<PAGE>
ENTERPRISE
ADVANTUS ENTERPRISE FUND, INC.
SEMI-ANNUAL REPORT TO SHAREHOLDERS DATED MARCH 31, 1999
[LOGO]
ADVANTUS-TM-
FAMILY OF FUNDS
[ART]
EQUITY
<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
SHAREHOLDER SERVICES 18
<PAGE>
LETTER FROM THE PRESIDENT [PHOTO]
Dear Shareholders:
U.S. economic expansion, in its longevity and in vigor, is the envy of the rest
of the world. While growth in Europe and the United Kingdom is falling, we are
finally seeing some small improvements in Asia's economic angst; it also appears
that Japan's economic free fall has stopped. However, a working plan for a
sustainable recovery in Japan is still forthcoming. As you can see, growth
patterns around the globe are mixed, but overall, world growth is forecasted to
decline by about one percent over the course of 1999. (World growth is
forecasted to be two percent in 1999.)
In this six-month reporting period, U.S. Gross Domestic Product (GDP) in the
fourth quarter 1998 was 6.0 percent. This phenomenal result was fueled by strong
consumer demand and spending. GDP figures for the first quarter 1999 are
estimated at a respectable 4 percent. This economic growth was very broad based,
despite some export difficulties. Above-trend growth is expected for the
remainder of the year.
Will inflation spoil the party? It's unlikely. Weak commodity prices coupled
with excess global capital and labor has created an inflation-benign
environment. The inflation outlook in the U.S. continues to be positive, as
well.
The strong momentum in top-tier large cap growth stocks continues to drive the
equity market. Some trends have continued, such as large cap stocks
outperforming small caps and growth stocks outperforming value stocks. The
breadth of leadership of the equity market has continued to narrow, with only
26.3 percent of the issuers in the S&P 500* able to outperform their index over
the last twelve months. The average equity mutual fund has lagged the market
unless it has been overweighted in growth and technology investments. Valuations
in the marketplace continue to be high, particularly in the large cap growth
weighted indices.
Stronger economic growth increased investors' comfort with corporate bonds and
thus the spread to Treasury bonds narrowed. In the fixed-income market,
mortgage-backed securities were the star performers this period, followed by
corporate bonds, and then Treasuries.
The economic and market outlook for the U.S. remains strong. Looking ahead, we
are cautiously optimistic for stock and bond prices, but valuations for
large-cap growth issues are high. Economic growth is forecasted, albeit slower
than in the past. With much of the world still in recession, commodity prices
low, and rapid increases in technology and productivity, high inflation is
unlikely. The Federal Reserve and other central banks stand ready to intervene
if necessary. We are watchful of Y2K issues. Certain countries that are mired in
prolonged recessions lack the money to solve these technology-related problems.
We are - along with the rest of the world - watching the political strife in the
Balkans. The military action in Kosovo has commanded world attention. Escalation
will prove costly in money and human resources.
In the pages that follow, the Fund's manager will update you on how the economy
and the market affected the Fund during this reporting period. The manager will
discuss the Fund's performance and some strategies used to maximize performance.
As always, we thank you for investing with Advantus. We encourage you to
maintain a long-range view of investing; we believe you will derive the greatest
benefit by doing so.
Sincerely,
/s/ William N. Westhoff
William N. Westhoff, President
Advantus Funds
*The S&P 500 is a broad, unmanaged index of 500 common stocks which are
representative of the U.S. stock market overall.
<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 capitalization
companies (i.e., companies
with a market capitalization
of less than $1.5 billion) at
the time of purchase. In
selecting equity securities,
the Fund invests in
securities that the
investment adviser believes
show sustainable earnings
growth potential and
improving profitability.
- Dividends paid quarterly.
- Capital gains distributions paid annually.
PERFORMANCE
For the six-month period ended March 31, 1999, the Advantus Enterprise Fund
returned the following for each class of shares currently offered:
<TABLE>
<S> <C>
CLASS A.......................... 22.35 PERCENT*
CLASS B.......................... 21.88 PERCENT*
CLASS C.......................... 21.88 PERCENT*
</TABLE>
The Fund's benchmark, the Russell 2000 Growth Index** returned 21.57 percent for
the same period.
PERFORMANCE ANALYSIS
In six-month period covered by this report, small cap growth stocks experienced
a brief hiatus from the asset class' long-term pummeling in the marketplace.
Small cap growth stocks had an outstanding fourth quarter, 1998, but within a
few months, small cap growth stocks returned to the uncertainty that was
prevalent for some time. Shortfalls in revenues and earnings became more
noticeable during the first quarter of 1999. Although growth outside the U.S.
was strong, this did little to help the small companies, who rely predominately
on the domestic economy. Year 2000 (Y2K) spending may be one of the culprits as
increased costs and reductions in near-term revenues have negatively impacted
companies.
Utilities, Energy and Consumer Discretionary were the only sectors of the
Russell 2000 Growth Index** to enjoy positive returns during first quarter 1999.
March's sharp increase in oil prices drove energy stocks upward, but the Index
enjoyed little benefit with a scant 1.7 percent weighting in energy. At least
nine of the top 15 contributors to the Index were Internet stocks, comprising
12.6 percent of the Index weighting and contributing 5.47 percent to first
quarter performance. In fact, the Index would have been down 7.15 percent
without the contribution of the Internet stocks.
Our previous discussion of Internet stocks within the Russell 2000 Growth
Index** highlighted their signficant contribution to that Index's overall
performance. Internet stocks comprise only a small percentage of our portfolio.
Let me tell you why we do not heavily invest in this area. Survivorship concerns
and lack of a viable business model in many of these companies (not to mention
no real earnings for years to come) have prevented us from owning meaningful
positions. Our strategy has been to own solid companies with strong management,
an established business plan, and significant earnings growth. One such company,
USWeb Corporation, has been a key contributor to performance. A leader in
Internet-focused services, the company's ability to offer turnkey solutions
encompassing strategy, technology and creative development distinguishes it from
its competitors. As customer needs grow, USWeb should develop a stronger base of
recurring revenue.
2
<PAGE>
In the first half of the reporting period (fourth quarter, 1998), The Fund's
performance was driven by a diverse group of stocks, but was lead by
technology-oriented companies. These included CKS Group (integrated marketing
communications services), Acxiom Corporation (database management software), DII
Group (electronics design and manufacturing services), and Terayon
Communications (high capacity cable modem systems). Other positive contributors
to performance included TV Guide, Inc. (satellite delivered video, audio and
data services, and integration to various mediums), Copart, Inc. (salvaged
vehicle service provider for insurance companies), and Uniphase Corporation
(laser sub-systems used in semiconductor manufacturing). These companies
reported strong earnings and expanded their market opportunities for future
growth.
In difficult periods, such as the first quarter, 1999, laggards in the Fund can
significantly hurt performance. Tropical Sportswear International, for example,
has been a very good performer for the Fund but ran into soft demand for its
casual basics apparel products. We plan to keep it in the Fund as it continues
to be a well-managed company with solid prospects.
The weakest area in the Fund was health care. Shortfalls in revenue and earnings
stemming from concerns about Medicare reimbursements drove the sector's poor
performance. Medicare reimbursements are decreasing across the industry, but the
magnifying glass is on companies that are deemed "too profitable." A number of
these companies have historically been attractive Fund prospects due to their
solid business plans, strong management and emphasis on lowering the costs of
health care services. Until recently, these companies were considered part of
the solution - not the problem - for the health care industry. The economics
have not changed: These companies have reduced overall health care costs while
increasing the number of services offered. However, even strong companies sell
off in an irrational environment, as is the case here. Our strategy has been to
isolate the Fund's Medicare exposure and minimize our positions, where
appropriate.
OUTLOOK
As we look ahead to the rest of 1999, we are cautiously optimistic about the
prospects for small growth stocks and the Fund. Earnings comparisons should
improve and valuations continue to be very cheap, both relative to large cap
stocks and on an absolute basis. Economic strength overseas should help buffer a
soft U.S. economy, but an escalation of the conflict in Kosovo could trigger a
negative reaction in the markets - at least until the conclusion is assured.
Our disciplined style of investing, which focuses on the fundamentals of
individual companies, is not always rewarded in volatile and narrowly focused
markets like this one. However, we believe we have a winning strategy for the
long haul. We remain confident in our ability to find value in smaller growth
stocks that are potentially tomorrow's leaders.
*Historical performance is not an indication of future performance. These
performance results do not reflect the impact of Class A's maximum 5.5 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 Growth Index contains stock from the Russell 2000 with a
greater than average growth orientation. The Russell 2000 is the 2,000 smallest
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.
3
<PAGE>
COMPARISON OF CHANGE IN VALUE OF A HYPOTHETICAL $10,000
INVESTMENT IN ADVANTUS ENTERPRISE FUND,
RUSSELL 2000 GROWTH 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 Russell 2000
Growth 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 March 31, 1999.
CLASS A AND B
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN:
<S> <C> <C> <C> <C>
Class A:
One year -18.30%
Since inception
(9/16/94) 7.26%
Class B:
One year -18.57%
Since inception
(9/16/94) 7.39%
(Thousands)
Class A Class B Russell 2000 CPI
Growth Index
9/16/94 $10,000 $10,000 $10,000 $10,000
9/30/94 9,419 9,910 10,042 10,128
9/30/95 12,044 12,107 12,616 10,351
9/30/96 14,051 14,173 14,391 10,662
9/30/97 15,861 16,000 17,737 10,899
9/30/98 11,292 11,315 13,331 11,054
3/31/99 13,816 13,824 16,207 11,149
</TABLE>
4
<PAGE>
CLASS C
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN:
<S> <C> <C> <C>
Class C:
One year -14.23%
Since inception
(3/1/95) 7.42%
(Thousands)
Class C CPI Russell 2000
Growth Index
3/1/95 $10,000 $10,000 $10,000
9/30/95 12,038 12,563 10,146
9/30/96 13,913 14,331 10,450
9/30/97 15,568 17,662 10,682
9/30/98 10,992 13,276 10,834
3/31/99 13,396 16,139 10,927
</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 5.5 percent front-end sales charge for Class A and the maximum
applicable contingent deferred sales charge for Class B shares. The maximum
initial sales charge for Class A shares was 5.0 percent prior to February 1,
1999. Sales charges pay for your financial professional's investment advice.
Individuals cannot invest in the index itself, nor can they invest in any fund
which seeks to track the performance of the index 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>
TEN LARGEST STOCK HOLDINGS
<TABLE>
<CAPTION>
MARKET % OF STOCK
COMPANY SHARES VALUE PORTFOLIO
- ------------------------------------------- -------- ---------- -----------
<S> <C> <C> <C>
DII Group, Inc............................. 67,000 $1,959,750 4.5%
Copart, Inc................................ 82,000 1,701,500 4.0%
Acxiom Corporation......................... 63,640 1,686,460 3.9%
USWeb Corporation.......................... 36,550 1,507,688 3.5%
United Rentals, Inc........................ 49,600 1,413,600 3.3%
United Video Satellite Group............... 37,500 1,382,812 3.2%
NCO Group, Inc............................. 35,600 1,317,200 3.1%
Sunrise Assisted Living, Inc............... 27,633 1,259,029 2.9%
Bysis Group, Inc........................... 21,800 1,226,250 2.8%
Eagle USA Airfreight, Inc.................. 36,800 1,196,000 2.8%
---------- ---
$14,650,289 34.0%
---------- ---
---------- ---
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Cash and Other
Assets/Liabilities 6.0%
Energy 1.7%
Consumer Staples 3.0%
Financial 3.6%
Transportation 4.3%
Basic Materials 5.2%
Capital Goods 7.4%
Health Care 15.5%
Consumer Cyclical 19.5%
Technology 33.8%
</TABLE>
6
<PAGE>
ADVANTUS ENTERPRISE FUND
INVESTMENTS IN SECURITIES
MARCH 31, 1999
(UNAUDITED)
(Percentages of each investment category relate to total net assets.)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE(A)
- ------------ -------------
<C> <S> <C>
COMMON STOCK (94.0%)
BASIC MATERIALS (5.2%)
Agriculture Products (2.9%)
35,600 NCO Group, Inc. (b)......................................... $ 1,317,200
-------------
Chemicals (2.3%)
47,774 Cambrex Corporation......................................... 1,057,000
-------------
CAPITAL GOODS (7.4%)
Aerospace/Defense (1.0%)
21,100 HEICO Corporation........................................... 451,012
-------------
Engineering/Construction (5.6%)
26,300 Dycom Industries, Inc. (b).................................. 1,144,050
49,600 United Rentals, Inc. (b).................................... 1,413,600
-------------
2,557,650
-------------
Manufacturing (.8%)
17,400 Graco, Inc. ................................................ 383,887
-------------
CONSUMER CYCLICAL (19.5%)
Auto (1.3%)
20,400 CSK Auto Corporation (b).................................... 610,725
-------------
Distribution Durables (.9%)
23,100 MSC Industrial Direct Company (b)........................... 392,700
-------------
Houseware (.3%)
5,600 Select Comfort Corporation (b).............................. 156,100
-------------
Leisure (1.2%)
25,522 National R V Holdings, Inc. (b)............................. 564,674
-------------
Retail (3.3%)
10,900 Abercrombie & Fitch Company (b)............................. 1,002,800
6,300 Kohl's Corporation (b)...................................... 446,512
300 Priceline.com, Inc. (b)..................................... 24,862
2,200 Ziff-Davis, Inc. (b)........................................ 41,800
-------------
1,515,974
-------------
<CAPTION>
MARKET
SHARES VALUE(A)
- ------------ -------------
<C> <S> <C>
CONSUMER CYCLICAL--CONTINUED
Service (10.4%)
63,640 Acxiom Corporation (b)...................................... $ 1,686,460
2,700 CMGI, Inc. (b).............................................. 494,269
82,000 Copart, Inc. (b)............................................ 1,701,500
90,100 Fairfield Communities, Inc. (b)............................. 805,269
9,200 Sterigenics International, Inc. (b)......................... 89,700
-------------
4,777,198
-------------
Textiles (2.1%)
47,800 Tropical Sportswear International (b)....................... 973,925
-------------
CONSUMER STAPLES (3.0%)
Broadcasting (3.0%)
37,500 United Video Satellite Group (b)............................ 1,382,812
-------------
Food & Health ( -- )
100 Valley Medica, Inc. (b)..................................... 2,275
-------------
ENERGY (1.7%)
Oil (.8%)
49,500 Newpark Resources, Inc. (b)................................. 358,875
-------------
Oil & Gas (.9%)
14,000 J Ray McDermott Holdings, Inc. (b).......................... 418,250
-------------
FINANCIAL (3.6%)
Banks (.3%)
10,200 GBC Bancorp (b)............................................. 153,000
-------------
Commercial Finance (.9%)
15,100 HealthCare Financial Partners (b)........................... 394,487
-------------
Insurance (2.4%)
19,650 Reinsurance Group of America, Inc. ......................... 836,353
24,800 Scottish Life & Annuity Holdings (b)........................ 241,800
-------------
1,078,153
-------------
</TABLE>
See accompanying notes to investments in securities.
7
<PAGE>
ADVANTUS ENTERPRISE FUND
INVESTMENTS IN SECURITIES - CONTINUED
<TABLE>
<CAPTION>
MARKET
SHARES VALUE(A)
- ------------ -------------
HEALTH CARE (15.5%)
<C> <S> <C>
Biotechnology (2.7%)
4,100 Gilead Sciences, Inc. (b)................................... $ 186,550
31,700 Pharmaceutical Product Development (b)...................... 1,063,931
-------------
1,250,481
-------------
Drugs (.4%)
27,100 Cygnus, Inc. (b)............................................ 203,250
-------------
Hospital Management (2.8%)
27,633 Sunrise Assisted Living, Inc. (b)........................... 1,259,029
-------------
Managed Care (1.4%)
43,683 Concentra Managed Care, Inc. (b)............................ 633,403
-------------
Medical Products/Supplies (8.2%)
25,000 Amerisource Health Corporation (b).......................... 854,687
40,400 Hanger Orthopedic Group (b)................................. 545,400
25,400 Patterson Dental Company (b)................................ 1,098,550
34,600 Sybron International Corporation (b)........................ 865,000
34,700 Total Renal Care Holdings, Inc. (b)......................... 381,700
-------------
3,745,337
-------------
TECHNOLOGY (33.8%)
15,500 Alpha Industries, Inc. (b).................................. 284,812
13,600 ANADIGICS, Inc. (b)......................................... 239,700
7,500 Aspect Development, Inc. (b)................................ 174,375
21,800 Bysis Group, Inc. (b)....................................... 1,226,250
9,800 Cree Research, Inc. (b)..................................... 459,988
67,000 DII Group, Inc. (b)......................................... 1,959,750
17,300 DuPont Photomasks, Inc. (b)................................. 685,513
41,500 Gartner Group, Inc. (b)..................................... 936,344
<CAPTION>
MARKET
SHARES VALUE(A)
- ------------ -------------
<C> <S> <C>
TECHNOLOGY--CONTINUED
45,400 GaSonics International Corporation (b)...................... $ 499,400
29,450 Global Imaging Systems, Inc. (b)............................ 392,053
26,600 HNC Software, Inc. (b)...................................... 871,150
22,700 Infinium Software, Inc. (b)................................. 102,150
19,500 IntraNet Solutions, Inc. (b)................................ 160,875
7,500 Level One Communications, Inc. (b).......................... 364,688
20,852 Mastech Corporation (b)..................................... 271,076
31,300 Maximus, Inc. (b)........................................... 911,613
20,200 Orbotech, Ltd. (b) (c)...................................... 992,325
17,300 Peapod, Inc. (b)............................................ 189,219
3,802 Sapient Corporation (b)..................................... 271,368
47,000 Saville Systems ADR (b) (c)................................. 575,750
37,700 Secure Computing Corporation (b)............................ 395,850
44,500 Softworks, Inc. (b)......................................... 634,125
11,700 Terayon Communication Systems (b)........................... 468,000
7,900 Uniphase Corporation (b).................................... 909,488
36,550 USWeb Corporation (b)....................................... 1,507,688
-------------
15,483,550
-------------
TRANSPORTATION (4.3%)
Air Freight (2.6%)
36,800 Eagle USA Airfreight, Inc. (b).............................. 1,196,000
-------------
Airlines (1.7%)
26,400 Skywest, Inc. .............................................. 762,300
-------------
Total common stock (cost: $32,895,517)..................................... 43,079,247
-------------
</TABLE>
See accompanying notes to investments in securities.
8
<PAGE>
ADVANTUS ENTERPRISE FUND
INVESTMENTS IN SECURITIES - CONTINUED
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE(A)
- ------------ -------------
<C> <S> <C> <C> <C>
SHORT-TERM SECURITIES (5.6%)
$ 1,565,642 Federated Prime Obligation Fund, current rate 4.860%........ $ 1,565,642
1,025,000 U.S. Treasury Note..................... 4.560% 05/20/99 1,018,792
-------------
Total short-term securities (cost: $2,584,397).............. 2,584,434
-------------
Total investments in securities (cost: $35,479,914)(d)...... $ 45,663,681
-------------
-------------
</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 3.4% of the net assets in foreign securities as of March 31,
1999.
(d) At March 31, 1999 the cost of securities for federal income tax purposes was
$36,250,524. The aggregate unrealized appreciation and depreciation of
investments in securities based on this cost were:
<TABLE>
<S> <C>
Gross unrealized appreciation.............................................. $ 12,749,350
Gross unrealized depreciation.............................................. (3,336,193)
-------------
Net unrealized appreciation................................................ $ 9,413,157
-------------
-------------
</TABLE>
9
<PAGE>
ADVANTUS ENTERPRISE FUND
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Investments in securities, at market value - see
accompanying schedule for detailed listing
(identified cost: $35,479,914)............................. $ 45,663,681
Cash in bank on demand deposit.............................. 4,657
Receivable for Fund shares sold............................. 10,831
Receivable for investment securities sold................... 350,833
Accrued interest receivable................................. 6,874
Dividends receivable........................................ 960
Organizational costs (note 5)............................... 4,534
Other receivables........................................... 12,900
-------------
Total assets............................................ 46,055,270
-------------
<CAPTION>
LIABILITIES
<S> <C>
Payable for investment securities purchased................. 105,525
Payable for Fund shares redeemed............................ 28,035
Payable to Adviser.......................................... 63,911
-------------
Total liabilities....................................... 197,471
-------------
Net assets applicable to outstanding capital stock.......... $ 45,857,799
-------------
-------------
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)........................................ $ 33,347
Additional paid-in capital................................ 39,380,305
Accumulated net realized losses from investments.......... (3,739,620)
Unrealized appreciation on investments.................... 10,183,767
-------------
Total - representing net assets applicable to
outstanding capital stock............................... $ 45,857,799
-------------
-------------
Net assets applicable to outstanding Class A shares......... $ 38,281,607
-------------
-------------
Net assets applicable to outstanding Class B shares......... $ 6,675,801
-------------
-------------
Net assets applicable to outstanding Class C shares......... $ 900,391
-------------
-------------
Shares outstanding and net asset value per share:
Class A - Shares outstanding 2,763,417.................... $ 13.85
-------------
-------------
Class B - Shares outstanding 503,324...................... $ 13.26
-------------
-------------
Class C - Shares outstanding 67,917....................... $ 13.26
-------------
-------------
</TABLE>
See accompanying notes to financial statements.
10
<PAGE>
ADVANTUS ENTERPRISE FUND
STATEMENT OF OPERATIONS
FOR THE SIX-MONTH PERIOD ENDED MARCH 31, 1999
(UNAUDITED)
<TABLE>
<S> <C>
Investment income:
Interest.................................................. $ 64,249
Dividends................................................. 16,098
-------------
Total investment income............................... 80,347
-------------
Expenses (note 4):
Investment advisory fee................................... 177,060
Rule 12b-1 fees - Class A................................. 51,872
Rule 12b-1 fees - Class B................................. 33,640
Rule 12b-1 fees - Class C................................. 4,167
Administrative services fee............................... 26,200
Amortization of organizational costs...................... 5,441
Custodian fees............................................ 4,532
Auditing and accounting services.......................... 7,325
Legal fees................................................ 4,750
Directors' fees........................................... 385
Registration fees......................................... 20,343
Printing and shareholder reports.......................... 9,330
Insurance................................................. 1,798
Other..................................................... 3,143
-------------
Total expenses........................................ 349,986
Less fees and expenses waived or absorbed:
Class A Rule 12b-1 fees................................. (24,345)
-------------
Total net expenses.................................... 325,641
-------------
Investment loss - net................................. (245,294)
-------------
Realized and unrealized losses on investments:
Net realized losses on investments (note 3)............... (830,086)
Net change in unrealized appreciation or depreciation on
investments............................................. 9,699,812
-------------
Net gains on investments.............................. 8,869,726
-------------
Net increase in net assets resulting from operations........ $ 8,624,432
-------------
-------------
</TABLE>
See accompanying notes to financial statements.
11
<PAGE>
ADVANTUS ENTERPRISE FUND
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX-MONTH PERIOD ENDED MARCH 31, 1999 AND YEAR ENDED SEPTEMBER 30, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
1999 1998
------------- -------------
<S> <C> <C>
Operations:
Investment loss - net..................................... $ (245,294) $ (525,734)
Net realized loss on investments.......................... (830,086) (2,030,305)
Net change in unrealized appreciation or depreciation on
investments............................................. 9,699,812 (13,106,890)
------------- -------------
Increase (decrease) in net assets resulting from
operations.......................................... 8,624,432 (15,662,929)
------------- -------------
Capital share transactions (notes 4 and 6):
Proceeds from sales:
Class A................................................. 735,775 3,263,000
Class B................................................. 528,322 2,839,504
Class C................................................. 136,598 355,028
Payments for redemption of shares:
Class A................................................. (1,454,720) (2,649,374)
Class B................................................. (1,057,722) (2,157,258)
Class C................................................. (181,771) (378,918)
------------- -------------
Increase (decrease) in net assets from capital share
transactions........................................ (1,293,518) 1,271,982
------------- -------------
Total increase (decrease) in net assets............... 7,330,914 (14,390,947)
Net assets at beginning of period........................... 38,526,885 52,917,832
------------- -------------
Net assets at end of period................................. $ 45,857,799 $ 38,526,885
------------- -------------
------------- -------------
</TABLE>
See accompanying notes to financial statements.
12
<PAGE>
ADVANTUS ENTERPRISE FUND
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1999
(UNAUDITED)
(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
Rule 12b-1 fees charged differs between Class A, Class B and Class C shares.
Income, expenses (other than Rule 12b-1 fees) and realized and unrealized gains
or losses are allocated to each class of shares based upon its relative net
assets.
(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 in the financial statements. Actual
results could differ from those estimates.
INVESTMENTS IN SECURITIES
The Fund's net asset value is generally calculated as of the close of normal
trading on the New York Stock Exchange (typically 3:00 p.m. Central Time).
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.
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.
13
<PAGE>
ADVANTUS ENTERPRISE FUND
NOTES TO FINANCIAL STATEMENTS - CONTINUED
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED)
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 $1,259,459 which, if not offset by subsequent capital gains, will
expire September 30, 2006. It is unlikely the Board of Directors will authorize
a distribution of any net realized capital gains 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 income and decrease additional paid-in capital by
$245,294.
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 period ended March 31, 1999, purchases of securities and proceeds
from sales, other than temporary investments in short-term securities aggregated
$18,908,943 and $20,197,967 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
Minnesota Life Insurance Company (Minnesota Life), formerly known as The
Minnesota Mutual Life Insurance Company. 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 (First Data Investor
Services Group). Prior to October 26, 1998, the Fund's transfer agent was
Minnesota Life. 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
expenses pursuant to Rule 12b-1 under the Investment Company Act of 1940 (as
amended). The Fund pays Rule 12b-1 fees to Ascend Financial Services, Inc.
(Ascend), the underwriter of the Fund and wholly-owned subsidiary of Advantus
Capital, 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
service fee up to .25 percent of average daily net assets of Class A shares.
Prior to February 1, 1999, the Class A Plan provided for a distribution 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 the portion of Class A Rule 12b-1 fees
which exceeds, as a percentage of average daily net assets, .15 percent. Ascend
waived Class A Rule 12b-1 fees in the amount of $24,345 for the period ended
March 31, 1999.
14
<PAGE>
ADVANTUS ENTERPRISE FUND
NOTES TO FINANCIAL STATEMENTS - CONTINUED
(4) EXPENSES AND RELATED PARTY TRANSACTIONS - (CONTINUED)
The Fund also bears certain other operating expenses including outside
directors' fees, custodian fees, registration fees, printing and shareholder
reports, legal, auditing and accounting services, organizational costs and other
miscellaneous expenses.
Effective October 26, 1998, the Fund entered into a new shareholder and
administrative services agreement with Minnesota Life. Under this agreement, the
Fund pays an administrative services fee equal to $5,700 per month to Minnesota
Life for shareholder services which Minnesota Life provides. Prior to February
1, 1999, the administrative services fee was $3,700 per month. In addition, for
shareholder services performed by Minnesota Life, the Adviser will pay Minnesota
Life an annual account servicing fee as agreed by the Adviser and Minnesota
Life.
Advantus Capital directly incurs and pays the above operating expenses and
the Fund in turn reimburses Advantus Capital.
As of March 31, 1999, Minnesota Life and subsidiaries and the directors and
officers of the Fund as a whole owned 2,226,404 Class A shares which represents
80.6 percent of the total outstanding Class A shares.
Sales charges received by Ascend for distributing the Fund's three classes
of shares amounted to $17,964.
Legal fees were paid to a law firm of which the Fund's secretary is a
partner in the amount of $4,750.
(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 Advantus Capital, 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 period from October 1, 1998 to March 31, 1999
and the year ended September 30, 1998 were as follows:
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
-------------------- -------------------- --------------------
1999 1998 1999 1998 1999 1998
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Sold........................................ 57,507 220,439 42,440 197,838 10,661 24,682
Redeemed.................................... (108,260) (180,222) (81,639) (153,483) (14,513) (26,413)
--------- --------- --------- --------- --------- ---------
(50,753) 40,217 (39,199) 44,355 (3,852) (1,731)
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
</TABLE>
(7) YEAR 2000
In 1995, Minnesota Life began addressing computer systems requirements and
applications to be Year 2000 ready. Based on a current study, Minnesota Life
plans to spend approximately $14 million through 1999 to modify its computer
information systems, enabling proper processing of transactions relating to the
year 2000 and beyond. The Fund will not be charged for these expenses.
15
<PAGE>
ADVANTUS ENTERPRISE FUND
NOTES TO FINANCIAL STATEMENTS - CONTINUED
(8) 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 PERIOD FROM
OCTOBER 1, SEPTEMBER 16,
1998 TO YEAR ENDED SEPTEMBER 30, 1994(B) TO
MARCH 31, ----------------------------------------------- SEPTEMBER 30,
1999 1998 1997 1996 1995(A) 1994
------------- -------- -------- -------- -------- -------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period...................... $ 11.32 $ 15.90 $ 15.94 $ 14.08 $ 11.03 $ 11.12
------------- -------- -------- -------- -------- -------------
Income from investment
operations:
Net investment loss......... (.06) (.13) (.04) (.05) (.04) --
Net gains (losses) on
securities (both realized
and unrealized)........... 2.59 (4.45) 1.74 2.34 3.11 (.09)
------------- -------- -------- -------- -------- -------------
Total from investment
operations.............. 2.53 (4.58) 1.70 2.29 3.07 (.09)
------------- -------- -------- -------- -------- -------------
Less distributions:
Distributions from capital
gains..................... -- -- (1.74) (.43) (.02) --
------------- -------- -------- -------- -------- -------------
Total distributions....... -- -- (1.74) (.43) (.02) --
------------- -------- -------- -------- -------- -------------
Net asset value, end of
period...................... $ 13.85 $ 11.32 $ 15.90 $ 15.94 $ 14.08 $ 11.03
------------- -------- -------- -------- -------- -------------
------------- -------- -------- -------- -------- -------------
Total return(c)............... 22.35% (28.81)% 12.88% 16.66% 27.87% (.81)%
Net assets, end of period (in
thousands).................. $38,282 $ 31,844 $ 44,102 $ 38,722 $ 30,454 $12,964
Ratio of expenses to average
daily net assets(d)(e)...... 1.33%(g) 1.27% 1.28% 1.31% 1.34% .05%(f)
Ratio of net investment income
(loss) to average daily net
assets(d)(e)................ (.96)%(g) (.91)% (.32)% (.38)% (.48)% (.02)%(f)
Portfolio turnover rate
(excluding short-term
securities)................. 45.0% 71.1% 65.8% 80.2% 48.8% 5.0%
</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 assume 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 $24,345, $68,536, $74,325 and
$68,785 in Class A Rule 12b-1 fees for the period ended March 31, 1999, and
the years ended September 30, 1998, 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 1.46%, 1.44%, 1.48% and 1.51%,
respectively, and the ratio of net investment income (loss) to average
daily net assets would have been (1.09)%, (1.08)%, (.52)% and (.58)%,
respectively, for Class A shares.
(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.
16
<PAGE>
ADVANTUS ENTERPRISE FUND
NOTES TO FINANCIAL STATEMENTS - CONTINUED
<TABLE>
<CAPTION>
CLASS B
-----------------------------------------------------------------------------------
PERIOD FROM PERIOD FROM
OCTOBER 1, SEPTEMBER 16,
1998 TO YEAR ENDED SEPTEMBER 30, 1994(B) TO
MARCH 31, ----------------------------------------------- SEPTEMBER 30,
1999 1998 1997 1996 1995(A) 1994
------------- -------- -------- -------- -------- -------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period...................... $ 10.88 $ 15.42 $ 15.64 $ 13.94 $ 11.02 $ 11.12
------------- -------- -------- -------- -------- -------------
Income from investment
operations:
Net investment loss......... (.12) (.24) (.18) (.12) (.09) (.01)
Net gains (losses) on
securities (both realized
and unrealized)........... 2.50 (4.30) 1.70 2.25 3.03 (.09)
------------- -------- -------- -------- -------- -------------
Total from investment
operations.............. 2.38 (4.54) 1.52 2.13 2.94 (.10)
------------- -------- -------- -------- -------- -------------
Less distributions:
Distributions from capital
gains..................... -- -- (1.74) (.43) (.02) --
------------- -------- -------- -------- -------- -------------
Total distributions....... -- -- (1.74) (.43) (.02) --
------------- -------- -------- -------- -------- -------------
Net asset value, end of
period...................... $ 13.26 $ 10.88 $ 15.42 $ 15.64 $ 13.94 $ 11.02
------------- -------- -------- -------- -------- -------------
------------- -------- -------- -------- -------- -------------
Total return(c)............... 21.88% (29.44)% 11.89% 15.65% 26.71% (.90)%
Net assets, end of period (in
thousands).................. $ 6,676 $ 5,903 $ 7,683 $ 4,871 $ 1,720 $ 96
Ratio of expenses to average
daily net assets(d)(e)...... 2.18%(g) 2.14% 2.18% 2.20% 2.24% .09%(f)
Ratio of net investment income
(loss) to average daily net
assets(d)(e)................ (1.81)%(g) (1.77)% (1.60)% (1.25)% (1.45)% (.06)%(f)
Portfolio turnover rate
(excluding short-term
securities)................. 45.0% 71.1% 65.8% 80.2% 48.8% 5.0%
<CAPTION>
CLASS C
----------------------------------------------------------------------
PERIOD FROM PERIOD FROM
OCTOBER 1, MARCH 1,
1998 TO YEAR ENDED SEPTEMBER 30, 1995(B) TO
MARCH 31, ---------------------------------- SEPTEMBER 30,
1999 1998 1997 1996 1995
------------- -------- -------- -------- -------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period...................... $ 10.87 $ 15.41 $ 15.63 $ 13.94 $ 11.58
------------- -------- -------- -------- -------------
Income from investment
operations:
Net investment loss......... (.11) (.26) (.23) (.09) (.06)
Net gains (losses) on
securities (both realized
and unrealized)........... 2.50 (4.28) 1.75 2.21 2.42
------------- -------- -------- -------- -------------
Total from investment
operations.............. 2.39 (4.54) 1.52 2.12 2.36
------------- -------- -------- -------- -------------
Less distributions:
Distributions from capital
gains..................... -- -- (1.74) (.43) --
------------- -------- -------- -------- -------------
Total distributions....... -- -- (1.74) (.43) --
------------- -------- -------- -------- -------------
Net asset value, end of
period...................... $ 13.26 $ 10.87 $ 15.41 $ 15.63 $ 13.94
------------- -------- -------- -------- -------------
------------- -------- -------- -------- -------------
Total return(c)............... 21.88% (29.40)% 11.89% 15.58% 20.38%
Net assets, end of period (in
thousands).................. $ 900 $ 780 $ 1,133 $ 807 $ 71
Ratio of expenses to average
daily net assets(d)(e)...... 2.18%(g) 2.14% 2.18% 2.19% 2.24%(g)
Ratio of net investment income
(loss) to average daily net
assets(d)(e)................ (1.81)%(g) (1.78)% (1.75)% (1.22)% (1.57)%(g)
Portfolio turnover rate
(excluding short-term
securities)................. 45.0% 71.1% 65.8% 80.2% 48.8%
</TABLE>
- ------------
17
<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 share 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 twelve exchanges each calendar year without incurring a
transaction charge. Thereafter, there will be a $7.50 transaction charge for
each additional exchange within the calendar year.
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 a check 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 DIVIDEND 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 EXCHANGE: You may move money from one Advantus account to any other
Advantus account you own (with identical registrations within the same share
class) just by calling our toll-free number. The Telephone Exchange privilege
will automatically be established unless otherwise indicated on the Account
Application. Telephone Exchange may be changed (added/deleted) at any time by
submitting a request in writing.
SYSTEMATIC EXCHANGE: You may move a set amount of money monthly or quarterly
from one Advantus Fund to another Advantus Fund (with identical registrations
within the same share class) to diversify your investment portfolio and take
advantage of dollar-cost averaging.
AUTOMATIC PAYMENT OF INSURANCE PREMIUMS: You may automatically pay your
Minnesota Life insurance premiums from 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, if any.
SPECIAL PURCHASE PLANS: 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.) The Automatic Investment Plan allows
you to invest automatically monthly, semi-monthly or quarterly from your
checking or savings account.
IRAs, OTHER QUALIFIED PLAN: You can use the Advantus Family of Funds for your
Traditional or Roth Individual Retirement Account or other qualified plan
including: SEP IRA's, SIMPLE IRA's, Profit Sharing, 401(k) 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 or wire
transferred to your bank of record for the Account. Wire transfers are for
amounts over $500. The prevailing wire charge will be added to the withdrawal
amount. The Telephone Redemption privilege will automatically be established
unless otherwise indicated on the Account
18
<PAGE>
Application. Telephone Redemption may be changed (added/deleted) at any time by
submitting a request in writing. 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 and quarterly statements to help you track all of your Advantus Fund
investments 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.
Advantus Account Representatives are available Monday through Friday from 8 a.m.
to 4:45 p.m. Central Time. Our voice response system is available 24 hours,
seven days a week. This system allows you to access current net asset values,
account balances and recent account activity.
HOW TO INVEST
You can invest in one or more of the eleven Advantus Funds through a local
Registered Representative of Ascend Financial Services, Inc., distributor of the
Funds. Contact your representative for information and a prospectus for any of
the Advantus Funds you are interested in. To find a Registered Representative
near you, call the toll-free service line (1-800-665-6005).
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. (For the Advantus International Balanced Fund, Inc., the
sub-adviser, Templeton Investment Counsel, Inc., selects the Fund's
investments.)
Advantus Capital Management, Inc. manages thirteen mutual funds containing $3.2
billion in assets in addition to $10.8 billion in assets for other clients.
Advantus Capital's seasoned portfolio managers average more than 13 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
Advantus Real Estate Securities Fund
19
<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
1-800-AFS-1838
(1-800-237-1838)
<PAGE>
ASCEND FINANCIAL SERVICES, INC.
400 ROBERT STREET NORTH [LOGO]
ST. PAUL, MN 55101-2098
ADDRESS SERVICE REQUESTED
F.48646 Rev. 5-1999
