Notes to Financial Statements (unaudited)
6. FINANCIAL INSTRUMENTS
The Fund may trade in financial instruments with off-balance sheet risk in the normal course of its investing
activities to assist in managing exposure to various market risks. These financial instruments include written
options and futures contracts and may involve, to a varying degree, elements of risk in excess of the amounts
recognized for financial statement purposes. No such investments were held by the Fund on April 30, 1997.
7. CHANGE IN FISCAL YEAR END
Effective January 1, 1996, the Fund changed its fiscal year end from December 31 to October 31.
Manning & Napier Fund, Inc.
Flexible Yield Series II
April 30, 1997
Management Discussion and Analysis
With the end of April comes springtime and little league baseball. At a recent game, a young boy was overheard
saying you have to think a lot when you play baseball, but when the balls coming at you, you dont have time to
think. This is also a good perspective on investing.
Investing requires a great deal of background thought and research, because like a sharp ground ball, individual
pieces of economic data come quickly and with different hops and spins. If you try to find deep meaning in any
individual economic release, that is, if you try to extrapolate a trend from a single data point, youll find the inputs
too frequent to be handled intelligently. As the young ballplayer put it, you have to think a lot, and that thinking
must be done in advance, and not in reaction to economic releases. Otherwise, you will find yourself changing
direction constantly, given the variability of individual pieces of data.
From this perspective, in considering the question which is most crucial to bond investors, i.e., whats the direction
of inflation, what matters most is that inflation overall continues to confirm the long-term trend of moderate pricing
pressures. Sure, there are individual pieces of data which can spook the bond market -- strong econ