<PAGE>
NORWEST PASSAGE-Registered Trademark- NORWEST SELECT FUNDS
SEMI-ANNUAL REPORT FOR:
VARIABLE ANNUITY - INCOME FUND
- INCOME EQUITY FUND
- VALUGROWTH-SM- STOCK FUND
[LOGO] - SMALL COMPANY STOCK FUND
Norwest Passage Variable
Annuity is distributed
by Fortis Investors, Inc.
JUNE 30, 1999
Norwest Select Funds are not insured by the FDIC, Federal Reserve System,
U.S. Government, or any other government agency; are not bank deposits; are
not obligations of, or guaranteed or endorsed by any bank and are subject to
investment risk, including the possible loss of principal. Please see inside
cover for additional disclosure information.
<PAGE>
Norwest Select Funds is a family of open-end investment companies
commonly known as mutual funds. FORUM FINANCIAL SERVICES, INC. ("FFSI"),
MEMBER NASD, is the distributor of Norwest Select Funds. FFSI is not
affiliated with Wells Fargo & Company ("Wells Fargo"), Norwest Bank
Minnesota, N.A. (the "Bank") or Norwest Investment Services, Inc.
("NISI"). SHARES OF THE FUNDS ARE NOT INSURED OR GUARANTEED BY AND ARE
NOT OBLIGATIONS OF THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE
FEDERAL RESERVE SYSTEM, THE U.S. GOVERNMENT OR ANY GOVERNMENT AGENCY.
EVEN THOUGH NORWEST INVESTMENT MANAGEMENT, INC., A SUBSIDIARY OF THE
BANK, ACTS AS THE INVESTMENT ADVISER, AND THE BANK ACTS AS THE TRANSFER
AGENT AND CUSTODIAN OF NORWEST SELECT FUNDS, AND EACH RECEIVES FEES FOR
SUCH SERVICES AS DISCLOSED IN THE PROSPECTUS, SHARES OF THE FUNDS ARE
NOT BANK DEPOSITS, AND ARE NOT OBLIGATIONS OF, GUARANTEED OR ENDORSED BY
THE BANK, ANY OTHER BANK, OR ANY OF THE BANK'S AFFILIATES, INCLUDING
WELLS FARGO AND NISI, NOR ARE THEY GUARANTEED BY, NOR DO THEY CONSTITUTE
OBLIGATIONS OF, FFSI.
INVESTMENT IN SHARES OF MUTUAL FUNDS IS SUBJECT TO RISK, INCLUDING THE
POSSIBLE LOSS OF PRINCIPAL, THAT MAY CAUSE THE VALUE OF THE INVESTMENT
AND THE INVESTMENT RETURN TO FLUCTUATE. WHEN THE INVESTMENT IS SOLD, THE
VALUE MAY BE HIGHER OR LOWER THAN THE AMOUNT ORIGINALLY INVESTED.
Mutual funds are sold only by prospectus. Shares of the Norwest Select
Funds are currently sold only to separate accounts ("Separate Accounts")
of certain insurance companies (the "Insurance Companies"), as each Fund
of the Trust serves as an investment medium for variable life insurance
policies and variable annuity contracts (collectively, the "Contracts")
issued by the Insurance Companies.
<PAGE>
TABLE OF CONTENTS JUNE 30, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
A MESSAGE TO CONTRACT HOLDERS............................................. 1
FINANCIAL STATEMENTS
Statements of Assets and Liabilities............................... 2
Statements of Operations........................................... 3
Statements of Changes in Net Assets................................ 4
Financial Highlights............................................... 6
Notes to Financial Statements...................................... 8
Schedules of Investments
Income Fund................................................. 10
Income Equity Fund.......................................... 11
ValuGrowth Stock Fund....................................... 12
Small Company Stock Fund.................................... 13
Notes to Schedules of Investments........................... 14
</TABLE>
<PAGE>
MESSAGE TO CONTRACT HOLDERS
- --------------------------------------------------------------------------------
August 16, 1999
Dear Norwest Passage Contract Holders,
We are pleased to present the 1999 Norwest Select
Funds Semi-Annual Report for the period ended June 30,
1999. This report includes our four Norwest Select
variable subaccounts available through your Norwest
Passage Variable Annuity.
Recent events in the U.S. economy may signal a turning
point for domestic and international markets. Fear of an
interest rate increase threw the Dow Jones Industrial
Average ("DJIA") into a spin during May. Concerned that
strong domestic growth and low unemployment could spark
higher inflation, the Federal Reserve Board (the "Fed")
raised its target for the federal funds rate 0.25 percent
to five percent in June and announced it would return to a
neutral position in terms of the future direction of
interest rates. The news was well received on Wall Street,
and the stock and bond markets responded positively.
Overall, a period of relative calm returned to global
markets due to Asia's improving economic condition. U.S.
financial markets shook off any threats to domestic
prosperity, with the DJIA peaking in April at a record
high of 11,000. Thanks to the combination of low
unemployment, low inflation and strong consumer spending,
the nation's "Goldilock's" economy seemed just right--at
least through most of the period.
Although higher interest rates typically help cool the
nation's strong economic growth, economies from Asia to
Latin America are concerned about the prospect of a
tightening U.S. monetary policy. Higher interest rates
translate into higher bond yields, raising the debt
service burden throughout emerging markets. So while the
health of the world's economies remains questionable,
signs of optimism are emerging as the Fed announced a
return to a neutral position.
Whatever the market conditions, we recommend that you
continually review your investment portfolio with your
financial consultant to determine an appropriate mix of
investments, including Norwest Passage Variable Annuity,
to meet your ongoing needs. We are committed to helping
you achieve your financial goals. If you have any
questions or need information, please contact us at
1-(800) 338-1348 or (612) 667-8833, option 2.
Again, thank you for choosing Norwest Select Funds.
Sincerely,
/s/ John Y. Keffer
John Y. Keffer
CHAIRMAN, NORWEST SELECT
FUNDS
1
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED) JUNE 30, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMALL
INCOME VALUGROWTH COMPANY
INCOME EQUITY STOCK STOCK
FUND FUND FUND FUND
----------- ------------ ------------ -----------
<S> <C> <C> <C> <C>
ASSETS
Investments (Note 2)
Investments at cost...................... $26,420,647 $ 90,147,019 $28,514,884 $10,532,169
Net unrealized appreciation
(depreciation).......................... (860,580) 24,692,356 10,323,368 1,155,973
----------- ------------ ------------ -----------
Total investments at value................. 25,560,067 114,839,375 38,838,252 11,688,142
Cash....................................... - 1,572 - -
Receivable for interest, dividends and
other receivables........................ 404,447 179,356 42,267 12,238
Receivable for Fund shares issued.......... 67,083 - - -
----------- ------------ ------------ -----------
TOTAL ASSETS................................. 26,031,597 115,020,303 38,880,519 11,700,380
----------- ------------ ------------ -----------
LIABILITIES
Payable for Fund shares redeemed........... - 38,637 22,843 19,668
Payable to investment adviser (Note 3)..... 4,713 63,285 16,435 786
Accrued expenses and other liabilities..... 10,577 18,853 12,252 8,404
----------- ------------ ------------ -----------
TOTAL LIABILITIES............................ 15,290 120,775 51,530 28,858
----------- ------------ ------------ -----------
NET ASSETS................................... $26,016,307 $114,899,528 $38,828,989 $11,671,522
----------- ------------ ------------ -----------
----------- ------------ ------------ -----------
COMPONENTS OF NET ASSETS
Paid-in capital............................ $26,390,376 $ 88,797,802 $27,098,962 $14,275,297
Undistributed net investment income
(loss)................................... 703,538 592,418 118,749 (1,672)
Net unrealized appreciation (depreciation)
of investments........................... (860,580) 24,692,356 10,323,368 1,155,973
Accumulated net realized gain (loss) from
investments.............................. (217,027) 816,952 1,287,910 (3,758,076)
----------- ------------ ------------ -----------
NET ASSETS................................... $26,016,307 $114,899,528 $38,828,989 $11,671,522
----------- ------------ ------------ -----------
----------- ------------ ------------ -----------
SHARES OF BENEFICIAL INTEREST, NO PAR
VALUE...................................... 2,345,311 6,368,616 1,787,295 1,126,913
----------- ------------ ------------ -----------
----------- ------------ ------------ -----------
NET ASSET VALUE PER SHARE (Net Assets divided
by Shares of Beneficial Interest).......... $ 11.09 $ 18.04 $ 21.73 $ 10.36
----------- ------------ ------------ -----------
----------- ------------ ------------ -----------
</TABLE>
See Notes to Financial Statements
2
<PAGE>
STATEMENTS OF OPERATIONS (UNAUDITED) FOR THE SIX MONTHS ENDED JUNE 30, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMALL
INCOME VALUGROWTH COMPANY
INCOME EQUITY STOCK STOCK
FUND FUND FUND FUND
----------- ----------- ----------- ---------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Interest income............................ $ 769,642 $ 80,160 $ 44,068 $ 24,259
Dividend income............................ - 901,070 220,962 20,612
----------- ----------- ----------- ---------
TOTAL INVESTMENT INCOME...................... 769,642 981,230 265,030 44,871
----------- ----------- ----------- ---------
EXPENSES
Investment advisory (Note 3)............... 70,811 389,143 146,404 46,564
Management and Administration (Note 3)..... 11,802 48,642 18,300 5,820
Transfer agency (Note 3)................... 9,442 38,914 14,640 4,656
Custody (Note 3)........................... 2,360 9,729 3,660 1,164
Accounting (Note 3)........................ 22,000 19,000 19,000 24,000
Legal...................................... 1,368 5,418 2,195 750
Audit...................................... 7,848 7,812 7,272 7,849
Trustees................................... 91 359 146 50
Amortization of organization costs (Note
2)....................................... 4,128 - 4,128 -
Miscellaneous.............................. 4,015 8,847 4,645 2,574
----------- ----------- ----------- ---------
TOTAL EXPENSES............................... 133,865 527,864 220,390 93,427
Fees waived (Note 5)....................... (62,961) (139,052) (74,109) (46,884)
----------- ----------- ----------- ---------
NET EXPENSES................................. 70,904 388,812 146,281 46,543
----------- ----------- ----------- ---------
NET INVESTMENT INCOME (LOSS)................. 698,738 592,418 118,749 (1,672)
----------- ----------- ----------- ---------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) from
investments.............................. (211,978) 817,010 1,432,040 (382,782)
Net change in unrealized appreciation
(depreciation) of investments............ (1,272,107) 10,681,870 1,685,289 (318,076)
----------- ----------- ----------- ---------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS................................. (1,484,085) 11,498,880 3,117,329 (700,858)
----------- ----------- ----------- ---------
NET INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS.................................. $ (785,347) $12,091,298 $3,236,078 $(702,530)
----------- ----------- ----------- ---------
----------- ----------- ----------- ---------
</TABLE>
See Notes to Financial Statements
3
<PAGE>
FOR THE YEAR ENDED DECEMBER 31, 1998
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED) AND THE SIX MONTHS ENDED JUNE
30, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMALL
INCOME VALUGROWTH COMPANY
INCOME EQUITY STOCK STOCK
FUND FUND FUND FUND
----------- ----------- ------------ -----------
<S> <C> <C> <C> <C>
NET ASSETS -- DECEMBER 31, 1997.............. $ 9,228,998 $39,888,248 $21,763,524 $11,481,832
----------- ----------- ------------ -----------
OPERATIONS
Net investment income...................... 872,408 930,041 238,387 39,314
Net realized gain (loss) from
investments.............................. 227,141 124,787 (89,369) (3,079,073)
Net change in unrealized appreciation of
investments.............................. 208,640 9,270,806 4,222,047 1,006,437
----------- ----------- ------------ -----------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS.................. 1,308,189 10,325,634 4,371,065 (2,033,322)
----------- ----------- ------------ -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM
Net investment income...................... (867,581) (932,147) (239,000) (39,617)
Net realized gain from investments......... (232,217) (124,789) - -
----------- ----------- ------------ -----------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS.......... (1,099,798) (1,056,936) (239,000) (39,617)
----------- ----------- ------------ -----------
CAPITAL SHARE TRANSACTIONS (a)
Sale of shares............................. 12,671,207 37,717,863 11,482,359 6,332,722
Reinvestment of distributions.............. 1,099,798 1,056,936 239,000 39,617
Redemption of shares....................... (1,009,523) (1,863,014) (1,800,952) (2,486,453)
----------- ----------- ------------ -----------
NET INCREASE IN NET ASSETS FROM CAPITAL SHARE
TRANSACTIONS............................... 12,761,482 36,911,785 9,920,407 3,885,886
----------- ----------- ------------ -----------
NET INCREASE IN NET ASSETS................... 12,969,873 46,180,483 14,052,472 1,812,947
----------- ----------- ------------ -----------
NET ASSETS -- DECEMBER 31, 1998 (I).......... 22,198,871 86,068,731 35,815,996 13,294,779
----------- ----------- ------------ -----------
OPERATIONS
Net investment income (loss)............... 698,738 592,418 118,749 (1,672)
Net realized gain (loss) from
investments.............................. (211,978) 817,010 1,432,040 (382,782)
Net change in unrealized appreciation
(depreciation) of investments............ (1,272,107) 10,681,870 1,685,289 (318,076)
----------- ----------- ------------ -----------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS.................. (785,347) 12,091,298 3,236,078 (702,530)
----------- ----------- ------------ -----------
CAPITAL SHARE TRANSACTIONS (b)
Sale of shares............................. 6,157,282 17,361,462 1,893,062 665,453
Redemption of shares....................... (1,554,499) (621,963) (2,116,147) (1,586,180)
----------- ----------- ------------ -----------
NET INCREASE (DECREASE) IN NET ASSETS FROM
CAPITAL SHARE TRANSACTIONS................. 4,602,783 16,739,499 (223,085) (920,727)
----------- ----------- ------------ -----------
NET INCREASE (DECREASE) IN NET ASSETS........ 3,817,436 28,830,797 3,012,993 (1,623,257)
----------- ----------- ------------ -----------
NET ASSETS -- JUNE 30, 1999 (II)............. $26,016,307 $114,899,528 $38,828,989 $11,671,522
----------- ----------- ------------ -----------
----------- ----------- ------------ -----------
(I) Includes undistributed net investment
income of.................................. $ 4,800 $ - $ - $ -
----------- ----------- ------------ -----------
----------- ----------- ------------ -----------
(II) Includes undistributed net investment
income (loss) of........................... $ 703,538 $ 592,418 $ 118,749 $ (1,672)
----------- ----------- ------------ -----------
----------- ----------- ------------ -----------
(a) Shares Issued (Redeemed) - For the Year
Ended December 31, 1998
Sale of shares........................... 1,091,411 2,522,285 622,388 515,865
Reinvestment of distributions............ 95,885 66,058 11,998 3,641
Redemption of shares..................... (85,838) (124,465) (97,280) (197,147)
----------- ----------- ------------ -----------
Net increase in shares outstanding..... 1,101,458 2,463,878 537,106 322,359
----------- ----------- ------------ -----------
----------- ----------- ------------ -----------
(b) Shares Issued (Redeemed) - For the Six
Months Ended June 30, 1999
Sale of shares........................... 546,749 1,027,567 91,696 66,028
Redemption of shares..................... (137,140) (37,720) (102,616) (160,736)
----------- ----------- ------------ -----------
Net increase (decrease) in shares
outstanding........................... 409,609 989,847 (10,920) (94,708)
----------- ----------- ------------ -----------
----------- ----------- ------------ -----------
</TABLE>
See Notes to Financial Statements
4
<PAGE>
(This page has been left blank intentionally.)
5
<PAGE>
FINANCIAL HIGHLIGHTS (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET REALIZED DISTRIBUTIONS
AND FROM NET
BEGINNING UNREALIZED DIVIDENDS REALIZED ENDING
NET ASSET NET GAIN (LOSS) FROM NET GAINS NET ASSET
VALUE INVESTMENT FROM INVESTMENT FROM RETURN OF VALUE PER
PER SHARE INCOME INVESTMENTS INCOME INVESTMENTS CAPITAL SHARE
--------- ----------- -------------- ---------- ------------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
INCOME FUND
January 1, 1999 to June
30, 1999............. $11.47 $0.30 $(0.68) $ - $ - $ - $11.09
January 1, 1998 to
December 31, 1998.... 11.06 0.48 0.53 (0.47) (0.13) - 11.47
January 1, 1997 to
December 31, 1997.... 10.72 0.56 0.41 (0.56) (0.07) - 11.06
January 1, 1996 to
December 31, 1996.... 10.98 0.50 (0.24) (0.50) (0.02) - 10.72
January 1, 1995 to
December 31, 1995.... 9.95 0.33 1.36 (0.66) - - 10.98
June 1, 1994(a) to
December 31, 1994.... 10.00 0.33 (0.38) - - - 9.95
- -----------------------------------------------------------------------------------------------------------------------------------
INCOME EQUITY FUND
January 1, 1999 to June
30, 1999............. 16.00 0.09 1.95 - - - 18.04
January 1, 1998 to
December 31, 1998.... 13.68 0.18 2.34 (0.18) (0.02) - 16.00
January 1, 1997 to
December 31, 1997.... 10.91 0.14 2.79 (0.14) (0.02) - 13.68
May 6, 1996(a) to
December 31, 1996.... 10.00 0.08 0.92 (0.08) (0.01) - 10.91
- -----------------------------------------------------------------------------------------------------------------------------------
VALUGROWTH STOCK FUND
January 1, 1999 to June
30, 1999............. 19.92 0.07 1.74 - - - 21.73
January 1, 1998 to
December 31, 1998.... 17.26 0.13 2.66 (0.13) - - 19.92
January 1, 1997 to
December 31, 1997.... 14.36 0.11 3.26 (0.11) (0.32) (0.04) 17.26
January 1, 1996 to
December 31, 1996.... 12.04 0.11 2.32 (0.11) - - 14.36
January 1, 1995 to
December 31, 1995.... 9.81 0.07 2.30 (0.14) - - 12.04
June 1, 1994(a) to
December 31, 1994.... 10.00 0.07 (0.26) - - - 9.81
- -----------------------------------------------------------------------------------------------------------------------------------
SMALL COMPANY STOCK FUND
January 1, 1999 to June
30, 1999............. 10.88 - (0.52) - - - 10.36
January 1, 1998 to
December 31, 1998.... 12.77 0.03 (1.89) (0.03) - - 10.88
January 1, 1997 to
December 31, 1997.... 13.50 0.01 1.24 (0.01) (1.59) (0.38) 12.77
January 1, 1996 to
December 31, 1996.... 11.21 0.02 3.51 (0.02) (1.22) - 13.50
May 1, 1995(a) to
December 31, 1995.... 10.00 0.06 1.54 (0.06) (0.33) - 11.21
</TABLE>
(a) Commencement of operations.
(b) Total return does not reflect any separate account charges under variable
annuity contracts or life insurance policies.
(c) Ratios for periods of less than one year are annualized.
See Notes to Financial Statements
6
<PAGE>
SELECTED DATA FOR A SHARE OUTSTANDING DURING THE PERIODS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATIOS TO AVERAGE NET ASSETS
NET ASSETS(c) AT
------------------------------ END OF
NET PORTFOLIO PERIOD
NET GROSS INVESTMENT TOTAL TURNOVER (000'S
EXPENSES EXPENSES INCOME RETURN(b) RATE OMITTED)
------ ------ -------- ------- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------
INCOME FUND
January 1, 1999 to June
30, 1999............. 0.60% 1.13% 5.92% (3.31%) 111% 26,016
January 1, 1998 to
December 31, 1998.... 0.60% 1.33% 5.83% 9.12% 123% 22,199
January 1, 1997 to
December 31, 1997.... 0.60% 1.97% 6.00% 9.08% 179% 9,229
January 1, 1996 to
December 31, 1996.... 0.60% 2.52% 6.05% 2.37% 125% 5,959
January 1, 1995 to
December 31, 1995.... 0.60% 4.67% 6.33% 17.08% 54% 3,090
June 1, 1994(a) to
December 31, 1994.... 0.60% 9.31% 6.45% (0.50%) 53% 1,255
- -----------------------------------------------------------------------------------------------------
INCOME EQUITY FUND
January 1, 1999 to June
30, 1999............. 0.80% 1.09% 1.22% 12.75% 1% 114,900
January 1, 1998 to
December 31, 1998.... 0.80% 1.10% 1.47% 18.42% 2% 86,069
January 1, 1997 to
December 31, 1997.... 0.80% 1.34% 1.85% 26.90% 3% 39,888
May 6, 1996(a) to
December 31, 1996.... 0.80% 2.51% 2.31% 9.95% 4% 9,415
- -----------------------------------------------------------------------------------------------------
VALUGROWTH STOCK FUND
January 1, 1999 to June
30, 1999............. 0.80% 1.20% 0.65% 9.09% 39% 38,829
January 1, 1998 to
December 31, 1998.... 0.80% 1.25% 0.81% 16.18% 17% 35,816
January 1, 1997 to
December 31, 1997.... 0.80% 1.50% 0.87% 23.56% 35% 21,764
January 1, 1996 to
December 31, 1996.... 0.80% 2.02% 1.08% 20.21% 38% 10,583
January 1, 1995 to
December 31, 1995.... 0.80% 3.81% 1.24% 24.15% 25% 4,793
June 1, 1994(a) to
December 31, 1994.... 0.80% 8.00% 1.67% (1.90%) 17% 1,910
- -----------------------------------------------------------------------------------------------------
SMALL COMPANY STOCK FUND
January 1, 1999 to June
30, 1999............. 0.80% 1.61% (0.03%) (4.78%) 155% 11,672
January 1, 1998 to
December 31, 1998.... 0.80% 1.51% 0.31% (14.47%) 135% 13,295
January 1, 1997 to
December 31, 1997.... 0.80% 1.88% 0.07% 9.87% 209% 11,482
January 1, 1996 to
December 31, 1996.... 0.80% 2.82% 0.16% 31.47% 195% 6,091
May 1, 1995(a) to
December 31, 1995.... 0.80% 5.38% 1.02% 15.95% 51% 2,027
</TABLE>
(a) Commencement of operations.
(b) Total return does not reflect any separate account charges under variable
annuity contracts or life insurance policies.
(c) Ratios for periods of less than one year are annualized.
See Notes to Financial Statements
7
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) JUNE 30, 1999
- --------------------------------------------------------------------------------
NOTE 1. ORGANIZATION
Norwest Select Funds (the "Trust") was organized as a Delaware business trust on
December 7, 1993, and is registered as an open-end management investment company
under the Investment Company Act of 1940. The Trust currently has four
diversified investment portfolios (each a "Fund" and, collectively, the
"Funds"). Income Fund (formerly Intermediate Bond Fund) and ValuGrowth Stock
Fund commenced operations on June 1, 1994. Small Company Stock Fund commenced
operations on May 1, 1995. Income Equity Fund commenced operations on May 6,
1996.
Shares of the Funds may be sold only to separate accounts of insurance companies
to serve as an investment medium for variable life insurance policies and
variable annuity contracts issued by the insurance companies.
The Trust Instrument authorizes the issuance of an unlimited number of shares of
beneficial interest without par value.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
These financial statements are prepared in accordance with generally accepted
accounting principles, which require management to make estimates and
assumptions that affect the reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of increase and decrease in net assets from
operations during the fiscal period. Actual results could differ from those
estimates. The following summarizes the significant accounting policies of the
Funds:
SECURITY VALUATION--Each Fund determines its net asset value at 4:00 p.m.,
Eastern Time, on each Fund business day. Short-term securities that mature in
sixty days or less are valued at amortized cost. Equity securities for which
market quotations are readily available are valued using the last reported sales
price (prior to the time as of which assets are valued) provided by independent
pricing services. If no sales are reported, the mean of the last bid and ask
price is used. Fixed income securities and other securities for which market
quotations are readily available are valued at the mean of the last bid and
asked price provided by independent pricing services. If no mean price is
available, the last bid price is used. In the absence of readily available
market quotations, securities are valued at fair value determined in accordance
with procedures adopted by the Board of Trustees.
SECURITY TRANSACTIONS AND INVESTMENT INCOME--Investment transactions are
accounted for on the trade date. Dividend income is recorded on the ex-dividend
date. Interest income is recorded on the accrual basis and includes amortization
of premiums and accretion of discount. Identified cost of investments sold is
used to determine realized gains and losses for both financial statement and
federal income tax purposes. Fixed income investments with a maturity greater
than sixty days and purchased at a premium or discount are not amortized or
accreted.
DISTRIBUTIONS TO SHAREHOLDERS--Dividends from net investment income and capital
gain distributions, if any, are distributed to shareholders at least annually.
Distributions are based on amounts calculated in accordance with applicable
federal income tax regulations, which may differ from generally accepted
accounting principles. These differences are due primarily to differing
treatments of income and gain on various investment securities held by a Fund,
timing differences and differing characterizations of distributions made by a
Fund.
FEDERAL TAXES--Each Fund intends to qualify each year as a regulated investment
company and distribute all its taxable income. In addition, by distributing in
each calendar year substantially all its net investment income, capital gain and
certain other amounts, if any, the Fund will not be subject to a federal income
or excise tax. Therefore, no federal income or excise tax provision is required.
EXPENSE ALLOCATION--The Trust accounts separately for the assets and liabilities
and operations of each Fund. Expenses that are attributable to more than one
Fund are allocated among the respective Funds.
REPURCHASE AGREEMENTS--Each Fund may transfer uninvested cash balances into a
joint trading account. These balances are invested in one or more repurchase
agreements. The Funds, through their custodian, receive delivery of the
collateral, whose market value must always exceed the repurchase price. In the
event of default, a Fund may have difficulties with the disposition of the
collateral.
ORGANIZATION COSTS--The costs incurred by certain Funds in connection with their
organization and registration of shares have been capitalized and are being
amortized using the straight line method over a five-year period beginning with
the commencement of the respective Fund's operations. As of June 30, 1999, each
Fund's organization costs have been fully amortized.
NOTE 3. ADVISORY, SERVICING FEES AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISER--The investment adviser to each Fund is Norwest Investment
Management, Inc. ("Adviser"), a wholly owned subsidiary of Norwest Bank
Minnesota, N.A. ("Norwest"), which is a subsidiary of Wells Fargo & Company. The
Adviser receives an annual advisory fee from each Fund based on a percentage of
average daily net assets of the respective Fund at the following annual rates:
Income Fund -- 0.60%; Income Equity Fund, ValuGrowth Stock Fund and Small
Company Stock Fund -- 0.80%.
MANAGEMENT, ADMINISTRATION AND OTHER SERVICES--Forum Financial Services, Inc.
("FFSI") supervises the overall management of the Trust other than investment
advisory services. FFSI is entitled to receive an annual fee of 0.05% of the
average daily net assets of each Fund. Forum Administrative Services, LLC
("FAdS") is the administrator to the Trust and receives a fee at an annual rate
of 0.05% of the average daily net assets of each Fund.
8
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONCLUDED) JUNE 30, 1999
- --------------------------------------------------------------------------------
NOTE 3. ADVISORY, SERVICING FEES AND OTHER TRANSACTIONS WITH
AFFILIATES (CONTINUED)
Forum Accounting Services, LLC ("FAcS") provides fund accounting services to the
Funds. For these services, FAcS is entitled to receive a fee of $36,000 per
year, per Fund, plus certain amounts based upon the number and types of
portfolio transactions within each Fund.
Norwest serves as the Trust's transfer agent, dividend disbursing agent and
custodian. For these services, Norwest is entitled to receive a fee at an annual
rate of 0.08% of the average daily net assets of each Fund.
NOTE 4. SECURITIES TRANSACTIONS
The cost of securities purchased and the proceeds from sales of securities
(including maturities and excluding short-term securities) for the six months
ended June 30, 1999, were as follows:
<TABLE>
<CAPTION>
FUND COST OF PURCHASES PROCEEDS FROM SALES
- ---------------------------------------- ----------------- -------------------
<S> <C> <C>
Income Fund............................. $29,424,947 $25,046,731
Income Equity Fund...................... 17,323,807 3,448,539
ValuGrowth Stock Fund................... 14,807,080 13,689,517
Small Company Stock Fund................ 16,432,188 18,511,953
</TABLE>
For federal income tax purposes, the tax cost of investment securities owned and
the aggregate gross unrealized appreciation and the aggregate gross unrealized
depreciation as of June 30, 1999, were the same as for reporting purposes and
were as follows:
<TABLE>
<CAPTION>
NET UNREALIZED
UNREALIZED UNREALIZED APPRECIATION
FUND APPRECIATION (DEPRECIATION) (DEPRECIATION) TAX COST
- ---------------------------------------- ------------ -------------- -------------- -----------
<S> <C> <C> <C> <C>
Income Fund............................. $ 27,154 $ (887,734) $ (860,580) $26,420,647
Income Equity Fund...................... 26,316,926 (1,624,570) 24,692,356 90,147,019
ValuGrowth Stock Fund................... 11,337,730 (1,014,362) 10,323,368 28,514,884
Small Company Stock Fund................ 1,665,761 (509,788) 1,155,973 10,532,169
</TABLE>
NOTE 5. VOLUNTARY FEE WAIVERS
For the six months ended June 30, 1999, the Trust's service providers
voluntarily waived a portion of certain fees incurred by the Funds as follows:
<TABLE>
<CAPTION>
FEES WAIVED
--------------------------------------------------
CUSTODIAN AND
FUND TRANSFER AGENT ADVISER FADS FFSI TOTAL FEES WAIVED
- ---------------------------------------- --------------- ----------- --------- --------- -----------------
<S> <C> <C> <C> <C> <C>
Income Fund............................. $ 11,802 $ 39,357 $ 5,901 $ 5,901 $ 62,961
Income Equity Fund...................... 48,644 41,766 24,321 24,321 139,052
ValuGrowth Stock Fund................... 18,300 37,509 9,150 9,150 74,109
Small Company Stock Fund................ 5,820 35,244 2,910 2,910 46,884
</TABLE>
NOTE 6. FUND REORGANIZATION
On March 25, 1999, the Board of Trustees of Norwest Select Funds approved the
reorganization of each Norwest Select Fund into a new portfolio of Wells Fargo
Variable Trust. The reorganizations are part of a plan to consolidate the
Stagecoach and Norwest fund families following last November's merger of Wells
Fargo & Company and Norwest Corporation. Fortis Benefits Insurance Company, the
variable annuity insurance provider through which the Norwest Select Funds are
sold, will present the reorganizations to contractholders for their approval and
will vote all shares in accordance with procedures described in the product
prospectuses at a special meeting that is planned for August 1999.
If contractholders approve the reorganizations, each Norwest Select Fund will
reorganize into a corresponding Wells Fargo Variable Trust portfolio that has
substantially similar investment objectives. The Wells Fargo Variable Trust
portfolios, with the exception of the portfolio combining with Income Equity
Fund, may have somewhat different investment policies and may combine with other
Stagecoach or Norwest Select funds.
9
<PAGE>
SCHEDULES OF INVESTMENTS (UNAUDITED) JUNE 30, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
INCOME FUND
- -----------------------------------------------------------------
CORPORATE BONDS & NOTES (50.6%)
200,000 AMBAC, Inc., 9.38%, 8/1/11 $ 241,002
235,000 American Home Products Corp., 7.25%,
3/1/23 238,708
200,000 Atlantic Richfield Co., 9.00%, 4/1/21 240,722
500,000 Banc One Corp., 8.00%, 4/29/27 530,775
500,000 Bank United, 8.00%, 3/15/09 484,575
500,000 BankBoston Corp., 6.88%, 7/15/03 503,730
500,000 Bankers Trust New York Co., 7.38%,
5/1/08 506,865
450,000 Clear Channel Communications, Inc.,
7.25%, 10/15/27 424,764
500,000 Coastal Corp., 6.95%, 6/1/28 474,975
300,000 Dell Computer Corp., 7.10%, 4/15/28 284,190
200,000 Dillard Department Stores, Inc., 9.13%,
8/1/11 227,896
500,000 EOP Operating LP, 7.50%, 4/19/29 463,725
500,000 First Data Corp., 6.38%, 12/15/07 487,430
500,000 Ford Motor Credit Co., 5.13%, 10/15/01 488,195
185,000 General Electric Capital Corp., 7.88%,
12/1/06 197,064
200,000 Gruma SA de CV, 7.63%, 10/15/07 179,006
500,000 Hertz Corp., 6.50%, 5/15/06 487,305
500,000 Imperial Tobacco, 7.13%, 4/1/09 486,790
500,000 Korea Electric Power, 6.00%, 12/1/26 482,895
500,000 LCI International, Inc. (Quest), 7.25%,
6/15/07 490,255
250,000 Merck & Co., Inc., 6.40%, 3/1/28 234,450
255,000 News America Holdings, 8.88%, 4/26/23 280,857
350,000 Oracle Corp., 6.72%, 2/15/04 347,379
500,000 PNC Bank Corp., 6.50%, 5/1/08 484,965
500,000 Providian National Bank, 6.65%, 2/1/04 489,795
500,000 Rouse Co., 8.50%, 1/15/03 509,820
500,000 Saks, Inc., 7.38%, 2/15/19 477,810
500,000 Society Corp., 8.13%, 6/15/02 521,135
500,000 Staples, Inc., 7.13%, 8/15/07 499,190
200,000 Tosco Corp., 7.80%, 1/1/27 200,222
500,000 Valero Energy Corp., 7.38%, 3/15/06 488,493
500,000 Yorkshire Power Finance, 6.15%, 2/25/03 486,260
---------------
TOTAL CORPORATE BONDS & NOTES (COST $13,447,222) 12,941,243
---------------
GOVERNMENT AGENCY BONDS & NOTES (1.2%)
FEDERAL HOME LOAN MORTGAGE CORPORATION
300,000 7.10%, 4/10/07 (cost $322,716) 311,736
---------------
MORTGAGE BACKED SECURITIES (8.0%)
FEDERAL NATIONAL MORTGAGE ASSOCIATION (7.3%)
496,087 Pool 449466, 6.50%, 11/1/28 479,191
487,941 Pool 454390, 6.00%, 12/1/28 458,665
997,644 Pool 455607, 6.00%, 12/1/28 937,785
---------------
TOTAL FEDERAL NATIONAL MORTGAGE ASSOCIATION
(COST $1,970,702) 1,875,641
---------------
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
INCOME FUND (continued)
- -----------------------------------------------------------------
</TABLE>
MORTGAGE BACKED SECURITIES (continued)
<TABLE>
<C> <S> <C>
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (0.7%)
176,709 Pool 445071, 7.50%, 1/15/27 (cost
$176,761) $ 178,586
---------------
TOTAL MORTGAGE BACKED SECURITIES (COST $2,147,463) 2,054,227
---------------
MUNICIPAL NOTES (0.8%)
200,000 Denver, CO, City and County SD #1,
Educational Facilities RV Taxable
Pension, School Facilities Lease,
AMBAC insured, 6.49%, 12/15/02 (cost
$200,000) 202,256
---------------
U.S. TREASURY OBLIGATIONS (34.3%)
U.S. TREASURY BONDS (10.2%)
700,000 10.75%, 8/15/05 868,224
200,000 11.25%, 2/15/15 299,328
300,000 8.88%, 8/15/17 383,124
300,000 8.88%, 2/15/19 386,280
750,000 5.25%, 11/15/28 664,260
---------------
TOTAL U.S. TREASURY BONDS (COST $1,129,483) 2,601,216
---------------
U.S. TREASURY NOTES (24.1%)
500,000 6.25%, 1/31/02 507,205
500,000 7.50%, 5/15/02 523,890
625,000 5.63%, 12/31/02 623,138
300,000 7.88%, 11/15/04 327,198
800,000 6.50%, 8/15/05 823,064
700,000 7.00%, 7/15/06 741,741
750,000 6.50%, 10/15/06 774,473
500,000 6.13%, 8/15/07 505,530
1,450,000 4.75%, 11/15/08 1,331,158
---------------
TOTAL U.S. TREASURY NOTES (COST $7,881,771) 6,157,397
---------------
TOTAL U.S. TREASURY OBLIGATIONS (COST $9,011,254) 8,758,613
---------------
SHORT-TERM HOLDINGS (5.1%)
945,026 Dreyfus Cash Management Fund 945,026
346,966 Norwest Cash Investment Fund 346,966
---------------
TOTAL SHORT-TERM HOLDINGS (COST $1,291,992) 1,291,992
---------------
TOTAL INVESTMENTS (100.0%) (COST $26,420,647) $ 25,560,067
---------------
---------------
</TABLE>
See Notes to Schedules of Investments and Notes to Financial Statements
10
<PAGE>
SCHEDULES OF INVESTMENTS (UNAUDITED) (CONTINUED) JUNE 30, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
INCOME EQUITY FUND
- -----------------------------------------------------------------
COMMON STOCK (94.7%)
BASIC MATERIALS (3.4%)
43,930 E.I. Du Pont de Nemours & Co. $ 3,000,968
21,555 Rohm & Haas Co. 924,170
---------------
3,925,138
---------------
CAPITAL GOODS (10.1%)
33,490 Emerson Electric Co. 2,105,682
23,540 General Electric Co. 2,660,020
26,390 Honeywell, Inc. 3,057,941
32,430 United Technologies Corp. 2,324,826
28,779 Waste Management, Inc. 1,546,871
---------------
11,695,340
---------------
CONSUMER CYCLICAL (13.3%)
44,550 Dayton Hudson Corp. 2,895,750
71,980 Dun & Bradstreet Corp. 2,550,791
26,155 Eastman Kodak Co. 1,772,001
48,575 J.C. Penney Co., Inc. 2,358,923
50,588 May Department Stores Co. 2,067,764
52,080 McDonald's Corp. 2,151,555
32,230 Sears, Roebuck and Co. 1,436,249
---------------
15,233,033
---------------
CONSUMER STAPLES (20.0%)
43,700 American Home Products Corp. 2,512,750
87,370 Fortune Brands, Inc. 3,614,934
23,870 Johnson & Johnson 2,339,260
27,380 Merck & Co., Inc. 2,026,120
85,750 PepsiCo, Inc. 3,317,453
25,150 Pfizer, Inc. 2,760,219
57,700 Philip Morris Cos., Inc. 2,318,818
24,750 Procter & Gamble Co. 2,208,937
80,000 Sara Lee Corp. 1,815,000
---------------
22,913,491
---------------
ENERGY (8.8%)
25,230 Atlantic Richfield Co. 2,108,282
21,065 Chevron Corp. 2,005,125
23,060 Exxon Corp. 1,778,503
17,140 Mobil Corp. 1,696,860
18,870 Royal Dutch Petroleum Co. 1,136,918
20,890 Schlumberger Ltd. 1,330,432
---------------
10,056,120
---------------
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
INCOME EQUITY FUND (continued)
- -----------------------------------------------------------------
</TABLE>
COMMON STOCK (continued)
<TABLE>
<C> <S> <C>
FINANCIAL (12.2%)
19,150 American Express Co. $ 2,491,890
31,000 American General Corp. 2,336,625
18,575 J.P. Morgan & Co., Inc. 2,609,788
55,040 St. Paul Cos., Inc. 1,750,960
42,210 Transamerica Corp. 3,165,750
49,830 U.S. Bancorp 1,694,220
---------------
14,049,233
---------------
MISCELLANEOUS MANUFACTURING (1.9%)
25,662 Minnesota Mining and Manufacturing Co. 2,230,990
---------------
TECHNOLOGY (17.9%)
76,557 AT&T Corp. 4,272,838
52,460 Hewlett-Packard Co. 5,272,230
73,440 IMS Health, Inc. 2,295,000
66,890 Lucent Technologies, Inc. 4,510,894
43,883 Tyco International Ltd. 4,158,007
---------------
20,508,969
---------------
UTILITIES &TELECOMMUNICATIONS (7.1%)
22,960 Consolidated Natural Gas Co. 1,394,820
34,940 GTE Corp. 2,646,705
37,430 PG&E Corp. 1,216,475
31,010 Public Service Enterprise Group, Inc. 1,267,534
39,020 Texas Utilities Co. 1,609,575
---------------
8,135,109
---------------
TOTAL COMMON STOCK (COST $84,055,067) 108,747,423
---------------
REPURCHASE AGREEMENTS (5.3%)
6,091,952 Lehman Brothers, Inc., 4.95%, 7/1/99
(cost $6,091,952)** 6,091,952
---------------
TOTAL INVESTMENTS (100.0%) (COST $90,147,019) $ 114,839,375
---------------
---------------
</TABLE>
See Notes to Schedules of Investments and Notes to Financial Statements
11
<PAGE>
SCHEDULES OF INVESTMENTS (UNAUDITED) (CONTINUED) JUNE 30, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
VALUGROWTH STOCK FUND
- -----------------------------------------------------------------
COMMON STOCK (95.4%)
BASIC MATERIALS (5.6%)
22,500 Ecolab, Inc. $ 981,563
6,100 Monsanto Co. 240,569
20,500 Newell Rubbermaid, Inc. 953,250
---------------
2,175,382
---------------
CAPITAL GOODS (2.7%)
6,600 Emerson Electric Co. 414,975
5,600 General Electric Co. 632,800
---------------
1,047,775
---------------
CONSUMER CYCLICAL (7.9%)
10,700 Black & Decker Corp. 675,437
12,100 Dayton Hudson Corp. 786,500
10,200 May Department Stores Co. 416,925
6,100 Sears, Roebuck and Co. 271,831
19,200 Wal-Mart Stores, Inc. 926,400
---------------
3,077,093
---------------
CONSUMER STAPLES (19.9%)
19,800 American Home Products Corp. 1,138,500
9,300 Baxter International, Inc. 563,813
15,400 Becton, Dickinson and Co. 462,000
10,800 Bristol-Myers Squibb Co. 760,725
8,968 Gillette Co. 367,688
17,700 Guidant Corp.* 910,444
13,300 International Home Foods, Inc.* 245,219
7,800 Johnson & Johnson 764,400
12,100 McKesson HBOC, Inc. 388,713
9,200 Medtronic, Inc. 716,450
11,700 PepsiCo, Inc. 452,644
8,200 Procter & Gamble Co. 731,850
6,000 Watson Pharmaceuticals, Inc.* 210,375
---------------
7,712,821
---------------
ENERGY (7.2%)
16,200 Merck & Co., Inc. 1,198,800
3,000 Mobil Corp. 297,000
14,600 Royal Dutch Petroleum Co. 879,647
6,600 Schlumberger Ltd. 420,340
---------------
2,795,787
---------------
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
VALUGROWTH STOCK FUND (continued)
- -----------------------------------------------------------------
</TABLE>
COMMON STOCK (continued)
<TABLE>
<C> <S> <C>
FINANCIAL (13.6%)
15,000 AFLAC, Inc. $ 718,125
20,000 Allstate Corp. 717,500
12,361 American International Group, Inc. 1,446,892
7,015 Bank of America Corp. 514,287
8,600 Fannie Mae 588,025
13,500 First Union Corp. 634,500
7,600 State Street Corp. 648,850
---------------
5,268,179
---------------
TECHNOLOGY (29.6%)
4,692 473,305
32,200 American Power Conversion Corp.* 648,025
19,574 Cisco Systems, Inc.* 1,262,523
18,200 Compaq Computer Corp. 431,113
20,400 EMC Corp.* 1,122,000
10,000 First Data Corp. 489,375
5,400 IBM Corp. 697,950
13,500 IMS Health, Inc. 421,875
17,800 Intel Corp. 1,059,100
10,000 Lockheed Martin Corp. 372,500
12,870 Lucent Technologies, Inc. 867,921
9,400 Microsoft Corp.* 847,761
23,000 Sun Microsystems, Inc.* 1,584,125
11,700 Unisys Corp.* 455,569
13,000 Xerox Corp. 767,812
---------------
11,500,954
---------------
UTILITY-TELECOMMUNICATIONS (8.9%)
10,100 Consolidated Natural Gas Co. 613,575
13,200 GTE Corp. 999,900
24,000 SBC Communications, Inc. 1,392,000
11,100 Texas Utilities Co. 457,875
---------------
3,463,350
---------------
TOTAL COMMON STOCK (COST $26,717,973) 37,041,341
---------------
REPURCHASE AGREEMENTS (4.6%)
1,796,911 Lehman Brothers Inc., 4.95%, 7/1/99
(cost $1,796,911)** 1,796,911
---------------
TOTAL INVESTMENTS (100.0%) (COST $28,514,884) $ 38,838,252
---------------
---------------
</TABLE>
See Notes to Schedules of Investments and Notes to Financial Statements
12
<PAGE>
SCHEDULES OF INVESTMENTS (UNAUDITED) (CONCLUDED) JUNE 30, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
SMALL COMPANY STOCK FUND
- -----------------------------------------------------------------
COMMON STOCK (82.4%)
CAPITAL GOODS (2.7%)
4,248 Cambrex Corp. $ 111,510
1,100 Dycom Industries, Inc.* 61,600
2,915 Lennar Corp. 69,960
1,200 Martin Marietta Materials, Inc. 70,800
---------------
313,870
---------------
COMMUNICATIONS (10.0%)
600 Broadcast.com, Inc.* 80,137
3,168 Capstar Broadcasting Corp.* 86,724
1,200 Concentric Network Corp.* 47,700
1,900 Cox Radio, Inc.* 103,075
1,749 Emmis Communications Corp.* 86,357
1,500 Globix Corp.* 66,281
4,992 ITC DeltaCom, Inc.* 139,776
716 Lycos, Inc.* 65,783
1,400 NEXTLINK Communications, Inc.* 104,125
1,300 NTL, Inc.* 112,044
1,400 Pacific Gateway Exchange, Inc.* 40,775
1,500 RCN Corp.* 62,438
1,700 True North Communications, Inc. 51,000
2,300 Voicestream Wireless Corp.* 65,406
2,300 Western Wireless Corp.* 62,100
---------------
1,173,721
---------------
CONSUMER CYCLICAL (9.8%)
2,574 99 Cents Only Stores* 128,539
2,078 American Eagle Outfitters, Inc.* 94,549
3,865 Ames Department Stores, Inc.* 176,341
1,869 Avis Rent A Car, Inc.* 54,435
3,600 BJ's Wholesale Club, Inc.* 108,225
2,900 Claire's Stores, Inc. 74,312
1,429 Cost Plus, Inc.* 65,019
4,368 CSK Auto Corp.* 117,936
300 DoubleClick, Inc.* 27,525
1,700 Lamar Advertising Co.* 69,594
6,765 Regis Corp. 129,803
1,857 Zale Corp.* 74,280
---------------
1,120,558
---------------
CONSUMER STAPLES (1.7%)
3,074 American Italian Pasta Co.* 93,373
3,468 Henry Schein, Inc.* 109,892
---------------
203,265
---------------
ENERGY (4.3%)
5,616 B.J. Services Co.* 165,322
7,900 ENSCO International, Inc. 157,506
3,600 Nabors Industries, Inc.* 87,975
5,304 Veritas DGC, Inc.* 97,129
---------------
507,932
---------------
FINANCIAL (11.0%)
7,233 AmeriCredit Corp.* 115,728
4,590 Commercial Federal Corp. 106,431
5,822 Community First Bankshares, Inc. 139,000
4,352 E*TRADE Group, Inc.* 173,808
6,801 FirstFed Financial Corp.* 130,919
3,177 HealthCare Financial Partners, Inc.* 108,812
2,340 Hudson United Bancorp 71,663
3,814 Metris Cos., Inc. 155,421
3,865 Metzler Group, Inc.* 106,770
2,200 Silicon Valley Bancshares* 54,450
1,100 Telebanc Financial Corp.* 42,625
3,092 Waddell & Reed Financial, Inc. - Class A 84,837
---------------
1,290,464
---------------
<CAPTION>
FACE/SHARE SECURITY
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
- -----------------------------------------------------------------
SMALL COMPANY STOCK FUND (continued)
- -----------------------------------------------------------------
</TABLE>
COMMON STOCK (continued)
<TABLE>
<C> <S> <C>
HEALTH CARE (5.6%)
2,016 AmeriSource Health Corp.* $ 51,408
2,100 Coulter Pharmaceutical, Inc.* 47,381
2,563 Covance, Inc.* 61,352
800 Express Scripts, Inc.* 48,150
4,086 Invitrogen Corp.* 100,874
2,815 Medicis Pharmaceutical Corp.* 71,431
2,000 MedImmune, Inc.* 135,500
894 Sepracor, Inc.* 72,638
5,100 Veterinary Centers of America, Inc.* 69,169
---------------
657,903
---------------
INSURANCE CARRIERS (0.2%)
600 Reinsurance Group of America, Inc. 21,150
---------------
TECHNOLOGY (36.3%)
2,288 Applied Micro Circuits Corp.* 188,188
1,900 Applied Power, Inc.* 51,893
1,673 Bindview Development Corp.* 39,733
3,311 Celestica, Inc.* 143,407
1,278 CMGI, Inc.* 145,771
2,411 Com21, Inc.* 41,137
4,152 Convergys Corp.* 79,926
2,711 CSG Systems International, Inc.* 70,994
2,666 Cymer, Inc.* 66,650
1,600 DII Group, Inc.* 59,700
2,700 Electronic Arts, Inc.* 146,475
1,300 Electronics for Imaging, Inc.* 66,787
2,200 Entrust Technologies, Inc.* 73,150
2,200 Extreme Networks, Inc.* 127,737
2,524 IMRglobal Corp.* 48,587
2,223 International Network Services* 89,753
2,000 Jabil Circuit, Inc.* 90,250
2,184 Legato Systems, Inc.* 126,126
1,399 Level One Communications, Inc.* 68,464
3,822 Maxwell Technologies, Inc.* 91,966
2,200 Microchip Technology, Inc.* 104,226
1,915 Micromuse, Inc.* 95,510
1,490 MindSpring Enterprises, Inc.* 66,025
3,900 National Data Corp. 166,725
1,624 Network Appliance, Inc.* 90,741
4,274 NOVA Corp.* 106,850
2,700 Novellus Systems, Inc.* 184,275
5,248 NVIDIA Corp.* 100,369
2,742 PMC-Sierra, Inc.* 161,607
2,418 Power Integrations, Inc.* 176,817
1,150 PSINet, Inc.* 50,313
1,300 Qlogic Corp.* 171,600
2,260 Sanmina Corp.* 171,478
800 SEI Investments Co. 70,600
1,200 Smith International, Inc.* 52,125
800 Teradyne, Inc.* 57,400
1,300 Terayon Communication Systems, Inc.* 72,638
1,000 TMP Worldwide, Inc.* 63,500
2,070 USWeb Corp.* 45,928
2,347 Verio, Inc.* 163,117
2,036 VeriSign, Inc.* 175,605
1,000 VISX, Inc.* 79,189
---------------
4,243,332
---------------
UTILITIES (0.8%)
2,496 Barrett Resources Corp.* 95,784
---------------
TOTAL COMMON STOCK (COST $8,472,006) 9,627,979
---------------
REPURCHASE AGREEMENTS (17.6%)
2,060,163 Lehman Brothers, Inc., 4.95%, 7/1/99
(cost $2,060,163) ** 2,060,163
---------------
TOTAL INVESTMENTS (100.0%) (COST $10,532,169) $ 11,688,142
---------------
---------------
</TABLE>
See Notes to Schedules of Investments and Notes to Financial Statements
13
<PAGE>
NOTES TO SCHEDULES OF INVESTMENTS (UNAUDITED) JUNE 30, 1999
- --------------------------------------------------------------------------------
* Non-income producing security.
** The Portfolios have invested in a joint repurchase agreement. The following
represents the collateral on the Lehman Brothers, Inc. joint repuchase
agreement: collateralized by $5,033,977 U.S. Government Securities, 8/7/01 -
6/1/29; with a total market value of $10,148,205.
ABBREVIATIONS
AMBAC American Municipal Bond Assurance Corporation
SD School District
RV Revenue Bonds
14
<PAGE>
[LOGO]
Norwest Select Funds
Shareholders Services
Minneapolis 612-667-8833
Elsewhere 800-338-1348
Norwest Investment Management, Inc.
Investment Adviser
Norwest Bank Minnesota, N.A.
Transfer Agent
Custodian
Forum Financial Services, Inc.
Manager and Distributor
- -C- 1999 Norwest Select Funds This report is authorized for distribution
NWPSAR (8/99) only to shareholders and to holders of
variable annuity contracts of Norwest
Passage Variable Annuity. If it is
delivered to other than a current
shareholder or contract holder, then it
must be accompanied by prospectuses for the
Norwest Select Funds and the Norwest
Passage Variable Annuity.
