<PAGE>
HORIZON
ADVANTUS HORIZON FUND, INC.
ANNUAL REPORT TO SHAREHOLDERS DATED SEPTEMBER 30, 2000
ADVANTUS-TM-
FAMILY OF FUNDS [LOGO]
[EQUITY GRAPHIC]
<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 VOTING RESULTS 20
SHAREHOLDER SERVICES 21
</TABLE>
<PAGE>
LETTER FROM THE PRESIDENT [PHOTO]
Dear Shareholder:
All signs point to a soft landing in progress while the U.S. economy continues
to slow. The pressure on the Federal Reserve to further increase short-term
rates has diminished considerably. The Fed's earlier series of tightenings
appears to have successfully curbed the country's run-away growth. Inflation
remains in check; all in all, we continue to have a healthy backdrop for our
country's capital markets.
In the stock market, companies such as Intel and new economy leaders have seen
some dramatic corrections this quarter. This was a sideways correction for many,
downward for companies that disappointed investors. Value, real estate, and
small stocks' relative performance has improved this quarter. The market has
broadened, demonstrating that investors have acquired an increased appetite for
stocks other than large cap growth. We anticipate that the stock market will
remain volatile throughout the year and into next year. Equity investors should
adjust their expectations and not expect double-digit returns as the norm. We
expect positive returns for equities for the next 12 to 18 months, with above
average earnings growth.
Within the fixed income universe, corporate bonds have been the weakest
performing fixed income sector in 2000. An inverted yield curve (i.e., short-
term bonds have higher yields than long-term bonds), several Fed tightening
moves, increased event risk and equity market volatility have all negatively
impacted corporate bond performance this year. Mortgage-backed securities were
the top performer for the year followed by the government sector. We believe
that upcoming quarters will be a favorable environment for bonds.
We are continually watchful of economic and political events and circumstances
that would likely affect our new President. Significant political unrest,
military buildups, and violence in other countries may test the
President-elect's mettle. A strong Administration increases the odds that our
peace dividend will continue.
We advise investors to consider adding fixed income, value stocks and an
international component to their portfolio. As we've said before, we advise you
to stay well diversified and avoid big bets when the market environment is
uncertain.
Sincerely,
/s/ William N. Westhoff
William N. Westhoff
President, Advantus Funds
<PAGE>
ADVANTUS HORIZON FUND
PERFORMANCE UPDATE
[PHOTO] [PHOTO]
THOMAS A. GUNDERSON,
CFA AND
ALLEN STEINKOPF, CFA
PORTFOLIO MANAGERS
The Advantus Horizon Fund is a mutual fund designed for investors seeking
long-term growth of capital. 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
The past 12 months proved to be profitable, although filled with above average
levels of volatility. For the year ended September 30, 2000, Advantus Horizon
Fund (A-shares) shareholders gained 19.26 percent* as growth stocks again
provided very attractive returns to investors. The return for the Class-B
shareholders was 18.40 percent*, while for Class-C shareholders it was
18.37 percent*.
PERFORMANCE ANALYSIS
The last year was quite a ride in the stock market. We saw how internet
companies are created and ruined all in a year's time frame. Y2K came and went
without a hitch. We have also gone through an amazing stretch of time, with
events not likely to be seen again. Technology, the internet and the human
genome seem to be the only things on investors' minds in the fourth quarter of
1999 and the first quarter of 2000. Excitement in these areas drove growth
stocks up 34.05 percent for that six-month period, as measured by the Russell
1000 Growth Index.**
We went from the perfect environment to the perfect storm over the NEXT six
months. Higher interest rates, higher energy prices, a weak Euro and uncertainty
over a new President weighed heavily on the markets, as companies began to see
the impact these factors were having on the economy. Growth stocks, again
measured by the Russell 1000 Growth Index, fell 7.9 percent during the final six
months of the period. In the end, growth stocks won out for the 12-month period
as the Russell 1000 Growth Index** gained 23.41 percent, well ahead of the
broader market return of 13.27 percent, as measured by the S&P 500.
Technology was the best performing sector for the year with a return of
47 percent. Our overweight in the sector contributed nicely to our overall
return for the year. The development of the internet was a main driver in the
out performance of technology. Competitive threats and improvements in
efficiency were the leading reasons that technology spending is increasing
strongly. Health technology was also a positive contributor to overall
performance with an increase of 21 percent. Biotech was a large part of this
performance driven by renewed excitement about drug discovery with the
unraveling of the human genome.
EMC, Cisco, and Sun Microsystems, all internet-related companies, were large
contributors to the overall performance of the Fund for the last year. Revenue
and earnings have been accelerating for the three internet infrastructure
players for the last year. The need for companies to quickly develop and run
on-line business web cites created a dynamic market opportunity for these
companies. Their ability to scale and execute in the midst of such a ramp is
indicative of the quality of management at these companies. JDS Uniphase,
2
<PAGE>
Red Back Networks, and Juniper Networks were also good contributors to the Fund
as the need for additional bandwidth continues to drive network service
providers to expand their capacities. Microsoft and Dell Computer were laggards.
Dell has run into a tough European environment for its products and Microsoft
has been consumed with legal issues that have hampered its execution.
OUTLOOK
We are now two quarters into a correction that was rooted in last year's
interest rate hikes. We are currently in the midst of taking our oilfield
service holdings down and doing selective buying in the technology sector. The
economic picture looks fuzzy right now, but the underlying fundamentals are very
solid. Technology companies will continue to show the best growth of any sector,
and once this downshift in GDP growth has run its course, we believe we will be
well rewarded from these levels.
We are seeing a healthy correction in many stocks valuation and seeing some
companies that had no reason to be public go away. The market will continue to
churn as the economic picture unfolds. The biggest question is not: ARE WE
SLOWING?, but rather, HOW SLOW WILL WE GO? Once that question is answered, the
market should be on solid footing to continue its run.
*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, 1990 through September 30, 2000. 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, 2000.
CLASS A
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN:
<S> <C> <C>
One year 12.70%
Five year 19.10%
Ten year 17.34%
</TABLE>
<TABLE>
<CAPTION>
(THOUSANDS)
RUSSELL 1000
CLASS A CPI GROWTH INDEX
<S> <C> <C> <C>
9/30/90 $10,000 $10,000 $10,000
10/31/90 $9,360 $10,000 $10,040
10/31/91 $12,999 $10,292 $14,082
10/31/92 $14,338 $10,622 $15,605
10/31/93 $15,422 $10,907 $16,743
9/30/94 $15,643 $11,237 $18,204
9/30/95 $19,517 $11,484 $24,065
9/30/96 $22,879 $11,829 $29,214
9/30/97 $28,590 $12,091 $39,816
9/30/98 $33,272 $12,264 $44,236
9/30/99 $41,502 $12,586 $59,654
9/30/00 $49,494 $13,002 $73,622
</TABLE>
CLASS B
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN:
<S> <C> <C>
One year 13.40%
Five year 19.48%
Since inception (8/19/94) 20.11%
</TABLE>
<TABLE>
<CAPTION>
(THOUSANDS)
RUSSELL 1000
CLASS B CPI GROWTH INDEX
<S> <C> <C> <C>
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
9/30/00 $30,676 $11,659 $40,950
</TABLE>
4
<PAGE>
CLASS C
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN:
<S> <C>
One year 18.37%
Five year 19.57%
Since inception (3/1/95) 20.95%
</TABLE>
<TABLE>
<CAPTION>
(THOUSANDS)
RUSSELL 1000
CLASS C CPI GROWTH INDEX
<S> <C> <C> <C>
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
9/30/00 $28,944 $11,497 $37,724
</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. 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................ 104,728 $ 6,041,496 6.8%
Cisco Systems, Inc...................... 102,100 5,641,025 6.4%
Pfizer, Inc............................. 112,650 5,062,209 5.7%
EMC Corporation......................... 40,900 4,054,213 4.6%
Sun Microsystems, Inc................... 28,300 3,304,025 3.7%
America Online, Inc..................... 50,400 2,709,000 3.1%
Guidant Corporation..................... 33,300 2,353,894 2.7%
Dell Computer Corporation............... 75,600 2,329,425 2.6%
Texas Instruments, Inc.................. 48,800 2,302,750 2.6%
Oracle Systems.......................... 28,400 2,236,500 2.5%
----------- ---------
$36,034,537 40.7%
=========== =========
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Technology 49.3%
Health Care 13.7%
Consumer Cyclical 9.3%
Capital Goods 9.2%
Cash and Other Assets/Liabilities 4.8%
Consumer Staples 4.4%
Communication Services 2.9%
Energy 2.9%
Basic Materials 1.2%
Financial 1.2%
Utilities 1.1%
</TABLE>
6
<PAGE>
ADVANTUS HORIZON FUND
INVESTMENTS IN SECURITIES
SEPTEMBER 30, 2000
(Percentages of each investment category relate to total net assets.)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE(A)
------ -----------
<C> <S> <C>
COMMON STOCK (95.3%)
BASIC MATERIALS (1.2%)
Chemicals (1.2%)
19,100 Pharmacia Corporation............................ $ 1,149,581
-----------
CAPITAL GOODS (9.2%)
Electrical Equipment (7.1%)
104,728 General Electric Company......................... 6,041,496
4,300 SCI Systems, Inc. (b)............................ 176,300
7,600 Solectron Corporation (b)........................ 350,550
-----------
6,568,346
-----------
Manufacturing (2.1%)
37,448 Tyco International, Ltd. (c)..................... 1,942,615
-----------
COMMUNICATION SERVICES (2.9%)
Cellular (.2%)
5,000 Western Wireless Corporation (b)................. 178,125
-----------
Telecommunication (2.3%)
15,500 Alcatel ADR (c).................................. 974,562
16,700 Qualcomm, Inc. (b)............................... 1,189,875
-----------
2,164,437
-----------
Telephone (.4%)
11,900 Nextlink Communications, Inc. (b)................ 418,731
-----------
CONSUMER CYCLICAL (9.3%)
Retail (5.5%)
27,900 Family Dollar Stores............................. 537,075
38,150 Home Depot, Inc.................................. 2,024,334
9,800 Kohls Corporation (b)............................ 565,337
3,900 Redback Networks, Inc. (b)....................... 639,356
27,300 Wal-Mart Stores, Inc............................. 1,313,812
-----------
5,079,914
-----------
Service (3.8%)
30,512 Omnicom Group.................................... 2,225,469
16,100 TMP Worldwide, Inc............................... 1,296,050
-----------
3,521,519
-----------
<CAPTION>
MARKET
SHARES VALUE(A)
------------------------------------------------------------------------
CONSUMER STAPLES (4.4%)
<C> <S> <C>
Entertainment (1.0%)
12,300 Time Warner, Inc................................. $ 962,475
-----------
Retail (1.5%)
30,682 Safeway, Inc..................................... 1,432,466
-----------
Service (1.9%)
26,400 Automatic Data Processing, Inc................... 1,765,500
-----------
ENERGY (2.9%)
Oil (.6%)
14,500 Diamond Offshore Drilling, Inc................... 594,500
-----------
Oil & Gas (2.3%)
2,800 Baker Hughes, Inc................................ 103,950
15,400 Nabors Industries, Inc. (b)...................... 806,960
8,925 Veritas DGC, Inc................................. 1,267,350
-----------
2,178,260
-----------
FINANCIAL (1.2%)
Investment Bankers/Brokers (1.2%)
30,600 Charles Schwab Corporation....................... 1,086,300
-----------
HEALTH CARE (13.7%)
Biotechnology (4.2%)
23,200 Amgen, Inc. (b).................................. 1,620,013
6,200 Genentech, Inc. (b).............................. 1,151,262
1,700 Human Genome Sciences, Inc. (b).................. 294,312
3,000 Idec Pharmaceuticals Corporation (b)............. 526,078
1,900 Millennium Pharmaceuticals, Inc. (b)............. 277,519
-----------
3,869,184
-----------
Drugs (5.5%)
112,650 Pfizer, Inc...................................... 5,062,209
-----------
Medical Products/Supplies (4.0%)
33,300 Guidant Corporation (b).......................... 2,353,894
25,700 Medtronic, Inc................................... 1,331,581
-----------
3,685,475
-----------
</TABLE>
See accompanying notes to investments in securities.
7
<PAGE>
ADVANTUS HORIZON FUND
INVESTMENTS IN SECURITIES - CONTINUED
<TABLE>
<CAPTION>
MARKET
SHARES VALUE(A)
------------------------------------------------------------------------
TECHNOLOGY (49.3%)
<C> <S> <C>
Communications Equipment (1.8%)
1,100 Brocade Communication Systems, Inc............... $ 259,600
2,300 Corvis Corporation (b)........................... 140,408
20,200 McLeodUSA, Inc. (b).............................. 289,112
16,800 Nortel Networks Corporation (c).................. 1,000,650
-----------
1,689,770
-----------
Computer Hardware (8.5%)
75,600 Dell Computer Corporation (b).................... 2,329,425
25,400 Gateway, Inc. (b)................................ 1,187,450
9,700 International Business Machines Corporation...... 1,091,250
28,300 Sun Microsystems, Inc. (b)....................... 3,304,025
-----------
7,912,150
-----------
Computer Networking (7.9%)
102,100 Cisco Systems, Inc. (b).......................... 5,641,025
19,600 Exodus Communications (b)........................ 967,750
3,500 Juniper Networks, Inc. (b)....................... 766,281
-----------
7,375,056
-----------
Computer Peripherals (4.4%)
40,900 EMC Corporation (b).............................. 4,054,213
-----------
Computer Services & Software (12.9%)
50,400 America Online, Inc. (b)......................... 2,709,000
13,800 BEA Systems, Inc. (b)............................ 1,074,675
15,600 Flextronics International, Ltd. (b)(c)........... 1,281,150
4,400 Gemstar International Group, Ltd. (b)............ 383,625
2,500 McData Corporation (b)........................... 307,227
30,600 Microsoft Corporation (b)........................ 1,843,650
28,400 Oracle Systems (b)............................... 2,236,500
<CAPTION>
MARKET
SHARES VALUE(A)
------------------------------------------------------------------------
TECHNOLOGY--CONTINUED
<C> <S> <C>
7,400 Real Networks, Inc. (b).......................... $ 294,150
5,300 Manugistics Group, Inc. (b)...................... 520,063
11,700 PE Corporation-PE Biosystems Group............... 1,363,050
-----------
12,013,090
-----------
Computer Systems (1.4%)
11,700 Comverse Technology, Inc. (b).................... 1,263,600
-----------
Data Processing (1.4%)
6,515 Verisign, Inc. (b)............................... 1,319,695
-----------
Electrical Instruments (2.3%)
23,000 JDS Uniphase Corporation (b)..................... 2,177,813
-----------
Semiconductor Equipment (1.1%)
47,600 Lam Research Corporation (b)..................... 996,625
-----------
Semiconductors (7.6%)
13,300 Altera Corporation (b)........................... 635,075
6,600 Analog Devices, Inc.............................. 544,913
3,800 Applied Materials, Inc. (b)...................... 225,388
44,900 Intel Corporation................................ 1,868,963
48,800 Texas Instruments, Inc........................... 2,302,750
11,600 Vitesse Semiconductor Corporation (b)............ 1,031,675
4,900 Xilinx, Inc. (b)................................. 419,563
-----------
7,028,327
-----------
UTILITIES (1.1%)
Electric Companies (1.1%)
15,300 AES Corporation (b).............................. 1,048,051
-----------
Total common stock (cost: $57,028,119)....................... $88,538,027
-----------
</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>
SHORT-TERM SECURITIES (2.9%)
1,318 Federated Money Market Obligations Trust -- Prime
Obligation Fund, current rate 6.460%............ $ 1,318
2,657,276 Provident Institutional Fund - TempFund
Portfolio, current rate 6.526%.................. 2,657,276
-----------
Total short-term securities (cost: $2,658,595)... 2,658,594
-----------
Total investments in securities
(cost: $59,686,714) (d)......................... $91,196,621
===========
</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 5.6% of net assets in foreign securities as of September 30,
2000.
(d) At September 30, 2000 the cost of securities for federal income tax purposes
was $61,123,488. The aggregate unrealized appreciation and depreciation of
investments in securities based on this cost were:
<TABLE>
<S> <C>
Gross unrealized appreciation...................................................... $35,227,740
Gross unrealized depreciation...................................................... (5,154,607)
-----------
Net unrealized appreciation........................................................ $30,073,133
===========
</TABLE>
9
<PAGE>
ADVANTUS HORIZON FUND
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 2000
<TABLE>
<S> <C>
ASSETS
Investments in securities, at market value - see accompanying
schedule for detailed listing
(identified cost: $59,686,714).................................. $91,196,621
Cash in bank on demand deposit................................... 77,974
Receivable for Fund shares sold.................................. 9,114
Receivable for investment securities sold........................ 2,821,486
Accrued interest receivable...................................... 10,121
Dividends receivable............................................. 33,235
Other receivable................................................. 5,263
-----------
Total assets................................................. 94,153,814
-----------
LIABILITIES
Payable for investment securities purchased...................... 1,171,266
Payable for Fund shares redeemed................................. 124,746
Payable to Adviser............................................... 15,996
-----------
Total liabilities............................................ 1,312,008
-----------
Net assets applicable to outstanding capital stock............... $92,841,806
===========
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..... $ 30,455
Additional paid-in capital..................................... 48,460,952
Accumulated net realized gains from investments................ 12,840,492
Unrealized appreciation on investments......................... 31,509,907
-----------
Total - representing net assets applicable to outstanding
capital stock................................................ $92,841,806
===========
Net assets applicable to outstanding Class A shares.............. $63,568,240
===========
Net assets applicable to outstanding Class B shares.............. $26,877,987
===========
Net assets applicable to outstanding Class C shares.............. $ 2,395,579
===========
Shares outstanding and net asset value per share:
Class A - Shares outstanding 2,045,578......................... $ 31.08
===========
Class B - Shares outstanding 918,522........................... $ 29.26
===========
Class C - Shares outstanding 81,378............................ $ 29.44
===========
</TABLE>
See accompanying notes to financial statements.
10
<PAGE>
ADVANTUS HORIZON FUND
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 2000
<TABLE>
<S> <C>
Investment income:
Interest....................................................... $ 134,555
Dividends...................................................... 299,622
-----------
Total investment income.................................... 434,177
-----------
Expenses (note 4):
Investment advisory fee........................................ 725,918
Rule 12b-1 - Class A........................................... 164,723
Rule 12b-1 - Class B........................................... 274,046
Rule 12b-1 - Class C........................................... 25,602
Administrative services fee.................................... 74,400
Transfer agent and shareholder services fees................... 147,643
Custodian fees................................................. 8,789
Auditing and accounting services............................... 23,902
Legal fees..................................................... 13,306
Directors' fees................................................ 1,394
Registration fees.............................................. 33,593
Printing and shareholder reports............................... 80,522
Insurance...................................................... 3,729
Other.......................................................... 15,109
-----------
Total expenses............................................. 1,592,676
-----------
Less fees and expenses waived or absorbed by Adviser........... (90,632)
-----------
Total net expenses....................................... 1,502,044
-----------
Investment loss - net.................................... (1,067,867)
-----------
Realized and unrealized gains on investments:
Net realized gains on investments (note 3)................... 15,798,951
Net change in unrealized appreciation or depreciation on
investments................................................. 986,530
-----------
Net gains on investments................................. 16,785,481
-----------
Net increase in net assets resulting from operations........... $15,717,614
===========
</TABLE>
See accompanying notes to financial statements.
11
<PAGE>
ADVANTUS HORIZON FUND
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED SEPTEMBER 30, 2000 AND 1999
<TABLE>
<CAPTION>
2000 1999
------------ ------------
<S> <C> <C>
Operations:
Investment loss - net................ $ (1,067,867) $ (671,499)
Net realized gains on investments.... 15,798,951 2,748,113
Net change in unrealized appreciation
or depreciation on investments..... 986,530 14,508,082
------------ ------------
Increase in net assets resulting
from operations................ 15,717,614 16,584,696
------------ ------------
Distributions to shareholders from net
realized gains on investments:
Class A............................ (1,947,401) (4,668,396)
Class B............................ (839,265) (1,807,953)
Class C............................ (79,353) (239,316)
------------ ------------
Total distributions.............. (2,866,019) (6,715,665)
------------ ------------
Capital share transactions (notes 4 and
5):
Proceeds from sales:
Class A............................ 12,781,313 13,006,405
Class B............................ 5,858,583 6,226,919
Class C............................ 480,940 737,287
Proceeds from issuance of shares as a
result of reinvested dividends:
Class A............................ 1,920,111 4,609,970
Class B............................ 812,787 1,795,826
Class C............................ 78,055 239,316
Payments for redemption of shares:
Class A............................ (16,846,488) (15,354,925)
Class B............................ (6,731,920) (3,959,284)
Class C............................ (1,044,844) (1,070,807)
------------ ------------
Increase (decrease) in net assets
from capital share
transactions................... (2,691,463) 6,230,707
------------ ------------
Total increase in net assets..... 10,160,132 16,099,738
Net assets at beginning of year........ 82,681,674 66,581,936
------------ ------------
Net assets at end of year.............. $ 92,841,806 $ 82,681,674
============ ============
</TABLE>
See accompanying notes to financial statements.
12
<PAGE>
ADVANTUS HORIZON FUND
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(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 accounting
principles generally accepted in the United States of America 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 value.
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 or realized gains were recorded by the
Fund.
The Fund elected to utilize equalization debits by which a portion of the
costs of redemptions, which occurred during the year ended September 30, 2000,
reduced accumulated net realized gains for tax purposes by $1,662,395. On the
statement of assets and liabilities, as a result of the Fund's election to
utilize equalization debits and other permanent book-to-tax differences, a
reclassification adjustment was made to decrease accumulated net investment loss
by $1,067,867, decrease accumulated net realized gains by $2,730,262 and
increase additional paid-in-capital by $1,662,395.
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, 2000, purchases of securities and proceeds
from sales, other than temporary investments in short-term securities,
aggregated $101,816,336 and $111,670,139, 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. The Fund has engaged PFPC Global Fund Services to act as its transfer
agent, dividend disbursing agent and redemption agent and bears the expenses of
such services. Prior to May 1, 2000, Advantus Capital paid the expense related
to transfer agent services. The fee for investment management and advisory
services is based on the average daily net assets of the Fund at the annual rate
of .70 percent on the first $1 billion in net assets, .65 percent on the next
$1 billion in net assets, .60 percent on net assets in excess of $2 billion.
Prior to May 1, 2000, the fee was charged at an 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
14
<PAGE>
ADVANTUS HORIZON FUND
NOTES TO FINANCIAL STATEMENTS - CONTINUED
(4) EXPENSES AND RELATED PARTY TRANSACTIONS - (CONTINUED)
.25 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.
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.
Advantus Capital directly incurs and pays the above operating expenses and
the Fund in turn reimburses Advantus Capital. Under the Advisory Agreement,
Advantus Capital has contractually agreed to absorb all Fund costs and expenses
which exceed 1.35% of Class A average daily net assets, 2.10% of Class B average
daily net assets and 2.10% of Class C average daily net assets through the
fiscal year of the Fund ending September 30, 2001. During the year ended
September 30, 2000, Advantus Capital contractually agreed to absorb $90,632 in
expenses which were otherwise payable by the Fund.
The Fund has entered in a shareholder and administrative services agreement
with Minnesota Life. Under this agreement, effective May 1, 2000, the Fund pays
a shareholder services fee, equal to $5 per shareholder account annually, to
Minnesota Life for shareholder services which Minnesota Life provides. The Fund
also pays Minnesota Life an administrative services fee equal to $6,200 per
month for accounting, legal and other administrative services which Minnesota
Life provides.
Sales charges received by Ascend for distributing the Fund's three classes
of shares amounted to $385,277.
As of September 30, 2000, Minnesota Life and subsidiaries and the directors
and officers of the Fund as a whole owned 45,751 Class A shares which represents
2.2 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 $10,406.
(5) CAPITAL SHARE TRANSACTIONS
Transactions in shares for the year ended September 30, 2000 and 1999 were
as follows:
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
------------------- ------------------- -------------------
2000 1999 2000 1999 2000 1999
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Sold.................................... 416,222 491,342 194,436 248,486 16,377 29,796
Issued for reinvested distributions..... 64,614 187,779 28,830 76,448 2,752 10,136
Redeemed................................ (540,501) (574,168) (227,243) (157,361) (36,606) (41,968)
-------- -------- -------- -------- ------- -------
(59,665) 104,953 (3,977) 167,573 (17,477) (2,036)
======== ======== ======== ======== ======= =======
</TABLE>
15
<PAGE>
ADVANTUS HORIZON FUND
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
----------------------------------------------------
YEAR ENDED SEPTEMBER 30,
----------------------------------------------------
2000 1999 1998 1997 1996
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
year........................ $ 26.88 $ 23.59 $ 23.06 $ 23.07 $ 20.94
------- ------- ------- ------- -------
Income from investment operations:
Net investment loss......... (.28) (.16) (.09) (.08) (.10)
Net gains on securities
(both realized and
unrealized)............... 5.41 5.77 3.48 4.89 3.51
------- ------- ------- ------- -------
Total from investment
operations.............. 5.13 5.61 3.39 4.81 3.41
------- ------- ------- ------- -------
Less distributions:
Distributions from net
realized gains............ (.93) (2.32) (2.86) (4.82) (1.28)
------- ------- ------- ------- -------
Total distributions....... (.93) (2.32) (2.86) (4.82) (1.28)
------- ------- ------- ------- -------
Net asset value, end of
year........................ $ 31.08 $ 26.88 $ 23.59 $ 23.06 $ 23.07
======= ======= ======= ======= =======
Total return (a).............. 19.26% 24.74% 16.38% 24.96% 17.23%
Net assets, end of year
(in thousands).............. $63,568 $56,581 $47,183 $40,192 $34,435
Ratio of expenses to average
daily net assets (b)(c)..... 1.33% 1.30% 1.36% 1.43% 1.41%
Ratio of net investment income
(loss) to average daily net
assets (b)(c)............... (.89)% (.61)% (.39)% (.39)% (.43)%
Portfolio turnover rate
(excluding short-term
securities)................. 109.3% 60.1% 72.6% 71.5% 84.7%
</TABLE>
------------
(a) 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.
(b) The Fund's Adviser voluntarily waived or absorbed $90,632 in expenses for
the year ended September 30, 2000. If the Fund had been charged with these
expenses, the ratio of expenses to average daily net assets would have been
1.42% for Class A, 2.17% for Class B and 2.17% for Class C, and the ratio
of net investment income (loss) would have been (.97)% for Class A, (1.72)%
for Class B and (1.72)% for Class C.
(c) 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.
16
<PAGE>
ADVANTUS HORIZON FUND
NOTES TO FINANCIAL STATEMENTS - CONTINUED
<TABLE>
<CAPTION>
CLASS B
---------------------------------------------------
YEAR ENDED SEPTEMBER 30,
---------------------------------------------------
2000 1999 1998 1997 1996
-------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
year........................ $ 25.54 $ 22.65 $ 22.41 $ 22.65 $20.74
------- ------- ------- ------- ------
Income from investment operations:
Net investment loss......... (.49) (.32) (.22) (.19) (.19)
Net gains on securities
(both realized and
unrealized)............... 5.14 5.53 3.32 4.77 3.38
------- ------- ------- ------- ------
Total from investment
operations.............. 4.65 5.21 3.10 4.58 3.19
------- ------- ------- ------- ------
Less distributions:
Distributions from net
realized gains............ (.93) (2.32) (2.86) (4.82) (1.28)
------- ------- ------- ------- ------
Total distributions....... (.93) (2.32) (2.86) (4.82) (1.28)
------- ------- ------- ------- ------
Net asset value, end of
year........................ $ 29.26 $ 25.54 $ 22.65 $ 22.41 $22.65
======= ======= ======= ======= ======
Total return (a).............. 18.40% 23.93% 15.48% 24.25% 16.34%
Net assets, end of year
(in thousands).............. $26,878 $23,561 $17,100 $11,684 $6,219
Ratio of expenses to average
daily net assets (b)(c)..... 2.08% 2.04% 2.07% 2.18% 2.19%
Ratio of net investment income
(loss) to average daily net
assets (b)(c)............... (1.63)% (1.34)% (1.11)% (1.13)% (1.19)%
Portfolio turnover rate
(excluding short-term
securities)................. 109.3% 60.1% 72.6% 71.5% 84.7%
<CAPTION>
CLASS C
-----------------------------------------------
YEAR ENDED SEPTEMBER 30,
-----------------------------------------------
2000 1999 1998 1997 1996
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
year........................ $25.69 $22.79 $22.38 $22.67 $20.75
------ ------ ------ ------ ------
Income from investment operati
Net investment loss......... (.51) (.36) (.24) (.20) (.15)
Net gains on securities
(both realized and
unrealized)............... 5.19 5.58 3.51 4.73 3.35
------ ------ ------ ------ ------
Total from investment
operations.............. 4.68 5.22 3.27 4.53 3.20
------ ------ ------ ------ ------
Less distributions:
Distributions from net
realized gains............ (.93) (2.32) (2.86) (4.82) (1.28)
------ ------ ------ ------ ------
Total distributions....... (.93) (2.32) (2.86) (4.82) (1.28)
------ ------ ------ ------ ------
Net asset value, end of
year........................ $29.44 $25.69 $22.79 $22.38 $22.67
====== ====== ====== ====== ======
Total return (a).............. 18.37% 23.82% 15.74% 24.03% 16.33%
Net assets, end of year
(in thousands).............. $2,396 $2,540 $2,299 $1,754 $1,018
Ratio of expenses to average
daily net assets (b)(c)..... 2.08% 2.04% 2.07% 2.18% 2.19%
Ratio of net investment income
(loss) to average daily net
assets (b)(c)............... (1.63)% (1.34)% (1.10)% (1.14)% (1.17)%
Portfolio turnover rate
(excluding short-term
securities)................. 109.3% 60.1% 72.6% 71.5% 84.7%
</TABLE>
------------
(a) 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.
(b) The Fund's Adviser voluntarily waived or absorbed $90,632 in expenses for
the year ended September 30, 2000. If the Fund had been charged with these
expenses, the ratio of expenses to average daily net assets would have been
1.42% for Class A, 2.17% for Class B and 2.17% for Class C, and the ratio
of net investment income (loss) would have been (.97)% for Class A, (1.72)%
for Class B and (1.72)% for Class C.
(c) 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.
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, 2000 and the related statement of
operations for the year then ended, the statements of changes in net assets for
each of the years 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 auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit 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, 2000, by correspondence with the custodian
and brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and the financial highlights
referred to above present fairly, in all material respects, the financial
position of the Fund as of September 30, 2000 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 accounting principles generally
accepted in the United States of America.
KPMG LLP
Minneapolis, Minnesota
November 10, 2000
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, 2000. Dividends for the 2000 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
CAPITAL GAINS DISTRIBUTIONS-TAXABLE AS LONG-TERM CAPITAL GAINS, 20% RATE.
<TABLE>
<S> <C>
Total long-term capital gain distributions were............. $4,528,414
==========
</TABLE>
19
<PAGE>
ADVANTUS HORIZON FUND
SHAREHOLDER VOTING RESULTS
On April 17, 2000, a special meeting of shareholders of Advantus Horizon Fund,
Inc. was held. Shareholders of record on February 28, 2000, were entitled to
vote on the proposals described below.
(1) To elect a Board of Directors as follows:
<TABLE>
<CAPTION>
VOTES VOTES
DIRECTOR FOR WITHHELD
-------- --------- --------
<S> <C> <C>
Charles E. Arner....................... 1,809,761 103,829
Ellen S. Berscheid..................... 1,809,931 103,659
Ralph D. Ebbott........................ 1,809,761 103,829
Frederick P. Feuerherm................. 1,810,425 103,165
William N. Westhoff.................... 1,810,450 103,140
</TABLE>
(2) To approve the elimination or modification of the following investment
policies for:
<TABLE>
<CAPTION>
VOTES VOTES VOTES
FOR AGAINST WITHHELD
---------- ------- --------
<S> <C> <C> <C> <C>
A. Modify policy regarding borrowing and the
issuance of senior securities................... 1,460,765 45,912 112,882
B. Modify policy regarding concentration in a
particular industry............................. 1,461,817 44,761 112,980
C. Modify policy regarding investments in real
estate and commodities.......................... 1,471,404 35,373 112,782
D. Modify policy regarding lending.................. 1,455,430 49,563 114,566
E. Eliminate policy restricting the pledging of
assets.......................................... 1,451,439 52,696 115,424
F. Eliminate policy restricting margin purchases and
short sales..................................... 1,452,150 54,640 112,769
G. Eliminate policy prohibiting transactions with
affiliates...................................... 1,470,637 33,932 114,990
H. Eliminate policy prohibiting participation in a
joint trading account........................... 1,464,822 39,642 115,095
I. Eliminate policy limiting investment in
restricted securities and other illiquid
assets.......................................... 1,468,061 41,898 109,600
J. Eliminate policy limiting options transactions... 1,447,098 53,986 118,474
K. Eliminate diversification policy................. 1,461,493 41,219 116,847
L. Eliminate policy regarding investments in issuers
that have been in operation for less than 3
years........................................... 1,465,546 38,111 115,902
M. Eliminate policy addressing potential conflicts
of interest..................................... 1,453,930 54,043 111,585
N. Eliminate policy prohibiting investing in
companies for control........................... 1,469,042 38,675 111,842
O. Eliminate policy restricting investments in other
investment companies............................ 1,467,691 39,949 111,919
</TABLE>
(3) To approve a change in investment objective
<TABLE>
<CAPTION>
VOTES VOTES VOTES
FOR AGAINST WITHHELD
---------- ------- --------
<S> <C> <C> <C>
1,476,552 26,444 116,563
</TABLE>
(4) To approve an amendment to the investment advisory agreement between the
Fund and Advantus Capital Management, Inc., as described in the proxy statement
<TABLE>
<CAPTION>
VOTES VOTES VOTES
FOR AGAINST WITHHELD
---------- ------- --------
<S> <C> <C> <C>
1,465,604 33,613 120,342
</TABLE>
(5) To ratify the selection of KPMG LLP as independent public accountants for
the Fund
<TABLE>
<CAPTION>
VOTES VOTES VOTES
FOR AGAINST WITHHELD
---------- ------- --------
<S> <C> <C> <C>
1,785,555 15,187 112,849
</TABLE>
20
<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
21
<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 7:30
a.m. to 5:15 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.
INTERNET ADDRESS: www.AdvantusFunds.com
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) or visit
www.AdvantusFunds.com.
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.,
Advantus Enterprise Fund, Inc., and Advantus Venture Fund, Inc., the
sub-adviser, Templeton Investment Counsel, Inc., Credit Suisse Asset Management,
LLC, and State Street Research & Management Company, respectively, selects the
Fund's investments.)
Advantus Capital Management, Inc. manages twelve mutual funds containing
$3.2 billion in assets in addition to $11.5 billion in assets for other clients.
Advantus Capital's seasoned portfolio managers average more than 14 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
22
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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>
ASCEND FINANCIAL SERVICES, INC. PRESORTED STANDARD
400 ROBERT STREET NORTH U.S. POSTAGE PAID
ST. PAUL, MN 55101-2098 ST. PAUL, MN
PERMIT NO. 3547
FORWARDING SERVICE REQUESTED
F.48637 Rev. 11-2000
