<PAGE>
ADVANTUS -TM-
FAMILY OF FUNDS
SEMI-ANNUAL REPORT TO SHAREHOLDERS
ADVANTUS MONEY MARKET FUND
MARCH 31, 1996
<PAGE>
ADVANTUS MONEY MARKET FUND
TABLE OF CONTENTS
PERFORMANCE UPDATE 2
INVESTMENTS IN SECURITIES 4
STATEMENT OF ASSETS AND LIABILITIES 7
STATEMENT OF OPERATIONS 8
STATEMENT OF CHANGES IN NET ASSETS 9
NOTES TO FINANCIAL STATEMENTS 10
SHAREHOLDER SERVICES 13
<PAGE>
May 15, 1996
[PHOTO]
Dear Shareholders:
The stock market continued making impressive gains in the first quarter of
1996--up 5.4 percent, as measured by the S&P 500, after finishing 1995 at record
levels. The bond market, however, retreated from year-end highs, yielding a
negative 2.6 percent return according to the Lehman Corporate Bond Index.
Concerns about strong economic growth and full employment were the primary
factors in the bond market's slump, while strong corporate earnings and profits
led the stock market's charge. Retail stocks helped pace the market's first
quarter performance while technology companies returned widely fluctuating
results.
In the near-term, we believe that many large company earnings expectations will
be revised downward. This downward pressure should benefit higher quality
securities. Many small cap companies continue to demonstrate strong earnings
growth and their relative valuations maintain significant upside potential.
While growth in the U.S. market may slow, we maintain confidence that the equity
market holds opportunity for investors.
Improving economic growth and increased inflation have bond investors concerned
about the course of future interest rates. Higher commodity prices and strong
employment caused rates to jump in recent months. Rising interest rates offer
investors the chance to buy fixed income investments at attractive levels but
will keep the bond market in check until rates stabilize.
Diversification across industries and geographic regions remains a key element
of our success. However, determining which investments will perform well in both
the near and long-term requires professional experience. Advantus Capital
Management, Inc. offers a family of eight funds designed to help you reach your
financial goals with a thoughtful, well conceived investment strategy.
Sincerely,
[SIG]
Paul Gooding, President
Advantus Capital Management, Inc.
<PAGE>
ADVANTUS MONEY MARKET FUND
PERFORMANCE UPDATE
[PHOTO]
WAYNE SCHMIDT, CFA
PORTFOLIO MANAGER
The Advantus Money
Market Fund is a mutual fund designed for
investors seeking a high level of current
income consistent with preservation of
capital and liquidity. The Fund plans to
achieve its objective by concentrating
investments in short-term money market
instruments including U.S. Treasury
Bills, high grade commercial paper and
bank certificates of deposit.
-Seeks to maintain stable net asset value.
-Free checkwriting and telephone redemption.
-Dividends declared daily and paid monthly.
INVESTMENT IN THE ADVANTUS MONEY MARKET FUND IS NEITHER INSURED NOR GUARANTEED
BY THE U.S. GOVERNMENT, AND THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE
TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
PERFORMANCE
The Fund's seven day compounded yield was 4.47 percent* as of March 31, 1996.
The Fund returned 2.41 percent* for the six month period ended March 31, 1996.
Short term interest rates continued to move lower during the period, aided by
the Federal Reserve moves to cut key short term interest rates on two occasions.
The three month U.S. Treasury Bill decreased 27 basis points to a yield of 5.13
percent on March 31, 1996. The six month U.S. Treasury Bill ended the period 39
basis points lower at 5.17 percent, only four basis points higher than the three
month U.S. Treasury Bill.
PORTFOLIO RECAP
Since our last shareholder report, the Federal Reserve cut the Federal Funds
rate by 25 basis points in December and then again in January. The Fed also
reduced the discount rate by 25 basis points in January. They cited moderate
inflation and economic growth as the key to the rate cuts. The Fed Funds rate
now stands at 5.25 percent and the discount rate at 5.00 percent. With 3 percent
inflation, money market yields near 5 percent are attractive on a historical,
inflation adjusted basis.
The Advantus Money Market Fund invests exclusively in U.S. Treasury Bills, U.S.
agencies and high quality commercial paper to maintain both excellent liquidity
and quality. Corporate commercial paper, because of its yield advantage, is the
primary security in which the fund invests. It accounted for 97 percent of the
portfolio at the end of the period. The fund's average days to maturity was 42
days on March 31, 1996, 15 days shorter than the average money market fund.
OUTLOOK
Short term interest rates should remain in a stable trading range in the months
ahead, as the Federal Reserve keeps its monetary policy in tact. The keys to
future Fed policy will be based on the economic results of the first and second
quarter. The key factors will be inflation, employment, and GDP growth.
Inflation should continue to be moderate at 2.5 to 3.0 percent, while employment
and GDP growth have the capability to surprise the markets to the upside. Given
the relatively stable economic conditions in this election year, the Federal
Reserve is likely to keep monetary policy unchanged in the
2
<PAGE>
ADVANTUS MONEY MARKET FUND
MARCH 31, 1996
foreseeable future. With the inflation rate at or below 3 percent and economic
growth near the Fed's 2.5 percent target growth rate, short rates should hold in
the low to mid 5 percent range.
AVERAGE DAYS TO MATURITY
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
NUMBER OF DAYS
<S> <C>
10/03/95 44
10/10/95 41
10/17/95 44
10/24/95 54
10/31/95 49
11/07/95 48
11/14/95 43
11/21/95 40
11/28/95 36
12/05/95 36
12/12/95 35
12/19/95 40
12/26/95 39
01/02/96 38
01/09/96 36
01/16/96 34
01/23/96 41
01/30/96 39
02/06/96 39
02/13/96 40
02/20/96 38
02/27/96 43
03/05/96 40
03/12/96 39
03/19/96 39
03/26/96 39
</TABLE>
SEVEN-DAY COMPOUNDED YIELD*
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PERCENTAGE
<S> <C>
10/03/95 4.97%
10/10/95 5.02%
10/17/95 5.02%
10/24/95 4.99%
10/31/95 5.01%
11/07/95 5.06%
11/14/95 5.03%
11/21/95 5.22%
11/28/95 5.05%
12/05/95 5.01%
12/12/95 5.04%
12/19/95 5.06%
12/26/95 4.95%
01/02/96 4.97%
01/09/96 5.01%
01/16/96 4.92%
01/23/96 4.89%
01/30/96 4.85%
02/06/96 4.80%
02/13/96 4.71%
02/20/96 4.72%
02/27/96 4.62%
03/05/96 4.53%
03/12/96 4.52%
03/19/96 4.47%
03/26/96 4.48%
</TABLE>
The seven-day compounded yield is computed by determining the net change in the
value of a hypothetical account having a balance of one share at the beginning
of a seven calendar day period, dividing that change by seven, adding one to the
quotient, raising the sum to the 365th power and subtracting one from the
result.
*Historical results are 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.
3
<PAGE>
ADVANTUS MONEY MARKET FUND
INVESTMENTS IN SECURITIES
MARCH 31, 1996
(UNAUDITED)
(Percentages of each investment category relate to total net assets.)
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE (A)
- --------- ------------
<C> <S> <C> <C> <C>
U.S. GOVERNMENT OBLIGATIONS (3.2%)
$1,320,000 U.S. Treasury Bill................................. 5.10% 07/11/96 $ 1,301,618
------------
COMMERCIAL PAPER (95.3%)
CAPITAL GOODS (11.0%)
Aerospace/Defense (3.7%)
1,500,000 Rockwell International (c)......................... 5.43% 04/30/96 1,493,350
------------
Electronics (2.6%)
1,065,000 Xerox Corporation.................................. 5.23% 05/08/96 1,059,255
------------
Information Processing (3.5%)
1,455,000 Hewlett Packard.................................... 5.15% 06/20/96 1,438,631
------------
Pollution Control (1.2%)
235,000 WMX Technology Inc (c)............................. 5.19% 05/29/96 233,055
250,000 WMX Technology Inc................................. 5.40% 06/25/96 246,865
------------
479,920
------------
CONSUMER GOODS AND SERVICES (3.1%)
Management (3.1%)
1,280,000 PHH Corporation.................................... 5.42% 05/22/96 1,270,201
------------
BASIC INDUSTRIES (11.9%)
Chemicals (3.5%)
1,445,000 Air Products & Chemical............................ 5.13% 05/23/96 1,434,363
------------
Fabricated Metal Products (3.8%)
1,540,000 Illinois Tool Works................................ 5.24% 04/02/96 1,539,561
------------
Paper and Forest Products (4.6%)
1,605,000 Kimberly Clark..................................... 5.24% 04/09/96 1,602,941
270,000 Kimberly Clark..................................... 5.25% 04/17/96 269,346
------------
1,872,287
------------
CONSUMER STAPLES (30.7%)
Drugs (9.1%)
1,265,000 American Home Products (c)......................... 5.27% 04/22/96 1,261,027
1,455,000 Eli Lilly & Company (c)............................ 5.24% 04/08/96 1,453,345
1,015,000 Schering Corp...................................... 5.37% 05/24/96 1,007,022
------------
3,721,394
------------
</TABLE>
See accompanying notes to investments in securities.
4
<PAGE>
ADVANTUS MONEY MARKET FUND
INVESTMENTS IN SECURITIES--CONTINUED
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE (A)
- --------- ------------
CONSUMER STAPLES--CONTINUED
<C> <S> <C> <C> <C>
Food (13.5%)
$1,585,000 Anheuser-Busch..................................... 5.35% 05/07/96 $ 1,576,464
1,000,000 Cargill Inc........................................ 5.15% 05/02/96 995,422
270,000 Coca-Cola Company.................................. 5.27% 05/02/96 268,762
1,900,000 CPC International Inc (c).......................... 5.37% 06/06/96 1,881,506
105,000 Pepsico Inc........................................ 5.32% 04/22/96 104,665
550,000 Pepsico Inc........................................ 5.43% 05/09/96 546,830
138,000 Pepsico Inc........................................ 5.46% 05/10/96 137,180
------------
5,510,829
------------
Tobacco (4.3%)
1,280,000 Phillip Morris..................................... 5.17% 05/03/96 1,274,075
230,000 Phillip Morris..................................... 5.40% 05/21/96 228,280
235,000 Phillip Morris..................................... 5.33% 05/23/96 233,201
------------
1,735,556
------------
Media (3.8%)
1,580,000 McGraw-Hill Co..................................... 5.37% 05/17/96 1,569,170
------------
CREDIT SENSITIVE (3.6%)
Hardware and Tools (3.6%)
1,500,000 Stanley Works...................................... 5.38% 06/13/96 1,483,843
------------
FINANCIAL (10.9%)
Consumer Finance (10.9%)
1,920,000 Ford Motor Credit.................................. 5.40% 06/17/96 1,898,118
1,475,000 GMAC............................................... 5.26% 04/30/96 1,468,694
1,070,000 Pitney-Bowes Credit................................ 5.25% 04/01/96 1,069,848
------------
4,436,660
------------
UTILITIES (24.1%)
Electric (12.8%)
1,200,000 Alabama Power...................................... 5.18% 05/16/96 1,192,257
600,000 Alabama Power...................................... 5.23% 05/16/96 596,090
1,345,000 Carolina Power & Light............................. 5.28% 05/10/96 1,337,289
360,000 Carolina Power & Light............................. 5.27% 05/10/96 357,940
1,465,000 Midamerica Energy.................................. 5.50% 04/11/96 1,462,605
300,000 Midamerica Energy.................................. 5.48% 04/11/96 299,510
------------
5,245,691
------------
</TABLE>
See accompanying notes to investments in securities.
5
<PAGE>
ADVANTUS MONEY MARKET FUND
INVESTMENTS IN SECURITIES--CONTINUED
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE (A)
- --------- ------------
UTILITIES--CONTINUED
<C> <S> <C> <C> <C>
Telephones (11.3%)
$1,620,000 Bellsouth Telephone................................ 5.34% 05/21/96 $ 1,608,020
1,490,000 Southwestern Bell Capital (c)...................... 5.24% 04/12/96 1,487,457
1,500,000 US West Capital (c)................................ 5.32% 04/03/96 1,499,350
------------
4,594,827
------------
Total commercial paper (cost: $38,885,538)............................ 38,885,538
------------
Total investments in securities (cost: $40,187,156) (b)............... $ 40,187,156
------------
------------
</TABLE>
Notes to Investments in Securities
(a) Securities are valued by procedures described in note 1 to the financial
statements.
(b) Also represents the cost of securities for federal income tax purposes at
March 31, 1996.
(c) Commercial paper sold within terms of a private placement memorandum,
exempt from registration under Section 4(2) of the Securities Act of 1933,
as amended, and may be sold only to dealers in that program of other
"accredited investors." This security has been determined to be liquid
under guidelines established by the board of directors.
6
<PAGE>
ADVANTUS MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 1996
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Investment in securities, at value--see accompanying schedule for detailed listing
(identified cost: $40,187,156)...................................................... $ 40,187,156
Cash in bank on demand deposit....................................................... 250,411
Receivable for Fund shares sold...................................................... 476,192
------------
Total assets..................................................................... 40,913,759
------------
LIABILITIES
Payable for Fund shares repurchased.................................................. 60,279
Payable to Adviser................................................................... 28,209
Dividends payable to shareholders.................................................... 8,772
------------
Total liabilities................................................................ 97,260
------------
Net assets applicable to outstanding capital stock................................... $ 40,816,499
------------
------------
Represented by:
Capital stock--authorized 1 billion shares of $.01 par value; outstanding,
40,816,499 shares................................................................. $ 408,165
Additional paid-in capital......................................................... 40,408,334
------------
Total--representing net assets applicable to outstanding capital stock........... $ 40,816,499
------------
------------
Net asset value per share............................................................ $ 1.00
------------
------------
</TABLE>
See accompanying notes to financial statements.
7
<PAGE>
ADVANTUS MONEY MARKET FUND
STATEMENT OF OPERATIONS
PERIOD FROM OCTOBER 1, 1995 TO MARCH 31, 1996
(UNAUDITED)
<TABLE>
<S> <C>
Investment income:
Interest........................................................................... $ 1,053,865
------------
Expenses (note 3):
Investment advisory fee............................................................ 93,779
Distribution fees.................................................................. 56,422
Transfer Agent fees and expenses................................................... 53,503
Adminstrative services fee......................................................... 16,000
Custodian fees..................................................................... 8,035
Auditing and accounting services................................................... 6,242
Legal fees......................................................................... 1,281
Directors' fees.................................................................... 308
Registration fees.................................................................. 18,978
Printing and shareholder reports................................................... 17,582
Insurance.......................................................................... 2,870
Other.............................................................................. 8,112
------------
Total expenses................................................................... 283,112
Less fees and expenses waived or absorbed:
Distribution fees................................................................ (56,422)
Other fund expenses.............................................................. (67,265)
------------
Total fees and expenses waived or absorbed....................................... (123,687)
------------
Total net expenses............................................................... 159,425
------------
Investment income--net........................................................... 894,440
------------
Net increase in net assets resulting from operations................................. $ 894,440
------------
------------
</TABLE>
See accompanying notes to financial statements.
8
<PAGE>
ADVANTUS MONEY MARKET FUND
STATEMENT OF CHANGES IN NET ASSETS
PERIOD FROM OCTOBER 1, 1995 TO MARCH 31, 1996
AND YEAR ENDED SEPTEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
Operations:
Investment income--net............................................ $ 894,440 $ 1,461,396
----------- -----------
Increase in net assets resulting from operations................ 894,440 1,461,396
----------- -----------
Distributions to shareholders from net investment income............ (894,440) (1,461,396)
----------- -----------
Capital share transactions, at a constant net asset value of $1.00:
Proceeds from sales............................................... 36,263,759 65,293,589
Shares issued as a result of reinvested dividends................. 880,527 1,438,611
Payments for redemption of shares................................. (32,434,386) (56,344,359)
----------- -----------
Increase in net assets from capital share transactions.......... 4,709,900 10,387,841
----------- -----------
Total increase in net assets.................................... 4,709,900 10,387,841
Net assets at beginning of period................................... 36,106,599 25,718,758
----------- -----------
Net assets at end of period......................................... $40,816,499 $36,106,599
----------- -----------
----------- -----------
</TABLE>
See accompanying notes to financial statements.
9
<PAGE>
ADVANTUS MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1996
(UNAUDITED)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Advantus Money Market Fund, Inc. (the Fund) is registered under the
Investment Company Act of 1940 (as amended) as a diversified, open-end
management investment company. On February 14, 1995, shareholders of the Fund
approved a name change to Advantus Money Market Fund, Inc. (effective March 1,
1995). Prior to March 1, 1995, the Fund was known as MIMLIC Money Market Fund,
Inc.
The significant accounting policies of 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 of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of increase and decrease in net assets from
operations during the period. Actual results could differ from those estimates.
INVESTMENTS IN SECURITIES
All securities are valued at the close of each business day. Pursuant to
Rule 2a-7 of the Investment Company Act of 1940 (as amended), all securities are
valued at amortized cost which approximates market value, in order to maintain a
constant net asset value of $1.00.
Security transactions are accounted for on the date the securities are
purchased or sold. Interest income, including amortization of bond premium and
discount computed on a level yield basis, is accrued daily.
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 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 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 (losses)
were recorded by the Fund.
DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income are declared daily and paid monthly in
cash or reinvested in additional shares. Capital gains, if any, are paid
annually.
10
<PAGE>
NOTES TO FINANCIAL STATEMENTS--CONTINUED
(2) INVESTMENT SECURITY TRANSACTIONS
For the period from October 1, 1995 to March 31, 1996, purchases of
securities and proceeds from sales aggregated $106,156,458 and $101,005,548,
respectively.
(3) EXPENSES AND RELATED PARTY TRANSACTIONS
On February 14, 1995 shareholders of the Fund approved a new investment
advisory agreement with Advantus Capital Management, Inc. (Advantus Capital or
the Adviser). 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. Advantus Capital is a wholly-owned
subsidiary of MIMLIC Asset Management Company (MIMLIC Management) which, prior
to March 1, 1995, serves as investment adviser to the Fund. The fee for
investment management and advisory services is based on the average daily net
assets of the Fund at the annual rate of .50 percent, which is the same as under
the old agreement with MIMLIC Management.
The Fund pays The Minnesota Mutual Life Insurance Company (Minnesota
Mutual), the parent of MIMLIC Management, a flat fee of $977 per month plus
$1.50 per month per account for transfer agent fees and expenses.
The Fund has adopted a Plan of Distribution relating to the payment of
certain distribution expenses pursuant to Rule 12b-1 under the Investment
Company Act of 1940 (as amended). The Plan provides for a fee up to .30 percent
of average daily net assets to be paid to MIMLIC Sales Corporation (MIMLIC
Sales), the underwriter of the Fund and wholly-owned subsidiary of MIMLIC
Management, to be used to pay certain expenses incurred in the distribution,
promotion and servicing of the Fund's shares. MIMLIC Sales is currently waiving
all of the distribution fees from the Fund.
The Fund also bears certain other operating expenses including outside
directors' fees, custodian fees, registration fees, printing and shareholder
reports, legal, auditing and accounting services, organizational costs and other
miscellaneous expenses.
The Fund pays an administrative services fee to Minnesota Mutual for
accounting, auditing, legal and other administrative services which Minnesota
Mutual provides. Prior to February 1, 1996, the administrative service fee was
$2,500 per month. Effective February 1, 1996, the administrative service fee is
$3,000 per month.
Advantus Capital directly incurs and pays the above operating expenses and
the Fund in turn reimburses Advantus Capital. During the period from October 1,
1995 to March 31, 1996 Advantus Capital voluntarily agreed to absorb $67,265 in
expenses which were otherwise payable by the Fund.
As of March 31, 1996, Minnesota Mutual and subsidiaries and the directors
and officers of the Fund as a whole own 3,790,846 shares or 9.3 percent of the
Fund's total shares outstanding.
Legal fees were paid to a law firm of which the Fund's secretary is a
partner in the amount of $1,281.
11
<PAGE>
NOTES TO FINANCIAL STATEMENTS--CONTINUED
(4) FINANCIAL HIGHLIGHTS
Per share data for a share of capital stock and selected information for
each period are as follows:
<TABLE>
<CAPTION>
PERIOD FROM PERIOD FROM
OCTOBER 1, NOVEMBER 1,
1995 TO YEAR ENDED 1993 TO YEAR ENDED OCTOBER 31,
MARCH 31, SEPTEMBER 30, SEPTEMBER 30, -------------------------
1996 1995(G) 1994 (F) 1993 1992 1991
------------- ------------- ------------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period............................ $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
------------- ------------- ------------- ------- ------- -------
Income from investment operations:
Net investment income............ .024 .049 .027 .025 .033 .056
------------- ------------- ------------- ------- ------- -------
Total from investment
operations.................... .024 .049 .027 .025 .033 .056
------------- ------------- ------------- ------- ------- -------
Less distributions:
Dividends from net investment
income.......................... (.024) (.049) (.027) (.025) (.033) (.056)
------------- ------------- ------------- ------- ------- -------
Total distributions............ (.024) (.049) (.027) (.025) (.033) (.056)
------------- ------------- ------------- ------- ------- -------
Net asset value, end of period..... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
------------- ------------- ------------- ------- ------- -------
------------- ------------- ------------- ------- ------- -------
Total return (a)................... 2.4%(b) 5.0% 2.7%(c) 2.5% 3.4% 5.9%
Net assets, end of period (in
thousands)........................ $40,816 $36,107 $25,719 $23,106 $23,136 $33,889
Ratio of expenses to average daily
net assets (d).................... .85%(e) .85% .85%(e) .85% .85% .85%
Ratio of net investment income to
average daily net assets (d)...... 4.77%(e) 4.93% 2.95%(e) 2.45% 3.35% 5.63%
</TABLE>
- ---------
(a) Total return figures are based on a share outstanding throughout the period
and assumes reinvestment of distributions at asset value.
(b) Total return is presented for the period from October 1, 1995 to March 31,
1996.
(c) Total return is presented for the period from November 1, 1993 to September
30, 1994.
(d) The Fund's Adviser and Distributor voluntarily waived or absorbed $123,687,
$240,231, $222,862, $210,392, $224,636 and $216,386 in expenses for the
period from October 1, 1995 to March 31, 1996, the year ended September 30,
1995, the period from November 1, 1993 to September 30, 1994 and the years
ended October 31, 1993, 1992 and 1991, respectively. If the Fund had been
charged for these expenses, the ratio of expenses to average daily net
assets would have been 1.51%, 1.66%, 1.86%, 1.74%, 1.59% and 1.36%,
respectively, and the ratio of net investment income to average daily net
assets would have been 4.11%, 4.12%, 1.94%, 1.56%, 2.61% and 5.12%,
respectively.
(e) Adjusted to an annual basis.
(f) During 1994, the Fund changed its fiscal year end from October 31 to
September 30.
(g) 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.
12
<PAGE>
SHAREHOLDER SERVICES
The Advantus Family of Funds offers a variety of services that enhance your
ability to manage your assets. Check each Fund's prospectus for the details of
the services and any limitations that apply to a particular Fund.
EXCHANGE PRIVILEGES: You can move all or part of your investment dollars from
one fund to any other Advantus Fund you own (for identical registrations within
the same class) at any time as your needs change. Exchanges are at the then
current net asset value. (Exchanges from the Money Market Fund will incur the
applicable sales charge, if not previously subjected to the charge.)
Shareholders may make four exchanges or telephone transfers between the Funds
each calendar year without incurring a transaction charge. Thereafter, there
will be a $7.50 transaction charge for each additional exchange or transfer
within the calendar year. Systematic Exchange Plans are exempt from this charge.
INCOME DISTRIBUTION FLEXIBILITY: You can have your fund dividends and other
distributions automatically reinvested with no sales charge, direct them from
one Advantus Fund to any other you own within the Fund family or, if you desire,
we'll pay you in cash.
SYSTEMATIC WITHDRAWAL PLAN: You can set up a plan to receive checks at
specified intervals from your fund account--subject to minimum guidelines.
Depending upon the performance of the underlying investment options, the value
may be worth more or less than the original amount invested when withdrawn.
DIRECT DEPOSITS: At your request we will deposit your dividends or systematic
withdrawals directly into your checking or savings account instead of sending
you a check.
TELEPHONE TRANSFER: You may transfer money from one Advantus account to any
other Advantus account you own just by calling our toll free number. Sign up for
telephone exchanges on the Advantus Application or complete the telephone
authorization form.
SYSTEMATIC TRANSFER: If you have an Advantus Money Market account you may
transfer a set amount of money to another Advantus Fund to diversify your
investment portfolio and take advantage of dollar-cost averaging.
AUTOMATIC PAYMENT OF INSURANCE PREMIUMS: You may automatically pay your
Minnesota Mutual insurance premiums out of your Advantus Money Market account.
REDUCED SALES CHARGES: Letter of Intent, combined purchases with spouse,
children or single trust estates, and the Right of Accumulation make it possible
for you to reduce the sales charge on Advantus's non-money market funds.
SPECIAL PURCHASE PLANS: Our special purchase plans enable you to open an
Advantus fund account for as little as $25 and lower your average share cost
through "dollar-cost averaging." (Dollar-cost averaging does not assure a
profit, nor does it prevent loss in declining markets.) One of these plans--The
Automatic Investment Plan--allows you to invest automatically each month from
your checking or saving account.
IRAS, OTHER QUALIFIED PLAN: You can use the Advantus Family of Funds for your
Individual Retirement Account or other qualified plan including SEPs, profit
sharing, money purchase or defined benefit plans.
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GROUP INVESTMENT PLAN: This plan provides employers and employees with a
convenient means for investing in the funds through payroll deduction.
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. Amounts
over $1,000 may be wire transferred to your personal bank account. The
prevailing wire charge will be added to the withdrawal amount. To set this up,
please send a voided check 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.
ACCOUNT UPDATES: You'll receive written confirmation of every investment you
initiate (monthly statements for your Money Market account) and quarterly
reports to help you track all of your investments in the Advantus Family of
Funds, and annual tax statements. Semiannual and annual reports will provide you
with portfolio information, fund performance data and the current investment
outlook.
TOLL-FREE SERVICE LINE: For your convenience in obtaining information and
assistance directly from MIMLIC Sales Corporation, call 1-800-443-3677. Our
voice response system is available from 7 a.m. to 3 a.m. Monday through Friday,
and 8 a.m. to 5 p.m. on Saturday. This system allows you to access current net
asset values and your account balances.
HOW TO INVEST
You can invest in one or more of the eight Advantus Funds through your local
registered representative of MIMLIC Sales Corporation, distributor of the Funds.
Contact your representative for information and a prospectus for any of the
Advantus Funds you are interested in.
MINIMUM INVESTMENTS: Your initial investment in any of the Advantus Funds can
be as small as $25 when you use our Systematic Investment Plan. Minimum lump-sum
initial investment is $250. Minimum subsequent investment is $25.
THE FUND'S MANAGER
Advantus Capital Management, Inc., investment adviser to the Fund, selects
and reviews the Fund's investments and provides executive and other personnel
for the Fund's management.
Advantus Capital Management, Inc. manages eight mutual funds containing $301
million in assets in addition to $1.2 billion in assets for other clients.
Advantus Capital's seasoned portfolio managers average more than 11 years of
investment experience.
ADVANTUS FAMILY OF FUNDS
Advantus Bond Fund
Advantus Horizon Fund
Advantus Spectrum Fund
Advantus Enterprise Fund
Advantus Cornerstone Fund
Advantus Money Market Fund
Advantus Mortgage Securities Fund
Advantus International Balanced Fund
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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]
MIMLIC SALES CORPORATION
400 ROBERT STREET NORTH
ST. PAUL, MN 55101-2098
1-800-443-3677
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MIMLIC SALES CORPORATION BULK RATE
400 ROBERT STREET NORTH U.S. POSTAGE PAID
ST. PAUL, MN 55101-2098 ST. PAUL, MN
PERMIT NO. 3547
FORWARDING AND RETURN POSTAGE GUARANTEED,
ADDRESS CORRECTION REQUESTED
F.48642 5/96
