Notes to Financial Statements
3. TRANSACTIONS WITH AFFILIATES The Fund has an investment advisory agreement with Manning &
Napier Advisors, Inc. (the "Advisor"), for which the Fund pays the Advisor a fee, computed daily and payable
monthly, at an annual rate of 0.50% of the Fund's average daily net assets. The fee amounted to $4,454 for the
ten months ended October 31, 1996 and $4,767 for the year ended December 31, 1995.
Under the Fund's Investment Advisory Agreement (the "Agreement"), personnel of the Advisor provide the Fund
with advice and assistance in the choice of investments and the execution of securities transactions, and otherwise
maintain the Fund's organization. The Advisor also provides the Fund with necessary office space and portfolio
accounting and bookkeeping services. The salaries of all officers of the Fund and of all Directors who are
"affiliated persons" of the Fund or of the Advisor, and all personnel of the Fund or of the Advisor performing
services relating to research, statistical and investment activities are paid by the Advisor.
The Advisor has voluntarily agreed to waive its fee and, if necessary, pay other expenses of the Fund in order to
maintain total expenses for the Fund at no more than 0.85% of average daily net assets each year. Accordingly,
the Advisor did not impose any of its fee and paid expenses amounting to $12,396 for the ten months ended
October 31, 1996 and $10,582 for the year ended December 31, 1995, which are reflected as a reduction of
expenses on the Statement of Operations. The fee waiver and assumption of expenses by the Advisor is
voluntary and may be terminated at any time.
The Advisor also acts as the transfer, dividend paying and shareholder servicing agent for the Fund. For these
services, the Fund pays a fee which is calculated as a percentage of the average daily net assets at an annual rate
of 0.024%;this fee amounted to $214 for the ten months ended October 31, 1996 and $229 for the year ended
December 31, 1995.
Manning & Napie