BREMER INVESTMENT FUNDS INC, 485APOS, 1999-11-29

BREMER INVESTMENT FUNDS INC
485APOS, 1999-11-29

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<PAGE> 1

As filed with the Securities and Exchange Commission on November 29, 1999.

1933 Act Registration No. 333-15969
1940 Act Registration No. 811-7919
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM N-1A

<TABLE>
<S> <C>
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. __ [ ]
Post-Effective Amendment No. 6 [X]
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 6
</TABLE>

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BREMER INVESTMENT FUNDS, INC.
(Exact Name of Registrant as Specified in Charter)

P.O. Box 1956
St. Cloud, Minnesota 56302
(Address of Principal Executive Offices)(Zip Code)

Registrant's Telephone Number, Including Area Code: (320) 255-7174

Steven A. Laraway
P.O. Box 1956
St. Cloud, Minnesota 56302
(Name and Address of Agent for Service)
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Christopher C. Cleveland, Esq.
Briggs and Morgan, P.A.
2400 IDS Center
Minneapolis, Minnesota 55402
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Approximate Date of Proposed Public Offering:

It is proposed that this filing will become effective (check appropriate box)

[ ] immediately upon filing pursuant to paragraph (b)

[ ] on (date) pursuant to paragraph (b)

[X] 60 days after filing pursuant to paragraph (a)(1)

[ ] on (date) pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a)(2) of Rule 485.

If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
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<PAGE> 2

PROSPECTUS

JANUARY, 2000

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BREMER INVESTMENT FUNDS, INC.
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BREMER GROWTH STOCK FUND

BREMER BOND FUND

Bremer Investment Funds, Inc. (Bremer Funds) is an open-end, diversified
investment company which offers shares in mutual funds. This prospectus provides
information about two of the mutual funds, the Bremer Growth Stock Fund and the
Bremer Bond Fund, which have different investment portfolios and objectives.

SHARES OF THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, NOR ARE THEY INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY. AN INVESTMENT IN THE
FUNDS INVOLVES INVESTMENT RISK, INCLUDING POSSIBLE LOSS OF PRINCIPAL, DUE TO
FLUCTUATION IN EACH FUND'S NET ASSET VALUE.

This Prospectus, which you should retain for future reference, is designed
to set forth concisely the information you should know before you invest. A
Statement of Additional Information dated January, 2000, and incorporated herein
by reference, has been filed with the Securities and Exchange Commission. A copy
of the Statement may be obtained, without charge, by writing to or calling the
Funds.

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

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE> 3

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Risk/Return Summary......................................... 1
Fund Expenses............................................... 4
Financial Highlights........................................ 6
Investment Objectives and Policies.......................... 7
Securities and Techniques Used by the Funds................. 8
Risk Factors................................................ 11
Investment Restrictions..................................... 13
Management of the Funds..................................... 14
Plan of Distribution........................................ 15
Fund Shares and Organization................................ 16
Price of Shares............................................. 16
Purchasing Shares........................................... 17
Redeeming Shares............................................ 18
Dividends, Distributions and Tax Consequences............... 19
Performance Information..................................... 21
Shareholder Services........................................ 22
</TABLE>

<PAGE> 4

RISK/RETURN SUMMARY

INVESTMENT OBJECTIVES

- The Growth Stock Fund seeks long-term appreciation of capital by
investing primarily in a portfolio of equity securities of established
companies with above average prospects for growth or ones incurring
significant fundamental changes. Dividend income, if any, is a secondary
consideration.

- The Bond Fund seeks to maximize total return, consistent with the
preservation of capital and prudent investment management, through
investment in an actively managed portfolio of bonds and other
fixed-rate debt obligations with maturities of at least one year.

INVESTMENT STRATEGIES

- The Growth Stock Fund invests substantially all of its total assets in
common stocks, convertible securities, and other equity securities of
companies which typically have an equity market capitalization of at
least $1.0 billion. Stocks are chosen primarily on the basis of
traditional research techniques, including the assessment of corporate
growth prospects, as well as risk and volatility characteristics.
Investments may include common stocks, preferred stocks, warrants and
put or call options on stocks.

- The Bond Fund invests in obligations issued or guaranteed by the U.S.
Government or its agencies; obligations issued or guaranteed by foreign
governments and obligations of domestic or foreign corporations (rated
Baa or better by Moody's, BBB or better by S&P, or unrated if determined
by the investment adviser to be of comparable quality); and
mortgage-backed and other asset-backed securities. Under normal market
conditions, at least 65% of the Bond Fund's total assets will be
invested in bonds.

PRINCIPAL INVESTMENT RISKS

- General Investment Risk. Loss of money is a risk of investing in the
Funds. This could occur if the value of the securities making up a
Fund's investment portfolio were to decrease. An investment in the Funds
is not a deposit of a bank and is not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other government agency.

- Fund Management. The Funds are actively managed by the Investment
Adviser. Fund performance depends on the ability of the Investment
Adviser to select and maintain a portfolio of securities which will
achieve each Fund's investment objectives. The Funds could under-perform
compared with other funds having similar investment objectives.

AN INVESTOR IN THE GROWTH STOCK FUND SHOULD ALSO CONSIDER THE FOLLOWING:

- Equity Securities. The market prices of equity securities, which include
common and preferred stocks and convertible securities, are generally
subject to greater volatility than prices of fixed income securities,

1
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such as bonds and other debt obligations. The Growth Stock Fund is subject to
the general risk of adverse market conditions for equity securities.

AN INVESTOR IN THE BOND FUND SHOULD ALSO CONSIDER THE FOLLOWING:

- Credit Risk. The Bond Fund invests in debt securities and is subject to
credit risk, which is the risk that the issuer of a debt security will
fail to make payments when due.

- Interest Rate Risk. The Bond Fund invests in fixed-rate debt securities
and is subject to interest rate risk, which is the risk that the value
of a fixed-rate debt security will decline due to changes in market
interest rates. In general, when interest rates rise, the value of a
fixed-rate debt security declines. When interest rates decline, the
value of a fixed-rate debt security generally increases.

- Call Risk. Corporate bonds and some securities issued by United States
agencies may be subject to redemption ("called") at the option of the
issuer at a specified price prior to their stated maturity date. If a
bond held by the Bond Fund is called during a period of declining
interest rates, the Bond Fund will likely invest the proceeds received
by it at a lower interest rate than that of the called bond, causing a
decrease in the Bond Fund's income.

- Mortgage-Backed. Mortgage-backed securities are securities representing
interests in "pools" of mortgage loans secured by residential or
commercial real property in which payments of both interest and
principal on the securities are generally made monthly, in effect
"passing through" monthly payments of the individual borrowers on the
mortgage loans which underlie the securities. Early repayment of
principal on some mortgage-backed securities may expose the Bond Fund to
a lower rate of return upon reinvestment of principal.

RISK AND RETURN BAR CHARTS AND TABLES

The bar charts and tables presented below give an indication of the risks
of investing in the Funds by showing changes in each Fund's performance on an
annual basis since its inception, and by showing how each Fund's average annual
returns compare to a market index. How a Fund has performed in the past is not
necessarily an indication of how the Fund will perform in the future.

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<PAGE> 6

GROWTH STOCK FUND

The performance of the Growth Stock Fund is compared to the S&P 500, a
broad-based market index. During the periods shown in the bar chart, the highest
return for a quarter was % (quarter ended , 199 ), and the
lowest return for a quarter was % (quarter ended , 199 ).

[INSERT CHART AND TABLE FOR GROWTH STOCK FUND.]

BOND FUND

The performance of the Bond Fund is compared to the [IDENTIFY AND DESCRIBE
INDEX]. During the periods shown in the bar chart, the highest return for a
quarter was % (quarter ended , 199 ), and the lowest return for
a quarter was % (quarter ended , 199 ).

[INSERT CHART AND TABLE FOR BOND FUND.]

3
<PAGE> 7

FUND EXPENSES

This table describes the fees and expenses you might pay if you buy and
hold shares of the Funds.

<TABLE>
<CAPTION>
GROWTH
STOCK BOND
FUND FUND
------ ----
<S> <C> <C>
SHAREHOLDER FEES (fees paid directly from your investment)
Maximum sales charge (load) on purchases (as a percentage
of offering price)..................................... None None
Maximum deferred sales charge (load)...................... None None
Maximum sales charge (load) imposed on reinvested
dividends.............................................. None None
Redemption fee............................................ None(1) None(1)
Exchange fee.............................................. None None
ANNUAL FUND OPERATING EXPENSES (as a percentage of average
net assets)
Management fees........................................... 0.70% 0.70%
Distribution (12b-1) fees................................. 0.01%(2) 0.01%(2)
Other expenses............................................ 0.18% 0.19%
---- ----
Total annual fund operating expenses...................... 0.89% 0.90%
==== ====
</TABLE>

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(1) A fee of $12 is charged for each wire redemption. See "Redeeming Shares."

(2) The Funds have adopted a written plan of distribution under Rule 12b-1. The
Board of Directors has authorized the payment of fees under the plan
pursuant to a Distribution Agreement with the Funds' principal underwriter,
commencing December 31, 1998. The distribution fees disclosed in the table
are an estimate of the amount that would have been paid, had the fees been
in effect for the fiscal year ended September 30, 1999. The distribution
fees paid by a Fund may not exceed an annual rate of 0.25% of the Fund's
average daily net assets. If the maximum distribution fees were paid by the
Funds, the total estimated operating expenses for the Growth Stock Fund and
the Bond Fund (as a percentage of average net assets) would be 1.16% and
1.14%, respectively. If additional distribution fees are paid in the future,
long-term shareholders may pay more than the economic equivalent of the
maximum front end sales charge permitted by the National Association of
Securities Dealers, Inc. See "Plan of Distribution."

4
<PAGE> 8

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.

This example assumes that you invest $10,000 in a Fund 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 the
Fund's operating expenses remain the same. Although your actual costs may be
higher or lower based on these assumptions your costs would be:

<TABLE>
<CAPTION>
FUND 1 YEAR 3 YEAR 5 YEAR 10 YEAR
- ---- ------ ------ ------ -------
<S> <C> <C> <C> <C>
Growth Stock Fund.................... $ $ $ $
Bond Fund............................ $ $ $ $
</TABLE>

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

THIS EXAMPLE IS BASED ON THE ESTIMATED ANNUAL OPERATING EXPENSES SHOWN
ABOVE AND SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES,
WHICH MAY BE MORE OR LESS THAN THOSE SHOWN. This example does not reflect sales
charges (loads) on reinvested dividend. If these sales charges (loads) were
included, your costs would be higher. Federal securities regulations require the
example to assume an annual rate of return of 5%, but the actual return for each
Fund may be more or less than 5%.

5
<PAGE> 9

FINANCIAL HIGHLIGHTS

The following table of selected financial information has been audited by
Arthur Andersen LLP, independent public accountants, whose report appears in the
Funds' Annual Report for the year ended September 30, 1999. The following
information should be read in conjunction with the financial statements and
related notes included in the Annual Report, a copy of which may be obtained,
without charge, by writing or calling the Funds.

<TABLE>
<CAPTION>
GROWTH STOCK FUND BOND FUND
--------------------------------------------- ---------------------------------------------
JANUARY 27, JANUARY 27,
1997(1) 1997(1)
YEAR ENDED YEAR ENDED THROUGH YEAR ENDED YEAR ENDED THROUGH
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
1999 1998 1997 1999 1998 1997
------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF
PERIOD...................... $ 12.28 $ 11.90 $ 10.00 $ 10.47 $ 10.18 $ 10.00
----------- ----------- ----------- ----------- ----------- -----------
INCOME (LOSS) FROM INVESTMENT
OPERATIONS:
Net investment income....... 0.02 0.04 0.03 0.55 0.56 0.35
Net realized and unrealized
gain (loss) on
investments............... 3.54 0.39 1.87 (0.57) 0.29 0.17
----------- ----------- ----------- ----------- ----------- -----------
Total from investment
operations.............. 3.56 0.43 1.90 (0.02) 0.85 0.52
----------- ----------- ----------- ----------- ----------- -----------
LESS DIVIDENDS AND
DISTRIBUTIONS:
Dividends from net investment
income...................... (0.04) (0.03) -- (0.55) (0.56) (0.34)
Distributions from net
realized gains.............. (0.07) (0.02) -- (0.04) -- --
----------- ----------- ----------- ----------- ----------- -----------
Total dividends and
distributions........... (0.11) (0.05) -- (0.59) (0.56) (0.34)
----------- ----------- ----------- ----------- ----------- -----------
NET ASSET VALUE, END OF
PERIOD...................... $ 15.73 $ 12.28 $ 11.90 $ 9.86 $ 10.47 $ 10.18
=========== =========== =========== =========== =========== ===========
TOTAL RETURN.................... 28.97% 3.61% 19.00%(2) (0.22%) 8.59% 5.33%(2)
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of period..... $67,316,277 $54,174,557 $51,103,642 $91,988,144 $82,756,014 $73,683,643
Ratio of net expenses to
average net assets.......... 0.89% 0.91% 1.05%(3) 0.90% 0.89% 1.01%(3)
Ratio of net investment income
to average net assets....... 0.09% 0.27% 0.62%(3) 5.44% 5.46% 5.60%(3)
Portfolio turnover rate....... 16.74% 13.15% 11.30% 58.62% 66.66% 38.35%
</TABLE>

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(1) Commencement of operations.
(2) Not annualized.
(3) Annualized.

6
<PAGE> 10

INVESTMENT OBJECTIVES AND POLICIES

The investment objectives and policies of the Funds are described below.
There can be no assurance that any of these objectives will be achieved. The
investment objectives of the Funds are not fundamental and may be changed
without a vote of the shareholders, which could result in a Fund having
investment objectives different from those which a shareholder considered
appropriate for its investment needs at the time of its investment. A Fund will
provide its shareholders with written notification at least 30 days prior to any
change in the Fund's investment objectives.

If a Fund complies with a percentage limitation on investments at the time
an investment is made, a later increase or decrease in percentage resulting from
changes in asset value will not be deemed to violate the limitation, except in
the case of a limitation on illiquid investments and borrowings. For information
about each Fund's investment limitations, see "Investment Restrictions."

GROWTH STOCK FUND

The Growth Stock Fund seeks long-term appreciation of capital by investing
primarily in a portfolio of equity securities of established companies with
above average prospects for growth or ones incurring significant fundamental
changes. Dividend income, if any, is a secondary consideration.

The Growth Stock Fund invests substantially all, but at least 65%, of its
total assets in common stocks, convertible securities, and other equity
securities of companies which typically have an equity market capitalization of
at least $1.0 billion. Due to the exposure to equities, the Fund's net asset
value may be subject to greater fluctuations than a portfolio containing a
majority of fixed income securities.

The Growth Stock Fund invests primarily in common stocks chosen on the
basis of traditional research techniques, including the assessment of corporate
growth prospects, as well as risk and volatility characteristics. The Growth
Stock Fund may invest in common stocks, preferred stocks, warrants and put or
call options on stocks.

The Growth Stock Fund may also invest in the securities of foreign
companies which are traded on U.S. securities exchanges or on the OTC market in
depository receipt form. Such foreign corporate securities may present greater
risks in the form of nationalization, confiscation, domestic marketability or
other national or international political events.

For information about the securities and techniques used by the Growth
Stock Fund, see "Securities and Techniques Used by the Funds."

BOND FUND

The Bond Fund seeks to maximize total return, consistent with the
preservation of capital and prudent investment management, through investment in
an actively managed portfolio of bonds and other fixed-rate debt obligations
with maturities of at least one year. Bonds are interest-bearing debt securities
that obligate the issuer to pay the holders specific amounts on scheduled
payment dates. The issuer is generally required to repay the
7
<PAGE> 11

principal amount of the obligation at maturity, although a portion of the
principal payments may be made over the life of the bond.

The Bond Fund will invest in obligations issued or guaranteed by the U.S.
Government or its agencies; obligations issued or guaranteed by foreign
governments and obligations of domestic or foreign corporations (rated Baa or
better by Moody's, BBB or better by S&P, or unrated if determined by the
Investment Adviser to be of comparable quality); and mortgage-backed and other
asset-backed securities. Mortgage-backed securities in which the Bond Fund may
invest include mortgage pass-through certificates and multiple class
pass-through certificates, real estate mortgage investment conduit pass-through
certificates and collateralized mortgage obligations.

Under normal market conditions, at least 65% of the Bond Fund's total
assets will be invested in bonds.

The obligations in which the Bond Fund invests will have various maturities
depending upon current and forecasted levels of interest rates and the shape of
the yield curve. The Bond Fund will have a duration between two and five years.
Duration is a measure of the expected life of a fixed income security having
greater precision than the concept of "term to maturity." Duration incorporates
a bond's yield, coupon interest payments, final maturity and call features into
one measure. Duration is one of the fundamental tools used by the Investment
Adviser in portfolio selection for the Bond Fund.

SECURITIES AND TECHNIQUES USED BY THE FUNDS

The following provides a summary of the securities and investment
techniques used by the Funds.

Convertible Securities. The Growth Stock Fund may invest in convertible
securities. Convertible securities are securities which may be exchanged or
converted into a predetermined number of shares of the issuer's underlying
common stock at the option of the holder during a specified time period.
Convertible securities may take the form of convertible preferred stock,
convertible bonds or debentures, units consisting of bonds and warrants, or a
combination of the features of several of these securities. The investment
characteristics of each convertible security varies greatly, which means
convertible securities can be utilized for varying investment objectives. In
choosing convertible securities, the Investment Adviser evaluates the investment
characteristics of the convertible securities as a fixed income instrument and
the investment potential of their underlying equity security for capital
appreciation. Factors considered include the economic and political outlook, the
relative value of various investment alternatives, the issuer's financial
condition, profitability and corporate management. Convertible securities
purchased by the Growth Stock Fund will be rated investment grade or, if
unrated, be of comparable quality in the opinion of the Investment Adviser.
"Investment grade" means securities rated at least Baa by Moody's or BBB by
Standard & Poor's, Fitch or Duff & Phelps.

Restricted and Other Illiquid Securities. The Funds may acquire securities
which are subject to legal, contractual or other restrictions and costs which
reduce the liquidity of the security on resale, and may purchase "illiquid
securities," defined as securities which may not be disposed of in the ordinary
course of business within seven days. Because of time limitations, the Funds
might not be able to dispose of these securities at reasonable

8
<PAGE> 12

prices or at an advantageous time. The Growth Stock Fund and the Bond Fund
intend to limit the purchase of restricted or illiquid securities to not more
than 15% of their net assets.

When-Issued and Delayed Delivery Transactions. The Funds may purchase
securities on a when-issued or delayed delivery basis. These transactions are
arrangements in which the Funds purchase securities with payment and delivery
scheduled for a future time. The seller's failure to complete these transactions
may cause a Fund to miss a price or yield considered to be advantageous.
Settlement dates may be a month or more after entering into these transactions,
and the market values of the securities purchased may vary from the purchase
prices. Accordingly, a Fund may pay more or less than the market value of the
securities on the settlement date.

The Funds may dispose of a commitment prior to settlement if the Investment
Adviser deems it advantageous to do so. In addition, the Funds may enter into
transactions to sell their purchase commitments to third parties at current
market values and simultaneously acquire other commitments to purchase similar
securities at later dates. The Funds may realize short-term profits or losses
upon the sale of such commitments.

Temporary Investments. As a temporary defensive measure, as determined by
the Investment Adviser, a Fund may invest all or a portion of its assets in the
following securities:

- Short-term money market instruments;

- Securities issued and/or guaranteed as to payment of principal and
interest by the U.S. Government, its agencies or instrumentalities;
and

- Repurchase agreements. Repurchase agreements are arrangements in which
banks, broker-dealers and other recognized financial institutions sell
U.S. Government securities or other securities to a Fund and agree at
the time of sale to repurchase them at a mutually agreed upon time and
price. To the extent that the original seller does not repurchase the
securities from the Fund, the Fund could receive less than repurchase
price of any sale of such securities.

Put and Call Options. The Funds may purchase put options as a hedge to
attempt to protect securities which it holds against decreases in value. The
Funds will purchase put options only if they are listed on a recognized options
exchange and the underlying securities are held in its portfolio.

Each Fund may also write call options on securities either held in its
portfolio, or which it has the right to obtain without payment of further
consideration, or for which it has segregated cash in the amount of any
additional consideration. The call options which a Fund writes and sells must be
listed on a recognized options exchange. Writing of calls is intended to
generate income and, thereby, protect against price movements in particular
securities in a Fund's portfolio. Prior to exercise or expiration, an option
position can only be terminated by entering into a closing purchase or sale
transaction. This requires a secondary market on an exchange which may or may
not exist for any particular call or put option at any specific time. The
absence of a liquid market to close options could have an adverse impact on a
Fund's ability to effectively hedge its portfolio.

Lending of Portfolio Securities. In order to generate income, each Fund may
lend up to one-third in net asset value of its portfolio securities on a
short-term or a long-term basis to broker-dealers, banks or other

9
<PAGE> 13

institutional borrowers of securities. The Funds will only enter into loan
arrangements with broker-dealers, banks or other institutions which the
Investment Adviser has determined are creditworthy under guidelines established
by the Board of Directors and will receive collateral in the form of cash or
U.S. Government securities equal to at least 100% of the value of the securities
loaned.

Securities of Other Registered Investment Companies. The Funds may invest
up to 10% of their total assets in shares of other registered investment
companies, principally money market funds. An investment in a registered
investment company involves investment risk. In addition, by investing in other
registered investment companies, the Funds incur the expenses and distribution
costs charged by the other registered investment companies.

Real Estate Investment Trusts. The Growth Stock Fund may invest up to 10%
of its total assets in the securities of real estate investment trusts
("REITs"). REITs are publicly traded corporations or trusts that principally
acquire, hold and manage residential, commercial or industrial real estate. A
REIT is not taxed on income distributed to its shareholders, provided that at
least 95% of its taxable income for each taxable year is distributed to its
shareholders and the REIT is in compliance with all other regulatory
requirements. REITs may be negatively affected by changes in the value and
income generated by the underlying properties or the credit quality of mortgages
which they hold. REITs may have limited diversification and are subject to the
general risks of real estate investments.

Portfolio Turnover. Although the Funds do not intend to invest for the
purpose of seeking short-term profits, securities in their portfolios will be
sold whenever the Investment Adviser believes it is appropriate to do so in
light of each Fund's investment objective, without regard to the length of time
a particular security may have been held. The annual portfolio turnover rate is
estimated to be 50% for the Growth Stock Fund and up to 100% for the Bond Fund.
A Fund would have an annual portfolio turnover rate of 100% if all of its
securities were replaced within one year. High portfolio turnover (generally
over 100%) generally results in greater brokerage commissions and transaction
costs, which are paid directly by the Funds.

Additional Investment Techniques Used by the Bond Fund. The Bond Fund may
buy and sell interest rate futures contracts, futures contracts on securities
and fixed income securities indices and options on such contracts for the
purpose of hedging against changes in the value of securities which the Bond
Fund owns or anticipates purchasing due to anticipated changes in interest
rates. Participation in the options and futures markets involves additional
investment risks and transaction costs. If the Investment Adviser's assumptions
regarding the direction of the securities and interest rate markets are
incorrect, the value of the Bond Fund may be lower than if the hedging strategy
had not been used. There can be no assurance that a liquid market will exist at
a time when the Bond Fund seeks to close out a futures contract or a futures
option position.

For temporary defensive purposes, as determined by the Investment Adviser,
the Bond Fund may invest a substantial portion of its assets in cash or cash
equivalents, such as obligations of banks, commercial paper and short-term
obligations of U.S. or foreign issuers.

10
<PAGE> 14

RISK FACTORS

Although the Funds seek to moderate risk by investing in diversified
portfolios of securities, an investment in the Funds involves certain risks.

General Investment Risk. Loss of money is a risk of investing in the Funds.
This could occur if the value of the securities making up a Fund's investment
portfolio were to decrease. An investment in the Funds is not a deposit of a
bank and is not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other government agency.

Fund Management. The Funds are actively managed by the Investment Adviser.
Fund performance depends on the ability of the Investment Adviser to select and
maintain a portfolio of securities which will achieve each Fund's investment
objectives. The Funds could under-perform compared with other funds having
similar investment objectives.

An investor in the Growth Stock Fund should also consider the following:

Equity Securities. The market prices of equity securities, which include
common and preferred stocks and convertible securities, are generally subject to
greater volatility than prices of fixed income securities, such as bonds and
other debt obligations. The Growth Stock Fund is subject to the general risk of
adverse market conditions for equity securities. Although equity securities in
general have a history of long-term growth in value, their prices may fluctuate
dramatically in the short term due to changes in market conditions, interest
rates and various economic and political factors.

An investor in the Bond Fund should also consider the following:

Credit Risk. The Bond Fund invests in debt securities and is subject to
credit risk, which is the risk that the issuer of a debt security will fail to
make payments when due.

Securities issued or guaranteed by the United States Government generally
are viewed as carrying minimal credit risk. Securities issued by governmental
entities but not backed by the full faith and credit of the United States, and
securities issued by private entities, are subject to higher levels of credit
risk. Shareholders in the Bond Fund bear the risk that payment defaults could
cause the value of the Bond Fund's investment portfolio to decline. The Bond
Fund's permitted investments are intended to limit the amount of credit risk
undertaken by the Bond Fund. The Bond Fund can invest in debt securities rated
as low as BBB by Standard & Poor's or Baa by Moody's, or which have been
assigned as equivalent rating by another nationally recognized statistical
rating organization, or which are of comparable quality in the judgment of the
Investment Adviser. Although these rating categories are investment grade,
obligations with these ratings are viewed as having speculative characteristics
and carry a somewhat higher risk of default than obligations rated in the higher
investment grade categories. If the rating of a debt security or convertible
security is downgraded below BBB/Baa, it is the intention of the Bond Fund to
dispose of the security.

Interest Rate Risk. The Bond Fund invests in fixed-rate debt securities and
is subject to interest rate risk, which is the risk that the value of a
fixed-rate debt security will decline due to changes in market interest rates.
In

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<PAGE> 15

general, when interest rates rise, the value of a fixed-rate debt security
declines. When interest rates decline, the value of a fixed-rate debt security
generally increases. The final maturity of the debt also will affect interest
rate risk and price volatility of the portfolio. Generally, a debt security with
a longer maturity will have greater price volatility as a result of interest
rate changes than a debt security with a shorter maturity. Therefore, Bond Fund
shareholders bear the risk that increases in market interest rates will cause
the value of the investment portfolio to decline. Although the Investment
Adviser may engage in transactions intended to hedge the value of the Bond
Fund's portfolios against changes in market interest rates, there is no
assurance that such hedging transactions will be undertaken or will successfully
protect the value of the portfolio.

Call Risk. The Bond Fund invests in corporate bonds, which are subject to
call risk. Corporate bonds and some securities issued by United States agencies
may be subject to redemption ("called") at the option of the issuer at a
specified price prior to their stated maturity date. It may be advantageous for
an issuer to call its bonds if they can be refinanced through the issuance of
new bonds bearing a lower interest rate than the called bonds. Call risk
increases during periods of declining market interest rates.

If a bond held by the Bond Fund is called during a period of declining
interest rates, the Bond Fund will likely invest the proceeds received by it at
a lower interest rate than that of the called bond, causing a decrease in the
Bond Fund's income.

Mortgage-Backed Securities. Mortgage-backed securities are securities
representing interests in "pools" of mortgage loans secured by residential or
commercial real property in which payments of both interest and principal on the
securities are generally made monthly, in effect "passing through" monthly
payments made by the individual borrowers on the mortgage loans which underlie
the securities (net of any interest rate spread and fees paid to the issuer or
guarantor of the securities). Early repayment of principal on some
mortgage-backed securities (arising from prepayments of principal due to sale of
the underlying property, refinancing, or foreclosure, net of fees and costs
which may be incurred) may expose the Bond Fund to a lower rate of return upon
reinvestment of principal. Also, if a security subject to prepayment has been
purchased at a premium, in the event of prepayment the value of the premium
would be lost. Like other fixed income securities, when interest rates rise, the
value of a mortgage-backed security generally will decline; however, when
interest rates are declining, the value of mortgage-backed securities with
prepayment features may not increase as much as other fixed income securities.

Payment of principal and interest on some mortgage-backed securities (but
not the market value of the securities themselves) may be guaranteed by the full
faith and credit of the U.S. Government (in the case of securities guaranteed by
GNMA); or guaranteed by agencies or instrumentalities of the U.S. Government (in
the case of securities guaranteed by FNMA or the Federal Home Loan Mortgage
Corporation, which are supported only by the discretionary authority of the U.S.
Government to purchase the agency's obligations). Mortgage-backed securities
created by non-governmental issuers (such as commercial banks, savings and loan
institutions, private mortgage insurance companies, mortgage bankers and other
secondary market issuers) may be supported by various forms of insurance or
guarantees, including individual loan, title, pool and hazard insurance and
letters of credit, which may be issued by governmental entities, private
insurers or the mortgage poolers.

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<PAGE> 16

Collateralized Mortgage Obligations (CMOs) are hybrid mortgage-related
instruments. Interest and prepaid principal on a CMO are paid, in most cases,
monthly. CMOs may be collateralized by whole mortgage loans but are more
typically collateralized by portfolios of mortgage-backed securities guaranteed
by GNMA, FHLMC, or FNMA. CMOs are structured into multiple classes with each
class bearing a different stated maturity. Monthly payments of principal,
including prepayments, are first returned to investors holding the shortest
maturity class; investors holding the longer maturity classes receive principal
only after the first class has been retired. CMOs that are issued or guaranteed
by the U.S. Government or by any of its agencies or instrumentalities will be
considered U.S. Government securities by the Funds, while other CMOs, even if
collateralized by U.S. Government securities, will have the same status as other
privately issued securities for purposes of applying the Funds' diversification
tests.

INVESTMENT RESTRICTIONS

The Funds have adopted certain restrictions designed to ensure
diversification of investment and to reduce investment risk. Certain of these
investment restrictions are fundamental policies, and may not be changed without
shareholder approval. A Fund may not:

(i) With respect to 75% of its total assets, invest more than 5% of its
total assets (determined at the time of investment) in securities of
any one issuer (other than U.S. Government securities);

(ii) With respect to 75% of its total assets, purchase more than 10% of the
outstanding voting securities of any one issuer; or

(iii) Invest 25% or more of its total assets (determined at the time of
investment) in one or more issuers having their principal business
activities in a single industry.

Additional information about each Fund's investment restrictions is
contained in the Statement of Additional Information. It is the position of the
Securities and Exchange Commission that open-end investment companies such as
the Funds should not make certain investments if thereafter more than 15% of the
value of their net assets would be so invested. As a matter of operating policy
(though not a fundamental policy), the Funds limit such investments to no more
than 15% of the value of their net assets. The investments in this 15% limit
include (i) those which are restricted (securities which cannot freely be sold
for legal or contractual reasons); (ii) fixed time deposits subject to
withdrawal penalties (other than overnight deposits); and (iii) repurchase
agreements having a maturity of more than seven days. The 15% limitation does
not include obligations which are payable at principal amount plus accrued
interest within seven days after purchase.

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<PAGE> 17

MANAGEMENT OF THE FUNDS

The Board of Directors of Bremer Funds has overall responsibility for
overseeing the management of the Funds. Bremer Funds employs the Investment
Adviser, Bremer Trust, National Association, P.O. Box 1956, St. Cloud, Minnesota
56302, to manage the Funds' investment portfolios and certain other business
affairs under an agreement that compensates the Investment Adviser at the annual
rate of 0.7% of the average daily net assets of the Funds computed daily and
paid monthly.

The Investment Adviser has acted as investment adviser to Bremer Funds
since the inception of the Funds, but has not previously served as investment
adviser to any other registered investment company. As of October 31, 1999, the
Investment Adviser managed accounts with an aggregate value of approximately
$ . The Investment Adviser is a wholly owned subsidiary of Bremer
Financial Corporation, 445 Minnesota Street, Suite 2000, St. Paul, Minnesota
55101-2107, a bank holding company.

Portfolio Managers. The Growth Stock Fund is managed by a team comprised of
David J. Erickson and Sandra A. Schimek. The Bond Fund is managed by a team
comprised of Paul W. Gifford, Jr. and David J. Erickson.

DAVID J. ERICKSON is Vice President/Investments of the Investment Adviser.
Dave conducts research on the economy, financial markets and specific investment
products. In addition, he oversees the management of three internal funds. He is
heavily involved in stock selection. He has two decades of investment management
experience as well as BBA and MBA degrees in finance from the University of
Wisconsin-Madison.

SANDRA A. SCHIMEK, CFA is Senior Vice President/Chief Investment Officer of
the Investment Adviser. Sandra is responsible for overseeing the investment
activities of the Investment Adviser, including fund management, research,
trading and operations. She serves on the Investment Adviser's Executive
Committee. Sandra has over 13 years of investment experience. Prior to joining
the Investment Adviser, she worked at Banc One Investment Advisers in various
positions, including equity and fixed income analyst, portfolio manager and
product manager. Sandra has an MBA degree from Marquette University, a Master of
Music from Yale University and a BA in music from University of
Wisconsin-Milwaukee.

PAUL W. GIFFORD, JR., CFA is Assistant Vice President/Portfolio and Product
Manager of the Investment Adviser. Paul's primary focus is on fixed income
strategies including the management of two internal bond funds. In addition, he
assists in stock selection for funds and accounts. Paul is an investment officer
for the Investment Adviser and serves on its Investment Committee. He has nine
years of investment experience since completing his Business Degree at Mankato
State University.

Firstar Bank Milwaukee, N.A., 615 East Michigan Street, P.O. Box 701,
Milwaukee, Wisconsin 53201-0701 (telephone 1-800-595-5552) acts as Custodian for
the Funds. Firstar Mutual Fund Services, LLC, a wholly owned subsidiary of
Firstar Bank Milwaukee, N.A., serves as transfer agent and dividend disbursing
agent for the Funds. Firstar controls all securities and cash for the Funds,
receives and pays for securities purchased, delivers against payment for
securities sold, receives and collects income from investments, makes all
payments for Fund expenses and performs other administrative services. Firstar
is not affiliated with Bremer Funds or the Investment Adviser.

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<PAGE> 18

PLAN OF DISTRIBUTION

The Funds have adopted a written plan of distribution in accordance with
Rule 12b-1 under the Investment Company Act of 1940. The 12b-1 plan authorizes
the Funds to make payments in connection with the distribution of shares at an
annual rate, as determined from time to time by the Board of Directors, of up to
0.25% of a Fund's average daily net assets. Payments made pursuant to the 12b-1
plan may only be used to pay distribution expenses actually incurred. Expenses
incurred in one year may be carried forward and paid from amounts available in
future years. The Rule 12b-1 fees may be used to finance any activity which is
primarily intended to result in the sale of shares of a Fund, including, but not
limited to, advertising, compensation for sales and marketing activities of
financial institutions and others such as dealers and distributors, shareholder
account servicing, the printing and mailing of prospectuses and the printing and
mailing of sales literature. The 12b-1 plan permits the Funds to employ a
distributor of shares, in which case payments under the 12b-1 plan will be made
to the distributor and may be spent by the distributor on any activities or
expenses primarily intended to result in the sale of the Funds' shares,
including but not limited to, compensation to, and expenses of, employees of the
distributor who engage in or support distribution of our shares, printing of
prospectuses and reports, advertising and preparation and distribution of sales
literature. Overhead and salaries will be allocated based on the percentage of
time devoted to distribution activities. The Funds' Board of Directors has
authorized the payment of fees under the 12b-1 plan to the Funds' principal
underwriter. See "Fund Expenses."

The Funds will pay all Fund expenses not assumed by the Investment Adviser,
including, but not limited to, the costs of preparing and printing registration
statements required under the Securities Act of 1933 and the Investment Company
Act of 1940, the expenses of qualifying shares for sale in various states, the
printing and distribution costs of prospectuses provided to existing
shareholders, the cost of director and officer liability insurance, reports to
shareholders, reports to government authorities and proxy statements, interest
charges, brokerage commissions, and expenses incurred in connection with
portfolio transactions. The Funds will also pay fees of directors who are not
employees or interested persons of the Funds, auditing and accounting services,
fees and expenses of any custodian or trustee having custody of the Funds'
assets, expenses of calculating the net asset value and repurchasing and
redeeming shares, and charges and expenses of dividend disbursing agents,
registrars, and share transfer agents, including the cost of keeping all
necessary shareholder records and accounts.

The Funds have entered into an administration agreement with Firstar Mutual
Fund Services, LLC, 615 East Michigan Street, Milwaukee, Wisconsin 53202. Under
the administration agreement, the administrator maintains the books, accounts
and other documents required by the Investment Company Act of 1940, responds to
shareholder inquiries, prepares our financial statements and tax returns,
prepares certain reports and filings with the Securities and Exchange Commission
and with state regulatory authorities, furnishes statistical and research data,
clerical, accounting and bookkeeping services, keeps and maintains the Funds'
financial and accounting records and generally assists in all aspects of the
Funds' operations. The administrator, at its own expense and without
reimbursement from the Funds, furnishes office space and all necessary office
facilities, equipment and executive personnel for performing the services
required to be performed by it under the administration agreement. For its
services during the Funds' fiscal year ending September 30, 2000, the Funds will
pay the Administrator a fee, paid monthly at an annual rate of 0.06% of the
first $200,000,000 of each Fund's

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<PAGE> 19

average net assets, 0.05% of the next $500,000,000 of each Fund's average net
assets, and 0.03% of each Fund's net assets in excess of $700,000,000. The
Administrator's minimum annual fee, regardless of net asset value, is $60,000.

Firstar Mutual Fund Services, LLC also provides transfer agency and
accounting services for the Funds and Firstar Bank Milwaukee, N.A. provides
custodial services for the Funds. Information about the fees paid for these
services by the Funds is provided in the Statement of Additional Information.

FUND SHARES AND ORGANIZATION

Bremer Funds is an open-end, diversified investment company which offers
shares in mutual funds. It was incorporated under the laws of Maryland on August
26, 1996 and is registered under the Investment Company Act of 1940 as an
open-end management company. The Articles of Incorporation authorize the Board
of Directors to issue up to 500 million shares of Common Stock, $.0001 par value
per share. Of these shares, 100 million have been authorized for each of the
Growth Stock Fund and the Bond Fund. Fund shares are fully paid and
non-assessable when issued; have no preference as to conversion, exchange,
dividends, redemption or other features; and have no preemptive rights. The
shares have no cumulative voting rights, meaning that the holders of more than
50% of the shares voting for the election of directors can elect 100% of the
directors. Shares may be issued as either full or fractional shares. Fractional
shares have, pro rata, the same rights and privileges as full shares.

Each share of a Fund has one vote. On certain matters, such as the election
of directors, all shares of all of the Funds vote together as one series. On
matters affecting only a particular Fund or class, the shares of that Fund or
class will vote as a separate series. An example of such a matter would be a
proposal to alter a fundamental investment restriction pertaining to a Fund.

Under the laws of the State of Maryland and BIFI's Articles of
Incorporation, BIFI is not required to hold shareholder meetings unless they are
required by the Investment Company Act of 1940 or are requested in writing by
the holders of 25% or more of the outstanding shares of BIFI.

As of December 31, 1999, no person owned a controlling interest in either
of the Funds.

PRICE OF SHARES

Shares of the Funds are sold and redeemed at net asset value. The net asset
value per share for purchase and redemption orders is determined once daily, as
of the close of regular trading hours (currently 3:00 p.m., Central time) of the
New York Stock Exchange on each day the Exchange is open for trading. Net asset
value per share of a Fund is calculated by dividing the total market value of
the Fund's investments and other assets, less any liabilities, by the total
outstanding shares of the Fund.

For the purpose of determining the aggregate net assets of the Funds, cash
and receivables will be valued at their face amounts. Interest will be recorded
as accrued and dividends will be recorded on the ex-dividend date.

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<PAGE> 20

Investments in equity securities which are traded on a national securities
exchange or reported on the Nasdaq National Market are stated at the last quoted
sales price if readily available for such equity securities on each business
day; other equity securities traded in the over-the-counter market and listed
equity securities for which no sale was reported on that date are stated at the
last quoted bid price. Debt obligations exceeding 60 days to maturity which are
actively traded are valued by an independent pricing service at the most
recently quoted bid price. Debt obligations with 60 days or less remaining until
maturity may be valued at their amortized cost, which approximates market value.
Options purchased or written by the Funds are valued at the average of the
current bid and asked prices. For securities where quotations are not readily
available, or where the last quoted sale price is not considered representative
of the value of that security if it were to be sold on that day, the security
will be valued at fair value as determined in good faith by the Investment
Adviser.

PURCHASING SHARES

BY MAIL: Subscription for shares should be addressed to the Bremer Growth
Stock Fund or the Bremer Bond Fund, c/o Firstar Mutual Fund Services, LLC,
Mutual Fund Services, P.O. Box 701, Milwaukee, Wisconsin 53201-0701. Express or
registered mail should be sent to the Bremer Growth Stock Fund or the Bremer
Bond Fund, c/o Firstar Mutual Fund Services, LLC, Third Floor, 615 East Michigan
Street, Milwaukee, Wisconsin 53202. The U.S. Postal Service or independent
delivery services are not agents of the Funds, and deposit in the mail or with a
delivery service or receipt at Firstar's post office box of purchase
applications does not constitute receipt by Firstar or a Fund.

BY WIRE: Before wiring funds, an investor should call Firstar Mutual Fund
Services, LLC at 1-800-595-5552 to advise that funds are being wired. To
purchase by wire transfer, federal funds should be transmitted to Firstar Bank
Milwaukee, N.A., ABA #0750-00022/ For Credit to: Firstar Mutual Fund Services,
LLC, Account #112-952-137/For Further Credit: Bremer Growth Stock Fund or Bremer
Bond fund [shareholder account number], [name of account]. An Account
Application Form must be on file with Firstar Mutual Fund Services, LLC before
purchasing shares by wire. Neither the Fund nor its agents are responsible for
the consequences of delays resulting from the bank or Federal Reserve wire
system.

The price per share will be the net asset value next computed after the
time the application and funds are received in proper order by the Transfer
Agent. The determination of net asset value for a particular day is applicable
to all applications for the purchase of shares received at or before the close
of trading on the Exchange. Accordingly, purchase orders received on a day the
Exchange is open for trading, prior to the close of trading on that day, will be
valued as of the close of trading on that day. Applications for purchase of
shares after the close of trading on the Exchange will be based upon the net
asset value as determined as of the close of trading on the next day the
Exchange is open.

An initial purchase must be at least $2,000 ($500 for IRA purchases) and
each subsequent purchase must be at least $100, although the Funds reserve the
right to waive or change these minimums at its discretion. All applications to
purchase capital stock are subject to acceptance or rejection by authorized
officers of the Funds and are not binding until accepted. Applications will not
be accepted unless accompanied by payment in U.S.

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<PAGE> 21

funds. Payment should be made by check or wire transfer drawn on a U.S. bank,
savings and loan, or credit union. The Funds will not accept payment in cash or
third party checks for the purchase of shares. The Transfer Agent will charge a
$25 fee against an investor's account for any check that does not clear.
Additionally, the investor may be responsible for certain expenses incurred by a
Fund if a purchase is cancelled due to non-payment.

REDEEMING SHARES

Shareholders may redeem for cash all or a portion of their shares by
instructing the Transfer Agent at its office in Milwaukee, Wisconsin. Shares
will be redeemed at the net asset value next computed after the receipt of a
redemption request in good order. The determination of net asset value for a
particular day is applicable to all requests for the redemption of shares
received at or before the close of trading on the Exchange on that day (usually
3:00 p.m. Central time). Requests received for redemption on a day the Exchange
is open for trading, prior to the close of trading on that day, will be valued
as of the close of trading on that day. Requests for redemption of shares
received after the close of trading on the Exchange will be based upon the net
asset value as determined as of the close of trading on the next day the
Exchange is open. A redemption request must be in "good order" before the
proceeds can be released. This means the following will be required:

(i) A letter of instruction specifying the account number, number of shares
or dollar amount to be redeemed, signed by all owners of the shares
exactly as their names appear in the Fund's shareholder records. If
certificates have been issued representing shares to be redeemed, they
must accompany the letter and must be endorsed on the back with the
signature of the person whose name appears on the certificate.

(ii) A guarantee of the signature of each owner by an eligible signature
guarantor such as a U.S. commercial bank, trust company, or member of
the New York Stock Exchange for redemption requests greater than
$10,000, if the address of record has been changed within the 15 days
preceding any liquidation, or if the proceeds of any redemption are
requested to be made payable to or sent to other than the address of
record.

(iii) In the case of estates, trusts, guardianships, custodianships,
corporations and pension and profit-sharing plans, other supporting
legal documents may be required.

If any portion of the shares to be redeemed represents an investment made
by check, the Fund will delay the payment of the redemption proceeds until the
transfer agent is reasonably satisfied that the check has been collected, which
may take up to twelve days from the purchase date.

Payment for shares redeemed will be mailed generally within two business
days, but no later than the seventh business day after receipt by the Transfer
Agent of the redemption request in good order, or within such shorter period as
may legally be required. If payment of liquidation proceeds is to be made by
federal wire transfer, a $12 wire fee will be applied.

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<PAGE> 22

No redemption request will become effective until all documents have been
received in proper form by Firstar Mutual Fund Services, LLC. The shareholder
should contact Firstar for further information concerning documentation required
for a redemption of Fund shares. The U.S. Postal Service or independent delivery
services are not agents of the Funds, and deposit in the mail or with a delivery
service or receipt at Firstar's post office box of redemption requests does not
constitute receipt by Firstar or a Fund.

Shareholders who have an IRA or other retirement plan must indicate on
their redemption request whether or not to withhold federal income tax.
Redemption requests failing to indicate an election not to have tax withheld
will be subject to withholding.

A redemption order may not be canceled or revoked by the shareholder once
it has been received and accepted by the Fund. Since the redemption price is the
net asset value per share determined at the same time and in the same manner as
for a purchase order received at that time, it reflects the market value of the
Fund's investments at the time of redemption. This value may be more or less
than the price originally paid for the shares, and the investor may realize a
gain or loss on redemption.

To redeem shares by telephone, an investor must check the appropriate box
on the account application. Proceeds redeemed by telephone will be mailed, sent
by electronic funds transfer or wired only to an investor's address or bank of
record as shown on the records of the Transfer Agent. In the case of redemption
proceeds that are sent by wire transfer, the investor will be charged a $12
wiring fee. In order to arrange for telephone redemptions after an account has
been opened or to change the bank, account, or address designated to receive
redemption proceeds, a written request must be sent to the Transfer Agent. The
request must be signed by each shareholder of the account with the signatures
guaranteed. Further documentation may be requested from corporations, executors,
administrators, trustees and guardians.

Neither the Funds nor the Transfer Agent will be responsible for the
authenticity of redemption instructions received by telephone. The Transfer
Agent has adopted certain procedures to safeguard against unauthorized telephone
instructions including recording all telephone transactions and sending written
confirmation of such transactions. The Funds reserve the right to refuse a
telephone redemption if they believe it is advisable to do so. Procedures for
redeeming shares by telephone may be modified or terminated by the Funds at any
time. During periods of substantial economic or market change, telephone
redemptions may be difficult to implement. If an investor is unable to contact
the Transfer Agent by telephone, shares may also be redeemed by delivering the
redemption request to the Transfer Agent in person or by mail as described
above.

DIVIDENDS, DISTRIBUTIONS AND TAX CONSEQUENCES

The Funds intend to comply with the special provisions of Subchapter M of
the Internal Revenue Code that relieve them from federal income tax on net
investment income and capital gains currently distributed to shareholders. The
Internal Revenue Code requires all regulated investment companies to pay a
nondeductible 4% excise tax if at least 98% of ordinary income and 98% of
capital gains are not paid out to shareholders during the year in which they are
earned or realized. The Funds intend to distribute income and capital gains in
such a manner as to avoid the imposition of this excise tax. The Bond Fund will
distribute all of its net investment
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<PAGE> 23

income to shareholders in the form of dividends declared daily and paid monthly.
The Growth Stock Fund will distribute all of its net investment income to
shareholders in the form of an annual dividend, declared on the second to last
business day of each calendar year. If net capital gains are realized, the Fund
will distribute them near year-end in the year in which such gains are realized.

Investors in a Fund may elect to have all income, dividends and capital
gains distributions reinvested in shares of the Fund or paid in cash, or to have
capital gains distributions reinvested and income and dividends paid in cash.
Further information about dividend reinvestment is contained in the New Account
Application form accompanying this Prospectus. If an election is not specified,
all dividends and capital gains distributions will automatically be reinvested
in full and factional shares of the Fund, calculated to the nearest 1,000th of a
share.
Shares are purchased at the net asset value in effect on the business day after
the dividend record date and are credited to the investor's account on the
dividend payment date. Cash dividends are also paid on the dividend payment
date. Investors will be informed of the number of shares purchased and the price
following each reinvestment. An election to reinvest or receive dividends and
distributions in cash will apply to all shares registered in an investor's name,
including those previously purchased through dividend reinvestment.

An investor may change an election at any time by notifying the Fund in
writing. If such notice is received between a dividend declaration date and the
corresponding payment date, it will become effective on the day following the
payment date. The Funds may modify or terminate the dividend reinvestment
program at any time on 30 days' notice to participants.

Dividends, whether paid in cash or reinvested in additional shares, from
net investment income and net short-term capital gains, if any, will be taxable
to shareholders as ordinary income. Distributions of net capital gain (the
excess of net long-term capital gain over net short-term capital loss) are
taxable to shareholders as long-term capital gain, whether paid in cash or
additional shares, and regardless of the length of time the shares have been
owned by the shareholder. Shareholders are notified annually as to the federal
tax status of dividends and other distributions paid by the Funds. If a
shareholder is not required to pay taxes on income, such shareholder is
generally not required to pay federal income tax on the amounts distributed to
him or her.

Any dividends and capital gain distributions declared in December to
shareholders of record on a date in that month will be deemed to have been paid
by the Funds and received by shareholders on December 31 if the distributions
are paid before February 1 of the following year.

When a shareholder redeems shares of a Fund, the redemption may result in a
taxable gain or loss, depending on whether the redemption proceeds are more or
less than the shareholder's adjusted basis for the shares. In addition, if Fund
shares are purchased within 30 days before or after selling other Fund shares at
a loss, all or a portion of the loss will not be deductible. Capital gain on
redeemed shares held for more than one year will be long-term capital gain, in
which event it will be subject to federal income tax at the rates indicated
above.

Certain Fund shareholders may transfer appreciated assets to a Fund in
exchange for Fund shares (for example, upon the transfer of securities from a
predecessor common or collective fund). Upon a redemption of Fund shares, such
shareholders would realize taxable gain on the appreciation of such assets prior
to the time of the exchange, in addition to any subsequent appreciation of Fund
shares.
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<PAGE> 24

Dividends and distributions are paid on a per share basis. At the time of
such payment, therefore, the value of each share will be reduced by the amount
of the payment. If shares are purchased shortly before the payment of a dividend
or a capital gains distribution, purchasers will pay the full price for the
shares and then receive some portion of the price back as a taxable dividend or
distribution.

A Fund may be required to withhold federal income tax at a rate of 31%
(backup withholding) from dividend payments, distributions, and redemption
proceeds if a shareholder fails to furnish the Fund with a social security or
tax identification number. The shareholder also must certify that the number is
correct and that the shareholder is not subject to backup withholding. The
certification is included as part of the share purchase application form.

Dividends and other distributions declared by a Fund, as well as
redemptions of shares, may also be subject to state and local taxes.

The foregoing is only a general summary of some of the current federal
income tax considerations regarding the Funds. Investors should consult with
their own tax adviser regarding federal, state and local tax consequences of an
investment in the Funds.

PERFORMANCE INFORMATION

Either Fund may, from time to time, advertise information regarding its
performance. A Fund's average annual total rate of return will be expressed in
terms of the average annual compounded rate of return on a hypothetical
investment in the Fund over a specified period, will reflect the deduction of a
proportional share of Fund expenses (on an annual basis) and will assume that
all dividends and capital gains distributions are reinvested when paid. Total
return indicates the positive or negative rate of return that a shareholder
would have earned from reinvested dividends and distributions and changes in net
asset value per share during the period.

Performance information for the Funds may be compared, in reports and
promotional literature to: (i) the Standard & Poor's 500 Stock Index, the Dow
Jones Industrial Average, the Lehman Brothers Intermediate Government Corporate
Bond Index or various other unmanaged indices, and (ii) the performance of other
mutual funds. Unmanaged indices may assume the reinvestment of income
distributions, but generally do not reflect deductions for administrative and
management costs and expenses.

Performance information for a Fund reflects only the performance of
hypothetical investments in the Fund during the particular time periods on which
the calculations are based. Such information should not be considered as
representative of the performance of the Fund in the future. The performance of
a Fund will vary based not only on the current market value of the securities
held in its portfolio, but also on changes in the Fund's expenses and in the
asset size of the Fund. Performance information should be considered in light of
a Fund's investment objectives and policies, the types and quality of the Fund's
portfolio investments, market conditions during the particular time period and
operating expenses.

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SHAREHOLDER SERVICES

Shareholder Reports. Shareholders will receive a confirmation statement
reflecting each purchase and redemption of Fund shares, as well as periodic
statements detailing distributions made by the Funds. In addition, the Funds
will send shareholders semi-annual reports showing its portfolio holdings and
will provide tax information annually.

Systematic Investments. Shareholders may arrange to make regular monthly or
quarterly investments in the Funds through automatic withdrawals from a bank
account. The minimum for each systematic investment in a Fund is $100 and a
shareholder must have a minimum of $2,000 invested in the Fund before making
systematic investments. A shareholder may specify systematic investments on the
initial account application or by submitting a Systematic Investment application
at a later date.

Systematic Withdrawals. Shareholders may arrange to make regular monthly or
quarterly withdrawals of cash (minimum of $250 per withdrawal) from any Fund
that has a minimum balance of $50,000 at the time the systematic withdrawal
election is made. To activate systematic withdrawals, a shareholder must submit
a Systematic Withdrawal application to the Fund. There is no charge for
withdrawals, unless the proceeds are wired to the investor's bank. Withdrawal
payments are derived from liquidation of sufficient shares from a shareholder's
account to make the designated payments. If systematic withdrawals exceed
reinvested dividends and capital gain distributions, a shareholder's original
investment will be reduced and ultimately exhausted. Withdrawals are redemptions
of shares and may cause a shareholder to realize gains or losses for tax
purposes. The withdrawal plan may be terminated at any time by calling or
writing to the Fund.

Telephone Exchange Privilege. Shareholders are generally permitted to
exchange their shares in one Fund for shares of the other Fund without charge or
commission by the Fund, provided that such other shares may be legally sold in
the state of the shareholder's residence. The minimum amount per transfer is
$2,000. Telephone exchange privileges automatically apply to each shareholder of
record and the representative of record unless and until the transfer agent
receives written instructions from the shareholder(s) of record canceling the
privilege.

In order to request an exchange by telephone, an investor must give the
account name, account number and the amount or number of shares to be exchanged.
During periods of significant economic or market change, telephone exchanges may
be difficult to implement. If a shareholder is unable to contact the Fund by
telephone, the shareholder may also deliver the exchange request to the Transfer
Agent in person or by mail at the addresses listed on the back cover of this
Prospectus.

Individual Retirement Accounts. Individuals who receive compensation or
earned income may establish their own tax-sheltered individual retirement
account (IRA), even if they are active participants in a qualified retirement
plan. The Funds offer a prototype IRA plan which may be adopted by individuals.
Earnings on amounts held in an IRA are not taxed until withdrawal. The amount of
deduction, if any, allowed for IRA contributions is limited for individuals who
participate in an employer sponsored retirement plan and whose incomes exceed
specified limits.

22
<PAGE> 26

NEW ACCOUNT INFORMATION:

1-800-595-5552

SHAREHOLDER ACCOUNT INFORMATION:

1-800-595-5552

INVESTMENT ADVISER:

Bremer Trust, National Association
P.O. Box 986
St. Cloud, Minnesota 56302-0986

TRANSFER AGENT:

Firstar Mutual Fund Services, LLC
P.O. Box 701
Milwaukee, Wisconsin 53201-0701
(Regular Mail Address)

Mutual Fund Services
615 East Michigan Street, 3rd Floor
Milwaukee, Wisconsin 53202
(Overnight or Express Mail Address)

CUSTODIAN:

Firstar Bank Milwaukee, N.A.
615 East Michigan Street
Milwaukee, Wisconsin 53201

DISTRIBUTOR:

Rafferty Capital Markets, Inc.

550 Mamaroneck Avenue
Harrison, New York 10528

PUBLIC ACCOUNTANTS:
Arthur Andersen LLP

100 East Wisconsin Avenue

Milwaukee, Wisconsin 53202

LEGAL COUNSEL:

Briggs and Morgan,
Professional Association
2400 IDS Center
80 South Eighth Street
Minneapolis, Minnesota 55402

ADDITIONAL INFORMATION

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

- Additional information is contained in the Statement of Additional
Information (SAI), which provides more details about the Funds and their
investment policies and restrictions.

- You can obtain free copies of the annual report, semi-annual report or
SAI, request other information about the Funds, or make shareholder
inquiries by calling 1-800-595-5552.

- Documents filed with the SEC by the Funds are available on the SEC's
internet site at http:// www.sec.gov, where they are listed under
"Bremer Investment Funds, Inc."

23
<PAGE> 27

- Documents filed with the SEC can also be reviewed and copied at the
SEC's Public Reference Room in Washington, D.C. You can also obtain
copies, after paying a duplicating fee, by electronic request at the
following E-mail address: [email protected], or by writing to the SEC's
Public Reference Section, Washington, DC 20549-6009. Information about
the operation of the Public Reference Room is available by calling the
SEC at 1-800-SEC-0330.

- The Funds' Investment Company Act file number is 811-7919.

24
<PAGE> 28

BREMER INVESTMENT FUNDS, INC.
STATEMENT OF ADDITIONAL INFORMATION

DATED JANUARY , 2000

Bremer Investment Funds, Inc. ("Bremer Funds") is an open-end, diversified
investment company, which includes two mutual funds, the Bremer Growth Stock
Fund and the Bremer Bond Fund, which have different investment portfolios and
objectives (each, a "Fund," and together, the "Funds").

This Statement of Additional Information is not a prospectus, but contains
information in addition to and more detailed than what is contained in the
Prospectus for the Funds. It should be read in conjunction with the Prospectus,
dated January , 2000, which has been filed with the Securities and Exchange
Commission and can be obtained, without charge, by calling 1-800-595-5552 or
writing to Bremer Investment Funds, Inc., c/o Firstar Mutual Fund Services, LLC,
P.O. Box 701, Milwaukee, Wisconsin 53201-0701. This Statement of Additional
Information has been incorporated by reference into the Prospectus.

TABLE OF CONTENTS

<TABLE>
<S> <C>
Investment Objectives and Policies.......................... 2
Investment Limitations...................................... 2
Portfolio Turnover.......................................... 3
Purchasing and Redeeming Shares............................. 3
Officers and Directors...................................... 3
Principal Holders of Securities............................. 5
Investment Adviser.......................................... 6
Transfer Agent and Custodian................................ 6
Portfolio Transactions...................................... 7
Dividends, Distributions and Tax Consequences............... 7
Underwriters................................................ 8
Financial Statements........................................ 9
</TABLE>
<PAGE> 29

INVESTMENT OBJECTIVES AND POLICIES

The investment objectives, policies and limitations of the Funds are
described in the Prospectus under the heading "Investment Objectives and
Policies."

INVESTMENT LIMITATIONS

Each Fund is subject to certain fundamental investment restrictions
described in the Prospectus under the heading "Investment Restrictions." Such
investment restrictions may not be changed without the approval of a majority of
the shareholders of the Fund. The vote of a majority of the shareholders means
the vote, at a meeting of the shareholders, of holders representing (a) 67% or
more of the voting securities present at such meeting, if the holders of more
than 50% of the outstanding voting securities are present or represented by
proxy; or (b) more than 50% of the outstanding voting securities, whichever is
less.

In addition, the Funds have adopted other investment limitations and will
not:

1) Purchase securities on margin, participate in a joint trading account or
sell securities short.

2) Lend money.

3) Purchase or sell real estate or interests in real estate, commodities or
commodity futures. The Growth Stock Fund may invest in the securities of
real estate investment trusts up to 10% of the Growth Stock Fund's total
net assets.

4) Borrow money except temporarily from a bank (5% of lower of cost or
market of total assets) for emergency or extraordinary purposes.

5) Purchase securities of other regulated investment companies, except in
open market transactions limited to not more than 10% of its total
assets, or except as part of merger, consolidation or other acquisition.

6) Invest more than 5% of its total assets in securities of issuers that
have less than three years of continuous operations or in any equity or
fixed income securities of any issuer which are not readily marketable.

7) Invest more than 5% of its total assets in securities of any one issuer
(except cash, cash items, repurchase agreements and U.S. Government
obligations) or acquire more than 10% of any class of voting shares of
any one issuer.

8) Invest 25% or more of the Growth Stock Fund's total assets in companies
of any one industry or group of related industries.

9) Hold more than 10% of the Bond Fund's total net assets in bonds rated
Baa by Moody's or BBB by S&P.

2
<PAGE> 30

PORTFOLIO TURNOVER

The annual portfolio turnover rate is not expected to exceed 50% for the
Growth Stock Fund and 100% for the Bond Fund. No limit, however, has been placed
on the rate of portfolio turnover of the Funds, and securities may be sold
without regard to the time they have been held when, in the opinion of the
Investment Adviser, investment considerations warrant such action. Portfolio
turnover rate is calculated by dividing the lesser of a Fund's annual sales or
purchases of portfolio securities (exclusive of securities with maturities of
one year or less at the time the Fund acquired them) by the monthly average
value of the securities in the Fund's portfolio during the year. For the year
ended September 30, 1999, the portfolio turnover rate was 16.74% for the Growth
Stock Fund and 58.62% for the Bond Fund.

PURCHASING AND REDEEMING SHARES

The purchase and redemption of shares of the Funds are subject to the
procedures described under the headings "Purchasing Shares" and "Redeeming
Shares" in the Prospectus, which is incorporated herein by reference.

OFFICERS AND DIRECTORS

The officers and directors of Bremer Funds and their principal occupations
for the last five years are set forth below. Unless otherwise noted, the address
for each director and officer is Bremer Investment Funds, Inc., P.O. Box 1956,
St. Cloud, Minnesota 56302.

<TABLE>
<CAPTION>
POSITION(S) HELD PRINCIPAL OCCUPATION(S)
NAME AND ADDRESS WITH REGISTRANT DURING PAST FIVE YEARS
---------------- ---------------- -----------------------
<S> <C> <C>
Steven A. Laraway*................... President and President/Chief Executive Officer of Bremer
Director Trust, National Association since February
1992; Vice President of Bank One Ohio Trust
Company from March 1987 to February 1992.

David J. Erickson*................... Vice President Vice President/Investment Officer of Bremer
Trust, National Association since January
1993; Vice President -- Investments of North
Central Trust Company from September 1987 to
January 1993.

Sandra A. Schimek*................... Vice President Senior Vice President/Chief Investment Officer
of Bremer Trust, National Association since
April 1999; Senior Portfolio Manager of Bank
One Investment Advisers from 1992 to April
1999.
</TABLE>

3
<PAGE> 31

<TABLE>
<CAPTION>
POSITION(S) HELD PRINCIPAL OCCUPATION(S)
NAME AND ADDRESS WITH REGISTRANT DURING PAST FIVE YEARS
---------------- ---------------- -----------------------
<S> <C> <C>
Paul W. Gifford, Jr.*................ Secretary Assistant Vice President/Portfolio and Product
Manager of Bremer Trust, National Association.
Mr. Gifford has held various positions with
Bremer Trust since December 1990.

Richard A. DiNello*.................. Treasurer Chief Financial Officer of Bremer Trust,
National Association. Mr. DiNello has held
various positions with Bremer Trust since July
1986.

John M. Bishop....................... Director President of Bishop Communications Corp. for
Lakedale Telephone Company more than the past five years.
Highway 55 East
Annadale, MN 55302

Stanley K. Dardis.................... Director President and Chief Executive Officer of
445 Minnesota St., Bremer Financial Corporation since March 1998,
Suite 2000 Executive Vice President and Chief Operating
St. Paul, MN 55101-2107 Officer of Bremer Financial Corporation from
June 1996 to March 1998, and Executive Vice
President and Retail Banking Services Director
of Bremer Financial Corporation from December
1993 to June 1996.

John J. Feda......................... Director Retired.
607 South First Street
Marshall, MN 56258

Barbara A. Grachek................... Director Associate Vice President for Academic Affairs,
107 Woodhill Road St. Cloud State University since 1997 and Vice
St. Cloud, MN 56301-4498 President for Academic Affairs from 1991 to
1997.
</TABLE>

- -------------------------
* Interested person of the Funds, as defined in the Investment Company Act of
1940.

The following table provides compensation information for Bremer Funds'
directors for the year ended September 30, 1999. Executive officers of Bremer
Funds and directors who are deemed to be interested persons of Bremer Funds, as
defined in the Investment Company Act of 1940, do not receive compensation from
Bremer

4
<PAGE> 32

Funds. Bremer Funds currently pays fees to outside directors of $600 for each
in-person meeting and $300 for each telephonic meeting attended, plus
out-of-pocket expenses for attending directors' meetings.

<TABLE>
<CAPTION>
AGGREGATE COMPENSATION
NAME AND POSITION FROM REGISTRANT
----------------- ----------------------
<S> <C>
John M. Bishop................................ $
Director
Stanley K. Dardis.............................
Director
John J. Feda..................................
Director
Barbara A. Grachek............................
Director
Steven A. Laraway.............................
President and Director
</TABLE>

PRINCIPAL HOLDERS OF SECURITIES

As of December 31, 1999, BIFI's officers and directors, as a group, owned
less than 1% of the outstanding common stock of the Growth Stock Fund and of the
Bond Fund, respectively.

As of December 31, 1999, the following persons owned of record or, to the
knowledge of the Funds, beneficially, 5% or more of the outstanding shares of
the Growth Stock Fund or the Bond Fund.

<TABLE>
<CAPTION>
PERCENTAGE OF PERCENTAGE OF PERCENTAGE OF PERCENTAGE OF
GROWTH STOCK GROWTH STOCK BOND FUND BOND FUND
FUND HELD OF FUND HELD HELD OF HELD
NAME AND ADDRESS RECORD BENEFICIALLY RECORD BENEFICIALLY
---------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
JAS & Co.
c/o First American Trust
4150 2nd St. S.
St. Cloud, MN 56301............................ % -0- % -0-
American Investors
20 1st St. S.W
Minot, ND 58701.............................. % -0- % -0-
</TABLE>

5
<PAGE> 33

INVESTMENT ADVISER

Bremer Trust, National Association (the "Investment Adviser") serves as the
investment adviser of the Funds under the terms of an Investment Advisory
Agreement dated December 17, 1996. The Investment Advisory Agreement must be
approved annually by the Board of Directors of Bremer Funds, including a
majority of those directors who are not parties to such contract or "interested
persons" of any such party as defined in the Investment Company Act of 1940, by
vote cast in person at a meeting called for such purpose. The agreement may be
terminated at any time, without penalty, on 60 days' written notice by Bremer
Funds' Board of Directors, by the holders of a majority of the Funds'
outstanding voting securities or by the Investment Adviser. The agreement
automatically terminates in the event of its assignment (as defined in the
Investment Company Act of 1940 and the rules thereunder).

As compensation for its services to the Funds, the Investment Adviser
receives monthly compensation at the annual rate of 0.7% of the average daily
net assets of the Funds, computed daily and paid monthly. The Investment Adviser
has agreed with the Funds that the expense ratio will not exceed the expense
limitation of any state in which the Funds' shares are sold. The Growth Stock
Fund paid the Investment Adviser total fees of $149,729 for the period from
January 27, 1997 through September 30, 1997, $400,600 for the year ended
September 30, 1998 and $ for the year ended September 30, 1999. The
Bond Fund paid the Investment Adviser total fees of $197,482 for the period from
January 27, 1997 through September 30, 1997, $551,392 for the year ended
September 30, 1998 and $ for the year ended September 30, 1999.

Bremer Funds bears all expenses of its operation, other than those assumed
by the Investment Adviser. Such expenses include payment for distribution,
transfer agent services, accounting services, certain administration services,
legal fees and payment of taxes. The expenses of organizing Bremer Funds and
registering and qualifying its initial shares under federal and state securities
laws will be charged to Bremer Funds' operations as an expense amortized over a
period not to exceed five years.

The Investment Adviser is a wholly owned subsidiary of Bremer Financial
Corporation, a bank holding company. The officers of Bremer Funds also serve as
officers of the Investment Adviser, as described above in "Officers and
Directors."

Bremer Funds has adopted a written plan of distribution in accordance with
Rule 12b-1 under the Investment Company Act of 1940. Bremer Funds paid
$ under the plan during the fiscal year ended September 30, 1999. See
"Plan of Distribution" in the Prospectus.

TRANSFER AGENT AND CUSTODIAN

Firstar Bank Milwaukee, N.A. acts as custodian and Firstar Mutual Fund
Services, LLC, its wholly owned subsidiary, acts as administrator, transfer
agent and dividend disbursing agent. Firstar is reimbursed for all expenditures
incurred in the discharge of these responsibilities. Firstar's address is P.O.
Box 701, Milwaukee, Wisconsin 53201-0701, (telephone 1-800-595-5552).
6
<PAGE> 34

Firstar Bank Milwaukee, N.A. and Bremer Funds are parties to a Custodian
Agreement. Firstar Mutual Fund Services, LLC and Bremer Funds are parties to a
Fund Administration Servicing Agreement, Fund Accounting Servicing Agreement and
Transfer Agent Agreement. Pursuant to such agreements, Firstar controls all
securities and cash for the Funds, receives and pays for securities purchased,
delivers against payment for securities sold, receives and collects income from
investments, makes all payments for Fund expenses and performs other
administrative services, as directed in writing by authorized officers of the
Funds. Certain information regarding the administrative services provided by
Firstar Mutual Fund Services, LLC is contained in the Prospectus under the
heading "Plan of Distribution."

PORTFOLIO TRANSACTIONS

Subject to policies established by Bremer Funds' Board of Directors, the
Investment Adviser is responsible for the Funds' portfolio decisions and the
placing of orders to effect the Funds' portfolio transactions. With respect to
such transactions, the Investment Adviser seeks to obtain the best net results
for the Funds, taking into account such factors as price (including the
applicable brokerage commission or dealer spread), size of order, difficulty of
execution and operational facilities of the firm involved. While the Investment
Adviser generally seeks reasonably competitive commission rates, the Funds will
not necessarily be paying the lowest commission or spread available. Bremer
Funds has no obligation to deal with any broker or dealer in the execution of
its portfolio transactions. There is no affiliation between any broker-dealer or
affiliated persons of any broker-dealer who executes transactions for the Funds
and Bremer Funds' officers and directors or the Investment Adviser.

Investment decisions for each Fund are made independently. When the Funds
are simultaneously engaged in the purchase or sale of the same securities, the
transactions are averaged as to price and allocated as to amount in accordance
with a formula deemed equitable to each Fund. In some cases this system could
adversely affect the price paid or received by a Fund, or the size of the
position obtainable for a Fund.

Decisions with respect to allocations of portfolio brokerage will be made
by the Investment Adviser. Portfolio transactions are normally placed with
broker-dealers which provide the Investment Adviser with research and
statistical assistance. Recognizing the value of these factors, a Fund may pay
brokerage commissions in excess of those which another broker might charge for
effecting the same transaction.

DIVIDENDS, DISTRIBUTIONS AND TAX CONSEQUENCES

The Funds intend to distribute all net investment income, if any, together
with any realized net capital gains in the amount and at the times that will
avoid federal income and excise tax liability. To avoid federal income tax on
income and gains that are distributed, each Fund must qualify for the special
tax treatment afforded to a regulated investment company under the Internal
Revenue Code of 1986, as amended. To qualify for that treatment, a Fund must
distribute to its shareholders for each taxable year at least 98% of its
investment company taxable income (consisting generally of net investment income
and net short-term capital gains) and must meet several additional requirements.
For a Fund, these requirements include the following: (1) the Fund must derive

7
<PAGE> 35

at least 98% of its gross income each taxable year from dividends, interest,
payments with respect to securities loans, and gains from the sale or other
disposition of securities or foreign currencies, or other income (including
gains from options, futures and forward contracts) derived with respect to its
business of investing in securities or currencies; and (2) at the close of each
quarter of the Fund's taxable year, (i) at least 50% of the value of its total
assets must be represented by cash and cash items, U.S. Government securities,
securities of other registered investment companies, and other securities, with
these other securities limited, in respect of any one issuer, to an amount that
does not exceed 5% of the value of the Fund's total assets and that does not
represent more than 10% of the issuer's voting securities, and (ii) not more
than 25% of the value of its total assets may be invested in securities (other
than U.S. Government securities or the securities of other registered investment
companies) of any one issuer or two or more issuers which the Fund controls.

A Fund's use of hedging strategies, such as writing (selling) and
purchasing options and futures and entering into forward contracts, involves
complex rules that will determine for income tax purposes the amount, character,
and timing of recognition of the gains and losses it realizes from such hedging
strategies.

Undistributed net investment income is included in a Fund's net assets for
the purpose of calculating net asset value per share. Therefore, on the
"ex-dividend" date, the net asset value per share excludes the dividend, because
it is reduced by the per share amount of the dividend. Dividends and other
distributions paid shortly after the purchase of shares by an investor, although
in effect a return of capital, are taxable to the investor.

As stated in the Prospectus, unless a shareholder elects otherwise in
writing, all dividends and other distributions are automatically paid in
additional Fund shares at net asset value (as of the business day following the
record date). A shareholder may elect to have all income, dividends and capital
gains distributions paid in cash or to have capital gains distributions
reinvested and income and dividends paid in cash. A shareholder may change an
election at any time by notifying the Fund in writing. If such notice is
received between a dividend declaration date and the corresponding payment date,
it will become effective on the day following the payment date. An account
statement is sent to shareholders whenever an income dividend or other
distribution is paid.

UNDERWRITERS

Rafferty Capital Markets, Inc. (the "Distributor") entered into a
Distribution Agreement with Bremer Funds effective December 31, 1998. The
Distributor is not affiliated with Bremer Funds or the Investment Adviser. The
Distributor offers the Funds' common stock continuously, on a best efforts
basis, by receiving purchase and redemption orders on behalf of the Funds. The
Distributor is not obligated to sell any particular number of shares. For
calendar year 1999, the Distributor received a fee equal to the greater of
$15,000 or .0075% annually of the average daily net assets of the Funds,
computed daily and paid monthly. The Distributor will receive the same fee for
calendar year 2000.

8
<PAGE> 36

FINANCIAL STATEMENTS

The Funds' financial statements, including a listing of portfolio
securities as of September 30, 1999, are included in the Funds' Annual Report to
Shareholders for the fiscal year ended September 30, 1999 and are incorporated
herein by reference. The financial statements have been audited by Arthur
Andersen LLP, independent public accountants, as set forth in their report
appearing in the Annual Report and incorporated herein by reference. Additional
copies of the Annual Report may be obtained, without charge, by writing or
calling the Funds.

9
<PAGE> 37

ITEM 22. FINANCIAL STATEMENTS

(a) Financial Statements

The financial statements identified in the index below, together with the
report of Arthur Andersen LLP dated October 22, 1999, appearing on pages 4 to 20
of the September 30, 1999 Annual Report are incorporated herein by reference to
registrant's Form N-30D, filed November 30, 1999.

<TABLE>
<CAPTION>
PAGE NUMBER IN:
--------------------------
PROSPECTUS ANNUAL REPORT
---------- -------------
<S> <C> <C>
Statement of Assets and Liabilities at September 30, 1999...
Statement of Operations for the year ended September 30,
1999......................................................
Growth Stock Fund Statement of Changes in Net Assets for the
years ended September 30, 1998 and September 30, 1999.....
Bond Fund Statement of Changes in Net Assets for the years
ended September 30, 1998 and September 30, 1999...........
Growth Stock Fund Financial Highlights for the period
January 27, 1997 through September 30, 1997 and the years
ended September 30, 1998 and September 30, 1999........... 6
Bond Fund Financial Highlights for the period January 27,
1997 through September 30, 1997 and the years ended
September 30, 1998 and September 30, 1999................. 6
Growth Stock Fund Schedule of Investments at September 30,
1999......................................................
Bond Fund Schedule of Investments at September 30, 1999.....
Notes to the Financial Statements...........................
Report of Independent Public Accountants....................
</TABLE>

Schedules are omitted because they are not required, are not applicable, or
the required information is shown in the financial statements or notes thereto.

B-1
<PAGE> 38

PART C. OTHER INFORMATION

ITEM 23. EXHIBITS

<TABLE>
<S> <C>
(a) Articles of Incorporation.*
(b) Bylaws.*
(c) Articles of Incorporation, Article IV and Article VII. (See
Exhibit (a)).
(d) Form of Investment Advisory Agreement between Registrant and
First American Trust, National Association dated December
17, 1996.**
(e) Distribution Agreement between Registrant and Rafferty
Capital Markets, Inc. dated November 24, 1998.****
(f) Not applicable.
(g) Custodian Agreement between the Registrant and Firstar Trust
Company dated November 5, 1996.*
(h)(1) Fund Administration Servicing Agreement between the
Registrant and Firstar Trust Company dated November 5,
1996.*
(h)(2) Fund Accounting Servicing Agreement between the Registrant
and Firstar Trust Company dated November 5, 1996.*
(h)(3) Transfer Agent Agreement between the Registrant and Firstar
Trust Company dated November 5, 1996.*
(i) Opinion and consent of Briggs and Morgan, Professional
Association.***
(j) Consent of Arthur Andersen LLP (filed herewith).
(k) None.
(l) Not applicable.
(m) Plan of Distribution.*
(n) Not applicable.
(o) Not applicable.
(p) Code of Ethics (to be filed by amendment).
</TABLE>

- -------------------------
* Incorporated by reference to registrant's Registration Statement on Form
N-1A, 1933 Act Reg. No. 333-15969, filed November 12, 1996.

** Incorporated by reference to registrant's Registration Statement on Form
N-1A, 1933 Act Reg. No. 333-15969, Pre-Effective Amendment No. 1, filed
December 19, 1996.

*** Incorporated by reference to registrant's Registration Statement on Form
N-1A, 1933 Act Reg. No. 333-15969, Post-Effective Amendment No. 2, filed
January 23, 1997.

C-1
<PAGE> 39

**** Incorporated by reference to registrant's Registration Statement on Form
N-1A, 1933 Act Reg. No. 333-15969, Post-Effective Amendment No. 3, filed
November 30, 1998.

ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT

Not applicable.

ITEM 25. INDEMNIFICATION

The Registrant's Articles of Incorporation state that each present or
former director, officer, agent and employee of the Registrant or any
predecessor or constituent corporation, and each person, who, at the request of
the Registrant, serves or has served another business enterprise in any such
capacity, and the heirs and personal representatives of each of the foregoing
shall be indemnified by the Registrant to the fullest extent permitted by
Maryland law against all expenses, including without limitation amounts of
judgments, fines, amounts paid in settlement, attorneys' and accountants' fees,
and costs of litigation, which shall necessarily or reasonably be incurred by
him or her in connection with any action, suit or proceeding to which he or she
was, is or shall be a party, or with which he or she may be threatened, by
reason of his or her being or having been a director, officer, agent or employee
of the Registrant or such predecessor or constituent corporation or such
business enterprise, whether or not he or she continues to be such at the time
of incurring such expenses. Such indemnification may include without limitation
the purchase of insurance and advancement of any expenses, and the Registrant
shall be empowered to enter into agreements to limit the liability of directors
and officers of the Registrant. No indemnification shall be made in violation of
the Maryland General Corporation Law or the Investment Company Act of 1940.

C-2
<PAGE> 40

<TABLE>
<S> <C>
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
Not applicable.
ITEM 27. PRINCIPAL UNDERWRITERS
The Fund's principal underwriter, Rafferty Capital
Markets, Inc., also acts as a distributor for the following
funds, none of which are affiliated with Bremer Funds:
The HomeState Group
Potomac Funds
Badgley Funds, Inc.
Texas Capital Value Funds
Brazos Mutual Funds
The following table provides certain information with
respect to the directors and officers of Rafferty Capital
Markets, Inc. The principal business address of each person
named in the table is 550 Mamaroneck Avenue, Harrison, New
York 10528.
</TABLE>

<TABLE>
<CAPTION>
POSITIONS AND OFFICES POSITIONS AND OFFICES
NAME WITH UNDERWRITER WITH REGISTRANT
---- --------------------- ---------------------
<S> <C> <C>
Lawrence C. Rafferty................. Director and Chief Executive Officer None
Thomas A. Mulrooney.................. Director and President None
Stephen P. Sprague................... Director and Chief Financial Officer None
</TABLE>

C-3
<PAGE> 41

<TABLE>
<S> <C> <C>
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS
Custodian: Firstar Bank Milwaukee, N.A.
615 East Michigan Street
Milwaukee, WI 53202
Transfer Agent: Overnight Deliveries Firstar Mutual Fund Services, LLC
Mutual Fund Services
615 Michigan Street,
3rd Floor
Milwaukee, WI 53202
Transfer Agent: Mailing Address Firstar Mutual Fund Services, LLC
Mutual Fund Services
P.O. Box 701
Milwaukee, WI 53201-0701
Investment Adviser: Bremer Trust,
National Association
P.O. Box 986
St. Cloud, Minnesota 56302
ITEM 29. MANAGEMENT SERVICES
Not applicable.
ITEM 30. UNDERTAKINGS
Not applicable.
</TABLE>

C-4
<PAGE> 42

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940 the Registrant certifies that it meets all of the
requirements for effectiveness of this Registration Statement pursuant to Rule
485(a) under the Securities Act of 1933 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of St. Cloud, and State of Minnesota on the 29th day of
November, 1999.

BREMER INVESTMENT FUNDS, INC.

By: /s/ STEVEN A. LARAWAY

--------------------------------------
Steven A. Laraway
President

Pursuant to the requirements of the Securities act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the dates indicated. Each person whose signature to this
Registration Statement appears below hereby constitutes and appoints Steven A.
Laraway and Richard A. DiNello, and each of them, as his true and lawful
attorney-in-fact and agent, with full power of substitution, to sign on his or
her behalf individually and in the capacity stated below and to perform any acts
necessary to be done in order to file all post-effective amendments to this
Registration Statement.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ STEVEN A. LARAWAY President and Director
- --------------------------------------------- (Principal Executive Officer)
Steven A. Laraway November 29, 1999

/s/ RICHARD A. DINELLO Treasurer
- --------------------------------------------- (Principal Financial and Accounting
Richard A. DiNello Officer) November 29, 1999

* Director
- ---------------------------------------------
John M. Bishop November 29, 1999

* Director
- ---------------------------------------------
Stanley K. Dardis November 29, 1999

* Director
- ---------------------------------------------
John J. Feda November 29, 1999

/s/ BARBARA A. GRACHEK Director
- ---------------------------------------------
Barbara A. Grachek November 29, 1999

*By /s/ STEVEN A. LARAWAY
---------------------------------------
Steven A. Laraway
Attorney-In-Fact
</TABLE>

C-5
<PAGE> 43

EXHIBIT INDEX

<TABLE>
<S> <C>
(a) Articles of Incorporation.*
(b) Bylaws.*
(c) Articles of Incorporation, Article IV and Article VII. (See
Exhibit (a)).
(d) Form of Investment Advisory Agreement between Registrant and
First American Trust, National Association dated December
17, 1996.**
(e) Distribution Agreement between Registrant and Rafferty
Capital Markets, Inc. dated November 24, 1998.****
(f) Not applicable.
(g) Custodian Agreement between the Registrant and Firstar Trust
Company dated November 5, 1996.*
(h)(1) Fund Administration Servicing Agreement between the
Registrant and Firstar Trust Company dated November 5,
1996.*
(h)(2) Fund Accounting Servicing Agreement between the Registrant
and Firstar Trust Company dated November 5, 1996.*
(h)(3) Transfer Agent Agreement between the Registrant and Firstar
Trust Company dated November 5, 1996.*
(i) Opinion and consent of Briggs and Morgan, Professional
Association.***
(j) Consent of Arthur Andersen LLP. (Filed herewith.)
(k) None
(l) Not applicable.
(m) Plan of Distribution.*
(n) Not applicable.
(o) Not applicable.
(p) Code of Ethics (to be filed by amendment).
</TABLE>

- -------------------------
*Included in original filing of the Registration Statement and incorporated
herein by reference.
**Included in Pre-Effective Amendment No. 1 to the Registration Statement and
incorporated herein by reference.

***Included in Post-Effective Amendment No. 2 to the Registration Statement and
incorporated herein by reference.

****Incorporated by reference to registrant's Registration Statement on Form
N-1A, 1933 Act Reg. No. 333-15969, Post-Effective Amendment No. 3, filed
November 30, 1999.

<PAGE> 1

EXHIBIT-J

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our
report, and to all references to our firm, included in or made a part of this
Form N-1A registration statement for Bremer Investment Funds, Inc.

/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP

Milwaukee, Wisconsin,

November 24, 1999.