<PAGE>
[LOGO]
ADVANTUS
FAMILY OF FUNDS
ANNUAL REPORT TO SHAREHOLDERS
ADVANTUS HORIZON FUND
SEPTEMBER 30, 1995
<PAGE>
ADVANTUS HORIZON FUND
TABLE OF CONTENTS
PERFORMANCE UPDATE 2
INVESTMENTS IN SECURITIES 8
STATEMENT OF ASSETS AND LIABILITIES 11
STATEMENT OF OPERATIONS 12
STATEMENT OF CHANGES IN NET ASSETS 13
NOTES TO FINANCIAL STATEMENTS 14
INDEPENDENT AUDITORS' REPORT 20
FEDERAL INCOME TAX INFORMATION 21
SHAREHOLDER SERVICES 22
<PAGE>
October 31, 1995
[PHOTO]
Dear Shareholders:
The first nine months of 1995 produced exceptional returns for both stock and
bond investors. Subdued inflation and a growing economy combined to create a
positive secular environment for financial assets.
A 140 basis point reduction in the 30-year Treasury Bond produced a 21 percent
return since the beginning of the year. Corporate bonds returned 16.5 percent
according to the Lehman Corporate Bond Index. If this pace continues, the bond
market will finish off one of its best years ever - a sharp reversal from 1994.
Investors reacted strongly to every actual and perceived economic shift creating
unusual volatility in the bond market. The sharp sell off in July and August was
just such an over reaction. Long term yields will be driven by continuing
concerns about the budget process in Washington, the near term direction of the
economy and the dollar's performance. Nonetheless, we expect Treasury Bills to
remain trading in the 6-7 percent range.
Technology, financial and consumer companies drove the stock market to all-time
record highs in the third quarter as measured by the S&P 500. While this
produced spectacular results, the extended run may create additional
vulnerability in the market. The chief concerns are disappointing earnings
announcements and a general slow down in profitability. According to Ibbotson
Associates, there have only been four times since 1927 that stock prices have
risen more in the first nine months of the year. In each instance, the market
cooled off in the final quarter. Factors which could push the market up in the
short term, however, are a significant interest rate reduction or a surge in
foreign portfolio inflows.
The current economic expansion is displaying the mixed signals of maturation.
However, we do not expect an early end to the recovery. The economy's recent
slow growth pattern should lengthen the life of the expansion by reducing
inflationary pressures and consequently, the need for money tightening measures.
It is unlikely that the economy will regain the robust pace of the early stages
of the expansion.
The market does hold opportunity for investors. Diversification across
industries and geographic regions remains a key element to successful investing.
However, determining which investments will benefit in both the near and long
term requires professional experience. Advantus Capital Management, Inc. offers
a family of eight funds which are designed to help you reach your goals with a
thoughtful, well conceived investment strategy.
Sincerely,
Paul Gooding, President
Advantus Capital Management, Inc.
<PAGE>
ADVANTUS HORIZON FUND
PERFORMANCE UPDATE
[PHOTO]
JAMES P. TATERA, CFA
SENIOR VICE PRESIDENT
AND PORTFOLIO MANAGER
The Advantus Horizon Fund is a mutual
fund designed for investors seeking
long-term growth of capital combined with
a moderate level of current income. The
Fund plans to achieve its objective by
investing in equity securities
diversified among individual companies
and industries. The Fund invests
primarily in dividend-paying common
stocks of established companies with
strong long-term outlooks--but may also
invest in companies perceived to be
temporarily undervalued or which because
of new management, products or markets,
show promise of substantially improved
results.
-Dividends paid quarterly.
-Capital gains distributions paid annually.
PERFORMANCE
The stock market continued its winning ways in this year's third quarter,
posting the third consecutive significant up quarter in a row. The S&P 500, a
broad indicator of market performance, returned 8.0 percent for the quarter
while posting an outstanding 29.7 percent return for the trailing 12 months.
The Horizon Fund, which focuses on medium to large capitalization companies with
above average growth expectations, had a solid year. The Fund returned the
following for each class of shares currently offered:
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED
4TH QUARTER ENDING 9/30/95 9/30/95
----------------- -------------------- ----------------
<S> <C> <C> <C>
Class A* 8.3 % 16.3 % 24.8 %
Class B* 8.0 % 11.3 % 23.7 %
Class C (since
3/1/95 inception)* 8.1 % 15.8 % 18.4 %
</TABLE>
This performance compares favorably to the average Growth and Income Fund**
which posted returns of 7.1 percent, 15.8 percent, and 23.1 percent for the same
periods, respectively, according to the Lipper Analytical Services Inc.
PORTFOLIO RECAP
The broad strength in the market made it impossible to find a sector which did
not experience positive returns. The magnitude of the overall markets' 30
percent return suggests equal strength across all sectors. In reality, the
market's performance was fueled by a few select areas--technology, financials
and consumer growth (health care, beverages, and tobacco). Many of these
companies exhibit continuing high growth and/or improving growth trends.
Companies in these sectors benefit from dropping interest rates and are capable
of maintaining consistent growth in a slow growth economy.
The Horizon Fund benefited from many of the above trends by overweighting in
technology and consumer growth, stocks. The Fund was negatively impacted by its
underweight in financials. The financial area (particularly the banking group)
is one we underweighted early, not expecting interest rates to fall as much as
they did.
Investors in the Horizon Fund will also note the relatively low dividend yield
on the portfolio. This is a direct result of our valuation disciplines which
underweighted in those sectors historically paying a meaningful dividend.
2
<PAGE>
ADVANTUS HORIZON FUND
SEPTEMBER 30, 1995
Over the past year this strategy has worked well as two of the highest yielding
sectors (energy and electric/gas utilities) had some of the lowest performance.
Individual companies which performed admirably include technology oriented
companies like Intel and Gartner Group, health care companies--Medtronic and
Columbia/HCA, and consumer related issues--Lone Star Steakhouse and Tommy
Hilfiger. Disappointing earnings from Sunbeam Corporation and Value Health held
down the Fund's overall performance.
OUTLOOK
We remain upbeat about the market yet realistic enough to know that markets do
not go up forever. After the significant run up in prices so far in 1995, it
only seems realistic to expect the market to backoff somewhat in the near term.
With the apparent slowing of the U.S. economy, it is our expectation that
earnings disappointments will continue to rise thus introducing some risk into
the market. We have been eliminating issues from the portfolio where we feel are
vulnerability to earnings disappointments, and focusing on those companies with
stable earnings growth.
If interest rates and inflation stay relatively low, today's economic slowdown
will be mild and lead to improving comparisons and valuations for those
companies which continue to have solid earnings growth. The Horizon Fund is well
positioned to benefit from this scenario.
*Historical results are not an indication of future performance. These
performance results do not reflect the impact of Class A's maximum 5 percent
front-end sales charge or Class B's maximum 5 percent contingent deferred sales
charge. Class C has neither a front-end nor a contingent deferred charge charge.
**Average return of 40 Growth and Income funds according to Lipper Analytical
Services, Inc.
3
<PAGE>
ADVANTUS HORIZON FUND
SEPTEMBER 30, 1995
COMPARISON OF CHANGE IN VALUE OF A HYPOTHETICAL $10,000
INVESTMENT IN ADVANTUS HORIZON FUND, S&P 500
AND CONSUMER PRICE INDEX
CLASS A
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL
RETURN
<S> <C> <C> <C>
One year 18.5%
Five year 14.4%
Ten year 11.3%
Class A S&P 500 CPI
10/31/85 10,000 10,000 10,000
10/31/86 10,191 13,324 10,157
10/31/87 10,822 14,172 10,608
10/31/88 12,041 16,285 11,060
10/31/89 14,729 20,568 11,567
10/31/90 13,872 19,026 12,295
10/31/91 19,264 25,398 12,654
10/31/92 21,249 27,924 13,060
10/31/93 22,856 32,087 13,410
9/30/94 23,183 32,550 13,816
9/30/95 28,924 42,214 14,120
</TABLE>
On the chart above you can see how the Advantus Horizon Fund Class A shares'
total return compared to the Dividend Adjusted S&P 500 and the Consumer Price
Index. The three lines represent the cumulative total return of a hypothetical
$10,000 investment made in Advantus Horizon Fund Class A on October 31, 1985
through September 30, 1995.
4
<PAGE>
ADVANTUS HORIZON FUND
SEPTEMBER 30, 1995
CLASS B
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL
RETURN
<S> <C> <C> <C>
One year 18.7%
Since inception (8/19/94) 18.4%
Class B S&P 500 CPI
8/19/94 10,000 10,000 10,000
9/30/94 10,129 9,951 10,067
9/30/95 12,074 12,905 10,289
</TABLE>
On the chart above you can see how the Advantus Horizon Fund Class B shares'
total return compared to the Dividend Adjusted S&P 500 and the Consumer Price
Index. The three lines represent the cumulative total return of a hypothetical
$10,000 investment made on inception date of the Advantus Horizon Fund Class B
shares (August 19, 1994) through September 30, 1995.
5
<PAGE>
ADVANTUS HORIZON FUND
SEPTEMBER 30, 1995
CLASS C
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C> <C> <C>
Total return
Since inception
(3/1/95) 18.4%
Class C S&P 500 CPI
3/1/95 10,000 10,000 10,000
9/30/95 11,844 12,169 10,146
</TABLE>
On the chart above you can see how the Advantus Horizon Fund Class C shares'
total return compared to the Dividend Adjusted S&P 500 and the Consumer Price
Index. The three lines represent the cumulative total return of a hypothetical
$10,000 investment made on inception date of the Advantus Horizon Fund Class C
shares (March 1, 1995) through September 30, 1995.
The above charts are useful because they provide you with more information about
your investments. There are limitations, however. An index may reflect the
performance of securities that the Fund may not hold. Also, the index does not
deduct sales charges, investment advisory fees and other fund expenses, whereas
your Fund does. Performance presented for the Fund reflects the deduction of the
maximum 5 percent front-end sales charge for Class A and the maximum applicable
contingent deferred sales charge for Class B. Individuals cannot buy even an
unmanaged index fund without incurring some charges and expenses. Sales charges
pay for your financial adviser's investment advice.
Historical results are not an indication of future performance.
6
<PAGE>
ADVANTUS HORIZON FUND
SEPTEMBER 30, 1995
TEN LARGEST STOCK HOLDINGS
<TABLE>
<CAPTION>
MARKET % OF STOCK
COMPANY SHARES VALUE PORTFOLIO
- ---------------------------- ----------- ---------- ---------------
<S> <C> <C> <C>
Columbia/HCA Healthcare
Corporation............... 30,381 $1,477,275 3.9%
Office Depot, Inc........... 40,782 1,228,557 3.3%
Home Depot Inc.............. 29,700 1,184,288 3.1%
General Electric Company.... 16,988 1,082,985 2.9%
First Financial
Management................ 11,000 1,073,874 2.9%
DSC Communications.......... 17,300 1,025,024 2.7%
Gartner..................... 30,800 1,008,699 2.7%
Casey's General Stores,
Inc....................... 44,200 1,000,025 2.7%
Computer Associates
International............. 23,324 985,439 2.6%
Idexx Laboratories, Inc..... 26,400 983,400 2.6%
---------- ---
$11,049,566 29.4%
---------- ---
---------- ---
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Advantus Horizon Fund, Inc.
Capital Goods 6.40%
Consumer Goods and Services 53.10%
Credit Sensitive 13.30%
Intermediate Goods and
Services 8.30%
Technology 16.10%
Cash and Other
Assets/Liabilities 2.80%
</TABLE>
7
<PAGE>
ADVANTUS HORIZON FUND
INVESTMENTS IN SECURITIES
SEPTEMBER 30, 1995
(Percentages of each investment category relate to total net assets.)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE(A)
- ---------- ----------
<C> <S> <C>
COMMON STOCKS (97.2%)
CAPITAL GOODS (6.4%)
Machinery (6.4%)
19,300 Elsag Bailey Process Automation (b)(c)................. $ 629,663
16,988 General Electric Company............................... 1,082,985
13,400 Kaydon Corporation..................................... 395,300
8,985 York International Corp................................ 378,493
----------
2,486,441
----------
CONSUMER GOODS AND SERVICES (53.1%)
Consumer Goods (24.0%)
8,322 Colgate-Palmolive Company.............................. 554,453
30,381 Columbia/HCA Healthcare Corporation.................... 1,477,275
22,120 Fisher Scientific International Inc.................... 716,135
26,400 Idexx Laboratories Inc (b)............................. 983,400
7,000 Medtronic Inc.......................................... 376,250
11,941 Pepsico, Inc........................................... 608,991
16,200 Pfizer Inc............................................. 864,675
11,100 Procter & Gamble Company............................... 854,700
43,800 Pyxis Corporation (b).................................. 848,625
10,500 Teva Pharmaceutical Industries ADR (c)................. 379,313
17,400 United Health Care..................................... 850,425
31,397 Value Health Incorporated (b).......................... 832,021
----------
9,346,263
----------
<CAPTION>
MARKET
SHARES VALUE(A)
- ---------- ----------
<C> <S> <C>
CONSUMER GOODS AND SERVICES--CONTINUED
Consumer Services (10.4%)
21,800 Carmike Cinemas Inc (b)................................ $ 479,600
19,347 CUC International Inc (b).............................. 674,727
30,800 Gartner (b)............................................ 1,008,699
11,400 GTECH Holdings Corporation (b)......................... 343,425
16,000 International House of Pancakes (b).................... 420,000
12,800 Lone Star Steakhouse & Saloon, Inc (b)................. 524,800
19,370 Manpower............................................... 561,730
----------
4,012,981
----------
Retail (14.8%)
14,600 Barnes & Noble Inc (b)................................. 558,450
35,620 Borders Group Incorporated (b)......................... 609,993
33,000 BT Office Products International (b)................... 433,125
44,200 Casey's General Stores Inc............................. 1,000,025
29,700 Home Depot Inc......................................... 1,184,288
8,200 Kohl's Inc (b)......................................... 425,375
40,782 Office Depot, Inc (b).................................. 1,228,557
20,600 Orchard Supply Hardware (b)............................ 298,700
----------
5,738,513
----------
Consumer Cyclicals (3.9%)
12,295 Exide Corporation...................................... 614,750
</TABLE>
See accompanying notes to investments in securities.
8
<PAGE>
ADVANTUS HORIZON FUND
INVESTMENTS IN SECURITIES--CONTINUED
<TABLE>
<CAPTION>
MARKET
SHARES VALUE(A)
- ---------- ----------
<C> <S> <C>
CONSUMER GOODS AND SERVICES--CONTINUED
27,100 Tommy Hilfiger Corporation (b)......................... $ 880,750
----------
1,495,500
----------
CREDIT SENSITIVE (13.3%)
Finance (10.6%)
6,552 American International Group, Inc...................... 556,920
7,600 First Data Corp........................................ 471,200
11,000 First Financial Management............................. 1,073,874
6,205 First Union Corporation................................ 316,455
9,000 MGIC Investment Corporation............................ 515,250
11,350 Norwest Corporation.................................... 371,713
45,200 Roosevelt Financial Group, Inc......................... 796,650
----------
4,102,062
----------
Utilities (2.7%)
11,600 AT&T Corporation....................................... 762,700
8,175 Florida Progress Corporation........................... 264,666
----------
1,027,366
----------
INTERMEDIATE GOODS AND SERVICES (8.3%)
Energy (2.6%)
4,450 Amoco Corporation...................................... 285,356
3,800 Mobil Corporation...................................... 378,575
<CAPTION>
MARKET
SHARES VALUE(A)
- ---------- ----------
<C> <S> <C>
INTERMEDIATE GOODS AND SERVICES-- CONTINUED
2,860 Royal Dutch Petroleum ADR (c).......................... $ 351,065
----------
1,014,996
----------
Materials (3.1%)
9,530 Albany International Corp.............................. 222,764
12,000 Lubrizol Corporation................................... 391,500
19,173 McWhorter Technology Inc (b)........................... 294,785
7,240 Valspar Corporation.................................... 276,930
----------
1,185,979
----------
Transportation (2.6%)
28,700 American Freightways (b)............................... 430,500
3,800 Fritz Companies (b).................................... 280,013
3,940 Norfolk Southern Corporation........................... 294,515
----------
1,005,028
----------
TECHNOLOGY (16.1%)
23,324 Computer Associates International...................... 985,439
19,100 Danka Business Systems PLC (c)......................... 687,600
17,300 DSC Communications (b)................................. 1,025,024
13,100 EMC Corporation (b).................................... 237,438
13,200 Informix Corporation (b)............................... 429,000
15,300 Integrated Device Technology, Inc (b).................. 382,500
</TABLE>
See accompanying notes to investments in securities.
9
<PAGE>
ADVANTUS HORIZON FUND
INVESTMENTS IN SECURITIES--CONTINUED
<TABLE>
<CAPTION>
MARKET
SHARES VALUE(A)
- ---------- ----------
<C> <S> <C>
TECHNOLOGY--CONTINUED
6,300 Intel.................................................. $ 378,788
19,150 Oracle Corporation (b)................................. 734,881
12,700 Worldcom, Incorporated (b)............................. 407,988
3,200 Xerox Corporation...................................... 430,000
<CAPTION>
MARKET
SHARES VALUE(A)
- ---------- ----------
<C> <S> <C>
TECHNOLOGY--CONTINUED
11,400 3 Com (b).............................................. $ 518,700
----------
6,217,358
----------
Total common stocks
(cost: $25,233,341)................................................. 37,632,487
----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
- ----------
<C> <S> <C> <C> <C>
SHORT-TERM SECURITIES (3.2%)
$ 200,000 U.S. Treasury Bill..................................... 5.55%-5.57% 10/12/95 199,630
1,050,000 U.S. Treasury Bill..................................... 5.33%-5.48% 12/07/95 1,039,294
-----------
Total short-term securities (cost: $1,239,237)...................................... 1,238,924
-----------
Total investments in securities (cost: $26,472,578)(d).............................. $38,871,411
-----------
-----------
<FN>
Notes to Investments in Securities
(a) Securites are valued by procedures described in note 2 to the financial
statements.
(b) Presently non-income producing.
(c) The Fund held 5.3% of net assets in foreign securities as of September 30,
1995.
(d) At September 30, 1995 the cost of securities for federal income tax
purposes was $26,473,722. The aggregate unrealized appreciation and
depreciation of investments in securities based on this cost were:
Gross unrealized appreciation....................................................................... $ 13,036,527
Gross unrealized depreciation....................................................................... (638,838)
------------
Net unrealized appreciation......................................................................... $ 12,397,689
------------
------------
</TABLE>
10
<PAGE>
ADVANTUS HORIZON FUND
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1995
<TABLE>
<S> <C>
ASSETS
Investments in securities, at market value--see accompanying schedule for
detailed listing (identified cost: $26,472,578)................................ $ 38,871,411
Cash in bank on demand deposit.................................................. 113,601
Receivable for Fund shares sold................................................. 1,661
Dividends receivable............................................................ 23,624
------------
Total assets................................................................ 39,010,297
------------
LIABILITIES
Payable for investment securities purchased..................................... 142,727
Payable for Fund shares repurchased............................................. 85,991
Payable to Adviser.............................................................. 46,721
------------
Total liabilities........................................................... 275,439
------------
Net assets applicable to outstanding capital stock.............................. $ 38,734,858
------------
------------
Represented by:
Capital stock--$.01 par value (note 1)........................................ $ 18,512
Additional paid-in capital.................................................... 23,992,248
Accumulated net realized gains from investments............................... 2,325,265
Unrealized appreciation of investments........................................ 12,398,833
------------
Total--representing net assets applicable to outstanding capital stock...... $ 38,734,858
------------
------------
Net assets applicable to outstanding Class A Shares............................. $ 36,039,924
------------
------------
Net assets applicable to outstanding Class B Shares............................. $ 2,592,256
------------
------------
Net assets applicable to outstanding Class C Shares............................. $ 102,678
------------
------------
Shares outstanding and net asset value per share
Class A--Shares outstanding 1,721,318......................................... $ 20.94
------------
------------
Class B--Shares outstanding 124,967........................................... $ 20.74
------------
------------
Class C--Shares outstanding 4,949............................................. $ 20.75
------------
------------
</TABLE>
See accompanying notes to financial statements.
11
<PAGE>
ADVANTUS HORIZON FUND
STATEMENT OF OPERATIONS
YEAR ENDED SEPTEMBER 30, 1995
<TABLE>
<S> <C>
Investment income:
Interest...................................................................... $ 134,983
Dividends..................................................................... 298,862
-----------
Total investment income..................................................... 433,845
-----------
Expenses (note 4):
Investment advisory fee....................................................... 276,972
Distribution fees--Class A.................................................... 100,294
Distribution fees--Class B.................................................... 11,637
Distribution fees--Class C.................................................... 270
Administrative services fee................................................... 38,600
Custodian fees................................................................ 7,535
Auditing and accounting services.............................................. 19,000
Legal fees.................................................................... 5,972
Directors' fees............................................................... 770
Registration fees............................................................. 40,126
Printing and shareholder reports.............................................. 28,452
Insurance..................................................................... 5,900
Other......................................................................... 17,022
-----------
Total expenses.............................................................. 552,550
Less fees and expenses waived or absorbed:
Class A distribution fees................................................... (50,147)
Other fund expenses......................................................... (2,814)
-----------
Total fees and expenses waived or absorbed.................................. (52,961)
-----------
Total net expenses.......................................................... 499,589
-----------
Investment loss--net........................................................ (65,744)
-----------
Realized and unrealized gains on investments:
Net realized gains on investments (note 3).................................... 2,609,672
Net change in unrealized appreciation or depreciation on investments.......... 5,347,200
-----------
Net gains on investments.................................................... 7,956,872
-----------
Net increase in net assets resulting from operations............................ $ 7,891,128
-----------
-----------
</TABLE>
See accompanying notes to financial statements.
12
<PAGE>
ADVANTUS HORIZON FUND
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SEPTEMBER 30, 1995 AND
PERIOD FROM NOVEMBER 1, 1993 TO SEPTEMBER 30, 1994
<TABLE>
<CAPTION>
1995 1994
------------ ------------
<S> <C> <C>
Operations:
Investment loss--net................................................ $ (65,744) $ (3,911)
Net realized gains on investments................................... 2,609,672 736,521
Net change in unrealized appreciation or depreciation of
investments........................................................ 5,347,200 (290,620)
------------ ------------
Increase in net assets resulting from operations.................. 7,891,128 441,990
------------ ------------
Distributions to shareholders from net realized gains on investments:
Class A........................................................... (981,881) (940,050)
Class B........................................................... (16,148) --
------------ ------------
Total distributions............................................... (998,029) (940,050)
------------ ------------
Capital share transactions (notes 4 and 5):
Proceeds from sales:
Class A........................................................... 3,817,143 4,972,723
Class B........................................................... 2,211,285 96,045
Class C........................................................... 96,617 --
Shares issued as a result of reinvested dividends:
Class A........................................................... 973,291 917,268
Class B........................................................... 16,148 --
Payments for redemption of shares:
Class A........................................................... (6,723,485) (4,018,515)
Class B........................................................... (32,497) (10)
Class C........................................................... (1,043) --
------------ ------------
Increase in net assets from capital share transactions............ 357,459 1,967,511
------------ ------------
Total increase in net assets...................................... 7,250,558 1,469,451
Net assets at beginning of period..................................... 31,484,300 30,014,849
------------ ------------
Net assets at end of period........................................... $ 38,734,858 $ 31,484,300
------------ ------------
------------ ------------
</TABLE>
See accompanying notes to financial statements.
13
<PAGE>
ADVANTUS HORIZON FUND
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1995
(1) ORGANIZATION
The Advantus Horizon Fund, Inc. (the Fund) is registered under the
Investment Company Act of 1940 (as amended) as a diversified, open-end
management investment company. On February 14, 1995 shareholders of the Fund
approved a name change to Advantus Horizon Fund, Inc. (effective March 1, 1995).
Prior to March 1, 1995 the Fund was known as MIMLIC Investors Fund I, Inc.
The Fund currently issues three classes of shares: Class A, Class B and
Class C shares. Class A shares are sold subject to a front-end sales charge.
Class B shares are sold subject to a contingent deferred sales charge payable
upon redemption if redeemed within six years of purchase. Class C shares are
sold without either a front-end sales charge or a contingent deferred sales
charge. Both Class B and Class C shares are subject to a higher Rule 12b-1 fee
than Class A shares. Both Class B and Class C shares automatically convert to
Class A shares at net asset value after a specified holding period. Such holding
periods decline as the amount of the purchase increases and range from 28 to 84
months after purchase for Class B shares and 40 to 96 months after purchase for
Class C shares. All three classes of shares have identical voting, dividend,
liquidation and other rights and the same terms and conditions, except that the
level of distribution fees and sales charges charged differs between Class A,
Class B and Class C shares. Income, expenses (other than distribution fees) and
realized and unrealized gains or losses on investments are allocated to each
class of shares based upon its relative net assets.
On January 18, 1994, the Board of Directors elected to change the fiscal
year end of the Fund from October 31 to September 30.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies followed by the Fund are summarized as
follows:
INVESTMENTS IN SECURITIES
Investments in securities traded on a national exchange are valued at the
last sales price on that exchange prior to the time when assets are valued;
securities traded in the over-the-counter market and listed securities for which
no sale was reported on that date are valued on the basis of the last current
bid price. When market quotations are not readily available, securities are
valued at fair value as determined in good faith by the Board of Directors. Such
fair values are determined using pricing services or prices quoted by
independent brokers. Short-term securities are valued at market.
Security transactions are accounted for on the date the securities are
purchased or sold. Realized gains and losses are calculated on the
identified-cost basis. Dividend income is recognized on the ex-dividend date and
interest income, including amortization of bond premium and discount computed on
a level yield basis, is accrued daily.
14
<PAGE>
NOTES TO FINANCIAL STATEMENTS--CONTINUED
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)
FEDERAL TAXES
The Fund's policy is to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
taxable income to shareholders. Therefore, no income tax provision is required.
The Fund's policy is to make required minimum distributions prior to December
31, in order to avoid federal excise tax.
Net investment income (loss) and net realized gains (losses) may differ for
financial statement and tax purposes primarily because of temporary book-to-tax
differences. The character of distributions made during the year from net
investment income or net realized gains may differ from their ultimate
characterization for federal income tax purposes. Also, due to the timing of
dividend distributions, the fiscal year in which amounts are distributed may
differ from the year that the income (loss) or realized gains (losses) were
recorded by the Fund.
On the statement of assets and liabilities, as a result of permanent
book-to-tax differences, a reclassification adjustment was made to increase
undistributed net investment income and decrease additional paid-in capital by
$65,744.
DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income are declared and paid quarterly.
Realized gains, if any, are paid annually.
(3) INVESTMENT SECURITY TRANSACTIONS
For the year ended September 30, 1995, purchases of securities and proceeds
from sales, other than temporary investments in short-term securities aggregated
$15,322,690 and $15,105,744, respectively.
(4) EXPENSES AND RELATED PARTY TRANSACTIONS
On February 14, 1995 shareholders of the Fund approved a new investment
advisory agreement with Advantus Capital Management, Inc. (Advantus Capital).
Advantus Capital is a wholly-owned subsidiary of MIMLIC Asset Management Company
(MIMLIC Management) which, prior to March 1, 1995, served as investment adviser
to the Fund. Under the agreement, Advantus Capital manages the Fund's assets and
provides research, statistical and advisory services and pays related office
rental and executive expenses and salaries. In addition, as part of the advisory
fee, Advantus Capital pays the expenses of the Fund's transfer, dividend
disbursing and redemption agent (The Minnesota Mutual Life Insurance Company
(Minnesota Mutual), the parent of MIMLIC Management). The fee for investment
management and advisory services is based on the average daily net assets of the
Fund at the annual rate of .80 percent, which is the same as under the old
agreement with MIMLIC Management.
The Fund has adopted separate Plans of Distribution applicable to Class A,
Class B and Class C shares, respectively, relating to the payment of certain
distribution expenses pursuant to Rule 12b-1 under the Investment Company Act of
1940 (as amended). The Fund pays distribution fees to MIMLIC Sales Corporation
(MIMLIC Sales), the underwriter of the Fund and a wholly-owned subsidiary of
MIMLIC
15
<PAGE>
NOTES TO FINANCIAL STATEMENTS--CONTINUED
(4) EXPENSES AND RELATED PARTY TRANSACTIONS--(CONTINUED)
Management, to be used to pay certain expenses incurred in the distribution,
promotion and servicing of the Fund's shares. The Class A Plan provides for a
fee up to .30 percent of average daily net assets of Class A shares. The Class B
and Class C Plans provide for a fee up to 1.00 percent of average daily net
assets of Class B and Class C shares, respectively. The Class B and Class C 1.00
percent fee is comprised of a .75 percent distribution fee and a .25 percent
service fee. MIMLIC Sales is currently waiving that portion of Class A
distribution fees which exceeds, as a percentage of average daily net assets,
.15 percent. MIMLIC Sales waived Class A distribution fees in the amount of
$50,147 for the year ended September 30, 1995.
The Fund also bears certain other operating expenses including outside
directors' fees, custodian fees, registration fees, printing and shareholder
reports, legal, auditing and accounting services, organizational costs and other
miscellaneous expenses.
The Fund pays an administrative services fee to Minnesota Mutual for
accounting, auditing, legal and other administrative services which Minnesota
Mutual provides. Prior to February 1, 1995, the administrative service fee was
$3,450 per month. Effective February 1, 1995, the administrative service fee is
$3,100 per month.
Advantus Capital (MIMLIC Management prior to March 1, 1995) directly incurs
and pays the above operating expenses and the Fund in turn reimburses Advantus
Capital. During the year ended September 30, 1995, Advantus Capital voluntarily
agreed to absorb $2,814 in expenses that were otherwise payable by the Fund.
Sales charges received by MIMLIC Sales for distributing the Fund's three
classes of shares amounted to $125,141.
As of September 30, 1995, Minnesota Mutual Life and subsidiaries and the
directors and officers of the Fund as a whole owned the following shares:
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENTAGE OWNED
------------------ -------------------
<S> <C> <C>
Class A..................................................................... 535,417 31.1%
Class B..................................................................... 3,025 2.4%
Class C..................................................................... 569 11.5%
</TABLE>
Legal fees were paid to a law firm of which the Fund's secretary is a
partner in the amount of $5,588.
16
<PAGE>
NOTES TO FINANCIAL STATEMENTS--CONTINUED
(5) CAPITAL SHARE TRANSACTIONS
Transactions in shares for the year ended September 30, 1995 and the period
from November 1, 1993 to September 30, 1994 for Class A shares, the year ended
September 30, 1995 and the period from August 19, 1994 to September 30, 1994 for
Class B shares and the period from March 1, 1995 to September 30, 1995 for Class
C shares were as follows:
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
---------------------- -------------------- -----------
1995 1994 1995 1994 1995
---------- ---------- --------- --------- -----------
<S> <C> <C> <C> <C> <C>
Sold........................................................... 209,657 290,469 119,911 5,594 5,001
Issued for reinvested distributions............................ 59,591 53,235 1,084 -- --
Redeemed....................................................... (358,505) (234,962) (1,621) (1) (52)
---------- ---------- --------- --------- -----
(89,257) 108,742 119,374 5,593 4,949
---------- ---------- --------- --------- -----
---------- ---------- --------- --------- -----
</TABLE>
17
<PAGE>
NOTES TO FINANCIAL STATEMENTS--CONTINUED
(6) FINANCIAL HIGHLIGHTS
Per share data for a share of capital stock and selected information for
each period are as follows:
<TABLE>
<CAPTION>
CLASS A
---------------------------------------------------------
PERIOD FROM
NOVEMBER 1,
YEAR ENDED 1993 TO YEAR ENDED OCTOBER 31,
SEPTEMBER SEPTEMBER -------------------------
30, 1995 30, 1994 1993 1992 1991
----------- ----------- ------- ------ ------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period...................... $ 17.34 $ 17.64 $ 16.73 $15.65 $11.41
----------- ----------- ------- ------ ------
Income from investment
operations:
Net investment income
(loss)..................... (.03) -- .05 .10 .17
Net gains or losses on
securities (both realized
and unrealized)............ 4.17 .25 1.20 1.47 4.25
----------- ----------- ------- ------ ------
Total from investment
operations............... 4.14 .25 1.25 1.57 4.42
----------- ----------- ------- ------ ------
Less distributions:
Dividends from net
investment income.......... -- -- (.05) (.12) (.18)
Distributions from capital
gains...................... (.54) (.55) (.29) (.37) --
----------- ----------- ------- ------ ------
Total distributions....... (.54) (.55) (.34) (.49) (.18)
----------- ----------- ------- ------ ------
Net asset value, end of
period...................... $ 20.94 $ 17.34 $ 17.64 $16.73 $15.65
----------- ----------- ------- ------ ------
----------- ----------- ------- ------ ------
Total return (b).............. 24.8% 1.4%(c) 7.6% 10.3% 38.9%
Net assets, end of period (in
thousands).................. $36,040 $31,387 $30,015 $24,919 $17,608
Ratio of expenses to average
daily net assets (g)........ 1.41% 1.43%(f) 1.31% 1.40% 1.36%
Ratio of net investment income
(loss) to average daily net
assets (g).................. (.15)% (.01)%(f) .27% .61% 1.20%
Portfolio turnover rate
(excluding short-term
securities)................. 46.8% 43.5% 47.0% 20.6% 16.9%
<FN>
- ----------
(a) Commencement of operations.
(b) Total return figures are based on a share outstanding throughout the
period and assumes reinvestment of distributions at net asset value. Total
return figures do not reflect the impact of sales charges.
(c) Total return is presented for the period from November 1, 1993 to
September 30, 1994.
(d) Total return is presented for the period from August 19, 1994,
commencement of operations, to September 30, 1994.
(e) Total return is presented for the period from March 1, 1995, commencement
of operations, to September 30, 1995.
(f) Adjusted to an annual basis.
(g) The Fund's Adviser and Distributor voluntarily waived or absorbed $52,961,
$51,147, $48,807, $32,341 and $22,098 in expenses for the year ended
September 30, 1995, the period ended September 30, 1994, and the years
ended October 31, 1993, 1992 and 1991, respectively. If Class A shares had
been charged for these expenses, the ratio of expenses to average daily
net assets would have been 1.57%, 1.61%, 1.49%, 1.55% and 1.54%,
respectively, and the ratio of net investment income to average daily net
assets would have been (.31)%, (.19)%, .09%, .46% and 1.02%, respectively.
If Class B shares had been charged for these expenses, the ratio of
expenses to average daily net assets would have been 2.25% and the ratio
of net investment loss to average daily net assets would have been (1.05)%
for the year ended September 30, 1995. If Class C Shares had been charged
for these expenses, the ratio of expenses to average daily net assets
would have been 2.25% and the ratio of net investment loss to average
daily net assets would have been (1.13)% for the period from March 1, 1995
to September 30, 1995.
(h) Ratios presented for the period from August 19, 1994 to September 30, 1994
are not annualized as they are not indicative of anticipated results.
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
CLASS B CLASS C
---------------------------- ---------------
PERIOD FROM PERIOD FROM
AUGUST 19, MARCH 1,
YEAR ENDED 1994(A) TO 1995(A) TO
SEPTEMBER SEPTEMBER SEPTEMBER 30,
30, 1995 30, 1994 1995
----------- ----------- ---------------
<S> <C> <C> <C>
Net asset value, beginning of
period...................... $ 17.33 $ 17.11 $ 17.52
----------- ----------- ---------------
Income from investment
operations:
Net investment income
(loss)..................... (0.10) (.01) (.06)
Net gains or losses on
securities (both realized
and unrealized)............ 4.05 .23 3.29
----------- ----------- ---------------
Total from investment
operations............... 3.95 .22 3.23
----------- ----------- ---------------
Less distributions:
Dividends from net
investment income.......... -- -- --
Distributions from capital
gains...................... (.54) -- --
----------- ----------- ---------------
Total distributions....... (.54) -- --
----------- ----------- ---------------
Net asset value, end of
period...................... $ 20.74 $ 17.33 $ 20.75
----------- ----------- ---------------
----------- ----------- ---------------
Total return (b).............. 23.7% 1.3%(d) 18.4%(e)
Net assets, end of period (in
thousands).................. $2,592 $97 $103
Ratio of expenses to average
daily net assets (g)........ 2.24% .30%(h) 2.24%(f)
Ratio of net investment income
(loss) to average daily net
assets (g).................. (1.05)% (.13)%(h) (1.13)%(f)
Portfolio turnover rate
(excluding short-term
securities)................. 46.8% 43.5% 46.8%
</TABLE>
19
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders
Advantus Horizon Fund, Inc.:
We have audited the accompanying statement of assets and liabilities,
including the schedule of investments in securities, of the Advantus Horizon
Fund, Inc. (the Fund) as of September 30, 1995 and the related statement of
operations for the year then ended, the statement of changes in net assets for
the year ended September 30, 1995 and the period from November 1, 1993 to
September 30, 1994 and the financial highlights for the year ended September 30,
1995, the period from November 1, 1993 to September 30, 1994 and each of the
years in the three-year period ended October 31, 1993. These financial
statements and the financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and the financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Investment securities held in custody are confirmed to us by the
custodian. As to securities purchased or sold but not received or delivered, we
request confirmations from brokers, and where replies are not received, we carry
out other appropriate auditing procedures. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and the financial highlights
referred to above present fairly, in all material respects, the financial
position of the Fund as of September 30, 1995 and the results of its operations,
changes in its net assets and financial highlights, for the periods stated in
the first paragraph above, in conformity with generally accepted accounting
principles.
KPMG Peat Marwick LLP
Minneapolis, Minnesota
November 3, 1995
20
<PAGE>
FEDERAL INCOME TAX INFORMATION
The following information for federal income tax purposes is presented as an
aid to shareholders in reporting the distributions paid by the Fund in the
fiscal year ended September 30, 1995. Dividends for the 1995 calendar year will
be reported to you on Form 1099-Div in late January 1996. Shareholders should
consult a tax adviser on how to report these distributions for state and local
purposes.
CLASS A AND CLASS B
Capital gains distribution--taxable as long-term capital gains
<TABLE>
<CAPTION>
PAYABLE DATE PER SHARE
- ---------------------------------------- -----------
<S> <C>
December 19, 1995....................... $ 0.5411
-----------
-----------
</TABLE>
CLASS C
No distributions paid.
21
<PAGE>
SHAREHOLDER SERVICES
The Advantus Family of Funds offers a variety of services that enhance your
ability to manage your assets. Check each Fund's prospectus for the details of
the services and any limitations that apply to a particular Fund.
EXCHANGE PRIVILEGES: You can move all or part of your investment dollars from
one fund to any other Advantus Fund you own (for identical registrations within
the same class) at any time as your needs change. Exchanges are at the then
current net asset value. (Exchanges from the Money Market Fund will incur the
applicable sales charge, if not previously subjected to the charge.)
Shareholders may make four exchanges or telephone transfers between the Funds
each calendar year without incurring a transaction charge. Thereafter, there
will be a $7.50 transaction charge for each additional exchange or transfer
within the calendar year. Systematic Exchange Plans are exempt from this charge.
INCOME DISTRIBUTION FLEXIBILITY: You can have your fund dividends and other
distributions automatically reinvested with no sales charge, direct them from
one Advantus Fund to any other you own within the Fund family or, if you desire,
we'll pay you in cash.
SYSTEMATIC WITHDRAWAL PLAN: You can set up a plan to receive checks at
specified intervals from your fund account - subject to minimum guidelines.
Depending upon the performance of the underlying investment options, the cash
value may be worth more or less than the original amount invested when
withdrawn.
DIRECT DEPOSITS: At your request we will deposit your dividends or systematic
withdrawals directly into your checking or savings account instead of sending
you a check.
TELEPHONE TRANSFER: You may transfer money from one Advantus account to any
other Advantus account you own just by calling our toll free number. Sign up for
telephone exchanges on the Advantus Application or complete the telephone
authorization form.
SYSTEMATIC TRANSFER: If you have an Advantus Money Market account you may
transfer a set amount of money to another Advantus Fund to diversify your
investment portfolio and take advantage of dollar-cost averaging.
AUTOMATIC PAYMENT OF INSURANCE PREMIUMS: You may automatically pay your
Minnesota Mutual insurance premiums out of your Advantus Money Market account.
REDUCED SALES CHARGES: Letter of Intent, combined purchases with spouse,
children or single trust estates, and the Right of Accumulation make it possible
for you to reduce the sales charge on Advantus's non-money market funds.
SPECIAL PURCHASE PLANS: Our special purchase plans enable you to open an
Advantus fund account for as little as $25 and lower your average share cost
through "dollar-cost averaging." (Dollar-cost averaging does not assure a
profit, nor does it prevent loss in declining markets.) One of these plans--The
Automatic Investment Plan--allows you to invest automatically each month from
your checking or saving account.
IRAS, OTHER QUALIFIED PLAN: You can use the Advantus Family of Funds for your
Individual Retirement Account or other qualified plan including SEPs, profit
sharing, money purchase or defined benefit plans.
GROUP INVESTMENT PLAN: This plan provides employers and employees with a
convenient means for investing in the funds through payroll deduction.
22
<PAGE>
TELEPHONE REDEMPTION: You may call us and redeem shares over the phone. Amounts
over $1,000 will be wire transferred to your personal bank account. The
prevailing wire charge will be added to the withdrawal amount. Amounts for less
than $1,000 will be mailed to your bank on your behalf. To set this up, please
send a voided check from your bank. Depending upon the performance of the
underlying investment options, the cash value may be worth more or less than the
original amount invested upon redemption.
ACCOUNT UPDATES: You'll receive written confirmation of every investment you
initiate (monthly statements for your Money Market account) and quarterly
reports to help you track all of your investments in the Advantus Family of
Funds, and annual tax statements. Semiannual and annual reports will provide you
with portfolio information, fund performance data and the current investment
outlook.
TOLL-FREE SERVICE LINE: For your convenience in obtaining information and
assistance directly from MIMLIC Sales Corporation, call 1-800-443-3677. Our
voice response system is available from 7 a.m. to 3 a.m. Monday through Friday,
and 8 a.m. to 5 p.m. on Saturday. This system allows you to access current net
asset values and your account balances.
HOW TO INVEST
You can invest in one or more of the eight Advantus Funds through your local
registered representative of MIMLIC Sales Corporation, distributor of the Funds.
Contact your representative for information and a prospectus for any of the
Advantus Funds you are interested in.
MINIMUM INVESTMENTS: Your initial investment in any of the Advantus Funds can
be as small as $25 when you use our Systematic Investment Plan. Minimum lump-sum
initial investment is $250. Minimum subsequent investment is $25.
THE FUND'S MANAGER
Advantus Capital Management, Inc., investment adviser to the Fund, selects
and reviews the Fund's investments and provides executive and other personnel
for the Fund's management.
Advantus Capital Management, Inc.'s six portfolio managers manage eight
mutual funds containing $272 million in assets in addition to $1.8 billion in
assets for other clients. Advantus Capital's seasoned portfolio managers average
more than 11 years of investment experience.
ADVANTUS FAMILY OF FUNDS
Advantus Bond Fund
Advantus Horizon Fund
Advantus Spectrum Fund
Advantus Enterprise Fund
Advantus Cornerstone Fund
Advantus Money Market Fund
Advantus Mortgage Securities Fund
Advantus International Balanced Fund
23
<PAGE>
THIS REPORT HAS BEEN PREPARED FOR SHAREHOLDERS AND MAY BE DISTRIBUTED
TO OTHERS ONLY IF PRECEDED OR ACCOMPANIED BY A CURRENT PROSPECTUS.
READ THE PROSPECTUS CAREFULLY BEFORE YOU INVEST.
ADVANTUS-TM-
FAMILY OF FUNDS
MIMLIC SALES CORPORATION
400 ROBERT STREET NORTH
ST. PAUL, MN 55101-2098
1-800-443-3677
<PAGE>
MIMLIC SALES CORPORATION BULK RATE
400 ROBERT STREET NORTH U.S. POSTAGE PAID
ST. PAUL, MN 55101-2098 ST. PAUL, MN
PERMIT NO. 3547
FORWARDING AND RETURN POSTAGE GUARANTEED,
ADDRESS CORRECTION REQUESTED
F.48637 11/95
