FIRST AMERICAN STRATEGY FUNDS INC, 497, 2000-06-13

FIRST AMERICAN STRATEGY FUNDS INC
497, 2000-06-13

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JANUARY 31, 2000

AS SUPPLEMENTED
JUNE 13, 2000

ASSET CLASSES

* EQUITY FUNDS

(*) FUNDS OF FUNDS

* BOND FUNDS

* TAX FREE BOND FUNDS

* MONEY MARKET FUNDS

PROSPECTUS

FIRST AMERICAN STRATEGY FUNDS, INC.

FIRST AMERICAN

STRATEGY
FUNDS

AGGRESSIVE GROWTH FUND
GROWTH FUND
GROWTH AND INCOME FUND
INCOME FUND

AS WITH ALL MUTUAL FUNDS, THE SECURITIES AND EXCHANGE COMMISSION HAS NOT
APPROVED OR DISAPPROVED THE SHARES OF THESE FUNDS, OR DETERMINED IF THE
INFORMATION IN THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANY STATEMENT TO THE
CONTRARY IS A CRIMINAL OFFENSE.

[LOGO] FIRST AMERICAN FUNDS(R)
THE POWER OF DISCIPLINED INVESTING(R)

<PAGE>

Table of
CONTENTS

FUND SUMMARIES

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Objectives and Main Investment Strategies 2
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Main Risks 3
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Fund Performance 4
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Fees and Expenses 6
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POLICIES & SERVICES
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Buying Shares 8
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Selling Shares 10
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Managing Your Investment 11
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ADDITIONAL INFORMATION
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Management 13
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More About The Funds 15
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The Underlying Funds 16
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Financial Highlights 26
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FOR MORE INFORMATION Back Cover
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<PAGE>

Fund Summaries
INTRODUCTION

This section of the prospectus describes the objectives of the First American
Strategy Funds, summarizes the main investment strategies used by each fund in
trying to achieve its objectives, and highlights the risks involved with these
strategies. It also provides you with information about the performance, fees,
and expenses of the funds.

AN INVESTMENT IN THE FUNDS IS NOT A DEPOSIT OF U.S. BANK NATIONAL ASSOCIATION
AND IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION
OR ANY OTHER GOVERNMENT AGENCY.

1
PROSPECTUS - First American Strategy Funds

<PAGE>

Fund Summaries
OBJECTIVES AND MAIN INVESTMENT STRATEGIES

Each of the funds described in this prospectus is a "fund of funds." The funds
are intended to provide differing balances between the objectives of current
income and growth of capital. Each fund seeks to achieve its objectives by
investing in a variety of other mutual funds which are also advised by the
funds' investment advisor.

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OBJECTIVES

STRATEGY AGGRESSIVE GROWTH FUND seeks a high level of capital growth.

STRATEGY GROWTH FUND seeks capital growth with a moderate level of current
income.

STRATEGY GROWTH AND INCOME FUND seeks both capital growth and current income.

STRATEGY INCOME FUND seeks a high level of current income consistent with
limited risk to capital.

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MAIN INVESTMENT STRATEGIES

Each fund seeks to achieve its objectives by investing in a variety of other
mutual funds that are also advised by the funds' investment advisor. Strategy
Aggressive Growth Fund and Strategy Growth Fund seek their objectives by
providing high allocations to various equity categories, including small
company and international company equity securities, with relatively little
emphasis on fixed income securities. Strategy Growth and Income Fund takes a
more evenly balanced approach to equity securities and fixed income
investments. Strategy Income Fund provides a high allocation to fixed income
investments, but also has a limited equity component designed to help offset
inflation and provide a source for potential increases in income over time.

The underlying funds in which the Strategy Funds invest include the 11 equity
funds and two fixed income funds named in the table below and Prime Obligations
Fund, a money market fund. The funds' advisor allocates and reallocates each
fund's assets among the underlying funds within ranges designed to reflect the
funds' differing balances between the investment objectives of current income
and growth of capital. The following table illustrates these ranges, expressed
as percentages of the funds' net assets.

<TABLE>
<CAPTION>
Aggressive Growth and
Growth Fund Growth Fund Income Fund Income Fund
----------------------------------------------------------------------------------------------------------
MIN MAX MIN MAX MIN MAX MIN MAX
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
EQUITY FUNDS AS A WHOLE 60% 100% 50% 90% 35% 75% 15% 45%
Equity Index Fund 0% 80% 0% 75% 0% 60% 0% 35%
Large Cap Growth Fund 5% 50% 5% 45% 5% 40% 0% 25%
Large Cap Value Fund 5% 50% 5% 45% 5% 40% 0% 25%
Mid Cap Growth Fund 0% 40% 0% 30% 0% 20% 0% 10%
Mid Cap Value Fund 0% 40% 0% 30% 0% 20% 0% 10%
Small Cap Growth Fund 0% 40% 0% 30% 0% 20% 0% 10%
Small Cap Value Fund 0% 40% 0% 30% 0% 20% 0% 10%
Equity Income Fund 0% 15% 0% 25% 0% 35% 0% 45%
Real Estate Securities Fund 0% 15% 0% 15% 0% 15% 0% 15%
Emerging Markets Fund 0% 15% 0% 15% 0% 10% 0% 5%
International Fund 0% 35% 0% 30% 0% 25% 0% 15%

FIXED INCOME FUNDS AS A WHOLE 0% 40% 10% 50% 25% 65% 55% 85%
Fixed Income Fund 0% 40% 0% 50% 10% 65% 25% 85%
Strategic Income Fund 0% 15% 0% 20% 0% 20% 0% 25%

PRIME OBLIGATIONS FUND 0% 35% 0% 35% 0% 35% 0% 35%
----------------------------------------------------------------------------------------------------------
</TABLE>

In addition to investing in Prime Obligations Fund, each fund also may invest
in cash, U.S. dollar-denominated high-quality money market instruments and
other short-term securities. Normally, each fund's aggregate investment in
these items and in Prime Obligations Fund will not exceed the maximum
percentage in the above table for Prime Obligations Fund. However, in an
attempt to respond to adverse market, economic, political or other conditions,
each fund may temporarily invest without limit in cash, U.S. dollar-denominated
high-quality money market instruments and other short-term securities.
Investing a significant percentage of a fund's assets in these securities may
prevent the fund from achieving its objectives.

2
PROSPECTUS - First American Strategy Funds
<PAGE>

Fund Summaries
MAIN RISKS

The value of your investment in a fund will change daily, which means you could
lose money. The main risks of investing in the funds include:

ACTIVE MANAGEMENT

Each fund is actively managed and its performance therefore will reflect in
part the advisor's ability to make asset allocation and other investment
decisions which are suited to achieving the fund's investment objectives. Due
to their active management, the funds could underperform other mutual funds
with similar investment objectives.

ADDITIONAL EXPENSES

Investing in the underlying funds through an investment in one of the funds
involves additional expenses that would not be present in a direct investment
in the underlying funds.

RISKS ASSOCIATED WITH THE UNDERLYING FUNDS

The funds are subject to the risks of the underlying funds in which they
invest. These risks, some of which are discussed in more detail under "The
Underlying Funds," include:

* The underlying funds (other than Equity Index Fund) are actively managed and
therefore may underperform other mutual funds with similar investment
objectives.

* Each underlying fund is subject to the risk of generally adverse markets. In
general, the market prices of equity securities frequently are subject to
greater volatility than the prices of fixed income securities. Therefore, the
net asset values of funds which invest higher proportions of their assets in
equity funds may be more volatile than funds which are limited to lower
proportions.

* Small Cap Growth Fund, Small Cap Value Fund, Emerging Markets Fund and
International Fund are subject to the risks of investing in small
capitalization companies. These stocks historically have experienced greater
price volatility than stocks of larger capitalization companies.

* Mid Cap Growth Fund and Mid Cap Value Fund invest in stocks of mid
capitalization companies. Although these stocks may be slightly less volatile
than those of small capitalization companies, they still involve substantial
risk.

* Real Estate Securities Fund is subject to risks associated with
non-diversification and with concentrating its investments in the real estate
industry, and to the risks associated with direct investments in real estate
investment trusts.

* International Fund, Emerging Markets Fund and Strategic Income Fund are
subject to risks associated with investing in foreign securities, including
currency risk. These risks are particularly significant in emerging markets,
where Strategic Income Fund may invest and where Emerging Markets Fund
primarily invests. International Fund and Emerging Markets Fund are also
subject to the risks of entering into foreign currency hedging transactions.

* Most of the other equity funds invest a portion of their assets in foreign
securities which are dollar-denominated and publicly traded in the United
States, and which may involve risks not associated with the securities of
domestic issuers.

* Equity Index Fund is subject to risks associated with its use of options,
futures, contracts and options on futures contracts if securities prices do
not move in the direction anticipated by the fund's advisor when entering into
the options or the futures contracts.

* The fixed income funds are subject to interest rate risk (the risk that debt
securities held by a fund will decrease in value when interest rates rise),
income risk (the risk that a fund's income could decline due to falling market
interest rates), credit risk (the risk that the issuer of debt securities will
not make timely principal or interest payments on its securities), and call
risk (the risk that the issuer of debt securities will prepay those securities
before their stated maturity, requiring the fund to reinvest the prepayment at
a lower interest rate).

* The fixed income funds may invest in mortgage- and/or asset-backed securities.
These are subject to the risk that falling interest rates will cause faster
than expected prepayments of the obligations underlying the securities, which
must be reinvested at lower interest rates. They are also subject to the risk
that rising interest rates will cause prepayments to slow, extending the life
of mortgage- and asset-backed securities with lower interest rates.

* Each fixed income fund may invest up to 25% of its total assets in dollar roll
transactions, which could increase the volatility of the fund's share price
and possibly diminish the fund's investment performance.

* Most of the underlying funds lend their portfolio securities to
broker-dealers, banks and other institutions. These funds are subject to the
risk that the other party to the securities lending agreement will default on
its obligations.

* Strategic Income Fund may invest a significant portion of its assets in
non-investment grade debt obligations, which are commonly called "high-yield"
securities or "junk bonds." In addition, Equity Income Fund may invest in
non-investment grade convertible debt obligations. High yield securities
generally have more volatile prices and carry more risk to principal than
investment grade securities.

POSSIBLE CONFLICTS OF INTEREST

The funds and the underlying funds have the same officers, directors and
investment advisor. If situations arise in which the interests of the funds are
different from those of the underlying funds, these officers and directors and
the advisor could be subject to conflicts of interest. For example, the advisor
might determine that a fund should reduce its allocation of assets to a
particular underlying fund, thus requiring the fund to redeem shares of the
underlying fund, at a time when it is not in the best interests of the
underlying fund to sell portfolio securities in order to meet the redemption
request. The advisor will monitor the operations of the funds and the
underlying funds for potential conflicts of interest, and recommend to the
funds' board of directors the steps which it believes are necessary to avoid or
minimize adverse consequences to the funds and the underlying funds.

3
PROSPECTUS - First American Strategy Funds
<PAGE>

Fund Summaries
FUND PERFORMANCE

The charts and tables that follow provide you with information on each fund's
volatility and performance. Of course, past performance does not guarantee
future results.

Each fund's bar chart shows you how performance of the fund's shares has varied
from year to year.

The tables compare each fund's performance over different time periods to that
of the fund's benchmark indices, which are broad measures of market performance.
Each fund's performance reflects fund expenses; the benchmarks are unmanaged and
have no expenses.

Both the charts and the tables assume that all distributions have been
reinvested.

STRATEGY AGGRESSIVE GROWTH FUND

ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR

[BAR CHART]

18.01% 7.36% 26.49%
------------------------------------
1997 1998 1999

Best Quarter: Quarter ending December 31, 1999 20.43%
Worst Quarter: Quarter ending September 30, 1998 (14.93)%

AVERAGE ANNUAL TOTAL RETURNS Inception Since
AS OF 12/31/99 Date One Year Inception(1)
--------------------------------------------------------------------------------
Strategy Aggressive Growth Fund 10/1/96 26.49% 16.94%
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Standard & Poor's Composite 500 Index(2) 21.04% 28.06%
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Lehman Government/Corporate Bond Index(3) (2.15)% 5.48%
--------------------------------------------------------------------------------

(1) The since inception performance of each index is calculated from 10/31/96.

(2) An unmanaged index of large capitalization stocks.

(3) An unmanaged index of Treasury securities, other securities issued by the
U.S. government or its agencies or instrumentalities, and investment grade
corporate debt securities.

STRATEGY GROWTH FUND

ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR

[BAR CHART]

16.36% 7.52% 19.13%
------------------------------------
1997 1998 1999

Best Quarter: Quarter ending December 31, 1999 14.91%
Worst Quarter: Quarter ending September 30, 1998 (11.92)%

AVERAGE ANNUAL TOTAL RETURNS Inception Since
AS OF 12/31/99 Date One Year Inception(1)
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Strategy Growth Fund 10/1/96 19.13% 14.42%
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Standard & Poor's Composite 500 Index(2) 21.04% 28.06%
--------------------------------------------------------------------------------
Lehman Government/Corporate Bond Index(3) (2.15)% 5.48%
--------------------------------------------------------------------------------

(1) The since inception performance of each index is calculated from 10/31/96.

(2) An unmanaged index of large capitalization stocks.

(3) An unmanaged index of Treasury securities, other securities issued by the
U.S. government or its agencies or instrumentalities, and investment grade
corporate debt securities.

4
PROSPECTUS - First American Strategy Funds
<PAGE>

Fund Summaries

FUND PERFORMANCE CONTINUED

STRATEGY GROWTH AND INCOME FUND

ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR

[BAR CHART]

13.96% 8.20% 13.15%
------------------------------------
1997 1998 1999

Best Quarter: Quarter ending December 31, 1999 10.33%
Worst Quarter: Quarter ending September 30, 1998 (8.30)%

AVERAGE ANNUAL TOTAL RETURNS Inception Since
AS OF 12/31/99 Date One Year Inception(1)
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Strategy Growth and Income Fund 10/1/96 13.15% 12.51%
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Standard & Poor's Composite 500 Index(2) 21.04% 28.06%
--------------------------------------------------------------------------------
Lehman Government/Corporate Bond Index(3) (2.15)% 5.48%
--------------------------------------------------------------------------------

(1) The since inception performance of each index is calculated from 10/31/96.

(2) An unmanaged index of large capitalization stocks.

(3) An unmanaged index of Treasury securities, other securities issued by the
U.S. government or its agencies or instrumentalities, and investment grade
corporate debt securities.

STRATEGY INCOME FUND

ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR

[BAR CHART]

12.72% 8.46% (0.39%)
-------------------------------------
1997 1998 1999

Best Quarter: Quarter ending June 30, 1997 4.87%
Worst Quarter: Quarter ending September 30, 1999 (2.43)%

AVERAGE ANNUAL TOTAL RETURNS Inception Since
AS OF 12/31/99 Date One Year Inception(1)
--------------------------------------------------------------------------------
Strategy Income Fund 10/1/96 (0.39)% 7.21%
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Standard & Poor's Composite 500 Index(2) 21.04% 28.06%
--------------------------------------------------------------------------------
Lehman Government/Corporate Bond Index(3) (2.15)% 5.48%
--------------------------------------------------------------------------------

(1) The since inception performance of each index is calculated from 10/31/96.

(2) An unmanaged index of large capitalization stocks.

(3) An unmanaged index of Treasury securities, other securities issued by the
U.S. government or its agencies or instrumentalities, and investment grade
corporate debt securities.

5
PROSPECTUS - First American Strategy Funds
<PAGE>

Fund Summaries
FEES AND EXPENSES

The following table describes the fees and expenses that you may pay if you buy
and hold shares of the funds. The funds do not impose any sales charges (loads)
when you buy, sell or exchange shares. Each fund imposes a redemption fee of 1%
if you redeem your shares within 12 months of purchase. See "Selling Shares --
How to Sell Shares -- Redemption Fee." In addition, when you hold shares of one
of the funds, you indirectly pay a portion of that fund's operating expenses.
The figures below are based on fund expenses during the fiscal year ended
September 30, 1999.(1) As illustrated in other tables under this caption, fund
shareholders also indirectly bear a portion of the underlying funds' expenses.

MAXIMUM DEFERRED SALES CHARGE (LOAD) None None None None

REDEMPTION FEE(2) AS A % OF AMOUNT REDEEMED 1.00% 1.00% 1.00% 1.00%

ANNUAL MAINTENANCE FEE(3)
ONLY CHARGED TO ACCOUNTS WITH BALANCES BELOW $500 $ 25 $ 25 $ 25 $ 25

ANNUAL FUND OPERATING EXPENSES AS A % OF AVERAGE NET ASSETS
(expenses that are deducted from fund assets)
--------------------------------------------------------------------------------------------------------------------
Management Fees 0.25% 0.25% 0.25% 0.25%
Distribution and Service (12b-1) Fees None None None None
Other Expenses
Shareholder Servicing Fee 0.25% 0.25% 0.25% 0.25%
Miscellaneous 0.36% 0.35% 0.29% 0.33%
TOTAL 0.86% 0.85% 0.79% 0.83%
--------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Actual expenses for the fiscal year were lower than those shown in the table
because of voluntary fee waivers and expense reimbursements by the advisor. See
"Additional Information -- Financial Highlights." THE ADVISOR INTENDS TO WAIVE
FEES AND REIMBURSE EXPENSES DURING THE CURRENT FISCAL YEAR SO THAT TOTAL
OPERATING EXPENSES FOR EACH FUND DO NOT EXCEED 0.40%. WAIVERS AND
REIMBURSEMENTS MAY BE DISCONTINUED AT ANY TIME.

(2) Payable if you redeem your shares within 12 months of purchase.

(3) The fund reserves the right to charge your account an annual maintenance fee
of $25 if your balance falls below $500 as a result of selling or exchanging
shares. See "Policies & Services -- Selling Shares, Accounts with Low
Balances."

RANGES OF COMBINED DIRECT AND INDIRECT EXPENSE RATIOS

As noted above, in addition to the funds' direct expenses, fund shareholders
also indirectly bear their proportionate share of the underlying funds'
expenses. The following table lists the ranges of combined direct and indirect
expense ratios borne by fund shareholders, taking into account underlying fund
expenses indirectly borne by fund shareholders. Ranges are presented because
the underlying funds' expense ratios differ from one another, so that the
actual combined direct and indirect expense ratios of the funds will depend on
the allocation of fund assets among the underlying funds. Information
concerning the underlying funds' expense ratios is listed under "Underlying
Fund Expense Ratios" below.

<TABLE>
<CAPTION>
RANGES OF COMBINED DIRECT
AND INDIRECT EXPENSE RATIOS Aggressive Growth and
AS A % OF AVERAGE NET ASSETS(1) Growth Fund Growth Fund Income Fund Income Fund
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1.64% to 2.12% 1.62% to 2.08% 1.56% to 1.94% 1.61% to 1.88%
----------------------------------------------------------------------------------------------------
</TABLE>

(1) The underlying funds' advisor intends to waive fees during the current
fiscal year so that expense ratios do not exceed certain levels, as set forth in
footnote 1 to the Underlying Fund Expense Ratios table below. In addition, the
funds' advisor intends to waive fees and reimburse expenses during the current
fiscal year so that total operating expenses for each fund do not exceed 0.30%.
Taking these waivers and reimbursements into account, the ranges of combined
direct and indirect expense ratios would be 0.71% to 1.43% for Aggressive Growth
Fund, 0.74% to 1.41% for Growth Fund, 0.79% to 1.34% for Growth and Income Fund,
and 0.86% to 1.24% for Income Fund. Waivers and reimbursements may be
discontinued at any time.

6
PROSPECTUS - First American Strategy Funds

<PAGE>

Fund Summaries
FEES AND EXPENSES CONTINUED

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EXAMPLE This example is intended to help you compare the cost of investing in
the funds with the cost of investing in other mutual funds. It is based upon
the midpoint of the expense ranges set forth above, and assumes that you
invest $10,000 for the time periods indicated and then redeem all of your
shares at the end of those periods. The example also assumes that your
investment has a 5% return each year, and that each fund's operating expenses
remain the same. Although your actual costs and returns may differ, based on
these assumptions your cost would be:

Aggressive Growth and
Growth Fund Growth Fund Income Fund Income Fund
--------------------------------------------------------------------------------
1 year $ 291 $ 287 $ 277 $ 277
3 years $ 590 $ 579 $ 549 $ 548
5 years $1,015 $ 997 $ 946 $ 944
10 years $2,199 $2,161 $2,056 $2,053

You would pay the following expenses if you did not redeem your shares:

Aggressive Growth and
Growth Fund Growth Fund Income Fund Income Fund
--------------------------------------------------------------------------------
1 year $ 191 $ 187 $ 177 $ 177
3 years $ 590 $ 579 $ 549 $ 548
5 years $1,015 $ 997 $ 946 $ 944
10 years $2,199 $2,161 $2,056 $2,053

UNDERLYING FUND EXPENSE RATIOS

The table below lists the expense ratios of the underlying funds. Information
in the table is for Class Y shares of the underlying funds, which is the only
class in which the funds will invest. The ratios presented are based on
expenses during the fiscal year ended September 30, 1999.(1)

Underlying Fund Expense Ratio
--------------------------------------------------------------------------------
Equity Index Fund 0.89%
Large Cap Growth Fund 0.89%
Large Cap Value Fund 0.90%
Mid Cap Growth Fund 0.96%
Mid Cap Value Fund 0.93%
Small Cap Growth Fund 0.91%
Small Cap Value Fund 0.89%
Equity Income Fund 0.88%
Real Estate Securities Fund 0.93%
International Fund 1.51%
Emerging Markets Fund 1.73%
Fixed Income Fund 0.89%
Strategic Income Fund 0.93%
Prime Obligations Fund 0.51%
--------------------------------------------------------------------------------

(1) Actual expense ratios for the fiscal year were lower than those shown in the
table because of voluntary fee waivers by the advisor. The advisor intends to
waive fees during the current fiscal year so that expense ratios do not exceed
the following amounts: Equity Index Fund, 0.35%; Large Cap Growth Fund, 0.80%;
Large Cap Value Fund, 0.80%; Mid Cap Growth Fund, 0.90%; Mid Cap Value Fund,
0.90%; Small Cap Growth Fund, 0.90%; Small Cap Value Fund, 0.90%; Equity Income
Fund, 0.75%; Real Estate Securities Fund, 0.80%; International Fund, 1.35%;
Emerging Markets Fund, 1.45%; Fixed Income Fund, 0.70%; Strategic Income Fund,
0.90%; and Prime Obligations Fund, 0.48%. Fee waivers may be discontinued at any
time.

7
PROSPECTUS - First American Strategy Funds
<PAGE>

Policies & Services
BUYING SHARES

You may become a shareholder in any of the funds with an initial investment of
$1,000 or more ($250 for a retirement plan or a Uniform Gifts to Minors
Act/Uniform Transfers to Minors Act (UGMA/UTMA) account). Additional
investments can be made for as little as $100 ($25 for a retirement plan or an
UGMA/UTMA account). The funds have the right to waive these minimum investment
requirements for employees of the funds' advisor and its affiliates. The funds
also have the right to reject any purchase order.

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CALCULATING YOUR SHARE PRICE

Your purchase price for fund shares will be their net asset value (NAV) --
there is no sales charge. The NAV of each fund's shares is generally calculated
as of the close of regular trading on the New York Stock Exchange (usually 3
p.m. Central time) every day the exchange is open.

A fund's NAV is equal to the value of its investments and other assets, less
any liabilities, divided by the number of fund shares. The assets of each fund
normally will consist primarily of shares of the underlying funds, which are
valued at their net asset values.

For the underlying funds, investments and other assets will be valued at their
market values. If market prices are not readily available for an investment or
if the advisor believes they are unreliable, fair value prices may be
determined in good faith using methods approved by the funds' board of
directors. Emerging Markets Fund, International Fund and Strategic Income Fund
will hold portfolio securities that trade on weekends or other days the funds
do not price their shares. Therefore, the net asset value of these underlying
funds' shares may change on days when you will not be able to purchase or
redeem your fund shares.

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HOW TO BUY SHARES

You may buy shares on any day the New York Stock Exchange is open. However,
purchases of shares may be restricted in the event of an early or unscheduled
close of the New York Stock Exchange. Your shares will be priced at the next
NAV calculated after your order is accepted by the fund. To make sure that your
order is accepted, follow the directions for purchasing shares given below.

BY PHONE

You may purchase shares by calling your investment professional or financial
institution, if they have a sales agreement with the funds' distributor. In
many cases, your order will be effective that day if received by your
investment professional or financial institution by the close of regular
trading on the New York Stock Exchange. In some cases, however, you will have
to transmit your request by an earlier time in order for your purchase request
to be effective that day. This allows your investment professional or financial
institution time to process your request and transmit it to the fund. Some
financial institutions may charge a fee for helping you purchase shares.
Contact your investment professional or financial institution for more
information.

If you are paying by wire, you may purchase shares by calling 1-800-637-2548
before 3 p.m. Central time. All information will be taken over the telephone,
and your order will be placed when the funds' custodian receives payment by
wire. Wire federal funds as follows:

U.S. Bank National Association, Minneapolis, MN
ABA Number 091000022

For Credit to: DST Systems, Inc.:
Account Number 160234580266

For Further Credit to (investor name and fund name)

You cannot purchase shares by wire on days when federally chartered banks are
closed.

BY MAIL

To purchase shares by mail, simply complete and sign a new account form,
enclose a check made payable to the fund you wish to invest in, and mail both
to:

First American Funds
c/o DST Systems, Inc.
P.O. Box 219382
Kansas City, Missouri 64121-9382

After you have established an account, you may continue to purchase shares by
mailing your check to First American Funds at the same address.

Please note the following:

* all purchases must be made in U.S. dollars.

* third-party checks, credit cards, credit card checks, and cash are not
accepted.

* if a check does not clear your bank, the funds reserve the right to cancel
the purchase, and you could be liable for any losses or fees incurred.

8
PROSPECTUS - First American Strategy Funds
<PAGE>

Policies & Services
BUYING SHARES CONTINUED

--------------------------------------------------------------------------------
INVESTING AUTOMATICALLY

To purchase shares as part of a savings discipline, you may add to your
investment on a regular basis by having $100 ($25 for a retirement plan or an
UGMA/UTMA account) or more automatically withdrawn from your bank account on a
periodic basis and invested in fund shares. You may also make automatic monthly
exchanges of your Class A shares of Prime Obligations Fund, a money market fund
in the First American family of funds.

You may apply for participation in this program through your investment
professional or financial institution or by calling 1-800-637-2548.

--------------------------------------------------------------------------------
COMPENSATION TO BROKERS AND FINANCIAL INSTITUTIONS

Although there is no sales charge when you purchase fund shares, your investment
professional or financial institution may receive compensation in connection
with your purchase. Each fund pays the funds' distributor an annual shareholder
servicing fee equal to 0.25% of the fund's average daily net assets to
compensate the distributor for providing services to shareholders. The
distributor may use this fee to compensate your investment professional or
financial institution for providing ongoing services to your account. The
advisor, the administrator or the distributor may pay additional fees to
investment professionals and financial institutions, using their own assets, in
exchange for sales and/or administrative services performed on behalf of the
broker's or financial institution's customers. The advisor may pay its
affiliates, U.S. Bancorp Investments, Inc. and U.S. Bancorp Piper Jaffray Inc.,
an amount equal to up to 3% of the net asset value of fund shares sold through
them.

9
PROSPECTUS - First American Strategy Funds
<PAGE>

Policies & Services
SELLING SHARES

--------------------------------------------------------------------------------
HOW TO SELL SHARES

You may sell your shares on any day when the New York Stock Exchange is open.
Your shares will be sold at the next NAV calculated after your order is
accepted by the fund, less any applicable redemption fee. To make sure that
your order is accepted, follow the directions for selling shares given below.

The proceeds from your sale normally will be mailed or wired within one day,
but in no event more than seven days, after your request is received in proper
form.

BY PHONE

If you purchased shares through a investment professional or financial
institution, simply call them to sell your shares. In many cases, your
redemption will be effective that day if received by your broker or financial
institution by the close of regular trading on the New York Stock Exchange. In
some cases, however, you will have to call by an earlier time in order for your
redemption to be effective that day. This allows your investment professional
or financial institution time to process your request and transmit it to the
fund. Contact your investment professional or financial institution directly
for more information.

If you did not purchase shares through a investment professional or financial
institution, you may sell your shares by calling 1-800-637-2548. Proceeds can
be wired to your bank account (if the proceeds are at least $1,000 and you have
previously supplied your bank account information to the transfer agent) or
sent to you by check. The funds reserve the right to limit telephone exchanges
to $50,000 per day.

If you recently purchased your shares by check or through the Automated
Clearing House (ACH), proceeds from the sale of those shares may not be
available until your check or ACH payment has cleared, which may take up to 10
calendar days from the date of purchase.

BY MAIL

To sell shares by mail, send a written request to your investment professional
or financial institution, or to the funds' transfer agent at the following
address:

First American Funds
c/o DST Systems, Inc.
P.O. Box 219382
Kansas City, Missouri 64121-9382

Your request should include the following information:

* Name of the fund

* Account number

* Dollar amount or number of shares redeemed

* Name on the account

* Signatures of all registered account owners

Signatures on a written request must be guaranteed if:

* you would like the proceeds from the sale to be paid to anyone other than to
the shareholder of record.

* you would like the check mailed to an address other than the address on the
funds' records.

* your redemption request is for $50,000 or more.

A signature guarantee assures that a signature is genuine and protects
shareholders from unauthorized account transfers. Banks, savings and loan
associations, trust companies, credit unions, broker-dealers and member firms
of a national securities exchange may guarantee signatures. Call your financial
institution to determine if it has this capability.

Proceeds from a written redemption request will be sent to you by check unless
otherwise specified in the request.

REDEMPTION FEE

Each fund imposes a redemption fee of 1% if you redeem your shares within 12
months of purchase. This fee, which is intended to discourage short-term
trading, is paid to the fund. The redemption fee will be based on the value of
your shares at the time of purchase or at the time of sale, whichever is less.
The charge does not apply to shares you acquired by reinvesting your dividend
or capital gain distributions. When you sell shares, they will be sold in the
order that minimizes your redemption fee.

The redemption fee will be waived for 401(k) plans and other institutional
accounts of the funds' advisor.

--------------------------------------------------------------------------------
SYSTEMATIC WITHDRAWALS

If your account has a value of $5,000 or more, you may redeem a specific dollar
amount from your account on a regular basis. To set up systematic withdrawals,
contact your broker or financial institution.

--------------------------------------------------------------------------------

ACCOUNTS WITH LOW BALANCES

Except for retirement plans and UGMA/UTMA accounts, if your account balance
falls below $500 as a result of selling or exchanging shares, the fund
reserves the right to either:

* Deduct a $25 annual account maintenance fee, which is intended to allocate
the costs of maintaining accounts more equitably among shareholders, or

* Close your account and send you the proceeds, less any applicable contingent
deferred sales charge.

Before taking any action, however, the fund will send you written notice of
the action it intends to take and give you 30 days to re-establish a minimum
account balance of $500.

10
PROSPECTUS - First American Strategy Funds
<PAGE>

Policies & Services
MANAGING YOUR INVESTMENT

--------------------------------------------------------------------------------
EXCHANGING SHARES

If your investment goals or your financial needs change, you may move from one
Strategy Fund to another. Exchanges are made based on the net asset value per
share of each fund at the time of the exchange. There is no fee to exchange
shares. If you exchange shares held for less than 12 months you do not have to
pay a redemption fee. Instead, the time you held shares of the "old" fund will
be added to the time you hold the shares of the "new" fund for purposes of
determining when the 12 month redemption fee period expires.

Shares of the Strategy Funds may not be exchanged for shares of the underlying
funds.

Before exchanging into any fund, be sure to read its prospectus carefully. A
fund may change or cancel its exchange policies at any time. You will be
notified of any changes. The funds have the right to limit exchanges to four
times per year.

BY PHONE

You may exchange shares by calling your investment professional, your financial
institution, or the funds' transfer agent, provided that both funds have
identical shareholder registrations. To request an exchange through the funds'
transfer agent, call 1-800-637-2548. Your instructions must be received by the
funds' transfer agent before 3 p.m. Central time, or by the time specified by
your investment professional or financial institution, in order for shares to
be exchanged the same day.

BY MAIL

To exchange shares by written request, please follow the procedures under
"Selling Shares." Be sure to include the names of both funds involved in the
exchange.

--------------------------------------------------------------------------------

TELEPHONE TRANSACTIONS

You may buy, sell or exchange shares by telephone, unless you elected on your
new account form to restrict this privilege. If you wish to reinstate this
option on an existing account, please call Investor Services at 1-800-637-2548
to request the appropriate form.

The funds and their agents will not be responsible for any losses that may
result from acting on wire or telephone instructions that they reasonably
believe to be genuine. The funds and their agents will each follow reasonable
procedures to confirm that instructions received by telephone are genuine,
which may include taping telephone conversations.

It may be difficult to reach the funds by telephone during periods of unusual
market activity. If you are unable to reach the funds or their agents by
telephone, please consider sending written instructions.

--------------------------------------------------------------------------------
STAYING INFORMED

SHAREHOLDER REPORTS

Shareholder reports are mailed twice a year, in November and May. They include
financial statements, performance information, a message from your portfolio
managers, and, on an annual basis, the auditors' report.

In an attempt to reduce shareholder costs and help eliminate duplication, the
funds will try to limit their mailings to one report for each address that
lists one or more shareholders with the same last name. If you would like
additional copies, please call 1-800-637-2548.

STATEMENTS AND CONFIRMATIONS

Statements summarizing activity in your account are mailed at least quarterly.
Confirmations are mailed following each purchase or sale of fund shares.

--------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS

Dividends from a fund's net investment income are declared and paid monthly.
Any capital gains are distributed at least once each year.

On the ex-dividend date for a distribution, a fund's share price is reduced by
the amount of the distribution. If you buy shares just before the ex-dividend
date, in effect, you "buy the dividend." You will pay the full price for the
shares and then receive a portion of that price back as a taxable distribution.

Dividend and capital gain distributions will be reinvested in additional shares
of the fund paying the distribution, unless you request that distributions be
reinvested in another First American fund or paid in cash. This request may be
made on your new account form or by writing to the fund. If you request that
your distributions be paid in cash but those distributions cannot be delivered
because of an incorrect mailing address, the undelivered distributions and all
future distributions will be reinvested in fund shares.

11
PROSPECTUS - First American Strategy Funds
<PAGE>

Policies & Services
MANAGING YOUR INVESTMENT CONTINUED

--------------------------------------------------------------------------------
TAXES

Some of the tax consequences of investing in the funds are discussed below.
More information about taxes is in the Statement of Additional Information.
However, because everyone's tax situation is unique, always consult your tax
professional about federal, state and local tax consequences.

TAXES ON DISTRIBUTIONS

Each fund pays its shareholders dividends from its net investment income and
any net capital gains that it has realized. For most investors, fund dividends
and distributions are considered taxable whether they are reinvested or taken
in cash (unless your investment is in an IRA or other tax-advantaged account).

Dividends from a fund's net investment income and short-term capital gains are
taxable as ordinary income. Distributions of a fund's long-term capital gains
are taxable as long-term capital gains, regardless of how long you have held
your shares. The funds expect that, as a result of their investment objectives
and strategies, their distributions will consist primarily of ordinary income.

TAXES ON TRANSACTIONS

The sale or exchange of fund shares will be a taxable event for you and may
result in a capital gain or loss. The gain or loss will be considered long-term
if you have held your shares for more than one year. A gain or loss on shares
held for one year or less is considered short-term and is taxed at the same
rates as ordinary income.

12
PROSPECTUS - First American Strategy Funds
<PAGE>

Additional Information
MANAGEMENT

U.S. Bank National Association (U.S. Bank), acting through its First American
Asset Management division, is the investment advisor to the Strategy Funds and
the underlying funds. First American Asset Management provides investment
management services to individuals and institutions, including corporations,
foundations, pensions and retirement plans. As of December 31, 1999, it had
more than $78 billion in assets under management, including investment company
assets of more than $33 billion. As investment advisor, First American Asset
Management manages the funds' business and investment activities, subject to
the authority of the board of directors.

Each fund is required under its investment advisory agreement to pay the
investment advisor a monthly fee for providing investment advisory services
equal to, on an annual basis, 0.25% of the fund's average daily net assets.
During the fiscal year ended September 30, 1999, however, First American Asset
Management waived the payment of all investment advisory fees. First American
Asset Management also is the investment
advisor for each of the underlying funds.

INVESTMENT ADVISOR

First American Asset Management
601 Second Avenue South
Minneapolis, Minnesota 55402

UNDERLYING FUND SUB-ADVISORS

Federated Global Investment Management Corp.
175 Water Street
New York, New York 10038-4964

The above mentioned subsidiary of Federated Investors is sub-advisor to
Strategic Income Fund. The sub-advisor has been retained by the fund's
investment advisor and is paid a portion of the advisory fee.

Federated Global Investment Management Corp. manages the fund's investments in
investment grade and high-yield foreign government and foreign corporate debt
obligations. First American Asset Management manages the fund's investments in
U.S. government obligations, investment grade and high yield domestic debt
obligations and U.S. dollar denominated foreign corporate debt obligations and
determines how the fund's assets will be allocated among the three sectors in
which the fund invests.

The sub-advisor and other subsidiaries of Federated Investors serve as
investment advisors to a number of investment companies and private accounts.

Marvin & Palmer Associates, Inc.
1201 North Market Street, Suite 2300
Wilmington, Delaware 19801

Marvin & Palmer Associates (Marvin & Palmer) is the sub-advisor to Emerging
Markets Fund and International Fund, and is responsible for the investment and
reinvestment of those funds' assets and the placement of brokerage transactions
for those funds. Marvin & Palmer has been retained by the funds' investment
advisor and is paid a portion of the advisory fee.

A privately held company founded in 1986, Marvin & Palmer is engaged in the
management of global, non-United States, domestic and emerging markets equity
portfolios, principally for institutional accounts. As of December 31, 1999,
the sub-advisor managed a total of approximately $14 billion in investments.

DISTRIBUTOR

Sei Investments Distribution Co.
Oaks, Pennsylvania 19456

DIRECT FUND CORRESPONDENCE TO:

First American Funds
P.O. Box 1330
Minneapolis, MN 55440-1330

ADDITIONAL COMPENSATION

U.S. Bank and other affiliates of U.S. Bancorp may act as fiduciary with
respect to plans subject to the Employee Retirement Income Security Act of 1974
(ERISA) and other trust and agency accounts that invest in the funds. As
described above, U.S. Bank receives compensation for acting as the investment
advisor to the Strategy Funds and the underlying funds. U.S. Bank and its
affiliates also receive compensation in connection with the following:

CUSTODY SERVICES. U.S. Bank provides or compensates others to provide custody
services to the funds. U.S. Bank is paid monthly fees equal, on an annual
basis, to 0.03% of a fund's average daily net assets. In addition, U.S. Bank is
reimbursed for its out-of-pocket expenses incurred while providing custody
services to the funds. U.S. Bank also acts as custodian for the underlying
funds and is compensated for its services at the same rate (except that it
receives fees from Emerging Markets Fund and International Fund equal to 0.10%
of each fund's average daily net assets).

ADMINISTRATION SERVICES. U.S. Bank provides or compensates others to provide
administrative services to all open-end funds in the First American family of
funds. These services include general administrative and accounting services,
transfer agency and dividend disbursing services, and shareholder services.
U.S. Bank receives total fees equal, on an annual basis, to 0.12% of the
aggregate average daily net assets of all open-end mutual funds in the First
American fund family up to $8 billion and 0.105% of the aggregate average daily
net assets of all open-end mutual funds in the First American fund family in
excess of $8 billion. These fees are allocated among the funds in the First
American family of funds on the basis of their relative net asset values.
Additionally, the funds pay U.S. Bank fees based upon the number of funds and
accounts maintained.

13
PROSPECTUS - First American Strategy Funds
<PAGE>

Additional Information
MANAGEMENT CONTINUED

SECURITIES LENDING SERVICES. In connection with lending their portfolio
securities, the funds pay administrative and custodial fees to U.S. Bank which
are equal to 40% of the funds' income from these securities lending
transactions.

BROKERAGE TRANSACTIONS. When purchasing and selling portfolio securities for
the funds, the funds' investment advisor may place trades through its
affiliates, U.S. Bancorp Investments, Inc. and U.S. Bancorp Piper Jaffray Inc.,
which will earn commissions on these transactions.

SHAREHOLDER SERVICING FEES. To the extent that fund shares are held through U.S.
Bank or its broker-dealer affiliates, U.S. Bancorp Investments, Inc. and U.S.
Bancorp Piper Jaffray Inc., these entities may receive shareholder servicing
fees from the funds' distributor.

PORTFOLIO MANAGEMENT

Each fund's investments are managed by a team of persons associated with First
American Asset Management.

14
PROSPECTUS - First American Strategy Funds
<PAGE>

Additional Information
MORE ABOUT THE FUNDS

--------------------------------------------------------------------------------
OBJECTIVES

The funds' objectives, which are described in the "Fund Summaries" section, may
be changed without shareholder approval. If a fund's objectives change, you
will be notified at least 30 days in advance. Please remember: There is no
guarantee that any fund will achieve its objectives.

--------------------------------------------------------------------------------
INVESTMENT STRATEGIES

The funds' main investment strategies are discussed in the "Fund Summaries"
section. These are the strategies that the funds' investment advisor believes
are most likely to be important in trying to achieve the funds' objectives. You
should be aware that each fund may also use strategies and invest in securities
that are not described in this prospectus, but that are described in the
Statement of Additional Information (SAI). For a copy of the SAI, call Investor
Services at 1-800-637-2548.

--------------------------------------------------------------------------------
PORTFOLIO TURNOVER

The funds' investment advisor expects to make asset re-allocation decisions on a
monthly basis, although it may make these decisions more frequently if warranted
by market conditions. Although the funds are expected to have low portfolio
turnover rates, the underlying funds may trade securities frequently, resulting,
from time to time, in an annual portfolio turnover rate of over 100%. Trading of
securities may produce capital gains, which are taxable to shareholders,
including the funds, when distributed. Active trading may also increase the
amount of commissions or mark-ups to broker-dealers that the underlying fund
pays when it buys and sells securities. The "Financial Highlights" section of
this prospectus shows each fund's historical portfolio turnover rate.

15
PROSPECTUS - First American Strategy Funds
<PAGE>

Additional Information
THE UNDERLYING FUNDS

The objectives, main investment strategies and main risks of the underlying
funds are summarized below. There is no assurance that any of the underlying
funds' investment objectives will be achieved. The investment objectives of the
underlying funds, except for Prime Obligations Fund, may be changed without
shareholder approval.

Additional information about the underlying funds is contained in their
prospectuses and statements of additional information. You can obtain copies of
these documents by writing to SEI Investments Distribution Co., Oaks,
Pennsylvania 19456, or by calling 1-800-637-2548.

--------------------------------------------------------------------------------
EQUITY INDEX FUND

OBJECTIVE

Equity Index Fund's objective is to provide investment results that correspond
to the performance of the Standard & Poor's 500 Composite Index (S&P 500).

MAIN INVESTMENT STRATEGIES

Under normal market conditions, Equity Index Fund invests at least 90% of its
total assets in common stocks included in the S&P 500. The S&P 500 is a
market-value weighted index consisting of 500 stocks chosen for market size,
liquidity, and industry representation.

The fund's advisor believes that the fund's objective can best be achieved by
investing in common stocks of approximately 90% to 100% of the issues included
in the S&P 500, depending on the size of the fund. A computer program is used
to identify which stocks should be purchased or sold in order to replicate, as
closely as possible, the composition of the S&P 500.

Because the fund may not always hold all of the stocks included in the S&P 500,
and because the fund has expenses and the index does not, the fund will not
duplicate the index's performance precisely. However, the fund's advisor
believes there should be a close correlation between the fund's performance and
that of the S&P 500 in both rising and falling markets.

The fund will attempt to achieve a correlation between the performance of its
portfolio and that of the S&P 500 of at least 95%, without taking into account
expenses of the fund. A perfect correlation would be indicated by a figure of
100%, which would be achieved if the fund's net asset value, including the
value of its dividends and capital gains distributions, increased or decreased
in exact proportion to changes in the S&P 500. If the fund is unable to achieve
a correlation of 95% over time, the fund's board of directors will consider
alternative strategies for the fund.

The fund also may invest up to 10% of its total assets in stock index futures
contracts, options on stock indices, options on stock index futures and index
participation contracts based on the S&P 500. The fund makes these investments
to maintain the liquidity needed to meet redemption requests, to increase the
level of fund assets devoted to replicating the composition of the S&P 500 and
to reduce transaction costs.

To generate additional income, the fund may lend securities representing up to
one-third of the value of its total assets to broker-dealers, banks and other
institutions.

MAIN RISKS

The main risks of investing in Equity Index Fund include:

* Risks of Common Stocks

Stocks may decline significantly in price over short or extended periods of
time. Price changes may affect the market as a whole, or they may affect
only a particular company, industry, or sector of the market.

* Failure to Match Performance of S&P 500
The fund's ability to replicate the performance of the S&P 500 may be
affected by, among other things, changes in securities markets, the manner
in which Standard & Poor's calculates the performance of the S&P 500, the
amount and timing of cash flows into and out of the fund, commissions, sales
charges (if any) and other expenses.

* Risks of Options and Futures
The fund will suffer a loss in connection with its use of options, futures
contracts and options on futures contracts if securities prices do not move
in the direction anticipated by the fund's advisor when entering into the
options or the futures contracts.

* Risks of Securities Lending
The fund is subject to the risk that the other party to a securities lending
agreement will default on its obligations.

--------------------------------------------------------------------------------
LARGE CAP GROWTH FUND

OBJECTIVE

Large Cap Growth Fund's objective is long-term growth of capital.

MAIN INVESTMENT STRATEGIES

Under normal market conditions, Large Cap Growth Fund invests primarily (at
least 75% of its total assets) in common stocks of companies that have market
capitalizations of at least $5 billion at the time of purchase. The advisor
will select companies that it believes exhibit the potential for superior
growth based on factors such as:

* Above average growth in revenue and earnings

* Strong competitive position

* Strong management

* Sound financial condition

Up to 25% of the fund's total assets may be invested in securities of foreign
issuers which are either listed on a United States stock exchange or
represented by American Depositary Receipts.

16
PROSPECTUS - First American Strategy Funds
<PAGE>

Additional Information
THE UNDERLYING FUNDS CONTINUED

To generate additional income, the fund may lend securities representing up to
one-third of the value of its total assets to broker-dealers, banks and other
institutions.

MAIN RISKS

The main risks of investing in Large Cap Growth Fund include:

* Risks of Common Stocks
Stocks may decline significantly in price over short or extended periods of
time. Price changes may occur in the market as a whole, or they may occur in
only a particular company, industry or sector of the market. In addition,
growth stocks and/or large capitalization stocks may underperform the market
as a whole.

* Foreign Security Risk
Securities of foreign issuers, even when dollar-denominated and publicly
traded in the United States, may involve risks not associated with the
securities of domestic issuers, including the risks of adverse currency
fluctuations and of political or social instability or diplomatic
developments that could adversely affect the securities.

* Risks of Securities Lending
The fund is subject to the risk that the other party to a securities lending
agreement will default on its obligations.

--------------------------------------------------------------------------------
LARGE CAP VALUE FUND

OBJECTIVE

Large Cap Value Fund's primary objective is capital appreciation. Current
income is a secondary objective of the fund.

MAIN INVESTMENT STRATEGIES

Under normal market conditions, Large Cap Value Fund invests primarily (at
least 75% of its total assets) in common stocks of companies that cover a broad
range of industries and that have market capitalizations of at least $5 billion
at the time of purchase. In selecting stocks, the fund's advisor invests in
securities that it believes:

* are undervalued relative to other securities in the same industry or market.

* exhibit good or improving fundamentals.

* exhibit an identifiable catalyst that could close the gap between market value
and fair value over the next one to two years.

Up to 25% of the fund's total assets may be invested in securities of foreign
issuers which are either listed on a United States stock exchange or
represented by American Depositary Receipts.

To generate additional income, the fund may lend securities representing up to
one-third of the value of its total assets to broker-dealers, banks and other
institutions.

MAIN RISKS

The main risks of investing in Large Cap Value Fund include:

* Risks of Common Stocks
Stocks may decline significantly in price over short or extended periods of
time. Price changes may occur in the market as a whole, or they may occur in
only a particular company, industry or sector of the market. In addition,
value stocks and/or large capitalization stocks may underperform the market
as a whole.

* Risks of Securities Lending
The fund is subject to the risk that the other party to a securities lending
agreement will default on its obligations.

--------------------------------------------------------------------------------
MID CAP GROWTH FUND

OBJECTIVE

Mid Cap Growth Fund has an objective of growth of capital.

MAIN INVESTMENT STRATEGIES

Under normal market conditions, Mid Cap Growth Fund invests primarily (at least
75% of total assets) in common stocks of mid-capitalization companies, defined
as companies that have market capitalizations at the time of purchase within
the range of market capitalizations of companies constituting the Russell
Midcap Index. This index measures the performance of the 800 smallest companies
in the Russell 1000 Index (which is made up of the 1,000 largest U.S. companies
based on total market capitalization). As of the date of this prospectus,
market capitalizations of companies in the Russell Midcap Index ranged from
approximately $223 million to $37 billion.

The advisor will select companies that it believes exhibit the potential for
superior growth based on factors such as:

* Above average growth in revenue and earnings

* Strong competitive position

* Strong management

* Sound financial condition

Up to 25% of the fund's total assets may be invested in securities of foreign
issuers which are either listed on a United States stock exchange or
represented by American Depositary Receipts.

To generate additional income, the fund may lend securities representing up to
one-third of the value of its total assets to broker-dealers, banks and other
institutions.

17
PROSPECTUS - First American Strategy Funds
<PAGE>

Additional Information
THE UNDERLYING FUNDS CONTINUED

MAIN RISKS

The main risks of investing in Mid Cap Growth Fund include:

* Risks of Common Stocks

Stocks may decline significantly in price over short or extended periods of
time. Price changes may occur in the market as a whole, or they may occur in
only a particular company, industry or sector of the market. In addition,
growth stocks and/or mid-cap stocks may underperform the market as a whole.

* Risks of Mid-Cap Stocks
While stocks of mid-cap companies may be slightly less volatile than those
of small-cap companies, they still involve substantial risk and their prices
may be subject to more abrupt or erratic movements than those of larger,
more established companies or the market averages in general.

* Risks of Securities Lending
The fund is subject to the risk that the other party to a securities lending
agreement will default on its obligations.

--------------------------------------------------------------------------------
MID CAP VALUE FUND

OBJECTIVE

Mid Cap Value Fund has an objective of capital appreciation.

MAIN INVESTMENT STRATEGIES

Under normal market conditions, Mid Cap Value Fund invests primarily (at least
75% of total assets) in common stocks of mid capitalization companies, defined
as companies that have market capitalizations at the time of purchase within
the range of market capitalizations of companies constituting the Russell
Midcap Index. This index measures the performance of the 800 smallest companies
in the Russell 1000 Index (which is made up of the 1,000 largest U.S. companies
based on total market capitalization). As of the date of this prospectus,
market capitalizations of companies in the Russell Midcap Index ranged from
approximately $223 million to $37 billion.

In selecting stocks, the fund's advisor invests in securities it believes:

* are undervalued relative to other securities in the same industry or market.

* exhibit good or improving fundamentals.

* exhibit an identifiable catalyst that could close the gap between market value
and fair value over the next one to two years.

To generate additional income, the fund may lend securities representing up to
one-third of the value of its total assets to broker-dealers, banks and other
institutions.

MAIN RISKS

The main risks of investing in Mid Cap Value Fund include:

* Risks of Common Stocks

Stocks may decline significantly in price over short or extended periods of
time. Price changes may occur in the market as a whole, or they may occur in
only a particular company, industry or sector of the market. In addition,
value stocks and/or mid-cap stocks may underperform the market as a whole.

* Risks of Securities Lending
The fund is subject to the risk that the other party to a securities lending
agreement will default on its obligations.

--------------------------------------------------------------------------------
SMALL CAP GROWTH FUND

OBJECTIVE

Small Cap Growth Fund has an objective of growth of capital.

MAIN INVESTMENT STRATEGIES

Under normal market conditions, Small Cap Growth Fund invests primarily (at
least 75% of total assets) in common stocks of small-capitalization companies,
defined as companies that have market capitalizations at the time of purchase
within the range of market capitalizations of companies constituting the
Russell 2000 Index. This index measures the performance of the 2,000 smallest
companies in the Russell 3000 Index (which is made up of the 3,000 largest U.S.
companies based on total market capitalization). As of the date of this
prospectus, market capitalizations of companies in the Russell 2000 Index
ranged from approximately $11 million to $13 billion.

The advisor will select companies that it believes exhibit the potential for
superior growth based on factors such as:

* Above average growth in revenue and earnings

* Strong competitive position

* Strong management

* Sound financial condition

Up to 25% of the fund's total assets may be invested in securities of foreign
issuers which are either listed on a United States stock exchange or
represented by American Depositary Receipts.

To generate additional income, the fund may lend securities representing up to
one-third of the value of its total assets to broker-dealers, banks and other
institutions.

18
PROSPECTUS - First American Strategy Funds
<PAGE>

Additional Information
THE UNDERLYING FUNDS CONTINUED

MAIN RISKS

The main risks of investing in Small Cap Growth Fund include:

* Risks of Common Stocks

Stocks may decline significantly in price over short or extended periods of
time. Price changes may occur in the market as a whole, or they may occur in
only a particular company, industry or sector of the market. In addition,
growth stocks and/or stocks of small-capitalization companies may
underperform the market as a whole.

* Risks of Small-Cap Stocks
Stocks of small-capitalization companies involve substantial risk. These
stocks historically have experienced greater price volatility than stocks of
larger-capitalization companies, and they may be expected to do so in the
future.

* Risks of Securities Lending
The fund is subject to the risk that the other party to a securities lending
agreement will default on its obligations.

--------------------------------------------------------------------------------
SMALL CAP VALUE FUND

OBJECTIVE

Small Cap Value Fund has an objective of capital appreciation.

MAIN INVESTMENT STRATEGIES

Under normal market conditions, Small Cap Value Fund invests primarily (at
least 75% of total assets) in common stocks of small-capitalization companies,
defined as companies that have market capitalizations at the time of purchase
within the range of market capitalizations of companies constituting the
Russell 2000 Index. This index measures the performance of the 2,000 smallest
companies in the Russell 3000 Index (which is made up of the 3,000 largest U.S.
companies based on total market capitalization). As of the date of this
prospectus, market capitalizations of companies in the Russell 2000 Index
ranged from approximately $11 million to $13 billion.

In selecting stocks, the fund's advisor invests in securities it believes:

* are undervalued relative to other securities in the same industry or market.

* exhibit good or improving fundamentals.

* exhibit an identifiable catalyst that could close the gap between market value
and fair value over the next one to two years.

To generate additional income, the fund may lend securities representing up to
one-third of the value of its total assets to broker-dealers, banks and other
institutions.

MAIN RISKS

The main risks of investing in Small Cap Value Fund include:

* Risks of Common Stocks

Stocks may decline significantly in price over short or extended periods of
time. Price changes may occur in the market as a whole, or they may occur in
only a particular company, industry or sector of the market. In addition,
value stocks and/or stocks of small-capitalization companies may
underperform the market as a whole.

* Risks of Securities Lending
The fund is subject to the risk that the other party to a securities lending
agreement will default on its obligations.

--------------------------------------------------------------------------------
EQUITY INCOME FUND

OBJECTIVE

Equity Income Fund's objective is long-term growth of capital and income.

MAIN INVESTMENT STRATEGIES

Under normal market conditions, Equity Income Fund invests primarily (at least
65% of its total assets) in equity securities of companies which the fund's
investment advisor believes are characterized by:

* the ability to pay above average dividends.

* the ability to finance expected growth.

* strong management.

The fund will attempt to maintain a dividend that will grow quickly enough to
keep pace with inflation. As a result, higher-yielding equity securities will
generally represent the core holdings of the fund. However, the fund also may
invest in lower-yielding, higher growth equity securities if the advisor
believes they will help balance the portfolio. The fund's equity securities
include common stocks and preferred stocks and corporate debt securities which
are convertible into common stocks. All securities held by the fund will
provide current income at the time of purchase.

The fund invests in convertible debt securities in pursuit of both long-term
growth of capital and income. The securities' conversion features provide
long-term growth potential, while interest payments on the securities provide
income. The fund may invest in convertible debt securities without regard to
their ratings, and therefore may hold convertible debt securities which are
rated lower than investment grade.

Up to 25% of the fund's total assets may be invested in securities of foreign
issuers which are either listed on a United States stock exchange or
represented by American Depositary Receipts.

19
PROSPECTUS - First American Strategy Funds
<PAGE>

Additional Information
THE UNDERLYING FUNDS CONTINUED

To generate additional income, the fund may lend securities representing up to
one-third of the value of its total assets to broker-dealers, banks and other
institutions.

MAIN RISKS

The main risks of investing in Equity Income Fund include:

* Interest Rate Risk
Debt securities typically decrease in value when interest rates rise. This
risk is usually greater for longer-term debt securities.

* Credit Risk
An issuer of debt securities may not make timely principal or interest
payments on its securities, or the other party to a contract (such as a
securities lending agreement) may default on its obligations.

* Risks of Non-Investment Grade Securities
The fund may invest in securities which are rated lower than investment
grade. These securities, which are commonly called "high-yield" securities
or "junk bonds," generally have more volatile prices and carry more risk to
principal than investment grade securities. High yield securities may be
more susceptible to real or perceived adverse economic conditions than
investment grade securities. In addition, the secondary trading market may
be less liquid.

--------------------------------------------------------------------------------
REAL ESTATE SECURITIES FUND

OBJECTIVE

Real Estate Securities Fund's objective is to provide above average current
income and long-term capital appreciation.

MAIN INVESTMENT STRATEGIES

Under normal market conditions, Real Estate Securities Fund invests primarily
(at least 65% of its total assets) in income producing common stocks of
publicly traded companies engaged in the real estate industry. These companies
derive at least 50% of their revenues or profits from the ownership,
construction, management, financing or sale of real estate, or have at least
50% of the fair market value of their assets invested in real estate. The
advisor will select companies that it believes exhibit strong management teams,
a strong competitive position, above average growth in revenues and a sound
balance sheet.

A majority of the fund's total assets will be invested in real estate
investment trusts (REITs). REITs are publicly traded corporations or trusts
that acquire, hold and manage residential or commercia l real estate. REITs
generally can be divided into the following three types:

* equity REITs, which invest the majority of their assets directly in real
property and derive their income primarily from rents and capital gains or
real estate appreciation.

* mortgage REITs, which invest the majority of their assets in real estate
mortgage loans and derive their income primarily from interest payments.

* hybrid REITs, which combine the characteristics of equity REITs and mortgage
REITs.

The fund expects to emphasize investments in equity REITs, although it may
invest in all three kinds of REITs.

To generate additional income, the fund may lend securities representing up to
one-third of the value of its total assets to broker-dealers, banks and other
institutions.

MAIN RISKS

The main risks of investing in Real Estate Securities Fund include:

* Risks of Common Stocks

* Risks of the Real Estate Industry
Because the fund invests primarily in the real estate industry, it is
particularly susceptible to risks associated with that industry. The real
estate industry has been subject to substantial fluctuations and declines on
a local, regional and national basis in the past and may continue to be in
the future.

* Risk of REITs
There are risks associated with direct investments in REITs. Equity REITs
will be affected by changes in the values of and incomes from the properties
they own, while mortgage REITs may be affected by the credit quality of the
mortgage loans they hold. REITs are dependent on specialized management
skills which may affect their ability to generate cash flow for operating
purposes and to make distributions to shareholders or unitholders.

* Risks of Non-Diversification
The fund is non-diversified. This means that it may invest a larger portion
of its assets in a limited number of companies than a diversified fund.
Because a relatively high percentage of the fund's assets may be invested in
the securities of a limited number of issuers, and because those issuers
generally will be in the real estate industry, the fund's portfolio
securities may be more susceptible to any single economic or regulatory
occurrence than the portfolio securities of a diversified fund.

20
PROSPECTUS - First American Strategy Funds
<PAGE>

Additional Information
THE UNDERLYING FUNDS CONTINUED

* Risks of Securities Lending
The fund is subject to the risk that the other party to a securities lending
agreement will default on its obligations.

--------------------------------------------------------------------------------
EMERGING MARKETS FUND

OBJECTIVE

Emerging Markets Fund has an objective of long-term growth of capital.

MAIN INVESTMENT STRATEGIES

Under normal market conditions, Emerging Markets Fund invests primarily (at
least 65% of its total assets) in equity securities from the world's emerging
markets. Normally, the fund will invest in securities traded in at least six
foreign countries.

A country is considered to have an "emerging market" if it has a relatively low
gross national product per capita compared to the world's major economies, and
the potential for rapid economic growth. Countries with emerging markets
include:

* those that have an emerging stock market (as defined by the International
Financial Corporation).

* those with low- to middle-income economies (according to the World Bank).

* those listed in World Bank publications as "developing."

In choosing investments for the fund, the fund's sub-advisor generally places
primary emphasis on country selection. This is followed by the selection of
industries or sectors within or across countries and the selection of
individual stocks within those industries or sectors. The fund is not subject
to any restrictions on the size of the companies in which it invests and it may
invest in smaller capitalization companies.

Equity securities in which the fund invests include common and preferred stock.
In addition, the fund may invest in securities representing underlying
international securities, such as American Depositary Receipts and European
Depositary Receipts, and in securities of other investment companies.

In order to hedge against adverse movements in currency exchange rates, the
fund may enter into forward foreign currency exchange contracts.

To generate additional income, the fund may lend securities representing up to
one-third of the value of its total assets to broker-dealers, banks and other
institutions.

MAIN RISKS

The main risks of investing in Emerging Markets Fund include:

* Risks of Equity Securities
Equity securities may decline significantly in price over short or extended
periods of time. Price changes may occur in the world market as a whole, or
they may occur in only a particular country, company, industry or sector of
the world market.

* Risks of International Investing
International investing involves risks not typically associated with
domestic investing. Because of these risks, and because of the sub-advisor's
ability to invest substantial portions of the fund's assets in a small
number of countries, the fund may be subject to greater volatility than
mutual funds that invest principally in domestic securities. Risks of
international investing include adverse currency fluctuations, potential
political and economic instability, limited liquidity and volatile prices of
non-U.S. securities, limited availability of information regarding non-U.S.
companies, investment and repatriation restrictions, and foreign taxation.

* Risks of Emerging Markets
The risks of international investing are particularly significant in
emerging markets. Investing in emerging markets generally involves exposure
to economic structures that are less diverse and mature, and to political
systems that are less stable, than those of developed countries. In
addition, issuers in emerging markets typically are subject to a greater
degree of change in earnings and business prospects than are companies in
developed markets.

* Risks of Smaller Capitalization Companies
Stocks of smaller capitalization companies involve substantial risk and
their prices may be subject to more abrupt or erratic movements than those
of larger, more established companies or of market averages in general.

* Risks of Foreign Currency Hedging Transactions
If the sub-advisor's forecast of exchange rate movements is incorrect, the
fund may realize losses on its foreign currency transactions. In addition,
the fund's hedging transactions may prevent the fund from realizing the
benefits of a favorable change in the value of foreign currencies.

* Risks of Securities Lending
The fund is subject to the risk that the other party to a securities lending
agreement will default on its obligations.

--------------------------------------------------------------------------------
INTERNATIONAL FUND

OBJECTIVE

International Fund has an objective of long-term growth of capital.

MAIN INVESTMENT STRATEGIES

Under normal market conditions, International Fund invests primarily (at least
65% of its total assets) in equity securities that trade in markets other than
the United States. These securities generally are issued by companies:

* that are domiciled in countries other than the United States, or

* that derive at least 50% of either their revenues or their pre-tax income from
activities outside of the United States.

Normally, the fund will invest in securities traded in at least three foreign
countries.

21
PROSPECTUS - First American Strategy Funds
<PAGE>

Additional Information
THE UNDERLYING FUNDS CONTINUED

In choosing investments for the fund, the fund's sub-advisor generally places
primary emphasis on country selection. This is followed by the selection of
industries or sectors within or across countries and the selection of
individual stocks within those industries or sectors. Investments are expected
to be made primarily in developed markets and larger capitalization companies.
However, the fund also has the ability to invest in emerging markets and
smaller capitalization companies.

In order to hedge against adverse movements in currency exchange rates, the
fund may enter into forward foreign currency exchange contracts.

To generate additional income, the fund may lend securities representing up to
one-third of the value of its total assets to broker-dealers, banks and other
institutions.

MAIN RISKS

The main risks of investing in International Fund include:

* Risks of Securities Lending
The fund is subject to the risk that the other party to a securities lending
agreement will default on its obligations.

--------------------------------------------------------------------------------
FIXED INCOME FUND

OBJECTIVE

Fixed Income Fund's objective is to provide investors with high current income
consistent with limited risk to capital.

MAIN INVESTMENT STRATEGIES

Under normal market conditions, Fixed Income Fund invests in investment grade
debt securities, such as:

* U.S. government securities, (securities issued or guaranteed by the U.S.
government or its agencies or instrumentalities), including zero coupon
securities.

* mortgage- and asset-backed securities.

* corporate debt obligations.

Fund managers select securities using a "top-down" approach, which begins with
the formulation of their general economic outlook. Following this, various
sectors and industries are analyzed and selected for investment. Finally, fund
managers select individual securities within these sectors or industries.

Debt securities in the fund will be rated investment grade at the time of
purchase or, if unrated, determined to be of comparable quality by the fund's
advisor. At least 65% of the fund's debt securities must be either U.S.
government securities or securities that have received at least an A or
equivalent rating. Unrated securities will not exceed 25% of the fund's total
assets.

At least 65% of the fund's total assets will be invested in fixed rate
obligations.The fund may invest up to 15% of its total assets in foreign
securities payable in U.S. dollars.

Under normal market conditions the fund attempts to maintain a weighted average
effective maturity for its portfolio securities of 15 years or less and an
average effective duration of three to eight years. The fund's weighted average
effective maturity and effective duration are measures of how the fund may
react to interest rate changes.

To generate additional income, the fund may lend securities representing up to
one-third of the value of its total assets to broker-dealers, banks and other
institutions. It also may invest up to 25% of total assets in dollar roll
transactions. In a dollar roll transaction, the fund sells mortgage-backed
securities for delivery in the current month while contracting with the same
party to repurchase similar securities at a future date.

22
PROSPECTUS - First American Strategy Funds
<PAGE>

Additional Information

THE UNDERLYING FUNDS CONTINUED

MAIN RISKS

The main risks of investing in Fixed Income Fund include:

* Interest Rate Risk
Debt securities typically decrease in value when interest rates rise. This
risk is usually greater for longer-term debt securities. One measure of
interest rate risk is effective duration which measures how much the value
of a security is expected to change with a given change in interest rates.
The longer a security's effective duration, the more sensitive its price to
changes in interest rates. For example, if interest rates were to increase
by one percentage point, the market value of a bond with an effective
duration of five years would decrease by 5%, with all other factors being
constant. However, all other facts are rarely constant. Effective duration
is based on assumptions and subject to a number of limitations. It is most
useful when interest rate changes are small, rapid and occur equally in
short-term and long-term securities. In addition, it is difficult to
calculate precisely for bonds with prepayment options, such as
mortgage-related securities, because the calculation requires assumptions
about prepayment rates. For these reasons, the effective durations of funds
which invest a significant portion of their assets in mortgage-related
securities can be greatly affected by changes in interest rates.

* Income Risk
The fund's income could decline due to falling market interest rates.

* Call Risk
During periods of falling interest rates, a bond issuer may "call" -- or
repay -- its high-yielding bonds before their maturity date. The fund would
then be forced to invest the unanticipated proceeds at lower interest rates,
resulting in a decline in the fund's income.

* Risks of Mortgage- and Asset-Backed Securities
Falling interest rates could cause faster than expected prepayments of the
obligations underlying mortgage- and asset-backed securities, which the fund
would have to invest at lower interest rates. On the other hand, rising
interest rates could cause prepayments of the obligations to decrease,
extending the life of mortgage- and asset-backed securities with lower
payment rates. For additional explanation, see "Prepayment Risk" and
"Extension Risk" in "More About The Funds -- Investment Strategies."

* Risks of Dollar Roll Transactions
The use of mortgage dollar rolls could increase the volatility of the fund's
share price. It could also diminish the fund's investment performance if the
advisor does not predict mortgage prepayments and interest rates correctly.

--------------------------------------------------------------------------------
STRATEGIC INCOME FUND

OBJECTIVE

Strategic Income Fund's objective is to provide investors with a high level of
current income.

MAIN INVESTMENT STRATEGIES

Under normal market conditions, Strategic Income Fund invests primarily (at
least 65% of its total assets) in a combination of:

* securities issued or guaranteed by the U.S. government or its agencies or
instrumentalities, including mortgage-backed securities, and investment grade
debt obligations issued by domestic issuers.

* high-yield (non-investment grade) debt obligations issued by domestic issuers.

* investment grade and high-yield debt obligations issued by foreign governments
and other foreign issuers.

Based upon historical returns, the fund's advisor expects these three
categories of investments to have different returns and risks under similar
market conditions. The advisor relies on the differences in the expected
performance of each category to manage risks by allocating the fund's portfolio
among the three categories above. The advisor also seeks to enhance the fund's
performance by allocating more of its portfolio to the category that the
advisor expects to offer the best balance between risk and return. Normally,
the fund's assets will be invested in each of these three categories, with no
more than 50% invested in any one category. However, the fund may from time to
time invest up to 100% of its total assets in any one category if the advisor
believes it will help the fund achieve its objective without undue risk to
principal.

The fund's foreign investments may include investments in emerging markets.

The fund's investments may include securities which do not pay interest
currently, such as zero coupon securities and delayed interest securities. The
fund also may invest in payment-in-kind bonds, where interest is paid in other
securities rather than cash.

In addition to debt obligations, the fund may invest in preferred stock,
convertible securities and equity securities, including common stock and
warrants. These investments may be denominated in U.S. dollars or foreign
currencies.

23
PROSPECTUS - First American Strategy Funds
<PAGE>

Additional Information
THE UNDERLYING FUNDS CONTINUED

There is no minimum rating requirement for securities in which the fund may
invest (which means that the fund may invest in lower-rated securities or
unrated securities of comparable quality, commonly referred to as "junk
bonds"). In addition, there is no limitation on the average maturity or average
effective duration of securities held by the fund.

MAIN RISKS

The main risks of investing in Strategic Income Fund include:

* Interest Rate Risk
Debt securities typically decrease in value when interest rates rise. This
risk is usually greater for longer-term debt securities.

* Risks of High-Yield Securities
A significant portion of the fund's portfolio may consist of lower-rated
debt obligations, which are commonly called "high-yield" securities or "junk
bonds." High-yield securities generally have more volatile prices and carry
more risk to principal than investment grade securities.

* Risks of Foreign Securities
Investing in foreign securities involves risks not typically associated with
U.S. investing. Risks of foreign investing include adverse currency
fluctuations, potential political and economic instability, limited
liquidity and volatile prices of non-U.S. securities, limited availability
of information regarding non-U.S. companies, investment and repatriation
restrictions and foreign taxation.

* Risks of Emerging Markets
The fund may invest in emerging markets, where the risks of foreign
investing are higher. Investing in emerging markets generally involves
exposure to economic structures that are less diverse and mature, and to
political systems that are less stable, than those of developed countries.
In addition, issuers in emerging markets typically are subject to a greater
degree of change in earnings and business prospects than are companies in
developed markets.

* Income Risk
The fund's income could decline due to falling market interest rates.

* Call Risk During periods of falling interest rates, a bond issuer may "call"
-- or repay -- its high-yielding bonds before their maturity date. The fund
would then be forced to invest the unanticipated proceeds at lower interest
rates, resulting in a decline in the fund's income.

* Risks of Common Stocks
The fund's investments may include common stock and warrants to purchase, or
securities convertible into, common stocks. Stocks may decline significantly
in price over short or extended periods of time. Price changes may occur in
the market as a whole, or they may occur in only a particular company,
industry or sector of the market.

24
PROSPECTUS - First American Strategy Funds
<PAGE>

Additional Information
THE UNDERLYING FUNDS CONTINUED

--------------------------------------------------------------------------------
PRIME OBLIGATIONS FUND

OBJECTIVE

Prime Obligations Fund seeks maximum current income to the extent consistent
with preservation of capital and maintenance of liquidity.

MAIN INVESTMENT STRATEGIES

Prime Obligations Fund invests in high-quality short-term debt obligations,
including:

* securities issued by the U.S. government or one of its agencies or
instrumentalities.

* U.S. dollar-denominated obligations of domestic and foreign banks with total
assets of at least $500 million (including fixed and variable rate
certificates of deposit, time deposits and bankers' acceptances).

* commercial paper.

* non-convertible corporate debt securities.

* loan participation interests.

* repurchase agreements for the securities in which the fund may invest.

When selecting securities for the fund, the portfolio managers use a "top-down"
approach, looking first at general economic factors and market conditions, then
at individual securities.

The fund may invest up to 25% of its total assets in dollar-denominated
obligations of U.S. branches of foreign banks which are subject to the same
regulation as U.S. banks. The fund also may invest up to 25% of its total
assets, collectively, in dollar-denominated obligations of foreign branches of
domestic banks, foreign banks and foreign corporations.

MAIN RISKS

The main risks of investing in Prime Obligations Fund include:

* Although the fund seeks to preserve the value of an investment at $1.00 per
share, it is possible to lose money by investing in the fund. A major change
in interest rates or a default on a security or repurchase agreement held by
the fund could cause the value of an investment in the fund to decline.

* The level of income a shareholder receives from the fund will be affected by
movements in short-term interest rates.

* Foreign securities in which the fund invests, although dollar denominated, may
present some additional risk. Political or social instability or diplomatic
developments could adversely affect the securities. There is also the risk of
possible withholding taxes, seizure of foreign deposits, currency controls,
interest limitations, or other governmental restrictions which might affect
the payment of principal or interest on securities owned by the fund. In
addition, there may be less public information available about foreign
corporations and foreign banks and their branches.

25
PROSPECTUS - First American Strategy Funds

<PAGE>

ADDITIONAL INFORMATION

FINANCIAL HIGHLIGHTS

--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS

The tables that follow present performance information about the shares of each
fund. This information is intended to help you understand each fund's financial
performance for the past five years or, if shorter, the period of the fund's
operations. Some of this information reflects financial results for a single
fund share. Total returns in the tables represent the rate that you would have
earned or lost on an investment in a fund, assuming you reinvested all of your
dividends and distributions.

The information for the fiscal year ended September 30, 1999 has been audited
by Ernst & Young LLP, independent auditors, whose report, along with the funds'
financial statements, is included in the funds' annual report, which is
available upon request. The information for the fiscal years ended on or before
September 30, 1998, has been audited by other auditors.

AGGRESSIVE GROWTH FUND

<TABLE>
<CAPTION>
Fiscal year ended September 30,
1999 1998 1997(2)
-------------------------------------------------------------- ------- ------- -------
<S> <C> <C> <C>
PER SHARE DATA
Net Asset Value, Beginning of Period $ 11.11 $ 12.58 $ 10.00
------- ------- -------
Investment Operations:
Net Investment Income 0.14 0.20 0.11
Net Gains (Losses) on Investments
(both realized and unrealized) 2.05 (1.42) 2.58
------- ------- -------
Total From Investment Operations 2.19 (1.22) 2.69
------- ------- -------
Less Distributions:
Dividends (from Net Investment Income) (0.14) (0.20) (0.11)
Distributions (from Capital Gains) (0.80) (0.05) --
------- ------- -------
Total Distributions (0.94) (0.25) (0.11)
------- ------- -------
Net Asset Value, End of Period $ 12.36 $ 11.11 $ 12.58
======= ======= =======
Total Return 20.54% (9.85)% 27.06%

RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $67,013 $62,635 $13,725
Ratio of Expenses to Average Net Assets(1) 0.28% 0.25% 0.60%(3)
Ratio of Net Income to Average Net Assets 1.20% 1.66% 0.76%(3)
Ratio of Expenses to Average Net Assets (excluding waivers)(1) 0.86% 0.87% 2.85%(3)
Ratio of Net Income (Loss) to Average Net Assets
(excluding waivers) 0.62% 1.04% (1.49)%(3)
Portfolio Turnover Rate 39% 152% 7%
-------------------------------------------------------------- ------- ------- -------
</TABLE>

(1) Expense ratios do not include expenses of the underlying funds.

(2) Commenced operations on October 1, 1996.

(3) Annualized.

26
PROSPECTUS - First American Strategy Funds
<PAGE>

Additional Information
FINANCIAL HIGHLIGHTS CONTINUED

GROWTH FUND

<TABLE>
<CAPTION>
Fiscal year ended September 30,
1999 1998 1997(2)
-------------------------------------------------------------- ------- ------- -------
<S> <C> <C> <C>
PER SHARE DATA
Net Asset Value, Beginning of Period $ 11.05 $ 12.12 $ 10.00
------- ------- -------
Investment Operations:
Net Investment Income 0.25 0.28 0.18
Net Gains (Losses) on Investments
(both realized and unrealized) 1.49 (0.98) 2.12
------- ------- -------
Total From Investment Operations 1.74 (0.70) 2.30
------- ------- -------
Less Distributions:
Dividends (from Net Investment Income) (0.25) (0.28) (0.18)
Distributions (from Capital Gains) (0.69) (0.09) --
------- ------- -------
Total Distributions (0.94) (0.37) (0.18)
------- ------- -------
Net Asset Value, End of Period $ 11.85 $ 11.05 $ 12.12
======= ======= =======
Total Return 16.31% (5.95)% 23.23%

RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $88,213 $65,656 $15,676
Ratio of Expenses to Average Net Assets(1) 0.28% 0.25% 0.60%(3)
Ratio of Net Income to Average Net Assets 2.05% 2.33% 1.61%(3)
Ratio of Expenses to Average Net Assets (excluding waivers)(1) 0.85% 0.89% 2.62%(3)
Ratio of Net Income (Loss) to Average Net Assets
(excluding waivers) 1.48% 1.69% (0.41)%(3)
Portfolio Turnover Rate 34% 143% 6%
-------------------------------------------------------------- ------- ------- -------
</TABLE>

(1) Expense ratios do not include expenses of the underlying funds.

(2) Commenced operations on October 1, 1996.

(3) Annualized.

GROWTH AND INCOME FUND

<TABLE>
<CAPTION>
Fiscal year ended September 30,
1999 1998 1997(2)
-------------------------------------------------------------- -------- -------- --------
<S> <C> <C> <C>
PER SHARE DATA
Net Asset Value, Beginning of Period $ 11.08 $ 11.76 $ 10.00
-------- -------- --------
Investment Operations:
Net Investment Income 0.32 0.35 0.26
Net Gains (Losses) on Investments
(both realized and unrealized) 1.05 (0.59) 1.76
-------- -------- --------
Total From Investment Operations 1.37 (0.24) 2.02
-------- -------- --------
Less Distributions:
Dividends (from Net Investment Income) (0.32) (0.35) (0.26)
Distributions (from Capital Gains) (0.62) (0.09) --
-------- -------- --------
Total Distributions (0.94) (0.44) (0.26)
-------- -------- --------
Net Asset Value, End of Period $ 11.51 $ 11.08 $ 11.76
======== ======== ========
Total Return 12.81% (2.18)% 20.47%

RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $209,229 $207,907 $ 27,565
Ratio of Expenses to Average Net Assets(1) 0.28% 0.25% 0.60%(3)
Ratio of Net Income to Average Net Assets 2.83% 3.05% 2.59%(3)
Ratio of Expenses to Average Net Assets (excluding waivers)(1) 0.79% 0.82% 2.10%(3)
Ratio of Net Income to Average Net Assets
(excluding waivers) 2.32% 2.48% 1.09%(3)
Portfolio Turnover Rate 41% 158% 37%
-------------------------------------------------------------- -------- -------- --------
</TABLE>

(1) Expense ratios do not include expenses of the underlying funds.

(2) Commenced operations on October 1, 1996.

(3) Annualized.

27
PROSPECTUS - First American Strategy Funds
<PAGE>

Additional Information
FINANCIAL HIGHLIGHTS CONTINUED

INCOME FUND

<TABLE>
<CAPTION>
Fiscal year ended September 30,
1999 1998 1997(2)
-------------------------------------------------------------- --------- --------- ---------
<S> <C> <C> <C>
PER SHARE DATA
Net Asset Value, Beginning of Period $ 11.23 $ 10.82 $ 10.00
--------- --------- ---------
Investment Operations:
Net Investment Income 0.53 0.50 0.41
Net Gains (Losses) on Investments
(both realized and unrealized) (0.40) 0.43 0.82
--------- --------- ---------
Total From Investment Operations 0.13 0.93 1.23
--------- --------- ---------
Less Distributions:
Dividends (from Net Investment Income) (0.53) (0.50) (0.41)
Distributions (from Capital Gains) (0.35) (0.02) --
--------- --------- ---------
Total Distributions (0.88) (0.52) (0.41)
--------- --------- ---------
Net Asset Value, End of Period $ 10.48 $ 11.23 $ 10.82
========= ========= =========
Total Return 1.13% 8.72% 12.51%

RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ 83,302 $ 116,779 $ 36,119
Ratio of Expenses to Average Net Assets(1) 0.28% 0.25% 0.60%(3)
Ratio of Net Income to Average Net Assets 4.83% 4.63% 4.39%(3)
Ratio of Expenses to Average Net Assets (excluding waivers)(1) 0.83% 0.84% 2.00%(3)
Ratio of Net Income to Average Net Assets
(excluding waivers) 4.28% 4.04% 2.99%(3)
Portfolio Turnover Rate 21% 106% 29%
-------------------------------------------------------------- --------- --------- ---------
</TABLE>

(1) Expense ratios do not include expenses of the underlying funds.

(2) Commenced operations on October 1, 1996.

(3) Annualized.

28
PROSPECTUS - First American Strategy Funds
<PAGE>

--------------------------------------------------------------------------------
FOR MORE INFORMATION

More information about the funds is available in the funds' Statement of
Additional Information and annual and semiannual reports.

--------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION (SAI)

The SAI provides more details about the funds and their policies. A current SAI
is on file with the Securities and Exchange Commission (SEC) and is
incorporated into this prospectus by reference (which means that it is legally
considered part of this prospectus).

--------------------------------------------------------------------------------
ANNUAL AND SEMIANNUAL REPORTS

Additional information about the funds' investments is available in the funds'
annual and semiannual reports to shareholders. In the funds' annual report, you
will find a discussion of the market conditions and investment strategies that
significantly affected the funds' performance during their last fiscal year.

You can obtain a free copy of the funds' SAI and/or free copies of the funds'
most recent annual or semiannual reports by calling Investor Services at
1-800-637-2548. The material you request will be sent by first-class mail or
other means designed to ensure equally prompt delivery, within three business
days of receipt of the request.

You can also obtain copies of this information, after paying a duplicating fee,
by electronic request at the following email address: [email protected], or by
writing the SEC's Public Reference Section, Washington, D.C. 20549-0102. For
more information, call 1-202-942-8090.

Information about the funds is also available on the Internet. Text-only
versions of fund documents can be viewed online or downloaded from the EDGAR
Database on the SEC's Internet site at http://www.sec.gov.

FIRST AMERICAN FUNDS P.O. Box 1330, Minneapolis, MN 55440-1330

First American Asset Management, a division of U.S. Bank National Association,
serves as the investment advisor to the First American Funds.

First American Funds are distributed by SEI Investments Distribution Co. which
is located in Oaks, PA 19456 and is not an affiliate of U.S. Bank.

1/2000 3017-99

SEC file number: 811-05309

Supply Numbers

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