<PAGE>
INTERNATIONAL
ADVANTUS INTERNATIONAL BALANCED FUND, INC.
ANNUAL REPORT TO SHAREHOLDERS DATED SEPTEMBER 30, 2000
[LOGO]
ADVANTUS-TM-
FAMILY OF FUNDS
BALANCED
[BACKGROUND GRAPHIC OF SCALES]
<PAGE>
ADVANTUS INTERNATIONAL BALANCED FUND
TABLE OF CONTENTS
<TABLE>
<S> <C>
PERFORMANCE UPDATE 2
INVESTMENTS IN SECURITIES 8
STATEMENT OF ASSETS AND
LIABILITIES 13
STATEMENT OF OPERATIONS 14
STATEMENTS OF CHANGES IN NET
ASSETS 15
NOTES TO FINANCIAL STATEMENTS 16
INDEPENDENT AUDITORS' REPORT 22
FEDERAL INCOME TAX INFORMATION 23
SHAREHOLDER VOTING RESULTS 25
SHAREHOLDER SERVICES 26
</TABLE>
<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 INTERNATIONAL BALANCED FUND
PERFORMANCE UPDATE
[PHOTO] [PHOTO] [PHOTO]
GARY CLEMONS AND UMRAN DEMIRORS
EDGERTON TUCKER SCOTT III, CFA
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 Fund seeks to achieve its objective by
investing in equity and debt securities issued by large and small international
companies and government agencies. While Advantus Capital Management, Inc. acts
as investment adviser for the Fund, Templeton Investment Counsel, Inc. provides
investment advice to the Fund under a subadvisory agreement.
- Dividends paid quarterly.
- Capital gains distributions paid annually.
PERFORMANCE
The Advantus International Balanced Fund's performance for the year ended
September 30, 2000 for each class of shares offered was as follows:
<TABLE>
<S> <C>
CLASS A.......................... 6.26 PERCENT*
CLASS B.......................... 5.36 PERCENT*
CLASS C.......................... 5.36 PERCENT*
</TABLE>
By comparison, an international equity index, the MSCI EAFE Index,** returned
3.43 percent, and an international bond index, the J.P. Morgan Non-U.S.
Government Bond Index+ returned -8.21 percent for the same period.
The portfolio allocation at September 30, 2000 was 62.0 percent equity,
32.1 percent fixed income with the remaining portion in short-term instruments
and cash.
PERFORMANCE ANALYSIS
This year has been a challenging one for global equity markets and investors. As
investors continued to return to a focus on value, the global sector rotation
that started in March of 2000 persisted during the third quarter and equity
markets in general posted significant declines. This shift away from growth is
certainly one of the factors which explains our performance relative to the
benchmark this year. Profit warnings by several leading telecom companies became
the catalysts for the continued rotation during the most recent quarter. Such
warnings created doubts over the overly high expectations that we thought had
been built into many of the world's telecom and technology stocks. Another
factor that explains our performance was a shift in sentiment toward a slowing
US economy. This shift diverted attention globally away from the speculative end
of the market and focused it on more defensive sectors and companies trading on
undemanding valuations. The return to fundamental analysis and value favors
Templeton's investment approach. On average, our current equity holdings have
been trading on multiples that are approximately one-half those of the MSCI All
Country World Free non-US Index, thus we have benefited on a relative basis from
the rotation into value stocks.
From an equity perspective, as of September 30, 2000, Europe continues to
represent our largest weighting at 39.4 percent, followed by Asia at
11.3 percent and Latin America at 4.5 percent. The best performing stocks during
the year were our pharmaceutical, insurance and electrical and electronics
holdings as the market embraced defensiveness and stable earnings. Our United
Kingdom holdings were weak, and detracted from the year's performance.
Turning to the fixed income portion of the portfolio, during the twelve months
ending September 30, 2000, the JP Morgan Global Government Bond Index ex.
U.S. - a benchmark index for fixed income portion of the International Balanced
Fund - posted a negative return of 8.2 percent in U.S.
2
<PAGE>
dollar terms, underperforming the strong positive return of 7.4 percent for the
JPM U.S. Government Bond Index - a benchmark index for U.S. Treasuries. A
stronger U.S. dollar against the major global currencies during the period
resulted in poor returns for the index in U.S. dollar terms.
The U.S. Treasury yield curve became inverted during the period, shifting upward
on the short-end and downward on the long-end, as the Federal Reserve increased
the Fed funds rate by 125 basis points and the U.S. Treasury implemented a bond
buyback program. The latter resulted in positive returns in the U.S. bond market
in general, as mentioned earlier. Meanwhile, the Euroland benchmark yield curve
merely flattened by rising at the short-end as the ECB raised its reference
interest rate. The positive return of 3.5 percent in local terms of the Euroland
bond market during the period was the result of the interest obtained from
holding such bonds, which offset the decline in their price.
European bonds rose 4.26 percent in local terms, as all European bond markets
offered positive returns in local terms. The U.K. index led the way in Europe,
rising 7.5 percent in local terms despite the Bank of England's official
interest rate increases during the year. German, Italian, French and Spanish
bonds rose 3.6 percent, 3.5 percent, 3.3 percent, and 3.6 percent, respectively,
in local terms. Danish bonds slightly outperformed the Euroland countries,
rising by 3.8 percent, while Sweden outperformed every country, except the U.K.,
rising 7.4 percent as a result of governments commitment to buy back debt with
the fiscal surpluses in excess of the annual budget expectations. The Japanese
Index rose 0.9 percent despite a 25 basis point increase in short-term interest
rates by the Bank of Japan in August. The dollar-bloc bond markets outperformed
the European bond markets in local terms, but underperformed the U.S. market in
local terms. Australian, Canadian, and New Zealand bonds rose 6.1 percent, 6.0
percent and 7.1 percent, respectively, during the year.
At the beginning of the period, investors continued to lose their optimism
regarding the direction of interest rates. Partly because of the potential
negative effect of higher oil prices on inflation, but mostly because of upward
revisions of global economic growth forecasts. The negative bond market outlook
resulted from confirmation of an economic recovery in Europe and better than
expected growth in Japan, as well as continued growth in the U.S. The improved
economic outlook was expected to result in higher commodity prices, capacity
utilization rates and employment rates, all of which would add to inflationary
pressures and a tighter monetary policy stance by central banks. Thus the
positive trend in global growth led to the consensus view that the industrial
economies, except for perhaps Japan, had reached the bottom of their respective
interest rate cycles. During the second half of the period, inflation
expectations improved as oil prices stabilized (albeit at higher levels) and the
economic data showed growth rates converging toward more sustainable levels.
On a macro level, despite the difficulty with generalizing as far as individual
markets are concerned, three factors explain why Japan's equity market lagged
even the weak overall market during the year. First, there was the global
3
<PAGE>
sector rotation into value by foreign investors. Japan still has many richly
valued companies. Second, there was the high profile bankruptcy of a Japanese
retailer, which refocused attention on Japan's historical problems with
over-leveraged companies and poor banking practices. And third, the Central Bank
raised interest rates for the first time in a decade - a symbolic move to
emphasize that Japan's economy is coming out of a deflationary period. However,
investors are concerned that interest rates are being raised too early and that
this could hinder Japan's nascent economic recovery, the same way that tax
increases did in 1997. Despite these issues, we believe that the long-term
potential for a Japanese economic and corporate profit recovery remains. Thus,
our team of analysts continues to work diligently to identify those companies
that are committed to restructuring, have strong balance sheets, and are trading
on reasonable valuations.
In Europe, the main highlight for the year was the continued weakness of both
sterling and the euro versus the US dollar, an event that we attribute to the
relatively stronger economic growth in the United States. At the beginning of
the year, consensus forecasts called for US GDP to slow from 5 percent to 3
percent, but for Eurozone GDP to increase from 2 percent to 3 percent. However,
the United States continued to beat consensus expectations and forecasts have
been upgraded back to 5 percent for the Eurozone. Against the dollar, the euro
has been trading at all-time lows, falling 8 percent this past quarter alone,
and as of September 30, 2000, was 25 percent cheaper in dollar terms than when
it was introduced in January 1999.
OUTLOOK
We are comfortable with holding almost 40 percent of the portfolio in European
equities. Led by exports, which certainly benefit from a relatively weak
currency and productivity improvements, we are optimistic that European economic
growth will beat consensus expectations. We expect productivity to be boosted by
structural reforms relating to Europe's restrictive labor markets and by
reductions in onerous corporate tax rates. In the last few months, Germany,
France and Italy have each committed to bringing down their corporate tax levels
over the next several years. Higher tax rates in Europe - often upside of 50
percent - made it difficult for European companies to compete globally when
other companies, particularly those in the US, have had corporate tax rates
closer to 35 percent. Tax reforms will result in improved cash flows, giving
companies more flexibility in their balance sheets and future investment.
Structural reforms and corporate restructuring also remain core themes for many
of our European holdings.
We also believe that global inflation will likely be low in the period ahead and
that global economic growth should continue to be slightly higher than the
historical averages. This is an ideal environment for high quality bonds and
this makes the management team positive for the outlook for the fixed income
assets of the Fund going forward.
We continue to believe that Templeton's disciplined investment philosophy and
rigorous fundamental analysis will benefit both absolute and relative returns in
this turbulent environment.
*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 MSCI EAFE Index is an unmanaged index of common stocks from European,
Australian, and Far Eastern markets.
+The J.P. Morgan Non-U.S. Government Bond Index includes all liquid foreign
government issues of Australia, Belgium, Canada, Denmark, France, Germany,
Italy, Japan, Netherlands, Spain, Sweden and United Kingdom.
4
<PAGE>
COMPARISON OF CHANGE IN VALUE OF $10,000
INVESTMENT IN ADVANTUS INTERNATIONAL BALANCED FUND,
MSCI EAFE INDEX, J.P. MORGAN NON-U.S. GOVERNMENT BOND 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 International Balanced Fund compared to the
EAFE Index, the J.P. Morgan Non-U.S. Government Bond Index and the Consumer
Price Index. The four 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 International Balanced Fund (September 16, 1994 for Class
A, January 31, 1997 for Class B, and March 1, 1995 for Class C) through
September 30, 2000.
CLASS A
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN:
<S> <C>
One year .42%
Five year 6.79%
Since inception (9/16/94) 6.50%
</TABLE>
(Thousands)
<TABLE>
<CAPTION>
CLASS A EAFE INDEX J.P. MORGAN INDEX CPI
<S> <C> <C> <C> <C>
9/16/94 $10,000 $10,000 $10,000 $10,000
9/30/94 9,274 9,845 10,094 10,054
9/30/95 9,961 10,460 11,972 10,275
9/30/96 11,030 11,399 12,605 10,584
9/30/97 13,576 12,819 12,639 10,818
9/30/98 11,809 11,782 14,133 10,973
9/30/99 13,775 15,472 14,256 11,261
9/30/00 14,638 16,003 13,087 11,643
</TABLE>
CLASS B
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN:
<S> <C>
One year .36%
Since inception (1/31/97) 4.12%
</TABLE>
(Thousands)
<TABLE>
<CAPTION>
CLASS B EAFE INDEX J.P. MORGAN INDEX CPI
<S> <C> <C> <C> <C>
1/31/97 $10,000 $10,000 $10,000 $10,000
9/30/97 10,730 11,246 10,027 10,094
9/30/98 9,264 10,336 11,212 10,238
9/30/99 10,887 13,573 11,310 10,507
9/30/00 11,589 14,039 10,382 10,864
</TABLE>
5
<PAGE>
CLASS C
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN:
<S> <C>
One year 5.36%
Five year 7.13%
Since inception (3/1/95) 8.23%
</TABLE>
(Thousands)
<TABLE>
<CAPTION>
CLASS C EAFE INDEX J.P. MORGAN INDEX CPI
<S> <C> <C> <C> <C>
3/1/95 $10,000 $10,000 $10,000 $10,000
9/30/95 11,026 11,175 11,198 10,146
9/30/96 12,120 12,179 11,791 10,450
9/30/97 14,780 13,696 11,822 10,682
9/30/98 12,759 12,588 13,219 10,834
9/30/99 14,738 16,530 13,335 11,119
9/30/00 15,555 17,097 12,241 11,497
</TABLE>
The preceding charts are useful because they provide you with more information
about your investments. There are limitations, however. An index may reflect the
performance of securities that the Fund may not hold. Also, the index does not
deduct sales charges, investment advisory fees and other fund expenses, whereas
your Fund does. Performance presented for the Fund reflects the deduction of the
maximum 5.5 percent front-end sales charge for Class A and the maximum
applicable contingent deferred sales charge for Class B shares. 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.
6
<PAGE>
FIVE LARGEST STOCK HOLDINGS
<TABLE>
<CAPTION>
MARKET % OF STOCK
COMPANY SHARES VALUE PORTFOLIO
------- -------- ---------- -----------
<S> <C> <C> <C>
ING Groep............................... 17,850 $1,189,008 3.6%
E.On Ag................................. 22,160 1,142,082 3.4%
XL Capital, Ltd. Class A................ 15,400 1,131,900 3.4%
Akzo Nobel.............................. 26,000 1,096,771 3.3%
Shell Transportation & Trading
Company PLC........................... 129,600 1,055,791 3.2%
---------- ---------
$5,615,552 16.9%
========== =========
</TABLE>
FIVE LARGEST BOND HOLDINGS
<TABLE>
<CAPTION>
MARKET % OF BOND
COMPANY VALUE PORTFOLIO
------- ---------- -----------
<S> <C> <C>
International Bank of Reconstruction and
Development 5.250%, 3/20/02..................... $2,246,998 13.0%
Italian Government 7.750%, 11/01/06............... 2,071,206 12.0%
Federal Republic of Germany 4.500%, 7/04/09....... 1,568,478 9.1%
Government of France 4.000%, 10/25/09............. 1,342,825 7.8%
International Bank of Reconstruction and
Development 4.500%, 3/20/03..................... 1,273,891 7.4%
---------- ---------
$8,503,398 49.3%
========== =========
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Financial 17.2%
Energy 5.5%
Communication Services 10.4%
Technology 0.8%
Transportation 2.4%
Capital Goods 7.7%
Consumer Cyclical 2.2%
Basic Materials 6.8%
Utilities 4.7%
Health Care 2.8%
Consumer Staples 1.2%
Foreign Government Bonds 31.9%
Cash and Other Assets/Liabilities 6.4%
</TABLE>
7
<PAGE>
ADVANTUS INTERNATIONAL BALANCED 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 (58.2%)
ARGENTINA (.6%)
Telecommunication (.6%)
22,700 Nortel Invesora SA ADR........................... $ 339,081
-------------
AUSTRALIA (1.9%)
Banks (1.9%)
142,200 Australia & New Zealand Banking Group, Ltd....... 1,022,766
-------------
AUSTRIA (.1%)
Electrical Equipment (.1%)
2,310 EVN.............................................. 65,234
-------------
BERMUDA (2.1%)
Insurance (2.1%)
15,400 XL Capital, Ltd. Class A......................... 1,131,900
-------------
CANADA (.8%)
Mining ( - )
5,500 Kinross Gold Corporation (b)..................... 3,144
Oil & Gas (.8%)
49,750 Husky Energy, Inc. (b)........................... 461,260
-------------
464,404
-------------
CHILE (.7%)
Telecommunication (.7%)
21,430 Compania de Telecomunicaciones de Chile SA ADR... 372,346
-------------
FINLAND (1.9%)
Banks (1.9%)
128,390 Nordic........................................... 908,700
13,000 Stora Enso....................................... 108,874
-------------
1,017,574
-------------
FRANCE (6.7%)
Chemicals (1.6%)
11,199 Aventis (b)...................................... 840,065
Insurance (1.4%)
6,000 AXA.............................................. 783,660
Machinery (.7%)
16,470 Alstom........................................... 380,084
<CAPTION>
MARKET
SHARES VALUE(A)
-------------------------------------------------------------------------
FRANCE--CONTINUED
<C> <S> <C>
Mining (.6%)
7,820 Pechiney......................................... $ 312,622
Oil & Gas (1.0%)
3,610 Total Fina Elf................................... 528,210
Telecommunication (1.4%)
12,200 Alcatel ADR...................................... 767,075
-------------
3,611,716
-------------
GERMANY (2.8%)
Electric Companies (2.1%)
22,160 E.On Ag.......................................... 1,142,082
Manufacturing (.7%)
6,930 Adidas-Salomon................................... 379,175
-------------
1,521,257
-------------
HONG KONG (2.9%)
Electric Companies (.1%)
18,000 Hong Kong Electric Holdings...................... 55,638
Investment Bankers/Brokers (1.3%)
49,200 HSBC Holdings.................................... 687,812
28,000 Peregrine Investments Holdings................... 0
Technology (.2%)
8,100 China.Com Corporation Class A (b)................ 107,831
Telecommunication (1.3%)
68,500 Swire Pacific Class A............................ 426,977
352,400 Swire Pacific Class B............................ 289,264
-------------
1,567,522
-------------
ISRAEL (.8%)
Drugs (.8%)
5,800 TEVA Pharmaceutical Industries, Ltd. ADR......... 424,488
-------------
ITALY (1.1%)
Banks (1.1%)
169,400 Banca Nazionale del Lavoro....................... 571,073
-------------
</TABLE>
See accompanying notes to investments in securities.
8
<PAGE>
ADVANTUS INTERNATIONAL BALANCED FUND
INVESTMENTS IN SECURITIES - CONTINUED
<TABLE>
<CAPTION>
MARKET
SHARES VALUE(A)
-------------------------------------------------------------------------
JAPAN (7.7%)
<C> <S> <C>
Drugs (1.4%)
18,000 Ono Pharmaceutical............................... $ 739,589
Electrical Equipment (1.0%)
5,100 Sony Corporation................................. 517,268
Investment Bankers/Brokers (1.7%)
43,600 Nomura Securities................................ 948,177
Office Equipment (.7%)
17,000 Fujitsu.......................................... 394,873
Telecommunication (1.6%)
86 Nippon Telegraph & Telephone Corporation......... 843,605
Water Utilities (1.3%)
37,000 Kurita Water Industries.......................... 683,093
-------------
4,126,605
-------------
MEXICO (1.6%)
Telecommunication (1.6%)
16,700 Telefonos de Mexico ADR.......................... 888,231
-------------
NETHERLANDS (5.4%)
Chemicals (2.0%)
26,000 Akzo Nobel....................................... 1,096,771
Investment Bankers/Brokers (2.2%)
17,850 ING Groep........................................ 1,189,008
Publishing (1.2%)
32,980 Wolters Kluwer................................... 669,412
-------------
2,955,191
-------------
NEW ZEALAND (.6%)
Telecommunication (.6%)
141,000 Telecom Corporation of New Zealand............... 350,777
-------------
NORWAY (.6%)
Chemicals (.6%)
7,666 Norsk Hydro...................................... 320,880
-------------
PHILIPPINES (.2%)
Telecommunication (.2%)
5,300 Philippine Long Distance Telephone............... 92,922
-------------
<CAPTION>
MARKET
SHARES VALUE(A)
-------------------------------------------------------------------------
SINGAPORE (.6%)
<C> <S> <C>
Technology (.6%)
14,950 Creative Technology.............................. $ 310,213
-------------
SOUTH AFRICA (.2%)
Mining (.2%)
6,300 Anglogold Ltd. ADR............................... 115,763
-------------
SPAIN (4.1%)
Electric Companies (1.2%)
50,072 Iberdrola........................................ 636,315
Oil & Gas (1.8%)
52,550 Repsol........................................... 966,927
Telecommunication (1.1%)
21,738 Telefonica SA.................................... 428,869
2,833 Telefonica SA (b)................................ 168,386
-------------
2,200,497
-------------
SWEDEN (2.2%)
Banks (1.0%)
36,300 Foreningssparbaken............................... 516,257
Trucks and Parts (1.2%)
17,200 Autoliv.......................................... 335,400
20,800 Volvo............................................ 335,763
-------------
1,187,420
-------------
SWITZERLAND (1.9%)
Insurance (.6%)
160 Swiss Reinsurance................................ 305,485
Investment Bankers/Brokers (1.3%)
1,575 Zurich Allied.................................... 728,087
-------------
1,033,572
-------------
UNITED KINGDOM (10.7%)
Aerospace/Defense (.2%)
17,000 BAE Systems PLC.................................. 91,741
Air Freight (.6%)
324,290 Stagecoach Holdings PLC.......................... 327,233
Airlines (1.2%)
154,400 British Airways PLC.............................. 652,311
Chemicals (.3%)
28,881 Hanson PLC....................................... 160,981
</TABLE>
See accompanying notes to investments in securities.
9
<PAGE>
ADVANTUS INTERNATIONAL BALANCED FUND
INVESTMENTS IN SECURITIES - CONTINUED
<TABLE>
<CAPTION>
MARKET
SHARES VALUE(A)
-------------------------------------------------------------------------
UNITED KINGDOM--CONTINUED
<C> <S> <C>
Electrical Equipment (1.2%)
137,200 Williams PLC..................................... $ 669,406
Food (1.2%)
57,100 J Sainsbury PLC.................................. 314,895
67,100 Tate & Lyle PLC.................................. 231,153
12,750 Unilever PLC..................................... 82,567
Houseware (.3%)
138,600 Elementis PLC.................................... 141,907
Insurance (.9%)
41,700 Allied Zurich PLC................................ 474,115
Manufacturing (1.0%)
218,600 Rolls-Royce PLC.................................. 551,056
Medical Products/Supplies (.6%)
31,750 Nycomed Amersham................................. 309,512
Oil & Gas (1.9%)
129,600 Shell Transportation & Trading Company PLC....... 1,055,791
Retail (.7%)
101,300 Mark & Spencer PLC............................... 304,037
36,083 Mothercare PLC................................... 68,286
Shipping (.6%)
36,425 Peninsular & Oriental Steam Navigation 320,433
Company PLC.....................................
-------------
5,755,424
-------------
Total common stock (cost: $30,347,900)...................... 31,446,856
-------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE(A)
------ --------------
<C> <S> <C>
PREFERRED STOCK (3.5%)
BRAZIL (1.5%)
Chemicals (1.5%)
28,640 Petrol Brasileiros............................... $ 818,064
-------------
GERMANY (.7%)
Trucks and Parts (.7%)
12,605 Volkswagen....................................... 346,510
-------------
ITALY (1.3%)
Telecommunication (1.3%)
131,900 Telecom Italia Spa............................... 719,363
-------------
Total preferred stock (cost: $1,198,809)...................... 1,883,937
-------------
</TABLE>
See accompanying notes to investments in securities.
10
<PAGE>
ADVANTUS INTERNATIONAL BALANCED FUND
INVESTMENTS IN SECURITIES - CONTINUED
<TABLE>
<CAPTION>
MARKET
PRINCIPAL COUPON MATURITY VALUE(A)
--------- ------- ---------- --------------
<C> <S> <C> <C> <C>
LONG-TERM DEBT SECURITIES (31.9%) (c)
AUSTRALIA (1.5%)
Government (1.5%)
1,200,000 New South Wales Treasury Corporation (Australian
Dollar)......................................... 6.500% 05/01/06 $ 647,902
314,000 Queensland Treasury Corporation (Australian
Dollar)......................................... 6.500% 06/14/05 170,318
-------------
818,220
-------------
BELGIUM (1.4%)
Government (1.4%)
775,000 Belgium Government (European Currency Unit)...... 7.500% 07/29/08 765,258
-------------
CANADA (2.0%)
Government (2.0%)
789,000 Canadian Government (Canadian Dollar)............ 7.000% 12/01/06 556,584
671,000 Canadian Government (Canadian Dollar)............ 8.750% 12/01/05 503,732
-------------
1,060,316
-------------
DENMARK (1.4%)
Government (1.4%)
1,436,000 Kingdom of Denmark (Danish Kroner)............... 5.000% 08/15/05 165,219
4,844,000 Kingdom of Denmark (Danish Kroner)............... 7.000% 12/15/04 600,300
-------------
765,519
-------------
FRANCE (4.5%)
Government (4.5%)
1,686,000 Government of France (European Currency Unit).... 4.000% 10/25/09 1,342,825
1,172,000 Government of France (European Currency Unit).... 6.750% 10/25/03 1,084,478
-------------
2,427,303
-------------
GERMANY (4.5%)
Government (4.5%)
1,043,000 Federal Republic of Germany (European Currency
Unit)........................................... 3.250% 02/17/04 868,626
1,875,000 Federal Republic of Germany (European Currency
Unit)........................................... 4.500% 07/04/09 1,568,478
-------------
2,437,104
-------------
ITALY (5.7%)
Government (5.7%)
757,000 Buoni Poliennali del Tesoro (European Currency
Unit)........................................... 5.500% 11/01/10 666,316
2,112,393 Italian Government (European Currency Unit)...... 7.750% 11/01/06 2,071,206
335,000 Italian Government (European Currency Unit)...... 8.500% 08/01/04 326,472
-------------
3,063,994
-------------
</TABLE>
See accompanying notes to investments in securities.
11
<PAGE>
ADVANTUS INTERNATIONAL BALANCED FUND
INVESTMENTS IN SECURITIES - CONTINUED
<TABLE>
<CAPTION>
MARKET
PRINCIPAL COUPON MATURITY VALUE(A)
--------------------------------------------------------------------------------------------------
JAPAN (6.5%)
<C> <S> <C> <C> <C>
Government (6.5%)
125,800,000 International Bank of Reconstruction and
Development (Japanese Yen)...................... 4.500% 03/20/03 $ 1,273,891
227,000,000 International Bank of Reconstruction and
Development (Japanese Yen)...................... 5.250% 03/20/02 2,246,998
-------------
3,520,889
-------------
NETHERLANDS (1.4%)
Government (1.4%)
840,000 Netherlands Government (European Currency
Unit)........................................... 5.750% 02/15/07 760,643
-------------
SPAIN (.8%)
Government (.8%)
404,000 Government of Spain (European Currency Unit)..... 10.150% 01/31/06 432,375
-------------
SWEDEN (.3%)
Government (.3%)
1,700,000 Sweden Kingdom (Swedish Krona)................... 6.000% 02/09/05 182,725
-------------
UNITED KINGDOM (1.9%)
Government (1.9%)
625,000 United Kingdom (British Sterling Pound).......... 7.500% 12/07/06 1,016,007
-------------
Total long-term debt securities (cost: $19,004,035)................... $ 17,250,353
-------------
</TABLE>
<TABLE>
<CAPTION>
SHARES/PAR
----------
<C> <S> <C> <C> <C>
SHORT-TERM SECURITIES (5.9%)
1,208,778 Bankers Trust Institutional Liquid Assets, current rate 6.930%....... 1,208,778
1,012,000 U.S. Treasury Bill............................... 5.862% 11/24/2000 1,002,937
1,000,000 U.S. Treasury Bill............................... 5.840% 12/14/2000 987,833
--------------
Total short-term securities (cost: $3,199,185)....................... 3,199,548
--------------
Total investments in securities (cost: $53,749,929) (d).............. $ 53,780,694
==============
</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) Principle amounts for foreign debt securities are denominated in the
currencies indicated.
(d) At September 30, 2000 the cost of securities for federal income tax purposes
was $54,104,209. The aggregate unrealized appreciation and depreciation of
investments in securities based on their cost were:
<TABLE>
<S> <C>
Gross unrealized appreciation.......... $ 6,264,729
Gross unrealized depreciation.......... (6,588,244)
------------
Net unrealized depreciation............ $ (323,515)
============
</TABLE>
12
<PAGE>
ADVANTUS INTERNATIONAL BALANCED 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: $53,749,929)........................ $ 53,780,694
Cash in bank on demand deposit......................... 8,693
Receivable for Fund shares sold........................ 5,344
Accrued interest and dividend receivable............... 446,036
Receivable for refundable foreign income taxes
withheld.............................................. 50,355
Unrealized appreciation on forward foreign currency
contracts held, at
value (note 4)........................................ 28,842
-------------
Total assets....................................... 54,319,964
-------------
LIABILITIES
Bank overdraft of foreign currency (cost: 215,789)..... 213,011
Payable for Fund shares redeemed....................... 32,508
Payable to Adviser..................................... 7,224
-------------
Total liabilities.................................. 252,743
-------------
Net assets applicable to outstanding capital stock..... $ 54,067,221
=============
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................ $ 46,705
Additional paid-in capital........................... 50,399,580
Accumulated net realized gains from investments and
foreign currency transactions........................ 4,701,241
Excess distributions of net investment income........ (1,083,724)
Unrealized appreciation on investments and
translation of assets and liabilites in foreign
currency............................................. 3,419
-------------
Total - representing net assets applicable to
outstanding capital stock.......................... $ 54,067,221
=============
Net assets applicable to outstanding Class A shares.... $ 47,692,601
=============
Net assets applicable to outstanding Class B shares.... $ 4,646,776
=============
Net assets applicable to outstanding Class C shares.... $ 1,727,844
=============
Shares outstanding and net asset value per share:
Class A - Shares outstanding 4,115,810............... $ 11.59
=============
Class B - Shares outstanding 404,462................. $ 11.49
=============
Class C - Shares outstanding 150,239................. $ 11.50
=============
</TABLE>
See accompanying notes to financial statements.
13
<PAGE>
ADVANTUS INTERNATIONAL BALANCED FUND
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 2000
<TABLE>
<S> <C>
Investment income:
Interest............................. $ 836,606
Dividends (net of foreign withholding
taxes of $90,114).................. 1,141,912
-------------
Total investment income.......... 1,978,518
-------------
Expenses (note 5):
Investment advisory fee.............. 456,877
Rule 12b-1 - Class A................. 125,804
Rule 12b-1 - Class B................. 52,457
Rule 12b-1 - Class C................. 20,248
Administrative services fee.......... 63,600
Transfer agent and shareholder
services fee....................... 63,266
Custodian fees....................... 36,276
Auditing and accounting services..... 21,730
Fund accounting servicing fee........ 52,063
Legal fees........................... 13,447
Directors' fees...................... 758
Registration fees.................... 30,066
Printing and shareholder reports..... 56,957
Insurance............................ 3,634
Other................................ 7,687
-------------
Total expenses................... 1,004,870
-------------
Less fees and expenses waived or
absorbed by Adviser and
Distributor:
Class A distribution fees.......... (25,174)
Other waived fees.................. (48,370)
-------------
Total fees and expenses waived or
absorbed........................ (73,544)
-------------
Total net expenses............... 931,326
-------------
Investment income - net.......... 1,047,192
-------------
Realized and unrealized gains (losses)
on investments and foreign
currencies:
Net realized gains (losses) from:
Investments (note 3)............... 4,859,131
Foreign currency transactions...... (152,470)
-------------
4,706,661
-------------
Net change in unrealized appreciation
or depreciation on:
Investments........................ (2,251,706)
Translation of assets and
liabilities in foreign
currencies........................ 13,051
-------------
(2,238,655)
-------------
Net gains on investments and
foreign currencies.............. 2,468,006
-------------
Net increase in net assets resulting
from operations...................... $ 3,515,198
=============
</TABLE>
See accompanying notes to financial statements.
14
<PAGE>
ADVANTUS INTERNATIONAL BALANCED 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 income - net.............. $ 1,047,192 $ 962,175
Net realized gains on investments and
foreign currency transactions...... 4,706,661 3,023,068
Net change in unrealized appreciation
or depreciation on investments and
translation of assets and
liabilites in foreign currency..... (2,238,655) 4,821,805
------------ ------------
Increase in net assets resulting
from operations................ 3,515,198 8,807,048
------------ ------------
Distributions to shareholders from:
Investment income - net:
Class A............................ (1,527,226) (458,918)
Class B............................ (94,738) (27,664)
Class C............................ (35,036) (13,418)
Net realized gains on investments:
Class A............................ (2,403,909) (1,647,144)
Class B............................ (253,578) (184,787)
Class C............................ (101,998) (108,873)
------------ ------------
Total distributions.............. (4,416,485) (2,440,804)
------------ ------------
Capital share transactions (notes 5 and
6):
Proceeds from sales:
Class A............................ 1,208,791 9,201,903
Class B............................ 608,208 1,190,985
Class C............................ 186,743 255,735
Proceeds from issuance of shares as a
result of reinvested dividends:
Class A............................ 2,857,463 1,782,694
Class B............................ 333,981 212,640
Class C............................ 136,616 119,179
Payments for redemption of shares:
Class A............................ (5,038,334) (12,983,074)
Class B............................ (1,535,512) (1,532,470)
Class C............................ (1,094,732) (1,276,785)
------------ ------------
Decrease in net assets from
capital share transactions..... (2,336,776) (3,029,193)
------------ ------------
Total increase (decrease) in net
assets......................... (3,238,063) 3,337,051
Net assets at beginning of year........ 57,305,284 53,968,233
------------ ------------
Net assets at end of year (including
undistributed net investment income
(loss) of ($1,083,724) and $456,217,
respectively)........................ $ 54,067,221 $ 57,305,284
============ ============
</TABLE>
See accompanying notes to financial statements.
15
<PAGE>
ADVANTUS INTERNATIONAL BALANCED FUND
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(1) ORGANIZATION
The Advantus International Balanced Fund, Inc. (the Fund) is registered
under the Investment Company Act of 1940 (as amended) as a diversified, open-end
management investment company. The Fund is designed for investors seeking a high
level of total return through investing in both stocks and debt securities
outside the United States.
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 declines as the amount of the purchase increases and range from 28 to 84
months after purchase for Class B shares and from 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
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, 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. 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.
16
<PAGE>
ADVANTUS INTERNATIONAL BALANCED FUND
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. 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 than 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 (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
cost of redemptions, which occurred during the year ended September 30, 2000,
reduced accumulated net realized gains for tax purposes by $388,706. 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 increase accumulated net investment loss
by $930,133, increase accumulated net realized gains by $541,482, and increase
additional paid-in capital by $388,651.
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.
17
<PAGE>
ADVANTUS INTERNATIONAL BALANCED FUND
NOTES TO FINANCIAL STATEMENTS - CONTINUED
(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 $24,449,389 and $33,147,292, respectively.
(4) FORWARD FOREIGN CURRENCY CONTRACTS
On September 30, 2000, the Fund had entered into forward foreign currency
contracts that obligate the Fund to deliver currencies at specified future
dates. Unrealized appreciation and depreciation on these contracts is included
in the accompanying financial statements. The terms of the open contracts were
as follows:
<TABLE>
<CAPTION>
EXCHANGE CURRENCY TO CURRENCY TO UNREALIZED UNREALIZED
DATE BE DELIVERED BE RECEIVED APPRECIATION DEPRECIATION
--------- ------------------- ------------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
10/13/00 1,222,712 US$ 130,500,000 JPY $ - $11,818
10/20/00 1,565,929 US$ 166,928,000 JPY - 14,800
10/13/00 130,500,000 JPY 1,234,626 US$ 23,733 -
10/20/00 166,928,000 JPY 1,582,856 US$ 31,727 -
------- -------
$55,460 $26,618
======= =======
</TABLE>
<TABLE>
<S> <C>
JPY Japanese Yen
US$ United States Dollar
</TABLE>
(5) 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 $250 million in net assets, .65 percent on the next
$250 million, .60 percent on the next $500 million and .55 percent on net assets
in excess of $1 billion. Prior to May 1, 2000, the fee was based on the average
daily net assets of the Fund at the annual rate of .95 percent on the first
$25 million, .75 on the next $50 million and .60 percent on net assets in excess
of $100 million.
Advantus Capital has a sub-advisory agreement with 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.
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 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 for a fee of up to 1.00 percent of average daily net
assets of Class B and Class C shares. The Class B and Class C 1.00 percent
18
<PAGE>
ADVANTUS INTERNATIONAL BALANCED FUND
NOTES TO FINANCIAL STATEMENTS - CONTINUED
(5) EXPENSES AND RELATED PARTY TRANSACTIONS - (CONTINUED)
fee is comprised of a .75 percent distribution fee and a .25 percent service
fee. Ascend is currently waiving that portion of Class A Rule 12b-1 fees which
exceeds, as a percentage of average daily net assets, .20 percent. Ascend waived
Class A Rule 12b-1 fees in the amount of $25,174 for the year ended
September 30, 2000.
The Fund also bears certain other operating expenses including outside
directors' fees, custodian fees, registration fees, printing and shareholder
reports, legal, 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
a shareholder 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 $5,300 per
month for accounting, auditing, 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 1.62% of Class A average daily net assets, 2.42% of Class B average
daily net assets and 2.42% 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 $48,370 in
expenses which were otherwise payable by the Fund, in addition to the waived
Class 12b-1 fees discussed above.
The Fund has an agreement with SEI Investments Mutual Fund Services (SEI)
whereby SEI provides daily fund accounting services. Under this agreement, the
annual fee is equal to the greater of $45,000 or .08 percent of the first
$150 million in net assets and .05 percent of net assets in excess of $150
million.
Sales charges received by Ascend for distributing the Fund's three classes
of shares amounted to $153,603.
As of September 30, 2000, Minnesota Life and subsidiaries and the directors
and officers of the Fund as a whole owned 2,901,337 shares or 70.5 percent of
the Fund's Class A shares.
During the year ended September 30, 2000, legal fees were paid to a law firm
of which the Fund's secretary is a partner in the amount of $10,907.
(6) CAPITAL SHARE TRANSACTIONS
Transactions in shares for the years 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..................................... 100,849 782,370 51,861 105,488 15,773 23,027
Issued for reinvested distributions...... 243,718 160,601 28,797 19,495 11,786 10,820
Redeemed................................. (422,126) (1,106,103) (130,048) (136,104) (92,564) (111,811)
-------- ---------- -------- -------- ------- --------
(77,559) (163,132) (49,390) (11,121) (65,005) (77,964)
======== ========== ======== ======== ======= ========
</TABLE>
19
<PAGE>
ADVANTUS INTERNATIONAL BALANCED 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................ $ 11.80 $ 10.56 $ 13.29 $ 11.42 $ 10.79
------- ------- ------- ------- -------
Income from investment operations:
Net investment income........................... .23 .21 .28 .31 .25
Net gains (losses) on securities (both realized
and unrealized)............................... .50 1.52 (1.95) 2.24 .87
------- ------- ------- ------- -------
Total from investment operations.............. .73 1.73 (1.67) 2.55 1.12
------- ------- ------- ------- -------
Less distributions:
Dividends from net investment income............ (.36) (.11) (.14) (.40) (.28)
Distributions from net realized gains........... (.58) (.38) (.92) (.28) (.21)
------- ------- ------- ------- -------
Total distributions........................... (.94) (.49) (1.06) (.68) (.49)
------- ------- ------- ------- -------
Net asset value, end of year...................... $ 11.59 $ 11.80 $ 10.56 $ 13.29 $ 11.42
======= ======= ======= ======= =======
Total return (b).................................. 6.26% 16.65% (13.02)% 23.09% 10.73%
Net assets, end of year (in thousands)............ $47,693 $49,502 $46,025 $54,090 $40,381
Ratio of expenses to average daily net assets
(c)............................................. 1.52% 1.63% 1.62% 1.51% 1.85%
Ratio of net investment income (loss) to average
daily net assets (c)............................ 1.92% 1.77% 2.38% 2.58% 2.39%
Portfolio turnover rate (excluding short-term
securities)..................................... 44.2% 73.8% 57.0% 73.4% 56.1%
</TABLE>
------------
(a) Commencement of operations.
(b) 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.
(c) The Fund's Distributor and Adviser voluntarily waived or absorbed $73,544,
$35,105, $162,744, $114,735, and $53,123 in expenses for the years ended
September 30, 2000, 1999, 1998, 1997, and 1996, respectively. If Class A
shares had been charged for these expenses, the ratio of expenses to
average daily net assets would have been 1.65%, 1.70%, 1.91%, 1.75% and
2.00%, respectively, and the ratio of net investment income to average
daily net assets would have been 1.79%, 1.70%, 2.09%, 2.34% and 2.24%,
respectively. If Class B shares had been charged for these expenses, the
ratio of expenses to average daily net assets would have been 2.42%, 2.43%,
2.44% and 2.47%, respectively, and the ratio of net investment income to
average daily net assets would have been 1.02%, .94%, 1.62% and 3.12%,
respectively, for the years ended September 30, 2000, 1999, 1998 and for
the period ended September 30, 1997. If Class C shares had been charged for
these expenses, the ratio of expenses to average daily net assets would
have been 2.43%, 2.44%, 2.64%, 2.45% and 2.61%, respectively, and the ratio
of net investment income to average daily net assets would have been .99%,
.94%, 1.37%, 1.74% and 1.15%, respectively for the years ended
September 30, 2000, 1999, 1998, 1997, and 1996, respectively.
(d) Adjusted to an annual basis
20
<PAGE>
ADVANTUS INTERNATIONAL BALANCED FUND
NOTES TO FINANCIAL STATEMENTS - CONTINUED
<TABLE>
<CAPTION>
CLASS B
---------------------------------------------
PERIOD FROM
JANUARY 31,
YEAR ENDED SEPTEMBER 30, 1997(A) TO
---------------------------- SEPTEMBER 30,
2000 1999 1998 1997
------ ------- ------- -------------
<S> <C> <C> <C> <C>
Net asset value, beginning of year................ $11.66 $10.47 $ 13.23 $11.95
------ ------ ------- ------
Income from investment operations:
Net investment income........................... .11 .12 .19 .18
Net gains (losses) on securities (both realized
and unrealized)............................... .51 1.51 (1.93) 1.28
------ ------ ------- ------
Total from investment operations.............. .62 1.63 (1.74) 1.46
------ ------ ------- ------
Less distributions:
Dividends from net investment income............ (.21) (.06) (.10) (.18)
Distributions from net realized gains........... (.58) (.38) (.92) -
------ ------ ------- ------
Total distributions........................... (.79) (.44) (1.02) (.18)
------ ------ ------- ------
Net asset value, end of year...................... $11.49 $11.66 $ 10.47 $13.23
====== ====== ======= ======
Total return (b).................................. 5.32% 15.84% (13.63)% 12.30%
Net assets, end of year (in thousands)............ $4,647 $5,293 $ 4,869 $2,287
Ratio of expenses to average daily net assets
(c)............................................. 2.32% 2.43% 2.29% 2.33%(d)
Ratio of net investment income (loss) to average
daily net assets (c)............................ 1.12% .94% 1.77% 3.26%(d)
Portfolio turnover rate (excluding short-term
securities)..................................... 44.2% 73.8% 57.0% 73.4%
<CAPTION>
CLASS C
------------------------------------------------
YEAR ENDED SEPTEMBER 30,
------------------------------------------------
2000 1999 1998 1997 1996
------- ------ ------- ------ ------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year................ $11.66 $10.48 $ 13.24 $11.40 $10.77
------ ------ ------- ------ ------
Income from investment operations:
Net investment income........................... .11 .10 .18 .23 .15
Net gains (losses) on securities (both realized
and unrealized)............................... .51 1.52 (1.92) 2.19 .89
------ ------ ------- ------ ------
Total from investment operations.............. .62 1.62 (1.74) 2.42 1.04
------ ------ ------- ------ ------
Less distributions:
Dividends from net investment income............ (.20) (.06) (.10) (.30) (.20)
Distributions from net realized gains........... (.58) (.38) (.92) (.28) (.21)
------ ------ ------- ------ ------
Total distributions........................... (.78) (.44) (1.02) (.58) (.41)
------ ------ ------- ------ ------
Net asset value, end of year...................... $11.50 $11.66 $ 10.48 $13.24 $11.40
====== ====== ======= ====== ======
Total return (b).................................. 5.36% 15.71% (13.67)% 21.95% 9.93%
Net assets, end of year (in thousands)............ $1,728 $2,510 $ 3,074 $4,025 $1,811
Ratio of expenses to average daily net assets
(c)............................................. 2.33% 2.44% 2.49% 2.37% 2.61%
Ratio of net investment income (loss) to average
daily net assets (c)............................ 1.09% .94% 1.52% 1.82% 1.15%
Portfolio turnover rate (excluding short-term
securities)..................................... 44.2% 73.8% 57.0% 73.4% 56.1%
</TABLE>
------------
(a) Commencement of operations.
(b) 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.
(c) The Fund's Distributor and Adviser voluntarily waived or absorbed $73,544,
$35,105, $162,744, $114,735, and $53,123 in expenses for the years ended
September 30, 2000, 1999, 1998, 1997, and 1996, respectively. If Class A
shares had been charged for these expenses, the ratio of expenses to
average daily net assets would have been 1.65%, 1.70%, 1.91%, 1.75% and
2.00%, respectively, and the ratio of net investment income to average
daily net assets would have been 1.79%, 1.70%, 2.09%, 2.34% and 2.24%,
respectively. If Class B shares had been charged for these expenses, the
ratio of expenses to average daily net assets would have been 2.42%, 2.43%,
2.44% and 2.47%, respectively, and the ratio of net investment income to
average daily net assets would have been 1.02%, .94%, 1.62% and 3.12%,
respectively, for the years ended September 30, 2000, 1999, 1998 and for
the period ended September 30, 1997. If Class C shares had been charged for
these expenses, the ratio of expenses to average daily net assets would
have been 2.43%, 2.44%, 2.64%, 2.45% and 2.61%, respectively, and the ratio
of net investment income to average daily net assets would have been .99%,
.94%, 1.37%, 1.74% and 1.15%, respectively for the years ended
September 30, 2000, 1999, 1998, 1997, and 1996, respectively.
(d) Adjusted to an annual basis
21
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders
Advantus International Balanced Fund, Inc.:
We have audited the accompanying statement of assets and liabilities,
including the schedule of investments in securities, of the Advantus
International Balanced 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 audits to obtain reasonable assurance about whether the
financial statements and the financial highlights are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of September 30, 2000, by correspondence
with the custodian. 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
22
<PAGE>
ADVANTUS INTERNATIONAL BALANCED 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 period ended September 30, 2000. Dividends for the 2000 calendar year
will be reported to you on Form 1099-Div in late January 2001. Shareholders
should consult a tax adviser on how to report these distributions for state and
local purposes.
CLASS A
<TABLE>
<CAPTION>
PAYABLE DATE PER SHARE
------------ ----------
<S> <C>
Income distributions - taxable as dividend income, 0%
qualifying for deduction by corporations.
December 3, 1999*........................................... $ .0771
December 21, 1999........................................... .1497
March 23, 2000.............................................. .0283
June 22, 2000............................................... .1006
September 30, 2000.......................................... .0825
----------
$ .4382
==========
</TABLE>
*Represents $.0771 of short-term capital gains (taxable as dividend income).
CLASS B
<TABLE>
<CAPTION>
PAYABLE DATE PER SHARE
------------ ----------
<S> <C>
Income distributions - taxable as dividend income, 0%
qualifying for deduction by corporations.
December 3, 1999*........................................... $ .0771
December 21, 1999........................................... .1265
March 23, 2000.............................................. .0077
June 22, 2000............................................... .0764
----------
$ .2877
==========
</TABLE>
*Represents $.0771 of short-term capital gains (taxable as dividend income).
CLASS C
<TABLE>
<CAPTION>
PAYABLE DATE PER SHARE
------------ ----------
<S> <C>
Income distributions - taxable as dividend income, 0%
qualifying for deduction by corporations.
December 3, 1999*........................................... $ .0771
December 21, 1999........................................... .1249
June 22, 2000............................................... .0766
----------
$ .2786
==========
</TABLE>
*Represents $.0771 of short-term capital gains (taxable as dividend income).
CAPITAL GAINS DISTRIBUTIONS - TAXABLE AS LONG-TERM CAPITAL GAINS, 20% RATE
<TABLE>
<S> <C>
Total long-term capital gain distributions were............. $2,781,056
==========
</TABLE>
23
<PAGE>
ADVANTUS INTERNATIONAL BALANCED FUND
FEDERAL INCOME TAX INFORMATION (UNAUDITED) - CONTINUED
The fund has elected to pass-through foreign tax credits to its
shareholders. The following information will aid you in filing for your foreign
tax credit.
<TABLE>
<CAPTION>
CLASS A CLASS A CLASS B CLASS B CLASS C CLASS C
FOREIGN FOREGIN FOREIGN FOREGIN FOREIGN FOREGIN
INCOME TAX PAID INCOME TAX PAID INCOME TAX PAID
COUNTRY PER SHARE PER SHARE PER SHARE PER SHARE PER SHARE PER SHARE
------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Argentina....................... $0.003773 $ - $0.002201 $ - $0.002106 $ -
Australia....................... 0.041653 0.000428 0.024299 0.000250 0.023249 0.000239
Austria......................... 0.000437 0.000053 0.000255 0.000031 0.000244 0.000030
Belgium......................... 0.032291 - 0.018838 - 0.018024 -
Bermuda......................... 0.006006 - 0.003504 - 0.003352 -
Brazil.......................... 0.017740 0.000244 0.010349 0.000142 0.009902 0.000136
Canada.......................... 0.013447 - 0.007845 - 0.007506 -
Denmark......................... 0.006084 - 0.003549 - 0.003396 -
Finland......................... 0.010885 0.001664 0.006350 0.000971 0.006076 0.000929
France.......................... 0.041481 - 0.024199 - 0.023153 -
Germany......................... 0.032563 0.001190 0.018997 0.000694 0.018176 0.000664
Hong Kong....................... 0.013808 - 0.008055 - 0.007707 -
Indonesia....................... 0.001902 - 0.001110 - 0.001062 -
Israel.......................... 0.000775 - 0.000452 - 0.000433 -
Italy........................... 0.043484 0.003055 0.025367 0.001782 0.024271 0.001705
Japan........................... 0.042634 0.000770 0.024872 0.000449 0.023797 0.000430
Mexico.......................... 0.003896 0.000059 0.002273 0.000034 0.002175 0.000033
Netherlands..................... 0.028374 0.000991 0.016553 0.000578 0.015838 0.000553
New Zealand..................... 0.009347 0.000910 0.005453 0.000531 0.005217 0.000508
Norway.......................... 0.002100 0.000227 0.001225 0.000132 0.001172 0.000127
Peru............................ 0.003164 0.000133 0.001846 0.000078 0.001766 0.000074
Phillipines..................... 0.000126 0.000025 0.000074 0.000015 0.000070 0.000014
Spain........................... 0.022604 0.001681 0.013187 0.000981 0.012617 0.000938
South Africa.................... 0.002162 - 0.001261 - 0.001207 -
Sweden.......................... 0.018689 0.001205 0.010903 0.000703 0.010431 0.000673
Switzerland..................... 0.003491 0.000221 0.002037 0.000129 0.001949 0.000123
United Kingdom.................. 0.088250 0.005977 0.051483 0.003487 0.049259 0.003336
--------- --------- --------- --------- --------- ---------
TOTAL FOREIGN................... 0.491167 0.018833 0.286537 0.010987 0.274155 0.010512
--------- --------- --------- --------- --------- ---------
United States................... 0.016587 - 0.009677 - 0.009258 -
--------- --------- --------- --------- --------- ---------
TOTAL........................... $0.507754 $0.018833 $0.296213 $0.010987 $0.283414 $0.010512
========= ========= ========= ========= ========= =========
</TABLE>
24
<PAGE>
ADVANTUS INTERNATIONAL BALANCED FUND
SHAREHOLDER VOTING RESULTS
On April 17, 2000, a special meeting of shareholders of Advantus
International Balanced 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....................................... 3,818,544 9,963
Ellen S. Berscheid..................................... 3,819,169 9,338
Ralph D. Ebbott........................................ 3,818,544 9,963
Frederick P. Feuerherm................................. 3,819,616 8,891
William N. Westhoff.................................... 3,819,532 8,975
</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> <C>
A. Modify policy regarding borrowing and the issuance
of senior securities............................. 3,379,627 5,061 31,986
B. Modify policy regarding concentration in a
particular industry.............................. 3,380,146 4,542 31,986
C. Modify policy regarding investments in real estate
and commodities.................................. 3,380,086 4,602 31,986
D. Modify policy regarding lending................... 3,374,823 9,865 31,986
E. Eliminate policy restricting the pledging of
assets........................................... 3,374,358 9,669 32,647
F. Eliminate policy restricting margin purchases and
short sales...................................... 3,373,738 10,950 31,986
</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>
3,374,742 9,257 32,675
</TABLE>
(4) 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>
3,793,212 1,695 33,601
</TABLE>
25
<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
26
<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
27
<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.48651 Rev. 11-2000
