<PAGE>
[LOGO]
ADVANTUS
FAMILY OF FUNDS
ANNUAL REPORT TO SHAREHOLDERS
ADVANTUS SPECTRUM FUND
SEPTEMBER 30, 1995
<PAGE>
ADVANTUS SPECTRUM FUND
TABLE OF CONTENTS
PERFORMANCE UPDATE 2
INVESTMENTS IN SECURITIES 8
STATEMENT OF ASSETS AND
LIABILITIES 13
STATEMENT OF OPERATIONS 14
STATEMENT OF CHANGES IN NET
ASSETS 15
NOTES TO FINANCIAL STATEMENTS 16
INDEPENDENT AUDITORS' REPORT 22
FEDERAL INCOME TAX INFORMATION 23
SHAREHOLDER SERVICES 24
<PAGE>
October 31, 1995
[PHOTO]
Dear Shareholders:
The first nine months of 1995 produced exceptional returns for both stock and
bond investors. Subdued inflation and a growing economy combined to create a
positive secular environment for financial assets.
A 140 basis point reduction in the 30-year Treasury Bond produced a 21 percent
return since the beginning of the year. Corporate bonds returned 16.5 percent
according to the Lehman Corporate Bond Index. If this pace continues, the bond
market will finish off one of its best years ever - a sharp reversal from 1994.
Investors reacted strongly to every actual and perceived economic shift creating
unusual volatility in the bond market. The sharp sell off in July and August was
just such an over reaction. Long term yields will be driven by continuing
concerns about the budget process in Washington, the near term direction of the
economy and the dollar's performance. Nonetheless, we expect Treasury Bills to
remain trading in the 6-7 percent range.
Technology, financial and consumer companies drove the stock market to all-time
record highs in the third quarter as measured by the S&P 500. While this
produced spectacular results, the extended run may create additional
vulnerability in the market. The chief concerns are disappointing earnings
announcements and a general slow down in profitability. According to Ibbotson
Associates, there have only been four times since 1927 that stock prices have
risen more in the first nine months of the year. In each instance, the market
cooled off in the final quarter. Factors which could push the market up in the
short term, however, are a significant interest rate reduction or a surge in
foreign portfolio inflows.
The current economic expansion is displaying the mixed signals of maturation.
However, we do not expect an early end to the recovery. The economy's recent
slow growth pattern should lengthen the life of the expansion by reducing
inflationary pressures and consequently, the need for money tightening measures.
It is unlikely that the economy will regain the robust pace of the early stages
of the expansion.
The market does hold opportunity for investors. Diversification across
industries and geographic regions remains a key element to successful investing.
However, determining which investments will benefit in both the near and long
term requires professional experience. Advantus Capital Management, Inc. offers
a family of eight funds which are designed to help you reach your goals with a
thoughtful, well conceived investment strategy.
Sincerely,
Paul Gooding, President
Advantus Capital Management, Inc.
<PAGE>
ADVANTUS SPECTRUM FUND
PERFORMANCE UPDATE
[PHOTO]
THOMAS A. GUNDERSON, CFA
PORTFOLIO MANAGER
The Advantus Spectrum Fund is a mutual
fund seeking the most favorable total
return (including interest, dividends and
capital appreciation) consistent with
preservation of capital. To achieve this
objective, the Fund will vary the
composition of its portfolio with
prevailing economic conditions. At any
given time, the Fund's portfolio may be
primarily composed of equity securities
(common stock, preferred stock and
securities convertible into equity
securities), mortgage-related securities,
debt securities, money market securities
or any combination of these securities.
The investment adviser's positioning of
the portfolio is determined by the
intermediate term outlook for economic
trends and market momentum.
-Dividends paid quarterly.
-Capital gains distributions paid annually.
PERFORMANCE
Over the past year the Spectrum Fund has returned the following for each of the
three classes of shares currently offered:
<TABLE>
<S> <C>
Class A 18.4 percent*
Class B 17.6 percent*
Class C (since 3/1/95 inception) 12.6 percent*
</TABLE>
One measure of the financial markets is the Merrill Lynch-Wilshire Capital
Markets Index** which includes stocks and bonds, but no cash-like instruments.
The index returned 14.3 percent over the past six months and 22.2 percent over
the past 12 months.
The asset mix for the Spectrum Fund was relatively conservative over the past
year. Stocks averaged about a 45 percent weight, while cash ranged between 5
percent to 15 percent. The total return of the Spectrum Fund lags the
theoretical return of the Capital Markets Index primarily due to its low
returning cash investments, as well as the conservative stock weights. The
performance of the stock and bond components of the Fund exceeded the average
return of their respective peer groups over the past year.
PORTFOLIO RECAP
Over the past year the market focused on the incredibly strong fundamental
factors affecting the financial markets. Continued strong profit growth,
combined with low inflation, a slowing economy, an accommodating Federal
Reserve, and very strong money flows into mutual funds pushed stocks to record
highs. It would be difficult to draw up a more positive set of circumstances for
the market.
The Spectrum Fund has been relatively under-weighted in stocks all year because
our analysis indicated that the 1995-1996 earnings were not mid-cycle earnings.
History indicates that we are at or near the cyclical highs for operating
margins. If the current earnings are "peak" earnings, the stock market is
expensive. However, it remains a possibility that this time it is different.
Improved productivity levels, competitive labor rates and access to low cost
capital could lead the U.S. through an extended economic recovery phase similar
to the 1950's.
Despite its strong performance, the stock market is valued at a seemingly
reasonable 15 times the projected 1996 earnings. Given the low inflation levels,
15 times earnings is not out of line. The larger questions are: Will 1996
earnings expectations be met? Is the 1996 level of earnings a cyclical peak or a
mid-cycle level?
The stock portion of the Fund has performed along with the overall market. The
technology sector contributed to performance all year. More specifically,
2
<PAGE>
ADVANTUS SPECTRUM FUND
SEPTEMBER 30, 1995
significant positive contribution to the Fund came from DSC Communication
(telecommunications equipment), Intel (semiconductors), First Financial
Management (electronic transactions processing) and Case Equipment (heavy
equipment manufacturer). Earnings disappointments led to losses for Sunbeam
Oster (household appliances), United HealthCare (HMO) and Value Health (health
care services).
Bond market expectations changed significantly over the past year. The year
started with a very strong economy, fears of further Fed. tightening, and a 7.7
percent yield on the 10 year U.S. Treasury bond. Currently the yield on the ten
year bond is 6.1 percent, the economy is showing clear signs of slowing, and the
market is anticipating further monetary easing by the Federal Reserve.
Our analysis found the bond market to be very attractive in January (with 7.9
percent yields on the ten year Treasury) and invested 55 percent of the
portfolio in bonds. Since that time the bond market has staged a powerful rally
as interest rates have fallen to the current less attractive levels. The asset
allocation management positioned the Fund to participate in the bond market
rally. As rates have moved lower we scaled out of the over-weighted position in
bonds to a current, more normal weight of 40 percent.
The bond holdings consistently met or exceeded the bond market rallies during
all of 1995, including the third quarter. The performance was primarily driven
by a modestly longer duration and an above average weight in investment grade
corporate bonds.
Currently the Fund's asset mix is 56 percent stocks, 40 percent bonds, and 4
percent cash.
OUTLOOK
Over the near term we are cautiously optimistic, while longer term we remain
bullish. A continuation in the slowdown of economic growth may lead to earnings
disappointments and possibly a modest market correction following the near 30
percent gain in the S&P 500 over the past nine months. With inflation under
control, along with the much improved productivity of the United States work
force, the long term outlook remains very positive for the financial markets.
The Spectrum Fund has meaningfully participated in the market advance over the
past year producing a total return to Class A investors of 18.4 percent.* Our
goal is to protect these gains while positioning the Fund for long term success.
*Historical results are not an indication of future performance. These
performance results do not reflect the impact of Class A's maximum 5 percent
front-end sales charge or Class B's maximum 5 percent contingent deferred sales
charge.
**The Merrill Lynch-Wilshire Capital Markets Index is a market value-weighted
index measuring the total return performance of the combined domestic taxable
fixed income and equity markets. It includes the entire domestic common stock
universe for which daily pricing is available, as well as all publicly placed
domestic taxable debt issues with at least one year remaining to maturity and at
least ten million dollars par value outstanding.
3
<PAGE>
ADVANTUS SPECTRUM FUND
SEPTEMBER 30, 1995
COMPARISON OF CHANGE IN VALUE OF A HYPOTHETICAL $10,000
INVESTMENT IN ADVANTUS SPECTRUM FUND,
MERRILL LYNCH-WILSHIRE CAPITAL
MARKETS INDEX AND CONSUMER PRICE INDEX
CLASS A
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
ML-WILSHIRE CAPITAL MARKETS
CLASS A INDEX CPI
<S> <C> <C> <C>
11/16/87 10000 10000 10000
10/31/88 10504 10762 10426
10/31/89 12272 12740 10904
10/31/90 12207 12341 11590
10/31/91 15381 15647 11929
10/31/92 17084 17215 12311
10/31/93 18567 19809 12641
9/30/94 18211 19578 13023
9/30/95 21,559 23,927 13,310
Average annual total return:
One year 12.5%
Five year 10.9%
Since inception (11/16/87) 10.3%
</TABLE>
On the chart above you can see how the Advantus Spectrum Fund Class A shares'
total return compared to the Merrill Lynch-Wilshire Capital Markets Index and
the Consumer Price index. The three lines represent the cumulative total return
of a hypothetical initial $10,000 investment made on the inception date of the
Advantus Spectrum Fund Class A shares (November 16, 1987) through September 30,
1995.
4
<PAGE>
ADVANTUS SPECTRUM FUND
SEPTEMBER 30, 1995
CLASS B
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
ML-WILSHIRE CAPITAL MARKETS
CLASS B INDEX CPI
<S> <C> <C> <C>
8/19/94 10000 10000 10000
9/30/94 10003 9952 10067
9/30/95 11,316 12,162 10,289
Average annual total return
One year 12.6%
Since inception (8/19/94) 11.7%
</TABLE>
On the chart above you can see how the Advantus Spectrum Fund Class B shares'
total return compared to the Merrill Lynch-Wilshire Capital Markets Index and
the Consumer Price index. The three lines represent the cumulative total return
of a hypothetical initial $10,000 investment made on the inception date of the
Advantus Spectrum Fund Class B shares (August 19, 1994) through September 30,
1995.
5
<PAGE>
ADVANTUS SPECTRUM FUND
SEPTEMBER 30, 1995
CLASS C
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
ML-WILSHIRE CAPITAL MARKETS
CLASS C INDEX CPI
<S> <C> <C> <C>
3/01/95 10,000 10,000 10,000
9/30/95 11,263 11,626 10,146
Total return:
Since inception (3/1/95) 12.6%
</TABLE>
On the chart above you can see how the Advantus Spectrum Fund Class C shares'
total return compared to the Merrill Lynch-Wilshire Capital Markets Index and
the Consumer Price index. The three lines represent the cumulative total return
of a hypothetical initial $10,000 investment made on the inception date of the
Advantus Spectrum Fund Class C shares (March 1, 1995) through September 30,
1995.
The above charts are useful because they provide you with more information about
your investments. There are limitations, however. An index may reflect the
performance of securities that the Fund may not hold. Also, the index does not
deduct sales charges, investment advisory fees and other fund expenses, whereas
your Fund does. Performance presented for the Fund reflects the deduction of the
maximum 5 percent front-end sales charge for Class A and the maximum applicable
contingent deferred sales charge for Class B shares. Sales charges pay for your
financial adviser's investment advice. Individuals cannot buy even an unmanaged
index fund without incurring some charges and expenses.
Historical results are not an indication of future performance.
6
<PAGE>
ADVANTUS SPECTRUM FUND
SEPTEMBER 30, 1995
FIVE LARGEST STOCK HOLDINGS
<TABLE>
<CAPTION>
% OF
MARKET STOCK
COMPANY SHARES VALUE PORTFOLIO
- -------------------------------------------------- ------ ---------- ----------
<S> <C> <C> <C>
Pfizer Inc........................................ 20,820 $1,111,267 3.4%
General Electric Company.......................... 16,626 1,059,908 3.2%
Columbia/HCA Healthcare Corporation............... 21,627 1,051,613 3.2%
Praxair Inc....................................... 30,700 821,225 2.5%
First Financial Management........................ 8,300 810,288 2.4%
---------- -----
$4,854,301 14.7%
---------- -----
---------- -----
</TABLE>
BOND PORTFOLIO CHARACTERISTICS--QUALITY BREAKDOWN
<TABLE>
<CAPTION>
% OF
BOND
RATING PORTFOLIO
- ------------------------------------------------------------ --------
<S> <C>
U.S. Treasury............................................... 26.2%
U.S. Government Agencies.................................... 19.8%
AAA rated................................................... 1.3%
AA rated.................................................... 12.2%
A rated..................................................... 16.2%
BBB rated................................................... 24.3%
--------
100.0%
--------
--------
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Common Stocks 56.1%
Bonds 40.3%
Cash and Other
Assets/Liabilities 3.6%
100.0%
</TABLE>
7
<PAGE>
ADVANTUS SPECTRUM FUND
INVESTMENTS IN SECURITIES
SEPTEMBER 30, 1995
(Percentages of each category relate to total net assets.)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE(A)
- ------------ -------------
<C> <S> <C>
COMMON STOCKS (56.1%)
CAPITAL GOODS (5.9%)
Machinery (5.9%)
21,248 Case Corporation....................................... $ 780,864
16,626 General Electric Company............................... 1,059,908
5,640 Kaydon Corporation..................................... 166,380
21,700 Sensormatic Electronics Corporation.................... 499,100
6,600 United Waste Systems, Inc. (b)......................... 275,550
16,686 York International Corp. .............................. 702,898
-------------
3,484,700
-------------
CONSUMER GOODS AND SERVICES (20.6%)
Consumer Goods (11.8%)
9,921 Colgate-Palmolive Company.............................. 660,987
21,627 Columbia/HCA Healthcare Corporation.................... 1,051,613
11,540 Fisher Scientific International Inc. .................. 373,607
16,600 Gillette Company....................................... 790,575
14,104 Pepsico, Inc. ......................................... 719,304
20,820 Pfizer Inc. ........................................... 1,111,267
9,895 Procter & Gamble Company............................... 761,915
28,800 Pyxis Corporation (b).................................. 558,000
10,200 Teva Pharmaceutical Industries ADR (c)................. 368,475
20,400 Value Health Incorporated (b).......................... 540,600
-------------
6,936,343
-------------
Consumer Services (2.5%)
13,833 CUC International Inc. (b)............................. 482,426
<CAPTION>
MARKET
SHARES VALUE(A)
- ------------ -------------
<C> <S> <C>
CONSUMER GOODS AND SERVICES--CONTINUED
11,569 GTECH Holdings Corporation (b)......................... $ 348,516
23,118 Manpower............................................... 670,422
-------------
1,501,364
-------------
Retail (4.8%)
17,200 Heilig-Meyers Corporation.............................. 399,900
18,520 Home Depot Inc. ....................................... 738,485
11,800 Kohl's Inc. (b)........................................ 612,125
20,976 Office Depot, Inc. (b)................................. 631,902
11,900 Sears, Roebuck and Co. ................................ 438,812
-------------
2,821,224
-------------
Consumer Cyclicals (1.5%)
11,289 Exide Corporation...................................... 564,450
9,000 Tommy Hilfiger Corporation (b)......................... 292,500
-------------
856,950
-------------
CREDIT SENSITIVE (11.3%)
Finance (10.1%)
16,300 American Express Company............................... 723,313
9,167 American International Group, Inc...................... 779,195
10,650 Federal Home Loan Mortgage Corporation................. 736,181
10,110 First Data Corp. ...................................... 626,820
8,300 First Financial Management............................. 810,288
11,400 MBIA Inc. ............................................. 803,700
13,200 MGIC Investment Corporation............................ 755,700
23,300 Norwest Corporation.................................... 763,075
-------------
5,998,272
-------------
</TABLE>
See accompanying notes to investments in securities.
8
<PAGE>
ADVANTUS SPECTRUM FUND
INVESTMENTS IN SECURITIES--CONTINUED
<TABLE>
<CAPTION>
MARKET
SHARES VALUE(A)
- ------------ -------------
<C> <S> <C>
CREDIT SENSITIVE--CONTINUED
Utilities (1.2%)
7,255 Florida Progress Corporation........................... $ 234,880
12,100 New England Electric System............................ 447,700
-------------
682,580
-------------
INTERMEDIATE GOODS AND SERVICES (18.3%)
Energy (3.3%)
5,350 Amoco Corporation...................................... 343,069
11,100 Columbia Gas System, Inc. (b).......................... 428,738
5,330 Mobil Corporation...................................... 531,001
5,130 Royal Dutch Petroleum ADR (c).......................... 629,708
-------------
1,932,516
-------------
Materials (3.1%)
6,500 Dow Chemical Company................................... 484,250
16,190 Lubrizol Corporation................................... 528,199
30,700 Praxair Inc. .......................................... 821,225
-------------
1,833,674
-------------
Transportation (1.9%)
5,200 Fritz Companies (b).................................... 383,175
14,200 Landstar System, Inc. (b).............................. 342,575
5,315 Norfolk Southern Corporation........................... 397,296
-------------
1,123,046
-------------
<CAPTION>
MARKET
SHARES VALUE(A)
- ------------ -------------
<C> <S> <C>
TECHNOLOGY (10.0%)
1,200 C-Cube Microsystems Incorporated (b)................... $ 54,900
18,858 Computer Associates International...................... 796,751
21,100 Danka Business Systems PLC (c)......................... 759,600
8,760 DSC Communications (b)................................. 519,030
27,200 EMC Corporation (b).................................... 493,000
18,100 Equifax Incorporated................................... 757,937
8,900 Fore Systems Inc. (b).................................. 329,300
14,940 Informix Corporation (b)............................... 485,550
8,113 Intel.................................................. 487,794
13,265 Oracle Corporation (b)................................. 509,044
10,000 Worldcom, Incorporated (b)............................. 321,250
8,100 3 Com (b).............................................. 368,550
-------------
5,882,706
-------------
Total common stocks (cost: $27,681,596)................ 33,053,375
-------------
</TABLE>
See accompanying notes to investments in securities.
9
<PAGE>
ADVANTUS SPECTRUM FUND
INVESTMENTS IN SECURITIES--CONTINUED
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE(A)
- ------------ ------------
<C> <S> <C> <C> <C>
LONG-TERM DEBT SECURITIES (40.3%)
GOVERNMENT OBLIGATIONS (21.5%)
U.S. GOVERNMENT AND AGENCIES OBLIGATIONS (18.6%)
U.S. Treasury (10.6%)
$ 1,300,000 U.S. Treasury Bond..................................... 12.000% 08/15/13 $ 1,918,313
1,050,000 U.S. Treasury Bond..................................... 8.000% 11/15/21 1,222,920
1,250,000 U.S. Treasury Note..................................... 10.750% 08/15/05 1,655,076
600,000 U.S. Treasury Note..................................... 8.875% 11/15/98 649,500
750,000 U.S. Treasury Note..................................... 7.750% 11/30/99 797,344
------------
6,243,153
------------
Government National Mortgage Association (4.0%)
453,606 ....................................................... 7.500% 10/15/23 457,697
711,738 ....................................................... 8.000% 08/15/24 731,196
488,959 ....................................................... 6.500% 11/15/23 472,251
229,263 ....................................................... 7.500% 02/15/24 231,214
480,033 ....................................................... 7.500% 06/15/24 484,117
------------
2,376,475
------------
Other U.S. Government Agencies (3.9%)
71,609 Federal National Mortgage Association Principal only
PAC (d)............................................... 7.000% 07/25/22 71,132
500,000 Federal Home Loan Mortgage............................. 7.030% 04/05/04 503,168
1,250,000 Federal Home Loan Bank................................. 7.270% 10/17/97 1,250,651
500,000 Federal Farm Credit.................................... 6.960% 06/06/00 502,102
------------
2,327,053
------------
OTHER GOVERNMENT OBLIGATIONS (1.3%)
800,000 Quebec Province of Canada (c).......................... 7.500% 07/15/23 789,744
------------
STATE AND LOCAL GOVERNMENT OBLIGATIONS (1.6%)
924,000 Wyoming Community Development Authority................ 6.850% 06/01/10 910,140
------------
Total government obligations (cost: $12,487,571).................................. 12,646,565
------------
</TABLE>
See accompanying notes to investments in securities.
10
<PAGE>
ADVANTUS SPECTRUM FUND
INVESTMENTS IN SECURITIES--CONTINUED
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE(A)
- ------------ ------------
<C> <S> <C> <C> <C>
CORPORATE OBLIGATIONS (18.8%)
CAPITAL GOODS (2.4%)
Machinery (1.4%)
$ 750,000 Joy Technologies Incorporated.......................... 10.250% 09/01/03 $ 840,000
------------
Paper and Forest Products (1.0%)
500,000 Bowater Incorporated................................... 9.000% 08/01/09 584,452
------------
CONSUMER CYCLICAL (.9%)
Automotive (.9%)
500,000 Chrysler Corporation................................... 10.950% 08/01/17 559,019
------------
CONSUMER STAPLES (5.1%)
Drugs (1.4%)
850,000 American Home Products................................. 6.500% 10/15/02 845,716
------------
Entertainment (.9%)
500,000 Royal Caribbean Cruises Limited Notes.................. 8.250% 04/01/05 528,990
------------
Food (.6%)
342,857 General Mills Inc. .................................... 6.235% 03/15/97 344,354
------------
Media (2.2%)
500,000 News Corporation Limited............................... 7.750% 01/20/24 487,865
750,000 Time Warner Incorporated............................... 9.150% 02/01/23 811,916
------------
1,299,781
------------
ENERGY (1.8%)
Natural Gas Distribution (1.8%)
1,000,000 Consolidated Natural Gas............................... 8.750% 06/01/99 1,076,743
------------
FINANCIAL (5.5%)
Consumer Finance (4.3%)
900,000 Associates Corp of North America....................... 6.750% 10/15/99 910,148
250,000 Ford Motor Credit (e).................................. 5.340% 03/18/99 246,092
600,000 Ford Motor Credit...................................... 5.625% 12/15/98 587,886
500,000 GMAC................................................... 5.500% 12/15/01 467,625
300,000 Standard Credit Card Master Trust Series 95-5 A (e).... 6.340% 05/08/00 300,188
------------
2,511,939
------------
</TABLE>
See accompanying notes to investments in securities.
11
<PAGE>
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE(A)
- ------------ ------------
<C> <S> <C> <C> <C>
Real Estate (1.2%)
$ 500,000 Property Trust of America.............................. 7.500% 02/15/14 $ 473,850
250,000 Security Capital Industrial Trust Notes................ 7.875% 05/15/09 253,528
------------
727,378
------------
UTILITIES (.9%)
Electric (.9%)
500,000 Commonwealth Edison.................................... 8.250% 12/01/07 511,327
------------
TRANSPORTATION (2.2%)
Trucking (.9%)
500,000 Consolidated Freightways (f)........................... 7.350% 06/01/05 499,672
------------
Water Transportation (1.3%)
750,000 Overseas Shipholders................................... 8.750% 12/01/13 780,510
------------
Total corporate obligations (cost: $10,931,682)................................... 11,109,881
------------
Total long-term debt securities (cost: $23,419,253)............................... 23,756,446
------------
SHORT-TERM SECURITIES (3.5%)
650,000 Federal National Mortgage Association Discount Note.... 5.79% 12/15/95 642,048
100,000 U.S. Treasury Bill..................................... 5.46% 11/16/95 99,289
100,000 U.S. Treasury Bill..................................... 5.44% 12/07/95 98,982
1,200,000 Public Service Electric & Gas CP....................... 5.88% 10/26/95 1,194,825
------------
Total short-term securities (cost: $2,035,644).................................... 2,035,144
------------
Total investments in securities (cost: $53,136,493) (g)........................... $ 58,844,965
------------
------------
</TABLE>
Notes to Investments in Securities
(a) Securities are valued by procedures described in note 2 to the financial
statements.
(b) Presently non-income producing.
(c) The Fund held 4.3% of net assets in foreign securities as of September 30,
1995.
(d) Represents a debt security that entitles holders to receive only principal
payments on the underlying mortgages. The yield to maturity of a
principal-only security is sensitive to the rate of principal payments on
the underlying mortgage assets. A slower (more rapid) than expected rate of
principal repayments may have an adverse (positive) effect on yield to
matury. Interest rate disclosed represents current yield based upon the
current cost basis and estimated timing of future cash flows.
(e) Represents a debt security with a variable rate. The interest rate disclosed
is the rate in effect at September 30, 1995.
(f) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At September 30,
1995, the value of these securities amounted to $499,672 or .8% of net
assets.
(g) At September 30, 1995 the cost of securities for federal income tax purposes
was $53,198,742. The aggregate unrealized appreciation and depreciation of
investments in securities based on this cost were:
<TABLE>
<S> <C> <C>
Gross unrealized appreciation..................... $6,295,678
Gross unrealized depreciation..................... (649,455)
----------
Net unrealized appreciation....................... $5,646,223
----------
----------
</TABLE>
12
<PAGE>
ADVANTUS SPECTRUM FUND
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1995
<TABLE>
<S> <C>
ASSETS
Investments in securities, at market value--see accompanying schedule for
detailed listing (identified cost: $53,136,493)................................ $58,844,965
Cash in bank on demand deposit.................................................. 711,885
Receivable for Fund shares sold................................................. 125,583
Receivable for investment securities sold....................................... 321,204
Accrued interest and dividends receivable....................................... 501,698
-----------
Total assets................................................................ 60,505,335
-----------
LIABILITIES
Payable for investment securities purchased..................................... 1,312,320
Payable for Fund shares repurchased............................................. 169,648
Payable to Adviser.............................................................. 68,931
-----------
Total liabilities........................................................... 1,550,899
-----------
Net assets applicable to outstanding capital stock.............................. $58,954,436
-----------
-----------
Represented by:
Capital stock--$.01 par value (note 1)........................................ $ 39,857
Additional paid-in capital.................................................... 50,213,775
Undistributed net investment income........................................... 13,258
Accumulated net realized gains from investments............................... 2,979,074
Unrealized appreciation of investments........................................ 5,708,472
-----------
Total--representing net assets applicable to outstanding capital stock...... $58,954,436
-----------
-----------
Net assets applicable to outstanding Class A shares............................. $55,624,248
-----------
-----------
Net assets applicable to outstanding Class B shares............................. $ 3,131,262
-----------
-----------
Net assets applicable to outstanding Class C shares............................. $ 198,926
-----------
-----------
Shares outstanding and net asset value per share:
Class A--Shares outstanding 3,759,787......................................... $ 14.79
-----------
-----------
Class B--Shares outstanding 212,378........................................... $ 14.74
-----------
-----------
Class C--Shares outstanding 13,498............................................ $ 14.74
-----------
-----------
</TABLE>
See accompanying notes to financial statements.
13
<PAGE>
ADVANTUS SPECTRUM FUND
STATEMENT OF OPERATIONS
YEAR ENDED SEPTEMBER 30, 1995
<TABLE>
<S> <C>
Investment income:
Interest...................................................................... $2,205,188
Dividends..................................................................... 361,169
----------
2,566,357
----------
Expenses (note 4):
Investment advisory fee....................................................... 338,669
Distribution fees--Class A.................................................... 193,254
Distribution fees--Class B.................................................... 11,904
Distribution fees--Class C.................................................... 389
Administrative services fee................................................... 39,600
Custodian fees................................................................ 17,848
Auditing and accounting services.............................................. 31,850
Legal fees.................................................................... 5,264
Directors' fees............................................................... 1,276
Registration fees............................................................. 38,732
Printing and shareholder reports.............................................. 36,391
Insurance..................................................................... 6,087
Other......................................................................... 39,919
----------
Total expenses.............................................................. 760,183
----------
Investment income--net...................................................... 1,806,174
----------
Realized and unrealized gains on investments:
Net realized gains on investments (note 3).................................... 3,056,132
Net change in unrealized appreciation or depreciation on investments.......... 4,774,991
----------
Net gains on investments.................................................... 7,831,123
----------
Net increase in net assets resulting from operations............................ $9,637,297
----------
----------
</TABLE>
See accompanying notes to financial statements.
14
<PAGE>
ADVANTUS SPECTRUM FUND
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SEPTEMBER 30, 1995 AND
PERIOD FROM NOVEMBER 1, 1993 TO SEPTEMBER 30, 1994
<TABLE>
<CAPTION>
1995 1994
----------- -----------
<S> <C> <C>
Operations:
Investment income--net.............................................. $ 1,806,174 $ 1,160,613
Net realized gains on investments................................... 3,056,132 1,523,789
Net change in unrealized appreciation or depreciation of
investments........................................................ 4,774,991 (3,810,302)
----------- -----------
Increase (decrease) in net assets resulting from operations....... 9,637,297 (1,125,900)
----------- -----------
Distributions to shareholders from:
Investment income--net:
Class A........................................................... (1,755,964) (1,170,626)
Class B........................................................... (40,461) (982)
Class C........................................................... (1,580) --
Net realized gains on investments:
Class A........................................................... (1,538,743) (386,851)
Class B........................................................... (10,795) --
----------- -----------
Total distributions............................................... (3,367,543) (1,558,459)
----------- -----------
Capital share transactions (notes 4 and 5):
Proceeds from sales:
Class A........................................................... 5,987,210 9,665,718
Class B........................................................... 2,799,440 140,000
Class C........................................................... 199,159 --
Shares issued as a result of reinvested dividends:
Class A........................................................... 3,022,573 1,351,297
Class B........................................................... 49,410 982
Class C........................................................... 1,482 --
Payments for redemption of shares:
Class A........................................................... (14,784,420) (10,096,669)
Class B........................................................... (28,143) --
Class C........................................................... (7,348) --
----------- -----------
Increase (decrease) in net assets from capital share
transactions..................................................... (2,760,637) 1,061,328
----------- -----------
Total increase (decrease) in net assets........................... 3,529,117 (1,623,031)
Net assets at beginning of period..................................... 55,425,319 57,048,350
----------- -----------
Net assets at end of period (including undistributed net investment
income of $13,258 and $5,089, respectively).......................... $58,954,436 $55,425,319
----------- -----------
----------- -----------
</TABLE>
See accompanying notes to financial statements.
15
<PAGE>
ADVANTUS SPECTRUM FUND
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1995
(1) ORGANIZATION
The Advantus Spectrum 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 Spectrum Fund, Inc. (effective March 1,
1995). Prior to March 1, 1995 the Fund was known as MIMLIC Asset Allocation
Fund, Inc.
The Fund currently issues three classes of shares: Class A, Class B and
Class C shares. Class A shares are sold subject to a front-end sales charge.
Class B shares are sold subject to a contingent deferred sales charge payable
upon redemption if redeemed within six years of purchase. Class C shares are
sold without either a front-end sales charge or a contingent deferred sales
charge. Both Class B and Class C are subject to a higher Rule 12b-1 fee than
Class A shares. Both Class B and Class C shares automatically convert to Class A
shares at net asset value after a specified holding period. Such holding periods
decline as the amount of the purchase increases and range from 28 to 84 months
after purchase for Class B shares and 40 to 96 months after purchase for Class C
shares. All three classes of shares have identical voting, dividend, liquidation
and other rights and the same terms and conditions, except that the level of
distribution fees and sales charges charged differs between Class A, Class B and
Class C shares. Income, expenses (other than distribution fees) and realized and
unrealized gains or losses on investments are allocated to each class of shares
based upon its relative net assets.
On January 18, 1994, the Board of Directors elected to change the fiscal
year end of the Fund from October 31 to September 30.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies followed by the Fund are summarized as
follows:
INVESTMENTS IN SECURITIES
Investments in securities traded on a national exchange are valued at the
last sales price on that exchange prior to the time when assets are valued;
securities traded in the over-the-counter market and listed securities for which
no sale was reported on that date are valued on the basis of the last current
bid price. When market quotations are not readily available, securities are
valued at fair value as determined in good faith by the Board of Directors. Such
fair values are determined using pricing services or prices quoted by
independent brokers. Short-term securities are valued at market.
Security transactions are accounted for on the date the securities are
purchased or sold. Realized gains and losses are calculated on the
identified-cost basis. Dividend income is recognized on the ex-dividend date and
interest income, including amortization of bond premium and discount computed on
a level yield basis, is accrued daily.
16
<PAGE>
NOTES TO FINANCIAL STATEMENTS--CONTINUED
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)
FEDERAL TAXES
The Fund's policy is to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
taxable income to shareholders. Therefore, no income tax provision is required.
The Fund's policy is to make required minimum distributions prior to December
31, in order to avoid federal excise tax.
Net investment income and net realized gains (losses) may differ for
financial statement and tax purposes primarily because of temporary book-to-tax
differences. The character of distributions made during the year from net
investment income or net realized gains may differ from their ultimate
characterization for federal income tax purposes. Also, due to the timing of
dividend distributions, the fiscal year in which amounts are distributed may
differ from the year that the income or realized gains (losses) were recorded by
the Fund.
DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income are declared and paid quarterly.
Realized gains, if any, are paid annually.
(3) INVESTMENT SECURITY TRANSACTIONS
For the year ended September 30, 1995, purchases of securities and proceeds
from sales, other than temporary investments in short-term securities aggregated
$66,388,532 and $70,284,259, respectively.
(4) 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).
Advantus Capital is a wholly-owned subsidiary of MIMLIC Asset Management Company
(MIMLIC Management) which, prior to March 1, 1995, served as investment adviser
to the Fund. Under the agreement, Advantus Capital manages the Fund's assets and
provides research, statistical and advisory services and pays related office
rental and executive expenses and salaries. In addition, as part of the advisory
fee, Advantus Capital pays the expenses of the Fund's transfer, dividend
disbursing and redemption agent (The Minnesota Mutual Life Insurance Company
(Minnesota Mutual), the parent of MIMLIC Management). The fee for investment
management and advisory services is based on the average daily net assets of the
Fund at the annual rate of .60 percent, which is the same as under the old
agreement with MIMLIC Management.
The Fund has adopted separate Plans of Distribution applicable to Class A,
Class B and Class C shares, respectively, relating to the payment of certain
distribution expenses pursuant to Rule 12b-1 under the Investment Company Act of
1940 (as amended). The Fund pays distribution fees to MIMLIC Sales Corporation
(MIMLIC Sales), the underwriter of the Fund and a 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. The Class A Plan
provides for a fee up to .35 percent of average daily net assets of Class A
17
<PAGE>
NOTES TO FINANCIAL STATEMENTS--CONTINUED
(4) EXPENSES AND RELATED PARTY TRANSACTIONS--(CONTINUED)
shares. The Class B and Class C Plans provide for a fee up to 1.00 percent of
average daily net assets of Class B and Class C shares, respectively. The Class
B and Class C 1.00 percent fee is comprised of a .75 percent distribution fee
and a .25 percent service fee.
The Fund also bears certain other operating expenses including outside
directors' fees, custodian fees, registration fees, printing and shareholder
reports, legal, auditing and accounting services, 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, 1995, the administrative service fee was
$3,450 per month. Effective February 1, 1995, the administrative service fee is
$3,100 per month.
Advantus Capital (MIMLIC Management prior to March 1, 1995) directly incurs
and pays the above operating expenses and the Fund in turn reimburses Advantus
Capital.
Sales charges received by MIMLIC Sales for distributing the Fund's three
classes of shares amounted to $226,547.
As of September 30, 1995, Minnesota Mutual and subsidiaries and the
directors and officers of the Fund as a whole owned the following shares:
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENTAGE OWNED
------------------ -----------------------
<S> <C> <C>
Class A........................................................... 225,226 6.0%
Class B........................................................... 3,994 1.9%
Class C........................................................... 764 5.7%
</TABLE>
Legal fees were paid to a law firm of which the Fund's secretary is a
partner in the amount of $4,879.
(5) CAPITAL SHARE TRANSACTIONS
Transactions in shares for the year ended September 30, 1995 and the period
from November 1, 1993 to September 30, 1994 for Class A shares, the year ended
September 30, 1995 and the period from August 19, 1994 to September 30, 1994 for
Class B shares and the period from March 1, 1995 to September 30, 1995 for Class
C shares were as follows:
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
----------------------- -------------------- -----------
1995 1994 1995 1994 1995
----------- ---------- --------- --------- -----------
<S> <C> <C> <C> <C> <C>
Sold.............................................. 440,376 712,411 200,130 10,452 13,907
Issued for reinvested distributions............... 228,395 100,454 3,579 74 103
Redeemed.......................................... (1,073,619) (747,207) (1,857) -- (512)
----------- ---------- --------- --------- -----------
(404,848) 65,658 201,852 10,526 13,498
----------- ---------- --------- --------- -----------
----------- ---------- --------- --------- -----------
</TABLE>
18
<PAGE>
NOTES TO FINANCIAL STATEMENTS--CONTINUED
6) RESTRICTED SECURITIES
At September 30, 1995, investments in securities includes an issue which
generally cannot be offered for sale to the public without first being
registered under the Securities Act of 1933 (restricted security). In the event
the securities are registered, those carrying registration rights allow for the
issuer to bear all the related costs; for issues without rights, the Fund may
incur such costs. The Fund currently limits investments in securities that are
not readily marketable, including restricted securities, to 10% of net assets at
the time of the purchase. Securities are valued by procedures described in note
2. The aggregate value of restricted securities held by the Fund at September
30, 1995 was $499,672 which represents .8% of net assets.
19
<PAGE>
NOTES TO FINANCIAL STATEMENTS--CONTINUED
(7) FINANCIAL HIGHLIGHTS
Per share data for a share of capital stock and selected information for
each period are as follows:
<TABLE>
<CAPTION>
CLASS A
----------------------------------------------------------------------------------
PERIOD FROM
NOVEMBER 1,
YEAR ENDED 1993 TO YEAR ENDED OCTOBER 31,
SEPTEMBER 30, SEPTEMBER 30, ------------------------------------------
1995 1994 1993 1992 1991
--------------- --------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period....................... $ 13.28 $ 13.92 $ 13.63 $ 13.05 $ 10.87
------- ------- ------ ------ ------
Income from investment
operations:
Net investment income....... .45 .28 .29 .38 .48
Net gains or losses on
securities (both realized
and unrealized)............ 1.88 (.55) .86 1.01 2.28
------- ------- ------ ------ ------
Total from investment
operations............... 2.33 (.27) 1.15 1.39 2.76
------- ------- ------ ------ ------
Less distributions:
Dividends from net
investment income.......... (.44) (.28) (.31) (.38) (.51)
Distributions from capital
gains...................... (.38) (.09) (.55) (.43) (.07)
------- ------- ------ ------ ------
Total distributions....... (.82) (.37) (.86) (.81) (.58)
------- ------- ------ ------ ------
Net asset value, end of
period....................... $ 14.79 $ 13.28 $ 13.92 $ 13.63 $ 13.05
------- ------- ------ ------ ------
------- ------- ------ ------ ------
Total return (b).............. 18.4% (1.9)%(c) 8.7% 11.1% 26.0%
Net assets, end of period (in
thousands)................... $55,624 $55,286 $57,048 $38,417 $18,588
Ratio of expenses to average
daily net assets............. 1.33% 1.27%(f) 1.22% 1.35%(g) 1.35%(g)
Ratio of net investment income
to average daily net
assets....................... 3.22% 2.24%(f) 2.16% 3.02%(g) 4.07%(g)
Portfolio turnover rate
(excluding short-term
securities).................. 125.5% 124.5% 92.1% 123.3% 56.2%
<FN>
- ----------
(a) Commencement of operations.
(b) Total return figures are based on a share outstanding throughout the period
and assumes reinvestment of distributions at net asset value. Total return
figures do not reflect the impact of sales charges.
(c) Total return is presented for the period from November 1, 1993 to September
30, 1994.
(d) Total return is presented for the period from August 19, 1994, commencement
of operations, to September 30, 1994.
(e) Total return is presented for the period from March 1, 1995, commencement
of operations, to September 30, 1995.
(f) Adjusted to an annual basis.
(g) The Fund's Adviser voluntarily absorbed $13,585 and $19,759 in expenses for
the years ended October 31, 1992 and 1991 respectively. If Class A shares
had been charged for these expenses, the ratio of expenses to average daily
net assets would have been 1.40% and 1.50% respectively, and the ratio of
net investment income to average daily net assets would have been 2.97% and
3.92%, respectively.
(h) Ratios presented for the period from August 19, 1994 to September 30, 1994
are not annualized as they are not indicative of anticipated results.
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
CLASS B CLASS C
---------------------------------- --------------
PERIOD FROM PERIOD FROM
AUGUST 19, MARCH 1,
YEAR ENDED 1994(A) TO 1995(A) TO
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
1995 1994 1995
-------------- -------------- --------------
<S> <C> <C> <C>
Net asset value, beginning of
period...................... $ 13.27 $ 13.36 $ 13.36
------ ------ ------
Income from investment
operations:
Net investment income....... .39 .03 .24
Net gains or losses on
securities (both realized
and unrealized)............ 1.84 (.03) 1.43
------ ------ ------
Total from investment
operations............... 2.23 -- 1.67
------ ------ ------
Less distributions:
Dividends from net
investment income.......... (.38) (.09) (.29)
Distributions from capital
gains...................... (.38) -- --
------ ------ ------
Total distributions....... (.76) (.09) (.29)
------ ------ ------
Net asset value, end of
period...................... $ 14.74 $ 13.27 $ 14.74
------ ------ ------
------ ------ ------
Total return (b).............. 17.6% (.04)%(d) 12.6%(e)
Net assets, end of period (in
thousands).................. $3,131 $ 140 $ 199
Ratio of expenses to average
daily net assets............ 1.99% .23%(h) 2.00%(f)
Ratio of net investment income
to average daily net
assets...................... 2.30% .37%(h) 2.17%(f)
Portfolio turnover rate
(excluding short-term
securities)................. 125.5% 124.5% 125.5%
</TABLE>
21
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders
Advantus Spectrum Fund, Inc.:
We have audited the accompanying statement of assets and liabilities,
including the schedule of investments in securities, of the Advantus Spectrum
Fund, Inc. (the Fund) as of September 30, 1995 and the related statement of
operations for the year then ended, the statement of changes in net assets for
the year ended September 30, 1995 and the period from November 1, 1993 to
September 30, 1994 and the financial highlights for the year ended September 30,
1995, the period from November 1, 1993 to September 30, 1994 and each of the
years in the three-year period ended October 31, 1993. 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. Investment securities held in custody are confirmed to us by the
custodian. As to securities purchased or sold but not received or delivered, we
request confirmations from brokers, and where replies are not received, we carry
out other appropriate auditing procedures. 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, 1995 and the results of its operations,
changes in its net assets and financial highlights, for the periods stated in
the first paragraph above, in conformity with generally accepted accounting
principles.
KPMG Peat Marwick LLP
Minneapolis, Minnesota
November 3, 1995
22
<PAGE>
FEDERAL INCOME TAX INFORMATION
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, 1995. Dividends for the 1995 calendar year will
be reported to you on Form 1099-Div in late January 1996. Shareholders should
consult a tax adviser on how to report these distributions for state and local
purposes.
CLASS A
Income distributions--taxable as dividend income, 11.3% qualifying for deduction
by corporations
<TABLE>
<CAPTION>
PER
PAYABLE DATE SHARE
- ---------------------------------------- -------
<S> <C>
December 28, 1994....................... $0.1079
March 28, 1995.......................... 0.1181
June 28, 1995........................... 0.1154
September 28, 1995...................... 0.0981
-------
$0.4395
-------
-------
</TABLE>
Capital gains distribution--taxable as long-term capital gains
<TABLE>
<S> <C>
December 19, 1994....................... $0.3788
-------
-------
</TABLE>
CLASS B
Income distributions--taxable as dividend income, 11.3% qualifying for deduction
by corporations
<TABLE>
<CAPTION>
PER
PAYABLE DATE SHARE
- ---------------------------------------- -------
<S> <C>
December 28, 1994....................... $0.0978
March 28, 1995.......................... 0.1010
June 28, 1995........................... 0.1055
September 28, 1995...................... 0.0799
-------
$0.3842
-------
-------
</TABLE>
Capital gains distribution--taxable as long-term capital gains
<TABLE>
<S> <C>
December 19, 1994....................... $0.3788
-------
-------
</TABLE>
CLASS C
Income distributions--taxable as dividend income, 11.3% qualifying for deduction
by corporations
<TABLE>
<CAPTION>
PER
PAYABLE DATE SHARE
- ---------------------------------------- -------
<S> <C>
March 28, 1995.......................... $0.1010
June 28, 1995........................... 0.1022
September 28, 1995...................... 0.0888
-------
$0.2920
-------
-------
</TABLE>
Capital gains distribution--taxable as long-term capital gains
None paid for Class C
23
<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 cash
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.
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. Amounts
over $1,000 will be wire transferred to your personal bank account. The
prevailing wire charge will be added to the withdrawal
24
<PAGE>
amount. Amounts for less than $1,000 will be mailed to your bank on your behalf.
To set this up, please send a voided check from your bank. Depending upon the
performance of the underlying investment options, the cash 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.'s six portfolio managers manage eight
mutual funds containing $272 million in assets in addition to $1.8 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
25
<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.
[LOGO]
ADVANTUS-TRADEMARK-
FAMILY OF FUNDS
MIMLIC SALES CORPORATION
400 ROBERT STREET NORTH
ST. PAUL, MN 55101-2098
1-800-443-3677
<PAGE>
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.48639 11-95
