisory fees.
Distribution and service fees: The Fund has a 12b-1 distribution plan under the
1940 Act pursuant to which an annual fee, based on average daily net assets, is
paid to the distributor for various disbursements such as broker-dealer account
servicing fees and other promotional expenses of the Fund. The 12b-1 fee for
the Fund is comprised of a 0.25% service fee and the remaining amount is an
asset-based sales charge/distribution fee. The Fund is authorized under the
12b-1 plan to pay fees on each class up to the following limits:
Class A 0.35%
Class B 1.00%
Class C 1.00%
Class L 1.00%
Class M 0.90%
Underwriter commissions relate to front-end sales charges imposed for Class A
and M shares and contingent deferred sales charges from Classes B, L, M and
certain A share redemptions. From inception March 1, 2003 through October 31,
2003, the underwriter commissions were as follows:
Received by Underwriter $ 28
Retained by Underwriter 4
Contingent Sales Charges 6
Administrative services: The Fund has entered into an agreement with ATFS for
financial and legal fund administration services, which include such items as
compliance, expenses, financial statements and other reporting, distributions,
tax returns, prospectus preparation, board of trustees meeting support and
other legal matters. Transfer agent fees are reflected separately from
Administration fees on the Statement of Operations. The Legal fees on the
Statement of Operations are for fees paid to external legal counsel. ATFS
provides its services to the Fund at a cost and is reimbursed monthly.
Transfer agent fees: The Fund incurs ATIS annual per-account charges (not in
thousands) of $20.00 for each open shareholder account and $1.63 for each
closed account maintained, and certain out of pocket expenses.
IDEX Mutual Funds Annual Report 2003
IDEX Clarion Real Estate Securities 9
IDEX Clarion Real Estate Securities
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 2-(continued)
Deferred compensation plan: Each eligible Fund Trustee may elect participation
in the Deferred Compensation Plan ("the Plan"). Under the Plan, such Trustees
may defer payment of a percentage of their total fees earned as a Fund Trustee.
These deferred amounts may be invested in any IDEX Fund. At October 31, 2003,
the value of invested plan amounts was less than $1. Invested plan amounts and
the total liability for deferred compensation to the Trustees under the Plan at
October 31, 2003, are included in Net assets in the accompanying Statement of
Assets and Liabilities.
NOTE 3. INVESTMENT TRANSACTIONS
The cost of securities purchased and proceeds from securities sold (excluding
short-term securities) from inception March 1, 2003 through October 31, 2003,
are as follows:
Purchases of securities:
Long-Term excluding U.S. Government $ 99,986
U.S. Government -
Proceeds from maturities and sales of securities:
Long-Term excluding U.S. Government 40,854
U.S. Government -
NOTE 4. FEDERAL INCOME TAX MATTERS
The Fund has not made any provision for federal income or excise taxes due to
its policy to distribute all of its taxable income and capital gains to its
shareholders and otherwise qualify as a regulated investment company under the
Internal Revenue Code. Income and capital gain distributions are determined in
accordance with income tax regulations, which may differ from GAAP. These
differences are primarily due to differing treatments for items including, but
not limited to, wash sales.
Reclassifications between Undistributed net investment income (loss),
Undistributed net realized capital gains (loss) and Shares of beneficial
interest are made to reflect income and gains available for distribution under
federal tax regulations. Results of operations and net assets are not effected
by these reclassifications. These reclassifications are as follows. Dividend
income is recorded at management's estimate of the income included in
distributions from the REIT investments. Distributions received in excess of
this estimated amount are recorded as a reduction of the cost of investments.
The actual amounts of income, return of capital, and capital gains are only
determined by each REIT after the fiscal year-end, and may differ from the
estimated amounts:
Shares of beneficial interest, unlimited
shares authorized $ (18)
Undistributed net investment income (loss) 18
Undistributed net realized gain (loss) from
investment securities -
The tax character of distributions paid may differ from the character of
distributions shown in the Statements of Changes in Net Assets primarily due to
short-term gains being treated as ordinary income for tax purposes. The tax
character of distributions paid during 2003 was as follows:
2003 Distributions paid from:
Ordinary income $ 614
Long-term capital gains -
The tax basis components of distributable earnings as of October 31, 2003, are
as follows:
Undistributed Ordinary Income $ 3,569
=======
Undistributed Long-term Capital Gains $ 132
=======
Capital Loss Carryforward $ -
=======
Net Unrealized Appreciation (Depreciation) $ 3,272
=======
The aggregate cost of investments and composition of unrealized appreciation
(depreciation) for federal income tax purposes as of October 31, 2003, are as
follows:
Federal Tax Cost Basis $65,756
=======
Unrealized Appreciation $ 3,882
Unrealized (Depreciation) (610)
-------
Net Unrealized Appreciation (Depreciation) $ 3,272
=======
Supplemental Tax Information
(unaudited)
For dividends paid during the year ended October 31, 2003, the Fund designates
qualified dividend income to the maximum extent allowable.
For corporate shareholders, 10% of investment income (dividend income plus
short-term gains, if any) qualifies for the dividends received deduction.
The information and distributions reported herein may differ from the
information and distributions taxable to the shareholders for the calendar year
ending December 31, 2003. Complete information will be computed and reported in
conjunction with your 2003 Form 1099-DIV.
IDEX Mutual Funds Annual Report 2003
IDEX Clarion Real Estate Securities 10
- --------------------------------------------------------------------------------
Report of Independent Certified Public Accountants
To the Board of Trustees and Shareholders of
IDEX Clarion Real Estate Securities
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of IDEX Clarion Real Estate
Securities (the "Fund") (one of the portfolios constituting the IDEX Mutual
Funds) at October 31, 2003, and the results of its operations, the changes in
its net assets and the financial highlights for the period March 1, 2003
(commencement of operations) through October 31, 2003, in conformity with
accounting principles generally accepted in the United States of America. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audit. We conducted our audit of these financial statements in accordance
with auditing standards generally accepted in the United States of America,
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audit, which included
confirmation of securities at October 31, 2003 by correspondence with the
custodian and brokers, provides a reasonable basis for our opinion.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Tampa, Florida
December 18, 2003
IDEX Mutual Funds Annual Report 2003
IDEX Clarion Real Estate Securities 11
IDEX Federated Tax Exempt
- --------------------------------------------------------------------------------
MARKET ENVIRONMENT
The twelve-month period has been characterized by significant economic
uncertainty. Even though the recession was officially declared over, the
economic reports failed to show many signs of the recovery. On June 25, 2003,
the Federal Reserve Board ("Fed") reduced the Federal Funds rate ("Funds rate")
by 25 basis points to a forty-five year low and labor market weakness continued
to be a major concern. However, an accelerated money supply, tax cuts, low
interest rates, a declining dollar and the start of the presidential election
cycle provided stimulus to the U.S. economy. The bond market rallied after the
May, 2003 Fed meeting with the ten-year Treasury bond yield declining by
approximately 80 basis points to a cycle low of 3.11%. The Fed's apparent
concerns about deflation and the potential for additional reductions in the
Funds rate, combined with the possibility of non-traditional Federal Open
Market Committee ("FOMC") intervention (buying of notes and bonds in the open
market), drove interest rates to unsustainable lows. After the June Fed
meeting, it became apparent that U.S. economic growth was picking up momentum.
The ten-year Treasury bond yield then rose over 140 basis points as the market
adjusted to the prospects of faster economic growth and possible end of the
Fed's easing cycle. The war in Iraq, the reconstruction of Afghanistan and the
continuing threat of terrorism have been significant geopolitical wildcards
that kept the financial markets and the Fed uneasy.
PERFORMANCE
For the year ended October 31, 2003, IDEX Federated Tax Exempt Class A shares
returned 5.26%. By comparison its benchmark, the Lehman Brothers Municipal Bond
Index, returned 5.11%. The portfolio's weighting in the 15-year to 20-year
maturity range provided considerable out-performance over the period.
Maintaining portfolio duration neutral to its benchmark also benefited
performance as interest rates showed significant volatility. Sector selection
added positive incremental return with the portfolio's overweight in health
care and underweight in general obligation debt. In the current fiscal year,
thirty states have missed their revenue targets that led to additional spread
widening among general obligation debt issuers. The portfolio's underweighting
in lower quality credits (BBB and non-investment grade) had a negative impact
on performance. Lower quality municipal debt significantly outperformed over
the period as investors "chased yield" in the marketplace and bid up the prices
of lower quality paper.
STRATEGY REVIEW
Strategy has been focused on making selective purchases of lower investment
grade (BBB, A) credits. Credit spreads are wide enough to offer the potential
for attractive returns going forward. Revenue bonds with dedicated revenue
streams are being emphasized while exposure to general obligation and insured
municipal debt is being reduced. Premium coupons are being emphasized because
of their lower volatility and sensitivity to changes in interest rates. The
portfolio is maintaining a neutral duration target relative to its benchmark.
/s/ J. Scott Albrecht
J. Scott Albrecht
/s/ Mary Jo Ochson
Mary Jo Ochson
Co-Fund Managers
Federated Investment Management Company
IDEX Mutual Funds Annual Report 2003
IDEX Federated Tax Exempt 1
IDEX Federated Tax Exempt
- --------------------------------------------------------------------------------
Comparison of change in value of $10,000 investment in Class A shares and its
comparative index.
Growth of $10,000
Inception of 10/31/93 through 10/31/03
Investment less sales charges - $9,525
[The following table was depicted as a mountain chart in the printed material.]
DATE Class A LBMB
- ---------------------- ------------- ---------------
10/31/1993 9,525 10,000
12/31/1993 9,594 10,121
3/31/1994 9,304 9,565
6/30/1994 9,386 9,671
9/30/1994 9,459 9,737
12/31/1994 9,375 9,598
3/31/1995 9,875 10,276
6/30/1995 10,033 10,524
9/30/1995 10,192 10,826
12/31/1995 10,581 11,273
3/31/1996 10,409 11,137
6/30/1996 10,540 11,223
9/30/1996 10,794 11,480
12/31/1996 10,992 11,772
3/31/1997 10,990 11,744
6/30/1997 11,343 12,149
9/30/1997 11,738 12,515
12/31/1997 12,105 12,855
3/31/1998 12,204 13,003
6/30/1998 12,418 13,201
9/30/1998 12,751 13,606
12/31/1998 12,656 13,687
3/31/1999 12,726 13,809
6/30/1999 12,413 13,565
9/30/1999 12,111 13,511
12/31/1999 11,863 13,406
3/31/2000 12,322 13,798
6/30/2000 12,450 14,006
9/30/2000 12,702 14,345
12/31/2000 13,357 14,972
3/31/2001 13,545 15,305
6/30/2001 13,528 15,404
9/30/2001 13,885 15,837
12/31/2001 13,719 15,740
3/31/2002 13,817 15,888
6/30/2002 14,258 16,469
9/30/2002 14,944 17,252
12/31/2002 14,917 17,252
3/31/2003 15,111 17,459
6/30/2003 15,478 17,909
9/30/2003 15,487 17,923
10/31/2003 15,398 17,833
Average Annual Total Return for Periods Ended 10/31/03
- --------------------------------------------------------------------------------
From Inception
1 year 5 years 10 years Inception Date
- --------------------------------------------------------------------------------
Class A (NAV) 5.26% 3.98% 4.92% 7.01% 4/1/85
Class A (POP) 0.26% 2.97% 4.41% 6.73% 4/1/85
LBMB(1) 5.11% 5.56% 5.95% 8.32% 4/1/85
- --------------------------------------------------------------------------------
Class B (NAV) 4.48% 3.30% - 4.56% 10/1/95
Class B (POP) -0.52% 3.12% - 4.56% 10/1/95
- --------------------------------------------------------------------------------
Class C (NAV) 4.57% - - 6.04% 11/1/99
- --------------------------------------------------------------------------------
Class L (NAV) - - - 3.76% 11/11/02
Class L (POP) - - - 1.76% 11/11/02
- --------------------------------------------------------------------------------
Class M (NAV) 5.00% 3.71% 4.65% 4.64% 10/1/93
Class M (POP) 2.95% 3.50% 4.55% 4.54% 10/1/93
- --------------------------------------------------------------------------------
NOTES
(1) The Lehman Brothers Municipal Bond (LBMB) 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 Micropal(R)(C) 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 4.75% 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 shares, (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.
Income derived from this fund may be subject to federal alternative minimum
tax, as well as state and/or local taxes.
Periods less than 1 year represent total return and are not annualized.
This material must be preceded or accompanied by a current prospectus, which
includes specific contents regarding the investment objectives and policies of
this fund.
IDEX Mutual Funds Annual Report 2003
IDEX Federated Tax Exempt 2
IDEX Federated Tax Exempt
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
At October 31, 2003
(all amounts in thousands)
Principal Value
- ---------------------------------------------------------------------------------------------------
LONG-TERM MUNICIPAL BONDS (97.4%)
Alabama (1.5%)
Alabama Water Pollution Control,
Revenue Bonds,
5.50%, due 08/15/2023 $ 500 $ 530
Arkansas (1.4%)
Jefferson County Hospital Association,
Revenue Bonds, Series B,
5.80%, due 06/01/2021 500 523
California (5.3%)
California State,
General Obligation Bonds,
5.25%, due 02/01/2014 500 533
Los Angeles Water and Power Division,
Revenue Bonds, Series A-A-1,
5.25%, due 07/01/2019 500 534
Sacramento Municipal Utilities,
Revenue Bonds, Series P,
5.25%, due 08/15/2021 300 317
Torrance Memorial Medical Center,
Revenue Bonds, Series A,
6.00%, due 06/01/2022 500 537
Colorado (1.6%)
Colorado Department of Transportation,
Revenue Bonds, Series A,
5.50%, due 06/15/2015 500 577
District of Columbia (1.5%)
District of Columbia Water and Sewer
Authority, Revenue Bonds,
5.50%, due 10/01/2017 500 565
Florida (1.5%)
Orlando Utilities, Community Water and
Electric Division, Revenue Bonds,
5.25%, due 10/01/2020 500 530
Georgia (1.5%)
Clayton County Water Authority,
Revenue Bonds,
5.13%, due 05/01/2021 500 564
Illinois (7.4%)
Illinois Educational Facilities Authority,
Revenue Bonds, Series A,
5.00%, due 07/01/2026 500 484
Illinois State Partnership, Department
of Central Management,
Public Improvements,
General Obligation Bonds,
5.65%, due 07/01/2017 1,000 1,102
McHenry County Community School
District,
General Obligation Bonds, Series A,
5.85%, due 01/01/2016 1,000 1,110
Principal Value
- ---------------------------------------------------------------------------------------------------
Indiana (4.5%)
Indiana State Development Finance
Authority, Revenue Bonds,
5.25%, due 12/01/2022 $ 500 $ 530
Indianapolis Gas Utility,
Revenue Bonds, Series A,
5.25%, due 08/15/2012 1,000 1,097
Iowa (2.2%)
Iowa State Certificate of Participation,
Revenue Bonds,
6.50%, due 07/01/2006 775 786
Louisiana (1.4%)
Sabine River Authority, Water Facilities,
Revenue Bonds,
6.20%, due 02/01/2025 500 519
Massachusetts (1.5%)
Massachusetts State Development Finance
Agency, Revenue Bonds,
6.38%, due 07/01/2023 500 530
Michigan (5.8%)
Cornell Michigan, Economic Development,
Revenue Bonds,
5.88%, due 05/01/2018 500 513
Michigan Municipal Bond Authority,
Revenue Bonds,
5.50%, due 10/01/2022 500 582
Michigan State Strategic Fund Ltd.,
Revenue Bonds,
5.45%, due 09/01/2029 1,000 1,017
Minnesota (1.4%)
Minneapolis & St. Paul Minnesota
Housing & Redevelopment Authority,
Revenue Bonds,
6.00%, due 12/01/2019 500 518
Mississippi (1.6%)
Lowdes County Solid Waste Disposal &
Pollution Control, Revenue Bonds,
6.70%, due 04/01/2022 500 569
Nevada (2.6%)
Clark County Industrial Development,
Revenue Bonds,
5.45%, due 03/01/2038 400 418
Clark County School District,
School Improvements,
General Obligation Bonds, Series F,
5.00%, due 06/15/2006 500 542
New Hampshire (0.7%)
New Hampshire State Housing Authority,
Single-Family Mortgage,
Revenue Bonds, Series C,
6.13%, due 01/01/2020 250 264
The notes to the financial statements are an integral part of this report
IDEX Mutual Funds Annual Report 2003
IDEX Federated Tax Exempt 3
IDEX Federated Tax Exempt
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts in thousands)
Principal Value
- ---------------------------------------------------------------------------------------------------
New Mexico (0.9%)
New Mexico Mortgage and Finance
Authority, Revenue Bonds,
6.05%, due 09/01/2021 $ 325 $ 339
New York (9.7%)
New York City Industrial Development
Agency, Revenue Bonds,
5.38%, due 07/01/2017 250 274
New York City Transitional Finance
Authority, Revenue Bonds,
Non pre-refunded,
5.50%, due 02/15/2019 640 703
New York City Transitional Finance
Authority, Revenue Bonds,
Pre-refunded,
5.50%, due 02/15/2019 360 416
New York Metropolitan Transit Authority,
Revenue Bonds, Series A,
5.13%, due 11/15/2022 500 519
New York State Mortgage Agency,
Revenue Bonds, Series 95,
5.50%, due 10/01/2017 500 531
Niagara Count Solid Waste Disposal
Division, Revenue Bonds, Series D,
5.55%, due 11/15/2024 500 523
Warwick Valley Central School District,
School Improvements,
General Obligation Bonds,
5.50%, due 01/15/2017 570 629
North Carolina (2.8%)
North Carolina Housing and Finance
Agency Authority, Revenue Bonds,
5.25%, due 01/01/2022 485 492
North Carolina Municipal Power Agency,
Revenue Bonds, Series A,
5.50%, due 01/01/2012 500 533
North Dakota (1.1%)
North Dakota State Housing and Finance
Authority, Revenue Bonds, Series C,
6.00%, due 07/01/2020 385 401
Ohio (5.8%)
Ohio State Air Quality Development
Authority, Revenue Bonds, Series A,
6.00%, due 12/01/2013 500 503
Ohio State Infrastructure, Highway
Improvements, Revenue Bonds,
5.00%, due 06/15/2006 500 543
Ohio State Schools,
General Obligation Bonds, Series A,
5.38%, due 09/15/2017 500 547
Steubenville Hospital Improvement
Facilities, Revenue Bonds,
6.38%, due 10/01/2020 500 527
Principal Value
- ---------------------------------------------------------------------------------------------------
Oregon (1.4%)
Clackamas County Hospital Facilities,
Revenue Bonds, Series A,
5.25%, due 05/01/2021 $ 500 $ 517
Pennsylvania (5.2%)
Pennsylvania Housing Finance Agency,
Single Family Mortgage,
Revenue Bonds,
5.00%, due 04/01/2016 500 515
Pennsylvania State Facilities Authority,
Revenue Bonds,
6.00%, due 01/15/2022 500 526
Pennsylvania State Higher Educational
Facilities Authority, Revenue Bonds,
5.25%, due 05/01/2023 350 346
Sayre, Pennsylvania Health Care Facilities,
Revenue Bonds,
5.75%, due 12/01/2021 500 515
Puerto Rico (1.5%)
Puerto Rico Electric Power Authority,
Revenue Bonds, Series II,
5.25%, due 07/01/2022 500 531
Rhode Island (4.5%)
Providence Public Building Authority,
Revenue Bonds, Series A,
5.70%, due 12/15/2015 500 569
Rhode Island Clean Water Financing
Agency, Revenue Bonds,
5.80%, due 09/01/2022 1,000 1,070
South Carolina (1.4%)
Lexington County School District,
General Obligation Bonds,
5.13%, due 03/01/2023 500 520
South Dakota (1.4%)
South Dakota Housing Development
Agency, Revenue Bonds, Series C,
5.35%, due 05/01/2022 500 515
Tennessee (3.6%)
Memphis-Shelby County, Tennessee
Airport, Revenue Bonds,
5.00%, due 09/01/2009 500 544
Sullivan County Health & Educational
Housing Facilities Board Review,
Revenue Bonds,
6.25%, due 09/01/2022 250 261
Tennessee Housing Development
Agency, Revenue Bonds,
5.38%, due 01/01/2018 500 523
Texas (3.4%)
Houston Port Authority, Harris County,
General Obligation Bonds, Series A,
5.50%, due 10/01/2024 500 528
The notes to the financial statements are an integral part of this report
IDEX Mutual Funds Annual Report 2003
IDEX Federated Tax Exempt 4
IDEX Federated Tax Exempt
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts in thousands)
Principal Value
- --------------------------------------------------------------------------------
Texas (continued)
Kingsbridge Municipal Utility District,
General Obligation Bonds,
5.38%, due 03/01/2015 $ 500 $ 539
Sabine River Authority of Texas,
Revenue Bonds, Series A,
5.80%, due 07/01/2022 165 167
Virginia (1.5%)
Virginia Commonwealth Transportation
Board, Revenue Bonds, Series B,
4.50%, due 05/15/2008 500 545
Washington (4.5%)
Northwest Washington Electric,
Revenue Bonds, Series A,
5.75%, due 07/01/2018 500 555
Port Seattle Washington Pollution
Control, Revenue Bonds,
5.25%, due 09/01/2021 500 525
University of Washington, Student
Facilities Improvements,
Revenue Bonds,
5.88%, due 06/01/2016 500 569
Principal Value
- --------------------------------------------------------------------------------
Wisconsin (2.1%)
Wisconsin State Health & Educational
Facilities Authority, Revenue Bonds,
5.75%, due 08/15/2025 $ 500 $ 508
Wisconsin State Health Facilities,
Revenue Bonds,
6.00%, due 07/01/2021 250 259
Wyoming (3.2%)
Wyoming State Farm Loan Board,
Capital Facilities, Revenue Bonds,
5.75%, due 10/01/2020 1,000 1,154
-------
Total Long-Term Municipal Bonds (cost: $33,565)
35,572
-------
SHORT-TERM MUNICIPAL BONDS (1.1%)
Indiana Health Facilities Financing
Authority, Revenue Bonds,
1.02%, due 03/01/2030 (a) 400 400
-------
Total Short-Term Municipal Bonds (cost: $400)
400
-------
Total Investment Securities (cost: $33,965)
$35,972
=======
SUMMARY:
Investments, at value 98.5% $35,972
Other assets in excess of liabilities 1.5% 545
------- -------
Net assets 100.0% $36,517
======= =======
NOTES TO SCHEDULE OF INVESTMENTS:
(a) Floating or variable rate note. Rate is listed as of October 31, 2003.
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Federated Tax Exempt 5
IDEX Federated Tax Exempt
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
At October 31, 2003
(all amounts except per share amounts in thousands)
Assets:
Investment securities, at value (cost: $33,965) $ 35,972
Cash 86
Receivables:
Shares of beneficial interest sold 17
Interest 497
Other 5
--------
36,577
--------
Liabilities:
Accounts payable and accrued liabilities:
Shares of beneficial interest redeemed 1
Management and advisory fees 3
Distribution fees 20
Transfer agent fees 11
Dividends to shareholders 1
Other 24
--------
60
--------
Net Assets $ 36,517
========
Net Assets Consist of:
Shares of beneficial interest, unlimited shares authorized $ 35,361
Undistributed net investment income (loss) 64
Accumulated net realized gain (loss) from investment
securities and futures contracts (914)
Net unrealized appreciation (depreciation) on investment
securities 2,006
--------
Net Assets $ 36,517
========
Shares Outstanding:
Class A 1,619
Class B 846
Class C 358
Class L 139
Class M 160
Net Asset Value Per Share:
Class A $ 11.70
Class B 11.69
Class C 11.70
Class L 11.69
Class M 11.70
Maximum Offering Price Per Share (a):
Class A $ 12.28
Class M 11.82
(a) 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.
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the year ended October 31, 2003
(all amounts in thousands)
Investment Income:
Interest $ 1,984
-------
Expenses:
Management and advisory fees 245
Transfer agent fees 71
Printing and shareholder reports 8
Custody fees 22
Administration fees 38
Legal fees 3
Auditing and accounting fees 19
Trustees fees 3
Registration fees 66
Other 3
Distribution and service fees:
Class A 71
Class B 119
Class C 50
Class L 11
Class M 15
-------
Total expenses 744
Less:
Advisory fee waiver (70)
-------
Net expenses 674
-------
Net Investment Income (Loss) 1,310
-------
Net Realized Gain (Loss) from:
Investment securities 36
Futures contracts 66
-------
102
Net Increase (Decrease) Unrealized Appreciation
(Depreciation) on:
Investment securities 553
-------
Net Gain (Loss) on Investment Securities and Futures
Contracts 655
-------
Net Increase (Decrease) in Net Assets Resulting
from Operations $ 1,965
=======
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Federated Tax Exempt 6
IDEX Federated Tax Exempt
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended
(all amounts in thousands)
October 31, October 31,
2003 2002
----------- -----------
Increase (Decrease) In Net Assets From:
Operations:
Net investment income (loss) $ 1,310 $ 1,127
Net realized gain (loss) from investment
securities and futures contracts 102 26
Net unrealized appreciation
(depreciation) on investment
securities 553 73
--------- ---------
1,965 1,226
--------- ---------
Distributions to Shareholders:
From net investment income:
Class A (704) (718)
Class B (338) (233)
Class C (141) (84)
Class L (31) -
Class M (80) (82)
--------- ---------
(1,294) (1,117)
--------- ---------
From net realized gains:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
--------- ---------
- -
--------- ---------
Capital Share Transactions:
Proceeds from shares sold:
Class A 12,413 14,209
Class B 2,696 8,223
Class C 1,764 5,904
Class L 2,135 -
Class M 168 1,219
--------- ---------
19,176 29,555
--------- ---------
Dividends and distributions reinvested:
Class A 533 524
Class B 225 151
Class C 73 68
Class L 21 -
Class M 65 65
--------- ---------
917 808
--------- ---------
Cost of shares redeemed:
Class A (14,819) (17,500)
Class B (5,234) (2,677)
Class C (2,980) (2,376)
Class L (533) -
Class M (1,294) (821)
--------- ---------
(24,860) (23,374)
--------- ---------
(4,767) 6,989
--------- ---------
Net increase (decrease) in net assets (4,096) 7,098
--------- ---------
Net Assets:
Beginning of year 40,613 33,515
--------- ---------
End of year $ 36,517 $ 40,613
========= =========
Undistributed Net Investment Income (Loss) $ 64 $ 48
========= =========
October 31, October 31,
2003 2002
----------- -----------
Share Activity:
Shares issued:
Class A 1,067 1,245
Class B 231 718
Class C 152 516
Class L 183 -
Class M 14 105
----- -----
1,647 2,584
----- -----
Shares issued-reinvested from distributions:
Class A 46 46
Class B 20 13
Class C 6 6
Class L 2 -
Class M 6 6
----- -----
80 71
----- -----
Shares redeemed:
Class A (1,272) (1,539)
Class B (448) (236)
Class C (256) (209)
Class L (46) -
Class M (110) (72)
------- ------
(2,132) (2,056)
------- -------
Net increase (decrease) in shares
outstanding (405) 599
======= =======
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Federated Tax Exempt 7
IDEX Federated Tax Exempt
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share of beneficial interest outstanding throughout each period
-----------------------------------------------------------------------------------------------------------
Investment Operations Distributions
------------------------------------------- -------------------------------------
Net Asset Net Asset
For the Value, Net Net Realized From Net From Net Value,
Period Beginning Investment and Unrealized Total Investment Realized Total End
Ended (d)(g) of Period Income (Loss) Gain (Loss) Operations Income Gains Distributions of Period
- ------------------------------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 $ 11.51 $ 0.41 $ 0.19 $ 0.60 $ (0.41) $ - $ (0.41) $ 11.70
10/31/2002 11.44 0.38 0.14 0.52 (0.45) - (0.45) 11.51
10/31/2001 10.91 0.40 0.56 0.96 (0.43) - (0.43) 11.44
10/31/2000 10.60 0.44 0.42 0.86 (0.44) (0.11) (0.55) 10.91
10/31/1999 11.94 0.44 (1.14) (0.70) (0.44) (0.20) (0.64) 10.60
- ------------------------------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 11.51 0.34 0.17 0.51 (0.33) - (0.33) 11.69
10/31/2002 11.44 0.30 0.11 0.41 (0.34) - (0.34) 11.51
10/31/2001 10.90 0.34 0.56 0.90 (0.36) - (0.36) 11.44
10/31/2000 10.59 0.37 0.42 0.79 (0.37) (0.11) (0.48) 10.90
10/31/1999 11.94 0.35 (1.14) (0.79) (0.36) (0.20) (0.56) 10.59
- ------------------------------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 11.51 0.34 0.18 0.52 (0.33) - (0.33) 11.70
10/31/2002 11.44 0.29 0.12 0.41 (0.34) - (0.34) 11.51
10/31/2001 10.90 0.65 0.25 0.90 (0.36) - (0.36) 11.44
10/31/2000 10.59 0.37 0.42 0.79 (0.37) (0.11) (0.48) 10.90
- ------------------------------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 11.59 0.33 0.10 0.43 (0.33) - (0.33) 11.69
- ------------------------------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 11.51 0.38 0.19 0.57 (0.38) - (0.38) 11.70
10/31/2002 11.44 0.36 0.09 0.45 (0.38) - (0.38) 11.51
10/31/2001 10.91 0.40 0.53 0.93 (0.40) - (0.40) 11.44
10/31/2000 10.59 0.42 0.42 0.84 (0.41) (0.11) (0.52) 10.91
10/31/1999 11.94 0.39 (1.14) (0.75) (0.40) (0.20) (0.60) 10.59
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
-----------------------------------------------------------------------
Ratio of Expenses
Net Assets, to Average Net Investment
For the End of Net Assets (a) Income (Loss) Portfolio
Period Total Period ----------------------- to Average Turnover
Ended (g) Return (c) (000's) Net (e) Total (f) Net Assets (a) Rate (b)
- ---------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 5.26% $ 18,948 1.35% 1.52% 3.53% 22%
10/31/2002 4.26 20,469 1.35 1.46 3.63 55
10/31/2001 8.99 23,190 1.35 1.48 3.80 35
10/31/2000 8.38 16,999 1.35 1.68 4.14 67
10/31/1999 (6.23) 20,996 1.35 1.50 3.83 36
- ---------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 4.48 9,897 2.00 2.17 2.88 22
10/31/2002 3.63 12,019 2.00 2.11 2.98 55
10/31/2001 8.32 6,276 2.00 2.13 3.15 35
10/31/2000 7.72 1,728 2.00 2.33 3.49 67
10/31/1999 (6.89) 1,253 2.00 2.15 3.18 36
- ---------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 4.57 4,182 2.00 2.17 2.88 22
10/31/2002 3.63 5,247 2.00 2.11 2.98 55
10/31/2001 8.32 1,636 2.00 2.13 3.15 35
10/31/2000 7.72 195 2.00 2.33 3.49 67
- ---------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 3.76 1,621 2.00 2.17 2.88 22
- ---------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 5.00 1,869 1.60 1.77 3.28 22
10/31/2002 4.02 2,878 1.60 1.71 3.38 55
10/31/2001 8.73 2,413 1.60 1.73 3.55 35
10/31/2000 8.13 2,014 1.60 1.93 3.89 67
10/31/1999 (6.56) 2,193 1.60 1.75 3.58 36
- ---------------------------------------------------------------------------------------------------------------
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Federated Tax Exempt 8
IDEX Federated Tax Exempt
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (continued)
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 are not annualized.
(d) Per share information is calculated based on average number of shares
outstanding for the periods ended 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 (see note 2).
(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 Fund's offering of share classes C and L are as
follows:
Class C - November 1, 1999
Class L - November 11, 2002
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Federated Tax Exempt 9
IDEX Federated Tax Exempt
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
At October 31, 2003
(all amounts in thousands)
NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
IDEX Mutual Funds is a Massachusetts business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company. IDEX Federated Tax Exempt ("the Fund"), part of
IDEX Mutual Funds, began operations on April 1, 1985.
In the normal course of business the Fund enters into contracts that contain a
variety of representations and warranties and which provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown, as this would involve future claims that may be made against the Fund
and/or its affiliates that have not yet occurred. However, based on experience,
the Fund expects the risk of loss to be remote.
See the Prospectus and Statement of Additional Information for a description of
the Fund's investment objective.
In preparing the Fund's financial statements in accordance with accounting
principles generally accepted in the United States of America ("GAAP"),
estimates or assumptions (which could differ from actual results) may be used
that affect reported amounts and disclosures. The following policies were
consistently followed by the Fund, in accordance with GAAP.
Multiple class operations and expenses: The Fund currently offers five classes
of shares, each with a public offering price that reflects different sales
charges, if any, and expense levels. Effective November 11, 2002, Class C and M
shares were closed to new investors. Income, non-class specific expenses and
realized and unrealized gains and losses, are allocated daily to each class,
based upon the value of shares outstanding method as permitted under Rule 18f-3
of the 1940 Act. Each class bears its own specific expenses as well as a
portion of general, common expenses.
Security valuations: Fund investments traded on an exchange are valued at the
closing price on the day of valuation on the exchange where the security is
principally traded. With respect to securities traded on the NASDAQ INMS, such
closing price may be the last reported sales price or the NASDAQ Official
Closing Price.
Debt securities are valued by independent pricing services; however, those that
mature in sixty days or less are valued at amortized cost, which approximates
market.
Other securities for which quotations are not readily available are valued at
fair value determined in good faith, in accordance with procedures established
by and, under the supervision of the Board of Trustees and the Fund's Valuation
Committee.
Cash: The Fund may leave cash overnight in its cash account with the custodian,
Investors Bank & Trust Company ("IBT"). IBT has been contracted on behalf of
the Fund to invest the excess cash into a savings account, which at October 31,
2003, was paying an interest rate of 0.75%.
Security transactions and investment income: Security transactions are recorded
on the trade date. Security gains and losses are calculated on the specific
identification basis. Interest income, including accretion of discounts and
amortization of premiums, is recorded on the accrual basis commencing on the
settlement date.
Futures contracts: The Fund may enter into futures contracts to manage exposure
to market, interest rate or currency fluctuations. Futures contracts are valued
at the settlement price established each day by the board of trade or exchange
on which they are traded. The primary risks associated with futures contracts
are imperfect correlation between the change in market value of the securities
held and the prices of futures contracts; the possibility of an illiquid market
and inability of the counterparty to meet the contract terms.
Dividend distributions: Distributions to shareholders are recorded on the
ex-dividend date and are determined in accordance with Federal income tax
regulations which may differ from GAAP.
NOTE 2. RELATED PARTY TRANSACTIONS
AEGON/Transamerica Fund Advisers, Inc. ("ATFA") is the Fund's investment
adviser. AEGON/Transamerica Fund Services, Inc. ("ATFS") is the Fund's
administrator. AFSG Securities Corp. ("AFSG") is the Fund's
distributor/principal underwriter. AEGON/Transamerica Investor Services, Inc.
("ATIS") is the 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. AUSA and WRL are wholly owned indirect
subsidiaries of AEGON NV, a Netherlands corporation.
Investment advisory fees: The Fund pays management fees to ATFA based on
average daily net assets ("ANA") at the following rate:
0.60% of ANA
ATFA currently voluntarily waives its advisory fee and will reimburse the Fund
to the extent that operating expenses, excluding 12b-1 fees, exceed the
following stated annual limit:
1.00% Expense Limit
If total fund expenses fall below the annual expense limitations agreed to by
the adviser within the succeeding three years, the Fund may be required to pay
the advisor a portion or all of the waived advisory fees.
IDEX Mutual Funds Annual Report 2003
IDEX Federated Tax Exempt 10
IDEX Federated Tax Exempt
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 2-(continued)
Distribution and service fees: The Fund has a 12b-1 distribution plan under the
1940 Act pursuant to which an annual fee, based on average daily net assets, is
paid to the distributor for various disbursements such as broker-dealer account
servicing fees and other promotional expenses of the Fund. The 12b-1 fee for
the Fund is comprised of a 0.25% service fee and the remaining amount is an
asset-based sales charge/distribution fee. The Fund is authorized under the
12b-1 plan to pay fees on each class up to the following limits:
Class A 0.35%
Class B 1.00%
Class C 1.00%
Class L 1.00%
Class M 0.60%
Underwriter commissions relate to front-end sales charges imposed for Class A
and M shares and contingent deferred sales charges from Classes B, L, M and
certain A share redemptions. For the year ended October 31, 2003, the
underwriter commissions were as follows:
Received by Underwriter $ 61
Retained by Underwriter 10
Contingent Sales Charges 67
Administrative services: The Fund has entered into an agreement with ATFS for
financial and legal fund administration services, which include such items as
compliance, expenses, financial statements and other reporting, distributions,
tax returns, prospectus preparation, board of trustees meeting support and
other legal matters. Transfer agent fees are reflected separately from
Administration fees on the Statement of Operations. The Legal fees on the
Statement of Operations are for fees paid to external legal counsel. ATFS
provides its services to the Fund at a cost and is reimbursed monthly.
Transfer agent fees: The Fund incurs ATIS annual per-account charges (not in
thousands) of $20.00 for each open shareholder account and $1.63 for each
closed account maintained, and certain out of pocket expenses.
Deferred compensation plan: Each eligible Fund Trustee may elect participation
in the Deferred Compensation Plan ("the Plan"). Under the Plan, such Trustees
may defer payment of a percentage of their total fees earned as a Fund Trustee.
These deferred amounts may be invested in any IDEX Fund. At October 31, 2003,
invested plan amounts was $4. Invested plan amounts and the total liability for
deferred compensation to the Trustees under the Plan at October 31, 2003, are
included in Net assets in the accompanying Statement of Assets and Liabilities.
NOTE 3. INVESTMENT TRANSACTIONS
The cost of securities purchased and proceeds from securities sold (excluding
short-term securities) for the year ended October 31, 2003, are as follows:
Purchases of securities:
Long-Term excluding U.S. Government $ 8,808
U.S. Government -
Proceeds from maturities and sales of securities:
Long-Term excluding U.S. Government 12,038
U.S. Government -
NOTE 4. FEDERAL INCOME TAX MATTERS
The Fund has not made any provision for federal income or excise taxes due to
its policy to distribute all of its taxable income and capital gains to its
shareholders and otherwise qualify as a regulated investment company under the
Internal Revenue Code. Income and capital gain distributions are determined in
accordance with income tax regulations, which may differ from GAAP. These
differences are primarily due to differing treatments for items including, but
not limited to, wash sales, net operating losses and capital loss
carryforwards.
The tax character of distributions paid may differ from the character of
distributions shown in the Statements of Changes in Net Assets
primarily due to short-term gains being treated as ordinary income for tax
purposes. Distributed and undistributed ordinary income is tax exempt. The tax
character of distributions paid during 2002 and 2003 was as follows:
2002 Distributions paid from:
Ordinary income $ 1,117
Long-term capital gains -
2003 Distributions paid from:
Ordinary income $ 1,294
Long-term capital gains -
The tax basis components of distributable earnings as of October 31, 2003, are
as follows:
Undistributed Ordinary Income $ 71
=======
Undistributed Long-term Capital Gains $ -
=======
Capital Loss Carryforward $ (914)
=======
Net Unrealized Appreciation (Depreciation) $ 2,007
=======
The capital loss carryforward utilized as of October 31, 2003 was $102. The
capital loss carryforwards are available to offset future realized capital
gains through the periods listed:
Capital Loss
Carryforward Available through
- ------------ -----------------
$ 914 October 31, 2008
IDEX Mutual Funds Annual Report 2003
IDEX Federated Tax Exempt 11
IDEX Federated Tax Exempt
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 4-(continued)
The aggregate cost of investments and composition of unrealized appreciation
(depreciation) for federal income tax purposes as of October 31, 2003, are as
follows:
Federal Tax Cost Basis $33,965
========
Unrealized Appreciation $ 2,020
Unrealized (Depreciation) (13)
--------
Net Unrealized Appreciation (Depreciation) $ 2,007
========
IDEX Mutual Funds Annual Report 2003
IDEX Federated Tax Exempt 12
- --------------------------------------------------------------------------------
Report of Independent Certified Public Accountants
To the Board of Trustees and Shareholders of
IDEX Federated Tax Exempt
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of IDEX Federated Tax Exempt (the
"Fund") (one of the portfolios constituting the IDEX Mutual Funds) at October
31, 2003, and the results of its operations, the changes in its net assets and
the financial highlights for each of the periods indicated, in conformity with
accounting principles generally accepted in the United States of America. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with auditing standards generally accepted in the United States of America,
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at October 31, 2003 by correspondence with the
custodian and brokers, provide a reasonable basis for our opinion.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Tampa, Florida
December 18, 2003
IDEX Mutual Funds Annual Report 2003
IDEX Federated Tax Exempt 13
IDEX Great Companies-America(SM)
- --------------------------------------------------------------------------------
MARKET ENVIRONMENT
Recently we have been exposed to scandals in the California governor's race,
mutual fund companies that traded after hours, chief executive officers going
to trial for a variety of indiscretions, U.S. soldiers dying in Iraq, and a
host of other negative events. Last year when similar scandals were announced,
the market dropped 200 points a day, and we found ourselves mired in a severe
bear market. Today, however, investors took these events in stride.
Why does the news of the day have such a different impact on the market in 2003
than it did in 2002 and 2001? Frankly, it has to do with a number of factors
including, but not limited to: lower interest rates, higher consumer confidence
ratings and stronger corporate earnings.
These events, combined with a host of other factors, have turned the market
mind set from a negative to a positive orientation, and have resulted in a
significant market push upwards. Investors who pulled out of the market when it
was down have missed a significant market rally.
PERFORMANCE
For the year ended October 31, 2003, IDEX Great Companies-America(SM) returned
14.64%. By comparison its benchmark, the Standard and Poor's 500 Composite
Stock Index, returned 20.79%.
STRATEGY REVIEW
The IDEX Great Companies-America(SM) strategy performed in line with our
expectations.
/s/ James H. Huguet
James H. Huguet
/s/ Matthew C. Stephani
Matthew C. Stephani
/s/ Gerald W. Bollman
Gerald W. Bollman
Co-Fund Managers
Great Companies, L.L.C.
IDEX Mutual Funds Annual Report 2003
IDEX Great Companies-America(SM) 1
IDEX Great Companies-America(SM)
- --------------------------------------------------------------------------------
Comparison of change in value of $10,000 investment in Class A shares and its
comparative index.
Growth of $10,000
Inception of 7/14/00 through 10/31/03
Investment less sales charges - $9,452
[The following table was depicted as a mountain chart in the printed material.]
DATE Class A S&P 500
- ----------------- -------------- --------------
7/14/2000 9,452 10,000
9/30/2000 9,631 9,540
12/31/2000 10,301 8,794
3/31/2001 8,686 7,752
6/30/2001 8,979 8,205
9/30/2001 8,157 7,001
12/31/2001 9,064 7,750
3/31/2002 9,055 7,771
6/30/2002 7,599 6,730
9/30/2002 6,758 5,568
12/31/2002 7,108 6,038
3/31/2003 6,976 5,847
6/30/2003 7,865 6,747
9/30/2003 8,044 6,926
10/31/2003 8,290 7,317
Average Annual Total Return for Periods Ended 10/31/03
- --------------------------------------------------------------------------------
From Inception
1 year Inception Date
- --------------------------------------------------------
Class A (NAV) 14.64% -3.90% 7/14/00
Class A (POP) 8.34% -5.54% 7/14/00
S&P 500(1) 20.79% -9.04% 7/14/00
- --------------------------------------------------------
Class B (NAV) 13.96% -4.57% 7/14/00
Class B (POP) 8.96% -5.16% 7/14/00
- --------------------------------------------------------
Class C (NAV) 13.96% -4.57% 7/14/00
- --------------------------------------------------------
Class L (NAV) - 14.11% 11/11/02
Class L (POP) - 12.11% 11/11/02
- --------------------------------------------------------
Class M (NAV) 14.06% -4.47% 7/14/00
Class M (POP) 11.92% -4.76% 7/14/00
- --------------------------------------------------------
NOTES
(1) The Standard & Poor's 500 Composite Stock (S&P 500) 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 Micropal(R)(C) 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 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 a "non-diversified" fund may be subject to specific risks such
as susceptibility to single economic political, or regulatory events, and may
be subject to greater loss than investments in a diversified fund.
The management of this fund is based on a specific philosophy and on
proprietary systems and methodology. There is no guarantee the fund will
achieve its objectives.
Periods less than 1 year represent total return and are not annualized.
This material must be preceded or accompanied by a current prospectus, which
includes specific contents regarding the investment objectives and policies of
this fund.
IDEX Mutual Funds Annual Report 2003
IDEX Great Companies-America(SM) 2
IDEX Great Companies-America(SM)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
At October 31, 2003
(all amounts except share amounts in thousands)
Shares Value
- --------------------------------------------------------------------------------
COMMON STOCKS (97.2%)
Aerospace (7.9%)
United Technologies Corporation 131,902 $ 11,171
Beverages (3.9%)
Coca-Cola Company (The) 60,000 2,784
PepsiCo, Inc. 57,600 2,754
Business Services (10.4%)
First Data Corporation (a) 232,200 8,290
Omnicom Group, Inc. (a) 80,800 6,448
Chemicals & Allied Products (8.9%)
Colgate-Palmolive Company 111,000 5,904
Procter & Gamble Company (The) 68,000 6,684
Commercial Banks (7.6%)
Bank of New York Company, Inc. (The) 205,100 6,397
Citigroup Inc. 90,600 4,294
Computer & Office Equipment (3.0%)
International Business Machines Corporation 46,800 4,188
Electronic & Other Electric Equipment (6.9%)
General Electric Company 335,100 9,721
Electronic Components & Accessories (4.0%)
Texas Instruments Incorporated 193,601 5,599
Insurance (4.2%)
American International Group, Inc. 97,100 5,907
Insurance Agents, Brokers & Service (3.6%)
Marsh & McLennan Companies, Inc. 120,200 5,139
Medical Instruments & Supplies (2.5%)
Medtronic, Inc. 76,900 3,504
Paper & Allied Products (4.7%)
3M Company 85,000 6,704
Pharmaceuticals (19.8%)
Abbott Laboratories 235,100 10,020
Johnson & Johnson 116,300 5,853
Pfizer Inc. 192,900 6,095
Wyeth 138,600 6,118
Security & Commodity Brokers (9.8%)
Goldman Sachs Group, Inc. (The) 29,200 2,742
Lehman Brothers Holdings Inc. 93,800 6,754
Merrill Lynch & Co., Inc. 74,600 4,416
--------
Total Common Stocks (cost: $130,145) 137,486
--------
Principal Value
- ----------------------------------------------------------------------------------
SECURITY LENDING COLLATERAL (3.6%)
Debt (3.2%)
Bank Notes (0.4%)
Canadian Imperial Bank of Commerce
1.12%, due 11/04/2003 $ 220 $ 220
Fleet National Bank
1.06%, due 01/21/2004 308 308
Euro Dollar Terms (1.8%)
Bank of Montreal
1.03%, due 11/13/2003 $ 176 $ 176
1.04%, due 11/14/2003 155 155
Bank of Nova Scotia (The)
1.06%, due 11/12/2003 88 88
Bank of Scotland
1.04%, due 11/14/2003 176 176
Citigroup Inc.
1.08%, due 01/05/2004 264 264
Credit Agricole Indosuez
1.08%, due 01/06/2004 194 194
Den Danske Bank
1.04%, due 11/10/2003 88 88
1.08%, due 01/20/2004 264 264
Royal Bank of Canada
1.04%, due 11/24/2003 220 220
1.06%, due 12/08/2003 88 88
Royal Bank of Scotland Group PLC (The)
1.08%, due 01/15/2004 264 264
SouthTrust Bank
1.08%, due 01/16/2004 264 264
Wells Fargo & Company
1.04%, due 11/20/2003 264 264
Promissory Notes (0.2%)
Goldman Sachs Group, Inc. (The)
1.15%, due 11/03/2003 308 308
Repurchase Agreements (0.8%) (b)
Goldman Sachs Group, Inc. (The)
1.10% Repurchase Agreement dated
10/31/2003 to be repurchased at $88
on 11/03/2003 88 88
Merrill Lynch & Co., Inc.
1.10% Repurchase Agreement dated
10/31/2003 to be repurchased at $1,011
on 11/03/2003 1,011 1,011
Shares Value
- --------------------------------------------------------------------------------
Investment Companies (0.4%)
Money Market Funds (0.4%)
Merrimac Cash Series Fund-
Premium Class
1-day yield of 0.97% 615,981 $ 616
---------
Total Security Lending Collateral (cost: $5,056) 5,056
---------
Total Investment Securities (cost: $135,201) $ 142,542
=========
SUMMARY:
Investments, at value 100.8% $ 142,542
Liabilities in excess of other assets (0.8)% (1,171)
------- ---------
Net assets 100.0% $ 141,371
======= =========
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Great Companies-America(SM) 3
IDEX Great Companies-America(SM)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
At October 31, 2003
NOTES TO SCHEDULE OF INVESTMENTS:
(a) At October 31, 2003, all or a portion of this security is on loan (see Note
1). The value at October 31, 2003, of all securities on loan is $4,932.
(b) Cash collateral for the Repurchase Agreements, valued at $1,122, 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.
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Great Companies-America(SM) 4
IDEX Great Companies-America(SM)
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
At October 31, 2003
(all amounts except per share amounts in thousands)
Assets:
Investment securities, at value (cost: $135,201)
(including $4,932 of securities loaned) $ 142,542
Cash 4,398
Receivables:
Shares of beneficial interest sold 199
Interest 1
Dividends 235
Other 10
---------
147,385
---------
Liabilities:
Accounts payable and accrued liabilities:
Shares of beneficial interest redeemed 660
Management and advisory fees 77
Distribution fees 91
Transfer agent fees 65
Payable for securities on loan 5,056
Other 65
---------
6,014
---------
Net Assets $ 141,371
=========
Net Assets Consist of:
Shares of beneficial interest, unlimited shares authorized $ 157,981
Accumulated net investment income (loss) (2)
Accumulated net realized gain (loss) from investment
securities (23,948)
Net unrealized appreciation (depreciation) on investment
securities 7,340
---------
Net Assets $ 141,371
=========
Shares Outstanding:
Class A 5,589
Class B 7,256
Class C 1,952
Class L 522
Class M 1,036
Net Asset Value Per Share:
Class A $ 8.77
Class B 8.57
Class C 8.57
Class L 8.57
Class M 8.60
Maximum Offering Price Per Share (a):
Class A $ 9.28
Class M 8.69
(a) 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.
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the year ended October 31, 2003
(all amounts in thousands)
Investment Income:
Interest $ 13
Dividends 2,189
Income from loaned securities-net 9
-------
2,211
-------
Expenses:
Management and advisory fees 1,106
Transfer agent fees 465
Printing and shareholder reports 72
Custody fees 19
Administration fees 31
Legal fees 9
Auditing and accounting fees 19
Trustees fees 10
Registration fees 68
Other 7
Distribution and service fees:
Class A 195
Class B 560
Class C 161
Class L 20
Class M 78
-------
Total expenses 2,820
Less:
Advisory fee waiver (148)
-------
Net expenses 2,672
-------
Net Investment Income (Loss) (461)
-------
Net Realized and Unrealized Gain (Loss):
Realized gain (loss) from investment securities (12,017)
Increase (decrease) in unrealized appreciation
(depreciation) on investment securities 31,487
-------
Net Gain (Loss) on Investment Securities 19,470
-------
Net Increase (Decrease) in Net Assets Resulting from
Operations $19,009
=======
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Great Companies-America(SM) 5
IDEX Great Companies-America(SM)
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended
(all amounts in thousands)
October 31, October 31,
2003 2002
----------- -----------
Increase (Decrease) In Net Assets From:
Operations:
Net investment income (loss) $ (461) $ (791)
Net realized gain (loss) from investment
securities (12,017) (7,169)
Net unrealized appreciation
(depreciation) on investment
securities 31,487 (18,467)
--------- ---------
19,009 (26,427)
--------- ---------
Distributions to Shareholders:
From net investment income:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
--------- ---------
- -
--------- ---------
From net realized gains:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
--------- ---------
- -
--------- ---------
Capital Share Transactions:
Proceeds from shares sold:
Class A 24,736 43,241
Class B 14,569 37,954
Class C 2,235 13,762
Class L 4,415 -
Class M 1,696 7,063
--------- ---------
47,651 102,020
--------- ---------
Dividends and distributions reinvested:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
--------- ---------
- -
--------- ---------
Cost of shares redeemed:
Class A (39,467) (16,357)
Class B (12,855) (14,179)
Class C (4,009) (5,739)
Class L (261) -
Class M (2,623) (3,754)
--------- ---------
(59,215) (40,029)
--------- ---------
(11,564) 61,991
--------- ---------
Net increase (decrease) in net assets 7,445 35,564
--------- ---------
Net Assets:
Beginning of year 133,926 98,362
--------- ---------
End of year $ 141,371 $ 133,926
========= =========
Accumulated Net Investment Income (Loss) $ (2) $ (3)
========= =========
Share Activity:
Shares issued:
Class A 3,165 4,955
Class B 1,828 4,256
Class C 284 1,547
Class L 554 -
Class M 216 790
--------- ---------
6,047 11,548
--------- ---------
Shares issued-reinvestment from
distributions:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
--------- ---------
- -
--------- ---------
Shares redeemed:
Class A (4,833) (1,977)
Class B (1,654) (1,767)
Class C (520) (706)
Class L (32) -
Class M (335) (456)
--------- ---------
(7,374) (4,906)
--------- ---------
Net increase (decrease) in shares
outstanding (1,327) 6,642
========= =========
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Great Companies-America(SM) 6
IDEX Great Companies-America(SM)
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share of beneficial interest outstanding throughout each period
-----------------------------------------------------------------------------------------------------------
Investment Operations Distributions
-------------------------------------------- -------------------------------------
Net Asset Net Asset
For the Value, Net Net Realized From Net From Net Value,
Period Beginning Investment and Unrealized Total Investment Realized Total End
Ended (d)(g) of Period Income (Loss) Gain (Loss) Operations Income Gains Distributions of Period
- ------------------------------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 $ 7.65 $ - $ 1.12 $ 1.12 $ - $ - $ - $ 8.77
10/31/2002 8.96 (0.01) (1.30) (1.31) - - - 7.65
10/31/2001 10.58 (0.02) (1.60) (1.62) - - - 8.96
10/31/2000 10.00 - 0.58 0.58 - - - 10.58
- ------------------------------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 7.52 (0.05) 1.10 1.05 - - - 8.57
10/31/2002 8.87 (0.08) (1.27) (1.35) - - - 7.52
10/31/2001 10.56 (0.08) (1.61) (1.69) - - - 8.87
10/31/2000 10.00 (0.02) 0.58 0.56 - - - 10.56
- ------------------------------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 7.52 (0.05) 1.10 1.05 - - - 8.57
10/31/2002 8.87 (0.08) (1.27) (1.35) - - - 7.52
10/31/2001 10.56 (0.08) (1.61) (1.69) - - - 8.87
10/31/2000 10.00 (0.02) 0.58 0.56 - - - 10.56
- ------------------------------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 7.51 (0.05) 1.11 1.06 - - - 8.57
- ------------------------------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 7.54 (0.04) 1.10 1.06 - - - 8.60
10/31/2002 8.89 (0.07) (1.28) (1.35) - - - 7.54
10/31/2001 10.56 (0.08) (1.59) (1.67) - - - 8.89
10/31/2000 10.00 (0.02) 0.58 0.56 - - - 10.56
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
-----------------------------------------------------------------------
Ratio of Expenses
Net Assets, to Average Net Investment
For the End of Net Assets (a) Income (Loss) Portfolio
Period Total Period ----------------------- to Average Turnover
Ended (g) Return (c) (000's) Net (e) Total (f) Net Assets (a) Rate (b)
- ---------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 14.64% $ 49,040 1.55% 1.66% 0.05% 54%
10/31/2002 (14.59) 55,508 1.55 1.66 (0.16) 28
10/31/2001 (15.35) 38,345 1.55 1.78 (0.18) 65
10/31/2000 5.81 13,377 1.55 3.38 (0.08) 2
- ---------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 13.96 62,205 2.20 2.31 (0.60) 54
10/31/2002 (15.26) 53,256 2.20 2.31 (0.81) 28
10/31/2001 (15.98) 40,769 2.20 2.43 (0.83) 65
10/31/2000 5.62 7,839 2.20 4.03 (0.73) 2
- ---------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 13.96 16,738 2.20 2.31 (0.60) 54
10/31/2002 (15.26) 16,452 2.20 2.31 (0.81) 28
10/31/2001 (15.98) 11,953 2.20 2.43 (0.83) 65
10/31/2000 5.62 2,875 2.20 4.03 (0.73) 2
- ---------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 14.11 4,474 2.20 2.31 (0.60) 54
- ---------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 14.06 8,914 2.10 2.21 (0.50) 54
10/31/2002 (15.15) 8,710 2.10 2.21 (0.71) 28
10/31/2001 (15.88) 7,296 2.10 2.33 (0.73) 65
10/31/2000 5.65 1,744 2.10 3.93 (0.63) 2
- ---------------------------------------------------------------------------------------------------------------
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Great Companies-America(SM) 7
IDEX Great Companies-America(SM)
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (continued)
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 are not annualized.
(d) Per share information is calculated based on average number of shares
outstanding for the periods ended 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 (see note 2).
(f) Ratio of Total Expenses to Average Net Assets includes all expenses before
fee waivers and reimbursements by the investment adviser.
(g) IDEX Great Companies-America(SM) ("the Fund") commenced operations on July
14, 2000. The inception date for the Fund's offering of share Class L was
November 11, 2002.
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Great Companies-America(SM) 8
IDEX Great Companies-America(SM)
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
At October 31, 2003
(all amounts in thousands)
NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
IDEX Mutual Funds is a Massachusetts business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company. IDEX Great Companies-America(SM) ("the Fund"),
part of IDEX Mutual Funds, began operations on July 14, 2000. The Fund is
"non-diversified" under the 1940 Act.
In the normal course of business, the Fund enters into contracts that contain a
variety of representations and warranties and which provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown, as this would involve future claims that may be made against the Fund
and/or its affiliates that have not yet occurred. However, based on experience,
the Fund expects the risk of loss to be remote.
See the Prospectus and Statement of Additional Information for a description of
the Fund's investment objective.
In preparing the Fund's financial statements in accordance with accounting
principles generally accepted in the United States of America ("GAAP"),
estimates or assumptions (which could differ from actual results) may be used
that affect reported amounts and disclosures. The following policies were
consistently followed by the Fund, in accordance with GAAP.
Multiple class operations and expenses: The Fund currently offers five classes
of shares, each with a public offering price that reflects different sales
charges, if any, and expense levels. Effective November 11, 2002, Class C and M
shares were closed to new investors. Income, non-class specific expenses and
realized and unrealized gains and losses, are allocated daily to each class,
based upon the value of shares outstanding method as permitted under Rule 18f-3
of the 1940 Act. Each class bears its own specific expenses as well as a
portion of general, common expenses.
Security valuations: Fund investments traded on an exchange are valued at the
closing price on the day of valuation on the exchange where the security is
principally traded. With respect to securities traded on the NASDAQ INMS, such
closing price may be the last reported sales price or the NASDAQ Official
Closing Price.
Securities traded in the over-the-counter market and listed securities for
which no sale was reported on that date are valued at the last quoted bid
price.
Debt securities are valued by independent pricing services; however, those that
mature in sixty days or less are valued at amortized cost, which approximates
market.
Other securities for which quotations are not readily available are valued at
fair value determined in good faith, in accordance with procedures established
by and, under the supervision of the Board of Trustees and the Fund's Valuation
Committee.
Cash: The Fund may leave cash overnight in its cash account with the custodian,
Investors Bank & Trust Company ("IBT"). IBT has been contracted on behalf of
the Fund to invest the excess cash into a savings account, which at October 31,
2003, was paying an interest rate of 0.75%.
Securities lending: The Fund may lend securities to enhance fund earnings from
investing cash collateral received in making such loans to qualified borrowers
(typically broker/dealers). The Fund has engaged its custodian bank, IBT, as a
lending agent to administer its securities lending program. IBT earned $2 of
program net income for its services. When the Fund makes a security loan, it
receives cash collateral as protection against the risk that the borrower will
default on the loan, and records an asset for the cash invested collateral and
a liability for the return of the collateral.
Securities on loan are included in Investment securities at value on the
Statement of Assets and Liabilities and remain on the Schedule of Investments.
Loans of securities are required to be secured by collateral at least equal to
102% of the value of the securities at inception of the loan, and not less then
100% thereafter. The Fund may invest cash collateral in short-term money market
instruments including: U.S. Treasury Bills, U.S. agency obligations, commercial
paper, money market mutual funds, repurchase agreements and other highly rated,
liquid investments. During the life of securities loans, the collateral and
securities loaned remain subject to fluctuation in value. IBT marks to market
securities loaned and the collateral each business day. If additional
collateral is due (at least $1), IBT collects additional cash collateral from
the borrowers. Although securities loaned will be fully collateralized at all
times, IBT may experience delays in, or may be prevented from, recovering the
collateral on behalf of the Fund. The Fund may recall a loaned security
position at any time from the borrower through IBT. In the event the borrower
fails to timely return a recalled security, IBT may indemnify the Fund by
purchasing replacement securities for the Fund at its own expense and claiming
the collateral to fund such a purchase. IBT absorbs the loss if the collateral
value is not sufficient to cover the cost of the replacement securities. If
replacement securities are not available, IBT will credit the equivalent cash
value to the Fund.
Income from securities lending is included in the Statement of Operations. The
amount of collateral and value of securities on loan are included in the
Statement of Assets and Liabilities as well as on the Schedule of Investments.
Security transactions and investment income: Security transactions are recorded
on the trade date. Security gains and losses are calculated on the specific
identification basis. Dividend income is recorded on the ex-dividend date or,
in the case of foreign securities, as soon as the Fund is informed of the
ex-dividend date. Interest income, including accretion of discounts and
amortization of premiums, is recorded on the accrual basis commencing on the
settlement date.
IDEX Mutual Funds Annual Report 2003
IDEX Great Companies-America(SM) 9
IDEX Great Companies-America(SM)
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 1-(continued)
Dividend distributions: Distributions to shareholders are recorded on the
ex-dividend date and are determined in accordance with Federal income tax
regulations which may differ from GAAP.
NOTE 2. RELATED PARTY TRANSACTIONS
AEGON/Transamerica Fund Advisers, Inc. ("ATFA") is the Fund's investment
adviser. AEGON/Transamerica Fund Services, Inc. ("ATFS") is the Fund's
administrator. AFSG Securities Corp. ("AFSG") is the Fund's
distributor/principal underwriter. AEGON/Transamerica Investor Services, Inc.
("ATIS") is the 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. AUSA and WRL are wholly owned indirect
subsidiaries of AEGON NV, a Netherlands corporation.
Great Companies, LLC is both an affiliate of the Fund and a sub-adviser to the
Fund.
Investment advisory fees: The Fund pays management fees to ATFA based on
average daily net assets ("ANA") at the following stated break points:
0.80% of the first $500 million of ANA
0.70% of ANA over $500 million
ATFA currently voluntarily waives its advisory fee and will reimburse the Fund
to the extent that operating expenses, excluding 12b-1 fees, exceed the
following stated annual limit:
1.20% Expense Limit
If total fund expenses fall below the annual expense limitations agreed to by
the adviser within the succeeding three years, the Fund may be required to pay
the advisor a portion or all of the waived advisory fees.
Advisory Fee Available for
Waived Recapture Through
-------------- ------------------
Fiscal Year 2003 148 10/31/2006
Fiscal Year 2002 146 10/31/2005
Fiscal Year 2001 166 10/31/2004
For the year ended October 31, 2003, ATFA has voluntarily agreed to waive the
recapture of $ 80 reimbursed expenses that were otherwise eligible for
recapture.
Distribution and service fees: The Fund has a 12b-1 distribution plan under the
1940 Act pursuant to which an annual fee, based on average daily net assets, is
paid to the distributor for various disbursements such as broker-dealer account
servicing fees and other promotional expenses of the Fund. The 12b-1 fee for
the Fund is comprised of a 0.25% service fee and the remaining amount is an
asset-based sales charge/distribution fee. The Fund is authorized under the
12b-1 plan to pay fees on each class up to the following limits:
Class A 0.35%
Class B 1.00%
Class C 1.00%
Class L 1.00%
Class M 0.90%
Underwriter commissions relate to front-end sales charges imposed for Class A
and M shares and contingent deferred sales charges from Classes B, L, M and
certain A share redemptions. For the year ended October 31, 2003, the
underwriter commissions were as follows:
Received by Underwriter $ 270
Retained by Underwriter 35
Contingent Sales Charges 218
Administrative services: The Fund has entered into an agreement with ATFS for
financial and legal fund administration services, which include such items as
compliance, expenses, financial statements and other reporting, distributions,
tax returns, prospectus preparation, board of trustees meeting support and
other legal matters. Transfer agent fees are reflected separately from
Administration fees on the Statement of Operations. The Legal fees on the
Statement of Operations are for fees paid to external legal counsel. ATFS
provides its services to the Fund at a cost and is reimbursed monthly.
Transfer agent fees: The Fund incurs ATIS annual per-account charges (not in
thousands) of $20.00 for each open shareholder account and $1.63 for each
closed account maintained, and certain out of pocket expenses.
Deferred compensation plan: Each eligible Fund Trustee may elect participation
in the Deferred Compensation Plan ("the Plan"). Under the Plan, such Trustees
may defer payment of a percentage of their total fees earned as a Fund Trustee.
These deferred amounts may be invested in any IDEX Fund. At October 31, 2003,
the value of invested plan amounts was $4. Invested plan amounts and the total
liability for deferred compensation to the Trustees under the Plan at October
31, 2003, are included in Net assets in the accompanying Statement of Assets
and Liabilities.
NOTE 3. INVESTMENT TRANSACTIONS
The cost of securities purchased and proceeds from securities sold (excluding
short-term securities) for the year ended October 31, 2003, are as follows:
Purchases of securities:
Long-Term excluding U.S. Government $ 72,222
U.S. Government -
Proceeds from maturities and sales of securities:
Long-Term excluding U.S. Government 76,516
U.S. Government -
IDEX Mutual Funds Annual Report 2003
IDEX Great Companies-America(SM) 10
IDEX Great Companies-America(SM)
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 4. FEDERAL INCOME TAX MATTERS
The Fund has not made any provision for federal income or excise taxes due to
its policy to distribute all of its taxable income and capital gains to its
shareholders and otherwise qualify as a regulated investment company under the
Internal Revenue Code. Income and capital gain distributions are determined in
accordance with income tax regulations, which may differ from GAAP. These
differences are primarily due to differing treatments for items including, but
not limited to, wash sales, net operating losses and capital loss
carryforwards.
Reclassifications between Undistributed net investment income (loss),
Undistributed net realized capital gains (loss) and Shares of beneficial
interest are made to reflect income and gains available for distribution under
federal tax regulations. Results of operations and net assets are not effected
by these reclassifications. These reclassifications are as follows:
Shares of beneficial interest, unlimited shares
authorized $ (462)
Accumulated net investment income (loss) 462
Accumulated net realized gain (loss) from
investment securities -
The tax basis components of distributable earnings as of October 31, 2003, are
as follows:
Undistributed Ordinary Income $ -
=========
Undistributed Long-term Capital Gains $ -
=========
Capital Loss Carryforward $ (21,213)
=========
Net Unrealized Appreciation (Depreciation) $ 4,606
=========
The capital loss carryforwards are available to offset future realized capital
gains through the periods listed:
Capital Loss
Carryforward Available through
- -------------- ------------------
$ 4,113 October 31, 2009
6,883 October 31, 2010
10,217 October 31, 2011
The aggregate cost of investments and composition of unrealized appreciation
(depreciation) for federal income tax purposes as of October 31, 2003, are as
follows:
Federal Tax Cost Basis $ 137,937
=========
Unrealized Appreciation $ 12,403
Unrealized (Depreciation) (7,797)
---------
Net Unrealized Appreciation (Depreciation) $ 4,606
=========
IDEX Mutual Funds Annual Report 2003
IDEX Great Companies-America(SM) 11
- --------------------------------------------------------------------------------
Report of Independent Certified Public Accountants
To the Board of Trustees and Shareholders of
IDEX Great Companies-America(SM)
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of IDEX Great Companies- America(SM)
(the "Fund") (one of the portfolios constituting the IDEX Mutual Funds) at
October 31, 2003, and the results of its operations, the changes in its net
assets and the financial highlights for each of the periods indicated, in
conformity with accounting principles generally accepted in the United States
of America. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Fund's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with auditing standards generally accepted in the
United States of America, which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits, which included confirmation of securities at October 31, 2003 by
correspondence with the custodian and brokers, provide a reasonable basis for
our opinion.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Tampa, Florida
December 18, 2003
IDEX Mutual Funds Annual Report 2003
IDEX Great Companies-America(SM) 12
IDEX Great Companies-Technology(SM)
- --------------------------------------------------------------------------------
MARKET ENVIRONMENT
The rise in market prices caught many by surprise in the spring and summer of
2003, but by autumn the improvement began to make sense. The report of the
fastest growth in Gross Domestic Product in almost twenty years gave confidence
to investors that profits and stock prices might have a long-term future. The
general news still includes war, scandal and nervousness about the
sustainability of world economic growth; however the fundamentals appear to
have been repaired.
The past few quarters demonstrated the integration of the world economy and the
interdependence of companies and industries. As movement toward additional
deregulation of world trade proceeds, together with an increasing movement to
lower tax rates overseas, we believe that the resumption of world growth rates
and productivity improvements should translate into higher confidence in the
sustainability of this recovery.
PERFORMANCE
For the year ended October 31, 2003, IDEX Great Companies-Technology(SM)
returned 41.02%. By comparison its benchmark, the NASDAQ Composite Index,
returned 45.31%. The portfolio holds very high quality, large capitalization
stocks that rose less during recent months than smaller capitalization stocks
that bounced from extremely depressed levels.
STRATEGY REVIEW
No investor can know the future and sometimes even the present is murky. After
the absurd heights of 1999 and 2000 valuations, science and technology stock
valuations in the past year probed levels that implied no growth in revenues or
profits -- ever again. Now, prices have risen sufficiently to levels that make
investing in technology stocks a challenge. Implied growth is now much closer
to historical levels, so getting estimates right is now very important to
portfolio performance.
Companies are reporting substantially better results than they or investors had
previously expected. That underscores the reality that even company managements
are incapable of seeing future results with any clarity. Now that the
fundamental underpinnings of stock prices seem more solid, investors have
lifted stock prices to reflect the change. Yet many are correctly skeptical
that extrapolation of current results are what got investors in trouble in
recent years. As we have said in previous commentary, there is no substitute
for examining each company in minute detail and understanding the basis for its
business results. And even then, no forecast of the future is without the
possibility of error.
/s/ James H. Huguet
James H. Huguet
/s/ Matthew C. Stephani
Matthew C. Stephani
/s/ Gerald W. Bollman
Gerald W. Bollman
Co-Fund Managers
Great Companies, L.L.C.
IDEX Mutual Funds Annual Report 2003
IDEX Great Companies-Technology(SM) 1
IDEX Great Companies-Technology(SM)
- --------------------------------------------------------------------------------
Comparison of change in value of $10,000 investment in Class A shares and its
comparative index.
Growth of $10,000
Inception of 7/14/00 through 10/31/03
Investment less sales charges - $9,452
[The following table was depicted as a mountain chart in the printed material.]
DATE Class A NASDAQ Composite
- ----------------- --------------- -------------------
7/14/2000 9,452 10,000
9/30/2000 8,000 8,650
12/31/2000 5,990 5,818
3/31/2001 4,177 4,334
6/30/2001 4,446 5,088
9/30/2001 2,912 3,530
12/31/2001 3,932 4,593
3/31/2002 3,894 4,346
6/30/2002 2,751 3,446
9/30/2002 2,042 2,760
12/31/2002 2,382 3,145
3/31/2003 2,486 3,159
6/30/2003 2,921 3,822
9/30/2003 3,214 4,208
10/31/2003 3,413 4,551
Average Annual Total Return for Periods Ended 10/31/03
- --------------------------------------------------------------------------------
From Inception
1 year Inception Date
- ------------------------------------------------------------
Class A (NAV) 41.02% -26.59% 7/14/00
Class A (POP) 33.26% -27.84% 7/14/00
NASDAQ Composite(1) 45.31% -21.25% 7/14/00
- ------------------------------------------------------------
Class B (NAV) 40.40% -27.21% 7/14/00
Class B (POP) 35.40% -27.66% 7/14/00
- ------------------------------------------------------------
Class C (NAV) 40.40% -27.21% 7/14/00
- ------------------------------------------------------------
Class L (NAV) - 43.27% 11/11/02
Class L (POP) - 41.27% 11/11/02
- ------------------------------------------------------------
Class M (NAV) 40.24% -27.15% 7/14/00
Class M (POP) 37.84% -27.37% 7/14/00
- ------------------------------------------------------------
NOTES
(1) The NASDAQ Composite (NASDAQ Composite) 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 Micropal(R)(C) 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 shares, (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.
Investing in technology stocks generally involves greater volatility and risks,
so an investment in the fund may not be appropriate for everyone.
Investments in a "non-diversified" fund may be subject to specific risks such
as susceptibility to single economic political, or regulatory events, and may
be subject to greater loss than investments in a diversified fund.
The management of this fund is based on a specific philosophy and on
proprietary systems and methodology. There is no guarantee the fund will
achieve its objectives.
Periods less than 1 year represent total return and are not annualized.
This material must be preceded or accompanied by a current prospectus, which
includes specific contents regarding the investment objectives and policies of
this fund.
IDEX Mutual Funds Annual Report 2003
IDEX Great Companies-Technology(SM) 2
IDEX Great Companies-Technology(SM)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
At October 31, 2003
(all amounts except share amounts in thousands)
Shares Value
- --------------------------------------------------------------------------------
COMMON STOCKS (90.8%)
Business Services (9.9%)
eBay Inc. (a) 30,600 $ 1,712
First Data Corporation (b) 203,583 7,268
Communications Equipment (3.8%)
UTStarcom, Inc. (a)(b) 108,454 3,416
Computer & Data Processing Services (19.0%)
Electronic Arts Inc. (a) 59,500 5,893
Microsoft Corporation 213,300 5,578
Symantec Corporation (a) 58,700 3,912
Yahoo! Inc. (a) 42,700 1,866
Computer & Office Equipment (19.7%)
Cisco Systems, Inc. (a) 165,700 3,476
Dell Computer Corporation (a) 136,800 4,941
EMC Corporation (a) 265,700 3,678
International Business Machines
Corporation 64,800 5,798
Electronic Components & Accessories (20.4%)
Analog Devices, Inc. (a) 70,500 3,125
Integrated Circuit Systems, Inc. (a) 55,700 1,870
Intel Corporation 98,524 3,256
Maxim Integrated Products 58,700 2,918
Texas Instruments Incorporated 130,300 3,768
Xilinx, Inc. (a) 115,300 3,656
Industrial Machinery & Equipment (2.1%)
Applied Materials, Inc. (a) 81,900 1,914
Instruments & Related Products (4.6%)
Waters Corporation (a) 132,400 4,161
Manufacturing Industries (4.7%)
International Game Technology 129,400 4,238
Pharmaceuticals (6.6%)
Amgen Inc. (a) 69,200 4,274
Genentech, Inc. (a) 21,400 1,754
--------
Total Common Stocks (cost: $70,545) 82,472
--------
Principal Value
- --------------------------------------------------------------------------------
SECURITY LENDING COLLATERAL (8.8%)
Debt (7.7%)
Bank Notes (0.9%)
Canadian Imperial Bank of Commerce
1.12%, due 11/04/2003 $ 346 $ 346
Fleet National Bank
1.06%, due 01/21/2004 484 484
Euro Dollar Terms (4.4%)
Bank of Montreal
1.03%, due 11/13/2003 277 277
1.04%, due 11/14/2003 243 243
Euro Dollar Terms (continued)
Bank of Nova Scotia (The)
1.06%, due 11/12/2003 $ 139 $ 139
Bank of Scotland
1.04%, due 11/14/2003 277 277
Citigroup Inc.
1.08%, due 01/05/2004 416 416
Credit Agricole Indosuez
1.08%, due 01/06/2004 305 305
Den Danske Bank
1.04%, due 11/10/2003 139 139
1.08%, due 01/20/2004 416 416
Royal Bank of Canada
1.04%, due 11/24/2003 346 346
1.06%, due 12/08/2003 139 139
Royal Bank of Scotland Group PLC (The)
1.08%, due 01/15/2004 416 416
SouthTrust Bank
1.08%, due 01/16/2004 416 416
Wells Fargo & Company
1.04%, due 11/20/2003 416 416
Promissory Notes (0.5%)
Goldman Sachs Group, Inc. (The)
1.15%, due 11/03/2003 485 485
Repurchase Agreements (1.9%) (c)
Goldman Sachs Group, Inc. (The)
1.10% Repurchase Agreement dated
10/31/2003 to be repurchased at $139
on 11/03/2003 139 139
Merrill Lynch & Co., Inc.
1.10% Repurchase Agreement dated
10/31/2003 to be repurchased at $1,593
on 11/03/2003 1,593 1,593
Shares Value
- --------------------------------------------------------------------------------
Investment Companies (1.1%)
Money Market Funds (1.1%)
Merrimac Cash Series Fund-
Premium Class
1-day yield of 0.97% 970,045 $ 970
--------
Total Security Lending Collateral (cost: $7,962) 7,962
--------
Total Investment Securities (cost: $78,507) $ 90,434
========
SUMMARY:
Investments, at value 99.6% $ 90,434
Other assets in excess of liabilities 0.4% 346
------- --------
Net assets 100.0% $ 90,780
======= ========
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 (see Note
1). The value at October 31, 2003, of all securities on loan is $7,765.
(c) Cash collateral for the Repurchase Agreements, valued at $1,767, 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.
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Great Companies-Technology(SM) 3
IDEX Great Companies-Technology(SM)
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
At October 31, 2003
(all amounts except per share amounts in thousands)
Assets:
Investment securities, at value (cost: $78,507)
(including $7,765 of securities loaned) $ 90,434
Cash 8,632
Receivables:
Shares of beneficial interest sold 617
Interest 2
Dividends 34
Other 10
--------
99,729
--------
Liabilities:
Investment securities purchased 714
Accounts payable and accrued liabilities:
Shares of beneficial interest redeemed 134
Management and advisory fees 53
Distribution fees 32
Transfer agent fees 21
Payable for securities on loan 7,962
Other 33
--------
8,949
--------
Net Assets $ 90,780
========
Net Assets Consist of:
Shares of beneficial interest, unlimited shares authorized $ 95,298
Undistributed net investment income (loss) -
Accumulated net realized gain (loss) from investment
securities (16,445)
Net unrealized appreciation (depreciation) on investment
securities 11,927
--------
Net Assets $ 90,780
========
Shares Outstanding:
Class A 21,679
Class B 2,242
Class C 675
Class L 211
Class M 432
Net Asset Value Per Share:
Class A $ 3.61
Class B 3.51
Class C 3.51
Class L 3.51
Class M 3.52
Maximum Offering Price Per Share (a):
Class A $ 3.82
Class M 3.56
(a) 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.
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the year ended October 31, 2003
(all amounts in thousands)
Investment Income:
Interest $ 12
Dividends 112
Income from loaned securities-net 2
--------
126
--------
Expenses:
Management and advisory fees 318
Transfer agent fees 143
Printing and shareholder reports 20
Custody fees 11
Administration fees 28
Legal fees 2
Auditing and accounting fees 20
Trustees fees 3
Registration fees 66
Other 2
Distribution and service fees:
Class A 108
Class B 56
Class C 19
Class L 1
Class M 12
--------
Total expenses 809
Less:
Advisory fee waiver (138)
--------
Net expenses 671
--------
Net Investment Income (Loss) (545)
--------
Net Realized and Unrealized Gain (Loss):
Realized gain (loss) from investment securities (1,484)
Increase (decrease) in unrealized appreciation
(depreciation) on investment securities 17,809
--------
Net Gain (Loss) on Investment Securities 16,325
--------
Net Increase (Decrease) in Net Assets Resulting from
Operations $ 15,780
========
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Great Companies-Technology(SM) 4
IDEX Great Companies-Technology(SM)
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended
(all amounts in thousands)
October 31, October 31,
2003 2002
----------- -----------
Increase (Decrease) In Net Assets From:
Operations:
Net investment income (loss) $ (545) $ (319)
Net realized gain (loss) from investment
securities (1,484) (8,549)
Net unrealized appreciation
(depreciation) on investment
securities 17,809 2,243
-------- --------
15,780 (6,625)
-------- --------
Distributions to Shareholders:
From net investment income:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
-------- --------
- -
-------- --------
From net realized gains:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
-------- --------
- -
-------- --------
Capital Share Transactions:
Proceeds from shares sold:
Class A 63,338 5,713
Class B 3,041 2,928
Class C 989 919
Class L 733 -
Class M 669 835
-------- --------
68,770 10,395
-------- --------
Dividends and distributions reinvested:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
-------- --------
- -
-------- --------
Cost of shares redeemed:
Class A (4,133) (3,274)
Class B (1,512) (2,231)
Class C (538) (722)
Class L (39) -
Class M (776) (552)
-------- --------
(6,998) (6,779)
-------- --------
61,772 3,616
-------- --------
Net increase (decrease) in net assets 77,552 (3,009)
-------- --------
Net Assets:
Beginning of year 13,228 16,237
-------- --------
End of year $ 90,780 $ 13,228
======== ========
Undistributed Net Investment Income (Loss) $ - $ (1)
======== ========
Share Activity:
Shares issued:
Class A 20,626 1,560
Class B 1,020 788
Class C 359 235
Class L 222 -
Class M 226 223
-------- --------
22,453 2,806
-------- --------
Shares issued-reinvested from distributions:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
-------- --------
- -
-------- --------
Shares redeemed:
Class A (1,465) (1,000)
Class B (516) (709)
Class C (181) (208)
Class L (11) -
Class M (268) (170)
-------- --------
(2,441) (2,087)
-------- --------
Net increase (decrease) in shares
outstanding 20,012 719
======== ========
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Great Companies-Technology(SM) 5
IDEX Great Companies-Technology(SM)
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share of beneficial interest outstanding throughout each period
-----------------------------------------------------------------------------------------------------------
Investment Operations Distributions
-------------------------------------------- -------------------------------------
Net Asset Net Asset
For the Value, Net Net Realized From Net From Net Value,
Period Beginning Investment and Unrealized Total Investment Realized Total End
Ended (d)(g) of Period Income (Loss) Gain (Loss) Operations Income Gains Distributions of Period
- ------------------------------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 $ 2.56 $ (0.04) $ 1.09 $ 1.05 $ - $ - $ - $ 3.61
10/31/2002 3.63 (0.05) (1.02) (1.07) - - - 2.56
10/31/2001 7.93 (0.06) (4.24) (4.30) - - - 3.63
10/31/2000 10.00 - (2.07) (2.07) - - - 7.93
- ------------------------------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 2.50 (0.06) 1.07 1.01 - - - 3.51
10/31/2002 3.58 (0.08) (1.00) (1.08) - - - 2.50
10/31/2001 7.91 (0.10) (4.23) (4.33) - - - 3.58
10/31/2000 10.00 (0.02) (2.07) (2.09) - - - 7.91
- ------------------------------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 2.50 (0.06) 1.07 1.01 - - - 3.51
10/31/2002 3.58 (0.08) (1.00) (1.08) - - - 2.50
10/31/2001 7.91 (0.09) (4.24) (4.33) - - - 3.58
10/31/2000 10.00 (0.02) (2.07) (2.09) - - - 7.91
- ------------------------------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 2.45 (0.06) 1.12 1.06 - - - 3.51
- ------------------------------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 2.51 (0.05) 1.06 1.01 - - - 3.52
10/31/2002 3.59 (0.07) (1.01) (1.08) - - - 2.51
10/31/2001 7.92 (0.09) (4.24) (4.33) - - - 3.59
10/31/2000 10.00 (0.01) (2.07) (2.08) - - - 7.92
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
-----------------------------------------------------------------------
Ratio of Expenses
Net Assets, to Average Net Investment
For the End of Net Assets (a) Income (Loss) Portfolio
Period Total Period ----------------------- to Average Turnover
Ended (g) Return (c) (000's) Net (e) Total (f) Net Assets (a) Rate (b)
- ---------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 41.02% $ 78,289 1.55% 1.90% (1.23)% 24%
10/31/2002 (29.45) 6,445 1.55 2.61 (1.40) 64
10/31/2001 (54.26) 7,106 1.55 2.68 (1.04) 58
10/31/2000 (20.66) 6,322 1.55 5.55 (0.64) 11
- ---------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 40.40 7,864 2.20 2.55 (1.88) 24
10/31/2002 (30.12) 4,348 2.20 3.26 (2.05) 64
10/31/2001 (54.80) 5,938 2.20 3.33 (1.69) 58
10/31/2000 (20.86) 3,295 2.20 6.20 (1.29) 11
- ---------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 40.40 2,366 2.20 2.55 (1.88) 24
10/31/2002 (30.12) 1,245 2.20 3.26 (2.05) 64
10/31/2001 (54.80) 1,683 2.20 3.33 (1.69) 58
10/31/2000 (20.86) 1,443 2.20 6.20 (1.29) 11
- ---------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 43.27 739 2.20 2.55 (1.88) 24
- ---------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 40.24 1,522 2.10 2.45 (1.78) 24
10/31/2002 (29.99) 1,190 2.10 3.16 (1.95) 64
10/31/2001 (54.71) 1,510 2.10 3.23 (1.59) 58
10/31/2000 (20.83) 710 2.10 6.10 (1.19) 11
- ---------------------------------------------------------------------------------------------------------------
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Great Companies-Technology(SM) 6
IDEX Great Companies-Technology(SM)
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (continued)
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 are not annualized.
(d) Per share information is calculated based on average number of shares
outstanding for the periods ended 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 (see note 2).
(f) Ratio of Total Expenses to Average Net Assets includes all expenses before
fee waivers and reimbursements by the investment adviser.
(g) IDEX Great Companies-Technology(SM) ("the Fund") commenced operations on
July 14, 2000. The inception date for the Fund's offering of share Class L
was November 11, 2002.
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Great Companies-Technology(SM) 7
IDEX Great Companies-Technology(SM)
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
At October 31, 2003
(all amounts in thousands)
NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
IDEX Mutual Funds is a Massachusetts business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company. IDEX Great Companies-Technology(SM) ("the Fund"),
part of IDEX Mutual Funds, began operations on July 14, 2000. The Fund is
"non-diversified" under the 1940 Act.
In the normal course of business the Fund enters into contracts that contain a
variety of representations and warranties and which provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown, as this would involve future claims that may be made against the Fund
and/or its affiliates that have not yet occurred. However, based on experience,
the Fund expects the risk of loss to be remote.
See the Prospectus and Statement of Additional Information for a description of
the Fund's investment objective.
In preparing the Fund's financial statements in accordance with accounting
principles generally accepted in the United States of America ("GAAP"),
estimates or assumptions (which could differ from actual results) may be used
that affect reported amounts and disclosures. The following policies were
consistently followed by the Fund, in accordance with GAAP.
Multiple class operations and expenses: The Fund currently offers five classes
of shares, each with a public offering price that reflects different sales
charges, if any, and expense levels. Effective November 11, 2002, Class C and M
shares were closed to new investors. Income, non-class specific expenses and
realized and unrealized gains and losses, are allocated daily to each class,
based upon the value of shares outstanding method as permitted under Rule 18f-3
of the 1940 Act. Each class bears its own specific expenses as well as a
portion of general, common expenses.
Security valuations: Fund investments traded on an exchange are valued at the
closing price on the day of valuation on the exchange where the security is
principally traded. With respect to securities traded on the NASDAQ INMS, such
closing price may be the last reported sales price or the NASDAQ Official
Closing Price.
Securities traded in the over-the-counter market and listed securities for
which no sale was reported on that date are valued at the last quoted bid
price.
Debt securities are valued by independent pricing services; however, those that
mature in sixty days or less are valued at amortized cost, which approximates
market.
Other securities for which quotations are not readily available are valued at
fair value determined in good faith, in accordance with procedures established
by and, under the supervision of the Board of Trustees and the Fund's Valuation
Committee.
Cash: The Fund may leave cash overnight in its cash account with the custodian,
Investors Bank & Trust Company ("IBT"). IBT has been contracted on behalf of
the Fund to invest the excess cash into a savings account, which at October 31,
2003, was paying an interest rate of 0.75%.
Securities lending: The Fund may lend securities to enhance fund earnings from
investing cash collateral received in making such loans to qualified borrowers
(typically broker/dealers). The Fund has engaged its custodian bank, IBT, as a
lending agent to administer its securities lending program. IBT earned $1 of
program net income for its services. When the Fund makes a security loan, it
receives cash collateral as protection against the risk that the borrower will
default on the loan, and records an asset for the cash invested collateral and
a liability for the return of the collateral.
Securities on loan are included in Investment securities at value in the
Statement of Assets and Liabilities and remain in the Schedule of Investments.
Loans of securities are required to be secured by collateral at least equal to
102% of the value of the securities at inception of the loan, and not less then
100% thereafter. The Fund may invest cash collateral in short-term money market
instruments including: U.S. Treasury Bills, U.S. agency obligations, commercial
paper, money market mutual funds, repurchase agreements and other highly rated,
liquid investments. During the life of securities loans, the collateral and
securities loaned remain subject to fluctuation in value. IBT marks to market
securities loaned and the collateral each business day. If additional
collateral is due (at least $1), IBT collects additional cash collateral from
the borrowers. Although securities loaned will be fully collateralized at all
times, IBT may experience delays in, or may be prevented from, recovering the
collateral on behalf of the Fund. The Fund may recall a loaned security
position at any time from the borrower through IBT. In the event the borrower
fails to timely return a recalled security, IBT may indemnify the Fund by
purchasing replacement securities for the Fund at its own expense and claiming
the collateral to fund such a purchase. IBT absorbs the loss if the collateral
value is not sufficient to cover the cost of the replacement securities. If
replacement securities are not available, IBT will credit the equivalent cash
value to the Fund.
Income from securities lending is included in the Statement of Operations. The
amounts of collateral and value of securities on loan are included in the
Statement of Assets and Liabilities as well as in the Schedule of Investments.
Security transactions and investment income: Security transactions are recorded
on the trade date. Security gains and losses are calculated on the specific
identification basis. Dividend income is recorded on the ex-dividend date or,
in the case of foreign securities, as soon as the Fund is informed of the
ex-dividend date. Interest income, including accretion of discounts and
amortization of premiums, is recorded on the accrual basis commencing on the
settlement date.
IDEX Mutual Funds Annual Report 2003
IDEX Great Companies-Technology(SM) 8
IDEX Great Companies-Technology(SM)
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 1-(continued)
Dividend distributions: Distributions to shareholders are recorded on the
ex-dividend date and are determined in accordance with Federal income tax
regulations which may differ from GAAP.
NOTE 2. RELATED PARTY TRANSACTIONS
AEGON/Transamerica Fund Advisers, Inc. ("ATFA") is the Fund's investment
adviser. AEGON/Transamerica Fund Services, Inc. ("ATFS") is the Fund's
administrator. AFSG Securities Corp. ("AFSG") is the Fund's
distributor/principal underwriter. AEGON/Transamerica Investor Services, Inc.
("ATIS") is the 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. AUSA and WRL are wholly owned indirect
subsidiaries of AEGON NV, a Netherlands corporation.
The following schedule reflects the percentage of fund assets owned by
affiliated mutual funds (ie: through the assets allocation funds)
Net % of
Assets Net Assets
---------- -----------
IDEX Asset Allocation
Conservative Portfolio $ 9,035 9%
IDEX Asset Allocation Growth 12,565 13%
IDEX Asset Allocation Moderate
Growth 24,341 25%
IDEX Asset Allocation Moderate 22,298 23%
----
70%
====
Great Companies, LLC is both an affiliate of the Fund and a sub-adviser to the
Fund.
Investment advisory fees: The Fund pays management fees to ATFA based on
average daily net assets ("ANA") at the following stated break points:
0.80% of the first $500 million of ANA
0.70% of ANA over $500 million
ATFA currently voluntarily waives its advisory fee and will reimburse the Fund
to the extent that operating expenses, excluding 12b-1 fees, exceed the
following stated annual limit:
1.20% Expense Limit
If total fund expenses fall below the annual expense limitations agreed to by
the adviser within the succeeding three years, the Fund may be required to pay
the advisor a portion or all of the waived advisory fees.
Advisory Fee Available for
Waived Recapture Through
-------------- ------------------
Fiscal Year 2003 138 10/31/2006
Fiscal Year 2002 193 10/31/2005
Fiscal Year 2001 192 10/31/2004
For the year ended October 31, 2003, ATFA has voluntarily agreed to waive the
recapture of $ 83 reimbursed expenses that were otherwise eligible for
recapture.
Distribution and service fees: The Fund has a 12b-1 distribution plan under the
1940 Act pursuant to which an annual fee, based on average daily net assets, is
paid to the distributor for various disbursements such as broker-dealer account
servicing fees and other promotional expenses of the Fund. The 12b-1 fee for
the Fund is comprised of a 0.25% service fee and the remaining amount is an
asset-based sales charge/distribution fee. The Fund is authorized under the
12b-1 plan to pay fees on each class up to the following limits:
Class A 0.35%
Class B 1.00%
Class C 1.00%
Class L 1.00%
Class M 0.90%
Underwriter commissions relate to front-end sales charges imposed for Class A
and M shares and contingent deferred sales charges from Classes B, L, M and
certain A share redemptions. For the year ended October 31, 2003, the
underwriter commissions were as follows:
Received by Underwriter $ 40
Retained by Underwriter 5
Contingent Sales Charges 17
Administrative services: The Fund has entered into an agreement with ATFS for
financial and legal fund administration services, which include such items as
compliance, expenses, financial statements and other reporting, distributions,
tax returns, prospectus preparation, board of trustees meeting support and
other legal matters. Transfer agent fees are reflected separately from
Administration fees on the Statement of Operations. The Legal fees on the
Statement of Operations are for fees paid to external legal counsel. ATFS
provides its services to the Fund at cost and is reimbursed monthly.
Transfer agent fees: The Fund incurs ATIS annual per-account charges (not in
thousands) of $20.00 for each open shareholder account and $1.63 for each
closed account maintained, and certain out of pocket expenses.
Deferred compensation plan: Each eligible Fund Trustee may elect participation
in the Deferred Compensation Plan ("the Plan"). Under the Plan, such Trustees
may defer payment of a percentage of their total fees earned as a Fund Trustee.
These deferred amounts may be invested in any IDEX Fund. At October 31, 2003,
the value of invested plan amounts was $1. Invested plan amounts and the total
liability for deferred compensation to the Trustees under the Plan at October
31, 2003, are included in Net assets in the accompanying Statement of Assets
and Liabilities.
IDEX Mutual Funds Annual Report 2003
IDEX Great Companies-Technology(SM) 9
IDEX Great Companies-Technology(SM)
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 3. INVESTMENT TRANSACTIONS
The cost of securities purchased and proceeds from securities sold (excluding
short-term securities) for the year ended October 31, 2003, are as follows:
Purchases of securities:
Long-Term excluding U.S. Government $ 62,318
U.S. Government -
Proceeds from maturities and sales of securities:
Long-Term excluding U.S. Government 8,934
U.S. Government -
NOTE 4. FEDERAL INCOME TAX MATTERS
The Fund has not made any provision for federal income or excise taxes due to
its policy to distribute all of its taxable income and capital gains to its
shareholders and otherwise qualify as a regulated investment company under the
Internal Revenue Code. Income and capital gain distributions are determined in
accordance with income tax regulations, which may differ from GAAP. These
differences are primarily due to differing treatments for items including, but
not limited to, wash sales, net operating losses and capital loss
carryforwards.
Reclassifications between Undistributed net investment income (loss),
Undistributed net realized capital gains (loss) and Shares of beneficial
interest are made to reflect income and gains available for distribution under
federal tax regulations. Results of operations and net assets are not effected
by these reclassifications. These reclassifications are as follows:
Shares of beneficial interest, unlimited
shares authorized $ (546)
Undistributed net investment income (loss) 546
Accumulated net realized gain (loss) from
investment securities -
The tax basis components of distributable earnings as of October 31, 2003, are
as follows:
Undistributed Ordinary Income $ -
=========
Undistributed Long-term Capital Gains $ -
=========
Capital Loss Carryforward $ (14,661)
=========
Net Unrealized Appreciation (Depreciation) $ 10,143
=========
The capital loss carryforwards are available to offset future realized capital
gains through the periods listed:
Capital Loss
Carryforward Available through
- -------------- ------------------
$ 5,516 October 31, 2009
7,851 October 31, 2010
1,294 October 31, 2011
The aggregate cost of investments and composition of unrealized appreciation
(depreciation) for federal income tax purposes as of October 31, 2003, are as
follows:
Federal Tax Cost Basis $ 80,291
========
Unrealized Appreciation $ 11,952
Unrealized (Depreciation) (1,809)
--------
Net Unrealized Appreciation (Depreciation) $ 10,143
========
IDEX Mutual Funds Annual Report 2003
IDEX Great Companies-Technology(SM) 10
- --------------------------------------------------------------------------------
Report of Independent Certified Public Accountants
To the Board of Trustees and Shareholders of
IDEX Great Companies-Technology(SM)
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of IDEX Great Companies-Technology(SM)
(the "Fund") (one of the portfolios constituting the IDEX Mutual Funds) at
October 31, 2003, and the results of its operations, the changes in its net
assets and the financial highlights for each of the periods indicated, in
conformity with accounting principles generally accepted in the United States
of America. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Fund's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with auditing standards generally accepted in the
United States of America, which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits, which included confirmation of securities at October 31, 2003 by
correspondence with the custodian and brokers, provide a reasonable basis for
our opinion.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Tampa, Florida
December 18, 2003
IDEX Mutual Funds Annual Report 2003
IDEX Great Companies-Technology(SM) 11
IDEX Isabelle Small Cap Value
- --------------------------------------------------------------------------------
MARKET ENVIRONMENT
Early on, investors were again taken for a roller-coaster ride from anxious
anticipation of an economic recovery to despair when expectations were not met.
Recently, though, that instability seems to have given way to a steady upswing,
and with it a nascent market rally picked up steam. As measured by the Russell
2000 Index ("Russell 2000"), small capitalization issues, which can respond
more quickly to economic stimulus, performed quite well, handily out performing
all of the major indexes, save the Nasdaq Composite Index, essentially matching
it.
The war with Iraq has wound down to a dull roar, while on the home front,
interest rates remain low, liquidity appears to be ample, and economic
performance is generally improving. Inflation remains in check as worker
productivity is up stunningly, reducing the pressure to raise prices in the
face of escalating commodity prices. The sky is not cloudless however, and
although today's observations suggest further economic gains, vigilance is
warranted, particularly on the geopolitical front.
PERFORMANCE
For the year ended October 31, 2003, IDEX Isabelle Small Cap Value returned
42.35%. By comparison its benchmark, the Russell 2000, returned 43.37%.
STRATEGY REVIEW
Ironwood Capital Management's investment philosophy focuses on finding excess
economic value. As the tone of the general economy and business climate
changes, we would expect to find different kinds of companies with such
characteristics, but the analysis is always based on seeking those companies
whose economic value, which is a function of net assets and expected cash
flows, relative to the cost of the capital required to create them, greatly
exceeds the current market price of the company's common stock.
The investment approach is one of stock selection and is bottom-up. We build
the portfolio company-by-company, case-by-case. As all good "value" investors
should, we want to buy "something for nothing." However, unlike many
value-oriented funds, we do not arbitrarily invest in only those companies that
fit a certain set of statistical valuation criteria, but rather go wherever
economic value is to be found. For example, over the past year, the portfolio
has benefited from such diverse sources as ARIAD Pharmaceuticals, Inc., a
biotechnology company, Ditech Communications Corporation, a provider of
communications equipment, as well as from Tesoro Petroleum Corporation, a
petroleum refiner. Portfolio winners were far more numerous, but there were
losers. The apparently strengthening economy left some of our manufacturing and
consumer goods companies still struggling, with DT Industries, Inc. ("DT
Industries"), an automation equipment supplier, AK Steel Holding Corporation,
and Oneida Ltd. ("Oneida"), the well-known flatware producer, all down.
/s/ Warren J. Isabelle
Warren J. Isabelle
Fund Manager
Ironwood Capital Management, LLC
IDEX Mutual Funds Annual Report 2003
IDEX Isabelle Small Cap Value 1
IDEX Isabelle Small Cap Value
- --------------------------------------------------------------------------------
Comparison of change in value of $10,000 investment in Class A shares and its
comparative index.
Growth of $10,000
Inception of 4/2/01 through 10/31/03
Investment less sales charges - $9,452
[The following table was depicted as a mountain chart in the printed material.]
DATE Class A Russell 2000
- ---------------- ------------------ ----------------------
4/2/2001 9,452 10,000
6/30/2001 11,238 11,429
9/30/2001 9,159 9,053
12/31/2001 10,539 10,962
3/31/2002 11,739 11,398
6/30/2002 11,531 10,446
9/30/2002 8,516 8,211
12/31/2002 8,894 8,716
3/31/2003 7,959 8,325
6/30/2003 10,417 10,275
9/30/2003 11,551 11,208
10/31/2003 12,231 12,149
Average Annual Total Return for Periods Ended 10/31/03
- --------------------------------------------------------------------------------
From Inception
1 year Inception Date
- --------------------------------------------------------
Class A (NAV) 42.35% 10.49% 4/2/01
Class A (POP) 34.52% 8.09% 4/2/01
Russell 2000(1) 43.37% 7.81% 4/2/01
- --------------------------------------------------------
Class B (NAV) 41.76% 9.79% 4/2/01
Class B (POP) 36.76% 8.78% 4/2/01
- --------------------------------------------------------
Class C (NAV) 41.76% 9.79% 4/2/01
- --------------------------------------------------------
Class L (NAV) - 41.29% 11/11/02
Class L (POP) - 39.29% 11/11/02
- --------------------------------------------------------
Class M (NAV) 41.78% 9.89% 4/2/01
Class M (POP) 39.36% 9.46% 4/2/01
- --------------------------------------------------------
NOTES
(1) The Russell 2000 (Russell 2000) 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 Micropal(R)(C) 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 shares, (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.
Investing in small cap stocks generally involves greater risk and volatility,
therefore an investment in the fund may not be appropriate for everyone.
Periods less than 1 year represent total return and are not annualized.
This material must be preceded or accompanied by a current prospectus, which
includes specific contents regarding the investment objectives and policies of
this fund.
IDEX Mutual Funds Annual Report 2003
IDEX Isabelle Small Cap Value 2
IDEX Isabelle Small Cap Value
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
At October 31, 2003
(all amounts except share amounts in thousands)
Shares Value
- ----------------------------------------------------------------------------------------
COMMON STOCKS (86.9%)
Agriculture (1.0%)
Chiquita Brands International, Inc. (a) 106,300 $ 1,967
Apparel Products (1.2%)
Innovo Group Inc. (a)(b) 187,500 827
Tommy Hilfiger Corporation (a) 116,700 1,714
Automotive (3.6%)
GenCorp Inc. 295,400 2,797
National R.V. Holdings, Inc. (a) 308,200 3,329
Transpro, Inc. (a)(b) 335,200 1,337
Business Services (2.2%)
Idine Rewards Network Inc. (a)(b) 229,600 2,507
Teletech Holdings, Inc. (a) 151,500 997
Westaff, Inc. (a) 431,900 998
Chemicals & Allied Products (8.3%)
American Vanguard Corporation 113,850 3,370
Crompton Corporation 714,500 3,829
Olin Corporation 140,400 2,444
PolyOne Corporation 934,700 4,515
Strategic Diagnostics Inc. (a) 190,900 892
Terra Nitrogen Company, L.P. 382,600 1,913
Communications Equipment (3.6%)
Ditech Communications Corporation (a) 171,900 1,814
EMS Technologies, Inc. (a) 118,300 2,106
SeaChange International, Inc. (a) 34,900 537
Sycamore Networks, Inc. (a) 590,700 2,954
Computer & Office Equipment (2.7%)
Agilysys, Inc. 245,110 2,520
Hypercom Corporation (a) 221,700 1,091
Imation Corp. 57,000 1,941
Construction (1.4%)
Quanta Services, Inc. (a) 348,800 2,853
Electric Services (1.2%)
Duquesne Light Holdings, Inc. 149,400 2,401
Electronic & Other Electric Equipment (2.3%)
Lamson & Sessions Co. (The) (a) 307,000 1,857
Magnetek, Inc. (a) 455,200 2,772
Electronic Components & Accessories (0.9%)
Woodhead Industries, Inc. 114,500 1,809
Fabricated Metal Products (4.5%)
Global Power Equipment Group Inc. (a) 500,700 2,959
Material Sciences Corporation (a) 261,100 2,449
Shaw Group Inc. (The) (a)(b) 282,000 3,849
Food & Kindred Products (1.0%)
Poore Brothers, Inc. (a) 450,200 2,071
Health Services (2.3%)
Hanger Orthopedic Group, Inc. (a) 146,800 2,503
U.S. Physical Therapy, Inc. (a) 146,500 2,108
Holding & Other Investment Offices (1.4%)
4Kids Entertainment, Inc. (a) 121,100 $ 2,961
Industrial Machinery & Equipment (4.5%)
DT Industries, Inc. (a) 856,700 908
JLG Industries, Inc. 119,200 1,423
NACCO Industries, Inc.-Class A 59,800 4,712
Newpark Resources, Inc. (a) 561,000 2,255
Instruments & Related Products (2.5%)
Analogic Corporation 58,200 2,540
Sypris Solutions, Inc. 189,400 2,650
Insurance (1.4%)
Allmerica Financial Corporation (a) 106,500 2,836
Insurance Agents, Brokers & Service (1.2%)
Hilb, Rogal and Hamilton Company 68,100 2,044
National Medical Health Card Systems, Inc. (a) 21,400 321
Leather & Leather Products (1.0%)
Steven Madden, Ltd. (a) 91,400 1,959
Management Services (0.9%)
First Consulting Group, Inc. (a) 333,800 1,816
Manufacturing Industries (1.1%)
Oneida Ltd. 454,300 2,149
Medical Instruments & Supplies (0.4%)
Celsion Corporation (a) 895,400 851
Oil & Gas Extraction (7.3%)
Denbury Resources Inc. (a) 210,900 2,662
Harvest Natural Resources, Inc. (a) 133,500 910
Magnum Hunter Resources, Inc. (a) 446,400 3,861
Mission Resources Corporation (a) 377,300 943
Southwestern Energy Company (a)(b) 120,700 2,342
Willbros Group, Inc. (a) 366,400 4,265
Paper & Allied Products (2.2%)
Graphic Packaging Corporation (a) 661,000 2,551
Wausau-Mosinee Paper Corporation 157,700 1,949
Petroleum Refining (1.9%)
Tesoro Petroleum Corporation (a)(b) 338,400 3,858
Pharmaceuticals (10.2%)
ARIAD Pharmaceuticals, Inc. (a) 985,500 6,987
Avigen, Inc. (a)(b) 104,200 702
Chattem, Inc. (a) 114,800 1,684
Durect Corporation (a)(b) 404,200 901
EPIX Medical, Inc. (a) 122,900 2,275
PRAECIS Pharmaceuticals Incorporated (a) 620,400 4,299
Sirna Therapeutics, Inc. (a)(b) 89,200 698
Theragenics Corporation[RegTM] (a) 305,100 1,358
United Therapeutics Corporation (a)(b) 110,800 2,230
Primary Metal Industries (2.7%)
Commonwealth Industries, Inc. 592,200 4,057
RTI International Metals, Inc. (a) 127,800 1,535
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Isabelle Small Cap Value 3
IDEX Isabelle Small Cap Value
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Shares Value
- --------------------------------------------------------------------------------
Printing & Publishing (1.0%)
Paxar Corporation (a) 176,800 $ 2,118
Radio, Television & Computer Stores (3.4%)
InterTAN, Inc. (a) 406,100 4,272
Tweeter Home Entertainment Group, Inc. (a) 320,700 2,678
Research & Testing Services (1.0%)
Maxygen, Inc. (a) 207,900 1,975
Retail Trade (0.4%)
PC Mall, Inc. (a) 94,200 795
Stone, Clay & Glass Products (0.5%)
Apogee Enterprises, Inc. 88,400 924
Telecommunications (1.8%)
D&E Communications, Inc. 137,040 1,931
Lightbridge, Inc. (a) 191,300 1,836
Textile Mill Products (1.1%)
Russell Corporation 118,800 2,172
Transportation & Public Utilities (0.5%)
Navigant International, Inc. (a) 61,900 933
Wholesale Trade Durable Goods (2.3%)
A.M. Castle & Co (a) 466,900 2,428
Danka Business Systems PLC-ADR (a) 725,600 2,228
---------
Total Common Stocks (cost: $156,600) 177,812
---------
Principal Value
- --------------------------------------------------------------------------------
SECURITY LENDING COLLATERAL (8.3%)
Debt (7.3%)
Bank Notes (0.9%)
Canadian Imperial Bank of Commerce
1.12%, due 11/04/2003 $ 737 $ 737
Fleet National Bank
1.06%, due 01/21/2004 1,032 1,032
Euro Dollar Terms (4.1%)
Bank of Montreal
1.03%, due 11/13/2003 590 590
1.04%, due 11/14/2003 518 518
Bank of Nova Scotia (The)
1.06%, due 11/12/2003 295 295
Bank of Scotland
1.04%, due 11/14/2003 590 590
Euro Dollar Terms (continued)
Citigroup Inc.
1.08%, due 01/05/2004 $ 885 $ 885
Credit Agricole Indosuez
1.08%, due 01/06/2004 649 649
Den Danske Bank
1.04%, due 11/10/2003 295 295
1.08%, due 01/20/2004 885 885
Royal Bank of Canada
1.04%, due 11/24/2003 737 737
1.06%, due 12/08/2003 295 295
Royal Bank of Scotland Group PLC (The)
1.08%, due 01/15/2004 885 885
SouthTrust Bank
1.08%, due 01/16/2004 885 885
Wells Fargo & Company
1.04%, due 11/20/2003 885 885
Promissory Notes (0.5%)
Goldman Sachs Group, Inc. (The)
1.15%, due 11/03/2003 1,032 1,032
Repurchase Agreements (1.8%) (c)
Goldman Sachs Group, Inc. (The)
1.10% Repurchase Agreement dated
10/31/2003 to be repurchased at $295
on 11/03/2003 295 295
Merrill Lynch & Co., Inc.
1.10% Repurchase Agreement dated
10/31/2003 to be repurchased at $3,391
on 11/03/2003 3,391 3,391
Shares Value
- --------------------------------------------------------------------------------
Investment Companies (1.0%)
Money Market Funds (1.0%)
Merrimac Cash Series Fund-
Premium Class
1-day yield of 0.97% 2,064,416 $ 2,064
---------
Total Security Lending Collateral (cost: $16,945) 16,945
---------
Total Investment Securities (cost: $173,545) $ 194,757
=========
SUMMARY:
Investments, at value 95.2% $ 194,757
Other assets in excess of liabilities 4.8% 9,811
--------- ---------
Net assets 100.0% $ 204,568
========= =========
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 (see Note
1). The value at October 31, 2003, of all securities on loan is $15,082.
(c) Cash collateral for the Repurchase Agreements, valued at $3,760, 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
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Isabelle Small Cap Value 4
IDEX Isabelle Small Cap Value
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
At October 31, 2003
(all amounts except per share amounts in thousands)
Assets:
Investment securities, at value (cost: $173,545) (including
$15,082 of securities loaned) $ 194,757
Cash 25,915
Receivables:
Investment securities sold 499
Shares of beneficial interest sold 1,365
Interest 4
Dividends 75
Other 16
---------
222,631
---------
Liabilities:
Investment securities purchased 393
Accounts payable and accrued liabilities:
Shares of beneficial interest redeemed 403
Management and advisory fees 149
Distribution fees 85
Transfer agent fees 43
Payable for securities on loan 16,945
Other 45
---------
18,063
---------
Net Assets $ 204,568
=========
Net Assets Consist of:
Shares of beneficial interest, unlimited shares authorized $ 184,858
Accumulated net investment income (loss) (1)
Accumulated net realized gain (loss) from investment
securities (1,501)
Net unrealized appreciation (depreciation) on investment
securities 21,212
---------
Net Assets $ 204,568
=========
Shares Outstanding:
Class A 11,555
Class B 2,608
Class C 1,131
Class L 157
Class M 425
Net Asset Value Per Share:
Class A $ 12.94
Class B 12.73
Class C 12.73
Class L 12.73
Class M 12.76
Maximum Offering Price Per Share (a):
Class A $ 13.69
Class M 12.89
(a) 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.
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the year ended October 31, 2003
(all amounts in thousands)
Investment Income:
Interest $ 28
Dividends 702
Income from loaned securities-net 29
--------
759
--------
Expenses:
Management and advisory fees 1,000
Transfer agent fees 312
Printing and shareholder reports 46
Custody fees 32
Administration fees 33
Auditing and accounting fees 19
Trustees fees 8
Registration fees 67
Legal fees 6
Other 5
Distribution and service fees:
Class A 239
Class B 259
Class C 124
Class L 6
Class M 38
--------
Total expenses 2,194
--------
Net Investment Income (Loss) (1,435)
--------
Net Realized and Unrealized Gain (Loss):
Realized gain (loss) from investment securities 1,765
Increase (decrease) in unrealized appreciation
(depreciation) on investment securities 39,433
--------
Net Gain (Loss) on Investment Securities 41,198
--------
Net Increase (Decrease) in Net Assets Resulting from
Operations $ 39,763
========
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Isabelle Small Cap Value 5
IDEX Isabelle Small Cap Value
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended
(all amounts in thousands)
October 31, October 31,
2003 2002
----------- -----------
Increase (Decrease) In Net Assets From:
Operations:
Net investment income (loss) $ (1,435) $ (804)
Net realized gain (loss) from investment
securities 1,765 (2,706)
Net unrealized appreciation
(depreciation) on investment
securities 39,433 (17,075)
--------- ---------
39,763 (20,585)
--------- ---------
Distributions to Shareholders:
From net investment income:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
--------- ---------
- -
--------- ---------
From net realized gains:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
--------- ---------
- -
--------- ---------
Capital Share Transactions:
Proceeds from shares sold:
Class A 106,174 58,353
Class B 7,499 34,191
Class C 1,858 14,164
Class L 1,782 -
Class M 1,585 6,626
--------- ---------
118,898 113,334
--------- ---------
Dividends and distributions reinvested:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
--------- ---------
- -
--------- ---------
Cost of shares redeemed:
Class A (26,571) (10,551)
Class B (7,874) (10,106)
Class C (3,907) (2,668)
Class L (53) -
Class M (1,799) (2,458)
--------- ---------
(40,204) (25,783)
--------- ---------
78,694 87,551
--------- ---------
Net increase (decrease) in net assets 118,457 66,966
--------- ---------
Net Assets:
Beginning of year 86,111 19,145
--------- ---------
End of year $ 204,568 $ 86,111
========= =========
Accumulated Net Investment Income (Loss) $ (1) $ (1)
========= =========
Share Activity:
Shares issued:
Class A 9,359 5,351
Class B 706 2,951
Class C 193 1,250
Class L 162 -
Class M 139 562
--------- ---------
10,559 10,114
--------- ---------
Shares issued-reinvested from distributions:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
--------- ---------
- -
--------- ---------
Shares redeemed:
Class A (2,811) (989)
Class B (813) (990)
Class C (402) (262)
Class L (5) -
Class M (179) (242)
--------- ---------
(4,210) (2,483)
--------- ---------
Net increase (decrease) in shares
outstanding 6,349 7,631
========= =========
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Isabelle Small Cap Value 6
IDEX Isabelle Small Cap Value
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share of beneficial interest outstanding throughout each period
-----------------------------------------------------------------------------------------------------------
Investment Operations Distributions
-------------------------------------------- -------------------------------------
Net Asset Net Asset
For the Value, Net Net Realized From Net From Net Value,
Period Beginning Investment and Unrealized Total Investment Realized Total End
Ended (d)(g) of Period Income (Loss) Gain (Loss) Operations Income Gains Distributions of Year
- ------------------------------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 $ 9.09 $ (0.11) $ 3.96 $ 3.85 $ - $ - $ - $ 12.94
10/31/2002 10.12 (0.07) (0.96) (1.03) - - - 9.09
10/31/2001 10.00 (0.02) 0.14 0.12 - - - 10.12
- ------------------------------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 8.98 (0.17) 3.92 3.75 - - - 12.73
10/31/2002 10.08 (0.19) (0.91) (1.10) - - - 8.98
10/31/2001 10.00 (0.05) 0.13 0.08 - - - 10.08
- ------------------------------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 8.98 (0.17) 3.92 3.75 - - - 12.73
10/31/2002 10.08 (0.19) (0.91) (1.10) - - - 8.98
10/31/2001 10.00 (0.05) 0.13 0.08 - - - 10.08
- ------------------------------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 9.01 (0.18) 3.90 3.72 - - - 12.73
- ------------------------------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 9.00 (0.16) 3.92 3.76 - - - 12.76
10/31/2002 10.09 (0.19) (0.90) (1.09) - - - 9.00
10/31/2001 10.00 (0.06) 0.15 0.09 - - - 10.09
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
-----------------------------------------------------------------------
Ratio of Expenses
Net Assets, to Average Net Investment
For the End of Net Assets (a) Income (Loss) Portfolio
Period Total Period ----------------------- to Average Turnover
Ended (g) Return (c) (000's) Net (e) Total (f) Net Assets (a) Rate (b)
- ---------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 42.35% $ 149,557 1.73% 1.73% (1.04)% 55%
10/31/2002 (10.18) 45,500 1.85 1.98 (0.88) 22
10/31/2001 1.20 6,536 1.85 3.56 (0.32) 8
- ---------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 41.76 33,196 2.38 2.38 (1.69) 55
10/31/2002 (10.91) 24,391 2.50 2.63 (1.53) 22
10/31/2001 0.80 7,604 2.50 4.21 (0.97) 8
- ---------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 41.76 14,392 2.38 2.38 (1.69) 55
10/31/2002 (10.91) 12,034 2.50 2.63 (1.53) 22
10/31/2001 0.80 3,545 2.50 4.21 (0.97) 8
- ---------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 41.29 1,995 2.38 2.38 (1.69) 55
- ---------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 41.78 5,428 2.28 2.28 (1.59) 55
10/31/2002 (10.80) 4,186 2.40 2.53 (1.43) 22
10/31/2001 0.90 1,460 2.40 4.11 (0.87) 8
- ---------------------------------------------------------------------------------------------------------------
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 are not annualized.
(d) Per share information is calculated based on average number of shares
outstanding.
(e) Ratio of Net Expenses to Average Net Assets is net of fee waivers and
reimbursements by the investment adviser, if any (see note 2).
(f) Ratio of Total Expenses to Average Net Assets includes all expenses before
fee wavivers and reimbursements by the investment adviser.
(g) IDEX Isabelle Small Cap Value ("the Fund") commenced operations on April 2,
2001. The inception date for the Fund's offering of share Class L was
November 11, 2002.
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Isabelle Small Cap Value 7
IDEX Isabelle Small Cap Value
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
At October 31, 2003
(all amounts in thousands)
NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
IDEX Mutual Funds is a Massachusetts business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company. IDEX Isabelle Small Cap Value ("the Fund"), part
of IDEX Mutual Funds, began operations on April 2, 2001.
In the normal course of business the Fund enters into contracts that contain a
variety of representations and warranties which provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown, as this would involve future claims that may be made against the Fund
and/or its affiliates that have not yet occurred. However, based on experience,
the Fund expects the risk of loss to be remote.
See the Prospectus and Statement of Additional Information for a description of
the Fund's investment objective.
In preparing the Fund's financial statements in accordance with accounting
principles generally accepted in the United States of America ("GAAP"),
estimates or assumptions (which could differ from actual results) may be used
that affect reported amounts and disclosures. The following policies were
consistently followed by the Fund, in accordance with GAAP.
Multiple class operations and expenses: The Fund currently offers five classes
of shares, each with a public offering price that reflects different sales
charges, if any, and expense levels. Effective November 11, 2002, Class C and M
shares were closed to new investors. Income, non-class specific expenses and
realized and unrealized gains and losses, are allocated daily to each class,
based upon the value of shares outstanding method as permitted under Rule 18f-3
of the 1940 Act. Each class bears its own specific expenses as well as a
portion of general, common expenses.
Security valuations: Fund investments traded on an exchange are valued at the
closing price on the day of valuation on the exchange where the security is
principally traded. With respect to securities traded on the NASDAQ INMS, such
closing price may be the last reported sales price or the NASDAQ Official
Closing Price.
Securities traded in the over-the-counter market and listed securities for
which no sale was reported on that date are valued at the last quoted bid
price.
Debt securities are valued by independent pricing services; however, those that
mature in sixty days or less are valued at amortized cost, which approximates
market.
Other securities for which quotations are not readily available are valued at
fair value determined in good faith, in accordance with procedures established
by and, under the supervision of the Board of Trustees and the Fund's Valuation
Committee.
Cash: The Fund may leave cash overnight in its cash account with the custodian,
Investors Bank & Trust Company ("IBT"). IBT has been contracted on behalf of
the Fund to invest the excess cash into a savings account, which at October 31,
2003, was paying an interest rate of 0.75%.
Directed brokerage: The sub-adviser, to the extent consistent with the best
execution and usual commission rate policies and practices, may place security
transactions of the Fund with broker/dealers with which IDEX Mutual Funds has
established a Directed Brokerage Program. A Directed Brokerage Program is any
arrangement under which a broker/dealer applies a portion of the commissions
received by such broker/dealer on the security transactions to the Fund. In no
event will commissions paid by the Fund be used to pay expenses that would
otherwise be borne by any other funds within IDEX Mutual Funds, or by any other
party. Directed commissions during the year ended October 31, 2003, of $116 are
included in net realized gains in the Statement of Operations.
Securities lending: The Fund may lend securities to enhance fund earnings from
investing cash collateral received in making such loans to qualified borrowers
(typically broker/dealers). The Fund has engaged its custodian bank, IBT, as a
lending agent to administer its securities lending program. IBT earned $9 of
program net income for its services. When the Fund makes a security loan, it
receives cash collateral as protection against the risk that the borrower will
default on the loan, and records an asset for the cash invested collateral and
a liability for the return of the collateral.
Securities on loan are included in Investment securities at value on the
Statement of Assets and Liabilities and remain on the Schedule of Investments.
Loans of securities are required to be secured by collateral at least equal to
102% of the value of the securities at inception of the loan, and not less then
100% thereafter. The Fund may invest cash collateral in short-term money market
instruments including: U.S. Treasury Bills, U.S. agency obligations, commercial
paper, money market mutual funds, repurchase agreements and other highly rated,
liquid investments. During the life of securities loans, the collateral and
securities loaned remain subject to fluctuation in value. IBT marks to market
securities loaned and the collateral each business day. If additional
collateral is due (at least $1), IBT collects additional cash collateral from
the borrowers. Although securities loaned will be fully collateralized at all
times, IBT may experience delays in, or may be prevented from, recovering the
collateral on behalf of the Fund. The Fund may recall a loaned security
position at any time from the borrower through IBT. In the event the borrower
fails to timely return a recalled security, IBT may indemnify the Fund by
purchasing replacement securities for the Fund at its own expense and claiming
the collateral to fund such a purchase. IBT absorbs the loss if the collateral
value is not sufficient to cover the cost of the replacement securities. If
replacement securities are not available, IBT will credit the equivalent cash
value to the Fund.
IDEX Mutual Funds Annual Report 2003
IDEX Isabelle Small Cap Value 8
IDEX Isabelle Small Cap Value
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 1-(continued)
Income from securities lending is included in the Statement of Operations. The
amount of collateral and value of securities on loan are included in the
Statement of Assets and Liabilities as well as on the Schedule of Investments.
Security transactions and investment income: Security transactions are recorded
on the trade date. Security gains and losses are calculated on the specific
identification basis. Dividend income is recorded on the ex-dividend date or,
in the case of foreign securities, as soon as the Fund is informed of the
ex-dividend date. Interest income, including accretion of discounts and
amortization of premiums, is recorded on the accrual basis commencing on the
settlement date.
Dividend distributions: Distributions to shareholders are recorded on the
ex-dividend date and are determined in accordance with Federal income tax
regulations which may differ from GAAP.
NOTE 2. RELATED PARTY TRANSACTIONS
AEGON/Transamerica Fund Advisers, Inc. ("ATFA") is the Fund's investment
adviser. AEGON/Transamerica Fund Services, Inc. ("ATFS") is the Fund's
administrator. AFSG Securities Corp. ("AFSG") is the Fund's
distributor/principal underwriter. AEGON/Transamerica Investor Services, Inc.
("ATIS") is the 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. AUSA and WRL are wholly owned indirect
subsidiaries of AEGON NV, a Netherlands corporation.
The following schedule reflects the percentage of fund assets owned by
affiliated mutual funds (ie: through the assets allocation funds)
Net % of
Assets Net Assets
----------- -----------
IDEX Asset Allocation
Conservative Portfolio $ 10,823 5%
IDEX Asset Allocation Growth 29,739 15%
IDEX Asset Allocation Moderate
Growth 46,022 22%
IDEX Asset Allocation Moderate 35,874 18%
----
60%
====
Investment advisory fees: The Fund pays management fees to ATFA based on
average daily net assets ("ANA") at the following stated break points:
0.90% of the first $200 million of ANA
0.85% of ANA over $200 million
ATFA currently voluntarily waives its advisory fee and will reimburse the Fund
to the extent that operating expenses, excluding 12b-1 fees, exceed the
following stated annual limit:
1.50% Expense Limit
If total fund expenses fall below the annual expense limitations agreed to by
the adviser within the succeeding three years, the Fund may be required to pay
the advisor a portion or all of the waived advisory fees.
Distribution and service fees: The Fund has a 12b-1 distribution plan under the
1940 Act pursuant to which an annual fee, based on average daily net assets, is
paid to the distributor for various disbursements such as broker-dealer account
servicing fees and other promotional expenses of the Fund. The 12b-1 fee for
the Fund is comprised of a 0.25% service fee and the remaining amount is an
asset-based sales charge/distribution fee. The Fund is authorized under the
12b-1 plan to pay fees on each class up to the following limits:
Class A 0.35%
Class B 1.00%
Class C 1.00%
Class L 1.00%
Class M 0.90%
Underwriter commissions relate to front-end sales charges imposed for Class A
and M shares and contingent deferred sales charges from Classes B, L, M and
certain A share redemptions. For the year ended October 31, 2003, the
underwriter commissions were as follows:
Received by Underwriter $ 125
Retained by Underwriter 11
Contingent Sales Charges 76
Administrative services: The Fund has entered into an agreement with ATFS for
financial and legal fund administration services, which include such items as
compliance, expenses, financial statements and other reporting, distributions,
tax returns, prospectus preparation, board of trustees meeting support and
other legal matters. Transfer agent fees are reflected separately from
Administration fees on the Statement of Operations. The Legal fees on the
Statement of Operations are for fees paid to external legal counsel. ATFS
provides its services to the Fund at cost and is reimbursed monthly.
Transfer agent fees: The Fund incurs ATIS annual per-account charges (not in
thousands) of $20.00 for each open shareholder account and $1.63 for each
closed account maintained, and certain out of pocket expenses.
Deferred compensation plan: Each eligible Fund Trustee may elect participation
in the Deferred Compensation Plan ("the Plan"). Under the Plan, such Trustees
may defer payment of a percentage of their total fees earned as a Fund Trustee.
These deferred amounts may be invested in any IDEX Fund. At October 31, 2003,
the value of invested plan amounts was $3. Invested plan amounts and the total
liability for deferred compensation to the Trustees under the Plan at October
31, 2003, are included in Net assets in the accompanying Statement of Assets
and Liabilities.
IDEX Mutual Funds Annual Report 2003
IDEX Isabelle Small Cap Value 9
IDEX Isabelle Small Cap Value
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 3. INVESTMENT TRANSACTIONS
The cost of securities purchased and proceeds from securities sold (excluding
short-term securities) for the year ended October 31, 2003, were as follows:
Purchases of securities:
Long-Term excluding U.S. Government $ 116,320
U.S. Government -
Proceeds from maturities and sales of securities:
Long-Term excluding U.S. Government 57,855
U.S. Government -
NOTE 4. FEDERAL INCOME TAX MATTERS
The Fund has not made any provision for federal income or excise taxes due to
its policy to distribute all of its taxable income and capital gains to its
shareholders and otherwise qualify as a regulated investment company under the
Internal Revenue Code. Income and capital gain distributions are determined in
accordance with income tax regulations, which may differ from GAAP. These
differences are primarily due to differing treatments for items including, but
not limited to, wash sales, net operating losses and capital loss
carryforwards.
Reclassifications between Undistributed net investment income (loss),
Undistributed net realized capital gains (loss) and Shares of beneficial
interest are made to reflect income and gains available for distribution under
federal tax regulations. Results of operations and net assets are not effected
by these reclassifications. These reclassifications are as follows:
Shares of beneficial interest, unlimited shares
authorized $(945)
Accumulated net investment income (loss) 1,435
Accumulated net realized gain (loss) from
investment securities (490)
The tax basis components of distributable earnings as of October 31, 2003, are
as follows:
Undistributed Ordinary Income $ -
========
Undistributed Long-term Capital Gains $ 805
========
Capital Loss Carryforward $ -
========
Net Unrealized Appreciation (Depreciation) $ 18,906
========
The capital loss carryforward utilized as of October 31, 2003 was $2,626.
The aggregate cost of investments and composition of unrealized appreciation
(depreciation) for federal income tax purposes as of October 31, 2003, are as
follows:
Federal Tax Cost Basis $ 175,850
=========
Unrealized Appreciation $ 29,651
Unrealized (Depreciation) (10,745)
---------
Net Unrealized Appreciation (Depreciation) $ 18,906
=========
Supplemental Tax Information
(unaudited)
For tax purposes, the Fund has made a Long-Term capital Gain Designation of
$0.04553 per share for the year ended October 31, 2003.
IDEX Mutual Funds Annual Report 2003
IDEX Isabelle Small Cap Value 10
- --------------------------------------------------------------------------------
Report of Independent Certified Public Accountants
To the Board of Trustees and Shareholders of
IDEX Isabelle Small Cap Value
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of IDEX Isabelle Small Cap Value (the
"Fund") (one of the portfolios constituting the IDEX Mutual Funds) at October
31, 2003, and the results of its operations, the changes in its net assets and
the financial highlights for each of the periods indicated, in conformity with
accounting principles generally accepted in the United States of America. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with auditing standards generally accepted in the United States of America,
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at October 31, 2003 by correspondence with the
custodian and brokers, provide a reasonable basis for our opinion.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Tampa, Florida
December 18, 2003
IDEX Mutual Funds Annual Report 2003
IDEX Isabelle Small Cap Value 11
IDEX Janus Balanced
- --------------------------------------------------------------------------------
MARKET ENVIRONMENT
For the first time since 2000, all three popular U.S. stock market indices
ended the fiscal year with gains. The Dow Jones Industrial Average added 19.50%
and the broad-based Standard and Poor's 500 Composite Stock Index ("S&P 500")
climbed 20.79%. More than doubling those returns, the technology-dominated
NASDAQ Composite Index surged 45.31% for the twelve months. Treasury yields
rose and fell with the headline news and the fortunes of the stock market.
The fiscal year got off to a good start with hopes of a pickup in corporate
profits and a resumption of capital expenditures in the new year. Although the
stock market rallied early in the fiscal year, the rebound was short-lived.
Despite the fact that mortgage interest rates fell to historic lows and the
housing market remained strong, a looming conflict with Iraq worried investors
and consumers alike. Rising unemployment, a persistent lack of new jobs and
soaring oil prices also were causes for concern. After hitting a trough in the
four months leading up to the war, however, both the market and consumer
confidence bounced back sharply when hostilities began in mid-March. Later,
signs that the manufacturing sector was emerging from a two-year slump and a
tax-cut-driven increase in consumer spending also helped to lift investors'
spirits. But the health of the economy still was in doubt as job losses
mounted. The Federal Reserve Board acknowledged the mixed picture, cutting its
benchmark federal funds rate to an over 40-year low of 1% in an attempt to spur
corporate investment and hiring. As the fiscal year came to a close, stocks
added to their 2003 gains. Feelings of cautious optimism, fueled by an
acceleration of quarterly earnings and a better-than-expected jump in economic
growth, prevailed despite weak job growth and questions about whether the
positive momentum could be sustained.
PERFORMANCE
For the year ended October 31, 2003, IDEX Janus Balanced returned 8.71%. By
comparison its primary benchmark, the S&P 500, returned 20.79% and its
secondary benchmark, the Lehman Brothers U.S. Government/Credit Index ("LB
Index"), returned 6.17%.
MANAGER'S OVERVIEW
Q. Which individual holdings had the greatest negative impact on the Fund's
performance?
Our investment in payroll and tax filing processor Automatic Data Processing,
Inc. proved to be one of the biggest detractors from our performance during the
last twelve months. Also negatively impacting the Fund were media conglomerate,
Time Warner Inc. (formerly AOL Time Warner Inc.) and El Paso Corporation, a
leading provider of natural gas services. Other disappointments included
insurance titan American International Group, Inc., and diversified
entertainment company, Viacom, Inc., which traded down during the period.
Q. Which holdings had the greatest positive impact on the Fund's performance?
The Fund's biggest positive contributor during the period was Internet portal,
Yahoo! Inc., which saw its stock price appreciate as earnings increased and
optimism for an economic rebound took hold. Another technology bellwether,
Texas Instruments Incorporated, also posted positive returns and contributed
greatly to the Fund's performance. Financial leader Citigroup Inc., saw its
shares trade significantly higher, as did Best Buy Co., Inc., the specialty
retailer. Rounding out our list of top-five performers over the past year was
Marriott International, Inc., the hotelier giant.
While the equity portion of the Fund made a much more significant contribution
to our absolute performance than the income portion did, we are pleased to note
that our fixed-income investments collectively outpaced the LB Index.
Q. Which sectors had the greatest impact on the Fund's performance?
While maintaining our bottom-up approach to building the portfolio one security
at a time, certain sectors did have a material impact on the Fund. For example,
the sector with the greatest positive impact on our absolute performance was
information technology. However, the Fund's underweight position in technology
compared to the S&P 500 was the primary reason we underperformed the S&P 500,
as this was a particularly strong-performing area of the market during the
period. Also contributing to this relative underperformance were weak results
posted by several of our holdings within the consumer discretionary and the
consumer staples sectors, although, on an absolute basis, these two groups
contributed positively to the Fund's results. Meanwhile, sectors that detracted
from our absolute results included telecommunications and utilities, two areas
to which we had only minimal exposure.
/s/ Karen L. Reidy
Karen L. Reidy
Fund Manager
Janus Capital Management, LLC
IDEX Mutual Funds Annual Report 2003
IDEX Janus Balanced 1
IDEX Janus Balanced
- --------------------------------------------------------------------------------
Comparison of change in value of $10,000 investment in Class A shares and its
comparative index.
Growth of $10,000
Inception of 12/2/94 through 10/31/03
Investment less sales charges - $9,452
[The following table was depicted as a mountain chart in the printed material.]
DATE Class A LBGC S&P 500
- -------------------- --------------- --------------- ---------------
12/2/1994 9,452 10,000 10,000
12/31/1994 9,441 10,066 10,148
3/31/1995 9,861 10,567 11,135
6/30/1995 10,415 11,253 12,197
9/30/1995 10,898 11,469 13,165
12/31/1995 11,820 12,003 13,957
3/31/1996 12,222 11,722 14,706
6/30/1996 12,617 11,777 15,365
9/30/1996 13,311 11,985 15,840
12/31/1996 13,782 12,351 17,160
3/31/1997 13,902 12,245 17,621
6/30/1997 15,342 12,690 20,694
9/30/1997 16,404 13,135 22,244
12/31/1997 16,700 13,556 22,882
3/31/1998 18,232 13,762 26,072
6/30/1998 19,155 14,122 26,933
9/30/1998 18,459 14,821 24,259
12/31/1998 21,839 14,841 29,421
3/31/1999 23,612 14,663 30,887
6/30/1999 24,267 14,503 33,063
9/30/1999 23,494 14,581 31,001
12/31/1999 26,982 14,522 35,612
3/31/2000 28,024 14,912 36,427
6/30/2000 27,101 15,129 35,462
9/30/2000 26,783 15,563 35,118
12/31/2000 26,069 16,243 32,372
3/31/2001 24,538 16,762 28,537
6/30/2001 24,941 16,813 30,206
9/30/2001 23,486 17,614 25,774
12/31/2001 24,545 17,624 28,528
3/31/2002 24,703 17,541 28,606
6/30/2002 23,656 18,199 24,776
9/30/2002 22,341 19,236 20,498
12/31/2002 22,777 19,569 22,225
3/31/2003 22,545 19,891 21,524
6/30/2003 24,134 20,592 24,837
9/30/2003 24,185 20,488 25,494
10/31/2003 24,853 20,229 26,936
Average Annual Total Return for Periods Ended 10/31/03
- --------------------------------------------------------------------------------
From Inception
1 year 5 years Inception Date
- -------------------------------------------------------------------
Class A (NAV) 8.71% 5.60% 11.45% 12/2/94
Class A (POP) 2.73% 4.41% 10.75% 12/2/94
S&P 500(1) 20.79% 0.53% 11.75% 12/2/94
LBGC(1) 6.17% 6.57% 8.22% 12/2/94
- -------------------------------------------------------------------
Class B (NAV) 7.84% 4.91% 10.02% 10/1/95
Class B (POP) 2.84% 4.74% 10.02% 10/1/95
- -------------------------------------------------------------------
Class C (NAV) 7.84% - -0.50% 11/1/99
- -------------------------------------------------------------------
Class L (NAV) - - 7.84% 11/11/02
Class L (POP) - - 5.84% 11/11/02
- -------------------------------------------------------------------
Class M (NAV) 7.95% 5.01% 10.84% 12/2/94
Class M (POP) 5.87% 4.80% 10.72% 12/2/94
- -------------------------------------------------------------------
NOTES
(1) The Standard & Poor's 500 Composite Stock (S&P 500) Index and Lehman
Brothers U.S. Government/Credit (LBGC) Index are unmanaged indices 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 Micropal(R)(C) 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 shares, (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.
Periods less than 1 year represent total return and are not annualized.
This material must be preceded or accompanied by a current prospectus, which
includes specific contents regarding the investment objectives and policies of
this fund.
IDEX Mutual Funds Annual Report 2003
IDEX Janus Balanced 2
IDEX Janus Balanced
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
At October 31, 2003
(all amounts except share amounts in thousands)
Principal Value
- --------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS (7.0%)
U.S. Treasury Bond
6.50%, due 05/15/2005 $ 1,060 $ 1,139
5.00%, due 08/15/2011 770 822
7.25%, due 05/15/2016 (b) 2,459 3,047
8.13%, due 08/15/2019 354 475
7.88%, due 02/15/2021 1,564 2,065
7.25%, due 08/15/2022 1,371 1,715
6.25%, due 08/15/2023 (b) 2,396 2,704
6.00%, due 02/15/2026 1,311 1,440
5.25%, due 02/15/2029 722 721
6.25%, due 05/15/2030 517 591
U.S. Treasury Note
4.63%, due 05/15/2006 (b) 2,020 2,144
3.50%, due 11/15/2006 (b) 2,140 2,209
2.63%, due 05/15/2008 905 887
5.63%, due 05/15/2008 2,080 2,302
6.00%, due 08/15/2009 (b) 2,088 2,361
5.75%, due 08/15/2010 (b) 750 839
---------
Total U.S. Government Obligations (cost: $24,921) 25,461
---------
U.S. GOVERNMENT AGENCY OBLIGATIONS (7.4%)
Fannie Mae
1.88%, due 12/15/2004 2,370 2,380
2.13%, due 04/15/2006 2,985 2,971
5.50%, due 05/02/2006 2,160 2,311
4.75%, due 01/02/2007 735 771
5.00%, due 01/15/2007 2,560 2,728
2.50%, due 06/15/2008 (b) 490 471
5.25%, due 01/15/2009 770 826
6.25%, due 02/01/2011 910 995
5.38%, due 11/15/2011 1,334 1,413
Federal Home Loan Bank
6.50%, due 11/15/2005 2,725 2,964
Freddie Mac
1.88%, due 01/15/2005 3,585 3,598
4.25%, due 06/15/2005 2,165 2,247
2.38%, due 04/15/2006 1,970 1,971
5.75%, due 04/15/2008 525 577
5.75%, due 03/15/2009 220 241
7.00%, due 03/15/2010 210 244
5.88%, due 03/21/2011 223 238
---------
Total U.S. Government Agency Obligations (cost: $26,279) 26,946
---------
CORPORATE DEBT SECURITIES (26.0%)
Aerospace (1.1%)
Honeywell International Inc.
5.13%, due 11/01/2006 1,210 1,298
Lockheed Martin Corporation
8.20%, due 12/01/2009 750 906
7.65%, due 05/01/2016 1,525 1,836
Amusement & Recreation Services (0.6%)
Disney (Walt) Company (The)
4.88%, due 07/02/2004 1,455 1,486
Amusement & Recreation Services (continued)
Mandalay Resort Group-144A
6.50%, due 07/31/2009 $ 585 $ 603
Automotive (0.6%)
Honeywell International Inc.
6.13%, due 11/01/2011 660 721
Tenneco Automotive Inc. (b)
11.63%, due 10/15/2009 1,500 1,556
Beer, Wine & Distilled Beverages (0.3%)
Miller Brewing Company-144A
4.25%, due 08/15/2008 555 560
5.50%, due 08/15/2013 425 434
Beverages (2.9%)
Anheuser-Busch Companies, Inc
5.65%, due 09/15/2008 2,030 2,205
5.75%, due 04/01/2010 600 656
6.00%, due 04/15/2011 1,095 1,207
7.55%, due 10/01/2030 480 588
6.80%, due 01/15/2031 325 367
6.80%, due 08/20/2032 700 789
Coca Cola Enterprises Inc.
5.38%, due 08/15/2006 950 1,022
4.38%, due 09/15/2009 935 950
7.13%, due 09/30/2009 895 1,037
6.13%, due 08/15/2011 950 1,042
Pepsi Bottling Group, Inc. (The)
5.63%, due 02/17/2009 480 521
Business Services (0.4%)
Clear Channel Communications, Inc.
6.00%, due 11/01/2006 555 599
4.63%, due 01/15/2008 545 561
Hanover Equipment Trust 2001A (d)
8.50%, due 09/01/2008 295 302
Chemicals & Allied Products (0.4%)
International Flavors & Fragrances Inc.
6.45%, due 05/15/2006 1,150 1,255
Nalco Company-144A
7.75%, due 11/15/2011 185 192
Commercial Banks (0.8%)
Citigroup Inc.
7.25%, due 10/01/2010 820 954
6.63%, due 06/15/2032 740 801
Firstar Bank, NA
7.13%, due 12/01/2009 280 326
US Bank NA
5.70%, due 12/15/2008 805 873
Communication (1.9%)
Comcast Cable Communications, Inc.
6.38%, due 01/30/2006 75 81
6.75%, due 01/30/2011 1,490 1,649
7.13%, due 06/15/2013 380 426
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Janus Balanced 3
IDEX Janus Balanced
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Principal Value
- ------------------------------------------------------------------------------------
Communication (continued)
Comcast Corporation
5.85%, due 01/15/2010 $ 200 $ 212
6.50%, due 01/15/2015 220 236
7.05%, due 03/15/2033 765 815
Cox Communications, Inc.
7.50%, due 08/15/2004 375 390
7.13%, due 10/01/2012 385 437
Echostar DBS Corporation
9.38%, due 02/01/2009 955 1,010
Echostar DBS Corporation-144A
5.75%, due 10/01/2008 755 752
TCI Communications, Inc.
8.65%, due 09/15/2004 145 153
6.88%, due 02/15/2006 700 761
Computer & Office Equipment (0.6%)
Apple Computer, Inc.
6.50%, due 02/15/2004 975 986
Hewlett-Packard Company
3.63%, due 03/15/2008 780 778
Sun Microsystems, Inc.
7.35%, due 08/15/2004 460 478
Drug Stores & Proprietary Stores (0.2%)
Medco Health Solutions, Inc. (b)
7.25%, due 08/15/2013 770 819
Electric Services (0.8%)
Dominion Resources, Inc.
2.80%, due 02/15/2005 490 495
4.13%, due 02/15/2008 320 325
Duke Energy Corporation
6.25%, due 01/15/2012 305 327
Illinova Corporation
11.50%, due 12/15/2010 865 1,034
MidAmerican Energy Holdings Company
3.50%, due 05/15/2008 860 836
Electric, Gas & Sanitary Services (0.4%)
CMS Energy Corporation
9.88%, due 10/15/2007 785 858
7.50%, due 01/15/2009 585 595
Electronic Components & Accessories (1.1%)
Tyco International Group SA
5.88%, due 11/01/2004 885 913
6.38%, due 02/15/2006 1,795 1,900
6.38%, due 10/15/2011 1,100 1,144
Environmental Services (0.2%)
Allied Waste North America, Inc. (b)
10.00%, due 08/01/2009 575 625
USA Waste Services, Inc.
7.00%, due 10/01/2004 200 208
Food & Kindred Products (1.1%)
Dean Foods Company
6.75%, due 06/15/2005 $ 230 $ 239
6.63%, due 05/15/2009 774 813
6.90%, due 10/15/2017 158 163
General Mills, Inc.
5.13%, due 02/15/2007 970 1,033
6.00%, due 02/15/2012 640 684
Kellogg Company
2.88%, due 06/01/2008 525 505
7.45%, due 04/01/2031 580 684
Furniture & Fixtures (0.5%)
Lear Corporation
7.96%, due 05/15/2005 1,550 1,666
Gas Production & Distribution (0.7%)
Coastal Corporation (The) (b)
6.20%, due 05/15/2004 591 590
El Paso Corporation (b)
7.00%, due 05/15/2011 1,480 1,247
Sonat Inc. (b)
6.88%, due 06/01/2005 590 572
Holding & Other Investment Offices (0.1%)
Gemstone Investments Ltd.-144A
7.71%, due 10/31/2004 285 285
Hotels & Other Lodging Places (0.7%)
HMH Properties, Inc.
7.88%, due 08/01/2005 394 405
John Q. Hammons Hotels, Inc.-Series B
8.88%, due 05/15/2012 315 343
Starwood Hotels & Resorts Worldwide, Inc.
6.75%, due 11/15/2005 455 480
7.38%, due 05/01/2007 (d) 820 884
7.88%, due 05/01/2012 (d) 445 492
Industrial Machinery & Equipment (0.4%)
Black & Decker Corporation (The)
7.13%, due 06/01/2011 925 1,059
SPX Corporation
7.50%, due 01/01/2013 470 502
Insurance (0.1%)
UnitedHealth Group Incorporated
5.20%, due 01/17/2007 320 342
Insurance Agents, Brokers & Service (0.2%)
Marsh & McLennan Companies, Inc.
5.38%, due 03/15/2007 670 725
Life Insurance (0.3%)
AIG SunAmer Global Financing IX-144A
5.10%, due 01/17/2007 985 1,056
Lumber & Other Building Materials (0.5%)
Home Depot, Inc. (The)
6.50%, due 09/15/2004 1,698 1,772
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Janus Balanced 4
IDEX Janus Balanced
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Principal Value
- ------------------------------------------------------------------------------------
Metal Cans & Shipping Containers (0.3%)
Ball Corporation
6.88%, due 12/15/2012 $ 1,075 $ 1,121
Motion Pictures (1.8%)
Time Warner Inc.
5.63%, due 05/01/2005 1,580 1,658
6.15%, due 05/01/2007 1,400 1,522
9.15%, due 02/01/2023 1,550 1,934
7.70%, due 05/01/2032 1,140 1,288
Oil & Gas Extraction (0.2%)
Burlington Resources Finance Company
7.20%, due 08/15/2031 515 588
Personal Credit Institutions (2.0%)
American General Finance Corporation
5.88%, due 07/14/2006 965 1,042
General Electric Capital Corporation
5.38%, due 04/23/2004 (b) 719 733
4.25%, due 01/28/2005 700 722
2.85%, due 01/30/2006 940 951
5.35%, due 03/30/2006 1,570 1,675
6.75%, due 03/15/2032 760 843
General Motors Acceptance Corporation
5.36%, due 07/27/2004 820 839
5.25%, due 05/16/2005 575 592
Petroleum Refining (0.1%)
Conoco Inc.
6.95%, due 04/15/2029 455 510
Pharmaceuticals (0.1%)
Pfizer Inc.
6.00%, due 01/15/2008 265 293
Radio & Television Broadcasting (0.3%)
British Sky Broadcasting Group PLC
6.88%, due 02/23/2009 935 1,031
Rubber & Misc. Plastic Products (0.6%)
Sealed Air Corporation-144A
8.75%, due 07/01/2008 795 936
5.63%, due 07/15/2013 820 826
6.88%, due 07/15/2033 420 433
Security & Commodity Brokers (0.6%)
American Express Company
4.88%, due 07/15/2013 735 732
Salomon Smith Barney Holdings Inc.
6.50%, due 02/15/2008 565 628
Schwab (Charles) Corporation (The)
8.05%, due 03/01/2010 800 926
Stone, Clay & Glass Products (0.3%)
Owens-Illinois, Inc.
7.15%, due 05/15/2005 922 945
Telecommunications (1.9%)
AT&T Broadband, LLC
7.88%, due 08/01/2013 340 398
Telecommunications (continued)
AT&T Wireless Services, Inc.
7.35%, due 03/01/2006 $ 759 $ 833
7.50%, due 05/01/2007 577 647
Deutsche Telekom International Finance BV
3.88%, due 07/22/2008 925 922
Nextel Communications, Inc.
7.38%, due 08/01/2015 1,000 1,040
Verizon Global Funding Corp.
6.13%, due 06/15/2007 1,020 1,115
4.00%, due 01/15/2008 1,275 1,291
Verizon Maryland Inc.
5.13%, due 12/15/2033 560 476
Textile Mill Products (0.1%)
Mohawk Industries, Inc.
7.20%, due 04/15/2012 285 316
Variety Stores (0.8%)
Target Corporation
5.50%, due 04/01/2007 435 471
Wal-Mart Stores, Inc.
5.45%, due 08/01/2006 1,125 1,211
6.88%, due 08/10/2009 1,125 1,291
----------
Total Corporate Debt Securities (cost: $89,746)
94,210
----------
CONVERTIBLE BONDS (0.2%)
Electronic Components & Accessories (0.2%)
LSI Logic Corporation (b)
4.00%, due 02/15/2005 840 836
----------
Total Convertible Bonds (cost: $826) 836
----------
Shares Value
- -------------------------------------------------------------------------
COMMON STOCKS (55.9%)
Aerospace (0.3%)
Lockheed Martin Corporation 22,980 $ 1,065
Air Transportation (0.9%)
FedEx Corporation 25,085 1,900
Southwest Airlines Co. (b) 69,225 1,343
Automotive (1.0%)
Bayerische Motoren Werke AG (BMW) 26,996 1,084
Honeywell International Inc. 80,555 2,466
Beer, Wine & Distilled Beverages (1.1%)
LVMH Moet Hennessy Louis Vuitton SA 58,601 4,054
Beverages (1.7%)
Anheuser-Busch Companies, Inc. 78,235 3,854
PepsiCo, Inc. 49,170 2,351
Business Services (0.4%)
eBay Inc. (a) 23,840 1,334
Chemicals & Allied Products (2.7%)
Avon Products, Inc. (b) 9,105 619
International Flavors & Fragrances Inc. 30,455 1,008
Procter & Gamble Company (The) 50,635 4,977
Reckitt Benckiser PLC 148,901 3,133
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Janus Balanced 5
IDEX Janus Balanced
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Shares Value
- ------------------------------------------------------------------------------------
Commercial Banks (3.9%)
Bank of America Corporation 32,605 $ 2,469
Citigroup Inc. 165,237 7,832
HSBC Holdings PLC 76,581 1,150
U.S. Bancorp 91,871 2,501
Communication (1.9%)
Comcast Corporation-Class A (a)(b) 40,053 1,359
Comcast Corporation-Special Class A (a) 40,764 1,330
Liberty Media Corporation-Class A (a) 142,065 1,433
Viacom, Inc.-Class B 68,263 2,722
Communications Equipment (0.5%)
Nokia Oyj-ADR 99,270 1,687
Computer & Data Processing Services (3.3%)
Microsoft Corporation 162,125 4,241
Oracle Corporation (a) 159,940 1,913
VERITAS Software Corporation (a) 38,330 1,386
Yahoo! Inc. (a) 98,245 4,294
Computer & Office Equipment (3.2%)
Cisco Systems, Inc. (a) 116,800 2,450
Dell Computer Corporation (a) 97,865 3,535
International Business Machines
Corporation 41,790 3,739
Lexmark International Group, Inc. (a) 23,995 1,766
Department Stores (0.5%)
J.C. Penney Company, Inc. 70,590 1,669
Drug Stores & Proprietary Stores (0.7%)
Medco Health Solutions, Inc. (a) 75,669 2,512
Electric Services (0.5%)
EnCana Corporation (CAD) 10,038 345
EnCana Corporation (USD) (b) 46,375 1,594
Electronic & Other Electric Equipment (2.3%)
General Electric Company 138,465 4,017
Samsung Electronics Co.,
Ltd.-GDR-144A (USD) (b) 21,850 4,371
Electronic Components & Accessories (5.0%)
Intel Corporation 105,430 3,484
Linear Technology Corporation 38,310 1,632
Maxim Integrated Products 38,245 1,901
Texas Instruments Incorporated 156,725 4,532
Tyco International Ltd. (b) 322,105 6,726
Environmental Services (1.0%)
Waste Management, Inc. 146,020 3,785
Food & Kindred Products (0.3%)
Kellogg Company 32,310 1,070
Gas Production & Distribution (0.3%)
El Paso Corporation (b) 126,785 931
Health Services (0.5%)
Caremark Rx, Inc. (a)(b) 69,855 1,750
Hotels & Other Lodging Places (2.6%)
Fairmont Hotels & Resorts Inc. 34,616 $ 891
Marriott International, Inc.-Class A 113,780 4,915
Starwood Hotels & Resorts Worldwide, Inc. 111,705 3,768
Insurance (1.5%)
Aetna Inc. 34,935 2,006
Berkshire Hathaway Inc.-Class B (a) 1,285 3,338
Manufacturing Industries (0.4%)
Mattel, Inc. 67,185 1,301
Medical Instruments & Supplies (0.7%)
Medtronic, Inc. 52,920 2,412
Motion Pictures (1.8%)
Fox Entertainment Group, Inc.-Class A (a) 55,505 1,537
Time Warner Inc. (a) 324,330 4,959
Oil & Gas Extraction (1.4%)
Apache Corporation 16,511 1,151
Total Fina Elf SA 25,147 3,912
Paper & Allied Products (1.6%)
3M Company 72,680 5,732
Petroleum Refining (1.1%)
Exxon Mobil Corporation 105,895 3,874
Pharmaceuticals (3.4%)
Barr Laboratories, Inc. (a)(b) 38,745 2,974
Forest Laboratories, Inc. (a) 15,925 796
Pfizer Inc. 111,355 3,519
Roche Holding AG 61,624 5,105
Printing & Publishing (2.0%)
Dow Jones & Company, Inc. 35,625 1,851
Gannett Co., Inc. 63,085 5,306
Radio, Television & Computer Stores (1.1%)
Best Buy Co., Inc. (a) 70,880 4,134
Railroads (0.9%)
Canadian National Railway Company 54,780 3,298
Retail Trade (0.4%)
Amazon.com, Inc. (a)(b) 27,100 1,475
Security & Commodity Brokers (1.2%)
American Express Company 54,470 2,556
Goldman Sachs Group, Inc. (The) (b) 19,980 1,876
Telecommunications (0.5%)
Deutsche Telekom AG (a)(b) 106,604 1,681
Textile Mill Products (0.5%)
Mohawk Industries, Inc. (a)(b) 25,810 1,913
Transportation Equipment (0.4%)
General Dynamics Corporation 18,640 1,560
U.S. Government Agencies (0.9%)
Freddie Mac 58,430 3,280
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Janus Balanced 6
IDEX Janus Balanced
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Shares Value
- ----------------------------------------------------------------
Variety Stores (1.5%)
Wal-Mart Stores, Inc. 90,110 $ 5,312
----------
Total Common Stocks (cost: $178,719) 201,746
----------
Principal Value
- --------------------------------------------------------------------------------
SECURITY LENDING COLLATERAL (13.1%)
Debt (11.5%)
Bank Notes (1.4%)
Canadian Imperial Bank of Commerce
1.12%, due 11/04/2003 $ 2,067 $ 2,067
Fleet National Bank
1.06%, due 01/21/2004 2,892 2,892
Euro Dollar Terms (6.4%)
Bank of Montreal
1.03%, due 11/13/2003 1,653 1,653
1.04%, due 11/14/2003 1,452 1,452
Bank of Nova Scotia (The)
1.06%, due 11/12/2003 827 827
Bank of Scotland
1.04%, due 11/14/2003 1,653 1,653
Citigroup Inc.
1.08%, due 01/05/2004 2,480 2,480
Credit Agricole Indosuez
1.08%, due 01/06/2004 1,819 1,819
Den Danske Bank
1.04%, due 11/10/2003 827 827
1.08%, due 01/20/2004 2,480 2,480
Royal Bank of Canada
1.04%, due 11/24/2003 2,067 2,067
1.06%, due 12/08/2003 827 827
Royal Bank of Scotland Group PLC (The)
1.08%, due 01/15/2004 2,480 2,480
SouthTrust Bank
1.08%, due 01/16/2004 2,480 2,480
Wells Fargo & Company
1.04%, due 11/20/2003 2,480 2,480
Promissory Notes (0.8%)
Goldman Sachs Group, Inc. (The)
1.15%, due 11/03/2003 $ 2,892 $ 2,892
Repurchase Agreements (2.9%) (c)
Goldman Sachs Group, Inc. (The)
1.10% Repurchase Agreement dated
10/31/2003 to be repurchased at $827
on 11/03/2003 827 827
Merrill Lynch & Co., Inc.
1.10% Repurchase Agreement dated
10/31/2003 to be repurchased at $9,506
on 11/03/2003 9,505 9,505
Shares Value
- ---------------------------------------------------------------------------------------
Investment Companies (1.6%)
Money Market Funds (1.6%)
Merrimac Cash Series Fund-Premium
Class 1-day yield of 0.97% 5,786,263 $ 5,786
---------
Total Security Lending Collateral (cost: $47,494) 47,494
---------
Total Investment Securities (cost: $367,985) $ 396,693
=========
SUMMARY:
Investments, at value 109.6% $ 396,693
Liabilities in excess of other assets (9.6)% (34,867)
--------- ---------
Net assets 100.0% $ 361,826
========= =========
FORWARD FOREIGN CURRENCY CONTRACTS:
- ------------------------------------------------------------------------------
Net
Amount in Unrealized
Bought Settlement U.S. Dollars Appreciation
Currency (Sold) Date Bought (Sold) (Depreciation)
- ------------------------------------------------------------------------------
British Pound (450) 03/26/2004 $ (746) $ (9)
British Pound (500) 04/16/2004 (822) (16)
Canadian Dollar (68) 11/04/2003 (51) --
Canadian Dollar (600) 04/16/2004 (449) (3)
Canadian Dollar 325 04/16/2004 246 (1)
Euro Dollar (5,400) 03/26/2004 (6,163) (96)
Korean Won (1,175,000) 11/12/2003 (988) (4)
--------- ------
$ (8,973) $ (129)
========= ======
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 (see Note
1). The value at October 31, 2003, of all securities on loan is $46,008.
(c) Cash collateral for the Repurchase Agreements, valued at $10,539, 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.
(d) Floating or variable rate note. Rate is listed as of October 31, 2003.
DEFINITIONS:
ADR American 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 financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Janus Balanced 7
IDEX Janus Balanced
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
At October 31, 2003
(all amounts except per share amounts in thousands)
Assets:
Investment securities, at market value (cost: $367,985)
(including $46,008 of securities loaned) $ 396,693
Cash 11,741
Receivables:
Investment securities sold 864
Shares of beneficial interest sold 105
Interest 2,327
Dividends 171
Dividend reclaims receivable 11
Other 67
---------
411,979
---------
Liabilities:
Investment securities purchased 540
Accounts payable and accrued liabilities:
Shares of beneficial interest, unlimited shares
authorized 1,093
Management and advisory fees 308
Distribution fees 258
Transfer agent fees 162
Payable for securities on loan 47,494
Unrealized depreciation on forward foreign currency
contracts 129
Other 169
---------
50,153
---------
Net Assets $ 361,826
=========
Net Assets Consists of:
Shares of beneficial interest, unlimited shares authorized $ 406,239
Undistributed net investment income (loss) 248
Accumulated net realized gain (loss) from investment
securities and foreign currency transactions (73,233)
Net unrealized appreciation (depreciation) on:
Investment securities 28,702
Translation of assets and liabilities denominated in
foreign currencies (130)
---------
Net Assets $ 361,826
=========
Shares Outstanding:
Class A 5,126
Class B 11,474
Class C 1,702
Class L 250
Class M 2,247
Net Asset Value Per Share:
Class A $ 17.43
Class B 17.39
Class C 17.39
Class L 17.39
Class M 17.39
Maximum Offering Price Per Share (a):
Class A $ 18.44
Class M 17.57
(a) 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.
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the year ended October 31, 2003
(all amounts in thousands)
Investment Income:
Interest $ 8,127
Dividends 2,883
Income from loaned securities-net 69
Less withholding taxes on foreign dividends (57)
--------
11,022
--------
Expenses:
Management and advisory fees 3,689
Transfer agent fees 1,130
Printing and shareholder reports 183
Custody fees 80
Administration fees 40
Legal fees 25
Auditing and accounting fees 29
Trustees fees 30
Registration fees 82
Other 21
Distribution and service fees:
Class A 338
Class B 2,080
Class C 342
Class L 25
Class M 401
--------
Total expenses 8,495
--------
Net Investment Income (Loss) 2,527
--------
Net Realized Gain (Loss) from:
Investment securities (7,710)
Foreign currency transactions (1,229)
--------
(8,939)
--------
Net Increase (Decrease) in Unrealized Appreciation
(Depreciation) on:
Investment securities 35,452
Translation of assets and liabilities denominated in
foreign currencies (126)
--------
35,326
--------
Net Gain (Loss) on Investment Securities and Foreign
Currency Transactions 26,387
--------
Net Increase (Decrease) in Net Assets Resulting
from Operations $ 28,914
========
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Janus Balanced 8
IDEX Janus Balanced
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended
(all amounts in thousands)
October 31, October 31,
2003 2002
----------- -----------
Increase (Decrease) In Net Assets From:
Operations:
Net investment income (loss) $ 2,527 $ 5,471
Net realized gain (loss) from investment
securities and foreign currency
transactions (8,939) (38,492)
Net unrealized appreciation
(depreciation) on investment
securities 35,326 8,445
--------- ---------
28,914 (24,576)
--------- ---------
Distributions to Shareholders:
From net investment income:
Class A (1,174) (1,905)
Class B (1,199) (2,364)
Class C (199) (444)
Class L (12) -
Class M (304) (639)
--------- ---------
(2,888) (5,352)
--------- ---------
From net realized gains:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
--------- ---------
- -
--------- ---------
Capital Share Transactions:
Proceeds from shares sold:
Class A 15,212 23,874
Class B 28,872 55,027
Class C 4,135 12,548
Class L 4,995 -
Class M 2,623 9,351
--------- ---------
55,837 100,800
--------- ---------
Dividends and distributions reinvested:
Class A 1,117 1,812
Class B 1,103 2,199
Class C 179 405
Class L 12 -
Class M 280 591
--------- ---------
2,691 5,007
--------- ---------
Cost of shares redeemed:
Class A (34,649) (43,731)
Class B (58,425) (70,703)
Class C (16,577) (17,781)
Class L (904) -
Class M (17,165) (20,468)
--------- ---------
(127,720) (152,683)
--------- ---------
(69,192) (46,876)
--------- ---------
Net increase (decrease) in net assets (43,166) (76,804)
--------- ---------
Net Assets:
Beginning of year 404,992 481,796
--------- ---------
End of year $ 361,826 $ 404,992
========= =========
Undistributed Net Investment Income (Loss) $ 248 $ 541
========= =========
Share Activity:
Shares issued:
Class A 930 1,398
Class B 1,754 3,210
Class C 253 729
Class L 303 -
Class M 160 547
--------- ---------
3,400 5,884
--------- ---------
Shares issued-reinvested from
distributions:
Class A 68 106
Class B 68 128
Class C 11 24
Class L 1 -
Class M 17 34
--------- ---------
165 292
--------- ---------
Shares redeemed:
Class A (2,091) (2,585)
Class B (3,545) (4,211)
Class C (1,006) (1,049)
Class L (54) -
Class M (1,038) (1,210)
--------- ---------
(7,734) (9,055)
--------- ---------
Net increase (decrease) in shares
outstanding (4,169) (2,879)
========= =========
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Janus Balanced 9
IDEX Janus Balanced
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share of beneficial interest outstanding throughout each period
-----------------------------------------------------------------------------------------------------------
Investment Operations Distributions
-------------------------------------------- -------------------------------------
Net Asset Net Asset
For the Value, Net Net Realized From Net From Net Value,
Period Beginning Investment and Unrealized Total Investment Realized Total End
Ended (d)(g) of Period Income (Loss) Gain (Loss) Operations Income Gains Distributions of Period
- ------------------------------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 $ 16.23 $ 0.19 $ 1.21 $ 1.40 $ (0.20) $ - $ (0.20) $ 17.43
10/31/2002 17.31 0.29 (1.09) (0.80) (0.28) - (0.28) 16.23
10/31/2001 19.75 0.37 (2.18) (1.81) (0.35) (0.28) (0.63) 17.31
10/31/2000 18.96 0.25 1.03 1.28 (0.24) (0.25) (0.49) 19.75
10/31/1999 14.75 0.19 4.27 4.46 (0.17) (0.08) (0.25) 18.96
- ------------------------------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 16.22 0.08 1.18 1.26 (0.09) - (0.09) 17.39
10/31/2002 17.30 0.18 (1.09) (0.91) (0.17) - (0.17) 16.22
10/31/2001 19.73 0.25 (2.17) (1.92) (0.23) (0.28) (0.51) 17.30
10/31/2000 18.95 0.21 1.03 1.24 (0.21) (0.25) (0.46) 19.73
10/31/1999 14.74 0.08 4.27 4.35 (0.06) (0.08) (0.14) 18.95
- ------------------------------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 16.22 0.08 1.18 1.26 (0.09) - (0.09) 17.39
10/31/2002 17.30 0.18 (1.09) (0.91) (0.17) - (0.17) 16.22
10/31/2001 19.73 0.26 (2.18) (1.92) (0.23) (0.28) (0.51) 17.30
10/31/2000 18.95 0.21 1.03 1.24 (0.21) (0.25) (0.46) 19.73
- ------------------------------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 16.22 0.08 1.18 1.26 (0.09) - (0.09) 17.39
- ------------------------------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 16.22 0.10 1.18 1.28 (0.11) - (0.11) 17.39
10/31/2002 17.30 0.19 (1.09) (0.90) (0.18) - (0.18) 16.22
10/31/2001 19.73 0.28 (2.18) (1.90) (0.25) (0.28) (0.53) 17.30
10/31/2000 18.95 0.23 1.03 1.26 (0.23) (0.25) (0.48) 19.73
10/31/1999 14.74 0.10 4.27 4.37 (0.08) (0.08) (0.16) 18.95
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
-----------------------------------------------------------------------
Ratio of Expenses
Net Assets, to Average Net Investment
For the End of Net Assets (a) Income (Loss) Portfolio
Period Total Period ----------------------- to Average Turnover
Ended (g) Return (c) (000's) Net (e) Total (f) Net Assets (a) Rate (b)
- ---------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 8.71% $ 89,335 1.73% 1.73% 1.13% 69%
10/31/2002 (4.72) 100,923 1.68 1.70 1.70 87
10/31/2001 (9.35) 126,369 1.64 1.66 1.96 114
10/31/2000 7.23 133,445 1.67 1.69 1.73 71
10/31/1999 30.43 67,749 1.81 1.82 1.28 60
- ---------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 7.84 199,472 2.37 2.37 0.48 69
10/31/2002 (5.31) 214,019 2.33 2.35 1.05 87
10/31/2001 (9.93) 243,387 2.29 2.31 1.31 114
10/31/2000 6.58 229,160 2.32 2.34 1.08 71
10/31/1999 29.64 92,833 2.46 2.47 0.63 60
- ---------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 7.84 29,591 2.37 2.37 0.48 69
10/31/2002 (5.31) 39,636 2.33 2.35 1.05 87
10/31/2001 (9.93) 47,399 2.29 2.31 1.31 114
10/31/2000 6.58 42,447 2.32 2.34 1.08 71
- ---------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 7.84 4,354 2.38 2.39 0.48 69
- ---------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 7.95 39,074 2.27 2.27 0.58 69
10/31/2002 (5.23) 50,414 2.23 2.25 1.15 87
10/31/2001 (9.84) 64,641 2.19 2.21 1.41 114
10/31/2000 6.68 66,249 2.22 2.24 1.18 71
10/31/1999 29.76 34,122 2.36 2.37 0.73 60
- ---------------------------------------------------------------------------------------------------------------
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Janus Balanced 10
IDEX Janus Balanced
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (continued)
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 are not annualized.
(d) Per share information is calculated based on average number of shares
outstanding for the periods ended 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 (see note 2).
(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 Fund's offering of share classes C and L are as
follows:
Class C - November 1, 1999
Class L - November 11, 2002
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Janus Balanced 11
IDEX Janus Balanced
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
At October 31, 2003
(all amounts in thousands)
NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
IDEX Mutual Funds is a Massachusetts business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company. IDEX Janus Balanced ("the Fund"), part of IDEX
Mutual Funds, began operations on December 2, 1994.
In the normal course of business the Fund enters into contracts that contain a
variety of representations and warranties and which provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown, as this would involve future claims that may be made against the Fund
and/or its affiliates that have not yet occurred. However, based on experience,
the Fund expects the risk of loss to be remote.
See the Prospectus and Statement of Additional Information for a description of
the Fund's investment objective.
In preparing the Fund's financial statements in accordance with accounting
principles generally accepted in the United States of America ("GAAP"),
estimates or assumptions (which could differ from actual results) may be used
that affect reported amounts and disclosures. The following policies were
consistently followed by the Fund, in accordance with GAAP.
Multiple class operations and expenses: The Fund currently offers five classes
of shares, each with a public offering price that reflects different sales
charges, if any, and expense levels. Effective November 11, 2002, Class C and M
shares were closed to new investors. Income, non-class specific expenses and
realized and unrealized gains and losses, are allocated daily to each class,
based upon the value of shares outstanding method as permitted under Rule 18f-3
of the 1940 Act. Each class bears its own specific expenses as well as a
portion of general, common expenses.
Security valuations: Fund investments traded on an exchange are valued at the
closing price on the day of valuation on the exchange where the security is
principally traded. With respect to securities traded on the NASDAQ INMS, such
closing price may be the last reported sales price or the NASDAQ Official
Closing Price.
Securities traded in the over-the-counter market and listed securities for
which no sale was reported on that date are valued at the last quoted bid
price.
Debt securities are valued by independent pricing services; however, those that
mature in sixty days or less are valued at amortized cost, which approximates
market.
Other securities for which quotations are not readily available are valued at
fair value determined in good faith, in accordance with procedures established
by and, under the supervision of the Board of Trustees and the Fund's Valuation
Committee.
Cash: The Fund may leave cash overnight in its cash account with the custodian,
Investors Bank & Trust Company ("IBT"). IBT has been contracted on behalf of
the Fund to invest the excess cash into a savings account, which at October 31,
2003, was paying an interest rate of 0.75%.
Directed brokerage: The sub-adviser, to the extent consistent with the best
execution and usual commission rate policies and practices, may place security
transactions of the Fund with broker/dealers with which IDEX Mutual Funds has
established a Directed Brokerage Program. A Directed Brokerage Program is any
arrangement under which a broker/dealer applies a portion of the commissions
received by such broker/dealer on the security transactions to the Fund. In no
event will commissions paid by the Fund be used to pay expenses that would
otherwise be borne by any other funds within IDEX Mutual Funds, or by any other
party. Directed commissions during the year ended October 31, 2003, of $18 are
included in net realized gains in the Statement of Operations.
Securities lending: The Fund may lend securities to enhance fund earnings from
investing cash collateral received in making such loans to qualified borrowers
(typically broker/dealers). The Fund has engaged its custodian bank, IBT, as a
lending agent to administer its securities lending program. IBT earned $22 of
program net income for its services. When the Fund makes a security loan, it
receives cash collateral as protection against risk that the borrower will
default on the loan, and records an asset for the cash invested collateral and
a liability for the return of the collateral.
Securities on loan are included in Investment securities at value on the
Statement of Assets and Liabilities and remain on the Schedule of Investments.
Loans of securities are required to be secured by collateral at least equal to
102% of the value of the securities at inception of the loan, and not less then
100% thereafter. The Fund may invest cash collateral in short-term money market
instruments including: U.S. Treasury Bills, U.S. agency obligations, commercial
paper, money market mutual funds, repurchase agreements and other highly rated,
liquid investments. During the life of securities loans, the collateral and
securities loaned remain subject to fluctuation in value. IBT marks to market
securities loaned and the collateral each business day. If additional
collateral is due (at least $1), IBT collects additional cash collateral from
the borrowers. Although securities loaned will be fully collateralized at all
times, IBT may experience delays in, or may be prevented from, recovering the
collateral on behalf of the Fund. The Fund may recall a loaned security
position at any time from the borrower through IBT. In the event the borrower
fails to timely return a recalled security, IBT may indemnify the Fund by
purchasing replacement securities for the Fund at its own expense and claiming
the collateral to fund such a purchase. IBT absorbs the loss if the collateral
value is not sufficient to cover the cost of the replacement securities. If
replacement securities are not available, IBT will credit the equivalent cash
value to the Fund.
Income from securities lending is included in the Statement of Operations. The
amounts of collateral and value of securities on loan are
IDEX Mutual Funds Annual Report 2003
IDEX Janus Balanced 12
IDEX Janus Balanced
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 1-(continued)
included in the Statement of Assets and Liabilities as well as on the Schedule
of Investments.
Security transactions and investment income: Security transactions are recorded
on the trade date. Security gains and losses are calculated on the specific
identification basis. Dividend income is recorded on the ex-dividend date or,
in the case of foreign securities, as soon as the Fund is informed of the
ex-dividend date. Interest income, including accretion of discounts and
amortization of premiums, is recorded on the accrual basis commencing on the
settlement date.
Forward foreign currency contracts: The Fund may enter into forward foreign
currency contracts to hedge against exchange rate risk arising from investments
in securities denominated in foreign currencies. Contracts are valued at the
contractual forward rate and are marked to market daily, with the change in
value recorded as an unrealized gain or loss. When the contracts are closed a
realized gain or loss is incurred. Risks may arise from changes in value of the
underlying currencies and from the possible inability of counterparties to meet
the terms of their contracts. Open forward currency contracts at October 31,
2003, are listed in the Schedule of Investments.
Dividend distributions: Distributions to shareholders are recorded on the
ex-dividend date and are determined in accordance with Federal income tax
regulations which may differ from GAAP.
NOTE 2. RELATED PARTY TRANSACTIONS
AEGON/Transamerica Fund Advisers, Inc. ("ATFA") is the Fund's investment
adviser. AEGON/Transamerica Fund Services, Inc. ("ATFS") is the Fund's
administrator. AFSG Securities Corp. ("AFSG") is the Fund's
distributor/principal underwriter. AEGON/Transamerica Investor Services, Inc.
("ATIS") is the 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. AUSA and WRL are wholly owned indirect
subsidiaries of AEGON NV, a Netherlands corporation.
Investment advisory fees: The Fund pays management fees to ATFA based on
average daily net assets ("ANA") at the following stated break points:
1.00% of the first $250 million of ANA
0.90% of the next $500 million of ANA
0.80% of the next $750 million of ANA
0.70% of ANA over $1.5 billion
ATFA currently voluntarily waives its advisory fee and will reimburse the Fund
to the extent that operating expenses, excluding 12b-1 fees, exceed the
following stated annual limit:
1.50% Expense Limit
From November 1, 2002 until April 30, 2003, ATFA waived additional advisory
fees as follows: 0.025% of average daily net assets from $100-$500 million (net
0.975%); 0.075% of assets from $500-$750 million (net 0.925%); 0.025% of assets
from $750 million-$1 billion (net 0.875%) and 0.025% of assets above $1 billion
(net 0.825%).
If total fund expenses fall below the annual expense limitations agreed to by
the adviser within the succeeding three years, the Fund may be required to pay
the advisor a portion or all of the waived advisory fees.
Distribution and service fees: The Fund has a 12b-1 distribution plan under the
1940 Act pursuant to which an annual fee, based on average daily net assets, is
paid to the distributor for various disbursements such as broker-dealer account
servicing fees and other promotional expenses of the Fund. The 12b-1 fee for
the Fund is comprised of a 0.25% service fee and the remaining amount is an
asset-based sales charge/distribution fee. The Fund is authorized under the
12b-1 plan to pay fees on each class up to the following limits:
Class A 0.35%
Class B 1.00%
Class C 1.00%
Class L 1.00%
Class M 0.90%
Underwriter commissions relate to front-end sales charges imposed for Class A
and M shares and contingent deferred sales charges from Classes B, L, M and
certain A share redemptions. For the year ended October 31, 2003, the
underwriter commissions were as follows:
Received by Underwriter $ 349
Retained by Underwriter 37
Contingent Sales Charges 649
Administrative services: The Fund has entered into an agreement with ATFS for
financial and legal fund administration services, which include such items as
compliance, expenses, financial statements and other reporting, distributions,
tax returns, prospectus preparation, board of trustees meeting support and
other legal matters. Transfer agent fees are reflected separately from
Administration fees on the Statement of Operations. The Legal fees on the
Statement of Operations are for fees paid to external legal counsel. ATFS
provides its services to the Fund at cost and is reimbursed monthly.
Transfer agent fees: The Fund incurs ATIS annual per-account charges (not in
thousands) of $20.00 for each open shareholder account and $1.63 for each
closed account maintained, and certain out of pocket expenses.
IDEX Mutual Funds Annual Report 2003
IDEX Janus Balanced 13
IDEX Janus Balanced
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 2-(continued)
Deferred compensation plan: Each eligible Fund Trustee may elect participation
in the Deferred Compensation Plan ("the Plan"). Under the Plan, such Trustees
may defer payment of a percentage of their total fees earned as a Fund Trustee.
These deferred amounts may be invested in any IDEX Fund. At October 31, 2003,
the value of invested plan amounts was $23. Invested plan amounts and the total
liability for deferred compensation to the Trustees under the Plan at October
31, 2003, are included in Net assets in the accompanying Statement of Assets
and Liabilities.
NOTE 3. INVESTMENT TRANSACTIONS
The cost of securities purchased and proceeds from securities sold (excluding
short-term securities) for the year ended October 31, 2003, were as follows:
Purchases of securities:
Long-Term excluding U.S. Government $ 209,426
U.S. Government 37,945
Proceeds from maturities and sales of securities:
Long-Term excluding U.S. Government 218,420
U.S. Government 68,496
NOTE 4. FEDERAL INCOME TAX MATTERS
The Fund has not made any provision for federal income or excise taxes due to
its policy to distribute all of its taxable income and capital gains to its
shareholders and otherwise qualify as a regulated investment company under the
Internal Revenue Code. Income and capital gain distributions are determined in
accordance with income tax regulations, which may differ from GAAP. These
differences are primarily due to differing treatments for items including, but
not limited to, wash sales, foreign currency transactions, net operating losses
and capital loss carryforwards.
Reclassifications between Undistributed net investment income (loss),
Undistributed net realized capital gains (loss) and Shares of beneficial
interest are made to reflect income and gains available for distribution under
federal tax regulations. Results of operations and net assets are not effected
by these reclassifications. These reclassifications are as follows:
Shares of beneficial interest, unlimited shares
authorized $ 3
Undistributed net investment income (loss) 68
Accumulated net realized gain (loss) from
investment securities and foreign currency
transactions (71)
The tax character of distributions paid may differ from the character of
distributions shown in the Statements of Changes in Net Assets
primarily due to short-term gains being treated as ordinary income for tax
purposes. The tax character of distributions paid during 2002 and 2003 was as
follows:
2002 Distributions paid from:
Ordinary income $ 5,352
Long-term capital gains -
2003 Distributions paid from:
Ordinary income $ 2,888
Long-term capital gains -
The tax basis components of distributable earnings as of October 31, 2003, are
as follows:
Undistributed Ordinary Income $ 270
=========
Undistributed Long-term Capital Gains $ -
=========
Capital Loss Carryforward $ (72,492)
=========
Net Unrealized Appreciation (Depreciation) $ 27,844
=========
The capital loss carryforwards are available to offset future realized capital
gains through the periods listed:
Capital Loss
Carryforward Available through
- ---------------------- ------------------
$ 23,179 October 31, 2009
40,242 October 31, 2010
9,071 October 31, 2011
The aggregate cost of investments and composition of unrealized appreciation
(depreciation) for federal income tax purposes as of October 31, 2003, are as
follows:
Federal Tax Cost Basis $ 368,849
=========
Unrealized Appreciation $ 32,411
Unrealized (Depreciation) (4,567)
---------
Net Unrealized Appreciation (Depreciation) $ 27,844
=========
Supplemental Tax Information
(unaudited)
For dividends paid during the year ended October 31, 2003, the Fund designates
qualified dividend income to the maximum extent allowable.
For corporate shareholders, 45% of investment income (dividend income plus
short-term gains, if any) qualifies for the dividends received deduction.
The information and distributions reported herein may differ from the
information and distributions taxable to the shareholders for the calendar year
ending December 31, 2003. Complete information will be computed and reported in
conjunction with your 2003 Form 1099-DIV.
IDEX Mutual Funds Annual Report 2003
IDEX Janus Balanced 14
- --------------------------------------------------------------------------------
Report of Independent Certified Public Accountants
To the Board of Trustees and Shareholders of
IDEX Janus Balanced
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of IDEX Janus Balanced (the "Fund")
(one of the portfolios constituting the IDEX Mutual Funds) at October 31, 2003,
and the results of its operations, the changes in its net assets and the
financial highlights for each of the periods indicated, in conformity with
accounting principles generally accepted in the United States of America. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with auditing standards generally accepted in the United States of America,
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at October 31, 2003 by correspondence with the
custodian and brokers, provide a reasonable basis for our opinion.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Tampa, Florida
December 18, 2003
IDEX Mutual Funds Annual Report 2003
IDEX Janus Balanced 15
IDEX Janus Flexible Income
- --------------------------------------------------------------------------------
MARKET ENVIRONMENT
After outpacing stocks for three consecutive years -- the first time that has
occurred since 1939-'41 -- U.S. Treasury securities reversed course in 2003.
However, the road was a bumpy one as Treasury yields rose and fell with the
headline news and the fortunes of the stock market. Time and again, investors
fled Treasuries when better-than-expected economic reports lifted equities and
pressured Treasury prices. Then only to return when disappointing economic data
and, later, fears of a protracted military campaign in Iraq, caused them to
abandon stocks and seek refuge in the Treasury market. As the conflict cooled
in the spring, investors turned their full attention to the economy, where
evidence of a rebound was mounting. Meanwhile, in a bid to support the nascent
economic recovery, the Federal Reserve Board ("Fed") cut short-term interest
rates twice during the fiscal year, the last time to an over 40-year low of 1%.
The Fed also indicated they had the flexibility necessary to keep rates low for
the foreseeable future, which further buoyed bond market sentiment. Many
corporations took advantage of the low-interest-rate environment to refinance
their debt, streamline their balance sheets and reduce their borrowing costs.
This, together with Treasury yields that in June hit all-time lows, helped
corporate bonds rally as investors sought better returns and greater upside
beyond the Treasury market. Likewise, high-yield bonds showed renewed vigor,
bolstered by a brighter economic outlook, improving corporate profits and a
rejuvenated stock market. As the fiscal year came to a close, an economy on the
mend and investors' increased appetite for risk favored corporate and
high-yield bonds, while Treasury yields trended higher against the backdrop of
an ailing U.S. dollar and exploding federal deficit.
PERFORMANCE
For the year ended October 31, 2003, IDEX Janus Flexible Income returned 6.39%.
By comparison its benchmark, the Lehman Brothers U.S. Government/Credit Index,
returned 6.17%.
MANAGER'S OVERVIEW
Q. Which holdings had the greatest positive impact on the Fund's performance?
One of the portfolio's top performing positions during the period was the
government sponsored enterprise, Fannie Mae, which saw its price appreciate as
the home lending market remained strong. On the corporate side, electric
utility company Public Service Company of Colorado, which is now owned by
Minneapolis-based Xcel Energy Inc., made a positive contribution to
performance. Waste Management, Inc., a leading provider of comprehensive waste
management services, also worked to our advantage. Another corporate bond that
provided a lift to our performance was USA Interactive, the Internet
conglomerate. Cable giant Comcast Cable Communications, Inc. also saw its bonds
trade higher as did StanCorp Financial Group, Inc., an insurance and mortgage
company.
Q. Which individual holdings had the greatest negative impact on the Fund's
performance?
Our investment in hospital operator, Tenet Healthcare Corporation, proved to be
the biggest detractor from our performance during the last twelve months. Other
bonds that had a negative impact included; Pitney Bowes Inc., a provider of
integrated mail and document solutions, Newell Rubbermaid Inc., a manufacturer
of consumer products, and Electronic Data Systems Corporation, a provider of
information technology solutions. Also negatively impacting the portfolio were
several of our Treasury positions, which declined as the economy began to
recover.
Q. Which sectors had the greatest impact on the Fund's performance?
While maintaining our approach to building this portfolio from the bottom up,
we continue to own a diversified mix of government, agency and corporate
securities.
/s/ Ronald V. Speaker
Ronald V. Speaker
Fund Manager
Janus Capital Management, LLC
IDEX Mutual Funds Annual Report 2003
IDEX Janus Flexible Income 1
IDEX Janus Flexible Income
- --------------------------------------------------------------------------------
Comparison of change in value of $10,000 investment in Class A shares and its
comparative index.
Growth of $10,000
Inception of 10/31/93 through 10/31/03
Investment less sales charges - $9,452
[The following table was depicted as a mountain chart in the printed material.]
DATE Class A LBGC
- ------------------ ------------------ ---------------------
10/31/1993 9,525 10,000
12/31/1993 9,627 9,930
3/31/1994 9,479 9,619
6/30/1994 9,310 9,500
9/30/1994 9,378 9,547
12/31/1994 9,222 9,582
3/31/1995 9,590 10,059
6/30/1995 10,201 10,712
9/30/1995 10,439 10,917
12/31/1995 10,959 11,426
3/31/1996 10,742 11,158
6/30/1996 10,830 11,211
9/30/1996 11,143 11,409
12/31/1996 11,560 11,757
3/31/1997 11,587 11,656
6/30/1997 11,988 12,080
9/30/1997 12,532 12,503
12/31/1997 12,895 12,904
3/31/1998 13,226 13,100
6/30/1998 13,518 13,443
9/30/1998 13,776 14,109
12/31/1998 13,902 14,127
3/31/1999 13,908 13,958
6/30/1999 13,735 13,805
9/30/1999 13,787 13,880
12/31/1999 14,032 13,823
3/31/2000 14,222 14,195
6/30/2000 14,152 14,401
9/30/2000 14,427 14,815
12/31/2000 14,862 15,462
3/31/2001 15,279 15,956
6/30/2001 15,266 16,004
9/30/2001 15,931 16,766
12/31/2001 15,894 16,776
3/31/2002 15,792 16,697
6/30/2002 16,302 17,324
9/30/2002 17,132 18,311
12/31/2002 17,329 18,628
3/31/2003 17,651 18,934
6/30/2003 18,251 19,602
9/30/2003 18,218 19,503
10/31/2003 17,988 19,256
Average Annual Total Return for Periods Ended 10/31/03
- --------------------------------------------------------------------------------
From Inception
1 year 5 years 10 years Inception Date
- --------------------------------------------------------------------------------
Class A (NAV) 6.39% 5.89% 6.56% 7.66% 6/29/87
Class A (POP) 1.33% 4.86% 6.05% 7.34% 6/29/87
LBGC(1) 6.17% 6.57% 6.77% 8.33% 6/29/87
- --------------------------------------------------------------------------------
Class B (NAV) 5.59% 5.17% - 6.35% 10/1/95
Class B (POP) 0.59% 5.00% - 6.35% 10/1/95
- --------------------------------------------------------------------------------
Class C (NAV) 5.59% - - 6.23% 11/1/99
- --------------------------------------------------------------------------------
Class L (NAV) - - - 5.16% 11/11/02
Class L (POP) - - - 3.16% 11/11/02
- --------------------------------------------------------------------------------
Class M (NAV) 5.69% 5.27% 5.96% 6.00% 10/1/93
Class M (POP) 3.64% 5.06% 5.85% 5.89% 10/1/93
- --------------------------------------------------------------------------------
NOTES
(1) The Lehman Brothers U.S. Government/Credit (LBGC) 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 Micropal(R)(C) Micropal, Inc. 2002 -
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 4.75% 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 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.
Periods less than 1 year represent total return and are not annualized.
This material must be preceded or accompanied by a current prospectus, which
includes specific contents regarding the investment objectives and policies of
this fund.
IDEX Mutual Funds Annual Report 2003
IDEX Janus Flexible Income 2
IDEX Janus Flexible Income
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
At October 31, 2003
(all amounts except share amounts in thousands)
Principal Value
- --------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS (18.5%)
U.S. Treasury Bond
7.25%, due 05/15/2016 (a) $ 3,085 $ 3,823
7.25%, due 08/15/2022 1,380 1,726
6.25%, due 08/15/2023 (a) 4,445 5,017
6.25%, due 05/15/2030 (c) 760 869
5.38%, due 02/15/2031 (a) 2,172 2,244
U.S. Treasury Inflation Index
3.00%, due 07/15/2012 5,292 5,791
U.S. Treasury Note
1.63%, due 09/30/2005 (a) 1,165 1,161
5.75%, due 11/15/2005 212 228
2.00%, due 05/15/2006 (a) 855 853
2.38%, due 08/15/2006 (a) 2,400 2,407
4.38%, due 05/15/2007 (a) 3,330 3,523
3.25%, due 08/15/2008 (a) 2,240 2,244
3.13%, due 09/15/2008 1,115 1,110
3.13%, due 10/15/2008 520 517
6.50%, due 02/15/2010 205 238
5.75%, due 08/15/2010 35 39
5.00%, due 02/15/2011 (a) 1,520 1,627
4.25%, due 08/15/2013 (a) 2,285 2,275
---------
Total U.S. Government Obligations (cost: $35,117) 35,692
---------
U.S. GOVERNMENT AGENCY OBLIGATIONS (10.4%)
Fannie Mae
4.38%, due 10/15/2006 895 938
2.88%, due 10/15/2005 (a) 7,725 7,850
3.25%, due 11/15/2007 2,110 2,113
5.25%, due 01/15/2009 2,840 3,046
6.25%, due 02/01/2011 2,635 2,882
6.00%, due 05/15/2011 225 248
6.13%, due 03/15/2012 415 460
4.38%, due 09/15/2012 (a) 935 918
6.63%, due 11/15/2030 690 777
Fannie Mae-Conventional Pool
4.63%, due 05/01/2013 775 746
---------
Total U.S. Government Agency Obligations (cost: $19,764) 19,978
---------
FOREIGN GOVERNMENT OBLIGATIONS (3.3%)
Federal Republic of Germany
4.50%, due 08/17/2007 775 937
5.00%, due 07/04/2012 2,125 2,605
Kingdom of Spain
5.00%, due 07/30/2012 600 726
United Mexican States
4.63%, due 10/08/2008 400 401
6.38%, due 01/16/2013 750 772
8.00%, due 09/24/2022 750 816
---------
Total Foreign Government Obligations (cost: $5,770) 6,257
---------
CORPORATE DEBT SECURITIES (65.1%)
Air Transportation (0.1%)
Continental Airlines, Inc.
6.80%, due 07/02/2007 $ 218 $ 206
Amusement & Recreation Services (0.3%)
Hard Rock Hotel, Inc.-144A
8.88%, due 06/01/2013 475 501
Apparel & Accessory Stores (0.7%)
Gap, Inc. (The)
6.90%, due 09/15/2007 1,250 1,359
Apparel Products (0.1%)
Cintas Corporation No. 2
6.00%, due 06/01/2012 245 265
Auto Repair, Services & Parking (0.4%)
PHH Corporation
6.00%, due 03/01/2008 775 829
Automotive (0.3%)
DaimlerChrysler North America
Holding Corporation
6.50%, due 11/15/2013 225 227
General Motors Corporation (a)
7.13%, due 07/15/2013 350 364
Automotive Dealers & Service Stations (0.3%)
AutoZone, Inc.
5.88%, due 10/15/2012 525 550
Beer, Wine & Distilled Beverages (0.3%)
Miller Brewing Company-144A
5.50%, due 08/15/2013 400 408
SABMiller PLC-144A
6.63%, due 08/15/2033 250 262
Beverages (1.6%)
Anheuser-Busch Companies, Inc
5.95%, due 01/15/2033 375 381
Brown-Forman Corporation
2.13%, due 03/15/2006 600 598
Coca-Cola Enterprises Inc.
4.38%, due 09/15/2009 1,000 1,016
7.13%, due 08/01/2017 435 513
Coors (Adolph) Company
6.38%, due 05/15/2012 535 582
Business Credit Institutions (3.0%)
Caterpillar Financial Services Corporation
2.35%, due 09/15/2006 925 915
ChevronTexaco Capital Corporation
3.50%, due 09/17/2007 1,035 1,048
Deere (John) Capital Corporation
4.13%, due 07/15/2005 290 300
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Janus Flexible Income 3
IDEX Janus Flexible Income
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Principal Value
- ------------------------------------------------------------------------------------
Business Credit Institutions (continued)
Ford Motor Credit Company
5.75%, due 02/23/2004 $ 500 $ 506
7.00%, due 10/01/2013 (a) 275 270
Fund American Companies, Inc.
5.88%, due 05/15/2013 1,000 999
National Rural Utilities Cooperative
Finance Corporation
4.38%, due 10/01/2010 900 896
Valentia Telecommunications Ltd.-144A
7.25%, due 08/15/2013 700 855
Business Services (0.6%)
ARAMARK Services, Inc.
7.00%, due 05/01/2007 430 474
6.38%, due 02/15/2008 575 614
Clear Channel Communications, Inc.
6.00%, due 11/01/2006 105 113
Chemicals & Allied Products (1.3%)
Dial Corporation (The)
7.00%, due 08/15/2006 890 984
6.50%, due 09/15/2008 600 649
Nalco Company-144A
7.75%, due 11/15/2011 225 234
Proctor & Gamble Company (The)
4.75%, due 06/15/2007 645 682
Commercial Banks (2.0%)
Bank of New York Company, Inc. (The)
2.20%, due 05/12/2006 750 748
Citigroup Inc.
4.88%, due 05/07/2015 775 751
Citizens Banking Corporation
5.75%, due 02/01/2013 175 172
Hudson United Bancorp
8.20%, due 09/15/2006 300 330
Mellon Funding Corporation
5.00%, due 12/01/2014 600 600
U.S. Bancorp
2.75%, due 03/30/2006 800 806
Zions Bancorporation
6.00%, due 09/15/2015 475 493
Communication (3.9%)
Comcast Cable Communications, Inc.
6.38%, due 01/30/2006 1,000 1,077
Comcast Corporation
5.85%, due 01/15/2010 1,000 1,062
5.50%, due 03/15/2011 1,025 1,058
5.30%, due 01/15/2014 275 270
Communication (continued)
Cox Communications, Inc.
6.88%, due 06/15/2005 $ 1,000 $ 1,074
7.13%, due 10/01/2012 110 125
Echostar DBS Corporation
9.13%, due 01/15/2009 589 663
Echostar DBS Corporation-144A
5.75%, due 10/01/2008 450 448
Intelsat, Ltd.
6.50%, due 11/02/2013 200 203
Rogers Cable Inc.
6.25%, due 06/15/2013 425 425
Viacom Inc.
6.40%, due 01/30/2006 500 542
XM Satellite Radio Inc.
12.00%, due 06/15/2010 475 528
Computer & Data Processing Services (0.2%)
Fiserv, Inc.
4.00%, due 04/15/2008 375 373
Computer & Office Equipment (1.5%)
Apple Computer, Inc.
6.50%, due 02/15/2004 745 753
International Business Machines Corporation
2.38%, due 11/01/2006 925 921
4.25%, due 09/15/2009 500 509
5.88%, due 11/29/2032 650 647
Construction (0.1%)
Toll Brothers, Inc.
6.88%, due 11/15/2012 250 274
Department Stores (0.6%)
J.C. Penney Company, Inc.
6.00%, due 05/01/2006 900 911
Saks Incorporated
8.25%, due 11/15/2008 250 283
Drug Stores & Proprietary Stores (0.9%)
CVS Corporation
3.88%, due 11/01/2007 750 765
Medco Health Solutions, Inc. (a)
7.25%, due 08/15/2013 700 745
Rite Aid Corporation
7.63%, due 04/15/2005 100 101
7.13%, due 01/15/2007 100 101
Electric Services (4.6%)
Ameren Energy Generating
Company-Series F
7.95%, due 06/01/2032 295 359
CenterPoint Energy-144A (a)
5.88%, due 06/01/2008 1,000 1,029
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Janus Flexible Income 4
IDEX Janus Flexible Income
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Principal Value
- --------------------------------------------------------------------------------
Electric Services (continued)
CenterPoint Energy Resources Corp.
6.50%, due 02/01/2008 $ 250 $ 268
Dominion Resources, Inc.
2.80%, due 02/15/2005 825 833
5.13%, due 12/15/2009 650 685
5.00%, due 03/15/2013 775 769
MidAmerican Energy Holdings Company
3.50%, due 05/15/2008 875 851
Southwestern Public Service Company
5.13%, due 11/01/2006 500 531
Tri-State Generation & Transmission
Association, Inc.-144A
6.04%, due 01/31/2018 450 457
TXU Corp.
6.38%, due 06/15/2006 (a) 1,625 1,723
6.38%, due 01/01/2008 750 784
TXU Energy Company LLC-144A
7.00%, due 03/15/2013 525 576
Electric, Gas & Sanitary Services (2.5%)
CMS Energy Corporation
7.63%, due 11/15/2004 (a) 425 434
7.50%, due 01/15/2009 475 483
CMS Energy Corporation-144A (a)
7.75%, due 08/01/2010 450 458
Northern States Power Company
2.88%, due 08/01/2006 350 350
Public Service Company of Colorado
7.88%, due 10/01/2012 1,000 1,208
4.78%, due 03/01/2013 600 595
Public Service Company of
Colorado-Series A
6.88%, due 07/15/2009 100 112
Xcel Energy Inc.
7.00%, due 12/01/2010 675 758
Xcel Energy Inc.-144A
3.40%, due 07/01/2008 400 388
Electronic Components & Accessories (1.4%)
Amkor Technology, Inc.
10.50%, due 05/01/2009 140 151
Jabil Circuit, Inc.
5.88%, due 07/15/2010 225 232
Tyco International Group SA
6.38%, due 02/15/2006 525 556
6.38%, due 10/15/2011 475 494
Tyco International Ltd.
6.38%, due 06/15/2005 1,200 1,259
Environmental Services (1.3%)
Allied Waste North America, Inc. (a)
10.00%, due 08/01/2009 250 272
Environmental Services (continued)
USA Waste Services, Inc.
7.00%, due 10/01/2004 $ 750 $ 782
Waste Management, Inc.
7.38%, due 08/01/2010 1,200 1,388
Fabricated Metal Products (0.3%)
Gillette Company (The) (e)
4.13%, due 08/30/2007 500 516
Food & Kindred Products (3.1%)
Dean Foods Company
6.63%, due 05/15/2009 1,500 1,575
6.90%, due 10/15/2017 200 206
Del Monte Foods Company
9.25%, due 05/15/2011 115 127
Del Monte Foods Company-144A
8.63%, due 12/15/2012 275 304
General Mills, Inc.
5.13%, due 02/15/2007 500 532
3.88%, due 11/30/2007 1,000 1,008
6.00%, due 02/15/2012 125 134
Kellogg Company
6.00%, due 04/01/2006 650 700
2.88%, due 06/01/2008 650 626
Kellogg Company-Series B
6.60%, due 04/01/2011 750 838
Food Stores (0.8%)
Kroger, Co. (The)
7.38%, due 03/01/2005 600 641
Safeway Inc.
6.15%, due 03/01/2006 570 613
Stater Bros. Holdings Inc.
10.75%, due 08/15/2006 225 237
Gas Production & Distribution (0.6%)
Panhandle Eastern Pipe Line Company-144A
4.80%, due 08/15/2008 425 434
Southwest Gas Corporation
7.63%, due 05/15/2012 720 815
Health Services (3.3%)
Fresenius Finance BV-144A
7.75%, due 04/30/2009 300 372
Fresenius Medical Care Capital Trust IV
7.88%, due 06/15/2011 100 106
HCA Inc.
6.91%, due 06/15/2005 1,500 1,575
6.95%, due 05/01/2012 (a) 1,000 1,036
6.25%, due 02/15/2013 1,000 989
7.50%, due 11/05/2033 125 124
Manor Care, Inc.
6.25%, due 05/01/2013 360 369
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Janus Flexible Income 5
IDEX Janus Flexible Income
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Principal Value
- ----------------------------------------------------------------------------------
Health Services (continued)
Quest Diagnostics Incorporated
6.75%, due 07/12/2006 $ 1,250 $ 1,371
7.50%, due 07/12/2011 300 348
Holding & Other Investment Offices (0.4%)
OneAmerica Financial Partners, Inc.-144A
7.00%, due 10/15/2033 700 687
Hotels & Other Lodging Places (1.0%)
HMH Properties, Inc.
7.88%, due 08/01/2005 429 441
Starwood Hotels & Resorts Worldwide, Inc.
6.75%, due 11/15/2005 1,335 1,408
Industrial Machinery & Equipment (0.5%)
Kennametal Inc.
7.20%, due 06/15/2012 1,000 1,056
Instruments & Related Products (0.6%)
Raytheon Company
6.50%, due 07/15/2005 1,000 1,071
Insurance (5.1%)
Berkshire Hathaway Inc.-144A
4.63%, due 10/15/2013 350 343
Farmers Insurance Exchange-144A
8.50%, due 08/01/2004 200 205
First American Capital Trust I
8.50%, due 04/15/2012 300 329
Liberty Mutual Insurance Company-144A
8.50%, due 05/15/2025 525 530
7.88%, due 10/15/2026 450 430
Markel Corporation
6.80%, due 02/15/2013 1,000 1,058
Progressive Corporation (The)
6.25%, due 12/01/2032 250 257
StanCorp Financial Group, Inc.
6.88%, due 10/01/2012 1,250 1,356
Travelers Property Casualty Corp.
5.00%, due 03/15/2013 775 773
UnitedHealth Group Incorporated
7.50%, due 11/15/2005 360 397
5.20%, due 01/17/2007 643 687
4.88%, due 04/01/2013 525 526
UnumProvident Corporation
6.38%, due 07/15/2005 350 367
7.38%, due 06/15/2032 425 426
W.R. Berkley Corporation
5.88%, due 02/15/2013 930 945
WellPoint Health Networks Inc.
6.38%, due 06/15/2006 1,185 1,295
Life Insurance (1.2%)
Americo Life, Inc.-144A
7.88%, due 05/01/2013 $ 1,000 $ 990
Nationwide Financial Services, Inc.
5.63%, due 02/13/2015 550 556
Nationwide Mutual Life Insurance
Company-144A
7.50%, due 02/15/2024 415 422
New York Life Insurance Company-144A
5.88%, due 05/15/2033 400 392
Metal Cans & Shipping Containers (0.3%)
Ball Corporation
6.88%, due 12/15/2012 475 495
Metal Mining (0.5%)
Freeport-McMoRan Copper & Gold Inc. (a)
10.13%, due 02/01/2010 800 912
Motion Pictures (0.8%)
AMC Entertainment Inc.
9.88%, due 02/01/2012 300 329
Time Warner Inc.
5.63%, due 05/01/2005 750 787
6.88%, due 05/01/2012 425 471
Motor Vehicles, Parts & Supplies (0.3%)
TRW Automotive Inc.-144A
10.13%, due 02/15/2013 425 554
Oil & Gas Extraction (2.3%)
Devon Energy Corporation
2.75%, due 08/01/2006 750 749
Gulfterra Energy Partner, L.P.
8.50%, due 06/01/2010 250 273
Halliburton Company-144A
5.50%, due 10/15/2010 325 328
Magnum Hunter Resources, Inc.
9.60%, due 03/15/2012 190 212
Occidental Petroleum Corporation
5.88%, due 01/15/2007 450 489
4.25%, due 03/15/2010 350 349
Pemex Project Funding Master Trust
6.13%, due 08/15/2008 1,250 1,314
8.63%, due 02/01/2022 (e) 500 545
Westport Resources Corporation-144A
8.25%, due 11/04/2011 75 83
Personal Credit Institutions (3.8%)
Capital One Bank
5.75%, due 09/15/2010 550 577
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Janus Flexible Income 6
IDEX Janus Flexible Income
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Principal Value
- -----------------------------------------------------------------------------------
Personal Credit Institutions (continued)
General Electric Capital Corporation
2.85%, due 01/30/2006 $ 1,000 $ 1,011
6.00%, due 06/15/2012 395 425
General Motors Acceptance Corporation
4.50%, due 07/15/2006 (a) 1,710 1,735
5.13%, due 05/09/2008 (a) 600 609
6.88%, due 09/15/2011 250 258
Household Finance Corporation
3.38%, due 02/21/2006 500 510
4.63%, due 01/15/2008 600 622
SLM Corporation
3.95%, due 08/15/2008 1,050 1,057
SLM Corporation-Series MTN
5.05%, due 11/14/2014 500 494
Personal Services (0.6%)
Cendant Corporation
6.25%, due 03/15/2010 775 836
Service Corporation International
6.00%, due 12/15/2005 350 353
Petroleum Refining (0.7%)
Conoco Funding Company
5.45%, due 10/15/2006 710 764
6.35%, due 10/15/2011 565 629
Pharmaceuticals (0.2%)
Mallinckrodt Inc.
6.75%, due 09/15/2005 275 289
Printing & Publishing (1.9%)
Belo Corp.
7.13%, due 06/01/2007 575 644
8.00%, due 11/01/2008 275 322
Dex Media East LLC (Dex Media Finance Co.)
9.88%, due 11/15/2009 125 142
12.13%, due 11/15/2012 350 422
Dex Media West LLC (Dex Media Finance
Co.)-144A
9.88%, due 08/15/2013 350 398
Gannett Co., Inc.
4.95%, due 04/01/2005 865 902
News America Incorporated (a)
6.63%, due 01/09/2008 810 899
Radio & Television Broadcasting (3.0%)
British Sky Broadcasting Group PLC
7.30%, due 10/15/2006 590 651
6.88%, due 02/23/2009 2,500 2,757
Corus Entertainment Inc.
8.75%, due 03/01/2012 295 325
Radio & Television Broadcasting (continued)
Cox Enterprises, Inc.-144A
4.38%, due 05/01/2008 $ 100 $ 101
Univision Communications Inc.
3.50%, due 10/15/2007 275 274
3.88%, due 10/15/2008 700 691
USA Interactive
7.00%, due 01/15/2013 800 884
Railroads (0.1%)
CSX Corporation
4.88%, due 11/01/2009 250 257
Research & Testing Services (0.1%)
Vicar Operating, Inc.
9.88%, due 12/01/2009 200 223
Residential Building Construction (0.1%)
K. Hovnanian Enterprises, Inc.
6.50%, due 01/15/2014 275 274
Restaurants (0.1%)
Domino's, Inc.-144A
8.25%, due 07/01/2011 150 158
YUM! Brands, Inc.
7.70%, due 07/01/2012 85 96
Rubber & Misc. Plastic Products (0.5%)
Newell Rubbermaid Inc.
4.00%, due 05/01/2010 400 378
Sealed Air Corporation-144A
5.38%, due 04/15/2008 250 260
6.88%, due 07/15/2033 350 361
Savings Institutions (0.8%)
Sovereign Bancorp, Inc.
5.13%, due 03/15/2013 600 587
Sovereign Capital Trust I
9.00%, due 04/01/2027 125 137
Webster Bank
5.88%, due 01/15/2013 525 543
Webster Capital Trust II
10.00%, due 04/01/2027 275 330
Security & Commodity Brokers (0.3%)
Franklin Resources, Inc.
3.70%, due 04/15/2008 500 499
Stone, Clay & Glass Products (0.9%)
Hanson Australia Funding Limited
5.25%, due 03/15/2013 450 447
Owens-Brockway Glass Container Inc.
8.88%, due 02/15/2009 280 304
7.75%, due 05/15/2011 250 264
8.75%, due 11/15/2012 350 383
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Janus Flexible Income 7
IDEX Janus Flexible Income
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Principal Value
- ----------------------------------------------------------------------
Stone, Clay & Glass Products (continued)
Owens-Illinois, Inc.
7.15%, due 05/15/2005 $ 300 $ 308
Telecommunications (1.4%)
AT&T Broadband, LLC
7.88%, due 08/01/2013 1,425 1,670
Deutsche Telekom International Finance BV
3.88%, due 07/22/2008 300 299
Nextel Communications, Inc.
9.38%, due 11/15/2009 475 518
7.38%, due 08/01/2015 225 234
Transportation & Public Utilities (0.5%)
Kaneb Pipe Line Operating Partnership, L.P.
5.88%, due 06/01/2013 500 497
Kern River Funding Corp.-144A
4.89%, due 04/30/2018 492 483
Variety Stores (0.9%)
Wal-Mart Stores, Inc.
6.88%, due 08/10/2009 1,000 1,147
4.55%, due 05/01/2013 625 614
--------
Total Corporate Debt Securities (cost: $119,874) 125,428
--------
Shares Value
- ---------------------------------------------------------------------------
PREFERRED STOCKS (0.5%)
Holding & Other Investment Offices (0.1%)
Saul Centers, Inc. 4,300 $ 108
Real Estate (0.1%)
Chevy Chase Preferred Capital Corpor 4,700 269
Savings Institutions (0.3%)
Chevy Chase Bank, F.S.B. 3,500 96
Chevy Chase Bank, F.S.B. (new) 15,650 423
---------
Total Preferred Stocks (cost: $884) 896
---------
COMMON STOCKS (0.00%)
Telecommunications (0.0%)
VersaTel Telecom International-Warrants,
Expires 05/15/2008 75 (d)
---------
Total Common Stocks (d)
---------
Principal Value
- ------------------------------------------------------------------------------
SECURITY LENDING COLLATERAL (21.9%)
Debt (19.2%)
Bank Notes (2.3%)
Canadian Imperial Bank of Commerce
1.12%, due 11/04/2003 $ 1,829 $ 1,829
Fleet National Bank
1.06%, due 01/21/2004 2,561 2,561
Euro Dollar Terms (10.8%)
Bank of Montreal
1.03%, due 11/13/2003 $ 1,463 $ 1,463
1.04%, due 11/14/2003 1,285 1,285
Bank of Nova Scotia (The)
1.06%, due 11/12/2003 731 731
Bank of Scotland
1.04%, due 11/14/2003 1,463 1,463
Citigroup Inc.
1.08%, due 01/05/2004 2,195 2,195
Credit Agricole Indosuez
1.08%, due 01/06/2004 1,609 1,609
Den Danske Bank
1.04%, due 11/10/2003 731 731
1.08%, due 01/20/2004 2,195 2,195
Royal Bank of Canada
1.04%, due 11/24/2003 1,829 1,829
1.06%, due 12/08/2003 731 731
Royal Bank of Scotland Group PLC (The)
1.08%, due 01/15/2004 2,194 2,194
SouthTrust Bank
1.08%, due 01/16/2004 2,194 2,194
Wells Fargo & Company
1.04%, due 11/20/2003 2,194 2,194
Promissory Notes (1.3%)
Goldman Sachs Group, Inc. (The)
1.15%, due 11/03/2003 2,561 2,561
Repurchase Agreements (4.8%) (b)
Goldman Sachs Group, Inc. (The)
1.10% Repurchase Agreement
dated 10/31/2003 to be repurchased
at $731 on 11/03/2003 731 731
Merrill Lynch & Co., Inc.
1.10% Repurchase Agreement
dated 10/31/2003 to be repurchased
at $8,413 on 11/03/2003 8,413 8,413
Shares Value
- -------------------------------------------------------------------------------
Investment Companies (2.7%)
Money Market Funds (2.7%)
Merrimac Cash Series Fund-
Premium Class
1-day yield of 0.97% 5,120,449 $ 5,120
---------
Total Security Lending Collateral (cost: $42,029) 42,029
---------
Total Investment Securities (cost: $223,438) $ 230,280
=========
SUMMARY:
Investments, at value 119.7)% $ 230,280)
Liabilities in excess of other assets (19.7)% (37,937)
--------- ---------
Net assets 100.0)% $ 192,343)
========= =========
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Janus Flexible Income 8
IDEX Janus Flexible Income
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
FORWARD FOREIGN CURRENCY CONTRACTS:
- ----------------------------------------------------------------------
Net
Amount in Unrealized
Bought Settlement U.S. Dollars Appreciation
Currency (Sold) Date Bought (Sold) (Depreciation)
- ------------- ----------- ------------ --------------- ---------------
Euro Dollar (6,150) 03/26/2004 $ (7,019) $ (109)
Euro Dollar 1,000 03/26/2004 1,160 (1)
--------- ------
$ (5,859) $ (110)
========= ======
FUTURES CONTRACTS:
- -------------------------------------------------------------------------
Net Unrealized
Settlement Appreciation
Contracts Date Amount (Depreciation)
----------- ------------ -------------- ---------------
10-Year U.S.
Treasury Note (168) 12/31/2003 $ (18,519) $ (346)
NOTES TO SCHEDULE OF INVESTMENTS:
(a) At October 31, 2003, all or a portion of this security is on loan (see Note
1). The value at October 31, 2003, of all securities on loan is $41,101.
(b) Cash collateral for the Repurchase Agreements, valued at $9,327, 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.
(c) At October 31, 2003, all or a portion of this security is segregated with
the custodian to cover margin requirements for open futures contracts. The
value of all securities segregated at October 31, 2003, is $414.
(d) Value is less than $1.
(e) Floating or variable rate note. Rate is listed as of October 31, 2003.
DEFINITION:
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 financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Janus Flexible Income 9
IDEX Janus Flexible Income
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
At October 31, 2003
(all amounts except per share amounts in thousands)
Assets:
Investment securities, at value (cost: $223,438)
(including $41,101 of securities loaned) $230,280
Cash 3,254
Receivables:
Investment securities sold 1,384
Shares of beneficial interest sold 57
Interest 2,713
Other 44
---------
237,732
---------
Liabilities:
Investment securities purchased 2,520
Accounts payable and accrued liabilities:
Shares of beneficial interest redeemed 272
Management and advisory fees 139
Distribution fees 115
Transfer agent fees 58
Dividends to shareholders 1
Payable for securities on loan 42,029
Unrealized depreciation on forward foreign currency
contracts 110
Variation margin 58
Other 87
---------
45,389
---------
Net Assets $192,343
=========
Net Assets Consist of:
Shares of beneficial interest, unlimited shares authorized $182,510
Undistributed net investment income (loss) 330
Undistributed net realized gain (loss) from investments,
futures contracts and foreign currency transactions 3,113
Net unrealized appreciation (depreciation) on:
Investment securities 6,839
Future contracts (346)
Translation of assets and liabilities denominated in
foreign currencies (103)
---------
Net Assets $192,343
=========
Shares Outstanding:
Class A 8,608
Class B 6,812
Class C 1,391
Class L 802
Class M 1,232
Net Asset Value Per Share:
Class A $ 10.21
Class B 10.20
Class C 10.20
Class L 10.20
Class M 10.20
Maximum Offering Price Per Share (a):
Class A $ 10.72
Class M 10.30
(a) 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.
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the year ended October 31, 2003
(all amounts in thousands)
Investment Income:
Interest $ 9,950
Dividends 11
Income from loaned securities-net 84
--------
10,045
--------
Expenses:
Management and advisory fees 1,640
Transfer agent fees 355
Printing and shareholder reports 52
Custody fees 55
Administration fees 30
Legal fees 12
Auditing and accounting fees 19
Trustees fees 14
Registration fees 79
Other 9
Distribution and service fees:
Class A 311
Class B 739
Class C 165
Class L 44
Class M 137
--------
Total expenses 3,661
--------
Net Investment Income (Loss) 6,384
--------
Net Realized Gain (Loss) from:
Investment securities 4,312
Futures contracts 158
Foreign currency transactions (739)
--------
3,731
--------
Net Increase (Decrease) in Unrealized Appreciation
(Depreciation) on:
Investment securities 1,549
Futures contracts (346)
Translation of assets and liabilities denominated in
foreign currencies (87)
--------
1,116
--------
Net Gain (Loss) on Investments, Futures Contracts, and
Foreign Currency Transactions 4,847
--------
Net Increase (Decrease) in Net Assets Resulting
from Operations $ 11,231
========
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Janus Flexible Income 10
IDEX Janus Flexible Income
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended
(all amounts in thousands)
October 31, October 31,
2003 2002
--------------- ---------------
Increase (Decrease) In Net Assets From:
Operations:
Net investment income (loss) $ 6,384 $ 4,124
Net realized gain (loss) from investment
securities, futures contracts and
foreign currency transactions 3,731 (470)
Net unrealized appreciation
(depreciation) on investment
securities, futures contracts, and
foreign currency translations 1,116 1,873
---------- ----------
11,231 5,527
---------- ----------
Distributions to Shareholders:
From net investment income:
Class A (3,126) (1,541)
Class B (2,115) (1,687)
Class C (470) (417)
Class L (130) -
Class M (449) (528)
---------- ----------
(6,290) (4,173)
---------- ----------
From net realized gains:
Class A - (173)
Class B - (251)
Class C - (53)
Class L - -
Class M - (89)
---------- ----------
- (566)
---------- ----------
Capital Share Transactions:
Proceeds from shares sold:
Class A 81,059 60,787
Class B 28,769 43,395
Class C 9,606 14,467
Class L 10,260 -
Class M 2,737 7,842
---------- ----------
132,431 126,491
---------- ----------
Dividends and distributions reinvested:
Class A 2,920 1,308
Class B 1,678 1,377
Class C 366 349
Class L 101 -
Class M 403 484
---------- ----------
5,468 3,518
---------- ----------
Cost of shares redeemed:
Class A (60,370) (30,444)
Class B (29,848) (18,221)
Class C (13,557) (8,785)
Class L (2,214) -
Class M (6,886) (6,995)
---------- ----------
(112,875) (64,445)
---------- ----------
25,024 65,564
---------- ----------
Net increase (decrease) in net assets 29,965 66,352
---------- ----------
Net Assets:
Beginning of year 162,378 96,026
---------- ----------
End of year $ 192,343 $ 162,378
========== ==========
Undistributed Net Investment Income (Loss) $ 330 $ 216
========== ==========
Share Activity:
Shares issued:
Class A 8,049 6,285
Class B 2,820 4,452
Class C 940 1,492
Class L 1,008 -
Class M 266 806
---------- ----------
13,083 13,035
---------- ----------
Shares issued-reinvested from
distributions:
Class A 287 135
Class B 165 143
Class C 36 36
Class L 10 -
Class M 40 50
---------- ----------
538 364
---------- ----------
Shares redeemed:
Class A (5,946) (3,123)
Class B (2,936) (1,880)
Class C (1,335) (904)
Class L (216) -
Class M (679) (727)
---------- ----------
(11,112) (6,634)
---------- ----------
Net increase (decrease) in shares
outstanding 2,509 6,765
========== ==========
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Janus Flexible Income 11
IDEX Janus Flexible Income
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share of beneficial interest outstanding throughout each period
----------------------------------------------------------------------------------------------------------
Investment Operations Distributions
----------------------------------------- -------------------------------------
Net Asset Net Asset
For the Value, Net Net Realized From Net From Net Value,
Period Beginning Investment and Unrealized Total Investment Realized Total End
Ended (d)(g) of Period Income (Loss) Gain (Loss) Operations Income Gains Distributions of Period
- -----------------------------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 $ 9.94 $ 0.36 $ 0.27 $ 0.63 $ (0.36) $ - $ (0.36) $10.21
10/31/2002 9.99 0.40 0.02 0.42 (0.41) (0.06) (0.47) 9.94
10/31/2001 9.26 0.47 0.71 1.18 (0.45) - (0.45) 9.99
10/31/2000 9.46 0.57 (0.19) 0.38 (0.58) - (0.58) 9.26
10/31/1999 9.84 0.54 (0.38) 0.16 (0.54) - (0.54) 9.46
- -----------------------------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 9.94 0.30 0.25 0.55 (0.29) - (0.29) 10.20
10/31/2002 9.99 0.34 0.02 0.36 (0.35) (0.06) (0.41) 9.94
10/31/2001 9.26 0.37 0.74 1.11 (0.38) - (0.38) 9.99
10/31/2000 9.46 0.51 (0.19) 0.32 (0.52) - (0.52) 9.26
10/31/1999 9.83 0.49 (0.38) 0.11 (0.48) - (0.48) 9.46
- -----------------------------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 9.94 0.30 0.25 0.55 (0.29) - (0.29) 10.20
10/31/2002 9.99 0.35 0.01 0.36 (0.35) (0.06) (0.41) 9.94
10/31/2001 9.26 0.41 0.70 1.11 (0.38) - (0.38) 9.99
10/31/2000 9.46 0.51 (0.19) 0.32 (0.52) - (0.52) 9.26
- -----------------------------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 9.98 0.29 0.22 0.51 (0.29) - (0.29) 10.20
- -----------------------------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 9.94 0.31 0.25 0.56 (0.30) - (0.30) 10.20
10/31/2002 9.99 0.36 0.01 0.37 (0.36) (0.06) (0.42) 9.94
10/31/2001 9.26 0.42 0.70 1.12 (0.39) - (0.39) 9.99
10/31/2000 9.46 0.52 (0.19) 0.33 (0.53) - (0.53) 9.26
10/31/1999 9.84 0.49 (0.38) 0.11 (0.49) - (0.49) 9.46
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
-----------------------------------------------------------------------
Ratio of Expenses
Net Assets, to Average Net Investment
For the End of Net Assets (a) Income (Loss) Portfolio
Period Total Period ----------------------- to Average Turnover
Ended (g) Return (c) (000's) Net (e) Total (f) Net Assets (a) Rate (b)
- ---------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 6.39% $ 87,898 1.49% 1.50% 3.56% 164%
10/31/2002 4.45 61,815 1.62 1.65 4.23 245
10/31/2001 13.14 29,600 1.68 1.70 4.84 315
10/31/2000 4.10 16,530 1.84 1.87 6.17 166
10/31/1999 1.70 14,963 1.85 2.00 5.72 100
- ---------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 5.59 69,502 2.14 2.15 2.91 164
10/31/2002 3.83 67,220 2.27 2.30 3.58 245
10/31/2001 12.28 40,435 2.33 2.35 4.19 315
10/31/2000 3.46 14,008 2.49 2.51 5.52 166
10/31/1999 1.01 9,006 2.50 2.65 5.07 100
- ---------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 5.59 14,192 2.14 2.15 2.91 164
10/31/2002 3.83 17,391 2.27 2.30 3.58 245
10/31/2001 12.28 11,246 2.33 2.35 4.19 315
10/31/2000 3.46 8,169 2.49 2.51 5.52 166
- ---------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 5.16 8,178 2.14 2.15 2.91 164
- ---------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 5.69 12,573 2.04 2.05 3.01 164
10/31/2002 3.93 15,952 2.17 2.20 3.68 245
10/31/2001 12.40 14,745 2.23 2.25 4.29 315
10/31/2000 3.56 6,220 2.39 2.41 5.62 166
10/31/1999 1.11 3,778 2.40 2.55 5.17 100
- ---------------------------------------------------------------------------------------------------------------
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Janus Flexible Income 12
IDEX Janus Flexible Income
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (continued)
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 are not annualized.
(d) Per share information is calculated based on average number of shares
outstanding for the periods ended 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 (see note 2).
(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 Fund's offering of share classes C and L are as
follows:
Class C - November 1, 1999
Class L - November 11, 2002
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Janus Flexible Income 13
IDEX Janus Flexible Income
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
At October 31, 2003
(all amounts in thousands)
NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
IDEX Mutual Funds is a Massachusetts business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company. IDEX Janus Flexible Income ("the Fund"), part of
IDEX Mutual Funds, began operations on June 29, 1987.
In the normal course of business the Fund enters into contracts that contain a
variety of representations and warranties which provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown, as this would involve future claims that may be made against the Fund
and/or its affiliates that have not yet occurred. However, based on experience,
the Fund expects the risk of loss to be remote.
See the Prospectus and Statement of Additional Information for a description of
the Fund's investment objective.
In preparing the Fund's financial statements in accordance with accounting
principles generally accepted in the United States of America ("GAAP"),
estimates or assumptions (which could differ from actual results) may be used
that affect reported amounts and disclosures. The following policies were
consistently followed by the Fund, in accordance with GAAP.
Multiple class operations and expenses: The Fund currently offers five classes
of shares, each with a public offering price that reflects different sales
charges, if any, and expense levels. Effective November 11, 2002, Class C and M
shares were closed to new investors. Income, non-class specific expenses and
realized and unrealized gains and losses, are allocated daily to each class,
based upon the value of shares outstanding method as permitted under Rule 18f-3
of the 1940 Act. Each class bears its own specific expenses as well as a
portion of general, common expenses.
Security valuations: Fund investments traded on an exchange are valued at the
closing price on the day of valuation on the exchange where the security is
principally traded. With respect to securities traded on the NASDAQ INMS, such
closing price may be the last reported sales price or the NASDAQ Official
Closing Price.
Debt securities are valued by independent pricing services; however, those that
mature in sixty days or less are valued at amortized cost, which approximates
market.
Other securities for which quotations are not readily available are valued at
fair value determined in good faith, in accordance with procedures established
by and, under the supervision of the Board of Trustees and the Fund's Valuation
Committee.
Cash: The Fund may leave cash overnight in its cash account with the custodian,
Investors Bank & Trust Company ("IBT"). IBT has been contracted on behalf of
the Fund to invest the excess cash into a savings account, which at October 31,
2003, was paying an interest rate of 0.75%.
Securities lending: The Fund may lend securities to enhance fund earnings from
investing cash collateral received in making such loans to qualified borrowers
(typically broker/dealers). The Fund has engaged its custodian bank, IBT, as a
lending agent to administer its securities lending program. IBT earned $29 of
program net income for its services. When the Fund makes a security loan, it
receives cash collateral as protection against risk that the borrower will
default on the loan, and records an asset for the cash invested collateral and
a liability for the return of the collateral.
Securities on loan are included in Investment securities at value on the
Statement of Assets and Liabilities and remain on the Schedule of Investments.
Loans of securities are required to be secured by collateral at least equal to
102% of the value of the securities at inception of the loan, and not less then
100% thereafter. The Fund may invest cash collateral in short-term money market
instruments including: U.S. Treasury Bills, U.S. agency obligations, commercial
paper, money market mutual funds, repurchase agreements and other highly rated,
liquid investments. During the life of securities loans, the collateral and
securities loaned remain subject to fluctuation in value. IBT marks to market
securities loaned and the collateral each business day. If additional
collateral is due (at least $1), IBT collects additional cash collateral from
the borrowers. Although securities loaned will be fully collateralized at all
times, IBT may experience delays in, or may be prevented from, recovering the
collateral on behalf of the Fund. The Fund may recall a loaned security
position at any time from the borrower through IBT. In the event the borrower
fails to timely return a recalled security, IBT may indemnify the Fund by
purchasing replacement securities for the Fund at its own expense and claiming
the collateral to fund such a purchase. IBT absorbs the loss if the collateral
value is not sufficient to cover the cost of the replacement securities. If
replacement securities are not available, IBT will credit the equivalent cash
value to the Fund.
Income from securities lending is included in the Statement of Operations. The
amount of collateral and value of securities on loan are included in the
Statement of Assets and Liabilities as well as on the Schedule of Investments.
Security transactions and investment income: Security transactions are recorded
on the trade date. Security gains and losses are calculated on the specific
identification basis. Dividend income is recorded on the ex-dividend date or,
in the case of foreign securities, as soon as the Fund is informed of the
ex-dividend date. Interest income, including accretion of discounts and
amortization of premiums, is recorded on the accrual basis commencing on the
settlement date.
Foreign currency denominated investments: The accounting records of the Fund
are maintained in U.S. dollars. Securities and other assets and liabilities
denominated in foreign currencies are translated into
IDEX Mutual Funds Annual Report 2003
IDEX Janus Flexible Income 14
IDEX Janus Flexible Income
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 1-(continued)
U.S. dollars at the closing exchange rate each day. The cost of foreign
securities is translated at the exchange rate in effect when the investment was
acquired. The Fund combines fluctuations from currency exchange rates and
fluctuations in value when computing net realized and unrealized gains or
losses from investments.
Net foreign currency gains and losses resulting from changes in exchange rates
include: 1) foreign currency fluctuations between trade date and settlement
date of investment security transactions; 2) gains and losses on forward
foreign currency contracts; and 3) the difference between the receivable
amounts of interest and dividends recorded in the accounting records in U.S.
dollars and the amounts actually received.
Foreign currency denominated assets may involve risks not typically associated
with domestic transactions, including unanticipated movements in exchange
currency rates, the degree of government supervision and regulation of security
markets, and the possibility of political or economic instability.
Forward foreign currency contracts: The Fund may enter into forward foreign
currency contracts to hedge against exchange rate risk arising from investments
in securities denominated in foreign currencies. Contracts are valued at the
contractual forward rate and are marked to market daily, with the change in
value recorded as an unrealized gain or loss. When the contracts are closed a
realized gain or loss is incurred. Risks may arise from changes in value of the
underlying currencies and from the possible inability of counterparties to meet
the terms of their contracts. Open forward currency contracts at October 31,
2003, are listed in the Schedule of Investments.
Futures contracts: The Fund may enter into futures contracts to manage exposure
to market, interest rate or currency fluctuations. Futures contracts are valued
at the settlement price established each day by the board of trade or exchange
on which they are traded. The primary risks associated with futures contracts
are imperfect correlation between the change in value of the securities held
and the prices of futures contracts; the possibility of an illiquid market and
inability of the counterparty to meet the contract terms.
The underlying face amounts of open futures contracts at October 31, 2003, are
listed in the Schedule of Investments. The variation margin payable, is
included in the accompanying Statement of Assets and Liabilities. Variation
margin payable represents the additional payments due in order to maintain the
equity account at the required margin level.
Dividend distributions: Distributions to shareholders are recorded on the
ex-dividend date and are determined in accordance with Federal income tax
regulations which may differ from GAAP.
NOTE 2. RELATED PARTY TRANSACTIONS
AEGON/Transamerica Fund Advisers, Inc. ("ATFA") is the Fund's investment
adviser. AEGON/Transamerica Fund Services, Inc. ("ATFS") is the Fund's
administrator. AFSG Securities Corp. ("AFSG") is the Fund's
distributor/principal underwriter. AEGON/Transamerica Investor Services, Inc.
("ATIS") is the 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. AUSA and WRL are wholly owned indirect
subsidiaries of AEGON NV, a Netherlands corporation.
The following schedule reflects the percentage of fund assets owned by
affiliated mutual funds (ie: through the assets allocation funds)
Net % of
Assets Net Assets
-------- -----------
IDEX Asset Allocation
Conservative Portfolio 13,786 7%
IDEX Asset Allocation Moderate
Growth 13,474 7%
IDEX Asset Allocation Moderate 22,785 12%
-----------
26%
Investment advisory fees: The Fund pays management fees to ATFA based on
average daily net assets ("ANA") at the following stated break points from
November 1, 2002 to February 28, 2003:
0.90% of the first $100 million of ANA
0.80% of the next $150 million of ANA
0.70% of ANA over $250 million
From March 1, 2003 on:
0.875% of the first $100 million of ANA
0.775% of the next $150 million of ANA
0.675% of ANA over $250 million
From November 1, 2002 until February 28, 2003, ATFA currently voluntarily
waives its advisory fee and will reimburse the Fund to the extent that
operating expenses, excluding 12b-1 fees, exceed the following stated annual
limit:
1.50% Expense Limit
ATFA waived additional advisory fees as follows: .025% of average daily net
assets for the first $100 million (net .875%); 0.25% from $100-$250 million
(net .775%); and .025% over $250 million (net .675%).
If total fund expenses fall below the annual expense limitations agreed to by
the adviser within the succeeding three years, the Fund may be required to pay
the advisor a portion or all of the waived advisory fees.
IDEX Mutual Funds Annual Report 2003
IDEX Janus Flexible Income 15
IDEX Janus Flexible Income
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 2-(continued)
Distribution and service fees: The Fund has a 12b-1 distribution plan under the
1940 Act pursuant to which an annual fee, based on average daily net assets, is
paid to the distributor for various disbursements such as broker-dealer account
servicing fees and other promotional expenses of the Fund. The 12b-1 fee for
the Fund is comprised of a 0.25% service fee and the remaining amount is an
asset-based sales charge/distribution fee. The Fund is authorized under the
12b-1 plan to pay fees on each class up to the following limits:
Class A 0.35%
Class B 1.00%
Class C 1.00%
Class L 1.00%
Class M 0.90%
Underwriter commissions relate to front-end sales charges imposed for Class A
and M shares and contingent deferred sales charges from Classes B, L, M and
certain A share redemptions. For the year ended October 31, 2003, the
underwriter commissions were as follows:
Received by Underwriter $ 305
Retained by Underwriter 31
Contingent Sales Charges 325
Administrative services: The Fund has entered into an agreement with ATFS for
financial and legal fund administration services, which include such items as
compliance, expenses, financial statements and other reporting, distributions,
tax returns, prospectus preparation, board of trustees meeting support and
other legal matters. Transfer agent fees are reflected separately from
Administration fees on the Statement of Operations. The Legal fees on the
Statement of Operations are for fees paid to external legal counsel. ATFS
provides its services to the Fund at cost and is reimbursed monthly.
Transfer agent fees: The Fund incurs ATIS annual per-account charges (not in
thousands) of $20.00 for each open shareholder account and $1.63 for each
closed account maintained, and certain out of pocket expenses.
Deferred compensation plan: Each eligible Fund Trustee may elect participation
in the Deferred Compensation Plan ("the Plan"). Under the Plan, such Trustees
may defer payment of a percentage of their total fees earned as a Fund Trustee.
These deferred amounts may be invested in any IDEX Fund. At October 31, 2003,
the value of invested plan amounts was $7. Invested plan amounts and the total
liability for deferred compensation to the Trustees under the Plan at October
31, 2003, are included in Net assets in the accompanying Statement of Assets
and Liabilities.
NOTE 3. INVESTMENT TRANSACTIONS
The cost of securities purchased and proceeds from securities sold (excluding
short-term securities) for the year ended October 31, 2003, were as follows:
Purchases of securities:
Long-Term excluding U.S. Government $ 171,518
U.S. Government 173,810
Proceeds from maturities and sales of securities:
Long-Term excluding U.S. Government 126,522
U.S. Government 184,811
NOTE 4. FEDERAL INCOME TAX MATTERS
The Fund has not made any provision for federal income or excise taxes due to
its policy to distribute all of its taxable income and capital gains to its
shareholders and otherwise qualify as a regulated investment company under the
Internal Revenue Code. Income and capital gain distributions are determined in
accordance with income tax regulations, which may differ from GAAP. These
differences are primarily due to differing treatments for items including, but
not limited to, wash sales, foreign currency transactions and capital loss
carryforwards.
Reclassifications between Undistributed net investment income (loss),
Undistributed net realized capital gains (loss) and Shares of beneficial
interest are made to reflect income and gains available for distribution under
federal tax regulations. Results of operations and net assets are not effected
by these reclassifications. These reclassifications are as follows:
Shares of beneficial interest, unlimited
shares authorized $ -
Undistributed net investment income (loss) 20
Undistributed net realized gain (loss) from
investment, future contracts and foreign
currency transactions (20)
The tax character of distributions paid may differ from the character of
distributions shown in the Statements of Changes in Net Assets
primarily due to short-term gains being treated as ordinary income for tax
purposes. The tax character of distributions paid during 2002 and 2003 was as
follows:
2002 Distributions paid from:
Ordinary income $ 4,727
Long-term capital gains 12
2003 Distributions paid from:
Ordinary income $ 6,290
Long-term capital gains -
IDEX Mutual Funds Annual Report 2003
IDEX Janus Flexible Income 16
IDEX Janus Flexible Income
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 4-(continued)
The tax basis components of distributable earnings as of October 31, 2003, are
as follows:
Undistributed Ordinary Income $ 2,070
=======
Undistributed Long-term Capital Gains $ 1,093
=======
Net Unrealized Appreciation (Depreciation) $ 6,698
=======
The capital loss carryforward utilized as of October 31, 2003 was $565. The
aggregate cost of investments and composition of unrealized appreciation
(depreciation) for federal income tax purposes as of October 31, 2003, are as
follows:
Federal Tax Cost Basis $ 223,582
=========
Unrealized Appreciation $ 7,389
Unrealized (Depreciation) (691)
---------
Net Unrealized Appreciation (Depreciation) $ 6,698
=========
Supplemental Tax Information
(unaudited)
For tax purposes, the Fund has made a Long-Term capital Gain Designation of
$0.05999 per share for the year ended October 31, 2003.
For dividends paid during the year ended October 31, 2003, the Fund designates
qualified dividend income to the maximum extent allowable.
For corporate shareholders, 1% of investment income (dividend income plus
short-term gains, if any) qualifies for the dividends received deduction.
The information and distributions reported herein may differ from the
information and distributions taxable to the shareholders for the calendar year
ending December 31, 2003. Complete information will be computed and reported in
conjunction with your 2003 Form 1099-DIV.
IDEX Mutual Funds Annual Report 2003
IDEX Janus Flexible Income 17
- --------------------------------------------------------------------------------
Report of Independent Certified Public Accountants
To the Board of Trustees and Shareholders of
IDEX Janus Flexible Income
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of IDEX Janus Flexible Income (the
"Fund") (one of the portfolios constituting the IDEX Mutual Funds) at October
31, 2003, and the results of its operations, the changes in its net assets and
the financial highlights for each of the periods indicated, in conformity with
accounting principles generally accepted in the United States of America. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with auditing standards generally accepted in the United States of America,
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at October 31, 2003 by correspondence with the
custodian and brokers, provide a reasonable basis for our opinion.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Tampa, Florida
December 18, 2003
IDEX Mutual Funds Annual Report 2003
IDEX Janus Flexible Income 18
IDEX Janus Global
- --------------------------------------------------------------------------------
MARKET ENVIRONMENT
Mirroring equity markets in the U.S., foreign markets closed out the fiscal
year higher. The fiscal year started on a positive note as most international
stock markets staged a comeback after stumbling to multi-year 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 fiscal year, 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 fiscal year up 19.50% and the broad-based
Standard and Poor's 500 Composite Stock 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 returned 12.33%. By
comparison its benchmark, the MSCI Index, 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 Time Warner Inc., formerly AOL Time
Warner Inc.
Q. Which sectors had the greatest impact on the Fund's performance?
Our focus remains on seeking 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 portfolio, 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 portfolio'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. Japan 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.
/s/ Laurence Chang
Laurence Chang
Fund Manager
Janus Capital Management LLC
IDEX Mutual Funds Annual Report 2003
IDEX Janus Global 1
IDEX Janus Global
- --------------------------------------------------------------------------------
Comparison of change in value of $10,000 investment in Class A shares and its
comparative index.
Growth of $10,000
Inception of 10/31/93 through 10/31/03
Investment less sales charges - $9,452
[The following table was depicted as a mountain chart in the printed material.]
DATE Class A MSCIW
- ------------------ ---------------- -----------
10/31/1993 9,452 10,000
12/31/1993 10,270 9,899
3/31/1994 10,066 9,971
6/30/1994 9,921 10,283
9/30/1994 10,501 10,516
12/31/1994 10,334 10,452
3/31/1995 10,184 10,955
6/30/1995 11,264 11,436
9/30/1995 12,126 12,090
12/31/1995 12,400 12,680
3/31/1996 13,902 13,211
6/30/1996 14,936 13,609
9/30/1996 15,163 13,807
12/31/1996 15,724 14,454
3/31/1997 16,602 14,512
6/30/1997 18,615 16,713
9/30/1997 19,618 17,207
12/31/1997 18,934 16,800
3/31/1998 22,043 19,223
6/30/1998 23,753 19,631
9/30/1998 19,947 17,295
12/31/1998 23,641 20,966
3/31/1999 25,059 21,732
6/30/1999 26,373 22,788
9/30/1999 26,940 22,468
12/31/1999 38,609 26,278
3/31/2000 43,175 26,567
6/30/2000 39,156 25,644
9/30/2000 36,877 24,374
12/31/2000 31,767 22,884
3/31/2001 26,219 19,960
6/30/2001 27,343 20,514
9/30/2001 21,612 17,580
12/31/2001 24,293 19,103
3/31/2002 24,038 19,185
6/30/2002 20,978 17,459
9/30/2002 17,164 14,265
12/31/2002 17,730 15,370
3/31/2003 16,182 14,610
6/30/2003 18,770 17,130
9/30/2003 19,147 17,976
10/31/2003 20,219 19,046
Average Annual Total Return for Periods Ended 10/31/03
- --------------------------------------------------------------------------------
From Inception
1 year 5 years 10 years 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 International World (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 Micropal(R)(C) 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 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.
This material must be preceded or accompanied by a current prospectus, which
includes specific contents regarding the investment objectives and policies of
this fund.
IDEX Mutual Funds Annual Report 2003
IDEX Janus Global 2
IDEX Janus Global
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
At October 31, 2003
(all amounts except share amounts in thousands)
Shares Value
- ------------------------------------------------------------------------------------
PREFERRED STOCKS (0.5%)
Australia (0.5%)
News Corporation Limited (The) 260,531 $ 1,914
---------
Total Preferred Stocks (cost: $1,653) 1,914
---------
COMMON STOCKS (95.0%)
Australia (0.6%)
News Corporation Limited (The) 172,151 1,531
Rio Tinto Limited 36,746 928
Bermuda (2.6%)
Tyco International Ltd. (b) 435,840 9,100
Willis Group Holdings Limited (b) 49,475 1,648
Brazil (0.9%)
Companhia Vale do Rio Doce-ADR 85,095 3,893
Canada (1.4%)
Canadian Natural Resources Ltd. 44,961 1,911
EnCana Corporation (b) 88,204 3,031
Suncor Energy Inc. 46,056 968
Finland (0.3%)
Nokia Oyj 75,670 1,286
France (3.6%)
Aventis SA 23,113 1,225
Credit Agricole SA 56,324 1,197
Credit Agricole SA-Rights,
Expires 11/07/2003 (b) 56,324 13
LVMH Moet Hennessy Louis Vuitton SA 97,979 6,778
Sanofi-Synthelabo 57,771 3,580
Total Fina Elf SA 13,535 2,106
Germany (1.0%)
Altana AG 6,466 408
Deutsche Telekom AG (a)(b) 154,146 2,430
SAP AG 10,198 1,480
Hong Kong (3.7%)
Cheung Kong (Holdings) Limited 137,000 1,142
China Mobile (Hong Kong) Limited 1,895,300 5,382
CNOOC Limited 1,875,875 3,539
Hutchison Whampoa Limited 278,000 2,157
PICC Property and Casualty Company
Limited-H Shares 388,000 91
Sun Hung Kai Properties Limited 358,000 3,031
India (3.5%)
Infosys Technologies Limited 34,049 3,562
Reliance Industries Limited-GDR-144A (b) 397,897 9,510
Tata Iron and Steel Company Limited 175,368 1,387
Israel (1.3%)
Check Point Software Technologies, Ltd. (a) 198,435 3,371
Teva Pharmaceutical Industries Ltd.-ADR (b) 38,625 2,197
Italy (0.9%)
Banca Intesa SpA 331,115 $ 1,117
UniCredito Italiano SpA 498,213 2,456
Japan (13.9%)
Canon Inc. 134,000 6,490
Chugai Pharmaceutical Co., Ltd. 82,900 1,182
FANUC LTD 30,300 1,823
Hirose Electric Co., Ltd. 11,000 1,353
Honda Motor Co., Ltd. 53,200 2,102
Ito-Yokado Co., Ltd. 49,000 1,802
Kao Corporation 147,165 3,028
Komatsu Ltd. 404,000 2,188
Matsushita Electric Works, Ltd. 110,000 827
Millea Holdings, Inc. 154 1,837
Mitsubishi Corporation 77,000 800
Mitsubishi Estate Company, Limited 120,000 1,151
Mitsubishi Tokyo Financial Group, Inc. 1,097 7,890
NEC Electronics Corporation (a) 21,000 1,617
Nikko Cordial Corporation 422,000 2,278
Nitto Denko Corporation 36,500 1,917
Nomura Securities Co., Ltd. (The) 325,000 5,586
NTT DoCoMo, Inc. 1,189 2,576
Omron Corporation 89,500 1,964
Pioneer Corporation 72,500 1,809
Rohm Company, Ltd. 11,900 1,606
Sumitomo Mitsui Financial Group, Inc. (b) 331 1,666
Tokyo Electron Limited 23,900 1,715
Toyota Motor Corporation 69,000 1,966
Mexico (1.5%)
Grupo Televisa SA de CV-ADR 117,550 4,555
Wal-Mart de Mexico SA de CV-Series V 652,100 1,819
Netherlands (2.0%)
ING Groep NV 181,803 3,778
STMicroelectronics NV 168,121 4,480
Russia (1.8%)
Lukoil Oil Company-ADR (a) 30,105 2,453
Mining and Metallurgical Company
Norilsk Nickel-ADR (b) 21,142 1,089
YUKOS Oil Company-ADR (b) 82,824 3,744
Singapore (1.0%)
DBS Group Holdings Ltd. 497,000 4,085
South Korea (5.1%)
Kookmin Bank 49,310 1,801
POSCO 16,770 1,956
Samsung Electronics Co., Ltd. 41,105 16,331
SK Telecom Co., Ltd. 4,850 857
Sweden (0.7%)
Atlas Copco AB-A Shares 83,821 2,949
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Janus Global 3
IDEX Janus Global
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Shares Value
- ---------------------------------------------------------------------------------
Switzerland (7.8%)
Credit Suisse Group 198,430 $ 7,000
Givaudan SA-Registered Shares 3,897 1,759
Roche Holding AG 148,588 12,310
Serono SA-Class B 2,592 1,792
UBS AG-Registered Shares 151,269 9,300
Taiwan (2.0%)
China Steel Corporation GDR-144A 110,000 1,774
Chughwa Telecom Co., Ltd.-ADR 84,970 1,315
United Microelectronics
Corporation-ADR (a)(b) 982,890 5,160
United Kingdom (10.1%)
Amdocs Limited (a) 95,105 2,041
British Sky Broadcasting Group PLC (a) 567,979 6,169
Compass Group PLC 596,525 3,439
HSBC Holdings PLC 728,512 10,941
Reckitt Benckiser PLC 126,881 2,670
Rio Tinto PLC-Registered Shares 158,241 3,837
Royal Bank of Scotland Group PLC (The) 78,728 2,110
Standard Chartered PLC 323,979 5,182
Tesco PLC 567,128 2,274
WPP Group PLC 318,678 3,037
United States (29.3%)
Anthem, Inc. (a)(b) 57,090 3,907
Bank of New York Company, Inc. (The) 131,775 4,110
Baxter International Inc. 103,900 2,762
Cendant Corporation (a) 158,500 3,238
Cisco Systems, Inc. (a) 306,915 6,439
Citigroup Inc. 304,285 14,423
Clear Channel Communications, Inc. 60,705 2,478
Dell Computer Corporation (a) 63,965 2,310
Disney (Walt) Company (The) 78,680 1,781
eBay Inc. (a) 18,940 1,060
EOG Resources, Inc. 42,970 1,811
Hewlett-Packard Company 110,765 2,471
Intel Corporation 29,835 986
InterActiveCorp (a)(b) 92,335 3,390
KLA -Tencor Corporation (a)(b) 47,990 2,751
Liberty Media Corporation-Class A (a) 133,089 1,343
Lockheed Martin Corporation 46,910 2,175
Marsh & McLennan Companies, Inc. 6,330 271
McDonald's Corporation 92,135 2,304
Medco Health Solutions, Inc. (a) 88,850 2,950
Medtronic, Inc. 135,620 6,180
Merrill Lynch & Co., Inc. 69,655 4,124
Microsoft Corporation 184,310 4,820
Northern Trust Corporation 35,585 1,653
Northrop Grumman Corporation 28,480 2,546
United States (continued)
SanDisk Corporation (a)(b) 60,980 $ 4,915
Starwood Hotels & Resorts Worldwide, Inc. 41,110 1,387
Texas Instruments Incorporated 104,050 3,009
Time Warner Inc. (a)(b) 729,041 11,147
United Technologies Corporation 42,915 3,634
UnitedHealth Group Incorporated (b) 122,595 6,238
VERITAS Software Corporation (a) 55,800 2,017
Walgreen Co. 52,295 1,821
Xilinx, Inc. (a) 55,445 1,758
Yahoo! Inc. (a) 47,020 2,055
---------
Total Common Stocks (cost: $357,222)
391,899
---------
Principal Value
- --------------------------------------------------------------------
SECURITY LENDING COLLATERAL (15.1%)
Debt (13.3%)
Bank Notes (1.6%)
Canadian Imperial Bank of Commerce
1.12%, due 11/04/2003 $ 2,712 $ 2,712
Fleet National Bank
1.06%, due 01/21/2004 3,796 3,796
Euro Dollar Term (7.5%)
Bank of Montreal
1.03%, due 11/13/2003 2,170 2,170
1.04%, due 11/14/2003 1,905 1,905
Bank of Nova Scotia (The)
1.06%, due 11/12/2003 1,085 1,085
Bank of Scotland
1.04%, due 11/14/2003 2,170 2,170
Citigroup Inc.
1.08%, due 01/05/2004 3,255 3,255
Credit Agricole Indosuez
1.08%, due 01/06/2004 2,387 2,387
Den Danske Bank
1.04%, due 11/10/2003 1,085 1,085
1.08%, due 01/20/2004 3,255 3,255
Royal Bank of Canada
1.04%, due 11/24/2003 2,712 2,712
1.06%, due 12/08/2003 1,085 1,085
Royal Bank of Scotland Group PLC (The)
1.08%, due 01/15/2004 3,255 3,255
SouthTrust Bank
1.08%, due 01/16/2004 3,255 3,255
Wells Fargo & Company
1.04%, due 11/20/2003 3,255 3,255
Promissory Notes (0.9%)
Goldman Sachs Group, Inc. (The)
1.15%, due 11/03/2003 3,796 3,796
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Janus Global 4
IDEX Janus Global
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Principal Value
- -----------------------------------------------------------------------------
Repurchase Agreements (3.3%) (c)
Goldman Sachs Group, Inc. (The)
1.10% Repurchase Agreement
dated 10/31/2003 to be repurchased
at $1,085 on 11/03/2003 $ 1,085 $ 1,085
Merrill Lynch & Co., Inc.
1.10% Repurchase Agreement
dated 10/31/2003 to be repurchased
at $12,476 on 11/03/2003 12,475 12,475
Shares Value
- -----------------------------------------------------------------------------
Investment Companies (1.8%)
Money Market Funds (1.8%)
Merrimac Cash Series Fund-
Premium Class
1-day yield of 0.97% 7,593,834 $ 7,593
---------
Total Security Lending Collateral (cost: $62,331) 62,331
---------
Total Investment Securities (cost: $421,206) $456,144
=========
SUMMARY:
Investments, at value 110.6% $456,144
Liabilities in excess of other assets (10.6)% (43,603)
--------- ---------
Net assets 100.0% $412,541
========= =========
Percentage of
Net Assets Value
-------------- ------------
INVESTMENTS BY INDUSTRY:
Commercial Banks 18.3 % $ 74,944
Electronic Components & Accessories 6.8 % 27,716
Electronic & Other Electric Equipment 6.4 % 25,822
Computer & Office Equipment 5.5 % 22,625
Pharmaceuticals 5.2 % 21,469
Computer & Data Processing Services 4.7 % 19,346
Chemicals & Allied Products 4.4 % 18,350
Telecommunications 4.1 % 17,115
Oil & Gas Extraction 3.8 % 15,564
Motion Pictures 3.5 % 14,592
Insurance 2.9 % 12,073
Security & Commodity Brokers 2.9 % 11,988
Metal Mining 2.4 % 9,747
Medical Instruments & Supplies 2.2 % 8,942
Aerospace 2.0 % 8,355
Beer, Wine & Distilled Beverages 1.6 % 6,778
Business Services 1.6 % 6,575
Radio & Television Broadcasting 1.5 % 6,169
Restaurants 1.4 % 5,743
Real Estate 1.3 % 5,324
Industrial Machinery & Equipment 1.2 % 5,137
Primary Metal Industries 1.2 % 5,117
Drug Stores & Proprietary Stores 1.2 % 4,771
Automotive 1.0 % 4,068
Life Insurance 0.9 % 3,778
Transportation & Public Utilities 0.8 % 3,390
Personal Services 0.8 % 3,238
Electric Services 0.7 % 3,031
Instruments & Related Products 0.7 % 2,751
Food Stores 0.6 % 2,274
Holding & Other Investment Offices 0.5 % 2,157
Insurance Agents, Brokers & Service 0.5 % 1,919
Variety Stores 0.4 % 1,819
Retail Trade 0.4 % 1,802
Amusement & Recreation Services 0.4 % 1,781
Food & Kindred Products 0.4 % 1,759
Hotels & Other Lodging Places 0.3 % 1,387
Communication 0.3 % 1,343
Communications Equipment 0.3 % 1,286
Petroleum Refining 0.2 % 968
Wholesale Trade Durable Goods 0.2 % 800
----- ---------
Investments, at value 95.5 % 393,813
Short-term investments 15.1 % 62,331
Liabilities in excess of other assets (10.6)% (43,603)
----- ---------
Net assets 100.0 % $ 412,541
===== =========
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Janus Global 5
IDEX Janus Global
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
FORWARD FOREIGN CURRENCY CONTRACTS:
- -------------------------------------------------------------------------------
Net
Amount in Unrealized
Bought Settlement U.S. Dollars Appreciation
Currency (Sold) Date Bought (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 --
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
--------- -------
$ 748 $ (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 (see Note
1). The value at October 31, 2003, of all securities on loan is $60,073.
(c) Cash collateral for the Repurchase Agreements, valued at $13,832, 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
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 financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Janus Global 6
IDEX Janus Global
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
At October 31, 2003
(all amounts except per share amounts in thousands)
Assets:
Investment securities, at value (cost: $421,206)
(including $60,073 of securities loaned) $ 456,144
Cash 22,864
Receivables:
Investment securities sold 2,325
Shares of beneficial interest sold 39
Interest 5
Dividends 457
Dividend reclaims receivable 465
Unrealized appreciation on forward foreign
currency contracts 28
Other 126
---------
482,453
---------
Liabilities:
Investment securities purchased 4,488
Accounts payable and accrued liabilities:
Shares of beneficial interest redeemed 1,783
Management and advisory fees 361
Distribution fees 247
Transfer agent fees 320
Payable for securities on loan 62,331
Unrealized depreciation on forward foreign
currency contracts 49
Other 333
---------
69,912
---------
Net Assets $ 412,541
=========
Net Assets Consist of:
Shares of beneficial interest, unlimited shares authorized $ 824,018
Accumulated net investment income (loss) (100)
Accumulated net realized gain (loss) from investments
and foreign currency transactions (446,349)
Net unrealized appreciation (depreciation) on:
Investment securities 34,916
Translation of assets and liabilities denominated in
foreign currencies 56
---------
Net Assets $ 412,541
=========
Shares Outstanding:
Class A 8,829
Class B 7,556
Class C 913
Class L 8
Class M 2,550
Net Asset Value Per Share:
Class A $ 21.41
Class B 20.25
Class C 20.25
Class L 20.25
Class M 20.31
Maximum Offering Price Per Share (a):
Class A $ 22.66
Class M 20.52
(a) 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.
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the year ended October 31, 2003
(all amounts in thousands)
Investment Income:
Interest $ 93
Dividends 8,694
Income from loaned securities-net 182
Less withholding taxes on foreign dividends (764)
---------
8,205
---------
Expenses:
Management and advisory fees 4,544
Transfer agent fees 2,217
Printing and shareholder reports 373
Custody fees 419
Administration fees 37
Legal fees 31
Auditing and accounting fees 40
Trustees fees 37
Registration fees 79
Other 33
Distribution and service fees:
Class A 704
Class B 1,678
Class C 220
Class L 3
Class M 568
---------
Total expenses 10,983
---------
Net Investment Income (Loss) (2,778)
---------
Net Realized Gain (Loss) from:
Investment securities (49,641)
Foreign currency transactions (7,838)
---------
(57,479)
---------
Net Increase (Decrease) in Unrealized Appreciation
(Depreciation) on:
Investment securities 104,095
Translation of assets and liabilities denominated in
foreign currencies 2,357
---------
106,452
---------
Net Gain (Loss) on Investments and Foreign Currency
Transactions 48,973
---------
Net Increase (Decrease) in Net Assets Resulting
from Operations $ 46,195
=========
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Janus Global 7
IDEX Janus Global
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended
(all amounts in thousands)
October 31, October 31,
2003 2002
--------------- ---------------
Increase (Decrease) In Net Assets From:
Operations:
Net investment income (loss) $ (2,778) $ (6,417)
Net realized gain (loss) from investment
securities and foreign currency
transactions (57,479) (197,564)
Net unrealized appreciation
(depreciation) on investment
securities and foreign currency
translations 106,452 60,154
--------- ---------
46,195 (143,827)
--------- ---------
Distributions to Shareholders:
From net investment income:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
--------- ---------
- -
--------- ---------
From net realized gains:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
--------- ---------
- -
--------- ---------
Capital Share Transactions:
Proceeds from shares sold:
Class A 75,695 16,741
Class B 5,156 8,893
Class C 776 2,168
Class L 3,270 -
Class M 1,937 2,658
--------- ---------
86,834 30,460
--------- ---------
Dividends and distributions reinvested:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
--------- ---------
- -
--------- ---------
Cost of shares redeemed:
Class A (134,273) (105,301)
Class B (61,709) (82,205)
Class C (11,577) (21,413)
Class L (3,225) -
Class M (33,901) (52,127)
--------- ---------
(244,685) (261,046)
--------- ---------
(157,851) (230,586)
--------- ---------
Net increase (decrease) in net assets (111,656) (374,413)
--------- ---------
Net Assets:
Beginning of year 524,197 898,610
--------- ---------
End of year $ 412,541 $ 524,197
========= =========
Accumulated Net Investment Income (Loss) $ (100) $ (94)
========= =========
Share Activity:
Shares issued:
Class A 3,964 744
Class B 285 399
Class C 43 97
Class L 176 -
Class M 107 118
--------- ---------
4,575 1,358
--------- ---------
Shares issued-reinvested from distributions:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
--------- ---------
- -
--------- ---------
Shares redeemed:
Class A (6,977) (4,726)
Class B (3,380) (3,863)
Class C (636) (977)
Class L (168) -
Class M (1,842) (2,391)
--------- ---------
(13,003) (11,957)
--------- ---------
Net increase (decrease) in shares
outstanding (8,428) (10,599)
========= =========
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Janus Global 8
IDEX Janus Global
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share of beneficial interest outstanding throughout each period
------------------------------------------------------------------------------------------------------------
Investment Operations Distributions
------------------------------------------- -------------------------------------
Net Asset Net Asset
For the Value, Net Net Realized From Net From Net Value,
Period Beginning Investment and Unrealized Total Investment Realized Total End
Ended (d)(g) of Period Income (Loss) Gain (Loss) Operations Income Gains Distributions of Period
- ------------------------------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 $19.06 $ (0.05) $ 2.40 $ 2.35 $ - $ - $ - $21.41
10/31/2002 23.67 (0.08) (4.53) (4.61) - - - 19.06
10/31/2001 40.20 (0.07) (13.99) (14.06) - (2.47) (2.47) 23.67
10/31/2000 33.80 - 7.53 7.53 - (1.13) (1.13) 40.20
10/31/1999 24.09 0.22 9.49 9.71 - - - 33.80
- ------------------------------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 18.14 (0.17) 2.28 2.11 - - - 20.25
10/31/2002 22.71 (0.22) (4.35) (4.57) - - - 18.14
10/31/2001 38.97 (0.27) (13.52) (13.79) - (2.47) (2.47) 22.71
10/31/2000 32.98 (0.41) 7.53 7.12 - (1.13) (1.13) 38.97
10/31/1999 23.62 (0.13) 9.49 9.36 - - - 32.98
- ------------------------------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 18.14 (0.17) 2.28 2.11 - - - 20.25
10/31/2002 22.72 (0.22) (4.36) (4.58) - - - 18.14
10/31/2001 38.98 (0.27) (13.52) (13.79) - (2.47) (2.47) 22.72
10/31/2000 32.98 (0.40) 7.53 7.13 - (1.13) (1.13) 38.98
- ------------------------------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 18.00 (0.17) 2.42 2.25 - - - 20.25
- ------------------------------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 18.18 (0.15) 2.28 2.13 - - - 20.31
10/31/2002 22.72 (0.20) (4.34) (4.54) - - - 18.18
10/31/2001 38.94 (0.24) (13.51) (13.75) - (2.47) (2.47) 22.72
10/31/2000 32.91 (0.37) 7.53 7.16 - (1.13) (1.13) 38.94
10/31/1999 23.56 (0.14) 9.49 9.35 - - - 32.91
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
-----------------------------------------------------------------------
Ratio of Expenses
Net Assets, to Average Net Investment
For the End of Net Assets (a) Income (Loss) Portfolio
Period Total Period ----------------------- to Average Turnover
Ended (g) Return (c) (000's) Net (e) Total (f) Net Assets (a) Rate (b)
- ---------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 12.33% $ 189,046 2.07% 2.07% (0.26)% 103%
10/31/2002 (19.46) 225,722 1.88 1.88 (0.34) 72
10/31/2001 (37.08) 374,626 1.63 1.63 (0.24) 79
10/31/2000 22.26 749,671 1.64 1.64 (0.56) 53
10/31/1999 40.31 487,787 1.73 1.73 (0.22) 145
- ---------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 11.57 153,046 2.72 2.72 (0.91) 103
10/31/2002 (20.09) 193,259 2.53 2.53 (0.99) 72
10/31/2001 (37.58) 320,693 2.28 2.28 (0.89) 79
10/31/2000 21.62 614,789 2.29 2.29 (1.21) 53
10/31/1999 39.62 283,847 2.38 2.38 (0.87) 145
- ---------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 11.57 18,495 2.72 2.72 (0.91) 103
10/31/2002 (20.09) 27,332 2.53 2.53 (0.99) 72
10/31/2001 (37.58) 54,221 2.28 2.28 (0.89) 79
10/31/2000 21.62 116,071 2.29 2.29 (1.21) 53
- ---------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 12.50 163 2.72 2.72 (0.92) 103
- ---------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 11.72 51,791 2.62 2.62 (0.81) 103
10/31/2002 (20.00) 77,884 2.43 2.43 (0.89) 72
10/31/2001 (37.48) 149,070 2.18 2.18 (0.79) 79
10/31/2000 21.72 306,667 2.19 2.19 (1.11) 53
10/31/1999 39.73 155,147 2.28 2.28 (0.77) 145
- ---------------------------------------------------------------------------------------------------------------
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Janus Global 9
IDEX Janus Global
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (continued)
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 are not annualized.
(d) Per share information is calculated based on average number of shares
outstanding for the periods ended 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 (see note 2).
(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 Fund's offering of share classes C and L are as
follows:
Class C - November 1, 1999
Class L - November 11, 2002
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Janus Global 10
IDEX Janus Global
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
At October 31, 2003
(all amounts in thousands)
NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
IDEX Mutual Funds is a Massachusetts business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company. IDEX Janus Global ("the Fund"), part of IDEX
Mutual Funds, began operations on October 1, 1992.
In the normal course of business, the Fund enters into contracts that contain a
variety of representations and warranties and which provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown, as this would involve future claims that may be made against the Fund
and/or its affiliates that have not yet occurred. However, based on experience,
the Fund expects the risk of loss to be remote.
See the Prospectus and Statement of Additional Information for a description of
the Fund's investment objective.
In preparing the Fund's financial statements in accordance with accounting
principles generally accepted in the United States of America ("GAAP"),
estimates or assumptions (which could differ from actual results) may be used
that affect reported amounts and disclosures. The following policies were
consistently followed by the Fund, in accordance with GAAP.
Multiple class operations and expenses: The Fund currently offers five classes
of shares, each with a public offering price that reflects different sales
charges, if any, and expense levels. Effective November 11, 2002, Class C and M
shares were closed to new investors. Income, non-class specific expenses and
realized and unrealized gains and losses, are allocated daily to each class,
based upon the value of shares outstanding method as permitted under Rule 18f-3
of the 1940 Act. Each class bears its own specific expenses as well as a
portion of general, common expenses.
Security valuations: Fund investments traded on an exchange are valued at the
closing price on the day of valuation on the exchange where the security is
principally traded. With respect to securities traded on the NASDAQ INMS, such
closing price may be the last reported sales price or the NASDAQ Official
Closing Price.
Securities traded in the over-the-counter market and listed securities for
which no sale was reported on that date are valued at the last quoted bid
price.
Debt securities are valued by independent pricing services; however, those that
mature in sixty days or less are valued at amortized cost, which approximates
market.
Other securities for which quotations are not readily available are valued at
fair value determined in good faith, in accordance with procedures established
by and, under the supervision of the Board of Trustees and the Fund's Valuation
Committee.
Cash: The Fund may leave cash overnight in its cash account with the custodian,
Investors Bank & Trust Company ("IBT"). IBT has been contracted on behalf of
the Fund to invest the excess cash into a savings account, which at October 31,
2003, was paying an interest rate of 0.75%.
Directed brokerage: The sub-adviser, to the extent consistent with the best
execution and usual commission rate policies and practices, may place security
transactions of the Fund with broker/dealers with which IDEX Mutual Funds has
established a Directed Brokerage Program. A Direct Brokerage Program is any
arrangement under which a broker/dealer applies a portion of the commissions
received by such broker/ dealer on the security transactions to the Fund. In no
event will commissions paid by the Fund be used to pay expenses that would
otherwise be borne by any other funds within IDEX Mutual Funds, or by any other
party. Directed commissions during the year ended October 31, 2003, of $86 are
included in net realized gains in the Statement of Operations.
Securities lending: The Fund may lend securities to enhance fund earnings from
investing cash collateral received in making such loans to qualified borrowers
(typically broker/dealers). The Fund has engaged its custodian bank, IBT, as a
lending agent to administer its securities lending program. IBT earned $64 of
program net income for its services. When the Fund makes a security loan, it
receives cash collateral as protection against risk that the borrower will
default on the loan, and records an asset for the cash invested collateral and
a liability for the return of the collateral.
Securities on loan are included in Investment securities at value on the
Statement of Assets and Liabilities and remain on the Schedule of Investments.
Loans of securities are required to be secured by collateral at least equal to
102% of the value of the securities at the inception of the loan, and not less
then 100% thereafter. The Fund may invest cash collateral in short-term money
market instruments including: U.S. Treasury Bills, U.S. agency obligations,
commercial paper, money market mutual funds, repurchase agreements and other
highly rated, liquid investments. During the life of securities loans, the
collateral and securities loaned remain subject to fluctuation in value. IBT
marks to market securities loaned and the collateral each business day. If
additional collateral is due (at least $1), IBT collects additional cash
collateral from the borrowers. Although securities loaned will be fully
collateralized at all times, IBT may experience delays in, or may be prevented
from, recovering the collateral on behalf of the Fund. The Fund may recall a
loaned security position at any time from the borrower through IBT. In the
event the borrower fails to timely return a recalled security, IBT may
indemnify the Fund by purchasing replacement securities for the Fund at its own
expense and claiming the collateral to fund such a purchase. IBT absorbs the
loss if the collateral value is not sufficient to cover the cost of the
replacement securities. If replacement securities are not available, IBT will
credit the equivalent cash value to the Fund.
IDEX Mutual Funds Annual Report 2003
IDEX Janus Global 11
IDEX Janus Global
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 1-(continued)
Income from securities lending is included in the Statement of Operations. The
amount of collateral and value of securities on loan are included in the
Statement of Assets and Liabilities as well as on the Schedule of Investments.
Security transactions and investment income: Security transactions are recorded
on the trade date. Security gains and losses are calculated on the specific
identification basis. Dividend income is recorded on the ex-dividend date or,
in the case of foreign securities, as soon as the Fund is informed of the
ex-dividend date. Interest income, including accretion of discounts and
amortization of premiums, is recorded on the accrual basis commencing on the
settlement date.
Foreign currency denominated investments: The accounting records of the Fund
are maintained in U.S. dollars. Securities and other assets and liabilities
denominated in foreign currencies are translated into U.S. dollars at the
closing exchange rate each day. The cost of foreign securities is translated at
the exchange rate in effect when the investment was acquired. The Fund combines
fluctuations from currency exchange rates and fluctuations in value when
computing net realized and unrealized gains or losses from investments.
Net foreign currency gains and losses resulting from changes in exchange rates
include: 1) foreign currency fluctuations between trade date and settlement
date of investment security transactions; 2) gains and losses on forward
foreign currency contracts; and 3) the difference between the receivable
amounts of interest and dividends recorded in the accounting records in U.S.
dollars and the amounts actually received.
Foreign currency denominated assets may involve risks not typically associated
with domestic transactions, including unanticipated movements in exchange
currency rates, the degree of government supervision and regulation of security
markets, and the possibility of political or economic instability.
Forward foreign currency contracts: The Fund may enter into forward foreign
currency contracts to hedge against exchange rate risk arising from investments
in securities denominated in foreign currencies. Contracts are valued at the
contractual forward rate and are marked to market daily, with the change in
value recorded as an unrealized gain or loss. When the contracts are closed a
realized gain or loss is incurred. Risks may arise from changes in market value
of the underlying currencies and from the possible inability of counterparties
to meet the terms of their contracts. Open forward currency contracts at
October 31, 2003, are listed in the Schedule of Investments.
Dividend distributions: Distributions to shareholders are recorded on the
ex-dividend date and are determined in accordance with Federal income tax
regulations which may differ from GAAP.
NOTE 2. RELATED PARTY TRANSACTIONS
AEGON/Transamerica Fund Advisers, Inc. ("ATFA") is the Fund's investment
adviser. AEGON/Transamerica Fund Services, Inc. ("ATFS") is the Fund's
administrator. AFSG Securities Corp. ("AFSG") is the Fund's
distributor/principal underwriter. AEGON/Transamerica Investor Services, Inc.
("ATIS") is the 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. AUSA and WRL are wholly owned indirect
subsidiaries of AEGON NV, a Netherlands corporation.
Investment advisory fees: The Fund pays management fees to ATFA based on
average daily net assets ("ANA") at the following stated break points:
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
Distribution and service fees: The Fund has a 12b-1 distribution plan under the
1940 Act pursuant to which an annual fee, based on average daily net assets, is
paid to the distributor for various disbursements such as broker-dealer account
servicing fees and other promotional expenses of the Fund. The 12b-1 fee for
the Fund is comprised of a 0.25% service fee and the remaining amount is an
asset-based sales charge/distribution fee. The Fund is authorized under the
12b-1 plan to pay fees on each class up to the following limits:
Class A 0.35%
Class B 1.00%
Class C 1.00%
Class L 1.00%
Class M 0.90%
Underwriter commissions relate to front-end sales charges imposed for Class A
and M shares and contingent deferred sales charges from Classes B, L, M and
certain A share redemptions. For the year ended October 31, 2003, the
underwriter commissions were as follows:
Received by Underwriter $ 207
Retained by Underwriter 25
Contingent Sales Charges 542
Administrative services: The Fund has entered into an agreement with ATFS for
financial and legal fund administration services, which include such items as
compliance, expenses, financial statements and other reporting, distributions,
tax returns, prospectus preparation, board of trustees meeting support and
other legal matters. Transfer agent fees are reflected separately from
Administration fees on the Statement of Operations. The Legal fees on the
Statement of Operations are for fees paid to external legal counsel. ATFS
provides its services to the Fund at cost and is reimbursed monthly.
IDEX Mutual Funds Annual Report 2003
IDEX Janus Global 12
IDEX Janus Global
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 2-(continued)
Transfer agent fees: The Fund incurs ATIS annual per-account charges (not in
thousands) of $20.00 for each open shareholder account and $1.63 for each
closed account maintained, and certain out of pocket expenses.
Deferred compensation plan: Each eligible Fund Trustee may elect participation
in the Deferred Compensation Plan ("the Plan"). Under the Plan, such Trustees
may defer payment of a percentage of their total fees earned as a Fund Trustee.
These deferred amounts may be invested in any IDEX Fund. At October 31, 2003,
the value of invested plan amounts was $78. Invested plan amounts and the total
liability for deferred compensation to the Trustees under the Plan at October
31, 2003, are included in Net assets in the accompanying Statement of Assets
and Liabilities.
NOTE 3. INVESTMENT TRANSACTIONS
The cost of securities purchased and proceeds from securities sold (excluding
short-term securities) for the year ended October 31, 2003, were as follows:
Purchases of securities:
Long-Term excluding U.S. Government $ 448,297
U.S. Government 3,164
Proceeds from maturities and sales of securities:
Long-Term excluding U.S. Government 592,730
U.S. Government 9,470
NOTE 4. FEDERAL INCOME TAX MATTERS
The Fund has not made any provision for federal income or excise taxes due to
its policy to distribute all of its taxable income and capital gains to its
shareholders and otherwise qualify as a regulated investment company under the
Internal Revenue Code. Income and capital gain distributions are determined in
accordance with income tax regulations, which may differ from GAAP. These
differences are primarily due to differing treatments for items including, but
not limited to, wash sales, foreign currency transactions, net operating losses
and capital loss carryforwards.
Reclassifications between Undistributed net investment income (loss),
Undistributed net realized capital gains (loss) and Shares of beneficial
interest are made to reflect income and gains available for distribution under
federal tax regulations. Results of operations and net assets are not effected
by these reclassifications. These reclassifications are as follows:
Shares of beneficial interest, unlimited
shares authorized $ (2,656)
Accumulated net investment income (loss) 2,772
Accumulated net realized gain (loss) from
investments and foreign currency
transactions (116)
The tax basis components of distributable earnings as of October 31, 2003, are
as follows:
Undistributed Ordinary Income $ -
===========
Undistributed Long-term Capital Gains $ -
===========
Capital Loss Carryforward $ (439,211)
===========
Net Unrealized Appreciation (Depreciation) $ 27,797
===========
The capital loss carryforwards are available to offset future realized capital
gains through the periods listed:
Capital Loss
Carryforwards Available through
- --------------- ------------------
$ 176,064 October 31, 2009
205,203 October 31, 2010
57,944 October 31, 2011
The aggregate cost of investments and composition of unrealized appreciation
(depreciation) for federal income tax purposes as of October 31, 2003, are as
follows:
Federal Tax Cost Basis $ 428,347
=========
Unrealized Appreciation $ 44,285
Unrealized (Depreciation) (16,205)
---------
Net Unrealized Appreciation (Depreciation) $ 27,797
=========
IDEX Mutual Funds Annual Report 2003
IDEX Janus Global 13
- --------------------------------------------------------------------------------
Report of Independent Certified Public Accountants
To the Board of Trustees and Shareholders of
IDEX Janus Global
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of IDEX Janus Global (the "Fund")
(one of the portfolios constituting the IDEX Mutual Funds) at October 31, 2003,
and the results of its operations, the changes in its net assets and the
financial highlights for each of the periods indicated, in conformity with
accounting principles generally accepted in the United States of America. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with auditing standards generally accepted in the United States of America,
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at October 31, 2003 by correspondence with the
custodian and brokers, provide a reasonable basis for our opinion.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Tampa, Florida
December 18, 2003
IDEX Mutual Funds Annual Report 2003
IDEX Janus Global 14
IDEX Janus Growth
- --------------------------------------------------------------------------------
MARKET ENVIRONMENT
All three popular U.S. stock market indexes ended the fiscal year, October 31,
2003, with gains. The Dow Jones Industrial Average added 19.50% and the
broad-based Standard and Poor's 500 Composite Stock Index ("S&P 500") climbed
20.79%. More than doubling those returns, the technology-dominated NASDAQ
Composite Index surged 45.31% for the twelve months. The year got off to a good
start with hopes of a pickup in corporate profits and a resumption of capital
expenditures in the new year. Although the stock market rallied early in the
year, the rebound was short-lived. Despite the fact that mortgage interest
rates fell to historic lows and the housing market remained strong, a looming
conflict with Iraq worried investors and consumers alike. Rising unemployment,
a persistent lack of new jobs and soaring oil prices also were causes for
concern. After hitting a trough in the four months leading up to the war,
however, both the market and consumer confidence bounced back sharply when
hostilities began in mid-March. Later, signs that the manufacturing sector was
emerging from a two-year slump and a tax-cut-driven increase in consumer
spending also helped to lift investors' spirits. But the health of the economy
still was in doubt as job losses mounted. The Federal Reserve Board
acknowledged the mixed picture, cutting its benchmark federal funds rate to an
over 40-year low of 1% in an attempt to spur corporate investment and hiring.
As the fiscal year came to a close, stocks added to their 2003 gains. Feelings
of cautious optimism, fueled by an acceleration of quarterly earnings and a
better-than-expected jump in economic growth, prevailed despite weak job growth
and questions about whether the positive momentum could be sustained.
PERFORMANCE
For the year ended October 31, 2003, IDEX Janus Growth returned 24.32%. By
comparison its benchmark, the S&P 500, returned 20.79%.
STRATEGY REVIEW
The portfolio's top performers primarily came from two sectors: information
technology and biotechnology, as improved economic conditions spurred investor
interest in these cutting-edge areas. The most troublesome stocks for the
portfolio included massive entertainment and media firms such as Time Warner
Inc., formerly AOL Time Warner Inc. and Viacom Inc., both of which have seen
their stocks stay under pressure over the past twelve months. Also
disappointing was Finnish cell phone giant Nokia Oyj.
While continuing to focus on building the portfolio one stock at a time,
certain sectors did have a noticeable impact. The best performing sector for
the portfolio was consumer discretionary, where we were approximately
triple-weighted compared to the S&P 500. Our stock selection within this sector
was particularly strong. Also providing strong absolute performance was the
information technology sector of the market, which was also due in part to
superior stock selection. Most sectors were carried along on the rising tides
of the market over the past year, and as such, none of our sector weights
impacted the performance of the portfolio in a negative way. But the ones that
contributed least to the portfolio's outperformance were consumer staples and
particularly the energy sector, where certain stocks did not perform up to our
expectations.
/s/ Edward Keely
Edward Keely
Fund Manager
Janus Capital Management LLC
IDEX Mutual Funds Annual Report 2003
IDEX Janus Growth 1
IDEX Janus Growth
- --------------------------------------------------------------------------------
Comparison of change in value of $10,000 investment in Class A shares and its
comparative index.
Growth of $10,000
Inception of 10/31/93 through 10/31/03
Investment less sales charges - $9,452
[The following table was depicted as a mountain chart in the printed material.]
DATE Class A S&P 500
- ------------------ ---------------- -----------
10/31/1993 9,452 10,000
12/31/1993 9,391 10,024
3/31/1994 9,071 9,645
6/30/1994 8,582 9,685
9/30/1994 8,813 10,158
12/31/1994 8,593 10,156
3/31/1995 9,099 11,144
6/30/1995 10,618 12,206
9/30/1995 12,048 13,176
12/31/1995 12,648 13,968
3/31/1996 13,249 14,718
6/30/1996 14,542 15,378
9/30/1996 14,748 15,853
12/31/1996 14,804 17,173
3/31/1997 14,098 17,635
6/30/1997 16,485 20,711
9/30/1997 18,038 22,262
12/31/1997 17,289 22,901
3/31/1998 20,786 26,093
6/30/1998 23,673 26,954
9/30/1998 22,163 24,278
12/31/1998 28,355 29,445
3/31/1999 33,457 30,911
6/30/1999 34,106 33,090
9/30/1999 34,098 31,026
12/31/1999 44,937 35,640
3/31/2000 49,500 36,457
6/30/2000 44,180 35,490
9/30/2000 43,806 35,146
12/31/2000 32,254 32,398
3/31/2001 24,330 28,560
6/30/2001 27,072 30,230
9/30/2001 18,502 25,795
12/31/2001 23,132 28,551
3/31/2002 22,117 28,629
6/30/2002 17,740 24,796
9/30/2002 15,008 20,515
12/31/2002 16,033 22,243
3/31/2003 16,480 21,541
6/30/2003 18,795 24,857
9/30/2003 18,989 25,515
10/31/2003 20,039 26,958
Average Annual Total Return for Periods Ended 10/31/03
- --------------------------------------------------------------------------------
From Inception
1 year 5 years 10 years Inception Date
----------- ----------- ---------- ----------- ----------
Class A (NAV) 24.32% -2.69% 7.80% 11.59% 5/8/86
Class A (POP) 17.48% -3.78% 7.20% 11.23% 5/8/86
S&P 500(1) 20.79% 0.53% 10.42% 11.61% 5/8/86
- -----------------------------------------------------------------------------------
Class B (NAV) 23.58% -3.34% - 5.93% 10/1/95
Class B (POP) 18.58% -3.53% - 5.93% 10/1/95
- -----------------------------------------------------------------------------------
Class C (NAV) 23.58% - - -14.83% 11/1/99
- -----------------------------------------------------------------------------------
Class L (NAV) - - - 25.17% 11/11/02
Class L (POP) - - - 23.17% 11/11/02
- -----------------------------------------------------------------------------------
Class M (NAV) 23.67% -3.23% 7.34% 7.28% 10/1/93
Class M (POP) 21.44% -3.43% 7.24% 7.17% 10/1/93
- -----------------------------------------------------------------------------------
Class T (NAV) 24.70% -2.33% 8.22% 12.39% 6/4/85
Class T (POP) 14.10% -4.05% 7.26% 11.85% 6/4/85
- -----------------------------------------------------------------------------------
NOTES
(1) The Standard & Poor's 500 Composite Stock (S&P 500) 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 Micropal(R)(C) 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, 1% for
M shares and 8.5% for T shares or the maximum applicable contingent deferred
sales charge (5% in the 1st year, decreasing to 0% after 6 years) for Class B
shares, (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, M
and T shares are not available to new investors.
Periods less than 1 year represent total return and are not annualized. This
material must be preceded or accompanied by a current prospectus, which
includes specific contents regarding the investment objectives and policies of
this fund.
IDEX Mutual Funds Annual Report 2003
IDEX Janus Growth 2
IDEX Janus Growth
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
At October 31, 2003
(all amounts except share amounts in thousands)
Shares Value
------------------- -----------------
COMMON STOCKS (90.6%)
Air Transportation (0.7%)
FedEx Corporation 126,690 $ 9,598
Amusement & Recreation Services (1.7%)
Mandalay Resort Group 575,690 22,596
Automotive Dealers & Service Stations (1.5%)
Advance Auto Parts, Inc. (a) 256,045 20,028
Beer, Wine & Distilled Beverages (0.7%)
LVMH Moet Hennessy Louis Vuitton SA 128,170 8,866
Business Services (7.0%)
Clear Channel Communications, Inc. 1,632,065 66,621
eBay Inc. (a) 455,735 25,494
Chemicals & Allied Products (4.9%)
Avon Products, Inc. 233,190 15,848
Colgate-Palmolive Company 608,630 32,374
Procter & Gamble Company (The) 166,115 16,327
Commercial Banks (4.2%)
Citigroup Inc. 437,245 20,725
MBNA Corporation 905,980 22,423
Northern Trust Corporation 268,375 12,466
Communication (6.2%)
Liberty Media Corporation-Class A (a) 5,650,991 57,018
Viacom, Inc.-Class B 622,290 24,811
Communications Equipment (0.5%)
Avaya Inc. (a) 493,460 6,385
Computer & Data Processing Services (8.7%)
Check Point Software Technologies, Ltd. (a) 831,925 14,134
Electronic Arts Inc. (a) 267,535 26,497
VERITAS Software Corporation (a) 569,835 20,600
Yahoo! Inc. (a)(b) 1,235,955 54,011
Computer & Office Equipment (3.7%)
Cisco Systems, Inc. (a) 1,590,232 33,363
Lexmark International Group, Inc. (a) 220,145 16,205
Department Stores (1.3%)
Kohl's Corporation (a) 316,580 17,751
Electronic Components & Accessories (5.7%)
Intel Corporation 643,640 21,272
Maxim Integrated Products (b) 689,610 34,281
Xilinx, Inc. (a) 638,358 20,236
Food Stores (1.2%)
Krispy Kreme Doughnuts, Inc. (a)(b) 379,805 16,453
Hotels & Other Lodging Places (1.6%)
Marriott International, Inc.-Class A 333,960 14,427
Starwood Hotels & Resorts Worldwide, Inc. 194,765 6,569
Insurance (2.9%)
UnitedHealth Group Incorporated (b) 759,700 $ 38,654
Insurance Agents, Brokers & Service (0.7%)
Marsh & McLennan Companies, Inc. 201,905 8,631
Manufacturing Industries (2.0%)
International Game Technology 821,555 26,906
Medical Instruments & Supplies (7.2%)
Biomet, Incorporated 441,645 15,837
Boston Scientific Corporation (a) 125,730 8,514
Medtronic, Inc. 1,543,420 70,334
Paper & Allied Products (1.1%)
3M Company 179,525 14,159
Personal Credit Institutions (1.1%)
SLM Corporation 368,115 14,415
Personal Services (2.1%)
Cendant Corporation (a)(b) 1,385,060 28,297
Pharmaceuticals (14.3%)
Alcon, Inc. 142,745 7,867
Amgen Inc. (a) 747,780 46,183
Celgene Corporation (a) 162,755 6,785
Forest Laboratories, Inc. (a) 746,995 37,357
Genentech, Inc. (a)(b) 548,285 44,943
Genzyme Corporation-General Division (a) 304,305 13,968
Roche Holding AG 205,191 16,999
Teva Pharmaceutical Industries Ltd.-ADR (b) 264,620 15,054
Restaurants (1.5%)
McDonald's Corporation 772,010 19,308
Retail Trade (5.1%)
Amazon.com, Inc. (a)(b) 553,835 30,140
Staples, Inc. (a) 969,340 25,998
Tiffany & Co. (b) 240,850 11,428
Security & Commodity Brokers (0.9%)
Legg Mason, Inc. (b) 149,495 12,445
Transportation & Public Utilities (1.1%)
InterActiveCorp (a)(b) 392,965 14,426
U.S. Government Agencies (1.0%)
Fannie Mae 184,250 13,209
-----------
Total Common Stocks (cost: $1,023,956)
1,199,236
-----------
Principal Value
----------- --------------
SECURITY LENDING COLLATERAL (8.5%)
Debt (7.5%)
Bank Notes (0.9%)
Canadian Imperial Bank of Commerce
1.12%, due 11/04/2003 $ 4,892 $ 4,892
Fleet National Bank
1.06%, due 01/21/2004 6,848 6,848
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Janus Growth 3
IDEX Janus Growth
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Principal Value
------------- --------------
Euro Dollar Terms (4.2%)
Bank of Montreal
1.03%, due 11/13/2003 $ 3,913 $ 3,913
1.04%, due 11/14/2003 3,436 3,436
Bank of Nova Scotia (The)
1.06%, due 11/12/2003 1,957 1,957
Bank of Scotland
1.04%, due 11/14/2003 3,913 3,913
Citigroup Inc.
1.08%, due 01/05/2004 5,870 5,870
Credit Agricole Indosuez
1.08%, due 01/06/2004 4,305 4,305
Den Danske Bank
1.04%, due 11/10/2003 1,957 1,957
1.08%, due 01/20/2004 5,870 5,870
Royal Bank of Canada
1.04%, due 11/24/2003 4,892 4,892
1.06%, due 12/08/2003 1,957 1,957
Royal Bank of Scotland Group PLC (The)
1.08%, due 01/15/2004 5,870 5,870
SouthTrust Bank
1.08%, due 01/16/2004 5,870 5,870
Wells Fargo & Company
1.04%, due 11/20/2003 5,870 5,870
Promissory Notes (0.5%)
Goldman Sachs Group, Inc. (The)
1.15%, due 11/03/2003 $ 6,848 $ 6,848
Repurchase Agreements (1.9%) (c)
Goldman Sachs Group, Inc. (The)
1.10% Repurchase Agreement dated
10/31/2003 to be repurchased at $1,957
on 11/03/2003 1,957 1,957
Merrill Lynch & Co., Inc.
1.10% Repurchase Agreement dated
10/31/2003 to be repurchased at
$22,502 on 11/03/2003 22,500 22,500
Shares Value
-------------- -------------
Investment Companies (1.0%)
Money Market Funds (1.0%)
Merrimac Cash Series Fund-
Premium Class
1-day yield of 0.97% 13,696,421 $ 13,696
-----------
Total Security Lending Collateral (cost: $112,421) 112,421
-----------
Total Investment Securities (cost: $1,136,377) $ 1,311,657
===========
SUMMARY:
Investments, at value 99.1% $ 1,311,657
Other assets in excess of liabilities 0.9% 12,513
---------- -----------
Net assets 100.0% $ 1,324,170
========== ===========
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 (see Note
1). The value at October 31, 2003, of all securities on loan is $109,239.
(c) Cash collateral for the Repurchase Agreements, valued at $24,947, 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
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Janus Growth 4
IDEX Janus Growth
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
At October 31, 2003
(all amounts except per share amounts in thousands)
Assets:
Investment securities, at value (cost: $1,136,377)
(including $109,239 of securities loaned) $1,311,657
Cash 131,402
Receivables:
Shares of beneficial interest sold 272
Interest 22
Dividends 744
Dividend reclaims receivable 10
Other 430
-----------
1,444,537
-----------
Liabilities:
Investment securities purchased 3,452
Accounts payable and accrued liabilities:
Shares of beneficial interest redeemed 1,711
Management and advisory fees 983
Distribution fees 441
Transfer agent fees 566
Payable for securities on loan 112,421
Other 793
-----------
120,367
-----------
Net Assets $1,324,170
===========
Net Assets Consist of:
Shares of beneficial interest, unlimited shares authorized $2,132,818
Accumulated net investment income (loss) (342)
Accumulated net realized gain (loss) from investment
securities and foreign currency transactions (983,511)
Net unrealized appreciation (depreciation) on
investment securities 175,205
-----------
Net Assets $1,324,170
===========
Shares Outstanding:
Class A 29,579
Class B 12,666
Class C 1,682
Class L 40
Class M 3,125
Class T 20,378
Net Asset Value Per Share:
Class A $ 19.73
Class B 18.45
Class C 18.45
Class L 18.45
Class M 18.65
Class T 20.45
Maximum Offering Price Per Share (a):
Class A $ 20.88
Class M 18.84
Class T 22.35
(a) 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.
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the year ended October 31, 2003
(all amounts in thousands)
Investment Income:
Interest $ 466
Dividends 5,378
Income from loaned securities-net 145
Less withholding taxes on foreign dividends (53)
---------
5,936
---------
Expenses:
Management and advisory fees 10,670
Transfer agent fees 4,627
Printing and shareholder reports 806
Custody fees 131
Administration fees 33
Legal fees 76
Auditing and accounting fees 37
Trustees fees 94
Registration fees 101
Other 89
Distribution and service fees:
Class A 1,874
Class B 2,245
Class C 317
Class L 2
Class M 525
Class T -
---------
Total expenses 21,627
---------
Net Investment Income (Loss) (15,691)
---------
Net Realized Gain (Loss) from:
Investment securities (89,335)
Foreign currency transactions (17)
---------
(89,352)
---------
Net Increase (Decrease) in Unrealized Appreciation
(Depreciation) on:
Investment securities 372,706
---------
Net Gain (Loss) on Investment Securities and Foreign
Currency Transactions 283,354
---------
Net Increase (Decrease) in Net Assets Resulting
from Operations $ 267,663
=========
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Janus Growth 5
IDEX Janus Growth
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended
(all amounts in thousands)
October 31, October 31,
2003 2002
--------------- --------------
Increase (Decrease) In Net Assets From:
Operations:
Net investment income (loss) $ (15,691) $ (20,281)
Net realized gain (loss) from
investment securities and foreign
currency transactions (89,352) (243,324)
Net unrealized appreciation
(depreciation) on investment securities 372,706 (49,886)
----------- -----------
267,663 (313,491)
----------- -----------
Distributions to Shareholders:
From net investment income:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
Class T - -
----------- -----------
- -
----------- -----------
From net realized gains:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
Class T - -
----------- -----------
- -
----------- -----------
Capital Share Transactions:
Proceeds from shares sold:
Class A 97,031 72,760
Class B 16,501 33,355
Class C 3,457 8,945
Class L 925 -
Class M 2,730 7,095
Class T 26,507 27,028
----------- -----------
147,151 149,183
----------- -----------
Dividends and distributions reinvested:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
Class T - -
----------- -----------
- -
----------- -----------
Cost of shares redeemed:
Class A (136,363) (206,576)
Class B (54,092) (101,412)
Class C (11,227) (22,310)
Class L (248) -
Class M (17,848) (43,151)
Class T (62,594) (110,925)
----------- -----------
(282,372) (484,374)
----------- -----------
(135,221) (335,191)
----------- -----------
Net increase (decrease) in net assets 132,442 (648,682)
----------- -----------
Net Assets:
Beginning of year 1,191,728 1,840,410
----------- -----------
End of year $ 1,324,170 $ 1,191,728
============ ============
Accumulated Net Investment Income (Loss) $ (342) $ (316)
============ ============
Share Activity:
Shares issued:
Class A 5,565 3,665
Class B 999 1,747
Class C 215 450
Class L 54 -
Class M 164 363
Class T 1,445 1,349
------------ ------------
8,442 7,574
------------ ------------
Shares issued-reinvested from distributions:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
Class T - -
------------ ------------
- -
------------ ------------
Shares redeemed:
Class A (7,843) (11,039)
Class B (3,354) (5,779)
Class C (687) (1,235)
Class L (14) -
Class M (1,099) (2,361)
Class T (3,528) (5,930)
------------ ------------
(16,525) (26,344)
------------ ------------
Net increase (decrease) in shares
outstanding (8,083) (18,770)
============ ============
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Janus Growth 6
IDEX Janus Growth
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share of beneficial interest outstanding throughout each period
------------------------------------------------------------------------------------------------------------
Investment Operations Distributions
------------------------------------------ ------------------------------------
Net Asset Net Asset
For the Value, Net Net Realized From Net From Net Value,
Period Beginning Investment and Unrealized Total Investment Realized Total End
Ended (d)(g) of Period Income (Loss) Gain (Loss) Operations Income Gains Distributions of Period
- -----------------------------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 $15.87 $(0.21) $ 4.07 $ 3.86 $ - $ - $ - $ 19.73
10/31/2002 19.64 (0.22) (3.55) (3.77) - - - 15.87
10/31/2001 43.81 (0.24) (20.80) (21.04) - (3.13) (3.13) 19.64
10/31/2000 46.72 0.03 5.35 5.38 - (8.29) (8.29) 43.81
10/31/1999 29.35 0.06 17.70 17.76 - (0.39) (0.39) 46.72
- -----------------------------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 14.93 (0.31) 3.83 3.52 - - - 18.45
10/31/2002 18.63 (0.34) (3.36) ( 3.70) - - - 14.93
10/31/2001 42.08 (0.41) (19.91) (20.32) - (3.13) (3.13) 18.63
10/31/2000 45.38 (0.36) 5.35 4.99 - (8.29) (8.29) 42.08
10/31/1999 28.63 (0.56) 17.70 17.14 - (0.39) (0.39) 45.38
- -----------------------------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 14.93 (0.31) 3.83 3.52 - - - 18.45
10/31/2002 18.63 (0.34) (3.36) (3.70) - - - 14.93
10/31/2001 42.08 (0.42) (19.90) (20.32) - (3.13) (3.13) 18.63
10/31/2000 45.38 (0.36) 5.35 4.99 - (8.29) (8.29) 42.08
- -----------------------------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 14.74 (0.32) 4.03 3.71 - - - 18.45
- -----------------------------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 15.08 (0.29) 3.86 3.57 - - - 18.65
10/31/2002 18.78 (0.32) (3.38) (3.70) - - - 15.08
10/31/2001 42.35 (0.39) (20.05) (20.44) - (3.13) (3.13) 18.78
10/31/2000 45.58 (0.29) 5.35 5.06 - (8.29) (8.29) 42.35
10/31/1999 28.74 (0.47) 17.70 17.23 - (0.39) (0.39) 45.58
- -----------------------------------------------------------------------------------------------------------------------------------
Class T 10/31/2003 16.40 (0.16) 4.21 4.05 - - - 20.45
10/31/2002 20.20 (0.16) (3.64) (3.80) - - - 16.40
10/31/2001 44.76 (0.14) (21.29) (21.43) - (3.13) (3.13) 20.20
10/31/2000 47.45 0.25 5.35 5.60 - (8.29) (8.29) 44.76
10/31/1999 29.74 0.40 17.70 18.10 - (0.39) (0.39) 47.45
- -----------------------------------------------------------------------------------------------------------------------------------
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Janus Growth 7
IDEX Janus Growth
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Ratios/Supplemental Data
-----------------------------------------------------------------------
Ratio of Expenses
Net Assets, to Average Net Investment
For the End of Net Assets (a) Income (Loss) Portfolio
Period Total Period ----------------------- to Average Turnover
Ended (g) Return (c) (000's) Net (e) Total (f) Net Assets (a) Rate (b)
- ---------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 24.32% $ 583,674 1.70% 1.72% (1.22)% 62%
10/31/2002 (19.21) 505,704 1.66 1.69 (1.10) 62
10/31/2001 (51.31) 770,590 1.49 1.49 (0.83) 64
10/31/2000 10.82 1,727,573 1.39 1.42 (0.61) 41
10/31/1999 61.00 1,467,595 1.40 1.43 (0.60) 71
- ---------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 23.58 233,731 2.35 2.37 (1.87) 62
10/31/2002 (19.86) 224,348 2.31 2.35 (1.75) 62
10/31/2001 (51.74) 354,949 2.14 2.14 (1.48) 64
10/31/2000 10.11 775,252 2.04 2.07 (1.26) 41
10/31/1999 60.36 327,926 2.05 2.08 (1.25) 71
- ---------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 23.58 31,039 2.35 2.37 (1.87) 62
10/31/2002 (19.86) 32,168 2.31 2.35 (1.75) 62
10/31/2001 (51.74) 54,760 2.14 2.14 (1.48) 64
10/31/2000 10.11 121,633 2.04 2.07 (1.26) 41
- ---------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 25.17 735 2.35 2.37 (1.88) 62
- ---------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 23.67 58,272 2.25 2.27 (1.77) 62
10/31/2002 (19.72) 61,207 2.21 2.25 (1.65) 62
10/31/2001 (51.68) 113,794 2.04 2.04 (1.38) 64
10/31/2000 10.22 287,530 1.94 1.97 (1.16) 41
10/31/1999 60.45 141,586 1.95 1.98 (1.15) 71
- ---------------------------------------------------------------------------------------------------------------
Class T 10/31/2003 24.70 416,719 1.35 1.37 (0.87) 62
10/31/2002 (18.82) 368,301 1.31 1.34 (0.75) 62
10/31/2001 (51.07) 546,317 1.14 1.14 (0.48) 64
10/31/2000 11.20 1,232,295 1.04 1.07 (0.26) 41
10/31/1999 61.34 1,166,965 1.05 1.08 (0.25) 71
- ---------------------------------------------------------------------------------------------------------------
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 are not annualized.
(d) Per share information is calculated based on average number of shares
outstanding for the periods ended10/31/2001, 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 (see note 2).
(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 Fund's offering of share classes C and L are as
follows:
Class C - November 1, 1999
Class L - November 11, 2002
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Janus Growth 8
IDEX Janus Growth
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
At October 31, 2003
(all amounts in thousands)
NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
IDEX Mutual Funds is a Massachusetts business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company. IDEX Janus Growth ("the Fund"), part of IDEX
Mutual Funds, began operations on May 8, 1986.
In the normal course of business the Fund enters into contracts that contain a
variety of representations and warranties which provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown, as this would involve future claims that may be made against the Fund
and/or its affiliates that have not yet occurred. However, based on experience,
the Fund expects the risk of loss to be remote.
See the Prospectus and Statement of Additional Information for a description of
the Fund's investment objective.
In preparing the Fund's financial statements in accordance with accounting
principles generally accepted in the United States of America ("GAAP"),
estimates or assumptions (which could differ from actual results) may be used
that affect reported amounts and disclosures. The following policies were
consistently followed by the Fund, in accordance with GAAP.
Multiple class operations and expenses: The Fund currently offers six classes
of shares, each with a public offering price that reflects different sales
charges, if any, and expense levels. Class T shares are not available to new
investors. Effective November 11, 2002, Class C and M shares were closed to new
investors. Income, non-class specific expenses and realized and unrealized
gains and losses, are allocated daily to each class, based upon the value of
shares outstanding method as permitted under Rule 18f-3 of the 1940 Act. Each
class bears its own specific expenses as well as a portion of general, common
expenses.
Security valuations: Fund investments traded on an exchange are valued at the
closing price on the day of valuation on the exchange where the security is
principally traded. With respect to securities traded on the NASDAQ INMS, such
closing price may be the last reported sales price or the NASDAQ Official
Closing Price.
Securities traded in the over-the-counter market and listed securities for
which no sale was reported on that date are valued at the last quoted bid
price.
Debt securities are valued by independent pricing services; however, those that
mature in sixty days or less are valued at amortized cost, which approximates
market.
Other securities for which quotations are not readily available are valued at
fair value determined in good faith, in accordance with procedures established
by and, under the supervision of the Board of Trustees and the Fund's Valuation
Committee.
Cash: The Fund may leave cash overnight in its cash account with the custodian,
Investors Bank & Trust Company ("IBT"). IBT has been contracted on behalf of
the Fund to invest the excess cash into a savings account, which at October 31,
2003, was paying an interest rate of 0.75%.
Directed brokerage: The sub-adviser, to the extent consistent with the best
execution and usual commission rate policies and practices, may place security
transactions of the Fund with broker/dealers with which IDEX Mutual Funds has
established a Directed Brokerage Program. A Directed Brokerage Program is any
arrangement under which a broker/dealer applies a portion of the commissions
received by such broker/dealer on the security transactions to the Fund. In no
event will commissions paid by the Fund be used to pay expenses that would
otherwise be borne by any other funds within IDEX Mutual Funds, or by any other
party. Directed commissions during the year ended October 31, 2003, of $50 are
included in net realized gains in the Statement of Operations.
Securities lending: The Fund may lend securities to enhance fund earnings from
investing cash collateral received in making such loans to qualified borrowers
(typically broker/dealers). The Fund has engaged its custodian bank, IBT, as a
lending agent to administer its securities lending program. IBT earned $35 of
program net income for its services. When the Fund makes a security loan, it
receives cash collateral as protection against the risk that the borrower will
default on the loan, and records an asset for the cash invested collateral and
a liability for the return of the collateral.
Securities on loan are included in Investment securities at value on the
Statement of Assets and Liabilities and remain on the Schedule of Investments.
Loans of securities are required to be secured by collateral at least equal to
102% of the value of the securities at inception of the loan, and not less then
100% thereafter. The Fund may invest cash collateral in short-term money market
instruments including: U.S. Treasury Bills, U.S. agency obligations, commercial
paper, money market mutual funds, repurchase agreements and other highly rated,
liquid investments. During the life of securities loans, the collateral and
securities loaned remain subject to fluctuation in value. IBT marks to market
securities loaned and the collateral each business day. If additional
collateral is due (at least $1), IBT collects additional cash collateral from
the borrowers. Although securities loaned will be fully collateralized at all
times, IBT may experience delays in, or may be prevented from, recovering the
collateral on behalf of the Fund. The Fund may recall a loaned security
position at any time from the borrower through IBT. In the event the borrower
fails to timely return a recalled security, IBT may indemnify the Fund by
purchasing replacement securities for the Fund at its own expense and claiming
the collateral to fund such a purchase. IBT absorbs the loss if the collateral
value is not sufficient to cover the cost of the replacement securities. If
replacement securities are not available, IBT will credit the equivalent cash
value to the Fund.
IDEX Mutual Funds Annual Report 2003
IDEX Janus Growth 9
IDEX Janus Growth
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 1-(continued)
Income from securities lending is included in the Statement of Operations. The
amount of collateral and value of securities on loan are included in the
Statement of Assets and Liabilities as well as on the Schedule of Investments.
Security transactions and investment income: Security transactions are recorded
on the trade date. Security gains and losses are calculated on the specific
identification basis. Dividend income is recorded on the ex-dividend date or,
in the case of foreign securities, as soon as the Fund is informed of the
ex-dividend date. Interest income, including accretion of discounts and
amortization of premiums, is recorded on the accrual basis commencing on the
settlement date.
Dividend distributions: Distributions to shareholders are recorded on the
ex-dividend date and are determined in accordance with Federal income tax
regulations which may differ from GAAP.
NOTE 2. RELATED PARTY TRANSACTIONS
AEGON/Transamerica Fund Advisers, Inc. ("ATFA") is the Fund's investment
adviser. AEGON/Transamerica Fund Services, Inc. ("ATFS") is the Fund's
administrator. AFSG Securities Corp. ("AFSG") is the Fund's
distributor/principal underwriter. AEGON/Transamerica Investor Services, Inc.
("ATIS") is the 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. AUSA and WRL are wholly owned indirect
subsidiaries of AEGON NV, a Netherlands corporation.
Investment advisory fees: The Fund pays management fees to ATFA based on
average daily net assets ("ANA") at the following stated break points:
1.00% of the first $250 million of ANA
0.90% of the next $500 million of ANA
0.80% of the next $750 million of ANA
0.70% of ANA over $1.5 billion
ATFA currently voluntarily waives its advisory fee and will reimburse the Fund
to the extent that operating expenses, excluding 12b-1 fees, exceed the
following stated annual limit:
1.50% Expense Limit
From November 1, 2002 until April 30, 2003, ATFA waived additional advisory
fees as follows: 0.025% of average daily net assets from $100-$500 million (net
0.975%); 0.075% of assets from $500-$750 million (net 0.925%); 0.025% of assets
from $750 million-$1 billion (net 0.875%) and 0.025% of assets above $1 billion
(net 0.825%).
If total fund expenses fall below the annual expense limitations agreed to by
the adviser within the succeeding three years, the Fund may be required to pay
the advisor a portion or all of the waived advisory fees.
Distribution and service fees: The Fund has a 12b-1 distribution plan under the
1940 Act pursuant to which an annual fee, based on average daily net assets, is
paid to the distributor for various disbursements such as broker-dealer account
servicing fees and other promotional expenses of the Fund, excluding Class T.
The 12b-1 fee for the Fund is comprised of a 0.25% service fee and the
remaining amount is an asset-based sales charge/distribution fee. The Fund is
authorized under the 12b-1 plan to pay fees on each class up to the following
limits:
Class A 0.35%
Class B 1.00%
Class C 1.00%
Class L 1.00%
Class M 0.90%
Class T N/A
Underwriter commissions relate to front-end sales charges imposed for Class A,
M, and T shares and contingent deferred sales charges from Classes B, L, M and
certain A share redemptions. For the year ended October 31, 2003, the
underwriter commissions were as follows:
Received by Underwriter $ 1,125
Retained by Underwriter 126
Contingent Sales Charges 642
Administrative services: The Fund has entered into an agreement with ATFS for
financial and legal fund administration services, which include such items as
compliance, expenses, financial statements and other reporting, distributions,
tax returns, prospectus preparation, board of trustees meeting support and
other legal matters. Transfer agent fees are reflected separately from
Administration fees on the Statement of Operations. The Legal fees on the
Statement of Operations are for fees paid to external legal counsel. ATFS
provides its services to the Fund at cost and is reimbursed monthly.
Transfer agent fees: The Fund incurs ATIS annual per-account charges (not in
thousands) of $20.00 for each open shareholder account and $1.63 for each
closed account maintained, and certain out of pocket expenses.
Deferred compensation plan: Each eligible Fund Trustee may elect participation
in the Deferred Compensation Plan ("the Plan"). Under the Plan, such Trustees
may defer payment of a percentage of their total fees earned as a Fund Trustee.
These deferred amounts may be invested in any IDEX Fund. At October 31, 2003,
the value of invested plan amounts was $258. Invested plan amounts and the
total liability for deferred compensation to the Trustees under the Plan at
October 31, 2003, are included in Net assets in the accompanying Statement of
Assets and Liabilities.
IDEX Mutual Funds Annual Report 2003
IDEX Janus Growth 10
IDEX Janus Growth
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 3. INVESTMENT TRANSACTIONS
The cost of securities purchased and proceeds from securities sold (excluding
short-term securities) for the year ended October 31, 2003, were as follows:
Purchases of securities:
Long-Term excluding U.S. Government $ 681,123
U.S. Government -
Proceeds from maturities and sales of securities:
Long-Term excluding U.S. Government 791,488
U.S. Government 8,308
NOTE 4. FEDERAL INCOME TAX MATTERS
The Fund has not made any provision for federal income or excise taxes due to
its policy to distribute all of its taxable income and capital gains to its
shareholders and otherwise qualify as a regulated investment company under the
Internal Revenue Code. Income and capital gain distributions are determined in
accordance with income tax regulations, which may differ from GAAP. These
differences are primarily due to differing treatments for items including, but
not limited to, wash sales, foreign currency transactions, net operating losses
and capital loss carryforwards.
Reclassifications between Undistributed net investment income (loss),
Undistributed net realized capital gains (loss) and Shares of beneficial
interest are made to reflect income and gains available for distribution under
federal tax regulations. Results of operations and net assets are not effected
by these reclassifications. These reclassifications are as follows:
Shares of beneficial interest, unlimited
shares authorized $ (15,640)
Accumulated net investment income (loss) 15,665
Accumulated net realized gain (loss) from
investment securities (25)
The tax basis components of distributable earnings as of October 31, 2003, are
as follows:
Undistributed Ordinary Income $ -
===========
Undistributed Long-term Capital Gains $ -
===========
Capital Loss Carryforward $ (979,505)
===========
Net Unrealized Appreciation (Depreciation) $ 171,275
===========
The capital loss carryforwards are available to offset future realized capital
gains through the periods listed:
Capital Loss
Carryforward Available through
- ---------------- ------------------
$ 633,224 October 31, 2009
259,422 October 31, 2010
86,859 October 31, 2011
The aggregate cost of investments and composition of unrealized appreciation
(depreciation) for federal income tax purposes as of October 31, 2003, are as
follows:
Federal Tax Cost Basis $1,140,382
===========
Unrealized Appreciation $ 226,816
Unrealized (Depreciation) (55,541)
-----------
Net Unrealized Appreciation (Depreciation) $ 171,275
===========
IDEX Mutual Funds Annual Report 2003
IDEX Janus Growth 11
- --------------------------------------------------------------------------------
Report of Independent Certified Public Accountants
To the Board of Trustees and Shareholders of
IDEX Janus Growth
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of IDEX Janus Growth (the "Fund")
(one of the portfolios constituting the IDEX Mutual Funds) at October 31, 2003,
and the results of its operations, the changes in its net assets and the
financial highlights for each of the periods indicated, in conformity with
accounting principles generally accepted in the United States of America. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with auditing standards generally accepted in the United States of America,
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at October 31, 2003 by correspondence with the
custodian and brokers, provide a reasonable basis for our opinion.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Tampa, Florida
December 18, 2003
IDEX Mutual Funds Annual Report 2003
IDEX Janus Growth 12
IDEX Janus Growth & Income
- --------------------------------------------------------------------------------
MARKET ENVIRONMENT
All three popular U.S. stock market indices ended the fiscal year, October 31,
2003, with gains. The Dow Jones Industrial Average added 19.50% and the
broad-based Standard and Poor's 500 Composite Stock Index ("S&P 500") climbed
20.79% More than doubling those returns, the technology-dominated NASDAQ
Composite Index surged 45.31% for the twelve months. The year got off to a good
start with hopes of a pickup in corporate profits and a resumption of capital
expenditures in the new year. Although the stock market rallied early in the
year, the rebound was short-lived. Despite the fact that mortgage interest
rates fell to historic lows and the housing market remained strong, a looming
conflict with Iraq worried investors and consumers alike. Rising unemployment,
a persistent lack of new jobs and soaring oil prices also were causes for
concern. After hitting a trough in the four months leading up to the war,
however, both the market and consumer confidence bounced back sharply when
hostilities began in mid-March. Later, signs that the manufacturing sector was
emerging from a two-year slump and a tax-cut-driven increase in consumer
spending also helped to lift investors' spirits. But the health of the economy
still was in doubt as job losses mounted. The Federal Reserve Board
acknowledged the mixed picture, cutting its benchmark federal funds rate to an
over 40-year low of 1% in an attempt to spur corporate investment and hiring.
As the fiscal year came to a close, stocks added to their 2003 gains. Feelings
of cautious optimism, fueled by an acceleration of quarterly earnings and a
better-than-expected jump in economic growth, prevailed despite weak job growth
and questions about whether the positive momentum could be sustained.
PERFORMANCE
For the year ended October 31, 2003, IDEX Janus Growth & Income returned
14.60%. By comparison its benchmark, the S&P 500, returned 20.79%.
STRATEGY REVIEW
Top contributors to the portfolio's performance included financial services
leader Citigroup Inc. and Tyco Capital, a consumer financial services company.
Also benefiting the portfolio were its investments in Maxim Integrated
Products, a manufacturer of integrated circuits, and Comcast Cable
Communications, Inc., a broadcasting and cable television conglomerate.
Our position in Automatic Data Processing, Inc. a provider of computerized
transaction processing, data communication and information services, proved to
be our biggest detractor from performance. Also negatively impacting
performance were luxury automobile manufacturer, Bayerische Motoren Werke AG
(BMW) and The Stanley Works, a domestic tool manufacturer.
While our focus remains on seeking the best individual stocks and constructing
a portfolio from the bottom up, sector weights also impacted performance during
the period. Our positions within the information technology sector had the
greatest positive effect on performance. Also, our continued focus on
fundamentally strong companies offering potential gains through capital
appreciation and dividend returns led us to overweight the outperforming
financial and consumer discretionary sectors, which also provided a nice lift
to our results. Despite contributing a slight gain to our overall performance,
the materials sector was among our weakest-performing sectors. The only sector
to have a negative impact on the portfolio's absolute performance during the
period was telecommunications, an area that we were significantly underweight.
/s/ David Corkins
David J. Corkins
Fund Manager
Janus Capital Management LLC
IDEX Mutual Funds Annual Report 2003
IDEX Janus Growth & Income 1
IDEX Janus Growth & Income
- --------------------------------------------------------------------------------
Comparison of change in value of $10,000 investment in Class A shares and its
comparative index.
Growth of $10,000
Inception of 12/15/00 through 10/31/03
Investment less sales charges - $9,452
[The following table was depicted as a mountain chart in the printed material.]
DATE Class A S&P 500
- ------------------ ---------------- -----------
12/15/2000 9,452 10,000
12/31/2000 9,459 10,071
3/31/2001 8,580 8,877
6/30/2001 8,955 9,396
9/30/2001 7,867 8,018
12/31/2001 8,458 8,875
3/31/2002 8,428 8,899
6/30/2002 7,637 7,707
9/30/2002 6,493 6,377
12/31/2002 6,796 6,914
3/31/2003 6,683 6,696
6/30/2003 7,373 7,726
9/30/2003 7,477 7,931
10/31/2003 7,864 8,379
Average Annual Total Return for Periods Ended 10/31/03
- --------------------------------------------------------------------------------
From Inception
1 year Inception Date
----------- ----------- ----------
Class A (NAV) 14.60% -6.20% 12/15/00
Class A (POP) 8.30% -8.03% 12/15/00
S&P 500(1) 20.79% -5.97% 12/15/00
- --------------- ----- ------ --------
Class B (NAV) 13.83% -6.87% 12/15/00
Class B (POP) 8.83% -7.85% 12/15/00
- --------------- ----- ------ --------
Class C (NAV) 13.83% -6.87% 12/15/00
- --------------- ----- ------ --------
Class L (NAV) - 14.63% 11/11/02
Class L (POP) - 12.63% 11/11/02
- --------------- ----- ------ --------
Class M (NAV) 13.95% -6.79% 12/15/00
Class M (POP) 11.81% -7.11% 12/15/00
- --------------- ----- ------ --------
NOTES
(1) The Standard & Poor's 500 Composite Stock (S&P 500) 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 Micropal(R)(C) 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 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.
Periods less than 1 year represent total return and are not annualized.
This material must be preceded or accompanied by a current prospectus, which
includes specific contents regarding the investment objectives and policies of
this fund.
IDEX Mutual Funds Annual Report 2003
IDEX Janus Growth & Income 2
IDEX Janus Growth & Income
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
At October 31, 2003
(all amounts except share amounts in thousands)
Principal Value
----------- ----------
CORPORATE DEBT SECURITIES (0.6%)
Communication (0.5%)
Cox Communications, Inc.
7.13%, due 10/01/2012 $ 130 $ 148
Electric, Gas & Sanitary Services (0.1%)
CMS Energy Corporation (b)
7.63%, due 11/15/2004 35 36
Environmental Services (0.0%)
Allied Waste North America, Inc.
7.88%, due 04/15/2013 15 16
-------
Total Corporate Debt Securities (cost: $180) 200
-------
CONVERTIBLE BONDS (0.1%)
Business Services (0.1%)
Lamar Advertising Company
2.88%, due 12/31/2010 30 29
Oil & Gas Extraction (0.0%)
Devon Energy Corporation
Zero Coupon, due 06/27/2020 2 1
-------
Total Convertible Bonds (cost: $31) 30
-------
Shares Value
-------------------- ---------------
CONVERTIBLE PREFERRED STOCKS (0.9%)
Commercial Banks (0.4%)
State Street Corporation 600 $ 150
Electric Services (0.4%)
CenterPoint Energy, Inc. 4,255 121
Environmental Services (0.1%)
Allied Waste Industries, Inc. 740 47
-------
Total Convertible Preferred Stocks (cost: $270) 318
-------
PREFERRED STOCKS (1.1%)
Automotive (1.1%)
Porsche AG 716 352
-------
Total Preferred Stocks (cost: $304) 352
-------
COMMON STOCKS (94.7%)
Aerospace (1.2%)
Lockheed Martin Corporation 8,600 399
Air Transportation (0.7%)
Southwest Airlines Co. (b) 11,545 224
Amusement & Recreation Services (0.3%)
Disney (Walt) Company (The) 4,685 106
Automotive (0.6%)
Honeywell International Inc. 6,730 206
Beer, Wine & Distilled Beverages (0.5%)
LVMH Moet Hennessy Louis Vuitton SA 2,629 182
Beverages (3.1%)
Anheuser-Busch Companies, Inc. 12,205 $ 601
PepsiCo, Inc. 9,169 438
Business Credit Institutions (1.2%)
CIT Group, Inc. 11,980 403
Business Services (2.7%)
Clear Channel Communications, Inc. 11,585 473
eBay Inc. (a) 1,195 67
Lamar Advertising Company (a) 10,080 305
Valassis Communications, Inc. (a) 2,590 67
Chemicals & Allied Products (3.1%)
International Flavors & Fragrances Inc. 5,320 176
Procter & Gamble Company (The) 8,025 789
Reckitt Benckiser PLC 4,145 87
Commercial Banks (7.9%)
Bank of America Corporation 5,100 386
Citigroup Inc. 32,745 1,552
U.S. Bancorp 25,917 705
Communication (9.0%)
Comcast Corporation-Special Class A (a) 41,220 1,345
Cox Communications, Inc.-Class A (a) 14,195 484
Liberty Media Corporation-Class A (a) 77,245 779
Viacom, Inc.-Class B 10,149 405
Communications Equipment (1.2%)
Nokia Oyj-ADR (b) 24,380 414
Computer & Data Processing Services (5.3%)
Ceridian Corporation (a) 11,595 243
Computer Associates International, Inc. 6,325 149
Electronic Arts Inc. (a) 2,275 225
Microsoft Corporation 34,485 902
Oracle Corporation (a) 14,010 168
Yahoo! Inc. (a) 1,730 76
Computer & Office Equipment (4.8%)
Cisco Systems, Inc. (a) 31,160 654
Dell Computer Corporation (a) 5,660 204
International Business Machines
Corporation 5,460 489
Lexmark International Group, Inc. (a) 3,425 252
Drug Stores & Proprietary Stores (1.0%)
Medco Health Solutions, Inc. (a) 9,650 320
Electric Services (1.2%)
EnCana Corporation (b) 11,838 407
Electronic & Other Electric Equipment (3.4%)
General Electric Company 25,855 750
Samsung Electronics Co.,
Ltd.-GDR-144A (USD) (b) 1,965 393
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Janus Growth & Income 3
IDEX Janus Growth & Income
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Shares Value
-------------------- ---------------
Electronic Components & Accessories (9.6%)
Intel Corporation 15,435 $ 510
Linear Technology Corporation 9,225 393
Maxim Integrated Products 14,755 732
NVIDIA Corporation (a)(b) 4,650 82
Texas Instruments Incorporated 12,050 348
Tyco International Ltd. (b) 52,885 1,104
Environmental Services (1.2%)
Waste Management, Inc. 15,780 409
Food Stores (0.6%)
Whole Foods Market, Inc. (a)(b) 3,225 191
Gas Production & Distribution (0.7%)
Kinder Morgan, Inc. 4,370 234
Health Services (0.9%)
Caremark Rx, Inc. (a)(b) 11,655 292
Hotels & Other Lodging Places (2.4%)
Fairmont Hotels & Resorts Inc. 13,517 348
Four Seasons Hotels Inc. (b) 2,350 130
Starwood Hotels & Resorts Worldwide, Inc. 9,850 332
Industrial Machinery & Equipment (1.1%)
Applied Materials, Inc. (a) 15,310 358
Insurance (8.0%)
Aetna Inc. 5,910 339
American International Group, Inc. 10,351 630
Berkshire Hathaway Inc.-Class B (a) 260 675
MGIC Investment Corporation 4,435 228
Travelers Property Casualty Corp.-Class B 15,961 261
UnitedHealth Group Incorporated 10,355 527
Insurance Agents, Brokers & Service (0.4%)
Marsh & McLennan Companies, Inc. 3,465 148
Management Services (0.6%)
Paychex, Inc. 5,380 209
Manufacturing Industries (1.0%)
Mattel, Inc. 18,050 349
Medical Instruments & Supplies (2.7%)
Bard, (C.R.) Inc. 3,060 245
INAMED Corporation (a) 645 56
Medtronic, Inc. 11,225 512
St. Jude Medical, Inc. (a) 1,660 97
Motion Pictures (1.6%)
Time Warner Inc. (a)(b) 35,625 545
Oil & Gas Extraction (0.7%)
ConocoPhillips 4,383 250
Paper & Allied Products (1.2%)
3M Company 5,040 398
Shares Value
-------------------- ---------------
Petroleum Refining (3.3%)
Exxon Mobil Corporation 30,545 $ 1,117
Pharmaceuticals (3.8%)
Pfizer Inc. 17,355 548
Roche Holding AG 8,712 722
Printing & Publishing (1.3%)
Gannett Co., Inc. 5,190 437
Radio, Television & Computer Stores (0.0%)
Best Buy Co., Inc. (a) 235 14
Railroads (0.9%)
Canadian National Railway Company 4,910 296
Retail Trade (0.4%)
Staples, Inc. (a)(b) 5,060 136
Security & Commodity Brokers (1.3%)
Goldman Sachs Group, Inc. (The) (b) 4,630 435
Transportation & Public Utilities (0.5%)
C.H. Robinson Worldwide, Inc. 4,045 158
U.S. Government Agencies (2.3%)
Fannie Mae 10,615 761
Variety Stores (1.0%)
Wal-Mart Stores, Inc. 5,840 344
---------
Total Common Stocks (cost: $27,676) 31,725
---------
Principal Value
----------- ----------
SECURITY LENDING COLLATERAL (12.6%)
Debt (11.1%)
Bank Notes (1.3%)
Canadian Imperial Bank of Commerce
1.12%, due 11/04/2003 $ 184 $ 184
Fleet National Bank
1.06%, due 01/21/2004 257 257
Euro Dollar Terms (6.3%)
Bank of Montreal
1.03%, due 11/13/2003 147 147
1.04%, due 11/14/2003 129 129
Bank of Nova Scotia (The)
1.06%, due 11/12/2003 73 73
Bank of Scotland
1.04%, due 11/14/2003 147 147
Citigroup Inc.
1.08%, due 01/05/2004 220 220
Credit Agricole Indosuez
1.08%, due 01/06/2004 162 162
Den Danske Bank
1.04%, due 11/10/2003 73 73
1.08%, due 01/20/2004 220 220
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Janus Growth & Income 4
IDEX Janus Growth & Income
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Principal Value
----------- ----------
Euro Dollar Terms (continued)
Royal Bank of Canada
1.04%, due 11/24/2003 $ 184 $ 184
1.06%, due 12/08/2003 73 73
Royal Bank of Scotland Group PLC (The)
1.08%, due 01/15/2004 220 220
SouthTrust Bank
1.08%, due 01/16/2004 220 220
Wells Fargo & Company
1.04%, due 11/20/2003 220 220
Promissory Notes (0.8%)
Goldman Sachs Group, Inc. (The)
1.15%, due 11/03/2003 257 257
Repurchase Agreements (2.7%) (c)
Goldman Sachs Group, Inc. (The)
1.10% Repurchase Agreement
dated 10/31/2003 to be repurchased
at $73 on 11/03/2003 73 73
Merrill Lynch & Co., Inc.
1.10% Repurchase Agreement
dated 10/31/2003 to be repurchased
at $845 on 11/03/2003 845 845
Shares Value
------------- ------------
Investment Companies (1.5%)
Money Market Funds (1.5%)
Merrimac Cash Series Fund-
Premium Class
1-day yield of 0.97% 513,875 $ 514
--------
Total Security Lending Collateral (cost: $4,218) 4,218
--------
Total Investment Securities (cost: $32,679) $ 36,843
========
SUMMARY:
Investments, at value 110.0 % $ 36,843
Liabilities in excess of other assets (10.0)% (3,350)
------- --------
Net assets 100.0 % $ 33,493
======= ========
FORWARD FOREIGN CURRENCY CONTRACTS:
- -------------------------------------------------------------------
Net
Amount in Unrealized
Bought Settlement U.S. Dollars Appreciation
Currency (Sold) Date Bought (Sold) (Depreciation)
- ------------- -------- ------------ --------------- ---------------
Euro Dollar (295) 03/26/2004 $ (339) $ (3)
Swiss Franc (200) 03/26/2004 (149) (2)
Swiss Franc (100) 04/16/2004 (76) 1
------- ------
$ (564) $ (4)
======= ======
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 (see Note
1). The value at October 31, 2003, of all securities on loan is $4,059.
(c) Cash collateral for the Repurchase Agreements, valued at $936, 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
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 financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Janus Growth & Income 5
IDEX Janus Growth & Income
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
At October 31, 2003
(all amounts except per share amounts in thousands)
Assets:
Investment securities, at value (cost: $32,679)
(including $4,059 of securities loaned) $36,843
Cash 1,295
Receivables:
Shares of beneficial interest sold 7
Interest 3
Dividends 38
Unrealized appreciation on forward foreign
currency contracts 1
Other 4
-------
38,191
-------
Liabilities:
Investment securities purchased 42
Accounts payable and accrued liabilities:
Shares of beneficial interest redeemed 350
Management and advisory fees 3
Distribution fees 25
Transfer agent fees 24
Payable for securities on loan 4,218
Unrealized depreciation on forward foreign
currency contracts 5
Other 31
-------
4,698
-------
Net Assets $33,493
=======
Net Assets Consist of:
Shares of beneficial interest, unlimited shares authorized $35,431
Accumulated net investment income (loss) -
Accumulated net realized gain (loss) from investment
securities and foreign currency transactions (6,098)
Net unrealized appreciation (depreciation) on:
Investment securities 4,164
Translation of assets and liabilities denominated in
foreign currencies (4)
-------
Net Assets $33,493
=======
Shares Outstanding:
Class A 788
Class B 2,470
Class C 382
Class L 186
Class M 267
Net Asset Value Per Share:
Class A $ 8.32
Class B 8.15
Class C 8.15
Class L 8.15
Class M 8.17
Maximum Offering Price Per Share (a):
Class A $ 8.80
Class M 8.25
(a) 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.
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the year ended October 31, 2003
(all amounts in thousands)
Investment Income:
Interest $ 98
Dividends 517
Income from loaned securities-net 5
Less withholding taxes on foreign dividends (6)
------
614
------
Expenses:
Management and advisory fees 423
Transfer agent fees 151
Printing and shareholder reports 21
Custody fees 29
Administration fees 30
Legal fees 3
Auditing and accounting fees 17
Trustees fees 3
Registration fees 80
Other 3
Distribution and service fees:
Class A 63
Class B 181
Class C 33
Class L 8
Class M 19
------
Total expenses 1,064
Less:
Advisory fee waiver (84)
------
Net expenses 980
------
Net Investment Income (Loss) (366)
------
Net Realized Gain (Loss) from:
Investment securities (863)
Foreign currency transactions (37)
------
(900)
------
Net Increase (Decrease) in Unrealized Appreciation
(Depreciation) on:
Investment securities 7,202
Translation of assets and liabilities denominated in
foreign currencies (4)
------
7,198
------
Net Gain (Loss) on Investment Securities and Foreign
Currency Transactions 6,298
------
Net Increase (Decrease) in Net Assets Resulting
from Operations $5,932
======
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Janus Growth & Income 6
IDEX Janus Growth & Income
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended
(all amounts in thousands)
October 31, October 31,
2003 2002
----------- ------------
Increase (Decrease) In Net Assets From:
Operations:
Net investment income (loss) $ (366) $ (276)
Net realized gain (loss) from investment
securities and foreign currency
transactions (900) (4,380)
Net unrealized appreciation
(depreciation) on investment
securities and foreign currency
translations 7,198 (1,190)
-------- --------
5,932 (5,846)
-------- --------
Distributions to Shareholders:
From net investment income:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
-------- --------
- -
-------- --------
From net realized gains:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
-------- --------
- -
-------- --------
Capital Share Transactions:
Proceeds from shares sold:
Class A 14,068 17,574
Class B 6,262 11,751
Class C 966 3,030
Class L 1,608 -
Class M 987 1,169
-------- --------
23,891 33,524
-------- --------
Dividends and distributions reinvested:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
-------- --------
- -
-------- --------
Cost of shares redeemed:
Class A (27,993) (1,938)
Class B (4,407) (4,711)
Class C (1,685) (1,382)
Class L (231) -
Class M (941) (652)
-------- --------
(35,257) (8,683)
-------- --------
(11,366) 24,841
-------- --------
Net increase (decrease) in net assets (5,434) 18,995
-------- --------
Net Assets:
Beginning of year 38,927 19,932
-------- --------
End of year $ 33,493 $ 38,927
======== ========
Accumulated Net Investment Income (Loss) $ - $ (1)
======== ========
Share Activity:
Shares issued:
Class A 1,935 2,228
Class B 846 1,408
Class C 130 362
Class L 219 -
Class M 136 139
-------- --------
3,266 4,137
-------- --------
Shares issued-reinvested from distributions:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
-------- --------
- -
-------- --------
Shares redeemed:
Class A (3,591) (244)
Class B (592) (610)
Class C (228) (177)
Class L (33) -
Class M (129) (81)
-------- --------
(4,573) (1,112)
-------- --------
Net increase (decrease) in shares
outstanding (1,307) 3,025
======== ========
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Janus Growth & Income 7
IDEX Janus Growth & Income
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share of beneficial interest outstanding throughout each period
----------------------------------------------------------------------------------------------------------
Investment Operations Distributions
----------------------------------------- -------------------------------------
Net Asset Net Asset
For the Value, Net Net Realized From Net From Net Value,
Period Beginning Investment and Unrealized Total Investment Realized Total End
Ended (d)(g) of Period Income (Loss) Gain (Loss) Operations Income Gains Distributions of Period
- ---------------------------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 $ 7.26 $ (0.04) $ 1.10 $ 1.06 $ - $ - $ - $ 8.32
10/31/2002 8.44 (0.03) (1.15) (1.18) - - - 7.26
10/31/2001 10.00 0.03 (1.59) (1.56) - - - 8.44
- ---------------------------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 7.16 (0.09) 1.08 0.99 - - - 8.15
10/31/2002 8.38 (0.09) (1.13) (1.22) - - - 7.16
10/31/2001 10.00 (0.03) (1.59) (1.62) - - - 8.38
- ---------------------------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 7.16 (0.09) 1.08 0.99 - - - 8.15
10/31/2002 8.38 (0.10) (1.12) (1.22) - - - 7.16
10/31/2001 10.00 (0.03) (1.59) (1.62) - - - 8.38
- ---------------------------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 7.11 (0.09) 1.13 1.04 - - - 8.15
- ---------------------------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 7.17 (0.08) 1.08 1.00 - - - 8.17
10/31/2002 8.39 (0.09) (1.13) (1.22) - - - 7.17
10/31/2001 10.00 (0.03) (1.58) (1.61) - - - 8.39
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
------------------------------------------------------------------------
Ratio of Expenses
Net Assets, to Average Net Investment
For the End of Net Assets (a) Income (Loss) Portfolio
Period Total Period ----------------------- to Average Turnover
Ended (g) Return (c) (000's) Net (e) Total (f) Net Assets (a) Rate (b)
- ----------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 14.60% $ 6,556 1.95% 2.15% (0.50)% 87%
10/31/2002 (13.94) 17,754 1.93 2.28 (0.41) 53
10/31/2001 (15.64) 3,881 1.75 3.26 0.34 44
- ----------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 13.83 20,130 2.60 2.80 (1.15) 87
10/31/2002 (14.56) 15,868 2.58 2.93 (1.06) 53
10/31/2001 (16.20) 11,884 2.40 3.91 (0.31) 44
- ----------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 13.83 3,110 2.60 2.80 (1.15) 87
10/31/2002 (14.56) 3,441 2.58 2.93 (1.06) 53
10/31/2001 (16.20) 2,469 2.40 3.91 (0.31) 44
- ----------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 14.63 1,515 2.60 2.80 (1.15) 87
- ----------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 13.95 2,182 2.50 2.70 (1.05) 87
10/31/2002 (14.53) 1,864 2.48 2.83 (0.96) 53
10/31/2001 (16.11) 1,698 2.30 3.81 (0.21) 44
- ----------------------------------------------------------------------------------------------------------------
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 are not annualized.
(d) Per share information is calculated based on average number of shares
outstanding.
(e) Ratio of Net Expenses to Average Net Assets is net of fee waivers and
reimbursements by the investment adviser, if any (see note 2).
(f) Ratio of Total Expenses to Average Net Assets includes all expenses before
fee waivers and reimbursements by the investment adviser.
(g) IDEX Janus Growth & Income ("the Fund") commenced operations on December
15, 2000. The inception date for the Fund's offering of share Class L was
November 11, 2002.
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Janus Growth & Income 8
IDEX Janus Growth & Income
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
At October 31, 2003
(all amounts in thousands)
NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
IDEX Mutual Funds is a Massachusetts business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company. IDEX Janus Growth & Income ("the Fund"), part of
IDEX Mutual Funds, began operations on December 15, 2000.
In the normal course of business, the Fund enters into contracts that contain a
variety of representations and warranties which provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown, as this would involve future claims that may be made against the Fund
and/or its affiliates that have not yet occurred. However, based on experience,
the Fund expects the risk of loss to be remote.
See the Prospectus and Statement of Additional Information for a description of
the Fund's investment objective.
In preparing the Fund's financial statements in accordance with accounting
principles generally accepted in the United States of America ("GAAP"),
estimates or assumptions (which could differ from actual results) may be used
that affect reported amounts and disclosures. The following policies were
consistently followed by the Fund, in accordance with GAAP.
Multiple class operations and expenses: The Fund currently offers five classes
of shares, each with a public offering price that reflects different sales
charges, if any, and expense levels. Effective November 11, 2002, Class C and M
shares were closed to new investors. Income, non-class specific expenses and
realized and unrealized gains and losses, are allocated daily to each class,
based upon the value of shares outstanding method as permitted under Rule 18f-3
of the 1940 Act. Each class bears its own specific expenses as well as a
portion of general, common expenses.
Security valuations: Fund investments traded on an exchange are valued at the
closing price on the day of valuation on the exchange where the security is
principally traded. With respect to securities traded on the NASDAQ INMS, such
closing price may be the last reported sales price or the NASDAQ Official
Closing Price.
Securities traded in the over-the-counter market and listed securities for
which no sale was reported on that date are valued at the last quoted bid
price.
Debt securities are valued by independent pricing services; however, those that
mature in sixty days or less are valued at amortized cost, which approximates
market.
Other securities for which quotations are not readily available are valued at
fair value determined in good faith, in accordance with procedures established
by and, under the supervision of the Board of Trustees and the Fund's Valuation
Committee.
Cash: The Fund may leave cash overnight in its cash account with the custodian,
Investors Bank & Trust Company ("IBT"). IBT has been contracted on behalf of
the Fund to invest the excess cash into a savings account, which at October 31,
2003, was paying an interest rate of 0.75%.
Directed brokerage: The sub-adviser, to the extent consistent with the best
execution and usual commission rate policies and practices, may place security
transactions of the Fund with broker/dealers with which IDEX Mutual Funds has
established a Directed Brokerage Program. A Directed Brokerage Program is any
arrangement under which a broker/dealer applies a portion of the commissions
received by such broker/dealer on the security transactions to the Fund. In no
event will commissions paid by the Fund be used to pay expenses that would
otherwise be borne by any other funds within IDEX Mutual Funds, or by any other
party. Directed commissions during the year ended October 31, 2003, of $54 are
included in net realized gains in the Statement of Operations.
Securities lending: The Fund may lend securities to enhance fund earnings from
investing cash collateral received in making such loans to qualified borrowers
(typically broker/dealers). The Fund has engaged its custodian bank, IBT, as a
lending agent to administer its securities lending program. IBT earned $2 of
program net income for its services. When the Fund makes a security loan, it
receives collateral as protection against the risk that the borrower will
default on the loan, and records an asset for the cash invested collateral and
a liability for the return of the collateral.
Securities on loan are included in Investment securities at value on the
Statement of Assets and Liabilities and remain on the Schedule of Investments.
Loans of securities are required to be secured by collateral at least equal to
102% of the value of the securities at inception of the loan, and not less then
100% thereafter. The Fund may invest cash collateral in short-term money market
instruments including: U.S. Treasury Bills, U.S. agency obligations, commercial
paper, money market mutual funds, repurchase agreements and other highly rated,
liquid investments. During the life of securities loans, the collateral and
securities loaned remain subject to fluctuation in value. IBT marks to market
securities loaned and the collateral each business day. If additional
collateral is due (at least $1), IBT collects additional cash collateral from
the borrowers. Although securities loaned will be fully collateralized at all
times, IBT may experience delays in, or may be prevented from, recovering the
collateral on behalf of the Fund. The Fund may recall a loaned security
position at any time from the borrower through IBT. In the event the borrower
fails to timely return a recalled security, IBT may indemnify the Fund by
purchasing replacement securities for the Fund at its own expense and claiming
the collateral to fund such a purchase. IBT absorbs the loss if the collateral
value is not sufficient to cover the cost of the replacement securities. If
replacement securities are not available, IBT will credit the equivalent cash
value to the Fund.
IDEX Mutual Funds Annual Report 2003
IDEX Janus Growth & Income 9
IDEX Janus Growth & Income
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 1-(continued)
Income from securities lending is included in the Statement of Operations. The
amount of collateral and value of securities on loan are included in the
Statement of Assets and Liabilities as well as on the Schedule of Investments.
Security transactions and investment income: Security transactions are recorded
on the trade date. Security gains and losses are calculated on the specific
identification basis. Dividend income is recorded on the ex-dividend date or,
in the case of foreign securities, as soon as the Fund is informed of the
ex-dividend date. Interest income, including accretion of discounts and
amortization of premiums, is recorded on the accrual basis commencing on the
settlement date.
Foreign currency denominated investments: The accounting records of the Fund
are maintained in U.S. dollars. Securities and other assets and liabilities
denominated in foreign currencies are translated into U.S. dollars at the
closing exchange rate each day. The cost of foreign securities is translated at
the exchange rate in effect when the investment was acquired. The Fund combines
fluctuations from currency exchange rates and fluctuations in value when
computing net realized and unrealized gains or losses from investments.
Net foreign currency gains and losses resulting from changes in exchange rates
include: 1) foreign currency fluctuations between trade date and settlement
date of investment security transactions; 2) gains and losses on forward
foreign currency contracts; and 3) the difference between the receivable
amounts of interest and dividends recorded in the accounting records in U.S.
dollars and the amounts actually received.
Foreign currency denominated assets may involve risks not typically associated
with domestic transactions, including unanticipated movements in exchange
currency rates, the degree of government supervision and regulation of security
markets, and the possibility of political or economic instability.
Forward foreign currency contracts: The Fund may enter into forward foreign
currency contracts to hedge against exchange rate risk arising from investments
in securities denominated in foreign currencies. Contracts are valued at the
contractual forward rate and are marked to market daily, with the change in
value recorded as an unrealized gain or loss. When the contracts are closed a
realized gain or loss is incurred. Risks may arise from changes in market value
of the underlying currencies and from the possible inability of counterparties
to meet the terms of their contracts. Open forward currency contracts at
October 31, 2003, are listed in the Schedule of Investments.
Dividend distributions: Distributions to shareholders are recorded on the
ex-dividend date and are determined in accordance with Federal income tax
regulations which may differ from GAAP.
NOTE 2. RELATED PARTY TRANSACTIONS
AEGON/Transamerica Fund Advisers, Inc. ("ATFA") is the Fund's investment
adviser. AEGON/Transamerica Fund Services, Inc. ("ATFS") is the Fund's
administrator. AFSG Securities Corp. ("AFSG") is the Fund's
distributor/principal underwriter. AEGON/Transamerica Investor Services, Inc.
("ATIS") is the 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. AUSA and WRL are wholly owned indirect
subsidiaries of AEGON NV, a Netherlands corporation.
Investment advisory fees: The Fund pays management fees to ATFA based on
average daily net assets ("ANA") at the following stated break points:
1.00% of the first $100 million of ANA
0.95% of the next $400 million of ANA
0.85% of ANA over $500 million
ATFA currently voluntarily waives its advisory fee and will reimburse the Fund
to the extent that operating expenses, excluding 12b-1 fees, exceed the
following stated annual limit:
1.60% Expense Limit
If total fund expenses fall below the annual expense limitations agreed to by
the adviser within the succeeding three years, the Fund may be required to pay
the advisor a portion or all of the waived advisory fees.
Advisory Fee Available for
Waived Recapture Through
-------------- ------------------
Fiscal Year 2003 84 10/31/2006
Fiscal Year 2002 104 10/31/2005
Fiscal Year 2001 173 10/31/2004
Distribution and service fees: The Fund has a 12b-1 distribution plan under the
1940 Act pursuant to which an annual fee, based on average daily net assets, is
paid to the distributor for various disbursements such as broker-dealer account
servicing fees and other promotional expenses of the Fund. The 12b-1 fee for
the Fund is comprised of a 0.25% service fee and the remaining amount is an
asset-based sales charge/distribution fee. The Fund is authorized under the
12b-1 plan to pay fees on each class up to the following limits:
Class A 0.35%
Class B 1.00%
Class C 1.00%
Class L 1.00%
Class M 0.90%
Underwriter commissions relate to front-end sales charges imposed for Class A
and M shares and contingent deferred sales charges from Classes B, L, M and
certain A share redemptions. For the year ended October 31, 2003, the
underwriter commissions are as follows:
IDEX Mutual Funds Annual Report 2003
IDEX Janus Growth & Income 10
IDEX Janus Growth & Income
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 2-(continued)
Received by Underwriter $ 47
Retained by Underwriter 5
Contingent Sales Charges 59
Administrative services: The Fund has entered into an agreement with ATFS for
financial and legal fund administration services, which include such items as
compliance, expenses, financial statements and other reporting, distributions,
tax returns, prospectus preparation, board of trustees meeting support and
other legal matters. Transfer agent fees are reflected separately from
Administration fees on the Statement of Operations. The Legal fees on the
Statement of Operations are for fees paid to external legal counsel. ATFS
provides its services to the Fund at cost and is reimbursed monthly.
Transfer agent fees: The Fund incurs ATIS annual per-account charges (not in
thousands) of $20.00 for each open shareholder account and $1.63 for each
closed account maintained, and certain out of pocket expenses.
Deferred compensation plan: Each eligible Fund Trustee may elect participation
in the Deferred Compensation Plan ("the Plan"). Under the Plan, such Trustees
may defer payment of a percentage of their total fees earned as a Fund Trustee.
These deferred amounts may be invested in any IDEX Fund. At October 31, 2003,
the value of invested plan amounts was $1. Invested plan amounts and the total
liability for deferred compensation to the Trustees under the Plan at October
31, 2003, are included in Net assets in the accompanying Statement of Assets
and Liabilities.
NOTE 3. INVESTMENT TRANSACTIONS
The cost of securities purchased and proceeds from securities sold (excluding
short-term securities) for the year ended October 31, 2003, were as follows:
Purchases of securities:
Long-Term excluding U.S. Government $ 32,370
U.S. Government 1,199
Proceeds from maturities and sales of securities:
Long-Term excluding U.S. Government 34,436
U.S. Government 3,743
NOTE 4. FEDERAL INCOME TAX MATTERS
The Fund has not made any provision for federal income or excise taxes due to
its policy to distribute all of its taxable income and capital gains to its
shareholders and otherwise qualify as a regulated investment company under the
Internal Revenue Code. Income and capital gain distributions are determined in
accordance with income tax regulations, which may differ from GAAP. These
differences are primarily due to differing treatments for items including, but
not limited to, wash sales, foreign currency transactions, net operating losses
and capital loss carryforwards.
Reclassifications between Undistributed net investment income (loss),
Undistributed net realized capital gains (loss) and Shares of beneficial
interest are made to reflect income and gains available for distribution under
federal tax regulations. Results of operations and net assets are not effected
by these reclassifications. These reclassifications are as follows:
Shares of beneficial interest, unlimited
shares authorized $ (363)
Accumulated net investment income (loss) 367
Accumulated net realized gain (loss) from
investment securities and foreign currency
transactions (4)
The tax basis components of distributable earnings as of October 31, 2003, are
as follows:
Undistributed Ordinary Income $ -
========
Undistributed Long-term Capital Gains $ -
========
Capital Loss Carryforward $ (5,628)
========
Net Unrealized Appreciation (Depreciation) $ 3,689
========
The capital loss carryforwards are available to offset future realized capital
gains through the periods listed:
Capital Loss
Carryforward Available through
- -------------- ------------------
$ 658 October 31, 2009
3,893 October 31, 2010
1,077 October 31, 2011
The aggregate cost of investments and composition of unrealized appreciation
(depreciation) for federal income tax purposes as of October 31, 2003, are as
follows:
Federal Tax Cost Basis $ 33,154
========
Unrealized Appreciation $ 3,936
Unrealized (Depreciation) (247)
--------
Net Unrealized Appreciation (Depreciation) $ 3,689
========
IDEX Mutual Funds Annual Report 2003
IDEX Janus Growth & Income 11
- --------------------------------------------------------------------------------
Report of Independent Certified Public Accountants
To the Board of Trustees and Shareholders of
IDEX Janus Growth & Income
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of IDEX Janus Growth & Income (the
"Fund") (one of the portfolios constituting the IDEX Mutual Funds) at October
31, 2003, and the results of its operations, the changes in its net assets and
the financial highlights for each of the periods indicated, in conformity with
accounting principles generally accepted in the United States of America. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with auditing standards generally accepted in the United States of America,
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at October 31, 2003 by correspondence with the
custodian and brokers, provide a reasonable basis for our opinion.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Tampa, Florida
December 18, 2003
IDEX Mutual Funds Annual Report 2003
IDEX Janus Growth & Income 12
IDEX Jennison Equity Opportunity
- --------------------------------------------------------------------------------
MARKET ENVIRONMENT
The markets have struggled in the past twelve months with geopolitical tension
in the Middle East, reduced earnings expectations and languishing economic
activity. As war uncertainty increased into the fall of last year, equities
dropped precipitously reaching a bottom in October.
In the first quarter of 2003, stocks, particularly mid cap stocks, remained
under pressure due to geopolitical concerns -- mainly the war and its impact on
the economy. An easing of these uncertainties and an increased tolerance for
risk moved the broader equity markets steadily higher during the second
quarter.
The broadening out of the market that began in the second quarter continued
into the third quarter, with many of our stocks posting significant gains.
Throughout the third quarter, investors returned to fundamentals, and therefore
to many of our holdings.
PERFORMANCE
For the year ended October 31, 2003, IDEX Jennison Equity Opportunity returned
24.13%. By comparison its benchmark, the Standard and Poor's 500 Composite
Stock Index, returned 20.79%.
STRATEGY REVIEW
The portfolio performed very well over the year, with a number of holdings
generating triple digit returns. Our risk/reward discipline has led us to take
profits in many of our winners, especially in the technology sector, where our
"profit-taking" has continued into the fourth quarter. Information technology
was our largest sector exposure at the beginning of this year, but is in the
bottom half of our sector weightings as of the end of October. Technology is a
good example of the contrarian value discipline that we employ. Our weighting
was minimal during the "bubble years" and then built-up during the bear market
of 2001 and 2002 (into the beginning of this reporting period) as we were able
to find solid companies with strong balance sheets at low valuations. We have
exited or reduced many of our technology holdings largely due to our valuation
discipline, as fundamentals continue to improve.
We added to our oil service stocks because we like the secular aspects of the
energy markets, and we took profits in insurance companies, as we were worried
about the talk of moderating pricing appearing in these companies' quarterly
earnings announcements. These insurance stocks also had produced very strong
returns for us, and we felt it appropriate to take some profits.
In addition, our weighting in healthcare stocks declined, as we exited specific
stock winners like Sepracor Inc., our best performer.
A weak 2002 Christmas selling season had a negative effect on retailers, such
as Circuit City Stores, Inc. -- Circuit City Group, which was our poorest
performer. Retailers could not sell enough volume to offset the negative margin
impact of the necessary discounting, and therefore industry-wide profits were
below original expectations.
/s/ Mark DeFranco
Mark G. DeFranco
/s/ Brian M. Gillott
Brian M. Gillott
Co-Fund Managers
Jennison Associates, LLC
IDEX Mutual Funds Annual Report 2003
IDEX Jennison Equity Opportunity 1
IDEX Jennison Equity Opportunity
- --------------------------------------------------------------------------------
Comparison of change in value of $10,000 investment in Class A shares and
its comparative index.
Inception of 2/1/96 through 10/31/03
Investment less sales charges - $9,452
[The following table was depicted as a mountain chart in the printed material.]
DATE Class A S&P 500
- ------------------ ---------------- -----------
2/1/1996 9,452 10,000
3/31/1996 9,488 10,190
6/30/1996 9,522 10,647
9/30/1996 9,883 10,976
12/31/1996 10,415 11,890
3/31/1997 10,135 12,210
6/30/1997 12,023 14,340
9/30/1997 13,549 15,413
12/31/1997 12,668 15,856
3/31/1998 13,930 18,066
6/30/1998 12,695 18,662
9/30/1998 9,595 16,809
12/31/1998 12,040 20,387
3/31/1999 13,545 21,402
6/30/1999 14,986 22,910
9/30/1999 13,405 21,481
12/31/1999 15,582 24,676
3/31/2000 15,712 25,241
6/30/2000 14,468 24,572
9/30/2000 14,274 24,334
12/31/2000 11,192 22,432
3/31/2001 11,184 19,774
6/30/2001 12,349 20,930
9/30/2001 10,691 17,859
12/31/2001 12,109 19,768
3/31/2002 12,279 19,822
6/30/2002 10,868 17,168
9/30/2002 8,848 14,204
12/31/2002 9,575 15,400
3/31/2003 8,822 14,914
6/30/2003 10,465 17,210
9/30/2003 10,910 17,666
10/31/2003 11,502 18,666
Average Annual Total Return for Periods Ended 10/31/03
- --------------------------------------------------------------------------------
From Inception
1 year 5 years Inception Date
----------- --------- ----------- ----------
Class A (NAV) 24.13% 1.08% 2.56% 2/1/96
Class A (POP) 17.30% -0.06% 1.82% 2/1/96
S&P 500(1) 20.79% 0.53% 8.39% 2/1/96
- -------------------------------------------------------------------
Class B (NAV) 23.33% 0.45% 1.93% 2/1/96
Class B (POP) 18.33% 0.25% 1.93% 2/1/96
- -------------------------------------------------------------------
Class C (NAV) 23.33% - -5.72% 11/1/99
- -------------------------------------------------------------------
Class L (NAV) - - 23.33% 11/11/02
Class L (POP) - - 21.33% 11/11/02
- -------------------------------------------------------------------
Class M (NAV) 23.31% 0.55% 2.03% 2/1/96
Class M (POP) 21.08% 0.34% 1.90% 2/1/96
- -------------------------------------------------------------------
NOTES
(1) The Standard & Poor's 500 Composite Stock (S&P 500) 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 Micropal(R)(C) 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 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.
Periods less than 1 year represent total return and are not annualized.
This material must be preceded or accompanied by a current prospectus, which
includes specific contents regarding the investment objectives and policies of
this fund.
IDEX Mutual Funds Annual Report 2003
IDEX Jennison Equity Opportunity 2
IDEX Jennison Equity Opportunity
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
At October 31, 2003
(all amounts except share amounts in thousands)
Shares Value
-------------------- ---------------
PREFERRED STOCKS (1.3%)
Motion Pictures (1.3%)
News Corporation Limited (The)-ADR (b) 32,900 $ 971
--------
Total Preferred Stocks (cost: $778) 971
--------
COMMON STOCKS (91.5%)
Aerospace (4.0%)
Goodrich Corporation 18,300 505
Lockheed Martin Corporation 17,300 802
Northrop Grumman Corporation 17,600 1,573
Air Transportation (1.0%)
AMR Corporation (a)(b) 55,800 741
Apparel & Accessory Stores (2.3%)
Limited, Inc. (The) 29,000 510
Nordstrom, Inc. (b) 36,800 1,122
Apparel Products (2.0%)
Polo Ralph Lauren Corporation 47,400 1,441
Automotive (3.5%)
General Motors Corporation-Class H (a) 127,700 2,098
Navistar International Corporation (a)(b) 9,800 396
Business Services (2.4%)
DoubleClick Inc. (a) 36,200 302
Interpublic Group of Companies, Inc. (The) (b) 25,800 384
Manpower Inc. 23,000 1,067
Chemicals & Allied Products (3.2%)
Great Lakes Chemical Corporation 44,900 965
IMC Global Inc. 60,400 422
Olin Corporation 54,600 951
Commercial Banks (4.9%)
Bank of New York Company, Inc. (The) 44,300 1,383
Bank One Corporation (b) 17,700 751
Mellon Financial Corporation 25,400 759
Southwest Bancorporation of Texas, Inc. (b) 18,600 668
Communication (1.2%)
Viacom, Inc.-Class B 22,000 877
Communications Equipment (0.7%)
Tellabs, Inc. (a) 68,600 517
Computer & Data Processing Services (5.0%)
Ceridian Corporation (a) 67,600 1,420
Mentor Graphics Corporation (a) 38,400 643
Microsoft Corporation 42,100 1,101
Sybase, Inc. (a) 22,500 403
Computer & Office Equipment (1.6%)
Symbol Technologies, Inc. 90,000 1,124
Drug Stores & Proprietary Stores (1.5%)
Medco Health Solutions, Inc. (a) 32,400 1,076
Electronic & Other Electric Equipment (0.7%)
Maytag Corporation 19,800 503
Electronic Components & Accessories (1.2%)
Solectron Corporation (a) 59,500 $ 330
Vishay Intertechnology, Inc. (a) 29,000 544
Food Stores (0.9%)
Kroger Co. (The) (a) 38,900 680
Furniture & Home Furnishings Stores (0.6%)
Linens 'n Things, Inc. (a) 13,700 404
Health Services (0.7%)
Quest Diagnostics Incorporated (a) 7,100 480
Holding & Other Investment Offices (1.0%)
Janus Capital Group, Inc. (b) 49,100 694
Industrial Machinery & Equipment (1.3%)
ASM Lithography Holding NV-NY
Registered Shares (a)(b) 25,400 446
FMC Technologies, Inc. (a) 25,370 509
Instruments & Related Products (1.4%)
Agilent Technologies, Inc. (a) 39,100 974
Insurance (2.0%)
CNA Financial Corporation (a) 7,500 162
XL Capital Ltd.-Class A 18,900 1,314
Insurance Agents, Brokers & Service (1.3%)
Hartford Financial Services Group, Inc. (The) (b) 8,000 439
National Financial Partners Corp. (a) 17,900 485
Management Services (1.5%)
BearingPoint, Inc. (a) 42,900 403
Hewitt Associates, Inc.-Class A (a) 25,800 663
Medical Instruments & Supplies (1.1%)
Apogent Technologies, Inc. (a) 36,300 797
Metal Mining (1.2%)
Harmony Gold Mining Company
Limited-ADR 56,300 851
Mining (2.7%)
Arch Coal, Inc. (b) 55,600 1,363
Consol Energy Inc. (b) 27,300 592
Oil & Gas Extraction (11.2%)
Halliburton Company 48,400 1,156
Rowan Companies, Inc. (a) 57,800 1,385
Schlumberger Limited 28,600 1,344
Spinnaker Exploration Company (a)(b) 40,100 1,026
Total Fina Elf SA-ADR 11,800 921
Transocean Inc. (a) 51,600 990
Weatherford International Ltd. (a) 35,600 1,237
Paper & Allied Products (4.9%)
Kimberly-Clark Corporation 22,900 1,209
MeadWestvaco Corporation 31,800 824
Temple-Inland Inc. (b) 28,000 1,513
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Jennison Equity Opportunity 3
IDEX Jennison Equity Opportunity
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Shares Value
-------- -----------
Paper & Paper Products (2.4%)
Boise Cascade Corporation 61,900 $ 1,736
Pharmaceuticals (7.4%)
Abbott Laboratories 23,400 997
AmerisourceBergen Corporation (b) 13,300 755
Bristol-Myers Squibb Co. 26,300 667
Cambrex Corporation 24,900 589
Pfizer Inc. 51,700 1,634
Wyeth 16,300 719
Printing & Publishing (1.4%)
New York Times Company (The)-Class A 13,500 642
Pearson PLC-ADR 34,400 361
Radio & Television Broadcasting (1.3%)
Radio One, Inc.-Class D (a) 57,600 916
Railroads (1.4%)
CSX Corporation 32,100 1,021
Restaurants (2.3%)
Wendy's International, Inc. 45,300 1,678
Retail Trade (0.8%)
Toys "R" Us, Inc. (a)(b) 43,400 564
Security & Commodity Brokers (3.2%)
A.G. Edwards, Inc. 25,600 1,037
Merrill Lynch & Co., Inc. 21,400 1,267
Telecommunications (1.5%)
SBC Communications Inc. 43,900 1,053
Variety Stores (1.3%)
Costco Wholesale Corporation (a)(b) 27,000 955
Wholesale Trade Durable Goods (1.5%)
Fisher Scientific International Inc. (a) 26,400 1,063
--------
Total Common Stocks (cost: $60,001) 65,893
--------
Principal Value
-------------- ----------
SECURITY LENDING COLLATERAL (16.1%)
Debt (14.1%)
Bank Notes (1.7%)
Canadian Imperial Bank of Commerce
1.12%, due 11/04/2003 $ 504 $ 504
Fleet National Bank
1.06%, due 01/21/2004 706 706
Euro Dollar Terms (7.9%)
Bank of Montreal
1.03%, due 11/13/2003 404 404
1.04%, due 11/14/2003 354 354
Principal Value
-------------- ----------
Euro Dollar Terms (continued)
Bank of Nova Scotia (The)
1.06%, due 11/12/2003 $ 202 $ 202
Bank of Scotland
1.04%, due 11/14/2003 404 404
Citigroup Inc.
1.08%, due 01/05/2004 605 605
Credit Agricole Indosuez
1.08%, due 01/06/2004 444 444
Den Danske Bank
1.04%, due 11/10/2003 202 202
1.08%, due 01/20/2004 605 605
Royal Bank of Canada
1.04%, due 11/24/2003 504 504
1.06%, due 12/08/2003 202 202
Royal Bank of Scotland Group PLC (The)
1.08%, due 01/15/2004 605 605
SouthTrust Bank
1.08%, due 01/16/2004 605 605
Wells Fargo & Company
1.04%, due 11/20/2003 605 605
Promissory Notes (1.0%)
Goldman Sachs Group, Inc. (The)
1.15%, due 11/03/2003 706 706
Repurchase Agreements (3.5%) (c)
Goldman Sachs Group, Inc. (The)
1.10% Repurchase Agreement dated
10/31/2003 to be repurchased at $202
on 11/03/2003 202 202
Merrill Lynch & Co., Inc.
1.10% Repurchase Agreement dated
10/31/2003 to be repurchased at $2,321
on 11/03/2003 2,321 2,321
Shares Value
-------------- -----------
Investment Companies (2.0%)
Money Market Funds (2.0%)
Merrimac Cash Series Fund-
Premium Class
1-day yield of 0.97% 1,412,253 $ 1,412
--------
Total Security Lending Collateral (cost: $11,592) 11,592
--------
Total Investment Securities (cost: $72,371) $ 78,456
========
SUMMARY:
Investments, at value 108.9 % $ 78,456
Liabilities in excess of other assets (8.9)% (6,412)
--------- --------
Net assets 100.0 % $ 72,044
========= ========
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 (see Note
1). The value at October 31, 2003, of all securities on loan is $11,168.
(c) Cash collateral for the Repurchase Agreements, valued at $2,572, 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
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Jennison Equity Opportunity 4
IDEX Jennison Equity Opportunity
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
At October 31, 2003
(all amounts except per share amounts in thousands)
Assets:
Investment securities, at value (cost: $72,371)
(including $11,168 of securities loaned) $ 78,456
Cash 4,821
Receivables:
Investment securities sold 740
Shares of beneficial interest sold 45
Interest 1
Dividends 58
Other 13
--------
84,134
--------
Liabilities:
Investment securities purchased 217
Accounts payable and accrued liabilities:
Shares of beneficial interest redeemed 93
Management and advisory fees 38
Distribution fees 50
Transfer agent fees 46
Payable for securities on loan 11,592
Other 54
--------
12,090
--------
Net Assets $ 72,044
========
Net Assets Consist of:
Shares of beneficial interest, unlimited shares authorized $ 80,269
Accumulated net investment income (loss) (3)
Accumulated net realized gain (loss) from investment
securities (14,306)
Net unrealized appreciation (depreciation) on investment
securities 6,084
--------
Net Assets $ 72,044
========
Shares Outstanding:
Class A 2,207
Class B 4,607
Class C 940
Class L 75
Class M 909
Net Asset Value Per Share:
Class A $ 8.54
Class B 8.14
Class C 8.14
Class L 8.14
Class M 8.20
Maximum Offering Price Per Share (a):
Class A $ 9.04
Class M 8.28
(a) 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.
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the year ended October 31, 2003
(all amounts in thousands)
Investment Income:
Interest $ 13
Dividends 825
Income from loaned securities-net 13
Less withholding taxes on foreign dividends (7)
--------
844
--------
Expenses:
Management and advisory fees 559
Transfer agent fees 315
Printing and shareholder reports 50
Custody fees 23
Administration fees 31
Legal fees 5
Auditing and accounting fees 19
Trustees fees 6
Registration fees 70
Other 4
Distribution and service fees:
Class A 64
Class B 359
Class C 79
Class L 3
Class M 69
--------
Total expenses 1,656
Less:
Advisory fee waiver (104)
--------
Net expenses 1,552
--------
Net Investment Income (Loss) (708)
--------
Net Realized and Unrealized Gain (Loss):
Realized gain (loss) from investment securities (2,454)
Increase (decrease) in unrealized appreciation
(depreciation) on investment securities 17,691
--------
Net Gain (Loss) on Investment Securities 15,237
--------
Net Increase (Decrease) in Net Assets Resulting from
Operations $ 14,529
========
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Jennison Equity Opportunity 5
IDEX Jennison Equity Opportunity
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended
(all amounts in thousands)
October 31, October 31,
2003 2002
----------- -----------
Increase (Decrease) In Net Assets From:
Operations:
Net investment income (loss) $ (708) $ (893)
Net realized gain (loss) from investment
securities (2,454) (8,820)
Net unrealized appreciation
(depreciation) on investment
securities 17,691 (7,380)
-------- --------
14,529 (17,093)
-------- --------
Distributions to Shareholders:
From net investment income:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
-------- --------
- -
-------- --------
From net realized gains:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
-------- --------
- -
-------- --------
Capital Share Transactions:
Proceeds from shares sold:
Class A 4,065 21,526
Class B 3,745 27,698
Class C 1,689 8,934
Class L 589 -
Class M 763 7,158
-------- --------
10,851 65,316
-------- --------
Dividends and distributions reinvested:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
-------- --------
- -
-------- --------
Cost of shares redeemed:
Class A (11,152) (12,762)
Class B (10,927) (13,882)
Class C (4,487) (5,074)
Class L (64) -
Class M (2,917) (3,091)
-------- --------
(29,547) (34,809)
-------- --------
(18,696) 30,507
-------- --------
Net increase (decrease) in net assets (4,167) 13,414
-------- --------
Net Assets:
Beginning of year 76,211 62,797
-------- --------
End of year $ 72,044 $ 76,211
======== ========
Accumulated Net Investment Income (Loss) $ (3) $ (3)
======== ========
October 31, October 31,
2003 2002
----------- -----------
Share Activity:
Shares issued:
Class A 549 2,604
Class B 533 3,439
Class C 241 1,118
Class L 84 -
Class M 110 864
------ ------
1,517 8,025
------ ------
Shares issued-reinvested from distributions:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
------ ------
- -
------ ------
Shares redeemed:
Class A (1,514) (1,629)
Class B (1,584) (1,887)
Class C (657) (690)
Class L (9) -
Class M (413) (419)
------ ------
(4,177) (4,625)
------ ------
Net increase (decrease) in shares
outstanding (2,660) 3,400
====== ======
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Jennison Equity Opportunity 6
IDEX Jennison Equity Opportunity
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share of beneficial interest outstanding throughout each period
------------------------------------------------------------------------------------------------------------
Investment Operations Distributions
-------------------------------------------- -------------------------------------
Net Asset Net Asset
For the Value, Net Net Realized From Net From Net Value,
Period Beginning Investment and Unrealized Total Investment Realized Total End
Ended (d)(g) of Period Income (Loss) Gain (Loss) Operations Income Gains Distributions of Period
- -----------------------------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 $ 6.88 $(0.04) $ 1.70 $ 1.66 $ - $ - $ - $ 8.54
10/31/2002 8.04 (0.05) (1.11) (1.16) - - - 6.88
10/31/2001 10.26 (0.01) (1.17) (1.18) - (1.04) (1.04) 8.04
10/31/2000 12.14 (0.13) (1.54) (1.67) - (0.21) (0.21) 10.26
10/31/1999 10.14 0.06 2.78 2.84 - (0.84) (0.84) 12.14
- -----------------------------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 6.60 (0.08) 1.62 1.54 - - - 8.14
10/31/2002 7.77 (0.10) (1.07) (1.17) - - - 6.60
10/31/2001 10.01 (0.05) (1.15) (1.20) - (1.04) (1.04) 7.77
10/31/2000 11.93 (0.17) (1.54) (1.71) - (0.21) (0.21) 10.01
10/31/1999 10.02 (0.03) 2.78 2.75 - (0.84) (0.84) 11.93
- -----------------------------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 6.60 (0.08) 1.62 1.54 - - - 8.14
10/31/2002 7.77 (0.10) (1.07) (1.17) - - - 6.60
10/31/2001 10.01 (0.05) (1.15) (1.20) - (1.04) (1.04) 7.77
10/31/2000 11.93 (0.17) (1.54) (1.71) - (0.21) (0.21) 10.01
- -----------------------------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 6.60 (0.09) 1.63 1.54 - - - 8.14
- -----------------------------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 6.65 (0.08) 1.63 1.55 - - - 8.20
10/31/2002 7.81 (0.10) (1.06) (1.16) - - - 6.65
10/31/2001 10.05 (0.04) (1.16) (1.20) - (1.04) (1.04) 7.81
10/31/2000 11.96 (0.16) (1.54) (1.70) - (0.21) (0.21) 10.05
10/31/1999 10.04 (0.02) 2.78 2.76 - (0.84) (0.84) 11.96
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
-----------------------------------------------------------------------
Ratio of Expenses
Net Assets, to Average Net Investment
For the End of Net Assets (a) Income (Loss) Portfolio
Period Total Period ----------------------- to Average Turnover
Ended (g) Return (c) (000's) Net (e) Total (f) Net Assets (a) Rate (b)
- ---------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 24.13% $ 18,833 1.75% 1.90% (0.54)% 100%
10/31/2002 (14.47) 21,836 1.75 1.82 (0.52) 98
10/31/2001 (11.08) 17,670 1.55 2.44 (0.11) 158
10/31/2000 (14.06) 4,147 1.55 2.66 (0.87) 244
10/31/1999 30.07 4,537 1.64 2.87 (0.99) 126
- ---------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 23.33 37,500 2.40 2.55 (1.19) 100
10/31/2002 (15.10) 37,363 2.40 2.47 (1.17) 98
10/31/2001 (11.54) 31,922 2.20 3.09 (0.76) 158
10/31/2000 (14.70) 3,483 2.20 3.31 (1.52) 244
10/31/1999 29.45 3,868 2.29 3.52 (1.64) 126
- ---------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 23.33 7,654 2.40 2.55 (1.19) 100
10/31/2002 (15.10) 8,957 2.40 2.47 (1.17) 98
10/31/2001 (11.54) 7,211 2.20 3.09 (0.76) 158
10/31/2000 (14.70) 271 2.20 3.31 (1.51) 244
- ---------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 23.33 607 2.40 2.55 (1.19) 100
- ---------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 23.31 7,450 2.30 2.45 (1.09) 100
10/31/2002 (14.91) 8,055 2.30 2.37 (1.07) 98
10/31/2001 (11.48) 5,994 2.10 2.99 (0.66) 158
10/31/2000 (14.60) 946 2.10 3.21 (1.42) 244
10/31/1999 29.54 1,338 2.19 3.42 (1.54) 126
- ---------------------------------------------------------------------------------------------------------------
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Jennison Equity Opportunity 7
IDEX Jennison Equity Opportunity
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (continued)
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 are not annualized.
(d) Per share information is calculated based on average number of shares
outstanding for the periods ended 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 (see note 2).
(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 Fund's offering of share classes C and L are as
follows:
Class C - November 1, 1999
Class L - November 11, 2002
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Jennison Equity Opportunity 8
IDEX Jennison Equity Opportunity
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
At October 31, 2003
(all amounts in thousands)
NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
IDEX Mutual Funds is a Massachusetts business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company. IDEX Jennison Equity Opportunity ("the Fund"),
part of IDEX Mutual Funds, began operations on February 1, 1996.
In the normal course of business, the Fund enters into contracts that contain a
variety of representations and warranties and which provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown, as this would involve future claims that may be made against the Fund
and/or its affiliates that have not yet occurred. However, based on experience,
the Fund expects the risk of loss to be remote.
See the Prospectus and Statement of Additional Information for a description of
the Fund's investment objective.
In preparing the Fund's financial statements in accordance with accounting
principles generally accepted in the United States of America ("GAAP"),
estimates or assumptions (which could differ from actual results) may be used
that affect reported amounts and disclosures. The following policies were
consistently followed by the Fund, in accordance with GAAP.
Multiple class operations and expenses: The Fund currently offers five classes
of shares, each with a public offering price that reflects different sales
charges, if any, and expense levels. Effective November 11, 2002, Class C and M
shares were closed to new investors. Income, non-class specific expenses and
realized and unrealized gains and losses, are allocated daily to each class,
based upon the value of shares outstanding method as permitted under Rule 18f-3
of the 1940 Act. Each class bears its own specific expenses as well as a
portion of general, common expenses.
Security valuations: Fund investments traded on an exchange are valued at the
closing price on the day of valuation on the exchange where the security is
principally traded. With respect to securities traded on the NASDAQ INMS, such
closing price may be the last reported sales price or the NASDAQ Official
Closing Price.
Securities traded in the over-the-counter market and listed securities for
which no sale was reported on that date are valued at the last quoted bid
price.
Debt securities are valued by independent pricing services; however, those that
mature in sixty days or less are valued at amortized cost, which approximates
market.
Other securities for which quotations are not readily available are valued at
fair value determined in good faith, in accordance with procedures established
by and, under the supervision of the Board of Trustees and the Fund's Valuation
Committee.
Cash: The Fund may leave cash overnight in its cash account with the custodian,
Investors Bank & Trust Company ("IBT"). IBT has been contracted on behalf of
the Fund to invest the excess cash into a savings account, which at October 31,
2003, was paying an interest rate of 0.75%.
Directed brokerage: The sub-adviser, to the extent consistent with the best
execution and usual commission rate policies and practices, may place security
transactions of the Fund with broker/dealers with which IDEX Mutual Funds has
established a Directed Brokerage Program. A Directed Brokerage Program is any
arrangement under which a broker/dealer applies a portion of the commissions
received by such broker/dealer on the security transactions to the Fund. In no
event will commissions paid by the Fund be used to pay expenses that would
otherwise be borne by any other funds within IDEX Mutual Funds, or by any other
party. Directed commissions during the year ended October 31, 2003, of $15 are
included in net realized gains in the Statement of Operations.
Securities lending: The Fund may lend securities to enhance fund earnings from
investing cash collateral received in making such loans to qualified borrowers
(typically broker/dealers). The Fund has engaged its custodian bank, IBT, as a
lending agent to administer its securities lending program. IBT earned $3 of
program net income for its services. When the Fund makes a security loan, it
receives cash collateral as protection against the risk that the borrower will
default on the loan, and records an asset for the cash invested collateral and
a liability for the return of the collateral.
Securities on loan are included in Investment securities at value on the
Statement of Assets and Liabilities and remain on the Schedule of Investments.
Loans of securities are required to be secured by collateral at least equal to
102% of the value of the securities at inception of the loan, and not less then
100% thereafter. The Fund may invest cash collateral in short-term money market
instruments including: U.S. Treasury Bills, U.S. agency obligations, commercial
paper, money market mutual funds, repurchase agreements and other highly rated,
liquid investments. During the life of securities loans, the collateral and
securities loaned remain subject to fluctuation in value. IBT marks to market
securities loaned and the collateral each business day. If additional
collateral is due (at least $1), IBT collects additional cash collateral from
the borrowers. Although securities loaned will be fully collateralized at all
times, IBT may experience delays in, or may be prevented from, recovering the
collateral on behalf of the Fund. The Fund may recall a loaned security
position at any time from the borrower through IBT. In the event the borrower
fails to timely return a recalled security, IBT may indemnify the Fund by
purchasing replacement securities for the Fund at its own expense and claiming
the collateral to fund such a purchase. IBT absorbs the loss if the collateral
value is not sufficient to cover the cost of the replacement securities. If
replacement securities are not available, IBT will credit the equivalent cash
value to the Fund.
Income from securities lending is included in the Statement of Operations. The
amount of collateral and value of securities on loan are
IDEX Mutual Funds Annual Report 2003
IDEX Jennison Equity Opportunity 9
IDEX Jennison Equity Opportunity
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 1-(continued)
included in the Statement of Assets and Liabilities as well as on the Schedule
of Investments.
Security transactions and investment income: Security transactions are recorded
on the trade date. Security gains and losses are calculated on the specific
identification basis. Dividend income is recorded on the ex-dividend date or,
in the case of foreign securities, as soon as the Fund is informed of the
ex-dividend date. Interest income, including accretion of discounts and
amortization of premiums, is recorded on the accrual basis commencing on the
settlement date.
Dividend distributions: Distributions to shareholders are recorded on the
ex-dividend date and are determined in accordance with Federal income tax
regulations which may differ from GAAP.
NOTE 2. RELATED PARTY TRANSACTIONS
AEGON/Transamerica Fund Advisers, Inc. ("ATFA") is the Fund's investment
adviser. AEGON/Transamerica Fund Services, Inc. ("ATFS") is the Fund's
administrator. AFSG Securities Corp. ("AFSG") is the Fund's
distributor/principal underwriter. AEGON/Transamerica Investor Services, Inc.
("ATIS") is the 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. AUSA and WRL are wholly owned indirect
subsidiaries of AEGON NV, a Netherlands corporation.
Investment advisory fees: The Fund pays management fees to ATFA based on
average daily net assets ("ANA") at the following stated break points:
0.80% of the first $500 million of ANA
0.70% of ANA over $500 million
ATFA currently voluntarily waives its advisory fee and will reimburse the Fund
to the extent that operating expenses, excluding 12b-1 fees, exceed the
following stated annual limit:
1.40% Expense Limit
If total fund expenses fall below the annual expense limitations agreed to by
the adviser within the succeeding three years, the Fund may be required to pay
the advisor a portion or all of the waived advisory fees.
Distribution and service fees: The Fund has a 12b-1 distribution plan under the
1940 Act pursuant to which an annual fee, based on average daily net assets, is
paid to the distributor for various disbursements such as broker-dealer account
servicing fees and other promotional expenses of the Fund. The 12b-1 fee for
the Fund is comprised of a 0.25% service fee and the remaining amount is an
asset-based sales charge/distribution fee. The Fund is authorized under the
12b-1 plan to pay fees on each class up to the following limits:
Class A 0.35%
Class B 1.00%
Class C 1.00%
Class L 1.00%
Class M 0.90%
Underwriter commissions relate to front-end sales charges imposed for Class A
and M shares and contingent deferred sales charges from Classes B, L, M and
certain A share redemptions. For the year ended October 31, 2003, the
underwriter commissions were as follows:
Received by Underwriter $ 70
Retained by Underwriter 5
Contingent Sales Charges 185
Administrative services: The Fund has entered into an agreement with ATFS for
financial and legal fund administration services, which include such items as
compliance, expenses, financial statements and other reporting, distributions,
tax returns, prospectus preparation, board of trustees meeting support and
other legal matters. Transfer agent fees are reflected separately from
Administration fees on the Statement of Operations. The Legal fees on the
Statement of Operations are for fees paid to external legal counsel. ATFS
provides its services to the Fund at cost and is reimbursed monthly.
Transfer agent fees: The Fund incurs ATIS annual per-account charges (not in
thousands) of $20.00 for each open shareholder account and $1.63 for each
closed account maintained, and certain out of pocket expenses.
Deferred compensation plan: Each eligible Fund Trustee may elect participation
in the Deferred Compensation Plan ("the Plan"). Under the Plan, such Trustees
may defer payment of a percentage of their total fees earned as a Fund Trustee.
These deferred amounts may be invested in any IDEX Fund. At October 31, 2003,
the value of invested plan amounts was $3. Invested plan amounts and the total
liability for deferred compensation to the Trustees under the Plan at October
31, 2003, are included in Net assets in the accompanying Statement of Assets
and Liabilities.
NOTE 3. INVESTMENT TRANSACTIONS
The cost of securities purchased and proceeds from securities sold (excluding
short-term securities) for the year ended October 31, 2003, were as follows:
Purchases of securities:
Long-Term excluding U.S. Government $ 66,091
U.S. Government -
Proceeds from maturities and sales of securities:
Long-Term excluding U.S. Government 86,138
U.S. Government -
IDEX Mutual Funds Annual Report 2003
IDEX Jennison Equity Opportunity 10
IDEX Jennison Equity Opportunity
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 4. FEDERAL INCOME TAX MATTERS
The Fund has not made any provision for federal income or excise taxes due to
its policy to distribute all of its taxable income and capital gains to its
shareholders and otherwise qualify as a regulated investment company under the
Internal Revenue Code. Income and capital gain distributions are determined in
accordance with income tax regulations, which may differ from GAAP. These
differences are primarily due to differing treatments for items including, but
not limited to, wash sales, foreign currency transactions, net operating losses
and capital loss carryforwards.
Reclassifications between Undistributed net investment income (loss),
Undistributed net realized capital gains (loss) and Shares of beneficial
interest are made to reflect income and gains available for distribution under
federal tax regulations. Results of operations and net assets are not effected
by these reclassifications. These reclassifications are as follows:
Shares of beneficial interest, unlimited
shares authorized $ (708)
Accumulated net investment income (loss) 708
Accumulated net realized gain (loss) from
investment securities -
The tax basis components of distributable earnings as of October 31, 2003, are
as follows:
Undistributed Ordinary Income $ -
=========
Undistributed Long-term Capital Gains $ -
=========
Capital Loss Carryforward $ (13,853)
=========
Net Unrealized Appreciation (Depreciation) $ 5,632
=========
The capital loss carryforwards are available to offset future realized capital
gains through the periods listed:
Capital Loss
Carryforward Available through
- -------------- ------------------
$ 2,778 October 31, 2009
8,055 October 31, 2010
3,020 October 31, 2011
The aggregate cost of investments and composition of unrealized appreciation
(depreciation) for federal income tax purposes as of October 31, 2003, are as
follows:
Federal Tax Cost Basis $ 72,824
========
Unrealized Appreciation $ 7,464
Unrealized (Depreciation) (1,832)
--------
Net Unrealized Appreciation (Depreciation) $ 5,632
========
IDEX Mutual Funds Annual Report 2003
IDEX Jennison Equity Opportunity 11
- --------------------------------------------------------------------------------
Report of Independent Certified Public Accountants
To the Board of Trustees and Shareholders of
IDEX Jennison Equity Opportunity
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of IDEX Jennison Equity Opportunity
(the "Fund") (one of the portfolios constituting the IDEX Mutual Funds) at
October 31, 2003, and the results of its operations, the changes in its net
assets and the financial highlights for each of the periods indicated, in
conformity with accounting principles generally accepted in the United States
of America. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Fund's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with auditing standards generally accepted in the
United States of America, which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits, which included confirmation of securities at October 31, 2003 by
correspondence with the custodian and brokers, provide a reasonable basis for
our opinion.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Tampa, Florida
December 18, 2003
IDEX Mutual Funds Annual Report 2003
IDEX Jennison Equity Opportunity 12
IDEX LKCM Strategic Total Return
- --------------------------------------------------------------------------------
MARKET ENVIRONMENT
After a difficult start, the equity markets staged a strong rally in the final
nine months of the fiscal year ending October 31, 2003. The volatility seen
throughout 2001-2002 continued into 2003, but the prevailing direction of the
equity market was decidedly positive. Investors were encouraged by the low
interest rate environment, fewer corporate accounting scandals, tax cuts and
signs of an economic rebound in recent months.
PERFORMANCE
For the year ended October 31, 2003, IDEX LKCM Strategic Total Return returned
13.43%. By comparison its primary benchmark, the Standard and Poor's 500
Composite Stock Index, returned 20.79% and its secondary benchmark, the Lehman
Brothers Intermediate U.S. Government/Credit Index, returned 5.43%.
The portfolio participated in the stronger market environment, with a solid
performance from the equity portion of the portfolio, and outperformed in the
fixed income sector, despite an often challenging backdrop for bonds.
STRATEGY REVIEW
The portfolio continued to benefit from Luther King Capital Management's
("LKCM") investment philosophy, which emphasizes diversification across asset
classes, and holdings in well-positioned large and medium-capitalization
stocks. It should be noted that we lowered the portfolio's exposure to the
fixed income sector early in the year as we identified more attractive
risk/reward opportunities in the equity market relative to the fixed income
area. Technology and cyclical stocks were especially strong performers as the
year progressed. Within technology, the portfolio benefited from investments in
semiconductor manufacturers Intel Corporation and Texas Instruments
Incorporated. Among economically sensitive names, Masco Corporation and The
Home Depot, Inc. were standout holdings, and Alcon, Inc. and Teva
Pharmaceuticals Industries Ltd. -- ADR rose strongly, demonstrating our focus
on higher growth niches within the healthcare universe.
/s/ Luther King, Jr.
Luther King, Jr.
/s/ Scot C. Hollmann
Scot C. Hollmann
Co-Fund Mangers
Luther King Capital Management Corporation
IDEX Mutual Funds Annual Report 2003
IDEX LKCM Strategic Total Return 1
IDEX LKCM Strategic Total Return
- --------------------------------------------------------------------------------
Comparison of change in value of $10,000 investment in Class A shares and its
comparative index.
Growth of $10,000
Inception of 12/2/94 through 10/31/03
Investment less sales charges - $9,452
[The following table was depicted as a mountain chart in the printed material.]
DATE Class A LBIGC S&P 500
- ------------------ ---------------- ---------------- -----------
12/2/1994 9,452 10,000 10,000
12/31/1994 9,628 10,035 10,148
3/31/1995 10,224 10,476 11,135
6/30/1995 10,585 10,999 12,197
9/30/1995 11,197 11,181 13,165
12/31/1995 11,841 11,574 13,957
3/31/1996 12,374 11,478 14,706
6/30/1996 12,823 11,550 15,365
9/30/1996 13,011 11,755 15,840
12/31/1996 13,813 12,043 17,160
3/31/1997 13,893 12,029 17,621
6/30/1997 15,665 12,383 20,694
9/30/1997 16,641 12,718 22,244
12/31/1997 16,896 12,990 22,882
3/31/1998 18,149 13,193 26,072
6/30/1998 18,081 13,441 26,933
9/30/1998 16,746 14,045 24,259
12/31/1998 18,625 14,086 29,421
3/31/1999 18,980 14,060 30,887
6/30/1999 19,655 14,004 33,063
9/30/1999 18,586 14,133 31,001
12/31/1999 20,633 14,141 35,612
3/31/2000 20,262 14,353 36,427
6/30/2000 20,046 14,596 35,462
9/30/2000 19,867 15,016 35,118
12/31/2000 19,565 15,571 32,372
3/31/2001 18,303 16,099 28,537
6/30/2001 19,106 16,207 30,206
9/30/2001 18,001 16,953 25,774
12/31/2001 19,206 16,967 28,528
3/31/2002 18,913 16,929 28,606
6/30/2002 17,935 17,531 24,776
9/30/2002 16,454 18,325 20,498
12/31/2002 17,007 18,636 22,225
3/31/2003 16,467 18,917 21,524
6/30/2003 18,345 19,431 24,837
9/30/2003 18,790 19,427 25,494
10/31/2003 19,380 19,244 26,936
Average Annual Total Return for Periods Ended 10/31/03
- --------------------------------------------------------------------------------
From Inception
1 year 5 years Inception Date
----------- --------- ----------- ----------
Class A (NAV) 13.43% 2.26% 8.39% 12/2/94
Class A (POP) 7.20% 1.11% 7.70% 12/2/94
S&P 500(1) 20.79% 0.53% 11.75% 12/2/94
LBIGC(1) 5.43% 6.52% 7.62% 12/2/94
- ------ ----- ---- ----- -------
Class B (NAV) 12.58% 1.59% 6.34% 10/1/95
Class B (POP) 7.58% 1.40% 6.34% 10/1/95
- --------------- ----- ---- ----- -------
Class C (NAV) 12.58% - -0.62% 11/1/99
- --------------- ----- ---- ------ -------
Class L (NAV) - - 14.74% 11/11/02
Class L (POP) - - 12.74% 11/11/02
- --------------- ----- ---- ------ --------
Class M (NAV) 12.71% 1.69% 7.80% 12/2/94
Class M (POP) 10.58% 1.49% 7.67% 12/2/94
- --------------- ----- ---- ------ --------
NOTES
(1) The Standard & Poor's 500 Composite Stock (S&P 500) Index and Lehman
Brothers Intermediate U.S. Government/Credit (LBIGC) Index are unmanaged
indices 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 Micropal(R)(C) 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 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.
Periods less than 1 year represent total return and are not annualized.
This material must be preceded or accompanied by a current prospectus, which
includes specific contents regarding the investment objectives and policies of
this fund.
IDEX Mutual Funds Annual Report 2003
IDEX LKCM Strategic Total Return 2
IDEX LKCM Strategic Total Return
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
At October 31, 2003
(all amounts except share amounts in thousands)
Principal Value
--------- ---------
CORPORATE DEBT SECURITIES (7.0%)
Business Services (1.0%)
First Data Corporation
4.70%, due 11/01/2006 $ 500 $ 528
Electric Services (0.5%)
Kentucky Utilities Company
8.55%, due 05/15/2027 250 262
Life Insurance (0.8%)
Hartford Life, Inc.
6.90%, due 06/15/2004 400 413
Personal Credit Institutions (1.0%)
General Electric Capital Corporation
8.85%, due 04/01/2005 500 548
Printing & Publishing (1.0%)
Gannett Co., Inc.
5.50%, due 04/01/2007 500 542
Telecommunications (1.5%)
ALLTEL Corporation
7.25%, due 04/01/2004 800 819
Variety Stores (1.2%)
Wal-Mart Stores, Inc.
6.55%, due 08/10/2004 600 623
--------
Total Corporate Debt Securities (cost: $3,678) 3,735
--------
CONVERTIBLE BONDS (1.2%)
Printing & Publishing (1.2%)
Tribune Company-PHONES
2.00%, due 05/15/2029 8 648
--------
Total Convertible Bonds (cost: $977) 648
--------
Shares Value
------- --------
CONVERTIBLE PREFERRED STOCKS (3.6%)
Instruments & Related Products (1.6%)
Raytheon Company (b) 17,000 $ 859
Life Insurance (2.0%)
Prudential Financial, Inc.-Units 17,600 1,085
--------
Total Convertible Preferred Stocks (cost: $1,787) 1,944
--------
COMMON STOCKS (87.0%)
Automotive (1.4%)
Honeywell International Inc. 24,500 750
Beverages (3.2%)
Coca-Cola Company (The) 19,000 882
PepsiCo, Inc. 17,000 813
Business Services (3.1%)
Clear Channel Communications, Inc. 24,000 980
First Data Corporation (b) 19,600 700
Chemicals & Allied Products (3.3%)
Colgate-Palmolive Company 17,500 $ 931
du Pont (E.I.) de Nemours and Company 20,400 824
Commercial Banks (10.1%)
Bank of America Corporation 7,500 568
Bank of New York Company, Inc. (The) 26,500 827
Citigroup Inc. 22,800 1,081
Cullen/Frost Bankers, Inc. 26,000 1,008
Mellon Financial Corporation 29,800 890
Wells Fargo & Company 17,600 991
Communication (1.5%)
Viacom, Inc.-Class B 20,344 811
Communications Equipment (2.3%)
Harris Corporation 22,700 845
Motorola, Inc. 29,700 402
Computer & Data Processing Services (6.0%)
Automatic Data Processing, Inc. 20,000 755
Microsoft Corporation 41,800 1,093
Oracle Corporation (a) 59,000 706
SunGard Data Systems Inc. (a) 24,000 673
Computer & Office Equipment (4.5%)
Cisco Systems, Inc. (a) 32,700 686
Dell Computer Corporation (a) 27,200 982
International Business Machines
Corporation 8,500 761
Electronic & Other Electric Equipment (2.1%)
General Electric Company 38,000 1,102
Electronic Components & Accessories (4.8%)
Intel Corporation 28,300 935
Texas Instruments Incorporated 33,500 969
Tyco International Ltd. 33,000 689
Environmental Services (3.2%)
Allied Waste Industries, Inc. (a)(b) 67,000 756
Waste Management, Inc. 36,000 933
Food & Kindred Products (2.4%)
Altria Group, Inc. 14,300 665
Kraft Foods, Inc.-Class A (b) 21,400 623
Health Services (1.6%)
Triad Hospitals, Inc. (a) 28,700 882
Insurance (1.5%)
American International Group, Inc. 13,275 808
Lumber & Other Building Materials (1.9%)
Home Depot, Inc. (The) 27,800 1,031
Lumber & Wood Products (1.6%)
Masco Corporation 32,000 880
Medical Instruments & Supplies (1.8%)
Medtronic, Inc. 20,900 952
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX LKCM Strategic Total Return 3
IDEX LKCM Strategic Total Return
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Shares Value
------ --------
Oil & Gas Extraction (5.5%)
Anadarko Petroleum Corporation 20,500 $ 894
EOG Resources, Inc. 14,800 624
Schlumberger Limited 16,400 770
Unocal Corporation 20,000 634
Paper & Allied Products (2.6%)
Kimberly-Clark Corporation 15,000 792
Temple-Inland Inc. (b) 11,500 621
Paper & Paper Products (1.8%)
Boise Cascade Corporation 35,200 986
Personal Services (0.9%)
Block (H&R), Inc. 10,200 480
Petroleum Refining (3.8%)
BP PLC-ADR (b) 24,500 1,038
Exxon Mobil Corporation 26,900 984
Pharmaceuticals (8.2%)
Abbott Laboratories 11,000 469
Alcon, Inc. 15,000 827
Pfizer Inc. 29,700 939
Schering-Plough Corporation 29,000 443
Teva Pharmaceutical Industries Ltd.-ADR (b) 17,700 1,006
Wyeth 14,900 658
Savings Institutions (1.6%)
Charter One Financial, Inc. 26,000 831
Telecommunications (3.5%)
ALLTEL Corporation 21,600 1,021
Verizon Communications, Inc. 25,400 853
Transportation Equipment (0.9%)
General Dynamics Corporation 6,000 502
Variety Stores (1.9%)
Wal-Mart Stores, Inc. 17,600 1,038
--------
Total Common Stocks (cost: $43,595) 46,593
--------
Principal Value
---------- ---------
SECURITY LENDING COLLATERAL (9.8%)
Debt (8.6%)
Bank Notes (1.0%)
Canadian Imperial Bank of Commerce
1.12%, due 11/04/2003 $ 227 $ 227
Fleet National Bank
1.06%, due 01/21/2004 318 318
Euro Dollar Terms (4.9%)
Bank of Montreal
1.03%, due 11/13/2003 182 182
1.04%, due 11/14/2003 160 160
Euro Dollar Terms (continued)
Bank of Nova Scotia (The)
1.06%, due 11/12/2003 $ 91 $ 91
Bank of Scotland
1.04%, due 11/14/2003 182 182
Citigroup Inc.
1.08%, due 01/05/2004 272 272
Credit Agricole Indosuez
1.08%, due 01/06/2004 200 200
Den Danske Bank
1.04%, due 11/10/2003 91 91
1.08%, due 01/20/2004 272 272
Royal Bank of Canada
1.04%, due 11/24/2003 227 227
1.06%, due 12/08/2003 91 91
Royal Bank of Scotland Group PLC (The)
1.08%, due 01/15/2004 272 272
SouthTrust Bank
1.08%, due 01/16/2004 272 272
Wells Fargo & Company
1.04%, due 11/20/2003 272 272
Promissory Notes (0.6%)
Goldman Sachs Group, Inc. (The)
1.15%, due 11/03/2003 318 318
Repurchase Agreements (2.1%) (c)
Goldman Sachs Group, Inc. (The)
1.10% Repurchase Agreement dated
10/31/2003 to be repurchased at $91
on 11/03/2003 91 91
Merrill Lynch & Co., Inc.
1.10% Repurchase Agreement dated
10/31/2003 to be repurchased at $1,045
on 11/03/2003 1,045 1,045
Shares Value
------- --------
Investment Companies (1.2%)
Money Market Funds (1.2%)
Merrimac Cash Series Fund-
Premium Class
1-day yield of 0.97% 635,786 $ 636
--------
Total Security Lending Collateral (cost: $5,219) 5,219
--------
Total Investment Securities (cost: $55,256) $ 58,139
========
SUMMARY:
Investments, at value 108.6 % $ 58,139
Liabilities in excess of other assets (8.6)% (4,615)
------- --------
Net assets 100.0 % $ 53,524
======= ========
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 (see Note
1). The value at October 31, 2003, of all securities on loan is $5,078.
(c) Cash collateral for the Repurchase Agreements, valued at $1,158, 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
PHONES Participation Hybrid Option Note Exchangeable Securities
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX LKCM Strategic Total Return 4
IDEX LKCM Strategic Total Return
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
At October 31, 2003
(all amounts except per share amounts in thousands)
Assets:
Investment securities, at value (cost: $55,256)
(including $5,078 of securities loaned) $ 58,139
Cash 838
Receivables:
Investment securities sold 290
Shares of beneficial interest sold 48
Interest 52
Dividends 60
Dividend reclaims receivable 2
Other 15
--------
59,444
--------
Liabilities:
Investment securities purchased 563
Accounts payable and accrued liabilities:
Shares of beneficial interest redeemed 28
Management and advisory fees 5
Distribution fees 28
Transfer agent fees 36
Payable for securities on loan 5,219
Other 41
--------
5,920
--------
Net Assets $ 53,524
========
Net Assets Consist of:
Shares of beneficial interest, unlimited shares authorized $ 51,090
Undistributed net investment income (loss) 22
Accumulated net realized gain (loss) from investment
securities (469)
Net unrealized appreciation (depreciation) on investment
securities 2,881
--------
Net Assets $ 53,524
========
Shares Outstanding:
Class A 1,939
Class B 999
Class C 165
Class L 13
Class M 215
Net Asset Value Per Share:
Class A $ 16.10
Class B 16.02
Class C 16.02
Class L 16.02
Class M 16.03
Maximum Offering Price Per Share (a):
Class A $ 17.04
Class M 16.19
(a) 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.
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the year ended October 31, 2003
(all amounts in thousands)
Investment Income:
Interest $ 571
Dividends 831
Income from loaned securities-net 5
Less withholding taxes on foreign dividends (5)
--------
1,402
--------
Expenses:
Management and advisory fees 418
Transfer agent fees 243
Printing and shareholder reports 36
Custody fees 14
Administration fees 39
Legal fees 3
Auditing and accounting fees 20
Trustees fees 4
Registration fees 74
Other 5
Distribution and service fees:
Class A 107
Class B 153
Class C 26
Class L 1
Class M 32
--------
Total expenses 1,175
Less:
Advisory fee waiver (231)
--------
Net expenses 944
--------
Net Investment Income (Loss) 458
--------
Net Realized and Unrealized Gain (Loss):
Realized gain (loss) from investment securities 795
Increase (decrease) in unrealized appreciation
(depreciation) on investment securities 5,051
--------
Net Gain (Loss) on Investment Securities 5,846
--------
Net Increase (Decrease) in Net Assets Resulting
from Operations $6,304
========
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX LKCM Strategic Total Return 5
IDEX LKCM Strategic Total Return
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended
(all amounts in thousands)
October 31, October 31,
2003 2002
----------- -----------
Increase (Decrease) In Net Assets From:
Operations:
Net investment income (loss) $ 458 $ 929
Net realized gain (loss) from investment
securities 795 (1,365)
Net unrealized appreciation
(depreciation) on investment
securities 5,051 (3,157)
-------- --------
6,304 (3,593)
-------- --------
Distributions to Shareholders:
From net investment income:
Class A (313) (641)
Class B (109) (214)
Class C (19) (35)
Class L - -
Class M (28) (62)
-------- --------
(469) (952)
-------- --------
From net realized gains:
Class A - (39)
Class B - (20)
Class C - (3)
Class L - -
Class M - (6)
-------- --------
- (68)
-------- --------
Capital Share Transactions:
Proceeds from shares sold:
Class A 3,504 5,720
Class B 2,035 3,555
Class C 250 1,424
Class L 203 -
Class M 197 665
-------- --------
6,189 11,364
-------- --------
Dividends and distributions reinvested:
Class A 300 655
Class B 105 226
Class C 18 37
Class L - -
Class M 27 66
-------- --------
450 984
-------- --------
Cost of shares redeemed:
Class A (7,375) (9,723)
Class B (3,870) (5,525)
Class C (684) (1,421)
Class L (12) -
Class M (1,096) (2,004)
-------- --------
(13,037) (18,673)
-------- --------
(6,398) (6,325)
-------- --------
Net increase (decrease) in net assets (563) (10,938)
-------- --------
Net Assets:
Beginning of year 54,087 65,025
-------- --------
End of year $ 53,524 $ 54,087
======== ========
Undistributed Net Investment Income (Loss) $ 22 $ 134
======== ========
Share Activity:
Shares issued:
Class A 238 371
Class B 136 230
Class C 17 92
Class L 14 -
Class M 14 43
-------- --------
419 736
-------- --------
Shares issued-reinvested from distributions:
Class A 21 42
Class B 7 15
Class C 1 2
Class L - -
Class M 2 4
-------- --------
31 63
-------- --------
Shares redeemed:
Class A (503) (639)
Class B (266) (368)
Class C (47) (93)
Class L (1) -
Class M (75) (132)
-------- --------
(892) (1,232)
-------- --------
Net increase (decrease) in shares
outstanding (442) (433)
======== ========
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX LKCM Strategic Total Return 6
IDEX LKCM Strategic Total Return
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share of beneficial interest outstanding throughout each period
-------------------------------------------------------------------------------------------------------------
Investment Operations Distributions
------------------------------------------ -------------------------------------
Net Asset Net Asset
For the Value, Net Net Realized From Net From Net Value,
Period Beginning Investment and Unrealized Total Investment Realized Total End
Ended (d)(g) of Period Income (Loss) Gain (Loss) Operations Income Gains Distributions of Period
- ------------------------------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 $14.34 $0.17 $ 1.74 $ 1.91 $ (0.15) $ - $ (0.15) $16.10
10/31/2002 15.46 0.28 (1.11) (0.83) (0.27) (0.02) (0.29) 14.34
10/31/2001 17.02 0.30 (1.51) (1.21) (0.26) (0.09) (0.35) 15.46
10/31/2000 17.62 0.27 (0.15) 0.12 (0.30) (0.42) (0.72) 17.02
10/31/1999 16.18 0.20 1.65 1.85 (0.20) (0.21) (0.41) 17.62
- ------------------------------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 14.33 0.07 1.72 1.79 (0.10) - (0.10) 16.02
10/31/2002 15.45 0.18 (1.11) (0.93) (0.17) (0.02) (0.19) 14.33
10/31/2001 17.01 0.19 (1.50) (1.31) (0.16) (0.09) (0.25) 15.45
10/31/2000 17.60 0.18 (0.15) 0.03 (0.20) (0.42) (0.62) 17.01
10/31/1999 16.17 0.09 1.65 1.74 (0.10) (0.21) (0.31) 17.60
- ------------------------------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 14.33 0.07 1.72 1.79 (0.10) - (0.10) 16.02
10/31/2002 15.45 0.18 (1.11) (0.93) (0.17) (0.02) (0.19) 14.33
10/31/2001 17.01 0.19 (1.50) (1.31) (0.16) (0.09) (0.25) 15.45
10/31/2000 17.60 0.18 (0.15) 0.03 (0.20) (0.42) (0.62) 17.01
- ------------------------------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 14.06 0.07 1.99 2.06 (0.10) - (0.10) 16.02
- ------------------------------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 14.33 0.09 1.72 1.81 (0.11) - (0.11) 16.03
10/31/2002 15.45 0.19 (1.10) (0.91) (0.19) (0.02) (0.21) 14.33
10/31/2001 17.01 0.20 (1.49) (1.29) (0.18) (0.09) (0.27) 15.45
10/31/2000 17.61 0.18 (0.15) 0.03 (0.21) (0.42) (0.63) 17.01
10/31/1999 16.17 0.11 1.65 1.76 (0.11) (0.21) (0.32) 17.61
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
-----------------------------------------------------------------------
Ratio of Expenses
Net Assets, to Average Net Investment
For the End of Net Assets (a) Income (Loss) Portfolio
Period Total Period ----------------------- to Average Turnover
Ended (g) Return (c) (000's) Net (e) Total (f) Net Assets (a) Rate (b)
- ---------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 13.43% $ 31,224 1.55% 1.99% 1.14% 32%
10/31/2002 (5.52) 31,303 1.55 1.85 1.77 14
10/31/2001 (7.13) 37,253 1.55 1.74 1.80 23
10/31/2000 0.64 40,919 1.55 1.69 1.59 56
10/31/1999 11.61 37,959 1.64 1.79 1.20 60
- ---------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 12.58 15,997 2.20 2.64 0.49 32
10/31/2002 (6.12) 16,072 2.20 2.51 1.12 14
10/31/2001 (7.72) 19,236 2.20 2.39 1.15 23
10/31/2000 0.03 19,375 2.20 2.34 0.94 56
10/31/1999 10.91 15,531 2.29 2.44 0.55 60
- ---------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 12.58 2,650 2.20 2.64 0.49 32
10/31/2002 (6.12) 2,778 2.20 2.50 1.12 14
10/31/2001 (7.72) 2,989 2.20 2.39 1.15 23
10/31/2000 0.03 2,523 2.20 2.34 0.94 56
- ---------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 14.74 206 2.20 2.64 0.49 32
- ---------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 12.71 3,447 2.10 2.54 0.59 32
10/31/2002 (6.04) 3,934 2.10 2.41 1.22 14
10/31/2001 (7.63) 5,547 2.10 2.29 1.25 23
10/31/2000 0.12 7,026 2.10 2.24 1.04 56
10/31/1999 11.02 8,779 2.19 2.34 0.65 60
- ---------------------------------------------------------------------------------------------------------------
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX LKCM Strategic Total Return 7
IDEX LKCM Strategic Total Return
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (continued)
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 are not annualized.
(d) Per share information is calculated based on average number of shares
outstanding for the periods ended 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 (see note 2).
(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 Fund's offering of share classes C and L are as
follows:
Class C - November 1, 1999
Class L - November 11, 2002
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX LKCM Strategic Total Return 8
IDEX LKCM Strategic Total Return
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
At October 31, 2003
(all amounts in thousands)
NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
IDEX Mutual Funds is a Massachusetts business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company. IDEX LKCM Strategic Total Return ("the Fund"),
part of IDEX Mutual Funds, began operations on December 2, 1994.
In the normal course of business, the Fund enters into contracts that contain a
variety of representations and warranties and which provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown, as this would involve future claims that may be made against the Fund
and/or its affiliates that have not yet occurred. However, based on experience,
the Fund expects the risk of loss to be remote.
See the Prospectus and Statement of Additional Information for a description of
the Fund's investment objective.
In preparing the Fund's financial statements in accordance with accounting
principles generally accepted in the United States of America ("GAAP"),
estimates or assumptions (which could differ from actual results) may be used
that affect reported amounts and disclosures. The following policies were
consistently followed by the Fund, in accordance with GAAP.
Multiple class operations and expenses: The Fund currently offers five classes
of shares, each with a public offering price that reflects different sales
charges, if any, and expense levels. Effective November 11, 2002, Class C and M
shares were closed to new investors. Income, non-class specific expenses and
realized and unrealized gains and losses, are allocated daily to each class,
based upon the value of shares outstanding method as permitted under Rule 18f-3
of the 1940 Act. Each class bears its own specific expenses as well as a
portion of general, common expenses.
Security valuations: Fund investments traded on an exchange are valued at the
closing price on the day of valuation on the exchange where the security is
principally traded. With respect to securities traded on the NASDAQ INMS, such
closing price may be the last reported sales price or the NASDAQ Official
Closing Price.
Securities traded in the over-the-counter market and listed securities for
which no sale was reported on that date are valued at the last quoted bid
price.
Debt securities are valued by independent pricing services; however, those that
mature in sixty days or less are valued at amortized cost, which approximates
market.
Other securities for which quotations are not readily available are valued at
fair value determined in good faith, in accordance with procedures established
by and, under the supervision of the Board of Trustees and the Fund's Valuation
Committee.
Cash: The Fund may leave cash overnight in its cash account with the custodian,
Investors Bank & Trust Company ("IBT"). IBT has been contracted on behalf of
the Fund to invest the excess cash into a savings account, which at October 31,
2003, was paying an interest rate of 0.75%.
Directed brokerage: The sub-adviser, to the extent consistent with the best
execution and usual commission rate policies and practices, may place security
transactions of the Fund with broker/dealers with which IDEX Mutual Funds has
established a Directed Brokerage Program. A Directed Brokerage Program is any
arrangement under which a broker/dealer applies a portion of the commissions
received by such broker/dealer on the security transactions to the Fund. In no
event will commissions paid by the Fund be used to pay expenses that would
otherwise be borne by any other funds within IDEX Mutual Funds, or by any other
party. Directed commissions during the year ended October 31, 2003, of $22 are
included in net realized gains in the Statement of Operations.
Securities lending: The Fund may lend securities to enhance fund earnings from
investing cash collateral received in making such loans to qualified borrowers
(typically broker/dealers). The Fund has engaged its custodian bank, IBT, as a
lending agent to administer its securities lending program. IBT earned $2 of
program net income for its services. When the Fund makes a security loan, it
receives cash collateral as protection against the risk that the borrower will
default on the loan, and records an asset for the cash invested collateral and
a liability for the return of the collateral.
Securities on loan are to be included in Investment securities at value on the
Statement of Assets and Liabilities and remain on the Schedule of Investments.
Loans of securities are required to be secured by collateral at least equal to
102% of the value of the securities at inception of the loan, and not less then
100% thereafter. The Fund may invest cash collateral in short-term money market
instruments including: U.S. Treasury Bills, U.S. agency obligations, commercial
paper, money market mutual funds, repurchase agreements and other highly rated,
liquid investments. During the life of securities loans, the collateral and
securities loaned remain subject to fluctuation in value. IBT marks to market
securities loaned and the collateral each business day. If additional
collateral is due (at least $1), IBT collects additional cash collateral from
the borrowers. Although securities loaned will be fully collateralized at all
times, IBT may experience delays in, or may be prevented from, recovering the
collateral on behalf of the Fund. The Fund may recall a loaned security
position at any time from the borrower through IBT. In the event the borrower
fails to timely return a recalled security, IBT may indemnify the Fund by
purchasing replacement securities for the Fund at its own expense and claiming
the collateral to fund such a purchase. IBT absorbs the loss if the collateral
value is not sufficient to cover the cost of the replacement securities. If
replacement securities are not available, IBT will credit the equivalent cash
value to the Fund.
IDEX Mutual Funds Annual Report 2003
IDEX LKCM Strategic Total Return 9
IDEX LKCM Strategic Total Return
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 1-(continued)
Income from securities lending is included in the Statement of Operations. The
amounts of collateral and value of securities on loan are included in the
Statement of Assets and Liabilities as well as on the Schedule of Investments.
Security transactions and investment income: Security transactions are recorded
on the trade date. Security gains and losses are calculated on the specific
identification basis. Dividend income is recorded on the ex-dividend date or,
in the case of foreign securities, as soon as the Fund is informed of the
ex-dividend date. Interest income, including accretion of discounts and
amortization of premiums, is recorded on the accrual basis commencing on the
settlement date.
Dividend distributions: Distributions to shareholders are recorded on the
ex-dividend date and are determined in accordance with Federal income tax
regulations which may differ from GAAP.
NOTE 2. RELATED PARTY TRANSACTIONS
AEGON/Transamerica Fund Advisers, Inc. ("ATFA") is the Fund's investment
adviser. AEGON/Transamerica Fund Services, Inc. ("ATFS") is the Fund's
administrator. AFSG Securities Corp. ("AFSG") is the Fund's
distributor/principal underwriter. AEGON/Transamerica Investor Services, Inc.
("ATIS") is the 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. AUSA and WRL are wholly owned indirect
subsidiaries of AEGON NV, a Netherlands corporation.
Investment advisory fees: The Fund pays management fees to ATFA based on
average daily net assets ("ANA") at the following stated break points:
0.80% of the first $500 million of ANA
0.70% of ANA over $500 million
ATFA currently voluntarily waives its advisory fee and will reimburse the Fund
to the extent that operating expenses, excluding 12b-1 fees, exceed the
following stated annual limit:
1.20% Expense Limit
If total fund expenses fall below the annual expense limitations agreed to by
the adviser within the succeeding three years, the Fund may be required to pay
the advisor a portion or all of the waived advisory fees.
Distribution and service fees: The Fund has a 12b-1 distribution plan under the
1940 Act pursuant to which an annual fee, based on average daily net assets, is
paid to the distributor for various disbursements such as broker-dealer account
servicing fees and other promotional expenses of the Fund. The 12b-1 fee for
the Fund is comprised of a 0.25% service fee and the remaining amount is an
asset-based sales charge/distribution fee. The Fund is authorized under the
12b-1 plan to pay fees on each class up to the following limits:
Class A 0.35%
Class B 1.00%
Class C 1.00%
Class L 1.00%
Class M 0.90%
Underwriter commissions relate to front-end sales charges imposed for Class A
and M shares and contingent deferred sales charges from Classes B, L, M and
certain A share redemptions. For the year ended October 31, 2003, the
underwriter commissions were as follows:
Received by Underwriter $ 57
Retained by Underwriter 5
Contingent Sales Charges 36
Administrative services: The Fund has entered into an agreement with ATFS for
financial and legal fund administration services, which include such items as
compliance, expenses, financial statements and other reporting, distributions,
tax returns, prospectus preparation, board of trustees meeting support and
other legal matters. Transfer agent fees are reflected separately from
Administration fees on the Statement of Operations. The Legal fees on the
Statement of Operations are for fees paid to external legal counsel. ATFS
provides its services to the Fund at cost and is reimbursed monthly.
Transfer agent fees: The Fund incurs ATIS annual per-account charges (not in
thousands) of $20.00 for each open shareholder account and $1.63 for each
closed account maintained, and certain out of pocket expenses.
Deferred compensation plan: Each eligible Fund Trustee may elect participation
in the Deferred Compensation Plan ("the Plan"). Under the Plan, such Trustees
may defer payment of a percentage of their total fees earned as a Fund Trustee.
These deferred amounts may be invested in any IDEX Fund. At October 31, 2003,
the value of invested plan amounts was $6. Invested plan amounts and the total
liability for deferred compensation to the Trustees under the Plan at October
31, 2003, are included in Net assets in the accompanying Statement of Assets
and Liabilities.
NOTE 3. INVESTMENT TRANSACTIONS
The cost of securities purchased and proceeds from securities sold (excluding
short-term securities) for the year ended October 31, 2003, were as follows:
Purchases of securities:
Long-Term excluding U.S. Government $ 15,949
U.S. Government -
Proceeds from maturities and sales of securities:
Long-Term excluding U.S. Government 22,097
U.S. Government 548
IDEX Mutual Funds Annual Report 2003
IDEX LKCM Strategic Total Return 10
IDEX LKCM Strategic Total Return
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 4. FEDERAL INCOME TAX MATTERS
The Fund has not made any provision for federal income or excise taxes due to
its policy to distribute all of its taxable income and capital gains to its
shareholders and otherwise qualify as a regulated investment company under the
Internal Revenue Code. Income and capital gain distributions are determined in
accordance with income tax regulations, which may differ from GAAP. These
differences are primarily due to differing treatments for items including, but
not limited to, wash sales, net operating losses and capital loss
carryforwards.
Reclassifications between Undistributed net investment income (loss),
Undistributed net realized capital gains (loss) and Shares of beneficial
interest are made to reflect income and gains available for distribution under
federal tax regulations. Results of operations and net assets are not effected
by these reclassifications. These reclassifications are as follows:
Shares of beneficial interest, unlimited shares
authorized $ -
Undistributed net investment income (loss) (101)
Accumulated net realized gain (loss) from
investment securities 101
The tax character of distributions paid may differ from the character of
distributions shown in the Statements of Changes in Net Assets
primarily due to short-term gains being treated as ordinary income for tax
purposes. The tax character of distributions paid during 2002 and 2003 was as
follows:
2002 Distributions paid from:
Ordinary income $ 952
Long-term capital gains 68
2003 Distributions paid from:
Ordinary income $ 469
Long-term capital gains -
The tax basis components of distributable earnings as of October 31, 2003, are
as follows:
Undistributed Ordinary Income $ 28
=======
Undistributed Long-term Capital Gains $ -
=======
Capital Loss Carryforward $ (469)
=======
Net Unrealized Appreciation (Depreciation) $ 2,883
=======
The capital loss carryforward utilized as of October 31, 2003 was $888. The
capital loss carryforward is available to offset future realized capital gains
through the period listed:
Capital Loss
Carryforward Available through
- -------------- ------------------
$ 469 October 31, 2010
The aggregate cost of investments and composition of unrealized appreciation
(depreciation) for federal income tax purposes as of October 31, 2003, are as
follows:
Federal Tax Cost Basis $ 55,256
========
Unrealized Appreciation $ 6,079
Unrealized (Depreciation) (3,196)
--------
Net Unrealized Appreciation (Depreciation) $ 2,883
========
Supplemental Tax Information
(unaudited)
For dividends paid during the year ended October 31, 2003, the Fund designates
qualified dividend income to the maximum extent allowable.
For corporate shareholders, 45% of investment income (dividend income plus
short-term gains, if any) qualifies for the dividends received deduction.
The information and distributions reported herein may differ from the
information and distributions taxable to the shareholders for the calendar year
ending December 31, 2003. Complete information will be computed and reported in
conjunction with your 2003 Form 1099-DIV.
IDEX Mutual Funds Annual Report 2003
IDEX LKCM Strategic Total Return 11
- --------------------------------------------------------------------------------
Report of Independent Certified Public Accountants
To the Board of Trustees and Shareholders of
IDEX LKCM Strategic Total Return
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of IDEX LKCM Strategic Total Return
(the "Fund") (one of the portfolios constituting the IDEX Mutual Funds) at
October 31, 2003, and the results of its operations, the changes in its net
assets and the financial highlights for each of the periods indicated, in
conformity with accounting principles generally accepted in the United States
of America. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Fund's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with auditing standards generally accepted in the
United States of America, which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits, which included confirmation of securities at October 31, 2003 by
correspondence with the custodian and brokers, provide a reasonable basis for
our opinion.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Tampa, Florida
December 18, 2003
IDEX Mutual Funds Annual Report 2003
IDEX LKCM Strategic Total Return 12
IDEX Marsico Growth
- --------------------------------------------------------------------------------
MARKET ENVIRONMENT
During the month of October, all of the ten economic sectors that comprise the
Standard and Poor's 500 Composite Stock Index ("S&P 500") posted positive
returns. We continue to have a relatively positive view regarding the outlook
for U.S. equities. We believe there are encouraging signs of a U.S. economic
recovery, helped in part by a decline in long-term interest rates, continued
low inflation environment, strong productivity gains, substantial fiscal and
monetary stimulus, strong housing markets, and better expectations regarding
corporate profits.
Offsetting these 'positives' are the dollar decline, higher oil prices (a
response to the Organization of Petroleum Exporting Countries' ("OPEC")
announcement of production cuts), stubbornly high claims for unemployment
benefits, reduced consumer confidence, and geopolitical concerns. We think the
overall valuation backdrop for U.S. equities continues to be palatable,
although some areas are overpriced.
PERFORMANCE
For the year ended October 31, 2003, IDEX Marsico Growth returned 18.65%. By
comparison its benchmark, the S&P 500, returned 20.79%.
As of October 31, 2003, the portfolio's most significant economic sector
allocations were in health care, information technology, financials, consumer
discretionary, and industrials. The portfolio had no exposure in the
telecommunications services, energy, materials, or utilities sectors.
STRATEGY REVIEW
In reviewing the portfolio's October investment results, several positive
factors contributed to performance:
o Retailing--The portfolio's positions in this industry were significant
contributors to performance. As of October 31, 2003, retailing positions
represented approximately 9% of net assets. In aggregate, the portfolio's
retailing holdings appreciated by approximately 18% during the month. Three
individual holdings that performed well were Sears, Roebuck and Co., home
improvement company Lowe's Companies, Inc., and specialty retailer Tiffany
& Co.
o Information Technology--Common threads linking these companies included
evidence of market leadership, ability to generate free cash flow, evidence
of improved profit margins and potentially significant product advantages
compared with competitors. The portfolio's performance benefited from good
stock selection in several technology-related industries. These included:
semiconductors, software and services, and hardware and equipment. Intel
Corporation, Electronic Arts Inc., Dell Computer Corporation, and Cisco
Systems, Inc. were individual investments for the portfolios that performed
well during the month.
o Transportation--The portfolio had an overweight posture (as compared to the
S&P 500) in this industry which contributed positively to the performance.
RyanAir Holdings PLC and FedEx Corporation were among the top performers
for the month. The performance of these two stocks made up for JetBlue
Airways Corporation, which declined during the month.
There were several factors that negatively impacted performance for the
portfolios:
o Diversified Financial Services Positions--While certain portfolio holdings
in this industry (e.g., Citigroup Inc. and Fannie Mae) performed relatively
well last month, overall the portfolio's investments in this area detracted
from relative investment results. This was primarily attributable to so-so
performance by SLM Corporation ("SLM") (formerly known as Sallie Mae),
which was one of the portfolios' largest individual positions as of October
31, 2003. The SLM return trailed the performance of the S&P 500, and the
impact of that lag was exacerbated by the portfolio's significant level of
investment in SLM.
In addition to the above industry-level factors, certain individual positions
had a negative performance effect on the portfolio. These included Microsoft
Corporation, MGIC Investment Corporation, General Electric Company, and Amgen
Inc.
/s/ James Hillary
James A. Hillary
/s/ Thomas F. Marsico
Thomas F. Marsico
Co-Fund Managers
Marsico Capital Management, LLC
IDEX Mutual Funds Annual Report 2003
IDEX Marsico Growth 1
IDEX Marsico Growth
- --------------------------------------------------------------------------------
Comparison of change in value of $10,000 investment in Class A shares and its
comparative index.
Growth of $10,000
Inception of 2/28/99 through 10/31/03
Investment less sales charges - $9,452
[The following table was depicted as a mountain chart in the printed material.]
DATE Class A S&P 500
- ------------------ ------------------ -----------
2/28/1999 9,452 10,000
3/31/1999 9,934 10,400
6/30/1999 10,624 11,133
9/30/1999 10,019 10,439
12/31/1999 11,958 11,991
3/31/2000 12,195 12,266
6/30/2000 12,081 11,941
9/30/2000 11,901 11,825
12/31/2000 10,973 10,900
3/31/2001 9,506 9,609
6/30/2001 10,168 10,171
9/30/2001 8,567 8,678
12/31/2001 9,420 9,606
3/31/2002 9,209 9,632
6/30/2002 7,829 8,342
9/30/2002 6,574 6,902
12/31/2002 6,861 7,484
3/31/2003 6,823 7,247
6/30/2003 7,676 8,363
9/30/2003 8,050 8,584
10/31/2003 8,596 9,070
Average Annual Total Return for Periods Ended 10/31/03
- --------------------------------------------------------------------------------
From Inception
1 year Inception Date
----------- ----------- ----------
Class A (NAV) 18.65% -2.01% 3/1/99
Class A (POP) 12.13% -3.19% 3/1/99
S&P 5001 20.79% -2.07% 3/1/99
- --------------- ----- ------ ------
Class B (NAV) 17.93% -2.70% 3/1/99
Class B (POP) 12.93% -2.90% 3/1/99
- --------------- ----- ------ ------
Class C (NAV) 17.93% -6.17% 11/1/99
- --------------- ----- ------ -------
Class L (NAV) - 20.89% 11/11/02
Class L (POP) - 18.89% 11/11/02
- --------------- ----- ------ --------
Class M (NAV) 18.00% -2.60% 3/1/99
Class M (POP) 15.82% -2.81% 3/1/99
- --------------- ----- ------ --------
NOTES
(1) The Standard & Poor's 500 Composite Stock (S&P 500) 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 Micropal(R)(C) 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 shares, (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.
Banc of America Capital Management, LLC (BACAP) assumed the role of sub-advisor
with its affiliate Marsico Capital Management, LLC to provide management
services to the fund.
Periods less than 1 year represent total return and are not annualized.
This material must be preceded or accompanied by a current prospectus, which
includes specific contents regarding the investment objectives and policies of
this fund.
IDEX Mutual Funds Annual Report 2003
IDEX Marsico Growth 2
IDEX Marsico Growth
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
At October 31, 2003
(all amounts except share amounts in thousands)
Shares Value
------- ---------
COMMON STOCKS (95.2%)
Aerospace (1.3%)
Lockheed Martin Corporation 17,030 $ 790
Air Transportation (4.8%)
FedEx Corporation 27,454 2,080
JetBlue Airways Corporation (a) 8,485 489
RyanAir Holdings PLC-ADR (a)(b) 7,042 363
Amusement & Recreation Services (0.4%)
Disney (Walt) Company (The) 11,561 262
Automotive (0.2%)
Honeywell International Inc. 4,000 122
Beverages (1.0%)
Anheuser-Busch Companies, Inc. 12,118 597
Business Services (0.7%)
eBay Inc. (a) 5,699 319
Monster Worldwide, Inc. (a) 5,187 132
Chemicals & Allied Products (2.4%)
Procter & Gamble Company (The) 14,879 1,462
Commercial Banks (5.0%)
Citigroup Inc. 64,555 3,060
Communication (3.7%)
Echostar Communications
Corporation-Class A (a) 16,194 621
Viacom, Inc.-Class B 41,679 1,662
Communications Equipment (1.8%)
QUALCOMM Incorporated 23,050 1,095
Computer & Data Processing Services (4.2%)
Electronic Arts Inc. (a) 25,955 2,571
Computer & Office Equipment (7.9%)
Cisco Systems, Inc. (a) 82,714 1,735
Dell Computer Corporation (a) 54,396 1,965
EMC Corporation (a) 82,641 1,144
Construction (0.2%)
M.D.C. Holdings, Inc. 1,528 103
Department Stores (1.6%)
Sears, Roebuck and Co. 18,281 962
Electronic & Other Electric Equipment (2.6%)
General Electric Company 55,826 1,620
Electronic Components & Accessories (6.3%)
Intel Corporation 100,164 3,310
Maxim Integrated Products 11,172 555
Health Services (4.5%)
Caremark Rx, Inc. (a)(b) 69,111 1,731
Quest Diagnostics Incorporated (a) 14,940 1,011
Industrial Machinery & Equipment (2.8%)
Caterpillar, Inc. 23,524 $ 1,724
Insurance (5.0%)
UnitedHealth Group Incorporated 60,658 3,086
Lumber & Other Building Materials (3.6%)
Lowe's Companies, Inc. 37,644 2,218
Medical Instruments & Supplies (7.3%)
Boston Scientific Corporation (a) 31,576 2,138
Medtronic, Inc. 17,688 806
Zimmer Holdings, Inc. (a) 23,912 1,526
Mortgage Bankers & Brokers (1.0%)
Countrywide Credit Industries, Inc. 5,857 616
Personal Credit Institutions (5.2%)
SLM Corporation (b) 81,479 3,191
Pharmaceuticals (7.2%)
Amgen Inc. (a) 22,050 1,362
Genentech, Inc. (a) 37,334 3,060
Residential Building Construction (2.3%)
Lennar Corporation 15,376 1,412
Retail Trade (3.2%)
Tiffany & Co. 41,896 1,987
Security & Commodity Brokers (3.3%)
Merrill Lynch & Co., Inc. 34,069 2,017
U.S. Government Agencies (3.1%)
Fannie Mae 26,438 1,895
Variety Stores (2.6%)
Wal-Mart Stores, Inc. 26,682 1,573
---------
Total Common Stocks (cost: $47,590) 58,372
---------
Principal Value
--------- ---------
SECURITY LENDING COLLATERAL (8.2%)
Debt (7.2%)
Bank Notes (0.9%)
Canadian Imperial Bank of Commerce
1.12%, due 11/04/2003 $ 219 $ 219
Fleet National Bank
1.06%, due 01/21/2004 307 307
Euro Dollar Terms (4.0%)
Bank of Montreal
1.03%, due 11/13/2003 175 175
1.04%, due 11/14/2003 154 154
Bank of Nova Scotia (The)
1.06%, due 11/12/2003 88 88
Bank of Scotland
1.04%, due 11/14/2003 175 175
Citigroup Inc.
1.08%, due 01/05/2004 263 263
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Marsico Growth 3
IDEX Marsico Growth
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Principal Value
--------- --------
Euro Dollar Terms (continued)
Credit Agricole Indosuez
1.08%, due 01/06/2004 $ 193 $ 193
Den Danske Bank
1.04%, due 11/10/2003 88 88
1.08%, due 01/20/2004 263 263
Royal Bank of Canada
1.04%, due 11/24/2003 219 219
1.06%, due 12/08/2003 88 88
Royal Bank of Scotland G roup PLC (The)
1.08%, due 01/15/2004 263 263
SouthTrust Bank
1.08%, due 01/16/2004 263 263
Wells Fargo & Company
1.04%, due 11/20/2003 263 263
Promissory Notes (0.5%)
Goldman Sachs Group, Inc . (The)
1.15%, due 11/03/2003 307 307
Repurchase Agreements (1.8 %) (c)
Goldman Sachs Group, Inc . (The)
1.10% Repurchase Agree ment dated
10/31/2003 to be repur chased at $88
on 11/03/2003 $ 88 $ 88
Merrill Lynch & Co., Inc .
1.10% Repurchase Agree ment dated
10/31/2003 to be repur chased at $1,007
on 11/03/2003 1,007 1,007
Shares Value
------- --------
Investment Companies (1.0%)
Money Market Funds (1.0%)
Merrimac Cash Series Fund-
Premium Class
1-day yield of 0.97% 613,546 $ 613
--------
Total Security Lending Collateral (cost: $5,036) 5,036
--------
Total Investment Securities (cost: $52,626) $ 63,408
========
SUMMARY:
Investments, at value 103.4 % $ 63,408
Liabilities in excess of other assets (3.4)% (2,106)
------- --------
Net assets 100.0 % $ 61,302
======= ========
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 (see Note
1). The value at October 31, 2003, of all securities on loan is $4,853.
(c) Cash collateral for the Repurchase Agreements, valued at $1,118, 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
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Marsico Growth 4
IDEX Marsico Growth
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
At October 31, 2003
(all amounts except per share amounts in thousands)
Assets:
Investment securities, at value (cost: $52,626)
(including $4,853 of securities loaned) $ 63,408
Cash 3,598
Receivables:
Investment securities sold 839
Shares of beneficial interest sold 245
Interest 1
Dividends 56
Other 8
--------
68,155
--------
Liabilities:
Investment securities purchased 1,563
Accounts payable and accrued liabilities:
Shares of beneficial interest redeemed 115
Management and advisory fees 52
Distribution fees 31
Transfer agent fees 23
Payable for securities on loan 5,036
Other 33
--------
6,853
--------
Net Assets $ 61,302
========
Net Assets Consist of:
Shares of beneficial interest, unlimited shares authorized $ 65,637
Accumulated net investment income (loss) (1)
Accumulated net realized gain (loss) from investment
securities and foreign currency transactions (15,116)
Net unrealized appreciation (depreciation) on investment
securities 10,782
--------
Net Assets $ 61,302
========
Shares Outstanding:
Class A 3,810
Class B 2,273
Class C 264
Class L 138
Class M 450
Net Asset Value Per Share:
Class A $ 8.97
Class B 8.68
Class C 8.68
Class L 8.68
Class M 8.72
Maximum Offering Price Per Share (a):
Class A $ 9.49
Class M 8.81
(a) 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.
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the year ended October 31, 2003
(all amounts in thousands)
Investment Income:
Interest $ 17
Dividends 360
Income from loaned securities-net 6
Less withholding taxes on foreign dividends (5)
--------
378
--------
Expenses:
Management and advisory fees 389
Transfer agent fees 146
Printing and shareholder reports 27
Custody fees 19
Administration fees 33
Legal fees 2
Auditing and accounting fees 19
Trustees fees 3
Registration fees 64
Other 4
Distribution and service fees:
Class A 98
Class B 147
Class C 21
Class L 4
Class M 29
--------
Total expenses 1,005
Less:
Advisory fee waiver (27)
--------
Net expenses 978
--------
Net Investment Income (Loss) (600)
--------
Net Realized Gain (Loss) from:
Investment securities (8,235)
Foreign currency transactions 2
--------
(8,233)
--------
Net Increase (Decrease) in Unrealized Appreciation
(Depreciation) on:
Investment securities 18,675
--------
Net Gain (Loss) on Investment Securities and Foreign
Currency Transactions 10,442
--------
Net Increase (Decrease) in Net Assets Resulting from
Operations $ 9,842
========
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Marsico Growth 5
IDEX Marsico Growth
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended
(all amounts in thousands)
October 31, October 31,
2003 2002
----------- -----------
Increase (Decrease) In Net Assets From:
Operations:
Net investment income (loss) $ (600) $ (346)
Net realized gain (loss) from investment
securities and foreign currency
transactions (8,233) (4,975)
Net unrealized appreciation
(depreciation) on investment
securities 18,675 (1,760)
-------- --------
9,842 (7,081)
-------- --------
Distributions to Shareholders:
From net investment income:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
-------- --------
- -
-------- --------
From net realized gains:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
-------- --------
- -
-------- --------
Capital Share Transactions:
Proceeds from shares sold:
Class A 32,721 7,433
Class B 7,333 8,534
Class C 990 1,391
Class L 1,174 -
Class M 800 2,713
-------- --------
43,018 20,071
-------- --------
Dividends and distributions reinvested:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
-------- --------
- -
-------- --------
Cost of shares redeemed:
Class A (10,582) (7,170)
Class B (4,304) (5,885)
Class C (1,326) (3,076)
Class L (94) -
Class M (755) (1,718)
-------- --------
(17,061) (17,849)
-------- --------
25,957 2,222
-------- --------
Net increase (decrease) in net assets 35,799 (4,859)
-------- --------
Net Assets:
Beginning of year 25,503 30,362
-------- --------
End of year $ 61,302 $ 25,503
======== ========
Accumulated Net Investment Income (Loss) $ (1) $ (1)
======== ========
Share Activity:
Shares issued:
Class A 4,395 816
Class B 935 963
Class C 131 157
Class L 153 -
Class M 103 304
-------- --------
5,717 2,240
-------- --------
Shares issued-reinvested from distributions:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
-------- --------
- -
-------- --------
Shares redeemed:
Class A (1,346) (864)
Class B (582) (733)
Class C (180) (373)
Class L (15) -
Class M (102) (213)
-------- --------
(2,225) (2,183)
-------- --------
Net increase (decrease) in shares
outstanding 3,492 57
======== ========
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Marsico Growth 6
IDEX Marsico Growth
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share of beneficial interest outstanding throughout each period
-------------------------------------------------------------------------------------------------------------
Investment Operations Distributions
------------------------------------------ -------------------------------------
Net Asset Net Asset
For the Value, Net Net Realized From Net From Net Value,
Period Beginning Investment and Unrealized Total Investment Realized Total End
Ended (d)(g) of Period Income (Loss) Gain (Loss) Operations Income Gains Distributions of Period
- ------------------------------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 $ 7.56 $ (0.08) $ 1.49 $ 1.41 $ - $ - $ - $ 8.97
10/31/2002 9.10 (0.06) (1.48) (1.54) - - - 7.56
10/31/2001 12.54 (0.05) (3.25) (3.30) - (0.14) (0.14) 9.10
10/31/2000 11.40 0.02 1.15 1.17 - (0.03) (0.03) 12.54
10/31/1999 10.00 0.03 1.37 1.40 - - - 11.40
- ------------------------------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 7.36 (0.12) 1.44 1.32 - - - 8.68
10/31/2002 8.92 (0.11) (1.45) (1.56) - - - 7.36
10/31/2001 12.41 (0.11) (3.24) (3.35) - (0.14) (0.14) 8.92
10/31/2000 11.35 (0.06) 1.15 1.09 - (0.03) (0.03) 12.41
10/31/1999 10.00 (0.02) 1.37 1.35 - - - 11.35
- ------------------------------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 7.36 (0.12) 1.44 1.32 - - - 8.68
10/31/2002 8.92 (0.12) (1.44) (1.56) - - - 7.36
10/31/2001 12.41 (0.12) (3.23) (3.35) - (0.14) (0.14) 8.92
10/31/2000 11.35 (0.06) 1.15 1.09 - (0.03) (0.03) 12.41
- ------------------------------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 7.18 (0.12) 1.62 1.50 - - - 8.68
- ------------------------------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 7.39 (0.11) 1.44 1.33 - - - 8.72
10/31/2002 8.95 (0.11) (1.45) (1.56) - - - 7.39
10/31/2001 12.43 (0.11) (3.23) (3.34) - (0.14) (0.14) 8.95
10/31/2000 11.36 (0.05) 1.15 1.10 - (0.03) (0.03) 12.43
10/31/1999 10.00 (0.01) 1.37 1.36 - - - 11.36
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
-----------------------------------------------------------------------
Ratio of Expenses
Net Assets, to Average Net Investment
For the End of Net Assets (a) Income (Loss) Portfolio
Period Total Period ----------------------- to Average Turnover
Ended (g) Return (c) (000's) Net (e) Total (f) Net Assets (a) Rate (b)
- ---------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 18.65% $ 34,167 1.75% 1.80% (0.97)% 129%
10/31/2002 (16.88) 5,752 1.73 2.05 (0.56) 34
10/31/2001 (26.63) 7,361 1.55 2.03 (0.43) 15
10/31/2000 10.29 6,587 1.55 2.53 (0.47) 25
10/31/1999 13.97 1,978 1.55 7.65 (0.55) 22
- ---------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 17.93 19,723 2.40 2.45 (1.62) 129
10/31/2002 (17.52) 14,130 2.38 2.70 (1.21) 34
10/31/2001 (27.25) 15,081 2.20 2.68 (1.08) 15
10/31/2000 9.54 7,908 2.20 3.18 (1.12) 25
10/31/1999 13.54 2,261 2.20 8.30 (1.20) 22
- ---------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 17.93 2,292 2.40 2.45 (1.62) 129
10/31/2002 (17.52) 2,301 2.38 2.70 (1.21) 34
10/31/2001 (27.25) 4,719 2.20 2.68 (1.08) 15
10/31/2000 9.54 6,484 2.20 3.18 (1.12) 25
- ---------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 20.89 1,200 2.40 2.46 (1.62) 129
- ---------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 18.00 3,920 2.30 2.35 (1.52) 129
10/31/2002 (17.43) 3,320 2.28 2.60 (1.11) 34
10/31/2001 (27.15) 3,201 2.10 2.58 (0.98) 15
10/31/2000 9.65 2,976 2.10 3.08 (1.02) 25
10/31/1999 13.61 748 2.10 8.20 (1.10) 22
- ---------------------------------------------------------------------------------------------------------------
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Marsico Growth 7
IDEX Marsico Growth
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (continued)
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 are not annualized.
(d) Per share information is calculated based on average number of shares
outstanding for the periods ended 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 (see note 2).
(f) Ratio of Total Expenses to Average Net Assets includes all expenses before
fee waivers and reimbursements by the investment adviser.
(g) IDEX Marsico Growth ("the Fund") commenced operations on March 1, 1999. The
inception date for the Fund's offering of share classes C and L are as
follows:
Class C - November 1, 1999
Class L - November 11, 2002
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Marsico Growth 8
IDEX Marsico Growth
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
At October 31, 2003
(all amounts in thousands)
NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
IDEX Mutual Funds is a Massachusetts business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company. IDEX Marsico Growth ("the Fund"), part of IDEX
Mutual Funds, began operations on March 1, 1999. On November 1, 2002, the Fund
changed its name from IDEX Goldman Sachs Growth to IDEX Marsico Growth and Banc
of America Capital Management, LLC replaced Goldman Sachs Asset Management as
sub-adviser to the Fund.
In the normal course of business the Fund enters into contracts that contain a
variety of representations and warranties which provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown, as this would involve future claims that may be made against the Fund
and/or its affiliates that have not yet occurred. However, based on experience,
the Fund expects the risk of loss to be remote.
See the Prospectus and Statement of Additional Information for a description of
the Fund's investment objective.
In preparing the Fund's financial statements in accordance with accounting
principles generally accepted in the United States of America ("GAAP"),
estimates or assumptions (which could differ from actual results) may be used
that affect reported amounts and disclosures. The following policies were
consistently followed by the Fund, in accordance with GAAP.
Multiple class operations and expenses: The Fund currently offers five classes
of shares, each with a public offering price that reflects different sales
charges, if any, and expense levels. Effective November 11, 2002, Class C and M
shares were closed to new investors. Income, non-class specific expenses and
realized and unrealized gains and losses, are allocated daily to each class,
based upon the value of shares outstanding method as permitted under Rule 18f-3
of the 1940 Act. Each class bears its own specific expenses as well as a
portion of general, common expenses.
Security valuations: Fund investments traded on an exchange are valued at the
closing price on the day of valuation on the exchange where the security is
principally traded. With respect to securities traded on the NASDAQ INMS, such
closing price may be the last reported sales price or the NASDAQ Official
Closing Price.
Securities traded in the over-the-counter market and listed securities for
which no sale was reported on that date are valued at the last quoted bid
price.
Debt securities are valued by independent pricing services; however, those that
mature in sixty days or are valued at amortized cost, which approximates
market.
Other securities for which quotations are not readily available are valued at
fair value determined in good faith, in accordance with procedures established
by and, under the supervision of the Board of Trustees and the Fund's Valuation
Committee.
Cash: The Fund may leave cash overnight in its cash account with the custodian,
Investors Bank & Trust Company ("IBT"). IBT has been contracted on behalf of
the Fund to invest the excess cash into a savings account, which at October 31,
2003, was paying an interest rate of 0.75%.
Directed brokerage: The sub-adviser, to the extent consistent with the best
execution and usual commission rate policies and practices, may place security
transactions of the Fund with broker/dealers with which IDEX Mutual Funds has
established a Directed Brokerage Program. A Directed Brokerage Program is any
arrangement under which a broker/dealer applies a portion of the commissions
received by such broker/dealer on the security transactions to the Fund. In no
event will commissions paid by the Fund be used to pay expenses that would
otherwise be borne by any other funds within IDEX Mutual Funds, or by any other
party. Directed commissions during the year ended October 31, 2003, of $23 are
included in net realized gains in the Statement of Operations.
Securities lending: The Fund may lend securities to enhance fund earnings from
investing cash collateral received in making such loans to qualified borrowers
(typically broker/dealers). The Fund has engaged its custodian bank, IBT, as a
lending agent to administer its securities lending program. IBT earned $2 of
program net income for its services. When the Fund makes a security loan, it
receives cash collateral as protection against the risk that the borrower will
default on the loan, and records an asset for the cash invested collateral and
a liability for the return of the collateral.
Securities on loan are included in Investment securities at value on the
Statement of Assets and Liabilities and remain on the Schedule of Investments.
Loans of securities are required at all times to be secured by collateral at
least equal to 102% of the value of the securities at inception of the loan,
and not less then 100% thereafter. The Fund may invest cash collateral in
short-term money market instruments including: U.S. Treasury Bills, U.S. agency
obligations, commercial paper, money market mutual funds, repurchase agreements
and other highly rated, liquid investments. During the life of securities
loans, the collateral and securities loaned remain subject to fluctuation in
value. IBT marks to market securities loaned and the collateral each business
day. If additional collateral is due (at least $1), IBT collects additional
cash collateral from the borrowers. Although securities loaned will be fully
collateralized at all times, IBT may experience delays in, or may be prevented
from, recovering the collateral on behalf of the Fund. The Fund may recall a
loaned security position at any time from the borrower through IBT. In the
event the borrower fails to timely return a recalled security, IBT may
indemnify the Fund by purchasing replacement securities for the Fund at its own
expense and claiming the collateral to fund such a purchase. IBT absorbs the
loss if the collateral value is not sufficient to cover the cost of the
replacement securities. If replacement securities are not available, IBT will
credit the equivalent cash value to the Fund.
IDEX Mutual Funds Annual Report 2003
IDEX Marsico Growth 9
IDEX Marsico Growth
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 1-(continued)
Income from securities lending is included in the Statement of Operations. The
amounts of collateral and value of securities on loan are included in the
Statement of Assets and Liabilities as well as in the Schedule of Investments.
Security transactions and investment income: Security transactions are recorded
on the trade date. Security gains and losses are calculated on the specific
identification basis. Dividend income is recorded on the ex-dividend date or,
in the case of foreign securities, as soon as the Fund is informed of the
ex-dividend date. Interest income, including accretion of discounts and
amortization of premiums, is recorded on the accrual basis commencing on the
settlement date.
Foreign currency denominated investments: The accounting records of the Fund
are maintained in U.S. dollars. Securities and other assets and liabilities
denominated in foreign currencies are translated into U.S. dollars at the
closing exchange rate each day. The cost of foreign securities is translated at
the exchange rate in effect when the investment was acquired. The Fund combines
fluctuations from currency exchange rates and fluctuations in value when
computing net realized and unrealized gains or losses from investments.
Net foreign currency gains and losses resulting from changes in exchange rates
include: 1) foreign currency fluctuations between trade date and settlement
date of investment security transactions; 2) gains and losses on forward
foreign currency contracts; and 3) the difference between the receivable
amounts of interest and dividends recorded in the accounting records in U.S.
dollars and the amounts actually received.
Foreign currency denominated assets may involve risks not typically associated
with domestic transactions, including unanticipated movements in exchange
currency rates, the degree of government supervision and regulation of security
markets, and the possibility of political or economic instability.
Dividend distributions: Distributions to shareholders are recorded on the
ex-dividend date and are determined in accordance with Federal income tax
regulations which may differ from GAAP.
NOTE 2. RELATED PARTY TRANSACTIONS
AEGON/Transamerica Fund Advisers, Inc. ("ATFA") is the Fund's investment
adviser. AEGON/Transamerica Fund Services, Inc. ("ATFS") is the Fund's
administrator. AFSG Securities Corp. ("AFSG") is the Fund's
distributor/principal underwriter. AEGON/Transamerica Investor Services, Inc.
("ATIS") is the 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. AUSA and WRL are wholly owned indirect
subsidiaries of AEGON NV, a Netherlands corporation.
The following schedule reflects the percentage of fund assets owned by
affiliated mutual funds (ie: through the assets allocation funds)
Net % of
Assets Net Assets
-------- -----------
IDEX Asset Allocation Moderate Growth 13,527 22%
IDEX Asset Allocation Moderate 10,763 18%
---
40%
Investment advisory fees: The Fund pays management fees to ATFA based on
average daily net assets ("ANA") at the following stated break points from
November 1, 2002 to February 28, 2003:
0.80% of the first $250 million ANA
0.75% of the next $250 million of ANA
0.70% of the next $500 million of ANA
0.60% of ANA over $1 billion
From March 1, 2003 on:
0.80% of the first $500 million of ANA
0.70% of ANA over $500 million of ANA
ATFA currently voluntarily waives its advisory fee and will reimburse the Fund
to the extent that operating expenses, excluding 12b-1 fees, exceed the
following stated annual limit:
1.40% Expense Limit
If total fund expenses fall below the annual expense limitations agreed to by
the adviser within the succeeding three years, the Fund may be required to pay
the advisor a portion or all of the waived advisory fees.
Advisory Fee Available for
Waived Recapture Through
-------------- ------------------
Fiscal Year 2003 27 10/31/2006
Distribution and service fees: The Fund has a 12b-1 distribution plan under the
1940 Act pursuant to which an annual fee, based on average daily net assets, is
paid to the distributor for various disbursements such as broker-dealer account
servicing fees and other promotional expenses of the Fund. The 12b-1 fee for
the Fund is comprised of a 0.25% service fee and the remaining amount is an
asset-based sales charge/distribution fee. The Fund is authorized under the
12b-1 plan to pay fees on each class up to the following limits:
Class A 0.35%
Class B 1.00%
Class C 1.00%
Class L 1.00%
Class M 0.90%
Underwriter commissions relate to front-end sales charges imposed for Class A
and M shares and contingent deferred sales charges from Classes B, L, M and
certain A share redemptions. For the year ended October 31, 2003, the
underwriter commissions were as follows:
IDEX Mutual Funds Annual Report 2003
IDEX Marsico Growth 10
IDEX Marsico Growth
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 2-(continued)
Received by Underwriter $ 64
Retained by Underwriter 8
Contingent Sales Charges 70
Administrative services: The Fund has entered into an agreement with ATFS for
financial and legal fund administration services, which include such items as
compliance, expenses, financial statements and other reporting, distributions,
tax returns, prospectus preparation, board of trustees meeting support and
other legal matters. Transfer agent fees are reflected separately from
Administration fees on the Statement of Operations. The Legal fees on the
Statement of Operations are for fees paid to external legal counsel. ATFS
provides its services to the Fund at cost and is reimbursed monthly.
Transfer agent fees: The Fund incurs ATIS annual per-account charges (not in
thousands) of $20.00 for each open shareholder account and $1.63 for each
closed account maintained, and certain out of pocket expenses.
Deferred compensation plan: Each eligible Fund Trustee may elect participation
in the Deferred Compensation Plan ("the Plan"). Under the Plan, such Trustees
may defer payment of a percentage of their total fees earned as a Fund Trustee.
These deferred amounts may be invested in any IDEX Fund. At October 31, 2003,
the value of invested plan amounts was $1. Invested plan amounts and the total
liability for deferred compensation to the Trustees under the Plan at October
31, 2003, are included in Net assets in the accompanying Statement of Assets
and Liabilities.
NOTE 3. INVESTMENT TRANSACTIONS
The cost of securities purchased and proceeds from securities sold (excluding
short-term securities) for the year ended October 31, 2003, were as follows:
Purchases of securities:
Long-Term excluding U.S. Government $ 78,030
U.S. Government 1,186
Proceeds from maturities and sales of securities:
Long-Term excluding U.S. Government 55,946
U.S. Government 676
NOTE 4. FEDERAL INCOME TAX MATTERS
The Fund has not made any provision for federal income or excise taxes due to
its policy to distribute all of its taxable income and capital gains to its
shareholders and otherwise qualify as a regulated investment company under the
Internal Revenue Code. Income and capital gain distributions are determined in
accordance with income tax regulations, which may differ from GAAP. These
differences are primarily due to differing treatments for items including, but
not limited to, wash sales, net operating losses and capital loss
carryforwards.
Reclassifications between Undistributed net investment income (loss),
Undistributed net realized capital gains (loss) and Shares of beneficial
interest are made to reflect income and gains available for distribution under
federal tax regulations. Results of operations and net assets are not effected
by these reclassifications. These reclassifications are as follows:
Shares of beneficial interest, unlimited
shares authorized $ (603)
Accumulated net investment income (loss) 600
Accumulated net realized gain (loss) from
investment securities 3
The tax basis components of distributable earnings as of October 31, 2003, are
as follows:
Undistributed Ordinary Income $ -
=========
Undistributed Long-term Capital Gains $ -
=========
Capital Loss Carryforward $ (14,933)
=========
Net Unrealized Appreciation (Depreciation) $ 10,600
=========
The capital loss carryforwards are available to offset future realized capital
gains through the periods listed:
Capital Loss
Carryforward Available through
- -------------- ------------------
$ 1,802 October 31, 2009
4,581 October 31, 2010
8,550 October 31, 2011
The aggregate cost of investments and composition of unrealized appreciation
(depreciation) for federal income tax purposes as of October 31, 2003, are as
follows:
Federal Tax Cost Basis $ 52,808
=========
Unrealized Appreciation $ 10,934
Unrealized (Depreciation) (334)
---------
Net Unrealized Appreciation (Depreciation) $ 10,600
=========
IDEX Mutual Funds Annual Report 2003
IDEX Marsico Growth 11
- --------------------------------------------------------------------------------
Report of Independent Certified Public Accountants
To the Board of Trustees and Shareholders of
IDEX Marsico Growth
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of IDEX Marsico Growth (the "Fund")
(one of the portfolios constituting the IDEX Mutual Funds) at October 31, 2003,
and the results of its operations, the changes in its net assets and the
financial highlights for each of the periods indicated, in conformity with
accounting principles generally accepted in the United States of America. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with auditing standards generally accepted in the United States of America,
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at October 31, 2003 by correspondence with the
custodian and brokers, provide a reasonable basis for our opinion.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Tampa, Florida
December 18, 2003
IDEX Mutual Funds Annual Report 2003
IDEX Marsico Growth 12
IDEX PBHG Mid Cap Growth
- --------------------------------------------------------------------------------
MARKET ENVIRONMENT
Despite mixed results in the first several months of the fiscal year, the broad
stock market posted strong gains for most of the period in response to an
improving economic outlook and better corporate earnings. Throughout most of
the fiscal year, investors appeared to favor more cyclical stocks or those
companies expected to benefit most from the economic rebound. As a result,
technology stocks, along with smaller company issues, again captured investors'
attention throughout much of the most recent months of the fiscal year.
PERFORMANCE
For the year ended October 31, 2003, IDEX PBHG Mid Cap Growth returned 25.07%.
By comparison its benchmark, the Russell MidCap Growth Index, returned 39.30%.
STRATEGY REVIEW
We underperformed the benchmark in technology for the twelve-month period,
despite positive performance from many of our holdings in this sector. Although
we were underweight in technology compared to the benchmark at the start of the
period, we gradually increased our exposure and ended the year with an
overweight position. Our improved conviction in many of our technology holdings
is supported by the fact that the number of technology stocks in our top ten
common stock holdings has increased from one to five. Companies such as Seagate
Technology, Inc., Symantec Corporation and Marvell Technology Group Ltd.
represent our diversified technology holdings in storage, software, and
semiconductors, respectively.
Health care also negatively impacted the portfolio's performance despite strong
performances by a few holdings. Specifically, investments in HMO's and PBM's
(prescription benefit management companies) experienced negative investor
sentiment despite stable underlying trends. Our exposure in health care was
reduced substantially during the period as we trimmed or eliminated a number of
large holdings where we felt the outlook had become less certain.
The greatest contribution to portfolio performance was made by the services
sector. Handsome returns from the secondary education group, represented by
Career Education Corporation and others, were supplemented by positive returns
from Cognizant Technology Solutions Corporation, a company benefiting from the
secular trend of outsourcing information technology (IT) services.
Our greatest challenge during the year was maintaining a focus on high quality
companies. This proved challenging as increasingly optimistic investors began
to revisit companies of lesser quality where evidence of an improving outlook
for growth has yet to be seen. These companies are largely beneficiaries of an
improved pricing environment rather than increased market penetration, product
introductions, or leverage to high growth end markets.
/s/ Michael S. Sutton
Michael S. Sutton, CFA
/s/ Peter J. Niedland
Peter J. Niedland, CFA
Co-Fund Managers,
Pilgrim Baxter & Associates, Ltd.
IDEX Mutual Funds Annual Report 2003
IDEX PBHG Mid Cap Growth 1
IDEX PBHG Mid Cap Growth
- --------------------------------------------------------------------------------
Comparison of change in value of $10,000 investment in Class A shares and its
comparative index.
Growth of $10,000
Inception of 3/1/99 through 10/31/03
Investment less sales charges - $9,452
[The following table was depicted as a mountain chart in the printed material.]
DATE Class A Russell MCG
- ------------------ ---------------- -----------
3/1/1999 9,452 10,000
3/31/1999 10,302 10,557
6/30/1999 12,156 11,657
9/30/1999 12,840 11,073
12/31/1999 19,002 15,444
3/31/2000 21,623 18,706
6/30/2000 22,511 17,321
9/30/2000 23,940 17,758
12/31/2000 15,716 13,630
3/31/2001 9,795 10,211
6/30/2001 11,792 11,863
9/30/2001 8,366 8,565
12/31/2001 9,846 10,883
3/31/2002 9,199 10,691
6/30/2002 8,210 8,739
9/30/2002 6,873 7,238
12/31/2002 6,844 7,901
3/31/2003 6,662 7,899
6/30/2003 7,652 9,381
9/30/2003 8,162 10,053
10/31/2003 8,874 10,863
Average Annual Total Return for Periods Ended 10/31/03
- --------------------------------------------------------------------------------
From Inception
1 year Inception Date
----------- ----------- ----------
Class A (NAV) 25.07% -1.34% 3/1/99
Class A (POP) 18.19% -2.53% 3/1/99
Russell MCG(1) 39.30% 1.79% 3/1/99
- --------------- ----- ------- ------
Class B (NAV) 24.27% -2.09% 3/1/99
Class B (POP) 19.27% -2.30% 3/1/99
- --------------- ----- ------- ------
Class C (NAV) 24.27% -11.48% 11/1/99
- --------------- ----- ------- -------
Class L (NAV) - 28.02% 11/11/02
Class L (POP) - 26.02% 11/11/02
- --------------- ----- ------- --------
Class M (NAV) 24.44% -1.97% 3/1/99
Class M (POP) 22.20% -2.18% 3/1/99
- --------------- ----- ------- --------
NOTES
(1) The Russell Mid Cap Growth (Russell MCG) 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 Micropal(R)(C) 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 shares, (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.
Periods less than 1 year represent total return and are not annualized.
This material must be preceded or accompanied by a current prospectus, which
includes specific contents regarding the investment objectives and policies of
this fund.
IDEX Mutual Funds Annual Report 2003
IDEX PBHG Mid Cap Growth 2
IDEX PBHG Mid Cap Growth
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
At October 31, 2003
(all amounts except share amounts in thousands)
Shares Value
----------- -----------
COMMON STOCKS (98.3%)
Apparel & Accessory Stores (4.6%)
Chico's FAS, Inc. (a)(b) 23,000 $ 863
Christopher & Banks Corporation 24,000 701
Hot Topic, Inc. (a)(b) 15,500 445
Pacific Sunwear of California, Inc. (a)(b) 25,500 589
Ross Stores, Inc. 10,000 500
Automotive Dealers & Service Stations (1.1%)
O'Reilly Automotive, Inc. (a) 17,500 758
Business Services (1.1%)
Ask Jeeves, Inc. (a)(b) 20,000 383
eBay Inc. (a) 630 35
Fair, Isaac and Company, Incorporated 4,500 287
Getty Images, Inc. (a) 400 18
Communications Equipment (1.0%)
ADTRAN, Inc. 10,000 680
Nokia Oyj-ADR 800 14
QUALCOMM Incorporated 300 14
Computer & Data Processing Services (17.0%)
Adobe Systems Incorporated 38,500 1,688
Anteon International Corporation (a)(b) 18,000 615
CACI International Inc.-Class A (a) 14,000 693
Citrix Systems, Inc. (a) 18,000 455
Cognizant Technology Solutions
Corporation (a) 28,500 1,294
Cognos Incorporated (a) 37,000 1,275
Fiserv, Inc. (a) 14,500 512
Microsoft Corporation 1,800 47
Network Associates, Inc. (a) 27,500 383
Oracle Corporation (a) 2,400 29
PeopleSoft, Inc. (a) 65,000 1,349
Siebel Systems, Inc. (a) 44,000 554
Symantec Corporation (a) 28,000 1,866
Take-Two Interactive Software, Inc. (a)(b) 16,000 633
Yahoo! Inc. (a) 3,600 157
Computer & Office Equipment (7.0%)
Cisco Systems, Inc. (a) 4,400 92
Cray Inc. (a) 101,900 1,326
Dell Computer Corporation (a) 1,000 36
Emulex Corporation (a)(b) 31,200 884
Foundry Networks, Inc. (a) 39,000 907
Network Appliance, Inc. (a)(b) 32,500 802
SanDisk Corporation (a)(b) 8,500 685
Construction (1.5%)
Chicago Bridge & Iron Company NV-NY Shares 20,500 559
Jacobs Engineering Group Inc. (a) 10,500 486
Shares Value
----------- -----------
Drug Stores & Proprietary Stores (1.3%)
Omnicare, Inc. 22,500 $ 863
Educational Services (6.7%)
Apollo Group, Inc.-Class A (a) 5,100 324
Career Education Corporation (a) 34,964 1,872
Corinthian Colleges, Inc. (a) 23,401 1,449
University of Phoenix Online (a) 13,700 942
Electronic & Other Electric Equipment (0.3%)
Wilson Greatbatch Technologies, Inc. (a) 5,600 211
Electronic Components & Accessories (15.7%)
AMIS Holdings, Inc. (a) 27,900 562
Broadcom Corporation-Class A (a)(b) 38,400 1,227
Cypress Semiconductor Corporation (a)(b) 34,000 730
Intersil Corporation-Class A 20,500 529
Jabil Circuit, Inc. (a) 22,000 613
Linear Technology Corporation 18,000 767
Marvell Technology Group Ltd. (a)(b) 36,000 1,579
Maxim Integrated Products 6,500 323
Microchip Technology Incorporated 26,500 867
OmniVision Technologies, Inc. (a)(b) 10,000 568
QLogic Corporation (a)(b) 22,900 1,284
Silicon Laboratories Inc. (a) 18,000 972
Vishay Intertechnology, Inc. (a) 33,500 628
Environmental Services (1.0%)
Stericycle, Inc. (a) 15,300 707
Furniture & Home Furnishings Stores (2.3%)
Cost Plus, Inc. (a) 18,500 849
Williams-Sonoma, Inc. (a) 20,500 724
Health Services (3.3%)
Caremark Rx, Inc. (a)(b) 12,200 306
Lincare Holdings Inc. (a) 16,500 643
Odyssey HealthCare, Inc. (a) 23,650 656
Select Medical Corporation (a) 19,000 638
Industrial Machinery & Equipment (4.1%)
FMC Technologies, Inc. (a) 21,300 428
Lam Research Corporation (a)(b) 21,500 618
Varian Semiconductor Equipment
Associates, Inc. (a) 16,000 774
Zebra Technologies Corporation-Class A (a) 16,950 965
Instruments & Related Products (1.9%)
Avid Technology, Inc. (a)(b) 15,000 776
Cognex Corporation 20,500 550
Leather & Leather Products (1.7%)
Coach, Inc. (a) 32,200 1,142
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX PBHG Mid Cap Growth 3
IDEX PBHG Mid Cap Growth
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Shares Value
-------- ---------
Management Services (2.5%)
Corporate Executive Board Company
(The) (a)(b) 33,500 $ 1,709
Medical Instruments & Supplies (4.7%)
DENTSPLY International Inc. 15,200 672
ResMed Inc. (a)(b) 22,000 919
Respironics, Inc. (a) 9,100 379
Varian Medical Systems, Inc. (a) 19,000 1,215
Pharmaceuticals (4.9%)
American Pharmaceutical Partners, Inc. (a)(b) 5,250 128
Celgene Corporation (a) 19,500 813
Invitrogen Corporation (a) 11,500 731
Martek Biosciences Corp. (a)(b) 5,000 242
Medicines Company (The) (a) 8,000 213
Taro Pharmaceutical Industries Ltd. (a) 11,000 707
Techne Corporation (a) 15,000 522
Research & Testing Services (1.1%)
Affymetrix, Inc. (a)(b) 20,500 525
Gen-Probe Incorporated (a) 7,200 193
Restaurants (1.6%)
Applebee's International, Inc. 17,500 656
Cheesecake Factory Incorporated (The) (a) 11,500 459
Retail Trade (6.4%)
Amazon.com, Inc. (a) 200 11
CDW Corporation 16,000 961
PETCO Animal Supplies, Inc. (a) 19,000 630
PETsMART, Inc. 20,500 525
Schein (Henry), Inc. (a) 11,500 714
Staples, Inc. (a)(b) 25,500 684
Tiffany & Co. (b) 18,000 854
Savings Institutions (2.1%)
New York Community Bancorp, Inc. (b) 39,533 1,431
Variety Stores (2.4%)
Dollar Tree Stores, Inc. (a) 16,500 630
Family Dollar Stores, Inc. 22,800 994
Wholesale Trade Nondurable Goods (1.0%)
Tractor Supply Company (a) 16,200 679
-------
Total Common Stocks (cost: $53,832) 66,896
-------
Principal Value
----------- -----------
SECURITY LENDING COLLATERAL (19.3%)
Debt (17.0%)
Bank Notes (2.0%)
Canadian Imperial Bank of Commerce
1.12%, due 11/04/2003 $ 570 $ 570
Fleet National Bank
1.06%, due 01/21/2004 799 799
Euro Dollar Terms (9.6%)
Bank of Montreal
1.03%, due 11/13/2003 456 456
1.04%, due 11/14/2003 401 401
Bank of Nova Scotia (The)
1.06% due 11/14/203 228 228
Bank of Scotland
1.04%, due 11/14/2003 456 456
Citigroup Inc.
1.08%, due 01/05/2004 685 685
Credit Agricole Indosuez
1.08%, due 01/06/2004 502 502
Den Danske Bank
1.04%, due 11/10/2003 228 228
1.08%, due 01/20/2004 684 684
Royal Bank of Canada
1.04%, due 11/24/2003 570 570
1.06%, due 12/08/2003 228 228
Royal Bank of Scotland Group PLC (The)
1.08%, due 01/15/2004 684 684
SouthTrust Bank
1.08%, due 01/16/2004 684 684
Wells Fargo & Company
1.04%, due 11/20/2003 684 684
Promissory Notes (1.2%)
Goldman Sachs Group, Inc. (The)
1.15%, due 11/03/2003 799 799
Repurchase Agreements (4.2%)(c)
Goldman Sachs Group, Inc. (The)
1.10% Repurchase Agreement
dated 10/31/2003 to be repurchased
at $228 on 11/03/2003 228 228
Merrill Lynch & Co., Inc.
1.10% Repurchase Agreement
dated 10/31/2003 to be repurchased
at $2,624 on 11/03/2003 2,624 2,624
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX PBHG Mid Cap Growth 4
IDEX PBHG Mid Cap Growth
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Shares Value
-------------- ------------
Investment Companies (2.3%)
Money Market Funds (2.3%)
Merrimac Cash Series Fund-
Premium Class
1-day yield of 0.97% 1,596,848 $ 1,597
---------
Total Security Lending Collateral (cost: $13,107) 13,107
---------
Total Investment Securities (cost: $66,939) $ 80,003
=========
SUMMARY:
Investments, at value 117.6 % $ 80,003
Liabilities in excess of other assets (17.6)% (11,971)
--------- ---------
Net assets 100.0 % $ 68,032
========= =========
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 (see Note
1). The value at October 31, 2003, of all securities on loan is $12,679.
(c) Cash collateral for the Repurchase Agreements, valued at $2,909, 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
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX PBHG Mid Cap Growth 5
IDEX PBHG Mid Cap Growth
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
At October 31, 2003
(all amounts except per share amounts in thousands)
Assets:
Investment securities, at value (cost: $66,939)
(including $12,679 of securities loaned) $ 80,003
Cash 7,547
Receivables:
Investment securities sold 1,086
Shares of beneficial interest sold 103
Interest 1
Dividends 3
Due from investment adviser 39
Other 17
---------
88,799
---------
Liabilities:
Investment securities purchased 7,309
Accounts payable and accrued liabilities:
Shares of beneficial interest redeemed 63
Distribution fees 44
Transfer agent fees 115
Payable for securities on loan 13,107
Other 129
---------
20,767
---------
Net Assets $ 68,032
=========
Net Assets Consist of:
Shares of beneficial interest, unlimited shares authorized $ 172,178
Accumulated net investment income (loss) (4)
Accumulated net realized gain (loss) from investment
securities (117,206)
Net unrealized appreciation (depreciation) on
investment securities 13,064
---------
Net Assets $ 68,032
=========
Shares Outstanding:
Class A 2,439
Class B 3,700
Class C 785
Class L 98
Class M 522
Net Asset Value Per Share:
Class A $ 9.23
Class B 8.91
Class C 8.91
Class L 8.91
Class M 8.96
Maximum Offering Price Per Share (a):
Class A $ 9.77
Class M 9.05
(a) 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.
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the year ended October 31, 2003
(all amounts in thousands)
Investment Income:
Interest $ 12
Dividends 68
Income from loaned securities-net 31
--------
111
--------
Expenses:
Management and advisory fees 440
Transfer agent fees 813
Printing and shareholder reports 114
Custody fees 29
Administration fees 27
Legal fees 3
Auditing and accounting fees 59
Trustees fees 4
Registration fees 149
Other 24
Distribution and service fees:
Class A 66
Class B 266
Class C 59
Class L 2
Class M 32
--------
Total expenses 2,087
Less:
Advisory fee waiver and reimbursements (893)
--------
Net expenses 1,194
--------
Net Investment Income (Loss) (1,083)
--------
Net Realized and Unrealized Gain (Loss):
Realized gain (loss) from investment securities 3,990
Increase (decrease) in unrealized appreciation
(depreciation) on investment securities 11,464
--------
Net Gain (Loss) on Investment Securities 15,454
--------
Net Increase (Decrease) in Net Assets Resulting from
Operations $ 14,371
========
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX PBHG Mid Cap Growth 6
IDEX PBHG Mid Cap Growth
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended
(all amounts in thousands)
October 31, October 31,
2003 2002
----------- -----------
Increase (Decrease) In Net Assets From:
Operations:
Net investment income (loss) $ (1,083) $ (1,304)
Net realized gain (loss) from investment
securities 3,990 (16,341)
Net unrealized appreciation
(depreciation) on investment
securities 11,464 4,123
-------- --------
14,371 (13,522)
-------- --------
Distributions to Shareholders:
From net investment income:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
-------- --------
- -
-------- --------
From net realized gains:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
-------- --------
- -
-------- --------
Capital Share Transactions:
Proceeds from shares sold:
Class A - 10,716
Class B 848 5,413
Class C 4,119 3,175
Class L 736 -
Class M 4,853 1,464
-------- --------
10,556 20,768
-------- --------
Dividends and distributions reinvested:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
-------- --------
- -
-------- --------
Proceeds from fund acquisition:
Class A 4,698 -
Class B 7,930 -
Class C 2,171 -
Class L 20 -
Class M 1,054 -
-------- --------
15,873 -
-------- --------
Cost of shares redeemed:
Class A (8,056) (13,492)
Class B (6,900) (10,908)
Class C (3,509) (4,987)
Class L (26) -
Class M (1,200) (3,002)
-------- --------
(19,691) (32,389)
-------- --------
6,738 (11,621)
-------- --------
Net increase (decrease) in net assets $ 21,109 $(25,143)
-------- --------
Net Assets:
Beginning of year 46,923 72,066
-------- --------
End of year $ 68,032 $ 46,923
======== ========
Accumulated Net Investment Income (Loss) $ 115 $ (3)
======== ========
Share Activity:
Shares issued:
Class A - 1,183
Class B 373 602
Class C 203 356
Class L 98 -
Class M 101 179
-------- --------
775 2,320
-------- --------
Shares issued on fund acquisition:
Class A 682 -
Class B 1,187 -
Class C 325 -
Class L 3 -
Class M 158 -
-------- --------
2,355 -
-------- --------
Shares issued-reinvested from distributions:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
-------- --------
- -
-------- --------
Shares redeemed:
Class A (486) (1,533)
Class B (939) (1,282)
Class C (472) (577)
Class L (3) -
Class M (162) (360)
-------- --------
(2,062) (3,752)
-------- --------
Net increase (decrease) in shares
outstanding 1,068 (1,432)
======== ========
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX PBHG Mid Cap Growth 7
IDEX PBHG Mid Cap Growth
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share of beneficial interest outstanding throughout each period
------------------------------------------------------------------------------------------------------------
Investment Operations Distributions
------------------------------------------- -------------------------------------
Net Asset Net Asset
For the Value, Net Net Realized From Net From Net Value,
Period Beginning Investment and Unrealized Total Investment Realized Total End
Ended (d)(g) of Period Income (Loss) Gain (Loss) Operations Income Gains Distributions of Period
- -----------------------------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 $ 7.38 $(0.12) $ 1.97 $ 1.85 $ - $ - $ - $ 9.23
10/31/2002 9.24 (0.14) (1.72) (1.86) - - - 7.38
10/31/2001 20.94 (0.12) (11.58) (11.70) - - - 9.24
10/31/2000 14.80 (0.02) 6.47 6.45 - (0.31) (0.31) 20.94
10/31/1999 10.00 0.02 4.78 4.80 - - - 14.80
- -----------------------------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 7.17 (0.17) 1.91 1.74 - - - 8.91
10/31/2002 9.05 (0.19) (1.69) (1.88) - - - 7.17
10/31/2001 20.76 (0.21) (11.50) (11.71) - - - 9.05
10/31/2000 14.76 (0.16) 6.47 6.31 - (0.31) (0.31) 20.76
10/31/1999 10.00 (0.02) 4.78 4.76 - - - 14.76
- -----------------------------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 7.17 (0.17) 1.91 1.74 - - - 8.91
10/31/2002 9.05 (0.19) (1.69) (1.88) - - - 7.17
10/31/2001 20.76 (0.22) (11.49) (11.71) - - - 9.05
10/31/2000 14.76 (0.16) 6.47 6.31 - (0.31) (0.31) 20.76
- -----------------------------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 6.96 (0.18) 2.13 1.95 - - - 8.91
- -----------------------------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 7.20 (0.16) 1.92 1.76 - - - 8.96
10/31/2002 9.08 (0.18) (1.70) (1.88) - - - 7.20
10/31/2001 20.79 (0.20) (11.51) (11.71) - - - 9.08
10/31/2000 14.77 (0.14) 6.47 6.33 - (0.31) (0.31) 20.79
10/31/1999 10.00 (0.01) 4.78 4.77 - - - 14.77
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
-----------------------------------------------------------------------
Ratio of Expenses
Net Assets, to Average Net Investment
For the End of Net Assets (a) Income (Loss) Portfolio
Period Total Period ----------------------- to Average Turnover
Ended (g) Return (c) (000's) Net (e) Total (f) Net Assets (a) Rate (b)
- ---------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 25.07% $ 22,508 1.75% 3.38% (1.55)% 229%
10/31/2002 (20.11) 16,555 1.73 2.75 (1.51) 176
10/31/2001 (55.87) 23,952 1.55 2.12 (0.91) 172
10/31/2000 43.78 48,842 1.55 2.06 (0.80) 129
10/31/1999 48.06 2,571 1.55 6.95 (0.88) 151
- ---------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 24.27 32,976 2.40 4.03 (2.20) 229
10/31/2002 (20.78) 22,081 2.38 3.40 (2.16) 176
10/31/2001 (56.42) 34,017 2.20 2.77 (1.56) 172
10/31/2000 43.07 68,184 2.20 2.71 (1.45) 129
10/31/1999 47.63 2,875 2.20 7.60 (1.53) 151
- ---------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 24.27 7,000 2.40 4.03 (2.20) 229
10/31/2002 (20.78) 5,226 2.38 3.40 (2.16) 176
10/31/2001 (56.42) 8,595 2.20 2.77 (1.56) 172
10/31/2000 43.07 16,972 2.20 2.71 (1.45) 129
- ---------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 28.02 871 2.40 4.03 (2.20) 229
- ---------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 24.44 4,677 2.30 3.93 (2.10) 229
10/31/2002 (20.69) 3,061 2.28 3.30 (2.06) 176
10/31/2001 (56.33) 5,502 2.10 2.67 (1.46) 172
10/31/2000 43.17 14,734 2.10 2.61 (1.35) 129
10/31/1999 47.70 1,016 2.10 7.50 (1.43) 151
- ---------------------------------------------------------------------------------------------------------------
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX PBHG Mid Cap Growth 8
IDEX PBHG Mid Cap Growth
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (continued)
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 are not annualized.
(d) Per share information is calculated based on average number of shares
outstanding for the periods ended 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 (see note 2).
(f) Ratio of Total Expenses to Average Net Assets includes all expenses before
fee waivers and reimbursements by the investment adviser.
(g) IDEX PBHG Mid Cap Growth ("the Fund") commenced operations on March 1,
1999. The inception date for the Fund's offering of share classes C and L
are as follows:
Class C - November 1, 1999
Class L - November 11, 2002
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX PBHG Mid Cap Growth 9
IDEX PBHG Mid Cap Growth
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
At October 31, 2003
(all amounts in thousands)
NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
IDEX Mutual Funds is a Massachusetts business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company. IDEX PBHG Mid Cap Growth ("the Fund"), part of
IDEX Mutual Funds, began operations on March 1, 1999.
On March 1, 2003, the Fund acquired all the net assets of IDEX Munder Net50 and
IDEX PBHG Technology & Communications pursuant to a plan of reorganization
approved by shareholders of IDEX Munder Net50 and IDEX PBHG Technology &
Communications on February 12, 2003. The acquisition was accomplished by a
tax-free exchange of 2,355 shares of the Fund for the 332 shares of IDEX Munder
Net50 and for the 16,322 shares of IDEX PBHG Technology & Communications
outstanding on February 28, 2003. IDEX Munder Net50 and IDEX PBHG Technology &
Communications' net assets at that date ($934 and $14,939, respectively),
including ($38 and $325, respectively) unrealized depreciation, were combined
with those of the Fund. Proceeds in connection with the acquisitions were as
follows:
IDEX Munder Net50:
Shares Amount
-------- -------
Proceeds in connection with the
acquisition
Class A 43 $ 294
Class B 64 428
Class C 23 150
Class L 1 9
Class M 8 53
-----
$ 934
=====
IDEX PBHG Technology & Communications:
Shares Amount
-------- -----------
Proceeds in connection with the
acquisition
Class A 639 $ 4,404
Class B 1,123 7,502
Class C 302 2,021
Class L 2 11
Class M 150 1,001
--------
$ 14,939
========
In the normal course of business, the Fund enters into contracts that contain a
variety of representations and warranties and which provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown, as this would involve future claims that may be made against the Fund
and/or its affiliates that have not yet occurred. However, based on experience,
the Fund expects the risk of loss to be remote.
See the Prospectus and Statement of Additional Information for a description of
the Fund's investment objective.
In preparing the Fund's financial statements in accordance with accounting
principles generally accepted in the United States of America ("GAAP"),
estimates or assumptions (which could differ from actual results) may be used
that affect reported amounts and disclosures. The following policies were
consistently followed by the Fund, in accordance with GAAP.
Multiple class operations and expenses: The Fund currently offers five classes
of shares, each with a public offering price that reflects different sales
charges, if any, and expense levels. Effective November 11, 2002, Class C and M
shares were closed to new investors. Income, non-class specific expenses and
realized and unrealized gains and losses, are allocated daily to each class,
based upon the value of shares outstanding method as permitted under Rule 18f-3
of the 1940 Act. Each class bears its own specific expenses as well as a
portion of general, common expenses.
Security valuations: Fund investments traded on an exchange are valued at the
closing price on the day of valuation on the exchange where the security is
principally traded. With respect to securities traded on the NASDAQ INMS, such
closing price may be the last reported sales price or the NASDAQ Official
Closing Price.
Securities traded in the over-the-counter market and listed securities for
which no sale was reported on that date are valued at the last quoted bid
price.
Debt securities are valued by independent pricing services; however, those that
mature in sixty days or less are valued at amortized cost, which approximates
market.
Other securities for which quotations are not readily available are valued at
fair value determined in good faith, in accordance with procedures established
by and, under the supervision of the Board of Trustees and the Fund's Valuation
Committee.
Cash: The Fund may leave cash overnight in its cash account with the custodian,
Investors Bank & Trust Company ("IBT"). IBT has been contracted on behalf of
the Fund to invest the excess cash into a savings account, which at October 31,
2003, was paying an interest rate of 0.75%.
Directed brokerage: The sub-adviser, to the extent consistent with the best
execution and usual commission rate policies and practices, may place security
transactions of the Fund with broker/dealers with which IDEX Mutual Funds has
established a Directed Brokerage Program. A Directed Brokerage Program is any
arrangement under which a broker/dealer applies a portion of the commissions
received by such broker/dealer on the security transactions to the Fund. In no
event will commissions paid by the Fund be used to pay expenses that would
otherwise be borne by any other funds within IDEX Mutual Funds, or by any other
party. Directed commissions during the year ended October 31, 2003, of $43 are
included in net realized gains in the Statement of Operations.
IDEX Mutual Funds Annual Report 2003
IDEX PBHG Mid Cap Growth 10
IDEX PBHG Mid Cap Growth
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 1-(continued)
Securities lending: The Fund may lend securities to enhance fund earnings from
investing cash collateral received in making such loans to qualified borrowers
(typically broker/dealers). The Fund has engaged its custodian bank, IBT, as a
lending agent to administer its securities lending program. IBT earned $10 of
program net income for its services. When the Fund makes a security loan, it
receives cash collateral as protection against risk that the borrower will
default on the loan, and records an asset for the cash invested collateral and
a liability for the return of the collateral.
Securities on loan are included in Investment securities at value on the
Statement of Assets and Liabilities and remain on the Schedule of Investments.
Loans of securities are required to be secured by collateral at least equal to
102% of the value of the securities at inception of the loan, and not less then
100% thereafter. The Fund may invest cash collateral in short-term money market
instruments including: U.S. Treasury Bills, U.S. agency obligations, commercial
paper, money market mutual funds, repurchase agreements and other highly rated,
liquid investments. During the life of securities loans, the collateral and
securities loaned remain subject to fluctuation in value. IBT marks to market
securities loaned and the collateral each business day. If additional
collateral is due (at least $1), IBT collects additional cash collateral from
the borrowers. Although securities loaned will be fully collateralized at all
times, IBT may experience delays in, or may be prevented from, recovering the
collateral on behalf of the Fund. The Fund may recall a loaned security
position at any time from the borrower through IBT. In the event the borrower
fails to timely return a recalled security, IBT may indemnify the Fund by
purchasing replacement securities for the Fund at its own expense and claiming
the collateral to fund such a purchase. IBT absorbs the loss if the collateral
value is not sufficient to cover the cost of the replacement securities. If
replacement securities are not available, IBT will credit the equivalent cash
value to the Fund.
Income from securities lending is included in the Statement of Operations. The
amount of collateral and value of securities on loan are included in the
Statement of Assets and Liabilities as well as on the Schedule of Investments.
Security transactions and investment income: Security transactions are recorded
on the trade date. Security gains and losses are calculated on the specific
identification basis. Dividend income is recorded on the ex-dividend date or,
in the case of foreign securities, as soon as the Fund is informed of the
ex-dividend date. Interest income, including accretion of discounts and
amortization of premiums, is recorded on the accrual basis commencing on the
settlement date.
Dividend distributions: Distributions to shareholders are recorded on the
ex-dividend date and are determined in accordance with Federal income tax
regulations which may differ from GAAP.
NOTE 2. RELATED PARTY TRANSACTIONS
AEGON/Transamerica Fund Advisers, Inc. ("ATFA") is the Fund's investment
adviser. AEGON/Transamerica Fund Services, Inc. ("ATFS") is the Fund's
administrator. AFSG Securities Corp. ("AFSG") is the Fund's
distributor/principal underwriter. AEGON/Transamerica Investor Services, Inc.
("ATIS") is the 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. AUSA and WRL are wholly owned indirect
subsidiaries of AEGON NV, a Netherlands corporation.
Investment advisory fees: The Fund pays management fees to ATFA based on
average daily net assets ("ANA") at the following stated break points:
0.80% of the first $500 million of ANA
0.70% of ANA over $500 million
ATFA currently voluntarily waives its advisory fee and will reimburse the Fund
to the extent that operating expenses, excluding 12b-1 fees, exceed the
following stated annual limit:
1.40% Expense Limit
If total fund expenses fall below the annual expense limitations agreed to by
the adviser within the succeeding three years, the Fund may be required to pay
the advisor a portion or all of the waived advisory fees.
Distribution and service fees: The Fund has a 12b-1 distribution plan under the
1940 Act pursuant to which an annual fee, based on average daily net assets, is
paid to the distributor for various disbursements such as broker-dealer account
servicing fees and other promotional expenses of the Fund. The 12b-1 fee for
the Fund is comprised of a 0.25% service fee and the remaining amount is an
asset-based sales charge/distribution fee. The Fund is authorized under the
12b-1 plan to pay fees on each class up to the following limits:
Class A 0.35%
Class B 1.00%
Class C 1.00%
Class L 1.00%
Class M 0.90%
IDEX Mutual Funds Annual Report 2003
IDEX PBHG Mid Cap Growth 11
IDEX PBHG Mid Cap Growth
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 2-(continued)
Underwriter commissions relate to front-end sales charges imposed for Class A
and M shares and contingent deferred sales charges from Classes B, L, M and
certain A share redemptions. For the year ended October 31, 2003, the
underwriter commissions were as follows:
Received by Underwriter $ 79
Retained by Underwriter 7
Contingent Sales Charges 114
Administrative services: The Fund has entered into an agreement with ATFS for
financial and legal fund administration services, which include such items as
compliance, expenses, financial statements and other reporting, distributions,
tax returns, prospectus preparation, board of trustees meeting support and
other legal matters. Transfer agent fees are reflected separately from
Administration fees on the Statement of Operations. The Legal fees on the
Statement of Operations are for fees paid to external legal counsel. ATFS
provides its services to the Fund at cost and is reimbursed monthly.
Transfer agent fees: The Fund incurs ATIS annual per-account charges (not in
thousands) of $20.00 for each open shareholder account and $1.63 for each
closed account maintained, and certain out of pocket expenses.
Deferred compensation plan: Each eligible Fund Trustee may elect participation
in the Deferred Compensation Plan ("the Plan"). Under the Plan, such Trustees
may defer payment of a percentage of their total fees earned as a Fund Trustee.
These deferred amounts may be invested in any IDEX Fund. At October 31, 2003,
the value of invested plan amounts was $3. Invested plan amounts and the total
liability for deferred compensation to the Trustees under the Plan at October
31, 2003, are included in Net assets in the accompanying Statement of Assets
and Liabilities.
NOTE 3. INVESTMENT TRANSACTIONS
The cost of securities purchased and proceeds from securities sold (excluding
short-term securities) for the year ended October 31, 2003, were as follows:
Purchases of securities:
Long-Term excluding U.S. Government $ 119,005
U.S. Government -
Proceeds from maturities and sales of securities:
Long-Term excluding U.S. Government 124,377
U.S. Government -
NOTE 4. FEDERAL INCOME TAX MATTERS
The Fund has not made any provision for federal income or excise taxes due to
its policy to distribute all of its taxable income and capital gains to its
shareholders and otherwise qualify as a regulated investment company under the
Internal Revenue Code. Income and capital gain distributions are determined in
accordance with income tax regulations, which may differ from GAAP. These
differences are primarily due to differing treatments for items including, but
not limited to, wash sales, net operating losses and capital loss
carryforwards.
Reclassifications between Undistributed net investment income (loss),
Undistributed net realized capital gains (loss) and Shares of beneficial
interest are made to reflect income and gains available for distribution under
federal tax regulations. Results of operations and net assets are not effected
by these reclassifications. These reclassifications are as follows:
Shares of beneficial interest, unlimited shares
authorized $ 5,435
Accumulated net investment income (loss) 1,082
Accumulated net realized gain (loss) from
investment securities (6,517)
The tax basis components of distributable earnings as of October 31, 2003, are
as follows:
Undistributed Ordinary Income $ -
===========
Undistributed Long-term Capital Gains $ -
===========
Capital Loss Carryforward $ (116,005)
===========
Net Unrealized Appreciation (Depreciation) $ 11,864
===========
The capital loss carryforward utilized as of October 31, 2003 was $3,532. The
capital loss carryforwards are available to offset future realized capital
gains through the periods listed:
Capital Loss
Carryforward Available through
- -------------- ------------------
$ 96,985 October 31, 2009
19,020 October 31, 2011
The aggregate cost of investments and composition of unrealized appreciation
(depreciation) for federal income tax purposes as of October 31, 2003, are as
follows:
Federal Tax Cost Basis $ 68,139
========
Unrealized Appreciation $ 12,688
Unrealized (Depreciation) (824)
--------
Net Unrealized Appreciation (Depreciation) $ 11,864
========
IDEX Mutual Funds Annual Report 2003
IDEX PBHG Mid Cap Growth 12
- --------------------------------------------------------------------------------
Report of Independent Certified Public Accountants
To the Board of Trustees and Shareholders of
IDEX PBHG Mid Cap Growth
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of IDEX PBHG Mid Cap Growth (the
"Fund") (one of the portfolios constituting the IDEX Mutual Funds) at October
31, 2003, and the results of its operations, the changes in its net assets and
the financial highlights for each of the periods indicated, in conformity with
accounting principles generally accepted in the United States of America. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with auditing standards generally accepted in the United States of America,
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at October 31, 2003 by correspondence with the
custodian and brokers, provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Tampa, Florida
December 18, 2003
IDEX Mutual Funds Annual Report 2003
IDEX PBHG Mid Cap Growth 13
IDEX PIMCO Real Return TIPS
- --------------------------------------------------------------------------------
MARKET ENVIRONMENT
Investors' risk appetites began to revive in 2003, calming the financial market
turmoil that produced a flight to safe assets, especially Treasuries, in the
prior year. The return to normalcy came amid heightened confidence that U.S.
and, to a lesser extent, European policymakers would protect the global economy
against the risks of deflation.
Accommodative monetary policy by both the Federal Reserve Board ("Fed") and the
European Central Bank, along with tax cuts and rising defense spending
encouraged investors to begin to move into riskier assets that have higher
potential returns.
Most investment grade bonds lost ground early in the third quarter of 2003
because of a sharp rise in interest rates in July, the worst month in the U.S.
Government bond market in more than 23 years. The trigger for the sell-off was
a suggestion by the Fed that it was less inclined to pursue a so-called
"unconventional" approach to reflating the economy than it had previously led
investors to believe. Despite the treasury sell-off, Treasury Inflation-Indexed
Securities ("TIPS") posted gains during this period, outperforming nominal
treasuries. Yields on the 10-year TIPS rose 61 basis points during July
compared to 99 basis points for comparable treasuries. Breakeven inflation (the
difference between nominal Treasury and TIPS yields) rose 38 basis points
during July, signaling higher inflation expectations.
Rising inflation expectations tend to increase investor demand for TIPS and
helped support TIPS versus nominal bonds during the volatile third quarter. The
trend of higher breakeven inflation rates continued during August, but
slackened during September due to faster productivity growth and labor market
weakness.
Higher inflation expectations were driven by many factors. Continued fiscal and
monetary stimulus and a weaker dollar, especially relative to the yen, fueled
concerns about higher prices.
PERFORMANCE
From inception March 1, 2003 through October 31, 2003, IDEX PIMCO Real Return
TIPS returned 2.09%. By comparison its benchmark, the Lehman Brothers Global
Real U.S. TIPS Index ("TIPS Index"), returned 2.60%.
STRATEGY REVIEW
Our "total return" philosophy revolves around the principle of diversification.
We believe that no single risk should dominate returns. By combining
perspectives from both the portfolio level and the security level, we seek to
consistently add value over time while incurring acceptable levels of portfolio
risk.
Modest above-index duration for the fiscal year was positive for performance as
real yields fell over this period. An overweight to short maturity TIPS was a
significant positive as short-yields fell the most during the fiscal year.
/s/ John Brynjolfsson
John B. Brynjolfsson
Fund Manager
Pacific Investment Management Company LLC
IDEX Mutual Funds Annual Report 2003
IDEX PIMCO Real Return TIPS 1
IDEX PIMCO Real Return TIPS
- --------------------------------------------------------------------------------
Comparison of change in value of $10,000 investment in Class A shares and its
comparative index.
Growth of $10,000
Inception of 3/1/03 through 10/31/03
Investment less sales charges - $9,525
[The following table was depicted as a mountain chart in the printed material.]
DATE Class A LBGR U.S. TIPS
- ------------------ ---------------- --------------
3/1/2003 9,525 10,000
3/31/2003 9,392 9,838
6/30/2003 9,696 10,173
9/30/2003 9,715 10,204
10/31/2003 9,724 10,260
Average Annual Total Return for Periods Ended 10/31/03
- --------------------------------------------------------------------------------
From Inception
Inception Date
----------- ----------
Class A (NAV) 2.09% 3/1/03
Class A (POP) -2.76% 3/1/03
LBGR U.S. TIPS(1) 2.60% 3/1/03
- ----------------- ------ ------
Class B (NAV) 1.72% 3/1/03
Class B (POP) -3.28% 3/1/03
- ----------------- ------ ------
Class C (NAV) 1.72% 3/1/03
- ----------------- ------ ------
Class L (NAV) 1.72% 3/1/03
Class L (POP) -0.28% 3/1/03
- ----------------- ------ ------
Class M (NAV) 1.75% 3/1/03
Class M (POP) -0.27% 3/1/03
- ----------------- ------ ------
NOTES
(1) The Lehman Brothers Global Real U.S. TIPS (LBGR U.S. TIPS) 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.
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 shares, (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 a "non-diversified" fund may be subject to specific risks such
as susceptibility to single economic, political, or regulatory events, and may
be subject to great loss than investments in a diversified fund. In addition
this fund invests in derivatives that are subject to the additional risks of
inaccurate market predictions, illiquid markets, adverse tax consequences, and
leveraging.
Periods less than 1 year represent total return and are not annualized.
This material must be preceded or accompanied by a current prospectus, which
includes specific contents regarding the investment objectives and policies of
this fund.
IDEX Mutual Funds Annual Report 2003
IDEX PIMCO Real Return TIPS 2
IDEX PIMCO Real Return TIPS
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
At October 31, 2003
(all amounts except share amounts in thousands)
Principal Value
---------- --------
U.S. GOVERNMENT OBLIGATIONS (112.0%)
U.S. Treasury Inflation Index
3.38%, due 01/15/2007 $ 9,786 $ 10,672
3.63%, due 01/15/2008 6,855 7,617
3.88%, due 01/15/2009 5,515 6,238
3.50%, due 01/15/2011 1,909 2,151
3.38%, due 01/15/2012 1,927 2,165
3.00%, due 07/15/2012 4,928 5,392
1.88%, due 07/15/2013 3,015 3,007
3.63%, due 04/15/2028 2,282 2,763
3.88%, due 04/15/2029 7,006 8,873
--------
Total U.S. Government Obligations (cost: $48,833) 48,878
--------
CORPORATE DEBT SECURITIES (1.6%)
Business Credit Institutions (0.5%)
Ford Motor Credit Company (c)
1.95%, due 03/08/2004 200 200
Electric Services (0.5%)
Entergy Gulf States, Inc.-144A (c)
2.04%, due 06/18/2007 200 200
Insurance (0.6%)
Residential Reinsurance, Ltd.-144A (c)
6.09%, due 06/08/2006 300 304
--------
Total Corporate Debt Securities (cost: $700) 704
--------
SHORT-TERM U.S. GOVERNMENT OBLIGATIONS (80.3%)
Fannie Mae
0.95%, due 11/03/2003 17,400 17,399
1.08%, due 01/28/2004 2,000 1,995
Federal Home Loan Bank
0.94%, due 11/03/2003 10,100 10,099
1.02%, due 11/28/2003 3,000 2,998
Freddie Mac
1.07%, due 01/29/2004 500 499
1.09%, due 03/12/2004 2,000 1,992
U.S. Treasury Bill (a)
0.93%, due 12/18/2003 70 70
--------
Total Short-Term U.S. Government Obligations (cost: $35,052) 35,052
--------
COMMERCIAL PAPER (9.6%)
General Electric Capital Corporation
1.12%, due 02/17/2004 $ 300 $ 299
KfW International Finance Inc.-144A
1.08%, due 02/24/2004 1,000 997
Nestle Captial Corp-144A
1.08%, due 02/02/2004 1,000 997
Rabobank USA Finance Corp
1.08%, due 02/24/2004 900 897
Royal Bank of Scotland Group PLC (The)
1.08%, due 02/03/2004 1,000 997
--------
Total Commercial Paper (cost: $4,187) 4,187
--------
Contracts (b) Value
------------- ---------
PURCHASED OPTIONS (0.0%)
Put Options (0.0%)
U.S. Treasury Inflation Index
Put Strike $99.00,
Expires 02/20/2004 97 $ 2
---------
Total Purchased Options (cost: $2) 2
---------
Total Investment Securities (cost: $88,774) $ 88,823
=========
SUMMARY:
Investments, at value 203.5 % $ 88,823
Liabilities in excess of other assets (103.5)% (45,177)
------ ---------
Net assets 100.0 % $ 43,646
====== =========
NOTES TO SCHEDULE OF INVESTMENTS:
(a) At October 31, 2003, all or a portion of this security is segregated with
the custodian to cover margin requirements for open option contracts. The
value of all securities segregated at October 31, 2003, is $20.
(b) Contracts are not in thousands.
(c) Floating or variable rate note. Rate is listed as of October 31, 2003.
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX PIMCO Real Return TIPS 3
IDEX PIMCO Real Return TIPS
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
At October 31, 2003
(all amounts except per share amounts in thousands)
Assets:
Investment securities, at value (cost: $88,774) $ 88,823
Cash 3,164
Receivables:
Shares of beneficial interest sold 569
Interest 377
---------
92,933
---------
Liabilities:
Investment securities purchased 49,208
Accounts payable and accrued liabilities:
Shares of beneficial interest redeemed 29
Management and advisory fees 15
Distribution fees 15
Transfer agent fees 6
Other 14
---------
49,287
---------
Net Assets $ 43,646
=========
Net Assets Consist of:
Shares of beneficial interest, unlimited shares authorized $ 42,686
Undistributed net investment income (loss) 86
Undistributed net realized gain (loss) from:
Investment securities 810
Written option contracts 15
Net unrealized appreciation (depreciation) on investment
securities 49
---------
Net Assets $ 43,646
=========
Shares Outstanding:
Class A 3,616
Class B 317
Class C 33
Class L 312
Class M 43
Net Asset Value Per Share:
Class A $ 10.10
Class B 10.08
Class C 10.08
Class L 10.08
Class M 10.08
Maximum Offering Price Per Share (a):
Class A $ 10.60
Class M 10.18
(a) 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.
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the period ended October 31, 2003 (b)
(all amounts in thousands)
Investment Income:
Interest $ 625
-------
Expenses:
Management and advisory fees 119
Transfer agent fees 34
Printing and shareholder reports 2
Custody fees 5
Administration fees 28
Legal fees 1
Auditing and accounting fees 13
Trustees fees 1
Registration fees 78
Other 1
Distribution and service fees:
Class A 48
Class B 12
Class C 2
Class L 16
Class M 2
-------
Total expenses 362
Less:
Advisory fee waiver (63)
-------
Net expenses 299
-------
Net Investment Income (Loss) 326
-------
Net Realized Gain (Loss) from:
Investment securities 810
Written options contracts 15
-------
825
-------
Net Increase (Decrease) in Unrealized Appreciation
(Depreciation) on:
Investment securities 49
-------
Net Gain (Loss) on Investment Securities and Option
Contracts 874
-------
Net Increase (Decrease) in Net Assets Resulting from
Operations $ 1,200
=======
(b) Commenced operations March 1, 2003.
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX PIMCO Real Return TIPS 4
IDEX PIMCO Real Return TIPS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
For the period ended
(all amounts in thousands)
October 31,
2003 (a)
-----------
Increase (Decrease) In Net Assets From:
Operations:
Net investment income (loss) $ 326
Net realized gain (loss) from investment securities and
options contracts 825
Net unrealized appreciation (depreciation) on
investment securities 49
--------
1,200
--------
Distributions to Shareholders:
From net investment income:
Class A (220)
Class B (13)
Class C (3)
Class L (25)
Class M (2)
--------
(263)
--------
From net realized gains:
Class A -
Class B -
Class C -
Class L -
Class M -
--------
--------
--------
Capital Share Transactions:
Proceeds from shares sold:
Class A 41,725
Class B 3,347
Class C 457
Class L 6,078
Class M 465
--------
52,072
--------
Dividends and distributions reinvested:
Class A 220
Class B 11
Class C 3
Class L 15
Class M 2
--------
251
--------
Cost of shares redeemed:
Class A (6,129)
Class B (223)
Class C (126)
Class L (3,105)
Class M (31)
--------
(9,614)
--------
42,709
--------
Net increase (decrease) in net assets 43,646
--------
Net Assets:
Beginning of year -
--------
End of year $ 43,646
========
Undistributed Net Investment Income (Loss) $ 86
========
Share Activity:
Shares issued:
Class A 4,219
Class B 338
Class C 46
Class L 617
Class M 46
--------
5,266
--------
Shares issued-reinvested from distributions:
Class A 22
Class B 1
Class C -
Class L 2
Class M -
--------
25
--------
Shares redeemed:
Class A (625)
Class B (22)
Class C (13)
Class L (307)
Class M (3)
--------
(970)
--------
Net increase (decrease) in shares outstanding 4,321
========
(a) Commenced operations on March 1, 2003.
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX PIMCO Real Return TIPS 5
IDEX PIMCO Real Return TIPS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share of beneficial interest outstanding throughout each period
--------------------------------------------------------------------------------------------------------------
Investment Operations Distributions
------------------------------------------- --------------------------------------
Net Asset Net Asset
For the Value, Net Net Realized From Net From Net Value,
Period Beginning Investment and Unrealized Total Investment Realized Total End
Ended (d)(g) of Period Income (Loss) Gain (Loss) Operations Income Gains Distributions of Period
- ------------------------------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 $ 10.00 $ 0.14 $ 0.07 $ 0.21 $ (0.11) $ - $ (0.11) $ 10.10
- ------------------------------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 10.00 0.09 0.08 0.17 (0.09) - (0.09) 10.08
- ------------------------------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 10.00 0.09 0.08 0.17 (0.09) - (0.09) 10.08
- ------------------------------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 10.00 0.09 0.08 0.17 (0.09) - (0.09) 10.08
- ------------------------------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 10.00 0.10 0.07 0.17 (0.09) - (0.09) 10.08
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
-----------------------------------------------------------------------
Ratio of Expenses
Net Assets, to Average Net Investment
For the End of Net Assets (a) Income (Loss) Portfolio
Period Total Period ----------------------- to Average Turnover
Ended (g) Return (c) (000's) Net (e) Total (f) Net Assets (a) Rate (b)
- ----------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 2.09% $ 36,531 1.65% 2.03% 2.07% 480%
- ----------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 1.72 3,194 2.30 2.68 1.42 480
- ----------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 1.72 334 2.30 2.68 1.42 480
- ----------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 1.72 3,148 2.30 2.68 1.42 480
- ----------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 1.75 439 2.19 2.57 1.53 480
- ----------------------------------------------------------------------------------------------------------------
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 are not annualized.
(d) Per share information is calculated based on average number of shares
outstanding.
(e) Ratio of Net Expenses to Average Net Assets is net of fee waivers and
reimbursements by the investment adviser, if any (see note 2).
(f) Ratio of Total Expenses to Average Net Assets includes all expenses before
fee waivers and reimbursements by the investment adviser.
(g) Commenced operations on March 1, 2003.
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX PIMCO Real Return TIPS 6
IDEX PIMCO Real Return TIPS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
At October 31, 2003
(all amounts in thousands)
NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
IDEX Mutual Funds is a Massachusetts business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company. IDEX PIMCO Real Return TIPS ("the Fund"), part
of IDEX Mutual Funds, began operations on March 1, 2003. The Fund is
"non-diversified" under the 1940 Act.
In the normal course of business, the Fund enters into contracts that contain a
variety of representations and warranties and which provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown, as this would involve future claims that may be made against the Fund
and/or its affiliates that have not yet occurred. However, based on experience,
the Fund expects the risk of loss to be remote.
See the Prospectus and Statement of Additional Information for a description of
the Fund's investment objective.
In preparing the Fund's financial statements in accordance with accounting
principles generally accepted in the United States of America ("GAAP"),
estimates or assumptions (which could differ from actual results) may be used
that affect reported amounts and disclosures. The following policies were
consistently followed by the Fund, in accordance with GAAP.
Multiple class operations and expenses: The Fund currently offers five classes
of shares, each with a public offering price that reflects different sales
charges, if any, and expense levels. Class C and M shares are not available to
new investors. Income, non-class specific expenses and realized and unrealized
gains and losses, are allocated daily to each class, based upon the value of
shares outstanding method as permitted under Rule 18f-3 of the 1940 Act. Each
class bears its own specific expenses as well as a portion of general, common
expenses.
Security valuations: Fund investments traded on an exchange are valued at the
closing price on the day of valuation on the exchange where the security is
principally traded. With respect to securities traded on the NASDAQ INMS, such
closing price may be the last reported sales price or the NASDAQ Official
Closing Price.
Debt securities are valued by independent pricing services; however, those that
mature in sixty days or less are valued at amortized cost, which approximates
market.
Other securities for which quotations are not readily available are valued at
fair value determined in good faith, in accordance with procedures established
by and, under the supervision of the Board of Trustees and the Fund's Valuation
Committee.
Cash: The Fund may leave cash overnight in its cash account with the custodian,
Investors Bank & Trust Company ("IBT"). IBT has been contracted on behalf of
the Fund to invest the excess cash into a savings account, which at October 31,
2003, was paying an interest rate of 0.75%.
Security transactions and investment income: Security transactions are recorded
on the trade date. Security gains and losses are calculated on the specific
identification basis. Interest income, including accretion of discounts and
amortization of premiums, is recorded on the accrual basis commencing on the
settlement date.
Option contracts: The Fund may enter into option contracts to manage exposure
to market or interest rate fluctuations. Option contracts are valued at the
average of the bid and ask ("Mean Quote") established each day at the close of
the board of trade or exchange on which they are traded. The primary risks
associated with options are imperfect correlation between the change in value
of the securities held and the prices of options; the possibility of an
illiquid market and inability of the counterparty to meet the contract terms.
When the Fund writes a covered call or put option, an amount equal to the
premium received by the Fund is included in the Fund's Statement of Assets and
Liabilities as an asset and as an equivalent liability. The amount of the
liability is subsequently marked-to-market to reflect the current value of the
option written.
The underlying face amounts of open option contracts at October 31, 2003, are
listed in the Schedule of Investments.
Transactions in written options were as follows:
Premium Contracts*
--------- -----------
Balance at 03/01/2003 $ - -
Sales 15 17
Closing Buys - -
Expirations (15) (17)
Exercised - -
----- ---
Balance at 10/31/2003 $ - -
===== ===
*Contracts not in thousands.
Dividend distributions: Distributions to shareholders are recorded on the
ex-dividend date and are determined in accordance with Federal income tax
regulations which may differ from GAAP.
NOTE 2. RELATED PARTY TRANSACTIONS
AEGON/Transamerica Fund Advisers, Inc. ("ATFA") is the Fund's investment
adviser. AEGON/Transamerica Fund Services, Inc. ("ATFS") is the Fund's
administrator. AFSG Securities Corp. ("AFSG") is the Fund's
distributor/principal underwriter. AEGON/Transamerica Investor Services, Inc.
("ATIS") is the 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. AUSA and WRL are wholly owned indirect
subsidiaries of AEGON NV, a Netherlands corporation.
IDEX Mutual Funds Annual Report 2003
IDEX PIMCO Real Return TIPS 7
IDEX PIMCO Real Return TIPS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 2-(continued)
The following schedule reflects the percentage of fund assets owned by
affiliated mutual funds (ie: through the assets allocation funds)
Net % of
Assets Net Assets
----------- -----------
IDEX Asset Allocation
Conservative Portfolio $ 10,840 25%
IDEX Asset Allocation Moderate
Growth 10,609 24%
IDEX Asset Allocation Moderate 13,689 31%
--
80%
==
Investment advisory fees: The Fund pays management fees to ATFA based on
average daily net assets ("ANA") at the following stated rate:
0.70% of ANA
ATFA currently voluntarily waives its advisory fee and will reimburse the Fund
to the extent that operating expenses, excluding 12b-1 fees, exceed the
following stated annual limit:
1.30% Expense Limit
If total fund expenses fall below the annual expense limitations agreed to by
the adviser within the succeeding three years, the Fund may be required to pay
the advisor a portion or all of the waived advisory fees.
Distribution and service fees: The Fund has a 12b-1 distribution plan under the
1940 Act pursuant to which an annual fee, based on average daily net assets, is
paid to the distributor for various disbursements such as broker-dealer account
servicing fees and other promotional expenses of the Fund. The 12b-1 fee for
the Fund is comprised of a 0.25% service fee and the remaining amount is an
asset-based sales charge/distribution fee. The Fund is authorized under the
12b-1 plan to pay fees on each class up to the following limits:
Class A 0.35%
Class B 1.00%
Class C 1.00%
Class L 1.00%
Class M 0.90%
Underwriter commissions relate to front-end sales charges imposed for Class A
and M shares and contingent deferred sales charges from Classes B, L, M and
certain A share redemptions. From inception March 1, 2003 through October 31,
2003, the underwriter commissions were as follows:
Received by Underwriter $ 12
Retained by Underwriter 2
Contingent Sales Charges 6
Administrative services: The Fund has entered into an agreement with ATFS for
financial and legal fund administration services, which include such items as
compliance, expenses, financial statements and other reporting, distributions,
tax returns, prospectus preparation, board of trustees meeting support and
other legal matters. Transfer agent fees are reflected separately from
Administration fees on the Statement of Operations. The Legal fees on the
Statement of Operations are for fees paid to external legal counsel. ATFS
provides its services to the Fund at cost and is reimbursed monthly.
Transfer agent fees: The Fund incurs ATIS annual per-account charges (not in
thousands) of $20.00 for each open shareholder account and $1.63 for each
closed account maintained, and certain out of pocket expenses.
Deferred compensation plan: Each eligible Fund Trustee may elect participation
in the Deferred Compensation Plan ("the Plan"). Under the Plan, such Trustees
may defer payment of a percentage of their total fees earned as a Fund Trustee.
These deferred amounts may be invested in any IDEX Fund. At October 31, 2003,
the value of invested plan amounts was less than $1. Invested plan amounts and
the total liability for deferred compensation to the Trustees under the Plan at
October 31, 2003, are included in Net assets in the accompanying Statement of
Assets and Liabilities.
NOTE 3. INVESTMENT TRANSACTIONS
The cost of securities purchased and proceeds from securities sold (excluding
short-term securities) from inception March 1, 2003 through October 31, 2003,
were as follows:
Purchases of securities:
Long-Term excluding U.S. Government $ 701
U.S. Government 218,354
Proceeds from maturities and sales of securities:
Long-Term excluding U.S. Government -
U.S. Government 170,458
NOTE 4. FEDERAL INCOME TAX MATTERS
The Fund has not made any provision for federal income or excise taxes due to
its policy to distribute all of its taxable income and capital gains to its
shareholders and otherwise qualify as a regulated investment company under the
Internal Revenue Code. Income and capital gain distributions are determined in
accordance with income tax regulations, which may differ from GAAP. These
differences are primarily due to differing treatments for items including, but
not limited to, non-deductible expenses and wash sales.
Reclassifications between Undistributed net investment income (loss),
Undistributed net realized capital gains (loss) and Shares of beneficial
interest are made to reflect income and gains available for distribution under
federal tax regulations. Results of operations and net assets are not effected
by these reclassifications. These reclassifications are as follows:
IDEX Mutual Funds Annual Report 2003
IDEX PIMCO Real Return TIPS 8
IDEX PIMCO Real Return TIPS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 4-(continued)
Shares of beneficial interest, unlimited
shares authorized $ (23)
Undistributed net investment income (loss) 23
Undistributed net realized gain (loss) from
investment securities and option contracts -
The tax character of distributions paid may differ from the character of
distributions shown in the Statements of Changes in Net Assets
primarily due to short-term gains being treated as ordinary income for tax
purposes. The tax character of distributions paid during 2003 was as follows:
2003 Distributions paid from:
Ordinary income $ 263
Long-term capital gains -
The tax basis components of distributable earnings as of October 31, 2003, are
as follows:
Undistributed Ordinary Income $ 951
=====
Undistributed Long-term Capital Gains $ 9
=====
Capital Loss Carryforward $ -
=====
Net Unrealized Appreciation (Depreciation) $ -
=====
The aggregate cost of investments and composition of unrealized appreciation
(depreciation) for federal income tax purposes as of October 31, 2003, are as
follows:
Federal Tax Cost Basis $ 88,823
========
Unrealized Appreciation $ 78
Unrealized (Depreciation) (78)
--------
Net Unrealized Appreciation (Depreciation) $ -
========
Supplemental Tax Information
(unaudited)
For tax purposes, the Fund has made a Long-Term Capital Gain Designation of
$0.00094 per share for the year ended October 31, 2003.
IDEX Mutual Funds Annual Report 2003
IDEX PIMCO Real Return TIPS 9
- --------------------------------------------------------------------------------
Report of Independent Certified Public Accountants
To the Board of Trustees and Shareholders of
IDEX PIMCO Real Return TIPS
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of IDEX PIMCO Real Return TIPS (the
"Fund") (one of the portfolios constituting the IDEX Mutual Funds) at October
31, 2003, and the results of its operations, the changes in its net assets and
the financial highlights for the period March 1, 2003 (commencement of
operations) through October 31, 2003, in conformity with accounting principles
generally accepted in the United States of America. These financial statements
and financial highlights (hereafter referred to as "financial statements") are
the responsibility of the Fund's management; our responsibility is to express
an opinion on these financial statements based on our audit. We conducted our
audit of these financial statements in accordance with auditing standards
generally accepted in the United States of America, which require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audit, which included confirmation
of securities at October 31, 2003 by correspondence with the custodian and
brokers, provides a reasonable basis for our opinion.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Tampa, Florida
December 18, 2003
IDEX Mutual Funds Annual Report 2003
IDEX PIMCO Real Return TIPS 10
IDEX PIMCO Total Return
- --------------------------------------------------------------------------------
MARKET ENVIRONMENT
In November 2002, investors began to accept more risk, which calmed the
financial market turmoil that produced a flight to safe assets, especially
Treasuries, that occurred towards the end of the previous period. The return to
normalcy came amid heightened confidence that U.S. and, to a lesser extent,
European policymakers would protect the global economy against the risks of
deflation. Interest rates declined and bond prices rose through most of the
November to June period.
Rate cuts by both the Federal Reserve Board ("Fed") and the European Central
Bank early in the fiscal year, along with tax cuts and rising defense spending,
encouraged investors to begin to move into riskier assets that would
potentially yield higher returns. Corporate bonds, especially BBB-rated and
high-yield issues, performed well as investors began to notice that companies
continued to cut capital spending and repair balance sheets. Emerging market
bonds benefited from generally improved credit fundamentals.
Most investment grade bonds lost ground early in the third quarter of 2003
because of a sharp rise in interest rates in July, the worst month in the U.S.
Government bond market in more than 23 years. The trigger for the sell-off was
a suggestion by the Fed that it was less inclined to pursue a so-called
"unconventional" approach to reflating the economy than it had previously led
investors to believe. Bonds bounced back later in the third quarter as
lingering overcapacity, weak labor markets and faster productivity growth gave
investors confidence that inflation would remain well contained.
PERFORMANCE
For the year ended October 31, 2003, IDEX PIMCO Total Return returned 5.88%. By
comparison its benchmark, the Lehman Brothers Aggregate Bond Index, returned
4.90%.
STRATEGY REVIEW
Our philosophy revolves around the principle of diversification. We believe
that no single risk should dominate returns. We seek to add value through the
use of "top down" strategies such as interest rate/duration management, yield
curve positioning and sector rotation. We also employ "bottom up" strategies
involving analysis and selection of specific securities. By combining
perspectives from both the portfolio level and the security level, we seek to
consistently add value over time while incurring acceptable levels of portfolio
risk.
Diversifying beyond core index sectors helped protect the portfolio during a
difficult market environment. A corporate underweight was negative as rising
profits stimulated investor demand, but positive security selection of
automotive and telecommunication issues mitigated this impact. Allocations to
real return and municipal bonds helped returns as these less volatile asset
classes outperformed in a rising rate environment. Emerging market bonds helped
returns as improved credit quality and a broader investor base sustained their
yearlong rally. Non-U.S. holdings, mainly Eurozone exposure, helped returns as
yields on these assets rose less than Treasuries.
/s/ William H. Gross
William H. Gross
Fund Manager
Pacific Investment Management Company LLC
IDEX Mutual Funds Annual Report 2003
IDEX PIMCO Total Return 1
IDEX PIMCO Total Return
- --------------------------------------------------------------------------------
Comparison of change in value of $10,000 investment in Class A shares and its
comparative index.
Growth of $10,000
Inception of 3/1/02 through 10/31/03
Investment less sales charges - $9,525
[The following table was depicted as a mountain chart in the printed material.]
DATE Class A LBAB
- ----------------- ---------------- -----------
3/1/2002 9,525 10,000
3/31/2002 9,422 9,834
6/30/2002 9,595 10,197
9/30/2002 9,911 10,664
12/31/2002 10,176 10,832
3/31/2003 10,333 10,983
6/30/2003 10,596 11,257
9/30/2003 10,570 11,241
10/31/2003 10,501 11,136
Average Annual Total Return for Periods Ended 10/31/03
- --------------------------------------------------------------------------------
From Inception
1 year Inception Date
---------- ----------- ----------
Class A (NAV) 5.88% 6.02% 3/1/02
Class A (POP) 0.85% 2.97% 3/1/02
LBAB(1) 4.90% 6.66% 3/1/02
- ----- ---- ---- ------
Class B (NAV) 5.08% 5.33% 3/1/02
Class B (POP) 0.08% 3.00% 3/1/02
- --------------- ---- ---- ------
Class C (NAV) 5.08% 5.33% 3/1/02
- --------------- ---- ---- ------
Class L (NAV) - 4.47% 11/11/02
Class L (POP) - 2.47% 11/11/02
- --------------- ---- ---- --------
Class M (NAV) 5.19% 5.43% 3/1/02
Class M (POP) 3.13% 4.80% 3/1/02
- --------------- ---- ---- --------
NOTES
(1) The Lehman Brothers Aggregate Bond (LBAB) 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 Micropal(R)(C) 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 4.75% 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 shares, (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.
Periods less than 1 year represent total return and are not annualized.
This material must be preceded or accompanied by a current prospectus, which
includes specific contents regarding the investment objectives and policies of
this fund.
IDEX Mutual Funds Annual Report 2003
IDEX PIMCO Total Return 2
IDEX PIMCO Total Return
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
At October 31, 2003
(all amounts except share amounts in thousands)
Principal Value
--------------- ------------
U.S. GOVERNMENT OBLIGATIONS (3.8%)
U.S. Treasury Inflation Index
3.88%, due 01/15/2009 $ 255 $ 289
3.50%, due 01/15/2011 212 239
3.38%, due 01/15/2012 3,202 3,596
---------
Total U.S. Government Obligations (cost: $4,143) 4,124
---------
U.S. GOVERNMENT AGENCY OBLIGATIONS (35.5%)
Fannie Mae-Conventional Pool
5.50%, due 07/01/2016 1,762 1,815
5.50%, due 12/01/2016 241 249
5.50%, due 01/01/2017 244 252
5.50%, due 02/01/2017 240 247
5.50%, due 03/01/2017 19 20
5.50%, due 05/01/2017 257 265
5.50%, due 11/01/2017 26 26
5.00%, due 02/01/2018 395 401
5.50%, due 02/01/2018 542 558
5.00%, due 05/01/2018 72 73
5.50%, due 05/01/2018 48 49
5.00%, due 06/01/2018 1,020 1,037
6.00%, due 10/01/2028 37 38
6.00%, due 04/01/2032 74 76
6.00%, due 05/01/2032 215 221
6.50%, due 07/01/2032 326 339
6.00%, due 10/01/2032 57 58
6.00%, due 11/01/2032 389 399
6.00%, due 01/01/2033 1,983 2,036
6.00%, due 02/01/2033 631 648
6.00%, due 03/01/2033 2,320 2,383
6.00%, due 04/01/2033 1,657 1,701
6.00%, due 05/01/2033 1,861 1,911
5.50%, due 06/01/2033 475 480
6.00%, due 07/01/2033 25 26
5.50%, due 07/01/2033 818 826
6.00%, due 07/01/2033 850 872
5.50%, due 08/01/2033 385 388
6.00%, due 08/01/2033 353 362
Fannie Mae-November TBA
6.00%, due 11/01/2033 6,000 6,159
Fannie Mae-Variable Rate (f)
3.00%, due 08/25/2009 100 100
6.00%, due 11/25/2027 260 264
4.17%, due 01/01/2028 209 215
6.50%, due 06/25/2028 390 395
1.51%, due 11/25/2032 270 271
5.39%, due 04/01/2033 102 104
Freddie Mac-Gold Pool
6.50%, due 08/01/2032 1,267 1,318
Freddie Mac-Variable Rate (f)
6.00%, due 12/15/2007 $ 81 $ 83
5.00%, due 09/15/2016 236 243
6.00%, due 08/15/2026 39 39
6.00%, due 03/15/2027 77 77
6.00%, due 04/15/2027 239 239
6.00%, due 08/15/2027 163 165
6.00%, due 11/15/2027 35 35
6.50%, due 02/15/2028 163 165
6.00%, due 04/15/2028 187 188
5.63%, due 07/15/2028 182 184
6.50%, due 12/15/2028 330 335
6.50%, due 04/15/2029 27 28
6.50%, due 02/15/2030 107 110
4.50%, due 08/15/2031 85 84
6.50%, due 07/25/2043 108 113
Ginnie Mae-FHA/VA Pool
6.50%, due 07/15/2023 13 14
6.50%, due 02/15/2028 664 696
6.50%, due 06/15/2029 798 836
6.50%, due 01/15/2030 29 30
6.50%, due 06/15/2031 861 902
6.50%, due 07/15/2031 13 14
6.50%, due 11/15/2031 50 52
6.50%, due 01/15/2032 76 79
6.50%, due 04/15/2032 1,502 1,573
6.50%, due 07/15/2032 219 230
5.00%, due 09/15/2033 750 742
Ginnie Mae-November TBA
5.50%, due 11/01/2033 5,000 5,047
Ginnie Mae-Variable Rate (f)
6.50%, due 06/20/2032 44 45
---------
Total U.S. Government Agency Obligations (cost: $38,940) 38,930
---------
FOREIGN GOVERNMENT OBLIGATIONS (4.1%)
European Investment Bank
0.88%, due 11/08/2004 28,000 257
Federal Republic of Germany
3.25%, due 02/17/2004 100 117
3.25%, due 09/24/2004 87 102
Federative Republic of Brazil
2.00%, due 04/15/2006 (f) 360 351
11.50%, due 03/12/2008 70 78
2.06%, due 04/15/2009 (f) 226 207
11.00%, due 01/11/2012 100 107
8.00%, due 04/15/2014 (f) 517 481
8.88%, due 04/15/2024 150 127
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX PIMCO Total Return 3
IDEX PIMCO Total Return
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Principal Value
------------- ------------
FOREIGN GOVERNMENT OBLIGATIONS (continued)
Malaysia
7.50%, due 07/15/2011 $ 10 $ 12
Republic of Chile
7.13%, due 01/11/2012 500 568
Republic of Panama
8.25%, due 04/22/2008 40 44
1.94%, due 07/17/2016 (f) 172 149
9.38%, due 01/16/2023 300 326
Republic of Peru
9.13%, due 02/21/2012 320 358
4.50%, due 03/07/2017 (f) 150 133
Republic of South Africa
5.25%, due 05/16/2013 350 388
Russian Federation (l)
5.00%, due 03/31/2030 320 299
United Mexican States
9.88%, due 02/01/2010 150 188
6.38%, due 01/16/2013 150 154
---------
Total Foreign Government Obligations (cost: $3,991) 4,446
---------
MORTGAGE-BACKED SECURITIES (3.9%)
Amortizing Residential Collateral Trust (f)
1.33%, due 06/25/2004 166 166
Bank of America Mortgage Securities, Inc. (f)
6.19%, due 07/25/2031 12 12
5.75%, due 10/20/2032 269 275
Bear Stearns Adjustable Rate
Mortgage Trust (f)
5.99%, due 06/25/2032 36 36
CDC Mortgage Capital Trust (f)
1.41%, due 01/25/2033 216 216
Chase Mortgage Finance Corporation (f)
6.50%, due 02/25/2029 130 131
Citicorp Mortgage Securities, Inc. (f)
6.50%, due 04/25/2029 445 453
Countrywide Home Loan Trust-
Series 2002-1 (f)
5.74%, due 03/19/2032 119 120
Countrywide Home Loans, Inc. (f)
5.00%, due 09/19/2032 232 233
CS First Boston Mortgage
Securities Corp. (f)
2.14%, due 03/25/2032 209 208
1.53%, due 03/28/2032 20 20
1.90%, due 09/27/2032 544 543
GSMPS Mortage Loan Trust (f)
7.00%, due 07/25/2043 150 160
Home Equity Asset Trust (f)
1.34%, due 11/25/2032 219 218
Merrill Lynch Mortgage Investors, Inc. (f)
1.49%, due 04/25/2031 $ 6 $ 6
Residential Funding Mortgage
Securities I, Inc. (f)
6.50%, due 03/25/2032 60 61
Sequoia Mortgage Funding
Corporation-Series 10 (f)
1.50%, due 10/20/2027 450 451
Small Business Administration
Participation Certificates (f)
5.13%, due 09/17/2023 100 100
Structured Asset Mortgage
Investments Inc. (f)
1.42%, due 09/19/2032 266 263
Structured Asset Securities Corporation (f)
1.42%, due 10/25/2027 61 61
1.41%, due 01/25/2033 51 51
Washington Mutual Mortgage Securities
Corporation (f)
6.01%, due 01/25/2031 3 3
2.88%, due 12/25/2040 276 275
Wells Fargo Mortgage Backed
Securities Trust (f)
6.25%, due 05/25/2031 170 170
5.04%, due 09/25/2032 87 89
---------
Total Mortgage-Backed Securities (cost: $4,334) 4,321
---------
ASSET-BACKED SECURITIES (2.1%)
Bear Stearns Asset Backed Securities, Inc. (f)
1.45%, due 10/25/2032 168 168
Bear Stearns Companies Inc. (The) (f)
4.95%, due 11/25/2033 200 202
4.83%, due 11/25/2033 300 302
4.36%, due 11/25/2033 700 709
Countrywide Alternative Loan Trust
Series 2003-J1 (f)
6.00%, due 10/25/2032 87 90
First Horizon Asset Securities Inc. (f)
7.00%, due 09/25/2030 8 9
Morgan Stanley Capital I Inc.
Series 2003-HE2 (f)
1.46%, due 08/25/2033 254 254
RACERS SER 1997-R-8-3-144A-(f)
1.43%, due 08/15/2007 300 297
Vanderbilt Acquistion Loan Trust (f)
3.28%, due 01/07/2013 125 126
Washington Mutual (f)
3.20%, due 02/27/2034 89 89
---------
Total Asset-Backed Securities (cost: $2,248) 2,246
---------
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX PIMCO Total Return 4
IDEX PIMCO Total Return
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Principal Value
------------- ------------
CORPORATE DEBT SECURITIES (15.7%)
Air Transportation (1.2%)
Continental Airlines, Inc.
7.06%, due 09/15/2009 $ 400 $ 398
Delta Air Lines, Inc.
7.57%, due 11/18/2010 100 103
7.11%, due 09/18/2011 410 418
UAL Corporation
6.20%, due 09/01/2008 300 251
6.60%, due 09/01/2013 130 109
Amusement & Recreation Services (0.7%)
Disney (Walt) Company (The)
5.13%, due 12/15/2003 800 804
Station Casinos, Inc.
8.38%, due 02/15/2008 10 11
Automotive (0.2%)
DaimlerChrysler North America
Holding Corporation
1.45%, due 08/16/2004 (f) 50 50
6.50%, due 11/15/2013 160 162
Business Credit Institutions (0.4%)
Ford Motor Credit Company (f)
1.41%, due 04/26/2004 200 199
1.60%, due 07/18/2005 100 98
National Rural Utilities Cooperative
Finance Corporation (f)
2.16%, due 04/26/2004 100 100
Business Services (0.2%)
Clear Channel Communications, Inc.
7.25%, due 10/15/2027 150 165
Commercial Banks (0.2%)
HSBC Capital Funding LP-144A (g)
10.18%, due 12/31/2049 150 218
KBC Bank Fund Trust III-144A (i)
9.86%, due 11/29/2049 15 19
Communication (0.3%)
Continential Cablevision, Inc.
8.30%, due 05/15/2006 100 112
CSC Holdings, Inc.
7.63%, due 04/01/2011 150 153
Rogers Cablesystems Ltd.
10.00%, due 03/15/2005 10 11
TCI Communications, Inc.
8.65%, due 09/15/2004 100 106
Electric Services (1.8%)
AEP Texas Central Co.
6.65%, due 02/15/2033 $ 570 $ 587
Florida Power Corporation
4.80%, due 03/01/2013 450 443
Oncor Electric Delivery Company
6.38%, due 01/15/2015 170 183
Progress Energy, Inc.
6.55%, due 03/01/2004 600 610
PSEG Power LLC
6.95%, due 06/01/2012 210 235
Electric, Gas & Sanitary Services (0.3%)
Niagara Mohawk Power Corporation
7.75%, due 10/01/2008 250 290
Electronic Components & Accessories (0.2%)
Tyco International Group SA
6.38%, due 10/15/2011 200 208
Environmental Services (0.4%)
Waste Management, Inc.
6.38%, due 12/01/2003 100 100
7.38%, due 08/01/2010 200 231
6.38%, due 11/15/2012 75 82
Food Stores (1.1%)
Kroger Co. (The)
6.20%, due 06/15/2012 500 534
Safeway Inc.
3.63%, due 11/05/2003 700 700
Gas Production & Distribution (0.5%)
El Paso Corporation
7.75%, due 01/15/2032 125 95
Sonat Inc.
7.63%, due 07/15/2011 370 312
Southern Natural Gas Company
8.00%, due 03/01/2032 100 100
General Obligation-County (0.4%)
Cook County, Illinois Public Improvements,
General Obligation Bonds,
5.13%, due 11/15/2026 450 454
Health Services (0.2%)
HEALTHSOUTH Corporation (e)
8.38%, due 10/01/2011 10 9
7.63%, due 06/01/2012 (a) 250 218
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX PIMCO Total Return 5
IDEX PIMCO Total Return
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Principal Value
-------------- -------------
Hotels & Other Lodging Places (0.7%)
Harrah's Operating Company, Inc.
7.50%, due 01/15/2009 $ 10 $ 11
Hilton Hotels Corporation
7.00%, due 07/15/2004 150 154
Park Place Entertainment Corporation
7.50%, due 09/01/2009 350 382
Starwood Hotels & Resorts Worldwide, Inc.
6.75%, due 11/15/2003 10 10
7.88%, due 05/01/2012 (f) 200 221
Motion Pictures (0.3%)
Time Warner Inc.
8.11%, due 08/15/2006 200 225
6.88%, due 05/01/2012 20 22
7.63%, due 04/15/2031 60 67
Oil & Gas Extraction (0.0%)
Kerr-McGee Corporation-144A (f)
1.89%, due 06/28/2004 25 25
Paper & Allied Products (0.0%)
Bowater Canada Finance
Corporation-144A
7.95%, due 11/15/2011 10 10
Personal Credit Institutions (1.5%)
General Motors Acceptance Corporation (f)
1.88%, due 01/20/2004 400 400
2.41%, due 10/20/2005 880 878
Household Finance Corporation (f)
2.39%, due 03/11/2004 320 321
Radio & Television Broadcasting (0.2%)
Turner Broadcasting System, Inc.
7.40%, due 02/01/2004 200 203
Railroads (0.4%)
Norfolk Southern Corporation
1.87%, due 02/28/2005 (f) 100 100
6.75%, due 02/15/2011 270 303
Revenue-Building Authority (0.2%)
Michigan State Building Authority,
Revenue Bonds, Series I,
5.25%, due 10/15/2013 180 202
Revenue-Special (0.1%)
Tobacco Settlement Financing Corporation,
New Jersey, Revenue Bonds,
6.00%, due 06/01/2037 130 107
Revenue-Tobacco (0.5%)
Golden State Tobacco Securitization Corporation,
California, Revenue Bonds,
6.75%, due 06/01/2039 80 72
7.90%, due 06/01/2042 (f) 35 36
Revenue-Tobacco (continued)
Tobacco Settlement Authority, Iowa,
Revenue Bonds,
5.60%, due 06/01/2035 $ 100 $ 77
Tobacco Settlement Financing
Corporation, Revenue Bonds,
6.38%, due 06/01/2032 420 378
Revenue-Utilities (0.5%)
New York City Municipal Water Finance
Authority, Revenue Bonds, Series A,
5.00%, due 06/15/2035 90 90
San Antonio, Texas Water Utility
Improvements, Revenue Bonds,
5.00%, due 05/15/2032 450 451
Security & Commodity Brokers (0.2%)
Bear Stearns Companies Inc. (The)
7.63%, due 12/07/2009 180 212
Telecommunications (3.0%)
AT&T Corp. (h)
7.00%, due 11/15/2006 150 166
7.80%, due 11/15/2011 300 340
BT Group PLC (k)
2.44%, due 12/15/2003 900 901
Cingular Wireless
6.50%, due 12/15/2011 180 198
Deutsche Telekom AG (j)
8.25%, due 06/15/2005 205 224
Deutsche Telekom International
Finance BV (j)
8.50%, due 06/15/2010 150 181
France Telecom (k)
9.75%, due 03/01/2031 320 422
Sprint Capital Corporation
5.70%, due 11/15/2003 250 250
Sprint Capital Corporation-144A
8.75%, due 03/15/2032 110 125
Verizon Wireless Capital LLC (f)
1.54%, due 12/17/2003 600 600
---------
Total Corporate Debt Securities (cost: $16,661) 17,242
---------
SHORT-TERM U.S. GOVERNMENT OBLIGATIONS (26.8%)
Fannie Mae
1.07%, due 11/12/2003 2,100 2,099
1.07%, due 11/19/2003 600 600
1.04%, due 11/21/2003 1,900 1,899
1.07%, due 11/25/2003 3,400 3,398
1.07%, due 12/03/2003 1,800 1,798
1.08%, due 12/03/2003 1,700 1,698
1.08%, due 12/09/2003 2,800 2,797
1.07%, due 12/10/2003 1,800 1,798
1.08%, due 02/19/2004 600 598
1.08%, due 02/24/2004 800 797
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX PIMCO Total Return 6
IDEX PIMCO Total Return
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Principal Value
-------------- -----------
Fannie Mae
1.13%, due 02/25/2004 $ 2,000 $ 1,993
1.14%, due 02/25/2004 600 598
1.09%, due 03/24/2004 800 797
Freddie Mac
1.06%, due 01/08/2004 800 798
1.07%, due 01/22/2004 2,600 2,594
1.08%, due 01/29/2004 3,800 3,790
1.08%, due 02/26/2004 100 100
1.09%, due 03/01/2004 500 498
U.S. Treasury Bill
0.96%, due 12/04/2003 (c) 125 125
0.96%, due 12/04/2003 (c) 20 20
0.83%, due 12/18/2003 (c) 30 30
0.86%, due 12/18/2003 (c) 40 40
0.93%, due 12/18/2003 (c) 300 300
1.02%, due 04/29/2004 200 199
---------
Total Short-Term U.S. Government Obligations (cost: $29,364) 29,364
---------
COMMERCIAL PAPER (15.4%)
ABN-AMRO North America Finance, Inc.
1.07%, due 01/14/2004 500 499
1.07%, due 01/26/2004 300 299
Australia and New Zealand Banking
Group Limited (Delaware)
1.05%, due 12/05/2003 900 899
Barclays U.S. Funding Corporation
1.04%, due 11/19/2003 100 100
Danske Corporation
1.07%, due 12/10/2003 2,000 1,998
1.08%, due 01/12/2004 400 399
General Electric Capital Corporation
1.09%, due 12/10/2003 2,900 2,897
HBOS Treasury Services PLC
1.08%, due 11/20/2003 2,300 2,299
Royal Bank of Scotland Group PLC (The)
1.07%, due 12/15/2003 2,100 2,097
1.08%, due 02/03/2004 900 897
Shell Finance (UK) PLC
1.10%, due 03/16/2004 1,500 1,494
Westpac Trust Securities NZ Ltd.
1.02%, due 11/12/2003 3,000 2,999
---------
Total Commercial Paper (cost: $16,877) 16,877
---------
SECURITY LENDING COLLATERAL (0.2%)
Debt (0.2%)
Bank Notes (0.0%)
Canadian Imperial Bank of Commerce
1.12%, due 11/04/2003 10 10
Fleet National Bank
1.06%, due 01/21/2004 13 13
Euro Dollar Terms (0.1%)
Bank of Montreal
1.03%, due 11/13/2003 $ 8 $ 8
1.04%, due 11/14/2003 7 7
Bank of Nova Scotia (The)
1.06%, due 11/12/2003 4 4
Bank of Scotland
1.04%, due 11/14/2003 8 8
Citigroup Inc.
1.08%, due 01/05/2004 11 11
Credit Agricole Indosuez
1.08%, due 01/06/2004 9 9
Den Danske Bank
1.04%, due 11/10/2003 4 4
1.08%, due 01/20/2004 12 12
Royal Bank of Canada
1.04%, due 11/24/2003 10 10
1.06%, due 12/08/2003 4 4
Royal Bank of Scotland Group PLC (The)
1.08%, due 01/15/2004 12 12
SouthTrust Bank
1.08%, due 01/16/2004 12 12
Wells Fargo & Company
1.04%, due 11/20/2003 12 12
Promissory Notes (0.0%)
Goldman Sachs Group, Inc. (The)
1.15%, due 11/03/2003 13 13
Repurchase Agreements (0.1%) (b)
Goldman Sachs Group, Inc. (The)
1.10% Repurchase Agreement
dated 10/31/2003 to be repurchased
at $4 on 11/03/2003 4 4
Merrill Lynch & Co., Inc.
1.10% Repurchase Agreement
dated 10/31/2003 to be repurchased
at $44 on 11/03/2003 44 44
Shares Value
-------- ----------
Investment Companies (0.0%)
Money Market Funds (0.0%)
Merrimac Cash Series Fund-Premium Class
0.97%, due 11/03/2003 27,349 $ 27
---------
Total Security Lending Collateral 224
(cost: $224) ---------
Total Investment Securities (cost: $116,782) $ 117,774
=========
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX PIMCO Total Return 7
IDEX PIMCO Total Return
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Notional
Amount Value
---------- -----------
WRITTEN SWAPTIONS (-0.1%)
Covered Call Swaptions (-0.1%)
LIBOR Rate Swaption (m)
Call Strike 3.00%,
Expires 11/12/2003 $ 5,200 $ (d)
LIBOR Rate Swaption (m)
Call Strike 3.25%,
Expires 03/03/2004 5,100 (16)
LIBOR Rate Swaption (m)
Call Strike 4.00%,
Expires 03/03/2004 4,700 (13)
LIBOR Rate Swaption (m)
Call Strike 4.00%,
Expires 01/07/2005 900 (10)
LIBOR Rate Swaption (m)
Call Strike 4.00%,
Expires 01/07/2005 900 (10)
Put Swaptions (0.0%)
LIBOR Rate Swaption (n)
Put Strike 7.00%,
Expires 01/07/2005 1,900 (14)
---------
Total Written Swaptions (premium: $280) $ (63)
=========
SUMMARY:
Investments, at value 107.5 % $ 117,774
Written swaptions (0.1)% (63)
Liabilities in excess of other assets (7.4)% (8,153)
-------- ---------
Net assets 100.0 % $ 109,558
======== =========
SWAP AGREEMENTS:
- ------------------------------------------------------------------------------------
Net Unrealized
Expiration Notional Appreciation
Date Amount (Depreciation)
------------ ------------ ---------------
Receive a fixed rate equal to 4.00%
and pay floating rate based on
3-month LIBOR.
Counterparty: Merrill Lynch &
Co., Inc. 12/17/2003 $ 1,200 $ (74)
Receive a fixed rate equal to 1.07%
and pay floating rate based on
6-month Japanese Yen - LIBOR.
Counterparty: Morgan Stanley
Dean Witter 06/02/2005 140,000 45
Receive a fixed rate equal to 1.50%
and pay floating rate based on
3-month Swiss Franc - LIBOR.
Counterparty: J.P. Morgan
Chase & Co. 03/29/2005 14,000 1
Receive a fixed rate equal to 1.31%
and the Fund will pay to the
counterparty at par in the event of
default of United Mexican States,
11.50%, due 05/15/2026.
Counterparty: Goldman Sachs & Co. 01/29/2004 200 2
---------- -------
Total Swap Agreements
(premium $45) $ 155,400 $ (26)
========= =======
FORWARD FOREIGN CURRENCY CONTRACTS:
- ----------------------------------------------------------------------
Net
Amount in Unrealized
Bought Settlement U.S. Dollars Appreciation
Currency (Sold) Date Bought (Sold) (Depreciation)
- ------------- ----------- ------------ --------------- ---------------
Euro Dollar (6) 11/03/2003 $ (7) $ --
Euro Dollar (768) 11/05/2003 (881) (12)
------ ------
$ (888) $ (12)
====== ======
FUTURES CONTRACTS:
- ---------------------------------------------------------------------------------
Net Unrealized
Settlement Appreciation
Contracts Date Amount (Depreciation)
----------- ------------ ----------- ---------------
U.S. Treasury Long Bond 26 12/31/2003 $ 2,719 $ 108
5-Year U.S. Treasury Note 82 12/31/2003 8,965 204
10-Year U.S. Treasury Note 167 12/31/2003 18,479 275
90-Day Euro Dollar 39 03/14/2005 10,843 5
90-Day Euro Dollar 4 09/13/2003 975 5
90-Day Euro Dollar 36 12/13/2004 8,785 (10)
90-Day Euro Dollar 26 06/13/2005 6,310 (23)
3 Month Euro Euribor (o) 4 03/14/2005 966 (35)
-------- -----
$ 58,042 $ 529
======== =====
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX PIMCO Total Return 8
IDEX PIMCO Total Return
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
NOTES TO SCHEDULE OF INVESTMENTS:
(a) At October 31, 2003, all or a portion of this security is on loan (see Note
1). The value at October 31, 2003, of all securities on loan is $218.
(b) Cash collateral for the Repurchase Agreements, valued at $50, 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.
(c) At October 31, 2003, all or a portion of this security is segregated with
the custodian to cover margin requirements for open future and option
contracts. The value of all securities segregated at October 31, 2003, is
$515.
(d) Value is less than $1.
(e) Securities are currently in default on interest payments.
(f) Floating or variable rate note. Rate is listed as of October 31, 2003.
(g) Securities are stepbonds. HSBC Capital Funding LP-144A has a coupon rate of
10.18% until 06/30/2030, thereafter the coupon rate will become the 3 Month
LIBOR plus 498BP.
(h) Securities are stepbonds. Coupon steps up or down by 25BP for each rating
upgrade or downgrade by Standard and Poor's or Moody's for each notch below
BBB+/A3.
(i) Securities are stepbonds. KBC Bank Fund Trust III-144A has a coupon rate of
9.86% until 11/02/2009, thereafter the coupon rate will become the 3 Month
LIBOR plus 405BP.
(j) Securities are stepbonds. Coupon steps up by 50BP if rating is downgraded
below Standard and Poor's or Moody's single A rating. Coupon steps down by
50BP if rating is raised above Standard and Poor's or Moody's BBB/Baa
rating.
(k) Securities are stepbonds. Coupon steps up or down by 25BP for each rating
upgrade or downgrade by Standard and Poor's or Moody's for each notch below
A-/A3.
(l) Securities are stepbonds. Russian Federation has a coupon rate 5.00% until
03/31/2007, thereafter the coupon rate will be 7.50%.
(m) An option on an interest rate swap. If exercised, the fund will pay the
strike rate in order to receive the 3 Month LIBOR (London Interbank Offer
Rate).
(n) An option on an interest rate swap. If exercised, the fund will pay the 3
Month LIBOR (London Interbank Offer Rate) in order to receive the strike
rate.
(o) Euro Interbank Offered Rate.
DEFINITIONS:
TBA Mortgage-backed securities traded under delayed delivery commitments.
Income on TBA's are not earned until settlement date.
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 financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX PIMCO Total Return 9
IDEX PIMCO Total Return
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
At October 31, 2003
(all amounts except per share amounts in thousands)
Assets:
Investment securities, at value (cost: $116,782)
(including $218 of securities loaned) $ 117,774
Cash 3,476
Foreign cash (cost: $385) 390
Receivables:
Investment securities sold 20
Shares of beneficial interest sold 548
Interest 495
Variation margin 96
Swap agreements at value (premium $47) 95
Other 20
---------
122,914
---------
Liabilities:
Investment securities purchased 12,549
Accounts payable and accrued liabilities:
Shares of beneficial interest redeemed 248
Management and advisory fees 66
Distribution fees 61
Transfer agent fees 29
Payable for securities on loan 224
Unrealized depreciation on forward foreign currency
contracts 12
Written options and swaptions (premium: $280) 63
Swaps agreements at value (premium $2) 76
Other 28
---------
13,356
---------
Net Assets $ 109,558
=========
Net Assets Consist of:
Shares of beneficial interest, unlimited shares authorized $ 106,173
Accumulated net investment income (loss) (15)
Undistributed net realized gain (loss) from investment
securities, futures/option/swaption contracts, swaps
and foreign currency transactions 1,696
Net unrealized appreciation (depreciation) on:
Investment securities 992
Futures contracts 527
Written option and swaption contracts 218
Swap agreements (26)
Translation of assets and liabilities denominated in
foreign currencies (7)
---------
Net Assets $ 109,558
=========
Shares Outstanding:
Class A 5,368
Class B 3,286
Class C 962
Class L 498
Class M 306
Net Asset Value Per Share:
Class A $ 10.52
Class B 10.51
Class C 10.51
Class L 10.51
Class M 10.51
Maximum Offering Price Per Share (a):
Class A $ 11.04
Class M 10.62
(a) 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.
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the year ended October 31, 2003
(all amounts in thousands)
Investment Income:
Interest $ 3,531
Income from loaned securities-net 8
-------
3,539
-------
Expenses:
Management and advisory fees 742
Transfer agent fees 172
Printing and shareholder reports 25
Custody fees 54
Administration fees 35
Legal fees 6
Auditing and accounting fees 23
Trustees fees 7
Registration fees 72
Other 5
Distribution and service fees:
Class A 165
Class B 385
Class C 123
Class L 39
Class M 39
-------
Total expenses 1,892
-------
Net Investment Income (Loss) 1,647
-------
Net Realized Gain (Loss) from:
Investment securities 1,966
Futures contracts (15)
Written option contracts 122
Swap agreements 54
Foreign currency transactions 31
-------
2,158
-------
Net Increase (Decrease) in Unrealized Appreciation
(Depreciation) on:
Investment securities 959
Futures contracts 321
Written option contracts 200
Swap agreements (26)
Translation of assets and liabilities denominated in
foreign currencies (9)
-------
1,445
-------
Net Gain (Loss) on Investment Securities, Futures/
Option/Swaption Contracts, Swap Agreements and
Foreign Currency Transactions 3,603
-------
Net Increase (Decrease) in Net Assets Resulting from
Operations $ 5,250
=======
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX PIMCO Total Return 10
IDEX PIMCO Total Return
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
For the year or period ended
(all amounts in thousands)
October 31, October 31,
2003 2002(a)
------------ ------------
Increase (Decrease) In Net Assets From:
Operations:
Net investment income (loss) $ 1,647 $ 455
Net realized gain (loss) from investment
securities, futures/option/swaption
contracts, swap agreements, and
foreign currency transactions 2,158 1,261
Net unrealized appreciation
(depreciation) on investment
securities, futures/option/swaption
contracts, swap agreements, and
foreign currency translation 1,445 259
--------- ---------
5,250 1,975
--------- ---------
Distributions to Shareholders:
From net investment income:
Class A (1,137) (205)
Class B (662) (100)
Class C (215) (38)
Class L (61) -
Class M (80) (17)
--------- ---------
(2,155) (360)
--------- ---------
From net realized gains:
Class A (659) -
Class B (450) -
Class C (163) -
Class L (16) -
Class M (60) -
--------- ---------
(1,348) -
--------- ---------
Capital Share Transactions:
Proceeds from shares sold:
Class A 68,966 44,137
Class B 21,900 33,741
Class C 5,117 13,400
Class L 7,167 -
Class M 1,114 5,159
--------- ---------
104,264 96,437
--------- ---------
Dividends and distributions reinvested:
Class A 1,690 199
Class B 905 82
Class C 327 33
Class L 67 -
Class M 135 16
--------- ---------
3,124 330
--------- ---------
Cost of shares redeemed:
Class A (55,731) (4,312)
Class B (19,809) (3,479)
Class C (7,237) (1,984)
Class L (2,033) -
Class M (2,443) (931)
--------- ---------
(87,253) (10,706)
--------- ---------
20,135 86,061
--------- ---------
Net increase (decrease) in net assets 21,882 87,676
--------- ---------
Net Assets:
Beginning of year $ 87,676 $ -
--------- ---------
End of year 109,558 87,676
========= =========
Accumulated Net Investment Income (Loss) $ (15) $ 106
========= =========
Share Activity:
Shares issued:
Class A 6,565 4,358
Class B 2,093 3,331
Class C 491 1,323
Class L 684 -
Class M 106 510
--------- ---------
9,939 9,522
--------- ---------
Shares issued-reinvested from
distributions:
Class A 162 20
Class B 87 8
Class C 31 3
Class L 6 -
Class M 13 2
--------- ---------
299 33
--------- ---------
Shares redeemed:
Class A (5,310) (427)
Class B (1,889) (344)
Class C (691) (195)
Class L (192) -
Class M (233) (92)
--------- ---------
(8,315) (1,058)
--------- ---------
Net increase (decrease) in shares
outstanding 1,923 8,497
========= =========
(a) Commenced operations on March 1, 2002.
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX PIMCO Total Return 11
IDEX PIMCO Total Return
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share of beneficial interest outstanding throughout each period
------------------------------------------------------------------------------------------------------------
Investment Operations Distributions
----------------------------------------- ---------------------------------------
Net Asset Net Asset
For the Value, Net Net Realized From Net From Net Value,
Period Beginning Investment and Unrealized Total Investment Realized Total End
Ended (d)(g) of Period Income (Loss) Gain (Loss) Operations Income Gains Distributions of Period
- -----------------------------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 $10.32 $0.20 $0.39 $0.59 $ (0.25) $ (0.14) $ (0.39) $10.52
10/31/2002 10.00 0.13 0.28 0.41 (0.09) - (0.09) 10.32
- -----------------------------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 10.32 0.13 0.38 0.51 (0.18) (0.14) (0.32) 10.51
10/31/2002 10.00 0.09 0.29 0.38 (0.06) - (0.06) 10.32
- -----------------------------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 10.32 0.13 0.38 0.51 (0.18) (0.14) (0.32) 10.51
10/31/2002 10.00 0.09 0.29 0.38 (0.06) - (0.06) 10.32
- -----------------------------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 10.38 0.13 0.32 0.45 (0.18) (0.14) (0.32) 10.51
- -----------------------------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 10.32 0.14 0.38 0.52 (0.19) (0.14) (0.33) 10.51
10/31/2002 10.00 0.11 0.27 0.38 (0.06) - (0.06) 10.32
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
-----------------------------------------------------------------------
Ratio of Expenses
Net Assets, to Average Net Investment
For the End of Net Assets (a) Income (Loss) Portfolio
Period Total Period ----------------------- to Average Turnover
Ended (g) Return (c) (000's) Net (e) Total (f) Net Assets (a) Rate (b)
- ---------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 5.88% $ 56,452 1.43% 1.43% 1.91% 326%
10/31/2002 4.13 40,767 1.65 1.81 2.28 240
- ---------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 5.08 34,547 2.08 2.08 1.26 326
10/31/2002 3.80 30,909 2.30 2.46 1.63 240
- ---------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 5.08 10,116 2.08 2.08 1.26 326
10/31/2002 3.80 11,667 2.30 2.46 1.63 240
- ---------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 4.47 5,231 2.08 2.08 1.25 326
- ---------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 5.19 3,212 1.98 1.98 1.36 326
10/31/2002 3.85 4,333 2.20 2.36 1.73 240
- ---------------------------------------------------------------------------------------------------------------
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 are not annualized.
(d) Per share information is calculated based on average number of shares
outstanding.
(e) Ratio of Net Expenses to Average Net Assets is net of fee waivers and
reimbursements by the investment adviser, if any (see note 2).
(f) Ratio of Total Expenses to Average Net Assets includes all expenses before
fee waivers and reimbursements by the investment adviser.
(g) IDEX PIMCO Total Return ("the Fund") commenced operations on March 1, 2002.
The inception date for the Fund's offering of share Class L was November
11, 2002.
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX PIMCO Total Return 12
IDEX PIMCO Total Return
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
At October 31, 2003
(all amounts in thousands)
NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
IDEX Mutual Funds is a Massachusetts business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company. IDEX PIMCO Total Return ("the Fund"), part of
IDEX Mutual Funds, began operations on March 1, 2002.
In the normal course of business the Fund enters into contracts that contain a
variety of representations and warranties and which provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown, as this would involve future claims that may be made against the Fund
and/or its affiliates that have not yet occurred. However, based on experience,
the Fund expects the risk of loss to be remote.
See the Prospectus and Statement of Additional Information for a description of
the Fund's investment objective.
In preparing the Fund's financial statements in accordance with accounting
principles generally accepted in the United States of America ("GAAP"),
estimates or assumptions (which could differ from actual results) may be used
that affect reported amounts and disclosures. The following policies were
consistently followed by the Fund, in accordance with GAAP.
Multiple class operations and expenses: The Fund currently offers five classes
of shares, each with a public offering price that reflects different sales
charges, if any, and expense levels. Effective November 11, 2002, Class C and M
shares were closed to new investors. Income, non-class specific expenses and
realized and unrealized gains and losses, are allocated daily to each class,
based upon the value of shares outstanding method as permitted under Rule 18f-3
of the 1940 Act. Each class bears its own specific expenses as well as a
portion of general, common expenses.
Security valuations: Fund investments traded on an exchange are valued at the
closing price on the day of valuation on the exchange where the security is
principally traded. With respect to securities traded on the NASDAQ INMS, such
closing price may be the last reported sales price or the NASDAQ Official
Closing Price.
Debt securities are valued by independent pricing services; however, those that
mature in sixty days or less are valued at amortized cost, which approximates
market.
Other securities for which quotations are not readily available are valued at
fair value determined in good faith, in accordance with procedures established
by and, under the supervision of the Board of Trustees and the Fund's Valuation
Committee.
Cash: The Fund may leave cash overnight in its cash account with the custodian,
Investors Bank & Trust Company ("IBT"). IBT has been contracted on behalf of
the Fund to invest the excess cash into a savings account, which at October 31,
2003, was paying an interest rate of 0.75%.
TBA purchase commitments: The Fund may enter into "TBA" (to be announced)
purchase commitments to purchase securities for a fixed price at a future date,
typically not to exceed 45 days. TBA purchase commitments are considered
securities in themselves, and involve a risk of loss if the value of the
security to be purchased declines prior to settlement date, which is in
addition to the risk of decline in the value of the Fund's other assets.
Unsettled TBA purchase commitments are valued at the current value of the
underlying securities, according to the procedures described under Security
Valuations. TBA purchase commitments are included in the Schedule of
Investments.
Securities lending: The Fund may lend securities to enhance fund earnings from
investing cash collateral received in making such loans to qualified borrowers
(typically broker/dealers). The Fund has engaged its custodian bank, IBT, as a
lending agent to administer its securities lending program. IBT earned $3 of
program net income for its services. When the Fund makes a security loan, it
receives cash collateral as protection against the risk that the borrower will
default on the loan, and records an asset for the cash invested collateral and
a liability for the return of the collateral.
Securities on loan are included in Investment securities at value in the
Statement of Assets and Liabilities and remain in the Schedule of Investments.
Loans of securities are required to be secured by collateral at least equal to
102% of the value of the securities at inception of the loan, and not less then
100% thereafter. The Fund may invest cash collateral in short-term money market
instruments including: U.S. Treasury Bills, U.S. agency obligations, commercial
paper, money market mutual funds, repurchase agreements and other highly rated,
liquid investments. During the life of securities loans, the collateral and
securities loaned remain subject to fluctuation in value. IBT marks to market
securities loaned and the collateral each business day. If additional
collateral is due (at least $1), IBT collects additional cash collateral from
the borrowers. Although securities loaned will be fully collateralized at all
times, IBT may experience delays in, or may be prevented from, recovering the
collateral on behalf of the Fund. The Fund may recall a loaned security
position at any time from the borrower through IBT. In the event the borrower
fails to timely return a recalled security, IBT may indemnify the Fund by
purchasing replacement securities for the Fund at its own expense and claiming
the collateral to fund such a purchase. IBT absorbs the loss if the collateral
value is not sufficient to cover the cost of the replacement securities. If
replacement securities are not available, IBT will credit the equivalent cash
value to the Fund.
Income from securities lending is included in the Statement of Operations. The
amount of collateral and value of securities on loan are included in the
Statement of Assets and Liabilities as well as in the Schedule of Investments.
IDEX Mutual Funds Annual Report 2003
IDEX PIMCO Total Return 13
IDEX PIMCO Total Return
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 1-(continued)
Security transactions and investment income: Security transactions are recorded
on the trade date. Security gains and losses are calculated on the specific
identification basis. Interest income, including accretion of discounts and
amortization of premiums, is recorded on the accrual basis commencing on the
settlement date.
Foreign currency denominated investments: The accounting records of the Fund
are maintained in U.S. dollars. Securities and other assets and liabilities
denominated in foreign currencies are translated into U.S. dollars at the
closing exchange rate each day. The cost of foreign securities is translated at
the exchange rate in effect when the investment was acquired. The Fund combines
fluctuations from currency exchange rates and fluctuations in value when
computing net realized and unrealized gains or losses from investments.
Net foreign currency gains and losses resulting from changes in exchange rates
include: 1) foreign currency fluctuations between trade date and settlement
date of investment security transactions; 2) gains and losses on forward
foreign currency contracts; and 3) the difference between the receivable
amounts of interest and dividends recorded in the accounting records in U.S.
dollars and the amounts actually received.
Foreign currency denominated assets may involve risks not typically associated
with domestic transactions, including unanticipated movements in exchange
currency rates, the degree of government supervision and regulation of security
markets, and the possibility of political or economic instability.
Forward foreign currency contracts: The Fund may enter into forward foreign
currency contracts to hedge against exchange rate risk arising from investments
in securities denominated in foreign currencies. Contracts are valued at the
contractual forward rate and are marked to market daily, with the change in
value recorded as an unrealized gain or loss. When the contracts are closed a
realized gain or loss is incurred. Risks may arise from changes in market value
of the underlying currencies and from the possible inability of counterparties
to meet the terms of their contracts. Open forward currency contracts at
October 31, 2003, are listed in the Schedule of Investments.
Swap Agreements: The Fund may invest in swap agreements. A swap is an agreement
to exchange the return generated by one instrument for the return generated by
another instrument. The Fund may enter into interest rate and credit default
swap agreements to manage its exposure to interest rates and credit risk.
Interest rate swap agreements involve commitments to pay interest in exchange
for a market-linked return, both based on notional amounts. To the extent the
total return of the security or index underlying the transaction exceeds or
falls short of the offsetting interest rate obligation, the Fund will receive a
payment from or make a payment to the counterparty. In a credit default swap,
one party makes a stream of payments to another party in exchange for the right
to receive a specified return in the event of a default by a third party,
typically corporate issues or sovereign issues of an emerging country, on its
obligation. The Fund may use credit default swaps to provide a measure of
protection against defaults of sovereign issuers (i.e., to reduce risk where
the Fund owns or has exposure to the sovereign issuer) or to take an active
long or short position with respect to the likelihood of a particular issuer's
default.
Swaps are marked to market daily based upon quotations from market makers and
vendors and the change in value, if any, is recorded as unrealized gain or loss
in the Statement of Operations. Payments received or made at the beginning of
the measurement period are reflected as such on the Statement of Assets and
Liabilities. A liquidation payment received or made at the termination of the
swap is recorded as realized gain or loss in the Statement of Operations. Net
periodic payments are included as part of interest income on the Statement of
Operations.
Entering into these agreements involves, to varying degrees, elements of
credit, market and documentation risk in excess of the amounts recognized on
the Statement of Assets and Liabilities. Such risks involve the possibility
that there will be no liquid market for these agreements, that the counterparty
to the agreements may default on its obligation to perform or disagree as to
the meaning of contractual terms in the agreements, and that there may be
unfavorable changes in interest rates. Open Swap Agreements at October 31,
2003, are listed in the Schedule of Investments.
Futures, options and swaptions contracts: The Fund may enter into futures
and/or options contracts to manage exposure to market, interest rate or
currency fluctuations. Futures contracts are valued at the settlement price
established each day by the board of trade or exchange on which they are
traded. Option contracts are valued at the average of the bid and ask ("Mean
Quote") established each day at the close of the board of trade or exchange on
which they are traded. The primary risks associated with futures contracts and
options are imperfect correlation between the change in value of the securities
held and the prices of futures contracts and options; the possibility of an
illiquid market and inability of the counterparty to meet the contract terms.
When the Fund writes a covered call or put option, an amount equal to the
premium received by the Fund is included in the Fund's Statement of Assets and
Liabilities as an asset and as an equivalent liability. The amount of the
liability is subsequently marked-to-market to reflect the current value of the
option written.
The Fund is authorized to write swaption contracts to manage exposure to
fluctuations in interest rates and to enhance portfolio yield. Swaption
contracts written by the Fund represents an option that gives the purchaser the
right, but not the obligation, to enter into a previously agreed upon swap
contract on a future date. If a written call option is exercised, the writer
will enter a swap and is obligated to pay the fixed rate and receive a fixed
rate in exchange. Swaptions are marked-to-market daily based upon quotations
from market makers.
IDEX Mutual Funds Annual Report 2003
IDEX PIMCO Total Return 14
IDEX PIMCO Total Return
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 1-(continued)
When the Fund writes a swaption, the premium received is recorded as a
liability and is subsequently adjusted to the current value of the swaption.
Changes in the value of the swaption are reported as Unrealized gains or losses
in written options in the Statement of Assets and Liabilities. Gain or loss is
recognized when the swaption contract expires or is closed. Premiums received
from writing swaptions that expire or are exercised are treated by the
portfolio as realized gains from written options. The difference between the
premium and the amount paid on effecting a closing purchase transaction is also
treated as a realized gain, or if the premium is less than the amount paid for
the closing purchase, as a realized loss.
Entering into a swaption contract involves, to varying degrees, the elements of
credit, market and interest rate risk in excess of the amounts reported in the
Statement of Assets and Liabilities, associated with both option contracts and
swap contracts. To reduce credit risk from potential counterparty default, the
portfolio enters into swaption contracts with counterparties whose
creditworthiness has been approved by the Board of Trustees. The portfolio
bears the market risk arising from any changes in index values or interest
rates.
The underlying face amounts of open futures, option, and swaption contracts at
October 31, 2003, are listed in the Schedule of Investments. The variation
margin receivable is included in the accompanying Statement of Assets and
Liabilities. The variation margin receivable or payable, as applicable, is
included in the accompanying Statement of Assets and Liabilities. Variation
margin represents the additional payments due or excess deposits made in order
to maintain the equity account at the required margin level.
Transactions in written options were as follows:
Premium Contracts
--------- ----------
Balance at 10/31/2002 $ 72 113
Sales 49 116
Closing Buys -- --
Expirations (121) (229)
---- ----
Balance at 10/31/2003 $ -- --
==== ====
Transactions in swaptions were as follows:
Notional
Premium Amount
--------- -----------
Beginning Balance at 10/31/2002
Sales 415 33,200
Closing Buys (92) (9,800)
Expirations (43) (4,700)
--- ------
Exercised
--- ------
Balance at 10/31/2003 $ 280 18,700
===== ======
Dividend distributions: Distributions to shareholders are recorded on the
ex-dividend date and are determined in accordance with Federal income tax
regulations which may differ from GAAP.
NOTE 2. RELATED PARTY TRANSACTIONS
AEGON/Transamerica Fund Advisers, Inc. ("ATFA") is the Fund's investment
adviser. AEGON/Transamerica Fund Services, Inc. ("ATFS") is the Fund's
administrator. AFSG Securities Corp. ("AFSG") is the Fund's
distributor/principal underwriter. AEGON/Transamerica Investor Services, Inc.
("ATIS") is the 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. AUSA and WRL are wholly owned indirect
subsidiaries of AEGON NV, a Netherlands corporation.
The following schedule reflects the percentage of fund assets owned by
affiliated mutual funds (ie: through the assets allocation funds)
Net % of
Assets Net Assets
----------- -----------
IDEX Asset Allocation
Conservative Portfolio $ 11,339 10%
IDEX Asset Allocation Moderate
Growth 14,586 13%
IDEX Asset Allocation Moderate 17,603 16%
--
39%
==
Investment advisory fees: The Fund pays management fees to ATFA based on
average daily net assets ("ANA") at the following rate:
0.70% of ANA
ATFA currently voluntarily waives its advisory fee and will reimburse the Fund
to the extent that operating expenses, excluding 12b-1 fees, exceed the
following stated annual limit:
1.30% Expense Limit
If total fund expenses fall below the annual expense limitations agreed to by
the adviser within the succeeding three years, the Fund may be required to pay
the advisor a portion or all of the waived advisory fees.
Advisory Fee Available for
Waived Recapture Through
-------------- ------------------
Fiscal Year 2003 - 10/31/2006
Fiscal Year 2002 37 10/31/2005
For the year ended October 31, 2003, ATFA has voluntarily agreed to waive the
recapture of $37 reimbursed expenses that were otherwise eligible for
recapture.
IDEX Mutual Funds Annual Report 2003
IDEX PIMCO Total Return 15
IDEX PIMCO Total Return
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 2-(continued)
Distribution and service fees: The Fund has a 12b-1 distribution plan under the
1940 Act pursuant to which an annual fee, based on average daily net assets, is
paid to the distributor for various disbursements such as broker-dealer account
servicing fees and other promotional expenses of the Fund. The 12b-1 fee for
the Fund is comprised of a 0.25% service fee and the remaining amount is an
asset-based sales charge/distribution fee. The Fund is authorized under the
12b-1 plan to pay fees on each class up to the following limits:
Class A 0.35%
Class B 1.00%
Class C 1.00%
Class L 1.00%
Class M 0.90%
Underwriter commissions relate to front-end sales charges imposed for Class A
and M shares and contingent deferred sales charges from Classes B, L, M and
certain A share redemptions. For the year ended October 31, 2003, the
underwriter commissions were as follows:
Received by Underwriter $ 248
Retained by Underwriter 27
Contingent Sales Charges 177
Administrative services: The Fund has entered into an agreement with ATFS for
financial and legal fund administration services, which include such items as
compliance, expenses, financial statements and other reporting, distributions,
tax returns, prospectus preparation, board of trustees meeting support and
other legal matters. Transfer agent fees are reflected separately from
Administration fees on the Statement of Operations. The Legal fees on the
Statement of Operations are for fees paid to external legal counsel. ATFS
provides its services to the Fund at a cost and is reimbursed monthly.
Transfer agent fees: The Fund incurs ATIS annual per-account charges (not in
thousands) of $20.00 for each open shareholder account and $1.63 for each
closed account maintained, and certain out-of-pocket expenses.
Deferred compensation plan: Each eligible Fund Trustee may elect participation
in the Deferred Compensation Plan ("the Plan"). Under the Plan, such Trustees
may defer payment of a percentage of their total fees earned as a Fund Trustee.
These deferred amounts may be invested in any IDEX Fund. At October 31, 2003,
the value of invested plan amounts was $2. Invested plan amounts and the total
liability for deferred compensation to the Trustees under the Plan at October
31, 2003, are included in Net assets in the accompanying Statement of Assets
and Liabilities.
NOTE 3. INVESTMENT TRANSACTIONS
The cost of securities purchased and proceeds from securities sold (excluding
short-term securities) for the year ended October 31, 2003, are as follows:
Purchases of securities:
Long-Term excluding U.S. Government $ 27,227
U.S. Government 247,026
Proceeds from maturities and sales of securities:
Long-Term excluding U.S. Government 53,649
U.S. Government 240,192
NOTE 4. FEDERAL INCOME TAX MATTERS
The Fund has not made any provision for federal income or excise taxes due to
its policy to distribute all of its taxable income and capital gains to its
shareholders and otherwise qualify as a regulated investment company under the
Internal Revenue Code. Income and capital gain distributions are determined in
accordance with income tax regulations, which may differ from GAAP. These
differences are primarily due to differing treatments for items including, but
not limited to, wash sales, foreign currency transactions, net operating losses
and capital loss carryforwards.
Reclassifications between Undistributed net investment income (loss),
Undistributed net realized capital gains (loss) and Shares of beneficial
interest are made to reflect income and gains available for distribution under
federal tax regulations. Results of operations and net assets are not effected
by these reclassifications. These reclassifications are as follows:
Shares of beneficial interest, unlimited shares
authorized $ (12)
Accumulated net investment income (loss) 387
Undistributed net realized gain (loss) from
investment securities, futures/option/
swaption contracts, swaps and foreign
currency transactions (375)
The tax character of distributions paid may differ from the character of
distributions shown in the Statement of Changes in Net Assets
primarily due to short-term gains being treated as ordinary income for tax
purposes. The tax character of distributions paid during 2002 and 2003 was as
follows:
2002 Distributions paid from:
Ordinary income $ 360
Long-term capital gains -
2003 Distributions paid from:
Ordinary income $ 3,293
Long-term capital gains 210
IDEX Mutual Funds Annual Report 2003
IDEX PIMCO Total Return 16
IDEX PIMCO Total Return
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 4-(continued)
The tax basis components of distributable earnings as of October 31, 2003, are
as follows:
Undistributed Ordinary Income $ 1,806
=======
Undistributed Long-term Capital Gains $ 452
=======
Capital Loss Carryforward $ -
=======
Net Unrealized Appreciation (Depreciation) $ 982
=======
The aggregate cost of investments and composition of unrealized appreciation
(depreciation) for federal income tax purposes as of October 31, 2003, are as
follows:
Federal Tax Cost Basis $ 116,792
=========
Unrealized Appreciation $ 1,311
Unrealized (Depreciation) (329)
---------
Net Unrealized Appreciation (Depreciation) $ 982
=========
Supplemental Tax Information
(unaudited)
For tax purposes, the Fund has made a Long-Term Capital Gain Designation of
$0.04217 per share for the year ended October 31, 2003.
IDEX Mutual Funds Annual Report 2003
IDEX PIMCO Total Return 17
- --------------------------------------------------------------------------------
Report of Independent Certified Public Accountants
To the Board of Trustees and Shareholders of
IDEX PIMCO Total Return
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of IDEX PIMCO Total Return (the
"Fund") (one of the portfolios constituting the IDEX Mutual Funds) at October
31, 2003, and the results of its operations, the changes in its net assets and
the financial highlights for each of the periods indicated, in conformity with
accounting principles generally accepted in the United States of America. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with auditing standards generally accepted in the United States of America,
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at October 31, 2003 by correspondence with the
custodian and brokers, provide a reasonable basis for our opinion.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Tampa, Florida
December 18, 2003
IDEX Mutual Funds Annual Report 2003
IDEX PIMCO Total Return 18
IDEX Protected Principal Stock
- --------------------------------------------------------------------------------
MARKET ENVIRONMENT
The financial markets began a long-awaited recovery in the twelve-month period
ended October 31, 2003. After three years of devastating losses, investors
slowly regained their confidence and began tiptoeing back into the markets.
This increasing confidence has been justified as economic growth has
accelerated into the third and fourth quarters of 2003. For the year ended
October 31, 2003, the Standard and Poor's 500 Composite Stock Index ("S&P
500"), a representative index of large capitalization multi-national companies,
advanced by 20.79%, driven primarily by increasing earnings during the same
period. Clearly, investors willing to take substantial risks near the market
bottom in October 2002 were well rewarded for their courage. As the economy
advanced, low-risk fixed-income investors have become increasingly concerned
regarding the outlook for interest rates. Without the tailwind of falling
interest rates, fixed income investments, as represented by the Lehman Brothers
U. S. Intermediate Government/Credit Index, earned a total return of 5.43%.
PERFORMANCE
For the year ended October 31, 2003, IDEX Protected Principal Stock returned
9.44%. By comparison its benchmark, the S&P 500, returned 20.79%. The
portfolio's return reflects the steady accumulation of cash flows from hedging
transactions that is indicative of the portfolio's hedged equity strategy.
STRATEGY REVIEW
IDEX Protected Principal Stock employs multiple risk-management techniques to
limit investment volatility well below that of many equity funds. While these
techniques reduce volatility in both directions, the objective is to achieve
returns somewhat similar to the popular stock indexes over time. The first
risk-management feature the portfolio employs is broad diversification. The
portfolio's core strategy involves the ownership of all of the stocks
represented in the S&P 500. The next step is to sell cash-settled index call
options, which serve as the primary source of return. This continuous
generation of cash flow provides the portfolio with a consistent return in
exchange for any future upside appreciation of the portfolio's underlying
stocks. This cash flow does vary over time and is somewhat limited in its
ability to adequately protect the portfolio during a sudden, sharp sell-off.
Therefore, the next risk-management step is the purchase of index put options
to behave as a "safety net" to reduce the exposure of the portfolio during such
a market decline. The final feature is the Principal Protection Guarantee
itself. Please see the prospectus for a discussion of the portfolio's investing
and guarantee features.
/s/ J. Patrick Rogers
J. Patrick Rogers
Fund Manager
Gateway Investment Advisers, L.P.
IDEX Mutual Funds Annual Report 2003
IDEX Protected Principal Stock 1
IDEX Protected Principal Stock
- --------------------------------------------------------------------------------
Comparison of change in value of $10,000 investment in Class A shares and its
comparative index.
Growth of $10,000
Inception of 7/1/02 through 10/31/03
Investment less sales charges - $9,452
[The following table was depicted as a mountain chart in the printed material.]
DATE Class A S&P 500
- ------------------ ---------------- -----------
7/1/2002 9,452 10,000
9/30/2002 8,800 8,273
12/31/2002 9,580 8,971
3/31/2003 9,467 8,687
6/30/2003 10,028 10,025
9/30/2003 10,171 10,290
10/31/2003 10,354 10,872
Average Annual Total Return for Periods Ended 10/31/03
- --------------------------------------------------------------------------------
From Inception
1 year Inception Date
---------- ----------- ----------
Class A (NAV) 9.44% 7.07% 7/1/02
Class A (POP) 3.42% 2.63% 7/1/02
S&P 500(1) 20.79% 6.43% 7/1/02
- --------------- ----- ---- ------
Class B (NAV) 9.44% 7.07% 7/1/02
Class B (POP) 4.44% 3.39% 7/1/02
- --------------- ----- ---- ------
Class C (NAV) 9.44% 7.07% 7/1/02
- --------------- ----- ---- ------
Class M (NAV) 9.33% 6.99% 7/1/02
Class M (POP) 7.24% 6.18% 7/1/02
- --------------- ----- ---- ------
NOTES
(1) The Standard & Poor's 500 Composite Stock (S&P 500) 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 Micropal(R)(C) 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 if redemption occurs before
the Guarantee Maturity Date. 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 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. All share classes are
closed to new investors.
Investments that utilize options strategies may be subject to specific risks,
including limited opportunity to participate in rising stock markets or
increased risk during market declines. In general, mutual funds that invest in
stocks are subject to risks including weaknesses in the market as a whole, in a
particular industry, or in a specific holding, and from adverse political or
economic developments here or abroad.
Shareholders may lose some or all of the value of their guaranteed amount if
they redeem before the end of the 5-year Guarantee Period.
This material must be preceded or accompanied by a current prospectus, which
includes specific contents regarding the investment objectives and policies of
this fund.
IDEX Mutual Funds Annual Report 2003
IDEX Protected Principal Stock 2
IDEX Protected Principal Stock
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
At October 31, 2003
(all amounts except share amounts in thousands)
Shares Value
- ------------------------------------------------------------------------------------
COMMON STOCKS (100.8%) (b)
Aerospace (1.2%)
Boeing Company (The) 5,800 $ 223
Goodrich Corporation 800 22
Lockheed Martin Corporation 3,100 144
Northrop Grumman Corporation 1,235 110
Textron Inc. 900 45
United Technologies Corporation 3,200 271
Air Transportation (0.4%)
Delta Air Lines, Inc. 800 10
FedEx Corporation 2,100 159
Southwest Airlines Co. 5,400 105
Amusement & Recreation Services (0.5%)
Disney (Walt) Company (The) 14,100 319
Harrah's Entertainment, Inc. 800 35
Apparel & Accessory Stores (0.4%)
Gap, Inc. (The) 6,100 116
Limited, Inc. (The) 3,600 63
Nordstrom, Inc. 900 27
TJX Companies, Inc. (The) 3,500 73
Apparel Products (0.2%)
Cintas Corporation 1,200 51
Jones Apparel Group, Inc. 900 31
Liz Claiborne, Inc. 700 26
V.F. Corporation 700 30
Auto Repair, Services & Parking (0.0%)
Ryder System, Inc. 400 12
Automotive (1.1%)
Dana Corporation 1,000 16
Delphi Corporation 3,800 34
Ford Motor Company 12,700 154
General Motors Corporation 3,900 166
Harley-Davidson, Inc. 2,100 100
Honeywell International Inc. 5,900 181
Navistar International Corporation (a) 500 20
PACCAR Inc. 800 63
Visteon Corporation 900 6
Automotive Dealers & Service Stations (0.1%)
AutoNation, Inc. (a) 1,850 35
AutoZone, Inc. (a) 600 58
Beverages (2.7%)
Anheuser-Busch Companies, Inc. 5,700 281
Brown-Forman Corporation-Class B 400 34
Coca-Cola Company (The) 17,000 788
Coca-Cola Enterprises Inc. 3,100 62
Coors (Adolph) Company 300 17
Pepsi Bottling Group, Inc. (The) 1,800 40
PepsiCo, Inc. 12,000 574
Shares Value
- ------------------------------------------------------------------------------------
Business Services (1.3%)
Clear Channel Communications, Inc. 4,200 $ 171
eBay Inc. (a) 4,400 246
Equifax Inc. 1,000 24
First Data Corporation 5,100 182
Interpublic Group of Companies, Inc. (The) 2,700 40
Monster Worldwide, Inc. (a) 800 20
Moody's Corporation 1,000 58
Omnicom Group, Inc. 1,300 104
Robert Half International Inc. (a) 1,200 28
Chemicals & Allied Products (3.4%)
Air Products and Chemicals, Inc. 1,600 73
Avon Products, Inc. 1,600 109
Clorox Company (The) 1,500 68
Colgate-Palmolive Company 3,700 197
Dow Chemical Company (The) 6,300 237
du Pont (E.I.) de Nemours and Company 6,900 279
Eastman Chemical Company 500 16
Ecolab Inc. 1,800 48
Great Lakes Chemical Corporation 300 6
Hercules Incorporated (a) 800 8
International Flavors & Fragrances Inc. 600 20
Monsanto Company 1,771 44
PPG Industries, Inc. 1,200 69
Praxair, Inc. 1,100 77
Procter & Gamble Company (The) 8,900 874
Rohm and Haas Company 1,500 59
Sherwin-Williams Company (The) 1,000 34
Sigma-Aldrich Corporation 500 26
Commercial Banks (10.8%)
AmSouth Bancorporation 2,400 57
Bank of America Corporation 10,400 788
Bank of New York Company, Inc. (The) 5,300 165
Bank One Corporation 7,800 331
BB&T Corporation 3,300 128
Citigroup Inc. 35,600 1,687
Comerica Incorporated 1,200 62
Concord EFS, Inc. (a) 3,300 35
Fifth Third Bancorp 3,900 226
First Tennessee National Corporation 900 41
FleetBoston Financial Corporation 7,200 291
Huntington Bancshares Incorporated 1,600 35
KeyCorp 2,900 82
Marshall & Ilsley Corporation 1,500 54
MBNA Corporation 8,800 218
Mellon Financial Corporation 3,000 90
Morgan Chase & Co. (J.P.) 14,100 506
National City Corporation 4,200 137
North Fork Bancorporation, Inc. 1,000 39
Northern Trust Corporation 1,500 70
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Protected Principal Stock 3
IDEX Protected Principal Stock
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Shares Value
- ------------------------------------------------------------------------------------
Commercial Banks (continued)
PNC Financial Services Group, Inc. (The) 1,900 $ 102
Providian Financial Corporation (a) 2,000 22
Regions Financial Corporation 1,500 55
SouthTrust Corporation 2,300 73
State Street Corporation 2,300 120
SunTrust Banks, Inc. 1,900 127
Synovus Financial Corp. 2,100 58
U.S. Bancorp 13,300 362
Union Planters Corporation 1,300 43
Wachovia Corporation 9,200 422
Wells Fargo & Company 11,600 653
Zions Bancorporation 600 37
Communication (1.5%)
Comcast Corporation-Class A (a) 15,519 526
Viacom, Inc.-Class B 12,200 486
Communications Equipment (1.2%)
ADC Telecommunications, Inc. (a) 5,500 14
Avaya Inc. (a) 2,600 34
Ciena Corporation (a) 3,200 21
Comverse Technology, Inc. (a) 1,300 23
Corning Incorporated (a) 8,300 91
Lucent Technologies Inc. (a) 25,400 81
Motorola, Inc. 16,100 218
QUALCOMM Incorporated 5,500 261
Rockwell Collins, Inc. 1,200 33
Scientific-Atlanta, Inc. 1,000 30
Tellabs, Inc. (a) 2,800 21
Computer & Data Processing Services (5.8%)
Adobe Systems Incorporated 1,600 70
Autodesk, Inc. 800 15
Automatic Data Processing, Inc. 4,100 155
BMC Software, Inc. (a) 1,600 28
Citrix Systems, Inc. (a) 1,100 28
Computer Associates International, Inc. 4,000 94
Computer Sciences Corporation (a) 1,200 48
Compuware Corporation (a) 2,600 15
Convergys Corporation (a) 1,000 16
Electronic Arts Inc. (a) 1,000 99
Electronic Data Systems Corporation 3,300 71
Fiserv, Inc. (a) 1,300 46
IMS Health Incorporated 1,600 38
Intuit Inc. (a) 1,400 70
Mercury Interactive Corporation (a) 600 28
Microsoft Corporation 74,700 1,953
Novell, Inc. (a) 2,600 15
Oracle Corporation (a) 36,200 433
Parametric Technology Corporation (a) 1,800 6
PeopleSoft, Inc. (a) 2,200 46
Sabre Holdings Corporation 1,000 22
Shares Value
- ------------------------------------------------------------------------------------
Computer & Data Processing Services (continued)
Siebel Systems, Inc. (a) 3,400 $ 43
SunGard Data Systems Inc. (a) 2,000 56
Symantec Corporation (a) 1,075 72
Unisys Corporation (a) 2,300 35
VERITAS Software Corporation (a) 2,900 105
Yahoo! Inc. (a) 4,200 184
Computer & Office Equipment (5.9%)
Apple Computer, Inc. (a) 2,500 57
Cisco Systems, Inc. (a) 48,500 1,018
Dell Computer Corporation (a) 17,700 639
EMC Corporation (a) 15,200 210
Gateway, Inc. (a) 2,200 11
Hewlett-Packard Company 21,000 469
International Business Machines
Corporation 12,000 1,074
Lexmark International Group, Inc. (a) 900 66
NCR Corporation (a) 700 25
Network Appliance, Inc. (a) 2,400 59
Pitney Bowes Inc. 1,600 66
Sun Microsystems, Inc. (a) 22,300 88
Symbol Technologies, Inc. 1,600 20
Xerox Corporation (a) 5,300 56
Construction (0.2%)
Ashland Inc. 500 19
Centex Corporation 400 39
Fluor Corporation 600 22
KB Home 300 21
Pulte Corporation 400 35
Department Stores (0.6%)
Dillard's, Inc.-Class A 600 10
Federated Department Stores, Inc. 1,300 62
J.C. Penney Company, Inc. 1,900 45
Kohl's Corporation (a) 2,300 129
May Department Stores Company (The) 2,000 56
Sears, Roebuck and Co. 1,900 100
Drug Stores & Proprietary Stores (0.6%)
CVS Corporation 2,700 95
Medco Health Solutions, Inc. (a) 1,853 62
Walgreen Co. 7,000 244
Educational Services (0.1%)
Apollo Group, Inc.-Class A (a) 1,200 76
Electric Services (1.7%)
AES Corporation (The) (a) 3,900 34
Allegheny Energy, Inc. (a) 900 10
American Electric Power Company, Inc. 2,500 70
Calpine Corporation (a) 2,600 12
CenterPoint Energy, Inc. 2,100 21
Constellation Energy Group, Inc. 1,100 40
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Protected Principal Stock 4
IDEX Protected Principal Stock
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Shares Value
- ------------------------------------------------------------------------------------
Electric Services (continued)
Dominion Resources, Inc. 2,200 $ 136
DTE Energy Company 1,100 41
Duke Energy Corporation 6,200 113
Edison International (a) 2,200 43
Entergy Corporation 1,600 86
FirstEnergy Corp. 2,100 72
FPL Group, Inc. 1,300 83
Pinnacle West Capital Corporation 600 22
PPL Corporation 1,100 44
Progress Energy, Inc. 1,700 73
Southern Company (The) 5,000 149
TECO Energy, Inc. 1,200 16
TXU Corp. 2,200 50
Electric, Gas & Sanitary Services (0.9%)
Ameren Corporation 1,100 49
Cinergy Corp. 1,200 44
Citizens Communications Company (a) 2,000 25
CMS Energy Corporation 1,000 8
Consolidated Edison, Inc. 1,500 61
Exelon Corporation 2,200 140
NiSource Inc. 1,700 35
PG&E Corporation (a) 2,800 68
Public Service Enterprise Group
Incorporated 1,600 65
Sempra Energy 1,400 39
Xcel Energy Inc. 2,700 44
Electronic & Other Electric Equipment (3.5%)
American Power Conversion Corporation 1,300 26
Cooper Industries, Inc.-Class A 600 32
Eaton Corporation 500 50
Emerson Electric Co. 2,900 165
General Electric Company 69,300 2,010
Maytag Corporation 500 13
Thomas & Betts Corporation (a) 400 7
Whirlpool Corp. 500 35
Electronic Components & Accessories (4.6%)
Advanced Micro Devices, Inc. (a) 2,400 36
Altera Corporation (a) 2,600 53
Analog Devices, Inc. (a) 2,500 111
Applied Micro Circuits Corporation (a) 2,100 12
Broadcom Corporation-Class A (a) 2,000 64
Intel Corporation 44,900 1,484
Jabil Circuit, Inc. (a) 1,400 39
JDS Uniphase Corporation (a) 9,900 35
Linear Technology Corporation 2,200 94
LSI Logic Corporation (a) 2,600 24
Maxim Integrated Products 2,200 109
Micron Technology, Inc. (a) 4,200 60
Molex Incorporated 1,300 41
Shares Value
- ------------------------------------------------------------------------------------
Electronic Components & Accessories (continued)
National Semiconductor Corporation (a) 1,200 $ 49
NVIDIA Corporation (a) 1,100 19
PMC-Sierra, Inc. (a) 1,100 20
Power-One, Inc. (a) 600 5
QLogic Corporation (a) 600 34
Sanmina Corporation (a) 3,500 37
Solectron Corporation (a) 5,700 32
Texas Instruments Incorporated 12,000 347
Tyco International Ltd. 13,800 288
Xilinx, Inc. (a) 2,300 73
Environmental Services (0.2%)
Allied Waste Industries, Inc. (a) 1,400 16
Waste Management, Inc. 4,100 106
Fabricated Metal Products (0.5%)
Crane Co. 400 11
Fortune Brands, Inc. 1,000 65
Gillette Company (The) 7,000 223
Parker-Hannifin Corporation 800 41
Stanley Works (The) 600 20
Finance (0.8%)
Standard & Poor's 500 Depositary Receipt 4,790 505
Food & Kindred Products (2.2%)
Altria Group, Inc. 14,000 651
Archer Daniels Midland Co. 4,400 63
Campbell Soup Company 2,800 73
ConAgra Foods, Inc. 3,700 88
General Mills, Inc. 2,600 117
Heinz (H.J.) Company 2,400 85
Hershey Foods Corporation 900 69
Kellogg Company 2,800 93
McCormick & Company, Incorporated 1,000 30
Sara Lee Corporation 5,300 106
Wrigley (Wm.) Jr. Company 1,500 85
Food Stores (0.3%)
Albertson's, Inc. 2,500 51
Kroger Co. (The) (a) 5,200 91
Safeway Inc. (a) 3,000 63
Winn-Dixie Stores, Inc. 1,000 8
Furniture & Fixtures (0.1%)
Johnson Controls, Inc. 600 65
Leggett & Platt, Incorporated 1,300 27
Furniture & Home Furnishings Stores (0.1%)
Bed Bath & Beyond Inc. (a) 2,000 84
Gas Production & Distribution (0.3%)
El Paso Corporation 4,100 30
KeySpan Corporation 1,000 35
Kinder Morgan, Inc. 800 43
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Protected Principal Stock 5
IDEX Protected Principal Stock
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Shares Value
- ------------------------------------------------------------------------------------
Gas Production & Distribution (continued)
Nicor Inc. 300 $ 10
Peoples Energy Corporation 300 12
Williams Companies, Inc. (The) 3,600 37
Health Services (0.4%)
HCA Inc. 3,400 130
Health Management Associates,
Inc.-Class A 1,600 35
Manor Care, Inc. 600 20
Quest Diagnostics Incorporated (a) 700 47
Tenet Healthcare Corporation (a) 3,200 44
Holding & Other Investment Offices (0.5%)
Apartment Investment & Management
Co.-Class A 540 22
Equity Office Properties Trust 2,700 76
Equity Residential 1,900 56
Janus Capital Group, Inc. 1,600 23
Plum Creek Timber Company, Inc. 1,300 34
ProLogis 1,250 37
Simon Property Group, Inc. 1,300 59
Hotels & Other Lodging Places (0.2%)
Hilton Hotels Corporation 2,600 41
Marriott International, Inc.-Class A 1,600 69
Starwood Hotels & Resorts
Worldwide, Inc. 1,400 47
Industrial Machinery & Equipment (1.6%)
American Standard Companies Inc. (a) 500 48
Applied Materials, Inc. (a) 11,500 269
Baker Hughes Incorporated 2,300 65
Black & Decker Corporation (The) 500 24
Brunswick Corporation 600 18
Caterpillar, Inc. 2,400 176
Cummins Inc. 300 14
Deere & Company 1,600 97
Dover Corporation 1,400 55
Illinois Tool Works Inc. 2,100 154
Ingersoll-Rand Company-Class A 1,100 66
ITT Industries, Inc. 600 41
Novellus Systems, Inc. (a) 1,000 41
Pall Corporation 900 21
Instruments & Related Products (0.9%)
Agilent Technologies, Inc. (a) 3,200 80
Applera Corporation-Applied
Biosystems Group 1,400 32
Bausch & Lomb Incorporated 400 19
Danaher Corporation 1,000 83
Eastman Kodak Company 2,000 49
KLA-Tencor Corporation (a) 1,300 75
Millipore Corporation (a) 300 13
Shares Value
- ------------------------------------------------------------------------------------
Instruments & Related Products (continued)
PerkinElmer, Inc. 900 $ 16
Raytheon Company 2,800 74
Rockwell International Corporation 1,300 40
Snap-on Incorporated 400 12
Tektronix, Inc. 600 15
Teradyne, Inc. (a) 1,300 30
Thermo Electron Corporation (a) 1,100 24
Waters Corporation (a) 800 25
Insurance (4.3%)
ACE Limited 1,800 65
Aetna Inc. 1,000 57
AFLAC Incorporated 3,500 128
Allstate Corporation (The) 4,800 190
Ambac Financial Group, Inc. 700 50
American International Group, Inc. 18,000 1,095
Anthem, Inc. (a) 1,000 68
Aon Corporation 2,200 48
Chubb Corporation 1,200 80
CIGNA Corporation 1,000 57
Cincinnati Financial Corporation 1,100 45
Humana Inc. (a) 1,100 22
Loews Corporation 1,300 56
MBIA, Inc. 1,000 60
MGIC Investment Corporation 700 36
Principal Financial Group, Inc. 2,200 69
Progressive Corporation (The) 1,500 111
SAFECO Corporation 1,000 37
St. Paul Companies, Inc. (The) 1,600 61
Travelers Property Casualty Corp.-Class B 6,908 113
UnitedHealth Group Incorporated 4,100 209
UnumProvident Corporation 1,700 28
WellPoint Health Networks Inc. (a) 1,000 89
XL Capital Ltd.-Class A 900 63
Insurance Agents, Brokers & Service (0.7%)
Express Scripts, Inc.-Class A (a) 550 30
Hartford Financial Services Group,
Inc. (The) 1,800 99
Marsh & McLennan Companies, Inc. 3,700 158
MetLife, Inc. 5,100 160
Life Insurance (0.5%)
Jefferson-Pilot Corporation 1,000 48
John Hancock Financial Services, Inc. 2,000 71
Lincoln National Corporation 1,200 48
Prudential Financial, Inc. 3,800 147
Torchmark Corporation 800 35
Lumber & Other Building Materials (1.4%)
Home Depot, Inc. (The) 15,900 589
Lowe's Companies, Inc. 5,400 318
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Protected Principal Stock 6
IDEX Protected Principal Stock
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Shares Value
- ------------------------------------------------------------------------------------
Lumber & Wood Products (0.4%)
Georgia-Pacific Corporation 1,700 $ 45
Louisiana-Pacific Corporation (a) 700 13
Masco Corporation 3,200 88
Weyerhaeuser Company 1,500 90
Management Services (0.2%)
Paychex, Inc. 2,600 101
Manufacturing Industries (0.2%)
Hasbro Inc. 1,200 26
International Game Technology 2,300 75
Mattel, Inc. 3,000 58
Medical Instruments & Supplies (1.8%)
Bard, (C.R.) Inc. 400 32
Baxter International Inc. 4,200 112
Becton, Dickinson and Company 1,700 62
Biomet, Incorporated 1,800 65
Boston Scientific Corporation (a) 2,800 190
Guidant Corporation 2,100 107
Medtronic, Inc. 8,400 383
St. Jude Medical, Inc. (a) 1,200 70
Stryker Corporation 1,400 114
Zimmer Holdings, Inc. (a) 1,300 83
Metal Cans & Shipping Containers (0.0%)
Ball Corporation 400 22
Metal Mining (0.2%)
Freeport-McMoRan Copper & Gold
Inc.-Class B 1,000 39
Newmont Mining Corporation 2,800 123
Mining (0.0%)
Vulcan Materials Company 700 31
Mortgage Bankers & Brokers (0.1%)
Countrywide Credit Industries, Inc. 900 95
Motion Pictures (0.7%)
Time Warner Inc. (a) 31,200 477
Motor Vehicles, Parts & Supplies (0.1%)
Genuine Parts Company 1,200 38
Oil & Gas Extraction (1.8%)
Anadarko Petroleum Corporation 1,700 74
Apache Corporation 1,055 74
BJ Services Company (a) 1,100 36
Burlington Resources Inc. 1,400 68
ConocoPhillips 4,704 269
Devon Energy Corporation 1,100 53
Dynegy Inc. (a) 2,600 10
EOG Resources, Inc. 800 34
Halliburton Company 3,000 72
Kerr-McGee Corporation 700 29
Nabors Industries Ltd. (a) 1,000 38
Noble Corporation (a) 900 31
Shares Value
- ------------------------------------------------------------------------------------
Oil & Gas Extraction (continued)
Occidental Petroleum Corporation 2,600 $ 92
Rowan Companies, Inc. (a) 600 14
Schlumberger Limited 4,000 188
Transocean Inc. (a) 2,200 42
Unocal Corporation 1,800 57
Paper & Allied Products (1.3%)
3M Company 5,400 426
Avery Dennison Corporation 800 42
Bemis Company, Inc. 400 18
International Paper Company 3,300 130
Kimberly-Clark Corporation 3,500 185
MeadWestvaco Corporation 1,400 36
Pactiv Corporation (a) 1,100 24
Temple-Inland Inc. 400 22
Paper & Paper Products (0.0%)
Boise Cascade Corporation 400 11
Personal Credit Institutions (0.3%)
Capital One Financial Corporation 1,600 97
SLM Corporation 3,100 121
Personal Services (0.3%)
Block (H&R), Inc. 1,200 57
Cendant Corporation (a) 7,000 143
Petroleum Refining (3.5%)
Amerada Hess Corporation 600 31
ChevronTexaco Corporation 7,300 542
Exxon Mobil Corporation 45,800 1,675
Marathon Oil Corporation 2,100 62
Sunoco, Inc. 500 22
Pharmaceuticals (10.0%)
Abbott Laboratories 10,800 460
Allergan, Inc. 900 68
AmerisourceBergen Corporation 800 45
Amgen Inc. (a) 8,872 548
Biogen, Inc. (a) 1,000 40
Bristol-Myers Squibb Co. 13,400 340
Cardinal Health, Inc. 3,100 184
Chiron Corporation (a) 1,300 71
Forest Laboratories, Inc. (a) 2,500 125
Genzyme Corporation-General Division (a) 1,500 69
Johnson & Johnson 20,500 1,032
King Pharmaceuticals, Inc. (a) 1,700 23
Lilly (Eli) and Company 7,700 513
McKesson HBOC, Inc. 2,000 61
Medimmune, Inc. (a) 1,700 45
Merck & Co., Inc. 15,500 686
Pfizer Inc. 53,740 1,698
Schering-Plough Corporation 10,200 156
Watson Pharmaceuticals, Inc. (a) 700 27
Wyeth 9,200 406
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Protected Principal Stock 7
IDEX Protected Principal Stock
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Shares Value
- ------------------------------------------------------------------------------------
Primary Metal Industries (0.5%)
Alcoa Inc. 5,800 $ 183
Allegheny Technologies Incorporated 600 5
Andrew Corporation (a) 700 9
Engelhard Corporation 900 26
Nucor Corporation 500 27
Phelps Dodge Corporation (a) 600 37
United States Steel Corporation 700 17
Worthington Industries, Inc. 600 9
Printing & Publishing (0.8%)
American Greetings Corporation-Class A (a) 500 11
Deluxe Corporation 400 16
Donnelley (R.R.) & Sons Company 800 21
Dow Jones & Company, Inc. 600 31
Gannett Co., Inc. 1,900 160
Knight-Ridder, Inc. 600 44
McGraw-Hill Companies, Inc. (The) 1,300 87
Meredith Corporation 300 15
New York Times Company (The)-Class A 1,000 48
Tribune Company 2,200 108
Radio & Television Broadcasting (0.1%)
Univision Communications Inc.-Class A (a) 1,600 54
Radio, Television & Computer Stores (0.3%)
Best Buy Co., Inc. (a) 2,200 128
Circuit City Stores, Inc.-Circuit City
Group 1,400 13
RadioShack Corporation 1,100 33
Railroads (0.4%)
Burlington Northern Santa Fe
Corporation 2,600 75
CSX Corporation 1,500 48
Norfolk Southern Corporation 2,700 54
Union Pacific Corporation 1,800 113
Restaurants (0.6%)
Darden Restaurants, Inc. 1,100 23
McDonald's Corporation 8,700 218
Starbucks Corporation (a) 2,700 85
Wendy's International, Inc. 800 30
YUM! Brands, Inc. (a) 2,000 68
Retail Trade (0.3%)
Alberto-Culver Company-Class B 400 25
Office Depot, Inc. (a) 2,100 31
Staples, Inc. (a) 3,400 91
Tiffany & Co. 1,000 47
Toys "R" Us, Inc. (a) 1,500 20
Rubber & Misc. Plastic Products (0.3%)
Cooper Tire & Rubber Company 500 10
Goodyear Tire & Rubber Company (The) 1,200 8
Newell Financial Trust I 1,900 43
Shares Value
- ------------------------------------------------------------------------------------
Rubber & Misc. Plastic Products (continued)
NIKE, Inc.-Class B 1,800 $ 115
Reebok International Ltd. 400 16
Sealed Air Corporation (a) 600 32
Tupperware Corporation 400 6
Savings Institutions (0.6%)
Charter One Financial, Inc. 1,590 51
Golden West Financial Corporation 1,000 100
Washington Mutual, Inc. 6,300 276
Security & Commodity Brokers (2.9%)
American Express Company 8,900 418
Bear Stearns Companies Inc. (The) 700 53
Federated Investors, Inc.-Class B 750 21
Franklin Resources, Inc. 1,700 81
Goldman Sachs Group, Inc. (The) 3,300 310
Lehman Brothers Holdings Inc. 1,700 122
Merrill Lynch & Co., Inc. 6,300 373
Morgan Stanley 7,500 412
Schwab (Charles) Corporation (The) 9,400 127
T. Rowe Price Group, Inc. 800 33
Telecommunications (3.4%)
ALLTEL Corporation 2,100 99
AT&T Corp. 5,400 100
AT&T Wireless Services, Inc. (a) 18,800 136
BellSouth Corporation 12,800 337
CenturyTel, Inc. 1,000 36
Nextel Communications, Inc.-Class A (a) 7,100 172
Qwest Communications International Inc. (a) 11,800 42
SBC Communications Inc. 23,000 552
Sprint Corporation (FON Group) 6,200 99
Sprint Corporation (PCS Group) (a) 7,100 31
Verizon Communications, Inc. 19,000 638
Tobacco Products (0.1%)
R.J. Reynolds Tobacco Holdings, Inc. 600 29
UST Inc. 1,100 37
Transportation Equipment (0.2%)
General Dynamics Corporation 1,400 117
Trucking & Warehousing (0.8%)
United Parcel Service, Inc.-Class B 7,700 558
U.S. Government Agencies (1.1%)
Fannie Mae 6,700 480
Freddie Mac 4,800 269
Variety Stores (3.4%)
Big Lots, Inc. (a) 800 12
Costco Wholesale Corporation (a) 3,100 110
Dollar General Corporation 2,300 52
Family Dollar Stores, Inc. 1,200 52
Target Corporation 6,300 250
Wal-Mart Stores, Inc. 30,200 1,780
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Protected Principal Stock 8
IDEX Protected Principal Stock
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Shares Value
-------- -----------
Water Transportation (0.2%)
Carnival Corporation 4,300 $ 150
Wholesale Trade Durable Goods (0.0%)
Grainger (W.W.), Inc. 600 27
Wholesale Trade Nondurable Goods (0.2%)
SUPERVALU INC. 900 23
SYSCO Corporation 4,500 151
--------
Total Common Stocks (cost: $60,725) 67,210
--------
Contracts (c) Value
--------------- -----------
PURCHASED OPTIONS (0.3%)
Put Options (0.3%)
S & P 500 Index
Put Strike $925.00,
Expires 12/20/2003 320 $ 67
S & P 500 Index
Put Strike $950.00,
Expires 12/20/2003 318 100
--------
Total Purchased Options (cost: $835) 167
--------
Total Investment Securities (cost: $61,560) $ 67,377
========
Contracts (c) Value
------------- ----------
WRITTEN OPTIONS (-3.3%)
Covered Call Options (-3.3%)
S & P 500 Index
Call Strike $1,025.00,
Expires 11/22/2003 192 $ (572)
S & P 500 Index
Call Strike $1,025.00,
Expires 12/20/2003 160 (585)
S & P 500 Index
Call Strike $1,050.00,
Expires 11/22/2003 96 (127)
S & P 500 Index
Call Strike $1,050.00,
Expires 12/20/2003 47 (101)
S & P 500 Index
Call Strike $995.00,
Expires 11/22/2003 96 (535)
S & P 500 Index
Call Strike $995.00,
Expires 12/20/2003 47 (283)
--------
Total Written Options (premium: $2,599) $ (2,203)
========
SUMMARY:
Investments, at value 101.1 % $ 67,377
Written options (3.3)% (2,203)
Assets in excess of other liabilities 2.2 % 1,472
----- --------
Net assets 100.0 % $ 66,646
===== ========
NOTES TO SCHEDULE OF INVESTMENTS:
(a) No dividends were paid during the preceding twelve months.
(b) Substantially all of the Funds common stocks are memo pledged as collateral
by the custodian for the listed short index option contracts written by the
Fund (See Note 1).
(c) Contracts are not in thousands.
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Protected Principal Stock 9
IDEX Protected Principal Stock
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
At October 31, 2003
(all amounts except per share amounts in thousands)
Assets:
Investment securities, at value (cost: $61,560) $ 67,377
Cash 1,631
Receivables:
Shares of beneficial interest sold 33
Dividends 100
Other 2
--------
69,143
--------
Liabilities:
Accounts payable and accrued liabilities:
Shares of beneficial interest redeemed 84
Management and advisory fees 110
Distribution fees 51
Transfer agent fees 26
Written options (premium: $2,599) 2,203
Other 23
--------
2,497
--------
Net Assets $ 66,646
========
Net Assets Consist of:
Shares of beneficial interest, unlimited shares authorized $ 64,873
Undistributed net investment income (loss) -
Accumulated net realized gain (loss) from investment
securities and option contracts (4,440)
Net unrealized appreciation (depreciation) on:
Investment securities 5,817
Written option contracts 396
--------
Net Assets $ 66,646
========
Shares Outstanding:
Class A 919
Class B 4,604
Class C 694
Class M 352
Net Asset Value Per Share:
Class A $ 10.15
Class B 10.15
Class C 10.15
Class M 10.14
Maximum Offering Price Per Share (a):
Class A $ 10.74
Class M 10.24
(a) 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 and C shares represents
offering price. The redemption price for Classes B and M shares equals net
asset value less any applicable contingent deferred sales charge.
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the year ended October 31, 2003
(all amounts in thousands)
Investment Income:
Interest $ 11
Dividends 1,194
--------
1,205
--------
Expenses:
Management and advisory fees 877
Transfer agent fees 113
Printing and shareholder reports 24
Custody fees 50
Administration fees 38
Legal fees 94
Auditing and accounting fees 18
Trustees fees 5
Registration fees 57
Other 14
Distribution and service fees:
Class A 34
Class B 468
Class C 71
Class M 36
--------
Total expenses 1,899
Less:
Advisory fee waiver (9)
--------
Net expenses 1,890
--------
Net Investment Income (Loss) (685)
--------
Net Realized Gain (Loss) from:
Investment securities (4,013)
Written option contracts (407)
--------
(4,420)
--------
Net Increase (Decrease) in Unrealized Appreciation
(Depreciation) on Investment Securities 11,181
--------
Net Gain (Loss) on Investment Securities and Option
Contracts 6,761
--------
Net Increase (Decrease) in Net Assets Resulting from
Operations $ 6,076
========
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Protected Principal Stock 10
IDEX Protected Principal Stock
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
For the year or period ended
(all amounts in thousands)
October 31, October 31,
2003 2002 (a)
----------- -----------
Increase (Decrease) In Net Assets From:
Operations:
Net investment income (loss) $ (685) $ (283)
Net realized gain (loss) from investment
securities and option contracts (4,420) 5,178
Net unrealized appreciation
(depreciation) on investment
securities and option contracts 11,181 (4,968)
-------- --------
6,076 (73)
-------- --------
Distributions to Shareholders:
From net investment income:
Class A - -
Class B - -
Class C - -
Class M - -
-------- --------
- -
-------- --------
From net realized gains:
Class A (728) -
Class B (3,475) -
Class C (519) -
Class M (301) -
-------- --------
(5,023) -
-------- --------
Capital Share Transactions:
Proceeds from shares sold:
Class A 171 10,820
Class B - 48,436
Class C 6 7,097
Class M - 4,100
-------- --------
177 70,453
-------- --------
Dividends and distributions reinvested:
Class A 733 -
Class B 3,468 -
Class C 519 -
Class M 301 -
-------- --------
5,021 -
-------- --------
Cost of shares redeemed:
Class A (2,125) (431)
Class B (4,642) (1,200)
Class C (576) (128)
Class M (858) (25)
-------- --------
(8,201) (1,784)
-------- --------
(3,003) 68,669
-------- --------
Net increase (decrease) in net assets (1,950) 68,596
-------- --------
Net Assets:
Beginning of year 68,596 -
-------- --------
End of year $ 66,646 $ 68,596
======== ========
Undistributed Net Investment Income (Loss) $ - $ -
======== ========
Share Activity:
Shares issued:
Class A 17 1,082
Class B - 4,841
Class C 1 710
Class M - 410
-------- --------
18 7,043
-------- --------
Shares issued-reinvested from distributions:
Class A 78 -
Class B 369 -
Class C 55 -
Class M 32 -
-------- --------
534 -
-------- --------
Shares redeemed:
Class A (213) (45)
Class B (480) (126)
Class C (59) (13)
Class M (87) (3)
-------- --------
(839) (187)
-------- --------
Net increase (decrease) in shares
outstanding (287) 6,856
======== ========
(a) Commenced operations on July 1, 2002.
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Protected Principal Stock 11
IDEX Protected Principal Stock
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share of beneficial interest outstanding throughout each period
-------------------------------------------------------------------------------------------------------------
Investment Operations Distributions
------------------------------------------ ---------------------------------------
Net Asset Net Asset
For the Value, Net Net Realized From Net From Net Value,
Period Beginning Investment and Unrealized Total Investment Realized Total End
Ended (d)(g) of Period Income (Loss) Gain (Loss) Operations Income Gains Distributions of Period
- ------------------------------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 $10.01 $ (0.04) $0.92 $0.88 $ - $ (0.74) $ (0.74) $ 10.15
10/31/2002 10.00 (0.02) 0.03 0.01 - - - 10.01
- ------------------------------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 10.01 (0.11) 0.99 0.88 - (0.74) (0.74) 10.15
10/31/2002 10.00 (0.04) 0.05 0.01 - - - 10.01
- ------------------------------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 10.01 (0.11) 0.99 0.88 - (0.74) (0.74) 10.15
10/31/2002 10.00 (0.04) 0.05 0.01 - - - 10.01
- ------------------------------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 10.01 (0.10) 0.97 0.87 - (0.74) (0.74) 10.14
10/31/2002 10.00 (0.04) 0.05 0.01 - - - 10.01
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
-----------------------------------------------------------------------
Ratio of Expenses
Net Assets, to Average Net Investment
For the End of Net Assets (a) Income (Loss) Portfolio
Period Total Period ----------------------- to Average Turnover
Ended (g) Return (c) (000's) Net (e) Total (f) Net Assets (a) Rate (b)
- ----------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 9.44% $ 9,320 2.25% 2.25% (0.46)% 3%
10/31/2002 0.10 10,381 2.25 2.62 (0.70) 14
- ----------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 9.44 46,709 2.90 2.90 (1.11) 3
10/31/2002 0.10 47,170 2.90 3.28 (1.35) 14
- ----------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 9.44 7,041 2.90 2.90 (1.11) 3
10/31/2002 0.10 6,969 2.90 3.28 (1.35) 14
- ----------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 9.33 3,576 2.80 2.80 (1.01) 3
10/31/2002 0.10 4,076 2.80 3.18 (1.25) 14
- ----------------------------------------------------------------------------------------------------------------
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 are not annualized.
(d) Per share information is calculated based on average number of shares
outstanding.
(e) Ratio of Net Expenses to Average Net Assets is net of fee waivers and
reimbursements by the investment adviser, if any (see note 2).
(f) Ratio of Total Expenses to Average Net Assets includes all expenses before
fee waivers and reimbursements by the investment adviser.
(g) IDEX Protected Principal Stock commenced operations on July 1, 2002.
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Protected Principal Stock 12
IDEX Protected Principal Stock
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
At October 31, 2003
(all amounts in thousands)
NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
IDEX Mutual Funds is a Massachusetts business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company. IDEX Protected Principal Stock ("the Fund"),
part of IDEX Mutual Funds, began operations on July 1, 2002.
In the normal course of business the Fund enters into contracts that contain a
variety of representations and warranties which provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown, as this would involve future claims that may be made against the Fund
and/or its affiliates that have not yet occurred. However, based on experience,
the Fund expects the risk of loss to be remote.
See the Prospectus and Statement of Additional Information for a description of
the Fund's investment objective.
In preparing the Fund's financial statements in accordance with accounting
principles generally accepted in the United States of America ("GAAP"),
estimates or assumptions (which could differ from actual results) may be used
that affect reported amounts and disclosures. The following policies were
consistently followed by the Fund, in accordance with GAAP.
Multiple class operations and expenses: The Fund currently offers four classes
of shares, each with a public offering price that reflects different sales
charges, if any, and expense levels. Currently all share classes are closed to
new investors. Income, non-class specific expenses and realized and unrealized
gains and losses, are allocated daily to each class, based upon the value of
shares outstanding method as permitted under Rule 18f-3 of the 1940 Act. Each
class bears its own specific expenses as well as a portion of general, common
expenses.
Security valuations: Fund investments traded on an exchange are valued at the
closing price on the day of valuation on the exchange where the security is
principally traded. With respect to securities traded on the NASDAQ INMS, such
closing price may be the last reported sales price or the NASDAQ Official
Closing Price.
Securities traded in the over-the-counter market and listed securities for
which no sale was reported on that date are valued at the last quoted bid
price.
Other securities for which quotations are not readily available are valued at
fair value determined in good faith, in accordance with procedures established
by and, under the supervision of the Board of Trustees and the Fund's Valuation
Committee.
Cash: The Fund may leave cash overnight in its cash account with the custodian,
Investors Bank & Trust Company ("IBT"). IBT has been contracted on behalf of
the Fund to invest the excess cash into a savings account, which at October 31,
2003, was paying an interest rate of 0.75%.
Security transactions and investment income: Security transactions are recorded
on the trade date. Security gains and losses are calculated on the specific
identification basis. Dividend income is recorded on the ex-dividend date.
Interest income, including accretion of discounts and amortization of premiums,
is recorded on the accrual basis commencing on the settlement date.
Options contracts: The Fund may enter into options contracts to manage exposure
to market fluctuations. Option contracts are valued at the average of the bid
and ask ("Mean Quote") established each day at the close of the board of trade
or exchange on which they are traded. The primary risks associated with options
are imperfect correlation between the change in value of the securities held
and the prices of options; the possibility of an illiquid market and inability
of the counterparty to meet the contract terms. When the Fund writes a covered
call or put option, an amount equal to the premium received by the Fund is
included in the Fund's Statement of Assets and Liabilities as an asset and as
an equivalent liability. The amount of the liability is subsequently
marked-to-market to reflect the current value of the option written.
The underlying face amounts of open contracts at October 31, 2003, are listed
in the Schedule of Investments.
Substantially all the Fund's common stocks are memo pledged as collateral by
the custodian for the listed short index option contracts written by the Fund.
The custodian uses the escrow receipt depository of the Options Clearing
Corporation ("OCC") to effect pledging while maintaining custody of the stock
positions, rather than delivering them to broker-dealers. The OCC guarantees
the obligations of the contracts that they clear are fulfilled.
Transactions in written call and put options were as follows:
Premium Contracts*
------------ -----------
Balance at 10/31/2002 $ 1,670 727
Sales 14,258 5,236
Closing Buys (11,695) (4,461)
Expirations (1,634) (864)
------- ------
Balance at 10/31/2003 $ 2,599 638
======= ======
*Contracts not in thousands
IDEX Mutual Funds Annual Report 2003
IDEX Protected Principal Stock 13
IDEX Protected Principal Stock
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 1-(continued)
IDEX Protected Principal Stock Guarantee: The Fund's investment adviser,
AEGON/Transamerica Fund Advisers, Inc. ("ATFA"), guarantees shareholders a
Guaranteed Amount five years after the end of the Offering Period. The
Guaranteed Amount will be no less than the value of that shareholder's account
on the Investment Date, less extraordinary charges, provided that shareholders
have reinvested all dividends and distributions in additional shares and have
redeemed no shares ("Guarantee"). Please see the Prospectus and the Statement
of Additional Information for further information on the Guarantee.
Dividend distributions: Distributions to shareholders are recorded on the
ex-dividend date and are determined in accordance with Federal income tax
regulations which may differ from GAAP.
NOTE 2. RELATED PARTY TRANSACTIONS
ATFA is the Fund's investment adviser. AEGON/Transamerica Fund Services, Inc.
("ATFS") is the Fund's administrator. AFSG Securities Corp. ("AFSG") is the
Fund's distributor/principal underwriter. AEGON/Transamerica Investor Services,
Inc. ("ATIS") is the 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. AUSA and WRL are wholly owned indirect
subsidiaries of AEGON NV, a Netherlands corporation.
Investment advisory fees: The Fund pays management fees to ATFA based on
average daily net assets ("ANA") at the following stated break points:
1.30% of the first $100 million of ANA
1.25% of ANA over $100 million
ATFA currently voluntarily waives its advisory fee and will reimburse the Fund
to the extent that operating expenses, excluding 12b-1 fees, exceed the
following stated annual limit:
1.90% Expense Limit
If total fund expenses fall below the annual expense limitations agreed to by
the adviser within the succeeding three years, the Fund may be required to pay
the advisor a portion or all of the waived advisory fees.
Advisory Fee Available for
Waived Recapture Through
-------------- ------------------
Fiscal Year 2003 $ 9 10/31/2006
Fiscal Year 2002 85 10/31/2005
Distribution and service fees: The Fund has a 12b-1 distribution plan under the
1940 Act pursuant to which an annual fee, based on average daily net assets, is
paid to the distributor for various disbursements such as broker-dealer account
servicing fees and other promotional expenses of the Fund. The 12b-1 fee for
the Fund is comprised of a 0.25% service fee and the remaining amount is an
asset-based sales charge/distribution fee. The Fund is authorized under the
12b-1 plan to pay fees on each class up to the following limits:
Class A 0.35%
Class B 1.00%
Class C 1.00%
Class M 0.90%
Underwriter commissions relate to front-end sales charges imposed for Class A
and M shares and contingent deferred sales charges from Classes B, M and
certain A share redemptions. For the year ended October 31, 2003, the
underwriter commissions were as follows:
Received by Underwriter $ -
Retained by Underwriter -
Contingent Sales Charges 182
Administrative services: The Fund has entered into an agreement with ATFS for
financial and legal fund administration services, which include such items as
compliance, expenses, financial statements and other reporting, distributions,
tax returns, prospectus preparation, board of trustees meeting support and
other legal matters. Transfer agent fees are reflected separately from
Administration fees on the Statement of Operations. The Legal fees on the
Statement of Operations are for fees paid to external legal counsel. ATFS
provides its services to the Fund at a cost and is reimbursed monthly.
Transfer agent fees: The Fund incurs ATIS annual per-account charges (not in
thousands) of $20.00 for each open shareholder account and $1.63 for each
closed account maintained, and certain out of pocket expenses.
Deferred compensation plan: Each eligible Fund Trustee may elect participation
in the Deferred Compensation Plan ("the Plan"). Under the Plan, such Trustees
may defer payment of a percentage of their total fees earned as a Fund Trustee.
These deferred amounts may be invested in any IDEX Fund. At October 31, 2003,
the value of invested plan amounts was $1. Invested plan amounts and the total
liability for deferred compensation to the Trustees under the Plan at October
31, 2003, are included in Net assets in the accompanying Statement of Assets
and Liabilities.
NOTE 3. INVESTMENT TRANSACTIONS
The cost of securities purchased and proceeds from securities sold (excluding
short-term securities) for the year ended October 31, 2003, are as follows:
Purchases of securities:
Long-Term excluding U.S. Government $ 2,229
U.S. Government 39
Proceeds from maturities and sales of securities:
Long-Term excluding U.S. Government $ 11,166
U.S. Government 109
IDEX Mutual Funds Annual Report 2003
IDEX Protected Principal Stock 14
IDEX Protected Principal Stock
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 4. FEDERAL INCOME TAX MATTERS
The Fund has not made any provision for federal income or excise taxes due to
its policy to distribute all of its taxable income and capital gains to its
shareholders and otherwise qualify as a regulated investment company under the
Internal Revenue Code. Income and capital gain distributions are determined in
accordance with income tax regulations, which may differ from GAAP. These
differences are primarily due to differing treatments for items including, but
not limited to, wash sales, net operating losses and capital loss
carryforwards.
Reclassifications between Undistributed net investment income (loss),
Undistributed net realized capital gains (loss) and Shares of beneficial
interest are made to reflect income and gains available for distribution under
federal tax regulations. Results of operations and net assets are not effected
by these reclassifications. Dividend income is recorded at management's
estimate of the income included in distributions from the REIT investments.
Distributions received in excess of this estimated amount are recorded as a
reduction of the cost of investments. The actual amounts of income, return of
capital, and capital gains are only determined by each REIT after the fiscal
year-end, and may differ from the estimated amounts. These reclassifications
are as follows:
Shares of beneficial interest, unlimited
shares authorized $ (793)
Undistributed net investment income (loss) 685
Accumulated net realized gain (loss) from
investment securities 108
The tax character of distributions paid may differ from the character of
distributions shown in the Statements of Changes in Net Assets
primarily due to short-term gains being treated as ordinary income for tax
purposes. The tax character of distributions paid during 2002 and 2003 was as
follows:
2002 Distributions paid from:
Ordinary income $ -
Long-term capital gains -
2003 Distributions paid from:
Ordinary income $ 1,581
Long-term capital gains 3,442
The tax basis components of distributable earnings as of October 31, 2003, are
as follows:
Undistributed Ordinary Income $ -
========
Undistributed Long-term Capital Gains $ -
========
Capital Loss Carryforward $ (4,710)
========
Net Unrealized Appreciation (Depreciation) $ 5,817
========
The capital loss carryforwards are available to offset future realized capital
gains through the periods listed:
Capital Loss
Carryforward Available through
- -------------- ------------------
$ 4,710 October 31, 2011
The aggregate cost of investments and composition of unrealized appreciation
(depreciation) for federal income tax purposes as of October 31, 2003, are as
follows:
Federal Tax Cost Basis $ 61,560
========
Unrealized Appreciation $ 9,071
Unrealized (Depreciation) (3,254)
--------
Net Unrealized Appreciation (Depreciation) $ 5,817
========
IDEX Mutual Funds Annual Report 2003
IDEX Protected Principal Stock 15
- --------------------------------------------------------------------------------
Report of Independent Certified Public Accountants
To the Board of Trustees and Shareholders of
IDEX Protected Principal Stock
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of IDEX Protected Principal Stock
(the "Fund") (one of the portfolios constituting the IDEX Mutual Funds) at
October 31, 2003, and the results of its operations, the changes in its net
assets and the financial highlights for each of the periods indicated, in
conformity with accounting principles generally accepted in the United States
of America. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Fund's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with auditing standards generally accepted in the
United States of America, which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits, which included confirmation of securities at October 31, 2003 by
correspondence with the custodian and brokers, provide a reasonable basis for
our opinion.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Tampa, Florida
December 18, 2003
IDEX Mutual Funds Annual Report 2003
IDEX Protected Principal Stock 16
IDEX Salomon All Cap
- --------------------------------------------------------------------------------
MARKET ENVIRONMENT
In the last fifteen months, we have believed that the unprecedented amount of
monetary and fiscal stimulus would lift the U.S. economy. If we look back
several years, the concerns of the administration have been much different than
twenty to twenty five years ago. Then the primary focus was on taming inflation
and the appointment of Paul Volcker as Chairman of the Federal Reserve Board
("Fed") signaled a concerted effort in this regard would be waged. Conversely,
in the last few years, the concerns have been about staving off the threat of
deflation. In fact, on November 21, 2002, Ben Bernanke, a Fed Governor gave a
speech titled "Deflation: Making Sure It Doesn't Happen Here". Given the tax
cuts of 2001 and 2003 and with the monetary authorities well along the road to
cutting interest rates a record thirteen times, it seemed to us that our
government was going to "throw everything but the kitchen sink" at the economy
in its attempt to revive growth. As a result, our focus has been on those
companies likely to benefit from an economic recovery. That emphasis hurt our
performance in the last quarter of fiscal 2002, when the market went into a
free fall, but has been quite helpful in the last twelve months.
Our investment approach also is reflected in our sector weights within the
Russell 3000. We have been overweight information technology ("IT"), consumer
discretionary, and materials believing these sectors of the market are quite
sensitive to the level of economic activity.
PERFORMANCE
For the year ended October 31, 2003, IDEX Salomon All Cap returned 34.91%. By
comparison its benchmark, the Russell 3000 Index ("Russell 3000") returned
23.69%.
STRATEGY REVIEW
Significant purchases during the last fiscal year in IT included Intel
Corporation, Taiwan Semiconductor Manufacturing Company Ltd., Solectron
Corporation, Motorola, Inc., Agilent Technologies, Inc., Hewlett-Packard
Company, Nokia Oyj, IKON Office Solutions, Inc., and Lattice Semiconductor
Corporation. Principal new or increased holdings in consumer discretionary
included Liberty Media Corporation, The News Corporation Limited, Hasbro Inc.,
Comcast Corporation, Costco Wholesale Corporation, Sabre Holdings Corporation,
Metro-Goldwyn-Mayer Inc., and The Gap, Inc.
Our purchases within materials during the year included Newmont Mining
Corporation, Georgia-Pacific Corporation, The Dow Chemical Company,
Weyerhaeuser Company, Cabot Corporation, USX-U.S. Steel Group, Nucor
Corporation, and Allegheny Technologies Incorporated. Although we have been
underweight financials, principal purchases included The Bank of New York
Company, Inc., Merrill Lynch & Co., Inc., Morgan Stanley, State Street
Corporation, Ambac Financial Group, Inc., MBIA, Inc., Chubb Corporation, The
Hartford Financial Services Group, Inc., and American International Group, Inc.
Although we have been underweight healthcare, we recently decided to increase
our holdings in the large pharmaceuticals companies including Johnson &
Johnson, Abbott Laboratories, Pfizer Inc., Wyeth, Bristol-Myers Squibb Co., and
Merck & C., Inc.
Other significant purchases or additions to existing positions during the last
year included The Boeing Company, Raytheon Company, SBC Communications Inc.,
McKesson HBOC, Inc., Caterpillar, Inc., Radian Group, Inc., Safeway Inc., Waste
Management, Inc., and The Williams Companies, Inc.
Principal sales in the year just completed included McDonald's Corporation,
Agere Systems Inc., Countrywide Credit Industries, Inc., Cablevision Systems
Corporation, LSI Logic Corporation, ICN Pharmaceuticals, Inc., The St. Paul
Companies, Inc., and Maxtor Corporation.
/s/ John G. Goode
John G. Goode
/s/ Peter J. Hable
Peter J. Hable
Co-Fund Managers
Salomon Brothers Asset Management Inc.
IDEX Mutual Funds Annual Report 2003
IDEX Salomon All Cap 1
IDEX Salomon All Cap
- --------------------------------------------------------------------------------
Comparison of change in value of $10,000 investment in Class A shares and its
comparative index.
Growth of $10,000
Inception of 3/1/99 through 10/31/03
Investment less sales charges - $9,452
[The following table was depicted as a mountain chart in the printed material.]
DATE Class A Russell 3000
- ------------------ ---------------- ------------
3/1/1999 9,452 10,000
3/31/1999 9,716 10,367
6/30/1999 11,272 11,166
9/30/1999 10,805 10,431
12/31/1999 12,335 12,122
3/31/2000 13,903 12,676
6/30/2000 14,270 12,238
9/30/2000 14,435 12,328
12/31/2000 14,441 11,218
3/31/2001 14,427 9,855
6/30/2001 15,186 10,533
9/30/2001 13,170 8,887
12/31/2001 14,629 9,933
3/31/2002 14,637 10,029
6/30/2002 12,194 8,716
9/30/2002 9,552 7,214
12/31/2002 10,698 7,793
3/31/2003 10,150 7,556
6/30/2003 12,483 8,783
9/30/2003 13,141 9,084
10/31/2003 13,908 9,634
Average Annual Total Return for Periods Ended 10/31/03
- --------------------------------------------------------------------------------
From Inception
1 year Inception Date
----------- ----------- ----------
Class A (NAV) 34.91% 8.62% 3/1/99
Class A (POP) 27.49% 7.32% 3/1/99
Russell 30001 23.69% -0.79% 3/1/99
- --------------- ----- ------ ------
Class B (NAV) 34.23% 7.93% 3/1/99
Class B (POP) 29.23% 7.76% 3/1/99
- --------------- ----- ------ ------
Class C (NAV) 34.23% 5.20% 11/1/99
- --------------- ----- ------ -------
Class L (NAV) - 31.87% 11/11/02
Class L (POP) - 29.87% 11/11/02
- --------------- ----- ------ --------
Class M (NAV) 34.39% 8.04% 3/1/99
Class M (POP) 32.04% 7.81% 3/1/99
- --------------- ----- ------ --------
NOTES
(1) The Russell 3000 (Russell 3000) 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 Micropal(R)(C) 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 shares, (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 a "non-diversified" fund may be subject to specific risks such
as susceptibility to single economic political, or regulatory events, and may
be subject to greater loss than investments in a diversified fund.
Periods less than 1 year represent total return and are not annualized.
This material must be preceded or accompanied by a current prospectus, which
includes specific contents regarding the investment objectives and policies of
this fund.
IDEX Mutual Funds Annual Report 2003
IDEX Salomon All Cap 2
IDEX Salomon All Cap
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
At October 31, 2003
(all amounts except share amounts in thousands)
Shares Value
-------------------- --------------
PREFERRED STOCKS (1.2%)
Motion Pictures (1.2%)
News Corporation Limited (The)-ADR 209,000 $ 6,166
---------
Total Preferred Stocks (cost: $5,838) 6,166
---------
COMMON STOCKS (80.2%)
Aerospace (0.5%)
Boeing Company (The) 70,000 2,694
Amusement & Recreation Services (1.2%)
Disney (Walt) Company (The) 263,900 5,975
Apparel & Accessory Stores (0.5%)
Gap, Inc. (The) 119,400 2,278
Automotive (0.9%)
Honeywell International Inc. 140,000 4,285
Business Services (0.7%)
Catalina Marketing Corporation (a)(b) 70,500 1,244
NDCHealth Corporation 91,100 2,404
Chemicals & Allied Products (4.4%)
Cabot Corporation 275,000 7,673
Crompton Corporation 354,700 1,901
Dow Chemical Company (The) 125,100 4,715
Olin Corporation 138,700 2,415
Potash Corporation of Saskatchewan Inc. 67,000 5,275
Commercial Banks (2.6%)
Bank One Corporation 100,000 4,245
Mitsubishi Tokyo Financial Group, Inc. 706 5,078
State Street Corporation 69,400 3,634
Communication (3.1%)
Comcast Corporation-Special Class A (a) 265,000 8,644
Liberty Media Corporation-Class A (a) 680,300 6,864
Communications Equipment (4.4%)
Motorola, Inc. (b) 550,000 7,442
Nokia Oyj-ADR 400,000 6,796
Telefonaktiebolaget LM Ericsson-
ADR (a)(b) 464,660 7,936
Computer & Data Processing Services (4.4%)
IMS Health Incorporated 100,000 2,353
Micromuse Inc. (a) 618,000 4,975
RealNetworks, Inc. (a) 710,000 4,722
Sabre Holdings Corporation 175,500 3,845
Unisys Corporation (a) 414,700 6,370
Computer & Office Equipment (2.5%)
3Com Corporation (a) 958,700 6,903
Hewlett-Packard Company 249,900 5,575
Drug Stores & Proprietary Stores (0.0%)
Medco Health Solutions, Inc. (a) 6,548 217
Electronic & Other Electric Equipment (0.3%)
Sony Corporation 50,000 $ 1,743
Electronic Components & Accessories (4.9%)
Intel Corporation 224,900 7,433
Lattice Semiconductor Corporation (a) 213,000 1,661
Solectron Corporation (a) 1,350,000 7,479
Taiwan Semiconductor Manufacturing
Company Ltd.-ADR (a)(b) 450,000 4,977
Texas Instruments Incorporated 100,000 2,892
Environmental Services (1.1%)
Waste Management, Inc. 210,000 5,443
Fabricated Metal Products (0.1%)
Shaw Group Inc. (The) (a)(b) 47,800 652
Food & Kindred Products (0.7%)
Archer Daniels Midland Co. 250,000 3,588
Food Stores (0.7%)
Safeway Inc. (a) 175,000 3,693
Gas Production & Distribution (0.8%)
Williams Companies, Inc. (The) (b) 400,000 4,080
Health Services (0.5%)
Enzo Biochemical, Inc. (a)(b) 125,000 2,313
Holding & Other Investment Offices (0.2%)
Friedman, Billings, Ramsey Group, Inc. 63,200 1,259
Hotels & Other Lodging Places (0.4%)
Extended Stay America, Inc. (a) 135,300 1,989
Industrial Machinery & Equipment (1.4%)
Caterpillar, Inc. 29,500 2,162
Deere & Company 40,000 2,425
Ingersoll-Rand Company-Class A 40,300 2,434
Instruments & Related Products (3.0%)
Agilent Technologies, Inc. (a) 297,900 7,424
Eastman Kodak Company 120,200 2,936
Raytheon Company 175,400 4,645
Insurance (5.6%)
Ambac Financial Group, Inc. 82,900 5,864
Chubb Corporation 81,200 5,425
CNA Surety Corporation (a) 237,700 2,593
MBIA, Inc. 100,000 5,961
MGIC Investment Corporation 67,000 3,438
Radian Group, Inc. 90,000 4,761
Insurance Agents, Brokers & Service (0.9%)
Hartford Financial Services Group, Inc. (The) 64,100 3,519
Marsh & McLennan Companies, Inc. 28,000 1,197
Lumber & Other Building Materials (0.9%)
Home Depot, Inc. (The) 116,000 4,300
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Salomon All Cap 3
IDEX Salomon All Cap
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Shares Value
-------------------- --------------
Lumber & Wood Products (1.9%)
Georgia-Pacific Corporation (b) 150,000 $ 3,942
Weyerhaeuser Company 92,100 5,547
Manufacturing Industries (1.3%)
Hasbro Inc. 311,900 6,799
Metal Mining (1.4%)
Newmont Mining Corporation (b) 160,900 7,044
Motion Pictures (3.1%)
Metro-Goldwyn-Mayer Inc. (a)(b) 240,292 3,835
News Corporation Limited (The)-ADR (b) 149,900 5,344
Time Warner Inc. (a) 414,800 6,342
Oil & Gas Extraction (1.8%)
Anadarko Petroleum Corporation 73,400 3,202
GlobalSantaFe Corporation (b) 138,200 3,111
Schlumberger Limited 57,300 2,691
Paper & Allied Products (0.6%)
Smurfit-Stone Container Corporation (a) 159,300 2,469
St. Joe Company (The) 19,500 644
Petroleum Refining (1.4%)
Amerada Hess Corporation 22,700 1,172
ChevronTexaco Corporation 76,300 5,669
Pharmaceuticals (9.7%)
Abbott Laboratories 170,000 7,246
Aphton Corporation (a)(b) 173,000 1,190
Bristol-Myers Squibb Co. 210,000 5,328
Genelabs Technologies, Inc. (a) 274,500 461
Johnson & Johnson 160,000 8,053
McKesson HBOC, Inc. 24,000 726
Merck & Co., Inc. 90,000 3,983
Novartis AG-ADR 111,100 4,263
Pfizer Inc. 275,000 8,690
Schering-Plough Corporation 137,400 2,098
Wyeth 129,300 5,707
XOMA Ltd. (a) 178,600 1,338
Primary Metal Industries (3.0%)
Alcoa Inc. 188,000 5,935
Allegheny Technologies Incorporated 326,300 2,496
Brush Engineered Materials Inc. (a) 92,500 1,178
Engelhard Corporation 100,000 2,858
Nucor Corporation (b) 47,000 2,577
Restaurants (1.0%)
McDonald's Corporation 209,700 5,245
Security & Commodity Brokers (3.2%)
American Express Company 154,000 7,227
Merrill Lynch & Co., Inc. 86,000 5,091
Morgan Stanley 72,900 4,000
Telecommunications (2.9%)
Nippon Telegraph and Telephone
Corporation-ADR 150,000 $ 3,372
SBC Communications Inc. 210,700 5,053
Vodafone Group PLC-ADR (b) 288,800 6,108
Transportation Equipment (0.2%)
Fleetwood Enterprises, Inc. (a)(b) 103,700 1,045
Variety Stores (1.2%)
Costco Wholesale Corporation (a)(b) 175,000 6,190
Wholesale Trade Durable Goods (0.8%)
IKON Office Solutions, Inc. 468,300 3,934
---------
Total Common Stocks (cost: $373,305)
403,947
---------
Principal Value
----------- ------------
SECURITY LENDING COLLATERAL (9.3%)
Debt (8.2%)
Bank Notes (1.0%)
Canadian Imperial Bank of Commerce
1.12%, due 11/04/2003 $ 2,043 $ 2,043
Fleet National Bank
1.06%, due 01/21/2004 2,862 2,862
Euro Dollar Terms (4.6%)
Bank of Montreal
1.03%, due 11/13/2003 1,635 1,635
1.04%, due 11/14/2003 1,436 1,436
Bank of Nova Scotia (The)
1.06%, due 11/12/2003 817 817
Bank of Scotland
1.04%, due 11/14/2003 1,635 1,635
Citigroup Inc.
1.08%, due 01/05/2004 2,452 2,452
Credit Agricole Indosuez
1.08%, due 01/06/2004 1,798 1,798
Den Danske Bank
1.04%, due 11/10/2003 817 817
1.08%, due 01/20/2004 2,452 2,452
Royal Bank of Canada
1.04%, due 11/24/2003 2,043 2,043
1.06%, due 12/08/2003 817 817
Royal Bank of Scotland Group PLC (The)
1.08%, due 01/15/2004 2,452 2,452
SouthTrust Bank
1.08%, due 01/16/2004 2,452 2,452
Wells Fargo & Company
1.04%, due 11/20/2003 2,452 2,452
Promissory Notes (0.6%)
Goldman Sachs Group, Inc. (The)
1.15%, due 11/03/2003 2,861 2,861
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Salomon All Cap 4
IDEX Salomon All Cap
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Principal Value
----------- -----------
Repurchase Agreements (2.0%) (c)
Goldman Sachs Group, Inc. (The)
1.10% Repurchase Agreement dated
10/31/2003 to be repurchased at $817
on 11/03/2003 $ 817 $ 817
Merrill Lynch & Co., Inc.
1.10% Repurchase Agreement dated
10/31/2003 to be repurchased at $9,402
on 11/03/2003 9,401 9,401
Shares Value
---------- -----------
Investment Companies (1.1%)
Money Market Funds (1.1%)
Merrimac Cash Series Fund-
Premium Class
1-day yield of 0.97% 5,721,750 $ 5,722
Total Security Lending Collateral (cost: $46,964) 46,964
---------
Total Investment Securities (cost: $420,269) $ 457,077
=========
SUMMARY:
Investments, at value 90.7% $ 457,077
Other assets in excess of liabilities 9.3% 46,765
--------- ---------
Net assets 100.0% $ 503,842
========= =========
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 (see Note
1). The value at October 31, 2003, of all securities on loan is $44,895.
(c) Cash collateral for the Repurchase Agreements, valued at $10,422, 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
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Salomon All Cap 5
IDEX Salomon All Cap
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
At October 31, 2003
(all amounts except per share amounts in thousands)
Assets:
Investment securities, at value (cost: $420,269)
(including $44,895 of securities loaned) $ 457,077
Cash 93,992
Receivables:
Investment securities sold 69
Shares of beneficial interest sold 2,398
Interest 17
Dividends 404
Dividend reclaims receivable 2
Other 65
---------
554,024
---------
Liabilities:
Investment securities purchased 1,526
Accounts payable and accrued liabilities:
Shares of beneficial interest redeemed 676
Management and advisory fees 387
Distribution fees 264
Transfer agent fees 169
Payable for securities on loan 46,964
Other 196
---------
50,182
---------
Net Assets $ 503,842
=========
Net Assets Consist of:
Shares of beneficial interest, unlimited shares authorized $ 542,113
Accumulated net investment income (loss) (6)
Accumulated net realized gain (loss) from investment
securities and foreign currency transactions (75,069)
Net unrealized appreciation (depreciation) on investment
securities 36,804
---------
Net Assets $ 503,842
=========
Shares Outstanding:
Class A 19,494
Class B 11,686
Class C 2,481
Class L 188
Class M 2,767
Net Asset Value Per Share:
Class A $ 13.95
Class B 13.53
Class C 13.53
Class L 13.53
Class M 13.60
Offering Price Per Share (a):
Class A $ 14.76
Class M 13.74
(a) 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.
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the year ended October 31, 2003
(all amounts in thousands)
Investment Income:
Interest $ 76
Dividends 3,714
Income from loaned securities-net 63
Less withholding taxes on foreign dividends (39)
---------
3,814
---------
Expenses:
Management and advisory fees 2,554
Transfer agent fees 1,159
Printing and shareholder reports 187
Custody fees 42
Administration fees 31
Legal fees 18
Auditing and accounting fees 21
Trustees fees 24
Registration fees 79
Other 14
Distribution and service fees:
Class A 395
Class B 1,374
Class C 327
Class L 9
Class M 320
---------
Total expenses 6,554
Less:
Advisory fee waiver (296)
---------
Net expenses 6,258
---------
Net Investment Income (Loss) (2,444)
---------
Net Realized Gain (Loss) from:
Investment securities (14,259)
Foreign currency transactions (37)
---------
(14,296)
---------
Net Increase (Decrease) in Unrealized Appreciation
(Depreciation) on:
Investment securities 111,856
---------
Net Gain (Loss) on Investment Securities and Foreign
Currency Transactions 97,560
---------
Net Increase (Decrease) in Net Assets Resulting from
Operations $ 95,116
=========
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Salomon All Cap 6
IDEX Salomon All Cap
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended
(all amounts in thousands)
October 31, October 31,
2003 2002
----------- -----------
Increase (Decrease) In Net Assets From:
Operations:
Net investment income (loss) $ (2,444) $ (2,108)
Net realized gain (loss) from investment
securities and foreign currency
transactions (14,296) (57,945)
Net unrealized appreciation
(depreciation) on investment
securities 111,856 (41,773)
--------- ---------
95,116 (101,826)
--------- ---------
Distributions to Shareholders:
From net investment income:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
--------- ---------
- -
--------- ---------
From net realized gains:
Class A - (816)
Class B - (1,809)
Class C - (508)
Class L - -
Class M - (573)
--------- ---------
- (3,706)
--------- ---------
Capital Share Transactions:
Proceeds from shares sold:
Class A 202,927 43,149
Class B 26,289 76,368
Class C 4,158 26,084
Class L 2,385 -
Class M 2,540 17,215
--------- ---------
238,299 162,816
--------- ---------
Dividends and distributions reinvested:
Class A - 753
Class B - 1,663
Class C - 490
Class L - -
Class M - 520
--------- ---------
- 3,426
--------- ---------
Cost of shares redeemed:
Class A (23,992) (41,366)
Class B (38,674) (61,846)
Class C (15,143) (22,540)
Class L (122) -
Class M (12,598) (18,060)
--------- ---------
(90,529) (143,812)
--------- ---------
147,770 22,430
--------- ---------
Net increase (decrease) in net assets 242,886 (83,102)
--------- ---------
Net Assets:
Beginning of year 260,956 344,058
--------- ---------
End of year $ 503,842 $ 260,956
========= =========
Accumulated Net Investment Income (Loss) $ (6) $ (9)
========= =========
Share Activity:
Shares issued:
Class A 16,039 3,144
Class B 2,195 5,624
Class C 367 1,918
Class L 198 -
Class M 212 1,257
--------- ---------
19,011 11,943
--------- ---------
Shares issued-reinvested from distributions:
Class A - 53
Class B - 118
Class C - 35
Class L - -
Class M - 37
--------- ---------
- 243
--------- ---------
Shares redeemed:
Class A (2,110) (3,337)
Class B (3,473) (5,247)
Class C (1,383) (1,913)
Class L (10) -
Class M (1,147) (1,510)
--------- ---------
(8,123) (12,007)
--------- ---------
Net increase (decrease) in shares
outstanding 10,888 179
========= =========
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Salomon All Cap 7
IDEX Salomon All Cap
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share of beneficial interest outstanding throughout each period
------------------------------------------------------------------------------------------------------------
Investment Operations Distributions
------------------------------------------ -------------------------------------
Net Asset Net Asset
For the Value, Net Net Realized From Net From Net Value,
Period Beginning Investment and Unrealized Total Investment Realized Total End
Ended (d)(g) of Period Income (Loss) Gain (Loss) Operations Income Gains Distributions of Period
- ------------------------------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 $ 10.34 $ (0.04) $ 3.65 $ 3.61 $ - $ - $ - $ 13.95
10/31/2002 13.63 - (3.15) (3.15) - (0.14) (0.14) 10.34
10/31/2001 15.51 0.12 (1.58) (1.46) - (0.42) (0.42) 13.63
10/31/2000 11.70 0.08 3.92 4.00 - (0.19) (0.19) 15.51
10/31/1999 10.00 0.02 1.68 1.70 - - - 11.70
- ------------------------------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 10.08 (0.12) 3.57 3.45 - - - 13.53
10/31/2002 13.41 (0.10) (3.09) (3.19) - (0.14) (0.14) 10.08
10/31/2001 15.36 0.02 (1.55) (1.53) - (0.42) (0.42) 13.41
10/31/2000 11.66 (0.03) 3.92 3.89 - (0.19) (0.19) 15.36
10/31/1999 10.00 (0.02) 1.68 1.66 - - - 11.66
- ------------------------------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 10.08 (0.12) 3.57 3.45 - - - 13.53
10/31/2002 13.42 (0.10) (3.10) (3.20) - (0.14) (0.14) 10.08
10/31/2001 15.36 0.02 (1.54) (1.52) - (0.42) (0.42) 13.42
10/31/2000 11.66 (0.03) 3.92 3.89 - (0.19) (0.19) 15.36
- ------------------------------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 10.26 (0.12) 3.39 3.27 - - - 13.53
- ------------------------------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 10.12 (0.10) 3.58 3.48 - - - 13.60
10/31/2002 13.44 (0.08) (3.10) (3.18) - (0.14) (0.14) 10.12
10/31/2001 15.38 0.04 (1.56) (1.52) - (0.42) (0.42) 13.44
10/31/2000 11.67 (0.02) 3.92 3.90 - (0.19) (0.19) 15.38
10/31/1999 10.00 (0.01) 1.68 1.67 - - - 11.67
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
-----------------------------------------------------------------------
Ratio of Expenses
Net Assets, to Average Net Investment
For the End of Net Assets (a) Income (Loss) Portfolio
Period Total Period ----------------------- to Average Turnover
Ended (g) Return (c) (000's) Net (e) Total (f) Net Assets (a) Rate (b)
- ----------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 34.91% $ 271,958 1.55% 1.64% (0.36)% 30%
10/31/2002 (23.44) 57,528 1.55 1.65 (0.03) 162
10/31/2001 (9.49) 77,791 1.58 1.68 0.75 82
10/31/2000 34.50 25,575 1.55 2.41 0.45 91
10/31/1999 17.03 1,880 1.55 8.85 0.35 83
- ----------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 34.23 158,147 2.20 2.29 (1.01) 30
10/31/2002 (24.11) 130,709 2.20 2.30 (0.68) 162
10/31/2001 (10.09) 167,214 2.23 2.33 0.10 82
10/31/2000 33.72 38,203 2.20 3.06 (0.20) 91
10/31/1999 16.60 1,571 2.20 9.50 (0.30) 83
- ----------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 34.23 33,572 2.20 2.29 (1.01) 30
10/31/2002 (24.11) 35,248 2.20 2.30 (0.68) 162
10/31/2001 (10.09) 46,369 2.23 2.33 0.10 82
10/31/2000 33.72 10,675 2.20 3.06 (0.20) 91
- ----------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 31.87 2,547 2.20 2.29 (1.01) 30
- ----------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 34.39 37,618 2.10 2.19 (0.91) 30
10/31/2002 (24.00) 37,471 2.10 2.20 (0.58) 162
10/31/2001 (10.00) 52,684 2.13 2.23 0.20 82
10/31/2000 33.84 10,785 2.10 2.96 (0.10) 91
10/31/1999 16.67 728 2.10 9.40 (0.20) 83
- ----------------------------------------------------------------------------------------------------------------
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Salomon All Cap 8
IDEX Salomon All Cap
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (continued)
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 are not annualized.
(d) Per share information is calculated based on average number of shares
outstanding for the periods ended 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 (see note 2).
(f) Ratio of Total Expenses to Average Net Assets includes all expenses before
fee waivers and reimbursements by the investment adviser.
(g) IDEX Salomon All Cap ("the Fund") commenced operations on March 1, 1999.
The inception date for the Fund's offering of share classes C and L are as
follows:
Class C - November 1, 1999
Class L - November 11, 2002
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Salomon All Cap 9
IDEX Salomon All Cap
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
At October 31, 2003
(all amounts in thousands)
NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
IDEX Mutual Funds is a Massachusetts business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company. IDEX Salomon All Cap ("the Fund"), part of IDEX
Mutual Funds, began operations on March 1, 1999. The fund is "non-diversified"
under the 1940 Act.
In the normal course of business, the Fund enters into contracts that contain a
variety of representations and warranties and which provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown, as this would involve future claims that may be made against the Fund
and/or its affiliates that have not yet occurred. However, based on experience,
the Fund expects the risk of loss to be remote.
See the Prospectus and Statement of Additional Information for a description of
the Fund's investment objective.
In preparing the Fund's financial statements in accordance with accounting
principles generally accepted in the United States of America ("GAAP"),
estimates or assumptions (which could differ from actual results) may be used
that affect reported amounts and disclosures. The following policies were
consistently followed by the Fund, in accordance with GAAP.
Multiple class operations and expenses: The Fund currently offers five classes
of shares, each with a public offering price that reflects different sales
charges, if any, and expense levels. Effective November 11, 2002, Class C and M
shares were closed to new investors. Income, non-class specific expenses and
realized and unrealized gains and losses, are allocated daily to each class,
based upon the value of shares outstanding method as permitted under Rule 18f-3
of the 1940 Act. Each class bears its own specific expenses as well as a
portion of general, common expenses.
Security valuations: Fund investments traded on an exchange are valued at the
closing price on the day of valuation on the exchange where the security is
principally traded. With respect to securities traded on the NASDAQ INMS, such
closing price may be the last reported sales price or the NASDAQ Official
Closing Price.
Securities traded in the over-the-counter market and listed securities for
which no sale was reported on that date are valued at the last quoted bid
price.
Debt securities are valued by independent pricing services; however, those that
mature in sixty days or less are valued at amortized cost, which approximates
market.
Other securities for which quotations are not readily available are valued at
fair value determined in good faith, in accordance with procedures established
by and, under the supervision of the Board of Trustees and the Fund's Valuation
Committee.
Cash: The Fund may leave cash overnight in its cash account with the custodian,
Investors Bank & Trust Company ("IBT"). IBT has been contracted on behalf of
the Fund to invest the excess cash into a savings account, which at October 31,
2003, was paying an interest rate of 0.75%.
Directed brokerage: The sub-adviser, to the extent consistent with the best
execution and usual commission rate policies and practices, may place security
transactions of the Fund with broker/dealers with which IDEX Mutual Funds has
established a Directed Brokerage Program. A Directed Brokerage Program is any
arrangement under which a broker/dealer applies a portion of the commissions
received by such broker/dealer on the security transactions to the Fund. In no
event will commissions paid by the Fund be used to pay expenses that would
otherwise be borne by any other funds within IDEX Mutual Funds, or by any other
party. Directed commissions during the year ended October 31, 2003, of $33 are
included in net realized gains in the Statement of Operations.
Securities lending: The Fund may lend securities to enhance fund earnings from
investing cash collateral received in making such loans to qualified borrowers
(typically broker/dealers). The Fund has engaged its custodian bank, IBT, as a
lending agent to administer its securities lending program. IBT earned $22 of
program net income for its services. When the Fund makes a security loan, it
receives cash collateral as protection against the risk that the borrower will
default on the loan, and records an asset for the cash invested collateral and
a liability for the return of the collateral.
Securities on loan are included in Investment securities at value on the
Statement of Assets and Liabilities and remain on the Schedule of Investments.
Loans of securities are required to be secured by collateral at least equal to
102% of the value of the securities at inception of the loan, and not less then
100% thereafter. The Fund may invest cash collateral in short-term money market
instruments including: U.S. Treasury Bills, U.S. agency obligations, commercial
paper, money market mutual funds, repurchase agreements and other highly rated,
liquid investments. During the life of securities loans, the collateral and
securities loaned remain subject to fluctuation in value. IBT marks to market
securities loaned and the collateral each business day. If additional
collateral is due (at least $1), IBT collects additional cash collateral from
the borrowers. Although securities loaned will be fully collateralized at all
times, IBT may experience delays in, or may be prevented from, recovering the
collateral on behalf of the Fund. The Fund may recall a loaned security
position at any time from the borrower through IBT. In the event the borrower
fails to timely return a recalled security, IBT may indemnify the Fund by
purchasing replacement securities for the Fund at its own expense and claiming
the collateral to fund such a purchase. IBT absorbs the loss if the collateral
value is not sufficient to cover the cost of the replacement securities. If
replacement securities are not available, IBT will credit the equivalent cash
value to the Fund.
IDEX Mutual Funds Annual Report 2003
IDEX Salomon All Cap 10
IDEX Salomon All Cap
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 1-(continued)
Income from securities lending is included in the Statement of Operations. The
amount of collateral and value of securities on loan are included in the
Statement of Assets and Liabilities as well as on the Schedule of Investments.
Security transactions and investment income: Security transactions are recorded
on the trade date. Security gains and losses are calculated on the specific
identification basis. Dividend income is recorded on the ex-dividend date or,
in the case of foreign securities, as soon as the Fund is informed of the
ex-dividend date. Interest income, including accretion of discounts and
amortization of premiums, is recorded on the accrual basis commencing on the
settlement date.
Dividend distributions: Distributions to shareholders are recorded on the
ex-dividend date and are determined in accordance with Federal income tax
regulations which may differ from GAAP.
NOTE 2. RELATED PARTY TRANSACTIONS
AEGON/Transamerica Fund Advisers, Inc. ("ATFA") is the Fund's investment
adviser. AEGON/Transamerica Fund Services, Inc. ("ATFS") is the Fund's
administrator. AFSG Securities Corp. ("AFSG") is the Fund's
distributor/principal underwriter. AEGON/Transamerica Investor Services, Inc.
("ATIS") is the 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. AUSA and WRL are wholly owned indirect
subsidiaries of AEGON NV, a Netherlands corporation.
The following schedule reflects the percentage of fund assets owned by
affiliated mutual funds (ie: through the assets allocation funds)
Net % of
Assets Net Assets
----------- -----------
IDEX Asset Allocation
Conservative Portfolio $ 14,701 3%
IDEX Asset Allocation Growth 49,465 10%
IDEX Asset Allocation Moderate
Growth 83,890 17%
IDEX Asset Allocation Moderate 56,598 11%
--
41%
==
Investment advisory fees: The Fund pays management fees to ATFA based on
average daily net assets ("ANA") at the following stated break points:
0.80% of the first $500 million of ANA
0.70% of ANA over $500 million
ATFA currently voluntarily waives its advisory fee and will reimburse the Fund
to the extent that operating expenses, excluding 12b-1 fees, exceed the
following stated annual limit:
1.20% Expense Limit
If total fund expenses fall below the annual expense limitations agreed to by
the adviser within the succeeding three years, the Fund may be required to pay
the advisor a portion or all of the waived advisory fees.
Distribution and service fees: The Fund has a 12b-1 distribution plan under the
1940 Act pursuant to which an annual fee, based on average daily net assets, is
paid to the distributor for various disbursements such as broker-dealer account
servicing fees and other promotional expenses of the Fund. The 12b-1 fee for
the Fund is comprised of a 0.25% service fee and the remaining amount is an
asset-based sales charge/distribution fee. The Fund is authorized under the
12b-1 plan to pay fees on each class up to the following limits:
Class A 0.35%
Class B 1.00%
Class C 1.00%
Class L 1.00%
Class M 0.90%
Underwriter commissions relate to front-end sales charges imposed for Class A
and M shares and contingent deferred sales charges from Classes B, L, M and
certain A share redemptions. For the year ended October 31, 2003, the
underwriter commissions were as follows:
Received by Underwriter $ 260
Retained by Underwriter 25
Contingent Sales Charges 576
Administrative services: The Fund has entered into an agreement with ATFS for
financial and legal fund administration services, which include such items as
compliance, expenses, financial statements and other reporting, distributions,
tax returns, prospectus preparation, board of trustees meeting support and
other legal matters. Transfer agent fees are reflected separately from
Administration fees on the Statement of Operations. The Legal fees on the
Statement of Operations are for fees paid to external legal counsel. ATFS
provides its services to the Fund at a cost and is reimbursed monthly.
Transfer agent fees: The Fund incurs ATIS annual per-account charges (not in
thousands) of $20.00 for each open shareholder account and $1.63 for each
closed account maintained, and certain out of pocket expenses.
Brokerage commissions: Brokerage commissions incurred on security transactions
placed with an affiliate of the sub-adviser for the year ended October 31,
2003, were $10.
IDEX Mutual Funds Annual Report 2003
IDEX Salomon All Cap 11
IDEX Salomon All Cap
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 2-(continued)
Deferred compensation plan: Each eligible Fund Trustee may elect participation
in the Deferred Compensation Plan ("the Plan"). Under the Plan, such Trustees
may defer payment of a percentage of their total fees earned as a Fund Trustee.
These deferred amounts may be invested in any IDEX Fund. At October 31, 2003,
the value of invested plan amounts was $11. Invested plan amounts and the total
liability for deferred compensation to the Trustees under the Plan at October
31, 2003, are included in Net assets in the accompanying Statement of Assets
and Liabilities.
NOTE 3. INVESTMENT TRANSACTIONS
The cost of securities purchased and proceeds from securities sold (excluding
short-term securities) for the year ended October 31, 2003, are as follows:
Purchases of securities:
Long-Term excluding U.S. Government $ 137,407
U.S. Government 1,489
Proceeds from maturities and sales of securities:
Long-Term excluding U.S. Government 86,945
U.S. Government 1,424
NOTE 4. FEDERAL INCOME TAX MATTERS
The Fund has not made any provision for federal income or excise taxes due to
its policy to distribute all of its taxable income and capital gains to its
shareholders and otherwise qualify as a regulated investment company under the
Internal Revenue Code. Income and capital gain distributions are determined in
accordance with income tax regulations, which may differ from GAAP. These
differences are primarily due to differing treatments for items including, but
not limited to, wash sales, foreign currency transactions, net operating losses
and capital loss carryforwards.
Reclassifications between Undistributed net investment income (loss),
Undistributed net realized capital gains (loss) and Shares of beneficial
interest are made to reflect income and gains available for distribution under
federal tax regulations. Results of operations and net assets are not effected
by these reclassifications. These reclassifications are as follows:
Shares of beneficial interest, unlimited shares
authorized $ (2,504)
Accumulated net investment income (loss) 2,447
Accumulated net realized gain (loss) from
investment securities and foreign currency
transactions 57
The tax character of distributions paid may differ from the character of
distributions shown in the Statements of Changes in Net Assets
primarily due to short-term gains being treated as ordinary income for tax
purposes. The tax character of distributions paid during 2002 and 2003 was as
follows:
2002 Distributions paid from:
Ordinary income $ 3,106
Long-term capital gains 600
2003 Distributions paid from:
Ordinary income $ -
Long-term capital gains -
The tax basis components of distributable earnings as of October 31, 2003, are
as follows:
Undistributed Ordinary Income $ -
=========
Undistributed Long-term Capital Gains $ -
=========
Capital Loss Carryforward $ (74,605)
=========
Net Unrealized Appreciation (Depreciation) $ 36,373
=========
The capital loss carryforwards are available to offset future realized capital
gains through the periods listed:
Capital Loss
Carryforward Available through
- ----------------------- ------------------
$ 60,548 October 31, 2010
14,057 October 31, 2011
The aggregate cost of investments and composition of unrealized appreciation
(depreciation) for federal income tax purposes as of October 31, 2003, are as
follows:
Federal Tax Cost Basis $ 420,704
=========
Unrealized Appreciation $ 47,433
Unrealized (Depreciation) (11,060)
---------
Net Unrealized Appreciation (Depreciation) $ 36,373
=========
IDEX Mutual Funds Annual Report 2003
IDEX Salomon All Cap 12
- --------------------------------------------------------------------------------
Report of Independent Certified Public Accountants
To the Board of Trustees and Shareholders of
IDEX Salomon All Cap
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of IDEX Salomon All Cap (the "Fund")
(one of the portfolios constituting the IDEX Mutual Funds) at October 31, 2003,
and the results of its operations, the changes in its net assets and the
financial highlights for each of the periods indicated, in conformity with
accounting principles generally accepted in the United States of America. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with auditing standards generally accepted in the United States of America,
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at October 31, 2003 by correspondence with the
custodian and brokers, provide a reasonable basis for our opinion.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Tampa, Florida
December 18, 2003
IDEX Mutual Funds Annual Report 2003
IDEX Salomon All Cap 13
IDEX Salomon Investors Value
- --------------------------------------------------------------------------------
MARKET ENVIRONMENT
The U.S. equity market rallied strongly during the twelve months ended October
31st. Favorable economic data and improved corporate profits fueled higher
stock prices. Increased merger and acquisition activity also helped push stocks
higher.
Technology led the Standard and Poor's 500 Composite Stock Index ("S&P 500")
performance during the period. The technology sector of the S&P 500 gained
almost 43% during the period, accounting for approximately 30% of its return
for the period. Other leading sectors included materials, utilities and
financials. The materials sector gathered steam with improving economic reports
and the financials sector responded to favorable mortgage origination trends,
improved credit quality and strengthening capital markets. Although all sectors
had positive returns during the period, lagging sectors included communication
services, healthcare and consumer staples.
PERFORMANCE
For the year ended October 31, 2003, IDEX Salomon Investors Value returned
23.57%. By comparison its benchmark, the S&P 500, returned 20.79%.
STRATEGY REVIEW
The portfolio's outperformed the S&P 500 during the period and was attributable
to security selection. Security selection was strongest in the consumer
discretionary and financial sectors and weakest in the healthcare and energy
sectors. Top contributors during the period included Lucent Technologies Inc.,
Comverse Technology, Inc., Solectron Corporation, Morgan Chase & Co. (J.P.),
and FleetBoston Financial Corporation. Stocks that underperformed came from a
number of different sectors and included Schering-Plough Corporation, Tenet
Healthcare Corporation ("Tenet"), Safeway, AT&T Corp. and Freddie Mac. We sold
Freddie Mac and Tenet during the period but continued to hold the remaining
stocks as of the end of October.
/s/ John B. Cunningham
John B. Cunningham, CFA
/s/ Mark J. McAllister
Mark J. McAllister, CFA
Co-Fund Managers
Salomon Brothers Asset Management Inc.
IDEX Mutual Funds Annual Report 2003
IDEX Salomon Investors Value 1
IDEX Salomon Investors Value
- --------------------------------------------------------------------------------
Comparison of change in value of $10,000 investment in Class A shares and its
comparative index.
Growth of $10,000
Inception of 2/1/97 through 10/31/03
Investment less sales charges - $9,452
[The following table was depicted as a mountain chart in the printed material.]
DATE Class A S&P 500
- ------------------ ----------------- -----------
2/1/1997 9,452 10,000
3/31/1997 9,197 9,665
6/30/1997 10,450 11,351
9/30/1997 11,360 12,201
12/31/1997 11,289 12,551
3/31/1998 12,413 14,301
6/30/1998 11,954 14,773
9/30/1998 9,746 13,306
12/31/1998 10,487 16,138
3/31/1999 10,863 16,942
6/30/1999 12,457 18,136
9/30/1999 10,790 17,005
12/31/1999 11,360 19,533
3/31/2000 12,080 19,981
6/30/2000 11,626 19,451
9/30/2000 12,356 19,263
12/31/2000 13,325 17,757
3/31/2001 13,221 15,653
6/30/2001 13,707 16,568
9/30/2001 12,336 14,137
12/31/2001 13,053 15,648
3/31/2002 13,507 15,691
6/30/2002 11,709 13,590
9/30/2002 9,322 11,243
12/31/2002 10,404 12,191
3/31/2003 9,902 11,806
6/30/2003 11,758 13,624
9/30/2003 11,908 13,984
10/31/2003 12,551 14,775
Average Annual Total Return for Periods Ended 10/31/03
- --------------------------------------------------------------------------------
From Inception
1 year 5 years Inception Date
----------- --------- ----------- ----------
Class A (NAV) 23.57% 3.59% 4.30% 2/1/97
Class A (POP) 16.77% 2.42% 3.43% 2/1/97
S&P 500(1) 20.79% 0.53% 5.96% 2/1/97
- --------------- ----- ---- ----- ------
Class B (NAV) 22.93% 2.95% 3.66% 2/1/97
Class B (POP) 17.93% 2.77% 3.66% 2/1/97
- --------------- ----- ---- ----- ------
Class C (NAV) 22.93% - 2.77% 11/1/99
- --------------- ----- ---- ----- -------
Class L (NAV) - - 23.81% 11/11/02
Class L (POP) - - 21.81% 11/11/02
- --------------- ----- ---- ----- --------
Class M (NAV) 22.99% 3.05% 3.76% 2/1/97
Class M (POP) 20.76% 2.84% 3.61% 2/1/97
- --------------- ----- ---- ----- --------
NOTES
(1) The Standard & Poor's 500 Composite Stock (S&P 500) 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 Micropal(R)(C) 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 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.
Periods less than 1 year represent total return and are not annualized.
This material must be preceded or accompanied by a current prospectus, which
includes specific contents regarding the investment objectives and policies of
this fund.
IDEX Mutual Funds Annual Report 2003
IDEX Salomon Investors Value 2
IDEX Salomon Investors Value
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
At October 31, 2003
(all amounts except share amounts in thousands)
Shares Value
- -----------------------------------------------------------------------------------
PREFERRED STOCKS (1.4%)
Motion Pictures (1.4%)
News Corporation Limited (The)-ADR 124,500 $ 3,673
---------
Total Preferred Stocks (cost: $2,922) 3,673
---------
COMMON STOCKS (88.8%)
Aerospace (2.2%)
Lockheed Martin Corporation 40,400 1,873
United Technologies Corporation 44,100 3,735
Amusement & Recreation Services (0.6%)
MGM MIRAGE (a) 47,500 1,686
Automotive (1.6%)
Honeywell International Inc. 132,500 4,056
Chemicals & Allied Products (1.0%)
Dow Chemical Company (The) 67,100 2,529
Commercial Banks (10.2%)
Bank of America Corporation 35,300 2,673
Bank of New York Company, Inc. (The) 115,500 3,602
FleetBoston Financial Corporation 104,000 4,202
MBNA Corporation 134,400 3,326
Morgan Chase & Co. (J.P.) 83,000 2,980
U.S. Bancorp 128,400 3,495
Wachovia Corporation 65,500 3,004
Wells Fargo & Company 52,600 2,962
Communication (3.1%)
Comcast Corporation-Class A (a) 68,800 2,334
Comcast Corporation-Special Class A (a) 74,800 2,440
Liberty Media Corporation-Class A (a) 316,500 3,193
Communications Equipment (3.5%)
Comverse Technology, Inc. (a)(b) 151,800 2,738
Lucent Technologies Inc. (a)(b) 959,400 3,070
Nokia Oyj-ADR 197,000 3,347
Computer & Data Processing Services (0.5%)
VERITAS Software Corporation (a) 38,300 1,385
Computer & Office Equipment (4.6%)
3Com Corporation (a) 218,700 1,575
Hewlett-Packard Company 236,600 5,279
International Business Machines
Corporation 26,500 2,371
Sun Microsystems, Inc. (a) 689,000 2,728
Department Stores (1.0%)
Federated Department Stores, Inc. 55,100 2,620
Electric Services (2.2%)
FirstEnergy Corp. 91,600 3,150
Progress Energy, Inc. 62,300 2,685
Electric, Gas & Sanitary Services (1.9%)
NiSource Inc. 139,800 $ 2,895
Xcel Energy Inc. 121,200 1,988
Electronic Components & Accessories (1.6%)
Celestica Inc. (U.S.) (a) 129,100 1,833
Solectron Corporation (a)(b) 417,400 2,312
Environmental Services (0.8%)
Waste Management, Inc. 81,300 2,107
Fabricated Metal Products (0.8%)
Fortune Brands, Inc. 31,800 2,072
Food & Kindred Products (3.5%)
Altria Group, Inc. 128,200 5,961
Kraft Foods, Inc.-Class A (b) 110,300 3,210
Food Stores (3.1%)
Kroger Co. (The) (a) 240,000 4,199
Safeway Inc. (a) 182,100 3,842
Health Services (1.3%)
HCA Inc. 91,000 3,481
Holding & Other Investment Offices (1.3%)
Equity Office Properties Trust 119,500 3,347
Insurance (4.4%)
American International Group, Inc. 81,400 4,952
Loews Corporation 68,600 2,950
St. Paul Companies, Inc. (The) (b) 64,600 2,463
XL Capital Ltd.-Class A 15,500 1,077
Insurance Agents, Brokers & Service (0.8%)
Hartford Financial Services Group, Inc.
(The) (b) 38,300 2,103
Lumber & Other Building Materials (1.2%)
Home Depot, Inc. (The) 83,600 3,099
Oil & Gas Extraction (5.6%)
ENSCO International Incorporated 126,800 3,341
GlobalSantaFe Corporation 97,200 2,188
Nabors Industries Ltd. (a)(b) 49,100 1,856
Total Fina Elf SA-ADR 51,800 4,044
Transocean Inc. (a) 152,400 2,925
Paper & Allied Products (3.9%)
Avery Dennison Corporation (b) 48,800 2,566
International Paper Company 91,800 3,612
Kimberly-Clark Corporation 74,500 3,934
Petroleum Refining (3.5%)
BP PLC-ADR (b) 109,600 4,645
ChevronTexaco Corporation 58,700 4,361
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Salomon Investors Value 3
IDEX Salomon Investors Value
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Shares Value
- ----------------------------------------------------------------------
Pharmaceuticals (5.1%)
Merck & Co., Inc. 42,000 $ 1,859
Pfizer Inc. 191,000 6,036
Schering-Plough Corporation 165,500 2,527
Wyeth 65,600 2,896
Primary Metal Industries (1.9%)
Alcoa Inc. 154,200 4,868
Restaurants (2.0%)
McDonald's Corporation 209,800 5,247
Savings Institutions (1.1%)
Washington Mutual, Inc. 64,000 2,800
Security & Commodity Brokers (6.3%)
American Express Company 60,600 2,844
Goldman Sachs Group, Inc. (The) 33,400 3,136
Merrill Lynch & Co., Inc. 79,500 4,706
Morgan Stanley 57,000 3,128
Waddell & Reed Financial, Inc.-Class A 108,100 2,398
Telecommunications (4.7%)
AT&T Corp. 89,500 1,664
AT&T Wireless Services, Inc. (a)(b) 432,300 3,134
SBC Communications Inc. 143,400 3,439
Verizon Communications, Inc. 118,600 3,985
Tobacco Products (1.1%)
R.J. Reynolds Tobacco Holdings, Inc. (b) 61,200 2,939
Variety Stores (2.4%)
Costco Wholesale Corporation (a) 76,600 2,709
Target Corporation 91,100 3,620
---------
Total Common Stocks (cost: $209,779) 230,336
---------
Principal Value
- ----------------------------------------------------------------------
SECURITY LENDING COLLATERAL (9.1%)
Debt (8.0%)
Bank Notes (1.0%)
Canadian Imperial Bank of Commerce
1.12%, due 11/04/2003 $ 1,031 $ 1,031
Fleet National Bank
1.06%, due 01/21/2004 1,443 1,443
Euro Dollar Terms (4.4%)
Bank of Montreal
1.03%, due 11/13/2003 825 825
1.04%, due 11/14/2003 724 724
Bank of Nova Scotia (The)
1.06%, due 11/12/2003 412 412
Principal Value
- ----------------------------------------------------------------------
Euro Dollar Terms (continued)
Bank of Scotland
1.04%, due 11/14/2003 $ 825 $ 825
Citigroup Inc.
1.08%, due 01/05/2004 1,237 1,237
Credit Agricole Indosuez
1.08%, due 01/06/2004 907 907
Den Danske Bank
1.04%, due 11/10/2003 412 412
1.08%, due 01/20/2004 1,237 1,237
Royal Bank of Canada
1.04%, due 11/24/2003 1,031 1,031
1.06%, due 12/08/2003 412 412
Royal Bank of Scotland Group PLC (The)
1.08%, due 01/15/2004 1,237 1,237
SouthTrust Bank
1.08%, due 01/16/2004 1,237 1,237
Wells Fargo & Company
1.04%, due 11/20/2003 1,237 1,237
Promissory Notes (0.6%)
Goldman Sachs Group, Inc. (The)
1.15%, due 11/03/2003 1,443 1,443
Repurchase Agreements (2.0%) (c)
Goldman Sachs Group, Inc. (The)
1.10% Repurchase Agreement
dated 10/31/2003 to be repurchased
at $412 on 11/03/2003 412 412
Merrill Lynch & Co., Inc.
1.10% Repurchase Agreement
dated 10/31/2003 to be repurchased
at $4,743 on 11/03/2003 4,743 4,743
Shares Value
- ----------------------------------------------------------------------
Investment Companies (1.1%)
Money Market Funds (1.1%)
Merrimac Cash Series Fund-
Premium Class
1-day yield of 0.97% 2,886,344 $ 2,886
---------
Total Security Lending Collateral (cost: $23,691) 23,691
---------
Total Investment Securities (cost: $236,392) $ 257,700
=========
SUMMARY:
Investments, at value 99.3% $ 257,700
Other assets in excess of liabilities 0.7% 1,929
----- ---------
Net assets 100.0% $ 259,629
===== =========
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 (see Note
1). The value at October 31, 2003, of all securities on loan is $22,251.
(c) Cash collateral for the Repurchase Agreements, valued at $5,257, 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
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Salomon Investors Value 4
IDEX Salomon Investors Value
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
At October 31, 2003
(all amounts except per share amounts in thousands)
Assets:
Investment securities, at value (cost: $236,392)
(including $22,251 of securities loaned) $ 257,700
Cash 24,461
Receivables:
Shares of beneficial interest sold 1,386
Interest 5
Dividends 320
Other 18
---------
283,890
---------
Liabilities:
Accounts payable and accrued liabilities:
Shares of beneficial interest redeemed 247
Management and advisory fees 167
Distribution fees 85
Transfer agent fees 28
Payable for securities on loan 23,691
Other 43
---------
24,261
---------
Net Assets $ 259,629
=========
Net Assets Consist of:
Shares of beneficial interest, unlimited shares authorized $ 239,678
Undistributed net investment income (loss) 711
Accumulated net realized gain (loss) from investment
securities (2,066)
Net unrealized appreciation (depreciation) on investment
securities 21,306
---------
Net Assets $ 259,629
=========
Shares Outstanding:
Class A 18,685
Class B 1,677
Class C 231
Class L 66
Class M 181
Net Asset Value Per Share:
Class A $ 12.51
Class B 11.99
Class C 11.99
Class L 11.99
Class M 12.07
Maximum Offering Price Per Share (a):
Class A $ 13.24
Class M 12.19
(a) 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.
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the year ended October 31, 2003
(all amounts in thousands)
Investment Income:
Interest $ 86
Dividends 2,860
Income from loaned securities-net 11
Less withholding taxes on foreign dividends (23)
--------
2,934
--------
Expenses:
Management and advisory fees 1,123
Transfer agent fees 181
Printing and shareholder reports 28
Custody fees 30
Administration fees 32
Legal fees 7
Auditing and accounting fees 20
Trustees fees 9
Registration fees 66
Other 6
Distribution and service fees:
Class A 410
Class B 181
Class C 25
Class L 3
Class M 19
--------
Total expenses 2,140
--------
Net Investment Income (Loss) 794
--------
Net Realized and Unrealized Gain (Loss):
Realized gain (loss) from investment securities (1,894)
Increase (decrease) in unrealized appreciation
(depreciation) on investment securities 33,192
--------
Net Gain (Loss) on Investment Securities 31,298
--------
Net Increase (Decrease) in Net Assets Resulting from
Operations $ 32,092
========
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Salomon Investors Value 5
IDEX Salomon Investors Value
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended
(all amounts in thousands)
October 31, October 31,
2003 2002
----------- -----------
Increase (Decrease) In Net Assets From:
Operations:
Net investment income (loss) $ 794 $ 77
Net realized gain (loss) from investment
securities (1,894) 396
Net unrealized appreciation
(depreciation) on investment
securities 33,192 (10,705)
--------- ---------
32,092 (10,232)
--------- ---------
Distributions to Shareholders:
From net investment income:
Class A (100) -
Class B (30) -
Class C (4) -
Class L - -
Class M (4) -
--------- ---------
(138) -
--------- ---------
From net realized gains:
Class A (420) (279)
Class B (127) (472)
Class C (17) (55)
Class L - -
Class M (16) (78)
--------- ---------
(580) (884)
--------- ---------
Capital Share Transactions:
Proceeds from shares sold:
Class A 165,506 45,626
Class B 4,507 9,096
Class C 779 2,830
Class L 733 -
Class M 218 1,216
--------- ---------
171,743 58,768
--------- ---------
Dividends and distributions reinvested:
Class A 517 271
Class B 148 443
Class C 20 53
Class L - -
Class M 19 76
--------- ---------
704 843
--------- ---------
Cost of shares redeemed:
Class A (6,083) (5,758)
Class B (5,016) (8,071)
Class C (852) (2,219)
Class L (8) -
Class M (752) (1,799)
--------- ---------
(12,711) (17,847)
--------- ---------
159,736 41,764
--------- ---------
Net increase (decrease) in net assets 191,110 30,648
--------- ---------
Net Assets:
Beginning of year 68,519 37,871
--------- ---------
End of year $ 259,629 $ 68,519
========= =========
Undistributed Net Investment Income (Loss) $ 711 $ 63
========= =========
October 31, October 31,
2003 2002
----------- -----------
Share Activity:
Shares issued:
Class A 14,587 4,098
Class B 422 762
Class C 75 240
Class L 67 -
Class M 20 103
--------- ---------
15,171 5,203
--------- ---------
Shares issued-reinvested from
distributions:
Class A 50 21
Class B 15 35
Class C 2 4
Class L - -
Class M 2 6
--------- ---------
69 66
--------- ---------
Shares redeemed:
Class A (550) (491)
Class B (485) (715)
Class C (78) (199)
Class L (1) -
Class M (72) (153)
--------- ---------
(1,186) (1,558)
--------- ---------
Net increase (decrease) in shares
outstanding 14,054 3,711
========= =========
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Salomon Investors Value 6
IDEX Salomon Investors Value
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share of beneficial interest outstanding throughout each period
------------------------------------------------------------------------------------------------------------
Investment Operations Distributions
------------------------------------------ --------------------------------------
Net Asset Net Asset
For the Value, Net Net Realized From Net From Net Value,
Period Beginning Investment and Unrealized Total Investment Realized Total End
Ended (d)(g) of Period Income (Loss) Gain (Loss) Operations Income Gains Distributions of Period
- -----------------------------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 $ 10.21 $ 0.08 $ 2.31 $ 2.39 $ (0.02) $ (0.07) $ (0.09) $ 12.51
10/31/2002 12.55 0.04 (2.10) (2.06) - (0.28) (0.28) 10.21
10/31/2001 12.91 0.07 (0.42) (0.35) - (0.01) (0.01) 12.55
10/31/2000 11.28 0.09 1.54 1.63 - - - 12.91
10/31/1999 11.09 0.05 0.41 0.46 - (0.27) (0.27) 11.28
- -----------------------------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 9.84 0.01 2.23 2.24 (0.02) (0.07) (0.09) 11.99
10/31/2002 12.19 (0.01) (2.06) (2.07) - (0.28) (0.28) 9.84
10/31/2001 12.61 (0.02) (0.39) (0.41) - (0.01) (0.01) 12.19
10/31/2000 11.09 (0.02) 1.54 1.52 - - - 12.61
10/31/1999 10.98 (0.03) 0.41 0.38 - (0.27) (0.27) 11.09
- -----------------------------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 9.84 0.01 2.23 2.24 (0.02) (0.07) (0.09) 11.99
10/31/2002 12.19 (0.01) (2.06) (2.07) - (0.28) (0.28) 9.84
10/31/2001 12.61 (0.02) (0.39) (0.41) - (0.01) (0.01) 12.19
10/31/2000 11.09 (0.02) 1.54 1.52 - - - 12.61
- -----------------------------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 9.77 0.01 2.30 2.31 (0.02) (0.07) (0.09) 11.99
- -----------------------------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 9.90 0.02 2.24 2.26 (0.02) (0.07) (0.09) 12.07
10/31/2002 12.25 - (2.07) (2.07) - (0.28) (0.28) 9.90
10/31/2001 12.66 (0.01) (0.39) (0.40) - (0.01) (0.01) 12.25
10/31/2000 11.12 - 1.54 1.54 - - - 12.66
10/31/1999 11.00 (0.02) 0.41 0.39 - (0.27) (0.27) 11.12
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
-----------------------------------------------------------------------
Ratio of Expenses
Net Assets, to Average Net Investment
For the End of Net Assets (a) Income (Loss) Portfolio
Period Total Period ----------------------- to Average Turnover
Ended (g) Return (c) (000's) Net (e) Total (f) Net Assets (a) Rate (b)
- ----------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 23.57% $ 233,779 1.42% 1.42% 0.71% 32%
10/31/2002 (16.90) 46,960 1.55 1.91 0.56 101
10/31/2001 (2.68) 12,176 1.55 1.93 0.48 29
10/31/2000 14.38 8,431 1.55 2.20 0.40 50
10/31/1999 4.34 7,972 1.64 2.28 0.21 26
- ----------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 22.93 20,102 2.07 2.07 0.06 32
10/31/2002 (17.47) 16,980 2.20 2.56 (0.09) 101
10/31/2001 (3.31) 20,034 2.20 2.58 (0.17) 29
10/31/2000 13.72 10,448 2.20 2.85 (0.25) 50
10/31/1999 3.68 7,311 2.29 2.93 (0.44) 26
- ----------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 22.93 2,770 2.07 2.07 0.06 32
10/31/2002 (17.47) 2,295 2.20 2.56 (0.09) 101
10/31/2001 (3.31) 2,288 2.20 2.58 (0.17) 29
10/31/2000 13.72 1,094 2.20 2.85 (0.25) 50
- ----------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 23.81 797 2.07 2.07 0.05 32
- ----------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 22.99 2,181 1.97 1.97 0.16 32
10/31/2002 (17.35) 2,284 2.10 2.46 0.01 101
10/31/2001 (3.21) 3,373 2.10 2.48 (0.07) 29
10/31/2000 13.82 2,508 2.10 2.75 (0.15) 50
10/31/1999 3.79 2,204 2.19 2.83 (0.34) 26
- ----------------------------------------------------------------------------------------------------------------
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Salomon Investors Value 7
IDEX Salomon Investors Value
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (continued)
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 are not annualized.
(d) Per share information is calculated based on average number of shares
outstanding for the periods ended 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 (see note 2).
(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 Fund's offering of share classes C and L are as
follows:
Class C - November 1, 1999
Class L - November 11, 2002
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Salomon Investors Value 8
IDEX Salomon Investors Value
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
At October 31, 2003
(all amounts in thousands)
NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
IDEX Mutual Funds is a Massachusetts business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company. IDEX Salomon Investors Value ("the Fund"), part
of IDEX Mutual Funds, began operations on February 1, 1997.
In the normal course of business, the Fund enters into contracts that contain a
variety of representations and warranties and which provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown, as this would involve future claims that may be made against the Fund
and/or its affiliates that have not yet occurred. However, based on experience,
the Fund expects the risk of loss to be remote.
See the Prospectus and Statement of Additional Information for a description of
the Fund's investment objective.
In preparing the Fund's financial statements in accordance with accounting
principles generally accepted in the United States of America ("GAAP"),
estimates or assumptions (which could differ from actual results) may be used
that affect reported amounts and disclosures. The following policies were
consistently followed by the Fund, in accordance with GAAP.
Multiple class operations and expenses: The Fund currently offers five classes
of shares, each with a public offering price that reflects different sales
charges, if any, and expense levels. Effective November 11, 2002, Class C and M
shares were closed to new investors. Income, non-class specific expenses and
realized and unrealized gains and losses, are allocated daily to each class,
based upon the value of shares outstanding method as permitted under Rule 18f-3
of the 1940 Act. Each class bears its own specific expenses as well as a
portion of general, common expenses.
Security valuations: Fund investments traded on an exchange are valued at the
closing price on the day of valuation on the exchange where the security is
principally traded. With respect to securities traded on the NASDAQ INMS, such
closing price may be the last reported sales price or the NASDAQ Official
Closing Price.
Securities traded in the over-the-counter market and listed securities for
which no sale was reported on that date are valued at the last quoted bid
price.
Debt securities are valued by independent pricing services; however, those that
mature in sixty days or less are valued at amortized cost, which approximates
market.
Other securities for which quotations are not readily available are valued at
fair value determined in good faith, in accordance with procedures established
by and, under the supervision of the Board of Trustees and the Fund's Valuation
Committee.
Cash: The Fund may leave cash overnight in its cash account with the custodian,
Investors Bank & Trust Company ("IBT"). IBT has been contracted on behalf of
the Fund to invest the excess cash into a savings account, which at October 31,
2003, was paying an interest rate of 0.75%.
Securities lending: The Fund may lend securities to enhance fund earnings from
investing cash collateral received in making such loans to qualified borrowers
(typically broker/dealers). The Fund has engaged its custodian bank, IBT, as a
lending agent to administer its securities lending program. IBT earned $4 of
program net income for its services. When the Fund makes a security loan, it
receives cash collateral as protection against the risk that the borrower will
default on the loan, and records an asset for the cash invested collateral and
a liability for the return of the collateral.
Securities on loan are included in Investment securities at value on the
Statement of Assets and Liabilities and remain on the Schedule of Investments.
Loans of securities are required to be secured by collateral at least equal to
102% of the value of the securities at inception of the loan, and not less then
100% thereafter. The Fund may invest cash collateral in short-term money market
instruments including: U.S. Treasury Bills, U.S. agency obligations, commercial
paper, money market mutual funds, repurchase agreements and other highly rated,
liquid investments. During the life of securities loans, the collateral and
securities loaned remain subject to fluctuation in value. IBT marks to market
securities loaned and the collateral each business day. If additional
collateral is due (at least $1), IBT collects additional cash collateral from
the borrowers. Although securities loaned will be fully collateralized at all
times, IBT may experience delays in, or may be prevented from, recovering the
collateral on behalf of the Fund. The Fund may recall a loaned security
position at any time from the borrower through IBT. In the event the borrower
fails to timely return a recalled security, IBT may indemnify the Fund by
purchasing replacement securities for the Fund at its own expense and claiming
the collateral to fund such a purchase. IBT absorbs the loss if the collateral
value is not sufficient to cover the cost of the replacement securities. If
replacement securities are not available, IBT will credit the equivalent cash
value to the Fund.
Income from securities lending is included in the Statement of Operations. The
amount of collateral and value of securities on loan are included in the
Statement of Assets and Liabilities as well as on the Schedule of Investments.
Real Estate Investment Trusts ("REITs"): There are certain additional risks
involved in investing in REITs. These include, but are not limited to, economic
conditions, changes in zoning laws, real estate values, property taxes and
interest rates. Since the Fund invests primarily in real estate related
securities, the value of its shares may fluctuate more widely than the value of
shares of a fund that invests in a broad range of industries.
IDEX Mutual Funds Annual Report 2003
IDEX Salomon Investors Value 9
IDEX Salomon Investors Value
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 1-(continued)
Security transactions and investment income: Security transactions are recorded
on the trade date. Security gains and losses are calculated on the specific
identification basis. Dividend income is recorded on the ex-dividend date or,
in the case of foreign securities, as soon as the Fund is informed of the
ex-dividend date. Interest income, including accretion of discounts and
amortization of premiums, is recorded on the accrual basis commencing on the
settlement date.
Dividend distributions: Distributions to shareholders are recorded on the
ex-dividend date and are determined in accordance with Federal income tax
regulations which may differ from GAAP.
NOTE 2. RELATED PARTY TRANSACTIONS
AEGON/Transamerica Fund Advisers, Inc. ("ATFA") is the Fund's investment
adviser. AEGON/Transamerica Fund Services, Inc. ("ATFS") is the Fund's
administrator. AFSG Securities Corp. ("AFSG") is the Fund's
distributor/principal underwriter. AEGON/Transamerica Investor Services, Inc.
("ATIS") is the 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. AUSA and WRL are wholly owned indirect
subsidiaries of AEGON NV, a Netherlands corporation.
The following schedule reflects the percentage of fund assets owned by
affiliated mutual funds (ie: through the assets allocation funds)
Net % of
Assets Net Assets
----------- -----------
IDEX Asset Allocation
Conservative Portfolio $ 15,694 6%
IDEX Asset Allocation Growth 56,731 22%
IDEX Asset Allocation Moderate
Growth 92,867 36%
IDEX Asset Allocation Moderate 57,536 22%
--
86%
==
Investment advisory fees: The Fund pays management fees to ATFA based on
average daily net assets ("ANA") at the following stated break points:
0.80% of the first $500 million of ANA
0.70% of ANA over $500 million
ATFA currently voluntarily waives its advisory fee and will reimburse the Fund
to the extent that operating expenses, excluding 12b-1 fees, exceed the
following stated annual limit:
1.20% Expense Limit
If total fund expenses fall below the annual expense limitations agreed to by
the adviser within the succeeding three years, the Fund may be required to pay
the advisor a portion or all of the waived advisory fees.
Distribution and service fees: The Fund has a 12b-1 distribution plan under the
1940 Act pursuant to which an annual fee, based on average daily net assets, is
paid to the distributor for various disbursements such as broker-dealer account
servicing fees and other promotional expenses of the Fund. The 12b-1 fee for
the Fund is comprised of a 0.25% service fee and the remaining amount is an
asset-based sales charge/distribution fee. The Fund is authorized under the
12b-1 plan to pay fees on each class up to the following limits:
Class A 0.35%
Class B 1.00%
Class C 1.00%
Class L 1.00%
Class M 0.90%
Underwriter commissions relate to front-end sales charges imposed for Class A
and M shares and contingent deferred sales charges from Classes B, L, M and
certain A share redemptions. For the year ended October 31, 2003, the
underwriter commissions were as follows:
Received by Underwriter $ 55
Retained by Underwriter 3
Contingent Sales Charges 56
Administrative services: The Fund has entered into an agreement with ATFS for
financial and legal fund administration services, which include such items as
compliance, expenses, financial statements and other reporting, distributions,
tax returns, prospectus preparation, board of trustees meeting support and
other legal matters. Transfer agent fees are reflected separately from
Administration fees on the Statement of Operations. The Legal fees on the
Statement of Operations are for fees paid to external legal counsel. ATFS
provides its services to the Fund at cost and is reimbursed monthly.
Transfer agent fees: The Fund incurs ATIS annual per-account charges (not in
thousands) of $20.00 for each open shareholder account and $1.63 for each
closed account maintained, and certain out of pocket expenses.
Brokerage commissions: Brokerage commissions incurred on security transactions
placed with an affiliate of the sub-adviser for the year ended October 31,
2003, were $21.
Deferred compensation plan: Each eligible Fund Trustee may elect participation
in the Deferred Compensation Plan ("the Plan"). Under the Plan, such Trustees
may defer payment of a percentage of their total fees earned as a Fund Trustee.
These deferred amounts may be invested in any IDEX Fund. At October 31, 2003,
the value of invested plan amounts was $2. Invested plan amounts and the total
liability for deferred compensation to the Trustees under the Plan at October
31, 2003, are included in Net assets in the accompanying Statement of Assets
and Liabilities.
IDEX Mutual Funds Annual Report 2003
IDEX Salomon Investors Value 10
IDEX Salomon Investors Value
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 3. INVESTMENT TRANSACTIONS
The cost of securities purchased and proceeds from securities sold (excluding
short-term securities) for the year ended October 31, 2003 were as follows:
Purchases of securities:
Long-Term excluding U.S. Government $ 180,652
U.S. Government 888
Proceeds from maturities and sales of securities:
Long-Term excluding U.S. Government 40,056
U.S. Government 1,429
NOTE 4. FEDERAL INCOME TAX MATTERS
The Fund has not made any provision for federal income or excise taxes due to
its policy to distribute all of its taxable income and capital gains to its
shareholders and otherwise qualify as a regulated investment company under the
Internal Revenue Code. Income and capital gain distributions are determined in
accordance with income tax regulations, which may differ from GAAP. These
differences are primarily due to differing treatments for items including, but
not limited to, wash sales, net operating losses and capital loss
carryforwards.
Reclassifications between Undistributed net investment income (loss),
Undistributed net realized capital gains (loss) and Shares of beneficial
interest are made to reflect income and gains available for distribution under
federal tax regulations. Results of operations and net assets are not effected
by these reclassifications. These reclassifications are as follows. Dividend
income is recorded at management's estimate of the income included in
distributions from the REIT investments. Distributions received in excess of
this estimated amount are recorded as a reduction of the cost of investments.
The actual amounts of income, return of capital, and capital gains are only
determined by each REIT after the fiscal year-end, and may differ from the
estimated amounts.
Shares of beneficial interest, unlimited
shares authorized $ -
Undistributed net investment income (loss) (8)
Accumulated net realized gain (loss) from
investment securities 8
The tax character of distributions paid may differ from the character of
distributions shown in the Statements of Changes in Net Assets
primarily due to short-term gains being treated as ordinary income for tax
purposes. The tax character of distributions paid during 2002 and 2003 was as
follows:
2002 Distributions paid from:
Ordinary income $ 186
Long-term capital gains 699
2003 Distributions paid from:
Ordinary income $ 138
Long-term capital gains 580
The tax basis components of distributable earnings as of October 31, 2003, are
as follows:
Undistributed Ordinary Income $ 714
========
Undistributed Long-term Capital Gains $ -
========
Capital Loss Carryforward $ (222)
========
Net Unrealized Appreciation (Depreciation) $ 19,464
========
The capital loss carryforwards are available to offset future realized capital
gains through the periods listed:
Capital Loss
Carryforward Available through
- -------------- ------------------
$ 222 October 31, 2011
The aggregate cost of investments and composition of unrealized appreciation
(depreciation) for federal income tax purposes as of October 31, 2003, are as
follows:
Federal Tax Cost Basis $ 238,236
=========
Unrealized Appreciation $ 24,254
Unrealized (Depreciation) (4,790)
---------
Net Unrealized Appreciation (Depreciation) $ 19,464
=========
Supplemental Tax Information
(unaudited)
For dividends paid during the year ended October 31, 2003, the Fund designates
qualified dividend income to the maximum extent allowable.
For corporate shareholders, 100% of investment income (dividend income plus
short-term gains, if any) qualifies for the dividends received deduction.
The information and distributions reported herein may differ from the
information and distributions taxable to the shareholders for the calendar year
ending December 31, 2003. Complete information will be computed and reported in
conjunction with your 2003 Form 1099-DIV.
IDEX Mutual Funds Annual Report 2003
IDEX Salomon Investors Value 11
- --------------------------------------------------------------------------------
Report of Independent Certified Public Accountants
To the Board of Trustees and Shareholders of
IDEX Salomon Investors Value
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of IDEX Salomon Investors Value (the
"Fund") (one of the portfolios constituting the IDEX Mutual Funds) at October
31, 2003, and the results of its operations, the changes in its net assets and
the financial highlights for each of the periods indicated, in conformity with
accounting principles generally accepted in the United States of America. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with auditing standards generally accepted in the United States of America,
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at October 31, 2003 by correspondence with the
custodian and brokers, provide a reasonable basis for our opinion.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Tampa, Florida
December 18, 2003
IDEX Mutual Funds Annual Report 2003
IDEX Salomon Investors Value 12
IDEX Templeton Great Companies Global (formerly IDEX Great Companies-Global2)
- --------------------------------------------------------------------------------
MARKET ENVIRONMENT
World markets completed the twelve months that ended October 31, 2003, on a
positive note, with both U.S. and international equities posting gains in the
final quarter. The Japanese economy awakened from a prolonged slumber, and
several emerging markets in Asia and Latin America surged. Meanwhile, the U.S.
economy displayed signs of renewal throughout most of the year, except in job
growth. But by the end of the period, even the employment picture looked better.
Although Europe lagged economically, participation among world markets continued
to be broad, indicating the start of what we believe will be a long-term
worldwide economic recovery.
PERFORMANCE
For the year ended October 31, 2003, IDEX Templeton Great Companies Global
returned 17.75%. By comparison its benchmark, the Morgan Stanley Capital
International World Index, returned 24.32%.
STRATEGY REVIEW
On September 15, 2003, Templeton Investment Counsel, LLC ("Templeton"), was
added as a sub-adviser, charged with the selection of foreign stocks while Great
Companies L.L.C. ("Great Companies") remains the manager of the domestic portion
of the portfolio. We believe this change will help investors capture above
average returns as we combine a domestic manager with expertise in growth stocks
with world-renowned international asset management focusing on stocks from a
value perspective.
OUTLOOK
Going forward, Templeton will continue to apply a long-term, value-oriented,
bottom-up investment approach in its security selection process, while Great
Companies will continue its principles for finding companies that are long-term
leaders in the domestic market.
/s/ Tina M. Hellmer /s/ James Huguet
Tina Hellmer James H. Huguet
/s/ Gary C. Motyl /s/ Gerald Bollman
Gary Motyl Gerald W. Bollman
/s/ Mark R. Beveridge /s/ Mathew C. Stephani
Mark Beveridge Mathew C. Stephani
Fund Managers Fund Managers
Templeton Investment Counsel, LLC Great Companies, L.L.C.
IDEX Mutual Funds Annual Report 2003
IDEX Templeton Great Companies Global 1
IDEX Templeton Great Companies Global (formerly IDEX Great Companies-Global2)
- --------------------------------------------------------------------------------
Comparison of change in value of $10,000 investment in Class A shares and its
comparative index.
[The following table was depicted as a mountain chart in the printed material.]
DATE Class A MSCIW
- ----------------- ---------------- -----------------
9/15/2000 9,452 10,000
9/30/2000 9,480 9,469
12/31/2000 8,669 8,891
3/31/2001 6,957 7,755
6/30/2001 7,109 7,970
9/30/2001 6,038 6,830
12/31/2001 6,986 7,422
3/31/2002 6,881 7,454
6/30/2002 6,000 6,783
9/30/2002 5,099 5,542
12/31/2002 5,507 5,971
3/31/2003 5,289 5,676
6/30/2003 5,990 6,655
9/30/2003 6,265 6,984
10/31/2003 6,541 7,400
Average Annual Total Return for Periods Ended 10/31/03
- --------------------------------------------------------------------------------
From Inception
1 year Inception Date
----------- ----------- ----------
Class A (NAV) 17.75% -11.12% 9/15/00
Class A (POP) 11.27% -12.71% 9/15/00
MSCIW(1) 24.32% -9.19% 9/15/00
- ------ ----- ------- -------
Class B (NAV) 17.01% -11.78% 9/15/00
Class B (POP) 12.01% -12.35% 9/15/00
- --------------- ----- ------- -------
Class C (NAV) 17.01% -11.78% 9/15/00
- --------------- ----- ------- -------
Class L (NAV) - 17.63% 11/11/02
Class L (POP) - 15.63% 11/11/02
- --------------- ----- ------- --------
Class M (NAV) 17.13% -11.66% 9/15/00
Class M (POP) 14.96% -11.94% 9/15/00
- --------------- ----- ------- --------
NOTES
(1) The Morgan Stanley Capital International World (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 Micropal(R)(C) 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 shares, (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.
The management of this fund is based on a specific philosophy and on
proprietary systems and methodology. There is no guarantee the fund will
achieve its objectives.
Periods less than 1 year represent total return and are not annualized.
This material must be preceded or accompanied by a current prospectus, which
includes specific contents regarding the investment objectives and policies of
this fund.
IDEX Mutual Funds Annual Report 2003
IDEX Templeton Great Companies Global 2
IDEX Templeton Great Companies Global
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
At October 31, 2003
(all amounts except share amounts in thousands)
Principal
Amount Value
- --------------------------------------------------------------
CONVERTIBLE BONDS (0.0%)
France (0.0%)
AXA-Zero Coupon $9 $ 9
--------
Total Convertible Bonds (cost: $7) 9
--------
Shares Value
- --------------------------------------------------------------
PREFERRED STOCKS (0.4%)
Brazil (0.4%)
Companhia Vale do Rio Doce-ADR 3,400 $ 137
--------
Total Preferred Stocks (cost: $125) 137
--------
COMMON STOCKS (94.1%)
Australia (1.7%)
Alumina Limited 25,700 109
Australia and New Zealand Banking
Group Limited 10,100 127
Australia and New Zealand Banking
Group Limited-Rights, Expires
11/24/2003 1,836 6
BHP Billiton Limited-ADR 12,400 204
Mayne Group Limited 39,700 102
Bermuda (0.8%)
ACE Limited 3,600 130
XL Capital Ltd.-Class A (b) 2,000 139
Canada (1.0%)
Alcan Inc. 4,400 176
BCE Inc. (b) 6,900 156
Denmark (0.7%)
ISS A/S 2,500 119
Vestas Wind Systems A/S 4,900 103
Finland (1.0%)
Stora Enso Oyj-R Shares 9,210 125
UPM-Kymmene Oyj 10,200 191
France (2.6%)
Accor SA 3,100 122
Aventis SA 3,100 164
AXA-rights 7,700 146
Compagnie Generale des Etablissements
Michelin-Class B 2,400 94
Suez SA-ADR (b) 5,300 85
Total Fina Elf SA 800 124
Valeo SA 2,800 105
Germany (3.1%)
BASF AG-ADR 3,200 147
Bayer AG-ADR 5,800 139
Deutsche Post AG-Registered Shares 10,600 204
E.ON AG-ADR 3,600 181
SAP AG-ADR 5,600 205
Volkswagen AG-ADR 12,100 122
Shares Value
- ---------------------------------------------------------------------
Hong Kong (0.8%)
Cheung Kong (Holdings) Limited 18,000 $ 150
Hutchison Whampoa Limited 13,000 101
India (0.5%)
Satyam Computer Services Limited-ADR (b) 9,400 170
Israel (0.4%)
Check Point Software Technologies, Ltd. (a) 7,900 134
Italy (1.0%)
Eni SpA.-ADR (b) 2,800 223
Riunione Adriatica di Sicurta SpA 6,000 94
Japan (3.9%)
Canon Inc.-ADR 3,300 162
Denso Corporation 5,800 110
East Japan Railway Company 26 118
Hitachi, Ltd. 10,000 59
NEC Corporation 8,000 71
Nintendo Co., Ltd. 2,100 162
Nippon Telegraph and Telephone
Corporation 40 179
Nomura Securities Co., Ltd. (The) 4,000 69
Sony Corporation-ADR 4,800 169
Yasuda Fire & Marine Insurance
Company, Limited (The) 17,000 141
Mexico (0.8%)
Cemex, SA de CV-ADR 2,300 55
Kimberly-Clark de Mexico, S.A. de C.V.-
A Shares 24,400 59
Telefonos de Mexico SA de CV-ADR 4,900 158
Netherlands (1.9%)
Akzo Nobel NV-ADR 4,400 139
IHC Caland N.V. 3,000 128
ING Groep NV-ADR 7,300 152
Koninklijke Philips Electronics NV 7,000 189
New Zealand (0.3%)
Telecom Corporation of New Zealand
Limited 30,300 90
Portugal (0.5%)
Portugal Telecom, SGPS, SA-
Registered Shares 18,500 156
Singapore (0.4%)
DBS Group Holdings Limited-ADR 4,100 135
South Korea (2.0%)
Kookmin Bank-ADR 4,100 151
Korea Electric Power Corporation-
ADR (b) 9,060 98
KT Corp.-ADR (b) 7,920 156
Samsung Electronics Co.,
Ltd.-GDR-144A (USD) 1,260 252
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Templeton Great Companies Global 3
IDEX Templeton Great Companies Global
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Shares Value
- ---------------------------------------------------------------------
Spain (1.5%)
Antena 3 Television, SA (a) 33 $ 1
Endesa SA 5,800 92
Iberdrola SA 8,900 149
Repsol-YPF, SA 7,200 126
Telefonica SA 9,800 122
Sweden (2.3%)
Atlas Copco AB-A Shares 4,600 162
Electrolux AB-Series B 2,600 53
Nordea AB-FDR 26,900 167
Securitas AB-Class B 9,200 113
Svenska Cellulosa AB-B Shares 3,200 121
Volvo AB-B Shares 4,600 129
Switzerland (1.9%)
Nestle SA-ADR (b) 3,200 176
Novartis AG-ADR 3,700 142
Swiss Reinsurance Company-
Registered Shares 2,800 176
UBS AG-Registered Shares (b) 2,100 129
Taiwan (0.4%)
Chughwa Telecom Co., Ltd.-ADR 8,600 133
United Kingdom (6.7%)
Abbey National PLC 13,700 131
BAE Systems PLC 40,600 126
BP PLC-ADR (b) 4,200 178
Brambles Industries PLC 51,200 155
British Airways PLC (a) 20,100 71
Cable & Wireless PLC 30,300 70
Cadbury Schweppes PLC 28,800 185
GlaxoSmithKline PLC 5,600 120
HSBC Holdings PLC-ADR (b) 1,900 143
Marks and Spencer Group PLC 21,600 105
National Grid Group PLC (The) 20,500 131
Pearson PLC 11,900 123
Rolls-Royce Group PLC 31,500 101
Shell Transport & Trading Company PLC 18,800 117
Smiths Group PLC 7,800 93
Standard Chartered PLC 8,800 141
Unilever PLC 18,700 159
United States (57.9%)
Abbott Laboratories 33,400 1,424
American International Group, Inc. 12,800 779
Amgen Inc. (a) 8,300 513
Analog Devices, Inc. (a) 15,700 696
Anheuser-Busch Companies, Inc. 11,200 552
Autoliv, Inc. 2,900 96
Avon Products, Inc. 8,900 605
Berkshire Hathaway Inc.-Class B (a) 200 520
Cintas Corporation (b) 13,900 593
Clear Channel Communications, Inc. 17,000 694
Shares Value
- ---------------------------------------------------------------------
United States (continued)
Colgate-Palmolive Company 10,400 $ 553
Dell Computer Corporation (a) 15,600 563
eBay Inc. (a) 9,800 548
First Data Corporation (b) 13,000 464
General Electric Company 18,100 525
Genzyme Corporation-General Division (a) 11,800 542
Johnson & Johnson 11,320 570
Lehman Brothers Holdings Inc. 11,100 799
Marsh & McLennan Companies, Inc. 15,500 663
Mattel, Inc. 42,300 819
Merrill Lynch & Co., Inc. 14,000 829
Microsoft Corporation 22,300 583
Moody's Corporation 10,900 631
Omnicom Group, Inc. (b) 10,500 838
Pfizer Inc. 16,000 506
Procter & Gamble Company (The) 6,200 609
United Technologies Corporation 19,300 1,635
UTStarcom, Inc. (a) 14,300 450
-------
Total Common Stocks (cost: $28,539) 30,294
-------
Principal Value
- ---------------------------------------------------------------------
SECURITY LENDING COLLATERAL (11.1%)
Debt (9.7%)
Bank Notes (1.2%)
Canadian Imperial Bank of Commerce
1.12%, due 11/04/2003 $ 156 $ 156
Fleet National Bank
1.06%, due 01/21/2004 218 218
Euro Dollar Term (5.4%)
Bank of Montreal
1.03%, due 11/13/2003 125 125
1.04%, due 11/14/2003 109 109
Bank of Nova Scotia (The)
1.06%, due 11/12/2003 62 62
Bank of Scotland
1.04%, due 11/14/2003 125 125
Citigroup Inc.
1.08%, due 01/05/2004 187 187
Credit Agricole Indosuez
1.08%, due 01/06/2004 137 137
Den Danske Bank
1.04%, due 11/10/2003 62 62
1.08%, due 01/20/2004 187 187
Royal Bank of Canada
1.04%, due 11/24/2003 156 156
1.06%, due 12/08/2003 62 62
Royal Bank of Scotland Group PLC (The)
1.08%, due 01/15/2004 187 187
SouthTrust Bank
1.08%, due 01/16/2004 187 187
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Templeton Great Companies Global 4
IDEX Templeton Great Companies Global
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Principal Value
- --------------------------------------------------------------------------------
Euro Dollar Term (continued)
Wells Fargo & Company
1.04%, due 11/20/2003 $ 187 $ 187
Promissory Notes (0.7%)
Goldman Sachs Group, Inc. (The)
1.15%, due 11/03/2003 218 218
Repurchase Agreements (2.4%) (c)
Goldman Sachs Group, Inc. (The)
1.10% Repurchase Agreement dated
10/31/2003 to be repurchased at $62
on 11/03/2003 62 62
Merrill Lynch & Co., Inc.
1.10% Repurchase Agreement dated
10/31/2003 to be repurchased at $718
on 11/03/2003 718 718
Shares Value
- --------------------------------------------------------------------------------
Investment Companies (1.4%)
Money Market Funds (1.4%)
Merrimac Cash Series Fund-
Premium Class
1-day yield of 0.97% 436,409 $ 436
---------
Total Security Lending Collateral (cost: $3,581) 3,581
---------
Total Investment Securities (cost: $32,252) $ 34,021
=========
SUMMARY:
Investments, at value 105.6 % $ 34,021
Liabilities in excess of other assets (5.6)% (1,815)
--------- ---------
Net assets 100.0 % $ 32,206
========= =========
FORWARD FOREIGN CURRENCY CONTRACTS:
- ----------------------------------------------------------------------------
Amount in
U.S. Dollars Net Unrealized
Bought Settlement Bought Appreciation
Currency (Sold) Date (Sold) (Depreciation)
- ----------------------------------------------------------------------------
British Pound (16) 11/03/2003 $ (27) $ --
Percentage of
Net Assets Value
- -----------------------------------------------------------------------
INVESTMENTS BY INDUSTRY:
Pharmaceuticals 11.8 % $ 3,817
Business Services 10.5 % 3,406
Chemicals & Allied Products 7.3 % 2,356
Insurance 6.5 % 2,107
Aerospace 5.8 % 1,862
Security & Commodity Brokers 5.3 % 1,698
Electronic & Other Electric Equipment 4.2 % 1,350
Telecommunications 3.8 % 1,220
Commercial Banks 3.5 % 1,130
Computer & Data Processing Services 3.4 % 1,092
Computer & Office Equipment 2.7 % 855
Manufacturing Industries 2.5 % 819
Electronic Components & Accessories 2.4 % 789
Beverages 2.3 % 737
Apparel Products 2.2 % 698
Insurance Agents, Brokers & Service 2.1 % 663
Electric Services 2.0 % 651
Automotive 1.7 % 562
Paper & Allied Products 1.5 % 496
Oil & Gas Extraction 1.5 % 473
Communications Equipment 1.4 % 450
Metal Mining 1.1 % 341
Food & Kindred Products 1.0 % 335
Life Insurance 1.0 % 307
Trucking & Warehousing 1.0 % 306
Petroleum Refining 0.9 % 295
Primary Metal Industries 0.9 % 285
Transportation & Public Utilities 0.8 % 273
Industrial Machinery & Equipment 0.8 % 265
Real Estate 0.5 % 150
Printing & Publishing 0.4 % 123
Hotels & Other Lodging Places 0.4 % 122
Holding & Other Investment Offices 0.3 % 101
Rubber & Misc. Plastic Products 0.3 % 94
Electric, Gas & Sanitary Services 0.3 % 85
Air Transportation 0.2 % 71
Stone, Clay & Glass Products 0.2 % 55
Radio & Television Broadcasting 0.0 % 1
----- --------
Investments, at value 94.5 % 30,440
Short-term investments 11.1 % 3,581
Liabilities in excess of other assets (5.6)% (1,815)
----- --------
Net assets 100.0 % $ 32,206
===== ========
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 (see Note
1). The value at October 31, 2003, of all securities on loan is $3,473.
(c) Cash collateral for the Repurchase Agreements, valued at $795, 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
GDR Global Depositary Receipt
FDR Finnish 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 financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Templeton Great Companies Global 5
IDEX Templeton Great Companies Global
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
At October 31, 2003
(all amounts except per share amounts in thousands)
Assets:
Investment securities, at value (cost: $32,252)
(including $3,473 of securities loaned) $ 34,021
Cash 1,717
Receivables:
Investment securities sold 40
Shares of beneficial interest sold 28
Dividends 36
Dividend reclaims receivable 1
Due from investment adviser 10
Other 4
--------
35,857
--------
Liabilities:
Accounts payable and accrued liabilities:
Shares of beneficial interest redeemed 11
Distribution fees 13
Transfer agent fees 11
Due to custodian 12
Payable for securities on loan 3,581
Other 23
--------
3,651
--------
Net Assets $ 32,206
========
Net Assets Consist of:
Shares of beneficial interest, unlimited shares authorized $ 32,394
Undistributed net investment income (loss) -
Accumulated net realized gain (loss) from investment
securities and foreign currency transactions (1,957)
Net unrealized appreciation (depreciation) on
investment securities 1,769
--------
Net Assets $ 32,206
========
Shares Outstanding:
Class A 3,793
Class B 575
Class C 192
Class L 20
Class M 107
Net Asset Value Per Share:
Class A $ 6.90
Class B 6.74
Class C 6.74
Class L 6.74
Class M 6.77
Maximum Offering Price Per Share (a):
Class A $ 7.30
Class M 6.84
(a) 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.
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the year ended October 31, 2003
(all amounts in thousands)
Investment Income:
Interest $ 5
Dividends 418
Income from loaned securities-net 3
Less withholding taxes on foreign dividends (31)
-------
395
-------
Expenses:
Management and advisory fees 204
Transfer agent fees 72
Printing and shareholder reports 9
Custody fees 13
Administration fees 34
Legal fees 2
Auditing and accounting fees 20
Trustees fees 2
Registration fees 76
Other 2
Distribution and service fees:
Class A 72
Class B 31
Class C 10
Class L -
Class M 6
-------
Net expenses 553
Less:
Advisory fee waiver (127)
-------
Total expenses 426
-------
Net Investment Income (Loss) (31)
-------
Net Realized Gain (Loss) from:
Investment securities 1,077
Foreign currency transactions (118)
-------
959
-------
Net Increase (Decrease) in Unrealized Appreciation
(Depreciation) on Investment Securities 3,785
-------
Net Gain (Loss) on Investments and Foreign Currency
Transactions 4,744
-------
Net Increase (Decrease) in Net Assets Resulting from
Operations $ 4,713
=======
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Templeton Great Companies Global 6
IDEX Templeton Great Companies Global
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended
(all amounts in thousands)
October 31, October 31,
2003 2002
------------ -----------
Increase (Decrease) In Net Assets From:
Operations:
Net investment income (loss) $ (31) $ (88)
Net realized gain (loss) from investment
securities and foreign currency
transactions 959 (1,164)
Net unrealized appreciation
(depreciation) on investment
securities 3,785 (740)
-------- --------
4,713 (1,992)
-------- --------
Distributions to Shareholders:
From net investment income:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
-------- --------
- -
-------- --------
From net realized gains:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
-------- --------
- -
-------- --------
Capital Share Transactions:
Proceeds from shares sold:
Class A 12,562 12,939
Class B 1,292 1,933
Class C 429 593
Class L 133 -
Class M 105 469
-------- --------
14,521 15,934
-------- --------
Dividends and distributions reinvested:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
-------- --------
- -
-------- --------
Cost of shares redeemed:
Class A (2,287) (5,236)
Class B (1,158) (1,452)
Class C (294) (541)
Class L (4) -
Class M (256) (361)
-------- --------
(3,999) (7,590)
-------- --------
10,522 8,344
-------- --------
Net increase (decrease) in net assets 15,235 6,352
-------- --------
Net Assets:
Beginning of year 16,971 10,619
-------- --------
End of year $ 32,206 $ 16,971
======== ========
Undistributed Net Investment Income $ - $ -
======== ========
October 31, October 31,
2003 2002
------------ -----------
Share Activity:
Shares issued:
Class A 2,112 2,029
Class B 203 281
Class C 69 87
Class L 21 -
Class M 16 66
-------- --------
2,421 2,463
-------- --------
Shares issued-reinvested from distributions:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
-------- --------
- -
-------- --------
Shares redeemed:
Class A (361) (783)
Class B (192) (233)
Class C (49) (84)
Class L (1) -
Class M (42) (56)
-------- --------
(645) (1,156)
-------- --------
Net increase (decrease) in shares
outstanding 1,776 1,307
======== ========
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Templeton Great Companies Global 7
IDEX Templeton Great Companies Global
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share of beneficial interest outstanding throughout each period
-------------------------------------------------------------------------------------------------------------
Investment Operations Distributions
------------------------------------------ -------------------------------------
Net Asset Net Asset
For the Value, Net Net Realized From Net From Net Value,
Period Beginning Investment and Unrealized Total Investment Realized Total End
Ended (d)(g) of Period Income (Loss) Gain (Loss) Operations Income Gains Distributions of Period
- ------------------------------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 $ 5.86 $ - $ 1.04 $ 1.04 $ - $ - $ - $ 6.90
10/31/2002 6.65 (0.01) (0.78) (0.79) - - - 5.86
10/31/2001 9.81 (0.03) (3.10) (3.13) - (0.03) (0.03) 6.65
10/31/2000 10.00 - (0.19) (0.19) - - - 9.81
- ------------------------------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 5.76 (0.04) 1.02 0.98 - - - 6.74
10/31/2002 6.59 (0.07) (0.76) (0.83) - - - 5.76
10/31/2001 9.80 (0.08) (3.10) (3.18) - (0.03) (0.03) 6.59
10/31/2000 10.00 (0.01) (0.19) (0.20) - - - 9.80
- ------------------------------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 5.76 (0.04) 1.02 0.98 - - - 6.74
10/31/2002 6.59 (0.06) (0.77) (0.83) - - - 5.76
10/31/2001 9.80 (0.09) (3.09) (3.18) - (0.03) (0.03) 6.59
10/31/2000 10.00 (0.01) (0.19) (0.20) - - - 9.80
- ------------------------------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 5.73 (0.04) 1.05 1.01 - - - 6.74
- ------------------------------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 5.78 (0.03) 1.02 0.99 - - - 6.77
10/31/2002 6.60 (0.06) (0.76) (0.82) - - - 5.78
10/31/2001 9.80 (0.08) (3.09) (3.17) - (0.03) (0.03) 6.60
10/31/2000 10.00 (0.01) (0.19) (0.20) - - - 9.80
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
-----------------------------------------------------------------------
Ratio of Expenses
Net Assets, to Average Net Investment
For the End of Net Assets (a) Income (Loss) Portfolio
Period Total Period ----------------------- to Average Turnover
Ended (g) Return (c) (000's) Net (e) Total (f) Net Assets (a) Rate (b)
- ----------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 17.75% $ 26,177 1.55% 2.05% -% 99%
10/31/2002 (11.90) 11,964 1.55 2.39 (0.26) 66
10/31/2001 (31.99) 5,294 1.55 3.26 (0.37) 80
10/31/2000 ( 1.92) 2,173 1.55 25.34 (0.52) 15
- ----------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 17.01 3,877 2.20 2.70 (0.65) 99
10/31/2002 (12.58) 3,251 2.20 3.04 (0.91) 66
10/31/2001 (32.57) 3,400 2.20 3.91 (1.02) 80
10/31/2000 ( 2.01) 582 2.20 25.99 (1.17) 15
- ----------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 17.01 1,292 2.20 2.70 (0.65) 99
10/31/2002 (12.58) 988 2.20 3.04 (0.91) 66
10/31/2001 (32.57) 1,112 2.20 3.91 (1.02) 80
10/31/2000 ( 2.01) 353 2.20 25.99 (1.17) 15
- ----------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 17.63 137 2.20 2.70 (0.65) 99
- ----------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 17.13 723 2.10 2.60 (0.55) 99
10/31/2002 (12.40) 768 2.10 2.94 (0.81) 66
10/31/2001 (32.48) 813 2.10 3.81 (0.92) 80
10/31/2000 ( 1.99) 833 2.10 25.89 (1.07) 15
- ----------------------------------------------------------------------------------------------------------------
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Templeton Great Companies Global 8
IDEX Templeton Great Companies Global
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (continued)
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 are not annualized.
(d) Per share information is calculated based on average number of shares
outstanding for the periods ended 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 (see note 2).
(f) Ratio of Total Expenses to Average Net Assets includes all expenses before
fee waivers and reimbursements by the investment adviser.
(g) IDEX Templeton Great Companies Global ("the Fund") commenced operations on
September 15, 2000. The inception date for the Fund's offering of share
Class L was November 11, 2002.
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Templeton Great Companies Global 9
IDEX Templeton Great Companies Global
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
At October 31, 2003
(all amounts in thousands)
NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
IDEX Mutual Funds is a Massachusetts business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company. IDEX Templeton Great Companies Global ("the
Fund"), part of IDEX Mutual Funds, began operations on September 15, 2000 as
IDEX Great Companies--Global(2). On September 15, 2003, the Fund changed its
name from IDEX Great Companies-Global(2) to IDEX Templeton Great Companies
Global.
In the normal course of business the Fund enters into contracts that contain a
variety of representations and warranties and which provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown, as this would involve future claims that may be made against the Fund
and/or its affiliates that have not yet occurred. However, based on experience,
the Fund expects the risk of loss to be remote.
See the Prospectus and Statement of Additional Information for a description of
the Fund's investment objective.
In preparing the Fund's financial statements in accordance with accounting
principles generally accepted in the United States of America ("GAAP"),
estimates or assumptions (which could differ from actual results) may be used
that affect reported amounts and disclosures. The following policies were
consistently followed by the Fund, in accordance with GAAP.
Multiple class operations and expenses: The Fund currently offers five classes
of shares, each with a public offering price that reflects different sales
charges, if any, and expense levels. Effective November 11, 2002, Class C and M
shares were closed to new investors. Income, non-class specific expenses and
realized and unrealized gains and losses, are allocated daily to each class,
based upon the value of shares outstanding method as permitted under Rule 18f-3
of the 1940 Act. Each class bears its own specific expenses as well as a
portion of general, common expenses.
Security valuations: Fund investments traded on an exchange are valued at the
closing price on the day of valuation on the exchange where the security is
principally traded. With respect to securities traded on the NASDAQ INMS, such
closing price may be the last reported sales price or the NASDAQ Official
Closing Price.
Securities traded in the over-the-counter market and listed securities for
which no sale was reported on that date are valued at the last quoted bid
price.
Debt securities are valued by independent pricing services; however, those that
mature in sixty days or less are valued at amortized cost, which approximates
market.
Other securities for which quotations are not readily available are valued at
fair value determined in good faith, in accordance with procedures established
by and, under the supervision of the Board of Trustees and the Fund's Valuation
Committee.
Cash: The Fund may leave cash overnight in its cash account with the custodian,
Investors Bank & Trust Company ("IBT"). IBT has been contracted on behalf of
the Fund to invest the excess cash into a savings account, which at October 31,
2003, was paying an interest rate of 0.75%.
Securities lending: The Fund may lend securities to enhance fund earnings from
investing cash collateral received in making such loans to qualified borrowers
(typically broker/dealers). The Fund has engaged its custodian bank, IBT, as a
lending agent to administer its securities lending program. IBT earned $1 of
program net income for its services. When the Fund makes a security loan, it
receives cash collateral as protection against the risk that the borrower will
default on the loan, and records an asset for the cash invested collateral and
a liability for the return of the collateral.
Securities on loan are included in Investment securities at value on the
Statement of Assets and Liabilities and remain on the Schedule of Investments.
Loans of securities are required to be secured by collateral at least equal to
102% of the value of the securities at inception of the loan, and not less then
100% thereafter. The Fund may invest cash collateral in short-term money market
instruments including: U.S. Treasury Bills, U.S. agency obligations, commercial
paper, money market mutual funds, repurchase agreements and other highly rated,
liquid investments. During the life of securities loans, the collateral and
securities loaned remain subject to fluctuation in value. IBT marks to market
securities loaned and the collateral each business day. If additional
collateral is due (at least $1), IBT collects additional cash collateral from
the borrowers. Although securities loaned will be fully collateralized at all
times, IBT may experience delays in, or may be prevented from, recovering the
collateral on behalf of the Fund. The Fund may recall a loaned security
position at any time from the borrower through IBT. In the event the borrower
fails to timely return a recalled security, IBT may indemnify the Fund by
purchasing replacement securities for the Fund at its own expense and claiming
the collateral to fund such a purchase. IBT absorbs the loss if the collateral
value is not sufficient to cover the cost of the replacement securities. If
replacement securities are not available, IBT will credit the equivalent cash
value to the Fund.
Income from securities lending is included in the Statement of Operations. The
amounts of collateral and value of securities on loan are included in the
Statement of Assets and Liabilities as well as on the Schedule of Investments.
Security transactions and investment income: Security transactions are recorded
on the trade date. Security gains and losses are calculated on the specific
identification basis. Dividend income is recorded on the ex-dividend date or,
in the case of foreign securities, as soon as the Fund is informed of the
ex-dividend date. Interest income, including accretion of discounts and
amortization of premiums, is recorded on the accrual basis commencing on the
settlement date.
IDEX Mutual Funds Annual Report 2003
IDEX Templeton Great Companies Global 10
IDEX Templeton Great Companies Global
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 1-(continued)
Foreign currency denominated investments: The accounting records of the Fund
are maintained in U.S. dollars. Securities and other assets and liabilities
denominated in foreign currencies are translated into U.S. dollars at the
closing exchange rate each day. The cost of foreign securities is translated at
the exchange rate in effect when the investment was acquired. The Fund combines
fluctuations from currency exchange rates and fluctuations in value when
computing net realized and unrealized gains or losses from investments.
Net foreign currency gains and losses resulting from changes in exchange rates
include: 1) foreign currency fluctuations between trade date and settlement
date of investment security transactions; 2) gains and losses on forward
foreign currency contracts; and 3) the difference between the receivable
amounts of interest and dividends recorded in the accounting records in U.S.
dollars and the amounts actually received.
Foreign currency denominated assets may involve risks not typically associated
with domestic transactions, including unanticipated movements in exchange
currency rates, the degree of government supervision and regulation of security
markets, and the possibility of political or economic instability.
Forward foreign currency contracts: The Fund may enter into forward foreign
curency contracts to hedge against exchange rate risk arising from investments
in securities denominated in foreign currencies. Contracts are valued at the
contractual forward rate and are marked to market daily, with the change in
value recorded as an unrealized gain or loss. When the contracts are closed a
realized gain or loss is incurred. Risks may arise from changes in value of the
underlying currencies and from the possible inability of counterparties to meet
the terms of their contracts. Open forward currency contracts at October 31,
2003, are listed in the Schedule of Investments.
Dividend distributions: Distributions to shareholders are recorded on the
ex-dividend date and are determined in accordance with Federal income tax
regulations which may differ from GAAP.
NOTE 2. RELATED PARTY TRANSACTIONS
AEGON/Transamerica Fund Advisers, Inc. ("ATFA") is the Fund's investment
adviser. AEGON/Transamerica Fund Services, Inc. ("ATFS") is the Fund's
administrator. AFSG Securities Corp. ("AFSG") is the Fund's
distributor/principal underwriter. AEGON/Transamerica Investor Services, Inc.
("ATIS") is the 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. AUSA and WRL are wholly owned indirect
subsidiaries of AEGON NV, a Netherlands corporation.
The following schedule reflects the percentage of fund assets owned by
affiliated mutual funds (ie: through the assets allocation funds)
Net % of
Assets Net Assets
-------- -----------
IDEX Asset Allocation
Conservative Portfolio 5,165 16%
IDEX Asset Allocation Growth 3,154 10%
IDEX Asset Allocation Moderate
Growth 6,438 20%
IDEX Asset Allocation Moderate 4,954 15%
-----
61%
On September 15th, 2003, Templeton Investment Counsel LLC became a
co-subadviser of the Fund, managing the foreign portion.
Great Companies, LLC is both an affiliate of the Fund and a co-sub-adviser of
the Fund, managing the domestic portion.
Investment advisory fees: The Fund pays management fees to ATFA based on
average daily net assets ("ANA") at the following stated break points:
0.80% of the first $500 million of ANA
0.70% of ANA over $500 million
ATFA currently voluntarily waives its advisory fee and will reimburse the Fund
to the extent that operating expenses, excluding 12b-1 fees, exceed the
following stated annual limit:
1.20% Expense Limit
If total fund expenses fall below the annual expense limitations agreed to by
the adviser within the succeeding three years, the Fund may be required to pay
the advisor a portion or all of the waived advisory fees.
Advisory Fee Available for
Waived Recapture Through
-------------- ------------------
Fiscal Year 2003 127 10/31/2006
Fiscal Year 2002 115 10/31/2005
Fiscal Year 2001 144 10/31/2004
Distribution and service fees: The Fund has a 12b-1 distribution plan under the
1940 Act pursuant to which an annual fee, based on average daily net assets, is
paid to the distributor for various disbursements such as broker-dealer account
servicing fees and other promotional expenses of the Fund. The 12b-1 fee for
the Fund is comprised of a 0.25% service fee and the remaining amount is an
asset-based sales charge/distribution fee. The Fund is authorized under the
12b-1 plan to pay fees on each class up to the following limits:
Class A 0.35%
Class B 1.00%
Class C 1.00%
Class L 1.00%
Class M 0.90%
IDEX Mutual Funds Annual Report 2003
IDEX Templeton Great Companies Global 11
IDEX Templeton Great Companies Global
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 2-(continued)
Underwriter commissions relate to front-end sales charges imposed for Class A
and M shares and contingent deferred sales charges from Classes B, L, M and
certain A share redemptions. For the year ended October 31, 2003, the
underwriter commissions were as follows:
Received by Underwriter $ 22
Retained by Underwriter 3
Contingent Sales Charges 10
Administrative services: The Fund has entered into an agreement with ATFS for
financial and legal fund administration services, which include such items as
compliance, expenses, financial statements and other reporting, distributions,
tax returns, prospectus preparation, board of trustees meeting support and
other legal matters. Transfer agent fees are reflected separately from
Administration fees on the Statement of Operations. The Legal fees on the
Statement of Operations are for fees paid to external legal counsel. ATFS
provides its services to the Fund at cost and is reimbursed monthly.
Transfer agent fees: The Fund incurs ATIS annual per-account charges (not in
thousands) of $20.00 for each open shareholder account and $1.63 for each
closed account maintained, and certain out of pocket expenses.
Deferred compensation plan: Each eligible Fund Trustee may elect participation
in the Deferred Compensation Plan ("the Plan"). Under the Plan, such Trustees
may defer payment of a percentage of their total fees earned as a Fund Trustee.
These deferred amounts may be invested in any IDEX Fund. At October 31, 2003,
the value of invested plan amounts was $1. Invested plan amounts and the total
liability for deferred compensation to the Trustees under the Plan at October
31, 2003, are included in Net assets in the accompanying Statement of Assets
and Liabilities.
NOTE 3. INVESTMENT TRANSACTIONS
The cost of securities purchased and proceeds from securities sold (excluding
short-term securities) for the year ended October 31, 2003, were as follows:
Purchases of securities:
Long-Term excluding U.S. Government $ 33,490
U.S. Government -
Proceeds from maturities and sales of securities:
Long-Term excluding U.S. Government 23,616
U.S. Government -
NOTE 4. FEDERAL INCOME TAX MATTERS
The Fund has not made any provision for federal income or excise taxes due to
its policy to distribute all of its taxable income and capital gains to its
shareholders and otherwise qualify as a regulated investment company under the
Internal Revenue Code. Income and capital gain distributions are determined in
accordance with income tax regulations, which may differ from GAAP. These
differences are primarily due to differing treatments for items including, but
not limited to, wash sales, foreign currency transactions, net operating losses
and capital loss carryforwards.
Reclassifications between Undistributed net investment income (loss),
Undistributed net realized capital gains (loss) and Shares of beneficial
interest are made to reflect income and gains available for distribution under
federal tax regulations. Results of operations and net assets are not effected
by these reclassifications. These reclassifications are as follows:
Shares of beneficial interest, unlimited
shares authorized $ (127)
Undistributed net investment income (loss) 31
Accumulated net realized gain (loss) from
investment securities 96
The tax basis components of distributable earnings as of October 31, 2003, are
as follows:
Undistributed Ordinary Income $ -
========
Undistributed Long-term Capital Gains $ -
========
Capital Loss Carryforward $ (1,844)
========
Net Unrealized Appreciation (Depreciation) $ 1,656
========
The capital loss carryforward utilized as of October 31, 2003 was $784. The
capital loss carryforwards are available to offset future realized capital
gains through the periods listed:
Capital Loss
Carryforward Available through
- -------------- ------------------
$ 1,008 October 31, 2009
836 October 31, 2010
The aggregate cost of investments and composition of unrealized appreciation
(depreciation) for federal income tax purposes as of October 31, 2003, are as
follows:
Federal Tax Cost Basis $ 32,365
========
Unrealized Appreciation $ 2,318
Unrealized (Depreciation) (662)
--------
Net Unrealized Appreciation (Depreciation) $ 1,656
========
IDEX Mutual Funds Annual Report 2003
IDEX Templeton Great Companies Global 12
- --------------------------------------------------------------------------------
Report of Independent Certified Public Accountants
To the Board of Trustees and Shareholders of
IDEX Templeton Great Companies Global
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of IDEX Templeton Great Companies
Global (the "Fund") (one of the portfolios constituting the IDEX Mutual Funds)
at October 31, 2003, and the results of its operations, the changes in its net
assets and the financial highlights for each of the periods indicated, in
conformity with accounting principles generally accepted in the United States
of America. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Fund's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with auditing standards generally accepted in the
United States of America, which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits, which included confirmation of securities at October 31, 2003 by
correspondence with the custodian and brokers, provide a reasonable basis for
our opinion.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Tampa, Florida
December 18, 2003
IDEX Mutual Funds Annual Report 2003
IDEX Templeton Great Companies Global 13
IDEX Transamerica Conservative High-Yield Bond
- --------------------------------------------------------------------------------
MARKET ENVIRONMENT
The economy ended the fiscal year on a very strong note. Third quarter Gross
Domestic Product ("GDP") registered a revised advance of 8.2%, one of the
strongest quarters in nearly two decades. Strong personal consumption
expenditures along with a resurgence of capital spending contributed to most of
the increase. Surprisingly, inventories were liquidated once again, the third
straight quarterly occurrence.
PERFORMANCE
For the year ended October 31, 2003, IDEX Transamerica Conservative High-Yield
Bond returned 22.74%. By comparison its benchmark, Merrill Lynch High Yield
Master Index, returned 31.95%.
STRATEGY REVIEW
The portfolio is exposed to duration risk through the required holding of
thirty-five percent of investment grade debt. The portfolio is currently
positioned with a neutral weighting versus target duration, but would expect a
more defensive position as we move into and through 2004.
Our strategy of over-weighting credit and maintaining a neutral bias on duration
during the fiscal year has worked out well. Although the environment earlier in
the fiscal year was less than optimistic, given the lackluster economy and
geopolitical risks from the Iraqi war, the portfolio continued its stance of
heavy credit and down in credit quality, as the valuation level was more than
compensating for the risk taken. The portfolio did however, under-perform its
customized benchmark due primarily to the significant outperformance of
distressed credit, which is not an area of focus for the portfolio.
/s/ David R. Halfpap
David R. Halfpap
/s/ Bradley J. Beman
Bradley J. Beman
Co-Fund Managers
AEGON USA Investment Management, LLC
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Conservative High-Yield Bond 1
IDEX Transamerica Conservative High-Yield Bond
- --------------------------------------------------------------------------------
Comparison of change in value of $10,000 investment in Class A shares and its
comparative index.
Growth of $10,000
Inception of 10/31/93 through 10/31/03
Investment less sales charges - $9,525
[The following table was depicted as a mountain chart in the printed material.]
DATE Class A MLHYM
---------- --------- ---------
10/31/1993 9,525 10,000
12/31/1993 9,518 10,161
3/31/1994 9,249 9,973
6/30/1994 9,113 9,857
9/30/1994 9,108 9,992
12/31/1994 9,133 10,040
3/31/1995 9,715 10,648
6/30/1995 10,370 11,324
9/30/1995 10,552 11,651
12/31/1995 10,820 12,036
3/31/1996 10,852 12,211
6/30/1996 10,974 12,378
9/30/1996 11,358 12,868
12/31/1996 11,835 13,374
3/31/1997 11,862 13,514
6/30/1997 12,355 14,156
9/30/1997 12,878 14,710
12/31/1997 13,206 15,090
3/31/1998 13,362 15,510
6/30/1998 13,655 15,770
9/30/1998 13,775 15,206
12/31/1998 13,775 15,642
3/31/1999 13,842 15,812
6/30/1999 13,693 15,918
9/30/1999 13,671 15,719
12/31/1999 13,728 15,888
3/31/2000 13,736 15,602
6/30/2000 13,798 15,700
9/30/2000 14,165 15,909
12/31/2000 14,304 15,276
3/31/2001 15,071 16,234
6/30/2001 14,868 16,025
9/30/2001 14,988 15,373
12/31/2001 14,925 16,234
3/31/2002 14,953 16,552
6/30/2002 14,531 15,531
9/30/2002 14,182 15,045
12/31/2002 14,681 16,049
3/31/2003 15,412 17,156
6/30/2003 16,509 18,815
9/30/2003 16,889 19,291
10/31/2003 17,110 19,685
Average Annual Total Return for Periods Ended 10/31/03
- --------------------------------------------------------------------------------
From Inception
1 year 5 years 10 years Inception Date
- --------------------------------------------------------------------------------
Class A (NAV) 22.74% 4.88% 6.03% 8.72% 6/14/85
Class A (POP) 16.91% 3.87% 5.52% 8.43% 6/14/85
MLHYM(1) 31.95% 5.65% 7.00% 9.76% 6/14/85
- --------------------------------------------------------------------------------
Class B (NAV) 21.94% 4.22% - 5.50% 10/1/95
Class B (POP) 16.94% 4.05% - 5.50% 10/1/95
- --------------------------------------------------------------------------------
Class C (NAV) 21.94% - - 5.20% 11/1/99
- --------------------------------------------------------------------------------
Class L (NAV) - - - 19.52% 11/11/02
Class L (POP) - - - 17.52% 11/11/02
- --------------------------------------------------------------------------------
Class M (NAV) 22.06% 4.33% 5.41% 5.48% 10/1/93
Class M (POP) 19.84% 4.12% 5.30% 5.38% 10/1/93
- --------------------------------------------------------------------------------
NOTES
(1) The Merrill Lynch High Yield Master (MLHYM) 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 Micropal(R)(C) 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 4.75% 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 shares, (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 high-yield bonds ("junk bonds") may be subject to greater
volatility and risks as the income derived from these securities is not
guaranteed and may be unpredictable.
Periods less than 1 year represent total return and are not annualized.
This material must be preceded or accompanied by a current prospectus, which
includes specific contents regarding the investment objectives and policies of
this fund.
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Conservative High-Yield Bond 2
IDEX Transamerica Conservative High-Yield Bond
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
At October 31, 2003
(all amounts except share amounts in thousands)
Principal Value
- -----------------------------------------------------------------------------------
FOREIGN GOVERNMENT OBLIGATIONS (0.4%)
Republic of Colombia
9.75%, due 04/23/2009 $ 1,000 $ 1,080
---------
Total Foreign Government Obligations (cost: $930) 1,080
---------
CORPORATE DEBT SECURITIES (92.2%)
Aerospace (0.8%)
K&F Industries, Inc.
9.63%, due 12/15/2010 1,000 1,120
Textron Inc.
4.50%, due 08/01/2010 1,000 994
Air Transportation (0.4%)
American Airlines, Inc.
3.86%, due 07/09/2010 1,000 983
Amusement & Recreation Services (2.6%)
MGM MIRAGE
6.88%, due 02/06/2008 2,000 2,108
6.00%, due 10/01/2009 1,000 1,013
Mohegan Tribal Gaming Authority-144A
6.38%, due 07/15/2009 1,000 1,024
Premier Parks Inc. (a)
9.75%, due 06/15/2007 2,000 2,030
Speedway Motorsports, Inc.
6.75%, due 06/01/2013 1,000 1,018
Automotive (4.2%)
ArvinMeritor, Inc.
6.75%, due 03/15/2008 3,000 2,940
DaimlerChrysler North America Holding
Corporation
4.05%, due 06/04/2008 1,000 967
Dana Corporation (a)
6.25%, due 03/01/2004 1,000 1,008
General Motors Corporation (a)
7.13%, due 07/15/2013 2,000 2,081
Navistar International Corporation
9.38%, due 06/01/2006 2,000 2,189
Tenneco Automotive Inc.
10.25%, due 07/15/2013 2,500 2,763
Beverages (0.4%)
Cadbury Schweppes PLC-144A
3.88%, due 10/01/2008 1,000 992
Business Credit Institutions (1.3%)
Ford Motor Credit Company
6.50%, due 01/25/2007 500 516
5.80%, due 01/12/2009 2,000 1,948
HVB Funding Trust III-144A (a)
9.00%, due 10/22/2031 1,000 1,162
Principal Value
- -----------------------------------------------------------------------------------
Business Services (3.2%)
Clear Channel Communications, Inc.
4.63%, due 01/15/2008 $ 1,000 $ 1,029
7.65%, due 09/15/2010 1,000 1,165
R.H. Donnelley Financial Corporation I-144A
10.88%, due 12/15/2012 2,000 2,384
Universal Compression, Inc.
7.25%, due 05/15/2010 2,000 2,080
Universal Hospital Services, Inc.-144A
10.13%, due 11/01/2011 2,000 2,090
Chemicals & Allied Products (4.9%)
Eastman Chemical Company
3.25%, due 06/15/2008 1,000 948
Elizabeth Arden, Inc. (a)
11.75%, due 02/01/2011 1,000 1,145
Equistar Chemicals, LP
10.13%, due 09/01/2008 1,000 1,050
Equistar Chemicals, LP-144A
10.63%, due 05/01/2011 2,000 2,090
Huntsman International LLC
9.88%, due 03/01/2009 1,000 1,055
Huntsman International LLC-144A
11.63%, due 10/15/2010 1,500 1,440
Lyondell Chemical Company
10.50%, due 06/01/2013 1,000 1,030
Monsanto Company
4.00%, due 05/15/2008 2,000 1,992
Nalco Company-144A
8.88%, due 11/15/2013 2,000 2,080
Scotts Company (The)-144A
6.63%, due 11/15/2013 1,000 1,013
Commercial Banks (0.4%)
Popular, Inc
6.13%, due 10/15/2006 1,000 1,088
Communication (3.8%)
Adelphia Communications Corporation (d)
10.25%, due 11/01/2006 1,000 805
Charter Communications Holdings LLC
8.63%, due 04/01/2009 (a) 2,000 1,605
0.00%, due 04/01/2011 (g) 1,000 755
Comcast Cable Communications, Inc.
6.75%, due 01/30/2011 2,000 2,213
CSC Holdings, Inc.
7.88%, due 12/15/2007 1,000 1,023
Intelsat, Ltd.-144A
5.25%, due 11/01/2008 2,000 2,020
SpectraSite, Inc.-144A (a)
8.25%, due 05/15/2010 2,000 2,120
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Conservative High-Yield Bond 3
IDEX Transamerica Conservative High-Yield Bond
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Principal Value
- ------------------------------------------------------------------------------------
Communications Equipment (1.5%)
L-3 Communications Corporation
7.63%, due 06/15/2012 $ 1,000 $ 1,090
6.13%, due 07/15/2013 2,000 1,980
Nortel Networks Corporation
6.13%, due 02/15/2006 1,000 1,024
Computer & Data Processing Services (0.8%)
Unisys Corporation
7.88%, due 04/01/2008 2,000 2,083
Construction (0.7%)
Centex Corporation
5.80%, due 09/15/2009 750 797
D.R. Horton, Inc.
6.88%, due 05/01/2013 1,000 1,053
Drug Stores & Proprietary Stores (0.8%)
Medco Health Solutions, Inc. (a)
7.25%, due 08/15/2013 1,000 1,064
Rite Aid Corporation
9.50%, due 02/15/2011 1,000 1,125
Electric Services (7.3%)
AES Corporation (The)-144A
8.75%, due 05/15/2013 2,000 2,135
Calpine Corporation-144A
8.50%, due 07/15/2010 3,000 2,745
CenterPoint Energy Resources Corp.-144A
7.88%, due 04/01/2013 2,000 2,272
Dynegy Holdings Inc.
7.67%, due 11/08/2016 2,000 1,800
Dynegy Holdings Inc.-144A (a)
10.13%, due 07/15/2013 3,000 3,255
Elwood Energy LLC
8.16%, due 07/05/2026 1,891 1,872
Illinova Corporation
11.50%, due 12/15/2010 1,000 1,195
Nevada Power Company
8.25%, due 06/01/2011 4,000 4,180
Texas-New Mexico Power Company- 144A
6.13%, due 06/01/2008 1,000 1,009
Electric, Gas & Sanitary Services (0.4%)
NiSource Finance Corporation
7.88%, due 11/15/2010 1,000 1,183
Electronic & Other Electric Equipment (0.8%)
Rayovac Corporation-144A
8.50%, due 10/01/2013 2,000 2,080
Electronic Components & Accessories (3.1%)
Amkor Technology, Inc.-144A (a)
7.75%, due 05/15/2013 2,000 2,130
Principal Value
- ------------------------------------------------------------------------------------
Electronic Components & Accessories (continued)
Flextronics International Ltd.-144A (a)
6.50%, due 05/15/2013 $ 1,000 $ 988
ON Semiconductor Corporation (e)
13.00%, due 05/15/2008 1,000 1,160
Tyco International Group SA
5.88%, due 11/01/2004 2,000 2,063
6.38%, due 02/15/2006 2,000 2,118
Environmental Services (0.4%)
Allied Waste North America, Inc.
7.88%, due 04/15/2013 1,000 1,073
Food & Kindred Products (2.7%)
Altria Group, Inc
7.20%, due 02/01/2007 2,000 2,122
Del Monte Foods Company-144A
8.63%, due 12/15/2012 3,000 3,315
Kraft Foods, Inc.
4.00%, due 10/01/2008 1,000 997
Tyson Foods, Inc.
7.25%, due 10/01/2006 1,000 1,104
Food Stores (1.7%)
Ingles Markets, Incorporated
8.88%, due 12/01/2011 1,000 963
Pathmark Stores, Inc.-144A
8.75%, due 02/01/2012 2,000 2,050
Stater Bros. Holdings Inc.
10.75%, due 08/15/2006 1,500 1,581
Gas Production & Distribution (2.3%)
El Paso CGP Company
7.75%, due 06/15/2010 1,000 843
Northern Border Partners, L.P.
8.88%, due 06/15/2010 1,000 1,200
Northwest Pipeline Corporation
8.13%, due 03/01/2010 2,000 2,204
Williams Companies, Inc. (The)
8.63%, due 06/01/2010 2,000 2,189
Health Services (2.9%)
Manor Care, Inc.
6.25%, due 05/01/2013 2,000 2,053
National Nephrology Associates, Inc.-144A
9.00%, due 11/01/2011 1,500 1,549
NeighborCare, Inc.-144A
6.88%, due 11/15/2013 1,500 1,526
Tenet Healthcare Corporation
5.38%, due 11/15/2006 3,000 2,880
Holding & Other Investment Offices (4.1%)
Arch Western Finance LLC-144A
6.75%, due 07/01/2013 2,000 2,070
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Conservative High-Yield Bond 4
IDEX Transamerica Conservative High-Yield Bond
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Principal Value
- ------------------------------------------------------------------------------------
Holding & Other Investment Offices (continued)
Corrections Corporation of
America-144A
7.50%, due 05/01/2011 $ 1,000 $ 1,045
FelCor Lodging LP (e)
10.00%, due 09/15/2008 1,000 1,075
Matis Reef Ltd.-144A
4.69%, due 11/14/2008 2,000 2,000
TRAINS HY-2003-1-144A (e)
8.66%, due 05/15/2013 4,857 5,351
Hotels & Other Lodging Places (3.4%)
Hilton Hotels Corporation
7.63%, due 12/01/2012 2,000 2,212
John Q. Hammons Hotels, Inc.-Series B
8.88%, due 05/15/2012 1,500 1,635
Las Vegas Sands, Inc. (Venetian Casino
Resort LLC)
11.00%, due 06/15/2010 1,000 1,154
Park Place Entertainment Corporation
7.50%, due 09/01/2009 2,000 2,179
8.13%, due 05/15/2011 (a) 1,000 1,093
7.00%, due 04/15/2013 1,000 1,043
Industrial Machinery & Equipment (0.8%)
SPX Corporation
7.50%, due 01/01/2013 2,000 2,135
Lumber & Wood Products (1.0%)
Georgia-Pacific Corporation
8.88%, due 02/01/2010 1,000 1,143
Scotia Pacific Company LLC
7.11%, due 01/20/2014 2,000 1,534
Medical Instruments & Supplies (0.6%)
Bard, (C.R.) Inc.
6.70%, due 12/01/2026 1,500 1,652
Metal Cans & Shipping Containers (0.4%)
Crown European Holdings SA
10.88%, due 03/01/2013 1,000 1,140
Metal Mining (0.3%)
Rio Tinto Finance (USA) Limited
2.63%, due 09/30/2008 1,000 952
Mining (0.8%)
Peabody Energy Corporation
6.88%, due 03/15/2013 2,000 2,105
Motion Pictures (1.9%)
Liberty Media Corporation
7.88%, due 07/15/2009 1,000 1,130
Time Warner Entertainment Company, LP
10.15%, due 05/01/2012 1,000 1,325
Time Warner Inc.
7.75%, due 06/15/2005 1,000 1,084
7.48%, due 01/15/2008 (a) 1,500 1,688
Principal Value
- ------------------------------------------------------------------------------------
Motor Vehicles, Parts & Supplies (0.9%)
TRW Automotive Inc.-144A (a)
11.00%, due 02/15/2013 $ 2,000 $ 2,359
Oil & Gas Extraction (4.8%)
Alberta Energy Company Ltd.
7.38%, due 11/01/2031 1,000 1,166
Chesapeake Energy Corporation
8.38%, due 11/01/2008 1,000 1,095
Chesapeake Energy Corporation-144A (a)
7.50%, due 09/15/2013 1,000 1,075
Forest Oil Corporation
8.00%, due 12/15/2011 500 538
7.75%, due 05/01/2014 1,000 1,040
Key Energy Services, Inc.
6.38%, due 05/01/2013 1,000 1,005
Louisana Land and Exploration
Company (The)
7.63%, due 04/15/2013 2,000 2,293
PDVSA Finance Ltd.
6.45%, due 02/15/2004 750 752
PDVSA Finance Ltd.-Series 1998-1B
6.65%, due 02/15/2006 1,500 1,470
Stone Energy Corporation
8.25%, due 12/15/2011 1,000 1,070
XTO Energy, Inc.
6.25%, due 04/15/2013 2,000 2,088
Paper & Allied Products (1.9%)
Cascades, Inc. (e)
7.25%, due 02/15/2013 1,000 1,045
Cascades, Inc.-144A (e)
7.25%, due 02/15/2013 1,000 1,045
Graphic Packaging Corporation-144A
8.50%, due 08/15/2011 2,000 2,204
Smurfit-Stone Container Corporation
8.25%, due 10/01/2012 1,000 1,050
Paper & Paper Products (0.8%)
MDP Acquisitions PLC
9.63%, due 10/01/2012 2,000 2,219
Paperboard Containers & Boxes (0.7%)
Jefferson Smurfit Corporation (U.S.)
7.50%, due 06/01/2013 2,000 2,040
Personal Credit Institutions (0.4%)
General Motors Acceptance Corporation (a)
5.13%, due 05/09/2008 1,000 1,016
Personal Services (0.7%)
Service Corporation International
7.70%, due 04/15/2009 2,000 2,075
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Conservative High-Yield Bond 5
IDEX Transamerica Conservative High-Yield Bond
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Principal Value
- ----------------------------------------------------------------------------------
Petroleum Refining (0.8%)
Tesoro Petroleum Corporation
8.00%, due 04/15/2008 $ 2,000 $ 2,120
Primary Metal Industries (1.1%)
Oregon Steel Mills, Inc.
10.00%, due 07/15/2009 1,000 820
United States Steel Corporation
9.75%, due 05/15/2010 2,000 2,110
Printing & Publishing (6.1%)
American Color Graphics, Inc.-144A
10.00%, due 06/15/2010 2,000 2,145
Dex Media East LLC (Dex Media
Finance Co.)
9.88%, due 11/15/2009 1,000 1,133
Dex Media West LLC (Dex Media Finance
Co.)-144A
8.50%, due 08/15/2010 2,000 2,179
Houghton Mifflin Co. (a)
9.88%, due 02/01/2013 2,000 2,163
Moore North America Finance, Inc.-144A
7.88%, due 01/15/2011 2,000 2,160
News America Incorporated (a)
6.63%, due 01/09/2008 1,000 1,110
Primedia Inc.
8.88%, due 05/15/2011 2,000 2,065
Quebecor World Inc.
7.75%, due 02/15/2009 2,000 2,091
Quebecor World Inc.-144A
4.88%, due 11/15/2008 2,000 1,998
Radio & Television Broadcasting (2.1%)
CanWest Media Inc.
10.63%, due 05/15/2011 1,000 1,145
7.63%, due 04/15/2013 1,000 1,093
Susquehanna Media Co.
7.38%, due 04/15/2013 2,000 2,065
Videotron Ltee-144A
6.88%, due 01/15/2014 1,500 1,549
Research & Testing Services (0.4%)
Quintiles Transnational Corp.-144A
10.00%, due 10/01/2013 1,000 1,055
Restaurants (0.4%)
YUM! Brands, Inc.
7.70%, due 07/01/2012 1,000 1,128
Rubber & Misc. Plastic Products (0.8%)
Sealed Air Corporation-144A
5.38%, due 04/15/2008 2,000 2,079
Savings Institutions (1.6%)
People's Bank
7.20%, due 12/01/2006 2,300 2,520
Principal Value
- ----------------------------------------------------------------------------------
Savings Institutions (continued)
Washington Mutual, Inc.
4.00%, due 01/15/2009 $ 2,000 $ 1,984
Stone, Clay & Glass Products (1.2%)
Anchor Glass Container Corporation
11.00%, due 02/15/2013 1,000 1,140
Owens-Brockway Glass Container Inc.
7.75%, due 05/15/2011 1,000 1,055
8.75%, due 11/15/2012 1,000 1,095
Telecommunications (3.8%)
ACC Escrow Corporation-144A
10.00%, due 08/01/2011 2,000 2,179
BT Group PLC (f)
8.38%, due 12/15/2010 1,000 1,208
Cincinnati Bell Inc.-144A
8.38%, due 01/15/2001 1,000 1,000
France Telecom (f)
9.00%, due 03/01/2011 1,000 1,206
Nextel Communications, Inc.
9.38%, due 11/15/2009 1,000 1,090
Qwest Capital Funding, Inc.
7.00%, due 08/03/2009 2,000 1,860
7.90%, due 08/15/2010 2,000 1,910
Transportation Equipment (0.7%)
Westinghouse Air Brake Technologies
Corporation-144A
6.88%, due 07/31/2013 2,000 2,055
Trucking & Warehousing (0.8%)
Iron Mountain Incorporated
7.75%, due 01/15/2015 2,000 2,135
Water Transportation (1.2%)
Royal Caribbean Cruises Ltd. (a)
7.00%, due 10/15/2007 1,000 1,043
8.75%, due 02/02/2011 2,000 2,229
Wholesale Trade Nondurable Goods (0.3%)
Nash-Finch Company-Series B
8.50%, due 05/01/2008 1,000 945
---------
Total Corporate Debt Securities (cost: $243,682) 255,378
---------
Shares Value
- --------------------------------------------------------------------------------
PREFERRED STOCKS (0.8%)
Holding & Other Investment Offices (0.8%)
Duke Realty Corporation (e) 40,000 $ 2,111
---------
Total Preferred Stocks (cost:$2,008) 2,111
---------
COMMON STOCKS (0.0%)
Printing & Publishing (0.0%)
Golden Boks Family Entertainment, Inc. (a) 63,750 (c)
---------
Total Common Stocks (cost:$168) (c)
---------
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Conservative High-Yield Bond 6
IDEX Transamerica Conservative High-Yield Bond
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Principal Value
- ---------------------------------------------------------------------------------
SECURITY LENDING COLLATERAL (9.1%)
Debt (8.0%)
Bank Notes (0.9%)
Canadian Imperial Bank of Commerce
1.12%, due 11/04/2003 $ 1,095 $ 1,095
Fleet National Bank
1.06%, due 01/21/2004 1,533 1,533
Euro Dollar Terms (4.5%)
Bank of Montreal
1.03%, due 11/13/2003 876 876
1.04%, due 11/14/2003 769 769
Bank of Nova Scotia (The)
1.06%, due 11/12/2003 438 438
Bank of Scotland
1.04%, due 11/14/2003 876 876
Citigroup Inc.
1.08%, due 01/05/2004 1,314 1,314
Credit Agricole Indosuez
1.08%, due 01/06/2004 964 964
Den Danske Bank
1.04%, due 11/10/2003 438 438
1.08%, due 01/20/2004 1,314 1,314
Royal Bank of Canada
1.04%, due 11/24/2003 1,095 1,095
1.06%, due 12/08/2003 438 438
Royal Bank of Scotland Group PLC (The)
1.08%, due 01/15/2004 1,314 1,314
SouthTrust Bank
1.08%, due 01/16/2004 1,314 1,314
Wells Fargo & Company
1.04%, due 11/20/2003 1,314 1,314
Principal Value
- ---------------------------------------------------------------------------------
Promissory Notes (0.6%)
Goldman Sachs Group, Inc. (The)
1.15%, due 11/03/2003 $ 1,533 $ 1,533
Repurchase Agreements (2.0%)(b)
Goldman Sachs Group, Inc. (The)
1.10% Repurchase Agreement dated
10/31/2003 to be repurchased at $438
on 11/03/2003 438 438
Merrill Lynch & Co., Inc.
1.10% Repurchase Agreement dated
10/31/2003 to be repurchased at $5,036
on 11/03/2003 5,036 5,036
Shares Value
- ---------------------------------------------------------------------------------
Investment Companies (1.1%)
Money Market Funds (1.1%)
Merrimac Cash Series Fund-
Premium Class
1-day yield of 0.97% 3,065,945 $ 3,066
---------
Total Security Lending Collateral (cost: $25,165) 25,165
---------
Total Investment Securities (cost: $271,953) $ 283,734
=========
SUMMARY:
Investments, at value 102.5 % $ 283,734
Liabilities in excess of other assets (2.5)% (6,865)
--------- ---------
Net assets 100.0 % $ 276,869
========= =========
NOTES TO SCHEDULE OF INVESTMENTS:
(a) At October 31, 2003, all or a portion of this security is on loan (see Note
1). The value at October 31, 2003, of all securities on loan is $24,592.
(b) Cash collateral for the Repurchase Agreements, valued at $5,584, 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.
(c) Value is less than $1.
(d) Securities are currently in default on interest payments.
(e) Floating or variable rate note. Rate is listed as of October 31, 2003.
(f) Securities are stepbonds. Coupon steps up or down by 25BP for each rating
upgrade or downgrade by Standard and Poor's or Moody's for each notch below
A-/A3.
(g) Securities are stepbonds. Charter Communications Holdings LLC has an coupon
rate of 0.00% until 04/01/2004, thereafter the coupon rate will be 9.92%.
DEFINITIONS:
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 financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Conservative High-Yield Bond 7
IDEX Transamerica Conservative High-Yield Bond
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
At October 31, 2003
(all amounts except per share amounts in thousands)
Assets:
Investment securities, at value (cost: $271,953)
(including $24,592 of securities loaned) $ 283,734
Cash 25,087
Receivables:
Investment securities sold 1,022
Shares of beneficial interest sold 2,652
Interest 5,179
Other 41
---------
317,715
---------
Liabilities:
Investment securities purchased 15,107
Accounts payable and accrued liabilities:
Shares of beneficial interest redeemed 204
Management and advisory fees 136
Distribution fees 122
Transfer agent fees 38
Dividends to shareholders 2
Payable for securities on loan 25,165
Other 72
---------
40,846
---------
Net Assets $ 276,869
=========
Net Assets Consist of:
Shares of beneficial interest, unlimited shares authorized $ 278,722
Undistributed net investment income (loss) 625
Accumulated net realized gain (loss) from investment
securities (14,255)
Net unrealized appreciation (depreciation) on investment
securities 11,777
---------
Net Assets $ 276,869
=========
Shares Outstanding:
Class A 21,325
Class B 5,675
Class C 1,925
Class L 926
Class M 636
Net Asset Value Per Share:
Class A $ 9.08
Class B 9.08
Class C 9.08
Class L 9.08
Class M 9.08
Maximum Offering Price Per Share (a):
Class A $ 9.53
Class M 9.17
(a) 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.
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the year ended October 31, 2003
(all amounts in thousands)
Investment Income:
Interest $ 13,832
Dividends 160
Income from loaned securities-net 59
--------
14,051
--------
Expenses:
Management and advisory fees 1,081
Transfer agent fees 250
Printing and shareholder reports 37
Custody fees 38
Administration fees 32
Legal fees 9
Auditing and accounting fees 21
Trustees fees 12
Registration fees 74
Other 8
Distribution and service fees:
Class A 399
Class B 437
Class C 134
Class L 36
Class M 53
--------
Total expenses 2,621
--------
Net Investment Income (Loss) 11,430
--------
Net Realized and Unrealized Gain (Loss):
Realized gain (loss) from investment securities (4,706)
Increase (decrease) in unrealized appreciation
(depreciation) on investment securities 27,479
--------
Net Gain (Loss) on Investment Securities 22,773
--------
Net Increase (Decrease) in Net Assets Resulting
from Operations $ 34,203
========
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Conservative High-Yield Bond 8
IDEX Transamerica Conservative High-Yield Bond
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended
(all amounts in thousands)
October 31, October 31,
2003 2002
---------- ------------
Increase (Decrease) In Net Assets From:
Operations:
Net investment income (loss) $ 11,430 $ 6,448
Net realized gain (loss) from investment
securities (4,706) (5,400)
Net unrealized appreciation
(depreciation) on investment
securities 27,479 (10,432)
--------- ---------
34,203 (9,384)
--------- ---------
Distributions to Shareholders:
From net investment income:
Class A (7,408) (3,645)
Class B (2,630) (2,090)
Class C (796) (482)
Class L (198) -
Class M (368) (459)
--------- ---------
(11,400) (6,676)
--------- ---------
From net realized gains:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
--------- ---------
- -
--------- ---------
Capital Share Transactions:
Proceeds from shares sold:
Class A 182,483 38,187
Class B 28,567 15,891
Class C 14,942 7,572
Class L 9,354 -
Class M 1,902 2,479
--------- ---------
237,248 64,129
--------- ---------
Dividends and distributions reinvested:
Class A 6,615 2,915
Class B 1,509 1,419
Class C 305 333
Class L 101 -
Class M 256 300
--------- ---------
8,786 4,967
--------- ---------
Cost of shares redeemed:
Class A (70,217) (23,048)
Class B (15,455) (16,144)
Class C (5,727) (8,655)
Class L (1,404) -
Class M (3,107) (3,745)
--------- ---------
(95,910) (51,592)
--------- ---------
150,124 17,504
--------- ---------
Net increase (decrease) in net assets 172,927 1,444
--------- ---------
Net Assets:
Beginning of year 103,942 102,498
--------- ---------
End of year $ 276,869 $ 103,942
========= =========
Undistributed Net Investment Income (Loss) $ 625 $ 12
========= =========
October 31, October 31,
2003 2002
---------- ------------
Share Activity:
Shares issued:
Class A 21,036 4,469
Class B 3,332 1,842
Class C 1,749 864
Class L 1,074 -
Class M 219 283
--------- ---------
27,410 7,458
--------- ---------
Shares issued-reinvestment from distributions:
Class A 767 341
Class B 176 165
Class C 36 38
Class L 12 -
Class M 30 35
--------- ---------
1,021 579
--------- ---------
Shares redeemed:
Class A (8,089) (2,678)
Class B (1,788) (1,883)
Class C (660) (995)
Class L (160) -
Class M (362) (433)
--------- ---------
(11,059) (5,989)
--------- ---------
Net increase (decrease) in shares
outstanding 17,372 2,048
========= =========
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Conservative High-Yield Bond 9
IDEX Transamerica Conservative High-Yield Bond
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share of beneficial interest outstanding throughout each period
------------------------------------------------------------------------------------------------------------
Investment Operations Distributions
------------------------------------------- -------------------------------------
Net Asset Net Asset
For the Value, Net Net Realized From Net From Net Value,
Period Beginning Investment and Unrealized Total Investment Realized Total End
Ended (d)(g) of Period Income (Loss) Gain (Loss) Operations Income Gains Distributions of Period
- -----------------------------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 $ 7.93 $ 0.57 $ 1.16 $ 1.73 $ (0.58) $ - $ (0.58) $ 9.08
10/31/2002 9.26 0.57 (1.31) (0.74) (0.59) - (0.59) 7.93
10/31/2001 9.24 0.72 0.01 0.73 (0.71) - (0.71) 9.26
10/31/2000 9.67 0.69 (0.37) 0.32 (0.69) (0.06) (0.75) 9.24
10/31/1999 10.43 0.65 (0.54) 0.11 (0.67) (0.20) (0.87) 9.67
- -----------------------------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 7.93 0.51 1.17 1.68 (0.53) - (0.53) 9.08
10/31/2002 9.26 0.52 (1.32) (0.80) (0.53) - (0.53) 7.93
10/31/2001 9.24 0.57 0.10 0.67 (0.65) - (0.65) 9.26
10/31/2000 9.67 0.63 (0.37) 0.26 (0.63) (0.06) (0.69) 9.24
10/31/1999 10.42 0.59 (0.54) 0.05 (0.60) (0.20) (0.80) 9.67
- -----------------------------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 7.92 0.51 1.18 1.69 (0.53) - (0.53) 9.08
10/31/2002 9.26 0.51 (1.32) (0.81) (0.53) - (0.53) 7.92
10/31/2001 9.24 0.52 0.15 0.67 (0.65) - (0.65) 9.26
10/31/2000 9.67 0.63 (0.37) 0.26 (0.63) (0.06) (0.69) 9.24
- -----------------------------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 8.08 0.51 1.02 1.53 (0.53) - (0.53) 9.08
- -----------------------------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 7.93 0.52 1.17 1.69 (0.54) - (0.54) 9.08
10/31/2002 9.26 0.53 (1.32) (0.79) (0.54) - (0.54) 7.93
10/31/2001 9.24 0.63 0.05 0.68 (0.66) - (0.66) 9.26
10/31/2000 9.67 0.64 (0.37) 0.27 (0.64) (0.06) (0.70) 9.24
10/31/1999 10.42 0.60 (0.54) 0.06 (0.61) (0.20) (0.81) 9.67
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
-----------------------------------------------------------------------
Ratio of Expenses
Net Assets, to Average Net Investment
For the End of Net Assets (a) Income (Loss) Portfolio
Period Total Period ----------------------- to Average Turnover
Ended (g) Return (c) (000's) Net (e) Total (f) Net Assets (a) Rate (b)
- ---------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 22.74% $ 193,708 1.22% 1.22% 6.57% 46%
10/31/2002 (8.48) 60,332 1.35 1.35 6.61 64
10/31/2001 8.12 50,755 1.41 1.41 7.35 16
10/31/2000 3.37 49,259 1.36 1.36 7.34 11
10/31/1999 1.09 59,082 1.38 1.38 6.41 27
- ---------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 21.94 51,511 1.87 1.87 5.92 46
10/31/2002 (9.03) 31,336 2.00 2.00 5.96 64
10/31/2001 7.45 35,471 2.06 2.06 6.70 16
10/31/2000 2.74 13,808 2.01 2.01 6.69 11
10/31/1999 0.38 12,930 2.03 2.03 5.76 27
- ---------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 21.94 17,473 1.87 1.87 5.92 46
10/31/2002 (9.03) 6,340 2.00 2.00 5.96 64
10/31/2001 7.45 8,267 2.06 2.06 6.70 16
10/31/2000 2.74 1,025 2.01 2.01 6.69 11
- ---------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 19.52 8,403 1.87 1.87 5.92 46
- ---------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 22.06 5,774 1.77 1.77 6.02 46
10/31/2002 (8.95) 5,934 1.90 1.90 6.06 64
10/31/2001 7.56 8,005 1.96 1.96 6.80 16
10/31/2000 2.84 4,319 1.91 1.91 6.79 11
10/31/1999 0.54 5,515 1.93 1.93 5.86 27
- ---------------------------------------------------------------------------------------------------------------
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Conservative High-Yield Bond 10
IDEX Transamerica Conservative High-Yield Bond
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (continued)
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 are not annualized.
(d) Per share information is calculated based on average number of shares
outstanding for the periods ended 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 (see note 2).
(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 Fund's offering of share classes C and L are as
follows:
Class C - November 1, 1999
Class L - November 11, 2002
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Conservative High-Yield Bond 11
IDEX Transamerica Conservative High-Yield Bond
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
At October 31, 2003
(all amounts in thousands)
NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
IDEX Mutual Funds is a Massachusetts business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company. IDEX Transamerica Conservative High-Yield Bond
("the Fund"), part of IDEX Mutual Funds, began operations on June 14, 1985.
In the normal course of business, the Fund enters into contracts that contain a
variety of representations and warranties which provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown, as this would involve future claims that may be made against the Fund
and/or its affiliates that have not yet occurred. However, based on experience,
the Fund expects the risk of loss to be remote.
See the Prospectus and Statement of Additional Information for a description of
the Fund's investment objective.
In preparing the Fund's financial statements in accordance with accounting
principles generally accepted in the United States of America ("GAAP"),
estimates or assumptions (which could differ from actual results) may be used
that affect reported amounts and disclosures. The following policies were
consistently followed by the Fund, in accordance with GAAP.
Multiple class operations and expenses: The Fund currently offers five classes
of shares, each with a public offering price that reflects different sales
charges, if any, and expense levels. Effective November 11, 2002, Class C and M
shares were closed to new investors. Income, non-class specific expenses and
realized and unrealized gains and losses, are allocated daily to each class,
based upon the value of shares outstanding method as permitted under Rule 18f-3
of the 1940 Act. Each class bears its own specific expenses as well as a
portion of general, common expenses.
Security valuations: Fund investments traded on an exchange are valued at the
closing price on the day of valuation on the exchange where the security is
principally traded. With respect to securities traded on the NASDAQ INMS, such
closing price may be the last reported sales price or the NASDAQ Official
Closing Price.
Securities traded in the over-the-counter market and listed securities for
which no sale was reported on that date are valued at the last quoted bid
price.
Debt securities are valued by independent pricing services; however, those that
mature in sixty days or less are valued at amortized cost, which approximates
market.
Other securities for which quotations are not readily available are valued at
fair value determined in good faith, in accordance with procedures established
by and, under the supervision of the Board of Trustees and the Fund's Valuation
Committee.
Cash: The Fund may leave cash overnight in its cash account with the custodian,
Investors Bank & Trust Company ("IBT"). IBT has been contracted on behalf of
the Fund to invest the excess cash into a savings account, which at October 31,
2003, was paying an interest rate of 0.75%.
Securities lending: The Fund may lend securities to enhance fund earnings from
investing cash collateral received in making such loans to qualified borrowers
(typically broker/dealers). The Fund has engaged its custodian bank, IBT, as a
lending agent to administer its securities lending program. IBT earned $22 of
program net income for its services. When the Fund makes a security loan, it
receives cash collateral as protection against the risk that the borrower will
default on the loan, and records an asset for the cash invested collateral and
a liability for the return of the collateral.
Securities on loan are included in Investment securities at value on the
Statement of Assets and Liabilities and remain on the Schedule of Investments.
Loans of securities are required to be secured by collateral at least equal to
102% of the value of the securities at inception of the loan, and not less then
100% thereafter. The Fund may invest cash collateral in short-term money market
instruments including: U.S. Treasury Bills, U.S. agency obligations, commercial
paper, money market mutual funds, repurchase agreements and other highly rated,
liquid investments. During the life of securities loans, the collateral and
securities loaned remain subject to fluctuation in value. IBT marks to market
securities loaned and the collateral each business day. If additional
collateral is due (at least $1), IBT collects additional cash collateral from
the borrowers. Although securities loaned will be fully collateralized at all
times, IBT may experience delays in, or may be prevented from, recovering the
collateral on behalf of the Fund. The Fund may recall a loaned security
position at any time from the borrower through IBT. In the event the borrower
fails to timely return a recalled security, IBT may indemnify the Fund by
purchasing replacement securities for the Fund at its own expense and claiming
the collateral to fund such a purchase. IBT absorbs the loss if the collateral
value is not sufficient to cover the cost of the replacement securities. If
replacement securities are not available, IBT will credit the equivalent cash
value to the Fund.
Income from securities lending is included in the Statement of Operations. The
amount of collateral value of securities on loan are included in the Statement
of Assets and Liabilities as well as on the Schedule of Investments.
Security transactions and investment income: Security transactions are recorded
on the trade date. Security gains and losses are calculated on the specific
identification basis. Dividend income is recorded on the ex-dividend date or,
in the case of foreign securities, as soon as the Fund is informed of the
ex-dividend date. Interest income, including accretion of discounts and
amortization of premiums, is recorded on the accrual basis commencing on the
settlement date.
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Conservative High-Yield Bond 12
IDEX Transamerica Conservative High-Yield Bond
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 1-(continued)
Dividend distributions: Distributions to shareholders are recorded on the
ex-dividend date and are determined in accordance with Federal income tax
regulations which may differ from GAAP.
NOTE 2. RELATED PARTY TRANSACTIONS
AEGON/Transamerica Fund Advisers, Inc. ("ATFA") is the Fund's investment
adviser. AEGON/Transamerica Fund Services, Inc. ("ATFS") is the Fund's
administrator. AFSG Securities Corp. ("AFSG") is the Fund's
distributor/principal underwriter. AEGON/Transamerica Investor Services, Inc.
("ATIS") is the 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. AUSA and WRL are a wholly owned indirect subsidiary of AEGON
NV, a Netherlands corporation.
The following schedule reflects the percentage of fund assets owned by
affiliated mutual funds (ie: through the assets allocation funds)
Net % of
Assets Net Assets
----------- -----------
IDEX Asset Allocation
Conservative Portfolio $ 47,564 17%
IDEX Asset Allocation Moderate
Growth 32,220 12%
IDEX Asset Allocation Moderate 70,329 25%
--------
54%
========
AEGON USA Investments Management, Inc. is both an affiliate and sub-adviser to
the Fund.
Investment advisory fees: The Fund pays management fees to ATFA based on
average daily net assets ("ANA") at the following rate:
0.60% of ANA
ATFA currently voluntarily waives its advisory fee and will reimburse the Fund
to the extent that operating expenses, excluding 12b-1 fees, exceed the
following stated annual limit:
1.25% Expense Limit
If total fund expenses fall below the annual expense limitations agreed to by
the adviser within the succeeding three years, the Fund may be required to pay
the advisor a portion or all of the waived advisory fees.
Distribution and service fees: The Fund has a 12b-1 distribution plan under the
1940 Act pursuant to which an annual fee, based on average daily net assets, is
paid to the distributor for various disbursements such as broker-dealer account
servicing fees and other promotional expenses of the Fund. The 12b-1 fee for
the Fund is comprised of a 0.25% service fee and the remaining amount is an
asset-based sales charge/distribution fee. The Fund is authorized under the
12b-1 plan to pay fees on each class up to the following limits:
Class A 0.35%
Class B 1.00%
Class C 1.00%
Class L 1.00%
Class M 0.90%
Underwriter commissions relate to front-end sales charges imposed for Class A
and M shares and contingent deferred sales charges from Classes B, L, M and
certain A share redemptions. For the year ended October 31, 2003, the
underwriter commissions were as follows:
Received by Underwriter $ 287
Retained by Underwriter 9
Contingent Sales Charges 262
Administrative services: The Fund has entered into an agreement with ATFS for
financial and legal fund administration services, which include such items as
compliance, expenses, financial statements and other reporting, distributions,
tax returns, prospectus preparation, board of trustees meeting support and
other legal matters. Transfer agent fees are reflected separately from
Administration fees on the Statement of Operations. The Legal fees on the
Statement of Operations are for fees paid to external legal counsel. ATFS
provides its services to the Fund at cost and is reimbursed monthly.
Transfer agent fees: The Fund incurs ATIS annual per-account charges (not in
thousands) of $20.00 for each open shareholder account and $1.63 for each
closed account maintained, and certain out of pocket expenses.
Deferred compensation plan: Each eligible Fund Trustee may elect participation
in the Deferred Compensation Plan ("the Plan"). Under the Plan, such Trustees
may defer payment of a percentage of their total fees earned as a Fund Trustee.
These deferred amounts may be invested in any IDEX Fund. At October 31, 2003,
the value of invested plan amounts was $12. Invested plan amounts and the total
liability for deferred compensation to the Trustees under the Plan at October
31, 2003, are included in Net assets in the accompanying Statement of Assets
and Liabilities.
NOTE 3. INVESTMENT TRANSACTIONS
The cost of securities purchased and proceeds from securities sold (excluding
short-term securities) for the year ended October 31, 2003, were as follows:
Purchases of securities:
Long-Term excluding U.S. Government $ 215,534
U.S. Government 1,497
Proceeds from maturities and sales of securities:
Long-Term excluding U.S. Government 75,167
U.S. Government 1,487
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Conservative High-Yield Bond 13
IDEX Transamerica Conservative High-Yield Bond
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 4. FEDERAL INCOME TAX MATTERS
The Fund has not made any provision for federal income or excise taxes due to
its policy to distribute all of its taxable income and capital gains to its
shareholders and otherwise qualify as a regulated investment company under the
Internal Revenue Code. Income and capital gain distributions are determined in
accordance with income tax regulations, which may differ from GAAP. These
differences are primarily due to differing treatments for items including, but
not limited to, wash sales and capital loss carryforwards.
Reclassifications between Undistributed net investment income (loss),
Undistributed net realized capital gains (loss) and Shares of beneficial
interest are made to reflect income and gains available for distribution under
federal tax regulations. Results of operations and net assets are not effected
by these reclassifications. These reclassifications are as follows:
Shares of beneficial interest, unlimited
shares authorized $ -
Undistributed net investment income (loss) 583
Accumulated net realized gain (loss) from
investment securities (583)
The tax character of distributions paid may differ from the character of
distributions shown in the Statement of Changes in Net Assets
primarily due to short-term gains being treated as ordinary income for tax
purposes. The tax character of distributions paid during 2002 and 2003 was as
follows:
2002 Distributions paid from:
Ordinary income $ 6,675
Long-term capital gains -
2003 Distributions paid from:
Ordinary income $ 11,400
Long-term capital gains -
The tax basis components of distributable earnings as of October 31, 2003, are
as follows:
Undistributed Ordinary Income $ 801
=========
Undistributed Long-term Capital Gains $ -
=========
Capital Loss Carryforward $ (14,250)
=========
Net Unrealized Appreciation (Depreciation) $ 11,775
=========
The capital loss carryforwards are available to offset future realized capital
gains through the periods listed:
Capital Loss
Carryforward Available through
- -------------- ------------------
$ 1,984 October 31, 2008
1,519 October 31, 2009
5,464 October 31, 2010
5,283 October 31, 2011
The aggregate cost of investments and composition of unrealized appreciation
(depreciation) for federal income tax purposes as of October 31, 2003, are as
follows:
Federal Tax Cost Basis $ 271,959
=========
Unrealized Appreciation $ 14,058
Unrealized (Depreciation) (2,283)
---------
Net Unrealized Appreciation (Depreciation) $ 11,775
=========
Supplemental Tax Information
(unaudited)
For dividends paid during the year ended October 31, 2003, the Fund designates
qualified dividend income to the maximum extent allowable.
For corporate shareholders, 1% of investment income (dividend income plus
short-term gains, if any) qualifies for the dividends received deduction.
The information and distributions reported herein may differ from the
information and distributions taxable to the shareholders for the calendar year
ending December 31, 2003. Complete information will be computed and reported in
conjunction with your 2003 Form 1099-DIV.
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Conservative High-Yield Bond 14
- --------------------------------------------------------------------------------
Report of Independent Certified Public Accountants
To the Board of Trustees and Shareholders of
IDEX Transamerica Conservative High-Yield Bond
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of IDEX Transamerica Conservative
High-Yield Bond (the "Fund") (one of the portfolios constituting the IDEX
Mutual Funds) at October 31, 2003, and the results of its operations, the
changes in its net assets and the financial highlights for each of the periods
indicated, in conformity with accounting principles generally accepted in the
United States of America. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of the
Fund's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with auditing standards generally accepted
in the United States of America, which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits, which included confirmation of securities at October
31, 2003 by correspondence with the custodian and brokers, provide a reasonable
basis for our opinion.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Tampa, Florida
December 18, 2003
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Conservative High-Yield Bond 15
IDEX Transamerica Convertible Securities
- --------------------------------------------------------------------------------
MARKET ENVIRONMENT
Driven by investor confidence in an economic recovery, the U.S. convertibles
market staged its own rebound in the twelve-month period that ended October 31,
2003; the Merrill Lynch All U.S. Convertibles Index ("Merrill Lynch
Convertibles") rose 29.19%. Responding to early signs of a more robust economy
and improving corporate profitability, investors allowed yields on convertibles
to fall, especially those issued by technology-related businesses. Since
convertibles' yields and prices generally move in opposite directions, prices
rose dramatically from November 2002 through June 2003. During the latter
months of the period, the market showed less strength as investors struggled to
understand how persistently high unemployment levels would impact demand for
products and, ultimately, corporate profits.
PERFORMANCE
For the year ended October 31, 2003, IDEX Transamerica Convertible Securities
returned 23.49%. By comparison its benchmark, the Merrill Lynch Convertibles,
returned 29.19%. Its underperformance versus the benchmark index was due to our
conservative positioning in November 2002, when the convertibles market, led
largely by lower-quality securities, posted an exceptional return in a single
month.
STRATEGY REVIEW
As the period began, the portfolio was positioned to limited downside risk to
investors. The prior months had been largely negative for convertibles. In
light of that, we had opted to avoid any company with accounting, management or
product-cycle issues, and thus owned few of the poorer-quality securities that
led the remarkable November 2002 rally. Despite this, the portfolio gained
roughly 2.5% that month, and as we increased its exposure to companies that are
sensitive to economic growth, went on to generate significant gains.
Among the securities making the greatest contributions to performance were
Maxtor Corporation ("Maxtor") and Micron Technology, Inc. ("Micron"). Maxtor is
a major supplier of hard disk drive storage products. Micron provides
semiconductors used in a wide variety of products, from computers and cell
phones to digital cameras and gaming systems. Both companies benefited from
resurgent demand for personal computers and computer peripherals.
The few disappointments in the portfolio included discount retailer Costco
Wholesale Corporation ("Costco") and ADC Telecommunications, Inc. ("ADC"), a
bellwether manufacturer of broadband telecommunications equipment. We purchased
ADC in anticipation of a new cycle of corporate capital spending for technology
and telecommunications equipment that, as yet, has not occurred. We are
currently re-evaluating this thesis.
As for Costco, its decline was due to company-specific issues, including
mismanagement of its expansion effort, weak sales in its existing stores and
rising costs for employee health care.
/s/ Kirk J. Kim
Kirk J. Kim
/s/ Gary U. Rolle
Gary U. Rolle
Co-Fund Managers
Transamerica Investment Management, LLC
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Convertible Securities 1
IDEX Transamerica Convertible Securities
- --------------------------------------------------------------------------------
Comparison of change in value of $10,000 investment in Class A shares and its
comparative index.
[The following chart was represented as a line chart in the printed material.]
Growth of $10,000
Inception of 3/1/02 through 10/31/03
Investment less sales charges - $9,525
DATE Class A ML U.S. Conv.
- ----------------- ----------------- --------------
3/1/2002 9,525 10,000
3/31/2002 9,676 10,358
6/30/2002 9,605 9,584
9/30/2002 8,885 8,788
12/31/2002 9,200 9,560
3/31/2003 9,410 9,854
6/30/2003 10,529 10,901
9/30/2003 10,746 11,204
10/31/2003 11,125 11,606
Average Annual Total Return for Periods Ended 10/31/03
- --------------------------------------------------------------------------------
From Inception
1 year Inception Date
- ------------------------------------------------------------------------------
Class A (NAV) 23.49% 9.74% 3/1/02
Class A (POP) 17.62% 6.59% 3/1/02
ML U.S. Conv.(1) 29.19% 9.33% 3/1/02
- ------------------------------------------------------------------------------
Class B (NAV) 22.58% 9.08% 3/1/02
Class B (POP) 17.58% 6.80% 3/1/02
- ------------------------------------------------------------------------------
Class C (NAV) 22.58% 9.08% 3/1/02
- ------------------------------------------------------------------------------
Class L (NAV) - 22.84% 11/11/02
Class L (POP) - 20.84% 11/11/02
- ------------------------------------------------------------------------------
Class M (NAV) 22.70% 9.17% 3/1/02
Class M (POP) 20.47% 8.51% 3/1/02
- ------------------------------------------------------------------------------
NOTES
(1) The Merrill Lynch All U.S. Convertibles (ML U.S. Conv.) 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 Micropal(R)(C) 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 4.75% 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 shares, (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.
Because convertible securities are primarily long-term debt obligations and for
that reason influenced by increases and decreases in interest rates, they may
be subject to credit risk.
Periods less than 1 year represent total return and are not annualized.
This material must be preceded or accompanied by a current prospectus, which
includes specific contents regarding the investment objectives and policies of
this fund.
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Convertible Securities 2
IDEX Transamerica Convertible Securities
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
At October 31, 2003
(all amounts except share amounts in thousands)
Principal Value
- -----------------------------------------------------------------------------
CORPORATE DEBT SECURITIES (1.2%)
Communications Equipment (1.2%)
ADC Telecommunications, Inc.-144A (c)
1.60%, due 06/15/2013 $ 2,500 $ 2,341
---------
Total Corporate Debt Securities (cost: $2,500) 2,341
---------
CONVERTIBLE BONDS (78.1%)
Air Transportation (8.5%)
American Airlines, Inc-144A (a)
4.25%, due 09/23/2023 2,250 2,309
Delta Air Lines, Inc.-144A
8.00%, due 06/03/2023 4,500 4,309
ExpressJet Holdings, Inc.-144A
4.25%, due 08/01/2023 3,450 3,941
JetBlue Airways Corporation-144A (a)
3.50%, due 07/15/2033 3,050 3,690
Northwest Airlines Corporation
7.63%, due 11/15/2023 1,750 1,710
Business Credit Institutions (1.6%)
Structured Investment Corporation-144A
0.25%, due 08/05/2013 3,000 3,053
Business Services (2.6%)
Fair Issac Corporation-144A
1.50%, due 08/15/2023 2,000 2,280
MemberWorks Incorporated-144A
5.50%, due 10/01/2010 2,600 2,636
Commercial Banks (4.3%)
CDC IXIS-144A
0.25%, due 05/24/2010 2,000 1,937
Deutsche Bank Luxembourg
SA-144A-(a)(c)
1.32%, due 05/01/2012 3,070 5,298
Wachovia Bank, National
Association-144A
5.00%, due 01/27/2004 750 832
Communication (3.2%)
Crown Castle International Corp. (a)
4.00%, due 07/15/2010 1,800 2,644
Liberty Media Corporation (a)
3.25%, due 03/15/2031 3,450 3,440
Communications Equipment (3.9%)
ADC Telecommunications, Inc.-144A
1.00%, due 06/15/2008 1,000 925
Comverse Technology, Inc. (a)
Zero Coupon, due 05/15/2023 2,800 3,339
McDATA Corporation-144A
2.25%, due 02/15/2010 2,400 3,009
Principal Value
- --------------------------------------------------------------------------------
Computer & Data Processing Services (9.1%)
GTECH Holdings Corporation
1.75%, due 12/15/2021 $ 2,525 $ 4,219
Network Associates, Inc. (a)
5.25%, due 08/15/2006 2,150 2,282
Openwave Systems, Inc.-144A (a)
2.75%, due 09/09/2008 6,000 6,060
Symantec Corporation
3.00%, due 11/01/2006 2,225 4,431
Computer & Office Equipment (3.1%)
Maxtor Corporation-144A
6.80%, due 04/30/2010 1,800 2,754
Quantum Corporation-144A
4.38%, due 08/01/2010 3,150 3,095
Department Stores (2.7%)
J.C. Penney Company, Inc. (a)
5.00%, due 10/15/2008 4,950 5,179
Electronic Components & Accessories (3.3%)
Micron Technology, Inc.
2.50%, due 02/01/2010 600 839
Micron Technology, Inc.-144A (a)
2.50%, due 02/01/2010 2,250 3,144
Tyco International Group SA-144A
2.75%, due 01/15/2018 1,500 1,656
3.13%, due 01/15/2023 500 569
Industrial Machinery & Equipment (4.6%)
ASM Lithography Holding NV-144A
5.75%, due 10/15/2006 3,500 4,358
DuPont Photomasks, Inc.
1.25%, due 05/15/2008 2,350 2,676
DuPont Photomasks, Inc.-144A
1.25%, due 05/15/2008 1,500 1,708
Manufacturing Industries (5.7%)
International Game Technology
Zero Coupon, due 01/29/2033 2,000 1,470
International Game Technology-144A
Zero Coupon, due 01/29/2033 3,900 2,867
K2 Corporation-144A
5.00%, due 06/15/2010 4,500 6,424
Paper & Paper Products (1.8%)
School Specialty, Inc.-144A
3.75%, due 08/01/2023 3,400 3,344
Pharmaceuticals (8.3%)
Corixa Corporation-144A
4.25%, due 07/01/2008 3,405 3,307
Gilead Sciences, Inc. (a)
2.00%, due 12/15/2007 3,200 4,227
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Convertible Securities 3
IDEX Transamerica Convertible Securities
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Principal Value
- --------------------------------------------------------------------------------
Pharmaceuticals (continued)
Indevus Pharmacuticals, Inc.-144A
6.25%, due 07/15/2008 $ 1,400 $ 1,558
IVAX Corporation
4.50%, due 05/15/2008 1,500 1,461
Teva Pharmaceutical Finance BV-144A
0.38%, due 11/15/2022 2,000 2,818
Watson Pharmaceuticals, Inc.-144A
1.75%, due 03/15/2023 1,950 2,274
Printing & Publishing (3.7%)
Bowne & Co. Inc.-144A
5.00%, due 10/01/2033 7,000 6,974
Radio, Television & Computer Stores (3.3%)
Best Buy Co., Inc. (a)
2.25%, due 01/15/2022 2,710 3,042
Guitar Center, Inc.
4.00%, due 07/15/2013 2,750 3,254
Retail Trade (1.1%)
Alloy, Inc.-144A
5.38%, due 08/01/2023 2,300 2,130
Security & Commodity Brokers (2.7%)
Morgan Stanley (c)
0.00%, due 08/15/2033 5,000 5,116
Telecommunications (3.1%)
Nextel Partners, Inc.-144A
1.50%, due 11/15/2008 4,900 5,807
Wholesale Trade Durable Goods (1.5%)
Fisher Scientific International Inc.-144A (a)
2.50%, due 10/01/2023 2,450 2,753
---------
Total Convertible Bonds (cost: $136,759) 147,148
---------
Shares Value
- --------------------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCKS (18.7%)
Commercial Banks (1.6%)
State Street Corporation 12,000 $ 2,991
Communications Equipment (1.9%)
Motorola, Inc.-Units 85,000 3,594
Computer & Office Equipment (1.8%)
Xerox Corporation 31,500 3,311
Drug Stores & Proprietary Stores (1.6%)
Omnicare, Inc. 51,800 3,049
Electric Services (1.1%)
TXU Corp. (a) 60,000 1,988
Environmental Services (1.4%)
Allied Waste Industries, Inc. 40,000 2,560
Shares Value
- --------------------------------------------------------------------------------
Insurance (3.7%)
Anthem, Inc. 34,550 $ 2,817
Chubb Corporation 109,500 3,039
Travelers Property Casualty Corp. 53,400 1,278
Life Insurance (1.5%)
Prudential Financial, Inc.-Units 46,600 2,874
Mortgage Bankers & Brokers (2.2%)
Doral Financial Corporation-144A 16,000 4,163
Telecommunications (1.9%)
CenturyTel, Inc. 124,500 3,526
---------
Total Convertible Preferred Stocks (cost: $32,996) 35,190
---------
COMMON STOCKS (1.5%)
Finance (1.5%)
Express Scripts Automatic Exchange
Securities Trust 30,900 2,835
---------
Total Common Stocks (cost: $3,320) 2,835
---------
Principal Value
- --------------------------------------------------------------------------------
SECURITY LENDING COLLATERAL (19.1%)
Debt (16.8%)
Bank Notes (2.0%)
Canadian Imperial Bank of Commerce
1.12%, due 11/04/2003 $ 1,565 $ 1,565
Fleet National Bank
1.06%, due 01/21/2004 2,190 2,190
Euro Dollar Terms (9.4%)
Bank of Montreal
1.03%, due 11/13/2003 1,252 1,252
1.04%, due 11/14/2003 1,099 1,099
Bank of Nova Scotia (The)
1.06%, due 11/12/2003 626 626
Bank of Scotland
1.04%, due 11/14/2003 1,252 1,252
Citigroup Inc.
1.08%, due 01/05/2004 1,877 1,877
Credit Agricole Indosuez
1.08%, due 01/06/2004 1,377 1,377
Den Danske Bank
1.04%, due 11/10/2003 626 626
1.08%, due 01/20/2004 1,877 1,877
Royal Bank of Canada
1.04%, due 11/24/2003 1,565 1,565
1.06%, due 12/08/2003 626 626
Royal Bank of Scotland Group PLC (The)
1.08%, due 01/15/2004 1,877 1,877
SouthTrust Bank
1.08%, due 01/16/2004 1,877 1,877
Wells Fargo & Company
1.04%, due 11/20/2003 1,877 1,877
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Convertible Securities 4
IDEX Transamerica Convertible Securities
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Principal Value
- -------------------------------------------------------------------------------
Promissory Notes (1.2%)
Goldman Sachs Group, Inc. (The)
1.15%, due 11/03/2003 $ 2,190 $ 2,190
Repurchase Agreements (4.2%) (b)
Goldman Sachs Group, Inc. (The)
1.10% Repurchase Agreement dated
10/31/2003 to be repurchased at $626
on 11/03/2003 626 626
Merrill Lynch & Co., Inc.
1.10% Repurchase Agreement dated
10/31/2003 to be repurchased at $7,199
on 11/03/2003 7,198 7,198
Shares Value
- --------------------------------------------------------------------------------
Investment Companies (2.3%)
Money Market Funds (2.3%)
Merrimac Cash Series Fund-
Premium Class
1-day yield of 0.97% 4,380,822 $ 4,381
---------
Total Security Lending Collateral (cost: $35,958) 35,958
---------
Total Investment Securities (cost: $211,533) $ 223,472
=========
SUMMARY:
Investments, at value 118.6)% $ 223,472
Liabilities in excess of other assets (18.6)% (35,049)
--------- ---------
Net assets 100.0)% $ 188,423
========= =========
NOTES TO SCHEDULE OF INVESTMENTS:
(a) At October 31, 2003, all or a portion of this security is on loan (see Note
1). The value at October 31, 2003, of all securities on loan is $34,991.
(b) Cash collateral for the Repurchase Agreements, valued at $7,979, 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.
(c) Floating or variable rate note. Rate is listed as of October 31, 2003.
DEFINITIONS:
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 financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Convertible Securities 5
IDEX Transamerica Convertible Securities
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
At October 31, 2003
(all amounts except per share amounts in thousands)
Assets:
Investment securities, at value (cost: $211,533)
(including $34,991 of securities loaned) $ 223,472
Cash 1,224
Receivables:
Investment securities sold 6,268
Shares of beneficial interest sold 21
Interest 1,022
Dividends 111
Other 33
---------
232,151
---------
Liabilities:
Investment securities purchased 7,505
Accounts payable and accrued liabilities:
Shares of beneficial interest redeemed 23
Management and advisory fees 126
Distribution fees 63
Transfer agent fees 10
Payable for securities on loan 35,958
Other 43
---------
43,728
---------
Net Assets $ 188,423
=========
Net Assets Consist of:
Shares of beneficial interest, unlimited shares authorized $ 173,051
Undistributed net investment income (loss) 252
Undistributed net realized gain (loss) from investment
securities 3,181
Net unrealized appreciation (depreciation) on investment
securities 11,939
---------
Net Assets $ 188,423
=========
Shares Outstanding:
Class A 15,473
Class B 575
Class C 107
Class L 446
Class M 42
Net Asset Value Per Share:
Class A $ 11.32
Class B 11.31
Class C 11.31
Class L 11.31
Class M 11.31
Maximum Offering Price Per Share (a):
Class A $ 11.88
Class M 11.42
(a) 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.
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the year ended October 31, 2003
(all amounts in thousands)
Investment Income:
Interest $ 1,851
Dividends 1,021
Income from loaned securities-net 26
--------
2,898
--------
Expenses:
Management and advisory fees 607
Transfer agent fees 31
Printing and shareholder reports 3
Custody fees 18
Administration fees 32
Legal fees 3
Auditing and accounting fees 18
Trustees fees 5
Registration fees 66
Other 4
Distribution and service fees:
Class A 259
Class B 36
Class C 10
Class L 17
Class M 4
--------
Total expenses 1,113
--------
Net Investment Income (Loss) 1,785
--------
Net Realized and Unrealized Gain (Loss):
Realized gain (loss) from investment securities 3,558
Increase (decrease) in unrealized appreciation
(depreciation) on investment securities 12,078
--------
Net Gain (Loss) on Investment Securities 15,636
--------
Net Increase (Decrease) in Net Assets Resulting from
Operations $ 17,421
========
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Convertible Securities 6
IDEX Transamerica Convertible Securities
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
For the year or period ended
(all amounts in thousands)
October 31, October 31,
2003 2002(a)
------------ ------------
Increase (Decrease) In Net Assets From:
Operations:
Net investment income (loss) $ 1,785 $ 94
Net realized gain (loss) from investment
securities 3,558 (377)
Net unrealized appreciation
(depreciation) on investment
securities 12,078 (139)
--------- ---------
17,421 (422)
--------- ---------
Distributions to Shareholders:
From net investment income:
Class A (1,469) (55)
Class B (51) (5)
Class C (17) (3)
Class L (21) -
Class M (7) (1)
--------- ---------
(1,565) (64)
--------- ---------
From net realized gains:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
--------- ---------
- -
--------- ---------
Capital Share Transactions:
Proceeds from shares sold:
Class A 150,345 10,852
Class B 5,369 1,469
Class C 761 1,054
Class L 4,921 -
Class M 234 359
--------- ---------
161,630 13,734
--------- ---------
Dividends and distributions reinvested:
Class A 1,466 55
Class B 31 5
Class C 11 3
Class L 15 -
Class M 7 1
--------- ---------
1,530 64
--------- ---------
Cost of shares redeemed:
Class A (1,341) (321)
Class B (763) (271)
Class C (701) (94)
Class L (219) -
Class M (154) (41)
--------- ---------
(3,178) (727)
--------- ---------
159,982 13,071
--------- ---------
Net increase (decrease) in net assets 175,838 12,585
--------- ---------
Net Assets:
Beginning of year 12,585 -
--------- ---------
End of year $ 188,423 $ 12,585
========= =========
Undistributed Net Investment Income (Loss) $ 252 $ 32
========= =========
October 31, October 31,
2003 2002(a)
------------ -----------
Share Activity:
Shares issued:
Class A 14,376 1,115
Class B 525 149
Class C 73 110
Class L 465 -
Class M 24 37
--------- --------
15,463 1,411
--------- --------
Shares issued-reinvested from distributions:
Class A 137 6
Class B 3 1
Class C 1 -
Class L 1 -
Class M 1 -
--------- --------
143 7
--------- --------
Shares redeemed:
Class A (127) (34)
Class B (74) (29)
Class C (67) (10)
Class L (20) -
Class M (16) (4)
--------- --------
(304) (77)
--------- --------
Net increase (decrease) in shares
outstanding 15,302 1,341
========= =========
(a) Commenced operations on March 1, 2002.
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Convertible Securities 7
IDEX Transamerica Convertible Securities
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share of beneficial interest outstanding throughout each period
------------------------------------------------------------------------------------------------------------
Investment Operations Distributions
------------------------------------------- -------------------------------------
Net Asset Net Asset
For the Value, Net Net Realized From Net From Net Value,
Period Beginning Investment and Unrealized Total Investment Realized Total End
Ended (d)(g) of Period Income (Loss) Gain (Loss) Operations Income Gains Distributions of Period
---------------------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 $ 9.39 $ 0.24 $ 1.92 $ 2.16 $ (0.23) $ - $ (0.23) $ 11.32
10/31/2002 10.00 0.14 (0.67) (0.53) (0.08) - (0.08) 9.39
- -----------------------------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 9.38 0.17 1.93 2.10 (0.17) - (0.17) 11.31
10/31/2002 10.00 0.11 (0.68) (0.57) (0.05) - (0.05) 9.38
- -----------------------------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 9.38 0.17 1.93 2.10 (0.17) - (0.17) 11.31
10/31/2002 10.00 0.11 (0.68) (0.57) (0.05) - (0.05) 9.38
- -----------------------------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 9.36 0.17 1.95 2.12 (0.17) - (0.17) 11.31
- -----------------------------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 9.38 0.18 1.93 2.11 (0.18) - (0.18) 11.31
10/31/2002 10.00 0.12 (0.68) (0.56) (0.06) - (0.06) 9.38
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
-----------------------------------------------------------------------
Ratio of Expenses
Net Assets, to Average Net Investment
For the End of Net Assets (a) Income (Loss) Portfolio
Period Total Period ----------------------- to Average Turnover
Ended (g) Return (c) (000's) Net (e) Total (f) Net Assets (a) Rate (b)
- ----------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 23.49% $ 175,175 1.33% 1.33% 2.27% 119%
10/31/2002 (5.42) 10,205 1.73 3.85 2.59 170
- ----------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 22.58 6,508 1.98 1.98 1.62 119
10/31/2002 (5.68) 1,138 2.38 4.50 1.94 170
- ----------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 22.58 1,212 1.98 1.98 1.62 119
10/31/2002 (5.68) 934 2.38 4.50 1.94 170
- ----------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 22.84 5,048 1.98 1.98 1.62 119
- ----------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 22.70 480 1.88 1.88 1.72 119
10/31/2002 (5.64) 308 2.28 4.40 2.04 170
- ----------------------------------------------------------------------------------------------------------------
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 are not annualized.
(d) Per share information is calculated based on average number of shares
outstanding.
(e) Ratio of Net Expenses to Average Net Assets is net of fee waivers and
reimbursements by the investment adviser, if any (see note 2).
(f) Ratio of Total Expenses to Average Net Assets includes all expenses before
fee waivers and reimbursements by the investment adviser.
(g) IDEX Transamerica Convertible Securities ("the Fund") commenced operations
on March 1, 2002. The inception date for the Fund's offering of share Class
L was November 11, 2002.
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Convertible Securities 8
IDEX Transamerica Convertible Securities
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
At October 31, 2003
(all amounts in thousands)
NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
IDEX Mutual Funds is a Massachusetts business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company. IDEX Transamerica Convertible Securities ("the
Fund"), part of IDEX Mutual Funds, began operations on March 1, 2002.
In the normal course of business, the Fund enters into contracts that contain a
variety of representations and warranties and which provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown, as this would involve future claims that may be made against the Fund
and/or its affiliates that have not yet occurred. However, based on experience,
the Fund expects the risk of loss to be remote.
See the Prospectus and Statement of Additional Information for a description of
the Fund's investment objective.
In preparing the Fund's financial statements in accordance with accounting
principles generally accepted in the United States of America ("GAAP"),
estimates or assumptions (which could differ from actual results) may be used
that affect reported amounts and disclosures. The following policies were
consistently followed by the Fund, in accordance with GAAP.
Multiple class operations and expenses: The Fund currently offers five classes
of shares, each with a public offering price that reflects different sales
charges, if any, and expense levels. Effective November 11, 2002, Class C and M
shares were closed to new investors. Income, non-class specific expenses and
realized and unrealized gains and losses, are allocated daily to each class,
based upon the value of shares outstanding method as permitted under Rule 18f-3
of the 1940 Act. Each class bears its own specific expenses as well as a
portion of general, common expenses.
Security valuations: Fund investments traded on an exchange are valued at the
closing price on the day of valuation on the exchange where the security is
principally traded. With respect to securities traded on the NASDAQ INMS, such
closing price may be the last reported sales price or the NASDAQ Official
Closing Price.
Debt securities are valued by independent pricing services; however, those that
mature in sixty days or less are valued at amortized cost, which approximates
market.
Other securities for which quotations are not readily available are valued at
fair value determined in good faith, in accordance with procedures established
by and, under the supervision of the Board of Trustees and the Fund's Valuation
Committee.
Cash: The Fund may leave cash overnight in its cash account with the custodian,
Investors Bank & Trust ("IBT"). IBT has been contracted on behalf of the Fund
to invest the excess cash into a savings account, which at October 31, 2003,
was paying an interest rate of 0.75%.
Securities lending: The Fund may lend securities to enhance fund earnings from
investing cash collateral received in making such loans to qualified borrowers
(typically broker/dealers). The Fund has engaged its custodian bank, IBT, as a
lending agent to administer its securities lending program. IBT earned $11 of
program net income for its services. When the Fund makes a security loan, it
receives cash collateral as protection against the risk that the borrower will
default on the loan, and records an asset for the cash invested collateral and
a liability for the return of the collateral.
Securities on loan are included in Investment securities at value on the
Statement of Assets and Liabilities and remain on the Schedule of Investments.
Loans of securities are required to be secured by collateral at least equal to
102% of the value of the securities at inception of the loan, and not less then
100% thereafter. The Fund may invest cash collateral in short-term money market
instruments including: U.S. Treasury Bills, U.S. agency obligations, commercial
paper, money market mutual funds, repurchase agreements and other highly rated,
liquid investments. During the life of securities loans, the collateral and
securities loaned remain subject to fluctuation in value. IBT marks to market
securities loaned and the collateral each business day. If additional
collateral is due (at least $1), IBT collects additional cash collateral from
the borrowers. Although securities loaned will be fully collateralized at all
times, IBT may experience delays in, or may be prevented from, recovering the
collateral on behalf of the Fund. The Fund may recall a loaned security
position at any time from the borrower through IBT. In the event the borrower
fails to timely return a recalled security, IBT may indemnify the Fund by
purchasing replacement securities for the Fund at its own expense and claiming
the collateral to fund such a purchase. IBT absorbs the loss if the collateral
value is not sufficient to cover the cost of the replacement securities. If
replacement securities are not available, IBT will credit the equivalent cash
value to the Fund.
Income from securities lending is included in the Statement of Operations. The
amounts of collateral and value of securities on loan are included in the
Statement of Assets and Liabilities as well as on the Schedule of Investments.
Security transactions and investment income: Security transactions are recorded
on the trade date. Security gains and losses are calculated on the specific
identification basis. Dividend income is recorded on the ex-dividend date or,
in the case of foreign securities, as soon as the Fund is informed of the
ex-dividend date. Interest income, including accretion of discounts and
amortization of premiums, is recorded on the accrual basis commencing on the
settlement date.
Dividend distributions: Distributions to shareholders are recorded on the
ex-dividend date and are determined in accordance with Federal income tax
regulations which may differ from GAAP.
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Convertible Securities 9
IDEX Transamerica Convertible Securities
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 2. RELATED PARTY TRANSACTIONS
AEGON/Transamerica Fund Advisers, Inc. ("ATFA") is the Fund's investment
adviser. AEGON/Transamerica Fund Services, Inc. ("ATFS") is the Fund's
administrator. AFSG Securities Corp. ("AFSG") is the Fund's
distributor/principal underwriter. AEGON/Transamerica Investor Services, Inc.
("ATIS") is the 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. AUSA and WRL are wholly owned indirect subsidiaries of AEGON
NV, a Netherlands corporation.
The following schedule reflects the percentage of fund assets owned by
affiliated mutual funds (ie: through the assets allocation funds)
Net % of
Assets Net Assets
----------- -----------
IDEX Asset Allocation
Conservative Portfolio $ 41,797 22%
IDEX Asset Allocation Moderate
Growth 53,489 28%
IDEX Asset Allocation Moderate 75,123 40%
--------
90%
========
Transamerica Investment Management, LLC is both an affiliate of the Fund and a
sub-adviser to the Fund.
Investment advisory fees: The Fund pays management fees to ATFA based on
average daily net assets ("ANA") at the following stated rate:
0.75% of ANA
ATFA currently voluntarily waives its advisory fee and will reimburse the Fund
to the extent that operating expenses, excluding 12b-1 fees, exceed the
following stated annual limit:
1.35% Expense Limit
If total fund expenses fall below the annual expense limitations agreed to by
the adviser within the succeeding three years, the Fund may be required to pay
the advisor a portion or all of the waived advisory fees.
Advisory Fee Available for
Waived Recapture Through
-------------- ------------------
Fiscal Year 2003 - 10/31/2006
Fiscal Year 2002 82 10/31/2005
For the year ended October 31, 2003, ATFA has voluntarily agreed to waive the
recapture of $82 reimbursed expenses that were otherwise eligible for
recapture.
Distribution and service fees: The Fund has a 12b-1 distribution plan under the
1940 Act pursuant to which an annual fee, based on average daily net assets, is
paid to the distributor for various disbursements such as broker-dealer account
servicing fees and other promotional expenses of the Fund. The 12b-1 fee for
the Fund is comprised of a 0.25% service fee and the remaining amount is an
asset-based sales charge/distribution fee. The Fund is authorized under the
12b-1 plan to pay fees on each class up to the following limits:
Class A 0.35%
Class B 1.00%
Class C 1.00%
Class L 1.00%
Class M 0.90%
Underwriter commissions relate to front-end sales charges imposed for Class A
and M shares and contingent deferred sales charges from Classes B, L, M and
certain A share redemptions. For the year ended October 31, 2003, the
underwriter commissions were as follows:
Received by Underwriter $ 35
Retained by Underwriter 5
Contingent Sales Charges 12
Administrative services: The Fund has entered into an agreement with ATFS for
financial and legal fund administration services, which include such items as
compliance, expenses, financial statements and other reporting, distributions,
tax returns, prospectus preparation, board of trustees meeting support and
other legal matters. Transfer agent fees are reflected separately from
Administration fees on the Statement of Operations. The Legal fees on the
Statement of Operations are for fees paid to external legal counsel. ATFS
provides its services to the Fund at cost and is reimbursed monthly.
Transfer agent fees: The Fund incurs ATIS annual per-account charges (not in
thousands) of $20.00 for each open shareholder account and $1.63 for each
closed account maintained, and certain out of pocket expenses.
Deferred compensation plan: Each eligible Fund Trustee may elect participation
in the Deferred Compensation Plan ("the Plan"). Under the Plan, such Trustees
may defer payment of a percentage of their total fees earned as a Fund Trustee.
These deferred amounts may be invested in any IDEX Fund. At October 31, 2003,
the value of invested plan amounts was $1. Invested plan amounts and the total
liability for deferred compensation to the Trustees under the Plan at October
31, 2003, are included in Net assets in the accompanying Statement of Assets
and Liabilities.
NOTE 3. INVESTMENT TRANSACTIONS
The cost of securities purchased and proceeds from securities sold (excluding
short-term securities) for the year ended October 31, 2003, were as follows:
Purchases of securities:
Long-Term excluding U.S. Government $ 252,892
U.S. Government -
Proceeds from maturities and sales of securities:
Long-Term excluding U.S. Government 93,801
U.S. Government -
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Convertible Securities 10
IDEX Transamerica Convertible Securities
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 4. FEDERAL INCOME TAX MATTERS
The Fund has not made any provision for federal income or excise taxes due to
its policy to distribute all of its taxable income and capital gains to its
shareholders and otherwise qualify as a regulated investment company under the
Internal Revenue Code. Income and capital gain distributions are determined in
accordance with income tax regulations, which may differ from GAAP. These
differences are primarily due to differing treatments for items including, but
not limited to, wash sales and capital loss carryforwards.
The tax character of distributions paid may differ from the character of
distributions shown in the Statements of Changes in Net Assets
are primarily due to short-term gains being treated as ordinary income for tax
purposes. The tax character of distributions paid during 2002 and 2003 was as
follows:
2002 Distributions paid from:
Ordinary income $ 64
Long-term capital gains -
2003 Distributions paid from:
Ordinary income $ 1,565
Long-term capital gains -
The tax basis components of distributable earnings as of October 31, 2003, are
as follows:
Undistributed Ordinary Income $ 3,407
========
Undistributed Long-term Capital Gains $ 27
========
Capital Loss Carryforward $ -
========
Net Unrealized Appreciation (Depreciation) $ 11,939
========
The capital loss carryforward utilized as of October 31, 2003 was $377.
The aggregate cost of investments and composition of unrealized appreciation
(depreciation) for federal income tax purposes as of October 31, 2003, are as
follows:
Federal Tax Cost Basis $ 211,533
=========
Unrealized Appreciation $ 14,099
Unrealized (Depreciation) (2,160)
---------
Net Unrealized Appreciation (Depreciation) $ 11,939
=========
Supplemental Tax Information
(unaudited)
For dividends paid during the year ended October 31, 2003, the Fund designates
qualified dividend income to the maximum extent allowable.
For corporate shareholders, 10% of investment income (dividend income plus
short-term gains, if any) qualifies for the dividends received deduction.
The information and distributions reported herein may differ from the
information and distributions taxable to the shareholders for the calendar year
ending December 31, 2003. Complete information will be computed and reported in
conjunction with your 2003 Form 1099-DIV.
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Convertible Securities 11
- --------------------------------------------------------------------------------
Report of Independent Certified Public Accountants
To the Board of Trustees and Shareholders of
IDEX Transamerica Convertible Securities
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of IDEX Transamerica Convertible
Securities (the "Fund") (one of the portfolios constituting the IDEX Mutual
Funds) at October 31, 2003, and the results of its operations, the changes in
its net assets and the financial highlights for each of the periods indicated,
in conformity with accounting principles generally accepted in the United
States of America. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of the
Fund's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with auditing standards generally accepted
in the United States of America, which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits, which included confirmation of securities at October
31, 2003 by correspondence with the custodian and brokers, provide a reasonable
basis for our opinion.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Tampa, Florida
December 18, 2003
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Convertible Securities 12
IDEX Transamerica Equity
- --------------------------------------------------------------------------------
MARKET ENVIRONMENT
U.S. equity markets rebounded sharply in the twelve months ended October 31,
2003, driven largely by anticipation of a stronger economy. The Standard and
Poor's 500 Composite Stock Index ("S&P 500") rose 20.79%.
With the exception of the first three months of 2003 (when war-related concerns
dominated the market), economically sensitive sectors performed best: equipment
manufacturer of all types, railroads, metals and mining operations, and
Internet software and service providers were among the market's leaders. While
these industries were strongest, it is fair to say that nearly every industry
moved into positive territory during the period, something we have not seen for
several years. Only the pharmaceuticals, food and staples, retailing, and
distribution industries lost ground.
PERFORMANCE
For the year ended October 31, 2003, IDEX Transamerica Equity returned 24.28%.
By comparison its benchmark, the S&P 500, returned 20.79%.
STRATEGY REVIEW
Although the media sector was not a market leader during this period, much of
the portfolio's outperformance was due to its media investments. The portfolio
was significantly overweighted in this industry, and our choices delivered much
stronger returns than the industry in general. Leading the way was satellite-TV
provider Echostar Communications Corporation ("Echostar"), the company behind
DISH Network. Over the course of the year, Echostar successfully resolved
issues surrounding a proposed merger that was disallowed by the Federal
Communications Commission ("FCC") and, in the process shored up its balance
sheet. Later, the company saw its list of subscribers and revenues grow.
Another media holding that did well was XM Satellite Radio Holdings Inc. ("XM
Satellite"), which provides individuals with 100 digital-quality radio channels
and few commercial interruptions, all at a very reasonable monthly price. XM
Satellite caught investors' attention this year as its balance sheet improved.
Another plus for this company is that it has little competition, since the
number of satellite licenses available is very limited.
In keeping with the exceptionally positive trends for equipment manufacturers
and Internet software companies, our investments in QUALCOMM Incorporated
("QUALCOMM"), Intel Corporation ("Intel") and Expedia, Inc. ("Expedia") made
hefty contributions to results. QUALCOMM is well positioned as a chip supplier
for code division multiple access ("CDMA") based telecommunications devices
(such as SANYO Electric Co., Ltd. and SANYO Electric Co., Ltd., Samsung
Electronics Co., Ltd. cell phones). In the event that cell service providers in
Europe were to embrace the CDMA platform, QUALCOMM would likely be a major
beneficiary. We like Intel for its consistent attention to expense controls. As
for Expedia, shares of this major provider of online travel services nearly
doubled after it was acquired by InterActiveCorp, a well-managed conglomeration
of brand-name Internet services.
The gains for these and other stocks were partially diluted by losses for MBNA
Corporation ("MBNA") and Safeway Inc. ("Safeway"). Looking back, we regret that
we did not sell Safeway sooner, before it increasingly disappointed on a
fundamental level. Conversely, we would have done better to hold on to MBNA
longer. As it turned out, MBNA, a major credit-card issuer, did not encounter
the delinquency and default problems that we anticipated; an improving economy
made it easier for cardholders to pay their debts.
/s/ Jeffrey S. Van Harte
Jeffrey S. Van Harte
/s/ Gary U. Rolle
Gary U. Rolle
Co-Fund Managers
Transamerica Investment Management, LLC
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Equity 1
IDEX Transamerica Equity
- --------------------------------------------------------------------------------
Comparison of change in value of $10,000 investment in Class A shares and its
comparative index.
[The following data was represented as a line chart in the printed material.]
Growth of $10,000
Inception of 3/1/02 through 10/31/03
Investment less sales charges - $9,452
DATE Class A S&P 500
- ------------ ---------- ----------
3/1/2000 9,452 10,000
3/31/2000 10,323 10,978
6/30/2000 9,699 10,687
9/30/2000 9,557 10,583
12/31/2000 8,288 9,756
3/31/2001 7,019 8,600
6/30/2001 7,422 9,103
9/30/2001 6,057 7,767
12/31/2001 6,836 8,597
3/31/2002 6,718 8,621
6/30/2002 5,643 7,466
9/30/2002 4,773 6,177
12/31/2002 5,236 6,698
3/31/2003 5,284 6,486
6/30/2003 5,870 7,485
9/30/2003 6,087 7,683
10/31/2003 6,484 8,117
Average Annual Total Return for Periods Ended 10/31/03
- --------------------------------------------------------------------------------
From Inception
1 year Inception Date
- ---------------------------------------------------------------------------
Class A (NAV) 24.28% -9.76% 3/1/00
Class A (POP) 17.44% -11.14% 3/1/00
S&P 500(1) 20.79% -5.53% 3/1/00
- ---------------------------------------------------------------------------
Class B (NAV) 23.70% -10.41% 3/1/00
Class B (POP) 18.70% -10.90% 3/1/00
- ---------------------------------------------------------------------------
Class C (NAV) 23.70% -10.41% 3/1/00
- ---------------------------------------------------------------------------
Class L (NAV) - 26.04% 11/11/02
Class L (POP) - 24.04% 11/11/02
- ---------------------------------------------------------------------------
Class M (NAV) 23.62% -10.33% 3/1/00
Class M (POP) 21.38% -10.58% 3/1/00
- ---------------------------------------------------------------------------
NOTES
(1) The Standard & Poor's 500 Composite Stock (S&P 500) 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 Micropal(R)(C) 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 shares, (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.
Periods less than 1 year represent total return and are not annualized.
This material must be preceded or accompanied by a current prospectus, which
includes specific contents regarding the investment objectives and policies of
this fund.
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Equity 2
IDEX Transamerica Equity
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
At October 31, 2003
(all amounts except share amounts in thousands)
Shares Value
- --------------------------------------------------------------------------------
COMMON STOCKS (98.7%)
Apparel & Accessory Stores (2.3%)
TJX Companies, Inc. (The) 70,000 $ 1,469
Business Services (8.5%)
First Data Corporation (b) 80,000 2,856
Moody's Corporation 45,000 2,602
Chemicals & Allied Products (3.6%)
Praxair, Inc. 33,000 2,296
Commercial Banks (6.5%)
Northern Trust Corporation 53,000 2,462
State Street Corporation 32,000 1,676
Communication (14.9%)
Cox Communications, Inc.-Class A (a) 82,000 2,794
Echostar Communications
Corporation-Class A (a)(b) 75,000 2,874
Liberty Media Corporation-Class A (a) 185,000 1,867
XM Satellite Radio Holdings Inc. (a)(b) 100,000 2,026
Communications Equipment (5.5%)
QUALCOMM Incorporated 74,000 3,515
Computer & Data Processing Services (4.5%)
Microsoft Corporation 110,000 2,877
Drug Stores & Proprietary Stores (2.4%)
Walgreen Co. 45,000 1,567
Electronic Components & Accessories (2.8%)
Intel Corporation 55,000 1,818
Fabricated Metal Products (3.2%)
Gillette Company (The) 65,000 2,074
Hotels & Other Lodging Places (2.7%)
Marriott International, Inc.-Class A 40,000 1,728
Insurance (3.7%)
WellPoint Health Networks Inc. (a) 27,000 2,400
Management Services (4.0%)
Paychex, Inc. 65,000 2,530
Medical Instruments & Supplies (2.5%)
Zimmer Holdings, Inc. (a)(b) 25,000 1,595
Personal Services (2.6%)
Weight Watchers International, Inc. (a)(b) 44,500 1,642
Pharmaceuticals (9.2%)
Allergan, Inc. 28,000 2,117
Genentech, Inc. (a) 30,000 2,459
Pfizer Inc. 41,000 1,296
Retail Trade (4.4%)
Staples, Inc. (a) 105,000 2,816
Shares Value
- --------------------------------------------------------------------------------
Transportation & Public Utilities (7.0%)
Expeditors International of
Washington, Inc. 70,000 $ 2,628
InterActiveCorp (a)(b) 50,407 1,850
Trucking & Warehousing (4.6%)
United Parcel Service, Inc.-Class B (b) 41,000 2,973
Variety Stores (3.8%)
Wal-Mart Stores, Inc. 41,000 2,417
--------
Total Common Stocks (cost: $51,372) 63,224
--------
Principal Value
- --------------------------------------------------------------------------------
SECURITY LENDING COLLATERAL (21.3%)
Debt (18.7%)
Bank Notes (2.2%)
Canadian Imperial Bank of Commerce
1.12%, due 11/04/2003 $ 592 $ 591
Fleet National Bank
1.06%, due 01/21/2004 828 828
Euro Dollar Terms (10.6%)
Bank of Montreal
1.03%, due 11/13/2003 474 474
1.04%, due 11/14/2003 416 416
Bank of Nova Scotia (The)
1.06%, due 11/12/2003 237 237
Bank of Scotland
1.04%, due 11/14/2003 474 474
Citigroup Inc.
1.08%, due 01/05/2004 711 711
Credit Agricole Indosuez
1.08%, due 01/06/2004 521 521
Den Danske Bank
1.04%, due 11/10/2003 237 237
1.08%, due 01/20/2004 711 711
Royal Bank of Canada
1.04%, due 11/24/2003 592 592
1.06%, due 12/08/2003 237 237
Royal Bank of Scotland Group PLC (The)
1.08%, due 01/15/2004 711 711
SouthTrust Bank
1.08%, due 01/16/2004 711 711
Wells Fargo & Company
1.04%, due 11/20/2003 711 711
Promissory Notes (1.3%)
Goldman Sachs Group, Inc. (The)
1.15%, due 11/03/2003 829 829
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Equity 3
IDEX Transamerica Equity
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Principal Value
- --------------------------------------------------------------------------------
Repurchase Agreements (4.6%) (c)
Goldman Sachs Group, Inc. (The)
1.10% Repurchase Agreement dated
10/31/2003 to be repurchased at $237
on 11/03/2003 $ 237 $ 237
Merrill Lynch & Co., Inc.
1.10% Repurchase Agreement dated
10/31/2003 to be repurchased at $2,723
on 11/03/2003 2,723 2,723
Shares Value
- --------------------------------------------------------------------------------
Investment Companies (2.6%)
Money Market Funds (2.6%)
Merrimac Cash Series Fund-
Premium Class
1-day yield of 0.97% 1,658,062 $ 1,658
---------
Total Security Lending Collateral (cost: $13,609) 13,609
---------
Total Investment Securities (cost: $64,981) $ 76,833
=========
SUMMARY:
Investments, at value 120.0 % $ 76,833
Liabilities in excess of other assets (20.0)% (12,816)
--------- ---------
Net assets 100.0 % $ 64,017
========= =========
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 (see Note
1). The value at October 31, 2003, of all securities on loan is $13,163.
(c) Cash collateral for the Repurchase Agreements, valued at $3,020, 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.
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Equity 4
IDEX Transamerica Equity
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
At October 31, 2003
(all amounts except per share amounts in thousands)
Assets:
Investment securities, at value (cost: $64,981)
(including $13,163 of securities loaned) $ 76,833
Cash 956
Receivables:
Investment securities sold 87
Shares of beneficial interest sold 13
Interest 1
Dividends 36
Other 9
--------
77,935
--------
Liabilities:
Accounts payable and accrued liabilities:
Shares of beneficial interest redeemed 202
Management and advisory fees 47
Distribution fees 23
Transfer agent fees 10
Payable for securities on loan 13,609
Other 27
--------
13,918
--------
Net Assets $ 64,017
========
Net Assets Consist of:
Shares of beneficial interest, unlimited shares authorized $ 57,130
Accumulated net investment income (loss) -
Accumulated net realized gain (loss) from investment
securities (4,965)
Net unrealized appreciation (depreciation) on investment
securities 11,852
--------
Net Assets $ 64,017
========
Shares Outstanding:
Class A 8,256
Class B 691
Class C 109
Class L 215
Class M 93
Net Asset Value Per Share:
Class A $ 6.86
Class B 6.68
Class C 6.68
Class L 6.68
Class M 6.70
Maximum Offering Price Per Share (a):
Class A $ 7.26
Class M 6.77
(a) 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.
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the year ended October 31, 2003
(all amounts in thousands)
Investment Income:
Interest $ 11
Dividends 342
Income from loaned securities-net 12
--------
365
--------
Expenses:
Management and advisory fees 423
Transfer agent fees 61
Printing and shareholder reports 8
Custody fees 16
Administration fees 37
Legal fees 3
Auditing and accounting fees 18
Trustees fees 3
Registration fees 65
Other 3
Distribution and service fees:
Class A 168
Class B 35
Class C 7
Class L 3
Class M 6
--------
Total expenses 856
--------
Net Investment Income (Loss) (491)
--------
Net Realized and Unrealized Gain (Loss):
Realized gain (loss) from investment securities) (1,072)
Increase (decrease) in unrealized appreciation
(depreciation) on investment securities 14,389
--------
Net Gain (Loss) on Investment Securities 13,317
--------
Net Increase (Decrease) in Net Assets Resulting from
Operations $ 12,826
========
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Equity 5
IDEX Transamerica Equity
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended
(all amounts in thousands)
October 31, October 31,
2003 2002
------------ -----------
Increase (Decrease) In Net Assets From:
Operations:
Net investment income (loss) $ (491) $ (211)
Net realized gain (loss) from investment
securities (1,072) (1,308)
Net unrealized appreciation
(depreciation) on investment
securities 14,389 (1,066)
-------- -------
12,826 (2,585)
-------- -------
Distributions to Shareholders:
From net investment income:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
-------- -------
- -
-------- -------
From net realized gains:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
-------- -------
- -
-------- -------
Capital Share Transactions:
Proceeds from shares sold:
Class A 37,805 25,376
Class B 2,327 1,357
Class C 370 620
Class L 1,359 -
Class M 133 340
-------- -------
41,994 27,693
-------- -------
Dividends and distributions reinvested:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
-------- -------
- -
-------- -------
Cost of shares redeemed:
Class A (17,982) (1,293)
Class B (1,240) (1,146)
Class C (706) (843)
Class L (4) -
Class M (379) (250)
-------- -------
(20,311) (3,532)
-------- -------
21,683 24,161
-------- -------
Net increase (decrease) in net assets 34,509 21,576
-------- -------
Net Assets:
Beginning of year 29,508 7,932
-------- -------
End of year $ 64,017 $ 29,508
======== ========
Accumulated Net Investment Income (Loss) $ - $ (1)
======== ========
October 31, October 31,
2003 2002
------------ -----------
Share Activity:
Shares issued:
Class A 6,674 4,332
Class B 394 214
Class C 65 107
Class L 216 -
Class M 23 51
------- ------
7,372 4,704
------- ------
Shares issued-reinvested from distributions:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
------- ------
- -
------- ------
Shares redeemed:
Class A (2,972) (209)
Class B (209) (196)
Class C (126) (147)
Class L (1) -
Class M (66) (41)
------- ------
(3,374) (593)
------- ------
Net increase (decrease) in shares
outstanding 3,998 4,111
======= ======
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Equity 6
IDEX Transamerica Equity
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share of beneficial interest outstanding throughout each period
-----------------------------------------------------------------------------------------------------------
Investment Operations Distributions
------------------------------------------- -------------------------------------
Net Asset Net Asset
For the Value, Net Net Realized From Net From Net Value,
Period Beginning Investment and Unrealized Total Investment Realized Total End
Ended (d)(g) of Period Income (Loss) Gain (Loss) Operations Income Gains Distributions of Period
- ----------------------------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 $ 5.52 $ (0.05) $ 1.39 $ 1.34 $ - $ - $ - $ 6.86
10/31/2002 6.38 (0.07) (0.79) (0.86) - - - 5.52
10/31/2001 10.16 (0.10) (3.68) (3.78) - - - 6.38
10/31/2000 10.00 (0.02) 0.18 0.16 - - - 10.16
- ----------------------------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 5.40 (0.09) 1.37 1.28 - - - 6.68
10/31/2002 6.29 (0.12) (0.77) (0.89) - - - 5.40
10/31/2001 10.12 (0.16) (3.67) (3.83) - - - 6.29
10/31/2000 10.00 (0.06) 0.18 0.12 - - - 10.12
- ----------------------------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 5.40 (0.09) 1.37 1.28 - - - 6.68
10/31/2002 6.29 (0.12) (0.77) (0.89) - - - 5.40
10/31/2001 10.12 (0.16) (3.67) (3.83) - - - 6.29
10/31/2000 10.00 (0.06) 0.18 0.12 - - - 10.12
- ----------------------------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 5.30 (0.09) 1.47 1.38 - - - 6.68
- ----------------------------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 5.42 (0.08) 1.36 1.28 - - - 6.70
10/31/2002 6.31 (0.11) (0.78) (0.89) - - - 5.42
10/31/2001 10.12 (0.14) (3.67) (3.81) - - - 6.31
10/31/2000 10.00 (0.06) 0.18 0.12 - - - 10.12
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
-----------------------------------------------------------------------
Ratio of Expenses
Net Assets, to Average Net Investment
For the End of Net Assets (a) Income (Loss) Portfolio
Period Total Period ----------------------- to Average Turnover
Ended (g) Return (c) (000's) Net (e) Total (f) Net Assets (a) Rate (b)
- ---------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 24.28% $ 56,618 1.56% 1.56% (0.87)% 55%
10/31/2002 (13.50) 25,127 1.74 2.32 (1.19) 19
10/31/2001 (37.20) 2,750 1.55 2.75 (1.15) 42
10/31/2000 1.60 3,053 1.55 6.10 (1.18) 13
- ---------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 23.70 4,613 2.21 2.21 (1.52) 55
10/31/2002 (14.22) 2,732 2.39 2.98 (1.84) 19
10/31/2001 (37.78) 3,070 2.20 3.40 (1.80) 42
10/31/2000 1.17 2,840 2.20 6.75 (1.83) 13
- ---------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 23.70 725 2.21 2.21 (1.52) 55
10/31/2002 (14.22) 914 2.39 2.98 (1.84) 19
10/31/2001 (37.78) 1,318 2.20 3.40 (1.80) 42
10/31/2000 1.17 1,118 2.20 6.75 (1.83) 13
- ---------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 26.04 1,435 2.21 2.21 (1.52) 55
- ---------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 23.62 626 2.11 2.11 (1.42) 55
10/31/2002 (14.08) 735 2.29 2.88 (1.74) 19
10/31/2001 (37.69) 794 2.10 3.30 (1.70) 42
10/31/2000 1.24 969 2.10 6.65 (1.73) 13
- ---------------------------------------------------------------------------------------------------------------
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Equity 7
IDEX Transamerica Equity
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (continued)
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 are not annualized.
(d) Per share information is calculated based on average number of shares
outstanding for the periods ended 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 (see note 2).
(f) Ratio of Total Expenses to Average Net Assets includes all expenses before
fee waivers and reimbursements by the investment adviser.
(g) IDEX Transamerica Equity commenced operations on March 1, 2000. The
inception date for the Fund's offering of share Class L was November 11,
2002.
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Equity 8
IDEX Transamerica Equity
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
At October 31, 2003
(all amounts in thousands)
NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
IDEX Mutual Funds is a Massachusetts business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company. IDEX Transamerica Equity ("the Fund"), part of
IDEX Mutual Funds, began operations on March 1, 2000.
In the normal course of business, the Fund enters into contracts that contain a
variety of representations and warranties and which provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown, as this would involve future claims that may be made against the Fund
and/or its affiliates that have not yet occurred. However, based on experience,
the Fund expects the risk of loss to be remote.
See the Prospectus and Statement of Additional Information for a description of
the Fund's investment objective.
In preparing the Fund's financial statements in accordance with accounting
principles generally accepted in the United States of America ("GAAP"),
estimates or assumptions (which could differ from actual results) may be used
that affect reported amounts and disclosures. The following policies were
consistently followed by the Fund, in accordance with GAAP.
Multiple class operations and expenses: The Fund currently offers five classes
of shares, each with a public offering price that reflects different sales
charges, if any, and expense levels. Effective November 11, 2002, Class C and M
shares were closed to new investors. Income, non-class specific expenses and
realized and unrealized gains and losses, are allocated daily to each class,
based upon the value of shares outstanding method as permitted under Rule 18f-3
of the 1940 Act. Each class bears its own specific expenses as well as a
portion of general, common expenses.
Security valuations: Fund investments traded on an exchange are valued at the
closing price on the day of valuation on the exchange where the security is
principally traded. With respect to securities traded on the NASDAQ INMS, such
closing price may be the last reported sales price or the NASDAQ Official
Closing Price.
Securities traded in the over-the-counter market and listed securities for
which no sale was reported on that date are valued at the last quoted bid
price.
Debt securities are valued by independent pricing services; however, those that
mature in sixty days or less are valued at amortized cost, which approximates
market.
Other securities for which quotations are not readily available are valued at
fair value determined in good faith, in accordance with procedures established
by and, under the supervision of the Board of Trustees and the Fund's Valuation
Committee.
Cash: The Fund may leave cash overnight in its cash account with the custodian,
Investors Bank and Trust Company ("IBT"). IBT has been contracted on behalf of
the Fund to invest the excess cash into a savings account, which at October 31,
2003, was paying an interest rate of 0.75%.
Directed brokerage: The sub-adviser, to the extent consistent with the best
execution and usual commission rate policies and practices, may place security
transactions of the Fund with broker/dealers with which IDEX Mutual Funds has
established a Directed Brokerage Program. A Directed Brokerage Program is any
arrangement under which a broker/dealer applies a portion of the commissions
received by such broker/dealer on the security transactions to the Fund. In no
event will commissions paid by the Fund be used to pay expenses that would
otherwise be borne by any other funds within IDEX Mutual Funds, or by any other
party. Directed commissions during the year ended October 31, 2003, of $22 are
included in net realized gains in the Statement of Operations.
Securities lending: The Fund may lend securities to enhance fund earnings from
investing cash collateral received in making such loans to qualified borrowers
(typically broker/dealers). The Fund has engaged its custodian bank, IBT, as a
lending agent to administer its securities lending program. IBT earned $5 of
program net income for its services. When the Fund makes a security loan, it
receives cash collateral as protection against the risk that the borrower will
default on the loan, and records an asset for the cash invested collateral and
a liability for the return of the collateral.
Securities on loan are included in Investment securities at value on the
Statement of Assets and Liabilities and remain on the Schedule of Investments.
Loans of securities are required to be secured by collateral at least equal to
102% of the value of the securities at inception of the loan, and not less then
100% thereafter. The Fund may invest cash collateral in short-term money market
instruments including: U.S. Treasury Bills, U.S. agency obligations, commercial
paper, money market mutual funds, repurchase agreements and other highly rated,
liquid investments. During the life of securities loans, the collateral and
securities loaned remain subject to fluctuation in value. IBT marks to market
securities loaned and the collateral each business day. If additional
collateral is due (at least $1), IBT collects additional cash collateral from
the borrowers. Although securities loaned will be fully collateralized at all
times, IBT may experience delays in, or may be prevented from, recovering the
collateral on behalf of the Fund. The Fund may recall a loaned security
position at any time from the borrower through IBT. In the event the borrower
fails to timely return a recalled security, IBT may indemnify the Fund by
purchasing replacement securities for the Fund at its own expense and claiming
the collateral to fund such a purchase. IBT absorbs the loss if the collateral
value is not sufficient to cover the cost of the replacement securities. If
replacement securities are not available, IBT will credit the equivalent cash
value to the Fund.
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Equity 9
IDEX Transamerica Equity
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 1-(continued)
Income from securities lending is included in the Statement of Operations. The
amount of collateral and value of securities on loan are included in the
Statement of Assets and Liabilities as well as on the Schedule of Investments.
Security transactions and investment income: Security transactions are recorded
on the trade date. Security gains and losses are calculated on the specific
identification basis. Dividend income is recorded on the ex-dividend date or,
in the case of foreign securities, as soon as the Fund is informed of the
ex-dividend date. Interest income, including accretion of discounts and
amortization of premiums, is recorded on the accrual basis commencing on the
settlement date.
Dividend distributions: Distributions to shareholders are recorded on the
ex-dividend date and are determined in accordance with Federal income tax
regulations which may differ from GAAP.
NOTE 2. RELATED PARTY TRANSACTIONS
AEGON/Transamerica Fund Advisers, Inc. ("ATFA") is the Fund's investment
adviser. AEGON/Transamerica Fund Services, Inc. ("ATFS") is the Fund's
administrator. AFSG Securities Corp. ("AFSG") is the Fund's
distributor/principal underwriter. AEGON/Transamerica Investor Services, Inc.
("ATIS") is the 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. AUSA and WRL are wholly owned indirect
subsidiaries of AEGON NV, a Netherlands corporation.
The following schedule reflects the percentage of fund assets owned by
affiliated mutual funds (ie: through the assets allocation funds)
Net % of
Assets Net Assets
---------- -----------
IDEX Asset Allocation
Conservative Portfolio $ 3,442 5%
IDEX Asset Allocation Growth 8,624 13%
IDEX Asset Allocation Moderate
Growth 20,685 32%
IDEX Asset Allocation Moderate 18,438 29%
----
79%
====
Transamerica Investment Management, LLC is both an affiliate of the Fund and a
sub-adviser to the Fund.
Investment advisory fees: The Fund pays management fees to ATFA based on
average daily net assets ("ANA") at the following stated break points:
0.80% of the first $500 million of ANA
0.70% of ANA over $500 million
ATFA currently voluntarily waives its advisory fee and will reimburse the Fund
to the extent that operating expenses, excluding 12b-1 fees, exceed the
following stated annual limit:
1.40% Expense Limit
If total fund expenses fall below the annual expense limitations agreed to by
the adviser within the succeeding three years, the Fund may be required to pay
the advisor a portion or all of the waived advisory fees.
Distribution and service fees: The Fund has a 12b-1 distribution plan under the
1940 Act pursuant to which an annual fee, based on average daily net assets, is
paid to the distributor for various disbursements such as broker-dealer account
servicing fees and other promotional expenses of the Fund. The 12b-1 fee for
the Fund is comprised of a 0.25% service fee and the remaining amount is an
asset-based sales charge/distribution fee. The Fund is authorized under the
12b-1 plan to pay fees on each class up to the following limits:
Class A 0.35%
Class B 1.00%
Class C 1.00%
Class L 1.00%
Class M 0.90%
Underwriter commissions relate to front-end sales charges imposed for Class A
and M shares and contingent deferred sales charges from Classes B, L, M and
certain A share redemptions. For the year ended October 31, 2003, the
underwriter commissions were as follows:
Received by Underwriter $ 28
Retained by Underwriter 4
Contingent Sales Charges 13
Administrative services: The Fund has entered into an agreement with ATFS for
financial and legal fund administration services, which include such items as
compliance, expenses, financial statements and other reporting, distributions,
tax returns, prospectus preparation, board of trustees meeting support and
other legal matters. Transfer agent fees are reflected separately from
Administration fees on the Statement of Operations. The Legal fees on the
Statement of Operations are for fees paid to external legal counsel. ATFS
provides its services to the Fund at cost and is reimbursed monthly.
Transfer agent fees: The Fund incurs ATIS annual per-account charges (not in
thousands) of $20.00 for each open shareholder account and $1.63 for each
closed account maintained, and certain out of pocket expenses.
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Equity 10
IDEX Transamerica Equity
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 2-(continued)
Deferred compensation plan: Each eligible Fund Trustee may elect participation
in the Deferred Compensation Plan ("the Plan"). Under the Plan, such Trustees
may defer payment of a percentage of their total fees earned as a Fund Trustee.
These deferred amounts may be invested in any IDEX Fund. At October 31, 2003,
the value of invested plan amounts was $1. Invested plan amounts and the total
liability for deferred compensation to the Trustees under the Plan at October
31, 2003, are included in Net assets in the accompanying Statement of Assets
and Liabilities.
NOTE 3. INVESTMENT TRANSACTIONS
The cost of securities purchased and proceeds from securities sold (excluding
short-term securities) for the year ended October 31, 2003, were as follows:
Purchases of securities:
Long-Term excluding U.S. Government $ 50,689
U.S. Government -
Proceeds from maturities and sales of securities:
Long-Term excluding U.S. Government 27,457
U.S. Government -
NOTE 4. FEDERAL INCOME TAX MATTERS
The Fund has not made any provision for federal income or excise taxes due to
its policy to distribute all of its taxable income and capital gains to its
shareholders and otherwise qualify as a regulated investment company under the
Internal Revenue Code. Income and capital gain distributions are determined in
accordance with income tax regulations, which may differ from GAAP. These
differences are primarily due to differing treatments for items including, but
not limited to, wash sales, net operating losses and capital loss
carryforwards.
Reclassifications between Undistributed net investment income (loss),
Undistributed net realized capital gains (loss) and Shares of beneficial
interest are made to reflect income and gains available for distribution under
federal tax regulations. Results of operations and net assets are not effected
by these reclassifications. These reclassifications are as follows:
Shares of beneficial interest, unlimited shares
authorized $ (492)
Accumulated net investment income (loss) 492
Accumulated net realized gain (loss) from
investment securities -
The tax basis components of distributable earnings as of October 31, 2003, are
as follows:
Undistributed Ordinary Income $ -
========
Undistributed Long-term Capital Gains $ -
========
Capital Loss Carryforward $ (3,856)
========
Net Unrealized Appreciation (Depreciation) $ 10,744
========
The capital loss carryforwards are available to offset future realized capital
gains through the periods listed:
Capital Loss
Carryforward Available through
- -------------- ------------------
$ 71 October 31, 2008
2,496 October 31, 2009
1,197 October 31, 2010
92 October 31, 2011
The aggregate cost of investments and composition of unrealized appreciation
(depreciation) for federal income tax purposes as of October 31, 2003, are as
follows:
Federal Tax Cost Basis $ 66,089
========
Unrealized Appreciation $ 10,986
Unrealized (Depreciation) (242)
--------
Net Unrealized Appreciation (Depreciation) $ 10,744
========
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Equity 11
- --------------------------------------------------------------------------------
Report of Independent Certified Public Accountants
To the Board of Trustees and Shareholders of
IDEX Transamerica Equity
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of IDEX Transamerica Equity (the
"Fund") (one of the portfolios constituting the IDEX Mutual Funds) at October
31, 2003, and the results of its operations, the changes in its net assets and
the financial highlights for each of the periods indicated, in conformity with
accounting principles generally accepted in the United States of America. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with auditing standards generally accepted in the United States of America,
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at October 31, 2003 by correspondence with the
custodian and brokers, provide a reasonable basis for our opinion.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Tampa, Florida
December 18, 2003
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Equity 12
IDEX Transamerica Growth Opportunities
- --------------------------------------------------------------------------------
MARKET ENVIRONMENT
The twelve months ended October 31, 2003, were an uneven period for U.S. equity
markets. Following a mild recovery in November 2002, markets plummeted until
March 2003, then rebounded vigorously. While the mid-year decline can be
attributed largely to apprehension about the war in Iraq, the gains that
proceeded and followed that dip were triggered primarily by anticipation of a
robust economic recovery. Stocks in economically sensitive industries -- for
example, metals and mining, semiconductors, airlines and wireless
telecommunications -- were the biggest beneficiaries of this tide of optimism.
PERFORMANCE
For the year ended October 31, 2003, IDEX Transamerica Growth Opportunities
returned 23.70%. By comparison its primary and secondary benchmarks, the
Russell 2500 Growth Index and the Russell 2000 Value Index, returned 44.76% and
43.37%, respectively.
We attribute the relative underperformance to a lack of cyclical stocks in the
portfolio; with rare exception, companies in the traditionally cyclical
industries, that have led the market since March, do not meet our investment
criteria.
STRATEGY REVIEW
Our ideal candidate for investment is a quality company benefiting from a
positive long-term secular trend. Seasoned management, high returns on capital,
strong free cash flow reinvested to enhance shareholder value, and sustainable
competitive advantages are also essential. The portfolio's largest contributor
to performance, SkillSoft PLC ("SkillSoft"), provides an excellent example.
Skillsoft is the top competitor among online education and training companies.
Its management team is conservative and very focused on executing its business
plan. They have done an admirable job of consolidating their position in the
training industry, which is rapidly moving in their direction (i.e., online
delivery). Having said that, we should also point out that, during this period,
SkillSoft performed far beyond what its pure fundamentals would have dictated;
like many other technology-related stocks, it benefited from the rising tide of
investor sentiment that went hand-in-glove with expectations of a healthier
U.S. economy.
Other strong contributors to results included consumer electronics retailer
RadioShack Corporation ("RadioShack"), a long-time holding, and XM Satellite
Radio Holdings Inc. ("XM Satellite") and GTECH Holdings Corporation ("GTECH"),
both newcomers to the portfolio. In recent years, RadioShack has focused on
improving returns from its existing stores rather than expanding. It is now
generating considerable excess cash flow and returning the excess to
shareholders.
XM Satellite presents a good example of the kind of company we like to discover
early in its development. For just $10 a month, subscribers receive
high-quality signals for more than 100 radio channels. The company has limited
competition. That advantage, along with an improving balance sheet, caught
investors' attention this year, resulting in an increase in its' stock price.
GTECH provides software, networks and professional services for transaction
processing, with an emphasis on the lottery industry. With a growing number of
states turning to lotteries to supplement revenues, GTECH has experienced
considerable growth.
Our one major disappointment during the period was Investment Technology Group,
Inc. ("ITG"), a purveyor of third-party securities-trading technology. In
retrospect, it is clear that we overestimated the company's ability to take
market share from its competitors. Although we continue to believe in the
quality of its management, we exited the stock.
/s/ Christopher Bonavico
Christopher J. Bonavico
/s/ Kenneth Broad
Kenneth F. Broad
Co-Fund Managers
Transamerica Investment Management, LLC
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Growth Opportunities 1
IDEX Transamerica Growth Opportunities
- --------------------------------------------------------------------------------
Comparison of change in value of $10,000 investment in Class A shares and its
comparative index.
[The following data was represented as a line chart in the printed material.]
Growth of $10,000
Inception of 3/1/00 through 10/31/03
Investment less sales charges - $9,452
DATE Class A Russell 2000 Russell 2500
- ------------ ------------ --------------- --------------
3/1/2000 9,452 10,000 10,000
3/31/2000 9,000 9,341 9,215
6/30/2000 9,412 8,988 8,579
9/30/2000 9,346 9,087 8,327
12/31/2000 6,347 8,459 6,715
3/31/2001 4,174 7,909 5,378
6/30/2001 5,005 9,039 6,522
9/30/2001 4,235 7,160 4,756
12/31/2001 5,224 8,670 5,988
3/31/2002 5,634 9,015 5,811
6/30/2002 5,057 8,262 4,845
9/30/2002 4,197 6,494 3,921
12/31/2002 4,509 6,894 4,246
3/31/2003 4,338 6,584 4,110
6/30/2003 4,990 8,126 5,044
9/30/2003 5,330 8,864 5,546
10/31/2003 5,623 9,609 6,002
Average Annual Total Return for Periods Ended 10/31/03
- --------------------------------------------------------------------------------
From Inception
1 year Inception Date
- -----------------------------------------------------------------------
Class A (NAV) 23.70% -13.19% 3/1/00
Class A (POP) 16.90% -14.51% 3/1/00
Russell 2500(1) 44.76% -12.99% 3/1/00
Russell 2000(1) 43.37% -1.08% 3/1/00
- -----------------------------------------------------------------------
Class B (NAV) 23.19% -13.83% 3/1/00
Class B (POP) 18.19% -14.30% 3/1/00
- -----------------------------------------------------------------------
Class C (NAV) 23.19% -13.83% 3/1/00
- -----------------------------------------------------------------------
Class L (NAV) - 25.32% 11/11/02
Class L (POP) - 23.32% 11/11/02
- -----------------------------------------------------------------------
Class M (NAV) 23.09% -13.75% 3/1/00
Class M (POP) 20.86% -13.98% 3/1/00
- -----------------------------------------------------------------------
NOTES
(1) The Russell 2500 Growth (Russell 2500) Index and the Russell 2000 (Russell
2000) are unmanaged indexes 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. For reporting periods through October 31,
2002, the fine ahs selected the Russell 2000 Index as its benchmark
measure; however, the Russell 2500 Growth is more appropriate for
comparisons to the fund. Source: Standard & Poor's Micropal(R)(C) 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 shares, (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.
Investing in small cap stocks generally involves greater risk and volatility,
therefore an investment in the fund may not be appropriate for everyone.
Periods less than 1 year represent total return and are not annualized.
This material must be preceded or accompanied by a current prospectus, which
includes specific contents regarding the investment objectives and policies of
this fund.
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Growth Opportunities 2
IDEX Transamerica Growth Opportunities
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
At October 31, 2003
(all amounts except share amounts in thousands)
Shares Value
- --------------------------------------------------------------------------------
COMMON STOCKS (89.0%)
Automotive (4.4%)
Gentex Corporation (b) 250,000 $ 9,762
Business Credit Institutions (4.5%)
Financial Federal Corporation (a)(b) 297,500 9,981
Business Services (3.0%)
Moody's Corporation 115,000 6,650
Communication (6.0%)
Global Payments Inc. 175,000 7,289
XM Satellite Radio Holdings Inc. (a)(b) 290,000 5,875
Computer & Data Processing Services (14.4%)
BARRA, Inc. (a) 185,000 7,030
GTECH Holdings Corporation 235,000 10,500
SkillSoft PLC-ADR (a) 1,725,000 13,766
Educational Services (5.2%)
DeVRY Inc. (a) 470,000 11,407
Electronic & Other Electric Equipment (2.6%)
Gemstar-TV Guide International, Inc. (a) 1,195,000 5,605
Industrial Machinery & Equipment (0.9%)
Graco Inc. 50,000 1,905
Management Services (5.2%)
ServiceMaster Company (The) 1,000,000 11,470
Oil & Gas Extraction (4.6%)
EOG Resources, Inc. 240,000 10,114
Paper & Allied Products (2.0%)
Pactiv Corporation (a) 200,000 4,410
Paperboard Containers & Boxes (4.4%)
Packaging Corporation of America (a) 495,000 9,751
Personal Services (4.6%)
Weight Watchers International, Inc. (a)(b) 275,000 10,148
Pharmaceuticals (5.2%)
Techne Corporation (a)(b) 325,000 11,320
Radio, Television & Computer Stores (4.4%)
RadioShack Corporation 325,000 9,746
Restaurants (4.2%)
IHOP Corp. 246,300 9,138
Security & Commodity Brokers (4.1%)
BlackRock, Inc. 175,000 8,986
Transportation & Public Utilities (9.3%)
C.H. Robinson Worldwide, Inc. 255,000 9,991
Expeditors International of
Washington, Inc. 280,000 10,511
---------
Total Common Stocks (cost: $156,707) 195,355
---------
Principal Value
- --------------------------------------------------------------------------------
SECURITY LENDING COLLATERAL (11.1%)
Debt (9.7%)
Bank Notes (1.2%)
Canadian Imperial Bank of Commerce
1.12%, due 11/04/2003 $ 1,058 $ 1,058
Fleet National Bank
1.06%, due 01/21/2004 1,482 1,482
Euro Dollar Terms (5.4%)
Bank of Montreal
1.03%, due 11/13/2003 847 847
1.04%, due 11/14/2003 744 744
Bank of Nova Scotia (The)
1.06%, due 11/12/2003 423 423
Bank of Scotland
1.04%, due 11/14/2003 847 847
Citigroup Inc.
1.08%, due 01/05/2004 1,270 1,270
Credit Agricole Indosuez
1.08%, due 01/06/2004 931 931
Den Danske Bank
1.04%, due 11/10/2003 423 423
1.08%, due 01/20/2004 1,270 1,270
Royal Bank of Canada
1.04%, due 11/24/2003 1,058 1,058
1.06%, due 12/08/2003 423 423
Royal Bank of Scotland Group PLC (The)
1.08%, due 01/15/2004 1,270 1,270
SouthTrust Bank
1.08%, due 01/16/2004 1,270 1,270
Wells Fargo & Company
1.04%, due 11/20/2003 1,270 1,270
Promissory Notes (0.7%)
Goldman Sachs Group, Inc. (The)
1.15%, due 11/03/2003 1,482 1,482
Repurchase Agreements (2.4%) (c)
Goldman Sachs Group, Inc. (The)
1.10% Repurchase Agreement dated
10/31/2003 to be repurchased at $423
on 11/03/2003 423 423
Merrill Lynch & Co., Inc.
1.10% Repurchase Agreement dated
10/31/2003 to be repurchased at $4,870
on 11/03/2003 4,870 4,870
Shares Value
- --------------------------------------------------------------------------------
Investment Companies (1.4%)
Money Market Funds (1.4%)
Merrimac Cash Series Fund-
Premium Class
1-day yield of 0.97% 2,963,496 $ 2,964
---------
Total Security Lending Collateral (cost: $24,325) 24,325
---------
Total Investment Securities (cost: $181,032) $ 219,680
=========
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Growth Opportunities 3
IDEX Transamerica Growth Opportunities
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Value
- ------------------------------------------------------------------------
SUMMARY:
Investments, at value 100.1 % $ 219,680
Liabilities in excess of other assets (0.1)% (177)
----- ---------
Net assets 100.0 % $ 219,503
===== =========
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 (see Note
1). The value at October 31, 2003, of all securities on loan is $23,506.
(c) Cash collateral for the Repurchase Agreements, valued at $5,300, 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
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Growth Opportunities 4
IDEX Transamerica Growth Opportunities
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
At October 31, 2003
(all amounts except per share amounts in thousands)
Assets:
Investment securities, at value (cost: $181,032)
(including $23,506 of securities loaned) $ 219,680
Cash 24,070
Receivables:
Shares of beneficial interest sold 575
Interest 5
Dividends 222
Other 22
---------
244,574
---------
Liabilities:
Accounts payable and accrued liabilities:
Shares of beneficial interest redeemed 228
Management and advisory fees 99
Distribution fees 101
Transfer agent fees 183
Payable for securities on loan 24,325
Other 135
---------
25,071
---------
Net Assets $ 219,503
=========
Net Assets Consist of:
Shares of beneficial interest, unlimited shares authorized $ 510,083
Accumulated net investment income (loss) (13)
Accumulated net realized gain (loss) from
investment securities (329,214)
Net unrealized appreciation (depreciation) on
investment securities 38,647
---------
Net Assets $ 219,503
=========
Shares Outstanding:
Class A 24,754
Class B 9,069
Class C 1,658
Class L 83
Class M 1,650
Net Asset Value Per Share:
Class A $ 5.95
Class B 5.79
Class C 5.79
Class L 5.79
Class M 5.81
Maximum Offering Price Per Share (a):
Class A $ 6.30
Class M 5.87
(a) 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.
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the year ended October 31, 2003
(all amounts in thousands)
Investment Income:
Interest $ 55
Dividends 685
Income from loaned securities-net 30
--------
770
--------
Expenses:
Management and advisory fees 957
Transfer agent fees 905
Printing and shareholder reports 130
Custody fees 22
Administration fees 36
Legal fees 5
Auditing and accounting fees 30
Trustees fees 9
Registration fees 98
Other 22
Distribution and service fees:
Class A 250
Class B 346
Class C 66
Class L 3
Class M 59
--------
Total expenses 2,938
Less:
Advisory fee waiver (550)
--------
Net expenses 2,388
--------
Net Investment Income (Loss) (1,618)
--------
Net Realized and Unrealized Gain (Loss):
Realized gain (loss) from investment securities) (7,453)
Increase (decrease) in unrealized appreciation
(depreciation) on investment securities 50,490
--------
Net Gain (Loss) on Investment Securities 43,037
--------
Net Increase (Decrease) in Net Assets Resulting from
Operations $ 41,419
========
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Growth Opportunities 5
IDEX Transamerica Growth Opportunities
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended
(all amounts in thousands)
October 31, October 31,
2003 2002
------------ -------------
Increase (Decrease) In Net Assets From:
Operations:
Net investment income (loss) $ (1,618) $ (274)
Net realized gain (loss) from investment
securities (7,453) (1,294)
Net unrealized appreciation
(depreciation) on investment
securities 50,490 162
--------- ---------
41,419 (1,406)
--------- --------
Distributions to Shareholders:
From net investment income:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
--------- --------
- -
--------- --------
From net realized gains:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
--------- --------
- -
--------- --------
Capital Share Transactions:
Proceeds from shares sold:
Class A 19,246 13,110
Class B 36,877 3,651
Class C 17,492 943
Class L - -
Class M 16,502 296
--------- --------
90,117 18,000
--------- --------
Proceeds from fund acquisition:
Class A 33,925 -
Class B 38,948 -
Class C 7,034 -
Class L 280 -
Class M 8,373 -
--------- --------
88,560 -
--------- --------
Cost of shares redeemed:
Class A (7,951) (3,315)
Class B (7,834) (1,833)
Class C (2,186) (845)
Class L (1,116) -
Class M (2,568) (563)
--------- --------
(21,655) (6,556)
--------- --------
157,022 11,444
--------- --------
Net increase (decrease) in net assets 198,441 10,038
--------- --------
Net Assets:
Beginning of year 21,062 11,024
--------- --------
End of year $ 219,503 $ 21,062
========= ========
Accumulated Net Investment Income (Loss) $ (13) $ 1
========= ========
October 31, October 31,
2003 2002
----------- ------------
Share Activity:
Shares issued:
Class A 16,179 2,468
Class B 581 687
Class C 172 177
Class L 125 -
Class M 79 55
--------- --------
17,136 3,387
--------- --------
Shares issued on fund acquisition:
Class A 7,472 -
Class B 8,792 -
Class C 1,588 -
Class L 63 -
Class M 1,886 -
--------- --------
19,801 -
--------- --------
Shares redeemed:
Class A (1,537) (620)
Class B (1,559) (385)
Class C (436) (166)
Class L (105) -
Class M (508) (109)
--------- --------
(4,145) (1,280)
--------- --------
Net increase (decrease) in shares
outstanding 32,792 2,107
========= ========
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Growth Opportunities 6
IDEX Transamerica Growth Opportunities
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share of beneficial interest outstanding throughout each period
----------------------------------------------------------------------------------------------------------
Investment Operations Distributions
------------------------------------------ -------------------------------------
Net Asset Net Asset
For the Value, Net Net Realized From Net From Net Value,
Period Beginning Investment and Unrealized Total Investment Realized Total End
Ended (d)(g) of Period Income (Loss) Gain (Loss) Operations Income Gains Distributions of Period
- ----------------------------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 $ 4.81 $ (0.06) $ 1.20 $ 1.14 $ - $ - $ - $ 5.95
10/31/2002 4.81 (0.06) 0.06 - - - - 4.81
10/31/2001 8.70 (0.07) (3.82) (3.89) - - - 4.81
10/31/2000 10.00 (0.02) (1.28) (1.30) - - - 8.70
- ----------------------------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 4.70 (0.09) 1.18 1.09 - - - 5.79
10/31/2002 4.73 (0.11) 0.08 (0.03) - - - 4.70
10/31/2001 8.66 (0.10) (3.83) (3.93) - - - 4.73
10/31/2000 10.00 (0.06) (1.28) (1.34) - - - 8.66
- ----------------------------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 4.70 (0.09) 1.18 1.09 - - - 5.79
10/31/2002 4.74 (0.10) 0.06 (0.04) - - - 4.70
10/31/2001 8.66 (0.11) (3.81) (3.92) - - - 4.74
10/31/2000 10.00 (0.06) (1.28) (1.34) - - - 8.66
- ----------------------------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 4.62 (0.09) 1.26 1.17 - - - 5.79
- ----------------------------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 4.72 (0.09) 1.18 1.09 - - - 5.81
10/31/2002 4.75 (0.10) 0.07 (0.03) - - - 4.72
10/31/2001 8.67 (0.10) (3.82) (3.92) - - - 4.75
10/31/2000 10.00 (0.05) (1.28) (1.33) - - - 8.67
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
-----------------------------------------------------------------------
Ratio of Expenses
Net Assets, to Average Net Investment
For the End of Net Assets (a) Income (Loss) Portfolio
Period Total Period ----------------------- to Average Turnover
Ended (g) Return (c) (000's) Net (e) Total (f) Net Assets (a) Rate (b)
- ---------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 23.70% $ 147,340 1.75% 2.21% (1.11)% 97%
10/31/2002 0.05 12,687 1.74 2.53 (1.35) 32
10/31/2001 (44.76) 3,807 1.55 2.83 (1.11) 59
10/31/2000 (12.96) 3,726 1.55 4.54 (1.23) 19
- ---------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 23.19 52,492 2.41 2.87 (1.76) 97
10/31/2002 ( 0.70) 5,897 2.39 3.18 (2.00) 32
10/31/2001 (45.35) 4,513 2.20 3.48 (1.76) 59
10/31/2000 (13.39) 4,366 2.20 5.19 (1.88) 19
- ---------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 23.19 9,598 2.41 2.87 (1.76) 97
10/31/2002 ( 0.70) 1,569 2.39 3.18 (2.00) 32
10/31/2001 (45.35) 1,530 2.20 3.48 (1.76) 59
10/31/2000 (13.39) 1,704 2.20 5.19 (1.88) 19
- ---------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 25.32 483 2.42 2.89 (1.78) 97
- ---------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 23.09 9,590 2.31 2.77 (1.66) 97
10/31/2002 ( 0.52) 909 2.29 3.08 (1.90) 32
10/31/2001 (45.26) 1,174 2.10 3.38 (1.66) 59
10/31/2000 (13.33) 2,090 2.10 5.09 (1.78) 19
- ---------------------------------------------------------------------------------------------------------------
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Growth Opportunities 7
IDEX Transamerica Growth Opportunities
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (continued)
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 are not annualized.
(d) Per share information is calculated based on average number of shares
outstanding for the periods ended 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 (see note 2).
(f) Ratio of Total Expenses to Average Net Assets includes all expenses before
fee waivers and reimbursements by the investment adviser.
(g) IDEX Transamerica Growth Opportunities ("the Fund") commenced operations on
March 1, 2000. The inception date for the Fund's offering of share Class L
was November 11, 2002.
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Growth Opportunities 8
IDEX Transamerica Growth Opportunities
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
At October 31, 2003
(all amounts in thousands)
NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
IDEX Mutual Funds is a Massachusetts business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company. IDEX Transamerica Growth Opportunities ("the
Fund"), part of IDEX Mutual Funds, began operations on March 1, 2000.
In the normal course of business, the Fund enters into contracts that contain a
variety of representations and warranties and which provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown, as this would involve future claims that may be made against the Fund
and/or its affiliates that have not yet occurred. However, based on experience,
the Fund expects the risk of loss to be remote.
On March 1, 2003, the Fund acquired all the net assets of IDEX Janus Capital
Appreciation, pursuant to a plan of reorganization approved by shareholders of
IDEX Janus Capital Appreciation on February 12, 2003. The acquisition was
accomplished by a tax-free exchange of 19,801 shares of the Fund for the 8,814
shares of IDEX Janus Capital Appreciation outstanding on February 28, 2003.
IDEX Janus Capital Appreciation's net assets at that date $88,560, including
$11,239 unrealized depreciation, were combined with those of the Fund. Proceeds
in connection with the acquisition were as follows:
Shares Amount
----------------------
Proceeds in connection with the acquisition
Class A 7,472 $ 33,925
Class B 8,792 38,948
Class C 1,588 7,034
Class L 63 280
Class M 1,886 8,373
--------
$ 88,560
========
See the Prospectus and Statement of Additional Information for a description of
the Fund's investment objective.
In preparing the Fund's financial statements in accordance with accounting
principles generally accepted in the United States of America ("GAAP"),
estimates or assumptions (which could differ from actual results) may be used
that affect reported amounts and disclosures. The following policies were
consistently followed by the Fund, in accordance with GAAP.
Multiple class operations and expenses: The Fund currently offers five classes
of shares, each with a public offering price that reflects different sales
charges, if any, and expense levels. Effective November 11, 2002, Class C and M
shares were closed to new investors. Income, non-class specific expenses and
realized and unrealized gains and losses, are allocated daily to each class,
based upon the value of shares outstanding method as permitted under Rule 18f-3
of the 1940 Act. Each class bears its own specific expenses as well as a
portion of general, common expenses.
Security valuations: Fund investments traded on an exchange are valued at the
closing price on the day of valuation on the exchange where the security is
principally traded. With respect to securities traded on the NASDAQ INMS, such
closing price may be the last reported sales price or the NASDAQ Official
Closing Price.
Securities traded in the over-the-counter market and listed securities for
which no sale was reported on that date are valued at the last quoted bid
price.
Debt securities are valued by independent pricing services; however, those that
mature in sixty days or less are valued at amortized cost, which approximates
market.
Other securities for which quotations are not readily available are valued at
fair value determined in good faith, in accordance with procedures established
by and, under the supervision of the Board of Trustees and the Fund's Valuation
Committee.
Cash: The Fund may leave cash overnight in its cash account with the custodian,
Investors Bank & Trust Company ("IBT"). IBT has been contracted on behalf of
the Fund to invest the excess cash into a savings account, which at October 31,
2003, was paying an interest rate of 0.75%.
Directed brokerage: The sub-adviser, to the extent consistent with the best
execution and usual commission rate policies and practices, may place security
transactions of the Fund with broker/dealers with which IDEX Mutual Funds has
established a Directed Brokerage Program. A Direct Brokerage Program is any
arrangement under which a broker/dealer applies a portion of the commissions
received by such broker/dealer on the security transactions to the Fund. In no
event will commissions paid by the Fund be used to pay expenses that would
otherwise be borne by any other funds within IDEX Mutual Funds, or by any other
party. Directed commissions during the year ended October 31, 2003, of $45 are
included in net realized gains in the Statement of Operations.
Securities lending: The Fund may lend securities to enhance fund earnings from
investing cash collateral received in making such loans to qualified borrowers
(typically broker/dealers). The Fund has engaged its custodian bank, IBT, as a
lending agent to administer its securities lending program. IBT earned $13 of
program net income for its services. When the Fund makes a security loan, it
receives cash collateral as protection against the risk that the borrower will
default on the loan, and records an asset for the cash invested collateral and
a liability for the return of the collateral.
Securities on loan are included in Investment securities at value on the
Statement of Assets and Liabilities and remain on the Schedule of Investments.
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Growth Opportunities 9
IDEX Transamerica Growth Opportunities
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 1-(continued)
Loans of securities are required at all times to be secured by collateral at
least equal to 102% of the value of the securities at inception of the loan,
and not less then 100% thereafter. The Fund may invest cash collateral in
short-term money market instruments including: U.S. Treasury Bills, U.S. agency
obligations, commercial paper, money market mutual funds, repurchase agreements
and other highly rated, liquid investments. During the life of securities
loans, the collateral and securities loaned remain subject to fluctuation in
value. IBT marks to market securities loaned and the collateral each business
day. If additional collateral is due (at least $1), IBT collects additional
cash collateral from the borrowers. Although securities loaned will be fully
collateralized at all times, IBT may experience delays in, or may be prevented
from, recovering the collateral on behalf of the Fund. The Fund may recall a
loaned security position at any time from the borrower through IBT. In the
event the borrower fails to timely return a recalled security, IBT may
indemnify the Fund by purchasing replacement securities for the Fund at its own
expense and claiming the collateral to fund such a purchase. IBT absorbs the
loss if the collateral value is not sufficient to cover the cost of the
replacement securities. If replacement securities are not available, IBT will
credit the equivalent cash value to the Fund.
Income from securities lending is included in the Statement of Operations. The
amount of collateral and value of securities on loan are included in the
Statement of Assets and Liabilities as well as on the Schedule of Investments.
Security transactions and investment income: Security transactions are recorded
on the trade date. Security gains and losses are calculated on the specific
identification basis. Dividend income is recorded on the ex-dividend date or,
in the case of foreign securities, as soon as the Fund is informed of the
ex-dividend date. Interest income, including accretion of discounts and
amortization of premiums, is recorded on the accrual basis commencing on the
settlement date.
Dividend distributions: Distributions to shareholders are recorded on the
ex-dividend date and are determined in accordance with Federal income tax
regulations which may differ from GAAP.
NOTE 2. RELATED PARTY TRANSACTIONS
AEGON/Transamerica Fund Advisers, Inc. ("ATFA") is the Fund's investment
adviser. AEGON/Transamerica Fund Services, Inc. ("ATFS") is the Fund's
administrator. AFSG Securities Corp. ("AFSG") is the Fund's
distributor/principal underwriter. AEGON/Transamerica Investor Services, Inc.
("ATIS") is the 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. AUSA and WRL are wholly owned indirect
subsidiaries of AEGON NV, a Netherlands corporation.
The following schedule reflects the percentage of fund assets owned by
affiliated mutual funds (ie: through the assets allocation funds)
Net % of
Assets Net Assets
-------- -----------
IDEX Asset Allocation
Conservative Portfolio 10,404 5%
IDEX Asset Allocation Growth 22,156 10%
IDEX Asset Allocation Moderate
Growth 39,549 18%
IDEX Asset Allocation Moderate 29,519 13%
--------
46%
Transamerica Investment Management, LLC is both an affiliate of the Fund and a
sub-adviser to the Fund.
Investment advisory fees: The Fund pays management fees to ATFA based on
average daily net assets ("ANA") at the following stated break points:
0.80% of the first $500 million of ANA
0.70% of ANA over $500 million
ATFA currently voluntarily waives its advisory fee and will reimburse the Fund
to the extent that operating expenses, excluding 12b-1 fees, exceed the
following stated annual limit:
1.40% Expense Limit
If total fund expenses fall below the annual expense limitations agreed to by
the adviser within the succeeding three years, the Fund may be required to pay
the advisor a portion or all of the waived advisory fees.
Distribution and service fees: The Fund has a 12b-1 distribution plan under the
1940 Act pursuant to which an annual fee, based on average daily net assets, is
paid to the distributor for various disbursements such as broker-dealer account
servicing fees and other promotional expenses of the Fund. The 12b-1 fee for
the Fund is comprised of a 0.25% service fee and the remaining amount is an
asset-based sales charge/distribution fee. The Fund is authorized under the
12b-1 plan to pay fees on each class up to the following limits:
Class A 0.35%
Class B 1.00%
Class C 1.00%
Class L 1.00%
Class M 0.90%
Underwriter commissions relate to front-end sales charges imposed for Class A
and M shares and contingent deferred sales charges from Classes B, L, M and
certain A share redemptions. For the year ended October 31, 2003, the
underwriter commissions were as follows:
Received by Underwriter $ 77
Retained by Underwriter 9
Contingent Sales Charges 91
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Growth Opportunities 10
IDEX Transamerica Growth Opportunities
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 2-(continued)
Administrative services: The Fund has entered into an agreement with ATFS for
financial and legal fund administration services, which include such items as
compliance, expenses, financial statements and other reporting, distributions,
tax returns, prospectus preparation, board of trustees meeting support and
other legal matters. Transfer agent fees are reflected separately from
Administration fees on the Statement of Operations. The Legal fees on the
Statement of Operations are for fees paid to external legal counsel. ATFS
provides its services to the Fund at cost and is reimbursed monthly.
Transfer agent fees: The Fund incurs ATIS annual per-account charges (not in
thousands) of $20.00 for each open shareholder account and $1.63 for each
closed account maintained, and certain out of pocket expenses.
Deferred compensation plan: Each eligible Fund Trustee may elect participation
in the Deferred Compensation Plan ("the Plan"). Under the Plan, such Trustees
may defer payment of a percentage of their total fees earned as a Fund Trustee.
These deferred amounts may be invested in any IDEX Fund. At October 31, 2003,
the value of invested plan amounts was $3. Invested plan amounts and the total
liability for deferred compensation to the Trustees under the Plan at October
31, 2003, are included in Net assets in the accompanying Statement of Assets
and Liabilities.
NOTE 3. INVESTMENT TRANSACTIONS
The cost of securities purchased and proceeds from securities sold (excluding
short-term securities) for the year ended October 31, 2003, were as follows:
Purchases of securities:
Long-Term excluding U.S. Government $ 146,703
U.S. Government -
Proceeds from maturities and sales of securities:
Long-Term excluding U.S. Government 96,405
U.S. Government -
NOTE 4. FEDERAL INCOME TAX MATTERS
The Fund has not made any provision for federal income or excise taxes due to
its policy to distribute all of its taxable income and capital gains to its
shareholders and otherwise qualify as a regulated investment company under the
Internal Revenue Code. Income and capital gain distributions are determined in
accordance with income tax regulations, which may differ from GAAP. These
differences are primarily due to differing treatments for items including, but
not limited to, wash sales, net operating losses and capital loss
carryforwards.
Reclassifications between Undistributed net investment income (loss),
Undistributed net realized capital gains (loss) and Shares of beneficial
interest are made to reflect income and gains available for distribution under
federal tax regulations. Results of operations and net assets are not effected
by these reclassifications. These reclassifications are as follows:
Shares of beneficial interest, unlimited
shares authorized $ 312,387
Accumulated net investment income (loss) 1,604
Accumulated net realized gain (loss) from
investment securities (313,991)
The tax basis components of distributable earnings as of October 31, 2003, are
as follows:
Undistributed Ordinary Income $ -
===========
Undistributed Long-term Capital Gains $ -
===========
Capital Loss Carryforward $ (329,154)
===========
Net Unrealized Appreciation (Depreciation) $ 38,588
===========
The capital loss carryforwards are available to offset future realized capital
gains through the periods listed:
Capital Loss
Carryforward Available through
- -------------- ------------------
$ 26,385 October 31, 2007
201,049 October 31, 2008
89,665 October 31, 2009
4,618 October 31, 2010
7,437 October 31, 2011
The aggregate cost of investments and composition of unrealized appreciation
(depreciation) for federal income tax purposes as of October 31, 2003, are as
follows:
Federal Tax Cost Basis $ 181,092
=========
Unrealized Appreciation $ 40,383
Unrealized (Depreciation) (1,795)
---------
Net Unrealized Appreciation (Depreciation) $ 38,588
=========
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Growth Opportunities 11
- --------------------------------------------------------------------------------
Report of Independent Certified Public Accountants
To the Board of Trustees and Shareholders of
IDEX Transamerica Growth Opportunities
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of IDEX Transamerica Growth
Opportunities (the "Fund") (one of the portfolios constituting the IDEX Mutual
Funds) at October 31, 2003, and the results of its operations, the changes in
its net assets and the financial highlights for each of the periods indicated,
in conformity with accounting principles generally accepted in the United
States of America. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of the
Fund's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with auditing standards generally accepted
in the United States of America, which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits, which included confirmation of securities at October
31, 2003 by correspondence with the custodian and brokers, provide a reasonable
basis for our opinion.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Tampa, Florida
December 18, 2003
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Growth Opportunities 12
IDEX Transamerica Money Market
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
At October 31, 2003
(all amounts in thousands)
Principal Value
- --------------------------------------------------------------------------------
SHORT-TERM U.S. GOVERNMENT OBLIGATIONS (2.0%)
Fannie Mae
1.05%, due 12/24/2003 $ 600 $ 599
1.05%, due 12/31/2003 1,300 1,298
1.07%, due 02/02/2004 1,080 1,077
1.08%, due 02/02/2004 750 748
---------
Total Short-Term U.S. Government Obligations (cost: $3,722) 3,722
---------
COMMERCIAL PAPER (90.3%)
Asset-Backed (23.7%)
Asset Securitization Cooperative
Corporation-144A
1.07%, due 11/06/2003 700 700
1.06%, due 11/14/2003 2,750 2,749
1.05%, due 12/04/2003 1,450 1,449
1.05%, due 12/12/2003 1,800 1,798
1.08%, due 01/12/2004 1,400 1,397
1.09%, due 01/13/2004 1,300 1,297
CAFCO LLC-144A
1.05%, due 11/12/2003 350 350
1.06%, due 11/12/2003 2,300 2,299
1.05%, due 11/14/2003 1,500 1,499
1.06%, due 11/18/2003 3,500 3,498
Ciesco LLC
1.06%, due 12/03/2003 1,900 1,898
Delaware Funding Corporation-144A
1.05%, due 11/14/2003 1,500 1,499
1.06%, due 11/20/2003 2,600 2,599
1.05%, due 12/01/2003 700 699
1.09%, due 01/20/2004 3,900 3,891
Harley-Davidson Customer Funding
Corp-144A
1.03%, due 11/06/2003 4,450 4,450
1.03%, due 11/21/2003 2,100 2,099
Receivables Capital Corporation-144A
1.05%, due 11/24/2003 3,000 2,998
1.05%, due 11/25/2003 3,000 2,998
1.05%, due 11/26/2003 2,800 2,797
1.07%, due 12/15/2003 750 749
Beverages (3.6%)
Coca-Cola Company (The)
1.03%, due 11/03/2003 700 700
1.02%, due 11/06/2003 1,000 1,000
1.04%, due 12/11/2003 800 799
1.05%, due 01/06/2004 1,200 1,198
Coca-Cola Enterprises Inc.
1.04%, due 11/07/2003 1,600 1,600
1.04%, due 11/19/2003 1,400 1,399
Principal Value
- --------------------------------------------------------------------------------
Business Credit Institutions (5.1%)
Caterpillar Financial Services Corporation
1.04%, due 12/26/2003 $ 900 $ 899
1.04%, due 01/05/2004 1,000 998
1.06%, due 02/02/2004 1,600 1,596
1.11%, due 03/22/2004 2,000 1,991
1.11%, due 04/05/2004 3,900 3,881
Chemicals & Allied Products (5.1%)
du Pont (E.I.) de Nemours and Company
1.04%, due 11/17/2003 1,800 1,799
1.05%, due 12/02/2003 1,920 1,918
1.05%, due 12/04/2003 600 599
1.06%, due 12/16/2003 2,200 2,197
1.04%, due 12/17/2003 1,300 1,298
1.04%, due 12/29/2003 1,700 1,697
Commercial Banks (17.7%)
Abbey National North America LLC
1.02%, due 11/05/2003 1,350 1,350
1.02%, due 11/10/2003 2,100 2,099
1.02%, due 11/20/2003 1,400 1,399
1.02%, due 11/24/2003 1,400 1,399
1.06%, due 12/05/2003 3,000 2,997
Canadian Imperial Bank of Commerce
1.06%, due 12/09/2003 1,600 1,598
1.06%, due 12/10/2003 1,600 1,598
1.06%, due 01/13/2004 330 329
Toronto Dominion Holdings (USA), Inc.
1.04%, due 11/25/2003 1,800 1,799
1.06%, due 12/08/2003 700 699
1.07%, due 12/08/2003 3,200 3,197
1.06%, due 12/22/2003 2,000 1,997
1.09%, due 01/27/2004 1,700 1,696
UBS Finance (Delaware) LLC
1.04%, due 12/11/2003 5,500 5,494
1.04%, due 12/18/2003 500 499
1.04%, due 12/23/2003 1,900 1,897
1.05%, due 01/05/2004 900 898
1.05%, due 01/20/2004 1,000 998
Wells Fargo & Company
1.05%, due 12/30/2003 800 799
Insurance Agents, Brokers & Service (4.1%)
MetLife Funding, Inc.
1.07%, due 01/14/2004 5,500 5,488
1.08%, due 02/04/2004 2,100 2,094
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Money Market 1
IDEX Transamerica Money Market
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts in thousands)
Principal Value
- --------------------------------------------------------------------------------
Life Insurance (5.0%)
AIG Funding, Inc.
1.04%, due 11/03/2003 $ 1,100 $ 1,100
1.01%, due 11/10/2003 700 700
1.02%, due 11/12/2003 1,300 1,300
1.02%, due 11/14/2003 1,200 1,200
1.05%, due 11/18/2003 1,100 1,099
1.04%, due 01/07/2004 1,000 998
1.04%, due 01/09/2004 1,400 1,397
1.05%, due 01/15/2004 1,500 1,497
Personal Credit Institutions (15.2%)
American Honda Finance Corporation
1.05%, due 11/04/2003 1,200 1,200
1.05%, due 11/17/2003 1,500 1,499
1.06%, due 01/12/2004 1,750 1,746
1.05%, due 01/13/2004 1,400 1,397
1.05%, due 01/21/2004 700 698
1.05%, due 01/22/2004 1,300 1,297
1.07%, due 01/23/2004 1,400 1,397
General Electric Capital Corporation
1.07%, due 11/07/2003 500 500
1.06%, due 12/15/2003 1,600 1,598
1.08%, due 01/07/2004 750 748
1.09%, due 01/08/2004 2,800 2,793
1.08%, due 01/09/2004 450 449
1.08%, due 01/12/2004 600 599
1.09%, due 01/13/2004 480 479
1.09%, due 01/15/2004 600 599
1.09%, due 01/21/2004 550 549
1.10%, due 01/22/2004 500 499
1.09%, due 01/28/2004 500 499
Toyota Motor Credit Corporation-144A
1.05%, due 11/06/2003 1,100 1,100
1.03%, due 11/07/2003 1,019 1,019
1.05%, due 11/21/2003 750 750
1.05%, due 12/01/2003 1,450 1,449
1.05%, due 12/02/2003 1,450 1,449
1.06%, due 12/05/2003 900 899
1.03%, due 12/09/2003 800 799
1.05%, due 12/09/2003 700 699
1.03%, due 12/15/2003 500 499
1.05%, due 12/19/2003 1,000 999
Petroleum Refining (2.4%)
ChevronTexaco Corporation
1.03%, due 11/04/2003 1,500 1,500
1.03%, due 11/05/2003 1,500 1,500
1.03%, due 01/16/2004 1,500 1,497
Principal Value
- --------------------------------------------------------------------------------
Pharmaceuticals (2.3%)
Merck & Co., Inc.
1.02%, due 11/12/2003 $ 300 $ 300
1.02%, due 11/13/2003 585 585
1.03%, due 12/03/2003 400 400
1.02%, due 12/31/2003 370 369
Pfizer Inc.-144A
1.04%, due 01/06/2004 570 569
1.05%, due 01/06/2004 2,000 1,996
Public Administration (4.8%)
Canadian Wheat Board
1.03%, due 12/09/2003 3,000 2,996
Province of Quebec
0.96%, due 12/03/2003 3,400 3,397
1.03%, due 12/03/2003 850 849
1.06%, due 01/14/2004 1,000 998
1.11%, due 03/29/2004 700 697
Security & Commodity Brokers (1.3%)
Goldman Sachs Group, Inc. (The)
0.92%, due 11/13/2003 2,500 2,499
---------
Total Commercial Paper (cost: $167,257) 167,257
---------
CERTIFICATES OF DEPOSITS (7.9%)
Canadian Imperial Bank of Commerce
1.06%, due 12/04/2003 2,300 2,300
1.05%, due 12/12/2003 1,800 1,800
1.08%, due 01/26/2004 1,800 1,800
Wells Fargo & Company
6.13%, due 11/01/2003 1,000 1,000
Wells Fargo Bank, NA
1.06%, due 11/06/2003 1,500 1,500
1.06%, due 12/09/2003 3,100 3,100
1.06%, due 12/16/2003 3,100 3,100
---------
Total Certificates of Deposits (cost: $14,600) 14,600
---------
Total Investment Securities (cost: $185,579) $ 185,579
=========
SUMMARY
Investments, at value 100.2 % $ 185,579
Liabilities in excess of other assets (0.2)% (383)
--------- ---------
Net assets 100.0 % $ 185,196
========= =========
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Money Market 2
IDEX Transamerica Money Market
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
At October 31, 2003
(all amounts except per share amounts in thousands)
Assets:
Investment securities, at value (cost: $185,579) $ 185,579
Cash 99
Receivables:
Shares of beneficial interest sold 503
Interest 52
Due from investment adviser 21
Other 7
---------
186,261
---------
Liabilities:
Accounts payable and accrued liabilities:
Shares of beneficial interest redeemed 806
Distribution fees 66
Transfer agent fees 112
Dividends to shareholders 23
Other 58
---------
1,065
---------
Net Assets $ 185,196
=========
Net Assets Consist of:
Shares of beneficial interest, unlimited shares authorized $ 185,108
Undistributed net investment income (loss) 88
---------
Net Assets $ 185,196
=========
Shares Outstanding:
Class A 109,794
Class B 54,324
Class C 12,673
Class L 3,542
Class M 4,858
Net Asset Value Per Share:
Class A $ 1.00
Class B 1.00
Class C 1.00
Class L 1.00
Class M 1.00
Maximum Offering Price Per Share (a):
Class M $ 1.01
(a) 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.
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the year ended October 31, 2003
(all amounts in thousands)
Investment Income:
Interest $ 2,768
-------
Expenses:
Management and advisory fees 889
Transfer agent fees 709
Printing and shareholder reports 93
Custody fees 29
Administration fees 31
Legal fees 15
Auditing and accounting fees 21
Trustees fees 17
Registration fees 116
Other 16
Distribution and service fees:
Class A 428
Class B 491
Class C 122
Class L 13
Class M 52
-------
Total expenses 3,042
Less:
Advisory fee waiver (869)
-------
Net expenses 2,173
-------
Net Investment Income (Loss) 595
-------
Net Increase (Decrease) in Net Assets Resulting
from Operations $ 595
=======
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Money Market 3
IDEX Transamerica Money Market
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
For the year or period ended
(all amounts in thousands)
October 31, October 31,
2003 2002 (a)
------------ -----------
Increase (Decrease) In Net Assets From:
Operations:
Net investment income (loss) $ 595 $ 661
Net realized gain (loss) from investment
securities - -
Net unrealized appreciation
(depreciation) on investment
securities - -
--------- -----------
595 661
--------- -----------
Distributions to Shareholders:
From net investment income:
Class A (478) (483)
Class B (85) (123)
Class C (21) (36)
Class L (2) -
Class M (9) (19)
--------- -----------
(595) (661)
--------- -----------
From net realized gains:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
--------- -----------
- -
--------- -----------
Capital Share Transactions:
Proceeds from shares sold:
Class A 212,939 299,057
Class B 44,548 154,591
Class C 16,782 42,694
Class L 11,745 -
Class M 8,209 23,062
--------- -----------
294,223 519,404
--------- -----------
Dividends and distributions reinvested:
Class A 485 400
Class B 86 103
Class C 22 31
Class L 2 -
Class M 12 16
--------- -----------
607 550
--------- -----------
Cost of shares redeemed:
Class A (235,579) (167,508)
Class B (71,993) (73,011)
Class C (24,270) (22,585)
Class L (8,205) -
Class M (13,220) (13,217)
--------- -----------
(353,267) (276,321)
--------- -----------
(58,437) 243,633
--------- -----------
Net increase (decrease) in net assets (58,437) 243,633
--------- -----------
Net Assets:
Beginning of year 243,633 -
--------- -----------
End of year $ 185,196 $ 243,633
========= ==========
Undistributed Net Investment Income (Loss) $ 88 $ 85
========= ===========
October 31, October 31,
2003 2002 (a)
------------ -----------
Share Activity:
Shares issued:
Class A 212,938 299,058
Class B 44,548 154,591
Class C 16,782 42,693
Class L 11,745 -
Class M 8,208 23,059
--------- ---------
294,221 519,401
--------- ---------
Shares issued-reinvested from distributions:
Class A 485 400
Class B 86 103
Class C 22 31
Class L 2 -
Class M 12 16
--------- ---------
607 550
--------- ---------
Shares redeemed:
Class A (235,579) (167,508)
Class B (71,993) (73,011)
Class C (24,270) (22,585)
Class L (8,205) -
Class M (13,220) (13,217)
--------- ---------
(353,267) (276,321)
--------- ---------
Net increase (decrease) in shares
outstanding (58,439) 243,630
========= =========
(a) Commenced operations on March 1, 2002.
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Money Market 4
IDEX Transamerica Money Market
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share of beneficial interest outstanding throughout each period
-----------------------------------------------------------------------------------------------------------
Investment Operations Distributions
------------------------------------------ -------------------------------------
Net Asset Net Asset
For the Value, Net Net Realized From Net From Net Value,
Period Beginning Investment and Unrealized Total Investment Realized Total End
Ended (c)(f) of Period Income (Loss) Gain (Loss) Operations Income Gains Distributions of Period
- ----------------------------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 $ 1.00 $ 0.004 $ - $ 0.004 $ (0.004) $ - $ (0.004) $ 1.00
10/31/2002 1.00 0.008 - 0.008 (0.008) - (0.008) 1.00
- ----------------------------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 1.00 0.001 - 0.001 (0.001) - (0.001) 1.00
10/31/2002 1.00 - - - - - - 1.00
- ----------------------------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 1.00 0.001 - 0.001 (0.001) - (0.001) 1.00
10/31/2002 1.00 - - - - - - 1.00
- ----------------------------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 1.00 0.002 - 0.002 (0.002) - (0.002) 1.00
- ----------------------------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 1.00 0.001 - 0.001 (0.001) - (0.001) 1.00
10/31/2002 1.00 - - - - - - 1.00
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
---------------------------------------------------------
Ratio of Expenses
Net Assets, to Average Net Investment
For the End of Net Assets (a) Income (Loss)
Period Total Period ----------------------- to Average
Ended (f) Return (b) (000's) Net (d) Total (e) Net Assets (a)
- --------------------------------------------------------------------------------------------------
Class A 10/31/2003 0.39% $ 109,794 0.83% 1.22% 0.42%
10/31/2002 0.56 131,949 0.83 1.36 0.93
- --------------------------------------------------------------------------------------------------
Class B 10/31/2003 0.12 54,324 1.16 1.55 0.08
10/31/2002 0.28 81,683 1.48 2.01 0.28
- --------------------------------------------------------------------------------------------------
Class C 10/31/2003 0.12 12,673 1.17 1.56 0.08
10/31/2002 0.28 20,139 1.48 2.01 0.28
- --------------------------------------------------------------------------------------------------
Class L 10/31/2003 0.12 3,542 1.04 1.43 0.21
- --------------------------------------------------------------------------------------------------
Class M 10/31/2003 0.12 4,863 1.15 1.55 0.09
10/31/2002 0.30 9,862 1.38 1.91 0.38
- --------------------------------------------------------------------------------------------------
NOTES TO FINANCIAL HIGHLIGHTS
(a) Annualized.
(b) 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 are not annualized.
(c) Per share information is calculated based on average number of shares
outstanding.
(d) Ratio of Net Expenses to Average Net Assets is net of fee waivers and
reimbursements by the investment adviser, if any (see note 2).
(e) Ratio of Total Expenses to Average Net Assets includes all expenses before
fee waivers and reimbursements by the investment adviser.
(f) IDEX Transamerica Money Market ("the Fund") commenced operations on March
1, 2002. The inception date for the Fund's offering of share Class L was
November 11, 2002.
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Money Market 5
IDEX Transamerica Money Market
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
At October 31, 2003
(all amounts in thousands)
NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
IDEX Mutual Funds is a Massachusetts business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company. IDEX Transamerica Money Market ("the Fund"),
part of IDEX Mutual Funds, began operations on March 1, 2002.
In the normal course of business, the Fund enters into contracts that contain a
variety of representations and warranties which provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown, as this would involve future claims that may be made against the Fund
and/or its affiliates that have not yet occurred. However, based on experience,
the Fund expects the risk of loss to be remote.
See the Prospectus and Statement of Additional Information for a description of
the Fund's investment objective.
In preparing the Fund's financial statements in accordance with accounting
principles generally accepted in the United States of America ("GAAP"),
estimates or assumptions (which could differ from actual results) may be used
that affect reported amounts and disclosures. The following policies were
consistently followed by the Fund, in accordance with GAAP.
Multiple class operations and expenses: The Fund currently offers five classes
of shares, each with a public offering price that reflects different sales
charges, if any, and expense levels. Effective November 11, 2002, Class C and M
shares were closed to new investors. Income, non-class specific expenses and
realized and unrealized gains and losses, are allocated daily to each class,
based upon the value of shares outstanding method as permitted under Rule 18f-3
of the 1940 Act. Each class bears its own specific expenses as well as a
portion of general, common expenses.
Security valuations: As permitted under Rule 2a-7 of the 1940 Act, the
securities held by the Fund are valued on the basis of amortized cost, which
approximates market value. With respect to securities traded on the NASDAQ
INMS, such closing price may be the last reported sales price or the NASDAQ
Official Closing Price.
Cash: The Fund may leave cash overnight in its cash account with the custodian,
Investors Bank & Trust Company ("IBT"). IBT has been contracted on behalf of
the Fund to invest the excess cash into a savings account, which at October 31,
2003, was paying an interest rate of 0.75%.
Security transactions and investment income: Security transactions are recorded
on the trade date. Security gains and losses are calculated on the specific
identification basis. Interest income, including accretion of discounts and
amortization of premiums, is recorded on the accrual basis commencing on the
settlement date.
Dividend distributions: Distributions to shareholders are declared daily and
paid monthly and are determined in accordance with Federal income tax
regulations which may differ from GAAP.
NOTE 2. RELATED PARTY TRANSACTIONS
AEGON/Transamerica Fund Advisers, Inc. ("ATFA") is the Fund's investment
adviser. AEGON/Transamerica Fund Services, Inc. ("ATFS") is the Fund's
administrator. AFSG Securities Corp. ("AFSG") is the Fund's
distributor/ principal underwriter. AEGON/Transamerica Investor Services, Inc.
("ATIS") is the 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. AUSA and WRL are wholly owned indirect
subsidiaries of AEGON NV, a Netherlands corporation.
Transamerica Investment Management, LLC is both an affiliate of the Fund and a
sub-adviser to the Fund.
Investment advisory fees: The Fund pays management fees to ATFA based on
average daily net assets ("ANA") at the following rate:
0.40% of ANA
ATFA currently voluntarily waives its advisory fee and will reimburse the Fund
to the extent that operating expenses, excluding 12b-1 fees, exceed the
following stated annual limit:
0.48% Expense Limit
If total fund expenses fall below the annual expense limitations agreed to by
the adviser within the succeeding three years, the Fund may be required to pay
the advisor a portion or all of the waived advisory fees.
Advisory Fee Available for
Waived Recapture Through
-------------- ------------------
Fiscal Year 2003 $ 869 10/31/2006
Fiscal Year 2002 543 10/31/2005
Distribution and service fees: The Fund has a 12b-1 distribution plan under the
1940 Act pursuant to which an annual fee, based on average daily net assets, is
paid to the distributor for various disbursements such as broker-dealer account
servicing fees and other promotional expenses of the Fund. The 12b-1 fee for
the Fund is comprised of a 0.25% service fee and the remaining amount is an
asset-based sales charge/distribution fee. The Fund is authorized under the
12b-1 plan to pay fees on each class up to the following limits:
Class A 0.35%
Class B 1.00%
Class C 1.00%
Class L 1.00%
Class M 0.90%
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Money Market 6
IDEX Transamerica Money Market
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 2-(continued)
In order to maintain a positive yield to shareholders, the Fund has waived a
portion of the 12b-1 fees for all classes except Class A. The amount waived for
the year ended October 31, 2003, was $311. These waivers are not subject to the
expense recapture agreement. The waivers reduced the ratio of net expenses to
average net assets by 0.32% for Class B, 0.31% for Class C, 0.44% for Class L
and 0.23% for Class M.
Underwriter commissions relate to front-end sales charges imposed for Class A
and M shares and contingent deferred sales charges from Classes B, L, M and
certain A share redemptions. For the year ended October 31, 2003, the
underwriter commissions were as follows:
Received by Underwriter $ 22
Retained by Underwriter (3)
Contingent Sales Charges 943
Administrative services: The Fund has entered into an agreement with ATFS for
financial and legal fund administration services, which include such items as
compliance, expenses, financial statements and other reporting, distributions,
tax returns, prospectus preparation, board of trustees meeting support and
other legal matters. Transfer agent fees are reflected separately from
Administration fees on the Statement of Operations. The Legal fees on the
Statement of Operations are for fees paid to external legal counsel. ATFS
provides its services to the Fund at cost and is reimbursed monthly.
Transfer agent fees: The Fund incurs ATIS annual per-account charges (not in
thousands) of $20.00 for each open shareholder account and $1.63 for each
closed account maintained, and certain out of pocket expenses.
Deferred compensation plan: Each eligible Fund Trustee may elect participation
in the Deferred Compensation Plan ("the Plan"). Under the Plan, such Trustees
may defer payment of a percentage of their total fees earned as a Fund Trustee.
These deferred amounts may be invested in any IDEX Fund. At October 31, 2003,
the value of invested plan amounts was $6. Invested plan amounts and the total
liability for deferred compensation to the Trustees under the Plan at October
31, 2003, are included in Net assets in the accompanying Statement of Assets
and Liabilities.
NOTE 3. FEDERAL INCOME TAX MATTERS
The Fund has not made any provision for federal income or excise taxes due to
its policy to distribute all of its taxable income and capital gains to its
shareholders and otherwise qualify as a regulated investment company under the
Internal Revenue Code. Income and capital gain distributions are determined in
accordance with income tax regulations, which may differ from GAAP. These
differences are primarily due to differing treatments for items including, but
not limited to, excise taxes, distribution and service fee expenses.
Reclassifications between Undistributed net investment income (loss),
Undistributed net realized capital gains (loss) and Shares of beneficial
interest are made to reflect income and gains available for distribution under
federal tax regulations. Results of operations and net assets are not effected
by these reclassifications. These reclassifications are as follows:
Shares of beneficial interest, unlimited
shares authorized $ (3)
Undistributed net investment income (loss) 3
The tax character of distributions paid may differ from the character of
distributions shown in the Statements of Changes in Net Assets
primarily due to short-term gains being treated as ordinary income for tax
purposes. The tax character of distributions paid during 2002 and 2003 was as
follows:
2002 Distributions paid from:
Ordinary income $ 662
Long-term capital gains -
2003 Distributions paid from:
Ordinary income $ 595
Long-term capital gains -
The tax basis components of distributable earnings as of October 31, 2003, are
as follows:
Undistributed Ordinary Income $ 88
====
Undistributed Long-term Capital Gains $ -
====
Capital Loss Carryforward $ -
====
Net Unrealized Appreciation (Depreciation) $ -
====
The aggregate cost of investments and composition of unrealized appreciation
(depreciation) for federal income tax purposes as of October 31, 2003, are as
follows:
Federal Tax Cost Basis $ 185,579
=========
Unrealized Appreciation $ -
Unrealized (Depreciation) -
---------
Net Unrealized Appreciation (Depreciation) $ -
=========
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Money Market 7
- --------------------------------------------------------------------------------
Report of Independent Certified Public Accountants
To the Board of Trustees and Shareholders of
IDEX Transamerica Money Market
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of IDEX Transamerica Money Market
(the "Fund") (one of the portfolios constituting the IDEX Mutual Funds) at
October 31, 2003, and the results of its operations, the changes in its net
assets and the financial highlights for each of the periods indicated, in
conformity with accounting principles generally accepted in the United States
of America. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Fund's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with auditing standards generally accepted in the
United States of America, which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits, which included confirmation of securities at October 31, 2003 by
correspondence with the custodian and brokers, provide a reasonable basis for
our opinion.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Tampa, Florida
December 18, 2003
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Money Market 8
IDEX Transamerica Value Balanced
- --------------------------------------------------------------------------------
MARKET ENVIRONMENT
The twelve months ended October 31, 2003, were a positive, if uneven period for
U.S. securities markets. On the equity side, stocks staged short-lived rallies
and retreats before turning decidedly negative in January, when it became
increasingly obvious that the U.S. would go to war with Iraq. That, combined
with conflicting economic data, put a damper on investor expectations. Once
military operations began in March, investors anticipated a more robust
economy, and the stock market began a long advance that brought the Russell
1000 Value Index to a 12-month total return of 22.87%. The market favored
economically sensitive sectors; various equipment manufacturing and technology-
or Internet-related sectors posted the largest gains.
Fixed-income markets performed exceptionally well in the first half of the
period and lagged in the second half, in response to economic data suggesting
that interest rates may rise.
PERFORMANCE
For the year ended October 31, 2003, IDEX Transamerica Value Balanced returned
21.04%. By comparison its primary benchmark, the Lehman Brothers Intermediate
U.S. Government/Credit Index, returned 5.43% and its secondary benchmark, the
Russell 1000 Value Index, returned 22.87%.
STRATEGY REVIEW
Throughout the period, we maintained a neutral asset allocation of
approximately 60% equities and 40% bonds. Within the equity portfolio, we
weighted our investments toward noncyclical industries. Given this, we should
have underperformed the equity market. Instead, our patience with temporarily
undervalued companies that have strong franchises, decent balance sheets, and
above-average dividend yields paid off handsomely. FleetBoston Financial
Corporation, a core financial holding, rebounded once investors realized that
its foreign loan portfolio would not be decimated by Latin America's economic
malaise. Shares of another bank holding, Washington Mutual, Inc., increased
sharply, reflecting the company's well-executed retail-oriented business plan.
Likewise, our perseverance with telecommunications company Sprint Corporation
(FON Group) ("Sprint") was rewarded. Sprint was punished by the misdeed of
others and has at times been our worst-performing stock. We are committed to it
nonetheless. At the heart of an increasingly important industry, Sprint is
making good choices to "right the ship" and paying an attractive dividend in
the process.
Unfortunately, our patience with pharmaceuticals Schering-Plough Corporation
and Merck & Co., Inc. has not as yet proven productive. In hindsight, we may
have purchased these too early, but we remain convinced that they are capable
of successfully bringing new products to market. We will give them more time.
The portfolio's fixed-income component maintained a slightly above-average
duration in the first half of the period, when interest rates were declining
and bond prices rising. During the latter six months, we moved to a
below-average duration, positioning the portfolio for economic growth and the
higher interest rates that may follow. Throughout the period, we overweighted
corporate bonds and, within that sector, emphasized industries with improving
credit profiles and superior potential for capital appreciation (e.g., media,
utilities and telecommunications). This approach worked well; corporate bonds
outperformed Treasuries, and our chosen industries outpaced the corporate
sector in general. Of late, we have taken profits in telecommunications and
made new investments in paper, forest products, metals and mining companies.
/s/ John C. Riazzi
John C. Riazzi
/s/ Gary U. Rolle
Gary U. Rolle
Co-Fund Managers
Transamerica Investment Management, LLC
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Value Balanced 1
IDEX Transamerica Value Balanced
- --------------------------------------------------------------------------------
Comparison of change in value of $10,000 investment in Class A shares and its
comparative index.
[The following data was represented as a line chart in the printed material.]
Growth of $10,000
Inception of 10/31/95 through 10/31/03
Investment less sales charges - $9,452
DATE Class A LBIGC Russell 1000 Value
- ------------ ----------- ---------- --------------------
10/1/1995 9,452 10,000 10,000
12/31/1995 9,811 10,352 10,664
3/31/1996 10,190 10,265 11,267
6/30/1996 10,227 10,330 11,461
9/30/1996 10,441 10,513 11,795
12/31/1996 11,046 10,771 12,971
3/31/1997 11,026 10,758 13,304
6/30/1997 11,999 11,075 15,265
9/30/1997 12,860 11,375 16,785
12/31/1997 12,909 11,618 17,535
3/31/1998 13,899 11,799 19,579
6/30/1998 13,724 12,021 19,667
9/30/1998 12,856 12,561 17,389
12/31/1998 13,764 12,598 20,276
3/31/1999 13,521 12,574 20,566
6/30/1999 13,880 12,525 22,886
9/30/1999 12,718 12,640 20,644
12/31/1999 12,796 12,647 21,766
3/31/2000 13,197 12,837 21,869
6/30/2000 12,940 13,054 20,845
9/30/2000 13,896 13,430 22,484
12/31/2000 14,799 13,926 23,292
3/31/2001 14,867 14,398 21,929
6/30/2001 15,454 14,495 22,999
9/30/2001 14,246 15,162 20,480
12/31/2001 15,048 15,175 21,990
3/31/2002 14,833 15,141 22,890
6/30/2002 13,358 15,679 20,940
9/30/2002 11,585 16,390 17,009
12/31/2002 12,907 16,667 18,577
3/31/2003 12,631 16,918 17,673
6/30/2003 14,261 17,379 20,726
9/30/2003 14,389 17,375 21,154
10/31/2003 15,097 17,211 22,447
Average Annual Total Return for Periods Ended 10/31/03
- --------------------------------------------------------------------------------
From Inception
1 year 5 years Inception Date
- --------------------------------------------------------------------------------
Class A (NAV) 21.04% 1.98% 5.96% 10/1/95
Class A (POP) 14.38% 0.83% 5.22% 10/1/95
Russell 1000 Value(1) 22.87% 3.68% 10.52% 10/1/95
LBIGC(1) 5.43% 6.52% 6.94% 10/1/95
- --------------------------------------------------------------------------------
Class B (NAV) 19.98% 1.30% 5.27% 10/1/95
Class B (POP) 14.98% 1.11% 5.27% 10/1/95
- --------------------------------------------------------------------------------
Class C (NAV) 19.98% - 2.76% 11/1/99
- --------------------------------------------------------------------------------
Class L (NAV) - - 19.73% 11/11/02
Class L (POP) - - 17.73% 11/11/02
- --------------------------------------------------------------------------------
Class M (NAV) 20.20% 1.41% 5.38% 10/1/95
Class M (POP) 17.99% 1.21% 5.25% 10/1/95
- --------------------------------------------------------------------------------
NOTES
(1) The Russell 1000 Value (Russell 1000) Index and Lehman Brothers
Intermediate U.S. Government/Credit (LBIGC) Index are unmanaged indices
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 Micropal(R)(C) 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 shares, (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.
Periods less than 1 year represent total return and are not annualized.
This material must be preceded or accompanied by a current prospectus, which
includes specific contents regarding the investment objectives and policies of
this fund.
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Value Balanced 2
IDEX Transamerica Value Balanced
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
At October 31, 2003
(all amounts except share amounts in thousands)
Principal Value
- ----------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS (6.4%)
U.S. Treasury Bond (d)
3.63%, due 03/31/2004 $ 1,250 $ 1,263
5.38%, due 02/15/2031 (b) 595 615
U.S. Treasury Note (b)(d)
3.63%, due 05/15/2013 255 244
--------
Total U.S. Government Obligations (cost: $2,137) 2,122
--------
U.S. GOVERNMENT AGENCY OBLIGATIONS (8.7%)
Fannie Mae-Conventional Pool
5.00%, due 05/01/2018 221 225
5.00%, due 06/01/2018 219 222
6.00%, due 11/01/2032 361 370
6.00%, due 01/01/2033 94 96
6.00%, due 02/01/2033 190 195
6.00%, due 05/01/2033 361 371
Fannie Mae-Gold Pool
5.00%, due 04/01/2018 391 397
Freddie Mac-Gold Pool
7.00%, due 10/01/2028 230 242
6.50%, due 04/01/2029 232 242
6.00%, due 09/01/2033 247 253
Ginnie Mae-FHA/VA Pool
6.50%, due 10/15/2027 260 273
--------
Total U.S. Government Agency Obligations (cost: $2,887) 2,886
--------
CORPORATE DEBT SECURITIES (14.7%)
Amusement & Recreation Services (0.8%)
Disney (Walt) Company (The)
4.88%, due 07/02/2004 250 255
Beverages (0.1%)
Cia Brasileira de Bebidas-144A
8.75%, due 09/15/2013 25 26
Business Credit Institutions (1.7%)
Deere (John) Capital Corporation
3.90%, due 01/15/2008 250 253
eircom Funding-144A (b)
8.25%, due 08/15/2013 50 54
Ford Motor Credit Company
6.70%, due 07/16/2004 250 257
Chemicals & Allied Products (0.9%)
Dow Chemical Company (The)
5.25%, due 05/14/2004 250 254
Nalco Company-144A
7.75%, due 11/15/2011 50 52
Commercial Banks (1.9%)
Abbey National PLC (h)
7.35%, due 10/29/2049 250 277
CS First Boston-144A (g)
7.90%, due 05/01/2007 125 140
Principal Value
- ----------------------------------------------------------------------------------
Commercial Banks (continued)
Korea Development Bank (The)
5.50%, due 11/13/2012 $ 250 $ 257
Communication (0.8%)
Echostar DBS Corporation-144A
5.75%, due 10/01/2008 75 75
Liberty Media Corporation
5.70%, due 05/15/2013 200 196
Computer & Office Equipment (0.8%)
Hewlett-Packard Company
5.50%, due 07/01/2007 250 269
Electric Services (0.4%)
TXU Energy Company LLC-144A
7.00%, due 03/15/2013 125 137
Electric, Gas & Sanitary Services (0.2%)
PG&E Corporation-144A
6.88%, due 07/15/2008 50 53
Health Services (0.3%)
HCA Inc.
7.13%, due 06/01/2006 100 107
Holding & Other Investment Offices (0.9%)
EOP Operating Limited Partnership
8.38%, due 03/15/2006 250 281
Hotels & Other Lodging Places (0.2%)
Park Place Entertainment Corporation
7.00%, due 04/15/2013 75 78
Insurance (0.8%)
St. Paul Companies, Inc. (The)
5.75%, due 03/15/2007 250 267
Insurance Agents, Brokers & Service (0.4%)
Hartford Financial Services Group, Inc.
(The)-144A
4.63%, due 07/15/2013 125 119
Metal Mining (0.4%)
Placer Dome, Inc.-144A
6.45%, due 10/15/2035 140 141
Motion Pictures (1.1%)
News Corporation Limited (The)
7.75%, due 12/01/2045 175 201
Time Warner Inc.
9.13%, due 01/15/2013 125 156
Paperboard Containers & Boxes (0.2%)
Norampac Inc.-144A
6.75%, due 06/01/2013 50 52
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Value Balanced 3
IDEX Transamerica Value Balanced
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Principal Value
- -------------------------------------------------------------------
Personal Credit Institutions (0.8%)
Capital One Bank
6.88%, due 02/01/2006 $ 125 $ 136
General Motors Acceptance Corporation
6.75%, due 01/15/2006 125 133
Primary Metal Industries (0.8%)
Phelps Dodge Corporation
8.75%, due 06/01/2011 225 268
Radio & Television Broadcasting (0.2%)
USA Interactive
7.00%, due 01/15/2013 50 55
Security & Commodity Brokers (0.4%)
Goldman Sachs Group, Inc. (The)
5.25%, due 10/15/2013 125 125
Telecommunications (0.6%)
Cincinnati Bell Inc.-144A
8.38%, due 01/15/2014 50 51
Sprint Capital Corporation-144A
8.75%, due 03/15/2032 125 142
--------
Total Corporate Debt Securities (cost: $4,731) 4,867
--------
Shares Value
- --------------------------------------------------------------------------------
COMMON STOCKS (57.5%)
Air Transportation (1.0%)
FedEx Corporation (d) 4,500 $ 341
Amusement & Recreation Services (3.6%)
Disney (Walt) Company (The) (d) 52,200 1,182
Chemicals & Allied Products (1.8%)
du Pont (E.I.) de Nemours and Company 15,000 606
Commercial Banks (10.2%)
Bank of America Corporation (d) 5,400 409
FleetBoston Financial Corporation (d) 61,010 2,464
Wachovia Corporation (d) 11,000 505
Communication (2.3%)
Cox Communications, Inc.-Class A (a) 22,300 760
Computer & Data Processing Services (0.3%)
Microsoft Corporation 4,000 105
Drug Stores & Proprietary Stores (0.2%)
Medco Health Solutions, Inc. (a) 2,170 72
Electronic & Other Electric Equipment (1.0%)
Cooper Industries, Inc.-Class A 6,000 317
Electronic Components & Accessories (2.8%)
Intel Corporation (d) 28,000 925
Food & Kindred Products (2.2%)
Altria Group, Inc. (b) 12,000 558
Sara Lee Corporation 8,300 165
Shares Value
- --------------------------------------------------------------------------------
Insurance (1.2%)
St. Paul Companies, Inc. (The) (b)(d) 10,000 $ 381
Life Insurance (1.2%)
John Hancock Financial Services, Inc. (b)(d) 11,000 389
Lumber & Wood Products (1.6%)
Louisiana-Pacific Corporation (a) 27,000 514
Motion Pictures (0.3%)
Time Warner Inc. (a) 6,000 92
Oil & Gas Extraction (0.4%)
Schlumberger Limited 3,000 141
Petroleum Refining (0.9%)
ChevronTexaco Corporation 2,000 149
Exxon Mobil Corporation 4,200 154
Pharmaceuticals (6.7%)
Bristol-Myers Squibb Co. 34,450 874
Merck & Co., Inc. (d) 18,500 819
Schering-Plough Corporation 33,580 513
Savings Institutions (6.1%)
Washington Mutual, Inc. (d) 46,400 2,030
Security & Commodity Brokers (4.1%)
Alliance Capital Management
Holding L.P. (d) 2,800 94
Jefferies Group, Inc. (d) 10,000 310
Raymond James Financial, Inc. (d) 11,000 449
T. Rowe Price Group, Inc. (b)(d) 12,000 494
Telecommunications (6.0%)
ALLTEL Corporation 8,000 378
Sprint Corporation (FON Group) 91,100 1,458
Verizon Communications, Inc. 4,000 134
U.S. Government Agencies (3.6%)
Fannie Mae 16,500 1,183
--------
Total Common Stocks (cost: $17,980) 18,965
--------
Principal Value
- --------------------------------------------------------------------------------
SECURITY LENDING COLLATERAL (8.4%)
Debt (7.4%)
Bank Notes (0.9%)
Canadian Imperial Bank of Commerce
1.12%, due 11/04/2003 $ 120 $ 120
Fleet National Bank
1.06%, due 01/21/2004 169 169
Euro Dollar Terms (4.2%)
Bank of Montreal
1.03%, due 11/13/2003 96 96
1.04%, due 11/14/2003 85 85
Bank of Nova Scotia (The)
1.06%, due 11/12/2003 48 48
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Value Balanced 4
IDEX Transamerica Value Balanced
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Principal Value
- --------------------------------------------------------------------------------
Euro Dollar Terms (continued)
Bank of Scotland
1.04%, due 11/14/2003 $ 96 $ 96
Citigroup Inc.
1.08%, due 01/05/2004 145 145
Credit Agricole Indosuez
1.08%, due 01/06/2004 106 106
Den Danske Bank
1.04%, due 11/10/2003 48 48
1.08%, due 01/20/2004 145 145
Royal Bank of Canada
1.04%, due 11/24/2003 120 120
1.06%, due 12/08/2003 48 48
Royal Bank of Scotland Group PLC (The)
1.08%, due 01/15/2004 145 145
SouthTrust Bank
1.08%, due 01/16/2004 145 145
Wells Fargo & Company
1.04%, due 11/20/2003 145 145
Promissory Notes (0.5%)
Goldman Sachs Group, Inc. (The)
1.15%, due 11/03/2003 169 169
Repurchase Agreements (1.8%) (c)
Goldman Sachs Group, Inc. (The)
1.10% Repurchase Agreement
dated 10/31/2003 to be repurchased
at $48 on 11/03/2003 48 48
Merrill Lynch & Co., Inc.
1.10% Repurchase Agreement
dated 10/31/2003 to be repurchased
at $553 on 11/03/2003 553 553
Shares Value
- --------------------------------------------------------------------------------
Investment Companies (1.0%)
Money Market Funds (1.0%)
Merrimac Cash Series Fund-
Premium Class
1-day yield of 0.97% 337,229 $ 337
--------
Total Security Lending Collateral (cost: $2,768) 2,768
--------
Total Investment Securities (cost: $30,503) $ 31,608
========
Contracts (f) Value
- --------------------------------------------------------------------------------
WRITTEN OPTIONS (-1.9%)
Covered Call Options (-0.7%)
Alliance Capital Management Holding L.P.
Call Strike $40.00,
Expires 04/17/2004 28 $ (1)
Bank of America Corporation
Call Strike $75.00,
Expires 11/22/2003 15 (2)
Contracts (f) Value
- --------------------------------------------------------------------------------
Covered Call Options (continued)
Disney (Walt) Company (The)
Call Strike $25.00,
Expires 01/17/2004 72 $ (2)
FedEx Corporation
Call Strike $60.00,
Expires 01/17/2004 35 (55)
FleetBoston Financial Corporation
Call Strike $45.00,
Expires 01/22/2005 610 (107)
Intel Corporation
Call Strike $30.00,
Expires 01/17/2004 50 (19)
Jefferies Group, Inc.
Call Strike $35.00,
Expires 04/17/2004 50 (6)
John Hancock Financial Services, Inc.
Call Strike $40.00,
Expires 01/17/2004 50 (1)
Merck & Co., Inc.
Call Strike $75.00,
Expires 01/17/2004 50 (e)
Raymond James Financial, Inc.
Call Strike $40.00,
Expires 02/21/2004 10 (3)
Raymond James Financial, Inc.
Call Strike $40.00,
Expires 05/22/2004 10 (4)
St. Paul Companies, Inc. (The)
Call Strike $40.00,
Expires 04/17/2004 20 (3)
T. Rowe Price Group, Inc.
Call Strike $40.00,
Expires 01/17/2004 40 (11)
Wachovia Corporation
Call Strike $45.00,
Expires 01/17/2004 30 (6)
Washington Mutual, Inc.
Call Strike $45.00,
Expires 01/17/2004 100 (12)
Put Options (-1.2%)
ALLTEL Corporation
Put Strike $40.00,
Expires 01/17/2004 100 (3)
Altria Group, Inc.
Put Strike $30.00,
Expires 01/22/2005. 100 (15)
Altria Group, Inc.
Put Strike $40.00,
Expires 03/20/2004 25 (3)
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Value Balanced 5
IDEX Transamerica Value Balanced
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Contracts (f) Value
- --------------------------------------------------------------------------------
Put Options (continued)
Bank of America Corporation
Put Strike $65.00,
Expires 05/22/2004 130 $ (16)
Bank of America Corporation
Put Strike $65.00,
Expires 01/22/2005 20 (7)
ChevronTexaco Corporation
Put Strike $60.00,
Expires 01/22/2005 20 (4)
Disney (Walt) Company (The)
Put Strike $15.00,
Expires 01/17/2004 150 (1)
Dominion Resources, Inc.
Put Strike $50.00,
Expires 01/22/2005 80 (14)
du Pont (E.I.) de Nemours and Company
Put Strike $35.00,
Expires 01/22/2005 20 (5)
Duke Energy Corporation
Put Strike $12.50,
Expires 01/17/2004 250 (3)
Duke Energy Corporation
Put Strike $15.00,
Expires 01/21/2006 20 (4)
Exxon Mobil Corporation
Put Strike $35.00,
Expires 04/17/2004 40 (5)
Fannie Mae
Put Strike $70.00,
Expires 01/17/2004 50 (15)
Fannie Mae
Put Strike $60.00,
Expires 01/22/2005 35 (15)
FleetBoston Financial Corporation
Put Strike $20.00,
Expires 01/17/2004 120 (1)
Heinz (H.J.) Company
Put Strike $40.00,
Expires 01/17/2004 120 (17)
Kimberly-Clark Corporation
Put Strike $45.00,
Expires 01/22/2005 90 (15)
Merck & Co., Inc.
Put Strike $40.00,
Expires 04/17/2004 30 (4)
Merck & Co., Inc.
Put Strike $45.00,
Expires 04/17/2004 70 (24)
Contracts (f) Value
- --------------------------------------------------------------------------------
Put Options (continued)
Microsoft Corporation
Put Strike $15.00,
Expires 01/22/2005 100 $ (2)
Microsoft Corporation
Put Strike $22.50,
Expires 01/17/2004 200 (5)
Microsoft Corporation
Put Strike $25.00,
Expires 04/17/2004 110 (14)
Plum Creek Timber Company, Inc.
Put Strike $22.50,
Expires 05/22/2004 200 (11)
Sara Lee Corporation
Put Strike $15.00,
Expires 01/22/2005 140 (8)
Schering-Plough Corporation
Put Strike $20.00,
Expires 01/17/2004 100 (48)
Schlumberger Limited
Put Strike $40.00,
Expires 01/17/2004 89 (4)
Schlumberger Limited
Put Strike $45.00,
Expires 02/21/2004 100 (20)
Sprint Corporation (FON Group)
Put Strike $15.00,
Expires 01/17/2004 170 (10)
Time Warner Inc.
Put Strike $10.00,
Expires 01/17/2004 200 (1)
Time Warner Inc.
Put Strike $12.50,
Expires 01/22/2005 100 (9)
Time Warner Inc.
Put Strike $14.00,
Expires 04/17/2004 100 (7)
Time Warner Inc.
Put Strike $7.50,
Expires 01/17/2004 280 (1)
Union Pacific Corporation
Put Strike $60.00,
Expires 02/21/2004 87 (13)
Verizon Communications, Inc.
Put Strike $40.00,
Expires 01/17/2004 100 (68)
Wilmington Trust Corporation
Put Strike $30.00,
Expires 05/22/2004 180 (10)
----------
Total Written Options (premium: $886) $ (634)
==========
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Value Balanced 6
IDEX Transamerica Value Balanced
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Value
- -----------------------------------------------------------------------
SUMMARY:
Investments, at value 95.7 % $ 31,608
Written options (1.9)% (634)
Other assets in excess of liabilities 6.2 % 2,044
--------- --------
Net assets 100.0 % $ 33,018
========= ========
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 (see Note
1). The value at October 31, 2003, of all securities on loan is $2,690.
(c) Cash collateral for the Repurchase Agreements, valued at $614, 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.
(d) At October 31, 2003, all or a portion of this security is segregated with
the custodian to cover margin requirements for open option contracts. The
value of all securities segregated at October 31, 2003, is $11,711. In
addition, cash in the amount of $2,849 was segregated at October 31, 2003.
(e) Value is less than $1.
(f) Contract Amounts are not in thousands.
(g) Securities are stepbonds. CS First Boston-144A has a coupon rate of 7.90%
until 05/01/2007, thereafter the coupon rate will reset every 5 years at
the 5-year current month treasury rate + 200BP if not called.
(h) Securities are stepbonds. Abbey National PLC has a coupon rate of 7.35%
until 10/25/2006, thereafter, the coupon rate will reset every 5 years at
the 5-year current month treasury rate + 178BP, if not called.
DEFINITIONS:
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 financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Value Balanced 7
IDEX Transamerica Value Balanced
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
At October 31, 2003
(all amounts except per share amounts in thousands)
Assets:
Investment securities, at value (cost: $30,503)
(including $2,690 of securities loaned) $ 31,608
Cash 4,898
Receivables:
Shares of beneficial interest sold 132
Interest 110
Dividends 41
Due from investment adviser 11
Other 8
--------
36,808
--------
Liabilities:
Investment securities purchased 244
Accounts payable and accrued liabilities:
Shares of beneficial interest redeemed 62
Distribution fees 20
Transfer agent fees 23
Payable for securities on loan 2,768
Written options (premium: $886) 634
Other 39
--------
3,790
--------
Net Assets $ 33,018
========
Net Assets Consist of:
Shares of beneficial interest, unlimited shares authorized $ 36,515
Undistributed net investment income (loss) 16
Accumulated net realized gain (loss) from investment
securities and option contracts (4,869)
Net unrealized appreciation (depreciation) on:
Investment securities 1,104
Written option contracts 252
--------
Net Assets $ 33,018
========
Shares Outstanding:
Class A 1,030
Class B 1,199
Class C 318
Class L 46
Class M 285
Net Asset Value Per Share:
Class A $ 11.49
Class B 11.46
Class C 11.46
Class L 11.46
Class M 11.47
Maximum Offering Price Per Share (a):
Class A $ 12.16
Class M 11.59
(a) 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.
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the year ended October 31, 2003
(all amounts in thousands)
Investment Income:
Interest $ 471
Dividends 508
Income from loaned securities-net 5
-------
984
-------
Expenses:
Management and advisory fees 223
Transfer agent fees 152
Printing and shareholder reports 22
Custody fees 19
Administration fees 39
Legal fees 2
Auditing and accounting fees 20
Trustees fees 2
Registration fees 71
Other 3
Distribution and service fees:
Class A 38
Class B 120
Class C 36
Class L 2
Class M 28
-------
Total expenses 777
Less:
Advisory fee waiver (195)
-------
Net expenses 582
-------
Net Investment Income (Loss) 402
-------
Net Realized Gain (Loss) from:
Investment securities (146)
Written option contracts 326
-------
180
-------
Net Increase (Decrease) Unrealized Appreciation
(Depreciation) on:
Investment securities 4,286
Written option contracts 682
-------
4,968
-------
Net Gain (Loss) on Investment Securities and Written
Option Contracts 5,148
-------
Net Increase (Decrease) in Net Assets Resulting from
Operations $ 5,550
=======
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Value Balanced 8
IDEX Transamerica Value Balanced
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended
(all amounts in thousands)
October 31, October 31,
2003 2002
----------- ------------
Increase (Decrease) In Net Assets From:
Operations:
Net investment income (loss) $ 402 $ 408
Net realized gain (loss) from investment
securities and written option
contracts 180 (5,021)
Net unrealized appreciation
(depreciation) on investment
securities and written option
contracts 4,968 (1,005)
-------- ---------
5,550 (5,618)
-------- ---------
Distributions to Shareholders:
From net investment income:
Class A (220) (192)
Class B (167) (118)
Class C (52) (37)
Class L (1) -
Class M (46) (35)
--------- ---------
(486) (382)
--------- ---------
From net realized gains:
Class A - (425)
Class B - (495)
Class C - (123)
Class L - -
Class M - (147)
--------- ---------
- (1,190)
--------- ---------
Capital Share Transactions:
Proceeds from shares sold:
Class A 3,070 3,760
Class B 3,185 3,507
Class C 582 3,421
Class L 500 -
Class M 679 462
--------- ---------
8,016 11,150
--------- ---------
Dividends and distributions reinvested:
Class A 210 592
Class B 161 599
Class C 51 155
Class L 1 -
Class M 46 177
--------- ---------
469 1,523
--------- ---------
Cost of shares redeemed:
Class A (4,327) (4,700)
Class B (3,669) (5,294)
Class C (1,592) (2,194)
Class L (15) -
Class M (1,035) (1,733)
--------- ---------
(10,638) (13,921)
--------- ---------
(2,153) (1,248)
--------- ---------
Net increase (decrease) in net assets 2,911 (8,438)
--------- ---------
Net Assets:
Beginning of year 30,107 38,545
--------- ---------
End of year $ 33,018 $ 30,107
========= =========
Undistributed Net Investment Income (Loss) $ 16 $ 71
========= =========
October 31, October 31,
2003 2002
----------- ------------
Share Activity:
Shares issued:
Class A 289 339
Class B 298 311
Class C 56 302
Class L 48 -
Class M 65 42
------- -------
756 994
------- -------
Shares issued-reinvested from distributions:
Class A 21 52
Class B 16 52
Class C 5 14
Class L - -
Class M 5 15
------- -------
47 133
------- -------
Shares redeemed:
Class A (417) (444)
Class B (358) (508)
Class C (156) (213)
Class L (2) -
Class M (100) (159)
------- -------
(1,033) (1,324)
------- -------
Net increase (decrease) in shares
outstanding (230) (197)
======= =======
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Value Balanced 9
IDEX Transamerica Value Balanced
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share of beneficial interest outstanding throughout each period
------------------------------------------------------------------------------------------------------------
Investment Operations Distributions
------------------------------------------- ----------------------------------
Net Asset
For the Value, Net Net Realized Net Asset
Period Beginning Investment and Unrealized Total From Net From Net Value,
Ended (d)(g) of Period Income (Loss) Gain (Loss) Operations Investment Realized Total End
- -----------------------------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 $ 9.69 $ 0.18 $ 1.83 $ 2.01 $ (0.21) $ - $ (0.21) $ 11.49
10/31/2002 11.67 0.18 (1.65) (1.47) (0.16) (0.35) (0.51) 9.69
10/31/2001 12.75 0.26 (0.51) (0.25) (0.26) (0.57) (0.83) 11.67
10/31/2000 11.79 0.30 1.01 1.31 (0.35) - (0.35) 12.75
10/31/1999 13.14 0.27 (0.73) (0.46) (0.24) (0.65) (0.89) 11.79
- -----------------------------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 9.69 0.11 1.80 1.91 (0.14) - (0.14) 11.46
10/31/2002 11.66 0.11 (1.65) (1.54) (0.08) (0.35) (0.43) 9.69
10/31/2001 12.74 0.18 (0.50) (0.32) (0.19) (0.57) (0.76) 11.66
10/31/2000 11.78 0.23 1.01 1.24 (0.28) - (0.28) 12.74
10/31/1999 13.13 0.19 (0.73) (0.54) (0.16) (0.65) (0.81) 11.78
- -----------------------------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 9.69 0.11 1.80 1.91 (0.14) - (0.14) 11.46
10/31/2002 11.66 0.12 (1.66) (1.54) (0.08) (0.35) (0.43) 9.69
10/31/2001 12.74 0.17 (0.49) (0.32) (0.19) (0.57) (0.76) 11.66
10/31/2000 11.78 0.23 1.01 1.24 (0.28) - (0.28) 12.74
- -----------------------------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 9.71 0.12 1.77 1.89 (0.14) - (0.14) 11.46
- -----------------------------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 9.69 0.12 1.81 1.93 (0.15) - (0.15) 11.47
10/31/2002 11.66 0.11 (1.63) (1.52) (0.10) (0.35) (0.45) 9.69
10/31/2001 12.74 0.19 (0.50) (0.31) (0.20) (0.57) (0.77) 11.66
10/31/2000 11.78 0.24 1.01 1.25 (0.29) - (0.29) 12.74
10/31/1999 13.13 0.20 (0.73) (0.53) (0.17) (0.65) (0.82) 11.78
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
-----------------------------------------------------------------------
Ratio of Expenses
Net Assets, to Average Net Investment
For the End of Net Assets (a) Income (Loss) Portfolio
Period Total Period ----------------------- to Average Turnover
Ended (g) Return (c) (000's) Net (e) Total (f) Net Assets (a) Rate (b)
- ----------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 21.04% $ 11,832 1.55% 2.20% 1.75% 50%
10/31/2002 (13.20) 11,020 1.55 1.89 1.56 82
10/31/2001 (2.13) 13,880 1.55 1.95 2.04 50
10/31/2000 11.43 9,850 1.55 2.02 2.50 28
10/31/1999 (3.74) 12,377 1.66 1.85 2.12 82
- ----------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 19.98 13,744 2.20 2.85 1.10 50
10/31/2002 (13.72) 12,038 2.20 2.54 0.91 82
10/31/2001 (2.74) 16,180 2.20 2.60 1.39 50
10/31/2000 10.76 9,193 2.20 2.67 1.85 28
10/31/1999 (4.36) 12,171 2.31 2.50 1.47 82
- ----------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 19.98 3,645 2.20 2.85 1.10 50
10/31/2002 (13.72) 3,999 2.20 2.54 0.91 82
10/31/2001 ( 2.74) 3,619 2.20 2.60 1.39 50
10/31/2000 10.76 565 2.20 2.67 1.85 28
- ----------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 19.73 530 2.20 2.86 1.10 50
- ----------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 20.20 3,267 2.10 2.75 1.20 50
10/31/2002 (13.64) 3,050 2.10 2.44 1.01 82
10/31/2001 (2.65) 4,866 2.10 2.50 1.49 50
10/31/2000 10.86 2,868 2.10 2.57 1.95 28
10/31/1999 (4.26) 4,689 2.21 2.40 1.57 82
- ----------------------------------------------------------------------------------------------------------------
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Value Balanced 10
IDEX Transamerica Value Balanced
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (continued)
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 are not annualized.
(d) Per share information is calculated based on average number of shares
outstanding for the periods ended 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 (see note 2).
(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 Fund's offering of share classes C and L are as
follows:
Class C - November 1, 1999
Class L - November 11, 2002
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Value Balanced 11
IDEX Transamerica Value Balanced
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
At October 31, 2003
(all amounts in thousands)
NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
IDEX Mutual Funds is a Massachusetts business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company. IDEX Transamerica Value Balanced ("the Fund"),
part of IDEX Mutual Funds, began operations on October 1, 1995.
In the normal course of business the Fund enters into contracts that contain a
variety of representations and warranties and which provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown, as this would involve future claims that may be made against the Fund
and/or its affiliates that have not yet occurred. However, based on experience,
the Fund expects the risk of loss to be remote.
See the Prospectus and Statement of Additional Information for a description of
the Fund's investment objective.
In preparing the Fund's financial statements in accordance with accounting
principles generally accepted in the United States of America ("GAAP"),
estimates or assumptions (which could differ from actual results) may be used
that affect reported amounts and disclosures. The following policies were
consistently followed by the Fund, in accordance with GAAP.
Multiple class operations and expenses: The Fund currently offers five classes
of shares, each with a public offering price that reflects different sales
charges, if any, and expense levels. Effective November 11, 2002, Class C and M
shares were closed to new investors. Income, non-class specific expenses and
realized and unrealized gains and losses, are allocated daily to each class,
based upon the value of shares outstanding method as permitted under Rule 18f-3
of the 1940 Act. Each class bears its own specific expenses as well as a
portion of general, common expenses.
Security valuations: Fund investments traded on an exchange are valued at the
closing price on the day of valuation on the exchange where the security is
principally traded. With respect to securities traded on the NASDAQ INMS, such
closing price may be the last reported sales price or the NASDAQ Official
Closing Price.
Securities traded in the over-the-counter market and listed securities for
which no sale was reported on that date are valued at the last quoted bid
price.
Debt securities are valued by independent pricing services; however, those that
mature in sixty days or less are valued at amortized cost, which approximates
market.
Other securities for which quotations are not readily available are valued at
fair value determined in good faith, in accordance with procedures established
by and, under the supervision of the Board of Trustees and the Fund's Valuation
Committee.
Cash: The Fund may leave cash overnight in its cash account with the custodian,
Investors Bank & Trust Company ("IBT"). IBT has been contracted on behalf of
the Fund to invest the excess cash into a savings account, which at October 31,
2003, was paying an interest rate of 0.75%.
Securities lending: The Fund may lend securities to enhance fund earnings from
investing cash collateral received in making such loans to qualified borrowers
(typically broker/dealers). The Fund has engaged its custodian bank, IBT, as a
lending agent to administer its securities lending program. IBT earned $2 of
program net income for its services. When the Fund makes a security loan, it
receives cash collateral as protection against the risk that the borrower will
default on the loan, and records an asset for the cash invested collateral and
a liability for the return of the collateral.
Securities on loan are included in Investment securities at value on the
Statement of Assets and Liabilities and remain on the Schedule of Investments.
Loans of securities are required to be secured by collateral at least equal to
102% of the value of the securities at inception of the loan, and not less then
100% thereafter. The Fund may invest cash collateral in short-term money market
instruments including: U.S. Treasury Bills, U.S. agency obligations, commercial
paper, money market mutual funds, repurchase agreements and other highly rated,
liquid investments. During the life of securities loans, the collateral and
securities loaned remain subject to fluctuation in value. IBT marks to market
securities loaned and the collateral each business day. If additional
collateral is due (at least $1), IBT collects additional cash collateral from
the borrowers. Although securities loaned will be fully collateralized at all
times, IBT may experience delays in, or may be prevented from, recovering the
collateral on behalf of the Fund. The Fund may recall a loaned security
position at any time from the borrower through IBT. In the event the borrower
fails to timely return a recalled security, IBT may indemnify the Fund by
purchasing replacement securities for the Fund at its own expense and claiming
the collateral to fund such a purchase. IBT absorbs the loss if the collateral
value is not sufficient to cover the cost of the replacement securities. If
replacement securities are not available, IBT will credit the equivalent cash
value to the Fund.
Income from securities lending is included in the Statement of Operations. The
amounts of collateral and value of securities on loan are included in the
Statement of Assets and Liabilities as well as on the Schedule of Investments.
Security transactions and investment income: Security transactions are recorded
on the trade date. Security gains and losses are calculated on the specific
identification basis. Dividend income is recorded on the ex-dividend date or,
in the case of foreign securities, as soon as the Fund is informed of the
ex-dividend date. Interest income, including accretion of discounts and
amortization of premiums, is recorded on the accrual basis commencing on the
settlement date.
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Value Balanced 12
IDEX Transamerica Value Balanced
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 1-(continued)
Option contracts: The Fund may enter into options contracts to manage exposure
to market fluctuations. Option contracts are valued at the average of the bid
and ask ("Mean Quote") established each day at the close of the board of trade
or exchange on which they are traded. The primary risks associated with options
are imperfect correlation between the change in value of the securities held
and the prices of the options contracts; the possibility of an illiquid market
and inability of the counterparty to meet the contract terms. When the Fund
writes a covered call or put option, an amount equal to the premium received by
the Fund is included in the Fund's Statement of Assets and Liabilities as an
asset and as an equivalent liability. The amount of the liability is
subsequently marked-to-market to reflect the current value of the option
written.
The underlying face amounts of open option contracts at October 31, 2003, are
listed in the Schedule of Investments.
Transactions in written call and put options were as follows:
Premium Contracts*
-----------------------------------
Balance at 10/31/2002 $ 635 2,785
Sales 1,006 5,741
Closing Buys (240) (1,080)
Expirations (301) (1,580)
Exercised (214) (970)
------- ------
Balance at 10/31/2003 $ 886 4,896
======= ======
*Contracts not in thousands
Dividend distributions: Distributions to shareholders are recorded on the
ex-dividend date and are determined in accordance with Federal income tax
regulations which may differ from GAAP.
NOTE 2. RELATED PARTY TRANSACTIONS
AEGON/Transamerica Fund Advisers, Inc. ("ATFA") is the Fund's investment
adviser. AEGON/Transamerica Fund Services, Inc. ("ATFS") is the Fund's
administrator. AFSG Securities Corp. ("AFSG") is the Fund's
distributor/principal underwriter. AEGON/Transamerica Investor Services, Inc.
("ATIS") is the 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. AUSA and WRL are wholly owned indirect
subsidiaries of AEGON NV, a Netherlands corporation.
Transamerica Investment Management, LLC is both an affiliate of the Fund and a
sub-adviser to the Fund.
Investment advisory fees: The fund pays management fees to ATFA based on
average daily net assets ("ANA") at the following stated break points from
November 1, 2002 to February 28, 2003:
0.75% of the first $500 million of ANA
0.65% of ANA over 500 million
From March 1, 2003:
0.75% of the first $500 million ANA
0.65% of the next $500 million of ANA
0.60% of ANA over $1 billion
ATFA currently voluntarily waives its advisory fee and will reimburse the Fund
to the extent that operating expenses, excluding 12b-1 fees, exceed the
following stated annual limit:
1.20% Expense Limit
If total fund expenses fall below the annual expense limitations agreed to by
the adviser within the succeeding three years, the Fund may be required to pay
the advisor a portion or all of the waived advisory fees.
Distribution and service fees: The Fund has a 12b-1 distribution plan under the
1940 Act pursuant to which an annual fee, based on average daily net assets, is
paid to the distributor for various disbursements such as broker-dealer account
servicing fees and other promotional expenses of the Fund. The 12b-1 fee for
the Fund is comprised of a 0.25% service fee and the remaining amount is an
asset-based sales charge/distribution fee. The Fund is authorized under the
12b-1 plan to pay fees on each class up to the following limits:
Class A 0.35%
Class B 1.00%
Class C 1.00%
Class L 1.00%
Class M 0.90%
Underwriter commissions relate to front-end sales charges imposed for Class A
and M shares and contingent deferred sales charges from Classes B, L, M and
certain A share redemptions. For the year ended October 31, 2003, the
underwriter commissions were as follows:
Received by Underwriter $ 55
Retained by Underwriter 5
Contingent Sales Charges 29
Administrative services: The Fund has entered into an agreement with ATFS for
financial and legal fund administration services, which include such items as
compliance, expenses, financial statements and other reporting, distributions,
tax returns, prospectus preparation, board of trustees meeting support and
other legal matters. Transfer agent fees are reflected separately from
Administration fees on the Statement of Operations. The Legal fees on the
Statement of Operations are for fees paid to external legal counsel. ATFS
provides its services to the Fund at cost and is reimbursed monthly.
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Value Balanced 13
IDEX Transamerica Value Balanced
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 2-(continued)
Transfer agent fees: The Fund incurs ATIS annual per-account charges (not in
thousands) of $20.00 for each open shareholder account and $1.63 for each
closed account maintained, and certain out of pocket expenses.
Deferred compensation plan: Each eligible Fund Trustee may elect participation
in the Deferred Compensation Plan ("the Plan"). Under the Plan, such Trustees
may defer payment of a percentage of their total fees earned as a Fund Trustee.
These deferred amounts may be invested in any IDEX Fund. At October 31, 2003,
the value of invested plan amounts was $4. Invested plan amounts and the total
liability for deferred compensation to the Trustees under the Plan at October
31, 2003, are included in Net assets in the accompanying Statement of Assets
and Liabilities.
NOTE 3. INVESTMENT TRANSACTIONS
The cost of securities purchased and proceeds from securities sold (excluding
short-term securities) for the year ended October 31, 2003, were as follows:
Purchases of securities:
Long-Term excluding U.S. Government $ 8,389
U.S. Government 5,561
Proceeds from maturities and sales of securities:
Long-Term excluding U.S. Government 11,738
U.S. Government 5,684
NOTE 4. FEDERAL INCOME TAX MATTERS
The Fund has not made any provision for federal income or excise taxes due to
its policy to distribute all of its taxable income and capital gains to its
shareholders and otherwise qualify as a regulated investment company under the
Internal Revenue Code. Income and capital gain distributions are determined in
accordance with income tax regulations, which may differ from GAAP. These
differences are primarily due to differing treatments for items including, but
not limited to, wash sales, net operating losses and capital loss
carryforwards.
Reclassifications between Undistributed net investment income (loss),
Undistributed net realized capital gains (loss) and Shares of beneficial
interest are made to reflect income and gains available for distribution under
federal tax regulations. Results of operations and net assets are not effected
by these reclassifications. These reclassifications are as follows:
Shares of beneficial interest, unlimited
shares authorized $ (1)
Undistributed net investment income (loss) 29
Accumulated net realized gain (loss) from
investment securities and option contracts (28)
The tax character of distributions paid may differ from the character of
distributions shown in the Statements of Changes in Net Assets
primarily due to short-term gains being treated as ordinary income for tax
purposes. The tax character of distributions paid during 2002 and 2003 was as
follows:
2002 Distributions paid from:
Ordinary income $ 751
Long-term capital gains 821
2003 Distributions paid from:
Ordinary income $ 486
Long-term capital gains -
The tax basis components of distributable earnings as of October 31, 2003, are
as follows:
Undistributed Ordinary Income $ 21
========
Undistributed Long-term Capital Gains $ -
========
Capital Loss Carryforward $ (4,869)
========
Net Unrealized Appreciation (Depreciation) $ 1,106
========
The capital loss carryforward utilized as of October 31, 2003 was $146. The
capital loss carryforwards are available to offset future realized capital
gains through the periods listed:
Capital Loss
Carryforward Available through
- -------------- ------------------
$ 4,869 October 31, 2010
The aggregate cost of investments and composition of unrealized appreciation
(depreciation) for federal income tax purposes as of October 31, 2003, are as
follows:
Federal Tax Cost Basis $ 30,502
========
Unrealized Appreciation $ 3,139
Unrealized (Depreciation) (2,033)
--------
Net Unrealized Appreciation (Depreciation) $ 1,106
========
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Value Balanced 14
IDEX Transamerica Value Balanced
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
Supplemental Tax Information
(unaudited)
For dividends paid during the year ended October 31, 2003, the Fund designates
qualified dividend income to the maximum extent allowable.
For corporate shareholders, 60% of investment income (dividend income plus
short-term gains, if any) qualifies for the dividends received deduction.
The information and distributions reported herein may differ from the
information and distributions taxable to the shareholders for the calendar year
ending December 31, 2003. Complete information will be computed and reported in
conjunction with your 2003Form 1099-DIV.
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Value Balanced 15
- --------------------------------------------------------------------------------
Report of Independent Certified Public Accountants
To the Board of Trustees and Shareholders of
IDEX Transamerica Value Balanced
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of IDEX Transamerica Value Balanced
(the "Fund") (one of the portfolios constituting the IDEX Mutual Funds) at
October 31, 2003, and the results of its operations, the changes in its net
assets and the financial highlights for each of the periods indicated, in
conformity with accounting principles generally accepted in the United States
of America. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Fund's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with auditing standards generally accepted in the
United States of America, which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits, which included confirmation of securities at October 31, 2003 by
correspondence with the custodian and brokers, provide a reasonable basis for
our opinion.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Tampa, Florida
December 18, 2003
IDEX Mutual Funds Annual Report 2003
IDEX Transamerica Value Balanced 16
IDEX T. Rowe Price Health Sciences
- --------------------------------------------------------------------------------
MARKET ENVIRONMENT
A three-year slide in U.S. stocks ended in mid-March. Since that time, stocks
have rallied and the major indexes have posted gains for eight consecutive
months. Supportive factors included strong corporate earnings and improved
economic data trends in several segments of the economy. Investors were
particularly encouraged by the Commerce Department's report that the
inflation-adjusted gross domestic product rose at a better-than-expected 8.2%
annual rate in the third quarter, the quickest pace registered since early
1984. This result easily surpassed expectations and was more than double the
second quarter's 3.3% rate. The Federal Reserve Board ("Fed") continued its
highly accommodative stance during the period, lowering the federal funds rate
twice during the period to 1.00% -- over a 40-year low. The Fed continues to
offer assurances that short-term interest rates can remain low "for a
considerable period."
Small-cap stocks strongly outpaced both mid- and large-caps. Since March,
shares of speculative companies (e.g., stocks with no earnings, high
price-to-earnings ratios, or prices below $10) have been the best performers.
While value topped growth earlier in the period, this trend reversed over the
last several months.
Medical products and devices and life sciences stocks delivered the best
results among health care stocks; services and pharmaceuticals fared the worst.
PERFORMANCE
For the year ended October 31, 2003, IDEX T. Rowe Price Health Sciences
returned 22.46%. By comparison its benchmark, the Standard and Poor's 500
Composite Stock Index, returned 20.79%. With the exception of biotechnology,
stock selection was strong across all health care sectors.
STRATEGY REVIEW
Biotechnology represents over 38% of assets -- well above the benchmark
holding. Stock selection in this group was mixed. The portfolio benefited from
its overweight positions in ImClone Systems Incorporated ("ImClone"), The
Medicines Company, and Scios Inc. (no longer held due to its acquisition by
Johnson & Johnson). ImClone's shares rallied strongly during the summer after
it reported positive results for its anticancer drug, Erbitux, which was later
submitted to the Food and Drug Administration for approval. The portfolio was
hurt by positions in Trimeris, Inc. ("Trimeris") and Cephalon, Inc. Trimeris
fell due to investors' concerns related to slow sales of its anti-HIV drug.
Our pharmaceutical holdings remain significantly below the benchmark. Stock
selection in this group was a big contributor to returns. Our overweight
position in Salix Pharmaceuticals, Ltd., a specialty drug maker focused on
gastroenterology, helped returns. The company fended off a hostile takeover in
the summer and its stock rose sharply in September on positive Phase III
results for one of the medicines in its pipeline. The portfolio also benefited
by underweight or avoiding several major pharmaceutical companies. Our
year-long avoidance of Merck & Co., Inc., which is a sizable position in the
benchmark, and underweights in Schering-Plough Corporation and Johnson &
Johnson were also important contributors to results.
The portfolio continues to overweight the services sector and benefited from
its overweight position in elderly care provider Omnicare, Inc.
Kris H. Jenner
/s/ Kris H. Jenner
Fund Manager
T. Rowe Price Associates, Inc.
IDEX Mutual Funds Annual Report 2003
IDEX T. Rowe Price Health Sciences 1
IDEX T. Rowe Price Health Sciences
- --------------------------------------------------------------------------------
Comparison of change in value of $10,000 investment in Class A shares and
its comparative index.
[The following data was represented as a line chart in the printed material.]
Growth of $10,000
Inception of 3/1/02 through 10/31/03
Investment less sales charges - $9,452
DATE Class A S&P 500
- ------------ ----------- ------------
3/1/2002 9,452 10,000
3/31/2002 9,749 10,376
6/30/2002 8,280 8,987
9/30/2002 7,514 7,435
12/31/2002 7,618 8,062
3/31/2003 7,930 7,807
6/30/2003 9,348 9,009
9/30/2003 9,471 9,247
10/31/2003 9,584 9,771
Average Annual Total Return for Periods Ended 10/31/03
- --------------------------------------------------------------------------------
From Inception
1 year Inception Date
- ------------------------------------------------------------------
Class A (NAV) 22.46% 0.84% 3/1/02
Class A (POP) 15.73% -2.52% 3/1/02
S&P 500(1) 20.79% -1.38% 3/1/02
- ------------------------------------------------------------------
Class B (NAV) 21.72% 0.18% 3/1/02
Class B (POP) 16.72% -2.23% 3/1/02
- ------------------------------------------------------------------
Class C (NAV) 21.72% 0.18% 3/1/02
- ------------------------------------------------------------------
Class L (NAV) - 23.83% 11/11/02
Class L (POP) - 21.83% 11/11/02
- ------------------------------------------------------------------
Class M (NAV) 21.97% 0.30% 3/1/02
Class M (POP) 19.75% -0.30% 3/1/02
- ------------------------------------------------------------------
NOTES
(1) The Standard & Poor's 500 Composite Stock (S&P 500) 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 Micropal(R)(C) 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 shares, (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 a "non-diversified" fund and sector funds may be subject to
specific risks such as susceptibility to single economic, political, or
regulatory events, and may be subject to greater loss than investments in a
diversified fund.
Periods less than 1 year represent total return and are not annualized.
This material must be preceded or accompanied by a current prospectus, which
includes specific contents regarding the investment objectives and policies of
this fund.
IDEX Mutual Funds Annual Report 2003
IDEX T. Rowe Price Health Sciences 2
IDEX T. Rowe Price Health Sciences
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
At October 31, 2003
(all amounts except share amounts in thousands)
Shares Value
- --------------------------------------------------------------------------------
COMMON STOCKS (93.5%)
Computer & Data Processing Services (0.2%)
WebMD Corporation (a) 13,500 $ 105
Drug Stores & Proprietary Stores (2.8%)
Omnicare, Inc. 46,040 1,765
Electronic & Other Electric Equipment (0.2%)
Wilson Greatbatch Technologies, Inc. (a) 3,200 121
Health Services (4.3%)
Caremark Rx, Inc. (a) 8,000 200
Community Health Systems, Inc. (a) 10,400 250
DaVita Inc. (a) 6,450 226
HCA Inc. (b) 15,400 589
Laboratory Corporation of America
Holdings (a) 24,100 854
Triad Hospitals, Inc. (a) 15,200 467
Universal Health Services, Inc.-Class B (a) 3,100 146
Instruments & Related Products (0.9%)
Bio-Rad Laboratories, Inc.-Class A (a) 3,000 157
STAAR Surgical Company (a) 22,700 225
Waters Corporation (a) 6,500 204
Insurance (10.5%)
Anthem, Inc. (a)(b) 42,100 2,881
UnitedHealth Group Incorporated 64,500 3,282
WellPoint Health Networks Inc. (a) 5,550 493
Insurance Agents, Brokers & Service (0.6%)
AdvancePCS (a) 7,600 391
Medical Instruments & Supplies (7.4%)
Advanced Neuromodulation Systems, Inc. (a) 9,400 385
Aspect Medical Sytems, Inc. (a) 11,100 105
Bard, (C.R.) Inc. (b) 8,700 696
Boston Scientific Corporation (a) 20,300 1,375
Fischer Imaging Corporation (a) 36,280 137
Guidant Corporation 1,600 82
Medtronic, Inc. (b) 9,000 410
Regeneration Technologies, Inc. (a) 9,200 110
St. Jude Medical, Inc. (a)(b) 9,400 547
Stryker Corporation 4,800 389
Synthes-Stratec, Inc. 200 184
Zimmer Holdings, Inc. (a) 4,600 294
Pharmaceuticals (63.1%)
Abbott Laboratories (b) 16,350 697
Abgenix, Inc. (a) 41,800 512
Able Laboratories, Inc. (a) 18,300 354
Actelion Ltd. (a) 3,230 308
Alcon, Inc. (b) 4,100 226
Alexion Pharmaceuticals, Inc. (a) 13,080 242
Alkermes, Inc. (a) 71,060 922
Allergan, Inc. (b) 9,300 703
Shares Value
- --------------------------------------------------------------------------------
Pharmaceuticals (continued)
AmerisourceBergen Corporation 6,800 $ 386
Amgen Inc. (a) 47,220 2,916
Amylin Pharmaceuticals, Inc. (a) 13,780 377
Angiotech Pharmaceuticals, Inc. (a) 1,400 64
AstraZeneca PLC-ADR 3,300 157
Barr Laboratories, Inc. (a) 7,200 553
BioCryst Pharmaceuticals, Inc. (a) 28,600 232
BioMarin Pharmaceutical Inc. (a) 9,300 65
BioSphere Medical, Inc. (a) 32,100 105
Biovail Corporation (a)(b) 8,000 192
Cardinal Health, Inc. (b) 10,600 629
Cephalon, Inc. (a) 45,540 2,139
Chiron Corporation (a) 3,300 180
Cubist Pharmaceuticals, Inc. (a) 39,700 461
CV Therapeutics, Inc. (a)(b) 12,500 220
EPIX Medical, Inc. (a) 15,400 285
Esperion Therapeutics, Inc. (a) 12,730 304
Forest Laboratories, Inc. (a) 22,500 1,125
Genentech, Inc. (a) 16,570 1,358
Gilead Sciences, Inc. (a)(b) 55,670 3,038
Human Genome Sciences, Inc. (a) 24,500 341
ICN Pharmaceuticals, Inc. 17,800 344
IDEC Pharmaceuticals Corporation (a) 35,000 1,230
ImClone Systems Incorporated (a)(b) 33,290 1,157
Indevus Pharmacuticals, Inc. (a) 25,000 137
Integra LifeSciences Holdings
Corporation (a) 3,300 111
Invitrogen Corporation (a)(b) 13,200 839
IVAX Corporation (a) 18,100 349
Johnson & Johnson 16,200 815
Ligand Pharmaceuticals Incorporated (a) 10,055 139
Ligand Pharmaceuticals
Incorporated-Class B (a)(d) 1,000 12
Lilly (Eli) and Company (b) 14,200 946
Medarex, Inc. (a) 12,800 92
Medicines Company (The) (a) 34,850 929
Medimmune, Inc. (a)(b) 27,920 744
MGI PHARMA, INC. (a)(b) 12,400 466
Millennium Pharmaceuticals, Inc. (a) 21,700 345
Myriad Genetics, Inc. (a) 7,000 89
Nektar Therapeutics (a) 28,000 368
NeoRx Corporation (a) 4,600 24
Neurocrine Biosciences, Inc. (a)(b) 22,160 1,038
Noven Pharmaceuticals, Inc. (a) 17,850 180
Novo Nordisk A/S-ADR 100 4
Novo Nordisk A/S-Class B 1,500 54
NPS Pharmaceuticals, Inc. (a) 29,800 785
Onyx Pharmaceuticals, Inc. (a) 13,200 323
OSI Pharmaceuticals, Inc. (a) 12,130 340
Pfizer Inc. 75,580 2,388
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX T. Rowe Price Health Sciences 3
IDEX T. Rowe Price Health Sciences
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Shares Value
- ------------------------------------------------------------------------
Pharmaceuticals (continued)
Priority Healthcare Corporation-Class B (a) 3,900 $ 84
Protein Design Labs, Inc. (a) 17,300 233
Regeneron Pharmaceuticals, Inc. (a) 9,600 133
Repligen Corporation (a) 300 2
Roche Holding AG 1,820 151
Salix Pharmaceuticals, Ltd. (a) 19,800 392
Sanofi-Synthelabo 7,900 489
Schering-Plough Corporation 15,980 244
Serologicals Corporation (a) 4,600 74
SICOR Inc. (a) 14,200 381
Teva Pharmaceutical Industries Ltd.-ADR 18,340 1,043
Transkaryotic Therapies, Inc. (a) 18,800 246
Trimeris, Inc. (a)(b) 29,920 766
Tularik Inc. (a) 6,060 76
Vertex Pharmaceuticals Incorporated (a) 21,700 285
Vicuron Pharmaceuticals Inc. (a) 7,820 143
Vicuron Pharmaceuticals Inc.-restricted (a) 25 (c)
ViroPharma Incorporated (a) 8,133 25
Wyeth 36,500 1,611
XOMA Ltd. (a) 9,400 70
Yamanouchi Pharmaceutical Co., Ltd. 10,000 251
Research & Testing Services (2.0%)
deCODE genetics, Inc. (a) 30,000 212
Diversa Corporation (a) 13,700 115
Exelixis, Inc. (a) 51,280 381
Symyx Technologies, Inc. (a) 27,800 588
Retail Trade (0.6%)
Schein (Henry), Inc. (a) 6,400 397
Wholesale Trade Durable Goods (0.9%)
Fisher Scientific International Inc. (a) 11,000 443
Patterson Dental Company (a) 1,800 115
--------
Total Common Stocks (cost: $56,014) 59,359
--------
Principal Value
- -------------------------------------------------------------------------
SHORT-TERM U.S. GOVERNMENT OBLIGATIONS (6.1%)
U.S. Treasury Bill (b)
0.82%, due 12/11/2003 $ 300 $ 300
0.90%, due 12/18/2003 300 300
0.91%, due 12/18/2003 200 200
0.92%, due 12/18/2003 200 200
0.97%, due 12/18/2003 200 200
0.95%, due 12/26/2003 200 200
1.02%, due 02/12/2004 350 349
0.99%, due 03/04/2004 650 648
1.00%, due 03/04/2004 300 299
0.97%, due 03/18/2004 300 299
0.99%, due 03/18/2004 200 199
0.96%, due 03/25/2004 200 199
Principal Value
- -------------------------------------------------------------------------
U.S. Treasury Bill (b) (continued)
1.00%, due 04/15/2004 $ 200 $ 199
1.00%, due 04/22/2004 300 299
---------
Total Short-Term U.S. Government Obligations
(cost: $3,891) 3,891
---------
Total Investment Securities (cost: $59,905) $ 63,250
=========
Contracts (d) Value
- ------------------------------------------------------------------------
WRITTEN OPTIONS (-1.0%)
Covered Call Options (-0.3%)
Alcon, Inc.
Call Strike $60.00,
Expires 05/22/2004 41 $ (9)
Allergan, Inc.
Call Strike $85.00,
Expires 01/17/2004 25 (2)
Anthem, Inc.
Call Strike $75.00,
Expires 12/20/2003 16 (1)
Anthem, Inc.
Call Strike $80.00,
Expires 12/20/2003 3 (c)
Anthem, Inc.
Call Strike $80.00,
Expires 03/20/2004 94 (8)
Bard, (C.R.) Inc.
Call Strike $80.00,
Expires 11/22/2003 16 (2)
Biovail Corporation
Call Strike $30.00,
Expires 01/17/2004 60 (5)
Cardinal Health, Inc.
Call Strike $65.00,
Expires 12/20/2003 55 (2)
CV Therapeutics, Inc.
Call Strike $20.00,
Expires 04/17/2004 31 (10)
CV Therapeutics, Inc.
Call Strike $27.50,
Expires 04/17/2004 56 (8)
Gilead Sciences, Inc.
Call Strike $60.00,
Expires 01/17/2004 62 (9)
Gilead Sciences, Inc.
Call Strike $60.00,
Expires 02/21/2004 155 (33)
Gilead Sciences, Inc.
Call Strike $60.00,
Expires 11/22/2003 91 (3)
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX T. Rowe Price Health Sciences 4
IDEX T. Rowe Price Health Sciences
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Contracts (d) Value
- -----------------------------------------------------------------------
Covered Call Options (continued)
HCA Inc.
Call Strike $35.00,
Expires 11/22/2003 4 $ (1)
ImClone Systems Incorporated
Call Strike $40.00,
Expires 11/22/2003 46 (3)
ImClone Systems Incorporated
Call Strike $45.00,
Expires 11/22/2003 88 (2)
Invitrogen Corporation
Call Strike $60.00,
Expires 11/22/2003 12 (5)
Lilly (Eli) and Company
Call Strike $70.00,
Expires 04/17/2004 29 (8)
Medimmune, Inc.
Call Strike $30.00,
Expires 03/20/2004 40 (6)
Medimmune, Inc.
Call Strike $30.00,
Expires 06/19/2004 10 (25)
Medimmune, Inc.
Call Strike $32.50,
Expires 06/19/2004 45 (7)
Medimmune, Inc.
Call Strike $35.00,
Expires 06/19/2004 74 (8)
Medtronic, Inc.
Call Strike $50.00,
Expires 01/17/2004 44 (2)
MGI PHARMA, INC.
Call Strike $40.00,
Expires 01/17/2004 26 (6)
Neurocrine Biosciences, Inc.
Call Strike $50.00,
Expires 11/22/2003 46 (4)
Neurocrine Biosciences, Inc.
Call Strike $55.00,
Exprires 11/22/2003 28 (1)
St. Jude Medical, Inc.
Call Strike $60.00,
Expires 01/17/2004 29 (6)
St. Jude Medical, Inc.
Call Strike $60.00,
Expires 11/22/2003 44 (4)
Trimeris, Inc.
Call Strike $30.00,
Expires 01/17/2004 34 (2)
Contracts (d) Value
- -----------------------------------------------------------------------
Covered Call Options (continued)
Trimeris, Inc.
Call Strike $30.00,
Expires 04/17/2004 82 $ (11)
Trimeris, Inc.
Call Strike $35.00,
Expires 04/17/2004 35 (2)
Trimeris, Inc.
Call Strike $40.00,
Expires 04/17/2004 26 (c)
Trimeris, Inc.
Call Strike $45.00,
Expires 04/17/2004 19 (c)
Put Options (-0.7%)
Abbott Laboratories
Put Strike $40.00,
Expires 11/22/2003 5 (c)
Abbott Laboratories
Put Strike $47.50,
Expires 11/22/2003 6 (c)
Accredo Health, Incorporated
Put Strike $25.00,
Expires 01/17/2004 18 (1)
Adolor Corporation
Put Strike $17.50,
Expires 04/17/2004 26 (4)
Amgen Inc.
Put Strike $65.00,
Expires 04/17/2004 21 (13)
Anthem, Inc.
Put Strike $75.00,
Expires 03/20/2004 25 (21)
Anthem, Inc.
Put Strike $75.00,
Expires 12/20/2003 9 (7)
Anthem, Inc.
Put Strike $80.00,
Expires 12/20/2003 13 (15)
Bard, (C.R.) Inc.
Put Strike $70.00,
Expires 04/17/2004 13 (1)
Bard, (C.R.) Inc.
Put Strike $75.00,
Expires 04/17/2004 13 (3)
Bard, (C.R.) Inc.
Put Strike $80.00,
Expires 11/22/2003 6 (1)
Barr Laboratories, Inc.
Put Strike $75.00,
Expires 05/22/2004 15 (9)
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX T. Rowe Price Health Sciences 5
IDEX T. Rowe Price Health Sciences
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Contracts (d) Value
- --------------------------------------------------------------------------
Put Options (continued)
Cephalon, Inc.
Put Strike $40.00,
Expires 01/17/2004 10 $ (1)
Cephalon, Inc.
Put Strike $45.00,
Expires 01/17/2004 14 (3)
Chiron Corporation
Put Strike $50.00,
Expires 01/17/2004 12 (1)
Chiron Corporation
Put Strike $50.00,
Expires 04/17/2004 24 (5)
Fisher Scientific International Inc.
Put Strike $40.00,
Expires 12/20/2003 11 (2)
Forest Laboratories, Inc.
Put Strike $50.00,
Expires 11/22/2003 4 (1)
Forest Laboratories, Inc.
Put Strike $55.00,
Expires 01/17/2004 13 (8)
Forest Laboratories, Inc.
Put Strike $60.00,
Expires 01/17/2004 33 (34)
Genentech, Inc.
Put Strike $55.00,
Expires 01/17/2004 21 (c)
Genentech, Inc.
Put Strike $60.00,
Expires 01/17/2004 11 (c)
Genentech, Inc.
Put Strike $65.00,
Expires 01/17/2004 12 (1)
Genentech, Inc.
Put Strike $90.00,
Expires 12/20/2003 13 (12)
Genentech, Inc.
Put Strike $95.00,
Expires 01/17/2004 17 (23)
Gilead Sciences, Inc.
Put Strike $50.00,
Expires 02/21/2004 6 (1)
Guidant Corporation
Put Strike $55.00,
Expires 04/17/2004 21 (13)
HCA Inc.
Put Strike $40.00,
Expires 01/17/2004 12 (3)
Contracts (d) Value
- -----------------------------------------------------------------------------
Put Options (continued)
IDEC Pharmaceuticals Corporation
Put Strike $35.00,
Expires 04/17/2004 5 $ (1)
ImClone Systems Incorporated
Put Strike $40.00,
Expires 02/21/2004 18 (17)
ImClone Systems Incorporated
Put Strike $45.00,
Expires 02/21/2004 21 (28)
ImClone Systems Incorporated
Put Strike $45.00,
Expires 05/22/2004 15 (22)
InterMune, Inc.
Put Strike $20.00,
Expires 04/17/2004 12 (3)
InterMune, Inc.
Put Strike $25.00,
Expires 04/17/2004 13 (8)
Invitrogen Corporation
Put Strike $50.00,
Expires 02/21/2004 11 (2)
Invitrogen Corporation
Put Strike $50.00,
Expires 11/22/2003 21 (c)
Laboratory Corporation of America Holdings
Put Strike $35.00,
Expires 05/22/2004 8 (2)
Lilly (Eli) and Company
Put Strike $60.00,
Expires 04/17/2004 13 (3)
Medimmune, Inc.
Put Strike $30.00,
Expires 03/20/2004 12 (6)
Merck & Co., Inc.
Put Strike $55.00,
Expires 01/17/2004 3 (2)
Merck & Co., Inc.
Put Strike $60.00,
Expires 01/17/2004 25 (33)
Merck & Co., Inc.
Put Strike $65.00,
Expires 01/17/2004 19 (32)
MGI PHARMA, INC.
Put Strike $45.00,
Expires 01/17/2004 14 (11)
Molecular Devices Corporation
Put Strike $22.50,
Expires 01/17/2004 28 (13)
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX T. Rowe Price Health Sciences 6
IDEX T. Rowe Price Health Sciences
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Contracts (d) Value
- ---------------------------------------------------------------------------
Put Options (continued)
Nektar Therapeutics
Put Strike $15.00,
Expires 02/21/2004 23 $ (8)
OSI Pharmaceuticals, Inc.
Put Strike $25.00,
Expires 01/17/2004 16 (3)
Pfizer Inc.
Put Strike $32.50,
Expires 03/20/2004 59 (14)
Pfizer Inc.
Put Strike $32.50,
Expires 06/19/2004 62 (18)
Protein Design Labs, Inc.
Put Strike $12.50,
Expires 02/21/2004 28 (4)
Stryker Corporation
Put Strike $75.00,
Expires 01/17/2004 11 (1)
Zimmer Holdings, Inc.
Put Strike $60.00,
Expires 03/20/2004 12 (2)
-----------
Total Written Options (premium: $778) (611)
----------
SUMMARY:
Investments, at value 99.6 % $ 63,250
Written options (1.0)% (611)
Other assets in excess of liabilities 1.4 % 890
--------- ----------
Net assets 100.0 % $ 63,529
========= ==========
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 segregated with
the custodian to cover margin requirements for open option contracts. The
value of all securities segregated at October 31, 2003, is $10,575.
(c) Value is less than $1.
(d) Contracts are not in thousands.
DEFINITIONS:
ADR American Depositary Receipt
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX T. Rowe Price Health Sciences 7
IDEX T. Rowe Price Health Sciences
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
At October 31, 2003
(all amounts except per share amounts in thousands)
Assets:
Investment securities, at value (cost: $59,905) $ 63,250
Cash 1,127
Receivables:
Investment securities sold 91
Shares of beneficial interest sold 589
Dividends 7
--------
65,064
--------
Liabilities:
Investment securities purchased 792
Accounts payable and accrued liabilities:
Shares of beneficial interest redeemed 2
Management and advisory fees 83
Distribution fees 20
Transfer agent fees 8
Written options (premium: $778) 611
Other 19
--------
1,535
--------
Net Assets $ 63,529
========
Net Assets Consist of:
Shares of beneficial interest, unlimited shares authorized $59,948
Accumulated net investment income (loss) (1)
Undistributed net realized gain (loss) from investment
securities and option contracts 71
Net unrealized appreciation (depreciation) on:
Investment securities 3,344
Written option contracts 167
--------
Net Assets $ 63,529
========
Shares Outstanding:
Class A 5,830
Class B 294
Class C 90
Class L 20
Class M 36
Net Asset Value Per Share:
Class A $ 10.14
Class B 10.03
Class C 10.03
Class L 10.03
Class M 10.05
Maximum Offering Price Per Share (a):
Class A $ 10.73
Class M 10.15
(a) 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.
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the year ended October 31, 2003
(all amounts in thousands)
Investment Income:
Interest $ 14
Dividends 71
Less withholding taxes on foreign dividends (1)
-------
84
-------
Expenses:
Management and advisory fees 250
Transfer agent fees 31
Printing and shareholder reports 4
Custody fees 58
Administration fees 31
Legal fees 1
Auditing and accounting fees 18
Trustees fees 2
Registration fees 62
Other 2
Distribution and service fees:
Class A 78
Class B 16
Class C 5
Class L 1
Class M 2
-------
Total expenses 561
Less:
Advisory fee waiver (60)
-------
Net expenses 501
-------
Net Investment Income (Loss) (417)
-------
Net Realized Gain (Loss) from:
Investment securities 474
Written option contracts 190
Foreign currency transactions (7)
-------
657
-------
Net Increase (Decrease) in Unrealized Appreciation
(Depreciation) on:
Investment securities 3,544
Written option contracts 179
-------
3,723
-------
Net Gain (Loss) on Investments, Option Contracts,
and Foreign Currency Transactions 4,380
-------
Net Increase (Decrease) in Net Assets Resulting from
Operations $ 3,963
=======
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX T. Rowe Price Health Sciences 8
IDEX T. Rowe Price Health Sciences
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
For the year or period ended
(all amounts in thousands)
October 31, October 31,
2003 2002(a)
---------- -----------
Increase (Decrease) In Net Assets From:
Operations:
Net investment income (loss) $ (417) $ (31)
Net realized gain (loss) from investment
securities, option contracts, and
foreign currency transactions 657 (170)
Net unrealized appreciation
(depreciation) on investment
securities and option contracts 3,723 (212)
-------- -------
3,963 (413)
-------- -------
Distributions to Shareholders:
From net investment income:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
-------- -------
- -
-------- -------
From net realized gains:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
-------- -------
- -
-------- -------
Capital Share Transactions:
Proceeds from shares sold:
Class A 52,189 4,157
Class B 2,260 985
Class C 768 418
Class L 213 -
Class M 158 208
-------- -------
55,588 5,768
-------- -------
Dividends and distributions reinvested:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
-------- -------
- -
-------- -------
Cost of shares redeemed:
Class A (410) (129)
Class B (344) (118)
Class C (278) (60)
Class L (19) -
Class M (18) (1)
-------- -------
(1,069) (308)
-------- -------
54,519 5,460
-------- -------
Net increase (decrease) in net assets 58,482 5,047
-------- -------
Net Assets:
Beginning of year 5,047 -
-------- -------
End of year $ 63,529 $ 5,047
======== =======
Accumulated Net Investment Income (Loss) $ (1) $ -
======== =======
October 31, October 31,
2003 2002(a)
---------- -----------
Share Activity:
Shares issued:
Class A 5,413 474
Class B 239 106
Class C 82 44
Class L 22 -
Class M 16 21
-------- -------
5,772 645
-------- -------
Shares issued-reinvested from distributions:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
-------- -------
- -
-------- -------
Shares redeemed:
Class A (42) (15)
Class B (37) (14)
Class C (29) (7)
Class L (2) -
Class M (1) -
-------- -------
(111) (36)
-------- -------
Net increase (decrease) in shares
outstanding 5,661 609
======== =======
(a) Commenced operations on March 1, 2002.
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX T. Rowe Price Health Sciences 9
IDEX T. Rowe Price Health Sciences
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share of beneficial interest outstanding throughout each period
-----------------------------------------------------------------------------------------------------------
Investment Operations Distributions
------------------------------------------- --------------------------------------
Net Asset Net Asset
For the Value, Net Net Realized From Net From Net Value,
Period Beginning Investment and Unrealized Total Investment Realized Total End
Ended (d)(g) of Period Income (Loss) Gain (Loss) Operations Income Gains Distributions of Period
- -----------------------------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 $ 8.28 $ (0.16) $ 2.02 $ 1.86 $ - $ - $ - $10.14
10/31/2002 10.00 (0.08) (1.64) (1.72) - - - 8.28
- -----------------------------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 8.24 (0.21) 2.00 1.79 - - - 10.03
10/31/2002 10.00 (0.11) (1.65) (1.76) - - - 8.24
- -----------------------------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 8.24 (0.21) 2.00 1.79 - - - 10.03
10/31/2002 10.00 (0.12) (1.64) (1.76) - - - 8.24
- -----------------------------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 8.10 (0.22) 2.15 1.93 - - - 10.03
- -----------------------------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 8.24 (0.20) 2.01 1.81 - - - 10.05
10/31/2002 10.00 (0.12) (1.64) (1.76) - - - 8.24
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
-----------------------------------------------------------------------
Ratio of Expenses
Net Assets, to Average Net Investment
For the End of Net Assets (a) Income (Loss) Portfolio
Period Total Period ----------------------- to Average Turnover
Ended (g) Return (c) (000's) Net (e) Total (f) Net Assets (a) Rate (b)
- ---------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 22.46% $ 59,115 1.95% 2.19% (1.61)% 30%
10/31/2002 (17.20) 3,804 1.95 8.76 (1.51) 43
- ---------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 21.72 2,952 2.60 2.84 (2.26) 30
10/31/2002 (17.60) 758 2.60 9.41 (2.16) 43
- ---------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 21.72 904 2.60 2.84 (2.26) 30
10/31/2002 (17.60) 308 2.60 9.41 (2.16) 43
- ---------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 23.83 201 2.60 2.84 (2.26) 30
- ---------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 21.97 357 2.50 2.74 (2.16) 30
10/31/2002 (17.60) 177 2.50 9.31 (2.06) 43
- ---------------------------------------------------------------------------------------------------------------
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 are not annualized.
(d) Per share information is calculated based on average number of shares
outstanding.
(e) Ratio of Net Expenses to Average Net Assets is net of fee waivers and
reimbursements by the investment adviser, if any (see note 2).
(f) Ratio of Total Expenses to Average Net Assets includes all expenses before
fee waivers and reimbursements by the investment adviser.
(g) IDEX T. Rowe Price Health Sciences ("the Fund") commenced operations on
March 1, 2002. The inception date for the Fund's offering of share Class L
was November 11, 2002.
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX T. Rowe Price Health Sciences 10
IDEX T. Rowe Price Health Sciences
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
At October 31, 2003
(all amounts in thousands)
NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
IDEX Mutual Funds is a Massachusetts business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company. IDEX T. Rowe Price Health Sciences ("the Fund"),
part of IDEX Mutual Funds, began operations on March 1, 2002. The Fund is
"non-diversified" under the 1940 Act.
In the normal course of business, the Fund enters into contracts that contain a
variety of representations and warranties and which provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown, as this would involve future claims that may be made against the Fund
and/or its affiliates that have not yet occurred. However, based on experience,
the Fund expects the risk of loss to be remote.
See the Prospectus and Statement of Additional Information for a description of
the Fund's investment objective.
In preparing the Fund's financial statements in accordance with accounting
principles generally accepted in the United States of America ("GAAP"),
estimates or assumptions (which could differ from actual results) may be used
that affect reported amounts and disclosures. The following policies were
consistently followed by the Fund, in accordance with GAAP.
Multiple class operations and expenses: The Fund currently offers five classes
of shares, each with a public offering price that reflects different sales
charges, if any, and expense levels. Effective November 11, 2002, Class C and M
shares were closed to new investors. Income, non-class specific expenses and
realized and unrealized gains and losses, are allocated daily to each class,
based upon the value of shares outstanding method as permitted under Rule 18f-3
of the 1940 Act. Each class bears its own specific expenses as well as a portion
of general, common expenses.
Security valuations: Fund investments traded on an exchange are valued at the
closing price on the day of valuation on the exchange where the security is
principally traded. With respect to securities traded on the NASDAQ INMS, such
closing price may be the last reported sales price or the NASDAQ Official
Closing Price.
Securities traded in the over-the-counter market and listed securities for which
no sale was reported on that date are valued at the last quoted bid price.
Debt securities are valued by independent pricing services; however, those that
mature in sixty days or less are valued at amortized cost, which approximates
market.
Other securities for which quotations are not readily available are valued at
fair value determined in good faith, in accordance with procedures established
by and, under the supervision of the Board of Trustees and the Fund's Valuation
Committee.
Cash: The Fund may leave cash overnight in its cash account with the custodian,
Investors Bank & Trust Company ("IBT"). IBT has been contracted on behalf of the
Fund to invest the excess cash into a savings account, which at October 31,
2003, was paying an interest rate of 0.75%.
Directed brokerage: The sub-adviser, to the extent consistent with the best
execution and usual commission rate policies and practices, may place security
transactions of the Fund with broker/dealers with which IDEX Mutual Funds has
established a Directed Brokerage Program. A Directed Brokerage Program is any
arrangement under which a broker/dealer applies a portion of the commissions
received by such broker/dealer on the security transactions to the Fund. In no
event will commissions paid by the Fund be used to pay expenses that would
otherwise be borne by any other funds within IDEX Mutual Funds, or by any other
party. Directed commissions during the year ended October 31, 2003, of $11 are
included in net realized gains in the Statement of Operations.
Securities lending: The Fund may lend securities to enhance fund earnings from
investing cash collateral received in making such loans to qualified borrowers
(typically broker/dealers). The Fund has engaged its custodian bank, IBT, as a
lending agent to administer its securities lending program. IBT earned less than
$1 of program net income for its services. When the Fund makes a security loan,
it receives cash collateral as protection against the risk that the borrower
will default on the loan, and records an asset for the cash invested collateral
and a liability for the return of the collateral.
Securities on loan are to be included in Investment securities at value on the
Statement of Assets and Liabilities and remain on the Schedule of Investments.
Loans of securities are required to be secured by collateral at least equal to
102% of the value of the securities at inception of the loan, and not less then
100% thereafter. The Fund may invest cash collateral in short-term money market
instruments including: U.S. Treasury Bills, U.S. agency obligations, commercial
paper, money market mutual funds, repurchase agreements and other highly rated,
liquid investments. During the life of securities loans, the collateral and
securities loaned remain subject to fluctuation in value. IBT marks to market
securities loaned and the collateral each business day. If additional collateral
is due (at least $1), IBT collects additional cash collateral from the
borrowers. Although securities loaned will be fully collateralized at all times,
IBT may experience delays in, or may be prevented from, recovering the
collateral on behalf of the Fund. The Fund may recall a loaned security position
at any time from the borrower through IBT. In the event the borrower fails to
timely return a recalled security, IBT may indemnify the Fund by purchasing
replacement securities for the Fund at its own expense and claiming the
collateral to fund such a purchase. IBT absorbs the loss if the collateral value
is not sufficient to cover the cost of the replacement securities. If
replacement securities are not available, IBT will credit the equivalent cash
value to the Fund.
IDEX Mutual Funds Annual Report 2003
IDEX T. Rowe Price Health Sciences 11
IDEX T. Rowe Price Health Sciences
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 1-(continued)
Income from securities lending is included in the Statement of Operations. The
amounts of collateral and value of securities on loan are included in the
Statement of Assets and Liabilities as well as on the Schedule of Investments.
Security transactions and investment income: Security transactions are recorded
on the trade date. Security gains and losses are calculated on the specific
identification basis. Dividend income is recorded on the ex-dividend date or, in
the case of foreign securities, as soon as the Fund is informed of the
ex-dividend date. Interest income, including accretion of discounts and
amortization of premiums, is recorded on the accrual basis commencing on the
settlement date.
Option contracts: The Fund may enter into option contracts to manage exposure to
market, interest rate or currency fluctuations. Option contracts are valued at
the average of the bid and ask ("Mean Quote") established each day at the close
of the board of trade or exchange on which they are traded. The primary risks
associated with options are imperfect correlation between the change in value of
the securities held and the prices of futures options; the possibility of an
illiquid market and inability of the counterparty to meet the contract terms.
When the Fund writes a covered call or put option, an amount equal to the
premium received by the Fund is included in the Fund's Statement of Assets and
Liabilities as an asset and as an equivalent liability. The amount of the
liability is subsequently marked-to-market to reflect the current value of the
option written.
The underlying face amounts of open option contracts at October 31, 2003, are
listed in the Schedule of Investments.
Transactions in written options were as follows:
Premium Contracts*
-----------------------
Balance at 10/31/2002 $ 27 168
Sales 1,851 6,918
Closing Buys (1,010) (3,999)
Expirations (89) (668)
------- ------
Balance at 10/31/2003 $ 778 2,419
======= ======
*Contracts not in thousands.
Dividend distributions: Distributions to shareholders are recorded on the
ex-dividend date and are determined in accordance with Federal income tax
regulations which may differ from GAAP.
NOTE 2. RELATED PARTY TRANSACTIONS
AEGON/Transamerica Fund Advisers, Inc. ("ATFA") is the Fund's investment
adviser. AEGON/Transamerica Fund Services, Inc. ("ATFS") is the Fund's
administrator. AFSG Securities Corp. ("AFSG") is the Fund's
distributor/principal underwriter. AEGON/Transamerica Investor Services, Inc.
("ATIS") is the 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. AUSA and WRL are wholly owned indirect subsidiaries of AEGON
NV, a Netherlands corporation.
The following schedule reflects the percentage of fund assets owned by
affiliated mutual funds (ie: through the assets allocation funds)
Net % of
Assets Net Assets
------ ----------
IDEX Asset Allocation
Conservative Portfolio $ 5,428 9%
IDEX Asset Allocation Growth 11,685 18%
IDEX Asset Allocation Moderate
Growth 22,500 35%
IDEX Asset Allocation Moderate 17,578 28%
-----
90%
=====
Investment advisory fees: The Fund pays management fees to ATFA based on average
daily net assets ("ANA") at the following stated break points:
1.00% of the first $500 million of ANA
0.95% of ANA over $500 million
ATFA currently voluntarily waives its advisory fee and will reimburse the Fund
to the extent that operating expenses, excluding 12b-1 fees, exceed the
following stated annual limit:
1.60% Expense Limit
If total fund expenses fall below the annual expense limitations agreed to by
the adviser within the succeeding three years, the Fund may be required to pay
the advisor a portion or all of the waived advisory fees.
Advisory Fee Available for
Waived Recapture Through
------------ -----------------
Fiscal Year 2003 $ 60 10/31/2006
Fiscal Year 2002 122 10/31/2005
Distribution and service fees: The Fund has a 12b-1 distribution plan under the
1940 Act pursuant to which an annual fee, based on average daily net assets, is
paid to the distributor for various disbursements such as broker-dealer account
servicing fees and other promotional expenses of the Fund. The 12b-1 fee for the
Fund is comprised of a 0.25% service fee and the remaining amount is an
asset-based sales charge/distribution fee. The Fund is authorized under the
12b-1 plan to pay fees on each class up to the following limits:
Class A 0.35%
Class B 1.00%
Class C 1.00%
Class L 1.00%
Class M 0.90%
IDEX Mutual Funds Annual Report 2003
IDEX T. Rowe Price Health Sciences 12
IDEX T. Rowe Price Health Sciences
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 2-(continued)
Underwriter commissions relate to front-end sales charges imposed for Class A
and M shares and contingent deferred sales charges from Classes B, L, M and
certain A share redemptions. For the year ended October 31, 2003, the
underwriter commissions were as follows:
Received by Underwriter $ 24
Retained by Underwriter 4
Contingent Sales Charges 4
Administrative services: The Fund has entered into an agreement with ATFS for
financial and legal fund administration services, which include such items as
compliance, expenses, financial statements and other reporting, distributions,
tax returns, prospectus preparation, board of trustees meeting support and other
legal matters. Transfer agent fees are reflected separately from Administration
fees on the Statement of Operations. The Legal fees on the Statement of
Operations are for fees paid to external legal counsel. ATFS provides its
services to the Fund at cost and is reimbursed monthly.
Transfer agent fees: The Fund incurs ATIS annual per-account charges (not in
thousands) of $20.00 for each open shareholder account and $1.63 for each closed
account maintained, and certain out of pocket expenses.
Deferred compensation plan: Each eligible Fund Trustee may elect participation
in the Deferred Compensation Plan ("the Plan"). Under the Plan, such Trustees
may defer payment of a percentage of their total fees earned as a Fund Trustee.
These deferred amounts may be invested in any IDEX Fund. At October 31, 2003,
the value of invested plan amounts was less than $1. Invested plan amounts and
the total liability for deferred compensation to the Trustees under the Plan at
October 31, 2003, are included in Net assets in the accompanying Statement of
Assets and Liabilities.
NOTE 3. INVESTMENT TRANSACTIONS
The cost of securities purchased and proceeds from securities sold (excluding
short-term securities) for the year ended October 31, 2003, were as follows:
Purchases of securities:
Long-Term excluding U.S. Government $ 57,489
U.S. Government -
Proceeds from maturities and sales of securities:
Long-Term excluding U.S. Government 7,031
U.S. Government -
NOTE 4. FEDERAL INCOME TAX MATTERS
The Fund has not made any provision for federal income or excise taxes due to
its policy to distribute all of its taxable income and capital gains to its
shareholders and otherwise qualify as a regulated investment company under the
Internal Revenue Code. Income and capital gain distributions are determined in
accordance with income tax regulations, which may differ from GAAP. These
differences are primarily due to differing treatments for items including, but
not limited to, wash sales, foreign currency transactions, net operating losses
and capital loss carryforwards.
Reclassifications between Undistributed net investment income (loss),
Undistributed net realized capital gains (loss) and Shares of beneficial
interest are made to reflect income and gains available for distribution under
federal tax regulations. Results of operations and net assets are not effected
by these reclassifications. These reclassifications are as follows:
Shares of beneficial interest, unlimited
shares authorized $ -
Accumulated net investment income (loss) 416
Undistributed net realized gain (loss) from
investment securities and option contracts (416)
The tax basis components of distributable earnings as of October 31, 2003, are
as follows:
Undistributed Ordinary Income $ 285
=======
Undistributed Long-term Capital Gains $ 198
=======
Capital Loss Carryforward $ -
=======
Net Unrealized Appreciation (Depreciation) $ 2,933
=======
The capital loss carryforward utilized as of October 31, 2003 was $68. The
aggregate cost of investments and composition of unrealized appreciation
(depreciation) for federal income tax purposes as of October 31, 2003, are as
follows:
Federal Tax Cost Basis $ 60,317
=======
Unrealized Appreciation $ 5,014
Unrealized (Depreciation) (1,931)
-------
Net Unrealized Appreciation (Depreciation) $ 2,933
=======
IDEX Mutual Funds Annual Report 2003
IDEX T. Rowe Price Health Sciences 13
- --------------------------------------------------------------------------------
Report of Independent Certified Public Accountants
To the Board of Trustees and Shareholders of
IDEX T. Rowe Price Health Sciences
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of IDEX T. Rowe Price Health Sciences
(the "Fund") (one of the portfolios constituting the IDEX Mutual Funds) at
October 31, 2003, and the results of its operations, the changes in its net
assets and the financial highlights for each of the periods indicated, in
conformity with accounting principles generally accepted in the United States of
America. These financial statements and financial highlights (hereafter referred
to as "financial statements") are the responsibility of the Fund's management;
our responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these financial statements in
accordance with auditing standards generally accepted in the United States of
America, which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at October 31, 2003 by
correspondence with the custodian and brokers, provide a reasonable basis for
our opinion.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Tampa, Florida
December 18, 2003
IDEX Mutual Funds Annual Report 2003
IDEX T. Rowe Price Health Sciences 14
IDEX T. Rowe Price Small Cap
- --------------------------------------------------------------------------------
MARKET ENVIRONMENT
The U.S. economy has improved dramatically over the last year, growing at a
revised annualized rate of 8.2% in the third quarter of 2003 -- the fastest rate
of growth in nearly two decades -- versus 3.3% in the second quarter and 1.6%
and 1.4% in each of the previous two quarters. The manufacturing and service
sectors are again expanding, productivity is increasing, and consumer spending
remains buoyant. However, weekly jobless claims remained high for most of the
period and the unemployment rate remained stubbornly at or above 6%. There have
been signs of job market stabilization in recent weeks, which is not unusual
since job growth seldom occurs early in an economic recovery.
Supported by an unprecedented combination and magnitude of forces to stimulate
the economy, including tax and interest rate cuts, heightened government
spending, and a weaker U.S. dollar, stocks surged in the last twelve months
after falling to multi-year lows in October 2002. In the small-cap growth
universe, all major sectors advanced except for the energy sector, which
struggled as oil prices sagged following the Iraq war. Information technology
shares fared best, particularly semiconductor-related companies. Consumer
discretionary shares performed well led by specialty retailers and restaurants.
Industrials and business services companies were also strong, particularly
education-related businesses. Health care stocks produced solid gains, led by
health care providers and service companies. Other noteworthy developments
include a pickup in both initial public offerings ("IPO"s) and merger activity.
PERFORMANCE
For the year ended October 31, 2003, IDEX T. Rowe Price Small Cap returned
35.50%. By comparison its benchmark, the Russell 2000 Index, returned 43.37%.
Our underperformance reflects our bias toward higher-quality companies, which
lagged more speculative issues as investors abandoned risk aversion.
Small-cap growth stocks rose strongly and outperformed other investment styles
in the one-year period ended October 31, 2003.
STRATEGY REVIEW
In the information technology sector (28.2% of fund assets at the end of
October), semiconductor stocks were our best performers over the last year.
In the consumer discretionary sector (18.6% of fund assets at the end of
October), specialty retailers were among our largest contributors. In contrast,
media stocks generally disappointed.
Industrial and business services companies (13.8% of assets) fared quite well in
the last twelve months. Education-related stocks also earned high marks among
investors. These companies have benefited from rising tuition costs, as well as
increased demand from workers who are seeking to upgrade their skills and
enhance their career prospects.
The health care sector (21.4% of assets) was our second largest at the end of
October. Health care providers and service companies were some of our best
performers in the last twelve months. Biotechnology firms generally performed
well, but we eliminated several in the last year, most notably NPS
Pharmaceuticals, Inc. and Enzon Pharmaceuticals, Inc. following the collapse of
their merger agreement in June.
/s/ Paul W. Wojcik
Paul W. Wojcik
Fund Manager
T. Rowe Price Associates, Inc.
IDEX Mutual Funds Annual Report 2003
IDEX T. Rowe Price Small Cap 1
IDEX T. Rowe Price Small Cap
- --------------------------------------------------------------------------------
Comparison of change in value of $10,000 investment in Class A shares and its
comparative index.
Growth of $10,000
Inception of 3/1/99 through 10/31/03
Investment less sales charges - $9,452
[The following table was depicted as a mountain chart in the printed material.]
DATE Class A Russell 2000
- ---------- ------------ -----------------
3/1/1999 9,452 10,000
3/31/1999 9,483 10,156
6/30/1999 10,605 11,736
9/30/1999 10,323 10,994
12/31/1999 13,026 13,021
3/31/2000 14,485 13,944
6/30/2000 13,871 13,417
9/30/2000 13,327 13,565
12/31/2000 11,835 12,628
3/31/2001 9,479 11,806
6/30/2001 11,342 13,493
9/30/2001 8,502 10,688
12/31/2001 10,627 12,942
3/31/2002 10,523 13,457
6/30/2002 8,825 12,333
9/30/2002 7,141 9,694
12/31/2002 7,673 10,291
3/31/2003 7,374 9,829
6/30/2003 8,971 12,131
9/30/2003 9,503 13,232
10/31/2003 10,267 14,344
Average Annual Total Return for Periods Ended 10/31/03
- --------------------------------------------------------------------------------
From Inception
1 year Inception Date
- --------------------------------------------------------------------------------
Class A (NAV) 35.50% 1.79% 3/1/99
Class A (POP) 28.05% 0.56% 3/1/99
Russell 2000(1) 43.37% 8.02% 3/1/99
- --------------------------------------------------------------------------------
Class B (NAV) 34.73% 1.10% 3/1/99
Class B (POP) 29.73% 0.90% 3/1/99
- --------------------------------------------------------------------------------
Class C (NAV) 34.73% -1.03% 11/1/99
- --------------------------------------------------------------------------------
Class L (NAV) - 36.70% 11/11/02
Class L (POP) - 34.70% 11/11/02
- --------------------------------------------------------------------------------
Class M (NAV) 34.86% 1.21% 3/1/99
Class M (POP) 32.51% 0.99% 3/1/99
- --------------------------------------------------------------------------------
NOTES
(1) The Russell 2000 (Russell 2000) 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 Micropal(R)(C) 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 shares, (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.
Investing in small cap stocks generally involves greater risks and volatility so
an investment in this fund may not be suitable for everyone.
Periods less than 1 year represent total return and are not annualized.
This material must be preceded or accompanied by a current prospectus, which
includes specific contents regarding the investment objectives and policies of
this fund.
IDEX Mutual Funds Annual Report 2003
IDEX T. Rowe Price Small Cap 2
IDEX T. Rowe Price Small Cap
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
At October 31, 2003
(all amounts except share amounts in thousands)
Shares Value
- -----------------------------------------------------------------------------------
COMMON STOCKS (98.0%)
Air Transportation (1.4%)
ExpressJet Holdings, Inc. (a) 16,100 $ 246
Frontier Airlines, Inc. (a) 44,500 715
Mesa Air Group, Inc. (a)(b) 15,200 164
SkyWest, Inc. 25,600 473
Amusement & Recreation Services (1.2%)
Alliance Gaming Corporation (a) 20,700 502
Argosy Gaming Company (a) 5,700 136
International Speedway
Corporation-Class A 1,700 72
Mandalay Resort Group 6,500 255
Station Casinos, Inc. 6,000 179
Westwood One, Inc. (a) 5,800 174
Apparel & Accessory Stores (2.2%)
American Eagle Outfitters, Inc. (a) 7,300 117
AnnTaylor, Inc. (a) 10,950 392
Christopher & Banks Corporation 24,300 710
Hot Topic, Inc. (a)(b) 9,000 258
Pacific Sunwear of California, Inc. (a)(b) 16,350 378
Ross Stores, Inc. 9,900 495
Talbots, Inc. (The) 3,400 112
Apparel Products (0.5%)
Too, Inc. (a)(b) 32,500 536
Auto Repair, Services & Parking (0.4%)
Dollar Thrifty Automotive Group, Inc. (a) 16,500 432
Automotive (1.0%)
Gentex Corporation (b) 13,400 523
Oshkosh Truck Corporation 12,700 582
Automotive Dealers & Service Stations (1.0%)
Group 1 Automotive, Inc. (a) 10,500 372
O'Reilly Automotive, Inc. (a) 16,400 710
Sonic Automotive, Inc. 3,200 73
Beverages (0.2%)
Boston Beer Company, Inc. (The)-Class A (a) 12,800 219
Business Services (3.3%)
Catalina Marketing Corporation (a)(b) 4,000 71
ChoicePoint Inc. (a) 17,600 617
Digital Insight Corporation (a) 34,800 730
Fair, Isaac and Company, Incorporated (b) 14,970 956
Getty Images, Inc. (a) 8,800 393
Rent-A-Center, Inc. (a) 16,950 530
Valassis Communications, Inc. (a)(b) 4,700 122
Websense, Inc. (a) 12,700 297
Chemicals & Allied Products (0.3%)
ATMI, Inc. (a)(b) 14,600 336
Shares Value
- -----------------------------------------------------------------------------------
Commercial Banks (2.7%)
Boston Private Financial Holdings, Inc. 21,300 $ 543
Commerce Bancorp, Inc. (b) 6,150 297
Community First Bankshares, Inc. 9,800 266
East West Bancorp, Inc. 7,300 358
Silicon Valley Bancshares (a)(b) 9,400 330
Southwest Bancorporation of Texas, Inc. 11,700 420
Sterling Bancshares, Inc. 12,700 146
UCBH Holdings, Inc. 19,000 678
Communication (0.4%)
Global Payments Inc. 8,980 374
Insight Communications Company, Inc. (a)(b) 12,300 119
Communications Equipment (2.4%)
Advanced Fibre Communications, Inc. (a) 22,900 551
Anaren Microwave, Inc. (a) 14,900 211
Centillium Communications, Inc. (a) 92,200 494
Inter-Tel, Incorporated 23,200 584
Plantronics, Inc. (a) 26,000 723
Powerwave Technologies, Inc. (a) 21,200 138
Proxim Corporation-Class A (a) 25,860 38
Computer & Data Processing Services (8.7%)
Activision, Inc. (a) 22,200 335
Actuate Corporation (a) 44,800 159
Affiliated Computer Services, Inc.-
Class A (a)(b) 4,000 196
BARRA, Inc. (a) 13,450 511
Borland Software Corporation (a) 38,100 338
CACI International Inc.-Class A (a) 10,800 535
Cognizant Technology Solutions
Corporation (a) 3,000 136
Computer Programs and Systems, Inc. 46,100 771
Concord Communications, Inc. (a) 10,900 195
EarthLink, Inc. (a) 38,900 356
EPIQ Systems, Inc. (a)(b) 6,500 110
FactSet Research Systems Inc. (b) 14,900 650
Henry (Jack) & Associates, Inc. 15,700 314
Hyperion Solutions Corporation (a) 16,400 549
Informatica Corporation (a) 19,100 208
InterCept, Inc. (a)(b) 12,200 120
Macromedia, Inc. (a) 4,200 80
MatrixOne, Inc. (a) 15,900 88
Mercury Interactive Corporation (a)(b) 1,500 70
MTC Technologies, Inc. (a) 15,300 448
National Instruments Corporation 9,000 383
Netegrity, Inc. (a) 18,350 218
Network Associates, Inc. (a) 10,400 145
Packeteer, Inc. (a) 25,800 451
Radiant Systems, Inc. (a) 17,550 117
Red Hat, Inc. (a)(b) 14,300 215
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX T. Rowe Price Small Cap 3
IDEX T. Rowe Price Small Cap
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Shares Value
- --------------------------------------------------------------------------------
Computer & Data Processing Services (continued)
SERENA Software, Inc. (a) 33,500 $ 578
SkillSoft PLC-ADR (a) 9,900 79
SRA International, Inc.-Class A (a) 16,700 727
Symantec Corporation (a) 5,700 380
Titan Corporation (The) (a) 11,300 239
Computer & Office Equipment (1.8%)
Avocent Corporation (a) 12,800 484
Maxtor Corporation (a)(b) 16,500 226
Polycom, Inc. (a) 25,306 507
SanDisk Corporation (a)(b) 10,700 862
Construction (1.4%)
D.R. Horton, Inc. 5,927 236
Insituform Technologies, Inc.-Class A (a) 16,400 235
M.D.C. Holdings, Inc. 6,740 454
Standard Pacific Corp. 3,600 172
Toll Brothers, Inc. (a) 13,200 486
Drug Stores & Proprietary Stores (0.7%)
Omnicare, Inc. 21,600 828
Educational Services (3.7%)
Career Education Corporation (a) 14,700 787
Corinthian Colleges, Inc. (a) 11,300 700
DeVRY Inc. (a)(b) 22,400 544
Education Management Corporation (a) 13,900 878
ITT Educational Services, Inc. (a) 8,300 413
University of Phoenix Online (a) 12,966 892
Electrical Goods (0.1%)
Hughes Supply, Inc. 2,300 89
Electronic & Other Electric Equipment (0.3%)
Harman International Industries,
Incorporated (b) 2,200 282
Electronic Components & Accessories (6.2%)
Aeroflex Incorporated (a) 69,500 645
Exar Corporation (a) 24,000 386
Integrated Circuit Systems, Inc. (a) 13,600 457
Integrated Silicon Solution, Inc. (a) 26,700 377
Intersil Corporation-Class A 27,496 709
KEMET Corporation (a) 12,500 166
Kopin Corporation (a) 17,600 129
Lattice Semiconductor Corporation (a) 19,600 153
Mercury Computer Systems, Inc. (a) 26,100 561
Micrel, Incorporated (a) 17,400 287
Microchip Technology Incorporated 2,175 71
OmniVision Technologies, Inc. (a)(b) 8,300 471
Pericom Semiconductor Corporation (a) 17,500 199
Plexus Corp. (a) 33,700 583
REMEC, Inc. (a) 10,400 115
Semtech Corporation (a) 21,600 480
Silicon Storage Technology, Inc. (a) 24,600 275
Shares Value
- -----------------------------------------------------------------------------------
Electronic Components & Accessories (continued)
Skyworks Solutions, Inc. (a)(b) 14,200 $ 122
Technitrol, Inc. (a) 17,300 377
TriQuint Semiconductor, Inc. (a) 24,426 175
Zoran Corporation (a)(b) 17,397 290
Environmental Services (0.7%)
Stericycle, Inc. (a) 9,400 434
Waste Connections, Inc. (a) 10,600 368
Fabricated Metal Products (0.2%)
Simpson Manufacturing Co., Inc. (a) 4,600 206
Food & Kindred Products (0.4%)
American Italian Pasta Company-
Class A (a)(b) 1,700 65
Horizon Organic Holding Corporation (a) 9,700 232
Peet's Coffee & Tea, Inc. (a) 6,500 109
Food Stores (0.3%)
Whole Foods Market, Inc. (a)(b) 6,000 355
Furniture & Fixtures (0.3%)
La-Z-Boy Incorporated (b) 14,400 291
Furniture & Home Furnishings Stores (1.5%)
Cost Plus, Inc. (a) 19,900 914
Pier 1 Imports, Inc. 18,200 420
Williams-Sonoma, Inc. (a) 10,900 385
Health Services (4.1%)
Accredo Health, Incorporated (a) 25,350 810
AMN Healthcare Services, Inc. (a)(b) 9,546 144
AmSurg Corp. (a) 9,400 338
Caremark Rx, Inc. (a)(b) 13,600 341
Community Health Systems, Inc. (a) 8,800 211
DaVita Inc. (a) 14,800 519
Hooper Holmes, Inc. 6,300 33
LifePoint Hospitals, Inc. (a) 20,700 532
Manor Care, Inc. 11,100 369
Odyssey HealthCare, Inc. (a) 7,500 208
Renal Care Group, Inc. (a) 7,000 263
Triad Hospitals, Inc. (a) 6,100 187
United Surgical Partners
International, Inc. (a)(b) 21,600 651
Holding & Other Investment Offices (0.2%)
4Kids Entertainment, Inc. (a) 1,700 42
Redwood Trust, Inc. 2,700 134
Industrial Machinery & Equipment (3.6%)
Cooper Cameron Corporation (a) 1,600 69
Cymer, Inc. (a)(b) 14,300 653
Engineered Support Systems, Inc. 12,900 872
FMC Technologies, Inc. (a) 8,800 177
National-Oilwell, Inc. (a) 11,900 227
Oil States International, Inc. (a) 19,600 240
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX T. Rowe Price Small Cap 4
IDEX T. Rowe Price Small Cap
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Shares Value
- -------------------------------------------------------------------------------------
Industrial Machinery & Equipment (continued)
Varco International Inc. (a) 13,400 $ 236
Varian Semiconductor Equipment
Associates, Inc. (a) 15,200 735
Zebra Technologies Corporation-Class A (a) 15,700 895
Instruments & Related Products (4.6%)
August Technology Corporation (a) 10,100 196
Avid Technology, Inc. (a)(b) 10,600 548
Cognex Corporation 13,500 362
Coherent, Inc. (a) 7,700 177
Cohu, Inc. 12,700 255
Cytyc Corporation (a) 13,500 175
Dionex Corporation (a) 11,550 491
FLIR Systems, Inc. (a)(b) 18,200 569
Fossil, Inc. (a) 9,487 256
Herley Industries, Inc. (a) 12,900 244
Mettler-Toledo International Inc. (a) 4,200 161
MKS Instruments, Inc. (a)(b) 2,043 53
Newport Corporation (a) 3,400 54
Pinnacle Systems, Inc. (a) 48,000 334
Rudolph Technologies, Inc. (a)(b) 6,900 180
SBS Technologies, Inc. (a) 14,200 195
STAAR Surgical Company (a) 29,800 295
Varian, Inc. (a) 17,700 634
Insurance (3.6%)
Coventry Health Care, Inc. (a) 12,800 701
First Health Group Corp. (a) 29,100 710
Max Re Capital Ltd. 20,200 373
PMI Group, Inc. (The) (b) 5,600 214
RenaissanceRe Holdings Ltd. (b) 12,100 544
StanCorp Financial Group, Inc. 6,500 410
Triad Guaranty Inc. (a) 14,900 735
WellChoice, Inc. (a) 12,100 393
Insurance Agents, Brokers & Service (0.6%)
AdvancePCS (a) 7,800 401
Brown & Brown, Inc. 8,700 265
Gallagher (Arthur J.) & Co. 1,300 38
Leather & Leather Products (0.3%)
Skechers U.S.A., Inc.-Class A (a) 4,200 32
Timberland Company (The)-Class A (a) 5,300 275
Management Services (1.7%)
Advisory Board Company (The) (a) 9,400 342
Corporate Executive Board
Company (The) (a) 22,100 1,127
Exult, Inc. (a)(b) 54,900 435
Manufacturing Industries (0.4%)
JAKKS Pacific, Inc. (a)(b) 20,900 272
Marvel Enterprises, Inc. (a)(b) 4,300 127
Shares Value
- -------------------------------------------------------------------------------------
Medical Instruments & Supplies (3.5%)
Advanced Neuromodulation Systems, Inc. (a)(b) 3,000 $ 123
Apogent Technologies, Inc. (a) 12,800 281
Conceptus, Inc. (a)(b) 5,300 65
Cyberonics, Inc. (a) 2,200 60
DENTSPLY International Inc. 9,050 400
ICU Medical, Inc. (a)(b) 16,100 544
INAMED Corporation (a) 6,700 579
Mentor Corporation 5,300 107
Respironics, Inc. (a) 15,500 646
STERIS Corporation (a) 35,200 733
Thoratec Corporation (a) 24,800 382
Mortgage Bankers & Brokers (0.4%)
Doral Financial Corporation 8,950 452
Motion Pictures (0.9%)
CNET Networks, Inc. (a) 20,700 168
Macrovision Corporation (a) 39,800 874
Oil & Gas Extraction (4.2%)
Atwood Oceanics, Inc. (a) 1,300 34
Brown (Tom), Inc. (a) 21,700 586
Cabot Oil & Gas Corporation-Class A 11,900 304
Cal Dive International, Inc. (a) 23,600 489
Core Laboratories NV (a) 4,200 64
Evergreen Resources, Inc. (a)(b) 16,400 450
Global Industries, Ltd. (a) 41,700 193
Grey Wolf, Inc. (a) 151,200 485
Helmerich & Payne, Inc. (b) 9,700 257
Key Energy Services, Inc. (a) 4,600 40
Patterson-UTI Energy, Inc. (a) 17,400 497
Pride International, Inc. (a)(b) 5,600 92
Spinnaker Exploration Company (a) 15,100 386
Stone Energy Corporation (a) 11,800 426
Unit Corporation (a) 23,200 450
Personal Credit Institutions (0.1%)
First Marblehead Corporation (a) 5,700 126
Pharmaceuticals (8.4%)
Abgenix, Inc. (a) 16,000 196
Albany Molecular Research, Inc. (a) 19,700 290
Alkermes, Inc. (a) 13,200 171
Andrx Corporation-Andrx Group (a)(b) 7,400 147
Celgene Corporation (a) 10,100 421
Cephalon, Inc. (a)(b) 6,624 311
Charles River Laboratories, Inc. (a) 19,900 642
Digene Corporation (a) 8,200 289
Eon Labs, Inc. (a) 12,200 514
Gilead Sciences, Inc. (a) 5,300 289
Human Genome Sciences, Inc. (a) 17,700 246
ICOS Corporation (a)(b) 10,600 495
IDEXX Laboratories, Inc. (a)(b) 4,100 194
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX T. Rowe Price Small Cap 5
IDEX T. Rowe Price Small Cap
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Shares Value
- -----------------------------------------------------------------------------------
Pharmaceuticals (continued)
Invitrogen Corporation (a)(b) 9,200 $ 585
K-V Pharmaceutical Company-
Class A (a)(b) 19,150 460
Martek Biosciences Corp. (a)(b) 6,000 290
Medicis Pharmaceutical
Corporation-Class A (b) 11,400 722
Neurocrine Biosciences, Inc. (a) 11,500 539
Noven Pharmaceuticals, Inc. (a) 34,800 351
Pharmaceutical Resources, Inc. (a) 4,500 325
Priority Healthcare Corporation-Class B (a) 18,600 402
Protein Design Labs, Inc. (a)(b) 11,400 154
SICOR Inc. (a) 14,000 375
Taro Pharmaceutical Industries Ltd. (a) 9,100 585
Techne Corporation (a) 12,200 425
Vertex Pharmaceuticals Incorporated (a) 7,694 101
Primary Metal Industries (0.5%)
Lone Star Technologies, Inc. (a) 10,000 139
Maverick Tube Corporation (a) 23,000 388
Printing & Publishing (0.6%)
Scholastic Corporation (a) 23,300 721
Radio & Television Broadcasting (1.5%)
Cox Radio, Inc.-Class A (a) 17,100 378
Emmis Communications
Corporation-Class A (a) 14,800 328
Entercom Communications Corp. (a) 1,600 73
Radio One, Inc.-Class D (a) 34,300 545
Regent Communications, Inc. (a) 20,700 124
Spanish Broadcasting System, Inc. (a) 25,400 229
Radio, Television & Computer Stores (0.3%)
GameStop Corp. (a) 6,000 101
Tweeter Home Entertainment Group, Inc. (a) 19,700 164
Ultimate Electronics, Inc. (a) 3,200 29
Research & Testing Services (1.2%)
Forrester Research, Inc. (a) 26,100 445
Pharmaceutical Product
Development, Inc. (a) 15,400 463
Symyx Technologies, Inc. (a) 21,500 455
Restaurants (2.7%)
CEC Entertainment Inc. (a)(b) 15,000 734
Cheesecake Factory
Incorporated (The) (a)(b) 10,000 399
P.F. Chang's China Bistro, Inc. (a)(b) 15,000 731
RARE Hospitality International, Inc. (a) 19,700 489
Ruby Tuesday, Inc. 14,500 397
Sonic Corp. (a)(b) 11,850 330
Retail Trade (1.5%)
A.C. Moore Arts & Crafts, Inc. (a) 16,600 384
Insight Enterprises, Inc. (a) 27,300 459
Shares Value
- -----------------------------------------------------------------------------------
Retail Trade (continued)
Michaels Stores, Inc. 8,200 $ 389
PETsMART, Inc. 12,000 307
Schein (Henry), Inc. (a) 2,500 155
Rubber & Misc. Plastic Products (0.6%)
Entegris, Inc. (a) 33,400 440
VANS, INC. (a) 16,700 188
Savings Institutions (0.3%)
IndyMac Bancorp, Inc. 9,700 285
Security & Commodity Brokers (2.2%)
Affiliated Managers Group, Inc. (a)(b) 9,600 696
Eaton Vance Corp. 9,500 331
Investment Technology Group, Inc. (a)(b) 12,300 244
Investors Financial Services Corp. 17,600 622
Legg Mason, Inc. (b) 2,800 233
Waddell & Reed Financial, Inc.-Class A 14,950 332
Social Services (0.5%)
Bright Horizons Family Solutions, Inc. (a) 13,300 571
Stone, Clay & Glass Products (0.3%)
Cabot Microelectronics Corporation (a)(b) 5,373 306
Telecommunications (0.8%)
Nextel Partners, Inc.-Class A (a)(b) 70,000 841
NII Holdings, Inc. (a) 1,400 108
Transportation & Public Utilities (1.2%)
Expeditors International of
Washington, Inc. 1,500 56
Forward Air Corporation (a) 22,100 643
UTI Worldwide, Inc. 18,900 655
Trucking & Warehousing (1.2%)
Covenant Transport, Inc.-Class A (a) 14,700 280
Iron Mountain Incorporated (a) 23,350 894
Swift Transportation Co., Inc. (a)(b) 9,400 211
Variety Stores (0.6%)
Dollar Tree Stores, Inc. (a) 7,800 298
Family Dollar Stores, Inc. 3,600 157
Fred's, Inc. 7,150 269
Wholesale Trade Durable Goods (1.4%)
Patterson Dental Company (a)(b) 11,500 736
SCP Pool Corporation (a)(b) 24,587 861
Wholesale Trade Nondurable Goods (0.7%)
Performance Food Group Company (a)(b) 8,400 313
United Natural Foods, Inc. (a) 12,600 487
---------
Total Common Stocks (cost: $96,427) 110,414
---------
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX T. Rowe Price Small Cap 6
IDEX T. Rowe Price Small Cap
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Principal Value
- -------------------------------------------------------------------------
SHORT-TERM U.S. GOVERNMENT OBLIGATIONS (0.0%)
U.S. Treasury Bill (d)
0.92%, due 12/18/2003 $ 50 $ 50
---------
Total Short-Term U.S. Government Obligations (cost: $50) 50
---------
SECURITY LENDING COLLATERAL (18.1%)
Debt (15.9%)
Bank Notes (1.9%)
Canadian Imperial Bank of Commerce
1.12%, due 11/04/2003 886 886
Fleet National Bank
1.06%, due 01/21/2004 1,240 1,240
Euro Dollar Terms (9.0%)
Bank of Montreal
1.03%, due 11/13/2003 709 709
1.04%, due 11/14/2003 622 622
Bank of Nova Scotia (The)
1.06%, due 11/12/2003 354 354
Bank of Scotland
1.04%, due 11/14/2003 709 709
Citigroup Inc.
1.08%, due 01/05/2004 1,063 1,063
Credit Agricole Indosuez
1.08%, due 01/06/2004 780 780
Den Danske Bank
1.04%, due 11/10/2003 354 354
1.08%, due 01/20/2004 1,063 1,063
Royal Bank of Canada
1.04%, due 11/24/2003 886 886
1.06%, due 12/08/2003 354 354
Royal Bank of Scotland Group PLC (The)
1.08%, due 01/15/2004 1,063 1,063
Principal Value
- -------------------------------------------------------------------------
Euro Dollar Terms (continued)
SouthTrust Bank
1.08%, due 01/16/2004 $ 1,063 $ 1,063
Wells Fargo & Company
1.04%, due 11/20/2003 1,063 1,063
Promissory Notes (1.1%)
Goldman Sachs Group, Inc. (The)
1.15%, due 11/03/2003 1,240 1,240
Repurchase Agreements (3.9%) (c)
Goldman Sachs Group, Inc. (The)
1.10% Repurchase Agreement dated
10/31/2003 to be repurchased at $354
on 11/03/2003 354 354
Merrill Lynch & Co., Inc.
1.10% Repurchase Agreement dated
10/31/2003 to be repurchased at $4,076
on 11/03/2003 4,076 4,076
Shares Value
- --------------------------------------------------------------------------
Investment Companies (2.2%)
Money Market Funds (2.2%)
Merrimac Cash Series Fund-
Premium Class
1-day yield of 0.97% 2,480,527 $ 2,481
---------
Total Security Lending Collateral (cost: $20,360) 20,360
---------
Total Investment Securities (cost: $116,837) $ 130,824
=========
SUMMARY:
Investments, at value 116.1 % $ 130,824
Liabilities in excess of other assets (16.1)% (18,163)
--------- ---------
Net assets 100.0 % $ 112,661
========= =========
FUTURES CONTRACTS:
- ----------------------------------------------------------------------
Net Unrealized
Settlement Apprecation
Contracts Date Amount (Depreciation)
- ----------------------------------------------------------------------
Russell 2000 Index 2 12/18/2003 $ 511 $ 17
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 (see Note
1). The value at October 31, 2003, of all securities on loan is $19,650.
(c) Cash collateral for the Repurchase Agreements, valued at $4,518, 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.
(d) At October 31, 2003, all or a portion of this security is segregated with
the custodian to cover margin requirements for open futures contracts. The
value of all securities segregated at October 31, 2003, is $50.
DEFINITIONS:
ADR American Depositary Receipt
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX T. Rowe Price Small Cap 7
IDEX T. Rowe Price Small Cap
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
At October 31, 2003
(all amounts except per share amounts in thousands)
Assets:
Investment securities, at value (cost: $116,837)
(including $19,650 of securities loaned) $ 130,824
Cash 2,539
Receivables:
Shares of beneficial interest sold 996
Interest 1
Dividends 11
Other 17
---------
134,388
---------
Liabilities:
Investment securities purchased 937
Accounts payable and accrued liabilities:
Shares of beneficial interest redeemed 193
Management and advisory fees 126
Distribution fees 40
Transfer agent fees 24
Variation margin 3
Payable for securities on loan 20,360
Other 44
---------
21,727
---------
Net Assets $ 112,661
=========
Net Assets Consist of:
Shares of beneficial interest, unlimited shares authorized $ 106,469
Undistributed net investment income (loss) -
Accumulated net realized gain (loss) from investment
securities and futures contracts (7,811)
Net unrealized appreciation (depreciation) on:
Investment securities 13,986
Futures contracts 17
---------
Net Assets $ 112,661
=========
Shares Outstanding:
Class A 8,954
Class B 1,189
Class C 235
Class L 61
Class M 229
Net Asset Value Per Share:
Class A $ 10.61
Class B 10.28
Class C 10.28
Class L 10.28
Class M 10.33
Maximum Offering Price Per Share (a):
Class A $ 11.23
Class M 10.43
(a) 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.
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the year ended October 31, 2003
(all amounts in thousands)
Investment Income:
Interest $ 6
Dividends 75
Income from loaned securities-net 11
--------
92
--------
Expenses:
Management and advisory fees 368
Transfer agent fees 167
Printing and shareholder reports 25
Custody fees 43
Administration fees 32
Legal fees 2
Auditing and accounting fees 20
Trustees fees 3
Registration fees 64
Other 3
Distribution and service fees:
Class A 113
Class B 96
Class C 21
Class L 2
Class M 15
--------
Total expenses 974
Less:
Advisory fee waiver (85)
--------
Net expenses 889
--------
Net Investment Income (Loss) (797)
--------
Net Realized Gain (Loss) from:
Investment securities (1,328)
Futures contracts 95
--------
(1,233)
--------
Net Increase (Decrease) in Unrealized Appreciation
(Depreciation) on:
Investment securities 18,595
Futures contracts 17
--------
18,612
--------
Net Gain (Loss) on Investment Securities and Futures
Contracts 17,379
--------
Net Increase (Decrease) in Net Assets Resulting from
Operations $ 16,582
========
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX T. Rowe Price Small Cap 8
IDEX T. Rowe Price Small Cap
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended
(all amounts in thousands)
October 31, October 31,
2003 2002
----------- -----------
Increase (Decrease) In Net Assets From:
Operations:
Net investment income (loss) $ (797) $ (465)
Net realized gain (loss) from investment
securities and futures contracts (1,233) (4,374)
Net unrealized appreciation
(depreciation) on investment
securities and futures contracts 18,612 (148)
--------- --------
16,582 (4,987)
--------- --------
Distributions to Shareholders:
From net investment income:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
--------- --------
- -
--------- --------
From net realized gains:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
--------- --------
- -
--------- --------
Capital Share Transactions:
Proceeds from shares sold:
Class A 80,987 6,591
Class B 3,085 5,590
Class C 548 1,472
Class L 692 -
Class M 1,395 630
--------- --------
86,707 14,283
--------- --------
Dividends and distributions reinvested:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
--------- --------
- -
--------- --------
Cost of shares redeemed:
Class A (4,857) (5,379)
Class B (2,700) (3,855)
Class C (740) (932)
Class L (127) -
Class M (1,073) (928)
--------- --------
(9,497) (11,094)
--------- --------
77,210 3,189
--------- --------
Net increase (decrease) in net assets 93,792 (1,798)
--------- --------
Net Assets:
Beginning of year 18,869 20,667
--------- --------
End of year $ 112,661 $ 18,869
========= ========
Undistributed Net Investment Income (Loss) $ - $ -
========= ========
October 31, October 31,
2003 2002
----------- -----------
Share Activity:
Shares issued:
Class A 8,673 663
Class B 350 572
Class C 63 151
Class L 75 -
Class M 155 65
--------- --------
9,316 1,451
--------- --------
Shares issued-reinvested from distributions:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
--------- --------
- -
--------- --------
Shares redeemed:
Class A (547) (582)
Class B (322) (433)
Class C (87) (101)
Class L (14) -
Class M (128) (95)
--------- --------
(1,098) (1,211)
--------- --------
Net increase (decrease) in shares
outstanding 8,218 240
========= ========
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX T. Rowe Price Small Cap 9
IDEX T. Rowe Price Small Cap
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share of beneficial interest outstanding throughout each period
------------------------------------------------------------------------------------------------------------
Investment Operations Distributions
------------------------------------------ -------------------------------------
Net Asset Net Asset
For the Value, Net Net Realized From Net From Net Value,
Period Beginning Investment and Unrealized Total Investment Realized Total End
Ended (d)(g) of Period Income (Loss) Gain (Loss) Operations Income Gains Distributions of Period
- -----------------------------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 $ 7.83 $ (0.15) $ 2.93 $ 2.78 $ - $ - $ - $ 10.61
10/31/2002 9.46 (0.16) (1.47) (1.63) - - - 7.83
10/31/2001 13.17 (0.14) (3.56) (3.70) - (0.01) (0.01) 9.46
10/31/2000 11.01 (0.07) 2.51 2.44 - (0.28) (0.28) 13.17
10/31/1999 10.00 0.02 0.99 1.01 - - - 11.01
- -----------------------------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 7.63 (0.19) 2.84 2.65 - - - 10.28
10/31/2002 9.29 (0.22) (1.44) (1.66) - - - 7.63
10/31/2001 13.05 (0.21) (3.54) (3.75) - (0.01) (0.01) 9.29
10/31/2000 10.97 (0.15) 2.51 2.36 - (0.28) (0.28) 13.05
10/31/1999 10.00 (0.02) 0.99 0.97 - - - 10.97
- -----------------------------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 7.63 (0.19) 2.84 2.65 - - - 10.28
10/31/2002 9.29 (0.21) (1.45) (1.66) - - - 7.63
10/31/2001 13.05 (0.24) (3.51) (3.75) - (0.01) (0.01) 9.29
10/31/2000 10.97 (0.15) 2.51 2.36 - (0.28) (0.28) 13.05
- -----------------------------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 7.52 (0.20) 2.96 2.76 - - - 10.28
- -----------------------------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 7.66 (0.18) 2.85 2.67 - - - 10.33
10/31/2002 9.31 (0.19) (1.46) (1.65) - - - 7.66
10/31/2001 13.07 (0.20) (3.55) (3.75) - (0.01) (0.01) 9.31
10/31/2000 10.98 (0.14) 2.51 2.37 - (0.28) (0.28) 13.07
10/31/1999 10.00 (0.01) 0.99 0.98 - - - 10.98
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
----------------------------------------------------------------------
Ratio of Expenses
Net Assets, to Average Net Investment
For the End of Net Assets (a) Income (Loss) Portfolio
Period Total Period ----------------------- to Average Turnover
Ended (g) Return (c) (000's) Net (e) Total (f) Net Assets (a) Rate (b)
- -------------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 35.50% $ 95,018 1.75% 1.93% (1.55)% 25%
10/31/2002 (17.22) 6,487 1.74 2.67 (1.52) 55
10/31/2001 (28.11) 7,067 1.55 2.56 (1.30) 49
10/31/2000 22.31 8,262 1.55 2.83 (1.14) 53
10/31/1999 10.13 1,272 1.55 7.93 (1.15) 43
- -------------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 34.73 12,227 2.40 2.58 (2.20) 25
10/31/2002 (17.85) 8,860 2.39 3.32 (2.17) 55
10/31/2001 (28.73) 9,496 2.20 3.21 (1.95) 49
10/31/2000 21.63 8,119 2.20 3.48 (1.79) 53
10/31/1999 9.70 1,135 2.20 8.58 (1.80) 43
- -------------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 34.73 2,417 2.40 2.58 (2.20) 25
10/31/2002 (17.85) 1,975 2.39 3.32 (2.17) 55
10/31/2001 (28.73) 1,943 2.20 3.21 (1.95) 49
10/31/2000 21.63 1,626 2.20 3.48 (1.79) 53
- -------------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 36.70 628 2.40 2.58 (2.20) 25
- -------------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 34.86 2,371 2.30 2.48 (2.10) 25
10/31/2002 (17.76) 1,547 2.29 3.22 (2.07) 55
10/31/2001 (28.64) 2,161 2.10 3.11 (1.85) 49
10/31/2000 21.73 2,489 2.10 3.38 (1.69) 53
10/31/1999 9.77 685 2.10 8.48 (1.70) 43
- -------------------------------------------------------------------------------------------------------------------
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX T. Rowe Price Small Cap 10
IDEX T. Rowe Price Small Cap
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (continued)
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 are not annualized.
(d) Per share information is calculated based on average number of shares
outstanding for the periods ended 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 (see note 2).
(f) Ratio of Total Expenses to Average Net Assets includes all expenses before
fee waivers and reimbursements by the investment adviser.
(g) IDEX T. Rowe Price Small Cap ("the Fund") commenced operations on March 1,
1999. The inception date for the Fund's offering of share classes C and L
are as follows:
Class C - November 1, 1999
Class L - November 11, 2002
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX T. Rowe Price Small Cap 11
IDEX T. Rowe Price Small Cap
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
At October 31, 2003
(all amounts in thousands)
NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
IDEX Mutual Funds is a Massachusetts business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company. IDEX T. Rowe Price Small Cap ("the Fund"), part
of IDEX Mutual Funds, began operations on March 1, 1999.
In the normal course of business, the Fund enters into contracts that contain a
variety of representations and warranties and which provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown, as this would involve future claims that may be made against the Fund
and/or its affiliates that have not yet occurred. However, based on experience,
the Fund expects the risk of loss to be remote.
See the Prospectus and Statement of Additional Information for a description of
the Fund's investment objective.
In preparing the Fund's financial statements in accordance with accounting
principles generally accepted in the United States of America ("GAAP"),
estimates or assumptions (which could differ from actual results) may be used
that affect reported amounts and disclosures. The following policies were
consistently followed by the Fund, in accordance with GAAP.
Multiple class operations and expenses: The Fund currently offers five classes
of shares, each with a public offering price that reflects different sales
charges, if any, and expense levels. Effective November 11, 2002, Class C and M
shares were closed to new investors. Income, non-class specific expenses and
realized and unrealized gains and losses, are allocated daily to each class,
based upon the value of shares outstanding method as permitted under Rule 18f-3
of the 1940 Act. Each class bears its own specific expenses as well as a portion
of general, common expenses.
Security valuations: Fund investments traded on an exchange are valued at the
closing price on the day of valuation on the exchange where the security is
principally traded. With respect to securities traded on the NASDAQ INMS, such
closing price may be the last reported sales price or the NASDAQ Official
Closing Price.
Securities traded in the over-the-counter market and listed securities for
which no sale was reported on that date are valued at the last quoted bid
price.
Debt securities are valued by independent pricing services; however, those that
mature in sixty days or less are valued at amortized cost, which approximates
market.
Other securities for which quotations are not readily available are valued at
fair value determined in good faith, in accordance with procedures established
by and, under the supervision of the Board of Trustees and the Fund's Valuation
Committee.
Cash: The Fund may leave cash overnight in its cash account with the custodian,
Investors Bank & Trust Company ("IBT"). IBT has been contracted on behalf of the
Fund to invest the excess cash into a savings account, which at October 31,
2003, was paying an interest rate of 0.75%.
Directed brokerage: The sub-adviser, to the extent consistent with the best
execution and usual commission rate policies and practices, may place security
transactions of the Fund with broker/dealers with which IDEX Mutual Funds has
established a Directed Brokerage Program. A Directed Brokerage Program is any
arrangement under which a broker/dealer applies a portion of the commissions
received by such broker/dealer on the security transactions to the Fund. In no
event will commissions paid by the Fund be used to pay expenses that would
otherwise be borne by any other funds within IDEX Mutual Funds, or by any other
party. Directed commissions during the year ended October 31, 2003, of $6 are
included in net realized gains in the Statement of Operations.
Securities lending: The Fund may lend securities to enhance fund earnings from
investing cash collateral received in making such loans to qualified borrowers
(typically broker/dealers). The Fund has engaged its custodian bank, IBT, as a
lending agent to administer its securities lending program. IBT earned $4 of
program net income for its services. When the Fund makes a security loan, it
receives cash collateral as protection against the risk that the borrower will
default on the loan, and records an asset for the cash invested collateral and a
liability for the return of the collateral.
Securities on loan are included in Investment securities at value on the
Statement of Assets and Liabilities and remain on the Schedule of Investments.
Loans of securities are required to be secured by collateral at least equal to
102% of the value of the securities at inception of the loan, and not less then
100% thereafter. The Fund may invest cash collateral in short-term money market
instruments including: U.S. Treasury Bills, U.S. agency obligations, commercial
paper, money market mutual funds, repurchase agreements and other highly rated,
liquid investments. During the life of securities loans, the collateral and
securities loaned remain subject to fluctuation in value. IBT marks to market
securities loaned and the collateral each business day. If additional collateral
is due (at least $1), IBT collects additional cash collateral from the
borrowers. Although securities loaned will be fully collateralized at all times,
IBT may experience delays in, or may be prevented from, recovering the
collateral on behalf of the Fund. The Fund may recall a loaned security position
at any time from the borrower through IBT. In the event the borrower fails to
timely return a recalled security, IBT may indemnify the Fund by purchasing
replacement securities for the Fund at its own expense and claiming the
collateral to fund such a purchase. IBT absorbs the loss if the collateral value
is not sufficient to cover the cost of the replacement securities. If
replacement securities are not available, IBT will credit the equivalent cash
value to the Fund.
IDEX Mutual Funds Annual Report 2003
IDEX T. Rowe Price Small Cap 12
IDEX T. Rowe Price Small Cap
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 1-(continued)
Income from securities lending is included in the Statement of Operations. The
amount of collateral and value of securities on loan are included in the
Statement of Assets and Liabilities as well as on the Schedule of Investments.
Security transactions and investment income: Security transactions are recorded
on the trade date. Security gains and losses are calculated on the specific
identification basis. Dividend income is recorded on the ex-dividend date or, in
the case of foreign securities, as soon as the Fund is informed of the
ex-dividend date. Interest income, including accretion of discounts and
amortization of premiums, is recorded on the accrual basis commencing on the
settlement date.
Futures contracts: The Fund may enter into futures contracts to manage exposure
to market, interest rate or currency fluctuations. Futures contracts are valued
at the settlement price established each day by the board of trade or exchange
on which they are traded. The primary risks associated with futures contracts
are imperfect correlation between the change in value of the securities held and
the prices of futures contracts; the possibility of an illiquid market and
inability of the counterparty to meet the contract terms.
The underlying face amounts of open futures contracts at October 31, 2003, are
listed in the Schedule of Investments. The variation margin payable, is included
in the accompanying Statement of Assets and Liabilities. Variation margin
represents the additional payments due in order to maintain the equity account
at the required margin level.
Dividend distributions: Distributions to shareholders are recorded on the
ex-dividend date and are determined in accordance with Federal income tax
regulations which may differ from GAAP.
NOTE 2. RELATED PARTY TRANSACTIONS
AEGON/Transamerica Fund Adviser, Inc. ("ATFA") is the Fund's investment adviser.
AEGON/Transamerica Fund Services, Inc. ("ATFS") is the Fund's administrator.
AFSG Securities Corp. ("AFSG") is the Fund's distributor/principal underwriter.
AEGON/Transamerica Investor Services, Inc. ("ATIS") is the 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. AUSA and WRL
are wholly owned indirect subsidiaries of AEGON NV, a Netherlands corporation.
The following schedule reflects the percentage of fund assets owned by
affiliated mutual funds (ie: through the assets allocation funds)
Net % of
Assets Net Assets
-------- -----------
IDEX Asset Allocation
Conservative Portfolio 8,797 8%
IDEX Asset Allocation Growth 20,348 18%
IDEX Asset Allocation Moderate
Growth 32,319 29%
IDEX Asset Allocation Moderate 24,521 22%
-----
77%
Investment advisory fees: The Fund pays management fees to ATFA based on average
daily net assets ("ANA") at the following stated break points:
0.80% of the first $500 million of ANA
0.70% of ANA over $500 million
ATFA currently voluntarily waives its advisory fee and will reimburse the Fund
to the extent that operating expenses, excluding 12b-1 fees, exceed the
following stated annual limit:
1.40% Expense Limit
If total fund expenses fall below the annual expense limitations agreed to by
the adviser within the succeeding three years, the Fund may be required to pay
the advisor a portion or all of the waived advisory fees.
Distribution and service fees: The Fund has a 12b-1 distribution plan under the
1940 Act pursuant to which an annual fee, based on average daily net assets, is
paid to the distributor for various disbursements such as broker-dealer account
servicing fees and other promotional expenses of the Fund. The 12b-1 fee for the
Fund is comprised of a 0.25% service fee and the remaining amount is an
asset-based sales charge/distribution fee. The Fund is authorized under the
12b-1 plan to pay fees on each class up to the following limits:
Class A 0.35%
Class B 1.00%
Class C 1.00%
Class L 1.00%
Class M 0.90%
Underwriter commissions relate to front-end sales charges imposed for Class A
and M shares and contingent deferred sales charges from Classes B, L, M and
certain A share redemptions. For the year ended October 31, 2003, the
underwriter commissions were as follows:
Received by Underwriter $ 55
Retained by Underwriter 3
Contingent Sales Charges 25
IDEX Mutual Funds Annual Report 2003
IDEX T. Rowe Price Small Cap 13
IDEX T. Rowe Price Small Cap
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 2-(continued)
Administrative services: The Fund has entered into an agreement with ATFS for
financial and legal fund administration services, which include such items as
compliance, expenses, financial statements and other reporting, distributions,
tax returns, prospectus preparation, board of trustees meeting support and other
legal matters. Transfer agent fees are reflected separately from Administration
fees on the Statement of Operations. The Legal fees on the Statement of
Operations are for fees paid to external legal counsel. ATFS provides its
services to the Fund at cost and is reimbursed monthly.
Transfer agent fees: The Fund incurs ATIS annual per-account charges (not in
thousands) of $20.00 for each open shareholder account and $1.63 for each closed
account maintained, and certain out of pocket expenses.
Deferred compensation plan: Each eligible Fund Trustee may elect participation
in the Deferred Compensation Plan ("the Plan"). Under the Plan, such Trustees
may defer payment of a percentage of their total fees earned as a Fund Trustee.
These deferred amounts may be invested in any IDEX Fund. At October 31, 2003,
the value of invested plan amounts was $1. Invested plan amounts and the total
liability for deferred compensation to the Trustees under the Plan at October
31, 2003, are included in Net assets in the accompanying Statement of Assets and
Liabilities.
NOTE 3. INVESTMENT TRANSACTIONS
The cost of securities purchased and proceeds from securities sold (excluding
short-term securities) for the year ended October 31, 2003, were as follows:
Purchases of securities:
Long-Term excluding U.S. Government $ 85,533
U.S. Government -
Proceeds from maturities and sales of securities:
Long-Term excluding U.S. Government 11,186
U.S. Government -
NOTE 4. FEDERAL INCOME TAX MATTERS
The Fund has not made any provision for federal income or excise taxes due to
its policy to distribute all of its taxable income and capital gains to its
shareholders and otherwise qualify as a regulated investment company under the
Internal Revenue Code. Income and capital gain distributions are determined in
accordance with income tax regulations, which may differ from GAAP. These
differences are primarily due to differing treatments for items including, but
not limited to, wash sales, net operating losses and capital loss carryforwards.
Reclassifications between Undistributed net investment income (loss),
Undistributed net realized capital gains (loss) and Shares of beneficial
interest are made to reflect income and gains available for distribution under
federal tax regulations. Results of operations and net assets are not effected
by these reclassifications. These reclassifications are as follows:
Shares of beneficial interest, unlimited
shares authorized $ (797)
Undistributed net investment income (loss) 797
Accumulated net realized gain (loss) from
investment securities and futures contracts -
The tax basis components of distributable earnings as of October 31, 2003, are
as follows:
Undistributed Ordinary Income $ -
========
Undistributed Long-term Capital Gains $ -
========
Capital Loss Carryforward $ (6,989)
========
Net Unrealized Appreciation (Depreciation) $ 13,183
========
The capital loss carryforwards are available to offset future realized capital
gains through the periods listed:
Capital Loss
Carryforward Available through
- -------------- -----------------
$ 1,832 October 31, 2009
4,119 October 31, 2010
1,038 October 31, 2011
The aggregate cost of investments and composition of unrealized appreciation
(depreciation) for federal income tax purposes as of October 31, 2003, are as
follows:
Federal Tax Cost Basis $ 117,641
=========
Unrealized Appreciation $ 16,358
Unrealized (Depreciation) (3,175)
---------
Net Unrealized Appreciation (Depreciation) $ 13,183
=========
IDEX Mutual Funds Annual Report 2003
IDEX T. Rowe Price Small Cap 14
- --------------------------------------------------------------------------------
Report of Independent Certified Public Accountants
To the Board of Trustees and Shareholders of
IDEX T. Rowe Price Small Cap
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of IDEX T. Rowe Price Small Cap (the
"Fund") (one of the portfolios constituting the IDEX Mutual Funds) at October
31, 2003, and the results of its operations, the changes in its net assets and
the financial highlights for each of the periods indicated, in conformity with
accounting principles generally accepted in the United States of America. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with auditing standards generally accepted in the United States of America,
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at October 31, 2003 by correspondence with the
custodian and brokers, provide a reasonable basis for our opinion.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Tampa, Florida
December 18, 2003
IDEX Mutual Funds Annual Report 2003
IDEX T. Rowe Price Small Cap 15
IDEX T. Rowe Price Tax-Efficient Growth
- --------------------------------------------------------------------------------
MARKET ENVIRONMENT
Large-cap growth stocks extended their post-war rally in the third quarter,
though a sharp stock market decline late in the period trimmed their gains.
Supportive factors included generally favorable corporate earnings,
accommodative monetary and fiscal policies, and data that showed improving
trends in several segments of the economy.
PERFORMANCE
For the year ended October 31, 2003, IDEX T. Rowe Price Tax-Efficient Growth
returned 21.76%. By comparison its benchmark, the Standard and Poor's 500
Composite Stock Index, ("S&P 500") returned 20.79%.
STRATEGY REVIEW
The portfolio is well diversified and structured much like other large-cap
growth funds as measured by the Lipper Large-Cap Growth Funds Index ("Lipper
Index"), though the average market capitalization of our holdings is slightly
higher. We have constructed what we believe is the best buy-and-hold portfolio
by focusing on companies that we believe have strong market positions, good
growth prospects, and reasonable valuations. Our discipline is not to time the
market, as it is an impossible task. The portfolio invests for the long term and
only holds a small cash position.
The portfolio's price/earnings ratio ("P/E") and dividend yield are comparable
to the Lipper Index, while its beta and past and projected earnings growth rates
are slightly lower. This reflects our focus on companies with consistent and
profitable long-term growth rather than explosive short-term growth. The
portfolio is more growth-oriented than the S&P 500, as reflected by its higher
historical and projected earnings growth rates, lower dividend yield, and higher
P/E ratio.
One of the most important measures for us is return on equity (ROE), and we look
for companies with return on capital that is high and sustainable, and not
excessively tied to the business cycle.
/s/ Donald J. Peters
Donald J. Peters
Co-Fund Managers
T. Rowe Price Associates, Inc.
IDEX Mutual Funds Annual Report 2003
IDEX T. Rowe Price Tax-Efficient Growth 1
IDEX T. Rowe Price Tax-Efficient Growth
- --------------------------------------------------------------------------------
Comparison of change in value of $10,000 investment in Class A shares and its
comparative index.
Growth of $10,000
Inception of 3/1/99 through 10/31/03
Investment less sales charges - $9,452
[The following table was depicted as a mountain chart in the printed material.]
DATE Class A S&P 500
- ---------- ---------- ----------
3/1/1999 9,452 10,000
3/31/1999 9,534 10,400
6/30/1999 10,303 11,133
9/30/1999 9,398 10,439
12/31/1999 9,479 11,991
3/31/2000 9,369 12,266
6/30/2000 9,670 11,941
9/30/2000 9,964 11,825
12/31/2000 10,378 10,900
3/31/2001 9,630 9,609
6/30/2001 10,052 10,171
9/30/2001 9,020 8,678
12/31/2001 9,877 9,606
3/31/2002 10,041 9,632
6/30/2002 8,320 8,342
9/30/2002 7,054 6,902
12/31/2002 7,629 7,484
3/31/2003 7,409 7,247
6/30/2003 8,703 8,363
9/30/2003 8,895 8,584
10/31/2003 9,440 9,070
Average Annual Total Return for Periods Ended 10/31/03
- --------------------------------------------------------------------------------
From Inception
1 year Inception Date
- ------------------------------------------------------------------------------------------------------
Class A (NAV) 21.76% -0.03% 3/1/99
Class A (POP) 15.06% -1.23% 3/1/99
Return after taxes on distributions(2) 15.06% -1.35% 3/1/99
Return after taxes on distributions and sale of fund shares(2) 9.79% -1.11% 3/1/99
S&P 500(1) 20.79% -2.07% 3/1/99
- ------------------------------------------------------------------------------------------------------
Class B (NAV) 21.05% -0.68% 3/1/99
Class B (POP) 16.05% -0.89% 3/1/99
- ------------------------------------------------------------------------------------------------------
Class C (NAV) 21.05% -1.27% 11/1/99
- ------------------------------------------------------------------------------------------------------
Class L (NAV) - 22.12% 11/11/02
Class L (POP) - 20.12% 11/11/02
- ------------------------------------------------------------------------------------------------------
Class M (NAV) 21.13% -0.58% 3/1/99
Class M (POP) 18.91% -0.79% 3/1/99
- ------------------------------------------------------------------------------------------------------
NOTES
(1) The Standard & Poor's 500 Composite Stock (S&P 500) 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 Micropal(R)(C) Micropal, Inc. 2003 -
1-800-596-5323 - http://www.micropal.com.
(2) 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.
The performance data presented represents past performance, future results may
vary. Performance data for B, C, L and M shares do 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 shares, (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.
Funds managed for tax efficiency may not be suitable for IRAs and other
nontaxable accounts, as the pre-tax returns may be lower than a similar fund
that is not managed with tax considerations. In addition, while tax managed
funds have the ability to distribute capital gains, investors may still incur a
taxable gain upon liquidating their account.
Periods less than 1 year represent total return and are not annualized.
This material must be preceded or accompanied by a current prospectus, which
includes specific contents regarding the investment objectives and policies of
this fund.
IDEX Mutual Funds Annual Report 2003
IDEX T. Rowe Price Tax-Efficient Growth 2
IDEX T. Rowe Price Tax-Efficient Growth
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
At October 31, 2003
(all amounts except share amounts in thousands)
Shares Value
- ---------------------------------------------------------------------------------
COMMON STOCKS (100.4%)
Aerospace (0.3%)
Boeing Company (The) 2,600 $ 100
Amusement & Recreation Services (1.5%)
Disney (Walt) Company (The) 20,900 473
Apparel Products (0.7%)
Cintas Corporation (b) 5,400 230
Automotive (0.7%)
Harley-Davidson, Inc. (b) 4,700 223
Beverages (3.0%)
Anheuser-Busch Companies, Inc. 2,900 143
Coca-Cola Company (The) 11,200 520
PepsiCo, Inc. 6,670 319
Business Services (8.5%)
ChoicePoint Inc. (a) 4,700 165
Clear Channel Communications, Inc. 14,400 588
eBay Inc. (a) 5,000 280
Equifax Inc. (b) 3,400 83
First Data Corporation (b) 12,300 439
Monster Worldwide, Inc. (a)(b) 4,300 110
Moody's Corporation 3,800 220
Omnicom Group, Inc. (b) 6,000 479
Robert Half International Inc. (a) 6,500 153
WPP Group PLC-ADR 5,400 259
Chemicals & Allied Products (2.9%)
Avon Products, Inc. 2,100 143
Colgate-Palmolive Company 3,500 186
Ecolab Inc. 3,600 97
Procter & Gamble Company (The) 4,300 423
Valspar Corporation (The) 2,000 95
Commercial Banks (8.9%)
Bank of New York Company, Inc. (The) 8,600 268
Citigroup Inc. 17,759 842
Mellon Financial Corporation 4,000 119
Northern Trust Corporation 13,400 621
State Street Corporation (b) 13,300 696
Wells Fargo & Company 6,400 360
Communication (2.7%)
Certegy Inc. 4,800 162
Viacom, Inc.-Class B 17,700 706
Communications Equipment (0.3%)
Nokia Oyj-ADR 5,500 93
Computer & Data Processing Services (6.2%)
Automatic Data Processing, Inc. 6,500 245
BMC Software, Inc. (a) 5,600 97
Computer Associates International, Inc. 3,900 92
Intuit Inc. (a) 3,800 190
Shares Value
- ---------------------------------------------------------------------------------
Computer & Data Processing Services (continued)
Microsoft Corporation 40,500 $ 1,059
Oracle Corporation (a) 21,000 251
Yahoo! Inc. (a) 2,300 101
Computer & Office Equipment (3.7%)
Cisco Systems, Inc. (a) 31,300 657
Dell Computer Corporation (a) 12,500 452
EMC Corporation (a) 7,700 107
Drug Stores & Proprietary Stores (1.5%)
CVS Corporation 4,200 148
Medco Health Solutions, Inc. (a) 1,109 37
Walgreen Co. 8,300 289
Educational Services (1.0%)
Apollo Group, Inc.-Class A (a) 2,650 168
DeVRY Inc. (a)(b) 6,400 155
Electronic & Other Electric Equipment (2.8%)
General Electric Company 31,550 915
Electronic Components & Accessories (10.9%)
Altera Corporation (a)(b) 14,700 297
Analog Devices, Inc. (a) 7,400 328
Broadcom Corporation-Class A (a)(b) 3,500 112
Intel Corporation 23,600 780
Linear Technology Corporation 11,600 494
Maxim Integrated Products 10,800 537
Microchip Technology Incorporated 6,300 206
Molex Incorporated-Class A (b) 3,500 93
Texas Instruments Incorporated 13,700 396
Xilinx, Inc. (a) 9,400 298
Fabricated Metal Products (0.4%)
Gillette Company (The) 4,000 128
Food & Kindred Products (0.7%)
General Mills, Inc. (b) 2,800 126
Wrigley (Wm.) Jr. Company 1,700 96
Furniture & Home Furnishings Stores (0.8%)
Bed Bath & Beyond Inc. (a) 3,500 148
Williams-Sonoma, Inc. (a) 3,600 127
Industrial Machinery & Equipment (0.9%)
Applied Materials, Inc. (a) 9,100 213
Illinois Tool Works Inc. 1,200 88
Insurance (5.6%)
Ambac Financial Group, Inc. 2,400 170
American International Group, Inc. 12,063 734
UnitedHealth Group Incorporated 9,600 488
WellPoint Health Networks Inc. (a) 5,000 445
Insurance Agents, Brokers & Service (1.3%)
Marsh & McLennan Companies, Inc. 10,200 436
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX T. Rowe Price Tax-Efficient Growth 3
IDEX T. Rowe Price Tax-Efficient Growth
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Shares Value
- ----------------------------------------------------------------------------
Lumber & Other Building Materials (1.4%)
Home Depot, Inc. (The) 12,000 $ 445
Management Services (0.9%)
Paychex, Inc. 7,200 280
Manufacturing Industries (0.2%)
International Game Technology 1,600 52
Medical Instruments & Supplies (2.9%)
Baxter International Inc. 3,200 85
Guidant Corporation 2,400 122
Medtronic, Inc. 12,600 574
Stryker Corporation (b) 2,100 170
Motion Pictures (0.9%)
Time Warner Inc. (a) 20,000 306
Paper & Allied Products (0.5%)
3M Company 600 47
Kimberly-Clark Corporation 2,500 132
Personal Credit Institutions (0.7%)
SLM Corporation 5,500 215
Pharmaceuticals (12.7%)
Abbott Laboratories 6,300 269
Amgen Inc. (a) 6,800 420
AstraZeneca PLC-ADR 2,000 95
Cardinal Health, Inc. (b) 4,800 285
Glaxo Wellcome PLC-ADR 7,000 303
Johnson & Johnson 10,400 523
Lilly (Eli) and Company 6,500 433
Merck & Co., Inc. 9,200 407
Pfizer Inc. 34,685 1,096
Wyeth 7,700 340
Printing & Publishing (0.9%)
McGraw-Hill Companies, Inc. (The) 4,400 295
Radio & Television Broadcasting (0.6%)
Univision Communications Inc.-
Class A (a)(b) 5,500 187
Restaurants (0.4%)
Starbucks Corporation (a) 4,300 136
Retail Trade (0.7%)
Tiffany & Co. (b) 4,700 223
Rubber & Misc. Plastic Products (0.3%)
NIKE, Inc.-Class B (b) 1,300 83
Security & Commodity Brokers (1.9%)
American Express Company 4,400 206
Franklin Resources, Inc. 4,200 199
Schwab (Charles) Corporation (The) 14,600 198
Telecommunications (0.7%)
Vodafone Group PLC-ADR (b) 10,000 212
Shares Value
- ----------------------------------------------------------------------------
Transportation & Public Utilities (1.0%)
Expeditors International of
Washington, Inc. 2,800 $ 105
InterActiveCorp (a)(b) 5,600 206
U.S. Government Agencies (3.2%)
Fannie Mae 8,000 574
Freddie Mac 8,600 483
Variety Stores (3.9%)
Dollar General Corporation (b) 9,800 220
Family Dollar Stores, Inc. 4,500 196
Wal-Mart Stores, Inc. 14,500 855
Wholesale Trade Nondurable Goods (1.3%)
SYSCO Corporation (b) 12,900 434
--------
Total Common Stocks (cost: $25,809) 32,709
--------
Principal Value
- ------------------------------------------------------------------------------
SECURITY LENDING COLLATERAL (14.0%)
Debt (12.3%)
Bank Notes (1.5%)
Canadian Imperial Bank of Commerce
1.12%, due 11/04/2003 $ 199 $ 199
Fleet National Bank
1.06%, due 01/21/2004 277 277
Euro Dollar Terms (6.9%)
Bank of Montreal
1.03%, due 11/13/2003 159 159
1.04%, due 11/14/2003 140 140
Bank of Nova Scotia (The)
1.06%, due 11/12/2003 80 80
Bank of Scotland
1.04%, due 11/14/2003 159 159
Citigroup Inc.
1.08%, due 01/05/2004 238 238
Credit Agricole Indosuez
1.08%, due 01/06/2004 175 175
Den Danske Bank
1.04%, due 11/10/2003 80 80
1.08%, due 01/20/2004 239 239
Royal Bank of Canada
1.04%, due 11/24/2003 199 199
1.06%, due 12/08/2003 80 80
Royal Bank of Scotland Group PLC (The)
1.08%, due 01/15/2004 239 239
SouthTrust Bank
1.08%, due 01/16/2004 239 239
Wells Fargo & Company
1.04%, due 11/20/2003 239 239
Promissory Notes (0.9%)
Goldman Sachs Group, Inc. (The)
1.15%, due 11/03/2003 277 277
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX T. Rowe Price Tax-Efficient Growth 4
IDEX T. Rowe Price Tax-Efficient Growth
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (continued)
At October 31, 2003
(all amounts except share amounts in thousands)
Principal Value
- -------------------------------------------------------------------------
Repurchase Agreements (3.0%) (c)
Goldman Sachs Group, Inc. (The)
1.10% Repurchase Agreement dated
10/31/2003 to be repurchased at $80 on
11/03/2003 $ 80 $ 80
Merrill Lynch & Co., Inc.
1.10% Repurchase Agreement dated
10/31/2003 to be repurchased at $914
on 11/03/2003 914 914
Investment Companies (1.7%)
Money Market Funds (1.7%)
Merrimac Cash Series Fund-
Premium Class
1-day yield of 0.97% 556,823 $ 557
-------
Total Security Lending Collateral (cost: $4,570) 4,570
-------
Total Investment Securities (cost: $30,379) $37,279
=======
Value
- ------------------------------------------------------------------------
SUMMARY:
Investments, at value 114.4 % $ 37,279
Liabilities in excess of other assets (14.4)% (4,691)
----- --------
Net assets 100.0 % $ 32,588
===== ========
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 (see Note
1). The value at October 31, 2003, of all securities on loan is $4,433.
(c) Cash collateral for the Repurchase Agreements, valued at $1,014, 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
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX T. Rowe Price Tax-Efficient Growth 5
IDEX T. Rowe Price Tax-Efficient Growth
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
At October 31, 2003
(all amounts except per share amounts in thousands)
Assets:
Investment securities, at value (cost: $30,379)
(including $4,433 of securities loaned) $ 37,279
Cash 155
Receivables:
Shares of beneficial interest sold 122
Dividends 33
Other 4
--------
37,593
--------
Liabilities:
Accounts payable and accrued liabilities:
Shares of beneficial interest redeemed 352
Management and advisory fees 15
Distribution fees 20
Transfer agent fees 19
Payable for securities on loan 4,570
Other 29
--------
5,005
--------
Net Assets $ 32,588
========
Net Assets Consist of:
Shares of beneficial interest, unlimited shares authorized $ 31,738
Accumulated net investment income (loss) (1)
Accumulated net realized gain (loss) from investment
securities (6,049)
Net unrealized appreciation (depreciation) on
investment securities 6,900
--------
Net Assets $ 32,588
========
Shares Outstanding:
Class A 1,325
Class B 1,468
Class C 332
Class L 49
Class M 173
Net Asset Value Per Share:
Class A $ 9.85
Class B 9.66
Class C 9.66
Class L 9.66
Class M 9.69
Maximum Offering Price Per Share (a):
Class A $ 10.42
Class M 9.79
(a) 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.
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the year ended October 31, 2003
(all amounts in thousands)
Investment Income:
Interest $ 2
Dividends 450
Income from loaned securities-net 3
Less withholding taxes on foreign dividends (2)
-------
453
-------
Expenses:
Management and advisory fees 299
Transfer agent fees 127
Printing and shareholder reports 18
Custody fees 21
Administration fees 36
Legal fees 3
Auditing and accounting fees 21
Trustees fees 3
Registration fees 66
Other 3
Distribution and service fees:
Class A 80
Class B 122
Class C 29
Class L 1
Class M 16
-------
Total expenses 845
Less:
Advisory fee waiver (60)
-------
Net expenses 785
-------
Net Investment Income (Loss) (332)
-------
Net Realized and Unrealized Gain (Loss):
Realized gain (loss) from investment securities (3,318)
Increase (decrease) in unrealized appreciation
(depreciation) on investment securities 11,969
-------
Net Gain (Loss) on Investment Securities 8,651
-------
Net Increase (Decrease) in Net Assets Resulting from
Operations $ 8,319
=======
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX T. Rowe Price Tax-Efficient Growth 6
IDEX T. Rowe Price Tax-Efficient Growth
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended
(all amounts in thousands)
October 31, October 31,
2003 2002
----------- -----------
Increase (Decrease) In Net Assets From:
Operations:
Net investment income (loss) $ (332) $ (250)
Net realized gain (loss) from investment
securities (3,318) (1,926)
Net unrealized appreciation
(depreciation) on investment
securities 11,969 (3,554)
-------- --------
8,319 (5,730)
-------- --------
Distributions to Shareholders:
From net investment income:
Class A - -
Class B - -
Class C - -
Class L - -
Class M - -
-------- --------
- -
-------- --------
From net realized gains:
Class A - (4)
Class B - (8)
Class C - (2)
Class L - -
Class M - (1)
-------- --------
- (15)
-------- --------
Capital Share Transactions:
Proceeds from shares sold:
Class A 15,466 18,342
Class B 3,312 4,876
Class C 775 1,368
Class L 457 -
Class M 244 602
-------- --------
20,254 25,188
-------- --------
Dividends and distributions reinvested:
Class A - 4
Class B - 7
Class C - 2
Class L - -
Class M - 1
-------- --------
- 14
-------- --------
Cost of shares redeemed:
Class A (28,901) (3,710)
Class B (3,349) (5,604)
Class C (1,024) (1,260)
Class L (16) -
Class M (983) (954)
-------- --------
(34,273) (11,528)
-------- --------
(14,019) 13,674
-------- --------
Net increase (decrease) in net assets (5,700) 7,929
-------- --------
Net Assets:
Beginning of year 38,288 30,359
-------- --------
End of year $ 32,588 $ 38,288
======== ========
Accumulated Net Investment Income $ (1) $ (1)
======== ========
October 31, October 31,
2003 2002
----------- -----------
Share Activity:
Shares issued:
Class A 1,908 2,160
Class B 381 498
Class C 89 147
Class L 51 -
Class M 29 61
------ ------
2,458 2,866
------ ------
Shares issued-reinvested from distributions:
Class A - -
Class B - 1
Class C - -
Class L - -
Class M - -
------ ------
- 1
------ ------
Shares redeemed:
Class A (3,225) (414)
Class B (403) (643)
Class C (123) (141)
Class L (2) -
Class M (116) (105)
------ ------
(3,869) (1,303)
------ ------
Net increase (decrease) in shares
outstanding (1,411) 1,564
====== ======
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX T. Rowe Price Tax-Efficient Growth 7
IDEX T. Rowe Price Tax-Efficient Growth
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share of beneficial interest outstanding throughout each period
----------------------------------------------------------------------------------------------------------
Investment Operations Distributions
------------------------------------------- --------------------------------------
Net Asset Net Asset
For the Value, Net Net Realized From Net From Net Value,
Period Beginning Investment and Unrealized Total Investment Realized Total End
Ended (d)(g) of Period Income (Loss) Gain (Loss) Operations Income Gains Distributions of Period
- ------------------------------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 $ 8.09 $ (0.05) $ 1.81 $ 1.76 $ - $ - $ - $ 9.85
10/31/2002 9.54 (0.02) (1.43) (1.45) - - - 8.09
10/31/2001 10.64 0.05 (1.13) (1.08) (0.02) - (0.02) 9.54
10/31/2000 10.20 0.08 0.44 0.52 (0.08) - (0.08) 10.64
10/31/1999 10.00 0.06 0.18 0.24 (0.04) - (0.04) 10.20
- ------------------------------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 7.99 (0.10) 1.77 1.67 - - - 9.66
10/31/2002 9.49 (0.09) (1.41) (1.50) - - - 7.99
10/31/2001 10.63 (0.02) (1.12) (1.14) - - - 9.49
10/31/2000 10.19 0.02 0.44 0.46 (0.02) - (0.02) 10.63
10/31/1999 10.00 0.01 0.18 0.19 - - - 10.19
- ------------------------------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 7.99 (0.10) 1.77 1.67 - - - 9.66
10/31/2002 9.49 (0.09) (1.41) (1.50) - - - 7.99
10/31/2001 10.63 (0.02) (1.12) (1.14) - - - 9.49
10/31/2000 10.19 0.02 0.44 0.46 (0.02) - (0.02) 10.63
- ------------------------------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 7.91 (0.11) 1.86 1.75 - - - 9.66
- ------------------------------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 8.00 (0.09) 1.78 1.69 - - - 9.69
10/31/2002 9.49 (0.08) (1.41) (1.49) - - - 8.00
10/31/2001 10.63 (0.01) (1.13) (1.14) - - - 9.49
10/31/2000 10.19 0.03 0.44 0.47 (0.03) - (0.03) 10.63
10/31/1999 10.00 0.02 0.18 0.20 (0.01) - (0.01) 10.19
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
--------------------------------------------------------------------
Ratio of Expenses
Net Assets, to Average Net Investment
For the End of Net Assets (a) Income (Loss) Portfolio
Period Total Period ----------------------- to Average Turnover
Ended (g) Return (c) (000's) Net (e) Total (f) Net Assets (a) Rate (b)
- ----------------------------------------------------------------------------------------------------------------
Class A 10/31/2003 21.76% $ 13,057 1.70% 1.85% (0.56)% 50%
10/31/2002 (15.20) 21,389 1.68 1.95 (0.27) 76
10/31/2001 (10.14) 8,552 1.55 2.07 0.47 30
10/31/2000 5.14 5,452 1.55 2.68 0.66 58
10/31/1999 2.40 1,840 1.55 7.57 1.09 20
- ----------------------------------------------------------------------------------------------------------------
Class B 10/31/2003 21.05 14,181 2.35 2.50 (1.21) 50
10/31/2002 (15.84) 11,897 2.33 2.60 (0.92) 76
10/31/2001 (10.75) 15,500 2.20 2.72 (0.18) 30
10/31/2000 4.49 7,597 2.20 3.33 0.01 58
10/31/1999 1.96 2,134 2.20 8.22 0.44 20
- ----------------------------------------------------------------------------------------------------------------
Class C 10/31/2003 21.05 3,204 2.35 2.50 (1.21) 50
10/31/2002 (15.84) 2,920 2.33 2.60 (0.92) 76
10/31/2001 (10.75) 3,419 2.20 2.72 (0.18) 30
10/31/2000 4.49 1,935 2.20 3.33 0.01 58
- ----------------------------------------------------------------------------------------------------------------
Class L 10/31/2003 22.12 473 2.35 2.50 (1.21) 50
- ----------------------------------------------------------------------------------------------------------------
Class M 10/31/2003 21.13 1,673 2.25 2.40 (1.11) 50
10/31/2002 (15.71) 2,082 2.23 2.50 (0.82) 76
10/31/2001 (10.66) 2,888 2.10 2.62 (0.08) 30
10/31/2000 4.59 1,916 2.10 3.23 0.11 58
10/31/1999 2.03 1,058 2.10 8.12 0.54 20
- ----------------------------------------------------------------------------------------------------------------
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX T. Rowe Price Tax-Efficient Growth 8
IDEX T. Rowe Price Tax-Efficient Growth
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (continued)
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 are not annualized.
(d) Per share information is calculated based on average number of shares
outstanding for the periods ended 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 (see note 2).
(f) Ratio of Total Expenses to Average Net Assets includes all expenses before
fee waivers and reimbursements by the investment adviser.
(g) IDEX T. Rowe Price Tax-Efficient Growth ("the Fund") commenced operations on
March 1, 1999. The inception date for the Fund's offering of share classes C
and L are as follows:
Class C - November 1, 1999
Class L - November 11, 2002
The notes to the financial statements are an integral part of this report.
IDEX Mutual Funds Annual Report 2003
IDEX T. Rowe Price Tax-Efficient Growth 9
IDEX T. Rowe Price Tax-Efficient Growth
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
At October 31, 2003
(all amounts in thousands)
NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
IDEX Mutual Funds is a Massachusetts business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company. IDEX T. Rowe Price Tax-Efficient Growth ("the
Fund"), part of IDEX Mutual Funds, began operations on March 1, 1999.
In the normal course of business, the Fund enters into contracts that contain a
variety of representations and warranties which provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown, as this would involve future claims that may be made against the Fund
and/or its affiliates that have not yet occurred. However, based on experience,
the Fund expects the risk of loss to be remote.
See the Prospectus and Statement of Additional Information for a description of
the Fund's investment objective.
In preparing the Fund's financial statements in accordance with accounting
principles generally accepted in the United States of America ("GAAP"),
estimates or assumptions (which could differ from actual results) may be used
that affect reported amounts and disclosures. The following policies were
consistently followed by the Fund, in accordance with GAAP.
Multiple class operations and expenses: The Fund currently offers five classes
of shares, each with a public offering price that reflects different sales
charges, if any, and expense levels. Effective November 11, 2002, Class C and M
shares were closed to new investors. Income, non-class specific expenses and
realized and unrealized gains and losses, are allocated daily to each class,
based upon the value of shares outstanding method as permitted under Rule 18f-3
of the 1940 Act. Each class bears its own specific expenses as well as a portion
of general, common expenses.
Security valuations: Fund investments traded on an exchange are valued at the
closing price on the day of valuation on the exchange where the security is
principally traded. With respect to securities traded on the NASDAQ INMS, such
closing price may be the last reported sales price or the NASDAQ Official
Closing Price.
Securities traded in the over-the-counter market and listed securities for which
no sale was reported on that date are valued at the last quoted bid price.
Debt securities are valued by independent pricing services; however, those that
mature in sixty days or less are valued at amortized cost, which approximates
market.
Other securities for which quotations are not readily available are valued at
fair value determined in good faith, in accordance with procedures established
by and, under the supervision of the Board of Trustees and the Fund's Valuation
Committee.
Cash: The Fund may leave cash overnight in its cash account with the custodian,
Investors Bank & Trust Company ("IBT"). IBT has been contracted on behalf of the
Fund to invest the excess cash into a savings account, which at October 31,
2003, was paying an interest rate of 0.75%.
Securities lending: The Fund may lend securities to enhance fund earnings from
investing cash collateral received in making such loans to qualified borrowers
(typically broker/dealers). The Fund has engaged its custodian bank, IBT, as a
lending agent to administer its securities lending program. IBT earned $1 of
program net income for its services. When the Fund makes a security loan, it
receives cash collateral as protection against the risk that the borrower will
default on the loan, and records an asset for the cash invested collateral and a
liability for the return of the collateral.
Securities on loan are included in Investment securities at value on the
Statement of Assets and Liabilities and remain on the Schedule of Investments.
Loans of securities are required to be secured by collateral at least equal to
102% of the value of the securities at inception of the loan, and not less then
100% thereafter. The Fund may invest cash collateral in short-term money market
instruments including: U.S. Treasury Bills, U.S. agency obligations, commercial
paper, money market mutual funds, repurchase agreements and other highly rated,
liquid investments. During the life of securities loans, the collateral and
securities loaned remain subject to fluctuation in value. IBT marks to market
securities loaned and the collateral each business day. If additional collateral
is due (at least $1), IBT collects additional cash collateral from the
borrowers. Although securities loaned will be fully collateralized at all times,
IBT may experience delays in, or may be prevented from, recovering the
collateral on behalf of the Fund. The Fund may recall a loaned security position
at any time from the borrower through IBT. In the event the borrower fails to
timely return a recalled security, IBT may indemnify the Fund by purchasing
replacement securities for the Fund at its own expense and claiming the
collateral to fund such a purchase. IBT absorbs the loss if the collateral value
is not sufficient to cover the cost of the replacement securities. If
replacement securities are not available, IBT will credit the equivalent cash
value to the Fund.
Income from securities lending is included in the Statement of Operations. The
amount of collateral and value of securities on loan are included in the
Statement of Assets and Liabilities as well as on the Schedule of Investments.
IDEX Mutual Funds Annual Report 2003
IDEX T. Rowe Price Tax-Efficient Growth 10
IDEX T. Rowe Price Tax-Efficient Growth
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 1-(continued)
Security transactions and investment income: Security transactions are recorded
on the trade date. Security gains and losses are calculated on the specific
identification basis. Dividend income is recorded on the ex-dividend date or, in
the case of foreign securities, as soon as the Fund is informed of the
ex-dividend date. Interest income, including accretion of discounts and
amortization of premiums, is recorded on the accrual basis commencing on the
settlement date.
Dividend distributions: Distributions to shareholders are recorded on the
ex-dividend date and are determined in accordance with Federal income tax
regulations which may differ from GAAP. The Fund at October 31, 2003, had no
dividend distributions.
NOTE 2. RELATED PARTY TRANSACTIONS
AEGON/Transamerica Fund Advisers, Inc. ("ATFA") is the Fund's investment
adviser. AEGON/Transamerica Fund Services, Inc. ("ATFS") is the Fund's
administrator. AFSG Securities Corp. ("AFSG") is the Fund's
distributor/principal underwriter. AEGON/Transamerica Investor Services, Inc.
("ATIS") is the 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. AUSA and WRL are wholly owned indirect subsidiaries of AEGON
NV, a Netherlands corporation.
The following schedule reflects the percentage of fund assets owned by
affiliated mutual funds (ie: through the assets allocation funds)
Net % of
Assets Net Assets
---------- -----------
IDEX Asset Allocation
Conservative Portfolio $ 4,848 15%
Investment advisory fees: The Fund pays management fees to ATFA based on average
daily net assets ("ANA") at the following stated break points:
0.75% of the first $500 million of ANA
0.65% of ANA over $500 million
ATFA currently voluntarily waives its advisory fee and will reimburse the Fund
to the extent that operating expenses, excluding 12b-1 fees, exceed the
following stated annual limit:
1.35% Expense Limit
If total fund expenses fall below the annual expense limitations agreed to by
the adviser within the succeeding three years, the Fund may be required to pay
the advisor a portion or all of the waived advisory fees.
Distribution and service fees: The Fund has a 12b-1 distribution plan under the
1940 Act pursuant to which an annual fee, based on average daily net assets, is
paid to the distributor for various disbursements such as broker-dealer account
servicing fees and other promotional expenses of the Fund. The 12b-1 fee for the
Fund is comprised of a 0.25% service fee and the remaining amount is an
asset-based sales charge/distribution fee. The Fund is authorized under the
12b-1 plan to pay fees on each class up to the following limits:
Class A 0.35%
Class B 1.00%
Class C 1.00%
Class L 1.00%
Class M 0.90%
Underwriter commissions relate to front-end sales charges imposed for Class A
and M shares and contingent deferred sales charges from Classes B, L, M and
certain A share redemptions. For the year ended October 31, 2003, the
underwriter commissions were as follows:
Received by Underwriter $ 42
Retained by Underwriter 5
Contingent Sales Charges 42
Administrative services: The Fund has entered into an agreement with ATFS for
financial and legal fund administration services, which include such items as
compliance, expenses, financial statements and other reporting, distributions,
tax returns, prospectus preparation, board of trustees meeting support and other
legal matters. Transfer agent fees are reflected separately from Administration
fees on the Statement of Operations. The Legal fees on the Statement of
Operations are for fees paid to external legal counsel. ATFS provides its
services to the Fund at cost and is reimbursed monthly.
Transfer agent fees: The Fund incurs ATIS annual per-account charges (not in
thousands) of $20.00 for each open shareholder account and $1.63 for each closed
account maintained, and certain out of pocket expenses.
Deferred compensation plan: Each eligible Fund Trustee may elect participation
in the Deferred Compensation Plan ("the Plan"). Under the Plan, such Trustees
may defer payment of a percentage of their total fees earned as a Fund Trustee.
These deferred amounts may be invested in any IDEX Fund. At October 31, 2003,
the value of invested plan amounts was $1. Invested plan amounts and the total
liability for deferred compensation to the Trustees under the Plan at October
31, 2003, are included in Net assets in the accompanying Statement of Assets and
Liabilities.
NOTE 3. INVESTMENT TRANSACTIONS
The cost of securities purchased and proceeds from securities sold (excluding
short-term securities) for the year ended October 31, 2003, were as follows:
IDEX Mutual Funds Annual Report 2003
IDEX T. Rowe Price Tax-Efficient Growth 11
IDEX T. Rowe Price Tax-Efficient Growth
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
At October 31, 2003
(all amounts in thousands)
NOTE 3-(continued)
Purchases of securities:
Long-Term excluding U.S. Government $ 19,730
U.S. Government 398
Proceeds from maturities and sales of securities:
Long-Term excluding U.S. Government 33,173
U.S. Government 1,004
NOTE 4. FEDERAL INCOME TAX MATTERS
The Fund has not made any provision for federal income or excise taxes due to
its policy to distribute all of its taxable income and capital gains to its
shareholders and otherwise qualify as a regulated investment company under the
Internal Revenue Code. Income and capital gain distributions are determined in
accordance with income tax regulations, which may differ from GAAP. These
differences are primarily due to differing treatments for items including, but
not limited to, wash sales, net operating losses and capital loss carryforwards.
Reclassifications between Undistributed net investment income (loss),
Undistributed net realized capital gains (loss) and Shares of beneficial
interest are made to reflect income and gains available for distribution under
federal tax regulations. Results of operations and net assets are not effected
by these reclassifications. These reclassifications are as follows:
Shares of beneficial interest, unlimited
shares authorized $ (336)
Accumulated net investment income (loss) 332
Accumulated net realized gain (loss) from
investment securities 4
The tax character of distributions paid may differ from the character of
distributions shown in the Statements of Changes in Net Assets primarily due to
short-term gains being treated as ordinary income for tax purposes. The tax
character of distributions paid during 2002 and 2003 was as follows:
2002 Distributions paid from:
Ordinary income $ 15
Long-term capital gains -
2003 Distributions paid from:
Ordinary income $ -
Long-term capital gains -
The tax basis components of distributable earnings as of October 31, 2003, are
as follows:
Undistributed Ordinary Income $ -
========
Undistributed Long-term Capital Gains $ -
========
Capital Loss Carryforward $ (5,781)
========
Net Unrealized Appreciation (Depreciation) $ 6,632
========
The capital loss carryforwards are available to offset future realized capital
gains through the periods listed:
Capital Loss
Carryforwards Available through
- --------------- -----------------
$ 32 October 31, 2007
378 October 31, 2008
219 October 31, 2009
1,972 October 31, 2010
3,180 October 31, 2011
The aggregate cost of investments and composition of unrealized appreciation
(depreciation) for federal income tax purposes as of October 31, 2003, are as
follows:
Federal Tax Cost Basis $ 30,647
========
Unrealized Appreciation $ 6,799
Unrealized (Depreciation) (167)
--------
Net Unrealized Appreciation (Depreciation) $ 6,632
========
IDEX Mutual Funds Annual Report 2003
IDEX T. Rowe Price Tax-Efficient Growth 12
- --------------------------------------------------------------------------------
Report of Independent Certified Public Accountants
To the Board of Trustees and Shareholders of
IDEX T. Rowe Price Tax-Efficient Growth
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of IDEX T. Rowe Price Tax-Efficient
Growth (the "Fund") (one of the portfolios constituting the IDEX Mutual Funds)
at October 31, 2003, and the results of its operations, the changes in its net
assets and the financial highlights for each of the periods indicated, in
conformity with accounting principles generally accepted in the United States of
America. These financial statements and financial highlights (hereafter referred
to as "financial statements") are the responsibility of the Fund's management;
our responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these financial statements in
accordance with auditing standards generally accepted in the United States of
America, which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at October 31, 2003 by
correspondence with the custodian and brokers, provide a reasonable basis for
our opinion.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Tampa, Florida
December 18, 2003
IDEX Mutual Funds Annual Report 2003
IDEX T. Rowe Price Tax-Efficient Growth 13
IDEX MUTUAL FUNDS
MANAGEMENT OF THE FUND (unaudited)
Term of
Position(s) Office and
Held with Length of
Name, Address and Age Fund* Time Served
- --------------------- ------------ --------------
INTERESTED TRUSTEES
John R. Kenney** Chairman, Indefinite*
570 Carillon Parkway Trustee 1986-present
St. Petersburg, FL 33716
(DOB 2/8/38)
Larry N. Norman ** Trustee Indefinite*
4333 Edgewood Road NE 2002-present
Cedar Rapids, IA 52499
(DOB 1/8/53)
INDEPENDENT TRUSTEES
Peter R. Brown Vice Chairman, Indefinite*
11180 6th Street East Trustee 1986-present
Treasure Island, FL 33706
(DOB 5/10/28)
Charles C. Harris Trustee Indefinite*
2 Seaside Lane #304 1994-present
Belleair, FL 33756
(DOB 1/15/30)
Russell A. Kimball, Jr. Trustee Indefinite*
1160 Gulf Boulevard 2002-present
Clearwater Beach, FL 34630
(DOB 8/17/44)
William W. Short, Jr. Trustee Indefinite*
6911 Bryan Dairy Road 1986-present
Suite 210
Largo, FL 33777
(DOB 2/25/36)
Daniel Calabria Trustee Indefinite*
7068 S. Shore Drive S. 1996-present
South Pasadena, FL 33707
(DOB 3/05/36)
Janice B. Case Trustee Indefinite*
205 Palm Island NW 2002-present
Clearwater, Florida 33767
(DOB 9/27/52)
Jack E. Zimmerman Trustee Indefinite*
6778 Rosezita Lane 1986-present
Dayton, OH 45459
(DOB 2/3/28)
Leo J. Hill Trustee Indefinite*
2201 N. Main St. 2002-present
Gainesville, Florida 32609
(DOB 3/27/56)
Number
of Funds Other
in Complex Directorships
Principal Occupation(s) Overseen Held by
Name, Address and Age During Past 5 Years by Trustee Director
- --------------------- ------------------------------------------------------ ---------- --------------
INTERESTED TRUSTEES
John R. Kenney** Chairman, Director & Co-CEO, Great Companies, L.L.C.; 90 N/A
570 Carillon Parkway Manager, Transamerica Investment Management, LLC
St. Petersburg, FL 33716 (TIM); Director & Chairman, AEGON/Transamerica Series
(DOB 2/8/38) Fund, Inc. (ATSF); Director & Chairman, Transamerica
Income Shares, Inc. (TIS); Manager & Chairman,
Transamerica Occidental Life Insurance Company
Separate Account Fund B (Fund B)
Larry N. Norman ** President & Chairman, Transamerica Life Insurance 91 N/A
4333 Edgewood Road NE Company; Director, AEGON/Transamerica Fund Advisers,
Cedar Rapids, IA 52499 Inc. (ATFA); Director, TIS; Director AEGON/ Transamerica
(DOB 1/8/53) Investor Services, Inc. (ATIS); Director, AEGON/
Transamerica Fund Services, Inc. (ATFS); Director, ATSF;
Manager, Fund B; Director, Transamerica Index Funds,
Inc. (TIF); President, AFSG Securities Corp. (AFSG)
INDEPENDENT TRUSTEES
Peter R. Brown Chairman of the Board, Peter Brown Construction 91 N/A
11180 6th Street East Company (1963-2000); Vice Chairman & Director, ATSF;
Treasure Island, FL 33706 Vice Chairman & Manager, Fund B; Vice Chairman &
(DOB 5/10/28) Director, TIS & TIF; Rear Admiral (Ret.) U.S. Navy
Reserve, Civil Engineer Corps
Charles C. Harris Director, ATSF; Director TIS; Manager, Fund B 90 N/A
2 Seaside Lane #304
Belleair, FL 33756
(DOB 1/15/30)
Russell A. Kimball, Jr. Director, ATSF; Director, TIS; Manager, Fund B; General 90 N/A
1160 Gulf Boulevard Manager, Sheraton Sand Key Resort (1975-present)
Clearwater Beach, FL 34630
(DOB 8/17/44)
William W. Short, Jr. Director, ATSF; Director, TIS; Manager, Fund B; Retired 90 N/A
6911 Bryan Dairy Road Corporate CEO and Chairman of the Board of Shorts, Inc.
Suite 210
Largo, FL 33777
(DOB 2/25/36)
Daniel Calabria Director, ATSF; Director, TIS; Manager, Fund B; Trustee 90 N/A
7068 S. Shore Drive S. (1993-present) & President (1993-1995), Florida Tax
South Pasadena, FL 33707 Free Funds
(DOB 3/05/36)
Janice B. Case Director, ATSF; Director, TIS; Manager, Fund B; Senior 90 Central
205 Palm Island NW Vice President (1996-2000), Vice President Vermont
Clearwater, Florida 33767 (1990-1996), Director of Customer Service & Marketing Public
(DOB 9/27/52) (1987-1990), Florida Power Corporation; Director, Service Co.
Central Vermont Public Service Co. (Audit Committee);
Director, Western Electricity Coordinating Council
(Chairman, Human Resources and Compensation
Committee)
Jack E. Zimmerman Former Director, Regional Marketing of Marietta 36 N/A
6778 Rosezita Lane Corporation & Director of Strategic Planning, Martin
Dayton, OH 45459 Marietta Baltimore Aerospace. Mr. Zimmerman is also the
(DOB 2/3/28) brother-in-law of John R. Kenney, IDEX Chairman.
Leo J. Hill Director, ATSF; Director, TIS; Manager, Fund B; Owner & 90 N/A
2201 N. Main St. President, Prestige Automotive Group (2001-present);
Gainesville, Florida 32609 Market President (1997-1998), NationsBank; President &
(DOB 3/27/56) CEO (1994-1998), Barnett Bank of the Treasure Coast,
FL
- --------
* Trustees serve an indefinite term until his/her successor is elected or (in
some cases) until he/she reaches the mandatory retirement age.
** May be deemed as "interested person" of the Fund as defined in the 1940 Act
due to employment with an affiliate of ATFA.
P.O. Box 9015
Clearwater, FL 33758-9015
[IDEX LOGO]
MUTUAL FUNDS
A TRANSAMERICA COMPANY
www.idexfunds.com
Customer Service 1-888-233-IDEX (4339)
P.O. Box 9015 o Clearwater, FL o 33758-9015
Distributor: AFSG Securities Corporation
Item 2: Code of Ethics.
(a) Registrant has adopted a code of ethics that applies to its principal
executive officer, principal financial officer, and any other officers
who serve a similar function.
(c) During the period covered by the report, no amendments were made to the
provisions of this code of ethics.
(d) During the period covered by the report, Registrant did not grant any
waivers, including implicit waivers, from the provisions of this code
of ethics.
(f) (1) Registrant has filed this code of ethics as an exhibit pursuant to
Item 10(a)(1) of Form N-CSR.
Item 3: Audit Committee Financial Expert.
Registrant's Board of Trustees has determined that Peter Brown is an "audit
committee financial expert," as such term is defined in Item 3 of Form N-CSR.
Mr. Brown is "independent" under the standards set forth in Item 3 of Form
N-CSR. The designation of Mr. Brown as an "audit committee financial expert"
pursuant to Item 3 of Form N-CSR does not (i) impose upon him any duties,
obligations, or liabilities that are greater than the duties, obligations and
liabilities imposed upon him as a member of the Registrant's audit committee or
Board of Trustees in the absence of such designation; or (ii) affect the duties,
obligations or liabilities of any other member of the registrant's audit
committee or Board of Trustees.
Item 4: Principal Accountant Fees and Services. Not applicable.
Item 5: Audit Committee of Listed Registrants. Not applicable.
Item 6: [Reserved].
Item 7: Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies. Not applicable.
Item 8: [Reserved].
Item 9: Controls and Procedures.
(a) Based on their evaluation of registrant's disclosure controls and
procedures (as defined in rule 30a-2(c) under the Investment Company
Act of 1940 (17 CFR 270.30a-2(c)) as of October 31, 2003, registrant's
principal executive officer and principal financial officer found
registrant's disclosure controls and procedures to be appropriately
designed to ensure that information required to be disclosed by
registrant in the reports that it files under the Securities Exchange
Act of 1934 (a) is accumulated and communicated to registrant's
management, including its principal executive officer and principal
financial officer, to allow timely decisions regarding required
disclosure, and (b) is recorded, processed, summarized and reported,
within the time periods specified in the rules and forms adopted by the
U.S. Securities and Exchange Commission.
(b) There have been no significant changes in registrant's internal
controls or in other factors that could significantly affect
registrant's internal controls subsequent to the date of the most
recent evaluation as indicated, including no significant deficiencies
or material weaknesses that required corrective action.
Item 10: Exhibits.
(a) (1) Registrant's code of ethics (that is the subject of the
disclosure required by Item 2(a)) is attached.
(2) Separate certifications for Registrant's principal executive
officer and principal financial officer, as required by Rule
30a-2(a) under the 1940 Act, are attached.
(b) A certification for Registrant's principal executive officer and
principal financial officer, as required by Rule 30a-2(b) under the
1940 Act, is attached. This certification is being furnished to the
Securities and Exchange Commission solely pursuant to 18 U.S.C. section
1350 and is not being filed as part of the Form N-CSR with the
Commission.
IDEX MUTUAL FUNDS
FOR THE PERIOD ENDING OCTOBER 31, 2003
Form N-CSR SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
IDEX Mutual Funds
By: /s/ Brian C. Scott
---------------------------------------
Brian C. Scott
President and Chief Executive Officer
Date: January 8, 2004
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Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ Brian C. Scott
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Brian C. Scott
President and Chief Executive Officer
Date: January 8, 2004
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By: /s/ Kim D. Day
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Kim D. Day
Vice President, Treasurer and Principal
Financial Officer
Date: January 8, 2004
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EXHIBIT INDEX
Exhibit No. Description of Exhibit
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10(b)(1) Code of Ethics for Principal Executive and Senior Financial Officers
10(b)(2) Section 302 N-CSR Certification of Principal Executive Officer
10(b)(3) Section 302 N-CSR Certification of Principal Financial Officer
10(b)(4) Section 906 N-CSR Certification of Principal Executive Officer & Principal Financial Officer & General Counsel