JANUARY 31, 2000
AS SUPPLEMENTED
NOVEMBER 1, 2000
ASSET CLASSES
(*) EQUITY FUNDS
* FUNDS OF FUNDS
* BOND FUNDS
* TAX FREE BOND FUNDS
* MONEY MARKET FUNDS
PROSPECTUS
FIRST AMERICAN INVESTMENT FUNDS, INC.
FIRST AMERICAN
MID CAP AND
SMALL CAP
FUNDS
CLASS A, CLASS B,
AND CLASS C SHARES
MID CAP GROWTH FUND
MID CAP VALUE FUND
SMALL CAP GROWTH FUND
SMALL CAP VALUE FUND
AS WITH ALL MUTUAL FUNDS, THE SECURITIES AND EXCHANGE COMMISSION HAS NOT
APPROVED OR DISAPPROVED THE SHARES OF THESE FUNDS, OR DETERMINED IF THE
INFORMATION IN THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANY STATEMENT TO THE
CONTRARY IS A CRIMINAL OFFENSE.
[LOGO] FIRST AMERICAN FUNDS(R)
THE POWER OF DISCIPLINED INVESTING(R)
<PAGE>
Table of
CONTENTS
FUND SUMMARIES
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Mid Cap Growth Fund 2
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Mid Cap Value Fund 4
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Small Cap Growth Fund 6
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Small Cap Value Fund 8
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POLICIES & SERVICES
--------------------------------------------------------------------------------
Buying Shares 10
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Selling Shares 14
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Managing Your Investment 15
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ADDITIONAL INFORMATION
--------------------------------------------------------------------------------
Management 17
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More About The Funds 18
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Financial Highlights 20
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FOR MORE INFORMATION Back Cover
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<PAGE>
Fund Summaries
INTRODUCTION
This section of the prospectus describes the objectives of the First American
Mid Cap and Small Cap Funds, summarizes the main investment strategies used by
each fund in trying to achieve its objectives, and highlights the risks involved
with these strategies. It also provides you with information about the
performance, fees, and expenses of the funds.
AN INVESTMENT IN THE FUNDS IS NOT A DEPOSIT OF U.S. BANK NATIONAL ASSOCIATION
AND IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR
ANY OTHER GOVERNMENT AGENCY.
1 PROSPECTUS - First American Mid Cap Funds and Small Cap Funds
Class A, Class B, and Class C Shares
<PAGE>
Fund Summaries
MID CAP GROWTH FUND
--------------------------------------------------------------------------------
OBJECTIVE
Mid Cap Growth Fund has an objective of growth of capital.
--------------------------------------------------------------------------------
MAIN INVESTMENT STRATEGIES
Under normal market conditions, Mid Cap Growth Fund invests primarily (at least
75% of total assets) in common stocks of mid capitalization companies, defined
as companies that have market capitalizations at the time of purchase within the
range of market capitalizations of companies constituting the Russell Midcap
Index. This index measures the performance of the 800 smallest companies in the
Russell 1000 Index (which is made up of the 1,000 largest U.S. companies based
on total market capitalization). As of the date of this prospectus, market
capitalizations of companies in the Russell Midcap Index ranged from
approximately $223 million to $37 billion.
The advisor will select companies that it believes exhibit the potential for
superior growth based on factors such as:
o Above average growth in revenue and earnings
o Strong competitive position
o Strong management
o Sound financial condition
Under certain market conditions, the fund may frequently invest in companies at
the time of their initial public offering (IPO). By virtue of its size and
institutional nature, the advisor may have greater access than individual
investors have to IPOs, including access to so-called "hot issues" which are
generally traded in the aftermarket at prices in excess of the IPO price. IPOs
will frequently be sold within 12 months of purchase which may result in
increased short-term capital gains.
Up to 25% of the fund's total assets may be invested in securities of foreign
issuers which are either listed on a United States stock exchange or represented
by American Depositary Receipts.
To generate additional income, the fund may lend securities representing up to
one-third of the value of its total assets to broker-dealers, banks, and other
institutions.
--------------------------------------------------------------------------------
MAIN RISKS
The value of your investment in this fund will change daily, which means you
could lose money. The main risks of investing in this fund include:
RISKS OF COMMON STOCKS
Stocks may decline significantly in price over short or extended periods of
time. Price changes may occur in the market as a whole, or they may occur in
only a particular company, industry, or sector of the market. In addition,
growth stocks and/or mid-cap stocks may underperform the market as a whole.
RISKS OF MID-CAP STOCKS
While stocks of mid-cap companies may be slightly less volatile than those of
small-cap companies, they still involve substantial risk and their prices may be
subject to more abrupt or erratic movements than those of larger, more
established companies or the market averages in general.
RISKS OF IPOs
Companies involved in IPOs generally have limited operating histories, and
prospects for future profitability are uncertain. Prices of IPOs may also be
unstable due to the absence of a prior public market, the small number of shares
available for trading, and limited investor information. IPOs will frequently be
sold within 12 months of purchase. This may result in increased short-term
capital gains, which will be taxable to shareholders as ordinary income.
FOREIGN SECURITY RISK
Securities of foreign issuers, even when dollar-denominated and publicly traded
in the United States, may involve risks not associated with the securities of
domestic issuers, including the risks of adverse currency fluctuations and of
political or social instability, or diplomatic developments that could adversely
affect the securities.
RISKS OF SECURITIES LENDING
The fund is subject to the risk that the other party to a securities lending
agreement will default on its obligations.
--------------------------------------------------------------------------------
FUND PERFORMANCE
Illustrations on the next page provide you with information on the fund's
volatility and performance. Of course, past performance does not guarantee
future results.
The bar chart shows you how performance of the fund's Class A shares has varied
from year to year. The performance of Class B and Class C shares will be lower
due to their higher expenses. Sales charges are not reflected in the chart; if
they had been, returns would be lower.
The table compares the fund's performance for Class A and Class B shares over
different time periods to that of the fund's benchmark index, which is a broad
measure of market performance. However, because Class C shares have not been
offered for a full calendar year, no information is presented for these shares.
The fund's performance reflects sales charges and fund expenses; the benchmark
is unmanaged and has no expenses.
Both the chart and the table assume that all distributions have been reinvested.
2 PROSPECTUS - First American Mid Cap Funds and Small Cap Funds
Class A, Class B, and Class C Shares
<PAGE>
Fund Summaries
MID CAP GROWTH FUND CONTINUED
--------------------------------------------------------------------------------
FUND PERFORMANCE (CONTINUED)
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR(1),(2)
[BAR CHART]
65.53% 7.23% 18.46% -4.90% 39.35% 11.84% 23.40% 10.58% 54.59%
-------------------------------------------------------------------------------
1991 1992 1993 1994 1995 1996 1997 1998 1999
Best Quarter: Quarter ending December 31, 1999 47.75%
Worst Quarter: Quarter ending September 30, 1998 (19.34)%
<TABLE>
<CAPTION>
Since Since
AVERAGE ANNUAL TOTAL RETURNS Inception Inception Inception
AS OF 12/31/99(1),(2) Date One Year Five Years (Class A) (Class B)
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Mid Cap Growth Fund (Class A) 4/23/90 46.50% 25.51% 20.26% N/A
--------------------------------------------------------------------------------------------
Mid Cap Growth Fund (Class B) 8/7/98 48.41% N/A N/A 39.15%
--------------------------------------------------------------------------------------------
Russell Midcap Index(3) 18.23% 21.86% 17.52% 34.92%
--------------------------------------------------------------------------------------------
</TABLE>
(1)Mid Cap Growth Fund's 1999 returns were higher due in part to its strategy of
investing in IPOs in a period favorable for IPO investing. Of course, such
favorable returns involve accepting the risk of volatility, and there is no
assurance that the fund's future investment in IPOs will have the same effect
on performance as it did in 1999.
(2)On 8/7/98, the Mid Cap Growth Fund became the successor by merger to the
Piper Emerging Growth Fund, a series of Piper Funds Inc. Prior to the merger,
the Mid Cap Growth Fund had no assets or liabilities. Performance presented
prior to 8/7/98, represents that of the Piper Emerging Growth Fund.
(3)An ummanaged index comprised of the 800 smallest securities in the Russell
1000 Index, which represent approximately 35% of the total market
capitalization of the investable U.S. equity market. The since inception
performance of the index for Class A and Class B shares is calculated from
4/30/90 and 8/31/98, respectively.
--------------------------------------------------------------------------------
FEES AND EXPENSES
As an investor, you pay fees and expenses to buy and hold shares of the fund.
You pay shareholder fees directly when you buy or sell shares. You pay annual
fund operating expenses indirectly since they are deducted from fund assets. The
figures below show fund expenses during the fiscal year ended September 30,
1999.(1)
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
SHAREHOLDER FEES CLASS A CLASS B CLASS C
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MAXIMUM SALES CHARGE (LOAD) AS A % OF OFFERING PRICE 5.25%(2) 0.00% 1.00%
MAXIMUM DEFERRED SALES CHARGE (LOAD) AS A % OF ORIGINAL PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LESS 0.00%(3) 5.00% 1.00%
ANNUAL MAINTENANCE FEE(4)
ONLY CHARGED TO ACCOUNTS WITH BALANCES BELOW $500 $25 $25 $25
ANNUAL FUND OPERATING EXPENSES AS A % OF AVERAGE NET ASSETS
------------------------------------------------------------------------------------------------------------
Management Fees 0.70% 0.70% 0.70%
Distribution and Service (12b-1) Fees 0.25% 1.00% 1.00%
Other Expenses 0.24% 0.28% 0.28%
TOTAL 1.19% 1.98% 1.98%
------------------------------------------------------------------------------------------------------------
</TABLE>
(1)Actual expenses for the fiscal year were lower than those shown because of
voluntary fee waivers by the fund's distributor. See "Information --
Financial Highlights." The net expenses the fund actually paid after waivers
for the fiscal year ended September 30, 1999, were:
<TABLE>
<S> <C> <C> <C>
Waiver of Fund Expenses (0.05)% (0.09)% (0.09)%
TOTAL ACTUAL ANNUAL OPERATING EXPENSES (AFTER WAIVERS) 1.14% 1.89% 1.89%
</TABLE>
THE ADVISOR INTENDS TO WAIVE FEES DURING THE CURRENT FISCAL YEAR SO THAT TOTAL
FUND OPERATING EXPENSES DO NOT EXCEED 1.15%, 1.90% AND 1.90%, RESPECTIVELY, FOR
CLASS A, CLASS B AND CLASS C SHARES. FEE WAIVERS MAY BE DISCONTINUED AT ANY
TIME.
(2)Certain investors may qualify for reduced sales charges. See "Buying Shares
-- Calculating Your Share Price."
(3)Class A share investments of $1 million or more on which no front-end sales
charge is paid may be subject to a contingent deferred sales charge. See
"Buying Shares -- Calculating Your Share Price."
(4)The fund reserves the right to charge your account an annual maintenance fee
of $25 if your balance falls below $500 as a result of selling or exchanging
shares. See "Policies & Services -- Selling Shares, Accounts with Low
Balances."
--------------------------------------------------------------------------------
EXAMPLE This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 for the time periods indicated, that your investment has a 5%
return each year, and that the fund's operating expenses remain the same.
Although your actual costs and returns may differ, based on these assumptions
your costs would be:
<TABLE>
<CAPTION>
CLASS B CLASS B CLASS C CLASS C
assuming redemption assuming no redemption assuming redemption assuming no redemption
CLASS A at end of each period at end of each period at end of each period at end of each period
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 year $ 640 $ 701 $ 201 $ 399 $ 299
3 years $ 883 $1,021 $ 621 $ 715 $ 715
5 years $1,145 $1,268 $1,068 $1,157 $1,157
10 years $1,892 $2,102 $2,102 $2,383 $2,383
</TABLE>
3 PROSPECTUS - First American Mid Cap Funds and Small Cap Funds
Class A, Class B, and Class C Shares
<PAGE>
Fund Summaries
MID CAP VALUE FUND
--------------------------------------------------------------------------------
OBJECTIVE
Mid Cap Value Fund has an objective of capital appreciation.
--------------------------------------------------------------------------------
MAIN INVESTMENT STRATEGIES
Under normal market conditions, Mid Cap Value Fund invests primarily (at least
75% of total assets) in common stocks of mid-capitalization companies, defined
as companies that have market capitalizations at the time of purchase within the
range of market capitalizations of companies constituting the Russell Midcap
Index. This index measures the performance of the 800 smallest companies in the
Russell 1000 Index (which is made up of the 1,000 largest U.S. companies based
on total market capitalization). As of the date of this prospectus, market
capitalizations of companies in the Russell Midcap Index ranged from
approximately $223 million to $37 billion.
In selecting stocks, the fund's advisor invests in securities it believes:
o are undervalued relative to other securities in the same industry or market.
o exhibit good or improving fundamentals.
o exhibit an identifiable catalyst that could close the gap between market
value and fair value over the next one to two years.
To generate additional income, the fund may lend securities representing up to
one-third of the value of its total assets to broker-dealers, banks, and other
institutions.
--------------------------------------------------------------------------------
MAIN RISKS
The value of your investment in this fund will change daily, which means you
could lose money. The main risks of investing in this fund include:
RISKS OF COMMON STOCKS
Stocks may decline significantly in price over short or extended periods of
time. Price changes may occur in the market as a whole, or they may occur in
only a particular company, industry or sector of the market. In addition, value
stocks and/or mid-cap stocks may underperform the market as a whole.
RISKS OF MID-CAP STOCKS
While stocks of mid-cap companies may be slightly less volatile than those of
small-cap companies, they still involve substantial risk and their prices may be
subject to more abrupt or erratic movements than those of larger, more
established companies or the market averages in general.
RISKS OF SECURITIES LENDING
The fund is subject to the risk that the other party to a securities lending
agreement will default on its obligations.
--------------------------------------------------------------------------------
FUND PERFORMANCE
Illustrations on the next page provide you with information on the fund's
volatility and performance. Of course, past performance does not guarantee
future results.
The bar chart shows you how performance of the fund's Class A shares has varied
from year to year. The performance of Class B and Class C shares will be lower
due to their higher expenses. Sales charges are not reflected in the chart; if
they had been, returns would be lower.
The table compares the fund's performance for Class A and Class B shares over
different time periods to that of the fund's benchmark index, which is a broad
measure of market performance. However, because Class C shares have not been
offered for a full calendar year, no information is presented for these shares.
The fund's performance reflects sales charges and fund expenses; the benchmark
is unmanaged and has no expenses.
Both the chart and the table assume that all distributions have been reinvested.
4 PROSPECTUS - First American Mid Cap Funds and Small Cap Funds
Class A, Class B, and Class C Shares
<PAGE>
Fund Summaries
MID CAP VALUE FUND CONTINUED
--------------------------------------------------------------------------------
FUND PERFORMANCE (CONTINUED)
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR
[BAR CHART]
-6.82% 18.70% 19.33% 19.01% 6.72% 20.02% 31.94% 24.21% -13.24% -6.29%
-------------------------------------------------------------------------------
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
Best Quarter: Quarter ending June 30, 1997 17.97%
Worst Quarter: Quarter ending September 30, 1998 (30.80)%
<TABLE>
<CAPTION>
Since
AVERAGE ANNUAL TOTAL RETURNS Inception Ten Years Inception
AS OF 12/31/99 Date One Year Five Years (Class A) (Class B)
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Mid Cap Value Fund (Class A) 12/22/87 (11.23)% 8.67% 9.77% N/A
-------------------------------------------------------------------------------------------
Mid Cap Value Fund (Class B) 8/15/94 (11.62)% 8.80% N/A 8.33%
-------------------------------------------------------------------------------------------
Russell Midcap Index(1) 18.23% 21.86% 15.92% 19.25%
-------------------------------------------------------------------------------------------
</TABLE>
(1)An ummanaged index comprised of the 800 smallest securities in the Russell
1000 Index, which represent approximately 35% of the total market
capitalization of the investable U.S. equity market. The since inception
performance of the index for Class B shares is calculated from 8/31/94.
--------------------------------------------------------------------------------
FEES AND EXPENSES
As an investor, you pay fees and expenses to buy and hold shares of the fund.
You pay shareholder fees directly when you buy or sell shares. You pay annual
fund operating expenses indirectly since they are deducted from fund assets. The
figures below show fund expenses during the fiscal year ended September 30,
1999.(1)
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
SHAREHOLDER FEES CLASS A CLASS B CLASS C
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MAXIMUM SALES CHARGE (LOAD) AS A % OF OFFERING PRICE 5.25%(2) 0.00% 1.00%
MAXIMUM DEFERRED SALES CHARGE (LOAD) AS A % OF ORIGINAL PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LESS 0.00%(3) 5.00% 1.00%
ANNUAL MAINTENANCE FEE(4)
ONLY CHARGED TO ACCOUNTS WITH BALANCES BELOW $500 $25 $25 $25
ANNUAL FUND OPERATING EXPENSES AS A % OF AVERAGE NET ASSETS
------------------------------------------------------------------------------------------------------------
Management Fees 0.70% 0.70% 0.70%
Distribution and Service (12b-1) Fees 0.25% 1.00% 1.00%
Other Expenses 0.23% 0.23% 0.23%
TOTAL 1.18% 1.93% 1.93%
------------------------------------------------------------------------------------------------------------
</TABLE>
(1)The net expenses the fund actually paid after waivers for the fiscal year
ended September 30, 1999, were:
<TABLE>
<S> <C> <C> <C>
Waiver of Fund Expenses (0.03)% (0.03)% (0.03)%
TOTAL ACTUAL ANNUAL OPERATING EXPENSES (AFTER WAIVERS) 1.15% 1.90% 1.90%
</TABLE>
THE ADVISOR INTENDS TO WAIVE FEES DURING THE CURRENT FISCAL YEAR SO THAT TOTAL
FUND OPERATING EXPENSES DO NOT EXCEED 1.15%, 1.90% AND 1.90%, RESPECTIVELY, FOR
CLASS A, CLASS B AND CLASS C SHARES. FEE WAIVERS MAY BE DISCONTINUED AT ANY
TIME.
(2)Certain investors may qualify for reduced sales charges. See "Buying Shares
-- Calculating Your Share Price."
(3)Class A share investments of $1 million or more on which no front-end sales
charge is paid may be subject to a contingent deferred sales charge. See
"Buying Shares -- Calculating Your Share Price."
(4)The fund reserves the right to charge your account an annual maintenance fee
of $25 if your balance falls below $500 as a result of selling or exchanging
shares. See "Policies & Services -- Selling Shares, Accounts with Low
Balances."
--------------------------------------------------------------------------------
EXAMPLE This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 for the time periods indicated, that your investment has a 5%
return each year, and that the fund's operating expenses remain the same.
Although your actual costs and returns may differ, based on these assumptions
your costs would be:
<TABLE>
<CAPTION>
CLASS B CLASS B CLASS C CLASS C
assuming redemption assuming no redemption assuming redemption assuming no redemption
CLASS A at end of each period at end of each period at end of each period at end of each period
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 year $ 639 $ 696 $ 196 $ 394 $ 294
3 years $ 880 $1,006 $ 596 $ 700 $ 700
5 years $1,140 $1,242 $1,042 $1,131 $1,131
10 years $1,882 $2,059 $2,059 $2,331 $2,331
</TABLE>
5 PROSPECTUS - First American Mid Cap Funds and Small Cap Funds
Class A, Class B, and Class C Shares
<PAGE>
Fund Summaries
SMALL CAP GROWTH FUND
--------------------------------------------------------------------------------
OBJECTIVE
Small Cap Growth Fund has an objective of growth of capital.
--------------------------------------------------------------------------------
MAIN INVESTMENT STRATEGIES
Under normal market conditions, Small Cap Growth Fund invests primarily (at
least 75% of total assets) in common stocks of small capitalization companies,
defined as companies that have market capitalizations at the time of purchase
within the range of market capitalizations of companies constituting the Russell
2000 Index. This index measures the performance of the 2,000 smallest companies
in the Russell 3000 Index (which is made up of the 3,000 largest U.S. companies
based on total market capitalization). As of the date of this prospectus, market
capitalizations of companies in the Russell 2000 Index ranged from approximately
$11 million to $13 billion.
The advisor will select companies that it believes exhibit the potential for
superior growth based on factors such as:
o Above average growth in revenue and earnings
o Strong competitive position
o Strong management
o Sound financial condition
Under certain market conditions, the fund may frequently invest in companies at
the time of their initial public offering (IPO). By virtue of its size and
institutional nature, the advisor may have greater access than individual
investors have to IPOs, including access to so-called "hot issues" which are
generally traded in the aftermarket at prices in excess of the IPO price. IPOs
will frequently be sold within 12 months of purchase which may result in
increased short-term capital gains.
Up to 25% of the fund's total assets may be invested in securities of foreign
issuers which are either listed on a United States stock exchange or represented
by American Depositary Receipts.
To generate additional income, the fund may lend securities representing up to
one-third of the value of its total assets to broker-dealers, banks, and other
institutions.
--------------------------------------------------------------------------------
MAIN RISKS
The value of your investment in this fund will change daily, which means you
could lose money. The main risks of investing in this fund include:
RISKS OF COMMON STOCKS
Stocks may decline significantly in price over short or extended periods of
time. Price changes may occur in the market as a whole, or they may occur in
only a particular company, industry or sector of the market. In addition, growth
stocks and/or stocks of small-capitalization companies may underperform the
market as a whole.
RISKS OF SMALL-CAP STOCKS
Stocks of small-capitalization companies involve substantial risk. These stocks
historically have experienced greater price volatility than stocks of
larger-capitalization companies, and they may be expected to do so in the
future.
RISKS OF IPOs
Companies involved in IPOs generally have limited operating histories, and
prospects for future profitability are uncertain. Prices of IPOs may also be
unstable due to the absence of a prior public market, the small number of shares
available for trading, and limited investor information. IPOs will frequently be
sold within 12 months of purchase. This may result in increased short-term
capital gains, which will be taxable to shareholders as ordinary income.
FOREIGN SECURITY RISK
Securities of foreign issuers, even when dollar-denominated and publicly traded
in the United States, may involve risks not associated with the securities of
domestic issuers, including the risks of adverse currency fluctuations and of
political or social instability, or diplomatic developments that could adversely
affect the securities.
RISKS OF SECURITIES LENDING
The fund is subject to the risk that the other party to a securities lending
agreement will default on its obligations.
--------------------------------------------------------------------------------
FUND PERFORMANCE
Illustrations on the next page provide you with information on the fund's
volatility and performance. Of course, past performance does not guarantee
future results.
The bar chart shows you how performance of the fund's Class A shares has varied
from year to year. The performance of Class B and Class C shares will be lower
due to their higher expenses. Sales charges are not reflected in the chart; if
they had been, returns would be lower.
The table compares the fund's performance for Class A and Class B shares over
different time periods to that of the fund's benchmark index, which is a broad
measure of market performance. However, because Class C shares have not been
offered for a full calendar year, no information is presented for these shares.
The fund's performance reflects sales charges and fund expenses; the benchmark
is unmanaged and has no expenses.
Both the chart and the table assume that all distributions have been reinvested.
6 PROSPECTUS - First American Mid Cap Funds and Small Cap Funds
Class A, Class B, and Class C Shares
<PAGE>
Fund Summaries
SMALL CAP GROWTH FUND CONTINUED
--------------------------------------------------------------------------------
FUND PERFORMANCE (CONTINUED)
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR(1),(2)
[BAR CHART]
-0.42% 40.55% 11.47% 10.98% -2.44% 20.20% 11.68% 29.23% 7.73% 66.76%
--------------------------------------------------------------------------------
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
Best Quarter: Quarter ending December 31, 1999 51.34%
Worst Quarter: Quarter ending September 30, 1998 (22.14)%
<TABLE>
<CAPTION>
Since
AVERAGE ANNUAL TOTAL RETURNS Inception Ten Years Inception
AS OF 12/31/99(1),(2) Date One Year Five Years (Class A) (Class B)
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Small Cap Growth Fund (Class A) 3/16/87 58.04% 24.18% 17.43% N/A
---------------------------------------------------------------------------------------------
Small Cap Growth Fund (Class B) 7/31/98 60.39% N/A N/A 46.51%
---------------------------------------------------------------------------------------------
Russell 2000 Index(3) 21.26% 16.69% 13.40% 15.43%
---------------------------------------------------------------------------------------------
</TABLE>
(1)Small Cap Growth Fund's 1999 returns were higher due in part to its strategy
of investing in IPOs in a period favorable for IPO investing. Of course, such
favorable returns involve accepting the risk of volatility, and there is no
assurance that the fund's future investment in IPOs will have the same effect
on performance as it did in 1999.
(2)On 7/31/98, the Small Cap Growth Fund became the successor by merger to the
Piper Small Company Growth Fund, a series of Piper Funds Inc. Prior to the
merger, the Small Cap Growth Fund had no assets or liabilities. Performance
presented prior to 7/31/98 represents that of the Piper Small Company Growth
Fund. On 9/21/96, shareholders 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, the Fund's investment policies were revised.
(3)An ummanaged index comprised of the smallest 2000 companies in the Russell
3000 Index. The latter index is composed of 3000 large U.S. companies
representing approximately 98% of the investable U.S. equity market. The
since inception performance of the index for Class B shares is calculated
from 7/31/98.
--------------------------------------------------------------------------------
FEES AND EXPENSES
As an investor, you pay fees and expenses to buy and hold shares of the fund.
You pay shareholder fees directly when you buy or sell shares. You pay annual
fund operating expenses indirectly since they are deducted from fund assets. The
figures below show fund expenses during the fiscal year ended September 30,
1999.(1)
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
SHAREHOLDER FEES CLASS A CLASS B CLASS C
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MAXIMUM SALES CHARGE (LOAD) AS A % OF OFFERING PRICE 5.25%(2) 0.00% 1.00%
MAXIMUM DEFERRED SALES CHARGE (LOAD) AS A % OF ORIGINAL PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LESS 0.00%(3) 5.00% 1.00%
ANNUAL MAINTENANCE FEE(4)
ONLY CHARGED TO ACCOUNTS WITH BALANCES BELOW $500 $25 $25 $25
ANNUAL FUND OPERATING EXPENSES AS A % OF AVERAGE NET ASSETS
------------------------------------------------------------------------------------------------------------
Management Fees 0.70% 0.70% 0.70%
Distribution and Service (12b-1) Fees 0.25% 1.00% 1.00%
Other Expenses 0.20% 0.21% 0.21%
TOTAL 1.15% 1.91% 1.91%
------------------------------------------------------------------------------------------------------------
</TABLE>
(1)Actual expenses for the fiscal year were lower than those shown because of
voluntary fee waivers by the fund's distributor. See "Additional Information
-- Financial Highlights." The net expenses the fund actually paid after
waivers for the fiscal year ended September 30, 1999, were:
<TABLE>
<S> <C> <C> <C>
Waiver of Fund Expenses (0.01)% (0.01)% (0.01)%
TOTAL ACTUAL ANNUAL OPERATING EXPENSES (AFTER WAIVERS) 1.14% 1.90% 1.90%
</TABLE>
THE ADVISOR INTENDS TO WAIVE FEES DURING THE CURRENT FISCAL YEAR SO THAT TOTAL
FUND OPERATING EXPENSES DO NOT EXCEED 1.15%, 1.90% AND 1.90%, RESPECTIVELY, FOR
CLASS A, CLASS B AND CLASS C SHARES. FEE WAIVERS MAY BE DISCONTINUED AT ANY
TIME.
(2)Certain investors may qualify for reduced sales charges. See "Buying Shares
-- Calculating Your Share Price."
(3)Class A share investments of $1 million or more on which no front-end sales
charge is paid may be subject to a contingent deferred sales charge. See
"Buying Shares -- Calculating Your Share Price."
(4)The fund reserves the right to charge your account an annual maintenance fee
of $25 if your balance falls below $500 as a result of selling or exchanging
shares. See "Policies & Services -- Selling Shares, Accounts with Low
Balances."
--------------------------------------------------------------------------------
EXAMPLE This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 for the time periods indicated, that your investment has a 5%
return each year, and that the fund's operating expenses remain the same.
Although your actual costs and returns may differ, based on these assumptions
your costs would be:
<TABLE>
<CAPTION>
CLASS B CLASS B CLASS C CLASS C
assuming redemption assuming no redemption assuming redemption assuming no redemption
CLASS A at end of each period at end of each period at end of each period at end of each period
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 year $ 636 $ 694 $ 194 $ 392 $ 292
3 years $ 871 $1,000 $ 600 $ 694 $ 694
5 years $1,125 $1,232 $1,032 $1,121 $1,121
10 years $1,849 $2,035 $2,035 $2,310 $2,310
</TABLE>
7 PROSPECTUS - First American Mid Cap Funds and Small Cap Funds
Class A, Class B, and Class C Shares
<PAGE>
Fund Summaries
SMALL CAP VALUE FUND
--------------------------------------------------------------------------------
OBJECTIVE
Small Cap Value Fund has an objective of capital appreciation.
--------------------------------------------------------------------------------
MAIN INVESTMENT STRATEGIES
Under normal market conditions, Small Cap Value Fund invests primarily (at least
75% of total assets) in common stocks of small capitalization companies, defined
as companies that have market capitalizations at the time of purchase within the
range of market capitalizations of companies constituting the Russell 2000
Index. This index measures the performance of the 2,000 smallest companies in
the Russell 3000 Index (which is made up of the 3,000 largest U.S. companies
based on total market capitalization). As of the date of this prospectus, market
capitalizations of companies in the Russell 2000 Index ranged from approximately
$11 million to $13 billion.
In selecting stocks, the fund's advisor invests in securities it believes:
o are undervalued relative to other securities in the same industry or market.
o exhibit good or improving fundamentals.
o exhibit an identifiable catalyst that could close the gap between market
value and fair value over the next one to two years.
To generate additional income, the fund may lend securities representing up to
one-third of the value of its total assets to broker-dealers, banks, and other
institutions.
--------------------------------------------------------------------------------
MAIN RISKS
The value of your investment in this fund will change daily, which means you
could lose money. The main risks of investing in this fund include:
RISKS OF COMMON STOCKS
Stocks may decline significantly in price over short or extended periods of
time. Price changes may occur in the market as a whole, or they may occur in
only a particular company, industry or sector of the market. In addition, value
stocks and/or stocks of small-capitalization companies may underperform the
market as a whole.
RISKS OF SMALL-CAP STOCKS
Stocks of small-capitalization companies involve substantial risk. These stocks
historically have experienced greater price volatility than stocks of
larger-capitalization companies, and they may be expected to do so in the
future.
RISKS OF SECURITIES LENDING
The fund is subject to the risk that the other party to a securities lending
agreement will default on its obligations.
--------------------------------------------------------------------------------
FUND PERFORMANCE
Illustrations on the next page provide you with information on the fund's
volatility and performance. Of course, past performance does not guarantee
future results.
The bar chart shows you how performance of the fund's Class A shares has varied
from year to year. The performance of Class B and Class C shares will be lower
due to their higher expenses. Sales charges are not reflected in the chart; if
they had been, returns would be lower.
The table compares the fund's performance for Class A and Class B shares over
different time periods to that of the fund's benchmark index, which is a broad
measure of market performance. However, because Class C shares have not been
offered for a full calendar year, no information is presented for these shares.
The fund's performance reflects sales charges and fund expenses; the benchmark
is unmanaged and has no expenses.
Both the chart and the table assume that all distributions have been reinvested.
8 PROSPECTUS - First American Mid Cap Funds and Small Cap Funds
Class A, Class B, and Class C Shares
<PAGE>
Fund Summaries
SMALL CAP VALUE FUND CONTINUED
--------------------------------------------------------------------------------
FUND PERFORMANCE (CONTINUED)
ANNUAL TOTAL RETURNS AS OF 12/31 EACH YEAR(1)
[BAR CHART]
-13.72% 60.96% 26.50% 22.60% -0.33% 47.30% 20.07% 20.07% -8.47% 5.93%
--------------------------------------------------------------------------------
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
Best Quarter: Quarter ending March 31, 1991 33.49%
Worst Quarter: Quarter ending September 30, 1998 (23.21)%
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS Inception Years Inception
AS OF 12/31/99(1) Date One Year Five Years (Class A) (Class B)
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Small Cap Value Fund (Class A) 1/1/88 0.35% 14.29% 15.39% N/A
--------------------------------------------------------------------------------------------
Small Cap Value Fund (Class B) 11/24/97 0.10% N/A N/A (4.52)%
--------------------------------------------------------------------------------------------
Russell 2000 Index(2) 21.26% 16.69% 13.40% 9.25%
--------------------------------------------------------------------------------------------
</TABLE>
(1)Performance prior to 8/1/94 is that of Small Company Value Trust Fund, a
predecessor collective trust fund. On 8/1/94, substantially all of the assets
of Small Company Value Trust Fund were transferred into Qualivest Small
Companies Value Fund, a mutual fund registered under the Investment Company
Act of 1940. On 11/21/97, First American Small Cap Value Fund became the
successor by merger to Qualivest Small Companies Value Fund. The objectives,
policies, and guidelines of the predecessor funds were, in all material
respects, identical to those of Small Cap Value Fund. Performance is adjusted
to reflect Small Cap Value Fund's Class A share fees and expenses, before any
fee waivers. Small Company Value Trust Fund was not registered under the
Investment Company Act of 1940 and therefore was not subject to certain
investment restrictions that might have adversely affected performance.
(2)An unmanaged index comprised of the smallest 2000 companies in the Russell
3000 Index. The latter index is composed of 3000 large U.S. companies
representing approximately 98% of the investable U.S. equity market. The
since inception performance of the index for Class B shares is calculated
from 11/30/97.
--------------------------------------------------------------------------------
FEES AND EXPENSES
As an investor, you pay fees and expenses to buy and hold shares of the fund.
You pay shareholder fees directly when you buy or sell shares. You pay annual
fund operating expenses indirectly since they are deducted from fund assets. The
figures below show fund expenses during the fiscal year ended September 30,
1999.(1)
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
SHAREHOLDER FEES CLASS A CLASS B CLASS C
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MAXIMUM SALES CHARGE (LOAD) AS A % OF OFFERING PRICE 5.25%(2) 0.00% 1.00%
MAXIMUM DEFERRED SALES CHARGE (LOAD) AS A % OF ORIGINAL PURCHASE PRICE OR
REDEMPTION PROCEEDS, WHICHEVER IS LESS 0.00%(3) 5.00% 1.00%
ANNUAL MAINTENANCE FEE(4)
ONLY CHARGED TO ACCOUNTS WITH BALANCES BELOW $500 $25 $25 $25
ANNUAL FUND OPERATING EXPENSES AS A % OF AVERAGE NET ASSETS
------------------------------------------------------------------------------------------------------------
Management Fees 0.70% 0.70% 0.70%
Distribution and Service (12b-1) Fees 0.25% 1.00% 1.00%
Other Expenses 0.19% 0.19% 0.19%
TOTAL 1.14% 1.89% 1.89%
------------------------------------------------------------------------------------------------------------
</TABLE>
(1)The net expenses the fund actually paid after waivers for the fiscal year
ended September 30, 1999, were:
<TABLE>
<S> <C> <C> <C>
Waiver of Fund Expenses (0.00)% (0.00)% (0.00)%
TOTAL ACTUAL ANNUAL OPERATING EXPENSES (AFTER WAIVERS) 1.14% 1.89% 1.89%
</TABLE>
THE ADVISOR INTENDS TO WAIVE FEES DURING THE CURRENT FISCAL YEAR SO THAT TOTAL
FUND OPERATING EXPENSES DO NOT EXCEED 1.15%, 1.90% AND 1.90%, RESPECTIVELY, FOR
CLASS A, CLASS B AND CLASS C SHARES. FEE WAIVERS MAY BE DISCONTINUED AT ANY
TIME.
(2)Certain investors may qualify for reduced sales charges. See "Buying Shares
-- Calculating Your Share Price."
(3)Class A share investments of $1 million or more on which no front-end sales
charge is paid may be subject to a contingent deferred sales charge. See
"Buying Shares -- Calculating Your Share Price."
(4)The fund reserves the right to charge your account an annual maintenance fee
of $25 if your balance falls below $500 as a result of selling or exchanging
shares. See "Policies & Services -- Selling Shares, Accounts with Low
Balances."
--------------------------------------------------------------------------------
EXAMPLE This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. It assumes that you
invest $10,000 for the time periods indicated, that your investment has a 5%
return each year, and that the fund's operating expenses remain the same.
Although your actual costs and returns may differ, based on these assumptions
your costs would be:
<TABLE>
<CAPTION>
CLASS B CLASS B CLASS C CLASS C
assuming redemption assuming no redemption assuming redemption assuming no redemption
CLASS A at end of each period at end of each period at end of each period at end of each period
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 year $ 635 $ 692 $ 192 $ 390 $ 290
3 years $ 868 $ 994 $ 594 $ 688 $ 688
5 years $1,120 $1,221 $1,021 $1,111 $1,111
10 years $1,838 $2,016 $2,016 $2,289 $2,289
</TABLE>
9 PROSPECTUS - First American Mid Cap Funds and Small Cap Funds
Class A, Class B, and Class C Shares
<PAGE>
Policies & Services
BUYING SHARES
You may become a shareholder in any of the funds with an initial investment of
$1,000 or more ($250 for a retirement plan or a Uniform Gifts to Minors
Act/Uniform Transfers to Minors Act (UGMA/UTMA) account). Additional investments
can be made for as little as $100 ($25 for a retirement plan or an UGMA/UTMA
account). The funds have the right to waive these minimum investment
requirements for employees of the funds' advisor and its affiliates. The funds
also have the right to reject any purchase order.
--------------------------------------------------------------------------------
CHOOSING A SHARE CLASS
All funds in this prospectus offer Class A, Class B, and Class C shares.
Each class has its own cost structure. The amount of your purchase and the
length of time you expect to hold your shares will be factors in determining
which class of shares is best for you.
CLASS A SHARES
If you are making an investment that qualifies for a reduced sales charge, Class
A shares may be best for you. Class A shares feature:
o a front-end sales charge, described below.
o lower annual expenses than Class B or Class C shares. See "Fund Summaries"
for more information on fees and expenses.
Because Class A shares will normally be the better choice if your investment
qualifies for a reduced sales charge:
o orders for Class B shares for $250,000 or more normally will be treated as
orders for Class A shares.
o orders for Class C shares for $1 million or more normally will be treated as
orders for Class A shares.
o orders for Class B or Class C shares by an investor eligible to purchase
Class A shares without a front-end sales charge normally will be treated as
orders for Class A shares.
CLASS B SHARES
If you want all your money to go to work for you immediately, you may prefer
Class B shares. Class B shares have no front-end sales charge. However they do
have:
o higher annual expenses than Class A shares. (See "Fees and Expenses" in the
"Fund Summaries" section.)
o a back-end sales charge, called a "contingent deferred sales charge," if you
redeem your shares within six years of purchase.
o automatic conversion to Class A shares approximately eight years after
purchase, thereby reducing future annual expenses.
CLASS C SHARES
These shares combine some of the characteristics of Class A and Class B shares.
Class C shares have a low front-end sales charge of 1%, so more of your
investment goes to work immediately than if you had purchased Class A shares.
However, Class C shares also feature:
o a 1% contingent deferred sales charge if you redeem your shares within 18
months of purchase.
o higher annual expenses than Class A shares. (See "Fees and Expenses" in the
"Fund Summaries" section.)
o no conversion to Class A shares.
Because Class C shares do not convert to Class A shares, they will continue to
have higher annual expenses than Class A shares for as long as you hold them.
--------------------------------------------------------------------------------
12b-1 FEES
Each fund has adopted a plan under rule 12b-1 of the Investment Company Act to
pay the fund's distributor an annual fee for the distribution and sale of its
shares and for services provided to shareholders.
For 12b-1 fees are equal to:
--------------------------------------------------------------------------------
Class A shares 0.25% of average daily net assets
Class B shares 1% of average daily net assets
Class C shares 1% of average daily net assets
Because these fees are paid out of a fund's assets on an ongoing basis, over
time these fees will increase the cost of your investment and may cost you more
than paying other types of sales charges.
The Class A share 12b-1 fee is a shareholder servicing fee. For Class B and
Class C shares, a portion of the 12b-1 fee equal to 0.25% of average daily net
assets is a shareholder servicing fee and the rest is a distribution fee.
The funds' distributor uses the shareholder servicing fee to compensate
investment professionals, participating institutions and "one-stop" mutual fund
networks for providing ongoing services to shareholder accounts. These
institutions receive annual fees equal to 0.25% of a fund's Class A, Class B,
and Class C share average daily net assets attributable to shares sold through
them. For Class B shares, and for net asset value sales of Class A shares on
which the institution receives a commission, the institution does not begin to
receive its annual fee until one year after the shares are sold. The funds'
distributor also pays institutions that sell Class C shares a 0.75% annual
distribution fee beginning one year after the shares are sold. The distributor
may pay additional fees to institutions, using the sales charges it receives, in
exchange for sales and/or administrative services performed on behalf of the
institution's customers.
10 PROSPECTUS - First American Mid Cap Funds and Small Cap Funds
Class A, Class B, and Class C Shares
<PAGE>
Policies & Services
BUYING SHARES CONTINUED
--------------------------------------------------------------------------------
CALCULATING YOUR SHARE PRICE
Your purchase price will be based on the fund's net asset value (NAV) per share,
which is generally calculated as of the close of regular trading on the New York
Stock Exchange (usually 3 p.m. Central time) every day the exchange is open.
A fund's NAV is equal to the market value of its investments and other assets,
less any liabilities, divided by the number of fund shares. If market prices are
not readily available for an investment or if the advisor believes they are
unreliable, fair value prices may be determined in good faith using methods
approved by the funds' board of directors.
CLASS A SHARES
Your purchase price is typically the net asset value of your shares, plus a
front-end sales charge. Sales charges vary depending on the amount of your
purchase. The funds' distributor receives the sales charge you pay and reallows
a portion of the sales charge to your investment professional or participating
institution.
Maximum
Sales Charge Reallowance
as a % of as a % of as a % of
Purchase Net Amount Purchase
Price Invested Price
--------------------------------------------------------------------------------
Less than $50,000 5.25% 5.54% 5.00%
$ 50,000 - $ 99,999 4.25% 4.44% 4.00%
$100,000 - $249,999 3.25% 3.36% 3.00%
$250,000 - $499,999 2.25% 2.30% 2.00%
$500,000 - $999,999 1.75% 1.78% 1.50%
$1 million and over 0% 0% 0%
REDUCING YOUR SALES CHARGE
As shown in the preceding tables, larger purchases of Class A shares reduce the
percentage sales charge you pay. You also may reduce your sales charge in the
following ways:
PRIOR PURCHASES. Prior purchases of Class A shares of any First American fund
(except a money market fund) will be factored into your sales charge
calculation. For example, let's say you're making a $10,000 investment. If the
current value of all other First American fund Class A shares that you hold is
$40,000 or more, your current sales charge is reduced. To receive a reduced
sales charge, you must notify the funds' transfer agent of your prior purchases.
This must be done at the time of purchase, either directly to the transfer agent
in writing or by notifying your investment professional or financial
institution.
PURCHASES BY RELATED ACCOUNTS. Concurrent and prior purchases of Class A shares
by certain other accounts also will be combined with your purchase to determine
your sales charge. For example, purchases made by your spouse or children under
age 21 will reduce your sales charge. To receive a reduced sales charge, you
must notify the funds' transfer agent of purchases by any related accounts. This
must be done at the time of purchase, either directly to the transfer agent in
writing or by notifying your investment professional or financial institution.
LETTER OF INTENT. If you plan to invest $50,000 or more over a 13-month period
in Class A shares of any First American fund except the money market funds, you
may reduce your sales charge by signing a non-binding letter of intent. (If you
do not fulfill the letter of intent, you must pay the applicable sales charge.
In addition, if you reduce your sales charge to zero under a letter of intent
and then sell your Class A shares within 18 months of their purchase, you may be
charged a contingent deferred sales charge of 1%. See "For Investments of Over
$1 Million.")
More information on these ways to reduce your sales charge appears in the
Statement of Additional Information (SAI). The SAI also contains information on
investors who are eligible to purchase Class A shares without a sales charge.
--------------------------------------------------------------------------------
FOR INVESTMENTS OF OVER $1 MILLION
There is no initial sales charge on Class A share purchases of $1 million or
more. However, your investment professional or financial institution may
receive a commission of up to 1% on your purchase. If such a commission is
paid, you will be assessed a contingent deferred sales charge (CDSC) of 1% if
you sell your shares within 18 months. To find out whether you will be
assessed a CDSC, ask your investment professional or financial institution.
The funds' distributor receives any CDSC imposed when you sell your Class A
shares. The CDSC is based on the value of your shares at the time of purchase
or at the time of sale, whichever is less. The charge does not apply to
shares you acquired by reinvesting your dividend or capital gain
distributions.
To help lower your costs, shares that are not subject to a CDSC will be sold
first. Other shares will then be sold in an order that minimizes your CDSC.
The CDSC for Class A shares will be waived for:
o redemptions following the death or disability (as defined in the Internal
Revenue Code) of a shareholder, and
o redemptions that equal the minimum required distribution from an
individual retirement account or other retirement plan to a shareholder
who has reached the age of 70 1/2.
CLASS B SHARES
Your purchase price for Class B shares is their net asset value -- there is no
front-end sales charge. However, if you redeem your shares within six years of
purchase, you will pay a back-end sales charge, called a contingent deferred
sales charge (CDSC). Although you pay no front-end sales charge when you buy
Class B shares, the funds' distributor pays a sales commission of 4.25% of the
amount invested to investment professionals and financial institutions which
sell Class B shares. The funds' distributor receives any CDSC imposed when you
sell your Class B shares.
11
11 PROSPECTUS - First American Mid Cap Funds and Small Cap Funds
Class A, Class B, and Class C Shares
<PAGE>
Policies & Services
BUYING SHARES CONTINUED
Your CDSC will be based on the value of your shares at the time of purchase or
at the time of sale, whichever is less. The charge does not apply to shares you
acquired by reinvesting your dividend or capital gain distributions. Shares will
be sold in the order that minimizes your CDSC.
CDSC as a % of the
Year since purchase value of your shares
--------------------------------------------------------------------------------
First 5%
Second 5%
Third 4%
Fourth 3%
Fifth 2%
Sixth 1%
Seventh 0%
Eighth 0%
Your Class B shares will automatically convert to Class A shares eight years
after the first day of the month you purchased the shares. For example, if you
purchase Class B shares on June 15, 2000, they will convert to Class A shares on
June 1, 2008.
The CDSC will be waived for:
o redemptions following the death or disability (as defined in the Internal
Revenue Code) of a shareholder.
o redemptions that equal the minimum required distribution from an individual
retirement account or other retirement plan to a shareholder who has reached
the age of 70 1/2.
o redemptions through a systematic withdrawal plan, at a rate of up to 12% a
year of your account's value. During the first year, the 12% annual limit
will be based on the value of your account on the date the plan is
established. Thereafter, it will be based on the value of your account on the
preceding December 31.
CLASS C SHARES
Your purchase price for Class C shares is their net asset value plus a front-end
sales charge equal to 1% of the purchase price (1.01% of the net amount
invested). If you redeem your shares within 18 months of purchase, you will be
assessed a contingent deferred sales charge (CDSC) of 1% of the value of your
shares at the time of purchase or at the time of sale, whichever is less. The
CDSC does not apply to shares you acquired by reinvesting your dividend or
capital gain distributions. Shares will be sold in the order that minimizes your
CDSC.
Even though your sales charge is only 1%, the funds' distributor pays a
commission equal to 2% of your purchase price to your broker or participating
institution. Additionally, the advisor may pay its affiliates, U.S. Bancorp
Investments, Inc. and U.S. Bancorp Piper Jaffray Inc. an additional commission
equal to 1% of your purchase price. The distributor receives any CDSC imposed
when you sell your Class C shares.
The CDSC for Class C shares will be waived in the same circumstances as the
Class B share CDSC. See "Class B Shares" above.
Unlike Class B shares, Class C shares do not convert to Class A shares after a
specified period of time. Therefore, your shares will continue to have higher
annual expenses than Class A shares.
--------------------------------------------------------------------------------
HOW TO BUY SHARES
You may buy shares on any day the New York Stock Exchange is open. However
purchases of shares may be restricted in the event of an early or unscheduled
close of the New York Stock Exchange. Your shares will be priced at the next NAV
calculated after your order is accepted by the fund, plus any applicable sales
charge. To make sure that your order is accepted, follow the directions for
purchasing shares given below.
BY PHONE
You may purchase shares by calling your investment professional or financial
institution, if they have a sales agreement with the funds' distributor. In many
cases, your order will be effective that day if received by your investment
professional or financial institution by the close of regular trading on the New
York Stock Exchange. In some cases, however, you will have to transmit your
request by an earlier time in order for your purchase request to be effective
that day. This allows your investment professional or financial institution time
to process your request and transmit it to the fund. Some financial institutions
may charge a fee for helping you purchase shares. Contact your investment
professional or financial institution for more information.
If you are paying by wire, you may purchase shares by calling 1-800-637-2548
before 3 p.m. Central time. All information will be taken over the telephone,
and your order will be placed when the funds' custodian receives payment by
wire. Wire federal funds as follows:
U.S. Bank National Association, Minneapolis, MN
ABA Number 091000022
For Credit to: DST Systems, Inc.:
Account Number 160234580266
For Further Credit to (investor name and fund name)
You cannot purchase shares by wire on days when federally chartered banks are
closed.
BY MAIL
To purchase shares by mail, simply complete and sign a new account form, enclose
a check made payable to the fund you wish to invest in, and mail both to:
First American Funds
c/o DST Systems, Inc.
P.O. Box 219382
Kansas City, Missouri 64121-9382
12 PROSPECTUS - First American Mid Cap Funds and Small Cap Funds
Class A, Class B, and Class C Shares
<PAGE>
Policies & Services
BUYING SHARES CONTINUED
After you have established an account, you may continue to purchase shares by
mailing your check to First American Funds at the same address. Please note the
following:
o All purchases must be made in U.S. dollars.
o Third-party checks, credit cards, credit card checks, and cash are not
accepted.
o If a check does not clear your bank, the funds reserve the right to cancel
the purchase, and you could be liable for any losses or fees incurred.
--------------------------------------------------------------------------------
INVESTING AUTOMATICALLY
To purchase shares as part of a savings discipline, you may add to your
investment on a regular basis:
o by having $100 or more ($25 for a retirement plan or an UGMA/UTMA account)
automatically withdrawn from your bank account on a periodic basis and
invested in fund shares.
o through automatic monthly exchanges of your shares of Prime Obligations Fund,
a money market fund in the First American family of funds. Exchanges must be
made into the same class of shares that you hold in Prime Obligations Fund.
You may apply for participation in either of these programs through your
investment professional or financial institution or by calling 1-800-637-2548.
13 PROSPECTUS - First American Mid Cap Funds and Small Cap Funds
Class A, Class B, and Class C Shares
<PAGE>
Policies & Services
SELLING SHARES
--------------------------------------------------------------------------------
HOW TO SELL SHARES
You may sell your shares on any day when the New York Stock Exchange is open.
However redemption of shares may be restricted in the event of an early or
unscheduled close of the New York Stock Exchange. Your shares will be sold at
the next NAV calculated after your order is accepted by the fund, less any
applicable contingent deferred sales charge. To make sure that your order is
accepted, follow the directions for selling shares given below.
The proceeds from your sale normally will be mailed or wired within one day, but
in no event more than seven days, after your request is received in proper form.
BY PHONE
If you purchased shares through a investment professional or financial
institution, simply call them to sell your shares. In many cases, your
redemption will be effective that day if received by your investment
professional or financial institution by the close of regular trading on the New
York Stock Exchange. In some cases, however, you will have to call by an earlier
time in order for your redemption to be effective that day. This allows your
investment professional or financial institution time to process your request
and transmit it to the fund. Contact your investment professional or financial
institution directly for more information.
If you did not purchase shares through a investment professional or financial
institution, you may sell your shares by calling 1-800-637-2548. Proceeds can be
wired to your bank account (if the proceeds are at least $1,000 and you have
previously supplied your bank account information to the transfer agent) or sent
to you by check. The funds reserve the right to limit telephone exchanges to
$50,000 per day.
If you recently purchased your shares by check or through the Automated Clearing
House (ACH), proceeds from the sale of those shares may not be available until
your check or ACH payment has cleared, which may take up to 10 calendar days
from the date of purchase.
By Mail
To sell shares by mail, send a written request to your investment professional
or financial institution, or to the funds' transfer agent at the following
address:
First American Funds
c/o DST Systems, Inc.
P.O. Box 219382
Kansas City, Missouri 64121-9382
Your request should include the following information:
o Name of the fund
o Account number
o Dollar amount or number of shares redeemed
o Name on the account
o Signatures of all registered account owners
Signatures on a written request must be guaranteed if:
o you would like the proceeds from the sale to be paid to anyone other than to
the shareholder of record.
o you would like the check mailed to an address other than the address on the
funds' records.
o your redemption request is for $50,000 or more.
A signature guarantee assures that a signature is genuine and protects
shareholders from unauthorized account transfers. Banks, savings and loan
associations, trust companies, credit unions, broker-dealers, and member firms
of a national securities exchange may guarantee signatures. Call your financial
institution to determine if it has this capability.
Proceeds from a written redemption request will be sent to you by check.
--------------------------------------------------------------------------------
SYSTEMATIC WITHDRAWALS
If your account has a value of $5,000 or more, you may redeem a specific dollar
amount from your account on a regular basis. To set up systematic withdrawals,
contact your investment professional or financial institution.
You should not make systematic withdrawals if you plan to continue investing in
the fund, due to sales charges and tax liabilities.
--------------------------------------------------------------------------------
REINVESTING AFTER A SALE
If you sell Class A shares, you may reinvest in Class A shares of that fund or
another First American fund within 180 days without a sales charge. To reinvest
in Class A shares at net asset value (without paying a sales charge), you must
notify the transfer agent directly in writing or notify your investment
professional or financial institution.
--------------------------------------------------------------------------------
ACCOUNTS WITH LOW BALANCES
Except for retirement plans and UGMA/UTMA accounts, if your account balance
falls below $500 as a result of selling or exchanging shares, the fund
reserves the right to either:
o Deduct a $25 annual account maintenance fee, which is intended to allocate
the costs of maintaining accounts more equitably among shareholders, or
o Close your account and send you the proceeds, less any applicable
contingent deferred sales charge.
Before taking any action, however, the fund will send you written notice of
the action it intends to take and give you 30 days to re-establish a minimum
account balance of $500.
14 PROSPECTUS - First American Mid Cap Funds and Small Cap Funds
Class A, Class B, and Class C Shares
<PAGE>
Policies & Services
MANAGING YOUR INVESTMENT
--------------------------------------------------------------------------------
EXCHANGING SHARES
If your investment goals or your financial needs change, you may move from one
First American fund to another. There is no fee to exchange shares.
Generally, you may exchange your shares only for shares of the same class.
However, you may exchange your Class A shares for Class Y shares of the same or
another First American fund if you subsequently become eligible to participate
in that class (for example, by opening a fiduciary, custody, or agency account
with a financial institution which invests in Class Y shares).
Exchanges are made based on the net asset value per share of each fund at the
time of the exchange. When you exchange your Class A shares of one of the funds
for Class A shares of another First American fund, you do not have to pay a
sales charge. When you exchange your Class B or Class C shares for Class B or
Class C shares of another First American fund, the time you held the shares of
the "old" fund will be added to the time you hold the shares of the "new" fund
for purposes of determining your CDSC or, in the case of Class B shares,
calculating when your shares convert to Class A shares.
Before exchanging into any fund, be sure to read its prospectus carefully. A
fund may change or cancel its exchange policies at any time. You will be
notified of any changes. The funds have the right to limit exchanges to four
times per year.
BY PHONE
You may exchange shares by calling your investment professional, your financial
institution, or the funds' transfer agent, provided that both funds have
identical shareholder registrations. To request an exchange through the funds'
transfer agent, call 1-800-637-2548. Your instructions must be received by the
funds' transfer agent before 3 p.m. Central time, or by the time specified by
your investment professional or financial institution, in order for shares to be
exchanged the same day.
BY MAIL
To exchange shares by written request, please follow the procedures under
"Selling Shares." Be sure to include the names of both funds involved in the
exchange.
--------------------------------------------------------------------------------
TELEPHONE TRANSACTIONS
You may buy, sell, or exchange shares by telephone, unless you elected on
your new account form to restrict this privilege. If you wish to reinstate
this option on an existing account, please call Investor Services at
1-800-637-2548 to request the appropriate form.
The funds and their agents will not be responsible for any losses that may
result from acting on wire or telephone instructions that they reasonably
believe to be genuine. The funds and their agents will each follow reasonable
procedures to confirm that instructions received by telephone are genuine,
which may include taping telephone conversations.
It may be difficult to reach the funds by telephone during periods of unusual
market activity. If you are unable to reach the funds or their agents by
telephone, please consider sending written instructions.
--------------------------------------------------------------------------------
STAYING INFORMED
SHAREHOLDER REPORTS
Shareholder reports are mailed twice a year, in November and May. They include
financial statements, performance information, a message from your portfolio
managers, and, on an annual basis, the auditors' report.
In an attempt to reduce shareholder costs and help eliminate duplication, the
funds will try to limit their mailings 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 1-800-637-2548.
15 PROSPECTUS - First American Mid Cap Funds and Small Cap Funds
Class A, Class B, and Class C Shares
<PAGE>
Policies & Services
MANAGING YOUR INVESTMENT CONTINUED
--------------------------------------------------------------------------------
STATEMENTS AND CONFIRMATIONS
Statements summarizing activity in your account are mailed at least quarterly.
Confirmations are mailed following each purchase or sale of fund shares.
DIVIDENDS AND DISTRIBUTIONS
Dividends from Mid Cap Growth Fund and Mid Cap Value Fund net investment income
are declared and paid monthly. Dividends from Small Cap Growth Fund and Small
Cap Value Fund net investment income are declared and paid quarterly. Any
capital gains are distributed at least once each year.
On the ex-dividend date for a distribution, a fund's share price is reduced by
the amount of the distribution. If you buy shares just before the ex-dividend
date, in effect, you "buy the dividend." You will pay the full price for the
shares and then receive a portion of that price back as a taxable distribution.
Dividend and capital gain distributions will be reinvested in additional shares
of the fund paying the distribution, unless you request that distributions be
reinvested in another First American fund or paid in cash. This request may be
made on your new account form or by writing to the fund. If you request that
your distributions be paid in cash but those distributions cannot be delivered
because of an incorrect mailing address, the undelivered distributions and all
future distributions will be reinvested in fund shares.
--------------------------------------------------------------------------------
TAXES
Some of the tax consequences of investing in the funds are discussed below. More
information about taxes is in the Statement of Additional Information. However,
because everyone's tax situation is unique, always consult your tax professional
about federal, state and local tax consequences.
TAXES ON DISTRIBUTIONS
Each fund pays its shareholders dividends from its net investment income and any
net capital gains that it has realized. For most investors, fund dividends and
distributions are considered taxable whether they are reinvested or taken in
cash (unless your investment is in an IRA or other tax-advantaged account).
Dividends from a fund's net investment income and short-term capital gains are
taxable as ordinary income. Distributions of a fund's long-term capital gains
are taxable as long-term capital gains, regardless of how long you have held
your shares. The funds expect that, as a result of their investment objectives
and strategies, their distributions will consist primarily of capital gains.
TAXES ON TRANSACTIONS
The sale of fund shares, or the exchange of one fund's shares for shares of
another fund, will be a taxable event and may result in a capital gain or loss.
The gain or loss will be considered long-term if you have held your shares for
more than one year. A gain or loss on shares held for one year or less is
considered short-term and is taxed at the same rates as ordinary income.
The exchange of one class of shares for another class of shares in the same fund
will not be taxable.
16 PROSPECTUS - First American Mid Cap Funds and Small Cap Funds
Class A, Class B, and Class C Shares
<PAGE>
Additional Information
MANAGEMENT
U.S. Bank National Association (U.S. Bank), acting through its First American
Asset Management division, is the funds' investment advisor. First American
Asset Management provides investment management services to individuals and
institutions, including corporations, foundations, pensions and retirement
plans. As of December 31, 1999, it had more than $78 billion in assets under
management, including investment company assets of more than $33 billion. As
investment advisor, First American Asset Management manages the funds' business
and investment activities, subject to the authority of the board of directors.
Each fund pays the investment advisor a monthly fee for providing investment
advisory services. During the fiscal year ended September 30, 1999, the funds
paid the following investment advisory fees to First American Asset Management:
Advisory fee
as a % of
average daily
net assets
--------------------------------------------------------------------------------
MID CAP GROWTH FUND 0.63%
MID CAP VALUE FUND 0.67%
SMALL CAP GROWTH FUND 0.69%
SMALL CAP VALUE FUND 0.70%
--------------------------------------------------------------------------------
INVESTMENT ADVISOR
First American Asset Management
601 Second Avenue South
Minneapolis, Minnesota 55402
DISTRIBUTOR
SEI Investments Distribution Co.
Oaks, Pennsylvania 19456
DIRECT FUND CORRESPONDENCE TO:
First American Funds
P.O. Box 1330
Minneapolis, MN 55440-1330
ADDITIONAL COMPENSATION
U.S. Bank and other affiliates of U.S. Bancorp may act as fiduciary with
respect to plans subject to the Employee Retirement Income Security Act of 1974
(ERISA) and other trust and agency accounts that invest in the funds. As
described above, U.S. Bank receives compensation for acting as the funds'
investment adviser. U.S. Bank and its affiliates also receive compensation in
connection with the following:
CUSTODY SERVICES. U.S. Bank provides or compensates others to provide custody
services to the funds. U.S. Bank is paid monthly fees equal, on an annual
basis, to 0.03% of a fund's average daily net assets. In addition, U.S. Bank is
reimbursed for its out-of-pocket expenses incurred while providing custody
services to the funds.
ADMINISTRATION SERVICES. U.S. Bank provides or compensates others to provide
administrative services to all open-end funds in the First American family of
funds. These services include general administrative and accounting services,
transfer agency and dividend disbursing services, and shareholder services. U.S.
Bank receives fees equal, on an annual basis, to 0.12% of the aggregate average
daily net assets of all open-end mutual funds in the First American fund family
up to $8 billion and 0.105% of the aggregate average daily net assets of all
open-end mutual funds in the First American fund family in excess of $8 billion.
These fees are allocated among the funds in the First American family of funds
on the basis of their relative net asset values. Additionally, the funds pay
U.S. Bank fees based upon the number of funds and accounts maintained.
SECURITIES LENDING SERVICES. In connection with lending their portfolio
securities, the funds pay administrative and custodial fees to U.S. Bank which
are equal to 40% of the funds' income from these securities lending
transactions.
BROKERAGE TRANSACTIONS. When purchasing and selling portfolio securities for
the funds, the funds' investment advisor may place trades through its
affiliates, U.S. Bancorp Investments, Inc. and U.S. Bancorp Piper Jaffray Inc.,
which will earn commissions on these transactions.
SHAREHOLDER SERVICING FEES. To the extent that fund shares are held through U.S.
Bank or its broker-dealer affiliates, U.S. Bancorp Investments, Inc. and U.S.
Bancorp Piper Jaffray Inc., those entities may receive shareholder servicing
fees from the funds' distributor.
--------------------------------------------------------------------------------
PORTFOLIO MANAGEMENT
Each fund's investments are managed by a team of persons associated with First
American Asset Management.
17 PROSPECTUS - First American Mid Cap Funds and Small Cap Funds
Class A, Class B, and Class C Shares
<PAGE>
Additional Information
MORE ABOUT THE FUNDS
--------------------------------------------------------------------------------
OBJECTIVES
The funds' objectives, which are described in the "Fund Summaries" section, may
be changed without shareholder approval. If a fund's objectives change, you will
be notified at least 30 days in advance. Please remember: There is no guarantee
that any fund will achieve its objectives.
--------------------------------------------------------------------------------
INVESTMENT STRATEGIES
The funds' main investment strategies are discussed in the "Fund Summaries"
section. These are the strategies that the funds' investment advisor believes
are most likely to be important in trying to achieve the funds' objectives. You
should be aware that each fund may also use strategies and invest in securities
that are not described in this prospectus, but that are described in the
Statement of Additional Information (SAI). For a copy of the SAI, call Investor
Services at 1-800-637-2548.
TEMPORARY INVESTMENTS
In an attempt to respond to adverse market, economic, political, or other
conditions, each fund may temporarily invest without limit in cash and in U.S.
dollar-denominated high-quality money market instruments, and other short-term
securities, including money market funds advised by the funds' advisor. Being
invested in these securities may keep a fund from participating in a market
upswing and prevent the fund from achieving its investment objectives.
PORTFOLIO TURNOVER
Fund managers may trade securities frequently, resulting, from time to time, in
an annual portfolio turnover rate of over 100%. For the fiscal year ended
September 30, 1999, Mid Cap Value Fund and Small Cap Growth Fund had portfolio
turnover sales in excess of 100%. Trading of securities may produce capital
gains, which are taxable to shareholders when distributed. Active trading may
also increase the amount of commissions or mark-ups to broker-dealers that the
fund pays when it buys and sells securities. The "Financial Highlights" section
of this prospectus shows each fund's historical portfolio turnover rate.
--------------------------------------------------------------------------------
RISKS
The main risks of investing in the funds are summarized in the "Fund Summaries"
section. More information about fund risks is presented below.
MARKET RISK
All stocks are subject to price movements due to changes in general economic
conditions, changes in the level of prevailing interest rates, changes in
investor perceptions of the market, or the outlook for overall corporate
profitability.
SECTOR RISK
The stocks of companies within specific industries or sectors of the economy can
periodically perform differently than the overall stock market. This can be due
to changes in such things as the regulatory or competitive environment or to
changes in investor perceptions of a particular industry or sector.
COMPANY RISK
Individual stocks can perform differently than the overall market. This may be a
result of specific factors such as changes in corporate profitability due to the
success or failure of specific products or management strategies, or it may be
due to changes in investor perceptions regarding a company.
RISKS OF SMALL-CAP STOCKS
Stocks of small-cap companies involve substantial risk. These companies may lack
the management expertise, financial resources, product diversification and
competitive strengths of larger companies. Prices of small-cap stocks may be
subject to more abrupt or erratic movements than stock prices of larger, more
established companies or the market averages in general. In addition, the
frequency and volume of their trading may be less than is typical of larger
companies, making them subject to wider price fluctuations. In some cases, there
could be difficulties in selling the stocks of small-cap companies at the
desired time and price.
18 PROSPECTUS - First American Mid Cap Funds and Small Cap Funds
Class A, Class B, and Class C Shares
<PAGE>
Additional Information
MORE ABOUT THE FUNDS CONTINUED
RISKS OF MID-CAP STOCKS
While stocks of mid-cap companies may be slightly less volatile than those of
small-cap companies, they still involve substantial risk. Mid-cap companies may
have limited product lines, markets or financial resources, and they may be
dependent on a limited management group. Stocks of mid-cap companies may be
subject to more abrupt or erratic market movements than those of larger, more
established companies or the market averages in general.
RISKS OF IPOs
Most IPOs involve a high degree of risk not normally associated with offerings
of more seasoned companies. Companies involved in IPOs generally have limited
operating histories, and their prospects for future profitability are uncertain.
These companies often are engaged in new and evolving businesses and are
particularly vulnerable to competition and to changes in technology, markets,
and economic conditions. They may be dependent on certain key managers and third
parties, need more personnel and other resources to manage growth, and require
significant additional capital. They may also be dependent on limited product
lines and uncertain property rights and need regulatory approvals. Investors in
IPOs can be affected by substantial dilution in the value of their shares, by
sales of additional shares, and by concentration of control in existing
management and principal shareholders. Stock prices of IPOs can also be highly
unstable, due to the absence of a prior public market, the small number of
shares available for trading, and limited investor information.
FOREIGN SECURITY RISK
Up to 25% of each fund's total assets may be invested in securities of foreign
issuers which are either listed on a United States stock exchange or represented
by American Depositary Receipts. Securities of foreign issuers, even when
dollar-denominated and publicly traded in the United States, may involve risks
not associated with the securities of domestic issuers. For certain foreign
countries, political or social instability, or diplomatic developments could
adversely affect the securities. There is also the risk of loss due to
governmental actions such as a change in tax statutes or the modification of
individual property rights. In addition, individual foreign economies may differ
favorably or unfavorably from the U.S. economy.
RISKS OF ACTIVE MANAGEMENT
Each fund is actively managed and its performance therefore will reflect in part
the advisor's ability to make investment decisions which are suited to achieving
the fund's investment objectives. Due to their active management, the funds
could underperform other mutual funds with similar investment objectives.
RISKS OF SECURITIES LENDING
When a fund loans its portfolio securities, it will receive collateral equal to
at least 100% of the value of the loaned securities. Nevertheless, the fund
risks a delay in the recovery of the loaned securities, or even the loss of
rights in the collateral deposited by the borrower if the borrower should fail
financially. To reduce these risks, the funds enter into loan arrangements only
with institutions which the funds' advisor has determined are creditworthy under
guidelines established by the funds' board of directors.
19 PROSPECTUS - First American Mid Cap Funds and Small Cap Funds
Class A, Class B, and Class C Shares
<PAGE>
Additional Information
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
The tables that follow present performance information about the Class A, Class
B and Class C shares of each fund. This information is intended to help you
understand each fund's financial performance for the past five years or, if
shorter, the period of the fund's operations. Some of this information reflects
financial results for a single fund share. Total returns in the tables represent
the rate that you would have earned or lost on an investment in a fund,
excluding sales charges and assuming you reinvested all of your dividends and
distributions.
The information for the fiscal year ended September 30, 1999, has been audited
by Ernst & Young LLP, independent auditors, whose report, along with the funds'
financial statements, is included in the funds' annual report, which is
available upon request. The information for the fiscal years ended on or before
September 30, 1998, has been audited by other auditors.
MID CAP GROWTH FUND(1)
<TABLE>
<CAPTION>
Fiscal year ended September 30,
CLASS A SHARES 1999 1998 1997 1996 1995(2)
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value, Beginning of Period $ 11.80 $ 15.25 $ 13.86 $ 12.97 $ 9.63
-------- -------- -------- -------- --------
Investment Operations:
Net Investment Loss (0.07) (0.09) (0.08) (0.05) (0.06)
Net Gains (Losses) on Investments
(both realized and unrealized) 3.40 (1.80) 2.72 2.18 3.40
-------- -------- -------- -------- --------
Total From Investment Operations 3.33 (1.89) 2.64 2.13 3.34
-------- -------- -------- -------- --------
Less Distributions:
Dividends (from Net Investment Income) -- -- -- -- --
Distributions (from Capital Gains) (2.26) (1.56) (1.25) (1.24) --
-------- -------- -------- -------- --------
Total Distributions (2.26) (1.56) (1.25) (1.24) --
-------- -------- -------- -------- --------
Net Asset Value, End of Period $ 12.87 $ 11.80 $ 15.25 $ 13.86 $ 12.97
======== ======== ======== ======== ========
Total Return 31.69% (13.05)% 21.04% 17.84% 34.68%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $165,072 $188,763 $274,799 $303,769 $252,632
Ratio of Expenses to Average Net Assets 1.14% 1.18% 1.23% 1.18% 1.24%
Ratio of Net Loss to Average Net Assets (0.48)% (0.60)% (0.55)% (0.41)% (0.51)%
Ratio of Expenses to Average Net Assets (excluding waivers) 1.19% 1.34% 1.39% 1.37% 1.42%
Ratio of Net Loss to Average Net Assets (excluding waivers) (0.53)% (0.76)% (0.71)% (0.60)% (0.69)%
Portfolio Turnover Rate 94% 39% 51% 44% 33%
------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1)The financial highlights for Mid Cap Growth Fund include the historical
financial highlights of Piper Emerging Growth Fund Class A and Class B
shares. The assets of Piper Emerging Growth Fund were acquired by Mid Cap
Growth Fund effective August 7, 1998.
(2)Per share amounts have been adjusted to reflect the effect of the stock
dividend declared on December 23, 1995.
20 PROSPECTUS - First American Mid Cap Funds and Small Cap Funds
Class A, Class B, and Class C Shares
<PAGE>
Additional Information
FINANCIAL HIGHLIGHTS CONTINUED
MID CAP GROWTH FUND(1) (CONTINUED)
<TABLE>
<CAPTION>
Period from
Period from Period from February 18, 1997 to
Fiscal year ended August 7, 1998 to October 1, 1997 to September 30,
CLASS B SHARES September 30, 1999 September 30, 1998(2) April 28, 1998(3) 1997(4)
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value, Beginning of Period $11.78 $13.86 $15.20 $12.54
------ ------ ------ ------
Investment Operations:
Net Investment Loss (0.10) (0.01) (0.09) (0.10)
Net Gains (Losses) on Investments
(both realized and unrealized) 3.33 (2.07) 1.02 2.76
------ ------ ------ ------
Total From Investment Operations 3.23 (2.08) 0.93 2.66
------ ------ ------ ------
Less Distributions:
Dividends (from Net Investment Income) -- -- -- --
Distributions (from Capital Gains) (2.26) -- (1.56) --
------ ------ ------ ------
Total Distributions (2.26) -- (1.56) --
------ ------ ------ ------
Net Asset Value, End of Period $12.75 $11.78 $14.57 $15.20
====== ====== ====== ======
Total Return 30.66% (15.01)% 7.77% 21.21
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ 360 $ 17 $ -- $1,028
Ratio of Expenses to Average Net Assets 1.89% 1.87%(5) 1.85%(5) 1.85%(5)
Ratio of Net Loss to Average Net Assets (1.26)% (1.12)%(5) (1.33)%(5) (1.16)%(5)
Ratio of Expenses to Average Net Assets
(excluding waivers) 1.98% 1.87%(5) 1.85%(5) 1.85%(5)
Ratio of Net Loss to Average Net Assets
(excluding waivers) (1.35)% (1.12)%(5) (1.33)%(5) (1.16)%(5)
Portfolio Turnover Rate 94% 39% 29% 51%
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1)The financial highlights for Mid Cap Growth Fund include the historical
financial highlights of Piper Emerging Growth Fund Class A and Class B
shares. The assets of Piper Emerging Growth Fund were acquired by Mid Cap
Growth Fund effective August 7, 1998.
(2)Class B shares of Mid Cap Growth Fund have been offered since August 7, 1998.
(3)Effective April 28, 1998, all outstanding Class B shares of Piper Emerging
Growth Fund were exchanged for Class A shares of such fund and Class B share
activity was discontinued.
(4)Class B shares of Piper Emerging Growth Fund were offered beginning February
18, 1997.
(5)Annualized.
<TABLE>
<CAPTION>
Period ended
CLASS C SHARES September 30, 1999(1)
---------------------------------------------------------------------------------------------------------
<S> <C>
PER SHARE DATA
Net Asset Value, Beginning of Period $12.43
------
Investment Operations:
Net Investment Income (0.06)
Net Gains (Losses) on Investments
(both realized and unrealized) 0.43
------
Total From Investment Operations 0.37
------
Less Distributions:
Dividends (from Net Investment Income) --
------
Total Distributions --
------
Net Asset Value, End of Period $12.80
======
Total Return 3.06%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ 466
Ratio of Expenses to Average Net Assets 1.89%(2)
Ratio of Net Income to Average Net Assets 1.27%(2)
Ratios of Expenses to Average Net Assets (excluding waivers) 1.98%(2)
Ratio of Net Income to Average Net Assets (excluding waivers) 1.18%(2)
Portfolio Turnover Rate 94%
------------------------------------------------------------------------------------------------------
</TABLE>
(1)Class C shares have been offered since February 1, 1999.
(2)Annualized.
21 PROSPECTUS - First American Mid Cap Funds and Small Cap Funds
Class A, Class B, and Class C Shares
<PAGE>
Additional Information
FINANCIAL HIGHLIGHTS CONTINUED
MID CAP VALUE FUND
<TABLE>
<CAPTION>
Fiscal year ended September 30,
CLASS A SHARES 1999 1998 1997 1996 1995
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value, Beginning of Period $ 15.04 $ 24.19 $ 20.41 $ 17.89 $ 17.30
------- ------- ------- ------- -------
Investment Operations:
Net Investment Income 0.10 0.07 0.11 0.20 0.35
Net Gains (Losses) on Investments
(both realized and unrealized) 1.26 (6.41) 6.98 3.94 1.60
------- ------- ------- ------- -------
Total From Investment Operations 1.36 (6.34) 7.09 4.14 1.95
------- ------- ------- ------- -------
Less Distributions:
Dividends (from Net Investment Income) (0.10) (0.07) (0.11) (0.20) (0.34)
Distributions (from Capital Gains) (3.35) (2.74) (3.20) (1.42) (1.02)
------- ------- ------- ------- -------
Total Distributions (3.45) (2.81) (3.31) (1.62) (1.36)
------- ------- ------- ------- -------
Net Asset Value, End of Period $ 12.95 $ 15.04 $ 24.19 $ 20.41 $ 17.89
======= ======= ======= ======= =======
Total Return 8.03% (28.83)% 39.93% 25.23% 12.63%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $20,148 $29,261 $35,207 $17,987 $11,609
Ratio of Expenses to Average Net Assets 1.15% 1.14% 1.14% 1.13% 1.09%
Ratio of Net Income to Average Net Assets 0.63% 0.43% 0.58% 1.06% 2.08%
Ratio of Expenses to Average Net Assets (excluding waivers) 1.18% 1.14% 1.15% 1.13% 1.20%
Ratio of Net Income to Average Net Assets (excluding waivers) 0.60% 0.43% 0.57% 1.06% 1.97%
Portfolio Turnover Rate 121% 135% 82% 143% 72%
-----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Fiscal year ended September 30,
CLASS B SHARES 1999 1998 1997 1996 1995
-----------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Asset Value, Beginning of Period $ 14.80 $ 23.96 $ 20.31 $ 17.83 $ 17.29
------- ------- ------- ------- -------
Investment Operations:
Net Investment Income (Loss) 0.04 (0.01) 0.02 0.09 0.29
Net Gains (Losses) on Investments
(both realized and unrealized) 1.22 (6.41) 6.85 3.91 1.51
------- ------- ------- ------- -------
Total From Investment Operations 1.26 (6.42) 6.87 4.00 1.80
------- ------- ------- ------- -------
Less Distributions:
Dividends (from Net Investment Income) (0.04) -- (0.02) (0.10) (0.24)
Distributions (from Capital Gains) (3.35) (2.74) (3.20) (1.42) (1.02)
------- ------- ------- ------- -------
Total Distributions (3.39) (2.74) (3.22) (1.52) (1.26)
------- ------- ------- ------- -------
Net Asset Value, End of Period $ 12.67 $ 14.80 $ 23.96 $ 20.31 $ 17.83
======= ======= ======= ======= =======
Total Return 7.38% (29.40)% 38.81% 24.35% 11.64%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $19,072 $31,276 $36,649 $12,847 $ 4,847
Ratio of Expenses to Average Net Assets 1.90% 1.89% 1.90% 1.88% 1.88%
Ratio of Net Income (Loss) to Average Net Assets (0.13)% (0.31)% (0.18)% 0.25% 1.22%
Ratio of Expenses to Average Net Assets (excluding waivers) 1.93% 1.89% 1.90% 1.88% 1.95%
Ratio of Net Income (Loss) to Average Net Assets (excluding
waivers) (0.16)% (0.31)% (0.18)% 0.25% 1.15%
Portfolio Turnover Rate 121% 135% 82% 143% 72%
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>
22 PROSPECTUS - First American Mid Cap Funds and Small Cap Funds
Class A, Class B, and Class C Shares
<PAGE>
Additional Information
FINANCIAL HIGHLIGHTS CONTINUED
MID CAP VALUE FUND (CONTINUED)
<TABLE>
<CAPTION>
Period ended
September 30,
CLASS C SHARES 1999(1)
----------------------------------------------------------------------------------------------------
<S> <C>
PER SHARE DATA
Net Asset Value, Beginning of Period $13.69
------
Investment Operations:
Net Investment Income 0.06
Net Gains (Losses) on Investments
(both realized and unrealized) (0.78)
------
Total From Investment Operations (0.72)
------
Less Distributions:
Dividends (from Net Investment Income) (0.05)
------
Total Distributions (0.05)
------
Net Asset Value, End of Period $12.92
======
Total Return (5.25)%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ 164
Ratio of Expenses to Average Net Assets 1.90%(2)
Ratio of Net Income to Average Net Assets 0.29%(2)
Ratios of Expenses to Average Net Assets (excluding waivers) 1.93%(2)
Ratio of Net Income to Average Net Assets (excluding waivers) 0.26%(2)
Portfolio Turnover Rate 121%
----------------------------------------------------------------------------------------------------
</TABLE>
(1)Class C shares have been offered since February 1, 1999.
(2)Annualized.
23 PROSPECTUS - First American Mid Cap Funds and Small Cap Funds
Class A, Class B, and Class C Shares
<PAGE>
Additional Information
FINANCIAL HIGHLIGHTS CONTINUED
SMALL CAP GROWTH FUND
<TABLE>
<CAPTION>
Fiscal year ended September 30,
CLASS A SHARES(1) 1999 1998 1997(3) 1996(2) 1995
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value, Beginning of Period $ 11.90 $ 17.41 $ 17.11 $ 17.68 $ 15.61
------- ------- ------- ------- -------
Investment Operations:
Net Investment Income (Loss) (0.06) (0.09) (0.16) 0.06 0.09
Net Gains (Losses) on Investments
(both realized and unrealized) 4.95 (2.67) 5.66 0.87 2.07
------- ------- ------- ------- -------
Total From Investment Operations 4.89 (2.76) 5.50 0.93 2.16
------- ------- ------- ------- -------
Less Distributions:
Dividends (from Net Investment Income) -- -- (0.04) (0.07) (0.09)
Distributions (from Capital Gains) (0.02) (2.64) (5.16) (1.43) --
Tax Return of Capital -- (0.11) -- -- --
------- ------- ------- ------- -------
Total Distributions (0.02) (2.75) (5.20) (1.50) (0.09)
------- ------- ------- ------- -------
Net Asset Value, End of Period $ 16.77 $ 11.90 $ 17.41 $ 17.11 $ 17.68
======= ======= ======= ======= =======
Total Return 41.11% (18.66)% 45.66% 5.38% 13.88%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $32,203 $28,252 $35,647 $30,968 $48,421
Ratio of Expenses to Average Net Assets 1.14% 1.29% 1.34% 1.32% 1.40%
Ratio of Net Income (Loss) to Average Net Assets (0.39)% (0.61)% (0.75)% 0.20% 0.43%
Ratio of Expenses to Average Net Assets (excluding waivers) 1.15% 1.43% 1.98% 1.79% 1.63%
Ratio of Net Income (Loss) to Average Net Assets
(excluding waivers) (0.40)% (0.75)% (1.39)% (0.27)% 0.20%
Portfolio Turnover Rate 110% 92% 109% 125% 182%
----------------------------------------------------------------------------------------------------------------------------
</TABLE>
See footnotes under Small Cap Growth Fund Class B Shares.
24 PROSPECTUS - First American Mid Cap Funds and Small Cap Funds
Class A, Class B, and Class C Shares
<PAGE>
Additional Information
FINANCIAL HIGHLIGHTS CONTINUED
SMALL CAP GROWTH FUND (CONTINUED)
<TABLE>
<CAPTION>
Period from
Fiscal year Period from Period from February 18, 1997
ended July 31, 1998 to October 1, 1997 to to September 30,
CLASS B SHARES September 30, 1999 September 30, 1998(6) April 28, 1998(5) 1997(4)
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value, Beginning of Period $11.50 $13.74 $ 9.54 $ 7.24
------ ------ ------ ------
Investment Operations:
Net Investment Loss (0.14) (0.02) (0.09) (0.03)
Net Gains (Losses) on Investments
(both realized and unrealized) 4.73 (2.22) 0.42 2.33
------ ------ ------ ------
Total From Investment Operations 4.59 (2.24) 0.33 2.30
------ ------ ------ ------
Less Distributions:
Dividends (from Net Investment Income) -- -- -- --
Distributions (from Capital Gains) (0.02) -- (0.15) --
Tax Return of Capital -- -- (0.01) --
------ ------ ------ ------
Total Distributions (0.02) -- (0.16) --
------ ------ ------ ------
Net Asset Value, End of Period $16.07 $11.50 $ 9.71 $ 9.54
====== ====== ====== ======
Total Return 39.92% (16.30)% 3.61% 31.77%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $2,217 $1,104 $ -- $ 480
Ratio of Expenses to Average Net Assets 1.90% 1.90%(7) 2.03%(7) 1.98%(7)
Ratio of Net Loss to Average Net Assets (1.16)% (1.20)%(7) (1.30)%(7) (1.49)%(7)
Ratio of Expenses to Average Net Assets
(excluding waivers) 1.91% 1.90%(7) 2.40%(7) 2.15%(7)
Ratio of Net Loss to Average Net Assets
(excluding waivers) (1.17)% (1.20)%(7) (1.67)%(7) (1.66)%(7)
Portfolio Turnover Rate 110% 92% 56% 109%
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1)Per share amounts for Small Cap Growth Fund Class A have been adjusted to
reflect the conversion ratios utilized for the reorganization of Piper Small
Company Growth Fund and Small Cap Growth Fund that occurred on July 31, 1998.
Piper Small Company Growth Fund is the financial reporting survivor.
Therefore, the financial highlights for Small Cap Growth Fund include the
financial highlights of Piper Small Company Growth Fund prior to July 31,
1998.
(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)Per share amounts have been adjusted to reflect the effect of the stock
dividend declared on October 21, 1996.
(4)Class B shares of Piper Small Company Growth Fund were offered beginning
February 18, 1997.
(5)Effective April 28, 1998, all outstanding Class B shares of Piper Small
Company Growth Fund were exchanged for Class A shares of such fund and Class
B share activity was discontinued.
(6)Class B shares of Small Cap Growth Fund have been offered since July 31,
1998.
(7)Annualized.
25 PROSPECTUS - First American Mid Cap Funds and Small Cap Funds
Class A, Class B, and Class C Shares
<PAGE>
Additional Information
FINANCIAL HIGHLIGHTS CONTINUED
SMALL CAP GROWTH FUND (CONTINUED)
<TABLE>
<CAPTION>
Period ended
September 30,
CLASS C SHARES 1999(1)
--------------------------------------------------------------------------------------------
<S> <C>
PER SHARE DATA
Net Asset Value, Beginning of Period $15.48
------
Investment Operations:
Net Investment Income (0.08)
Net Gains (Losses) on Investments
(both realized and unrealized) 1.28
------
Total From Investment Operations 1.20
------
Less Distributions:
Dividends (from Net Investment Income) --
------
Total Distributions --
------
Net Asset Value, End of Period $16.68
======
Total Return 7.75%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ 309
Ratio of Expenses to Average Net Assets 1.90%(2)
Ratio of Net Loss to Average Net Assets (1.18)%(2)
Ratios of Expenses to Average Net Assets (excluding waivers) 1.91%(2)
Ratio of Net Loss to Average Net Assets (excluding waivers) (1.19)%(2)
Portfolio Turnover Rate 110%
--------------------------------------------------------------------------------------------
</TABLE>
(1)Class C shares have been offered since February 1, 1999.
(2)Annualized.
26 PROSPECTUS - First American Mid Cap Funds and Small Cap Funds
Class A, Class B, and Class C Shares
<PAGE>
Additional Information
FINANCIAL HIGHLIGHTS CONTINUED
SMALL CAP VALUE FUND
<TABLE>
<CAPTION>
Fiscal Year Ten months Four months
ended ended ended Fiscal year
September 30, September 30, November 30, ended July 31,
CLASS A SHARES(1) 1999 1998 1997 1997 1996 1995(4)
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value, Beginning of Period $ 13.58 $ 18.20 $ 17.86 $ 13.95 $ 13.23 $ 10.00
------- ------- ------- ------- ------- -------
Investment Operations:
Net Investment Income (Loss) 0.01 0.04 (0.03) 0.01 0.04 0.09
Net Gains (Losses) on Investments
(both realized and unrealized) 1.47 (3.38) 0.37 5.43 1.83 3.29
------- ------- ------- ------- ------- -------
Total From Investment Operations 1.48 (3.34) 0.34 5.44 1.87 3.38
------- ------- ------- ------- ------- -------
Less Distributions:
Dividends (from Net Investment Income) (0.01) (0.01) -- (0.01) (0.04) (0.10)
Distributions (from Capital Gains) (1.11) (1.27) -- (1.52) (1.11) (0.05)
------- ------- ------- ------- ------- -------
Total Distributions (1.12) (1.28) -- (1.53) (1.15) (0.15)
------- ------- ------- ------- ------- -------
Net Asset Value, End of Period $ 13.94 $ 13.58 $ 18.20 $ 17.86 $ 13.95 $ 13.23
======= ======= ======= ======= ======= =======
Total Return 11.12% (19.48)% 1.90% 41.71% 14.93% 34.29%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $11,567 $13,551 $19,194 $22,429 $10,247 $ 1,569
Ratio of Expenses to Average Net Assets 1.14% 1.13%(3) 1.37%(3) 1.31% 1.33% 1.11%(3)
Ratio of Net Income (Loss) to Average Net Assets (0.17)% 0.15%(3) (0.38)%(3) 0.01% 0.14% 0.63%(3)
Ratio of Expenses to Average Net Assets (excluding
waivers) 1.14% 1.13%(3) 1.37%(3) 1.31% 1.33% 1.38%(3)
Ratio of Net Income (Loss) to Average Net Assets
(excluding waivers) (0.17)% 0.15%(3) (0.38)%(3) 0.01% 0.14% 0.36%(3)
Portfolio Turnover Rate 44% 21% 3% 29% 34% 37%
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Fiscal Year Ended Ten months ended Period ended
September 30, September 30, November 30,
CLASS B SHARES 1999 1998 1997(2)
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PER SHARE DATA
Net Asset Value, Beginning of Period $13.53 $18.23 $18.22
------ ------ ------
Investment Operations:
Net Investment Income 0.02 0.01 --
Net Gains (Losses) on Investments
(both realized and unrealized) 1.33 (3.43) 0.01
------ ------ ------
Total From Investment Operations 1.35 (3.42) 0.01
------ ------ ------
Less Distributions:
Dividends (from Net Investment Income) -- (0.01) --
Distributions (from Capital Gains) (1.11) (1.27) --
------ ------ ------
Total Distributions (1.11) (1.28) --
------ ------ ------
Net Asset Value, End of Period $13.77 $13.53 $18.23
====== ====== ======
Total Return 10.16% (19.91)% 0.05%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $1,005 $ 618 $ 1
Ratio of Expenses to Average Net Assets 1.89% 1.88%(3) 1.90%(3)
Ratio of Net Loss to Average Net Assets (0.93)% (0.53)%(3) (1.53)%(3)
Ratio of Expenses to Average Net Assets (excluding waivers 1.89% 1.88%(3) 1.90%(3)
Ratio of Net Loss to Average Net Assets (excluding waivers) (0.93)% (0.53)%(3) (1.53)%(3)
Portfolio Turnover Rate 44% 21% 3%
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1)The financial highlights for Small Cap Value Fund include the historical
financial highlights of the Qualivest Small Companies Value Fund (Class A
shares). The assets of the Qualivest Small Companies Value Fund were acquired
by Small Cap Value Fund on November 21, 1997. In connection with such
acquisition, Class A and Class C shares of the Qualivest Small Companies
Value Fund were exchanged for Class A shares of Small Cap Value Fund.
(2)Class B shares have been offered since November 24, 1997.
(3)Annualized.
(4)Class A shares have been offered since August 1, 1994.
27 PROSPECTUS - First American Mid Cap Funds and Small Cap Funds
Class A, Class B, and Class C Shares
<PAGE>
Additional Information
FINANCIAL HIGHLIGHTS CONTINUED
SMALL CAP VALUE FUND (CONTINUED)
<TABLE>
<CAPTION>
Period ended
September 30,
CLASS C SHARES 1999(1)
-------------------------------------------------------------------------------------------
<S> <C>
PER SHARE DATA
Net Asset Value, Beginning of Period $13.48
------
Investment Operations:
Net Investment Income 0.01
Net Gains (Losses) on Investments
(both realized and unrealized) 0.38
------
Total From Investment Operations 0.39
------
Less Distributions:
Dividends (from Net Investment Income) --
------
Total Distributions --
------
Net Asset Value, End of Period $13.87
======
Total Return 2.89%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $ 116
Ratio of Expenses to Average Net Assets 1.89%(2)
Ratio of Net Loss to Average Net Assets (1.04)%(2)
Ratios of Expenses to Average Net Assets (excluding waivers) 1.89%(2)
Ratio of Net Loss to Average Net Assets (excluding waivers) (1.04)%(2)
Portfolio Turnover Rate 44%
-------------------------------------------------------------------------------------------
</TABLE>
(1)Class C Shares have been offered since February 1, 1999.
(2)Annualized.
28 PROSPECTUS - First American Mid Cap Funds and Small Cap Funds
Class A, Class B, and Class C Shares
<PAGE>
--------------------------------------------------------------------------------
FOR MORE INFORMATION
More information about the funds is available in the funds' Statement of
Additional Information and annual and semiannual reports.
--------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION (SAI)
The SAI provides more details about the funds and their policies. A current SAI
is on file with the Securities and Exchange Commission (SEC) and is incorporated
into this prospectus by reference (which means that it is legally considered
part of this prospectus).
--------------------------------------------------------------------------------
ANNUAL AND SEMIANNUAL REPORTS
Additional information about the funds' investments is available in the funds'
annual and semiannual reports to shareholders. In the funds' annual report, you
will find a discussion of the market conditions and investment strategies that
significantly affected the funds' performance during their last fiscal year.
You can obtain a free copy of the funds' SAI and/or free copies of the funds'
most recent annual or semiannual reports by calling Investor Services at
1-800-637-2548. The material you request will be sent by first-class mail or
other means designed to ensure equally prompt delivery, within three business
days of receipt of the request.
You can also obtain copies of this information, after paying a duplicating fee,
by electronic request at the following email address: [email protected], or by
writing the SEC's Public Reference Section, Washington, D.C. 20549-0102. For
more information, call 1-202-942-8090.
Information about the funds is also available on the Internet. Text-only
versions of fund documents can be viewed online or downloaded from the EDGAR
Database on the SEC's Internet site at http://www.sec.gov.
FIRST AMERICAN FUNDS P.O. Box 1330, Minneapolis, MN 55440-1330
First American Asset Management, a division of U.S. Bank National Association,
serves as the investment advisor to the First American Funds.
First American Funds are distributed by SEI Investments Distribution Co. which
is located in Oaks, PA 19456 and is not an affiliate of U.S. Bank.
1/2000 3017-99
SEC file number: 811-05309
FAIF2000R
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