<PAGE>
HORIZON
ADVANTUS HORIZON FUND, INC.
SEMI-ANNUAL REPORT TO SHAREHOLDERS DATED MARCH 31, 2000
EQUITY [LOGO]
<PAGE>
ADVANTUS HORIZON FUND
TABLE OF CONTENTS
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
SHAREHOLDER SERVICES 18
<PAGE>
LETTER FROM THE PRESIDENT [PHOTO]
Dear Shareholder:
Americans are enjoying the longest period of economic expansion in U.S. history.
This period of growth, which began in March of 1992, recorded its eighth year of
uninterrupted growth in March. To date, the Federal Reserve's actions to slow
the nation's growth engine have not dramatically impacted the upward trend.
Despite the run-up in interest rates over the past year, housing starts and auto
sales, indicators of a robust economy, remain strong.
Around the globe we are seeing economic growth accelerate, albeit at a modest
pace. Asia is rapidly recovering from the economic debacle of the late 90s. The
Bank of Japan has kept interest rates near zero to further assist that country's
recovery. In Europe, the Central Bank raised rates to support a weak euro and
guard against inflation. Latin American economies, such as Brazil, are showing
signs of increasing strength (e.g., lower inflation, job creation). No country
comes close to the sustained economic vigor of the U.S., but many of the world's
economies are growing.
Volatility in the stock market was frequent and dramatic throughout the six-
months, with the wildest of the ride coming in early April, shortly after this
reporting period ended. The first calendar quarter of the new millennium was a
time of contrasts. For the first two months, the broad market was slightly down,
with the growth sector of technology rising and the value sectors of the market
falling. March was a reversal, with a strong rally in traditional value stocks
and a pullback in the technology arena, adding to the market tumult. Technology,
however, continues to drive the increased spending in businesses. As tech
spending increases, so does productivity.
Interest rates also showed a mixed picture. The Federal Reserve raised the Fed
Funds rate five times between June 1999 and March 2000. Each time only .25
percent, a cumulative increase of 1.25 percent over this 10-month period.
However, longer maturity Treasury bond prices rose and their yields declined as
the U.S. Treasury used some of the budget surplus to begin buying back Treasury
bonds. Meanwhile, corporate bond yields increased.
In the pages that follow, your Fund's portfolio manager will give you his
insight on the Fund's performance for this reporting period. Also, we are
pleased to announce that you can now access your Advantus Funds data online
through the Advantus web site: www.advantusfunds.com. To learn how you can
access your Advantus Fund information through our internet site, call Advantus
Shareholder Services at 1-800-665-6005.
We value your business and want to make doing business with us as easy for you
as possible. Thank you for investing with Advantus.
Sincerely,
/s/ William N. Westhoff
William N. Westhoff, President
Advantus Funds
<PAGE>
ADVANTUS HORIZON FUND
PERFORMANCE UPDATE
[PHOTO]
THOMAS A. GUNDERSON, CFA
PORTFOLIO MANAGER
The Advantus Horizon Fund is a mutual fund designed for investors seeking
long-term growth of capital combined with a moderate level of current income.
The Fund plans to achieve its objective by investing in equity securities
diversified among individual companies and industries. The Fund invests
primarily in dividend-paying 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 six-month period ended March 31, 2000, the Advantus Horizon Fund
returned the following for each class of shares currently offered:
<TABLE>
<S> <C>
CLASS A.......................... 31.50 PERCENT*
CLASS B.......................... 31.02 PERCENT*
CLASS C.......................... 31.00 PERCENT*
</TABLE>
The Fund's benchmark, the Russell 1000 Growth Index,** returned 34.06 percent
for the same period.
PERFORMANCE ANALYSIS
A strong economy combined with accelerating corporate earnings growth and benign
inflation proved to be the right ingredients for a continued rally in the stock
market. The Fund benefited by being well positioned in the growth sectors of the
market.
The Technology sector again led the market higher. The new information-based
economy requires significant capital expenditures to build out the
infrastructure for the digital world. The Horizon Fund is focused on identifying
the leading companies in the growth industries that supply the tools for
corporations to compete in the new economy. This focus paid off over the last
six months as the Technology sector of the Fund gained over 70% for the period.
Leading the way was our largest holding, Cisco Systems Inc., a company at the
very heart of the Internet infrastructure build out. We identified the fiber
optic telecommunications as a very fast growing and dynamic market and took
positions in JDS Uniphase Corporation and Nortel Networks Corporation - both
companies significantly contributed to the Fund's performance this reporting
period. Wireless communications is another growth industry. The Fund has
meaningful positions in two of the leaders in this area. Nokia Oyj, whose
strength is in the wireless handsets, and Telefonaktiebolaget LM Ericsson, whose
strength is in the wireless infrastructure, are both positioned to benefit from
the upgrade of the wireless networks to handle data in addition to the current
voice platform.
Strong performance was also shown in various other sectors. The Consumer
Cyclicals sector performed well for the period as the strong economy led to high
consumer confidence and good real wage growth (i.e., people had money in their
pockets and felt confident about the future). Home Depot Inc., the Fund's
largest position in this sector, was a beneficiary of this trend and posted
earnings gains and price appreciation north of 38* percent for the period. Other
winners in this sector include long held Omnicom Group, Inc., the world's
leading advertising agency, and Kohl's Corporation, one of the strongest apparel
retailers in the country. General Electric Company continued to post consistent
earnings numbers and gained over 35* percent for the period, giving a boost to
the Capital Goods sector.
2
<PAGE>
Financials and Health Care were weaker sectors for the market and the Fund.
Climbing interest rates and a tightening Federal Reserve policy hurt the
Financial sector. The Fund sold its position in Freddie Mac, a government
agency, and Capital One Financial, a credit card issuer, as the longer-term
trends for most financials are not positive. One area of the market we do like
is the strong franchise names such as Charles Schwab Corporation, which was
added in this period, as they are well positioned to gather assets. The Health
sector lagged due to slower earnings growth than the market. Fears over future
government involvement in the payment for prescriptions and, in general, lack
luster new product pipelines for the major pharmaceutical companies.
We are continually fine tuning the portfolio by weeding out the companies not
meeting our criteria and then putting new money to work in exciting new
companies. During the period we identified several new stocks with the
ingredients for success that we are looking for: market leaders in growing
profitable industries, high return on capital, solid business models and
talented management teams that can position the company for years of continued
strong earnings growth. Examples include Kohl's Corporation, a brand name
retailer that is well positioned to roll out their stores in several northeast
markets. Schlumberger, Ltd., a leader in the oil field services industry, was
also added as the demand for oil continues to be strong. A handful of stocks
were completely sold from the Fund as they did not continue to meet our
fundamental criteria. Carnival Cruise Lines was sold as its pricing remained
soft. Johnson & Johnson was also sold due to deteriorating fundamentals.
OUTLOOK
The fundamentals for the market continue to be very strong. Earnings growth has
picked up while inflation remains benign. Over the short term, we expect that
the market will have to deal with the negative impacts of climbing interest
rates as the Federal Reserve continues its "tightening" posture through the
first half of 2000 in hopes of slowing the torrid pace of economic growth. This
could cause near-term volatility in a longer-term bull market.
We will continue to apply our fundamental analysis to discover and 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. If these charges were reflected, performance would be reduced.
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 March 31, 1990 through March 31, 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
March 31, 2000.
CLASS A
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
AVERAGE ANNUAL TOTAL RETURN:
(Thousands)
<TABLE>
<S> <C> <C>
Class A:
One year 24.50%
Five year 25.18%
Ten year 17.84%
</TABLE>
<TABLE>
<S> <C> <C> <C>
Russell
Class A CPI 1000 Growth Index
3/31/90 $10,000 $10,000 $10,000
10/31/90 $8,848 $10,689 $9,268
10/31/91 $12,288 $11,002 $12,999
10/31/92 $13,554 $11,354 $14,405
10/31/93 $14,579 $11,659 $15,455
9/30/94 $14,787 $12,011 $16,804
9/30/95 $18,449 $12,276 $22,214
9/30/96 $21,628 $12,644 $26,967
9/30/97 $27,026 $12,925 $36,753
9/30/98 $31,452 $13,109 $40,833
9/30/99 $39,232 $13,454 $55,066
3/31/00 $51,588 $13,292 $74,651
</TABLE>
4
<PAGE>
CLASS B
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
AVERAGE ANNUAL TOTAL RETURN:
(Thousands)
<TABLE>
<S> <C> <C>
Class B:
One year 25.77%
Five year 25.58%
Since inception (8/19/94) 24.20%
</TABLE>
<TABLE>
<S> <C> <C> <C>
Russell
Class B CPI 1000 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
3/31/00 33,797 11,498 44,482
</TABLE>
CLASS C
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
AVERAGE ANNUAL TOTAL RETURN:
(Thousands)
<TABLE>
<S> <C> <C>
Class C:
One year 30.74%
Five year 25.66%
Since inception (3/1/95) 25.71%
</TABLE>
<TABLE>
<S> <C> <C> <C>
Russell
Class C CPI 1000 Growth Index
3/01/95 $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
3/31/00 32,031 11,338 40,978
</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>
Cisco Systems, Inc........................ 103,900 $ 8,032,769 7.8%
Intel Corporation......................... 51,900 6,847,556 6.7%
General Electric Company.................. 39,976 6,203,775 6.0%
Microsoft Corporation..................... 50,600 5,376,250 5.2%
Texas Instruments, Inc.................... 21,400 3,424,000 3.3%
Sun Microsystems, Inc..................... 35,700 3,345,201 3.3%
EMC Corporation........................... 26,300 3,287,500 3.2%
Home Depot, Inc........................... 45,650 2,944,425 2.9%
Nokia Oyj................................. 12,100 2,628,725 2.6%
Dell Computer Corporation................. 47,600 2,567,425 2.5%
----------- ----
$44,657,626 43.5%
=========== ====
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Cash and Other Assets/Liabilities 2.0%
Financial 0.6%
Utilities 1.0%
Energy 2.3%
Communication Services 4.2%
Consumer Staples 5.1%
Consumer Cyclical 8.2%
Capital Goods 9.7%
Health Care 12.1%
Technology 54.8%
</TABLE>
6
<PAGE>
ADVANTUS HORIZON FUND
INVESTMENTS IN SECURITIES
MARCH 31, 2000
(UNAUDITED)
(Percentages of each investment category relate to total net assets.)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE(A)
------ ------------
<C> <S> <C>
COMMON STOCK (98.0%)
CAPITAL GOODS (9.7%)
Electrical Equipment (5.9%)
39,976 General Electric Company......................... $ 6,203,775
------------
Manufacturing (2.4%)
50,948 Tyco International, Ltd. (c)..................... 2,541,031
------------
Office Equipment (1.4%)
13,700 Lexmark International Group, Inc. (b)............ 1,448,775
------------
COMMUNICATION SERVICES (4.2%)
Telecommunication (3.9%)
6,000 Exodus Commmunications, Inc. (b)................. 843,000
23,738 MCI Worldcom, Inc. (b)........................... 1,075,628
9,000 Qualcomm, Inc. (b)............................... 1,343,812
8,800 Sprint Corporation............................... 554,400
3,000 Time Warner Telecom, Inc......................... 238,500
------------
4,055,340
------------
Telephone (.3%)
2,800 Nextlink Communications, Inc. (b)................ 346,325
------------
CONSUMER CYCLICAL (8.2%)
Retail (5.8%)
26,900 Family Dollar Stores............................. 559,856
45,650 Home Depot, Inc.................................. 2,944,425
11,000 Kohl's Corporation............................... 1,127,500
26,300 Wal-Mart Stores, Inc............................. 1,459,650
------------
6,091,431
------------
Service (2.4%)
24,512 Omnicom Group, Inc............................... 2,290,340
2,400 TMP Worldwide, Inc. (b).......................... 186,600
------------
2,476,940
------------
<CAPTION>
MARKET
SHARES VALUE(A)
-----------------------------------------------------------------------
CONSUMER STAPLES (5.1%)
<C> <S> <C>
Entertainment (2.0%)
20,900 Time Warner, Inc. (b)............................ $ 2,090,000
------------
Retail (1.7%)
40,682 Safeway, Inc. (b)................................ 1,840,860
------------
Service (1.4%)
25,500 Automatic Data Processing, Inc................... 1,230,375
4,100 Robert Half International........................ 194,493
------------
1,424,868
------------
ENERGY (2.3%)
Oil (.3%)
7,400 Diamond Offshore Drilling........................ 295,538
------------
Oil & Gas (2.0%)
30,200 Baker Hughes, Inc................................ 913,550
9,500 Nabors Industries................................ 368,719
11,000 Schlumberger, Ltd................................ 841,500
------------
2,123,769
------------
FINANCIAL (.6%)
Investment Bankers/Brokers (.6%)
10,500 Charles Schwab Corporation....................... 596,531
------------
HEALTH CARE (12.1%)
Biotechnology (2.7%)
14,500 Amgen, Inc. (b).................................. 889,938
5,900 Biogen, Inc. (b)................................. 412,263
8,200 Genetech (b)..................................... 1,246,400
4,100 Immunex Corporation (b).......................... 260,094
------------
2,808,695
------------
Drugs (3.9%)
10,500 Bristol-Myers Squibb Company..................... 606,375
7,400 Eli Lilly & Company.............................. 466,200
18,400 Merck & Co., Inc................................. 1,143,100
31,400 Pfizer, Inc...................................... 1,148,063
</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>
18,600 Schering Plough Corporation...................... $ 683,550
------------
4,047,288
------------
Health Care - Diversified (2.2%)
23,600 Warner-Lambert Company........................... 2,301,000
------------
Medical Products/Supplies (3.3%)
27,900 Guidant Corporation (b).......................... 1,640,869
35,700 Medtronic, Inc................................... 1,836,319
------------
3,477,188
------------
TECHNOLOGY (54.8%)
37,200 America Online, Inc. (b)......................... 2,501,700
21,200 Applied Materials, Inc. (b)...................... 1,998,100
4,600 BEA Systems, Inc. (b)............................ 337,525
103,900 Cisco Systems, Inc. (b).......................... 8,032,769
7,300 Comverse Technology (b).......................... 1,379,700
47,600 Dell Computer Corporation (b).................... 2,567,425
2,500 eBay, Inc. (b)................................... 440,000
1,700 Efficient Networks, Inc. (b)..................... 264,775
26,300 EMC Corporation (b).............................. 3,287,500
21,600 Gateway, Inc. (b)................................ 1,144,800
7,000 Gemstar International Group, Ltd................. 602,000
51,900 Intel Corporation................................ 6,847,556
9,500 International Business Machines.................. 1,121,000
5,300 JDS Uniphase Corporation (b)..................... 638,981
36,000 Lam Research Corporation (b)..................... 1,622,250
<CAPTION>
MARKET
SHARES VALUE(A)
-----------------------------------------------------------------------
TECHNOLOGY--CONTINUED
<C> <S> <C>
21,400 Lucent Technologies Incorporated................. $ 1,300,050
5,200 Manugistics Group, Inc. (b)...................... 261,300
5,100 McLeodusa, Inc. (b).............................. 432,544
50,600 Microsoft Corporation (b)........................ 5,376,250
6,300 Network Solutions, Inc. (b)...................... 968,330
12,100 Nokia Oyj (c).................................... 2,628,725
7,500 Nortel Networks Corporation (c).................. 945,000
29,200 Oracle Corporation (b)........................... 2,279,425
10,400 PE Corp - PE Biosystems Group.................... 1,003,600
1,600 RF Micro Devices, Inc. (b)....................... 215,000
2,300 Siebel Systems, Inc. (b)......................... 274,706
35,700 Sun Microsystems, Inc. (b)....................... 3,345,201
12,400 Telefonaktiebolaget LM Ericsson (c).............. 1,163,275
21,400 Texas Instruments, Inc........................... 3,424,000
5,625 VERITAS Software Corporation (b)................. 736,875
2,200 Yahoo!, Inc. (b)................................. 377,025
------------
57,517,387
------------
UTILITIES (1.0%)
Electric Companies (1.0%)
13,400 AES Corporation (b).............................. 1,055,250
------------
Total common stock (cost: $56,825,748)..................... 102,741,991
------------
</TABLE>
See accompanying notes to investments in securities.
8
<PAGE>
ADVANTUS HORIZON FUND
INVESTMENTS IN SECURITIES - CONTINUED
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE(A)
--------- ------------
<C> <S> <C> <C> <C>
SHORT-TERM SECURITIES (1.7%)
$1,803,070 Federated Money Market Obligations Trust -
Prime Obligation Fund,
current rate 5.800%........................... $ 1,803,070
------------
Total short-term securities
(cost: $1,803,070)............................ 1,803,070
------------
Total investments in securities
(cost: $58,628,818) (d)....................... $104,545,061
============
</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 6.9% of net assets in foreign securities as of March 31, 2000.
(d) At March 31, 2000 the cost of securities for federal income tax purposes was
$58,982,457. The aggregate unrealized appreciation and depreciation of
investments in securities based on this cost were:
<TABLE>
<S> <C>
Gross unrealized appreciation.......... $ 46,995,384
Gross unrealized depreciation.......... (1,432,780)
------------
Net unrealized appreciation............ $ 45,562,604
============
</TABLE>
9
<PAGE>
ADVANTUS HORIZON FUND
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 2000
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Investments in securities, at market
value - see accompanying schedule for
detailed listing
(identified cost: $58,628,818)......... $ 104,545,061
Cash in bank on demand deposit.......... 4,816
Receivable for Fund shares sold......... 33,721
Receivable for investment securities
sold................................... 2,070,182
Accrued interest receivable............. 7,985
Dividends receivable.................... 37,858
Other receivables....................... 14,622
-------------
Total assets........................ 106,714,245
-------------
LIABILITIES
Payable for investment securities
purchased.............................. 1,652,996
Payable for Fund shares redeemed........ 52,479
Payable to Adviser...................... 137,990
-------------
Total liabilities................... 1,843,465
-------------
Net assets applicable to outstanding
capital stock.......................... $ 104,870,780
=============
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............................. $ 31,151
Additional paid-in capital............ 48,670,344
Accumulated net realized gains from
investments........................... 10,253,042
Unrealized appreciation on
investments........................... 45,916,243
-------------
Total - representing net assets
applicable to outstanding capital
stock............................... $ 104,870,780
=============
Net assets applicable to outstanding
Class A shares......................... $ 72,125,320
=============
Net assets applicable to outstanding
Class B shares......................... $ 29,925,921
=============
Net assets applicable to outstanding
Class C shares......................... $ 2,819,539
=============
Shares outstanding and net asset value
per share:
Class A - Shares outstanding
2,104,648............................. $ 34.27
=============
Class B - Shares outstanding
923,936............................... $ 32.39
=============
Class C - Shares outstanding 86,531... $ 32.58
=============
</TABLE>
See accompanying notes to financial statements.
10
<PAGE>
ADVANTUS HORIZON FUND
STATEMENT OF OPERATIONS
PERIOD FROM OCTOBER 1, 1999 TO MARCH 31, 2000
(UNAUDITED)
<TABLE>
<S> <C>
Investment income:
Interest.............................. $ 62,751
Dividends............................. 158,159
-------------
Total investment income............. 220,910
-------------
Expenses (note 4):
Investment advisory fee............... 374,372
Rule 12b-1 - Class A.................. 80,786
Rule 12b-1 - Class B.................. 131,878
Rule 12b-1 - Class C.................. 12,941
Administrative services fee........... 37,200
Custodian fees........................ 2,045
Auditing and accounting services...... 11,396
Legal fees............................ 4,000
Registration fees..................... 25,396
Printing and shareholder reports...... 62,786
Insurance............................. 1,865
Directors' fees....................... 778
Other................................. 4,594
-------------
Total expenses...................... 750,037
-------------
Investment loss - net............... (529,127)
-------------
Realized and unrealized gains on
investments:
Net realized gains on investments
(note 3)............................ 10,481,239
Net change in unrealized appreciation
or depreciation on investments...... 15,392,866
-------------
Net gains on investments............ 25,874,105
-------------
Net increase in net assets resulting
from operations....................... $ 25,344,978
=============
</TABLE>
See accompanying notes to financial statements.
11
<PAGE>
ADVANTUS HORIZON FUND
STATEMENTS OF CHANGES IN NET ASSETS
PERIOD FROM OCTOBER 1, 1999 TO MARCH 31, 2000 AND YEAR ENDED SEPTEMBER 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
2000 1999
------------- -------------
<S> <C> <C>
Operations:
Investment loss - net................. $ (529,127) $ (671,499)
Net realized gain on investments...... 10,481,239 2,748,113
Net change in unrealized appreciation
or depreciation on investments...... 15,392,866 14,508,082
------------ ------------
Increase in net assets resulting
from operations................... 25,344,978 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 6):
Proceeds from sales:
Class A............................. 6,839,560 13,006,405
Class B............................. 2,861,697 6,226,919
Class C............................. 313,901 737,287
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............................. (8,852,816) (15,354,925)
Class B............................. (3,530,527) (3,959,284)
Class C............................. (732,621) (1,070,807)
------------ ------------
(Decrease) increase in net assets
from capital share transactions... (289,853) 6,230,707
------------ ------------
Total increase in net assets........ 22,189,106 16,099,738
Net assets at beginning of period....... 82,681,674 66,581,936
------------ ------------
Net assets at end of period............. $104,870,780 $ 82,681,674
============ ============
</TABLE>
See accompanying notes to financial statements.
12
<PAGE>
ADVANTUS HORIZON FUND
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000
(UNAUDITED)
(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
$529,127.
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 period ended March 31, 2000, purchases of securities and proceeds
from sales, other than temporary investments in short-term securities aggregated
$55,955,028 and $60,694,506, 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 (PFPC
Global Fund Services, formerly First Data Investor Services Group). 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. 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.
14
<PAGE>
ADVANTUS HORIZON FUND
NOTES TO FINANCIAL STATEMENTS - CONTINUED
(4) EXPENSES AND RELATED PARTY TRANSACTIONS - (CONTINUED)
The Fund has entered into a shareholder and administrative services
agreement with Minnesota Life Insurance Company (Minnesota Life). Under this
agreement, the Fund pays an administrative service fee equal to $6,200 per month
to Minnesota Life for accounting, auditing, legal and other administrative
services which Minnesota Life provides. Prior to August 1, 1999, the
administrative services fee was $5,700 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 Fund's 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 $99,645.
As of March 31, 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 $2,825.
(5) CAPITAL SHARE TRANSACTIONS
Transactions in shares for the period ended October 1, 1999 to March 31,
2000 and the year ended 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....................................... 224,428 491,342 94,472 248,486 10,843 29,796
Issued for reinvested distributions........ 64,569 187,779 28,830 76,448 2,753 10,136
Redeemed................................... (289,592) (574,168) (121,865) (157,361) (25,920) (41,968)
-------- -------- -------- -------- ------- -------
(595) 104,953 1,437 167,573 (12,324) (2,036)
======== ======== ======== ======== ======= =======
</TABLE>
15
<PAGE>
ADVANTUS HORIZON FUND
NOTES TO FINANCIAL STATEMENTS - CONTINUED
FINANCIAL HIGHLIGHTS
Per share data for a share of capital stock and selected information for
each period are as follows:
<TABLE>
<CAPTION>
CLASS A
------------------------------------------------------------------
PERIOD FROM
OCTOBER 1,
1999 TO
MARCH 31, YEAR ENDED SEPTEMBER 30,
2000 ----------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995(A)
----------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period... $ 26.88 $ 23.59 $ 23.06 $ 23.07 $ 20.94 $ 17.34
------- ------- ------- ------- ------- -------
Income from investment operations:
Net investment loss.................. (.36) (.16) (.09) (.08) (.10) (.03)
Net gains on securities (both
realized and unrealized)........... 8.68 5.77 3.48 4.89 3.51 4.17
------- ------- ------- ------- ------- -------
Total from investment operations... 8.32 5.61 3.39 4.81 3.41 4.14
------- ------- ------- ------- ------- -------
Less distributions:
Distributions from net realized
gains.............................. (.93) (2.32) (2.86) (4.82) (1.28) (.54)
------- ------- ------- ------- ------- -------
Total distributions................ (.93) (2.32) (2.86) (4.82) (1.28) (.54)
------- ------- ------- ------- ------- -------
Net asset value, end of period......... $ 34.27 $ 26.88 $ 23.59 $ 23.06 $ 23.07 $ 20.94
======= ======= ======= ======= ======= =======
Total return (c)....................... 31.50% 24.74% 16.38% 24.96% 17.23% 24.76%
Net assets, end of period (in
thousands)........................... $72,125 $56,581 $47,183 $40,192 $34,435 $36,040
Ratio of expenses to average daily net
assets (d)(e)........................ 1.37%(f) 1.30% 1.36% 1.43% 1.41% 1.41%
Ratio of net investment income (loss)
to average daily net
assets (d)(e)........................ (.90)%(f) (.61)% (.39)% (.39)% (.43)% (.15)%
Portfolio turnover rate (excluding
short-term securities)............... 61.2% 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
------------------------------------------------------------------
PERIOD FROM
OCTOBER 1,
1999 TO
MARCH 31, YEAR ENDED SEPTEMBER 30,
2000 ----------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995(A)
----------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period... $ 25.54 $ 22.65 $ 22.41 $ 22.65 $20.74 $17.33
------- ------- ------- ------- ------ ------
Income from investment operations:
Net investment loss.................. (.44) (.32) (.22) (.19) (.19) (.10)
Net gains on securities (both
realized and unrealized)........... 8.22 5.53 3.32 4.77 3.38 4.05
------- ------- ------- ------- ------ ------
Total from investment operations... 7.78 5.21 3.10 4.58 3.19 3.95
------- ------- ------- ------- ------ ------
Less distributions:
Distributions from net realized
gains.............................. (.93) (2.32) (2.86) (4.82) (1.28) (.54)
------- ------- ------- ------- ------ ------
Total distributions................ (.93) (2.32) (2.86) (4.82) (1.28) (.54)
------- ------- ------- ------- ------ ------
Net asset value, end of period......... $ 32.39 $ 25.54 $ 22.65 $ 22.41 $22.65 $20.74
======= ======= ======= ======= ====== ======
Total return (c)....................... 31.02% 23.93% 15.48% 24.25% 16.34% 23.65%
Net assets, end of period (in
thousands)........................... $29,926 $23,561 $17,100 $11,684 $6,219 $2,592
Ratio of expenses to average daily net
assets (d)(e)........................ 2.11%(f) 2.04% 2.07% 2.18% 2.19% 2.24%
Ratio of net investment income (loss)
to average daily net
assets (d)(e)........................ (1.64)%(f) (1.34)% (1.11)% (1.13)% (1.19)% (1.05)%
Portfolio turnover rate (excluding
short-term securities)............... 61.2% 60.1% 72.6% 71.5% 84.7% 46.8%
<CAPTION>
CLASS C
-----------------------------------------------------------------------
PERIOD FROM
OCTOBER 1, PERIOD FROM
1999 TO MARCH 01,
MARCH 31, YEAR ENDED SEPTEMBER 30, 1995(B) TO
2000 ----------------------------------------- SEPTEMBER 30,
(UNAUDITED) 1999 1998 1997 1996 1995
----------- -------- -------- -------- -------- -------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period... $25.69 $22.79 $22.38 $22.67 $20.75 $17.52
------ ------ ------ ------ ------ ------
Income from investment operations:
Net investment loss.................. (.45) (.36) (.24) (.20) (.15) (.06)
Net gains on securities (both
realized and unrealized)........... 8.27 5.58 3.51 4.73 3.35 3.29
------ ------ ------ ------ ------ ------
Total from investment operations... 7.82 5.22 3.27 4.53 3.20 3.23
------ ------ ------ ------ ------ ------
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 period......... $32.58 $25.69 $22.79 $22.38 $22.67 $20.75
====== ====== ====== ====== ====== ======
Total return (c)....................... 31.00% 23.82% 15.74% 24.03% 16.33% 18.44%
Net assets, end of period (in
thousands)........................... $2,820 $2,540 $2,299 $1,754 $1,018 $ 103
Ratio of expenses to average daily net
assets (d)(e)........................ 2.12% 2.04% 2.07% 2.18% 2.19% 2.24%(f)
Ratio of net investment income (loss)
to average daily net
assets (d)(e)........................ (1.65)% (1.34)% (1.10)% (1.14)% (1.17)% (1.13)%(f)
Portfolio turnover rate (excluding
short-term securities)............... 61.2% 60.1% 72.6% 71.5% 84.7% 46.8%
</TABLE>
------------
17
<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
18
<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., the
sub-adviser, Templeton Investment Counsel, Inc., selects the Fund's
investments.)
Advantus Capital Management, Inc. manages twelve mutual funds containing $3.7
billion in assets in addition to $10.9 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
19
<PAGE>
THIS REPORT HAS BEEN PREPARED FOR SHAREHOLDERS. THIS MAY BE USED AS SALES
LITERATURE IN
CONNECTION WITH THE OFFER OR SALE OF THE ADVANTUS HORIZON FUND
IF PRECEDED OR ACCOMPANIED BY (A) THE CURRENT PROSPECTUS FOR THE
ADVANTUS HORIZON FUND, AND (B) THE CURRENT
ADVANTUS MUTUAL FUND PERFORMANCE REPORT.
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. PRESORTED STANDARD
400 ROBERT STREET NORTH U.S. POSTAGE PAID
ST. PAUL, MN 55101-2098 ST. PAUL, MN
PERMIT NO. 3547
ADDRESS SERVICE REQUESTED
</TABLE>
F.48636 Rev. 5-2000
