FIRST AMERICAN INVESTMENT FUNDS, INC.
EQUITY FUNDS
1999 ANNUAL REPORT
[LOGO] FIRST AMERICAN FUNDS(R)
THE POWER OF DISCIPLINED INVESTING(R)
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FIRST AMERICAN FAMILY OF FUNDS INVESTMENTS FOR EVERY GOAL
- ------------------------
HIGHER RISK/RETURN FIRST AMERICAN FUNDS OFFER A FULL RANGE
POTENTIAL OF INVESTMENT STRATEGIES TO HELP YOU
- ------------------------ CREATE A PERSONALIZED, DIVERSIFIED
PORTFOLIO. SUPPORTED BY EXTENSIVE
SECTOR FUNDS RESEARCH AND A HIGHLY DEVELOPED TEAM
Health Sciences APPROACH TO INVESTMENT DECISION MAKING,
Real Estate Securities FIRST AMERICAN FUNDS CAN HELP BUILD A
Technology WINNING STRATEGY FOR ANY INVESTOR.
INTERNATIONAL FUNDS
Emerging Markets
International
International Index
SMALL CAP FUNDS
Micro Cap Value
Regional Equity
Small Cap Growth
Small Cap Value
TABLE OF
MID CAP FUNDS CONTENTS
Mid Cap Growth
Mid Cap Value ---------------------------------------------
MESSAGE TO SHAREHOLDERS 1
LARGE CAP FUNDS ---------------------------------------------
Balanced WHAT A DIFFERENCE A YEAR MAKES 2
Equity Income ---------------------------------------------
Equity Index EQUITY FUNDS OVERVIEW 4
Large Cap Growth ---------------------------------------------
Large Cap Value REPORT OF INDEPENDENT AUDITORS 6
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STRATEGY FUNDS LARGE CAP FUNDS 7
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BOND FUNDS Statements of Net Assets 12
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TAX FREE BOND FUNDS Statements of Operations 26
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MONEY MARKET FUNDS Statements of Changes in Net Assets 28
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- ------------------------ Financial Highlights 30
LOWER RISK/RETURN ---------------------------------------------
POTENTIAL MID CAP FUNDS 35
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Statements of Net Assets 37
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Statements of Operations 40
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Statements of Changes in Net Assets 41
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Financial Highlights 42
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SMALL CAP FUNDS 44
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Statements of Net Assets 48
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Statements of Operations 57
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Statements of Changes in Net Assets 58
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Financial Highlights 60
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INTERNATIONAL FUNDS 64
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Statements of Net Assets 68
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Statements of Operations 82
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Statements of Changes in Net Assets 83
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Financial Highlights 84
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SECTOR FUNDS 86
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Statements of Net Assets 89
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Statement of Assets and Liabilities 93
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Statements of Operations 94
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Statements of Changes in Net Assets 95
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Financial Highlights 96
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NOTES TO FINANCIAL STATEMENTS 98
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NOTICE TO SHAREHOLDERS 116
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NOT FDIC INSURED NO BANK GUARANTEE MAY LOSE VALUE
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MESSAGE TO SHAREHOLDERS SEPTEMBER 30, 1999
DEAR SHAREHOLDERS:
On behalf of the entire board of directors -- thank you for the ongoing
opportunity you have given us to manage your investments. Each year we are
proud to continue supporting our long-term investors and we are always
pleased to see the new investors that have joined the First American family
of funds.
A QUICK LOOK AT THE YEAR.
The past year was another volatile time for investors. A solid economy,
strong corporate profits plus a recovery in Asian markets combined to send
the stock market upward, with the Dow Jones Industrial Average hitting a
new high. It was reassuring to see market success beyond the large-cap
growth stocks that dominated the market in 1998, with a resurgence of
small- and mid-cap stocks, as well as international and emerging market
stocks. Still, equity investors experienced dramatic ups and downs
throughout the year due to rapidly changing economic conditions.
WHAT DOES IT MEAN FOR INVESTORS?
Market volatility is always unnerving -- but mostly to short-term
investors. As an equity investor, your focus is on the long term, with an
emphasis on diversification. The key message is stick with it -- a message
worth repeating in shifting financial markets.
Now more than ever, a consistent long-term approach should help ride out
the ups and downs of short-term volatility. Indeed, the best way to manage
volatility is to stay invested and keep investing over time. The article on
the following page expands on this idea.
Again, thank you for investing with First American Funds. As we approach
the millennium, we wish you continued success and prosperity.
Sincerely,
/s/ Virginia L. Stringer /s/ Paul A. Dow
VIRGINIA L. STRINGER PAUL A. DOW
Chairperson Chief Investment Officer and President
First American Investment First American Asset Management
Funds, Inc.
1 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
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WHAT A DIFFERENCE A YEAR MAKES
Turn back the clock to September 1998. Newspaper headlines were dominated by the
financial crisis sweeping across Asia, Latin America and Russia. At the height
of the crisis, the Dow Jones Industrial Average (DJIA) shed nearly 20% of its
value. Some predicted that the U.S. economy would slide into a recession,
erasing years of investment gains.
A year later, the DJIA has surged approximately 2,500 points, with some
financial experts alluding to a "New Economy" defined by unprecedented growth.
Yet a host of new challenges could threaten to derail these great expectations.
The Federal Reserve twice raised interest rates to quell the risk of higher
inflation, which turned the bond market bearish and triggered volatility in
equity markets.
All in all, many investors now wonder whether fundamental changes are again
underway in financial markets. Sound familiar?
SEEING THE FOREST FOR THE TREES
- --------------------------------------------------------------------------------
Keep in mind that the same economic fundamentals have been in place in the U.S.
throughout the past year: low unemployment, low inflation and rising
productivity. For the most part, America's Goldilocks economy remains just
right. International markets are also healthy, and Japan is on the rebound.
The point is that when it comes to investing, there's always something to worry
about. Fear of the unknown causes people to lose sight of their long-term goals
as they react to the latest perceived threat. Along the way, some investors
forget a valuable lesson learned through history: on average, stocks have
returned more than 11% annually and continue to provide the best long-term
investment opportunities.
INVESTORS WHO OVERREACTED DURING LAST YEAR'S MARKET CRISIS AND SOLD THEIR
STOCKS OR EQUITY FUNDS MISSED OUT ON THE GREATEST MARKET RALLY IN RECENT
HISTORY.
2 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
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WHAT A DIFFERENCE A YEAR MAKES
ITS BETTER TO ACT THAN REACT
- --------------------------------------------------------------------------------
What's next for the U.S. economy? No one knows for sure. But you can be certain
that today's hot investment may become tomorrow's outcast. Or that interest
rates will rise and fall. That's the natural ebb and flow of financial markets.
With this in mind, it's important to take a long-term perspective backed by a
diversified investment portfolio to weather rapidly changing financial markets.
Asset allocation -- a strategy designed to create diversified portfolios from a
blend of different asset classes -- forms the foundation of any diversification
strategy. That's because different asset classes often move in opposite
directions, with declines in one class offset by increases in another. It's a
tried-and-true approach that may help reduce volatility and generate more
balanced returns.
At the same time, systematic investing can make market volatility beneficial.
While systematic investing does not ensure a profit or avoid a loss, you have
the long-term potential to lower your average cost if you invest regularly
through changing market conditions.
Finally, we would like to reiterate a familiar investment message: it's time in
the market that counts, not market timing. First American adheres to this
philosophy. Across our comprehensive array of stock and bond mutual funds, we
take a long-term perspective to money management while maintaining flexibility
to benefit from short-term fluctuations. In addition, our tradition of
conservative management and innovative products can help build a winning
strategy for any investor.
TAKE TIME TO REVISIT YOUR ASSET ALLOCATION
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From time to time, you may need to refine your asset allocation to reflect your
changing goals or risk tolerance. Should that need arise, please don't hesitate
to contact your investment professional. Your investment professional can offer
a range of First American funds to meet any need, plus the advice to help you
reach your investment goals.
3 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
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EQUITY FUNDS
A year ago September, many investors were lamenting the demise of the bull
market. As you recall, late last summer a half-dozen Asian economies had plunged
into recession, Russia stood on the verge of default, while at home corporate
profit growth fell to single digits. Commodity prices dropped to historic lows,
sending energy stocks into a freefall. The Dow Jones Industrial Average (DJIA)
reflected this economic malaise, dropping below the 8,000 mark. Investors sought
shelter from the storm in domestic large-cap growth funds, with the flight to
quality sending large-cap stock valuations skyward as other asset classes barely
managed to tread water.
Still, with unemployment at a 29-year low, consumer confidence at 30-year highs
and a fundamentally strong domestic economy, the stock market soon shrugged off
these concerns to begin its ascent toward record highs. Today, despite the stock
market's summer swoon, the DJIA has climbed more than 18%. Asia's emerging
countries are on the rebound, Japan's Nikkei Index is up nearly 30%, and
small-cap and international stocks have returned to favor.
The second calendar quarter signaled another turning point within equity
markets, as share prices for smaller companies and cyclically sensitive sectors
outperformed large-cap growth for the first time in several years. For example,
the Standard and Poor's small-cap index was up 11.7% from early April through
June 15. In contrast, over the same period the S&P 500 index remained flat.
4 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
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Investor worries about excessive valuations during a period of rising interest
rates and uncertainty about inflation helped value stocks outperform growth
stocks during the second calendar quarter. During April and May, value stocks
posted a 6.7% gain compared to a -3.1% return for large-cap growth stocks as
measured by the S&P BARRA Value and Growth Indexes. For the third calendar
quarter, the large-cap value sector was down 12%, according to the S&P BARRA
Value Index. Even the powerful large-cap growth stocks that have dominated the
market over the past two years were down 8% from their mid-July peak, judging by
the S&P BARRA Growth Index.
While many investors embraced the broadening market with a sigh of relief, it's
still too early to tell whether the small-cap rally will continue. In fact, the
prospect of another rate hike in the fourth quarter coupled with slower economic
growth may become catalysts for a market correction. Regardless, recent market
moves provide vindication for having balanced portfolios to withstand changing
conditions.
The following graphs compare First American fund performance with unmanaged
indices. Indices do not pay management fees to cover costs of shareholder
services and fund operating costs, or transaction costs to buy and sell
securities. Unlike indices, mutual funds are never 100% invested because they
need cash on hand to redeem shares. In addition, the performance shown for the
funds includes all fund expenses and fees. If operating expenses such as the
funds had been applied to the indices, their performance would have been lower.
Please remember that an index is simply a measure of performance and one cannot
invest in it directly.
Total return measures performance, assuming that all dividends and capital gains
distributions were reinvested. Total return both with and without a sales
charge, has been presented. All total returns are quoted for Class A shares
before sales charges. The adjusted figures for Class A shares include the effect
of paying the maximum initial sales charge of 5.25% on all equity funds. The
adjusted figures for Class B shares assume redemption at the end of each period,
with payment of any applicable CDSC. The adjusted figures for Class C shares
include the effect of paying the maximum initial sales charge of 1.00% on
Balanced, Equity Income, Equity Index, Large Cap Growth, Large Cap Value, Mid
Cap Growth, Mid Cap Value, Small Cap Growth, Small Cap Value and International
funds.
5 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
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REPORT OF INDEPENDENT
AUDITORS SEPTEMBER 30, 1999
To the Shareholders and Board of Directors
First American Investment Funds, Inc.
We have audited the accompanying statements of net assets of the Balanced,
Equity Income, Equity Index, Large Cap Growth, Large Cap Value, Mid Cap
Growth, Mid Cap Value, Micro Cap Value, Regional Equity, Small Cap Growth,
Small Cap Value, Emerging Markets, International, International Index,
Health Sciences, Real Estate Securities and Technology Funds (certain funds
constituting First American Investment Funds, Inc.) (the "Funds") as of
September 30, 1999, and the related statements of operations, statements of
changes in net assets and financial highlights for the year then ended. We
have also audited the accompanying statement of assets and liabilities of
the Technology Fund as of September 30, 1999. These financial statements
and financial highlights are the responsibility of the Funds' management.
Our responsibility is to express an opinion on these financial statements
and financial highlights based on our audits. The statements of changes in
net assets for the year ended September 30, 1998, and the financial
highlights for the periods presented through September 30, 1998, were
audited by other auditors whose reports dated November 13, 1998, and
September 12, 1997, expressed unqualified opinions on those statements and
financial highlights.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements and financial highlights. Our procedures
included confirmation of securities owned as of September 30, 1999, by
correspondence with the custodian and brokers. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of each of the above listed funds of First American Investment Funds, Inc.
at September 30, 1999, and the results of their operations, changes in
their net assets, and their financial highlights for the year then ended,
in conformity with generally accepted accounting principles.
/s/ Ernst & Young LLP
Minneapolis, Minnesota
November 2, 1999
6 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
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LARGE CAP FUNDS
BALANCED
INVESTMENT OBJECTIVE
TO MAXIMIZE TOTAL RETURN BY INVESTING IN A COMBINATION
OF EQUITY AND FIXED INCOME SECURITIES
With its diversified holdings currently comprised of 55% equities and 45% bonds
- -- the Balanced Fund seeks to capitalize on stock appreciation while producing
predictable income through bonds. During the fiscal year ended September 30,
1999, that strategy helped the fund generate a modest 10.75% return.
While the bond component of the portfolio typically acts as a stabilizer against
more volatile equity investments, rising interest rates sent bond prices
falling, which impacted the performance of the fund's bond holdings. Yet, the
emphasis on high-quality bonds helped to minimize negative returns.
In contrast, the fund's stock portfolio performed well thanks to an improving
energy sector and several significant technology holdings. Within the energy
sector, Elf Aquitaine was purchased by TotalFina, with the fund benefiting from
the premium associated with TotalFina's takeover bid. Technology stocks,
including Motorola, IBM and Seagate Technologies, were examples of large
portfolio holdings that appreciated in value throughout the year.
Kimberly-Clark, a manufacturer of household products, was another strong
performer.
Going forward, we believe that the fund's stock holdings show the potential for
additional appreciation based on strong earnings growth from the portfolio's
larger equity positions. Concerns about inflation may affect the bond holdings,
but with a slowing economy, we feel that inflation will not pose a significant
threat.
VALUE OF A $10,000 INVESTMENT
[PLOT POINTS CHART]
<TABLE>
<CAPTION>
FIRST
FIRST AMERICAN FIRST LEHMAN 60 S&P/40
AMERICAN BALANCED AMERICAN S&P 500 GOVERNMENT/ LEHMAN HYBRID LIPPER
BALANCED FUND, CLASS A BALANCED COMPOSITE CORPORATE OF THE ABOVE BALANCED
FUND, CLASS A ADJUSTED FUND, CLASS Y INDEX BOND INDEX BENCHMARKS FUNDS AVERAGE
------------- -------- ------------- ----- ---------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
12/1992 $10,000 $ 9,475 $10,000 $10,000 $10,000 $10,000 $10,000
9/1993 10,978 10,402 10,978 10,755 11,138 10,909 10,940
9/1994 11,311 10,717 11,318 11,152 10,677 10,967 10,938
9/1995 13,637 12,921 13,683 14,464 12,209 13,534 13,056
9/1996 15,766 14,938 15,857 17,403 12,760 15,408 14,700
9/1997 19,834 18,792 20,007 24,439 13,983 19,637 18,303
9/1998 19,976 18,928 20,213 26,653 15,779 21,828 18,929
9/1999 22,124 20,962 22,450 34,062 15,523 25,192 21,306
</TABLE>
PAST PERFORMANCE OF THE FUND IS NOT INDICATIVE OF FUTURE PERFORMANCE.
ANNUALIZED PERFORMANCE SINCE
1 YEAR 3 YEAR 5 YEAR INCEPTION
- --------------------------------------------------------------------------------
Class A 10.75% 11.96% 14.36% 12.48%
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Class A adjusted 4.96% 9.96% 13.14% 11.60%
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Class B 9.94% 11.15% 13.51% 13.03%
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Class B adjusted 5.13% 10.06% 13.27% 12.91%
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Class C - - - -0.21%+
- --------------------------------------------------------------------------------
Class C adjusted - - - -2.20%+
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Class Y* 11.07% 12.29% 14.68% 12.73%
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S&P 500 27.80% 25.09% 25.02% 19.91%
- --------------------------------------------------------------------------------
Lehman Gov't/Corp. Bond -1.62% 6.75% 7.77% 6.73%
- --------------------------------------------------------------------------------
60/40 Hybrid 15.41% 17.81% 18.20% 14.67%
- --------------------------------------------------------------------------------
Lipper Balanced 12.56% 13.10% 14.35% 11.95%
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Past performance of the fund is not indicative of future performance.
The inception date of the Class A shares is 12/14/92, the inception date of the
Class B shares is 8/15/94, the inception date of the Class C shares is 2/1/99,
and the inception date of the Class Y shares is 2/4/94.
The performance reflected in the graph begins on 12/31/92. The performance
reflected in the table for Class A and Class Y shares begins on the inception
date of Class A shares and Class B shares begin on 8/15/94.
*The performance presented links the performance of Class A shares from
inception on 12/14/92 to 2/4/94 with the performance of Class Y shares after its
inception on 2/4/94. The since inception return for Class Y shares from 2/4/94,
is 12.75%.
+Cumulative since inception.
Performance reflects voluntary fee waivers in effect. In absence of such fee
waivers, total returns would be reduced.
7 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
LARGE CAP FUNDS
EQUITY INCOME
INVESTMENT OBJECTIVE
SEEKS LONG-TERM GROWTH OF CAPITAL AND INCOME BY INVESTING PRIMARILY IN
EQUITY SECURITIES THAT ARE EXPECTED TO PAY ABOVE-AVERAGE DIVIDENDS
The Equity Income Fund posted a modest return of 9.74% for the fiscal year ended
September 30, 1999.
Several of the fund's largest holdings performed very strongly during the year.
American Express delivered strong results in the generally weak financial
services sector, delivering stronger than expected revenue and earnings growth,
led by its travel services division. Johnson & Johnson, another large holding,
significantly outpaced its peer companies in the weak healthcare sector. In the
consumer cyclicals sector, Intimate Brands was a standout performer, reflecting
continued strong prospects for its Bath & Body Works and Victoria's Secret
brands. Time Warner also did well, as investors continued their enthusiasm for
cable stocks and the prospects for high-speed internet access delivered through
cable modems.
Energy sector holdings Amoco, Royal Dutch and Mobil contributed significantly to
results as rising oil prices and cost-cutting opportunities through industry
consolidation improved earnings growth prospects for the group. Amoco and Mobil
received an extra boost from attractive merger offers, Amoco from British
Petroleum and Mobil from Exxon.
Because the fund emphasizes stocks with above average dividends, it was
handicapped during the year by the inability to fully participate in the
outstanding performance of fast-growing technology companies, which typically
don't pay meaningful dividends. Nevertheless, the outlook for the fund is
generally positive as we enter the new year with a higher probability of a
stabilizing interest rate environment, which should benefit the fund's
high-quality portfolio.
VALUE OF A $10,000 INVESTMENT
[PLOT POINTS CHART]
<TABLE>
<CAPTION>
FIRST
FIRST AMERICAN FIRST LEHMAN 70 S&P/30
AMERICAN EQUITY INCOME AMERICAN S&P 500 GOVERNMENT/ LEHMAN HYBRID LIPPER
EQUITY INCOME FUND, CLASS A EQUITY INCOME COMPOSITE CORPORATE OF THE ABOVE EQUITY INCOME
FUND, CLASS A ADJUSTED FUND, CLASS Y INDEX BOND INDEX BENCHMARKS FUNDS AVERAGE
------------- -------- ------------- ----- ---------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
12/1992 $10,000 $ 9,475 $10,000 $10,000 $10,000 $10,000 $10,000
9/1993 10,335 9,792 10,335 10,755 11,138 10,872 11,244
9/1994 10,841 10,272 10,830 11,152 10,677 11,015 11,546
9/1995 12,799 12,127 12,805 14,464 12,209 13,765 13,862
9/1996 14,900 14,118 14,956 17,403 12,760 15,890 16,225
9/1997 19,543 18,517 19,659 24,439 13,983 20,756 21,669
9/1998 21,180 20,068 21,399 26,653 15,779 22,979 21,764
9/1999 23,243 22,023 23,560 34,062 15,523 27,214 24,439
</TABLE>
PAST PERFORMANCE OF THE FUND IS NOT INDICATIVE OF FUTURE PERFORMANCE.
ANNUALIZED PERFORMANCE SINCE
1 YEAR 3 YEAR 5 YEAR INCEPTION
- --------------------------------------------------------------------------------
Class A 9.74% 15.98% 16.48% 13.30%
- --------------------------------------------------------------------------------
Class A adjusted 3.98% 13.91% 15.22% 12.41%
- --------------------------------------------------------------------------------
Class B 9.10% 15.21% 15.68% 15.38%
- --------------------------------------------------------------------------------
Class B adjusted 4.10% 14.20% 15.45% 15.27%
- --------------------------------------------------------------------------------
Class C - - - -3.02%+
- --------------------------------------------------------------------------------
Class C adjusted - - - -4.96%+
- --------------------------------------------------------------------------------
Class Y* 10.10% 16.36% 16.82% 13.53%
- --------------------------------------------------------------------------------
S&P 500 27.80% 25.09% 25.02% 19.91%
- --------------------------------------------------------------------------------
Lehman Gov't/Corp. Bond -1.62% 6.75% 7.77% 6.73%
- --------------------------------------------------------------------------------
70/30 Hybrid 18.43% 19.64% 19.83% 15.99%
- --------------------------------------------------------------------------------
Lipper Equity Income Average 12.29% 14.30% 15.81% 13.91%
- --------------------------------------------------------------------------------
Past performance of the fund is not indicative of future performance.
The inception date of Class A shares is 12/18/92, the inception date of Class B
shares is 8/15/94, the inception date of Class C shares is 2/1/99, and the
inception date of Class Y shares is 8/2/94. The performance reflected in the
graph begins on 12/31/92.
The performance reflected in the table for Class A and Class Y shares begins on
the inception date of Class A shares.
The performance reflected in the table for Class B shares and Class C shares
begins on the respective inception dates.
First American Asset Management became the investment advisor of the Equity
Income Fund on 3/25/94. This was approved by shareholder vote on 4/28/94. Prior
to the change, Boulevard Bank was the investment advisor of the fund.
*The performance for Class Y shares links the performance of Class A shares from
inception on 12/18/92 to 8/2/94 with the performance of Class Y shares from
8/2/94, is 16.34%.
+Cumulative since inception.
Performance reflects voluntary fee waivers in effect. In absence of such fee
waivers, total returns would be reduced.
8 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
LARGE CAP FUNDS
EQUITY INDEX
INVESTMENT OBJECTIVE
SEEKS TO PROVIDE INVESTMENT RESULTS THAT CORRESPOND
WITH THE PERFORMANCE OF THE STANDARD & POOR'S 500 INDEX
It was a volatile, yet rewarding year for stocks within the Standard & Poor's
500 Index, with the Equity Index Fund earning a 27.30% return through the fiscal
year ended September 30, 1999.
The fund mirrors the S&P's 500 index and therefore performs closely in line with
that common measure of large-cap stocks. The fund owns all 500 stocks within the
index, and generally matches its weighting of each stock. And like the S&P 500
Index, the fund experienced a traumatic fourth calendar quarter of 1998, only to
trend upward throughout the remainder of the fiscal year.
The year ahead is likely to once again favor equities, although concerns over
Y2K and rising interest rates could cloud this positive outlook. Still, we
believe that in the foreseeable future, popular indices such as the S&P's 500
Index are poised to advance toward still-higher levels led by increased
productivity and higher earnings growth.
VALUE OF A $10,000 INVESTMENT
[PLOT POINTS CHART]
<TABLE>
<CAPTION>
FIRST
FIRST AMERICAN FIRST
AMERICAN EQUITY INDEX AMERICAN S&P 500 LIPPER
EQUITY INDEX FUND, CLASS A EQUITY INDEX COMPOSITE S&P 500
FUND, CLASS A ADJUSTED FUND, CLASS Y INDEX FUNDS AVERAGE
------------- -------- ------------- ----- -------------
<S> <C> <C> <C> <C> <C>
12/1992 $10,000 $ 9,475 $10,000 $10,000 $10,000
9/1993 10,751 10,186 10,751 10,755 10,711
9/1994 11,100 10,517 11,102 11,152 11,055
9/1995 14,308 13,557 14,341 14,464 14,269
9/1996 17,134 16,234 17,206 17,403 17,091
9/1997 23,897 22,642 24,063 24,439 23,871
9/1998 25,928 24,567 26,185 26,653 25,895
9/1999 33,006 31,273 33,415 34,062 32,900
</TABLE>
PAST PERFORMANCE OF THE FUND IS NOT INDICATIVE OF FUTURE PERFORMANCE.
ANNUALIZED PERFORMANCE SINCE
1 YEAR 3 YEAR 5 YEAR INCEPTION
- --------------------------------------------------------------------------------
Class A 27.30% 24.43% 24.35% 19.29%
- --------------------------------------------------------------------------------
Class A adjusted 20.63% 22.21% 23.02% 18.35%
- --------------------------------------------------------------------------------
Class B 26.38% 23.51% 23.43% 22.90%
- --------------------------------------------------------------------------------
Class B adjusted 21.38% 22.62% 23.26% 22.81%
- --------------------------------------------------------------------------------
Class C - - - 0.76%+
- --------------------------------------------------------------------------------
Class C adjusted - - - -1.26%+
- --------------------------------------------------------------------------------
Class Y* 27.61% 24.76% 24.65% 19.50%
- --------------------------------------------------------------------------------
S&P 500 27.80% 25.09% 25.02% 19.91%
- --------------------------------------------------------------------------------
Lipper S&P 500 27.05% 24.49% 24.47% 19.43%
- --------------------------------------------------------------------------------
Past performance of the fund is not indicative of future performance.
The inception date of the Class A shares is 12/14/92, the inception date of the
Class B shares is 8/15/94, the inception date of the Class C shares is 2/1/99,
and the inception date of the Class Y shares is 2/4/94.
The performance reflected in the graph begins on 12/31/92. The performance
reflected in the table for Class A and Class Y shares begin on the inception
date of Class A shares and Class B shares begin on 8/15/94.
*The performance presented links the performance of Class A shares from
inception on 12/14/92 to 2/4/94 with the performance of Class Y shares after its
inception on 2/4/94. The since inception return for Class Y shares from 2/4/94,
is 21.55%.
+Cumulative since inception.
Performance reflects voluntary fee waivers in effect. In absence of such fee
waivers, total returns would be reduced.
9 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
LARGE CAP FUNDS
LARGE CAP GROWTH
INVESTMENT OBJECTIVE
SEEKS LONG-TERM CAPITAL GROWTH WITH A SECONDARY OBJECTIVE OF CURRENT INCOME
BY INVESTING IN STOCKS WITH MARKET CAPITALIZATIONS OF $5 BILLION OR MORE
THAT ARE BELIEVED TO PROVIDE OUTSTANDING POTENTIAL FOR SUPERIOR GROWTH.*
The fiscal year ended September 30, 1999, was excellent for the Large Cap Growth
Fund, which closed the fiscal year with a 36.00% return, surpassing the Standard
& Poor's 500 Index and other relevant growth fund benchmarks.
The fund suffered a brief setback early in the second calendar quarter as
investors began to take interest in a broader group of stocks, including
small-caps and value stocks where prices were cheap compared to the high
valuations of large-company growth stocks. Yet rising interest rates and
uncertainty about the economy sent investors back to the large-cap growth stocks
during the third quarter.
Although the fund's holdings represent all economic sectors included in the S&P
500 Index, technology stocks represent the fund's largest holdings -- and the
greatest source of the fund's gains during the fiscal year. Technology companies
such as Cisco Systems, Nokia, Nextel Communications and Sungard Data Systems --
all key portfolio holdings -- experienced strong growth as corporations spent
billions of dollars to build systems designed to facilitate data movement.
The fund's health care and finance holdings were hit hard by rising interest
rates, which eroded stock valuations. At current price levels, both sectors are
attracting bargain-seeking investors, which would help improve stock prices.
The fund's technology holdings are well positioned to benefit from an ongoing
demand for wireless equipment and service providers. And with an improving
outlook for quality consumer cyclicals, the fund has added Walmart, Home Depot
and Gap to its holdings.
VALUE OF A $10,000 INVESTMENT
[PLOT POINTS CHART]
<TABLE>
<CAPTION>
FIRST
FIRST AMERICAN FIRST
AMERICAN LARGE CAP AMERICAN S&P LIPPER
LARGE CAP GROWTH LARGE CAP S&P 500 500/BARRA LARGE-CAP
GROWTH FUND, CLASS A GROWTH COMPOSITE GROWTH GROWTH FUNDS
FUND, CLASS A ADJUSTED FUND, CLASS Y INDEX INDEX AVERAGE
------------- -------- ------------- ----- ----- -------
<S> <C> <C> <C> <C> <C> <C>
12/1992 $10,000 $ 9,475 $10,000 $10,000 $10,000 $10,000
9/1993 9,158 8,677 9,158 10,755 9,742 10,619
9/1994 9,504 9,005 9,472 11,152 10,414 10,719
9/1995 12,470 11,816 12,462 14,464 13,714 13,853
9/1996 14,638 13,869 14,653 17,403 16,739 16,228
9/1997 19,423 18,403 19,452 24,439 23,682 21,782
9/1998 19,541 18,515 19,660 26,653 27,985 23,477
9/1999 26,576 25,181 26,809 34,062 37,329 32,365
</TABLE>
PAST PERFORMANCE OF THE FUND IS NOT INDICATIVE OF FUTURE PERFORMANCE.
ANNUALIZED PERFORMANCE SINCE
1 YEAR 3 YEAR 5 YEAR INCEPTION
- --------------------------------------------------------------------------------
Class A 36.00% 22.00% 22.83% 15.10%
- --------------------------------------------------------------------------------
Class A adjusted 28.86% 19.81% 21.52% 14.19%
- --------------------------------------------------------------------------------
Class B 34.99% 21.09% 21.91% 21.95%
- --------------------------------------------------------------------------------
Class B adjusted 29.99% 20.18% 21.73% 21.87%
- --------------------------------------------------------------------------------
Class C - - - 6.04%**
- --------------------------------------------------------------------------------
Class C adjusted - - - 3.97%**
- --------------------------------------------------------------------------------
Class Y+ 36.36% 22.31% 23.13% 15.24%
- --------------------------------------------------------------------------------
S&P 500 27.80% 25.09% 25.02% 19.91%
- --------------------------------------------------------------------------------
S&P 500 BARRA Growth 33.39% 30.65% 29.09% 21.55%
- --------------------------------------------------------------------------------
Lipper Large-Cap Growth 37.86% 25.04% 24.02% 18.90%
- --------------------------------------------------------------------------------
Past performance of the fund is not indicative of future performance.
The inception date of the Class A shares is 12/18/92, the inception date of the
Class B shares is 8/15/94, the inception date of the Class C shares is 2/1/99,
and the inception date of Class Y shares is 8/2/94.
The performance reflected in the graph begins on 12/31/92. The performance
reflected in the table for Class A and Class Y shares begin on the inception
date of Class A shares. The performance reflected in the table for Class B
shares and Class C shares begins on their respective inception dates.
First American Asset Management became the investment advisor of the Large Cap
Growth Fund on 3/25/94. This was approved by shareholder vote on 4/28/94. Prior
to the change, Boulevard Bank was the investment advisor of the fund.
* Effective February 1, 2000, the fund will no longer have a secondary objective
of current income. Based on a refinement of the investment strategy and changing
market conditions, the fund will invest primarily in companies that reinvest
their earnings to take advantage of long-term growth opportunities.
**Cumulative since inception.
+ The performance for Class Y shares links the performance of Class A shares
from inception on 12/18/92 to 8/2/94 with the performance of Class Y shares
after its inception on 8/2/94. The since inception return for Class Y shares
from 8/2/94, is 22.87%.
Performance reflects voluntary fee waivers in effect. In absence of such fee
waivers, total returns would be reduced.
10 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
LARGE CAP FUNDS
LARGE CAP VALUE
INVESTMENT OBJECTIVE
SEEKS CAPITAL APPRECIATION WITH A SECONDARY OBJECTIVE OF CURRENT INCOME
BY INVESTING IN A BROADLY DIVERSIFIED EQUITY PORTFOLIO OF STOCKS WITH
MARKET CAPITALIZATIONS OF $5 BILLION OR MORE BELIEVED TO BE UNDERVALUED
After several years of underperformance, value investing rebounded during the
fiscal year ended September 30, 1999, with the Large Cap Value Fund posting a
21.93% return.
The turnaround for value stocks took place during April and May, with value
stocks outperforming growth stocks 6.7% compared to -3.1% as measured by the
relevant indexes.
A global recovery of troubled overseas markets led to improving demand for U.S.
goods throughout the world. Countries in the midst of the recovery are spending
money to develop their infrastructures, which has been good news for industrial
value stocks. By increasing its holdings of industrial stocks early in the year,
the fund participated in the upswing.
In addition, a strong recovery among energy stocks during the second quarter
lifted share prices of Exxon and Texaco to help boost the fund's performance.
More importantly, French oil company Elf Aquitaine -- one of the portfolio's top
holdings -- recently agreed to be sold to TotalFina in a deal that represents a
26% premium for Elf shares. In the consumer staples sector, Kimberly Clark,
another of the fund's largest holdings, was a standout thanks to strong growth
plus an attractive valuation that should help to maintain the stock's
performance.
A global recovery coupled with strong U.S. economic growth has led to improved
fundamentals for value stocks. The outlook remains cautiously optimistic, as
improved valuations among value stocks could signal a sustained change in market
leadership.
VALUE OF A $10,000 INVESTMENT
[PLOT POINTS CHART]
<TABLE>
<CAPTION>
FIRST
FIRST AMERICAN FIRST
AMERICAN LARGE CAP AMERICAN S&P LIPPER
LARGE CAP VALUE LARGE CAP S&P 500 500/BARRA LARGE-CAP
VALUE FUND, CLASS A VALUE COMPOSITE VALUE VALUE FUNDS
FUND, CLASS A ADJUSTED FUND, CLASS Y INDEX INDEX AVERAGE
------------- -------- ------------- ----- ----- -------
<S> <C> <C> <C> <C> <C> <C>
9/1989 $10,000 $ 9,475 $10,000 $10,000 $10,000 $10,000
9/1990 9,255 8,769 9,255 9,077 8,641 8,865
9/1991 11,629 11,019 11,629 11,900 10,971 11,667
9/1992 12,545 11,887 12,545 13,220 12,152 12,814
9/1993 14,530 13,768 14,530 14,930 14,887 14,809
9/1994 15,745 14,919 15,745 15,481 14,969 15,237
9/1995 19,722 18,687 19,760 20,079 19,116 19,033
9/1996 24,435 23,153 24,565 24,159 22,681 22,560
9/1997 33,921 32,142 34,177 33,927 31,574 30,659
9/1998 30,946 29,323 31,282 37,001 31,514 31,453
9/1999 37,733 35,753 38,252 47,287 38,280 37,957
</TABLE>
PAST PERFORMANCE OF THE FUND IS NOT INDICATIVE OF FUTURE PERFORMANCE.
ANNUALIZED PERFORMANCE SINCE
1 YEAR 3 YEAR 5 YEAR 10 YEAR INCEPTION
- --------------------------------------------------------------------------------
Class A 21.93% 15.58% 19.10% 14.20% 14.64%
- --------------------------------------------------------------------------------
Class A adjusted 15.53% 13.53% 17.83% 13.59% 14.12%
- --------------------------------------------------------------------------------
Class B 21.07% 14.75% 18.23% - 17.63%
- --------------------------------------------------------------------------------
Class B adjusted 16.07% 13.73% 18.02% - 17.53%
- --------------------------------------------------------------------------------
Class C - - - - 1.65%+
- --------------------------------------------------------------------------------
Class C adjusted - - - - -0.37%+
- --------------------------------------------------------------------------------
Class Y* 22.28% 15.91% 19.43% 14.36% 14.77%
- --------------------------------------------------------------------------------
S&P 500 27.80% 25.09% 25.02% 16.81% 16.80%
- --------------------------------------------------------------------------------
S&P 500 BARRA Value 21.47% 19.06% 20.66% 14.37% 14.36%
- --------------------------------------------------------------------------------
Lipper Large-Cap Value 20.68% 18.66% 20.38% 14.03% 15.47%
- --------------------------------------------------------------------------------
Past performance of the fund is not indicative of future performance.
The inception date of the Class A shares is 12/22/87, the inception date of the
Class B shares is 8/15/94, the inception date of the Class C shares is 2/1/99,
and the inception date of the Class Y shares is 2/4/94.
The 10-year performance reflected in the graph begins on 9/30/88. The
performance reflected in the table for Class A and Class Y shares begins on the
inception date of Class A shares and Class B begins on 8/15/94.
*The performance presented links the performance of Class A shares from
inception on 12/22/87 to 2/4/94 with the performance of Class Y shares after its
inception on 2/4/94. The since inception return for Class Y shares from 2/4/94,
is 17.35%.
+Cumulative since inception.
Performance reflects voluntary fee waivers in effect. In absence of such fee
waivers, total returns would be reduced.
11 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
STATEMENTS OF
NET ASSETS SEPTEMBER 30, 1999
BALANCED FUND
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
COMMON STOCKS -- 51.1%
BASIC MATERIALS -- 4.9%
Alcoa 117,000 $ 7,261
Bemis 26,900 911
E.I. du Pont de Nemours 58,000 3,531
International Paper 90,600 4,354
Praxair 161,100 7,411
----------
23,468
----------
CAPITAL GOODS -- 2.2%
Allied Signal 84,900 5,089
Minnesota Mining & Manufacturing 55,200 5,303
----------
10,392
----------
COMMUNICATION SERVICES -- 4.5%
Ameritech 85,900 5,771
AT&T 84,300 3,667
Bell Atlantic 116,400 7,835
Deutsche Telekom, ADR 102,900 4,303
----------
21,576
----------
CONSUMER CYCLICALS -- 3.3%
Federated Department Stores* 138,300 6,042
Mattel 204,800 3,891
May Department Stores 169,750 6,185
----------
16,118
----------
CONSUMER STAPLES -- 5.1%
ConAgra 183,300 4,136
General Mills 91,300 7,407
Kimberly Clark 158,300 8,311
Sara Lee 203,200 4,763
----------
24,617
----------
ENERGY -- 3.5%
Exxon 77,200 5,862
Royal Dutch Petroleum, ADR 97,200 5,741
Texaco 80,900 5,107
----------
16,710
----------
FINANCIALS -- 14.4%
Allstate 223,200 5,566
AMBAC 87,100 4,126
American Express 37,900 5,102
Associates First Capital 174,800 6,293
BankBoston 130,100 5,643
Chase Manhattan 104,200 7,854
Cigna 80,100 6,228
Fannnie Mae 87,100 5,460
Firstar 217,300 5,568
Household International 130,800 5,248
Mellon Bank 191,700 6,470
Wells Fargo 152,000 6,023
----------
69,581
----------
BALANCED FUND (CONTINUED)
DESCRIPTION SHARES/PAR (000) VALUE (000)
- ---------------------------------------------------------------------------
HEALTH CARE -- 4.2%
American Home Products 150,600 $ 6,250
Baxter International 110,300 6,646
Pharmacia & Upjohn 146,500 7,270
----------
20,166
----------
TECHNOLOGY -- 7.8%
Electronic Data Systems 132,800 7,030
First Data 166,300 7,296
IBM 61,100 7,416
Intel 80,000 5,945
Motorola 65,600 5,773
Raytheon, Cl A 69,455 3,369
Raytheon, Cl B 16,400 814
----------
37,643
----------
UTILITIES -- 1.2%
Duke Power 106,000 5,843
----------
TOTAL COMMON STOCKS
(Cost $210,836) 246,114
----------
CORPORATE OBLIGATIONS -- 16.3%
CONSUMER GOODS -- 1.0%
Dayton Hudson
5.875%, 11/01/08 $ 5,000 4,631
----------
ENERGY -- 0.6%
Consolidated Natural Gas
7.250%, 10/01/04 3,000 2,996
----------
FINANCE -- 8.3%
Associates
5.800%, 04/20/04 8,000 7,650
Bear Stearns
6.150%, 03/02/04 6,500 6,256
Chase Manhattan
5.750%, 04/15/04 5,000 4,775
Cigna
7.400%, 01/15/03 2,825 2,826
Cit Group Holdings
6.200%, 10/20/00 8,250 8,230
Lehman Brothers
6.900%, 03/30/01 4,050 4,050
7.360%, 12/15/03 650 651
Morgan Stanley
8.100%, 06/24/02 500 517
Wachovia
6.605%, 10/01/25 5,500 5,383
----------
40,338
----------
12 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
LARGE CAP FUNDS
BALANCED FUND (CONTINUED)
DESCRIPTION PAR (000) VALUE (000)
- ---------------------------------------------------------------------------
MANUFACTURING -- 3.9%
Boeing
7.250%, 06/15/25 $ 5,000 $ 4,840
8.750%, 09/15/31 2,000 2,257
Ford Motor
7.450%, 07/16/31 4,000 3,935
GMAC
6.150%, 04/05/07 5,000 4,738
PPG Industries
7.400%, 08/15/19 3,000 2,968
----------
18,738
----------
SERVICES -- 1.4%
Hertz
6.250%, 03/15/09 5,000 4,616
Time Warner
8.875%, 10/01/12 2,000 2,215
----------
6,831
----------
UTILITIES -- 1.1%
GTE South
6.125%, 06/15/07 5,000 4,731
MCI Communications
7.125%, 06/15/27 500 504
----------
5,235
----------
TOTAL CORPORATE OBLIGATIONS
(Cost $81,164) 78,769
----------
U.S. GOVERNMENT AGENCY MORTGAGE-
BACKED OBLIGATIONS -- 10.9%
FHLMC
6.500%, 01/01/01 199 198
5.000%, 02/15/01 12,000 11,855
5.950%, 01/19/06 5,000 4,829
6.000%, 11/15/08 2,700 2,602
6.500%, 09/01/12 357 351
8.000%, 11/01/24 322 330
6.500%, 09/01/25 297 285
FNMA
6.000%, 03/01/03 190 185
5.500%, 03/01/06 10,968 10,454
6.480%, 04/01/18 (A) 248 252
5.500%, 10/25/22 5,000 4,407
6.500%, 04/01/29 5,250 5,034
GNMA
7.500%, 09/15/27 428 429
6.000%, 02/15/29 4,933 4,576
7.000%, 04/15/29 6,872 6,743
----------
TOTAL U.S. GOVERNMENT AGENCY MORTGAGE-
BACKED OBLIGATIONS
(Cost $54,161) 52,530
----------
BALANCED FUND (CONTINUED)
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS -- 10.0%
U.S. Treasury Bonds
7.125%, 02/15/23 $12,000 $ 13,023
6.875%, 08/15/25 15,185 16,120
U.S. Treasury Notes
5.625%, 11/30/00 5,000 5,005
6.250%, 10/31/01 3,000 3,034
6.875%, 05/15/06 10,500 10,964
----------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $50,022) 48,146
----------
PRIVATE MORTGAGE-BACKED SECURITIES -- 1.6%
FIXED RATE -- 1.6%
CMC Securities 1993-D D2
6.400%, 07/25/23 26 27
Drexel Burnham Lambert Trust S 2
9.000%, 08/01/18 150 157
General Electric Capital Mortgage 1994-17 A6
7.000%, 05/25/24 2,675 2,638
GMAC Commercial Mortgage 1997-C2 C
6.910%, 12/15/07 5,000 4,744
----------
TOTAL PRIVATE MORTGAGE-BACKED SECURITIES
(Cost $7,769) 7,566
----------
ASSET-BACKED SECURITIES -- 7.6%
AUTOS -- 2.0%
Union Acceptance 1998-B A5
6.020%, 01/09/06 10,000 9,872
----------
CREDIT CARDS -- 1.8%
Circuit City Credit Card Master
Trust 1995-1 A
6.375%, 08/15/05 8,600 8,624
----------
HOME EQUITY -- 3.8%
Asset Securitization 1996-D6 A1B
6.880%, 11/13/26 5,670 5,663
Merrill Lynch Mortgage Investors
1995-C3 A3 (A)
7.050%, 12/26/25 12,600 12,592
----------
18,255
----------
TOTAL ASSET-BACKED SECURITIES
(Cost $37,343) 36,751
----------
U.S. GOVERNMENT AGENCY
BACKED OBLIGATIONS -- 0.0%
Israel Government Trust Certificate
Series 1C (B)
9.250%, 11/15/01 164 166
----------
TOTAL U.S. GOVERNMENT AGENCY
BACKED OBLIGATIONS
(Cost $164) 166
----------
13 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
STATEMENTS OF
NET ASSETS SEPTEMBER 30, 1999
BALANCED FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
RELATED PARTY MONEY MARKET FUND -- 2.3%
First American Prime Obligations
Fund (C) 11,024,953 $ 11,025
----------
TOTAL RELATED PARTY MONEY MARKET FUND
(Cost $11,025) 11,025
----------
WARRANTS -- 0.0%
U.S. Surgical* 4 --
----------
TOTAL WARRANTS
(Cost $0) --
----------
TOTAL INVESTMENTS -- 99.8%
(Cost $452,484) 481,067
----------
OTHER ASSETS AND LIABILITIES, NET -- 0.2% (D) 926
----------
NET ASSETS:
Portfolio Capital--Class A
($.0001 par value--2 billion authorized)
based on 5,181,573 outstanding shares $ 60,405
Portfolio Capital--Class B
($.0001 par value--2 billion authorized)
based on 4,525,630 outstanding shares 63,275
Portfolio Capital--Class C
($.0001 par value--2 billion authorized)
based on 103,245 outstanding shares 1,439
Portfolio Capital--Class Y
($.0001 par value--2 billion authorized)
based on 25,949,826 outstanding shares 287,881
Undistributed net investment income 295
Accumulated net realized gain on investments 40,115
Net unrealized appreciation of investments 28,583
----------
TOTAL NET ASSETS -- 100.0% $ 481,993
----------
Net asset value and redemption
price per share--Class A $ 13.46
Maximum sales charge of 5.25% (E) 0.75
----------
Offering price per share--Class A $ 14.21
----------
Net asset value and offering price
per share--Class B (F) $ 13.40
----------
Net asset value price per share--Class C (G) $ 13.45
Maximum sales charge of 1.00% (H) 0.14
----------
Offering price per share--Class C $ 13.59
----------
Net asset value, offering price, and redemption
price per share--Class Y $ 13.50
----------
BALANCED FUND (CONCLUDED)
DESCRIPTION
- ---------------------------------------------------------------------------
* Non-income producing security
(A) Variable Rate Security--the rate reported on the Statement of Net Assets is
the rate in effect as of September 30, 1999.
(B) Security is guaranteed by the United States of America.
(C) This money market fund is advised by U.S. Bank National Association who also
serves as advisor for this fund. See also the notes to the financial
statements.
(D) Other assets and liabilities representing greater than 5 percent of total
net assets include the following (000):
Cash collateral received for securities on loan $ 127,024
Payable upon return of securities on loan $(127,024)
(E) The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 5.25%.
(F) Class B has a contingent deferred sales charge. For a description of a
possible redemption charge, see the notes to the financial statements.
(G) Class C has a contingent deferred sales charge. For a description of a
possible redemption charge, see the notes to the financial statements.
(H) The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 1.00%.
ADR--American Depository Receipt
AMBAC--American Municipal Bond Assurance Corporation
Cl--Class
FHLMC--Federal Home Loan Mortgage Corporation
FNMA--Federal National Mortgage Association
GMAC--General Motors Acceptance Corporation
GNMA--Government National Mortgage Association
The accompanying notes are an integral part of the financial statements.
14 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
LARGE CAP FUNDS
EQUITY INCOME FUND
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
COMMON STOCKS -- 85.6%
BASIC MATERIALS -- 3.6%
E.I. du Pont de Nemours 98,600 $ 6,002
Ecolab 229,900 7,845
----------
13,847
----------
CAPITAL GOODS -- 6.1%
Allied Signal 92,200 5,526
Emerson Electric 75,000 4,739
General Electric 68,000 8,062
Minnesota Mining & Manufacturing 53,000 5,091
----------
23,418
----------
COMMUNICATION SERVICES -- 10.3%
Ameritech 132,000 8,869
AT&T 222,000 9,657
Deutsche Telekom, ADR 183,000 7,652
Sprint 100,000 5,425
Vodafone, ADR 32,406 7,705
----------
39,308
----------
CONSUMER CYCLICALS -- 5.6%
Ford Motor 170,000 8,532
Intimate Brands 216,300 8,422
Masco 139,000 4,309
----------
21,263
----------
CONSUMER STAPLES -- 8.9%
Colgate-Palmolive 100,000 4,575
ConAgra 222,000 5,009
Kimberly Clark 121,000 6,352
Newell Rubbermaid 130,000 3,713
PepsiCo 101,000 3,055
Philip Morris 122,000 4,171
Procter & Gamble 39,600 3,712
Sara Lee 155,400 3,642
----------
34,229
----------
ENERGY -- 12.0%
BP Amoco, ADR 90,648 10,045
Chevron 100,000 8,875
Exxon 98,000 7,442
Mobil 86,600 8,725
Royal Dutch Petroleum, ADR 183,000 10,808
----------
45,895
----------
FINANCIALS -- 14.9%
American Express 88,300 11,887
Associates First Capital 143,608 5,170
Bank of America 77,424 4,312
Bank of New York 200,000 6,688
First Union 111,224 3,955
Fannie Mae 45,000 2,821
Household International 110,397 4,430
IPC Holdings 131,300 2,462
Mellon Bank 256,000 8,640
EQUITY INCOME FUND (CONTINUED)
DESCRIPTION SHARES/PAR (000) VALUE (000)
- ---------------------------------------------------------------------------
Suntrust Banks 60,000 $ 3,945
XL Capital, Cl A 56,182 2,528
----------
56,838
----------
HEALTH CARE -- 10.2%
American Home Products 147,000 6,101
Baxter International 63,000 3,796
Johnson & Johnson 75,800 6,964
Merck 42,400 2,748
Pfizer 142,200 5,110
Pharmacia & Upjohn 88,000 4,367
Schering Plough 148,000 6,457
SmithKline Beecham, ADR 58,000 3,342
----------
38,885
----------
REAL ESTATE INVESTMENT TRUST -- 4.7%
Crescent Real Estate Equities 137,600 2,477
Duke Realty Investments 199,272 3,886
Healthcare Realty Trust 178,400 3,334
Manufactured Home Communities 176,100 4,116
Simon Property Group 184,000 4,129
----------
17,942
----------
TECHNOLOGY -- 3.2%
Automatic Data Processing 132,600 5,917
Intel 46,600 3,463
Motorola 33,100 2,913
----------
12,293
----------
TRANSPORTATION -- 1.0%
Knightsbridge Tankers Limited 233,900 3,742
----------
UTILITIES -- 5.1%
Cinergy 141,300 4,001
Enron 113,400 4,678
FPL Group 64,300 3,239
New Century Energies 171,200 5,725
Reliant Energy 71,200 1,927
----------
19,570
----------
TOTAL COMMON STOCKS
(Cost $204,149) 327,230
----------
CONVERTIBLE BONDS -- 5.0%
Centocor, 20.300 shares
4.750%, 02/15/05 $ 3,710 4,890
Elan Finance, 6.875 shares
3.736%, 12/14/18 (A) (B) 10,050 5,754
Medical Care International,
14.5815 shares (A)
6.750%, 10/01/06 6,800 5,644
Tribune (PHONES)
2.00% 05/15/29 23,700 2,829
----------
TOTAL CONVERTIBLE BONDS
(Cost $17,666) 19,117
----------
15 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
STATEMENTS OF
NET ASSETS SEPTEMBER 30, 1999
EQUITY INCOME FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
PREFERRED CONVERTIBLE STOCKS -- 5.0%
Adelphia Communications 10,000 $ 1,760
Consolidated Freight Transportation 67,800 3,644
Houston Industries 70,000 7,140
Tribune 74,000 1,730
Union Pacific Capital Trust (A) 110,000 4,991
----------
TOTAL PREFERRED CONVERTIBLE STOCKS
(Cost $16,875) 19,265
----------
RELATED PARTY MONEY MARKET FUND -- 3.2%
First American Prime Obligations Fund (C) 12,285,344 12,285
----------
TOTAL RELATED PARTY MONEY MARKET FUND
(Cost $12,285) 12,285
----------
TOTAL INVESTMENTS -- 98.8%
(Cost $250,975) 377,897
----------
OTHER ASSETS AND LIABILITIES, NET -- 1.2% (D) 4,519
----------
NET ASSETS:
Portfolio Capital--Class A
($.0001 par value--2 billion authorized)
based on 1,190,170 outstanding shares $ 18,087
Portfolio Capital--Class B
($.0001 par value--2 billion authorized)
based on 690,146 outstanding shares 9,483
Portfolio Capital--Class C
($.0001 par value--2 billion authorized)
based on 106,705 outstanding shares 1,822
Portfolio Capital--Class Y
($.0001 par value--2 billion authorized)
based on 21,921,261 outstanding shares 200,101
Undistributed net investment income 198
Accumulated net realized gain on investments 25,803
Net unrealized appreciation of investments 126,922
----------
TOTAL NET ASSETS-- 100.0% $ 382,416
----------
Net asset value and redemption price
per share--Class A $ 15.94
Maximum sales charge of 5.25% (E) 0.88
----------
Offering price per share--Class A $ 16.82
----------
Net asset value and offering price
per share--Class B (F) $ 15.90
----------
Net asset value price per share--Class C (G) $ 15.93
Maximum sales charge of 1.00% (H) 0.16
----------
Offering price per share--Class-C $ 16.09
----------
Net asset value, offering price, and redemption
price per share--Class Y $ 16.00
----------
EQUITY INCOME FUND (CONCLUDED)
DESCRIPTION
- ---------------------------------------------------------------------------
(A) Security sold within the terms of a private placement memorandum, exempt
from registration under section 144A of the Securities Act of 1933, as
amended, and may be sold only to dealers in that program or other "qualified
institutional investors." These securities have been determined to be liquid
under guidelines established by the Board of Directors.
(B) The rate shown is the effective yield at date of purchase.
(C) This money market fund is advised by U.S. Bank National Association who also
serves as Advisor for this fund. See also the notes to the financial
statements.
(D) Other assets and liabilities representing greater than 5% of total net
assets include the following (000):
Cash collateral received for securities on loan $ 64,513
Payable upon return of securities on loan $(64,513)
(E) The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 5.25%.
(F) Class B has a contingent deferred sales charge. For a description of a
possible redemption charge, see the notes to the financial statements.
(G) Class C has a contingent deferred sales charge. For a description of a
possible redemption charge, see the notes to the financial statements.
(H) The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 1.00%.
ADR--American Depository Receipt
Cl--Class
PHONES--Participation Hybrid Option Note Exchangeable Securities Equity Linked
Debt Security Exchangeable At Holders Option For 95% of 1 America Online
Share.
PLC--Public Liability Company
The accompanying notes are an integral part of the financial statements.
16 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
LARGE CAP FUNDS
EQUITY INDEX FUND
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
COMMON STOCKS -- 99.6%
BASIC MATERIALS -- 3.2%
Air Products & Chemicals 31,000 $ 901
Alcan Aluminum 30,500 953
Alcoa 49,500 3,072
Allegheny Teledyne 25,700 434
Archer Daniels Midland 83,400 1,016
Asarco 5,400 145
Barrick Gold 52,700 1,146
Bemis 7,100 241
Bethlehem Steel* 17,700 131
Boise Cascade 7,700 281
Champion International 13,000 668
Cyprus AMAX Minerals 12,200 239
Dow Chemical 29,700 3,375
E.I. du Pont de Nemours 131,600 8,011
Eastman Chemical 10,600 424
Ecolab 17,500 597
Engelhard 17,000 309
FMC* 4,300 207
Freeport-McMoran Copper & Gold, Cl B 22,100 344
Georgia Pacific 23,200 940
Great Lakes Chemical 7,900 301
Hercules 14,300 409
Homestake Mining 35,200 323
Inco 25,900 554
International Flavors & Fragrances 14,300 493
International Paper 55,900 2,687
Louisiana Pacific 14,500 227
Mead 13,800 474
Monsanto 85,600 3,055
Nalco Chemical 8,900 449
Newmont Mining 22,600 585
Nucor 11,800 562
Phelps Dodge 7,800 429
Pioneer Hi-Bred International 32,500 1,294
Placer Dome Group 44,000 655
Potlatch 3,900 161
PPG Industries 23,500 1,410
Praxair 21,500 989
Reynolds Metals 8,500 513
Rohm & Haas 29,399 1,062
Sigma Aldrich 13,600 432
Temple Inland 7,500 454
Union Carbide 18,000 1,023
USX-U.S. Steel Group 11,900 306
Vulcan Materials 13,500 494
W.R. Grace* 9,600 154
Westvaco 13,500 346
Weyerhaeuser 27,200 1,567
Willamette Industries 15,100 651
Worthington Industries 12,400 211
----------
45,704
----------
CAPITAL GOODS -- 8.8%
Allied Signal 74,300 4,453
Allied Waste Industries* 25,500 298
Avery Dennison 15,300 807
B.F. Goodrich 14,800 429
Ball 4,100 180
Boeing 129,800 5,533
Briggs & Stratton 3,100 181
Case Equipment 10,500 523
EQUITY INDEX FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
Caterpillar 48,000 $ 2,631
Cooper Industries 12,800 598
Corning 33,100 2,269
Crane 9,100 204
Crown Cork & Seal 16,500 400
Cummins Engine 5,700 284
Danaher 19,200 1,011
Deere 31,600 1,223
Dover 28,200 1,153
Eaton 9,800 846
Emerson Electric 58,700 3,709
Fluor 10,200 411
Foster Wheeler 5,500 66
General Dynamics 26,900 1,680
General Electric 443,200 52,547
Honeywell 17,200 1,915
ITT Industries 11,900 379
Illinois Tool Works 33,900 2,528
Ingersoll Rand 22,300 1,225
Johnson Controls 11,500 763
Lockheed Martin 53,400 1,746
McDermott International 8,000 162
Milacron 5,000 89
Millipore 6,100 229
Minnesota Mining & Manufacturing 54,400 5,226
Nacco Industries, Cl A 1,100 77
National Service Industries 5,500 173
Navistar International* 8,900 414
Northrop 9,400 597
Owens-Illinois* 21,100 418
Paccar 10,600 539
Pall 16,800 389
Parker Hannifin 14,700 659
Pitney Bowes 36,100 2,200
Rockwell International 25,800 1,355
Sealed Air* 11,300 580
Solectron* 36,500 2,621
Tenneco 23,000 391
Textron 20,300 1,571
Thermo Electron* 21,300 286
Thomas & Betts 7,700 393
Timken 8,400 135
Tyco International 113,000 11,667
United Technologies 65,100 3,861
Waste Management 83,700 1,611
----------
125,635
----------
COMMUNICATION SERVICES -- 8.3%
Alltel 41,200 2,899
Ameritech 148,500 9,977
AT&T 431,700 18,779
Bell Atlantic 209,800 14,122
BellSouth 254,700 11,462
Centurytel 18,800 764
Global Crossing* 47,970 1,271
GTE 132,500 10,186
MCI WorldCom* 253,100 18,192
Nextel Communications, Cl A* 44,800 3,038
SBC Communications 265,800 13,572
Sprint 117,200 6,358
Sprint (PCS Group)* 59,400 4,429
US West 68,200 3,892
----------
118,941
----------
17 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
STATEMENTS OF
NET ASSETS SEPTEMBER 30, 1999
EQUITY INDEX FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
CONSUMER CYCLICALS -- 8.9%
American Greetings, Cl A 9,100 $ 234
Armstrong World Industries 5,400 242
Autozone* 20,100 564
Best Buy* 27,500 1,707
Black & Decker 11,800 539
Brunswick 12,400 308
Carnival 82,900 3,606
Cendant* 97,300 1,727
Centex 8,100 239
Circuit City Stores 27,100 1,143
Consolidated Stores* 14,900 329
Cooper, Tire & Rubber 10,200 180
Costco Wholesale* 29,800 2,146
Dana 22,400 832
Dayton Hudson 59,700 3,586
Delphi Automotive Systems 76,300 1,226
Dillards, Cl A 14,400 293
Dollar General 30,400 939
Dow Jones 12,300 657
Dun & Bradstreet 21,800 651
Federated Department Stores* 28,200 1,232
Fleetwood Enterprises 4,500 91
Ford Motor 163,400 8,201
Fort James 29,900 798
Fortune Brands 22,500 726
Fruit of the Loom, Cl A* 9,700 32
Gannett 37,800 2,615
Gap 115,800 3,706
General Motors 87,000 5,476
Genuine Parts 24,200 643
Goodyear Tire & Rubber 21,100 1,015
H & R Block 13,200 573
Harcourt General 9,600 400
Harrah's Entertainment* 17,300 480
Hasbro 26,300 564
Hilton Hotels 34,400 340
Home Depot 200,400 13,752
Ims Health 42,300 965
Interpublic Group 38,100 1,567
J.C. Penney 35,600 1,224
Jostens 4,600 88
Kaufman & Broad Home 6,500 134
Kmart* 66,700 780
Knight-Ridder 10,900 598
Kohls* 22,000 1,455
Laidlaw 44,600 301
Limited 28,900 1,105
Liz Claiborne 8,300 257
Lowe's 51,500 2,511
Marriott International, Cl A 33,600 1,098
Masco 59,800 1,854
Mattel 56,800 1,079
May Department Stores 45,100 1,643
Maytag 11,800 393
McGraw-Hill 26,600 1,287
Meredith 7,000 254
Mirage Resorts* 26,900 378
New York Times, Cl A 23,500 881
Nike, Cl B 38,000 2,161
Nordstrom 19,000 513
Office Depot* 50,600 515
Omnicom Group 24,000 1,901
EQUITY INDEX FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
Owens Corning 7,400 $ 160
Pep Boys-Manny, Moe & Jack 7,100 106
Pulte 5,800 126
Reebok International* 7,600 81
Russell 4,500 64
Sears Roebuck 51,400 1,613
Service International 36,800 389
Sherwin Williams 22,900 479
Snap-On Tools 8,900 289
Springs Industries, Cl A 2,400 81
Stanley Works 12,000 302
Staples* 62,800 1,370
Tandy 26,100 1,349
Times Mirror, Cl A 9,700 638
TJX 42,900 1,204
Toys R' Us* 33,400 501
Tribune 32,000 1,592
TRW 16,400 816
V.F. 16,100 499
Wal-Mart Stores 601,200 28,595
Whirlpool 10,200 666
----------
127,654
----------
CONSUMER STAPLES -- 11.9%
Adolph Coors, Cl B 5,000 271
Alberto-Culver, Cl B 7,500 173
Albertson's 56,800 2,247
Anheuser Busch 63,200 4,428
Avon Products 35,200 874
Bestfoods 37,700 1,829
Brown Forman, Cl B 9,300 580
Campbell Soup 58,700 2,297
Cardinal Health 36,800 2,006
CBS* 95,200 4,403
Clear Channel Communications* 45,600 3,642
Clorox 31,900 1,220
Coca-Cola 333,600 16,034
Coca-Cola Enterprises 57,400 1,295
Colgate-Palmolive 78,800 3,605
Comcast, Cl A 101,300 4,039
ConAgra 66,000 1,489
CVS 52,900 2,159
Darden Restaurants 17,800 348
Deluxe 10,200 347
General Mills 20,600 1,671
Gillette 146,600 4,975
Great Atlantic & Pacific Tea 5,200 158
H.J. Heinz 48,400 2,081
Hershey Foods 18,800 915
Kellogg 54,700 2,048
Kimberly Clark 72,000 3,780
King World Productions* 9,600 360
Kroger* 112,100 2,473
Longs Drug Stores 5,300 158
McDonald's 183,000 7,869
McKesson HBOC 38,000 1,102
MediaOne Group* 81,900 5,595
Nabisco Group Holdings 44,100 662
Newell Rubbermaid 38,100 1,088
PepsiCo 197,600 5,977
Philip Morris 322,900 11,039
Procter & Gamble 179,500 16,828
Quaker Oats 18,100 1,120
18 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
LARGE CAP FUNDS
EQUITY INDEX FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
R.R. Donnelley & Sons 17,200 $ 497
Ralston-Ralston Purina Group 43,700 1,215
Rite Aid 35,000 483
Safeway* 68,900 2,623
Sara Lee 122,100 2,862
Seagram 58,400 2,657
SUPERVALU 18,800 410
Sysco 44,700 1,567
Time Warner 174,700 10,613
Tricon Global Restaurants* 20,700 847
Tupperware 7,800 158
Unilever, ADR 77,199 5,259
UST 23,500 709
Viacom, Cl B* 94,100 3,976
Walgreen 135,600 3,441
Walt Disney 278,600 7,209
Wendy's International 16,400 433
William Wrigley Jr. 15,700 1,080
Winn Dixie Stores 20,100 597
----------
169,821
----------
ENERGY -- 6.3%
Amerada Hess 12,200 747
Anadarko Petroleum 17,200 526
Apache 15,400 665
Ashland Oil 9,800 330
Atlantic Richfield 43,500 3,855
Baker Hughes 44,400 1,288
Burlington Resources 24,000 882
Chevron 88,600 7,863
Conoco 84,700 2,319
Exxon 328,000 24,908
Halliburton 59,600 2,444
Helmerich & Payne 6,700 170
Kerr-McGee 11,700 644
Mobil 105,800 10,659
Occidental Petroleum 47,100 1,089
Phillips Petroleum 34,200 1,667
Rowan* 11,200 182
Royal Dutch Petroleum, ADR 289,700 17,110
Schlumberger 74,000 4,611
Sunoco 12,200 334
Texaco 74,700 4,715
Tosco 20,600 520
Union Pacific Resources Group 34,000 546
Unocal 32,700 1,212
USX-Marathon Group 41,700 1,220
----------
90,506
----------
FINANCIALS -- 14.0%
AFLAC 35,900 1,503
Allstate 107,900 2,691
American Express 60,700 8,172
American General 33,700 2,130
American International Group 209,200 18,187
Amsouth Bancorp 23,800 558
Aon 34,600 1,023
Associates First Capital 98,399 3,542
Bank of America 233,400 12,997
Bank of New York 99,300 3,320
Bank One 158,400 5,514
BankBoston 40,200 1,744
BB&T 43,200 1,399
EQUITY INDEX FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
Bear Stearns 15,700 $ 603
Capital One Financial 26,700 1,041
Charles Schwab 110,500 3,722
Chase Manhattan 112,500 8,480
Chubb 23,800 1,186
Cigna 26,900 2,091
Cincinnati Financial 22,300 837
Citigroup 456,300 20,077
Comerica 21,100 1,068
Conseco 44,200 854
Countrywide Credit Industries 15,300 493
FHLMC 93,900 4,883
Fifth Third Bancorp 36,700 2,233
First Union 129,200 4,595
Firstar 133,000 3,408
Fleet Financial Group 76,900 2,816
Fannie Mae 138,500 8,682
Franklin Resources 34,100 1,049
Golden West Financial 7,400 727
Hartford Financial Services Group 30,500 1,247
Household International 64,700 2,596
Huntington Bancshares 31,100 826
J.P. Morgan 23,700 2,708
Jefferson-Pilot 14,200 897
KeyCorp 60,600 1,564
Lehman Brothers Holdings 16,200 945
Lincoln National 26,900 1,010
Loew's 14,500 1,018
Marsh & McLennan 35,700 2,445
MBIA 13,500 629
MBNA 108,300 2,471
Mellon Bank 69,500 2,346
Merrill Lynch 49,900 3,353
MGIC Investment 14,700 702
Morgan Stanley Dean Witter 77,100 6,876
National City 83,500 2,228
Northern Trust 15,100 1,261
Paine Webber Group 19,700 714
PNC Bank 41,100 2,165
Progressive 9,900 809
Providian Financial 19,200 1,520
Regions Financial 30,200 906
Republic New York 14,200 872
Safeco 17,800 498
SLM Holding 21,700 933
SouthTrust 22,600 811
St. Paul 30,600 842
State Street 21,800 1,409
Summit Bancorp 23,900 775
Suntrust Banks 43,500 2,860
Synovus Financial 36,700 686
Torchmark 18,000 466
U.S. Bancorp 98,800 2,983
Union Planters 19,300 786
UnumProvident 32,300 951
Wachovia 27,300 2,146
Washington Mutual 78,200 2,287
Wells Fargo 222,800 8,828
----------
200,994
----------
HEALTH CARE -- 10.2%
Abbott Laboratories 205,500 7,552
Aetna 19,000 936
19 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
STATEMENTS OF
NET ASSETS SEPTEMBER 30, 1999
EQUITY INDEX FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
Allergan 8,900 $ 979
Alza, Cl A* 13,700 587
American Home Products 176,500 7,325
Amgen* 68,900 5,615
Bausch & Lomb 7,800 514
Baxter International 39,300 2,368
Becton Dickinson 33,800 949
Biomet 15,200 400
Boston Scientific* 55,900 1,380
Bristol-Myers Squibb 268,300 18,110
C.R. Bard 6,900 325
Columbia/HCA Healthcare 76,200 1,614
Eli Lilly 147,600 9,446
Guidant 40,800 2,188
HEALTHSOUTH* 56,100 340
Humana* 22,600 155
Johnson & Johnson 181,600 16,685
Mallinckrodt 9,600 290
Manor Care* 14,500 249
Medtronic 158,600 5,630
Merck 316,900 20,539
Pfizer 523,500 18,813
Pharmacia & Upjohn 68,500 3,399
Schering Plough 198,400 8,655
St. Jude Medical* 11,400 359
Tenet Healthcare* 42,000 738
United Healthcare 23,400 1,139
Warner Lambert 115,500 7,666
Watson Pharmaceuticals* 12,900 394
Wellpoint Health Networks* 8,900 507
----------
145,846
----------
TECHNOLOGY -- 24.4%
ADC Telecommunications* 18,300 767
Adobe Systems 8,200 931
Advanced Micro Devices* 19,900 342
America Online* 149,700 15,569
Andrew* 11,100 193
Apple Computer* 21,700 1,374
Applied Materials* 50,700 3,939
Autodesk 8,000 175
Automatic Data Processing 83,600 3,731
BMC Software* 32,300 2,311
Cabletron Systems* 23,500 369
Ceridian* 19,600 488
Cisco Systems* 439,200 30,113
Compaq Computer 229,700 5,269
Computer Associates International 72,600 4,447
Computer Sciences* 21,600 1,519
Compuware* 48,200 1,256
Data General* 6,900 145
Dell Computer* 343,300 14,354
Eastman Kodak 42,800 3,229
EG&G 6,200 247
Electronic Data Systems 66,600 3,526
EMC* 136,900 9,780
Equifax 19,400 546
First Data 58,000 2,545
Gateway* 42,300 1,880
General Instrument* 23,400 1,126
Harris 10,800 298
Hewlett Packard 136,900 12,595
IBM 244,400 29,664
EQUITY INDEX FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
IKON Office Solutions 20,100 $ 215
Intel 446,900 33,210
KLA Instruments* 11,900 774
Lexmark International, Cl A* 17,400 1,401
LSI Logic* 19,900 1,025
Lucent Technologies 413,900 26,852
Micron Technology* 33,800 2,250
Microsoft* 689,500 62,443
Motorola 82,000 7,216
National Semiconductor* 22,700 692
Network Appliance* 9,900 709
Nortel Networks 179,300 9,144
Novell* 45,300 937
Oracle Systems* 194,500 8,850
PE Corp-PE Biosystems Group 13,800 997
Parametric Technology* 36,400 491
Paychex 33,200 1,133
Peoplesoft* 32,900 557
Polaroid 6,000 156
QUALCOMM* 21,700 4,105
Raytheon, Cl B 45,600 2,263
Scientific-Atlanta 10,300 510
Seagate Technology* 30,100 927
Shared Medical Systems 3,600 168
Silicon Graphics* 25,500 279
Sun Microsystems* 104,600 9,728
Tektronix 6,300 211
Tellabs* 52,900 3,012
Texas Instruments 106,100 8,727
3Com* 48,300 1,389
Unisys* 41,300 1,864
W.W. Grainger 12,600 606
Xerox 89,600 3,758
----------
349,327
----------
TRANSPORTATION -- 0.8%
AMR* 20,300 1,106
Burlington Northern Santa Fe 62,800 1,727
CSX 29,400 1,246
Delta Air Lines 19,000 922
FDX* 40,200 1,558
Kansas City Southern Industries 14,900 692
Norfolk Southern 51,400 1,259
Ryder System 9,400 192
Southwest Airlines 68,100 1,034
U.S. Air Group* 9,700 255
Union Pacific 33,500 1,610
----------
11,601
----------
UTILITIES -- 2.8%
AES* 25,900 1,528
Ameren 18,500 700
American Electric Power 26,100 891
Carolina Power & Light 21,600 764
Central & South West 28,700 606
Cinergy 21,500 609
CMS Energy 15,900 540
Coastal 28,800 1,179
Columbia Gas Systems 11,200 620
Consolidated Edison 29,900 1,241
Consolidated Natural Gas 13,000 811
Constellation Energy Group 20,200 568
Dominion Resources of Virginia 25,900 1,169
20 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
LARGE CAP FUNDS
EQUITY INDEX FUND (CONTINUED)
DESCRIPTION SHARES/PAR (000) VALUE (000)
- ---------------------------------------------------------------------------
DTE Energy 19,600 $ 708
Duke Power 49,300 2,717
Eastern Enterprises 3,600 167
Edison International 46,900 1,140
Enron 96,400 3,976
Entergy 33,300 964
FirstEnergy 31,600 806
Florida Progress 13,300 615
FPL Group 24,200 1,219
GPU 16,900 551
New Century Energies 15,600 522
Niagara Mohawk Holdings* 25,300 391
Nicor 6,400 238
Northern States Power 20,800 449
ONEOK 4,300 130
Pacificorp 40,200 809
PECO Energy 25,200 945
Peoples Energy 4,800 169
PG&E 51,900 1,343
PP&L Resources 21,300 576
Public Service Enterprise Group 29,600 1,143
Reliant Energy 40,000 1,083
Sempra Energy 32,500 676
Sonat 14,900 591
Southern 92,300 2,377
Texas Utilities 37,300 1,392
Unicom 29,400 1,086
Williams 58,700 2,198
-----------
40,207
-----------
TOTAL COMMON STOCKS
(Cost $840,943) 1,426,236
-----------
U.S. TREASURY OBLIGATIONS -- 0.2%
U.S. Treasury Bill (A)
4.570%, 12/16/99 $3,000 2,971
-----------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $2,971) 2,971
-----------
WARRANTS -- 0.0%
U.S. Surgical* 13 --
-----------
TOTAL WARRANTS
(Cost $0) --
-----------
RELATED PARTY MONEY MARKET FUND -- 0.2%
First American Prime Obligations
Fund (B) 3,015,941 3,016
-----------
TOTAL RELATED PARTY MONEY MARKET FUND
(Cost $3,016) 3,016
-----------
TOTAL INVESTMENTS -- 100.0%
(Cost $846,930) 1,432,223
-----------
OTHER ASSETS AND LIABILITIES, NET -- 0.0% (C) 203
-----------
EQUITY INDEX FUND (CONCLUDED)
DESCRIPTION VALUE (000)
- ---------------------------------------------------------------------------
NET ASSETS:
Portfolio Capital--Class A
($.0001 par value--2 billion authorized)
based on 4,328,167 outstanding shares $ 95,201
Portfolio Capital-- Class B
($.0001 par value--2 billion authorized)
based on 3,909,703 outstanding shares 84,655
Portfolio Capital--Class C
($.0001 par value--2 billion authorized)
based on 661,688 outstanding shares 17,411
Portfolio Capital--Class Y
($.0001 par value--2 billion authorized)
based on 47,276,941 outstanding shares 612,548
Undistributed net investment income 320
Accumulated net realized gain on investments 37,125
Net unrealized appreciation of investments and
open futures contracts 585,166
-----------
TOTAL NET ASSETS-- 100.0% $1,432,426
-----------
Net asset value and redemption
price per share--Class A $ 25.52
Maximum sales charge of 5.25% (D) 1.41
-----------
Offering price per share--Class A $ 26.93
-----------
Net asset value and offering price
per share--Class B (E) $ 25.34
-----------
Net asset value price per share--Class C (F) $ 25.48
Maximum sales charge of 1.00% (G) 0.26
-----------
Offering price per share--Class C $ 25.74
-----------
Net asset value, offering price, and redemption
price per share--Class Y $ 25.51
-----------
* Non-income producing security
(A) Security has been deposited as initial margin on open futures contracts.
Yield shown is effective yield at date of purchase.
(B) This money market fund is advised by U.S. Bank National Association who also
serves as advisor for this fund. See also the notes to the financial
statements.
(C) Other assets and liabilities representing greater than 5% of total net
assets include the following (000):
Cash collateral received for securities on loan $ 342,782
Payable upon return of securities on loan $(342,782)
(D) The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 5.25%
(E) Class B has a contingent deferred sales charge. For a description of a
possible redemption charge, see the notes to the financial statements.
(F) Class C has a contingent deferred sales charge. For a description of a
possible redemption charge, see the notes to the financial statements.
(G) The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 1.00%.
ADR--American Depository Receipt
Cl--Class
FHLMC--Federal Home Loan Mortgage Corporation
The accompanying notes are an integral part of the financial statements.
21 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
STATEMENTS OF
NET ASSETS SEPTEMBER 30, 1999
LARGE CAP GROWTH FUND
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
COMMON STOCKS -- 97.6%
BASIC MATERIALS -- 1.7%
Ecolab 514,705 $ 17,564
----------
CAPITAL GOODS -- 4.1%
Allied Signal 247,700 14,847
General Electric 239,040 28,341
----------
43,188
----------
COMMUNICATION SERVICES -- 11.3%
AT&T 198,825 8,649
MCI WorldCom* 417,135 29,982
Nextel Communications, Cl A* 434,000 29,431
Nokia, ADR 413,530 37,140
Vodafone, ADR 52,817 12,557
----------
117,759
----------
CONSUMER CYCLICALS -- 10.5%
Best Buy* 275,900 17,123
Carnival 234,105 10,184
Gap 349,987 11,200
Home Depot 328,165 22,520
Masco 510,318 15,820
Omnicom Group 138,000 10,928
Wal-Mart Stores 464,080 22,073
----------
109,848
----------
CONSUMER STAPLES -- 8.2%
Coca-Cola 172,905 8,310
Cox Communications* 353,450 14,757
MediaOne Group* 249,950 17,075
Procter & Gamble 268,770 25,197
Walgreen 797,880 20,246
----------
85,585
----------
ENERGY -- 3.2%
Exxon 172,467 13,096
Mobil 101,000 10,176
Schlumberger 164,525 10,252
----------
33,524
----------
FINANCIALS -- 10.2%
American Express 164,785 22,184
American International Group 115,737 10,062
Associates First Capital 250,163 9,006
Bank of New York 354,190 11,843
Charles Schwab 311,500 10,494
Fannie Mae 235,185 14,743
Mellon Bank 482,650 16,289
Morgan Stanley Dean Witter 133,850 11,938
----------
106,559
----------
LARGE CAP GROWTH FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
HEALTH CARE -- 14.7%
Amgen* 156,495 $ 12,754
Biogen* 152,310 12,004
Bristol-Myers Squibb 189,110 12,765
Guidant 291,845 15,650
Johnson & Johnson 290,855 26,722
Medtronic 577,470 20,500
Merck 232,490 15,068
Pfizer 784,410 28,190
Schering Plough 217,460 9,487
----------
153,140
----------
TECHNOLOGY -- 29.0%
America Online* 221,980 23,086
Automatic Data Processing 250,000 11,156
BMC Software* 291,815 20,883
Cisco Systems* 547,414 37,532
Compuware* 498,400 12,989
Dell Computer* 239,005 9,993
EMC* 388,480 27,752
IBM 103,650 12,581
Intel 383,190 28,476
Lucent Technologies 510,397 33,112
Microsoft* 462,240 41,862
Oracle Systems* 247,200 11,248
Sun Microsystems* 126,830 11,795
Sungard Data Systems* 267,700 7,044
Tellabs* 223,530 12,727
----------
302,236
----------
TRANSPORTATION -- 0.8%
Southwest Airlines 545,272 8,281
----------
UTILITIES -- 3.9%
AES* 192,225 11,341
Enron 698,130 28,798
----------
40,139
----------
TOTAL COMMON STOCKS
(Cost $639,978) 1,017,823
----------
RELATED PARTY MONEY MARKET FUND -- 1.0%
First American Prime Obligations
Fund (A) 10,567,002 10,567
----------
TOTAL RELATED PARTY MONEY MARKET FUND
(Cost $10,567) 10,567
----------
TOTAL INVESTMENTS -- 98.6%
(Cost $650,545) 1,028,390
----------
OTHER ASSETS AND LIABILITIES, NET -- 1.4% (B) 14,555
----------
22 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
LARGE CAP FUNDS
LARGE CAP GROWTH FUND (CONCLUDED)
DESCRIPTION VALUE (000)
- ---------------------------------------------------------------------------
NET ASSETS:
Portfolio Capital--Class A
($.0001 par value--2 billion authorized)
based on 8,512,468 outstanding shares $ 81,433
Portfolio Capital-- Class B
($.0001 par value--2 billion authorized)
based on 980,798 outstanding shares 14,687
Portfolio Capital--Class C
($.0001 par value--2 billion authorized)
based on 48,934 outstanding shares 969
Portfolio Capital--Class Y
($.0001 par value--2 billion authorized)
based on 43,084,613 outstanding shares 413,082
Accumulated net realized gain on investments 154,929
Net unrealized appreciation of investments 377,845
----------
TOTAL NET ASSETS -- 100.0% $1,042,945
----------
Net asset value and redemption price
per share--Class A $ 19.75
Maximum sales charge of 5.25% (C) 1.09
----------
Offering price per share--Class A $ 20.84
----------
Net asset value and offering price
per share--Class B (D) $ 19.38
----------
Net asset value price per share--Class C (E) $ 19.67
Maximum sales charge of 1.00% (F) 0.20
----------
Offering price per share--Class C $ 19.87
----------
Net asset value, offering price, and redemption
price per share--Class Y $ 19.84
----------
* Non-income producing security
(A) This money market fund is advised by U.S. Bank National Association who also
serves as advisor for this fund. See also the notes to the financial
statements.
(B) Other assets and liabilities representing greater than 5% of total net
assets include the following (000):
Cash collateral received for securities on loan $ 305,560
Payable upon return of securities on loan $(305,560)
(C) The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 5.25%.
(D) Class B has a contingent deferred sales charge. For a description of a
possible redemption charge, see the notes to the financial statements.
(E) Class C has a contingent deferred sales charge. For a description of a
possible redemption charge, see the notes to the financial statements.
(F) The offering price is calcluated by dividing the net asset value by 1 minus
the maximum sales charge of 1.00%.
ADR--American Depository Receipt
Cl--Class
The accompanying notes are an integral part of the financial statements.
LARGE CAP VALUE FUND
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
COMMON STOCKS -- 96.2%
BASIC MATERIALS -- 9.0%
Alcoa 697,900 $ 43,313
Bemis 167,200 5,664
E.I. du Pont de Nemours 355,100 21,617
International Paper 581,800 27,963
Praxair 954,300 43,898
----------
142,455
----------
CAPITAL GOODS -- 4.2%
Allied Signal 532,100 31,893
Minnesota Mining & Manufacturing 355,700 34,169
----------
66,062
----------
COMMUNICATION SERVICES -- 8.4%
Ameritech 531,600 35,717
AT&T 538,250 23,414
Bell Atlantic 720,112 48,473
Deutsche Telekom, ADR 616,000 25,756
----------
133,360
----------
CONSUMER CYCLICALS -- 6.3%
Federated Department Stores* 847,100 37,007
Mattel 1,263,400 24,005
May Department Stores 1,049,500 38,241
----------
99,253
----------
CONSUMER STAPLES -- 9.8%
ConAgra 1,245,400 28,099
General Mills 534,600 43,369
Kimberly Clark 991,900 52,075
Sara Lee 1,358,200 31,833
----------
155,376
----------
ENERGY -- 6.5%
Exxon 474,900 36,062
Royal Dutch Petroleum, ADR 625,200 36,926
Texaco 492,100 31,064
----------
104,052
----------
FINANCIALS -- 27.3%
Allstate 1,398,700 34,880
AMBAC 574,700 27,226
American Express 232,800 31,341
Associates First Capital 1,074,700 38,689
BankBoston 797,300 34,583
Chase Manhattan 645,600 48,662
Cigna 493,000 38,331
Firstar 1,343,800 34,435
Fannie Mae 539,700 33,832
Household International 804,900 32,297
Mellon Bank 1,137,400 38,387
Wells Fargo 1,003,300 39,756
----------
432,419
----------
HEALTH CARE -- 8.0%
American Home Products 922,900 38,300
Baxter International 682,000 41,091
Pharmacia & Upjohn 947,600 47,025
----------
126,416
----------
23 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
STATEMENTS OF
NET ASSETS SEPTEMBER 30, 1999
LARGE CAP VALUE FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
TECHNOLOGY -- 14.5%
Electronic Data Systems 819,500 $ 43,382
First Data 1,037,300 45,512
IBM 364,456 44,236
Intel 477,100 35,454
Motorola 405,700 35,702
Raytheon, Cl A 413,540 20,057
Raytheon, Cl B 100,700 4,997
-----------
229,340
-----------
UTILITIES -- 2.2%
Duke Power 647,200 35,677
-----------
TOTAL COMMON STOCKS
(Cost $1,338,733) 1,524,410
-----------
RELATED PARTY MONEY MARKET FUND -- 4.5%
First American Prime Obligations
Fund (A) 70,731,018 70,731
-----------
TOTAL RELATED PARTY MONEY MARKET FUND
(Cost $70,731) 70,731
-----------
TOTAL INVESTMENTS -- 100.7%
(Cost $1,409,464) 1,595,141
-----------
OTHER ASSETS AND LIABILITIES, NET -- (0.7%)(B) (11,574)
-----------
NET ASSETS:
Portfolio Capital--Class A
($.0001 par value--2 billion authorized)
based on 7,666,242 outstanding shares $ 128,841
Portfolio Capital-- Class B
($.0001 par value--2 billion authorized)
based on 2,698,636 outstanding shares 60,541
Portfolio Capital--Class C
($.0001 par value--2 billion authorized)
based on 60,548 outstanding shares 1,498
Portfolio Capital--Class Y
($.0001 par value--2 billion authorized)
based on 57,972,017 outstanding shares 1,023,861
Accumulated net realized gain on investments 183,149
Net unrealized appreciation of investments 185,677
-----------
TOTAL NET ASSETS-- 100.0% $1,583,567
-----------
LARGE CAP VALUE FUND (CONCLUDED)
DESCRIPTION VALUE
- ---------------------------------------------------------------------------
Net asset value and redemption price
per share--Class A $ 23.12
Maximum sales charge of 5.25% (C) 1.28
-----------
Offering price per share--Class A $ 24.40
-----------
Net asset value and offering price
per share--Class B (D) $ 22.87
-----------
Net asset value price per share--Class C (E) $ 23.09
Maximum sales charge of 1.00% (F) 0.23
-----------
Offering price per share--Class C $ 23.32
-----------
Net asset value, offering price, and redemption
price per share--Class Y $ 23.17
-----------
* Non-income producing security
(A) This money market fund is advised by U.S Bank National Association who also
serves as advisor for this fund. See also the notes to the financial
statements.
(B) Other assets and liabilities representing greater than 5% of total net
assets include the following (000):
Cash collateral received for securities on loan $ 308,375
Payable upon return of securities on loan $(308,375)
(C) The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 5.25%.
(D) Class B has a contingent deferred sales charge. For a description of a
possible redemption charge, see the notes to the financial statements.
(E) Class C has a contingent deferred sales charge. For a description of a
possible redemption charge, see the notes to the financial statements.
(F) The offering price is calcluated by dividing the net asset value by 1 minus
the maximum sales charge of 1.00%.
ADR--American Depository Receipt
AMBAC--American Municipal Bond Assurance Corporation
Cl--Class
The accompanying notes are an integral part of the financial statements.
24 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
LARGE CAP FUNDS
THIS PAGE WAS INTENTIONALLY LEFT BLANK.
25 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
STATEMENTS OF
OPERATIONS FOR THE YEAR ENDED SEPTEMBER 30, 1999
IN THOUSANDS
<TABLE>
<CAPTION>
BALANCED EQUITY INCOME EQUITY INDEX
FUND FUND FUND
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 15,656+ $ 2,401+ $ 2,087+
Dividends 5,201 10,219 18,762
- ------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 20,857 12,620 20,849
======================================================================================================
EXPENSES:
Investment advisory fees 3,912 2,835 10,005
Less: Waiver of investment advisory fees (606) (526) (7,696)
Administrator fees 608 441 1,556
Transfer agent fees 282 90 438
Custodian fees 168 121 429
Directors' fees 9 7 23
Registration fees 23 17 59
Professional fees 19 14 51
Printing 35 25 90
Distribution fees - Class A 194 38 217
Distribution fees - Class B 629 107 766
Distribution fees - Class C 4 5 59
Other 20 14 48
- ------------------------------------------------------------------------------------------------------
TOTAL NET EXPENSES 5,297 3,188 6,045
======================================================================================================
Investment income - net 15,560 9,432 14,804
- ------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAINS
ON INVESTMENTS - NET:
Net realized gain on investments 51,628 26,002 30,503
Net realized gain on futures contracts -- -- 10,534
Net change in unrealized appreciation/depreciation
of investments (1,078) 2,697 256,876
Net change in unrealized appreciation
of futures contracts -- -- 68
- ------------------------------------------------------------------------------------------------------
NET GAIN ON INVESTMENTS 50,550 28,699 297,981
======================================================================================================
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $ 66,110 $ 38,131 $ 312,785
======================================================================================================
</TABLE>
+ Includes income from securities lending program. See the Notes to the
Financial Statements for additional information.
The accompanying notes are an integral part of the financial statements.
26 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
LARGE CAP FUNDS
<TABLE>
<CAPTION>
LARGE CAP LARGE CAP
GROWTH FUND VALUE FUND
- --------------------------
<S> <C>
$ 1,701+ $ 2,904+
8,056 27,910
- --------------------------
9,757 30,814
==========================
6,862 11,515
(861) (1,574)
1,067 1,791
292 630
294 494
16 27
41 68
35 58
62 102
399 471
158 642
2 4
33 55
- --------------------------
8,400 14,283
==========================
1,357 16,531
- --------------------------
156,209 207,906
-- --
129,481 93,721
-- --
- --------------------------
285,690 301,627
==========================
$287,047 $318,158
==========================
</TABLE>
27 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
STATEMENTS OF
CHANGES IN NET ASSETS IN THOUSANDS
<TABLE>
<CAPTION>
BALANCED EQUITY EQUITY
FUND INCOME FUND INDEX FUND
- -----------------------------------------------------------------------------------------------------------------------------------
10/1/98 10/1/97 10/1/98 10/1/97 10/1/98 10/1/97
to to to to to to
9/30/99 9/30/98 9/30/99 9/30/98 9/30/99 9/30/98
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Investment income - net $ 15,560 $ 17,317 $ 9,432 $ 11,169 $ 14,804 $ 13,094
Net realized gain on investments 51,628 64,326 26,002 21,440 30,503 45,838
Net realized gain (loss) on futures contracts -- -- -- -- 10,534 (1,079)
Net change in unrealized appreciation (depreciation)
of investments (1,078) (76,426) 2,697 1,279 256,876 10,202
Net change in unrealized appreciation/depreciation
of futures contracts -- -- -- -- 68 (147)
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations 66,110 5,217 38,131 33,888 312,785 67,908
- -----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment income - net:
Class A (2,106) (1,407) (334) (268) (758) (402)
Class B (1,271) (1,183) (162) (143) (193) (155)
Class C (9) -- (9) -- (16) --
Class Y (12,245) (14,657) (9,143) (10,657) (13,914) (12,321)
Net realized gain on investments:
Class A (8,756) (2,532) (662) (524) (1,099) (1,395)
Class B (6,690) (3,406) (506) (372) (996) (1,890)
Class C -- -- -- -- -- --
Class Y (51,648) (31,658) (20,399) (20,162) (21,802) (39,689)
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS (82,725) (54,843) (31,215) (32,126) (38,778) (55,852)
===================================================================================================================================
CAPITAL SHARE TRANSACTIONS(1):
Class A
Proceeds from sales 14,035 17,972 12,345 18,729 73,519 86,010
Shares issued in connection with acquisition of
Qualivest Fund
(FAIF Asset Allocation for Balanced Fund) -- 2,346 -- -- -- 5,782
Shares issued in connection with acquisition of Piper Fund -- 43,884 -- -- -- --
Reinvestment of distributions 10,398 3,794 748 554 1,766 1,588
Payments for redemptions (30,490) (16,652) (4,820) (15,324) (22,600) (62,121)
- -----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from Class A transactions (6,057) 51,344 8,273 3,959 52,685 31,259
- -----------------------------------------------------------------------------------------------------------------------------------
Class B
Proceeds from sales 7,363 18,038 3,746 2,710 51,649 22,783
Shares issued in connection with acquisition of
Qualivest Fund
(FAIF Asset Allocation for Balanced Fund) -- 5,078 -- -- -- --
Reinvestment of distributions 7,765 4,414 628 492 1,165 1,990
Payments for redemptions (11,704) (7,174) (2,006) (1,228) (8,302) (3,576)
- -----------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from Class B transactions 3,424 20,356 2,368 1,974 44,512 21,197
- -----------------------------------------------------------------------------------------------------------------------------------
Class C
Proceeds from sales 1,431 -- 1,825 -- 18,007 --
Reinvestment of distributions 9 -- 8 -- 15 --
Payment for redemptions (1) -- (11) -- (611) --
- -----------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from Class C transactions 1,439 -- 1,822 -- 17,411 --
- -----------------------------------------------------------------------------------------------------------------------------------
Class Y
Proceeds from sales 96,438 126,347 58,353 47,160 451,693 294,141
Shares issued in connection with the acquisition
of Common Trust Fund Assets -- -- -- -- -- --
Shares issued in connection with the acquisition
of Piper Common Trust Fund Assets -- -- -- -- -- --
Shares issued in connection with acquisition
of Qualivest Fund (FAIF Asset Allocation for Balanced Fund) -- 94,226 -- -- -- 345,903
Shares issued in connection with acquisition of Piper Fund -- -- -- -- -- --
Reinvestment of distributions 60,180 44,419 3,371 3,510 32,110 46,426
Payments for redemptions (249,834) (188,151) (77,863) (63,003) (526,652) (261,290)
- -----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from Class Y transactions (93,216) 76,841 (16,139) (12,333) (42,849) 425,180
- -----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital share
transactions (94,410) 148,541 (3,676) (6,400) 71,759 477,636
- -----------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets (111,025) 98,915 3,240 (4,638) 345,766 489,692
NET ASSETS AT BEGINNING OF PERIOD 593,018 494,103 379,176 383,814 1,086,660 596,968
===================================================================================================================================
NET ASSETS AT END OF PERIOD (2) $481,993 $593,018 $382,416 $379,176 $1,432,426 $1,086,660
===================================================================================================================================
</TABLE>
(1) See note 4 in the notes to the financial statements for additional
information.
(2) Includes undistributed net investment income (000) of $295 and $366 for
Balanced Fund, $198 and $414 for Equity Income Fund, $320 and $397 for
Equity Index Fund, $0 and $806 for Large Cap Growth Fund, $0 and $491 for
Large Cap Value Fund, at September 30, 1999, and September 30, 1998,
respectively.
The accompanying notes are an integral part of the financial statements.
28 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
LARGE CAP FUNDS
<TABLE>
<CAPTION>
LARGE CAP LARGE CAP
GROWTH FUND VALUE FUND
- -------------------------------------------------------------------
10/1/98 10/1/97 10/1/98 10/1/97
to to to to
9/30/99 9/30/98 9/30/99 9/30/98
- -------------------------------------------------------------------
<S> <C> <C> <C>
$ 1,357 $ 6,065 $ 16,531 $ 20,324
156,209 95,953 207,906 214,528
-- -- -- --
129,481 (113,637) 93,721 (372,822)
-- -- -- --
- -------------------------------------------------------------------
287,047 (11,619) 318,158 (137,970)
- -------------------------------------------------------------------
(282) (150) (1,621) (1,171)
-- (16) (186) (318)
-- -- (1) --
(2,625) (5,203) (15,248) (18,581)
(16,050) (1,066) (27,729) (5,825)
(1,316) (757) (9,199) (7,436)
-- -- -- --
(77,627) (53,851) (202,092) (143,987)
- -------------------------------------------------------------------
(97,900) (61,043) (256,076) (177,318)
===================================================================
54,798 44,694 31,078 37,943
-- -- -- 9,139
-- 170,289 -- 122,208
15,252 833 24,964 7,470
(74,400) (66,502) (56,697) (29,938)
- -------------------------------------------------------------------
(4,350) 149,314 (655) 146,822
- -------------------------------------------------------------------
6,268 3,504 5,587 16,274
-- -- -- --
1,295 759 9,240 7,540
(2,449) (1,633) (11,602) (7,250)
- -------------------------------------------------------------------
5,114 2,630 3,225 16,564
- -------------------------------------------------------------------
988 -- 1,504 --
-- -- 1 --
(19) -- (7) --
- -------------------------------------------------------------------
969 -- 1,498 --
- -------------------------------------------------------------------
177,975 176,400 298,298 377,320
-- -- -- 265,740
9,808 -- -- --
-- -- -- 161,636
-- -- -- 14,861
21,807 11,815 121,404 96,891
(189,793) (137,884) (382,918) (482,975)
- -------------------------------------------------------------------
19,797 50,331 36,784 433,473
- -------------------------------------------------------------------
21,530 202,275 40,852 596,859
- -------------------------------------------------------------------
210,677 129,613 102,934 281,571
832,268 702,655 1,480,633 1,199,062
===================================================================
$1,042,945 $ 832,268 $1,583,567 $1,480,633
===================================================================
</TABLE>
29 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
FINANCIAL HIGHLIGHTS FOR A SHARE OUTSTANDING THROUGHOUT THE PERIODS
ENDED SEPTEMBER 30, UNLESS OTHERWISE INDICATED
<TABLE>
<CAPTION>
REALIZED AND
NET ASSET UNREALIZED DIVIDENDS
VALUE NET GAINS OR FROM NET DISTRIBUTIONS
BEGINNING INVESTMENT (LOSSES) ON INVESTMENT FROM
OF PERIOD INCOME INVESTMENTS INCOME CAPITAL GAINS
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
BALANCED FUND
Class A
1999 $ 13.98 $ 0.38 $ 1.07 $ (0.38) $ (1.59)
1998 15.41 0.40 (0.30) (0.41) (1.12)
1997 13.14 0.39 2.85 (0.39) (0.58)
1996 12.12 0.39 1.43 (0.39) (0.41)
1995 10.54 0.38 1.72 (0.37) (0.15)
Class B
1999 $ 13.93 $ 0.28 $ 1.06 $ (0.28) $ (1.59)
1998 15.36 0.30 (0.31) (0.30) (1.12)
1997 13.10 0.29 2.84 (0.29) (0.58)
1996 12.09 0.31 1.42 (0.31) (0.41)
1995 10.53 0.29 1.71 (0.29) (0.15)
Class C
1999(1) $ 13.69 $ 0.23 $ (0.25) $ (0.22) $ --
Class Y
1999 $ 14.01 $ 0.41 $ 1.08 $ (0.41) $ (1.59)
1998 15.43 0.44 (0.30) (0.44) (1.12)
1997 13.15 0.42 2.86 (0.42) (0.58)
1996 12.13 0.42 1.43 (0.42) (0.41)
1995 10.54 0.40 1.73 (0.39) (0.15)
- --------------------------------------------------------------------------------------
EQUITY INCOME FUND
Class A
1999 $ 15.70 $ 0.36 $ 1.15 $ (0.37) $ (0.90)
1998 15.69 0.41 0.86 (0.41) (0.85)
1997 12.65 0.40 3.40 (0.41) (0.35)
1996 11.24 0.39 1.42 (0.39) (0.01)
1995 9.89 0.41 1.33 (0.39) --
Class B
1999 $ 15.65 $ 0.24 $ 1.16 $ (0.25) $ (0.90)
1998 15.62 0.30 0.87 (0.29) (0.85)
1997 12.61 0.29 3.37 (0.30) (0.35)
1996 11.20 0.31 1.42 (0.31) (0.01)
1995 9.88 0.33 1.32 (0.33) --
Class C
1999(1) $ 16.62 $ 0.21 $ (0.70) $ (0.20) $ --
Class Y
1999 $ 15.74 $ 0.40 $ 1.17 $ (0.41) $ (0.90)
1998 15.70 0.46 0.88 (0.45) (0.85)
1997 12.66 0.43 3.40 (0.44) (0.35)
1996 11.24 0.42 1.43 (0.42) (0.01)
1995 9.89 0.41 1.35 (0.41) --
- --------------------------------------------------------------------------------------
EQUITY INDEX FUND
Class A
1999 $ 20.61 $ 0.21 $ 5.36 $ (0.22) $ (0.44)
1998 20.76 0.24 1.39 (0.24) (1.54)
1997 15.49 0.12 5.70 (0.12) (0.43)
1996 13.35 0.27 2.32 (0.27) (0.18)
1995 10.68 0.25 2.76 (0.25) (0.09)
Class B
1999 $ 20.49 $ 0.05 $ 5.30 $ (0.06) $ (0.44)
1998 20.67 0.09 1.36 (0.09) (1.54)
1997 15.43 0.12 5.67 (0.12) (0.43)
1996 13.30 0.17 2.31 (0.17) (0.18)
1995 10.66 0.23 2.68 (0.18) (0.09)
Class C
1999(1) $ 25.35 $ 0.06 $ 0.13 $ (0.06) $ --
Class Y
1999 $ 20.60 $ 0.28 $ 5.35 $ (0.28) $ (0.44)
1998 20.74 0.29 1.40 (0.29) (1.54)
1997 15.47 0.29 5.70 (0.29) (0.43)
1996 13.34 0.31 2.31 (0.31) (0.18)
1995 10.67 0.28 2.75 (0.27) (0.09)
- --------------------------------------------------------------------------------------
</TABLE>
+ Returns are for the period indicated and have not been annualized.
(A) Excluding sales charges.
(1) Class C shares have been offered since February 1, 1999. All ratios for the
period have been annualized.
30 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
LARGE CAP FUNDS
<TABLE>
<CAPTION>
RATIO OF
RATIO OF NET EXPENSES TO
NET ASSET RATIO OF INVESTMENT AVERAGE
VALUE NET ASSETS EXPENSES TO INCOME TO NET ASSETS PORTFOLIO
END OF TOTAL END OF AVERAGE AVERAGE (EXCLUDING TURNOVER
PERIOD RETURN (A) PERIOD (000) NET ASSETS NET ASSETS WAIVERS) RATE
- ------------------------------ ---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 13.46 10.75% $ 69,753 1.05% 2.69% 1.16% 77%
13.98 0.72 78,269 1.05 2.82 1.15 103
15.41 25.80 32,309 1.05 2.74 1.13 84
13.14 15.61 20,927 1.05 3.05 1.14 73
12.12 20.57 15,288 0.99 3.41 1.19 77
$ 13.40 9.94% $ 60,623 1.80% 1.94% 1.91% 77%
13.93 (0.02) 59,323 1.80 2.02 1.90 103
15.36 24.93 43,707 1.80 1.99 1.88 84
13.10 14.78 15,542 1.80 2.32 1.89 73
12.09 19.58 3,120 1.79 2.60 1.94 77
$ 13.45 (0.21)%+ $ 1,388 1.81% 2.05% 1.91% 77%
$ 13.50 11.07% $ 350,229 0.80% 2.93% 0.91% 77%
14.01 1.03 455,426 0.80 3.01 0.90 103
15.43 26.17 418,087 0.80 2.99 0.88 84
13.15 15.89 332,786 0.80 3.31 0.89 73
12.13 20.89 192,145 0.79 3.61 0.94 77
- ----------------------------------------------------------------------------------------------------------
$ 15.94 9.74% $ 18,970 1.00% 2.01% 1.13% 35%
15.70 8.38 11,018 1.00 2.58 1.12 14
15.69 31.16 7,276 1.00 2.96 1.17 39
12.65 16.41 2,581 1.00 3.25 1.20 23
11.24 18.06 1,995 0.92 3.91 1.31 23
$ 15.90 9.10% $ 10,971 1.75% 1.34% 1.88% 35%
15.65 7.77 8,570 1.75 1.81 1.87 14
15.62 30.06 6,619 1.75 2.19 1.92 39
12.61 15.66 3,770 1.75 2.49 1.95 23
11.20 17.10 1,233 1.75 3.05 2.06 23
$ 15.93 (3.02)%+ $ 1,700 1.76% 0.65% 1.88% 35%
$ 16.00 10.10% $ 350,775 0.75% 2.38% 0.88% 35%
15.74 8.85 359,588 0.75 2.81 0.87 14
15.70 31.45 369,919 0.75 3.12 0.92 39
12.66 16.79 64,590 0.75 3.50 0.95 23
11.24 18.24 52,126 0.75 4.11 1.06 23
- ----------------------------------------------------------------------------------------------------------
$ 25.52 27.30% $ 110,439 0.60% 0.85% 1.14% 7%
20.61 8.50 46,010 0.60 1.11 1.13 14
20.76 39.47 15,977 0.60 1.36 1.13 8
15.49 19.75 6,221 0.60 1.87 1.15 10
13.35 28.90 2,140 0.57 2.16 1.20 9
$ 25.34 26.38% $ 99,054 1.35% 0.10% 1.89% 7%
20.49 7.66 44,122 1.35 0.37 1.88 14
20.67 38.45 23,733 1.35 0.61 1.88 8
15.43 18.95 8,252 1.35 1.11 1.90 10
13.30 27.87 1,197 1.35 1.34 1.95 9
$ 25.48 0.76%+ $ 16,861 1.35% 0.07% 1.89% 7%
$ 25.51 27.61% $1,206,072 0.35% 1.11% 0.89% 7%
20.60 8.82 996,528 0.35 1.36 0.88 14
20.74 39.85 557,258 0.35 1.62 0.88 8
15.47 19.98 348,539 0.35 2.14 0.90 10
13.34 29.17 218,932 0.35 2.41 0.95 9
- ----------------------------------------------------------------------------------------------------------
</TABLE>
31 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
FINANCIAL HIGHLIGHTS FOR A SHARE OUTSTANDING THROUGHOUT THE PERIODS
ENDED SEPTEMBER 30, UNLESS OTHERWISE INDICATED
<TABLE>
<CAPTION>
REALIZED AND
NET ASSET UNREALIZED DIVIDENDS
VALUE NET GAINS OR FROM NET DISTRIBUTIONS
BEGINNING INVESTMENT (LOSSES) ON INVESTMENT FROM
OF PERIOD INCOME INVESTMENTS INCOME CAPITAL GAINS
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
LARGE CAP GROWTH FUND
Class A
1999 $ 16.25 $ 0.02 $ 5.39 $ (0.03) $ (1.88)
1998 17.63 0.09 (0.02) (0.09) (1.36)
1997 13.63 0.09 4.28 (0.10) (0.27)
1996 11.75 0.15 1.88 (0.15) --
1995 9.09 0.15 2.66 (0.15) --
Class B
1999 $ 16.06 $ 0.07 $ 5.13 $ -- $ (1.88)
1998 17.47 0.03 (0.05) (0.03) (1.36)
1997 13.57 0.01 4.18 (0.02) (0.27)
1996 11.73 0.08 1.84 (0.08) --
1995 9.09 0.09 2.65 (0.10) --
Class C
1999(1) $ 18.56 $ 0.01 $ 1.11 $ (0.01) $ --
Class Y
1999 $ 16.30 $ 0.02 $ 5.46 $ (0.06) $ (1.88)
1998 17.64 0.13 0.02 (0.13) (1.36)
1997 13.66 0.12 4.26 (0.13) (0.27)
1996 11.78 0.18 1.88 (0.18) --
1995 9.10 0.17 2.67 (0.16) --
- -----------------------------------------------------------------------------------------
LARGE CAP VALUE FUND
Class A
1999 $ 22.39 $ 0.19 $ 4.44 $ (0.20) $ (3.70)
1998 28.74 0.29 (2.59) (0.29) (3.76)
1997 22.59 0.33 7.90 (0.32) (1.76)
1996 19.57 0.36 4.07 (0.36) (1.05)
1995 16.51 0.33 3.64 (0.32) (0.59)
Class B
1999 $ 22.21 $ 0.07 $ 4.36 $ (0.07) $ (3.70)
1998 28.55 0.13 (2.58) (0.13) (3.76)
1997 22.50 0.18 7.81 (0.18) (1.76)
1996 19.49 0.22 4.06 (0.22) (1.05)
1995 16.49 0.26 3.55 (0.22) (0.59)
Class C
1999(1) $ 22.79 $ 0.08 $ 0.30 $ (0.08) $ --
Class Y
1999 $ 22.42 $ 0.25 $ 4.46 $ (0.26) $ (3.70)
1998 28.75 0.35 (2.57) (0.35) (3.76)
1997 22.60 0.39 7.90 (0.38) (1.76)
1996 19.56 0.42 4.09 (0.42) (1.05)
1995 16.50 0.36 3.64 (0.35) (0.59)
- -----------------------------------------------------------------------------------------
</TABLE>
+ Returns are for the period indicated and have not been annualized.
(A) Excluding sales charges.
(1) Class C shares have been offered since February 1, 1999. All ratios for the
period have been annualized.
32 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
LARGE CAP FUNDS
<TABLE>
<CAPTION>
RATIO OF
RATIO OF NET EXPENSES TO
NET ASSET RATIO OF INVESTMENT AVERAGE
VALUE NET ASSETS EXPENSES TO INCOME (LOSS) NET ASSETS PORTFOLIO
END OF TOTAL END OF AVERAGE TO AVERAGE (EXCLUDING TURNOVER
PERIOD RETURN (A) PERIOD (000) NET ASSETS NET ASSETS WAIVERS) RATE
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 19.75 36.00% $ 168,153 1.05% (0.05)% 1.14% 57%
16.25 0.61 140,948 1.05 0.56 1.11 38
17.63 32.69 12,017 1.05 0.57 1.14 34
13.63 17.38 5,318 1.04 1.13 1.17 21
11.75 31.21 2,710 0.92 1.52 1.26 28
$ 19.38 34.99% $ 19,011 1.80% (0.83)% 1.89% 57%
16.06 0.09 11,177 1.80 (0.20) 1.86 38
17.47 31.42 9,487 1.80 (0.18) 1.89 34
13.57 16.41 5,775 1.79 0.36 1.92 21
11.73 30.29 819 1.75 0.58 2.01 28
$ 19.67 6.04%+ $ 962 1.80% (1.09)% 1.89% 57%
$ 19.84 36.36% $ 854,819 0.80% 0.20% 0.89% 57%
16.30 1.07 680,143 0.80 0.82 0.86 38
17.64 32.75 681,151 0.80 0.77 0.89 34
13.66 17.58 225,900 0.79 1.39 0.92 21
11.78 31.57 132,854 0.75 1.69 1.01 28
- --------------------------------------------------------------------------------------------------------
$ 23.12 21.93% $ 177,251 1.05% 0.82% 1.15% 61%
22.39 (8.77) 170,529 1.05 1.21 1.13 74
28.74 38.82 50,381 1.05 1.14 1.14 57
22.59 23.90 22,965 1.05 1.64 1.13 40
19.57 25.26 13,076 1.00 1.89 1.19 52
$ 22.87 21.07% $ 61,711 1.80% 0.07% 1.90% 61%
22.21 (9.37) 56,259 1.80 0.41 1.88 74
28.55 37.71 53,420 1.80 0.39 1.89 57
22.50 23.08 23,316 1.80 0.89 1.88 40
19.49 24.20 7,051 1.79 1.10 1.94 52
$ 23.09 1.65%+ $ 1,398 1.80% 0.00% 1.90% 61%
$ 23.17 22.28% $1,343,207 0.80% 1.07% 0.90% 61%
22.42 (8.47) 1,253,845 0.80 1.40 0.88 74
28.75 39.13 1,095,262 0.80 1.39 0.89 57
22.60 24.32 471,206 0.80 1.90 0.88 40
19.56 25.50 312,559 0.79 2.10 0.94 52
- --------------------------------------------------------------------------------------------------------
</TABLE>
33 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
THIS PAGE WAS INTENTIONALLY LEFT BLANK.
34 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
MID CAP FUNDS
MID CAP GROWTH
INVESTMENT OBJECTIVE
SEEKS CAPITAL GROWTH BY INVESTING IN STOCKS WITH MARKET CAPITALIZATIONS
WITHIN THE RANGE OF THE RUSSELL MID-CAP INDEX BELIEVED TO PROVIDE
SUPERIOR GROWTH.
After a sluggish fourth calendar quarter in 1998 -- a difficult period for
stocks amid the financial crisis that swept across global markets -- the Mid Cap
Growth Fund rallied to peak early in the third calendar quarter of 1999.
Interest rate concerns subsequently quieted the rally in late July, with the
fund generating an overall return of 31.69% for the fiscal year ended September
30, 1999.
The fund benefited from its concentration in technology stocks, which were
strong performers throughout much of the year. The allure of the Internet
created exciting opportunities for companies that develop technologies designed
to enhance the Internet's "bandwidth," or the rate at which subscribers can
receive data in bits per second. The fund participated in these companies,
boosting fund performance.
Converse Technology, a firm that manufactures computer and telecommunications
systems for information processing applications, was a portfolio standout due to
strong demand for its enhanced wireless technologies. Tellabs, another of the
fund's top holdings, also contributed to the fund's excellent performance within
the technology sector.
The fund took a more defensive position with financial and health care stocks.
Both sectors experienced setbacks during the year. Yet since the fund remained
underweighted among financial and health care stocks, their disappointing
performance had minimal impact on the overall portfolio.
Going forward, the fund remains positioned to profit from new opportunities
within targeted areas of the technology sector. Plus, there are several
attractive areas within the health care sector, especially among bio-technology
companies, where the fund seeks to identify investment opportunities on a
company-by-company basis.
VALUE OF A $10,000 INVESTMENT
[PLOT POINTS CHART]
<TABLE>
<CAPTION>
FIRST
FIRST AMERICAN FIRST
AMERICAN MID CAP AMERICAN RUSSELL LIPPER
MID CAP GROWTH MID CAP RUSSELL MID-CAP MID-CAP
GROWTH FUND, CLASS A GROWTH MID-CAP GROWTH GROWTH FUNDS
FUND, CLASS A ADJUSTED FUND, CLASS Y INDEX INDEX AVERAGE
------------- -------- ------------- ----- ----- -------
<S> <C> <C> <C> <C> <C> <C>
4/1990 $10,000 $ 9,475 $10,000 $10,000 $10,000 $10,000
9/1990 8,599 8,148 8,599 8,687 8,905 8,721
9/1991 13,914 13,183 13,914 12,513 13,259 13,354
9/1992 14,547 13,783 14,547 14,333 14,482 14,325
9/1993 19,918 18,872 19,918 17,870 17,412 19,147
9/1994 19,444 18,423 19,444 18,165 17,835 19,151
9/1995 26,187 24,812 26,187 23,086 23,127 26,007
9/1996 30,859 29,239 30,859 26,789 26,903 31,182
9/1997 37,351 35,390 37,450 36,179 34,878 37,250
9/1998 32,477 30,772 32,660 34,004 31,606 31,849
9/1999 42,769 40,523 43,102 40,618 43,364 48,053
</TABLE>
PAST PERFORMANCE OF THE FUND IS NOT INDICATIVE OF FUTURE PERFORMANCE.
ANNUALIZED PERFORMANCE SINCE
1 YEAR 3 YEAR 5 YEAR INCEPTION
- --------------------------------------------------------------------------------
Class A 31.69% 11.49% 17.08% 16.63%
- --------------------------------------------------------------------------------
Class A adjusted 24.81% 9.50% 15.83% 15.96%
- --------------------------------------------------------------------------------
Class B 30.66% - - 9.56%
- --------------------------------------------------------------------------------
Class B adjusted 25.66% - - 5.60%
- --------------------------------------------------------------------------------
Class C - - - 3.06%+
- --------------------------------------------------------------------------------
Class C adjusted - - - 0.99%+
- --------------------------------------------------------------------------------
Class Y* 31.97% 11.78% 17.26% 16.73%
- --------------------------------------------------------------------------------
Russell Mid-Cap 19.45% 14.88% 17.46% 16.03%
- --------------------------------------------------------------------------------
Russell Mid-Cap Growth 37.20% 17.25% 19.45% 16.84%
- --------------------------------------------------------------------------------
Lipper Mid-Cap Growth 50.88% 13.27% 18.04% 15.89%
- --------------------------------------------------------------------------------
Past performance of the fund is not indicative of future performance.
The performance presented for Class A and Y shares is that of a predecessor
fund, Piper Emerging Growth Fund, which merged with First American Mid Cap
Growth Fund on 8/7/98.
The inception date of the Class A shares is 4/23/90, the inception date of the
Class B shares is 8/7/98, the inception date of the Class C shares is 2/1/99,
and the inception date of the Class Y shares is 2/18/97.
The performance reflected in the graph begins on 4/30/90. The performance
reflected in the table for Class A and Class Y shares begins on the inception
date of Class A shares and Class B shares begin on 8/7/98. *The performance
presented links the performance of Class A shares from inception on 4/23/90 to
2/18/97 with the performance of Class Y shares after its inception on 2/18/97.
The since inception return for Class Y shares from 2/18/97, is 13.84%.
+Cumulative since inception.
Performance reflects voluntary fee waivers in effect. In absence of such fee
waivers, total returns would be reduced.
35 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
MID CAP FUNDS
MID CAP VALUE
INVESTMENT OBJECTIVE
SEEKS CAPITAL APPRECIATION BY INVESTING IN STOCKS WITH MARKET
CAPITALIZATIONS WITHIN THE RANGE OF THE RUSSELL MID-CAP INDEX BELIEVED
TO BE UNDERVALUED
The fiscal year ended September 30, 1999, was a punishing time for mid-cap value
stocks, which continued to lag behind much of the overall market. With mid-cap
value stocks currently out of favor with investors, the Mid Cap Value Fund
posted a 8.03% return for the fiscal year.
Many of the mid-cap stocks within the portfolio are leaders in their market
segments, boasting lower valuations and faster-growing earnings than large-cap
stocks. Still, the Asian crisis, followed by rising interest rates and concerns
about the U.S. economic environment caused investors to seek other types of
equities. The fund's performance improved in the context of a rising market
during the second quarter, only to surrender those gains amid ongoing concerns
over interest rate hikes.
Even though mid-cap value stocks were out of favor throughout much of the year,
several large portfolio holdings performed well. Share prices of Brunswick
Corporation -- a recreational supplier -- doubled, and shares of Avis Rent-A-Car
also climbed in value. However, other solid companies with histories of
successful acquisitions experienced setbacks, which negatively affected fund
performance.
Despite a difficult environment, the outlook for mid-cap value stocks looks
brighter. As larger firms increasingly target mid-cap value companies for
acquisitions, investors should reap the premiums paid for these stocks. Plus,
the value sector still has a cushion of valuation compared to the more expensive
large-cap growth sector and should perform relatively well in a challenging
environment.
VALUE OF A $10,000 INVESTMENT
[PLOT POINTS CHART]
<TABLE>
<CAPTION>
FIRST
FIRST AMERICAN FIRST
AMERICAN MID CAP AMERICAN RUSSELL LIPPER
MID CAP VALUE MID CAP RUSSELL MID-CAP MID-CAP
VALUE FUND, CLASS A VALUE MID-CAP VALUE VALUE FUNDS
FUND, CLASS A ADJUSTED FUND, CLASS Y INDEX INDEX AVERAGE
------------- -------- ------------- ----- ----- -------
<S> <C> <C> <C> <C> <C> <C>
9/1989 $10,000 $ 9,475 $10,000 $10,000 $10,000 $10,000
9/1990 8,996 8,524 8,996 7,855 7,456 8,475
9/1991 11,170 10,584 11,170 11,315 10,497 11,457
9/1992 12,865 12,189 12,865 12,960 12,400 12,619
9/1993 15,298 14,494 15,298 16,159 15,776 15,673
9/1994 18,163 17,209 18,172 16,426 15,937 16,408
9/1995 20,457 19,383 20,505 20,875 19,881 19,701
9/1996 25,618 24,273 25,757 24,224 23,011 22,757
9/1997 35,847 33,965 36,124 32,714 32,272 31,065
9/1998 25,513 24,173 25,774 30,748 31,075 26,701
9/1999 27,561 26,114 27,957 36,728 33,971 30,465
</TABLE>
PAST PERFORMANCE OF THE FUND IS NOT INDICATIVE OF FUTURE PERFORMANCE.
ANNUALIZED PERFORMANCE SINCE
1 YEAR 3 YEAR 5 YEAR 10 YEAR INCEPTION
- --------------------------------------------------------------------------------
Class A 8.03% 2.47% 8.70% 10.67% 12.18%
- --------------------------------------------------------------------------------
Class A adjusted 2.38% 0.64% 7.53% 10.08% 11.67%
- --------------------------------------------------------------------------------
Class B 7.38% 1.72% 7.88% - 8.75%
- --------------------------------------------------------------------------------
Class B adjusted 3.10% 0.91% 7.66% - 8.64%
- --------------------------------------------------------------------------------
Class C - - - - -5.25%+
- --------------------------------------------------------------------------------
Class C adjusted - - - - -7.15%+
- --------------------------------------------------------------------------------
Class Y* 8.47% 2.77% 9.00% 10.83% 12.31%
- --------------------------------------------------------------------------------
Russell Mid-Cap 19.45% 14.88% 17.46% 13.89% 13.89%
- --------------------------------------------------------------------------------
Russell Mid-Cap Value 9.32% 13.87% 16.35% 13.01% 13.00%
- --------------------------------------------------------------------------------
Lipper Mid-Cap Value 14.10% 10.1% 12.68% 10.44% 12.40%
- --------------------------------------------------------------------------------
Past performance of the fund is not indicative of future performance.
The inception date of the Class A shares is 12/22/87, the inception date of the
Class B shares is 8/15/94, the inception date of the Class C shares is 2/1/99,
and the inception date of the Class Y shares is 2/4/94.
The 10-year performance reflected in the graph begins on 9/30/89. The
performance reflected in the table for Class A and Class Y shares begins on the
inception date of Class A shares and Class B shares begin on 8/15/94.
*The performance presented links the performance of Class A shares from
inception on 12/22/87 to 2/4/94 with the performance of Class Y shares after its
inception on 2/4/94. The since inception return for Class Y shares from 2/4/94,
is 9.27%.
+Cumulative since inception.
Performance reflects voluntary fee waivers in effect. In absence of such fee
waivers, total returns would be reduced.
36 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
MID CAP FUNDS
STATEMENTS OF
NET ASSETS SEPTEMBER 30, 1999
MID CAP GROWTH FUND
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
COMMON STOCKS -- 96.4%
BASIC MATERIALS -- 1.6%
Ecolab 176,900 $ 6,037
----------
CAPITAL GOODS -- 5.2%
Danaher 152,500 8,035
Pentair 122,200 4,903
Sanmina* 85,700 6,631
----------
19,569
----------
COMMUNICATION SERVICES -- 3.1%
Allegiance Telecommunications* 44,900 2,363
Covad Communications Group* 49,700 2,167
NTL* 22,300 2,143
RSL Communications, Cl A* 130,500 2,382
Time Warner Telecommunications, Cl A* 127,100 2,653
----------
11,708
----------
CONSUMER CYCLICALS -- 20.0%
Bed Bath & Beyond* 151,800 5,303
Best Buy* 63,800 3,960
CMG Information Services* 25,900 2,655
Devry* 293,500 5,870
Dollar General 191,176 5,903
Dollar Tree Stores* 141,400 5,647
Doubleclick* 18,200 2,168
Etoys* 33,700 2,243
Harley-Davidson 75,700 3,790
Interpublic Group 94,800 3,899
Kohls* 110,000 7,274
Lamar Advertising* 26,400 1,307
O'Reilly Automotive* 52,800 2,516
Office Depot* 287,300 2,927
Premier Parks* 109,200 3,167
Tandy 46,300 2,393
TJX 173,400 4,866
Tower Automotive* 180,500 3,576
Valspar 116,200 3,798
Williams Sonoma* 44,100 2,142
----------
75,404
----------
CONSUMER STAPLES -- 10.1%
Adelphia Communications, Cl A* 47,900 2,817
AMFM* 120,200 7,317
Cardinal Health 24,800 1,352
Clear Channel Communications* 75,600 6,038
Dial 196,600 5,013
SFX Entertainment, Cl A* 94,700 2,888
Starbucks* 109,300 2,709
U.S. Foodservice* 282,000 5,076
Univision Communications* 33,200 2,702
Valassis Communications* 52,100 2,289
----------
38,201
----------
ENERGY -- 2.7%
Anadarko Petroleum 133,300 4,074
Nabors Industries* 110,700 2,767
Transocean Offshore 110,700 3,390
----------
10,231
----------
FINANCIALS -- 4.1%
Capital One Financial 76,100 2,968
Charter One Financial 6,575 152
E*TRADE Group* 78,700 1,849
MID CAP GROWTH FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
Firstar 115,730 $ 2,966
National Commerce Bancorporation 175,500 3,855
United Pan-Europe 56,700 3,459
----------
15,249
----------
HEALTH CARE -- 7.5%
Allergan 19,400 2,134
Centocor* 94,000 5,505
Express Scripts, Cl A* 76,800 6,010
Genentech* 18,600 2,721
Guidant 122,500 6,569
Stryker 47,600 2,433
Sybron International* 110,800 2,978
----------
28,350
----------
TECHNOLOGY -- 41.4%
Allaire 36,600 2,050
Alteon Websystems Inc* 9,900 931
Analog Devices* 151,200 7,749
BEA Systems* 26,800 946
Broadcom Corporation, Cl A* 25,800 2,812
C-Net* 58,600 3,282
Ceridian* 135,400 3,368
Ciena* 57,800 2,110
Citrix Systems* 102,900 6,373
Computer Sciences* 45,300 3,185
Comverse Technology* 69,300 6,536
Conexant Systems* 30,000 2,180
Digex* 108,900 2,580
Exodus Communications* 56,000 4,035
Extreme Networks* 34,500 2,184
F5 Networks* 32,400 2,203
General Instrument* 89,100 4,288
Inktomi* 15,200 1,824
Internap Network Services* 14,350 640
International Network Services* 104,450 5,679
Jds Uniphase* 86,800 9,879
Juniper Networks* 10,100 1,839
KLA Instruments* 73,300 4,764
Legato Systems* 217,340 9,475
Linear Technology 45,400 2,669
Maxim Integrated Products* 79,700 5,029
Network Solutions* 36,700 3,372
Novell* 131,000 2,710
Paychex 157,950 5,390
PMC-Sierra* 38,900 3,598
QLogic* 25,200 1,759
RF Micro Devices* 55,100 2,521
Safeguard Scientifics* 40,700 2,768
Tellabs* 60,600 3,450
Teradyne* 141,400 4,984
VeriSign* 28,000 2,982
Veritas Software* 35,000 2,658
Vignette* 22,900 2,072
Vitesse Semiconductor* 101,100 8,631
Waters* 38,500 2,332
Whittman-Hart* 124,900 4,844
Xilinx* 56,600 3,709
----------
156,390
----------
UTILITIES -- 0.7%
KN Energy 121,700 2,731
----------
TOTAL COMMON STOCKS
(Cost $287,424) 363,870
----------
37 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
STATEMENTS OF
NET ASSETS SEPTEMBER 30, 1999
MID CAP GROWTH FUND (CONCLUDED)
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
RELATED PARTY MONEY MARKET FUND -- 9.6%
First American Prime Obligations
Fund (A) 36,408,141 $ 36,408
----------
TOTAL RELATED PARTY MONEY MARKET FUND
(Cost $36,408) 36,408
----------
TOTAL INVESTMENTS -- 106.0%
(Cost $323,832) 400,278
----------
OTHER ASSETS AND LIABILITIES, NET -- (6.0%)(B) (22,853)
----------
NET ASSETS:
Portfolio Capital--Class A
($.0001 par value--2 billion authorized)
based on 12,824,286 outstanding shares $ 38,461
Portfolio Capital-- Class B
($.0001 par value--2 billion authorized)
based on 28,251 outstanding shares 343
Portfolio Capital--Class C
($.0001 par value--2 billion authorized)
based on 36,418 outstanding shares 465
Portfolio Capital--Class Y
($.0001 par value--2 billion authorized)
based on 16,279,750 outstanding shares 199,384
Accumulated net realized gain on investments 62,326
Net unrealized appreciation of investments 76,446
----------
TOTAL NET ASSETS -- 100.0% $ 377,425
----------
Net asset value and redemption price
per share--Class A $ 12.87
Maximum sales charge of 5.25% (C) 0.71
----------
Offering price per share--Class A $ 13.58
----------
Net asset value and offering price
per share--Class B (D) $ 12.75
----------
Net asset value price per share--Class C (E) $ 12.80
Maximum sales charge of 1.00% (F) 0.13
----------
Offering price per share--Class C $ 12.93
----------
Net asset value, offering price, and redemption
price per share--Class Y $ 12.99
----------
* Non-income producing security
(A) This money market fund is advised by U.S. Bank National Association who also
serves as Advisor for this fund. See also the notes to the financial
statements.
(B) Other assets and liabilities representing greater than 5% of total net
assets include the following (000):
Cash collateral received for securities on loan $ 135,395
Payable upon return of securities on loan $(135,395)
Investments Securities Purchased (29,396)
(C) The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 5.25%.
(D) Class B has a contingent deferred sales charge. For a description of a
possible redemption charge, see the notes to the financial statements.
(E) Class C has a contingent deferred sales charge. For a description of a
possible redemption charge, see the notes to the financial statements.
(F) The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 1.00%.
Cl--Class
The accompanying notes are an integral part of the financial statements.
MID CAP VALUE FUND
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
COMMON STOCKS -- 98.3%
BASIC MATERIALS -- 8.5%
CK Witco 434,300 $ 6,324
Consol Energy 364,600 5,309
IMC Global 321,600 4,683
Millenium Chemicals 347,400 7,100
Southdown 108,700 5,815
----------
29,231
----------
CAPITAL GOODS -- 6.7%
New Holland N.V. 573,300 9,173
Republic Services, Cl A* 778,200 8,463
Timken 340,100 5,484
----------
23,120
----------
CONSUMER CYCLICALS -- 21.3%
Avis Rent-A-Car* 286,100 5,972
Borders Group* 486,100 7,140
Brunswick 408,200 10,154
Consolidated Stores* 572,100 12,622
Fleetwood Enterprises 208,700 4,213
Furniture Brands International* 625,300 12,311
Gartner Group, Cl A 520,400 8,294
Kmart* 407,400 4,761
Saks* 295,800 4,492
Trizec Hahn 181,500 3,437
----------
73,396
----------
CONSUMER STAPLES -- 6.4%
Adelphia Communications, Cl A* 67,800 3,987
AmeriSource Health* 312,600 7,405
Pepsi Bottling Group 260,000 4,436
Suiza Foods* 165,100 6,191
----------
22,019
----------
ENERGY -- 3.7%
Rowan* 252,000 4,095
Santa Fe International 191,700 4,134
Transocean Offshore 147,100 4,505
----------
12,734
----------
FINANCIALS -- 19.7%
Ace Limited 269,700 4,568
Compass Bancshares 225,600 5,640
Dime Bancorp 477,400 8,355
First American of Tennesse 199,200 8,541
First Tennessee National 269,000 7,566
Golden West Financial 83,100 8,165
Heller Financial 217,100 4,885
Meditrust 345,000 2,933
Progressive 52,000 4,248
Simon Property Group REIT 173,200 3,886
UnionBanCal 242,900 8,805
----------
67,592
----------
HEALTH CARE -- 5.4%
Foundation Health Systems, Cl A* 467,900 4,416
HEALTHSOUTH* 521,200 3,160
Omnicare 1,148,250 11,052
----------
18,628
----------
38 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
MID CAP FUNDS
MID CAP VALUE FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
TECHNOLOGY -- 5.8%
Cadence Design Systems* 225,500 $ 2,988
Parametric Technology* 442,100 5,968
SunGard Data Systems* 416,300 10,954
----------
19,910
----------
TRANSPORTATION -- 5.3%
CNF Transportation 260,100 9,689
Northwest Airlines, Cl A* 173,600 4,427
Ryder System 209,200 4,262
----------
18,378
----------
UTILITIES -- 15.5%
DPL 311,900 5,497
KN Energy 242,400 5,439
LG & E Energy 329,200 6,995
MCN Energy (A) 397,500 6,832
Northern States Power 277,900 5,992
Pacificorp 277,500 5,585
Pinnacle West Capital 190,800 6,940
Reliant Energy 199,500 5,399
Scana 183,300 4,434
----------
53,113
----------
TOTAL COMMON STOCKS
(Cost $373,050) 338,121
----------
RELATED PARTY MONEY MARKET FUND -- 1.6%
First American Prime Obligations
Fund (B) 5,481,883 5,482
----------
TOTAL RELATED PARTY MONEY MARKET FUND
(Cost $5,482) 5,482
----------
TOTAL INVESTMENTS -- 99.9%
(Cost $378,532) 343,603
----------
OTHER ASSETS AND LIABILITIES, NET -- 0.1%(C) 273
----------
NET ASSETS:
Portfolio Capital--Class A
($.0001 par value--2 billion authorized)
based on 1,555,454 outstanding shares $ 31,439
Portfolio Capital-- Class B
($.0001 par value--2 billion authorized)
based on 1,504,828 outstanding shares 33,960
Portfolio Capital--Class C
($.0001 par value--2 billion authorized)
based on 12,698 outstanding shares 179
Portfolio Capital--Class Y
($.0001 par value--2 billion authorized)
based on 23,436,242 outstanding shares 410,550
Undistributed net investment income 194
Accumulated net realized loss on investments (97,517)
Net unrealized depreciation of investments (34,929)
----------
TOTAL NET ASSETS -- 100.0% $343,876
----------
MID CAP VALUE FUND (CONCLUDED)
DESCRIPTION VALUE
- ---------------------------------------------------------------------------
Net asset value and redemption price
per share--Class A $ 12.95
Maximum sales charge of 5.25% (D) 0.72
----------
Offering price per share--Class A $ 13.67
----------
Net asset value and offering price
per share--Class B (E) $ 12.67
----------
Net asset value per share--Class C (F) $ 12.92
Maximum sales charge of 1.00% (G) 0.13
----------
Offering price per share--Class C $ 13.05
----------
Net asset value, offering price, and redemption
price per share--Class Y $ 12.99
----------
*Non-income producing security
(A) Security sold within the terms of a private placement memorandum, exempt
from registration under section144A of the Securities Act of 1933, as
amended, and may be sold only to dealers in the program or other "qualified
institutional investors."
(B) This money market fund is advised by U.S. Bank National Association who also
serves as advisor for this fund. See also the notes to the financial
statements.
(C) Other assets and liabilities representing greater than 5% of total net
assets include the following (000):
Cash collateral received for securities on loan $ 51,419
Payable upon return of securities on loan $(51,419)
(D) The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 5.25%.
(E) Class B has a contingent deferred sales charge. For a description of a
possible redemption charge, see the notes to the financial statements.
(F) Class C has a contingent deferred sales charge. For a description of a
possible redemption charge, see the notes to the financial statements.
(G) The offering price is calcluated by dividing the net asset value by 1 minus
the maximum sales charge of 1.00%.
Cl--Class
REIT--Real Estate Investment Trust
The accompanying notes are an integral part of the financial statements.
39 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
STATEMENTS OF
OPERATIONS FOR THE YEAR ENDED SEPTEMBER 30, 1999,
IN THOUSANDS
<TABLE>
<CAPTION>
MID CAP MID CAP
GROWTH FUND VALUE FUND
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME:
Interest $ 1,323+ $ 696+
Dividends 978 6,675
- -------------------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 2,301 7,371
=================================================================================================
EXPENSES:
Investment advisory fees 2,484 2,892
Less: Waiver of investment advisory fees (239) (141)
Administrator fees 386 451
Transfer agent fees 331 311
Custodian fees 106 124
Directors' fees 6 7
Registration fees 14 17
Professional fees 14 14
Printing 22 25
Distribution fees - Class A 469 68
Distribution fees - Class B 2 271
Distribution fees - Class C 1 --
Other 12 16
- -------------------------------------------------------------------------------------------------
TOTAL NET EXPENSES 3,608 4,055
=================================================================================================
Investment income (loss) - net (1,307) 3,316
- -------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAINS (LOSSES)
ON INVESTMENTS - NET:
Net realized gain (loss) on investments 68,544 (111,991)*
Net realized loss on closing and expiration
of options written and purchased -- (6,875)
Net change in unrealized appreciation/depreciation of investments 19,285 153,185
- -------------------------------------------------------------------------------------------------
NET GAIN ON INVESTMENTS 87,829 34,319
=================================================================================================
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 86,522 $ 37,635
=================================================================================================
</TABLE>
+ Includes income from securities lending program. See the Notes to the
Financial Statements for additional information.
* On October 8, 1998 the Fund had a redemption in kind with total proceeds in
the amount of $34,206,825. The net realized losses of the transaction of
$24,456,573 may not be realized for tax purposes.
The accompanying notes are an integral part of the financial statements.
40 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
STATEMENTS OF
CHANGES IN NET ASSETS IN THOUSANDS
MID CAP FUNDS
<TABLE>
<CAPTION>
MID CAP MID CAP
GROWTH FUND VALUE FUND
- ------------------------------------------------------------------------------------------------------------------------------------
10/1/98 10/1/97 10/1/98 10/1/97
to to to to
9/30/99 9/30/98 9/30/99 9/30/98
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATIONS:
Investment income (loss) - net $ (1,307) $ (1,686) $ 3,316 $ 3,925
Net realized gain (loss) on investments 68,544 46,099 (111,991) 97,245
Net realized gain (loss) on closing and expiration of options written and purchased -- -- (6,875) 2,981
Net change in unrealized appreciation/depreciation of investments 19,285 (82,457) 153,185 (302,434)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations 86,522 (38,044) 37,635 (198,283)
- ------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment income - net:
Class A -- -- (192) (127)
Class B -- -- (80) (15)
Class C -- -- -- --
Class Y -- -- (3,277) (3,504)
Net realized gain on investments:
Class A (34,559) (27,994) (6,521) (4,144)
Class B -- Piper -- (120) -- --
Class B -- FAIF (5) -- (6,711) (4,617)
Class C -- -- -- --
Class Y (14,259) (5,981) (74,784) (63,590)
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS (48,823) (34,095) (91,565) (75,997)
====================================================================================================================================
CAPITAL SHARE TRANSACTIONS(1):
Class A
Proceeds from sales 10,245 23,463 8,828 63,542
Reinvestment of distributions 33,572 27,318 6,578 4,045
Payments for redemptions (86,670) (81,673) (20,742) (57,261)
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from Class A transactions (42,853) (30,892) (5,336) 10,326
- ------------------------------------------------------------------------------------------------------------------------------------
Class B
Proceeds from sales -- Piper -- 612 -- --
Proceeds from sales -- FAIF 332 19 1,088 13,479
Reinvestment of distributions -- Piper -- 120 -- --
Reinvestment of distribution -- FAIF 5 -- 6,626 4,481
Payments for redemptions -- Piper -- (1,748) -- --
Payment for redemptions -- FAIF (13) -- (15,956) (5,377)
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from Class B transactions 324 (997) (8,242) 12,583
- ------------------------------------------------------------------------------------------------------------------------------------
Class C
Proceeds from sales 472 -- 180 --
Reinvestment of distributions -- -- -- --
Payments for redemptions (7) -- (1) --
- ------------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from Class C transactions 465 -- 179 --
- ------------------------------------------------------------------------------------------------------------------------------------
Class Y
Proceeds from sales 218,099 110,039 165,084 258,693
Reinvestment of distributions 13,236 5,724 57,099 46,245
Payments for redemptions (111,681) (84,799) (289,556)* (156,153)
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from Class Y transactions 119,654 30,964 (67,373) 148,785
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital share
transactions 77,590 (925) (80,772) 171,694
- ------------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets 115,289 (73,064) (134,702) (102,586)
NET ASSETS AT BEGINNING OF PERIOD 262,136 335,200 478,578 581,164
====================================================================================================================================
NET ASSETS AT END OF PERIOD (2) $ 377,425 $ 262,136 $ 343,876 $ 478,578
====================================================================================================================================
</TABLE>
(1) See note 4 in the notes to financial statements for additional information.
(2) Includes undistributed net investment income (loss) (000) of: $0 and $0 for
Mid Cap Growth Fund and $194 and $429 for Mid Cap Value Fund at September
30, 1999, and September 30, 1998, respectively.
* Includes redemptions as a result of the redemption in kind on October 8,
1998.
The accompanying notes are an integral part of the financial statements.
41 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
FINANCIAL HIGHLIGHTS FOR A SHARE OUTSTANDING, THROUGHOUT THE PERIODS
ENDED SEPTEMBER 30, UNLESS OTHERWISE INDICATED
<TABLE>
<CAPTION>
REALIZED AND
NET ASSET UNREALIZED DIVIDENDS
VALUE NET GAINS OR FROM NET DISTRIBUTIONS
BEGINNING INVESTMENT (LOSSES) ON INVESTMENT FROM
OF PERIOD INCOME (LOSS) INVESTMENTS INCOME CAPITAL GAINS
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
MID CAP GROWTH FUND(1)
Class A
1999 $ 11.80 $ (0.07) $ 3.40 $ -- $ (2.26)
1998 15.25 (0.09) (1.80) -- (1.56)
1997 13.86 (0.08) 2.72 -- (1.25)
1996 12.97 (0.05) 2.18 -- (1.24)
1995(2) 9.63 (0.06) 3.40 -- --
Class B - FAIF
1999 $ 11.78 $ (0.10) $ 3.33 $ -- $ (2.26)
1998(3) 13.86 (0.01) (2.07) -- --
Class B - Piper
1998(4) $ 15.20 $ (0.09) $ 1.02 $ -- $ (1.56)
1997(5) 12.54 (0.10) 2.76 -- --
Class C
1999(6) $ 12.43 $ (0.06) $ 0.43 $ -- $ --
Class Y
1999 $ 11.87 $ (0.03) $ 3.41 $ -- $ (2.26)
1998 15.29 (0.04) (1.82) -- (1.56)
1997(5) 12.54 (0.01) 2.76 -- --
- ------------------------------------------------------------------------------------------
MID CAP VALUE FUND
Class A
1999 $ 15.04 $ 0.10 $ 1.26 $ (0.10) $ (3.35)
1998 24.19 0.07 (6.41) (0.07) (2.74)
1997 20.41 0.11 6.98 (0.11) (3.20)
1996 17.89 0.20 3.94 (0.20) (1.42)
1995 17.30 0.35 1.60 (0.34) (1.02)
Class B
1999 $ 14.80 $ 0.04 $ 1.22 $ (0.04) $ (3.35)
1998 23.96 (0.01) (6.41) -- (2.74)
1997 20.31 0.02 6.85 (0.02) (3.20)
1996 17.83 0.09 3.91 (0.10) (1.42)
1995 17.29 0.29 1.51 (0.24) (1.02)
Class C
1999(6) $ 13.69 $ 0.06 $ (0.78) $ (0.05) $ --
Class Y
1999 $ 15.05 $ 0.12 $ 1.30 $ (0.13) $ (3.35)
1998 24.21 0.14 (6.43) (0.13) (2.74)
1997 20.43 0.16 6.98 (0.16) (3.20)
1996 17.89 0.25 3.95 (0.24) (1.42)
1995 17.30 0.38 1.61 (0.38) (1.02)
- ------------------------------------------------------------------------------------------
</TABLE>
+ Returns are for the period indicated and have not been annualized.
(A) Excluding sales charges.
(1) The financial highlights for the Mid Cap Growth Fund as set forth herein
include the historical financial highlights of the Piper Emerging Growth
Fund Class A shares and Class Y shares. The assets of the Piper Emerging
Growth Fund were acquired by Mid Cap Growth Fund on August 7, 1998. In
connection with such acquisition, (i) Class A shares of the Piper Emerging
Growth Fund were exchanged for Class A shares of the Mid Cap Growth Fund,
(ii) Class Y shares of the Piper Emerging Growth Fund were exchanged for
Class Y shares of the Mid Cap Growth Fund. On August 7, 1998, the funds
advisor changed from Piper Capital Management, Inc. to U.S. Bank N.A.
(2) Per share amounts have been adjusted to reflect the effect of the stock
dividend declared on December 23, 1995.
(3) Class B shares for FAIF have been offered since August 7, 1998. All ratios
for the period have been annualized.
(4) Effective April 28, 1998 all shareholders were exchanged into Class A. Class
B share activity was discontinued. All ratios for the period have been
annualized.
(5) Class B and Class Y shares have been offered since February 18, 1997. All
ratios for the period have been annualized.
(6) Class C shares have been offered since February 1, 1999. All ratios for the
period have been annualized.
42 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
MID CAP FUNDS
<TABLE>
<CAPTION>
RATIO OF
RATIO OF NET EXPENSES TO
NET ASSET RATIO OF INVESTMENT AVERAGE
VALUE NET ASSETS EXPENSES TO INCOME (LOSS) NET ASSETS PORTFOLIO
END OF TOTAL END OF AVERAGE TO AVERAGE (EXCLUDING TURNOVER
PERIOD RETURN (A) PERIOD (000) NET ASSETS NET ASSETS WAIVERS) RATE
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 12.87 31.69% $165,072 1.14% (0.48)% 1.19% 94%
11.80 (13.05) 188,763 1.18 (0.60) 1.34 39
15.25 21.04 274,799 1.23 (0.55) 1.39 51
13.86 17.84 303,769 1.18 (0.41) 1.37 44
12.97 34.68 252,632 1.24 (0.51) 1.42 33
$ 12.75 30.66% $ 360 1.89% (1.26)% 1.98% 94%
11.78 (15.01)+ 17 1.87 (1.12) 1.87 39
$ 14.57 7.77% $ -- 1.85% (1.33)% 1.85% 29%
15.20 21.21 + 1,028 1.85 (1.16) 1.85 51
$ 12.80 3.06%+ $ 466 1.89% 1.27% 1.98% 94%
$ 12.99 31.97% $211,527 0.89% (0.25)% 0.96% 94%
11.87 (12.79) 73,356 0.87 (0.27) 0.87 39
15.29 21.93 + 59,393 0.87 (0.16) 0.87 51
- --------------------------------------------------------------------------------------------------------------
$ 12.95 8.03% $ 20,148 1.15% 0.63% 1.18% 121%
15.04 (28.83) 29,261 1.14 0.43 1.14 135
24.19 39.93 35,207 1.14 0.58 1.15 82
20.41 25.23 17,987 1.13 1.06 1.13 143
17.89 12.63 11,609 1.09 2.08 1.20 72
$ 12.67 7.38% $ 19,072 1.90% (0.13)% 1.93% 121%
14.80 (29.40) 31,276 1.89 (0.31) 1.89 135
23.96 38.81 36,649 1.90 (0.18) 1.90 82
20.31 24.35 12,847 1.88 0.25 1.88 143
17.83 11.64 4,847 1.88 1.22 1.95 72
$ 12.92 (5.25)%+ $ 164 1.90% 0.29% 1.93% 121%
$ 12.99 8.47% $304,492 0.90% 0.89% 0.93% 121%
15.05 (28.65) 418,041 0.89 0.69 0.89 135
24.21 40.25 509,308 0.89 0.82 0.90 82
20.43 25.61 247,828 0.88 1.35 0.88 143
17.89 12.84 201,786 0.88 2.30 0.95 72
- --------------------------------------------------------------------------------------------------------------
</TABLE>
43 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
SMALL CAP FUNDS
MICRO CAP VALUE
INVESTMENT OBJECTIVE
SEEKS CAPITAL APPRECIATION BY INVESTING IN A BROADLY DIVERSIFIED
PORTFOLIO OF VERY SMALL COMPANY STOCKS WITH MARKET CAPITALIZATIONS OF
$500 MILLION OR LESS BELIEVED TO BE UNDERVALUED
The Micro Cap Value Fund went on a rollercoaster ride during the first six
months of the fiscal year, experiencing a 20% gain followed by a larger loss as
market sentiment turned against small value stocks. For the fiscal year ended
September 30, 1999, the fund's return was 12.05%.
Many of the micro-cap companies that comprise the fund's top holdings were
affected by the exodus from this asset class following last summer's market
correction. Stocks such as MagnaTek and Unisource Energy Corporation were
hardest hit, while other key sector holdings also struggled.
The fund made up for lost ground during the second calendar quarter. A rebound
in energy prices plus a market rotation that began to favor small company stocks
contributed to the uptick. Yet interest rate hikes quelled the rally during the
third quarter.
Small-cap stocks still have a cushion of valuation and should perform relatively
well in a difficult market environment. The fund will continue to pursue
opportunities within the energy, health care and technology sectors, seeking
undervalued companies with promising products and growth prospects.
VALUE OF A $10,000 INVESTMENT
[PLOT POINTS CHART]
<TABLE>
<CAPTION>
FIRST
FIRST AMERICAN FIRST
AMERICAN MICRO CAP AMERICAN RUSSELL LIPPER
MICRO CAP VALUE MICRO CAP RUSSELL 2000 SMALL-CAP
VALUE FUND, CLASS A VALUE 2000 VALUE VALUE FUNDS
FUND, CLASS A ADJUSTED FUND, CLASS Y INDEX INDEX AVERAGE
------------- -------- ------------- ----- ----- -------
<S> <C> <C> <C> <C> <C> <C>
9/1989 $10,000 $ 9,475 $10,000 $10,000 $10,000 $10,000
9/1990 7,433 7,043 7,485 7,285 7,177 7,807
9/1991 11,939 11,312 12,059 10,569 10,046 10,821
9/1992 13,705 12,985 13,863 11,514 11,845 11,921
9/1993 18,800 17,813 19,027 15,332 16,177 15,172
9/1994 20,674 19,589 20,987 15,741 16,844 15,844
9/1995 28,675 27,170 29,184 19,419 19,970 18,986
9/1996 33,854 32,077 34,534 21,972 22,662 21,948
9/1997 49,075 46,499 50,091 29,265 32,328 31,021
9/1998 37,901 35,911 38,691 23,698 28,193 25,009
9/1999 42,468 40,238 43,546 28,218 29,837 28,092
</TABLE>
PAST PERFORMANCE OF THE FUND IS NOT INDICATIVE OF FUTURE PERFORMANCE.
ANNUALIZED PERFORMANCE SINCE
1 YEAR 3 YEAR 5 YEAR 10 YEAR INCEPTION
- --------------------------------------------------------------------------------
Class A 12.05% 7.85% 15.48% 15.56% 14.34%
- --------------------------------------------------------------------------------
Class A adjusted 6.17% 5.91% 14.24% 14.95% 13.83%
- --------------------------------------------------------------------------------
Class B - - - - -8.14%*
- --------------------------------------------------------------------------------
Class B adjusted - - - - -11.53%*
- --------------------------------------------------------------------------------
Class Y 12.55% 8.04% 15.72% 15.85% 14.66%
- --------------------------------------------------------------------------------
Russell 2000 19.07% 8.70% 12.38% 10.93% 10.92%
- --------------------------------------------------------------------------------
Russell 2000 Value 5.83% 9.60% 12.11% 11.55% 11.54%
- --------------------------------------------------------------------------------
Lipper Small-Cap Value 12.33% 7.49% 11.72% 10.32% 8.90%
- --------------------------------------------------------------------------------
Past performance of the fund is not indicative of future performance.
The inception date of the Class A shares, B shares, and Y shares is 8/8/97. The
performance reflected in the table begins on 9/30/87, the inception date of the
common trust fund. Actual since inception returns from 8/8/97 for Class A shares
is -2.44%, Class A shares adjusted is -4.84%, Class Y shares is -2.27%.
*Cumulative since inception from 8/8/97 to 9/24/99, the date the fund's Class B
shares were closed.
The 10-year performance reflected in the graph begins on 9/30/89 and represents
past performance of U.S. Bank's internally managed common trust fund, adjusted
for fees and expenses for periods prior to 8/8/97, the inception date of the
First American Micro Cap Value Fund. The common trust fund was not registered
under the 1940 Act and therefore was not subject to certain investment
restrictions that may have adversely affected performance.
Performance reflects voluntary fee waivers in effect. In absence of such fee
waivers, total returns would be reduced.
44 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
SMALL CAP FUNDS
REGIONAL EQUITY
INVESTMENT OBJECTIVE
SEEKS CAPITAL APPRECIATION BY INVESTING PRIMARILY IN SMALL CAP COMPANIES
HEADQUARTERED IN MINNESOTA, NORTH AND SOUTH DAKOTA, MONTANA, WISCONSIN,
MICHIGAN, IOWA, NEBRASKA, COLORADO AND ILLINOIS
The Regional Equity Fund invests primarily in stocks of small companies located
throughout the Upper Midwest, plus Colorado and Montana. The fund focusing on
small-cap value stocks, returned 20.12% for the fiscal year ended September 30,
1999.
Fund performance tended to mirror broader market developments throughout the
year. As small-cap stocks returned to favor during the second calendar quarter,
the fund recorded a 24% increase in its share price -- the largest quarterly
increase in five years. When the market rotated back to large-cap stocks in late
summer due to a changing economic environment, fund performance lagged somewhat.
The fund's bottom-up investment strategy identifies promising companies across
many industries -- but increasingly in the capital goods and consumer cyclicals
sectors, where stocks are undervalued relative to other securities in the same
industry. Merrill Corporation and Pentair Incorporated are two examples of the
fund's top 10 holdings that performed well throughout the year.
Going forward, the fund will concentrate on two promising sectors. The fund
management team intends to add undervalued financial stocks to the fund
holdings, as the outlook for the financial sector should improve. The fund will
also seek additional opportunities within the energy sector, focusing on
domestic natural gas exploration and production. As natural gas supplies
continue to dwindle, the fund is poised to capitalize on a rebound in energy
prices.
VALUE OF A $10,000 INVESTMENT
[PLOT POINTS CHART]
<TABLE>
<CAPTION>
FIRST
FIRST AMERICAN FIRST
AMERICAN REGIONAL AMERICAN RUSSELL LIPPER
REGIONAL EQUITY REGIONAL RUSSELL 2000 SMALL-CAP
EQUITY FUND, CLASS A EQUITY 2000 VALUE VALUE FUNDS
FUND, CLASS A ADJUSTED FUND, CLASS Y INDEX INDEX AVERAGE
------------- -------- ------------- ----- ----- -------
<S> <C> <C> <C> <C> <C> <C>
12/1992 $10,000 $ 9,475 $10,000 $10,000 $10,000 $10,000
9/1993 11,667 11,054 11,667 11,585 12,069 11,278
9/1994 12,457 11,803 12,464 11,894 12,566 11,778
9/1995 17,585 16,662 17,624 14,673 14,898 14,114
9/1996 19,514 18,490 19,610 16,602 16,907 16,315
9/1997 26,565 25,170 26,765 22,112 24,117 23,060
9/1998 20,046 18,993 20,251 17,907 21,033 18,591
9/1999 24,079 22,815 24,386 21,321 22,259 20,883
</TABLE>
PAST PERFORMANCE OF THE FUND IS NOT INDICATIVE OF FUTURE PERFORMANCE.
ANNUALIZED PERFORMANCE SINCE
1 YEAR 3 YEAR 5 YEAR INCEPTION
- --------------------------------------------------------------------------------
Class A 20.12% 7.26% 14.09% 14.30%
- --------------------------------------------------------------------------------
Class A adjusted 13.84% 5.35% 12.87% 13.40%
- --------------------------------------------------------------------------------
Class B 19.19% 6.45% 13.21% 13.46%
- --------------------------------------------------------------------------------
Class B adjusted 14.19% 5.26% 12.97% 13.34%
- --------------------------------------------------------------------------------
Class Y* 20.42% 7.54% 14.37% 14.51%
- --------------------------------------------------------------------------------
Russell 2000 19.07% 8.70% 12.38% 11.87%
- --------------------------------------------------------------------------------
Russell 2000 Value 5.83% 9.60% 12.11% 12.58%
- --------------------------------------------------------------------------------
Lipper Small-Cap Value 26.79% 6.52% 12.90% 11.10%
- --------------------------------------------------------------------------------
Past performance of the fund is not indicative of future performance.
The inception date of the Class A shares is 12/14/92, the inception date of the
Class B shares is 8/15/94, and the inception date of the Class Y shares is
2/4/94. The performance reflected in the graph begins on 12/31/92. The
performance reflected in the table for Class A and Class Y shares begins on the
inception date of Class A shares and Class B shares begin on 8/15/94.
*The performance presented links the performance of Class A shares from
inception on 12/14/92 to 2/4/94 with the performance of Class Y shares after its
inception on 2/4/94. The since inception return for Class Y shares from 2/4/94,
is 12.89%.
Performance reflects voluntary fee waivers in effect. In absence of such fee
waivers, total returns would be reduced.
45 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
SMALL CAP FUNDS
SMALL CAP GROWTH
INVESTMENT OBJECTIVE
SEEKS CAPITAL GROWTH BY INVESTING IN A DIVERSIFIED PORTFOLIO OF STOCKS
WITH MARKET CAPITALIZATIONS OF $1 BILLION OR LESS WITH OUTSTANDING
POTENTIAL FOR SUPERIOR GROWTH
After four years of relative underperformance, compelling valuations and strong
fundamentals have led investors to finally start thinking small. That was good
news for the Small Cap Growth Fund, which ended the fiscal year September 30,
1999, with a 41.11% return.
Like many small-cap mutual funds, the Small Cap Growth Fund suffered declining
share values early in the fourth calendar quarter of 1998, as the Asian crisis
swept through the world's financial markets. But the fund came roaring back in
1999, due to a renewed interest in small companies, many of which boast strong
earnings and attractive share prices.
The fund's technology holdings were instrumental in its overall performance.
Indeed, both consumers and corporations increasingly embrace new technologies as
a way to obtain information and enhance productivity. The semiconductor industry
led the surge, with three large fund holdings -- Applied Micro Circuits,
PMC-Sierra and TranSwitch Corporation --comprising a significant portion of the
portfolio gains during the fiscal year.
Going forward, the fund will continue to seek out promising companies within the
broad technology industry. The fund will also pursue new opportunities within
the bio-technology area of the health care industry and within the financial
sector. Although health care and financial stocks are currently out of favor,
there are attractive opportunities among a select group of companies. In
addition, the energy industry offers good bargains, plus a favorable outlook due
to a growing demand for oil and natural gas.
VALUE OF A $10,000 INVESTMENT
[PLOT POINTS CHART]
<TABLE>
<CAPTION>
FIRST
FIRST AMERICAN FIRST
AMERICAN SMALL CAP AMERICAN RUSSELL LIPPER
SMALL CAP GROWTH SMALL CAP RUSSELL 2000 SMALL-CAP
GROWTH FUND, CLASS A GROWTH 2000 GROWTH GROWTH FUNDS
FUND, CLASS A ADJUSTED FUND, CLASS Y INDEX INDEX AVERAGE
------------- -------- ------------- ----- ----- -------
<S> <C> <C> <C> <C> <C> <C>
9/1989 $10,000 $ 9,475 $10,000 $10,000 $10,000 $10,000
9/1990 9,351 8,860 9,346 7,285 7,376 8,147
9/1991 13,143 12,452 13,147 10,569 11,122 12,448
9/1992 13,952 13,219 13,953 11,514 11,097 13,125
9/1993 17,375 16,462 17,388 15,332 14,335 17,481
9/1994 17,743 16,811 17,753 15,741 14,461 17,637
9/1995 20,203 19,141 20,221 19,419 18,535 23,681
9/1996 21,291 20,173 21,303 21,972 20,871 29,208
9/1997 31,015 29,386 31,025 29,265 25,746 35,975
9/1998 25,231 23,905 25,236 23,698 19,353 28,043
9/1999 35,603 33,733 35,689 28,218 25,668 40,314
</TABLE>
PAST PERFORMANCE OF THE FUND IS NOT INDICATIVE OF FUTURE PERFORMANCE.
ANNUALIZED PERFORMANCE SINCE
1 YEAR 3 YEAR 5 YEAR 10 YEAR INCEPTION
- --------------------------------------------------------------------------------
Class A 41.11% 18.69% 14.94% 13.54% 11.10%
- --------------------------------------------------------------------------------
Class A adjusted 33.69% 16.57% 13.72% 12.93% 10.63%
- --------------------------------------------------------------------------------
Class B 39.92% - - - 14.49%
- --------------------------------------------------------------------------------
Class B adjusted 34.92% - - - 10.29%
- --------------------------------------------------------------------------------
Class C - - - - 7.75%+
- --------------------------------------------------------------------------------
Class C adjusted - - - - 6.65%+
- --------------------------------------------------------------------------------
Class Y* 41.42% 18.76% 14.99% 13.57% 11.12%
- --------------------------------------------------------------------------------
Russell 2000 19.07% 8.70% 12.38% 10.93% 10.92%
- --------------------------------------------------------------------------------
Russell 2000 Growth 32.63% 7.14% 12.16% 9.89% 9.88%
- --------------------------------------------------------------------------------
Lipper Small Cap Growth 43.76% 9.58% 15.03% 13.22% 11.85%
- --------------------------------------------------------------------------------
Past performance of the fund is not indicative of future performance.
The performance presented is that of a predecessor fund, Piper Small Company
Growth Fund, which merged with First American Small Cap Growth Fund on 7/31/98.
The inception date of the Class A shares is 3/16/87, the inception date of the
Class B shares is 7/31/98, the inception date of the Class C shares is 2/1/99,
and the inception date of the Class Y shares is 7/31/98. The performance
reflected in the table for Class A and Class Y shares begins on the inception
date of Class A shares and Class B shares begin on 7/31/98.
*The performance presented links the performance of Class A shares from
inception on 3/16/87 to 7/31/98 with the performance of Class Y shares after its
inception on 7/31/98. The since inception return for Class Y shares from
7/31/98, is 15.70%.
+Cumulative since inception.
Performance reflects voluntary fee waivers in effect. In absence of such fee
waivers, total returns would be reduced.
46 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
SMALL CAP FUNDS
SMALL CAP VALUE
INVESTMENT OBJECTIVE
SEEKS CAPITAL APPRECIATION BY INVESTING IN A DIVERSIFIED PORTFOLIO OF
STOCKS WITH MARKET CAPITALIZATIONS OF $1 BILLION OR LESS BELIEVED TO BE
UNDERVALUED
The Small Cap Value Fund experienced a difficult fourth quarter in 1998 as
global economic woes sent investors rushing for the relative safety and
stability of large-cap stocks and U.S. Treasuries. The situation changed
dramatically during the second calendar quarter, when small-cap value funds came
roaring back to post strong gains. Amid this marketplace volatility, the fund
generated a 11.12% return for the fiscal year ended September 30, 1999.
The second calendar quarter saw the market rotate back to small-cap value
stocks, thanks to strong earnings growth coupled with attractive valuations.
However, several of the fund's key sectors were affected by events that shaped
the broader marketplace, including interest-rate worries that punished the
financial-services industry and government reforms that sent share prices of
health care stocks downward. Cyclical stocks -- companies that make things like
copper, paper and chemicals -- also came roaring back in April, but then went
into a funk as investors waited to see whether the economy was going to take
off.
There was good news in the energy sector, as the fund benefited by increasing
its weightings among oil and gas exploration and production companies to
capitalize on a rebound in energy prices. Basin Exploration and Forest Oil were
two companies with strong balance sheets and attractive growth that contributed
to the fund's strong showing in this sector.
The outlook for the fund is promising, as investors increasingly seek profitable
yet undervalued companies. The fund will continue to identify opportunities
within the energy, technology and health care sectors, employing a disciplined
approach to selecting specific undervalued companies with excellent growth
prospects.
VALUE OF A $10,000 INVESTMENT
[PLOT POINTS CHART]
<TABLE>
<CAPTION>
FIRST
FIRST AMERICAN FIRST
AMERICAN SMALL CAP AMERICAN RUSSELL LIPPER
SMALL CAP VALUE SMALL CAP RUSSELL 2000 SMALL-CAP
VALUE FUND, CLASS A VALUE 2000 VALUE VALUE FUNDS
FUND, CLASS A ADJUSTED FUND, CLASS Y INDEX INDEX AVERAGE
------------- -------- ------------- ----- ----- -------
<S> <C> <C> <C> <C> <C> <C>
9/1989 $10,000 $ 9,475 $10,000 $10,000 $10,000 $10,000
9/1990 7,733 7,327 7,766 7,285 7,177 7,807
9/1991 12,369 11,720 12,438 10,569 10,046 10,821
9/1992 14,191 13,446 14,283 11,514 11,845 11,921
9/1993 19,354 18,337 19,549 15,332 16,177 15,172
9/1994 20,993 19,891 21,249 15,741 16,844 15,844
9/1995 29,659 28,101 29,883 19,419 19,970 18,986
9/1996 34,306 32,505 34,864 21,972 22,662 21,948
9/1997 48,643 46,089 49,514 29,265 32,328 31,021
9/1998 36,331 34,424 37,086 23,698 28,193 25,009
9/1999 40,371 38,252 41,299 28,218 29,837 28,092
</TABLE>
PAST PERFORMANCE OF THE FUND IS NOT INDICATIVE OF FUTURE PERFORMANCE.
ANNUALIZED PERFORMANCE
SINCE
1 YEAR 3 YEAR 5 YEAR 10 YEAR INCEPTION
- --------------------------------------------------------------------------------
Class A 11.12% 5.58% 13.97% 14.98% 16.89%
- --------------------------------------------------------------------------------
Class A adjusted 5.30% 3.69% 12.76% 14.37% 16.35%
- --------------------------------------------------------------------------------
Class B 10.16% - - - -6.52%
- --------------------------------------------------------------------------------
Class B adjusted 5.16% - - - -8.70%
- --------------------------------------------------------------------------------
Class C - - - - 2.89%+
- --------------------------------------------------------------------------------
Class C adjusted - - - - 0.84%+
- --------------------------------------------------------------------------------
Class Y 11.36% 5.81% 14.21% 15.24% 17.19%
- --------------------------------------------------------------------------------
Russell 2000 19.07% 8.70% 12.38% 10.93% 10.92%
- --------------------------------------------------------------------------------
Russell 2000 Value 5.83% 9.60% 12.11% 11.55% 11.54%
- --------------------------------------------------------------------------------
Lipper Small-Cap Value 12.33% 7.49% 11.72% 10.32% 11.59%
- --------------------------------------------------------------------------------
Past performance of the fund is not indicative of future performance.
The performance presented is that of a predecessor fund, Qualivest Small
Companies Value Fund, which merged with First American Small Cap Value Fund on
11/21/97.
The inception date of the Class A shares is 1/1/88, the inception date of the
Class B shares is 11/24/97, the inception date of the Class C shares is 2/1/99,
and the inception date of the Class Y shares is 8/1/94. Actual since inception
return for the Class A shares from 8/1/94 is 14.29%.
The 10-year performance reflected in the graph begins on 9/30/89, and represents
past performance of U.S. Bank's internally managed common trust fund, adjusted
for fees and expenses for periods prior to 8/1/94, the inception date of the
Qualivest Small Companies Fund. The common trust fund was not registered under
the 1940 Act and therefore was not subject to certain investment restrictions
that may have adversely affected performance. The performance reflected in the
table begins on 9/30/88, the inception date of the common trust fund.
+Cumulative since inception.
Performance reflects voluntary fee waivers in effect. In absence of such fee
waivers, total returns would be reduced.
47 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
STATEMENTS OF
NET ASSETS SEPTEMBER 30, 1999
MICRO CAP VALUE FUND
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
COMMON STOCKS -- 95.1%
BASIC MATERIALS -- 2.5%
AFC Cable Systems* 20,100 $ 854
Northwest Pipe* 50,100 783
-----------
1,637
-----------
CAPITAL GOODS -- 14.9%
American Aircarriers Support* 60,000 525
BWay* 45,000 447
Casella Waste Systems, Cl A* 22,900 382
Dayton Superior, Cl A* 75,500 1,284
DII Group* 7,500 264
L.B. Foster, Cl A* 160,000 770
MagneTek* 170,000 1,519
Matthews International, Cl A 30,000 904
Moog, Cl A* 55,000 1,588
Racing Champions* 81,000 461
Supreme Industries 80,582 594
Thomas Industries 30,650 573
Willis Lease Finance* 40,200 530
-----------
9,841
-----------
CONSUMER CYCLICALS -- 20.7%
Burns International Services* 60,000 968
Davids Bridal* 41,400 308
Dura Automotive Systems* 60,720 1,461
Edelbrock* 37,000 532
Finlay Enterprises* 31,600 435
Gildan Activewear* 35,000 604
Huffy 22,800 225
K-Swiss, Cl A 6,000 189
Midway Games* 14,400 227
Park Ohio Holdings* 73,535 919
Piercing Pagoda* 32,150 418
PolyMedica* 59,000 1,372
Quaker Fabric* 30,000 131
Simpson Manufacturing* 14,300 670
Stanley Furniture* 75,000 1,584
Steven Madden Limited* 75,000 970
Synthetic Industries* 49,200 1,347
Tarrant Apparel Group* 8,000 90
TRO Learning* 117,700 677
Whitehall Jewellers* 19,100 549
-----------
13,676
-----------
CONSUMER STAPLES -- 2.4%
Alternative Resources* 75,000 389
Buenos Aires Emb-spons, ADR* 2,824 --
Drug Emporium* 120,000 810
Performance Food Group* 14,000 359
-----------
1,558
-----------
ENERGY -- 5.8%
Basin Exploration* 40,000 960
Callon Petroleum* 40,000 610
MICRO CAP VALUE FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
Core Laboratories N.V.* 7,800 $ 147
Forest Oil* 80,000 1,365
Veritas DGC* 37,800 728
-----------
3,810
-----------
FINANCIALS -- 13.5%
Chelsea GCA Realty, REIT 27,100 857
Community First Bankshares 18,000 304
Dain Rauscher 10,000 490
Farm Family Holdings* 30,000 1,185
First Republic Bank* 70,000 1,855
Lexington Corporate Properties, REIT 53,000 593
Penn Treaty American* 29,100 608
Philadelphia Consolidated Holding* 49,200 664
Prism Financial* 14,400 144
SCPIE Holdings 15,000 473
Shurgard Storage Centers, REIT 14,100 349
Walden Residential Properties, REIT 34,000 742
Webster Financial 26,000 663
-----------
8,927
-----------
HEALTH CARE -- 7.9%
America Service Group* 95,000 1,283
BOLDER Technologies* 100,000 1,000
Catalytica* 70,000 1,050
Datatrak International* 62,681 249
Lifecore Biomedical* 36,000 495
Nu-Med* 731 --
Res-Care* 9,200 156
Spacelabs Medical* 40,000 605
Total Renal Care Holdings* 55,800 415
-----------
5,253
-----------
TECHNOLOGY -- 19.6%
Applied Science & Technology* 47,100 971
Aris* 34,800 200
Brooks Automation* 10,000 176
Comdial* 9,700 70
Datalink* 35,000 413
DSP Communications* 34,800 661
Evolving Systems* 100,000 675
FEI* 85,000 643
Fieldworks* 176,000 264
Gatefield* 19,485 122
Government Technology Services* 92,400 323
Inprise* 6,400 26
J.D. Edwards & Company* 11,000 228
Kofax Image Products* 130,000 1,649
Neomagic* 20,800 161
Netsilicon* 25,200 321
Periophonics* 25,000 784
Pioneer-Standard Electronics 55,000 794
Pomeroy Computer Resources* 17,700 196
Project Software & Development* 17,200 920
Radisys* 51,000 2,002
48 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
SMALL CAP FUNDS
MICRO CAP VALUE FUND (CONTINUED)
DESCRIPTION SHARES/PAR (000) VALUE (000)
- ---------------------------------------------------------------------------
Rainbow Technologies* 40,000 $ 525
Remec* 25,700 353
Sapiens International* 47,300 526
-----------
13,003
-----------
TRANSPORTATION -- 0.6%
Nordic American Tanker Shipping 35,000 420
-----------
UTILITIES -- 7.2%
El Paso Electric* 126,800 1,141
Midcoast Energy Resources 61,262 1,210
TNP Enterprises 18,000 701
Trigen Energy 20,000 459
Unisource Energy Holding* 105,000 1,240
-----------
4,751
-----------
TOTAL COMMON STOCKS
(Cost $49,424) 62,876
-----------
CONVERTIBLE BONDS -- 3.1%
Drug Emporium, 65.1466 shares
7.750%, 10/01/14 $ 921,000 649
Titan, 285.7143 shares
8.250%, 11/01/03 360,000 1,427
-----------
TOTAL CONVERTIBLE BONDS
(Cost $1,094) 2,076
-----------
RELATED PARTY MONEY MARKET FUND -- 2.3%
First American Prime Obligations
Fund (A) 1,527,735 1,528
-----------
TOTAL RELATED PARTY MONEY MARKET FUND
(Cost $1,528) 1,528
-----------
TOTAL INVESTMENTS -- 100.5%
(Cost $52,046) 66,480
-----------
OTHER ASSETS AND LIABILITIES, NET -- (0.5%)(B) (350)
-----------
NET ASSETS:
Portfolio Capital--Class A
($.0001 par value--2 billion authorized)
based on 199,492 outstanding shares $ 2,299
Portfolio Capital--Class Y
($.0001 par value--2 billion authorized)
based on 9,218,062 outstanding shares 47,098
Accumulated net realized gain on investments 2,299
Net unrealized appreciation of investments 14,434
-----------
TOTAL NET ASSETS -- 100.0% $ 66,130
-----------
MICRO CAP VALUE FUND (CONCLUDED)
DESCRIPTION VALUE
- ---------------------------------------------------------------------------
Net asset value and redemption price
per share--Class A $ 7.02
Maximum sales charge of 5.25% (C) 0.39
-----------
Offering price per share--Class A $ 7.41
-----------
Net asset value, offering price, and redemption
price per share--Class Y $ 7.02
-----------
* Non-income producing security
(A) This money market fund is advised by U.S. Bank National Association who also
serves as advisor for this fund. See also the notes to the financial
statements.
(B) Other assets and liabilities representing greater than 5% of total net
assets include the following (000):
Cash collateral received for securities on loan $7,051
Payable upon return of securities on loan $(7,051)
(C) The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 5.25%.
ADR--American Depository Receipt
Cl--Class
REIT--Real Estate Investment Trust
The accompanying notes are an integral part of the financial statements.
49 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
STATEMENTS OF
NET ASSETS SEPTEMBER 30, 1999
REGIONAL EQUITY FUND
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
COMMON STOCKS -- 98.3%
BASIC MATERIALS -- 0.1%
Hawkins Chemical 32,000 $ 252
-----------
CAPITAL GOODS -- 18.9%
Alliant Techsystems* 98,600 6,834
Applied Power, Cl A 210,000 6,379
BMC Industries 182,600 2,248
Communications Systems 288,000 3,348
DII Group* 56,600 1,991
Donaldson 80,000 1,855
Idex 13,600 385
Pentair 150,000 6,019
SPX* 58,000 5,264
Valmont Industries 100,000 1,688
-----------
36,011
-----------
CONSUMER CYCLICALS -- 17.3%
Ashworth* 207,300 984
Burns International Services* 83,000 1,338
Department 56* 180,000 4,309
Dura Automotive Systems* 258,600 6,222
Lakes Gaming* 20,000 193
Midway Games* 40,000 630
Norstan* 405,000 3,240
Regis 270,000 5,198
School Specialty* 80,000 1,350
Service Experts* 90,000 934
Sport-Haley* (A) 313,000 1,448
Tower Automotive* 350,000 6,934
-----------
32,780
-----------
CONSUMER STAPLES -- 16.6%
Alternative Resources* 247,600 1,284
Avado Brands 49,400 278
Buffets* 360,000 4,185
International Multifoods 295,000 6,785
Merrill 520,000 10,368
Michael Foods 330,000 8,673
-----------
31,573
-----------
ENERGY -- 7.4%
Basin Exploration* 170,000 4,080
Core Laboratories N.V.* 35,000 659
Evergreen Resources* 60,000 1,444
Forest Oil* 176,000 3,003
Mallon Resources* 157,000 1,354
Newfield Exploration* 41,000 1,350
Veritas DGC* 110,800 2,133
-----------
14,023
-----------
FINANCIALS -- 14.3%
Astoria Financial 37,500 1,153
Community First Bankshares 370,000 6,244
Dain Rauscher 30,000 1,470
Metris 113,500 3,341
Radian Group 159,990 6,870
TCF Financial 255,000 7,283
UST 26,400 812
-----------
27,173
-----------
REGIONAL EQUITY FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
HEALTH CARE -- 6.9%
ATS Medical* 180,000 $ 1,788
BOLDER Technologies* (A) 170,200 1,702
Lifecore Biomedical* 400,000 5,500
Orphan Medical* 150,000 1,012
Rehabilicare* 143,000 572
Res-Care* 84,700 1,440
Total Renal Care Holdings* 159,100 1,183
----------
13,197
----------
TECHNOLOGY -- 16.8%
Aetrium* (A) 538,000 3,749
Ballantyne* 250,000 1,406
Bell & Howell* 143,600 5,268
Etec Systems* 15,300 576
Evolving Systems* 260,000 1,755
Inacom* 192,100 1,765
Innovex 200,000 1,800
ITI Technologies* 69,500 2,089
J.D. Edwards & Company* 31,500 653
Lodgenet Entertainment* 275,000 3,575
National Computer Systems 200,000 7,669
NOVA* 37,700 943
Radisys* 18,300 718
----------
31,966
----------
TOTAL COMMON STOCKS
(Cost $137,338) 186,975
----------
RELATED PARTY MONEY MARKET FUND -- 2.3%
First American Prime Obligations
Fund (B) 4,362,554 4,363
----------
TOTAL RELATED PARTY MONEY MARKET FUND
(Cost $4,363) 4,363
----------
TOTAL INVESTMENTS -- 100.6%
(Cost $141,701) 191,338
----------
OTHER ASSETS AND LIABILITIES, NET -- (0.6%)(C) (1,142)
----------
NET ASSETS:
Portfolio Capital--Class A
($.0001 par value--2 billion authorized)
based on 1,584,708 outstanding shares $ 22,895
Portfolio Capital--Class B
($.0001 par value--2 billion authorized)
based on 1,156,992 outstanding shares 19,520
Portfolio Capital--Class Y
($.0001 par value--2 billion authorized)
based on 7,402,064 outstanding shares 80,206
Accumulated net realized gain on investments 17,938
Net unrealized appreciation of investments 49,637
----------
TOTAL NET ASSETS -- 100.0% $ 190,196
----------
50 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
SMALL CAP FUNDS
REGIONAL EQUITY FUND (CONCLUDED)
DESCRIPTION VALUE
- ---------------------------------------------------------------------------
Net asset value and redemption price
per share--Class A $ 18.74
Maximum sales charge of 5.25% (D) 1.04
----------
Offering price per share--Class A $ 19.78
----------
Net asset value and offering price per
share--Class B (E) $ 18.08
----------
Net asset value, offering price, and redemption
price per share--Class Y $ 18.86
----------
* Non-income producing security
(A) Investments represent 5% or more of the outstanding voting securities of the
issuer, and is or was an affiliate, as defined in the Investment Company Act
of 1940 at or during the period ended September 30, 1999. See activity
below.
(B) This money market fund is advised by U.S. Bank National Association who also
serves as advisor for this fund. See also the notes to the financial
statements.
(C) Other assets and liabilities representing greater than 5% of total net
assets include the following (000):
Cash collateral received for securities on loan $ 19,272
Payable upon return of securities on loan $(19,272)
(D) The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 5.25%.
(E) Class B has a contingent deferred sales charge. For a description of a
possible redemption charge, see the notes to the financial statements.
Cl--Class
The activity for investments in Common Stocks of Affiliates is as follows:
Shares at Shares at Realized
Description 09/30/98 09/30/99 Difference Dividends Gains (Losses)
- --------------------------------------------------------------------------------
Aetrium 686,000 538,000 (148,000) -- $(1,010,028)
Alternate Postal
Delivery 210,000 -- -- -- --
BOLDER
Technologies 170,200 170,200 -- -- --
Norstan 551,300 405,000(+) (146,300) -- --
Sport-Haley Inc. 313,000 313,000 -- -- --
TSI 669,300 -- -- 85,824 227,205
- --------------------------------------------------------------------------------
10,849,800 9,676,200 (148,000) 85,824 $ (782,823)
+ At September 30, 1999 these securities were not considered affiliates.
The accompanying notes are an integral part of the financial statements.
SMALL CAP GROWTH FUND
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
COMMON STOCKS -- 93.3%
BASIC MATERIALS -- 2.8%
Cambrex 143,200 $ 3,786
OM Group 106,725 4,096
----------
7,882
----------
CAPITAL GOODS -- 7.7%
Advanced Energy Industries* 84,900 2,621
Dycom Industries* 79,700 3,362
Musicmaker.com* 134,700 1,389
Power-One* 109,800 2,800
Quanta Services* 114,000 3,342
Sanmina* 35,500 2,747
Spartech 126,450 3,707
Terex* 60,900 1,918
----------
21,886
----------
COMMUNICATION SERVICES -- 2.7%
MGC Communications* 80,600 1,672
Network Plus* 80,900 1,117
Powerwave Technologies* 103,200 4,976
----------
7,765
----------
CONSUMER CYCLICALS -- 9.9%
99 Cents Only Stores* 101,612 3,671
Creditrust* 108,750 2,440
Davids Bridal* 222,800 1,657
Education Management* 117,500 1,454
Fred's, Cl A 219,900 2,708
Freeshop.com* 78,600 904
G. & K. Services 78,100 3,163
Getty Images* 145,600 3,513
Linens N Things* 107,875 3,641
Navigant Consulting* 30,400 1,410
O'Reilly Automotive* 36,600 1,744
Regis 20,000 385
Steven Madden Limited* 106,600 1,379
----------
28,069
----------
CONSUMER STAPLES -- 10.6%
Acme Communications* 19,100 592
AMFM* 91,587 5,575
Cinar Films, Cl B* 133,000 4,023
Citadel Communications* 79,500 2,713
Duane Reade* 101,300 3,052
Entercom Communications* 39,800 1,433
ImageX.com* 100,200 1,121
P.F Changs China Bistro* 147,200 3,183
Priority Healthcare, CL B* 95,850 2,959
Quokka Sports* 56,000 389
Tivo* 500 15
U.S. Foodservice* 276,000 4,968
----------
30,023
----------
51 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
STATEMENTS OF
NET ASSETS SEPTEMBER 30, 1999
SMALL CAP GROWTH FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
ENERGY -- 4.5%
Evergreen Resources* 155,000 $ 3,730
Newfield Exploration* 129,600 4,269
Tuboscope* 127,900 1,591
Varco International* 126,500 1,542
Veritas DGC* 80,100 1,542
----------
12,674
----------
FINANCIALS -- 6.2%
Affiliated Managers Group* 82,400 2,245
ARM Financial Group, Cl A 130,000 12
Commerce Bancorp New Jersey 96,267 3,995
Community First Bankshares 142,300 2,401
Financial Federal* 139,000 2,624
Firstmerit 122,000 3,096
Radian Group 74,700 3,207
----------
17,580
----------
HEALTH CARE -- 4.4%
ATS Medical* 145,075 1,442
Barr Laboratories* 82,700 2,626
Cyberonics* 102,200 1,827
Express Scripts, Cl A* 63,800 4,992
Noven Pharmaceuticals* 193,100 1,641
----------
12,528
----------
TECHNOLOGY -- 42.4%
Advent Software* 55,012 3,424
Agile Software* 24,100 1,542
Aironet Wireless Communications* 134,500 2,824
Applied Micro Circuits* 65,900 3,756
Ask Jeeves* 27,775 958
Bluestone Software* 64,500 1,492
Burr-Brown* 71,500 2,824
C-Cube Microsystems* 60,200 2,619
Cobalt Group* 165,300 1,596
Concentric Network* 53,400 1,085
Concour Technologies* 90,700 2,585
Cymer* 102,900 3,569
DSP Communications* 80,500 1,530
E-Tek Dynamics* 51,625 2,801
Egain Communication* 64,200 1,188
F5 Networks* 31,900 2,169
Globix* 36,400 1,702
Great Plains Software* 29,200 1,504
Inet Technologies* 43,000 1,716
Interactive Intelligence* 38,000 874
InterVU* 42,475 1,577
Kana Communications* 22,500 1,122
L-3 Communications* 64,900 2,450
Luminant Worldwide* 55,200 1,697
Mercury Interactive* 64,500 4,164
Micrel* 106,200 4,606
Micromuse* 40,875 2,626
MMC Networks* 72,000 2,246
Mpath Interactive* 90,700 1,043
National Computer Systems 126,100 4,835
Packeteer* 28,500 971
SMALL CAP GROWTH FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
Paradyne Networks* 33,550 $ 939
Pegasus Systems* 74,925 2,810
Peregrine Systems* 132,700 5,408
Persistence Software* 114,100 3,259
PRI Automation* 92,975 3,359
Primus Knowledge Solutions* 79,400 2,188
Project Software & Development* 15,000 803
Qiagen* 122,000 5,200
Remedy* 60,650 1,721
SalesLogix* 115,200 2,304
Sawtek* 78,000 2,730
SilverStream Software* 48,200 1,500
Telemate.Net Software* 129,100 1,807
Transwitch* 94,425 5,382
TSI International Software Limited* 134,325 3,644
Verity* 42,425 2,919
Watchguard Technologies* 79,500 1,193
Whittman-Hart* 101,175 3,924
----------
120,185
----------
TRANSPORTATION -- 2.1%
C.H. Robinson Worldwide 125,300 4,221
Cheap Tickets* 51,100 1,654
----------
5,875
----------
TOTAL COMMON STOCKS
(Cost $227,534) 264,467
----------
RELATED PARTY MONEY MARKET FUND -- 9.6%
First American Prime Obligations
Fund (A) 27,210,432 27,210
----------
TOTAL RELATED PARTY MONEY MARKET FUND
(Cost $27,210) 27,210
----------
TOTAL INVESTMENTS -- 102.9%
(Cost $254,744) 291,677
----------
OTHER ASSETS AND LIABILITIES, NET -- (2.9%)(B) (8,269)
----------
NET ASSETS:
Portfolio Capital--Class A
($.0001 par value--2 billion authorized)
based on 1,920,296 outstanding shares $ 19,039
Portfolio Capital--Class B
($.0001 par value--2 billion authorized)
based on 138,013 outstanding shares 1,924
Portfolio Capital--Class C
($.0001 par value--2 billion authorized)
based on 18,554 outstanding shares 282
Portfolio Capital--Class Y
($.0001 par value--2 billion authorized)
based on 14,698,999 outstanding shares 195,025
Accumulated net realized gain on investments 30,205
Net unrealized appreciation of investments 36,933
----------
TOTAL NET ASSETS -- 100.0% $ 283,408
----------
52 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
SMALL CAP FUNDS
SMALL CAP GROWTH FUND (CONCLUDED)
DESCRIPTION VALUE
- ---------------------------------------------------------------------------
Net asset value and redemption price
per share--Class A $ 16.77
Maximum sales charge of 5.25% (C) 0.93
----------
Offering price per share--Class A $ 17.70
----------
Net asset value and offering price
per share--Class B (D) $ 16.07
----------
Net asset value price per share--Class C (E) $ 16.68
Maximum sales charge of 1.00% (F) 0.17
----------
Offering price per share--Class C $ 16.85
----------
Net asset value, offering price, and redemption
price per share--Class Y $ 16.92
----------
* Non-income producing security
(A) This money market fund is advised by U.S. Bank National Association who also
serves as advisor for this fund. See also the notes to the financial
statements.
(B) Other assets and liabilities representing greater than 5% of total net
assets include the following (000):
Cash collateral received for securities on loan $ 58,150
Payable upon return of securities on loan $(58,150)
(C) The offering price is calcluated by dividing the net asset value by 1 minus
the maximum sales charge of 5.25%.
(D) Class B has a contingent deferred sales charge. For a description of a
possible redemption charge, see the notes to the financial statements.
(E) Class C has a contingent deferred sales charge. For a description of a
possible redemption charge, see the notes to the financial statements.
(F) The offering price is calcluated by dividing the net asset value by 1 minus
the maximum sales charge of 1.00%.
Cl--Class
The accompanying notes are an integral part of the financial statements.
SMALL CAP VALUE FUND
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
COMMON STOCKS -- 95.3%
BASIC MATERIALS -- 3.6%
AFC Cable Systems* 99,900 $ 4,246
Cadiz* 119,200 1,140
Matthews International, Cl A 125,300 3,775
Northwest Pipe* 180,000 2,812
----------
11,973
----------
CAPITAL GOODS -- 14.1%
Alliant Techsystems* 93,500 6,481
Advanced Energy Industries* 52,600 1,624
BE Aerospace* 107,900 1,288
BWay* 150,000 1,491
Casella Waste Systems, Cl A* 113,400 1,892
Cognex* 30,400 918
Dayton Superior, Cl A* 195,000 3,315
DII Group* 97,500 3,431
Dupont Photomasks* 32,000 1,474
Electro Scientific Industries* 20,100 1,071
L.B. Foster, Cl A* 253,800 1,221
MagneTek* 321,487 2,873
Moog, Cl A* 259,200 7,484
Newpark Resources* 479,600 3,717
Pentair 83,100 3,334
Thomas Industries 87,150 1,629
Tredegar Industries 58,400 1,248
Willis Lease Finance* 165,100 2,177
----------
46,668
----------
CONSUMER CYCLICALS -- 17.1%
Acxiom* 58,140 1,143
Applied Graphics Technologies* 190,500 1,643
Burns International Services* 300,000 4,837
Davids Bridal* 208,900 1,554
Dollar Thrifty Automotive* 87,700 1,814
DR Horton 229,075 2,964
Dura Automotive Systems* 219,600 5,284
Edelbrock* 106,200 1,527
Huffy 91,000 899
K-Swiss, Cl A 29,300 925
Midway Games* 71,700 1,129
Modtech Holdings* 64,700 477
Park Ohio Holdings* 227,300 2,841
Piercing Pagoda* 122,250 1,589
PolyMedica* 205,700 4,782
Quaker Fabric* 310,000 1,356
Regis 283,150 5,451
Service Experts* 200,500 2,080
Simpson Manufacturing* 44,100 2,067
Staff Leasing* 101,300 1,013
Stanley Furniture* 233,400 4,931
Synthetic Industries* 120,400 3,296
Tarrant Apparel Group* 40,700 458
TRO Learning* 212,200 1,220
Whitehall Jewellers* 56,200 1,616
----------
56,896
----------
53 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
STATEMENTS OF
NET ASSETS SEPTEMBER 30, 1999
SMALL CAP VALUE FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
CONSUMER STAPLES -- 5.2%
Avado Brands 281,700 $ 1,585
Buenos Aires Emb-spons, ADR* 6,274 --
Buffets* 120,400 1,400
Drug Emporium* 141,900 958
Merrill 152,000 3,030
Performance Food Group* 96,800 2,480
Topps* 465,600 3,492
Suiza Foods* 113,900 4,271
----------
17,216
----------
ENERGY -- 5.7%
Atwood Oceanic* 42,000 1,284
Basin Exploration* 148,500 3,564
Chieftan International* 86,000 1,634
Core Laboratories N.V.* 38,800 730
Forest Oil* 298,800 5,098
Newfield Exploration* 109,000 3,590
Veritas DGC* 152,000 2,926
----------
18,826
----------
FINANCIALS -- 17.8%
Astoria Financial 64,700 1,989
Chelsea GCA Realty 98,900 3,128
Community First Bankshares 102,800 1,735
Dain Rauscher 50,000 2,450
Enhance Financial Services Group 221,700 3,921
Farm Family Holdings* 59,900 2,366
First Republic Bank* 183,000 4,849
Franchise Mortgage Acceptance* 400,000 2,850
Highwoods Properties, REIT 92,700 2,399
Lexington Corporate Properties, REIT 178,600 1,998
Penn Treaty American* 131,700 2,749
Philadelphia Consolidated Holding* 198,200 2,676
Prism Financial* 72,000 720
Radian Group 182,415 7,832
Roslyn Bancorp 305,040 5,453
Southwest Bancorp of Texas* 112,900 1,969
UST 146,530 4,506
Walden Residential Properties, REIT 109,200 2,382
Webster Financial 127,904 3,262
----------
59,234
----------
HEALTH CARE -- 10.1%
Catalytica* 682,033 10,230
Cooper 217,400 6,712
Lifecore Biomedical* 108,700 1,495
Mentor 168,900 4,814
Parexel International* 197,600 1,803
Res-Care* 184,600 3,138
Respironics* 202,200 1,668
Spacelabs Medical* 115,600 1,748
Total Renal Care Holdings* 281,900 2,097
----------
33,705
----------
TECHNOLOGY -- 17.0%
Actel* 206,500 3,923
Bell & Howell* 187,800 6,890
Comdial* 48,700 353
SMALL CAP VALUE FUND (CONTINUED)
DESCRIPTION SHARES/PAR (000) VALUE (000)
- ---------------------------------------------------------------------------
Digital Microwave* 294,800 $ 4,625
DSP Communications* 173,900 3,304
Etec Systems* 26,600 1,001
FEI* 131,600 995
Gatefield* 53,760 336
Inacom* 212,752 1,955
Innovex 19,300 174
Inprise* 32,600 133
J.D. Edwards & Company* 55,000 1,140
National Computer Systems 130,000 4,985
Neomagic* 104,400 809
Network Equipment Technology* 140,500 1,291
NOVA* 67,774 1,694
Pioneer-Standard Electronics 187,600 2,708
Pomeroy Computer Resources* 75,500 835
Project Software & Development* 84,800 4,537
Radisys* 211,600 8,305
Remec* 127,500 1,753
Sapiens International* 170,300 1,895
System Software Associates* 150,000 291
Triple P N.V.* 727,260 1,454
Visio* 31,000 1,217
----------
56,603
----------
TRANSPORTATION -- 1.0%
Nordic American Tanker Shipping 278,000 3,336
----------
UTILITIES -- 3.7%
El Paso Electric* 250,000 2,250
TNP Enterprises 65,000 2,531
Unisource Energy Holding* 630,000 7,442
----------
12,223
----------
TOTAL COMMON STOCKS
(Cost $265,579) 316,680
----------
CONVERTIBLE BONDS -- 2.5%
Drug Emporium, 65.1466 shares
7.750%, 10/01/14 $ 740 522
Titan, 285.7143 shares
8.250%, 11/01/03 1,935 7,671
----------
TOTAL CONVERTIBLE BONDS
(Cost $2,541) 8,193
----------
RELATED PARTY MONEY MARKET FUND -- 3.3%
First American Prime Obligations
Fund (A) 11,007,780 11,008
----------
TOTAL RELATED PARTY MONEY MARKET FUND
(Cost $11,008) 11,008
----------
TOTAL INVESTMENTS -- 101.1%
(Cost $279,128) 335,881
----------
OTHER ASSETS AND LIABILITIES, NET -- (1.1%)(B) (3,441)
----------
54 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
SMALL CAP FUNDS
SMALL CAP VALUE FUND (CONCLUDED)
DESCRIPTION VALUE (000)
- ---------------------------------------------------------------------------
NET ASSETS:
Portfolio Capital--Class A
($.0001 par value--2 billion authorized)
based on 830,009 outstanding shares $ 10,363
Portfolio Capital--Class B
($.0001 par value--2 billion authorized)
based on 72,968 outstanding shares 1,126
Portfolio Capital--Class C
($.0001 par value--2 billion authorized)
based on 8,362 outstanding shares 112
Portfolio Capital--Class Y
($.0001 par value--2 billion authorized)
based on 22,865,065 outstanding shares 262,560
Distributions in excess of net investment income (1)
Accumulated net realized gain on investments 1,527
Net unrealized appreciation of investments 56,753
----------
TOTAL NET ASSETS -- 100.0% $ 332,440
----------
Net asset value and redemption price
per share--Class A $ 13.94
Maximum sales charge of 5.25% (C) 0.77
----------
Offering price per share--Class A $ 14.71
----------
Net asset value and offering price
per share--Class B (D) $ 13.77
----------
Net asset value price per share--Class C (E) $ 13.87
Maximum sales charge of 1.00% (F) 0.14
----------
Offering price per share--Class C $ 14.01
----------
Net asset value, offering price, and redemption
price per share--Class Y $ 13.98
----------
* Non-income producing security
(A) This money market fund is advised by U.S. Bank National Association who also
serves as advisor for this fund. see also the notes to the financial
statements.
(B) Other assets and liabilities representing greater than 5% of total net
assets include the following (000):
Cash collateral received for securities on loan $ 33,840
Payable upon return of securities on loan $(33,840)
(C) The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 5.25%.
(D) Class B has a contingent deferred sales charge. For a description of a
possible redemption charge, see the notes to the financial statements.
(E) Class C has a contingent deferred sales charge. For a description of a
possible redemption charge, see the notes to the financial statements.
(F) The offering price is calcluated by dividing the net asset value by 1 minus
the maximum sales charge of 1.00%.
ADR--American Depository Receipt
Cl--Class
REIT--Real Estate Investment Trust
The accompanying notes are an integral part of the financial statements.
55 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
THIS PAGE WAS INTENTIONALLY LEFT BLANK.
56 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
SMALL CAP FUNDS
STATEMENTS OF
OPERATIONS FOR THE YEAR ENDED SEPTEMBER 30, 1999,
IN THOUSANDS
<TABLE>
<CAPTION>
MICRO CAP REGIONAL SMALL CAP SMALL CAP
VALUE FUND EQUITY FUND GROWTH FUND VALUE FUND
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 305+ $ 458+ $ 1,032+ $ 1,099+
Dividends 660 1,658* 629 2,410
- ----------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 965 2,116 1,661 3,509
================================================================================================================
EXPENSES:
Investment advisory fees 637 1,689 1,576 2,549
Less: Waiver of investment advisory fees (4) (144) (29) (20)
Administrator fees 99 263 245 397
Transfer agent fees 39 246 114 100
Amortization of Organizational Costs 1 -- -- --
Custodian fees 27 72 67 109
Directors' fees 1 4 3 6
Registration fees 4 10 10 15
Professional fees 3 8 8 13
Printing 6 15 14 22
Distribution fees - Class A 3 70 81 31
Distribution fees - Class B 2 266 17 9
Distribution fees - Class C -- -- 1 --
Other 4 9 9 13
- ----------------------------------------------------------------------------------------------------------------
TOTAL NET EXPENSES 822 2,508 2,116 3,244
================================================================================================================
Investment income (loss) - net 143 (392) (455) 265
- ----------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS - NET:
Net realized gain on investments 8,251 24,159* 32,724 5,700
Net change in unrealized appreciation/depreciation of
investments 3,388 21,890* 37,636 33,198
- ----------------------------------------------------------------------------------------------------------------
NET GAIN ON INVESTMENTS 11,639 46,049 70,360 38,898
================================================================================================================
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ 11,782 $ 45,657 $ 69,905 $ 39,163
================================================================================================================
</TABLE>
+ Includes income from securities lending program. See the Notes to the
Financial Statements for additional information.
* Includes the following amounts from investments in Common Stock of
Affiliates (000): $(0) of dividend income, $(783) of realized loss on
investments, and $1,280 of unrealized appreciation of investments.
The accompanying notes are an integral part of the financial statements.
57 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
STATEMENTS OF
CHANGES IN NET ASSETS IN THOUSANDS
<TABLE>
<CAPTION>
MICRO CAP REGIONAL SMALL CAP
VALUE FUND(A) EQUITY FUND GROWTH FUND
- -----------------------------------------------------------------------------------------------------------------------------------
10/1/98 10/1/97 10/1/98 10/1/97 10/1/98 10/1/97
to to to to to to
9/30/99 9/30/98 9/30/99 9/30/98 9/30/99 9/30/98
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Investment income (loss) - net $ 143 $ 423 $ (392) $ 185 $ (455) $ (260)
Net realized gain (loss) on investments 8,251 27,875 24,159 20,276 32,724 (5,101)
Net change in unrealized appreciation/depreciation
of investments 3,388 (77,385) 21,890 (117,589) 37,636 (24,055)
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations 11,782 (49,087) 45,657 (97,128) 69,905 (29,416)
- -----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment income - net:
Class A (1) -- -- -- -- --
Class B -- -- -- -- -- --
Class C -- -- -- -- -- --
Class Y (198) (371) -- (184) -- --
Net realized gain on investments:
Class A (345) (15) (1,806) (1,388) (46) (5,302)(B)
Class B - FAIF (48) (7) (2,155) (1,723) (2) --
Class B - Piper -- -- -- -- -- (10)(B)
Class C -- -- -- -- -- --
Class Y (26,093) (12,784) (15,562) (12,883) (171) --
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS (26,685) (13,177) (19,523) (16,178) (219) (5,312)
===================================================================================================================================
CAPITAL SHARE TRANSACTIONS(1):
Class A
Proceeds from sales 1,238 5,879 23,268 11,530 50,619 24,836
Shares issued in connection with acquisition of Piper Fund -- -- -- -- -- 5,802
Reinvestment of distributions 171 9 1,738 1,324 54 5,164
Payments for redemptions (826) (4,491) (24,518) (14,563) (58,336) (31,425)
- -----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from Class A
transactions 583 1,397 488 (1,709) (7,663) 4,377
- -----------------------------------------------------------------------------------------------------------------------------------
Class B
Proceeds from sales - FAIF 30 215 472 5,492 1,003 62
Proceeds from sales - Piper -- -- -- -- -- 586
Shares issued in connection with acquisition of Piper Fund -- -- -- -- -- 1,306
Reinvestment of distributions - FAIF 48 7 2,125 1,684 2 --
Reinvestment of distributions - Piper -- -- -- -- -- 10
Payments for redemptions - FAIF (341) (8) (13,689) (5,532) (415) (47)
Payment for redemptions - Piper -- -- -- -- -- (1,125)
- -----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from Class B transactions (263) 214 (11,092) 1,644 590 792
- -----------------------------------------------------------------------------------------------------------------------------------
Class C
Proceeds from sales -- -- -- -- 283 --
Reinvestment of distributions -- -- -- -- -- --
Payment for redemptions -- -- -- -- (1) --
- -----------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from Class C transactions -- -- -- -- 282 --
- -----------------------------------------------------------------------------------------------------------------------------------
Class Y
Proceeds from sales 8,578 13,564 26,067 92,606 119,832 7,699
Shares issued in connection with acquisition
of Piper Fund -- -- -- -- -- 146,984
Reinvestment of distributions 3,941 6,055 12,110 9,959 50 --
Payments for redemptions (77,250) (60,217) (143,759) (137,313) (42,599) (18,021)
- -----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from Class Y transactions (64,731) (40,598) (105,582) (34,748) 77,283 136,662
- -----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital share
transactions (64,411) (38,987) (116,186) (34,813) 70,492 141,831
- -----------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets (79,314) (101,251) (90,052) (148,119) 140,178 107,103
NET ASSETS AT BEGINNING OF PERIOD 145,444 246,695 280,248 428,367 143,230 36,127
===================================================================================================================================
NET ASSETS AT END OF PERIOD (2) $ 66,130 $145,444 $190,196 $280,248 $283,408 $143,230
===================================================================================================================================
</TABLE>
(1) See note 4 in the notes to financial statements for additional information.
(2) Includes undistributed (distributions in excess of) net investment income
(000) of $0 and $52 for Micro Cap Value Fund, $0 and $0 for Regional Equity
Fund, $0 and $0 for Small Cap Growth Fund, $(1), $231 and $(150), for Small
Cap Value Fund, at September 30, 1999, September 30, 1998, and November 30,
1997, respectively.
(A) The Micro Cap Value Fund Class B discontinued operations on September 24,
1999. All shareholders were transferred to Class A.
(B) Included in the distributions for the Small Cap Growth Fund is a return of
capital distribution in the amount of $5,311,630 for Class A and $370 for
Class B - Piper.
(C) The Statements of Changes in Net Assets for the Small Cap Value Fund reflect
the change of the Fund's year end from July 31st, to November 30th, and then
to September 30th.
The accompanying notes are an integral part of the financial statements.
58 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
SMALL CAP FUNDS
<TABLE>
<CAPTION>
SMALL CAP
VALUE FUND(C)
- --------------------------------------------
10/1/98 12/1/97 8/1/97
to to to
9/30/99 9/30/98 11/30/97
- --------------------------------------------
<S> <C> <C>
$ 265 $ 1,583 $ (114)
5,700 25,057 2,299
33,198 (116,183) 8,373
- --------------------------------------------
39,163 (89,543) 10,558
- --------------------------------------------
(7) (14) --
-- -- --
-- -- --
(554) (1,188) (93)
(1,046) (1,320) --
(58) (4) --
-- -- --
-- -- --
(29,702) (33,301) --
- --------------------------------------------
(31,367) (35,827) (93)
============================================
4,600 39,216 18,971
-- -- --
1,045 1,335 --
(7,771) (42,007) (22,884)
- --------------------------------------------
(2,126) (1,456) (3,913)
- --------------------------------------------
663 799 1
-- -- --
-- -- --
59 4 --
-- -- --
(350) (50) --
-- -- --
- --------------------------------------------
372 753 1
- --------------------------------------------
113 -- --
-- -- --
(1) -- --
- --------------------------------------------
112 -- --
- --------------------------------------------
127,190 213,258 117,751
-- -- --
27,244 32,778 82
(209,352) (219,000) (116,562)
- --------------------------------------------
(54,918) 27,036 1,271
- --------------------------------------------
(56,560) 26,333 (2,641)
- --------------------------------------------
(48,764) (99,037) 7,824
381,204 480,241 472,417
============================================
$ 332,440 $ 381,204 $ 480,241
============================================
</TABLE>
59 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
FINANCIAL HIGHLIGHTS FOR A SHARE OUTSTANDING, THROUGHOUT THE PERIODS
ENDED SEPTEMBER 30, UNLESS OTHERWISE INDICATED
<TABLE>
<CAPTION>
REALIZED AND
NET ASSET UNREALIZED DIVIDENDS DISTRIBUTIONS
VALUE NET GAINS OR FROM NET DISTRIBUTIONS FROM
BEGINNING INVESTMENT (LOSSES) ON INVESTMENT FROM RETURN OF
OF PERIOD INCOME (LOSS) INVESTMENTS INCOME CAPITAL GAINS CAPITAL
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
MICRO CAP VALUE FUND
Class A
1999 $ 7.95 $ -- $ 0.86 $ -- $ (1.79) $ --
1998 10.96 -- (2.42) -- (0.59) --
1997(1) 10.00 -- 0.96 -- -- --
Class B
1999(2) $ 7.84 $ (0.01) $ 0.74 $ -- $ (1.79) $ --
1998 10.95 (0.01) (2.51) -- (0.59) --
1997(1) 10.00 -- 0.95 -- -- --
Class Y
1999 $ 7.93 $ 0.01 $ 0.88 $ (0.01) $ (1.79) $ --
1998 10.95 0.02 (2.43) (0.02) (0.59) --
1997(1) 10.00 -- 0.95 -- -- --
- ----------------------------------------------------------------------------------------------------------
REGIONAL EQUITY FUND
Class A
1999 $ 16.68 $ (0.05) $ 3.34 $ -- $ (1.23) $ --
1998 23.12 -- (5.49) -- (0.95) --
1997 17.71 0.03 6.14 (0.07) (0.69) --
1996 17.12 0.04 1.70 (0.04) (1.11) --
1995 12.52 0.08 4.90 (0.06) (0.32) --
Class B
1999 $ 16.25 $ (0.23) $ 3.29 $ -- $ (1.23) $ --
1998 22.72 (0.04) (5.48) -- (0.95) --
1997 17.47 (0.03) 5.97 -- (0.69) --
1996 16.99 (0.04) 1.64 (0.01) (1.11) --
1995 12.50 0.04 4.80 (0.03) (0.32) --
Class Y
1999 $ 16.74 $ (0.01) $ 3.36 $ -- $ (1.23) $ --
1998 23.16 0.01 (5.46) (0.02) (0.95) --
1997 17.75 0.05 6.18 (0.13) (0.69) --
1996 17.13 0.09 1.70 (0.06) (1.11) --
1995 12.52 0.11 4.90 (0.08) (0.32) --
- -----------------------------------------------------------------------------------------------------------
</TABLE>
+ Returns are for the period indicated and have not been annualized.
(A) Excluding sales charges.
(1) Commenced operations August 7, 1997. All ratios for the period have been
annualized.
(2) Effective September 24, 1999, all shareholders were exchanged into Class A.
Class B share activity was discontinued. All ratios for the period have been
annualized.
60 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
SMALL CAP FUNDS
<TABLE>
<CAPTION>
RATIO OF
RATIO OF NET EXPENSES TO
NET ASSET RATIO OF INVESTMENT AVERAGE
VALUE NET ASSETS EXPENSES TO INCOME (LOSS) NET ASSETS PORTFOLIO
END OF TOTAL END OF AVERAGE TO AVERAGE (EXCLUDING TURNOVER
PERIOD RETURN (A) PERIOD (000) NET ASSETS NET ASSETS WAIVERS) RATE
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 7.02 12.05% $ 1,401 1.15% (0.33)% 1.15% 21%
7.95 (22.77) 1,110 1.13 (0.09) 1.13 16
10.96 9.60+ 44 1.15 (0.25) 1.32 0
$ 6.78 10.06%+ $ -- 1.90% 0.68% 1.90% 21%
7.84 (23.78) 206 1.88 (0.78) 1.88 16
10.95 9.50+ 50 1.90 (1.04) 2.07 0
$ 7.02 12.55% $ 64,729 0.90% 0.17% 0.90% 21%
7.93 (22.76) 144,128 0.88 0.21 0.88 16
10.95 9.50+ 246,601 0.90 (0.02) 1.07 0
- ---------------------------------------------------------------------------------------------------------
$ 18.74 20.12% $ 29,702 1.15% (0.26)% 1.21% 19%
16.68 (24.54) 25,706 1.15 (0.08) 1.16 15
23.12 36.13 37,677 1.15 0.11 1.15 17
17.71 10.97 25,325 1.13 0.24 1.15 36
17.12 41.17 14,917 1.05 0.58 1.20 42
$ 18.08 19.19% $ 20,922 1.90% (1.03)% 1.96% 19%
16.25 (25.12) 29,481 1.90 (0.83) 1.91 15
22.72 35.18 39,683 1.90 (0.65) 1.90 17
17.47 10.14 27,671 1.88 (0.52) 1.90 36
16.99 39.98 7,630 1.84 (0.25) 1.95 42
$ 18.86 20.42% $139,572 0.90% (0.03)% 0.96% 19%
16.74 (24.34) 225,061 0.90 0.17 0.91 15
23.16 36.49 351,007 0.90 0.35 0.90 17
17.75 11.27 259,138 0.88 0.49 0.90 36
17.13 41.40 188,583 0.84 0.78 0.95 42
- ---------------------------------------------------------------------------------------------------------
</TABLE>
61 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
FINANCIAL HIGHLIGHTS FOR A SHARE OUTSTANDING, THROUGHOUT THE PERIODS
ENDED SEPTEMBER 30, UNLESS OTHERWISE INDICATED
<TABLE>
<CAPTION>
REALIZED AND
NET ASSET UNREALIZED DIVIDENDS DISTRIBUTIONS
VALUE NET GAINS OR FROM NET DISTRIBUTIONS FROM
BEGINNING INVESTMENT (LOSSES) ON INVESTMENT FROM RETURN OF
OF PERIOD INCOME (LOSS) INVESTMENTS INCOME CAPITAL GAINS CAPITAL
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SMALL CAP GROWTH FUND
Class A(1)
1999 $ 11.90 $ (0.06) $ 4.95 $ -- $ (0.02) $ --
1998 17.41 (0.09) (2.67) -- (2.64) (0.11)
1997 17.11 (0.16) 5.66 (0.04) (5.16) --
1996(2) 17.68 0.06 0.87 (0.07) (1.43) --
1995 15.61 0.09 2.07 (0.09) -- --
Class B - FAIF
1999 $ 11.50 $ (0.14) $ 4.73 $ -- $ (0.02) $ --
1998(3) 13.74 (0.02) (2.22) -- -- --
Class B - Piper
1998(4) $ 9.54 $ (0.09) $ 0.42 $ -- $ (0.15) $ (0.01)
1997(5) 7.24 (0.03) 2.33 -- -- --
Class C
1999(6) $ 15.48 $ (0.08) $ 1.28 $ -- $ -- $ --
Class Y
1999 $ 11.98 $ (0.02) $ 4.98 $ -- $ (0.02) $ --
1998(3) 14.29 -- (2.31) -- -- --
- ---------------------------------------------------------------------------------------------------------------------
SMALL CAP VALUE FUND(B)
Class A
1999 $ 13.58 $ 0.01 $ 1.47 $ (0.01) $ (1.11) $ --
1998(7) 18.20 0.04 (3.38) (0.01) (1.27) --
1997(8) 17.86 (0.03) 0.37 -- -- --
1997(9) 13.95 0.01 5.43 (0.01) (1.52) --
1996(9) 13.23 0.04 1.83 (0.04) (1.11) --
1995(9)(10) 10.00 0.09 3.29 (0.10) (0.05) --
Class B
1999 $ 13.53 $ 0.02 $ 1.33 $ -- $ (1.11) $ --
1998(7) 18.23 0.01 (3.43) (0.01) (1.27) --
1997(11)(12) 18.22 -- 0.01 -- -- --
Class C
1999(6) $ 13.48 $ 0.01 $ 0.38 $ -- $ -- $ --
Class Y
1999 $ 13.60 $ 0.01 $ 1.50 $ (0.02) $ (1.11) $ --
1998(7) 18.23 0.06 (3.38) (0.04) (1.27) --
1997(8) 17.87 (0.01) 0.37 -- -- --
1997(9) 13.96 0.04 5.43 (0.04) (1.52) --
1996(9) 13.26 0.06 1.81 (0.06) (1.11) --
1995(9)(10) 10.00 0.13 3.30 (0.12) (0.05) --
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Returns are for the period indicated and have not been annualized.
(A) Excluding sales charges.
(B) The financial highlights for Small Cap Value Fund as set forth herein
include the historical financial highlights of the Qualivest Small Companies
Fund Class A and Class Y shares. The assets of the Small Companies Fund were
acquired by Small Cap Value Fund on November 21, 1997. In connection with
such acquisition, (i) Class A and Class C shares of the Qualivest Small
Companies Value Fund were exchanged for Class A shares of Small Cap Value
Fund; and (ii) Qualivest Class Y shares were exchanged for Class Y shares of
Small Cap Value Fund.
(1) Historical per-share amounts have been adjusted to reflect the conversion
ratios utilized for the reorganization of the FAIF Small Cap Growth Fund and
the Piper Small Company Growth Fund, that occurred on July 31, 1998. Piper
Small Company Growth Fund is the financial reporting survivor. Therefore,
the financial highlights for the Small Cap Growth Fund represent the
financial highlights information of the former Piper Small Company Growth
Fund. On July 31, 1998, the fund's advisor changed from Piper Capital
Management, Inc. to U.S. Bank N.A.
(2) On September 12, 1996, shareholders of the Fund approved a change in the
Fund's investment objective from high total investment return consistent
with prudent investment risk to long-term capital appreciation. In
connection with this change in investment objective, the Fund's investment
policies were revised.
(3) Class Y and Class B shares have been offered since July 31, 1998. There is
no historical information for these Classes of Piper Small Company Growth
Fund prior to the reorganization on July 31, 1998. All ratios for the period
have been annualized.
(4) Effective April 28, 1998, all shareholders were exchanged into Class A.
Class B share activity was discontinued. All ratios for the period have been
annualized.
(5) Class B Piper Shares have been offered since February 18, 1997. All ratios
for the period have been annualized.
(6) For the period ended September 30. Class C shares have been offered since
February 1, 1999. All ratios for the period have been annualized.
(7) For the period December 1, 1997 to September 30, 1998. All ratios for the
period have been annualized. The First American board of directors approved
a change in the fund's fiscal year end from November 30 to September 30,
effective September 30, 1998.
(8) For the period August 1, 1997, to November 30, 1997. All ratios for the
period have been annualized. The First American board of directors approved
a change in the fund's fiscal year end from July 31 to November 30,
effective November 30, 1997.
(9) For the period ended July 31.
(10)Commenced operations August 1, 1994. All ratios for the period have been
annualized.
(11)Class B shares have been offered since November 24, 1997. All ratios for
the period have been annualized.
(12)For the period November 24, 1997, to November 30, 1997.
62 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
SMALL CAP FUNDS
<TABLE>
<CAPTION>
RATIO OF
RATIO OF NET EXPENSES TO
NET ASSET RATIO OF INVESTMENT AVERAGE
VALUE NET ASSETS EXPENSES TO INCOME (LOSS) NET ASSETS PORTFOLIO
END OF TOTAL END OF AVERAGE TO AVERAGE (EXCLUDING TURNOVER
PERIOD RETURN (A) PERIOD (000) NET ASSETS NET ASSETS WAIVERS) RATE
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 16.77 41.11% $ 32,203 1.14% (0.39)% 1.15% 110%
11.90 (18.66) 28,252 1.29 (0.61) 1.43 92
17.41 45.66 35.647 1.34 (0.75) 1.98 109
17.11 5.38 30,968 1.32 0.20 1.79 125
17.68 13.88 48,421 1.40 0.43 1.63 182
$ 16.07 39.92% $ 2,217 1.90% (1.16)% 1.91% 110%
11.50 (16.30)+ 1,104 1.90 (1.20) 1.90 92
$ 9.71 3.61%+ $ -- 2.03% (1.30)% 2.40% 56%
9.54 31.77 + 480 1.98 (1.49) 2.15 109
$ 16.68 7.75%+ $ 309 1.90% (1.18)% 1.91% 110%
$ 16.92 41.42% $248,679 0.90% (0.16)% 0.91% 110%
11.98 (16.17)+ 113,874 0.90 (0.20) 0.90 92
- ---------------------------------------------------------------------------------------------------------
$ 13.94 11.12% $ 11,567 1.14% (0.17)% 1.14% 44%
13.58 (19.48)+ 13,551 1.13 0.15 1.13 21
18.20 1.90 + 19,194 1.37 (0.38) 1.37 3
17.86 41.71 22,429 1.31 0.01 1.31 29
13.95 14.93 10,247 1.33 0.14 1.33 34
13.23 34.29 + 1,569 1.11 0.63 1.38 37
$ 13.77 10.16% $ 1,005 1.89% (0.93)% 1.89% 44%
13.53 (19.91)+ 618 1.88 (0.53) 1.88 21
18.23 0.05 + 1 1.90 (1.53) 1.90 3
$ 13.87 2.89%+ $ 116 1.89% (1.04)% 1.89% 44%
$ 13.98 11.36% $319,752 0.89% 0.08% 0.89% 44%
13.60 (19.31)+ 367,035 0.88 0.40 0.88 21
18.23 2.01 + 461,046 1.06 (0.06) 1.06 3
17.87 41.96 449,988 1.06 0.25 1.06 29
13.96 14.94 297,793 1.08 0.41 1.08 34
13.26 34.76 + 209,626 0.60 1.20 1.17 37
- ---------------------------------------------------------------------------------------------------------
</TABLE>
63 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
INTERNATIONAL FUNDS
EMERGING MARKETS
INVESTMENT OBJECTIVE
SEEKS LONG-TERM CAPITAL GROWTH BY INVESTING PRIMARILY IN AN
INTERNATIONALLY DIVERSIFIED PORTFOLIO OF EQUITY SECURITIES TRADING IN
EMERGING MARKETS
The fourth quarter of 1998 was a tumultuous period for emerging markets due to
the Asian financial crisis and its subsequent impact on Latin American markets.
However, Asia's battered economies staged a strong recovery throughout the year,
which helped boost fund performance. For the fiscal year ending September 30,
1999, the Emerging Markets Fund posted a 20.68% return.
At the height of the financial crisis, the fund assumed a more defensive posture
by repositioning portfolio assets toward European and Latin America markets. At
one point late in 1998, 50% of the fund's portfolio holdings were invested in
Europe's emerging markets, including Poland, Greece, Ireland and several Eastern
European markets. Yet as Asia's economies began to stabilize during the first
calendar quarter of 1999, the fund shifted holdings back to the Far East to take
advantage of improving stock values. Currently, 60% of the fund's holdings are
invested in Asian markets, with only 14% of its assets invested throughout
Europe.
Samsung Electronic, the world's leading semiconductor manufacturer, was a
portfolio standout due to the global strengthening of the semiconductor market.
Advanced Information Services, a Thai cellular operator, also performed
extremely well, benefiting from Thailand's economic recovery.
The outlook for the fund is extremely positive. Asian countries have initiated
important economic reforms and are poised to fare well in the future. Fund
holdings remain concentrated in Asian stocks to capture potential market gains
throughout the region.
VALUE OF A $10,000 INVESTMENT
[PLOT POINTS CHART]
<TABLE>
<CAPTION>
FIRST
FIRST AMERICAN FIRST MORGAN
AMERICAN EMERGING AMERICAN STANLEY MSCI LIPPER
EMERGING MARKETS EMERGING EMERGING EMERGING
MARKETS FUND, CLASS A MARKETS MARKETS MARKETS
FUND, CLASS A ADJUSTED FUND, CLASS Y FREE INDEX FUNDS AVERAGE
------------- -------- ------------- ---------- -------------
<S> <C> <C> <C> <C> <C>
11/1993 $10,000 $ 9,475 $10,000 $10,000 $10,000
9/1994 11,944 11,317 11,944 12,615 11,873
9/1995 7,315 6,931 7,315 10,378 9,860
9/1996 8,867 8,402 8,867 10,920 10,580
9/1997 11,038 10,459 11,038 11,637 12,649
9/1998 5,639 5,343 5,649 6,075 6,755
9/1999 6,806 6,448 6,836 9,508 9,635
</TABLE>
PAST PERFORMANCE OF THE FUND IS NOT INDICATIVE OF FUTURE PERFORMANCE.
ANNUALIZED PERFORMANCE SINCE
1 YEAR 3 YEAR 5 YEAR INCEPTION
- --------------------------------------------------------------------------------
Class A 20.68% -8.45% -10.64% -6.36%
- --------------------------------------------------------------------------------
Class A adjusted 14.36% -10.08% -11.60% -7.20%
- --------------------------------------------------------------------------------
Class B 20.00% - - -6.62%
- --------------------------------------------------------------------------------
Class B adjusted 15.00% - - -10.70%
- --------------------------------------------------------------------------------
Class Y* 21.00% -8.31% -10.56% -6.28%
- --------------------------------------------------------------------------------
Morgan Stanley MSCI Emerging Mkts 56.52% -4.51% -5.50% -0.86%
- --------------------------------------------------------------------------------
Lipper Emerging Markets 45.14% -5.98% -5.71% -2.99%
- --------------------------------------------------------------------------------
Past performance of the fund is not indicative of future performance.
The performance presented is that of a predecessor fund, Piper Emerging Markets
Growth Fund, which merged with First American Emerging Markets Fund on 8/7/98.
The inception date of the Class A shares is 11/9/93, the inception date of the
Class B shares is 8/7/98, and the inception date of the Class Y shares is
8/7/98. The performance reflected in the graph begins on 11/30/93. The
performance reflected in the table for Class A and Class Y begins on the
inception date of Class A shares and Class B shares begin on 8/7/98.
*The performance presented links the performance of Class A shares from
inception on 11/9/93 to 8/7/98 with the performance of Class Y shares after its
inception on 8/7/98. The cumulative since inception return for Class Y shares
from 8/7/98, is -5.66%.
Performance reflects voluntary fee waivers in effect. In absence of such fee
waivers, total returns would be reduced.
64 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
INTERNATIONAL FUNDS
INTERNATIONAL
INVESTMENT OBJECTIVE
SEEKS LONG-TERM CAPITAL GROWTH BY INVESTING IN AN INTERNATIONALLY
DIVERSE PORTFOLIO OF EQUITY SECURITIES TRADING OUTSIDE OF U.S. MARKETS
The fiscal year ended September 30, 1999, was both a volatile and rewarding
period throughout certain international markets. Although European markets
performed well during this period, Japan -- one of the fund's top country
holdings -- bottomed out late in 1998, followed by a sustained market rally
throughout 1999. As a result of Japan's upturn and stable European markets, the
International Fund earned a 32.16% return for the fiscal year.
As Japan began to emerge from its prolonged economic slump, fund managers
repositioned portfolio holdings from a concentration in European stocks to an
emphasis in Japanese stocks. Therefore, the fund was able to capitalize on the
resurgence of several technology-oriented Japanese companies.
Softbank, a Japanese Internet company with significant holdings in Yahoo and
E*Trade -- and one of the fund's top stock holdings -- was an excellent
performer in 1999. Fujitsu, another key portfolio holding, also performed
exceptionally well due to its position as Japan's largest information service
provider. In contrast, Glaxo Wellcome PLC, an international pharmaceutical
company that manufactures prescription medicines, experienced slowing earnings
growth in light of Medicare reform in the U.S.
In the coming year, we expect to see ongoing improvements within Japan's
economy, as the nation continues to emerge from a lengthy secular bear market.
And with our current emphasis on Japanese stocks, the fund is positioned to
generate stronger returns over time.
VALUE OF A $10,000 INVESTMENT
[PLOT POINTS CHART]
<TABLE>
<CAPTION>
FIRST
FIRST AMERICAN FIRST MORGAN
AMERICAN INTERNATIONAL AMERICAN STANLEY LIPPER
INTERNATIONAL FUND, CLASS A INTERNATIONAL MSCI EAFE INTERNATIONAL
FUND, CLASS A ADJUSTED FUND, CLASS Y INDEX FUNDS AVERAGE
------------- -------- ------------- ----- -------------
<S> <C> <C> <C> <C> <C>
4/1994 $10,000 $ 9,475 $10,000 $10,000 $10,000
9/1994 10,039 9,512 10,049 10,094 10,169
9/1995 10,108 9,578 10,128 10,679 10,544
9/1996 10,294 9,754 10,341 11,600 11,580
9/1997 13,386 12,683 13,483 13,014 13,769
9/1998 13,534 12,824 13,638 11,929 12,314
9/1999 17,887 16,948 18,057 15,621 15,983
</TABLE>
PAST PERFORMANCE OF THE FUND IS NOT INDICATIVE OF FUTURE PERFORMANCE.
ANNUALIZED PERFORMANCE SINCE
1 YEAR 3 YEAR 5 YEAR INCEPTION
- --------------------------------------------------------------------------------
Class A 32.16% 20.22% 12.25% 11.57%
- --------------------------------------------------------------------------------
Class A adjusted 25.18% 18.08% 11.03% 10.48%
- --------------------------------------------------------------------------------
Class B 31.06% 19.22% 11.33% 10.99%
- --------------------------------------------------------------------------------
Class B adjusted 26.06% 18.28% 11.07% 10.86%
- --------------------------------------------------------------------------------
Class C - - - 8.73%+
- --------------------------------------------------------------------------------
Class C adjusted - - - 6.68%+
- --------------------------------------------------------------------------------
Class Y 32.40% 20.41% 12.43% 11.70%
- --------------------------------------------------------------------------------
Morgan Stanley MSCI EAFE 30.95% 10.43% 9.13% 8.57%
- --------------------------------------------------------------------------------
Lipper International 27.64% 12.00% 9.98% 8.54%
- --------------------------------------------------------------------------------
Past performance of the fund is not indicative of future performance.
The inception date of the Class A shares is 4/7/94, the inception date of the
Class B shares is 8/15/94, the inception date of the Class C shares is 2/1/99,
and the inception date for the Class Y shares is 4/4/94. The performance
reflected in the graph begins on 4/30/94. The performance reflected in the table
for Class A and Class Y shares begins on the inception date of Class A shares
and Class B shares begin on 8/15/94.
+Cumulative since inception.
Performance reflects voluntary fee waivers in effect. In absence of such fee
waivers, total returns would be reduced.
65 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
INTERNATIONAL FUNDS
INTERNATIONAL INDEX
INVESTMENT OBJECTIVE
SEEKS TO PROVIDE INVESTMENT RESULTS THAT CORRESPOND WITH
THE PERFORMANCE OF THE MORGAN STANLEY MSCI EAFE INDEX
The fiscal year ended September 30, 1999, was another excellent year for the
International Index Fund, as Japan's improving economy helped propel the fund to
a 31.70% gain, tracking Morgan Stanley's MSCI EAFE Index.
The fund mirrors the Morgan Stanley MSCI EAFE Index and therefore performs
closely in line with that common measure of large-cap international stocks. The
fund owns the majority of the stocks within the index and generally matches its
weighting of each stock.
Going forward, Japan's success in sustaining its economic recovery will dictate
the fund's performance to a great extent. To date, Japan's turnaround remains on
solid footing, which bodes well for the fund's long-term outlook.
VALUE OF A $10,000 INVESTMENT
[PLOT POINTS CHART]
<TABLE>
<CAPTION>
FIRST
FIRST AMERICAN FIRST
AMERICAN INTERNATIONAL AMERICAN MORGAN
INTERNATIONAL INDEX INTERNATIONAL STANLEY LIPPER
INDEX FUND, CLASS A INDEX MSCI EAFE INTERNATIONAL
FUND, CLASS A ADJUSTED FUND, CLASS Y INDEX FUNDS AVERAGE
------------- -------- ------------- ----- -------------
<S> <C> <C> <C> <C> <C>
7/1995 $10,000 $ 9,475 $10,000 $10,000 $10,000
9/1995 9,801 9,287 9,802 9,806 9,958
9/1996 10,516 9,964 10,539 10,651 10,936
9/1997 11,653 11,041 11,715 11,949 13,004
9/1998 10,539 9,985 10,632 10,953 11,630
9/1999 13,879 13,151 14,034 14,342 15,095
</TABLE>
PAST PERFORMANCE OF THE FUND IS NOT INDICATIVE OF FUTURE PERFORMANCE.
ANNUALIZED PERFORMANCE SINCE
1 YEAR 3 YEAR INCEPTION
- --------------------------------------------------------------------------------
Class A 31.70% 9.69% 9.18%
- --------------------------------------------------------------------------------
Class A adjusted 24.80% 7.75% 7.80%
- --------------------------------------------------------------------------------
Class B 30.66% - 14.37%
- --------------------------------------------------------------------------------
Class B adjusted 25.66% - 11.94%
- --------------------------------------------------------------------------------
Class Y 32.00% 10.01% 9.54%
- --------------------------------------------------------------------------------
Morgan Stanley MSCI EAFE 30.95% 10.43% 9.03%
- --------------------------------------------------------------------------------
Lipper International 27.64% 12.00% 9.97%
- --------------------------------------------------------------------------------
Past performance of the fund is not indicative of future performance.
The performance presented is that of a predecessor fund, Qualivest International
Opportunities Fund, which merged with First American International Index Fund on
11/21/97. The inception date of the Class A and Y shares is 7/3/95, and the
inception date of the Class B shares is 11/24/97.
The performance reflected in the graph begins on 7/31/95. The performance
reflected in the table for Class A and Class Y shares begins on 7/3/95 and Class
B shares begin on 11/24/97.
Performance reflects voluntary fee waivers in effect. In absence of such fee
waivers, total returns would be reduced.
66 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
INTERNATIONAL FUNDS
THIS PAGE WAS INTENTIONALLY LEFT BLANK.
67 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
STATEMENTS OF
NET ASSETS SEPTEMBER 30, 1999
EMERGING MARKETS FUND
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
COMMON STOCKS -- 87.8%
BRAZIL -- 1.5%
Aracruz Celulose ADR 12,000 $ 250
Brasileira de Distribuicao Grupo 8,500,000 169
Telebras ADR 3,300 247
----------
666
----------
CHILE -- 1.8%
Distribucion y Servicio ADR 47,800 804
----------
CHINA -- 4.2%
China Telecom ADR* 26,100 1,613
China.com, Cl A* 4,300 279
----------
1,892
----------
GREECE -- 8.0%
Alpha Credit Bank 11,500 926
Chipita International 17,400 549
Ergo Bank 1,920 183
National Bank of Greece 5,000 402
Sarantis 14,000 605
Titan Cement 7,800 913
----------
3,578
----------
HONG KONG -- 9.8%
City Telecom 242,000 176
First Pacific 1,258,000 769
Hutchison Whampoa 44,000 409
IDT International 2,352,000 276
Johnson Electric Holdings 326,000 1,582
Sun Hung Kai Properties 57,000 435
Television Broadcasts 51,000 218
Wharf Holdings 183,000 529
----------
4,394
----------
HUNGARY -- 1.4%
EGIS 14,100 433
Gedeon Richter 5,100 205
----------
638
----------
INDIA -- 0.9%
Larsen & Toubro GDR (A) 10,400 229
Ranbaxy Laboratories GDR (A) 7,300 176
----------
405
----------
ISRAEL -- 1.6%
Check Point Software Technologies* 5,700 481
Galileo Technology* 9,800 245
----------
726
----------
MEXICO -- 10.0%
Carso Global Telecom* 41,000 228
Cemex 250,000 1,201
Grupo Posadas, Cl A 1,453,000 869
Grupo Televisa GDR* 24,000 959
Telefonos de Mexico ADR 17,500 1,247
----------
4,504
----------
POLAND -- 0.8%
BRE Bank* 3,600 94
Telekomunikacja Polska (A) 56,400 278
----------
372
----------
EMERGING MARKETS FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
SINGAPORE -- 9.7%
City Developments 108,000 $ 550
Datacraft Asia 306,000 1,346
DBS Group Holdings 71,031 795
DBS Land 77,000 143
Singapore Press Holdings 39,000 615
Venture Manufacturing 101,000 880
----------
4,329
----------
SOUTH AFRICA -- 1.1%
Anglo American 8,900 498
----------
SOUTH KOREA -- 15.0%
Kookmin Bank GDR (A) 78,100 1,025
Korea Electric Power ADR 61,800 993
Korea Telecom ADR* 30,500 1,129
Pohang Iron & Steel ADR 31,900 999
Samsung Electronics (A) 20,690 1,649
SK Telecom ADR 89,847 927
----------
6,722
----------
TAIWAN -- 11.2%
Acer* 374,900 681
Advanced Semiconductor Engineering* 210,560 602
Evergreen Marine* 435,240 418
Inventec* 18,560 44
Synnex Technology GDR (A)* 17,700 332
Taiwan Semiconductor 355,890 1,501
Taiwan Semiconductor ADR 3,900 115
United Microelectronics* 567,550 1,327
----------
5,020
----------
THAILAND -- 3.7%
Advanced Info Service* 124,000 1,418
Bangkok Bank (A)* 124,000 244
----------
1,662
----------
TURKEY -- 1.0%
Arcelik 3,260,000 104
Eregli Demir Celik* 5,370,000 122
KOC Holding 1,230,000 119
Petrol Ofisi 290,000 98
----------
443
----------
UNITED KINGDOM -- 4.4%
Billiton 73,300 304
HSBC Holdings 97,200 1,114
Old Mutual* 261,300 557
----------
1,975
----------
UNITED STATES -- 1.7%
Comverse Technology* 4,250 401
StarMedia Network* 9,400 345
----------
746
----------
TOTAL COMMON STOCKS
(Cost $32,620) 39,374
----------
68 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
INTERNATIONAL FUNDS
EMERGING MARKETS FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
FOREIGN RIGHTS -- 0.2%
THAILAND -- 0.2%
Thai Farmers Bank* 120,700 $ 83
----------
TOTAL FOREIGN RIGHTS
(Cost $0) 83
----------
RELATED PARTY MONEY MARKET FUND -- 8.1%
First American Prime Obligations
Fund (B) 3,629,787 3,630
----------
TOTAL RELATED PARTY MONEY MARKET FUND
(Cost $3,630) 3,630
----------
TOTAL INVESTMENTS -- 96.1%
(Cost $36,250) 43,087
----------
OTHER ASSETS AND LIABILITIES, NET -- 3.9% 1,732
----------
NET ASSETS:
Portfolio Capital--Class A
($.0001 par value--2 billion authorized)
based on 671,973 outstanding shares $ 12,813
Portfolio Capital--Class B
($.0001 par value--2 billion authorized)
based on 1,907 outstanding shares 13
Portfolio Capital--Class Y
($.0001 par value--2 billion authorized)
based on 5,919,924 outstanding shares 37,488
Accumulated net investment loss (330)
Accumulated net realized loss on investments (12,011)
Net unrealized appreciation of investments 6,837
Net unrealized appreciation of forward
foreign currency contracts, foreign currency
and translation of other assets and liabilities
in foreign currency 9
----------
TOTAL NET ASSETS -- 100.0% $ 44,819
----------
Net asset value and redemption price
per share--Class A $ 6.77
Maximum sales charge of 5.25% (C) 0.38
----------
Offering price per share--Class A $ 7.15
----------
Net asset value and offering price
per share--Class B (D) $ 6.72
----------
Net asset value, offering price, and redemption
price per share--Class Y $ 6.80
----------
* Non-income producing security
(A) Security sold within the terms of a private placement memorandum, exempt
from registration under section 144A of the Securities Act of 1933, as
amended, and may be sold only to dealers in that program or other "qualified
institutional investors."
(B) This money market fund is advised by U.S. Bank National Association who also
serves as advisor for this fund. See also the notes to the financial
statements.
(C) The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 5.25%.
(D) Class B has a contingent deferred sales charge. For a description of a
possible redemption charge, see the notes to the financial statements.
ADR--American Depository Receipt
Cl--Class
GDR--Global Depository Receipt
EMERGING MARKETS FUND (CONCLUDED)
- ---------------------------------------------------------------------------
At September 30, 1999, sector diversification of the Portfolio
was as follows:
SECTOR DIVERSIFICATION % OF
COMMON STOCK NET ASSETS VALUE (000)
---------- -----------
Electronics 12.0% $ 5,380
Banking 10.7% 4,781
Telecommunications 8.9% 3,978
Semiconductors 8.5% 3,790
Cellular Telecommunications 6.8% 3,031
Construction Materials 4.7% 2,114
Multi-Industry 4.6% 2,055
Telephone 4.4% 2,000
News Media 3.5% 1,574
Mining 3.2% 1,425
Consumer Products 3.1% 1,409
Real Estate 2.5% 1,128
Computers 2.4% 1,057
Hotels 1.9% 869
Pharmaceuticals 1.8% 814
Food Product Retailer 1.6% 718
Internet 1.4% 625
Insurance 1.2% 557
Investment Company 1.1% 499
Computer Security 1.1% 481
Transportation 0.9% 418
Paper Products 0.6% 251
Television 0.5% 218
Appliances 0.2% 104
Oil and Gas 0.2% 98
----- -------
TOTAL COMMON STOCK 87.8% $39,374
TOTAL FOREIGN RIGHTS 0.2% 83
TOTAL RELATED PARTY
MONEY MARKET FUND 8.1% 3,630
----- -------
TOTAL INVESTMENTS 96.1% $43,087
OTHER ASSETS AND
LIABILITIES, NET 3.9% 1,732
----- -------
NET ASSETS 100.0% $44,819
===== =======
The accompanying notes are an integral part of the financial statements.
69 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
STATEMENTS OF
NET ASSETS SEPTEMBER 30, 1999
INTERNATIONAL FUND
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
COMMON STOCKS -- 94.4%
AUSTRALIA -- 0.5%
Broken Hill Proprietary 223,500 $ 2,574
----------
CANADA -- 1.6%
BioChem Pharma* 55,600 1,331
Newbridge Networks* 50,500 1,316
Nortel Networks 59,000 3,009
PMC-Sierra* 11,600 1,073
Research In Motion* 31,800 984
TD Waterhouse Group* 76,000 995
----------
8,708
----------
FINLAND -- 0.7%
Sonera Oyj 46,800 1,361
UPM-Kymmene 78,700 2,693
----------
4,054
----------
FRANCE -- 3.9%
Atos* 24,800 3,193
Cap Gemini 58,300 9,226
Carrefour Supermarche 30,200 4,854
Elf Aquitaine 24,400 4,279
----------
21,552
----------
GERMANY -- 4.8%
Deutsche Bank, Registered 45,500 3,058
Mannesmann 89,100 14,291
Preussag 42,036 2,126
Siemens 87,400 7,248
----------
26,723
----------
HONG KONG -- 3.7%
Cheung Kong Holdings 788,000 6,569
First Pacific 2,396,000 1,465
Hutchison Whampoa 625,000 5,813
Television Broadcasts 559,000 2,389
Wharf Holdings 1,623,000 4,691
----------
20,927
----------
IRELAND -- 0.2%
CRH 64,200 1,234
----------
ISRAEL -- 0.4%
Check Point Software Technologies* 24,600 2,077
----------
JAPAN -- 43.3%
Alps Electric 90,000 1,884
Bank of Tokyo-Mitsubishi 630,000 9,691
Fast Retailing 9,800 1,945
Fujitsu 812,000 25,363
Ito-Yokado 39,000 3,229
Kao 438,000 12,404
Keyence 7,800 2,091
Mabuchi Motor 11,600 1,513
Matsushita Communications Industrial 135,000 15,051
Mitsubishi Trust & Banking 124,000 1,517
Murata Manufacturing 192,000 19,328
Nikko Securities 2,249,000 19,043
Nikon 126,000 2,430
Nippon Telegraph & Telephone 223 2,748
INTERNATIONAL FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
NTT Data 306 $ 3,455
NTT Mobile Communications Network 1,025 20,251
Rohm 51,600 10,802
Sanwa Bank 100,000 1,341
Seven-Eleven 19,000 1,671
Shohkoh Fund 5,976 4,470
Softbank 68,600 26,139
Sony 89,600 13,412
Sumitomo Bank 78,000 1,174
Takeda Chemical Industries 278,000 15,039
Tokyo Electron 168,000 14,620
Toshiba 272,000 2,029
Trans Cosmos 11,000 1,376
Yamanouchi Pharmaceutical 130,000 6,103
Yamato Transport 57,000 1,451
----------
241,570
----------
NETHERLANDS -- 9.9%
ASM Lithography Holding* 193,300 13,146
Equant* 106,000 8,660
Getronics 116,700 6,320
Philips Electronics 66,596 6,729
Royal Dutch Petroleum 24,600 1,434
STMicroelectronics 239,400 18,739
----------
55,028
----------
NORWAY -- 0.2%
Petroleum Geo-Services* 69,300 1,315
----------
SINGAPORE -- 4.6%
City Developments 448,000 2,282
DBS Group Holdings 1,273,485 14,246
Oversea-Chinese Banking 280,000 2,176
Singapore Press Holdings 345,000 5,444
United Overseas Bank 184,000 1,397
----------
25,545
----------
SOUTH KOREA -- 2.6%
Korea Telecom ADR* 79,800 2,953
Pohang Iron & Steel ADR 123,000 3,851
Samsung Electronics GDR (A) 67,000 5,340
SK Telecom ADR 234,200 2,415
----------
14,559
----------
SWEDEN -- 4.6%
ABB* 98,000 10,149
Atlas Copco, Cl A* 42,800 1,212
Ericsson Telephone ADR 273,100 8,534
Hennes & Mauritz, Cl B 108,800 2,766
Securitas, Cl B* 132,500 2,007
Svenska Cellulosa, Cl B 40,600 1,092
----------
25,760
----------
THAILAND -- 0.2%
Advanced Info Service* 55,600 636
Thai Farmers Bank* 340,800 402
----------
1,038
----------
70 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
INTERNATIONAL FUNDS
INTERNATIONAL FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
UNITED KINGDOM -- 12.8%
BP Amoco 441,100 $ 8,055
COLT Telecom Group* 443,500 10,545
Dixons Group 205,400 3,660
Freeserve* 270,000 652
General Electric 490,600 4,710
HSBC Holdings 1,325,400 15,186
Invensys 1,337,000 6,517
Logica 605,100 7,921
Vodafone Group 586,400 13,885
----------
71,131
----------
UNITED STATES -- 0.4%
Global TeleSystems Group* 123,400 2,433
----------
TOTAL COMMON STOCKS
(Cost $405,673) 526,228
----------
FOREIGN PREFERRED STOCKS -- 3.6%
FINLAND -- 3.6%
Nokia, Cl A 223,500 20,099
----------
TOTAL FOREIGN PREFERRED STOCKS
(Cost $8,154) 20,099
----------
FOREIGN RIGHTS -- 0.1%
SWEDEN -- 0.0%
Atlas Copco, Cl A* 42,800 52
Svenska Cellulosa, Cl B* 40,600 65
----------
117
----------
THAILAND -- 0.0%
Thai Farmers Bank* 340,800 235
----------
TOTAL FOREIGN RIGHTS
(Cost $0) 352
----------
RELATED PARTY MONEY MARKET FUND -- 2.8%
First American Prime Obligations
Fund (B) 15,879,815 15,880
----------
TOTAL RELATED PARTY MONEY MARKET FUND
(Cost $15,880) 15,880
----------
TOTAL INVESTMENTS -- 100.9%
(Cost $429,707) 562,559
----------
OTHER ASSETS AND LIABILITIES, NET -- (0.9%) (4,977)
----------
INTERNATIONAL FUND (CONTINUED)
DESCRIPTION VALUE (000)
- ---------------------------------------------------------------------------
NET ASSETS:
Portfolio Capital--Class A
($.0001 par value--2 billion authorized)
based on 3,078,353 outstanding shares $ 31,472
Portfolio Capital--Class B
($.0001 par value--2 billion authorized)
based on 285,171 outstanding shares 3,249
Portfolio Capital--Class C
($.0001 par value--2 billion authorized)
based on 64,827 outstanding shares 895
Portfolio Capital--Class Y
($.0001 par value--2 billion authorized)
based on 32,205,573 outstanding shares 369,165
Distributions in excess of net investment income (11,375)
Accumulated net realized gain on investments 34,022
Net unrealized appreciation of investments 132,852
Net unrealized depreciation of forward foreign
currency contracts, foreign currency and
translation of other assets and liabilities
in foreign currency (2,698)
----------
TOTAL NET ASSETS -- 100.0% $ 557,582
----------
Net asset value and redemption price
per share--Class A $ 15.64
Maximum sales charge of 5.25% (C) 0.87
----------
Offering price per share--Class A $ 16.51
----------
Net asset value per share--Class B (D) $ 15.21
----------
Net asset value per share--Class C (E) $ 15.57
Maximum sales charge of 1.00% (F) 0.16
----------
Offering price per share--Class C $ 15.73
----------
Net asset value, offering price, and redemption
price per share--Class Y $ 15.65
----------
* Non-income producing security
(A) Security sold within the terms of a private placement memorandum, exempt
from registration under section 144A of the Securities Act of 1933, as
amended, and may be sold only to dealers in that program or other "qualified
institutional investors."
(B) This money market fund is advised by U.S. Bank National Association who also
serves as advisor for this fund. See also the notes to the financial
statements.
(C) The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 5.25%.
(D) Class B has a contingent deferred sales charge. For a description of a
possible redemption charge, see the notes to the financial statements.
(E) Class C has a contingent deferred sales charge. For a description of a
possible redemption charge, see the notes to the financial statemtents.
(F) The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 1.00%.
ADR--American Depository Receipt
Cl--Class
GDR--Global Depository Receipt
71 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
STATEMENTS OF
NET ASSETS SEPTEMBER 30, 1999
INTERNATIONAL FUND (CONCLUDED)
- ---------------------------------------------------------------------------
At September 30, 1999, sector diversification of the Portfolio
was as follows:
SECTOR DIVERSIFICATION % OF
COMMON STOCK NET ASSETS VALUE (000)
---------- -----------
Banking 9.0% $ 50,188
Computers 8.5% 47,169
Semiconductors 8.1% 45,233
Electronics 7.0% 38,915
Cellular Telecommunications 6.2% 34,772
Computer Software 5.9% 33,067
Multi-Industry 5.8% 32,570
Telecommunications Equipment 5.5% 30,704
Financial Services 4.8% 26,514
Investment Company 4.7% 26,139
Machinery 4.2% 23,558
Pharmaceuticals 4.0% 22,473
Telecommunications Services 3.9% 21,801
Consumer Goods 3.3% 18,134
Audio/Video 2.4% 13,412
Retail Goods 2.0% 11,326
Engineering 1.8% 10,149
Real Estate 1.6% 8,850
Oil and Gas 1.5% 8,261
News Media 1.4% 7,833
Mining 1.2% 6,425
Food Product Retailer 0.9% 4,854
Photographic Equipment 0.4% 2,430
Transportation 0.3% 1,451
----- --------
TOTAL COMMON STOCK 94.4% $526,228
TOTAL FOREIGN PREFERRED STOCK 3.6% 20,099
TOTAL FOREIGN RIGHTS 0.1% 352
RELATED MONEY MARKET FUND 2.8% 15,880
----- --------
TOTAL INVESTMENTS 100.9% $562,559
OTHER ASSETS AND
LIABILITIES, NET (0.9%) (4,977)
----- --------
NET ASSETS 100.0% $557,582
===== ========
The accompanying notes are an integral part of the financial statements.
INTERNATIONAL INDEX FUND
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
FOREIGN COMMON STOCKS -- 96.6%
AUSTRALIA -- 2.1%
Amcor 18,082 $ 87
Boral 26,427 40
Brambles Industries 5,692 165
Broken Hill Proprietary 26,847 309
Burns, Philp & Company* 15,097 3
Coca-Cola Amatil 21,218 74
Coles Myer 26,617 139
CSR 26,547 67
Fosters Brewing 46,622 131
Goodman Fielder 41,964 39
Lend Lease 12,594 154
MIM Holdings 2,632 2
National Australia Bank 29,706 435
Newcrest Mining* 21,543 70
News Corporation 39,293 276
North Limited 18,526 39
Orica 7,707 41
Pacific Dunlop 34,457 52
Pioneer International 22,792 56
Rio Tinto 7,547 128
Santos 14,125 39
Southcorp Holdings 16,425 60
Westfield Trust 32,821 66
Westpac Banking 41,367 255
WMC 28,033 143
----------
2,870
----------
AUSTRIA -- 0.3%
Austrian Airlines 1,410 29
Bank Austria 1,386 69
BBAG Oest Brau-Beteiligungs 885 40
Flughafen Wien 772 31
Generale Holding Vienna 269 43
Oest Elektrizatswirts, Cl A 367 54
OMV 340 32
VA Technologie 539 43
Wienerberger Baustoffindustrie 2,048 46
----------
387
----------
BELGIUM -- 1.1%
Bekaert 87 40
Cimenteries CBR Cementbedrijven 185 17
Delhaize 1,220 98
Electrabel 1,159 403
Electrabel Strip 300 --
Fortis, Cl B 8,388 274
Fortis Strip 180 --
Groupe Bruxelles Lambert 641 123
KBC Bancassurance Holding 3,420 175
KBC Bancassurance Holding Strip 70 --
Solvay 1,720 123
Tractebel 1,520 270
Union Miniere 428 18
----------
1,541
----------
72 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
INTERNATIONAL FUNDS
INTERNATIONAL INDEX FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
CANADA -- 0.0%
Boliden 781 $ 2
----------
DENMARK -- 0.9%
Carlsberg, Cl A 562 21
Carlsberg, Cl B 36 1
D/S 1912, Cl B 20 206
D/S Svendborg, Cl B 15 215
Danisco 1,429 60
Den Danske Bank 999 114
FLS Industries, Cl B 1,105 29
ISS International Service System, Cl B* 840 47
Novo-Nordisk, Cl B 1,311 156
Radiometer, Cl B 417 18
Tele Danmark, Cl B 3,972 237
Unidanmark, Cl A 1,148 78
----------
1,182
----------
FINLAND -- 1.9%
Kesko 1,700 21
Kone, Cl B 100 13
MeritaNordbanken 18,733 106
Metra, Cl B 700 13
Nokia, Cl A 22,600 2,032
Outokumpu 3,500 41
Sampo Insurance, Cl A 1,350 45
Stockmann, Cl A 1,200 23
Stora Enso, Cl A* 2,546 34
Stora Enso, Cl R* 4,433 59
UPM-Kymmene 5,740 196
----------
2,583
----------
FRANCE -- 9.1%
Accor 887 208
Air Liquide 1,947 310
Alcatel 2,878 398
Axa 7,207 916
Banque Nationale de Paris, Cl A 3,482 279
BIC 1,500 73
Bouygues 751 239
Canal Plus 2,684 161
Carrefour Supermarche 4,260 685
Casino Guichard-Perrachon 1,550 179
Chargeurs 200 12
Compagnie de Saint Gobain 1,823 341
Danone 1,201 293
Elf Aquitaine 5,340 936
Eridania Beghin-Say 650 79
L'Oreal 1,143 733
Lafarge 1,758 195
Lagardere SCA 2,210 92
Legrand 480 108
Louis Vuitton Moet Hennessy 1,609 484
Michelin, Cl B 3,273 155
Paribas 3,103 346
Pathe 600 62
Pernod Ricard 1,302 88
Peugeot Citroen 956 192
Pinault-Printemps-Redoute 2,001 381
INTERNATIONAL INDEX FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
Promodes 316 $ 281
Rhone Poulenc, Cl A 6,987 362
Sadexho Alliance 900 153
Sagem 150 107
Sanofi-Synthelabo 9,372 401
Schneider 2,781 204
Sefimeg 431 32
Sidel 800 82
Simco 841 72
Societe Eurafrance 105 65
Societe Generale, Cl A 1,557 322
Suez Lyonnaise des Eaux 2,492 405
Thomson CSF 2,632 90
Total Fina 3,710 468
Total Fina (BE) 2,079 262
Total Fina Strip* 2,079 --
Unibail 250 36
Usinor 2,568 36
Valeo 1,778 129
Vivendi 12,243 863
----------
12,315
----------
GERMANY -- 8.9%
Adidas-Salomon 900 77
AGIV 880 16
Allianz, Registered 4,200 1,215
AMB Aachener & Muenchener, Bearer 850 79
Axa Colonia Konzern 450 48
BASF 13,100 560
Bayer 14,050 563
Beiersdorf 1,250 88
Bilfinger & Berger Bau 1,200 27
Brau Und Brunnen* 150 10
Continental 3,100 68
DaimlerChrysler 9,919 686
Degussa-Huels 1,350 47
Deutsche Bank 10,700 719
Deutsche Lufthansa, Registered 6,000 110
Deutsche Telekom 37,950 1,562
Deutz 550 4
Dresdner Bank 9,850 466
Heidelberger Zement 905 78
Hochtief 1,900 83
HypoVereinsbank 9,037 530
Karstadt 100 45
Linde 1,500 84
MAN 2,500 76
Mannesmann 7,100 1,139
Merck KGAA 3,850 140
Metro 4,184 219
Muenchener Rueckvers, Registered 2,700 548
Preussag 2,000 101
RWE 6,230 259
SAP 970 375
Schering 1,500 164
Siemens 9,920 823
Strabag* 100 5
Thyssen Krupp 7,500 151
Veba 8,682 478
73 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
STATEMENTS OF
NET ASSETS SEPTEMBER 30, 1999
INTERNATIONAL INDEX FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
Viag 10,400 $ 198
Volkswagen 5,500 308
----------
12,149
----------
HONG KONG -- 2.1%
Bank of East Asia 15,886 34
Cathay Pacific Airways 54,000 97
Cheung Kong Holdings 35,000 292
Chinese Estates Holdings* 104,296 17
CLP Holdings 44,500 209
Hang Seng Bank 35,200 373
Hong Kong and China Gas 120,831 163
Hong Kong and Shanghai Hotels* 29,000 22
Hong Kong Telecommunications 210,039 461
Hopewell Holdings 26,227 18
Hutchison Whampoa 66,000 614
Hysan Development 2,500 3
Miramar Hotel and Investment 19,000 20
Peregrine Investment Holdings* 13,000 --
Shangri-La Asia 38,000 42
Shun Tak Holdings 75,146 15
Sino Land 20,657 10
South China Morning Post Holdings 24,000 16
Sun Hung Kai Properties 34,000 259
Swire Pacific, Cl A 23,000 109
Television Broadcasts 10,000 43
Wharf Holdings 2,150 6
Wing Lung Bank 3,500 14
----------
2,837
----------
IRELAND -- 0.5%
Allied Irish Banks 15,732 190
CRH 10,134 195
Greencore Group 5,342 16
Independent Newspapers 2,515 13
Irish Life & Permanent 5,087 57
Jefferson Smurfit Group 29,615 88
Kerry Group 4,102 52
Waterford Wedgwood Units 22,614 24
----------
635
----------
ITALY -- 4.1%
Assicurazioni Generali 17,794 594
Banca Commerciale Italiana 36,000 249
Banca Intesa 12,000 50
Benetton Group 33,400 73
Burgo (Cartiere) 2,000 16
Edison 10,000 88
ENI 141,725 893
Fiat 6,710 225
Fiat RNC 2,640 45
INA 75,794 248
Italcementi 11,232 154
Italgas 14,000 61
Mediaset 16,984 174
Mediobanca 8,000 89
Mondadori Editore 3,099 54
Montedison 51,740 102
Olivetti* 52,800 114
INTERNATIONAL INDEX FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
Parmalat Finanziaria 23,400 $ 32
Pirelli 31,000 76
Riunione Adriatica di Sicurta 9,075 91
Riunione Adriatica di Sicurta RNC 3,075 24
SAI 3,000 34
San Paolo-IMI 24,747 323
Sirti 3,500 18
SNIA BPD 20,000 23
Telecom Italia 62,888 549
Telecom Italia RNC 9,883 50
Telecom Italia Mobile 120,107 750
Telecom Italia Mobile RNC 31,894 118
Unicredito Italiano 57,500 282
Unione Immobiliare 75,794 40
----------
5,639
----------
JAPAN -- 27.1%
77 Bank 8,000 84
Advantest 2,200 319
Ajinomoto 12,000 141
Alps Electric 3,000 63
Amada 5,000 35
Aoki* 22,000 12
Aoyama Trading 1,100 37
Asahi Bank 35,000 252
Asahi Breweries 7,000 107
Asahi Chemical Industry 25,000 139
Asahi Glass 16,000 111
Ashikaga Bank 2,000 5
Bank of Tokyo-Mitsubishi 76,000 1,169
Bank of Yokohama 25,000 88
Bridgestone 14,000 392
Canon 14,000 408
Chiba Bank 2,000 8
Chugai Pharmaceutical 8,000 97
Citizen Watch 1,000 7
Cosmo Oil 28,000 45
Credit Saison 3,900 91
Dai Nippon Printing 13,000 242
Daicel Chemical Industries 1,000 4
Daido Steel 24,000 43
Daiei* 16,000 64
Daiichi Pharmaceutical 7,000 107
Daikin Industries 9,000 109
Dainippon Ink & Chemicals 5,000 20
Dainippon Screen Manufacturing 7,000 43
Daito Trust Construction 3,000 45
Daiwa House Industries 14,000 139
Daiwa Securities 19,000 173
Denki Kagaku Kogyo 33,000 103
Denso 17,000 361
East Japan Railway 71 453
Ebara 10,000 130
Eisai 7,000 178
Fanuc 3,700 252
Fuji Bank 51,000 621
Fuji Photo Film 10,000 343
Fujita Kanko 4,000 27
Fujitsu 34,000 1,062
Gunma Bank 13,000 89
74 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
INTERNATIONAL FUNDS
INTERNATIONAL INDEX FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
Hankyu 17,000 $ 61
Hankyu Department Stores 7,000 52
Haseko* 15,000 9
Hitachi 63,000 699
Hokuriko Bank* 2,000 5
Honda Motor 16,000 671
House Foods 3,000 44
Hoya 3,000 182
Industrial Bank of Japan 34,000 419
Isetan 2,000 16
Ito-Yokado 9,000 745
Itochu* 40,000 132
Japan Airlines 36,000 139
Japan Energy 39,000 49
Joyo Bank 26,000 110
Jusco 6,000 113
Kajima 25,000 100
Kandenko 5,000 29
Kaneka 6,000 77
Kansai Electric Power 16,600 322
Kao 11,000 311
Kawasaki Kisen 24,000 46
Kawasaki Steel* 69,000 160
Kinden 12,000 99
Kinki Nippon Railway 29,000 155
Kirin Brewery 22,000 264
Komatsu 23,000 153
Konica 3,000 12
Kubota 26,000 92
Kumagai Gumi* 46,000 44
Kurita Water Industries 4,000 81
Kyocera 3,200 244
Kyowa Hakko Kogyo 14,000 107
Makita 4,000 45
Marubeni 24,000 62
Marui 7,000 131
Matsushita Electric 37,000 788
Meiji Milk Products 6,000 22
Meiji Seika 15,000 115
Misawa Homes 4,000 15
Mitsubishi 33,000 273
Mitsubishi Chemical 13,000 50
Mitsubishi Electric 45,000 257
Mitsubishi Estate 28,000 285
Mitsubishi Heavy Industries 67,000 258
Mitsubishi Materials* 34,000 101
Mitsubishi Trust & Banking 18,000 220
Mitsui 40,000 303
Mitsui Engineering & Shipbuilding* 30,000 30
Mitsui Fudosan Real Estate 7,000 56
Mitsui Marine and Fire Insurance 22,000 117
Mitsui Osk Lines 31,000 58
Mitsui Trust & Banking 17,000 35
Mori Seiki 2,000 29
Murata Manufacturing 5,000 503
Mycal 5,000 31
Nagase 2,000 10
Nagoya Railroad 18,000 53
Nankai Electric 14,000 55
INTERNATIONAL INDEX FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
NEC 28,000 $ 565
New Oji Paper 23,000 162
NGK Insulators 8,000 78
NGK Spark Plug 4,000 38
Nichido Fire & Marine Insurance 9,000 44
Nichirei 11,000 35
Nippon Express 22,000 148
Nippon Fire & Marine Insurance 8,000 27
Nippon Light Metal 35,000 44
Nippon Oil 34,925 144
Nippon Paper Industries 13,000 92
Nippon Sheet Glass 22,000 124
Nippon Shokubai* 2,000 12
Nippon Steel 103,000 280
Nippon Telegraph & Telephone 179 2,206
Nippon Yusen Kabushik 35,000 129
Nissan Motors 17,000 103
Nissin Food Products 3,000 82
Nitto Denko 3,000 95
NKK* 80,000 74
Nomura Securities 32,000 497
NSK 7,000 51
NTN 2,000 7
Obayashi 17,000 103
Odakyu Railway 19,000 62
Okamato Industries 13,000 32
Olympus Optical 7,000 95
Omron 6,000 119
Orix 1,400 172
Osaka Gas 41,000 137
Penta-Ocean Construction* 1,000 2
Pioneer Electronics 3,000 52
Rohm 3,000 628
Sakura Bank* 60,000 452
Sankyo 7,000 211
Sanwa Shutter 9,000 48
Sanyo Electric 36,000 174
Sapporo Breweries 12,000 51
Secom 3,000 268
Secom - New 3,000 274
Sega Enterprises 2,000 42
Sekisui Chemical 13,000 73
Sekisui House 17,000 192
Sharp 17,000 273
Shimano 3,000 72
Shimizu 19,000 84
Shin-Etsu Chemical 7,000 292
Shiseido 8,000 120
Shizuoka Bank 14,000 168
Showa Denko 37,000 58
Sony 7,100 1,063
Sumitomo 21,000 155
Sumitomo Bank 48,000 723
Sumitomo Chemical 16,000 82
Sumitomo Electric 15,000 206
Sumitomo Forestry 3,000 22
Sumitomo Marine & Fire Insurance 15,000 96
Sumitomo Metal* 65,000 73
Sumitomo Metal Mining* 11,000 55
75 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
STATEMENTS OF
NET ASSETS SEPTEMBER 30, 1999
INTERNATIONAL INDEX FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
Taiheiyo Cement 25,000 $ 65
Taisei 12,000 27
Taisho Pharmaceutical 7,000 295
Takara Shuzo 5,000 75
Takashimaya 7,000 72
Takeda Chemical Industries 18,000 974
Teijin 26,000 125
Toa 9,000 16
Tobu Railway 1,000 3
Toho 470 74
Tohoku Electric Power 10,600 166
Tokai Bank 25,000 181
Tokio Marine & Fire Insurance 27,000 320
Tokyo Broadcasting System 4,000 81
Tokyo Dome* 4,000 22
Tokyo Electric Power 21,000 486
Tokyo Electron 3,000 261
Tokyo Gas 43,000 103
Tokyu 24,000 68
Toppan Printing 16,000 202
Toray 31,000 160
Tosho 35,000 123
Tostem 5,000 117
Toto 10,000 78
Toyo Seikan Kaisha 3,000 65
Toyobo 31,000 47
Toyoda Auto Loom 6,000 110
Toyota Motor 66,000 2,105
Ube Industries 39,000 95
Uniden Corportation 2,000 20
Yamaguchi Bank 4,000 32
Yamanouchi Pharmaceutical 7,000 329
Yamato Transport 8,000 204
Yamazaki Baking 5,000 65
Yasuda Trust & Banking* 28,000 48
Yokogawa Electric 7,000 50
----------
36,892
----------
MALAYSIA -- 0.9%
AMMB Holdings 20,000 31
Amsteel 95,000 18
Edaran Otomobil Nasional 11,000 36
Golden Hope Plantations 54,000 37
Highlands & Lowlands 30,000 16
Hong Leong Properties 80,000 21
Hume Industries 16,000 13
Magnum 60,500 45
Malayan Banking 80,000 248
Malaysia International Shipping 17,000 23
Malaysian Airline System 25,000 23
Malaysian Resources* 44,000 29
Multi-Purpose Holdings* 66,000 28
Pan Malaysia Cement Works 55,000 18
Perusahaan Otomobil Nasional 4,000 6
Public Bank 89,199 80
Resorts World 27,000 62
RHB Capital* 20,000 13
INTERNATIONAL INDEX FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
Rothmans of Pall Mall 8,000 $ 49
Silverstone* 3,325 --
Sime Darby 10,000 12
Technology Resources Industries 30,000 15
Telekom Malaysia 62,500 162
Tenaga Nasional 66,000 135
United Engineers* 28,000 42
YTL 15,750 25
----------
1,187
----------
NETHERLANDS -- 5.1%
ABN AMRO Holding 24,956 563
Ahold 9,917 328
Akzo Nobel 5,564 237
Buhrmann 1,772 30
Elsevier 13,457 139
Getronics 1,811 98
Heineken 6,143 307
Hoogovens 754 43
ING Groep 16,419 895
KLM 1,613 42
KPN 8,193 360
Pakhoed 867 24
Philips Electronics* 5,726 579
Royal Dutch Petroleum 36,924 2,152
TNT Post Group 9,193 235
Unilever 9,903 677
Wolters Kluwer 5,044 174
----------
6,883
----------
NEW ZEALAND -- 0.1%
Brierley Investments* 66,325 15
Carter Holt Harvey 49,289 59
Fletcher Challenge Building 3,165 4
Fletcher Challenge Energy 4,794 12
Fletcher Challenge Forest* 19,179 8
Fletcher Challenge Paper 5,163 4
Lion Nathan 13,326 28
Telecom Corporation of New Zealand 33,302 132
----------
262
----------
NORWAY -- 0.4%
Bergesen, Cl A 2,400 39
Dyno Industrier 1,200 27
Hafslund, Cl A 3,850 25
Hafslund, Cl B 1,600 6
Kvaerner* 1,450 29
Norsk Hydro 5,650 242
Norske Skogindustrier 700 28
Orkla, Cl A 5,000 77
Petroleum Geo-Services* 1,000 19
Storebrand* 9,124 69
----------
561
----------
76 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
INTERNATIONAL FUNDS
INTERNATIONAL INDEX FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
SINGAPORE -- 0.8%
Asia Food & Properties* 666 $ --
City Developments 9,000 46
Cycle & Carriage 7,000 23
DBS Group Holdings* 12,211 137
DBS Land 20,000 37
Fraser & Neave 3,000 10
NatSteel 16,000 28
Oversea-Chinese Banking 20,135 156
Singapore Airlines 22,000 215
Singapore Press Holdings 8,038 127
Singapore Telecommunications* 111,000 203
United Industrial 77,000 42
United Overseas Bank 5,000 38
----------
1,062
----------
SPAIN -- 2.8%
Acerinox 745 23
Argentaria 9,104 201
Autopistas Concesionaria Espanola 5,150 57
Banco Bilbao Vizcaya 40,155 532
Banco Santander Central Hispano 68,232 708
Corporacion Financiera Alba 1,074 30
Corporacion Mapfre 94 2
Endesa 17,984 343
FCC 1,720 47
Gas Natural SDG 7,368 158
Iberdrola 15,705 234
Metrovacesa 2,124 48
Repsol 15,444 304
Tabacalera, Cl A 3,315 63
Telefonica 56,004 900
Union Electrica Fenosa 4,413 66
Vallehermoso 2,745 27
Zardoya Otis 4,040 55
----------
3,798
----------
SWEDEN -- 2.2%
AGA, Cl A 3,958 68
AGA, Cl B 3,450 59
Atlas Copco, Cl A* 3,220 91
Drott, Cl B 2,459 23
Electrolux, Cl B 8,955 169
Ericsson, Cl B 33,454 1,046
Hennes & Mauritz, Cl B 16,340 415
Skandia Forsakrings 10,330 217
Skandinaviska Enskilda Banken, Cl A 11,059 114
Skanska, Cl B 2,459 92
SKF, Cl B 3,000 68
Svenska Cellulosa, Cl B 4,410 119
Svenska Handlesbanken, Cl A 13,353 188
Swedish Match 20,354 76
Trelleborg, Cl B 2,000 19
Volvo, Cl A 3,737 106
Volvo, Cl B 5,915 169
----------
3,039
----------
INTERNATIONAL INDEX FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
SWITZERLAND -- 6.2%
ABB, Bearer 170 $ 281
Adecco, Bearer 321 180
Alusuisse Lonza Group, Registered 120 139
Credit Suisse Group, Registered 4,774 878
Holderbank Financiere Glarus, Bearer 141 184
Nestle, Registered 650 1,226
Novartis, Registered 1,205 1,795
Roche Holding, Bearer 24 446
Roche Holding, Genusscheine 116 1,348
SAirGroup, Registered 250 54
Schindler Holding, Participating Certificates 25 39
Schindler Holding, Registered 25 41
SGS Holding, Bearer 52 59
SGS Holding, Registered 1 --
Swatch Group, Bearer 56 44
Swatch Group, Registered 273 45
Swiss Reinsurance, Registered 262 525
UBS, Registered 3,666 1,038
Valora Holding, Registered 70 18
Zurich Allied, Registered 60 34
----------
8,374
----------
UNITED KINGDOM -- 20.0%
Abbey National 24,886 442
Allied Zurich 31,245 367
Anglian Water 6,007 71
Arjo Wiggins Appleton 21,135 68
Associated British Food 13,873 91
AstraZeneca Group 17,854 749
AstraZeneca Group (SK) 15,833 666
Barclays 24,874 730
Bass 16,415 198
BBA Group 9,021 65
BG 74,915 431
BICC Group 10,071 18
Blue Circle Industries 21,510 128
BOC Group 11,781 246
Boots 17,913 200
BP Amoco 106,003 1,936
BPB 11,171 69
British Aerospace 34,024 224
British Airways 13,920 78
British American Tobacco 31,245 268
British Sky Broadcasting 35,649 345
British Steel 38,008 97
British Telecommunications 115,904 1,755
Burmah Castrol 3,717 69
Cable & Wireless 40,002 435
Cadbury Schweppes 44,648 310
Caradon 15,828 40
Carlton Communications 13,900 105
Centrica 68,043 187
CGU 12,556 194
Coats Viyella 22,869 21
Coca-Cola Beverages 21,218 41
De La Rue 6,583 35
Diageo 62,135 635
77 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
STATEMENTS OF
NET ASSETS SEPTEMBER 30, 1999
INTERNATIONAL INDEX FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
Electrocomponents 9,618 $ 82
Elementis 8,335 14
EMI Group 14,007 102
General Electric 56,794 545
GKN 9,305 149
Glaxo Wellcome 63,131 1,647
Granada Group 35,374 303
Great Universal Stores 20,164 152
Hammerson 10,193 80
Hanson 16,883 130
HSBC Holdings 137,214 1,573
IMI 4,909 23
Imperial Chemical Industries 11,818 131
Invensys 36,987 180
J Sainsbury 34,011 212
Johnson Matthey 4,897 47
Kingfisher 23,084 247
Ladbroke 33,285 116
Land Securities 2,531 34
Lasmo 21,742 51
Legal & General Group 101,228 287
Lloyds TSB 94,173 1,171
Lonrho 4,890 52
Marks & Spencer 52,234 271
MEPC 12,784 96
National Grid Group 31,901 221
National Power 21,756 170
Next 6,829 69
Nycomed Amersham 258 2
Pearson 13,897 298
Peninsular and Oriental Steam Navigation 10,802 164
Pilkington 29,405 49
Provident Financial 5,269 63
Prudential 38,852 597
Racal Electronics 6,572 45
Rank Group 16,954 60
Reed International 22,618 136
Reuters Group 28,619 323
Rexam 12,784 54
Rio Tinto 20,309 352
RMC Group 6,560 101
Rolls-Royce 33,703 117
Royal & Sun Alliance Insurance Group 26,839 212
Royal Bank of Scotland Group 17,283 371
Safeway 23,210 85
Schroders 5,194 108
Scottish & Newcastle 13,226 132
Scottish Power 22,765 209
Selfridges 2,797 12
Slough Estates 9,571 55
SmithKline Beecham 97,428 1,121
Smiths Industries 6,601 93
Sun Life & Provincial Holdings 4,001 31
Tate & Lyle 10,382 64
Tesco 126,894 396
Thames Water 8,322 130
TI Group 10,548 76
Unilever 56,220 529
United Biscuits 13,488 41
INTERNATIONAL INDEX FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
United Utilities 11,993 $ 131
Vodafone Group 60,184 1,425
Williams 16,024 85
Wolseley 12,805 89
----------
27,225
----------
TOTAL FOREIGN COMMON STOCKS
(Cost $98,694) 131,423
----------
FOREIGN PREFERRED STOCKS -- 0.5%
AUSTRALIA -- 0.2%
News Corporation 35,455 234
----------
GERMANY -- 0.3%
RWE 250 8
SAP 710 320
Volkswagen 2,000 64
----------
392
----------
ITALY -- 0.0%
Fiat Spa 3,190 53
----------
TOTAL FOREIGN PREFERRED STOCKS
(Cost $435) 679
----------
FOREIGN WARRANTS -- 0.0%
BELGIUM -- 0.0%
Tractebel Warrants, expire 11/30/99* 329 --
----------
FRANCE -- 0.0%
Vivendi Warrants, expire 05/02/01* 19 --
----------
HONG KONG -- 0.0%
Chinese Estates Holdings Warrants,
expire 11/24/99* 10,429 --
Chinese Estates Holdings Warrants,
expire 11/24/00* 10,429 1
----------
1
----------
MALAYSIA -- 0.0%
YTL Warrants, expire 06/26/09* 3,937 2
YTL Warrants, expire 09/20/02* 3,050 3
----------
5
----------
SINGAPORE -- 0.0%
Asia Food & Properties Warrants,
expire 07/12/02* 2,900 1
----------
SWITZERLAND -- 0.0%
UBS Warrants, expire 06/30/00* 195 3
----------
TOTAL FOREIGN WARRANTS
(Cost $1) 10
----------
FOREIGN RIGHTS -- 0.0%
GERMANY -- 0.0%
Strabag* 100 --
----------
78 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
INTERNATIONAL FUNDS
INTERNATIONAL INDEX FUND (CONTINUED)
DESCRIPTION SHARES/PAR (000) VALUE (000)
- ---------------------------------------------------------------------------
SWEDEN -- 0.0%
Atlas Copco, Cl A* 3,220 $ 4
Svenska Cellulosa, Cl B* 4,410 7
----------
11
----------
TOTAL FOREIGN RIGHTS
(Cost $0) 11
----------
FOREIGN CONVERTIBLE BONDS -- 0.0%
SPAIN -- 0.0%
Banco Bilbao Viscaya
0.000%, 07/30/02 EU 11 12
----------
TOTAL FOREIGN CONVERTIBLE BONDS
(Cost $12) 12
----------
RELATED PARTY MONEY MARKET FUND -- 1.6%
First American Prime Obligations
Fund (A) 2,133,956 2,134
----------
TOTAL RELATED PARTY MONEY MARKET FUND
(Cost $2,134) 2,134
----------
TOTAL INVESTMENTS -- 98.7%
(Cost $101,276) 134,269
----------
OTHER ASSETS AND LIABILITIES, NET -- 1.3% 1,764
----------
NET ASSETS:
Portfolio Capital--Class A
($.0001 par value--2 billion authorized)
based on 266,012 outstanding shares $ 2,872
Portfolio Capital--Class B
($.0001 par value--2 billion authorized)
based on 54,300 outstanding shares 656
Portfolio Capital--Class Y
($.0001 par value--2 billion authorized)
based on 10,180,288 outstanding shares 100,446
Distributions in excess of net investment income (450)
Accumulated net realized loss on investments (487)
Net unrealized appreciation of investments 32,993
Net unrealized appreciation of forward foreign
currency contracts, foreign currency and
translation of other assets and liabilities in
foreign currency 3
----------
TOTAL NET ASSETS -- 100.0% $ 136,033
----------
INTERNATIONAL INDEX FUND (CONTINUED)
DESCRIPTION VALUE
- ---------------------------------------------------------------------------
Net asset value and redemption price
per share--Class A $ 12.92
Maximum sales charge of 5.25% (B) 0.72
----------
Offering price per share--Class A $ 13.64
----------
Net asset value and offering price
per share--Class B (C) $ 12.89
----------
Net asset value, offering price, and redemption
price per share--Class Y $ 12.96
----------
* Non-income producing security
(A) This money market fund is advised by U.S. Bank National Association who also
serves as advisor for this fund. See also the notes to the financial
statements.
(B) The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 5.25%.
(C) Class B has a contingent deferred sales charge. For a description of a
possible redemption charge, see the notes to the financial statements.
BE--Belgium
Cl--Class
EU--Euro
RNC--Risparmio Non-Convertible
SK--Swedish Krona
79 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
STATEMENTS OF
NET ASSETS SEPTEMBER 30, 1999
INTERNATIONAL INDEX FUND (CONCLUDED)
- ---------------------------------------------------------------------------
At September 30, 1999, sector diversification of the Portfolio
was as follows:
SECTOR DIVERSIFICATION % OF
FOREIGN COMMON STOCK NET ASSETS VALUE (000)
---------- -----------
Banking 11.6% $ 15,783
Telecommunications 10.2% 13,830
Pharmaceuticals 8.3% 11,310
Electronics 8.3% 11,249
Oil and Gas 6.4% 8,649
Insurance 5.1% 7,024
Food Product Retailer 4.7% 6,365
Automotive 3.9% 5,350
Manufacturing 3.5% 4,710
Commercial Banks 3.1% 4,201
Construction Materials 2.8% 3,770
Retail Products 2.7% 3,679
Chemicals 2.6% 3,614
Consumer Products 2.5% 3,350
Beverages 2.0% 2,697
Transportation 1.7% 2,391
Cellular Telecommunications 1.7% 2,293
Machinery 1.6% 2,179
Metals and Mining 1.4% 1,894
Financial Services 1.2% 1,661
Real Estate 1.2% 1,652
Computers 1.1% 1,536
Cosmetics 0.9% 1,251
Multi-Industry 0.8% 1,060
Distribution 0.7% 965
Paper Products 0.7% 926
News Media 0.7% 910
Recreation 0.6% 843
Water 0.6% 819
Airlines 0.6% 819
Business Services 0.5% 662
Publishing 0.5% 646
Security 0.4% 542
Engineering 0.4% 536
Commodities 0.4% 520
Printing 0.3% 478
Photographic Equipment 0.3% 450
Aerospace/Defense 0.2% 341
Investment Companies 0.2% 218
Agriculture 0.1% 132
Energy 0.1% 88
Forestry 0.0% 30
----- --------
TOTAL FOREIGN COMMON STOCK 96.6% $131,423
TOTAL FOREIGN PREFERRED STOCK 0.5% 679
TOTAL FOREIGN WARRANTS 0.0% 10
TOTAL FOREIGN RIGHTS 0.0% 11
TOTAL FOREIGN CONVERTIBLE BONDS 0.0% 12
TOTAL RELATED PARTY
MONEY MARKET FUND 1.6% 2,134
----- --------
TOTAL INVESTMENTS 98.7% $134,269
OTHER ASSETS AND
LIABILITIES, NET 1.3% 1,764
----- --------
NET ASSETS 100.0% $136,033
===== ========
The accompanying notes are an integral part of the financial statements.
80 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
INTERNATIONAL FUNDS
THIS PAGE WAS INTENTIONALLY LEFT BLANK.
81 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
STATEMENTS OF
OPERATIONS FOR THE YEAR ENDED SEPTEMBER 30, 1999,
IN THOUSANDS
<TABLE>
<CAPTION>
EMERGING INTERNATIONAL INTERNATIONAL
MARKETS FUND FUND INDEX FUND
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 125 $ 799 $ 104
Dividends 276 4,032 2,530
Less: Foreign taxes withheld (22) (598) (209)
- --------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 379 4,233 2,425
========================================================================================================
EXPENSES:
Investment advisory fees 429 5,836 889
Less: Waiver of investment advisory fees (99) (767) (320)
Administrator fees 50 505 145
Transfer agent fees 72 173 47
Amortization of organizational costs 6 1 --
Custodian fees 33 467 127
Directors' fees 1 7 2
Registration fees 1 19 21
Professional fees 1 17 5
Printing 2 28 8
Pricing fees 1 11 --
Distribution fees - Class A 13 112 6
Distribution fees - Class B -- 36 4
Distribution fees - Class C -- 3 --
Other 1 6 29
- --------------------------------------------------------------------------------------------------------
TOTAL NET EXPENSES 511 6,454 963
========================================================================================================
Investment income (loss) - net (132) (2,221) 1,462
- --------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAINS (LOSSES)
ON INVESTMENTS AND FOREIGN CURRENCY
TRANSACTIONS - NET:
Net realized gain (loss) on investments (2,960) 37,390 (344)
Net realized loss on forward foreign currency contracts
and foreign currency transactions (144) (5,078) (26)
Net change in unrealized appreciation of investments 8,273 104,902 32,483
Net change in unrealized appreciation/depreciation of
forward foreign currency contracts, foreign currency
and translation of other assets and liabilities in
foreign currency 8 (2,768) (25)
- --------------------------------------------------------------------------------------------------------
NET GAIN ON INVESTMENTS 5,177 134,446 32,088
========================================================================================================
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $ 5,045 $132,225 $33,550
========================================================================================================
</TABLE>
The accompanying notes are an integral part of the financial statements.
82 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
INTERNATIONAL FUNDS
STATEMENTS OF
CHANGES IN NET ASSETS IN THOUSANDS
<TABLE>
<CAPTION>
EMERGING INTERNATIONAL INTERNATIONAL
MARKETS FUND FUND INDEX FUND(B)
- ----------------------------------------------------------------------------------------------------------------------------------
10/1/98 10/1/97 10/1/98 10/1/97 10/1/98 12/1/97 8/1/97
to to to to to to to
9/30/99 9/30/98 9/30/99 9/30/98 9/30/99 9/30/98 11/30/97
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Investment income (loss) - net $ (132) $ (53) $ (2,221) $ 1,320 $ 1,462 $ 1,616 $ 828
Net realized gain (loss) on investments (2,960) (3,379) 37,390 28,363 (344) 5,074 3,662
Net realized loss on forward foreign currency
contracts and foreign currency transactions (144) (66) (5,078) (12,864) (26) (108) (142)
Net change in unrealized appreciation/
depreciation of investments 8,273 (4,319) 104,902 (24,639) 32,483 (3,880) (28,010)
Net change in unrealized appreciation
depreciation of purchased options contracts,
forward foreign currency contracts, foreign
currency and translation of other assets and
liabilities in foreign currency 8 1 (2,768) 1,430 (25) 36 5
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting
from operations 5,045 (7,816) 132,225 (6,390) 33,550 2,738 (23,657)
- ----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment income - net:
Class A -- (32) (209) (107)(A) (37) (23) (3)
Class B -- (1) -- (74)(A) (3) (1) --
Class C -- -- -- -- -- -- --
Class Y -- -- (2,103) (9,364)(A) (1,798) (2,609) (512)
Net realized gain on investments:
Class A -- -- (2,619) (56) (145) -- --
Class B -- -- (172) (44) (11) -- --
Class C -- -- -- -- -- -- --
Class Y -- -- (20,724) (4,550) (8,207) -- --
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS -- (33) (25,827) (14,195) (10,201) (2,633) (515)
==================================================================================================================================
CAPITAL SHARE TRANSACTIONS(1):
Class A:
Proceeds from sales 284 778 105,801 217,153 10,825 1,057 49
Shares issued in connection with acquisition
of Piper Fund -- -- -- 47,464 -- -- --
Reinvestment of distributions -- 32 2,677 156 170 22 3
Payments for redemptions (2,125) (5,929) (111,891) (227,336) (9,974) (375) (215)
- ----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from Class A
transactions (1,841) (5,119) (3,413) 37,437 1,021 704 (163)
- ----------------------------------------------------------------------------------------------------------------------------------
Class B:
Proceeds from sales - FAIF 12 1 1,166 1,142 560 151 1
Proceeds from sales - Piper -- 28 -- -- -- -- --
Reinvestment of distributions - FAIF -- -- 169 114 14 1 --
Reinvestment of distributions - Piper -- 1 -- -- -- -- --
Payments for redemptions - FAIF -- -- (669) (367) (53) (18) --
Payments for redemptions - Piper -- (304) -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from Class B
transactions 12 (274) 666 889 521 134 1
- ----------------------------------------------------------------------------------------------------------------------------------
Class C:
Proceeds from sales -- -- 940 -- -- -- --
Reinvestment of distributions -- -- -- -- -- -- --
Payments for redemptions -- -- (30) -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from Class C transactions -- -- 910 -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Class Y
Proceeds from sales 32,241 8,789 162,038 244,177 6,825 26,388 34,854
Shares issued in connection with acquisition
of Piper Fund -- -- -- 3,757 -- -- --
Reinvestment of distributions -- -- 12,193 7,847 7,990 2,039 333
Payments for redemptions (3,467) (26) (121,781) (100,556) (10,815) (79,475) (65,749)
- ----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from Class Y
transactions 28,774 8,763 52,450 155,225 4,000 (51,048) (30,562)
- ----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital
share transactions 26,945 3,370 50,613 193,551 5,542 (50,210) (30,724)
- ----------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets 31,990 (4,479) 157,011 172,966 28,891 (50,105) (54,896)
NET ASSETS AT BEGINNING OF PERIOD 12,829 17,308 400,571 227,605 107,142 157,247 212,143
==================================================================================================================================
NET ASSETS AT END OF PERIOD (2) $ 44,819 $ 12,829 $557,582 $400,571 $136,033 $107,142 $157,247
==================================================================================================================================
</TABLE>
(1) See note 4 in the notes to the financial statements for additional
information.
(2) Includes undistributed (distributions in excess of) net investment income
(000) of $(330) and $(54) for Emerging Markets Fund, $(11,375) and $(10,519)
for International Fund, and $(450), $(47), and $1,019 for International
Index Fund as of September 30, 1999, September 30, 1998 and November 30,
1997, respectively.
(A) Represents a distribution in excess of net investment income due to the tax
treatment of foreign currency related transactions.
(B) The Statements of Changes in Net Assets for the International Index Fund
reflect the change of the Fund's year end from July 31st to November 30th,
and then to September 30th.
The accompanying notes are an integral part of the financial statements.
83 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
FINANCIAL HIGHLIGHTS FOR A SHARE OUTSTANDING, THROUGHOUT THE PERIODS
ENDED SEPTEMBER 30, UNLESS OTHERWISE INDICATED
<TABLE>
<CAPTION>
REALIZED AND
NET ASSET UNREALIZED DIVIDENDS DISTRIBUTIONS
VALUE NET GAINS OR FROM NET DISTRIBUTIONS FROM
BEGINNING INVESTMENT (LOSSES) ON INVESTMENT FROM RETURN OF
OF PERIOD INCOME (LOSS) INVESTMENTS INCOME CAPITAL GAINS CAPITAL
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
EMERGING MARKETS FUND
Class A(1)
1999(15) $ 5.61 $ (0.04) $ 1.20 $ -- $ -- $ --
1998 10.96 (0.15) (5.18) (0.02) -- --
1997 8.85 0.02 2.10 (0.01) -- --
1996(2) 8.84 0.01 -- -- -- --
1996(3) 7.20 0.01 1.63 -- -- --
1995(4) 9.14 -- (1.94) -- -- --
Class B - FAIF
1999(15) $ 5.60 $ (0.08) $ 1.20 $ -- $ -- $ --
1998(5) 7.27 -- (1.67) -- -- --
Class B - Piper
1998(6) $ 10.86 $ (0.08) $ (1.07) $ (0.02) $ -- $ --
1997(7) 10.13 0.00 0.73 -- -- --
Class Y
1999(15) $ 5.62 $ (0.02) $ 1.20 $ -- $ -- $ --
1998(5) 7.27 0.01 (1.66) -- -- --
- --------------------------------------------------------------------------------------------------------------------------
INTERNATIONAL FUND
Class A
1999(15) $ 12.55 $ (0.10) $ 3.97 $ (0.06)(C) $ (0.72) $ --
1998 13.18 0.06 0.02 (0.46)(C) (0.25) --
1997 10.28 0.01 3.04 (0.15)(C) -- --
1996 10.28 (0.02) 0.20 (0.18)(C) -- --
1995 10.21 -- 0.07 -- -- --
Class B
1999(15) $ 12.27 $ (0.20) $ 3.86 $ -- $ (0.72) $ --
1998 12.97 (0.07) 0.03 (0.41)(C) (0.25) --
1997 10.14 (0.08) 3.01 (0.10)(C) -- --
1996 10.20 (0.07) 0.17 (0.16)(C) -- --
1995 10.21 (0.03) 0.02 -- -- --
Class C
1999(8)(15) $ 14.32 $ (0.12) $ 1.37 $ -- $ -- $ --
Class Y
1999(15) $ 12.55 $ (0.06) $ 3.95 $ (0.07)(C) $ (0.72) $ --
1998 13.23 0.07 0.01 (0.51)(C) (0.25) --
1997 10.31 0.03 3.06 (0.17)(C) -- --
1996 10.30 (0.01) 0.22 (0.20)(C) -- --
1995 10.22 0.01 0.07 -- -- --
- --------------------------------------------------------------------------------------------------------------------------
INTERNATIONAL INDEX FUND(B)
Class A
1999(15) $ 10.69 $ 0.10 $ 3.13 $ (0.15) $ (0.85) $ --
1998(9) 10.94 0.11 (0.20) (0.16) -- --
1997(10) 12.32 0.05 (1.41) (0.02) -- --
1997(11) 10.64 0.10 1.70 (0.09) (0.02) (0.01)
1996(11) 10.45 0.07 0.17 (0.05) -- --
1995(11)(12) 10.00 -- 0.45 -- -- --
Class B
1999(15) $ 10.68 $ 0.06 $ 3.08 $ (0.08) $ (0.85) $ --
1998(9) 10.99 0.05 (0.21) (0.15) -- --
1997(13)(14) 11.08 -- (0.09) -- -- --
Class Y
1999(15) $ 10.71 $ 0.14 $ 3.14 $ (0.18) $ (0.85) $ --
1998(9) 10.99 0.14 (0.20) (0.22) -- --
1997(10) 12.37 0.06 (1.41) (0.03) -- --
1997(11) 10.69 0.13 1.70 (0.12) (0.02) (0.01)
1996(11) 10.48 0.09 0.18 (0.06) -- --
1995(11)(12) 10.00 0.01 0.47 -- -- --
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Returns are for the period indicated and have not been annualized.
(A) Excluding sales charges.
(B) The financial highlights for International Index Fund as set forth herein
include the historical financial highlights of the Qualivest International
Opportunities Fund Class A and Class Y shares. The assets of the
International Opportunities Fund were acquired by International Index Fund
on November 21, 1997. In connection with such acquisition, (i) Class A and
Class C shares of the Qualivest International Opportunities Fund were
exchanged for Class A shares of International Index Fund; and (ii) Qualivest
Class Y shares were exchanged for Class Y shares of International Index
Fund.
(C) Includes distributions in excess of net investment income due to tax
treatment of foreign currency related transactions.
(1) The financial highlights for Emerging Markets Fund as set forth herein
include the historical financial highlights of the Piper Emerging Markets
Growth Fund Class A shares. The assets of the Piper Emerging Markets Growth
Fund were acquired by Emerging Markets Fund on August 7, 1998. In connection
with such acquisition, Class A shares of the Piper Emerging Markets Growth
Fund were exchanged for Class A shares of the Emerging Markets Fund. On
August 7, 1998, the fund's advisor changed from Piper Capital Management,
Inc. to U.S. Bank N.A.
(2) For the three month period July 1, 1996, to September 30, 1996. All ratios
for the period have been annualized.
(3) Emerging Markets Growth Fund commenced operations and acquired the net
assets of Hercules Latin American Value Fund on June 21, 1996, via a
tax-free reorganization. Emerging Markets Growth Fund had no assets or
liabilities prior to the acquisition. Consequently, the information
presented for Emerging Markets Growth Fund prior to June 21, 1996,
represents the financial history of Hercules Latin American Value Fund. As a
result of the reorganization, the fund's subadvisor changed from Bankers
Trust Company to Edinburgh Fund Managers plc. On July 18, 1995, shareholders
of Hercules Latin American Value Fund approved a change in the fund's
advisor from Hercules International Management LLC to Piper Capital
Management Incorporated.
(4) For the period ended June 30.
84 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
INTERNATIONAL FUNDS
<TABLE>
<CAPTION>
RATIO OF
RATIO OF NET EXPENSES TO
NET ASSET RATIO OF INVESTMENT AVERAGE
VALUE NET ASSETS EXPENSES TO INCOME (LOSS) NET ASSETS PORTFOLIO
END OF TOTAL END OF AVERAGE TO AVERAGE (EXCLUDING TURNOVER
PERIOD RETURN (A) PERIOD (000) NET ASSETS NET ASSETS WAIVERS) RATE
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 6.77 20.68% $ 4,551 1.70% (0.54)% 2.02% 138%
5.61 (48.91) 5,384 1.96 (1.09) 3.43 48
10.96 23.91 16,998 2.00 0.17 3.34 105
8.85 0.11 + 13,772 2.00 0.26 4.09 0
8.84 22.78 13,936 2.00 0.26 3.54 140
7.20 (21.23) 22,624 2.00 0.15 3.47 161
$ 6.72 20.00% $ 13 2.45% (1.19)% 2.72% 138%
5.60 (22.97)+ 1 2.46 (0.43) 4.30 48
$ 9.69 (10.59)%+ $ -- 2.76% (2.24)% 4.12% 34%
10.86 7.21% 310 2.64 0.03 3.39 105
$ 6.80 21.00% $ 40,255 1.45% (0.35)% 1.73% 138%
5.62 (22.70)+ 7,444 1.46 0.83 3.30 48
- ------------------------------------------------------------------------------------------------------------
$ 15.64 32.16% $ 48,154 1.60% (0.71)% 1.76% 150%
12.55 1.11 40,204 1.69 0.13 1.81 102
13.18 30.03 8,003 1.92 (0.09) 1.92 96
10.28 1.84 1,964 1.97 (0.28) 1.97 100
10.28 0.69 876 1.93 (0.13) 2.06 57
$ 15.21 31.06% $ 4,338 2.35% (1.46)% 2.51% 150%
12.27 0.13 2,892 2.44 (0.64) 2.56 102
12.97 29.13 2,188 2.67 (0.94) 2.67 96
10.14 1.02 1,175 2.72 (0.96) 2.72 100
10.20 (0.10) 306 2.76 (0.95) 2.81 57
$ 15.57 8.73%+ $ 1,009 2.35% (1.22)% 2.53% 150%
$ 15.65 32.40% $504,081 1.35% (0.44)% 1.51% 150%
12.55 1.15 357,475 1.44 0.42 1.56 102
13.23 30.38 217,414 1.67 0.06 1.67 96
10.31 2.11 135,238 1.72 (0.06) 1.72 100
10.30 0.78 94,400 1.74 0.12 1.81 57
- ------------------------------------------------------------------------------------------------------------
$ 12.92 31.70% $ 3,437 1.00% 0.83% 1.25% 0%
10.69 (1.05)+ 1,873 0.99 1.21 1.22 0
10.94 (11.03)+ 1,270 0.92 0.98 1.21 0
12.32 17.03 1,605 0.98 0.90 1.28 3
10.64 2.29 2,005 1.06 0.84 1.35 6
10.45 4.50 + 20 1.40 0.23 1.54 0
$ 12.89 30.66% $ 700 1.75% 0.41% 2.01% 0%
10.68 (1.53)+ 118 1.74 0.72 1.97 0
10.99 (0.36)+ 1 1.29 0.00 1.29 0
$ 12.96 32.00% $131,896 0.75% 1.16% 1.00% 0%
10.71 (0.73)+ 105,151 0.74 1.42 0.97 0
10.99 (10.93)+ 155,976 0.66 1.23 0.95 0
12.37 17.24 210,538 0.73 1.15 1.03 3
10.69 2.56 142,478 0.81 1.18 1.10 6
10.48 4.80 + 60,073 1.18 1.32 1.39 0
- ------------------------------------------------------------------------------------------------------------
</TABLE>
(5) Class Y and Class B shares have been offered since August 10, 1998. All
ratios for the period have been annualized.
(6) Effective April 28, 1998 all shareholders were exchanged into Class A. Class
B share activity was discontinued. All ratios for the period have been
annualized.
(7) Class B shares have been offered since February 18, 1997. All ratios for the
period have been annualized.
(8) For the period ended September 30. Class C shares have been offered since
February 1, 1999. All ratios for the period have been annualized.
(9) For the period December 1, 1997 to September 30, 1998. All ratios for the
period have been annualized. The First American board of directors approved
a change in the fund's fiscal year end from November 30 to September 30,
effective September 30, 1998.
(10)For the period August 1, 1997 to November 30, 1997. All ratios for the
period have been annualized. The First American board of directors approved
a change in the fund's fiscal year end from July 31 to November 30,
effective November 30, 1997.
(11)For the period ended July 31.
(12)Commenced operations on July 3, 1995. All ratios for the period have been
annualized.
(13)Class B shares have been offered since November 24, 1997. All ratios for the
period have been annualized.
(14)For the period November 24, 1997 to November 30, 1997.
(15)Per share data calculated using average shares outstanding method.
85 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
SECTOR FUNDS
HEALTH SCIENCES
INVESTMENT OBJECTIVE
SEEKS LONG-TERM CAPITAL GROWTH BY INVESTING PRIMARILY IN
EQUITY SECURITIES OF HEALTH CARE RELATED COMPANIES
Mutual funds specializing in health care-related stocks were on sick leave
throughout the year. The Health Sciences Fund was vulnerable to problems
affecting this sector, posting a 6.08% return during the fiscal year ended
September 30, 1999.
During the first calendar quarter of 1999, the fund was repositioned from a
small-cap fund to a large-cap health care fund. Its weighted average market cap
increased from around $3 billion to over $30 billion. While the change is
designed to reduce exposure to small-cap stocks, the transition initially
affected fund performance. Still, performance has improved somewhat since April,
with the fund tracking its benchmark.
Interest rate hikes and political developments triggered volatility within the
health care sector. Even though large, successful health care companies continue
to grow between 13% to15% a year, rising interest rates have hurt stocks with
high valuations, triggering a selloff in large-cap pharmaceutical stocks. In
addition, concerns over government price controls on drugs affected sector
performance.
Despite their subpar performance during the fiscal year, large-cap
pharmaceutical companies remain attractive long-term growth prospects. More
importantly, the fact that the nation's population is aging should bode well for
these companies. With this in mind, we expect the health care sector to return
to favor, with the prices of health care stocks moving higher.
VALUE OF A $10,000 INVESTMENT
[PLOT POINTS CHART]
<TABLE>
<CAPTION>
FIRST
FIRST AMERICAN FIRST
AMERICAN HEALTH AMERICAN FRANK S&P LIPPER
HEALTH SCIENCES HEALTH RUSSELL HEALTH CARE HEALTH AND
SCIENCES FUND, CLASS A SCIENCES 2000 COMPOSITE BIOTECHNOLOGY
FUND, CLASS A ADJUSTED FUND, CLASS Y INDEX INDEX FUNDS AVERAGE
------------- -------- ------------- ----- ----- -------------
<S> <C> <C> <C> <C> <C> <C>
1/1996 $10,000 $ 9,475 $10,000 $10,000 $10,000 $10,000
9/1996 9,868 9,350 9,879 11,087 10,910 10,589
9/1997 12,197 11,556 12,239 14,767 14,937 13,319
9/1998 9,118 8,640 9,167 11,958 20,649 13,037
9/1999 9,673 9,165 9,771 14,239 21,235 14,913
</TABLE>
PAST PERFORMANCE OF THE FUND IS NOT INDICATIVE OF FUTURE PERFORMANCE.
ANNUALIZED PERFORMANCE SINCE
1 YEAR 3 YEAR INCEPTION
- --------------------------------------------------------------------------------
Class A 6.08% -0.66% -0.91%
- --------------------------------------------------------------------------------
Class A adjusted 0.55% -2.45% -2.35%
- --------------------------------------------------------------------------------
Class B 5.37% -1.38% -1.64%
- --------------------------------------------------------------------------------
Class B adjusted 0.37% -2.51% -2.33%
- --------------------------------------------------------------------------------
Class Y 6.59% -0.37% -0.63%
- --------------------------------------------------------------------------------
Russell 2000 19.07% 8.70% 10.12%
- --------------------------------------------------------------------------------
S&P Health Care 2.85% 24.86% 22.81%
- --------------------------------------------------------------------------------
Lipper Health/Biotechnology 13.54% 14.16% 9.90%
- --------------------------------------------------------------------------------
Past performance of the fund is not indicative of future performance.
The inception date of the Class A, Class B and Class Y shares is 1/31/96. The
performance reflected in the graph begins on 1/31/96. The performance reflected
in the table begins on the inception date of Class A, Class B and Class Y
shares.
Previously, the fund used the Russell 2000 Index as a benchmark. Going forward,
the fund will use the S&P Health Care Composite Index as a benchmark, as it is
better suited to the fund's objective.
Performance reflects voluntary fee waivers in effect. In absence of such fee
waivers, total returns would be reduced.
86 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
SECTOR FUNDS
SECTOR FUNDS
REAL ESTATE SECURITIES
INVESTMENT OBJECTIVE
SEEKS A COMBINATION OF ABOVE-AVERAGE CURRENT INCOME
AND LONG-TERM CAPITAL APPRECIATION
The fiscal year ended September 30, 1999 was a challenging period for the Real
Estate Securities Fund, as Real Estate Investment Trusts (REITS), which comprise
the majority of the fund's assets, experienced declining valuations during that
time. The fund tracked its benchmark, registering a -5.89% return for the
period.
Toward the beginning of the fiscal year, REITs were trading at premiums,
but during the global economic crisis, investors fled to the relative safety of
large cap stocks at the expense of small- to mid-cap value stocks, which
includes most REITs. That changed in April and May when REIT stocks climbed
nearly 15%, only to fall again during the third calendar quarter of 1999 due to
the changing economic environment.
Despite the impact of broader economic developments, many of the fund's
industrial real estate holdings performed well, including Alexandria Real Estate
Equities, a company that builds research labs for pharmaceutical corporations
and Boston Properties, a real estate development, redevelopment, acquisition,
management, operating and leasing business. At the same time, the fund continued
to provide yields exceeding that of the composite dividend yield of the stocks
in the S&P 500 Index, plus the opportunity for capital appreciation over time.
The outlook for the fund is optimistic, as markets show signs of recovery across
all property sectors. We expect to see more stable investment returns due to
solid earnings growth plus improving valuations throughout the coming year.
VALUE OF A $10,000 INVESTMENT
[PLOT POINTS CHART]
<TABLE>
<CAPTION>
FIRST
FIRST AMERICAN FIRST
AMERICAN REAL ESTATE AMERICAN MORGAN
REAL ESTATE SECURITIES REAL ESTATE STANLEY LIPPER
SECURITIES FUND, CLASS A SECURITIES REIT REAL ESTATE
FUND, CLASS A ADJUSTED FUND, CLASS Y INDEX FUNDS AVERAGE
------------- -------- ------------- ----- -------------
<S> <C> <C> <C> <C> <C>
6/1995 $10,000 $ 9,475 $10,000 $10,000 $10,000
9/1995 10,519 9,967 10,519 10,411 10,533
9/1996 12,431 11,778 12,469 12,313 12,321
9/1997 17,002 16,109 17,091 17,347 17,394
9/1998 14,890 14,108 15,009 14,868 14,538
9/1999 14,013 13,277 14,163 13,998 14,206
</TABLE>
PAST PERFORMANCE OF THE FUND IS NOT INDICATIVE OF FUTURE PERFORMANCE.
ANNUALIZED PERFORMANCE SINCE
1 YEAR 3 YEAR INCEPTION
- --------------------------------------------------------------------------------
Class A -5.89% 4.07% 7.44%
- --------------------------------------------------------------------------------
Class A adjusted -10.80% 2.21% 6.01%
- --------------------------------------------------------------------------------
Class B -6.68% 3.29% 6.57%
- --------------------------------------------------------------------------------
Class B adjusted -11.10% 2.11% 5.94%
- --------------------------------------------------------------------------------
Class Y -5.64% 4.34% 8.55%
- --------------------------------------------------------------------------------
Morgan Stanley REIT -5.85% 4.36% 8.23%
- --------------------------------------------------------------------------------
Lipper Real Estate -3.48% 3.90% 7.64%
- --------------------------------------------------------------------------------
Past performance of the fund is not indicative of future performance.
The inception date of the Class A and Class B shares is 9/29/95, and the
inception date for the Class Y shares is 6/30/95. The performance reflected in
the graph begins on 6/30/95. The performance reflected in the table for Class A
and Class B shares begins on 9/29/95, performance reflected for Class Y shares
begins on 6/30/95.
Performance reflects voluntary fee waivers in effect. In absence of such fee
waivers, total returns would be reduced.
87 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
SECTOR FUNDS
TECHNOLOGY
INVESTMENT OBJECTIVE
SEEKS LONG-TERM CAPITAL GROWTH BY INVESTING PRIMARILY
IN TECHNOLOGY-RELATED EQUITY SECURITIES
The technology sector was red hot during the past year, with many technology
companies experiencing dramatic growth along with attractive profits. The fund
participated in the technology boom, posting a 128.71% return during the fiscal
year ended September 30, 1999, and earning industry kudos as one of the
top-performing technology mutual funds.
Throughout the fiscal year, fund holdings were repositioned to pursue new
opportunities within the rapidly changing technology industry. For example,
during the second calendar quarter, the fund reduced its Internet-related
holdings to focus more on semiconductor manufacturers. Fund holdings were later
weighted toward personal computer manufacturers to capture additional gains.
This investment strategy paid off for fund shareholders. In addition, the fund
benefitted significantly from the purchase and sale of securities obtained in
initial public offerings.
Within the portfolio, two companies performed exceptionally well: America Online
and Conexant Systems. Shares of America Online increased nearly three times in
value, while shares of Conexant Systems, a company that provides semiconductor
products for a broad range of wireless communication applications, also jumped
in value.
Although the year ahead is likely to remain volatile for the technology
industry, the overall outlook for the fund is quite favorable. The expanding use
of the Internet coupled with a growing demand for high-speed digital access, new
and improved software applications and the nation's ongoing transformation from
a manufacturing to information service economy, all bode well for select areas
of technology. The fund remains well positioned to capitalize on opportunities
within this dynamic sector.
VALUE OF A $10,000 INVESTMENT
[PLOT POINTS CHART]
<TABLE>
<CAPTION>
FIRST
FIRST AMERICAN FIRST FRANK S&P LIPPER
AMERICAN TECHNOLOGY AMERICAN RUSSELL TECHNOLOGY SCIENCE &
TECHNOLOGY FUND, CLASS A TECHNOLOGY 2000 COMPOSITE TECHNOLOGY
FUND, CLASS A ADJUSTED FUND, CLASS Y INDEX INDEX FUNDS AVERAGE
------------- -------- ------------- ----- ----- -------------
<S> <C> <C> <C> <C> <C> <C>
4/1994 $10,000 $ 9,475 $10,000 $10,000 $10,000 $10,000
9/1994 11,572 10,965 11,584 10,217 10,766 10,837
9/1995 19,235 18,225 19,255 12,603 16,984 17,058
9/1996 22,813 21,615 22,885 14,260 20,862 18,411
9/1997 26,853 25,443 26,993 18,993 33,875 24,893
9/1998 22,371 21,197 22,563 15,381 38,360 23,402
9/1999 51,165 48,479 51,788 18,314 67,050 47,242
</TABLE>
PAST PERFORMANCE OF THE FUND IS NOT INDICATIVE OF FUTURE PERFORMANCE.
ANNUALIZED PERFORMANCE SINCE
1 YEAR 3 YEAR 5 YEAR INCEPTION
- --------------------------------------------------------------------------------
Class A 128.71% 30.90% 34.62% 33.79%
- --------------------------------------------------------------------------------
Class A adjusted 116.76% 28.56% 33.18% 32.49%
- --------------------------------------------------------------------------------
Class B 127.09% 29.99% 33.59% 35.92%
- --------------------------------------------------------------------------------
Class B adjusted 122.09% 29.20% 33.47% 35.86%
- --------------------------------------------------------------------------------
Class Y 129.52% 31.29% 34.92% 34.05%
- --------------------------------------------------------------------------------
Russell 2000 19.07% 8.70% 12.38% 11.81%
- --------------------------------------------------------------------------------
S&P Technology 74.78% 47.57% 44.17% 42.04%
- --------------------------------------------------------------------------------
Lipper Science & Technology 89.30% 31.64% 29.76% 28.37%
- --------------------------------------------------------------------------------
Past performance of the fund is not indicative of future performance.
The inception date of the Class A and Y shares is 4/4/94, and the inception date
for the Class B shares is 8/15/94. The performance reflected in the graph begins
on 4/30/94. The performance reflected in the table for Class A and Class Y
shares begins on 4/4/94 and Class B shares begin on 8/15/94.
Previously, the fund used the Russell 2000 Index as a benchmark. Going forward,
the fund will use the S&P Technology Composite Index as a benchmark, as it is
better suited to the fund's objective.
Performance reflects voluntary fee waivers in effect. In absence of such fee
waivers, total returns would be reduced.
88 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
SECTOR FUNDS
STATEMENTS OF
NET ASSETS SEPTEMBER 30, 1999
HEALTH SCIENCES FUND
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
COMMON STOCKS -- 94.3%
HEALTH CARE -- 94.3%
BIOTECHNOLOGY -- 18.0%
Amgen* 5,000 $ 407
Biogen* 5,500 433
Centocor* 9,000 527
Genentech* 700 102
IDEC Pharmaceuticals* 700 66
Immunex* 1,400 61
Lifecore Biomedical* 38,000 523
MedImmune* 1,500 149
Protein Design Laboratories* 10,000 361
----------
2,629
----------
DIVERSIFIED HEALTH CARE -- 16.7%
Allergan 5,000 550
American Home Products 7,300 303
Bristol-Myers Squibb 7,000 473
Johnson & Johnson 6,600 606
Warner Lambert 7,700 511
----------
2,443
----------
DRUGS -- 26.3%
Alza, Cl A* 7,700 330
Elan, ADR* 13,500 453
Glaxo Wellcome, ADR 2,700 140
Merck 7,200 467
Pfizer 30,000 1,078
Pharmacia & Upjohn 9,300 462
Schering Plough 9,600 419
Sepracor* 2,000 151
SmithKline Beecham, ADR 6,000 346
----------
3,846
----------
MANAGED CARE -- 2.6%
Express Scripts, Cl A* 4,800 376
----------
MEDICAL PRODUCTS AND SUPPLIES -- 25.6%
ATS Medical* 41,475 412
Bausch & Lomb 2,000 132
Baxter International 5,500 331
Becton Dickinson 11,700 328
Biomet 4,200 111
Boston Scientific* 18,000 444
Guidant 9,200 493
Medtronic 15,600 554
Micro Therapeutics* 34,000 391
Novoste* 6,500 116
Perclose* 6,000 279
St. Jude Medical* 4,400 139
----------
3,730
----------
REAL ESTATE INVESTMENT TRUST -- 3.8%
Healthcare Realty Trust 15,000 280
Nationwide Health Properties 16,000 266
----------
546
----------
SPECIAL CARE -- 0.9%
Nanogen* 18,500 134
----------
HEALTH SCIENCES FUND (CONCLUDED)
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
SPECIAL SERVICES -- 0.4%
HEALTHSOUTH* 10,000 $ 61
----------
TOTAL HEALTH CARE 13,765
----------
TOTAL COMMON STOCKS
(Cost $12,899) 13,765
----------
RELATED PARTY MONEY MARKET FUND -- 3.8%
First American Prime Obligations
Fund (A) 558,778 559
----------
TOTAL RELATED PARTY MONEY MARKET FUND
(Cost $559) 559
----------
TOTAL INVESTMENTS -- 98.1%
(Cost $13,458) 14,324
----------
OTHER ASSETS AND LIABILITIES, NET -- 1.9%(B) 280
----------
NET ASSETS:
Portfolio Capital--Class A
($.0001 par value--20 billion authorized)
based on 167,782 outstanding shares $ 2,099
Portfolio Capital--Class B
($.0001 par value--20 billion authorized)
based on 128,306 outstanding shares 1,198
Portfolio Capital--Class Y
($.0001 par value--20 billion authorized)
based on 1,472,978 outstanding shares 10,626
Accumulated net realized loss on investments (185)
Net unrealized appreciation of investments 866
----------
TOTAL NET ASSETS -- 100.0% $ 14,604
----------
Net asset value and redemption price
per share--Class A $ 8.24
Maximum sales charge of 5.25% (C) 0.46
----------
Offering price per share--Class A $ 8.70
----------
Net asset value and offering price
per share--Class B (D) $ 8.02
----------
Net asset value, offering price, and redemption
price per share--Class Y $ 8.28
----------
* Non-income producing security
(A) This money market fund is advised by U.S. Bank National Association who also
serves as advisor for this fund. See the notes to the financial statements.
(B) Other assets and liabilities representing greater than 5% of total net
assets include the following (000):
Cash collateral received for securities on loan $ 2,000
Payable upon return of securities on loan $(2,000)
(C) The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 5.25%.
(D) Class B has a contingent deferred sales charge. For a description of a
possible redemption charge, see the notes to the financial statements.
ADR--American Depository Receipt
Cl--Class
The accompanying notes are an integral part of the financial statements.
89 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
STATEMENTS OF
NET ASSETS SEPTEMBER 30, 1999
REAL ESTATE SECURITIES FUND
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
COMMON STOCKS -- 95.3%
REAL ESTATE INVESTMENT TRUSTS -- 95.3%
DIVERSIFIED -- 9.7%
Colonial Properties Trust 35,000 $ 936
Crescent Real Estate Equities 55,000 990
Duke Realty Investments 76,400 1,490
Glenborough Realty Trust 28,000 462
Pennsylvania Real Estate Investment Trust 45,000 849
Rouse Company 26,000 598
----------
5,325
----------
FINANCIAL SERVICES -- 2.9%
Anthracite Mortgage Capital 90,000 619
Charles E. Smith Residential Realty 10,000 342
Cousins Properties 18,000 611
----------
1,572
----------
HEALTH CARE FACILITIES -- 1.8%
Health Care 27,000 540
HRPT Properties Trust 40,000 465
----------
1,005
----------
HOTELS -- 5.7%
Felcor Lodging Trust 16,000 280
Hospitality Properties Trust 45,000 993
Host Marriott 55,000 522
Innkeepers USA Trust 60,000 499
Lasalle Hotel Properties 28,300 366
Starwood Hotels and Resorts World Wide 20,000 446
----------
3,106
----------
OFFICE/INDUSTRIAL -- 28.2%
Amb Property 55,000 1,165
Arden Realty Group 45,000 979
Beacon Capital Partnership* (A) 33,750 447
Bedford Property Investors 10,000 169
Boston Properties 38,000 1,166
Brandywine Realty Trust 35,000 569
Cabot Industrial Trust 35,000 674
Centerpoint Properties 19,000 628
Equity Office Properties Trust 130,000 3,023
Great Lakes Real Estate 41,000 617
Liberty Property Trust 33,000 749
Mack Cali Realty 30,000 804
Prologis Trust 72,000 1,359
Reckson Associates 19,000 395
SL Green Realty 35,000 718
Spieker Properties 40,000 1,388
Trizec Hahn 32,000 606
----------
15,456
----------
RESIDENTIAL -- 20.0%
Apartment Investment & Management 25,000 956
Archstone Community Trust 92,000 1,777
Avalonbay Communities 40,000 1,355
Chateau Communities 32,000 832
Equity Residential Properties Trust 70,000 2,966
REAL ESTATE SECURITIES FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
Gables Residential Trust 35,000 $ 840
Home Properties of New York 24,000 640
Post Properties 22,100 869
United Dominion Realty Trust 67,000 750
----------
10,985
----------
RETAIL -- 17.3%
Bradley Real Estate 45,000 827
CBL & Associates Properties 25,000 611
Chelsea GCA Realty 20,000 632
Excel Legacy* 27,100 113
Federal Realty Investment Trust 35,000 733
JDN Realty 17,000 349
Kimco Realty 15,000 536
Macerich 25,000 578
Mills 36,000 641
New Plan Excel Realty Trust 54,000 962
Simon Property Group 75,000 1,683
Taubman Centers 26,000 299
Vornado Realty Trust 47,000 1,528
----------
9,492
----------
SELF STORAGE -- 4.2%
Public Storage 60,000 1,511
Storage USA 30,000 825
----------
2,336
----------
SPECIALTY REAL ESTATE -- 5.5%
Alexandria Real Estate Equities 20,000 589
Capital Automotive 45,000 557
Fortress Investment* (A) 35,000 591
Franchise Finance of America 30,000 701
Golf Trust of America 10,000 197
Prison Realty 35,000 376
----------
3,011
----------
TOTAL REAL ESTATE INVESTMENT TRUSTS 52,288
----------
TOTAL COMMON STOCKS
(Cost $59,048) 52,288
----------
PREFERRED STOCK -- 0.2%
Walden Residential Properties 10,000 155
----------
TOTAL PREFERRED STOCK
(Cost $238) 155
----------
CONVERTIBLE BOND -- 1.7%
Avatar Holdings, 31.4465 shares
7.000%, 04/01/05 $ 1,000 920
----------
TOTAL CONVERTIBLE BOND
(Cost $1,022) 920
----------
WARRANT -- 0.0%
Walden Residential Properties* 10,000 2
----------
TOTAL WARRANT
(Cost $12) 2
----------
90 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
SECTOR FUNDS
REAL ESTATE SECURITIES FUND (CONCLUDED)
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
RELATED PARTY MONEY MARKET FUND -- 0.7%
First American Prime Obligations
Fund (B) 398,555 $ 399
----------
TOTAL RELATED PARTY MONEY MARKET FUND
(Cost $399) 399
----------
TOTAL INVESTMENTS -- 97.9%
(Cost $60,719) 53,764
----------
OTHER ASSETS AND LIABILITIES, NET -- 2.1%(C) 1,127
----------
NET ASSETS:
Portfolio Capital--Class A
($.0001 par value--2 billion authorized)
based on 140,927 outstanding shares $ 1,880
Portfolio Capital--Class B
($.0001 par value--2 billion authorized)
based on 205,052 outstanding shares 2,741
Portfolio Capital--Class Y
($.0001 par value--2 billion authorized)
based on 4,740,909 outstanding shares 60,677
Distributions in excess of net investment income (19)
Accumulated net realized loss on investments (3,433)
Net unrealized depreciation of investments (6,955)
----------
TOTAL NET ASSETS -- 100.0% $ 54,891
----------
Net asset value and redemption price
per share--Class A $ 10.78
Maximum sales charge of 5.25% (D) 0.60
----------
Offering price per share--Class A $ 11.38
----------
Net asset value and offering price
per share--Class B (E) $ 10.69
----------
Net asset value, offering price, and redemption
price per share--Class Y $ 10.80
----------
* Non-income producing security
(A) Security sold within the terms of a private placement memorandum, exempt
from registration under section 144A of the Securities Act of 1933, as
amended, and may be sold only to dealers in that program or other "qualified
institutional investors."
(B) This money market fund is advised by U.S. Bank National Association who also
serves as advisor for this fund. See also the notes to the financial
statements.
(C) Other assets and liabilities representing greater than 5% of total net
assets include the following (000):
Cash collateral received for securities on loan $ 13,999
Payable upon return of securities on loan $(13,999)
(D) The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 5.25%.
(E) Class B has a contingent deferred sales charge. For a description of a
possible redemption charge, see the notes to the financial statements.
The accompanying notes are an integral part of the financial statements.
TECHNOLOGY FUND
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
COMMON STOCKS -- 99.4%
TECHNOLOGY -- 79.6%
COMPUTER HARDWARE -- 10.4%
Copper Mountain Networks* 18,000 $ 1,577
Dell Computer* 120,000 5,018
Extreme Networks* 45,000 2,849
Juniper Networks* 23,700 4,315
Sun Microsystems* 140,000 13,020
----------
26,779
----------
COMPUTER NETWORKING -- 9.0%
Agile Software* 49,200 3,149
Bluestone Software* 4,700 108
Cisco Systems* 170,000 11,655
Cobalt Group* 123,000 1,188
Commerce One* 17,600 1,720
Digex* 100,000 2,369
Egain Communication* 24,000 444
Internap Network Services* 20,000 892
Kana Communications* 23,400 1,167
Silverstream Software* 4,400 137
Watchguard Technologies* 22,500 338
----------
23,167
----------
COMPUTER SERVICES -- 18.9%
America Online* 75,000 7,800
BMC Software* 100,000 7,156
Electronic Arts* 60,000 4,343
International Network Services* 30,000 1,631
Legato Systems* 90,000 3,924
Microsoft* 125,000 11,320
Siebel Systems* 60,000 3,998
USWeb* 110,000 3,774
Veritas Software* 30,000 2,278
Visual Networks* 55,000 2,334
----------
48,558
----------
COMPUTER SOFTWARE -- 17.5%
Allaire 50,000 2,800
C-Net* 70,000 3,920
Concord Communications* 50,000 1,987
Esps* 200,000 1,712
Exodus Communications* 30,000 2,162
F5 Networks* 45,000 3,060
Inet Technologies* 40,000 1,596
J.D. Edwards & Company* 100,000 2,072
Latitude Communication* 90,000 2,627
Oracle Systems Corporation* 90,400 4,113
Packeteer* 50,000 1,703
Persistence Software* 120,000 3,428
Portal Software* 50,000 1,938
Primus Knowledge Solutions* 33,000 910
SalesLogix* 112,500 2,250
Sap ADR 133,900 5,055
Telemate.Net Software* 124,800 1,747
Vignette* 20,000 1,810
----------
44,890
----------
91 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
STATEMENTS OF
NET ASSETS SEPTEMBER 30, 1999
TECHNOLOGY FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
ELECTRONIC SEMICONDUCTORS -- 16.4%
Altera* 75,000 $ 3,253
Conexant Systems* 35,000 2,543
Cypress Semiconductor* 100,000 2,150
Intel 135,000 10,032
Jds Uniphase* 45,000 5,121
Maxim Integrated Products* 40,000 2,524
MKS Instruments* 85,000 1,891
PMC-Sierra* 25,000 2,313
RF Micro Devices* 50,000 2,288
Taiwan Semiconductor, ADR* 254,000 7,493
Xilinx* 40,000 2,621
----------
42,229
----------
EQUIPMENT SEMICONDUCTORS -- 7.4%
Applied Materials* 80,000 6,215
ASM Lithography Holding H.V.* 90,000 6,035
KLA-Tencor* 40,000 2,600
Teradyne* 119,000 4,195
----------
19,045
----------
TOTAL TECHNOLOGY 204,668
----------
BASIC MATERIALS -- 0.5%
Atmi* 35,000 1,306
----------
CAPITAL GOODS -- 1.8%
Brocade Communications Systems* 5,000 1,050
Dupont Photomasks* 75,000 3,455
Musicmaker.com* 25,000 258
----------
4,763
----------
COMMUNICATION EQUIPMENT -- 9.8%
Ciena* 60,000 2,190
General Instrument* 150,000 7,219
Lucent Technologies 80,000 5,190
Nokia, ADR 115,000 10,328
Viasat* 8,000 143
----------
25,070
----------
COMMUNICATION SERVICES -- 3.9%
Allegiance Telecommunications* 60,000 3,157
Clarent* 30,000 1,528
Covad Communications Group* 72,500 3,161
Time Warner Telecommunications, Cl A* 100,000 2,088
----------
9,934
----------
Consumer Cyclicals -- 3.8%
Amazon.com* 30,000 2,398
Ashford.com* 150,000 1,383
Doubleclick* 15,000 1,787
Etoys* 60,000 3,994
Freeshop.com* 15,000 172
----------
9,734
----------
CONSUMER STAPLES -- 0.0%
Tivo* 500 15
----------
TOTAL COMMON STOCKS
(Cost $178,356) 255,490
----------
TECHNOLOGY FUND (CONCLUDED)
DESCRIPTION SHARES VALUE (000)
- ---------------------------------------------------------------------------
WARRANTS -- 0.0%
Optisystems* 100,000 $ 131
----------
TOTAL WARRANTS
(Cost $71) 131
----------
RELATED PARTY MONEY MARKET FUND -- 1.4%
First American Prime Obligation
Fund (A) 3,655,048 3,655
----------
TOTAL RELATED PARTY MONEY MARKET FUND
(Cost $3,655) 3,655
----------
TOTAL INVESTMENTS -- 100.8%
(Cost $182,082) 259,276
----------
OTHER ASSETS AND LIABILITIES, NET -- (0.8%) (B) (2,299)
----------
NET ASSETS:
Portfolio Capital--Class A
($.0001 par value--2 billion authorized)
based on 627,985 outstanding shares $ 11,412
Portfolio Capital--Class B
($.0001 par value--2 billion authorized)
based on 640,255 outstanding shares 11,628
Portfolio Capital--Class Y
($.0001 par value--2 billion authorized)
based on 6,196,518 outstanding shares 83,954
Accumulated net realized gain on investments 72,789
Net unrealized appreciation of investments 77,194
----------
TOTAL NET ASSETS -- 100.0% $ 256,977
----------
Net asset value and redemption price
per share--Class A $ 34.22
Maximum sales charge of 5.25% (C) 1.90
----------
Offering price per share--Class A $ 36.12
----------
Net asset value and offering price
per share--Class B (D) $ 32.59
----------
Net asset value, offering price, and redemption
price per share--Class Y $ 34.64
----------
* Non-income producing security
(A) This money market fund is advised by U.S. Bank National Association who also
serves as advisor for this fund. See the notes to the financial statements.
(B) Other assets and liabilities representing greater than 5% of total net
assets include the following (000):
Cash collateral received for securities on loan $ 77,305
Payable upon return of securities on loan $(77,305)
(C) The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 5.25%.
(D) Class B has a contingent deferred sales charge. For a description of a
possible redmption charge, see the notes to the financial statements.
ADR--American Depository Receipt
Cl--Class
The accompanying notes are an integral part of the financial statements.
92 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
SECTOR FUNDS
STATEMENT OF
ASSETS AND LIABILITIES SEPTEMBER 30, 1999 IN THOUSANDS
<TABLE>
<CAPTION>
TECHNOLOGY
FUND
- ----------------------------------------------------------------------------------------------------------------------
<S> <C>
ASSETS:
Investment securities, at value (cost $182,082) $259,276
Cash 10
Investments securities sold 17,536
RECEIVABLES:
Accrued income 14
Capital shares sold 435
Other assets 19
Cash collateral received for securities on loan 78,201
- ----------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS 355,491
======================================================================================================================
LIABILITIES:
PAYABLES:
Accrued expenses 211
Securities purchased 19,857
Capital shares redeemed 245
Payable upon return of securities on loan 78,201
- ----------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 98,514
======================================================================================================================
TOTAL NET ASSETS 256,977
======================================================================================================================
COMPOSITION OF NET ASSETS:
Portfolio capital shares - Class A ($.0001 par value - 2 billion authorized) based on 627,985 outstanding
shares 11,412
Portfolio capital shares - Class B ($.0001 par value - 2 billion authorized) based on 640,255 outstanding
shares 11,628
Portfolio capital shares - Class Y ($.0001 par value - 2 billion authorized) based on 6,196,518
outstanding shares 83,954
Accumulated net realized gain on investments 72,789
Net unrealized appreciation of investments 77,194
- ----------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS $256,977
======================================================================================================================
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE - CLASS A $ 34.22
======================================================================================================================
Maximum sales charge of 5.25% (1) 1.90
- ----------------------------------------------------------------------------------------------------------------------
OFFERING PRICE PER SHARE - CLASS A $ 36.12
======================================================================================================================
NET ASSET VALUE AND OFFERING PRICE PER SHARE - CLASS B (2) $ 32.59
======================================================================================================================
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE - CLASS Y $ 34.22
======================================================================================================================
</TABLE>
(1) The offer price is calculated by dividing the net asset value by 1 minus
maximum sales charge of 5.25%.
(2) Class B has a contingent deferred sales charge. For a description of a
possible redemption charge, see the notes to the financial statements.
The accompanying notes are an integral part of the financial statements.
93 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
STATEMENTS OF
OPERATIONS FOR THE YEAR ENDED SEPTEMBER 30, 1999,
IN THOUSANDS
<TABLE>
<CAPTION>
HEALTH SCIENCES REAL ESTATE TECHNOLOGY
FUND SECURITIES FUND FUND
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 49+ $ 206+ $ 459+
Dividends 192 3,980 184*
- -----------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 241 4,186 643
===========================================================================================================
EXPENSES:
Investment advisory fees 131 445 1,253
Less: Waiver of investment advisory fees (28) (80) (25)
Administrator fees 21 69 195
Transfer agent fees 36 43 96
Amortization of organizational costs -- 2 2
Custodian fees 6 19 54
Directors' fees -- 1 3
Registration fees 1 3 7
Professional fees 1 2 7
Printing 1 4 11
Distribution fees - Class A 3 5 31
Distribution fees - Class B 7 28 134
Other -- 3 6
- -----------------------------------------------------------------------------------------------------------
TOTAL NET EXPENSES 179 544 1,774
===========================================================================================================
Investment income (loss) - net 62 3,642 (1,131)
- -----------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAINS (LOSSES)
ON INVESTMENTS - NET:
Net realized gain (loss) on investments 873 (2,768) 75,918
Net change in unrealized appreciation (depreciation) of
investments 717 (4,255) 64,625
- -----------------------------------------------------------------------------------------------------------
NET GAIN (LOSS) ON INVESTMENTS 1,590 (7,023) 140,543
===========================================================================================================
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS $1,652 $ (3,381) $139,412
===========================================================================================================
</TABLE>
+ Includes income from securities lending program. See the Notes to the
Financial Statements for additional information.
* Includes foreign taxes withheld.
The accompanying notes are an integral part of the financial statements.
94 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
SECTOR FUNDS
STATEMENTS OF
CHANGES IN NET ASSETS IN THOUSANDS
<TABLE>
<CAPTION>
HEALTH REAL ESTATE TECHNOLOGY
SCIENCES FUND SECURITIES FUND FUND
- --------------------------------------------------------------------------------------------------------------------------
10/1/98 10/1/97 10/1/98 10/1/97 10/1/98 10/1/97
to to to to to to
9/30/99 9/30/98 9/30/99 9/30/98 9/30/99 9/30/98
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Investment income (loss) - net $ 62 $ 91 $ 3,642 $ 3,197 $ (1,131) $ (663)
Net realized gain (loss) on investments 873 (247) (2,768) (155) 75,918 6,144
Net change in unrealized appreciation (depreciation)
of investments 717 (8,895) (4,255) (11,911) 64,625 (30,511)
- --------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations 1,652 (9,051) (3,381) (8,869) 139,412 (25,030)
- --------------------------------------------------------------- ---------- ---------- ---------- --------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment income - net:
Class A (2) (1) (103) (113)(A) -- --
Class B -- -- (135) (150)(A) -- --
Class Y (69) (82) (3,471) (3,266)(A) -- --
Net realized gain on investments:
Class A (5) (287) -- (52) (394) (492)
Class B (3) (74) -- (78) (372) (562)
Class Y (103) (5,049) -- (1,126) (4,508) (8,701)
Tax return of capital:
Class A -- -- (4) (1) -- --
Class B -- -- (6) (1) -- --
Class Y -- -- (122) (17) -- --
- --------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS (182) (5,493) (3,841) (4,804) (5,274) (9,755)
==========================================================================================================================
CAPITAL SHARE TRANSACTIONS(1):
Class A:
Proceeds from sales 1,237 2,193 368 990 55,576 129,853
Reinvestment of distributions 6 99 93 137 365 341
Payments for redemptions (1,967) (146) (751) (753) (51,670) (126,833)
- --------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from Class A
transactions (724) 2,146 (290) 374 4,271 3,361
- --------------------------------------------------------------------------------------------------------------------------
Class B:
Proceeds from sales 554 405 748 820 5,643 1,974
Reinvestment of distributions 3 74 109 205 367 551
Payments for redemptions (191) (65) (1,384) (615) (2,456) (1,426)
- --------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from Class B
transactions 366 414 (527) 410 3,554 1,099
- --------------------------------------------------------------------------------------------------------------------------
Class Y
Proceeds from sales 441 6,410 21,511 46,805 26,847 48,376
Reinvestment of distributions 9 592 468 954 968 1,656
Payments for redemptions (11,597) (12,987) (22,377) (17,466) (28,988) (66,206)
- --------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from Class Y
transactions (11,147) (5,985) (398) 30,293 (1,173) (16,174)
- --------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital share
transactions (11,505) (3,425) (1,215) 31,077 6,652 (11,714)
- --------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets (10,035) (17,969) (8,437) 17,404 140,790 (46,499)
NET ASSETS AT BEGINNING OF PERIOD 24,639 42,608 63,328 45,924 116,187 162,686
==========================================================================================================================
NET ASSETS AT END OF PERIOD (2) $ 14,604 $ 24,639 $ 54,891 $ 63,328 $256,977 $116,187
==========================================================================================================================
</TABLE>
(1) See note 4 in the notes to the financial statements for additional
information.
(2) Includes undistributed (distributions in excess of) net investment income
(000) of $0 and $9 for Health Sciences Fund, $(19) and $(232) for Real
Estate Securities Fund and accumulated net investment loss of $0 and $(1)
for Technology Fund at September 30, 1999, and September 30, 1998,
respectively.
(A) Includes a distribution in excess of net investment income.
The accompanying notes are an integral part of the financial statements.
95 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
FINANCIAL HIGHLIGHTS FOR A SHARE OUTSTANDING, THROUGHOUT THE PERIODS
ENDED SEPTEMBER 30, UNLESS OTHERWISE INDICATED
<TABLE>
<CAPTION>
REALIZED AND
NET ASSET UNREALIZED DIVIDENDS DISTRIBUTIONS
VALUE NET GAINS OR FROM NET DISTRIBUTIONS FROM
BEGINNING INVESTMENT (LOSSES) ON INVESTMENT FROM RETURN OF
OF PERIOD INCOME (LOSS) INVESTMENTS INCOME CAPITAL GAINS CAPITAL
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
HEALTH SCIENCES FUND
Class A
1999 $ 7.82 $ 0.01 $ 0.46 $ (0.01) $ (0.04) $
1998 12.05 0.01 (2.78) -- (1.46) --
1997 9.86 (0.01) 2.30 -- (0.10) --
1996(1) 10.00 0.01 (0.14) (0.01) -- --
Class B
1999 $ 7.65 $ 0.01 $ 0.40 $ -- $ (0.04) $
1998 11.90 (0.02) (2.77) -- (1.46) --
1997 9.81 (0.01) 2.20 -- (0.10) --
1996(1) 10.00 (0.02) (0.16) (0.01) -- --
Class Y
1999 $ 7.84 $ 0.04 $ 0.48 $ (0.04) $ (0.04) $
1998 12.08 0.03 (2.78) (0.03) (1.46) --
1997 9.87 (0.01) 2.33 (0.01) (0.10) --
1996(1) 10.00 0.03 (0.15) (0.01) -- --
- ---------------------------------------------------------------------------------------------------------------
REAL ESTATE SECURITIES
FUND
Class A
1999 $ 12.17 $ 0.65 $ (1.36) $ (0.67) $ -- $ (0.01)
1998 14.97 0.63 (2.40) (0.70)(B) (0.33) --
1997 11.52 0.72 3.42 (0.65) (0.03) (0.01)
1996 10.38 0.52 1.30 (0.51) -- (0.17)
1995(2) 10.37 -- 0.01 -- -- --
Class B
1999 $ 12.08 $ 0.55 $ (1.34) $ (0.57) $ -- $ (0.03)
1998 14.86 0.52 (2.37) (0.60)(B) (0.33) --
1997 11.46 0.63 3.38 (0.57) (0.03) (0.01)
1996 10.37 0.44 1.27 (0.45) -- (0.17)
1995(2) 10.37 -- -- -- -- --
Class Y
1999 $ 12.19 $ 0.68 $ (1.35) $ (0.69) $ -- $ (0.03)
1998 14.99 0.67 (2.40) (0.74)(B) (0.33) --
1997 11.53 0.74 3.43 (0.67) (0.03) (0.01)
1996 10.37 0.57 1.29 (0.53) -- (0.17)
1995(3) 10.00 0.13 0.39 (0.11) -- (0.04)
- ---------------------------------------------------------------------------------------------------------------
TECHNOLOGY FUND
Class A
1999 $ 15.60 $ (0.18) $ 19.55 $ -- $ (0.75) $ --
1998 20.20 (0.13) (3.26) -- (1.21) --
1997 19.25 (0.11) 3.12 -- (2.06) --
1996 18.24 (0.05) 2.95 -- (1.89) --
1995 11.19 (0.03) 7.31 -- (0.23) --
Class B
1999 $ 14.99 $ (0.34) $ 18.69 $ -- $ (0.75) $ --
1998 19.58 (0.24) (3.14) -- (1.21) --
1997 18.85 (0.20) 2.99 -- (2.06) --
1996 18.02 (0.14) 2.86 -- (1.89) --
1995 11.17 (0.04) 7.12 -- (0.23) --
Class Y
1999 $ 15.73 $ (0.13) $ 19.79 $ -- $ (0.75) $ --
1998 20.29 (0.08) (3.27) -- (1.21) --
1997 19.29 (0.06) 3.12 -- (2.06) --
1996 18.24 (0.04) 2.98 -- (1.89) --
1995 11.19 (0.03) 7.31 -- (0.23) --
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
+ Returns are for the period indicated and have not been annualized.
(A) Excluding sales charges.
(B) Includes distributions in excess of net investment income.
(1) Commenced operations on January 31, 1996. All ratios for the period have
been annualized.
(2) Class A and Class B shares have been offered since September 29, 1995. All
ratios for the period have been annualized.
(3) Commenced operations on June 30, 1995. All ratios for the period have been
annualized.
96 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
SECTOR FUNDS
<TABLE>
<CAPTION>
RATIO OF
RATIO OF NET EXPENSES TO
NET ASSET RATIO OF INVESTMENT AVERAGE
VALUE NET ASSETS EXPENSES TO INCOME (LOSS) NET ASSETS PORTFOLIO
END OF TOTAL END OF AVERAGE TO AVERAGE (EXCLUDING TURNOVER
PERIOD RETURN (A) PERIOD (000) NET ASSETS NET ASSETS WAIVERS) RATE
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 8.24 6.08% $ 1,383 1.16% 0.11% 1.30% 53%
7.82 (25.24) 2,017 1.15 0.04 1.20 45
12.05 23.60 849 1.15 (0.20) 1.29 54
9.86 (1.32)+ 629 1.15 0.18 2.12 19
$ 8.02 5.37% $ 1,029 1.92% (0.64)% 2.05% 53%
7.65 (25.80) 645 1.90 (0.73) 1.95 45
11.90 22.69 516 1.90 (0.94) 2.04 54
9.81 (1.86)+ 281 1.90 (0.61) 2.87 19
$ 8.28 6.59% $ 12,192 0.90% 0.38% 1.05% 53%
7.84 (25.10) 21,977 0.90 0.27 0.95 45
12.08 23.89 41,243 0.90 0.06 1.04 54
9.87 (1.20)+ 12,485 0.90 0.43 1.87 19
- -----------------------------------------------------------------------------------------------------------
$ 10.78 (5.89)% $ 1,518 1.05% 5.52% 1.18% 21%
12.17 (12.42) 2,027 1.05 4.71 1.18 36
14.97 36.77 2,105 1.05 4.46 1.30 14
11.52 18.17 226 1.05 4.36 1.76 8
10.38 0.00 + 1 1.05 0.00 2.59 0
$ 10.69 (6.68)% $ 2,192 1.80% 4.75% 1.93% 21%
12.08 (13.04) 3,026 1.80 3.98 1.93 36
14.86 35.77 3,318 1.80 3.61 2.00 14
11.46 17.00 263 1.80 4.29 2.51 8
10.37 0.00 + 1 1.80 0.00 3.34 0
$ 10.80 (5.64)% $ 51,181 0.80% 5.78% 0.93% 21%
12.19 (12.18) 58,275 0.80 5.06 0.93 36
14.99 37.07 40,501 0.80 4.57 1.05 14
11.53 18.53 17,895 0.80 5.13 1.51 8
10.37 5.19 + 5,756 0.80 6.01 2.34 0
- -----------------------------------------------------------------------------------------------------------
$ 34.22 128.71% $ 21,491 1.15% (0.80)% 1.16% 184%
15.60 (16.69) 7,703 1.15 (0.60) 1.15 124
20.20 17.71 5,564 1.15 (0.59) 1.17 150
19.25 18.60 4,799 1.15 (0.85) 1.26 119
18.24 66.22 1,464 1.13 (0.61) 1.55 74
$ 32.59 127.09% $ 20,866 1.90% (1.56)% 1.91% 184%
14.99 (17.21) 7,499 1.90 (1.38) 1.90 124
19.58 16.82 8,463 1.90 (1.41) 1.92 150
18.85 17.75 4,881 1.90 (1.60) 2.01 119
18.02 64.52 2,031 1.88 (1.41) 2.30 74
$ 34.64 129.52% $214,620 0.90% (0.53)% 0.91% 184%
15.73 (16.41) 100,985 0.90 (0.38) 0.90 124
20.29 17.95 148,659 0.90 (0.41) 0.92 150
19.29 18.85 64,602 0.90 (0.60) 1.01 119
18.24 66.22 29,272 0.88 (0.35) 1.30 74
- -----------------------------------------------------------------------------------------------------------
</TABLE>
97 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
NOTES TO
FINANCIAL STATEMENTS SEPTEMBER 30, 1999
1 > ORGANIZATION
The First American Balanced Fund, Equity Income Fund, Equity Index Fund,
Large Cap Growth Fund, Large Cap Value Fund, Mid Cap Growth Fund, Mid Cap
Value Fund, Micro Cap Value Fund, Regional Equity Fund, Small Cap Growth
Fund, Small Cap Value Fund, Emerging Markets Fund, International Fund,
International Index Fund, Health Sciences Fund, Real Estate Securities
Fund, and Technology Fund (each "Fund" collectively, the "Funds") are
mutual funds offered by First American Investment Funds, Inc. (FAIF).
Other funds that are offered by FAIF but are not included in this report
are First American Adjustable Rate Mortgage Securities Fund, Limited Term
Income Fund, Intermediate Term Income Fund, Intermediate Government Bond
Fund, Fixed Income Fund, Strategic Income Fund, California Intermediate
Tax Free Fund, Colorado Intermediate Tax Free Fund, Intermediate Tax Free
Fund, Minnesota Intermediate Tax Free Fund, Minnesota Tax Free Fund, Tax
Free Fund, and Oregon Intermediate Tax Free Fund. FAIF is registered
under the Investment Company Act of 1940, as amended, as an open-end
management investment company. FAIF's articles of incorporation permit
the Board of Directors to create additional funds in the future.
FAIF offers Class A, Class B, Class C and Class Y shares. Class A shares
are sold with a front-end sales charge. Class B shares may be subject to
a contingent deferred sales charge for six years and automatically
convert to Class A shares after eight years. Class C shares are sold with
a front end sales charge and may be subject to a contingent deferred
sales charge for 18 months. Class Y shares have no sales charge and are
offered only to qualifying institutional investors.
The Funds' prospectuses provide a description of each Fund's investment
objectives, policies and strategies. All Classes of shares have identical
voting, dividend, liquidation and other rights, and the same terms and
conditions, except that the level of distribution fees charged may differ
among Classes.
2 > SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies followed by the Funds are as follows:
SECURITY VALUATION - Security valuations for FAIF Fund investments are
furnished by independent pricing services that have been approved by the
Board of Directors. Investments in equity securities that are traded on a
national securities exchange (or reported on the NASDAQ national market
system) are stated at the last quoted sales price if readily available
for such securities on each business day. Other equity securities traded
in the over-the-counter market and listed equity securities for which no
sale was reported on that date are stated at the last quoted bid price.
Debt obligations exceeding sixty days to maturity are valued by an
independent pricing service. The pricing service may employ methodologies
that utilize actual market transactions, broker-dealer supplied
valuations, or other electronic data processing techniques. These
techniques generally consider such factors as yields or prices of bonds
of comparable quality, type of issue, coupon, maturity, ratings and
general market conditions. Securities for which prices are not available
from an independent pricing service but where an active market exists are
valued using market quotations obtained from one or more dealers that
make markets in the securities or from a widely-used quotation system.
When market quotations are not readily available, securities are valued
at fair value as determined in good faith by procedures established and
approved by the Board of Directors. Debt obligations with sixty days or
less remaining until maturity may be valued at their amortized cost.
Foreign
98 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
securities are valued at the closing prices on the principal exchange on
which they trade. The prices for foreign securities are reported in local
currency and converted to U.S. dollars using currency exchange rates.
Exchange rates are provided daily by recognized independent pricing
agents.
SECURITY TRANSACTIONS AND INVESTMENT INCOME - The Funds record security
transactions on the trade date of the security purchase or sale. Dividend
income is recorded on the ex-dividend date. Interest income, including
amortization of bond premium and discount is recorded on the accrual
basis. Security gains and losses are determined on the basis of
identified cost, which is the same basis used for federal income tax
purposes.
DISTRIBUTIONS TO SHAREHOLDERS - Balanced Fund, Equity Income Fund, Equity
Index Fund, Large Cap Growth Fund, Large Cap Value Fund, Mid Cap Growth
Fund and Mid Cap Value Fund declare and pay income dividends monthly.
Micro Cap Value Fund, Regional Equity Fund, Small Cap Growth Fund, Small
Cap Value Fund, International Index Fund, Health Sciences Fund, Real
Estate Securities Fund and Technology Fund declare and pay income
dividends quarterly.
A portion of the quarterly distributions of the Real Estate Securities
Fund may be a return of capital. Emerging Markets Fund and International
Fund declare and pay dividends annually. Any net realized capital gains
on sales of a fund's securities are distributed to shareholders at least
annually.
FEDERAL TAXES - It is each Fund's intention to continue to qualify as a
regulated investment company and distribute all of its taxable income.
Accordingly, no provision for Federal income taxes is required. For
Federal tax purposes, required distributions related to realized gains
for security transaction are computed as of September 30th or October
31st.
The character of distributions made during the year from net investment
income or net realized gains may differ from its ultimate
characterization for Federal income tax purposes. In addition, due to the
timing of dividend distributions, the fiscal year in which the amounts
are distributed may differ from the year that the income or realized
gains (losses) were recorded by the Fund.
Net investment income and net realized gains (losses) may differ for
financial statement and tax purposes because of temporary or permanent
book/tax differences. These differences are primarily due to losses
deferred due to wash sales, foreign currency gains and losses and the
"mark-to-market" of certain Passive Foreign Investment Companies (PFICs)
for tax purposes. To the extent these differences are permanent,
adjustments are made to the appropriate equity accounts in the period
that the difference arises.
The Balanced Fund, Regional Equity Fund, and Micro Cap Value Fund
utilized earnings and profits distributed to shareholders on redemption
of shares as part of the dividend paid deduction for income tax purposes.
Accordingly, $8,403,000, $6,217,000, and $5,945,000 were reclassed from
undistributed net realized gain on investment to paid in capital for
Balanced, Regional Equity, and Micro Cap Value, respectively.
In the Mid Cap Value Fund, a permanent difference resulted from a
redemption-in-kind in the amount $34,206,825. Associated with the
redemption-in-kind were realized losses of $24,456,573 which were
recognized for book purposes but not for tax purposes.
As of September 30, 1999, the Emerging Markets Fund, International Fund
and International Index Fund reclassified $(144,000), $(5,078,000), and
$(26,000) from
99 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
NOTES TO
FINANCIAL STATEMENTS SEPTEMBER 30, 1999
accumulated net realized foreign exchange loss, respectively, to
undistributed net investment income. The reclassifications had no effect
on net assets or net asset values per share.
On the Statements of Net Assets the following adjustments were made for
permanent tax adjustments (000):
ACCUMULATED UNDISTRIBUTED
NET REALIZED NET INVESTMENT
FUND GAIN (LOSS) INCOME PAID-IN-CAPITAL
-------------------------------------------------------------------------
Balanced Fund (8,403) -- 8,403
Large Cap Growth Fund (743) 744 (1)
Large Cap Value Fund (34) 34 --
Mid Cap Growth Fund (1,307) 1,307 --
Mid Cap Value Fund 24,459 (2) (24,457)
Micro Cap Value Fund (5,949) 4 5,945
Regional Equity Fund (6,217) 392 5,825
Small Cap Growth Fund (456) 456 --
Small Cap Value Fund (64) 64 --
Emerging Markets Fund 144 (144) --
International Fund 3,164 3,677 (6,841)
International Index Fund 27 (27) --
Real Estate Securities Fund 106 412 (518)
Technology Fund (1,132) 1,132 --
-------------------------------------------------------------------------
FUTURES TRANSACTIONS - In order to gain exposure to or protect against
changes in the market, certain Funds may enter into S&P Stock Index
futures contracts and other stock futures contracts.
Upon entering into a futures contract, the Fund is required to deposit
cash or pledge U.S. government securities in an amount equal to five
percent of the purchase price indicated in the futures contract (initial
margin). Subsequent payments, which are dependent on the daily
fluctuations in the value of the underlying security or securities, are
made or received by the Fund each day (daily variation margin) and are
recorded as unrealized gains or losses until the contract is closed. When
the contract is closed, the fund records a realized gain or loss equal to
the difference between the proceeds from (or cost of) the closing
transaction and the fund's basis in the contract.
FOREIGN CURRENCY TRANSLATION - The books and records of the Emerging
Markets Fund, International Fund and International Index Fund are
maintained in U.S. dollars on the following bases:
o market value of investment securities, assets and liabilities at the
current rate of exchange; and
o purchases and sales of investment securities, income and expenses at
the relevant rates of exchange prevailing on the respective dates of
such transactions.
The Emerging Markets Fund, International Fund and International Index
Fund do not isolate the portion of gains and losses on investments in
equity securities that is due to changes in the foreign exchange rates
from that which is due to changes in market prices of equity securities.
The Emerging Markets Fund, International Fund and International Index
Fund report certain foreign currency-related transactions as components
of realized gains for financial reporting purposes, whereas such
components are treated as ordinary income for federal income tax
purposes.
FORWARD FOREIGN CURRENCY CONTRACTS - The Emerging Markets Fund,
International Fund and International Index Fund may enter into forward
foreign currency contracts as
100 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
hedges against either specific transactions or fund positions. The
aggregate principal amount of the contracts are not recorded because the
Emerging Markets Fund, International Fund and International Index Fund
intend to settle the contracts prior to delivery. All commitments are
"marked-to-market" daily at the applicable foreign exchange rate, and any
resulting unrealized gains or losses are recorded currently. The Emerging
Markets Fund, International Index Fund and International Fund realize
gains or losses at the time the forward contracts are extinguished.
Unrealized gains or losses on outstanding positions in forward foreign
currency contracts held at the close of the period are recognized as
ordinary income or loss for federal income tax purposes.
EXPENSES - Expenses that are directly related to one of the Funds are
charged directly to that Fund. Other operating expenses are allocated to
the Funds on the basis of relative net assets. Class specific expenses,
such as the 12b-1 fees, are borne by that Class. Income, other expenses
and realized and unrealized gains and losses of a Fund are allocated to
the respective Class on the basis of the relative net assets each day.
OPTIONS TRANSACTIONS - In order to hedge against market risks certain
Funds may write covered call options and purchase put options on stock
indices and on securities in which the funds invest. Options are valued
daily based upon the last sales price on the principal exchange on which
the option is traded, and the fund records the unrealized gain or loss. A
fund will realize a gain or loss upon the expiration or closing of the
options contract.
SECURITIES LENDING - Each Fund may lend up to one-third of the value of
its total assets to broker-dealers, banks or other institutional
borrowers of securities in order to earn additional income. Each Fund's
policy is to maintain collateral in the form of cash, United States
Government securities or other high grade debt obligations equal to at
least 100% of the value of securities loaned. The collateral is then
"marked-to-market" daily until the securities are returned.
USE OF ESTIMATES IN PREPARATION OF FINANCIAL STATEMENTS - The preparation
of financial statements, in conformity with generally accepted accounting
principles, requires management to make estimates and assumptions that
affect the reported amount of net assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial
statements and the reported results of operations during the reporting
period. Actual results could differ from those estimates.
101 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
NOTES TO
FINANCIAL STATEMENTS SEPTEMBER 30, 1999
3 > FEES AND EXPENSES
ADVISOR FEES - Pursuant to an investment advisory agreement (the
"Agreement"), First American Asset Management (the "Advisor") a division
of U.S. Bank National Association ("U.S. Bank") manages each Fund's
assets and furnishes related office facilities, equipment, research and
personnel. The Agreement requires each Fund to pay the Advisor a monthly
fee based upon average daily net assets. The fee for each Fund, other
than the International Fund and Emerging Markets Fund, is equal to an
annual rate of .70% of the average daily net assets. The fee for the
International Fund and Emerging Markets Fund is equal to an annual rate
of 1.25% of average daily net assets. The advisor intends to waive fees
during the current fiscal year so that total fund operating expenses do
not exceed expense limitations. Fee waivers may be discontinued at any
time.
Funds may invest in First American Funds, Inc. (FAF), subject to certain
limitations. The terms of such transactions are identical to those of
non-related entities except that, to avoid duplicative investment
advisory fees, the Advisor reimburses each FAIF fund an amount equal to
the investment advisory fee earned by FAF related to such investments.
SUB-ADVISOR FEES - Marvin & Palmer Associates, Inc., serves as
Sub-Advisor to the International Fund and Emerging Markets Fund pursuant
to a Sub-Advisory Agreement with the Advisor. For International Fund,
Marvin & Palmer is paid a monthly fee by the Advisor calculated on an
annual basis equal to 0.75% of the first $100 million of International
Fund's average daily net assets, 0.50% of International Fund's average
daily net assets in excess of $100 million up to $300 million, 0.45% of
International Fund's average daily net assets in excess of $300 million
up to $500 million and 0.40% of International Fund's average daily net
assets in excess of $500 million. For Emerging Markets Fund, Marvin &
Palmer is paid a monthly fee by the Advisor calculated on an annual basis
equal to 0.85% of the first $100 million of Emerging Markets Fund's
average daily net assets, 0.60% of Emerging Markets Fund's average daily
net assets in excess of $100 million up to $300 million, 0.55% of
Emerging Markets Fund's average daily net assets in excess of $300
million up to $500 million, and 0.50% of Emerging Markets Fund's average
daily net assets in excess of $500 million.
ADMINISTRATION FEES - SEI Investments Management Corporation ("SIMC")
provides administrative services, including certain accounting, legal and
shareholder services, for a monthly administrator fee calculated at an
annual rate equal to 0.12% of each Fund's average daily net assets with a
minimum annual fee of $50,000 per fund. To the extent that the aggregate
net assets of the First American Family of Funds exceed $8 billion, each
fund's fee is reduced to 0.105% for their relative shares of the excess
net assets. The Mid Cap Growth Fund and Emerging Markets Fund are
eligible for the $50,000 minimum.
SUB-ADMINISTRATION FEES - The Advisor assists SIMC and provides
sub-administration services for the Funds. For these services, SIMC
compensates the sub-administrator monthly at an annual rate of up to
0.05% of each Fund's average daily net assets. Under the agreement SIMC
paid U.S. Bank $8,411,000 in aggregate for the First American Family of
Funds. The fees for the year ended September 30, 1999, were approximately
equal to an annual rate of 0.028% of average daily net assets.
For the year ended September 30, 1999, fees paid for the funds included
in this annual report were as follows (000):
102 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
----------------------------------------------
Balanced Fund $151
Equity Income Fund 110
Equity Index Fund 390
Large Cap Growth Fund 267
Large Cap Value Fund 448
Mid Cap Growth Fund 97
Mid Cap Value Fund 112
Micro Cap Value Fund 24
Regional Equity Fund 65
Small Cap Growth Fund 62
Small Cap Value Fund 99
Emerging Markets Fund 10
International Fund 128
International Index Fund 35
Health Sciences Fund 5
Real Estate Fund 17
Technology Fund 49
----------------------------------------------
CUSTODIAN FEES - Through a separate contractual agreement, U.S. Bank
serves as the Funds' custodian. The fee for each Fund, other than
Emerging Markets, International Fund and International Index Fund, is
equal to an annual rate of 0.03% of average daily net assets. The fee for
Emerging Markets, International Fund, and International Index Fund is
equal to an annual rate of 0.10% of average daily net assets. All fees
are computed daily and paid monthly.
DISTRIBUTION FEES - SEI Investments Distribution Co. ("SIDCO") serves as
distributor of the Funds. Under the respective distribution plan, each of
the Funds pay SIDCO a monthly distribution fee equal to an annual rate of
0.25% of each Fund's average daily net assets of the Cass A shares and
1.00% of the Class B shares and 1.00% Class C shares, which may be used
by SIDCO to provide compensation for sales support and distribution
activities. No distribution fees are paid by Class Y shares. Under the
agreement, SIDCO paid the following amounts to affiliates of U.S. Bank
for the year ended September 30, 1999 (000):
U.S. BANCORP
U.S. BANK PIPER JAFFRAY U.S. BANK TRUST
-------------------------------------------------------------------------
Balanced Fund $175 $ 52 $ 8
Equity Income Fund 40 2 3
Equity Index Fund 195 37 2
Large Cap Growth Fund 48 229 12
Large Cap Value Fund 228 201 7
Mid Cap Growth Fund 68 327 15
Mid Cap Value Fund 75 2 --
Micro Cap Value Fund 2 -- --
Regional Equity Fund 84 3 --
Small Cap Growth Fund 18 55 1
Small Cap Value Fund 20 4 1
Emerging Markets Fund 2 9 --
International Fund 27 60 4
International Index Fund 4 1 --
Health Sciences Fund 3 -- --
Real Estate Fund 7 1 --
Technology Fund 33 2 --
-------------------------------------------------------------------------
TRANSFER AGENT FEES - DST Systems, Inc. provides transfer agency
services for the Funds. Effective October 1, 1998, FAIF has appointed
U.S. Bank as servicing agent to perform certain transfer agent and
dividend disbursing agent services with respect to the
103 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
NOTES TO
FINANCIAL STATEMENTS SEPTEMBER 30, 1999
Class A shares of the Funds held through accounts at U.S. Bank and its
affiliates. As the servicing agent, U.S. Bank was paid $4,921,000 in
aggregate for the year ended September 30, 1999.
For the year ended September 30, 1999, fees paid to U.S. Bank for the
Funds included in this annual report were as follows (000):
----------------------------------------------
Balanced Fund $ 27
Equity Income Fund 1
Equity Index Fund 16
Large Cap Growth Fund 125
Large Cap Value Fund 112
Mid Cap Growth Fund 222
Mid Cap Value Fund 2
Micro Cap Value Fund --
Regional Equity Fund 2
Small Cap Growth Fund 50
Small Cap Value Fund 5
Emerging Markets Fund 26
International Fund 73
International Index Fund 1
Health Sciences Fund 1
Real Estate Securities Fund 1
Technology Fund 3
----------------------------------------------
OTHER FEES - In addition to the investment advisory and management fees,
custodian fees, distribution fees, administrator and transfer agent fees,
each Fund is responsible for paying most other operating expenses
including organization costs, fees and expenses of outside directors,
registration fees, printing shareholder reports, legal, auditing,
insurance and other miscellaneous expenses.
For the year ended September 30, 1999, legal fees and expenses were paid
to a law firm of which the Secretary of the Funds is a partner.
SALES CHARGES - A Contingent Deferred Sales Charge ("CDSC") is imposed on
redemptions made in the Class B shares. The CDSC varies depending on the
number of years from time of payment for the purchase of Class B shares
until the redemption of such shares.
CDSC
AS A PERCENTAGE OF DOLLAR
YEAR SINCE PURCHASE AMOUNT SUBJECT TO CHARGE
------------------------------------------------
First 5.00%
Second 5.00%
Third 4.00%
Fourth 3.00%
Fifth 2.00%
Sixth 1.00%
Seventh 0.00%
Eighth 0.00%
------------------------------------------------
Class B shares will automatically convert to Class A shares eight years
after the first day of the month shares are purchased.
A CDSC of 1.00% is imposed on redemptions made in Class C shares for the
first eighteen months.
The CDSC for Class B shares and Class C shares is imposed on the value of
the purchased shares, or the value at the time of redemption, whichever
is less.
For the year ended September 30, 1999, sales charges retained by SIDCO
for distributing the First American Family of Funds' shares were
approximately $159,000.
104 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
4 > CAPITAL SHARE TRANSACTIONS
Capital share transactions for the funds were as follows (000):
<TABLE>
<CAPTION>
BALANCED EQUITY EQUITY
FUND INCOME FUND INDEX FUND
- -------------------------------------------------------------------------------------------------------------------------------
10/1/98 10/1/97 10/1/98 10/1/97 10/1/98 10/1/97
to to to to to to
9/30/99 9/30/98 9/30/99 9/30/98 9/30/99 9/30/98
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Class A:
Shares issued 1,016 1,223 728 1,181 2,912 4,002
Shares issued in connection with acquisition of
Qualivest Fund (Asset Allocation for Balanced) -- 166 -- -- -- 296
Shares issued in connection with acquisition of
Piper Fund -- 3,018 -- -- -- --
Shares issued in lieu of cash distributions 776 267 47 36 74 81
Shares redeemed (2,208) (1,172) (287) (979) (891) (2,916)
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL CLASS A TRANSACTIONS (416) 3,502 488 238 2,095 1,463
===============================================================================================================================
Class B:
Shares issued 534 1,233 223 169 2,037 1,068
Shares issued in connection with acquisition of
Qualivest Fund -- 360 -- 32 50 --
Shares issued in lieu of cash distributions 583 313 40 -- -- 104
Shares redeemed (851) (492) (120) (77) (331) (167)
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL CLASS B TRANSACTIONS 266 1,414 143 124 1,756 1,005
===============================================================================================================================
Class C:
Shares issued 102 -- 107 -- 684 --
Shares issued in lieu of cash distributions 1 -- -- -- 1 --
Shares redeemed -- -- -- -- (23) --
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL CLASS C TRANSACTIONS 103 -- 107 -- 662 --
===============================================================================================================================
Class Y:
Shares issued 6,963 8,578 3,513 2,946 17,985 13,918
Shares issued in connection with acquisition of
Qualivest Fund (Asset Allocation for Balanced Fund) -- 6,642 -- -- -- 17,735
Shares issued in lieu of cash distributions 4,481 3,127 210 228 1,350 2,375
Shares redeemed (17,997) (12,936) (4,646) (3,892) (20,437) (12,513)
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL CLASS Y TRANSACTIONS (6,553) 5,411 (923) (718) (1,102) 21,515
===============================================================================================================================
NET INCREASE (DECREASE) IN CAPITAL SHARES (6,600) 10,327 (185) (356) 3,411 23,983
===============================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
LARGE CAP LARGE CAP MID CAP
GROWTH FUND VALUE FUND GROWTH FUND
- -------------------------------------------------------------------------------------------------------------------------------
10/1/98 10/1/97 10/1/98 10/1/97 10/1/98 10/1/97
to to to to to to
9/30/99 9/30/98 9/30/99 9/30/98 9/30/99 9/30/98
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Class A:
Shares issued 3,013 2,551 1,328 1,492 836 1,675
Shares issued in connection with acquisition of
Qualivest Fund -- -- -- 376 -- --
Shares issued in connection with acquisition of
Piper Fund -- 9,268 -- 4,904 -- --
Shares issued in lieu of cash distributions 948 52 1,146 312 3,066 2,165
Shares redeemed (4,125) (3,877) (2,424) (1,222) (7,075) (5,863)
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL CLASS A TRANSACTIONS (164) 7,994 50 5,862 (3,173) (2,023)
===============================================================================================================================
Class B:
Shares issued -- FAIF 335 199 238 637 27 1
Shares issued -- Piper -- -- -- -- -- 45
Shares issued in lieu of cash distributions -- FAIF 82 49 430 318 1 --
Shares issued in lieu of cash distributions -- Piper -- -- -- -- -- 10
Shares redeemed -- FAIF (133) (95) (502) (294) (1) --
Shares redeemed -- Piper -- -- -- -- -- (122)
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL CLASS B TRANSACTIONS 284 153 166 661 27 (66)
===============================================================================================================================
Class C:
Shares issued 50 -- 60 -- 37 --
Shares issued in lieu of cash distributions -- -- -- -- -- --
Shares redeemed (1) -- -- -- (1) --
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL CLASS C TRANSACTIONS 49 -- 60 -- 36 --
===============================================================================================================================
Class Y:
Shares issued 9,639 10,313 12,748 15,252 17,943 7,967
Shares issued in connection with acquisition of
Common Trust Fund Assets -- -- -- 10,794 -- --
Shares issued in connection with acquisition of
Qualivest Fund -- -- -- 6,653 -- --
Shares issued in connection with acquisition of
Piper Fund 487 -- -- 595 -- --
Shares issued in lieu of cash distributions 1,348 740 5,553 4,041 1,200 501
Shares redeemed (10,125) (7,929) (16,244) (19,513) (9,045) (6,171)
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL CLASS Y TRANSACTIONS 1,349 3,124 2,057 17,822 10,098 2,297
===============================================================================================================================
NET INCREASE IN CAPITAL SHARES 1,518 11,271 2,333 24,345 6,988 208
===============================================================================================================================
</TABLE>
105 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
NOTES TO
FINANCIAL STATEMENTS SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
MID CAP MICRO CAP REGIONAL
VALUE FUND VALUE FUND EQUITY FUND
- -----------------------------------------------------------------------------------------------------------------------------------
10/1/98 10/1/97 10/1/98 10/1/97 10/1/98 10/1/97
to to to to to to
9/30/99 9/30/98 9/30/99 9/30/98 9/30/99 9/30/98
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Class A:
Shares issued 595 2,920 155 595 1,322 509
Shares issued in lieu of cash distributions 482 207 25 1 98 64
Shares redeemed (1,468) (2,636) (121) (460) (1,376) (661)
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL CLASS A TRANSACTIONS (391) 491 59 136 44 (88)
===================================================================================================================================
Class B:
Shares issued 79 621 4 21 28 258
Shares issued in lieu of cash distributions 496 233 7 1 123 83
Shares redeemed (1,183) (271) (37) (1) (808) (274)
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL CLASS B TRANSACTIONS (608) 583 (26) 21 (657) 67
===================================================================================================================================
Class C:
Shares issued 13 -- -- -- -- --
Shares issued in lieu of cash distributions -- -- -- -- -- --
Shares redeemed -- -- -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL CLASS C TRANSACTIONS 13 -- -- -- -- --
===================================================================================================================================
Class Y:
Shares issued 12,012 12,176 1,251 1,372 1,461 4,280
Shares issued in lieu of cash distributions 4,173 2,368 592 661 681 481
Shares redeemed (20,520) (7,809) (10,792) (6,377) (8,182) (6,472)
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL CLASS Y TRANSACTIONS (4,335) 6,735 (8,949) (4,344) (6,040) (1,711)
===================================================================================================================================
NET INCREASE (DECREASE) IN CAPITAL SHARES (5,321) 7,809 (8,916) (4,187) (6,653) (1,732)
===================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
SMALL CAP SMALL CAP EMERGING
GROWTH FUND VALUE FUND MARKETS FUND
- ------------------------------------------------------------------------------------------------------------------------------------
10/1/98 10/1/97 10/1/98 12/1/97 8/1/97 10/1/98 10/1/97
to to to to to to to
9/30/99 9/30/98 9/30/99 9/30/98 11/30/97 9/30/99 9/30/98
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Class A:
Shares issued 3,781 1,883 342 2,286 1,021 43 83
Shares issued in connection with acquisition of
Piper Fund -- 409 -- -- -- -- --
Shares issued in lieu of cash distributions 4 351 77 83 -- -- 4
Shares redeemed (4,240) (2,314) (587) (2,426) (1,225) (331) (678)
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL CLASS A TRANSACTIONS (455) 329 (168) (57) (204) (288) (591)
====================================================================================================================================
Class B:
Shares issued -- FAIF 70 5 50 49 -- 2 --
Shares issued -- Piper -- 65 -- -- -- -- 3
Shares issued in connection with acquisition of
Piper Fund -- 95 -- -- -- -- --
Shares issued in lieu of cash distributions -- Piper -- 1 -- -- -- -- --
Shares redeemed -- FAIF (28) (4) 4 (3) -- -- --
Shares redeemed -- Piper -- (116) (27) -- -- -- (32)
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL CLASS B TRANSACTIONS 42 46 27 46 -- 2 (29)
====================================================================================================================================
Class C:
Shares issued 19 -- 8 -- -- -- --
Shares issued in lieu of cash distributions -- -- -- -- -- -- --
Shares redeemed -- -- -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL CLASS C TRANSACTIONS 19 -- 8 -- -- -- --
====================================================================================================================================
Class Y:
Shares issued 8,081 610 9,570 12,604 6,328 5,113 1,331
Shares issued in connection with acquisition of
Piper Fund -- 10,283 -- -- -- -- --
Shares issued in lieu of cash distributions 4 -- 2,014 2,024 4 -- --
Shares redeemed (2,891) (1,388) (15,705) (12,922) (6,230) (519) (5)
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL CLASS Y TRANSACTIONS 5,194 9,505 (4,121) 1,706 102 4,594 1,326
====================================================================================================================================
NET INCREASE (DECREASE) IN CAPITAL SHARES 4,800 9,880 (4,254) 1,695 (102) 4,308 706
====================================================================================================================================
</TABLE>
106 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
<TABLE>
<CAPTION>
INTERNATIONAL INTERNATIONAL HEALTH
FUND INDEX FUND SCIENCES FUND
- ------------------------------------------------------------------------------------------------------------------------------------
10/1/98 10/1/97 10/1/98 12/1/97 8/1/97 10/1/98 10/1/97
to to to to to to to
9/30/99 9/30/98 9/30/99 9/30/98 11/30/97 9/30/99 9/30/98
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Class A:
Shares issued 7,655 16,428 865 88 4 146 193
Shares issued in connection with acquisition of Piper Fund -- 3,127 -- -- -- -- --
Shares issued in lieu of cash distributions 206 13 15 2 -- 1 10
Shares redeemed (7,985) (16,973) (789) (30) (18) (237) (15)
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL CLASS A TRANSACTIONS (124) 2,595 91 60 (14) (90) 188
====================================================================================================================================
Class B:
Shares issued 85 85 46 13 -- 67 40
Shares issued in lieu of cash distributions 13 10 1 -- -- -- 8
Shares redeemed (49) (28) (4) (2) -- (23) (7)
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL CLASS B TRANSACTIONS 49 67 43 11 -- 44 41
====================================================================================================================================
Class C:
Shares issued 67 -- -- -- -- -- --
Shares issued in lieu of cash distributions -- -- -- -- -- -- --
Shares redeemed (2) -- -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL CLASS C TRANSACTIONS 65 -- -- -- -- -- --
====================================================================================================================================
Class Y:
Shares issued 11,678 18,643 562 2,283 3,022 52 600
Shares issued in connection with acquisition of Piper Fund -- 248 -- -- -- -- --
Shares issued in lieu of cash distributions 939 680 693 184 28 1 61
Shares redeemed (8,887) (7,532) (895) (6,842) (5,882) (1,383) (1,273)
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL CLASS Y TRANSACTIONS 3,730 12,039 360 (4,375) (2,832) (1,330) (612)
====================================================================================================================================
NET INCREASE (DECREASE) IN CAPITAL SHARES 3,720 14,701 494 (4,304) (2,846) (1,376) (383)
====================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
REAL ESTATE TECHNOLOGY
SECURITIES FUND FUND
- -------------------------------------------------------------------------------------------------------
10/1/98 10/1/97 10/1/98 10/1/97
to to to to
9/30/99 9/30/98 9/30/99 9/30/98
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A:
Shares issued 31 71 2,877 7,345
Shares issued in lieu of cash distributions 8 10 21 22
Shares redeemed (65) (55) (2,763) (7,148)
- -------------------------------------------------------------------------------------------------------
TOTAL CLASS A TRANSACTIONS (26) 26 135 219
=======================================================================================================
Class B:
Shares issued 65 59 223 114
Shares issued in lieu of cash distributions 10 15 22 37
Shares redeemed (121) (46) (105) (83)
- -------------------------------------------------------------------------------------------------------
TOTAL CLASS B TRANSACTIONS (46) 28 140 68
=======================================================================================================
Class Y:
Shares issued 1,842 3,327 1,026 2,692
Shares issued in lieu of cash distributions 42 69 54 107
Shares redeemed (1,922) (1,318) (1,302) (3,708)
- -------------------------------------------------------------------------------------------------------
TOTAL CLASS Y TRANSACTIONS (38) 2,078 (222) (909)
=======================================================================================================
NET INCREASE (DECREASE) IN CAPITAL SHARES (110) 2,132 53 (622)
=======================================================================================================
</TABLE>
107 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
NOTES TO
FINANCIAL STATEMENTS SEPTEMBER 30, 1999
5 > INVESTMENT SECURITY TRANSACTIONS
During the year ended September 30, 1999, purchases of securities and
proceeds from sales of securities, other than temporary investments in
short-term securities, were as follows (000):
U.S. GOVERNMENT OTHER INVESTMENT
SECURITIES SECURITIES
-------------------------------------------------------------------------
PURCHASES SALES PURCHASES SALES
---------------------------------------------
Balanced Fund $126,207 $157,132 $384,847 $ 524,563
Equity Income Fund -- -- 133,029 153,357
Equity Index Fund -- -- 186,010 97,078
Large Cap Growth Fund -- -- 537,678 629,872
Large Cap Value Fund -- -- 959,269 1,152,928
Mid Cap Growth Fund -- -- 341,062 311,586
Mid Cap Value Fund -- -- 492,391 672,356
Micro Cap Value Fund -- -- 18,314 104,459
Regional Equity Fund -- -- 41,173 162,821
Small Cap Growth Fund -- -- 291,286 228,958
Small Cap Value Fund -- -- 152,295 221,069
Emerging Markets Fund -- -- 65,389 42,570
International Fund -- -- 701,773 673,042
International Index Fund -- -- 477 5,123
Health Sciences Fund -- -- 9,645 18,994
Real Estate Securities Fund -- -- 13,009 13,039
Technology Fund -- -- 322,953 322,830
-------------------------------------------------------------------------
At September 30, 1999, the total cost of securities for Federal income
tax purposes was not materially different from amounts reported for
financial reporting purposes. The aggregate gross unrealized appreciation
and depreciation for securities held by the Funds at September 30, 1999,
is as follows (000):
AGGREGATE GROSS AGGREGATE GROSS
APPRECIATION DEPRECIATION NET
------------------------------------------------------------------------
Balanced Fund $ 45,914 $ (17,331) $ 28,583
Equity Income Fund 134,549 (7,627) 126,922
Equity Index Fund 637,718 (52,552) 585,166
Large Cap Growth Fund 400,951 (23,106) 377,845
Large Cap Value Fund 257,199 (71,522) 185,677
Mid Cap Growth Fund 91,697 (15,251) 76,446
Mid Cap Value Fund 16,725 (51,654) (34,929)
Micro Cap Value Fund 19,750 (5,316) 14,434
Regional Equity Fund 61,899 (12,262) 49,637
Small Cap Growth Fund 57,487 (20,554) 36,933
Small Cap Value Fund 93,682 (36,929) 56,753
Emerging Markets Fund 7,526 (689) 6,837
International Fund 146,758 (13,906) 132,852
International Index Fund 44,792 (11,799) 32,993
Health Sciences Fund 1,995 (1,129) 866
Real Estate Securities Fund 1,744 (8,699) (6,955)
Technology Fund 80,408 (3,214) 77,194
------------------------------------------------------------------------
108 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
At September 30, 1999, the following funds have capital loss
carryforwards:
FUND AMOUNT (000) EXPIRATION DATE
-------------------------------------------------------------------------
Mid Cap Value $16,610 2007
International Index 16 2007
Emerging Markets 9,829 2003-2007
Health Sciences 14 2007
Real Estate Securities 3,426 2006-2007
-------------------------------------------------------------------------
The amount for the Real Estate Securities Fund is an estimate because its
tax year end is December 31.
The Mid Cap Value Fund, Health Sciences Fund, Emerging Markets Fund, and
International Index Fund incurred losses for tax purposes in the amount
of $77,402,000, $108,000, $2,183,000, and $461,000 for November 1, 1998,
to September 30, 1999, respectively. As permitted by tax regulations, the
Funds intend to elect to defer and treat these losses as arising in the
fiscal year ending September 30, 2000.
6 > DEFERRED ORGANIZATIONAL COSTS
Organizational costs have been capitalized by the Funds and are being
amortized over 60 months commencing with operations on a straight-line
basis.
7 > FORWARD FOREIGN CURRENCY CONTRACTS
The International Fund enters into forward foreign currency exchange
contracts as hedges against portfolio positions and in connection with
portfolio purchases and sales of securities denominated in a foreign
currency. Such contracts, which protect the value of the fund's
investment securities against a decline in the value of the hedged
currency, do not eliminate fluctuations in the underlying prices of the
securities. They simply establish an exchange rate at a future date.
Although such contracts tend to minimize the risk of loss due to a
decline in the value of a hedged currency, at the same time they tend to
limit any potential gain that might be realized should the value of such
foreign currency increase.
The following forward foreign currency contracts were outstanding at
September 30, 1999, for the International Fund.
109 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
NOTES TO
FINANCIAL STATEMENTS SEPTEMBER 30, 1999
SETTLEMENT CONTRACTS TO IN EXCHANGE NET UNREALIZED APPRECIATION/
DATES DELIVER (000) FOR (000) (DEPRECIATION) (000)
-------------------------------------------------------------------------
FOREIGN CURRENCY SALES:
10/08/99 44,290 EUR $ 47,320 $ (57)
10/08/99 60,770 EUR 62,918 (2,087)
10/08/99 5,970 EUR 6,237 (148)
10/08/99 24,520 GBP 39,494 (882)
10/08/99 41,470 SEK 5,038 (70)
10/08/99 54,750 SEK 6,745 1
10/01/99 6,819 THB 165 (2)
-------- --------
$167,917 $ (3,245)
FOREIGN CURRENCY PURCHASES:
10/01/99 1,143 EUR $ 1,208 $ 14
10/01/99 743 EUR 785 9
10/01/99 657 EUR 695 8
10/08/99 44,290 EUR 47,177 200
10/08/99 5,850 EUR 6,231 27
10/29/99 1,068 EUR 1,131 13
10/08/99 24,520 GBP 40,084 292
10/01/99 176,390 JPY 1,666 (7)
10/08/99 41,470 SEK 5,088 20
10/08/99 54,750 SEK 6,717 26
-------- --------
$110,782 $ 602
--------
$ (2,643)
========
CURRENCY LEGEND
---------------
EUR Euro
GBP Great British
Pound
JPY Japanese Yen
SEK Swedish Krona
THB Thai Baht
8 > FUTURES CONTRACTS
The Equity Index Fund's investment in S&P 500 Index futures contracts is
designed to maintain sufficient liquidity to meet redemption requests and
to increase the level of fund assets devoted to replicating the
composition of the S&P 500 Index while reducing transaction costs. Risks
of entering into futures contracts, in general, include the possibility
that there will not be a perfect price correlation between the futures
contracts and the underlying securities. Second, it is possible that a
lack of liquidity for futures contracts could exist in the secondary
market, resulting in an inability to close a futures position prior to
its maturity date. Third, the purchase of a futures contract involves the
risk that a fund could lose more than the original margin deposit
required to initiate a futures transaction. Unrealized gains or losses on
outstanding positions in futures contracts held at the close of the year
will be recognized as capital gains or losses for Federal income tax
purposes. At September 30, 1999, open long S&P 500 Index futures
contracts were as follows:
MARKET VALUE
NUMBER OF COVERED BY SETTLEMENT UNREALIZED
CONTRACTS CONTRACTS (000) MONTH LOSS (000)
-------------------------------------------------------------------------
3 $ 973 Dec - 99 $ (28)
2 649 Dec - 99 (27)
2 649 Dec - 99 (24)
2 649 Dec - 99 (17)
1 325 Dec - 99 (13)
1 325 Dec - 99 (9)
1 325 Dec - 99 (9)
-------------------------------------------------------------------------
12 $3,895 $ (127)
-------------------------------------------------------------------------
110 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
9 > OPTIONS TRANSACTIONS
The Mid Cap Value Fund wrote covered call options and purchased put
options during the period. These transactions, which were undertaken
principally to hedge against market risk, entail certain risks. The risks
include the risk of imperfect correlation between movements of the index
covered by the option and movement in the price of the fund's securities,
and the risk of limited liquidity in the event the fund seeks to close
out an option position before expiration by entering into an offsetting
transaction. These transactions give the holder the right to receive,
upon exercise of the option, a defined amount of cash if the closing
value of the index upon which the option is based is greater than, in the
case of a call, or less than, in the case of a put, the exercise price of
the option. Written options activity for Mid Cap Value Fund for the year
ended September 30, 1999, is as follows:
CALL OPTIONS (000)
------------------------------------------
NUMBER OF AMOUNT OF
OPTIONS PREMIUMS
------------------------------------------------------------------------
Options outstanding at
September 30, 1998 -- $ --
Options written 5,200 $ 21,366
Options expired or closed (5,200) (21,366)
------------------------------------------
Options outstanding at
September 30, 1999 -- $ --
------------------------------------------------------------------------
The Fund realized losses of approximately $6,875 on written options
during the period.
10 > SECURITIES LENDING TRANSACTIONS
In order to generate additional income, the Funds may lend portfolio
securities representing up to one-third of the value of total assets
(which includes collateral received for securities on loan) to broker
dealers, banks, or other institutional borrowers of securities. As with
other extensions of credit, there may be risks of delay in recovery of
the securities or even loss of rights in the collateral should the
borrower of the security fail financially. The market value of the
securities on loan at September 30, 1999, the collateral purchased with
cash received and held at September 30, 1999, with respect to such loans,
and income generated during the year ended September 30, 1999, from the
program were as follows (000):
MARKET VALUE OF INCOME RECEIVED
FUND LOANED SECURITIES FROM SECURITIES LENDING
-------------------------------------------------------------------------
Balanced $124,442 $176
Equity Income 63,202 183
Equity Index 335,813 379
Large Cap Growth 299,349 311
Large Cap Value 302,106 318
Mid Cap Growth 132,642 246
Mid Cap Value 50,374 115
Micro Cap Value 6,908 13
Regional Equity 18,880 82
Small Cap Growth 56,968 148
Small Cap Value 33,152 67
Health Sciences 1,960 10
Real Estate Securities 13,714 10
Technology 75,733 214
-------------------------------------------------------------------------
111 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
NOTES TO
FINANCIAL STATEMENTS SEPTEMBER 30, 1999
MARKET VALUE OF COLLATERAL PURCHASED WITH CASH RECEIVED
-------------------------------------------------------
OTHER FIXED
REPURCHASE MONEY MARKET INCOME
FUND AGREEMENTS INSTRUMENTS SECURITIES TOTAL
-------------------------------------------------------------------------
Balanced $ 89,224 $1,029 $36,771 $127,024
Equity Income 45,316 522 18,675 64,513
Equity Index 240,777 2,776 99,228 342,781
Large Cap Growth 214,632 2,475 88,453 305,560
Large Cap Value 216,609 2,498 89,268 308,375
Mid Cap Growth 95,104 1,097 39,194 135,395
Mid Cap Value 36,118 416 14,885 51,419
Micro Cap Value 4,953 57 2,041 7,051
Regional Equity 13,537 156 5,579 19,272
Small Cap Growth 40,846 471 16,833 58,150
Small Cap Value 23,770 274 9,796 33,840
Health Sciences 1,405 16 579 2,000
Real Estate Securities 9,833 113 4,053 13,999
Technology 54,301 626 22,378 77,305
-------------------------------------------------------------------------
U.S. Bank National Association acts as the securities lending agent in
transactions involving the lending of portfolio securities on behalf of
the funds. For these services, U.S. Bank National Association received
$2,270,000 in aggregate securities lending fees for the year ended
September 30, 1999. Fees generated from the funds included in this annual
report for securities lending were as follows (000):
----------------------------------------------
Balanced Fund 114
Equity Income Fund 119
Equity Index Fund 248
Large Cap Growth Fund 203
Large Cap Value Fund 211
Mid Cap Value 74
Mid Cap Growth Fund 162
Micro Cap Value Fund 9
Regional Equity Fund 55
Small Cap Growth Fund 98
Small Cap Value Fund 43
Emerging Markets Fund --
International Fund --
International Index Fund --
Health Sciences Fund 6
Real Estate Fund 6
Technology Fund 141
----------------------------------------------
11 > COMMON TRUST FUND CONVERSIONS
On July 23, 1999, the Piper Trust Common Equity was converted into the
Large Cap Growth Fund. The assets, which consisted of securities and
related receivables, were converted on a tax free basis. At the time of
conversion 487,250 shares of Class Y of the Large Cap Growth Fund were
issued. The net assets of the Piper Trust Common Equity and Large Cap
Growth Fund immediately before the conversion were $9,808,354 and
$1,059,225,834 respectively. Included in the net assets of the Piper
Trust Common Equity were $3,681,404 of unrealized gains.
On December 6, 1997, the Large Companies Value Trust Fund of the Advisor
was converted into the Large Cap Value Fund. The assets, which consisted
of securities and related receivables, were converted on a tax-free
basis. 10,793,662 of Class Y shares of the Large Cap Value Fund were
issued at the time of conversion. The net assets of the
112 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
Common Trust Fund and Large Cap Value Fund immediately before the
conversion were $265,739,968 and $1,574,696,070 respectively. Included in
this amount was $86,510,389 of unrealized gains.
12 > QUALIVEST MERGER
On November 21, 1997, the following reorganization of the Qualivest Funds
into the FAIF Funds took place pursuant to a Plan of Reorganization
approved by the Qualivest shareholders on October 31, 1997:
QUALIVEST ACQUIRED FUND FAIF ACQUIRING FUND
-------------------------------------------------------------------------
Optimized Stock Fund Equity Index Fund
Large Companies Value Fund Large Cap Value Fund
International Opportunities Fund International Index Fund
(New FAIF Fund)
Small Companies Value Fund Small Cap Value Fund
(New FAIF Fund)
-------------------------------------------------------------------------
Under the Agreement and Plan of Reorganization, the Qualivest Class A and
Class C shares were exchanged on a tax-free basis for FAIF Class A
shares. Qualivest Class Q and Class Y shares were exchanged for shares of
FAIF Class Y.
The financial information presented for Small Cap Value Fund and
International Index Fund prior to November 21, 1997, is that of the
Qualivest Small Companies Value Fund and International Opportunities
Fund, respectively. The historical financial information was carried
over to the newly formed FAIF fund.
The net assets before the reorganization and shares issued and redeemed
were as follows:
FAIF QUALIVEST
ACQUIRING FUND'S ACQUIRED FUND'S
FAIF FUND NET ASSETS SHARES ISSUED SHARES REDEEMED
-------------------------------------------------------------------------
Equity Index $ 588,178,511 18,031,329 22,037,539
Large Cap Value 1,118,968,409 7,029,057 12,142,680
International Index -- 17,489,227 17,489,234
Small Cap Value -- 25,553,735 25,556,824
-------------------------------------------------------------------------
Included in the net assets from the Qualivest Funds were the following
components:
<TABLE>
<CAPTION>
UNDISTRIBUTED
(DISTRIBUTIONS IN ACCUMULATED
EXCESS OF) NET REALIZED NET UNREALIZED
QUALIVEST FUND PAID IN CAPITAL INVESTMENT INCOME GAIN (LOSS) APPRECIATION NET ASSETS
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Optimized Stock $244,963,207 $ (3,653) $ (46,158) $106,772,181 $351,685,577
Large Companies Value 127,578,224 (7,466) (56,214) 43,260,898 170,775,442
International Opportunities 183,254,306 866,770 3,224,763 7,354,218 194,700,057
Small Companies Value 289,976,520 (113,306) 36,052,451 144,053,739 469,969,404
------------------------------------------------------------------------------------------------------------
</TABLE>
13 > FAIF ASSET ALLOCATION MERGER
On November 21, 1997, the assets of FAIF Asset Allocation Fund were
reorganized into the FAIF Balanced Fund. Under the Agreement and Plan of
Reorganization, the Asset Allocation Class A, Class B, and Class Y shares
were exchanged for Class A, Class B, and Class Y shares of Balanced Fund.
The acquisition was accompanied by a tax-free exchange in which 9,475,207
shares of the Asset Allocation Fund were exchanged for 7,167,873 shares
of the Balanced Fund. The total net assets of the Balanced Fund prior to
the conversion were $514,997,252. Asset Allocation net assets on November
21, 1997, were combined with those of the
113 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
NOTES TO
FINANCIAL STATEMENTS SEPTEMBER 30, 1999
Balanced Fund. Included in the net assets of $101,649,757 were
$89,550,476 of paid in capital, $110 of excess of distribution over net
investment income, $145,003 of accumulated net realized losses and
$12,244,394 of net unrealized appreciation.
14 > PIPER MERGER
The Board of Directors and shareholders of the Piper Funds approved a
reorganization of certain Piper Funds into FAIF which took place at the
close of business on July 31, 1998 (August 7, 1998 for Emerging Growth
Fund and Emerging Markets Growth Fund):
PIPER ACQUIRED FUND FAIF ACQUIRING FUND
-------------------------------------------------------------------------
Balanced Balanced
Growth Large Cap Growth (formerly Diversified Growth
Fund)
Growth and Income Large Cap Value (formerly Stock Fund)
Emerging Growth Mid Cap Growth (New FAIF shell)
Small Company Growth Small Cap Growth (formerly Emerging Growth)
Pacific-European Growth International
Emerging Markets Growth Emerging Markets (New FAIF shell)
-------------------------------------------------------------------------
Under the Agreement and Plan of Reorganization the Piper Class A shares
were exchanged on a tax free basis for FAIF Class A shares, and Piper
Class Y shares were exchanged for FAIF Class Y shares.
The financial information presented for Small Cap Growth Fund prior to
July 31, 1998, and for Mid Cap Growth Fund and Emerging Markets Growth
Fund prior to August 7, 1998, is that of the Piper Small Company Growth
Fund, Piper Emerging Growth Fund, and Piper Emerging Markets Growth Fund,
respectively. The historical financial information of the Piper Funds
were carried over to the newly formed FAIF funds.
The net assets before the reorganization and shares issued and redeemed
by the corresponding FAIF funds were as follows:
FAIF PIPER
ACQUIRING FUND'S ACQUIRED FUND'S
FAIF FUND NET ASSETS SHARES ISSUED SHARES REDEEMED
-------------------------------------------------------------------------
Balanced $ 585,905,723 3,017,680 3,150,040
Large Cap Growth 786,895,792 9,268,056 16,443,730
Large Cap Value 1,533,335,392 5,499,970 7,909,764
Mid Cap Growth -- 21,069,733 21,069,733
International 445,542,928 3,374,185 3,752,849
Emerging Markets -- 1,014,036 1,014,036
-------------------------------------------------------------------------
Included in the net assets from the Piper Funds were the following
components:
<TABLE>
<CAPTION>
(DISTRIBUTIONS IN ACCUMULATED NET UNREALIZED
EXCESS OF) NET REALIZED APPRECIATION/
PIPER FUND PAID IN CAPITAL INVESTMENT INCOME GAIN (LOSS) DEPRECIATION NET ASSETS
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balanced $ 33,376,466 $ -- $ -- $10,507,084 $ 43,883,550
Growth 98,020,791 -- -- 72,267,759 170,288,550
Growth & Income 83,543,993 -- (1,112) 53,525,337 137,068,218
Emerging Growth 146,516,915 (1,559,461) 55,342,876 92,043,362 292,343,692
Pacific-European Growth 42,458,135 (30) (1,605,538) 10,368,460 51,221,027
Emerging Markets Growth 15,062,390 (202,028) (7,144,878) (342,930) 7,372,554
-----------------------------------------------------------------------------------------------------------
</TABLE>
On July 31, 1998, the First American Small Cap Growth Fund acquired the
Piper Small Company Growth Fund. The Piper Small Company Growth Fund is
the financial reporting survivor. Therefore, Small Cap Growth Fund net
assets were combined with those of the Piper Small Company Growth Fund.
Prior to the conversion the Piper Small
114 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
Company Growth Fund net assets were $31,790,965. Included in the net
assets of $154,094,291 of Small Cap Growth Fund were $133,865,910 of paid
in capital, $65,299 of undistributed net investment income, $8,286,188 of
accumulated net realized gains, and $11,876,894 of net unrealized
appreciation. At the time of conversion the shares outstanding of the
Piper Small Company Growth Fund were adjusted to reflect the conversion
ratios utilized for the reorganization.
15 > FUND REORGANIZATION
Subject to shareholder approval the Board of Directors of the First
American Investment Funds, Inc. has approved the reorganization of the
Regional Equity Fund and Micro Cap Value Fund into the Small Cap Value
Fund on February 25, 2000.
Under the proposed Agreement and Plan of Reorganization the Class A and Y
shares of both Regional Equity Fund and Micro Cap Value Fund will be
exchanged for Class A and Y shares of the Small Cap Value Fund. Class B
of Regional Equity Fund will be exchanged for Class B shares of Small Cap
Value Fund.
115 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
NOTICE TO
SHAREHOLDERS SEPTEMBER 30, 1999 (UNAUDITED)
THE INFORMATION SET FORTH BELOW IS FOR THE FUND'S FISCAL YEAR AS REQUIRED
BY FEDERAL LAWS. SHAREHOLDERS, HOWEVER, MUST REPORT DISTRIBUTIONS ON A
CALENDAR YEAR BASIS FOR INCOME TAX PURPOSES WHICH MAY INCLUDE
DISTRIBUTIONS FOR PORTIONS OF TWO FISCAL YEARS OF THE FUND. ACCORDINGLY,
THE INFORMATION NEEDED BY SHAREHOLDERS FOR INCOME TAX PURPOSES WILL BE
SENT TO THEM IN EARLY 2000. PLEASE CONSULT YOUR TAX ADVISER FOR PROPER
TREATMENT OF THIS INFORMATION.
Dear First American Shareholders:
For the fiscal year ended September 30, 1999, each fund designated long
term capital gains and exempt income with regard to distributions paid
during the year as follows:
<TABLE>
<CAPTION>
(A) (B) (C) (D)
LONG TERM ORDINARY
CAPITAL GAINS INCOME TOTAL
DISTRIBUTIONS DISTRIBUTIONS DISTRIBUTIONS QUALIFYING
FUND (TAX BASIS) (TAX BASIS) (TAX BASIS) DIVIDENDS(1)
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Balanced 80% 20% 100% 27%
Equity Income 68 32 100 98
Equity Index 57 43 100 96
Large Cap Growth 91 9 100 85
Large Cap Value 91 9 100 98
Mid Cap Growth 100 -- 100 --
Mid Cap Value 68 32 100 30
Micro Cap Value 99 1 100 100
Regional Equity 92 8 100 --
Small Cap Growth 82 18 100 14
Small Cap Value 97 3 100 100
Emerging Markets -- -- -- --
International 87 13 100 --
International Index 80 20 100 --
Health Sciences 48 52 100 88
Technology 97 3 100 --
- -------------------------------------------------------------------------------------------
</TABLE>
* Items (A) and (B) are based on a percentage of the fund's total
distributions.
** Item (D) is based on a percentage of ordinary income distributions of the
fund.
(1) Qualifying dividends represent dividends which qualify for the corporate
dividends received deduction.
(2) Real Estate Securities Fund is not shown due to the fact that the tax year
end is December 31st.
116 '99 ANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
FIRST AMERICAN INVESTMENT FUNDS, INC.
BOARD OF DIRECTORS
MR. ROBERT DAYTON
Director of First American Investment Funds, Inc.
Chief Executive Officer of Okabena Company
- --------------------------------------------------------------------------------
MR. ROGER GIBSON
Director of First American Investment Funds, Inc.
Vice President of North America-Mountain Region for United Airlines
- --------------------------------------------------------------------------------
MR. ANDREW HUNTER III
Director of First American Investment Funds, Inc.
Chairman of Hunter Keith Industries
- --------------------------------------------------------------------------------
MR. LEONARD KEDROWSKI
Director of First American Investment Funds, Inc.
Owner and President of Executive Management Consulting, Inc.
- --------------------------------------------------------------------------------
MR. JOHN MURPHY JR.
Director of First American Investment Funds, Inc.
Executive Vice President, U.S. Bancorp
- --------------------------------------------------------------------------------
MR. ROBERT SPIES
Director of First American Investment Funds, Inc.
Retired Vice President, U.S. Bank National Association
- --------------------------------------------------------------------------------
MR. JOSEPH STRAUSS
Director of First American Investment Funds, Inc.
Former Chairman of First American Investment Funds, Inc.
Owner and President of Strauss Management Company
- --------------------------------------------------------------------------------
MS. VIRGINIA STRINGER
Chairperson of First American Investment Funds, Inc.
Owner and President of Strategic Management Resources, Inc.
- --------------------------------------------------------------------------------
<PAGE>
This report and the financial statements contained herein are submitted for the
general information of the shareholders of the corporation. The report is not
authorized for distribution to prospective investors in the corporation unless
preceded or accompanied by an effective prospectus for each of the funds
included. Shares in the funds are not deposits or obligations of, or guaranteed
or endorsed by, U.S. Bank or any of its affiliates. Such shares are also not
federally insured by the Federal Deposit Insurance Corporation, the Federal
Reserve Board, or any other agency. Investment in the shares involves investment
risk including loss of principal amount invested.
Past performance does not guarantee future results. The principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than their original cost.
FIRST AMERICAN INVESTMENT FUNDS, INC.
1 Freedom Valley Drive
Oaks, Pennsylvania 19456
INVESTMENT ADVISOR AND ADMINISTRATOR
FIRST AMERICAN ASSET MANAGEMENT,
A DIVISION OF U.S. BANK NATIONAL ASSOCIATION
601 Second Avenue South
Minneapolis, Minnesota 55402
CUSTODIAN
U.S. BANK NATIONAL ASSOCIATION
180 East Fifth Street
St. Paul, Minnesota 55101
DISTRIBUTOR
SEI INVESTMENTS DISTRIBUTION CO.
1 Freedom Valley Drive
Oaks, Pennsylvania 19456
INDEPENDENT AUDITORS
ERNST & YOUNG LLP
1400 Pillsbury Center
200 South Sixth Street
Minneapolis, Minnesota 55402
COUNSEL
DORSEY & WHITNEY LLP
220 South Sixth Street
Minneapolis, Minnesota 55402
- --------------------------------------------------------------------------------
FIRST AMERICAN FUNDS Bulk Rate
c/o Fulfillment Agent, American Financial Printing Inc. U.S. Postage
404 Industrial Boulevard, N.E. PAID
Minneapolis, MN 55413 Mpls, MN
Permit No. 26388
In an attempt to reduce shareholder costs and help eliminate duplication, the
funds will try to limit their mailing to one report for each address that lists
one or more shareholders with the same last name. If you would like additional
copies, please call Investor Services at 1-800-637-2548.
11/1999 331-99
