<PAGE>
MONEY MARKET
ADVANTUS MONEY MARKET FUND, INC.
ANNUAL REPORT TO SHAREHOLDERS DATED SEPTEMBER 30, 1999
[LOGO]
[ART]
<PAGE>
ADVANTUS MONEY MARKET FUND
TABLE OF CONTENTS
<TABLE>
<S> <C>
PERFORMANCE UPDATE 2
INVESTMENTS IN SECURITIES 5
STATEMENT OF ASSETS AND
LIABILITIES 7
STATEMENT OF OPERATIONS 8
STATEMENTS OF CHANGES IN NET
ASSETS 9
NOTES TO FINANCIAL STATEMENTS 10
INDEPENDENT AUDITORS' REPORT 13
FEDERAL INCOME TAX INFORMATION 14
SHAREHOLDER SERVICES 15
</TABLE>
<PAGE>
LETTER FROM THE PRESIDENT [PHOTO]
Dear Shareholder:
Growth has been the economic story throughout this fiscal year. The domestic
growth story continues, albeit growth is slower than in the past. The Federal
Reserve's proactive stance (i.e., raising rates BEFORE reported inflation)
demonstrates the Fed's continuing resolve to control inflation by reigning in
domestic growth. So far, the Fed has achieved this delicate economic balance.
World growth is slowly accelerating. The global economic picture is vastly
different than it was one year ago. Japan has worked its way back from a
devastating recession and financial crisis. Emerging markets are surging and
international markets, overall, are strong. The world's central banks have
played critical roles in getting their respective countries back on track. Like
the Fed, the world's central banks plotted a course of action, and like the Fed,
these banks espoused an expansionary bias. Relative to conditions, each bank
aggressively used its monetary policy to lower interest rates. These actions
have contributed to global economic recovery, country by country.
As the rest of the world rallies, the conditions in the U.S. will likely put
more pressures on our economic systems. The fixed income market may feel some
pressure too due to higher commodity prices, global economic growth, a weaker
dollar, tight labor market, and a Fed poised to tighten. Conditions may also
bode poorly for the stock market. After several years of good equity markets -
driven by both robust growth and higher valuation levels - investors are acutely
aware that the environment is changing. The markets will continue under pressure
if interest rates move higher and valuations peak, challenging the long-running
bull market. On a brighter note, the loss of price momentum in the U.S. equity
market will allow earnings growth to catch up with multiples, thus building the
base for the next leg up in the secular bull market for equities.
If at any time you have questions about your Advantus mutual fund investments, I
encourage you to contact your financial professional or call Advantus
Shareholders Services at 1-800-665-6005. This number allows you 24-hour access,
seven days a week, to your mutual fund account information via an automated
voice-response system. Or you can speak directly to an Advantus Shareholder
Services Representative during business hours, 8 A.M. to 4:45 P.M. (Central
Time) any day that the New York Stock Exchange is open for business.
We appreciate your continued patronage of Advantus Funds. Helping you move
closer to your investment goals is important to us, and we look forward to
working long-term with you and your financial professional. Thank you for
investing with Advantus.
Sincerely,
/s/ William N. Westhoff
William N. Westhoff, President
Advantus Funds
<PAGE>
ADVANTUS 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 year ended September 30, 1999, the Advantus Money Market Fund earned a
total return of 4.24 percent.* This compares to the three-month U.S. Treasury
Bill, which earned 4.74 percent for the same period. The seven-day compound
yield was 4.45 percent* and the seven-day simple yield was 4.35 percent* for the
seven days ended September 30, 1999.
PERFORMANCE ANALYSIS
At the beginning of the fiscal year financial markets were in turmoil, with a
number of global crises weighing heavily on investor confidence. A major decline
had just occurred in the U.S. equity market and 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 remarkable
flight-to-quality trade that pushed Treasury yields to their lowest levels in
more than 30 years. Market sentiment changed quickly, however, as the Federal
Reserve aggressively cut key short-term interest rates during the fourth
calendar quarter of 1998 (i.e., the first quarter of the Fund's fiscal year). In
response, stocks rebounded, fears of a global meltdown subsided and investors
reversed their flight to quality trade. The Fed's moves helped to bolster
investor confidence and restore some liquidity and rationality to the financial
markets.
With market conditions improved and with the Fed finished cutting rates, U.S.
interest rates moved steadily higher through the remainder of the year as
multiple signs of robust economic growth in the U.S. fueled inflation concerns.
Thus, investors experienced a stark reversal in the market's tone over the
course of the fiscal year. While the fiscal year started with the Fed lowering
interest rates, the year ended with significantly higher interest rates and with
the Fed having increased the Fed Funds rate twice (June 30 and August 24, 1999).
The higher interest rates resulted in negative returns for most major bond
indexes (e.g., the Lehman Brothers Aggregate Bond Index**) over the past year, a
rare occurrence in the fixed income universe. Returns on shorter U.S. Treasury
securities, however, were significantly better. For example, the total return on
the 3-month and 6-month U.S. Treasury Bills over the fiscal year was 4.74
percent. Put another way, money market funds provided investors with
significantly higher returns over this past fiscal year when compared to the
returns of most other major bond indexes.
Despite the volatility that we continue to experience from quarter to quarter
and across different markets and sectors, high-quality U.S. corporate commercial
paper continues to offer excellent safety and liquidity as well as attractive
yields. The Advantus Money Market Fund has approximately 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).
2
<PAGE>
The Fund's holdings continue to be well diversified over a variety of stable
industries and do not include any holdings in the more volatile brokerage
sector. Our goal throughout this reporting period has been to maintain the
average days to maturity of the Fund in the range of 55 to 65 days. To that end,
the average days to maturity as of September 30 stood at 62 days, slightly
longer than the money market fund industry average.
OUTLOOK
We believe interest rates may creep slightly higher over the next few months.
This view is based on the strength of the domestic economy and our feeling that
the Fed stands poised to raise interest rates further should economic data
warrant such a move. We continue to believe that rates will not move
significantly higher from current levels, however, given our view that inflation
will remain under control.
We will continue to purchase the highest quality commercial paper and maintain
the average days to maturity in the Fund in a range of 55 to 65 days. Over the
next three to six months, high quality commercial paper yields will likely stay
above five percent and offer investors a very safe haven as well as attractive
returns compared to other longer-term fixed income opportunities.
*Historical performance is not an indication of future performance. Investment
returns will fluctuate.
**The Lehman Brothers Aggregate Bond Index is comprised of the Lehman Brothers
Government/Corporate Bond Index, the Lehman Brothers Mortgage-Backed Securities
Index and the Lehman Brothers Asset-Backed Securities Index.
3
<PAGE>
AVERAGE DAYS TO MATURITY
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
MONTH DATE NUMBER OF DAYS
<S> <C> <C>
Oct. 10/06/98 55
Oct. 10/13/98 51
Oct. 10/20/98 58
Oct. 10/27/98 66
Nov. 11/03/98 72
Nov. 11/10/98 74
Nov. 11/17/98 69
Nov. 11/24/98 69
Dec. 12/01/98 72
Dec. 12/08/98 75
Dec. 12/15/98 69
Dec. 12/22/98 62
Dec. 12/29/98 57
Jan. 01/05/99 51
Jan. 01/12/99 54
Jan. 01/19/99 51
Jan. 01/26/99 44
Feb. 02/02/99 69
Feb. 02/09/99 75
Feb. 02/16/99 74
Feb. 02/23/99 69
Mar. 03/02/99 63
Mar. 03/09/99 62
Mar. 03/16/99 59
Mar. 03/23/99 61
Mar. 03/30/99 66
Apr. 04/06/99 63
Apr. 04/13/99 64
Apr. 04/20/99 61
Apr. 04/27/99 62
May 05/04/99 63
May 05/11/99 75
May 05/18/99 74
May 05/25/99 68
Jun. 06/01/99 64
Jun. 06/08/99 65
Jun. 06/15/99 64
Jun. 06/22/99 70
Jun. 06/29/99 64
Jul. 07/06/99 58
Jul. 07/13/99 70
Jul. 07/20/99 64
Jul. 07/27/99 60
Aug. 08/03/99 61
Aug. 08/10/99 63
Aug. 08/17/99 67
Aug. 08/24/99 66
Aug. 08/31/99 67
Sept. 09/07/99 64
Sept. 09/14/99 65
Sept. 09/21/99 67
Sept. 09/28/99 59
</TABLE>
SEVEN-DAY COMPOUND YIELD*
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
MONTH DATE PERCENTAGE
<S> <C> <C>
Oct. 10/06/98 4.77%
Oct. 10/13/98 4.83%
Oct. 10/20/98 4.73%
Oct. 10/27/98 4.71%
Nov. 11/03/98 5.38%
Nov. 11/10/98 4.43%
Nov. 11/17/98 3.64%
Nov. 11/24/98 4.40%
Dec. 12/01/98 4.51%
Dec. 12/08/98 4.25%
Dec. 12/15/98 3.93%
Dec. 12/22/98 4.77%
Dec. 12/29/98 4.25%
Jan. 01/05/99 4.40%
Jan. 01/12/99 4.50%
Jan. 01/19/99 4.21%
Jan. 01/26/99 4.40%
Feb. 02/02/99 4.13%
Feb. 02/09/99 4.10%
Feb. 02/16/99 4.01%
Feb. 02/23/99 3.51%
Mar. 03/02/99 3.24%
Mar. 03/09/99 4.01%
Mar. 03/16/99 3.96%
Mar. 03/23/99 4.05%
Mar. 03/30/99 4.01%
Apr. 04/06/99 4.00%
Apr. 04/13/99 4.08%
Apr. 04/20/99 4.06%
Apr. 04/27/99 4.04%
May 05/04/99 4.01%
May 05/11/99 4.05%
May 05/18/99 4.07%
May 05/25/99 3.89%
Jun. 06/01/99 4.22%
Jun. 06/08/99 4.05%
Jun. 06/15/99 4.04%
Jun. 06/22/99 4.14%
Jun. 06/29/99 4.19%
Jul. 07/06/99 4.04%
Jul. 07/13/99 4.12%
Jul. 07/20/99 4.20%
Jul. 07/27/99 4.29%
Aug. 08/03/99 4.18%
Aug. 08/10/99 4.23%
Aug. 08/17/99 4.26%
Aug. 08/24/99 4.41%
Aug. 08/31/99 4.38%
Sept. 09/07/99 4.44%
Sept. 09/14/99 4.37%
Sept. 09/21/99 4.51%
Sept. 09/28/99 4.46%
</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
SEPTEMBER 30, 1999
(Percentages of each investment category relate to total net assets.)
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE(A)
- --------- ------------
<C> <S> <C> <C> <C>
COMMERCIAL PAPER (92.8%)
BASIC MATERIALS (22.6%)
Agriculture Products (7.3%)
$1,425,000 Archer-Daniels Midland Company............................ 5.845% 03/01/00 $ 1,391,140
1,660,000 Cargill, Inc.............................................. 5.093% 02/02/00 1,631,769
-----------
3,022,909
-----------
Chemicals (10.4%)
1,015,000 E.I. DuPont de Nemours & Company.......................... 5.256% 10/18/99 1,012,521
1,205,000 E.I. DuPont de Nemours & Company.......................... 5.006% 12/10/99 1,193,541
2,130,000 Monsanto Company (c)..................................... 5.814% 01/25/00 2,091,462
-----------
4,297,524
-----------
Paper and Forest (4.9%)
2,015,000 Kimberly Clark Corporation (c)........................... 5.345% 10/13/99 2,011,465
-----------
CAPITAL GOODS (5.8%)
Electrical Equipment (5.8%)
2,440,000 Emerson Electric Company.................................. 5.502% 01/24/00 2,398,423
-----------
COMMUNICATION SERVICES (11.8%)
Telephone (11.8%)
2,040,000 AT&T Corporation.......................................... 5.802% 02/01/00 2,000,877
835,000 Bellsouth Telecommunications.............................. 5.818% 01/19/00 820,612
1,020,000 Bellsouth Telecommunications.............................. 5.838% 01/27/00 1,001,104
1,025,000 SBC Communications (c)................................... 5.238% 10/12/99 1,023,384
-----------
4,845,977
-----------
CONSUMER CYCLICAL (2.4%)
Publishing (2.4%)
1,000,000 The McGraw-Hill Companies, Inc............................ 5.261% 10/14/99 998,130
-----------
CONSUMER STAPLES (12.4%)
Beverage (2.5%)
1,010,000 The Coca-Cola Company..................................... 5.383% 11/10/99 1,004,077
-----------
Entertainment (5.0%)
1,515,000 Walt Disney Company....................................... 4.804% 10/25/99 1,510,230
560,000 Walt Disney Company....................................... 5.791% 02/03/00 549,111
-----------
2,059,341
-----------
Food (4.9%)
2,065,000 General Mills, Inc........................................ 5.419% 01/18/00 2,032,113
-----------
</TABLE>
See accompanying notes to investments in securities.
5
<PAGE>
ADVANTUS MONEY MARKET FUND
INVESTMENTS IN SECURITIES - CONTINUED
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE(A)
- -----------------------------------------------------------------------------------------------------------------------
FINANCIAL (29.0%)
<C> <S> <C> <C> <C>
Auto Finance (6.5%)
$1,010,000 Ford Motor Credit......................................... 5.369% 10/07/99 $ 1,009,109
1,680,000 General Motors Acceptance Corporation..................... 5.287% 10/20/99 1,675,390
-----------
2,684,499
-----------
Commercial Finance (9.7%)
1,505,000 Bell Atlantic Corporation................................. 5.401% 11/03/99 1,497,687
1,100,000 G.E. Capital Corporation.................................. 5.021% 10/18/99 1,097,433
1,410,000 G.E. Capital Corporation.................................. 4.975% 10/19/99 1,406,549
-----------
4,001,669
-----------
Consumer Finance (7.5%)
1,575,000 Associates Corporation of North America................... 4.847% 10/25/99 1,569,996
1,510,000 Ciesco LP (c)............................................ 5.413% 10/28/99 1,503,977
-----------
3,073,973
-----------
Finance-Diversified (5.3%)
2,200,000 American General Finance Corporation...................... 5.435% 11/12/99 2,186,327
-----------
HEALTH CARE (8.8%)
Drugs (5.1%)
830,000 American Home Products Corporation (c)................... 5.269% 10/13/99 828,565
1,300,000 American Home Products Corporation (c)................... 5.909% 01/13/00 1,278,474
-----------
2,107,039
-----------
Health Care-Diversified (3.7%)
1,530,000 Johnson & Johnson (c).................................... 4.945% 10/04/99 1,529,378
-----------
Total commercial paper (cost: $38,252,844)...................................... 38,252,844
-----------
U.S. GOVERNMENT OBLIGATIONS (3.7%)
U.S. Agency Obligations (3.7%)
1,500,000 Federal Home Loan Bank.................................... 5.000% 10/28/99 1,500,000
Total U.S. government obligations (cost: $1,500,000)............................ 1,500,000
-----------
OTHER SHORT-TERM SECURITIES (3.6%)
733,721 Federated Prime Obligation Fund, current rate 5.220%............................ 733,721
750,000 Wachovia Corporation...................................... 5.440% 12/15/99 752,331
-----------
Total other short-term securities (cost: $1,486,052)............................ 1,486,052
-----------
Total investments in securities (cost: $41,238,896) (b)......................... $41,238,896
===========
</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
September 30, 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.
6
<PAGE>
ADVANTUS MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1999
<TABLE>
<S> <C>
ASSETS
Investments in securities, at market value - see
accompanying schedule for detailed listing
(identified cost: $41,238,896)............................. $41,238,896
Cash in bank on demand deposit.............................. 397,904
Receivable for Fund shares sold............................. 68,042
Accrued interest receivable................................. 88,581
Other receivables........................................... 937
-----------
Total assets............................................ 41,794,360
-----------
LIABILITIES
Payable for Fund shares redeemed............................ 544,108
Dividends payable to shareholders........................... 1,040
Payable to Adviser.......................................... 29,743
Other payables.............................................. 16,713
-----------
Total liabilities....................................... 591,604
-----------
Net assets applicable to outstanding capital stock.......... $41,202,756
===========
Represented by:
Capital stock - authorized 10 billion shares of $.01 par
value; outstanding 41,202,756 shares...................... $ 412,028
Additional paid-in capital................................ 40,790,728
-----------
Total - representing net assets applicable to
outstanding capital stock............................... $41,202,756
===========
Net asset value per share................................... $ 1.00
===========
</TABLE>
See accompanying notes to financial statements.
7
<PAGE>
ADVANTUS MONEY MARKET FUND
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 1999
<TABLE>
<S> <C>
Investment income:
Interest.................................................. $2,621,054
----------
Expenses (note 3):
Investment advisory fee................................... 261,232
Rule 12b-1 fees........................................... 139,419
Administrative services fee............................... 51,400
Transfer agent and shareholder servicing fees............. 226,815
Custodian fees............................................ 13,710
Auditing and accounting services.......................... 13,580
Legal fees................................................ 11,138
Directors' fees........................................... 865
Registration fees......................................... 44,543
Printing and shareholder reports.......................... 36,529
Insurance................................................. 3,687
Other..................................................... 12,611
----------
Total expenses........................................ 815,529
----------
Less fees and expenses waived or absorbed:
Rule 12b-1 fees......................................... (139,419)
Other fund expenses..................................... (232,015)
----------
Total fees and expenses waived or absorbed............ (371,434)
----------
Total net expenses.................................... 444,095
----------
Investment income - net............................... 2,176,959
----------
Net increase in net assets resulting from operations...... $2,176,959
==========
</TABLE>
See accompanying notes to financial statements.
8
<PAGE>
ADVANTUS MONEY MARKET FUND
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED SEPTEMBER 30, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
-------------- -------------
<S> <C> <C>
Operations:
Investment income - net................................... $ 2,176,959 $ 2,695,886
-------------- ------------
Increase in net assets resulting from operations...... 2,176,959 2,695,886
-------------- ------------
Distributions to shareholders from net investment income.... (2,176,959) (2,695,886)
-------------- ------------
Capital share transactions at a constant net asset value of
$1.00:
Proceeds from sales....................................... 92,025,759 90,768,754
Proceeds from issuance of shares as a result of reinvested
dividends............................................... 2,143,222 2,664,950
Payments for redemption of shares......................... (113,867,509) (87,023,337)
-------------- ------------
Increase (decrease) in net assets from capital share
transactions.......................................... (19,698,528) 6,410,367
-------------- ------------
Total increase (decrease) in net assets................. (19,698,528) 6,410,367
Net assets at beginning of year............................. 60,901,284 54,490,917
-------------- ------------
Net assets at end of year................................... $ 41,202,756 $ 60,901,284
============== ============
</TABLE>
See accompanying notes to financial statements.
9
<PAGE>
ADVANTUS MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
(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 year ended September 30, 1999, purchases of securities and proceeds
from sales aggregated $262,066,590 and $281,483,789, 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). Under the
10
<PAGE>
ADVANTUS MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS - CONTINUED
(3) EXPENSES AND RELATED PARTY TRANSACTIONS - (CONTINUED)
agreement, Advantus Capital manages the Fund's assets and provides research,
statistical and advisory services and pays related office rental and executive
expenses and salaries. The 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 $5,100 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. For the period from
February 1, 1999 to July 31, 1999, the administrative services fee was $4,800
per month.
Advantus Capital directly incurs and pays the above operating expenses and
the Fund in turn reimburses Advantus Capital. During the year ended
September 30, 1999, Advantus Capital voluntarily agreed to absorb $232,015 in
expenses which were otherwise payable by the Fund.
As of September 30, 1999, Minnesota Life and subsidiaries and the directors
and officers of the Fund as a whole owned 4,745,294 shares or 11.5 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 $10,454.
(4) YEAR 2000 (UNAUDITED)
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 $12 million through 1999 to modify its computer
information systems, enabling proper processing of transactions relating to the
year 2000 and beyond. The Fund will not be charged for these expenses.
11
<PAGE>
ADVANTUS MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS - CONTINUED
(5) FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
--------------------------------------------------------
1999 1998 1997 1996 1995(A)
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year..................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- -------
Income from investment operations:
Net investment income................................ .04 .05 .05 .05 .05
------- ------- ------- ------- -------
Total from investment operations................... .04 .05 .05 .05 .05
------- ------- ------- ------- -------
Less distributions:
Dividends from net investment income................. (.04) (.05) (.05) (.05) (.05)
------- ------- ------- ------- -------
Total distributions................................ (.04) (.05) (.05) (.05) (.05)
------- ------- ------- ------- -------
Net asset value, end of year........................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= =======
Total return (b)....................................... 4.24% 4.78% 4.69% 4.74% 5.02%
Net assets, end of year (in thousands)................. $41,203 $60,901 $54,491 $43,953 $36,107
Ratio of expenses to average daily net assets (c)...... .85% .85% .85% .85% .85%
Ratio of net investment income to average daily net
assets (c)........................................... 4.17% 4.68% 4.61% 4.64% 4.93%
</TABLE>
- ----------
<TABLE>
<C> <S>
(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) Total return figures are based on a share outstanding
throughout the period and assume reinvestment of
distributions at net asset value.
(c) The Fund's Adviser and Distributor voluntarily waived or
absorbed $371,434, $323,639, $288,928, $261,733 and $240,231
in expenses for the years ended September 30, 1999, 1998,
1997, 1996 and 1995. If the Fund had been charged for these
expenses, the ratio of expenses to average daily net assets
would have been 1.56%, 1.41%, 1.43%, 1.51% and 1.66%,
respectively, and the ratio of net investment income to
average daily net assets would have been 3.46%, 4.12%,
4.03%, 3.98% and 4.12%, respectively.
</TABLE>
12
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders
Advantus Money Market Fund, Inc.:
We have audited the accompanying statement of assets and liabilities,
including the schedule of investments in securities, of the Advantus Money
Market Fund, Inc. (the Fund) as of September 30, 1999 and the related statement
of operations for the year then ended, the statements of changes in net assets
for each of the years in the two year period then ended and the financial
highlights for each of the years in the five year period then ended. These
financial statements and the financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and the financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
September 30, 1999, by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and the financial highlights
referred to above present fairly, in all material respects, the financial
position of the Fund as of September 30, 1999 and the results of its operations,
changes in its net assets and the financial highlights, for the periods stated
in the first paragraph above, in conformity with generally accepted accounting
principles.
KPMG LLP
Minneapolis, Minnesota
November 5, 1999
13
<PAGE>
ADVANTUS MONEY MARKET FUND
FEDERAL INCOME TAX INFORMATION (UNAUDITED)
The following information for federal income tax purposes is presented as an
aid to shareholders in reporting the distributions paid by the Fund in the
fiscal year ended September 30, 1999. Dividends for the 1999 calendar year will
be reported to you on Form 1099-Div in late January 2000. Shareholders should
consult a tax adviser on how to report these distributions for state and local
purposes.
<TABLE>
<CAPTION>
PER
PAYABLE DATE SHARE
- ------------ --------
<S> <C>
Income distributions - taxable as dividend income, none qualifying for
deduction by corporations.
October 31, 1998............................................ $.0039
November 30, 1998........................................... .0036
December 31, 1998........................................... .0036
January 31, 1999............................................ .0038
February 28, 1999........................................... .0028
March 31, 1999.............................................. .0033
April 30, 1999.............................................. .0033
May 31, 1999................................................ .0034
June 30, 1999............................................... .0033
July 31, 1999............................................... .0035
August 31, 1999............................................. .0036
September 30, 1999.......................................... .0036
------
$.0417
======
</TABLE>
14
<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
15
<PAGE>
from your bank. Depending on the performance of the underlying investment
options, the value may be worth more or less than the original amount invested
upon redemption. Some limitations apply, please refer to the prospectus for
details.
ACCOUNT UPDATES: You'll receive written confirmation of every investment you
initiate and quarterly statements to help you track all of your Advantus Fund
investments and annual tax statements. Semi-annual and annual reports will
provide you with portfolio information, fund performance data and the current
investment outlook.
TOLL-FREE SERVICE LINE: For your convenience in obtaining information and
assistance directly from Advantus Shareholder Services, call 1-800-665-6005.
Advantus Account Representatives are available Monday through Friday from 8 a.m.
to 4:45 p.m. Central Time. Our voice response system is available 24 hours,
seven days a week. This system allows you to access current net asset values,
account balances and recent account activity.
HOW TO INVEST
You can invest in one or more of the eleven Advantus Funds through a local
Registered Representative of Ascend Financial Services, Inc., distributor of the
Funds. Contact your representative for information and a prospectus for any of
the Advantus Funds you are interested in. To find a Registered Representative
near you, call the toll-free service line (1-800-665-6005).
MINIMUM INVESTMENTS: Your initial investment in any of the Advantus Funds can
be as small as $25 when you use our Automatic Investment Plan. Minimum lump-sum
initial investment is $250. Minimum subsequent investment is $25.
THE FUND'S MANAGER
Advantus Capital Management, Inc., investment adviser to the Fund, selects and
reviews the Fund's investments and provides executive and other personnel for
the Fund's management. (For the Advantus International Balanced Fund, Inc., the
sub-adviser, Templeton Investment Counsel, Inc., selects the Fund's
investments.)
Advantus Capital Management, Inc. manages twelve mutual funds containing $3.2
billion in assets in addition to $10.8 billion in assets for other clients.
Advantus Capital's seasoned portfolio managers average more than 13 years of
investment experience.
ADVANTUS FAMILY OF FUNDS
Advantus Bond Fund
Advantus Horizon Fund
Advantus Spectrum Fund
Advantus Enterprise Fund
Advantus Cornerstone Fund
Advantus Money Market Fund
Advantus Mortgage Securities Fund
Advantus International Balanced Fund
Advantus Venture Fund
Advantus Index 500 Fund
Advantus Real Estate Securities Fund
16
<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>
<TABLE>
<S> <C>
ASCEND FINANCIAL SERVICES, INC.
400 ROBERT STREET NORTH
ST. PAUL, MN 55101-2098
PRESORTED STANDARD
U.S. POSTAGE PAID
ST. PAUL, MN
PERMIT NO. 3547
ADDRESS SERVICE REQUESTED
</TABLE>
F.48643 Rev. 11-1999
