<PAGE>
HORIZON
ADVANTUS HORIZON FUND, INC.
ANNUAL REPORT TO SHAREHOLDERS DATED SEPTEMBER 30, 1999
[LOGO]
[ART]
<PAGE>
ADVANTUS HORIZON FUND
TABLE OF CONTENTS
<TABLE>
<S> <C>
PERFORMANCE UPDATE 2
INVESTMENTS IN SECURITIES 7
STATEMENT OF ASSETS AND
LIABILITIES 10
STATEMENT OF OPERATIONS 11
STATEMENTS OF CHANGES IN NET
ASSETS 12
NOTES TO FINANCIAL STATEMENTS 13
INDEPENDENT AUDITORS' REPORT 18
FEDERAL INCOME TAX INFORMATION 19
SHAREHOLDER SERVICES 20
</TABLE>
<PAGE>
LETTER FROM THE PRESIDENT [PHOTO]
Dear Shareholder:
Growth has been the economic story throughout this fiscal year. The domestic
growth story continues, albeit growth is slower than in the past. The Federal
Reserve's proactive stance (i.e., raising rates BEFORE reported inflation)
demonstrates the Fed's continuing resolve to control inflation by reigning in
domestic growth. So far, the Fed has achieved this delicate economic balance.
World growth is slowly accelerating. The global economic picture is vastly
different than it was one year ago. Japan has worked its way back from a
devastating recession and financial crisis. Emerging markets are surging and
international markets, overall, are strong. The world's central banks have
played critical roles in getting their respective countries back on track. Like
the Fed, the world's central banks plotted a course of action, and like the Fed,
these banks espoused an expansionary bias. Relative to conditions, each bank
aggressively used its monetary policy to lower interest rates. These actions
have contributed to global economic recovery, country by country.
As the rest of the world rallies, the conditions in the U.S. will likely put
more pressures on our economic systems. The fixed income market may feel some
pressure too due to higher commodity prices, global economic growth, a weaker
dollar, tight labor market, and a Fed poised to tighten. Conditions may also
bode poorly for the stock market. After several years of good equity markets -
driven by both robust growth and higher valuation levels - investors are acutely
aware that the environment is changing. The markets will continue under pressure
if interest rates move higher and valuations peak, challenging the long-running
bull market. On a brighter note, the loss of price momentum in the U.S. equity
market will allow earnings growth to catch up with multiples, thus building the
base for the next leg up in the secular bull market for equities.
If at any time you have questions about your Advantus mutual fund investments, I
encourage you to contact your financial professional or call Advantus
Shareholders Services at 1-800-665-6005. This number allows you 24-hour access,
seven days a week, to your mutual fund account information via an automated
voice-response system. Or you can speak directly to an Advantus Shareholder
Services Representative during business hours, 8 A.M. to 4:45 P.M. (Central
Time) any day that the New York Stock Exchange is open for business.
We appreciate your continued patronage of Advantus Funds. Helping you move
closer to your investment goals is important to us, and we look forward to
working long-term with you and your financial professional. Thank you for
investing with Advantus.
Sincerely,
/s/ William N. Westhoff
William N. Westhoff, President
Advantus Funds
<PAGE>
ADVANTUS HORIZON FUND
PERFORMANCE UPDATE
[PHOTO] [PHOTO]
THOMAS A. GUNDERSON,
CFA AND
JEFFREY R. ERICKSON, CFA
PORTFOLIO MANAGERS
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 and
non-dividend-paying common
stocks of established
companies with strong
long-term outlooks. Because
dividend yields of theses
types of companies have
fallen below average yield
for all companies, however,
the Fund has not paid
dividends from current income
since 1993.
- Dividends paid quarterly.
- Capital gains distributions paid annually.
PERFORMANCE
For the year ended September 30, 1999, the Advantus Horizon Fund returned the
following for each class of shares currently offered:
<TABLE>
<S> <C>
CLASS A.......................... 24.74 PERCENT*
CLASS B.......................... 23.93 PERCENT*
CLASS C.......................... 23.82 PERCENT*
</TABLE>
The Fund's benchmark, the Russell 1000 Growth Index,** returned 34.86 percent
for the same period.
PERFORMANCE ANALYSIS
The Fund successfully navigated its way through the volatile stock market over
the past twelve months and produced a solid returns for the year ended
September 30, 1999. The fiscal year ended on a strong note for the Fund as its
return exceeded that of the index over the final six months.
The Technology sector led the market with Internet stocks at the forefront.
Explosive growth of Internet usage and demand for applications fueled continued
technology capital spending, as well as growth for Internet related companies.
The Fund had a meaningful position in the Technology sector and was a
beneficiary of the strong technology rally. The Fund's minimal exposure to
"pure" Internet stocks during the first six months of the fiscal year was the
primary reason the Fund's performance did not match that of the Russell 1000
Growth Index.** Significant contributors to performance from this sector
included Microsoft (software), Cisco (networking), Intel (semiconductors),
Lucent (telecommunications equipment), EMC Corporation (data storage) and
Lexmark (printers).
The strong economy led to growth in the Consumer Cyclical sector of the market.
Stocks in this sector that contributed to Fund performance include advertising
leader Omnicom Group, and the excellent retailers Home Depot, Wal-Mart, and
Family Dollar. Other winners for the year included the communications powerhouse
MCI/Worldcom, and the well managed Tyco International, a long held favorite of
the Fund.
The lagging sectors of the market--and the Fund--were in Health Care, Consumer
Staples and the Financials. Slow earnings growth rates hurt Health Care and
Consumer Staples, while higher interest rates hurt the Financials. Stocks were
selectively sold from these weaker areas as they failed to meet our investment
criteria. Due to deteriorating fundamentals we sold our entire position in
several stocks over the past year including: Service Corporation International
(death care services), Philip Morris (tobacco), Coca-Cola, and Health Management
Associates (small market hospitals).
2
<PAGE>
We have added several new growth stocks to the portfolio including personal
computer leader Gateway, America Online, JDS Uniphase (fiberoptic
communications), Applied Materials (semiconductor equipment), and wireless
communications leader Nokia. The majority of large companies with high earnings
growth rates are in the Technology sector, so it is no surprise that many new
ideas are coming from that sector.
Several of the large companies in the Fund rose more than 50 percent* over the
past year. These stocks included General Electric, Microsoft, Cisco Systems,
Tyco International, and Intel.
OUTLOOK
The fundamentals for the market continue to be very strong. Earnings growth has
picked up while inflation remains benign. The market continues to be driven by
earnings and revenue growth. It shows no mercy for companies who do not execute
and come through with the revenue and earnings growth or for companies whose
business model may be at risk. Fortunately, we see there are several large
growth companies showing excellent results with growth rates being sustained or
accelerating.
We will continue to invest in companies we believe can sustain above average
earnings growth throughout an economic cycle. This strategy will allow us to
maximize the long-term capital appreciation of the Fund.
*Historical results are not an indication of future performance. These
performance results do not reflect the impact of Class A's maximum 5.5 percent
front-end sales charge or Class B's maximum 5 percent contingent deferred sales
charge. Investment returns and principal values will fluctuate so that shares
upon redemption may be worth more or less than their original cost.
**The Russell 1000 Growth Index contains those stocks from the Russell 1000 with
greater than average growth orientation. The Russell 1000 is the 1,000 largest
companies in the Russell 3000. The Russell 3000 is an unmanaged index of 3,000
common stocks, which represents approximately 98 percent of the U.S. market.
3
<PAGE>
COMPARISON OF CHANGE IN VALUE OF A HYPOTHETICAL $10,000
INVESTMENT IN ADVANTUS HORIZON FUND, RUSSELL 1000 GROWTH INDEX
AND CONSUMER PRICE INDEX
On the following three charts you can see how the total return for each of the
three classes of shares of the Advantus Horizon Fund compared to the
Russell 1000 Growth Index and the Consumer Price Index. The lines in the
Class A graph represent the cumulative total return of a hypothetical $10,000
investment made on September 30, 1989 through September 30, 1999. The lines in
the Class B and Class C graphs represent the cumulative total return of a
hypothetical $10,000 investment made on the inception date of Class B and
Class C shares of the Advantus Horizon Fund (August 19, 1994 and March 1, 1995,
respectively) through September 30, 1999.
CLASS A
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN:
<S> <C> <C> <C>
One year 17.88%
Five year 20.18%
Ten year 14.37%
(Thousands)
Russell 1000
Class A CPI Growth Index
9/30/1989 $10,000 $10,000 $10,000
10/31/1989 9,168 10,056 9,824
10/31/1990 8,635 10,689 9,268
10/31/1991 11,992 11,002 12,999
10/31/1992 13,227 11,354 14,405
10/31/1993 14,228 11,659 15,455
9/30/1994 14,431 12,011 16,804
9/30/1995 18,005 12,276 22,214
9/30/1996 21,107 12,644 26,967
9/30/1997 26,375 12,925 36,753
9/30/1998 30,695 13,109 40,833
9/30/1999 38,287 13,454 55,066
</TABLE>
CLASS B
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN:
<S> <C> <C> <C>
Class B:
One year 18.93%
Five year 20.52%
Since inception (8/19/94) 20.31%
(Thousands)
Russell 1000
Class B CPI Growth Index
8/19/94 $10,000 $10,000 $10,000
9/30/94 9,629 10,067 10,125
9/30/95 12,074 10,289 13,386
9/30/96 14,221 10,598 16,249
9/30/97 17,855 10,833 22,146
9/30/98 20,757 10,987 24,605
9/30/99 25,759 11,276 33,181
</TABLE>
4
<PAGE>
CLASS C
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN:
<S> <C> <C> <C>
One year 23.82%
Since inception (3/1/95) 21.53%
(Thousands)
Class C CPI Russell 1000
Growth Index
3/1/95 $10,000 $10,000 $10,000
9/30/95 11,841 10,146 12,331
9/30/96 12,671 10,450 14,969
9/30/97 17,090 10,682 20,402
9/30/98 19,747 10,834 22,667
9/30/99 24,452 11,119 30,567
</TABLE>
The preceding 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 5.5 percent front-end sales charge for Class A and the maximum
applicable contingent deferred sales charge for Class B shares. The maximum
initial sales charge for Class A shares was 5.0 percent prior to February 1,
1999. Sales charges pay for your financial professional's investment advice.
Individuals cannot invest in the index itself, nor can they invest in any fund
which seeks to track the performance of the index without incurring some charges
and expenses.
Historical performance is not an indication of future performance. Investment
returns and principal values will fluctuate so that shares upon redemption may
be worth more or less than their original cost.
5
<PAGE>
TEN LARGEST STOCK HOLDINGS
<TABLE>
<CAPTION>
MARKET % OF STOCK
COMPANY SHARES VALUE PORTFOLIO
- ------- -------- ------------ ----------
<S> <C> <C> <C>
General Electric Company................. 46,876 $ 5,557,736 6.8%
Microsoft Corporation.................... 53,600 4,854,150 5.9%
Cisco Systems, Inc....................... 55,300 3,791,506 4.6%
Intel Corporation........................ 50,100 3,723,056 4.6%
Tyco International, Ltd.................. 29,224 3,017,378 3.7%
Lucent Technologies Incorporated......... 43,900 2,848,013 3.5%
Home Depot, Inc.......................... 34,800 2,388,150 2.9%
Wal-Mart Stores, Inc..................... 48,300 2,297,269 2.8%
Omnicom Group, Inc....................... 28,512 2,257,794 2.8%
Bristol-Myers Squibb Company............. 32,200 2,173,500 2.7%
----------- ----
$32,908,552 40.3%
=========== ====
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Cash and Other Assets/Liabilities 1.3%
Utilities 1.1%
Communication Services 1.7%
Financial 6.3%
Consumer Staples 9.0%
Capital Goods 12.7%
Consumer Cyclical 12.9%
Health Care 15.0%
Technology 40.0%
</TABLE>
6
<PAGE>
ADVANTUS HORIZON FUND
INVESTMENTS IN SECURITIES
SEPTEMBER 30, 1999
(Percentages of each investment category relate to total net assets.)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE(A)
- ------ -----------
<C> <S> <C>
COMMON STOCK (98.7%)
CAPITAL GOODS (12.7%)
Electrical Equipment (6.7%)
46,876 General Electric Company......................... $ 5,557,736
-----------
Manufacturing (3.6%)
29,224 Tyco International, Ltd. (c)..................... 3,017,378
-----------
Office Equipment (2.4%)
24,300 Lexmark International Group, Inc. (b)............ 1,956,150
-----------
COMMUNICATION SERVICES (1.7%)
Telecommunication (1.7%)
19,792 MCI Worldcom, Inc. (b)........................... 1,422,550
-----------
CONSUMER CYCLICAL (12.9%)
Auto (1.5%)
23,800 Danaher Corporation.............................. 1,253,962
-----------
Houseware (.6%)
24,100 Leggett & Platt, Inc............................. 474,469
-----------
Retail (8.1%)
96,300 Family Dollar Stores............................. 2,034,337
34,800 Home Depot, Inc.................................. 2,388,150
48,300 Wal-Mart Stores, Inc............................. 2,297,269
-----------
6,719,756
-----------
Service (2.7%)
28,512 Omnicom Group, Inc............................... 2,257,794
-----------
CONSUMER STAPLES (9.0%)
Entertainment (2.2%)
18,700 Carnival Corporation............................. 813,450
17,100 Time Warner, Inc................................. 1,038,825
-----------
1,852,275
-----------
Food & Health (1.2%)
55,800 U.S. Foodservice (b)............................. 1,004,400
-----------
Household Products (2.0%)
47,200 Dial Corporation................................. 1,203,600
4,800 Procter & Gamble Company......................... 450,000
-----------
1,653,600
-----------
<CAPTION>
MARKET
SHARES VALUE(A)
- -------------------------------------------------------------------------
CONSUMER STAPLES--CONTINUED
<C> <S> <C>
Retail (2.2%)
47,582 Safeway, Inc. (b)................................ $ 1,811,090
-----------
Service (1.4%)
25,400 Automatic Data Processing, Inc................... 1,133,475
-----------
FINANCIAL (6.3%)
Finance-Diversified (2.2%)
34,200 Federal Home Loan Mortgage Corporation........... 1,778,400
-----------
Insurance (2.7%)
14,772 American International Group..................... 1,284,241
10,400 Hartford Life.................................... 512,200
13,500 Nationwide Financial Services.................... 477,562
-----------
2,274,003
-----------
Investment Bankers/Brokers (1.4%)
26,900 Knight/Trimark Group, Inc. (b)................... 796,912
11,800 T. Rowe Price Associates......................... 323,762
-----------
1,120,674
-----------
HEALTH CARE (15.0%)
Drugs (8.4%)
32,200 Bristol-Myers Squibb Company..................... 2,173,500
7,400 Eli Lilly & Company.............................. 473,600
29,900 Merck & Co., Inc................................. 1,937,894
33,700 Pfizer, Inc...................................... 1,211,094
25,800 Schering Plough Corporation...................... 1,125,525
-----------
6,921,613
-----------
Health Care-Diversified (2.5%)
14,700 Johnson & Johnson................................ 1,350,562
10,300 Warner-Lambert Company........................... 683,662
-----------
2,034,224
-----------
</TABLE>
See accompanying notes to investments in securities.
7
<PAGE>
ADVANTUS HORIZON FUND
INVESTMENTS IN SECURITIES - CONTINUED
<TABLE>
<CAPTION>
MARKET
SHARES VALUE(A)
- -------------------------------------------------------------------------
HEALTH CARE--CONTINUED
<C> <S> <C>
Medical Products/Supplies (4.1%)
30,700 Guidant Corporation.............................. $ 1,646,288
64,900 Sybron International Corporation (b)............. 1,744,188
-----------
3,390,476
-----------
TECHNOLOGY (40.0%)
15,800 America Online, Inc. (b)......................... 1,643,200
5,600 Applied Materials, Inc. (b)...................... 436,100
16,900 BMC Software, Inc. (b)........................... 1,209,406
55,300 Cisco Systems, Inc. (b).......................... 3,791,506
38,600 Dell Computer Corporation (b).................... 1,613,963
28,600 EMC Corporation (b).............................. 2,043,113
21,800 Galileo Electric Company......................... 877,450
17,200 Gateway, Inc. (b)................................ 764,325
7,200 Hewlett-Packard Company.......................... 662,400
50,100 Intel Corporation................................ 3,723,056
16,000 International Business Machines.................. 1,942,000
<CAPTION>
MARKET
SHARES VALUE(A)
- -------------------------------------------------------------------------
TECHNOLOGY--CONTINUED
<C> <S> <C>
43,900 Lucent Technologies Incorporated................. $ 2,848,013
53,600 Microsoft Corporation (b)........................ 4,854,150
17,300 Nokia Oyj (c).................................... 1,553,756
20,900 Nova Corporation (b)............................. 522,500
16,500 Sun Microsystems, Inc. (b)....................... 1,534,500
11,000 Texas Instruments, Inc........................... 904,750
8,800 Uniphase Corporation (b)......................... 1,001,550
25,500 Unisys Corporation (b)........................... 1,150,688
-----------
33,076,426
-----------
UTILITIES (1.1%)
Electric Companies (1.1%)
15,200 AES Corporation (b).............................. 896,800
-----------
Total common stock (cost: $51,083,874)........................ 81,607,251
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
- ---------
<C> <S> <C> <C> <C>
SHORT-TERM SECURITIES (1.4%)
$1,130,445 Federated Prime Obligation Fund, current rate 5.220%............ 1,130,445
----------
Total short-term securities (cost: $1,130,445).................. 1,130,445
----------
Total investments in securities (cost: $52,214,319) (d)......... $82,737,696
==========
</TABLE>
Notes to Investments in Securities
- -----------------------------------
(a) Securities are valued by procedures described in note 2 to the financial
statements.
(b) Presently non-income producing.
(c) The Fund held 5.5% of net assets in foreign securities as of September 30,
1999.
(d) At September 30, 1999 the cost of securities for federal income tax purposes
was $52,442,515. The aggregate unrealized appreciation and depreciation of
investments in securities based on this cost were:
<TABLE>
<S> <C>
Gross unrealized appreciation.......... $32,186,993
Gross unrealized depreciation.......... (1,891,812)
----------
Net unrealized appreciation............ $30,295,181
==========
</TABLE>
8
<PAGE>
(This page has been left blank intentionally.)
9
<PAGE>
ADVANTUS HORIZON FUND
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1999
<TABLE>
<S> <C>
ASSETS
Investments in securities, at market value - see
accompanying schedule for detailed listing
(identified cost: $52,214,319)............................. $82,737,696
Cash in bank on demand deposit.............................. 2
Receivable for Fund shares sold............................. 20,447
Accrued interest receivable................................. 5,474
Dividends receivable........................................ 55,825
Other receivables........................................... 2,801
-----------
Total assets............................................ 82,822,245
-----------
LIABILITIES
Payable for Fund shares redeemed............................ 15,611
Payable to Adviser.......................................... 124,804
Other payables.............................................. 156
-----------
Total liabilities....................................... 140,571
-----------
Net assets applicable to outstanding capital stock.......... $82,681,674
===========
Represented by:
Capital stock - authorized 10 billion shares (Class A -
2 billion shares, Class B - 2 billion shares, Class C -
2 billion shares and 4 billion shares unallocated) of $.01
par value (note 1)........................................ $ 31,266
Additional paid-in capital................................ 49,489,209
Accumulated net realized gains from investments........... 2,637,822
Unrealized appreciation on investments.................... 30,523,377
-----------
Total - representing net assets applicable to
outstanding capital stock............................... $82,681,674
===========
Net assets applicable to outstanding Class A shares......... $56,581,313
===========
Net assets applicable to outstanding Class B shares......... $23,560,857
===========
Net assets applicable to outstanding Class C shares......... $ 2,539,504
===========
Shares outstanding and net asset value per share:
Class A - Shares outstanding 2,105,243.................... $ 26.88
===========
Class B - Shares outstanding 922,499...................... $ 25.54
===========
Class C - Shares outstanding 98,855....................... $ 25.69
===========
</TABLE>
See accompanying notes to financial statements.
10
<PAGE>
ADVANTUS HORIZON FUND
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 1999
<TABLE>
<S> <C>
Investment income:
Interest.................................................. $ 63,219
Dividends................................................. 498,123
-----------
Total investment income............................... 561,342
-----------
Expenses (note 4):
Investment advisory fee................................... 646,511
Rule 12b-1 fees - Class A................................. 149,250
Rule 12b-1 fees - Class B................................. 218,777
Rule 12b-1 fees - Class C................................. 27,014
Administrative services fee............................... 61,400
Custodian fees............................................ 1,280
Auditing and accounting services.......................... 18,600
Legal fees................................................ 11,879
Directors' fees........................................... 1,340
Registration fees......................................... 43,090
Printing and shareholder reports.......................... 42,400
Insurance................................................. 3,687
Other..................................................... 7,613
-----------
Total expenses........................................ 1,232,841
-----------
Investment loss - net................................. (671,499)
-----------
Realized and unrealized gains on investments:
Net realized gains on investments (note 3)................ 2,748,113
Net change in unrealized appreciation or depreciation on
investments............................................. 14,508,082
-----------
Net gains on investments.............................. 17,256,195
-----------
Net increase in net assets resulting from operations........ $16,584,696
===========
</TABLE>
See accompanying notes to financial statements.
11
<PAGE>
ADVANTUS HORIZON FUND
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED SEPTEMBER 30, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
------------ ------------
<S> <C> <C>
Operations:
Investment loss - net..................................... $ (671,499) $ (369,201)
Net realized gain on investments.......................... 2,748,113 8,034,700
Net change in unrealized appreciation or depreciation on
investments............................................. 14,508,082 1,097,908
------------ ------------
Increase in net assets resulting from operations...... 16,584,696 8,763,407
------------ ------------
Distributions to shareholders from net realized gains on
investments:
Class A................................................. (4,668,396) (5,149,246)
Class B................................................. (1,807,953) (1,594,390)
Class C................................................. (239,316) (244,774)
------------ ------------
Total distributions................................... (6,715,665) (6,988,410)
------------ ------------
Capital share transactions (notes 4 and 5):
Proceeds from sales:
Class A................................................. 13,006,405 11,805,254
Class B................................................. 6,226,919 7,211,314
Class C................................................. 737,287 1,188,730
Proceeds from issuance of shares as a result of reinvested
dividends:
Class A................................................. 4,609,970 5,098,650
Class B................................................. 1,795,826 1,565,569
Class C................................................. 239,316 243,267
Payments for redemption of shares:
Class A................................................. (15,354,925) (11,437,509)
Class B................................................. (3,959,284) (3,569,106)
Class C................................................. (1,070,807) (928,081)
------------ ------------
Increase in net assets from capital share
transactions........................................ 6,230,707 11,178,088
------------ ------------
Total increase in net assets.......................... 16,099,738 12,953,085
Net assets at beginning of year............................. 66,581,936 53,628,851
------------ ------------
Net assets at end of year................................... $ 82,681,674 $ 66,581,936
============ ============
</TABLE>
See accompanying notes to financial statements.
12
<PAGE>
ADVANTUS HORIZON FUND
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
(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. The Fund's investment objective is to seek
long-term growth of capital combined with a moderate level of current income
through investment in equity securities.
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 Rule 12b-1 fees charged differs between Class A, Class B and Class C
shares. Income, expenses (other than Rule 12b-1 fees) and realized and
unrealized gains or losses are allocated to each class of shares based upon its
relative net assets.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies followed by the Fund are summarized as
follows:
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts in the financial statements. Actual
results could differ from those estimates.
INVESTMENTS IN SECURITIES
The Fund's net asset value is generally calculated as of the close of normal
trading on the New York Stock Exchange (typically 3:00 p.m. Central Time).
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, by an independent pricing service or at a price deemed best to
reflect fair value as quoted by dealers who make markets in these securities.
When market quotations are not readily available, securities are valued at fair
value as determined in good faith under procedures adopted by the Board of
Directors. 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.
13
<PAGE>
ADVANTUS HORIZON FUND
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
$671,499.
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, 1999, purchases of securities and proceeds
from sales, other than temporary investments in short-term securities aggregated
$47,708,577 and $49,030,781, respectively.
(4) EXPENSES AND RELATED PARTY TRANSACTIONS
The Fund has an investment advisory agreement with Advantus Capital
Management, Inc. (Advantus Capital or the Adviser), a wholly-owned subsidiary of
Minnesota Life Insurance Company (Minnesota Life). 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 (First
Data Investor Services Group). Prior to October 26, 1998, the Fund's transfer
agent was Minnesota Life. 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.
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
expenses pursuant to Rule 12b-1 under the Investment Company Act of 1940 (as
amended). The Fund pays fees to Ascend Financial Services, Inc. (Ascend), the
underwriter of the Fund and wholly-owned subsidiary of Advantus Capital, 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 service fee up
to .25 percent of average daily net assets of Class A shares. Prior to February
1, 1999, the Class A Plan provided for a distribution 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.
14
<PAGE>
ADVANTUS HORIZON FUND
NOTES TO FINANCIAL STATEMENTS - CONTINUED
(4) EXPENSES AND RELATED PARTY TRANSACTIONS - (CONTINUED)
The Fund also bears certain other operating expenses including outside
directors' fees, custodian fees, registration fees, printing and shareholder
reporting fees, legal, auditing and accounting services fees and other
miscellaneous expenses.
Effective October 26, 1998, the Fund entered into a new shareholder and
administrative services agreement with Minnesota Life. Under this agreement, the
Fund pays an administrative services fee to Minnesota Life for accounting,
auditing, legal and other administrative services which Minnesota Life provides.
Prior to February 1, 1999, the administrative services fee was $3,700 per month.
For the period from February 1, 1999 to July 31, 1999, the administrative
services fee was $5,700 per month. Effective August 1, 1999, the administrative
services fee is $6,200 per month. In addition, for shareholder services
performed by Minnesota Life, the Adviser will pay Minnesota Life an annual
account servicing fee as agreed by the Adviser and Minnesota Life.
Advantus Capital directly incurs and pays the above operating expenses and
the Fund in turn reimburses Advantus Capital.
Sales charges received by Ascend for distributing the Fund's three classes
of shares amounted to $187,561.
As of September 30, 1999, Minnesota Life and subsidiaries and the directors
and officers of the Fund as a whole owned 39,963 Class A shares which represents
1.9 percent of the total outstanding Class A shares.
Legal fees were paid to a law firm of which the Fund's secretary is a
partner in the amount of $11,104.
(5) CAPITAL SHARE TRANSACTIONS
Transactions in shares for the years ended September 30, 1999 and 1998 were
as follows:
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
------------------- ------------------- -------------------
1999 1998 1999 1998 1999 1998
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Sold....................................... 491,342 498,136 248,486 312,837 29,796 51,773
Issued for reinvested distributions........ 187,779 239,004 76,448 75,735 10,136 11,784
Redeemed................................... (574,168) (479,796) (157,361) (154,958) (41,968) (41,014)
-------- -------- -------- -------- ------- -------
104,953 257,344 167,573 233,614 (2,036) 22,543
======== ======== ======== ======== ======= =======
</TABLE>
(6) YEAR 2000 (UNAUDITED)
In 1995, Minnesota Life began addressing computer system requirements and
applications to be Year 2000 ready. Based on a current study, Minnesota Life
plans to spend approximately $12 million through 1999 to modify its computer
information systems, enabling proper processing of transactions relating to the
year 2000 and beyond. The Fund will not be charged for these expenses.
15
<PAGE>
ADVANTUS HORIZON FUND
NOTES TO FINANCIAL STATEMENTS - CONTINUED
(7) FINANCIAL HIGHLIGHTS
Per share data for a share of capital stock and selected information for
each period are as follows:
<TABLE>
<CAPTION>
CLASS A
--------------------------------------------------------
YEAR ENDED SEPTEMBER 30,
--------------------------------------------------------
1999 1998 1997 1996 1995(A)
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year..... $ 23.59 $ 23.06 $ 23.07 $ 20.94 $ 17.34
------- ------- ------- ------- -------
Income from investment operations:
Net investment loss.................. (.16) (.09) (.08) (.10) (.03)
Net gains on securities (both
realized and unrealized)........... 5.77 3.48 4.89 3.51 4.17
------- ------- ------- ------- -------
Total from investment operations... 5.61 3.39 4.81 3.41 4.14
------- ------- ------- ------- -------
Less distributions:
Distributions from net realized
gains.............................. (2.32) (2.86) (4.82) (1.28) (.54)
------- ------- ------- ------- -------
Total distributions................ (2.32) (2.86) (4.82) (1.28) (.54)
------- ------- ------- ------- -------
Net asset value, end of year........... $ 26.88 $ 23.59 $ 23.06 $ 23.07 $ 20.94
======= ======= ======= ======= =======
Total return (c)....................... 24.74% 16.38% 24.96% 17.23% 24.76%
Net assets, end of year (in
thousands)........................... $56,581 $47,183 $40,192 $34,435 $36,040
Ratio of expenses to average daily net
assets (d)(e)........................ 1.30% 1.36% 1.43% 1.41% 1.41%
Ratio of net investment income (loss)
to average daily net
assets (d)(e)........................ (.61)% (.39)% (.39)% (.43)% (.15)%
Portfolio turnover rate (excluding
short-term securities)............... 60.1% 72.6% 71.5% 84.7% 46.8%
</TABLE>
- ------------
(a) Effective March 1, 1995, the Fund entered into a new investment advisory
agreement with Advantus Capital Management, Inc. Prior to March 1, 1995,
the Fund had an investment advisory agreement with MIMLIC Asset Management
Company.
(b) Commencement of operations.
(c) Total return figures are based on a share outstanding throughout the period
and assume reinvestment of distributions at net asset value. Total return
figures do not reflect the impact of front-end or contingent deferred sales
charges. For periods less than one year, total return presented has not
been annualized.
(d) The Fund's Adviser and Distributor voluntarily waived or absorbed $52,961
in expenses for the year ended September 30, 1995. If the Fund had been
charged with these expenses, the ratio of expenses to average daily net
assets would have been 1.57% for Class A, 2.25% for Class B and 2.25% for
Class C, and the ratio of net investment income (loss) would have been
(.31)% for Class A, (1.05)% for Class B and (1.13)% for Class C.
(e) The Fund's Distributor voluntarily waived $6,809, $18,019 and $28,836 in
Class A distribution fees for the years ended September 30, 1998, 1997, and
1996, respectively. If Class A shares had been charged for these expenses,
the ratio of expenses to average daily net assets would have been 1.37%,
1.48% and 1.50%, respectively, and the ratio of net investment income
(loss) to average daily net assets would have been (.40)%, (.44)% and
(.52)%, respectively.
(f) Adjusted to annual basis.
16
<PAGE>
ADVANTUS HORIZON FUND
NOTES TO FINANCIAL STATEMENTS - CONTINUED
<TABLE>
<CAPTION>
CLASS B
------------------------------------------------------
YEAR ENDED SEPTEMBER 30,
------------------------------------------------------
1999 1998 1997 1996 1995(A)
-------- -------- -------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year..... $ 22.65 $ 22.41 $ 22.65 $20.74 $17.33
------- ------- ------- ------ ------
Income from investment operations:
Net investment loss.................. (.32) (.22) (.19) (.19) (.10)
Net gains on securities (both
realized and unrealized)........... 5.53 3.32 4.77 3.38 4.05
------- ------- ------- ------ ------
Total from investment operations... 5.21 3.10 4.58 3.19 3.95
------- ------- ------- ------ ------
Less distributions:
Distributions from net realized
gains.............................. (2.32) (2.86) (4.82) (1.28) (.54)
------- ------- ------- ------ ------
Total distributions................ (2.32) (2.86) (4.82) (1.28) (.54)
------- ------- ------- ------ ------
Net asset value, end of year........... $ 25.54 $ 22.65 $ 22.41 $22.65 $20.74
======= ======= ======= ====== ======
Total return (c)....................... 23.93% 15.48% 24.25% 16.34% 23.65%
Net assets, end of year (in
thousands)........................... $23,561 $17,100 $11,684 $6,219 $2,592
Ratio of expenses to average daily net
assets (d)(e)........................ 2.04% 2.07% 2.18% 2.19% 2.24%
Ratio of net investment income (loss)
to average daily net
assets (d)(e)........................ (1.34)% (1.11)% (1.13)% (1.19)% (1.05)%
Portfolio turnover rate (excluding
short-term securities)............... 60.1% 72.6% 71.5% 84.7% 46.8%
<CAPTION>
CLASS C
---------------------------------------------------------
PERIOD FROM
MARCH 1,
YEAR ENDED SEPTEMBER 30, 1995(B) TO
---------------------------------------- SEPTEMBER 30,
1999 1998 1997 1996 1995
------- ------- ------- ------- -------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year..... $22.79 $22.38 $22.67 $20.75 $17.52
------ ------ ------ ------ ------
Income from investment operations:
Net investment loss.................. (.36) (.24) (.20) (.15) (.06)
Net gains on securities (both
realized and unrealized)........... 5.58 3.51 4.73 3.35 3.29
------ ------ ------ ------ ------
Total from investment operations... 5.22 3.27 4.53 3.20 3.23
------ ------ ------ ------ ------
Less distributions:
Distributions from net realized
gains.............................. (2.32) (2.86) (4.82) (1.28) -
------ ------ ------ ------ ------
Total distributions................ (2.32) (2.86) (4.82) (1.28) -
------ ------ ------ ------ ------
Net asset value, end of year........... $25.69 $22.79 $22.38 $22.67 $20.75
====== ====== ====== ====== ======
Total return (c)....................... 23.82% 15.74% 24.03% 16.33% 18.44%
Net assets, end of year (in
thousands)........................... $2,540 $2,299 $1,754 $1,018 $ 103
Ratio of expenses to average daily net
assets (d)(e)........................ 2.04% 2.07% 2.18% 2.19% 2.24%(f)
Ratio of net investment income (loss)
to average daily net
assets (d)(e)........................ (1.34)% (1.10)% (1.14)% (1.17)% (1.13)%(f)
Portfolio turnover rate (excluding
short-term securities)............... 60.1% 72.6% 71.5% 84.7% 46.8%
</TABLE>
- ------------
(a) Effective March 1, 1995, the Fund entered into a new investment advisory
agreement with Advantus Capital Management, Inc. Prior to March 1, 1995,
the Fund had an investment advisory agreement with MIMLIC Asset Management
Company.
(b) Commencement of operations.
(c) Total return figures are based on a share outstanding throughout the period
and assume reinvestment of distributions at net asset value. Total return
figures do not reflect the impact of front-end or contingent deferred sales
charges. For periods less than one year, total return presented has not
been annualized.
(d) The Fund's Adviser and Distributor voluntarily waived or absorbed $52,961
in expenses for the year ended September 30, 1995. If the Fund had been
charged with these expenses, the ratio of expenses to average daily net
assets would have been 1.57% for Class A, 2.25% for Class B and 2.25% for
Class C, and the ratio of net investment income (loss) would have been
(.31)% for Class A, (1.05)% for Class B and (1.13)% for Class C.
(e) The Fund's Distributor voluntarily waived $6,809, $18,019 and $28,836 in
Class A distribution fees for the years ended September 30, 1998, 1997, and
1996, respectively. If Class A shares had been charged for these expenses,
the ratio of expenses to average daily net assets would have been 1.37%,
1.48% and 1.50%, respectively, and the ratio of net investment income
(loss) to average daily net assets would have been (.40)%, (.44)% and
(.52)%, respectively.
(f) Adjusted to annual basis.
17
<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, 1999 and the related statement of
operations for the year then ended, the statements of changes in net assets for
each year in the two year period then ended and the financial highlights for
each of the years in the five year period then ended. 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. Our procedures included confirmation of securities owned as of
September 30, 1999, by correspondence with the custodian. 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, 1999 and the results of its operations,
changes in its net assets and the financial highlights, for the periods stated
in the first paragraph above, in conformity with generally accepted accounting
principles.
KPMG LLP
Minneapolis, Minnesota
November 5, 1999
18
<PAGE>
ADVANTUS HORIZON FUND
FEDERAL INCOME TAX INFORMATION (UNAUDITED)
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, 1999. Dividends for the 1999 calendar year will
be reported to you on Form 1099-Div in late January 2000. Shareholders should
consult a tax adviser on how to report these distributions for state and local
purposes.
CLASS A, CLASS B AND CLASS C
<TABLE>
<CAPTION>
PER
PAYABLE DATE SHARE
- ------------ --------
<S> <C>
Capital gains distribution-taxable as long-term capital
gains, 20% rate.
December 4, 1998............................................ $2.3247
=======
</TABLE>
19
<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 may apply.
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 share class) at any time as your needs change. Exchanges are at the
then current net asset value (exchanges from the Advantus Money Market Fund will
incur the applicable sales charge, if not previously subjected to the charge).
Shareholders may make twelve exchanges each calendar year without incurring a
transaction charge. Thereafter, there will be a $7.50 transaction charge for
each additional exchange within the calendar year.
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 a check at
specified intervals from your fund account -- subject to minimum guidelines.
Depending upon the performance of the underlying investment options, the value
may be worth more or less than the original amount invested when withdrawn.
DIRECT DIVIDEND 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 EXCHANGE: You may move money from one Advantus account to any other
Advantus account you own (with identical registrations within the same share
class) just by calling our toll-free number. The Telephone Exchange privilege
will automatically be established unless otherwise indicated on the Account
Application. Telephone Exchange may be changed (added/deleted) at any time by
submitting a request in writing.
SYSTEMATIC EXCHANGE: You may move a set amount of money monthly or quarterly
from one Advantus Fund to another Advantus Fund (with identical registrations
within the same share class) to diversify your investment portfolio and take
advantage of "dollar-cost averaging".
AUTOMATIC PAYMENT OF INSURANCE PREMIUMS: You may automatically pay your
Minnesota Life insurance premiums from 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, if any.
AUTOMATIC INVESTMENT PLAN: This special purchase plan enables 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.) The Automatic Investment
Plan allows you to invest automatically monthly, semi-monthly or quarterly from
your checking or savings account.
IRAS, OTHER QUALIFIED PLANS: You can use the Advantus Family of Funds for your
Traditional, Roth or Education Individual Retirement Account or other qualified
plans including: SEP IRA's, SIMPLE IRA's, Profit Sharing, 401(k) Money Purchase
or Defined Benefit plans.
TELEPHONE REDEMPTION: You may call us and redeem shares over the phone. The
proceeds will be sent by check to the address of record for the account or wire
transferred to your bank of record for the account. Wire transfers are for
amounts over $500. The prevailing wire charge will be added to the withdrawal
amount. The Telephone Redemption privilege will automatically be established
unless otherwise indicated on the Account Application. Telephone Redemption may
be changed (added/deleted) at any time by submitting a request in writing. To
have the redemption automatically deposited into your checking account, please
send a voided check
20
<PAGE>
from your bank. Depending on the performance of the underlying investment
options, the value may be worth more or less than the original amount invested
upon redemption. Some limitations apply, please refer to the prospectus for
details.
ACCOUNT UPDATES: You'll receive written confirmation of every investment you
initiate and quarterly statements to help you track all of your Advantus Fund
investments and annual tax statements. Semi-annual 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 Advantus Shareholder Services, call 1-800-665-6005.
Advantus Account Representatives are available Monday through Friday from 8 a.m.
to 4:45 p.m. Central Time. Our voice response system is available 24 hours,
seven days a week. This system allows you to access current net asset values,
account balances and recent account activity.
HOW TO INVEST
You can invest in one or more of the eleven Advantus Funds through a local
Registered Representative of Ascend Financial Services, Inc., distributor of the
Funds. Contact your representative for information and a prospectus for any of
the Advantus Funds you are interested in. To find a Registered Representative
near you, call the toll-free service line (1-800-665-6005).
MINIMUM INVESTMENTS: Your initial investment in any of the Advantus Funds can
be as small as $25 when you use our Automatic 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. (For the Advantus International Balanced Fund, Inc., the
sub-adviser, Templeton Investment Counsel, Inc., selects the Fund's
investments.)
Advantus Capital Management, Inc. manages twelve mutual funds containing $3.2
billion in assets in addition to $10.8 billion in assets for other clients.
Advantus Capital's seasoned portfolio managers average more than 13 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
Advantus Venture Fund
Advantus Index 500 Fund
Advantus Real Estate Securities Fund
21
<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]
ASCEND FINANCIAL SERVICES, INC.,
SECURITIES DEALER, MEMBER NASD/SIPC
400 ROBERT STREET NORTH
ST. PAUL, MN 55101-2098
1-800-AFS-1838
(1-800-237-1838)
<PAGE>
<TABLE>
<S> <C>
ASCEND FINANCIAL SERVICES, INC.
400 ROBERT STREET NORTH
ST. PAUL, MN 55101-2098
PRESORTED STANDARD
U.S. POSTAGE PAID
ST. PAUL, MN
PERMIT NO. 3547
ADDRESS SERVICE REQUESTED
</TABLE>
F.48637 Rev. 11-1999
