SEPTEMBER 30, 2000
ASSET CLASSES
* EQUITY FUNDS
(*) FUNDS OF FUNDS
* BOND FUNDS
* TAX FREE FUNDS
* MONEY MARKET FUNDS
FUND PROFILE
FIRST AMERICAN
STRATEGY
FUNDS
AGGRESSIVE GROWTH FUND
GROWTH FUND
GROWTH AND INCOME FUND
INCOME FUND
THIS PROFILE SUMMARIZES KEY INFORMATION ABOUT THE FUND THAT IS INCLUDED IN THE
FUND'S PROSPECTUS. THE FUND'S PROSPECTUS INCLUDES ADDITIONAL INFORMATION ABOUT
THE FUND, INCLUDING A MORE DETAILED DESCRIPTION OF THE RISKS ASSOCIATED WITH
INVESTING IN THE FUND THAT YOU MAY WANT TO CONSIDER BEFORE YOU INVEST. YOU MAY
OBTAIN THE PROSPECTUS AND OTHER INFORMATION ABOUT THE FUND AT NO COST BY CALLING
FIRST AMERICAN FUNDS INVESTOR SERVICES AT 1-800-637-2548, OR BY CONTACTING YOUR
INVESTMENT PROFESSIONAL.
[LOGO] FIRST AMERICAN FUNDS(R)
THE POWER OF DISCIPLINED INVESTING(R)
<PAGE>
FIRST AMERICAN STRATEGY FUNDS
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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.
--------------------------------------------------------------------------------
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.
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 the last fiscal year. You
may obtain either or both of these reports at no cost by calling First American
Funds Investor Services at 1-800-637-2548.
NOT FDIC INSURED NO BANK GUARANTEE MAY LOSE VALUE
1 FUND PROFILE - First American Strategy Funds
<PAGE>
FIRST AMERICAN STRATEGY FUNDS CONTINUED
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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 Strategy Funds involves additional expenses that would not be present
in a direct investment in the underlying funds.
RISKS ASSOCIATED WITH THE UNDERLYING FUNDS. The Strategy Funds are subject to
the risks of the underlying funds in which they invest. These risks include:
o The underlying funds (other than Equity Index Fund) are actively managed and
therefore may underperform other mutual funds with similar investment
objectives.
o 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.
o 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.
o Mid Cap Growth Fund and Small Cap Growth Fund invest in initial public
offerings (IPOs). IPOs generally have limited operating histories, and
prospects for future profitability are uncertain. Prices of IPOs may also be
unstable due to the absence of a prior public market, the small number of
shares available for trading, and limited investor information.
o 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.
o 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.
o 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.
o 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.
o 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.
o 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).
o 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.
o 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.
o 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.
o 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.
o Prime Obligations Fund seeks to preserve a value of $1.00 per share. A major
change in interest rates or a default on a security or repurchase agreement
held by the fund could cause the value to decline.
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. 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.
2 FUND PROFILE - First American Strategy Funds
<PAGE>
FIRST AMERICAN STRATEGY FUNDS CONTINUED
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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 indexes, 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(1)
[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)%
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS Inception Year Since
AS OF 12/31/99 Date To Date(2) One Year Inception
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Strategy Aggressive Growth Fund 10/1/96 2.45% 26.49% 16.94%
----------------------------------------------------------------------------------------
Standard & Poor's Composite 500 Index(3) (1.39)% 21.04% 28.06%
----------------------------------------------------------------------------------------
Lehman Government/Credit Bond Index(4) 7.16% (2.15)% 5.48%
----------------------------------------------------------------------------------------
</TABLE>
(1)Total return for the period from 1/1/2000 to 9/30/2000 was 2.45%.
(2)Year to date performance for the fund and the indexes is for the period from
1/1/2000 to 9/30/2000.
(3)An unmanaged index of large-capitalization stocks. The since inception
performance of the index is calculated from 10/31/96.
(4)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. The since inception performance of the index is
calculated from 10/31/96.
PERFORMANCE MAY BE LOWER DUE TO RECENT MARKET VOLATILITY.
STRATEGY GROWTH FUND
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR(1)
[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)%
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS Inception Year Since
AS OF 12/31/99 Date To Date(2) One Year Inception
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Strategy Growth Fund 10/1/96 4.13% 19.13% 14.42%
----------------------------------------------------------------------------------------
Standard & Poor's Composite 500 Index(3) (1.39)% 21.04% 28.06%
----------------------------------------------------------------------------------------
Lehman Government/Credit Bond Index(4) 7.16% (2.15)% 5.48%
----------------------------------------------------------------------------------------
</TABLE>
(1)Total return for the period from 1/1/2000 to 9/30/2000 was 4.13%.
(2)Year to date performance for the fund and the indexes is for the period from
1/1/2000 to 9/30/2000.
(3)An unmanaged index of large-capitalization stocks. The since inception
performance of the index is calculated from 10/31/96.
(4)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. The since inception performance of the index is
calculated from 10/31/96.
PERFORMANCE MAY BE LOWER DUE TO RECENT MARKET VOLATILITY.
3 FUND PROFILE - First American Strategy Funds
<PAGE>
FIRST AMERICAN STRATEGY FUNDS CONTINUED
--------------------------------------------------------------------------------
FUND PERFORMANCE (CONTINUED)
STRATEGY GROWTH AND INCOME FUND
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR(1)
[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)%
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS Inception Year Since
AS OF 12/31/99 Date To Date(2) One Year Inception
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Strategy Growth and Income Fund 10/1/96 4.13% 13.15% 12.51%
----------------------------------------------------------------------------------------
Standard & Poor's Composite 500 Index(3) (1.39)% 21.04% 28.06%
----------------------------------------------------------------------------------------
Lehman Government/Credit Bond Index(4) 7.16% (2.15)% 5.48%
----------------------------------------------------------------------------------------
</TABLE>
(1)Total return for the period from 1/1/2000 to 9/30/2000 was 4.13%.
(2)Year to date performance for the fund and the indexes is for the period from
1/1/2000 to 9/30/2000.
(3)An unmanaged index of large-capitalization stocks. The since inception
performance of the index is calculated from 10/31/96.
(4)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. The since inception performance of the index is
calculated from 10/31/96.
PERFORMANCE MAY BE LOWER DUE TO RECENT MARKET VOLATILITY.
STRATEGY INCOME FUND
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR(1)
[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)%
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS Inception Year Since
AS OF 12/31/99 Date To Date(2) One Year Inception
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Strategy Income Fund 10/1/96 5.74% (0.39)% 7.21%
----------------------------------------------------------------------------------------
Standard & Poor's Composite 500 Index(3) (1.39)% 21.04% 28.06%
----------------------------------------------------------------------------------------
Lehman Government/Credit Bond Index(4) 7.16% (2.15)% 5.48%
----------------------------------------------------------------------------------------
</TABLE>
(1)Total return for the period from 1/1/2000 to 9/30/2000 was 5.74%.
(2)Year to date performance for the fund and the indexes is for the period from
1/1/2000 to 9/30/2000.
(3)An unmanaged index of large-capitalization stocks. The since inception
performance of the index is calculated from 10/31/96.
(4)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. The since inception performance of the index is
calculated from 10/31/96.
PERFORMANCE MAY BE LOWER DUE TO RECENT MARKET VOLATILITY.
4 FUND PROFILE - First American Strategy Funds
<PAGE>
FIRST AMERICAN STRATEGY FUNDS CONTINUED
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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. 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.
<TABLE>
<CAPTION>
Aggressive Growth and
Growth Fund Growth Fund Income Fund Income Fund
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)
---------------------------------------------------------------------------------------------------------------------
MAXIMUM SALES CHARGE (LOAD) None None None None
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.
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 to the fund 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.
--------------------------------------------------------------------------------
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" on the next page.
<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 on the next page. 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 0.40%. 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.
5 FUND PROFILE - First American Strategy Funds
<PAGE>
FIRST AMERICAN STRATEGY FUNDS CONTINUED
--------------------------------------------------------------------------------
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.
6 FUND PROFILE - First American Strategy Funds
<PAGE>
FIRST AMERICAN STRATEGY FUNDS CONTINUED
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MANAGEMENT OF THE FUND
U.S. Bank National Association (U.S. Bank), acting through its First American
Asset Management division, is the funds' investment advisor. First American
Asset Management provides investment management services to individuals and
institutions, including corporations, foundations, pensions, and retirement
plans. As of September 30, 2000, it had more than $77 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.
The funds are managed by a team of persons associated with First American Asset
Management.
--------------------------------------------------------------------------------
BUYING FUND 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). There is no front-end sales load to purchase shares of the funds,
however, shares have a 1% redemption fee if the shares are redeemed within 12
months of the date of purchase.
You may purchase shares of the funds by contacting your investment professional
or financial institution. You may also purchase shares of the fund by completing
a new account application. New account applications may be obtained by calling
First American Funds Investor Services at 1-800-637-2548.
--------------------------------------------------------------------------------
SELLING FUND SHARES
If you sell your shares within 12 months of purchase, you will pay a 1%
redemption fee.
If you purchased shares of the funds through an investment professional or
financial institution, simply call them to sell your shares. You may also sell
your shares by calling Investor Services at 1-800-637-2548. To sell shares by
mail, send a written request to your investment professional or financial
institution, or to the funds at the following address: First American Funds, c/o
DST Systems, Inc., P.O. Box 219382, Kansas City, Missouri 64121-9382.
--------------------------------------------------------------------------------
FUND DISTRIBUTIONS AND TAXES
Dividend and capital gain distributions will be reinvested in additional shares
of the fund, unless you request otherwise. Dividends from a fund's net
investment income are declared and paid monthly. Any capital gains are
distributed at least once each year. 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.
--------------------------------------------------------------------------------
SERVICES OFFERED
First American offers several ways to make it easier for you to manage your
account, such as: telephone transactions; wire and electronic funds transfers;
automatic investing; systematic withdrawals; and exchange privileges with other
First American Funds. Personal service is always available by calling First
American Funds Investor Services at 1-800-637-2548.
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 Investment Distribution Co. which
is located in Oaks, PA 19456 and is not an affiliate of U.S. Bank.
FPR-STRAT-00
7 FUND PROFILE - First American Strategy Funds
<PAGE>
SEPTEMBER 30, 2000
ASSET CLASSES
* EQUITY FUNDS
(*) FUNDS OF FUNDS
* BOND FUNDS
* TAX FREE FUNDS
* MONEY MARKET FUNDS
FUND PROFILE
FIRST AMERICAN
STRATEGY
FUNDS
U.S. BANCORP
401(k) SAVINGS PLAN
AGGRESSIVE GROWTH FUND
GROWTH FUND
GROWTH AND INCOME FUND
INCOME FUND
THIS PROFILE SUMMARIZES KEY INFORMATION ABOUT THE FUND THAT IS INCLUDED IN THE
FUND'S PROSPECTUS. THE FUND'S PROSPECTUS INCLUDES ADDITIONAL INFORMATION ABOUT
THE FUND, INCLUDING A MORE DETAILED DESCRIPTION OF THE RISKS ASSOCIATED WITH
INVESTING IN THE FUND THAT YOU MAY WANT TO CONSIDER BEFORE YOU INVEST. YOU MAY
OBTAIN THE PROSPECTUS AND OTHER INFORMATION ABOUT THE FUND AT NO COST BY CALLING
FIRST AMERICAN FUNDS INVESTOR SERVICES AT 1-800-637-2548, OR BY CONTACTING YOUR
INVESTMENT PROFESSIONAL.
[LOGO] FIRST AMERICAN FUNDS(R)
THE POWER OF DISCIPLINED INVESTING(R)
<PAGE>
FIRST AMERICAN STRATEGY FUNDS
--------------------------------------------------------------------------------
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.
--------------------------------------------------------------------------------
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.
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 the last fiscal year. You
may obtain either or both of these reports at no cost by calling First American
Investor Services at 1-800-637-2548.
NOT FDIC INSURED NO BANK GUARANTEE MAY LOSE VALUE
1 FUND PROFILE - First American Strategy Funds
<PAGE>
FIRST AMERICAN STRATEGY FUNDS CONTINUED
--------------------------------------------------------------------------------
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 Strategy Funds involves additional expenses that would not be present
in a direct investment in the underlying funds.
RISKS ASSOCIATED WITH THE UNDERLYING FUNDS. The Strategy Funds are subject to
the risks of the underlying funds in which they invest. These risks include:
o The underlying funds (other than Equity Index Fund) are actively managed and
therefore may underperform other mutual funds with similar investment
objectives.
o 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.
o 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.
o Mid Cap Growth Fund and Small Cap Growth Fund invest in initial public
offerings (IPOs). IPOs generally have limited operating histories, and
prospects for future profitability are uncertain. Prices of IPOs may also be
unstable due to the absence of a prior public market, the small number of
shares available for trading, and limited investor information.
o 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.
o 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.
o 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.
o 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.
o 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.
o 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).
o 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.
o 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.
o 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.
o 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.
o Prime Obligations Fund seeks to preserve a value of $1.00 per share. A major
change in interest rates or a default on a security or repurchase agreement
held by the fund could cause the value to decline.
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. 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.
2 FUND PROFILE - First American Strategy Funds
<PAGE>
FIRST AMERICAN STRATEGY FUNDS CONTINUED
--------------------------------------------------------------------------------
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(1)
[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)%
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS Inception Year Since
AS OF 12/31/99 Date To Date(2) One Year Inception
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Strategy Aggressive Growth Fund 10/1/96 2.45% 26.49% 16.94%
----------------------------------------------------------------------------------------
Standard & Poor's Composite 500 Index(3) (1.39)% 21.04% 28.06%
----------------------------------------------------------------------------------------
Lehman Government/Credit Bond Index(4) 7.16% (2.15)% 5.48%
----------------------------------------------------------------------------------------
</TABLE>
(1)Total return for the period from 1/1/2000 to 9/30/2000 was 2.45%.
(2)Year to date performance for the fund and the indices is for the period from
1/1/2000 to 9/30/2000.
(3)An unmanaged index of large capitalization stocks. The since inception
performance of the index is calculated from 10/31/96.
(4)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. The since inception performance of the index is
calculated from 10/31/96.
PERFORMANCE MAY BE LOWER DUE TO RECENT MARKET VOLATILITY.
STRATEGY GROWTH FUND
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR(1)
[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)%
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS Inception Year Since
AS OF 12/31/99 Date To Date(2) One Year Inception
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Strategy Growth Fund 10/1/96 4.13% 19.13% 14.42%
----------------------------------------------------------------------------------------
Standard & Poor's Composite 500 Index(3) (1.39)% 21.04% 28.06%
----------------------------------------------------------------------------------------
Lehman Government/Credit Bond Index(4) 7.16% (2.15)% 5.48%
----------------------------------------------------------------------------------------
</TABLE>
(1)Total return for the period from 1/1/2000 to 9/30/2000 was 4.13%.
(2)Year to date performance for the fund and the indices is for the period from
1/1/2000 to 9/30/2000.
(3)An unmanaged index of large capitalization stocks. The since inception
performance of the index is calculated from 10/31/96.
(4)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. The since inception performance of the index is
calculated from 10/31/96.
PERFORMANCE MAY BE LOWER DUE TO RECENT MARKET VOLATILITY.
3 FUND PROFILE - First American Strategy Funds
<PAGE>
FIRST AMERICAN STRATEGY FUNDS CONTINUED
--------------------------------------------------------------------------------
FUND PERFORMANCE (CONTINUED)
STRATEGY GROWTH AND INCOME FUND
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR(1)
[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)%
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS Inception Year Since
AS OF 12/31/99 Date To Date(2) One Year Inception
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Strategy Growth and Income Fund 10/1/96 4.13% 13.15% 12.51%
-----------------------------------------------------------------------------------------------
Standard & Poor's Composite 500 Index(3) (1.39)% 21.04% 28.06%
-----------------------------------------------------------------------------------------------
Lehman Government/Credit Bond Index(4) 7.16% (2.15)% 5.48%
-----------------------------------------------------------------------------------------------
</TABLE>
(1)Total return for the period from 1/1/2000 to 9/30/2000 was 4.13%.
(2)Year to date performance returns for the fund and the index(es) are for the
period from 1/1/2000 to 9/30/2000.
(3)An unmanaged index of large capitalization stocks. The since inception
performance of the index is calculated from 10/31/96.
(4)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. The since inception performance of the index is
calculated from 10/31/96.
PERFORMANCE MAY BE LOWER DUE TO RECENT MARKET VOLATILITY.
STRATEGY INCOME FUND
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR(1)
[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)%
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS Inception Year Since
AS OF 12/31/99 Date To Date(2) One Year Inception
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Strategy Income Fund 10/1/96 5.74% (0.39)% 7.21%
----------------------------------------------------------------------------------------
Standard & Poor's Composite 500 Index(3) (1.39)% 21.04% 28.06%
----------------------------------------------------------------------------------------
Lehman Government/Credit Bond Index(4) 7.16% (2.15)% 5.48%
----------------------------------------------------------------------------------------
</TABLE>
(1)Total return for the period from 1/1/2000 to 9/30/2000 was 5.74%.
(2)Year to date performance returns for the fund and the index(es) are for the
period from 1/1/2000 to 9/30/2000.
(3)An unmanaged index of large capitalization stocks. The since inception
performance of the index is calculated from 10/31/96.
(4)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. The since inception performance of the index is
calculated from 10/31/96.
PERFORMANCE MAY BE LOWER DUE TO RECENT MARKET VOLATILITY.
4 FUND PROFILE - First American Strategy Funds
<PAGE>
FIRST AMERICAN STRATEGY FUNDS CONTINUED
--------------------------------------------------------------------------------
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. 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.
<TABLE>
<CAPTION>
Aggressive Growth and
Growth Fund Growth Fund Income Fund Income Fund
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)
-------------------------------------------------------------------------------------------------------------------------
MAXIMUM SALES CHARGE (LOAD) None None None None
MAXIMUM DEFERRED SALES CHARGE (LOAD) None None None None
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.
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.
--------------------------------------------------------------------------------
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" on the next page.
<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 on the next page. 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 0.40%. 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.
5 FUND PROFILE - First American Strategy Funds
<PAGE>
FIRST AMERICAN STRATEGY FUNDS CONTINUED
--------------------------------------------------------------------------------
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, 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 $ 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.
6 FUND PROFILE - First American Strategy Funds
<PAGE>
FIRST AMERICAN STRATEGY FUNDS CONTINUED
--------------------------------------------------------------------------------
MANAGEMENT OF THE FUNDS
U.S. Bank National Association (U.S. Bank), acting through its First American
Asset Management division, is the funds' investment advisor. First American
Asset Management provides investment management services to individuals and
institutions, including corporations, foundations, pensions, and retirement
plans. As of September 30, 2000, it had more than $77 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.
The funds are managed by a team of persons associated with First American Asset
Management.
--------------------------------------------------------------------------------
REVIEWING INVESTMENT OPTIONS
You may review and make changes to your investment options by calling U-Connect
at 1-800-806-7009 or logging on to the U.S. Bancorp 401(k) Savings Plan Web site
at www.rsweb.com/60587.
--------------------------------------------------------------------------------
FUND DISTRIBUTIONS AND TAXES
Distributions may be requested by calling U-Connect at 1-800-806-7009.
Distributions from the U.S. Bancorp 401(k) Savings Plan are generally taxable
and subject to withholding in the current year unless the participant requests a
direct rollover to an IRA or another qualified plan. Certain distributions such
as distributions from an employee's after-tax account or, in some circumstances,
portions of distributions made after a participant has attained age 701/2 may
not be rolled over to an IRA or another qualified plan. Generally, an employee's
distribution will be taxed at ordinary income tax rates. Distributions made
before a participant attains age 591/2 are subject to a 10% penalty tax unless
an exception applies.
Participants in the U.S. Bancorp 401(k) Savings Plan will not be taxed on pretax
earnings reductions or on employer contributions at the time such amounts are
allocated to their accounts. Pretax contributions, however, are subject to tax
under FICA and FUTA. Participants will not be taxed on the income earned on any
securities in the trust fund until they are withdrawn or distributed under the
Plan.
To inquire about or initiate loans against your 401(k) Savings Plan, call
U-Connect at 1-800-806-7009 or log on to the Internet Web site at
www.rsweb.com/60587.
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 Investment Distribution Co. which
is located in Oaks, PA 19456 and is not an affiliate of U.S. Bank.
10/2000 FPSF (I)
7 FUND PROFILE - First American Strategy Funds
