<PAGE>
[GRAPHIC]
1999 SEMIANNUAL REPORT
AMERICAN SELECT
PORTFOLIO
SLA
[LOGO]-SM- FIRST AMERICAN
ASSET MANAGEMENT
<PAGE>
[LOGO]-SM- FIRST AMERICAN
ASSET MANAGEMENT
CONTENTS
1 Fund Overview
4 Financial Statements and Notes
14 Investments in Securities
16 Shareholder Update
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AMERICAN SELECT PORTFOLIO
PRIMARY INVESTMENTS Mortgage-related assets that directly or indirectly
represent a participation in or are secured by and payable from mortgage loans.
The fund may also invest in asset-backed securities, U.S. government securities,
corporate debt securities, municipal obligations, unregistered securities and
mortgage servicing rights. The fund may borrow using reverse repurchase
agreements and revolving credit facilities. Use of certain of these investments
and investment techniques may cause the fund's net asset value to fluctuate to a
greater extent than would be expected from interest rate movements alone.
FUND OBJECTIVE High level of current income. Its secondary objective is to seek
capital appreciation. As with other investment companies, there can be no
assurance this fund will achieve its objective.
AVERAGE ANNUAL TOTAL RETURNS
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Based on net asset value for the periods ended May 31, 1999
[CHART]
<TABLE>
<CAPTION>
Since Inception
One Year Five Year 9/21/1993
-------- --------- ---------------
<S> <C> <C> <C>
American Select Portfolio 7.66% 10.38% 7.11%
Lehman Brothers Mutual Fund
Government/Mortgage Index 4.66% 7.76% 6.17%
</TABLE>
The average annual total returns for American Select Portfolio are based on the
change in its net asset value (NAV), assume all distributions were reinvested
and do not reflect sales charges. NAV-based performance is used to measure
investment management results.
Average annual total returns based on the change in market price for the
one-year, five-year and since-inception periods ended May 31, 1999, were 14.22%,
11.06% and 5.98%, respectively. These returns assume reinvestment of all
distributions and reflect sales charges on distributions as described in the
fund's dividend reinvestment plan, but not on initial purchases.
PLEASE REMEMBER, YOU COULD LOSE MONEY WITH THIS INVESTMENT. NEITHER SAFETY OF
PRINCIPAL NOR STABILITY OF INCOME IS GUARANTEED. Past performance does not
guarantee future results. The investment return and principal value of an
investment will fluctuate so that fund shares, when sold, may be worth more
or less than their original cost. Closed-end funds, such as this fund, often
trade at discounts to net asset value.
Therefore, you may be unable to realize the full net asset value of your shares
when you sell.
The fund uses the Lehman Brothers Mutual Fund Government/Mortgage Index as a
benchmark. Although we believe this is the most appropriate benchmark available,
it is not a perfect match. The benchmark index is comprised of U.S. government
securities while American Select Portfolio is comprised primarily of
non-securitized, illiquid whole loans. This limits the ability of the fund to
respond quickly to market changes.
The Lehman Brothers Mutual Fund Government/Mortgage Index is comprised of all
U.S. government agency and Treasury securities and agency mortgage-backed
securities. Developed by Lehman Brothers for comparative use by the mutual fund
industry, this index is unmanaged and does not include any fees or expenses in
its total return calculations.
The since-inception number for the Lehman index is calculated from the month end
following the fund's inception through May 31, 1999.
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NOT FDIC INSURED NO BANK GUARANTEE MAY LOSE VALUE
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<PAGE>
FUND OVERVIEW
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FUND MANAGEMENT
JOHN WENKER
is primarily responsible for the management of American Select Portfolio. He has
13 years of financial experience.
DAVID STEELE
assists with the management of American Select Portfolio. He has 20 years of
financial experience.
RUSS KAPPENMAN
assists with the management of American Select Portfolio. He has 13 years of
financial experience.
JULY 15, 1999
FOR THE SIX-MONTH PERIOD ENDED MAY 31, 1999, AMERICAN SELECT PORTFOLIO HAD A NET
ASSET VALUE TOTAL RETURN OF 3.29%, WITH MUCH OF THE RETURN ATTRIBUTABLE TO
INCOME GENERATED BY THE FUND.* This compares to a -0.58% return for the Lehman
Brothers Mutual Fund Government/Mortgage Index. The fund's total return based on
market price was 6.02%.* As of May 31, 1999, the fund traded at a discount to
net asset value; the market price was $12.31 per share with a net asset value of
$12.86 per share.
ALONG WITH ITS STABLE SHARE PRICE, THE FUND CONTINUED TO PROVIDE AN ATTRACTIVE
DIVIDEND. For the six-month period, dividends paid amounted to $0.53 per share.
The fund's annualized distribution rate was 8.53% based on the May 31 market
price of $12.31 per share. Current monthly earnings of $0.0835 per share (based
on an average of the three months ended May 31) would result in an annualized
earnings rate of 8.14% based on the May 31 market price. Of course, past
performance is no guarantee of future results, and those rates will fluctuate.
THE FUND'S MONTHLY DIVIDEND REMAINED AT $0.0875 PER SHARE. The dividend reserve
fell from $0.0965 per share to $0.0804 per share over the reporting period.
However, this reserve continues to support dividend levels. For most of the
year, we continued to benefit from high income generated by loans held in the
portfolio. This has played a major role in allowing us to hold the dividend
fairly steady.
* All returns assume reinvestment of distributions and do not reflect sales
charges, except the fund's total return based on market price, which does
reflect sales charges on distributions as described in the fund's dividend
reinvestment plan, but not on initial purchases. Past performance does not
guarantee future results. The investment return and principal value of an
investment will fluctuate so that fund shares, when sold, may be worth more
or less than their original cost.
PORTFOLIO COMPOSITION
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As a percentage of total assets on May 31, 1999
[CHART]
<TABLE>
<S> <C>
Short-term Securities 1%
Commercial Loans 14%
U.S. Treasury Securities 14%
Single Family Loans 11%
Multifamily Loans 51%
U.S. Agency Fixed-rate
Mortgage-backed Securities 8%
Other Assets 1%
</TABLE>
DELINQUENT LOAN PROFILE
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The chart below shows the percentage of single family loans** in the portfolio
that are 30, 60, 90 or 120 days delinquent as of May 31, 1999, based on
principal amounts outstanding.
<TABLE>
<S> <C>
Current 95.8%
- -----------------------------
30 Days 3.4%
- -----------------------------
60 Days 0%
- -----------------------------
90 Days 0%
- -----------------------------
120+ Days 0.8%
- -----------------------------
</TABLE>
** As of May 31, 1999, there were no multifamily or commercial loans delinquent.
1 1999 SEMIANNUAL REPORT AMERICAN SELECT PORTFOLIO
<PAGE>
FUND OVERVIEW CONTINUED
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THE FUND MAINTAINED ITS FOCUSED STRATEGY. Single family, multifamily and
commercial whole loans represent approximately 76% of total assets, with the
remainder invested primarily in U.S. Treasury securities and FNMA
mortgage-backed securities. As the fund's original multifamily loans continue to
mature, we will seek to diversify the portfolio with single family and
commercial loans. The portfolio composition chart on page one shows our progress
to date. The higher interest rate environment of the last six months slowed
mortgage prepayments in the portfolio. This has helped maintain income at
attractive levels.
SINCE THE CAPITAL MARKETS VOLATILITY IN THE FALL OF 1998, THE COMMERCIAL REAL
ESTATE MARKET HAS BEEN RELATIVELY STABLE. Commercial new construction has slowed
for most property types and property sales have slowed as well. Generally, real
estate markets across the country are in equilibrium with supply and demand in
balance. This should help extend the real estate cycle and create a better
outlook in the near term for the real estate risk associated with the fund.
AS WE HAVE STATED IN THE PAST, LOAN PREPAYMENTS OCCURRING IN TODAY'S INTEREST
RATE ENVIRONMENT ARE TYPICALLY REINVESTED IN LOWER-YIELDING SECURITIES.
Depending on interest rate and market trends in the months and years to come,
this may eventually result in a reduced dividend. We continue to do all we can
to find securities that offer current attractive yields within proper
risk/reward relationships.
GEOGRAPHICAL DISTRIBUTION
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We attempt to buy mortgage loans in many parts of the country to help avoid
the risks of concentrating in one area. These percentages reflect principal
value of whole loans as of May 31, 1999. Shaded areas without values
indicate states in which the fund has invested less than 0.50% of its assets.
[MAP]
<TABLE>
<S> <C>
Alabama less than 0.50%
Alaska less than 0.50%
Arizona 11%
Arkansas less than 0.50%
California 5%
Colorado 3%
Connecticut less than 0.50%
Delaware less than 0.50%
Florida 1%
Georgia 2%
Hawaii 1%
Idaho 1%
Illinois 2%
Indiana less than 0.50%
Iowa less than 0.50%
Kansas
Kentucky
Louisiana 3%
Maine
Maryland 1%
Massachusetts 1%
Michigan 6%
Minnesota 7%
Mississippi
Missouri 2%
Montana less than 0.50%
Nebraska 1%
New Hampshire less than 0.50%
New Jersey 1%
New Mexico 2%
New York 1%
Nevada 2%
North Carolina 4%
North Dakota
Ohio 2%
Oklahoma 11%
Oregon less than 0.50%
Pennsylvania less than 0.50%
Rhode Island less than 0.50%
South Carolina less than 0.50%
South Dakota less than 0.50%
Tennessee less than 0.50%
Texas 27%
Utah 1%
Vermont less than 0.50%
Virginia less than 0.50%
Washington 2%
West Virginia
Wisconsin
Wyoming less than 0.50%
</TABLE>
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2 1999 SEMIANNUAL REPORT AMERICAN SELECT PORTFOLIO
<PAGE>
FUND OVERVIEW CONTINUED
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THE FUND ACCEPTS CREDIT RISK THROUGH ITS INVESTMENT IN WHOLE LOANS. The fund
bears the risk of loss that could arise from defaults on the underlying loans.
To the extent that proceeds from the sale are less than the fund paid for the
loan, the fund could suffer a loss. The fund has experienced no credit losses
since its inception. Over the past six months, gains due to foreclosure amounted
to $0.001 per share. One advantage of the fund's investments in whole loans is
that it can benefit from prepayment penalties on multifamily and commercial
loans and from mortgage discount paydowns (loans purchased at a discount paying
off at par). Since-inception gains from prepayment penalties have amounted to
$0.20 per share and gains from mortage discount paydowns have amounted to $0.10
per share. Through the reporting period, gains from prepayment penalties
amounted to $0.03 per share and gains from mortgage discount paydowns amounted
to $0.02 per share.
THANK YOU FOR YOUR INVESTMENT IN AMERICAN SELECT PORTFOLIO. We are pleased that
the fund continues to generate a competitive return and stable income. Our
attempts to control the credit risk inherent in this fund will continue. We
appreciate your faith in our abilities and look forward serving you in the
coming year.
VALUATION OF WHOLE LOAN INVESTMENTS
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The fund's investments in whole loans (single family, multifamily and
commercial), participation mortgages and mortgage servicing rights are generally
not traded in any organized market and therefore, market quotations are not
readily available. These investments are valued at "fair value" according to
procedures adopted by the fund's board of directors. Pursuant to these
procedures, whole loan investments are initially valued at cost and their values
are subsequently monitored and adjusted pursuant to a First American Asset
Management pricing model designed to incorporate, among other things, the
present value of the projected stream of cash flows on such investments. The
pricing model takes into account a number of relevant factors including the
projected rate of prepayments, the delinquency profile, the historical payment
record, the expected yield at purchase, changes in prevailing interest rates and
changes in the real or perceived liquidity of whole loans, participation
mortgages or mortgage servicing rights, as the case may be. The results of the
pricing model may be further subject to price ceilings due to the illiquid
nature of the loans. Changes in prevailing interest rates, real or perceived
liquidity, yield spreads and creditworthiness are factored into the pricing
model each week. Certain mortgage loan information is received on a monthly
basis and includes, but is not limited to, the projected rate of prepayments,
projected rate and severity of defaults, the delinquency profile and the
historical payment record. Valuations of whole loans are determined no less
frequently than weekly.
POSSIBLE REPURCHASE OFFER
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First American Asset Management intends to recommend that the fund's board of
directors authorize the repurchase by the fund of up to 10% of its outstanding
shares at net asset value if the average discount between the fund's net asset
value and market price exceeds 5% during the 12 weeks preceding October 1. If
the recommendation is approved by the fund's board, repurchase offers are
expected to be mailed to shareholders in October, with share repurchases
occurring in December.
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3 1999 SEMIANNUAL REPORT AMERICAN SELECT PORTFOLIO
<PAGE>
FINANCIAL STATEMENTS (Unaudited)
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STATEMENT OF ASSETS AND LIABILITIES May 31, 1999
................................................................................
<TABLE>
<S> <C>
ASSETS:
Investments in securities at market value* (note 2) ....... $222,260,204
Cash in bank on demand deposit ............................ 183,054
Accrued interest receivable ............................... 1,647,601
Other assets .............................................. 10,099
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Total assets ............................................ 224,100,958
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LIABILITIES:
Reverse repurchase agreements payable ..................... 71,125,000
Accrued investment management fee ......................... 65,454
Accrued administrative fee ................................ 26,182
Accrued interest .......................................... 155,418
Other accrued expenses .................................... 5,486
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Total liabilities ....................................... 71,377,540
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Net assets applicable to outstanding capital stock ...... $152,723,418
-----------------
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COMPOSITION OF NET ASSETS:
Capital stock and additional paid-in capital .............. $169,709,749
Undistributed net investment income ....................... 954,717
Accumulated net realized loss on investments .............. (18,222,598)
Net unrealized appreciation of investments ................ 281,550
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Total - representing net assets applicable to capital
stock ................................................. $152,723,418
-----------------
-----------------
* Investments in securities at identified cost ............ $221,978,654
-----------------
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NET ASSET VALUE AND MARKET PRICE:
Net assets ................................................ $152,723,418
Shares outstanding (authorized 1 billion shares of $0.01 par
value) .................................................. 11,877,383
Net asset value ........................................... $ 12.86
Market price .............................................. $ 12.31
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
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4 1999 Semiannual Report - American Select Portfolio
<PAGE>
Financial Statements (Unaudited) (continued)
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STATEMENT OF OPERATIONS For the Six Months Ended May 31,
1999
................................................................................
<TABLE>
<S> <C>
INCOME:
Interest (net of interest expense of $1,575,865) ........... $ 6,874,622
-----------------
EXPENSES (NOTE 3):
Investment management fee ................................. 387,703
Administrative fee ........................................ 155,081
Custodian and accounting fees ............................. 54,949
Transfer agent fees ....................................... 11,218
Reports to shareholders ................................... 31,015
Mortgage servicing fees ................................... 131,939
Directors' fees ........................................... 1,496
Audit and legal fees ...................................... 34,929
Other expenses ............................................ 19,352
-----------------
Total expenses .......................................... 827,682
Less expenses paid indirectly ......................... (10,099)
-----------------
Total net expenses ...................................... 817,583
-----------------
Net investment income ................................... 6,057,039
-----------------
NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS
(NOTE 4):
Net realized gain on investments in securities ............ 359,036
Net realized gain on real estate owned .................... 15,223
-----------------
Net realized gain on investments ........................ 374,259
Net change in unrealized appreciation or depreciation of
investments ............................................. (1,496,928)
-----------------
Net loss on investments ................................. (1,122,669)
-----------------
Net increase in net assets resulting from operations
..................................................... $ 4,934,370
-----------------
-----------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
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5 1999 Semiannual Report - American Select Portfolio
<PAGE>
Financial Statements (Unaudited) (continued)
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STATEMENT OF CASH FLOWS For the Six Months Ended May 31,
1999
................................................................................
<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Interest income ............................................ $ 6,874,622
Net expenses ............................................... (817,583)
-----------------
Net investment income .................................... 6,057,039
-----------------
Adjustments to reconcile net investment income to net cash
provided by operating activities:
Change in accrued interest receivable .................... (79,747)
Net amortization of bond discount and premium ............ 200,869
Change in accrued fees and expenses ...................... 23,874
Change in other assets ................................... (10,099)
-----------------
Total adjustments ...................................... 134,897
-----------------
Net cash provided by operating activities .............. 6,191,936
-----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of investments ......................... 32,774,073
Purchases of investments ................................... (46,323,732)
Net purchases of short-term securities ..................... (84,370)
-----------------
Net cash used by investing activities .................. (13,634,029)
-----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from reverse repurchase agreements ............ 14,125,000
Retirement of fund shares .................................. (794,277)
Distributions paid to shareholders ......................... (6,255,095)
-----------------
Net cash provided by financing activities .............. 7,075,628
-----------------
Net decrease in cash ....................................... (366,465)
Cash at beginning of period ................................ 549,519
-----------------
Cash at end of period .................................. $ 183,054
-----------------
-----------------
Supplemental disclosure of cash flow information:
Cash paid for interest on reverse repurchase
agreements ............................................. $ 1,560,573
-----------------
-----------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
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6 1999 Semiannual Report - American Select Portfolio
<PAGE>
Financial Statements (continued)
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STATEMENTS OF CHANGES IN NET ASSETS
................................................................................
<TABLE>
<CAPTION>
SIX MONTHS
ENDED 5/31/99 YEAR ENDED
(UNAUDITED) 11/30/98
----------------- -----------------
<S> <C> <C>
OPERATIONS:
Net investment income ..................................... $ 6,057,039 $12,494,905
Net realized gain on investments .......................... 374,259 3,861,662
Net change in unrealized appreciation or depreciation of
investments ............................................. (1,496,928) (2,246,226)
----------------- -----------------
Net increase in net assets resulting from operations .... 4,934,370 14,110,341
----------------- -----------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income ................................ (6,255,095) (13,151,251)
----------------- -----------------
CAPITAL SHARE TRANSACTIONS (NOTE 6):
Decrease in net assets from capital share transactions .... (794,277) (17,260,295)
----------------- -----------------
Total decrease in net assets ............................ (2,115,002) (16,301,205)
Net assets at beginning of period ......................... 154,838,420 171,139,625
----------------- -----------------
Net assets at end of period ............................... $152,723,418 $154,838,420
----------------- -----------------
----------------- -----------------
Undistributed net investment income ....................... $ 954,717 $ 1,152,773
----------------- -----------------
----------------- -----------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
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7 1999 Semiannual Report - American Select Portfolio
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
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(1) ORGANIZATION
............................
American Select Portfolio Inc. (the fund) is registered
under the Investment Company Act of 1940 (as amended) as a
diversified, closed-end management investment company. The
fund emphasizes investments in mortgage-related assets
that directly or indirectly represent a participation in
or are secured by and payable from mortgage loans. It may
also invest in asset-backed securities, U.S. government
securities, corporate debt securities, municipal
obligations, unregistered securities and mortgage
servicing rights. In addition, the fund may borrow using
reverse repurchase agreements and revolving credit
facilities. Fund shares are listed on the New York Stock
Exchange under the symbol SLA.
(2) SUMMARY OF
SIGNIFICANT
ACCOUNTING
POLICIES
............................
INVESTMENTS IN SECURITIES
Portfolio securities for which market quotations are
readily available are valued at current market value. If
market quotations or valuations are not readily available,
or if such quotations or valuations are believed to be
inaccurate, unreliable or not reflective of market value,
portfolio securities are valued according to procedures
adopted by the fund's board of directors in good faith at
"fair value", that is, a price that the fund might
reasonably expect to receive for the security or other
asset upon its current sale.
The current market value of certain fixed income
securities is provided by an independent pricing service.
Fixed income 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.
Short-term securities with maturities of 60 days or less
are valued at amortized cost, which approximates market
value.
The fund's investments in whole loans (single family,
multifamily and commercial), participation mortgages and
mortgage servicing rights are generally not traded in any
organized market and therefore, market quotations are not
readily available. These investments are valued at "fair
value" according to procedures adopted by the fund's board
of directors. Pursuant to these procedures, whole loan
investments are initially valued at cost and their values
are subsequently monitored and adjusted pursuant to a
First American Asset Management pricing model designed to
incorporate, among other things, the present value of the
projected stream of cash flows on such investments. The
pricing model takes into account a number of relevant
factors including the projected rate of prepayments, the
delinquency profile, the historical payment record, the
expected yield at purchase, changes in prevailing interest
rates, and changes in the real or perceived liquidity of
whole loans, participation mortgages or mortgage servicing
rights, as the case may be. The results of the pricing
model may be further subject to price ceilings due to the
illiquid nature of the loans. Changes in prevailing
interest rates, real or perceived liquidity, yield
spreads, and creditworthiness are factored into the
pricing model each week. Certain mortgage loan information
is received once a month. This information includes, but
is not limited to, the projected rate of prepayments,
projected rate and severity of defaults, the delinquency
profile and the historical payment record. Valuations of
whole loans, mortgage participations and mortgage
servicing rights are determined no less frequently than
weekly.
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8 1999 Semiannual Report - American Select Portfolio
<PAGE>
Notes to Financial Statements (Unaudited) (continued)
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Securities transactions are accounted for on the date
securities are purchased or sold. Realized gains and
losses are calculated on the identified-cost basis.
Interest income, including amortization of bond discount
and premium, is recorded on an accrual basis.
WHOLE LOANS AND PARTICIPATION MORTGAGES
Whole loans and participation mortgages may bear a greater
risk of loss arising from a default on the part of the
borrower of the underlying loans than do traditional
mortgage-backed securities. This is because whole loans
and participation mortgages, unlike most mortgage-backed
securities, generally are not backed by any government
guarantee or private credit enhancement. Such risk may be
greater during a period of declining or stagnant real
estate values. In addition, the individual loans
underlying whole loans and participation mortgages may be
larger than the loans underlying mortgage-backed
securities. With respect to participation mortgages, the
fund generally will not be able to unilaterally enforce
its rights in the event of a default, but rather will be
dependent on the cooperation of the other participation
holders.
At May 31, 1999, loans representing 0.14% of net assets
were 60 days or more delinquent as to the timely monthly
payment of principal. Such delinquencies relate solely to
single family whole loans and represent 0.82% of total
single family principal outstanding at May 31, 1999. The
fund does not record past due interest as income until
received. The fund may incur certain costs and delays in
the event of a foreclosure. Also, there is no assurance
that the subsequent sale of the property will produce an
amount equal to the sum of the unpaid principal balance of
the loan as of the date the borrower went into default,
the accrued unpaid interest and all of the foreclosure
expenses. In this case, the fund may suffer a loss. The
fund recognized net realized gains of $15,223 or $0.001
per share on real estate sold during the six months ended
May 31, 1999.
Real estate acquired through foreclosure, if any, is
recorded at estimated fair value. The fund may receive
rental or other income as a result of holding real estate.
In addition, the fund may incur expenses associated with
maintaining any real estate owned. On May 31, 1999, the
fund owned no real estate.
SECURITIES PURCHASED ON A WHEN-ISSUED BASIS
Delivery and payment for securities that have been
purchased by the fund on a when-issued or
forward-commitment basis can take place a month or more
after the transaction date. During this period, such
securities do not earn interest, are subject to market
fluctuation and may increase or decrease in value prior to
their delivery. The fund segregates, with its custodian,
assets with a market value equal to 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. As of May 31, 1999, the fund had no outstanding
when-issued or forward commitments.
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9 1999 Semiannual Report - American Select Portfolio
<PAGE>
Notes to Financial Statements (Unaudited) (continued)
- --------------------------------------------------------------------------------
FEDERAL TAXES
The fund intends to comply with the requirements of the
Internal Revenue Code applicable to regulated investment
companies and not be subject to federal income tax.
Therefore, no income tax provision is required. The fund
intends to distribute its taxable net investment income
and realized gains, if any, to avoid the payment of any
federal excise taxes.
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 amounts are
distributed may differ from the year that the income or
realized gains or losses were recorded by the fund.
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from net investment income are made monthly
and realized capital gains, if any, will be distributed at
least annually. These distributions are recorded as of the
close of business on the ex-dividend date. Such
distributions are payable in cash or, pursuant to the
fund's dividend reinvestment plan, reinvested in
additional shares of the fund's capital stock. Under the
plan, fund shares will be purchased in the open market
unless the market price plus commissions exceeds the net
asset value by 5% or more. If, at the close of business on
the dividend payment date, the shares purchased in the
open market are insufficient to satisfy the dividend
reinvestment requirement, the fund will issue new shares
at a discount of up to 5% from the current market price.
REPURCHASE AGREEMENTS AND OTHER SHORT-TERM SECURITIES
For repurchase agreements entered into with certain
broker-dealers, the fund, along with other affiliated
registered investment companies, may transfer uninvested
cash balances into a joint trading account, the daily
aggregate of which is invested in repurchase agreements
secured by U.S. government or agency obligations.
Securities pledged as collateral for all individual and
joint repurchase agreements are held by the fund's
custodian bank until maturity of the repurchase agreement.
Provisions for all agreements ensure that the daily market
value of the collateral is in excess of the repurchase
amount, including accrued interest, to protect the fund in
the event of a default. In addition to repurchase
agreements, the fund may invest in money market funds
advised by the fund's advisor.
USE OF ESTIMATES
The preparation of financial statements in conformity with
generally accepted accounting principles requires
management to make estimates and assumptions that affect
the reported amounts in the financial statements. Actual
results could differ from these estimates.
(3) EXPENSES
............................
INVESTMENT MANAGEMENT AND ADMINISTRATIVE FEES
On August 10, 1998, the fund entered into an investment
advisory agreement with U.S. Bank National Association
(U.S. Bank), acting through its division, First American
Asset Management. Prior thereto, Piper Capital Management
Incorporated (Piper Capital), which was acquired by U.S.
- --------------------------------------------------------------------------------
10 1999 Semiannual Report - American Select Portfolio
<PAGE>
Notes to Financial Statements (Unaudited) (continued)
- --------------------------------------------------------------------------------
Bancorp on May 1, 1998, had served as the fund's advisor.
U.S. Bank also serves as the fund's administrator under an
administration agreement effective May 1, 1998. Prior
thereto, Piper Capital provided services under an
administration agreement through April 30, 1998.
The investment advisory agreement provides the advisor
with a monthly investment management fee in an amount
equal to an annualized rate of 0.50% of the fund's average
weekly net assets. For its fee, the advisor provides
investment advice and conducts the management and
investment activity of the fund.
The administration agreement provides the administrator
with a monthly fee in an amount equal to an annualized
rate of 0.20% of the fund's average weekly net assets. For
its fee, the administrator will provide regulatory,
reporting and record-keeping services for the fund.
MORTGAGE SERVICING FEES
The fund enters into mortgage servicing agreements with
mortgage servicers for whole loans and participation
mortgages. For a fee, mortgage servicers maintain loan
records, such as insurance and taxes and the proper
allocation of payments between principal and interest.
OTHER FEES AND EXPENSES
In addition to the investment management, administrative
and mortgage servicing fees, the fund is responsible for
paying most other operating expenses, including: outside
directors' fees and expenses; custodian fees; registration
fees; printing and shareholder reports; transfer agent
fees and expenses; legal, auditing and accounting
services; insurance; interest; expenses related to real
estate owned; fees to outside parties retained to assist
in conducting due diligence; taxes and other miscellaneous
expenses. During the six months ended May 31, 1999, the
fund paid $15,402 for custody services to U.S. Bank.
EXPENSES PAID INDIRECTLY
Expenses paid indirectly represent reimbursements of
custodian fees received from mortgage servicers of
$10,099.
(4) INVESTMENT
SECURITY
TRANSACTIONS
............................
Cost of purchases and proceeds from sales of securities
and real estate, other than temporary investments in
short-term securities, for the six months ended May 31,
1999 aggregated $46,122,863 and $32,774,073, respectively.
Included in proceeds from sales is $93,005 from sales of
real estate owned. Included in net realized gains are
$305,477 from prepayment penalties on multifamily loans.
- --------------------------------------------------------------------------------
11 1999 Semiannual Report - American Select Portfolio
<PAGE>
Notes to Financial Statements (Unaudited) (continued)
- --------------------------------------------------------------------------------
(5) CAPITAL LOSS
CARRYOVER
............................
For federal income tax purposes, the fund had capital loss
carryovers at November 30, 1998, which, if not offset by
subsequent capital gains, will expire on the fund's fiscal
year-ends as indicated below. It is unlikely the board of
directors will authorize a distribution of any net
realized capital gains until the available capital loss
carryovers have been offset or expire.
<TABLE>
<CAPTION>
CAPITAL LOSS
CARRYOVER EXPIRATION
------------- ----------
<S> <C> <C>
$ 5,107,172 2002
13,489,685 2003
-------------
$ 18,596,857
-------------
-------------
</TABLE>
(6) CAPITAL SHARE
TRANSACTIONS
............................
REPURCHASE OFFER
In 1997, the fund offered to purchase up to 10% of its
outstanding shares at net asset value. The percentage of
outstanding shares tendered, the number of shares
tendered, the repurchase price per share and proceeds
(including tender fees) paid by the fund were as follows:
<TABLE>
<CAPTION>
PERCENTAGE SHARES REPURCHASE
TENDERED TENDERED PRICE PROCEEDS PAID
---------- ------------ ----------- -------------
<S> <C> <C> <C>
10% 1,328,284 $12.88 $ 17,108,297
</TABLE>
RETIREMENT OF FUND SHARES
The fund's board of directors has approved a plan to
repurchase shares of the fund in the open market and
retire those shares. Repurchases may only be made when the
previous day's closing market value was at a discount from
net asset value. Daily repurchases are limited to 25% of
the previous four weeks average daily trading volume on
the New York Stock Exchange. Under the current plan,
cumulative repurchases in the fund cannot exceed 597,784
(5% of the outstanding shares as of September 9, 1998).
The board of directors will review the plan every six
months. The plan was last reviewed and reapproved by the
board of directors on June 3, 1999.
Pursuant to the plan, the fund repurchased and retired the
following:
<TABLE>
<CAPTION>
% OF OUTSTANDING WEIGHTED AVERAGE
PERIOD ENDED SHARES SHARES COST DISCOUNT TO NAV
------------ -------- ---------------- ------------- ----------------
<S> <C> <C> <C> <C>
5/31/99 65,700 0.55% $ 794,277 7.52%
11/30/98 12,600 0.11% $ 151,998 6.35%
</TABLE>
- --------------------------------------------------------------------------------
12 1999 Semiannual Report - American Select Portfolio
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
(7) FINANCIAL
HIGHLIGHTS
............................
Per-share data for a share of capital stock outstanding
throughout each period and selected information for each
period are as follows:
<TABLE>
<CAPTION>
Six Months
Ended Year Year Year Year Year
5/31/99 Ended Ended Ended Ended Ended
(Unaudited) 11/30/98 (e) 11/30/97 11/30/96 11/30/95 11/30/94
----------- ------------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
PER-SHARE DATA
Net asset value, beginning of period ... $12.96 $12.88 $12.66 $12.86 $11.62 $13.74
----------- ------ --------- --------- --------- ---------
Operations:
Net investment income ................ 0.51 1.06 1.05 1.02 1.09 1.22
Net realized and unrealized gains
(losses) on investments ............ (0.08) 0.12 0.21 (0.14) 1.28 (2.21)
----------- ------ --------- --------- --------- ---------
Total from operations .............. 0.43 1.18 1.26 0.88 2.37 (0.99)
----------- ------ --------- --------- --------- ---------
Distributions to shareholders:
From net investment income ........... (0.53) (1.10) (1.04) (1.08) (1.13) (1.13)
----------- ------ --------- --------- --------- ---------
Net asset value, end of period ......... $12.86 $12.96 $12.88 $12.66 $12.86 $11.62
----------- ------ --------- --------- --------- ---------
----------- ------ --------- --------- --------- ---------
Per-share market value, end of
period ............................... $12.31 $12.13 $11.75 $11.00 $11.00 $10.38
----------- ------ --------- --------- --------- ---------
----------- ------ --------- --------- --------- ---------
SELECTED INFORMATION
Total return, net asset value (a) ...... 3.29% 9.51% 10.44% 7.27% 21.22% (7.48)%
Total return, market value (b) ......... 6.02% 13.12% 16.97% 10.53% 17.36% (20.78)%
Net assets at end of period (in
millions) $ 153 $ 155 $ 171 $ 168 $ 172 $ 157
Ratio of expenses to average weekly net
assets including interest expense
(c) .................................. 3.10%(f) 3.34% 3.56% 3.30% 3.76% 2.66%
Ratio of expenses to average weekly net
assets excluding interest expense
(c) .................................. 1.07%(f) 1.09% 1.07% 1.03% 1.08% 1.12%
Ratio of net investment income to
average weekly net assets ............ 7.81%(f) 8.08% 8.36% 8.11% 8.85% 9.61%
Portfolio turnover rate (excluding
short-term securities) ............... 16% 41% 86% 30% 73% 110%
Amount of borrowings outstanding at end
of period (in millions) .............. $ 71 $ 57 $ 68 $ 65 $ 65 $ 65
Per-share amount of borrowings
outstanding at end of period ......... $ 5.99 $ 4.77 $ 5.12 $ 4.91 $ 4.87 $ 4.80
Per-share amount of net assets,
excluding borrowings, at end of
period ............................... $18.85 $17.73 $18.00 $17.57 $17.73 $16.42
Asset coverage ratio (d) ............... 315% 372% 352% 358% 364% 342%
</TABLE>
(a) ASSUMES REINVESTMENT OF DISTRIBUTIONS AT NET ASSET VALUE AND DOES NOT
REFLECT A SALES CHARGE.
(b) ASSUMES REINVESTMENT OF DISTRIBUTIONS AT ACTUAL PRICES PURSUANT TO THE
FUND'S DIVIDEND REINVESTMENT PLAN.
(c) INCLUDES 0.02% AND 0.05% FROM FEDERAL EXCISE TAXES IN FISCAL YEARS 1995 AND
1994, RESPECTIVELY.
(d) REPRESENTS NET ASSETS, EXCLUDING BORROWINGS, AT END OF PERIOD DIVIDED BY
BORROWINGS OUTSTANDING AT END OF PERIOD.
(e) EFFECTIVE AUGUST 10, 1998, THE ADVISOR WAS CHANGED FROM PIPER CAPITAL TO
U.S. BANK.
(f) ANNUALIZED.
- --------------------------------------------------------------------------------
13 1999 Semiannual Report - American Select Portfolio
<PAGE>
INVESTMENTS IN SECURITIES (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMERICAN SELECT PORTFOLIO May 31, 1999
...................................................................................................................
Date Market
Description of Security Acquired Par Value Cost Value (a)
- --------------------------------------------------------- -------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
(PERCENTAGES OF EACH INVESTMENT CATEGORY RELATE TO TOTAL NET ASSETS)
U.S. GOVERNMENT AND AGENCY SECURITIES (32.0%):
U.S. AGENCY MORTGAGE-BACKED SECURITIES (11.5%):
FIXED RATE (11.5%):
6.50%, FNMA, 5/17/29 .............................. 5/4/99 $18,000,000(b) $ 17,867,916 $ 17,578,080
------------
U.S. GOVERNMENT SECURITIES (20.5%):
6.63%, U.S. Treasury Note, 3/31/02 ................ 9/22/98 30,500,000(b) 31,908,641 31,331,735
------------
Total U.S. Government and Agency Securities .... 49,776,557 48,909,815
------------
WHOLE LOANS (C,D,E) (112.7%):
COMMERCIAL LOANS (20.6%):
Advance Circuits and Hopkins II Business Center,
8.71%, 11/1/01 .................................. 10/11/96 3,334,157 3,333,638 3,394,368
Broadway Place, 9.00%, 6/1/01 ..................... 12/15/97 3,447,140 3,447,140 3,509,202
Case Business Park, 9.08%, 6/1/02 ................. 5/20/99 3,570,000 3,570,000 3,677,100
Community Coffee Office Building, 8.90%, 6/1/01 ... 10/3/97 4,600,257 4,600,257 4,723,452
Corporate Center Northborough, 7.95%, 10/1/03 ..... 9/9/98 5,000,000 4,987,500 5,000,445
Oasis at the Waterfront, 9.50%, 5/1/00 ............ 4/30/97 1,628,641 1,628,641 1,628,641
Parkway Business Center, 7.75%, 11/1/03 ........... 10/22/98 3,750,000 3,750,000 3,695,661
Rodeo Shops, 9.15%, 6/1/07 ........................ 5/29/97 1,320,598 1,320,598 1,367,605
The Kislak Building, 8.45%, 7/1/02 ................ 6/17/97 1,715,333 1,715,333 1,766,792
Victory Packaging Facility, 8.00%, 6/1/13 ......... 5/27/98 2,828,857 2,828,857 2,760,712
------------
31,181,964 31,523,978
------------
MULTIFAMILY LOANS (75.3%):
Bridge Court Apartments, 10.13%, 5/1/09 ........... 4/21/94 1,775,568 1,757,812 1,242,898
Bryant Square Apartments, 8.75%, 4/1/01 ........... 3/15/94 1,118,808(b) 1,103,642 1,130,740
Candlelite Apartments, 8.75%, 3/1/01 .............. 2/28/94 1,487,955 1,477,172 1,521,276
Cape Cod Apartments, 7.40%, 2/1/08 ................ 1/16/98 1,828,058(b) 1,828,058 1,770,984
Casa Del Vista Apartments, 8.75%, 1/1/01 .......... 12/30/93 2,049,576(b) 2,036,945 2,082,872
Castle Arms Apartments, 8.13%, 4/1/06 ............. 3/19/99 998,970 998,970 1,006,136
Centre Court, White Oaks, and Green Acres
Apartments, 8.75%, 1/1/09 ....................... 12/30/98 4,134,396 4,134,396 4,336,200
Chapel Hill Apartments, 9.38%, 8/1/01 ............. 7/29/94 893,439 885,229 922,752
Continental Gardens Apartments, 8.90%, 3/1/04 ..... 2/14/94 1,912,602(b) 1,901,605 1,986,132
Cottonwood Villas Apartments, 9.00%, 10/1/01 ...... 9/24/98 1,645,000 1,628,550 1,661,450
El Conquistador Apartments, 7.75%, 4/1/09 ......... 3/24/99 2,897,953 2,897,953 2,856,711
</TABLE>
<TABLE>
<CAPTION>
Date Shares/ Market
Description of Security Acquired Par Value Cost Value (a)
- --------------------------------------------------------- -------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
Emerald Shores Apartments, 7.60%, 12/1/08 ......... 11/4/98 $ 3,218,939 $ 3,218,939 $ 3,146,369
Evergreen Square Apartments, 8.75%, 12/1/00 ....... 12/1/93 2,119,036(b) 2,097,845 2,182,607
Foothills West Apartments, 8.75%, 2/1/01 .......... 2/1/94 2,092,249(b) 2,078,445 2,108,866
Glen Hollow Apartments, 9.00%, 4/1/01 ............. 3/30/94 5,388,734(b) 5,361,694 5,534,155
Greenwood Residences, 7.75%, 4/1/08 ............... 3/12/98 2,377,106(b) 2,377,106 2,338,124
Hidden Colony Apartments, 9.00%, 4/1/01 ........... 3/22/94 3,191,189(b) 3,168,772 3,203,073
Hunters Meadows Apartments, 8.25%, 2/1/03 ......... 1/18/96 5,109,369 5,054,933 5,185,570
La Arboleda Apartments, 8.75%, 1/1/01 ............. 12/29/93 3,978,085(b) 3,954,858 4,042,709
Lakeville Apartments, 8.00%, 5/1/08 ............... 4/24/98 2,516,618 2,516,618 2,526,277
LaPrada and Club at Springlake Apartments, 7.60%,
9/1/03 .......................................... 8/27/98 14,714,494 14,714,494 14,526,278
Meadow Glenn Apartments, 8.50%, 2/1/07 ............ 1/30/97 2,283,253(b) 2,283,253 2,344,184
Oak Valley, Canyon Creek and Regional Apartments I,
8.25%, 10/1/01 .................................. 9/30/98 10,014,159 10,014,159 10,214,442
Oak Valley, Canyon Creek and Regional Apartments
II, 14.00%, 10/1/01 ............................. 9/30/98 3,020,000 3,020,000 2,676,671
Old Orchard Apartments, 8.75%, 12/1/00 ............ 12/16/93 9,628,243(b) 9,596,975 9,832,795
Revere Apartments, 7.40%, 5/9/01 .................. 4/22/99 1,300,000 1,300,000 1,245,807
Rush Creek Apartments, 7.73%, 4/1/99 .............. 4/5/94 2,482,365 2,454,793 2,482,365
Sheridan Ponds Apartments, 8.70%, 1/1/07 .......... 12/18/96 7,301,357(b) 7,264,850 7,574,625
Sierra Vista Apartments, 9.50%, 2/1/01 ............ 1/18/94 1,332,032(b) 1,318,711 1,356,470
Somerset Place Apartments, 9.00%, 4/1/04 .......... 4/8/94 2,262,772 2,245,801 2,129,248
The Oaks of Lake Bluff Apartments, 8.75%,
4/1/01 .......................................... 3/8/94 2,676,799(b) 2,649,553 2,738,205
Timber Forest Apartments, 8.75%, 2/1/01 ........... 1/14/94 1,145,048 1,131,816 1,164,318
Willow Creek Apartments, 8.50%, 2/1/07 ............ 1/30/97 5,769,511(b) 5,769,512 5,923,476
------------
114,243,459 114,994,785
------------
SINGLE FAMILY LOANS (16.8%):
Norwest IX, 7.88%, 5/1/22 ......................... 8/29/97 8,192,396 8,106,332 8,203,723
Norwest VIII, 8.00%, 8/4/22 6/4/97 6,428,597 6,300,532 6,384,243
Norwest X, 7.77%, 4/1/23 .......................... 3/12/98 5,962,923 5,976,041 5,840,561
Norwest XVI, 7.18%, 11/1/26 ....................... 3/4/99 3,163,531 3,074,952 3,075,850
Norwest XVII, 6.94%, 2/12/25 ...................... 5/20/99 2,147,515 2,069,648 2,078,080
------------
25,527,505 25,582,457
------------
Total Whole Loans .............................. 170,952,928 172,101,220
------------
SHORT-TERM SECURITIES (0.8%):
First American Prime Obligations Fund ............. 5/31/99 1,249,169(f) 1,249,169 1,249,169
------------
Total Investments in Securities (g) ............ $221,978,654 $222,260,204
------------
------------
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- --------------------------------------------------------------------------------
14 1999 Semiannual Report - American Select Portfolio
<PAGE>
INVESTMENTS IN SECURITIES (UNAUDITED) (continued)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
NOTES TO INVESTMENTS IN SECURITIES
(a) SECURITIES ARE VALUED IN ACCORDANCE WITH PROCEDURES DESCRIBED IN NOTE 2 TO
THE FINANCIAL STATEMENTS
(b) ON MAY 31, 1999, SECURITIES VALUED AT $97,714,852 WERE PLEDGED AS
COLLATERAL FOR THE FOLLOWING OUTSTANDING REVERSE REPURCHASE
AGREEMENTS:</TABLE>
<TABLE>
<CAPTION>
NAME OF BROKER
ACQUISITION ACCRUED AND DESCRIPTION
AMOUNT DATE RATE* DUE INTEREST OF COLLATERAL
----------- --------- ---------- --------- --------- -------------------
<S> <C> <C> <C> <C> <C> <C>
$10,600,000 5/17/99 4.85% 6/16/99 $ 21,421 (1)
14,000,000 5/17/99 4.85% 6/16/99 28,291 (1)
24,500,000 5/17/99 5.79% 6/16/99 59,091 (2)
5,000,000 5/17/99 5.79% 6/16/99 12,059 (2)
17,025,000 5/17/99 4.87% 6/16/99 34,556 (3)
----------- ---------
$71,125,000 $ 155,418
----------- ---------
----------- ---------
</TABLE>
* INTEREST RATE AS OF MAY 31, 1999. RATES ARE BASED ON THE LONDON INTERBANK
OFFERED RATE (LIBOR) AND RESET MONTHLY.
Name of broker and description of collateral:
(1) NOMURA;
U.S. TREASURY NOTE, 6.63%, 3/31/02, $23,350,000 PAR
(2) NOMURA;
BRYANT SQUARE APARTMENTS, 8.75%, 4/1/01, $1,118,808 PAR
CAPE COD APARTMENTS, 7.40%, 2/1/08, $1,828,058 PAR
CASA DEL VISTA APARTMENTS, 8.75%, 1/1/01, $2,049,576 PAR
CONTINENTAL GARDENS APARTMENTS, 8.90%, 3/1/04, $1,912,602 PAR
EVERGREEN SQUARE APARTMENTS, 8.75%, 12/1/00, $2,119,036 PAR
FOOTHILLS WEST APARTMENTS, 8.75%, 2/1/01, $2,092,249 PAR
GLEN HOLLOW APARTMENTS, 9.00%, 4/1/01, $5,388,734 PAR
GREENWOOD RESIDENCES, 7.75%, 4/1/08, $2,377,106 PAR
HIDDEN COLONY APARTMENTS, 9.00%, 4/1/01, $3,191,189 PAR
LA ARBOLEDA APARTMENTS, 8.75%, 1/1/01, $3,978,085 PAR
MEADOW GLENN APARTMENTS, 8.50%, 2/1/07, $2,283,253 PAR
OLD ORCHARD APARTMENTS, 8.75%, 12/1/00, $9,628,243 PAR
SHERIDAN PONDS APARTMENTS, 8.70%, 1/1/07, $7,301,357 PAR
SIERRA VISTA APARTMENTS, 9.50%, 2/1/01, $1,332,032 PAR
THE OAKS OF LAKE BLUFF APARTMENTS, 8.75%, 4/1/01, $2,676,799 PAR
WILLOW CREEK APARTMENTS, 8.50%, 2/1/07, $5,769,511 PAR
(3) MORGAN STANLEY DEAN WITTER;
FNMA, 6.50%, 5/17/29, $18,000,000 PAR
(c) INTEREST RATES ON COMMERCIAL AND MULTIFAMILY LOANS ARE THE RATES IN EFFECT
ON MAY 31, 1999. INTEREST RATES AND MATURITY DATES DISCLOSED ON SINGLE
FAMILY LOANS REPRESENT THE WEIGHTED AVERAGE COUPON AND WEIGHTED AVERAGE
MATURITY FOR THE UNDERLYING MORTGAGE LOANS AS OF MAY 31, 1999.
(d) COMMERCIAL AND MULTIFAMILY LOANS ARE DESCRIBED BY THE NAME OF THE MORTGAGED
PROPERTY. POOLS OF SINGLE FAMILY LOANS ARE DESCRIBED BY THE NAME OF THE
INSTITUTION FROM WHICH THE LOANS WERE PURCHASED. THE GEOGRAPHICAL LOCATION
OF THE MORTGAGED PROPERTIES AND, IN THE CASE OF SINGLE FAMILY, THE NUMBER
OF LOANS, IS PRESENTED BELOW.
Commercial Loans:
ADVANCE CIRCUITS AND HOPKINS II BUSINESS CENTER - HOPKINS, MN
BROADWAY PLACE - ALBUQUERQUE, NM
CASE BUSINESS PARK - PHOENIX, AZ
COMMUNITY COFFEE OFFICE BUILDING - BATON ROUGE, LA
CORPORATE CENTER NORTHBOROUGH - HOUSTON, TX
OASIS AT THE WATERFRONT - SCOTTSDALE, AZ
PARKWAY BUSINESS CENTER - POWAY, CA
RODEO SHOPS - MIAMI, FL
THE KISLAK BUILDING - WOODBRIDGE TOWNSHIP, NJ
VICTORY PACKAGING FACILITY - PHEONIX, AZ
Multifamily Loans:
BRIDGE COURT APARTMENTS - OWATONNA, MN
BRYANT SQUARE APARTMENTS - EDMUND, OK
CANDLELITE APARTMENTS - GRANDVIEW, MO
CAPE COD APARTMENTS - OKLAHOMA CITY, OK
CASA DEL VISTA APARTMENTS - CARSON CITY, NV
CASTLE ARMS APARTMENTS - AUSTIN, TX
CENTRE COURT, WHITE OAKS, AND GREEN ACRES APARTMENTS - NORTH CANTON AND
MASSILLON, OH
CHAPEL HILL APARTMENTS - KANSAS CITY, MO
CONTINENTAL GARDENS APARTMENTS - GRAND ISLAND, NE
COTTONWOOD VILLAS APARTMENTS - MESA, AZ
EL CONQUISTADOR APARTMENTS - TUCSON, AZ
EMERALD SHORES APARTMENTS - PHOENIX, AZ
EVERGREEN SQUARE APARTMENTS - BUFFALO, MN
FOOTHILLS WEST APARTMENTS - EL PASO, TX
GLEN HOLLOW APARTMENTS - CHARLOTTE, NC
GREENWOOD RESIDENCES - MITON, WA
HIDDEN COLONY APARTMENTS - DORAVILLE, GA
HUNTERS MEADOWS APARTMENTS - COLORADO SPRINGS, CO
LA ARBOLEDA APARTMENTS - SAN ANTONIO, TX
LAKEVILLE APARTMENTS - LAKEVILLE, MN
LAPRADA AND CLUB AT SPRINGLAKE APARTMENTS - MESQUITE AND HAMILTON CITY,
TX
MEADOW GLENN APARTMENTS - MIDWEST CITY, OK
OAK VALLEY, CANYON CREEK AND REGIONAL APARTMENTS I - ARLINGTON, TX
OAK VALLEY, CANYON CREEK AND REGIONAL APARTMENTS II - ARLINGTON, TX
OLD ORCHARD APARTMENTS - GRAND RAPIDS, MI
REVERE APARTMENTS - REVERE, MA
RUSH CREEK APARTMENTS - HOUSTON, TX
SHERIDAN PONDS APARTMENTS - TULSA, OK
SIERRA VISTA APARTMENTS - BOISE, ID
SOMERSET PLACE APARTMENTS - TUCSON, AZ
THE OAKS OF LAKE BLUFF APARTMENTS - LAKE BLUFF, IL
TIMBER FOREST APARTMENTS - PLANO, TX
WILLOW CREEK APARTMENTS - MIDWEST CITY, OK
Single Family Loans:
NORWEST IX - 76 LOANS, UNITED STATES
NORWEST VIII - 55 LOANS, UNITED STATES
NORWEST X - 43 LOANS, UNITED STATES
NORWEST XVI - 25 LOANS, UNITED STATES
NORWEST XVII - 19 LOANS, UNITED STATES
(e) SECURITIES PURCHASED AS PART OF A PRIVATE PLACEMENT WHICH HAVE NOT BEEN
REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES
ACT OF 1933 AND ARE CONSIDERED TO BE ILLIQUID. ON MAY 31, 1999, THE TOTAL
MARKET VALUE OF THESE INVESTMENTS WAS $172,101,220 OR 112.7% OF TOTAL NET
ASSETS.
(f) THIS MONEY MARKET FUND IS ADVISED BY U.S. BANK NATIONAL ASSOCIATION WHO
ALSO SERVES AS ADVISOR FOR THIS FUND. SEE NOTE 2 IN THE NOTES TO FINANCIAL
STATEMENTS.
(g) ALSO APPROXIMATES COST FOR FEDERAL INCOME TAX PURPOSES. THE AGGREGATE GROSS
UNREALIZED APPRECIATION AND DEPRECIATION OF INVESTMENTS IN SECURITIES,
INCLUDING REAL ESTATE OWNED, BASED ON THIS COST WERE AS FOLLOWS:
<TABLE>
<S> <C>
GROSS UNREALIZED APPRECIATION ...... $ 2,833,331
GROSS UNREALIZED DEPRECIATION ...... (2,551,781)
------------
NET UNREALIZED APPRECIATION ...... $ 281,550
------------
------------
</TABLE>
- --------------------------------------------------------------------------------
15 1999 Semiannual Report - American Select Portfolio
<PAGE>
SHAREHOLDER UPDATE
- --------------------------------------------------------------------------------
SHARE REPURCHASE PROGRAM
Your fund's board of directors has approved a share
repurchase program, which enables the fund to "buy back"
shares of its common stock in the open market. Repurchases
may only be made when the previous day's closing market
price per share was at a discount from net asset value.
Repurchases cannot exceed 5% of the fund's current
outstanding shares.
WHAT EFFECT WILL THIS PROGRAM HAVE ON SHAREHOLDERS?
We do not expect any adverse impact on the advisor's
ability to manage the fund. Because repurchases will be at
a price below net asset value, remaining shares
outstanding may experience a slight increase in net asset
value. Although the effect of share repurchases on the
market price is less certain, the board of directors
believes the program may have a favorable effect on the
market price of fund shares. We do not anticipate any
material increase in the fund's expense ratio.
WHEN WILL SHARES BE REPURCHASED?
Share repurchases may be made from time to time and may be
discontinued at any time. Share repurchases are not
mandatory when fund shares are trading at a discount from
net asset value; all repurchases will be at the discretion
of the fund's investment advisor. The board of directors'
decision whether to continue the share repurchase program
will be reported in the next shareholder report.
HOW WILL SHARES BE REPURCHASED?
We expect to finance the repurchase of shares by
liquidating portfolio securities or using current cash
balances. We do not anticipate borrowing in order to
finance share repurchases.
CHANGE OF ACCOUNTANTS
On September 9, 1998, the fund's board of directors, upon
the recommendation of the audit committee, appointed Ernst
& Young LLP as the independent accountants for the fund
for the fiscal year ending November 30, 1999, and
dismissed KPMG Peat Marwick LLP ("KPMG"). KPMG's reports
on the fund's financial statements for the past two years
have not contained an adverse opinion or a disclaimer of
opinion, and have not been qualified as to uncertainty,
audit scope, or accounting principles. In addition, there
have not been any disagreements with KPMG during the
fund's two most recent fiscal years on any matter of
accounting principles or practices, financial statement
disclosure, or auditing scope or procedure which, if not
resolved to the satisfaction of KPMG, would have caused it
to make a reference to the subject matter of the
disagreement in connection with its reports.
YEAR 2000 UPDATE
Like other mutual funds and business and financial
organizations, the fund could be adversely affected if the
computer systems used by the fund's advisor, other service
providers and entities with computer systems that are
linked to fund records do not properly process and
calculate date-related information from and after January
1, 2000. While year 2000-related computer problems could
have a negative effect on the fund, the fund's
administrator has undertaken a program designed to assess
and monitor the steps being taken by the fund's service
providers to address
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16 1999 Semiannual Report - American Select Portfolio
<PAGE>
Shareholder Update (continued)
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year 2000 issues. This program includes seeking assurances
from service providers that their systems are or will be
year 2000 compliant and reviewing service providers' test
results for year 2000 compliance. The administrator and
the advisor also report regularly to the fund's board of
directors concerning their own and other service
providers' progress toward year 2000 readiness. Although
these reports indicate that service providers are or
expect to be year 2000 compliant, there can be no
assurance that this will be the case in all instances or
that year 2000 difficulties experienced by others in the
financial services industry will not impact the fund. In
addition, there can be no assurance that year 2000
difficulties will not have an adverse effect on the fund's
investment or on global markets or economies, generally.
The fund is not bearing any of the expenses incurred by
its service providers in preparing for the year 2000 or in
reporting on these matters to the fund's board of
directors.
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17 1999 Semiannual Report - American Select Portfolio
<PAGE>
[LOGO]-SM- FIRST AMERICAN
ASSET MANAGEMENT
AMERICAN SELECT PORTFOLIO
1999 SEMIANNUAL REPORT
7/1999 298-99
[LOGO] This document is printed on paper made from 100% total recovered fiber,
including 15% post-consumer waste.
