ADVANTUS SPECTRUM FUND INC
485APOS, 2000-11-30
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<PAGE>

                                              File Numbers 2-94175 and 811-4143

                         SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C. 20549


                                     Form N-1A

            REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933  X

                         Pre-Effective Amendment Number ___

                         Post-Effective Amendment Number 23

                                       and/or


        REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940  X

                                Amendment Number 23


                            ADVANTUS SPECTRUM FUND, INC.
                 (Exact Name of Registrant as Specified in Charter)


                400 ROBERT STREET NORTH, ST. PAUL, MINNESOTA  55101
                      (Address of Principal Executive Offices)
         REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (651) 665-3826


        ERIC J. BENTLEY, 400 ROBERT STREET NORTH, ST. PAUL, MINNESOTA 55101
                     (Name and Address of Agent for Service)


                                      Copy to:
                             Michael J. Radmer, Esquire
                                Dorsey & Whitney LLP
                               220 South Sixth Street
                         Minneapolis, Minnesota  55402-1498

IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE (check appropriate box)

          immediately upon filing pursuant to paragraph (b)
     ---
          On (date) pursuant to paragraph (b)
     ---
          60 days after filing pursuant to paragraph (a)(1)
     ---
      X   on  February 1, 2001 pursuant to paragraph (a)(1)
     ---
          75 days after filing pursuant to paragraph (a)(2)
     ---
          on (date) pursuant to paragraph (a)(2) of Rule 485.
     ---

IF APPROPRIATE, CHECK THE FOLLOWING BOX:

          this post-effective amendment designates a new effective date for a
     ---  previously filed post-effective amendment.

<PAGE>
SPECTRUM

As with all mutual funds, the Securities and Exchange Commission
has not determined that the information in this prospectus is
accurate or complete, nor has it approved the Fund's securities.
It is a criminal offense to state otherwise.

                                                    ADVANTUS SPECTRUM FUND, INC.


                                               PROSPECTUS DATED FEBRUARY 1, 2001


                                                                          [LOGO]

[GRAPHIC]
<PAGE>
ADVANTUS SPECTRUM FUND, INC.

Advantus Spectrum Fund, Inc. (Fund) is a mutual fund that offers different
classes of shares. This prospectus provides you information about the Fund you
should know before investing. The Fund is a member of the Advantus family of
funds (the Advantus Funds). The Advantus Funds (including the Fund) other than
the Advantus Money Market Fund, Inc. and Advantus Real Estate Securities Fund,
Inc. are referred to as "Advantus Multiple Class Funds."

TABLE OF CONTENTS


<TABLE>
<CAPTION>
                                                      Page No.
<S>                                                   <C>
THE FUND - SUMMARY .................................         3

       Investment Objective and Policies ...........         3

       Main Risks ..................................         3

       Fund Performance ............................         4

       Fees and Expenses ...........................         6

FINANCIAL HIGHLIGHTS ...............................         8

       Financial Highlights Class A Shares .........         8

       Financial Highlights Class B Shares .........         9

       Financial Highlights Class C Shares .........        10

INVESTING IN THE FUND ..............................        11

       Managing the Fund ...........................        11

       Investment Objective, Policies and
       Practices ...................................        12

       Defining Risks ..............................        14

BUYING AND SELLING SHARES ..........................        16

       Choosing a Share Class ......................        16

       Sales and Distribution Charges ..............        16

       Reducing Sales Charges ......................        19

       Buying Shares ...............................        20

       Selling Shares ..............................        22

       Exchanging Shares ...........................        23

       Telephone Transactions ......................        24

       Internet Transactions .......................        24

       Account Requirements ........................        24

GENERAL INFORMATION ................................        26

       Dividends and Capital Gains Distributions ...        26

       Taxes .......................................        26

       Service Providers ...........................        28

       Advantus Family of Funds ....................        31

       Additional Information About the Fund .......        32

       How to Obtain Additional Information ........        32
</TABLE>

<PAGE>
                                                                       [GRAPHIC]

                                                              THE FUND - SUMMARY

Advantus Spectrum Fund, Inc. (Spectrum Fund) is an open-end, diversified
investment company, commonly called a mutual fund. This Fund lets you choose
among three classes of shares that offer different sales charges and bear
different expenses. These alternatives allow you to choose the share class that
you believe is most beneficial given the amount of your purchase, the length of
time you expect to hold onto the shares and whether you plan to make additional
investments.

This section gives you a brief summary of the Fund's investment policies,
practices and main risks, as well as performance and fee information. More
detailed information about the Fund follows this summary.

--------------------
FOR YOUR INFORMATION
--------------------
A mutual fund is an investment company that invests the money of many people in
a variety of securities to seek a specific objective over time. An open-end
mutual fund buys back an investor's shares at the fund's current net asset
value.
---------------
REFERENCE POINT
---------------
Please see "Investing in the Fund - Defining Risks" for a more detailed
description of these main risks and additional risks in connection with
investing in the Fund.
For more information on Fund portfolio turnover, see "General Information -
Taxes."

INVESTMENT OBJECTIVE AND POLICIES

SPECTRUM FUND seeks the most favorable total return - from capital appreciation,
interest and dividends - consistent with preservation of capital.

The composition of the Fund's investment portfolio will vary with prevailing
economic conditions. As a result, the Fund may invest in various types and
classes of securities including equity securities, investment-grade debt
securities, money market securities and mortgage-related securities. The Fund's
portfolio is allocated among these asset classes based on a risk/return analysis
by the Fund's investment adviser as to current economic and market conditions,
trends in investment yields and interest rates, changes in fiscal or monetary
policies and other relevant factors.

MAIN RISKS

Keep in mind that an investment in the Fund is not a deposit of a bank and is
not insured or guaranteed by the Federal Deposit Insurance Corporation or any
other governmental agency and that it is possible to lose money by investing in
the Fund. You should also note that since the Fund may make frequent changes in
its portfolio securities, such changes may result in higher Fund costs and may
adversely affect your return. An investment in the Fund may be subject to
various risks including the following types of main risk:

    - FUND RISK - the risk that Fund performance may not meet or exceed that of
      the market as a whole

    - MARKET RISK - the risk that equity and debt securities are subject to
      adverse trends in equity and debt markets

    - INTEREST RATE RISK - the risk that the value of a debt security or other
      fixed income obligation will increase or decrease due to changes in market
      interest rates (note: one measure of interest rate risk is effective
      duration, explained under "Investing in the Fund - Investment Policies and
      Practices")

                                                    THE FUND - SUMMARY         3
<PAGE>
    - INCOME RISK - the risk that the Fund's income may decrease due to falling
      interest rates

    - CREDIT RISK - the risk that an issuer of debt securities or other fixed
      income obligations will not make payments on the securities when due

FUND PERFORMANCE

The following bar chart and table show the Fund's annual returns and long-term
performance. The chart shows how the Fund's performance has varied from year to
year, and provides some indication of the risks in investing in the Fund. The
table shows how the Fund's average annual return over a one, five and ten year
period compare to the return of a broad based index. The chart and table assume
reinvestment of dividends and distributions, and the table reflects applicable
initial and contingent deferred sales charges. Like other mutual funds, the past
performance of the Fund does not necessarily indicate how the Fund will perform
in the future.


     CLASS A YEAR TO YEAR TOTAL RETURN(1) (AS OF DECEMBER 31)


    EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<S>  <C>
'91  27.72%
'92   6.28%
'93   5.51%
'94  -2.14%
'95  24.12%
'96  11.58%
'97  18.18%
'98  22.60%
'99  14.64%
'00
</TABLE>

       (1) Absent reductions for sales loads, account fees and other charges. If
           such sales loads, account fees and other charges were included,
           returns would be less than shown above.


<TABLE>
            <S>                         <C>        <C>
            Best Quarter:                (Q4'98)      14.70%

            Worst Quarter:               (Q3'90)      -6.17%
</TABLE>


4             THE FUND - SUMMARY
<PAGE>
--------------------
FOR YOUR INFORMATION
--------------------
The Fund seeks to achieve its investment objective over longer rather than
shorter periods of time. An investment in the Fund may therefore be more
appropriate for an investor with a longer-term focus.

<TABLE>
<CAPTION>
      AVERAGE ANNUAL TOTAL RETURN
      (FOR THE PERIODS ENDING DECEMBER 31, 1999)                          From
                                           1 Year    5 Years  10 Years  Inception
      <S>                           <C>   <C>        <C>      <C>       <C>
      Class A(1)                    %        8.34     16.80     12.16         --
      Class B
       (inception 8/19/94)                   8.78     17.23        --      15.91
      Class C
       (inception 3/1/95)                   13.83        --        --      16.84
      Russell 1000 Growth Index             33.14     32.42     20.32         --
      Lehman Brothers Aggregate
       Bond Index                            -.83      7.73      7.70         --
      Blended Index(2)                      18.80     22.34     15.40         --
</TABLE>

 (1)  Average annual total returns quoted assume that the Class A
      maximum initial sales charge of 5.5% was in effect at the
      beginning of each period shown. The maximum initial sales charge
      for Class A shares was 5.0% prior to February 1, 1999.
 (2)  The blended index is comprised of 60 percent Russell 1000 Growth
      Index and 40 percent Lehman Brothers Aggregate Bond Index.

                                                    THE FUND - SUMMARY         5
<PAGE>
FEES AND EXPENSES

Investors pay fees and expenses in connection with investing in the Fund. This
table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.


<TABLE>
<CAPTION>
                                                    CLASS A     CLASS B     CLASS C
      <S>                                       <C><C>         <C>         <C>
      SHAREHOLDER FEES
       (fees paid directly from your investment)
      Maximum Sales Charge on Purchases
       (as a percentage of offering price)      %       5.50        none        none
      Maximum Deferred Sales Charge
       (as a percentage of sales proceeds)      %       1.00(a)      5.00       none
      Exchange Fees
      -On First Twelve Exchanges Each Year              none        none        none
      -On Each Additional Exchange              $       7.50        7.50        7.50
      Low Balance Fee (b)                       $      10.00       10.00       10.00

      ANNUAL FUND OPERATING EXPENSES
       (expenses that are deducted from Fund assets)
      Management Fees                           %       0.50        0.50        0.50
      Rule 12b-1 Fees                           %       0.25        1.00        1.00
      Other Expenses                            %       0.53        0.53        0.53

      TOTAL ANNUAL FUND OPERATING
       EXPENSES (c)                             %       1.28        2.03        2.03
      Fees and Expenses Waived or
       Absorbed (d)                             %       0.16        0.16        0.16
      Net Expenses                              %       1.12        1.87        1.87
</TABLE>



 (a)  Applies only to purchases of at least $1 million, in which case a
      contingent deferred sales charge of 1.00% will be imposed if such
      shares are sold within one year after the date of purchase.
 (b)  Applies to certain accounts with balances below $2,000. See
      "Account Requirements - Low Balance Fee."
 (c)  The Fund's total annual operating expenses for the prior fiscal
      year have been restated to reflect current fees. Under the Fund's
      new Investment Advisory Agreement (Advisory Agreement), effective
      May 1, 2000, the fees paid to Advantus Capital Management, Inc.
      (Advantus Capital), the Fund's investment adviser, have been
      reduced, but the Fund now bears the costs of transfer agent and
      shareholder services previously paid by Advantus Capital.
 (d)  Under the Advisory Agreement, Advantus Capital has contractually
      agreed to absorb all Fund costs and expenses which exceed 1.12% of
      Class A average daily net assets, 1.87% of Class B average daily
      net assets and 1.87% of Class C average daily net assets through
      the fiscal year of the Fund ending September 30, 2001.



6             THE FUND - SUMMARY
<PAGE>
EXAMPLE

This example is intended to help you compare the costs of investing in the Fund
with the cost of investing in other mutual funds.

The example assumes that you invest $10,000 in the Fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
Fund's operating expenses remain the same. Although your actual costs may be
higher or lower, based on these assumptions, your costs would be:


<TABLE>
<CAPTION>
                                    1 YEAR  3 YEARS  5 YEARS  10 YEARS
      <S>                        <C><C>     <C>      <C>      <C>
      Class A                    $    673      934    1,214     2,010
      Class B                         706      987    1,243     2,075
      Class C                         206      637    1,093     2,166
</TABLE>


You would pay the following expenses if you did not redeem your shares:


<TABLE>
<CAPTION>
                                    1 YEAR  3 YEARS  5 YEARS  10 YEARS
      <S>                        <C><C>     <C>      <C>      <C>
      Class A                    $    673      934    1,214     2,010
      Class B                         206      637    1,093     2,075
      Class C                         206      637    1,093     2,166
</TABLE>


                                                    THE FUND - SUMMARY         7
<PAGE>
                                                                       [GRAPHIC]

                                                            FINANCIAL HIGHLIGHTS

The following table describes the Fund's performance for the fiscal periods
indicated. "Total return" shows how much your investment in the Fund would have
increased (or decreased) during each period, assuming you had reinvested all
dividends and distributions. These figures have been audited by KPMG LLP, the
Fund's independent auditor, whose report, along with the Fund's financial
statements, are included in the annual report, which is available upon request.

Per share data for a share of capital stock and selected information for each
period are as follows:


<TABLE>
      FINANCIAL HIGHLIGHTS                                   CLASS A
                                                    Year Ended September 30,
                                               '00     '99     '98     '97     '96
      <S>                                  <C><C>     <C>     <C>     <C>     <C>
      Net Asset Value, Beginning of
       Period                              $   17.88   16.50   16.40   15.53   14.79
      INCOME FROM INVESTMENT OPERATIONS:
      Net Investment Income                      .31     .31     .33     .39     .34
      Net Gains or Losses on Securities
       (both realized and unrealized)           2.55    2.30    1.40    2.02    1.59
      Total from Investment Operations          2.86    2.61    1.73    2.41    1.93
      LESS DISTRIBUTIONS:
      Dividends from Net Investment
       Income                                   (.30)   (.31)   (.33)   (.39)   (.34)
      Distributions from Net Realized
       Gains                                    (.71)   (.92)  (1.30)  (1.15)   (.85)
      Total Distributions                      (1.01)  (1.23)  (1.63)  (1.54)  (1.19)
      Net Asset Value, End of Period       $   19.73   17.88   16.50   16.40   15.53
      Total Return (a)                     %   16.22   16.08   11.31   16.66   13.72
      Net Assets, End of Period
       (in thousands)                      $  77,964  73,613  68,157  62,914  54,848
      Ratio of Expenses to Average Daily
       Net Assets (b)                      %    1.11    1.10    1.19    1.25    1.26
      Ratio of Net Investment Income to
       Average Daily Net Assets (b)        %    1.58    1.77    1.98    2.53    2.28
      Portfolio Turnover Rate (excluding
       short-term securities)              %   132.0   100.8   139.8   141.4   140.5
</TABLE>



 (a)  Total return figures are based on a share outstanding throughout
      the period and assume reinvestment of distributions at net asset
      value. Total return figures do not reflect the impact of front-end
      or contingent deferred sales charges.
 (b)  The Fund's Adviser voluntarily waived or absorbed $95,590 in
      expenses for the year ended September 30, 2000. If the Fund had
      been charged with these expenses, the ratio of expenses to average
      daily net assets would have been 1.20%, and the ratio of net
      investment income (loss) to average daily assets would have been
      1.49% for Class A shares.



8             FINANCIAL HIGHLIGHTS
<PAGE>


<TABLE>
      FINANCIAL HIGHLIGHTS                                    CLASS B
                                                     Year Ended September 30,
                                               '00     '99     '98     '97       '96
      <S>                                  <C><C>     <C>     <C>     <C>       <C>
      Net Asset Value, Beginning of
       Period                              $   17.79   16.43   16.34   15.47     14.74
      INCOME FROM INVESTMENT OPERATIONS:
      Net Investment Income                      .17     .19     .22     .30       .27
      Net Gains or Losses on Securities
       (both realized and unrealized)           2.53    2.28    1.39    2.02      1.56
      Total from Investment Operations          2.70    2.47    1.61    2.32      1.83
      LESS DISTRIBUTIONS:
      Dividends from Net Investment
       Income                                   (.17)   (.19)   (.22)   (.30)     (.25)
      Distributions from Net Realized
       Gains                                    (.71)   (.92)  (1.30)  (1.15)     (.85)
      Total Distributions                       (.88)  (1.11)  (1.52)  (1.45)    (1.10)
      Net Asset Value, End of Period       $   19.61   17.79   16.43   16.34     15.47

      Total Return (a)                     %   15.51   15.31   10.55   16.02     13.07
      Net Assets, End of Period
       (in thousands)                      $  26,838  24,420  17,751  12,556     7,860
      Ratio of Expenses to Average Daily
       Net Assets (b)                      %    1.86    1.82    1.84    1.90      1.90
      Ratio of Net Investment Income to
       Average Daily Net Assets (b)        %     .83    1.06    1.32    1.89      1.67
      Portfolio Turnover Rate (excluding
       short-term securities)              %   132.0   100.8   139.8   141.4     140.5
</TABLE>



 (a)  Total return figures are based on a share outstanding throughout
      the period and assume reinvestment of distributions at net asset
      value. Total return figures do not reflect the impact of front-end
      or contingent deferred sales charges.
 (b)  The Fund's Adviser voluntarily waived or absorbed $95,590 in
      expenses for the year ended September 30, 2000. If the Fund had
      been charged with these expenses, the ratio of expenses to average
      daily net assets would have been 1.95%, and the ratio of net
      investment income (loss) to average daily net assets would have
      been .72% for Class B shares.



                                                  FINANCIAL HIGHLIGHTS         9
<PAGE>


<TABLE>
      FINANCIAL HIGHLIGHTS                                       CLASS C
                                                        Year Ended September 30,
                                               '00     '99     '98     '97         '96
      <S>                                  <C><C>     <C>     <C>     <C>       <C>
      Net Asset Value, Beginning of
       Period                              $   17.69   16.34   16.27   15.43        14.74
      INCOME FROM INVESTMENT OPERATIONS:
      Net Investment Income                      .17     .19     .24     .28          .28
      Net Gains or Losses on Securities
       (both realized and unrealized)           2.51    2.27    1.36    2.01         1.52
      Total from Investment Operations          2.68    2.46    1.60    2.29         1.80
      LESS DISTRIBUTIONS:
      Dividends from Net Investment
       Income                                   (.17)   (.19)   (.23)   (.30)        (.26)
      Distributions from Net Realized
       Gains                                    (.71)   (.92)  (1.30)  (1.15)        (.85)
      Total Distributions                       (.88)  (1.11)  (1.53)  (1.45)       (1.11)
      Net Asset Value, End of Period       $   19.49   17.69   16.34   16.27        15.43

      Total Return (a)                     %   15.38   15.29   10.57   15.87        12.87
      Net Assets, End of Period
       (in thousands)                      $   5,928   5,659   4,062   1,926        1,351
      Ratio of Expenses to Average Daily
       Net Assets (b)                      %    1.86    1.82    1.83    1.90         1.90
      Ratio of Net Investment Income to
       Average Daily Net Assets (b)        %     .83    1.07    1.31    1.88         1.73
      Portfolio Turnover Rate (excluding
       short-term securities)              %   132.0   100.8   139.8   141.4        140.5
</TABLE>



 (a)  Total return figures are based on a share outstanding throughout
      the period and assume reinvestment of distributions at net asset
      value. Total return figures do not reflect the impact of front-end
      or contingent deferred sales charges. For periods less than one
      year, total return presented has not been annualized.
 (b)  The Fund's Adviser voluntarily waived or absorbed $95,590 in
      expenses for the year ended September 30, 2000. If the Fund had
      been charged with these expenses, the ratio of expenses to average
      daily net assets would have been 1.95%, and the ratio of net
      investment income (loss) to average daily net assets would have
      been .72% for Class C shares.



10             FINANCIAL HIGHLIGHTS
<PAGE>
                                                                       [GRAPHIC]

                                                           INVESTING IN THE FUND

--------------------
FOR YOUR INFORMATION
--------------------
One of the advantages of investing in mutual funds is continuous professional
management of your investment. Skilled, experienced professionals manage the
Fund's assets.
Thomas A. Gunderson graduated with a bachelor of arts degree from St. Olaf
College with a major in economics. He later earned his MBA in finance from the
University of Michigan. Mr. Gunderson is a Chartered Financial Analyst.
Wayne R. Schmidt received a bachelor of science degree from Cornell University
and an MBA in finance from the University of Minnesota. He also earned the
Fellow, Life Management Institute (FLMI) designation and is a Chartered
Financial Analyst.

MANAGING THE FUND

The Fund's investment adviser is Advantus Capital Management, Inc. (Advantus
Capital), 400 Robert Street North, St. Paul, Minnesota 55101. Since its
inception in 1994, Advantus Capital has provided investment advisory services
for the Fund and other Advantus Funds, and has managed investment portfolios for
various private accounts. With more than $14 billion of assets under management,
Advantus Capital manages the Fund's investments and provides all necessary
office space, equipment and personnel for servicing the Fund's investments.
Advantus Capital is a wholly-owned subsidiary of Minnesota Life Insurance
Company (Minnesota Life), which was organized in 1880 and has assets on a
consolidated basis of more than $16.5 billion. Minnesota Life is a third-tier
subsidiary of a mutual insurance holding company called Minnesota Mutual
Companies, Inc. Personnel of Advantus Capital also manage Minnesota Life's
investment portfolio. In addition, Minnesota Life, through its Advantus
Shareholder Services division, serves as shareholder and administrative services
agent to the Fund.


The Fund pays Advantus Capital an advisory fee, which is calculated on an annual
basis equal to 0.50% of the first $1 billion of average daily net assets, 0.48%
of the next $1 billion of assets, and 0.46% of all assets in excess of
$2 billion. Aggregate advisory fees paid to Advantus Capital during the fiscal
year ended September 30, 2000, as a percentage of the Fund's average net assets,
equaled .558%.


Advantus Capital, under its investment advisory agreement with the Fund, has
agreed to absorb all Fund costs and expenses which exceed 1.12% of Class A
average daily net assets, 1.87% of Class B average daily net assets, and 1.87%
of Class C average daily net assets through the fiscal year of the Fund ending
September 30, 2001.


Thomas A. Gunderson, Vice President and Portfolio Manager of Advantus Capital,
has served as the lead portfolio manager of the Fund since January 1989. Prior
to 1994, Mr. Gunderson served as Vice President and Portfolio Manager with
Advantus Capital's predecessor, MIMLIC Asset Management Company. Wayne R.
Schmidt, Vice President and Portfolio Manager of Advantus Capital, has served as
a portfolio manager of the fixed income portion of the Fund since
February 1999. Mr. Schmidt has also served as an investment officer of Advantus
Capital since 1994.


                                                INVESTING IN THE FUND         11
<PAGE>
INVESTMENT OBJECTIVE, POLICIES AND PRACTICES

The Fund seeks the most favorable total return - from capital appreciation,
interest and dividends - consistent with preservation of capital.


The Fund's portfolio may, at any time, consist of equity securities,
investment-grade debt securities, mortgage-related securities, money market
securities or any combination of these securities. The Fund's portfolio will be
allocated among these asset classes based on Advantus Capital's risk/return
analysis as to current economic or market conditions, trends in investment
yields and investment rates, changes in fiscal or monetary policies and other
relevant factors. If Advantus Capital believes total return from debt securities
will exceed total return from equity securities, the Fund will invest mostly in
debt securities. On the other hand, if Advantus Capital believes total return
from equity securities will exceed total return from long or short-term debt
securities, the Fund will invest mostly in equity securities. Further, if
Advantus Capital believes interest rates will rise, the Fund may invest mostly
in short-term money market securities. As a result, Advantus Capital has more
discretion to invest in a variety of securities than most mutual funds. Under
most circumstances, the Fund anticipates investing approximately 45% to 75% of
its total assets in equity securities, approximately 20% to 55% of its total
assets in long-term and short-term debt securities and mortgage-related
securities, and approximately 0% to 25% of its total assets in money market
securities. (For purposes of the investment percentages described in the
preceding sentence, collateral received in connection with securities lending
shall not be considered Fund assets.) However, Advantus Capital may allocate
assets beyond these ranges in order to attempt to increase return or reduce
risk.


              THE ADVANTUS SPECTRUM FUND

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<S>  <C>           <C>
45%      Equities  75%
20%  Fixed Income  55%
0%   Money Market  25%
</TABLE>

Min Max

            Typical ranges for equity, fixed income and money market
            investments.

The Fund invests primarily in common stocks but may also invest in preferred
stocks and securities convertible into equity securities. In selecting equity
securities, Advantus Capital looks first to an investment's potential for
capital appreciation and then to its income potential. The Fund generally
invests in companies with strong long-term growth potential. However, the Fund
may also invest in equity securities of companies that Advantus Capital believes
are temporarily undervalued or show promise of improved results due to new
management, products, markets or other factors.

12             INVESTING IN THE FUND
<PAGE>
--------------------
FOR YOUR INFORMATION
--------------------
The market prices of bonds are generally less volatile than stocks, although the
market prices of bonds may be adversely affected during periods of rising
interest rates. The values of fixed income securities generally rise and fall
inversely with changes in prevailing interest rates. Duration is the most
meaningful indicator of a fixed income security's sensitivity to interest rate
changes.

The Fund also may invest in long, intermediate and short-term investment-grade
debt securities. These debt securities include U.S. Government and agency debt
securities and investment-grade debt obligations of U.S. banks, savings and loan
associations, savings banks with total assets of at least $2 billion, corporate
debt obligations, notes and other investment-grade debt securities of any
maturity and investment-grade commercial paper issued by U.S. corporations or
affiliated foreign corporations.


The Fund may invest in government and non-governmental mortgage-related
securities, including collateralized mortgage obligations (CMOs) and stripped
mortgage-backed securities, and may purchase securities on a when-issued or
forward commitment basis. CMOs are debt obligations typically issued by either a
government agency or a private special-purpose entity that are collateralized by
residential or commercial mortgage loans or pools of residential mortgage loans.
Stripped mortgage-backed securities represent ownership interests in a pool of
mortgages. Securities purchased on a when-issued or delayed delivery basis
require the Fund to purchase securities on a later date with the price fixed at
the time of the purchase commitment.


In addition, the Fund may invest in money market securities that mature within
one year from the date of purchase.

As a rule of thumb, a portfolio of debt and mortgage-related securities
generally experiences a decrease in principal value with an increase in interest
rates. The extent of the decrease in principal value may be affected by the
Fund's duration of its portfolio of debt and mortgage-related securities.
Duration measures the relative price sensitivity of a security to changes in
interest rates. "Effective" duration takes into consideration the likelihood
that a security will be called, or prepaid, prior to maturity given current
market interest rates. Typically, a security with a longer duration is more
price sensitive than a security with a shorter duration. In general, a portfolio
of debt and mortgage-related securities experiences a percentage decrease in
principal value equal to its effective duration for each 1% increase in interest
rates. For example, if the Fund holds a portfolio of securities with an
effective duration of five years and interest rates rise 1%, the principal value
of such securities could be expected to decrease by approximately 5%. The Fund
expects that under normal circumstances the effective duration of its debt and
mortgage-related securities portfolio will range from one to seven years.


In addition, the Fund may invest lesser portions of its assets in convertible
and non-convertible investment-grade and non-investment grade corporate debt
obligations and mortgage-related securities, securities of other mutual funds,
restricted and illiquid securities, foreign securities, warrants, stock index
futures contracts, options (the Fund may purchase, sell and write put and call
options), interest rate and other bond futures contracts, asset-backed
securities, stripped asset-backed securities, when-issued or forward commitment
transactions and mortgage dollar rolls, direct mortgage investments, index
depositary receipts and repurchase and reverse repurchase agreement
transactions. To generate additional income, the Fund may lend securities
representing one-third of the value of its total assets to broker-dealers, banks
and other institutions.


In an attempt to respond to adverse market, economic, political or other
conditions, the Fund may invest for temporary defensive purposes in various
short-term cash and cash equivalent items. When investing for temporary
defensive purposes, the Fund may not always achieve its investment objective.

You can find descriptions of these securities in the Statement of Additional
Information.

                                                INVESTING IN THE FUND         13
<PAGE>
--------------------
FOR YOUR INFORMATION
--------------------
In order to make informed decisions, investors must be aware of both the risks
and rewards associated with investing. Not only should you understand the risks
associated with your investments, but you must be comfortable with them as well.
Risks are an inherent part of investing, and your investment in this Fund is
subject to different types and varying degrees of risk.

DEFINING RISKS

Investment in the Fund involves risks. The Fund's yield and price are not
guaranteed, and the value of your investment in the Fund will go up or down. The
value of your investment in the Fund may be affected by the following risks:

    - FUND RISK - is the risk that Fund performance may not meet or exceed that
      of the market as a whole. The performance of the Fund will depend on
      Advantus Capital's ability to select securities suited to achieve the
      Fund's investment objective and judgment of economic and market policies,
      trends in investment yields and monetary policy. Due to its active
      management, the Fund could underperform other mutual funds with similar
      investment objectives or the market generally.

    - MARKET RISK - is the risk that equity and debt securities are subject to
      adverse trends in equity and debt markets. Securities are subject to price
      movements due to changes in general economic conditions, the level of
      prevailing interest rates or investor perceptions of the market. In
      addition, prices are affected by the outlook for overall corporate
      profitability. Market prices of equity securities are generally more
      volatile than debt securities. This may cause a security to be worth less
      than the price originally paid for it, or less than it was worth at an
      earlier time. Market risk may affect a single issuer or the market as a
      whole.

    - COMPANY RISK - is the risk that individual securities may perform
      differently than the overall market. This may be a result of specific
      factors such as changes in corporate profitability due to the success or
      failure of specific products or management strategies, or it may be due to
      changes in investor perceptions regarding a company.

    - SECTOR RISK - is the risk that the securities of companies within specific
      industries or sectors of the economy can periodically perform differently
      than the overall market. This may be due to changes in such things as the
      regulatory or competitive environment or to changes in investor
      perceptions regarding the company.

    - SECURITIES LENDING RISK - is the risk that the Fund may experience a delay
      in the recovery of loaned securities, or even the loss of rights in the
      collateral deposited by the borrower if the borrower should fail
      financially. To reduce these risks, the Fund enters into loan arrangements
      only with institutions that Advantus Capital has determined are
      creditworthy.

    - INTEREST RATE RISK - is the risk that the value of a debt security or
      fixed income obligation will decline due to changes in market interest
      rates. Generally, when interest rates rise, the value of a debt security
      or fixed income obligation decreases. Conversely, when interest rates
      decline, the value of a debt security or fixed income obligation
      increases. Longer-term debt securities and fixed income obligations are
      generally more sensitive to interest rate changes.

    - INCOME RISK - is the risk that the Fund's income may decrease due to
      falling interest rates.

    - CREDIT RISK - is the risk that an issuer of a debt security or fixed
      income obligation will not make payments on the security when due, or that
      the other party to a contract will default on its obligation. There is
      also the risk that an issuer could suffer adverse changes in financial
      condition that could lower the credit quality of a security. This could
      lead to greater volatility in the price of the security and in shares of
      the Fund. Also, a change in the quality rating of a debt security or fixed
      income obligation can

14             INVESTING IN THE FUND
<PAGE>
      affect the security's or obligation's liquidity and make it more difficult
      to sell. The Fund attempts to minimize credit risk by investing in debt
      securities and other fixed income obligations considered at least
      investment grade at the time of purchase. However, all of these securities
      and obligations, especially those in the lower investment grade rating
      categories, have credit risk. In adverse economic and other circumstances,
      issuers of these lower rated securities and obligations are more likely to
      have difficulty making principal and interest payments than issuers of
      higher rated securities and obligations. If the Fund purchases unrated
      securities and obligations, it will depend on Advantus Capital's analysis
      of credit risk more heavily than usual.

    - CALL RISK - is the risk that securities with high interest rates will be
      prepaid by the issuer prior to maturity, particularly during periods of
      falling interest rates. In general, an issuer will call its debt
      securities if they can be refinanced by issuing new securities with a
      lower interest rate. The Fund is subject to the possibility that during
      periods of falling interest rates, an issuer will call its securities. As
      a result, the Fund would have to reinvest the proceeds in other securities
      with generally lower interest rates, resulting in a decline in the Fund's
      income.

    - PREPAYMENT RISK - is the risk that falling interest rates could cause
      prepayments of mortgage-related securities to occur more quickly than
      expected. This occurs because, as interest rates fall, more property
      owners refinance the mortgages underlying these securities. The Fund must
      reinvest the prepayments at a time when interest rates on new mortgage
      investments are falling, reducing the income of the Fund. In addition,
      when interest rates fall, prices on mortgage-related securities may not
      rise as much as for other types of comparable debt securities because
      investors may anticipate an increase in mortgage prepayments.

    - EXTENSION RISK - is the risk that rising interest rates could cause
      property owners to prepay their mortgages more slowly than expected,
      resulting in slower prepayments of mortgage-related securities. This
      would, in effect, convert a short- or medium-duration mortgage-related
      security into a longer-duration security, increasing its sensitivity to
      interest rate changes and causing its price to decline.

You can find information about other risks in the Statement of Additional
Information.

                                                INVESTING IN THE FUND         15
<PAGE>
                                                                       [GRAPHIC]

                                                       BUYING AND SELLING SHARES

---------------
REFERENCE POINT
---------------
All Advantus Funds, except the Advantus Money Market Fund and Advantus Real
Estate Securities Fund, offer three classes of shares, Class A, Class B, and
Class C. See "The Fund - Summary - Fees and Expenses."

CHOOSING A SHARE CLASS

You may purchase Class A, Class B or Class C shares of the Fund. Your decision
to purchase a particular class will depend on a number of factors such as the
amount you wish to invest, the amount of time you wish to hold on to your
investment and whether you intend to make additional investments.

    CLASS A SHARES. If you invest in Class A shares you will generally pay an
    initial sales charge. However, you will not be assessed an initial sales
    charge for purchases of Class A shares of $1 million or more, but a deferred
    sales charge will be imposed if you sell such shares within one year after
    the date of purchase. There are several ways to reduce or waive these sales
    charges that are described in "Reducing Sales Charges" below. Class A shares
    generally have lower annual operating expenses than Class B and Class C
    shares.

    CLASS B SHARES. If you invest in Class B shares, you will not pay an initial
    sales charge. However, if you wish to sell your shares within six years from
    the date of your purchase, you will pay a deferred sales charge. If you
    maintain your Class B shares for a certain period of time, your Class B
    shares will automatically convert to Class A shares in the manner described
    in "Sales and Distribution Charges" below. Class B shares generally have
    higher annual operating expenses than Class A shares.

    CLASS C SHARES. If you invest in Class C shares, you will not pay an initial
    sales charge. Unlike Class B shares, you will not pay a deferred sales
    charge if you wish to sell your shares. Class C shares generally have higher
    annual operating expenses than Class A shares. Class C shares will
    automatically convert to Class A shares in the manner described in "Sales
    and Distribution Charges" below, but you must hold on to such shares for a
    longer period of time than Class B shares prior to conversion.

If you qualify for a reduction or waiver of the sales charge you should purchase
Class A shares. If you expect to hold shares for a short period of time you may
prefer to purchase Class C shares since these shares may be purchased and sold
without any initial or deferred sales charge. If you expect to hold shares
longer you may prefer to purchase Class B shares since these shares convert to
Class A shares sooner than Class C shares.

SALES AND DISTRIBUTION CHARGES


As an investor, you pay certain fees and expenses in connection with the Fund.
Sales charges, whether initial or contingent deferred, are paid from your
account. Annual fund operating expenses (including distribution and shareholder
servicing fees) are paid out of Fund assets, which affects the Fund's share
price.


16             BUYING AND SELLING SHARES
<PAGE>
CLASS A SHARES. If you purchase Class A shares, you will generally pay an
initial sales charge. Class A sales charges are calculated as follows:

<TABLE>
<CAPTION>
                                                       SALES CHARGE AS A PERCENTAGE OF:
    Value of Your Total Investment                    Net Offering Price  Amount Invested
    <S>                                            <C><C>                 <C>
    Less than $50,000                              %             5.5              5.82
    At least $50,000 but less than $100,000                      4.5              4.71
    At least $100,000 but less than $250,000                     3.5              3.63
    At least $250,000 but less than $500,000                     2.5              2.56
    At least $500,000 but less than $1,000,000                   2.0              2.04
    At least $1,000,000 and over(1)                                0                 0
</TABLE>

 (1)  You will not be assessed an initial sales charge for purchases of
      Class A shares of at least $1 million, but a contingent deferred
      sales charge of 1.00% will be imposed if you sell such shares
      within one year after the date of purchase.

The sales charge applicable to your initial investment in the Fund depends on
the offering price of your investment. The sales charge applicable to subsequent
investments, however, depends on the offering price of that investment plus the
current net asset value of your previous investments in the Fund. For example,
if you make an initial investment with an offering price of $40,000 you will pay
a sales charge equal to 5.5% of your $40,000 investment, but if you already own
shares with a current net asset value of $40,000 and you invest in additional
shares with an offering price of $10,000 you will pay a sales charge equal to
4.5% of the additional $10,000 since your total investment in the Fund would
then be $50,000.

Class A shares are also subject to a shareholder servicing fee (Rule 12b-1 fee).
The Fund has adopted a shareholder servicing plan that allows the Fund to pay
fees for services provided to shareholders. Because these fees are paid out of
the Fund's assets continuously, over time these fees will increase the cost of
your investment and may cost you more than paying other types of sales charges.
As a percentage of average daily net assets attributable to Class A shares of
the Fund, the maximum Rule 12b-1 fee is 0.25%.

CLASS B SHARES. If you wish to sell your Class B shares within six years from
the date of your purchase, you will pay a contingent deferred sales charge
(CDSC). The amount of the CDSC on Class B shares depends on the number of years
since your purchase was made, the amount of shares originally purchased and the
dollar amount being sold. The CDSC is based on the net asset value (NAV) of the
shares being sold at the time of your purchase or your sale of such shares,
whichever is lower. No CDSC is charged on shares acquired through reinvestment
of dividends or capital gains distributions, or on shares held longer than the
applicable CDSC period. Class B CDSC is calculated as follows:

                                            BUYING AND SELLING SHARES         17
<PAGE>

<TABLE>
<CAPTION>
                                                             CDSC APPLICABLE IN
                                                           YEAR FOLLOWING DATE OF
                                                                  PURCHASE
      AMOUNT OF SHARES PURCHASED                         1    2    3    4    5    6
      <S>                                            <C><C>  <C>  <C>  <C>  <C>  <C>
      Less than $50,000                              %  5.0  4.5  3.5  2.5  1.5  1.5
      At least $50,000 but less than $100,000           4.5  3.5  2.5  1.5  1.5    0
      At least $100,000 but less than $250,000          3.5  2.5  1.5  1.5    0    0
      At least $250,000 but less than $500,000          2.5  1.5  1.5    0    0    0
      At least $500,000 but less than $1,000,000        1.5  1.5    0    0    0    0
</TABLE>

Purchase orders for Class B shares of $1 million or more will be treated as
orders for Class A shares or declined.

To determine if a CDSC is payable for any redemption of Class B shares, CDSC
calculation will be determined in a manner that results in the lowest CDSC
charged.

Class B shares are also subject to a Rule 12b-1 fee that is payable at an annual
rate of 1.00% of average daily net assets attributable to Class B shares of the
Fund.

The Fund uses the proceeds from the CDSC to pay underwriting fees and expenses.
The Fund uses the proceeds from Rule 12b-1 fees to pay expenses related to
distribution and shareholder services to the Fund. As a result, the combination
of the CDSC and Rule 12b-1 fees allows the Fund to sell Class B shares without
any initial sales charge. Because these fees are paid out of the Fund's assets
continuously, over time these fees will increase the cost of your investment and
may cost you more than paying other types of sales charges.

Class B shares will automatically convert to Class A shares on a specified date
following your date of purchase. Thereafter, the Class A shares you receive upon
conversion will not be subject to the higher annual operating expenses assessed
on Class B shares. The conversion will be based on the relative NAVs of the two
classes. For a description of NAV, see "Buying Shares" below. The date of
conversion is based on the amount of shares purchased and is determined as
described in the following table:

<TABLE>
<CAPTION>
                                                          CONVERSION DATE FOLLOWING EXPIRATION
      AMOUNT OF SHARES PURCHASED                           OF PERIOD AFTER DATE OF PURCHASE*
      <S>                                                 <C>
      Less than $50,000                                                       84 months
      At least $50,000 but less than $100,000                                 76 months
      At least $100,000 but less than $250,000                                60 months
      At least $250,000 but less than $500,000                                44 months
      At least $500,000 but less than $1,000,000                              28 months
</TABLE>

   *  Conversion will occur on the fifteenth day of the month
      immediately following the termination of the applicable period. If
      the fifteenth day falls on a Saturday, Sunday or a national
      holiday, then conversion will occur on the most recent business
      day.

18             BUYING AND SELLING SHARES
<PAGE>
CLASS C SHARES. Class C shares are sold without an initial sales charge or CDSC.

Class C shares are subject to a Rule 12b-1 fee that is payable at an annual rate
of 1.00% of average daily net assets attributable to Class C shares of the Fund.
The Fund uses the proceeds from Rule 12b-1 fees to pay expenses related to
distribution and shareholder services to the Fund. Because these fees are paid
out of the Fund's assets continuously, over time these fees will increase the
cost of your investment and may cost you more than paying other types of sales
charges.

Purchase orders for Class C shares of $1 million or more will be treated as
orders for Class A shares or declined.

Class C shares will automatically convert to Class A shares on a specified date
following your date of purchase. Thereafter, the Class A shares you receive upon
conversion will not be subject to the higher annual operating expenses assessed
on Class C shares. The conversion will be based on the relative NAVs of the two
classes. Generally, Class C shares must be held longer than Class B shares
before such shares automatically convert to Class A shares. Like Class B shares,
the date of conversion is based on the amount of shares purchased and is
determined as described in the following table:

<TABLE>
<CAPTION>
                                                          CONVERSION DATE FOLLOWING EXPIRATION
      AMOUNT OF SHARES PURCHASED                           OF PERIOD AFTER DATE OF PURCHASE*
      <S>                                                 <C>
      Less than $50,000                                                       96 months
      At least $50,000 but less than $100,000                                 88 months
      At least $100,000 but less than $250,000                                72 months
      At least $250,000 but less than $500,000                                56 months
      At least $500,000 but less than $1,000,000                              40 months
</TABLE>

   *  Conversion will occur on the fifteenth day of the month
      immediately following the termination of the applicable period. If
      the fifteenth day falls on a Saturday, Sunday or a national
      holiday, then conversion will occur on the most recent business
      day.

Since the longer holding period for Class C shares enables the Fund to charge
the higher Rule 12b-1 fee for a longer period, the Fund is able to offer
Class C shares without an initial sales charge or CDSC.

REDUCING SALES CHARGES

PURCHASES OF SHARES. There are several ways you may reduce sales charges on your
purchase of Fund shares.

    - LETTER OF INTENT. Lets you purchase Class A shares of the Fund over a 13
      month period and receive the same sales charge as if all shares had been
      purchased at once.

    - COMBINATION PRIVILEGE. Lets you add the value of all shares you already
      own (Class A, Class B or Class C) for purposes of calculating the sales
      charge.

    - FAMILY AND TRUST PRIVILEGE. Lets you combine purchases of shares of any
      class made by your spouse, children and/or family trust for purposes of
      calculating the sales charge. If you wish to use this privilege, you must
      indicate on your account application that you are entitled to the reduced
      sales charge.

                                            BUYING AND SELLING SHARES         19
<PAGE>
    - GROUP PURCHASES. Lets you purchase shares with others as a group at a
      reduced sales charge applicable to the group as a whole. A purchase group
      must meet criteria established by Ascend Financial Services, Inc. (Ascend
      Financial), the Fund's underwriter.

    - AUTOMATIC INVESTMENT PLAN. Lets you automatically invest a specified
      amount in the Fund each month, which may result in a lower average cost
      per share through the principle of "dollar cost averaging." The automatic
      investment plan will not always result in a lower cost per share, nor will
      it alone reduce your sales charge.

For more information on any of these plans, please contact Advantus Shareholder
Services by telephone at (800) 665-6005.

WAIVER OF SALES CHARGE ON CLASS A SHARE PURCHASES. Class A shares may be offered
without any sales charge to the following individuals and institutions:

    - officers, directors, employees, sales representatives and retirees of the
      Fund, Advantus Capital, Ascend Financial, Minnesota Life and affiliated
      companies of Minnesota Life, and their respective spouses, siblings,
      direct ancestors or direct descendants

    - Minnesota Life and its affiliated companies

    - trusts, pension or benefit plans sponsored by or on behalf of Advantus
      Capital, Ascend Financial, Minnesota Life and affiliated companies of
      Minnesota Life

    - advisory clients of Advantus Capital or other affiliated companies of
      Minnesota Life

    - employees of sales representatives of Advantus Capital, Minnesota Life or
      affiliated companies of Minnesota Life

    - certain accounts as to which a bank or broker-dealer charges an account
      management fee, provided that the bank or broker-dealer has an agreement
      with Ascend Financial

    - certain accounts sold by registered investment advisers

WAIVER OF SALES CHARGES ON CLASS B SHARE SALES. The CDSC for Class B shares will
generally be waived in the following cases:

    - upon the automatic conversion of Class B shares to Class A shares;

    - upon the Fund's decision to liquidate accounts with less than the minimum
      account size; and

    - upon a shareholder's death or disability.

For more information on these waivers, please see the Statement of Additional
Information or contact Advantus Shareholder Services or Ascend Financial.

BUYING SHARES

You may purchase shares of the Fund on any day the New York Stock Exchange
(NYSE) is open for business. The price for Fund shares is equal to the Fund's
NAV plus any applicable sales charge. NAV is generally calculated as of the
close of normal trading on the NYSE (typically 3:00 p.m. Central time). However,
NAV is not calculated on (a) days in which

20             BUYING AND SELLING SHARES
<PAGE>
changes in the Fund's portfolio do not materially change the Fund's NAV,
(b) days on which no Fund shares are purchased or sold, and (c) customary
national business holidays on which the NYSE is closed for trading.

The Fund's NAV for each class is equal to the Fund's total investments
attributable to such class less liabilities attributable to such class divided
by the number of shares of such class. To determine NAV, the Fund generally
values the Fund's investments based on market quotations. If market quotations
are not available for certain Fund investments, the investments are valued based
on the fair value of the investments as determined in good faith by the Fund's
board of directors. Debt securities may be valued based on calculations
furnished to the Fund by a pricing service or by brokers who make a market in
such securities.

Your purchase order will be priced at the next NAV calculated after your
purchase order is received by the Fund's transfer agent plus the applicable
initial sales charge (for Class A shares). If your order is received after the
close of normal trading on the NYSE, your order will be priced at the NAV
calculated on the next day the NYSE is open for trading.


The Fund may reject any purchase order when the Fund determines it would not be
in the best interests of the Fund or its shareholders.


You may purchase shares of the Fund in any of the following ways:

    BY CHECK.  New investors may purchase shares of the Fund by sending to the
               Fund's transfer agent, PFPC Inc., a completed account application
               and a check payable to the Fund at Advantus Funds Group,
               P.O. Box 9767, Providence, Rhode Island 02940-5059. If you wish
               to purchase additional shares, please send a check payable to the
               Fund at the above address (please be sure to write your account
               number on your check). Purchase orders may also be submitted
               through Ascend Financial or other authorized broker-dealers.

    BY WIRE.   New investors may also purchase shares of the Fund by Federal
               Reserve or bank wire. You should first complete an account
               application and send it to Advantus Funds Group, P.O. Box 9767,
               Providence, Rhode Island 02940-5059. Prior to wiring any funds,
               you must contact Advantus Shareholder Services at (800) 665-6005
               for wire instructions. Wire purchases normally take two or more
               hours to complete. To be accepted the same day, wire purchases
               must be received by the close of normal trading on the NYSE.

    BY INTERNET. Existing Advantus Funds shareholders may also purchase shares
                 via the Internet once they have established on-line
                 authorization. Please contact Advantus Shareholder Services at
                 (800) 665-6005 for more information.

All investments must be in U.S. dollars. Cash, money orders and credit card and
third-party checks are not accepted. If a check does not clear your bank, the
Fund may cancel the purchase.

                                            BUYING AND SELLING SHARES         21
<PAGE>
---------------
REFERENCE POINT
---------------
Please see "Telephone Transactions" or "Internet Transactions" for instructions
on how to sell shares by telephone or Internet.
See "Selling Shares - Signature Guarantee" below to determine whether your sale
will require a signature guarantee.

SELLING SHARES

GENERAL. You may sell your shares at any time. You may make such requests by
contacting the Fund directly by mail or by telephone or by Internet. Requests by
mail should be sent to Advantus Funds Group, P.O. Box 9767, Providence, Rhode
Island 02940-5059. You may also sell your shares by sending a facsimile request
to Advantus Funds Group at (508) 871-3560 if no signature guarantee is required.

Shares will be sold at the NAV next calculated after your sale order is received
by the Fund's transfer agent less any applicable CDSC (for Class A shares
subject to a CDSC and for Class B shares). Class A shares not otherwise subject
to a CDSC and Class C shares may be sold without any charge.

The Fund will forward the sales proceeds to you as soon as possible, but no
later than seven days after the Fund has received an order. If you recently
purchased your shares by check sales proceeds may not be available until your
check has cleared (which may take up to 14 days). If you designate a bank
account with the Fund and wish to sell shares with a value of at least $500,
then the proceeds can be wired directly to your bank account. If you elect to
have proceeds sent by wire transfer, the current $5.00 wire charge will be
deducted from your Fund account.


The amount you receive may be more or less than the original purchase price for
your shares.


SYSTEMATIC WITHDRAWAL PLAN. If you have an account with a value of at least
$5,000, you may establish a Systematic Withdrawal Plan which allows you to sell
a portion of your shares for a fixed or variable amount over a period of time.
Withdrawal payments for Class A shares purchased in amounts of $1 million or
more and for Class B shares may also be subject to a CDSC. As a result, you
should carefully consider whether a Systematic Withdrawal Plan is appropriate.
More information about the Systematic Withdrawal Plan is provided in the
Statement of Additional Information.


SIGNATURE GUARANTEE. In order to protect the Fund and shareholders against
fraudulent requests, a medallion signature guarantee may be required in certain
cases. No signature guarantee is required if the sale proceeds are less than
$50,000 and are to be paid to the registered holder of the account at the
address of record for that account. A medallion signature guarantee is required
if:


    - sale proceeds are $50,000 or more

    - sale proceeds will be paid to someone other than the registered
      shareholder

    - sale proceeds will be mailed to an address other than the registered
      shareholder's address of record

    - instructions were received by the Fund within 30 days before the sale
      order to change the registered shareholder's address or bank wire
      instructions

    - shares are to be transferred to another Fund account holder

    - the request is not made by a pre-authorized trustee for a plan, trust or
      other tax-exempt organization

22             BUYING AND SELLING SHARES
<PAGE>

---------------
REFERENCE POINT
---------------
Please see "Telephone Transactions" or "Internet Transactions" for instructions
on how to exchange shares by telephone or Internet.

The Fund reserves the right to require signature guarantees on all sales. If
your sale order requires a signature guarantee, the signature guarantee must be
an original (not a copy) and must be a medallion signature guarantee provided by
a domestic bank or trust company, broker, dealer, clearing agency, savings
association, or other financial institution which participates in a medallion
program recognized by the Securities Transfer Association. The three recognized
medallion programs are:



    - Securities Transfer Agents Medallion Program (STAMP)



    - Stock Exchanges Medallion Program (SEMP)



    - New York Stock Exchange, Inc. Medallion Signature Program (NYSE MSP)



Signature guarantees from financial institutions which are not participants in a
recognized medallion program will not be accepted.


REINSTATEMENT PRIVILEGE. If you sell shares of the Fund, you have a one-time
privilege within 90 days after the sale to use some or all of the sale proceeds
to purchase shares of any of the Advantus Multiple Class Funds or Advantus Real
Estate Securities Fund, Inc. (Real Estate Fund) at no sales charge. Following
your sale of Class A or Class B shares, you will be entitled to purchase only
Class A shares under this reinstatement privilege. Any CDSC incurred in
connection with the prior sale of Class A or B shares within a 90 day period
will not be refunded to a shareholder's account. Following your sale of Class C
shares, you will be entitled to purchase only Class C shares under this
reinstatement privilege.

EXCHANGING SHARES

You may exchange some or all of your shares for shares of the same class of any
other Advantus Multiple Class Fund, Real Estate Fund or Advantus Money Market
Fund, Inc. (Money Market Fund) provided the other Advantus Fund is available in
your state. If you are considering an exchange into another Advantus Fund you
should obtain the prospectus for that fund and read it carefully. Exchanges may
only be made between Advantus Fund accounts with identical registrations. You
may make exchanges by contacting the Fund by mail or by telephone or by
Internet. Exchange requests must be for an exchange amount of at least $250. You
may exchange your shares up to twelve times a year without restriction or
charge. A $7.50 service fee will then be imposed on subsequent exchanges. The
Fund reserves the right to change the terms of and impose additional limitations
and charges on exchanges after giving 60 days' prior notice to shareholders.

Frequent exchanges may interfere with Fund management or operations and drive up
Fund costs. The Fund is not designed for market timers, or for large or frequent
transfers. To protect shareholders, the Fund may restrict or refuse purchases or
exchanges by market timers. You will be considered to be a market timer if you
have: (i) requested an exchange out of any Advantus Fund within two weeks of an
earlier exchange request, or (ii) exchanged shares out of any Advantus Fund more
than three times in a calendar quarter, or (iii) exchanged shares equal to at
least $1 million, or more than 1% of the net assets of any class of shares of
any Advantus Fund, or (iv) followed what otherwise seems to be a timing pattern
in the exercise of exchange or transfer rights. Accounts under common control or
ownership are combined for the purpose of determining these limitations.

                                            BUYING AND SELLING SHARES         23
<PAGE>
---------------
REFERENCE POINT
---------------
Please see "Selling Shares" and "Exchanging Shares" for sale and exchange
details.

Exchanges will be made based on the NAVs of the shares. No additional purchase
or sales charges will be imposed on exchanges for shares. If Class B shares are
acquired by exchange and later sold, any CDSC on such sale will be calculated as
if no previous exchange occurred. However, shares of the Money Market Fund
acquired by exchange will still be subject to the CDSC. The CDSC will be
calculated without including the period that shares of the Money Market Fund are
held.

You may also elect to systematically exchange Fund shares for shares of other
Advantus Funds on a monthly basis. Systematic exchanges must be for an exchange
amount of at least $25.

More information about exchanging shares is provided in the Statement of
Additional Information.

TELEPHONE TRANSACTIONS

You may sell or exchange Fund shares by telephone. You will automatically have
the right to initiate such telephone transactions unless you elect not to do so
on your account application. You may initiate telephone transactions by calling
Advantus Shareholder Services at (800) 665-6005. Automated service is available
24 hours a day or you may speak to a service representative Monday through
Friday, from 7:30 a.m. to 5:15 p.m. (Central time). The maximum amount of shares
you may sell by telephone is $50,000.


During periods of economic or market changes, you may experience difficulty in
selling or exchanging shares due to a heavy volume of telephone calls. In such a
case, you should consider submitting a written request as an alternative to a
telephone sale or exchange. The Fund reserves the right to change, terminate or
impose a fee on, telephone sale and exchange privileges after giving 60 days'
prior notice to shareholders.


Unless you decline telephone privileges on your account application, you may be
responsible for any fraudulent telephone order as long as the Fund takes
reasonable measures to verify the order.

INTERNET TRANSACTIONS

The Advantus Funds maintain a web site located at www.advantusfunds.com.
Existing Advantus Funds shareholders may purchase, exchange and redeem shares,
and access account information such as account balance and the Fund's NAVs. In
order to engage in transactions on our web site, you must first authorize us to
transmit account information on-line and accept our policies and procedures.
Please contact Advantus Shareholder Services at (800) 665-6005. You may need to
have bank account information or other information to complete the authorization
process.

You may be responsible for any fraudulent Internet transactions as long as the
Fund takes reasonable measures to verify the order.


ACCOUNT REQUIREMENTS



MINIMUM INVESTMENT AMOUNTS. A minimum initial investment of $250 is required to
open your account, unless you are making investments of not less than $25 under
an automatic investment plan. You may make subsequent minimum investments in
your account of $25.


24             BUYING AND SELLING SHARES
<PAGE>

MINIMUM ACCOUNT BALANCE. If you sell some of your shares and the remaining
shares in your account have a value of less than $150, the Fund has the right to
close your account. However, your account will not be closed if the balance
falls below the minimum due to changes in the market value of your account. You
will be given at least 60 days' written notice to add funds to your account and
reestablish the minimum balance.



LOW BALANCE FEE. The Fund will deduct a $10 annual fee from your account in
December of each year if your account balance at that time is below $2,000. The
low balance fee is waived for qualified retirement accounts and for investors
who are participating in an automatic investment plan or who have aggregate
Advantus Fund account assets of $10,000 or more.


                                            BUYING AND SELLING SHARES         25
<PAGE>
                                                                       [GRAPHIC]

                                                             GENERAL INFORMATION

--------------------
FOR YOUR INFORMATION
--------------------
The redemption or exchange of Fund shares may generate a taxable event for you.
Depending on the purchase price and the sale price of the shares you redeem or
exchange, you may incur a gain or loss.

DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS


The Fund pays its shareholders dividends from its net investment income, and
distributes any net capital gains that it has realized. Dividends are paid
quarterly and net capital gains distributions are generally paid once a year.
Distributions on Class A shares will generally be higher than Class B and
Class C share distributions due to higher Rule 12b-1 fees applicable to Class B
and Class C shares. Your distributions will be reinvested in additional shares
of the Fund unless you instruct the Fund otherwise. Distributions of these
additional shares are made at the NAV of the payment date. There are no fees or
sales charges on reinvestments. If you wish to receive cash distributions, you
may authorize the Fund to do so in your account application or by writing to
Advantus Shareholder Services. If your cash distribution checks cannot be
delivered by the postal or other delivery service to your address of record, all
distributions will automatically be reinvested in additional shares of the Fund.
No interest will be paid on amounts represented by uncashed distribution checks.


You may elect to have dividends invested in shares of the Money Market Fund or
in shares of the same class of another Advantus Multiple Class Fund described in
"Advantus Family of Funds" below. Dividends are valued at the NAV of such other
Advantus Fund on the dividend payment date. To qualify for this privilege, you
must maintain a minimum account balance of $250 in the Fund and the other
applicable Advantus Fund. You must request this privilege by writing to Advantus
Funds Group, P.O. Box 9767, Providence, Rhode Island 02940-5059.

TAXES

You will be taxed on both dividends and capital gains distributions paid by the
Fund (unless you hold your shares through an IRA or other tax-deferred
retirement account). Dividends and distributions are subject to tax regardless
of whether they are automatically invested or are received in cash. Dividends
paid from the Fund's investment income will be taxed as ordinary income. Capital
gains distributions will be taxed as long-term capital gains, regardless of the
length of time for which you have held your shares. Long-term capital gains are
currently taxable to individuals at a maximum federal tax rate of 20%. If you
purchase shares of the Fund before dividends or capital gains distributions,
such dividends and distributions will reduce the NAV per share by the amount of
such dividends and distributions. Furthermore, you will be subject to taxation
on such dividends and distributions.

If you sell your shares, you will generally realize a capital gain or loss. Any
gain will be treated as short-term if you have held the shares for one year or
less, and long-term if you have held the shares more than one year. Short-term
capital gains are taxed as ordinary income, while long-term capital gains are
subject to a maximum federal tax rate of 20%. If

26             GENERAL INFORMATION
<PAGE>
you exchange your shares in the Fund for shares of another Advantus Fund, the
exchange will be treated as a sale for federal tax purposes, and you will be
taxed on any capital gain you realize on the sale.

The Fund makes changes in its portfolio that Advantus Capital deems advisable.
The Fund's investment policies may cause the Fund's annual portfolio turnover
rate (i.e., the ratio of sales and purchases of investments to the value of the
Fund's entire portfolio) to be higher than that of most mutual funds. High
portfolio turnover rates may cause the Fund to realize substantial capital gains
which, when distributed to shareholders, will be taxable to them.

You will receive an annual statement from the Fund providing detailed
information concerning the federal tax status of distributions you have received
during the year.

The above is only a general discussion of the federal income tax consequences of
an investment in the Fund. For more information, see the Statement of Additional
Information. You should consult your own tax adviser for the specific federal,
state or local tax consequences to you of an investment in the Fund.

                                                  GENERAL INFORMATION         27
<PAGE>
SERVICE PROVIDERS

INVESTMENT ADVISER

Advantus Capital Management, Inc.
400 Robert Street North
St. Paul, Minnesota 55101
(651) 665-3826

UNDERWRITER

Ascend Financial Services, Inc.
400 Robert Street North
St. Paul, Minnesota 55101-2098
(651) 665-4833
(888) 237-1838

SHAREHOLDER AND ADMINISTRATIVE SERVICES AGENT

Advantus Shareholder Services
(a division of Minnesota Life Insurance Company)
(800) 665-6005

TRANSFER AGENT

PFPC Inc.
Advantus Funds Group
P.O. Box 9767
Providence, Rhode Island 02940-5059


CUSTODIAN



Wells Fargo Bank Minnesota
Sixth Street and Marquette Avenue
Minneapolis, Minnesota 55479


INDEPENDENT AUDITORS

KPMG LLP

GENERAL COUNSEL

Dorsey & Whitney LLP

28             GENERAL INFORMATION
<PAGE>
                       This page is purposely left blank.

                                                                              29
<PAGE>
                       This page is purposely left blank.

30
<PAGE>
ADVANTUS FAMILY OF FUNDS
Spectrum Fund is a member of the Advantus family of funds. The following is a
brief description of the investment objectives, policies and practices of the
Advantus Funds.


                                                                HIGHER POTENTIAL
                                                                       LONG-TERM
                                                                 RISK AND RETURN
                                                                 [BEGIN GRAPHIC]
ENTERPRISE
-------------------------------------------------
Long-term growth through investing primarily in common
stocks issued by small capitalization companies.
VENTURE
-------------------------------------------------
Long-term growth through investing primarily in stocks of
small capitalization companies deemed to be undervalued
relative to their future earnings and growth potential.
HORIZON
-------------------------------------------------
Long-term growth through investing primarily in common
stocks issued by large capitalization companies.
INDEX 500
-------------------------------------------------
Investment results that correspond generally to the S&P 500
Index by investing a significant portion of its portfolio in
common stocks included in the S&P 500 Index.*
CORNERSTONE
-------------------------------------------------
Long-term growth through investing primarily in stocks of
large capitalization companies deemed to be undervalued
relative to their future earnings and growth potential.
INTERNATIONAL BALANCED
-------------------------------------------------
Total return through investing primarily in stocks and bonds
of large and small companies located outside the U.S.
REAL ESTATE SECURITIES
-------------------------------------------------
Total return through investing in real estate and
real-estate related securities.



SPECTRUM
-------------------------------------------------
Total return from a combination of income and capital
appreciation through investing in a portfolio of stocks,
bonds and money market instruments.
BOND
-------------------------------------------------
High level of current income by investing primarily in high
quality debt securities.
MORTGAGE SECURITIES
-------------------------------------------------
High level of current income by investing primarily in
mortgage-related securities.
MONEY MARKET
-------------------------------------------------
High level of current income by investing primarily in money
market securities.
                                                                   [END GRAPHIC]
                                                                 LOWER POTENTIAL
                                                                       LONG-TERM
                                                                 RISK AND RETURN



An investment in any Advantus Fund will be subject to a variety of risks. As a
result, an Advantus Fund may not always achieve its investment objective.

This information is a result of long-term risk and return expectations using
various indices and asset class histories, and is not from actual performance.
Please note that the actual risk/ return for an investment in the above Advantus
Funds may vary and the above table does not necessarily indicate how each
Advantus Fund will perform in the future.

*"STANDARD & POOR'S-REGISTERED TRADEMARK-", "S&P 500-REGISTERED TRADEMARK-",
"STANDARD & POOR'S 500", AND "500" ARE REGISTERED TRADEMARKS OF THE MCGRAW-HILL
COMPANIES, INC. AND HAVE BEEN LICENSED FOR USE BY ADVANTUS INDEX 500 FUND, INC.
THE FUND IS NOT SPONSORED, ENDORSED, SOLD OR PROMOTED BY STANDARD & POOR'S AND
STANDARD & POOR'S MAKES NO REPRESENTATION REGARDING THE ADVISABILITY OF
INVESTING IN THE FUND.


                                                  GENERAL INFORMATION         31
<PAGE>


<TABLE>
<S>                                                           <C>
ASCEND FINANCIAL SERVICES, INC.                                     PRESORTED STANDARD
400 ROBERT STREET NORTH                                              U.S. POSTAGE PAID
ST. PAUL, MN 55101-2098                                                ST. PAUL, MN
                                                                      PERMIT NO. 3547
FORWARDING SERVICE REQUESTED
</TABLE>


ADDITIONAL INFORMATION ABOUT THE FUND

The Fund's annual and semi-annual reports list portfolio holdings, and discuss
recent market conditions, economic trends and investment strategies that
affected the Fund during the latest fiscal year.

A Statement of Additional Information (SAI) provides further information about
the Fund. The current SAI is on file with the Securities and Exchange Commission
and is incorporated by reference (is legally part of this Prospectus).

HOW TO OBTAIN ADDITIONAL INFORMATION

The SAI and the Fund's annual and semi-annual reports are available without
charge upon request. You may obtain additional information or make any
inquiries:

By Telephone - Call (800) 665-6005

By Mail - Write to Advantus Funds Group, P.O. Box 9767, Providence, Rhode Island
          02940-5059

Web Site Address - www.advantusfunds.com

Information about the Fund (including the SAI and annual and semi-annual
reports) can be reviewed and copied at the SEC's Public Reference Room in
Washington, D.C. (telephone 1-202-942-8090). This information and other reports
about the Fund are also available on the SEC's World Wide Web site at
http://www.sec.gov. Copies of this information may be obtained by writing to the
SEC's Public Reference Section, Washington, D.C. 20549-0102 or obtained by
electronic request to: [email protected]. You will be charged a duplicating fee
for copies.

Investment Company Act No. 811-4143

ADVANTUS-TM-
FAMILY OF FUNDS
-C-1999 Advantus Capital Management, Inc.
   All rights reserved.


F. 48214 Rev. 2-2001


<PAGE>
                        STATEMENT OF ADDITIONAL INFORMATION






                            ADVANTUS HORIZON FUND, INC.
                            ADVANTUS SPECTRUM FUND, INC.
                      ADVANTUS MORTGAGE SECURITIES FUND, INC.
                          ADVANTUS MONEY MARKET FUND, INC.
                              ADVANTUS BOND FUND, INC.
                          ADVANTUS CORNERSTONE FUND, INC.
                           ADVANTUS ENTERPRISE FUND, INC.
                     ADVANTUS INTERNATIONAL BALANCED FUND, INC.


                                    February 1, 2001






THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS.  THIS STATEMENT OF
      ADDITIONAL INFORMATION RELATES TO THE SEPARATE PROSPECTUSES DATED
       FEBRUARY 1, 2001 AND SHOULD BE READ IN CONJUNCTION THEREWITH.


    EACH FUND'S AUDITED ANNUAL REPORT DATED SEPTEMBER 30, 2000, WHICH EITHER
  ACCOMPANIES THIS STATEMENT OF ADDITIONAL INFORMATION OR HAS PREVIOUSLY BEEN
  PROVIDED TO THE INVESTOR TO WHOM THIS STATEMENT OF ADDITIONAL INFORMATION IS
                 BEING SENT, IS INCORPORATED HEREIN BY REFERENCE.

  A COPY OF EACH PROSPECTUS AND ANNUAL REPORT MAY BE OBTAINED BY TELEPHONE FROM
  ADVANTUS SHAREHOLDER SERVICES AT (800) 665-6005 OR BY WRITING TO THE FUNDS AT
    ADVANTUS FUNDS GROUP, P.O. BOX 9767, PROVIDENCE, RHODE ISLAND 02940-5059.









                                         -1-
<PAGE>

                                  TABLE OF CONTENTS

GENERAL INFORMATION AND HISTORY

INVESTMENT OBJECTIVES AND POLICIES
     Equity Securities of Small Capitalization Companies
     Debt and Money Market Securities - Advantus Multiple Class Funds
     Low Rated Securities
     Convertible Securities
     Money Market Securities - Money Market Fund
     U.S. Government Obligations
     Obligations of Non-Domestic Banks
     Variable Amount Master Demand Notes
     Mortgage-Related Securities
     U.S. Government Mortgage-Related Securities
     Non-Governmental Mortgage-Related Securities
     Collateralized Mortgage Obligations
     Stripped Mortgage-Backed Securities
     Asset-Backed and Stripped Asset-Backed Securities
     Direct Investments in Mortgages - Whole Loans
     Foreign Securities
     Investments in Russia
     Currency Exchange Transactions
     Foreign Currency Hedging Transactions
     Closed-End Investment Companies
     Loans of Portfolio Securities
     Restricted and Illiquid Securities
     When-Issued Securities and Forward Commitments
     Mortgage Dollar Rolls
     Repurchase Agreements
     Reverse Repurchase Agreements
     Futures Contracts and Options on Futures Contracts
     Options
     Warrants
     Warrants with Cash Extractions
     Index Depositary Receipts
     Short Sales Against the Box
     Defensive Purposes

INVESTMENT RESTRICTIONS
     Fundamental Restrictions
     Non-Fundamental Restrictions

PORTFOLIO TURNOVER

DIRECTORS AND EXECUTIVE OFFICERS

DIRECTOR LIABILITY

INVESTMENT ADVISORY AND OTHER SERVICES
     General
     Control and Management of Advantus Capital and Ascend Financial
     Investment Advisory Agreement
     International Fund Sub-Adviser - Templeton Counsel
     International Fund Investment Sub-Advisory Agreement - Templeton Counsel
     Enterprise Fund Sub-Adviser - CSAM
     Enterprise Fund Investment Sub-Advisory Agreement - CSAM
     Code of Ethics
     Distribution Agreement
     Payment of Certain Distribution Expenses of the Funds
     Transfer Agent and Administrative Services

MONEY MARKET FUND AMORTIZED COST METHOD
OF PORTFOLIO VALUATION


                                         -2-
<PAGE>

PORTFOLIO TRANSACTIONS AND ALLOCATION OF BROKERAGE
     Horizon Fund, Spectrum Fund, Cornerstone Fund and Enterprise Fund
     Mortgage Securities Fund and Bond Fund
     Money Market Fund
     International Fund
     Generally

CALCULATION OF PERFORMANCE DATA
     Money Market Fund
     Advantus Multiple Class Funds

CAPITAL STOCK AND OWNERSHIP OF SHARES

HOW TO BUY SHARES

SALES CHARGES
     Class A Shares
     Class B Shares
     Class C Shares
     Other Payments to Broker-Dealers

NET ASSET VALUE AND PUBLIC OFFERING PRICE

REDUCED SALES CHARGES
     Right of Accumulation-Cumulative Purchase Discount
     Letter of Intent
     Combining Purchases
     Group Purchases
     Waiver of Sales Charges For Certain Sales of Class A Shares

EXCHANGE AND TRANSFER OF FUND SHARES
     Systematic Exchange Plan

SHAREHOLDER SERVICES
     Open Accounts
     Automatic Investment Plan
     Group Systematic Investment Plan
     Retirement Plans Offering Tax Benefits
     Systematic Withdrawal Plans

REDEMPTIONS
     Signature Guarantee
     Contingent Deferred Sales Charge
     Telephone Redemption
     Internet Redemption
     Delay in Payment of Redemption Proceeds
     Fund's Right to Redeem Small Accounts
     Checkwriting
     Automatic Premium Payments
     Reinstatement Privilege

TELEPHONE TRANSACTIONS

INTERNET TRANSACTIONS

DISTRIBUTIONS AND TAX STATUS
     Dividends and Capital Gains Distributions
     Taxation - General

FINANCIAL STATEMENTS

Appendix A - Mortgage-Related Securities
     Underlying Mortgages
     Liquidity and Marketability
     Average Life
     Yield Calculations

Appendix B - Bond and Commercial Paper Ratings
     Bond Ratings
     Commercial Paper Ratings

Appendix C - Futures Contracts
     Example of Futures Contract Sale
     Example of Futures Contract Purchase
     Tax Treatment



                                         -3-
<PAGE>

                          GENERAL INFORMATION AND HISTORY

     Advantus Horizon Fund, Inc. ("Horizon Fund"), Advantus Spectrum Fund,
Inc. ("Spectrum Fund"),  Advantus Mortgage Securities Fund, Inc. ("Mortgage
Securities Fund"), Advantus Money Market Fund, Inc. ("Money Market Fund"),
Advantus Bond Fund, Inc. ("Bond Fund"), Advantus Cornerstone Fund, Inc.
("Cornerstone Fund"), Advantus Enterprise Fund, Inc. ("Enterprise Fund") and
Advantus International Balanced Fund, Inc. ("International Fund"),
collectively referred to as the "Funds," are open-end diversified management
investment companies, commonly called mutual funds.  The Funds, together with
three other mutual funds which share the same investment adviser, are members
of a family of mutual funds known as the "Advantus Funds." Each of the
Advantus Funds, excluding Money Market Fund and Advantus Real Estate
Securities Fund, Inc. ("Real Estate Fund"), offers more than one class of
shares (the "Advantus Multiple Class Funds").  The Advantus Multiple Class
Funds currently offer three classes of shares (Class A, Class B and Class C).
Real Estate Fund currently offers one class of shares (Class A).  Each class
is sold pursuant to different sales arrangements and bears different
expenses.  The Funds are incorporated as Minnesota corporations.  Horizon
Fund, Spectrum Fund, Mortgage Securities Fund and Money Market Fund were
incorporated in October 1984.  Bond Fund was incorporated in January 1987,
and Cornerstone Fund, Enterprise Fund and International Fund were
incorporated in January 1994.

                          INVESTMENT OBJECTIVES AND POLICIES

     The investment objectives and principal investment policies of each of
the Funds are set forth in the text of each Fund's Prospectus under
"Investing in the Fund-Investment Policies and Practices."  This section
contains detailed descriptions of the investment policies of the Funds as
summarized in each Fund's Prospectus.

EQUITY SECURITIES OF SMALL CAPITALIZATION COMPANIES

     Enterprise Fund will primarily invest in equity securities issued by small
capitalization companies.  Small capitalization companies may be in a relatively
early stage of development or may produce goods and services which have
favorable prospects for growth due to increasing demand or developing markets.
Frequently, such companies have a small management group and single product or
product-line expertise that may result in an enhanced entrepreneurial spirit and
greater focus which allow such firms to be successful. The Fund's investment
adviser believes that such companies may develop into significant business
enterprises and that an investment in such companies offers a greater
opportunity for capital appreciation than an investment in larger more
established entities.  However, small capitalization companies frequently retain
a large part of their earnings for research, development and investment in
capital assets, so that the prospects for immediate dividend income are limited.

     While securities issued by smaller capitalization companies have
historically produced better market results than the securities of larger
issuers, there is no assurance that they will continue to do so or that the Fund
will invest specifically in those companies which produce those results.
Because of the risks involved, the Fund is not intended to constitute a complete
investment program.


DEBT AND MONEY MARKET SECURITIES - ADVANTUS MULTIPLE CLASS FUNDS

     Each of Horizon Fund, Mortgage Securities Fund, Bond Fund, Enterprise
Fund, Cornerstone Fund, Enterprise Fund and International Fund may invest in
long, intermediate and short-term debt securities from various industry
classifications and money market instruments.  It is Bond Fund's investment
policy to have, under normal circumstances, at least 65% of the value of its
total assets invested in "bonds."  For this purpose a bond is any Fixed income
security, and includes both mortgage-related and asset-backed securities (see
below). The debt instruments in which these Funds may invest include the
following:


                                         -4-
<PAGE>

     Corporate obligations which at the time of purchase are rated within the
     four highest grades assigned by Standard & Poor's Corporation ("S&P"),
     Moody's Investors Services, Inc. ("Moody's") or any other national
     rating service, or, if not rated, are of equivalent investment quality
     as determined by the Fund's investment adviser or sub-adviser, as the
     case may be.  To the extent that the Fund invests in securities rated
     BBB or Baa by S&P or Moody's, respectively, it will be investing in
     securities which have speculative elements.  As an operating policy,
     International Fund will not invest more than 5% of its assets in debt
     securities rated BBB by S&P or Baa by Moody's.  In addition, Spectrum
     Fund, Bond Fund and Mortgage Securities Fund may also invest up to 10% of
     their respective net assets in securities rated BB or Ba by S&P or
     Moody's, respectively, and Cornerstone Fund may also invest up to 10% of
     its net assets in securities (including convertible securities) rated at
     least B- by S&P or by B3 by Moody's.  See "Low Rated Securities," below.
     For a description of the ratings used by Moody's and S&P, see Appendix
     B ("Bond and Commercial Paper Ratings") below.

     Obligations of, or guaranteed by, the U.S. Government, its agencies or
     instrumentalities.

     Debt obligations of banks.

     Bond Fund may also purchase U.S. dollar denominated debt securities of
foreign governments and companies which are publicly traded in the United States
and rated within the four highest grades assigned by S&P or Moody's.

     In addition to the instruments described above, which will generally be
long-term, but may be purchased by the Fund within one year of the date of a
security's maturity, the Fund may also purchase other high quality securities
including:

     Obligations (including certificates of deposit and bankers acceptances)
     of U.S. banks, savings and loan associations, savings banks which have
     total assets (as of the date of their most recent annual financial
     statements at the time of investment) of not less than $2,000,000,000;
     U.S. dollar denominated obligations of Canadian chartered banks, London
     branches of U.S. banks and U.S. branches or agencies of foreign banks
     which meet the above-stated asset size; and obligations of any U.S.
     banks, savings and loan associations and savings banks, regardless of
     the amount of their total assets, provided that the amount of the
     obligations purchased does not exceed $100,000 for any one U.S. bank,
     savings and loan association or savings bank and the payment of the
     principal is insured by the Federal Deposit Insurance Corporation or the
     Federal Savings and Loan Insurance Corporation.

     Obligations of the International Bank for Reconstruction and Development.

     Commercial paper (including variable amount master demand notes) issued
     by U.S. corporations or affiliated foreign corporations and rated (or
     guaranteed by a company whose commercial paper is rated) at the date of
     investment Prime-1 by Moody's or A-1 by S&P or, if not rated by either
     Moody's or S&P, issued by a corporation having an outstanding debt issue
     rated Aa or better by Moody's or AA or better by S&P and, if issued by
     an affiliated foreign corporation, such commercial paper (not to exceed
     in the aggregate 10% of such Fund's (other than Mortgage Securities
     Fund's) net assets) is U.S. dollar denominated and not subject at the
     time of purchase to foreign tax withholding.

     The Fund may also invest in securities which are unrated if the Fund's
investment adviser or sub-adviser, as the case may be, determines that such
securities are of equivalent investment quality to the rated securities
described above.  In the case of "split-rated" securities, which result when
nationally-recognized rating agencies rate the security at different rating
levels (e.g., BBB by S&P and Ba by Moody's), it is the Fund's general policy to
classify such securities at the higher rating level where, in the judgment of
the Fund's investment adviser or sub-adviser, such classification reasonably
reflects the security's quality and risk.


                                         -5-
<PAGE>

     The market value of debt securities generally varies in response to changes
in interest rates and the financial condition of each issuer.  During periods of
declining interest rates, the value of debt securities generally increases.
Conversely, during periods of rising interest rates, the value of such
securities generally declines.  These changes in market value will be reflected
in each Fund's net asset value.

     These Funds may, however, acquire debt securities which, after acquisition,
are down-graded by the rating agencies to a rating which is lower than the
applicable minimum rating described above.  In such an event it is the Funds'
general policy to dispose of such down-graded securities except when, in the
judgment of the Funds' investment adviser or sub-adviser, it is to the Funds'
advantage to continue to hold such securities.  In no event, however, will any
Fund hold in excess of 5% of its net assets in securities which have been
down-graded subsequent to purchase where such down-graded securities are not
otherwise eligible for purchase by the Fund.  This 5% is in addition to
securities which the Fund may otherwise purchase under its usual investment
policies.

LOW RATED SECURITIES

     Spectrum Fund, Mortgage Securities Fund and Bond Fund may invest up to
10% of their respective net assets in corporate bonds and mortgage-related
securities, including convertible securities, which, at the time of
acquisition, are rated BB or Ba by S&P or Moody's, respectively, or rated at
a comparable level by another independent publicly-recognized rating agency,
or, if not rated, are of equivalent investment quality as determined by the
Fund's investment adviser or sub-adviser, as the case may be.  Cornerstone
Fund may also invest up to 10% of its net asset in debt securities (including
convertible securities) which are rated at least B- by S&P or B3 by Moody's,
or rated at a comparable level by another independent publicly-recognized
rating agency, or, if not rated, are of equivalent investment quality as
determined by the Fund's investment adviser. Each of these Funds may also
hold an additional 5% of its net assets in securities rated below "investment
grade" (i.e. below BBB) where such securities were either investment grade or
eligible low rated securities at the time of purchase but subsequently
down-graded to a rating not otherwise eligible for purchase by the Fund (see
"Debt and Money Market Securities - Advantus Multiple Class Funds" above).
Debt securities rated below the four highest categories (i.e., below BBB) are
not considered investment grade obligations and are commonly called "junk
bonds."  These securities are predominately speculative and present more
credit risk than investment grade obligations.  Bonds rated below BBB are
also regarded as predominately speculative with respect to the issuer's
continuing ability to meet principal and interest payments.

     Low rated and unrated debt securities generally involve greater volatility
of price and risk of principal and income, including the possibility of default
by, or bankruptcy of, the issuers of the securities.  In addition, the markets
in which low rated and unrated debt securities are traded are more limited than
those in which higher rated securities are traded.  The existence of limited
markets for particular securities may diminish the Funds' ability to sell the
securities at fair value either to meet redemption requests or to respond to
changes in the economy or in the financial markets and could adversely affect
and cause fluctuations in the daily net asset value of the Funds' shares.

     Adverse publicity and investor perceptions, whether or not based on
fundamental analysis, may decrease the values and liquidity of low rated debt
securities, especially in a thinly traded market.  Analysis of the
creditworthiness of issuers of low rated debt securities may be more complex
than for issuers of higher rated securities, and the ability of the Funds to
achieve their respective investment objective may, to the extent of investment
in low rated debt securities, be more dependent upon such creditworthiness
analysis than would be the case if the Funds were investing in higher rated
securities.


                                      -6-
<PAGE>

     Low rated debt securities may be more susceptible to real or perceived
adverse economic and competitive industry conditions than investment grade
securities.  The prices of low rated debt securities have been found to be less
sensitive to interest rate changes than higher rated investments, but more
sensitive to adverse economic downturns or individual corporate developments.  A
projection of an economic downturn or of a period of rising interest rates, for
example, could cause a decline in low rated debt securities prices because the
advent of a recession could lessen the ability of a highly leveraged company to
make principal and interest payments on its debt securities.  If the issuer of
low rated debt securities defaults, the Funds may incur additional expenses to
seek recovery.  The low rated bond market is relatively new, and many of the
outstanding low rated bonds have not endured a major business recession.

CONVERTIBLE SECURITIES

     Bond Fund, Spectrum Fund, Mortgage Securities Fund, Cornerstone Fund,
Enterprise Fund and Horizon Fund may invest in debt or preferred equity
securities convertible into or exchangeable for equity securities.
Traditionally, convertible securities have paid dividends or interest at
rates higher than common stocks but lower than non-convertible securities.
They generally participate in the appreciation or depreciation of the
underlying stock into which they are convertible, but to a lesser degree. The
total return and yield of lower quality (high yield/high risk) convertible
bonds can be expected to fluctuate more than the total return and yield of
higher quality, shorter-term bonds, but not as much as common stocks.
Enterprise Fund and Horizon Fund will each limit its purchase of convertible
debt securities to those that, at the time of purchase, are rated at least
BBB or Baa by S&P or Moody's, respectively, or it not rated by S&P or
Moody's, are of equivalent investment quality as determined by the Fund's
investment adviser or sub-adviser. Bond Fund, Spectrum Fund and Mortgage
Securities Fund will each limit its purchase of convertible debt securities
to those that, at the time of purchase, are rated at least BB or Ba by S&P or
Moody's, respectively, or if not rated by S&P or Moody's, are of equivalent
investment quality as determined by the Fund's investment adviser.
Cornerstone Fund will limit its purchase of convertible debt securities to
those that, at the time of purchase, are rated at least B- by S&P or B3 by
Moody's, or if not rated by S&P or Moody's, are of equivalent investment
quality as determined by the Fund's investment adviser. See "Low Rated
Securities," above.

MONEY MARKET SECURITIES - MONEY MARKET FUND

     Subject to the limitations under Rule 2a-7 of the Investment Company Act of
1940 (as described in "Investment Restrictions - Money Market Fund" below),
Money Market Fund will invest in a managed portfolio of money market instruments
as follows:

     Obligations issued or guaranteed as to principal or interest by the U.S.
Government, or any agency or authority controlled or supervised by and acting as
an instrumentality of the U.S. Government pursuant to authority granted by
Congress.

     Obligations (including certificates of deposit and bankers acceptances)
     of U.S. banks, savings and loan associations and savings banks which at
     the date of the investment have total assets (as of the date of their
     most recent annual financial statements) of not less than
     $2,000,000,000; U.S. dollar denominated obligations of Canadian
     chartered banks, London branches of U.S. banks, and U.S. branches or
     agencies of foreign banks if such banks meet the above-stated asset
     size; and obligations of any such U.S. banks, savings and loan
     associations and savings banks, regardless of the amount of their total
     assets, provided that the amount of the obligations does not exceed
     $100,000 for any one U.S. bank, savings and loan association or savings
     bank and the payment of the principal is insured by the Federal Deposit
     Insurance Corporation.

     Obligations of the International Bank for Reconstruction and Development.

     U.S. dollar denominated obligations of Foreign governments and companies
     that are publicly traded in the United States.

     Commercial paper (including variable amount master demand notes) issued
     by U.S. limited partnerships, corporations or affiliated foreign
     corporations.

     Other corporate debt obligations that at the time of issuance were
     long-term securities, but that have remaining maturities of 397 calendar
     days or less.

     Repurchase agreements with respect to any of the foregoing obligations.

     By limiting the maturity of its investments as described above, the Fund
seeks to lessen the changes in the value of its assets caused by market factors.
The Fund intends to maintain a constant net asset value of $1.00 per share, but
there can be no assurance it will be able to do so.


                                      -7-
<PAGE>

U.S. GOVERNMENT OBLIGATIONS

     These obligations are bills, certificates of indebtedness, notes and bonds
issued or guaranteed as to principal or interest by the U.S. or by agencies or
authorities controlled or supervised by and acting as instrumentalities of the
U.S. Government established under the authority granted by Congress.  Bills,
notes and bonds issued by the U.S. Treasury are direct obligations of the U.S.
Government and differ in their interest rates, maturities and times of issuance.
Securities issued or guaranteed by agencies or authorities controlled or
supervised by and acting as instrumentalities of the U.S. Government established
under authority granted by Congress include but are not limited to, the
Government National Mortgage Association ("GNMA"), the Export-Import Bank, the
Student Loan Marketing Association, the U.S. Postal Service, the Tennessee
Valley Authority, the Bank for Cooperatives, the Farmers Home Administration,
the Federal Home Loan Bank, the Federal Financing Bank, the Federal Intermediate
Credit Banks, the Federal Land Banks, the Farm Credit Banks and the Federal
National Mortgage Association.  Some obligations of U.S. Government agencies,
authorities and other instrumentalities are supported by the full faith and
credit of the U.S. Treasury, such as securities of the Government National
Mortgage Association and the Student Loan Marketing Association; others by the
right of the issuer to borrow from the U.S. Treasury, such as securities of the
Federal Financing Bank and the U.S. Postal Service; and others only by the
credit of the issuing agency, authority or other instrumentality, such as
securities of the Federal Home Loan Bank and the Federal National Mortgage
Association ("FNMA").

OBLIGATIONS OF NON-DOMESTIC BANKS

     Money Market Fund and the Advantus Multiple Class Funds may invest in
obligations of Canadian chartered banks, London branches of U.S. banks, and U.S.
branches and agencies of foreign banks, which may involve somewhat greater
opportunity for income than the other money market instruments in which such
Funds invest, but may also involve investment risks in addition to any risks
associated with direct obligations of domestic banks.  These additional risks
include future political and economic developments, the possible imposition of
withholding taxes on interest income payable on such obligations, the possible
seizure or nationalization of foreign deposits, the possible establishment of
exchange controls or the adoption of other governmental restrictions, as well as
market and other factors which may affect the market for or the liquidity of
such obligations.  Generally, Canadian chartered banks, London branches of U.S.
banks, and U.S. branches and agencies of foreign banks are subject to fewer U.S.
regulatory restrictions than those applicable to domestic banks, and London
branches of U.S. banks may be subject to less stringent reserve requirements
than domestic branches.  Canadian chartered banks, U.S. branches and agencies of
foreign banks, and London branches of U.S. banks may provide less public
information than, and may not be subject to the same accounting, auditing and
financial recordkeeping standards as, domestic banks.  The Fund will not invest
more than 25% of its total assets in obligations of Canadian chartered banks,
London branches of U.S. banks, and U.S. branches and agencies of foreign banks.

VARIABLE AMOUNT MASTER DEMAND NOTES

     Money Market Fund may invest in variable amount master demand notes.  These
instruments are short-term, unsecured promissory notes issued by corporations to
finance short-term credit needs.  They allow the investment of fluctuating
amounts by the Fund at varying market rates of interest pursuant to direct
arrangements between Money Market Fund, as lender, and the borrower.  Variable
amount master demand notes permit a series of short-term borrowings under a
single note.  The lender has the right to increase the amount under the note at
any time up to the full amount provided by the note agreement.  Both the lender
and the borrower have the right to reduce the amount of outstanding indebtedness
at any time.  Because variable amount master demand notes are direct lending
arrangements between the lender and borrower, it is not generally contemplated
that such instruments will be traded and there is no secondary market for the
notes.  Typically, agreements relating to such notes provide that the lender
shall not sell or otherwise transfer the note without the borrower's consent.
Thus, variable amount master demand notes are illiquid assets.  Such notes
provide that the interest rate on the amount outstanding varies on a daily basis
depending upon a stated short-term interest rate barometer.  The Fund's
investment adviser will monitor the creditworthiness of the borrower throughout
the term of the variable amount master demand note.


                                         -8-
<PAGE>

MORTGAGE-RELATED SECURITIES

     Spectrum Fund, Bond Fund and Mortgage Securities Fund may invest in
mortgage-related securities (including securities which represent interests in
pools of mortgage loans) issued by government (some of which may be U.S.
Government agency issued or guaranteed securities as described herein) and
non-government entities such as banks, mortgage lenders or other financial
institutions.  These securities may include both collateralized mortgage
obligations and stripped mortgage-backed securities.  Mortgage loans are
originated and formed into pools by various organizations, including the
Government National Mortgage Association ("GNMA"), the Federal National Mortgage
Association ("FNMA"), the Federal Home Loan Mortgage Corporation ("FHLMC") and
various private organizations including commercial banks and other mortgage
lenders.  Payments on mortgage-related securities generally consist of both
principal and interest, with occasional repayments of principal due to
refinancings, foreclosures or certain other events.  Some mortgage-related
securities, such as collateralized mortgage obligations, make payments of both
principal and interest at a variety of intervals.  Certain mortgage-related
securities, such as GNMA securities, entitle the holder to receive such
payments, regardless of whether or not the mortgagor makes loan payments;
certain mortgage-related securities, such as FNMA securities, guarantee the
timely payment of interest and principal; certain mortgage-related securities,
such as FHLMC securities, guarantee the timely payment of interest and ultimate
collection of principal; and certain mortgage-related securities contain no such
guarantees but may offer higher rates of return.  No mortgage-related securities
guarantee the Fund's yield or the price of its shares.

     Each Fund expects its investments in mortgage-related securities to be
primarily in high-grade mortgage-related securities either (a) issued by
GNMA, FNMA or FHLMC or other United States Government owned or sponsored
corporations or (b) rated A or better by S&P or Moody's, or rated at a
comparable level by another independent publicly-recognized rating agency,
or, if not rated, are of equivalent investment quality as determined by the
Fund's investment adviser or sub-adviser, as the case may be.  The Fund may
invest in mortgage-related securities rated BBB or Baa by S&P or Moody's,
respectively, or rated at a comparable level by another independent
publicly-recognized rating agency, or, if not rated, are of equivalent
investment quality as determined by the Fund's investment adviser or
sub-adviser, as the case may be, when deemed by the Fund's investment adviser
or sub-adviser to be consistent with the Fund's respective objective.  To the
extent that the Fund invests in securities rated BBB or Baa by S&P or
Moody's, respectively, it will be investing in securities which have
speculative elements. Each Fund may also invest up to 10% of its assets in
mortgage-related securities rated BB or Ba by S&P or Moody's, respectively,
or rated at a comparable level by another independent publicly-recognized
rating agency, or, if not rated, are of equivalent investment quality as
determined by the Fund's investment adviser or sub-adviser, as the case may
be. See "Low Rated Securities," above.  Mortgage Securities Fund may not
invest more than 35% of its total assets in securities rated BBB or Baa or
lower by S&P or Moody's, respectively. For further information about the
characteristics and risks of mortgage-related securities, and for a
description of the ratings used by Moody's and S&P, see Appendix A and B
("Mortgage-Related Securities" and "Bond and Commercial Paper Ratings") below.

U.S. GOVERNMENT MORTGAGE-RELATED SECURITIES

     A governmental (i.e., backed by the full faith and credit of the U.S.
Government) guarantor of mortgage-related securities is GNMA.  GNMA is a
wholly-owned U.S. Government corporation within the Department of Housing and
Urban Development.  GNMA is authorized to guarantee, with the full faith and
credit of the U.S. Government, the timely payment of principal and interest on
securities issued by institutions approved by GNMA (such as savings and loan
institutions, commercial banks and mortgage bankers) and backed by pools of
FHA-insured or VA-guaranteed mortgages.

     Government-related (i.e., not backed by the full faith and credit of the
U.S. Government) guarantors include FNMA and FHLMC.  FNMA is a
government-sponsored corporation owned entirely by private stockholders.  It is
subject to general regulation by the Secretary of Housing and Urban Development.
FNMA purchases residential mortgages from a list of approved seller/servicers
which include state and federally-chartered savings and loan associations,
mutual savings banks, commercial banks and credit unions and mortgage bankers.
Pass-through securities issued by FNMA are guaranteed as to timely payment of
principal and interest by FNMA but are not backed by the full faith and credit
of the U.S. Government.


                                         -9-
<PAGE>

     FHLMC is a corporate instrumentality of the U.S. Government and was created
by Congress in 1970 for the purpose of increasing the availability of mortgage
credit for residential housing.  Its stock is publicly traded.  FHLMC issues
Participation Certificates ("PCs") which represent interests in mortgages from
FHLMC's national portfolio.  FHLMC guarantees the timely payment of interest and
principal on most PCs.  There are some PCs, however, on which FHLMC guarantees
the timely payment of interest but only the ultimate payment of principal.  PCs
are not backed by the full faith and credit of the U.S. Government.

NON-GOVERNMENTAL MORTGAGE-RELATED SECURITIES

     Mortgage Securities Fund, Bond Fund and Spectrum Fund may invest in
non-governmental mortgage-related securities.  Commercial banks, savings and
loan institutions, private mortgage insurance companies, mortgage bankers and
other secondary market issuers also create pass-through pools of conventional
residential and commercial mortgage loans.  Such issuers may in addition be
the originators and servicers of the underlying mortgage loans as well as the
guarantors of the mortgage-related securities.  Pools created by such
non-governmental issuers generally offer a higher rate of interest than
government and government-related pools because there are no direct or indirect
government guarantees of payments in the former pools.  However, timely payment
of interest and principal of these pools is supported by various forms of
insurance, guarantees and credit enhancements, including individual loan, title,
pool and hazard insurance.  The insurance and guarantees are issued by
government entities, private insurers and the mortgage poolers.  Such insurance
and guarantees and the creditworthiness of the issuers thereof will be
considered in determining whether a mortgage-related security meets the Fund's
investment quality standards.  There can be no assurance that the private
insurers can meet their obligations under the policies.  The Fund may buy
mortgage-related securities without insurance or guarantees if through an
examination of the loan experience and practices of the poolers the Fund's
investment adviser determines that the securities meet the Fund's quality
standards.  Although the market for such securities is becoming increasingly
liquid, securities issued by certain private organizations may not be readily
marketable.  The Fund will not purchase mortgage-related securities or any other
assets which in its investment adviser's opinion are illiquid if, as a result,
more than 15% of the value of the Fund's net assets will be illiquid.

COLLATERALIZED MORTGAGE OBLIGATIONS

     Spectrum Fund, Bond Fund and Mortgage Securities Fund may invest in
collateralized mortgage obligations ("CMOs"), in which several different series
of bonds or certificates secured by pools of mortgage-backed securities or
mortgage loans, are issued.  The series differ from each other in terms of the
priority rights which each has to receive cash flows with the CMO from the
underlying collateral.  Each CMO series may also be issued in multiple classes.
Each class of a CMO series, often referred to as a "tranche," is usually issued
at a specific coupon rate and has a stated maturity.  The underlying security
for the CMO may consist of mortgage-backed securities issued or guaranteed by
U.S. Government agencies or whole loans.  CMOs backed by U.S. Government agency
securities retain the credit quality of such agency securities and therefore
present minimal credit risk.  CMOs backed by whole loans typically carry various
forms of credit enhancements to protect against credit losses and provide
investment grade ratings.  Unlike traditional mortgage pass-through securities,
which simply pass through interest and principal on a pro rata basis as
received, CMOs allocate the principal and interest from the underlying mortgages
among the several classes or tranches of the CMO in many ways.  All residential,
and some commercial, mortgage-related securities are subject to prepayment risk.
A CMO does not eliminate that risk, but, by establishing an order of priority
among the various tranches for the receipt and timing of principal payments, it
can reallocate that risk among the tranches.  Therefore, the stream of payments
received by a CMO bondholder may differ dramatically from that received by an
investor holding a traditional pass-through security backed by the same
collateral.


                                         -10-
<PAGE>

     In the traditional form of CMO, interest is paid currently on all tranches
but principal payments are applied sequentially to retire each tranche in order
of stated maturity.  Traditional sequential payment CMOs have evolved into
numerous more flexible forms of CMO structures which can vary frequency of
payments, maturities, prepayment risk and performance characteristics.  The
differences between these new types of CMOs relate primarily to the manner in
which each varies the amount and timing of principal and interest received by
each tranche from the underlying collateral.  Under all but the sequential
payment structures, specific tranches of CMOs have priority rights over other
tranches with respect to the amount and timing of cash flow from the underlying
mortgages.

     The primary risk associated with any mortgage security is the uncertainty
of the timing of cash flows; specifically, uncertainty about the possibility of
either the receipt of unanticipated principal in falling interest rate
environments (prepayment or call risk) or the failure to receive anticipated
principal in rising interest rate environments (extension risk).  In a CMO, that
uncertainty may be allocated to a greater or lesser degree to specific tranches
depending on the relative cash flow priorities of those tranches.  By
establishing priority rights to receive and reallocate payments of prepaid
principal, the higher priority tranches are able to offer better call protection
and extension protection relative to the lower priority classes in the same CMO.
For example, when insufficient principal is received to make scheduled principal
payments on all tranches, the higher priority tranches receive their scheduled
premium payments first and thus bear less extension risk than lower priority
tranches.  Conversely, when principal is received in excess of scheduled
principal payments on all tranches (call risk), the lower priority tranches are
required to receive such excess principal until they are retired and thus bear
greater prepayment risk than the higher priority tranches.  Therefore, depending
on the type of CMO purchased, an investment may be subject to a greater or
lesser risk of prepayment, and experience a greater or lesser volatility in
average life, yield, duration and price, than other types of mortgage-related
securities.  A CMO tranche may also have a coupon rate which resets periodically
at a specified increment over an index.  These floating rate CMOs are typically
issued with lifetime caps on the level to which the floating coupon rate is
allowed to rise.  The Fund may invest in such securities, usually subject to a
cap, provided such securities satisfy the same requirements regarding cash flow
priority applicable to the Fund's purchase of CMOs generally.  CMOs are
typically traded over the counter rather than on centralized exchanges.  Because
CMOs of the type purchased by the Fund tend to have relatively more predictable
yields and are relatively less volatile, they are also generally more liquid
than CMOs with greater prepayment risk and more volatile performance profiles.

     Spectrum Fund, Bond Fund and Mortgage Securities Fund may also purchase
CMOs known as "accrual" or "Z" bonds.  An accrual or Z bond holder is not
entitled to receive cash payments until one or more other classes of the CMO
have been paid in full from payments on the mortgage loans underlying the CMO.
During the period in which cash payments are not being made on the Z tranche,
interest accrues on the Z tranche at a stated rate, and this accrued interest is
added to the amount of principal which is due to the holder of the Z tranche.
After the other classes have been paid in full, cash payments are made on the Z
tranche until its principal (including previously accrued interest which was
added to principal, as described above) and accrued interest at the stated rate
have been paid in full.  Generally, the date upon which cash payments begin to
be made on a Z tranche depends on the rate at which the mortgage loans
underlying the CMO are prepaid, with a faster prepayment rate resulting in an
earlier commencement of cash payments on the Z tranche.  Like a zero coupon
bond, during its accrual period the Z tranche of a CMO has the advantage of
eliminating the risk of reinvesting interest payments at lower rates during a
period of declining market interest rates.  At the same time, however, and also
like a zero coupon bond, the market value of a Z tranche can be expected to
fluctuate more widely with changes in market interest rates than would the
market value of a tranche which pays interest currently.  Changes in market
interest rates also can be expected to influence prepayment rates on the
mortgage loans underlying the CMO of which a Z tranche is a part.  As noted
above, such changes in prepayment rates will affect the date at which cash
payments begin to be made on a Z tranche, and therefore also will influence its
market value.  As an operating policy, Spectrum Fund, Mortgage Securities Fund
and Bond Fund will not purchase a Z bond if the respective Fund's aggregate
investment in Z bonds which are then still in their accrual periods would exceed
20% of the Fund's total assets (Z bonds which have begun to receive cash
payments are not included for purposes of this 20% limitation).


                                         -11-
<PAGE>

     Spectrum Fund, Bond Fund and Mortgage Securities Fund may also invest in
inverse or reverse floating CMOs.  Inverse or reverse floating CMOs
constitute a tranche of a CMO with a coupon rate that moves in the reverse
direction to an applicable index.  Accordingly, the coupon rate will increase
as interest rates decrease.  The Fund would be adversely affected, however,
by the purchase of such CMOs in the event of an increase in interest rates
since the coupon rate will decrease as interest rates increase, and, like
other mortgage-related securities, the value will decrease as interest rates
increase.  Inverse or reverse floating rate CMOs are typically more volatile
than fixed or floating rate tranches of CMOs, and usually carry a lower cash
flow priority.  As an operating policy, Spectrum Fund, Bond Fund and Mortgage
Securities Fund will treat inverse floating rate CMOs as illiquid and,
therefore, will limit its investments in such securities, together with all
other illiquid securities, to 15% of such Fund's net assets.

STRIPPED MORTGAGE-BACKED SECURITIES

     Spectrum Fund, Bond Fund and Mortgage Securities Fund may invest in
stripped mortgage-backed securities.  Stripped mortgage-backed securities
represent undivided ownership interests in a pool of mortgages, the cash flow of
which has been separated into its interest and principal components.  "IOs"
(interest only securities) receive the interest portion of the cash flow while
"POs" (principal only securities) receive the principal portion.  Stripped
mortgage-backed securities may be issued by U.S. Government agencies or by
private issuers.  As interest rates rise and fall, the value of IOs tends to
move in the same direction as interest rates, unlike other mortgage-backed
securities (which tend to move in the opposite direction compared to interest
rates).  Under the Internal Revenue Code of 1986, as amended, POs may generate
taxable income from the current accrual of original issue discount, without a
corresponding distribution of cash to the Fund.

     The cash flows and yields on standard IO and PO classes are extremely
sensitive to the rate of principal payments (including prepayments) on the
related underlying mortgage assets.  For example, a rapid or slow rate of
principal payments may have a material adverse effect on the performance and
prices of IOs or POs, respectively.  If the underlying mortgage assets
experience greater than anticipated prepayments of principal, an investor may
fail to recoup fully its initial investment in an IO class of a stripped
mortgage-backed security, even if the IO class is rated AAA or Aaa or is derived
from a full faith and credit obligation (i.e., a GNMA).  Conversely, if the
underlying mortgage assets experience slower than anticipated prepayments of
principal, the price on a PO class will be affected more severely than would be
the case with a traditional mortgage-backed security, but unlike IOs, an
investor will eventually recoup fully its initial investment provided no default
of the guarantor occurs.  As an operating policy, the Fund will limit its
investments in IOs and POs to 15% of the Fund's net assets, and will treat them
as illiquid securities (which, in the aggregate, may not exceed 15% of each
Fund's net assets) except to the extent such securities are deemed liquid by the
Fund's adviser in accordance with standards established by the Fund's Board of
Directors. See "Restricted and Illiquid Securities" below.

ASSET-BACKED AND STRIPPED ASSET-BACKED SECURITIES

     Bond Fund, Spectrum Fund and Mortgage Securities Fund may invest in
asset-backed securities rated within the four highest grades assigned by
Moody's or S&P, or, if not rated, are of equivalent investment quality as
determined by the Fund's investment adviser.  Asset-backed securities usually
represent interests in pools of consumer loans (typically trade, credit card
or automobile receivables).  The credit quality of most asset-backed
securities depends primarily on the credit quality of the assets underlying
such securities, how well the entity issuing the security is insulated from
the credit risk of the originator or any other affiliated entities, the
quality of the servicing  of the receivables, and the amount and quality of
any credit support provided to the securities.  The rate of principal payment
on asset-backed securities may depend on the rate of principal payments
received on the underlying assets which in turn may be affected by a variety
of economic and other factors.  As a result, the yield on any asset-backed
security may be difficult to predict with precision and actual yield to
maturity may be more or less than the anticipated yield to maturity.  Some
asset-backed transactions are structured with a "revolving period" during
which the principal balance of the asset-backed security is maintained at a
fixed level, followed by a period of rapid repayment.  This structure is
intended to insulate holders of the asset-backed security from prepayment
risk to a significant extent. Asset-backed securities may be classified as
pass-through certificates or collateralized obligations.


                                         -12-
<PAGE>

     Pass-through certificates are asset-backed securities which represent an
undivided fractional ownership interest in an underlying pool of assets.
Pass-through certificates usually provide for payments of principal and interest
received to be passed through to their holders, usually after deduction for
certain costs and expenses incurred in administering the pool.  Because
pass-through certificates represent an ownership interest in the underlying
assets, the holders thereof bear directly the risk of any defaults by the
obligors on the underlying assets not covered by any credit support.

     Asset-backed securities issued in the form of debt instruments, also known
as collateralized obligations, are generally issued as the debt of a special
purpose entity organized solely for the purpose of owning such assets and
issuing such debt.  The assets collateralizing such asset-backed securities are
pledged to a trustee or custodian for the benefit of the holders thereof.  Such
issuers generally hold no assets other than those underlying the asset-backed
securities and any credit support provided.  As a result, although payments on
such asset-backed securities are obligations of the issuers, in the event of
defaults on the underlying assets not covered by any credit support, the issuing
entities are unlikely to have sufficient assets to satisfy their obligations on
the related asset-backed securities.

     To lessen the effect of failures by obligors on underlying assets to make
payments, such securities may contain elements of credit support.  Such credit
support falls into two classes:  liquidity protection and protection against
ultimate default by an obligor on the underlying assets.  Liquidity protection
refers to the provision of advances, generally by the entity administering the
pool of assets, to ensure that scheduled payments on the underlying pool are
made in a timely fashion.  Protection against ultimate default ensures ultimate
payment of the obligations on at least a portion of the assets in the pool.
Such protection may be provided through guarantees, insurance policies or
letters of credit obtained from third parties, through various means of
structuring the transaction or through a combination of such approaches.

     Asset-backed securities may be stripped to create interest-only and
principal-only securities in the same manner as mortgage-backed securities. See
"Stripped Mortgage-Backed Securities," above. The value of asset-backed IOs also
tends to move in the same direction as changes in interest rates, unlike other
asset-backed (or mortgage-backed) securities, which tend to move in the opposite
direction compared to interest rates. As with stripped mortgage-backed
securities, the cash flows and yields on asset-backed IOs and POs are also
extremely sensitive to the rate of principal payments on the related underlying
assets. See "Stripped Mortgage-Backed Securities," above. As an operating
policy, the Fund will limit its investment in IOs and POs to 15% of the Fund's
net assets, and will treat them as illiquid securities (which, in the aggregate,
may not exceed 15% of each Fund's net assets) except to the extent such
securities are deemed liquid by the Fund's adviser in accordance with standards
established by the Fund's Board of Directors. See "Restricted and Illiquid
Securities" below.

DIRECT INVESTMENTS IN MORTGAGES - WHOLE LOANS

     Mortgage Securities Fund, Bond Fund and Spectrum Fund  may invest up to 10%
of the value of its net assets directly in mortgages securing residential or
commercial real estate (i.e., the Fund becomes the mortgagee).  Such investments
are not "mortgage-related securities" as described above.  They are normally
available from lending institutions which group together a number of mortgages
for resale (usually from 10 to 50 mortgages) and which act as servicing agent
for the purchaser with respect to, among other things, the receipt of principal
and interest payments.  (Such investments are also referred to as "whole
loans".) The vendor of such mortgages receives a fee from Mortgage Securities
Fund for acting as servicing agent.  The vendor does not provide any insurance
or guarantees covering the repayment of principal or interest on the mortgages.
Unlike pass-through securities, whole loans constitute direct investment in
mortgages inasmuch as the Fund, rather than a financial intermediary, becomes
the mortgagee with respect to such loans purchased by the Fund.  At present,
such investments are considered to be illiquid by the Fund's investment adviser.
The Fund will invest in such mortgages only if its investment adviser has
determined through an examination of the mortgage loans and their originators
(which may include an examination of such factors as percentage of family income
dedicated to loan service and the relationship between loan value and market
value) that the purchase of the mortgages should not represent a significant
risk of loss to the Fund.


                                         -13-
<PAGE>

FOREIGN SECURITIES

     Horizon Fund, Spectrum Fund, Enterprise Fund and Cornerstone Fund may
invest up to 10% of the market value of their respective total assets in
securities of foreign issuers which are not publicly traded in the U.S.
(Securities of foreign issuers which are publicly traded in the U.S., usually in
the form of sponsored American Depositary Receipts, are not subject to this 10%
limitation.)  Bond Fund may also invest in debt securities issued by foreign
governments and companies provided that such securities are U.S.
dollar-denominated and publicly traded in the United States.  In addition,
International Fund may invest in securities without limitation.  Investing in
securities of foreign issuers may result in greater risk than that incurred in
investing in securities of domestic issuers.  There is the possibility of
expropriation, nationalization or confiscatory taxation, taxation of income
earned in foreign nations or other taxes imposed with respect to investments in
foreign nations; foreign exchange controls (which may include suspension of the
ability to transfer currency from a given country), default in foreign
government securities, political or social instability or diplomatic
developments which could affect investments in securities of issuers in those
nations.  In addition, in many countries there is less publicly available
information about issuers than is available in reports about companies in the
U.S. Foreign companies are not generally subject to uniform accounting, auditing
and financial reporting standards, and auditing practices and requirements may
not be comparable to those applicable to U.S. companies.  Further, the Fund may
encounter difficulties or be unable to pursue legal remedies and obtain
judgments in foreign courts.  Commission rates in foreign countries, which are
sometimes fixed rather than subject to negotiation as in the U.S., are likely to
be higher.  Further, the settlement period of securities transactions in foreign
markets may be longer than in domestic markets.  In many foreign countries there
is less government supervision and regulation of business and industry
practices, stock exchanges, brokers and listed companies than in the U.S.  The
foreign securities markets of many of the countries in which the Fund may invest
may also be smaller, less liquid, and subject to greater price volatility than
those in the U.S.  Also, some countries may withhold portions of interest,
dividends and gains at the source. The Fund may also be unfavorably affected by
fluctuations in the relative rates of exchange between the currencies of
different nations (i.e., when the currency being exchanged has decreased in
value relative to the currency being purchased).  There are further risk
considerations, including possible losses through the holding of securities in
domestic and foreign custodial banks and depositories.

     The countries of the European Monetary Union (EMU) began the process of
converting their individual country currencies to the Euro on January 1, 1999.
There is also a risk that the value of foreign securities of companies located
in EMU countries may decrease due to market volatility resulting from the
conversion of certain EMU country currencies to the Euro.  It is not possible to
predict the impact of the Euro on the business or financial condition of
European issues or on the Fund.  The transition and the elimination of currency
risk among EMU countries may change the economic environment and behavior of
investors, particularly in European markets.  To the extent the Fund holds
non-U.S. dollar (Euro or other) denominated securities, it will still be exposed
to currency risk due to fluctuations in those currencies versus the U.S. dollar.

     Furthermore, International Fund may invest in securities issued by
governments, governmental agencies and companies located in developing market
countries.  The Fund considers countries having developing markets to be all
countries that are generally considered to be developing or emerging countries
by the International Bank for Reconstruction and Development (more commonly
referred to as the World Bank) and the International Finance Corporation, as
well as countries that are classified by the United Nations or otherwise
regarded by their authorities as developing.  Currently, the countries not
included in this category are Ireland, Spain, New Zealand, Australia, the United
Kingdom, Italy, the Netherlands, Belgium, Austria, France, Canada, Germany,
Denmark, the United States, Sweden, Finland, Norway, Japan and Switzerland.  In
addition, developing market securities means (i) securities of companies the
principal securities trading market for which is a developing market country, as
defined above, (ii) securities, traded in any market, of companies that derive
50% or more of their total revenue from either goods or services produced in
such developing market countries or sales made in such developing market
countries or (iii) securities of companies organized under the laws of, and with
a principal office in, a developing market country.  International Fund will at
all times, except during temporary defensive periods, maintain investments in at
least three countries having developing markets.


                                         -14-
<PAGE>

     An ADR is sponsored if the original issuing company has selected a single
U.S. bank to serve as its U.S. depositary and transfer agent.  This relationship
requires a deposit agreement which defines the rights and duties of both the
issuer and depositary.  Companies that sponsor  ADRs must also provide their ADR
investors with English translations of company information made public in their
own domiciled country.  Sponsored ADR investors also generally have the same
voting rights as ordinary shareholders, barring any unusual circumstances.  ADRs
which meet these requirements can be listed on U.S. stock exchanges.
Unsponsored ADRs are created at the initiative of a broker or bank reacting to
demand for a specific foreign stock.  The broker or bank purchases the
underlying shares and deposits them in a depositary.  Unsponsored shares issued
after 1983 are not eligible for U.S. stock exchange listings.  Furthermore, they
do not generally include voting rights.

     In addition, International Fund may invest in European Depositary Receipts,
which are receipts evidencing an arrangement with a European bank similar to
that for ADRs and which are designed for use in the European securities markets.
European Depository Receipts are not necessarily denominated in the currency of
the underlying security.

INVESTMENTS IN RUSSIA

     International Fund may invest in securities of Russian companies, which
involves risks and special considerations not typically associated with
investing in United States securities markets.  Since the breakup of the Soviet
Union at the end of 1991, Russia has experienced dramatic political and social
change.  The political system in Russia is emerging from a long history of
extensive state involvement in economic affairs.  The country is undergoing a
rapid transition from a centrally-controlled command system to a
market-oriented, democratic model.  The Fund may be affected unfavorably by
political or diplomatic developments, social instability, changes in government
policies, taxation and interest rates, currency repatriation restrictions and
other political and economic developments in the law or regulations in Russia
and, in particular, the risks of expropriation, nationalization and confiscation
of assets and changes in legislation relating to foreign ownership.

     The planned economy of the former Soviet Union was run with qualitatively
different objectives and assumptions from those prevalent in a market system and
Russian businesses do not have any recent history of operating within a
market-oriented economy.  In general, relative to companies operating in Western
economies, companies in Russian are characterized by a lack of: (i) management
with experience of operating in a market economy; (ii) modern technology; and,
(iii) a sufficient capital base with which to develop and expand their
operations.  It is unclear what will be the future effect on Russian companies,
if any, of Russia's continued attempts to move toward a more market-oriented
economy.  Russia's economy has experienced severe economic recession, if not
depression, since 1990 during which time the economy has been characterized by
high rates of inflation, high rates of unemployment, declining gross domestic
product, deficit government spending, and a devaluing currency.  The economic
reform program has involved major disruptions and dislocations in various
sectors of the economy, and those problems have been exacerbated by growing
liquidity problems.  Further, Russian presently receives significant financial
assistance from a number of countries through various programs.  To the extent
these programs are reduced or eliminated in the future, Russian economic
development may be adversely impacted.


                                     -15-
<PAGE>

     The Russian securities markets are substantially smaller, less liquid
and significantly more volatile than the securities markets in the United
States. In addition, there is little historical data on these securities
markets because they are of recent origin.  A substantial proportion of
securities transactions in Russia are privately negotiated outside of stock
exchanges and over-the-counter markets.  A limited number of issuers
represent a disproportionately large percentage of market capitalization and
trading volume. Although evolving rapidly, even the largest of Russia's stock
exchanges are not well developed compared to Western stock exchanges.  The
actual volume of exchange-based trading in Russia is low and active on-market
trading generally occurs only in the shares of a few private companies.  Most
secondary market trading of equity securities occurs through over-the-counter
trading facilitated by a growing number of licensed brokers.  Shares are
traded on the over-the-counter market primarily by the management of
enterprises, investment funds, short-term speculators and foreign investors.
The securities of Russian companies are mostly traded over-the-counter and,
despite the large number of stock exchanges, there is still no organized
public market for such securities. This may increase the difficulty of
valuing the Fund's investments.  No established secondary markets may exist
for many of the securities in which the Fund may invest.  Reduced secondary
market liquidity may have an adverse effect on market price and the Fund's
ability to dispose of particular instruments when necessary to meet its
liquidity requirements or in response to specific economic events such as a
deterioration in the creditworthiness of the issuer.  Reduced secondary
market liquidity for securities may also make it more difficult for the Fund
to obtain accurate market quotations for purposes of valuing its portfolio
and calculating its net asset value.  Market quotations are generally
available on many emerging country securities only from a limited number of
dealers and may not necessarily represent firm bids of those dealers or
prices for actual sales.

     Because of the recent formation of the securities markets as well as the
underdeveloped state of the banking and telecommunications systems,
settlement, clearing and registration transactions are subject to significant
risks not normally associated with investments in the United States and other
more developed markets.  Ownership of shares (except where shares are held
through depositories that meet the requirements of the 1940 Act) is defined
according to entries in the company's share register and normally evidenced
by extracts from the register or in certain limited cases by formal share
certificates.  However, there is not a central registration system and these
services are carried out by the companies themselves or by registrars located
throughout Russia.  These registrars are not necessarily subject to effective
state supervision and its possible for the Fund to lose its registration
through fraud, negligence and even mere oversight.  The laws and regulations
in Russia affecting Western investment business continue to evolve in an
unpredictable manner.  Russian laws and regulations, particularly those
involving taxation, foreign investment and trade, title to property or
securities, and transfer of title, applicable to the Fund's activities are
relatively new and can change quickly and unpredictably in a manner far more
volatile than in the United States or other developed market economies.
Although basic commercial laws are in place, they are often unclear or
contradictory and subject to varying interpretation, and may at any time be
amended, modified, repealed or replaced in a manner adverse to the interest
of the Fund.  There is still lacking a cohesive body of law and precedents
normally encountered in business environments.  Foreign investment in Russian
companies is, in certain cases, legally restricted.  Sometimes these
restrictions are contained in constitutional documents of an enterprise which
are not publicly available. Russian foreign investment legislation currently
guarantees the right of foreign investors to transfer abroad income received
on investments such as profits, dividends and interest payments.  This right
is subject to settlement of all applicable taxes and duties.  However, more
recent legislation governing currency regulation and control guarantees the
right to export interest, dividends and other income on investments, but does
not expressly permit the repatriation of capital from the realization of
investments.  Current practice is to recognize the right to repatriation of
capital.  Authorities currently do not attempt to restrict repatriation
beyond the extent of the earlier law.  No guarantee can be made, however,
that amounts representing realization of capital of income will be capable of
being remitted.  If, for any reason, the Fund were unable to distribute an
amount equal to substantially all of its investment company taxable income
(as defined for U.S. tax purposes) within applicable time periods, the Fund
would not qualify for the favorable U.S. federal income tax treatment
afforded to regulated investment companies, or, even if it did so qualify, it
might become liable for income and excise taxes on undistributed income.


                                     -16-
<PAGE>

     Russian courts lack experience in commercial dispute resolution and many
of the procedural remedies for enforcement and protection of legal rights
typically found in Western jurisdictions are not available in Russia.  There
remains uncertainty as to the extent to which local parties and entities,
including Russian state authorities, will recognize the contractual and other
rights of the parties with which they deal.  Accordingly, there will be
difficulty and uncertainty in the Fund's ability to protect and enforce its
rights against Russian state and private entities.  There is also no
assurance that the Russian courts will recognize or acknowledge that the Fund
has acquired title to any property or securities in which the Fund invests,
or that the Fund is the owner of any property or security held in the name of
a nominee which has acquired such property or security on behalf of the Fund,
because there is at present in Russia no reliable system or legal framework
regarding the registration of titles.  There can be no assurance that this
difficulty in protecting and enforcing rights in Russia will not have a
material adverse effect on the Fund and its operations.  Difficulties are
likely to be encountered enforcing judgments of foreign courts within Russia
or of Russian courts in foreign jurisdictions due to the limited number of
countries which have signed treaties for mutual recognition of court
judgments with Russia.

CURRENCY EXCHANGE TRANSACTIONS

     International Fund usually effects currency exchange transactions on a spot
(i.e. cash) basis at the spot rate prevailing in the foreign exchange market.
However, some price spread on currency exchange will be incurred when the Fund
converts assets from one currency to another.  Further, the Fund may be affected
either unfavorably or favorably by fluctuations in the relative rates of
exchange between the currencies of different nations.  For example, in order to
realize the value of a foreign investment, the Fund must convert that value, as
denominated in its foreign currency, into U.S. dollars using the applicable
currency exchange rate.  The exchange rate represents the current price of a
U.S. dollar relative to that foreign currency; that is, the amount of such
foreign currency required to buy one U.S. dollar.  If the Fund holds a foreign
security which has appreciated in value as measured in the foreign currency, the
level of appreciation actually realized by the Fund may be reduced or even
eliminated if the foreign currency has decreased in value relative to the U.S.
dollar subsequent to the date of purchase.  In such a circumstance, the cost of
a U.S. dollar purchased with that foreign currency has gone up and the same
amount of foreign currency purchases fewer dollars than at an earlier date.

FOREIGN CURRENCY HEDGING TRANSACTIONS

     FORWARD EXCHANGE CONTRACTS.  International Fund has authority to deal in
forward foreign currency exchange contracts between currencies of the different
countries in which the Fund will invest as a hedge against possible variations
in the foreign exchange rate between these currencies.  This is accomplished
through contractual agreements to purchase or sell a specified currency at a
specified future date and price set at the time of the contract.  Forward
exchange contracts are individually negotiated and privately traded by currency
traders and their customers.  The Fund's dealings in forward foreign exchange
contracts will be limited to hedging involving either specific transactions or
portfolio positions.  Transaction hedging is the purchase or sale of forward
foreign currency with respect to specific receivables or payables of the Fund
arising from the purchase and sale of portfolio securities, the sale and
redemption of shares of the Fund, or the payment of dividends and distributions
by the Fund.  Position hedging is the sale of forward foreign exchange contracts
with respect to portfolio security positions denominated or quoted in such
foreign currency.  The Fund will not engage in naked forward foreign exchange
contracts.


                                         -17-
<PAGE>

     In addition, when the Fund's investment sub-adviser believes that the
currency of a particular foreign country may suffer or enjoy a substantial
movement against another currency, it may enter into a forward contract to sell
or buy the amount of the former foreign currency, approximating the value of
some or all of the Fund's securities denominated in such foreign currency.  The
projection of short-term currency market movement is extremely difficult, and
the successful execution of a short-term hedging strategy is highly uncertain.

     It is impossible to forecast with absolute precision the market value of
portfolio securities at the expiration of the contract.  Accordingly, it may be
necessary for the Fund to purchase additional foreign currency on the spot
market (and bear the expense of such purchase) if the market value of the
security is less than the amount of foreign currency the Fund is obligated to
deliver and if a decision is made to sell the security and make delivery of the
foreign currency.  Conversely, it may be necessary to sell on the spot market
some of the foreign currency received upon the sale of the portfolio security if
its market value exceeds the amount of foreign currency the Fund is obligated to
deliver.

     If the Fund retains the portfolio security and engages in an offsetting
transaction, the Fund will incur a gain or a loss to the extent that there has
been movement in forward contract prices.  If the Fund engages in an offsetting
transaction, it may subsequently enter into a new forward contract to sell the
foreign currency.  Should forward prices decline during the period between the
Fund entering into a forward contract for the sale of a foreign currency and the
date it enters into an offsetting contract for the purchase of the foreign
currency, the Fund will realize a gain to the extent the price of the currency
it has agreed to sell exceeds the price of the currency it has agreed to
purchase.  Should forward prices increase, the Fund will suffer a loss to the
extent the price of the currency it has agreed to purchase exceeds the price of
the currency it has agreed to sell.

     CURRENCY FUTURES CONTRACTS.  International Fund may also enter into
exchange-traded contracts for the purchase or sale for future delivery of
foreign currencies ("foreign currency futures").  This investment technique will
be used only to hedge against anticipated future changes in exchange rates which
otherwise might adversely affect the value of the Fund's portfolio securities or
adversely affect the prices of securities that the Fund intends to purchase at a
later date.  The successful use of foreign currency futures will usually depend
on the ability of the Fund's investment sub-adviser to forecast currency
exchange rate movements correctly.  Should exchange rates move in an unexpected
manner, the Fund may not achieve the anticipated benefits of foreign currency
futures or may realize losses.

CLOSED-END INVESTMENT COMPANIES

     Some countries, such as South Korea, Chile and India, have authorized the
formation of closed-end investment companies to facilitate indirect foreign
investment in their capital markets.  In accordance with the Investment Company
Act of 1940, International Fund may invest up to 10% of its total assets in
securities of closed-end investment companies.  This restriction on investments
in securities of closed-end investment companies may limit opportunities for the
International Fund to invest indirectly in certain developing markets.  Shares
of certain closed-end investment companies may at times be acquired only at
market prices representing premiums to their net asset values.  If the
International Fund acquires shares of closed-end investment companies,
shareholders would bear both their proportionate share of expenses of the
International Fund (including management and advisory fees) and, indirectly, the
expenses of such closed-end investment companies.


                                         -18-
<PAGE>

LOANS OF PORTFOLIO SECURITIES

     For the purpose of realizing additional income, Horizon Fund, Spectrum
Fund, Enterprise Fund, Cornerstone Fund, Mortgage Securities Fund, Money
Market Fund, Bond Fund and International Fund may make secured loans of
portfolio securities amounting to not more than one-third of their respective
total assets  (which, for purposes of this limitation, will include the value
of collateral received in return for securities loaned).  Collateral received
in connection with securities lending shall not be considered Fund assets,
however, for purposes of compliance with any requirement described in a Fund's
prospectus that the Fund invest a specified minimum percentage of its assets in
certain types of securities (e.g., securities of small companies).  Securities
loans are made to broker-dealers or financial institutions pursuant to
agreements requiring that the loans be continuously secured by collateral at
least equal at all times to the value of the securities lent.  The collateral
received will consist of cash, letters of credit or securities issued or
guaranteed by the U.S. Government, its agencies or instrumentalities.  While the
securities are being lent, the Fund will continue to receive the equivalent of
the interest or dividends paid by the issuer on the securities, as well as
interest on the investment of the collateral or a fee from the borrower.
Although the Fund does not expect to pay commissions or other front-end fees
(including finders fees) in connection with loans of securities (but in some
cases may do so), a portion of the additional income realized will be shared
with the Fund's custodian for arranging and administering such loans.  The Fund
has a right to call each loan and obtain the securities on five business days'
notice.  The Fund will not have the right to vote securities while they are
being lent, but it will call a loan in anticipation of any important vote.  The
risks in lending portfolio securities, as with other extensions of secured
credit, consist of possible delay in receiving additional collateral or in the
recovery of the securities or possible loss of rights in the collateral should
the borrower fail financially.  Loans will only be made to firms deemed by the
Fund's investment adviser or sub-adviser to be of good standing and to have
sufficient financial responsibility, and will not be made unless, in the
judgment of the Fund's investment adviser or sub-adviser, the consideration
to be earned from such loans would justify the risk.  The creditworthiness of
entities to which the Fund makes loans of portfolio securities is monitored
by the Fund's investment adviser or sub-adviser throughout the term of each
loan.

RESTRICTED AND ILLIQUID SECURITIES

     Each Fund may invest up to 15% (10% in the case of Money Market Fund) of
its net assets in securities restricted as to disposition under the federal
securities laws or otherwise, or other illiquid assets.  An investment is
generally deemed to be "illiquid" if it cannot be disposed of within seven
days in the ordinary course of business at approximately the amount at which
the investment company is valuing the investment.  "Restricted securities"
are securities which were originally sold in private placements and which
have not been registered under the Securities Act of 1933 (the "1933 Act").
Such securities generally have been considered illiquid by the staff of the
Securities and Exchange Commission (the "SEC"), since such securities may be
resold only subject to statutory restrictions and delays or if registered
under the 1933 Act.  Because of such restrictions, the Fund may not be able
to dispose of a block of restricted securities for a substantial period of
time or at prices as favorable as those prevailing in the open market should
like securities of an unrestricted class of the same issuer be freely traded.
 The Fund may be required to bear the expenses of registration of such
restricted securities.

     The SEC has acknowledged, however, that a market exists for certain
restricted securities (for example, securities qualifying for resale to
certain "qualified institutional buyers" pursuant to Rule 144A under the 1933
Act). Additionally, the Fund's investment adviser and sub-adviser believe
that a similar market exists for commercial paper issued pursuant to the
private placement exemption of Section 4(2) of the 1933 Act and for certain
interest-only and principal-only classes of mortgage-backed and asset-backed
securities. Each of the Funds may invest without limitation in these forms of
restricted securities if such securities are deemed by the Fund's investment
adviser or sub-adviser to be liquid in accordance with standards established
by the Fund's Board of Directors.  Under these guidelines, the Fund's
investment adviser or sub-adviser must consider (a) the frequency of trades
and quotes for the security, (b) the number of dealers willing to purchase or
sell the security and the number of other potential purchasers, (c) dealer
undertakings to make a market in the security, and (d) the nature of the
security and the nature of the marketplace trades (for example, the time
needed to dispose of the security, the method of soliciting offers and the
mechanics of transfer).  At the present time, it is not possible to predict
with accuracy how the markets for certain restricted securities will develop.
Investing in such restricted securities could have the effect of increasing
the level of the Fund's illiquidity to the extent that qualified purchasers
of the securities become, for a time, uninterested in purchasing these
securities.


                                         -19-
<PAGE>

     If through the appreciation of restricted securities or the depreciation of
unrestricted securities, the Fund is in a position where more than 15% (10%
in the case of Money Market Fund) of its net assets are invested in restricted
and other illiquid securities, the Fund will take appropriate steps to protect
liquidity.

WHEN-ISSUED SECURITIES AND FORWARD COMMITMENTS

     Mortgage Securities Fund, Spectrum Fund, Bond Fund and International Fund
may each purchase securities offered on a "when-issued" basis and may purchase
or sell securities on a "forward commitment" basis.  When such transactions are
negotiated, the price, which is generally expressed in yield terms, is fixed at
the time the commitment is made, but delivery and payment for the securities
takes place at a later date.  Normally, the settlement date occurs within two
months after the transaction, but delayed settlements beyond two months may be
negotiated.  During the period between a commitment to purchase by the Fund and
settlement, no payment is made for the securities purchased by the Fund and,
thus, no interest accrues to the Fund from the transaction.

     The use of when-issued transactions and forward commitments enables the
Fund to hedge against anticipated changes in interest rates and prices.  For
instance, in periods of rising interest rates and falling prices, the Fund might
sell securities in its portfolio on a forward commitment basis to limit its
exposure to falling prices.  In periods of falling interest rates and rising
prices, the Fund might sell a security in its portfolio and purchase the same or
a similar security on a when-issued or forward commitment basis, thereby fixing
the purchase price to be paid on the settlement date at an amount below that to
which the Fund anticipates the market price of such security to rise and, in the
meantime, obtaining the benefit of investing the proceeds of the sale of its
portfolio security at currently higher cash yields.  Of course, the success of
this strategy depends upon the ability of the Fund's investment adviser or
sub-adviser to correctly anticipate increases and decreases in interest rates
and prices of securities.  If the Fund's investment adviser or sub-adviser
anticipates a rise in interest rates and a decline in prices and, accordingly,
the Fund sells securities on a forward commitment basis in order to hedge
against falling prices, but in fact interest rates decline and prices rise, the
Fund will have lost the opportunity to profit from the price increase.  If the
investment adviser or sub-adviser anticipates a decline in interest rates and a
rise in prices, and, accordingly, the Fund sells a security in its portfolio and
purchases the same or a similar security on a when-issued or forward commitment
basis in order to enjoy currently high cash yields, but in fact interest rates
increase and prices fall, the Fund will have lost the opportunity to profit from
investment of the proceeds of the sale of the security at the increased interest
rates.  The likely effect of this hedging strategy, whether the Fund's
investment adviser or sub-adviser is correct or incorrect in its prediction of
interest rate and price movements, is to reduce the chances of large capital
gains or losses and thereby reduce the likelihood of wide variations in the
Fund's net asset value.

     When-issued securities and forward commitments may be sold prior to the
settlement date, but, except for mortgage dollar roll transactions (as discussed
below), the Fund enters into when-issued and forward commitments only with the
intention of actually receiving or delivering the securities, as the case may
be.  The Fund may hold a when-issued security or forward commitment until the
settlement date, even if the Fund will incur a loss upon settlement.  To
facilitate transactions in when-issued securities and forward commitments, the
Fund's custodian bank maintains, in a separate account of the Fund, liquid
assets, such as cash, short-term securities and other liquid securities (marked
to the market daily), having a value equal to, or greater than, any commitments
to purchase securities on a when-issued or forward commitment basis and, with
respect to forward commitments to sell portfolio securities of the Fund, the
portfolio securities themselves.  If the Fund, however, chooses to dispose of
the right to acquire a when-issued security prior to its acquisition or dispose
of its right to deliver or receive against a forward commitment, it can incur a
gain or loss.  (At the time the Fund makes the commitment to purchase or sell a
security on a when-issued or forward commitment basis, it records the
transaction and reflects the value of the security purchased or, if a sale, the
proceeds to be received, in determining its net asset value.)


                                         -20-
<PAGE>

     The Fund may also enter into such transactions to generate incremental
income.  In some instances, the third-party seller of when-issued or forward
commitment securities may determine prior to the settlement date that it will be
unable or unwilling to meet its existing transaction commitments without
borrowing securities.  If advantageous from a yield perspective, the Fund may,
in that event, agree to resell its purchase commitment to the third-party seller
at the current market price on the date of sale and concurrently enter into
another purchase commitment for such securities at a later date.  As an
inducement for the Fund to "roll over" its purchase commitment, the Fund may
receive a negotiated fee.  These transactions, referred to as "mortgage dollar
rolls," are entered into without the intention of actually acquiring securities.
For a description of mortgage dollar rolls and the Funds that may invest in such
transactions, see "Mortgage Dollar Rolls" below.

     The purchase of securities on a when-issued or forward commitment basis
exposes the Fund to risk because the securities may decrease in value prior to
their delivery.  Purchasing securities on a when-issued or forward commitment
basis involves the additional risk that the return available in the market when
the delivery takes place will be higher than that obtained in the transaction
itself.  The Fund's purchase of securities on a when-issued or forward
commitment basis while remaining substantially fully invested increases the
amount of the Fund's assets that are subject to market risk to an amount that is
greater than the Fund's net asset value, which could result in increased
volatility of the price of the Fund's shares.  No more than 30% of the value of
such Fund's (other than International Fund's) total assets will be committed to
when-issued or forward commitment transactions, and of such 30%, no more than
two-thirds (i.e., 20% of its total assets) may be invested in mortgage dollar
rolls. No more than 20% of the value of International Fund's total assets will
be committed to when-issued or forward commitment transactions.

MORTGAGE DOLLAR ROLLS

     In connection with its ability to purchase securities on a when-issued or
forward commitment basis, Spectrum Fund, Bond Fund and Mortgage Securities Fund
may enter into mortgage "dollar rolls" in which the Fund sells securities for
delivery in the current month and simultaneously contracts with the same
counterparty to repurchase similar (same type, coupon and maturity) but not
identical securities on a specified future date.  In a mortgage dollar roll, the
Fund gives up the right to receive principal and interest paid on the securities
sold.  However, the Fund would benefit to the extent of any difference between
the price received for the securities sold and the lower forward price for the
future purchase plus any fee income received.  Unless such benefits exceed the
income, capital appreciation and gain or loss due to mortgage prepayments that
would have been realized on the securities sold as part of the mortgage dollar
roll, the use of this technique will diminish the investment performance of the
Fund compared with what such performance would have been without the use of
mortgage dollar rolls.  The Fund will hold and maintain in a segregated account
until the settlement date cash or liquid securities in an amount equal to the
forward purchase price.  The benefits derived from the use of mortgage dollar
rolls may depend upon the ability of the Fund's investment adviser to predict
correctly mortgage prepayments and interest rates.  There is no assurance that
mortgage dollar rolls can be successfully employed.  In addition, the use of
mortgage dollar rolls by the Fund while remaining substantially fully invested
increases the amount of the Fund's assets that are subject to market risk to an
amount that is greater than the Fund's net asset value, which could result in
increased volatility of the price of the Fund's shares.

     For financial reporting and tax purposes, mortgage dollar rolls are
considered as two separate transactions:  one involving the sale of a security
and a separate transaction involving a purchase.  The Funds do not currently
intend to enter into mortgage dollar rolls that are accounted for as a
"financing" rather than as a separate sale and purchase transactions.


                                         -21-
<PAGE>

REPURCHASE AGREEMENTS

     Horizon Fund, Spectrum Fund, Enterprise Fund, Cornerstone Fund, Money
Market Fund, Bond Fund and International Fund may enter into repurchase
agreements.  Repurchase agreements are agreements by which the Fund purchases
a security and obtains a simultaneous commitment from the seller (a member
bank of the Federal Reserve System or, if permitted by law or regulation and
if the Board of Directors of the Fund has evaluated its creditworthiness
through adoption of standards of review or otherwise, a securities dealer) to
repurchase the security at an agreed upon price and date. The
creditworthiness of entities with whom the Fund enters into repurchase
agreements is monitored by the Fund's investment adviser or sub-adviser
throughout the term of the repurchase agreement.  The resale price is in
excess of the purchase price and reflects an agreed upon market rate
unrelated to the coupon rate on the purchased security.  Such transactions
afford the Fund the opportunity to earn a return on temporarily available
cash.  The Fund's custodian, or a duly appointed subcustodian, holds the
securities underlying any repurchase agreement in a segregated account or
such securities may be part of the Federal Reserve Book Entry System.  The
market value of the collateral underlying the repurchase agreement is
determined on each business day.  If at any time the market value of the
collateral falls below the repurchase price of the repurchase agreement
(including any accrued interest), the Fund promptly receives additional
collateral, so that the total collateral is in an amount at least equal to
the repurchase price plus accrued interest.  While the underlying security
may be a bill, certificate of indebtedness, note or bond issued by an agency,
authority or instrumentality of the U.S. Government, the obligation of the
seller is not guaranteed by the U.S. Government.  In the event of a
bankruptcy or other default of a seller of a repurchase agreement, the Fund
could experience both delays in liquidating the underlying security and
losses, including:  (a) possible decline in the value of the underlying
security during the period while the Fund seeks to enforce its rights
thereto; (b) possible subnormal levels of income and lack of access to income
during this period; and (c) expenses of enforcing its rights.

REVERSE REPURCHASE AGREEMENTS

     Spectrum Fund and Money Market Fund may also enter into reverse repurchase
agreements.  Reverse repurchase agreements are the counterparts of repurchase
agreements, by which the Fund sells a security and agrees to repurchase the
security from the buyer at an agreed upon price and future date.  Because
certain of the incidents of ownership of the security are retained by the Fund,
reverse repurchase agreements may be considered a form of borrowing by the Fund
from the buyer, collateralized by the security.  The Fund uses the proceeds of a
reverse repurchase agreement to purchase other money market securities either
maturing, or under an agreement to resell, at a date simultaneous with or prior
to the expiration of the reverse repurchase agreement.  The Fund utilizes
reverse repurchase agreements when the interest income to be earned from
investment of the proceeds of the reverse repurchase transaction exceeds the
interest expense of the transaction.


                                         -22-
<PAGE>

     The use of reverse repurchase agreements by the Fund allows it to leverage
its portfolio.  While leveraging offers the potential for increased yield, it
magnifies the risks associated with the Fund's investments and reduces the
stability of the Fund's net asset value per share.  To limit this risk, the Fund
will not enter into a reverse repurchase agreement if all such transactions,
together with any money borrowed, exceed 5% of the Fund's net assets.  In
addition, when entering into reverse repurchase agreements, the Fund will
deposit and maintain in a segregated account with its custodian liquid assets,
such as cash or cash equivalents and other appropriate short-term securities and
high grade debt obligations, in an amount equal to the repurchase price (which
shall include the interest expense of the transaction). Moreover, the Money
Market Fund will not enter into reverse repurchase agreements if and to the
extent such transactions would, as determined by the Fund's investment adviser,
materially increase the risk of a significant deviation in the Fund's net asset
value per share. See "Money Market Fund Amortized Cost Method of Portfolio
Valuation" below.

FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS

     FUTURES CONTRACTS. Consistent with their investment objectives and
strategies, the Funds may enter into interest rate futures contracts, stock
index futures contracts and foreign currency futures contracts. (Unless
otherwise specified, interest rate futures contracts, stock index futures
contracts and foreign currency futures contracts are collectively referred to as
"futures contracts.")

     A futures contract is a bilateral agreement providing for the purchase and
sale of a specified type and amount of a financial instrument or foreign
currency, or for the making and acceptance of a cash settlement, at a stated
time in the future for a fixed price. By its terms, a futures contract provides
for a specified settlement date on which, in the case of the majority of
interest rate and foreign currency futures contracts, the fixed income
securities or currency underlying the contract are delivered by the seller and
paid for by the purchaser, or on which, in the case of stock index futures
contracts and certain interest rate and foreign currency futures contracts, the
difference between the price at which the contract was entered into and the
contract's closing value is settled between the purchaser and the seller in
cash. Futures contracts differ from options in that they are bilateral
agreements, with both the purchaser and the seller equally obligated to complete
the transaction. Futures contracts call for settlement only on the expiration
date, and cannot be "exercised" at any other time during their term.

     Interest rate futures contracts currently are traded on a variety of fixed
income securities, including long-term U.S. Treasury Bonds, Treasury Notes,
Government National Mortgage Association modified pass-through mortgage-backed
securities, and U.S. Treasury Bills. In addition, interest rate futures
contracts include contracts on indexes of municipal securities. Foreign currency
futures contracts currently are traded on the British pound, Canadian dollar,
Japanese yen, Swiss franc, West German mark, and on Eurodollar deposits.

     Stock index futures contracts include contracts on the S&P 500 Index and
other broad-based stock market indexes, as well as contracts based on narrower
market indexes or indexes of securities of particular industry groups. A stock
index assigns relative values to the common stocks included in the index and the
index fluctuates with the value of the common stocks so included. The parties to
a stock index futures contract agree to make a cash settlement on a specific
future date in an amount determined by the value of the stock index on the last
trading day of the contract. The amount is a specified dollar amount times the
difference between the value of the index on the last trading day and the value
on the day the contract was struck.


                                         -23-
<PAGE>

     Purchases or sales of stock index futures contracts are used to attempt to
protect current or intended stock investments from broad fluctuations in stock
prices. Interest rate and foreign currency futures contracts are purchased or
sold to attempt to hedge against the effects of interest or exchange rate
changes on a Fund's current or intended investments in fixed income or foreign
securities. In the event that an anticipated decrease in the value of a Fund's
securities occurs as a result of a general stock market decline, a general
increase in interest rates, or a decline in the dollar value of foreign
currencies in which portfolio securities are denominated, the adverse effects of
such changes may be offset, in whole or in part, by gains on the sale of futures
contracts. Conversely, the increased cost of a Fund's securities to be acquired,
caused by a general rise in the stock market, a general decline in interest
rates, or a rise in the dollar value of foreign currencies, may be offset, in
whole or in part, by gains on futures contracts purchased by such Fund.

     Although many futures contracts by their terms call for actual delivery or
acceptance of the financial instrument, in most cases the contracts are closed
out before the settlement date without the making or taking of delivery. Closing
out a short position is effected by purchasing a futures contract for the same
aggregate amount of the specific type of financial instrument and the same
delivery month. If the price of the initial sale of the futures contract exceeds
the price of the offsetting purchase, the seller is paid the difference and
realizes a gain. Conversely, if the price of the offsetting purchase exceeds the
price of the initial sale, the trader realizes a loss. Similarly, the closing
out of a long position is effected by the purchaser entering into a futures
contract sale. If the offsetting sale price exceeds the purchase price, the
purchaser realizes a gain and, if the purchase price exceeds the offsetting sale
price, the purchaser realizes a loss.

     The purchase or sale of a futures contract differs from the purchase or
sale of a security in that no purchase price is paid or received. Instead, an
amount of cash or cash equivalents, which varies but may be as low as 5% or less
of the value of the contract, must be deposited with the broker as "initial
margin." Subsequent payments to and from the broker, referred to as "variation
margin," are made on a daily basis as the value of the index or instrument
underlying the futures contract fluctuates, making positions in the futures
contracts more or less valuable, a process known as "marking to the market."

     U.S. futures contracts may be purchased or sold only on an exchange, known
as a "contract market," designated by the Commodity Futures Trading Commission
("CFTC") for the trading of such contract, and only through a registered futures
commission merchant which is a member of such contract market. A commission must
be paid on each completed purchase and sale transaction. The contract market
clearing house guarantees the performance of each party to a futures contract by
in effect taking the opposite side of such contract. At any time prior to the
expiration of a futures contract, a trader may elect to close out its position
by taking an opposite position on the contract market on which the position was
entered into, subject to the availability of a secondary market, which will
operate to terminate the initial position. At that time, a final determination
of variation margin is made and any loss experienced by the trader is required
to be paid to the contract market clearing house while any profit due to the
trader must be delivered to it. Futures contracts may also be traded on foreign
exchanges.

     OPTIONS ON FUTURES CONTRACTS. The Funds also may purchase and sell put and
call options on futures contracts and enter into closing transactions with
respect to such options to terminate existing positions. The Funds may use such
options on futures contracts in connection with their hedging strategies in lieu
of purchasing and writing options directly on the underlying securities or
purchasing and selling the underlying futures contracts.

     An option on a futures contract provides the holder with the right to enter
into a "long" position in the underlying futures contract, in the case of a call
option, or a "short" position in the underlying futures contract, in the case of
a put option, at a fixed exercise price up to a stated expiration date or, in
the case of certain options, on such date. Upon exercise of the option by the
holder, the contract market clearing house establishes a corresponding short
position for the writer of the option, in the case of a call option, or a
corresponding long position, in the case of a put option. In the event that an
option is exercised, the parties will be subject to all the risks associated
with the trading of futures contracts, such as payment of variation margin
deposits. In addition, the writer of an option on a futures contract, unlike the
holder, is subject to initial and variation margin requirements on the option
position.


                                         -24-
<PAGE>

     A position in an option on a futures contract may be terminated by the
purchaser or the seller prior to expiration by affecting a closing purchase or
sale transaction, subject to the availability of a liquid secondary market,
which is the purchase or sale of an option of the same series (i.e., the same
exercise price and expiration date) as the option previously purchased or sold.
The difference between the premiums paid and received represents the trader's
profit or loss on the transaction.

     Options on futures contracts that are written or purchased by the Funds on
United States exchanges are traded on the same contract market as the underlying
futures contract and, like futures contracts, are subject to regulation by the
CFTC and the performance guarantee of the exchange clearing house. In addition,
options on futures contracts may be traded on foreign exchanges.

     RISKS OF FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS. The use of
futures contracts and options on futures contracts will expose the Funds to
additional investment risks and transactions costs. Risks include:

-    the risk that interest rates, securities prices or currency markets will
     not move in the direction that the Fund's investment adviser or sub-adviser
     anticipates;

-    an imperfect correlation between the price of the instrument and movements
     in the prices of any securities or currencies being hedged;

-    the possible absence of a liquid secondary market for any particular
     instrument and possible exchange imposed price fluctuation limits;

-    leverage risk, which is the risk that adverse price movements in an
     instrument can result in a loss substantially greater than a Fund's initial
     investment in that instrument; and

-    the risk that the counterparty to an instrument will fail to perform its
     obligations.

     REGULATORY MATTERS. To the extent required to comply with applicable
Securities and Exchange Commission releases and staff positions, when entering
into futures contracts each Fund will maintain, in a segregated account, cash or
liquid securities equal to the value of such contracts.

     The CFTC, a federal agency, regulates trading activity on the exchanges
pursuant to the Commodity Exchange Act, as amended. The CFTC requires the
registration of "commodity pool operators," defined as any person engaged in a
business which is of the nature of a company, syndicate or a similar form of
enterprise, and who, in connection therewith, solicits, accepts or receives from
others, funds, securities or property for the purpose of trading in any
commodity for future delivery on or subject to the rules of any contract market.
The CFTC has adopted Rule 4.5, which provides an exclusion from the definition
of commodity pool operator for any registered investment company which meets the
requirements of the Rule. Rule 4.5 requires, among other things, that an
investment company wishing to avoid commodity pool operator status use futures
and options positions only (a) for "bona fide hedging purposes" (as defined in
CFTC regulations) or (b) for other purposes so long as aggregate initial margins
and premiums required in connection with non-hedging positions do not exceed 5%
of the liquidation value of the investment company's portfolio. Any investment
company wishing to claim the exclusion provided in Rule 4.5 must file a notice
of eligibility with both the CFTC and the National Futures Association. Before
engaging in transactions involving futures contracts, the Funds will file such
notices and meet the requirements of Rule 4.5, or such other requirements as the
CFTC or its staff may from time to time issue, in order to render registration
as a commodity pool operator unnecessary.

     For examples of futures contracts and their tax treatment, see Appendix C
to this Statement of Additional Information.

OPTIONS

     Each Fund may write (i.e., sell) covered call and secured put options and
purchase and sell put and call options written by others. Each Fund will limit
the total market value of


                                         -25-
<PAGE>

securities against which it may write call or put options to 20% of its total
assets. In addition, no Fund will commit more than 5% of its total assets to
premiums when purchasing put or call options.

     A put option gives the purchaser the right to sell a security or other
instrument to the writer of the option at a stated price during the term of the
option. A call option gives the purchaser the right to purchase a security or
other instrument from the writer of the option at a stated price during the term
of the option. Thus, if a Fund writes a call option on a security, it becomes
obligated during the term of the option to deliver the security underlying the
option upon payment of the exercise price. If a Fund writes a put option, it
becomes obligated during the term of the option to purchase the security
underlying the option at the exercise price if the option is exercised.

     Funds may use put and call options for a variety of purposes. For example,
if a portfolio manager wishes to hedge a security a Fund owns against a decline
in price, the manager may purchase a put option on the underlying security;
I.E., purchase the right to sell the security to a third party at a stated
price. If the underlying security then declines in price, the manager can
exercise the put option, thus limiting the amount of loss resulting from the
decline in price. Similarly, if the manager intends to purchase a security at
some date in the future, the manager may purchase a call option on the security
today in order to hedge against an increase in its price before the intended
purchase date. Put and call options also can be used for speculative purposes.
For example, if a portfolio manager believes that the price of stocks generally
is going to rise, the manager may purchase a call option on a stock index, the
components of which are unrelated to the stocks held or intended to be
purchased. Finally, a portfolio manager may write options on securities owned in
order to realize additional income. Funds receive premiums from writing call or
put options, which they retain whether or not the options are exercised.

     By writing a call option, a Fund might lose the potential for gain on the
underlying security while the option is open, and by writing a put option a Fund
might become obligated to purchase the underlying security for more than its
current market price upon exercise. If a Fund purchases a put or call option,
any loss to the Fund is limited to the premium paid for, and transaction costs
paid in connection with, the option.

     OPTIONS ON SECURITIES. An option on a security provides the purchaser, or
"holder," with the right, but not the obligation, to purchase, in the case of a
"call" option, or sell, in the case of a "put" option, the security or
securities underlying the option, for a fixed exercise price up to a stated
expiration date or, in the case of certain options, on such date. The holder
pays a nonrefundable purchase price for the option, known as the "premium." The
maximum amount of risk the purchaser of the option assumes is equal to the
premium plus related transaction costs, although this entire amount may be lost.
The risk of the seller, or "writer," however, is potentially unlimited, unless
the option is "covered." A call option written by a Fund is "covered" if the
Fund owns the underlying security covered by the call or has an absolute and
immediate right to acquire that security without additional cash consideration
(or for additional cash consideration held in a segregated account by its
custodian) upon conversion or exchange of other securities held in its
portfolio. A call option is also covered if the Fund holds a call on the same
security and in the same principal amount as the call written where the exercise
price of the call held (a) is equal to or less than the exercise price of the
call written or (b) is greater than the exercise price of the call written if
the difference is maintained by the Fund in cash and liquid securities in a
segregated account with its custodian. A put option written by a Fund is
"covered" if the Fund maintains cash and liquid securities with a value equal to
the exercise price in a segregated account with its custodian, or else holds a
put on the same security and in the same principal amount as the put written
where the exercise price of the put held is equal to or greater than the
exercise price of the put written. If the writer's obligation is not so covered,
it is subject to the risk of the full change in value of the underlying security
from the time the option is written until exercise.

     Upon exercise of the option, the holder is required to pay the purchase
price of the underlying security, in the case of a call option, or to deliver
the security in return for the purchase price in the case of a put option.
Conversely, the writer is required to deliver the security, in the case of a
call option, or to purchase the security, in the case of a put option. Options
on securities which have been purchased or written may be closed out prior to
exercise


                                         -26-
<PAGE>

or expiration by entering into an offsetting transaction on the exchange on
which the initial position was established, subject to the availability of a
liquid secondary market.

     Options on securities and options on indexes of securities, discussed
below, are traded on national securities exchanges, such as the Chicago Board
Options Exchange and the New York Stock Exchange, which are regulated by the
SEC. The Options Clearing Corporation guarantees the performance of each party
to an exchange-traded option, by in effect taking the opposite side of each such
option. A holder or writer may engage in transactions in exchange-traded options
on securities and options on indexes of securities only through a registered
broker-dealer which is a member of the exchange on which the option is traded.

     In addition, options on securities and options on indexes of securities may
be traded on exchanges located outside the United States and over-the-counter
through financial institutions dealing in such options as well as the underlying
instruments. While exchange-traded options have a continuous liquid market,
over-the-counter options may not.

     OPTIONS ON STOCK INDEXES. In contrast to an option on a security, an option
on a stock index provides the holder with the right to make or receive a cash
settlement upon exercise of the option, rather than the right to purchase or
sell a security. The amount of this settlement is equal to (a) the amount, if
any, by which the fixed exercise price of the option exceeds (in the case of a
call) or is below (in the case of a put) the closing value of the underlying
index on the date of exercise, multiplied by (b) a fixed "index multiplier." The
purchaser of the option receives this cash settlement amount if the closing
level of the stock index on the day of exercise is greater than, in the case of
a call, or less than, in the case of a put, the exercise price of the option.
The writer of the option is obligated, in return for the premium received, to
make delivery of this amount if the option is exercised. As in the case of
options on securities, the writer or holder may liquidate positions in stock
index options prior to exercise or expiration by entering into closing
transactions on the exchange on which such positions were established, subject
to the availability of a liquid secondary market.

     A Fund will cover all options on stock indexes by owning securities whose
price changes, in the opinion of the Fund's adviser or sub-adviser, are expected
to be similar to those of the index, or in such other manner as may be in
accordance with the rules of the exchange on which the option is traded and
applicable laws and regulations. Nevertheless, where a Fund covers a call option
on a stock index through ownership of securities, such securities may not match
the composition of the index. In that event, the Fund will not be fully covered
and could be subject to risk of loss in the event of adverse changes in the
value of the index. The Funds will secure put options on stock indexes by
segregating assets equal to the option's exercise price, or in such other manner
as may be in accordance with the rules of the exchange on which the option is
traded and applicable laws and regulations.

     The index underlying a stock option index may be a "broad-based" index,
such as the Standard & Poor's 500 Index or the New York Stock Exchange Composite
Index, the changes in value of which ordinarily will reflect movements in the
stock market in general. In contrast, certain options may be based upon narrower
market indexes, such as the Standard & Poor's 100 Index, or on indexes of
securities of particular industry groups, such as those of oil and gas or
technology companies. A stock index assigns relative values to the stocks
included in the index and the index fluctuates with changes in the market values
of the stocks so included.

WARRANTS

     Horizon Fund, Spectrum Fund, Enterprise Fund, Cornerstone Fund, Bond Fund
and International Fund may invest in warrants.  Warrants are instruments that
allow investors to purchase underlying shares at a specified price (exercise
price) at a given future date.  The market price of a warrant is determined by
market participants by the addition of two distinct components:  (1) the price
of the underlying shares less the warrant's exercise price, and (2) the
warrant's premium that is attributed to volatility and leveraging power.
Warrants are pure speculation in that they have no voting rights, pay no
dividends and have no rights with respect to the assets of the corporation
issuing them.  The prices of warrants do not necessarily move parallel to the
prices of the underlying securities.

     It is not expected that Bond Fund will invest in common stocks or equity
securities other than warrants, but it may retain for reasonable periods of time
up to 5% of its total assets in common stocks acquired upon conversion of debt
securities or preferred stocks or upon exercise of warrants.


                                         -27-
<PAGE>

WARRANTS WITH CASH EXTRACTIONS

     International Fund may also invest up to 5% of its assets in warrants used
in conjunction with the cash extraction method.  If an investor wishes to
replicate an underlying share, the investor can use the warrant with cash
extraction method by purchasing warrants and holding cash.  The cash component
would be determined by subtracting the market price of the warrant from the
underlying share price.

     For example, ASSUME one share for company "Alpha" has a current share price
of $40 and issued warrants can be converted one for one share at an exercise
price of $31 exercisable two years from today.  Also ASSUME that the market
price of the warrant is $10 ($40 - $31 + $1) because investors are willing to
pay a premium ($1) for previously stated reasons.  If an investor wanted to
replicate an underlying share by engaging in a warrant with cash extraction
strategy, the amount of cash the investor would need to hold for every warrant
would be $30 ($40 - $10 = $30).  A warrant with cash extraction is, thus, simply
a synthetically created quasi-convertible bond.

     If an underlying share issues no or a low dividend and has an associated
warrant with a market price that is low relative to its share price, a warrant
with cash extraction may provide attractive cash yields and minimize capital
loss risk, provided the underlying share is also considered a worthy investment.
For example, ASSUME Alpha's share is an attractive investment opportunity and
its share pays no dividend.  Given the information regarding Alpha provided
above, also ASSUME that short-term cash currently yields 5% per year and that
the investor plans to hold the investment at least two years, barring
significant near-term capital appreciation.  If the share price were to fall
below $30, the warrant with cash extraction strategy would yield a lower loss
than the underlying share because an investor cannot lose more than the purchase
cost of the warrant (capital risk minimized).  The cash component for this
strategy would yield $3.08 after two years (compound interest).  The total value
of the underlying investment would be $43.08 versus $40.00 for the non-yielding
underlying share (attractive yield).  Finally, it is important to note that this
strategy will not be pursued if it is not economically more attractive than
underlying shares.

INDEX DEPOSITARY RECEIPTS

     Cornerstone Fund, Enterprise Fund, Spectrum Fund and Horizon Fund may each
invest up to 10% of its total assets in one or more types of depositary receipts
("DRs") as a means of tracking the performance of a designated stock index while
maintaining liquidity.  No more than 5% of a Fund's total assets may be
invested in any one DR.  The Fund may invest in S&P 500 Depositary Receipts
("SPDRs"), which track the S&P 500 Index; S&P MidCap 400 Depositary Receipts
("MidCap SPDRs"), which track the S&P MidCap 400 Index; and "Dow Industrial
Diamonds," which track the Dow Jones Industrial Average, or in other DRs which
track indexes, provided that such investments are consistent with the Fund's
investment objective as determined by the Fund's investment adviser.  Each of
these securities represents shares of ownership of a long term unit investment
trust (a type of investment company) that holds all of the stock included in the
relevant underlying index.


                                         -28-
<PAGE>

     DRs carry a price which equals a specified fraction of the value of the
designated index and are exchange traded.  As with other equity transactions,
brokers charge a commission in connection with the purchase of DRs.  In
addition, an asset management fee is charged in connection with the underlying
unit investment trust (which is in addition to the asset management fee paid by
the Fund).

     Trading costs for DRs are somewhat higher than those for stock index
futures contracts, but, because DRs trade like other exchange-listed equities,
they represent a quick and convenient method of maximizing the use of the Fund's
assets to track the return of a particular stock index.  DRs share in the same
market risks as other equity investments.

SHORT SALES AGAINST THE BOX

     Each Fund may sell securities "short against the box."  Whereas a short
sale is the sale of a security the Fund does not own, a short sale is "against
the box" if, at all times during which the short position is open, the Fund owns
at least an equal amount of the securities sold short or other securities
convertible into or exchangeable without further consideration for securities of
the same issue as the securities sold short.  Short sales against the box are
typically used by sophisticated investors to defer recognition of capital gains
or losses.  The Funds have no present intention to sell securities short in this
fashion.

DEFENSIVE PURPOSES

     The Funds may invest up to 20% of their respective net assets in cash or
cash items.  In addition, for temporary or defensive purposes, the Funds may
invest in cash or cash items without limitation.  The "cash items" in which
the Funds may invest, include short-term obligations such as rated commercial
paper and variable amount master demand notes; United States
dollar-denominated time and savings deposits (including certificates of
deposit); bankers' acceptances; obligations of the United States Government
or its agencies or instrumentalities; repurchase agreements collateralized by
eligible investments of a Fund; securities of other mutual funds which invest
primarily in debt obligations with remaining maturities of 13 months or less
(which investments also are subject to the advisory fee); and other similar
high-quality short-term United States dollar-denominated obligations.  The
other mutual funds in which the Funds may so invest include money market
funds advised by the Fund's investment adviser.

                           INVESTMENT RESTRICTIONS

     Each of the Funds is "diversified" as defined in the Investment Company Act
of 1940.  This means that at least 75% of the value of the Fund's total assets
is represented by cash and cash items, government securities, securities of
other investment companies, and securities of other issuers, which for purposes
of this calculation, are limited in respect of any one issuer to an amount not
greater in value than 5% of the Fund's total assets and to not more than 10% of
the outstanding voting securities of such issuer.


                                         -29-
<PAGE>

     The Money Market Fund is also subject to the investment restrictions of
Rule 2a-7 under the Investment Company Act of 1940, as amended (the "1940 Act"),
in addition to its other policies and restrictions discussed below.  Pursuant
to Rule 2a-7, the Fund is required to invest exclusively in securities that
mature within 397 days from the date of purchase and to maintain an average
weighted maturity of not more than 90 days.  Rule 2a-7 also requires that all
investments by the Fund be limited to United States dollar-denominated
investments that (a) present "minimal credit risk" and (b) are at the time of
acquisition "Eligible Securities."  Eligible Securities include, among
others, securities that are rated by two Nationally Recognized Statistical
Rating Organizations ("NRSROs") in one of the two highest categories for
short-term debt obligations, such as A-1 or A-2 by S&P, or Prime-1 or Prime-2
by Moody's.

     Rule 2a-7 also requires, among other things, that the Money Market Fund may
not invest, other than in U.S. "Government securities" (as defined in the 1940
Act), (a) more than 5% of its total assets in Second Tier Securities (i.e.,
Eligible Securities that are not rated by two NRSROs in the highest category
such as A-1 and Prime-1) and (b) more than the greater of 1% of its total assets
or $1,000,000 in Second Tier Securities of any one issuer.  The Fund's present
practice is not to purchase any Second Tier Securities.

     In addition to the foregoing limitations, each Fund is subject to
certain "fundamental" investment restrictions, described below, which may not
be changed without the vote of a "majority" of the Fund's outstanding shares.
 As used in the applicable Prospectus and this Statement of Additional
Information, "majority" means the lesser of (i) 67% of a Fund's outstanding
shares present at a meeting of the holders if more than 50% of the
outstanding shares are present in person or by proxy or (ii) more than 50% of
a Fund's outstanding shares.  Each Fund is also subject to certain other
investment restrictions which are not fundamental and may be changed by vote
of the Board of Directors without further shareholder approval.

FUNDAMENTAL RESTRICTIONS

     1.   Policy Regarding Borrowing and the Issuance of Senior Securities.

          The Fund will not borrow money or issue senior securities, except
          as permitted under the Investment Company Act of 1940, as amended,
          and as interpreted or modified from time to time by any regulatory
          authority having jurisdiction.


                                         -30-
<PAGE>

     2.   Policy Regarding Concentration in a Particular Industry.

          BOND FUND, CORNERSTONE FUND, ENTERPRISE FUND, HORIZON FUND,
          INTERNATIONAL BALANCED FUND AND SPECTRUM FUND.

          The Fund will not concentrate its investments in a particular
          industry. For purposes of this limitation, the U.S. Government, and
          state or municipal governments and their political subdivisions,
          are not considered members of any industry. Whether the Fund is
          concentrating in an industry shall be determined in accordance with
          the Investment Company Act of 1940, as amended, and as interpreted
          or modified from time to time by any regulatory authority having
          jurisdiction.

          MONEY MARKET FUND.

          The Fund will not concentrate its investments in a particular
          industry. For purposes of this limitation, the U.S. Government, and
          state or municipal governments and their political subdivisions,
          are not considered members of any industry. In addition, this
          limitation does not apply to investments in domestic banks. Whether
          the Fund is concentrating in an industry shall be determined in
          accordance with the Investment Company Act of 1940, as amended, and
          as interpreted or modified from time to time by any regulatory
          authority having jurisdiction.

          MORTGAGE SECURITIES FUND.

          Under normal market conditions, the Fund will concentrate its
          investments in the mortgage and mortgage-finance industry. The Fund
          will not concentrate its investments in any other particular
          industry. For purposes of this limitation, the U.S. Government, and
          state or municipal governments and their political subdivisions,
          are not considered members of any industry. Whether the Fund is
          concentrating in an industry shall be determined in accordance with
          the Investment Company Act of 1940, as amended, and as interpreted
          or modified from time to time by any regulatory authority having
          jurisdiction.

     3.   Policy Regarding Investments in Real Estate.

          The Fund will not purchase or sell real estate unless acquired as a
          result of ownership of securities or other instruments, but this shall
          not prevent the Fund from investing in securities or other instruments
          backed by real estate or interests therein or in securities of
          companies that deal in real estate or mortgages.

     4.   Policy Regarding Investments in Commodities.

          The Fund will not purchase physical commodities or contracts relating
          to physical commodities.

     5.   Policy Regarding Lending.

          The Fund may not make loans except as permitted under the Investment
          Company Act of 1940, as amended, and as interpreted or modified from
          time to time by any regulatory authority having jurisdiction.

     6.   Policy Regarding Underwriting of Securities.

          The Fund will not act as an underwriter of securities, except to the
          extent that the Fund may be deemed to be an underwriter, under the
          federal securities laws, in connection with the disposition of
          portfolio securities.

NON-FUNDAMENTAL RESTRICTIONS

     7.   The Fund will not acquire any new securities while borrowings,
          including borrowings through reverse repurchase agreements, exceed 5%
          of total assets.


                                         -31-
<PAGE>

     8.   The Fund will use futures contracts and options on futures contracts
          only (a) for "bona fide hedging purposes" (as defined in regulations
          of the Commodity Futures Trading Commission) or (b) for other purposes
          so long as the aggregate initial margins and premiums required in
          connection with non-hedging positions do not exceed 5% of liquidation
          value of the Fund's portfolio.

     9.   The Fund may mortgage, pledge or hypothecate its assets only to secure
          permitted borrowings. Collateral arrangements with respect to futures
          contracts, options thereon and certain options transactions are not
          considered pledges for purposes of this limitation.

     10.  The Fund may not make short sales of securities, other than short
          sales "against the box."

     11.  The Fund may not purchase securities on margin, but it may obtain such
          short-term credits as may be necessary for the clearance of securities
          transactions and it may make margin deposits in connection with
          futures contracts.

     12.  The Fund will not invest more than 15% (10% in the case of Money
          Market Fund) of its net assets in illiquid securities.

     13.  The total market value of securities against which the Fund may write
          call or put options will not exceed 20% of the Fund's total assets. In
          addition, the Fund will not commit more than 5% of its total assets to
          premiums when purchasing put or call options.

     With respect to each of the Funds, any investment policy set forth under
"Investing in the Fund - Investment Policies and Practices" in the applicable
Prospectus, under "Investment Objectives and Policies" above, or any restriction
set forth above which involves a maximum percentage of securities or assets
shall not be considered to be violated unless an excess over the percentage
occurs immediately after an acquisition of securities or utilization of assets
and results therefrom, or unless the Investment Company Act of 1940 provides
otherwise.


                                         -32-
<PAGE>

                                  PORTFOLIO TURNOVER

     Portfolio turnover is the ratio of the lesser of annual purchases or sales
of portfolio securities to the average monthly value of portfolio securities,
not including short-term securities.  A 100% portfolio turnover rate would
occur, for example, if the lesser of the value of purchases or sales of
portfolio securities for a particular year were equal to the average monthly
value of the portfolio securities owned during such year.

     Horizon Fund makes changes in its portfolio securities which are considered
advisable in light of market conditions.  Frequent changes may result in higher
brokerage and other costs for the Fund.  For the fiscal years ended
September 30, 2000 and 1999, the Fund's portfolio turnover rates were 109.3%,
and 60.1%, respectively.


     Spectrum Fund's objective and policies may cause the annual portfolio
turnover rate to be higher than the average turnover rate of other investment
companies.  Accordingly, the Fund may have high brokerage and other costs.  A
portfolio turnover rate that exceeds 100% is considered high and will result in
higher costs.  For the fiscal years ended September 30, 2000 and 1999, the
Fund's portfolio turnover rates were 132.0% and, 100.8%, respectively.


     Mortgage Securities Fund's investment activities may result in the Fund's
engaging in a considerable amount of trading of securities held for less than
one year.  Accordingly, it can be expected that the Fund will have a higher
turnover rate, and thus a higher incidence of brokerage and other costs, than
might be expected from investment companies which invest substantially all of
their funds on a long-term basis.  A portfolio turnover rate that exceeds 100%
is considered high and will result in higher costs.  For the fiscal years ended
September 30, 2000 and 1999, the Fund's portfolio turnover rates were 64.7% and
127.1%, respectively.

     Money Market Fund, consistent with its investment objective, attempts to
maximize yield through portfolio trading.  This may involve selling portfolio
instruments and purchasing different instruments to take advantage of
disparities of yields in different segments of the high grade money market or
among particular instruments within the same segment of the market.  As a
result, the Fund may have significant portfolio turnover.  There usually are no
brokerage commissions paid by the Fund for such purchases since such securities
are purchased on a net basis.  Since securities with maturities of less than one
year are excluded from required portfolio turnover rate calculations, the Fund's
portfolio turnover rate for reporting purposes is zero.

     Bond Fund makes changes in its portfolio securities which are considered
advisable in light of market conditions.  Portfolio turnover rates may vary
greatly from year to year and within a particular year and may also be affected
by cash requirements for redemptions of Fund shares.  Rate of portfolio turnover
is not a limiting factor, however, and particular holdings may be sold at any
time, if, in the opinion of the Fund's investment adviser, such a sale is
advisable.  A portfolio turnover rate that exceeds 100% is considered high and
will result in higher costs.  For the fiscal years ended September 30, 2000 and
1999, the Fund's portfolio turnover rates were 191.4% and 211.9%, respectively.


     Cornerstone Fund and Enterprise Fund each make changes in their portfolio
securities which are considered advisable in light of market conditions.
Frequent changes may result in higher brokerage and other costs for the Funds.
Portfolio turnover rates may vary greatly from year to year and within a
particular year and may also be affected by cash requirements for redemptions of
Fund shares.  Neither Fund emphasizes short-term trading profits.  For the
fiscal years ended September 30, 2000 and 1999, Cornerstone Fund's portfolio
turnover rate was 180.1% and 78.7%, respectively.  For the fiscal years ended
September 30, 2000 and 1999, Enterprise Fund's portfolio turnover rate was
181.5% and 99.3%, respectively.


                                         -33-
<PAGE>

     International Fund also makes changes in its portfolio securities which are
considered advisable in light of market conditions.  The Fund does not emphasize
short-term trading profits.  For the fiscal years ended September 30, 2000 and
1999, International Fund's portfolio turnover rate was 44.2% and 73.8%,
respectively.

                           DIRECTORS AND EXECUTIVE OFFICERS

     The names, addresses, principal occupations, and other affiliations of
directors and executive officers of each of the Funds are given below:

<TABLE>
<CAPTION>
                                Position with       Principal Occupation and other
Name and Address                  the Funds         Affiliations (Past 5 Years)
----------------                  ---------         ------------------------------
<S>                             <C>                 <C>
William N. Westhoff*            President           President, Treasurer and Director,
Advantus Capital                and Director        Advantus Capital Management, Inc.;
  Management, Inc.                                  Senior Vice President and Treasurer,
400 Robert Street North                             Minnesota Life Insurance Company;
St. Paul, Minnesota 55101                           Vice President and Director, Robert
                                                    Street Energy, Inc.; President, MCM
                                                    Funding 1997-1, Inc.; President, MCM
                                                    Funding 1998-1, Inc.; Senior Vice
                                                    President, Global Investments, American
                                                    Express Financial Corporation, Minneapolis,
                                                    Minnesota, from August 1994 to October
                                                    1997

Frederick P. Feuerherm*         Vice President,     Vice President, Assistant Secretary
Advantus Capital                Director and        and Director, Advantus Capital
  Management, Inc.              Treasurer           Management, Inc.; Vice President,
400 Robert Street North                             Minnesota Life Insurance Company;
St. Paul, Minnesota 55101                           Vice President and Director, MIMLIC
                                                    Funding, Inc.; Vice President and
                                                    Assistant Secretary, MCM Funding 1997-1,
                                                    Inc.; Vice President and Assistant
                                                    Secretary, MCM Funding 1998-1, Inc.

Ralph D. Ebbott                 Director            Retired, Vice President and Treasurer
409 Birchwood Avenue                                of Minnesota Mining and Manufacturing
White Bear Lake,                                    Company (industrial and consumer products)
 Minnesota 55110                                    through June 1989

Charles E. Arner                Director            Retired, Vice Chairman of The First
E-1218 First National                               National Bank of Saint Paul from
 Bank Building                                      November 1983 through June 1984;
332 Minnesota Street                                Chairman and Chief Executive Officer
St. Paul, Minnesota 55101                           of The First National Bank of Saint Paul
                                                    from October 1980 through November
                                                    1983

Ellen S. Berscheid              Director            Regents' Professor of Psychology at the
University of Minnesota                             University of Minnesota
N309 Elliott Hall
Minneapolis, Minnesota 55455

Michael J. Radmer               Secretary           Partner with the law firm of
Dorsey & Whitney LLP                                Dorsey & Whitney LLP
220 South Sixth Street
Minneapolis, Minnesota 55402
</TABLE>

----------------------------

* Denotes directors of the Funds who are "interested persons" (as defined under
the Investment Company Act of 1940) of the Funds.

----------------------------


                                         -34-
<PAGE>

     Legal fees and expenses are paid to the law firm of which Michael J. Radmer
is a partner.  No compensation is paid by any of the Advantus Funds to any of
its officers or directors who is affiliated with Advantus Capital Management,
Inc. ("Advantus Capital").  Each director of the Funds who is not affiliated
with Advantus Capital also a director of the other four investment companies of
which Advantus Capital is the investment adviser (12 investment companies in
total -- the "Fund Complex").  As of the date hereof, such directors receive
compensation in connection with all such investment companies which, in the
aggregate, is equal to $8,000 per year and $2,000 per meeting attended (and
reimbursement of travel expenses to attend directors' meetings).  The portion of
such compensation borne by any Fund is a pro rata portion based on the ratio
that such Fund's total net assets bears to the total net assets of the Fund
Complex. During the fiscal year ended September 30, 2000, each Director not
affiliated with Advantus Capital or was compensated by the funds in accordance
with the following table:


<TABLE>
<CAPTION>
                                     Pension or                       Total
                                     Retirement                       Compensation
                       Aggregate     Benefits        Estimated        From Funds and
                       Compensation  Accrued as      Annual           Fund Complex
                       from the      Part of Fund    Benefits Upon    Paid to
 Name of Director      Funds(1)      Expenses        Retirement       Directors
 ----------------      --------      --------        ----------       ---------
 <S>                   <C>           <C>             <C>              <C>
 Charles E. Arner      $2,864.89     n/a             n/a              $20,000
 Ellen S. Berscheid    $2,864.89     n/a             n/a              $20,000
 Ralph D. Ebbott       $2,864.89     n/a             n/a              $20,000
</TABLE>


(1)  During the fiscal year ended September 30, 2000, each Director not
affiliated with Advantus Capital received $464.66 from Horizon Fund, $581.16
from Spectrum Fund, $289.48 from Mortgage Securities Fund, $247.08 from Money
Market Fund, $148.47 from Bond Fund, $245.50 from Enterprise Fund, $635.82 from
Cornerstone Fund and $252.72 from International Fund.


     As of September 30, 2000, the directors and executive officers of the
Funds did not own any shares of the Funds, except for William N. Westhoff who
owned less than 1% of the outstanding shares of Horizon Fund, Mortgage
Securities Fund, Money Market Fund, Enterprise Fund and Cornerstone Fund,
Frederick P. Feuerherm who owned less than 1% of the outstanding shares of
Spectrum Fund, Michael J. Radmer who owned less than 1% of the outstanding
shares of Spectrum Fund, and Eric J. Bentley who owned less than 1% of the
outstanding shares of Horizon Fund.

                              DIRECTOR LIABILITY

     Under Minnesota law, the Board of Directors of each Fund owes certain
fiduciary duties to the Fund and to its shareholders.  Minnesota law provides
that a director "shall discharge the duties of the position of director in
good faith, in a manner the director reasonably believes to be in the best
interest of the corporation, and with the care an ordinarily prudent person
in a like position would exercise under similar circumstances."  Fiduciary
duties of a director of a Minnesota corporation include, therefore, both a
duty of "loyalty" (to act in good faith and act in a manner reasonably
believed to be in the best interests of the corporation) and a duty of "care"
(to act with the care an ordinarily prudent person in a like position would
exercise under similar circumstances).  Minnesota law also authorizes
corporations to eliminate or limit the personal liability of a director to
the corporation or its shareholders for monetary damages for breach of the
fiduciary duty of "care."  Minnesota law does not, however, permit a
corporation to eliminate or limit the liability of a director (i) for any
breach of the directors' duty of "loyalty" to the corporation or its
shareholders, (ii) for acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law, (iii) for authorizing a
dividend, stock repurchase or redemption or other distribution in violation
of Minnesota law or for violation of certain provisions of Minnesota
securities laws, or (iv) for any transaction from which the director derived
an improper personal benefit. The Articles of Incorporation of each Fund
limit the liability of directors to the fullest extent permitted by Minnesota
statutes, except to the extent that such liability cannot be limited as
provided in the Investment Company Act of 1940 (which prohibits any
provisions which purport to limit the liability of directors arising from
such directors' willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of their role as directors).


                                         -35-
<PAGE>

     Minnesota law does not eliminate the duty of "care" imposed upon a
director.  It only authorizes a corporation to eliminate monetary liability for
violations of that duty.  Minnesota law, further, does not permit elimination or
limitation of liability of "officers" to the corporation for breach of their
duties as officers (including the liability of directors who serve as officers
for breach of their duties as officers).  Minnesota law does not permit
elimination or limitation of the availability of equitable relief, such as
injunctive or rescissionary relief.  Further, Minnesota law does not permit
elimination or limitation of a director's liability under the Securities Act of
1933 or the Securities Exchange Act of 1934, and it is uncertain whether and to
what extent the elimination of monetary liability would extend to violations of
duties imposed on directors by the Investment Company Act of 1940 and the rules
and regulations adopted under such Act.

                     INVESTMENT ADVISORY AND OTHER SERVICES

GENERAL

     Advantus Capital Management, Inc. ("Advantus Capital") has been the
investment adviser and manager of each of the Funds since March 1, 1995.  Prior
to that date the Funds' investment adviser was MIMLIC Asset Management Company
("MIMLIC Management"), formerly the parent company of Advantus Capital.  Ascend
Financial Services, Inc. ("Ascend Financial") acts as the Funds' underwriter.
Both Advantus Capital and Ascend Financial act as such pursuant to written
agreements that will be periodically considered for approval by the directors or
shareholders of the Fund.  The address of both Advantus Capital and Ascend
Financial is 400 Robert Street North, St. Paul, Minnesota 55101.

CONTROL AND MANAGEMENT OF ADVANTUS CAPITAL AND ASCEND FINANCIAL

     Advantus Capital was incorporated in Minnesota in June, 1994, and is a
wholly-owned subsidiary of Minnesota Life Insurance Company ("Minnesota
Life"). Minnesota Life is a third-tier subsidiary of a mutual insurance
holding company called Minnesota Mutual Companies, Inc.  Minnesota Life was
organized in 1880, and has assets of more than $16.5 billion.  Ascend
Financial is a subsidiary of Advantus Capital.  William N. Westhoff,
President and a Director of each of the Funds, is President, Treasurer and
Director of Advantus Capital.  Frederick P. Feuerherm, Vice President,
Treasurer and a Director of each of the Funds, is a Vice President, Assistant
Secretary and Director of Advantus Capital.

INVESTMENT ADVISORY AGREEMENT

     Advantus Capital acts as investment adviser and manager of the Funds under
Investment Advisory Agreements (the "Advisory Agreements") dated May 1, 2000
for each Fund, each of which Advisory Agreements was approved by shareholders on
April 17, 2000 in the case of the Cornerstone, Enterprise and International
Balanced Funds, and on April 28, 2000 in the case of the Horizon, Spectrum,
Mortgage Securities, Money Market and Bond Funds.  The Advisory Agreements were
last approved by the Board of Directors of each Fund (including a majority of
the directors who are not parties to the contract, or interested persons of any
such party) on January 25, 2001.  The Advisory Agreements will terminate
automatically in the event of their assignment.  In addition, each Advisory
Agreement is terminable at any time, without penalty, by the Board of Directors
of the respective Fund or by vote of a majority of the Fund's outstanding voting
securities on not more than 60 days' written notice to Advantus Capital, and
by Advantus Capital on 60 days' written notice to the Fund.  Unless sooner
terminated, each Advisory Agreement shall continue in effect for more than
two years after its execution only so long as such continuance is
specifically approved at least annually by either the Board of Directors of
the respective Fund or by a vote of a majority of the outstanding voting
securities, provided that in either event such continuance is also approved
by the vote of a majority of the directors who are not parties to the
Advisory Agreement, or interested persons of such parties, cast in person at
a meeting called for the purpose of voting on such approval.

     Pursuant to the Advisory Agreements each Fund pays Advantus Capital an
advisory fee equal on an annual basis to a percentage of that Fund's average
daily net assets as set forth in the following table:


                                         -36-
<PAGE>

<TABLE>
<CAPTION>
                                                          ADVISORY FEE AS PERCENTAGE
FUND                                                         OF AVERAGE NET ASSETS
----                                                         ---------------------
<S>                                                       <C>
HORIZON FUND:
     On the first $1 billion in assets                                 .70%
     On the next $1 billion in assets                                  .65%
     On all assets in excess of $2 billion                             .60%
SPECTRUM FUND:
     On the first $1 billion in assets                                 .50%
     On the next $1 billion in assets                                  .48%
     On all assets in excess of $2 billion                             .46%
MORTGAGE SECURITIES FUND:
     On the first $1 billion in assets                                 .475%
     On the next $1 billion in assets                                  .46%
     On all assets in excess of $2 billion                             .45%
MONEY MARKET FUND:
     On the first $500 million in assets                               .50%
     On the next $500 million in assets                                .45%
     On the next $1 billion in assets                                  .425%
     On all assets in excess of $2 billion                             .40%
BOND FUND:
     On the first $250 million in assets                               .60%
     On the next $250 million in assets                                .55%
     On the next $500 million in assets                                .50%
     On all assets in excess of $1 billion                             .45%
CORNERSTONE FUND:
     On the first $500 million in assets                               .70%
     On the next $500 million in assets                                .65%
     On the next $1 billion in assets                                  .60%
     On all assets in excess of $2 billion                             .55%
ENTERPRISE FUND:
     On the first $1 billion in assets                                 .70%
     On the next $1 billion in assets                                  .68%
     On all assets in excess of $2 billion                             .66%
INTERNATIONAL FUND:
     On the first $250 million in assets                               .70%
     On the next $250 million in assets                                .65%
     On the next $500 million in assets                                .60%
     On all assets in excess of $1 billion                             .55%
</TABLE>

     Prior to May 1, 2000, each Fund paid Advantus Capital an advisory fee, in
accordance with its prior investment advisory agreement, equal on an annual
basis to a percentage of that Fund's average daily net assets as set forth in
the following table:

<TABLE>
<CAPTION>
                                                 Advisory Fee Paid Prior to May 1, 2000 as Percentage
     Fund                                                       of Average Net Assets
     ----                                                    --------------------------
     <S>                                         <C>
     Horizon Fund                                                      .80%
     Spectrum Fund                                                     .60%
     Mortgage Securities Fund                                          .575%
     Money Market Fund                                                 .50%
     Bond Fund                                                         .70%
     Cornerstone Fund                                                  .80%
     Enterprise Fund                                                   .80%
     International Fund:
        On the first $25 million in assets                             .95%
        On the next $25 million in assets                              .80%
        On the next $50 million in assets                              .75%
        On all assets in excess of $100 million                        .65%
</TABLE>

     From the advisory fee received from Enterprise Fund, Advantus Capital pays
Credit Suisse Asset Management, LLC ("CSAM") a sub-advisory fee equal to .65% of
the first $500 million of Enterprise Fund's average daily net assets, .60% on
the next $500 million of assets, .50% on the next $1 billion of assets, and .45%
on all assets in excess of $2 billion. For purposes of applying the preceding
breakpoints, the assets of the Fund are combined with all other assets
sub-advised by CSAM for Advantus Capital, as determined on March 31st, June
30th, September 30th and December 31st of each year, with the percentage fee
determined on such date being applicable to the following period and applied
back to the first dollar of Fund assets.

     From the advisory fee received from International Fund, Advantus Capital
pays Templeton Investment Counsel, Inc. ("Templeton Counsel") a sub-advisory
fee equal to .70% on the first $25 million of International Fund's average
daily net assets, .55% on the next $25 million, .50% on the next $50 million,
and .40% on all average daily net assets in excess of $100 million. Solely
for the purpose of establishing the appropriate breakpoints at which the
Fund's subadvisory fee shall be calculated, the breakpoints are based on the
aggregation of the monthly market value of any non-mutual fund account of
Minnesota Life or any affiliate thereof advised or subadvised by Templeton
Counsel or any advisory affiliate thereof as well as the average daily net
assets of any U.S. registered mutual fund advised by Advantus and sub-advised
by Templeton Counsel or any advisory affiliate thereof. For fee-stacking
purposes, the asset classes so managed with the highest fee schedules shall
be counted first as assets of this Fund in order to determine this Fund's
appropriate starting breakpoint when the following conditions are satisfied:
(i) Franklin Advisors, Inc. an affiliate of Templeton Counsel provides other
sub-advisory services to Advantus Capital, beginning on or after February 15,
2000, covering small company domestic equities in an amount in excess of $100
million; and (ii) Minnesota Life, the parent company of Advantus Capital,
offers as investment options in its registered variable insurance contracts
the Templeton Developing Markets Fund and any other two funds in the
Franklin/Templeton Variable Insurance Products Fund.

     The fees paid by the Funds during the fiscal years ended September 30,
2000, 1999 and 1998 (before Advantus Capital's absorption of certain expenses,
described below) were as follows:


<TABLE>
<CAPTION>
     Fund                         2000             1999             1998
     ----                      ----------       ----------       ----------
     <S>                       <C>              <C>              <C>
     Horizon Fund              $  725,918       $  646,511       $  503,499
     Spectrum Fund                624,481          613,091          517,339
     Mortgage Securities Fund     260,837          287,662          239,294
     Money Market Fund            204,795          261,232          288,221
     Bond Fund                    162,489          207,779          187,219
     Cornerstone Fund             797,770        1,005,217        1,091,329
     Enterprise Fund              499,093          366,946          397,522
     International Fund           456,877          499,749          515,264
</TABLE>

     For this fee, Advantus Capital acts as investment adviser and manager for
the Funds or, in the case of Enterprise Fund and International Fund, pays
CSAM and Templeton Counsel, respectively, to serve as investment
sub-advisers. Effective May 1, 2000, each Fund pays its own transfer agent
and shareholder servicing expenses.  Prior to that date, Advantus Capital
paid the transfer agent and shareholder servicing expenses for each Fund
other than Money Market Fund.


                                         -37-
<PAGE>

     Under the Advisory Agreements, Advantus Capital furnishes the Funds office
space and all necessary office facilities, equipment and personnel for servicing
the investments of the Funds, and pays the salaries and fees of all officers and
directors of the Funds who are affiliated with Advantus Capital.  In addition,
except to the extent that Ascend Financial receives Rule 12b-1 distribution fees
(see "Payment of Certain Distribution Expenses of the Funds" below), Ascend
Financial bears all promotional expenses in connection with the distribution of
the Funds' shares, including paying for prospectuses and statements of
additional information for new shareholders, and shareholder reports for new
shareholders, and the costs of sales literature.  The Funds pay all other
expenses not so expressly assumed.

     Under the Advisory Agreements for each Fund other than Money Market Fund,
Advantus Capital has agreed to absorb all Fund costs and expenses which exceed a
specified percentage of the average daily net assets of each class of share
through the fiscal year of the Fund ending September 30, 2001, as set forth in
the following table:

<TABLE>
<CAPTION>
                                                       Expenses Absorbed in Excess of
                                                 Specified Percentage of Average Net Assets
                                                 ------------------------------------------
Fund                                             Class A           Class B          Class C
----                                             -------           -------          -------
<S>                                              <C>              <C>               <C>
Horizon Fund                                     1.35%            2.10%             2.10%
Spectrum Fund                                    1.12%            1.87%             1.87%
Mortgage Securities Fund                          .95%            1.70%             1.70%
Bond Fund                                        1.15%            1.90%             1.90%
Cornerstone Fund                                 1.24%            1.99%             1.99%
Enterprise Fund                                  1.38%            2.23%             2.23%
International Fund                               1.62%            2.42%             2.42%
</TABLE>

     During the fiscal years ended September 30, 2000, 1999 and 1998 Advantus
Capital voluntarily absorbed certain expenses of the Funds (which do not include
certain Rule 12b-1 fees waived by Ascend Financial) as set forth below:


<TABLE>
<CAPTION>
     Fund                         2000         1999           1998
     ----                         ----         ----           ----
     <S>                        <C>          <C>            <C>
     Horizon Fund               $ 90,632     $      0       $      0
     Spectrum Fund                95,590            0              0
     Mortgage Securities Fund    180,596      119,827        119,413
     Money Market Fund           278,882      232,015        150,711
     Bond Fund                   168,365      112,547        101,242
     Cornerstone Fund            106,763            0              0
     Enterprise Fund              59,225            0              0
     International Fund           32,244            0         92,869
</TABLE>

INTERNATIONAL FUND SUB-ADVISER - TEMPLETON COUNSEL

     Templeton Investment Counsel, Inc., (hereinafter "Templeton Counsel"), a
Florida corporation with principal offices at 500 East Broward Boulevard, Fort
Lauderdale, Florida 33394 has been retained under an investment sub-advisory
agreement to provide investment advice and, in general, to conduct the
management investment program of the International Fund, subject to the general
control of the Board of Directors of the Fund.  Templeton Counsel is an
indirect, wholly-owned subsidiary of Templeton Worldwide, Inc., Fort Lauderdale,
Florida, which in turn is a wholly-owned subsidiary of Franklin Resources, Inc.
("Franklin").

     Franklin is a large, diversified financial services organization.  Through
its operating subsidiaries, Franklin provides a variety of investment products
and services to institutions and individuals throughout the United States and
abroad.  One of the country's largest mutual fund organizations, Franklin's
business includes the provision of management, administrative and distribution
services to the Franklin/Templeton Group of Funds, which is distributed through
a nationwide network of banks, broker-dealers, financial planners and investment
advisers.  Franklin is headquartered in San Mateo, California, and its common
stock is listed on the New York Stock Exchange under the ticker symbol BEN.


                                         -38-
<PAGE>

     Certain clients of Templeton Counsel may have investment objectives and
policies similar to that of the International Fund.  Templeton Counsel may, from
time to time make recommendations which result in the purchase or sale of a
particular security by its other clients simultaneously with Fund.  If
transactions on behalf of more than one client during the same period increase
the demand for securities being purchased or the supply of securities being
sold, there may be an adverse effect on price.  It is the policy of Templeton
Counsel to allocate advisory recommendations and the placing of orders in a
manner which is deemed equitable by Templeton Counsel to the accounts involved,
including the International Fund.  When two or more of the clients of Templeton
Counsel (including the International Fund) are purchasing the same security on a
given day from the same broker-dealer, such transactions may be averaged as to
price.

INTERNATIONAL FUND INVESTMENT SUB-ADVISORY AGREEMENT - TEMPLETON COUNSEL

     Templeton Counsel acts as an investment sub-adviser to the International
Fund under an Investment Sub-Advisory Agreement (the "Templeton Agreement")
with Advantus Capital dated March 1, 1995, approved by shareholders of the
Fund on February 14, 1995. The Templeton Agreement, as amended, was last
approved for continuance by the Board of Directors of the Fund, including a
majority of the Directors who are not a party to the Templeton Agreement or
interested persons of any such party, on January 25, 2001.  The Templeton
Agreement will terminate automatically upon the termination of the Advisory
Agreement and in the event of its assignment.  In addition, the Templeton
Agreement is terminable at any time, without penalty, by the Board of
Directors of the Fund, by Advantus Capital or by a vote of the majority of
the International Fund's outstanding voting securities on 60 days' written
notice to Templeton Counsel and by Templeton Counsel on 60 days' written
notice to Advantus Capital.  Unless sooner terminated, the Templeton
Agreement shall continue in effect from year to year if approved at least
annually by the Board of Directors of the Fund or by a vote of a majority of
the outstanding voting securities of the International Fund, provided that in
either event such continuance is also approved by the vote of a majority of
the directors who are not interested persons of any party to the Templeton
Agreement, cast in person at a meeting called for the purpose of voting on
such approval.

ENTERPRISE FUND SUB-ADVISER - CSAM

     Credit Suisse Asset Management, LLC (CSAM) has been retained under an
investment sub-advisory agreement to provide investment advise and, in general,
to conduct the management of the Enterprise Fund, subject to the general control
of the Board of Directors of the Fund. CSAM is a registered investment adviser
under the Investment Advisers Act of 1940.

     CSAM, located at 153 East 53rd Street, New York, New York 10022, serves
as an investment sub-adviser to the Enterprise Fund pursuant to a written
agreement. CSAM is an indirect wholly-owned U.S. subsidiary of Credit Suisse
Group ("Credit Suisse"). Credit Suisse is a global financial services
company, providing a comprehensive range of banking and insurance products.
Active on every continent and in all major financial centers, Credit Suisse
comprises five business units - Credit Suisse Asset Management, LLC (asset
management); Credit Suisse First Boston (investment banking); Credit Suisse
Private Banking (private banking); Credit Suisse (retail banking); and
Winterthur (insurance). Credit Suisse has approximately 62,000 people
worldwide. The principal business address of Credit Suisse if Paradeplatz 8,
CH 8070, Zurich, Switzerland. CSAM, formerly known as BEA Associates,
together with its predecessor firms, has been engaged in the investment
advisory business for over 60 years.

ENTERPRISE FUND INVESTMENT SUB-ADVISORY AGREEMENT - CSAM

     CSAM acts as investment sub-adviser of the Enterprise Fund under an
Investment Sub-Advisory Agreement (the CSAM Agreement) with Advantus Capital
dated May 1, 2000, and approved by shareholders of the Fund on April 17, 2000.
The CSAM Agreement was last approved for continuance by the Board of Directors
of the Fund, including a majority of the Directors who are not a party to the
CSAM Agreement or interest persons of any such party, on January 25, 2001.
Prior to May 1, 2000, the Enterprise Fund was managed directly by Advantus
Capital. The CSAM Agreement will terminated automatically upon the termination
of the Fund's Advisory Agreement and in the event of its assignment. In
addition, the CSAM Agreement is terminable at any time, without penalty, by the
Board of Directors of the Fund, by Advantus Capital or by vote of a majority of
the Fund's outstanding voting securities on 60 days' written notice to CSAM, and
by CSAM on 60 days' written notice to Advantus Capital. Unless sooner
terminated, the CSAM Agreement shall continue in effect from year to year if
approved at least annually either by the Board of Directors of the Fund or by a
vote of a majority of the outstanding voting securities of the Fund, provided
that in either event such continuance is also approved by the vote of a majority
of the Directors who are not interested persons of any party to the CSAM
Agreement, cast in person at a meeting called for the purpose of voting on such
approval.

CODE OF ETHICS

     Advantus Capital, Ascend Financial and each of the Funds has adopted a Code
of Ethics in accordance with the Investment Company Act of 1940 and the rules
and regulations thereunder. The private investment activities of personnel
covered by the Code of Ethics are restricted in accordance with the Code's
provisions, but, subject to such provisions, personnel may invest in securities,
including securities that may be purchased or held by the Funds.

DISTRIBUTION AGREEMENT

     Ascend Financial acts as the underwriter of the Funds' shares.  The Board
of Directors of each Fund, on January 25, 2001, including a majority of the
directors who are not parties to the contract, or interested persons of any such
party, last approved the respective Fund's Distribution Agreement with Ascend
Financial (the "Distribution Agreements"), each dated October 22, 1998.  During
the fiscal years ended September 30, 2000, 1999 and 1998, the commissions
received by Ascend Financial under the Distribution Agreements, except in the
case of Money Market Fund (which does not provide for Ascend Financial to
receive a commission), with respect to shares of all classes under the
Distribution Agreements were as follows:


<TABLE>
<CAPTION>
     Fund                             2000           1999           1998
     ----                             ----           ----           ----
     <S>                            <C>            <C>            <C>
     Horizon Fund                   $385,277       $187,561       $321,515
     Spectrum Fund                   437,766        244,604        418,271
     Mortgage Securities Fund         73,738        103,245        268,951
     Bond Fund                       101,969         69,196        166,299
     Cornerstone Fund                345,082         81,278        488,199
     Enterprise Fund                 158,512         32,359        113,663
     International Fund              153,603         47,616        225,967
</TABLE>

During the same periods Ascend Financial retained from these commissions the
following amounts:


                                         -39-
<PAGE>

<TABLE>
<CAPTION>
     Fund                         2000           1999           1998
     ----                         ----           ----           ----
     <S>                        <C>            <C>            <C>
     Horizon Fund               $33,780        $26,961        $30,329
     Spectrum Fund               44,385         42,214         44,702
     Mortgage Securities Fund    13,015         15,596         12,159
     Bond Fund                    1,342          6,279         10,115
     Cornerstone Fund             9,265          8,432         34,703
     Enterprise Fund              6,623          4,670         10,899
     International Fund           9,942          4,725         19,461
</TABLE>

The remainder of these commissions was paid to registered representatives of
Ascend Financial or to broker-dealers who have selling agreements with Ascend
Financial.

     Each Distribution Agreement may be terminated by the respective Fund or
Ascend Financial at any time by the giving of 60 days' written notice, and
terminates automatically in the event of its assignment.  Unless sooner
terminated, the Distribution Agreement for the respective Fund shall continue in
effect for more than two years after its execution only so long as such
continuance is specifically approved at least annually by either the Board of
Directors of the Fund or by a vote of a majority of the outstanding voting
securities, provided that in either event such continuance is also approved by
the vote of a majority of the directors who are not parties to the Distribution
Agreement, or interested persons of such parties, cast in person at a meeting
called for the purpose of voting on such approval.

     The Distribution Agreements require Ascend Financial to pay all advertising
and promotional expenses in connection with the distribution of the Funds'
shares including paying for Prospectuses and Statements of Additional
Information (if any) for new shareholders, shareholder reports for new
shareholders, and the costs of sales literature.

     In the Distribution Agreements, Ascend Financial undertakes to indemnify
the Funds against all costs of litigation and other legal proceedings, and
against any liability incurred by or imposed upon the Funds in any way arising
out of or in connection with the sale or distribution of the Funds' shares,
except to the extent that such liability is the result of information which was
obtainable by Ascend Financial only from persons affiliated with the Funds but
not with Ascend Financial.

PAYMENT OF CERTAIN DISTRIBUTION EXPENSES OF THE FUNDS

     Money Market Fund has adopted a Plan of Distribution, and each of the other
Funds has adopted separate Plans of Distribution applicable to Class A shares,
Class B shares and Class C shares, respectively, relating to the payment of
certain distribution and/or shareholder servicing expenses pursuant to Rule
12b-1 under the Investment Company Act of 1940.  Money Market Fund, pursuant to
its Plan of Distribution, pays a fee to Ascend Financial which, on an annual
basis, is equal to .25% of the Fund's average daily net assets, and is to be
used to pay certain expenses incurred in connection with servicing shareholder
accounts.  Each of the other Funds, pursuant to its Plans of Distribution, also
pays fees to Ascend Financial which equal, on an annual basis, a percentage of
the Fund's average daily net assets attributable to Class A shares, Class B
shares and Class C shares, respectively, as set forth in the following table:

<TABLE>
<CAPTION>
                                        Rule 12b-1 Fee as Percentage
                                of Average Daily Net Assets Attributable to
                                -------------------------------------------
     Fund                  Class A Shares     Class B Shares      Class C Shares
     ----                  --------------     --------------      --------------
<S>                        <C>                <C>                 <C>
Horizon Fund                    .25%              1.00%               1.00%
Spectrum Fund                   .25%              1.00%               1.00%
Mortgage Securities Fund        .25%              1.00%               1.00%
Bond Fund                       .25%              1.00%               1.00%
Cornerstone Fund                .25%              1.00%               1.00%
Enterprise Fund                 .25%              1.00%               1.00%
International Fund              .25%              1.00%               1.00%
</TABLE>


                                         -40-
<PAGE>

     Such fees are used for distribution-related services for Class B and C
shares and for servicing of shareholder accounts in connection with Class A, B
and C shares.

     A portion of the Rule 12b-1 fees payable by the Advantus Multiple Class
Funds with respect to Class B and Class C shares equal to 0.75% of the average
daily net assets attributable to such Class B and Class C shares, constitute
distribution fees designed to compensate Ascend Financial for advertising,
marketing and distributing the shares of the Advantus Multiple Class Funds.

     The distribution fees may be used by Ascend Financial for the purpose of
financing any activity which is primarily intended to result in the sale of
shares of the particular Fund.  For example, such distribution fee may be used
by Ascend Financial:  (a) to compensate broker-dealers, including Ascend
Financial and its registered representatives, for their sale of a Fund's shares,
including the implementation of the programs described below with respect to
broker-dealers, banks, and other financial institutions; and (b) to pay other
advertising and promotional expenses in connection with the distribution of a
Fund's shares.  These advertising and promotional expenses include, by way of
example but not by way of limitation, costs of prospectuses for other than
current shareholders; preparation and distribution of sales literature;
advertising of any type; expenses of branch offices provided jointly by Ascend
Financial and any affiliate thereof; and compensation paid to and expenses
incurred by officers, employees or representatives of Ascend Financial or of
other broker-dealers, banks, or financial institutions.

     All of the Rule 12b-1 fee payable with respect to Class A shares and a
portion of the Rule 12b-1 fee payable with respect to Class B and Class C
shares, of each of the Advantus Multiple Class Funds, equal to .25% of the
average daily net assets attributable to such Class A, B and Class C shares,
constitute a shareholder servicing fee designed to compensate Ascend Financial
for the provision of certain services to the holders of Class A, B and Class C
shares.

     Amounts expended by the Funds under the respective Plan of Distribution are
expected to be used for the implementation by Ascend Financial of a dealer
incentive program.  Pursuant to the program, Ascend Financial may provide
compensation to investment dealers for the provision of distribution assistance
in connection with the sale of the Funds' shares to such dealers' customers and
for the provision of administrative support services to customers who directly
or beneficially own shares of the Funds.  The distribution assistance and
administrative support services rendered by dealers may include, but are not
limited to, the following:  distributing sales literature; answering routine
customer inquiries concerning the Funds; assisting customers in changing
dividend options, account designation and addresses, and in enrolling into the
pre-authorized check plan or systematic withdrawal plan; assisting in the
establishment and maintenance of customer accounts and records and in the
processing of purchase and redemption transactions; investing dividends and any
capital gains distributions automatically in the Funds' shares and providing
such other information and services as the Funds or the customer may reasonably
request.  Such fees for servicing customer accounts would be in addition to the
portion of the sales charge received or to be received by dealers which sell
shares of the Funds.

     Ascend Financial may also provide compensation to certain institutions such
as banks ("Service Organizations") which have purchased shares of the Funds for
the accounts of their clients, or which have made the Funds' shares available
for purchase by their clients, and/or which provide continuing service to such
clients.  Applicable laws may prohibit certain banks from engaging in the
business of underwriting securities. In such circumstances, Ascend Financial,
if so requested, will engage such banks as Service Organizations only to perform
administrative and shareholder servicing functions, but at the same fees and
other terms applicable to dealers.  If a bank were prohibited from acting as a
Service Organization, its shareholder clients would be permitted to remain
shareholders of the Funds and alternative means for continuing servicing of such
shareholders would be sought.  In such event changes in the operation of the
Funds might occur and a shareholder serviced by such bank might no longer be
able to avail itself of any automatic investment or other services then being
provided by the bank.  It is not expected that shareholders would suffer any
adverse financial consequences as a result of any of these occurrences.


                                         -41-
<PAGE>

     In addition, the applicable Plan of Distribution contains, among other
things, provisions complying with the requirements of Rule 12b-1 discussed
below.  In particular, each Plan provides that (1) the Plan will not take
effect until it has been approved by a vote of a majority of the outstanding
voting securities of the Fund, and by a majority vote of both the full board
of directors of the Fund and those directors who are not interested persons
of the Fund and who have no direct or indirect financial interest in the
operation of the Plan or in any agreements relating to it (the Independent
Directors), (2) the Plan will continue in effect from one year to another so
long as its continuance is specifically approved annually by a majority vote
of both the full board of directors and the Independent Directors, (3) the
Plan may be terminated at any time, without penalty, by vote of a majority of
the Independent Directors or by a vote of a majority of the outstanding
voting securities of the Fund, (4) the Plan may not be amended to increase
materially the amount of the fees payable thereunder unless the amendment is
approved by a vote of a majority of the outstanding voting securities of the
Fund, and all material amendments must be approved by a majority vote of both
the full board of directors and the Independent Directors, (5) while the Plan
is in effect, the selection and nomination of any new Independent Directors
is committed to the discretion of the Independent Directors then in office,
and (6) the Fund's underwriter will prepare and furnish to the board of
directors, and the board of directors will review, at least quarterly,
written reports which set forth the amounts expended under the Plan and the
purposes for which those expenditures were made.

     Rule 12b-1(b) provides that any payments made by an investment company in
connection with the distribution of its shares may only be made pursuant to a
written plan describing all material aspects of the proposed financing of
distribution and also requires that all agreements with any person relating
to implementation of the plan must be in writing.  In addition, Rule
12b-1(b)(2) requires that such plan, together with any related agreements, be
approved by a vote of the board of directors and of the directors who are not
interested persons of the investment company and have no direct or indirect
financial interest in the operation of the plan or in any agreements related
to the plan, cast in person at a meeting called for the purpose of voting on
such plan or agreements.  Rule 12b-1(b)(3) requires that the plan or
agreement provide, in substance:  (1) that it shall continue in effect for a
period of more than one year from the date of its execution or adoption only
so long as such continuance is specifically approved at least annually in the
manner described in paragraph (b)(2) of Rule 12b-1; (2) that any person
authorized to direct the disposition of monies paid or payable by the
investment company pursuant to the plan or any related agreement shall
provide to the investment company's board of directors, and the directors
shall review, at least quarterly, a written report of the amounts so expended
and the purposes for which such expenditures were made; and (3) in the case
of a plan, that it may be terminated at any time by vote of a majority of the
members of the board of directors of the investment company who are not
interested persons of the investment company and have no direct or indirect
financial interest in the operation of the plan or in any agreements related
to the plan or by vote of a majority of the outstanding voting securities of
the investment company.  Rule 12b-1(b)(4) requires that such plans may not be
amended to increase materially the amount to be spent for distribution
without shareholder approval and that all material amendments of the plan
must be approved in the manner described in paragraph (b)(2) of Rule 12b-1.
Rule 12b-1(c) provides that the investment company may rely upon Rule
12b-1(b) only if selection and nomination of the investment company's
disinterested directors are committed to the discretion of such disinterested
directors.  Rule 12b-1(e) provides that the investment company may implement
or continue a plan pursuant to Rule 12b-1(b) only if the directors who vote
to approve such implementation or continuation conclude, in the exercise of
reasonable business judgment and in light of their fiduciary duties under
state law, and under Sections 36(a) and (b) of the Investment Company Act of
1940, that there is a reasonable likelihood that the plan will benefit the
investment company and its shareholders.  At the Board of Directors meeting
held January 25, 2001, the directors of the Funds so concluded.


     During the fiscal year ended September 30, 2000, each of the Advantus
Multiple Class Funds made payments under its Plans of Distribution applicable to
Class A, Class B and Class C shares as set forth below (distribution fees waived
by Ascend Financial, if any, are shown in parentheses).


<TABLE>
<CAPTION>
                                       Class A                    Class B      Class C
                                       -------                    -------      -------
     <S>                        <C>                               <C>          <C>
     Horizon Fund                      $  164,723     (n/a)       $274,046     $25,602
     Spectrum Fund                        198,566     (n/a)        265,649      59,740
     Mortgage Securities Fund              78,806     (n/a)        138,474      34,497
     Bond Fund                             40,701     (n/a)         70,282      12,807
     Cornerstone Fund                     219,141     (n/a)        156,522      15,842
     Enterprise Fund                      138,888  (55,555)         90,784      11,787
     International Fund                   125,804  (25,174)         52,457      20,248
</TABLE>


                                         -42-
<PAGE>

     Money Market Fund made no payments under its Plan of Distribution during
the fiscal year ended September 30, 2000.  Ascend Financial waived distribution
fees from Money Market Fund in the amount of $102,669 during such period.

     The Plans of Distribution could be construed as "compensation plans"
because Ascend Financial is paid a fixed fee and is given discretion concerning
what expenses are payable under the Plans of Distribution.  Under a compensation
plan, the fee to the distributor is not directly tied to distribution expenses
actually incurred by the distributor, thereby permitting the distributor to
receive a profit if amounts received exceed expenses.  Ascend Financial may
spend more or less for the distribution and promotion of the Funds' shares than
it receives as distribution fees pursuant to the Plans of Distribution.
However, to the extent fees received exceed expenses, including indirect expense
such as overhead, Ascend Financial could be said to have received a profit.

TRANSFER AGENT AND ADMINISTRATIVE SERVICES

     Effective May 1, 2000, each Fund pays its own transfer agent costs.
Prior to that date, Advantus Capital paid the costs of providing transfer
agent services to each of the Funds except Money Market Fund. Effective
October 26, 1998, the Funds' transfer agent is PFPC Inc. ("PFPC") Prior to
that date each of the Funds had engaged Minnesota Life to act as its transfer
agent, dividend disbursing agent and redemption agent. During the period from
October 1, 1998 to October 25, 1998, Money Market Fund paid Minnesota Life
$11,902 for transfer agent services.

     In addition, separate from the investment advisory agreement, each of
the Funds has entered into an agreement with Minnesota Life under which
Minnesota Life provides (i) accounting, legal and other administrative
services and (ii) shareholder servicing to the Funds. Minnesota Life
currently provides administrative services to the Funds at a monthly cost of
$6,200 for Horizon Fund, Spectrum Fund, Mortgage Securities Fund, Bond Fund,
Enterprise Fund and Cornerstone Fund, $5,100 for Money Market Fund and $5,300
for International Fund. During the fiscal year ended September 30, 2000, each of
the Funds paid Minnesota Life the following amounts for such administrative
services:


<TABLE>
<CAPTION>
         Fund                                   Amount
         ----                                   ------
         <S>                                    <C>
         Horizon Fund                           $74,400
         Spectrum Fund                           74,400
         Mortgage Securities Fund                74,400
         Money Market Fund                       61,200
         Bond Fund                               74,400
         Cornerstone Fund                        74,400
         Enterprise Fund                         74,400
         International Fund                      63,600
</TABLE>

     Effective May 1, 2000, each Fund pays its own shareholder servicing
costs. Prior to that date, Advantus Capital paid the costs of providing
shareholder services to each of the Funds except Money Market Fund. Minnesota
Life currently provides shareholder servicing to each Fund at a cost of $5
per shareholder account per year.

     International Balanced Fund has also entered into a separate agreement
with SEI Investments Mutual Fund Services ("SEI") pursuant to which SEI
provides daily accounting services for the Fund. Minnesota Life, pursuant to
its administrative services agreement with International Balanced Fund,
provides the Fund with financial reporting services and generally oversees
SEI's performance of its services. Under the agreement with SEI, the cost to
International Balanced Fund for SEI's services is an annual fee equal to the
greater of $45,000 or .08% of the Fund's first $150 million of net assets and
 .05% of its net assets in excess of $150 million. International Balanced Fund
also reimburses SEI for certain out-of-pocket expenses. During the last three
fiscal years, the amounts paid by International Balanced Fund to SEI (or to
Norwest Bank National Association, which performed these services prior to
April 1, 1998) were as follows:

<TABLE>
<CAPTION>
                     September 30
     --------------------------------------------
     2000                1999                1998
     ----                ----                ----
   <S>                 <C>                  <C>
   $52,063             $57,220              $69,774
</TABLE>

            MONEY MARKET FUND AMORTIZED COST METHOD OF PORTFOLIO VALUATION

     Money Market Fund values its portfolio securities at amortized cost in
accordance with Rule 2a-7 under the Investment Company Act of 1940, as amended.
This method involves valuing an instrument at its cost and thereafter assuming a
constant amortization to maturity of any discount or premium, regardless of the
impact of fluctuations in interest rates on the market value of the instrument
and regardless of any unrealized capital gains or losses.  While this method
provides certainty in valuation, it may result in periods during which value, as
determined by amortized cost, is higher or lower than the price the Fund would
receive if it sold the instrument.  During periods of declining interest rates,
the daily yield on shares of the Fund computed by dividing the annualized daily
income of the Fund by the net asset value computed as described above may tend
to be higher than a like computation made by the Fund with identical investments
utilizing a method of valuation based upon market prices and estimates of market
prices for all of its securities.

     Pursuant to Rule 2a-7, the Board of Directors of the Fund has determined,
in good faith based upon a full consideration of all material factors, that it
is in the best interests of the Fund and its shareholders to maintain a stable
net asset value per share by virtue of the amortized cost method of valuation.
The Fund will continue to use this method only so long as the Board of Directors
believes that it fairly reflects the market-based net asset value per share.  In
accordance with Rule 2a-7, the Board of Directors has undertaken, as a
particular responsibility within the overall duty of care owed to the Fund's
shareholders, to establish procedures reasonably designed, taking into account
current market conditions and the Fund's investment objectives, to stabilize the
Fund's net asset value per share at a single value.  These procedures include
the periodic determination of any deviation of current net asset value per share
calculated using available market quotations from the Fund's amortized cost
price per share, the periodic review by the Board of the amount of any such
deviation and the method used to calculate any such deviation, the maintenance
of records of such determinations and the Board's review thereof, the prompt
consideration by the Board if any such deviation exceeds 1/2 of 1%, and the
taking of such remedial action by the Board as it deems appropriate where it
believes the extent of any such deviation may result in material dilution or
other unfair results to investors or existing shareholders.  Such remedial
action may include redemptions in kind, selling portfolio instruments prior to
realizing capital gains or losses, shortening the average portfolio maturity,
withholding dividends or utilizing a net asset value per share as determined by
using available market quotations.

     The Fund will, in further compliance with Rule 2a-7, maintain a
dollar-weighted average portfolio maturity not exceeding 90 days and will limit
its portfolio investments to those United States dollar-denominated instruments
which the Board determines present minimal credit risks and which are eligible
securities.  The Fund will limit its investments in the securities of any one
issuer to no more than 5% of the Fund's total assets and it will limit
investment in securities of less than the highest rated category to 5% of the
Fund's total assets.  Investment in the securities of any issuer of less than
the highest rated category will be limited to the greater of 1% of the Fund's
total assets or one million dollars.  In addition, the Fund will reassess
promptly any security which is in default or downgraded from its rating category
to determine whether that security then presents minimal credit risks and
whether continuing to hold the securities is in the best interests of the Fund.
In addition, the Fund will record, maintain, and preserve a written copy of the
above-described procedures and a written record of the Board's considerations
and actions taken in connection with the discharge of its above-described
responsibilities.


                                         -43-
<PAGE>

                  PORTFOLIO TRANSACTIONS AND ALLOCATION OF BROKERAGE

HORIZON FUND, SPECTRUM FUND, CORNERSTONE FUND AND ENTERPRISE FUND

     In a number of security transactions, it is possible for Horizon Fund,
Spectrum Fund, Cornerstone Fund and Enterprise Fund to deal in the
over-the-counter security markets (including the so-called "third market" which
is the "over-the-counter" market for securities listed on the New York Stock
Exchange) without the payment of brokerage commissions but at net prices
including a spread or markup; these Funds trade in this manner whenever the net
price appears advantageous.

MORTGAGE SECURITIES FUND AND BOND FUND

     Portfolio transactions of Mortgage Securities Fund and Bond Fund occur
primarily with issuers, underwriters or major dealers acting as principals.
Such transactions are normally on a net basis which do not involve payment of
brokerage commissions.  The cost of securities purchased from an underwriter
usually includes a commission paid by the issuer to the underwriters;
transactions with dealers normally reflect the spread between bid and asked
prices.  Premiums are paid with respect to options purchased by these two Funds
and brokerage commissions are payable with respect to transactions in
exchange-traded interest rate futures contracts.

MONEY MARKET FUND

     Most transactions in portfolio securities of Money Market Fund are
purchases from issuers or dealers in money market instruments acting as
principal.  There usually are no brokerage commissions paid by the Fund for such
purchases since securities are purchased on a net price basis.  Trading does,
however, involve transaction costs.  Transactions with dealers serving as
primary market makers reflect the spread between the bid and asked prices of
securities.  Purchases of underwritten issues may be made which reflect a fee
paid to the underwriter.

INTERNATIONAL FUND

     Templeton Counsel, as investment sub-adviser to the International Fund, is
primarily responsible for selecting and (where applicable) negotiating
commissions with the brokers who execute the transactions for the Fund.
Templeton Counsel, in managing the International Fund, follows the same basic
brokerage practices as those described below for Advantus Capital.  In addition,
in selecting brokers for portfolio transactions, Templeton Counsel takes into
account its past experience as to brokers qualified to achieve "best execution,"
including the ability to effect transactions at all where a large block is
involved, availability of the broker to stand ready to execute possibly
difficult transactions in the future, the financial strength and stability of
the broker, and whether the broker specializes in foreign securities held by the
International Fund.  Purchases and sales of portfolio securities within the
United States other than on a securities exchange are executed with primary
market makers acting as principal, except where, in the judgment of Templeton
Counsel, better prices and execution may be obtained on a commission basis or
from other sources.

GENERALLY

     Advantus Capital selects and (where applicable) negotiates commissions with
the brokers who execute the transactions for the Funds (except for International
Fund, as described above).  During the fiscal years ended September 30, 2000,
1999 and 1998, brokerage commissions paid were:


<TABLE>
<CAPTION>
          Fund                           2000            1999           1998
--------------------------------------------------------------------------------
<S>                                  <C>             <C>             <C>
Horizon Fund                         $123,143        $110,447        $88,188
Spectrum Fund                         150,307         122,688         98,839
Mortgage Securities Fund                    0               0              0
Money Market Fund                           0               0              0
Bond Fund                                   0               0              0
Cornerstone Fund                      405,041         258,334        388,917
Enterprise Fund                       112,916          66,576         54,692
International Fund                     57,152          81,086         59,313
</TABLE>


                                         -44-
<PAGE>

     The primary criteria for the selection of a broker is the ability of the
broker, in the opinion of Advantus Capital, to secure prompt execution of the
transactions on favorable terms, including the reasonableness of the commission
and considering the state of the market at the time.  In selecting a broker,
Advantus Capital considers whether such broker provides brokerage and research
services (as defined in the Securities Exchange Act of 1934), and generally the
Funds pay higher than the lowest commission rates available.  Advantus Capital
may direct Fund transactions to brokers who furnish research services to
Advantus Capital.  Such research services include advice, both directly and in
writing, as to the value of securities, the advisability of investing in,
purchasing or selling securities, and the availability of securities or
purchasers or sellers of securities, as well as analyses and reports concerning
issues, industries, securities, economic factors and trends, portfolio strategy,
and the performance of accounts.  By allocating brokerage business in order to
obtain research services for Advantus Capital, the Funds enable Advantus Capital
to supplement its own investment research activities and allows Advantus Capital
to obtain the views and information of individuals and research staffs of many
different securities research firms prior to making investment decisions for the
Funds.  To the extent such commissions are directed to these other brokers who
furnish research services to Advantus Capital, Advantus Capital receives a
benefit, not capable of evaluation in dollar amounts, without providing any
direct monetary benefit to the Funds from these commissions.

     There is no formula for the allocation by Advantus Capital of the Funds'
brokerage business to any broker-dealer for brokerage and research services.
However, Advantus Capital will authorize a Fund to pay an amount of
commission for effecting a securities transaction in excess of the amount of
commission another broker would have charged only if Advantus Capital
determines in good faith that such amount of commission is reasonable in
relation to the value of the brokerage and research services provided by such
broker viewed in terms of either that particular transaction or Advantus
Capital's overall responsibilities with respect to the accounts as to which
it exercises investment discretion.  During the fiscal year ended September
30, 1999, Horizon Fund, Spectrum Fund, Cornerstone Fund, Enterprise Fund and
International Fund directed transactions to brokers because of research
services they provided, and paid commissions in connection with such
transactions, in the aggregate amounts set forth below:

<TABLE>
<CAPTION>
                             Aggregate Transactions      Commissions Paid on
       Fund                   Directed for Research      Directed Transaction
--------------------------------------------------------------------------------
<S>                          <C>                         <C>
Horizon Fund                      $  7,368,879                $113,075
Spectrum Fund                       55,818,178                 139,435
Cornerstone Fund                     9,349,121                 360,086
Enterprise Fund                     27,067,361                 107,624
International Fund                  26,880,168                  57,152
</TABLE>

During the same period, Mortgage Securities Fund, Money Market Fund and Bond
Fund directed no transactions to brokers because of research services they
provided.

     No brokerage is allocated for the sale of Fund shares.  Advantus Capital
believes that most research services obtained by it generally benefit one or
more of the investment companies which it manages and also benefit accounts
which it manages.  Normally research services obtained through managed funds and
managed accounts investing in common stocks would primarily benefit such funds
and accounts; similarly, services obtained from transactions in fixed income
securities would be of greater benefit to the managed funds and managed accounts
investing in debt securities.


                                         -45-
<PAGE>

     The same security may be suitable for one or more of the Funds and the
other funds or private accounts managed by Advantus Capital or its affiliates.
If and when two or more funds or accounts simultaneously purchase or sell the
same security, the transactions will be allocated as to price and amount in
accordance with arrangements equitable to each fund or account.  The
simultaneous purchase or sale of the same securities by one Fund and other Funds
or accounts may have a detrimental effect on that Fund, as this may affect the
price paid or received by the Fund or the size of the position obtainable by the
Fund.

     The Funds will not execute portfolio transactions through any affiliate,
unless such transactions, including the frequency thereof, the receipt of
commissions payable in connection therewith and the selection of the affiliated
broker-dealer effecting such transactions are not unfair or unreasonable to the
shareholders of the Funds.  In the event any transactions are executed on an
agency basis, Advantus Capital will authorize the Funds to pay an amount of
commission for effecting a securities transaction in excess of the amount of
commission another broker-dealer would have charged only if Advantus Capital
determines in good faith that such amount of commission is reasonable in
relation to the value of the brokerage and research services provided by such
broker-dealer, viewed in terms of either that particular transaction or the
overall responsibilities of Advantus Capital with respect to the Funds as to
which it exercises investment discretion.  If the Funds execute any transactions
on an agency basis, they will generally pay higher than the lowest commission
rates available.

     In determining the commissions to be paid to an affiliated
broker-dealer, it is the policy of the Funds that such commissions will, in
the judgment of Advantus Capital, subject to review by the Fund's Board of
Directors, be both (a) at least as favorable as those which would be charged
by other qualified brokers in connection with comparable transactions
involving similar securities being purchased or sold on an exchange during a
comparable period of time, and (b) at least as favorable as commissions
contemporaneously charged by such affiliated broker-dealers on comparable
transactions for their most favored comparable unaffiliated customers.  While
the Funds do not deem it practicable and in their best interest to solicit
competitive bids for commission rates on each transaction, consideration will
regularly be given to posted commission rates as well as to other information
concerning the level of commissions charged on comparable transactions by
other qualified brokers.

     Information regarding the acquisition by the Funds during the fiscal year
ended September 30, 2000, of securities of the Funds' regular brokers or
dealers, or the parents of those broker or dealers that derive more than 15
percent of their gross revenue from securities-related activities, is presented
below:


                                         -46-
<PAGE>

<TABLE>
<CAPTION>
                                                                           Approximate Value of
                                                                          Securities Owned at the
Fund                          Name of Issuer                               End of Fiscal Period
-------------------------------------------------------------------------------------------------
<S>                           <C>                                         <C>
Spectrum Fund                 Paine Webber Mortgage Acceptance Corporation        $559,919
                              Bear Stearns Mortgage Securities, Inc.               457,391
                              Morgan Stanley Dean Witter                           523,048
                              Prudential Home Mortgage Securities                  803,262

Mortgage Securities Fund      Bear Stearns Mortgage Securities, Inc.             1,878,733
                              Paine Webber Mortgage Acceptance
                                Corporation                                      1,499,014
                              Prudential Home Mortgage Securities                4,728,395
                              DLJ Mortgage Acceptance Corporation                1,178,695

Bond Fund                     Morgan Stanley Dean Witter                           492,767

Cornerstone Fund              Morgan Stanley Dean Witter                         2,152,439
                              Goldman Sachs Group, Inc.                          1,184,950
                              Merrill Lynch & Company, Inc.                      1,306,800
</TABLE>

                           CALCULATION OF PERFORMANCE DATA

MONEY MARKET FUND

     Money Market Fund may issue "current yield" and "effective yield"
quotations.  "Current yields" are computed by determining the net change in the
value of a hypothetical account having a balance of one share at the beginning
of a recent seven calendar day period, and multiplying that change by 365/7.
"Effective yields" are computed by determining the net change in the value of a
hypothetical account having a balance of one share at the beginning of a recent
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.  For purposes of the foregoing calculations, the value of the
hypothetical account includes accrued interest income plus or minus amortized
purchase discount or premium less accrued expenses, but does not include
realized gains and losses or unrealized appreciation and depreciation.  The Fund
will also quote the average dollar-weighted portfolio maturity for the
corresponding seven-day period.


                                         -47-
<PAGE>

     Although there can be no assurance that the net asset value of Money Market
Fund's shares will always be $1.00, Advantus Capital does not expect that the
net asset value of its shares will fluctuate since the Fund uses the amortized
cost method of valuation to maintain a stable $1.00 net asset value.  See "Money
Market Fund Amortized Cost Method of Portfolio Valuation."  Principal is not,
however, insured.  Yield is a function of portfolio quality and composition,
maturity, and operating expenses.  Yield information is useful in reviewing the
Fund's performance, but it may not provide a basis for comparison with bank
deposits or other investments, which pay a fixed yield for a stated period of
time, or other investment instruments, which may use a different method of
calculating yield.

     For the seven calendar days ended September 30, 2000, Money Market Fund's
annualized current yield was 5.41% and its annualized effective yield was 5.56%.
The Fund's investment adviser was voluntarily absorbing certain expenses of the
Fund during that period.  If the Fund had been charged these expenses its
current yield and effective yield for the same period would have been 4.75% and
4.86% respectively.

ADVANTUS MULTIPLE CLASS FUNDS

     Advertisements and other sales literature for the Advantus Multiple Class
Funds may refer to "yield," "average annual total return" and "cumulative total
return."  Performance quotations are computed separately for each class of
shares of the Advantus Multiple Class Funds.

     YIELD.  Yield is computed by dividing the net investment income per share
(as defined under Securities and Exchange Commission rules and regulations)
earned during the computation period by the maximum offering price per share on
the last day of the period, according to the following formula:

                   a-b
      YIELD = 2[( ----- )TO THE POWER OF 6 -1]
                   cd

  Where: a = dividends and interest earned during the period;

         b = expenses accrued for the period (net of reimbursements);

         c = the average daily number of shares outstanding during the period
             that were entitled to receive dividends; and

         d = the maximum offering price per share on the last day of the period.

     The yield on investments in each of these Funds for the 30 day period ended
September 30, 2000 was as set forth in the table below.  The Funds' investment
adviser and distributor were voluntarily absorbing and waiving certain expenses
of certain of the Funds during that period.  If such Funds had been charged for
these expenses the yield on investments for the same period would have been
lower, as also shown in the table below in parentheses.


<TABLE>
<CAPTION>
                                                    Yield
                                                    -----
       Fund                    Class A              Class B           Class C
       ----                    -------              -------           -------
<S>                            <C>                <C>               <C>
Horizon Fund                   -.73% (-.73%)      -1.55% (-1.55%)   -1.55% (-1.55%)
Spectrum Fund                  1.45   (1.45)        .77     (.77)     .77     (.77)
Mortgage Securities Fund       6.38   (6.14)       5.93    (5.68)    5.89    (5.65)
Bond Fund                      5.74   (5.22)       5.26    (4.72)    5.26    (4.72)
Cornerstone Fund                .49    (.38)       -.22    (-.33)    -.22    (-.33)
Enterprise Fund                -.93   (-.93)      -1.83   (-1.83)   -1.83   (-1.83)
International Fund              .81    (.81)        .08     (.08)     .09     (.09)
</TABLE>

AVERAGE ANNUAL TOTAL RETURN.  Average annual total return is computed by finding
the average annual compounded rates of return over the periods indicated in the
advertisement that would equate the initial amount invested to the ending
redeemable value, according to the following formula:


                                         -48-
<PAGE>

     P(1+T)TO THE POWER OF n  =  ERV

   Where: P = a hypothetical initial payment of $1,000;

          T = average annual total return;

          n = number of years; and

        ERV = ending redeemable value at the end of the period of a
              hypothetical $1,000 payment made at the beginning of such
              period.

     The average annual total return on investments in each of the Advantus
Multiple Class Funds for the periods indicated ending September 30, 2000,
were as set forth in the table below. Average annual total returns quoted
assume that the Class A maximum initial sales charge of 4.5% for Bond and
Mortgage Funds and 5.5% for Horizon, Spectrum, Cornerstone, Enterprise and
International Funds was in effect at the beginning of each period shown.  The
maximum initial sales charge was 5.0% prior to February 1, 1999.  The Funds'
investment adviser and distributor were voluntarily absorbing and waiving
certain expenses of certain of the Funds during these periods.  If such Funds
had been charged for these expenses the average annual total returns for the
same periods would have been lower, as also shown in the table below in
parentheses.


<TABLE>
<CAPTION>
                                                                      1 YEAR

         FUND                               CLASS A                  CLASS B                 CLASS C
<S>                                   <C>         <C>           <C>        <C>           <C>        <C>
Horizon Fund(1)                       12.70%      (12.57%)       13.40%    (13.26%)      18.37%     (18.23%)
Spectrum Fund (2)                       9.84        (8.65)       10.51       (9.62)       15.38      (14.59)
Mortgage Securities Fund (1)            2.85        (2.78)        1.90       (1.83)        6.89       (6.82)
Bond Fund (3)                            .32         (.25)        -.84       (-.92)        4.26       (4.18)
Cornerstone Fund (4)                   -4.31       (-4.32)       -4.46      (-4.48)         .54        (.56)
Enterprise Fund (4)                    34.90       (34.88)       36.43      (36.40)       41.46      (41.43)
International Fund (5)                   .42         (.41)         .36        (.35)        5.36       (5.35)
</TABLE>


<TABLE>
<CAPTION>
                                                                    5 YEAR

         FUND                                CLASS A                   CLASS B                CLASS C
<S>                                   <C>         <C>           <C>        <C>           <C>        <C>
Horizon Fund(1)                       19.13%      (19.10%)      19.51%     (19.48%)      19.60%     (19.57%)
Spectrum Fund (2)                      13.49       (13.24)       13.89      (13.72)       13.98      (13.82)
Mortgage Securities Fund (1)            5.76        (5.58)        5.73       (5.54)        5.97       (5.79)
Bond Fund (3)                           4.14        (4.08)        4.07       (3.99)        4.26       (4.18)
Cornerstone Fund (4)                    8.68        (8.26)        8.85       (8.59)        9.01       (8.75)
Enterprise Fund (4)                    10.21       (10.16)       10.30      (10.26)       10.49      (10.46)
International Fund (5)                  6.79        (4.96)         n/a        (n/a)        7.13       (5.69)
</TABLE>


<TABLE>
<CAPTION>
                                                                    10 YEAR

         FUND                                CLASS A                   CLASS B                CLASS C
<S>                                   <C>         <C>              <C>        <C>           <C>        <C>
Horizon Fund(1)                       17.36%      (17.29%)         n/a        (n/a)         n/a        (n/a)
Spectrum Fund (2)                      12.79       (12.64)         n/a        (n/a)         n/a        (n/a)
Mortgage Securities Fund (1)            7.35        (7.28)         n/a        (n/a)         n/a        (n/a)
Bond Fund (3)                           6.76        (5.88)         n/a        (n/a)         n/a        (n/a)
Cornerstone Fund (4)                     n/a         (n/a)         n/a        (n/a)         n/a        (n/a)
Enterprise Fund (4)                      n/a         (n/a)         n/a        (n/a)         n/a        (n/a)
International Fund (5)                   n/a         (n/a)         n/a        (n/a)         n/a        (n/a)
</TABLE>


<TABLE>
<CAPTION>
                                                                SINCE INCEPTION

         FUND                                CLASS A                   CLASS B                CLASS C
<S>                                   <C>         <C>           <C>        <C>           <C>        <C>
Horizon Fund(1)                       13.67%      (13.49%)      20.11%     (20.01%)      20.95%     (20.95%)
Spectrum Fund (2)                      11.94       (11.35)       14.35      (14.09)       14.83      (14.70)
Mortgage Securities Fund (1)            8.14        (7.46)        6.80       (5.45)        6.77       (5.50)
Bond Fund (3)                           6.82        (5.53)        5.35       (4.09)        5.46       (4.17)
Cornerstone Fund (4)                   10.83       (10.38)       10.98      (10.57)       11.63      (11.36)
Enterprise Fund (4)                    12.72       (12.69)       12.78      (12.65)       13.03      (13.03)
International Fund (5)                  6.50        (4.96)        4.12       (2.18)        8.23       (6.92)
</TABLE>



--------------------


                                         -49-
<PAGE>

(1)Class A Inception May 3, 1985.
     Class B Inception August 19, 1994.
     Class C Inception March 1, 1995.
(2)Class A Inception November 16, 1987.
     Class B Inception August 19, 1994.
     Class C Inception March 1, 1995
(3)Class A Inception August 14, 1987.
     Class B Inception August 19, 1994.
     Class C Inception March 1, 1995.
(4)Class A and Class B Inception September 16, 1994.
     Class C Inception March 1, 1995.
(5)Class A Inception September 16, 1994.
     Class B Inception January 31, 1997.
     Class C Inception March 1, 1995.

CUMULATIVE TOTAL RETURN.  Cumulative total return figures are computed by
finding the cumulative compounded rate of return over the period indicated in
the advertisement that would equate the initial amount invested to the ending
redeemable value, according to the following formula:

              ERV-P
       CTR =( ----- )100
                P

   Where: CTR = cumulative total return;

          ERV = ending redeemable value at the end of the period of a
                hypothetical $1,000 payment made at the beginning of such
                period; and

            P = initial payment of $1,000.

     The cumulative total return on investments in each of the Advantus
Multiple Class Funds for the period indicated ended September 30, 2000, was
as set forth in the table below.  Average annual total returns quoted assume
that the Class A maximum initial sales charge of 4.5% for Bond and Mortgage
Funds and 5.5% for Horizon, Spectrum, Cornerstone, Enterprise and
International Funds was in effect at the inception date of Class A shares.
The maximum initial sales charge was 5.0% prior to February 1, 1999. The
Funds' investment adviser was voluntarily absorbing certain expenses of
certain of the Funds during these periods.  If such Funds had been charged
for these expenses the cumulative total return for the same periods would
have been lower, as also shown in the table below in parentheses.


<TABLE>
<CAPTION>
                                                    Cumulative Total Return
                                  ---------------------------------------------------------
     Fund                           Class A              Class B             Class C
                                    -------              -------             -------
<S>                             <C>                  <C>                   <C>
Horizon Fund(1)                 620.44% (606.55%)    205.27% (205.27%)     189.44% (189.44%)
Spectrum Fund (2)               327.14   (306.33)    125.64   (125.38)     116.55   (116.34)
Mortgage Securities Fund (1)    224.17   (213.41)     44.14    (42.39)      40.42    (38.78)
Bond Fund (3)                   137.93   (115.07)     37.54    (34.20)      34.58    (31.74)
Cornerstone Fund (4)             86.16    (84.16)     87.82    (86.97)      85.10    (84.46)
Enterprise Fund (4)             106.13   (105.78)    105.36   (105.36)      98.21    (98.21)
International Fund (5)           46.38    (44.32)     15.89    (14.74)      55.55    (53.90)
</TABLE>

--------------------

(1)Class A Inception May 3, 1985.
     Class B Inception August 19, 1994.
     Class C Inception March 1, 1995.
(2)Class A Inception November 16, 1987.
     Class B Inception August 19, 1994.
     Class C Inception March 1, 1995.
(3)Class A Inception August 14, 1987.
     Class B Inception August 19, 1994.
     Class C Inception March 1, 1995.
(4)Class A and Class B Inception September 16, 1994.
     Class C Inception March 1, 1995.
(5)Class A Inception September 16, 1994.
     Class B Inception January 31, 1997.
     Class C Inception March 1, 1995.

     The calculations for both average annual total return and cumulative total
return deduct the maximum sales charge from the initial hypothetical $1,000
investment, assume all dividends and capital gain distributions are reinvested
at net asset value on the appropriate reinvestment dates as described in the
Prospectus, and include all recurring fees, such as investment advisory and
management fees, charged as expenses to all shareholder accounts.


                                         -50-
<PAGE>

     Such average annual total return and cumulative total return figures may
also be accompanied by average annual total return and cumulative total return
figures, for the same or other periods, which do not reflect the deduction of
any sales charges.

                        CAPITAL STOCK AND OWNERSHIP OF SHARES

     Each Fund's shares of common stock, and each class thereof, have a par
value $.01 per share, and have equal rights to share in dividends and assets.
The shares possess no preemptive or conversion rights.  Cumulative voting is not
authorized.  This means that the holders of more than 50% of the shares voting
for the election of directors can elect 100% of the directors if they choose to
do so, and in such event the holders of the remaining shares will be unable to
elect any directors.

     Each of the Funds has 10 billion authorized shares of common stock.  Each
of the Advantus Multiple Class Funds has designated 2 billion authorized shares
as Class A shares, 2 billion authorized shares as Class B shares, and 2 billion
authorized shares as Class C shares.  The Funds have the number of shares
outstanding as set forth below.

<TABLE>
<CAPTION>
                                             Shares Outstanding at September 30, 2000
                                        -------------------------------------------------
     Fund                                Class A              Class B             Class C
                                         -------              -------             -------
<S>                                     <C>                  <C>                  <C>
Horizon Fund                             2,045,578             918,522             81,378
Spectrum Fund                            3,950,859           1,368,722            304,235
Mortgage Securities Fund                 3,068,925           1,389,638            314,208
Money Market Fund                       42,187,851                 n/a                n/a
Bond Fund                                1,562,585             701,834            115,932
Cornerstone Fund                         5,396,422             848,922             86,408
Enterprise Fund                          2,700,838             462,856             55,011
International Fund                       4,115,810             404,462            150,239
</TABLE>

     As of September 30, 1999, no person held of record, to the knowledge of the
respective Funds, or owned more than 5% of the outstanding shares of any of the
Funds, except as set forth in the following table:

<TABLE>
<CAPTION>
                                         Number of
Name and Address of Shareholder           Shares       Percentage
-------------------------------          ---------     ----------
<S>                                     <C>            <C>
HORIZON FUND
     Minnesota Life and affiliates*         45,751           1.5%

SPECTRUM FUND
     Minnesota Life and affiliates*         48,283           0.9%

MORTGAGE SECURITIES FUND
     Minnesota Life and affiliates*        631,592          13.2%

MONEY MARKET FUND
     Minnesota Life and affiliates*     10,981,558          26.0%

BOND FUND
     Minnesota Life and affiliates*        390,309          16.4%

CORNERSTONE FUND
     Minnesota Life and affiliates*      4,435,309          70.0%

ENTERPRISE FUND
     Minnesota Life and affiliates*      2,228,411          69.2%

INTERNATIONAL FUND
     Minnesota Life and affiliates*      2,901,337          62.1%
</TABLE>

*  400 Robert Street North, St. Paul, Minnesota 55101.


                                         -51-
<PAGE>

                                  HOW TO BUY SHARES

     Each Fund's shares may be purchased at the public offering price from
Ascend Financial, and from certain other broker-dealers.  Ascend Financial
reserves the right to reject any purchase order.  Shares of the Funds may be
purchased at a price equal to their respective net asset value, which, in the
case of Money Market Fund, will normally be constant at $1.00 per share.  There
is no assurance that Money Market Fund can maintain the $1.00 per share value.

     Certificates representing shares purchased are not currently issued.
However, shareholders will receive written confirmation of their purchases.
Shareholders will have the same rights of ownership with respect to such shares
as if certificates had been issued.  SHAREHOLDERS WHO HOLD PREVIOUSLY ISSUED
CERTIFICATES REPRESENTING ANY OF THEIR SHARES WILL NOT BE ALLOWED TO REDEEM SUCH
CERTIFICATED SHARES BY TELEPHONE.

     ALTERNATIVE PURCHASE ARRANGEMENTS.  The Funds offer investors the choice
among three classes of shares which offer different sales charges and bear
different expenses.  These alternatives permit an investor to choose the method
of purchasing shares that the investor believes is most beneficial given the
amount of the purchase, the length of time the investor expects to hold the
shares and other circumstances.  For a detailed discussion of these alternative
purchase arrangements see "Reduced Sales Charges" and "Shareholder Services"
below.

     The decision as to which class of shares provides a more suitable
investment for an investor may depend on a number of factors, including the
amount and intended length of the investment.  Investors making investments that
qualify for a waiver of initial sales charges should purchase Class A shares.
Other investors should consider Class B or Class C shares because all of the
purchase price is invested immediately.  Investors who expect to hold shares for
relatively shorter periods of time may prefer Class C shares because such shares
may be redeemed at any time without payment of a contingent deferred sales
charge.  Investors who expect to hold shares longer, however, may choose Class B
shares because such shares convert to Class A shares sooner than do Class C
shares and thus pay the higher Rule 12b-1 fee for a shorter period.

     Purchase orders for $1,000,000 or more will be accepted for Class A shares
only and are not subject to a sales charge at the time of purchase, but a
deferred sales charge will be imposed if such shares are sold within one year
after the date of purchase.  Orders for Class B or Class C shares for $1,000,000
or more will be treated as orders for Class A shares or declined.

     PURCHASE BY CHECK.  New investors may purchase shares of the Fund by
completing an account application and sending it, together with a check
payable to the Fund, directly to PFPC, the Funds' transfer agent, at Advantus
Funds Group, P.O. Box 9767, Providence, Rhode Island 02940-5059.  Additional
purchases may be made at anytime by mailing a check, payable to the Fund, to
the same address. Checks for additional purchases should be identified with the
appropriate account number.Purchase orders may also be submitted through
Ascend Financial or other broker-dealers authorized to sell shares of the
Fund.

     PURCHASE BY WIRE.  Shares may also be purchased by Federal Reserve or bank
wire.  This method will result in a more rapid investment in shares of the Fund.
Before wiring any funds, contact Minnesota Life, through its Advantus
Shareholder Services division, at (800) 665-6005 for instructions.  Promptly
after making an initial purchase by wire, an investor should complete an account
application and mail it to at Advantus Funds Group, P.O. Box 9767, Providence,
Rhode Island 02940-5059.

     Subsequent purchases may be made in the same manner.  Wire purchases
normally take two or more hours to complete, and to be accepted the same day
must be received by 3:00 p.m. (Central time).  Banks may charge a fee for
transmitting funds by wire.


                                         -52-
<PAGE>

     PURCHASE BY INTERNET. Existing Advantus Funds shareholders may also
purchase shares via the Internet, once they have established on-line
authorization. Please contact Advantus Shareholder Services at (800) 665-6005
for information on how to establish your account.

     TIMING OF PURCHASE ORDERS.  An order in proper form for the purchase of
shares of the Fund received by the Fund prior to the close of normal trading
on the New York Stock Exchange ("NYSE"), which is generally 3:00 p.m.
(Central time), will be effected at the price next determined on the date
received by PFPC.  Orders received after the close of the NYSE will be
effected at the price next determined on the next business day.

     MINIMUM INVESTMENTS.  A minimum initial investment of $250 is required, and
the minimum subsequent investment is $25.

     PUBLIC OFFERING PRICE.  The public offering price of the Fund will be the
net asset value per share of the Fund next determined after an order is received
and becomes effective, plus the applicable sales charge, if any.  The net asset
value per share of each class is determined by dividing the value of the
securities, cash and other assets (including dividends accrued but not
collected) of the Fund attributable to such class less all liabilities
(including accrued expenses but excluding capital and surplus) attributable to
such class, by the total number of shares of such class outstanding.

     The net asset value of the shares of the Fund is determined as of the close
of normal trading  on the New York Stock Exchange (as of the date of this
Statement of Additional Information the primary close of trading is 3:00 p.m.
(Central Time), but this time may be changed) on each day, Monday through
Friday, except (i) days on which changes in the value of the Fund's portfolio
securities will not materially affect the current net asset value of Fund
shares, (ii) days during which no Fund shares are tendered for redemption and no
order to purchase or sell Fund shares is received by the Fund and (iii)
customary national business holidays on which the New York Stock Exchange is
closed for trading.

     Securities, including put and call options, which are traded
over-the-counter and on a national exchange will be valued according to the
broadest and most representative market.  A security which is only listed or
traded on an exchange, or for which an exchange is the most representative
market, is valued at its last sale price (prior to the time as of which assets
are valued) on the exchange where it is principally traded.  Lacking any sales
on the exchange where it is principally traded on the day of valuation, prior to
the time as of which assets are valued, the security generally is valued at the
last bid price on that exchange.  Futures contracts will be valued in a like
manner, except that open futures contracts sales will be valued using the
closing settlement price or in the absence of such a price, the most recent
quoted bid price.  All other securities for which over-the-counter market
quotations are readily available are valued on the basis of the last current bid
price.  When market quotations are not readily available, such securities are
valued at fair value as determined in good faith by the Board of Directors.
Other assets also are valued at fair value as determined in good faith by the
Board of Directors.  However, debt securities may be valued on the basis of
valuations furnished by a pricing service which utilizes electronic data
processing techniques to determine valuations for normal institutional-size
trading units of debt securities, without regard to sale or bid prices, when
such valuations are believed to more accurately reflect the fair market value of
such securities.  Short-term investments in debt securities are valued daily at
market.

     Money Market Fund values its portfolio investments at amortized cost in
accordance with Rule 2a-7 under the 1940 Act.  See "Money Market Fund Amortized
Cost Method of Portfolio Valuation" above.

                                    SALES CHARGES

CLASS A SHARES

     The public offering price of Class A shares of each Fund is the net asset
value of the Fund's shares (other than Money Market Fund) plus the applicable
front end sales charge ("FESC"), which will vary with the size of the purchase.
Ascend Financial receives all applicable sales charges.  Shares of Money Market
Fund will be purchased at its net asset value, which will normally be constant
at $1.00.  There is no sales charge applicable to the purchase of Money Market
Fund shares.  The Fund receives the net asset value.  The current sales charges
are:


                                         -53-
<PAGE>

           HORIZON FUND, SPECTRUM FUND, CORNERSTONE FUND, ENTERPRISE FUND,
                                AND INTERNATIONAL FUND

<TABLE>
<CAPTION>

                                                                 Amount Paid to Broker-Dealers
                                          Sales Charge as a           as a Percentage of
                                            Percentage of:             Offering Price:
                                            --------------       -----------------------------
                                                         Net
                                       Offering        Amount
Value of Total Investment                Price        Invested
----------------------------------------------------------------------------------------------
<S>                                    <C>            <C>       <C>
Less Than $50,000                         5.5%          5.82%               5.00%
$50,000 But Less Than
  $100,000                                4.5           4.71                4.00
$100,000 But Less Than
  $250,000                                3.5           3.63                3.00
$250,000 But Less Than
  $500,000                                2.5           2.56                2.25
$500,000 But Less Than
  $1,000,000                              2.0           2.04                1.75
$1,000,000 And Over (1)                     0              0                1.00*
</TABLE>

                      MORTGAGE SECURITIES FUND AND BOND FUND

<TABLE>
<CAPTION>
                                                                 Amount Paid to Broker-Dealers
                                          Sales Charge as a           as a Percentage of
                                            Percentage of:             Offering Price:
                                            --------------       -----------------------------
                                                         Net
                                        Offering       Amount
Value of Total Investment                Price        Invested
----------------------------------------------------------------------------------------------
<S>                                     <C>           <C>        <C>
Less Than $100,000                        4.5%          4.71%               4.00%
$100,000 But Less Than
  $250,000                                3.5           3.63                3.00
$250,000 But Less Than
  $500,000                                2.5           2.56                2.25
$500,000 But Less Than
  $1,000,000                              2.0           2.04                1.75
$1,000,000 And Over (1)                     0              0                1.00*
</TABLE>

(1) A FESC will not be assessed for purchases of Class A shares of at least $1
million, but a contingent deferred sales charge of 1.00% will be imposed if such
shares are sold within one year after the date of purchase.

*  These payments are paid by Ascend Financial or one of its affiliates, at its
own expense, and not by the Fund or its shareholders.

     The sales charge applicable to an initial investment in the Fund depends
on the offering price of the investment.  The sales charge applicable to
subsequent investments, however, depends on the offering price of that
investment plus the current net asset value of the investor's previous
investments in the Fund.  For example, if an investor makes an initial
investment in Class A shares of Horizon Fund with an offering price of
$40,000 the investor will pay a sales charge equal to 5.5% of the $40,000
investment, but if an investor already owns Class A shares of Horizon Fund
with a current net asset value of $40,000 and invests in additional Class A
shares of Horizon Fund with an offering price of $10,000 the investor will
pay a sales charge equal to 4.5% of the additional $10,000 since the total
investment in the Fund would then be $50,000.

                                         -54-
<PAGE>

CLASS B SHARES

     Class B shares of the Fund are sold without an initial sales charge so that
the Fund receives the full amount of the investor's purchase.  However, a
contingent deferred sales charge ("CDSC") of up to 5% will be imposed if shares
are redeemed within six years of purchase.  For additional information, see
"Redemptions" below.  Class B shares will automatically convert to Class A
shares of the Fund on the fifteenth day of the month (or, if different, the last
business day prior to such date) following the expiration of a specified holding
period.  In addition, Class B shares are subject to higher Rule 12b-1 fees as
described below.  The amount of the CDSC will depend on the number of years
since the purchase was made, the amount of shares originally purchased and the
dollar amount being redeemed.  The amount of the applicable CDSC and the holding
period prior to conversion are determined in accordance with the following
table:

<TABLE>
<CAPTION>
                                                                                          Shares Convert to Class
                                                                                            A in the Month After
                                                          CDSC Applicable in Year              Expiration of
-----------------------------------------------------------------------------------------------------------------
Shares Purchased in an Amount               1         2         3         4         5         6
-----------------------------               -         -         -         -         -         -
<S>                                     <C>       <C>     <C>         <C>       <C>       <C>       <C>
Less Than $50,000                         5.0%      4.5%      3.5%      2.5%      1.5%      1.5%     84 Months
$50,000 But Less Than
  $100,000                                4.5       3.5       2.5       1.5       1.5         0      76 Months
$100,000 But Less Than
  $250,000                                3.5       2.5       1.5       1.5         0         0      60 Months
$250,000 But Less Than
  $500,000                                2.5       1.5       1.5         0         0         0      44 Months
$500,000 But Less Than
  $1,000,000                              1.5       1.5         0         0         0         0      28 Months
</TABLE>

     Proceeds from the CDSC are paid to Ascend Financial and are used to defray
expenses related to providing distribution-related services to the Fund in
connection with the sale of Class B shares, such as the payment of compensation
to selected broker-dealers, and for selling Class B shares.  The combination of
the CDSC and the Rule 12b-1 fee enables the Fund to sell the Class B shares
without deduction of a sales charge at the time of purchase.  Although Class B
shares are sold without an initial sales charge, Ascend Financial pays a sales
commission to broker-dealers, and to registered representatives of Ascend
Financial, who sell Class B shares.  The amount of this commission may differ
from the amount of the commission paid in connection with sales of Class A
shares.  The higher Rule 12b-1 fee will cause Class B shares to have a higher
expense ratio and to pay lower dividends than Class A shares.  Ascend Financial
pays other broker-dealers for the sale of Class B shares in accordance with the
following schedule:

<TABLE>
<CAPTION>
                                                Advantus Multiple Class Funds:
                                                ----------------------------
                                     Amount Paid to Broker-Dealers as a Percentage
Shares Purchased in An Amount                        of Offering Price
---------------------------------------------------------------------------------------
<S>                                  <C>
Less Than $50,000                                          4.17%
$50,000 But Less Than $100,000                             3.75
$100,000 But Less Than $250,000                            2.92
$250,000 But Less Than $500,000                            2.08
$500,000 But Less Than $1,000,000                          1.25
</TABLE>


                                         -55-
<PAGE>

     CONVERSION FEATURE.  On the fifteenth day of the month (or, if different,
the last business day prior to such date) after the expiration of the applicable
holding period described in the table above, Class B shares will automatically
convert to Class A shares and will no longer be subject to a higher Rule 12b-1
fee.  Such conversion will be on the basis of the relative net asset values of
the two classes.  Class A shares issued upon such conversion will not be subject
to any FESC or CDSC.  Class B shares acquired by exchange from Class B shares of
another Advantus Multiple Class Funds will convert into Class A shares based on
the time of the initial purchase.  Purchased Class B shares ("Purchased B
Shares") will convert after the specified number of months following the
purchase date.  All Class B shares in a shareholder's account that were acquired
through the reinvestment of dividends and distributions ("Reinvestment B
Shares") will be held in a separate sub-account.  Each time any Purchased B
Shares convert to Class A shares, a pro rata portion (based on the ratio that
the total converting Purchased B Shares bears to the shareholder's total
converting and non-converting Purchased B Shares immediately prior to the
conversion) of the Reinvestment B Shares then in the sub-account will also
convert to Class A shares.

     The conversion of Class B shares to Class A shares is subject to the
continuing availability of a ruling from the Internal Revenue Service or an
opinion of counsel that payment of different dividends by each of the classes of
shares does not result in the Fund's dividends or distributions constituting
"preferential dividends" under the Internal Revenue Code of 1986, as amended,
and that such conversions do not constitute taxable events for Federal tax
purposes.  There can be no assurance that such ruling or opinion will be
available, and the conversion of Class B shares to Class A shares will not occur
if such ruling or opinion is not available.  In such event, Class B shares would
continue to be subject to higher expenses than Class A shares for an indefinite
period.

CLASS C SHARES

     Class C shares of the Fund are sold without an initial sales charge so that
the Fund receives the full amount of the investor's purchase.  Unlike Class B
shares, however, no CDSC is imposed when Class C shares are redeemed.  Class C
shares will automatically convert to Class A shares of the Fund on the fifteenth
day of the month (or, if different, the last business day prior to such date)
following the expiration of a specified holding period.  In addition, Class C
shares are subject to higher Rule 12b-1 fees (as described below), and are
subject to such higher fees for a longer period than are Class B shares because
of a longer holding period prior to conversion.  The applicable holding period
prior to conversion is determined in accordance with the following table:

<TABLE>
<CAPTION>
                                        Shares Convert to Class A in the Month
Shares Purchased in an Amount                      After Expiration of
------------------------------------------------------------------------------
<S>                                     <C>
Less Than $50,000                                       96 Months
$50,000 But Less Than $100,000                          88 Months
$100,000 But Less Than $250,000                         72 Months
$250,000 But Less Than $500,000                         56 Months
$500,000 But Less Than $1,000,000                       40 Months
</TABLE>

     The longer period during which the Rule 12b-1 fee is charged enables the
Fund to sell the Class C shares without deduction of a sales charge at the time
of purchase and without imposing a CDSC at redemption.  Ascend Financial does
not pay a sales commission to broker-dealers, or to registered representatives
of Ascend Financial, who sell Class C shares.  The higher Rule 12b-1 fee will
cause Class C shares to have a higher expense ratio and to pay lower dividends
than Class A shares.


                                         -56-
<PAGE>

     CONVERSION FEATURE.  On the fifteenth day of the month (or, if different,
the last business day prior to such date) after the expiration of the applicable
holding period described in the table above, Class C shares will automatically
convert to Class A shares and will no longer be subject to a higher Rule 12b-1
fee.  Such conversion will be on the basis of the relative net asset values of
the two classes.  Class A shares issued upon such conversion will not be subject
to any FESC or CDSC.  Class C shares acquired by exchange from Class C shares of
another Advantus Multiple Class Fund will convert into Class A shares based on
the time of the initial purchase.  Purchased Class C shares ("Purchased C
Shares") will convert after the specified number of months following the
purchase date.  All Class C shares in a shareholder's account that were acquired
through the reinvestment of dividends and distributions ("Reinvestment C
Shares") will be held in a separate sub-account.  Each time any Purchased C
Shares convert to Class A shares, a pro rata portion (based on the ratio that
the total converting Purchased C Shares bears to the shareholder's total
converting and non-converting Purchased C Shares immediately prior to the
conversion) of the Reinvestment C Shares then in the sub-account will also
convert to Class A shares.

     The conversion of Class C shares to Class A shares is subject to the
continuing availability of a ruling from the Internal Revenue Service or an
opinion of counsel that payment of different dividends by each of the classes of
shares does not result in the Fund's dividends or distributions constituting
"preferential dividends" under the Internal Revenue Code of 1986, as amended,
and that such conversions do not constitute taxable events for Federal tax
purposes.  There can be no assurance that such ruling or opinion will be
available, and the conversion of Class C shares to Class A shares will not occur
if such ruling or opinion is not available.  In such event, Class C shares would
continue to be subject to higher expenses than Class A shares for an
indefinite period.

OTHER PAYMENTS TO BROKER-DEALERS

     Broker-dealers selling Class A, Class B and Class C shares of the
Advantus Multiple Class Funds will receive a shareholder servicing fee (Rule
12b-1 fee) equal, on a an annual basis, to .25% of the net asset values
attributable to Class A, Class B and Class C shares.  All such shareholder
servicing fees are paid quarterly in arrears beginning with the second year
after the sale of the shares to which such fees are attributable (i.e., the
first payment is at the end of the fifteenth month). Rule 12b-1 distribution
fees will also be paid quarterly in arrears to broker-dealers selling Class C
shares equal, on an annual basis, to .75% of the net asset values
attributable to such Class C shares.

NET ASSET VALUE AND PUBLIC OFFERING PRICE

     Shares of Money Market Fund may be purchased at a price equal to their net
asset value, which will normally be constant at $1.00 per share.  See "Money
Market Fund Amortized Cost Method of Valuation."  There is no assurance that
Money Market Fund can maintain the $1.00 per share value.  The portfolio
securities in which the Advantus Multiple Class Funds invest fluctuate in value,
and hence the net asset value per share of each Fund also fluctuates.

     On September 30, 2000, the net asset value and public offering price per
share for Class A, Class B and Class C shares of each of the Funds (except Money
Market Fund) were calculated as set forth below.


                                         -57-
<PAGE>

                                    HORIZON FUND

CLASS A SHARES

    Net Assets  ($63,568,339)    = Net Asset Value Per Share ($31.08)
------------------------------
Shares outstanding (2,045,578)

     To obtain the maximum public offering price per share, the Fund's
maximum sales charge must be added to the net asset value obtained above:

          $31.08 = Public Offering Price Per Share ($32.89)
          ------
          .945(1)

CLASS B SHARES

    Net Assets  ($26,877,987)   = Net Asset Value AND Public
-----------------------------
Shares outstanding (918,522)     Offering Price Per Share ($29.26)

CLASS C SHARES

    Net Assets ($2,395,579)   = Net Asset Value AND Public
----------------------------
Shares outstanding (81,378)     Offering Price Per Share ($29.44)

                                   SPECTRUM FUND

CLASS A SHARES

    Net Assets ($77,943,084)    = Net Asset Value Per Share ($19.73)
------------------------------
Shares outstanding (3,950,859)

     To obtain the maximum public offering price per share, the Fund's
maximum sales charge must be added to the net asset value obtained above:

          $19.73 = Public Offering Price Per Share ($20.88)
          ------
          .945(1)

CLASS B SHARES

    Net Assets ($26,830,490)    = Net Asset Value AND Public
------------------------------
Shares outstanding (1,368,722)    Offering Price Per Share ($19.60)

CLASS C SHARES

   Net Assets ($5,926,667)    = Net Asset Value AND Public
----------------------------
Shares Outstanding (304,235)    Offering Price Per Share ($19.48)

                              MORTGAGE SECURITIES FUND

CLASS A SHARES

    Net Assets ($31,787,626)      = Net Asset Value Per Share ($10.36)
--------------------------------
Shares outstanding (3,068,925)

     To obtain the maximum public offering price per share, the Fund's
maximum sales charge must be added to the net asset value obtained above:

          $10.36  = Public Offering Price Per Share ($10.85)
          ------
          .955(1)


                                         -58-
<PAGE>

CLASS B SHARES

    Net Assets ($14,424,458)  = Net Asset Value AND Public
----------------------------
Shares outstanding (1,389,638)    Offering Price Per Share ($10.38)

CLASS C SHARES

    Net Assets ($3,256,392)   = Net Asset Value AND Public
-----------------------------
Shares outstanding (314,208)    Offering Price Per Share ($10.36)

                                     BOND FUND

CLASS A SHARES

    Net Assets ($15,001,843)      = Net Asset Value Per Share ($9.60)
--------------------------------
Shares outstanding (1,562,585)

     To obtain the maximum public offering price per share, the Fund's
maximum sales charge must be added to the net asset value obtained above:

           $9.60  = Public Offering Price Per Share ($10.05)
           ------
           .955(1)

CLASS B SHARES

    Net Assets ($6,754,539)      = Net Asset Value AND Public
-------------------------------
Shares outstanding (701,834)       Offering Price Per Share ($9.62)

CLASS C SHARES

    Net Assets ($1,111,983)          = Net Asset Value AND Public
-----------------------------------
Shares outstanding (115,932)           Offering Price Per Share ($9.59)

                                  CORNERSTONE FUND

CLASS A SHARES

    Net Assets ($81,389,034)      = Net Asset Value Per Share ($15.08)
-------------------------------
 Shares outstanding (5,396,422)

     To obtain the maximum public offering price per share, the Fund's
maximum sales charge must be added to the net asset value obtained above:

           $15.08 = Public Offering Price Per Share ($15.96)
           ------
           .945(1)

CLASS B SHARES

    Net Assets ($12,615,025)     = Net Asset Value AND Public
-------------------------------
Shares outstanding (848,922)       Offering Price Per Share ($14.86)

CLASS C SHARES

    Net Assets ($1,280,651)     = Net Asset Value AND Public
-----------------------------     Offering Price Per Share ($14.82)
Shares outstanding (86,408)


                                         -59-
<PAGE>

                                ENTERPRISE FUND

CLASS A SHARES

    Net Assets ($56,086,767)      = Net Asset Value Per Share ($20.77)
-------------------------------
Shares outstanding (2,700,838)

     To obtain the maximum public offering price per share, the Fund's
maximum sales charge must be added to the net asset value obtained above:

           $20.77 = Public Offering Price Per Share ($21.98)
           ------
           .945(1)

CLASS B SHARES

    Net Assets ($9,086,089)     = Net Asset Value AND Public
------------------------------    Offering Price Per Share ($19.63)
Shares outstanding (462,856)

CLASS C SHARES

    Net Assets ($1,079,427)    = Net Asset Value AND Public
-----------------------------    Offering Price Per Share ($19.62)
Shares outstanding (55,011)

                              INTERNATIONAL FUND

CLASS A SHARES

    Net Assets ($47,692,601)      = Net Asset Value Per Share ($11.59)
--------------------------------
Shares outstanding (4,115,810)

     To obtain the maximum public offering price per share, the Fund's
maximum sales charge must be added to the net asset value obtained above:

           $11.59 = Public Offering Price Per Share ($12.26)
           ------
           .945(1)

CLASS B SHARES

    Net Assets ($4,646,776)     = Net Asset Value AND Public
-------------------------------   Offering Price Per Share ($11.49)
Shares outstanding (404,462)

CLASS C SHARES

    Net Assets ($1,727,844)     = Net Asset Value AND Public
-------------------------------   Offering Price Per Share ($11.50)
Shares outstanding (150,239)

(1)  Effective February 1, 1999, the maximum FESC for Horizon Fund, Spectrum
     Fund, Cornerstone Fund, Enterprise Fund and International Fund was
     increased to 5.5% and the maximum FESC for Mortgage Securities Fund and
     Bond Fund was decreased to 4.5%.

                             REDUCED SALES CHARGES

     Special purchase plans are enumerated in the text of each Fund's Prospectus
under "Buying and Selling Shares  Reducing Sales Charges" and are fully
described below.


                                         -60-
<PAGE>

RIGHT OF ACCUMULATION-CUMULATIVE PURCHASE DISCOUNT

     The front end sales charge and contingent deferred sales charge applicable
to each purchase of Class A shares and Class B shares, respectively, of the
Advantus Multiple Class Funds and Real Estate Fund is based on the next computed
net asset value of all Class A, Class B and Class C shares of such Funds held by
the shareholder (including dividends reinvested and capital gains distributions
accepted in shares), plus the cost of all Class A, Class B and Class C shares of
such Funds currently being purchased.  It is the obligation of each shareholder
desiring this discount in sales charge to notify Ascend Financial, through his
or her dealer or otherwise, that he or she is entitled to the discount.

LETTER OF INTENT

     The applicable sales charge for purchases of Class A shares is based on
total purchases over a 13-month period where there is an initial purchase equal
to or exceeding $250, accompanied by filing with Ascend Financial a signed
"Letter of Intent" form to purchase, and by in fact purchasing not less than
$100,000 of shares in the case of Mortgage Securities Fund or Bond Fund, or not
less than $50,000 of shares in one of the other Advantus Funds  (except Money
Market Fund), within that time.  The 13-month period is measured from the date
the Letter of Intent is approved by Ascend Financial, or at the purchaser's
option, it may be made retroactive 90 days, in which case Ascend Financial will
make appropriate adjustments on purchases during the 90-day period.

     In computing the total amount purchased for purposes of determining the
applicable sales charge, the net asset value of Class A, Class B and Class C
shares currently held in all Advantus Multiple Class Funds and Real Estate Fund,
on the date of the first purchase under the Letter of Intent, may be used as a
credit toward Fund shares to be purchased under the Letter of Intent.  Class A,
Class B and Class C shares of all the Advantus Multiple Class Funds and Real
Estate Fund may also be included in the purchases during the 13-month period.

     The Letter of Intent includes a provision for payment of additional
applicable Class A sales charges at the end of the period in the event the
investor fails to purchase the amount indicated.  This is accomplished by
holding 5.5%, or 4.5% in the case of Mortgage Securities Fund and Bond Fund,
of the investor's initial Class A share purchase in escrow.  If the
investor's purchases equal those specified in the Letter of Intent, the
escrow is released.  If the purchases do not equal those specified in the
Letter of Intent, he or she may remit to Ascend Financial an amount equal to
the difference between the dollar amount of sales charges actually paid and
the amount of sales charges that would have been paid on the aggregate
purchases if the total of such purchases had been made at a single time.  If
the purchaser does not remit this sum to Ascend Financial on a timely basis,
Ascend Financial will redeem the appropriate number of shares, and then
release or deliver any remaining shares in the escrow account.  The Letter of
Intent is not a binding obligation on the part of the investor to purchase,
or the respective Fund to sell, the full amount indicated.  Nevertheless, the
Letter of Intent should be read carefully before it is signed.

COMBINING PURCHASES

     With respect to each of the Advantus Multiple Class Funds and Real Estate
Fund, purchases of Class A, Class B and Class C shares for any other account of
the investor, or such person's spouse or minor children, or purchases on behalf
of participants in a tax-qualified retirement plan may be treated as purchases
by a single investor for purposes of determining the availability of a reduced
sales charge.


                                         -61-
<PAGE>

GROUP PURCHASES

     An individual who is a member of a qualified group may also purchase shares
of the Advantus Multiple Class Funds and Real Estate Fund at the reduced sales
charge applicable to the group taken as a whole.  The sales charge is calculated
by taking into account not only the dollar amount of the Class A, Class B and
Class C shares of the Funds being purchased by the individual member, but also
the aggregate dollar value of such Class A, Class B and Class C shares
previously purchased and currently held by other members of the group.  Members
of a qualified group may not be eligible for a Letter of Intent.

     A "qualified group" is one which (i) has been in existence for more than
six months, (ii) has a purpose other than acquiring Fund shares at a discount,
and (iii) satisfies uniform criteria which enable Ascend Financial to realize
economies of scale in distributing such shares.  A qualified group must have
more than ten members, must be available to arrange for group meetings between
representatives of Ascend Financial, must agree to include sales and other
materials related to the Funds in its publications and mailings to members at
reduced or no cost to Ascend Financial, and must seek, upon request, to arrange
for payroll deduction or other bulk transmission of investments to the Funds.

WAIVER OF SALES CHARGES FOR CERTAIN SALES OF CLASS A SHARES

     Directors and officers of Advantus Capital, Templeton Counsel (with
respect to International Fund only), CSAM (with respect to Enterprise Fund
only), Ascend Financial, the Funds, Minnesota Life, or any of Minnesota
Life's other affiliated companies, and their full-time and part-time
employees, sales representatives and retirees, any trust, pension,
profit-sharing, or other benefit plan for such persons, the spouses,
siblings, direct ancestors or direct descendants of such persons, Minnesota
Life and its affiliates themselves, advisory clients of Advantus Capital,
employees of sales representatives employed in offices maintained by such
sales representatives, certain accounts as to which a bank or broker-dealer
charges an account management fee, provided the bank or broker-dealer has an
agreement with Ascend Financial, and certain accounts sold by registered
investment advisers who charge clients a fee for their services may purchase
Class A shares of the Advantus Multiple Class Funds and Real Estate Fund at
net asset value.  These persons must give written assurance that they have
bought for investment purposes, and that the securities will not be resold
except through redemption or repurchase by, or on behalf of, the respective
Fund.  These persons are not required to pay a sales charge because of the
reduced sales effort involved in their purchases.

                    EXCHANGE AND TRANSFER OF FUND SHARES

     A shareholder can exchange some or all of his or her Class A, Class B
and Class C shares in the Advantus Multiple Class Funds, or shares in Real
Estate Fund, including shares acquired by reinvestment of dividends, for shares
of the same class of any of the other Advantus Multiple Class Funds or Real
Estate Fund (provided such Fund is available in the shareholder's State),
and can thereafter re-exchange such exchanged shares back for shares of the
same class of the Fund, provided that the minimum amount which may be
transferred is $250. The exchange will be made on the basis of the relative
net asset values without the imposition of any additional sales load.  When
Class B shares acquired through the exchange are redeemed, the shareholder
will be treated as if no exchange took place for the purpose of determining
the contingent deferred sales charge ("CDSC") period and applying the CDSC.

     Class A, Class B and Class C shares may also be exchanged for shares of the
Money Market Fund at net asset values.  No CDSC will be imposed at the time of
any such exchange of Class B shares; however, the Money Market Fund shares
acquired in any such exchange will remain subject to the CDSC otherwise
applicable to such Class B shares as of the date of exchange, and the period
during which such shares of Money Market Fund are held will not be included in
the calculation of the CDSC due at redemption of such Money Market Fund shares
or any reacquired Class B shares, except as follows.  Ascend Financial is
currently waiving the entire Rule 12b-1 fee due from Money Market Fund.  In the
event Ascend Financial begins to receive any portion of such fee, either (i) the
time period during which shares of Money Market Fund acquired in exchange for
Class B shares are held will be included in the calculation of the CDSC due at
redemption, or (ii) such time period will not be included but the amount of the
CDSC will be reduced by the amount of any Rule 12b-1 payments made by Money
Market Fund with respect to those shares.


                                         -62-
<PAGE>

     Shares of Money Market Fund acquired in an exchange for Class A, Class B or
Class C shares from any of the Advantus Multiple Class Funds or Real Estate Fund
may also be re-exchanged at relative net asset values for Class A, Class B and
Class C shares, respectively, of the Fund.  Class C shares re-acquired in this
manner will have a remaining holding period prior to conversion equal to the
remaining holding period applicable to the prior Class C shares at the time of
the initial exchange.  Shares of Money Market Fund not acquired in an exchange
from any of the Advantus Multiple Class Funds or Real Estate Fund may be
exchanged at relative net asset values for either Class A, Class B or Class C
shares of the Fund, subject to the sales charge applicable to the class
selected.

     The exchange privilege is available only in states where such exchanges
may legally be made (at the present time the Fund believes this privilege is
available in all states).  An exchange may be made by written request or by a
telephone call, (unless the shareholder has elected on the account
application not to have telephone transaction privileges) or by Internet. Up
to twelve exchanges each calendar year may be made without charge.  A $7.50
service charge will be imposed on each subsequent exchange and/or telephone
transfer.  No service charge is imposed in connection with systematic
exchange plans.  However, the Fund reserves the right to restrict the
frequency of, or otherwise modify, condition, terminate, or impose additional
charges upon, the exchange and/or telephone transfer privileges and/or
Internet transactions, upon 60 days' prior notice to shareholders.  An
exchange is considered to be a sale of shares for federal income tax purposes
on which an investor may realize a long- or short-term capital gain or loss.
See "Distributions and Tax Status" for a discussion of the effect of
redeeming shares within 90 days after acquiring them and subsequently
acquiring new shares in any mutual fund at a reduced sales charge.

SYSTEMATIC EXCHANGE PLAN

     Shareholders of the Fund may elect to have shares of the Fund
systematically exchanged for shares of any of the other Advantus Funds on a
monthly basis.  The minimum amount which may be exchanged on such a systematic
basis is $25.  The terms and conditions otherwise applicable to exchanges
generally, as described above, also apply to such systematic exchange plans.

                             SHAREHOLDER SERVICES

OPEN ACCOUNTS

     A shareholder's investment is automatically credited to an open account
maintained for the shareholder by PFPC, the Fund's transfer agent.  Stock
certificates are not currently issued.  Following each transaction in the
account, a shareholder will receive a confirmation statement disclosing the
current balance of shares owned and the details of recent transactions in the
account.  After the close of each year PFPC sends to each shareholder a
statement providing federal tax information on dividends and distributions paid
to the shareholder during the year.  This should be retained as a permanent
record.  A fee may be charged for providing duplicate information.

     The open account system provides for full and fractional shares expressed
to four decimal places and, by making the issuance and delivery of stock
certificates unnecessary, eliminates problems of handling and safekeeping, and
the cost and inconvenience of replacing lost, stolen, mutilated or destroyed
certificates.

     The costs of maintaining the open account system are paid by each Fund.
No direct charges are made to shareholders, except that the Funds will deduct a
$10 annual fee from a shareholder's account in December of each year if the
account balance at that time if below $2,000.  This low balance fee is waived
for qualified retirement accounts and for investors participating in an
automatic investment plan or who have aggregate Advantus Fund account assets of
$10,000 or more.  Money Market Fund will also waive the low balance fee for
Money Market Fund investors who have had any purchase activity (excluding
reinvestments of dividend and capital gains distributions) in their account
during the preceding twelve months.  Although the Funds have no present
intention of making additional direct charges to shareholders, they reserve
the right to do so.  Shareholders will receive prior notice before any such
charges are made.

AUTOMATIC INVESTMENT PLAN

     Each Fund provides a convenient, voluntary method of purchasing shares in
the Fund through its "Automatic Investment Plan" (the "Plan").

     The principal purposes of the Plan are to encourage thrift by enabling you
to make regular purchases in amounts less than normally required, and, in the
case of the Advantus Multiple Class Funds and Real Estate Fund, to employ the
principle of dollar cost averaging, described below.


                                         -63-
<PAGE>

     By acquiring Fund shares on a regular basis pursuant to the Automatic
Investment Plan, or investing regularly on any other systematic plan, the
investor takes advantage of the principle of dollar cost averaging.  Under
dollar cost averaging, if a constant amount is invested at regular intervals
at varying price levels, the average cost of all the shares will be lower
than the average of the price levels.  This is because the same fixed number
of dollars buys more shares when price levels are low and fewer shares when
price levels are high.  There is no guarantee, however, that the automatic
investment plan will always result in a lower cost per share compared to other
investment programs.  It is essential that the investor consider his or her
financial ability to continue this investment program during times of market
decline as well as market rise.  The principle of dollar cost averaging will
not protect against loss in a declining market, as a loss will result if the
plan is discontinued when the market value is less than cost.

     A Plan may be opened by indicating an intention to invest $25 or more
monthly for at least one year.  Investors will receive a confirmation showing
the number of shares purchased, purchase price, and subsequent new balance of
shares accumulated.

     An investor has no obligation to invest regularly or to continue the Plan,
which may be terminated by the investor at any time without penalty.  Under the
Plan, any distributions of income and realized capital gains will be reinvested
in additional shares at net asset value unless a shareholder instructs the Fund
in writing to pay them in cash.  The Fund reserves the right to increase or
decrease the amount required to open and continue a Plan, and to terminate any
Plan after one year if the value of the amount invested is less than $250.

GROUP SYSTEMATIC INVESTMENT PLAN

     This Plan provides employers and employees with a convenient means for
purchasing shares of each Fund under various types of employee benefit and
thrift plans, including payroll withholding and bonus incentive plans.  The Plan
may be started with an initial cash investment of $50 per participant for a
group consisting of five or more participants.  The shares purchased by each
participant under the Plan will be held in a separate account in which all
dividends and capital gains will be reinvested in additional shares of the Fund
at net asset value.  To keep his or her account open, subsequent payments
totaling $25 per month must be made into each participant's account.  If the
group is reduced to less than five participants, the minimums set forth under
"Automatic Investment Plan" shall apply.  The Plan may be terminated by the Fund
or the shareholder at any time upon reasonable notice.

RETIREMENT PLANS OFFERING TAX BENEFITS

     The federal tax laws provide for a variety of retirement plans offering
tax benefits.  These plans may be funded with shares of any of the Funds.
The plans include H.R. 10 (Keogh) plans for self-employed individuals and
partnerships, individual retirement accounts (IRA's), corporate pension trust
and profit sharing plans, including 401(k) plans, and retirement plans for
public school systems and certain tax exempt organizations, e.g. 403(b) plans.

     The initial investment in each Fund by such a plan must be at least $250
for each participant in a plan, and subsequent investments must be at least $25
per month for each participant.  Income dividends and capital gain distributions
must be reinvested.  Plan documents and further information can be obtained from
Ascend Financial.

     An investor should consult a competent tax or other adviser as to the
suitability of Fund shares as a vehicle for funding a plan, in whole or in part,
under the Employee Retirement Income Security Act of 1974 and as to the
eligibility requirements for a specific plan and its state as well as federal
tax aspects.

SYSTEMATIC WITHDRAWAL PLANS

     An investor owning shares in any one of the Funds having a value of $5,000
or more at the current public offering price may establish a Systematic
Withdrawal Plan providing for periodic payments of a fixed or variable amount.
Withdrawal payments for Class A shares of Real Estate Fund and the Advantus
Multiple Class Funds purchased in amounts of $1 million or more, and for Class B
shares of Advantus Multiple Class Funds, may also be subject to a CDSC.  As a
result, a shareholder should consider whether a Systematic Withdrawal Plan is
appropriate.  It may be appropriate for the shareholder to consult a tax adviser
before establishing such a plan.


                                         -64-
<PAGE>

     The Plan is particularly convenient and useful for trustees in making
periodic distributions to retired employees.  Through this Plan a trustee can
arrange for the retirement benefit to be paid directly to the employee by the
respective Fund and to continue the tax-free accumulation of income and capital
gains prior to their distribution to the employee.  An investor may terminate
the Plan at any time.  A form for use in establishing such a plan is available
from Ascend Financial.

     A shareholder under a Systematic Withdrawal Plan may elect to receive
payments monthly, quarterly, semiannually, or annually for a fixed amount of not
less than $50 or a variable amount based on (1) the market value of a stated
number of shares, (2) a specified percentage of the account's market value or
(3) a specified number of years for liquidating the account (e.g., a 20-year
program of 240 monthly payments would be liquidated at a monthly rate of 1/240,
1/239, 1/238, etc.).   The initial payment under a variable payment option may
be $50 or more.

     All shares under the Plan must be left on deposit.  Income dividends and
capital gain distributions will be reinvested without a sales charge at net
asset value determined on the record date.

     Since withdrawal payments represent proceeds from the liquidation of
shares, withdrawals may reduce and possibly exhaust the initial investment,
particularly in the event of a decline in net asset value.

     Under this Plan, any distributions of income and realized capital gains
must be reinvested in additional shares, and are reinvested at net asset value.
If a shareholder wishes to purchase additional shares of the respective Fund
under this Plan, except in the case of Money Market Fund, other than by
reinvestment of distributions, it should be understood that, in the case of
Class A shares, he or she would be paying a sales commission on such purchases,
while liquidations effected under the Plan would be at net asset value, and, in
the case of Class B shares, he or she would be purchasing such shares at net
asset value while liquidations effected under the Plan would involve the payment
of a contingent deferred sales charge.  Purchases of additional shares
concurrent with withdrawals are ordinarily disadvantageous to the shareholder
because of sales charges and tax liabilities.  Additions to a shareholder
account in which an election has been made to receive systematic withdrawals
will be accepted only if each such addition is equal to at least one year's
scheduled withdrawals or $1,200, whichever is greater.  A shareholder may not
have an "Automatic Withdrawal Plan" and a "Systematic Investment Plan" in effect
simultaneously as it is not, as explained above, advantageous to do so.

                                     REDEMPTIONS

     Registered holders of shares of the Funds may redeem their shares at the
per share net asset value next determined following receipt by the Fund (at its
mailing address listed on the cover page) of a written redemption request signed
by all shareholders exactly as the account is registered (and a properly
endorsed stock certificate if one has been issued).  Class A and Class C shares
may be redeemed without charge.  A contingent deferred sales charge may be
applicable upon redemption of certain Class A shares and Class B shares.  Both
share certificates and stock powers, if any, tendered in redemption must be
endorsed and executed exactly as the Fund shares are registered.  Any
certificates should be sent to the Fund by certified mail.

     Payment will be made as soon as possible, but not later than seven days
after receipt of a properly executed written redemption request (and any
certificates).  The amount received by the shareholder may be more or less than
the shares' original cost.

     If stock certificates have not been issued, and if no signature guarantee
is required, shareholders may also submit their signed written redemption
request to the Fund by facsimile (FAX) transmission.  The Fund's FAX number is
(508) 871-3560.


                                         -65-
<PAGE>

     Each Fund will pay in cash all redemption requests by any shareholder of
record, limited in amount during any 90-day period to the lesser of $250,000 or
1% of the net asset value of the Fund at the beginning of such period.  When
redemption requests exceed such amount, however, the Fund reserves the right to
make part or all of the payment in the form of securities or other assets of the
Fund.  An example of when this might be done is in case of emergency, such as in
those situations enumerated in the following paragraph, or at any time a cash
distribution would impair the liquidity of the Fund to the detriment of the
existing shareholders.  Any securities being so distributed would be valued in
the same manner as the portfolio of the Fund is valued.  If the recipient sold
such securities, he or she probably would incur brokerage charges.  Each Fund
has filed with the Securities and Exchange Commission a notification of election
pursuant to Rule 18f-1 under the Investment Company Act of 1940 in order to make
such redemptions in kind.

     Redemption of shares, or payment, may be suspended at times (a) when the
New York Stock Exchange is closed for other than customary weekend or holiday
closings, (b) when trading on said Exchange is restricted, (c) when an emergency
exists, as a result of which disposal by the Fund of securities owned by it is
not reasonably practicable, or it is not  reasonably practicable for the Fund
fairly to determine the value of its net assets, or during any other period when
the Securities and Exchange Commission, by order, so permits; provided that
applicable rules and regulations of the Securities and Exchange Commission shall
govern as to whether the conditions prescribed in (b) or (c) exist.

SIGNATURE GUARANTEE

     In order to protect both shareholders and the Funds against fraudulent
orders, a shareholder signature is required to be guaranteed in certain cases.
No signature guarantee is required if the redemption proceeds are less than
$50,000 and are to be paid to the registered  holder and sent to the address of
record for that account, or if the written redemption request is from
pre-authorized trustees of plans, trusts and other tax-exempt organizations and
the redemption proceeds are less than $50,000.

     A signature guarantee is required, however, if (i) the redemption proceeds
are $50,000 or more, (ii) the redemption proceeds are to be paid to someone
other than the registered holder, (iii) the redemption proceeds are to be mailed
to an address other than the registered shareholder's address, (iv) within the
30-day period prior to receipt of the redemption request, instructions have been
received to change the shareholder's address of record, or, in the case of
redemptions to be paid by wire, instructions have been received within such
period to change the shareholder's bank wire instructions, (v) the shares are
requested to be transferred to the account of another owner, or (vi) in the case
of plans, trusts, or other tax-exempt organizations, the redemption request is
not from a pre-authorized trustee.  The Fund reserves the right to require
signature guarantees on all redemptions.


     A signature guarantee must be a "medallion" signature guarantee provided by
a domestic bank or trust company, broker, dealer, clearing agency, savings
association, or other financial institution which participates in a medallion
program recognized by the Securities Transfer Association.  The three recognized
medallion programs are:

-    Securities Transfer Agents Medallion Program (STAMP)

-    Stock Exchanges Medallion Program (SEMP)

-    New York Stock Exchange, Inc. Medallion Signature Program (NYSE MSP)

     Signature guarantees from financial institutions which are not participants
in a recognized medallion program will not be accepted.


                                         -66-
<PAGE>

CONTINGENT DEFERRED SALES CHARGE

     The CDSC applicable upon redemption of Class A shares purchased in amounts
of $1 million or more and Class B shares will be calculated on an amount equal
to the lesser of the net asset value of the shares at the time of purchase or
their net asset value at the time of redemption.  No charge will be imposed on
increases in net asset value above the initial purchase price.  In addition, no
charge will be assessed on shares derived from reinvestment of dividends or
capital gains distributions or on shares held for longer than the applicable
CDSC period.  See "Sales Charges - Class B Shares" above.

     In determining whether a CDSC is payable with respect to any redemption
of Class B shares, the calculation will be determined in the manner that
results in the lowest rate being charged.

     The CDSC does not apply to:  (1) redemption of Class B shares in connection
with the automatic conversion to Class A shares; (2) redemption of shares when a
Fund exercises its right to liquidate accounts which are less than the minimum
account size; and (3) redemptions in the event of the death or disability of the
shareholder within the meaning of Section 72(m)(7) of the Internal Revenue Code.
The CDSC will also not apply to certain exchanges.  See "Exchange and Transfer
of Fund Shares," above.

TELEPHONE REDEMPTION

     The Fund's shareholders have this privilege automatically, unless they
have elected on the account application not to have such privilege, and may
redeem shares by calling Advantus Shareholder Services at 1-800-665-6005 (see
"Telephone Transactions").  A telephone redemption request will not be
honored, however, if the shareholder's address of record or bank wire
instructions have been changed without a guarantee of the shareholder's
signature (see "Signature Guarantee" above) within the 30-day period prior to
receipt of the redemption request.  The maximum amount which may be redeemed
by telephone is $50,000.  The proceeds will be sent by check to the address
of record for the account.  If the amount is $500 or more, and if the
shareholder has designated a bank account, the proceeds may be wired to the
shareholder's designated bank account, and the prevailing wire charge
(currently $5.00) will be added to the amount redeemed from the Fund. The
Fund reserves the right to modify, terminate or impose charges upon the
telephone redemption privilege.

INTERNET REDEMPTION

The Fund's shareholders may elect to perform certain transactions via the
Internet. In order to do so, you must first authorize us to transmit information
on-line and agree to our web site procedures. Please contact Advantus Funds
Shareholder Services at (800) 665-6005 for more information on how to enable
your account. Internet transactions may not be honored, however, if the
shareholder's address of record or bank wire instructions have been changed
without a guarantee of the shareholder's signature (see "Signature Guarantee"
above) within the 30 day period prior to receipt of the redemption request. The
maximum amount which may be redeemed by internet is $50,000. The proceeds will
be sent by check to the address of record for the account. If the amount is $500
or more, and if the shareholder has designated a bank account, the proceeds may
be wired to the shareholder's designated bank account, and the prevailing wire
charge (currently $5.00) will be added to the amount redeemed from the Fund. The
Fund reserves the right to modify, terminate or impose charges upon the
telephone redemption privilege.

DELAY IN PAYMENT OF REDEMPTION PROCEEDS

     Payment of redemption proceeds will ordinarily be made as soon as possible
and within the periods of time described above.  However, an exception to this
is that if redemption is requested after a purchase by non-guaranteed funds
(such as a personal check), the Fund will delay mailing the redemption check or
wiring proceeds until it has reasonable assurance that the purchase check has
cleared (good payment has been collected).  This delay may be up to 14 days from
the purchase date.

FUND'S RIGHT TO REDEEM SMALL ACCOUNTS

     The Fund has the right to redeem the shares in inactive accounts which, due
to redemptions and not to decreases in market value of the shares in the
account, have a total current value of less than $150.  Before redeeming an
account, the Fund will mail to the shareholder a written notice of its intention
to redeem, which will give the investor an opportunity to make an additional
investment.  If no additional investment is received by the Fund within 60 days
of the date the notice was mailed, the shareholder's account will be redeemed.

CHECKWRITING

     Money Market Fund shareholders may elect the checkwriting privilege which
allows them to write checks in amounts from a minimum of $250 to a maximum of
$100,000.  No charge is made for check orders.  Checks may not be written
against shares in a Fund account which have been purchased within the last 14
days, except for shares purchased by wire transfer (which are immediately
available).  Checkwriting is not an appropriate means to close a Fund account.
A $10 service fee will be charged when a check is presented to redeem Fund
shares (i) in excess of the value of the shareholder's Fund account, or (ii)
which were purchased by check within 14 days.  A $15 service fee will be charged
when a shareholder requests "stop payment" of a check.


                                         -67-
<PAGE>

AUTOMATIC PREMIUM PAYMENTS

     A shareholder may authorize Minnesota Life to redeem shares in his or her
Money Market Fund account periodically in amounts equal to the premiums due on
insurance policies issued to the shareholder by Minnesota Life and to apply
those amounts in payment of the premiums due on those policies.  Payment of
insurance premiums in this manner may be made only where such insurance premiums
are due on a monthly basis.  In no event will Minnesota Life redeem shares to
pay on insurance premium unless there are shares in a shareholder's Money Market
Fund account sufficient to pay the full amount of the premium.

REINSTATEMENT PRIVILEGE

     The Prospectus for each of the Advantus Multiple Class Funds describes
redeeming shareholders' reinstatement privileges in "Buying and Selling Shares"
in each Fund's Prospectus.  Written notice from persons wishing to exercise this
reinstatement privilege must be received by Ascend Financial within 90 days
after the date of the redemption.  The reinstatement or exchange will be made at
net asset value next determined after receipt of the notice and will be limited
to the amount of the redemption proceeds or to the nearest full share if
fractional shares are not purchased.  All shares issued as a result of the
reinstatement privilege applicable to redemptions of Class A and Class B shares
will be issued only as Class A shares.  Any CDSC incurred in connection with the
prior redemption (within 90 days) of Class B shares will not be refunded or
re-credited to the shareholder's account.  Shareholders who redeem Class C
shares and exercise their reinstatement privilege will be issued only Class C
shares, which shares will have a remaining holding period prior to conversion
equal to the remaining holding period applicable to the prior Class C shares at
redemption.

     See "Distributions and Tax Status" below for a discussion of the effect of
redeeming shares within 90 days after acquiring them and subsequently acquiring
new shares in any mutual fund at a reduced sales charge.  Should an investor
utilize the reinstatement privilege following a redemption which resulted in a
loss, all or a portion of that loss might not be currently deductible for
Federal income tax purposes, for an investor which is not tax-exempt.
Exercising the reinstatement privilege would not alter any capital gains taxes
payable on a realized gain, for an investor which is not tax-exempt.  See
discussion under "Distributions and Tax Status" below regarding the taxation of
capital gains.

                                TELEPHONE TRANSACTIONS

     Shareholders of the Fund are permitted to exchange or redeem the Fund's
shares by telephone.  See "Exchange and Transfer of Fund Shares" and
"Redemptions" for further details.  The privilege to initiate such transactions
by telephone is made available automatically unless the shareholder elects on
the account application not to have such privilege.

     Shareholders, or persons authorized by shareholders, may initiate telephone
transactions by telephoning Advantus Shareholder Services, toll free, at
1-800-665-6005.  Automated service is available 24 hours a day, and service
representatives are available Monday through Friday, from 8:00 a.m. to 4:45 p.m.
(Central Time).  Telephone transaction requests received after 3:00 p.m.
(Central Time) will be treated as received the next business day.  The maximum
amount which may be redeemed by telephone is $50,000.  During periods of marked
economic or market changes, shareholders may experience difficulty in
implementing a telephone exchange or redemption due to a heavy volume of
telephone calls.  In such a circumstance, shareholders should consider
submitting a written request as an alternative to a telephone exchange or
redemption.  The Fund reserves the right to modify, terminate or impose charges
upon the telephone exchange and redemption privileges upon 60 days' prior notice
to shareholders.


                                         -68-
<PAGE>

     The Fund will not be liable for following instructions communicated by
telephone which it reasonably believes to be genuine; provided, however, that
the Fund will employ reasonable procedures to confirm that instructions
communicated by telephone are genuine, and that if they do not, they may be
liable for any losses due to unauthorized or fraudulent instructions.  The
procedures for processing telephone transactions include tape recording of
telephone instructions, asking shareholders for their account number and a
personal identifying number, and providing written confirmation of such
transactions.

                              INTERNET TRANSACTIONS

     Shareholders of the Fund are permitted to exchange or redeem the Fund's
share via the Internet. See "Exchange and Transfer of Fund Shares" and
"Redemptions" for further details. The privilege to initiate such transactions
via Internet requires that a shareholder contact Advantus at (800) 665-6005 to
enable their account.

     Shareholders, or persons authorized by shareholders, may initiate Internet
transactions by going to the Advantus Funds web site, www.advantusfunds.com.
Automated service is generally available 24 hours a day. Internet transaction
requests received after 3:00 p.m. (Central time) will be treated as received the
next business day. The maximum amount which may be redeemed via Internet is
$50,000. During periods of marked economic or market changes, shareholders may
experience difficulty in implementing an on-line exchange or redemption due to a
heavy volume. In such a circumstance, shareholders should consider submitting a
written request while continuing to attempt an on-line exchange or redemption.
The Fund reserves the right to modify, terminate or impose charges upon the
Internet on-line exchange and redemption privileges upon 60 days' prior notice
to shareholders.

     The Fund will not be liable for following instructions communicated by
Internet which it reasonably believes to be genuine; provided, however, that the
Fund will employ reasonable procedures to confirm that instructions communicated
via the Internet are genuine, and that if they do not, they may be liable for
any losses due to unauthorized or fraudulent instructions. The procedures for
processing Internet transactions include requiring shareholders to contact
Advantus in order to establish their on-line account, asking shareholders for
their account number and a personal identifying number, providing a confirmation
number on-screen, at the completion of an on-line transaction, and providing
written confirmation of such transactions.

                             DISTRIBUTIONS AND TAX STATUS

DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS

     The policy of the Funds (other than Mortgage Securities Fund, Bond Fund and
Money Market Fund) has been to pay dividends from net investment income
quarterly.  In the case of Horizon Fund, however, such quarterly dividends from
current income have not been paid since 1993 inasmuch as the dividend yields of
the mid and large capitalization companies in which the Fund invests have
generally fallen below the average yield for all companies.  The policy of
Mortgage Securities Fund, Bond Fund and Money Market Fund has been to declare
dividends from net investment income on each business day of the Fund, except
that dividends for Saturdays, Sundays and holidays are declared on the next
business day, and to pay such dividends monthly.  Any net realized capital gains
are generally distributed once a year, during December.

     For all Funds other than Money Market Fund, distributions, if any, paid
with respect to Class A, Class B and Class C shares will be calculated in the
same manner, at the same time, on the same day and will be in the same
amount, except that the higher Rule 12b-1 fees applicable to Class B and
Class C shares will be borne exclusively by such shares.  The per share
distributions on Class B and Class C shares will be lower than the per share
distributions on Class A shares as a result of the higher Rule 12b-1 fees
applicable to Class B and Class C shares.

     Any dividend payments or net capital gains distributions made by a Fund
are in the form of additional shares of the same class of the Fund rather than
in cash, unless a shareholder specifically requests the Fund in writing that the
payment be made in cash.  The distribution of these shares is made at net asset
value on the payment date of the dividend, without any sales or other charges to
the shareholder.  The taxable status of income dividends and/or net capital
gains distributions is not affected by whether they are reinvested or paid in
cash.  Authorization to pay dividends in cash may be made on the application
form, or at any time by letter.

     For federal income tax purposes, Enterprise Fund, Cornerstone Fund, Bond
Fund and Mortgage Securities Fund have capital loss carryovers as of
September 30, 2000 in the amounts of $0, $734,939, $1,888,906 and $620,775,
respectively.  It is unlikely the Board of Directors will authorize a
distribution of any net realized capital gain until the available capital loss
carryover has been offset or expires.

     Upon written request to a Fund, a shareholder may also elect to have
dividends from the Fund invested without sales charge in shares of Money
Market Fund or shares of the same class of another of the Advantus Funds at
the net asset value of such other Fund on the payable date for the dividends
being distributed (subject to the applicable sales charge).  To use this
privilege of investing dividends from a Fund in shares of another of the
Funds, shareholders must maintain a minimum account value of $250 in both the
Fund paying the dividends and the other Fund in which dividends are
reinvested.

TAXATION - GENERAL

     The following is a general summary of certain federal tax considerations
affecting the Funds and their shareholders.  No attempt is made to present a
detailed explanation of the tax treatment of the Funds or their
shareholders, and the discussion here is not intended as a substitute for
careful tax planning.

     During the year ended September 30, 2000 each Fund fulfilled, and
intends to continue to fulfill, the requirements of Subchapter M of the
Internal Revenue Code of 1986, as amended (the "Code"), as a regulated
investment company.  If so qualified, each Fund will not be liable for
federal income taxes to the extent it distributes its taxable income to its
shareholders.


                                         -69-
<PAGE>

     Distributions of investment company taxable income from a Fund generally
will be taxable to shareholders as ordinary income, regardless of whether such
distributions are paid in cash or are invested in additional shares of the
Fund's stock.  A distribution of net capital gain (a "capital gain
distribution"), whether paid in cash or reinvested in shares, generally is
taxable to shareholders as long-term capital gain, regardless of the length of
time a shareholder has held his or her shares or whether such gain was realized
by the Fund before the shareholder acquired such shares and was reflected in the
price paid for the shares.  Long-term capital gains of individuals are taxed at
a maximum rate of 20%, and the highest marginal regular tax rates on ordinary
income for individuals is 39.6%.

     Some or all of the dividend distributions from Horizon, Spectrum,
Enterprise and Cornerstone Funds are expected to qualify for the 70% dividend
received deduction for corporations.

     If more than 50% of International Fund's total assets at the close of its
fiscal year consist of securities of foreign corporations, it will be eligible
to, and may, file an election with the Internal Revenue Service pursuant to
which shareholders will be required to include their pro rata portions of
foreign taxes paid by the Fund as income received by them.  Shareholders may
then either deduct such pro rata portions in computing their taxable income or
use them as foreign tax credits against their United States income taxes.  If
the Fund makes such an election, it will report annually to each shareholder the
amount of foreign taxes to be included in income and then either deducted or
credited.

     Alternatively, if the amount of foreign taxes paid by International Fund is
not large enough to warrant its making the election described above, the Fund
may claim the amount of foreign taxes paid as a deduction against its own gross
income.  In that case, shareholders would not be required to include any amount
of foreign taxes paid by the Fund in their income and would not be permitted
either to deduct any portion of foreign taxes from their own income or to claim
any amount of foreign tax credit for taxes paid by the Fund.

     Prior to purchasing shares of the Fund, prospective shareholders (except
for tax-qualified retirement plans) should consider the impact of dividends
or capital gains distributions which are expected to be announced, or have
been announced but not paid.  Any such dividends or capital gains
distributions paid shortly after a purchase of shares by an investor prior to
the record date will have the effect of reducing the per share net asset
value by the amount of the dividends or distributions.  All or a portion of
such dividends or distributions, although in effect a return of capital, is
subject to taxation.

     The Code provides that a shareholder who pays a sales charge in acquiring
shares of a mutual fund, redeems those shares within 90 days after acquiring
them, and subsequently acquires new shares in any mutual fund for a reduced
sales charge or no sales charge (pursuant to a reinvestment right acquired with
the first shares), may not take into account the sales charge imposed on the
first acquisition, to the extent of the reduction in the sales charge on the
second acquisition, for purposes of computing gain or loss on disposition of the
first acquired shares.  The amount of sales charge disregarded under this rule
will, however, be treated as incurred in connection with the acquisition of the
second acquired shares.

     Shareholders of the Fund receive an annual statement detailing federal tax
information.  Distributions by the Funds, including the amount of any
redemption, are reported to shareholders in such annual statement and to the
Internal Revenue Service to the extent required by the Code.

     The Funds are required by federal law to withhold 31% of reportable
payments (including dividends, capital gain distributions, and redemptions) paid
to certain accounts whose owners have not complied with IRS regulations.  In
order to avoid this backup withholding requirement, each shareholder will be
asked to certify on the shareholder's account application that the social
security or taxpayer identification number provided is correct and that the
shareholder is not subject to backup withholding for previous underreporting to
the IRS.

     Some of the investment practices that may be employed by the Funds will be
subject to special provisions that, among other things, may defer the use of
certain losses of such Funds, affect the holding period of the securities held
by the Funds and, particularly in the case of transactions in or with respect to
foreign currencies, affect the character of the gains or losses realized.  These
provisions may also require the Funds to mark-to-market some of the positions in
their respective portfolios (i.e., treat them as closed out) or to accrue
original discount, both of which may cause such Funds to recognize income
without receiving cash with which to make distributions in amounts necessary to
satisfy the distribution requirements for qualification as a regulated
investment company and for avoiding income and excise taxes.  Accordingly, in
order to make the required distributions, a Fund may be required to borrow or
liquidate securities.  Each Fund will monitor its transactions and may make
certain elections in order to mitigate the effect of these rules and prevent
disqualification of the Funds as regulated investment companies.


                                         -70-
<PAGE>

     Each Fund is subject to a non-deductible excise tax equal to 4 percent of
the excess, if any, of the amount required to be distributed pursuant to the
Code for each calendar year over the amount actually distributed.  In order to
avoid the imposition of this excise tax, the Fund generally must declare
dividends by the end of a calendar year representing 98 percent of the Fund's
ordinary income for the calendar year and 98 percent of its capital gain net
income (both long-term and short-term capital gains) for the twelve-month period
ending October 31 of the calendar year.

     The foregoing relates only to federal taxation.  Prospective shareholders
should consult their tax advisers as to the possible application of state and
local income tax laws to ownership of Fund shares.

                                 FINANCIAL STATEMENTS

     Each Fund's financial statements for the year ended September 30, 2000,
including the financial highlights for each of the respective periods presented,
appearing in such Fund's Annual Report to Shareholders, and the report thereon
of such Fund's independent auditors, KPMG LLP, also appearing therein, are
incorporated by reference in this Statement of Additional Information.


                                         -71-
<PAGE>

                                     APPENDIX A

                            MORTGAGE-RELATED SECURITIES

     Mortgage-related securities represent an ownership interest in a pool of
residential mortgage loans.  These securities are designed to provide monthly
payments of interest and principal to the investor.  The mortgagor's monthly
payments to his lending institution are "passed-through" to investors such as
the Fund.  Most insurers or services provide guarantees of payments, regardless
of whether or not the mortgagor actually makes the payment.  The guarantees made
by issuers or servicers are backed by various forms of credit, insurance and
collateral.

UNDERLYING MORTGAGES

     Pools consist of whole mortgage loans or participations in loans.  The
majority of these loans are made to purchasers of 1-4 family homes.  Some of
these loans are made to purchasers of mobile homes.  The terms and
characteristics of the mortgage instruments are generally uniform within a pool
buy may vary among pools.  For example, in addition to fixed-rate fixed-term
mortgages, the fund may purchase pools of variable rate mortgages, growing
equity mortgages, graduated payment mortgages and other types.

     All servicers apply standards for qualification to local lending
institutions which originate mortgages for the pools.  Servicers also establish
credit standards and underwriting criteria for individual mortgages included in
the pools.  In addition, many mortgages included in pools are insured through
private mortgage insurance companies.

LIQUIDITY AND MARKETABILITY

     Since the inception of the mortgage-related pass-through security in 1970,
the market for these securities has expanded considerably.  The size of the
primary issuance market and active participation in the secondary market by
securities dealers and many types of investors makes government and
government-related pass-through pools highly liquid.  The recently introduced
private conventional pools of mortgages (pooled by commercial banks, savings and
loans institutions and others, with no relationship with government and
government-related entities) have also achieved broad market acceptance and
consequently an active secondary market has emerged.  However, the market for
conventional pools is smaller and less liquid than the market for the government
and government-related mortgage pools.  The Fund may purchase some
mortgage-related securities through private placements, in which case only a
limited secondary market exists, and the security is considered illiquid.

AVERAGE LIFE

     The average life of pass-through pools varies with the maturities of the
underlying mortgage instruments.  In addition, a pool's term may be shortened by
unscheduled or early payments of principal and interest on the underlying
mortgages.  The occurrence of mortgage prepayments is affected by factors
including the level of interest rates, general economic conditions, the location
and age of the mortgage and other social and demographic conditions.

     As prepayment rates of individual pools vary widely, it is not possible to
accurately predict the average life of a particular pool.  For pools of
fixed-rate 30-year mortgages, common industry practice is to assume that
prepayments will result in a 12-year average life.  Pools of mortgages with
other maturities or different characteristics will have varying assumptions for
average life.  The assumed average life of pools of mortgages having terms of
less than 30 years is less than 12 years, but typically not less than 5 years.


                                         A-1
<PAGE>

YIELD CALCULATIONS

     Yields on pass-through securities are typically quoted by investment
dealers and vendors based on the maturity of the underlying instruments and the
associated average life assumption.  In periods of falling interest rates the
rate of prepayment tends to increase, thereby shortening the actual average life
of a pool of mortgage-related securities.  Conversely, in periods of rising
rates and the rate of prepayment tends to decrease, thereby lengthening the
actual average life of the pool.  Historically, actual average life has been
consistent with the 12-year assumption referred to above.

     Actual prepayment experience may cause the yield to differ from the assumed
average life yield.  Reinvestment of prepayments may occur at higher or lower
interest rates than the original investment, thus affecting the yield of the
Fund.  The compounding effect from reinvestments of monthly payments received by
the Fund will increase the yield to shareholders compared to bonds that pay
interest semi-annually.


                                         A-2
<PAGE>

                                      APPENDIX B

                          BOND AND COMMERCIAL PAPER RATINGS

BOND RATINGS

Moody's Investors Service, Inc. describes its six highest ratings for corporate
bonds and mortgage-related securities as follows:

     Bonds which are rated Aaa are judged to be of the best quality.  They carry
     the smallest degree of investment risk and are generally referred to as
     "gilt edge."  Interest payments are protected by a large or by an
     exceptionally stable margin and principal is secure.  While the various
     protective elements are likely to change, such changes as can be visualized
     are most unlikely to impair the fundamentally strong position of such
     issues.

     Bonds which are rated Aa are judged to be of high quality by all standards.
     Together with the Aaa group they comprise what are generally known as high
     grade bonds.  They are rated lower than the best bonds because margins of
     protection may not be as large as in Aaa securities or fluctuation of
     protective elements may be of greater amplitude or there may be other
     elements present which make the long term risks appear somewhat larger than
     in Aaa securities.

     Bonds which are rated A possess many favorable investment attributes and
     are to be considered as upper medium grade obligations.  Factors giving
     security to principal and interest are considered adequate but elements may
     be present which suggest a susceptibility to impairment some time in the
     future.

     Bonds which are rated Baa are considered medium grade obligations, i.e.,
     they are neither highly protected nor poorly secured.  Interest payments
     and principal security appear adequate for the present but certain
     protective elements may be lacking or  may be characteristically unreliable
     over any great length of time.  Such bonds lack outstanding investment
     characteristics and in fact have speculative characteristics as well.

     Bonds which are rated Ba are judged to have speculative elements; their
     future cannot be considered as well-assured.  Often the protection of
     interest and principal payments may be very moderate, and thereby not well
     safeguarded during both good and bad times over the future.  Uncertainty of
     position characterizes bonds in this class.

     Bonds which are rated B generally lack characteristics of the desirable
     investment.  Assurance of interest and principal payments or of maintenance
     of other terms of the contract over any long period of time may be small.

Moody's Investors Service, Inc. also applies numerical modifiers, 1, 2, and 3,
in each of these generic rating classifications.  The modifier 1 indicates that
the security ranks in the higher end of its generic rating category; the
modifier 2 indicates a mid-range ranking; and the modifier 3 indicates that the
issue ranks in the lower end of its generic rating category.

Standard & Poor's Corporation describes its six highest ratings for corporate
bonds and mortgage-related securities as follows:


                                         B-1
<PAGE>

     AAA.  Debt rated "AAA" has the highest rating assigned by Standard &
     Poor's.  Capacity to pay interest and repay principal is extremely strong.

     AA.  Debt rated "AA" has a very strong capacity to pay interest and repay
     principal and differs from the higher rated issues only in small degree.

     A.  Debt rated "A" has a strong capacity to pay interest and repay
     principal although it is somewhat more susceptible to the adverse effects
     of changes in circumstances and economic conditions than debt in higher
     rated categories.

     BBB.  Debt rated "BBB" is regarded as having an adequate capacity to pay
     interest and repay principal.  Whereas it normally exhibits adequate
     protection parameters, adverse economic conditions or changing
     circumstances are more likely to lead to a weakened capacity to pay
     interest and repay principal for debt in this category than in higher rated
     categories.

     BB.  Debt rated "BB" has less near-term vulnerability to default than other
     speculative grade debt.  However, it faces major ongoing uncertainties or
     exposure to adverse business, financial, or economic conditions that could
     lead to inadequate capacity to meet timely interest and principal payments.

     B.  Debt rated "B" has a greater vulnerability to default but currently has
     the capacity to meet interest payments and principal repayments.  Adverse
     business, financial, or economic conditions will likely impair capacity or
     willingness to pay interest and repay principal.  The "B" rating category
     is also used for debt subordinated to senior debt that is assigned an
     actual or implied "BB" or "BB-" rating.

Standard & Poor's Corporation applies indicators "+", no character, and "-" to
the above rating categories.  The indicators show relative standing within the
major rating categories.

COMMERCIAL PAPER RATINGS

The rating Prime-1 is the highest commercial paper rating assigned by Moody's
Investors Service, Inc.  Among the factors considered by Moody's Investors
Service, Inc. in assigning the ratings are the following:  (1) evaluation of the
management of the issuer, (2) economic evaluation of the issuer's industry or
industries and an appraisal of speculative-type risks which may be inherent in
certain areas; (3) evaluation of the issuer's products in relation to
competition and customer acceptance; (4) liquidity; (5) amount and quality of
long-term debt; (6) trend of earnings over a period of ten years; (7) financial
strength of a parent company and the relationships which exist with the issuer;
an (8) recognition by the management of obligations which may be present or may
arise as a result of public interest questions and preparations to meet such
obligations.

The rating A-1 is the highest rating assigned by Standard & Poor's Corporation
to commercial paper which is considered by Standard & Poor's Corporation to have
the following characteristics:

Liquidity ratios of the issuer are adequate to meet cash redemptions.  Long-term
senior debt is rated "A" or better.  The issuer has access to at least two
additional channels of borrowing.  Basic earnings and cash flow have an upward
trend with allowance made for unusual circumstances.  Typically, the issuer's
industry is well established and the issuer has a strong position within the
industry.  The reliability and quality of management are unquestioned.


                                         B-2
<PAGE>

                                      APPENDIX C

                                  FUTURES CONTRACTS

EXAMPLE OF FUTURES CONTRACT SALE

     The Fund would engage in a futures contract sale to maintain the income
advantage from continued holding of a long-term security while endeavoring to
avoid part or all of the loss in market value that would otherwise accompany a
decline in long-term securities prices.  Assume that the market value of a
certain security in the Fund's portfolio tends to move in concert with the
futures market prices of long-term United States Treasury bonds ("Treasury
bonds").  The Fund wishes to fix the current market value of this portfolio
security until some point in the future.  Assume the portfolio security has a
market value of $100, and the Fund believes that, because of an anticipated rise
in interest rates, the value will decline to $95.  The Fund might enter into
futures contract sales of Treasury bonds for a price of $98.  If the market
value of the portfolio security does indeed decline from $100 to $95, the
futures market price for the Treasury bonds might also decline from $98 to $93.

     In that case, the $5 loss in the market value of the portfolio security
would be offset by the $5 gain realized by closing out the futures contract
sale.  Of course, the futures market price of Treasury bonds might decline to
more than $93 or to less than $93 because of the imperfect correlation between
cash and futures prices mentioned above.

     The Fund could be wrong in its forecast of interest rates and the futures
market price could rise above $98.  In this case, the market value of the
portfolio securities, including the portfolio security being protected, would
increase.  The benefit of this increase would be reduced by the loss realized on
closing out the futures contract sale.

     If interest rate levels did not change prior to settlement date, the Fund,
in the above example, would incur a loss of $2 if it delivered the portfolio
security on the settlement date (which loss might be reduced by an offsetting
transaction prior to the settlement date).  In each transaction, nominal
transaction expenses would also be incurred.

EXAMPLE OF FUTURES CONTRACT PURCHASE

     The Fund would engage in a futures contract purchase when it is not fully
invested in long-term securities but wishes to defer for a time the purchase of
long-term securities in light of the availability of advantageous interim
investments, e.g., short-term securities whose yields are greater than those
available on long-term securities.  The Fund's basic motivation would be to
maintain for a time the income advantage from investing in the short-term
securities; the Fund would be endeavoring at the same time to eliminate the
effect of all or part of the increases in market price of the long-term
securities that the Fund may purchase.

     For example, assume that the market price of a long-term security that the
Fund may purchase, currently yielding 10%, tends to move in concert with futures
market prices of Treasury bonds.  The Fund wishes to fix the current market
price (and thus 10% yield) of the long-term security until the time (four months
away in this example) when it may purchase the security.

     Assuming the long-term security has a market price of $100, and the Fund
believes that, because of an anticipated fall in interest rates, the price will
have risen to $105 (and the yield will have dropped to about 9-1/2%) in four
months, the Fund might enter into futures contracts purchases of Treasury bonds
for a price of $98.  At the same time, the Fund would assign a pool of
investments in short-term securities that are either maturing in four months or
earmarked for sale in four months, for purchase of the long-term security at an
assumed market price of $100.  Assume these short-term securities are yielding
15%.  If the market price of the long-term bond does indeed rise from $100 to
$105, the futures market price for Treasury bonds might also rise from $98 to
$103.  In that case, the $5 increase in the price that the Fund pays for the
long-term security would be offset by the $5 gain realized by closing out the
futures contract purchase.


                                         C-1
<PAGE>

     The Fund could be wrong in its forecast of interest rates; long-term
interest rates might rise to above 10%, and the futures market price could fall
below $98.  If short-term rates at the same time fall to 10% or below, it is
possible that the Fund would continue with its purchase program for long-term
securities.  The market prices of available long-term securities would have
decreased.  The benefit of this price decrease, and thus yield increase, will be
reduced by the loss realized on closing out the futures contract purchase.

     If, however, short-term rates remained above available long-term rates, it
is possible that the Fund would discontinue its purchase program for long-term
securities.  The yields on short-term securities in the portfolio, including
those originally in the pool assigned to the particular long-term security,
would remain higher than yields on long-term bonds.  The benefit of this
continued incremental income will be reduced by the loss realized on closing out
the futures contract purchase.

     In each transaction, nominal transaction expenses would also be incurred.

TAX TREATMENT

     The amount of any gain or loss realized by the Fund on closing out a
futures contract may result in a capital gain or loss for federal income tax
purposes.  Generally, futures contracts held by the Fund at the close of the
Fund's taxable year will be treated for federal income tax purposes as sold for
their fair market value on the last business day of such year.  Forty percent of
any gain or loss resulting from such constructive sale will be treated as
short-term capital gain or loss and 60 percent of such gain or loss will be
treated as long-term capital gain or loss.  The amount of any capital gain or
loss actually realized by the Fund in a subsequent sale or other disposition of
these futures contracts will be adjusted to reflect any capital gain or loss
taken into account by the Fund in a prior year as a result of the constructive
sale of the contract.  Notwithstanding the rules described above, with respect
to futures contracts which are part of futures contract sales, and in certain
other situations, the Fund may make an election which may have the effect of
exempting all or a part of those identified future contracts from being treated
for federal income tax purposes as sold on the last business day of the Fund's
taxable year; all or part of any gain or loss otherwise realized by the Fund on
any closing transaction may be deferred until all of the Fund's positions with
respect to the futures contract sales are closed; and, all or part of any gain
or loss may be treated as short-term capital gain or loss.

     Under the Federal income tax provisions applicable to regulated investment
companies, at least 90% of the Fund's annual gross income must be derived from
dividends, interest, payments with respect to loans of securities, and gains
from the sale or other disposition of securities ("qualifying income").  Under
the Internal Revenue Code of 1986, as amended (the "Code"), the Fund may include
gains from forward contracts in determining qualifying income.  In addition, in
order that the Fund continue to qualify as a regulated investment company for
Federal income tax purposes, less than 30% of its gross income for any year must
be derived from gains realized on the sale or other disposition of securities
held by the Fund for less than three months.  For this purpose, the Fund will
treat gains realized on the closing out of futures contracts as gains derived
from the sale of securities.  This treatment could, under certain circumstances,
require the Fund to defer the closing out of futures contracts until after three
months from the date the fund acquired the contracts, even if it would be more
advantageous to close out the contracts prior to that time.  However, under the
Code, a special rule is provided with respect to certain hedging transactions
which has the effect of allowing the Fund to engage in such short-term
transactions in limited circumstances.  Any gains realized by the Fund as a
result of the constructive sales of futures contacts held by the Fund at the end
of its taxable year, as described in the preceding paragraph, will in all
instances be treated as derived from the sale of securities held for three
months or more, regardless of the actual period for which the Fund has held the
futures contracts at the end of the year.


                                         C-2

<PAGE>

                             PART C.  OTHER INFORMATION

ITEM 23.  EXHIBITS

     The exhibits to this Registration Statement are listed in the Exhibit
Index hereto and are incorporated herein by reference.

ITEM 24.  PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE FUND

Wholly-owned subsidiary of Minnesota Mutual Companies, Inc.:

     Securian Holding Company (Delaware)

Wholly-owned subsidiaries of Securian Holding Company:


     Securian Financial Group, Inc. (Delaware)
     Capitol City Property Management, Inc.


Wholly-owned subsidiaries of Securian Financial Group, Inc.


     Minnesota Life Insurance Company
     HomePlus Insurance Agency, Inc.
     Securian Ventures, Inc.

Wholly-owned subsidiaries of Minnesota Life Insurance Company:

     Advantus Capital Management, Inc.
     HomePlus Insurance Company
     Northstar Life Insurance Company (New York)
     The Ministers Life Insurance Company
     Robert Street Energy, Inc.
     Personal Finance Company (Delaware)
     Enterprise Holding Corporation

Open-end registered investment company offering shares solely to separate
accounts of Minnesota Life Insurance Company:

     Advantus Series Fund, Inc.

Wholly-owned subsidiary of Advantus Capital Management, Inc.:

     Ascend Financial Services, Inc.

<PAGE>

Wholly-owned subsidiaries of Ascend Financial Services, Inc.:

     MIMLIC Insurance Agency of Massachusetts, Inc. (Massachusetts)
     MIMLIC Insurance Agency of Texas, Inc. (Texas)
     Ascend Insurance Agency of Nevada, Inc. (Nevada)
     Ascend Insurance Agency of Oklahoma, Inc. (Oklahoma)
     Worthmark Financial Services, LLC (Delaware)

Wholly-owned subsidiaries of Enterprise Holding Corporation:

     Financial Ink Corporation
     Oakleaf Service Corporation
     Concepts in Marketing Research Corporation
     Lafayette Litho, Inc.
     DataPlan Securities, Inc. (Ohio)
     MIMLIC Imperial Corporation
     MIMLIC Funding, Inc.
     MCM Funding 1997-1, Inc.
     MCM Funding 1998-1, Inc.
     Ministers Life Resources, Inc.
     Wedgewood Valley Golf, Inc.

Wholly-owned subsidiary of HomePlus Insurance Agency, Inc.:

     HomePlus Insurance Agency of Texas, Inc. (Texas)




Majority-owned subsidiaries of Minnesota Life Insurance Company:

     MIMLIC Life Insurance Company (Arizona)
     Advantus Cornerstone Fund, Inc.
     Advantus Enterprise Fund, Inc.
     Advantus International Balanced Fund, Inc.
     Advantus Venture Fund, Inc.
     Advantus Real Estate Securities Fund, Inc.




Fifty percent-owned subsidiary of MIMLIC Imperial Corporation:

     C.R.I. Securities, Inc.

Less than majority owned, but greater than 25% owned, subsidiary of Minnesota
Life Insurance Company:


     Advantus Money Market Fund, Inc.

<PAGE>

Less than 25% owned subsidiaries of Minnesota Life Insurance Company:

     Advantus Horizon Fund, Inc.
     Advantus Spectrum Fund, Inc.
     Advantus Mortgage Securities Fund, Inc.
     Advantus Bond Fund, Inc.
     Advantus Index 500 Fund, Inc.

Unless indicated otherwise parenthetically, each of the above corporations is a
Minnesota corporation.

ITEM 25.  INDEMNIFICATION

     The Articles of Incorporation and Bylaws of the Registrant provide that
the Registrant shall indemnify such persons, for such expenses and
liabilities, in such manner, under such circumstances, to the full extent
permitted by Section 302A.521, Minnesota Statutes, as now enacted or
hereafter amended, provided that no such indemnification may be made if it
would be in violation of Section 17(h) of the Investment Company Act of 1940,
as now

<PAGE>

enacted or hereafter amended. Section 302A.521 of the Minnesota Statutes, as
now enacted, provides that a corporation shall indemnify a person made or
threatened to be made a party to a proceeding against judgments, penalties,
fines, settlements and reasonable expenses, including attorneys' fees and
disbursements, incurred by the person in connection with the proceeding, if,
with respect to the acts or omissions of the person complained of in the
proceeding, the person has not been indemnified by another organization for
the same judgments, penalties, fines, settlements and reasonable expenses
incurred by the person in connection with the proceeding with respect to the
same acts or omissions; acted in good faith; received no improper personal
benefit and the Minnesota Statute dealing with directors' conflicts of
interest, if applicable, has been satisfied; in the case of a criminal
proceeding, had no reasonable cause to believe the conduct was unlawful and
reasonably believed that the conduct was in the best interests of the
corporation or, in certain circumstances, reasonably believed that the
conduct was not opposed to the best interests of the corporation.

     Section 17(h) of the Investment Company Act of 1940 provides that
neither the charter, certificate of incorporation, articles of association,
indenture of trust, nor the by-laws of any registered investment company, nor
any other instrument pursuant to which such a company is organized or
administered, shall contain any provisions which protects or purports to
protect any director or officer of such company against any liability to the
company or to its security holders to which he would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of duties involved in the conduct of his office.  The staff of the
Securities and Exchange Commission has stated that it is of the view that an
indemnification provision does not violate Section 17(h) if it precludes
indemnification for any liability arising by reason of willful misfeasance,
bad faith, gross negligence, or reckless disregard of duties ("Disabling
conduct") and sets forth reasonable and fair means for determining whether
indemnification shall be made.  In the staff's view, "reasonable and fair
means" would include (1) a final decision on the merits by a court or other
body before whom the proceeding was brought that the person to be indemnified
("indemnitee") was not liable by reason of disabling conduct or, (2) in the
absence of such a decision, a reasonable determination, based upon a review
of the facts, that the indemnitee was not liable by reason of disabling
conduct, by (a) the vote of a majority of a quorum of directors who are
neither "interested persons" of the company as defined in Section 2(a)(19) of
the Investment Company Act of 1940 nor parties to the proceeding
("disinterested, non-party directors") or (b) an independent legal counsel in
a written opinion.  The dismissal of either a court action or administrative
proceeding against an indemnitee for insufficiency of evidence of any
disabling conduct with which he has been charged would, in the staff's view,
provide reasonable assurance that he was not liable by reason of disabling
conduct.  The staff also believes that a determination by the vote of a
majority of a quorum of disinterested, non-party directors would provide
reasonable assurance that the indemnitee was not liable by reason of
disabling conduct.

     Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable.  In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or

<PAGE>

proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.

ITEM 26.  BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT ADVISER

<TABLE>
<CAPTION>

Directors and Officers              Office with                        Other Business
Of Investment Adviser               Investment Adviser                 Connections
---------------------               ------------------                 -----------
<S>                                 <C>                                <C>
William N. Westhoff                 President, Treasurer               Vice President and Director,
                                    and Director                       Robert Street Energy, Inc.; Senior Vice
                                                                       President and Treasurer, Minnesota Life
                                                                       Insurance Company; President, MCM Funding
                                                                       1997-1, Inc.; President, MCM Funding
                                                                       1998-1, Inc.

Frederick P. Feuerherm              Vice President,                    Vice President, Minnesota Life
                                    Assistant Secretary                Insurance Company; Vice
                                    and Director                       President and Director, MIMLIC Funding,
                                                                       Inc.; Vice President and Assistant
                                                                       Secretary, MCM Funding 1997-1, Inc.; Vice
                                                                       President and Assistant Secretary, MCM
                                                                       Funding 1998-1, Inc.

Guy M. de Lambert                   Vice President,                    Second Vice President,
                                    Secretary and                      Minnesota Life Insurance
                                    Director                           Company; President, Secretary and
                                                                       Director, Personal Finance Company;
                                                                       President and Director, Wedgewood Valley
                                                                       Golf, Inc.; President and Director, MIMLIC
                                                                       Funding, Inc.; President, Secretary and
                                                                       Director, Robert Street Energy, Inc.; Vice
                                                                       President and Secretary, MCM Funding
                                                                       1997-1, Inc.; Vice President and
                                                                       Secretary, MCM Funding 1998-1, Inc.

Lynne M. Mills                      Vice President                     Second Vice President, Minnesota Life
                                                                       Insurance Company; Vice President and
                                                                       Director, Robert Street Energy, Inc.; Vice
                                                                       President, MCM Funding 1997-1, Inc.; Vice
                                                                       President, MCM Funding 1998-1, Inc.

Dianne M. Orbison                   Vice President                     Vice President, Minnesota Life Insurance
                                                                       Company; Vice President

<PAGE>


                                                                       and Director, MCM Funding 1997-1, Inc.;
                                                                       Vice President, MCM Funding 1998-1, Inc.

Richard W. Worthing                 Vice President                     Vice President, MCM Funding
                                    and Head of Equities               1997-1, Inc.; Vice President, MIMLIC
                                                                       Funding, Inc.; Vice President, MCM Funding
                                                                       1998-1, Inc.; Second Vice President,
                                                                       Minnesota Life Insurance Company

Marilyn R. Froelich                 Vice President and                 Vice President, MCM Funding
                                    Director-Insurance                 1997-1 Inc.; Vice President,
                                    Asset Advisory                     MCM Funding 1998-1, Inc.; Advisory
                                                                       Director, Investment Advisory, Minnesota
                                                                       Life Insurance Company

Loren A. Haugland                   Vice President -                   Vice President, MCM Funding
                                    Insurance Asset                    1997-1, Inc.; Vice President,
                                    Advisory                           MCM Funding 1998-1, Inc.; Senior
                                                                       Investment Officer, Minnesota Life
                                                                       Insurance Company

Thomas A. Gunderson                 Vice President                     Vice President, MCM Funding 1997-1, Inc.;
                                                                       Vice President, MCM Funding 1998-1, Inc.;
                                                                       Senior Investment Officer, Equities,
                                                                       Minnesota Life Insurance Company

Kent R. Weber                       Vice President                     Vice President, MCM Funding 1997-1, Inc.;
                                                                       Vice President, MCM Funding 1998-1, Inc.;
                                                                       Investment Officer, Fixed Income,
                                                                       Minnesota Life Insurance Company

Wayne R. Schmidt                    Vice President                     Secretary and Treasurer, MIMLIC Funding,
                                                                       Inc.; Assistant Secretary and Treasurer,
                                                                       Robert Street Energy, Inc.; Vice President
                                                                       and Secretary, MIMLIC Imperial
                                                                       Corporation; Vice President and Assistant
                                                                       Secretary, MCM Funding 1997-1, Inc.; Vice
                                                                       President and Assistant Secretary, MCM
                                                                       Funding 1998-1, Inc.; Investment Officer
                                                                       Fixed Income, Minnesota Life Insurance
                                                                       Company
<PAGE>


Joseph R. Betlej                    Vice President                     Vice President, Secretary and Director,
                                                                       Wedgewood Valley Golf, Inc.; Vice
                                                                       President, MCM Funding 1997-1, Inc.; Vice
                                                                       President, MCM Funding 1998-1, Inc.;
                                                                       Senior Investment Officer, Minnesota Life
                                                                       Insurance Company

Erica A. Bergsland                  Vice President                     Vice President, MCM Funding 1997-1, Inc.;
                                                                       Vice President, MCM Funding 1998-1, Inc.;
                                                                       Senior Investment Officer - Structured
                                                                       Finance/Reserve Mortgage, Minnesota Life
                                                                       Insurance Company

Thomas G. Meyer                     Vice President                     Vice President, MCM Funding 1997-1, Inc.;
                                                                       Vice President, MCM Funding 1998-1, Inc.;
                                                                       Director, Marketing Development, Minnesota
                                                                       Life Insurance Company

Gary M. Kleist                      Financial Vice                     Second Vice President,
                                    President                          Investment Operations, Minnesota Life
                                                                       Insurance Company; Vice President, MCM
                                                                       Funding 1997-1, Inc.; Vice President, MCM
                                                                       Funding 1998-1, Inc.; Vice President,
                                                                       MIMLIC Funding, Inc.

Sean M. O'Connell                   Vice President                     Senior Investment Officer-Mortgages,
                                                                       Minnesota Life Insurance Company; Vice
                                                                       President, MCM Funding 1997-1, Inc.; Vice
                                                                       President, MCM Funding 1998-1, Inc.

John R. Leiviska                    Vice President                     Senior Investment Officer - Fixed Income,
                                                                       Minnesota Life Insurance Company; Vice
                                                                       President, MCM Funding 1997-1, Inc.; Vice
                                                                       President, MCM Funding 1998-1, Inc.

Annette M. Masterson                Vice President                     Senior Investment Officer, Fixed Income
                                                                       Research, Minnesota Life Insurance
                                                                       Company; Vice President, MCM Funding
                                                                       1997-1, Inc.; Vice
<PAGE>


                                                                       President, MCM Funding
                                                                       1998-1, Inc.

David R. Hackney                    Vice President                     Investment Officer, Total Return,
                                                                       Minnesota Life Insurance Company; Vice
                                                                       President, MCM Funding 1997-1, Inc.; Vice
                                                                       President, MCM Funding 1998-1, Inc.;

Steven S. Nelson                    Vice President                     Investment Officer, Total Return,
                                                                       Minnesota Life Insurance Company; Vice
                                                                       President, MCM Funding 1997-1, Inc.; Vice
                                                                       President, MCM Funding 1998-1, Inc.;

Vicki L. Bailey                     Associate General                  Investment Officer, Minnesota
                                    Counsel                            Life Insurance Company; Assistant
                                                                       Secretary, Personal Finance Company;
                                                                       Assistant Secretary, MCM Funding 1997-1,
                                                                       Inc.; Assistant Secretary, MCM Funding
                                                                       1998-1, Inc.

Rose A. Lambros                     Vice President                     Senior Investment Officer,
                                    and Assistant                      Minnesota Life Insurance
                                    Secretary                          Company; Vice President, MCM Funding
                                                                       1997-1, Inc.; Vice President, MCM Funding
                                                                       1998-1, Inc.

David W. Land                       Vice President                     Senior Investment Officer, Minnesota Life
                                                                       Insurance Company; Vice President, MCM
                                                                       Funding 1997-1, Inc.; Vice President, MCM
                                                                       Funding 1998-1, Inc.

James F. Geiger                     Vice President                     Senior Investment Officer, Minnesota Life
                                                                       Insurance Company; Vice President, MCM
                                                                       Funding 1997-1, Inc.; Vice President, MCM
                                                                       Funding 1998-1, Inc.

Allen D. Steinkopf                  Vice President                     Investment Officer, Minnesota Life
                                                                       Insurance Company; Vice President, MCM
                                                                       Funding 1997-1, Inc.; Vice President, MCM
                                                                       Funding 1998-1, Inc.
<PAGE>


Matthew T. Norris                   Vice President                     Investment Officer, Minnesota Life
                                                                       Insurance Company; Vice President, MCM
                                                                       Funding 1997-1, Inc.; Vice President, MCM
                                                                       Funding 1998-1, Inc.

Joseph L. Gogola                    Vice President                     Senior Investment Officer, Minnesota Life
                                                                       Insurance Company; Vice President, MCM
                                                                       Funding 1997-1, Inc.; Vice President, MCM
                                                                       Funding 1998-1, Inc.
</TABLE>

<PAGE>

ITEM 27.  PRINCIPAL UNDERWRITERS

     (a)  Ascend Financial Services, Inc. currently acts as a principal
underwriter for the following investment companies:

     Advantus Horizon Fund, Inc.
     Advantus Spectrum Fund, Inc.
     Advantus Mortgage Securities Fund, Inc.
     Advantus Money Market Fund, Inc.
     Advantus Bond Fund, Inc.
     Advantus Cornerstone Fund, Inc.
     Advantus Enterprise Fund, Inc.
     Advantus International Balanced Fund, Inc.
     Advantus Venture Fund, Inc.
     Advantus Index 500 Fund, Inc.
     Advantus Real Estate Securities Fund, Inc.
     Variable Fund D
     Variable Annuity Account
     Minnesota Life Variable Life Account
     Group Variable Annuity Account
     Minnesota Life Variable Universal Life Account



     (b)  The name and principal business address, positions and offices with
Ascend Financial Services, Inc., and positions and offices with Registrant of
each director and officer of Ascend Financial Services, Inc. is as follows:

<TABLE>
<CAPTION>
                                   Positions and                 Positions and
Name and Principal                 Offices                       Offices
Business Address                   with Underwriter              with Registrant
------------------                 ----------------              ---------------
<S>                                <C>                           <C>
Robert E. Hunstad                  Director                      None
Minnesota Life
  Insurance Company
400 Robert Street North
St. Paul, Minnesota 55101

George I. Connolly                 President, Chief              None
Ascend Financial Services, Inc.    Executive Officer
400 Robert Street North            and Director
St. Paul, Minnesota 55101

<PAGE>

Margaret Milosevich                Vice President, Chief         Assistant
Ascend Financial Services, Inc.    Operations Officer,           Secretary
400 Robert Street North            Treasurer and Secretary
St. Paul, Minnesota 55101

Loyall E. Wilson                   Vice President and            None
Ascend Financial Services, Inc.    Chief Compliance
400 Robert Street North            Officer
St. Paul, Minnesota  55101

Dennis E. Prohofsky                Director                      None
Minnesota Life
  Insurance Company
400 Robert Street North
St. Paul, Minnesota 55101

Thomas L. Clark                    Assistant Treasurer           Assistant
Ascend Financial Services, Inc.    and Assistant Secretary       Secretary
400 Robert Street North
St. Paul, Minnesota 55101
</TABLE>

     (c)  Not applicable.

ITEM 28.  LOCATION OF ACCOUNTS AND RECORDS

     The physical possession of the accounts, books and other documents required
to be maintained by Section 3(a) of the Investment Company Act of 1940 and Rules
31a-1 to 31a-3 promulgated thereunder is maintained by Minnesota Life, 400
Robert Street North, St. Paul, Minnesota 55101; except that the physical
possession of certain accounts, books and other documents related to the custody
of the Registrant's securities is maintained by the following custodian:


     Wells Fargo Bank Minnesota
     Sixth Street and Marquette Avenue
     Minneapolis, Minnesota  55479

ITEM 29.  MANAGEMENT SERVICES

     Not applicable.

ITEM 30.  UNDERTAKINGS

     (a)  Not applicable.

     (b)  Not applicable.

     (c)  The Registrant hereby undertakes to furnish, upon request and without
charge to each person to whom a prospectus is delivered, a copy of the
Registrant's latest annual report to shareholders containing the information
called for by Item 5A.

<PAGE>

                                     SIGNATURES


    Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940 the Registrant certifies that it meets all of
the requirements for effectiveness of this Registration Statement under Rule
485(b) under the Securities Act of 1933 and has duly caused this
Post-Effective Amendment to its Registration Statement to be signed on its
behalf by the undersigned, thereto duly authorized, in the City of St. Paul
and the State of Minnesota on the 29th day of November, 2000.


                                                ADVANTUS SPECTRUM FUND, INC.
                                                        Registrant


                                                By /s/ William N. Westhoff
                                                  -----------------------------
                                                  William N. Westhoff, President


     Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to the Registration Statement has been signed below
by the following persons in the capacities and on the date indicated.


/s/ William N. Westhoff
---------------------------------  President (principal     November 29, 2000
  William N. Westhoff              executive officer)
                                   and Director

/s/ Frederick P. Feuerherm
---------------------------------  Director and Treasurer   November 29, 2000
  Frederick P. Feuerherm           (principal financial
                                   and accounting officer)


Ralph D. Ebbott*                   Director  )
---------------------------------            )
  Ralph D. Ebbott                            )    By /s/ William N. Westhoff
                                             )      ---------------------------
                                                       William N. Westhoff
                                                       Attorney-in-Fact
Charles E. Arner*                  Director  )
---------------------------------            )
 Charles E. Arner                            )    Dated:   November 29, 2000
                                             )

Ellen S. Berscheid*                Director  )
---------------------------------            )
  Ellen S. Berscheid

-------------------





*Registrant's director executing power of attorney dated October 22, 1998, a
copy of which is filed herewith.

<PAGE>

                            ADVANTUS SPECTRUM FUND, INC.
                                   EXHIBIT INDEX

Exhibit Number and Description:

(a)       Restated Articles of Incorporation for the Registrant. (1)

(b)       Revised Bylaws of the Registrant. (1)

(b)(1)    Amendment of Bylaws.(4)

(c)       Not applicable.




(d)       Investment Advisory Agreement between Advantus Capital Management,
          Inc. and the Registrant, effective May 1, 2000.(4)

(e)(1)    Underwriting and Distribution Agreement between the Registrant and
          Ascend Financial Services, Inc. (2)

(e)(2)    Dealer Sales Agreement between Ascend Financial Services, Inc.,
          principal underwriter for the Registrant, and dealers. (3)

(f)       Not applicable.

(g)       Custodian Agreement between the Registrant and Norwest Bank Minnesota,
          N.A. (3)

(h)       Shareholder and Administrative Services Agreement between the
          Registrant and Minnesota Life Insurance Company.

(i)       Opinion and Consent of Dorsey & Whitney LLP.

(j)       Consent of KPMG LLP.

(k)       Not applicable.

(l)       Letter of Investment Intent regarding the Registrant's initial
          capital. (1)

(m)(1)    Plan of Distribution for Class A shares of the Registrant. (2)

(m)(2)    Plan of Distribution for Class B shares of the Registrant. (1)

(m)(3)    Plan of Distribution for Class C shares of the Registrant. (1)

(n)       Multiple Class Plan pursuant to Rule 18f-3. (2)


(p)       Code of Ethics. (3)


(q)       Power of Attorney to sign Registration Statement executed by Directors
          of Registrant.

--------------------------

(1)       Incorporated by reference to the Registrant's Registration Statement
on Form N-1A filed January 26, 1996.

(2)       Incorporated by reference to the Registrant's Registration Statement
on Form N-1A filed December 3, 1998.

(3)       Incorporated by reference to the Registrant's Registration Statement
on Form N-1A filed January 13, 2000.

(4)        Incorporated by reference to the Registrant's Registration
Statement on Form N-1A filed March 1, 2000.



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