Ex-99.23(d)(6)
INVESTMENT SUB-ADVISORY AGREEMENT
This AGREEMENT is effective this 16th day of January 2007, by and between
XXXXXXX NATIONAL ASSET MANAGEMENT, LLC, a Michigan limited liability company and
registered investment adviser ("Adviser"), and MELLON CAPITAL MANAGEMENT
CORPORATION, a Delaware corporation and registered investment adviser
("Sub-Adviser").
WHEREAS, Adviser is the investment manager for the JNL Investors Series
Trust (the "Trust"), an open-end management investment company registered under
the Investment Company Act of 1940, as amended ("1940 Act");
WHEREAS, the Adviser represents that it has entered into an Investment
Advisory and Management Agreement ("Management Agreement") dated as of November
1, 2005, with the Trust; and
WHEREAS, Adviser desires to retain Sub-Adviser as Adviser's agent to
furnish investment advisory services to the investment portfolios of the Trust
listed on Schedule A hereto ("each a Fund").
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
1. APPOINTMENT. Adviser hereby appoints Sub-Adviser to provide certain
sub-investment advisory services to the Funds for the period and on the
terms set forth in this Agreement. Sub-Adviser accepts such appointment and
agrees to furnish the services herein set forth for the compensation herein
provided.
In the event the Adviser designates one or more funds other than the Funds
with respect to which the Adviser wishes to retain the Sub-Adviser to
render investment advisory services hereunder, it shall notify the
Sub-Adviser in writing. If the Sub-Adviser is willing to render such
services, it shall notify the Adviser in writing, whereupon such fund shall
become a Fund hereunder, and be subject to this Agreement.
2. DELIVERY OF DOCUMENTS. Adviser has or will furnish Sub-Adviser with copies
properly certified or authenticated of each of the following prior to the
commencement of the Sub-Adviser's services:
a) the Trust's Agreement and Declaration of Trust, as filed with the
Secretary of State of The Commonwealth of Massachusetts on July 28,
2000, and all amendments thereto or restatements thereof (such
Declaration, as presently in effect and as it shall from time to time
be amended or restated, is herein called the "Declaration of Trust");
b) the Trust's By-Laws and amendments thereto;
c) resolutions of the Trust's Board of Trustees ("Board of Trustees")
authorizing the appointment of Sub-Adviser and approving this
Agreement;
d) the Trust's Notification of Registration on Form N-8A under the 1940
Act as filed with the Securities and Exchange Commission (the "SEC");
e) the Trust's Registration Statement on Form N-1A under the Securities
Act of 1933, as amended ("1933 Act") and under the 1940 Act as filed
with the SEC and all amendments thereto insofar as such Registration
Statement and such amendments relate to the Funds; and
f) the Trust's most recent prospectus and Statement of Additional
Information for the Funds (collectively called the "Prospectus").
Adviser will furnish the Sub-Adviser with copies of all amendments of or
supplements to the foregoing within a reasonable time before they become
effective. Any amendments or supplements that impact the management of the
Funds will not be deemed effective with respect to the Sub-Adviser until
the Sub-Adviser's approval thereof.
3. MANAGEMENT. Subject always to the supervision of the Adviser, who in turn
is subject to the supervision of the Board of Trustees, Sub-Adviser will
furnish an investment program in respect of, and make investment decisions
for, all assets of the Funds and place all orders for the purchase and sale
of securities, including foreign or domestic securities or other property
(including financial futures and options of any type), all on behalf of the
Funds. Sub-Adviser is expressly authorized to cause the assets of the Funds
to be invested in Mellon Financial Corporation stock subject to applicable
restrictions of the 1940 Act. In the performance of its duties, Sub-Adviser
will satisfy its fiduciary duties to the Funds (as set forth below), and
will monitor the Funds' investments, and will comply with the provisions of
the Trust's Declaration of Trust and By-Laws, as amended from time to time,
and the stated investment objectives, policies and restrictions of the
Funds as described in the Investment Objectives attached hereto as Schedule
C (which may be amended from time to time). Sub-Adviser and Adviser will
each make its officers and employees available to the other from time to
time at reasonable times to review investment policies of the Funds and to
consult with each other regarding the investment affairs of the Funds.
Sub-Adviser will report to the Board of Trustees and to Adviser with
respect to the implementation of such program, as requested by the Board of
Trustees or the Adviser. Sub-Adviser, solely with respect to the assets of
the Funds, which are under its management pursuant to this Agreement, is
responsible for compliance with the diversification provisions of Section
851 the Internal Revenue Code of 1986, as amended ("IRC").
The Adviser agrees that the Sub-Adviser shall not be liable for any failure
to recommend the purchase or sale of any security on behalf of any Fund on
the basis of any information which might, in the Sub-Adviser's opinion,
constitute a violation of any federal or state laws, rules or regulations.
If the Fund does not meet such diversification requirements at the close of
any quarter by reason of a discrepancy existing immediately after the
acquisition of any security or other property which is wholly or partly the
result of such acquisition during such quarter the Fund shall not lose its
status for such quarter as a regulated investment company if such
discrepancy is eliminated within 30 days after the close of such quarter.
The Sub-Adviser further agrees that it:
a) will use the same skill and care in providing such services as it uses
in providing services to fiduciary accounts for which it has
investment responsibilities;
b) will conform with all applicable Rules and Regulations of the SEC in
all material respects and in addition will conduct its activities
under this Agreement in accordance with any applicable regulations of
any governmental authority pertaining to its investment advisory
activities, including but not limited to compliance with Rule 206(4)-7
under the Investment Advisers Act of 1940, as amended;
c) will report regularly to Adviser and to the Board of Trustees as
reasonably agreed between the Adviser and Sub-Adviser and will make
appropriate persons available for the purpose of reviewing with
representatives of Adviser and the Board of Trustees on a regular
basis at reasonable times agreed to by the Adviser and Sub-Adviser,
the management of the Funds, including, without limitation, review of
the general investment strategies of the Funds, the performance of the
Funds in relation to the specified benchmarks and will provide various
other reports from time to time as reasonably requested by Adviser;
d) will provide to the Adviser (i) a monthly compliance checklist
developed for each Fund by Adviser and Sub-Adviser, and (ii) quarterly
reports developed for each Fund by Adviser and Sub-Adviser;
e) as a service provider to the Funds will cooperate fully with the Chief
Compliance Officer of the Trust in the execution of his/her
responsibilities to monitor service providers to the Funds under Rule
38a-1 under the 1940 Act;
f) will prepare and maintain such books and records with respect to each
Fund's securities transactions in accordance with Section 7 herein,
and will furnish Adviser and the Board of Trustees such periodic and
special reports as the Adviser may reasonably request;
g) will prepare and cause to be filed in a timely manner Form 13F and, if
required, Schedule 13G with respect to securities held for the account
of the Funds subject to Sub-Adviser's supervision;
h) will act upon reasonable instructions from Adviser not inconsistent
with the fiduciary duties and Investment Objectives hereunder;
i) will treat confidentially and as proprietary information of the Trust
all such records and other information relative to the Trust
maintained by the Sub-Adviser, and will not use such records and
information for any purpose other than performance of its
responsibilities and duties hereunder, except after prior notification
to and approval in writing by the Trust, which approval shall not be
unreasonably withheld and may not be withheld where the Sub-Adviser
may be exposed to civil or criminal contempt proceedings for failure
to comply, when requested to divulge such information by duly
constituted authorities, or when so requested by Trust, PROVIDED,
HOWEVER, that notwithstanding the foregoing, Sub-Adviser may disclose
such information as required by applicable law, regulation or upon
request by a regulator or auditor of Sub-Adviser; and
j) will vote proxies received in connection with securities held by the
Funds consistent with its fiduciary duties hereunder.
4. CUSTODY OF ASSETS. Sub-Adviser shall at no time have the right to
physically possess the assets of the Funds or have the assets registered in
its own name or the name of its nominee, nor shall Sub-Adviser in any
manner acquire or become possessed of any income, whether in kind or cash,
or proceeds, whether in kind or cash, distributable by reason of selling,
holding or controlling such assets of the Funds. In accordance with the
preceding sentence, Sub-Adviser shall have no responsibility with respect
to the collection of income, physical acquisition or the safekeeping of the
assets of the Funds. All such duties of collection, physical acquisition
and safekeeping shall be the sole obligation of the custodian.
5. BROKERAGE. The Sub-Adviser is responsible for decisions to buy and sell
securities for each Fund, broker-dealer selection, and negotiation of
brokerage commission rates. Sub-Adviser shall have the express authority to
negotiate, open, continue and terminate brokerage accounts and other
brokerage arrangements with respect to all portfolio transactions entered
into by Sub-Adviser on behalf of the Funds. Sub-Adviser will provide copies
of all such agreements to the Adviser. It is the Sub-Adviser's -- general
policy in selecting a broker to effect a particular transaction to seek to
obtain "best execution", which means prompt and efficient execution of the
transaction at the best obtainable price with payment of commissions which
are reasonable in relation to the value of the brokerage services provided
by the broker.
Consistent with this policy, the Sub-Adviser, in selecting broker-dealers
and negotiating commission rates, will take all relevant factors into
consideration, including, but not limited to: the best price available; the
reliability, integrity and financial condition of the broker-dealer; the
size of and difficulty in executing the order; and the value of the
expected contribution of the broker-dealer to the investment performance of
the applicable Fund on a continuing basis. Subject to such policies and
procedures as the Board of Trustees may determine, the Sub-Adviser shall
have discretion to effect investment transactions for each Fund through
broker-dealers (including, to the extent permissible under applicable law,
broker-dealer affiliates) who provide brokerage and/or research services,
as such services are defined in section 28(e) of the Securities Exchange
Act of 1934, as amended (the "1934 Act"), and as interpreted by the SEC,
and to cause such Fund to pay any such broker-dealers an amount of
commission for effecting a portfolio investment transaction in excess of
the amount of commission another broker-dealer would have charged for
effecting that transaction, if the Sub-Adviser determines in good faith
that such amount of commission is reasonable in relation to the value of
the brokerage or research services provided by such broker-dealer, viewed
in terms of either that particular investment transaction or the
Sub-Adviser's overall responsibilities with respect to such Fund and other
accounts to which the Sub-Adviser exercises investment discretion (as such
term is defined in section 3(a)(35) of the 1934 Act). Allocation of orders
placed by the Sub-Adviser on behalf of a Fund to such broker-dealers shall
be in such amounts and proportions as the Sub-Adviser shall determine in
good faith in conformity with its responsibilities under applicable laws,
rules and regulations. The Sub-Adviser will submit reports on such
allocations to the Adviser as reasonably requested by the Adviser, in such
form as may be mutually agreed to by the parties hereto, indicating the
broker-dealers to whom such allocations have been made and the basis
therefor.
6. EXPENSES. The Sub-Adviser shall bear all expenses incurred by it in
connection with the performance of its services under this Agreement. Each
Fund or the Adviser will bear certain other expenses to be incurred in its
operation, including, but not limited to, investment advisory fees, and
administration fees; fees for necessary professional and brokerage
services; costs relating to local administration of securities; and fees
for any pricing services. All other expenses not specifically assumed by
the Sub-Adviser hereunder or by the Adviser under the Management Agreement
are borne by the applicable Fund or the Trust. From time to time, the
Sub-Adviser may agree to waive or reduce some or all of the compensation to
which it is entitled under this Agreement.
7. BOOKS AND RECORDS. In compliance with the requirements of Rule 31a-3 under
the 1940 Act, the Sub-Adviser hereby agrees that all records which it
maintains for the Trust are the property of the Trust and further agrees to
surrender promptly to the Trust any of such records upon the Trust's
request, copies of which may be retained by the Sub-Adviser. Sub-Adviser
further agrees to preserve for the periods prescribed by Rule 31a-2 under
the 1940 Act the records required to be maintained by Rule 31a-1 under the
1940 Act related to each Fund's portfolio transactions. The Adviser shall
maintain all books and records not related to the Fund's portfolio
transactions.
8. COMPENSATION. For the services provided and the expenses assumed pursuant
to this Agreement, Adviser will pay the Sub-Adviser, and the Sub-Adviser
agrees to accept as full compensation therefore, a sub-advisory fee accrued
daily and payable monthly on the average daily net assets in the Funds in
accordance with Schedule B hereto.
9. SERVICES TO OTHERS. Adviser understands, and has advised the Board of
Trustees, that Sub-Adviser now acts, or may in the future act, as an
investment adviser to fiduciary and other managed accounts, and as
investment adviser or sub-investment adviser to other investment companies
or accounts. Adviser has no objection to Sub-Adviser acting in such
capacities, provided that whenever the Fund and one or more other
investment advisory clients of Sub-Adviser have available funds for
investment, investments suitable and appropriate for each will be allocated
in a manner believed by Sub-Adviser to be equitable to each. Sub-Adviser
may group orders for a Fund with orders for other funds and accounts to
obtain the efficiencies that may be available on larger transactions when
it determines that investment decisions are appropriate for each
participating account. Sub-Adviser cannot assure that such policy will not
adversely affect the price paid or received by a Fund. Adviser recognizes,
and has advised the Board of Trustees, that in some cases this procedure
may adversely affect the size and the opportunities of the position that
the participating Fund may obtain in a particular security. In addition,
Adviser understands, and has advised the Board of Trustees, that the
persons employed by Sub-Adviser to assist in Sub-Adviser's duties under
this Agreement will not devote their full time to such service and nothing
contained in this Agreement will be deemed to limit or restrict the right
of Sub-Adviser or any of its affiliates to engage in and devote time and
attention to other businesses or to render services of whatever kind or
nature.
10. LIMITATION OF LIABILITY. Sub-Adviser, its officers, directors, employees,
agents or affiliates will not be subject to any liability to the Adviser or
the Funds or their directors, officers, employees, agents or affiliates for
any error of judgment or mistake of law or for any loss suffered by the
Funds, any shareholder of the Funds or the Adviser either in connection
with the performance of Sub-Adviser's duties under this Agreement or its
failure to perform due to events beyond the reasonable control of the
Sub-Adviser or its agents, except for a loss resulting from Sub-Adviser's
willful misfeasance, or gross negligence in the performance of its duties
or by reason of its reckless disregard of its obligations and duties under
this Agreement. Federal and State securities laws may impose liabilities
under certain circumstances on persons who act in good faith, and therefore
nothing herein shall in any way constitute a waiver or limitation of any
right which Adviser may have under any applicable laws.
11. INDEMNIFICATION. Adviser and the Sub-Adviser each agree to indemnify the
other party (and each such party's affiliates, employees, directors and
officers) against any claim, damages, loss or liability (including
reasonable attorneys' fees) arising out of any third party claims brought
against an indemnified party that are found to constitute willful
misfeasance or gross negligence on the part of the indemnifying party.
12. DURATION AND TERMINATION. This Agreement will become effective as to a Fund
upon execution or, if later, on the date that initial capital for such Fund
is first provided to it and, unless sooner terminated as provided herein,
will continue in effect for two years from the date of its execution.
Thereafter, if not terminated as to a Fund, this Agreement will continue in
effect as to a Fund for successive periods of 12 months, PROVIDED that such
continuation is specifically approved at least annually by the Board of
Trustees or by vote of a majority of the outstanding voting securities of
such Fund, and in either event approved also by a majority of the Trustees
of the Trust who are not interested persons of the Trust, or of the
Adviser, or of the Sub-Adviser. Notwithstanding the foregoing, this
Agreement may be terminated as to a Fund at any time, without the payment
of any penalty, on sixty days' written notice by the Trust or Adviser, or
on sixty days' written notice by the Sub-Adviser. This Agreement will
immediately terminate in the event of its assignment. (As used in this
Agreement, the terms "majority of the outstanding voting securities",
"interested persons" and "assignment" have the same meaning of such terms
as in the 1940 Act.) Section 10 and 11 herein shall survive the termination
of this Agreement.
13. ACKNOWLEDGEMENTS OF ADVISER. Adviser acknowledges and agrees that:
(a) It is excluded from the definition of a commodity pool operator under
CFTC Rule 4.5, and in connection with such exemption has filed a
notice of eligibility and will provide the Sub-Adviser with a copy of
such notice of eligibility before the execution of this Agreement; and
(b) The Adviser hereby acknowledges that not less than forty-eight (48)
hours before the date it has executed this Agreement, it received from
the Sub-Adviser a copy of Part II of Sub-Advisers Form ADV, as
required by Rule 204-(3) of the Investment Advisers Act of 1940, as
amended.
14. OBLIGATIONS OF ADVISER. The Adviser agrees to provide or complete, as the
case may be, the following prior to the commencement of the Sub-Adviser's
investment advisory services as specified under this Agreement:
(a) A list of first tier affiliates and second tier affiliates (i.e.,
affiliates of affiliates) of the Fund;
(b) A list of restricted securities for each Fund (including CUSIP,
Sedol or other appropriate security identification);
(c) A copy of the current compliance procedures for each Fund; and
(d) A list of legal and compliance contacts.
The Adviser also agrees to promptly update the above referenced items in order
to ensure their accuracy, completeness and/or effectiveness.
15. CONFIDENTIAL TREATMENT. It is understood that any information or
recommendation supplied by, or produced by, Sub-Adviser in connection with
the performance of its obligations hereunder is to be regarded as
confidential and for use only by the Adviser and the Trust. Furthermore,
except as required by law (including, but not limited to semi-annual,
annual or other filings made under the 0000 Xxx) or as agreed to by the
Adviser and Sub-Adviser, information about the Funds' portfolio holdings
may not, be disclosed until it is either filed with the SEC, OR mailed out
to shareholders, which filing or mailing will not be made sooner than 15
days after month end, or any list of securities held by the Fund for 90
days after month-end in any manner whatsoever except as expressly
authorized in this Agreement, and except that the top 10 holdings may be
discharged 15 days after month-end. The Advisor and the Trust will disclose
portfolio information in accord with the most recent Disclosure of
Portfolio Information Policies and Procedures.
16. ENTIRE AGREEMENT; AMENDMENT OF THIS AGREEMENT. This Agreement constitutes
the entire agreement between the parties with respect to the Funds. No
provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or termination
is sought.
17. NOTICE. Any notice under this Agreement shall be in writing, addressed and
delivered or mailed, postage prepaid, to the other party at such address as
designated herein.
(A) TO ADVISER: Xxxxxxx National Life Insurance Company 0 Xxxxxxxxx Xxx
Xxxxxxx, XX 00000 Attn: Xxxxxx Xxxxx
(B) TO SUB-ADVISER: Mellon Capital Management Corporation 000 Xxxxxx
Xxxxxx, Xxxxx 0000 Xxx Xxxxxxxxx, XX 00000 Attn: Client Services
18. MISCELLANEOUS. The captions in this Agreement are included for convenience
of reference only and in no way define or limit any of the provisions
hereof or otherwise affect their construction or effect. If any provision
of this Agreement is held or made invalid by a court decision, statute,
rule or otherwise, the remainder of this Agreement will be binding upon and
shall inure to the benefit of the parties hereto.
The name "JNL Investors Series Trust" and "Trustees of JNL Investors Series
Trust" refer respectively to the Trust created by, and the Trustees, as
trustees but not individually or personally, acting from time to time
under, the Declaration of Trust, to which reference is hereby made and a
copy of which is on file at the office of the Secretary of State of the
Commonwealth of Massachusetts and elsewhere as required by law, and to any
and all amendments thereto so filed or hereafter filed. The obligations of
the "JNL Investors Series Trust" entered in the name or on behalf thereof
by any of the Trustees, representatives or agents are made not individually
but only in such capacities and are not binding upon any of the Trustees,
Shareholders or representatives or agents of Trust personally, but bind
only the assets of Trust, and persons dealing with the Funds must look
solely to the assets of Trust belonging to such Fund for the enforcement of
any claims against the Trust.
19. REPRESENTATIONS AND WARRANTIES OF THE SUB-ADVISER. The Sub-Adviser hereby
represents that this Agreement does not violate any existing agreements
between the Sub-Adviser and any other party.
The Sub-Adviser further represents and warrants that it is a duly
registered investment adviser under the Investment Advisers Act of 1940, as
amended and has provided to the Adviser a copy of its most recent Form ADV
as filed with the Securities and Exchange Commission.
The Sub-Adviser further represents that it has reviewed the post-effective
amendment to the Registration Statement for the Funds filed with the
Securities and Exchange Commission that contains disclosure about the
Sub-Adviser, and represents and warrants that, with respect to the
disclosure about the Sub-Adviser or information relating to the
Sub-Adviser, such Registration Statement contains, as of the date hereof,
no untrue statement of any material fact and does not omit any statement of
a material fact necessary to make the statements contained therein not
misleading.
20. APPLICABLE LAW. This Agreement shall be construed in accordance with
applicable federal law and the laws of the State of Michigan.
21. COUNTERPART SIGNATURES. This Agreement may be executed in several
counterparts, including via facsimile, each of which shall be deemed an
original for all purposes, including judicial proof of the terms hereof,
and all of which together shall constitute and be deemed one and the same
agreement.
IN WITNESS WHEREOF, the Adviser and the Sub-Adviser have caused this
Agreement to be executed as of this 16th day of January 2007.
XXXXXXX NATIONAL ASSET MANAGEMENT, LLC
By:
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Name: XXXXX X. XXXX
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Title: CHIEF LEGAL OFFICER AND SECRETARY
MELLON CAPITAL MANAGEMENT CORPORATION
By:
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Name:
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Title:
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SCHEDULE A
JANUARY 16, 2007
(Funds)
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Xxxxxxx Perspective 5 Fund
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Xxxxxxx Perspective Index 5 Fund
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Xxxxxxx Perspective Optimized 5 Fund
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SCHEDULE B
JANUARY 16, 2007
(Compensation)
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XXXXXXX PERSPECTIVE 5 FUND
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AVERAGE DAILY NET ASSETS ANNUAL RATE
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$0 to $50 Million 0.12%
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$50 Million to $100 Million 0.06%
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$100 Million to $750 Million 0.03%
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Amounts over $750 Million 0.015%
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XXXXXXX PERSPECTIVE INDEX 5 FUND
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AVERAGE DAILY NET ASSETS ANNUAL RATE
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$0 to $50 Million 0.12%
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$50 Million to $100 Million 0.06%
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$100 Million to $750 Million 0.03%
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Amounts over $750 Million 0.015%
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XXXXXXX PERSPECTIVE OPTIMIZED 5 FUND
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AVERAGE DAILY NET ASSETS ANNUAL RATE
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$0 to $50 Million 0.12%
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$50 Million to $100 Million 0.06%
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$100 Million to $750 Million 0.03%
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Amounts over $750 Million 0.015%
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SCHEDULE C
JANUARY 16, 2007
(Investment Objectives)
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XXXXXXX PERSPECTIVE 5 FUND
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INVESTMENT OBJECTIVE. THE INVESTMENT OBJECTIVE OF THE XXXXXXX
PERSPECTIVE 5 FUND IS TOTAL RETURN THROUGH CAPITAL
APPRECIATION AND DIVIDEND INCOME.
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XXXXXXX PERSPECTIVE INDEX 5 FUND
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INVESTMENT OBJECTIVE. THE INVESTMENT OBJECTIVE OF THE XXXXXXX
PERSPECTIVE INDEX 5 FUND IS CAPITAL APPRECIATION.
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XXXXXXX PERSPECTIVE OPTIMIZED 5 FUND
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INVESTMENT OBJECTIVE. THE INVESTMENT OBJECTIVE OF THE XXXXXXX
PERSPECTIVE OPTIMIZED 5 FUND IS TOTAL RETURN.
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