<PAGE>
[LOGO]
ADVANTUS
FAMILY OF FUNDS
ANNUAL REPORT TO SHAREHOLDERS
ADVANTUS ENTERPRISE FUND
SEPTEMBER 30, 1997
<PAGE>
ADVANTUS ENTERPRISE FUND
TABLE OF CONTENTS
PERFORMANCE UPDATE 2
INVESTMENTS IN SECURITIES 7
STATEMENT OF ASSETS AND LIABILITIES 10
STATEMENT OF OPERATIONS 11
STATEMENTS OF CHANGES IN NET ASSETS 12
NOTES TO FINANCIAL STATEMENTS 13
INDEPENDENT AUDITORS' REPORT 18
FEDERAL INCOME TAX INFORMATION 19
SHAREHOLDER SERVICES 20
<PAGE>
LETTER FROM THE PRESIDENT [PHOTO]
Dear Shareholders:
The 1997 fiscal year has been a rewarding one for investors. On the equity side,
despite the anticipation of a market downturn, the equity market continued to
climb. Over the twelve month period ending September 30, 1997, the S&P 500*
gained 40.5 percent; over 26 percent of that gain was for the trailing six
months. We saw a slight market decline of 5.5 percent in August, but stocks
bounced back by the end of September.
As the stock market continues to push forward, some investors lose sight of the
importance of maintaining a position of their assets in bonds. Investors who
diversify their portfolio assets between stocks and bonds can better position
their portfolio in the event of stock market downturns. There was not a stock
market correction of major significance during this reporting period.
The bond market demonstrated strong performance throughout 1997. For the twelve
month period ending September 30, 1997, the Lehman Corporate Bond Index**
returned 10.8 percent. This is a 6 percent increase over last year's return.
Stable interest rates and low inflation have contributed to the bond market's
stellar performance.
Your Advantus Family of Funds includes a range of equity and bond offerings. I
recommend that you talk with your Ascend financial representative to ensure that
your portfolio has an appropriate balance for your situation. As we continue to
watch the stock market hit new highs, we cannot assume that upward moves are a
continuing trend.
In the pages that follow, the Fund's manager will give you more information
about the economy and conditions within the market that may have affected the
Fund during this reporting period. The manager will specifically discuss your
Advantus Fund's performance and share some strategies that were used to manage
the Fund.
We assert that a long-range view of investing provides the greatest benefit to
our shareholders. We encourage you to maintain a long-range view, and we believe
that you will derive the greatest benefit by doing so.
Sincerely,
[SIGNATURE]
Paul Gooding, President
Advantus Capital Management, Inc.
*The S&P 500 is a broad, unmanaged index of 500 common stocks which are
representative of the U.S. stock market overall. The Index includes
approximately 380 industrials, 10 transportations, 45 financials, and 65
utilities.
**The Lehman Corporate Bond Index includes all fixed-rate, publicly traded,
investment grade corporate debt with at least one year to maturity and $50
million par value outstanding.
<PAGE>
ADVANTUS ENTERPRISE FUND
PERFORMANCE UPDATE
[PHOTO]
JAMES P. TATERA, CFA
SENIOR VICE PRESIDENT
AND PORTFOLIO MANAGER
The Advantus Enterprise Fund is a mutual
fund designed for investors seeking
long-term accumulation of capital. In
pursuit of this objective, the Fund will
invest primarily in common and preferred
stocks issued by small companies, defined
in terms of either market capitalization
or gross revenues.
-Dividends paid quarterly.
-Capital gains distributions paid annually.
PERFORMANCE
The past year for the Enterprise Fund and small company growth investors in
general was decidedly cold and then hot. The fourth quarter of calendar 1996 and
1997's first quarter saw weakness across the board as investors drove big cap
stocks to new highs while shunning smaller companies. These small growth
companies lost earnings momentum and company after company ended up reporting
poor results. By contrast, the larger, multi-national companies showed strength
in their earnings trends.
Then as summer came and went, those same larger companies started to show some
earnings vulnerability. At about the same time, smaller companies started to
show some strength.
The past two calendar quarters have shown significant appreciation in smaller
companies due to the relative earnings strength of these companies versus the
slow down the larger companies seem to be experiencing.
The Enterprise Fund, which focuses on small growth companies, returned the
following for each of the three classes of shares offered for the year ended
September 30, 1997:
<TABLE>
<S> <C>
Class A.......................... 12.9 percent*
Class B.......................... 11.9 percent*
Class C.......................... 11.9 percent*
</TABLE>
PORTFOLIO RECAP
The Fund was positively impacted by a number of issues. Oil field services
stocks such as J. Ray McDermott, Newpark Resources and Petroleum Geo-Services
were up nicely with each returning over 70 percent for the year. Increasing
utilization of equipment and stronger pricing for services have led to increased
profitability for the industry. Outsourcing and professional services companies
also showed favorable performance with Maximus, Mastech and LCC International
performing very well. These companies provide staffing and services to the
government, corporate information technology and wireless companies,
respectively. Other positive contributors to performance were more eclectic in
nature and they include: Fairfield Communities (develops, markets and operates
vacation resorts and homes), T. Rowe Price (investment advisory services),
Kaydon Corporation (custom engineered bearings) and Corrections Corporation of
America (manages prisons and other correctional facilities).
Stocks which negatively impacted performance included Adtran Inc. and DSC
Communications Corp, both suppliers of telecommunications equipment which were
weak earlier in the year but then gained strength. Disappointing order trends
and earnings caused the weakness. Others hurt by negative earnings included
Idexx Labs (develops and manufactures disease testing products for animals),
Global Directmail (catalog sales of computer related products) and West Marine
Inc. (specialty marine retail stores).
2
<PAGE>
ADVANTUS ENTERPRISE
FUND
SEPTEMBER 30, 1997
The Fund was not immune from the overall earnings weakness experienced by many
smaller companies in the first part of the year. As the year unfolded, many of
these companies purchased for the Fund began to show the strength we expected.
Those that continued to lag have been sold out of the Fund.
By the end of the fiscal year, the Fund sold out of its largest position, United
Waste Systems, which has been held since the Fund's inception in September 1994.
United Waste Systems was a solid waste company which was a consolidator of
services to mid-sized cities, had an excellent business plan and executed it
well to bring significant appreciation to the shareholder. United Waste Systems
was bought by USA Waste. The Fund ended its three year investment in United
Waste Systems--purchasing it at $5 per share and selling it at $40 per share.
This illustrates the kind of investment we are making in small companies which
are leaders in what they do and have the ability to take a product or service
and grow into a substantial enterprise. Now that United Waste Systems is part of
USA Waste, which has a revenue run rate of $2 billion and a market cap of over
$8 billion, it doesn't meet our small company criteria.
OUTLOOK
Over the last 6 months small cap investors have finally started to be rewarded
for their patience. The Russell 2000 Index** is up 32.9 percent for the six
months ended September 30, 1997, versus the large cap S&P 500+ gain of 26.2
percent for the same period. The one year performance of the small cap stocks
continues to lag that of the larger stocks. We believe that small companies
still present compelling valuations even after their current run and with the
backdrop of moderate growth of the U.S. economy. Many of these small companies
are poised to see continued growth potential in earnings for the next 6 to 12
months.
*Historical performance is not an indication of future performance. These
performance results do not reflect the impact of Class A's maximum 5 percent
front-end sales charge or Class B's maximum 5 percent contingent deferred sales
charge. Investment returns and principal values will fluctuate so that shares
upon redemption may be worth more or less than their original cost.
**The Russell 2000 are the 2,000 largest companies in the Russell 3000. The
Russell 3000 is an unmanaged index of 3,000 common stocks which represents
approximately 98 percent of the U.S. market.
+The S&P 500 is a broad, unmanaged index of 500 common stocks which are
representative of the U.S. stock market overall. The index includes
approximately 380 industrials, 10 transportations, 45 financials and 65
utilities.
3
<PAGE>
ADVANTUS ENTERPRISE
FUND
SEPTEMBER 30, 1997
COMPARISON OF CHANGE IN VALUE OF A HYPOTHETICAL $10,000 INVESTMENT IN ADVANTUS
ENTERPRISE FUND, WILSHIRE MIDCAP INDEX AND CONSUMER PRICE INDEX
On the following charts you can see how the total return for each of the three
classes of shares of the Advantus Enterprise Fund compared to the Wilshire
Midcap Index and the Consumer Price Index. The lines in each graph represent the
cumulative total return of a hypothetical $10,000 investment made on the
inception date of each class of shares of the Advantus Enterprise Fund
(September 16, 1994 for Class A and Class B and March 1, 1995 for Class C)
through September 30, 1997.
CLASS A AND B
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
Date Class A Class B Wilshire CPI
<S> <C> <C> <C> <C>
9/16/94 $10,000 $10,000 $10,000 10,000
9/30/94 9,419 9,910 9,942 10,128
9/30/95 12,044 12,107 12,439 10,351
9/30/96 14,051 14,173 14,443 10,662
9/30/97 15,861 16,000 19,147 10,899
AVERAGE ANNUAL TOTAL RETURN:
Class A
One year 7.2%
Since inception (9/16/94) 16.4%
Class B
One year 6.9%
Since inception (9/16/94) 16.7%
</TABLE>
4
<PAGE>
ADVANTUS ENTERPRISE
FUND
SEPTEMBER 30, 1997
CLASS C
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
Date Class C Wilshire CPI
<S> <C> <C> <C>
3/1/95 $10,000 $10,000 $10,000
9/30/95 12,038 12,157 10,146
9/30/96 13,913 14,115 10,450
9/30/97 15,568 18,712 10,682
AVERAGE ANNUAL TOTAL RETURN:
One year 11.9%
Since inception (3/1/95) 18.7%
</TABLE>
The preceding charts are useful because they provide you with more information
about your investments. There are limitations, however. An index may reflect the
performance of securities that the Fund may not hold. Also, the index does not
deduct sales charges, investment advisory fees and other fund expenses, whereas
your Fund does. Performance presented for the Fund reflects the deduction of the
maximum 5 percent front-end sales charge for Class A and the maximum applicable
contingent deferred sales charge for Class B shares. Sales charges pay for your
financial professional's investment advice. Individuals cannot buy even an
unmanaged index fund without incurring some charges and expenses.
Historical performance is not an indication of future performance. Investment
returns and principal values will fluctuate so that shares upon redemption may
be worth more or less than their original cost.
5
<PAGE>
ADVANTUS ENTERPRISE
FUND
SEPTEMBER 30, 1997
TEN LARGEST STOCK HOLDINGS
<TABLE>
<CAPTION>
MARKET % OF STOCK
COMPANY SHARES VALUE PORTFOLIO
- ----------------------------------- -------- ---------- -----------
<S> <C> <C> <C>
Kaydon Corporation................. 29,700 $1,782,000 3.7%
Fairfield Communities, Inc......... 47,050 1,767,316 3.7%
Borders Group Incorporated......... 61,940 1,703,350 3.5%
T. Rowe Price Associates........... 22,700 1,526,575 3.2%
Advanced Lighting Technologies..... 55,290 1,492,830 3.1%
Corrections Corporation of
America.......................... 32,900 1,431,150 3.0%
MSC Industrial Direct Company...... 31,100 1,430,600 3.0%
Danka Business Systems PLC......... 30,700 1,366,150 2.8%
Gartner Group Incorporated......... 44,500 1,335,000 2.8%
DuPont Photomasks Incorporated..... 17,800 1,281,600 2.7%
---------- ---
$15,116,571 31.5%
---------- ---
---------- ---
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Cash and Other
Assets/Liabilities 9.0%
Basic Materials 4.4%
Capital Goods 10.7%
Communication Services 2.2%
Consumer Cyclical 28.2%
Consumer Staples 2.2%
Energy 4.0%
Financial 4.2%
Health Care 10.6%
Technology 22.1%
Transportation 2.4%
100.0%
</TABLE>
6
<PAGE>
ADVANTUS ENTERPRISE FUND
INVESTMENTS IN SECURITIES
SEPTEMBER 30, 1997
(Percentages of each investment category relate to total net assets.)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE(a)
- ----------- ------------
<C> <S> <C>
COMMON STOCKS (91.0%)
BASIC MATERIALS (4.4%)
Chemicals (4.4%)
21,187 Cambrex Corporation.......................... $ 987,845
30,915 McWhorter Technologies Incorporated (b)...... 776,739
2,800 Spectran Corporation (b)..................... 39,900
16,430 The Valspar Corporation...................... 515,491
------------
2,319,975
------------
CAPITAL GOODS (10.7%)
Electrical Equipment (2.8%)
55,290 Advanced Lighting Technologies (b)........... 1,492,830
------------
Machinery (3.4%)
29,700 Kaydon Corporation........................... 1,782,000
------------
Metal Fabrication (1.2%)
29,624 Shaw Group Incorporated (b).................. 649,877
------------
Office Equipment (3.0%)
30,700 Danka Business Systems PLC (c)............... 1,366,150
7,900 Encad Incorporated (b)....................... 242,925
------------
1,609,075
------------
Waste Management (.3%)
4,400 Newpark Resources Incorporated (b)........... 172,975
------------
COMMUNICATION SERVICES (2.2%)
Cellular (1.5%)
36,700 LCC International Incorporated (b)........... 802,813
------------
Telecommunication (.7%)
8,278 Panamsat Corporation (b)..................... 356,989
------------
<CAPTION>
MARKET
SHARES VALUE(a)
- ----------- ------------
<C> <S> <C>
CONSUMER CYCLICAL (28.2%)
Building Materials (.9%)
30,800 The Maxim Group Inc. (b)..................... $ 500,500
------------
Distribution Durables (2.7%)
31,100 MSC Industrial Direct Company (b)............ 1,430,600
------------
Leisure (1.8%)
27,111 GTECH Holdings Corporation (b)............... 926,857
------------
Lodging--Hotel (2.8%)
48,764 Extended Stay America (b).................... 731,460
21,702 Sun International Hotels Ltd (b)............. 748,719
------------
1,480,179
------------
Retail (5.9%)
61,940 Borders Group Incorporated (b)............... 1,703,350
12,600 Global Directmail Corporation (b)............ 281,925
9,100 Kohl's Inc. (b).............................. 646,100
12,100 Pacific Sunwear of California (b)............ 496,100
------------
3,127,475
------------
Service (10.8%)
46,200 Acxiom Corporation (b)....................... 805,613
31,800 CKS Group Incorporated (b)................... 1,192,500
28,900 Copart Incorporated (b)...................... 509,362
32,900 Corrections Corporation of America (b)....... 1,431,150
47,050 Fairfield Communities, Inc. (b).............. 1,767,315
------------
5,705,940
------------
</TABLE>
See accompanying notes to investments in securities.
7
<PAGE>
ADVANTUS ENTERPRISE FUND
INVESTMENTS IN SECURITIES--CONTINUED
<TABLE>
<CAPTION>
MARKET
SHARES VALUE(a)
- ----------- ------------
<C> <S> <C>
CONSUMER CYCLICAL--CONTINUED
Textiles (3.3%)
21,900 Nautica Enterprises Inc. (b)................. $ 615,938
23,000 Tommy Hilfiger Corporation (b)............... 1,148,562
------------
1,764,500
------------
CONSUMER STAPLES (2.2%)
Broadcasting (.7%)
12,400 United Video Satellite (b)................... 344,100
------------
Restaurants (.6%)
9,924 Rainforest Cafe Incorporated (b)............. 320,049
------------
Tobacco (.9%)
17,325 General Cigar Holdings Inc. (b).............. 500,259
------------
ENERGY (4.0%)
Oil and Gas (4.0%)
25,600 J Ray McDermott Holdings Incorporated (b).... 1,254,400
13,000 Petroleum Geo-Services ASA (b)(c)............ 879,125
------------
2,133,525
------------
FINANCIAL (4.2%)
Insurance (1.3%)
15,500 Partnerre Ltd (c)............................ 667,469
------------
Investment Bankers/Brokers (2.9%)
22,700 T. Rowe Price Associates..................... 1,526,575
------------
HEALTH CARE (10.6%)
Hospital Management (1.5%)
22,233 Sunrise Assisted Living Incorporated (b)..... 803,167
------------
<CAPTION>
MARKET
SHARES VALUE(a)
- ----------- ------------
<C> <S> <C>
HEALTH CARE--CONTINUED
Managed Care (1.1%)
16,083 Concentra Managed Care Inc. (b).............. $ 567,931
------------
Medical Product/Supplies (7.7%)
15,800 Amerisource Health Corporation (b)........... 923,312
1,500 BioReliance Corporation (b).................. 39,375
20,200 Hanger Orthopedic Group (b).................. 301,738
23,200 Sola International Inc. (b).................. 796,050
13,200 Spine-Tech Inc. (b).......................... 496,650
14,500 Sybron International Corporation (b)......... 622,594
18,300 Total Renal Care Holdings, Inc. (b).......... 915,000
------------
4,094,719
------------
Special Services (.3%)
5,000 Curative Health Services (b)................. 155,625
------------
TECHNOLOGY (22.1%)
25,376 Ansys Incorporated (b)....................... 269,620
33,900 The Bisys Group Inc. (b)..................... 1,089,037
20,300 Check Point Software Technology (b)(c)....... 629,300
19,300 Computer Products Inc. (b)................... 574,175
2,200 Dassault Systems SA (c)...................... 140,800
9,100 DII Group Incorporated (b)................... 298,309
17,800 DuPont Photomasks Incorporated (b)........... 1,281,600
44,500 Gartner Group Incorporated (b)............... 1,335,000
7,000 HNC Software Incorporated (b)................ 278,250
</TABLE>
See accompanying notes to investments in securities.
8
<PAGE>
ADVANTUS ENTERPRISE FUND
INVESTMENTS IN SECURITIES--CONTINUED
<TABLE>
<CAPTION>
MARKET
SHARES VALUE(a)
- ----------- ------------
<C> <S> <C>
TECHNOLOGY--CONTINUED
16,000 Integrated Process Equipment (b)............. $ 590,000
18,500 Integrated Systems (b)....................... 456,719
23,976 Mastech Corporation (b)...................... 815,184
19,300 Maximus Incorporated (b)..................... 558,494
20,700 National Data Corporation.................... 848,700
10,400 NCO Group Incorporated (b)................... 384,800
12,500 Peapod Incorporated (b)...................... 156,250
33,990 Rational Software Corporation (b)............ 543,840
5,001 Sapient Corporation (b)...................... 254,426
<CAPTION>
MARKET
SHARES VALUE(a)
- ----------- ------------
<C> <S> <C>
TECHNOLOGY--CONTINUED
40,100 Xylan Corporation (b)........................ $ 887,212
7,700 Zebra Technologies Corporation (b)........... 275,275
------------
11,666,991
------------
TRANSPORTATION (2.4%)
Air Freight (2.3%)
36,200 Eagle USA Airfreight, Inc. (b)............... 1,212,700
------------
Airlines (.1%)
1,500 Ryanair Holdings PLC-ADR (b)(c).............. 45,070
------------
Total common stocks
(cost: $34,570,268)...................................... 48,160,765
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
- ----------
<C> <S> <C> <C> <C>
SHORT-TERM SECURITIES (11.0%)
$ 795,000 U.S. Treasury Bill................................ 4.913% 12/11/97 787,316
4,115,000 U.S. Treasury Bill................................ 5.146% 10/02/97 4,114,535
925,000 U.S. Treasury Bill................................ 5.043% 11/06/97 920,541
-----------
Total short-term securities (cost: $5,822,044)........................... 5,822,392
-----------
Total investments in securities (cost: $40,392,312) (d).................. $53,983,157
-----------
-----------
</TABLE>
Notes to Investments in Securities
- ----------------------------
(a) Securities are valued by procedures described in note 2 to the financial
statements.
(b) Presently non-income producing.
(c) The Fund held 7.0% of the net assets in foreign securities as of September
30, 1997.
(d) At September 30, 1997 the cost of securities for federal income tax purposes
was $40,588,536. The aggregate unrealized appreciation and depreciation of
investments in securities based on this cost were:
<TABLE>
<S> <C>
Gross unrealized appreciation........... $14,301,828
Gross unrealized depreciation........... (907,207)
----------
Net unrealized appreciation............. $13,394,621
----------
----------
</TABLE>
9
<PAGE>
ADVANTUS ENTERPRISE FUND
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1997
<TABLE>
<S> <C>
ASSETS
Investments in securities, at market value--see accompanying
schedule for detailed listing (identified cost:
$40,392,312)............................................... $ 53,983,157
Cash in bank on demand deposit.............................. 48,207
Receivable for Fund shares sold............................. 5,009
Receivable for investment securities sold................... 591,309
Dividends receivable........................................ 4,984
Organizational costs........................................ 20,859
------------
Total assets............................................ 54,653,525
------------
LIABILITIES
Payable for Fund shares repurchased......................... 5,624
Payable for investment securities purchased................. 1,647,158
Payable to Adviser.......................................... 82,911
------------
Total liabilities....................................... 1,735,693
------------
Net assets applicable to outstanding capital stock.......... $ 52,917,832
------------
------------
Represented by:
Capital stock--authorized 10 billion shares (Class A--2
billion shares, Class B--2 billion shares, Class C--2
billion shares and 4 billion shares unallocated) of $.01
par value (note 1)....................................... $ 33,457
Additional paid-in capital................................ 40,172,759
Accumulated net realized losses from investments.......... (879,229)
Unrealized appreciation on investments.................... 13,590,845
------------
Total--representing net assets applicable to outstanding
capital stock.......................................... $ 52,917,832
------------
------------
Net assets applicable to outstanding Class A Shares......... $ 44,102,229
------------
------------
Net assets applicable to outstanding Class B Shares......... $ 7,682,813
------------
------------
Net assets applicable to outstanding Class C Shares......... $ 1,132,790
------------
------------
Shares outstanding and net asset value per share:
Class A--Shares outstanding 2,773,953..................... $ 15.90
------------
------------
Class B--Shares outstanding 498,168....................... $ 15.42
------------
------------
Class C--Shares outstanding 73,500........................ $ 15.41
------------
------------
</TABLE>
See accompanying notes to financial statements.
10
<PAGE>
ADVANTUS ENTERPRISE FUND
STATEMENT OF OPERATIONS
YEAR ENDED SEPTEMBER 30, 1997
<TABLE>
<S> <C>
Investment income:
Interest.................................................. $ 285,136
Dividends................................................. 109,885
-----------
395,021
-----------
Expenses (note 4):
Investment advisory fee................................... 350,613
Distribution fees--Class A................................ 111,488
Distribution fees--Class B................................ 57,079
Distribution fees--Class C................................ 9,561
Administrative services fee............................... 43,200
Amortization of organizational costs...................... 10,883
Custodian fees............................................ 15,350
Auditing and accounting services.......................... 12,984
Legal fees................................................ 2,793
Directors' fees........................................... 800
Registration fees......................................... 34,454
Printing and shareholder reports.......................... 27,093
Insurance................................................. 5,142
Other..................................................... 13,928
-----------
Total expenses........................................ 695,368
Less fees and expenses waived or absorbed:
Class A distribution fees............................... (74,325)
-----------
Total net expenses.................................... 621,043
-----------
Investment loss--net.................................. (226,022)
-----------
Realized and unrealized gains (losses) on investments:
Net realized losses on investments (note 3)............... (879,229)
Net change in unrealized appreciation or depreciation on
investments.............................................. 7,134,727
-----------
Net gains on investments.............................. 6,255,498
-----------
Net increase in net assets resulting from operations........ $ 6,029,476
-----------
-----------
</TABLE>
See accompanying notes to financial statements.
11
<PAGE>
ADVANTUS ENTERPRISE FUND
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED SEPTEMBER 30, 1997 AND 1996
<TABLE>
<CAPTION>
1997 1996
------------ ------------
<S> <C> <C>
Operations:
Investment loss--net............................ $ (226,022) $ (174,902)
Net realized gains (losses) on investments...... (879,229) 5,318,231
Net change in unrealized appreciation or
depreciation on investments.................... 7,134,727 632,962
------------ ------------
Increase in net assets resulting from
operations................................. 6,029,476 5,776,291
------------ ------------
Distributions to shareholders from net realized
gains on investments:
Class A....................................... (4,409,566) (958,916)
Class B....................................... (610,188) (64,472)
Class C....................................... (111,341) (4,766)
------------ ------------
Total distributions......................... (5,131,095) (1,028,154)
------------ ------------
Capital share transactions (notes 4 and 6):
Proceeds from sales:
Class A....................................... 3,424,384 4,254,677
Class B....................................... 2,970,730 3,090,839
Class C....................................... 583,065 697,287
Proceeds from shares issued as a result of
reinvested dividends:
Class A....................................... 3,124,576 487,551
Class B....................................... 608,807 64,304
Class C....................................... 102,187 4,767
Payments for redemption of shares:
Class A....................................... (1,748,809) (822,143)
Class B....................................... (1,070,175) (358,921)
Class C....................................... (375,526) (11,840)
------------ ------------
Increase in net assets from capital share
transactions............................... 7,619,239 7,406,521
------------ ------------
Total increase in net assets................ 8,517,620 12,154,658
Net assets at beginning of year................... 44,400,212 32,245,554
------------ ------------
Net assets at end of year......................... $ 52,917,832 $ 44,400,212
------------ ------------
------------ ------------
</TABLE>
See accompanying notes to financial statements.
12
<PAGE>
ADVANTUS ENTERPRISE FUND
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
(1) ORGANIZATION
Advantus Enterprise Fund, Inc. (the Fund) was incorporated on January 27,
1994. The Fund is registered under the Investment Company Act of 1940 (as
amended) as a diversified, open-end management investment company. The Fund's
investment objective is to seek the long-term accumulation of capital.
The Fund currently issues three classes of shares: Class A, Class B and
Class C shares. Class A shares are sold subject to a front-end sales charge.
Class B shares are sold subject to a contingent deferred sales charge payable
upon redemption if redeemed within six years of purchase. Class C shares are
sold without either a front-end sales charge or a contingent deferred sales
charge. Both Class B and Class C are subject to a higher Rule 12b-1 fee than
Class A shares. Both Class B and Class C shares automatically convert to Class A
shares at net asset value after a specified holding period. Such holding periods
decline as the amount of the purchase increases and range from 28 to 84 months
after purchase for Class B shares and 40 to 96 months after purchase for Class C
shares. All three classes of shares have identical voting, dividend, liquidation
and other rights and the same terms and conditions, except that the level of
distribution fees charged differs between Class A, Class B and Class C shares.
Income, expenses (other than distribution fees) and realized and unrealized
gains or losses are allocated to each class of shares based upon its relative
net assets.
On June 20, 1994, MIMLIC Asset Management Company (MIMLIC Management)
purchased 7,500 Class A shares and 7,500 Class B shares. Operations of the Fund
did not formally commence until September 16, 1994 when the shares became
effectively registered under the Securities Exchange Act of 1933. The Minnesota
Mutual Life Insurance Company (Minnesota Mutual), the parent of MIMLIC
Management, purchased 1,167,726 Class A shares for $12 million prior to
commencement of operations.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies followed by the Fund are summarized as
follows:
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 of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of increases and decreases in net assets
resulting from operations during the period. Actual results could differ from
those estimates.
INVESTMENTS IN SECURITIES
Investments in securities traded on a national exchange are valued at the
last sales price on that exchange prior to the time when assets are valued;
securities traded in the over-the-counter market and listed securities for which
no sale was reported on that date are valued on the basis of the last current
bid price, by an independent pricing service or at a price deemed best to
reflect fair value as quoted by dealers who make markets in these securities.
When market quotations are not readily available, securities are valued at fair
value as determined in good faith under procedures adopted by the Board of
Directors. Short-term securities are valued at market.
13
<PAGE>
ADVANTUS ENTERPRISE FUND
NOTES TO FINANCIAL STATEMENTS--CONTINUED
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)
Security transactions are accounted for on the date the securities are
purchased or sold. Realized gains and losses are calculated on the
identified-cost basis. Dividend income is recognized on the ex-dividend date and
interest income, including amortization of bond premium and discount computed on
a level yield basis, is accrued daily.
FEDERAL TAXES
The Fund's policy is to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
taxable income to shareholders. Therefore, no income tax provision is required.
The Fund's policy is to make required minimum distributions prior to December
31, in order to avoid federal excise tax.
Net investment income (loss) and net realized gains (losses) may differ for
financial statement and tax purposes primarily because of temporary book-to-tax
differences. The character of distributions made during the year from net
investment income or net realized gains may differ from their ultimate
characterization for federal income tax purposes. Also, due to the timing of
dividend distributions, the fiscal year in which amounts are distributed may
differ from the year that the income (loss) or realized gains (losses) were
recorded by the Fund.
For federal income tax purposes, the Fund has a capital loss carryover in
the amount of $683,005 which, if not offset by subsequent capital gains, will
expire September 30, 2005. It is unlikely the board of directors will authorize
a distribution of any net realized capital gain until the available capital loss
carryover has been offset or expires.
On the statement of assets and liabilities, as a result of permanent
book-to-tax differences, a reclassification adjustment was made to increase
undistributed net investment and decrease additional paid-in capital by
$226,022.
DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income are declared and paid quarterly.
Realized gains, if any, are paid annually.
(3) INVESTMENT SECURITY TRANSACTIONS
For the year ended September 30, 1997, purchases of securities and proceeds
from sales, other than temporary investments in short-term securities aggregated
$29,055,461 and $25,602,077, respectively.
(4) EXPENSES AND RELATED PARTY TRANSACTIONS
The Fund has an investment advisory agreement with Advantus Capital
Management, Inc. (Advantus Capital or the Adviser), a wholly-owned subsidiary of
MIMLIC Management. Under the agreement, Advantus Capital manages the Fund's
assets and provides research, statistical and advisory services and pays related
office rental and executive expenses and salaries. In addition, as part of the
advisory fee, Advantus Capital pays the expenses of the Fund's transfer,
dividend disbursing and redemption agent (Minnesota Mutual). The fee for
investment management and advisory services is based on the average daily net
assets of the Fund at the annual rate of .80 percent.
The Fund has adopted separate Plans of Distribution applicable to Class A,
Class B and Class C shares, respectively, relating to the payment of certain
distribution expenses pursuant to Rule 12b-1 under the Investment Company Act of
1940 (as amended). The Fund pays distribution fees to Ascend Financial
14
<PAGE>
ADVANTUS ENTERPRISE FUND
NOTES TO FINANCIAL STATEMENTS--CONTINUED
(4) EXPENSES AND RELATED PARTY TRANSACTIONS--(CONTINUED)
Services, Inc. (Ascend), formerly known as MIMLIC Sales Corporation, the
underwriter of the Fund and wholly-owned subsidiary of MIMLIC Management, to be
used to pay certain expenses incurred in the distribution, promotion and
servicing of the Fund's shares. The Class A Plan provides for a fee up to .30
percent of average daily net assets of Class A shares. The Class B and Class C
Plans provide for a fee up to 1.00 percent of average daily net assets of Class
B and Class C shares, respectively. The Class B and Class C 1.00 percent fee is
comprised of a .75 percent distribution fee and a .25 percent service fee.
Ascend is currently waiving that portion of Class A distribution fees which
exceeds, as a percentage of average daily net assets, .10 percent. Ascend waived
Class A distribution fees in the amount of $74,325 for the year ended September
30, 1997.
The Fund also bears certain other operating expenses including outside
directors' fees, custodian fees, registration fees, printing and shareholder
reports, legal fees, auditing and accounting services, organizational costs and
other miscellaneous expenses.
The Fund pays an administrative services fee, equal to $3,600 per month, to
Minnesota Mutual for accounting, auditing, legal and other administrative
services which Minnesota Mutual provides.
Advantus Capital directly incurs and pays the above operating expenses and
the Fund in turn reimburses Advantus Capital.
Sales charges received by Ascend for distributing the Fund's three classes
of shares amounted to $152,474.
As of September 30, 1997, Minnesota Mutual and subsidiaries and the
directors and officers of the Fund as a whole owned 2,225,146 Class A shares
which represents 80.2 percent of the total outstanding Class A shares.
Legal fees were paid to a law firm of which the Fund's secretary is a
partner in the amount of $2,793.
(5) ORGANIZATIONAL COSTS
The Fund incurred organizational expenses in connection with the start-up
and initial registration. These costs will be amortized over 60 months on a
straight-line basis beginning with the commencement of operations. If any or all
of the shares held by MIMLIC Management, or any other holder, representing
initial capital of the Fund are redeemed during the amortization period, the
redemption proceeds will be reduced by the pro rata portion (based on the ratio
that the number of initial shares redeemed bears to the total number of
outstanding initial shares of the Fund at the date of redemption) of the
unamortized organizational cost balance.
(6) CAPITAL SHARE TRANSACTIONS
Transactions in shares for the years ended September 30, 1997 and 1996 were
as follows:
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
--------------------- -------------------- --------------------
1997 1996 1997 1996 1997 1996
---------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Sold............................................... 245,582 286,168 221,245 208,560 42,231 46,994
Issued for reinvested distributions................ 228,685 35,236 45,958 4,523 7,841 337
Redeemed........................................... (129,287) (55,653) (80,568) (24,953) (28,172) (823)
---------- --------- --------- --------- --------- ---------
344,980 265,751 186,635 188,130 21,900 46,508
---------- --------- --------- --------- --------- ---------
---------- --------- --------- --------- --------- ---------
</TABLE>
15
<PAGE>
ADVANTUS ENTERPRISE FUND
NOTES TO FINANCIAL STATEMENTS--CONTINUED
(7) FINANCIAL HIGHLIGHTS
Per share data for a share of capital stock and selected information for
each period are as follows:
<TABLE>
<CAPTION>
CLASS A
---------------------------------------------
PERIOD FROM
SEPTEMBER
YEAR ENDED SEPTEMBER 30, 16, 1994(B)
------------------------------ TO SEPTEMBER
1997 1996 1995(A) 30, 1994
-------- -------- -------- ------------
<S> <C> <C> <C> <C>
Net asset value, beginning of
period....................... $ 15.94 $ 14.08 $ 11.03 $ 11.12
-------- -------- -------- ------------
Income from investment
operations:
Net investment income
(loss)..................... (.04) (.05) (.04) --
Net gains or losses on
securities (both realized
and unrealized)............ 1.74 2.34 3.11 (.09)
-------- -------- -------- ------------
Total from investment
operations............... 1.70 2.29 3.07 (.09)
-------- -------- -------- ------------
Less distributions:
Dividends from net
investment income.......... -- -- -- --
Distributions from capital
gains...................... (1.74) (.43) (.02) --
-------- -------- -------- ------------
Total distributions....... (1.74) (.43) (.02) --
-------- -------- -------- ------------
Net asset value, end of
period....................... $ 15.90 $ 15.94 $ 14.08 $ 11.03
-------- -------- -------- ------------
-------- -------- -------- ------------
Total return (c).............. 12.9% 16.7% 27.9% (.8)%
Net assets, end of period (in
thousands)................... $ 44,102 $ 38,722 $30,454 $12,964
Ratio of expenses to average
daily net assets (d)(e)...... 1.28% 1.31% 1.34% .05%(f)
Ratio of net investment income
(loss) to average daily net
assets (d)(e)................ (.32)% (.38)% (.48)% (.02)%(f)
Portfolio turnover rate
(excluding short-term
securities).................. 65.8% 80.2% 48.8% 5.0%
Average commission rate on
stock transactions (h)....... $ .0915 $ .1150 N/A N/A
</TABLE>
- ------------
(a) Effective March 1, 1995, the Fund entered into a new investment advisory
agreement with Advantus Capital Management, Inc. Prior to March 1, 1995, the
Fund had an investment advisory agreement with MIMLIC Asset Management
Company.
(b) Commencement of operations.
(c) Total return figures are based on a share outstanding throughout the period
and assumes reinvestment of distributions at net asset value. Total return
figures do not reflect the impact of front-end or contingent deferred sales
charges. For periods less than one year, total return presented has not been
annualized.
(d) The Fund's Distributor and Adviser voluntarily waived or absorbed $83,999
and $1,430 in expenses for the year ended September 30, 1995 and the period
ended September 30, 1994, respectively. If the Fund had been charged for
these expenses, the ratio of expenses to average daily net assets would have
been 1.75% and .06% for Class A shares, respectively, 2.39% and .10% for
Class B shares, respectively and 2.32% for Class C shares. The ratio of net
investment income (loss) to average daily net assets would have been (.89)%
and (.03)% for Class A shares, respectively, (1.60)% and (.07)% for Class B
shares, respectively and (1.65)% for Class C shares.
(e) The Fund's Distributor voluntarily waived $74,325 and $68,785 in Class A
distribution fees for the years ended September 30, 1997 and 1996,
respectively. If the Fund had been charged for these fees, the ratio of
expenses to average daily net assets would have been 1.48% and 1.51%,
respectively, and the ratio of net investment income (loss) to average daily
net assets would have been (.52%) and (.58%), respectively, for Class A
shares.
16
<PAGE>
ADVANTUS ENTERPRISE FUND
NOTES TO FINANCIAL STATEMENTS--CONTINUED
<TABLE>
<CAPTION>
CLASS B CLASS C
--------------------------------------------- ----------------------------------
PERIOD FROM PERIOD FROM
SEPTEMBER YEAR ENDED MARCH 1,
YEAR ENDED SEPTEMBER 30, 16, 1994(B) SEPTEMBER 30, 1995(B) TO
------------------------------ TO SEPTEMBER ------------------- SEPTEMBER
1997 1996 1995(A) 30, 1994 1997 1996 30, 1995
-------- -------- -------- ------------ -------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period....................... $ 15.64 $ 13.94 $ 11.02 $ 11.12 $ 15.63 $ 13.94 $ 11.58
-------- -------- -------- ------ -------- -------- ------
Income from investment
operations:
Net investment income
(loss)..................... (.18) (.12) (.09) (.01) (.23) (.09) (.06)
Net gains or losses on
securities (both realized
and unrealized)............ 1.70 2.25 3.03 (.09) 1.75 2.21 2.42
-------- -------- -------- ------ -------- -------- ------
Total from investment
operations............... 1.52 2.13 2.94 (.10) 1.52 2.12 2.36
-------- -------- -------- ------ -------- -------- ------
Less distributions:
Dividends from net
investment income.......... -- -- -- -- -- -- --
Distributions from capital
gains...................... (1.74) (.43) (.02) -- (1.74) (.43) --
-------- -------- -------- ------ -------- -------- ------
Total distributions....... (1.74) (.43) (.02) -- (1.74) (.43) --
-------- -------- -------- ------ -------- -------- ------
Net asset value, end of
period....................... $ 15.42 $ 15.64 $ 13.94 $ 11.02 $ 15.41 $ 15.63 $ 13.94
-------- -------- -------- ------ -------- -------- ------
-------- -------- -------- ------ -------- -------- ------
Total return (c).............. 11.9% 15.7% 26.7% (.9)% 11.9% 15.6% 20.4%
Net assets, end of period (in
thousands)................... $ 7,683 $ 4,871 $ 1,720 $ 96 $ 1,133 $ 807 $ 71
Ratio of expenses to average
daily net assets (d)(e)...... 2.18% 2.20% 2.24% .09%(f) 2.18% 2.19% 2.24%(g)
Ratio of net investment income
(loss) to average daily net
assets (d)(e)................ (1.60)% (1.25)% (1.45)% (.06)%(f) (1.75)% (1.22)% (1.57)%(g)
Portfolio turnover rate
(excluding short-term
securities).................. 65.8% 80.2% 48.8% 5.0% 65.8% 80.2% 48.8%
Average commission rate on
stock transactions (h)....... $ .0915 $ .1150 N/A N/A $ .0915 $ .1150 N/A
</TABLE>
- ------------
(f) Ratios presented for the period from September 16, 1994 to September 30,
1994 are not annualized as they are not indicative of anticipated results.
(g) Adjusted to an annual basis.
(h) Beginning in fiscal 1996, the Fund is required to disclose an average
brokerage commission rate. The rate is calculated by dividing the total
brokerage commissions paid on applicable purchases and sales of stocks for
the period by the total number of related shares purchased and sold.
17
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders
Advantus Enterprise Fund, Inc.:
We have audited the accompanying statement of assets and liabilities,
including the schedule of investments in securities, of the Advantus Enterprise
Fund, Inc. (the Fund) as of September 30, 1997 and the related statement of
operations for the year then ended, the statement of changes in net assets for
the two years then ended and the financial highlights for the three years then
ended and the period from September 16, 1994 to September 30, 1994. These
financial statements and the financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and the financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Investment securities held in custody are confirmed to us by the
custodian. As to securities purchased or sold but not received or delivered, we
request confirmations from brokers, and where replies are not received, we carry
out other appropriate auditing procedures. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and the financial highlights
referred to above present fairly, in all material respects, the financial
position of the Fund as of September 30, 1997 and the results of its operations,
changes in its net assets and financial highlights for the periods stated in the
first paragraph above, in conformity with generally accepted accounting
principles.
KPMG Peat Marwick LLP
Minneapolis, Minnesota
November 7, 1997
18
<PAGE>
ADVANTUS ENTERPRISE FUND
FEDERAL INCOME TAX INFORMATION
The following information for federal income tax purposes is presented as an
aid to shareholders in reporting the distributions paid by the Fund in the
fiscal year ended September 30, 1997. Dividends for the 1997 calendar year, if
any, will be reported to you on Form 1099-Div in late January 1998. Shareholders
should consult a tax adviser on how to report these distributions for state and
local purposes.
CLASS A, CLASS B AND CLASS C
<TABLE>
<CAPTION>
PAYABLE DATE PER SHARE
- -------------------------------------------------------------------------------------------------------- -----------
<S> <C>
Income distribution--taxable as dividend income, none qualifying for deduction by corporations.
December 26, 1996....................................................................................... $ 0.5632
-----------
-----------
Capital gains distribution--taxable as long-term captial gains
December 19, 1996....................................................................................... $ 1.1723
-----------
-----------
</TABLE>
The distribution of $.5632 payable on December 26, 1996 represents
short-term capital gains (taxable as dividend income).
19
<PAGE>
SHAREHOLDER SERVICES
The Advantus Family of Funds offers a variety of services that enhance your
ability to manage your assets. Check each Fund's prospectus for the details of
the services and any limitations that apply to a particular Fund.
EXCHANGE PRIVILEGES: You can move all or part of your investment dollars from
one fund to any other Advantus Fund you own (for identical registrations within
the same class) at any time as your needs change. Exchanges are at the then
current net asset value (exchanges from the Advantus Money Market Fund will
incur the applicable sales charge, if not previously subjected to the charge).
Shareholders may make four exchanges or telephone transfers between the Funds
each calendar year without incurring a transaction charge. Thereafter, there
will be a $7.50 transaction charge for each additional exchange or transfer
within the calendar year. Systematic Exchange Plans are exempt from this charge.
INCOME DISTRIBUTION FLEXIBILITY: You can have your fund dividends and other
distributions automatically reinvested with no sales charge, direct them from
one Advantus Fund to any other you own within the Fund family or, if you desire,
we'll pay you in cash.
SYSTEMATIC WITHDRAWAL PLAN: You can set up a plan to receive checks at
specified intervals from your fund account--subject to minimum guidelines.
Depending upon the performance of the underlying investment options, the value
may be worth more or less than the original amount invested when withdrawn.
DIRECT DEPOSITS: At your request we will deposit your dividends or systematic
withdrawals directly into your checking or savings account instead of sending
you a check.
TELEPHONE TRANSFER: You may transfer money from one Advantus account to any
other Advantus account you own just by calling our toll free number. Sign up for
telephone exchanges on the Advantus Application or complete the telephone
authorization form.
SYSTEMATIC TRANSFER: If you have an Advantus Money Market account you may
transfer a set amount of money to another Advantus Fund to diversify your
investment portfolio and take advantage of dollar-cost averaging.
AUTOMATIC PAYMENT OF INSURANCE PREMIUMS: You may automatically pay your
Minnesota Mutual insurance premiums out of your Advantus Money Market account.
REDUCED SALES CHARGES: Letter of Intent, combined purchases with spouse,
children or single trust estates, and the Right of Accumulation make it possible
for you to reduce the sales charge on Advantus' non-money market funds.
SPECIAL PURCHASE PLANS: Our special purchase plans enable you to open an
Advantus Fund account for as little as $25 and lower your average share cost
through "dollar-cost averaging." (Dollar-cost averaging does not assure a
profit, nor does it prevent loss in declining markets.) One of these plans--The
Automatic Investment Plan--allows you to invest automatically each month from
your checking or savings account.
IRAS, OTHER QUALIFIED PLAN: You can use the Advantus Family of Funds for your
Individual Retirement Account or other qualified plan including SEPS, SIMPLE,
profit sharing, money purchase or defined benefit plans.
GROUP INVESTMENT PLAN: This plan provides employers and employees with a
convenient means for investing in the funds through payroll deduction.
TELEPHONE REDEMPTION: You may call us and redeem shares over the phone. The
proceeds will be sent by check to the address of record for the account. Amounts
over $1,000 may be wire transferred to your personal bank account. The
prevailing wire charge will be added to the withdrawal amount. Sign up for
20
<PAGE>
telephone redemption on the Advantus Application or complete a Service Request
Form. To have the redemption automatically deposited into your checking account,
please send a voided check from your bank. Depending on the performance of the
underlying investment options, the value may be worth more or less than the
original amount invested upon redemption. Some limitations apply, please refer
to the prospectus for details.
ACCOUNT UPDATES: You'll receive written confirmation of every investment you
initiate (monthly statements for your Money Market account) and quarterly
reports to help you track all of your investments in the Advantus Family of
Funds, and annual tax statements. Semi-annual and annual reports will provide
you with portfolio information, fund performance data and the current investment
outlook.
TOLL-FREE SERVICE LINE: For your convenience in obtaining information and
assistance directly from Advantus Shareholder Services, call 1-800-665-6005. Our
voice response system is available from 7 a.m. to 3 a.m. Central Time Monday
through Friday, and 8 a.m. to 5 p.m. Central Time on Saturday. This system
allows you to access current net asset values and your account balances.
HOW TO INVEST
You can invest in one or more of the ten Advantus Funds through your local
registered representative of Ascend Financial Services, Inc. (formerly known as
MIMLIC Sales Corporation), distributor of the Funds. Contact your representative
for information and a prospectus for any of the Advantus Funds you are
interested in.
MINIMUM INVESTMENTS: Your initial investment in any of the Advantus Funds can
be as small as $25 when you use our Systematic Investment Plan. Minimum lump-sum
initial investment is $250. Minimum subsequent investment is $25.
THE FUND'S MANAGER
Advantus Capital Management, Inc., investment adviser to the Fund, selects
and reviews the Fund's investments and provides executive and other personnel
for the Fund's management.
Advantus Capital Management, Inc. manages twelve mutual funds containing
$2.5 billion in assets in addition to $1.8 billion in assets for other clients.
Advantus Capital's seasoned portfolio managers average more than 11 years of
investment experience.
ADVANTUS FAMILY OF FUNDS
Advantus Bond Fund
Advantus Horizon Fund
Advantus Spectrum Fund
Advantus Enterprise Fund
Advantus Cornerstone Fund
Advantus Money Market Fund
Advantus Mortgage Securities Fund
Advantus International Balanced Fund
Advantus Venture Fund
Advantus Index 500 Fund
21
<PAGE>
THIS REPORT HAS BEEN PREPARED FOR SHAREHOLDERS AND MAY BE DISTRIBUTED
TO OTHERS ONLY IF PRECEDED OR ACCOMPANIED BY A CURRENT PROSPECTUS.
READ THE PROSPECTUS CAREFULLY BEFORE YOU INVEST.
[ADVANTUS -TM- FAMILY OF FUNDS]
ASCEND FINANCIAL SERVICES, INC.,
SECURITIES DEALER, MEMBER NASD/SIPC
400 ROBERT STREET NORTH
ST. PAUL, MN 55101-2098
1-888-AFS-1838
(1-888-237-1838)
<PAGE>
ASCEND FINANCIAL SERVICES, INC. BULK RATE
400 ROBERT STREET NORTH U.S. POSTAGE PAID
ST. PAUL, MN 55101-2098 ST. PAUL, MN
PERMIT NO. 3547
FORWARDING AND RETURN POSTAGE GUARANTEED,
ADDRESS CORRECTION REQUESTED
F.48647 Rev. 11-1997
