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Previous: BREMER INVESTMENT FUNDS INC, N-30D, 2000-06-06 |
Next: WARBURG PINCUS GLOBAL HEALTH SCIENCES FUND INC, 497, 2000-06-06 |
SEMI-ANNUAL REPORT
[GRAPHIC OMITTED]
================================================================================
LEGACY MINNESOTA MUNICIPAL
BOND FUND
================================================================================
[GRAPHIC OMITTED]
MARCH 31, 2000
TABLE OF CONTENTS
PAGE
Statement of Assets and Liabilities........................................... 1
Statement of Operations....................................................... 2
Statement of Changes in Net Assets............................................ 3
Financial Highlights.......................................................... 4
Schedule of Investments....................................................... 5
Notes to the Financial Statements.............................................10
------------------------------------------------
NOTICE TO INVESTORS
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.
================================================================================
LEGACY MINNESOTA MUNICIPAL BOND FUND
================================================================================
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
MARCH 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ASSETS:
<S> <C>
Investments, at market value
(Cost of $55,923,149) $54,587,666
Cash 113,723
Interest receivable 787,564
Other assets 407
-------------------------
Total assets 55,489,360
-------------------------
LIABILITIES:
Payable to Investment Adviser 25,794
Dividends payable 214,209
Accrued expenses and other liabilities 27,339
-------------------------
Total liabilities 267,342
-------------------------
NET ASSETS $55,222,018
=========================
NET ASSETS CONSIST OF:
Capital stock $57,238,878
Distributions in excess of book net investment income (325,522)
Accumulated undistributed net realized loss on investments (355,855)
Net unrealized depreciation on investments (1,335,483)
-------------------------
Total Net Assets $55,222,018
=========================
Shares outstanding
(50 million shares authorized, $ .0001 par value) 5,733,949
=========================
Net Asset Value and Redemption Price Price Per Share $9.63
=========================
Maximum Offering Price Per Share $9.90
=========================
</TABLE>
SEE NOTES TO THE FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
================================================================================
LEGACY MINNESOTA MUNICIPAL BOND FUND
================================================================================
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED MARCH 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
INVESTMENT INCOME:
Interest income $ 1,324,569
-------------------------
EXPENSES:
Investment advisory fees 154,139
Administration fees 15,015
Shareholder servicing and accounting costs 35,848
Distribution fees 5,605
Custody fees 5,369
Federal and state registration 2,640
Professional fees 4,739
Reports to shareholders 5,373
Directors' fees and expenses 1,424
Other 1,003
-------------------------
Total expenses 231,155
-------------------------
NET INVESTMENT INCOME 1,093,414
-------------------------
REALIZED AND UNREALIZED LOSS ON INVESTMENTS:
Net realized loss on investments (315,596)
Change in unrealized appreciation on investments 26,439
-------------------------
Net realized and unrealized loss on investments (289,157)
-------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $ 804,257
=========================
</TABLE>
SEE NOTES TO THE FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
================================================================================
LEGACY MINNESOTA MUNICIPAL BOND FUND
================================================================================
STATEMENT OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended April 12, 19991
March 31, 2000 through
(Unaudited) September 30, 1999
--------------------- ---------------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 1,093,414 $ 960,118
Net realized loss on investments (315,596) (186,076)
Change in unrealized appreciation (depreciation) on investments 26,439 (1,361,923)
------ ----------
Net increase (decrease) in net assets resulting from operations 804,257 (587,881)
------- --------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income (1,093,414) (960,118)
Distributions in excess of book net investment income (162,136) (180,525)
-------- --------
Total dividends and distributions (1,255,550) (1,140,643)
---------- ----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold 3,641,999 5,409,540
Proceeds from trust fund conversion - 58,062,480
Proceeds from shares issued to holders in reinvestment of
dividends 775 117
Cost of shares redeemed (5,190,312) (4,522,764)
---------- ----------
Net increase (decrease) in net assets resulting from
capital share transactions (1,547,538) 58,949,373
---------- ----------
TOTAL INCREASE (DECREASE) IN NET ASSETS (1,998,831) 57,220,849
---------- ----------
NET ASSETS:
Beginning of period 57,220,849 -
---------- ---------
End of period (including distributions in excess of book
net investment income of $325,522 and $163,386 respectively) $55,222,018 $57,220,849
=========== ===========
</TABLE>
1 COMMENCEMENT OF OPERATIONS
SEE NOTES TO THE FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
================================================================================
LEGACY MINNESOTA MUNICIPAL BOND FUND
================================================================================
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended April 12, 1999 1
March 31, 2000 through
(Unaudited) September 30, 1999
------------------- ----------------------
<S> <C> <C>
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF PERIOD $9.71 $10.00
----- ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.19 0.16
Net realized and unrealized loss
on investments (0.05) (0.26)
----- -----
Total from investment operations 0.14 (0.10)
---- -----
LESS DIVIDENDS AND DISTRIBUTIONS:
Dividends from net investment income (0.19) (0.16)
Distributions in excess of net investment income (0.03) (0.03)
----- -----
Total dividends and distributions (0.22) (0.19)
----- -----
NET ASSET VALUE, END OF PERIOD $9.63 $9.71
===== =====
TOTAL RETURN 1.45% 2 (0.96%)2
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of period $55,222,018 $57,220,849
Ratio of net expenses to average net assets 0.82% 3 0.88% 3
Ratio of net investment income to average net assets 3.90% 3 3.53% 3
Portfolio turnover rate 15.63% 18.86%
</TABLE>
1 COMMENCEMENT OF OPERATIONS.
2 NOT ANNUALIZED.
3 ANNUALIZED.
SEE NOTES TO THE FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
================================================================================
LEGACY MINNESOTA MUNICIPAL BOND FUND
================================================================================
SCHEDULE OF INVESTMENTS - MARCH 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
------------------------------------------------------------------
LONG TERM INVESTMENTS - 98.8%
------------------------------------------------------------------
------------------------------------------------------------------
MUNICIPAL BONDS - 98.8%
------------------------------------------------------------------
EDUCATION - 18.7%
Albany Minnesota Independent School District No. 745
$ 500,000 Series A, 5.600%, 02/01/05 $ 509,612
Albany Minnesota Independent School District No. 745
500,000 Series A, 5.800%, 02/01/07 513,057
Alexandria Minnesota Independent School District No. 206
600,000 Series A, 6.100%, 02/01/05 616,548
Alexandria Minnesota Independent School District No. 206
1,000,000 Series A, 5.375%, 02/01/13 1,008,827
Anoka Hennepin Minnesota Independent School District No. 11
250,000 Series C, 4.950%, 02/01/08 249,501
Anoka Hennepin Minnesota Independent School District No. 11
1,000,000 Series A, 5.250%, 02/01/11 1,012,185
Crookstone Minnesota Independent School District No. 593
500,000 6.050%, 04/01/08 517,358
Faribault Minnesota Independent School District No. 656
500,000 5.900%, 06/01/07 515,372
Minneapolis Minnesota Special School District No. 001
1,110,000 Series A, 5.900%, 02/01/12 1,151,399
Minneapolis Minnesota Special School District No. 001
1,100,000 5.000%, 02/01/12 1,082,567
Osseo Minnesota Independent School District No. 279
340,000 Series B, 4.700%, 02/01/05 335,790
Park Rapids Minnesota Independent School District No. 309
500,000 4.750%, 02/01/13 464,894
Red Wing Minnesota Independent School District No. 256
600,000 Series A, 5.250%, 02/01/03 605,450
St. Paul Minnesota Independent School District No. 625
500,000 Series C, 5.850%, 02/01/08 515,498
St. Paul Minnesota Independent School District No. 625
205,000 Series B, 6.000%, 02/01/05 211,484
White Bear Lake Minnesota Independent School District No. 624
1,000,000 Series C, 5.700%, 02/01/06 1,029,335
-----------------
10,338,877
-----------------
EDUCATION (HIGHER) - 4.5%
Minnesota State Higher Education Facility Authority
250,000 Series 3-R2, 5.350%, 09/01/06 252,561
Minnesota State Higher Education Facility Authority
800,000 Series 3-R1, 5.350%, 10/01/06 811,784
Minnesota State Higher Education Facility Authority
500,000 Series 4-N, 5.300%, 11/01/12 498,613
Minnesota State Higher Education Facility Authority
720,000 Series 4-L, 5.350%, 10/01/17 670,458
Northfield Minnesota College Facility
225,000 6.150%, 10/01/05 234,718
-----------------
2,468,134
-----------------
ELECTRIC - 6.9%
Northern Municipal Power Agency Minnesota Electric
$ 500,000 Series A, 5.400%, 01/01/02 $ 508,465
Northern Municipal Power Agency Minnesota Electric
750,000 5.500%, 01/01/07 772,496
Southern Minnesota Municipal Power Agency Power Supply
225,000 Series B, 5.800%, 01/01/07 234,662
Southern Minnesota Municipal Power Agency Power Supply
395,000 Series B, 5.800%, 01/01/07 407,506
Western Minnesota Municipal Power Agency
1,835,000 Series A, 5.500%, 01/01/11 1,868,415
-----------------
3,791,544
-----------------
HOSPITAL - 11.7%
Bloomington Minnesota Health Care Facility
500,000 5.450%, 07/01/03 509,934
Duluth Minnesota Economic Development Authority Health Care Facilities
500,000 6.000%, 02/15/12 519,381
Minneapolis-St. Paul Minnesota Housing & Redevelopment Health Care System
1,000,000 Series A, 5.000%, 11/15/06 994,936
Robbinsdale Minnesota Hospital
1,000,000 Series B, 5.300%, 05/15/07 1,007,511
Rochester Minnesota Health Care Facilities
1,145,000 Series I, 5.800%, 11/15/07 1,198,699
Saint Cloud Minnesota Hospital Facilities
250,000 Series B, 7.000%, 07/01/20 263,194
Saint Cloud Minnesota Hospital Facilities
900,000 Series A, 5.000%, 07/01/12 875,823
St. Louis Park Minnesota Hospital
300,000 Series A, 7.000%, 07/01/00 303,069
St. Paul Minnesota Housing & Redevelopment Authority Hospital
800,000 5.300%, 05/15/06 807,442
-----------------
6,479,989
-----------------
HOUSING - 11.0%
Burnsville Minnesota Multi-Family Housing
45,000 5.375%, 07/01/04 45,575
Coon Rapids Minnesota Single Family Housing
75,000 5.700%, 09/01/04 77,384
Minneapolis Minnesota Multifamily Housing
120,000 6.750%, 10/01/01 123,523
Minnesota State Housing Agency
240,000 Series D, 5.150%, 02/01/04 241,059
Minnesota State Housing Agency
250,000 4.950%, 01/01/03 250,809
Minnesota State Housing Agency
245,000 Series F, 5.450%, 07/01/04 250,188
Minnesota State Housing Agency
245,000 Series F, 5.550%, 07/01/05 252,159
Minnesota State Housing Agency
325,000 Series E, 5.250%, 08/01/02 329,069
Minnesota State Housing Agency
100,000 6.100%, 07/01/01 102,246
Minnesota State Housing Agency
100,000 6.200%, 07/01/02 102,955
HOUSING (CONTINUED) - 11.0%
Minnesota State Housing Agency
$ 200,000 Series C, 5.300%, 01/01/04 $ 203,860
Minnesota State Housing Agency
300,000 Series C, 5.300%, 07/01/04 305,220
Minnesota State Housing Agency
610,000 6.000%, 01/01/16 615,571
Minnesota State Housing Agency
180,000 5.200%, 07/01/03 181,913
Minnesota State Housing Agency
135,000 Series A, 5.500%, 01/01/08 137,631
Minnesota State Housing Agency
325,000 Series A, 5.600%, 07/01/09 333,558
Minnesota State Housing Agency
600,000 Series B, 5.000%, 07/01/13 572,526
Olmsted County Minnesota Housing & Redevelopment
200,000 7.000%, 02/01/13 204,540
St. Paul Minnesota Housing & Redevelopment Authority
650,000 Series J, 5.125%, 03/01/12 620,927
St. Paul Minnesota Housing & Redevelopment Authority
500,000 5.100%, 09/01/03 506,382
Washington County Minnesota Housing & Redevelopment Authority
630,000 5.000%, 02/01/06 633,094
-----------------
6,090,189
-----------------
PUBLIC FACILITIES & IMPROVEMENTS - 28.9%
Bloomington Minnesota
500,000 5.500%, 02/01/08 512,520
Burnsville Minnesota
300,000 Series B, 5.800%, 02/01/01 303,945
Chaska Minnesota
1,000,000 4.100%, 12/01/08 914,801
Golden Valley Minnesota
670,000 Series C, 5.200%, 02/01/11 672,945
Hennepin County Minnesota
800,000 5.200%, 12/01/10 808,842
Hennepin County Minnesota
480,000 Series A, 5.000%, 12/01/11 474,539
Mankato Minnesota
800,000 Series D, 6.050%, 02/01/05 823,147
Metropolitan Counsil Minnesota Sports Facilities
500,000 6.000%, 10/01/09 522,136
Metropolitan Counsil Minnesota
600,000 Series A, 5.750%, 12/01/00 607,475
Metropolitan Counsil Minnesota
725,000 Series C, 5.400%, 02/01/13 729,054
Minneapolis Minnesota
500,000 Series D, 5.000%, 12/01/16 468,759
Minneapolis Minnesota
500,000 5.900%, 04/01/02 500,000
Minneapolis Minnesota
500,000 6.100%, 04/01/04 500,000
Minneapolis Minnesota
500,000 6.250%, 10/01/07 522,179
Minneapolis Minnesota
200,000 6.250%, 04/01/12 208,171
PUBLIC FACILITIES & IMPROVEMENTS (CONTINUED) - 28.9%
Minneapolis Minnesota
$ 250,000 5.750%, 09/01/10 $ 253,639
Minneapolis Minnesota
805,000 5.000%, 12/01/06 809,932
Minneapolis Minnesota
600,000 4.700%, 12/01/08 589,080
Minneapolis Minnesota Capital Appreciation
1,250,000 Series B, 0.000%, 12/01/08 800,427
Minnesota State
1,300,000 4.850%, 08/01/12 1,263,475
Minnesota State
750,000 5.250%, 08/01/12 754,343
Minnesota State
250,000 5.600%, 10/01/06 257,703
Plymouth Minnesota
445,000 7.000%, 04/01/12 446,077
Ramsey County Minnesota
500,000 Series C, 5.500%, 12/01/03 514,481
Sartell Minnesota
560,000 Series B, 5.000%, 02/01/09 558,380
St. Paul Minnesota
600,000 Series A, 5.000%, 02/01/01 604,003
Steele County Minnesota
245,000 Series A, 5.600%, 02/01/07 251,512
Steele County Minnesota
260,000 Series A, 5.700%, 02/01/08 267,810
-----------------
15,939,375
-----------------
TRANSPORTATION - 6.8%
Bloomington Minnesota Port Authority
500,000 Series A, 5.250%, 02/01/03 509,041
Bloomington Minnesota Port Authority
400,000 Series A, 5.350%, 02/01/13 402,859
Bloomington Minnesota Port Authority
750,000 Series A, 4.750%, 02/01/11 721,662
Minneapolis & St. Paul Minnesota Metropolitan Airports Commission
250,000 Series 10, 4.700%, 01/01/01 250,751
Minnesota State Infastructure Development
500,000 6.600%, 08/01/00 504,489
Seaway Port Authority Duluth Minnesota
500,000 Series B, 6.800%, 05/01/12 524,357
St. Cloud Minnesota Infastructure Management
880,000 Series 1999A, 4.800%, 03/01/08 865,753
-----------------
3,778,912
-----------------
WASTE DISPOSAL - 3.9%
Anoka County Minnesota Solid Waste Disposal
$ 250,000 6.950%, 02/01/08 $ 255,716
Hennepin County Minnesota Solid Waste Disposal
250,000 5.500%, 10/01/03 256,954
Hennepin County Minnesota Solid Waste Disposal
500,000 5.750%, 10/01/10 515,758
Wright County Minnesota Solid Waste Disposal
590,000 Series A, 5.700%, 12/01/09 604,245
Wright County Minnesota Solid Waste Disposal
500,000 Series A, 5.400%, 12/01/06 513,215
-----------------
2,145,888
-----------------
WATER & SEWER - 6.4%
Metropolitan Counsil Minneapolis-St. Paul Metropolitan Area Sewer
675,000 Series B, 4.850%, 12/01/11 655,056
Minnesota Public Facilities Authority Water Pollution Control
500,000 Series A, 6.450%, 03/01/02 519,017
Minnesota Public Facilities Authority Water Pollution Control
600,000 Series B, 5.350%, 03/01/12 604,809
Minnesota Public Facilities Authority Water Pollution Control
1,000,000 Series B, 5.375%, 03/01/13 1,003,971
Minnesota Public Facilities Authority Water Pollution Control
770,000 5.000%, 03/01/10 763,440
-----------------
3,546,293
-----------------
TOTAL MUNICIPAL BONDS (Cost of $55,914,684) 54,579,201
-----------------
TOTAL LONG TERM INVESMENTS (COST OF $55,914,684) 54,579,201
-----------------
SHARES
------------------------------------------------------------------
SHORT TERM INVESTMENTS - 0.0%
------------------------------------------------------------------
------------------------------------------------------------------
INVESTMENT COMPANIES - 0.0%
------------------------------------------------------------------
8,465 Federated Minnesota Municipal Money Market 8,465
-----------------
TOTAL INVESTMENT COMPANIES (Cost of $8,465) 8,465
-----------------
TOTAL SHORT TERM INVESTMENTS (COST OF $8,465) 8,465
-----------------
TOTAL INVESTMENTS - 98.8% (COST OF $55,923,149) 54,587,666
-----------------
Other assets in excess of liabilities - 1.2% 634,352
-----------------
TOTAL NET ASSETS - 100.0% $ 55,222,018
=================
</TABLE>
SEE NOTES TO THE FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------
================================================================================
LEGACY MINNESOTA MUNICIPAL BOND FUND
================================================================================
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
MARCH 31, 2000
--------------------------------------------------------------------------------
1. ORGANIZATION
Legacy Minnesota Municipal Bond Fund (the "Fund") is a series of Bremer
Investment Funds, Inc. (the "Company"), an open-end management investment
company which was incorporated on August 26, 1996, as a Maryland Corporation.
The Fund commenced operations on April 12, 1999. The principal investment
objective of the Fund is to provide current income exempt from federal
regular income tax and Minnesota regular personal income tax, consistent with
the preservation of capital and prudent investment management. In addition to
the Fund, the Company offers the Bremer Growth Stock Fund and the Bremer Bond
Fund. Information with respect to these portfolios is contained in a separate
report. The assets and liabilities of each portfolio are segregated and a
shareholder's interest is limited to the portfolio in which the shareholder
owns shares.
All assets of the common trust funds from Richfield Bank & Trust Company and
Bremer Trust, N.A., were transferred to Bremer Investment Funds, Inc. as of
April 12, 1999. The securities were transferred at market value, and the
original cost basis was replaced with market.
The costs incurred in connection with the organization, initial
registration and public offering of shares for the Fund have been paid by
Bremer Trust, N.A., the Investment Adviser.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of the financial statements. These
policies are in conformity with generally accepted accounting principles.
a) INVESTMENT VALUATION - Debt securities (other than short-term
investments) are valued at the most recently quoted bid prices furnished
by an independent pricing service. For securities where market 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 under the supervision of the
Board of Directors. Instruments with a remaining maturity of 60 days or
less are valued at amortized cost, which approximates market value.
b) FEDERAL INCOME TAXES - No provision for federal income taxes has been
made since the Fund has complied to date with the provisions of the
Internal Revenue Code applicable to regulated investment companies and
intends to continue to so comply in future years and to distribute
investment company net taxable income and net realized gains to
shareholders.
c) WRITTEN OPTION ACCOUNTING - The Fund may write call options on securities
either held in its portfolio, or which it has the right to obtain without
payment or further consideration, or for which it has segregated cash in
the amount of additional consideration. When the Fund writes an option,
an amount equal to the premium received is entered into the Fund's
accounting records as an asset and an equivalent liability. The amount of
the liability is subsequently marked-to-market to reflect the current
value of the option written. When an option expires, or if the Fund
enters into a closing purchase transaction, the Fund realizes a gain (or
loss if the cost of a closing transaction exceeds the premium received
when the option was sold).
d) INCOME AND EXPENSES - The Fund is charged for those expenses that are
directly attributable to the portfolio, such as advisory, administration
and certain shareholder service fees. Expenses that are not directly
attributable to a portfolio are typically allocated among the Company's
portfolios in proportion to their respective net assets,
number of shareholder accounts or net sales, where applicable.
e) DISTRIBUTIONS TO SHAREHOLDERS - Dividends from net investment income of
the Fund are declared daily and paid monthly. Distributions of the Fund's
net realized capital gains, if any, will be declared at least annually.
f) USE OF ESTIMATES - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
g) OTHER - Investment and shareholder transactions are recorded on trade
date. The Fund determines the gain or loss realized from the investment
transactions by comparing the original cost of the security lot sold with
the net sales proceeds. Dividend income is recognized on the ex-dividend
date or as soon as information is available to the Fund, and interest
income is recognized on an accrual basis. Generally accepted accounting
principles require that permanent financial reporting and tax differences
be reclassified to capital stock.
3. CAPITAL SHARE TRANSACTIONS
Transactions in shares of the Fund for the six months ended March 31, 2000,
were as follows:
LEGACY MINNESOTA
MUNICIPAL BOND FUND
Shares sold 380,174
Shares issued
to holders in
reinvestment
of dividends 81
Shares redeemed (541,999)
--------------
Net decrease (161,744)
Transactions in shares of the Fund for the period ended September 30, 1999,
were as follows:
LEGACY MINNESOTA
MUNICIPAL BOND FUND
Shares sold 550,747
Shares issued as
a result of trust
fund conversion 5,806,248
Shares issued
to holders in
reinvestment
of dividends 12
Shares redeemed (461,314)
---------------
Net increase 5,895,693
4. INVESTMENT TRANSACTIONS
The aggregate purchases and sales of investments, excluding short-term
investments, by the Fund for the six months ended March 31, 2000, were as
follows:
LEGACY MINNESOTA
MUNICIPAL BOND FUND
Purchases
U.S. Government $ -
Other 8,655,567
Sales
U.S. Government $ -
Other 10,476,486
At March 31, 2000, gross unrealized appreciation and depreciation of
investments for tax purposes were as follows:
LEGACY MINNESOTA
MUNICIPAL BOND FUND
Appreciation $ 64,346
(Depreciation) (1,399,829)
-------------
Net depreciation
on investments $ (1,335,483)
=============
At March 31, 2000, the cost of investments for federal income tax purposes
was $55,923,149.
At March 31, 2000, the Fund had accumulated net realized capital loss
carryovers of $40,258 expiring in 2007.
5. INVESTMENT ADVISORY AND OTHER AGREEMENTS
The Fund has entered into an Investment Advisory Agreement with Bremer Trust
N.A., a wholly owned subsidiary of Bremer Financial Corporation. Pursuant to
its advisory agreement with the Fund, the Investment Adviser is entitled to
receive a fee, calculated daily and payable monthly, at the annual rate of
0.55% as applied to the Fund's daily net assets. The Investment Adviser has
engaged Richfield Bank & Trust Co. to act as a sub-adviser to the Fund. The
fees paid to the sub-adviser are included in the compensation the Fund pays
to the Investment Adviser, as described above. Consequently, the services of
the sub-adviser will be at no additional cost to shareholders of the Fund.
Shareholders of the Fund are also subject to a maximum front-end sales charge
of 2.75% of the offering price or 2.83% of the net asset value.
Firstar Bank, N.A., a subsidiary of Firstar Corporation, a publicly held
bank holding company, serves as custodian for the Funds. Firstar Mutual Fund
Services, LLC, a wholly owned limited liability company of Firstar Bank,
N.A., serves as transfer agent, administrator and accounting services agent
for the Fund.
The Fund has adopted a written plan of distribution (the "Plan") in
accordance with Rule 12b-1 under the Investment Company Act of 1940. The
Plan authorizes the Funds to make payments in connection with the
distribution of shares at an annual rate of up to 0.25% of a Fund's average
daily net assets. On November 24, 1998, the Fund entered into an agreement
with Rafferty Capital Markets, Inc. to distribute the Fund's shares. The
currently approved rate is an annual rate of 0.02% of the Fund's average
daily net assets. Payments made pursuant to the Plan may only be used to pay
distribution and marketing expenses in the year incurred. For the six months
ended March 31, 2000, $5,605 was incurred pursuant to the distribution
agreement.
6. RELATED PARTIES
Richfield Bank & Trust Co. and Bremer Trust, N.A. each had clients and
affiliated clients that held 4,028,305 and 1,692,425 outstanding shares,
respectively, of the Fund as of March 31, 2000.
Investment Adviser
Bremer Trust, N.A.
Cold Spring Center
4150 Second Street South
St. Cloud, MN 56302-0986
Sub-Adviser:
Richfield Bank & Trust Co.
6625 Lyndale Avenue South
Richfield, MN 55423
Administrator, Dividend Paying Agent,
Shareholders' Servicing Agent
and Transfer Agent
Firstar Mutual Fund Services, LLC
615 East Michigan Street
Milwaukee, WI 53202
Custodian
Firstar Bank , N.A.
615 East Michigan Street
Milwaukee, WI 53202
Counsel
Briggs and Morgan
2400 IDS Center
80 South Eighth Street
Minneapolis, MN 55402
Independent Auditors
Arthur Andersen LLP
100 East Wisconsin Avenue
Milwaukee, WI 53202
Directors
Steven A. Laraway
Stan K. Dardis
John M. Bishop
John J. Feda
Barbara A. Grachek
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