<PAGE>
[LOGO]
SEMI-ANNUAL REPORT TO SHAREHOLDERS
ADVANTUS INTERNATIONAL BALANCED FUND
MARCH 31, 1995
<PAGE>
ADVANTUS INTERNATIONAL BALANCED FUND
TABLE OF CONTENTS
PERFORMANCE UPDATE 2
INVESTMENTS IN SECURITIES 5
STATEMENT OF ASSETS AND
LIABILITIES 14
STATEMENT OF OPERATIONS 15
STATEMENT OF CHANGES IN
NET ASSETS 16
NOTES TO FINANCIAL
STATEMENTS 17
SHAREHOLDER VOTING RESULTS 23
SHAREHOLDER SERVICES 24
<PAGE>
May 15, 1995
[PHOTO]
Dear Shareholders:
Practically everyone would like to annualize the first quarter results. Both
bonds and equities provided excellent returns for investors according to
Ibbotson Associates. For now, investors seem to have positive expectations on
interest rates and are enjoying the benefits on earnings attributed to the
declining dollar. Additionally, they have become increasingly confident in the
ability of the Federal Reserve to engineer a soft landing (i.e., low inflation
without a recession) for the economy.
For the last six months there was even more good news for the markets. The
November election results combined with two additional Federal Reserve moves to
raise short term interest rates and good news on inflation amid signs of slower
economic growth all helped restore investor confidence.
What can be confusing is that a soft landing and a recession often look very
much the same. The economy is on an unpredictable course, and experts seem to be
particularly divided in their opinions. (Opinions always seem to get farther
apart when markets set new highs.) Bulls argue that earnings are excellent and
will remain healthy because of stringent cost controls and improving overseas
operations. Bears believe the Dow is at its peak for the cycle. Also, the
consensus of a soft landing can be shaken badly if the Fed has to raise interest
rates to protect the dollar. Finally, all signs do not indicate inflation can
remain under control.
There is much evidence that we have entered a period where interest rates,
whether increasing or decreasing, are likely to trade in a narrower range.
Slower but steady economic growth, coupled with a moderate inflationary
environment should prove to be positive for fixed income investments. The
uncertainty in the economy over whether we are heading toward a recession or a
soft landing should create buying opportunities in the equity markets.
The saga of the dollar reaffirms the fact that most events are neither totally
positive nor totally negative. The dollar will buy less in Europe and Japan, but
will buy more in Mexico and Canada than a year ago. However, determining which
investments benefit and which suffer from any event is very difficult and
requires experienced professionals to make the best decisions.
Finally, as always, it is important to remember not to vary from your investment
plan and that diversification across asset types and geographic regions is
important because asset classes tend to perform differently from each other in
different market conditions.
Sincerely,
Paul Gooding, President
Advantus Capital Management, Inc.
<PAGE>
ADVANTUS INTERNATIONAL BALANCED FUND
PERFORMANCE UPDATE
[PHOTO]
JIM CHANEY AND NEIL DEVLIN
TEMPLETON INVESTMENT COUNSEL, INC.
PORTFOLIO MANAGERS
The Advantus International Balanced Fund
is a mutual fund designed for investors
seeking a high level of total return. The
hopes to achieve its objective by
investing both stocks and debt securities
issued by companies, large and small,
outside the United States and in debt
securities of governments outside the
United States. While Advantus Capital
Management, Inc. acts as investment
adviser for the Fund, Templeton
Investment Counsel, Inc. provides
investment advice to the Advantus
International Balanced Fund under a
subadvisory agreement.
PERFORMANCE
The Advantus International Balanced Fund Class A shares returned -.96 percent
for six-month period ending March 31, 1995.*
PORTFOLIO RECAP
Looking back to the beginning of 1994, investors expectations were high.
Historical returns from financial markets were well above-average, the economic
base worldwide was growing, people were being put back to work and money poured
into stock mutual funds. Yet, 1994 and the beginning of 1995 was a humbling
experience because many financial markets were adversely affected by recent
global events which included, for example, rising interest rates and the Mexican
monetary crisis. The impact of these events were further exacerbated by
distressed selling by highly-leveraged hedge funds. Fortunately, many of these
recent adverse events can be viewed as being cyclical, not secular. Many
companies today, for example, continue to register good earnings growth as our
global economy expands.
OUTLOOK
What will the next twelve months hold for investors? We do not really know,
because it has always proven difficult to predict short-term events, hence our
long-term investment focus. However, our level of optimism has improved because
prices for many shares remain depressed despite improved fundamentals and the
recent abatement in interest rate increases is positive for bonds.
Your Fund remains well-positioned with stock holdings in market sectors that
include, 1) natural resources oriented shares, 2) selective industrial cyclicals
that continue to offer value, 3) consumer durables shares that include
automobile manufacturers, 4) utilities in strong growth economies and 5)
undervalued financials with strong fundamentals. It is our anticipation that
your fund will continue to be overweighted in Europe.
Central Europe, particularly the former iron curtain countries, are looking more
interesting. We also remain committed to investments in Australia, Canada and
New Zealand. Your stock investments in the emerging markets are also being
maintained despite poor performance in 1994. These markets have always proven to
be volatile yet properly selected investments with long holding periods have
nevertheless generally yielded above-average returns.
2
<PAGE>
ADVANTUS INTERNATIONAL BALANCED FUND
MARCH 31, 1995
The bond portion of your fund has been structured to emphasize value in "hard
currency" markets that include for example, Germany, and those markets that have
the greatest potential for an abatement of interest rate increases (Canada,
Australia, New Zealand and the United Kingdom).
Overall, the fund's stock and bond weightings and are not expected to change
dramatically, with a stock weighting between 65 and 70%, a bond weighting
between 25 and 30% and minimal residual cash and equivalents.
1995 may be much like 1994 with the "madness of crowds" guiding market behavior.
Fortunately, market volatility can create opportunity, especially for
fundamental investors with long-term perspectives. Our long-term outlook remains
favorable. In the 1990's, international investing should continue to offer
opportunity.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Capital Goods 1.5%
Consumer Goods and Services 17.5%
Credit Sensitive 36.6%
Intermediate Goods and
Services 11.5%
Technology 9.3%
Foreign Government Bonds 18.0%
Cash and Other
Assets/Liabilities 5.6%
</TABLE>
*Historical results are not an indication of future performance. These
performance results do not reflect the impact of Class A's maximum 5 percent
front-end sales charge. Class C commenced operations on March 1, 1995,
accordingly, performance is not presented.
3
<PAGE>
ADVANTUS INTERNATIONAL BALANCED FUND
MARCH 31, 1995
FIVE LARGEST STOCK HOLDINGS
<TABLE>
<CAPTION>
MARKET % OF STOCK
COMPANY SHARES VALUE PORTFOLIO
- - ------------------------------------ -------- ---------- -----------
<S> <C> <C> <C>
Aegon............................... 4,926 $ 353,550 1.9%
Burton Group........................ 276,200 344,154 1.9%
Societte Nationale Elf Aquitaine.... 4,300 337,295 1.9%
Banque National de Paris............ 6,600 336,469 1.8%
Hillsdown Holdings.................. 110,844 334,004 1.8%
--
----------
$1,705,472 9.3%
--
--
----------
----------
</TABLE>
FIVE LARGEST BOND HOLDINGS
<TABLE>
<CAPTION>
MARKET % OF BOND
COMPANY VALUE PORTFOLIO
- - --------------------------------------------- ---------- -----------
<S> <C> <C>
Japan Development Bank--6.50%, 09/20/01...... $1,923,943 22.9%
Germany Unity Fund--8.75%, 07/20/00.......... 961,540 11.4%
United Kingdom Treasury--7%, 08/06/97........ 823,890 9.8%
Canada Government Bond--9.5%, 10/01/98....... 778,321 9.2%
Bundesschatzweisungen--6.875%, 12/02/98...... 745,346 8.9%
---------- ---
$5,233,040 62.2%
---------- ---
---------- ---
</TABLE>
4
<PAGE>
ADVANTUS INTERNATIONAL BALANCED FUND
INVESTMENTS IN SECURITIES
MARCH 31, 1995
(UNAUDITED)
(Percentages of each investment category relate to total net assets.)
<TABLE>
<CAPTION>
MARKET
SHARES VALUE(a)
- - --------- ------------
<C> <S> <C>
COMMON STOCKS (64.1%)
ARGENTINA (.8%)
Banking (.8%)
16,300 Argentaria Corporacion Bancaria de Espanol ADR...................... $ 234,312
------------
AUSTRALIA (2.3%)
Banking (1.3%)
16,000 National Australia Bank............................................. 135,198
66,000 Westpac Banking..................................................... 236,244
Building Materials and Components (.9%)
102,000 Pioneer International LTD........................................... 237,168
Transportation (.1%)
1,700 Brambles Industries................................................. 15,761
------------
624,371
------------
AUSTRIA (2.0%)
Electrical and Electronics (.9%)
2,500 VA Technologie (b).................................................. 254,391
Utilities--Gas and Electric (1.1%)
2,400 EVN Energie-Versorgung.............................................. 296,548
------------
550,939
------------
BELGIUM (2.1%)
Chemicals (2.1%)
590 Solvay.............................................................. 291,274
4,300 Union Miniere NPV (b)............................................... 286,871
------------
578,145
------------
BRAZIL (.5%)
Telecommunications (.5%)
5,400 Telecomunicacoes Brasileiras ADR.................................... 142,762
------------
CANADA (2.5%)
Banking (1.1%)
12,000 Canadian Imperial Bank of Commerce.................................. 288,719
Mining and Metals--Container (.9%)
32,000 Metall Mining Corporation (b)....................................... 256,639
</TABLE>
See accompanying notes to investments in securities.
5
<PAGE>
ADVANTUS INTERNATIONAL BALANCED FUND
INVESTMENTS IN SECURITIES--CONTINUED
<TABLE>
<CAPTION>
MARKET
SHARES VALUE(a)
- - --------- ------------
CANADA--CONTINUED
<C> <S> <C>
Utilities--Gas and Electric (.5%)
15,500 Nova Corp of Alberta................................................ $ 136,740
------------
682,098
------------
CHILE (.9%)
Utilities--Gas and Electric (.9%)
3,600 Compania de Telefonos de Chile ADR.................................. 240,300
------------
CZECHOSLOVAKIA (.3%)
Energy Services (.3%)
2,200 Ceske Energeticke (b)............................................... 90,112
------------
FINLAND (1.5%)
Wholesale and International Trade (1.5%)
12,500 Amer Group.......................................................... 213,740
5,400 Metsa-Serla......................................................... 199,747
------------
413,487
------------
FRANCE (4.8%)
Banking (1.2%)
6,600 Banque Nationale de Paris........................................... 336,469
Electrical and Electronics (.2%)
545 Alcatel Alsthom..................................................... 49,364
Energy Sources (1.2%)
4,300 Societe Nationale Elf Aquitaine..................................... 337,295
Health and Personal Care (1.1%)
12,500 Rhone-Poulenc....................................................... 293,996
Transportation (1.1%)
8,600 Regie Nationale Des Usines Renault.................................. 301,073
------------
1,318,197
------------
GERMANY (3.1%)
Banking (1.0%)
600 Deutsche Bank....................................................... 285,731
Chemicals (1.0%)
1,100 Bayer............................................................... 272,490
</TABLE>
See accompanying notes to investments in securities.
6
<PAGE>
ADVANTUS INTERNATIONAL BALANCED FUND
INVESTMENTS IN SECURITIES--CONTINUED
<TABLE>
<CAPTION>
MARKET
SHARES VALUE(a)
- - --------- ------------
GERMANY--CONTINUED
<C> <S> <C>
Energy Services (1.1%)
825 Veba................................................................ $ 300,824
------------
859,045
------------
HONG KONG (3.1%)
Banking (1.0%)
24,000 Hong Kong and Shanghai Banking...................................... 270,816
Multi-Industry (1.0%)
61,000 Hutchison Whampoa................................................... 269,018
Transportation (1.1%)
45,000 Swire Pacific....................................................... 306,996
------------
846,830
------------
INDIA (.9%)
Financial Services (.9%)
85,000 India Fund.......................................................... 252,668
------------
INDONESIA (1.6%)
Financial Services (.8%)
200,000 J.F. Indonesia Fund (b)............................................. 226,326
Forest Products and Paper (.8%)
151,500 P.T. Barito Pacific Timber.......................................... 204,775
------------
431,101
------------
ITALY (.9%)
Telecommunications (.9%)
122,000 Stet di Risp........................................................ 245,855
------------
JAPAN (2.0%)
Electrical and Electronics (2.0%)
23,000 Hitachi............................................................. 239,583
6,000 Sony................................................................ 302,083
------------
541,666
------------
MEXICO (.5%)
Chemicals (.4%)
40,000 Vitro............................................................... 115,085
</TABLE>
See accompanying notes to investments in securities.
7
<PAGE>
ADVANTUS INTERNATIONAL BALANCED FUND
INVESTMENTS IN SECURITIES--CONTINUED
<TABLE>
<CAPTION>
MARKET
SHARES VALUE(a)
- - --------- ------------
MEXICO--CONTINUED
<C> <S> <C>
Utilities--Gas and Electric (.1%)
800 Telefonos de Mexico ADR............................................. $ 22,800
------------
137,885
------------
NETHERLANDS (4.4%)
Broadcasting, Advertising and Publishing (1.1%)
5,800 International Nederlanden Group..................................... 288,514
Building Materials and Components (.9%)
6,150 European Vinyls (b)................................................. 258,488
Insurance (1.3%)
4,926 Aegon............................................................... 353,550
Merchandising (1.1%)
4,200 Koninklijke Bijenkorf Beheer........................................ 298,973
------------
1,199,525
------------
NEW ZEALAND (1.9%)
Forest Products and Paper (.9%)
108,000 Fletcher Challenge.................................................. 255,680
Wholesale and International Trade (1.0%)
358,750 Brierley Investments................................................ 260,423
------------
516,103
------------
NORWAY (2.4%)
Energy Sources (1.1%)
23,000 Saga Petroleum...................................................... 303,816
Health and Personal Care (.8%)
10,800 Hafslund Nycomed.................................................... 213,992
Mining and Metals--Container (.5%)
12,000 Elkem............................................................... 144,814
------------
662,622
------------
PHILLIPINES (1.0%)
Telecommunications (1.0%)
4,800 Philippine Long Distance Telephone.................................. 285,405
------------
</TABLE>
See accompanying notes to investments in securities.
8
<PAGE>
ADVANTUS INTERNATIONAL BALANCED FUND
INVESTMENTS IN SECURITIES--CONTINUED
<TABLE>
<CAPTION>
MARKET
SHARES VALUE(a)
- - --------- ------------
PORTUGAL (.8%)
<C> <S> <C>
Financial Services (.8%)
2,500 Capital Portugal Fund............................................... $ 209,560
------------
SPAIN (5.0%)
Banking (1.1%)
12,000 Banco Bilbao Vizcaya................................................ 306,666
Energy Sources (.9%)
9,300 Repsol.............................................................. 264,976
Telecommunications (1.0%)
21,000 Telefonica de Espana................................................ 267,500
Utilities--Gas and Electric 2.0%)
6,000 Empresa Nacional de Electricidad.................................... 257,143
48,072 Iberdrola........................................................... 286,143
------------
1,382,428
------------
SWEDEN (5.9%)
Banking (.5%)
9,600 Stadshypotek........................................................ 128,303
Business and Public Service (.9%)
20,800 Esselte............................................................. 251,180
Forest Products and Paper (1.2%)
5,400 Stora Kopparbergs................................................... 322,387
Health and Personal Care (2.2%)
11,000 Astra............................................................... 285,820
26,300 Svenska Handelsbanken............................................... 310,460
Transportation (1.1%)
18,500 Volvo............................................................... 320,046
------------
1,618,196
------------
SWITZERLAND (3.9%)
Electrical and Electronics (1.2%)
340 BBC Brown Boveri LTD................................................ 324,890
Health and Personal Care (1.1%)
190 Societe Generale de Surveillance.................................... 301,187
Insurance (1.6%)
230 Swiss Reinsurance................................................... 153,804
</TABLE>
See accompanying notes to investments in securities.
9
<PAGE>
ADVANTUS INTERNATIONAL BALANCED FUND
INVESTMENTS IN SECURITIES--CONTINUED
<TABLE>
<CAPTION>
MARKET
SHARES VALUE(a)
- - --------- ------------
SWITZERLAND--CONTINUED
<C> <S> <C>
290 Zuerich Versicherung................................................ $ 297,972
------------
1,077,853
------------
THAILAND (.9%)
Financial Services (.9%)
11,534 Thai Fund........................................................... 253,748
------------
TURKEY (.7%)
Financial Services (.7%)
17,000 Turkish Growth Fund................................................. 201,875
------------
UNITED KINGDOM (7.4%)
Banking (1.0%)
27,281 Barclays Bank....................................................... 276,832
Energy Services (2.1%)
60,000 British Gas......................................................... 279,991
28,000 Welsh Water......................................................... 279,111
Food and Household Products (2.0%)
330,000 Albert Fisher Group................................................. 220,376
110,844 Hillsdown Holdings.................................................. 334,004
Merchandising (2.3%)
276,200 Burton Group........................................................ 344,154
32,500 Kwik Save........................................................... 286,913
------------
2,021,381
------------
Total common stocks (cost: $17,775,463)............................. 17,618,469
------------
</TABLE>
See accompanying notes to investments in securities.
10
<PAGE>
ADVANTUS INTERNATIONAL BALANCED FUND
INVESTMENTS IN SECURITIES--CONTINUED
<TABLE>
<CAPTION>
MARKET
SHARES VALUE(a)
- - --------- -----------
PREFERRED STOCKS (2.2%)
<C> <S> <C> <C>
HONG KONG (1.0%)
Multi-Industry (1.0%)
218,000 Jardine Strategic Holdings LTD--7.50%......................... $ 276,860
-----------
MEXICO (.5%)
Utilities--Gas and Electric (.5%)
4,700 Nacional Financiera SA--11.25%................................ 143,350
-----------
UNITED STATES (.7%)
Multi-Industry (.7%)
3,710 Compania de Inversiones en Telecomunications--7.00%........... 185,500
-----------
Total preferred stocks (cost: $623,012)....................... 605,710
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
- - -----------
<C> <S> <C> <C> <C>
LONG-TERM DEBT SECURITIES (26.8%)
AUSTRALIA (1.0%)
Government (1.0%)
180,000 Australian Government Bond (Australian
Dollar)(c).................................... 6.750% 11/15/06 103,663
230,000 Queensland Treasury Corporation (Australian
Dollar)(c).................................... 8.875% 11/08/96 168,788
------------
272,451
------------
CANADA (3.3%)
Government (3.3%)
155,000 Canadian Government Bond (Canadian
Dollar)(c).................................... 10.500% 10/01/04 123,646
1,050,000 Canadian Government Bond (Canadian
Dollar)(c).................................... 9.500% 10/01/98 778,321
------------
901,967
------------
FRANCE (1.5%)
Government (1.5%)
774,000 France Government Bond (French Franc)(c)....... 10.000% 05/27/00 177,524
1,100,000 France Government Bond (French Franc)(c)....... 8.500% 11/12/96 233,372
------------
410,896
------------
</TABLE>
See accompanying notes to investments in securities.
11
<PAGE>
ADVANTUS INTERNATIONAL BALANCED FUND
INVESTMENTS IN SECURITIES--CONTINUED
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE(A)
- - ----------- ------------
GERMANY (7.1%)
<C> <S> <C> <C> <C>
Government (7.1%)
$ 1,000,000 Bundesschatzweisungen (Deutsche Mark)(c)....... 6.875% 12/02/98 $ 745,346
1,205,000 German Unity Fund (Deutsche Mark)(c)........... 8.750% 07/20/00 961,540
335,000 German Unity Fund (Deutsche Mark)(c)........... 8.000% 01/21/02 257,402
------------
1,964,288
------------
HONG KONG (1.0%)
Finance (1.0%)
360,000 PIV Investment Finance (U.S. Dollar)(c)........ 4.500% 12/01/00 264,600
------------
INDIA (.9%)
Finance (.9%)
250,000 Essar Gujarat Ltd (U.S. Dollar)(c)(d).......... 7.900% 07/15/99 245,000
------------
JAPAN (7.0%)
Finance (7.0%)
142,000,000 Japan Development Bank (Japanese Yen)(c)....... 6.500% 09/20/01 1,923,943
------------
UNITED KINGDOM (5.0%)
Government (5.0%)
270,000 United Kingdom Treasury Bond (British Pounds
Sterling)(c).................................. 12.250% 03/26/99 497,222
515,000 United Kingdom Treasury Bond (British Pounds
Sterling)(c).................................. 7.000% 08/06/97 823,890
35,000 United Kingdom Conversion Stock (British Pounds
Sterling)(c).................................. 9.500% 04/18/05 60,393
------------
1,381,505
------------
Total long-term debt securities (cost: $7,014,962)................... 7,364,650
------------
SHORT-TERM SECURITIES (3.8%)
AUSTRALIA (3.7%)
Government (2.1%)
780,000 Australian Treasury Bill (Australian
Dollar)(c).................................... 7.850% 05/24/95 565,432
Electrical and Electronics (1.6%)
600,000 IBM Australia (Australian Dollar)(c)........... 12.000% 03/26/96 448,624
</TABLE>
See accompanying notes to investments in securities.
12
<PAGE>
ADVANTUS INTERNATIONAL BALANCED FUND
INVESTMENTS IN SECURITIES--CONTINUED
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE(A)
- - ----------- ------------
NEW ZEALAND (.1%)
<C> <S> <C> <C> <C>
Government (.1%)
$ 60,000 New Zealand Treasury Bill (New Zealand
Dollar)(c).................................... 9.270% 06/21/95 $ 38,438
------------
Total short-term securities (cost: $1,055,345)....................... 1,052,494
------------
Total investments in securities (cost: $26,468,782) (e).............. $ 26,641,323
------------
------------
<FN>
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) Principal amounts for foreign debt securities are denominated in the
currencies indicated.
(d) Represents a debt security with a variable rate. The interest rate
disclosed is the rate in effect at March 31, 1995.
(e) At March 31, 1995 the cost of securities for federal income tax purposes
was $26,578,647. The aggregate unrealized appreciation and depreciation of
investments in securities based on this cost were:
</TABLE>
<TABLE>
<S> <C> <C>
Gross unrealized appreciation........................................................................ $ 1,206,930
Gross unrealized depreciation........................................................................ (1,144,254)
------------
Net unrealized appreciation.......................................................................... $ 62,676
------------
------------
</TABLE>
See accompanying notes to investments in securities.
13
<PAGE>
ADVANTUS INTERNATIONAL BALANCED FUND
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 1995
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Investments in securities, at market value--see accompanying schedule for detailed
listing (identified cost: $26,468,782)........................................... $ 26,641,323
Cash in bank on demand deposit.................................................... 751,206
Receivable for investment securities sold......................................... 306,723
Accrued interest and dividends receivable......................................... 242,560
Receivable for forward foreign currency contracts held, at value (note 4)......... 1,629,251
Receivable for refundable foreign income taxes withheld........................... 6,458
Organizational costs (note 6)..................................................... 35,850
-------------
Total assets.................................................................. 29,613,371
-------------
LIABILITIES
Payable for investment securities purchased....................................... 364,639
Payable for Fund shares repurchased............................................... 2,423
Payable to Adviser................................................................ 83,470
Payable for forward foreign currency contracts held, at value (note 4)............ 1,687,320
-------------
Total liabilities............................................................. 2,137,852
-------------
Net assets applicable to outstanding capital stock................................ $ 27,475,519
-------------
-------------
Represented by:
Capital stock--$.01 par value (note 1).......................................... $ 27,226
Additional paid-in capital...................................................... 27,474,300
Distributions in excess of net investment income................................ (616)
Accumulated net realized losses from investments................................ (136,796)
Unrealized appreciation of investments and translation of assets and liabilities
in foreign currencies.......................................................... 111,405
-------------
Total--representing net assets applicable to outstanding capital stock........ $ 27,475,519
-------------
-------------
Net assets applicable to outstanding Class A shares............................... $ 27,461,730
-------------
-------------
Net assets applicable to outstanding Class C shares............................... $ 13,789
-------------
-------------
Shares outstanding and net asset value per share:
Class A--Shares outstanding 2,721,198........................................... $ 10.09
-------------
-------------
Class C--Shares outstanding 1,366............................................... $ 10.09
-------------
-------------
</TABLE>
See accompanying notes to financial statements.
14
<PAGE>
ADVANTUS INTERNATIONAL BALANCED FUND
STATEMENT OF OPERATIONS
PERIOD FROM OCTOBER 1, 1994 TO MARCH 31, 1995
(UNAUDITED)
<TABLE>
<S> <C>
Investment income:
Interest......................................................................... $ 266,822
Dividends (net of foreign withholding taxes of $17,085).......................... 131,182
---------
398,004
---------
Expenses (note 5):
Investment advisory fee.......................................................... 102,671
Distribution fees--Class A....................................................... 32,606
Distribution fees--Class C....................................................... 9
Administrative services fee...................................................... 13,900
Custodian fees................................................................... 41,675
Auditing and accounting services................................................. 40,103
Legal fees....................................................................... 4,713
Amortization of organizational costs............................................. 4,137
Directors' fees.................................................................. 182
Registration fees................................................................ 16,849
Printing and shareholder reports................................................. 3,164
Insurance........................................................................ 2,980
Other............................................................................ 3,670
---------
Total expenses................................................................. 266,659
Less fees and expenses waived or absorbed:
Class A distribution fees...................................................... (16,303)
Other fund expenses............................................................ (22,688)
---------
Total fees and expenses waived or absorbed..................................... (38,991)
---------
Total net expenses............................................................. 227,668
---------
Investment income--net......................................................... 170,336
---------
Realized and unrealized gains (losses) on investments and foreign currencies:
Net realized gains (losses) from:
Investments (note 3)........................................................... 91,472
Foreign currency transactions.................................................. (18,690)
Net change in unrealized appreciation or depreciation on:
Investments.................................................................... (97,208)
Translation of assets and liabilities in foreign currencies.................... (62,813)
---------
Net losses on investments and foreign currencies............................... (87,239)
---------
Net increase in net assets resulting from operations............................... $ 83,097
---------
---------
</TABLE>
See accompanying notes to financial statements.
15
<PAGE>
ADVANTUS INTERNATIONAL BALANCED FUND
STATEMENT OF CHANGES IN NET ASSETS
PERIOD FROM OCTOBER 1, 1994 TO MARCH 31, 1995 AND
PERIOD FROM JUNE 20, 1994 TO SEPTEMBER 30, 1994
(UNAUDITED)
<TABLE>
<CAPTION>
1995 1994
----------- -------------
<S> <C> <C>
Operations:
Investment income--net............................................. $ 170,336 $ 18,405
Net realized gains (losses) on investments and foreign currency
transactions...................................................... 72,782 (9,584)
Net change in unrealized appreciation or depreciation of
investments and translation of assets and liabilities in foreign
currencies........................................................ (160,021) 271,426
----------- -------------
Increase in net assets resulting from operations................. 83,097 280,247
Distributions to shareholders from:
Investment income--net:
Class A.......................................................... (389,321) --
Class C.......................................................... (63) --
Distributions in excess of net investment income:
Class A.......................................................... (615) --
Class C.......................................................... (1) --
Net realized gains on investments:
Class A.......................................................... (4,177) --
----------- -------------
Total distributions............................................ (394,177) --
----------- -------------
Capital share transactions (notes 5 and 7):
Proceeds from sales:
Class A.......................................................... 12,417,893 15,150,000
Class C.......................................................... 13,536 --
Shares issued as a result of reinvested dividends:
Class A.......................................................... 26,791 --
Class C.......................................................... 64 --
Payments for redemption of shares:
Class A.......................................................... (101,932) --
----------- -------------
Increase in net assets from capital share transactions......... 12,356,352 15,150,000
----------- -------------
Total increase in net assets................................... 12,045,272 15,430,247
Net assets at beginning of period.................................... 15,430,247 --
----------- -------------
Net assets at end of period including (distributions in excess of)
undistributed net investment income of ($616) and $99,393,
respectively)....................................................... $27,475,519 $ 15,430,247
----------- -------------
----------- -------------
</TABLE>
See accompanying notes to financial statements.
16
<PAGE>
ADVANTUS INTERNATIONAL BALANCED FUND
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1995
(UNAUDITED)
(1) ORGANIZATION
The Advantus International Balanced 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. On
February 14, 1995 shareholders of the Fund approved a name change to Advantus
International Balanced Fund, Inc. (effective March 1, 1995). Prior to March 1,
1995 the Fund was known as MIMLIC International Balanced Fund, Inc.
The Fund currently issues two classes of shares: Class A and Class C shares.
Class A shares are sold subject to a front-end sales charge. Class C shares are
sold without a front-end sales charge, but are subject to a higher Rule 12b-1
fee than Class A shares. Class C shares automatically convert to Class A shares
at net asset value after a specified holding period. Such holding period
declines as the amount of the purchase increases and ranges from 40 to 96 months
after purchase for Class C shares. Both classes of shares have identical voting,
dividend, liquidation and other rights and the same terms and conditions, except
that the level of distribution fees charged differs between Class A and Class C
shares.
On June 20, 1994, MIMLIC Asset Management Company (MIMLIC Management)
purchased 15,000 Class A shares for $150,000. Operations of the Fund did not
formally commence until September 16, 1994 when the shares became effectively
registered under the Securities Exchange Act of 1933. Prior to commencement of
operations, The Minnesota Mutual Life Insurance Company (Minnesota Mutual), the
parent of MIMLIC Management, purchased 1,476,997 Class A shares for $15 million.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies followed by the Fund are summarized as
follows:
INVESTMENTS IN SECURITIES
Investments in securities traded on a U.S. or foreign securities 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. When market quotations are not readily available,
securities are valued at fair value as determined in good faith by the Board of
Directors. Such fair values are determined using pricing services or prices
quoted by independent brokers. Short-term securities with maturities of less
than 60 days when acquired, or which subsequently are within 60 days of
maturity, are valued at amortized cost which approximates 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.
17
<PAGE>
NOTES TO FINANCIAL STATEMENTS--CONTINUED
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)
FOREIGN CURRENCY TRANSLATIONS AND FORWARD FOREIGN CURRENCY CONTRACTS
Securities and other assets and liabilities denominated in foreign
currencies are translated daily into U.S. dollars at the closing rate of
exchange. Foreign currency amounts related to the purchase or sale of
securities, income and expenses are translated at the exchange rate on the
transaction date. The Fund does not isolate that portion of the results of
operations resulting from changes in foreign exchange rates on investments from
the fluctuations arising from changes in market prices of securities held. Such
fluctuations are included with net realized and unrealized gains or losses from
investments.
Net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, sales of foreign currencies, currency gains
or losses realized between trade and settlement dates on securities
transactions, the difference between the amounts of dividends, interest and
foreign withholding taxes recorded on the Fund's books and the U.S. dollar
equivalent of the amounts actually received or paid. Net unrealized foreign
exchange gains and losses arise from changes in the value of assets and
liabilities, other then investments in securities, resulting from changes in the
exchange rate.
The Fund also may enter into forward foreign currency exchange contracts for
operational purposes and to protect against adverse exchange rate fluctuations.
The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Fund and the resulting unrealized appreciation and
depreciation are determined using foreign currency exchange rates from an
independent pricing service. The Fund is subject to the credit risk that the
other party will not complete the obligations of the contract.
FEDERAL TAXES
The Fund's policy is to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
taxable income to shareholders. Therefore, no income tax provision is required.
The Fund's policy is to make required minimum distributions prior to December
31, in order to avoid federal excise tax.
Net investment income 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 (losses) were recorded by
the Fund.
On the statement of assets and liabilities, as a result of permanent
book-to-tax differences, adjustments have been made to decrease additional
paid-in capital in the amount $4,137, increase excess distributions in the
amount of $119,655 and decrease accumulated realized gains in the amount of
$115,518.
DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income are declared and paid quarterly in cash
or reinvested in additional shares. Realized gains, if any, are paid annually.
18
<PAGE>
NOTES TO FINANCIAL STATEMENTS--CONTINUED
(3) INVESTMENT SECURITY TRANSACTIONS
For the period from October 1, 1994 to March 31, 1995, purchases of
securities and proceeds from sales, other than temporary investments in
short-term securities aggregated $17,149,644 and $4,187,669, respectively.
(4) FORWARD FOREIGN CURRENCY CONTRACTS
On March 31, 1995, the Fund had entered into seventeen forward foreign
currency exchange contracts that obligate the Fund to deliver currencies at
specified future dates. The unrealized depreciation of $58,550 on these
contracts is included in the accompanying financial statements. The terms of the
open contracts were as follows:
<TABLE>
<CAPTION>
U.S $ U.S $
EXCHANGE CURRENCY TO VALUE AS OF CURRENCY TO VALUE AS OF
DATE BE DELIVERED 3/31/95 BE RECEIVED 3/31/95
- - ---------- ---------------------- ------------ --------------------- ------------
<C> <C> <S> <C> <C> <C> <C>
04/04/95 29,788 US$ $ 29,788 770,893 CSK $ 29,788
04/28/95 29,599 US$ 29,599 143,850 FRF 29,994
04/03/95 50,205 US$ 50,205 4,407,967 JPY 51,018
04/10/95 12,285 US$ 12,285 355,920 BEL 12,664
04/28/95 18,106 US$ 18,106 86,545 FRF 18,045
04/06/95 15,474 US$ 15,474 21,010 AUD 15,410
04/10/95 19,507 US$ 19,507 551,476 BEL 19,622
08/29/95 479,274 US$ 479,274 655,000 DEM 479,612
04/04/95 29,536 US$ 29,536 770,893 CSK 29,788
04/12/95 21,500 GBP 35,019 34,099 US$ 34,099
04/12/95 8,481 GBP 13,813 13,509 US$ 13,509
04/13/95 2,166 GBP 3,527 3,480 US$ 3,480
04/06/95 74,538 CHF 66,195 64,787 US$ 64,787
08/29/95 655,000 DEM 479,612 424,443 US$ 424,443
04/03/95 320,000 CAD 228,123 226,358 US$ 226,358
04/03/95 240,000 CAD 171,093 170,478 US$ 170,478
04/07/95 9,500 NZD 6,164 6,156 US$ 6,156
------------ ------------
$ 1,687,320 $ 1,629,251
------------ ------------
------------ ------------
</TABLE>
<TABLE>
<S> <C>
CSK Czechoslovakian Koruna
FRF French Franc
JPY Japanese Yen
BEL Belgium Franc
AUD Australian Dollar
DEM German Deutch Mark
CHF Swiss Franc
GBP British Pound Sterling
CAD Canadian Dollar
NZD New Zealand Dollar
</TABLE>
19
<PAGE>
NOTES TO FINANCIAL STATEMENTS--CONTINUED
(5) EXPENSES AND RELATED PARTY TRANSACTIONS
On February 14, 1995 shareholders of the Fund approved a new investment
advisory agreement, effective March 1, 1995, with Advantus Capital Management,
Inc. (Advantus Capital or the Adviser). Advantus Capital is a wholly-owned
subsidiary of MIMLIC Management which, prior to March 1, 1995, served as
investment adviser to the Fund. Under the agreement, Advantus Capital manages
the Fund's assets and provides research, statistical and advisory services and
pays related office rental and executive expenses and salaries. In addition, as
part of the advisory fee, Advantus Capital pays the expenses of the Fund's
transfer, dividend disbursing and redemption agent (Minnesota Mutual). The fee
for investment management and advisory services is based on the average daily
net assets of the Fund at the annual rate of .95 percent on the first $25
million in net assets, .80 percent on the next $25 million, .75 percent on the
next $50 million and .65 percent on net assets in excess of $100 million. Fees
under the new agreement with Advantus Capital are the same as under the old
agreement with MIMLIC Management.
On February 14, 1995 shareholders of the Fund also approved a new
sub-advisory agreement between Advantus Capital and Templeton Investment
Counsel, Inc. (Templeton). From its advisory fee, Advantus Capital pays
Templeton, a fee equal to an annual rate of .70 percent on the first $25 million
in net assets, .55 percent on the next $25 million, .50 percent on the next $50
million and .40 percent on net assets in excess of $100 million. Fees under the
new sub-advisory agreement between Advantus Capital and Templeton are the same
as the old agreement between MIMLIC Management and Templeton.
The Fund has adopted separate Plans of Distribution applicable to Class A
and Class C shares, respectively, relating to the payment of certain
distribution expenses pursuant to Rule 12b-1 under the Investment Company Act of
1940 (as amended). The Fund pays distribution fees to MIMLIC Sales Corporation
(MIMLIC Sales), the underwriter of the Fund, to be used to pay certain expenses
incurred in the distribution, promotion and servicing of the Fund's shares. The
Class A Plan provides for a fee up to .30 percent of average daily net assets of
Class A shares. The Class C Plan provides for a fee of up to 1.00 percent of
average daily net assets of Class C shares. The Class C 1.00 percent fee is
comprised of a .75 percent distribution fee and a .25 percent service fee.
MIMLIC Sales is currently waiving that portion of Class A distribution 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 pays an administrative services fee to Minnesota Mutual for
accounting, auditing, legal and other administrative services which Minnesota
Mutual provides. Prior to February 1, 1995 the administrative services fee was
$2,450 per month. Effective February 1, 1995 the administrative services fee is
$2,050 per month.
20
<PAGE>
NOTES TO FINANCIAL STATEMENTS--CONTINUED
(5) EXPENSES AND RELATED PARTY TRANSACTIONS--(CONTINUED)
Advantus Capital (MIMLIC Management prior to March 1, 1995) directly incurs
and pays the above operating expenses and the Fund in turn reimburses Advantus
Capital and MIMLIC Management. During the period from October 1, 1994 to March
31, 1995, Advantus Capital and MIMLIC Management voluntarily agreed to absorb
$22,688 in expenses that were otherwise payable by the Fund.
Sales charges received by MIMLIC Sales for distributing the Fund's two
classes of shares amounted to $78,059.
As of March 31, 1995, Minnesota Mutual and subsidiaries and the directors
and officers of the Fund as a whole own the following shares:
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENTAGE OWNED
------------------ -------------------
<S> <C> <C>
Class A..................................................................... 2,490,726 91.5%
Class C..................................................................... 1,012 74.0%
</TABLE>
Legal fees were paid to a law firm of which the Fund's secretary is a
partner in the amount of $4,218.
(6) ORGANIZATIONAL COSTS
The Fund incurred organizational expenses in connection with the start-up
and initial registration. These costs will be amortized over 60 months on a
straight-line basis beginning with the commencement of operations. If any or all
of the shares held by MIMLIC Management, or any other holder, representing
initial capital of the Fund are redeemed during the amortization period, the
redemption proceeds will be reduced by the pro rata portion (based on the ratio
that the number of initial shares redeemed bears to the total number of
outstanding initial shares of the Fund at the date of redemption) of the
unamortized organizational cost balance.
(7) CAPITAL SHARE TRANSACTIONS
Transactions in shares for the period from October 1, 1994 to March 31, 1995
and the period from June 20, 1994 to September 30, 1994 for Class A shares and
the period from March 1, 1995 to March 31, 1995 for Class C shares were as
follows:
<TABLE>
<CAPTION>
CLASS A CLASS C
---------------------- -----------
1995 1994 1995
---------- ---------- -----------
<S> <C> <C> <C>
Sold............................................................................. 1,236,790 1,491,997 1,360
Issued for reinvested distributions.............................................. 2,701 -- 6
Redeemed......................................................................... (10,290) -- --
---------- ---------- -----
1,229,201 1,491,997 1,366
---------- ---------- -----
---------- ---------- -----
</TABLE>
21
<PAGE>
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 CLASS C
------------------------------- -----------
PERIOD FROM PERIOD FROM PERIOD FROM
OCTOBER 1, SEPTEMBER 16, MARCH 1,
1994 TO 1994(A) TO 1995(A) TO
MARCH 31, SEPTEMBER 30, MARCH 31,
1995 1994 1995
----------- ------------- -----------
<S> <C> <C> <C>
Net asset value, beginning of period................... $ 10.34 $ 10.54 $ 9.95
----------- ------------- -----------
Income from investment operations:
Net investment income (loss)......................... (.02) .01 .05
Net gains or losses on securities (both realized and
unrealized)......................................... (.07) (.21) .15
----------- ------------- -----------
Total from investment operations................... (.09) (.20) .20
----------- ------------- -----------
Less distributions:
Dividends from net investment income................. (.15) -- (.06)
Distributions from capital gains..................... (.01) -- --
----------- ------------- -----------
Total distributions................................ (.16) -- (.06)
----------- ------------- -----------
Net asset value, end of period......................... $ 10.09 $ 10.34 $ 10.09
----------- ------------- -----------
----------- ------------- -----------
Total return (b)....................................... (.96)%(c) (1.90)%(d) 2.06%(e)
Net assets, end of period (in thousands)............... $27,462 $15,430 $ 14
Ratio of expenses to average daily net assets (f)...... 2.09%(g) .09%(h) .27%(h)
Ratio of net investment income to average daily net
assets (f)............................................ 1.57%(g) .14%(h) .33%(h)
Portfolio turnover rate (excluding short-term
securities)........................................... 21.91% 12.14% 21.91%
<FN>
- - ----------
(a) Commencement of operations.
(b) Total return figures are based on a share outstanding throughout the period
and assumes reinvestment of distributions at net asset value. Total return
figures do not reflect the impact of sales charges.
(c) Total return is presented for the period from October 1, 1994 to March 31,
1995.
(d) Total return is presented for the period from September 16, 1994,
commencement of operations, to September 30, 1994.
(e) Total return is presented for the period from March 1, 1995, commencement
of operations, to March 31, 1995.
(f) The Fund's Distributor and Adviser voluntarily waived or absorbed $38,991
and $4,034 in expenses for the periods ended March 31, 1995 and September
30, 1994, respectively. If the Fund had been charged for theses expenses,
the ratio of expenses to average daily net assets would have been 2.45% and
.10% for Class A shares, respectively and .28% for Class C shares. The
ratio of net investment income and average daily net assets would have been
1.21% and .12% for Class A shares, respectively and .31% for Class C
shares.
(g) Adjusted to an annual basis.
(h) Ratios presented for the periods from March 1, 1995 to March 31, 1995 and
September 16, 1994 to September 30, 1994 are not annualized as they are not
indicative of anticipated results.
</TABLE>
22
<PAGE>
SHAREHOLDER VOTING RESULTS
On February 14, 1995, a regular shareholder meeting was held. Shareholders
of record on December 19, 1994 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>
Paul H. Gooding.......................................................... 2,039,370 669
Frederick P. Feuerherm................................................... 2,039,370 669
Ralph D. Ebbott.......................................................... 2,039,370 1,147
Ellen S. Berscheid....................................................... 2,039,370 1,147
Charles E. Arner......................................................... 2,039,370 669
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES VOTING
-------------------------------
FOR AGAINST ABSTAIN
--------- --------- ---------
<C> <S> <C> <C> <C>
(2) To ratify or reject the selection by the Board of
Directors of KPMG Peat Marwick LLP as the
independent public accountant for the Fund for the
fiscal year ending September 30, 1995............... 2,039,375 455 209
(3) To approve or reject the proposal to amend the
Fund's Articles of Incorporation to change the name
of the Fund from MIMLIC International Balanced Fund,
Inc. to Advantus International Balanced Fund,
Inc. ............................................... 2,036,508 2,939 593
(4)(a) To approve or disapprove a new Investment Advisory
Agreement with Advantus Capital Management, Inc., a
wholly-owned subsidiary of MIMLIC Asset Management
Company, the previous investment adviser of the
Fund................................................ 2,037,751 2,077 211
(4)(b) To approve or disapprove a new Investment
Sub-Advisory Agreement between Advantus Capital
Management, Inc. and Templeton Investment Counsel,
Inc. ............................................... 2,037,751 1,571 718
</TABLE>
23
<PAGE>
SHAREHOLDER SERVICES
The Advantus Family of Funds offers a variety of services that enhance your
ability to manage your assets. Check each Fund's prospectus for the details of
the services and any limitations that apply to a particular Fund:
EXCHANGE PRIVILEGES: You can move all or part of your investment dollars from
one fund to any other Advantus Fund you own (for identical registrations within
the same class) at any time as your needs change. Exchanges are at the then
current net asset value. (Exchanges from the Money Market Fund will incur the
applicable sales charge, if not previously subjected to the charge.)
Shareholders may make four exchanges or telephone transfers between the Funds
each calendar year without incurring a transaction charge. Thereafter, there
will be a $7.50 transaction charge for each additional exchange or transfer
within the calendar year. Systematic Exchange Plans are exempt from this charge.
INCOME DISTRIBUTION FLEXIBILITY: You can have your fund dividends and other
distributions automatically reinvested with no sales charge, direct them from
one Advantus Fund to any other you own within the Fund family or, if you desire,
we'll pay you in cash.
SYSTEMATIC WITHDRAWAL PLAN: You can set up a plan to receive checks at
specified intervals from you fund account--subject to minimum guidelines.
DIRECT DEPOSITS: At your request we will deposit your dividends or systematic
withdrawals directly into your checking or savings account instead of sending
you a check.
TELEPHONE TRANSFER: You may transfer money from one Advantus account to any
other Advantus account you own just by calling our toll free number. Sign up for
telephone exchanges on the Advantus Application or complete the telephone
authorization form.
SYSTEMATIC TRANSFER: If you have an Advantus Money Market account you may
transfer a set amount of money to another Advantus Fund to diversify your
investment portfolio and take advantage of dollar-cost averaging.
AUTOMATIC PAYMENT OF INSURANCE PREMIUMS: You may automatically pay your
Minnesota Mutual insurance premiums out of an Advantus Money Market account.
REDUCED SALES CHARGES: Letter of Intent, combined purchases with spouse,
children or single trust estates, and the Right of Accumulation make it possible
for you to reduce the sales charge on Advantus's non-money market funds.
SPECIAL PURCHASE PLANS: Our special purchase plans enable you to open an
Advantus fund account for as little as $25 and lower your average share cost
through "dollar-cost averaging." (Dollar-cost averaging does not assure a
profit, nor does it prevent loss in declining markets.) One of these plans--The
Automatic Investment Plan--allows you to invest automatically each month from
your checking or saving account.
IRAS, OTHER QUALIFIED PLAN: You can use the Advantus Family of Funds for your
Individual Retirement Account or other qualified plan including SEPs, profit
sharing, money purchase or defined benefit plans.
GROUP INVESTMENT PLAN: This plan provides employers and employees with a
convenient means for investing in the funds through payroll deduction.
24
<PAGE>
TELEPHONE REDEMPTION: You may call us and redeem shares over the phone. Amounts
over $1,000 will be wire transferred to your personal bank account. The
prevailing wire charge will be added to the withdrawal amount. Amounts for less
than $1,000 will be mailed to your bank on your behalf. To set this up, please
send a voided check from your bank.
ACCOUNT UPDATES: You'll receive written confirmation of every investment you
initiate (monthly statements for your Money Market account) and quarterly
reports to help you track all of your investments in the Advantus Family of
Funds, and annual tax statements. Semiannual 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 MIMLIC Sales Corporation, call 1-800-443-3677. Our
voice response system is available from 7 a.m. to 3 a.m. Monday through Friday,
and 8 a.m. to 5 p.m. on Saturday. This system allows you to access current net
asset values and your account balances.
HOW TO INVEST
You can invest in one or more of the eight Advantus Funds through your local
registered representative of MIMLIC Sales Corporation, distributor of the Funds.
Contact your representative for information and a prospectus for any of the
Advantus Funds you are interested in.
MINIMUM INVESTMENTS: Your initial investment in any of the Advantus Funds can
be as small as $25 when you use our Systematic Investment Plan. Minimum lump-sum
initial investment is $250. Minimum subsequent investment is $25.
THE FUND'S MANAGER
Advantus Capital Management, Inc., investment adviser to the Fund, selects
and reviews the Fund's investments and provides executive and other personnel
for the Fund's management.
Advantus Capital Management, Inc.'s six portfolio managers manage eight
mutual funds containing $215 million in assets in addition to $1.8 billion in
assets for other clients. Advantus Capital's seasoned portfolio managers average
more than 10 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
25
<PAGE>
This report has been prepared for shareholders and may be distributed
to others only if preceded or accompanied by a current prospectus.
[LOGO]
MIMLIC SALES CORPORATION
400 ROBERT STREET NORTH
ST. PAUL, MN 55101-2098
1-800-443-3677
