DECEMBER 1, 1999
AS SUPPLEMENTED
FEBRUARY 1, 2000
ASSET CLASSES
* EQUITY FUNDS
* FUNDS OF FUNDS
* BOND FUNDS
* TAX FREE BOND FUNDS
(*) MONEY MARKET FUNDS
PROSPECTUS
FIRST AMERICAN FUNDS, INC.
FIRST AMERICAN
MONEY MARKET
FUNDS
CLASS A, CLASS B,
AND CLASS C SHARES
GOVERNMENT OBLIGATIONS FUND
PRIME OBLIGATIONS FUND
TAX FREE OBLIGATIONS FUND
TREASURY OBLIGATIONS FUND
AS WITH ALL MUTUAL FUNDS, THE SECURITIES AND EXCHANGE COMMISSION HAS NOT
APPROVED OR DISAPPROVED THE SHARES OF THESE FUNDS, OR DETERMINED IF THE
INFORMATION IN THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANY STATEMENT TO THE
CONTRARY IS A CRIMINAL OFFENSE.
[LOGO] FIRST AMERICAN FUNDS(R)
THE POWER OF DISCIPLINED INVESTING(R)
<PAGE>
Table of
CONTENTS
FUND SUMMARIES
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Government Obligations Fund 2
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Prime Obligations Fund 4
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Tax Free Obligations Fund 6
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Treasury Obligations Fund 8
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POLICIES & SERVICES
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Buying Shares 10
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Selling Shares 13
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Managing Your Investment 14
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ADDITIONAL INFORMATION
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Management 16
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More About The Funds 17
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Financial Highlights 18
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FOR MORE INFORMATION Back Cover
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<PAGE>
Fund Summaries
INTRODUCTION
This section of the prospectus describes the objectives of the First American
Money Market Funds, summarizes the main investment strategies used by each fund
in trying to achieve its objectives, and highlights the risks involved with
these strategies. It also provides you with information about the performance,
fees, and expenses of the funds.
AN INVESTMENT IN THE FUNDS IS NOT A DEPOSIT OF U.S. BANK NATIONAL ASSOCIATION
AND IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR
ANY OTHER GOVERNMENT AGENCY. ALTHOUGH THE FUNDS SEEK TO PRESERVE THE VALUE OF
YOUR INVESTMENT AT $1.00 PER SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN
THE FUNDS.
1
PROSPECTUS - First American Money Market Funds
Class A, Class B, and Class C Shares
<PAGE>
Fund Summaries
GOVERNMENT OBLIGATIONS FUND
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OBJECTIVE
Government Obligations Fund seeks maximum current income to the extent
consistent with the preservation of capital and maintenance of liquidity.
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MAIN INVESTMENT STRATEGIES
Government Obligations Fund invests exclusively in short-term U.S. government
securities and repurchase agreements secured by U.S. government securities.
U.S. government securities are bonds or other debt obligations issued or
guaranteed as to principal and interest by the U.S. government or one of its
agencies or instrumentalities. U.S. Treasury securities and some obligations of
U.S. government agencies and instrumentalities are supported by the "full faith
and credit" of the United States government. Other U.S. government securities
are backed by the right of the issuer to borrow from the U.S. Treasury. Still
others are supported only by the credit of the issuer or instrumentality.
When selecting securities for the fund, the portfolio managers use a "top-down"
approach, looking first at general economic factors and market conditions, then
at individual securities.
To generate additional income, the fund may lend securities representing up to
one-third of the value of its total assets to broker-dealers, banks, and other
institutions.
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MAIN RISKS
The main risks of investing in this fund include:
* Although the fund seeks to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in the fund. A major change
in interest rates or a default on a security or repurchase agreement held by
the fund, or a securities lending agreement entered into by the fund, could
cause the value of your investment to decline.
* The level of income you receive from the fund will be affected by movements in
short-term interest rates.
* By investing solely in U.S. government securities and repurchase agreements
secured by those securities, the fund may offer less income than a money
market fund investing in other high-quality money market securities.
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FUND PERFORMANCE
Illustrations on the next page provide you with information on the fund's
volatility and performance. Of course, past performance does not guarantee
future results.
The bar chart shows you how performance of the fund's shares has varied from
year to year. The table illustrates the fund's average annual total returns over
different time periods. Both the chart and the table assume that all
distributions have been reinvested.
Information in the bar chart and the table is for the fund's Class Y shares,
which are offered through another prospectus. Class A shares commenced
operations on April 29, 1998. The classes will have substantially similar
returns, because they are invested in the same portfolio of securities. However,
Class A share returns will be lower because these shares have higher expenses.
2
PROSPECTUS - First American Money Market Funds
Class A, Class B, and Class C Shares
<PAGE>
Fund Summaries
GOVERNMENT OBLIGATIONS FUND CONTINUED
- --------------------------------------------------------------------------------
FUND PERFORMANCE (CONTINUED)
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR(1)
[BAR CHART]
5.56% 3.34% 2.89% 4.00% 5.69% 5.13% 5.26% 5.15%
- -------------------------------------------------------------------
1991 1992 1993 1994 1995 1996 1997 1998
Best Quarter: Quarter ending March 31, 1991 1.53%
Worst Quarter: Quarter ending June 30, 1993 0.71%
AVERAGE ANNUAL TOTAL RETURNS Inception Since
AS OF 12/31/98 Date One Year Five Years Inception
- --------------------------------------------------------------------------------
Government Obligations Fund (Class Y) 3/1/90 5.15% 5.04% 4.92%
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(1) Total return for the period from 12/31/98 to 9/30/99 was 3.46%.
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FEES AND EXPENSES
The fund does not impose any sales charges (loads) or other fees when you buy,
sell or exchange shares. However, when you hold shares of the fund you
indirectly pay a portion of the fund's operating expenses. These expenses are
deducted from fund assets. The figures below are based on expenses during the
fiscal year ended September 30, 1999.(1)
CLASS A
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SHAREHOLDER FEES
- --------------------------------------------------------------------------------
MAXIMUM SALES CHARGE (LOAD) None
MAXIMUM DEFERRED SALES CHARGE (LOAD) None
ANNUAL MAINTENANCE FEE(2)
ONLY CHARGED TO ACCOUNTS WITH BALANCES BELOW $500 $25
ANNUAL FUND OPERATING EXPENSES AS A % OF AVERAGE NET ASSETS
- --------------------------------------------------------------------------------
Management Fees 0.40%
Distribution and Service (12b-1) Fees 0.25%
Other Expenses 0.17%
TOTAL 0.82%
- --------------------------------------------------------------------------------
(1) Actual expenses for the fiscal year were lower than those shown in the table
because of voluntary fee waivers by the advisor. See "Additional Information --
Financial Highlights" for effective management fees after waivers. The net
expenses the fund actually paid after waivers for the fiscal year ended
September 30, 1999, were:
Waiver of Fund Expenses (0.07)%
TOTAL ACTUAL ANNUAL OPERATING EXPENSES (AFTER WAIVERS) 0.75%
THE ADVISOR INTENDS TO WAIVE FEES DURING THE CURRENT FISCAL YEAR SO THAT TOTAL
FUND OPERATING EXPENSES DO NOT EXCEED 0.77%. FEE WAIVERS MAY BE DISCONTINUED AT
ANY TIME.
(2) The Fund reserves the right to charge your account an annual maintenance fee
of $25 if your balance falls below $500 as a result of selling or exchanging
shares. See "Policies & Services -- Selling Shares, Accounts with Low Balances."
- --------------------------------------------------------------------------------
EXAMPLE This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 for the time periods indicated, that your investment has a 5%
return each year, and that the fund's operating expenses remain the same.
Although your actual costs and returns may differ, based on these assumptions
your costs would be:
- --------------------------------------------------------------------------------
1 year $ 84
3 years $ 262
5 years $ 455
10 years $1,014
3
PROSPECTUS - First American Money Market Funds
Class A, Class B, and Class C Shares
<PAGE>
Fund Summaries
PRIME OBLIGATIONS FUND
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OBJECTIVE
Prime Obligations Fund seeks maximum current income to the extent consistent
with preservation of capital and maintenance of liquidity.
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MAIN INVESTMENT STRATEGIES
Prime Obligations Fund invests in high-quality short-term debt obligations,
including:
* securities issued by the U.S. government or one of its agencies or
instrumentalities.
* U.S. dollar-denominated obligations of domestic and foreign banks with total
assets of at least $500 million (including fixed and variable rate
certificates of deposit, time deposits and bankers' acceptances).
* commercial paper.
* non-convertible corporate debt securities.
* loan participation interests.
* repurchase agreements for the securities in which the fund may invest.
When selecting securities for the fund, the portfolio managers use a "top-down"
approach, looking first at general economic factors and market conditions, then
at individual securities.
The fund may invest up to 25% of its total assets in dollar-denominated
obligations of U.S. branches of foreign banks which are subject to the same
regulation as U.S. banks. The fund also may invest up to 25% of its total
assets, collectively, in dollar-denominated obligations of foreign branches of
domestic banks, foreign banks, and foreign corporations.
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MAIN RISKS
The main risks of investing in this fund include:
* Although the fund seeks to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in the fund. A major change
in interest rates or a default on a security or repurchase agreement held by
the fund could cause the value of your investment to decline.
* The level of income you receive from the fund will be affected by movements in
short-term interest rates.
* Foreign securities in which the fund invests, although dollar denominated, may
present some additional risk. Political or social instability, or diplomatic
developments could adversely affect the securities. There is also the risk of
possible withholding taxes, seizure of foreign deposits, currency controls,
interest limitations, or other governmental restrictions which might affect
the payment of principal or interest on securities owned by the fund. In
addition, there may be less public information available about foreign
corporations and foreign banks and their branches.
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FUND PERFORMANCE
Illustrations on the next page provide you with information on the fund's
volatility and performance. Of course, past performance does not guarantee
future results.
The bar chart shows you how performance of the fund's Class A shares has varied
from year to year. The performance of Class B and Class C shares will be lower
due to their higher expenses. The table illustrates the fund's average annual
total returns over different time periods. Because Class C shares have not been
offered for a full calendar year, no performance information is presented in the
table. Both the chart and the table assume that all distributions have been
reinvested.
4
PROSPECTUS - First American Money Market Funds
Class A, Class B, and Class C Shares
<PAGE>
Fund Summaries
PRIME OBLIGATIONS FUND CONTINUED
- --------------------------------------------------------------------------------
FUND PERFORMANCE (CONTINUED)
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR(1)
[BAR CHART]
4.97% 5.12% 5.04%
- ----------------------
1996 1997 1998
Best Quarter: Quarter ending December 31, 1997 1.29%
Worst Quarter: Quarter ending December 31, 1998 1.18%
AVERAGE ANNUAL TOTAL RETURNS Inception Since
AS OF 12/31/98 Date One Year Inception
- --------------------------------------------------------------------------------
Prime Obligations Fund (Class A) 1/21/95 5.04% 5.16%
- --------------------------------------------------------------------------------
Prime Obligations Fund (Class B) 1/23/95 4.28% 4.38%
- --------------------------------------------------------------------------------
(1) Total return for the period from 12/31/98 to 9/30/99 was 3.29%.
- --------------------------------------------------------------------------------
FEES AND EXPENSES
As an investor, you pay fees and expenses to buy and hold shares of the fund.
You pay shareholder fees directly when you buy or sell shares. You pay annual
fund operating expenses indirectly since they are deducted from fund assets. The
figures below are based on fund expenses during the fiscal year ended September
30, 1999.(1)
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
- -------------------------------------------------------------------------------------------
SHAREHOLDER FEES
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MAXIMUM SALES CHARGE (LOAD) None None None
MAXIMUM DEFERRED SALES CHARGE (LOAD) None 5.00%(2) 1.00%(2)
ANNUAL MAINTENANCE FEE(3)
ONLY CHARGED TO ACCOUNTS WITH BALANCES BELOW $500 $25 $25 $25
ANNUAL FUND OPERATING EXPENSES AS A % OF AVERAGE NET ASSETS
- -------------------------------------------------------------------------------------------
Management Fees 0.40% 0.40% 0.40%
Distribution and Service (12b-1) Fees 0.25% 1.00% 1.00%
Other Expenses 0.22% 0.11% 0.11%
TOTAL 0.87% 1.51% 1.51%
- -------------------------------------------------------------------------------------------
</TABLE>
(1) Actual expenses for the fiscal year were lower than those shown in the table
because of voluntary fee waivers by the advisor. See "Additional Information --
Financial Highlights" for effective management fees after waivers. The net
expenses the fund actually paid after waivers for the fiscal year ended
September 30, 1999, were:
<TABLE>
<S> <C> <C> <C>
Waiver of Fund Expenses (0.07)% (0.06)% (0.06)%
TOTAL ACTUAL ANNUAL OPERATING EXPENSES (AFTER WAIVERS) 0.80% 1.45% 1.45%
</TABLE>
THE ADVISOR INTENDS TO WAIVE FEES DURING THE CURRENT FISCAL YEAR SO THAT TOTAL
FUND OPERATING EXPENSES DO NOT EXCEED 0.81%, 1.45% AND 1.45%, RESPECTIVELY, FOR
CLASS A, CLASS B AND CLASS C SHARES. FEE WAIVERS MAY BE DISCONTINUED AT ANY
TIME.
(2) Class B and Class C shares generally are available only in exchange for
Class B or Class C shares, respectively, of another First American fund. The
contingent deferred sales charge imposed when you sell your Class B or Class C
shares of Prime Obligations Fund will be based on the date you purchased shares
of the original First American fund.
(3) The Fund reserves the right to charge your account an annual maintenance fee
of $25 if your balance falls below $500 as a result of selling or exchanging
shares. See "Policies & Services -- Selling Shares, Accounts with Low Balances."
- --------------------------------------------------------------------------------
EXAMPLE This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 for the time periods indicated, that your investment has a 5%
return each year, and that the fund's operating expenses remain the same.
Although your actual costs and returns may differ, based on these assumptions
your costs would be:
<TABLE>
<CAPTION>
CLASS B CLASS B CLASS C CLASS C
assuming redemption assuming no redemption assuming redemption assuming no redemption
CLASS A at end of each period at end of each period at end of each period at end of each period
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 year $ 89 $ 654 $ 154 $ 352 $ 252
3 years $ 278 $ 877 $ 477 $ 572 $ 572
5 years $ 482 $1,024 $ 824 $ 915 $ 915
10 years $1,073 $1,629 $1,629 $1,884 $1,884
</TABLE>
5
PROSPECTUS - First American Money Market Funds
Class A, Class B, and Class C Shares
<PAGE>
Fund Summaries
TAX FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
OBJECTIVE
Tax Free Obligations Fund seeks maximum current income exempt from federal
income taxes consistent with the preservation of capital and maintenance of
liquidity.
- --------------------------------------------------------------------------------
MAIN INVESTMENT STRATEGIES
Tax Free Obligations Fund invests at least 80% of its total assets in
high-quality, short-term municipal securities that pay interest that is exempt
from federal income tax, including the federal alternative minimum tax.
Municipal securities are issued by state and local governments, and certain U.S.
territorial possessions to finance public infrastructure projects such as
streets and highways, schools, water and sewer systems, hospitals, and airports.
They also may be issued to refinance outstanding obligations as well as to
obtain funds for general operating expenses and for loans to other public
institutions and facilities. There are two principal classifications of
municipal securities:
* general obligation bonds, which are backed by the full faith, credit, and
taxing power of the issuer.
* revenue bonds, which are payable only from the revenues generated by a
specific project or from another specific revenue source.
The balance of the fund's total assets may be invested in taxable money market
securities and municipal securities subject to the alternative minimum tax.
However, the fund currently does not intend to invest in these types of
securities.
When selecting securities for the fund, the portfolio managers use a "top-down"
approach, looking first at general economic factors and market conditions, then
at individual securities.
- --------------------------------------------------------------------------------
MAIN RISKS
The main risks of investing in this fund include:
* Although the fund seeks to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in the fund. A major change
in interest rates or a default on a security or repurchase agreement held by
the fund could cause the value of your investment to decline.
* The level of income you receive from the fund will be affected by movements in
short-term interest rates.
* The value of municipal securities owned by the fund may be adversely affected
by future changes in federal income tax laws, including rate reductions or the
imposition of a flat tax.
- --------------------------------------------------------------------------------
FUND PERFORMANCE
Illustrations on the next page provide you with information on the fund's
volatility and performance. Of course, past performance does not guarantee
future results.
The bar chart shows you how performance of the fund's shares has varied from
year to year. The table illustrates the fund's average annual total returns over
different time periods. Both the chart and the table assume that all
distributions have been reinvested.
6
PROSPECTUS - First American Money Market Funds
Class A, Class B, and Class C Shares
<PAGE>
Fund Summaries
TAX FREE OBLIGATIONS FUND CONTINUED
- --------------------------------------------------------------------------------
FUND PERFORMANCE (CONTINUED)
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR(1)
[BAR CHART]
2.65% 2.87% 2.85%
- ----------------------
1996 1997 1998
Best Quarter: Quarter ending June 30, 1998 0.77%
Worst Quarter: Quarter ending September 30, 1996 0.63%
AVERAGE ANNUAL TOTAL RETURNS Inception Since
AS OF 12/31/98(2) Date One Year Inception
- --------------------------------------------------------------------------------
Tax Free Obligations Fund (Class A) 1/9/95 2.85% 2.85%
- --------------------------------------------------------------------------------
(1) Total return for the period from 12/31/98 to 9/30/99 was 1.84%.
(2) Performance prior to 11/25/97 is that of Qualivest Tax-Free Money Market
Fund.
- --------------------------------------------------------------------------------
FEES AND EXPENSES
The fund does not impose any sales charges (loads) or other fees when you buy,
sell or exchange shares. However, when you hold shares of the fund you
indirectly pay a portion of the fund's operating expenses. These expenses are
deducted from fund assets. The figures below are based on expenses during the
fiscal year ended September 30, 1999.(1)
CLASS A
- --------------------------------------------------------------------------------
SHAREHOLDER FEES
- --------------------------------------------------------------------------------
MAXIMUM SALES CHARGE (LOAD) None
MAXIMUM DEFERRED SALES CHARGE (LOAD) None
ANNUAL MAINTENANCE FEE(2)
ONLY CHARGED TO ACCOUNTS WITH BALANCES BELOW $500 $25
ANNUAL FUND OPERATING EXPENSES AS A % OF AVERAGE NET ASSETS
- --------------------------------------------------------------------------------
Management Fees 0.40%
Distribution and Service (12b-1) Fees 0.25%
Other Expenses 0.17%
TOTAL 0.82%
- --------------------------------------------------------------------------------
(1) Actual expenses for the fiscal year were lower than those shown in the table
because of voluntary fee waivers by the advisor. See "Additional Information --
Financial Highlights" for effective management fees after waivers. The net
expenses the fund actually paid after waivers for the fiscal year ended
September 30, 1999, were:
Waiver of Fund Expenses (0.08)%
TOTAL ACTUAL ANNUAL OPERATING EXPENSES (AFTER WAIVERS) 0.74%
THE ADVISOR INTENDS TO WAIVE FEES DURING THE CURRENT FISCAL YEAR SO THAT TOTAL
FUND OPERATING EXPENSES DO NOT EXCEED 0.75%. FEE WAIVERS MAY BE DISCONTINUED AT
ANY TIME.
(2) The Fund reserves the right to charge your account an annual maintenance fee
of $25 if your balance falls below $500 as a result of selling or exchanging
shares. See "Policies & Services -- Selling Shares, Accounts with Low Balances."
- --------------------------------------------------------------------------------
EXAMPLE This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 for the time periods indicated, that your investment has a 5%
return each year, and that the fund's operating expenses remain the same.
Although your actual costs and returns may differ, based on these assumptions
your costs would be:
- --------------------------------------------------------------------------------
1 year $ 84
3 years $ 262
5 years $ 455
10 years $1,014
7
PROSPECTUS - First American Money Market Funds
Class A, Class B, and Class C Shares
<PAGE>
Fund Summaries
TREASURY OBLIGATIONS FUND
- --------------------------------------------------------------------------------
OBJECTIVE
Treasury Obligations Fund seeks maximum current income consistent with the
preservation of capital and maintenance of liquidity.
- --------------------------------------------------------------------------------
MAIN INVESTMENT STRATEGIES
Treasury Obligations Fund invests exclusively in short-term U.S. Treasury
obligations and repurchase agreements secured by U.S. Treasury obligations. The
U.S. Treasury obligations in which the fund invests include U.S. Treasury bonds,
notes, and bills. These types of Treasury securities are essentially the same
except for differences in interest rates, maturities, and dates of issuance.
U.S. Treasury obligations are backed by the full faith and credit of the United
States government.
When selecting securities for the fund, the portfolio managers use a "top-down"
approach, looking first at general economic factors and market conditions, then
at individual securities.
- --------------------------------------------------------------------------------
MAIN RISKS
The main risks of investing in this fund include:
* Although the fund seeks to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in the fund. A major change
in interest rates or a default on a repurchase agreement held by the fund
could cause the value of your investment to decline.
* The level of income you receive from the fund will be affected by movements in
short-term interest rates.
* By investing solely in U.S. Treasury obligations and repurchase agreements
secured by those securities, the fund may offer less income than a money
market fund investing in other high-quality money market securities.
- --------------------------------------------------------------------------------
FUND PERFORMANCE
Illustrations on the next page provide you with information on the fund's
volatility and performance. Of course, past performance does not guarantee
future results.
The bar chart is designed to show you how performance of the fund's shares has
varied from year to year. Because this fund was first offered in 1997, only one
calendar year of performance information is presented. The table illustrates the
fund's average annual total returns over different time periods. Both the chart
and the table assume that all distributions have been reinvested.
8
PROSPECTUS - First American Money Market Funds
Class A, Class B, and Class C Shares
<PAGE>
Fund Summaries
TREASURY OBLIGATIONS FUND CONTINUED
- --------------------------------------------------------------------------------
FUND PERFORMANCE (CONTINUED)
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR(1)
[BAR CHART]
4.84%
- --------
1998
Best Quarter: Quarter ending September 30, 1998 1.23%
Worst Quarter: Quarter ending December 31, 1998 1.09%
AVERAGE ANNUAL TOTAL RETURNS Inception Since
AS OF 12/31/98 Date One Year Inception
- --------------------------------------------------------------------------------
Treasury Obligations Fund (Class A) 11/3/97 4.84% 4.87%
- --------------------------------------------------------------------------------
(1) Total return for the period from 12/31/98 to 9/30/99 was 3.19%.
- --------------------------------------------------------------------------------
FEES AND EXPENSES
The fund does not impose any sales charges (loads) or other fees when you buy,
sell or exchange shares. However, when you hold shares of the fund you
indirectly pay a portion of the fund's operating expenses. These expenses are
deducted from fund assets. The figures below are based on expenses during the
fiscal year ended September 30, 1999.(1)
CLASS A
- --------------------------------------------------------------------------------
SHAREHOLDER FEES
- --------------------------------------------------------------------------------
MAXIMUM SALES CHARGE (LOAD) None
MAXIMUM DEFERRED SALES CHARGE (LOAD) None
ANNUAL MAINTENANCE FEE(2)
ONLY CHARGED TO ACCOUNTS WITH BALANCES BELOW $500 $25
ANNUAL FUND OPERATING EXPENSES AS A % OF AVERAGE NET ASSETS
- --------------------------------------------------------------------------------
Management Fees 0.40%
Distribution and Service (12b-1) Fees 0.25%
Other Expenses 0.11%
TOTAL 0.76%
- --------------------------------------------------------------------------------
(1) Actual expenses for the fiscal year were lower than those shown in the table
because of voluntary fee waivers by the advisor. See "Additional Information --
Financial Highlights" for effective management fees after waivers. The net
expenses the fund actually paid after waivers for the fiscal year ended
September 30, 1999, were:
Waiver of Fund Expenses (0.06)%
TOTAL ACTUAL ANNUAL OPERATING EXPENSES (AFTER WAIVERS) 0.70%
THE ADVISOR INTENDS TO WAIVE FEES DURING THE CURRENT FISCAL YEAR SO THAT TOTAL
FUND OPERATING EXPENSES DO NOT EXCEED 0.70%. FEE WAIVERS MAY BE DISCONTINUED AT
ANY TIME.
(2) The Fund reserves the right to charge your account an annual maintenance fee
of $25 if your balance falls below $500 as a result of selling or exchanging
shares. See "Policies & Services -- Selling Shares, Accounts with Low Balances."
- --------------------------------------------------------------------------------
EXAMPLE This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 for the time periods indicated, that your investment has a 5%
return each year, and that the fund's operating expenses remain the same.
Although your actual costs and returns may differ, based on these assumptions
your costs would be:
- --------------------------------------------------------------------------------
1 year $ 78
3 years $243
5 years $422
10 years $942
9
PROSPECTUS - First American Money Market Funds
Class A, Class B, and Class C Shares
<PAGE>
Policies & Services
BUYING SHARES
You may become a shareholder in any of the funds with an initial investment of
$1,000 or more ($250 for a retirement plan or a Uniform Gifts to Minors
Act/Uniform Transfers to Minors Act (UGMA/UTMA) account). Additional investments
can be made for as little as $100 ($25 for a retirement plan or an UGMA/UTMA
account). The funds have the right to waive these minimum investment
requirements for employees of the funds' advisor and its affiliates. The funds
also have the right to reject any purchase order.
- --------------------------------------------------------------------------------
CHOOSING A SHARE CLASS
All funds in this prospectus offer Class A shares. Prime Obligations Fund also
offers Class B and Class C shares.
Each class has its own cost structure. Class B and Class C shares are available
only in exchange for Class B or Class C shares, respectively, of another First
American fund or to set up a systematic exchange program to purchase Class B or
Class C shares of other First American funds.
Class A Shares
Class A shares are offered at net asset value with no front-end or contingent
deferred sales charge. Because Class A shares will normally be the better choice
if your investment qualifies for a reduced sales charge, orders for Class B
shares for $250,000 or more (and Class C shares for $1 million or more) normally
will be treated as orders for Class A shares.
Class B Shares
Prime Obligations Fund Class B shares are available only in exchange for Class B
shares of another First American fund, or in establishing a systematic exchange
program that will be used to purchase Class B shares of other First American
funds. See "Managing Your Investment -- Systematic Exchange Program."
Class B shares have no front-end sales charge, however they do have:
* higher annual expenses than Class A shares. (See "Fees and Expenses" in the
"Fund Summaries" section.)
* a back-end sales charge, called a "contingent deferred sales charge," if you
redeem your shares within six years of the date you purchased the original
First American fund shares.
* automatic conversion to Class A shares approximately eight years after
purchase, thereby reducing future annual expenses.
Class C Shares
Prime Obligations Fund Class C shares are available only in exchange for Class C
shares of another First American fund, or in establishing a systematic exchange
program that will be used to purchase Class C shares of other First American
funds. Class C shares of the other First American funds have a front-end sales
charge. You pay no front-end sales charge when you exchange other First American
fund Class C shares for Prime Obligations Fund Class C shares. However, Prime
Obligations Fund Class C shares:
* are subject to a 1% contingent deferred sales charge if you redeem your shares
within 18 months of the date you purchased the original First American fund
shares.
* have higher annual expenses than Class A shares. (See "Fees and Expenses" in
the "Fund Summaries" section.)
* do not convert to Class A shares.
Because Class C shares do not convert to Class A shares, they will continue to
have higher annual expenses than Class A shares for as long as you hold them.
- --------------------------------------------------------------------------------
12b-1 FEES
Each fund has adopted a plan under rule 12b-1 of the Investment Company Act that
allows it to pay the fund's distributor an annual fee for the distribution and
sale of its shares and for services provided to shareholders.
For 12b-1 fees are equal to:
- --------------------------------------------------------------------------------
Class A shares 0.25% of average daily net assets
Class B shares 1% of average daily net assets
Class C shares 1% of average daily net assets
Because these fees are paid out of a fund's assets on an ongoing basis, over
time these fees will increase the cost of your investment and may cost you more
than paying other types of sales charges.
The Class A share 12b-1 fee is a shareholder servicing fee. For Class B and
Class C shares, a portion of the 12b-1 fee equal to 0.25% of average daily net
assets is a shareholder servicing fee, and the rest is a distribution fee.
The funds' distributor uses the shareholder servicing fee to compensate brokers,
participating institutions, and "one-stop" mutual fund networks for providing
ongoing services to shareholder accounts. These institutions receive annual fees
equal to 0.25% of a fund's Class A, Class B, and Class C share average daily net
assets attributable to shares sold through such institutions. For Class B
shares, the institution does not begin to receive its annual fee until one year
after the shares are sold. The funds' distributor also pays institutions which
sell Class C shares a 0.75% annual distribution fee beginning one year after the
shares are sold. The distributor may pay additional fees to institutions out of
its own assets, in exchange for sales and/or administrative services performed
on behalf of the institution's customers.
- --------------------------------------------------------------------------------
CALCULATING YOUR SHARE PRICE
Your purchase price will be based on the fund's net asset value (NAV) per share,
which is generally calculated as of the close of regular trading on the New York
Stock Exchange (usually 3:00 p.m. Central time) every day the exchange and
federally chartered banks are open. As discussed below, your order must
10
PROSPECTUS - First American Money Market Funds
Class A, Class B, and Class C Shares
<PAGE>
Policies & Services
BUYING SHARES CONTINUED
be received by the funds by 11:30 a.m. Central time for Tax Free Obligations
Fund, and by 3:00 p.m. Central time for Government Obligations Fund, Prime
Obligations Fund and Treasury Obligations Fund, in order for shares to be priced
at that day's NAV.
A fund's NAV is equal to the market value of its investments and other assets,
less any liabilities, divided by the number of fund shares. The securities held
by the funds are valued on the basis of amortized cost. This involves valuing an
instrument at its cost and thereafter assuming a constant amortization of any
discount or premium until the instrument's maturity, rather than looking at
actual changes in the market value of the instrument. Each fund's net asset
value is normally expected to be $1 per share.
Class A Shares
Your purchase price for Class A shares is their net asset value. You pay no
front-end or contingent deferred sales charge.
Class B Shares
Prime Obligations Fund Class B shares are available only in exchange for Class B
shares of another First American fund, or in establishing a systematic exchange
program that will be used to purchase Class B shares of other First American
funds. See "Managing Your Investment -- Systematic Exchange Program."
Your purchase price for Class B shares is their net asset value -- there is no
front-end sales charge. However, if you redeem your shares within six years of
the date you purchased the original First American fund shares, you will pay a
back-end sales charge, called a contingent deferred sales charge (CDSC).
Although you pay no front-end sales charge when you buy Class B shares, the
funds' distributor pays a sales commission of 4.25% of the amount invested to
investment professionals and financial institutions which sell Class B shares.
The funds' distributor receives any CDSC imposed when you sell your Class B
shares.
Your CDSC will be based on the value of your original First American fund shares
when they were purchased or on the value of the Prime Obligations Fund Class B
shares at the time of sale, whichever is less. The charge does not apply to
shares you acquired by reinvesting your dividend or capital gain distributions.
Shares will be sold in the order that minimizes your CDSC.
Year since purchase of original CDSC as a % of the
First American fund shares value of your shares
- --------------------------------------------------------------------------------
First 5%
Second 5%
Third 4%
Fourth 3%
Fifth 2%
Sixth 1%
Seventh 0%
Eighth 0%
Your Class B shares will automatically convert to Class A shares eight years
after the first day of the month you purchased the original First American fund
shares. For example, if you purchase Class B shares of one of the First American
funds on June 15, 2000, and later exchange them for Prime Obligations Fund Class
B shares, the Prime Obligations Fund shares will convert to Class A shares on
June 1, 2008.
The CDSC will be waived for:
* redemptions following the death or disability (as defined in the Internal
Revenue Code) of a shareholder.
* redemptions that equal the minimum required distribution from an individual
retirement account or other retirement plan to a shareholder who has reached
the age of 70 1/2.
* redemptions through a systematic withdrawal plan, at a rate of up to 12% a
year of your account's value. During the first year, the 12% annual limit will
be based on the value of your account on the date the plan is established.
Thereafter, it will be based on the value of your account on the preceding
December 31.
Class C Shares
Prime Obligations Fund Class C shares are available only in exchange for Class C
shares of another First American fund, or in establishing a systematic exchange
program that will be used to purchase Class C shares of other First American
funds. When you purchase Prime Obligations Fund Class C shares in order to
establish a systematic exchange program, you do not pay a sales charge. However,
when you exchange these shares for Class C shares of another First American
fund, you pay a front-end sales charge equal to 1% of the purchase price (1.01%
of the net amount invested). In addition, the funds' distributor pays a sales
commission of 1.00% of the amount you invested to investment professionals and
financial institutions which sell Class C shares. You pay no front-end sales
charge when you exchange other First American fund Class C shares for Prime
Obligations Fund Class C shares. However, if you redeem your shares within 18
months of the date you purchased the original First American fund shares, you
will be assessed a contingent deferred sales charge (CDSC) of 1% of the value of
the original First American fund shares at the time of purchase or the Prime
Obligations Fund Class C shares at the time of sale, whichever is less. The CDSC
does not apply to shares you acquired by reinvesting your dividend or capital
gain distributions. Shares will be sold in the order that minimizes your CDSC.
The distributor receives any CDSC imposed when you sell your Class C shares.
The CDSC for Class C shares will be waived in the same circumstances as the
Class B share CDSC. See "Class B Shares" above.
Unlike Class B shares, Class C shares do not convert to Class A shares after a
specified period of time. Therefore, your shares will continue to have higher
annual expenses than Class A shares.
11
PROSPECTUS - First American Money Market Funds
Class A, Class B, and Class C Shares
<PAGE>
Policies & Services
BUYING SHARES CONTINUED
- --------------------------------------------------------------------------------
HOW TO BUY SHARES
You may buy shares on any day when the New York Stock Exchange (NYSE) and
federally chartered banks are open. However, purchases of shares may be
restricted in the event of an early or unscheduled close of the NYSE. Your
shares will be priced at the net asset value determined on the day your purchase
order is processed. To make sure that your order is accepted, follow the
directions for purchasing shares given below.
By Phone
You may purchase shares by calling your investment professional or financial
institution, if they have a sales agreement with the funds' distributor. In
order for shares to be purchased at that day's price, your investment
professional or financial institution must transmit orders to the funds by 11:30
a.m. Central time for Tax Free Obligations Fund and 3:00 p.m. Central time for
Government Obligations Fund, Prime Obligations Fund and Treasury Obligations
Fund. Your investment professional or financial institution will specify the
time by which they must receive your purchase order to assure same day
processing.
Some financial institutions may charge a fee for helping you purchase shares.
Contact your investment professional or financial institution for more
information.
If you are paying by wire, you may purchase shares by calling 1-800-637-2548
before 11:30 a.m. Central time for Tax Free Obligations Fund, and before 3:00
p.m. Central time for Government Obligations Fund, Prime Obligations Fund and
Treasury Obligations Fund. All information will be taken over the telephone, and
your order will be placed when the funds' custodian receives payment by wire.
Wire federal funds as follows:
U.S. Bank National Association, Minneapolis, MN
ABA Number 091000022
For Credit to: DST Systems, Inc.:
Account Number 160234580266
For Further Credit to (investor name, fund name and account number)
By Mail
To purchase shares by mail, simply complete and sign a new account form, enclose
a check made payable to the fund you wish to invest in, and mail both to:
First American Funds
c/o DST Systems, Inc.
P.O. Box 219382
Kansas City, Missouri 64121-9382
After you have established an account, you may continue to purchase shares by
mailing your check to First American Funds at the same address.
Please note the following:
* All purchases must be made in U.S. dollars.
* Third-party checks, credit cards, credit card checks, and cash are not
accepted.
* If a check does not clear your bank, the funds reserve the right to cancel the
purchase, and you could be liable for any losses or fees incurred.
- --------------------------------------------------------------------------------
INVESTING AUTOMATICALLY
To purchase shares as part of a savings discipline, you may add to your
investment on a regular basis by having $100 or more ($25 for retirement plans
and UGMA/UTMA accounts) automatically withdrawn from your bank account on a
periodic basis and invested in fund shares. You may apply for participation in
this program through your investment professional or financial institution or by
calling 1-800-637-2548.
12
PROSPECTUS - First American Money Market Funds
Class A, Class B, and Class C Shares
<PAGE>
Policies & Services
SELLING SHARES
- --------------------------------------------------------------------------------
HOW TO SELL SHARES
You may sell your shares on any day when the New York Stock Exchange (NYSE) and
federally chartered banks are open. However, redemption of shares may be
restricted in the event of an early or unscheduled close of the NYSE. Your
shares will be sold at the net asset value determined on the day your redemption
is processed, less any applicable contingent deferred sales charge. To make sure
that your order is accepted, follow the directions for selling shares given
below.
If the fund receives a redemption request, payment will generally be made the
same day by transfer of federal funds the same day. Otherwise, payment will
generally be made on the next business day.
By Phone
If you purchased shares through an investment professional or financial
institution, simply call them to sell your shares. Your investment professional
or financial institution must transmit redemption requests to the funds by 11:30
a.m. Central time for Tax Free Obligations Fund and 3:00 p.m. Central time for
Government Obligations Fund, Prime Obligations Fund and Treasury Obligations
Fund in order for redemptions to be processed on that day. Your investment
professional or financial institution will specify the time by which they must
receive your redemption request to assure same day processing. Contact your
investment professional or financial institution directly for more information.
If you did not purchase shares through an investment professional or financial
institution, you may sell your shares by calling 1-800-637-2548 before 11:30
a.m. Central time for Tax Free Obligations Fund, and before 3:00 p.m. Central
time for Government Obligations Fund, Prime Obligations Fund, and Treasury
Obligations Fund. Calls received after these times will be processed the
following business day. Proceeds can be wired to your bank account (if the
proceeds are at least $1,000 and you have previously supplied your bank account
information to the transfer agent) or sent to you by check. The funds reserve
the right to limit telephone exchanges to $50,000 per day.
If you recently purchased your shares by check or through the Automated Clearing
House (ACH), proceeds from the sale of those shares may not be available until
your check or ACH payment has cleared, which may take up to 10 calendar days
from the date of purchase.
By Mail
To sell shares by mail, send a written request to your investment professional
or financial institution, or to the funds' transfer agent at the following
address:
First American Funds
c/o DST Systems, Inc.
P.O. Box 219382
Kansas City, Missouri 64121-9382
Your request should include the following information:
* Name of the fund.
* Account number.
* Dollar amount or number of shares redeemed.
* Name on the account.
* Signatures of all registered account owners.
Signatures on a written request must be guaranteed if:
* you would like the proceeds from the sale to be paid to anyone other than to
the shareholder of record.
* you would like the check mailed to an address other than the address on the
funds' records.
* your redemption request is for $50,000 or more.
A signature guarantee assures that a signature is genuine and protects
shareholders from unauthorized account transfers. Banks, savings and loan
associations, trust companies, credit unions, broker-dealers, and member firms
of a national securities exchange may guarantee signatures. Call your financial
institution to determine if it has this capability.
Proceeds from a written redemption request will be sent to you by check unless
another form of payment is requested.
By Checking Account
Check writing privileges are available for Class A shares of Prime Obligations
Fund. You may sign up for check writing privileges when you complete a new
account form, or by calling your investment professional, financial institution
or the funds. With a fund checking account, you may redeem shares simply by
writing a check for $100 or more. Call 1-800-637-2548 for more information.
Please note that you may not use a check to close your account.
- --------------------------------------------------------------------------------
SYSTEMATIC WITHDRAWALS
If your account has a value of $5,000 or more, you may redeem a specific dollar
amount from your account on a regular basis. To set up systematic withdrawals,
contact your investment professional or financial institution.
You should not make systematic withdrawals if you plan to continue investing in
the fund, due to sales charges and tax liabilities. In addition, it may not be
in your best interest to make systematic withdrawals of Class B or Class C
shares, since these withdrawals may be subject to a CDSC.
Accounts with Low Balances
Except for retirement plans and UGMA/ UTMA accounts, if your account balance
falls below $500 as a result of selling or exchanging shares, you may receive
written notice and be given 30 days to re-establish the minimum balance. If you
do not, the fund may close your account and send you the proceeds, less any
applicable contingent deferred sales charge, or deduct a $25 annual fee in
December of each year if your account balance at that time is below $500.
13
PROSPECTUS - First American Money Market Funds
Class A, Class B, and Class C Shares
<PAGE>
Policies & Services
MANAGING YOUR INVESTMENT
- --------------------------------------------------------------------------------
SYSTEMATIC EXCHANGE PROGRAM
You may make automatic monthly exchanges of your Class A, Class B, or Class C
shares for the same Class of shares of another First American fund. Investing a
fixed dollar amount at regular intervals, sometimes referred to as "dollar cost
averaging," may have the effect of reducing the average cost per share of the
fund acquired.
To set up a systematic exchange program, you initially purchase an amount of
Class A, Class B, or Class C shares equal to the total amount that you wish to
invest in the other First American fund. On a monthly basis, the dollar amount
of Class A, Class B, or Class C shares that you specify will then be exchanged
for shares of the other First American fund within the same class. Exchanges of
Class A and Class C shares will be subject to the applicable sales charge
imposed by the First American fund into which you are exchanging. You may wish
to execute a letter of intent in connection with a Class A share systematic
exchange program. (A letter of intent indicates a non-binding intent to purchase
$50,000 or more of First American fund Class A shares over a 13-month period,
which lowers your sales charge. See the prospectus of the First American fund
into which you plan to exchange for more information.) Exchanges of Prime
Obligations Fund Class B or Class C shares will not be subject to a CDSC. See
"Exchanging Shares," below. However, if you redeem the Prime Obligations Fund
Class B or Class C shares in your account, rather than exchange them, they will
be subject to a CDSC.
You may set up a systematic exchange program through your investment
professional or financial institution, or by calling 1-800-637-2548.
- --------------------------------------------------------------------------------
EXCHANGING SHARES
If your investment goals or your financial needs change, you may move from one
First American fund to another. There is no fee to exchange shares.
You may exchange your shares only for shares of the same class of the other
First American fund. Exchanges are made based on the net asset value per share
of each fund at the time of the exchange. When you exchange your Class A or
Class C shares for another First American fund of the same class, you will have
to pay the sales charge imposed by the fund, unless your money market fund
shares were originally issued in exchange for shares of a First American fund
that had a sales charge. When you exchange your Class B or Class C shares for
Class B or Class C shares of another First American fund, the time you held the
shares of the "old" fund will be added to the time you hold the shares of the
"new" fund for purposes of determining your CDSC or, in the case of Class B
shares, calculating when your shares convert to Class A shares.
Before exchanging into any fund, be sure to read its prospectus carefully. A
fund may change or cancel its exchange policies at any time. You will be
notified of any changes. The funds have the right to limit exchanges to four
times per year.
By Phone
You may exchange shares by calling your investment professional, your financial
institution, or the funds' transfer agent, provided that both funds have
identical shareholder registrations. To request an exchange through the funds'
transfer agent, call 1-800-637-2548. Your instructions must be received by the
funds' transfer agent before 11:30 a.m. Central time for Tax Free Obligations
Fund and before 3:00 p.m. Central time for Government Obligations Fund, Prime
Obligations Fund and Treasury Obligations Fund, or by an earlier time specified
by your investment professional or financial institution, in order for shares to
be exchanged the same day.
By Mail
To exchange shares by written request, please follow the procedures under
"Selling Shares." Be sure to include the names of both funds involved in the
exchange.
- --------------------------------------------------------------------------------
TELEPHONE TRANSACTIONS
You may buy, sell, or exchange shares by telephone, unless you elected on your
new account form to restrict this privilege. If you wish to reinstate this
option on an existing account, please call Investor Services at 1-800-637-2548
to request the appropriate form. The funds and their agents will not be
responsible for any losses that may result from acting on wire or telephone
instructions that they reasonably believe to be genuine.
The funds and their agents will each follow reasonable procedures to confirm
that instructions received by telephone are genuine, which may include taping
telephone conversations.
It may be difficult to reach the funds by telephone during periods of unusual
market activity. If you are unable to reach the funds or their agents by
telephone, please consider sending written instructions.
- --------------------------------------------------------------------------------
STAYING INFORMED
Shareholder Reports
Shareholder reports are mailed twice a year, in November and May. They include
financial statements, performance information, a message from your portfolio
managers, and, on an annual basis, the auditor's report.
In an attempt to reduce shareholder costs and help eliminate duplication, the
funds will try to limit their mailings to one report for each address that lists
one or more shareholders with the same last name. If you would like additional
copies, please call 1-800-637-2548.
Statements and Confirmations
Statements summarizing activity in your account are mailed at least quarterly.
Confirmations are mailed following each non-systematic purchase or sale of fund
shares.
14
PROSPECTUS - First American Money Market Funds
Class A, Class B, and Class C Shares
<PAGE>
Policies & Services
MANAGING YOUR INVESTMENT CONTINUED
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS
Dividends from a fund's net investment income are declared daily, starting on
the day you purchase your shares, and paid monthly. You will not receive a
dividend for the day on which you sell shares.
Dividends will be reinvested in additional shares of the same fund, unless you
request that distributions be reinvested in another First American fund or paid
in cash. This request may be made on your new account form or by writing to the
fund, your investment professional or your financial institution. If you request
that your distributions be paid in cash but those distributions cannot be
delivered because of an incorrect mailing address, the undelivered distributions
and all future distributions will be reinvested in fund shares.
- --------------------------------------------------------------------------------
TAXES
Some of the tax consequences of investing in the funds are discussed below. More
information about taxes is in the Statement of Additional Information. However,
because everyone's tax situation is unique, always consult your tax professional
about federal, state and local tax consequences.
For Government Obligations Fund, Prime Obligations Fund, and Treasury
Obligations Fund, dividends you receive from the fund are generally taxable as
ordinary income, whether you reinvest them or take them in cash. Dividends
attributable to income from U.S. government securities may be exempt from state
personal income taxes. You should consult your tax advisor for more information.
Tax Free Obligations Fund intends to meet certain federal tax requirements so
that distributions of tax-exempt interest income may be treated as
"exempt-interest dividends." These dividends are not subject to regular federal
tax. However, although it has no current intention of doing so, the fund may
invest up to 20% of its net assets in municipal securities the interest on which
is subject to the federal alternative minimum tax. Any portion of
exempt-interest dividends attributable to interest on these securities may
increase some shareholders' alternative minimum tax.
15
PROSPECTUS - First American Money Market Funds
Class A, Class B, and Class C Shares
<PAGE>
Additional Information
MANAGEMENT
U.S. Bank National Association (U.S. Bank), acting through its First American
Asset Management division, is the funds' investment advisor. First American
Asset Management provides investment management services to individuals and
institutions, including corporations, foundations, pensions and retirement
plans. As of December 31, 1999, it had more than $78 billion in assets under
management, including investment company assets of more than $33 billion. As
investment advisor, First American Asset Management manages the funds' business
and investment activities, subject to the authority of the board of directors.
Each fund pays the investment advisor a monthly fee for providing investment
advisory services. During the fiscal year ended September 30, 1999, after taking
into account fee waivers, the funds paid the following investment advisory fees
to First American Asset Management:
Advisory fee
as a % of
average daily
net assets
- --------------------------------------------------------------------------------
GOVERNMENT OBLIGATIONS FUND 0.33%
PRIME OBLIGATIONS FUND 0.34%
TAX FREE OBLIGATIONS FUND 0.33%
TREASURY OBLIGATIONS FUND 0.34%
- --------------------------------------------------------------------------------
Investment Advisor
First American Asset Management
601 Second Avenue South
Minneapolis, Minnesota 55402
Distributor
SEI Investments Distribution Co.
Oaks, Pennsylvania 19456
Direct Fund Correspondence to:
First American Funds
P.O. Box 1330
Minneapolis, MN 55440-1330
Additional Compensation
U.S. Bank and other affiliates of U.S. Bancorp may act as fiduciary with
respect to plans subject to the Employee Retirement Income Security Act of 1974
(ERISA) and other trust and agency accounts that invest in the funds. As
described above, U.S. Bank receives compensation for acting as the funds'
investment advisor. U.S. Bank and its affiliates also receive compensation in
connection with the following:
CUSTODY SERVICES. As compensation for acting as the funds' custodian, U.S. Bank
is paid monthly fees equal, on an annual basis, to 0.03% of a fund's average
daily net assets. In addition, U.S. Bank is reimbursed for its out-of-pocket
expenses incurred while providing custody services to the funds.
ADMINISTRATIVE SERVICES. U.S. Bank provides or compensates others to provide
administrative services all open-end funds in the First American family of
funds. These services include general administrative and accounting services,
transfer agency and dividend disbursing services, and shareholder services. U.S.
Bank receives total fees equal, on an annual basis, to 0.07% of the aggregate
average daily net assets of all open-end mutual funds in the First American fund
family up to $8 billion and 0.055% of the aggregate average daily net assets of
all open-end mutual funds in the First American fund family in excess of $8
billion. These fees are allocated among the funds in the First American family
of funds on the basis of their relative net asset values. Additionally, the
funds pay U.S. Bank fees based upon the number of funds and accounts maintained.
SECURITIES LENDING SERVICES. In connection with lending its portfolio
securities, Government Obligations Fund pays administrative and custodial fees
to U.S. Bank which are equal to 40% of the fund's income from these securities
lending transactions.
BROKERAGE TRANSACTIONS. When purchasing and selling portfolio securities for
the funds, the funds' investment advisor may place trades through its
affiliates, U.S. Bancorp Investments, Inc. and U.S. Bancorp Piper Jaffray Inc.,
which will earn commissions on these transactions.
SHAREHOLDER SERVICING FEES. To the extent that fund shares are held through
U.S. Bank or its broker-dealer affiliates, U.S. Bancorp Investments, Inc. and
U.S. Bancorp Piper Jaffray Inc., those entities may receive shareholder
servicing fees from the funds' distributor.
Portfolio Management
Each fund's investments are managed by a team of persons associated with First
American Asset Management.
16
PROSPECTUS - First American Money Market Funds
Class A, Class B, and Class C Shares
<PAGE>
Additional Information
MORE ABOUT THE FUNDS
- --------------------------------------------------------------------------------
INVESTMENT STRATEGIES
The funds' main investment strategies are discussed in the "Fund Summaries"
section. These are the strategies that the funds' investment advisor believes
are most likely to be important in trying to achieve the funds' objectives. You
should be aware that each fund may also use strategies and invest in securities
that are not described in this prospectus, but that are described in the
Statement of Additional Information (SAI). For a copy of the SAI, call Investor
Services at 1-800-637-2548.
In addition to the securities specified in the "Fund Summaries" section, each
fund may invest in other money market funds that invest in the same types of
securities as the respective fund, including money market funds advised by U.S.
Bank.
Investment Approach
Each fund complies with Securities and Exchange Commission regulations that
apply to money market funds. These regulations require that each fund's
investments mature within 397 days from the date of purchase, and that the
average maturity of each fund's investments (on a dollar-weighted basis) be 90
days or less. The funds may invest in securities with variable or floating
interest rates and securities with demand features. The maturities of these
securities are determined according to regulations which allow the funds to
consider some of these securities as having maturities shorter than their stated
maturity dates. All of the funds' investments must be in U.S. dollar-denominated
high quality securities which have been determined by the funds' advisor to
present minimal credit risks.
When selecting securities for the funds, the portfolio managers use a "top-down"
approach, looking first at general economic factors and market conditions, then
at individual securities. The portfolio managers look for value while adhering
to the credit and other restrictions on money market funds.
17
PROSPECTUS - First American Money Market Funds
Class A, Class B, and Class C Shares
<PAGE>
Additional Information
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
The tables that follow present performance information about the Class A shares
of each fund and the Class B and Class C shares of Prime Obligations Fund. This
information is intended to help you understand each fund's financial performance
for the past five years or, if shorter, the period of the fund's operations.
Some of this information reflects financial results for a single fund share.
Total returns in the tables represent the rate that you would have earned or
lost on an investment in a fund, excluding sales charges and assuming you
reinvested all of your dividends and distributions.
The information for the fiscal year ended September 30, 1999, has been audited
by Ernst & Young LLP, independent auditors, whose report, along with the funds'
financial statements, is included in the funds' annual report, which is
available upon request. The information for the fiscal years ended on or before
September 30, 1998, has been audited by other auditors.
GOVERNMENT OBLIGATIONS FUND
<TABLE>
<CAPTION>
Fiscal year ended Fiscal period ended
CLASS A SHARES September 30, 1999 September 30, 1998(1)
- ------------------------------------------------------------- ------------------ ---------------------
<S> <C> <C>
PER SHARE DATA
Net Asset Value, Beginning of Period $ 1.00 $ 1.00
Net Investment Income 0.04 0.02
Dividends (from Net Investment Income) (0.04) (0.02)
-------- --------
Net Asset Value, End of Period $ 1.00 $ 1.00
======== ========
Total Return 4.36% 2.10%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $435,227 $325,024
Ratio of Expenses to Average Net Assets 0.75% 0.70%(2)
Ratio of Net Investment Income to Average Net Assets 4.28% 4.93%(2)
Ratio of Expenses to Average Net Assets (excluding waivers) 0.82% 0.76%(2)
Ratio of Net Investment Income to Average Net Assets
(excluding waivers) 4.21% 4.87%(2)
- ------------------------------------------------------------- -------- --------
</TABLE>
(1) Class A shares have been offered since April 29, 1998.
(2) Annualized.
18
PROSPECTUS - First American Money Market Funds
Class A, Class B, and Class C Shares
<PAGE>
Additional Information
FINANCIAL HIGHLIGHTS CONTINUED
PRIME OBLIGATIONS FUND
<TABLE>
<CAPTION>
Fiscal year/period ended September 30,
CLASS A SHARES 1999 1998 1997 1996 1995(1)
- ------------------------------------------------------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value, Beginning of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Net Investment Income 0.04 0.05 0.05 0.05 0.04
Dividends (from Net Investment Income) (0.04) (0.05) (0.05) (0.05) (0.04)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
Total Return 4.51% 5.15% 5.06% 5.08% 3.84
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $4,170,881 $3,699,197 $ 218,261 $ 135,146 $ 96,083
Ratio of Expenses to Average Net Assets 0.80% 0.70% 0.70% 0.70% 0.70%(3)
Ratio of Net Investment Income to Average Net Assets 4.42% 5.00% 4.95% 4.94% 5.43%(3)
Ratio of Expenses to Average Net Assets (excluding waivers) 0.87% 0.79% 0.77% 0.79% 0.82%(3)
Ratio of Net Investment Income to Average Net Assets
(excluding waivers) 4.35% 4.91% 4.88% 4.85% 5.31%(3)
- ------------------------------------------------------------- ---------- ---------- ---------- ---------- ----------
<CAPTION>
Fiscal year/period ended September 30,
CLASS B SHARES 1999 1998 1997 1996 1995(2)
- ------------------------------------------------------------- ---------- ---------- ---------- ---------- ----------
PER SHARE DATA
Net Asset Value, Beginning of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Net Investment Income 0.04 0.04 0.04 0.04 0.03
Dividends (from Net Investment Income) (0.04) (0.04) (0.04) (0.04) (0.03)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
Total Return 3.85% 4.37% 4.27% 4.29% 3.28%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ 4,007 $ 2,397 $ 2,018 $ 1,763 $ 14
Ratio of Expenses to Average Net Assets 1.45% 1.45% 1.45% 1.45% 1.45%(3)
Ratio of Net Investment Income to Average Net Assets 3.78% 4.29% 4.17% 4.15% 4.70%(3)
Ratio of Expenses to Average Net Assets (excluding waivers) 1.51% 1.53% 1.52% 1.54% 1.57%(3)
Ratio of Net Investment Income to Average Net Assets
(excluding waivers) 3.72% 4.21% 4.10% 4.06% 4.58%(3)
- ------------------------------------------------------------- ---------- ---------- ---------- ---------- ----------
</TABLE>
(1) Class A shares have been offered since January 21, 1995.
(2) Class B shares have been offered since January 23, 1995.
(3) Annualized.
<TABLE>
<CAPTION>
Fiscal period ended
CLASS C SHARES September 30, 1999(1)
- ------------------------------------------------------------- --------------------
<S> <C>
PER SHARE DATA
Net Asset Value, Beginning of Period $1.00
Net Investment Income 0.02
Dividends (from Net Investment Income) (0.02)
-----
Net Asset Value, End of Period $1.00
=====
Total Return 2.47%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ 341
Ratio of Expenses to Average Net Assets 1.45%(2)
Ratio of Net Investment Income to Average Net Assets 3.75%(2)
Ratio of Expenses to Average Net Assets (excluding waivers) 1.51%(2)
Ratio of Net Investment Income to Average Net Assets
(excluding waivers) 3.69%(2)
- ------------------------------------------------------------- -----
</TABLE>
(1) Class C shares have been offered since February 1, 1999.
(2) Annualized.
19
PROSPECTUS - First American Money Market Funds
Class A, Class B, and Class C Shares
<PAGE>
Additional Information
FINANCIAL HIGHLIGHTS CONTINUED
TAX FREE OBLIGATIONS FUND(1)
<TABLE>
<CAPTION>
Fiscal year Fiscal period Fiscal period
ended ended ended
September 30, September 30, November 30, Fiscal year ended July 31
CLASS A SHARES 1999 1998 1997 1997 1996 1995(2)
- ---------------------------------------------------- ------------- ------------- ------------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value, Beginning of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Net Investment Income 0.03 0.02 0.01 0.03 0.03 0.02
Dividends (from Net Investment Income) (0.03) (0.02) (0.01) (0.03) (0.03) (0.02)
-------- -------- -------- ------- ------- -------
Net Asset Value, End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======= ======= =======
Total Return 2.51% 2.45% 0.96% 2.76% 2.81% 1.66%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $268,626 $247,154 $ 28,662 $31,668 $30,143 $33,569
Ratio of Expenses to Average Net Assets 0.74% 0.70%(3) 0.89%(3) 0.88% 0.89% 1.00%(3)
Ratio of Net Investment Income to Average Net Assets 2.47% 2.84%(3) 2.83%(3) 2.73% 2.78% 2.98%(3)
Ratio of Expenses to Average Net Assets
(excluding waivers) 0.82% 0.83%(3) 1.23%(3) 1.23% 1.25% 1.36%(3)
Ratio of Net Investment Income to Average Net Assets
(excluding waivers) 2.39% 2.71%(3) 2.49%(3) 2.38% 2.42% 2.62%(3)
- ---------------------------------------------------- -------- -------- -------- ------- ------- -------
</TABLE>
(1) The financial highlights for Tax Free Obligations Fund include the
historical financial highlights of the Qualivest Tax-Free Money Market Fund. The
assets of Qualivest Tax-Free Money Market Fund were acquired by Tax Free
Obligations Fund on November 25, 1997.
(2) Class A shares have been offered since January 9, 1995.
(3) Annualized.
TREASURY OBLIGATIONS FUND
<TABLE>
<CAPTION>
Fiscal year ended Fiscal period ended
CLASS A SHARES September 30, 1999 September 30, 1998(1)
- ------------------------------------------------------------- ------------------ ---------------------
<S> <C> <C>
PER SHARE DATA
Net Asset Value, Beginning of Period $ 1.00 $ 1.00
Net Investment Income 0.04 0.05
Dividends (from Net Investment Income) (0.04) (0.05)
-------- --------
Net Asset Value, End of Period $ 1.00 $ 1.00
======== ========
Total Return 4.31% 4.54%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ 23,496 $101,749
Ratio of Expenses to Average Net Assets 0.70% 0.70%(2)
Ratio of Net Investment Income to Average Net Assets 4.24% 4.88%(2)
Ratio of Expenses to Average Net Assets (excluding waivers) 0.76% 0.76%(2)
Ratio of Net Investment Income to Average Net Assets
(excluding waivers) 4.18% 4.82%(2)
- ------------------------------------------------------------- -------- --------
</TABLE>
(1) Class A shares have been offered since November 3, 1997.
(2) Annualized.
20
PROSPECTUS - First American Money Market Funds
Class A, Class B, and Class C Shares
<PAGE>
- --------------------------------------------------------------------------------
FOR MORE INFORMATION
More information about the funds is available in the funds' Statement of
Additional Information and annual and semiannual reports.
- --------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION (SAI)
The SAI provides more details about the funds and their policies. A current SAI
is on file with the Securities and Exchange Commission (SEC) and is incorporated
into this prospectus by reference (which means that it is legally considered
part of this prospectus).
- --------------------------------------------------------------------------------
ANNUAL AND SEMIANNUAL REPORTS
Additional information about the funds' investments is available in the funds'
annual and semiannual reports to shareholders. In the funds' annual report, you
will find a discussion of the market conditions and investment strategies that
significantly affected the funds' performance during their last fiscal year.
You can obtain a free copy of the funds' SAI and/or free copies of the funds'
most recent annual or semiannual reports by calling Investor Services at
1-800-637-2548. The material you request will be sent by first-class mail or
other means designed to ensure equally prompt delivery, within three business
days of receipt of the request.
You can also obtain copies of this information, after paying a duplicating fee,
by electronic request at the following email address: [email protected], or by
writing the SEC's Public Reference Section, Washington, D.C. 20549-0102. For
more information, call 1-202-942-8090.
Information about the funds is also available on the Internet. Text-only
versions of fund documents can be viewed online or downloaded from the EDGAR
Database on the SEC's Internet site at http://www.sec.gov.
FIRST AMERICAN FUNDS P.O. Box 1330, Minneapolis, MN 55440-1330
First American Asset Management, a division of U.S. Bank National Association,
serves as the investment advisor to the First American Funds.
First American Funds are distributed by SEI Investments Distribution Co. which
is located in Oaks, PA 19456 and is not an affiliate of U.S. Bank.
1/2000 3017-99
SEC file number: 811-05309
FAF-1901R
[LOGO] FIRST AMERICAN FUNDS(R)
THE POWER OF DISCIPLINED INVESTING(R)
<PAGE>
DECEMBER 1, 1999
AS SUPPLEMENTED
FEBRUARY 1, 2000
ASSET CLASSES
* EQUITY FUNDS
* FUNDS OF FUNDS
* BOND FUNDS
* TAX FREE BOND FUNDS
(*) MONEY MARKET FUNDS
PROSPECTUS
FIRST AMERICAN FUNDS, INC.
FIRST AMERICAN
MONEY MARKET
FUNDS
CLASS D SHARES
GOVERNMENT OBLIGATIONS FUND
PRIME OBLIGATIONS FUND
TAX FREE OBLIGATIONS FUND
TREASURY OBLIGATIONS FUND
AS WITH ALL MUTUAL FUNDS, THE SECURITIES AND EXCHANGE COMMISSION HAS NOT
APPROVED OR DISAPPROVED THE SHARES OF THESE FUNDS, OR DETERMINED IF THE
INFORMATION IN THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANY STATEMENT TO THE
CONTRARY IS A CRIMINAL OFFENSE.
[LOGO] FIRST AMERICAN FUNDS(R)
THE POWER OF DISCIPLINED INVESTING(R)
<PAGE>
Table of
CONTENTS
FUND SUMMARIES
- --------------------------------------------------------------------------------
Government Obligations Fund 2
- --------------------------------------------------------------------------------
Prime Obligations Fund 4
- --------------------------------------------------------------------------------
Tax Free Obligations Fund 6
- --------------------------------------------------------------------------------
Treasury Obligations Fund 8
- --------------------------------------------------------------------------------
POLICIES & SERVICES
- --------------------------------------------------------------------------------
Buying and Selling Shares 10
- --------------------------------------------------------------------------------
Managing Your Investment 11
- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
Management 12
- --------------------------------------------------------------------------------
More About The Funds 13
- --------------------------------------------------------------------------------
Financial Highlights 14
- --------------------------------------------------------------------------------
FOR MORE INFORMATION Back Cover
- --------------------------------------------------------------------------------
<PAGE>
Fund Summaries
INTRODUCTION
This section of the prospectus describes the objectives of the First American
Money Market Funds, summarizes the main investment strategies used by each fund
in trying to achieve its objectives, and highlights the risks involved with
these strategies. It also provides you with information about the performance,
fees, and expenses of the funds.
AN INVESTMENT IN THE FUNDS IS NOT A DEPOSIT OF U.S. BANK NATIONAL ASSOCIATION
AND IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR
ANY OTHER GOVERNMENT AGENCY. ALTHOUGH THE FUNDS SEEK TO PRESERVE THE VALUE OF
YOUR INVESTMENT AT $1.00 PER SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN
THE FUNDS.
1
PROSPECTUS - First American Money Market Funds
Class D Shares
<PAGE>
Fund Summaries
GOVERNMENT OBLIGATIONS FUND
- --------------------------------------------------------------------------------
OBJECTIVE
Government Obligations Fund seeks maximum current income to the extent
consistent with the preservation of capital and maintenance of liquidity.
- --------------------------------------------------------------------------------
MAIN INVESTMENT STRATEGIES
Government Obligations Fund invests exclusively in short-term U.S. government
securities and repurchase agreements secured by U.S. government securities.
U.S. government securities are bonds or other debt obligations issued or
guaranteed as to principal and interest by the U.S. government or one of its
agencies or instrumentalities. U.S. Treasury securities and some obligations of
U.S. government agencies and instrumentalities are supported by the "full faith
and credit" of the United States government. Other U.S. government securities
are backed by the right of the issuer to borrow from the U.S. Treasury. Still
others are supported only by the credit of the issuer or instrumentality.
When selecting securities for the fund, the portfolio managers use a "top-down"
approach, looking first at general economic factors and market conditions, then
at individual securities.
To generate additional income, the fund may lend securities representing up to
one-third of the value of its total assets to broker-dealers, banks, and other
institutions.
- --------------------------------------------------------------------------------
MAIN RISKS
The main risks of investing in this fund include:
* Although the fund seeks to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in the fund. A major change
in interest rates or a default on a security or repurchase agreement held by
the fund, or a securities lending agreement entered into by the fund, could
cause the value of your investment to decline.
* The level of income you receive from the fund will be affected by movements in
short-term interest rates.
* By investing solely in U.S. government securities and repurchase agreements
secured by those securities, the fund may offer less income than a money
market fund investing in other high-quality money market securities.
- --------------------------------------------------------------------------------
FUND PERFORMANCE
Illustrations on the next page provide you with information on the fund's
volatility and performance. Of course, past performance does not guarantee
future results.
The bar chart shows you how performance of the fund's shares has varied from
year to year. The table illustrates the fund's average annual total returns over
different time periods. Both the chart and the table assume that all
distributions have been reinvested.
2
PROSPECTUS - First American Money Market Funds
Class D Shares
<PAGE>
Fund Summaries
GOVERNMENT OBLIGATIONS FUND CONTINUED
- --------------------------------------------------------------------------------
FUND PERFORMANCE (CONTINUED)
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR(1)
[BAR CHART]
4.97% 5.10% 4.99%
- ------------------------
1996 1997 1998
Best Quarter: Quarter ending December 31, 1997 Total Return 1.28%
Worst Quarter: Quarter ending December 31, 1998 Total Return 1.14%
AVERAGE ANNUAL TOTAL RETURNS Inception Since
AS OF 12/31/98 Date One Year Inception
- --------------------------------------------------------------------------------
Government Obligations Fund 1/21/95 4.99% 5.14%
- --------------------------------------------------------------------------------
(1) Total return for the period from 12/31/98 to 9/30/99 was 3.34%.
- --------------------------------------------------------------------------------
FEES AND EXPENSES
The fund does not impose any sales charges (loads) or other fees when you buy,
sell or exchange shares. However, when you hold shares of the fund you
indirectly pay a portion of the fund's operating expenses. These expenses are
deducted from fund assets. The figures below are based on expenses during the
fiscal year ended September 30, 1999.(1)
- --------------------------------------------------------------------------------
SHAREHOLDER FEES
- --------------------------------------------------------------------------------
MAXIMUM SALES CHARGE (LOAD) None
MAXIMUM DEFERRED SALES CHARGE (LOAD) None
ANNUAL FUND OPERATING EXPENSES AS A % OF AVERAGE NET ASSETS
- --------------------------------------------------------------------------------
Management Fees 0.40%
Distribution and Service (12b-1) Fees 0.15%
Other Expenses 0.12%
TOTAL 0.67%
- --------------------------------------------------------------------------------
(1) Actual expenses for the fiscal year were lower than those shown in the table
because of voluntary fee waivers by the advisor. See "Additional Information --
Financial Highlights" for effective management fees after waivers. The net
expenses the fund actually paid after waivers for the fiscal year ended
September 30, 1999, were:
Waiver of Fund Expenses (0.07)%
TOTAL ACTUAL ANNUAL OPERATING EXPENSES (AFTER WAIVERS) 0.60%
THE ADVISOR INTENDS TO WAIVE FEES DURING THE CURRENT FISCAL YEAR SO THAT TOTAL
FUND OPERATING EXPENSES DO NOT EXCEED 0.60%. FEE WAIVERS MAY BE DISCONTINUED AT
ANY TIME.
- --------------------------------------------------------------------------------
EXAMPLE This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 for the time periods indicated, that your investment has a 5%
return each year, and that the fund's operating expenses remain the same.
Although your actual costs and returns may differ, based on these assumptions
your costs would be:
- --------------------------------------------------------------------------------
1 year $ 68
3 years $214
5 years $373
10 years $835
3
PROSPECTUS - First American Money Market Funds
Class D Shares
<PAGE>
Fund Summaries
PRIME OBLIGATIONS FUND
- --------------------------------------------------------------------------------
OBJECTIVE
Prime Obligations Fund seeks maximum current income to the extent consistent
with preservation of capital and maintenance of liquidity.
- --------------------------------------------------------------------------------
MAIN INVESTMENT STRATEGIES
Prime Obligations Fund invests in high-quality short-term debt obligations,
including:
* securities issued by the U.S. government or one of its agencies or
instrumentalities.
* U.S. dollar-denominated obligations of domestic and foreign banks with total
assets of at least $500 million (including fixed and variable rate
certificates of deposit, time deposits and bankers' acceptances).
* commercial paper.
* non-convertible corporate debt securities.
* loan participation interests.
* repurchase agreements for the securities in which the fund may invest.
When selecting securities for the fund, the portfolio managers use a "top-down"
approach, looking first at general economic factors and market conditions, then
at individual securities.
The fund may invest up to 25% of its total assets in dollar-denominated
obligations of U.S. branches of foreign banks which are subject to the same
regulation as U.S. banks. The fund also may invest up to 25% of its total
assets, collectively, in dollar-denominated obligations of foreign branches of
domestic banks, foreign banks, and foreign corporations.
- --------------------------------------------------------------------------------
MAIN RISKS
The main risks of investing in this fund include:
* Although the fund seeks to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in the fund. A major change
in interest rates or a default on a security or repurchase agreement held by
the fund could cause the value of your investment to decline.
* The level of income you receive from the fund will be affected by movements in
short-term interest rates.
* Foreign securities in which the fund invests, although dollar denominated, may
present some additional risk. Political or social instability, or diplomatic
developments could adversely affect the securities. There is also the risk of
possible withholding taxes, seizure of foreign deposits, currency controls,
interest limitations, or other governmental restrictions which might affect
the payment of principal or interest on securities owned by the fund. In
addition, there may be less public information available about foreign
corporations and foreign banks and their branches.
- --------------------------------------------------------------------------------
FUND PERFORMANCE
Illustrations on the next page provide you with information on the fund's
volatility and performance. Of course, past performance does not guarantee
future results.
The bar chart shows you how performance of the fund's shares has varied from
year to year. The table illustrates the fund's average annual total returns over
different time periods. Both the chart and the table assume that all
distributions have been reinvested.
4
PROSPECTUS - First American Money Market Funds
Class D Shares
<PAGE>
Fund Summaries
PRIME OBLIGATIONS FUND CONTINUED
- --------------------------------------------------------------------------------
FUND PERFORMANCE (CONTINUED)
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR(1)
[BAR CHART]
5.08% 5.23% 5.17%
- ------------------------
1996 1997 1998
Best Quarter: Quarter ending December 31, 1997 Total Return 1.32%
Worst Quarter: Quarter ending December 31, 1998 Total Return 1.23%
AVERAGE ANNUAL TOTAL RETURNS Inception Since
AS OF 12/31/98 Date One Year Inception
- --------------------------------------------------------------------------------
Prime Obligations Fund 1/24/95 5.17% 5.27%
- --------------------------------------------------------------------------------
(1) Total return for the period from 12/31/98 to 9/30/99 was 3.46%.
- --------------------------------------------------------------------------------
FEES AND EXPENSES
The fund does not impose any sales charges (loads) or other fees when you buy,
sell or exchange shares. However, when you hold shares of the fund you
indirectly pay a portion of the fund's operating expenses. These expenses are
deducted from fund assets. The figures below are based on expenses during the
fiscal year ended September 30, 1999.(1)
- --------------------------------------------------------------------------------
SHAREHOLDER FEES
- --------------------------------------------------------------------------------
MAXIMUM SALES CHARGE (LOAD) None
MAXIMUM DEFERRED SALES CHARGE (LOAD) None
ANNUAL FUND OPERATING EXPENSES AS A % OF AVERAGE NET ASSETS
- --------------------------------------------------------------------------------
Management Fees 0.40%
Distribution and Service (12b-1) Fees 0.15%
Other Expenses 0.11%
TOTAL 0.66%
- --------------------------------------------------------------------------------
(1) Actual expenses for the fiscal year were lower than those shown in the table
because of voluntary fee waivers by the advisor. See "Additional Information --
Financial Highlights" for effective management fees after waivers. The net
expenses the fund actually paid after waivers for the fiscal year ended
September 30, 1999, were:
Waiver of Fund Expenses (0.06)%
TOTAL ACTUAL ANNUAL OPERATING EXPENSES (AFTER WAIVERS) 0.60%
THE ADVISOR INTENDS TO WAIVE FEES DURING THE CURRENT FISCAL YEAR SO THAT TOTAL
FUND OPERATING EXPENSES DO NOT EXCEED 0.60%. FEE WAIVERS MAY BE DISCONTINUED AT
ANY TIME.
- --------------------------------------------------------------------------------
EXAMPLE This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 for the time periods indicated, that your investment has a 5%
return each year, and that the fund's operating expenses remain the same.
Although your actual costs and returns may differ, based on these assumptions
your costs would be:
- --------------------------------------------------------------------------------
1 year $ 67
3 years $211
5 years $368
10 years $822
5
PROSPECTUS - First American Money Market Funds
Class D Shares
<PAGE>
Fund Summaries
TAX FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
OBJECTIVE
Tax Free Obligations Fund seeks maximum current income exempt from federal
income taxes consistent with the preservation of capital and maintenance of
liquidity.
- --------------------------------------------------------------------------------
MAIN INVESTMENT STRATEGIES
Tax Free Obligations Fund invests at least 80% of its total assets in
high-quality, short-term municipal securities that pay interest that is exempt
from federal income tax, including the federal alternative minimum tax.
Municipal securities are issued by state and local governments, and certain U.S.
territorial possessions to finance public infrastructure projects such as
streets and highways, schools, water and sewer systems, hospitals, and airports.
They also may be issued to refinance outstanding obligations as well as to
obtain funds for general operating expenses and for loans to other public
institutions and facilities. There are two principal classifications of
municipal securities:
* general obligation bonds, which are backed by the full faith, credit and
taxing power of the issuer.
* revenue bonds, which are payable only from the revenues generated by a
specific project or from another specific revenue source.
The balance of the fund's total assets may be invested in taxable money market
securities and municipal securities subject to the alternative minimum tax.
However, the fund currently does not intend to invest in these types of
securities.
When selecting securities for the fund, the portfolio managers use a "top-down"
approach, looking first at general economic factors and market conditions, then
at individual securities.
- --------------------------------------------------------------------------------
MAIN RISKS
The main risks of investing in this fund include:
* Although the fund seeks to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in the fund. A major change
in interest rates or a default on a security or repurchase agreement held by
the fund could cause the value of your investment to decline.
* The level of income you receive from the fund will be affected by movements in
short-term interest rates.
* The value of municipal securities owned by the fund may be adversely affected
by future changes in federal income tax laws, including rate reductions or the
imposition of a flat tax.
- --------------------------------------------------------------------------------
FUND PERFORMANCE
Illustrations on the next page provide you with information on the fund's
volatility and performance. Of course, past performance does not guarantee
future results.
The bar chart is intended to show you how performance of the fund's shares has
varied from year to year. Because Class D shares of the fund were first offered
in 1997, only one calendar year of performance information is presented. The
table illustrates the fund's average annual total returns over different time
periods. Both the chart and the table assume that all distributions have been
reinvested.
6
PROSPECTUS - First American Money Market Funds
Class D Shares
<PAGE>
Fund Summaries
TAX FREE OBLIGATIONS FUND CONTINUED
- --------------------------------------------------------------------------------
FUND PERFORMANCE (CONTINUED)
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR(1)
[BAR CHART]
2.95%
- -------
1998
Best Quarter: Quarter ending June 30, 1998 Total Return 0.80%
Worst Quarter: Quarter ending December 31, 1998 Total Return 0.70%
AVERAGE ANNUAL TOTAL RETURNS Inception Since
AS OF 12/31/98 Date One Year Inception
- --------------------------------------------------------------------------------
Tax Free Obligations Fund 11/26/97 2.95% 2.97%
- --------------------------------------------------------------------------------
(1) Total return for the period from 12/31/98 to 9/30/99 was 1.95%.
- --------------------------------------------------------------------------------
FEES AND EXPENSES
The fund does not impose any sales charges (loads) or other fees when you buy,
sell or exchange shares. However, when you hold shares of the fund you
indirectly pay a portion of the fund's operating expenses. These expenses are
deducted from fund assets. The figures below are based on expenses during the
fiscal year ended September 30, 1999.(1)
- --------------------------------------------------------------------------------
SHAREHOLDER FEES
- --------------------------------------------------------------------------------
MAXIMUM SALES CHARGE (LOAD) None
MAXIMUM DEFERRED SALES CHARGE (LOAD) None
ANNUAL FUND OPERATING EXPENSES AS A % OF AVERAGE NET ASSETS
- --------------------------------------------------------------------------------
Management Fees 0.40%
Distribution and Service (12b-1) Fees 0.15%
Other Expenses 0.12%
TOTAL 0.67%
- --------------------------------------------------------------------------------
(1) Actual expenses for the fiscal year were lower than those shown in the table
because of voluntary fee waivers by the advisor. See "Additional Information --
Financial Highlights" for effective management fees after waivers. The net
expenses the fund actually paid after waivers for the fiscal year ended
September 30, 1999, were:
Waiver of Fund Expenses (0.07)%
TOTAL ACTUAL ANNUAL OPERATING EXPENSES (AFTER WAIVERS) 0.60%
THE ADVISOR INTENDS TO WAIVE FEES DURING THE CURRENT FISCAL YEAR SO THAT TOTAL
FUND OPERATING EXPENSES DO NOT EXCEED 0.60%. FEE WAIVERS MAY BE DISCONTINUED AT
ANY TIME.
- --------------------------------------------------------------------------------
EXAMPLE This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 for the time periods indicated, that your investment has a 5%
return each year, and that the fund's operating expenses remain the same.
Although your actual costs and returns may differ, based on these assumptions
your costs would be:
- --------------------------------------------------------------------------------
1 year $ 68
3 years $214
5 years $373
10 years $835
7
PROSPECTUS - First American Money Market Funds
Class D Shares
<PAGE>
Fund Summaries
TREASURY OBLIGATIONS FUND
- --------------------------------------------------------------------------------
OBJECTIVE
Treasury Obligations Fund seeks maximum current income consistent with the
preservation of capital and maintenance of liquidity.
- --------------------------------------------------------------------------------
MAIN INVESTMENT STRATEGIES
Treasury Obligations Fund invests exclusively in short-term U.S. Treasury
obligations and repurchase agreements secured by U.S. Treasury obligations. The
U.S. Treasury obligations in which the fund invests include U.S. Treasury bonds,
notes, and bills. These types of Treasury securities are essentially the same
except for differences in interest rates, maturities, and dates of issuance.
U.S. Treasury obligations are backed by the full faith and credit of the United
States government.
When selecting securities for the fund, the portfolio managers use a "top-down"
approach, looking first at general economic factors and market conditions, then
at individual securities.
- --------------------------------------------------------------------------------
MAIN RISKS
The main risks of investing in this fund include:
* Although the fund seeks to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in the fund. A major change
in interest rates or a default on a repurchase agreement held by the fund
could cause the value of your investment to decline.
* The level of income you receive from the fund will be affected by movements in
short-term interest rates.
* By investing solely in U.S. Treasury obligations and repurchase agreements
secured by those securities, the fund may offer less income than a money
market fund investing in other high-quality money market securities.
- --------------------------------------------------------------------------------
FUND PERFORMANCE
Illustrations on the next page provide you with information on the fund's
volatility and performance. Of course, past performance does not guarantee
future results.
The bar chart shows you how performance of the fund's shares has varied from
year to year. The table illustrates the fund's average annual total returns over
different time periods. Both the chart and the table assume that all
distributions have been reinvested.
8
PROSPECTUS - First American Money Market Funds
Class D Shares
<PAGE>
Fund Summaries
TREASURY OBLIGATIONS FUND CONTINUED
- --------------------------------------------------------------------------------
FUND PERFORMANCE (CONTINUED)
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR(1)
[BAR CHART]
3.62% 5.41% 4.89% 5.04% 4.94%
- --------------------------------------------
1994 1995 1996 1997 1998
Best Quarter: Quarter ending June 30, 1995 Total Return 1.37%
Worst Quarter: Quarter ending March 31, 1994 Total Return 0.66%
AVERAGE ANNUAL TOTAL RETURNS Inception Since
AS OF 12/31/98 Date One Year Five Years Inception
- --------------------------------------------------------------------------------
Treasury Obligations Fund 10/4/93 4.94% 4.78% 4.68%
- --------------------------------------------------------------------------------
(1) Total return for the period from 12/31/98 to 9/30/99 was 3.26%.
- --------------------------------------------------------------------------------
FEES AND EXPENSES
The fund does not impose any sales charges (loads) or other fees when you buy,
sell or exchange shares. However, when you hold shares of the fund you
indirectly pay a portion of the fund's operating expenses. These expenses are
deducted from fund assets. The figures below are based on expenses during the
fiscal year ended September 30, 1999.(1)
- --------------------------------------------------------------------------------
SHAREHOLDER FEES
- --------------------------------------------------------------------------------
MAXIMUM SALES CHARGE (LOAD) None
MAXIMUM DEFERRED SALES CHARGE (LOAD) None
ANNUAL FUND OPERATING EXPENSES AS A % OF AVERAGE NET ASSETS
- --------------------------------------------------------------------------------
Management Fees 0.40%
Distribution and Service (12b-1) Fees 0.15%
Other Expenses 0.11%
TOTAL 0.66%
- --------------------------------------------------------------------------------
(1) Actual expenses for the fiscal year were lower than those shown in the table
because of voluntary fee waivers by the advisor. See "Additional Information --
Financial Highlights" for effective management fees after waivers. The net
expenses the fund actually paid after waivers for the fiscal year ended
September 30, 1999, were:
Waiver of Fund Expenses (0.06)%
TOTAL ACTUAL ANNUAL OPERATING EXPENSES (AFTER WAIVERS) 0.60%
THE ADVISOR INTENDS TO WAIVE FEES DURING THE CURRENT FISCAL YEAR SO THAT TOTAL
FUND OPERATING EXPENSES DO NOT EXCEED 0.60%. FEE WAIVERS MAY BE DISCONTINUED AT
ANY TIME.
- --------------------------------------------------------------------------------
EXAMPLE This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 for the time periods indicated, that your investment has a 5%
return each year, and that the fund's operating expenses remain the same.
Although your actual costs and returns may differ, based on these assumptions
your costs would be:
- --------------------------------------------------------------------------------
1 year $ 67
3 years $211
5 years $368
10 years $822
9
PROSPECTUS - First American Money Market Funds
Class D Shares
<PAGE>
Policies & Services
BUYING AND SELLING SHARES
Class D shares are offered through banks and other financial institutions that
have entered into sales agreements with the funds' distributor and that hold the
shares in an omnibus account with the transfer agent. Class D shares are
available to certain accounts for which the financial institution acts in a
fiduciary, agency or custodial capacity, such as certain trust accounts and
investment advisory accounts. To find out whether you may purchase Class D
shares, contact your financial institution.
- --------------------------------------------------------------------------------
12b-1 FEES
Each fund has adopted a plan under rule 12b-1 of the Investment Company Act that
allows it to pay the fund's distributor an annual fee for the distribution and
sale of its shares and for services provided to shareholders. Each fund pays a
Rule 12b-1 shareholder servicing fee equal to 0.15% of its average daily net
assets.
Because these fees are paid out of a fund's assets on an ongoing basis, over
time these fees will increase the cost of your investment and may cost you more
than paying other types of sales charges.
The funds' distributor uses the shareholder servicing fee to compensate brokers,
participating institutions and "one-stop" mutual fund networks for providing
ongoing services to shareholder accounts. These institutions receive annual fees
equal to 0.15% of a fund's Class D share average daily net assets attributable
to shares sold through such institutions. The distributor may pay additional
fees to institutions out of its own assets, in exchange for sales and/or
administrative services performed on behalf of the institution's customers.
- --------------------------------------------------------------------------------
CALCULATING YOUR SHARE PRICE
Your purchase price will be equal to the fund's net asset value (NAV) per share,
which is generally calculated as of the close of regular trading on the New York
Stock Exchange (usually 3:00 p.m. Central time) every day the exchange and
federally chartered banks are open. As discussed below, your order must be
received by the funds by 11:30 a.m. Central time for Tax Free Obligations Fund,
and by 3:00 p.m. Central time for Government Obligations Fund, Prime Obligations
Fund and Treasury Obligations Fund, in order for shares to be priced at that
day's NAV.
A fund's NAV is equal to the market value of its investments and other assets,
less any liabilities, divided by the number of fund shares. The securities held
by the funds are valued on the basis of amortized cost. This involves valuing an
instrument at its cost and thereafter assuming a constant amortization of any
discount or premium until the instrument's maturity, rather than looking at
actual changes in the market value of the instrument. Each fund's net asset
value is normally expected to be $1 per share.
- --------------------------------------------------------------------------------
HOW TO BUY AND SELL SHARES
You may purchase or sell shares by calling your financial institution. Shares
may be purchased and sold only on days when both the New York Stock Exchange
(NYSE) and federally chartered banks are open. Purchases and sales of shares may
also be restricted in the event of an early or unscheduled close of the NYSE.
When purchasing shares, payment must be made by wire transfer, which can be
arranged by your financial institution.
Purchase orders and redemption requests must be received by your financial
institution by the time specified by the institution to be assured same day
processing. In order for shares to be purchased or sold at that day's price, the
funds must receive purchase orders or redemption requests by 11:30 a.m. Central
time for Tax Free Obligations Fund, and by 3:00 p.m. Central time for Government
Obligations Fund, Prime Obligations Fund and Treasury Obligations Fund. It is
the responsibility of your financial institution to promptly transmit orders to
the funds. In addition, a purchase order will be effective on the day given only
if the funds' custodian receives payment by wire before the close of business.
If the fund receives a redemption request by the time specified above, payment
will generally be made the same day by transfer of federal funds. Otherwise,
payment will generally be made on the next business day.
10
PROSPECTUS - First American Money Market Funds
Class D Shares
<PAGE>
Policies & Services
MANAGING YOUR INVESTMENT
- --------------------------------------------------------------------------------
STAYING INFORMED
Shareholder Reports
Shareholder reports are mailed twice a year, in November and May. They include
financial statements, performance information, a message from your portfolio
managers, and, on an annual basis, the auditors' report.
In an attempt to reduce shareholder costs and help eliminate duplication, the
funds will try to limit their mailings to one report for each address that lists
one or more shareholders with the same last name. If you would like additional
copies, please call 1-800-637-2548.
Statements and Confirmations
Statements summarizing activity in your account are mailed at least quarterly.
Confirmations are mailed following each purchase or sale of fund shares.
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS
Dividends from a fund's net investment income are declared daily, starting on
the day you purchase your shares, and paid monthly. You will not receive a
dividend for the day on which you sell shares. If you request that your
distributions be paid in cash but those distributions cannot be delivered
because of an incorrect mailing address, the undelivered distributions and all
future distributions will be reinvested in fund shares.
- --------------------------------------------------------------------------------
TAXES
Some of the tax consequences of investing in the funds are discussed below. More
information about taxes is in the Statement of Additional Information. However,
because everyone's tax situation is unique, always consult your tax professional
about federal, state and local tax consequences.
For Government Obligations Fund, Prime Obligations Fund, and Treasury
Obligations Fund, dividends you receive from the fund are generally taxable as
ordinary income, whether you reinvest them or take them in cash. Dividends
attributable to income from U.S. government securities may be exempt from state
personal income taxes. You should consult your tax advisor for more information.
Tax Free Obligations Fund intends to meet certain federal tax requirements so
that distributions of tax-exempt interest income may be treated as
"exempt-interest dividends." These dividends are not subject to regular federal
tax. However, although it has no current intention of doing so, the fund may
invest up to 20% of its net assets in municipal securities the interest on which
is subject to the federal alternative minimum tax. Any portion of
exempt-interest dividends attributable to interest on these securities may
increase some shareholders' alternative minimum tax.
11
PROSPECTUS - First American Money Market Funds
Class D Shares
<PAGE>
Additional Information
MANAGEMENT
U.S. Bank National Association (U.S. Bank), acting through its First American
Asset Management division, is the funds' investment advisor. First American
Asset Management provides investment management services to individuals and
institutions, including corporations, foundations, pensions and retirement
plans. As of December 31, 1999, it had more than $78 billion in assets under
management, including investment company assets of more than $33 billion. As
investment advisor, First American Asset Management manages the funds' business
and investment activities, subject to the authority of the board of directors.
Each fund pays the investment advisor a monthly fee for providing investment
advisory services. During the fiscal year ended September 30, 1999, after taking
into account fee waivers, the funds paid the following investment advisory fees
to First American Asset Management:
Advisory fee
as a % of
average daily
net assets
- --------------------------------------------------------------------------------
GOVERNMENT OBLIGATIONS FUND 0.33%
PRIME OBLIGATIONS FUND 0.34%
TAX FREE OBLIGATIONS FUND 0.33%
TREASURY OBLIGATIONS FUND 0.34%
- --------------------------------------------------------------------------------
Investment Advisor
First American Asset Management
601 Second Avenue South
Minneapolis, Minnesota 55402
Distributor
SEI Investments Distribution Co.
Oaks, Pennsylvania 19456
Direct Fund Correspondence to:
First American Funds
P.O. Box 1330
Minneapolis, MN 55440-1330
Additional Compensation
U.S. Bank and other affiliates of U.S. Bancorp may act as fiduciary with
respect to plans subject to the Employee Retirement Income Security Act of 1974
(ERISA) and other trust and agency accounts that invest in the funds. As
described above, U.S. Bank receives compensation for acting as the funds'
investment advisor. U.S. Bank and its affiliates also receive compensation in
connection with the following:
CUSTODY SERVICES. As compensation for acting as the funds' custodian, U.S. Bank
is paid monthly fees equal, on an annual basis, to 0.03% of a fund's average
daily net assets. In addition, U.S. Bank is reimbursed for its out-of-pocket
expenses incurred while providing custody services to the funds.
ADMINISTRATIVE SERVICES. U.S. Bank provides or compensates others to provide
administrative services to all open-end funds in the First American family of
funds. These services include general administrative and accounting services,
transfer agency and dividend disbursing services, and shareholder services. U.S.
Bank receives total fees equal, on an annual basis, to 0.07% of the aggregate
average daily net assets of all open-end mutual funds in the First American fund
family up to $8 billion and 0.055% of the aggregate average daily net assets of
all open-end mutual funds in the First American fund family in excess of $8
billion. These fees are allocated among the funds in the First American family
of funds on the basis of their relative net asset values. Additionally, the
funds pay U.S. Bank fees based upon the number of funds and accounts maintained.
SECURITIES LENDING SERVICES. In connection with lending its portfolio
securities, Government Obligations Fund pays administrative and custodial fees
to U.S. Bank which are equal to 40% of the funds' income from these securities
lending transactions.
BROKERAGE TRANSACTIONS. When purchasing and selling portfolio securities for
the funds, the funds' investment advisor may place trades through its
affiliates, U.S. Bancorp Investments, Inc. and U.S. Bancorp Piper Jaffray Inc.,
which will earn commissions on these transactions.
SHAREHOLDER SERVICING FEES. To the extent that fund shares are held through
U.S. Bank or its broker-dealer affiliates, U.S. Bancorp Investments, Inc. and
U.S. Bancorp Piper Jaffray Inc., those entities may receive shareholder
servicing fees from the fund's distributor.
Portfolio Management
Each fund's investments are managed by a team of persons associated with First
American Asset Management.
12
PROSPECTUS - First American Money Market Funds
Class D Shares
<PAGE>
Additional Information
MORE ABOUT THE FUNDS
- --------------------------------------------------------------------------------
INVESTMENT STRATEGIES
The funds' main investment strategies are discussed in the "Fund Summaries"
section. These are the strategies that the funds' investment advisor believes
are most likely to be important in trying to achieve the funds' objectives. You
should be aware that each fund may also use strategies and invest in securities
that are not described in this prospectus, but that are described in the
Statement of Additional Information (SAI). For a copy of the SAI, call Investor
Services at 1-800-637-2548.
In addition to the securities specified in the "Fund Summaries" section, each
fund may invest in other money market funds that invest in the same types of
securities as the respective fund, including money market funds advised by U.S.
Bank.
- --------------------------------------------------------------------------------
INVESTMENT APPROACH
Each fund complies with Securities and Exchange Commission regulations that
apply to money market funds. These regulations require that each fund's
investments mature within 397 days from the date of purchase, and that the
average maturity of each fund's investments (on a dollar-weighted basis) be 90
days or less. The funds may invest in securities with variable or floating
interest rates and securities with demand features. The maturities of these
securities are determined according to regulations which allow the funds to
consider some of these securities as having maturities shorter than their stated
maturity dates. All of the funds' investments must be in U.S. dollar-denominated
high quality securities which have been determined by the funds' advisor to
present minimal credit risks.
When selecting securities for the funds, the portfolio managers use a "top-down"
approach, looking first at general economic factors and market conditions, then
at individual securities. The portfolio managers look for value while adhering
to the credit and other restrictions on money market funds.
13
PROSPECTUS - First American Money Market Funds
Class D Shares
<PAGE>
Additional Information
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
The tables that follow present performance information about the Class D shares
of each fund. This information is intended to help you understand each fund's
financial performance for the past five years or, if shorter, the period of the
fund's operations. Some of this information reflects financial results for a
single fund share. Total returns in the tables represent the rate that you would
have earned or lost on an investment in a fund, assuming you reinvested all of
your dividends and distributions.
The information for the fiscal year ended September 30, 1999, has been audited
by Ernst & Young LLP, independent auditors, whose report, along with the funds'
financial statements, is included in the funds' annual report, which is
available upon request. The information for the fiscal periods ended on or
before September 30, 1998, has been audited by other auditors.
GOVERNMENT OBLIGATIONS FUND
<TABLE>
<CAPTION>
Fiscal year ended September 30,
1999 1998 1997 1996 1995(1)
- ------------------------------------------------------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value, Beginning of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Net Investment Income 0.04 0.05 0.05 0.05 0.04
Dividends (from Net Investment Income) (0.04) (0.05) (0.05) (0.05) (0.04)
-------- -------- -------- -------- --------
Net Asset Value, End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total Return 4.52% 5.15% 5.04% 5.08% 3.85%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $439,287 $384,143 $337,199 $269,382 $198,859
Ratio of Expenses to Average Net Assets 0.60% 0.60% 0.60% 0.60% 0.60%(2)
Ratio of Net Investment Income to Average Net Assets 4.44% 5.03% 4.92% 4.96% 5.45%(2)
Ratio of Expenses to Average Net Assets (excluding waivers) 0.67% 0.67% 0.67% 0.69% 0.70%(2)
Ratio of Net Investment Income to Average Net Assets
(excluding waivers) 4.37% 4.96% 4.85% 4.87% 5.35%(2)
- ------------------------------------------------------------- -------- -------- -------- -------- --------
</TABLE>
(1) Class D shares have been offered since January 21, 1995.
(2) Annualized.
PRIME OBLIGATIONS FUND
<TABLE>
<CAPTION>
Fiscal year ended September 30,
1999 1998 1997 1996 1995(1)
- ------------------------------------------------------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value, Beginning of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Net Investment Income 0.05 0.05 0.05 0.05 0.04
Dividends (from Net Investment Income) (0.05) (0.05) (0.05) (0.05) (0.04)
-------- -------- -------- -------- --------
Net Asset Value, End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ========
Total Return 4.73% 5.26% 5.16% 5.18% 3.86%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $426,004 $233,675 $113,064 $109,213 $ 9,735
Ratio of Expenses to Average Net Assets 0.60% 0.60% 0.60% 0.60% 0.60%(2)
Ratio of Net Investment Income to Average Net Assets 4.62% 5.13% 5.02% 4.98% 5.51%(2)
Ratio of Expenses to Average Net Assets (excluding waivers) 0.66% 0.68% 0.67% 0.69% 0.72%(2)
Ratio of Net Investment Income to Average Net Assets
(excluding waivers) 4.56% 5.05% 4.95% 4.89% 5.39%(2)
- ------------------------------------------------------------- -------- -------- -------- -------- --------
</TABLE>
(1) Class D shares have been offered since January 24, 1995.
(2) Annualized.
14
PROSPECTUS - First American Money Market Funds
Class D Shares
<PAGE>
Additional Information
FINANCIAL HIGHLIGHTS CONTINUED
TAX FREE OBLIGATIONS FUND
<TABLE>
<CAPTION>
Fiscal year Fiscal period Fiscal period
ended ended ended
September 30, September 30, November 30,
1999 1998 1997(1)
- ------------------------------------------------------------- ------------- ------------- ------------
<S> <C> <C> <C>
PER SHARE DATA
Net Asset Value, Beginning of Period $ 1.00 $ 1.00 $ 1.00
Net Investment Income 0.03 0.03 --
Dividends (from Net Investment Income) (0.03) (0.03) --
------- ------- -------
Net Asset Value, End of Period $ 1.00 $ 1.00 $ 1.00
======= ======= =======
Total Return 2.66% 2.51% 0.04%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $33,464 $30,095 $ 1
Ratio of Expenses to Average Net Assets 0.60% 0.60%(2) 0.60%(2)
Ratio of Net Investment Income to Average Net Assets 2.62% 3.02%(2) 3.20%(2)
Ratio of Expenses to Average Net Assets (excluding waivers) 0.67% 0.73%(2) 9.07%(2)
Ratio of Net Investment Income (Loss) to Average Net Assets
(excluding waivers) 2.55% 2.89%(2) (5.27)%
- ------------------------------------------------------------- ------- ------- -------
</TABLE>
(1) Class D shares have been offered since November 26, 1997.
(2) Annualized.
TREASURY OBLIGATIONS FUND
<TABLE>
<CAPTION>
Fiscal year ended September 30,
1999 1998 1997 1996 1995
- ------------------------------------------------------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value, Beginning of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Net Investment Income 0.04 0.05 0.05 0.05 0.05
Dividends (from Net Investment Income) (0.04) (0.05) (0.05) (0.05) (0.05)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
Total Return 4.41% 5.10% 4.98% 5.00% 5.22%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $3,852,189 $3,854,933 $2,847,215 $1,616,130 $1,038,818
Ratio of Expenses to Average Net Assets 0.60% 0.60% 0.60% 0.60% 0.60%
Ratio of Net Investment Income to Average Net Assets 4.32% 4.98% 4.88% 4.86% 5.13%
Ratio of Expenses to Average Net Assets (excluding waivers) 0.66% 0.66% 0.68% 0.70% 0.70%
Ratio of Net Investment Income to Average Net Assets
(excluding waivers) 4.26% 4.92% 4.80% 4.76% 5.03%
- ------------------------------------------------------------- ---------- ---------- ---------- ---------- ----------
</TABLE>
15
PROSPECTUS - First American Money Market Funds
Class D Shares
<PAGE>
- --------------------------------------------------------------------------------
FOR MORE INFORMATION
More information about the funds is available in the funds' Statement of
Additional Information and annual and semiannual reports.
- --------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION (SAI)
The SAI provides more details about the funds and their policies. A current SAI
is on file with the Securities and Exchange Commission (SEC) and is incorporated
into this prospectus by reference (which means that it is legally considered
part of this prospectus).
- --------------------------------------------------------------------------------
ANNUAL AND SEMIANNUAL REPORTS
Additional information about the funds' investments is available in the funds'
annual and semiannual reports to shareholders. In the funds' annual report, you
will find a discussion of the market conditions and investment strategies that
significantly affected the funds' performance during their last fiscal year.
You can obtain a free copy of the funds' SAI and/or free copies of the funds'
most recent annual or semiannual reports by calling Investor Services at
1-800-637-2548. The material you request will be sent by first-class mail or
other means designed to ensure equally prompt delivery, within three business
days of receipt of the request.
You can also obtain copies of this information, after paying a duplicating fee,
by electronic request at the following email address: [email protected], or by
writing the SEC's Public Reference Section, Washington, D.C. 20549-0102. For
more information, call 1-202-942-8090.
Information about the funds is also available on the Internet. Text-only
versions of fund documents can be viewed online or downloaded from the EDGAR
Database on the SEC's Internet site at http://www.sec.gov.
FIRST AMERICAN FUNDS P.O. Box 1330, Minneapolis, MN 55440-1330
First American Asset Management, a division of U.S. Bank National Association,
serves as the investment advisor to the First American Funds.
First American Funds are distributed by SEI Investments Distribution Co. which
is located in Oaks, PA 19456 and is not an affiliate of U.S. Bank.
1/2000 3017-99
SEC file number: 811-05309
FAF-1903D
[LOGO] FIRST AMERICAN FUNDS(R)
THE POWER OF DISCIPLINED INVESTING(R)
<PAGE>
DECEMBER 1, 1999
AS SUPPLEMENTED
FEBRUARY 1, 2000
ASSET CLASSES
* EQUITY FUNDS
* FUNDS OF FUNDS
* BOND FUNDS
* TAX FREE BOND FUNDS
(*) MONEY MARKET FUNDS
PROSPECTUS
FIRST AMERICAN FUNDS, INC.
FIRST AMERICAN
MONEY MARKET
FUNDS
CLASS Y SHARES
GOVERNMENT OBLIGATIONS FUND
PRIME OBLIGATIONS FUND
TAX FREE OBLIGATIONS FUND
TREASURY OBLIGATIONS FUND
AS WITH ALL MUTUAL FUNDS, THE SECURITIES AND EXCHANGE COMMISSION HAS NOT
APPROVED OR DISAPPROVED THE SHARES OF THESE FUNDS, OR DETERMINED IF THE
INFORMATION IN THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANY STATEMENT TO THE
CONTRARY IS A CRIMINAL OFFENSE.
[LOGO] FIRST AMERICAN FUNDS(R)
THE POWER OF DISCIPLINED INVESTING(R)
<PAGE>
Table of
CONTENTS
FUND SUMMARIES
- --------------------------------------------------------------------------------
Government Obligations Fund 2
- --------------------------------------------------------------------------------
Prime Obligations Fund 4
- --------------------------------------------------------------------------------
Tax Free Obligations Fund 6
- --------------------------------------------------------------------------------
Treasury Obligations Fund 8
- --------------------------------------------------------------------------------
POLICIES & SERVICES
- --------------------------------------------------------------------------------
Buying and Selling Shares 10
- --------------------------------------------------------------------------------
Managing Your Investment 11
- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
Management 12
- --------------------------------------------------------------------------------
More About The Funds 13
- --------------------------------------------------------------------------------
Financial Highlights 14
- --------------------------------------------------------------------------------
FOR MORE INFORMATION Back Cover
- --------------------------------------------------------------------------------
<PAGE>
Fund Summaries
INTRODUCTION
This section of the prospectus describes the objectives of the First American
Money Market Funds, summarizes the main investment strategies used by each fund
in trying to achieve its objectives, and highlights the risks involved with
these strategies. It also provides you with information about the performance,
fees, and expenses of the funds.
AN INVESTMENT IN THE FUNDS IS NOT A DEPOSIT OF U.S. BANK NATIONAL ASSOCIATION
AND IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR
ANY OTHER GOVERNMENT AGENCY. ALTHOUGH THE FUNDS SEEK TO PRESERVE THE VALUE OF
YOUR INVESTMENT AT $1.00 PER SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN
THE FUNDS.
1
PROSPECTUS - First American Money Market Funds
Class Y Shares
<PAGE>
Fund Summaries
GOVERNMENT OBLIGATIONS FUND
- --------------------------------------------------------------------------------
OBJECTIVE
Government Obligations Fund seeks maximum current income to the extent
consistent with the preservation of capital and maintenance of liquidity.
- --------------------------------------------------------------------------------
MAIN INVESTMENT STRATEGIES
Government Obligations Fund invests exclusively in short-term U.S. government
securities and repurchase agreements secured by U.S. government securities.
U.S. government securities are bonds or other debt obligations issued or
guaranteed as to principal and interest by the U.S. government or one of its
agencies or instrumentalities. U.S. Treasury securities and some obligations of
U.S. government agencies and instrumentalities are supported by the "full faith
and credit" of the United States government. Other U.S. government securities
are backed by the right of the issuer to borrow from the U.S. Treasury. Still
others are supported only by the credit of the issuer or instrumentality.
When selecting securities for the fund, the portfolio managers use a "top-down"
approach, looking first at general economic factors and market conditions, then
at individual securities.
To generate additional income, the fund may lend securities representing up to
one-third of the value of its total assets to broker-dealers, banks, and other
institutions.
- --------------------------------------------------------------------------------
MAIN RISKS
The main risks of investing in this fund include:
* Although the fund seeks to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in the fund. A major change
in interest rates or a default on a security or repurchase agreement held by
the fund, or a securities lending agreement entered into by the fund, could
cause the value of your investment to decline.
* The level of income you receive from the fund will be affected by movements in
short-term interest rates.
* By investing solely in U.S. government securities and repurchase agreements
secured by those securities, the fund may offer less income than a money
market fund investing in other high-quality money market securities.
- --------------------------------------------------------------------------------
FUND PERFORMANCE
Illustrations on the next page provide you with information on the fund's
volatility and performance. Of course, past performance does not guarantee
future results.
The bar chart shows you how performance of the fund's shares has varied from
year to year. The table illustrates the fund's average annual total returns over
different time periods. Both the chart and the table assume that all
distributions have been reinvested.
2
PROSPECTUS - First American Money Market Funds
Class Y Shares
<PAGE>
Fund Summaries
GOVERNMENT OBLIGATIONS FUND CONTINUED
- --------------------------------------------------------------------------------
FUND PERFORMANCE (CONTINUED)
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR(1)
[BAR CHART]
5.56% 3.34% 2.89% 4.00% 5.69% 5.13% 5.26% 5.15%
- -------------------------------------------------------------------
1991 1992 1993 1994 1995 1996 1997 1998
Best Quarter: Quarter ending March 31, 1991 1.53%
Worst Quarter: Quarter ending June 30, 1993 0.71%
AVERAGE ANNUAL TOTAL RETURNS Inception Since
AS OF 12/31/98 Date One Year Five Years Inception
- --------------------------------------------------------------------------------
Government Obligations Fund 3/1/90 5.15% 5.04% 4.92%
- --------------------------------------------------------------------------------
(1) Total return for the period from 12/31/98 to 9/30/99 was 3.46%.
- --------------------------------------------------------------------------------
FEES AND EXPENSES
The fund does not impose any sales charges (loads) or other fees when you buy,
sell or exchange shares. However, when you hold shares of the fund you
indirectly pay a portion of the fund's operating expenses. These expenses are
deducted from fund assets. The figures below are based on expenses during the
fiscal year ended September 30, 1999.(1)
- --------------------------------------------------------------------------------
SHAREHOLDER FEES
- --------------------------------------------------------------------------------
MAXIMUM SALES CHARGE (LOAD) None
MAXIMUM DEFERRED SALES CHARGE (LOAD) None
ANNUAL FUND OPERATING EXPENSES AS A % OF AVERAGE NET ASSETS
- --------------------------------------------------------------------------------
Management Fees 0.40%
Distribution and Service (12b-1) Fees None
Other Expenses 0.12%
TOTAL 0.52%
- --------------------------------------------------------------------------------
(1) Actual expenses for the fiscal year were lower than those shown in the table
because of voluntary fee waivers by the advisor. See "Additional Information --
Financial Highlights" for effective management fees after waivers. The net
expenses the fund actually paid after waivers for the fiscal year ended
September 30, 1999, were:
Waiver of Fund Expenses (0.07)%
TOTAL ACTUAL ANNUAL OPERATING EXPENSES (AFTER WAIVERS) 0.45%
THE ADVISOR INTENDS TO WAIVE FEES DURING THE CURRENT FISCAL YEAR SO THAT TOTAL
FUND OPERATING EXPENSES DO NOT EXCEED 0.45%. FEE WAIVERS MAY BE DISCONTINUED AT
ANY TIME.
- --------------------------------------------------------------------------------
EXAMPLE This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 for the time periods indicated, that your investment has a 5%
return each year, and that the fund's operating expenses remain the same.
Although your actual costs and returns may differ, based on these assumptions
your costs would be:
- --------------------------------------------------------------------------------
1 year $ 53
3 years $167
5 years $291
10 years $653
3
PROSPECTUS - First American Money Market Funds
Class Y Shares
<PAGE>
Fund Summaries
PRIME OBLIGATIONS FUND
- --------------------------------------------------------------------------------
OBJECTIVE
Prime Obligations Fund seeks maximum current income to the extent consistent
with preservation of capital and maintenance of liquidity.
- --------------------------------------------------------------------------------
MAIN INVESTMENT STRATEGIES
Prime Obligations Fund invests in high-quality short-term debt obligations,
including:
* securities issued by the U.S. government or one of its agencies or
instrumentalities.
* U.S. dollar-denominated obligations of domestic and foreign banks with total
assets of at least $500 million (including fixed and variable rate
certificates of deposit, time deposits and bankers' acceptances).
* commercial paper.
* non-convertible corporate debt securities.
* loan participation interests.
* repurchase agreements for the securities in which the fund may invest.
When selecting securities for the fund, the portfolio managers use a "top-down"
approach, looking first at general economic factors and market conditions, then
at individual securities.
The fund may invest up to 25% of its total assets in dollar-denominated
obligations of U.S. branches of foreign banks which are subject to the same
regulation as U.S. banks. The fund also may invest up to 25% of its total
assets, collectively, in dollar-denominated obligations of foreign branches of
domestic banks, foreign banks, and foreign corporations.
- --------------------------------------------------------------------------------
MAIN RISKS
The main risks of investing in this fund include:
* Although the fund seeks to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in the fund. A major change
in interest rates or a default on a security or repurchase agreement held by
the fund could cause the value of your investment to decline.
* The level of income you receive from the fund will be affected by movements in
short-term interest rates.
* Foreign securities in which the fund invests, although dollar denominated, may
present some additional risk. Political or social instability or diplomatic
developments could adversely affect the securities. There is also the risk of
possible withholding taxes, seizure of foreign deposits, currency controls,
interest limitations, or other governmental restrictions which might affect
the payment of principal or interest on securities owned by the fund. In
addition, there may be less public information available about foreign
corporations and foreign banks and their branches.
- --------------------------------------------------------------------------------
FUND PERFORMANCE
Illustrations on the next page provide you with information on the fund's
volatility and performance. Of course, past performance does not guarantee
future results.
The bar chart shows you how performance of the fund's shares has varied from
year to year. The table illustrates the fund's average annual total returns over
different time periods. Both the chart and the table assume that all
distributions have been reinvested.
4
PROSPECTUS - First American Money Market Funds
Class Y Shares
<PAGE>
Fund Summaries
PRIME OBLIGATIONS FUND CONTINUED
- --------------------------------------------------------------------------------
FUND PERFORMANCE (CONTINUED)
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR(1)
[BAR CHART]
5.86% 3.54% 2.99% 4.08% 5.78% 5.23% 5.39% 5.32%
- -------------------------------------------------------------------
1991 1992 1993 1994 1995 1996 1997 1998
Best Quarter: Quarter ending March 31, 1991 1.65%
Worst Quarter: Quarter ending June 30, 1993 0.73%
AVERAGE ANNUAL TOTAL RETURNS Inception Since
AS OF 12/31/98 Date One Year Five Years Inception
- --------------------------------------------------------------------------------
Prime Obligations Fund 3/1/90 5.32% 5.16% 5.09%
- --------------------------------------------------------------------------------
(1) Total return for the period from 12/31/98 to 9/30/99 was 3.58%.
- --------------------------------------------------------------------------------
FEES AND EXPENSES
The fund does not impose any sales charges (loads) or other fees when you buy,
sell or exchange shares. However, when you hold shares of the fund you
indirectly pay a portion of the fund's operating expenses. These expenses are
deducted from fund assets. The figures below are based on expenses during the
fiscal year ended September 30, 1999.(1)
- --------------------------------------------------------------------------------
SHAREHOLDER FEES
- --------------------------------------------------------------------------------
MAXIMUM SALES CHARGE (LOAD) None
MAXIMUM DEFERRED SALES CHARGE (LOAD) None
ANNUAL FUND OPERATING EXPENSES AS A % OF AVERAGE NET ASSETS
- --------------------------------------------------------------------------------
Management Fees 0.40%
Distribution and Service (12b-1) Fees None
Other Expenses 0.11%
TOTAL 0.51%
- --------------------------------------------------------------------------------
(1) Actual expenses for the fiscal year were lower than those shown in the table
because of voluntary fee waivers by the advisor. See "Additional Information --
Financial Highlights" for effective management fees after waivers. The net
expenses the fund actually paid after waivers for the fiscal year ended
September 30, 1999, were:
Waiver of Fund Expenses (0.06)%
TOTAL ACTUAL ANNUAL OPERATING EXPENSES (AFTER WAIVERS) 0.45%
THE ADVISOR INTENDS TO WAIVE FEES DURING THE CURRENT FISCAL YEAR SO THAT TOTAL
FUND OPERATING EXPENSES DO NOT EXCEED 0.45%. FEE WAIVERS MAY BE DISCONTINUED AT
ANY TIME.
- --------------------------------------------------------------------------------
EXAMPLE This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 for the time periods indicated, that your investment has a 5%
return each year, and that the fund's operating expenses remain the same.
Although your actual costs and returns may differ, based on these assumptions
your costs would be:
- --------------------------------------------------------------------------------
1 year $ 52
3 years $164
5 years $285
10 years $640
5
PROSPECTUS - First American Money Market Funds
Class Y Shares
<PAGE>
Fund Summaries
TAX FREE OBLIGATIONS FUND
- --------------------------------------------------------------------------------
OBJECTIVE
Tax Free Obligations Fund seeks maximum current income exempt from federal
income taxes consistent with the preservation of capital and maintenance of
liquidity.
- --------------------------------------------------------------------------------
MAIN INVESTMENT STRATEGIES
Tax Free Obligations Fund invests at least 80% of its total assets in
high-quality, short-term municipal securities that pay interest that is exempt
from federal income tax, including the federal alternative minimum tax.
Municipal securities are issued by state and local governments, and certain U.S.
territorial possessions to finance public infrastructure projects such as
streets and highways, schools, water and sewer systems, hospitals, and airports.
They also may be issued to refinance outstanding obligations as well as to
obtain funds for general operating expenses and for loans to other public
institutions and facilities. There are two principal classifications of
municipal securities:
* general obligation bonds, which are backed by the full faith, credit, and
taxing power of the issuer.
* revenue bonds, which are payable only from the revenues generated by a
specific project or from another specific revenue source.
The balance of the fund's total assets may be invested in taxable money market
securities and municipal securities subject to the alternative minimum tax.
However, the fund currently does not intend to invest in these types of
securities.
When selecting securities for the fund, the portfolio managers use a "top-down"
approach, looking first at general economic factors and market conditions, then
at individual securities.
- --------------------------------------------------------------------------------
MAIN RISKS
The main risks of investing in this fund include:
* Although the fund seeks to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in the fund. A major change
in interest rates or a default on a security or repurchase agreement held by
the fund could cause the value of your investment to decline.
* The level of income you receive from the fund will be affected by movements in
short-term interest rates.
* The value of municipal securities owned by the fund may be adversely affected
by future changes in federal income tax laws, including rate reductions or the
imposition of a flat tax.
- --------------------------------------------------------------------------------
FUND PERFORMANCE
Illustrations on the next page provide you with information on the fund's
volatility and performance. Of course, past performance does not guarantee
future results.
The bar chart shows you how performance of the fund's shares has varied from
year to year. The table illustrates the fund's average annual total returns over
different time periods. Both the chart and the table assume that all
distributions have been reinvested.
6
PROSPECTUS - First American Money Market Funds
Class Y Shares
<PAGE>
Fund Summaries
TAX FREE OBLIGATIONS FUND CONTINUED
- --------------------------------------------------------------------------------
FUND PERFORMANCE (CONTINUED)
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR(1)
[BAR CHART]
3.06% 3.26% 3.12%
- ----------------------
1996 1997 1998
Best Quarter: Quarter ending June 30, 1997 0.85%
Worst Quarter: Quarter ending March 31, 1997 0.73%
AVERAGE ANNUAL TOTAL RETURNS Inception Since
AS OF 12/31/98(2) Date One Year Inception
- --------------------------------------------------------------------------------
Tax Free Obligations Fund 1/9/95 3.12% 3.22%
- --------------------------------------------------------------------------------
(1) Total return for the period from 12/31/98 to 9/30/99 was 2.07%.
(2) Performance prior to 11/25/97 is that of Qualivest Tax-Free Money Market
Fund.
- --------------------------------------------------------------------------------
FEES AND EXPENSES
The fund does not impose any sales charges (loads) or other fees when you buy,
sell or exchange shares. However, when you hold shares of the fund you
indirectly pay a portion of the fund's operating expenses. These expenses are
deducted from fund assets. The figures below are based on expenses during the
fiscal year ended September 30, 1999.(1)
- --------------------------------------------------------------------------------
SHAREHOLDER FEES
- --------------------------------------------------------------------------------
MAXIMUM SALES CHARGE (LOAD) None
MAXIMUM DEFERRED SALES CHARGE (LOAD) None
ANNUAL FUND OPERATING EXPENSES AS A % OF AVERAGE NET ASSETS
- --------------------------------------------------------------------------------
Management Fees 0.40%
Distribution and Service (12b-1) Fees None
Other Expenses 0.12%
TOTAL 0.52%
- --------------------------------------------------------------------------------
(1) Actual expenses for the fiscal year were lower than those shown in the table
because of voluntary fee waivers by the advisor. See "Additional Information --
Financial Highlights" for effective management fees after waivers. The net
expenses the fund actually paid after waivers for the fiscal year ended
September 30, 1999, were:
Waiver of Fund Expenses (0.07)%
TOTAL ACTUAL ANNUAL OPERATING EXPENSES (AFTER WAIVERS) 0.45%
THE ADVISOR INTENDS TO WAIVE FEES DURING THE CURRENT FISCAL YEAR SO THAT TOTAL
FUND OPERATING EXPENSES DO NOT EXCEED 0.45%. FEE WAIVERS MAY BE DISCONTINUED AT
ANY TIME.
- --------------------------------------------------------------------------------
EXAMPLE This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 for the time periods indicated, that your investment has a 5%
return each year, and that the fund's operating expenses remain the same.
Although your actual costs and returns may differ, based on these assumptions
your costs would be:
- --------------------------------------------------------------------------------
1 year $ 53
3 years $167
5 years $291
10 years $653
7
PROSPECTUS - First American Money Market Funds
Class Y Shares
<PAGE>
Fund Summaries
TREASURY OBLIGATIONS FUND
- --------------------------------------------------------------------------------
OBJECTIVE
Treasury Obligations Fund seeks maximum current income consistent with the
preservation of capital and maintenance of liquidity.
- --------------------------------------------------------------------------------
MAIN INVESTMENT STRATEGIES
Treasury Obligations Fund invests exclusively in short-term U.S. Treasury
obligations and repurchase agreements secured by U.S. Treasury obligations. The
U.S. Treasury obligations in which the fund invests include U.S. Treasury bonds,
notes, and bills. These types of Treasury securities are essentially the same
except for differences in interest rates, maturities, and dates of issuance.
U.S. Treasury obligations are backed by the full faith and credit of the United
States government.
When selecting securities for the fund, the portfolio managers use a "top-down"
approach, looking first at general economic factors and market conditions, then
at individual securities.
- --------------------------------------------------------------------------------
MAIN RISKS
The main risks of investing in this fund include:
* Although the fund seeks to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in the fund. A major change
in interest rates or a default on a repurchase agreement held by the fund
could cause the value of your investment to decline.
* The level of income you receive from the fund will be affected by movements in
short-term interest rates.
* By investing solely in U.S. Treasury obligations and repurchase agreements
secured by those securities, the fund may offer less income than a money
market fund investing in other high-quality money market securities.
- --------------------------------------------------------------------------------
FUND PERFORMANCE
Illustrations on the next page provide you with information on the fund's
volatility and performance. Of course, past performance does not guarantee
future results.
The bar chart shows you how performance of the fund's shares has varied from
year to year. The table illustrates the fund's average annual total returns over
different time periods. Both the chart and the table assume that all
distributions have been reinvested.
8
PROSPECTUS - First American Money Market Funds
Class Y Shares
<PAGE>
Fund Summaries
TREASURY OBLIGATIONS FUND CONTINUED
- --------------------------------------------------------------------------------
FUND PERFORMANCE (CONTINUED)
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR(1)
[BAR CHART]
5.05% 5.20% 5.10%
- ----------------------
1996 1997 1998
Best Quarter: Quarter ending December 31, 1997 1.31%
Worst Quarter: Quarter ending December 31, 1998 1.15%
AVERAGE ANNUAL TOTAL RETURNS Inception Since
AS OF 12/31/98 Date One Year Inception
- --------------------------------------------------------------------------------
Treasury Obligations Fund 1/24/95 5.10% 5.23%
- --------------------------------------------------------------------------------
(1) Total return for the period from 12/31/98 to 9/30/99 was 3.38%.
- --------------------------------------------------------------------------------
FEES AND EXPENSES
The fund does not impose any sales charges (loads) or other fees when you buy,
sell or exchange shares. However, when you hold shares of the fund you
indirectly pay a portion of the fund's operating expenses. These expenses are
deducted from fund assets. The figures below are based on expenses during the
fiscal year ended September 30, 1999.(1)
- --------------------------------------------------------------------------------
SHAREHOLDER FEES
- --------------------------------------------------------------------------------
MAXIMUM SALES CHARGE (LOAD) None
MAXIMUM DEFERRED SALES CHARGE (LOAD) None
ANNUAL FUND OPERATING EXPENSES AS A % OF AVERAGE NET ASSETS
- --------------------------------------------------------------------------------
Management Fees 0.40%
Distribution and Service (12b-1) Fees None
Other Expenses 0.11%
TOTAL 0.51%
- --------------------------------------------------------------------------------
(1) Actual expenses for the fiscal year were lower than those shown in the table
because of voluntary fee waivers by the advisor. See "Additional Information --
Financial Highlights" for effective management fees after waivers. The net
expenses the fund actually paid after waivers for the fiscal year ended
September 30, 1999, were:
Waiver of Fund Expenses (0.06)%
TOTAL ACTUAL ANNUAL OPERATING EXPENSES (AFTER WAIVERS) 0.45%
THE ADVISOR INTENDS TO WAIVE FEES DURING THE CURRENT FISCAL YEAR SO THAT TOTAL
FUND OPERATING EXPENSES DO NOT EXCEED 0.45%. FEE WAIVERS MAY BE DISCONTINUED AT
ANY TIME.
- --------------------------------------------------------------------------------
EXAMPLE This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 for the time periods indicated, that your investment has a 5%
return each year, and that the fund's operating expenses remain the same.
Although your actual costs and returns may differ, based on these assumptions
your costs would be:
- --------------------------------------------------------------------------------
1 year $ 52
3 years $164
5 years $285
10 years $640
9
PROSPECTUS - First American Money Market Funds
Class Y Shares
<PAGE>
Policies & Services
BUYING AND SELLING SHARES
Class Y shares are offered through banks and other financial institutions that
have entered into sales agreements with the funds' distributor and that hold the
shares in an omnibus account with the transfer agent. Class Y shares are
available to certain accounts for which the financial institution acts in a
fiduciary, agency or custodial capacity, such as certain trust accounts and
investment advisory accounts. To find out whether you may purchase Class Y
shares, contact your financial institution.
- --------------------------------------------------------------------------------
CALCULATING YOUR SHARE PRICE
Your purchase price will be equal to the fund's net asset value (NAV) per share,
which is generally calculated as of the close of regular trading on the New York
Stock Exchange (usually 3:00 p.m. Central time) every day the exchange and
federally chartered banks are open. As discussed below, your order must be
received by the funds by 11:30 a.m. Central time for Tax Free Obligations Fund,
and by 3:00 p.m. Central time for Government Obligations Fund, Prime Obligations
Fund and Treasury Obligations Fund, in order for shares to be priced at that
day's NAV.
A fund's NAV is equal to the market value of its investments and other assets,
less any liabilities, divided by the number of fund shares. The securities held
by the funds are valued on the basis of amortized cost. This involves valuing an
instrument at its cost and thereafter assuming a constant amortization of any
discount or premium until the instrument's maturity, rather than looking at
actual changes in the market value of the instrument. Each fund's net asset
value is normally expected to be $1 per share.
- --------------------------------------------------------------------------------
HOW TO BUY AND SELL SHARES
You may purchase or sell shares by calling your financial institution. Shares
may be purchased and sold only on days when both the New York Stock Exchange
(NYSE) and federally chartered banks are open. Purchases and sales of shares may
also be restricted in the event of an early or unscheduled close of the NYSE.
When purchasing shares, payment must be made by wire transfer, which can be
arranged by your financial institution.
Purchase orders and redemption requests must be received by your financial
institution by the time specified by the institution to be assured same day
processing. In order for shares to be purchased or sold at that day's price, the
funds must receive purchase orders or redemption requests by 11:30 a.m. Central
time for Tax Free Obligations Fund, and by 3:00 p.m. Central time for Government
Obligations Fund, Prime Obligations Fund, and Treasury Obligations Fund. It is
the responsibility of your financial institution to promptly transmit orders to
the funds. In addition, a purchase order will be effective on the day given only
if the funds' custodian receives payment by wire before the close of business.
If the fund receives a redemption request by the time specified above, payment
will generally be made the same day by transfer of federal funds. Otherwise,
payment will generally be made on the next business day.
- --------------------------------------------------------------------------------
HOW TO EXCHANGE SHARES
If your investment goals or your financial needs change, you may exchange your
shares for Class Y shares of another First American fund. Exchanges will be made
at the net asset value per share of each fund at the time of the exchange. There
is no fee to exchange shares. If you are no longer eligible to hold Class Y
shares, for example, if you decide to discontinue your fiduciary, agency or
custodian account, you may exchange your shares for Class A shares at net asset
value. Class A shares have higher expenses than Class Y shares.
To exchange your shares, call your financial institution. In order for your
shares to be exchanged the same day, you must call your financial institution by
the time specified by the institution and your exchange order must be received
by the funds by 11:30 a.m. Central time for Tax Free Obligations Fund, and by
3:00 p.m. Central time for Government Obligations Fund, Prime Obligations Fund,
and Treasury Obligations Fund. It is the responsibility of your financial
institution to promptly transmit your exchange order to the funds. Before
exchanging into any fund, be sure to read its prospectus carefully. A fund may
change or cancel its exchange policies at any time. You will be notified of any
changes. The funds have the right to limit exchanges to four times per year.
10
PROSPECTUS - First American Money Market Funds
Class Y Shares
<PAGE>
Policies & Services
MANAGING YOUR INVESTMENT
- --------------------------------------------------------------------------------
STAYING INFORMED
Shareholder Reports
Shareholder reports are mailed twice a year, in November and May. They include
financial statements, performance information, a message from your portfolio
managers and, on an annual basis, the auditor's report.
In an attempt to reduce shareholder costs and help eliminate duplication, the
funds will try to limit their mailings to one report for each address that lists
one or more shareholders with the same last name. If you would like additional
copies, please call 1-800-637-2548.
Statements and Confirmations
Statements summarizing activity in your account are mailed at least quarterly.
Confirmations are mailed following each purchase or sale of fund shares.
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS
Dividends from a fund's net investment income are declared daily, starting on
the day you purchase your shares, and paid monthly. You will not receive a
dividend for the day on which you sell shares.
Dividends will be reinvested in additional shares of the same fund, unless you
request that distributions be reinvested in another First American fund or paid
in cash. This request may be made on your new account form or by writing to the
fund or your financial institution. If you request that your distributions be
paid in cash but those distributions cannot be delivered because of an incorrect
mailing address, the undelivered distributions and all future distributions will
be reinvested in fund shares.
- --------------------------------------------------------------------------------
TAXES
Some of the tax consequences of investing in the funds are discussed below. More
information about taxes is in the Statement of Additional Information. However,
because everyone's tax situation is unique, always consult your tax professional
about federal, state and local tax consequences.
For Government Obligations Fund, Prime Obligations Fund and Treasury Obligations
Fund, dividends you receive from the fund are generally taxable as ordinary
income, whether you reinvest them or take them in cash. Dividends attributable
to income from U.S. government securities may be exempt from state personal
income taxes. You should consult your tax advisor for more information.
Tax Free Obligations Fund intends to meet certain federal tax requirements so
that distributions of tax-exempt interest income may be treated as
"exempt-interest dividends." These dividends are not subject to regular federal
tax. However, although it has no current intention of doing so, the fund may
invest up to 20% of its net assets in municipal securities the interest on which
is subject to the federal alternative minimum tax. Any portion of
exempt-interest dividends attributable to interest on these securities may
increase some shareholders' alternative minimum tax.
11
PROSPECTUS - First American Money Market Funds
Class Y Shares
<PAGE>
Additional Information
MANAGEMENT
U.S. Bank National Association (U.S. Bank), acting through its First American
Asset Management division, is the funds' investment advisor. First American
Asset Management provides investment management services to individuals and
institutions, including corporations, foundations, pensions and retirement
plans. As of December 31, 1999, it had more than $78 billion in assets under
management, including investment company assets of more than $33 billion. As
investment advisor, First American Asset Management manages the funds' business
and investment activities, subject to the authority of the board of directors.
Each fund pays the investment advisor a monthly fee for providing investment
advisory services. During the fiscal year ended September 30, 1999 after taking
into account fee waivers, the funds paid the following investment advisory fees
to First American Asset Management:
Advisory fee
as a % of
average daily
net assets
- --------------------------------------------------------------------------------
GOVERNMENT OBLIGATIONS FUND 0.33%
PRIME OBLIGATIONS FUND 0.34%
TAX FREE OBLIGATIONS FUND 0.33%
TREASURY OBLIGATIONS FUND 0.34%
- --------------------------------------------------------------------------------
Investment Advisor
First American Asset Management
601 Second Avenue South
Minneapolis, Minnesota 55402
Distributor
SEI Investments Distribution Co.
Oaks, Pennsylvania 19456
Direct Fund Correspondence to:
First American Funds
P.O. Box 1330
Minneapolis, MN 55440-1330
Additional Compensation
U.S. Bank and other affiliates of U.S. Bancorp may act as fiduciary with
respect to plans subject to the Employee Retirement Income Security Act of 1974
(ERISA) and other trust and agency accounts that invest in the funds. As
described above, U.S. Bank receives compensation for acting as the funds'
investment advisor. U.S. Bank and its affiliates also receive compensation in
connection with the following:
CUSTODY SERVICES. As compensation for acting as the funds' custodian, U.S. Bank
is paid monthly fees equal, on an annual basis, to 0.03% of a fund's average
daily net assets. In addition, U.S. Bank is reimbursed for its out-of-pocket
expenses incurred while providing custody services to the funds.
ADMINISTRATIVE SERVICES. U.S. Bank provides or compensates others to provide
administrative services to all open-end funds in the First American family of
funds. These services include general administrative and accounting services,
transfer agency and dividend disbursing services, and shareholder services. U.S.
Bank receives total fees equal, on an annual basis, to 0.07% of the aggregate
average daily net assets of all open-end mutual funds in the First American fund
family up to $8 billion and 0.055% of the aggregate average daily net assets of
all open-end mutual funds in the First American fund family in excess of $8
billion. These fees are allocated among the funds in the First American family
of funds on the basis of their relative net asset values. Additionally, the
funds pay U.S. Bank fees based upon the number of funds and accounts maintained.
SECURITIES LENDING SERVICES. In connection with lending its portfolio
securities, Government Obligations Fund pays administrative and custodial fees
to U.S. Bank which are equal to 40% of the fund's income from these securities
lending transactions.
BROKERAGE TRANSACTIONS. When purchasing and selling portfolio securities for
the funds, the funds' investment advisor may place trades through its
affiliates, U.S. Bancorp Investments, Inc. and U.S. Bancorp Piper Jaffray Inc.,
which will earn commissions on these transactions.
SHAREHOLDER SERVICING FEES. To the extent that fund shares are held through
U.S. Bank or its broker-dealer affiliates, U.S. Bancorp Investments, Inc. and
U.S. Bancorp Piper Jaffray Inc., those entities may receive shareholder
servicing fees from the funds' distributor.
Portfolio Management
Each fund's investments are managed by a team of persons associated with First
American Asset Management.
12
PROSPECTUS - First American Money Market Funds
Class Y Shares
<PAGE>
Additional Information
MORE ABOUT THE FUNDS
- --------------------------------------------------------------------------------
INVESTMENT STRATEGIES
The funds' main investment strategies are discussed in the "Fund Summaries"
section. These are the strategies that the funds' investment advisor believes
are most likely to be important in trying to achieve the funds' objectives. You
should be aware that each fund may also use strategies and invest in securities
that are not described in this prospectus, but that are described in the
Statement of Additional Information (SAI). For a copy of the SAI, call Investor
Services at 1-800-637-2548.
In addition to the securities specified in the "Fund Summaries" section, each
fund may invest in other money market funds that invest in the same types of
securities as the respective fund, including money market funds advised by U.S.
Bank.
Investment Approach
Each fund complies with Securities and Exchange Commission regulations that
apply to money market funds. These regulations require that each fund's
investments mature within 397 days from the date of purchase, and that the
average maturity of each fund's investments (on a dollar-weighted basis) be 90
days or less. The funds may invest in securities with variable or floating
interest rates and securities with demand features. The maturities of these
securities are determined according to regulations which allow the funds to
consider some of these securities as having maturities shorter than their stated
maturity dates. All of the funds' investments must be in U.S. dollar-denominated
high quality securities which have been determined by the funds' advisor to
present minimal credit risks.
When selecting securities for the funds, the portfolio managers use a "top-down"
approach, looking first at general economic factors and market conditions, then
at individual securities. The portfolio managers look for value while adhering
to the credit and other restrictions on money market funds.
13
PROSPECTUS - First American Money Market Funds
Class Y Shares
<PAGE>
Additional Information
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
The tables that follow present performance information about the Class Y shares
of each fund. This information is intended to help you understand each fund's
financial performance for the past five years or, if shorter, the period of the
fund's operations. Some of this information reflects financial results for a
single fund share. Total returns in the tables represent the rate that you would
have earned or lost on an investment in a fund, assuming you reinvested all of
your dividends and distributions.
The information for the fiscal year ended September 30, 1999, has been audited
by Ernst & Young LLP, independent auditors, whose report, along with the funds'
financial statements, is included in the funds' annual report, which is
available upon request. The information for the fiscal periods ended on or
before September 30, 1998, has been audited by other auditors.
GOVERNMENT OBLIGATIONS FUND
<TABLE>
<CAPTION>
Fiscal year ended September 30,
1999 1998 1997 1996 1995
- ------------------------------------------------------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value, Beginning of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Net Investment Income 0.05 0.05 0.05 0.05 0.05
Dividends (from Net Investment Income) (0.05) (0.05) (0.05) (0.05) (0.05)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
Total Return 4.67% 5.30% 5.20% 5.24% 5.55%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ 938,897 $1,000,043 $ 946,196 $ 777,594 $ 551,286
Ratio of Expenses to Average Net Assets 0.45% 0.45% 0.45% 0.45% 0.45%
Ratio of Net Investment Income to Average Net Assets 4.57% 5.18% 5.07% 5.10% 5.44%
Ratio of Expenses to Average Net Assets (excluding waivers) 0.52% 0.52% 0.52% 0.54% 0.60%
Ratio of Net Investment Income to Average Net Assets
(excluding waivers) 4.50% 5.11% 5.00% 5.01% 5.29%
- ------------------------------------------------------------- ---------- ---------- ---------- ---------- ----------
</TABLE>
PRIME OBLIGATIONS FUND
<TABLE>
<CAPTION>
Fiscal year ended September 30,
1999 1998 1997 1996 1995
- ------------------------------------------------------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value, Beginning of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Net Investment Income 0.05 0.05 0.05 0.05 0.06
Dividends (from Net Investment Income) (0.05) (0.05) (0.05) (0.05) (0.06)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
Total Return 4.89% 5.42% 5.32% 5.34% 5.64%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $6,228,207 $5,445,685 $3,615,873 $3,166,213 $2,911,055
Ratio of Expenses to Average Net Assets 0.45% 0.45% 0.45% 0.45% 0.45%
Ratio of Net Investment Income to Average Net Assets 4.78% 5.28% 5.19% 5.20% 5.53%
Ratio of Expenses to Average Net Assets (excluding waivers) 0.51% 0.53% 0.52% 0.54% 0.60%
Ratio of Net Investment Income to Average Net Assets
(excluding waivers) 4.72% 5.20% 5.12% 5.11% 5.38%
- ------------------------------------------------------------- ---------- ---------- ---------- ---------- ----------
</TABLE>
14
PROSPECTUS - First American Money Market Funds
Class Y Shares
<PAGE>
Additional Information
FINANCIAL HIGHLIGHTS CONTINUED
TAX FREE OBLIGATIONS FUND(1)
<TABLE>
<CAPTION>
Fiscal year Fiscal period Fiscal period
ended ended ended
September 30, September 30, November 30, Fiscal year ended July 31,
1999 1999 1997 1997 1996 1995(2)
- --------------------------------------------------- ------------- ------------- ------------ ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value, Beginning of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Net Investment Income 0.03 0.03 0.01 0.03 0.03 0.02
Dividends (from Net Investment Income) (0.03) (0.03) (0.01) (0.03) (0.03) (0.02)
-------- -------- -------- ------- ------- -------
Net Asset Value, End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======= ======= =======
Total Return 2.82% 2.67% 1.08% 3.17% 3.22% 1.88%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $338,490 $272,995 $ 10,703 $ 9,137 $ 3,895 $ 1,264
Ratio of Expenses to Average Net Assets 0.45% 0.45%(3) 0.64%(3) 0.48% 0.41% 0.59%(3)
Ratio of Net Investment Income to Average Net Assets 2.75% 3.13%(3) 3.09%(3) 3.13% 2.92% 3.38%(3)
Ratio of Expenses to Average Net Assets
(excluding waivers) 0.52% 0.58%(3) 0.97%(3) 0.83% 0.79% 0.94%(3)
Ratio of Net Investment Income to Average Net Assets
(excluding waivers) 2.68% 3.00%(3) 2.76%(3) 2.78% 2.54% 3.03%(3)
- ---------------------------------------------------- -------- -------- -------- ------- ------- -------
</TABLE>
(1) The financial highlights for Tax Free Obligations Fund include the
historical financial highlights of the Qualivest Tax-Free Money Market Fund. The
assets of Qualivest Tax-Free Money Market Fund were acquired by Tax Free
Obligations Fund on November 25, 1997.
(2) Class Y shares have been offered since January 9, 1995.
(3) Annualized.
TREASURY OBLIGATIONS FUND
<TABLE>
<CAPTION>
Fiscal year ended September 30,
1999 1998 1997 1996 1995(1)
- ------------------------------------------------------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value, Beginning of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Net Investment Income 0.05 0.05 0.05 0.05 0.04
Dividends (from Net Investment Income) (0.05) (0.05) (0.05) (0.05) (0.04)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
Total Return 4.57% 5.26% 5.14% 5.15% 3.83%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $2,620,803 $1,803,608 $ 897,797 $ 317,392 $ 117,171
Ratio of Expenses to Average Net Assets 0.45% 0.45% 0.45% 0.45% 0.45%(2)
Ratio of Net Investment Income to Average Net Assets 4.49% 5.13% 5.03% 5.00% 5.50%(2)
Ratio of Expenses to Average Net Assets (excluding waivers) 0.51% 0.51% 0.53% 0.55% 0.55%(2)
Ratio of Net Investment Income to Average Net Assets
(excluding waivers) 4.43% 5.07% 4.95% 4.90% 5.40%(2)
- ------------------------------------------------------------- ---------- ---------- ---------- ---------- ----------
</TABLE>
(1) Class Y shares have been offered since January 24, 1995.
(2) Annualized.
15
PROSPECTUS - First American Money Market Funds
Class Y Shares
<PAGE>
- --------------------------------------------------------------------------------
FOR MORE INFORMATION
More information about the funds is available in the funds' Statement of
Additional Information and annual and semiannual reports.
- --------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION (SAI)
The SAI provides more details about the funds and their policies. A current SAI
is on file with the Securities and Exchange Commission (SEC) and is incorporated
into this prospectus by reference (which means that it is legally considered
part of this prospectus).
- --------------------------------------------------------------------------------
ANNUAL AND SEMIANNUAL REPORTS
Additional information about the funds' investments is available in the funds'
annual and semiannual reports to shareholders. In the funds' annual report, you
will find a discussion of the market conditions and investment strategies that
significantly affected the funds' performance during their last fiscal year.
You can obtain a free copy of the funds' SAI and/or free copies of the funds'
most recent annual or semiannual reports by calling Investor Services at
1-800-637-2548. The material you request will be sent by first-class mail or
other means designed to ensure equally prompt delivery, within three business
days of receipt of the request.
You can also obtain copies of this information, after paying a duplicating fee,
by electronic request at the following email address: [email protected], or by
writing the SEC's Public Reference Section, Washington, D.C. 20549-0102. For
more information, call 1-202-942-8090.
Information about the funds is also available on the Internet. Text-only
versions of fund documents can be viewed online or downloaded from the EDGAR
Database on the SEC's Internet site at http://www.sec.gov.
FIRST AMERICAN FUNDS P.O. Box 1330, Minneapolis, MN 55440-1330
First American Asset Management, a division of U.S. Bank National Association,
serves as the investment advisor to the First American Funds.
First American Funds are distributed by SEI Investments Distribution Co. which
is located in Oaks, PA 19456 and is not an affiliate of U.S. Bank.
1/2000 3017-99
SEC file number: 811-05309
FAF-1902Y
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