[LOGO] FIRST AMERICAN FUNDS(R)
THE POWER OF DISCIPLINED INVESTING(R)
BOND
FUNDS
SEMIANNUAL REPORT
2000
FIRST AMERICAN
INVESTMENT FUNDS, INC.
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FIRST AMERICAN
FAMILY OF FUNDS
INVESTMENTS FOR EVERY GOAL
FIRST AMERICAN FUNDS OFFERS A FULL RANGE OF INVESTMENT STRATEGIES TO HELP YOU
CREATE A PERSONALIZED, DIVERSIFIED PORTFOLIO. WITH OUR DISCIPLINED FOCUS ON
CONSISTENT, COMPETITIVE PERFORMANCE AND HIGHLY DEVELOPED TEAM APPROACH TO
INVESTMENT DECISION MAKING, FIRST AMERICAN FUNDS CAN HELP BUILD A WINNING
STRATEGY FOR ANY INVESTOR.
HIGHER RISK (o)
AND RETURN POTENTIAL |
|
(*) EQUITY FUNDS
|
|
(*) FUNDS OF FUNDS
|
|
(*) BOND FUNDS
|
| Corporate Bond
| Fixed Income
| Intermediate Term Income
| Limited Term Income
| Strategic Income
|
(*)TAX FREE BOND FUNDS
|
|
(*)MONEY MARKET FUNDS
|
|
LOWER RISK (o)
AND RETURN POTENTIAL
TABLE OF CONTENTS
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Message to Shareholders 1
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Statements of Net Assets 2
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Statements of Operations 21
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Statements of Changes in Net Assets 22
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Financial Highlights 24
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Notes to Financial Statements 28
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Notice to Shareholders 36
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Tribute to David T. Bennett 37
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NOT FDIC INSURED NO BANK GUARANTEE MAY LOSE VALUE
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MESSAGE TO SHAREHOLDERS MARCH 31, 2000
DEAR SHAREHOLDERS:
On behalf of the Board of Directors of First American Funds, thank you for
the opportunity to manage your mutual fund investments. If you are a new
investor, we welcome you to the First American family of funds. If you are
a long-term investor, we are again proud to meet your ongoing investment
needs.
Whether you're new to investing or an experienced investor, the past six
months have been a period of rapidly changing markets and hand wringing.
The Dow Jones Industrial Average (the "Dow") moved steadily upward during
the fourth quarter of 1999, only to surrender its gains early in the first
quarter of this year due to concerns over rising interest rates. The Dow
regained momentum late in the first quarter after investors looked past
rate hikes to another period of strong corporate profits. During the same
period, the Nasdaq reached record heights only to suffer a dramatic
correction.
Within the bond market, a series of quarter-point interest rate hikes
pushed yields on the 30-year Treasury bond to nearly 7% in January. The
yield subsequently fell below the 6% barrier in mid-March for the first
time in six months. Recent events in bond markets also resulted in an
inverted yield curve, as some bonds with short maturities were yielding
more than bonds with the longest maturities. Yet with bond prices falling
amid rising rates, First American Funds' fixed income portfolio managers
see attractive buying opportunities in the marketplace.
We are pleased to introduce the new Corporate Bond Fund, which invests
primarily in investment grade debt securities. The fund has an average
credit quality of BBB and is best suited for investors who seek high
current income, yet with less risk than the typical "junk" bond portfolio.
The fund can also help meet the diversification needs of investors who may
be heavily weighted in equities. With the addition of the Corporate Bond
Fund, First American Funds now offers a complete spectrum of professionally
managed bond funds.
Within this report, you'll find financial statements on the First American
fixed income funds during the past six months, plus a complete list of fund
holdings. In addition, the Notice to Shareholders section contains
important shareholder information.
In closing, we encourage you to maintain a diversified portfolio and to
stay the course amid volatile markets. Although dramatic fluctuations are
becoming commonplace, investors may be able to better weather volatility
through balanced portfolios coupled with a disciplined investment approach.
Thank you for your confidence in First American Funds.
Sincerely,
/s/ Virginia L. Stringer /s/ Paul A. Dow
VIRGINIA L. STRINGER PAUL A. DOW
Chair Chief Investment Officer and President
First American Investment Funds, First American Asset Management
Inc.
FIRST AMERICAN FUNDS SEMIANNUAL REPORT 2000 1)
<PAGE>
STATEMENTS OF NET ASSETS MARCH 31, 2000 (UNAUDITED)
CORPORATE BOND FUND
DESCRIPTION PAR (000) VALUE (000)
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CORPORATE BONDS -- 77.0%
FINANCE -- 19.8%
Abbey National Capital Trust
8.963%, 12/29/49 $ 1,000 $ 1,018
Amerco
8.800%, 02/04/05 1,000 983
Conseco
8.750%, 02/09/04 1,000 991
Erac USA Finance
7.950%, 12/15/09 (A) 1,000 988
Everest Reinsurance Holdings
8.500%, 03/15/05 1,000 1,002
Paine Webber Group
7.625%, 12/01/09 1,000 984
Royal Bank of Scotland, Series 2,
Callable 03/31/05 @ 100
8.817%, 03/31/49 1,000 1,015
Socgen Real Estate, Callable 09/30/07 @ 100
7.640%, 12/29/49 (A) 1,000 931
Sovereign Bancorp
10.500%, 11/15/06 1,000 1,020
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8,932
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MANUFACTURING -- 22.9%
AK Steel, Callable 12/15/01 @ 104.56
9.125%, 12/15/06 1,000 978
D.R. Horton
8.375%, 06/15/04 1,000 908
Equistar Chemicals
8.500%, 02/15/04 1,000 981
Ford Motor Credit
7.500%, 03/15/05 1,000 997
Lear, Series B
8.110%, 05/15/09 1,000 913
Meritor Automotive
6.800%, 02/15/09 1,000 844
Newport News Shipbuilding,
Callable 12/01/01 @ 104.31
8.625%, 12/01/06 1,000 978
Owens Illinois
7.850%, 05/15/04 1,000 961
Precision Castparts
8.750%, 03/15/05 (A) 1,000 1,004
Thermo Instrument Systems
4.000%, 01/15/05 1,000 870
Tyco International Group
6.125%, 01/15/09 1,000 909
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10,343
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REAL ESTATE -- 4.1%
Eop Operating
6.763%, 06/15/07 1,000 929
Susa Partnership
7.000%, 12/01/07 1,000 921
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1,850
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SERVICES -- 14.9%
British Sky Broadcasting
8.200%, 07/15/09 1,000 985
CORPORATE BOND FUND (CONTINUED)
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
Dillards
6.625%, 11/15/08 $ 1,000 $ 845
Kmart
8.375%, 12/01/04 1,000 980
Kroger
8.050%, 02/01/10 1,000 1,014
Park Place
7.875%, 12/15/05 1,000 930
Time Warner
8.375%, 03/15/23 1,000 1,032
Tricon Global
7.650%, 05/15/08 1,000 958
-----------
6,744
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TRANSPORTATION -- 6.7%
Continental Airlines
7.918%, 05/01/10 1,000 1,018
Qantus Airways
7.750%, 06/15/09 (A) 1,000 996
Stagecoach Holdings
8.625%, 11/15/09 1,000 1,013
-----------
3,027
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UTILITIES -- 8.6%
Limestone Electron Trust
8.625%, 03/15/03 1,000 1,005
NRG Northeast Generating
8.842%, 06/15/15 (A) 1,000 1,034
US West Capital Funding
6.500%, 11/15/18 1,000 862
Vodafone Airtouch
7.875%, 02/15/30 (A) 1,000 1,004
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3,905
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TOTAL CORPORATE BONDS
(Cost $34,659) 34,801
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ASSET-BACKED SECURITIES -- 8.6%
COMMERCIAL -- 2.0%
GMAC Commercial Mortgage Securities
Series 1991-C1 Class-A2
6.175%, 05/15/33 1,000 911
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MANUFACTURING -- 2.3%
Green Tree Financial Series 1996-8 Class-A7
8.050%, 10/15/27 1,000 1,032
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OTHER -- 4.3%
Aircraft Finance Trust Series 1999 Class-1A-C
8.000%, 05/15/24 (A) 1,000 929
Juniper Series 00-1 Class-A3
8.220%, 04/15/12 1,000 1,023
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1,952
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TOTAL ASSET-BACKED SECURITIES
(Cost $3,823) 3,895
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The accompanying notes are an integral part of the financial statements.
(2 FIRST AMERICAN FUNDS SEMIANNUAL REPORT 2000
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CORPORATE BOND FUND (CONTINUED)
DESCRIPTION PAR (000)/SHARES VALUE (000)
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U.S. AGENCY MORTGAGE-BACKED SECURITIES -- 4.3%
FNMA Pool #515959
7.500%, 11/01/29 $ 1,998 $ 1,963
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TOTAL U.S. AGENCY MORTGAGE-BACKED SECURITIES
(Cost $1,955) 1,963
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PRIVATE MORTGAGE-BACKED SECURITIES -- 3.1%
FIXED RATE -- 3.1%
Countrywide Funding Series 1993-8 Class-A
7.000%, 12/25/23 1,443 1,381
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TOTAL PRIVATE MORTGAGE-BACKED SECURITIES
(Cost $1,389) 1,381
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COMMERCIAL PAPER -- 2.2%
Merrill Lynch
5.850%, 04/04/00 1,000 1,000
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TOTAL COMMERCIAL PAPER
(Cost $999) 1,000
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RELATED PARTY MONEY MARKET FUND -- 4.7%
First American Prime Obligations Fund (B) 2,110,098 2,110
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TOTAL RELATED PARTY MONEY MARKET FUND
(Cost $2,110) 2,110
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TOTAL INVESTMENTS -- 99.9%
(Cost $44,935) 45,150
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OTHER ASSETS AND LIABILITIES, NET -- 0.1% (C) 62
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NET ASSETS:
Portfolio Capital--Class A ($0.0001 par value--
2 billion authorized) based on
62,089 outstanding shares 623
Portfolio Capital--Class B ($0.0001 par value--
2 billion authorized) based on
619 outstanding shares 6
Portfolio Capital--Class C ($0.0001 par value--
2 billion authorized) based on
3,981 outstanding shares 40
Portfolio Capital--Class Y ($0.0001 par value--
2 billion authorized) based on
4,430,763 outstanding shares 44,318
Distributions in excess of net investment income (39)
Accumulated net realized gain on investments 49
Net unrealized appreciation of investments 215
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TOTAL NET ASSETS -- 100.0% $ 45,212
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CORPORATE BOND FUND (CONCLUDED)
DESCRIPTION VALUE
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Net asset value and redemption price per share -- Class A $ 10.05
Maximum sales charge of 4.25% (D) 0.45
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Offering price per share -- Class A $ 10.50
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Net asset value and offering price per share -- Class B (E) $ 10.06
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Net asset value price per share -- Class C (F) $ 10.05
Maximum sales charge of 1.00% (G) 0.10
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Offering price per share -- Class C $ 10.15
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Net asset value, offering price, and redemption
price per share -- Class Y $ 10.05
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(A) Security sold within the terms of a private placement memorandum, exempt
from registration under section 144A of the Securities Act of 1933, as
amended, and may be sold only to dealers in that program or other "qualified
institutional investors". These securities have been determined to be liquid
under guidelines established by the Board of Directors.
(B) This money market fund is advised by U.S. Bank National Association who also
serves as Advisor for this Fund. See also the notes to the financial
statements.
(C) Other assets and liabilities representing greater than five percent of the
total net assets include the following amounts (000):
Cash collateral received for securities on loan $2,034
Payable upon receipt of securities on loan ($2,034)
(D) The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 4.25%.
(E) Class B has a contingent deferred sales charge. For a description of a
possible redemption charge, see the notes to the financial statements.
(F) Class C has a contingent deferred sales charge. For a description of a
possible redemption charge, see the notes to the financial statements.
(G) The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 1.00%.
FNMA--Federal National Mortgage Association
FIRST AMERICAN FUNDS SEMIANNUAL REPORT 2000 3)
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STATEMENTS OF NET ASSETS MARCH 31, 2000 (UNAUDITED)
FIXED INCOME FUND
DESCRIPTION PAR (000) VALUE (000)
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CORPORATE BONDS -- 37.4%
CONSUMER GOODS -- 0.2%
Coca-Cola Enterprises
6.700%, 10/15/36 $ 3,500 $ 3,450
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ENERGY -- 4.0%
Conoco
6.950%, 04/15/29 15,000 13,725
Consolidated Natural Gas
7.250%, 10/01/04 20,000 19,750
Dynegy
6.875%, 07/15/02 20,000 19,550
Enron
7.125%, 05/15/07 2,750 2,675
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55,700
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FINANCE -- 17.8%
ABN AMRO
7.550%, 06/28/06 20,000 19,765
Associates
5.800%, 04/20/04 25,000 23,531
Bank America National Trust & Savings
8.375%, 05/01/07 62 62
Bear Stearns
6.150%, 03/02/04 25,250 23,956
Chase Manhattan
5.750%, 04/15/04 25,775 24,349
Cigna
7.400%, 01/15/03 10,726 10,555
General Electric Capital
6.650%, 09/03/02 30,000 29,700
Goldman Sachs
6.650%, 05/15/09 15,000 13,856
Household Finance
7.200%, 07/15/06 25,000 24,406
Money Store
7.300%, 12/01/02 41,795 41,614
Newcourt Credit
6.875%, 02/16/05 (A) 20,000 19,150
Norwest
6.550%, 12/01/06 17,000 16,110
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247,054
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MANUFACTURING -- 10.2%
Boeing
7.250%, 06/15/25 20,000 18,904
Ford Motor Credit
7.750%, 03/15/05 20,000 20,125
5.800%, 01/12/09 10,000 8,817
General Motors Acceptance
6.150%, 04/05/07 34,200 31,584
Honeywell
7.000%, 03/15/07 15,000 14,775
International Business Machines
7.250%, 11/01/02 10,000 10,025
FIXED INCOME FUND (CONTINUED)
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
PPG Industries
7.400%, 08/15/19 $ 18,000 $ 17,644
Xerox Cap Europe
5.750%, 05/15/02 20,000 19,305
-----------
141,179
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SERVICES -- 1.5%
Hertz
6.250%, 03/15/09 23,000 20,766
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TRANSPORTATION -- 0.8%
Conrail
6.760%, 05/25/15 850 809
Continental Airlines
7.056%, 09/15/09 10,000 9,706
-----------
10,515
-----------
UTILITIES -- 2.2%
Alltel
6.750%, 09/15/05 10,000 9,739
AT&T
5.625%, 03/15/04 20,000 18,895
British Telecommunications
6.080%, 09/06/00 1,500 1,460
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30,094
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OTHER -- 0.7%
Quebec Province Yankee
7.000%, 01/30/07 10,000 9,821
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TOTAL CORPORATE BONDS
(Cost $539,135) 518,579
-----------
U.S. AGENCY MORTGAGE-BACKED SECURITIES -- 23.6%
FIXED RATE -- 22.1%
FHLMC Series 51 Class-VA
7.000%, 04/17/06 10,199 10,067
FHLMC Series 163 Class-F
6.000%, 07/15/21 3,037 2,911
FHLMC Series 1638 Class-E
6.250%, 04/15/23 5,000 4,824
FHLMC Series 1643 Class-PK
6.500%, 12/15/23 5,439 5,177
FHLMC Series 1648 Class-LA
6.000%, 05/15/23 4,695 4,005
FHLMC Series 1699 Class-TD
6.000%, 03/15/24 10,000 8,870
FHLMC Series 1723 Class-PJ
7.000%, 02/15/24 7,133 7,001
FHLMC Series 2115 Class-BJ
6.000%, 03/15/28 5,020 4,306
FHLMC Pool #A00894
9.500%, 06/01/21 1,757 1,832
FHLMC Pool #A01608
10.000%, 12/01/19 1,786 1,911
The accompanying notes are an integral part of the financial statements.
(4 FIRST AMERICAN FUNDS SEMIANNUAL REPORT 2000
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FIXED INCOME FUND (CONTINUED)
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
FHLMC Pool #C00029
9.000%, 03/01/21 $ 713 $ 738
FHLMC Pool #C80433
6.500%, 08/01/26 3,130 2,949
FHLMC Pool #D65198
6.500%, 11/01/25 1,568 1,479
FHLMC Pool #D66778
6.500%, 01/01/26 1,741 1,642
FHLMC Pool #D70119
6.500%, 04/01/26 1,726 1,626
FHLMC Pool #D70722
6.500%, 04/01/26 2,009 1,895
FHLMC Pool #D70890
6.500%, 04/01/26 5,291 4,990
FHLMC Pool #D71415
6.500%, 05/01/26 3,526 3,325
FHLMC Pool #E20194
7.000%, 09/01/10 5,239 5,149
FHLMC Pool #E59943
7.500%, 11/01/09 393 393
FHLMC Pool #E61199
7.000%, 09/01/10 793 780
FHLMC Pool #E61265
7.000%, 09/01/10 2,554 2,507
FHLMC Pool #G10268
7.500%, 10/01/09 907 907
FHLMC Pool #G10308
7.500%, 12/01/09 1,215 1,214
FHLMC Pool #l90187
6.000%, 10/01/00 15 15
FNMA (TBA)
7.500%, 03/01/30 (B) 24,000 23,587
FNMA Series 1992 Class-169-J
6.500%, 03/25/21 6,311 6,218
FNMA Series 1996 Class-23
6.500%, 07/25/26 4,250 3,919
FNMA Series 1996 Class-53-PG
6.500%, 12/18/11 3,000 2,841
FNMA Series 1997 Class-1A-B
6.500%, 02/18/04 5,716 5,517
FNMA Series 1998 Class-M1-A2
6.250%, 01/25/08 7,500 7,070
FNMA Series 1999 Class-1-PG
6.500%, 04/25/28 15,343 14,459
FNMA Pool #100042
11.000%, 10/15/20 575 626
FNMA Pool #124654
7.000%, 12/01/07 2,871 2,831
FNMA Pool #125224
6.500%, 08/01/23 5,220 4,941
FNMA Pool #198657
7.000%, 01/01/08 380 375
FNMA Pool #250055
7.000%, 05/01/09 1,238 1,221
FNMA Pool #250113
9.000%, 07/01/24 278 288
FNMA Pool #250359
7.000%, 10/01/25 3,253 3,131
FNMA Pool #250551
7.000%, 05/01/26 8,549 8,239
FIXED INCOME FUND (CONTINUED)
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
FNMA Pool #252570
6.500%, 07/01/29 $ 16,906 $ 15,865
FNMA Pool #290144
7.000%, 07/01/09 31 31
FNMA Pool #303483
6.500%, 08/01/02 15 15
FNMA Pool #303675
10.000%, 10/01/17 280 301
FNMA Pool #323715
6.000%, 05/01/29 19,557 17,797
FNMA Pool #326129
6.500%, 09/01/25 2,737 2,579
FNMA Pool #328160
6.500%, 12/01/25 60 56
FNMA Pool #340798
7.000%, 04/01/26 9,090 8,760
FNMA Pool #353997
6.500%, 07/01/26 3,490 3,289
FNMA Pool #397381
7.500%, 08/01/17 67 67
FNMA Pool #440780
5.500%, 02/01/14 28,017 25,833
FNMA Pool #456276
6.000%, 12/01/28 13,746 12,528
FNMA Pool #493235
6.000%, 04/01/29 19,850 18,075
FNMA Pool #496026
6.000%, 01/01/29 16,208 14,775
GNMA Pool #8259
6.750%, 08/20/23 23 23
GNMA Pool #036899
10.000%, 01/15/10 553 585
GNMA Pool #405482
9.000%, 08/15/25 875 907
GNMA Pool #488997
7.000%, 04/15/29 3,653 3,540
GNMA Pool #497638
6.000%, 02/15/29 28 26
GNMA Pool #506455
7.000%, 04/15/29 4,463 4,325
GNMA Pool #506480
7.000%, 04/15/29 5,789 5,610
GNMA Pool #506639
7.000%, 04/15/29 4,948 4,794
GNMA Pool #780398
9.000%, 04/15/21 36 38
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305,595
-----------
Z-BONDS (C) -- 1.5%
FHLMC Series 1665 Class-KZ
6.500%, 01/15/24 8,628 7,811
FHLMC Series 1677 Class-Z
7.625%, 07/15/23 4,728 4,516
FNMA Series 1993 Class-160-ZA
6.776%, 09/25/23 1,074 992
6.826%, 09/25/23 20 18
FNMA Series 1996 Class-35-Z
7.701%, 07/25/26 7,750 7,148
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20,485
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TOTAL U.S. AGENCY MORTGAGE-BACKED SECURITIES
(Cost $333,984) 326,080
-----------
FIRST AMERICAN FUNDS SEMIANNUAL REPORT 2000 5)
<PAGE>
STATEMENTS OF NET ASSETS MARCH 31, 2000 (UNAUDITED)
FIXED INCOME FUND (CONTINUED)
DESCRIPTION PAR (000) VALUE (000)
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U.S. GOVERNMENT & AGENCY SECURITIES -- 26.7%
U.S. AGENCY DEBENTURES -- 10.4%
FHLB
6.090%, 06/02/06 $ 20,000 $ 18,988
6.375%, 08/15/06 11,500 11,075
FHLMC
5.000%, 02/15/01 50,000 49,312
6.250%, 10/15/02 35,000 34,361
5.950%, 01/19/06 30,000 28,369
5.750%, 04/15/08 2,000 1,824
-----------
143,929
-----------
U.S. TREASURIES -- 16.3%
U.S. Treasury Bonds
7.875%, 02/15/21 25,000 29,927
7.125%, 02/15/23 50,000 55,926
6.875%, 08/15/25 40,000 43,950
U.S. Treasury Note
6.500%, 10/15/06 65,000 65,575
U.S. Treasury Note (TIPS)
3.875%, 04/15/29 30,784 30,525
-----------
225,903
-----------
TOTAL U.S. GOVERNMENT & AGENCY SECURITIES
(Cost $375,462) 369,832
-----------
ASSET-BACKED SECURITIES -- 2.6%
CREDIT CARDS -- 1.4%
Sears Credit Account Master Trust
Series 1992-2 Class-A
6.350%, 02/15/07 20,000 19,661
-----------
MANUFACTURED HOMES -- 1.2%
Green Tree Financial
6.600%, 01/15/19 16,863 16,771
-----------
TOTAL ASSET-BACKED SECURITIES
(Cost $36,740) 36,432
-----------
PRIVATE MORTGAGE-BACKED SECURITIES -- 7.5%
ADJUSTABLE RATE -- 0.4%
Prudential Home Mortgage Securities
Series 1994 Class-28-M
6.743%, 09/25/01 5,578 5,508
-----------
FIXED RATE -- 6.2%
Asset Securitization Series 1996-MD6 Class-A1B
6.880%, 11/13/26 18,600 18,242
Countrywide Mortgage-Backed Securities
Series 1994 Class-GA3
6.500%, 04/25/24 2,380 2,357
Drexel Burnham Lambert Trust S-2
9.000%, 08/01/18 202 200
First Nationwide Mortgage Corporation
6.000%, 09/01/28 13,860 12,632
General Electric Capital Mortgage
Series 1994 Class-17-A6
7.000%, 05/25/24 7,000 6,861
FIXED INCOME FUND (CONTINUED)
DESCRIPTION PAR (000)/SHARES VALUE (000)
- --------------------------------------------------------------------------------
General Electric Capital Mortgage
Series 1994 Class-17-A7
7.000%, 05/25/24 $ 5,179 $ 5,001
J.P. Morgan Commercial Mortgage Finance
Series 1995 Class-C1-B
7.643%, 07/25/10 (D) 10,329 10,288
Merrill Lynch Mortgage Investors
Series 1993 Class-A4-C
6.875%, 03/15/18 (D) 6,000 6,106
Merrill Lynch Mortgage
Series 1995 Class-C3-A3
7.072%, 12/26/25 (D) 10,335 10,099
Morgan Stanley Capital Investments,
Series 1999 Class-A1
6.120%, 03/15/31 11,494 10,877
Nomura Asset Securities
Series 1996 Class-MD5-A1B
7.120%, 04/13/36 3,400 3,318
-----------
85,981
-----------
Z-BONDS (C) -- 0.9%
Vendee Mortgage Trust Series 1996 Class-1Z
6.759%, 02/15/26 13,746 12,558
-----------
TOTAL PRIVATE MORTGAGE-BACKED SECURITIES
(Cost $103,585) 104,047
-----------
RELATED PARTY MONEY MARKET FUND -- 2.9%
First American Prime Obligations Fund (E) 39,868,730 39,869
-----------
TOTAL RELATED PARTY MONEY MARKET FUND
(Cost $39,869) 39,869
-----------
TOTAL INVESTMENTS -- 100.7%
(Cost $1,428,775) 1,394,839
-----------
OTHER ASSETS AND LIABILITIES, NET -- (0.7%) (F) (9,271)
-----------
NET ASSETS:
Portfolio Capital--Class A ($0.0001 par value--
2 billion authorized) based on
11,148,644 outstanding shares 209,762
Portfolio Capital--Class B ($0.0001 par value--
2 billion authorized) based on
1,194,041 outstanding shares 13,186
Portfolio Capital--Class C ($0.0001 par value--
2 billion authorized) based on
38,447 outstanding shares 431
Portfolio Capital--Class Y ($0.0001 par value--
2 billion authorized) based on
119,110,084 outstanding shares 1,295,110
Undistributed net investment income 235
Accumulated net realized loss on investments (99,220)
Net unrealized depreciation of investments (33,936)
-----------
TOTAL NET ASSETS -- 100.0% $1,385,568
-----------
The accompanying notes are an integral part of the financial statements.
(6 FIRST AMERICAN FUNDS SEMIANNUAL REPORT 2000
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FIXED INCOME FUND (CONCLUDED)
DESCRIPTION VALUE
- --------------------------------------------------------------------------------
Net asset value and redemption price per share -- Class A $ 10.54
Maximum sales charge of 4.25% (G) 0.47
-----------
Offering price per share -- Class A $ 11.01
-----------
Net asset value and offering price per share -- Class B (H) $ 10.47
-----------
Net asset value price per share -- Class C (I) $ 10.53
Maximum sales charge of 1.00% (J) 0.11
-----------
Offering price per share -- Class C $ 10.64
-----------
Net asset value, offering price, and redemption
price per share -- Class Y $ 10.54
-----------
(A) Security sold within the terms of a private placement memorandum, exempt
from registration under section 144A of the Securities Act of 1933, as
amended, and may be sold only to dealers in that program or other "qualified
institutional investors". These securities have been determined to be liquid
under guidelines established by the Board of Directors.
(B) On March 31, 2000, the total cost of investments purchased on a when-issued
basis was $23,594,062.
(C) Z-Bond--Represents securities that pay no interest or principal during their
initial accrual periods, but accrue additional principal at specified rates.
Interest rate disclosed represents current yield based upon the cost basis
and estimate of future cash flows.
(D) Variable Rate Security--the rate reported on the Statement of Net Assets is
the rate in effect as of March 31, 2000.
(E) This money market fund is advised by U.S. Bank National Association who also
serves as Advisor for this Fund. See also the notes to the financial
statements.
(F) Other assets and liabilities representing greater than five percent of total
net assets include the following (000):
Cash collateral received for securities lending $604,469
Payable upon return of securities on loan ($604,469)
(G) The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 4.25%.
(H) Class B has a contingent deferred sales charge. For a description of a
possible redemption charge, see the notes to the financial statements.
(I) Class C has a contingent deferred sales charge. For a description of a
possible redemption charge, see the notes to the financial statements.
(J) The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 1.00%.
FHLB--Federal Home Loan Bank
FHLMC--Federal Home Loan Mortgage Corporation
FNMA--Federal National Mortgage Association
GNMA--Government National Mortgage Association
TBA--To Be Announced
TIPS--Treasury Inflation Protection Security
INTERMEDIATE TERM INCOME FUND
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
CORPORATE BONDS -- 36.2%
CONSUMER GOODS -- 1.5%
Coca-Cola Enterprises
6.700%, 10/15/36 $ 2,000 $ 1,971
Dayton Hudson
5.875%, 11/01/08 5,000 4,526
-----------
6,497
-----------
ENERGY -- 2.4%
Conoco
5.900%, 04/15/04 6,500 6,196
Dynegy
6.875%, 07/15/02 5,000 4,887
-----------
11,083
-----------
FINANCE -- 18.5%
ABN AMRO
7.550%, 06/28/06 5,000 4,941
Associates
5.800%, 04/20/04 5,000 4,706
Bear Stearns
6.875%, 10/01/05 10,000 9,614
Chase Manhattan
5.750%, 04/15/04 10,000 9,447
Cigna
7.400%, 01/15/03 3,075 3,026
First Chicago
7.625%, 01/15/03 5,000 5,019
Household Finance
7.000%, 08/01/03 10,000 9,841
Lehman Brothers Holdings, Mandatory Put @ 100
7.500%, 08/01/26 (A) 5,000 4,971
Metropolitan Life Insurance
6.300%, 11/01/03 (B) 15,145 14,472
Morgan Stanley Group
8.100%, 06/24/02 1,500 1,526
Newcourt Credit
6.875%, 02/16/05 (B) 10,000 9,575
Safeco
7.875%, 04/01/05 1,000 991
Salomon Smith Barney Holdings
7.000%, 03/15/04 2,000 1,980
Sprint Capital
5.700%, 11/15/03 5,000 4,738
-----------
84,847
-----------
MANUFACTURING -- 7.7%
Ford Motor Credit
7.000%, 09/25/01 2,000 1,996
General Motors Acceptance
6.150%, 04/05/07 10,000 9,235
Honeywell
7.000%, 03/15/07 5,000 4,925
McDonnell Douglas
6.875%, 11/01/06 10,000 9,687
FIRST AMERICAN FUNDS SEMIANNUAL REPORT 2000 7)
<PAGE>
STATEMENTS OF NET ASSETS MARCH 31, 2000 (UNAUDITED)
INTERMEDIATE TERM INCOME FUND (CONTINUED)
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
Xerox Cap Europe
5.750%, 05/15/02 $ 10,000 $ 9,653
-----------
33,500
-----------
SERVICES -- 4.8%
Electronic Data Systems
7.125%, 10/15/09 10,000 10,025
Hertz
6.300%, 11/15/06 2,000 1,935
Vodafone Airtouch
7.625%, 02/15/05 (B) 10,000 10,091
-----------
24,047
-----------
TRANSPORTATION -- 0.7%
Continental Airlines
7.056%, 09/15/09 3,500 3,397
-----------
OTHER -- 0.6%
Hydro-Quebec
9.400%, 02/01/21 2,369 2,779
-----------
TOTAL CORPORATE BONDS
(Cost $170,254) 166,150
-----------
U.S. GOVERNMENT & AGENCY SECURITIES -- 40.0%
U.S. AGENCY DEBENTURES -- 24.4%
FFCB
6.100%, 11/04/04 6,350 6,094
FHLB
5.620%, 01/12/01 5,000 4,957
5.125%, 04/17/01 5,000 4,922
5.875%, 08/15/01 5,000 4,927
5.995%, 11/21/01 5,000 4,926
5.785%, 03/17/03 7,950 7,688
5.125%, 09/15/03 5,000 4,708
6.250%, 08/13/04 7,500 7,266
6.030%, 12/23/04 2,500 2,390
6.060%, 05/24/06 5,000 4,731
6.090%, 06/02/06 5,000 4,747
6.375%, 08/15/06 6,000 5,778
5.540%, 01/08/09 4,500 4,000
FHLMC
5.000%, 02/15/01 20,000 19,725
5.950%, 01/19/06 11,000 10,402
TVA
6.000%, 11/01/00 5,000 4,984
6.000%, 09/24/02 5,000 4,879
6.375%, 06/15/05 5,000 4,856
-----------
111,980
-----------
U.S. TREASURIES -- 15.6%
U.S. Treasury Bond
11.625%, 11/15/02 5,000 5,598
U.S. Treasury Notes
7.875%, 08/15/01 6,000 6,106
7.500%, 11/15/01 7,500 7,611
7.250%, 05/15/04 5,000 5,154
INTERMEDIATE TERM INCOME FUND (CONTINUED)
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
7.000%, 07/15/06 $ 8,000 $ 8,270
6.500%, 10/15/06 11,000 11,097
6.125%, 08/15/07 25,000 24,762
5.625%, 05/15/08 3,000 2,884
-----------
71,482
-----------
TOTAL U.S. GOVERNMENT & AGENCY SECURITIES
(Cost $187,780) 183,462
-----------
ASSET-BACKED SECURITIES -- 9.8%
CREDIT CARDS -- 2.0%
Circuit City Credit Card Master Trust
Series 1995-1 Class-A
6.375%, 08/15/05 7,170 7,150
Citibank Credit Card Master Trust
Series 1997-7 Class-A
6.350%, 08/15/02 2,000 2,000
-----------
9,150
-----------
HOME EQUITY -- 7.8%
American Southwest Financial Securities
Series 1995-C1 Class-A1B
7.400%, 11/17/04 8,272 8,271
Asset Securitization Series 1996-MD6 Class-A1B
6.880%, 11/13/26 7,500 7,356
Equicredit Home Equity Loan Trust
Series 1994-2 Class-A2
7.350%, 06/15/14 505 506
Merrill Lynch Mortgage Series 1995 Class C3-A3
7.072%, 12/26/25 (C) 11,000 10,749
New Century Home Equity Loan Trust
Series1997-NC6 Class-A3
6.590%, 12/25/19 9,200 9,134
-----------
36,016
-----------
TOTAL ASSET-BACKED SECURITIES
(Cost $46,245) 45,166
-----------
U.S. AGENCY MORTGAGE-BACKED SECURITIES -- 8.4%
FIXED RATE -- 8.4%
FHLMC
6.500%, 03/15/26 8,508 8,131
FHLMC Pool #E20194
7.000%, 09/01/10 1,110 1,091
FHLMC Series 1606 Class-H
6.000%, 11/15/08 5,085 4,867
FHLMC Series 1659 Class-TN
5.500%, 01/15/01 372 369
FHLMC Series 1902 Class-C
7.000%, 05/15/03 1,805 1,801
FNMA Pool #050145
10.000%, 11/01/18 882 946
FNMA Pool #050776
6.000%, 08/01/08 984 938
FNMA Pool #250387
7.000%, 11/01/10 1,098 1,080
FNMA Pool #303357
7.000%, 06/01/10 297 293
The accompanying notes are an integral part of the financial statements.
(8 FIRST AMERICAN FUNDS SEMIANNUAL REPORT 2000
<PAGE>
INTERMEDIATE TERM INCOME FUND (CONTINUED)
DESCRIPTION PAR (000)/SHARES VALUE (000)
- --------------------------------------------------------------------------------
FNMA Pool #303753
9.000%, 12/01/20 $ 936 $ 953
FNMA Pool #323715
6.000%, 05/01/29 889 4,449
FNMA Pool #341727
9.500%, 06/01/21 927 973
FNMA Pool #440780
5.500%, 02/01/14 8,183 7,545
FNMA Series 1993-55 Class-J
6.500%, 11/25/07 1,000 978
FNMA Series 1996-57 Class-E
7.000%, 06/25/03 1,615 1,608
GNMA Pool #002007
9.000%, 05/20/25 435 447
GNMA Pool #002038
8.500%, 07/20/25 768 784
GNMA Pool #312046
9.000%, 08/15/21 1,292 1,344
GNMA Pool #497638
6.000%, 02/15/29 7 6
-----------
38,603
-----------
TOTAL U.S. AGENCY MORTGAGE-BACKED SECURITIES
(Cost $39,285) 38,603
-----------
PRIVATE MORTGAGE-BACKED SECURITIES -- 3.4%
ADJUSTABLE RATE -- 2.2%
Prudential Home Mortgage Securities
Series 1994 Class-28-M
6.743%, 09/25/01 (C) 2,124 2,097
Prudential Home Mortgage Securities
Series 1994-7 Class-A1
6.500%, 03/25/09 (C) 8,400 8,117
-----------
10,214
-----------
FIXED RATE -- 1.2%
Drexel Burnham Lambert CMO Trust S-2
9.000%, 08/01/18 23 23
Morgan Stanley Capital Investments
Series 1999 Class-A1
6.120%, 03/15/31 5,630 5,327
-----------
5,350
-----------
TOTAL PRIVATE MORTGAGE-BACKED SECURITIES
(Cost $15,588) 15,564
-----------
RELATED PARTY MONEY MARKET FUND -- 0.4%
First American Prime Obligations Fund (D) 1,819,963 1,820
-----------
TOTAL RELATED PARTY MONEY MARKET FUND
(Cost $1,820) 1,820
-----------
TOTAL INVESTMENTS -- 98.2%
(Cost $460,972) 450,765
-----------
OTHER ASSETS AND LIABILITIES, NET -- 1.8% (E) 8,422
-----------
INTERMEDIATE TERM INCOME FUND (CONCLUDED)
DESCRIPTION VALUE (000)
- --------------------------------------------------------------------------------
NET ASSETS:
Portfolio Capital--Class A ($0.0001 par value--
2 billion authorized) based on
3,467,554 outstanding shares $ 48,631
Portfolio Capital--Class Y ($0.0001 par value--
2 billion authorized) based on
44,184,498 outstanding shares 436,590
Undistributed net investment income 500
Accumulated net realized loss on investments (16,327)
Net unrealized depreciation of investments (10,207)
-----------
TOTAL NET ASSETS -- 100.0% $ 459,187
-----------
Net asset value and redemption price per share -- Class A $ 9.66
Maximum sales charge of 2.50% (F) 0.25
-----------
Offering price per share -- Class A $ 9.91
-----------
Net asset value, offering price, and redemption
price per share -- Class Y $ 9.63
-----------
(A) Mandatory Put Security--the mandatory put date is shown as the maturity on
the Statement of Net Assets.
(B) Security sold within the terms of a private placement memorandum, exempt
from registration under section 144A of the Securities Act of 1933, as
amended, and may be sold only to dealers in that program or other "qualified
institutional investors". These securities have been determined to be liquid
under guidelines established by the Board of Directors.
(C) Variable Rate Security--the rate reported on the Statement of Net Assets is
the rate in effect as of March 31, 2000.
(D) This money market fund is advised by U.S. Bank National Association who also
serves as Advisor for this Fund. See also the notes to the financial
statements.
(E) Other assets and liabilities representing greater than five percent of the
total net assets include the following amounts (000):
Cash collateral received for securities on loan $207,143
Payable upon receipt of securities on loan ($207,143)
(F) The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 2.50%.
CMO--Collateralized Mortgage Obligation
FFCB--Federal Farm Credit Bank
FHLB--Federal Home Loan Bank
FHLMC--Federal Home Loan Mortgage Corporation
FNMA--Federal National Mortgage Association
GNMA--Government National Mortgage Association
TVA--Tennessee Valley Authority
FIRST AMERICAN FUNDS SEMIANNUAL REPORT 2000 9)
<PAGE>
STATEMENTS OF NET ASSETS MARCH 31, 2000 (UNAUDITED)
LIMITED TERM INCOME FUND
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
CORPORATE OBLIGATIONS -- 22.2%
FINANCE -- 11.8%
Bear Stearns
6.750%, 05/01/01 $ 4,000 $ 3,978
CIT Group Holdings
6.250%, 03/28/01 2,500 2,479
Household Finance
6.000%, 05/01/04 5,000 4,719
Lehman Brothers Holdings
6.900%, 03/30/01 5,000 4,972
Salomon Smith Barney
5.980%, 03/26/01 7,750 7,671
-----------
23,819
-----------
INDUSTRIAL CONGLOMERATE -- 2.5%
Saint Gobain (Compagnie D.e.)
6.120%, 04/04/00 5,000 4,995
-----------
MANUFACTURING -- 5.0%
Ford Credit Auto Loan Master Trust Series 1995-1 Class-A
6.500%, 08/15/02 3,660 3,656
Ford Motor Credit
6.550%, 09/10/02 3,000 2,951
General Motors Acceptance
6.625%, 01/10/02 3,500 3,467
-----------
10,074
-----------
TELECOMMUNICATIONS -- 2.9%
AT&T
6.500%, 09/15/02 3,000 2,957
Worldcom
6.125%, 08/15/01 3,000 2,962
-----------
5,919
-----------
TOTAL CORPORATE OBLIGATIONS
(Cost $45,342) 44,807
-----------
U.S. AGENCY MORTGAGE-BACKED SECURITIES (A) -- 28.1%
ADJUSTABLE RATE -- 21.0%
FHLMC Pool #350022
7.000%, 11/01/16 (B) 3,191 3,233
FHLMC Pool #350036
7.250%, 01/01/17 (B) 429 434
FHLMC Pool #785781
6.478%, 02/01/27 (B) 4 4
FNMA Pool #093872
6.690%, 11/01/17 (B) 3,732 3,754
FNMA Pool #102549
6.890%, 01/01/20 (B) 706 724
FNMA Pool #176370
7.186%, 02/01/22 (B) 642 657
FNMA Pool #415285
5.769%, 02/01/28 (B) 4,903 4,873
LIMITED TERM INCOME FUND (CONTINUED)
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
FNMA Pool #605324
7.318%, 06/01/18 (B) $ 688 $ 706
FNMA Pool #785730
6.269%, 12/01/26 (B) 83 82
GNMA Pool #8006
6.750%, 07/20/22 (B) 3,126 3,156
GNMA Pool #8191
6.375%, 05/20/23 (B) 3,626 3,650
GNMA Pool #8445
6.375%, 06/20/24 (B) 3,298 3,317
GNMA Pool #8699
6.750%, 09/20/25 (B) 2,540 2,561
GNMA Pool #8747
6.125%, 11/20/25 (B) 407 410
GNMA Pool #8824
6.750%, 08/20/21 (B) 2,918 2,945
GNMA Pool #8847
6.375%, 04/20/26 (B) 2,430 2,442
GNMA Pool #8855
7.125%, 10/20/21 (B) 2,845 2,872
GNMA Pool #80106
6.750%, 08/20/27 (B) 1,347 1,356
GNMA Pool #80154
6.375%, 01/20/28 (B) 1,440 1,446
GNMA Pool #80213
6.500%, 07/20/28 (B) 3,631 3,644
-----------
42,266
-----------
FIXED RATE -- 7.1%
FHLMC
7.000%, 02/15/03 5,000 4,988
FHLMC Series 1655 Class-E
6.000%, 01/15/07 2,103 2,089
FNMA
5.750%, 04/15/03 5,000 4,842
GNMA Pool #158777
9.000%, 05/15/16 442 457
GNMA Pool #780081
10.000%, 02/15/25 821 885
GNMA Pool #780398
9.000%, 04/15/21 1,082 1,132
-----------
14,393
-----------
TOTAL U.S. AGENCY MORTGAGE-BACKED SECURITIES
(Cost $56,979) 56,659
-----------
ASSET-BACKED SECURITIES (A) -- 28.7%
AUTOMOBILES -- 5.8%
Auto Bond Receivables Trust Series 1993-1 Class-A
6.130%, 11/15/21 (B) (D) 106 105
Fasco Auto Trust Series 1996-1 Class-A
6.650%, 11/15/01 720 718
General Motors Acceptance Series 1997 Class-A
6.500%, 04/15/02 641 641
The accompanying notes are an integral part of the financial statements.
(10 FIRST AMERICAN FUNDS SEMIANNUAL REPORT 2000
<PAGE>
LIMITED TERM INCOME FUND (CONTINUED)
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
MMCA Automobile Trust Series 1997-1 Class-A3
6.080%, 05/15/01 $ 26 $ 26
Manhattan Auto Owner Trust
Series 1997-A Class-A5
6.500%, 12/17/01 2,560 2,552
Nissan Auto Receivables Trust
Series 1997-A Class-A
6.150%, 02/15/03 2,911 2,906
Westo, Series 1999-A, Class-A4
5.700%, 11/20/03 5,000 4,856
-----------
11,804
-----------
CREDIT CARDS -- 9.2%
Chemical Master Credit Card Trust
Series 1995-3 Class-A
6.230%, 04/15/05 3,100 3,028
Circuit City Credit Card Master Trust
Series 1995-1 Class-A
6.375%, 08/15/05 2,525 2,518
Discover Card Master Trust
Series 2000-3 Class-A
6.250%, 09/15/05 (B) 5,000 5,000
Sears Credit Account Master Trust
Series 1999-2 Class-A
6.350%, 02/15/07 3,100 3,047
Standard Credit Card Master Trust
Series 1993-2 Class-A
5.950%, 10/07/04 5,100 4,912
-----------
18,505
-----------
EQUIPMENT LEASING & RENTALS -- 3.6%
Caterpillar Financial
5.850%, 04/25/03 5,500 5,446
Icon Receivables Series 1997-A Class-A1
6.435%, 06/01/05 (C) 1,871 1,853
-----------
7,299
-----------
HOME EQUITY (A) -- 9.8%
Banc One Home Equity Trust
Series 1999-2 Class-A3
6.940%, 06/25/29 4,000 3,948
BCI Home Equity Loan
Series 1994-1 Class-B
6.120%, 03/29/44 (B) (C) 268 268
EQCC Home Equity Loan Trust
Series 1998-1 Class-A6F
6.252%, 12/15/07 2,000 1,936
Green Tree Financial Series 1997-2 Class-A6
7.240%, 06/15/28 3,000 2,949
Green Tree Home Equity Loan Trust
Series 1999-C Class-A3
6.770%, 07/15/30 4,500 4,440
Green Tree Home Improvement Loan Trust
Series 1996-F Class-HEA3
6.900%, 01/15/28 74 74
The Money Store Home Equity Trust
Series 1994-A Class-A4
6.275%, 12/15/22 2,750 2,665
LIMITED TERM INCOME FUND (CONTINUED)
DESCRIPTION PAR (000)/SHARES VALUE (000)
- --------------------------------------------------------------------------------
The Money Store Home Equity Trust
Series 1996-D Class-A6
6.830%, 06/15/21 $ 3,440 $ 3,428
-----------
19,708
-----------
VACATION PROPERTIES -- 0.3%
Patten Series 1995-1A
7.081%, 09/01/13 (B) (C) 559 517
-----------
TOTAL ASSET-BACKED SECURITIES
(Cost $58,335) 57,833
-----------
U.S. GOVERNMENT & AGENCY SECURITIES -- 13.1%
U.S. AGENCY DEBENTURES -- 10.4%
FHLB
5.690%, 08/07/01 5,500 5,411
6.750%, 02/01/02 3,000 2,989
6.750%, 02/15/02 5,000 4,980
6.000%, 08/15/02 3,000 2,933
5.400%, 01/15/03 5,000 4,790
-----------
21,103
-----------
U.S. TREASURY OBLIGATION -- 2.7%
U.S. Treasury Note
5.625%, 02/28/01 5,500 5,464
-----------
TOTAL U.S. GOVERNMENT & AGENCY SECURITIES
(Cost $26,777) 26,567
-----------
PRIVATE MORTGAGE-BACKED SECURITIES (A) -- 6.6%
ADJUSTABLE RATE -- 2.4%
Merrill Lynch Mortgage Investors
Series 1993 Class-A4-C
6.875%, 03/15/18 (B) 4,850 4,935
-----------
FIXED RATE -- 4.2%
Advanta Mortgage Loan Trust Series 1998-2 Class-A12
6.330%, 08/25/19 3,000 2,877
Countrywide Mortgage-Backed Securities
Series 1993-B Class-A4
6.750%, 11/25/23 1,463 1,423
PNC Mortgage Securities Series 1999-5 Class-1A1
6.150%, 06/25/29 2,231 2,186
Residential Funding Series 1999-S5 Class-A1
6.000%, 02/25/29 2,000 1,965
-----------
8,451
-----------
TOTAL PRIVATE MORTGAGE-BACKED SECURITIES
(Cost $13,495) 13,386
-----------
RELATED PARTY MONEY MARKET FUND -- 4.7%
First American Prime Obligations Fund (E) 9,552,000 9,552
-----------
TOTAL RELATED PARTY MONEY MARKET FUND
(Cost $9,552) 9,552
-----------
TOTAL INVESTMENTS -- 103.4%
(Cost $210,480) 208,804
-----------
OTHER ASSETS AND LIABILITIES, NET -- (3.4%) (F) (6,811)
-----------
FIRST AMERICAN FUNDS SEMIANNUAL REPORT 2000 11)
<PAGE>
STATEMENTS OF NET ASSETS MARCH 31, 2000 (UNAUDITED)
LIMITED TERM INCOME FUND (CONCLUDED)
DESCRIPTION VALUE (000)
- --------------------------------------------------------------------------------
NET ASSETS:
Portfolio Capital--Class A ($0.0001 par value--
2 billion authorized) based on
9,083,050 outstanding shares $ 236,977
Portfolio Capital--Class Y ($0.0001 par value--
2 billion authorized) based on
11,494,130 outstanding shares 117,227
Undistributed net investment income 265
Accumulated net realized loss on investments (150,800)
Net unrealized depreciation of investments (1,676)
-----------
TOTAL NET ASSETS -- 100.0% $ 201,993
-----------
Net asset value and redemption price per share -- Class A $ 9.82
Maximum sales charge of 2.50% (G) 0.25
-----------
Offering price per share -- Class A $ 10.07
-----------
Net asset value, offering price, and redemption
price per share -- Class Y $ 9.82
-----------
(A) The fund attempts to maintain a weighted average effective maturity of one
to three years. Effective maturity differs from actual stated or final
maturity, which may be substantially longer. See also the comments of page
36 of this book.
(B) Variable Rate Security--the rate reported on the Statement of Net Assets is
the rate in effect as of March 31, 2000.
(C) Security sold within the terms of a private placement memorandum, exempt
from registration under section 144A of the Securities Act of 1933, as
amended, and may be sold only to dealers in that program or other "qualified
institutional investors". These securities have been determined to be liquid
under guidelines established by the Board of Directors.
(D) Interest payments are infrequent
(E) This money market fund is advised by the U.S. Bank National Association who
also serves as Advisor for this Fund. See also the notes to the financial
statements.
(F) Other assets and liabilities representing greater than five percent of total
net assets include the following (000):
Cash collateral received for securities on loan $55,858
Payable upon return of securities on loan ($55,858)
(G) The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 2.50%.
FHLB--Federal Home Loan Bank
FHLMC--Federal Home Loan Mortgage Corporation
FNMA--Federal National Mortgage Association
GNMA--Government National Mortgage Association
STRATEGIC INCOME FUND
DESCRIPTION PAR (000)(F) VALUE (000)
- --------------------------------------------------------------------------------
HIGH YIELD CORPORATE OBLIGATIONS -- 38.2%
APPAREL/TEXTILES -- 0.0%
Glenoit, Callable 04/15/02 @ 105.500 (E)
11.000%, 04/15/07 $ 100 $ 29
-----------
AUTOMOTIVE -- 1.5%
Accuride, Callable 02/01/03 @ 104.625
9.250%, 02/01/08 200 173
Aftermarket Technology, Callable 08/01/99 @ 106.000
12.000%, 08/01/04 412 410
American Axle & Manufacturing,
Callable 03/01/04 @ 104.875
9.750%, 03/01/09 300 288
Collins & Aikman Products,
Callable 04/15/01 @ 105.750
11.500%, 04/15/06 425 405
Federal-Mogul
7.500%, 01/15/09 1,000 774
JL French Auto Casting, Series B,
Callable 06/01/04 @ 105.750
11.500%, 06/01/09 500 490
Lear, Callable 07/15/01 @ 104.750
9.500%, 07/15/06 75 73
Lear, Series B
8.110%, 05/15/09 1,000 913
Transportation Manufacturing Operations,
Callable 05/01/04 @ 105.625
11.250%, 05/01/09 350 331
-----------
3,857
-----------
BROADCAST RADIO & TELEVISION -- 1.8%
Acme Television, Callable 09/30/01 @ 105.438 (C) (E)
11.678%, 09/30/04 500 457
AMFM Operating, Callable 01/15/02 @ 106.313
12.625%, 10/31/06 80 90
Chancellor Media, Callable 01/15/02 @ 105.250 (E)
10.500%, 01/15/07 50 53
Chancellor Media, Callable 12/15/02 @ 104.063*
8.125%, 12/15/07 1,475 1,453
Chancellor Media, Series B,
Callable 06/15/02 @ 104.375
8.750%, 06/15/07 100 98
Cumulus Media, Callable 07/01/03 @ 105.188 (E)
10.375%, 07/01/08 450 423
Fox/Liberty Networks, Callable 08/15/02 @ 104.875 (C)
9.595%, 08/15/07 575 454
Lamar Media, Callable 09/15/02 @ 104.313
8.625%, 09/15/07 400 374
SFX Broadcasting, Callable 05/15/01 @ 105.375
10.750%, 05/15/06 150 163
Sinclair Broadcast Group, Callable 07/15/02 @ 104.500
9.000%, 07/15/07 300 267
Sinclair Broadcast Group, Callable 12/15/02 @ 104.375
8.750%, 12/15/07 975 834
-----------
4,666
-----------
The accompanying notes are an integral part of the financial statements.
(12 FIRST AMERICAN FUNDS SEMIANNUAL REPORT 2000
<PAGE>
STRATEGIC INCOME FUND (CONTINUED)
DESCRIPTION PAR (000)(F) VALUE (000)
- --------------------------------------------------------------------------------
BUILDING & CONSTRUCTION PRODUCTS -- 0.9%
American Standard
7.375%, 02/01/08 $ 1,000 $ 900
Cemex (D) (G)
9.625%, 10/01/09 500 512
D.R. Horton
8.375%, 06/15/04 1,000 907
-----------
2,319
-----------
CABLE TELEVISION -- 3.2%
Charter Communications Holdings,
Callable 04/01/04 @ 104.960 (C)
11.252%, 04/01/11 1,500 832
CSC Holdings, Callable 02/15/03 @ 104.800
9.875%, 02/15/13 400 408
CSC Holdings, Callable 05/15/01 @ 104.938
9.875%, 05/15/06 50 51
CSC Holdings, Callable 11/01/00 @ 104.625
9.250%, 11/01/05 550 550
Echostar DBS, Callable 02/01/04 @ 104.688
9.375%, 02/01/09 950 917
Lenfest Communications,
Callable 02/15/03 @ 104.125
8.250%, 02/15/08 525 521
NTL, Series B, Callable 04/01/03 @ 104.875 (C)
10.242%, 04/01/08 1,475 933
NTL Communications, Series B,
Callable 10/01/03 @ 105.750
11.500%, 10/01/08 150 154
NTL Communications, Series B,
Callable 10/01/03 @ 106.188 (C)
11.577%, 10/01/08 1,100 707
Pegasus Communications, Series B,
Callable 10/15/01 @ 104.813
9.625%, 10/15/05 225 216
Pegasus Communications, Series B,
Callable 12/01/02 @ 104.875
9.750%, 12/01/06 300 288
RCN, Callable 10/15/02 @ 105.562 (C)
12.698%, 10/15/07 525 336
Telewest Communications Unit,
Callable 04/15/04 @ 104.625 (C) (D)
9.815%, 04/15/09 575 333
Telewest Communications,
Callable 10/01/00 @ 100.000 (C)
11.510%, 10/01/07 575 538
United International Holdings, Series B,
Callable 02/15/03 @ 105.375 (C) (E)
12.118%, 02/15/08 1,050 727
United Pan-Europe Communication,
Callable 11/01/04 @ 106.688 (C) (D)
12.875%, 11/01/09 200 102
United Pan-Europe Communication, Series B,
Callable 08/01/04 @ 106.250 (C)
13.010%, 08/01/09 1,000 500
-----------
8,113
-----------
STRATEGIC INCOME FUND (CONTINUED)
DESCRIPTION PAR (000)(F) VALUE (000)
- --------------------------------------------------------------------------------
CHEMICALS & PLASTICS -- 1.5%
Buckeye Cellulose, Callable 09/15/01 @ 104.625
9.250%, 09/15/08 $ 500 $ 503
Huntsman ICI Chemicals,
Callable 07/01/04 @ 105.063 (D) (G)
10.125%, 07/01/09 EU 1,000 998
Huntsman, Callable 07/01/02 @ 104.750 (D)
9.500%, 07/01/07 800 714
Lyondell Chemical, Callable 05/01/04 @ 105.438
10.875%, 05/01/09 1,000 942
Polymer Group, Callable 03/01/03 @ 104.375
8.750%, 03/01/08 500 435
Polymer Group, Series B,
Callable 07/01/02 @ 104.625
9.000%, 07/01/07 200 176
-----------
3,768
-----------
CONSUMER PRODUCTS -- 0.4%
Chattem, Callable 04/01/03 @ 104.438
8.875%, 04/01/08 325 275
Diamond Brands Operating,
Callable 04/15/03 @ 105.063
10.125%, 04/15/08 50 32
Playtex Family Products,
Callable 12/15/99 @ 103.000
9.000%, 12/15/03 500 485
Sealy Mattress, Series B,
Callable 12/15/02 @ 105.437 (C)
12.167%, 12/15/07 300 212
-----------
1,004
-----------
ELECTRONIC EQUIPMENT -- 1.2%
Hyundai Semiconductor (E)
8.250%, 05/15/04 1,000 923
Samsung Electronic America (G)
9.750%, 05/01/03 1,500 1,535
Telecommunications Techniques,
Callable 05/15/03 @ 104.875
9.750%, 05/15/08 725 662
-----------
3,120
-----------
ENVIRONMENTAL SERVICES -- 0.6%
Allied Waste North America, Series B,
Callable 01/01/04 @ 103.938
7.875%, 01/01/09 1,000 795
Allied Waste North America,
Callable 8/1/04 @ 105.00 (D)
10.000%, 08/01/09 950 703
-----------
1,498
-----------
FINANCIAL SERVICES -- 3.6%
Bancomext Trust (G)
11.250%, 05/30/06 1,250 1,339
Cellco Finance, Callable 08/01/02 @ 107.500 (G)
15.000%, 08/01/05 900 958
China Development Bank (G)
8.250%, 05/15/09 1,000 1,021
FIRST AMERICAN FUNDS SEMIANNUAL REPORT 2000 13)
<PAGE>
STATEMENTS OF NET ASSETS MARCH 31, 2000 (UNAUDITED)
STRATEGIC INCOME FUND (CONTINUED)
DESCRIPTION PAR (000)(F) VALUE (000)
- --------------------------------------------------------------------------------
Golden State Escrow
7.125%, 08/01/05 $ 1,000 $ 885
Inter-American Development Bank
7.375%, 01/15/10 2,000 2,072
Kappa Beheer, Callable 07/15/04 @ 105.313
10.625%, 07/15/09 EU 1,800 1,800
Sovereign Bancorp
10.500%, 11/15/06 1,000 1,021
-----------
9,096
-----------
FOOD WHOLESALERS, RETAILERS & SERVICES -- 0.2%
Dominos, Callable 01/15/04 @ 105.188
10.375%, 01/15/09 600 549
-----------
FOOD, BEVERAGE & TOBACCO PRODUCTS -- 1.3%
Agrilink Foods, Callable 11/01/03 @ 105.938
11.875%, 11/01/08 500 455
Canandaigua Brands, Callable 03/01/04 @104.250
8.500%, 03/01/09 500 462
International Home Foods,
Callable 11/01/01 @ 105.190
10.375%, 11/01/06 475 463
Premier International Food,
Callable 09/01/04 @ 106.000 (D) (G)
12.000%, 09/01/09 1,500 1,410
Triarc Consumer Products,
Callable 02/15/04 @ 105.125 (D)
10.250%, 02/15/09 400 378
-----------
3,168
-----------
HEALTH CARE -- 1.5%
Columbia/HCA Healthcare
6.910%, 06/15/05 1,000 900
Dade International, Callable 05/01/01 @ 105.560
11.125%, 05/01/06 350 331
Fisher Scientific International,
Callable 02/01/03 @ 104.500
9.000%, 02/01/08 550 498
9.000%, 02/01/08 450 407
Hanger Orthopedic Group,
Callable 06/15/04 @ 105.625
11.250%, 06/15/09 200 157
Tenet Healthcare
8.000%, 01/15/05 50 47
Tenet Healthcare, Series B,
Callable 06/01/03 @ 104.063
8.125%, 12/01/08 1,500 1,369
-----------
3,709
-----------
HOTELS -- 1.2%
Florida Panthers Holdings,
Callable 04/15/04 @ 104.938
9.875%, 04/15/09 475 432
Harrahs Operating
7.875%, 12/15/05 1,000 925
STRATEGIC INCOME FUND (CONTINUED)
DESCRIPTION PAR (000)(F) VALUE (000)
- --------------------------------------------------------------------------------
Host Marriott, Callable 08/01/03 @ 103.985
7.875%, 08/01/08 $ 1,025 $ 864
Park Place Entertainment
7.875%, 12/15/05 1,000 930
-----------
3,151
-----------
INDUSTRIAL PRODUCTS -- 0.9%
Owens Illinois
7.850%, 05/15/04 1,000 961
Thermo Instrument Systems
4.000%, 01/15/05 1,000 870
Wesco Distribution,
Callable 06/01/03 @ 104.563 (E)
9.125%, 06/01/08 475 411
-----------
2,242
-----------
LEISURE & ENTERTAINMENT -- 0.5%
Premier Parks,
Callable 04/01/03 @ 105.000 (C)
10.189%, 04/01/08 1,850 1,172
-----------
MACHINERY & EQUIPMENT -- 0.4%
United Rentals, Series B,
Callable 01/15/04 @ 104.625
9.250%, 01/15/09 1,000 885
-----------
METALS & MINING -- 0.0%
AEI Holdings, Callable 12/15/02 @ 105.250 (E)
10.500%, 12/15/05 550 82
AEI Resources, Callable 12/15/02 @ 105.750 (E)
11.500%, 12/15/06 150 7
-----------
89
-----------
PAPER & RELATED PRODUCTS -- 0.6%
Grupo Industrial Durango (G)
12.625%, 08/01/03 1,500 1,507
-----------
PETROLEUM & FUEL PRODUCTS -- 0.9%
Ocean Energy, Series B,
Callable 07/15/02 @ 104.440
8.875%, 07/15/07 1,000 962
Pogo Producing, Series B,
Callable 02/15/04 @ 105.188
10.375%, 02/15/09 100 102
R&B Falcon
12.250%, 03/15/06 250 269
RBF Finance, Callable 03/15/04 @ 105.688
11.375%, 03/15/09 100 106
Triton Energy
8.750%, 04/15/02 500 497
Vintage Petroleum, Callable 02/01/02 @ 104.310
8.625%, 02/01/09 500 461
-----------
2,397
-----------
(14 FIRST AMERICAN FUNDS SEMIANNUAL REPORT 2000
<PAGE>
STRATEGIC INCOME FUND (CONTINUED)
DESCRIPTION PAR (000)(F) VALUE (000)
- --------------------------------------------------------------------------------
PRINTING & PUBLISHING -- 0.3%
Hollinger International Publishing,
Callable 02/01/01 @ 104.625
9.250%, 02/01/06 $ 700 $ 658
-----------
RESTAURANTS -- 0.4%
Tricon Global Restaurants
7.650%, 05/15/08 1,000 958
-----------
SERVICES -- 0.3%
Crown Castle International,
Callable 05/15/04 @ 105.187 (C)
10.649%, 05/15/11 625 356
Crown Castle International,
Callable 08/01/04 @ 105.625 (C)
11.517%, 08/01/11 700 406
-----------
762
-----------
STEEL & STEEL WORKS -- 0.4%
AK Steel, Callable 12/15/01 @ 104.560
9.125%, 12/15/06 1,000 977
Republic Technologies,
Callable 07/15/04 @ 106.875 (E)
13.750%, 07/15/09 250 55
-----------
1,032
-----------
SURFACE TRANSPORTATION -- 0.9%
Gearbulk Holding, Callable 12/01/99 @ 105.625
11.250%, 12/01/04 400 408
Newport News Shipbuilding,
Callable 12/01/01 @ 104.310
8.625%, 12/01/06 1,000 977
Railworks, Callable 04/15/04 @ 105.750
11.500%, 04/15/09 225 211
Stena Line, Callable 06/01/03 @ 105.313
10.625%, 06/01/08 200 114
Stena, Callable 12/15/00 @ 105.250
10.500%, 12/15/05 150 132
Stena, Callable 06/15/02 @ 104.375
8.750%, 06/15/07 525 409
-----------
2,251
-----------
TELECOMMUNICATIONS & CELLULAR -- 12.1%
Alestra, Callable 05/15/04 @ 106.313
12.625%, 05/15/09 3,250 3,250
Call-Net Enterprises,
Callable 08/15/02 @ 104.635 (C)
9.388%, 08/15/07 375 201
Call-Net Enterprises,
Callable 08/15/03 @ 104.470 (C)
9.055%, 08/15/08 600 270
Call-Net Enterprises,
Callable 05/15/04 @ 105.400 (C)
12.770%, 05/15/09 525 236
Centennial Cellular,
Callable 12/15/03 @ 105.375
10.750%, 12/15/08 350 346
Enintel Unit, Callable 10/15/05 @ 106.250
12.500%, 04/15/10 EU 1,000 956
Global Crossing Holdings,
Callable 11/01/04 @ 104.750 (D)
9.500%, 11/15/09 475 458
STRATEGIC INCOME FUND (CONTINUED)
DESCRIPTION PAR (000)(F) VALUE (000)
- --------------------------------------------------------------------------------
Hermes Europe Railtel,
Callable 08/15/02 @ 105.750
11.500%, 08/15/07 $ 475 $ 444
Hermes Europe Railtel,
Callable 01/15/04 @ 105.188
10.375%, 01/15/09 100 89
Intermedia Communications,
Callable 05/15/01 @ 106.250 (C)
12.004%, 05/15/06 250 227
Intermedia Communications,
Callable 07/15/02 @ 105.625 (C)
11.694%, 07/15/07 600 462
Intermedia Communications,
Callable 06/01/03 @ 104.300
8.600%, 06/01/08 250 217
Intermedia Communications, Series B,
Callable 03/01/04 @ 106.125 (C)
13.192%, 03/01/09 500 300
Jazztel, Callable 04/01/04 @ 107.000 (G)
14.000%, 04/01/09 EU 2,000 2,042
Level 3 Communications (E)
10.750%, 03/15/08 EU 2,500 2,321
Level 3 Communications,
Callable 05/01/03 @ 104.563
9.125%, 05/01/08 750 752
Level 3 Communications,
Callable 12/01/03 @ 105.250 (C)
10.930%, 12/01/08 1,950 1,068
Maxcom Telecommunicaciones Unit
13.750%, 04/01/07 1,500 1,508
McLeodusa, Callable 03/01/02 @ 105.250 (C)
8.667%, 03/01/07 525 410
McLeodusa, Callable 03/15/03 @ 104.188
8.375%, 03/15/08 225 199
McLeodusa, Callable 02/15/04 @ 104.063
8.125%, 02/15/09 325 283
Millicom International Cellular,
Callable 06/01/01 @ 106.750 (C)
14.429%, 06/01/06 625 519
Netia Holdings, Series B,
Callable 11/01/02 @ 105.625 (C)
15.076%, 11/01/07 2,600 1,807
Nextel Communications,
Callable 02/15/03 @ 104.975 (C) (E)
11.455%, 02/15/08 1,400 938
Nextel Communications,
Callable 11/15/04 @ 104.688 (D)
9.375%, 11/15/09 925 851
Nextel International,
Callable 04/15/03 @ 106.063 (C)
12.348%, 04/15/08 75 45
Nextel Partners,
Callable 02/01/04 @ 107.000 (C)
10.888%, 02/01/09 150 95
Nextlink Communications,
Callable 03/15/03 @ 104.500 (E)
9.000%, 03/15/08 100 90
Nextlink Communications,
Callable 04/15/03 @ 104.725 (C)
11.067%, 04/15/08 775 465
Nextlink Communications,
Callable 06/01/04 @ 105.375
10.750%, 06/01/09 325 319
FIRST AMERICAN FUNDS SEMIANNUAL REPORT 2000 15)
<PAGE>
STATEMENTS OF NET ASSETS MARCH 31, 2000 (UNAUDITED)
STRATEGIC INCOME FUND (CONTINUED)
DESCRIPTION PAR (000)(F) VALUE (000)
- --------------------------------------------------------------------------------
Nextlink Communications,
Callable 06/01/04 @ 106.125 (C)
11.888%, 06/01/09 $ 800 $ 444
Nextlink Communications,
Callable 12/01/04 @ 106.063 (C) (D)
12.638%, 12/01/09 300 158
Nuevo Grupo Iusacell (E)
14.250%, 12/01/06 1,000 1,070
PSINet, Callable 08/01/04 @ 105.500
11.000%, 08/01/09 325 315
PSINet, Series B, Callable 02/15/02 @ 105.000
10.000%, 02/15/05 550 523
Qwest Communications,
Callable 10/15/02 @ 104.735 (C) (E)
8.890%, 10/15/07 600 480
Rogers Cantel, Callable 10/1/02 @ 104.400
8.800%, 10/01/07 100 100
Sprint Capital
5.700%, 11/15/03 1,000 948
Teligent, Callable 03/01/03 @ 105.75 (C)
15.086%, 06/30/07 100 54
Teligent, Callable 12/01/02 @ 105.750
11.500%, 12/01/07 550 495
Tricom, Callable 09/01/01 @ 105.688 (G)
11.375%, 09/01/04 1,000 1,054
US Xchange
15.000%, 07/01/08 250 185
Viatel, Callable 04/15/03 @ 105.575 (G)
11.150%, 04/15/08 DM 3,250 1,524
Viatel, Callable 04/15/03 @ 105.625
11.250%, 04/15/08 75 69
Viatel, Callable 04/15/03 @ 106.250 (C)
14.110%, 04/15/08 950 520
Viatel, Callable 03/15/04 @ 105.750
11.500%, 03/15/09 100 92
Voicestream Wireless Holdings,
Callable 11/15/04 @ 105.938 (C) (D)
8.546%, 11/15/09 1,000 595
Williams Communications Group,
Callable 10/01/04 @ 105.438
10.875%, 10/01/09 1,000 985
-----------
30,779
-----------
UTILITIES -- 1.6%
Calpine
7.625%, 04/15/06 1,000 925
CMS Energy
7.500%, 01/15/09 1,000 892
Empresa Nacional Electricidad, Series B (G)
8.500%, 04/01/09 2,000 1,985
Niagra Mowhawk Power,
Callable 07/01/03 @ 104.250 (C)
8.464%, 07/01/10 450 348
-----------
4,150
-----------
TOTAL HIGH YIELD CORPORATE OBLIGATIONS
(Cost $103,584) 96,929
-----------
STRATEGIC INCOME FUND (CONTINUED)
DESCRIPTION PAR (000)(F) VALUE (000)
- --------------------------------------------------------------------------------
FOREIGN GOVERNMENT BONDS -- 20.7%
ARGENTINA -- 2.0%
City of Buenos Aires (E)
11.250%, 04/11/07 $ 1,900 $ 1,756
Republic of Argentina, Series BGL5
11.375%, 01/30/17 2,600 2,524
Republic of Argentina, Series L-GL,
Callable 05/31/00 @ 100.000 (A)
6.875%, 03/31/23 1,000 843
-----------
5,123
-----------
AUSTRALIA -- 0.3%
New South Wales Treasury
6.500%, 05/01/06 AD 1,500 900
-----------
AUSTRIA -- 0.7%
Republic of Austria
7.625%, 10/18/04 EU 727 763
5.625%, 07/15/07 EU 1,100 1,068
-----------
1,831
-----------
BRAZIL -- 5.4%
Republic of Brazil
14.500%, 10/15/09 3,000 3,255
12.250%, 03/06/30 3,500 3,369
Republic of Brazil (G)
8.000%, 04/15/14 3,475 2,585
10.125%, 05/15/27 3,650 2,947
Republic of Brazil,
Callable 04/15/00 @ 100.000 (A)
7.000%, 04/15/12 2,000 1,515
-----------
13,671
-----------
BULGARIA -- 0.4%
Government of Bulgaria, Series A,
Callable 07/28/00 @ 100.000 (A)
7.063%, 07/28/24 1,250 1,001
-----------
CANADA -- 0.9%
Government of Canada
8.000%, 06/01/23 CD 1,000 879
Province of British Columbia
5.250%, 12/01/06 CD 2,000 1,303
-----------
2,182
-----------
DENMARK -- 0.3%
Kingdom of Denmark
7.000%, 11/10/24 DK 5,500 821
-----------
EL SALVADOR -- 0.6%
Republic of El Salvador
9.500%, 08/15/06 1,600 1,620
-----------
(16 FIRST AMERICAN FUNDS SEMIANNUAL REPORT 2000
<PAGE>
STRATEGIC INCOME FUND (CONTINUED)
DESCRIPTION PAR (000)(F) VALUE (000)
- --------------------------------------------------------------------------------
GREECE -- 0.8%
Hellenic Republic
8.600%, 03/26/08 GD 480,000 $ 1,575
Hellenic Republic (A)
10.240%, 10/23/03 GD 130,000 389
-----------
1,964
-----------
HUNGARY -- 0.8%
Government of Hungary
12.500%, 09/24/02 HF 250,000 993
13.000%, 07/24/03 HF 225,000 926
-----------
1,919
-----------
KAZAKHSTAN -- 0.9%
Republic of Kazakstan (D) (G)
13.625%, 10/18/04 2,000 2,217
-----------
MEXICO -- 1.8%
United Mexican States (G)
11.375%, 09/15/16 1,800 2,134
United Mexican States, Series D,
Callable 06/05/00 @ 100.000 (A)
6.903%, 12/31/19 2,500 2,456
-----------
4,590
-----------
NETHERLANDS -- 0.3%
Government of the Netherlands
7.500%, 04/15/10 EU 681 754
-----------
PANAMA -- 1.0%
Republic of Panama
8.875%, 09/30/27 1,500 1,318
Republic of Panama (G)
8.250%, 04/22/08 1,500 1,346
-----------
2,664
-----------
PHILIPPINES -- 1.1%
Philippines Republic (G)
9.875%, 01/15/19 3,000 2,696
-----------
QATAR -- 0.4%
State of Qatar
9.500%, 05/21/09 1,000 1,060
-----------
SOUTH AFRICA -- 0.7%
Republic of South Africa
12.500%, 01/15/02 ZR 6,000 925
13.500%, 09/15/15 ZR 6,500 960
-----------
1,885
-----------
STRATEGIC INCOME FUND (CONTINUED)
DESCRIPTION PAR (000)(F) VALUE (000)
- --------------------------------------------------------------------------------
SWEDEN -- 0.4%
Kingdom of Sweden, Series 1034
9.000%, 04/20/09 SK 6,500 $ 942
-----------
TURKEY -- 1.3%
Republic of Turkey
11.875%, 01/15/30 1,000 1,059
Republic of Turkey (G)
12.375%, 06/15/09 2,000 2,140
-----------
3,199
-----------
VENEZUELA -- 0.6%
Republic of Venezuela (G)
9.250%, 09/15/27 2,250 1,477
-----------
TOTAL FOREIGN GOVERNMENT BONDS
(Cost $53,364) 52,516
-----------
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED
OBLIGATIONS -- 10.7%
ADJUSTABLE RATE-- 0.4%
FNMA Series 1993-220, Class FD (A)
7.000%, 11/25/13 994 996
-----------
FIXED RATE -- 10.3%
FHLMC Gold Pool #C2-3507
6.000%, 03/01/29 1,923 1,752
FHLMC Gold Pool #CL-8204
7.500%, 11/01/28 974 958
FHLMC Gold Pool #E6-5045
7.500%, 08/01/11 694 695
FHLMC Gold Pool #E6-9977
5.500%, 04/01/13 1,057 976
FHLMC Series 2126
6.000%, 02/15/29 1,500 1,284
FNMA Pool #100042
11.000%, 10/15/20 115 125
FNMA Pool #109031
6.695%, 07/01/05 2,000 1,933
FNMA Pool #250113
9.000%, 07/01/24 253 261
FNMA Pool #252334
6.500%, 02/01/29 1,446 1,352
FNMA Pool #303675
10.000%, 10/01/17 168 180
FNMA Pool #323681
7.000%, 04/01/29 1,974 1,898
FNMA Pool #326580
8.000%, 03/01/08 523 528
FNMA Pool #329569
6.000%, 03/01/11 568 538
FNMA Pool #339839
6.000%, 03/01/26 716 654
FIRST AMERICAN FUNDS SEMIANNUAL REPORT 2000 17)
<PAGE>
STATEMENTS OF NET ASSETS MARCH 31, 2000 (UNAUDITED)
STRATEGIC INCOME FUND (CONTINUED)
DESCRIPTION PAR (000)(F) VALUE (000)
- --------------------------------------------------------------------------------
FNMA Pool #367977
6.500%, 02/01/04 $ 736 $ 722
FNMA Pool #380781
5.805%, 10/01/08 1,218 1,111
FNMA Pool #380791
5.850%, 10/01/08 984 898
FNMA Pool #380859
6.095%, 12/01/08 987 914
FNMA Pool #381517
5.950%, 04/01/07 1,500 1,390
FNMA Series 1993-50, Class PY
5.500%, 10/25/22 2,000 1,733
FNMA Series 1999-11, Class C
5.500%, 10/25/12 2,000 1,747
FNMA Series G93-1, Class H
6.700%, 02/25/21 828 815
FNMA TBA 30 Year (H)
7.500%, 03/01/30 2,000 1,966
GNMA Pool #160376X
9.000%, 06/15/16 65 68
GNMA, Series 1996-6, Class ZA
6.500%, 05/16/26 1,913 1,689
-----------
26,187
-----------
TOTAL U.S. GOVERNMENT AGENCY MORTGAGE-BACKED OBLIGATIONS
(Cost $28,419) 27,183
-----------
U.S. TREASURY OBLIGATIONS -- 6.3%
U.S. Treasury Bonds
7.500%, 11/15/16 2,000 2,265
6.125%, 08/15/29 5,000 5,103
U.S. Treasury Notes
5.875%, 11/15/04 5,000 4,910
6.625%, 05/15/07 2,000 2,037
5.625%, 05/15/08 700 673
6.250%, 08/15/23 1,000 1,014
-----------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $15,642) 16,002
-----------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 5.6%
FHLB
5.125%, 02/26/02 2,000 1,935
6.500%, 11/13/09 2,000 1,894
FHLMC
5.750%, 03/15/09 2,000 1,810
6.625%, 09/15/09 2,000 1,923
FNMA
5.125%, 02/13/04 3,000 2,803
6.375%, 06/15/09 2,052 1,938
6.000%, 03/01/30 2,000 1,883
-----------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $14,710) 14,186
-----------
STRATEGIC INCOME FUND (CONTINUED)
DESCRIPTION PAR (000)(F) VALUE (000)
- --------------------------------------------------------------------------------
ASSET-BACKED OBLIGATIONS -- 4.4%
CREDIT CARDS -- 1.3%
Discover Card Master Trust,
Series 1999-1, Class A
5.300%, 08/15/04 $ 1,500 $ 1,451
MBNA Master Credit Card Trust,
Series 1999-G, Class A
6.350%, 12/15/06 2,000 1,941
-----------
3,392
-----------
HOME EQUITY -- 3.1%
Advanta Mortgage Loan Trust,
Series 1998-2, Class A12
6.330%, 08/25/19 2,000 1,918
EQCC Home Equity Loan Trust,
Series 1998-1, Class A6F
6.252%, 12/15/07 2,000 1,936
Green Tree Financial, Series 1998-1, Class A4
6.040%, 11/01/29 2,120 2,075
The Money Store Home Equity Trust,
Series 1994-A, Class A4
6.275%, 12/15/22 2,000 1,939
-----------
7,868
-----------
TOTAL ASSET-BACKED OBLIGATIONS
(Cost $11,555) 11,260
-----------
CORPORATE OBLIGATIONS -- 4.4%
AEROSPACE & DEFENSE -- 0.4%
Boeing
8.100%, 11/15/06 1,000 1,025
-----------
AUTOMOTIVE -- 0.7%
DaimlerChrysler
7.400%, 01/20/05 1,000 1,003
Ford Motor Credit
5.800%, 01/12/09 1,000 882
-----------
1,885
-----------
FINANCIAL SERVICES -- 1.6%
AT&T Capital
6.250%, 05/15/01 1,000 990
L-Bank
13.500%, 06/22/01 CK 40,000 1,148
Lehman Brothers Holdings
7.375%, 05/15/04 1,000 989
Merrill Lynch
6.000%, 02/17/09 1,000 894
-----------
4,021
-----------
LEISURE & ENTERTAINMENT -- 0.4%
Royal Caribbean
8.125%, 07/28/04 1,000 992
-----------
(18 FIRST AMERICAN FUNDS SEMIANNUAL REPORT 2000
<PAGE>
STRATEGIC INCOME FUND (CONTINUED)
DESCRIPTION PAR (000)(F)/SHARES VALUE (000)
- --------------------------------------------------------------------------------
RETAIL -- 0.4%
Target
7.500%, 02/15/05 $ 1,000 $ 1,010
-----------
TRANSPORTATION -- 0.9%
American Airlines, Series 99-1
7.024%, 10/15/09 1,250 1,223
Continental Airlines
7.056%, 09/15/09 1,000 971
-----------
2,194
-----------
TOTAL CORPORATE OBLIGATIONS
(Cost $11,717) 11,127
-----------
PRIVATE MORTGAGE-BACKED OBLIGATIONS -- 2.4%
FIXED RATE -- 2.4%
Aircraft Finance Trust, Series 1999-1A, Class C (E)
8.000%, 05/15/24 1,000 929
Countrywide Mortgage Backed Securities,
Series 1993-B, Class A4
6.750%, 11/25/23 1,463 1,423
GMAC Commercial Mortgage Securities,
Series 1998-C2, Class A2
6.420%, 09/15/30 1,000 931
Morgan Stanley Capital, Series 1999-RM1, Class A2
6.710%, 12/15/31 2,000 1,885
Residential Funding Mortgage Securities,
Series 1999-S5, Class A1
6.000%, 02/25/29 1,000 983
-----------
6,151
-----------
TOTAL PRIVATE MORTGAGE-BACKED OBLIGATIONS
(Cost $6,279) 6,151
-----------
PREFERRED STOCKS -- 0.6%
UNITED STATES -- 0.6%
Cumulus Media, Series A 40,000 37
Nebco Evans Holding PIK* 300 --
Nextel Communications PIK, Series D* 61,000 64
Pegasus Communications PIK, Series A* 134,000 141
Primedia, Series D 3,000 290
Primedia, Series F 2,350 212
Primedia, Series H 2,150 185
R&B Falcon PIK* 3,800 422
Sinclair Capital 750 71
-----------
1,422
-----------
TOTAL PREFERRED STOCKS
(Cost $1,404) 1,422
-----------
STRATEGIC INCOME FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
WARRANTS -- 0.1%
ARGENTINA -- 0.0%
Republic of Argentina* 1,000 $ 1
-----------
MEXICO -- 0.0%
United Mexican States VRR* 5,383,000 --
-----------
UNITED STATES -- 0.1%
Bar Technologies* (D) 50 --
Electronic Retailing System International* (D) 75 --
Metronet* (D) 100 21
R&B Falcon* (D) 150 59
Sterling Chemical Holdings* 100 2
UIH Australia/Pacific* 150 5
Wireless One* 150 --
-----------
87
-----------
TOTAL WARRANTS
(Cost $36) 88
-----------
COMMON STOCKS -- 0.0%
UNITED STATES -- 0.0%
CS Wireless Systems *(D) 27 --
MediaNews Group* (E) 500 63
-----------
63
-----------
TOTAL COMMON STOCKS
(Cost $0) 63
-----------
RELATED PARTY MONEY MARKET FUND -- 4.9%
First American Prime Obligations Fund (B) 12,500,074 12,500
-----------
TOTAL RELATED PARTY MONEY MARKET FUND
(Cost $12,500) 12,500
-----------
TOTAL INVESTMENTS -- 98.3%
(Cost $259,210) 249,427
-----------
OTHER ASSETS AND LIABILITIES, NET -- 1.7% (I) 4,278
-----------
FIRST AMERICAN FUNDS SEMIANNUAL REPORT 2000 19)
<PAGE>
STATEMENTS OF NET ASSETS MARCH 31, 2000 (UNAUDITED)
STRATEGIC INCOME FUND (CONTINUED)
DESCRIPTION VALUE (000)
- --------------------------------------------------------------------------------
NET ASSETS:
Portfolio Capital--Class A ($.0001 par value--
2 billion authorized) based on
2,663,757 outstanding shares $ 42,087
Portfolio Capital--Class B ($.0001 par value--
2 billion authorized) based on
126,096 outstanding shares 1,166
Portfolio Capital--Class C ($.0001 par value--
2 billion authorized) based on
154,596 outstanding shares 1,424
Portfolio Capital--Class Y ($.0001 par value--
2 billion authorized) based on
25,246,284 outstanding shares 239,955
Distribution in excess of net investment income (1)
Accumulated net realized loss on investments (21,111)
Net unrealized depreciation of investments (9,783)
Net unrealized depreciation of forward foreign
currency contracts, foreign currency and
translation of other assets and liabilities
in foreign currency (32)
-----------
TOTAL NET ASSETS -- 100.0% $ 253,705
-----------
Net asset value and redemption price per share -- Class A $ 9.00
Maximum sales charge of 4.25% (J) 0.40
-----------
Offering price per share -- Class A $ 9.40
-----------
Net asset value and offering price per share -- Class B (K) $ 8.97
-----------
Net asset value and redemption price per share -- Class C (L) $ 8.99
Maximum sales charge of 1.00% (M) 0.09
-----------
Offering price per share -- Class C $ 9.08
-----------
Net asset value, offering price, and redemption
price per share -- Class Y $ 9.00
-----------
STRATEGIC INCOME FUND (CONCLUDED)
DESCRIPTION
- --------------------------------------------------------------------------------
* Non-income producing security.
(A) Variable Rate Security--the rate reported on the Statement of Net Assets is
the rate in effect as of March 31, 2000.
(B) This money market fund is advised by the U.S. Bank National Association who
also serves as advisor for this fund. See also the notes to the financial
statements.
(C) Delayed Interest (Step-Bonds)--Represents securities that remain zero-coupon
securities until a predetermined date at which time the stated coupon rate
becomes effective and interest becomes payable at regular intervals. The
interest rates disclosed represent yields at March 31, 2000, based upon the
estimated timing and amount of future interest and principal payments.
(D) Security sold within the terms of a private placement memorandum, exempt
from registration under section 144A of the Securities Act of 1933, as
amended, and may be sold only to dealers in that program or other "qualified
institutional investors". These securities have been determined to be liquid
under guidelines established by the Board of Directors.
(E) Securities considered illiquid or restricted. See also the notes to the
financial statements.
(F) In U.S. dollars unless otherwise indicated.
(G) Represents a foreign high yield (non-investment grade) bond. On March 31,
2000, the total market value of these investments was $33,427,000 or 13.18%
of total net assets.
(H) On March 31, 2000, the total cost of investments purchased on a when-issued
basis was $1,966,172.
(I) Other assets and liabilities representing greater than five percent of total
assets include the following (000):
Cash collateral received for securities on loan $33,629
Payable upon receipt of securities on loan ($33,269)
(J) The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 4.25%.
(K) Class B has a contingent deferred sales charge. For a description of a
possible redemption charge, see the notes to the financial statements.
(L) Class C has a contingent deferred sales charge. For a description of a
possible redemption charge, see the notes to the financial statements.
(M) The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 1.00%.
AD--Australian Dollar
CD--Canadian Dollar
CK--Czech Republic Koruna
DK--Danish Kroner
DM--German Mark
EU--Euro
FHLB--Federal Home Loan Bank
FHLMC--Federal Home Loan Mortgage Corporation
FNMA--Federal National Mortgage Association
GD--Greek Drachma
GNMA--Government National Mortgage Association
HF--Hungarian Forint
PIK--Payment-in-Kind interest is generally paid by issuing additional par of the
security rather than paying cash.
SK--Swedish Krona
TBA--To Be Announced
VRR--Value Recovery Right
ZR--South African Rand
The accompanying notes are an integral part of the financial statements.
(20 FIRST AMERICAN FUNDS SEMIANNUAL REPORT 2000
<PAGE>
STATEMENTS OF OPERATIONS for the six months ended March 31, 2000 (unaudited),
in thousands
<TABLE>
<CAPTION>
CORPORATE FIXED INCOME INTERMEDIATE TERM LIMITED TERM STRATEGIC
BOND FUND(1) FUND INCOME FUND INCOME FUND INCOME FUND
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 497+ $46,393+ $12,435+ $ 4,313+ $10,634+
Dividends -- -- -- -- 42
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 497 46,393 12,435 4,313 10,676
==================================================================================================================================
EXPENSES:
Investment advisory fees 42 4,855 1,359 476 811
Less: Waiver of investment advisory fees (31) (1,362) (332) (288) (16)
Administrator fees 6 754 211 74 126
Transfer agent fees 9 238 24 71 59
Custodian fees 2 208 58 20 35
Directors' fees -- 13 4 1 2
Registration fees 5 42 8 3 12
Professional fees -- 14 4 1 2
Printing -- 49 14 5 8
Distribution fees - Class A -- 159 40 27 32
Less: Waiver of distribution fees - Class A -- -- (16) (13) --
Distribution fees - Class B -- 68 -- -- 5
Distribution fees - Class C -- 3 -- -- 4
Less: Waiver of distribution fees - Class C -- (1) -- -- --
Other 1 30 9 3 5
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL NET EXPENSES 34 5,070 1,383 380 1,085
==================================================================================================================================
INVESTMENT INCOME - NET 463 41,323 11,052 3,933 9,591
==================================================================================================================================
REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS AND FOREIGN
CURRENCY TRANSACTIONS - NET:
Net realized gain (loss) on investments 49 (7,740) (4,063) (296) (3,541)
Net realized loss on forward foreign currency contracts
and foreign currency transactions -- -- -- (293)
Net change in unrealized appreciation/depreciation of
investments 215 (6,600) (1,112) (506) 1,218
Net change in unrealized appreciation/depreciation of
forward foreign currency contracts, foreign currency
and translation of other assets and liabilities
denominated in foreign currency -- -- -- -- (34)
- ----------------------------------------------------------------------------------------------------------------------------------
NET GAIN (LOSS) ON INVESTMENTS 264 (14,340) (5,175) (802) (2,650)
==================================================================================================================================
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $ 727 $26,983 $ 5,877 $ 3,131 $ 6,941
==================================================================================================================================
</TABLE>
+Includes income from securities lending program. See the Notes to the
Financial Statements for additional information.
(1)Commenced operations on February 1, 2000.
The accompanying notes are an integral part of the financial statements.
FIRST AMERICAN FUNDS SEMIANNUAL REPORT 2000 21)
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS in thousands
<TABLE>
<CAPTION>
CORPORATE FIXED
BOND FUND(3) INCOME FUND
- ----------------------------------------------------------------------------------------------------------------
2/1/00 10/1/99 10/1/98
to to to
3/31/00 3/31/00 9/30/99
- ----------------------------------------------------------------------------------------------------------------
(unaudited) (unaudited)
<S> <C> <C> <C>
OPERATIONS:
Investment income - net $ 463 $ 41,323 $ 77,815
Net realized gain (loss) on investments 49 (7,740) 6,020
Net realized loss on forward foreign currency contracts and foreign
currency transactions -- -- --
Net change in unrealized appreciation/depreciation
of investments 215 (6,600) (119,762)
Net change in unrealized depreciation of forward foreign currency
contracts, foreign currency and translation of
other assets and liabilities denominated in foreign currency -- -- --
- ----------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations 727 26,983 (35,927)
- ----------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment income - net:
Class A (4) (3,643) (8,415)
Class B -- (343) (757)
Class C -- (17) (12)
Class Y (498) (37,613) (68,379)
Net realized gain on investments:
Class A -- -- (2,343)
Class B -- -- (215)
Class C -- -- --
Class Y -- -- (15,597)
- ----------------------------------------------------------------------------------------------------------------
Total distributions (502) (41,616) (95,718)
- ----------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS(1):
Class A:
Proceeds from sales 619 11,555 19,270
Shares issued in connection with the acquisition of the
Intermediate Government Bond Fund and Adjustable Rate
Mortgage Fund respectively -- -- --
Reinvestment of distributions 4 2,548 5,331
Payments for redemptions -- (32,241) (77,045)
- ----------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from
Class A transactions 623 (18,138) (52,444)
- ----------------------------------------------------------------------------------------------------------------
Class B:
Proceeds from sales 6 976 4,356
Reinvestment of distributions -- 292 851
Payments for redemptions -- (3,242) (6,228)
- ----------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from
Class B transactions -- (1,974) (1,021)
- ----------------------------------------------------------------------------------------------------------------
Class C:
Proceeds from sales 40 52 747
Reinvestment of distributions -- 11 10
Payment for redemptions -- (367) (22)
- ----------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from
Class C transactions 40 (304) 735
- ----------------------------------------------------------------------------------------------------------------
Class Y:
Proceeds from sales 44,315 199,748 422,896
Shares issued in connection with the acquisition of the
Intermediate Government Bond Fund and Adjustable Rate
Mortgage Fund respectively -- -- --
Shares issued in connection with acquisition of Piper Common
Trust Fund -- -- 3,300
Reinvestment of distributions 3 12,841 45,723
Payments for redemptions -- (184,363) (328,293)
- ----------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from
Class Y transactions 44,318 28,226 143,626
- ----------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from
capital share transactions 44,981 7,810 90,896
- ----------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets 45,212 (6,823) (40,749)
NET ASSETS AT BEGINNING OF PERIOD -- 1,392,391 1,433,140
================================================================================================================
NET ASSETS AT END OF PERIOD (2) $ 45,212 $1,385,568 $1,392,391
================================================================================================================
</TABLE>
The accompanying notes are an integral part of the financial statements.
(22 FIRST AMERICAN FUNDS SEMIANNUAL REPORT 2000
<PAGE>
<TABLE>
<CAPTION>
INTERMEDIATE TERM LIMITED TERM STRATEGIC
INCOME FUND INCOME FUND INCOME FUND
- -----------------------------------------------------------------------------------
10/1/99 10/1/98 10/1/99 10/1/98 10/1/99 10/1/98
to to to to to to
3/31/00 9/30/99 3/31/00 9/30/99 3/31/00 9/30/99
- -----------------------------------------------------------------------------------
(unaudited) (unaudited) (unaudited)
<S> <C> <C> <C> <C> <C> <C>
$ 11,052 $ 22,250 $ 3,933 $ 7,695 $ 9,591 $ 13,597
(4,063) 2,086 (296) (134) (3,541) (2,471)
-- -- -- (293) (179)
(1,112) (25,022) (506) (2,495) 1,218 (5,283)
-- -- -- -- (34) (2)
- -----------------------------------------------------------------------------------
5,877 (686) 3,131 5,066 6,941 5,662
- -----------------------------------------------------------------------------------
(873) (2,015) (609) (261) (1,035) (2,478)
-- -- -- -- (36) (28)
-- -- -- -- (48) (20)
(9,892) (20,109) (3,137) (7,402) (8,431) (10,263)
-- (564) -- -- -- --
-- -- -- -- -- --
-- -- -- -- -- --
-- (5,033) -- -- -- --
- -----------------------------------------------------------------------------------
(10,765) (27,721) (3,746) (7,663) (9,550) (12,789)
- -----------------------------------------------------------------------------------
5,335 3,890 1,638 2,074 987 1,712 (1) See Note 4 in Notes to
Financial Statements for
additional information.
4,888 -- 86,320 -- -- -- (2) Includes undistributed
731 1,494 344 240 387 1,135 (distributions in excess
(11,372) (17,426) (4,423) (1,945) (4,932) (15,021) of) net investment income
- ----------------------------------------------------------------------------------- (000) of $(39) and $0 for
Corporate Bond Fund, $235
(418) (12,042) 83,879 369 (3,558) (12,174) and $528 for Fixed Income
- ----------------------------------------------------------------------------------- Fund, $500 and $242 for
Intermediate Term Income
-- -- -- -- 465 737 Fund, $265 and $36 for
-- -- -- -- 26 21 Limited Term Income Fund,
-- -- -- -- (136) (60) and $(1) and $252 for
- ----------------------------------------------------------------------------------- Strategic Income Fund at
March 31, 2000, and
-- -- -- -- 355 698 September 30, 1999,
- ----------------------------------------------------------------------------------- respectively.
(3) Commenced operations on
-- -- -- -- 387 1,077 February 1, 2000.
-- -- -- -- 36 12
-- -- -- -- (77) (11)
- -----------------------------------------------------------------------------------
-- -- -- -- 346 1,078
- -----------------------------------------------------------------------------------
41,322 74,471 17,457 29,463 52,742 149,128
128,443 -- 430 -- -- --
-- -- -- -- -- --
4,449 11,328 978 2,715 2,213 6,602
(92,950) (141,923) (24,976) (83,282) (10,064) (18,800)
- -----------------------------------------------------------------------------------
81,264 (56,124) (6,111) (51,104) 44,891 136,930
- -----------------------------------------------------------------------------------
80,846 (68,166) 77,768 (50,735) 42,034 126,532
- -----------------------------------------------------------------------------------
75,958 (96,573) 77,153 (53,332) 39,425 119,405
383,229 479,802 124,840 178,172 214,280 94,875
===================================================================================
$ 459,187 $ 383,229 $ 201,993 $ 124,840 $ 253,705 $ 214,280
===================================================================================
</TABLE>
FIRST AMERICAN FUNDS SEMIANNUAL REPORT 2000 23)
<PAGE>
FINANCIAL HIGHLIGHTS For a share outstanding, throughout the periods ended
September 30, unless otherwise indicated.
<TABLE>
<CAPTION>
REALIZED AND
NET ASSET UNREALIZED DIVIDENDS
VALUE NET GAINS OR FROM NET DISTRIBUTIONS
BEGINNING INVESTMENT (LOSSES) ON INVESTMENT FROM
OF PERIOD INCOME INVESTMENTS INCOME CAPITAL GAINS
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CORPORATE BOND FUND(1)
Class A
2000 (unaudited) $ 10.00 $ 0.13 $ 0.05 $ (0.13) $ --
Class B
2000 (unaudited) $ 10.00 $ 0.13 $ 0.05 $ (0.12) $ --
Class C
2000 (unaudited) $ 10.00 $ 0.13 $ 0.04 $ (0.12) $ --
Class Y
2000 (unaudited) $ 10.00 $ 0.14 $ 0.04 $ (0.13) $ --
FIXED INCOME FUND
Class A
2000* (unaudited) $ 10.65 $ 0.31 $ (0.12) $ (0.30) $ --
1999 11.69 0.59 (0.89) (0.59) (0.15)
1998 10.97 0.57 0.73 (0.57) (0.01)
1997 10.77 0.59 0.27 (0.59) (0.07)
1996 10.98 0.61 (0.11) (0.61) (0.10)
1995 10.37 0.66 0.61 (0.63) (0.03)
Class B
2000* (unaudited) $ 10.58 $ 0.27 $ (0.11) $ (0.27) $ --
1999 11.63 0.51 (0.90) (0.51) (0.15)
1998 10.91 0.49 0.73 (0.49) (0.01)
1997 10.72 0.51 0.26 (0.51) (0.07)
1996 10.94 0.52 (0.11) (0.53) (0.10)
1995 10.35 0.58 0.60 (0.56) (0.03)
Class C
2000* (unaudited) $ 10.64 $ 0.28 $ (0.11) $ (0.28) $ --
1999(2) 11.33 0.38 (0.69) (0.38) --
Class Y
2000* (unaudited) $ 10.65 $ 0.32 $ (0.11) $ (0.32) $ --
1999 11.69 0.61 (0.89) (0.61) (0.15)
1998 10.96 0.60 0.74 (0.60) (0.01)
1997 10.76 0.62 0.27 (0.62) (0.07)
1996 10.97 0.63 (0.11) (0.63) (0.10)
1995 10.37 0.66 0.62 (0.65) (0.03)
INTERMEDIATE TERM INCOME FUND
Class A
2000* (unaudited) $ 9.80 $ 0.26 $ (0.13) $ (0.27) $ --
1999 10.45 0.51 (0.54) (0.50) (0.12)
1998 10.00 0.53 0.47 (0.53) (0.02)
1997 9.93 0.55 0.15 (0.56) (0.07)
1996 9.94 0.55 -- (0.55) (0.01)
1995 9.55 0.59 0.38 (0.58) --
Class Y
2000* (unaudited) $ 9.77 $ 0.27 $ (0.14) $ (0.27) $ --
1999 10.42 0.52 (0.53) (0.52) (0.12)
1998 9.98 0.53 0.46 (0.53) (0.02)
1997 9.93 0.55 0.13 (0.56) (0.07)
1996 9.94 0.55 -- (0.55) (0.01)
1995 9.55 0.58 0.39 (0.58) --
- ----------------------------------------------------------------------------------------------
</TABLE>
+Returns are for the period indicated and have not been annualized.
*For the six month period ended March 31. All ratios for the period have been
annualized.
(A) Excluding sales charges.
(1) Commenced operations on February 1, 2000. All ratios for the period have
been annualized.
(2) Shares have been offered since February 1, 1999. All ratios for the period
have been annualized.
The accompanying notes are an integral part of the financial statements.
(24 FIRST AMERICAN FUNDS SEMIANNUAL REPORT 2000
<PAGE>
<TABLE>
<CAPTION>
RATIO OF NET
RATIO OF INVESTMENT
RATIO OF NET EXPENSES TO INCOME TO
NET ASSET RATIO OF INVESTMENT AVERAGE AVERAGE
VALUE NET ASSETS EXPENSES TO INCOME TO NET ASSETS NET ASSETS PORTFOLIO
END OF TOTAL END OF AVERAGE AVERAGE (EXCLUDING (EXCLUDING TURNOVER
PERIOD RETURN (A) PERIOD (000) NET ASSETS NET ASSETS WAIVERS) WAIVERS) RATE
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 10.05 1.77%+ $ 624 0.95% 7.71% 1.51% 7.15% 35%
$ 10.06 1.80%+ $ 6 1.50% 7.05% 1.98% 6.57% 35%
$ 10.05 1.72%+ $ 40 1.50% 7.33% 2.06% 6.77% 35%
$ 10.05 1.79%+ $ 44,542 .50% 7.85% 1.02% 7.33% 35%
$ 10.54 1.88%+ $ 117,511 0.95% 5.73% 1.14% 5.53% 28%
10.65 (2.67) 137,133 0.95 5.29 1.14 5.10 90
11.69 12.29 205,237 0.95 5.10 1.11 4.94 147
10.97 8.26 8,535 0.95 5.44 1.13 5.26 130
10.77 4.64 8,332 0.95 5.55 1.12 5.38 108
10.98 12.78 7,853 0.86 6.14 1.19 5.81 106
$ 10.47 1.53%+ $ 12,503 1.70% 4.98% 1.89% 4.78% 28%
10.58 (3.48) 14,639 1.70 4.53 1.89 4.34 90
11.63 11.54 17,242 1.70 4.35 1.86 4.19 147
10.91 7.40 15,253 1.70 4.68 1.88 4.50 130
10.72 3.93 16,092 1.70 4.81 1.87 4.64 108
10.94 11.75 7,280 1.70 5.12 1.94 4.88 106
$ 10.53 1.62%+ $ 405 1.44% 5.22% 1.89% 4.77% 28%
10.64 (2.75)+ 719 1.35 5.09 1.89 4.55 90
$ 10.54 2.01%+ $1,255,149 0.70% 5.98% 0.89% 5.79% 28%
10.65 (2.44) 1,239,900 0.70 5.57 0.89 5.38 90
11.69 12.66 1,210,661 0.70 5.35 0.86 5.19 147
10.96 8.54 705,719 0.70 5.71 0.88 5.53 130
10.76 4.90 391,211 0.70 5.81 0.87 5.64 108
10.97 12.86 289,816 0.70 6.28 0.94 6.04 106
$ 9.66 1.31%+ $ 33,494 0.85% 5.54% 1.02% 5.37% 45%
9.80 (0.20) 34,365 0.85 5.01 1.12 4.74 65
10.45 10.35 49,130 0.70 5.22 1.11 4.81 166
10.00 7.19 2,484 0.70 5.51 1.17 5.04 165
9.93 5.63 2,213 0.70 5.43 1.13 5.00 161
9.94 10.51 2,437 0.70 5.97 1.19 5.48 69
$ 9.63 1.39%+ $ 425,693 0.70% 5.70% 0.87% 5.53% 45%
9.77 (0.06) 348,864 0.70 5.17 0.87 5.00 65
10.42 10.27 430,672 0.70 5.24 0.86 5.08 166
9.98 6.98 324,250 0.70 5.51 0.92 5.29 165
9.93 5.63 98,702 0.70 5.45 0.88 5.27 161
9.94 10.51 88,375 0.70 5.94 0.94 5.70 69
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
FIRST AMERICAN FUNDS SEMIANNUAL REPORT 2000 25)
<PAGE>
FINANCIAL HIGHLIGHTS For a share outstanding, throughout the periods ended
September 30, unless otherwise indicated.
<TABLE>
<CAPTION>
REALIZED AND
NET ASSET UNREALIZED DIVIDENDS
VALUE NET GAINS OR FROM NET DISTRIBUTIONS
BEGINNING INVESTMENT (LOSSES) ON INVESTMENT FROM
OF PERIOD INCOME INVESTMENTS INCOME CAPITAL GAINS
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
LIMITED TERM INCOME FUND
Class A
2000* (unaudited) $ 9.86 $ 0.26 $ (0.03) $ (0.27) $ --
1999 10.04 0.52 (0.18) (0.52) --
1998 9.94 0.53 0.10 (0.53) --
1997 9.91 0.56 0.03 (0.56) --
1996 9.92 0.58 (0.01) (0.58) --
1995 9.85 0.56 0.07 (0.56) --
Class Y
2000* (unaudited) $ 9.87 $ 0.26 $ (0.04) $ (0.27) $ --
1999 10.04 0.52 (0.17) (0.52) --
1998 9.94 0.53 0.10 (0.53) --
1997 9.91 0.56 0.03 (0.56) --
1996 9.92 0.58 (0.01) (0.58) --
1995 9.85 0.56 0.07 (0.56) --
STRATEGIC INCOME FUND
Class A
2000*(3) (unaudited) $ 9.09 $ 0.37 $ (0.10) $ (0.36) $ --
1999(3) 9.27 0.78 (0.25) (0.71) --
1998(1) 10.00 0.13 (0.75) (0.11) --
Class B
2000*(3) (unaudited) $ 9.07 $ 0.33 $ (0.10) $ (0.33) $ --
1999(3) 9.27 0.71 (0.26) (0.65) --
1998(1) 10.00 0.09 (0.71) (0.11) --
Class C
2000*(3) (unaudited) $ 9.08 $ 0.34 $ (0.08) $ (0.35) $ --
1999(2)(3) 9.57 0.45 (0.47) (0.47) --
Class Y
2000*(3) (unaudited) $ 9.09 $ 0.38 $ (0.09) $ (0.38) $ --
1999(3) 9.27 0.80 (0.25) (0.73) --
1998(1) 10.00 0.14 (0.75) (0.12) --
- ----------------------------------------------------------------------------------------------------
</TABLE>
+Returns are for the period indicated and have not been annualized.
*For the six month period ended March 31. All ratios for the period have been
annualized.
(A) Excluding sales charges.
(1) Commenced operations July 24, 1998. All ratios for the period have been
annualized.
(2) Class C shares have been offered since February 1, 1999. All ratios for the
period have been annualized.
(3) Per share data calculated using average shares outstanding method.
The accompanying notes are an integral part of the financial statements.
(26 FIRST AMERICAN FUNDS SEMIANNUAL REPORT 2000
<PAGE>
<TABLE>
<CAPTION>
RATIO OF NET
RATIO OF INVESTMENT
RATIO OF NET EXPENSES TO INCOME TO
NET ASSET RATIO OF INVESTMENT AVERAGE AVERAGE
VALUE NET ASSETS EXPENSES TO INCOME TO NET ASSETS NET ASSETS PORTFOLIO
END OF TOTAL END OF AVERAGE AVERAGE (EXCLUDING (EXCLUDING TURNOVER
PERIOD RETURN (A) PERIOD (000) NET ASSETS NET ASSETS WAIVERS) WAIVERS) RATE
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 9.82 2.32%+ $ 89,158 0.59% 6.12% 1.19% 5.52% 44%
9.86 3.43 5,318 0.60 5.16 1.12 4.64 65
10.04 6.55 5,036 0.60 5.33 1.12 4.81 112
9.94 6.09 7,152 0.60 5.61 1.15 5.06 147
9.91 5.93 7,627 0.60 5.80 1.09 5.31 61
9.92 6.57 9,977 0.60 5.60 1.22 4.98 120
$ 9.82 2.23%+ $112,835 0.55% 5.66% 0.96% 5.25% 44%
9.87 3.53 119,522 0.60 5.15 0.87 4.88 65
10.04 6.55 173,136 0.60 5.33 0.87 5.06 112
9.94 6.09 184,368 0.60 5.60 0.90 5.30 147
9.91 5.93 93,588 0.60 5.80 0.84 5.56 61
9.92 6.57 111,439 0.60 5.67 0.97 5.30 120
$ 9.00 3.05%+ $ 23,966 1.15% 8.09% 1.17% 8.07% 34%
9.09 5.73 27,768 1.15 8.30 1.21 8.24 40
9.27 (6.17)+ 40,270 1.15 8.19 1.30 8.04 61
$ 8.97 2.58%+ $ 1,132 1.90% 7.35% 1.92% 7.33% 34%
9.07 4.90 788 1.90 7.56 1.96 7.50 40
9.27 (6.19)+ 114 1.90 7.44 2.05 7.29 61
$ 8.99 2.86%+ $ 1,389 1.65% 7.59% 1.65% 7.59% 34%
9.08 (0.28)+ 1,058 1.55 7.34 1.90 6.99 40
$ 9.00 3.18%+ $227,218 0.90% 8.32% 0.92% 8.30% 34%
9.09 5.96 184,666 0.90 8.56 0.93 8.53 40
9.27 (6.13)+ 54,491 0.90 8.44 1.05 8.29 61
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
FIRST AMERICAN FUNDS SEMIANNUAL REPORT 2000 27)
<PAGE>
NOTES TO FINANCIAL STATEMENTS March 31, 2000 (unaudited)
1 > ORGANIZATION
The First American Corporate Bond Fund, Fixed Income Fund, Intermediate
Term Income Fund, Limited Term Income Fund, and Strategic Income Fund are
funds offered by First American Investment Funds, Inc. ("FAIF") (each a
"Fund" collectively, "the Funds"). Other funds that are offered by FAIF but
are not included in this report are: Arizona Tax Free Fund, California
Intermediate Tax Free Fund, California Tax Free Fund, Colorado Intermediate
Tax Free Fund, Colorado Tax Free Fund, Intermediate Tax Free Fund,
Minnesota Intermediate Tax Free Fund, Minnesota Tax Free Fund, Oregon
Intermediate Tax Free Fund, Tax Free Fund, Balanced Fund, Equity Income
Fund, Equity Index Fund, Large Cap Value Fund, Large Cap Growth Fund, Mid
Cap Growth Fund, Mid Cap Value Fund, Small Cap Value Fund, Small Cap Growth
Fund, Emerging Markets Fund, International Index Fund, International Fund,
Health Sciences Fund, Real Estate Securities Fund and Technology Fund. FAIF
is registered under the Investment Company Act of 1940, as amended, as an
open-end management investment company. The FAIF articles of incorporation
permit the Board of Directors to create additional funds in the future.
These FAIF Funds offer Class A and Class Y shares. Corporate Bond Fund,
Fixed Income Fund and Strategic Income Fund also offer Class B and Class C
shares. Class A shares are sold with a front-end sales charge. Class B
shares are subject to a contingent deferred sales charge for six years and
automatically convert to Class A shares after eight years. Class C shares
are sold with a front-end sales charge and are subject to a contingent
deferred sales charge for 18 months. Class Y shares have no sales charge
and are offered only to qualifying institutional investors.
The Funds' prospectuses provide a description of each Fund's investment
objectives, policies and strategies. All classes of shares have identical
voting, dividend, liquidation and other rights, and the same terms and
conditions, except that the level of distribution fees charged may differ
among classes.
2 > SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies followed by the Funds are as follows:
SECURITY VALUATION - Security valuations for FAIF Fund investments are
furnished by an independent pricing service that has been approved by the
Board of Directors. Investments in equity securities that are traded on a
national securities exchange (or reported on the NASDAQ national market
system) are stated at the last quoted sales price if readily available for
such securities on each business day. Other equity securities traded in the
over-the-counter market and listed equity securities for which no sale was
reported on that date are stated at the last quoted bid price. Debt
obligations exceeding sixty days to maturity are valued by an independent
pricing service. The pricing service may employ methodologies that utilize
actual market transactions, broker-dealer supplied valuations, or other
electronic data processing techniques. These techniques generally consider
such factors as yields or prices of bonds of comparable quality, type of
issue, coupon, maturity, ratings and general market conditions. Securities
for which prices are not available from an independent pricing service but
where an active market exists are valued using market quotations obtained
from one or more dealers that make markets in the securities or from a
widely-used quotation system. When market quotations are not readily
available, securities are valued at fair value as determined in good faith
by procedures established and approved by the Board of Directors. Debt
obligations with sixty days or less remaining until maturity may be valued
at their amortized cost. Foreign securities are valued at the closing
prices on the principal exchanges on which they trade. The prices for
foreign securities are reported in local currency and converted to U.S.
dollars using currency exchange rates. Exchange rates are provided daily by
recognized independent pricing agents.
SECURITY TRANSACTIONS AND INVESTMENT INCOME - The Funds record security
transactions on the trade date of the security purchase or sale. Dividend
income is recorded on the ex-dividend date. Interest income, including
amortization of bond premium and discount, is recorded on the accrual
basis. Security gains and losses are determined on the basis of identified
cost, which is the same basis used for Federal income tax purposes.
(28 FIRST AMERICAN FUNDS SEMIANNUAL REPORT 2000
<PAGE>
DISTRIBUTIONS TO SHAREHOLDERS - The Funds declare and pay income dividends
monthly.
Any net realized capital gains on sales of securities for a Fund are
distributed to shareholders at least annually.
FEDERAL TAXES - It is each Fund's intention to continue to qualify as a
regulated investment company and distribute all of its taxable income.
Accordingly, no provision for Federal income taxes is required. For Federal
income tax purposes, required distributions related to realized gains from
security transactions are computed as of September 30th and October 31st.
Net investment income and net realized gains (losses) may differ for
financial statement and tax purposes because of temporary or permanent
book/tax differences. These differences are primarily due to losses
deferred due to wash sales and foreign currency gains and losses.
The character of distributions made during the year from net investment
income or net realized gains may differ from its ultimate characterization
for Federal income tax purposes. In addition, due to the timing of dividend
distributions, the fiscal year in which the amounts are distributed may
differ from the year that the income or realized gains (losses) were
recorded by the Fund. To the extent these differences are permanent,
adjustments are made to the appropriate equity accounts in the period that
the difference arises.
As of March 31, 2000, the Strategic Income Fund reclassified ($293,000)
from accumulated net realized foreign exchange loss to undistributed net
investment income. The reclassification had no effect on net assets or net
asset values per share.
FOREIGN CURRENCY TRANSLATION - The books and records of the Strategic
Income Fund are maintained in U.S. dollars on the following bases:
* market value of investment securities, assets and liabilities at the
current rate of exchange; and
* purchases and sales of investment securities, income and expenses at
the relevant rates of exchange prevailing on the respective dates of
such transactions.
The Strategic Income Fund does not isolate the portion of gains and losses
on investments in equity securities that is due to changes in the foreign
exchange rates from that which is due to changes in market prices of equity
securities. The Strategic Income Fund does isolate the effect of
fluctuations in foreign currency rates when determining the gain or loss
upon sale or maturity of foreign currency denominated debt obligations
pursuant to the Federal income tax regulations. Such amounts are
categorized as foreign currency gain or loss for both financial reporting
and income tax reporting purposes.
The Strategic Income Fund reports certain foreign currency related
transactions as components of realized gains for financial reporting
purposes, whereas such components are treated as ordinary income for
Federal income tax purposes.
EXPENSES - Expenses that are directly related to one of the Funds are
charged directly to that Fund. Other operating expenses are allocated to
the Funds on the basis of relative net assets. Class specific expenses,
such as the 12b-1 fees, are borne by that class. Income, other expenses and
realized and unrealized gains and losses of a Fund are allocated to the
respective class on the basis of the relative net assets each day.
SECURITIES LENDING - Each Fund may lend up to one-third of the value of its
total assets to broker-dealers, banks or other institutional borrowers of
securities in order to earn additional income. Each Fund's policy is to
maintain collateral in the form of cash, United States Government
securities or other high grade debt obligations equal to at least 100% of
the value of securities loaned. The collateral is then marked to market
daily until the securities are returned.
SECURITIES PURCHASED ON A WHEN-ISSUED BASIS - Delivery and payment for
securities which have been purchased by a Fund on a forward commitment or
when-issued basis can take place up to a month or more after the
transaction date. During this period, such securities are subject to market
fluctuations and the portfolio maintains, in a segregated account with its
custodian, assets with a market value equal to or greater than the amount
of its purchase commitments. The purchase of securities on a when-issued or
forward commitment basis may increase the volatility of the Fund's net
asset value if the Fund makes such purchases while remaining substantially
fully invested. At March 31, 2000, Fixed Income Fund and Strategic Income
Fund had outstanding when-issued commitments of $23,594,062 and $1,965,620,
respectively.
In connection with the ability to purchase securities on a when-issued
basis, the Fixed Income, Intermediate Term Income and Strategic Income
Funds may enter into dollar rolls in which the Fund sells securities
purchased on a forward commitment basis and simultaneously contracts with a
counterparty to repurchase similar (same type,
FIRST AMERICAN FUNDS SEMIANNUAL REPORT 2000 29)
<PAGE>
NOTES TO FINANCIAL STATEMENTS March 31, 2000 (unaudited)
coupon, and maturity) but not identical securities on a specified future
date. Dollar rolls are considered a form of leverage. As an inducement to
"roll over" its purchase commitments, the Fund receives negotiated fees.
For the six months ended March 31, 2000, the fees earned by each Fund are
as follows:
FEE INCOME EARNED
---------------------------------------------------------------------------
Fixed Income Fund $52,017
Strategic Income Fund $28,513
---------------------------------------------------------------------------
ILLIQUID OR RESTRICTED SECURITIES - As of March 31, 2000, investments in
securities in the Strategic Income Fund included issues that are illiquid
or restricted. Restricted securities are often purchased in private
placement transactions, are not registered under the Securities Act of
1933, may have contractual restrictions on resale, and are valued under
methods approved by the Board of Trustees as reflecting fair value. A
security may also be considered illiquid if it lacks a readily available
market or if its valuation has not changed for a certain period of time.
The Fund intends to invest no more than 10% of its net assets (determined
at the time of purchase and reviewed periodically) in illiquid or
restricted securities. Certain restricted securities, eligible for resale
to qualified institutional investors, are not subject to that limitation.
The aggregate value of illiquid or restricted securities subject to this
limitation as of March 31, 2000 was $10,814,000, which represents 4.26% of
the Fund's net assets. Information concerning restricted securities is as
follows:
DATES
SECURITY PAR ACQUIRED COST BASIS
---------------------------------------------------------------------------
Acme Television $ 500,000 9/97-3/99 $ 410,892
AEI Holdings 550,000 9/98-3/99 533,813
AEI Resources 150,000 12/98 150,000
Aircraft Finance Trust 1,000,000 2/00 917,422
Chancellor Media Corp. 50,000 12/97 55,313
City of Buenos Aires 1,900,000 3/00 1,781,250
Cumulus Media 200,000 6/98-8/98 206,375
Glenoit 100,000 3/97-8/97 103,155
Hyundai Semiconductor 1,000,000 2/00 900,625
Level 3 Communications 2,500,000 3/00 2,521,875
MediaNews Group 500 1/00 --
Nextel Communications 1,400,000 2/98-6/99 874,707
NextLink Communications 100,000 2/98 99,798
Nuevo Grupo Lusacell 1,000,000 2/00 1,065,000
Qwest Communications 600,000 10/97-9/98 424,606
Republic Technologies 250,000 8/99 246,775
United International Holdings 1,050,000 2/98-10/99 656,444
Wesco Distribution 475,000 5/98-7/99 470,694
---------------------------------------------------------------------------
USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS - The
preparation of financial statements, in conformity with generally accepted
accounting principles, requires management to make estimates and
assumptions that affect the reported amount of net assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported results of operations during the
reporting period. Actual results could differ from those estimates.
3 > FEES AND EXPENSES
ADVISORY FEES - Pursuant to an investment advisory agreement (the
"Agreement"), First American Asset Management (the "Advisor"), a division
of U.S. Bank National Association ("U.S. Bank") manages each Fund's assets
and furnishes related office facilities, equipment, research and personnel.
The Agreement requires each Fund to pay the Advisor a monthly fee based
upon average daily net assets. The fee for each Fund is equal to an annual
rate of 0.70% of the average daily net assets. The Advisor intends to waive
fees during the current fiscal year so that total fund operating expenses
do not exceed expense limitations. Fee waivers may be discontinued at any
time.
The Funds may invest in First American Funds, Inc. ("FAF"), subject to
certain limitations. The terms of such transactions are identical to those
of non-related entities except that, to avoid duplicative investment
advisory fees, the Advisor reimburses each FAIF Fund an amount equal to the
investment advisory fee earned by FAF related to such investments.
SUB-ADVISOR FEES - Federated Global Research Corp., a subsidiary of
Federated Investors, Inc. serves as sub-advisor to the Strategic Income
Fund under an agreement with the Advisor (the "Sub-Advisory Agreement").
For their services under the Sub-Advisory agreement, they are paid a
monthly fee by the Advisor calculated on an annual basis equal to 0.20% of
the first $25 million of the Fund's average daily net assets, 0.165% of the
Fund's average daily net assets in excess of $25 million up to $50 million,
0.13% of the Fund's average daily net assets in excess of $50 million up to
$100 million and 0.105% of the Fund's average daily net assets in excess of
$100 million.
ADMINISTRATION FEES - SEI Investments Management Corporation ("SIMC")
provided administrative services, including certain accounting, legal, and
shareholder services to the First American Family of Funds from October 1,
1999 through December 31, 1999. Effective January 1, 2000 U.S. Bank was
appointed as the administrator and began providing administrative services
to the First American Family of Funds. Under both arrangements, the Funds
are charged an annual rate of 0.12% of each FAIF Fund's average daily net
assets, with a minimum annual
(30 FIRST AMERICAN FUNDS SEMIANNUAL REPORT 2000
<PAGE>
fee of $50,000. To the extent that aggregate net assets of the First
American Family of Funds exceed $8 billion, the annual rate for each FAIF
Fund is reduced to 0.105% of their relative share of excess net assets.
Fees are computed daily and paid monthly.
SUB-ADMINISTRATION FEES - U.S. Bank assisted SIMC and provided
sub-administration services for the Funds from October 1, 1999 through
December 31, 1999. For these services SIMC compensates U.S. Bank, as
sub-administrator, monthly at an annual rate of up to 0.05% of each Fund's
daily net assets. The fees for each Fund from October 1, 1999 through
December 31, 1999 were approximately 0.017% of average daily net assets.
Under this arrangement, SIMC paid U.S. Bank $2,646,000 in aggregate for
this three month period.
Effective January 1, 2000 SIMC was appointed sub-administrator and began
assisting U.S. Bank in providing sub-administration services for the Funds.
For these services, U.S. Bank compensates SIMC monthly at an annual rate
equal to 0.05% of aggregate average daily net assets of FAIF. In addition,
SIMC also receives 0.015% on assets up to $34.5 billion, 0.0075% on the
next $25.5 billion and 0.005% on assets over $60 billion for all Funds.
There is a minimum $50,000 per Fund fee (the oldest 38 Funds are excluded).
U.S. Bank paid SIMC $2,820,000 in aggregate from January 1, 2000 through
March 31, 2000 for the First American Family of Funds. For the Funds
included in this semi-annual report the amounts paid to U.S. Bank and SIMC
for their respective periods were as follows (000):
U.S. BANK SIMC
---------------------------------------------------------------------------
Corporate Bond Fund $ -- $ 4
Fixed Income Fund 114 222
Intermediate Term Income Fund 44 79
Limited Term Income Fund 18 34
Strategic Income Fund 18 39
---------------------------------------------------------------------------
CUSTODIAN FEES - Through a separate contractual agreement, U.S. Bank serves
as the Funds' custodian. The fee for each Fund is equal to an annual rate
of 0.03% of average daily net assets.
DISTRIBUTION FEES - SEI Investments Distribution Co. ("SIDCO") serves as
distributor of the Funds. Under the distribution plan, each of the Funds
pays SIDCO a monthly distribution fee equal to an annual rate of 0.25% of
each Fund's average daily net assets of the Class A shares, 1.00% of the
Class B shares, and 1.00% of the Class C shares, which may be used by SIDCO
to provide compensation for sales support and distribution activities.
Intermediate Term Income Fund waives 0.10% of Class A distribution fees.
Limited Term Income Fund waives 0.25% of Class A distribution fees. Fixed
Income Fund and Strategic Income Fund waived 0.35% of Class C distribution
fees through January 31, 2000. No distribution fees are paid by Class Y
shares. Under the agreement, SIDCO paid to U.S. Bank and its affiliates the
following amounts for the funds included in this semiannual report for the
six months ended March 31, 2000 (000):
U.S. BANK
NATIONAL U.S. BANCORP U.S. BANK
ASSOCIATION PIPER JAFFRAY TRUST
---------------------------------------------------------------------------
Corporate Bond Fund $ -- $ -- $ --
Fixed Income Fund 17 48 1
Intermediate Term
Income Fund 1 6 --
Limited Term Income Fund -- -- --
Strategic Income Fund 1 7 --
---------------------------------------------------------------------------
TRANSFER AGENT FEES - From October 1, 1999 to December 31, 1999 DST
Systems, Inc. provided transfer agency services for the Funds. Effective
January 1, 2000 U.S. Bank was appointed as transfer agent and dividend
disbursement agent. As the servicing agent U.S. Bank was paid $4,252,000 in
aggregate for the six month period ended March 31, 2000. For the six month
period ended March 31, 2000 fees paid to U.S. Bank for the funds included
in this report were as follows (000):
---------------------------------------------------------------------------
Corporate Bond Fund $ 9
Fixed Income Fund 129
Intermediate Term Income Fund 21
Limited Term Income Fund 71
Strategic Income Fund 34
---------------------------------------------------------------------------
FIRST AMERICAN FUNDS SEMIANNUAL REPORT 2000 31)
<PAGE>
NOTES TO FINANCIAL STATEMENTS March 31, 2000 (unaudited)
OTHER FEES - In addition to the investment advisory and management fees,
custodian fees, distribution fees, administrator and transfer agent fees,
each Fund is responsible for paying most other operating expenses including
organization costs, fees and expenses of outside directors, registration
fees, printing shareholder reports, legal, auditing, insurance and other
miscellaneous expenses.
For the six months ended March 31, 2000, legal fees and expenses were paid
to a law firm of which the Secretary of the Funds is a partner.
SALES CHARGES - A Contingent Deferred Sales Charge ("CDSC") is imposed on
redemptions made in Class B shares. The CDSC varies depending on the number
of years from time of payment for the purchase of Class B shares until the
redemption of such shares.
CONTINGENT DEFERRED SALES CHARGE
AS A PERCENTAGE OF DOLLAR
YEAR SINCE PURCHASE AMOUNT SUBJECT TO CHARGE
---------------------------------------------------------------------------
First 5.00%
Second 5.00%
Third 4.00%
Fourth 3.00%
Fifth 2.00%
Sixth 1.00%
Seventh 0.00%
Eighth 0.00%
---------------------------------------------------------------------------
Class B shares will automatically convert to Class A shares eight years
after the first day of the month shares are purchased.
A CDSC of 1.00% is imposed on redemptions made in Class C shares for the
first eighteen months.
The CDSC for Class B and Class C shares is imposed on the value of the
purchased shares, or the value at the time of redemption, whichever is
less.
For the six months ended March 31, 2000, sales charges retained by SIDCO
for distributing the First American Family of Funds' shares were
approximately $118,000.
(32 FIRST AMERICAN FUNDS SEMIANNUAL REPORT 2000
<PAGE>
4 > CAPITAL SHARE TRANSACTIONS
Capital share transactions for the funds were as follows (000):
<TABLE>
<CAPTION>
CORPORATE FIXED INCOME
BOND FUND(1) FUND
- -----------------------------------------------------------------------------------------------
2/1/00 10/1/99 10/1/98
to to to
3/31/00 3/31/00 9/30/99
- -----------------------------------------------------------------------------------------------
(unaudited) (unaudited)
<S> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Class A:
Shares issued 62 1,103 1,748
Shares issued in lieu of cash distributions -- 243 478
Shares redeemed -- (3,073) (6,904)
- -----------------------------------------------------------------------------------------------
TOTAL CLASS A TRANSACTIONS 62 (1,727) (4,678)
===============================================================================================
Class B:
Shares issued 1 94 394
Shares issued in lieu of cash distributions -- 28 77
Shares redeemed -- (311) (570)
- -----------------------------------------------------------------------------------------------
TOTAL CLASS B TRANSACTIONS 1 (189) (99)
===============================================================================================
Class C:
Shares issued 4 5 69
Shares issued in lieu of cash distributions -- 1 1
Shares redeemed -- (36) (2)
- -----------------------------------------------------------------------------------------------
TOTAL CLASS C TRANSACTIONS 4 (30) 68
===============================================================================================
Class Y:
Shares issued 4,431 19,047 38,033
Shares issued in connection with acquisition of
Piper Common Trust Fund -- -- 308
Shares issued in lieu of cash distributions -- 1,227 4,134
Shares redeemed -- (17,614) (29,568)
- -----------------------------------------------------------------------------------------------
TOTAL CLASS Y TRANSACTIONS 4,431 2,660 12,907
===============================================================================================
NET INCREASE (DECREASE) FROM SHARE TRANSACTIONS 4,498 714 8,198
===============================================================================================
</TABLE>
<TABLE>
<CAPTION>
INTERMEDIATE TERM LIMITED TERM STRATEGIC
INCOME FUND INCOME FUND INCOME FUND
- -----------------------------------------------------------------------------------------------------------------------------------
10/1/99 10/1/98 10/1/99 10/1/98 10/1/99 10/1/98
to to to to to to
3/31/00 9/30/99 3/31/00 9/30/99 3/31/00 9/30/99
- -----------------------------------------------------------------------------------------------------------------------------------
(unaudited) (unaudited) (unaudited)
<S> <C> <C> <C> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Class A:
Shares issued 552 388 159 208 107 183
Shares issued in connection with the acquisition of
Intermediate Government Bond Fund and Adjustable
Rate Mortgage Fund, respectively 493 -- 8,781 -- -- --
Shares issued in lieu of cash distributions 76 149 35 24 43 121
Shares redeemed (1,160) (1,732) (431) (195) (542) (1,590)
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL CLASS A TRANSACTIONS (39) (1,195) 8,544 37 (392) (1,286)
===================================================================================================================================
Class B:
Shares issued -- -- -- -- 51 79
Shares issued in lieu of cash distributions -- -- -- -- 3 2
Shares redeemed -- -- -- -- (15) (6)
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL CLASS B TRANSACTIONS -- -- -- -- 39 75
===================================================================================================================================
Class C:
Shares issued -- -- -- -- 44 116
Shares issued in lieu of cash distributions -- -- -- -- 4 1
Shares redeemed -- -- -- -- (9) (1)
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL CLASS C TRANSACTIONS -- -- -- -- 39 116
===================================================================================================================================
Class Y:
Shares issued 4,280 7,415 1,777 2,958 5,796 15,739
Shares issued in connection with the acquisition of
Intermediate Government Bond Fund and Adjustable
Rate Mortgage Fund, respectively 13,376 -- 44 -- -- --
Shares issued in lieu of cash distributions 462 1,131 100 273 245 707
Shares redeemed (9,627) (14,170) (2,542) (8,363) (1,107) (2,010)
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL CLASS Y TRANSACTIONS 8,491 (5,624) (621) (5,132) 4,934 14,436
===================================================================================================================================
NET INCREASE (DECREASE) FROM SHARE TRANSACTIONS 8,452 (6,819) 7,923 (5,095) 4,620 13,341
===================================================================================================================================
</TABLE>
(1) Commenced operations on February 1, 2000.
FIRST AMERICAN FUNDS SEMIANNUAL REPORT 2000 33)
<PAGE>
NOTES TO FINANCIAL STATEMENTS March 31, 2000 (unaudited)
5 > INVESTMENT SECURITY TRANSACTIONS
During the six months ended March 31, 2000, purchases of securities and
proceeds from sales of securities, other than temporary investments in
short-term securities, were as follows (000):
U.S. GOVERNMENT OTHER INVESTMENT
SECURITIES SECURITIES
---------------------------------------------------------------------------
PURCHASES SALES PURCHASES SALES
------------------------------------------------------
Corporate Bond Fund $ 13,616 $ 11,700 $ 41,749 $ 1,946
Fixed Income Fund 237,320 261,806 104,882 77,904
Intermediate Term
Income Fund 170,810 104,802 76,335 54,614
Limited Term
Income Fund 106,638 20,325 46,874 25,854
Strategic Income Fund 19,731 9,605 79,070 59,690
---------------------------------------------------------------------------
Including dollar rolls for Fixed Income Fund and Strategic Income Fund,
purchases of U.S. government securities aggregated (000) $23,576 and
$37,205, and sales of U.S. government securities aggregated (000) $23,422
and $25,129, respectively.
At March 31, 2000, the total cost of securities for Federal income tax
purposes was not materially different from amounts reported for financial
reporting purposes. The aggregate gross unrealized appreciation and
depreciation for securities held by the Funds at March 31, 2000, is as
follows (000):
AGGREGATE GROSS AGGREGATE GROSS
APPRECIATION DEPRECIATION NET
--------------------------------------------------------------------------
Corporate Bond Fund $ 467 $ (252) $ 215
Fixed Income Fund 7,582 (41,518) (33,936)
Intermediate Term
Income Fund 888 (11,095) (10,207)
Limited Term Income Fund 131 (1,808) (1,676)
Strategic Income Fund 2,835 (12,619) (9,783)
--------------------------------------------------------------------------
6 > SECURITIES LENDING TRANSACTIONS
In order to generate additional income, each Fund may lend portfolio
securities representing up to one-third of the value of total assets (which
includes collateral received for securities on loan) to broker dealers,
banks, or other institutional borrowers of securities. As with other
extensions of credit, there may be risks of delay in recovery of the
securities or even loss of rights in the collateral should the borrower of
the security fail financially. The market value of the securities on loan
at March 31, 2000, the collateral purchased with cash received and held at
March 31, 2000, with respect to such loans, and income generated during the
period from the program were as follows (000):
MARKET VALUE OF INCOME RECEIVED
FUND LOANED SECURITIES FROM SECURITIES LENDING
---------------------------------------------------------------------------
Corporate Bond $ 1,967 $ 61
Fixed Income 584,476 358
Intermediate Term Income 200,291 101
Limited Term Income 54,011 14
Strategic Income 32,517 20
---------------------------------------------------------------------------
MARKET VALUE OF COLLATERAL PURCHASED WITH CASH RECEIVED
---------------------------------------------------------
REPURCHASE MONEY MARKET OTHER FIXED
FUND AGREEMENTS INSTRUMENT INCOME SECURITIES TOTAL
---------------------------------------------------------------------------
Corporate Bond $ 1,308 $ 5 $ 721 $ 2,034
Fixed Income 388,609 1,517 214,343 604,469
Intermediate Term
Income 133,171 520 73,452 207,143
Limited Term
Income 35,911 140 19,807 55,858
Strategic Income 21,620 84 11,925 33,629
---------------------------------------------------------------------------
U.S. Bank acts as the securities lending agent in transactions involving
the lending of portfolio securities on behalf of the Funds. For these
services U.S. Bank received $1,286,000 in aggregate for the Funds included
in this report for the six months ended March 31, 2000, securities lending
fees were as follows (000):
---------------------------------------------------------------------------
Corporate Bond Fund $ 1
Fixed Income 251
Intermediate Term Income Fund 70
Limited Term Income Fund 10
Strategic Income Fund 13
---------------------------------------------------------------------------
7 > COMMON TRUST FUND CONVERSIONS
On July 23, 1999, the Piper Common Bond Fund was converted into the Fixed
Income Fund. The assets, which consisted of securities and related
receivables, were converted on a tax free basis. 308,392 shares of Class Y
of the Fixed Income Fund were issued at the time of conversion. The net
assets of the Piper Common Bond Fund and Fixed Income Fund immediately
before the conversion were $3,299,801 and $1,399,655,638 respectively.
Included in the net assets of the Piper Common Bond Fund were ($32,848) of
unrealized losses.
(34 FIRST AMERICAN FUNDS SEMIANNUAL REPORT 2000
<PAGE>
8 > FUND MERGER
The Board of Directors and shareholders of Intermediate Government Bond and
Adjustable Rate Mortgage Funds approved a reorganization into Intermediate
Term Income and Limited Term Income Funds, respectively, at the close of
business on February 25, 2000.
Under the Agreement and Plan of Reorganization, Class A and Class Y shares
of Intermediate Government Bond and Adjustable Rate Mortgage Funds were
exchanged for shares of the Class A and Class Y shares of the Intermediate
Term Income and Limited Term Income Funds, respectively on a tax free
basis.
The net assets before the reorganization and shares issued and redeemed
were as follows:
SHARES SHARES
FUND NET ASSETS ISSUED REDEEMED
---------------------------------------------------------------------------
Intermediate Term Income 345,964,510 13,868,921 15,017,432
Limited Term Income 119,910,324 8,824,931 10,868,460
---------------------------------------------------------------------------
Included in the net assets of the redeeming funds were the following
components:
<TABLE>
<CAPTION>
UNDISTRIBUTED
(DISTRIBUTIONS
IN EXCESS OF) ACCUMULATED
PAID IN NET INVESTMENT REALIZED NET UNREALIZED NET
FUND CAPITAL INCOME (LOSS) DEPRECIATION ASSETS
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Intermediate
Government
Bond $136,352,016 $ (28,441) $ (252,091) $ (2,740,353) $133,331,131
Adjustable Rate
Mortgage 233,889,892 (43,651) (146,508,216) (674,084) 86,663,942
--------------------------------------------------------------------------------------------
</TABLE>
9 > CONCENTRATION OF RISKS
The Strategic Income Fund is subject to special risks associated with
investing in foreign securities and to a decline in net asset value
resulting from changes in exchange rates between the United States dollar
and foreign currencies. Strategic Income Fund is also subject to risks
associated with investing in securities issued by issuers in emerging
market countries. Because of the special risks associated with foreign
investing, the Strategic Income Fund may be subject to greater volatility
than most mutual funds which invest primarily in domestic securities.
Strategic Income Fund also invests in lower-rated (i.e., rated Ba or lower
by Moody's or BB or lower by Standard & Poor's) corporate and foreign debt
obligations, which are commonly referred to as "junk bonds". Lower-rated
securities will usually offer higher yields than higher-rated securities.
However, there is more risk associated with these investments. These
lower-rated bonds may be more susceptible to real or perceived adverse
economic conditions than investment grade bonds. Lower-rated securities
tend to have more price volatility and carry more risk to principal than
higher-rated securities.
The summary of credit quality ratings for the securities held by the
Strategic Income Fund as of March 31, 2000, are as follows:
STANDARD & POORS: MOODY'S:
----------------------------------------------------------------
AAA 26.66% Aaa 32.61%
AA 1.68% Aa 1.62%
A 3.52% A 4.04%
BBB 3.93% Baa 5.87%
BB 19.97% Ba 13.49%
B 27.00% B 33.96%
CCC 1.05% Caa 1.32%
Not Rated 16.19% Not Rated 7.09%
------- -------
100.00% 100.00%
10 > LINE OF CREDIT
Pursuant to a commitment letter dated September 7, 1999, Citibank N.A.
provides a revolving line of credit to FAIF for short term or emergency
purposes. The loans are for the respective benefit of and repayable from
the respective assets of each Fund. The aggregate principal amount of all
borrowings may not exceed $100,000,000 and borrowings must be in the
minimum principal amount of $1,000,000 and integral multiple amounts of
$1,000,000 for each Fund. At the Fund's option Citibank is paid either a
base rate or the Federal Funds rate on the amount out on loan. There is a
commitment fee on the unused portion of the line of credit. The commitment
fee is calculated at 8.0 basis points on the unutilized portion of the
facility. Fees are accrued daily and paid quarterly to Citibank N.A. There
were no borrowings under the line of credit during the six month period
ended March 31, 2000.
FIRST AMERICAN FUNDS SEMIANNUAL REPORT 2000 35)
<PAGE>
NOTICE TO SHAREHOLDERS
INVESTMENT STRATEGIES - EFFECTIVE MATURITY
The funds (except Strategic Income Fund) recently updated their
prospectuses to clarify that the advisor manages the portfolios using
effective maturities of securities rather than stated or final maturities.
Effective maturity differs from actual stated or final maturity, which may
be substantially longer. In calculating effective maturity, the advisor
estimates the effect of expected principal payments and call provisions on
securities held in the portfolio. Effective maturity provides the advisor
with a better estimate of interest rate risk under normal market
conditions, but could result in more volatility in an environment of
adverse (rising) interest rates, rather than if the fund calculated average
weighted maturity based on the portfolio securities' actual stated or final
maturity.
SHAREHOLDER VOTING RESULTS
ADJUSTABLE RATE MORTGAGE SECURITIES AND INTERMEDIATE GOVERNMENT BOND FUNDS
On February 25, 2000, Adjustable Rate Mortgage Securities Fund merged into
Limited Term Income Fund and Intermediate Government Bond Fund merged into
Intermediate Term Income Fund. Following are the shareholder voting
results.
Adjustable Rate Mortgage Securities Fund
Class A shares
For 6,160,940 90.38% of shares voted 51.00% of shares outstanding
Against 221,678 3.25% of shares voted 1.83% of shares outstanding
Abstain 433,575 6.36% of shares voted 3.58% of shares outstanding
Adjustable Rate Mortgage Securities Fund
Class Y shares
For 35,364 100.00% of shares voted 63.00% of shares outstanding
Against 0 0.00% of shares voted 0.00% of shares outstanding
Abstain 0 0.00% of shares voted 0.00% of shares outstanding
Intermediate Government Bond Fund
Class A shares
For 299,896 99.75% of shares voted 51.03% of shares outstanding
Against 6,856 2.23% of shares voted 1.16% of shares outstanding
Abstain 27 0.00% of shares voted 0.00% of shares outstanding
Intermediate Government Bond Fund
Class Y shares
For 10,105,637 98.10% of shares voted 59.82% of shares outstanding
Against 114,273 1.10% of shares voted 0.67% of shares outstanding
Abstain 80,468 0.78% of shares voted 0.47% of shares outstanding
(36 FIRST AMERICAN FUNDS SEMIANNUAL REPORT 2000
<PAGE>
TRIBUTE TO DAVID T. BENNETT
As friends and colleagues, the Board of Directors of First American Funds
wishes to recognize David T. Bennett for the significant and lasting
contributions he made as a Director of First American Funds. His services
were cut short by his recent and untimely death following a 13-year battle
with cancer.
David was an attorney with the law firm of Gray, Plant, Mooty, Mooty &
Bennett since graduating from law school in 1967. David was also a
successful entrepreneur, owning controlling interests in Highland
Manufacturing, Kiefer Built, and USL Products. He also devoted countless
hours to numerous civic and charitable groups, including the Minneapolis
Institute of Arts, the Guthrie Theater, the Nature Conservancy, and
Dunwoody Institute.
His association with the funds began in 1987, when he joined the Board of
Directors of Piper Funds. First American Funds have been the beneficiary of
David's experience, wisdom, and insight during challenging periods of
change and growth. His knowledge of the industry and mutual fund board
experience were invaluable during the critical transition period
integrating the Piper and First American Fund Families. David's abilities
were particularly appreciated by the Audit, Pricing, and Board Development
Committees on which he served. The Directors with whom he served value
greatly their time spent together.
We gratefully and sincerely recognize David's contributions and extend our
sincere condolences to David's family and friends.
FIRST AMERICAN FUNDS SEMIANNUAL REPORT 2000 37)
<PAGE>
(This page has been left blank intentionally.)
<PAGE>
BOARD OF DIRECTORS FIRST AMERICAN INVESTMENT FUNDS, INC.
MR. ROBERT DAYTON
Director of First American Investment Funds, Inc.
Chief Executive Officer of Okabena Company
MR. ROGER GIBSON
Director of First American Investment Funds, Inc.
Vice President of North America-Mountain Region for United Airlines
MR. ANDREW HUNTER III
Director of First American Investment Funds, Inc.
Chairman of Hunter Keith Industries
MR. LEONARD KEDROWSKI
Director of First American Investment Funds, Inc.
Owner and President of Executive Management Consulting, Inc.
MR. JOHN MURPHY JR.
Director of First American Investment Funds, Inc.
Executive Vice President, U.S. Bancorp
MR. ROBERT SPIES
Director of First American Investment Funds, Inc.
Retired Vice President, U.S. Bank National Association
MR. JOSEPH STRAUSS
Director of First American Investment Funds, Inc.
Former Chairman of First American Investment Funds, Inc.
Owner and President of Strauss Management Company
MS. VIRGINIA STRINGER
Chairperson of First American Investment Funds, Inc.
Owner and President of Strategic Management Resources, Inc.
FIRST AMERICAN FUNDS SEMIANNUAL REPORT 2000
<PAGE>
[LOGO] FIRST AMERICAN FUNDS(R)
THE POWER OF DISCIPLINED INVESTING(R)
FIRST AMERICAN FUNDS
P.O. Box 1330
Minneapolis, MN 55440-1330
This report and the financial statements contained herein are submitted
for the general information of the shareholders of the corporation.
Shares in the funds are not deposits or obligations of, or guaranteed or
endorsed by, U.S. Bank or any of its affiliates. Such shares are also not
federally insured by the Federal Deposit Insurance Corporation, the
Federal Reserve Board, or any other agency. Investment in the shares
involves investment risk including loss of principal amount invested.
Past performance does not guarantee future results. The principal value
of an investment will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
INVESTMENT ADVISOR AND ADMINISTRATOR
FIRST AMERICAN ASSET MANAGEMENT,
A DIVISION OF U.S. BANK NATIONAL ASSOCIATION
601 Second Avenue South
Minneapolis, Minnesota 55402
CUSTODIAN
U.S. BANK NATIONAL ASSOCIATION
180 East Fifth Street
St. Paul, Minnesota 55101
DISTRIBUTOR
SEI INVESTMENTS DISTRIBUTION CO.
1 Freedom Valley Drive
Oaks, Pennsylvania 19456
INDEPENDENT AUDITORS
ERNST & YOUNG LLP
1400 Pillsbury Center
200 South Sixth Street
Minneapolis, Minnesota 55402
COUNSEL
DORSEY & WHITNEY LLP
220 South Sixth Street
Minneapolis, Minnesota 55402
- --------------------------------------------------------------------------------
FIRST AMERICAN FUNDS Bulk Rate
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Permit No. 26388
In an attempt to reduce shareholder costs and help eliminate duplication, the
funds will try to limit their mailing to one report for each address that lists
one or more shareholders with the same last name. If you would like additional
copies, please call Investor Services at 1-800-637-2548.
3012-00 5/2000
