<PAGE>
ENTERPRISE
ADVANTUS ENTERPRISE FUND, INC.
ANNUAL REPORT TO SHAREHOLDERS DATED SEPTEMBER 30, 2000
[LOGO]
ADVANTUS-TM-
FAMILY OF FUNDS
[EQUITY GRAPHIC]
<PAGE>
ADVANTUS ENTERPRISE FUND
TABLE OF CONTENTS
PERFORMANCE UPDATE 2
INVESTMENTS IN SECURITIES 6
STATEMENT OF ASSETS AND LIABILITIES 9
STATEMENT OF OPERATIONS 10
STATEMENTS OF CHANGES IN NET ASSETS 11
NOTES TO FINANCIAL STATEMENTS 12
INDEPENDENTS AUDITORS' REPORT 17
FEDERAL INCOME TAX INFORMATION 18
SHAREHOLDER VOTING RESULTS 19
SHAREHOLDER SERVICES 20
<PAGE>
LETTER FROM THE PRESIDENT [PHOTO]
Dear Shareholder:
All signs point to a soft landing in progress while the U.S. economy continues
to slow. The pressure on the Federal Reserve to further increase short-term
rates has diminished considerably. The Fed's earlier series of tightenings
appears to have successfully curbed the country's run-away growth. Inflation
remains in check; all in all, we continue to have a healthy backdrop for our
country's capital markets.
In the stock market, companies such as Intel and new economy leaders have seen
some dramatic corrections this quarter. This was a sideways correction for many,
downward for companies that disappointed investors. Value, real estate, and
small stocks' relative performance has improved this quarter. The market has
broadened, demonstrating that investors have acquired an increased appetite for
stocks other than large cap growth. We anticipate that the stock market will
remain volatile throughout the year and into next year. Equity investors should
adjust their expectations and not expect double-digit returns as the norm. We
expect positive returns for equities for the next 12 to 18 months, with above
average earnings growth.
Within the fixed income universe, corporate bonds have been the weakest
performing fixed income sector in 2000. An inverted yield curve (i.e., short-
term bonds have higher yields than long-term bonds), several Fed tightening
moves, increased event risk and equity market volatility have all negatively
impacted corporate bond performance this year. Mortgage-backed securities were
the top performer for the year followed by the government sector. We believe
that upcoming quarters will be a favorable environment for bonds.
We are continually watchful of economic and political events and circumstances
that would likely affect our new President. Significant political unrest,
military buildups, and violence in other countries may test the
President-elect's mettle. A strong Administration increases the odds that our
peace dividend will continue.
We advise investors to consider adding fixed income, value stocks and an
international component to their portfolio. As we've said before, we advise you
to stay well diversified and avoid big bets when the market environment is
uncertain.
Sincerely,
/s/ William N. Westhoff
William N. Westhoff
President, Advantus Funds
<PAGE>
ADVANTUS ENTERPRISE FUND
PERFORMANCE UPDATE
[PHOTO] [PHOTO]
STEPHEN J. LURITO
SAMMY OH
CREDIT SUISSE ASSET MANAGEMENT
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 where market capitalization is within the range of
companies in the Russell 2000 Growth Index at the time of purchase. In selecting
equity securities, the Fund invests in companies that the investment sub-
adviser believes are either developing or older companies in a growth stage or
companies providing products or services with a high unit-volume growth rate.
- Dividends paid quarterly.
- Capital gains distributions paid annually.
PERFORMANCE OVERVIEW
The performance of the Advantus Enterprise Fund for the year ended
September 30, 2000 was as follows for the three classes of shares currently
outstanding:
<TABLE>
<S> <C>
CLASS A.......................... 42.65 PERCENT*
CLASS B.......................... 41.43 PERCENT*
CLASS C.......................... 41.46 PERCENT*
</TABLE>
The Fund's benchmark, the Russell 2000 Growth Index** returned 29.67 percent for
the same period.
PERFORMANCE ANALYSIS
The fourth quarter of 1999 and the first quarter of 2000 were strong for small
company growth stocks, with the group's technology and communications shares
displaying particular strength. The group outperformed large-cap stocks by a
healthy margin, supported by optimism regarding smaller companies' earnings
prospects and by investors' dissipating worries over the Y2K computer bug and
attendant risk factors.
The group's solid showing was supported by optimism over small companies' profit
outlook and by continued improvement in the global economy, which aided riskier
asset classes generally. These stocks were, however, volatile, particularly in
March, reflecting ongoing interest-rate uncertainties and concerns over
valuations on certain high-flying Internet-related stocks.
PERFORMANCE ANALYSIS
MARKET ANALYSIS
Performance during this period was driven by the rally in small-cap stocks and
by timely stock selection, with its technology and communications holdings
displaying particular strength. Portfolios also saw good performance from
individual holdings representing a range of sectors, for example, specific
energy and health-care stocks.
In the period from April through June of this year, however, small-
capitalization stocks declined sharply. The group's retreat largely reflected
inflation and interest-rate worries. Despite a series of rate increases by the
Federal Reserve over the past year, the economy remained strong, leaving the
door open to further monetary "tightening." The uncertainty particularly
hampered technology stocks, whose valuations compared to those on non-
technology stocks, had become quite lofty.
During this period we made few noteworthy changes to the portfolio in terms of
sector/industry allocation. We maintained a primary emphasis on technology
companies (broadly defined, these accounted for nearly half of the portfolio's
assets at the close of the period), reflecting the considerable opportunity in
this sector. However, there were some adjustments worthy of
2
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mention. We pared our exposure to the computer and communications sectors, and
raised our weighting in the electronics area, where we generally saw better
value.
Small capitalization stocks also struggled in the third quarter of this year,
hampered by the growing profit uncertainties that restrained stocks broadly.
While fears of rising interest rates - a factor behind small caps' second
quarter weakness - subsided, evidence of a slowing economy began to weigh on the
market. Adding to the pressure was an upward spike in oil prices and a declining
euro (though the latter was more of a concern for globally oriented large-cap
companies). As in the large-cap area, technology and communications stocks led
the decline. Certain "defensive" sectors, such as health care, performed well,
as did value-type stocks generally.
Despite the recent weakness in small caps, and the potential for choppy waters
over the near term, we have a positive longer-term outlook on the group. We
remain of the view that these stocks - and the group's growth-oriented names in
particular - will benefit in due course from a historically supportive
combination of benign inflation, relatively stable interest rates and modest
economic growth. In addition, small-cap stocks currently trade at compelling
valuations vs. those on larger-cap stocks, which should only add to their appeal
from a risk-reward perspective. Our focus, as always, will remain on companies
we deem to have the brightest growth prospects.
*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 those stocks 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 September 30, 2000.
CLASS A AND B
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN:
<S> <C> <C>
Class A:
One year 34.90%
Five year 10.21%
Since inception (9/16/94) 12.72%
Class B:
One year 36.43%
Five year 10.30%
Since inception (9/16/94) 12.78%
</TABLE>
<TABLE>
<CAPTION>
(THOUSANDS)
RUSSELL 2000
CLASS A CLASS B CPI GROWTH INDEX
<S> <C> <C> <C> <C>
9/16/94 $10,000 $10,000 $10,000 $10,000
9/30/94 $9,371 $9,910 $10,054 $10,042
9/30/95 $11,983 $12,107 $10,275 $12,616
9/30/96 $13,979 $14,173 $10,584 $14,391
9/30/97 $15,780 $16,000 $10,818 $17,737
9/30/98 $11,235 $11,315 $10,973 $13,331
9/30/99 $14,450 $14,477 $11,261 $17,683
9/30/00 $20,613 $20,687 $11,643 $22,928
</TABLE>
CLASS C
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN:
<S> <C> <C>
Class C:
One year 41.46%
Five year 10.49%
Since inception (3/1/95) 13.03%
</TABLE>
<TABLE>
<CAPTION>
(THOUSANDS)
RUSSELL 2000
CLASS C CPI GROWTH INDEX
<S> <C> <C> <C>
3/01/95 $10,000 $10,000 $10,000
9/30/95 $12,038 $10,146 $12,563
9/30/96 $13,913 $10,450 $14,331
9/30/97 $15,568 $10,682 $17,662
9/30/98 $10,992 $10,834 $13,276
9/30/99 $14,012 $11,119 $17,610
9/30/00 $19,821 $11,497 $22,832
</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,
4
<PAGE>
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.
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.
TEN LARGEST STOCK HOLDINGS
<TABLE>
<CAPTION>
MARKET % OF STOCK
COMPANY SHARES VALUE PORTFOLIO
------- -------- ----------- -----------
<S> <C> <C> <C>
Universal Health Services, Inc............. 22,310 $ 1,910,294 3.0%
Global Marine, Inc......................... 55,364 1,709,363 2.6%
Province Healthcare Company................ 40,167 1,604,170 2.5%
Oxford Health Plans........................ 52,136 1,602,368 2.5%
Seacor Smit, Inc........................... 32,550 1,517,644 2.3%
Stone Energy Corporation................... 25,689 1,412,895 2.2%
APW, Ltd................................... 27,100 1,321,125 2.0%
Smith International, Inc................... 15,508 1,264,871 2.0%
Precision Drilling Corporation............. 34,600 1,232,625 1.9%
Advance Paradigm, Inc...................... 29,000 1,223,437 1.9%
----------- ---------
$14,798,792 22.9%
=========== =========
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Cash and Other Assets/Liabilities 2.3%
Health Care 22.4%
Communication Services 3.8%
Capital Goods 0.5%
Financial 3.9%
Consumer Staples 1.6%
Energy 12.1%
Consumer Cyclical 5.0%
Technology 48.4%
</TABLE>
5
<PAGE>
ADVANTUS ENTERPRISE FUND
INVESTMENTS IN SECURITIES
SEPTEMBER 30, 2000
(Percentages of each investment category relate to total net assets.)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE(A)
------ ---------------
<C> <S> <C>
COMMON STOCK (97.7%)
CAPITAL GOODS (.5%)
Machinery (.5%)
17,700 Asyst Technologies, Inc.......................... $ 358,425
-----------
COMMUNICATION SERVICES (3.8%)
Telecommunication (2.7%)
17,496 CTC Communications Group, Inc. (b)............... 354,294
17,846 Polycom, Inc. (b)................................ 1,195,124
21,921 Viatel, Inc. (b)................................. 224,690
-----------
1,774,108
-----------
Telephone (1.1%)
18,600 Advanced Fibre Communication, Inc. (b)........... 704,475
-----------
CONSUMER CYCLICAL (5.0%)
Retail (2.2%)
16,100 Ann Taylor Stores Corporation (b)................ 618,844
14,616 Marimba, Inc. (b)................................ 178,589
25,390 Valuevision International, Inc. (b).............. 637,924
-----------
1,435,357
-----------
Service (2.8%)
30,598 Acxiom Corporation (b)........................... 971,486
16,959 Getty Images, Inc. (b)........................... 516,190
15,500 Mandalay Resort Group (b)........................ 397,187
-----------
1,884,863
-----------
CONSUMER STAPLES (1.6%)
Entertainment (1.6%)
35,190 American Classic Voyages Company (b)............. 514,654
21,700 Championship Auto Racing Teams, Inc. (b)......... 528,937
-----------
1,043,591
-----------
<CAPTION>
MARKET
SHARES VALUE(A)
------------------------------------------------------------------------
ENERGY (12.1%)
<C> <S> <C>
Oil & Gas (12.1%)
14,279 BJ Services Company (b).......................... $ 872,804
55,364 Global Marine, Inc. (b).......................... 1,709,363
34,600 Precision Drilling Corporation (b)(c)............ 1,232,625
32,550 Seacor Smit, Inc. (b)............................ 1,517,644
15,508 Smith International, Inc. (b).................... 1,264,871
25,689 Stone Energy Corporation (b)..................... 1,412,895
-----------
8,010,202
-----------
FINANCIAL (3.9%)
Auto Finance (1.1%)
24,700 AmeriCredit Corporation (b)...................... 711,669
-----------
Consumer Finance (.5%)
5,900 Compucredit Corporation (b)...................... 330,953
-----------
Insurance (2.3%)
29,500 Fidelity National Finance........................ 730,125
38,000 Mid Atlantic Medical Services, Inc. (b).......... 574,750
10,000 Mutual Risk Management, Ltd. (c)................. 219,375
-----------
1,524,250
-----------
HEALTH CARE (22.4%)
Biotechnology (6.4%)
10,500 Aclara Biosciences, Inc. (b)..................... 318,937
700 Aviron........................................... 40,819
9,675 Gilead Sciences, Inc. (b)........................ 1,061,227
5,593 Idec Pharmaceuticals Corporation (b)............. 980,785
900 Intermune Pharmaceuticals, Inc................... 48,825
15,121 Lynx Therapeutics, Inc. (b)...................... 473,476
7,717 Maxygen, Inc. (b)................................ 400,319
7,600 Medarex, Inc. (b)................................ 891,575
-----------
4,215,963
-----------
</TABLE>
See accompanying notes to investments in securities.
6
<PAGE>
ADVANTUS ENTERPRISE FUND
INVESTMENTS IN SECURITIES - CONTINUED
<TABLE>
<CAPTION>
MARKET
SHARES VALUE(A)
------------------------------------------------------------------------
HEALTH CARE--CONTINUED
<C> <S> <C>
Drugs (2.6%)
10,300 Alkermes, Inc. (b)............................... $ 397,837
16,267 Medicis Pharmaceutical Corporation (b)........... 1,000,420
1,351 Titan Pharmaceuticals, Inc....................... 87,815
3,100 United Therapeutics Corporation (b).............. 270,862
-----------
1,756,934
-----------
Hospital Management (5.3%)
40,167 Province Healthcare Company (b).................. 1,604,170
22,310 Universal Health Services, Inc. (b).............. 1,910,294
-----------
3,514,464
-----------
Managed Care (5.6%)
29,000 Advance Paradigm, Inc. (b)....................... 1,223,437
77,600 Caremark Rx, Inc. (b)............................ 873,000
52,136 Oxford Health Plans (b).......................... 1,602,368
-----------
3,698,805
-----------
Medical Products/Supplies (1.9%)
17,500 Amerisource Health Corporation (b)............... 822,500
10,872 Cytyc Corporation (b)............................ 468,855
-----------
1,291,355
-----------
Special Services (.6%)
20,300 Renal Care Group, Inc............................ 378,087
-----------
TECHNOLOGY (48.3%)
Communications Equipment (11.6%)
24,968 Adapative Broadband Corporation (b).............. 486,876
6,150 Anaren Microwave, Inc. (b)....................... 834,094
22,548 Antec Corporation (b)............................ 665,166
9,795 AudioCodes, Ltd. (b)(c).......................... 833,799
25,400 C-Cube Microsystems, Inc. (b).................... 520,700
<CAPTION>
MARKET
SHARES VALUE(A)
------------------------------------------------------------------------
TECHNOLOGY--CONTINUED
<C> <S> <C>
9,000 Gilat Satellite Networks, Ltd. (b)(c)............ $ 691,875
19,571 Powerwave Technologies, Inc. (b)................. 743,086
14,800 Proxim, Inc. (b)................................. 658,600
24,259 Tekelec (b)...................................... 797,515
18,710 Transwitch Corporation (b)....................... 1,192,762
20,600 Westell Technologies, Inc. (b)................... 265,225
-----------
7,689,698
-----------
Computer Hardware (8%)
600 Natural MicroSystems Corporation................. 32,278
7,500 SanDisk Corporation (b).......................... 500,625
-----------
532,903
-----------
Computer Networking (1.7%)
11,700 About.com, Inc. (b).............................. 378,787
36,450 Radiant Systems, Inc. (b)........................ 779,119
-----------
1,157,906
-----------
Computer Peripherals (5%)
17,292 Interlink Electronics, Inc. (b).................. 335,033
-----------
Computer Services & Software (12.2%)
21,200 Advantage Learning Systems, Inc. (c)............. 743,325
26,260 Alpha Industries, Inc. (a)....................... 962,606
26,699 Backweb Technologies, Ltd. (a)(c)................ 270,745
7,820 Business Objects SA (b)(c)....................... 884,149
9,600 Clarent Corporation (b).......................... 378,000
2,600 Informatica Corporation (b)...................... 242,450
12,542 IONA Technologies PLC (b)(c)..................... 871,669
10,521 Manugistics Group, Inc. (b)...................... 1,032,373
27,996 Peregrine Systems, Inc. (c)...................... 530,174
4,800 Puma Technology, Inc. (b)........................ 97,500
</TABLE>
See accompanying notes to investments in securities.
7
<PAGE>
ADVANTUS ENTERPRISE FUND
INVESTMENTS IN SECURITIES - CONTINUED
<TABLE>
<CAPTION>
MARKET
SHARES VALUE(A)
------------------------------------------------------------------------
TECHNOLOGY--CONTINUED
<C> <S> <C>
9,440 QRS Corporation (b).............................. $ 142,190
15,300 Remedy Corporation (b)........................... 288,788
22,118 Sea Change International, Inc. (b)............... 738,188
34,898 Sybase, Inc. (b)................................. 802,654
30,500 Unify Corporation (b)............................ 118,188
-----------
8,102,999
-----------
Computer Systems (.5%)
7,100 RSA Security, Inc. (b)........................... 306,188
-----------
Data Processing (3.3%)
12,852 Documentum, Inc. (b)............................. 1,043,422
23,244 Intranet Solutions, Inc. (b)..................... 1,162,200
-----------
2,205,622
-----------
Electrical Equipment (2.7%)
6,379 Cree, Inc. (a)................................... 741,559
20,400 DSP Group, Inc. (b).............................. 762,450
15,400 Titan Corporation (b)............................ 254,100
-----------
1,758,109
-----------
Electrical Instruments (4.3%)
27,100 APW, Ltd. (b).................................... 1,321,125
5,800 Caliper Technologies Corporation (b)............. 336,037
12,200 Coherent, Inc. (b)............................... 829,600
<CAPTION>
MARKET
SHARES VALUE(A)
------------------------------------------------------------------------
TECHNOLOGY--CONTINUED
<C> <S> <C>
8,500 MIPS Technologies, Inc. (b)...................... $ 391,000
-----------
2,877,763
-----------
Semiconductor Equipment (5.9%)
14,504 Cymer, Inc. (b).................................. 445,092
15,511 DuPont Photomasks, Inc. (c)...................... 911,271
36,186 Gasonics International Corporation (b)........... 443,279
13,000 MRV Communications, Inc. (b)..................... 589,063
17,034 Orbotech, Ltd. (b)(c)............................ 931,547
27,735 Photronics, Inc. (b)............................. 604,970
-----------
3,925,222
-----------
Semiconductors (3.5%)
29,329 Anadigics, Inc................................... 648,904
14,400 Emcore Corporation (b)........................... 598,725
4,400 Exar Corporation (b)............................. 532,400
12,800 SIPEX Corporation (b)............................ 538,400
-----------
2,318,429
-----------
Service (1.3%)
11,366 Bisys Group, Inc. (b)............................ 878,734
-----------
Total common stock (cost: $60,148,974)..................... 64,722,107
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES
------
<C> <S> <C> <C> <C>
SHORT-TERM SECURITIES (3.0%)
1,974,723 Wells Fargo & Company Cash Investment Fund, current rate 6.230%...... 1,974,723
-----------
Total short-term securities (cost: $1,974,723)....................... 1,974,723
-----------
Total investments in securities (cost: $62,123,697) (d).............. $66,696,831
===========
</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 9.0% of net assets in foreign securities as of September 30,
2000.
(d) At September 30, 2000 the cost of securities for federal income tax purposes
was $62,465,040. The aggregate unrealized appreciation and depreciation of
investments in securities based on this cost were:
<TABLE>
<S> <C>
Gross unrealized appreciation.......... $16,951,036
Gross unrealized depreciation.......... (12,719,245)
-----------
Net unrealized appreciation............ $ 4,231,791
===========
</TABLE>
8
<PAGE>
ADVANTUS ENTERPRISE FUND
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 2000
<TABLE>
<S> <C>
ASSETS
Investments in securities, at market value - see accompanying
schedule for detailed listing
(identified cost: $62,123,697).................................. $66,696,831
Receivable for Fund shares sold.................................. 13,559
Accrued interest receivable...................................... 10,112
-----------
Total assets................................................. 66,720,502
-----------
LIABILITIES
Bank overdraft................................................... 107
Payable for investment securities purchased...................... 452,853
Payable for Fund shares redeemed................................. 4,013
Payable to Adviser............................................... 10,688
Other payables................................................... 558
-----------
Total liabilities............................................ 468,219
-----------
Net assets applicable to outstanding capital stock............... $66,252,283
===========
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..... $ 32,187
Additional paid-in capital..................................... 41,524,413
Accumulated net realized gains from investments................ 20,122,549
Unrealized appreciation on investments......................... 4,573,134
-----------
Total - representing net assets applicable to outstanding
capital stock................................................ $66,252,283
===========
Net assets applicable to outstanding Class A shares.............. $56,086,767
===========
Net assets applicable to outstanding Class B shares.............. $ 9,086,089
===========
Net assets applicable to outstanding Class C shares.............. $ 1,079,427
===========
Shares outstanding and net asset value per share:
Class A - Shares outstanding 2,700,838......................... $ 20.77
===========
Class B - Shares outstanding 462,856........................... $ 19.63
===========
Class C - Shares outstanding 55,011............................ $ 19.62
===========
</TABLE>
See accompanying notes to financial statements.
9
<PAGE>
ADVANTUS ENTERPRISE FUND
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 2000
<TABLE>
<S> <C>
Investment income:
Interest....................................................... $ 203,371
Dividends...................................................... 16,976
-----------
Total investment income.................................... 220,347
-----------
Expenses (note 4):
Investment advisory fee........................................ 499,093
Rule 12b-1 - Class A........................................... 138,888
Rule 12b-1 - Class B........................................... 90,784
Rule 12b-1 - Class C........................................... 11,787
Administrative services fee.................................... 74,400
Transfer agent and shareholder services fees................... 63,606
Custodian fees................................................. 18,082
Auditing and accounting services............................... 16,163
Legal fees..................................................... 12,742
Directors' fees................................................ 737
Registration fees.............................................. 32,000
Printing and shareholder reports............................... 60,642
Insurance...................................................... 3,634
Other.......................................................... 5,402
-----------
Total expenses............................................. 1,027,960
-----------
Less fees and expenses waived or absorbed by Distributor:
Class A distribution fees.................................... (55,555)
Other waived fees............................................ (59,225)
-----------
Total fees and expenses waived or absorbed................. (114,780)
-----------
Total net expenses......................................... 913,180
-----------
Investment loss - net...................................... (692,833)
-----------
Realized and unrealized gains (losses) on investments:
Net realized gains on investments (note 3)................... 27,497,733
Net change in unrealized appreciation or depreciation on
investments................................................. (6,379,250)
-----------
Net gains on investments................................... 21,118,483
-----------
Net increase in net assets resulting from operations........... $20,425,650
===========
</TABLE>
See accompanying notes to financial statements.
10
<PAGE>
ADVANTUS ENTERPRISE FUND
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED SEPTEMBER 30, 2000 AND 1999
<TABLE>
<CAPTION>
2000 1999
------------ ------------
<S> <C> <C>
Operations:
Investment loss - net........................... $ (692,833) $ (508,486)
Net realized gains on investments............... 27,497,733 1,037,408
Net change in unrealized appreciation or
depreciation on investments................... (6,379,250) 10,468,429
------------ ------------
Increase in net assets resulting from
operations................................ 20,425,650 10,997,351
------------ ------------
Capital share transactions: (notes 4 and 5):
Proceeds from sales:
Class A....................................... 42,808,703 13,658,724
Class B....................................... 2,184,969 965,495
Class C....................................... 416,929 209,571
Payments for redemption of shares:
Class A....................................... (44,233,607) (14,679,306)
Class B....................................... (2,173,566) (1,982,135)
Class C....................................... (488,009) (385,371)
------------ ------------
Decrease in net assets from capital share
transactions.............................. (1,484,581) (2,213,022)
------------ ------------
Total increase in net assets................ 18,941,069 8,784,329
Net assets at beginning of year................. 47,311,214 38,526,885
------------ ------------
Net assets at end of year....................... $ 66,252,283 $ 47,311,214
============ ============
</TABLE>
See accompanying notes to financial statements.
11
<PAGE>
ADVANTUS ENTERPRISE FUND
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(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 shares 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 accounting
principles generally accepted in the United States of America 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 value.
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.
12
<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 or realized gains were recorded by the
Fund.
The Fund elected to utilize equalization debits by which a portion of the
costs of redemptions, which occurred during the year ended September 30, 2000,
reduced accumulated net realized gains for tax purposes by $4,810,234. On the
statement of assets and liabilities, as a result of the Fund's election to
utilize equalization debits and other permanent book-to-tax differences, a
reclassification adjustment was made to decrease accumulated net investment loss
by $692,833, decrease accumulated net realized gains by $5,503,058 and increase
additional paid-in capital by $4,810,225.
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, 2000, purchases of securities and proceeds
from sales, other than temporary investments in short-term securities,
aggregated $112,111,346 and $112,648,537, 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). 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. The Fund has engaged PFPC Global Fund Services to act as its transfer
agent, dividend disbursing agent and redemption agent and bears the expenses of
such services. Prior to May 1, 2000, Advantus Capital paid the expense related
to transfer agent services. The fee for investment management and advisory
services is based on the average daily net assets of the Fund at the annual rate
of .70 percent on the first $1 billion in net assets, .68 percent on the next $1
billion and .66 percent on net assets in excess of $2 billion. Prior to May 1,
2000, the fee was charged at an annual rate of .80 percent.
Advantus Capital has a sub-advisory agreement with Credit Suisse Asset
Management (Credit Suisse). The sub-advisory agreement provides that Advantus
Capital shall pay Credit Suisse a monthly management fee which will vary
depending on the total assets sub-advised by Credit Suisse for Advantus Capital,
including assets of Enterprise Fund and of other mutual funds and private
accounts. Total assets are measured each March 31, June 30, September 30, and
December 31. Advantus Capital pays Credit Suisse from the advisory fee at a rate
equal to .65 percent on the first $500 million in assets, .60 percent on the
next $500 million in assets, .50 percent on the next $1 billion in assets
and .45 percent on assets in excess of $2 billion.
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. The
Class B and Class C Plans provide
13
<PAGE>
ADVANTUS ENTERPRISE FUND
NOTES TO FINANCIAL STATEMENTS - CONTINUED
(4) EXPENSES AND RELATED PARTY TRANSACTIONS - (CONTINUED)
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.
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.
The Fund has entered in a shareholder and administrative services agreement
with Minnesota Life. Under this agreement, effective May 1, 2000, the Fund pays
an administrative services fee, equal to $5 per shareholder account annually, to
Minnesota Life for shareholder services which Minnesota Life provides. The Fund
also pays Minnesota Life an administrative services fee equal to $6,200 per
month for accounting, legal and other administrative services which Minnesota
Life provides.
Advantus Capital directly incurs and pays the above operating expenses and
the Fund in turn reimburses Advantus Capital. Under the Advisory Agreement,
Advantus Capital has contractually agreed to absorb all Fund costs and expenses
which exceed 1.38% of Class A average daily net assets, 2.23% of Class B average
daily net assets and 2.23% of Class C average daily net assets through the
fiscal year of the Fund ending September 30, 2001. During the year ended
September 30, 2000, Advantus Capital contractually agreed to absorb $59,225 in
expenses that were otherwise payable by the Fund, in addition to the waived
Class A 12b-1 fees described above.
As of September 30, 2000, Minnesota Life and subsidiaries and the directors
and officers of the Fund as a whole owned 2,228,411 Class A shares which
represents 82.5 percent of the total outstanding Class A shares.
Sales charges received by Ascend for distributing the Fund's three classes
of shares amounted to $158,512.
Legal fees were paid to a law firm of which the Fund's secretary is a
partner in the amount of $11,807.
(5) CAPITAL SHARE TRANSACTIONS
Transactions in shares for the year ended September 30, 2000 and 1999 were
as follows:
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
----------------------- ------------------- -------------------
2000 1999 2000 1999 2000 1999
---------- ---------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Sold.................................... 2,133,665 949,425 104,910 73,948 20,405 15,871
Redeemed................................ (2,180,851) (1,015,571) (109,705) (148,820) (23,890) (29,144)
---------- ---------- -------- -------- ------- -------
(47,186) (66,146) (4,795) (74,872) (3,485) (13,273)
========== ========== ======== ======== ======= =======
</TABLE>
14
<PAGE>
ADVANTUS ENTERPRISE FUND
NOTES TO FINANCIAL STATEMENTS - CONTINUED
(6) FINANCIAL HIGHLIGHTS
Per share data for a share of capital stock and selected information for
each period are as follows:
<TABLE>
<CAPTION>
CLASS A
---------------------------------------------------
YEAR ENDED SEPTEMBER 30,
---------------------------------------------------
2000 1999 1998 1997 1996
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year..... $ 14.56 $ 11.32 $ 15.90 $ 15.94 $ 14.08
------- ------- ------- ------- -------
Income from investment operations:
Net investment loss.................. (.19) (.14) (.13) (.04) (.05)
Net gains (losses) on securities
(both realized and unrealized)..... 6.40 3.38 (4.45) 1.74 2.34
------- ------- ------- ------- -------
Total from investment operations... 6.21 3.24 (4.58) 1.70 2.29
------- ------- ------- ------- -------
Less distributions:
Distributions from net realized
gains.............................. - - - (1.74) (.43)
------- ------- ------- ------- -------
Total distributions................ - - - (1.74) (.43)
------- ------- ------- ------- -------
Net asset value, end of year........... $ 20.77 $ 14.56 $ 11.32 $ 15.90 $ 15.94
======= ======= ======= ======= =======
Total return (a)....................... 42.65% 28.62% (28.81)% 12.88% 16.66%
Net assets, end of year
(in thousands)....................... $56,087 $40,009 $31,844 $44,102 $38,722
Ratio of expenses to average daily net
assets (b)........................... 1.25% 1.33% 1.27% 1.28% 1.31%
Ratio of net investment income (loss)
to average daily net assets (b)...... (.92)% (.97)% (.91)% (.32)% (.38)%
Portfolio turnover rate (excluding
short-term securities)............... 181.5% 99.3% 71.1% 65.8% 80.2%
</TABLE>
------------
(a) 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.
(b) The Fund's Adviser and Distributor voluntarily waived $114,780, $44,303,
$68,536, $74,325 and $68,785 in expenses for the years ended September 30,
2000, 1999, 1998, 1997 and 1996, respectively. If the Class A shares had
been charged for these fees, the ratio of expenses to average daily net
assets would have been 1.43%, 1.45%, 1.44%, 1.48% and 1.51%, respectively,
and the ratio of net investment income (loss) to average daily net assets
would have been (1.10)%, (1.09)%, (1.08)%, (.52)% and (.58)%, respectively.
If the Class B shares had been charged for these fees, the ratio of
expenses to average daily net assets would have been 2.19% for Class B
shares and 2.19% for Class C shares and the ratio of net investment income
(loss) to average daily net assets would have been (1.86)% for Class B and
(1.86)% for Class C shares for the year ended September 30, 2000.
15
<PAGE>
ADVANTUS ENTERPRISE FUND
NOTES TO FINANCIAL STATEMENTS - CONTINUED
<TABLE>
<CAPTION>
CLASS B CLASS C
---------------------------------------------- ----------------------------------------------
YEAR ENDED SEPTEMBER 30, YEAR ENDED SEPTEMBER 30,
---------------------------------------------- ----------------------------------------------
2000 1999 1998 1997 1996 2000 1999 1998 1997 1996
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
year....................... $13.88 $10.88 $15.42 $15.64 $13.94 $13.87 $10.87 $15.41 $15.63 $13.94
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Income from investment
operations:
Net investment loss........ (.35) (.26) (.24) (.18) (.12) (.36) (.27) (.26) (.23) (.09)
Net gains (losses) on
securities (both realized
and unrealized).......... 6.10 3.26 (4.30) 1.70 2.25 6.11 3.27 (4.28) 1.75 2.21
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total from investment
operations............. 5.75 3.00 (4.54) 1.52 2.13 5.75 3.00 (4.54) 1.52 2.12
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Less distributions:
Distributions from net
realized gains........... - - - (1.74) (.43) - - - (1.74) (.43)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total distributions...... - - - (1.74) (.43) - - - (1.74) (.43)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net asset value, end of
year....................... $19.63 $13.88 $10.88 $15.42 $15.64 $19.62 $13.87 $10.87 $15.41 $15.63
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
Total return (a)............. 41.43% 27.57% (29.44)% 11.89% 15.65% 41.46% 27.48% (29.40)% 11.89% 15.58%
Net assets, end of year
(in thousands)............. $9,086 $6,491 $5,903 $7,683 $4,871 $1,079 $ 812 $ 780 $1,133 $ 807
Ratio of expenses to average
daily net assets (b)....... 2.10% 2.18% 2.14% 2.18% 2.20% 2.10% 2.18% 2.14% 2.18% 2.19%
Ratio of net investment
income (loss) to average
daily net assets (b)....... (1.77)% (1.82)% (1.77)% (1.60)% (1.25)% (1.77)% (1.82)% (1.78)% (1.75)% (1.22)%
Portfolio turnover rate
(excluding short-term
securities)................ 181.5% 99.3% 71.1% 65.8% 80.2% 181.5% 99.3% 71.1% 65.8% 80.2%
</TABLE>
16
<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, 2000 and the related statement of
operations for the year then ended, the statements of changes in net assets for
each of the years in the two-year period then ended and the financial highlights
for each of the years in the five-year period then ended. 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 auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit 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. Our procedures included confirmation of
securities owned as of September 30, 2000, by correspondence with the custodian
and brokers. 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, 2000 and the results of its operations,
changes in its net assets and the financial highlights for the periods stated in
the first paragraph above, in conformity with accounting principles generally
accepted in the United States of America.
KPMG LLP
Minneapolis, Minnesota
November 10, 2000
17
<PAGE>
ADVANTUS ENTERPRISE FUND
FEDERAL INCOME TAX INFORMATION (UNAUDITED)
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, 2000. Dividends for the 2000 calendar year will
be reported to you on Form 1099-Div in late January 2000. Shareholders should
consult a tax adviser on how to report these distributions for state and local
purposes.
CLASS A, CLASS B AND CLASS C
CAPITAL GAINS DISTRIBUTIONS - TAXABLE AS LONG-TERM CAPITAL GAINS, 20% RATE.
<TABLE>
<S> <C>
Total long-term capital gain distributions were............. $4,810,234
</TABLE>
18
<PAGE>
ADVANTUS ENTERPRISE FUND
SHAREHOLDER VOTING RESULTS
On April 17, 2000, a special meeting of shareholders of Advantus Enterprise
Fund, Inc. was held. Shareholders of record on February 28, 2000, were entitled
to vote on the proposals described below.
(1) To elect a Board of Directors as follows:
<TABLE>
<CAPTION>
VOTES VOTES
DIRECTOR FOR WITHHELD
-------- --------- --------
<S> <C> <C>
Charles E. Arner....................... 2,613,341 9,455
Ellen S. Berscheid..................... 2,613,494 9,302
Ralph D. Ebbott........................ 2,613,551 9,245
Frederick P. Feuerherm................. 2,613,551 9,245
William N. Westhoff.................... 2,613,551 9,245
</TABLE>
(2) To approve the elimination or modification of the following investment
policies for:
<TABLE>
<CAPTION>
VOTES VOTES VOTES
FOR AGAINST WITHHELD
---------- ------- --------
<S> <C> <C> <C>
A. Modify policy regarding borrowing
and the issuance of senior
securities........................... 2,449,993 5,773 11,866
B. Modify policy regarding
concentration in a particular
industry............................. 2,451,905 4,322 11,406
C. Modify policy regarding investments
in real estate and commodities....... 2,452,213 4,057 11,363
D. Modify policy regarding lending..... 2,451,327 4,950 11,356
E. Eliminate policy restricting the
pledging of assets................... 2,450,347 5,452 11,834
F. Eliminate policy restricting margin
purchases and short sales............ 2,449,372 6,570 11,691
</TABLE>
(3) To approve an amendment to the investment advisory agreement between the
Fund and Advantus Capital Management, Inc., as described in the proxy statement
<TABLE>
<CAPTION>
VOTES VOTES VOTES
FOR AGAINST WITHHELD
---------- ------- --------
<S> <C> <C> <C>
2,450,558 5,190 11,884
</TABLE>
(4) To approve a new sub-advisory agreement with Credit Suisse Asset
Management, LLC, as described in the proxy statement.
<TABLE>
<CAPTION>
VOTES VOTES VOTES
FOR AGAINST WITHHELD
---------- ------- --------
<S> <C> <C> <C>
2,451,325 3,950 12,358
</TABLE>
(5) To ratify the selection of KPMG LLP as independent public accountants for
the Fund.
<TABLE>
<CAPTION>
VOTES VOTES VOTES
FOR AGAINST WITHHELD
---------- ------- --------
<S> <C> <C> <C>
2,608,859 1,685 12,252
</TABLE>
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 may apply.
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.
AUTOMATIC INVESTMENT PLAN: This special purchase plan enables 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 PLANS: You can use the Advantus Family of Funds for your
Traditional, Roth or Education Individual Retirement Account or other qualified
plans including: SEP IRA's, SIMPLE IRA's, Profit Sharing, 401(k) Money Purchase
or Defined Benefit plans.
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 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
20
<PAGE>
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 7:30
a.m. to 5:15 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.
INTERNET ADDRESS: www.AdvantusFunds.com
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) or visit
www.AdvantusFunds.com.
MINIMUM INVESTMENTS: Your initial investment in any of the Advantus Funds can
be as small as $25 when you use our Automatic 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.,
Advantus Enterprise Fund, Inc., and Advantus Venture Fund, Inc., the
sub-adviser, Templeton Investment Counsel, Inc., Credit Suisse Asset Management,
LLC, and State Street Research & Management Company, respectively, selects the
Fund's investments.)
Advantus Capital Management, Inc. manages twelve mutual funds containing $3.2
billion in assets in addition to $11.5 billion in assets for other clients.
Advantus Capital's seasoned portfolio managers average more than 14 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
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
1-800-AFS-1838
(1-800-237-1838)
<PAGE>
<TABLE>
<S> <C>
ASCEND FINANCIAL SERVICES, INC. PRESORTED STANDARD
400 ROBERT STREET NORTH U.S. POSTAGE PAID
ST. PAUL, MN 55101-2098 ST. PAUL, MN
PERMIT NO. 3547
FORWARDING SERVICE REQUESTED
</TABLE>
F.48647 Rev. 11-2000
