================================================================================
ANNUAL REPORT
BREMER INVESTMENT FUNDS, INC.
================================================================================
Bremer Growth Stock Fund
Bremer Bond Fund
September 30, 2000
TABLE OF CONTENTS
Shareholder Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Growth Stock Fund Cumulative Rate of Return Graph . . . . . . . . . . . . . . .2
Bond Fund Cumulative Rate of Return Graph . . . . . . . . . . . . . . . . . . .3
Statement of Assets and Liabilities . . . . . . . . . . . . . . . . . . . . . .4
Statement of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
Growth Stock Fund Statements of Changes in Net Assets . . . . . . . . . . . . .6
Bond Fund Statements of Changes in Net Assets . . . . . . . . . . . . . . . . .7
Growth Stock Fund Financial Highlights . . . . . . . . . . . . . . . . . . . . 8
Bond Fund Financial Highlights . . . . . . . . . . . . . . . . . . . . . . . . 9
Growth Stock Fund Schedule of Investments . . . . . . . . . . . . . . . . . . 10
Bond Fund Schedule of Investments . . . . . . . . . . . . . . . . . . . . . . 13
Notes to the Financial Statements . . . . . . . . . . . . . . . . . . . . . ..18
Report of Independent Public Accountants . . . . . . . . . . . . . . . . . . .21
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.
For more information about the Funds, please call 1-800-595-5552 to receive a
Prospectus. Please read the Prospectus carefully before investing or sending
money.
November 29, 2000
Dear Shareholder:
The U.S. economy is finally showing signs of reacting to the Federal Reserve's
interest rate tightenings, which began in June of 1999, falling in line with the
normal adjustment time of 12 to 18 months. Thus, the ideal investment
environment of strong economic growth, low inflation, stable interest rates and
growing corporate profits is weakening. That has lead to a dramatic increase in
volatility within the financial markets over the past year. Stock markets have
for the most part begun to decline with this evolving environment, while the
slowing economy has been positive for the bond market as fixed income investors
grew more confident that the Federal Reserve would not raise interest rates
again in 2000.
For the fiscal year ending September 30, 2000, the Bremer Growth Stock Fund
appreciated 18.78% compared to 13.28% for the U.S. Stock market, benchmarked by
the S&P 500 Index. Large cap growth and technology names performed very well in
the first half of the fiscal year and helped offset the negative returns for the
second half of the fiscal year. The portfolio's diversified blend of aggressive
and moderate growth securities was key to the overall performance, as well as
dampened losses in the last six months!
Most bond sectors produced steady gains as the fiscal year progressed and some
outperformed the stock market at times during the second half of the fiscal
year. Expectations of a slowing economy and no further Federal Reserve hikes
drove interest rates down and thereby brought fixed income returns up. Within
the bond market, the rally in Treasury yields has made the higher yields on
mortgages and investment-grade corporates appear very attractive. The Bremer
Bond Fund achieved a total return of 5.19% for the one-year reporting period
ending September 30, 2000.
Looking ahead, the Fed's tightening efforts to slow the economy from its rapid
pace have clearly been effective. Also, higher energy prices are contributing to
a reduction in consumer spending, but with only a modest effect on inflation.
Consequently, we expect that the Fed is probably finished raising rates for this
year and perhaps for this economic cycle, which should be good for the bond
market and for interest rate sensitive stocks. Overall, we remain optimistic
about the long-term prospects for both the U.S. equity and bond markets and
expect normalized annual returns in the years ahead.
We continue to believe it is extremely important for our investors to remember
three things: keep a diversified disciplined approach to investing; maintain
realistic expectations about investment returns; and focus on the long-term with
regard to their portfolios.
We thank you for your business, appreciate your support, and look forward to
serving your investment needs in the years to come.
Sincerely,
/s/Steven A. Laraway
Steven A. Laraway
President
Bremer Investment Funds, Inc.
[GRAPH]
Bremer Growth Stock Fund
S&P 500
1/27/97 3/31/97 6/30/97 9/30/97 12/31/97 3/31/98
$10,000 $9,600 $11,160 $11,900 $12,038 $13,724
$10,000 $9,935 $11,670 $12,544 $12,904 $14,704
6/30/98 9/30/98 12/31/98 3/31/99 6/30/99 9/30/99
$14,127 $12,330 $15,639 $16,164 $17,084 $15,902
$15,189 $13,678 $16,591 $17,417 $18,645 $17,482
12/31/99 3/31/00 6/30/00 9/30/00
$19,607 $20,764 $19,659 $18,889
$20,083 $20,543 $19,996 $19,803
THIS CHART ASSUMES AN INITIAL GROSS INVESTMENT OF $10,000 MADE ON 1/27/97
(COMMENCEMENT OF OPERATIONS). RETURNS SHOWN INCLUDE THE REINVESTMENT OF ALL
DIVIDENDS. PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT
RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, SO THAT YOUR SHARES, WHEN REDEEMED,
MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST.
AVERAGE ANNUAL RATE OF RETURN (%)
-----------------------------------------------------
ONE YEAR ENDED SINCE INCEPTION* TO
SEPTEMBER 30, 2000 SEPTEMBER 30, 2000
-----------------------------------------------------
Bremer Growth Stock Fund 18.78% 18.87%
S&P 500** 13.28% 20.42%
* JANUARY 27, 1997.
** THE STANDARD & POOR'S 500 INDEX (S&P 500) IS A CAPITAL-WEIGHTED INDEX,
REPRESENTING THE AGGREGATE MARKET VALUE OF THE COMMON EQUITY OF 500
STOCKS PRIMARILY TRADED ON THE NEW YORK STOCK EXCHANGE.
[GRAPH]
1/27/97 3/31/97 6/30/97 9/30/97 12/31/97 3/31/98
Bremer Bond Fund $10,000 $10,009 $10,270 $10,533 $10,720 $10,860
LB Int. Govt./Corp. $10,000 $10,009 $10,304 $10,582 $10,809 $10,978
6/30/98 9/30/98 12/31/98 3/31/99 6/30/99 9/30/99 12/31/99 3/31/00
$11,063 $11,439 $11,442 $11,422 $11,348 $11,414 $11,393 $11,495
$11,184 $11,686 $11,721 $11,699 $11,652 $11,759 $11,765 $11,942
6/30/00 9/30/00
$11,682 $12,005
$12,143 $12,493
THIS CHART ASSUMES AN INITIAL GROSS INVESTMENT OF $10,000 MADE ON 1/27/97
(COMMENCEMENT OF OPERATIONS). RETURNS SHOWN INCLUDE THE REINVESTMENT OF ALL
DIVIDENDS. PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT
RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, SO THAT YOUR SHARES, WHEN REDEEMED,
MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST.
AVERAGE ANNUAL RATE OF RETURN (%)
----------------------------------------------------
ONE YEAR ENDED SINCE INCEPTION* TO
SEPTEMBER 30, 2000 SEPTEMBER 30, 2000
----------------------------------------------------
Bremer Bond Fund 5.19% 5.09%
LB Int. Govt./Corp.** 6.25% 6.24%
* JANUARY 27, 1997.
** THE LEHMAN BROTHERS INTERMEDIATE GOVERNMENT/CORPORATE BOND INDEX (LB
INT. GOVT./CORP.) IS AN UNMANAGED VALUE-WEIGHTED INDEX COMPRISED OF ALL
FIXED-RATE DEBT ISSUES RATED INVESTMENT GRADE (BAA3) OR HIGHER BY
MOODY'S INVESTOR SERVICE, STANDARD & POOR'S AND/OR FITCH INVESTOR
SERVICE. ALL ISSUES HAVE MATURITIES BETWEEN ONE AND TEN YEARS AND AN
OUTSTANDING PAR VALUE OF AT LEAST $150 MILLION. THE DURATION OF THE
INDEX AS OF SEPTEMBER 30, 2000 WAS 3.46 YEARS.
================================================================================
BREMER INVESTMENT FUNDS, INC.
================================================================================
STATEMENT OF ASSETS AND LIABILITIES
September 30, 2000
<TABLE>
<CAPTION>
----------------- -------------------
GROWTH BOND
STOCK FUND FUND
----------------- -------------------
ASSETS:
<S> <C> <C>
Investments, at market value
(Cost of $55,561,051 and $96,223,541, respectively) $93,274,076 $94,926,226
Dividends receivable 49,477 -
Interest receivable 25,066 1,260,894
Organizational expenses, net of accumulated amortization 7,202 7,202
Other assets 1,415 1,921
------------------- -------------------
Total assets 93,357,236 96,196,243
------------------- -------------------
LIABILITIES:
Payable to Investment Adviser 55,415 55,166
Dividends payable 479,836
-
Accrued expenses and other liabilities 46,805 50,977
------------------- -------------------
Total liabilities 102,220 585,979
------------------- -------------------
NET ASSETS $93,255,016 $95,610,264
================== ===================
NET ASSETS CONSIST OF:
Capital stock $54,617,357 $98,743,716
Accumulated undistributed net investment income 8,203
-
Accumulated undistributed net realized gain (loss)
on investments 924,634 (1,844,340)
Net unrealized appreciation (depreciation) on
investments 37,713,025 (1,297,315)
------------------- -------------------
Total Net Assets $93,255,016 $95,610,264
================== ===================
Shares outstanding
(100 million shares authorized for each Fund,
$ .0001 par value) 5,143,751 9,785,771
=================== ===================
Net Asset Value, Redemption Price and Offering Price
Per Share $18.13 $9.77
=================== ===================
</TABLE>
SEE NOTES TO THE FINANCIAL STATEMENTS.
================================================================================
BREMER INVESTMENT FUNDS, INC.
================================================================================
STATEMENT OF OPERATIONS
Year Ended September 30, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
---------------- -----------------
GROWTH BOND
STOCK FUND FUND
---------------- -----------------
INVESTMENT INCOME:
<S> <C> <C>
Dividend income
(net of withholding tax of $3,114 and $0, respectively) $ 559,399 $ -
Interest income 241,069 6,463,852
Other income 2,581 -
---------------- -----------------
Total investment income 803,049 6,463,852
---------------- -----------------
EXPENSES:
Investment advisory fees 638,844 658,785
Administration fees 54,542 57,675
Shareholder servicing and accounting costs 56,619 72,908
Distribution fees 11,532 10,619
Custody fees 16,514 17,485
Federal and state registration 8,286 3,139
Professional fees 17,314 18,705
Reports to shareholders 7,624 8,461
Amortization of organizational expenses 5,490 5,490
Directors' fees and expenses 2,700 2,696
Other 776 909
---------------- -----------------
Total expenses 820,241 856,872
---------------- -----------------
NET INVESTMENT INCOME (LOSS) (17,192) 5,606,980
---------------- -----------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized gain (loss) on investments and written option contracts 1,076,651 (1,737,550)
Change in unrealized appreciation (depreciation) on investments 12,805,769 964,142
---------------- -----------------
Net realized and unrealized gain (loss) on investments 13,882,420 (773,408)
---------------- -----------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $13,865,228 $ 4,833,572
================ =================
</TABLE>
SEE NOTES TO THE FINANCIAL STATEMENTS.
================================================================================
BREMER INVESTMENT FUNDS, INC.
================================================================================
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
------------------------------------------------
GROWTH STOCK FUND
------------------------------------------------
Year Ended Year Ended
September 30, 2000 September 30, 1999
---------------------- ----------------------
OPERATIONS:
<S> <C> <C>
Net investment income (loss) $ (17,192) $ 61,901
Net realized gain on investments 1,076,651 2,554,777
Change in unrealized appreciation on investments
and written option contracts 12,805,769
13,319,838
---------------------- ----------------------
Net increase in net assets resulting from operations 13,865,228 15,936,516
---------------------- ----------------------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS:
Net investment income (68,454) (161,963)
Net realized gains (2,698,314) (301,927)
---------------------- ----------------------
Total dividends and distributions (2,766,768) (463,890)
---------------------- ----------------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold 32,367,519 15,715,001
Proceeds from shares issued to holders in reinvestment
of dividends 344,366 11,863
Cost of shares redeemed (17,871,606) (18,057,770)
---------------------- ----------------------
Net increase (decrease) in net assets resulting from
capital share transactions 14,840,279 (2,330,906)
---------------------- ----------------------
TOTAL INCREASE IN NET ASSETS 25,938,739 13,141,720
---------------------- ----------------------
NET ASSETS:
Beginning of period 67,316,277 54,174,557
---------------------- ----------------------
End of period $93,255,016 $67,316,277
====================== ======================
Undistributed Net Investment Income included in
Net Assets at End of Period $ - $60,013
====================== ======================
</TABLE>
SEE NOTES TO THE FINANCIAL STATEMENTS.
================================================================================
BREMER INVESTMENT FUNDS, INC.
================================================================================
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
-------------------------------------------------
BOND FUND
-------------------------------------------------
Year Ended Year Ended
September 30, 2000 September 30, 1999
---------------------- -----------------------
OPERATIONS:
<S> <C> <C>
Net investment income $ 5,606,980 $ 4,711,416
Net realized loss on investments (1,737,550) (26,953)
Change in unrealized appreciation (depreciation) on
investments 964,142 (4,874,934)
---------------------- -----------------------
Net increase (decrease) in net assets resulting from
operations 4,833,572 (190,471)
---------------------- -----------------------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS:
Net investment income (5,606,980) (4,711,416)
Net realized gains (1,464) (296,994)
---------------------- -----------------------
Total dividends and distributions (5,608,444) (5,008,410)
---------------------- -----------------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold 29,423,519 31,135,209
Proceeds from shares issued to holders in reinvestment
of dividends 325,414 112,431
Cost of shares redeemed (25,351,941) (16,816,629)
---------------------- -----------------------
Net increase in net assets resulting from
capital share transactions 4,396,992 14,431,011
---------------------- -----------------------
TOTAL INCREASE IN NET ASSETS 3,622,120 9,232,130
---------------------- -----------------------
NET ASSETS:
Beginning of period 91,988,144 82,756,014
---------------------- -----------------------
End of period $95,610,264 $91,988,144
====================== =======================
Undistributed Net Investment Income included in
Net Assets at End of Period $8,203 $43,722
====================== =======================
</TABLE>
SEE NOTES TO THE FINANCIAL STATEMENTS.
================================================================================
BREMER INVESTMENT FUNDS, INC.
================================================================================
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
-------------------------------------------------------------------------
GROWTH STOCK FUND
-------------------------------------------------------------------------
Year Ended September 30, January 27, 19971
------------------------------------------------- through
2000 1999 1998 September 30, 1997
---------------- -------------- --------------- ----------------------
PER SHARE DATA:
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD $15.73 $12.28 $11.90 $10.00
---------------- -------------- --------------- ----------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (0.01) 0.02 0.04 0.03
Net realized and unrealized gain on
investments 2.98 3.54 0.39 1.87
---------------- -------------- --------------- ----------------------
Total from investment operations 2.97 3.56 0.43 1.90
---------------- -------------- --------------- ----------------------
LESS DIVIDENDS AND DISTRIBUTIONS:
Dividends from net investment income (0.01) (0.04) (0.03)
-
Distributions from net realized gains (0.56) (0.07) (0.02)
-
---------------- ------------- --------------- ----------------------
Total dividends and distributions (0.57) (0.11) (0.05)
-
---------------- -------------- --------------- ----------------------
NET ASSET VALUE, END OF PERIOD $18.13 $15.73 $12.28 $11.90
================= ============== =============== ======================
TOTAL RETURN 18.78% 28.97% 3.61% 19.00% 2
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of period $93,255,016 $67,316,277 $54,174,557 $51,103,642
Ratio of net expenses to average net assets 0.90% 0.89% 0.91% 1.05% 3
Ratio of net investment income (loss) to
average net assets (0.02%) 0.09% 0.27% 0.62% 3
Portfolio turnover rate 10.75% 16.74% 13.15% 11.30%
1 COMMENCEMENT OF OPERATIONS.
2 NOT ANNUALIZED.
3 ANNUALIZED.
</TABLE>
SEE NOTES TO THE FINANCIAL STATEMENTS.
================================================================================
BREMER INVESTMENT FUNDS, INC.
================================================================================
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
-------------------------------------------------------------------------
BOND FUND
-------------------------------------------------------------------------
Year Ended September 30, January 27, 19971
------------------------------------------------- through
2000 1999 1998 September 30, 1997
---------------- -------------- --------------- ----------------------
PER SHARE DATA:
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD $9.86 $10.47 $10.18 $10.00
---------------- -------------- --------------- ----------------------
INCOME (LOSS) FROM INVESTMENT
OPERATIONS:
Net investment income 0.58 0.55 0.56 0.35
Net realized and unrealized gain (loss) on
investments (0.09) (0.57) 0.29 0.17
---------------- -------------- --------------- ----------------------
Total from investment operations 0.49 (0.02) 0.85 0.52
---------------- -------------- --------------- ----------------------
LESS DIVIDENDS AND DISTRIBUTIONS:
Dividends from net investment income (0.58) (0.55) (0.56) (0.34)
Distributions from net realized gains (0.00) (0.04)
- -
---------------- -------------- --------------- ----------------------
Total dividends and distributions (0.58) (0.59) (0.56) (0.34)
---------------- -------------- --------------- ----------------------
NET ASSET VALUE, END OF PERIOD $9.77 $9.86 $10.47 $10.18
================ ============== =============== ======================
TOTAL RETURN 5.19% (0.22)% 8.59% 5.33% 2
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of period $95,610,264 $91,988,144 $82,756,014 $73,683,643
Ratio of net expenses to average net assets 0.91% 0.90% 0.89% 1.01% 3
Ratio of net investment income to average
net assets 5.97% 5.44% 5.46% 5.60% 3
Portfolio turnover rate 49.79% 58.62% 66.66% 38.35%
1 COMMENCEMENT OF OPERATIONS.
2 NOT ANNUALIZED.
3 ANNUALIZED.
</TABLE>
SEE NOTES TO THE FINANCIAL STATEMENTS.
================================================================================
BREMER INVESTMENT FUNDS, INC.
================================================================================
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2000
GROWTH STOCK FUND
--------------------------------------------------------------------------------
SHARES VALUE
----------------------------------------------------------
COMMON STOCKS - 94.8%
----------------------------------------------------------
APPAREL - 2.7%
60,000 Abercrombie & Fitch Company * $ 1,143,750
30,000 The Gap, Inc. 603,750
42,000 Intimate Brands, Inc. 784,875
------------
2,532,375
------------
BANKING & FINANCIAL SERVICES - 9.1%
13,125 Banc One Corporation 506,953
37,500 The Charles Schwab Corporation 1,331,250
39,200 Citigroup Inc. 2,119,250
12,000 Fannie Mae 858,000
18,000 Freddie Mac 973,125
10,000 Providian Financial Corporation 1,270,000
30,800 Wells Fargo & Company 1,414,875
------------
8,473,453
------------
BUSINESS SERVICE - 5.9%
4,767 Agilent Technologies, Inc. * 233,285
33,800 Concord EFS, Inc. * 1,200,428
34,000 Equifax Inc. 915,875
29,700 FedEx Corporation * 1,316,898
19,000 First Data Corporation 742,188
24,200 Solectron Corporation* 1,116,225
------------
5,524,899
------------
CAPITAL GOODS - 9.7%
15,000 The Boeing Company 945,000
23,300 Dover Corporation 1,093,644
10,600 Emerson Electric Company 710,200
75,000 General Electric Company 4,326,563
38,700 Tyco International Ltd. 2,007,562
------------
9,082,969
------------
COMMUNICATIONS & MEDIA - 2.7%
34,500 The Interpublic Group of Companies, Inc. 1,175,156
22,785 Viacom Inc. - Class B * 1,332,923
------------
2,508,079
------------
COSMETICS & SOAP - 3.2%
20,000 Colgate-Palmolive Company 944,000
36,780 Kimberly-Clark Corporation 2,052,784
------------
2,996,784
------------
SEE NOTES TO THE FINANCIAL STATEMENTS.
================================================================================
BREMER INVESTMENT FUNDS, INC.
================================================================================
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2000 (CONTINUED)
GROWTH STOCK FUND
--------------------------------------------------------------------------------
SHARES VALUE
DRUGS - 2.6%
15,000 Merck & Company, Inc. $ 1,116,563
30,000 Pfizer Inc. 1,348,125
-----------
2,464,688
-----------
ENERGY - 6.7%
13,232 BP Amoco Plc ADR 701,296
35,000 El Paso Energy Corporation 2,156,875
26,800 Enron Corporation 2,348,350
11,881 Exxon Mobil Corporation 1,058,894
-----------
6,265,415
-----------
FOOD, BEVERAGE & TOBACCO - 2.0%
40,000 PepsiCo, Inc. 1,840,000
-----------
HEALTH CARE - 4.4%
20,000 Amgen Inc.* 1,396,562
40,332 Boston Scientific Corporation * 662,957
39,400 Medtronic, Inc. 2,041,413
-----------
4,100,932
-----------
INSURANCE - 4.2%
17,619 Aegon N.V. ADR 654,105
23,000 AFLAC Incorporated 1,473,437
18,750 American International Group, Inc. 1,794,141
-----------
3,921,683
-----------
RESTAURANT - 1.1%
34,000 McDonald's Corporation 1,026,375
-----------
RETAIL - GENERAL - 6.9%
7,000 Best Buy Co., Inc. * 445,375
23,000 CVS Corporation 1,065,188
60,000 Target Corporation 1,537,500
36,000 Wal-Mart Stores, Inc. 1,732,500
44,000 Walgreen Company 1,669,250
-----------
6,449,813
-----------
SOFTWARE - 12.8%
22,500 America Online, Inc. *
74,000 Cognos, Inc. * 1,209,375
34,741 Computer Associates International, Inc. 3,015,500
22,000 Microsoft Corporation * 875,039
115,000 Novell, Inc. * 1,326,875
55,000 Oracle Corporation * 1,142,812
4,331,250
-----------
11,900,851
-----------
SEE NOTES TO THE FINANCIAL STATEMENTS.
================================================================================
BREMER INVESTMENT FUNDS, INC.
================================================================================
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2000 (CONTINUED)
GROWTH STOCK FUND
--------------------------------------------------------------------------------
SHARES VALUE
TECHNOLOGY - 15.0%
55,000 American Power Conversion Corporation * $ 1,055,312
190,000 Atmel Corporation * 2,885,625
90,000 Cisco Systems, Inc. * 4,972,500
9,500 Hewlett-Packard Company 921,500
45,200 Intel Corporation 1,878,625
25,000 Lucent Technologies Inc. 764,063
15,000 Motorola, Inc. 423,750
20,000 Palm, Inc. * 1,058,750
-----------
13,960,125
-----------
TELECOMMUNICATIONS - 3.4%
41,000 American Telephone and Telegraph Corporation 1,204,375
31,500 MCI WorldCom, Inc. * 956,812
20,000 SBC Communications Inc. 1,000,000
-----------
3,161,187
-----------
TRAVEL & RECREATION - 2.4%
36,000 Carnival Corporation 886,500
35,000 The Walt Disney Company 1,338,750
-----------
2,225,250
-----------
88,434,878
-----------
TOTAL COMMON STOCKS
(COST OF $50,721,853)
PRINCIPAL
AMOUNT
----------------------------------------------------------
SHORT-TERM INVESTMENTS - 5.2%
----------------------------------------------------------
VARIABLE RATE DEMAND NOTES - 5.2%
$ 622,836 American Family Financial Services,
6.2352% ** 622,836
2,371,220 Sara Lee, 6.2200% ** 2,371,220
467,668 Wisconsin Corporate Central Credit
Union, 6.2900% ** 467,668
1,377,474 Wisconsin Electric Power Company, 6.2352% ** 1,377,474
-----------
4,839,198
-----------
TOTAL SHORT-TERM INVESTMENTS
(COST OF $4,839,198) 4,839,198
-----------
TOTAL INVESTMENTS - 100.0%
(COST OF $55,561,051) 93,274,076
-----------
Other liabilities in excess of assets - 0.0% (19,060)
-----------
TOTAL NET ASSETS - 100.0% $93,255,016
===========
* NON-INCOME PRODUCING SECURITY.
** VARIABLE RATE SECURITY. THE RATES LISTED ARE AS OF SEPTEMBER 30, 2000.
SEE NOTES TO THE FINANCIAL STATEMENTS.
================================================================================
BREMER INVESTMENT FUNDS, INC.
================================================================================
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2000
BOND FUND
--------------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
------------------------------------------------
LONG-TERM INVESTMENTS - 98.2%
------------------------------------------------
------------------------------------------------
CORPORATE BONDS & NOTES - 27.4%
------------------------------------------------
BANK & BANK HOLDING CO. - 3.3%
First Union National Bank - North Carolina##
$ 3,290,000 6.180%, 02/15/36 $ 3,110,254
------------
FINANCIAL SERVICES - 19.3%
Associates Corporation, N.A.
1,000,000 5.800%, 04/20/04 965,416
Associates Corporation, N.A.
1,000,000 6.250%, 11/01/08 939,518
Bear Stearns & Co. Inc.
1,000,000 6.875%, 10/01/05 982,821
Ford Capital B.V.
1,000,000 9.375%, 05/15/01 1,013,648
Ford Motor Credit Company
1,000,000 8.200%, 02/15/02 1,015,998
General Electric Capital Corporation
1,000,000 6.267%, 07/23/03 990,518
Goldman Sachs Group
2,475,000 7.200%, 11/01/06 2,424,510
Lehman Brothers Holdings, Inc.
2,500,000 8.250%, 06/15/07 2,591,265
Merrill Lynch & Company
2,000,000 6.000%, 02/17/09 1,834,470
Norwest Asset Securities Corporation#
1,300,000 7.000%, 06/25/12 1,279,180
Reliastar Financial Corporation
2,008,000 7.125%, 03/01/03 2,009,195
St. Paul Companies, Inc.
1,000,000 7.370%, 08/20/07 998,445
Salomon, Inc.
1,450,000 6.250%, 05/15/03 1,426,322
------------
18,471,306
------------
FOOD, BEVERAGE & TOBACCO - 1.2%
Supervalu, Inc.
1,250,000 6.560%, 06/09/05 1,193,705
------------
TELECOMMUNICATIONS - 1.5%
American Telephone and Telegraph Corporation#
1,500,000 5.625%, 03/15/04 1,434,437
------------
SEE NOTES TO THE FINANCIAL STATEMENTS.
================================================================================
BREMER INVESTMENT FUNDS, INC.
================================================================================
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2000 (CONTINUED)
BOND FUND
--------------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
TRAVEL AND ENTERTAINMENT - 2.1%
Hilton Hotels Corporation
$ 2,000,000 7.700%, 07/15/02 $ 1,995,598
------------
TOTAL CORPORATE BONDS & NOTES
(Cost of $26,626,415) 26,205,300
------------
------------------------------------------------
ASSET BACKED SECURITIES - 12.3%
------------------------------------------------
COLLATERALIZED AUTO LOAN OBLIGATIONS - 5.3%
Ford Credit Auto Owner Trust#
2,593,000 Series 1999-D, Class A5,
6.520%, 09/15/03 2,588,034
MMCA Automobile Trust#
1,000,000 Series 1999-2, Class A3, 7.000%,
05/15/04 1,006,915
Nissan Auto Receivables Owner Trust#
1,500,000 Series 2000-B, Class A4,
7.270%, 11/15/04 1,521,622
------------
5,116,571
------------
COLLATERALIZED CREDIT CARD
OBLIGATIONS - 7.0%
Citibank Credit Card Master Trust I#
1,250,000 Series 1998-3, Class A, 5.800%,
02/07/05 1,226,094
Dayton Hudson Credit Card Master
Trust#
1,000,000 Series 1997-1, Class A, 6.250%,
08/25/05 991,755
First Bank Corporate Card Master
Trust#
1,110,000 Series 1997-1, Class A, 6.400%,
02/15/03 1,105,288
Metris Master Trust#
1,250,000 Series 1997-1, Class A, 6.870%,
10/20/05 1,254,731
Providian Master Trust#
2,100,000 Series 1999-2, Class A, 6.600%,
04/16/07 2,097,134
-------------
6,675,002
-------------
TOTAL ASSET BACKED SECURITIES
(Cost of $11,664,808) 11,791,573
------------
SEE NOTES TO THE FINANCIAL STATEMENTS.
================================================================================
BREMER INVESTMENT FUNDS, INC.
================================================================================
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2000 (CONTINUED)
BOND FUND
--------------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
------------------------------------------------
NON-AGENCY MORTGAGE-BACKED
SECURITIES - 4.8%
------------------------------------------------
COLLATERALIZED MORTGAGE OBLIGATIONS - 4.8%
Chemical Mortgage Securities, Inc.#
$ 1,127,000 Series 1994-1, Class A7, 6.250%,
01/25/09 $ 1,102,925
Countrywide Mortgage Backed Securities, Inc.#
1,385,064 Series 1994-D, Class A9, 6.500%,
03/25/24 1,326,779
DLJ Mortgage Acceptance Corporation#
2,200,000 Series 1998-2, Class 2A10, 7.000%,
06/25/28 2,125,200
------------
4,554,904
------------
TOTAL NON- AGENCY MORTGAGE-BACKED
SECURITIES
(Cost of $4,714,821) 4,554,904
------------
------------------------------------------------
U.S. GOVERNMENT AGENCY AND
AGENCY-BACKED ISSUES - 33.9%
------------------------------------------------
Federal Farm Credit Bank
1,000,000 7.000%, 07/19/06# 995,774
2,100,000 6.370%, 10/30/07 2,055,287
-----------
3,051,061
-----------
Federal Home Loan Bank
1,000,000 6.000%, 07/21/03# 982,524
2,000,000 6.645%, 08/02/04# 1,985,506
1,250,000 6.150%, 10/14/04 1,233,960
2,000,000 7.125%, 02/15/05 2,044,768
1,000,000 6.375%, 08/15/06 989,050
1,750,000 6.120%, 08/26/08# 1,651,447
1,390,000 5.755%, 11/20/08# 1,283,133
-----------
10,170,388
-----------
Federal Home Loan Mortgage Corporation (FHLMC),
Participation Certificates
502,646 Pool #G40376, 6.000%, 06/01/01 497,677
1,177,185 Pool #C90290, 7.000%, 08/01/19 1,164,805
-----------
1,662,482
-----------
Federal Home Loan Mortgage Corporation (FHLMC),
290,835 Adjustable Rate Mortgage, Pool #845864,
8.349%*, 07/01/24 294,843
------------
SEE NOTES TO THE FINANCIAL STATEMENTS.
================================================================================
BREMER INVESTMENT FUNDS, INC.
================================================================================
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2000 (CONTINUED)
BOND FUND
--------------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
Federal Home Loan Mortgage Corporation (FHLMC),
Real Estate Mortgage Investment Conduits
(REMIC)
$1,065,791 Series 1769, Class A, 6.500%,
05/15/08 $ 1,055,107
600,000 Series 1480, Class LE, 6.500%,
07/15/08 573,885
2,250,000 7.625%, 09/09/09# 2,238,734
500,000 Series 24, Class VB, 6.500%, 7/25/10 481,972
------------
4,349,698
------------
Federal National Mortgage Association (FNMA),
Pass-Thru Certificates
2,005,838 Pool #303922, 6.000%, 05/01/16 1,899,529
1,167,080 Pool #323380, 6.500%, 10/01/28 1,121,852
169,905 Pool #211830, 7.000%, 04/01/23 167,899
------------
3,189,280
------------
Federal National Mortgage Association (FNMA),
Real Estate Mortgage Investment Conduits
(REMIC)
500,000 Series 1993-134, Class L, 6.500%, 486,411
08/25/08
391,030 Series 1989-69, Class C, 7.600%, 394,430
10/25/19
287,371 Series 1992-125, Class J, 6.500%, 285,348
05/25/21
92,877 Series 1992-150, Class FV, 6.357%*, 92,413
05/25/21
2,100,000 Series 1993-38, Class V, 5.757%, 1,973,260
08/25/21
575,000 Series 1993-167, Class J, 6.750%, 557,109
12/25/22
1,451,867 Series 1998-50, Class DN, 6.250%, 1,405,287
09/25/28
682,117 Series 1998-50, Class EN, 6.500%, 644,597
09/25/28 -------------
5,838,855
-------------
Government National Mortgage Association (GNMA),
1,432,613 Pool #521580, 7.000%, 11/15/14 1,436,862
1,312,699 Pool #520754, 7.000%, 07/15/15 1,315,612
1,053,720 Pool #520763, 7.000%, 07/15/15 1,056,058
57,536 Adjustable Rate Mortgages, Pool
#859287, 6.750%*, 07/20/26 58,300
-------------
3,866,832
-------------
TOTAL U.S. GOVERNMENT AGENCY AND
AGENCY-BACKED ISSUES
(Cost of $33,005,066) 32,423,439
-------------
SEE NOTES TO THE FINANCIAL STATEMENTS.
================================================================================
BREMER INVESTMENT FUNDS, INC.
================================================================================
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2000 (CONTINUED)
BOND FUND
--------------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
------------------------------------------------
U.S. TREASURY OBLIGATIONS - 19.8%
------------------------------------------------
U.S. Treasury Notes
$ 1,500,000 5.750%, 10/31/02 $ 1,493,437
1,500,000 7.250%, 05/15/04 1,564,220
6,000,000 6.500%, 08/15/05 6,153,750
1,500,000 6.250%, 02/15/07 1,524,844
1,000,000 5.500%, 02/15/08 974,375
-------------
11,710,626
-------------
U.S. Treasury Bonds
6,500,000 10.750%, 05/15/03 7,239,375
-------------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost of $19,211,422) 18,950,001
-------------
TOTAL LONG-TERM INVESTMENTS
(COST OF $95,222,532) 93,925,217
-------------
------------------------------------------------
SHORT-TERM INVESTMENTS - 1.1%
------------------------------------------------
------------------------------------------------
VARIABLE RATE DEMAND NOTES - 1.1%
------------------------------------------------
55,011 American Family Financial Services,
6.2352% * 55,011
476,113 Sara Lee, 6.2200% * 476,113
469,885 Wisconsin Corporate Central Credit
Union, 6.2900% * 469,885
-------------
TOTAL VARIABLE RATE DEMAND NOTES
(Cost of $1,001,009) 1,001,009
-------------
TOTAL SHORT-TERM INVESTMENTS
(COST OF $1,001,009) 1,001,009
-------------
TOTAL INVESTMENTS - 99.3%
(COST OF $96,223,541) 94,926,226
-------------
Other assets in excess of
liabilities - 0.7% 684,038
-------------
TOTAL NET ASSETS - 100.0% $ 95,610,264
=============
# CALLABLE.
## PUTABLE.
* VARIABLE RATE SECURITY. THE RATES LISTED ARE AS OF SEPTEMBER 30,
2000.
SEE NOTES TO THE FINANCIAL STATEMENTS.
================================================================================
BREMER INVESTMENT FUNDS, INC.
================================================================================
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2000
--------------------------------------------------------------------------------
1. ORGANIZATION
Bremer Investment Funds, Inc. (the "Company") was incorporated on August 26,
1996, as a Maryland Corporation and is registered as an open-end management
investment company under the Investment Company Act of 1940. The Bremer
Growth Stock Fund and the Bremer Bond Fund (collectively the "Funds") are
separate, diversified investment portfolios of the Company. The principal
investment objective of the Growth Stock Fund is long-term appreciation of
capital. Dividend income, if any, is a secondary consideration. The principal
investment objective of the Bond Fund is to maximize total return. In
addition to the Funds, the Company offers the Legacy Minnesota Municipal Bond
Fund. This report contains the information of all portfolios, except for the
Legacy Minnesota Municipal Bond Fund. Information with respect to this
portfolio 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. The Investment Adviser held
one share of the Growth Stock Fund capital stock and 9,999 shares of the Bond
Fund capital stock at $10 per share on January 15, 1997. The Funds commenced
operations on January 27, 1997.
The costs incurred in connection with the organization, initial registration
and public offering of shares, aggregating $27,332 and $27,332 for the Growth
Stock Fund and Bond Fund, respectively, were paid by the Funds. These costs
are being amortized over the period of benefit, but not to exceed sixty
months from the Funds' commencement of operations.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements. These
policies are in conformity with accounting principles generally accepted in
the United States.
a) INVESTMENT VALUATION - Securities that are listed on a securities
exchange are valued at the last quoted sales price on the day the
valuation is made. Price information on listed stocks is taken from the
exchange where the security is primarily traded. Securities which are
listed on an exchange but which are not traded on the valuation date are
valued at the mean between the latest bid and asked prices. Unlisted
securities for which market quotations are readily available are valued
at the last sale price, or if no sale, at the mean between the latest bid
and asked price. Other assets and securities for which no quotations are
readily available are valued at fair value as determined 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 Funds have complied to date with the provisions of the
Internal Revenue Code applicable to regulated investment companies and
intend 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 - Each 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 a 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 Funds are charged for those expenses that are
directly attributable to each 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 Growth Stock Fund are declared and paid annually. Dividends from the
net investment income of the Bond Fund are declared daily and paid
monthly. Distributions of the Funds' net realized capital gains, if any,
will be declared at least annually. The character of distributions made
during the period from net investment income or net realized gains may
differ from the characterization for federal income tax purposes due to
differences in the recognition between income, expense and gain items for
financial statement purposes. Where appropriate, reclassifications
between net asset accounts are made for such differences that are
permanent in nature. Accordingly, at September 30, 2000,
reclassifications were recorded in the Growth Stock Fund to increase
accumulated net investment income by $25,633, decrease accumulated net
realized gains by $8,441, and decrease paid in capital by $17,192.
Additionally, reclassifications were made in the Bond Fund to decrease
accumulated net investment income by $35,519, decrease accumulated net
realized losses on investments by $446 and increase paid in capital by
$35,073.
f) USE OF ESTIMATES - The preparation of financial statements in conformity
with accounting principles generally accepted in the United States
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 Funds determine 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 Funds, and interest
income is recognized on an accrual basis. Accounting principles generally
accepted in the United States require that permanent financial reporting
and tax differences be reclassified to capital stock.
3. CAPITAL SHARE TRANSACTIONS
Transactions in shares of the Funds for the year ended September 30, 2000,
were as follows:
GROWTH FUND BOND FUND
Shares sold 1,816,348 3,042,598
Shares issued
to holders in
reinvestment of
dividends 18,327 33,677
Shares redeemed (970,111) (2,622,447)
------------------ -----------------
Net increase 864,564 453,828
================== =================
Transactions in shares of the Funds for the year ended September 30, 1999,
were as follows:
GROWTH FUND BOND FUND
Shares sold 1,010,029 3,087,449
Shares issued
to holders in
reinvestment of
dividends 11,219
771
Shares redeemed (1,143,764) (1,670,078)
------------------ -----------------
Net increase
(decrease) (132,964) 1,428,590
================== =================
4. INVESTMENT TRANSACTIONS
The aggregate purchases and sales of investments, excluding short-term
investments, by the Funds for the year ended September 30, 2000, were as
follows:
GROWTH FUND BOND FUND
Purchases
U.S. Government $ 132,195 $ 26,128,065
Other 18,768,822 26,532,075
Sales
U.S. Government 0 32,807,693
Other 9,260,554 11,426,359
During the year ended September 30, 2000, written option activity in the
Growth Stock Fund was as follows:
NUMBER OF
CONTRACTS PREMIUM
Outstanding at
beginning of period 100 $10,301
Options expired (100) (10,301)
---------------- -----------
Outstanding at 0 $ 0
end of period ================ ============
At September 30, 2000, gross unrealized appreciation and depreciation of
investments for tax purposes were as follows:
GROWTH FUND BOND FUND
----------- ---------
Appreciation $42,144,912 $ 495,496
Depreciation (4,431,887) (1,832,577)
--------------- ---------------
Net appreciation
(depreciation) on
investments $37,713,025 $ (1,337,081)
=============== ===============
At September 30, 2000, the cost of investments for federal income tax
purposes was $55,561,051 and $96,263,307 for the Growth Stock Fund and Bond
Fund, respectively.
At September 30, 2000, the Bond Fund had accumulated net realized capital
loss carryovers of $96,775 expiring in 2008.
5. INVESTMENT ADVISORY AND OTHER AGREEMENTS
The Funds have 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 Funds, the Investment Adviser is
entitled to receive a fee, calculated daily and payable monthly, at the
annual rate of 0.70% as applied to the Funds' daily net assets.
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 Funds.
The Funds have adopted a written plan of distribution (the "Plan") in
accordance with Rule 12b-1 under the Investment Company Act of 1940. On
November 24, 1998, the Funds entered into an agreement with Rafferty Capital
Markets, Inc. to distribute the Funds' shares. 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. The currently
approved rate for the Growth Stock Fund is an annual rate of 0.02% of its
average daily net assets; the currently approved rate for the Bond Fund is
an annual rate of 0.015% of its 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 year ended September 30, 2000,
$11,532 and $10,619 was incurred pursuant to the distribution agreement by
the Growth Stock Fund and Bond Fund, respectively.
6. DISTRIBUTIONS
One-hundred percent of the dividends paid by the Growth Stock Fund during
the fiscal year-ended September 30, 2000, qualifies for the dividend
received deduction available to corporate shareholders.
7. RELATED PARTIES
Bremer Trust, N.A. clients and Bremer Trust, N.A. affiliated clients
held 4,945,878 and 9,758,865 outstanding shares of the Growth Stock Fund and
the Bond Fund, respectively, as of September 30, 2000.
--------------------------------------------------------------------------------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of the Bremer Investment Funds, Inc.
and the Shareholders of the Bremer Growth Stock Fund and the Bremer Bond Fund:
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments, of the Bremer Growth Stock Fund and the Bremer
Bond Fund (two of the portfolios constituting the Bremer Investment Funds, Inc.,
a Maryland corporation) as of September 30, 2000, and the related statements of
operations for the year then ended, the statement of changes in net assets for
each of the two years in the period then ended, and the financial highlights for
the periods indicated. These financial statements and financial highlights are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights. Our procedures included
confirmation of securities owned as of September 30, 2000, by correspondence
with the custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Bremer Growth Stock Fund and the Bremer Bond Fund of the Bremer Investment
Funds, Inc. as of September 30, 2000, and the results of their operations for
the year then ended, the changes in their net assets for each of the two years
in the period then ended, and their financial highlights for the periods
indicated, in conformity with accounting principles generally accepted in the
United States.
/s/Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Milwaukee, Wisconsin
October 23, 2000
INVESTMENT ADVISER
Bremer Trust, N.A.
Cold Spring Center
4150 Second Street South
St. Cloud, Minnesota 56302-0986
ADMINISTRATOR, DIVIDEND PAYING AGENT,
SHAREHOLDERS' SERVICING AGENT
AND TRANSFER AGENT
Firstar Mutual Fund Services, LLC
615 East Michigan Street
Milwaukee, Wisconsin 53202
CUSTODIAN
Firstar Bank, N.A.
615 East Michigan Street
Milwaukee, Wisconsin 53202
COUNSEL
Briggs and Morgan
2400 IDS Center
80 South Eighth Street
Minneapolis, Minnesota 55402
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP
100 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
DISTRIBUTOR
Rafferty Capital Markets, Inc.
1311 Mamaroneck Avenue
White Plains, New York 10605
DIRECTORS
Steven A. Laraway
Stan K. Dardis
John M. Bishop
John J. Feda
Barbara A. Grachek
