<PAGE>
[LOGO]
ADVANTUS
FAMILY OF FUNDS
SEMI-ANNUAL REPORT TO SHAREHOLDERS
ADVANTUS INDEX 500 FUND
JANUARY 31, 1998
<PAGE>
ADVANTUS INDEX 500 FUND
TABLE OF CONTENTS
PERFORMANCE UPDATE 2
INVESTMENTS IN SECURITIES 4
STATEMENT OF ASSETS AND LIABILITIES 15
STATEMENT OF OPERATIONS 16
STATEMENTS OF CHANGES IN NET ASSETS 17
NOTES TO FINANCIAL STATEMENTS 18
SHAREHOLDER SERVICES 22
<PAGE>
LETTER FROM THE PRESIDENT [PHOTO]
Dear Shareholders:
Throughout this reporting period, investors continued to experience a positive
financial environment with moderate economic growth and low inflation. Low
inflation expectations continued to provide a favorable backdrop for earnings
growth. Productivity gains remained important in this environment. The inflation
fears experienced in the first half of 1997 dissipated in the second half of
1997, largely due to the impact of the Asian currency crisis.
Negative economic events in Asia took on global implications during the fourth
calendar quarter. The "Asian Flu" severely affected several Far Eastern
currencies and stock markets, leaving a trail of bankruptcies, uncertainties,
and fears in its wake. It is likely that the U.S. equity market may feel the
effect of the Asian crisis for several months to come due to companies
experiencing less-than-expected earnings, and tracing those results back to the
fallout from the problems in Asia. We will keep you posted as to how the
situation in Asia unfolds and how it may affect your Advantus Fund.
Broadly speaking, equity securities have demonstrated favorable results this
reporting period. As of January 31, 1998, the S&P 500 Index* rose by 3.6 percent
since your last report (dated July 31, 1997). In this report, the portfolio
manager for the Advantus Index 500 Fund will share her insights about how the
performance of various market sectors affected the index during the reporting
period.
As investors, we all enjoy "market watching" and the S&P 500 Index* is a
well-know indicator of overall market performance. We have witnessed the market
change, sometimes significantly, because of actual events or because of mere
perceptions in the markets. Keeping a long-range view of investing is important
because it smoothes out market highs and lows. We believe that investors derive
the greatest benefit by maintaining a long-range perspective on investing.
Thank you for investing with Advantus.
Sincerely,
/s/ Robert E. Hunstad
Robert E. Hunstad
President
Advantus Funds
*The S&P 500 Index is a broad, unmanaged index of 500 common stocks which are
representative of the U.S. stock market overall.
<PAGE>
ADVANTUS INDEX 500 FUND
PERFORMANCE UPDATE
[PHOTO]
TERI BRANDT
PORTFOLIO MANAGER
The Advantus Index 500 Fund seeks
investment results that correspond
generally to the price and yield
performance of the common stocks included
in the Standard and Poor's Corporation
500 Composite Stock Index (S&P 500
Index).+ It is designed to provide an
economical and convenient means of
maintaining a broad position in the
equity market as part of an overall
investment strategy.
-Dividends paid quarterly.
-Capital gains distributions paid annually.
PERFORMANCE
For the six month period ended January 31, 1998, the Advantus Index 500 Fund
returned the following for each class of shares currently offered:
<TABLE>
<S> <C>
Class A.......................... 3.5 percent*
Class B.......................... 3.0 percent*
Class C.......................... 3.0 percent*
</TABLE>
The S&P 500 Index** increased 3.6 percent over the same reporting period.
PORTFOLIO RECAP
The Advantus Index 500 Fund consists of publicly traded common stocks
representing leading companies in virtually all segments of the American
economy. The Fund is designed to reflect the results that correspond to the
investment performance of the stock market, in general. We seek to accomplish
this by using a computer model that positions the Fund to optimally track the
conduct of the S&P 500 Index.**
The Utilities and Energy sectors continued to lag in the third quarter of 1997.
These sectors rebounded in the fourth quarter and achieved significant gains.
Technology's high weighting in the index detracted significantly from the
performance.
OUTLOOK
The Asian currency problems are likely to be reflected in corporate earnings
during the first half of 1998. If corporate earnings lag in 1998, the Asian
debacle will be blamed for shortfalls that occur. Low interest rates will
continue to provide a very important floor for stocks. We anticipate moderate
growth, as well.
2
<PAGE>
ADVANTUS INDEX 500
FUND
JANUARY 31, 1998
+"Standard & Poor's", "S&P", "S&P 500", "Standard & Poor's 500", and "500" are
trademarks of The McGraw-Hill Companies, Inc. and have been licensed for use by
the Advantus Index 500 Fund, Inc. The Fund is not sponsored, endorsed, sold or
promoted by Standard & Poor's and Standard & Poor's makes no representation
regarding the advisability of investing in the Fund.
*Historical performance is not an indication of future performance. These
performance results do not reflect the impact of Class A's maximum 5 percent
front-end sales charge or Class B's maximum 5 percent contingent deferred sales
charge.
**The S&P 500 Index is a broad, unmanaged index of 500 common stocks which are
representative of the U.S. stock market overall.
TEN LARGEST STOCK HOLDINGS
<TABLE>
<CAPTION>
MARKET % OF STOCK
COMPANY SHARES VALUE PORTFOLIO
- ---------------------------------------- -------- ---------- -----------
<S> <C> <C> <C>
General Electric Company................ 6,800 $ 527,000 3.3%
Microsoft Corporation................... 2,500 372,969 2.4%
Coca-Cola Company....................... 5,100 330,225 2.1%
Exxon Corporation....................... 5,100 302,494 1.9%
Merck & Co., Inc........................ 2,500 293,125 1.9%
Intel................................... 3,400 275,400 1.7%
Royal Dutch Petroleum................... 4,500 230,625 1.5%
Pfizer, Inc............................. 2,600 213,038 1.3%
AT&T Corporation........................ 3,400 212,925 1.3%
Procter & Gamble Company................ 2,700 211,613 1.3%
---------- ---
$2,969,414 18.7%
---------- ---
---------- ---
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Basic Materials 4.70%
Capital Goods 9.20%
Communication Services 7.10%
Consumer Cyclical 10.10%
Consumer Staples 14.50%
Energy 7.80%
Financial 16.40%
Health Care 11.60%
Technology 13.30%
Transportation 1.20%
Utilities 3.20%
Cash and Other
Assets/Liabilities 0.90%
</TABLE>
3
<PAGE>
ADVANTUS INDEX 500 FUND
INVESTMENTS IN SECURITIES
JANUARY 31, 1998
(UNAUDITED)
(Percentages of each investment category relate to total net assets.)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE(a)
- ---------- -------------
<C> <S> <C>
COMMON STOCK (99.1%)
BASIC MATERIALS (4.7%)
Agriculture Product (.3%)
400 Cognizant Corporation................................................... $ 18,150
300 Pioneer Hi-Bred International........................................... 30,019
-------------
48,169
-------------
Aluminum (.3%)
600 Alcan Aluminum Limited (c).............................................. 17,662
400 Aluminum Company of America............................................. 30,550
100 Reynolds Metals Company................................................. 6,306
-------------
54,518
-------------
Chemicals (2.6%)
200 Air Products and Chemicals, Inc......................................... 16,012
700 BF Goodrich Company..................................................... 29,356
400 Dow Chemical Company.................................................... 36,000
2,200 DuPont.................................................................. 124,575
200 Eastman Chemical Company................................................ 11,912
400 Ecolab, Inc............................................................. 10,950
500 Engelhard Corporation................................................... 8,375
100 FMC Corporation (b)..................................................... 6,725
300 Hercules Incorporated................................................... 14,156
400 International Flavors & Fragrances...................................... 16,850
1,200 Monsanto Company........................................................ 56,925
600 Morton International Inc. (b)........................................... 19,800
200 PPG Industries, Inc..................................................... 11,475
600 Praxair, Inc............................................................ 24,862
100 Rohm and Haas Company................................................... 8,575
<CAPTION>
MARKET
SHARES VALUE(a)
- ---------- -------------
<C> <S> <C>
BASIC MATERIALS--CONTINUED
500 Sigma-Aldrich........................................................... $ 19,375
200 Union Carbide Corporation............................................... 8,762
-------------
424,685
-------------
Iron and Steel (.2%)
300 Allegheny Teledyne Incorporated......................................... 7,387
200 Nucor Corporation....................................................... 9,525
300 USX-U.S. Steel Group, Inc............................................... 10,012
-------------
26,924
-------------
Mining (.3%)
900 Barrick Gold Corporation (c)............................................ 17,437
300 Freeport-McMoran Copper................................................. 4,406
700 Homestake Mining Company................................................ 6,650
400 Inco Limited (c)........................................................ 7,100
200 Newmont Mining Corporation.............................................. 5,700
100 Phelps Dodge Corporation................................................ 6,587
-------------
47,880
-------------
Paper and Forest (1.0%)
200 Bemis Company, Inc...................................................... 8,625
200 Champion International Corporation...................................... 10,237
400 Fort James Corporation.................................................. 17,175
100 Georgia-Pacific Corporation............................................. 5,512
400 International Paper Company............................................. 18,275
600 Mead Corporation........................................................ 19,500
200 Temple-Inland, Inc...................................................... 11,100
300 Union Camp Corporation.................................................. 17,156
</TABLE>
See accompanying notes to investments in securities.
4
<PAGE>
ADVANTUS INDEX 500 FUND
INVESTMENTS IN SECURITIES--CONTINUED
<TABLE>
<CAPTION>
MARKET
SHARES VALUE(a)
- ---------- -------------
BASIC MATERIALS--CONTINUED
<C> <S> <C>
600 Weyerhaeuser Company.................................................... $ 29,887
500 Willamette Industries, Inc.............................................. 16,750
-------------
154,217
-------------
CAPITAL GOODS (9.2%)
Aerospace/Defense (1.4%)
2,060 Boeing Company.......................................................... 97,979
300 General Dynamics Corporation............................................ 25,875
300 Lockheed Martin Corporation............................................. 31,219
100 Northrop Grumman Corporation............................................ 12,262
700 Raytheon Company (b).................................................... 36,487
300 Rockwell International Corporation...................................... 16,762
-------------
220,584
-------------
Containers-Metal/Glass (.1%)
400 Crown Cork & Seal Company, Inc.......................................... 19,800
-------------
Electrical Equipment (4.2%)
400 AMP Incorporated........................................................ 16,000
1,200 CBS Corporation (b)..................................................... 35,925
800 Emerson Electric Company................................................ 48,400
6,800 General Electric Company................................................ 527,000
300 Honeywell, Inc.......................................................... 21,019
600 Raychem Corporation..................................................... 22,387
300 Thermo Electron Corporation (b)......................................... 11,700
-------------
682,431
-------------
Engineering/Construction ( -- )
100 Fluor Corporation....................................................... 3,769
-------------
<CAPTION>
MARKET
SHARES VALUE(a)
- ---------- -------------
<C> <S> <C>
CAPITAL GOODS--CONTINUED
Machinery (.7%)
300 Case Corporation........................................................ $ 17,494
700 Caterpillar, Inc........................................................ 33,600
200 Cooper Industries....................................................... 10,612
500 Deere & Company......................................................... 26,375
600 Dover Corporation....................................................... 20,437
300 Ingersoll-Rand Company.................................................. 11,925
-------------
120,443
-------------
Manufacturing (2.2%)
1,100 Allied-Signal, Inc...................................................... 42,831
300 Corning, Inc............................................................ 10,200
400 Eaton Corporation....................................................... 35,900
450 Hussmann International (b).............................................. 6,131
500 Illinois Tool Works, Inc................................................ 27,844
200 Johnson Controls........................................................ 10,137
900 Minnesota Mining and Manufacturing...................................... 75,150
500 Pall Corporation........................................................ 9,969
300 Parker Hannifin Corporation............................................. 13,106
600 Tenneco, Inc............................................................ 24,337
200 Textron, Inc............................................................ 11,962
1,100 Tyco International Ltd.................................................. 48,812
400 United Technologies Corporation......................................... 32,650
-------------
349,029
-------------
Office Equipment (.3%)
900 Ikon Office Solutions................................................... 28,350
400 Pitney Bowes, Inc....................................................... 18,350
-------------
46,700
-------------
Trucks and Parts (.1%)
200 Cummins Engine Company, Inc............................................. 10,700
200 Paccar, Inc............................................................. 10,100
-------------
20,800
-------------
</TABLE>
See accompanying notes to investments in securities.
5
<PAGE>
ADVANTUS INDEX 500 FUND
INVESTMENTS IN SECURITIES--CONTINUED
<TABLE>
<CAPTION>
MARKET
SHARES VALUE(a)
- ---------- -------------
CAPITAL GOODS--CONTINUED
<C> <S> <C>
Waste Management (.2%)
300 Browning-Ferris Industries.............................................. $ 10,369
600 WMX Technologies, Inc................................................... 14,100
-------------
24,469
-------------
COMMUNICATION SERVICES (7.1%)
Cellular (.4%)
1,100 Airtouch Communications (b)............................................. 48,262
400 Comcast Corporation (b)................................................. 12,525
-------------
60,787
-------------
Telecommunication (2.1%)
3,400 AT&T Corporation........................................................ 212,925
1,500 MCI Communications...................................................... 69,656
1,700 Worldcom, Inc. (b)...................................................... 60,881
-------------
343,462
-------------
Telephone (4.6%)
500 Alltel Corporation...................................................... 21,375
2,300 Ameritech............................................................... 98,756
1,638 Bell Atlantic Corporation............................................... 151,617
2,100 Bellsouth Corporation................................................... 127,181
600 Frontier Corporation.................................................... 15,637
1,800 GTE Corporation......................................................... 98,212
1,792 SBC Communications, Inc................................................. 139,328
2,300 US West Communications Group (b)........................................ 84,874
-------------
736,980
-------------
<CAPTION>
MARKET
SHARES VALUE(a)
- ---------- -------------
<C> <S> <C>
CONSUMER CYCLICAL (10.1%)
Auto (2.1%)
1,300 Chrysler Corporation Holding Company.................................... $ 45,256
400 Cooper Tire & Rubber Company............................................ 9,625
200 Dana Corporation........................................................ 10,025
700 Echlin, Inc............................................................. 24,894
2,300 Ford Motor Company...................................................... 117,300
1,400 General Motors Corporation.............................................. 81,112
200 Goodyear Tire & Rubber Company.......................................... 12,525
500 ITT Industries.......................................................... 15,500
300 TRW, Inc................................................................ 15,262
-------------
331,499
-------------
Building Materials (.3%)
100 Armstrong World Industries, Inc......................................... 7,125
600 Masco Corporation....................................................... 29,550
400 TJX Companies, Incorporated............................................. 13,550
-------------
50,225
-------------
Houseware (.2%)
500 Rowan Companies, Inc. (b)............................................... 13,187
200 Whirlpool Corporation................................................... 11,562
-------------
24,749
-------------
Leisure (.2%)
300 Brunswick Corporation................................................... 9,037
300 Hasbro, Inc............................................................. 10,350
500 Mattel, Inc............................................................. 20,250
-------------
39,637
-------------
Lodging-Hotel (.4%)
1,100 Hilton Hotels Corporation............................................... 31,144
200 ITT Corporation (b)..................................................... 16,000
</TABLE>
See accompanying notes to investments in securities.
6
<PAGE>
ADVANTUS INDEX 500 FUND
INVESTMENTS IN SECURITIES--CONTINUED
<TABLE>
<CAPTION>
MARKET
SHARES VALUE(a)
- ---------- -------------
CONSUMER CYCLICAL--CONTINUED
<C> <S> <C>
300 Marriott International, Inc............................................. $ 20,737
-------------
67,881
-------------
Photography/Imagery (.7%)
700 Eastman Kodak Company................................................... 45,675
300 Polaroid Corporation.................................................... 12,319
700 Xerox Corporation....................................................... 56,262
-------------
114,256
-------------
Publishing (1.0%)
700 R.R. Donnelly & Sons Company............................................ 26,119
200 Dow Jones & Company, Inc................................................ 10,050
300 Dun & Bradstreet Corporation............................................ 9,562
600 Gannett Company......................................................... 36,300
200 Knight-Ridder, Inc...................................................... 11,012
200 McGraw-Hill Companies, Inc.............................................. 13,962
400 New York Times Company.................................................. 26,025
300 Times Mirror Company.................................................... 17,287
200 Tribune Company......................................................... 12,150
-------------
162,467
-------------
Retail (4.2%)
400 American Greetings...................................................... 17,325
300 Autozone, Inc. (b)...................................................... 8,231
200 Circuit City Stores, Inc................................................ 6,825
300 Costco Companies, Inc. (b).............................................. 13,012
500 Dayton Hudson Corporation............................................... 35,969
300 Dillards, Inc........................................................... 10,537
600 Federated Department Stores (b)......................................... 25,425
750 Gap Incorporated........................................................ 29,297
<CAPTION>
MARKET
SHARES VALUE(a)
- ---------- -------------
<C> <S> <C>
CONSUMER CYCLICAL--CONTINUED
200 Harcourt General, Inc................................................... $ 10,662
1,500 Home Depot, Inc......................................................... 90,469
500 JC Penney Company....................................................... 33,687
700 K Mart Corporation (b).................................................. 7,700
600 Lowe's Companies, Inc................................................... 30,337
300 May Department Stores Company........................................... 15,769
200 Mercantile Stores Company, Inc.......................................... 11,900
150 Midas, Inc. (b)......................................................... 2,480
400 Nike, Inc............................................................... 16,025
200 Nordstrom, Inc.......................................................... 10,175
700 Sears, Roebuck & Company................................................ 32,244
600 Sherwin-Williams Company................................................ 17,100
400 Tandy Corporation....................................................... 15,500
1,200 The Limited, Inc........................................................ 31,800
600 Toys R Us (b)........................................................... 16,087
4,500 Wal-Mart Stores......................................................... 179,437
500 Woolworth Corporation (b)............................................... 10,875
-------------
678,868
-------------
Service (.8%)
1,320 Cendant Corporation (b)................................................. 44,715
300 H & R Block, Inc........................................................ 13,162
300 Interpublic Group Company............................................... 14,719
700 Mirage Resorts, Inc. (b)................................................ 16,144
300 Service Corporation International....................................... 11,700
1,000 Tele-Communications, Inc. (b)........................................... 28,000
-------------
128,440
-------------
</TABLE>
See accompanying notes to investments in securities.
7
<PAGE>
ADVANTUS INDEX 500 FUND
INVESTMENTS IN SECURITIES--CONTINUED
<TABLE>
<CAPTION>
MARKET
SHARES VALUE(a)
- ---------- -------------
CONSUMER CYCLICAL--CONTINUED
<C> <S> <C>
Textiles (.2%)
200 Fruit of the Loom (b)................................................... $ 4,800
200 Liz Clairborne, Inc..................................................... 8,100
600 V.F. Corporation........................................................ 25,650
-------------
38,550
-------------
CONSUMER STAPLES (14.5%)
Beverage (3.3%)
800 Anheuser-Busch Companies, Inc........................................... 35,950
5,100 Coca-Cola Company....................................................... 330,225
400 Coors Company........................................................... 12,700
3,000 Pepsico, Inc............................................................ 108,187
700 The Seagram Company Ltd. (c)............................................ 23,887
900 Whitman Corporation..................................................... 14,962
-------------
525,911
-------------
Broadcasting (.1%)
300 Clear Channel Communications (b)........................................ 23,100
-------------
Entertainment (1.4%)
1,100 Time Warner, Inc........................................................ 70,606
500 Viacom (b).............................................................. 20,875
1,300 Walt Disney Company..................................................... 138,531
-------------
230,012
-------------
Food (2.6%)
925 Archer Daniels Midland Company.......................................... 19,483
400 Best Foods.............................................................. 39,000
800 Campbell Soup Company................................................... 42,800
900 Conagra, Inc............................................................ 28,462
200 General Mills, Inc...................................................... 14,887
600 H.J. Heinz Company...................................................... 33,262
300 Hershey Foods Corporation............................................... 19,106
800 Kellogg Company......................................................... 36,950
<CAPTION>
MARKET
SHARES VALUE(a)
- ---------- -------------
<C> <S> <C>
CONSUMER STAPLES--CONTINUED
300 Quaker Oats Company..................................................... $ 16,125
300 Ralston-Ralston Purina Group............................................ 28,162
900 Sara Lee Corporation.................................................... 49,106
1,200 Unilever N.V. (c)....................................................... 68,475
200 Wm. Wrigley Jr. Company................................................. 14,788
-------------
410,606
-------------
Food and Health (.4%)
300 Cardinal Health Incorporated............................................ 23,231
300 Super Valu, Inc......................................................... 13,163
600 Sysco Corporation....................................................... 26,850
-------------
63,244
-------------
Household Product (2.2%)
200 Clorox Company.......................................................... 15,325
500 Colgate Palmolive Company............................................... 36,625
1,200 Kimberly-Clark Corporation.............................................. 62,625
600 Newell Company.......................................................... 24,638
2,700 Procter & Gamble Company................................................ 211,613
-------------
350,826
-------------
Personal Care (.9%)
500 Alberto-Culver Company.................................................. 14,813
400 Avon Products........................................................... 24,000
1,100 Gillette Company........................................................ 108,625
-------------
147,438
-------------
Restaurants (.6%)
1,300 McDonalds Corporation................................................... 61,263
740 Tricon Global Restaurants (b)........................................... 20,165
</TABLE>
See accompanying notes to investments in securities.
8
<PAGE>
ADVANTUS INDEX 500 FUND
INVESTMENTS IN SECURITIES--CONTINUED
<TABLE>
<CAPTION>
MARKET
SHARES VALUE(a)
- ---------- -------------
CONSUMER STAPLES--CONTINUED
<C> <S> <C>
500 Wendy's International, Inc.............................................. $ 11,156
-------------
92,584
-------------
Retail (1.0%)
600 Albertson's Incorporated................................................ 28,613
1,400 American Stores Company................................................. 30,450
200 CVS Corporation......................................................... 13,113
400 Kroger Company (b)...................................................... 15,650
200 Rite Aid Corporation.................................................... 12,488
900 Walgreen Company........................................................ 29,813
500 Winn-Dixie Stores, Inc.................................................. 24,375
-------------
154,502
-------------
Service (.4%)
500 Automatic Data Processing, Inc.......................................... 29,906
600 Ceridian Corporation (b)................................................ 27,188
300 Deluxe Corporation...................................................... 9,900
-------------
66,994
-------------
Tobacco (1.6%)
500 Fortune Brands, Inc..................................................... 19,125
4,800 Philip Morris Companies, Inc............................................ 199,200
1,000 UST, Inc................................................................ 34,500
-------------
252,825
-------------
ENERGY (7.8%)
Oil (6.6%)
300 Amerada Hess Corporation................................................ 16,406
1,000 Amoco Corporation....................................................... 81,375
700 Atlantic Richfield Company.............................................. 52,063
1,400 Chevron Corporation..................................................... 104,738
5,100 Exxon Corporation....................................................... 302,494
1,600 Mobil Corporation....................................................... 109,000
<CAPTION>
MARKET
SHARES VALUE(a)
- ---------- -------------
<C> <S> <C>
ENERGY--CONTINUED
900 Occidental Petroleum Corporation........................................ $ 22,950
300 Pennzoil Company........................................................ 19,388
300 Phillips Petroleum Company.............................................. 13,200
4,500 Royal Dutch Petroleum (c)............................................... 230,625
1,100 Texaco, Inc............................................................. 57,269
400 Unocal Corporation...................................................... 13,750
900 USX - Marathon Group.................................................... 30,206
-------------
1,053,464
-------------
Oil and Gas (1.2%)
200 Ashland, Inc............................................................ 10,550
800 Baker Hughes Incorporated............................................... 30,850
452 Burlington Resources, Inc............................................... 19,323
600 Dresser Industries, Inc................................................. 21,450
400 Halliburton Company..................................................... 17,975
100 Kerr-McGee Corporation.................................................. 6,263
900 Schlumberger Limited (c)................................................ 66,319
800 Union Pacific Resources Group........................................... 17,900
100 Western Atlas Corporation (b)........................................... 6,231
-------------
196,861
-------------
FINANCIAL (16.4%)
Banks (8.1%)
1,200 Banc One Corporation.................................................... 67,050
200 Bank of Boston Corporation.............................................. 17,900
700 Bank of New York, Inc................................................... 37,931
1,600 BankAmerica Corporation................................................. 113,700
</TABLE>
See accompanying notes to investments in securities.
9
<PAGE>
ADVANTUS INDEX 500 FUND
INVESTMENTS IN SECURITIES--CONTINUED
<TABLE>
<CAPTION>
MARKET
SHARES VALUE(a)
- ---------- -------------
FINANCIAL--CONTINUED
<C> <S> <C>
200 Bankers Trust New York Corporation...................................... $ 20,863
300 BB&T Corporation........................................................ 17,681
800 Chase Manhattan Corporation............................................. 85,750
900 Citicorp................................................................ 107,100
300 Comerica................................................................ 28,313
400 Corestates Financial Corporation........................................ 30,600
300 Fifth Third Bancorp..................................................... 22,875
500 First Chicago NBD Corporation........................................... 37,313
1,200 First Union Corporation................................................. 57,675
500 Fleet Financial Group, Inc.............................................. 35,813
400 Huntington Bancshares................................................... 13,485
300 JP Morgan & Company, Inc................................................ 30,356
600 Keycorp................................................................. 39,000
400 Mellon Bank Corporation................................................. 24,150
500 National City Corporation............................................... 30,094
1,805 Nationsbank Corporation................................................. 108,300
1,900 Norwest Corporation..................................................... 69,350
600 PNC Bank Corporation.................................................... 30,938
200 Republic New York Corporation........................................... 21,775
300 State Street Corporation................................................ 16,800
400 Summit Bancorp.......................................................... 20,000
400 Suntrust Banks, Inc..................................................... 27,700
600 Synovus Financial Corporation........................................... 19,763
551 US Bancorp.............................................................. 60,335
500 Wachovia Corporation.................................................... 38,875
<CAPTION>
MARKET
SHARES VALUE(a)
- ---------- -------------
<C> <S> <C>
FINANCIAL--CONTINUED
200 Wells Fargo & Company................................................... $ 61,800
-------------
1,293,285
-------------
Consumer Finance (.5%)
300 Beneficial Corporation.................................................. 23,288
600 Green Tree Financial Corporation........................................ 11,888
200 Household International, Inc............................................ 24,900
750 MBNA Corporation........................................................ 23,297
-------------
83,373
-------------
Finance-Diversified (1.9%)
1,000 American Express Company................................................ 83,688
450 Charles Schwab Corporation.............................................. 16,425
1,200 Federal Home Loan Mortgage Corporation.................................. 53,400
2,200 Federal National Mortgage Association................................... 135,850
200 MGIC Investment Corporation............................................. 13,525
-------------
302,888
-------------
Insurance (4.8%)
200 Aetna Incorporated...................................................... 14,700
800 Allstate Corporation.................................................... 70,800
500 American General Corporation............................................ 28,188
1,450 American International Group............................................ 159,953
450 Aon Corporation......................................................... 25,116
300 Chubb Corporation....................................................... 22,781
100 Cigna Corporation....................................................... 16,956
600 Conseco, Inc............................................................ 27,450
</TABLE>
See accompanying notes to investments in securities.
10
<PAGE>
ADVANTUS INDEX 500 FUND
INVESTMENTS IN SECURITIES--CONTINUED
<TABLE>
<CAPTION>
MARKET
SHARES VALUE(a)
- ---------- -------------
FINANCIAL--CONTINUED
<C> <S> <C>
200 General RE Corporation.................................................. $ 41,625
300 ITT Hartford Group...................................................... 27,000
200 Jefferson-Pilot Corporation............................................. 16,338
300 Lincoln National Corporation............................................ 22,706
200 Loews Corporation....................................................... 19,963
400 Marsh & McLennen........................................................ 29,550
200 MBIA, Inc............................................................... 12,950
100 Progressive Corporation................................................. 10,938
500 Providian Financial..................................................... 24,438
200 Safeco Corporation...................................................... 9,988
300 St. Paul Companies, Inc................................................. 26,100
450 Sunamerica Incorporated................................................. 18,084
400 Torchmark Corporation................................................... 16,625
100 Transamerica Corporation................................................ 10,275
2,189 Travelers Group Incorporated............................................ 108,356
200 Unum Corporation........................................................ 9,725
-------------
770,605
-------------
Investment Bankers/Brokers (.6%)
600 Merrill Lynch & Co., Inc................................................ 37,875
1,130 Morgan Stanley Dean Witter.............................................. 65,964
-------------
103,839
-------------
Public Finance (.1%)
400 Countrywide Credit Industries........................................... 18,650
-------------
<CAPTION>
MARKET
SHARES VALUE(a)
- ---------- -------------
<C> <S> <C>
FINANCIAL--CONTINUED
Savings and Loans (.4%)
200 H.F. Ahmanson & Company................................................. $ 11,663
300 Golden West Financial Corporation....................................... 25,331
380 Washington Mutual Incorporated.......................................... 24,415
-------------
61,409
-------------
HEALTH CARE (11.6%)
Biotechnology (.2%)
500 Amgen, Inc. (b)......................................................... 25,000
-------------
Drugs (5.8%)
1,400 American Home Products Corporation...................................... 133,613
2,200 Eli Lilly & Company..................................................... 148,500
2,500 Merck & Co., Inc........................................................ 293,125
2,600 Pfizer, Inc............................................................. 213,038
1,000 Pharmacia & Upjohn...................................................... 38,438
1,500 Schering Plough Corporation............................................. 108,563
-------------
935,277
-------------
Health Care-Diversified (3.9%)
1,600 Abbott Laboratories..................................................... 113,300
500 Allergan, Inc........................................................... 17,000
2,100 Bristol-Myers Squibb Company............................................ 209,344
500 HealthSouth Rehabilitation Company (b).................................. 11,219
2,700 Johnson & Johnson....................................................... 180,731
600 Mallinckrodt, Inc....................................................... 21,263
500 Warner-Lambert Company.................................................. 75,250
-------------
628,107
-------------
</TABLE>
See accompanying notes to investments in securities.
11
<PAGE>
ADVANTUS INDEX 500 FUND
INVESTMENTS IN SECURITIES--CONTINUED
<TABLE>
<CAPTION>
MARKET
SHARES VALUE(a)
- ---------- -------------
HEALTH CARE--CONTINUED
<C> <S> <C>
Hospital Management (.4%)
1,200 Columbia/HCA Healthcare Corporation..................................... $ 30,000
900 Tenet Healthcare Corporation (b)........................................ 31,050
-------------
61,050
-------------
Managed Care (.1%)
200 United Health Care...................................................... 10,250
-------------
Medical Products/Supplies (1.2%)
300 Bausch & Lomb Incorporated.............................................. 12,863
500 Baxter International Inc................................................ 27,844
200 Becton, Dickinson & Company............................................. 12,625
700 Biomet, Inc............................................................. 20,038
600 Boston Scientific Corporation (b)....................................... 30,450
400 Guidant Corporation..................................................... 25,700
800 Medtronic, Inc.......................................................... 40,850
400 St. Jude Medical, Inc. (b).............................................. 13,000
300 United States Surgical Corporation...................................... 8,569
-------------
191,939
-------------
TECHNOLOGY (13.3%)
600 3 Com Corporation (b)................................................... 19,838
200 Adobe Systems, Inc...................................................... 7,700
900 Advanced Micro Devices, Inc. (b)........................................ 18,056
500 Apple Computer Incorporated (b)......................................... 9,156
600 Applied Materials, Inc. (b)............................................. 19,688
400 Bay Networks, Inc. (b).................................................. 10,875
<CAPTION>
MARKET
SHARES VALUE(a)
- ---------- -------------
<C> <S> <C>
TECHNOLOGY--CONTINUED
2,000 Cisco Systems, Inc. (b)................................................. $ 126,125
2,800 Compaq Computer Corporation............................................. 84,175
1,100 Computer Associates International....................................... 58,506
300 Computer Sciences Corporation (b)....................................... 25,463
600 Dell Computer Corporation (b)........................................... 59,663
700 Digital Equipment (b)................................................... 39,594
1,100 DSC Communications (b).................................................. 22,000
700 EMC Corporation (b)..................................................... 22,794
400 Equifax Incorporated.................................................... 13,150
700 First Data Corporation.................................................. 21,438
600 Harris Corporation...................................................... 28,575
400 HBO & Company........................................................... 20,925
2,200 Hewlett-Packard Company................................................. 132,000
3,400 Intel................................................................... 275,400
2,000 International Business Machine.......................................... 197,375
200 KLA-Tencor Corporation (b).............................................. 7,500
1,300 Lucent Technologies, Inc................................................ 115,050
700 Micron Technology, Inc.................................................. 24,238
2,500 Microsoft Corporation (b)............................................... 372,969
1,100 Motorola................................................................ 65,381
300 National Semiconductor Corporation (b).................................. 8,438
600 Nextlevel System, Inc. (b).............................................. 10,425
900 Northern Telecom Limited................................................ 40,613
</TABLE>
See accompanying notes to investments in securities.
12
<PAGE>
ADVANTUS INDEX 500 FUND
INVESTMENTS IN SECURITIES--CONTINUED
<TABLE>
<CAPTION>
MARKET
SHARES VALUE(a)
- ---------- -------------
TECHNOLOGY--CONTINUED
<C> <S> <C>
1,800 Oracle Corporation (b).................................................. $ 41,850
700 Parametric Technology Corporation (b)................................... 35,525
200 Perkin-Elmer Corporation................................................ 11,800
500 Seagate Technology, Inc. (b)............................................ 11,594
900 Silicon Graphics Incorporated (b)....................................... 13,950
800 Sprint Corporation...................................................... 47,500
800 Sun Microsystems, Inc................................................... 38,350
600 Tellabs Incorporated (b)................................................ 30,713
800 Texas Instruments Incorporated (b)...................................... 43,700
100 W.W. Grainger, Inc...................................................... 9,625
-------------
2,141,717
-------------
TRANSPORTATION (1.2%)
Air Freight (.1%)
300 Federal Express Corporation (b)......................................... 19,519
-------------
Airlines (.4%)
200 AMR Corporation (b)..................................................... 25,250
600 Southwest Airlines Company.............................................. 15,638
300 US Source Air Group, Inc. (b)........................................... 18,281
-------------
59,169
-------------
Railroads (.6%)
200 Burlington Northern Santa Fe............................................ 17,350
400 CSX Corporation......................................................... 21,200
600 Norfolk Southern Corporation............................................ 18,938
<CAPTION>
MARKET
SHARES VALUE(a)
- ---------- -------------
<C> <S> <C>
TRANSPORTATION--CONTINUED
600 Union Pacific Corporation............................................... $ 36,000
-------------
93,488
-------------
Transport Services (.1%)
600 Laidlaw, Inc. (b)....................................................... 8,550
-------------
UTILITIES (3.2%)
Electric Companies (2.7%)
200 Ameren Corporation (b).................................................. 7,325
200 American Electric Power Company......................................... 9,863
200 Carolina Power & Light Company.......................................... 8,125
300 Central & Southwest Corporation......................................... 8,119
200 Cinergy................................................................. 6,900
700 Consolidated Edison, Inc................................................ 28,919
600 Dominion Resources, Inc................................................. 23,925
600 DTE Energy Company...................................................... 21,525
608 Duke Energy Corporation................................................. 32,946
1,200 Edison International.................................................... 32,250
1,000 Entergy Corporation..................................................... 28,625
700 FirstEnergy Corporation................................................. 20,300
200 FPL Group Incorporated.................................................. 11,475
200 GPU Incorporated........................................................ 7,863
1,100 Houston Industries, Inc................................................. 28,738
200 Northern States Power Company........................................... 10,725
800 Pacific Gas & Electric Company.......................................... 23,850
1,100 Pacificorp.............................................................. 25,506
</TABLE>
See accompanying notes to investments in securities.
13
<PAGE>
ADVANTUS INDEX 500 FUND
INVESTMENTS IN SECURITIES--CONTINUED
<TABLE>
<CAPTION>
MARKET
SHARES VALUE(a)
- ---------- -------------
UTILITIES--CONTINUED
<C> <S> <C>
300 Peco Energy Company..................................................... $ 5,681
1,000 Public Service Enterprise Group......................................... 31,000
1,300 Southern Company........................................................ 31,606
600 Texas Utilities Company................................................. 24,675
300 Unicom Corporation...................................................... 9,300
-------------
439,241
-------------
<CAPTION>
MARKET
SHARES VALUE(a)
- ---------- -------------
<C> <S> <C>
UTILITIES--CONTINUED
Natural Gas (.5%)
300 Coastal Corporation..................................................... $ 17,400
300 Consolidated Natural Gas Company........................................ 16,294
400 Enron Corporation....................................................... 16,575
300 Sonat, Inc.............................................................. 13,106
400 The Williams Company.................................................... 11,400
-------------
74,775
-------------
Total common stock
(cost: $13,574,031).................................................................. 15,912,717
-------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
- ----------
<C> <S> <C> <C> <C>
SHORT-TERM SECURITIES (1.7%)
$175,000 US Treasury Bill................................. 4.997% 03/19/98 173,906
100,000 US Treasury Bill................................. 5.154% 04/23/98 98,872
-------------
Total short-term securities (cost: $272,773).......................... 272,778
-------------
Total investments in securities (cost: $13,846,804) (d)............... $16,185,495
-------------
-------------
</TABLE>
Notes to Investments in Securities
- ----------------------------
(a) Securities are valued by procedures described in note 2 to the financial
statements.
(b) Presently non-income producing.
(c) The Fund held 2.6% of net assets in foreign securities as of January 31,
1998.
(d) At January 31, 1998 the cost of securities for federal income tax purposes
was $13,865,725. The aggregate unrealized appreciation and depreciation of
investments in securities based on this cost were:
<TABLE>
<S> <C>
Gross unrealized appreciation........... $ 2,692,444
Gross unrealized depreciation........... (372,674)
-------------
Net unrealized appreciation............. $ 2,319,770
-------------
-------------
</TABLE>
14
<PAGE>
ADVANTUS INDEX 500 FUND
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 1998
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Investments in securities, at value--see accompanying
schedule for detailed listing (identified cost:
$13,846,804)............................................... $ 16,185,495
Cash in bank on demand deposit.............................. 4,437
Receivable for Fund shares sold............................. 286,852
Receivable for investment securities sold................... 575,152
Dividends receivable........................................ 15,976
Organizational costs........................................ 71,058
------------
Total assets............................................ 17,138,970
------------
LIABILITIES
Payable for investment securities purchased................. 842,681
Payable for Fund shares redeemed............................ 45,164
Payable to Adviser.......................................... 194,292
------------
Total liabilities....................................... 1,082,137
------------
Net assets applicable to outstanding capital stock.......... $ 16,056,833
------------
------------
Represented by:
Capital stock--authorized 10 billion shares (Class A--2
billion shares, Class B--2 billion shares, Class C--2
billion shares and 4 billion shares unallocated) of $.01
par value (note 1)....................................... $ 12,147
Additional paid-in capital................................ 13,677,161
Undistributed net investment income....................... 6,938
Accumulated net realized gains from investments........... 21,896
Unrealized appreciation on investments.................... 2,338,691
------------
Total--representing net assets applicable to outstanding
capital stock.......................................... $ 16,056,833
------------
------------
Net assets applicable to outstanding Class A Shares......... $ 10,236,395
------------
------------
Net assets applicable to outstanding Class B Shares......... $ 4,993,072
------------
------------
Net assets applicable to outstanding Class C Shares......... $ 827,366
------------
------------
Shares outstanding and net asset value per share:
Class A--Shares outstanding 773,655....................... $ 13.23
------------
------------
Class B--Shares outstanding 378,283....................... $ 13.20
------------
------------
Class C--Shares outstanding 62,765........................ $ 13.18
------------
------------
</TABLE>
See accompanying notes to financial statements.
15
<PAGE>
ADVANTUS INDEX 500 FUND
STATEMENT OF OPERATIONS
PERIOD FROM AUGUST 1, 1997 TO JANUARY 31, 1998
(UNAUDITED)
<TABLE>
<S> <C>
Investment income:
Interest.................................................. $ 4,093
Dividends................................................. 102,855
-----------
Total investment income............................... 106,948
-----------
Expenses (note 4):
Investment advisory fee................................... 22,042
Distribution fees--Class A................................ 13,664
Distribution fees--Class B................................ 16,404
Distribution fees--Class C................................ 2,878
Administrative service fee................................ 21,600
Amortization of organizational costs...................... 8,882
Transfer agent fees....................................... 6,000
Custodian fees............................................ 7,955
Auditing and accounting services.......................... 4,500
Legal fees................................................ 1,311
Directors' fees........................................... 85
Registration fees......................................... 16,284
Printing and shareholder reports.......................... 13,539
Insurance................................................. 2,886
Other..................................................... 2,489
-----------
Total expenses........................................ 140,519
Less fees and expenses waived or absorbed:
Class A distribution fees............................... (8,261)
Other fund expenses..................................... (68,675)
-----------
Total fees and expenses waived or absorbed............ (76,936)
-----------
Total net expenses.................................... 63,583
-----------
Investment income--net................................ 43,365
-----------
Realized and unrealized gains on investments:
Net realized gains on investments (note 3)................ 38,976
Net change in unrealized appreciation or depreciation on
investments.............................................. 422,272
-----------
Net gains on investments.................................. 461,248
-----------
Net increase in net assets resulting from operations........ $ 504,613
-----------
-----------
</TABLE>
See accompanying notes to financial statements.
16
<PAGE>
ADVANTUS INDEX 500 FUND
STATEMENTS OF CHANGES IN NET ASSETS
PERIOD FROM AUGUST 1, 1997 TO JANUARY 31, 1998 AND
PERIOD FROM SEPTEMBER 4, 1996, COMMENCEMENT OF OPERATIONS, TO JULY 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
1998 1997
------------ ------------
<S> <C> <C>
Operations:
Investment income--net.......................... $ 43,365 $ 48,081
Net realized gains on investments............... 38,976 4,576
Net change in unrealized appreciation or
depreciation on investments.................... 422,272 1,916,419
------------ ------------
Increase in net assets resulting from
operations................................. 504,613 1,969,076
------------ ------------
Distributions to shareholders from:
Investment income -- net:
Class A....................................... (51,660) (37,824)
Class B....................................... (7,278) (3,405)
Class C....................................... (1,062) (1,043)
Net realized gains on investments:
Class A....................................... (14,437) --
Class B....................................... (6,117) --
Class C....................................... (1,102) --
------------ ------------
Total distributions......................... (81,656) (42,272)
------------ ------------
Capital share transactions (notes 4 and 6):
Proceeds from sales:
Class A....................................... 2,295,617 6,559,299
Class B....................................... 3,250,110 1,754,388
Class C....................................... 589,971 228,318
Proceeds from issuance of shares as a result of
reinvested dividends:
Class A....................................... 19,687 5,289
Class B....................................... 13,306 3,405
Class C....................................... 2,164 1,043
Payments for redemption of shares:
Class A....................................... (524,537) (53,724)
Class B....................................... (365,327) (20,288)
Class C....................................... (50,628) (1,021)
------------ ------------
Increase in net assets from capital share
transactions............................... 5,230,363 8,476,709
------------ ------------
Total increase in net assets................ 5,653,320 10,403,513
Net assets at beginning of period................. 10,403,513 --
------------ ------------
Net assets at end of period (including
undistributed net investment income of $6,938 and
$14,691, respectively)........................... $ 16,056,833 $ 10,403,513
------------ ------------
------------ ------------
</TABLE>
See accompanying notes to financial statements.
17
<PAGE>
ADVANTUS INDEX 500 FUND
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 1998
(UNAUDITED)
(1) ORGANIZATION
Advantus Index 500 Fund, Inc. (the Fund) was incorporated on July 3, 1996.
The Fund is registered under the Investment Company Act of 1940 (as amended) as
a diversified, open-end management investment company. The Fund's investment
objective is to seek investment results that correspond generally to that of the
S&P 500 Index.
The Fund currently issues three classes of shares: Class A, Class B and
Class C shares. Class A shares are sold subject to a front-end sales charge.
Class B shares are sold subject to a contingent deferred sales charge payable
upon redemption if redeemed within six years of purchase. Class C shares are
sold without either a front-end sales charge or a contingent deferred sales
charge. Both Class B and Class C are subject to a higher Rule 12b-1 fee than
Class A shares. Both Class B and Class C shares automatically convert to Class A
shares at net asset value after a specified holding period. Such holding periods
decline as the amount of the purchase increases and range from 28 to 84 months
after purchase for Class B shares and 40 to 96 months after purchase for Class C
shares. All three classes of shares have identical voting, dividend, liquidation
and other rights and the same terms and conditions, except that the level of
distribution fees charged differs between Class A, Class B and Class C shares.
Income, expenses (other than distribution fees) and realized and unrealized
gains or losses are allocated to each class of shares based upon its relative
net assets.
On September 4, 1996, Advantus Capital Management, Inc. (Advantus Capital or
the Adviser) purchased 5,000 Class A shares, 5,000 Class B shares and 5,000
Class C shares. Advantus Capital is a wholly-owned subsidiary of MIMLIC Asset
Management Company (MIMLIC Management) which is a wholly-owned subsidiary of The
Minnesota Mutual Life Insurance Company (Minnesota Mutual). Operations of the
Fund did not formally commence until January 31, 1997 when the shares became
effectively registered under the Securities Exchange Act of 1933. Prior to
commencement of operations, Minnesota Mutual purchased 500,000 Class A shares
for $5 million.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies followed by the Fund are summarized as
follows:
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of increases and decreases in net assets
resulting from operations during the period. Actual results could differ from
those estimates.
INVESTMENTS IN SECURITIES
Investments in securities traded on a national exchange are valued at the
last sales price on that exchange prior to the time when assets are valued;
securities traded in the over-the-counter market and listed securities for which
no sale was reported on that date are valued on the basis of the last current
bid price, by an independent pricing service or at a price deemed best to
reflect fair value as quoted by dealers who make
18
<PAGE>
ADVANTUS INDEX 500 FUND
NOTES TO FINANCIAL STATEMENTS--CONTINUED
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)
markets in these securities. When market quotations are not readily available,
securities are valued at fair value as determined in good faith under procedures
adopted by the Board of Directors. Short-term securities are valued at market.
Security transactions are accounted for on the date the securities are
purchased or sold. Realized gains and losses are calculated on the
identified-cost basis. Dividend income is recognized on the ex-dividend date and
interest income, including amortization of bond premium and discount computed on
a level yield basis, is accrued daily.
FEDERAL TAXES
The Fund's policy is to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
taxable income to shareholders. Therefore, no income tax provision is required.
The Fund's policy is to make required minimum distributions prior to December
31, in order to avoid federal excise tax.
Net investment income and net realized gains (losses) may differ for
financial statement and tax purposes primarily because of temporary book-to-tax
differences. The character of distributions made during the year from net
investment income or net realized gains may differ from their ultimate
characterization for federal income tax purposes. Also, due to the timing of
dividend distributions, the fiscal year in which amounts are distributed may
differ from the year that the income or realized gains (losses) were recorded by
the Fund.
On the statement of assets and liabilities, as a result of permanent
book-to-tax differences, a reclassification adjustment was made to increase
undistributed net investment income and decrease additional paid-in capital by
$8,882.
DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income are declared and paid quarterly.
Realized gains, if any, are paid annually.
(3) INVESTMENT SECURITY TRANSACTIONS
For the period from August 1, 1997 to January 31, 1998, purchases of
securities and proceeds from sales, other than temporary investments in
short-term securities aggregated $6,513,493 and $1,332,121, respectively.
(4) EXPENSES AND RELATED PARTY TRANSACTIONS
The Fund has an investment advisory agreement with Advantus Capital. Under
the agreement, Advantus Capital acts as investment adviser and manager for the
Fund. The fee for investment management and advisory services is based on the
average daily net assets of the Fund at the annual rate of .34 percent. The Fund
has engaged Minnesota Mutual to act as its transfer agent, dividend disbursing
agent and redemption agent and bears the expenses of such services. Subject to a
minimum annual fee of $12,000, Minnesota Mutual provides transfer agent services
to the Fund at an annual cost of $25 per shareholder account.
The Fund has adopted separate Plans of Distribution applicable to Class A,
Class B and Class C shares, respectively, relating to the payment of certain
distribution expenses pursuant to Rule 12b-1 under the Investment Company Act of
1940 (as amended). The Fund pays distribution fees to Ascend Financial Services,
Inc. (Ascend), formerly known as MIMLIC Sales Corporation, the underwriter of
the Fund and wholly-owned subsidiary of MIMLIC Management, to be used to pay
certain expenses incurred in the distribution, promotion and servicing of the
Fund's shares. The Class A Plan provides for a fee up to .30 percent of average
daily net
19
<PAGE>
ADVANTUS INDEX 500 FUND
NOTES TO FINANCIAL STATEMENTS--CONTINUED
(4) EXPENSES AND RELATED PARTY TRANSACTIONS--(CONTINUED)
assets of Class A shares. The Class B and Class C Plans provide for a fee up to
1.00 percent of average daily net assets of Class B and Class C shares,
respectively. The Class B and Class C 1.00 percent fee is comprised of a .75
percent distribution fee and a .25 percent service fee. Ascend is currently
waiving that portion of Class A distribution fees which exceeds, as a percentage
of average daily net assets, .15 percent. Ascend waived Class A distribution
fees in the amount of $8,261 for the period ended January 31, 1998.
The Fund also bears certain other operating expenses including outside
directors' fees, custodian fees, registration fees, printing and shareholder
reports, legal, auditing and accounting services, organizational costs and other
miscellaneous expenses.
The Fund pays an administrative services fee to Minnesota Mutual for
accounting, auditing, legal and other administrative services which Minnesota
Mutual provides. The administrative service fee is $3,600 per month.
Advantus Capital directly incurs and pays the above operating expenses and
the Fund in turn reimburses Advantus Capital. During the period ended January
31, 1998, Advantus Capital voluntarily agreed to absorb $68,675 in expenses
which were otherwise payable by the Fund.
Sales charges received by Ascend for distributing the Fund's three classes
of shares amounted to $97,187.
As of January 31, 1998, Minnesota Mutual and subsidiaries and the directors
and officers of the Fund as a whole own the following shares:
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENTAGE OWNED
---------------- ----------------
<S> <C> <C>
Class A...................................... 505,139 65.3%
Class B...................................... 5,112 1.4%
Class C...................................... 5,104 8.1%
</TABLE>
Legal fees were paid to a law firm of which the Fund's secretary is a
partner in the amount of $1,311.
(5) ORGANIZATIONAL COSTS
The Fund incurred organizational expenses in connection with the start-up
and initial registration. These costs will be amortized over 60 months on a
straight-line basis beginning with the commencement of operations. If any or all
of the shares held by Advantus Capital, or any other holder, representing
initial capital of the Fund are redeemed during the amortization period, the
redemption proceeds will be reduced by the pro rata portion (based on the ratio
that the number of initial shares redeemed bears to the total number of
outstanding initial shares of the Fund at the date of redemption) of the
unamortized organizational cost balance.
(6) CAPITAL SHARE TRANSACTIONS
Transactions in shares for the periods from August 1, 1997 to January 31,
1998 and September 4, 1996 to July 31, 1997 were as follows:
<TABLE>
<CAPTION>
CLASS A CLASS B
----------------------------------- -----------------------------------
1998 1997 1998 1997
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Sold................................................... 179,672 638,721 253,081 153,967
Issued for reinvested distributions.................... 1,517 456 1,050 303
Redeemed............................................... (42,006) (4,705) (28,335) (1,783)
------- ------- ------- -------
139,183 634,472 225,796 152,487
------- ------- ------- -------
------- ------- ------- -------
<CAPTION>
CLASS C
-----------------------------------
1998 1997
-------- --------
<S> <C> <C>
Sold................................................... 45,833 20,674
Issued for reinvested distributions.................... 171 99
Redeemed............................................... (3,929) (83)
------ ------
42,075 20,690
------ ------
------ ------
</TABLE>
20
<PAGE>
ADVANTUS INDEX 500 FUND
NOTES TO FINANCIAL STATEMENTS--CONTINUED
(7) FINANCIAL HIGHLIGHTS
Per share data for a share of capital stock and selected information for the
period from August 1, 1997 to January 31, 1998 and the period from January 31,
1997 (date of inception) to July 31, 1997 are as follows:
<TABLE>
<CAPTION>
CLASS A CLASS B
----------------------------------- -----------------------------------
1998 1997 1998 1997
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period.... $12.89 $10.68 $12.87 $10.69
------- ------ ------ ------
Income from investment operations:
Net investment income................. .07 .06 .02 .01
Net gains or losses on securities
(both realized and unrealized)....... .36 2.21 .35 2.21
------- ------ ------ ------
Total from investment operations.... .43 2.27 .37 2.22
------- ------ ------ ------
Less distributions:
Dividends from net investment
income............................... (.07) (.06) (.02) (.04)
Distributions from capital gains...... (.02) -- (.02) --
------- ------ ------ ------
Total distributions................. (.09) (.06) (.04) (.04)
------- ------ ------ ------
Net asset value, end of period.......... $13.23 $12.89 $13.20 $12.87
------- ------ ------ ------
------- ------ ------ ------
Total return (a)........................ 3.5% 21.3% 3.0% 15.8%
Net assets, end of period (in
thousands)............................. $10,236 $8,176 $4,993 $1,962
Ratio of expenses to average daily net
assets (b)(c).......................... .71% .70% 1.59% 1.60%
Ratio of net investment income to
average daily net assets (b)(c)........ .93% 1.19% .03% .29%
Portfolio turnover rate (excluding
short-term securities)................. 10.37% 5.84% 10.37% 5.84%
Average commission rate on common stock
transactions (d)....................... $.0458 $.0319 $.0458 $.0319
<CAPTION>
CLASS C
-----------------------------------
1998 1997
---------------- ----------------
<S> <C> <C>
Net asset value, beginning of period.... $12.85 $10.69
------ ------
Income from investment operations:
Net investment income................. .02 .01
Net gains or losses on securities
(both realized and unrealized)....... .35 2.18
------ ------
Total from investment operations.... .37 2.19
------ ------
Less distributions:
Dividends from net investment
income............................... (.02) (.03)
Distributions from capital gains...... (.02) --
------ ------
Total distributions................. (.04) (.03)
------ ------
Net asset value, end of period.......... $13.18 $12.85
------ ------
------ ------
Total return (a)........................ 3.0% 20.4%
Net assets, end of period (in
thousands)............................. $ 827 $ 266
Ratio of expenses to average daily net
assets (b)(c).......................... 1.59% 1.60%
Ratio of net investment income to
average daily net assets (b)(c)........ .02% .29%
Portfolio turnover rate (excluding
short-term securities)................. 10.37% 5.84%
Average commission rate on common stock
transactions (d)....................... $.0458 $.0319
</TABLE>
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(a) Total return figures are based on a share outstanding throughout the period
and assumes reinvestment of distributions at net asset value. Total return
figures do not reflect the impact of front-end or contingent deferred sales
charges. For periods less than one year, total return presented has not been
annualized.
(b) Adjusted to an annual basis.
(c) The Fund's Distributor and Adviser voluntarily waived and absorbed $76,936
and $50,025 in expenses for the periods from August 1, 1997 to January 31,
1998 and January 31, 1997 to July 31, 1997, respectively. If Class A shares
had been charged for these expenses, the ratio of expenses to average daily
net assets would have been 1.95% and 2.29%, respectively, and the ratio of
net investment income (loss) to average daily net assets would have been
(.31%) and (.40%), respectively. If Class B shares had been charged for
these expenses, the ratio of expenses to average daily net assets would have
been 2.64% and 2.99%, respectively, and the ratio of net investment income
(loss) to average daily net assets would have been (1.02%) and (1.10%),
respectively. If Class C shares had been charged for these expenses, the
ratio of expenses to average daily net assets would have been 2.64% and
2.99%, respectively, and the ratio of net investment income (loss) to
average daily net assets would have been (1.03%) and (1.10%), respectively.
(d) Average commission rate is calculated by dividing the total brokerage
commissions paid on applicable purchases and sales of common stocks for the
period by the total number of related shares purchased and sold.
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SHAREHOLDER SERVICES
The Advantus Family of Funds offers a variety of services that enhance your
ability to manage your assets. Check each Fund's prospectus for the details of
the services and any limitations that apply to a particular Fund.
EXCHANGE PRIVILEGES: You can move all or part of your investment dollars from
one fund to any other Advantus Fund you own (for identical registrations within
the same class) at any time as your needs change. Exchanges are at the then
current net asset value (exchanges from the Advantus Money Market Fund will
incur the applicable sales charge, if not previously subjected to the charge).
Shareholders may make four exchanges or telephone transfers between the Funds
each calendar year without incurring a transaction charge. Thereafter, there
will be a $7.50 transaction charge for each additional exchange or transfer
within the calendar year. Systematic Exchange Plans are exempt from this charge.
INCOME DISTRIBUTION FLEXIBILITY: You can have your fund dividends and other
distributions automatically reinvested with no sales charge, direct them from
one Advantus Fund to any other you own within the Fund family or, if you desire,
we'll pay you in cash.
SYSTEMATIC WITHDRAWAL PLAN: You can set up a plan to receive checks at
specified intervals from your fund account-subject to minimum guidelines.
Depending upon the performance of the underlying investment options, the value
may be worth more or less than the original amount invested when withdrawn.
DIRECT DEPOSITS: At your request we will deposit your dividends or systematic
withdrawals directly into your checking or savings account instead of sending
you a check.
TELEPHONE TRANSFER: You may transfer money from one Advantus account to any
other Advantus account you own just by calling our toll free number. Sign up for
telephone exchanges on the Advantus Application or complete the telephone
authorization form.
SYSTEMATIC TRANSFER: If you have an Advantus Money Market account you may
transfer a set amount of money to another Advantus Fund to diversify your
investment portfolio and take advantage of dollar-cost averaging.
AUTOMATIC PAYMENT OF INSURANCE PREMIUMS: You may automatically pay your
Minnesota Mutual insurance premiums out of your Advantus Money Market account.
REDUCED SALES CHARGES: Letter of Intent, combined purchases with spouse,
children or single trust estates, and the Right of Accumulation make it possible
for you to reduce the sales charge on Advantus's non-money market funds.
SPECIAL PURCHASE PLANS: Our special purchase plans enable you to open an
Advantus Fund account for as little as $25 and lower your average share cost
through "dollar-cost averaging." (Dollar-cost averaging does not assure a
profit, nor does it prevent loss in declining markets). One of these plans--The
Automatic Investment Plan--allows you to invest automatically each month from
your checking or savings account.
IRAs, OTHER QUALIFIED PLAN: You can use the Advantus Family of Funds for your
Individual Retirement Account or other qualified plan including SEPS, SIMPLE,
profit sharing, money purchase or defined benefit plans.
GROUP INVESTMENT PLAN: This plan provides employers and employees with a
convenient means for investing in the funds through payroll deduction.
TELEPHONE REDEMPTION: You may call us and redeem shares over the phone. The
proceeds will be sent by check to the address of record for the account. Amounts
over $1,000 may be wire transferred to your personal bank account. The
prevailing wire charge will be added to the withdrawal amount. Sign up for
22
<PAGE>
telephone redemption on the Advantus Application or complete a Service Request
Form. To have the redemption automatically deposited into your checking account,
please send a voided check from your bank. Depending on the performance of the
underlying investment options, the value may be worth more or less than the
original amount invested upon redemption. Some limitations apply, please refer
to the prospectus for details.
ACCOUNT UPDATES: You'll receive written confirmation of every investment you
initiate (monthly statements for your Money Market account) and quarterly
reports to help you track all of your investments in the Advantus Family of
Funds, and annual tax statements. Semi-annual and annual reports will provide
you with portfolio information, fund performance data and the current investment
outlook.
TOLL-FREE SERVICE LINE: For your convenience in obtaining information and
assistance directly from Advantus Shareholder Services, call (1-800-665-6005).
Our voice response system is available from 7 a.m. to 3 a.m. Central Time Monday
through Friday, and 8 a.m. to 5 p.m. on Saturday. This system allows you to
access current net asset values and your account balances.
HOW TO INVEST
You can invest in one or more of the ten Advantus Funds through your local
registered representative of Ascend Financial Services, Inc. (formerly known as
MIMLIC Sales Corporation), distributor of the Funds. Contact your representative
for information and a prospectus for any of the Advantus Funds you are
interested in.
MINIMUM INVESTMENTS: Your initial investment in any of the Advantus Funds can
be as small as $25 when you use our Systematic Investment Plan. Minimum lump-sum
initial investment is $250. Minimum subsequent investment is $25.
THE FUND'S MANAGER
Advantus Capital Management, Inc., investment adviser to the Fund, selects
and reviews the Fund's investments and provides executive and other personnel
for the Fund's management.
Advantus Capital Management, Inc. manages twelve mutual funds containing
$2.5 billion in assets in addition to $1.9 billion in assets for other clients.
Advantus Capital's seasoned portfolio managers average more than 11 years of
investment experience.
ADVANTUS FAMILY OF FUNDS
Advantus Bond Fund
Advantus Horizon Fund
Advantus Spectrum Fund
Advantus Enterprise Fund
Advantus Cornerstone Fund
Advantus Money Market Fund
Advantus Mortgage Securities Fund
Advantus International Balanced Fund
Advantus Venture Fund
Advantus Index 500 Fund
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THIS REPORT HAS BEEN PREPARED FOR SHAREHOLDERS AND MAY BE DISTRIBUTED
TO OTHERS ONLY IF PRECEDED OR ACCOMPANIED BY A CURRENT PROSPECTUS.
READ THE PROSPECTUS CAREFULLY BEFORE YOU INVEST.
[ADVANTUS -TM- FAMILY OF FUNDS]
ASCEND FINANCIAL SERVICES, INC.,
SECURITIES DEALER, MEMBER NASD/SIPC
400 ROBERT STREET NORTH
ST. PAUL, MN 55101-2098
1-888-AFS-1838
(1-888-237-1838)
<PAGE>
ASCEND FINANCIAL SERVICES, INC. BULK RATE
400 ROBERT STREET NORTH U.S. POSTAGE PAID
ST. PAUL, MN 55101-2098 ST. PAUL, MN
PERMIT NO. 3547
ADDRESS SERVICE REQUESTED
F.52035 Rev 3-1998
