<PAGE>
MONEY MARKET
ADVANTUS MONEY MARKET FUND, INC
SEMI-ANNUAL REPORT TO SHAREHOLDERS DATED MARCH 31, 1999
[LOGO]
ADVANTUS-TM-
FAMILY OF FUNDS
MONEY [ART1]
MARKET
<PAGE>
ADVANTUS MONEY MARKET FUND
TABLE OF CONTENTS
PERFORMANCE UPDATE 2
INVESTMENTS IN SECURITIES 5
STATEMENT OF ASSETS AND LIABILITIES 8
STATEMENT OF OPERATIONS 9
STATEMENTS OF CHANGES IN NET ASSETS 10
NOTES TO FINANCIAL STATEMENTS 11
SHAREHOLDER SERVICES 14
<PAGE>
LETTER FROM THE PRESIDENT [PHOTO]
Dear Shareholders:
U.S. economic expansion, in its longevity and in vigor, is the envy of the rest
of the world. While growth in Europe and the United Kingdom is falling, we are
finally seeing some small improvements in Asia's economic angst; it also appears
that Japan's economic free fall has stopped. However, a working plan for a
sustainable recovery in Japan is still forthcoming. As you can see, growth
patterns around the globe are mixed, but overall, world growth is forecasted to
decline by about one percent over the course of 1999. (World growth is
forecasted to be two percent in 1999.)
In this six-month reporting period, U.S. Gross Domestic Product (GDP) in the
fourth quarter 1998 was 6.0 percent. This phenomenal result was fueled by strong
consumer demand and spending. GDP figures for the first quarter 1999 are
estimated at a respectable 4 percent. This economic growth was very broad based,
despite some export difficulties. Above-trend growth is expected for the
remainder of the year.
Will inflation spoil the party? It's unlikely. Weak commodity prices coupled
with excess global capital and labor has created an inflation-benign
environment. The inflation outlook in the U.S. continues to be positive, as
well.
The strong momentum in top-tier large cap growth stocks continues to drive the
equity market. Some trends have continued, such as large cap stocks
outperforming small caps and growth stocks outperforming value stocks. The
breadth of leadership of the equity market has continued to narrow, with only
26.3 percent of the issues in the S&P 500* able to outperform their index over
the last twelve months. The average equity mutual fund has lagged the market
unless it has been overweighted in growth and technology investments. Valuations
in the marketplace continue to be high, particularly in the large cap growth
weighted indices.
Stronger economic growth increased investors' comfort with corporate bonds and
thus the spread to Treasury bonds narrowed. In the fixed-income market,
mortgage-backed securities were the star performers this period, followed by
corporate bonds, and then Treasuries.
The economic and market outlook for the U.S. remains strong. Looking ahead, we
are cautiously optimistic for stock and bond prices, but valuations for
large-cap growth issues are high. Economic growth is forecasted, albeit slower
than in the past. With much of the world still in recession, commodity prices
low, and rapid increases in technology and productivity, high inflation is
unlikely. The Federal Reserve and other central banks stand ready to intervene
if necessary. We are watchful of Y2K issues. Certain countries that are mired in
prolonged recessions lack the money to solve these technology-related problems.
We are - along with the rest of the world - watching the political strife in the
Balkans. The military action in Kosovo has commanded world attention. Escalation
will prove costly in money and human resources.
In the pages that follow, the Fund's manager will update you on how the economy
and the market affected the Fund during this reporting period. The manager will
discuss the Fund's performance and some strategies used to maximize performance.
As always, we thank you for investing with Advantus. We encourage you to
maintain a long-range view of investing; we believe you will derive the greatest
benefit by doing so.
Sincerely,
/s/ William N. Westhoff
William N. Westhoff, President
Advantus Funds
*The S&P 500 is a broad, unmanaged index of 500 common stocks which are
representative of the U.S. stock market overall.
<PAGE>
ADVANTUS MONEY MARKET FUND
PERFORMANCE UPDATE
[PHOTO]
STEVEN S. NELSON, 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 maintenance of liquidity.
The Fund seeks 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
For the six-month period ended March 31, 1999, the Advantus Money Market Fund
earned a total return of 2.12 percent.* This compares to the three-month U.S.
Treasury Bill, which earned 2.25 percent for the same period. The compound
annual yield of the Fund was 4.01 percent* for the seven days ending March 31,
1999.
PERFORMANCE ANALYSIS
At the start of this six-month reporting period, the financial markets were in
turmoil, with a number of global crises weighing heavily on investor confidence.
A major decline had occurred in the U.S. equity market, while corporate bond
investors were experiencing sharply limited liquidity. Investors sought refuge
in the safety and security of the U.S. Treasury market, resulting in a stunning
flight-to-quality that pushed Treasury yields to their lowest levels in more
than 30 years. Concern over investors' reaction to the global crises led the
Federal Reserve to make two additional interest rate cuts of 25 basis points
each during fourth quarter 1998 - over and above the 25 basis point cut on
September 29, 1998. The Federal Reserve's moves helped to bolster investor
confidence and restore some needed liquidity and rationality to the financial
markets.
Despite two Fed rate cuts during fourth quarter 1998, U.S. interest rates moved
slightly higher. This was mainly due to the fact that with liquidity restored,
many investors reversed their flight-to-quality trades, which had contributed to
the significant decline in bond yields. That is, investors sold Treasury
securities in favor of risk assets, putting upward pressure on interest rates.
Over fourth quarter 1998, the yield on the three month U.S. Treasury Bill
increased 10 basis points to yield 4.46 percent as of December 31, 1998.
Short-term rates were essentially unchanged during the first quarter of 1999.
Longer-term interest rates increased, and the yield curve became steeper. The
three-month U.S. Treasury Bill increased just one basis point to yield 4.47
percent as of March 31, 1999. Short-term rates were very stable as the Federal
Reserve maintained its target of 4.75 percent for the Federal Funds rate. A
benign inflation outlook and more settled financial markets allowed the Fed to
leave rates unchanged during first quarter 1999 after lowering the Federal Funds
rate by 25 basis points twice during the last quarter of 1998.
The increase in long-term interest rates during first quarter 1999 was fueled
largely by investor concerns about strong economic growth, the possibility that
the Federal Reserve may eventually raise interest rates, and higher oil prices.
In addition, early signs of a potential recovery in Japan led many investors to
leave the U.S. bond market in favor of the Japanese market. This selling put
pressure on U.S. Treasury prices. Fortunately, however, the subdued inflation
outlook kept the Federal Reserve on hold during the quarter.
2
<PAGE>
*Historical performance is not an indication of future performance. Investment
returns will fluctuate.
Our emphasis in the Fund continues to be on the highest quality U.S. corporate
commercial paper, which, we believe, provides money market investors with
safety, liquidity and an attractive yield. The Fund has about 90 percent of its
assets invested in high quality, corporate commercial paper (i.e., commercial
paper that is rated A-1 or higher by Standard and Poor's and P-1 by Moody's).
The Fund continues to be well diversified over a variety of stable industries
and does not include any holdings in the highly volatile bank and brokerage
sectors. Our goal has been to maintain or extend the average days to maturity of
the Fund. To this end, the average days to maturity as of March 31, 1999 stood
at 66 days, slightly longer than the money market fund industry average. We will
continue to purchase the highest quality commercial paper and seek to maintain
the average days to maturity of the Fund in a range of 55 to 65 days.
OUTLOOK
Looking ahead to the next few months, we believe economic growth should slow
slightly as global pressures begin to impact the U.S. When this happens,
interest rates will likely move moderately lower from their current levels,
although the Federal Reserve is not likely to change its position on rates
throughout the year. Consequently, interest rates look to be range bound for the
remainder of 1999. For interest rates to move significantly lower, U.S. economic
growth would have to slow to a level where recessionary fears become realistic.
We view this as unlikely, particularly given the 6 percent increase in gross
domestic product during the fourth quarter, 1998. For rates to move
significantly higher, inflation would have to increase; however, with much of
the world still in recession, commodity prices low and technology contributing
to greater productivity, high inflation is equally unlikely. The Federal Reserve
has engineered "price stability" for the economy and will likely maintain its
wait-and-see approach to monetary policy.
3
<PAGE>
AVERAGE DAYS TO MATURITY
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
NUMBER OF DAYS
<S> <C>
10/6/98 55
10/13/98 51
10/20/98 58
10/27/98 66
11/3/98 72
11/10/98 74
11/17/98 69
11/24/98 69
12/1/98 72
12/8/98 75
12/15/98 69
12/22/98 62
12/29/98 57
1/5/99 51
1/12/99 54
1/19/99 51
1/26/99 44
2/2/99 69
2/9/99 75
2/16/99 74
2/23/99 69
3/2/99 63
3/9/99 62
3/16/99 59
3/23/99 61
3/30/99 66
</TABLE>
SEVEN-DAY COMPOUND YIELD*
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PERCENTAGE
<S> <C>
10/6/98 4.77%
10/13/98 4.83%
10/20/98 4.73%
10/27/98 4.71%
11/3/98 5.38%
11/10/98 4.43%
11/17/98 3.64%
11/24/98 4.40%
12/1/98 4.51%
12/8/98 4.25%
12/15/98 3.93%
12/22/98 4.77%
12/29/98 4.25%
1/5/99 3.72%
1/12/99 6.24%
1/19/99 4.21%
1/26/99 4.40%
2/2/99 4.13%
2/9/99 4.10%
2/16/99 4.01%
2/23/99 3.51%
3/2/99 3.24%
3/9/99 4.01%
3/16/99 3.96%
3/23/99 4.05%
3/30/99 4.01%
</TABLE>
The seven-day compound 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 performance is not an indication of future performance. Investment
returns will fluctuate.
4
<PAGE>
Advantus Money Market Fund
Investments in Securities
March 31, 1999
(UNAUDITED)
(Percentages of each investment category relate to total net assets.)
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE(a)
- ------------- -------------
<C> <S> <C> <C> <C>
COMMERCIAL PAPER (91.9%)
BASIC MATERIALS (16.3%)
Agriculture Products (6.1%)
$ 1,310,000 Archer-Daniels Midland Company.................................... 4.920% 04/30/99 $ 1,304,899
1,820,000 Cargill, Inc...................................................... 4.891% 05/11/99 1,810,297
-------------
3,115,196
-------------
Chemicals (10.2%)
1,525,000 E.I. DuPont de Nemours and Company................................ 5.029% 04/14/99 1,522,274
1,205,000 E.I. DuPont de Nemours and Company................................ 5.006% 12/10/99 1,164,315
1,000,000 Monsanto Company (c).............................................. 5.139% 04/06/99 999,296
1,550,000 Monsanto Company (c).............................................. 4.913% 07/28/99 1,525,768
-------------
5,211,653
-------------
CAPITAL GOODS (7.0%)
Electrical Equipment (2.0%)
1,005,000 Emerson Electric Company.......................................... 4.898% 04/13/99 1,003,384
-------------
Manufacturing (5.0%)
2,560,000 Johnson Controls.................................................. 4.797% 05/04/99 2,548,946
-------------
COMMUNICATION SERVICES (3.9%)
Telephone (3.9%)
2,005,000 Bellsouth Telecommunications...................................... 4.911% 04/09/99 2,002,844
-------------
CONSUMER CYCLICAL (4.7%)
Publishing (4.7%)
1,410,000 McGraw-Hill Companies, Inc........................................ 4.927% 05/07/99 1,403,182
1,000,000 McGraw-Hill Companies, Inc........................................ 4.931% 07/07/99 987,065
-------------
2,390,247
-------------
CONSUMER STAPLES (13.7%)
Beverage (4.9%)
1,515,000 Coca-Cola Enterprises............................................. 4.920% 06/28/99 1,497,240
1,000,000 Coca-Cola Enterprises............................................. 4.904% 07/13/99 986,349
-------------
2,483,589
-------------
Entertainment (4.9%)
1,035,000 Walt Disney Company............................................... 4.814% 08/13/99 1,017,026
1,515,000 Walt Disney Company............................................... 4.804% 10/25/99 1,474,708
-------------
2,491,734
-------------
Household Products (3.9%)
2,035,000 Clorox Company.................................................... 4.933% 07/08/99 2,008,397
-------------
</TABLE>
See accompanying notes to investments in securities.
5
<PAGE>
ADVANTUS MONEY MARKET FUND
INVESTMENTS IN SECURITIES - CONTINUED
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE(a)
- ------------- -------------
COMMERCIAL PAPER--CONTINUED
<C> <S> <C> <C> <C>
ENERGY (11.2%)
Oil & Gas (11.2%)
$ 3,085,000 Atlantic Richfield Company (c).................................... 4.733% 04/23/99 $ 3,076,225
2,640,000 Shell Oil......................................................... 4.826% 05/12/99 2,625,765
-------------
5,701,990
-------------
FINANCIAL (20.5%)
Auto Finance (2.3%)
1,185,000 Ford Motor Credit................................................. 4.419% 07/09/99 1,170,966
-------------
Commercial Finance (5.1%)
1,535,000 GE Capital Corporation............................................ 4.879% 04/19/99 1,531,315
1,100,000 GE Capital Corporation............................................ 5.021% 10/18/99 1,070,482
-------------
2,601,797
-------------
Consumer Finance (13.1%)
1,575,000 Associates Corporation of North America........................... 4.847% 10/25/99 1,532,747
1,510,000 Ciesco LP......................................................... 4.903% 04/08/99 1,508,582
1,005,000 Ciesco LP......................................................... 4.964% 05/14/99 999,157
1,220,000 Xerox Credit Corporation.......................................... 4.875% 05/07/99 1,214,162
1,420,000 Xerox Credit Corporation.......................................... 4.967% 06/04/99 1,407,740
-------------
6,662,388
-------------
HEALTH CARE (8.1%)
Drugs (4.4%)
1,200,000 American Home Products Corporation (c)............................ 4.903% 05/17/99 1,192,631
1,045,000 Schering Corporation.............................................. 4.926% 06/15/99 1,034,528
-------------
2,227,159
-------------
Health Care - Diversified (3.7%)
1,910,000 Abbott Laboratories............................................... 4.868% 04/07/99 1,908,473
-------------
TECHNOLOGY (3.0%)
1,510,000 Motorola, Inc..................................................... 4.864% 04/01/99 1,510,000
-------------
UTILITIES (3.5%)
Electric Companies (3.5%)
1,805,000 MidAmerican Energy................................................ 4.959% 04/12/99 1,802,306
-------------
Total commercial paper (cost: $46,841,069)................................................ 46,841,069
-------------
</TABLE>
See accompanying notes to investments in securities.
6
<PAGE>
ADVANTUS MONEY MARKET FUND
INVESTMENTS IN SECURITIES - CONTINUED
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE(A)
- ------------- -------------
<C> <S> <C> <C> <C>
U.S. GOVERNMENT OBLIGATIONS (3.9%)
$ 1,500,000 Federal Home Loan Bank............................................ 5.000% 10/28/99 $ 1,500,000
505,000 U.S. Treasury Bond................................................ 4.324% 04/15/99 504,159
-------------
Total U.S. government obligations (cost: $2,004,159)...................................... 2,004,159
-------------
OTHER SHORT-TERM SECURITIES (3.1%)
1,581,927 Federated Prime Obligation Fund, current rate 4.860%...................................... 1,581,927
-------------
Total other short-term securities (cost: $1,581,927)...................................... 1,581,927
-------------
Total investments in securities (cost: $50,427,155) (b)................................... $ 50,427,155
-------------
-------------
</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, 1999.
(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 or other
"accredited investors." This security has been determined to be liquid under
guidelines established by the Board of Directors.
7
<PAGE>
ADVANTUS Money Market Fund
Statement of Assets and Liabilities
March 31, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Investments in securities, at market value - see
accompanying schedule for detailed listing
(identified cost: $50,427,155)............................. $ 50,427,155
Receivable for Fund shares sold............................. 73,302
Receivable for investment securities sold................... 445,101
Accrued interest receivable................................. 38,065
Other receivables........................................... 228,314
-------------
Total assets............................................ 51,211,937
-------------
<CAPTION>
LIABILITIES
<S> <C>
Payable for Fund shares redeemed............................ 141,409
Cash portion of dividends payable to shareholders........... 1,293
Payable to Adviser.......................................... 47,020
Other payables.............................................. 14,489
-------------
Total liabilities....................................... 204,211
-------------
Net assets applicable to outstanding capital stock.......... $ 51,007,726
-------------
-------------
Represented by:
Capital stock - authorized 10 billion shares of $.01 par
value; outstanding 51,007,726 shares...................... $ 510,077
Additional paid-in capital................................ 50,497,649
-------------
Total - representing net assets applicable to
outstanding capital stock............................... $ 51,007,726
-------------
-------------
Net asset value per share................................... $ 1.00
-------------
-------------
</TABLE>
See accompanying notes to financial statements.
8
<PAGE>
ADVANTUS MONEY MARKET FUND
STATEMENT OF OPERATIONS
FOR THE SIX-MONTH PERIOD ENDED MARCH 31, 1999
(UNAUDITED)
<TABLE>
<S> <C>
Investment income:
Interest.................................................. $ 1,450,933
-------------
Expenses (note 3):
Investment advisory fee................................... 142,638
Rule 12b-1 fees........................................... 76,386
Administrative services fee............................... 22,000
Transfer agent fees....................................... 99,415
Custodian fees............................................ 5,200
Auditing and accounting services.......................... 6,775
Legal fees................................................ 4,750
Directors' fees........................................... 359
Registration fees......................................... 22,000
Printing and shareholder reports.......................... 36,967
Insurance................................................. 1,844
Other..................................................... 13,728
-------------
Total expenses........................................ 432,062
Less fees and expenses waived or absorbed:
Rule 12b-1 fees......................................... (76,386)
Other fund expenses..................................... (113,191)
-------------
Total fees and expenses waived or absorbed............ (189,577)
-------------
Total net expenses.................................... 242,485
-------------
Investment income - net............................... 1,208,448
-------------
Net increase in net assets resulting from operations........ $ 1,208,448
-------------
-------------
</TABLE>
See accompanying notes to financial statements.
9
<PAGE>
ADVANTUS MONEY MARKET FUND
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX-MONTH PERIOD ENDED MARCH 31, 1999 AND YEAR ENDED SEPTEMBER 30, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
1999 1998
------------- -------------
<S> <C> <C>
Operations:
Investment income - net................................... $ 1,208,448 $ 2,695,886
------------- -------------
Increase in net assets resulting from operations........ 1,208,448 2,695,886
------------- -------------
Distributions to shareholders from net investment
income.................................................. (1,208,448) (2,695,886)
------------- -------------
Capital share transactions at a constant net asset value of
$1.00:
Proceeds from sales....................................... 37,117,769 90,768,754
Proceeds from issuance of shares as a result of reinvested
dividends............................................... 1,188,499 2,664,950
Payments for redemption of shares......................... (48,199,826) (87,023,337)
------------- -------------
Increase (decrease) in net assets from capital share
transactions.......................................... (9,893,558) 6,410,367
------------- -------------
Total increase (decrease) in net assets................. (9,893,558) 6,410,367
Net assets at beginning of period........................... 60,901,284 54,490,917
------------- -------------
Net assets at end of period................................. $ 51,007,726 $ 60,901,284
------------- -------------
------------- -------------
</TABLE>
See accompanying notes to financial statements.
10
<PAGE>
ADVANTUS MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1999
(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. The Fund's investment objective is to seek a high
level of current income consistent with preservation of capital and maintenance
of liquidity.
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 in the financial statements. 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.
(2) INVESTMENT SECURITY TRANSACTIONS
For the period ended March 31, 1999, purchases of securities and proceeds
from sales aggregated $133,320,106 and $143,549,045, respectively.
(3) 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), formerly known as The
Minnesota Mutual Life Insurance Company. Under the agreement, Advantus Capital
manages the
11
<PAGE>
ADVANTUS MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS - CONTINUED
(3) EXPENSES AND RELATED PARTY TRANSACTIONS - (CONTINUED)
Fund's assets and provides research, statistical and advisory services and pays
related office rental and executive expenses and salaries. 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. The Fund has engaged First
Data Investor Services Group, Inc. to act as its transfer agent, dividend
disbursing agent and redemption agent and bears the expenses of such services.
Prior to October 26, 1998, the Fund's transfer agent was Minnesota Life.
The Fund has adopted a Plan of Distribution relating to the payment of
certain expenses pursuant to Rule 12b-1 under the Investment Company Act of 1940
(as amended). The Plan provides for a service fee up to .25 percent of average
daily net assets to be paid 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. Prior to February 1, 1999, the Plan provided for
a distribution fee up to .30 percent of average daily net assets. Ascend is
currently waiving all of the Rule 12b-1 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.
Effective October 26, 1998, the Fund entered into a new shareholder and
administrative services agreement with Minnesota Life. Under this agreement, 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 $4,800 per month for accounting, auditing, legal and other administrative
services which Minnesota Life provides. Prior to February 1, 1999, the
administrative services fee was $3,100 per month.
Advantus Capital directly incurs and pays the above operating expenses and
the Fund in turn reimburses Advantus Capital. During the period ended March 31,
1999, Advantus Capital voluntarily agreed to absorb $113,191 in expenses which
were otherwise payable by the Fund.
As of March 31, 1999, Minnesota Life and subsidiaries and the directors and
officers of the Fund as a whole owned 6,644,528 shares or 13.0 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 $4,750.
(4) YEAR 2000
In 1995, Minnesota Life began addressing computer systems requirements and
applications to be Year 2000 ready. Based on a current study, Minnesota Life
plans to spend approximately $14 million through 1999 to modify its computer
information systems, enabling proper processing of transactions relating to the
year 2000 and beyond. The Fund will not be charged for these expenses.
12
<PAGE>
ADVANTUS MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS - CONTINUED
(5) FINANCIAL HIGHLIGHTS
Per share data for a share of capital stock and selected information for
each period are as follows:
<TABLE>
<CAPTION>
PERIOD FROM
OCTOBER 1,
1998 TO YEAR ENDED SEPTEMBER 30,
MARCH 31, -----------------------------------------------
1999 1998 1997 1996 1995(a)
------------ -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period.... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------ -------- -------- -------- --------
Income from investment operations:
Net investment income................. .02 .05 .05 .05 .05
------------ -------- -------- -------- --------
Total from investment operations.... .02 .05 .05 .05 .05
------------ -------- -------- -------- --------
Less distributions:
Dividends from net investment
income.............................. (.02) (.05) (.05) (.05) (.05)
------------ -------- -------- -------- --------
Total distributions................. (.02) (.05) (.05) (.05) (.05)
------------ -------- -------- -------- --------
Net asset value, end of period.......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------ -------- -------- -------- --------
------------ -------- -------- -------- --------
Total return (c)........................ 2.12% 4.78% 4.69% 4.74% 5.02%
Net assets, end of period (in
thousands)............................ $51,008 $ 60,901 $ 54,491 $ 43,953 $ 36,107
Ratio of expenses to average daily net
assets (d)............................ .85%(e) .85% .85% .85% .85%
Ratio of net investment income to
average daily net assets (d).......... 4.24%(e) 4.68% 4.61% 4.64% 4.93%
<CAPTION>
PERIOD FROM
NOVEMBER 1, YEAR
1993 TO ENDED
SEPTEMBER 30, OCTOBER 31,
1994(b) 1993
-------------- ------------
<S> <C> <C>
Net asset value, beginning of period.... $ 1.00 $ 1.00
-------------- ------------
Income from investment operations:
Net investment income................. .03 .03
-------------- ------------
Total from investment operations.... .03 .03
-------------- ------------
Less distributions:
Dividends from net investment
income.............................. (.03) (.03)
-------------- ------------
Total distributions................. (.03) (.03)
-------------- ------------
Net asset value, end of period.......... $ 1.00 $ 1.00
-------------- ------------
-------------- ------------
Total return (c)........................ 2.73% 2.45%
Net assets, end of period (in
thousands)............................ $25,719 $23,106
Ratio of expenses to average daily net
assets (d)............................ .85%(e) .85%
Ratio of net investment income to
average daily net assets (d).......... 2.95%(e) 2.45%
</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) During 1994, the Fund changed its fiscal year end from October 31 to
September 30.
(c) Total return figures are based on a share outstanding throughout the period
and assume reinvestment of distributions at net asset value. For periods
less than one year, total return presented has not been annualized.
(d) The Fund's Adviser and Distributor voluntarily waived or absorbed $189,577,
$323,639, $288,928, $261,733, $240,231, $222,862 and $210,392 in expenses
for the period ended March 31, 1999, the years ended September 30, 1998,
1997, 1996 and 1995, the period ended September 30, 1994, and the year
ended October 31, 1993, respectively. If the Fund had been charged for
these expenses, the ratio of expenses to average daily net assets would
have been 1.51%, 1.41%, 1.43%, 1.51%, 1.66%, 1.86% and 1.74%, respectively,
and the ratio of net investment income to average daily net assets would
have been 3.58%, 4.12%, 4.03%, 3.98%, 4.12%, 1.94% and 1.56%, respectively.
(e) Adjusted to an annual basis.
13
<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 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.
SPECIAL PURCHASE PLANS: 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.) The Automatic Investment Plan allows
you to invest automatically monthly, semi-monthly or quarterly from your
checking or savings account.
IRAs, OTHER QUALIFIED PLAN: You can use the Advantus Family of Funds for your
Traditional or Roth Individual Retirement Account or other qualified plan
including: SEP IRA's, SIMPLE IRA's, Profit Sharing, 401(k) Money Purchase or
Defined Benefit plans.
GROUP INVESTMENT PLAN: This plan provides employers and employees with a
convenient means for investing in the funds through payroll deduction.
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
14
<PAGE>
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 from your bank. Depending
on the performance of the underlying investment options, the value may be worth
more or less than the original amount invested upon redemption. Some limitations
apply, please refer to the prospectus for details.
ACCOUNT UPDATES: You'll receive written confirmation of every investment you
initiate and quarterly statements to help you track all of your Advantus Fund
investments and annual tax statements. Semi-annual and annual reports will
provide you with portfolio information, fund performance data and the current
investment outlook.
TOLL-FREE SERVICE LINE: For your convenience in obtaining information and
assistance directly from Advantus Shareholder Services, call 1-800-665-6005.
Advantus Account Representatives are available Monday through Friday from 8 a.m.
to 4:45 p.m. Central Time. Our voice response system is available 24 hours,
seven days a week. This system allows you to access current net asset values,
account balances and recent account activity.
HOW TO INVEST
You can invest in one or more of the eleven Advantus Funds through a local
Registered Representative of Ascend Financial Services, Inc., distributor of the
Funds. Contact your representative for information and a prospectus for any of
the Advantus Funds you are interested in. To find a Registered Representative
near you, call the toll-free service line (1-800-665-6005).
MINIMUM INVESTMENTS: Your initial investment in any of the Advantus Funds can
be as small as $25 when you use our 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. (For the Advantus International Balanced Fund, Inc., the
sub-adviser, Templeton Investment Counsel, Inc., selects the Fund's
investments.)
Advantus Capital Management, Inc. manages thirteen mutual funds containing $3.2
billion in assets in addition to $10.8 billion in assets for other clients.
Advantus Capital's seasoned portfolio managers average more than 13 years of
investment experience.
ADVANTUS FAMILY OF FUNDS
Advantus Bond Fund
Advantus Horizon Fund
Advantus Spectrum Fund
Advantus Enterprise Fund
Advantus Cornerstone Fund
Advantus Money Market Fund
Advantus Mortgage Securities Fund
Advantus International Balanced Fund
Advantus Venture Fund
Advantus Index 500 Fund
Advantus Real Estate Securities Fund
15
<PAGE>
THIS REPORT HAS BEEN PREPARED FOR SHAREHOLDERS AND MAY BE DISTRIBUTED
TO OTHERS ONLY IF PRECEDED OR ACCOMPANIED BY A CURRENT PROSPECTUS.
READ THE PROSPECTUS CAREFULLY BEFORE YOU INVEST.
[ADVANTUS -TM- FAMILY OF FUNDS]
ASCEND FINANCIAL SERVICES, INC.,
SECURITIES DEALER, MEMBER NASD/SIPC
400 ROBERT STREET NORTH
ST. PAUL, MN 55101-2098
1-888-AFS-1838
(1-888-237-1838)
<PAGE>
ASCEND FINANCIAL SERVICES, INC.
400 ROBERT STREET NORTH [LOGO]
ST. PAUL, MN 55101-2098
ADDRESS SERVICE REQUESTED
F.48642 Rev. 5-1999
